City View Feasibility Analysis

Feasibility Analysis and
Offering Memorandum
Ryan Smyth, Principal

P a g e 2 | 64
THIS PAGE WAS INTENTIONALLY LEFT BLANK

P a g e 3 | 64
Table of Contents
I. Project Summary 5
Site Plan 6
Total Project Breakdown and Strategy 8
II. Site Analysis 11
Location 11
Neighborhood Facilities 13
Availability of Public Transit 14
Views of Subject Site 15
Views of Surrounding Land Uses 18
Schools and Employers 20
Current and Future Development 21
III. Development Plan and Design 24
Traffic, Circulation and Parking 24
Architecture and Landscape 26
IV. Market Analysis 26
National Economy 26
Local Economic Context 26
Income 29
V. Residential Market Overview 31
Vacancy 32
Survey of Generay Occupancy Residential Communities 33
Location of Communities 34
Advertised Rent and Unit Sizes 35
Community Amenities 36
Proposed New Residential Development 36
Residential Vision 36

P a g e 4 | 64
VI. Retail Market Overview 37
National and Local Retail 37
Proposed New Development 38
Retail Vision 38
VII. Financial Analysis 40
Introduction 40
Project Programming 40
Construction Schedule 43
Development Costs 44
Funding Sources 46
Construction Draws 48
Internal Rate of Return 49
Income Assumptions and Analysis 50
Rents and Unit Mix 51
Lease-Up Schedule 53
Property Performance at Stabilization 54
Income and Expenses 55
Cash Flow Projections 55
Disposition 56
Project Sensitivity 57
Conclusion 59
VIII. Appendix 60
Sample Construction Cost Estimates 61
Endnotes 64

P a g e 5 | 64
I. Project Summary
Located in the Morgantown, West Virginia Metropolitan Statistical Area, City View Luxury
Apartments will be an exciting, vibrant and financially successful mixed-use development
along Gyorko Drive adjacent to University Town Centre and Monongalia County Ballpark.
Envisioning an upscale multifamily community aimed at young professionals and dinks (dual
income, no kids) that includes many onsite amenities for residents, along with first floor
retail abutting Gyorko Drive; a leasing, financing and design plan have been crafted that will
add a high density residential component to the myriad of new retail and commercial
businesses that are being currently constructed along Gyorko Drive.
The proposed programming on site has been maximized given the site’s topography,
location and market. The new development will consist of nine apartment buildings which
will contain 12,800 square feet of first floor retail along Gyorko Drive, 70,400 square feet of
structured parking and approximately 252 apartment units consisting of 428 beds, totaling
nearly 268,800 square feet of gross leasable residential space. A 6,400 square foot central
clubhouse with a full size pool and hot tub in the middle of the site will tie all nine buildings
together to create community cohesiveness and give residents a gathering place to
socialize. There will be ample docking space behind the buildings containing the first floor
retail to allow for freight shipments to the retail spaces without creating traffic issues.
City View Luxury Apartments would be the first residential project to market in Phase III of
University Town Centre’s continued development along Exit 153 off Interstate 79. Exit 153
opened to the public in September of 2016 and is the key to the next wave of development
in the Morgantown MSA.

P a g e 6 | 64
Site Plan
BEFORE

P a g e 8 | 64
Total Project Breakdown
Total Development Costs: $40,045,495
Total Equity: $9,600,000
Total Debt: $30,445,495
Overall Project Construction Timeline: 24 Months
Phasing: Two Phases
Start Pre-Construction/Construction: Quarter 1, 2017
Total Project Delivery: December 2018
Stabilization: Early Quarter 4, 2019
Investor Returns: Five and Ten-Year Disposition
5 YEAR DISPOSITION 10 YEAR DISPOSITION
Before-Tax IRR Before-Tax IRR
19.91% 15.50%
Cash on Cash Return Cash on Cash Return
11.76% 13.04%
Equity Multiple Equity Multiple
5.20 5.46
Strategy
Keys to the Project:
 Retail is situated along Gyorko Drive for prominent visibility for those traversing the
route and those attending events at Monongalia County Ballpark.
 The project will benefit from recent completion of Exit 153 on Interstate 79. This
$22,000,000 project was opened to the public on September 1, 2016. Future residents
can now easily access Interstate 79 from two points: the brand new Exit 153
interchange, or from the long existing Exit 155 interchange. As pads develop along this
route of I-79, housing will become more of a necessity in this area. City View Luxury
Apartments has the ability to be first to market in this area.

P a g e 9 | 64
 Delivery of the buildings containing the first floor retail along with the completion of the
clubhouse and pool will make the remaining residential portion of the development
more attractive to potential residents. The onsite amenities will be a key selling point in
accelerating absorption of the units.
 The residential buildings will be stick built overtop concrete podium construction,
offering residents covered parking at a monthly fee. This will allow the project to
recoup some construction cost for the podium through ancillary fees.
 The site design promotes walkability and sociability. By having the clubhouse in the
middle of the development, it creates a community anchor for residents. The site
design also allows for traffic to flow freely in and out of the development.
 Units facing to the east and northeast can be offered at a premium rental price, driving
up potential returns. Residents of these units will enjoy the best views that Monongalia
County has to offer, with a wide, panoramic shot of downtown Morgantown and
surrounding areas.
 The development will feature elevations and exterior finishes with unique architectural
accents to promote curb appeal and desirability.

