276 12th Street Apartments – Crystal City · 276 12th Street Apartments – Crystal City . by . Chastain W. Collins . Practicum Advisor: Dave Sislen . A practicum thesis submitted

276 12th Street Apartments – Crystal City

by

Chastain W. Collins

Practicum Advisor: Dave Sislen

A practicum thesis submitted to the Johns Hopkins University in conformity with

the requirements for the degree of Master of Science in Real Estate

Washington, DC

April, 2012

Executive Summary

Over the past three months, the partners at CWC Partners, LLC have been analyzing a site in Crystal City, Virginia. We specifically wanted to capitalize on Arlington County’s newly adopted Crystal City Sector Plan, and the plan’s goal of transforming Crystal City. Due to the government spending cutbacks and BRAC uncertainty, the partnership excluded office and retail developments. The economy is still on shaky ground and multi-family housing offers the best risk-adjusted returns in the current environment.

After exhaustive research into demographic changes, market trends, and financial markets, the partners set out to build a 276 unit apartment complex in Crystal City. The pages below will strategically outline our assumptions and analysis.

The partnership concluded that this site meets our strategic and financial goals. We intend to seek equity partners and financing for this project.

Arlington 4.1 Process

Arlington County differentiates itself from other localities with their insistence that the community takes a lead role in planning, reviewing, and approving long range land use policy and development approval. This is commonly referred to as the “Arlington Way.”

The purpose of this memorandum is to outline the site plan approval process for Arlington County. The addendum includes recent Rosslyn case studies and information on members of the County Board, Planning Commission, Transportation Commission, and Housing Commission.

Current Zoning

The current zoning of the property is C-O-1.5 that allows either a 1.5 FAR for office, 72 residential units per acre, or 110 hotel units. The reason that this site has not been developed is that the site’s density was allocated towards the adjacent office building in the 1980’s. Until the Crystal City Sector Plan was passed in the fall of 2010, this site could not be developed.

Crystal City Sector Plan

The Arlington County Board approved the Crystal City Sector Plan in the fall of 2010 to encourage redevelopment of Crystal City in the post-BRAC era. With the outflow of thousands of jobs to government owned facilities, Crystal City will be facing higher than normal vacancy rates for the next few years. The county government and stakeholders viewed the BRAC repercussions as an opportunity to reposition the area as a vibrant community with a sustainable balance of commercial, retail, and residential space.

In return for mostly private redevelopment of Crystal City into community that resembles the RBC corridor, the county increased the development potential by approximately 15 million sq. ft.

The plan identifies the subject site as a candidate for a new residential building. Historically, Crystal City has always been a place that was convenient to get to, but where no one really wanted to live. Housing was a commodity with no sense of place. The sector plan sets out to rebalance the community that can be a place that active 24/7, not just 9 to 5.

C-O Crystal City

In order the implement the sector plan, the Arlington County Board, in the fall of 2011, passed the C-O Crystal City zoning ordinance. This is a form based zoning ordinance rather than density based. The zoning ordinance does set out densities, but the allowed density is set low to force property owners to submit a 4.1 site plan application in order for the county board and community to have influence over the project. Under the 4.1, the applicant can basically barter for more density using community benefits (i.e. proffers) to garner increased density. The only absolute limitation within the ordinance is height limitation; the board would have to need to amend the zoning ordinance before the height limitation could be changed. The height limitations vary throughout the area in order to create an interesting skyline. Obviously, the taller buildings surround the metro. The proposed development site has a maximum height of 110 feet.

Proposed Zoning

Under the sector plan, this site falls into the “low category” and will necessitate a 4.1 application. The 4.1 process is explained in the next section. In the 4.1 process, the partnership intends to ask for an increase in the allowed density of residential units from 63 to 276. The cost of this increased density will be outlined in the financial analysis section of the memorandum. This will yield an FAR of 6.7 on the site.

Site Plan Submittal

The filing requirements for a Phased Development Site Plan (PDSP) and/or Final Site Plan (FSP) application include a site plan application form, a disclosure statement, a statement of support, a site plan as set forth in Administrative Regulation 4.1, and a filing fee. Zoning counsel prepares the site plan application form, disclosure statement, and statement of support with information provided by the owner. The civil engineer, architect, and transportation engineer prepare relevant drawings for the submission. The filing fee includes a base fee, a Dept. of Environmental Services fee, and an additional fee per acre, square foot (for office or commercial), and/or unit (for residential or hotel).

After the applicant submits its PDSP and/or FSP, counsel advises scheduling a “study group” meeting with County staff to review the application and respond to questions approximately 2 weeks after initial submission. The applicant should receive redlined plans from the County within 1 to 2 weeks of the “study group” session and/or 3 to 4 weeks after initial submission. The applicant then revises the application based on feedback from County staff and resubmits for formal acceptance.

Counsel advises allowing 3 to 4 months from initial submission to formal acceptance. Other developers warned us that the initial submission and acceptance process has become very political, even though it was designed to be a “check the box” exercise.

Acceptance & Interdepartmental Reviews

Once an application has been formally accepted, it is assigned to staff within 3 County divisions: Planning Division, Transportation Division, and Housing Division. Approximately 3 to 4 weeks after formal acceptance, we will call a meeting with the appropriate contacts within each division to review plans and directly address any comments and/or questions. Following this meeting with staff, we will meet with County Board members.

Community Stakeholder Meetings

After formal acceptance, the partnership will present to relevant community organizations, such as the Crystal City Community Board. Once the site plan has reached the SPRC stage, we will meet with the planning commissioners.

LRPC/SPRC Process

A PDSP may be required to go before the Long Range Planning Committee (LRPC) if it involves a change to the General Land Use Plan (GLUP). PDSP applicants may be required to schedule 3 to 4 meetings, held approximately 1 month apart, with the Long Range Planning Committee (LRPC). County staff may elect to draft guiding principles for the PDSP based on the LRPC meetings. Following the LRPC meetings, site plans are scheduled for meetings before the Site Plan Review Committee (SPRC).

The SPRC is a sub-committee of the Planning Commission. SPRC meetings provide a forum for the applicant, County staff, the Planning Commission, citizens groups, and advisory commissions to review and discuss site plans prior to public hearings held by the Planning Commission and County Board. The SPRC includes members of the County staff, Planning Commission, Transportation Commission, Housing Commission, and affected citizen groups.

SPRC meetings are generally held 6 to 8 weeks after formal acceptance. Typically, site plans will require 4 or 5 SPRC meetings held approximately 1 month apart. At the time of the first SPRC meeting, the partnership will schedule an introductory presentation before the Transportation Commission. During the site plan review process, the applicant will make presentations to Rosslyn Renaissance and other interested organizations.

The SPRC chair determines when the site plan is to move forward to public hearings. SPRC does not vote on projects but strives to reach consensus when possible. The applicant may refuse to continue meeting with the SPRC and request instead to be heard by the Planning Commission and County Board. 1

Commission Hearings & Recommendations

Once an application moves forward to public hearings, it will be heard before the Transportation Commission, Housing Commission, Planning Commission, and the County Board. Meetings with the Transportation Commission, Housing Commission, and Planning Commission are typically scheduled for the 2-week period before the County Board meeting.

The Planning Commission receives a written County staff report and a written report from the SPRC. Each commission will make a recommendation to the County Board for deferral, approval, or denial of the site plan. The Housing Commission is not required to vote on a recommendation if there is no change to the GLUP. The final public hearing will be before the Arlington County Board, which will ultimately defer, approve, or deny the application.

1 Per Arlington County

Site Plan Conditions

Upon approval of a PDSP and/or FSP, the County Board will establish specific conditions in the approval of the site plan. Phase Development Site Plan conditions typically address: total density by use upon full build out, phasing, total residential units, total hotel keys, maximum building height, parking ratios, public open space, affordable housing, public art, public open space, LEED certification, and any infrastructure requirements. Final Site Plan conditions typically include provisions for items such as off-street parking, landscaping, and construction of public facilities such as streets and utilities.

The county will establish general guidelines for the project’s community benefits package during the PDSP process. The community benefits package for each phase of development will be finalized during each FSP approval process. In the case of the Costco/Pentagon Centre PDSP, a number of community benefits were be committed upon approval of the PDSP, including affordable housing, public art fund contribution, utility fund contribution, and others were agreed to be determined at the time of FSP for each phase of development.

PDSPs typically expire 10 years after the date of county board approval if a garage permit has not been issued for the first building in Phase I. FSPs typically expire 3 years after the date of county board approval if a building permit has not been obtained. An extension may be requested by site plan amendment and may be granted at the sole discretion of the county board.

Permitting Process

Following PDSP approval, a Final Site Plan must be submitted and approved for each individual phase of development prior to the issuance of permits.

After FSP approval, the applicant can file for permits. Permits are issued in stages and include: demolition, excavation, garage, and full building. Prior to the issuance of each permit, the Zoning Office checks the plans for compliance with the approved site plan and conditions of approval. If the building plan fails to comply with the approved plan, the applicant must the either make the required adjustment to the building plan or file for a site plan amendment.

The entire process may take between 12 to 14 months from acceptance to county board hearing. For safe measure, WCLEW advises budgeting 14 to 18 months from final acceptance to county board hearing and 17 to 22 months from the preliminary submittal to county board hearing.

Site Selection

Arlington County has some of the greatest development potential in the DC metropolitan area. Residents and businesses benefit from a tax friendly environment compared to neighboring DC and Maryland. The current state income tax rate in Virginia is 5.75% on incomes over $17,000 compared to the DC rate 8.50% on incomes over $40,000 and Maryland has an approximate rate of 5% to over 8% depending on the local tax rate. Arlington County is home to the Department of Defense, 11 colleges and universities, and has more office space than several the downtown areas of Atlanta and Denver.

The county is well served by public transportation with direct access to Metro, the Capital Beltway, Reagan National Airport, and Virginia Railway Express. The Metropolitan Washington Council of Governments (COG) estimates that by 2030, the region will gain 1.2 million new jobs and 1.6 million new residents (pg. 12 sector plan). Also, according to the COG most of these jobs and residents will be concentrated in areas with dense neighborhood type development and easy access to mass transit. Also, according the COG study, the inner suburbs of Virginia will capture more than 60% of the employment and population growth.

Site Characteristics

The development site is located within the northern boundaries of the Crystal City submarket and is approximately 38,000 sq. ft. of land area. The site is located between 10th and 12th Streets at the terminus of Crystal Drive. An adjacent office building and 4 story loft style apartment surrounds the site. Near to the site is the newly constructed Long Bridge Park, which provides several multi-purpose fields, running or walking paths, and picnic areas. Arlington County has future plans to build a large aquatic center at the northern in of Long Bridge Park once funding is available.

The land is currently under the ownership of Vornado Realty Trust, which owns approximately 75% of the office space in Crystal City. The trust acquired the land through their acquisition of the Charles E. Smith Company, who was the original developer of Crystal City.

The site is within short walking distance to the Crystal City VRE station and the Crystal City Metro Station. The Metro station is located approximately 0.4 miles from the site. The Blue and Yellow lines are accessible from this station and downtown Washington (Gallery Place) travel time via the yellow line is about 10 minutes. The VRE station is located about 0.3 miles away from the site. Multiple Metro bus routes also increases the accessibility of other areas from this site viable without the use of a personal car. Zip Car also has a presence in Crystal City

The site is currently used as a park for the neighboring office and residential buildings. In 1987, The Charles E. Smith Company combined the density on the site with the adjacent site to develop Crystal Gateway North and the current site was left with no density allowed by zoning. Gateway North is mostly occupied by the Department of Defense and supporting consultants and is 95% occupied.

Monument Realty has been approved to develop the new Boeing headquarters just north of the subject site. The proximity of our proposed development to Boeing will enhance our desirability among the employees and consultant working for Boeing. We may have the opportunity to set aside units for Boeing’s corporate housing needs.

Market Data

The driver behind marketing apartments in the Crystal City area is that the area is well served by public transportation and contains all the amenities that a person needs within walking distance. Both the Blue and Yellow lines run through Crystal City and these lines link the area to Reagan National Airport, Pentagon City, Rosslyn, and Downtown Washington. The area is also well served by the GW Parkway, I-395, and Jefferson Davis Highway. As for amenities, renters only need to travel to the Pentagon City area (one mile away) to have access to world class shopping, grocery stores, and great restaurants.

Arlington County and the Washington, DC metro area has been the strongest employment center in the nation. The population of Arlington County is 208,000 according to the 2010 Census with 105,000 households. Of those 105,000 households, 53% rent their home, which is well above the national average. 63.3% of housing units are within multifamily units. The average household income in Arlington is $99,600. The federal government has kept the employment level high even with the Great Recession. According to the Delta Report, the current unemployment rate in the DC area is 5.5%, the lowest in the nation. The metro DC area is highly educated with nearly 50% of adults over 25 having a bachelor’s degree, and 1/3 of Arlington County adults 25 and older have a bachelor’s degree as well.

Demand Analysis

Crystal City and Pentagon City have proved to be areas where people want to live. Beginning with the development of Crystal City in the early 1960’s by the Charles E. Smith Company, 16 apartment complexes have been developed totaling nearly 9.3 million sq. ft. of housing with a population of about 8,100 people. The tables below provide a snapshot into the rent growth in the Crystal and Pentagon City submarkets (provided by REIS).

In Arlington County the housing supply has increased from 91,000 units in 2000 to 105,000 units in 2010, and it is expected that the county will require another 15,000 units in order to satisfy housing demand over the next 10 years. The housing supply in Crystal City has increased from 5,400 units in 2000 to nearly 8,000 units in 2010. The demand in the Crystal City area will be strong as people look to move to areas that are highly accessible to public transportation and offer amenities that might not be found in other markets such as downtown Washington. Below is a table that represents the estimated demand for housing in the Crystal City area.

On average 360 units will have to be developed in order to meet the housing demand of the Crystal City submarket. In order the capture a higher proportion of the demand, the development must position itself ahead of other projects in order to entice renters.

