Chastain W. Collins. Practicum Advisor: Dave Sislen. A practicum thesis submitted to the Johns Hopkins University in conformity with

Transcription

1 th 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

2 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.

3 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.

4 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.

5 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.

6 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

7 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.

8 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 10 th and 12 th 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.

9 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 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.

10 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 Even in the depth of the financial crisis, rents in the Pentagon and Crystal City area did not give up ground.

11 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.

12 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.

13 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.

14 th St Located on Crystal Drive in Crystal City, the th 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.

15 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 B Ground to Total 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

16 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 % Total Direct Land $ 7,280,000 $ 26,377 $ % TDRs / Sector Plan Allocation $ - $ - $ - 0.0% Closing Costs $ - $ - $ - 0.0% Subtotal Land Costs $ 7,280,000 $ 26,377 $ % Proffers Land $ - $ - $ - 0.0% Hard Costs - Within GMP $ - $ - $ - 0.0% Hard Costs - Outside GMP $ - $ - $ - 0.0% Soft Costs $ 11,961,000 $ 43,337 $ % Subtotal Proffers $ 11,961,000 $ 43,337 $ % Hard Costs Demolition & Abatement $ - $ - $ - 0.0% Sitework $ 1,495,000 $ 5,417 $ % Base Building Construction $ 45,783,000 $ 165,880 $ % Garage Construction $ 6,370,000 $ 23,080 $ % Costs Outside GMP $ 950,000 $ 3,442 $ % Tenant Improvements $ - $ - $ - 0.0% Hard Costs Contingency $ 4,095,000 $ 14,837 $ % Subtotal Hard Costs $ 58,693,000 $ 212,656 $ % Soft Costs Pre-Development & Due Diligence $ 313,000 $ 1,134 $ % Design & Engineering $ 4,513,000 $ 16,351 $ % Legal & Accounting Fees $ 350,000 $ 1,268 $ % Permits, Licenses, Bonds, & Fees $ 2,189,000 $ 7,931 $ % Insurance $ 126,000 $ 457 $ % Taxes & Utilities (During Construction) $ 578,000 $ 2,094 $ % Marketing $ 548,000 $ 1,986 $ % Other Soft Costs $ 176,000 $ 638 $ % Testing & Inspections $ 337,000 $ 1,221 $ % Overhead & Development Fee $ 1,213,000 $ 4,395 $ % Soft Cost Contingency $ 1,115,000 $ 4,040 $ % Subtotal Soft Costs $ 11,458,000 $ 41,514 $ % Financing Costs Financing Fees $ 678,000 $ 2,457 $ % Recordation, Professional Fees, Title, & Inspection Fees $ 787,000 $ 2,851 $ % Construction Loan Interest $ 6,026,000 $ 21,833 $ % Subtotal Financing Costs $ 7,491,000 $ 27,141 $ % Total Project Costs $ 96,883,000 $ 351,025 $ % Incremental Costs (less Land and Proffers) $ 77,642,000 $ 281,312 $ %

17 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.

18 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 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 3 rd quarter of 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/ PRE-DEVELOPMENT Conceptual Design / Submission Prep 5/1/2012 7/31/ months Entitlement 8/1/2012 1/31/ months Approval Date 2/1/ DDs 2/1/2014 5/31/ months CDs 6/1/2014 1/31/ months Demo Delay After Approval 2/1/2014 1/31/ months Building Permit Delay After CDs 2/1/2015 1/31/ months CONSTRUCTION Demo Permit 2/1/2014 4/30/ months Demolition & Abatement 3/1/2014 6/30/ months Building Permit 2/1/2015 3/31/ months Sitework Costs 4/1/2015 3/31/ months Base Building & Garage Construction 4/1/2015 3/31/ months Substantial Completion 4/1/ Begin Retail Tenant Work 1/1/ (3) months Initial Tenant Work Duration 1/1/2017 6/30/ months LEASE-UP First Unit Turnover / Initial Occupancy 12/1/ (4) months Lease Up 12/1/2016 8/31/ months Stabilization 9/1/ FINANCING Construction Loan Closing (end of month) 3/31/ Permanent Loan Closing (end of month) 9/30/ SALE Hold Period 9/1/2018 9/30/ months

19 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 $3.30 per sq. ft. A detailed rent matrix by unit type is provided in the table below. The building s unit mix is weighed heavily towards smaller units, as we believe this is the product type people will demand; it also yields the highest marginal rents. A 3% growth rate is also applied to the stabilized rent as units roll to the market during the investment period. Unit Rent / Unit / Mo. Rent / Resi RSF / Mo. Unit Type % Mix Count RSF Current Occupancy Current Occupancy 2012$ 2016$ 2012$ 2016$ Studio 20.7% $ 1,631 $ 1,868 $ 3.15 $ 3.61 JR % $ 1,958 $ 2,242 $ 3.00 $ Bed 41.7% $ 2,175 $ 2,491 $ 2.85 $ Bed w/ Den 3.6% $ 2,393 $ 2,740 $ 2.29 $ Bed 23.6% $ 2,719 $ 3,113 $ 2.73 $ 3.13 Average $ 2,176 $ 2,492 $ 2.88 $ 3.30 Total Per Year 200.0% ,520 $ 26,110 $ 29,898 $ $ 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.

