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1201 Broadway - Investment Analysis Model

($ USD in $ as Stated, Unless Otherwise Noted)

Operating Assumptions: Units:

Property Name: Name 1201 Broadway


Location: Name New York, NY

Months in Year: # 12
Rentable Square Feet (RSF): sq. ft. 25,000 sq. ft.

Property Management Fees % EGI: % 3.0%

Common Area Maintenance (CAM) per RSF per Year: $ / sq. ft. / Yr $ 5.00
Common Area Maintenance Annual Growth Rate: % 3.5%

Insurance per RSF per Year: $ / sq. ft. / Yr $ 2.00


Insurance Annual Growth Rate: % 2.5%

Acquisition and Exit Assumptions: Units:

Acquisition Date: Date 2017-12-31


Acquisition Price per Rentable Square Foot: $ / sq. ft. $ 1,000.00
Acquisition Price: $ $ 25,000,000

Implied Going-In Cap Rate: % 6.99%

Acquisition Costs (% Gross Acquisition Price): % 1.00%


Loan Issuance Fees (% Total Debt): % 1.50%

Senior Loan Loan-to-Value (LTV) Ratio: % 50.0%


Senior Loan Interest Rate: % 5.00%
Senior Loan Amortization Period: # Years 25
Senior Loan Maturity: # Years 5

Operating Partner Equity Contribution: % 10.0%


Asset Management Fee % Initial Equity Invested: % 1.5%
Profit Split Below IRR Hurdle: % -
IRR Hurdle (Based on Levered IRR to LPs): % 10.0%
Profit Split Beyond IRR Hurdle: % 20.0%
Limited Partner Equity Contribution: % 90.0%

Acquisition Sources and Uses of Funds:

Sources of Funds:
Senior Debt: $ 12,500,000
Mezzanine: 2,500,000
Operating Partner - Equity: 1,053,750
Limited Partners - Equity: 9,483,750
Total Sources: $ 25,537,500
Rent Roll & Operating Assumptions: Units:

Property-Wide Operating Assumptions:


New Lease Term (Years): # Years 10
Renewal Probability: % 70.0%
# Months of Downtime for Non-Renewal: # 6

Free Rent and Capital Costs: New:


# Months of Free Rent: # 6
Tenant Improvements (TIs) per RSF: $ / sq. ft. / Yr $ 10.00
Leasing Commissions (LCs) % Total Lease Value: % 3.0%

Office Tenant #1 - Full Service (FS) Lease:


Rentable Square Feet Occupied: sq. ft. 10,000 sq. ft.
Lease Expiration Date: Date 2019-12-31

Baseline Rent per Square Foot: $ / sq. ft. / Yr


Rental Growth Rate: %

(+) Base Rental Income: $


(-) Absorption & Turnover Vacancy: $
(-) Concessions & Free Rent: $
(-) Tenant Improvements (TIs): $
(-) Leasing Commissions (LCs): $

Office Tenant #2 - Single Net (N) Lease:


Rentable Square Feet Occupied: sq. ft. 7,000 sq. ft.
Lease Expiration Date: Date 2020-12-31

Baseline Rent per Square Foot: $ / sq. ft. / Yr


Rental Growth Rate: %

(+) Base Rental Income: $


(-) Absorption & Turnover Vacancy: $
(-) Concessions & Free Rent: $
(-) Tenant Improvements (TIs): $
(-) Leasing Commissions (LCs): $

(+) Expense Reimbursements: $

Tenant #3 - Retailer - Triple Net (NNN) Lease:


Rentable Square Feet Occupied: sq. ft. 6,000 sq. ft.
Lease Expiration Date: Date 2024-12-31

Baseline Rent per Square Foot: $ / sq. ft. / Yr


Rental Growth Rate: %

(+) Base Rental Income: $


(-) Absorption & Turnover Vacancy: $
(-) Concessions & Free Rent: $
(-) Tenant Improvements (TIs): $
(-) Leasing Commissions (LCs): $

(+) Expense Reimbursements: $

Annual Capital Costs: $


Replacement Reserve Amount: $ 62,500

Numerical Year: Year


Property Pro-Forma: Units:

Revenue:
(+) Base Rental Income: $
(-) Absorption & Turnover Vacancy: $
(-) Concessions & Free Rent: $
(+) Expense Reimbursements: $
Potential Gross Revenue: $
(-) General Vacancy: $
Effective Gross Income (EGI): $