Supply Analysis

Several multi-family projects are currently being developed in the Crystal City and Pentagon City areas. Nine projects are currently in the development pipeline that will be delivering 2,700 units over the next 5 years. Another 490 units may also come to market, but the probability of those coming is not certain. The chart below shows the total competing pipeline within the submarket. The numbers to the left of the total column (i.e. 1.5,3.8) denote the number of buildings coming to market.

Rents in the Crystal City and Pentagon City area have been steadily increasing since the recession low of 2009. Even in the depth of the financial crisis, rents in the Pentagon and Crystal City area did not give up ground.

The table below gives detail in the product characteristics that have come to market in the recent past. In summary, the average rent of comparable product is $2.55 per sq. ft. The majority of projects in Crystal City and Pentagon City are focused on offering larger floor plans at higher price points. Our development has an opportunity to decrease the floor plan size from the historical average in Crystal City. But the key is not to decrease the unit size that may deter our target audience of professional people on short assignments and those without children.

The Crystal City submarket is mostly characterized as an office submarket that serves GSA or government contractors.

Comparable Developments

The above graphic, courtesy of the Noell Consulting Group, shows the competing developments to this site (subject site indicated with red star). There is a lot of product in the pipeline, but the subject site offers the direct access to Longbridge Park and great views of the Washington skyline. More detailed information is below.

The Palantine –

Developed in 2008 by Monument Realty, The Palantine is an 11 story 251 unit building with full amenities and 24 hour concierge. The building is currently 96% leased at an average monthly rate of $2.69 per sq. ft. Unit sizes range from 594 to 1,471 sq. ft. This development has 9’ ceilings with fairly high-end finishes.

North Tract Lofts –

This site is directly north of the development and offers great insight into the viability of the project. The North Tract Lofts are built using 3A construction and are 6 stories. The apartments have direct access to the adjacent Longbridge Park. The complex offers on-site parking, storage, and has a 24 hour fitness club. The 184 unit building rents at an average rate of $2.50 per foot with an average unit size of 1,000 sq. ft. North Tract Lofts was completed in May of 2010 and leased-up at an average rate of 16 units per month. Currently, the project is 89% leased.

220 20th St –

Located on Crystal Drive in Crystal City, the 220 20th St. development is a 265 high rise apartment building with average rents of $2.74 per foot per month. Unit sizes range from 570 to 1,600 sq. ft. This is a more upscale building with a full time concierge and fitness facility on site. The building was converted from an office building in the past five years and included a full renovation including new skin. Currently, the building is 97% leased.

The Gramercy at Metropolitan Park

Metropolitan Park is a master planned residential complex designed by Robert A.M. Stern. The building was delivered in 2007 as a full amenity apartment community. The first phases of Metropolitan were completed in 2008 but the souring economy slowed the development of future phases. The Gramercy has 379 units with an average rent of $2.46 and average unit size of 1,063 square feet. The building is currently 94% leased.

Development Program –

The challenge with the Crystal and Pentagon City submarket is that there is a fair amount of product coming online in the next several years. In order to capture an above market rate of demand, this development must offer a different type of experience. The development team intends to market to the “live to work” crowd. With the height limitation of 110’ and the setbacks required for approval, the building will be approximately 254,200 FAR sq. ft. with an additional 92,500 sq. ft. of garage space. We assumed an efficiency factor of 82% from gross to rentable area yielding 208,520 rentable sq. ft. The project’s FAR is 6.7.

The unit layouts will favor smaller than the average unit size in the submarket, such as studio apartments, and offer high finishes relative to the market average. The combination of the site’s convenience and its strong views and trail access will make it attractive to a mix of singles and couples, many over the age of 35. Included in this are pied-a-terre as well as those seeking a quality home in a convenient location. Below is a table that shows the unit mix. Over 70% of the building’s units will have 1 bedroom or less.

Level Studio JR 1 1 Bed 1 Bed w/ Den 2 Bed Total

B1 3 0 4 0 2 9Ground 4 4 13 1 4 262 to 9 48 24 88 8 56 22410 2 1 10 1 3 17

Total 57 29 115 10 65 276

Percentage 21% 11% 42% 4% 24% 100%

The building will include a staffed front desk that will be staffed from 6 am to midnight and all the normal amenities (ATM, valet dry cleaning, and package system) of a higher end building will be offered at this building. There will be no retail uses within this building.

The unit finishes will include high-end countertops with stainless steel appliances. Most of the floors will either be carpeted and the bathrooms will have ceramic tile.

The Crystal City Sector Plan dictates the number of spaces required to be 1 space per residential unit. The ratio may be higher than needed per the market (roughly 0.8 spaces per unit), but parking has always been an issue with the community. We have designed for 276 spaces in the garage. Fortunately, the layout of the building (twice as long as wide) lends itself to an efficient garage layout. We estimate that 335 sq. ft. of garage space will be required for each parking space.

Construction Type –

The building will be constructed using concrete in order to gain an additional level compared with steel. The foundation will be slab-on-grade. Although the Potomac River is close to the development site, the water table is fairly low as indicated by soil borings furnished by the seller. We have set aside additional funds in case a more expensive foundation system is needed to accommodate poor soil or a high water table. The exterior façade will be masonry with punch

windows. A full glass curtainwall building is more expensive and the marginal increase in rents does not justify the investment.

Cost Summary

Several good faith cost estimates were provided by the construction and development division of Vornado Realty Trust. Since the site has yet to be developed, environmental risk from demolition is a non-factor. Unfortunately, the site could possess buried materials and left over from prior uses of the site; the site proximity to the river and railroad tracks made it a convenient location for industrial activities before the development of Crystal City.

Land Costs Total Per Unit Per RSF % TotalDirect Land 7,280,000$ 26,377$ 34.91$ 7.5%TDRs / Sector Plan Allocation -$ -$ -$ 0.0%Closing Costs -$ -$ -$ 0.0%Subtotal Land Costs 7,280,000$ 26,377$ 34.91$ 7.5%

ProffersLand -$ -$ -$ 0.0%Hard Costs - Within GMP -$ -$ -$ 0.0%Hard Costs - Outside GMP -$ -$ -$ 0.0%Soft Costs 11,961,000$ 43,337$ 57.36$ 12.3%Subtotal Proffers 11,961,000$ 43,337$ 57.36$ 12.3%

Hard CostsDemolition & Abatement -$ -$ -$ 0.0%Sitework 1,495,000$ 5,417$ 7.17$ 1.5%Base Building Construction 45,783,000$ 165,880$ 219.56$ 47.3%Garage Construction 6,370,000$ 23,080$ 30.55$ 6.6%Costs Outside GMP 950,000$ 3,442$ 4.56$ 1.0%Tenant Improvements -$ -$ -$ 0.0%Hard Costs Contingency 4,095,000$ 14,837$ 19.64$ 4.2%Subtotal Hard Costs 58,693,000$ 212,656$ 281.47$ 60.6%

Soft CostsPre-Development & Due Dil igence 313,000$ 1,134$ 1.50$ 0.3%Design & Engineering 4,513,000$ 16,351$ 21.64$ 4.7%Legal & Accounting Fees 350,000$ 1,268$ 1.68$ 0.4%Permits, Licenses, Bonds, & Fees 2,189,000$ 7,931$ 10.50$ 2.3%Insurance 126,000$ 457$ 0.60$ 0.1%Taxes & Util ities (During Construction) 578,000$ 2,094$ 2.77$ 0.6%Marketing 548,000$ 1,986$ 2.63$ 0.6%Other Soft Costs 176,000$ 638$ 0.84$ 0.2%Testing & Inspections 337,000$ 1,221$ 1.62$ 0.3%Overhead & Development Fee 1,213,000$ 4,395$ 5.82$ 1.3%Soft Cost Contingency 1,115,000$ 4,040$ 5.35$ 1.2%Subtotal Soft Costs 11,458,000$ 41,514$ 54.95$ 11.8%

Financing CostsFinancing Fees 678,000$ 2,457$ 3.25$ 0.7%Recordation, Professional Fees, Title, & Inspection Fees 787,000$ 2,851$ 3.77$ 0.8%Construction Loan Interest 6,026,000$ 21,833$ 28.90$ 6.2%Subtotal Financing Costs 7,491,000$ 27,141$ 35.92$ 7.7%

Total Project Costs 96,883,000$ 351,025$ 464.62$ 100.0%

Incremental Costs (less Land and Proffers) 77,642,000$ 281,312$ 372.35$ 80.1%

Land Value

Since the site will require community benefits to Arlington County for the approval of the additional density, the development team has split the value of the density into two tranches. The first tranche contain the units that are currently allowed by-right on the site (63) on the site. The value of the first tranche is $65,000 per unit. The second tranche contain the units that require approval by the county board (213). These units are valued at $15,000 per unit. The added proffer costs of nearly $45,000 per unit will bring the value of the unapproved units in-line with the by-right units. Combined land and proffer costs total approximately 20% of the total development costs.

Proffers

Since this site does not possess the density required to make the development economically viable, we will be required to offer some type of monetary contribution to Arlington County for the density. This may be in the form cash, land or something of like value that the county wants. Arlington County would like to expand Longbridge Park to include an indoor aquatic facility at the north end of the property. The development team feels that the investment in the aquatic facility would be beneficial to our development, and would not be deemed a total sunk costs. Wherever possible, proffer money should be spent as close to the site as possible to increase the value of the development. We have set the total value of the per unit density needed at $45,000 per unit.

Development Timeline

It is expected that the entitlement timeframe will take approximately 18 months to complete. The team has already begun conceptual design work and expects to have a package completed for the county process by August. Building construction is expected to begin in the winter of 2014 with delivery of the first units by December of 2016. From our research, the expected lease-up rate is approximately 16 units per month in the Crystal and Pentagon City submarket. If we are successful in leasing the building at this pace, stabilization will be reached by the end of the 3rd quarter of 2018. This is not an aggressive lease-up rate, and a lease rate of 20 units per month may be attainable.

Our investment objective is to dispose of the asset once the property is stabilized (defined as 95% of the units occupied). The rational for disposition at stabilization will be explained in the financial section.

LAND FUNDING

North Tract 2/1/2014 - -

PRE-DEVELOPMENT

Conceptual Design / Submission Prep 5/1/2012 7/31/2012 3 monthsEntitlement 8/1/2012 1/31/2014 18 monthsApproval Date 2/1/2014 - - DDs 2/1/2014 5/31/2014 4 monthsCDs 6/1/2014 1/31/2015 8 monthsDemo Delay After Approval 2/1/2014 1/31/2014 - monthsBuilding Permit Delay After CDs 2/1/2015 1/31/2015 - months

CONSTRUCTION

Demo Permit 2/1/2014 4/30/2014 3 monthsDemolition & Abatement 3/1/2014 6/30/2014 4 monthsBuilding Permit 2/1/2015 3/31/2015 2 monthsSitework Costs 4/1/2015 3/31/2017 24 monthsBase Building & Garage Construction 4/1/2015 3/31/2017 24 monthsSubstantial Completion 4/1/2017 - - Begin Retail Tenant Work 1/1/2017 - (3) monthsInitial Tenant Work Duration 1/1/2017 6/30/2017 6 months

LEASE-UP

First Unit Turnover / Initial Occupancy 12/1/2016 - (4) monthsLease Up 12/1/2016 8/31/2018 21 monthsStabil ization 9/1/2018 - -

FINANCING

Construction Loan Closing (end of month) 3/31/2015 - - Permanent Loan Closing (end of month) 9/30/2018 - -

SALEHold Period 9/1/2018 9/30/2018 1 months

Financial Analysis

Rent

Using data gathered from the various comparable sites, and after thorough due diligence, the development team compiled rent and operating expense data for the site. We believe that current average market rent for our project is $2.88 per sq. ft. After escalating this rent by 3% per year until the first unit comes to market, we arrived at an average rent of $3.30 per sq. ft. A detailed rent matrix by unit type is provided in the table below. The building’s unit mix is weighed heavily towards smaller units, as we believe this is the product type people will demand; it also yields the highest marginal rents. A 3% growth rate is also applied to the stabilized rent as units roll to the market during the investment period.

UnitUnit Type % Mix Count RSF Current Occupancy Current Occupancy

2012$ 2016$ 2012$ 2016$Studio 20.7% 57 566 1,631$ 1,868$ 3.15$ 3.61$ JR 1 10.5% 29 680 1,958$ 2,242$ 3.00$ 3.44$ 1 Bed 41.7% 115 755 2,175$ 2,491$ 2.85$ 3.26$ 1 Bed w/ Den 3.6% 10 831 2,393$ 2,740$ 2.29$ 2.62$ 2 Bed 23.6% 65 944 2,719$ 3,113$ 2.73$ 3.13$ Average - - 756 2,176$ 2,492$ 2.88$ 3.30$ Total Per Year 200.0% 276 208,520 26,110$ 29,898$ 34.55$ 39.56$

Rent / Resi RSF / Mo.Rent / Unit / Mo.

Vacancy

Excluding the 21-month lease-up period, the average vacancy rate is expected to average 6.5%. This includes physical vacancy and a 1.5% allowance for lease concessions that may affect cash flows.

Other Income

We estimate that income from parking and other fees will total $2,500 per month. The current average parking rate is around $100 per space in the Crystal City area. Storage and other small fees are also included in the other income category.

Operating Expenses and Capital Reserves

Based on current newly developed assets in the area, operating expenses and real estate taxes are estimated to be nearly $10,000 per unit per year. A breakdown is below.

We also have a $400 per unit per year capital reserve in place.

Stabilized Revenue

The projected NOI after capital reserves is $5.7 million per year.

Capital Structure

Sources and Uses

Sources Amount % per Unit per RSFDebt 67,818,000$ 70% 245,717$ 325.24$ Equity 29,065,000 30% 105,308 139.39 Total Sources 96,883,000$ 100% 351,025$ 464.62$

Uses Amount % per Unit per RSFLand 7,280,000$ 8% 26,377$ 34.91$ Proffers 11,961,000 12% 43,337 57.36 Hard Costs 58,693,000 61% 212,656 281.47 Soft Costs 11,458,000 12% 41,514 54.95 Financing Costs 7,491,000 8% 27,141 35.92 Total Uses 96,883,000$ 100% 351,025$ 464.62$

Debt

Based upon information provided by the Vornado Capital Markets Group and discussions will other local apartment developers, this project should gain favorable financing terms. The strong apartment market in suburban Virginia, along with this site’s individual characteristics, will enable the development team to secure a construction loan with a loan-to-cost ration of 70%. Specific information regarding the loan is broken out below. The sponsor does not wish to retain the property past stabilization, therefore we will not proceed with development until we have secured a take-out vehicle for the project.