20 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.

21 Capital Structure Debt Sources and Uses Sources Amount % per Unit per RSF Debt $ 67,818,000 70% $ 245,717 $ Equity 29,065,000 30% 105, Total Sources $ 96,883, % $ 351,025 $ Uses Amount % per Unit per RSF Land $ 7,280,000 8% $ 26,377 $ Proffers 11,961,000 12% 43, Hard Costs 58,693,000 61% 212, Soft Costs 11,458,000 12% 41, Financing Costs 7,491,000 8% 27, Total Uses $ 96,883, % $ 351,025 $ 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 Information Total Loan $67,818,000 Type Interest Only, Covered Construction Loan Term 36 months with 2, 1 year extensions Fee 1.00% Interest Rate Assumed 4.50% Debt Yield 8.46% Recourse Carve-out guaranty

22 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.

23 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. INVESTOR CASH FLOWS, 4.90% Cap SPONSOR Equity Investment ($2,906,496) Proceeds $7,138,451 Net Cash $4,231,955 Profit $4,231,955 % of Total Profit 20.1% IRR 25.72% Multiple 2.46x EQUITY PARTNER Equity Investment ($26,158,462) Proceeds $43,025,639 Net Cash $16,867,177 Profit $16,867,177 % of Total Profit 79.9% IRR 13.69% Multiple 1.64x INVESTOR CASH FLOWS, 5.4% Cap SPONSOR Equity Investment ($2,906,496) Proceeds $3,916,957 Net Cash $1,010,461 Profit $1,010,461 % of Total Profit 10.0% IRR 8.05% Multiple 1.35x EQUITY PARTNER Equity Investment ($26,158,462) Proceeds $35,252,615 Net Cash $9,094,153 Profit $9,094,153 % of Total Profit 90.0% IRR 8.05% Multiple 1.35x INVESTOR CASH FLOWS, 5.9% Cap SPONSOR Equity Investment ($2,906,496) Proceeds $3,013,816 Net Cash $107,321 Profit $107,321 % of Total Profit 10.0% IRR 0.95% Multiple 1.04x EQUITY PARTNER Equity Investment ($26,158,462) Proceeds $27,124,348 Net Cash $965,886 Profit $965,886 % of Total Profit 90.0% IRR 0.95% Multiple 1.04x 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.

24 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.

25 References Arlington County Department of Community Planning, Housing, and Development. Development Highlights March 27, Retrieved from smain.aspx Arlington County Department of Community Planning, Housing, and Development. Arlington Virginia: PROFILE 2012 Update. February 7, Retrieved from smain.aspx Arlington County Department of Community Planning, Housing, and Development. Round 8.1 Forecast. February 7, Retrieved from smain.aspx Arlington County Department of Community Planning, Housing, and Development. Crystal City Sector Plan. February 7, Retrieved from Arlington County Department of Community Planning, Housing, and Development. General Land Use Plan. February 7, Retrieved from Arlington County Department of Community Planning, Housing, and Development. Section 25C C-O Crystal City. February 7, Retrieved from ecode.aspx Arlington County Department of Community Planning, Housing, and Development. Administration Regulation 4.1. February 7, Retrieved from ecode.aspx Delta Associates. Washington/Baltimore Office Market Report 1 st Quarter (PDF Document) Noell Consulting. Internal Documents. January 18, REIS Reports. Pentagon City Sub-market Trend Report. April 21, (PDF Document). Personal Interviews: Joe Jewel (Vornado), Sang Park (Vornado), Gordon Fraley (Vornado)