Expenses:
(-) Property Management Fees: $
(-) Common Area Maintenance (CAM): $
(-) Common Area Utilities: $
(-) Insurance: $
(-) Real Estate & Property Taxes: $
(-) CapEx, TI, and LC Reserves: $
Total Expenses: $

Net Operating Income (NOI): $


NOI Margin: %

(-) CapEx, TIs, and LCs: $


(+) Capital Costs Paid from Reserves: $

Adjusted Net Operating Income: $


Adjusted NOI Margin: %

(-) Cash Interest Expense on Senior Debt: $


(-) Cash Interest Expense on Mezzanine:
(-) Senior Debt Principal Repayment: $

Cash Flow to Equity Investors: $

PIK Interest on Mezzanine: $

(+) Ending Senior Debt Balance: $


(+) Ending Mezzanine Balance: $
Total Debt Balance: $
Debt Yield: %

Interest Coverage Ratio - NOI: x


Interest Coverage Ratio - Adjusted NOI: x

Debt Service Coverage Ratio (DSCR) - NOI: x


Debt Service Coverage Ratio (DSCR) - Adjusted NOI: x
IRR Calculations: Units:

Project Cash Flows (Unleveraged IRR):


(+) Proceeds from Sale of Property: $
(-) Selling Costs: $
(+) Adjusted NOI (Cash Flows to All Investors): $
(-) Property Acquisition Price: $
Total Project Cash Flows (Unleveraged IRR): $

Unleveraged Internal Rate of Return (IRR): %

Total Returns: $
Total Initial Investment: $
Cash-on-Cash Multiple: x

Cash Flow to Equity Investors (Leveraged IRR):


(+) Proceeds from Sale of Property: $
(-) Selling Costs: $
(+) Cash Flows to Equity Investors: $
(-) Debt Principal Repayment Upon Exit: $
(-) Initial Equity Investment: $
Total Cash Flows to Equity (Leveraged IRR): $

Leveraged Internal Rate of Return (IRR): %

Total Returns to Equity: $


Invested Equity: $
Cash-on-Cash Multiple: x
Units:

1201 Broadway Real Estate Taxes % Property Value: % 4.00%


Real Estate Taxes Annual Growth Rate: % 2.0%

Replacement Reserve per RSF per Year: $ / sq. ft. / Yr $ 2.50


Replacement Reserve Annual Growth Rate: % 3.0%

Common Area Utilities per RSF per Year: $ / sq. ft. / Yr $ 3.00
Common Area Utilities Annual Growth Rate: % 3.0%

Units:

Exit Date: Date 2022-12-31


Exit Cap Rate: % 6.00%

Exit Price: $ $ 35,684,042


Exit Price per RSF: $ / sq. ft. $ 1,427.36

Selling Costs (% Gross Sale Price): % 1.50%

Mezzanine Loan-to-Value (LTV) Ratio: % 10.0%


Mezzanine Cash Interest Rate: % 7.00%
Mezzanine PIK Interest Rate: % 3.00%
Mezzanine Amortization Period: # Years N/A
Mezzanine Maturity: # Years 5
Uses of
Funds:
Acquisition Price: $ 25,000,000
Acquisition Costs: 250,000
Loan Issuance Fees: 225,000
Replacement Reserves: 62,500
Total Uses: $ 25,537,500
Historical: Projected:
FY17 FY18 FY19 FY20 FY21 FY22