Financing InformationTotal Loan $67,818,000Type Interest Only, Covered

Construction LoanTerm 36 months with 2, 1

year extensionsFee 1.00%Interest Rate Assumed 4.50%Debt Yield 8.46%Recourse Carve-out guaranty

Equity

The project will require $29.1 million in equity in order to meet lenders’ requirements. CWC Partners, the project’s sponsor, is prepared to contribute $2.9 million to the partnership or 10% of the total partnership equity. We are seeking an equity commitment of $26.2 million from a preferred equity investor. The preferred equity investment will earn 10% return per year on the outstanding balance of the equity investment, compounded monthly, and payable once the construction loan has been paid in full. The preferred return will be paid pari passu i.e. 90% to preferred investor and 10% to sponsor. Once both parties have been returned their respective equity investments, the sponsor will receive a 20% promote. After the promote, the remaining cash flows are split 80% to the preferred investor and 20% to the sponsor.

Return Summary

Before setting out analyzing this project, the partners internally discussed what return would be acceptable for this project given the current market for multi-family housing in Crystal City. After analyzing published sales and speaking with other investors, the partnership determined that a leveraged IRR greater than 12% would be acceptable. Multi-family is a relatively safe asset when compared to other commercial real estate ventures; demand can be induced by decreasing rents. Obviously, this is not the situation any investor wants to be in, but a reduced cash flow is better than no cash flow.

Above represents the three possible return outcomes. CWC Partners is a merchant developer and does not have the expertise to manage a large apartment complex. We also are opportunistic and want to recycle our capital as soon as we bring a project to stabilization. Therefore, cap rates will strongly dictate our return profile.

Since the partnership does not intend to retain the project once it has reached stabilization, the project’s return will be dictated by interest rates and the market’s risk perception of the asset. If cap rates remain low, the probability of achieving an acceptable return will be high.

If cap rates increase compared to our base cap rate of 4.9%, we will retain the asset until cap rates become more favorable. A more detailed financial analysis is offered in the exhibit.

INVESTOR CASH FLOWS, 4.90% CapSPONSOR

Equity Investment ($2,906,496)Proceeds $7,138,451Net Cash $4,231,955

Profit $4,231,955% of Total Profit 20.1%IRR 25.72%Multiple 2.46x

EQUITY PARTNEREquity Investment ($26,158,462)Proceeds $43,025,639Net Cash $16,867,177



Equity Investment ($2,906,496)Proceeds $3,916,957Net Cash $1,010,461


EQUITY PARTNEREquity Investment ($26,158,462)Proceeds $35,252,615Net Cash $9,094,153



Equity Investment ($2,906,496)Proceeds $3,013,816Net Cash $107,321

Profit $107,321% of Total Profit 10.0%IRR 0.95%Multiple 1.04x

EQUITY PARTNEREquity Investment ($26,158,462)Proceeds $27,124,348Net Cash $965,886

Profit $965,886% of Total Profit 90.0%IRR 0.95%Multiple 1.04x

Professional Team

Sponsor

CWC Partners, led by the venerable Chas Collins, will be the project manager and team leader. With nearly 6 year of commercial real estate experience, one year with the largest diversified REIT in the US (Vornado Realty Trust). He will be the person in charge with day-to-day oversight of the project. Mr. Collins has a BA in economics from Washington and Lee University and a MS in real estate from the Johns Hopkins University.

Construction Manager – Clark Construction Group, LLC

Architect of Record – Cooper Carry

Civil Engineering – VIKA

Attorney – Venable LLP

Conclusion

CWC Partners initially chose this site due to the partnership’s familiarity with the site. We have worked and developed in Arlington before, and we believe that Arlington is one of the strongest real estate submarkets in the US. The demographic make-up of the county is truly astonishing and will only continue to improve. Project after project has proven successful in the Arlington marketplace. As Crystal City begins to morph through the implementation of the Crystal City Sector Plan, this market will only become more enticing to people who want to live in a true live, work, play environment.

After careful analysis of the financial, and reviewing the local market data, CWC Partners recommends that the project go forward. Using our pro forma assumptions, the project meets the initial investment hurdles.

References

Arlington County Department of Community Planning, Housing, and Development. Development Highlights 2011. March 27, 2012. Retrieved from http://www.arlingtonva.us/Departments/CPHD/planning/data_maps/CPHDPlanningDataandMapsMain.aspx

Arlington County Department of Community Planning, Housing, and Development. Arlington Virginia: PROFILE 2012 Update. February 7, 2012. Retrieved from http://www.arlingtonva.us/Departments/CPHD/planning/data_maps/CPHDPlanningDataandMapsMain.aspx

Arlington County Department of Community Planning, Housing, and Development. Round 8.1 Forecast. February 7, 2012. Retrieved from http://www.arlingtonva.us/Departments/CPHD/planning/data_maps/CPHDPlanningDataandMapsMain.aspx

Arlington County Department of Community Planning, Housing, and Development. Crystal City Sector Plan. February 7, 2012. Retrieved from http://www.arlingtonva.us/departments/CPHD/planning/docs/CPHDPlanningDocsMain.aspx

Arlington County Department of Community Planning, Housing, and Development. General Land Use Plan. February 7, 2012. Retrieved from http://www.arlingtonva.us/departments/cphd/planning/docs/CPHDPlanningDocsGLUP.aspx

Arlington County Department of Community Planning, Housing, and Development. Section 25C “C-O Crystal City.” February 7, 2012. Retrieved from http://www.arlingtonva.us/Departments/CPHD/planning/zoning/CPHDPlanningZoningOrdinanceCode.aspx

Arlington County Department of Community Planning, Housing, and Development. Administration Regulation 4.1. February 7, 2012. Retrieved from http://www.arlingtonva.us/Departments/CPHD/planning/zoning/CPHDPlanningZoningOrdinanceCode.aspx

Delta Associates. Washington/Baltimore Office Market Report 1st Quarter 2012. (PDF Document)

Noell Consulting. Internal Documents. January 18, 2012.

REIS Reports. Pentagon City Sub-market Trend Report. April 21, 2012. (PDF Document).

Personal Interviews: Joe Jewel (Vornado), Sang Park (Vornado), Gordon Fraley (Vornado)

http://www.arlingtonva.us/Departments/CPHD/planning/data_maps/CPHDPlanningDataandMapsMain.aspx




http://www.arlingtonva.us/departments/CPHD/planning/docs/CPHDPlanningDocsMain.aspx

http://www.arlingtonva.us/departments/cphd/planning/docs/CPHDPlanningDocsGLUP.aspx

http://www.arlingtonva.us/Departments/CPHD/planning/zoning/CPHDPlanningZoningOrdinanceCode.aspx




Exhibits

Exhibit A – Pro Forma and Financial Returns

Exhibit B – Aerial Photographs and Maps

Exhibit C – Arlington Site Plan 4.1 Process

Exhibit D – Crystal City Existing Conditions

Exhibit E – Current Crystal City Zoning Map

Exhibit F – Crystal City after Sector Plan Implementation

Exhibit G – Crystal City Sector Plan Detail of Project Site

Exhibit A – Pro Forma and Financial Returns

CWC Partners Date 4/26/2012276 12th Street Apartments Units 276 PRO FORMA SUMMARY RSF 208,520

ERROR

PROJECT COSTS STABILIZED PRO FORMA

Land Costs Total Per Unit Per RSF % Total Revenue Total Per Unit Per RSF Per RSF/moDirect Land 7,280,000$ 26,377$ 34.91$ 7.5% Rental Revenue 8,578,000$ 31,080$ 41.14$ 3.43$ TDRs / Sector Plan Allocation -$ -$ -$ 0.0% Rent Abatement -$ -$ -$ -$ Closing Costs -$ -$ -$ 0.0% Expense Reimbursement -$ -$ -$ -$ Subtotal Land Costs 7,280,000$ 26,377$ 34.91$ 7.5% Parking Income 478,000$ 1,732$ 2.29$ 0.19$

Other Income 249,000$ 902$ 1.19$ 0.10$ Proffers Gross Potential Revenue 9,305,000$ 33,714$ 44.62$ 3.72$

Land -$ -$ -$ 0.0% Vacancy & Credit Loss (6.5%) (605,000)$ (2,192)$ (2.90)$ (0.24)$ Hard Costs - Within GMP -$ -$ -$ 0.0% Effective Gross Revenue 8,700,000$ 31,522$ 41.72$ 3.48$ Hard Costs - Outside GMP -$ -$ -$ 0.0%Soft Costs 11,961,000$ 43,337$ 57.36$ 12.3% ExpensesSubtotal Proffers 11,961,000$ 43,337$ 57.36$ 12.3% Operating Expenses (1,877,000)$ (6,801)$ (9.00)$ (0.75)$

Real Estate Taxes (969,000)$ (3,511)$ (4.65)$ (0.39)$ Hard Costs Total Expenses (2,846,000)$ (10,312)$ (13.65)$ (1.14)$

Demolition & Abatement -$ -$ -$ 0.0%Sitework 1,495,000$ 5,417$ 7.17$ 1.5% Net Operating Income 5,854,000$ 21,210$ 28.07$ 2.34$ Base Building Construction 45,783,000$ 165,880$ 219.56$ 47.3%Garage Construction 6,370,000$ 23,080$ 30.55$ 6.6% Capital Reserves (116,000)$ (420)$ (0.56)$ (0.05)$ Costs Outside GMP 950,000$ 3,442$ 4.56$ 1.0%Tenant Improvements -$ -$ -$ 0.0% Net Operating Income After Reserves 5,738,000$ 20,790$ 27.52$ 2.29$ Hard Costs Contingency 4,095,000$ 14,837$ 19.64$ 4.2%Subtotal Hard Costs 58,693,000$ 212,656$ 281.47$ 60.6% SCHEDULE 0.67$

Soft Costs Substantial Completion 4/1/2017Pre-Development & Due Diligence 313,000$ 1,134$ 1.50$ 0.3% Initial Occupancy 12/1/2016Design & Engineering 4,513,000$ 16,351$ 21.64$ 4.7% Stabilization 9/1/2018Legal & Accounting Fees 350,000$ 1,268$ 1.68$ 0.4% Sale Date 9/30/2018Permits, Licenses, Bonds, & Fees 2,189,000$ 7,931$ 10.50$ 2.3%Insurance 126,000$ 457$ 0.60$ 0.1%Taxes & Utilities (During Construction) 578,000$ 2,094$ 2.77$ 0.6% PROFITABILITY (after reserves)Marketing 548,000$ 1,986$ 2.63$ 0.6%Other Soft Costs 176,000$ 638$ 0.84$ 0.2% Yield on TPC 5.92% 5.92%Testing & Inspections 337,000$ 1,221$ 1.62$ 0.3% Yield on Incremental Costs 7.39% 7.39%Overhead & Development Fee 1,213,000$ 4,395$ 5.82$ 1.3%Soft Cost Contingency 1,115,000$ 4,040$ 5.35$ 1.2%Subtotal Soft Costs 11,458,000$ 41,514$ 54.95$ 11.8% Project Value (assuming 4.90% cap rate) 117,102,000$ 424,283$ 561.59$

Value Created (Value less TPC) 20,219,000$ 73,257$ 96.96$ Financing Costs

Financing Fees 678,000$ 2,457$ 3.25$ 0.7% Unleveraged IRR 11.70%Recordation, Professional Fees, Title, & Inspection Fees 787,000$ 2,851$ 3.77$ 0.8% Leveraged IRR 15.02%Construction Loan Interest 6,026,000$ 21,833$ 28.90$ 6.2% Peak Equity Multiple 1.72 Subtotal Financing Costs 7,491,000$ 27,141$ 35.92$ 7.7%

Unleveraged NPV @ 10.00% 2,720,000$ 9,855$ 13.04$ Total Project Costs 96,883,000$ 351,025$ 464.62$ 100.0% Leveraged NPV @ 10.00% 4,435,000$ 16,069$ 21.27$

Incremental Costs (less Land and Proffers) 77,642,000$ 281,312$ 372.35$ 80.1% FINANCING SUMMARY

Adjusted Costs (TPC less Capitalized Costs) 96,883,000$ 351,025$ 464.62$ Less: Land at Basis ($29/FAR SF) (7,280,000)$ (26,377)$ (34.91)$ Plus: Land at Market ($29/FAR SF) 7,280,000$ 26,377$ 34.91$ Total Lender Budget 96,883,000$ 351,025$ 464.62$

Debt 67,818,000$ 245,717$ 70.0%Equity 29,065,000$ 105,308$ 30.0%

Land at Market ($0/FAR SF) 7,280,000$ 26,377$ 34.91$ Leasing Commissions to LL Broker/ -$ -$ -$ Cash 21,785,000$ 78,931$ 104.47$

Peak Equity Required 29,065,000$ 105,308$ 139.39$

Land at Basis ($29/FAR SF)

Land at Market ($29/FAR SF)

Waterfall Cash Flows to each tranche:Total I. Pari Passu to an IRR of 10.00% 42,002,390.7

Sponsor 10.00% 4,200,239.1PROJECT FUNDING Equity Partner 90.00% 37,802,151.7Equity ContributionsSponsor 10.0% (2,906,495.8)Equity Partner 90.0% (26,158,462.2)Total 100.0% (29,064,958.0)

Cash Proceeds for Distribution 50,044,125.8 Cash left for Distribution 8,041,735.1

Project Cash Flow 20,979,167.8 II. Sponsor Promote 20.00% 1,608,347.0Profit $20,979,167.8IRR 15.02%Multiple 1.72x