26 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

27 Exhibit A Pro Forma and Financial Returns

28 CWC Partners Date 4/26/ th 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/mo Direct Land $ 7,280,000 $ 26,377 $ % Rental Revenue $ 8,578,000 $ 31,080 $ $ 3.43 TDRs / Sector Plan Allocation $ - $ - $ - 0.0% Rent Abatement $ - $ - $ - $ - Closing Costs $ - $ - $ - 0.0% Expense Reimbursement $ - $ - $ - $ - Subtotal Land Costs $ 7,280,000 $ 26,377 $ % 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 $ $ 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 $ $ 3.48 Hard Costs - Outside GMP $ - $ - $ - 0.0% Soft Costs $ 11,961,000 $ 43,337 $ % Expenses Subtotal Proffers $ 11,961,000 $ 43,337 $ % 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 $ % Net Operating Income $ 5,854,000 $ 21,210 $ $ 2.34 Base Building Construction $ 45,783,000 $ 165,880 $ % Garage Construction $ 6,370,000 $ 23,080 $ % Capital Reserves $ (116,000) $ (420) $ (0.56) $ (0.05) Costs Outside GMP $ 950,000 $ 3,442 $ % Tenant Improvements $ - $ - $ - 0.0% Net Operating Income After Reserves $ 5,738,000 $ 20,790 $ $ 2.29 Hard Costs Contingency $ 4,095,000 $ 14,837 $ % Subtotal Hard Costs $ 58,693,000 $ 212,656 $ % SCHEDULE $ 0.67 Soft Costs Substantial Completion 4/1/2017 Pre-Development & Due Diligence $ 313,000 $ 1,134 $ % Initial Occupancy 12/1/2016 Design & Engineering $ 4,513,000 $ 16,351 $ % Stabilization 9/1/2018 Legal & Accounting Fees $ 350,000 $ 1,268 $ % Sale Date 9/30/2018 Permits, Licenses, Bonds, & Fees $ 2,189,000 $ 7,931 $ % Insurance $ 126,000 $ 457 $ % Land at Basis Land at Market Taxes & Utilities (During Construction) $ 578,000 $ 2,094 $ % PROFITABILITY (after reserves) ($29/FAR SF) ($29/FAR SF) Marketing $ 548,000 $ 1,986 $ % Other Soft Costs $ 176,000 $ 638 $ % Yield on TPC 5.92% 5.92% Testing & Inspections $ 337,000 $ 1,221 $ % Yield on Incremental Costs 7.39% 7.39% Overhead & Development Fee $ 1,213,000 $ 4,395 $ % Soft Cost Contingency $ 1,115,000 $ 4,040 $ % Subtotal Soft Costs $ 11,458,000 $ 41,514 $ % Project Value (assuming 4.90% cap rate) $ 117,102,000 $ 424,283 $ Value Created (Value less TPC) $ 20,219,000 $ 73,257 $ Financing Costs Financing Fees $ 678,000 $ 2,457 $ % Unleveraged IRR 11.70% Recordation, Professional Fees, Title, & Inspection Fees $ 787,000 $ 2,851 $ % Leveraged IRR 15.02% Construction Loan Interest $ 6,026,000 $ 21,833 $ % Peak Equity Multiple 1.72 Subtotal Financing Costs $ 7,491,000 $ 27,141 $ % Unleveraged 10.00% $ 2,720,000 $ 9,855 $ Total Project Costs $ 96,883,000 $ 351,025 $ % Leveraged 10.00% $ 4,435,000 $ 16,069 $ Incremental Costs (less Land and Proffers) $ 77,642,000 $ 281,312 $ % FINANCING SUMMARY Adjusted Costs (TPC less Capitalized Costs) $ 96,883,000 $ 351,025 $ 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 $ Total Lender Budget $ 96,883,000 $ 351,025 $ Debt $ 67,818,000 $ 245, % Equity $ 29,065,000 $ 105, % Land at Market ($0/FAR SF) $ 7,280,000 $ 26,377 $ Leasing Commissions to LL Broker/ $ - $ - $ - Cash $ 21,785,000 $ 78,931 $ Peak Equity Required $ 29,065,000 $ 105,308 $

29 Waterfall Cash Flows to each tranche: Total I. Pari Passu to an IRR of 10.00% 42,002,390.7 Sponsor 10.00% 4,200,239.1 PROJECT FUNDING Equity Partner 90.00% 37,802,151.7 Equity Contributions Sponsor 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% 1,608,347.0 Profit $20,979,167.8 IRR 15.02% Multiple 1.72x Cash to Equity 80.00% 6,433,388.1 STRUCTURE Sponsor 20.00% 1,286,677.6 Tier Equity Partner 80.00% 5,146,710.5 BoP Balance Equity Contributions (29,064,958.0) INVESTOR CASH FLOWS, 5.4% Cap Accrual 10.00% (12,937,432.7) SPONSOR Paydown 42,002,390.7 Equity Investment ($2,906,496) EoP Balance Proceeds $7,095,264 Cash left for distribution 8,041,735.1 Net Cash $4,188,768 IRR Check 10.00% 12,937,432.7 Profit $4,188,768 Tier % of Total Profit 20.0% Starting Balance IRR 25.54% Equity Contributions (29,064,958.0) Multiple 2.44x Accrual 10.00% (12,937,432.7) Paydown 42,002,390.7 EQUITY PARTNER Balance Equity Investment ($26,158,462) Cash left for distribution 8,041,735.1 Proceeds $42,948,862 IRR Check 10.00% 12,937,432.7 Net Cash $16,790,400 Profit $16,790,400 % of Total Profit 80.0% IRR 13.64% Multiple 1.64x