Renewal:
3
3.00
1.0%

$ 120.00 $ 124.80 $ 129.79 $ 134.98 $ 139.03 $ 143.20


4.0% 4.0% 4.0% 3.0% 3.0%

1,200,000 1,248,000 1,297,920 1,349,837 1,390,332 1,432,042


- - - (202,476) - -
- - - (438,697) - -
- - - (51,000) - -
- - - (215,974) - -

$ 105.00 $ 110.25 $ 115.76 $ 120.39 $ 125.21 $ 128.96


5.0% 5.0% 4.0% 4.0% 3.0%

735,000 771,750 810,338 842,751 876,461 902,755


- - - - (131,469) -
- - - - (284,850) -
- - - - (35,700) -
- - - - (140,234) -

280,000 285,600 291,312 297,138 257,619 309,143


$ 90.00 $ 95.40 $ 100.17 $ 104.68 $ 108.86 $ 112.13
6.0% 5.0% 4.5% 4.0% 3.0%

540,000 572,400 601,020 628,066 653,189 672,784


- - - - - -
- - - - - -
- - - - - -
- - - - - -

300,000 306,690 313,536 320,543 327,714 335,054

- - - (266,974) (175,934) -
125,000 189,375 255,681 57,003 - 72,455

2017 2018 2019 2020 2021 2022


Historical: Projected:
FY17 FY18 FY19 FY20 FY21 FY22

$ 2,715,000 $ 2,841,750 $ 2,968,862 $ 3,090,621 $ 3,198,048 $ 3,293,989


- - - (202,476) (131,469) -
- - - (438,697) (284,850) -
580,000 592,290 604,848 617,681 585,333 644,196
3,295,000 3,434,040 3,573,710 3,067,130 3,367,062 3,938,186
(240,000) (249,600) (259,584) (269,967) (278,066) (286,408)
3,055,000 3,184,440 3,314,126 2,797,163 3,088,996 3,651,777

(91,650) (95,533) (99,424) (83,915) (92,670) (109,553)


(125,000) (129,375) (133,903) (138,590) (143,440) (148,461)
(75,000) (77,250) (79,568) (81,955) (84,413) (86,946)
(50,000) (51,250) (52,531) (53,845) (55,191) (56,570)
(1,000,000) (1,020,000) (1,040,400) (1,061,208) (1,082,432) (1,104,081)
(62,500) (64,375) (66,306) (68,295) (70,344) (72,455)
(1,404,150) (1,437,783) (1,472,132) (1,487,807) (1,528,491) (1,578,066)

1,650,850 1,746,657 1,841,994 1,309,356 1,560,505 2,073,712


54.0% 54.8% 55.6% 46.8% 50.5% 56.8%

- - - (266,974) (175,934) -
- - - 266,974 127,347 -

1,650,850 1,746,657 1,841,994 1,309,356 1,511,918 2,073,712


54.0% 54.8% 55.6% 46.8% 48.9% 56.8%

(625,000) (611,905) (598,155) (583,717) (568,558)


(175,000) (180,250) (185,658) (191,227) (196,964)
(261,906) (275,001) (288,751) (303,189) (318,348)

684,751 774,838 236,792 433,786 989,842

(75,000) (77,250) (79,568) (81,955) (84,413)

12,500,000 12,238,094 11,963,093 11,674,342 11,371,154 11,052,806


2,500,000 2,575,000 2,652,250 2,731,818 2,813,772 2,898,185
$ 15,000,000 $ 14,813,094 $ 14,615,343 $ 14,406,160 $ 14,184,926 $ 13,950,991
11.6% 12.3% 8.7% 10.4% 13.8%

2.00 x 2.12 x 1.52 x 1.82 x 2.44 x


2.00 x 2.12 x 1.52 x 1.76 x 2.44 x

1.54 x 1.61 x 1.14 x 1.35 x 1.78 x


1.54 x 1.61 x 1.14 x 1.30 x 1.78 x
Historical: Projected:
FY17 FY18 FY19 FY20 FY21 FY22

- - - - 35,684,042
- - - - (535,261)
1,746,657 1,841,994 1,309,356 1,511,918 2,073,712
(25,312,500) - - - - -
$ (25,312,500) $ 1,746,657 $ 1,841,994 $ 1,309,356 $ 1,511,918 $ 37,222,494

12.7%

43,632,419
25,312,500
1.7 x

- - - - 35,684,042
- - - - (535,261)
684,751 774,838 236,792 433,786 989,842
- - - - (13,950,991)
(10,537,500) - - - - -
$ (10,537,500) $ 684,751 $ 774,838 $ 236,792 $ 433,786 $ 22,187,633

19.6%

24,317,800
10,537,500
2.3 x
Stabilized
Year:

$ 147.50
3.0%

1,475,003
-
-
-
-

$ 132.83
3.0%

929,838
-
-
-
-

315,325
$ 115.49
3.0%

692,968
-
-
-
-

342,566

-
147,083

2023
Stabilized
Year:

$ 3,392,809
-
-
657,891
4,050,700
(295,001)
3,755,700

(112,671)
(153,657)
(89,554)
(57,985)
(1,126,162)
(74,628)
(1,614,657)

2,141,043
57.0%

-
-

2,141,043
57.0%