Cash to Equity 80.00% 6,433,388.1STRUCTURE Sponsor 20.00% 1,286,677.6Tier 1 0.000261158 Equity Partner 80.00% 5,146,710.5BoP BalanceEquity Contributions (29,064,958.0) INVESTOR CASH FLOWS, 5.4% CapAccrual 10.00% (12,937,432.7) SPONSORPaydown 42,002,390.7 Equity Investment ($2,906,496)EoP Balance Proceeds $7,095,264Cash left for distribution 8,041,735.1 Net Cash $4,188,768IRR Check 10.00% 12,937,432.7

Profit $4,188,768Tier 2 0.000261158 % of Total Profit 20.0%Starting Balance IRR 25.54%Equity Contributions (29,064,958.0) Multiple 2.44xAccrual 10.00% (12,937,432.7)Paydown 42,002,390.7 EQUITY PARTNERBalance Equity Investment ($26,158,462)Cash left for distribution 8,041,735.1 Proceeds $42,948,862IRR Check 10.00% 12,937,432.7 Net Cash $16,790,400


CWC Partners Blue numbers are hardcoded inputs.276 12th Street ApartmentsREVENUE & OPERATING EXPENSES ASSUMPTIONS

RENTAL REVENUE RENT ESCALATION TABLE AnnualPeriod Start End Duration Mrkt Rent

Unit Current - Approval A 5/1/2012 1/31/2014 21 mos. 3.00%Unit Type % Mix Count RSF Current Occupancy Current Occupancy Approval - Construction B 2/1/2014 3/31/2015 14 mos. 3.00%

2012$ 2016$ 2012$ 2016$ Construction - Occupancy C 4/1/2015 11/30/2016 20 mos. 3.00%Studio 20.7% 57 566 1,631$ 1,868$ 3.15$ 3.61$ JR 1 10.5% 29 680 1,958$ 2,242$ 3.00$ 3.44$ Compound Average Growth Rate Period Start End Duration Mrkt Rent1 Bed 41.7% 115 755 2,175$ 2,491$ 2.85$ 3.26$ Current - Approval A 5/1/2012 1/31/2014 21 mos. 3.00%1 Bed w/ Den 3.6% 10 831 2,393$ 2,740$ 2.29$ 2.62$ Current - Construction B 5/1/2012 3/31/2015 35 mos. 3.00%2 Bed 23.6% 65 944 2,719$ 3,113$ 2.73$ 3.13$ Current - Occupancy C 5/1/2012 11/30/2016 55 mos. 3.00%Average - - 756 2,176$ 2,492$ 2.88$ 3.30$ DELIVERY ASSUMPTIONSTotal Per Year 200.0% 276 208,520 26,110$ 29,898$ 34.55$ 39.56$

Units Delivered Per Month 68 unitsOTHER INCOME & PARKING INCOME Delivery Period 4.0 months

Rate LEASE UP ASSUMPTIONSCategory Quantity Current Current Occupancy Current Occupancy

2012$ 2012$ 2016$ 2012$ 2016$ Units Occupying at First Unit Turnover 8 unitsParking Income Units Moving In Per Month 16 units

Standard Parking 331 100$ 1,440$ 1,649$ 1.91$ 2.18$ Lease Up Duration 21 monthsReserved Parking - -$ -$ -$ -$ -$ Tenant Retention 50.0%Subtotal Parking Revenue 331 100$ 1,440$ 1,649$ 1.91$ 2.18$ Parking Expenses 0.0% -$ -$ -$ -$ Operating Expenses During Lease Up 110.0% of stabilized op exSubtotal Parking Income - - 1,440$ 1,649$ 1.91$ 2.18$ Real Estate Taxes During Lease Up (calculated) 97.7% of stabilized real estate taxes

Other Income OPERATING EXPENSES & TAXESQuick Estimate 276 750$ 750$ 859$ 0.99$ 1.14$ Other - -$ -$ -$ -$ -$ Lease Up Subtotal Other Income - - 750$ 859$ 0.99$ 1.14$ Category Current Occupancy Current Occupancy Adjustment

2012$ 2016$ 2012$ 2016$Total Parking & Other Income - 2,190$ 2,508$ 2.90$ 3.32$ Quick Op Ex Estimate (excludes RET) -$ -$ -$ -$ 110.0%

Payroll 2,000$ 2,290$ 2.65$ 3.03$ 110.0%CAPITAL RESERVES Marketing 300$ 344$ 0.40$ 0.45$ 110.0%

Office Operations 200$ 229$ 0.26$ 0.30$ 110.0%Rate Utilities 800$ 916$ 1.06$ 1.21$ 110.0%

Category Quantity Current Current Occupancy Current Occupancy Landscaping 100$ 115$ 0.13$ 0.15$ 110.0%2012$ 2012$ 2016$ 2012$ 2016$ Redecorating 250$ 286$ 0.33$ 0.38$ 110.0%

Replacement Reserve 276 350$ 350$ 401$ 0.46$ 0.53$ Maintenance 1,000$ 1,145$ 1.32$ 1.52$ 110.0%Other - -$ -$ -$ -$ -$ Non-Routine -$ -$ -$ -$ 110.0%Total Capital Reserves - - 350$ 401$ 0.46$ 0.53$ Management Fee (calculated) 2.0% 566$ 648$ 0.75$ 0.86$ 110.0%

Other taxes & fees -$ -$ -$ -$ 110.0%VACANCY & CREDIT LOSS Insurance 375$ 429$ 0.50$ 0.57$ 110.0%

TDM Contributions 49$ 56$ 0.07$ 0.07$ 110.0%Residential - Physical Vacancy 5.00% based on % of units Other -$ -$ -$ -$ 110.0%Residential - Economic Vacancy 1.50% includes concessions and non-revenue units Subtotal Operating Expenses 5,640$ 6,459$ 7.47$ 8.55$ 110.0%Residential - Credit Loss 0.00% included in economic vacancyTotal Residential Vacancy & Credit Loss 6.50% Real Estate Taxes (calculated) 2,912$ 3,334$ 3.85$ 4.41$ 97.7%

Other -$ -$ -$ -$ 97.7%CONCESSIONS Subtotal Real Estate Taxes 2,912$ 3,334$ 3.85$ 4.41$ 97.7%

Average Concessions 1.00 months Total Operating Expenses & Taxes 8,552$ 9,793$ 11.32$ 12.96$ 105.8%Concessions Until Occupancy Reaches: 93.50%Concessions Amortized or Paid Upfront? 1Concessions on Renewals? 1

Rent / Resi RSF / Mo.Rent / Unit / Mo.

Cost / Resi RSF / YrCost / Unit / Yr

Cost / Unit / Yr Cost / Resi RSF / Yr

Rent / Unit / Yr Rent / Resi RSF / Yr

Do not edit

CWC Partners Blue numbers are hardcoded inputs.

276 12th Street Apartments ERROR

ASSUMPTIONS

OWNERSHIP SCHEDULE (see "SCHEDULE" tab for inputs) STABILIZED PROJECT COSTSStart End Duration Total Per GSF Per RSF

Collins Partners 100.00% Pre-Development 5/1/2012 1/31/2015 2.8 yrs Land 28.64$ 34.91$ Other 0.00% Construction (includes demo) 2/1/2014 6/30/2017 3.4 yrs Proffers 47.05$ 57.36$ Other 0.00% Lease Up Period 12/1/2016 8/31/2018 1.8 yrs Hard Costs 230.89$ 281.47$ Total 100.00% Total Development Period 5/1/2012 8/31/2018 6.3 yrs Soft Costs 45.07$ 54.95$

Financing 29.47$ 35.92$ Total Project Costs 381.13$ 464.62$

CONSTRUCTION FINANCING MARKET LAND VALUE Current2012$

Maximum loan-to-cost Ratio 65.00% Value per FAR SF (Lender Use) 28.64$ LTC needed for positive net perm loan proceeds 58.07% Value per FAR SF (For Taxes) - Residential 65.00$ Interest Rate 4.50%Lender Perspective Land Value 2 PROFFERS RESIDUAL VALUE

PERMANENT FINANCING Proffers Required For Additional Density? 1 Cap Rate 4.90%Additional Density Value Per FAR SF (if applicable) 70.57$ Cost of Sale 2.00%

Maximum Loan-to-value Ratio 75.00%Minimum DSCR - Ratio 1.15 Minimum DSCR - Constant 8.00% ESCALATION TABLE (rent escalation inputs on "REVENUE & OP EX" tab)Minimum Debt Yield 10.00% Period Start End Duration Mrkt Rent Op Ex RET Hard Cost Soft CostInterest Rate 6.00% Current - Approval A 5/1/12 1/31/14 21 mos. 3.00% 3.00% 3.00% 2.00% 2.00%Amortization (years) 30 Approval - Construction B 2/1/14 3/31/15 14 mos. 3.00% 3.00% 3.00% 2.00% 2.00%Refinance Before Sale? 2 Construction - Occupancy C 4/1/15 11/30/16 20 mos. 3.00% 3.00% 3.00% 2.00% 2.00%

Occupancy - Stabilization D 12/1/16 8/31/18 21 mos. 3.00% 3.00% 3.00% 2.00% 2.00%DISCOUNT RATES / EQUITY CARRY After Stabilization E 9/1/18 --- --- 3.00% 3.00% 3.00% 2.00% 2.00%

Unleveraged Discount Rate 10.00% Compound Average Growth Rate Period Start End Duration Mrkt Rent Op Ex RET Hard Cost Soft CostLeveraged Discount Rate 10.00% Current - Approval A 5/1/12 1/31/14 21 mos. 3.00% 3.00% 3.00% 2.00% 2.00%

Current - Construction B 5/1/12 3/31/15 35 mos. 3.00% 3.00% 3.00% 2.00% 2.00%Current - Occupancy C 5/1/12 11/30/16 55 mos. 3.00% 3.00% 3.00% 2.00% 2.00%

BASIS DEPRECIATION (see "DRAW" tab for more detail) Current - Stabilization D 5/1/12 8/31/18 76 mos. 3.00% 3.00% 3.00% 2.00% 2.00%Equity carry calculation does not assume depreciation. After Stabilization E 9/1/18 --- --- 3.00% 3.00% 3.00% 2.00% 2.00%

Occupancy - Stabilization F 12/1/16 8/31/18 21 mos. 3.00% 3.00% 3.00% 2.00% 2.00%

96,883,000$

Annual Growth Rates

7,280,000$

58,693,000$ 11,458,000$ 7,491,000$

11,961,000$

CWC Partners Blue numbers are hardcoded inputs.276 12th Street ApartmentsSCHEDULE

All dates must be entered as the first of the month unless otherwise noted.SUMMARY Start End Duration

TIMING Start End DurationPre-Development 5/1/2012 1/31/2015 2.8 yrs

Rents / Costs Current As Of: (1) 5/1/2012 - - Construction (includes demo) 2/1/2014 6/30/2017 3.4 yrsDraw Start (must be Jan. 1st) 5/1/2012 - - Lease Up Period 12/1/2016 8/31/2018 1.8 yrsTenant Move-Out 5/1/2012 - -

Total Development Period 5/1/2012 8/31/2018 6.3 yrsLAND FUNDING

North Tract 2/1/2014 - -

PRE-DEVELOPMENT

Conceptual Design / Submission Prep 5/1/2012 7/31/2012 3 monthsEntitlement 8/1/2012 1/31/2014 18 monthsApproval Date 2/1/2014 - - DDs 2/1/2014 5/31/2014 4 monthsCDs 6/1/2014 1/31/2015 8 monthsDemo Delay After Approval 2/1/2014 1/31/2014 - monthsBuilding Permit Delay After CDs 2/1/2015 1/31/2015 - months

CONSTRUCTION

Demo Permit 2/1/2014 4/30/2014 3 monthsDemolition & Abatement 3/1/2014 6/30/2014 4 monthsBuilding Permit 2/1/2015 3/31/2015 2 monthsSitework Costs 4/1/2015 3/31/2017 24 monthsBase Building & Garage Construction 4/1/2015 3/31/2017 24 monthsSubstantial Completion 4/1/2017 - - Begin Retail Tenant Work 1/1/2017 - (3) monthsInitial Tenant Work Duration 1/1/2017 6/30/2017 6 months

LEASE-UP

First Unit Turnover / Initial Occupancy 12/1/2016 - (4) monthsLease Up 12/1/2016 8/31/2018 21 monthsStabilization 9/1/2018 - -

FINANCING

Construction Loan Closing (end of month) 3/31/2015 - - Permanent Loan Closing (end of month) 9/30/2018 - - Note:

(1)SALE

Hold Period 9/1/2018 9/30/2018 1 months (2)Sale Date (end of month) 9/30/2018 - OK

Overlap between First Unit Turnover and Substantial Completion assumes the delivery of 68 units per month.

Do not delete. These line items contain key inputs that drive all escalation calculations.