30 CWC Partners th Street Apartments REVENUE & OPERATING EXPENSES ASSUMPTIONS Blue numbers are hardcoded inputs. RENTAL REVENUE RENT ESCALATION TABLE Annual Period Start End Duration Mrkt Rent Unit Rent / Unit / Mo. Rent / Resi RSF / Mo. Current - Approval A 5/1/2012 1/31/ mos. 3.00% Unit Type % Mix Count RSF Current Occupancy Current Occupancy Approval - Construction B 2/1/2014 3/31/ mos. 3.00% 2012$ 2016$ 2012$ 2016$ Construction - Occupancy C 4/1/ /30/ mos. 3.00% Studio 20.7% $ 1,631 $ 1,868 $ 3.15 $ 3.61 JR % $ 1,958 $ 2,242 $ 3.00 $ 3.44 Compound Average Growth Rate Period Start End Duration Mrkt Rent 1 Bed 41.7% $ 2,175 $ 2,491 $ 2.85 $ 3.26 Current - Approval A 5/1/2012 1/31/ mos. 3.00% 1 Bed w/ Den 3.6% $ 2,393 $ 2,740 $ 2.29 $ 2.62 Current - Construction B 5/1/2012 3/31/ mos. 3.00% 2 Bed 23.6% $ 2,719 $ 3,113 $ 2.73 $ 3.13 Current - Occupancy C 5/1/ /30/ mos. 3.00% Average $ 2,176 $ 2,492 $ 2.88 $ 3.30 DELIVERY ASSUMPTIONS Total Per Year 200.0% ,520 $ 26,110 $ 29,898 $ $ Units Delivered Per Month 68 units OTHER INCOME & PARKING INCOME Delivery Period 4.0 months Rate Rent / Unit / Yr Rent / Resi RSF / Yr LEASE UP ASSUMPTIONS Category Quantity Current Current Occupancy Current Occupancy 2012$ 2012$ 2016$ 2012$ 2016$ Units Occupying at First Unit Turnover 8 units Parking Income Units Moving In Per Month 16 units Standard Parking 331 $ 100 $ 1,440 $ 1,649 $ 1.91 $ 2.18 Lease Up Duration 21 months Reserved 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 ex Subtotal 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 & TAXES Quick Estimate 276 $ 750 $ 750 $ 859 $ 0.99 $ 1.14 Other - $ - $ - $ - $ - $ - Cost / Unit / Yr Cost / Resi RSF / Yr 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) $ - $ - $ - $ % Payroll $ 2,000 $ 2,290 $ 2.65 $ % CAPITAL RESERVES Marketing $ 300 $ 344 $ 0.40 $ % Office Operations $ 200 $ 229 $ 0.26 $ % Rate Cost / Unit / Yr Cost / Resi RSF / Yr Utilities $ 800 $ 916 $ 1.06 $ % Category Quantity Current Current Occupancy Current Occupancy Landscaping $ 100 $ 115 $ 0.13 $ % 2012$ 2012$ 2016$ 2012$ 2016$ Redecorating $ 250 $ 286 $ 0.33 $ % Replacement Reserve 276 $ 350 $ 350 $ 401 $ 0.46 $ 0.53 Maintenance $ 1,000 $ 1,145 $ 1.32 $ % Other - $ - $ - $ - $ - $ - Non-Routine $ - $ - $ - $ % Total Capital Reserves - - $ 350 $ 401 $ 0.46 $ 0.53 Management Fee (calculated) 2.0% $ 566 $ 648 $ 0.75 $ % Other taxes & fees $ - $ - $ - $ % VACANCY & CREDIT LOSS Insurance $ 375 $ 429 $ 0.50 $ % TDM Contributions $ 49 $ 56 $ 0.07 $ % Residential - Physical Vacancy 5.00% based on % of units Other $ - $ - $ - $ % Residential - Economic Vacancy 1.50% includes concessions and non-revenue units Subtotal Operating Expenses $ 5,640 $ 6,459 $ 7.47 $ % Residential - Credit Loss 0.00% included in economic vacancy Total Residential Vacancy & Credit Loss 6.50% Real Estate Taxes (calculated) $ 2,912 $ 3,334 $ 3.85 $ % Other $ - $ - $ - $ % CONCESSIONS Subtotal Real Estate Taxes $ 2,912 $ 3,334 $ 3.85 $ % Average Concessions 1.00 months Total Operating Expenses & Taxes $ 8,552 $ 9,793 $ $ % Concessions Until Occupancy Reaches: 93.50% Concessions Amortized or Paid Upfront? 1 Concessions on Renewals? 1 Do not edit

31 CWC Partners Blue numbers are hardcoded inputs th Street Apartments ERROR ASSUMPTIONS OWNERSHIP SCHEDULE (see "SCHEDULE" tab for inputs) STABILIZED PROJECT COSTS Start End Duration Total Per GSF Per RSF Collins Partners % Pre-Development 5/1/2012 1/31/ yrs Land $ 7,280,000 $ $ Other 0.00% Construction (includes demo) 2/1/2014 6/30/ yrs Proffers $ 11,961,000 $ $ Other 0.00% Lease Up Period 12/1/2016 8/31/ yrs Hard Costs $ 58,693,000 $ $ Total % Total Development Period 5/1/2012 8/31/ yrs Soft Costs $ 11,458,000 $ $ Financing $ 7,491,000 $ $ Total Project Costs $ 96,883,000 $ $ CONSTRUCTION FINANCING MARKET LAND VALUE Current 2012$ Maximum loan-to-cost Ratio 65.00% Value per FAR SF (Lender Use) $ LTC needed for positive net perm loan proceeds 58.07% Value per FAR SF (For Taxes) - Residential $ 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) $ 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) Annual Growth Rates Minimum Debt Yield 10.00% Period Start End Duration Mrkt Rent Op Ex RET Hard Cost Soft Cost Interest 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/ % 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 Cost Leveraged 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/ % 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%