CWC Partners Blue numbers are hardcoded inputs.276 12th Street ApartmentsSQUARE FOOTAGE DETAIL

Gross GFA to Above BuildingFloor Above Floor GSF Grade Total Residential Store Service Other Parking Residential Store Residential Store Building Total R/U Residential Store Total

Grade? Area Ratio Non-Parking GSF Area Area Area Area Area Area Area Area Area Common Rentable Ratio Area Area Area(GFA) GSF Area Area

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19S15/

(6x11) (12+13+14) (S15-S14) (12x16) 13 (17+18)PH Yes - 1.00 - - - - - - - 94.0% - 10 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 9 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 8 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 7 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 6 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 5 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 4 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 3 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 2 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% - 1 Yes 25,420 1.00 25,420 25,420 25,420 - - - - 94.0% -

G1 No - 1.00 - 30,833 - - - - 30,833 94.0% - G2 No - 1.00 - 30,833 - - - - 30,833 94.0% - G3 No - 1.00 - 30,833 - - - - 30,833 94.0% -

Total --- 254,200 --- 254,200 346,700 254,200 - - - 92,500 0.8202971 94.0% 208,520 - --- 208,520 --- 208,520 - 208,520 254,200 1.00 254,200 254,200 254,200 - - - - --- --- --- --- --- --- --- --- --- ---

SITE AREA AREA SUMMARY PARKING SUMMARY FLOORS (excluding PH)Land Area Pro rata % Pro rata SF GSF RSF Residential Retail Total

North Tract 38,000 100% 38,000 Residential 254,200 208,520 Parking - New Spaces 276 - 276 Above Grade Floors 9 Other - 100% - Retail - - Parking - Existing Spaces 0 0 - Below Grade Floors 3 Other - 100% - Service - - Total Parking Spaces 276 - 276 Total 12 Other - 100% - Other - - Oversell 20.0%Total 38,000 100% 38,000 Subtotal 254,200 208,520 Total Permits 331 - 331

Blended Efficiency 82.0%ZONING SUMMARY Parking Area 92,500 GSF

Total Pro rata Above Grade Parking - - Parking Efficiency 335 GSF / new spaceProposed FAR 6.69 Below Grade Parking 92,500 - Proposed GFA 254,200 Subtotal 92,500 - Parking Ratios

Residential (spaces per) 1.00 per 1.00 UnitBy-Right FAR 1.75 1.75 Total 346,700 208,520 Residential (permits per) 1.20 per 1.00 UnitBy-Right GFA 66,313 66,313 Residential (permits per) 1.00 per 0.83 Unit

Above Grade Area 254,200 - Existing GFA Below Grade Area 92,500 - Other - - Total 346,700 - Other - - Total - -

BASIC RENTABLE AREASGSF-TO-RSF RATIOGROSS SQUARE FOOTAGE

Above Grade

RENTABLE AREA

CWC Partners276 12th Street ApartmentsLAND COST ASSUMPTIONS

Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF

Direct LandBy-Right 63 65,000$ None 4,082,645$ 14,792$ 16.06$ 19.58$ 4,082,645$ 14,792$ 16.06$ 19.58$

Unapproved Units 213 15,000$ None 3,197,851$ 11,586$ 12.58$ 15.34$ 3,197,851$ 11,586$ 12.58$ 15.34$

N/A None -$ -$ -$ -$ -$ -$ -$ -$

N/A None -$ -$ -$ -$ -$ -$ -$ -$

Total Direct Land 7,280,496$ 26,379$ 28.64$ 34.92$ 7,280,496$ 26,379$ 28.64$ 34.92$

TDRs / Sector Plan AllocationTDRs None -$ -$ -$ -$ -$ -$ -$ -$ Sector Plan Allocation None -$ -$ -$ -$ -$ -$ -$ -$

Total TDRs / Sector Plan Allocation -$ -$ -$ -$ -$ -$ -$ -$

Closing CostsTitle Insurance-Owner None -$ -$ -$ -$ -$ -$ -$ -$ Land Commissions None -$ -$ -$ -$ -$ -$ -$ -$

Other Closing CostsLegal None -$ -$ -$ -$ -$ -$ -$ -$ Subdivision None -$ -$ -$ -$ -$ -$ -$ -$ Survey None -$ -$ -$ -$ -$ -$ -$ -$ Recordation 0.00% of Land None -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Other Closing Costs -$ -$ -$ -$ -$ -$ -$ -$

Total Closing Costs -$ -$ -$ -$ -$ -$ -$ -$

Total Land Costs 7,280,496$ 26,379$ 28.64$ 34.92$ 7,280,496$ 26,379$ 28.64$ 34.92$

Unit Inputs (2012$) Current Costs (2012$) Escalated Costs

CWC Partners276 12th Street ApartmentsHARD COST ASSUMPTIONS


Demolition & AbatementHazardous Material Abatement 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Soil Remediation 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Before Indirect Costs -$ -$ -$ -$ -$ -$ -$ -$

Indirect CostsEstimate 11.00% -$ -$ -$ -$ -$ -$ -$ -$ Builder's Risk Insurance Construction -$ -$ -$ -$ -$ -$ -$ -$ Gross Receipts Tax Construction -$ -$ -$ -$ -$ -$ -$ -$ General Liability Insurance 0.00% -$ -$ -$ -$ -$ -$ -$ -$ General Contractor Fee 0.00% -$ -$ -$ -$ -$ -$ -$ -$ General Conditions Construction -$ -$ -$ -$ -$ -$ -$ -$ Payment and Performance Bond Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Indirect Costs -$ -$ -$ -$ -$ -$ -$ -$

Subtotal After Indirect Costs -$ -$ -$ -$ -$ -$ -$ -$

AlternatesOther Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Alternates -$ -$ -$ -$ -$ -$ -$ -$

Total Demolition & Abatement -$ -$ -$ -$ -$ -$ -$ -$

SiteworkSitework 254,200 GSF 5.00$ Construction 1,271,000$ 4,605$ 5.00$ 6.10$ 1,346,571$ 4,879$ 5.30$ 6.46$

Subtotal Sitework 1,271,000$ 4,605$ 5.00$ 6.10$ 1,346,571$ 4,879$ 5.30$ 6.46$

Off Site Improvements Construction -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Before Indirect Costs 1,271,000$ 4,605$ 5.00$ 6.10$ 1,346,571$ 4,879$ 5.30$ 6.46$

Indirect CostsEstimate 11.00% 139,810$ 507$ 0.55$ 0.67$ 148,123$ 537$ 0.58$ 0.71$ Builder's Risk Insurance Construction -$ -$ -$ -$ -$ -$ -$ -$ Gross Receipts Tax Construction -$ -$ -$ -$ -$ -$ -$ -$ General Liability Insurance 0.00% -$ -$ -$ -$ -$ -$ -$ -$ General Contractor Fee 0.00% -$ -$ -$ -$ -$ -$ -$ -$ General Conditions Construction -$ -$ -$ -$ -$ -$ -$ -$ Payment and Performance Bond Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Indirect Costs 139,810$ 507$ 0.55$ 0.67$ 148,123$ 537$ 0.58$ 0.71$

Subtotal After Indirect Costs 139,810$ 507$ 0.55$ 0.67$ 148,123$ 537$ 0.58$ 0.71$

AlternatesGSA Premium 0.00% -$ -$ -$ -$ -$ -$ -$ -$ LEED Platinum Premium 0.00% -$ -$ -$ -$ -$ -$ -$ -$ LSDBE Premium 0.00% -$ -$ -$ -$ -$ -$ -$ -$ Other Construction -$ -$ -$ -$ -$ -$ -$ -$ Other Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Alternates -$ -$ -$ -$ -$ -$ -$ -$

Total Sitework 1,410,810$ 5,112$ 5.55$ 6.77$ 1,494,694$ 5,416$ 5.88$ 7.17$

Unit Inputs (2012$) Escalated CostsCurrent Costs (2012$)




Base Building ConstructionPreconstruction Fee Construction -$ -$ -$ -$ -$ -$ -$ -$

Base BuildingResidential Structure 254,200 GSF 170.00$ Construction 43,214,000$ 156,572$ 170.00$ 207.24$ 45,783,427$ 165,882$ 180.11$ 219.56$ Retail Structure 0 GSF 151.00$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Loading / Service Structure 0 GSF 125.00$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Base Building 254,200 GSF 43,214,000$ 156,572$ 170.00$ 207.24$ 45,783,427$ 165,882$ 180.11$ 219.56$



Subtotal After Indirect Costs 43,214,000$ 156,572$ 170.00$ 207.24$ 45,783,427$ 165,882$ 180.11$ 219.56$


Total Base Building Construction 43,214,000$ 156,572$ 170.00$ 207.24$ 45,783,427$ 165,882$ 180.11$ 219.56$

Garage ConstructionAbove Grade Parking 0 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Below Grade Parking 92,500 GSF 65.00$ Construction 6,012,500$ 21,784$ 23.65$ 28.83$ 6,369,993$ 23,080$ 25.06$ 30.55$ Parking Equipment Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Garage Construction 92,500 GSF 65.00$ 6,012,500$ 21,784$ 23.65$ 28.83$ 6,369,993$ 23,080$ 25.06$ 30.55$



Subtotal After Indirect Costs 6,012,500$ 21,784$ 23.65$ 28.83$ 6,369,993$ 23,080$ 25.06$ 30.55$


Total Garage Construction 6,012,500$ 21,784$ 23.65$ 28.83$ 6,369,993$ 23,080$ 25.06$ 30.55$




Costs Outside GMPFF&E

Allowance 254,200 GSF 1.50$ Construction 381,300$ 1,382$ 1.50$ 1.83$ 403,971$ 1,464$ 1.59$ 1.94$ Other 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal FF&E 381,300$ 1,382$ 1.50$ 1.83$ 403,971$ 1,464$ 1.59$ 1.94$

Start Up CostsSecurity System 254,200 GSF 0.37$ Construction 95,146$ 345$ 0.37$ 0.46$ 100,804$ 365$ 0.40$ 0.48$ Signage Construction 5,000$ 18$ 0.02$ 0.02$ 5,297$ 19$ 0.02$ 0.03$ Fitness Center Construction 22,500$ 82$ 0.09$ 0.11$ 23,838$ 86$ 0.09$ 0.11$ Fitness Center Equipment Construction 100,000$ 362$ 0.39$ 0.48$ 105,946$ 384$ 0.42$ 0.51$ Common Area Construction 1,000$ 4$ 0.00$ 0.00$ 1,059$ 4$ 0.00$ 0.01$ Rooftop Terrace Construction 30,000$ 109$ 0.12$ 0.14$ 31,784$ 115$ 0.13$ 0.15$ Window Washing/General Clean 254,200 GSF 0.13$ Construction 33,581$ 122$ 0.13$ 0.16$ 35,578$ 129$ 0.14$ 0.17$ Management/Engineering Offices Construction 7,500$ 27$ 0.03$ 0.04$ 7,946$ 29$ 0.03$ 0.04$ Building Operations Telephone System Construction 24,500$ 89$ 0.10$ 0.12$ 25,957$ 94$ 0.10$ 0.12$ Walk-Off, Switchgear Mats Construction 2,000$ 7$ 0.01$ 0.01$ 2,119$ 8$ 0.01$ 0.01$ Tools and Supplies Construction 30,000$ 109$ 0.12$ 0.14$ 31,784$ 115$ 0.13$ 0.15$ Misc. Construction 50,000$ 181$ 0.20$ 0.24$ 52,973$ 192$ 0.21$ 0.25$ Other 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Start Up Costs 401,228$ 1,454$ 1.58$ 1.92$ 425,084$ 1,540$ 1.67$ 2.04$

InsuranceBuilder's Risk - Delay of Completion 254,200 GSF 0.020$ Construction 5,164$ 19$ 0.02$ 0.02$ 5,471$ 20$ 0.02$ 0.03$ Builder's Risk 254,200 GSF 0.185$ Construction 47,100$ 171$ 0.19$ 0.23$ 49,901$ 181$ 0.20$ 0.24$ Other 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Other 52,264$ 189$ 0.21$ 0.25$ 55,372$ 201$ 0.22$ 0.27$

OtherAir Monitoring (Indoor Air Quality) Construction -$ -$ -$ -$ -$ -$ -$ -$ Parking Meters 1 units 12,000$ Construction 12,000$ 43$ 0.05$ 0.06$ 12,713$ 46$ 0.05$ 0.06$ Signage (Code Compliance) Construction 50,000$ 181$ 0.20$ 0.24$ 52,973$ 192$ 0.21$ 0.25$ Signage (Exterior Building) Construction -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Other 62,000$ 225$ 0.24$ 0.30$ 65,686$ 238$ 0.26$ 0.32$

Total Costs Outside GMP 896,792$ 3,249$ 3.53$ 4.30$ 950,114$ 3,442$ 3.74$ 4.56$

Hard Costs ContingencyConstruction Contingency 7.50% 3,865,058$ 14,004$ 15.20$ 18.54$ 4,094,867$ 14,836$ 16.11$ 19.64$

Total Hard Costs Contingency 3,865,058$ 14,004$ 15.20$ 18.54$ 4,094,867$ 14,836$ 16.11$ 19.64$

Tenant ImprovementsRetail Tenant Improvements

Retail 0 RSF -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$ Retail 0 RSF -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$ N/A 0 RSF -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$ N/A 0 RSF -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$

Subotal Retail Tenant Improvements -$ -$ -$ -$ -$ -$ -$ -$

Total Tenant Improvements -$ -$ -$ -$ -$ -$ -$ -$

Total Hard Costs 55,399,160$ 200,722$ 217.94$ 265.68$ 58,693,095$ 212,656$ 230.89$ 281.48$

CWC Partners276 12th Street ApartmentsSOFT COST ASSUMPTIONS

Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF

Soft Costs

Pre-Development & Due DiligencePre-Development 208,520 RSF 1.50$ None 312,779$ 1,133$ 1.23$ 1.50$ 312,779$ 1,133$ 1.23$ 1.50$

Due DiligenceLegal: Acquisition None -$ -$ -$ -$ -$ -$ -$ -$ Legal: JV/Partnership None -$ -$ -$ -$ -$ -$ -$ -$ Consultant Fees None -$ -$ -$ -$ -$ -$ -$ -$ Miscellaneous None -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Due Diligence -$ -$ -$ -$ -$ -$ -$ -$

Total Pre-Development & Due Diligence 312,779$ 1,133$ 1.23$ 1.50$ 312,779$ 1,133$ 1.23$ 1.50$

Design & EngineeringArchitect Costs

Architect - Base Building (of Record)Base building - PDSP 254,200 GSF None -$ -$ -$ -$ -$ -$ -$ -$ Base building - 4.1 254,200 GSF None -$ -$ -$ -$ -$ -$ -$ -$ Base building 208,520 RSF 7.00$ None 1,459,637$ 5,289$ 5.74$ 7.00$ 1,459,637$ 5,289$ 5.74$ 7.00$ Additional Services 7.00% None 102,175$ 370$ 0.40$ 0.49$ 102,175$ 370$ 0.40$ 0.49$ Subtotal Architect - Base Building (of Record) 1,561,811$ 5,659$ 6.14$ 7.49$ 1,561,811$ 5,659$ 6.14$ 7.49$

Architect - DesignDesign - PDSP 254,200 GSF None -$ -$ -$ -$ -$ -$ -$ -$ Design - 4.1 208,520 RSF None -$ -$ -$ -$ -$ -$ -$ -$ Design 208,520 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Additional Services 7.00% None -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Architect - Design -$ -$ -$ -$ -$ -$ -$ -$

Architect - TenantProgram Review/Blocking & Stacki 208,520 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Initial Space Planning 208,520 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Architect - Tenant -$ -$ -$ -$ -$ -$ -$ -$