32 CWC Partners th Street Apartments SCHEDULE Blue numbers are hardcoded inputs. All dates must be entered as the first of the month unless otherwise noted. SUMMARY Start End Duration TIMING Start End Duration Pre-Development 5/1/2012 1/31/ yrs Rents / Costs Current As Of: (1) 5/1/ Construction (includes demo) 2/1/2014 6/30/ yrs Draw Start (must be Jan. 1st) 5/1/ Lease Up Period 12/1/2016 8/31/ yrs Tenant Move-Out 5/1/ Total Development Period 5/1/2012 8/31/ yrs LAND FUNDING North Tract 2/1/ PRE-DEVELOPMENT Conceptual Design / Submission Prep 5/1/2012 7/31/ months Entitlement 8/1/2012 1/31/ months Approval Date 2/1/ DDs 2/1/2014 5/31/ months CDs 6/1/2014 1/31/ months Demo Delay After Approval 2/1/2014 1/31/ months Building Permit Delay After CDs 2/1/2015 1/31/ months CONSTRUCTION Demo Permit 2/1/2014 4/30/ months Demolition & Abatement 3/1/2014 6/30/ months Building Permit 2/1/2015 3/31/ months Sitework Costs 4/1/2015 3/31/ months Base Building & Garage Construction 4/1/2015 3/31/ months Substantial Completion 4/1/ Begin Retail Tenant Work 1/1/ (3) months Initial Tenant Work Duration 1/1/2017 6/30/ months LEASE-UP First Unit Turnover / Initial Occupancy 12/1/ (4) months Lease Up 12/1/2016 8/31/ months Stabilization 9/1/ FINANCING Construction Loan Closing (end of month) 3/31/ Permanent Loan Closing (end of month) 9/30/ Note: (1) SALE Hold Period 9/1/2018 9/30/ months (2) Sale Date (end of month) 9/30/ OK Do not delete. These line items contain key inputs that drive all escalation calculations. Overlap between First Unit Turnover and Substantial Completion assumes the delivery of 68 units per month.

33 CWC Partners th Street Apartments SQUARE FOOTAGE DETAIL Blue numbers are hardcoded inputs. Gross GFA to Above GROSS SQUARE FOOTAGE GSF-TO-RSF RATIO BASIC RENTABLE AREAS Building RENTABLE AREA Floor 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 S15/ (6x11) ( ) (S15-S14) (12x16) 13 (17+18) PH Yes % - 10 Yes 25, ,420 25,420 25, % - 9 Yes 25, ,420 25,420 25, % - 8 Yes 25, ,420 25,420 25, % - 7 Yes 25, ,420 25,420 25, % - 6 Yes 25, ,420 25,420 25, % - 5 Yes 25, ,420 25,420 25, % - 4 Yes 25, ,420 25,420 25, % - 3 Yes 25, ,420 25,420 25, % - 2 Yes 25, ,420 25,420 25, % - 1 Yes 25, ,420 25,420 25, % - G1 No , , % - G2 No , , % - G3 No , , % - Total , , , , , % 208, , , ,520 Above Grade 254, , , , SITE AREA AREA SUMMARY PARKING SUMMARY FLOORS (excluding PH) Land Area Pro rata % Pro rata SF GSF RSF Residential Retail Total North Tract 38, % 38,000 Residential 254, ,520 Parking - New Spaces Above Grade Floors 9 Other - 100% - Retail - - Parking - Existing Spaces Below Grade Floors 3 Other - 100% - Service - - Total Parking Spaces Total 12 Other - 100% - Other - - Oversell 20.0% Total 38, % 38,000 Subtotal 254, ,520 Total Permits Blended Efficiency 82.0% ZONING SUMMARY Parking Area 92,500 GSF Total Pro rata Above Grade Parking - - Parking Efficiency 335 GSF / new space Proposed 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 Unit By-Right FAR Total 346, ,520 Residential (permits per) 1.20 per 1.00 Unit By-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 - -

34 CWC Partners th Street Apartments LAND COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Direct Land By-Right 63 $ 65,000 None $ 4,082,645 $ 14,792 $ $ $ 4,082,645 $ 14,792 $ $ Unapproved Units 213 $ 15,000 None $ 3,197,851 $ 11,586 $ $ $ 3,197,851 $ 11,586 $ $ N/A None $ - $ - $ - $ - $ - $ - $ - $ - N/A None $ - $ - $ - $ - $ - $ - $ - $ - Total Direct Land $ 7,280,496 $ 26,379 $ $ $ 7,280,496 $ 26,379 $ $ TDRs / Sector Plan Allocation TDRs None $ - $ - $ - $ - $ - $ - $ - $ - Sector Plan Allocation None $ - $ - $ - $ - $ - $ - $ - $ - Total TDRs / Sector Plan Allocation $ - $ - $ - $ - $ - $ - $ - $ - Closing Costs Title Insurance-Owner None $ - $ - $ - $ - $ - $ - $ - $ - Land Commissions None $ - $ - $ - $ - $ - $ - $ - $ - Other Closing Costs Legal 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 $ $ $ 7,280,496 $ 26,379 $ $ 34.92