Architect - Interior (excl fees related 254,200 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Architect - Landscape 254,200 GSF 0.39$ None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Architect - Master Plan 254,200 GSF None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Architect Costs 1,661,811$ 6,021$ 6.54$ 7.97$ 1,661,811$ 6,021$ 6.54$ 7.97$

Engineering CostsEngineer - Civil

Civil Engineering 346,700 GSF 0.87$ None 300,000$ 1,087$ 1.18$ 1.44$ 300,000$ 1,087$ 1.18$ 1.44$ Survey None -$ -$ -$ -$ -$ -$ -$ -$ Additional Services 7.00% None 21,000$ 76$ 0.08$ 0.10$ 21,000$ 76$ 0.08$ 0.10$ Subtotal Engineer - Civil 321,000$ 1,163$ 1.26$ 1.54$ 321,000$ 1,163$ 1.26$ 1.54$

Engineer - StructuralStructural Engineering 208,520 RSF 0.85$ None 177,242$ 642$ 0.70$ 0.85$ 177,242$ 642$ 0.70$ 0.85$ Tenant Review 208,520 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Additional Services 7.00% None 12,407$ 45$ 0.05$ 0.06$ 12,407$ 45$ 0.05$ 0.06$ Subtotal Engineer - Structural 189,649$ 687$ 0.75$ 0.91$ 189,649$ 687$ 0.75$ 0.91$

Engineer - MEP Base BuildingMEP Engineering 276 Units 1,500$ None 414,000$ 1,500$ 1.63$ 1.99$ 414,000$ 1,500$ 1.63$ 1.99$ Additional Services 7.00% None 28,980$ 105$ 0.11$ 0.14$ 28,980$ 105$ 0.11$ 0.14$ Subtotal Engineer - MEP Base Building 442,980$ 1,605$ 1.74$ 2.12$ 442,980$ 1,605$ 1.74$ 2.12$

Engineer - Geotechnical 208,520 RSF 0.48$ None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Engineer - MEP Tenant 208,520 RSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Engineer - Transportation 208,520 RSF 0.24$ None 50,000$ 181$ 0.20$ 0.24$ 50,000$ 181$ 0.20$ 0.24$

Subtotal Engineering Costs 1,103,629$ 3,999$ 4.34$ 5.29$ 1,103,629$ 3,999$ 4.34$ 5.29$



Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSFUnit Inputs (2012$) Current Costs (2012$) Escalated Costs

Consultant CostsConsultant - Acoustical 208,520 GSF 0.24$ None 50,000$ 181$ 0.20$ 0.24$ 50,000$ 181$ 0.20$ 0.24$ Consultant - Audio Visual 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Code 254,200 GSF 0.30$ None 75,000$ 272$ 0.30$ 0.36$ 75,000$ 272$ 0.30$ 0.36$ Consultant - Commissioning 254,200 GSF 0.40$ None 101,680$ 368$ 0.40$ 0.49$ 101,680$ 368$ 0.40$ 0.49$ Consultant - Curtainwall 254,200 GSF 0.40$ None 101,680$ 368$ 0.40$ 0.49$ 101,680$ 368$ 0.40$ 0.49$ Consultant - Development 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Elevator 254,200 GSF 0.39$ None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Consultant - Environmental 254,200 GSF 0.22$ None 55,000$ 199$ 0.22$ 0.26$ 55,000$ 199$ 0.22$ 0.26$ Consultant - FAA 254,200 GSF 0.14$ None 35,000$ 127$ 0.14$ 0.17$ 35,000$ 127$ 0.14$ 0.17$ Consultant - Fire Alarm 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Food Service 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Furniture 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Graphics/Signage 254,200 GSF 0.12$ None 30,000$ 109$ 0.12$ 0.14$ 30,000$ 109$ 0.12$ 0.14$ Consultant - Hardware 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - LEED 254,200 GSF 0.39$ None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Consultant - Lighting Design 254,200 GSF 0.20$ None 50,000$ 181$ 0.20$ 0.24$ 50,000$ 181$ 0.20$ 0.24$ Consultant - Parking 254,200 GSF 0.10$ None 25,000$ 91$ 0.10$ 0.12$ 25,000$ 91$ 0.10$ 0.12$ Consultant - Permit Expediter 254,200 GSF 0.10$ None 26,000$ 94$ 0.10$ 0.12$ 26,000$ 94$ 0.10$ 0.12$ Consultant - Security 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Utility 254,200 GSF 0.30$ None 75,000$ 272$ 0.30$ 0.36$ 75,000$ 272$ 0.30$ 0.36$ Consultant - Telecom 254,200 GSF 0.04$ None 10,000$ 36$ 0.04$ 0.05$ 10,000$ 36$ 0.04$ 0.05$ Consultant - Window Washing 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Consultant Costs 834,360$ 3,023$ 3.28$ 4.00$ 834,360$ 3,023$ 3.28$ 4.00$

Consultant OtherConsultant - Energy Modeling 254,200 GSF 0.06$ None 15,252$ 55$ 0.06$ 0.07$ 15,252$ 55$ 0.06$ 0.07$ Consultant - IT 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Residential Relocation 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Consultant - Retail 254,200 GSF 0.10$ None 25,000$ 91$ 0.10$ 0.12$ 25,000$ 91$ 0.10$ 0.12$ Consultant - Schedule/Claims 254,200 GSF 0.20$ None 50,000$ 181$ 0.20$ 0.24$ 50,000$ 181$ 0.20$ 0.24$ Consultant - Other 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Consultant Other 90,252$ 327$ 0.36$ 0.43$ 90,252$ 327$ 0.36$ 0.43$

Other Design CostsInterior Design 208,520 RSF 1.15$ None 239,797$ 869$ 0.94$ 1.15$ 239,797$ 869$ 0.94$ 1.15$ Land Planner 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Miscellaneous / Additional Services 254,200 GSF 0.39$ None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Models/Renderings 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Owner's Representative 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Peer Review Architectural 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Peer Review Mechanical 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Peer Review Structural 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$ Surveys 254,200 GSF -$ None -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ Subtotal Other Design Costs 339,797$ 1,231$ 1.34$ 1.63$ 339,797$ 1,231$ 1.34$ 1.63$

Reimbursable Expenses-DesignArchitectural 12.00% 199,417$ 723$ 0.78$ 0.96$ 199,417$ 723$ 0.78$ 0.96$ Engineering 12.00% 132,435$ 480$ 0.52$ 0.64$ 132,435$ 480$ 0.52$ 0.64$ Other Consultants 12.00% 110,953$ 402$ 0.44$ 0.53$ 110,953$ 402$ 0.44$ 0.53$ Other Design Costs 12.00% 40,776$ 148$ 0.16$ 0.20$ 40,776$ 148$ 0.16$ 0.20$ Printing None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Reimbursable Expenses-Design 483,582$ 1,752$ 1.90$ 2.32$ 483,582$ 1,752$ 1.90$ 2.32$

Total Design & Engineering 4,513,431$ 16,353$ 17.76$ 21.65$ 4,513,431$ 16,353$ 17.76$ 21.65$



Legal & Accounting FeesAccounting None -$ -$ -$ -$ -$ -$ -$ -$ Legal - Contracts None -$ -$ -$ -$ -$ -$ -$ -$ Legal - Easements/Plats None -$ -$ -$ -$ -$ -$ -$ -$ Legal - General None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$ Legal - Leasing 208,520 RSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Legal - Litigation None -$ -$ -$ -$ -$ -$ -$ -$ Legal - Zoning None 250,000$ 906$ 0.98$ 1.20$ 250,000$ 906$ 0.98$ 1.20$ Other Consultants None -$ -$ -$ -$ -$ -$ -$ -$ Adjacent Property Owner Coordination None -$ -$ -$ -$ -$ -$ -$ -$

Total Legal & Accounting Fees 350,000$ 1,268$ 1.38$ 1.68$ 350,000$ 1,268$ 1.38$ 1.68$

Permits, Licenses, Bonds, & FeesBuilding Permits

Excavation Calculated 23,106$ 84$ 0.09$ 0.11$ 24,480$ 89$ 0.10$ 0.12$ Footing to Grade Calculated 96,276$ 349$ 0.38$ 0.46$ 102,000$ 370$ 0.40$ 0.49$ Building Calculated 264,577$ 959$ 1.04$ 1.27$ 280,308$ 1,016$ 1.10$ 1.34$ Right-of-Way Calculated 185,705$ 673$ 0.73$ 0.89$ 196,747$ 713$ 0.77$ 0.94$ Crane, Fencing, & Elevator Calculated 5,940$ 22$ 0.02$ 0.03$ 6,293$ 23$ 0.02$ 0.03$ Subtotal Building Permits 575,604$ 2,086$ 2.26$ 2.76$ 609,829$ 2,210$ 2.40$ 2.92$

Certificate of OccupancyMaster Calculated 8,027$ 29$ 0.03$ 0.04$ 8,789$ 32$ 0.03$ 0.04$ Core & Shell Calculated 3,189$ 12$ 0.01$ 0.02$ 3,492$ 13$ 0.01$ 0.02$ Partial Calculated -$ -$ -$ -$ -$ -$ -$ -$ Parking Calculated 1,849$ 7$ 0.01$ 0.01$ 1,958$ 7$ 0.01$ 0.01$ Subtotal Certificate of Occupancy Permits 13,064$ 47$ 0.05$ 0.06$ 14,240$ 52$ 0.06$ 0.07$

Licenses Calculated -$ -$ -$ -$ -$ -$ -$ -$

Bonds Calculated 37,925$ 137$ 0.15$ 0.18$ 40,180$ 146$ 0.16$ 0.19$

FeesSite Plan Fees Calculated 291,988$ 1,058$ 1.15$ 1.40$ 302,284$ 1,095$ 1.19$ 1.45$ Permit Review Fees Calculated 16,514$ 60$ 0.06$ 0.08$ 17,496$ 63$ 0.07$ 0.08$ Misc. Fees Calculated 69,962$ 253$ 0.28$ 0.34$ 74,122$ 269$ 0.29$ 0.36$ Utility Fees Calculated 1,076,084$ 3,899$ 4.23$ 5.16$ 1,130,429$ 4,096$ 4.45$ 5.42$ Subtotal Fees 1,454,548$ 5,270$ 5.72$ 6.98$ 1,524,331$ 5,523$ 6.00$ 7.31$

Total Permits, Licenses, Bonds, & Fees 2,081,142$ 7,540$ 8.19$ 9.98$ 2,188,580$ 7,930$ 8.61$ 10.50$

InsuranceContractor's Pollution 254,200 GSF 0.18$ Construction 46,954$ 170$ 0.18$ 0.23$ 49,746$ 180$ 0.20$ 0.24$ Excess Liability 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Other Environmental Coverage 254,200 GSF -$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Contingent Liability 254,200 GSF 0.28$ Construction 72,388$ 262$ 0.28$ 0.35$ 76,692$ 278$ 0.30$ 0.37$

Total Insurance 119,343$ 432$ 0.47$ 0.57$ 126,439$ 458$ 0.50$ 0.61$



Taxes & Utilities (During Construction)Real Estate Taxes

Assessments Current as of: 1/1/2011 (must be Jan. 1)

Mil Rate (per $100 of Assessed Value)Commercial 1.1260$ Residential 1.0010$ Vacant Land 1.1260$

Assessment Cap RatesCommercial 7.25%Residential 6.30%Vacant Land 7.75%

Vacancy Rate for Assessment 7.00%

Use Mil Rate For: Total ProrataNorth Tract Vacant Land 100%

Land 593,500$ 593,500$ Improvements -$ -$

Other Commercial 100%Land -$ -$ Improvements -$ -$

Other Vacant Land 100%Land -$ -$ Improvements -$ -$

Other Vacant Land 100%Land -$ -$ Improvements -$ -$

Subtotal Real Estate Taxes 578,072$ -$ -$ -$ 578,072$ -$ -$ -$

UtilitiesUtilities During Construction 254,200 GSF -$ Occupancy -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Utilities -$ -$ -$ -$ -$ -$ -$ -$

Total Taxes & Utilities (During Construction) 578,072$ 2,094$ 2.27$ 2.77$ 578,072$ 2,094$ 2.27$ 2.77$

MarketingAdvertising Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Promotion/Public Relations Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Broker Events Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Web Site Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Signage Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Video Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Renderings Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Models Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Display Boards Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Brochure Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Marketing Center Occupancy -$ -$ -$ -$ -$ -$ -$ -$ PowerPoint Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Events Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Equipment Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Printing Occupancy -$ -$ -$ -$ -$ -$ -$ -$ Miscellaneous Occupancy 500,000$ 1,812$ 1.97$ 2.40$ 547,504$ 1,984$ 2.15$ 2.63$

Total Marketing 500,000$ 1,812$ 1.97$ 2.40$ 547,504$ 1,984$ 2.15$ 2.63$



Other Soft CostsMiscellaneous

Travel and Entertainment 76 mos. 333.33$ None 25,200$ 91$ 0.10$ 0.12$ 25,200$ 91$ 0.10$ 0.12$ Postage/Shipping/Messenger 76 mos. 333.33$ None 25,200$ 91$ 0.10$ 0.12$ 25,200$ 91$ 0.10$ 0.12$ Miscellaneous 76 mos. 333.33$ None 25,200$ 91$ 0.10$ 0.12$ 25,200$ 91$ 0.10$ 0.12$ Subtotal Miscellaneous 75,600$ 274$ 0.30$ 0.36$ 75,600$ 274$ 0.30$ 0.36$

Operating Budget for Preleasing Activity None 100,000$ 362$ 0.39$ 0.48$ 100,000$ 362$ 0.39$ 0.48$

Total Other Soft Costs 175,600$ 636$ 0.69$ 0.84$ 175,600$ 636$ 0.69$ 0.84$

Testing & InspectionsTesting Consultants and Inspections 254,200 GSF 1.25$ Construction 317,750$ 1,151$ 1.25$ 1.52$ 336,643$ 1,220$ 1.32$ 1.61$ Waterproofing Construction -$ -$ -$ -$ -$ -$ -$ -$

Total Testing & Inspections 317,750$ 1,151$ 1.25$ 1.52$ 336,643$ 1,220$ 1.32$ 1.61$

Capitalized Op Ex & Taxes (During Pre-Development)Spent to Date (129) mos. -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$ Remaining Capped Op Ex Estimate 151 mos. -$ Calculated -$ -$ -$ -$ -$ -$ -$ -$

Total Capitalized Op Ex & Taxes (During Pre-Development) -$ -$ -$ -$ -$ -$ -$ -$

Capitalized Op Ex & Taxes (During Lease Up)Capitalized Op Ex & Taxes (During Lease Up) Calculated -$ -$ -$ -$ -$ -$ -$ -$

Total Capitalized Op Ex & Taxes (During Lease Up) -$ -$ -$ -$ -$ -$ -$ -$

Leasing CommissionsLeasing Commissions Calculated -$ -$ -$ -$ -$ -$ -$ -$

Total Leasing Commissions -$ -$ -$ -$ -$ -$ -$ -$

Overhead & Development FeePre-Development Fee 35 mos. -$ None -$ -$ -$ -$ -$ -$ -$ -$ Development Fee 1.50% Calculated 1,159,919$ 4,203$ 4.56$ 5.56$ 1,213,468$ 4,397$ 4.77$ 5.82$ Guaranty Fee None -$ -$ -$ -$ -$ -$ -$ -$ Other None -$ -$ -$ -$ -$ -$ -$ -$ Other None -$ -$ -$ -$ -$ -$ -$ -$

Total Overhead & Development Fee 1,159,919$ 4,203$ 4.56$ 5.56$ 1,213,468$ 4,397$ 4.77$ 5.82$

Soft Cost ContingencySoft Cost Contingency 5.00% 1,099,460$ 3,984$ 4.33$ 5.27$ 1,115,153$ 4,040$ 4.39$ 5.35$

Total Soft Cost Contingency 1,099,460$ 3,984$ 4.33$ 5.27$ 1,115,153$ 4,040$ 4.39$ 5.35$

Total Soft Costs (excluding Proffers & Financing Costs) 11,207,496$ 40,607$ 44.09$ 53.75$ 11,457,669$ 41,513$ 45.07$ 54.95$



Financing Costs

Financing FeesFinancing Fees - Construction Debt 1.000% Construction 640,122$ 2,319$ 2.52$ 3.07$ 678,182$ 2,457$ 2.52$ 3.07$ Financing Fees - Mezzanine Debt 1.000% None -$ -$ -$ -$ -$ -$ -$ -$ Financing Fees - Equity 0.00% None -$ -$ -$ -$ -$ -$ -$ -$ Broker Fee 0.00% None -$ -$ -$ -$ -$ -$ -$ -$

Total Financing Fees 640,122$ 2,319$ 2.52$ 3.07$ 678,182$ 2,457$ 2.67$ 3.25$

Recordation, Professional Fees, Title, & Inspection FeesRecordation Tax

Recordation Tax 254,200 GSF 0.62$ Construction 148,710$ 539$ 0.59$ 0.71$ 157,552$ 571$ 0.62$ 0.76$ Other None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Recordation Tax 148,710$ 539$ 0.59$ 0.71$ 157,552$ 571$ 0.62$ 0.76$

Professional FeesLoan - Legal Construction 300,000$ 1,087$ 1.18$ 1.44$ 317,837$ 1,152$ 1.25$ 1.52$ Appraisal Fee Construction 10,000$ 36$ 0.04$ 0.05$ 10,595$ 38$ 0.04$ 0.05$ Other None -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Professional Fees 310,000$ 1,123$ 1.22$ 1.49$ 328,432$ 1,190$ 1.29$ 1.58$

Title, Admin, & InspectionsTitle Insurance 254,200 GSF 0.27$ None 67,818$ 246$ 0.27$ 0.33$ 67,818$ 246$ 0.27$ 0.33$ Other None -$ -$ -$ -$ -$ -$ -$ -$

Lender Administration & InspectionsLender Administration Fee 8.00 qrtr 18,750$ Construction 150,000$ 543$ 0.59$ 0.72$ 158,919$ 576$ 0.63$ 0.76$ Lender Inspection Fees 24.00 mos. 2,500$ Construction 60,000$ 217$ 0.24$ 0.29$ 63,567$ 230$ 0.25$ 0.30$ Miscellaneous Construction 10,000$ 36$ 0.04$ 0.05$ 10,595$ 38$ 0.04$ 0.05$ Subotal Lender Administration & Inspections 220,000$ 797$ 0.87$ 1.06$ 233,081$ 844$ 0.92$ 1.12$

Subtotal Title, Admin, & Inspections 287,818$ 1,043$ 1.13$ 1.38$ 300,899$ 1,090$ 1.18$ 1.44$

Total Recordation, Professional Fees, Title, & Inspection Fees 746,528$ 2,705$ 2.94$ 3.58$ 786,883$ 2,851$ 3.10$ 3.77$

Construction Loan InterestConstruction Loan Interest Calculated 6,026,316$ 21,834$ 23.71$ 28.90$ 6,026,316$ 21,834$ 23.71$ 28.90$

Total Construction Loan Interest 6,026,316$ 21,834$ 23.71$ 28.90$ 6,026,316$ 21,834$ 23.71$ 28.90$

Carry Carry Calculated -$ -$ -$ -$ -$ -$ -$ -$

Total Carry -$ -$ -$ -$ -$ -$ -$ -$

Total Financing Costs 7,412,966$ 26,859$ 29.16$ 35.55$ 7,491,381$ 27,143$ 29.47$ 35.93$

67,818,235$

-$ -$ -$

CWC Partners276 12th Street ApartmentsPERMITS, LICENSES, BONDS, & FEES


Building PermitsExcavation Permit

Base Fee 30,833 GSF 0.59$ Construction 23,106$ 84$ 0.09$ 0.11$ 24,480$ 89$ 0.10$ 0.12$ USBC Code Academy Fee 2.00%Automation Enhancement Fee 10%Indirect Cost Fee 15%

Footing to Grade PermitBase Fee 92,500 GSF 0.82$ Construction 96,276$ 349$ 0.38$ 0.46$ 102,000$ 370$ 0.40$ 0.49$ USBC Code Academy Fee 2.00%Automation Enhancement Fee 10%Indirect Cost Fee 15%

Building PermitBase Fee 254,200 GSF 0.82$ Construction 264,577$ 959$ 1.04$ 1.27$ 280,308$ 1,016$ 1.10$ 1.34$ USBC Code Academy Fee 2.00%Automation Enhancement Fee 10%Indirect Cost Fee 15%

Right -of-Way PermitsStreet Light 0 lights 500.00$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Parking Meters - Removal 0 meters 45.00$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Parking Meters - Out-of-service 0 meters 15.00$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Lane Closures 1 lanes 0.50$ Construction 183,705$ 666$ 0.72$ 0.88$ 194,628$ 705$ 0.77$ 0.93$

331 linear feerSteel Drop-Off Construction 500$ 2$ 0.00$ 0.00$ 530$ 2$ 0.00$ 0.00$ Signs Construction 1,500$ 5$ 0.01$ 0.01$ 1,589$ 6$ 0.01$ 0.01$ Subtotal Right -of-Way Permits 185,705$ 673$ 0.73$ 0.89$ 196,747$ 713$ 0.77$ 0.94$

Tents, fences, etc. Construction 1,000$ 4$ 0.00$ 0.00$ 1,059$ 4$ 0.00$ 0.01$ Tower Crane 3.4 year(s) 1,200$ Construction 4,080$ 15$ 0.02$ 0.02$ 4,323$ 16$ 0.02$ 0.02$ Elevator Installation 5 Elevators 75.00$ Construction 860$ 3$ 0.00$ 0.00$ 911$ 3$ 0.00$ 0.00$

9 Floors 10.00$ 35.00$

Subtotal Towers, Fences, etc. 5,940$ 22 0.02$ 0.03$ 6,293$ 23 0.02$ 0.03$

Subtotal Building Permits 575,604$ 2,086$ 2.26$ 2.76$ 609,829$ 2,210$ 2.40$ 2.92$

Escalated CostsCurrent Costs (2012$)Unit Inputs (2012$)




Certificates of OccupancyMaster 1 Base Fee 2,319$ Occupancy 8,027$ 29$ 0.03$ 0.04$ 8,789$ 32$ 0.03$ 0.04$

0 sf/100 com -$ 276 apts 18$

Automation Fee 10%Core & Shell 1 Base Fee 2,899$ Occupancy 3,189$ 12$ 0.01$ 0.02$ 3,492$ 13$ 0.01$ 0.02$

0 sf/100 com -$ 276 apts -$

Automation Fee 10%Partial 1 Base Fee -$ Occupancy -$ -$ -$ -$ -$ -$ -$ -$

0 sf/100 com -$ 276 apts -$

Automation Fee 10%Parking Structure 1 Base Fee 581.37$ Construction 1,849$ 7$ 0.01$ 0.01$ 1,958$ 7$ 0.01$ 0.01$

92,500 Garage/5000SF 59.41$ 276 apts -$

Automation Fee 10%Subtotal Certificates of Occupancy 13,064$ 47$ 0.05$ 0.06$ 14,240$ 52$ 0.06$ 0.07$

LicensesOther Construction -$ -$ -$ -$ -$ -$ -$ -$ Other Construction -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Bonds -$ -$ -$ -$ -$ -$ -$ -$

BondsLEED Bond 435,340$ 1.25% Construction 23,944$ 87$ 0.09$ 0.11$ 25,367$ 92$ 0.10$ 0.12$ Public Right-of-Way Bonds 254,200 GSF 254,200$ Construction 13,981$ 51$ 0.06$ 0.07$ 14,812$ 54$ 0.06$ 0.07$

Subtotal Bonds 37,925$ 137$ 0.15$ 0.18$ 40,180$ 146$ 0.16$ 0.19$




Site Plan Review FeesPDSP 1 Base Fee 21,278$ Approval 23,531$ 85$ 0.09$ 0.11$ 24,360$ 88$ 0.10$ 0.12$

0.87 acres 129.43$ Automation Fee 10%

PDSP (DES Fee) 1 Base Fee 21,278$ Approval 21,391$ 78$ 0.08$ 0.10$ 22,146$ 80$ 0.09$ 0.11$ 0.87 acres 129.43$

Site Plan 1 Base Fee 10,085$ Approval 46,845$ 170$ 0.18$ 0.22$ 48,497$ 176$ 0.19$ 0.23$ 0 sf/100 com 27.58$

276 apts 117.76$ Automation Fee 10%

Site Plan Review (DES Fee) 1 Base Fee 4,637$ Approval 21,034$ 76$ 0.08$ 0.10$ 21,776$ 79$ 0.09$ 0.10$ 0 sf/100 com 11.67$

276 apts 59.41$

Final Site Plan (4.1 Review Fee) 1 Base Fee 1,276$ Approval 37,156$ 135$ 0.15$ 0.18$ 38,466$ 139$ 0.15$ 0.18$ 0 sf/100 com 27.58$


Final Site Plan (4.1 Review DES Fee) 1 Base Fee 702$ Approval 17,100$ 62$ 0.07$ 0.08$ 17,703$ 64$ 0.07$ 0.08$ 0 sf/100 com 11.67$

276 apts 59.41$

Final Site Plan (4.1 Resubmit Fee #1) 1 Base Fee 581$ Approval 4,474$ 16$ 0.02$ 0.02$ 4,632$ 17$ 0.02$ 0.02$ 0 sf/1000 com 11.67$


Final Site Plan (4.1 Resubmit #1 DES Fee) 1 Base Fee 292$ Approval 2,049$ 7$ 0.01$ 0.01$ 2,121$ 8$ 0.01$ 0.01$ 0 sf/1000 com 6.37$

276 apts 6.37$

Final Site Plan (4.1 Resubmit Fee #2) 1 Base Fee 581$ Approval 4,182$ 15$ 0.02$ 0.02$ 4,330$ 16$ 0.02$ 0.02$ 0 sf/1000 com 11.67$


Final Site Plan (4.1 Resubmit #2 DES Fee) 1 Base Fee 292$ Approval 2,049$ 7$ 0.01$ 0.01$ 2,121$ 8$ 0.01$ 0.01$ 0 sf/1000 com 6.37$

276 apts 6.37$

Minor Site Plan Amendment #1 1 Base Fee 2,527$ Approval 38,532$ 140$ 0.15$ 0.18$ 39,890$ 145$ 0.16$ 0.19$ 0 sf/100 com 27.58$


Minor Site Plan Amendment #1 (DES Fee) 1 Base Fee 1,160$ Approval 17,557$ 64$ 0.07$ 0.08$ 18,176$ 66$ 0.07$ 0.09$ 0 sf/100 com 11.67$

276 apts 59.41$

Minor Site Plan Amendment #2 1 Base Fee 2,527$ Approval 38,532$ 140$ 0.15$ 0.18$ 39,890$ 145$ 0.16$ 0.19$ 0 sf/100 com 27.58$


Minor Site Plan Amendment #2 (DES Fee) 1 Base Fee 1,160$ Approval 17,557$ 64$ 0.07$ 0.08$ 18,176$ 66$ 0.07$ 0.09$ 0 sf/100 com 11.67$

276 apts 59.41$ Subtotal Site Plan Review Fees 291,988$ 1,058$ 1.15$ 1.40$ 302,284$ 1,095$ 1.19$ 1.45$




Permit Reviews FeesSubdivision Plat Review 1 Base Fee 159.14$ Construction 271$ 1$ 0.00$ 0.00$ 287$ 1$ 0.00$ 0.00$

1 Lots 86.99$ 276 apts -$

Automation Fee 10%Demo Permit Review Construction 1,276$ 5$ 0.01$ 0.01$ 1,351$ 5$ 0.01$ 0.01$ Excavation Permit Review Construction 1,276$ 5$ 0.01$ 0.01$ 1,351$ 5$ 0.01$ 0.01$ Building Permit Review 1 Base Fee 581.37$ Construction 13,692$ 50$ 0.05$ 0.07$ 14,506$ 53$ 0.06$ 0.07$