35 CWC Partners th Street Apartments HARD COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Demolition & Abatement Hazardous Material Abatement 254,200 GSF $ - Construction $ - $ - $ - $ - $ - $ - $ - $ - Soil Remediation 254,200 GSF $ - Construction $ - $ - $ - $ - $ - $ - $ - $ - Other 254,200 GSF $ - Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Before Indirect Costs $ - $ - $ - $ - $ - $ - $ - $ - Indirect Costs Estimate 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 $ - $ - $ - $ - $ - $ - $ - $ - Alternates Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Alternates $ - $ - $ - $ - $ - $ - $ - $ - Total Demolition & Abatement $ - $ - $ - $ - $ - $ - $ - $ - Sitework Sitework 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 Costs Estimate 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 Alternates GSA 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

36 CWC Partners th Street Apartments HARD COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Base Building Construction Preconstruction Fee Construction $ - $ - $ - $ - $ - $ - $ - $ - Base Building Residential Structure 254,200 GSF $ Construction $ 43,214,000 $ 156,572 $ $ $ 45,783,427 $ 165,882 $ $ Retail Structure 0 GSF $ Construction $ - $ - $ - $ - $ - $ - $ - $ - Loading / Service Structure 0 GSF $ Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Base Building 254,200 GSF $ 43,214,000 $ 156,572 $ $ $ 45,783,427 $ 165,882 $ $ Subtotal Before Indirect Costs $ 43,214,000 $ 156,572 $ $ $ 45,783,427 $ 165,882 $ $ Indirect Costs Estimate 0.00% $ - $ - $ - $ - $ - $ - $ - $ - 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 $ 43,214,000 $ 156,572 $ $ $ 45,783,427 $ 165,882 $ $ Alternates GSA Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - LEED Platinum Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - LSDBE Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Alternates $ - $ - $ - $ - $ - $ - $ - $ - Total Base Building Construction $ 43,214,000 $ 156,572 $ $ $ 45,783,427 $ 165,882 $ $ Garage Construction Above Grade Parking 0 GSF $ - Construction $ - $ - $ - $ - $ - $ - $ - $ - Below Grade Parking 92,500 GSF $ Construction $ 6,012,500 $ 21,784 $ $ $ 6,369,993 $ 23,080 $ $ Parking Equipment Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Garage Construction 92,500 GSF $ $ 6,012,500 $ 21,784 $ $ $ 6,369,993 $ 23,080 $ $ Subtotal Before Indirect Costs $ 6,012,500 $ 21,784 $ $ $ 6,369,993 $ 23,080 $ $ Indirect Costs Estimate 0.00% $ - $ - $ - $ - $ - $ - $ - $ - 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 $ 6,012,500 $ 21,784 $ $ $ 6,369,993 $ 23,080 $ $ Alternates GSA Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - LEED Platinum Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - LSDBE Premium 0.00% $ - $ - $ - $ - $ - $ - $ - $ - Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Alternates $ - $ - $ - $ - $ - $ - $ - $ - Total Garage Construction $ 6,012,500 $ 21,784 $ $ $ 6,369,993 $ 23,080 $ $ 30.55

37 CWC Partners th Street Apartments HARD COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Costs Outside GMP FF&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 Costs Security 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 Insurance Builder's Risk - Delay of Completion 254,200 GSF $ Construction $ 5,164 $ 19 $ 0.02 $ 0.02 $ 5,471 $ 20 $ 0.02 $ 0.03 Builder's Risk 254,200 GSF $ 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 Other Air 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 Contingency Construction Contingency 7.50% $ 3,865,058 $ 14,004 $ $ $ 4,094,867 $ 14,836 $ $ Total Hard Costs Contingency $ 3,865,058 $ 14,004 $ $ $ 4,094,867 $ 14,836 $ $ Tenant Improvements Retail 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 $ $ $ 58,693,095 $ 212,656 $ $

38 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF Soft Costs Pre-Development & Due Diligence Pre-Development 208,520 RSF $ 1.50 None $ 312,779 $ 1,133 $ 1.23 $ 1.50 $ 312,779 $ 1,133 $ 1.23 $ 1.50 Due Diligence Legal: 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 & Engineering Architect Costs Architect - Base Building (of Record) Base building - PDSP 254,200 GSF None $ - $ - $ - $ - $ - $ - $ - $ - Base building ,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 - Design Design - PDSP 254,200 GSF None $ - $ - $ - $ - $ - $ - $ - $ - Design ,520 RSF None $ - $ - $ - $ - $ - $ - $ - $ - Design 208,520 RSF $ - None $ - $ - $ - $ - $ - $ - $ - $ - Additional Services 7.00% None $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Architect - Design $ - $ - $ - $ - $ - $ - $ - $ - Architect - Tenant Program 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 Costs Engineer - 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 - Structural Structural 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 Building MEP 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

39 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF Consultant Costs Consultant - 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 Other Consultant - 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 Costs Interior 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-Design Architectural 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 $ $ $ 4,513,431 $ 16,353 $ $ 21.65

40 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF Legal & Accounting Fees Accounting 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, & Fees Building 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 Occupancy Master 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 Fees Site 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 $ Insurance Contractor'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