254,200 GSF/5,000SF 233.40$ 276 apts -$

Automation Fee 10%Subtotal Permits Review 16,514$ 60$ 0.06$ 0.08$ 17,496$ 63$ 0.07$ 0.08$

Misc. FeesTree Removal Fees 0 trees 1,300$ Construction -$ -$ -$ -$ -$ -$ -$ -$ Misc. Filing Fees Construction 50,000$ 181$ 0.20$ 0.24$ 52,973$ 192$ 0.21$ 0.25$ Final Façade Review Plan Construction 640$ 2$ 0.00$ 0.00$ 678$ 2$ 0.00$ 0.00$ Administrative Changes 2 Changes 695.53$ Construction 1,391$ 5$ 0.01$ 0.01$ 1,474$ 5$ 0.01$ 0.01$ Landscape Plan Review Construction 960$ 3$ 0.00$ 0.00$ 1,017$ 4$ 0.00$ 0.00$ Use Permit - Type I Construction 2,080$ 8$ 0.01$ 0.01$ 2,203$ 8$ 0.01$ 0.01$ Use Permit - New Construction Construction 11,892$ 43$ 0.05$ 0.06$ 12,599$ 46$ 0.05$ 0.06$ Zoning Compliance Letters Construction 3,000$ 11$ 0.01$ 0.01$ 3,178$ 12$ 0.01$ 0.02$ Subtotal Misc. Fees 69,962$ 253$ 0.28$ 0.34$ 74,122$ 269$ 0.29$ 0.36$

Utility FeesTemporary / Permanent Power Connection Construction 400,000$ 1,449$ 1.57$ 1.92$ 423,783$ 1,535$ 1.67$ 2.03$ Water Tap 2 - 6" Tap 13,500$ Construction 27,000$ 98$ 0.11$ 0.13$ 28,605$ 104$ 0.11$ 0.14$ Fire Tap 2 - 4" Tap 2,000$ Construction 4,000$ 14$ 0.02$ 0.02$ 4,238$ 15$ 0.02$ 0.02$

DFU Calculation Quantity / Quantity DFU value TotalBathroom group 276 Unit 1.30 5.00 1,794

1 BA Percentage 70.0%2 BA Percentage 30.0%3 BA Percentage 0.0%

100.0%Kitchen sink 276 Unit 1.00 2.00 552 Washing machine - residential 276 Unit 1.00 2.00 552 Amenities area 1.00 LS 1.00 50.00 50 Floor drains 2.00 LS 1.00 10.00 20 Service area 4.00 LS 1.00 5.00 20 Mechanical area 4.00 LS 1.00 6.00 24 Retail 1.00 LS 1.00 20.00 20 Subtotal 3,032 Credits - Total DFUs 3,032

Sanitary Tap (DFU's) 3,032 DFUs 187$ Construction 568,379$ 2,059$ 2.24$ 2.73$ 602,174$ 2,182$ 2.37$ 2.89$ DFU Inspection Fee Construction 310$ 1$ 0.00$ 0.00$ 328$ 1$ 0.00$ 0.00$ Storm Tap 1 - 8" Tap 15,500$ Construction 15,500$ 56$ 0.06$ 0.07$ 16,422$ 59$ 0.06$ 0.08$ Flow Test 4 Tests 200$ Construction 800$ 3$ 0.00$ 0.00$ 848$ 3$ 0.00$ 0.00$ Engineering Review 1 Reviews 25,000$ Construction 25,000$ 91$ 0.10$ 0.12$ 26,486$ 96$ 0.10$ 0.13$ Existing Utility Disconnects Construction 25,000$ 91$ 0.10$ 0.12$ 26,486$ 96$ 0.10$ 0.13$ Sheeting/Shoring (related to piping) Review 1 Reviews 1,000$ Construction 1,000$ 4$ 0.00$ 0.00$ 1,059$ 4$ 0.00$ 0.01$ Subtotal Utility Fees 1,076,084$ 3,899$ 4.23$ 5.16$ 1,130,429$ 4,096$ 4.45$ 5.42$

Total Permits, Licenses, Bonds, & Fees 2,081,142$ 7,540$ 8.19$ 9.98$ 2,188,580$ 7,930$ 8.61$ 10.50$

CWC Partners276 12th Street ApartmentsPROFFERS


Proffers Within Development Budget

LandOther 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$

Total Land -$ -$ -$ -$ -$ -$ -$ -$

Hard Costs - Within GMPOther 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$

Total Hard Costs - Within GMP -$ -$ -$ -$ -$ -$ -$ -$

Hard Costs - Outside GMPPedestrian Bridge Removal 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$

Total Hard Costs - Outside GMP -$ -$ -$ -$ -$ -$ -$ -$

Soft CostsGreen Building Fund Contribution 254,200 GSF 0.045$ Approval 11,439$ 41$ 0.05$ 0.05$ 11,842$ 43$ 0.05$ 0.06$ Utility Fund Contribution 0.87 acres 50,000$ Approval 43,618$ 158$ 0.17$ 0.21$ 45,156$ 164$ 0.18$ 0.22$ Public Art Contribution 254,200 GSF 0.40$ Approval 101,680$ 368$ 0.40$ 0.49$ 105,265$ 381$ 0.41$ 0.50$

TDM ContributionOne-Time Contribution 254,200 GSF 0.96$ Approval 243,189$ 881$ 0.96$ 1.17$ 251,764$ 912$ 0.99$ 1.21$ Annual Use Contribution (First 2 Yrs) 254,200 GSF 0.07$ Approval 31,981$ 116$ 0.13$ 0.15$ 35,020$ 127$ 0.14$ 0.17$ Subtotal TDM Contribution 275,170$ 997$ 1.08$ 1.32$ 286,784$ 1,039$ 1.13$ 1.38$

Affordable Housing ContributionUnder 1.0 FAR 38,000 FAR SF 1.78$ Approval 67,712$ 245$ 0.27$ 0.32$ 70,100$ 254$ 0.28$ 0.34$ 1.0 - 3.0 FAR 76,000 FAR SF 4.76$ Approval 361,654$ 1,310$ 1.42$ 1.73$ 374,406$ 1,357$ 1.47$ 1.80$ Over 3.0 FAR 140,200 FAR SF 9.53$ Approval 1,335,756$ 4,840$ 5.25$ 6.41$ 1,382,857$ 5,010$ 5.44$ 6.63$ Subtotal Affordable Housing 1,765,121$ 6,395$ 6.94$ 8.47$ 1,827,363$ 6,621$ 7.19$ 8.76$

Other ProffersOther 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$ Other 254,200 GSF -$ Approval -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Other Proffers -$ -$ -$ -$ -$ -$ -$ -$

Subtotal Before Cash Remainder 2,197,028$ 7,960$ 8.64$ 10.54$ 2,276,411$ 8,248$ 8.96$ 10.92$

Remaining Cash Proffers 187,887 FAR SF 51.54$ None 9,684,142$ 35,087$ 38.10$ 46.44$ 9,684,142$ 35,087$ 38.10$ 46.44$

Total Soft Costs 11,881,170$ 43,048$ 46.74$ 56.98$ 11,960,552$ 43,335$ 47.05$ 57.36$

Total Proffers Within Development Budget 11,881,170$ 43,048$ 46.74$ 56.98$ 11,960,552$ 43,335$ 47.05$ 57.36$

Proffers Outside Development Budget

Operating CostsAnnual TDM Contribution (30-yr NPV @ 10.0 254,200 GSF 0.07$ Approval 172,502$ 625$ 0.68$ 0.83$ 188,891$ 684$ 0.74$ 0.91$ Other Approval -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Operating Costs 172,502$ 625$ 0.68$ 0.83$ 188,891$ 684$ 0.74$ 0.91$

Non-Cash CreditsLEED Gold / Platinum Credit 38,000 0.40 FAR 70.57$ Approval 1,072,730$ 3,887$ 4.22$ 5.14$ 1,110,557$ 4,024$ 4.37$ 5.33$ Other Approval -$ -$ -$ -$ -$ -$ -$ -$ Other Approval -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Non-Cash Credits 1,072,730$ 3,887$ 4.22$ 5.14$ 1,110,557$ 4,024$ 4.37$ 5.33$

Total Proffers Outside Development Budget 1,245,232$ 4,512$ 4.90$ 5.97$ 1,299,448$ 4,708$ 5.11$ 6.23$

Total Community Benefit Package 13,126,402$ 47,559$ 51.64$ 62.95$ 13,260,000$ 48,043$ 52.16$ 63.59$

Density CalculationSite AreaBy-Right Density 1.75 FARProposed Density 6.69 FARCommunity Benefit Density

Community Benefit Density ValueCommunity Benefit Density Value per FAR SF


13,260,000$

187,887 FAR SF254,200 FAR SF66,313 FAR SF

70.57$

38,000 SF

CWC Partners276 12th Street ApartmentsSTABILIZED 10-YEAR CASH FLOW

Assumes 100% ownership and stabilization on 9/1/2018.

1 2 3 4 5 6 7 8 9 10 11Year Ending: 8/31/19 8/31/20 8/31/21 8/31/22 8/31/23 8/31/24 8/31/25 8/31/26 8/31/27 8/31/28 8/31/29

RevenueRental Revenue 8,669,000$ 8,953,000$ 9,225,000$ 9,506,000$ 9,795,000$ 10,093,000$ 10,400,000$ 10,716,000$ 11,042,000$ 11,378,000$ 11,724,000$ Rent Abatement (277,000)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Expense Reimbursements -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Parking Income 478,000$ 494,000$ 508,000$ 524,000$ 539,000$ 556,000$ 572,000$ 589,000$ 607,000$ 625,000$ 644,000$ Other Income 249,000$ 257,000$ 265,000$ 273,000$ 281,000$ 289,000$ 298,000$ 307,000$ 316,000$ 326,000$ 335,000$ Gross Potential Revenue 9,119,000$ 9,704,000$ 9,998,000$ 10,303,000$ 10,615,000$ 10,938,000$ 11,270,000$ 11,612,000$ 11,965,000$ 12,329,000$ 12,703,000$ Vacancy 6.5% (593,000)$ (631,000)$ (650,000)$ (670,000)$ (690,000)$ (711,000)$ (733,000)$ (755,000)$ (778,000)$ (801,000)$ (826,000)$ Effective Gross Revenue 8,526,000$ 9,073,000$ 9,348,000$ 9,633,000$ 9,925,000$ 10,227,000$ 10,537,000$ 10,857,000$ 11,187,000$ 11,528,000$ 11,877,000$

ExpensesOperating Expenses (1,877,000)$ (1,934,000)$ (1,992,000)$ (2,051,000)$ (2,113,000)$ (2,176,000)$ (2,242,000)$ (2,309,000)$ (2,378,000)$ (2,450,000)$ (2,523,000)$ Real Estate Taxes (969,000)$ (998,000)$ (1,028,000)$ (1,059,000)$ (1,091,000)$ (1,124,000)$ (1,157,000)$ (1,192,000)$ (1,228,000)$ (1,265,000)$ (1,302,000)$ Total Expenses (2,846,000)$ (2,932,000)$ (3,020,000)$ (3,110,000)$ (3,204,000)$ (3,300,000)$ (3,399,000)$ (3,501,000)$ (3,606,000)$ (3,715,000)$ (3,825,000)$

Net Operating Income 5,680,000$ 6,141,000$ 6,328,000$ 6,523,000$ 6,721,000$ 6,927,000$ 7,138,000$ 7,356,000$ 7,581,000$ 7,813,000$ 8,052,000$

Capital ExpendituresReleasing Expenses (TI's & LC) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Reserves (116,000)$ (120,000)$ (124,000)$ (127,000)$ (131,000)$ (135,000)$ (139,000)$ (143,000)$ (148,000)$ (152,000)$ (157,000)$ Total Capital Expenditures (116,000)$ (120,000)$ (124,000)$ (127,000)$ (131,000)$ (135,000)$ (139,000)$ (143,000)$ (148,000)$ (152,000)$ (157,000)$

Net Operating Income After Resrves 5,564,000$ 6,021,000$ 6,204,000$ 6,396,000$ 6,590,000$ 6,792,000$ 6,999,000$ 7,213,000$ 7,433,000$ 7,661,000$ 7,895,000$

Total Project Costs ("TPC") 96,883,000$

Yield on TPC 5.74% 6.21% 6.40% 6.60% 6.80% 7.01% 7.22% 7.45% 7.67% 7.91% 8.15%

CWC Partners276 12th Street ApartmentsTIMELINE

Start End Duration

KEY DATES

North Tract 2/1/14 - 0

North Tract 2/1/14 - 0

N/A 1/0/00 - 0

Tenant Move-Out 5/1/12 - 0

Approval Date 2/1/14 - 0

First Unit Turnover / Initial Occupancy 12/1/16 - -4

Stabilization 9/1/18 - 0

PRE-DEVELOPMENT 5/1/12 1/31/15 33

Conceptual Design / Submission Prep 5/1/12 7/31/12 3

Entitlement 8/1/12 1/31/14 18

DDs 2/1/14 5/31/14 4

CDs 6/1/14 1/31/15 8

CONSTRUCTION 2/1/14 6/30/17 41

Demo Permit 2/1/14 4/30/14 3

Demolition & Abatement 3/1/14 6/30/14 4

Building Permit 2/1/15 3/31/15 2

Sitework Costs 4/1/15 3/31/17 24

Base Building & Garage Construction 4/1/15 3/31/17 24

Initial Tenant Work Duration 1/1/17 6/30/17 6

LEASE-UP 12/1/16 8/31/18 21

Q4Q2

2017

Q4Q2 Q3 Q3Q1

2018

Q2 Q4Q2Q1 Q1

2016

Q4Q3Q1 Q2

2012 2013 2014 2015

Q3 Q4Q1 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Exhibit B – Aerial Photographs and Maps

Exhibit C – Arlington Site Plan 4.1 Process

Exhibit C – Arlington Site Plan 4.1 Process (cont’d)

Exhibit D – Crystal City Existing Conditions

Exhibit E – Current Crystal City Zoning Map

Exhibit F – Crystal City after Sector Plan Implementation

Exhibit G – Crystal City Sector Plan Detail of Project Site