41 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF 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 $ Residential $ Vacant Land $ Assessment Cap Rates Commercial 7.25% Residential 6.30% Vacant Land 7.75% Vacancy Rate for Assessment 7.00% Use Mil Rate For: Total Prorata North 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 $ - $ - $ - Utilities Utilities 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 Marketing Advertising 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

42 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF Other Soft Costs Miscellaneous Travel and Entertainment 76 mos. $ None $ 25,200 $ 91 $ 0.10 $ 0.12 $ 25,200 $ 91 $ 0.10 $ 0.12 Postage/Shipping/Messenger 76 mos. $ None $ 25,200 $ 91 $ 0.10 $ 0.12 $ 25,200 $ 91 $ 0.10 $ 0.12 Miscellaneous 76 mos. $ 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 & Inspections Testing 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 Commissions Leasing Commissions Calculated $ - $ - $ - $ - $ - $ - $ - $ - Total Leasing Commissions $ - $ - $ - $ - $ - $ - $ - $ - Overhead & Development Fee Pre-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 Contingency Soft 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 $ $ $ 11,457,669 $ 41,513 $ $ 54.95

43 CWC Partners th Street Apartments SOFT COST ASSUMPTIONS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per GSF Per RSF Financing Costs Financing Fees Financing Fees - Construction Debt $ 67,818, % Construction $ 640,122 $ 2,319 $ 2.52 $ 3.07 $ 678,182 $ 2,457 $ 2.52 $ 3.07 Financing Fees - Mezzanine Debt $ % None $ - $ - $ - $ - $ - $ - $ - $ - Financing Fees - Equity $ % None $ - $ - $ - $ - $ - $ - $ - $ - Broker Fee $ % 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 Fees Recordation 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 Fees Loan - 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, & Inspections Title 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 & Inspections Lender 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 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 Interest Construction Loan Interest Calculated $ 6,026,316 $ 21,834 $ $ $ 6,026,316 $ 21,834 $ $ Total Construction Loan Interest $ 6,026,316 $ 21,834 $ $ $ 6,026,316 $ 21,834 $ $ Carry Carry Calculated $ - $ - $ - $ - $ - $ - $ - $ - Total Carry $ - $ - $ - $ - $ - $ - $ - $ - Total Financing Costs $ 7,412,966 $ 26,859 $ $ $ 7,491,381 $ 27,143 $ $ 35.93

44 CWC Partners th Street Apartments PERMITS, LICENSES, BONDS, & FEES Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Building Permits Excavation 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 Permit Base 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 Permit Base 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 Permits Street Light 0 lights $ Construction $ - $ - $ - $ - $ - $ - $ - $ - Parking Meters - Removal 0 meters $ Construction $ - $ - $ - $ - $ - $ - $ - $ - Parking Meters - Out-of-service 0 meters $ Construction $ - $ - $ - $ - $ - $ - $ - $ - Lane Closures 1 lanes $ 0.50 Construction $ 183,705 $ 666 $ 0.72 $ 0.88 $ 194,628 $ 705 $ 0.77 $ linear feer Steel 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 $ Construction $ 860 $ 3 $ 0.00 $ 0.00 $ 911 $ 3 $ 0.00 $ Floors $ $ Subtotal Towers, Fences, etc. $ 5, $ 0.02 $ 0.03 $ 6, $ 0.02 $ 0.03 Subtotal Building Permits $ 575,604 $ 2,086 $ 2.26 $ 2.76 $ 609,829 $ 2,210 $ 2.40 $ 2.92

45 CWC Partners th Street Apartments PERMITS, LICENSES, BONDS, & FEES Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Certificates of Occupancy Master 1 Base Fee $ 2,319 Occupancy $ 8,027 $ 29 $ 0.03 $ 0.04 $ 8,789 $ 32 $ 0.03 $ sf/100 com $ 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 $ sf/100 com $ apts $ - Automation Fee 10% Partial 1 Base Fee $ - Occupancy $ - $ - $ - $ - $ - $ - $ - $ - 0 sf/100 com $ apts $ - Automation Fee 10% Parking Structure 1 Base Fee $ Construction $ 1,849 $ 7 $ 0.01 $ 0.01 $ 1,958 $ 7 $ 0.01 $ ,500 Garage/5000SF $ apts $ - Automation Fee 10% Subtotal Certificates of Occupancy $ 13,064 $ 47 $ 0.05 $ 0.06 $ 14,240 $ 52 $ 0.06 $ 0.07 Licenses Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Other Construction $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Bonds $ - $ - $ - $ - $ - $ - $ - $ - Bonds LEED Bond $ 435, % 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

46 CWC Partners th Street Apartments PERMITS, LICENSES, BONDS, & FEES Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Site Plan Review Fees PDSP 1 Base Fee $ 21,278 Approval $ 23,531 $ 85 $ 0.09 $ 0.11 $ 24,360 $ 88 $ 0.10 $ acres $ Automation Fee 10% PDSP (DES Fee) 1 Base Fee $ 21,278 Approval $ 21,391 $ 78 $ 0.08 $ 0.10 $ 22,146 $ 80 $ 0.09 $ acres $ Site Plan 1 Base Fee $ 10,085 Approval $ 46,845 $ 170 $ 0.18 $ 0.22 $ 48,497 $ 176 $ 0.19 $ sf/100 com $ apts $ 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 $ sf/100 com $ apts $ 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 $ sf/100 com $ apts $ Automation Fee 10% 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 $ sf/100 com $ apts $ 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 $ sf/1000 com $ apts $ Automation Fee 10% 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 $ sf/1000 com $ 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 $ sf/1000 com $ apts $ Automation Fee 10% 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 $ sf/1000 com $ 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 $ sf/100 com $ apts $ Automation Fee 10% 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 $ sf/100 com $ apts $ Minor Site Plan Amendment #2 1 Base Fee $ 2,527 Approval $ 38,532 $ 140 $ 0.15 $ 0.18 $ 39,890 $ 145 $ 0.16 $ sf/100 com $ apts $ Automation Fee 10% 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 $ sf/100 com $ apts $ Subtotal Site Plan Review Fees $ 291,988 $ 1,058 $ 1.15 $ 1.40 $ 302,284 $ 1,095 $ 1.19 $ 1.45

47 CWC Partners th Street Apartments PERMITS, LICENSES, BONDS, & FEES Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Permit Reviews Fees Subdivision Plat Review 1 Base Fee $ Construction $ 271 $ 1 $ 0.00 $ 0.00 $ 287 $ 1 $ 0.00 $ Lots $ 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 $ Construction $ 13,692 $ 50 $ 0.05 $ 0.07 $ 14,506 $ 53 $ 0.06 $ ,200 GSF/5,000SF $ apts $ - Automation Fee 10% Subtotal Permits Review $ 16,514 $ 60 $ 0.06 $ 0.08 $ 17,496 $ 63 $ 0.07 $ 0.08 Misc. Fees Tree 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 $ 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 Fees Temporary / 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 Total Bathroom group 276 Unit ,794 1 BA Percentage 70.0% 2 BA Percentage 30.0% 3 BA Percentage 0.0% 100.0% Kitchen sink 276 Unit Washing machine - residential 276 Unit Amenities area 1.00 LS Floor drains 2.00 LS Service area 4.00 LS Mechanical area 4.00 LS Retail 1.00 LS 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

48 CWC Partners th Street Apartments PROFFERS Unit Inputs (2012$) Current Costs (2012$) Escalated Costs Quantity Unit Unit Price Escalate Until Total Per Unit Per GSF Per RSF Total Per Unit Per GSF Per RSF Proffers Within Development Budget Land Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Total Land $ - $ - $ - $ - $ - $ - $ - $ - Hard Costs - Within GMP Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Total Hard Costs - Within GMP $ - $ - $ - $ - $ - $ - $ - $ - Hard Costs - Outside GMP Pedestrian Bridge Removal 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Total Hard Costs - Outside GMP $ - $ - $ - $ - $ - $ - $ - $ - Soft Costs Green Building Fund Contribution 254,200 GSF $ 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 Contribution One-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 Contribution Under 1.0 FAR 38,000 FAR SF $ 1.78 Approval $ 67,712 $ 245 $ 0.27 $ 0.32 $ 70,100 $ 254 $ 0.28 $ 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 Proffers Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Other 254,200 GSF $ - Approval $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Other Proffers $ - $ - $ - $ - $ - $ - $ - $ - Subtotal Before Cash Remainder $ 2,197,028 $ 7,960 $ 8.64 $ $ 2,276,411 $ 8,248 $ 8.96 $ Remaining Cash Proffers 187,887 FAR SF $ None $ 9,684,142 $ 35,087 $ $ $ 9,684,142 $ 35,087 $ $ Total Soft Costs $ 11,881,170 $ 43,048 $ $ $ 11,960,552 $ 43,335 $ $ Total Proffers Within Development Budget $ 11,881,170 $ 43,048 $ $ $ 11,960,552 $ 43,335 $ $ Proffers Outside Development Budget Operating Costs Annual TDM Contribution (30-yr ,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 Credits LEED Gold / Platinum Credit 38, FAR $ 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 $ $ $ 13,260,000 $ 48,043 $ $ Density Calculation Site Area By-Right Density Proposed Density Community Benefit Density 1.75 FAR 6.69 FAR 38,000 SF 66,313 FAR SF 254,200 FAR SF 187,887 FAR SF Community Benefit Density Value Community Benefit Density Value per FAR SF $ $ 13,260,

49 CWC Partners th Street Apartments STABILIZED 10-YEAR CASH FLOW Assumes 100% ownership and stabilization on 9/1/ Year 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 Revenue Rental 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 Expenses Operating 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 Expenditures Releasing 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%

50 CWC Partners th Street Apartments TIMELINE Start End Duration Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 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/ 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

51 Exhibit B Aerial Photographs and Maps

52

53

54

55

56 Exhibit C Arlington Site Plan 4.1 Process

57 Exhibit C Arlington Site Plan 4.1 Process (cont d)

58 Exhibit D Crystal City Existing Conditions

59 Exhibit E Current Crystal City Zoning Map

60 Exhibit F Crystal City after Sector Plan Implementation

61 Exhibit G Crystal City Sector Plan Detail of Project Site