P a g e 10 | 64
THIS PAGE WAS INTENTIONALLY LEFT BLANK

P a g e 11 | 64
II. Site Analysis
Location
The development site for this development is located in the city of Morgantown, West
Virginia with approximately 328 feet of excellent road frontage along Gyorko Drive, located
at the back end of University Town Center, the largest retail and commercial center in
Monongalia County. The site, labeled “Parcel C” in marketing material, has been graded,
cleared and has all utilities already on site. There are currently no structures on the site,
which was used as a construction staging area during development of nearby structures.
The proposed development has easy, immediate access to a multitude of stores,

P a g e 12 | 64
restaurants, medical facilities, recreational destinations and major employers. The site’s
proximity to such a multitude of demand drivers along with its ease of access to Interstate
79 will make it a very attractive option to Morgantown area residents.

P a g e 13 | 64
The development site is mostly flat, with a steep downslope on the north and northeast
boundaries of the site.
The land uses directly bordering the subject site, starting from the north and proceeding in
a clockwise direction, are as follows:
North: There are no land uses directly north of the site. The steep terrain is not suitable for
development. This allows for uninhibited panoramic views north of Morgantown and
Monongalia County. An enormous selling point for the project.
East: To the east of the site is a Courtyard by Marriott containing 107 guest rooms. The
hotel was completed and opened to the public in March of 2016.
South: To the south of the site is Monongalia County Ballpark. The stadium, which opened
in April of 2015, has a 3,500 seat capacity and hosts both the West Virginia University
baseball team and the West Virginia Black Bears of the Class A-Short Season New York-Penn
League. To the southwest is WVU Medicine University Town Centre. This medical facility is
home to many branches of WVU Medicine, including Dermatology, Podiatry, Orthopedics
and the Clark K. Sleeth Family Medicine Center. WVU plans to open a surgical pavilion by
August of 2017.i
West: Directly west of the site is a Walmart Supercenter. To the northwest is Sam’s Club.
Neighborhood Facilities
University Town Centre is the home of a multitude of retail giants including Target, Best
Buy, Barnes & Noble, Dick’s Sporting Goods, Giant Eagle, Regal Cinemas, Ulta Beauty, Five
Below, Petco, Bed Bath & Beyond and GameStop. In addition to these businesses, multiple
restaurants are within a half mile of the site including Firehouse Subs, Cheddar’s Scratch
Kitchen, Cracker Barrel, Olive Garden, Longhorn Steakhouse, Red Lobster, Chili’s and
Chipotle.

P a g e 14 | 64
Located on the northwestern section of the Exit 155 interchange of Interstate 79 is The
Gateway, a retail development consisting of Triple S Harley Davidson, Hobby Lobby, The
Greene Turtle and multiple hotels. More projects are currently in pre-development.
New businesses projected to open in 2017 within a half mile of the site are Buffalo Wild
Wings, Fusion Steakhouse, Los Mariachis, Wendy’s, Hampton Inn and Star Furniture.
Availability of Public and Private Transit
The nearest bus stop is provided by the Mountain Line Transit Authority and is located at
the adjacent Walmart Supercenter. This bus route, named Route 11 Cassville, runs every 45
minutes on the weekdays with limited service on Sundays. This public transportation
service will greatly appeal to residents without vehicles, as this bus route stops near the
WVU Downtown Campus and Walnut Street Personal Rapid Transit (PRT) Station which
gives residents access to other areas of the Morgantown MSA. In addition to public
transportation, the site is also serviced by the area taxi services and Uber’s private driving
service, UberX. Access to these types of transportation is another huge plus for the
development site’s location.

P a g e 15 | 64
Views of Subject Site
View of the development site looking north.
View of the development site looking northwest. The back wall of Walmart is visible.

P a g e 16 | 64
View of the development site looking southwest. WVU Medicine UTC is visible.
View of development site looking southeast. Courtyard by Marriott is visible.

P a g e 17 | 64
View of the road frontage along Gyorko Drive.
Panoramic view of Monongalia County along the eastern site boundary.

P a g e 18 | 64
Views of Surround Land Uses
Courtyard by Marriott, to the southeast.
Monongalia County Ballpark, to the south.

P a g e 19 | 64
WVU Medicine at University Town Centre
Multiple retail pad development south and southwest of the site along Exit 153.

P a g e 20 | 64
Schools and Employers
The schools that service the development site are Mylan Park Elementary, South Middle
School and Morgantown High School. Mylan Park Elementary is 3.5 miles from the
development site. South Middle School is 6.8 miles from the site. Morgantown High School
is 4.3 miles from the site.
Higher education options include West Virginia University, the state’s flagship institution
with an on-campus enrollment of approximately 29,000 studentsii, and West Virginia Junior
College. Both are located in downtown Morgantown.
Exhibit 1: Major Employers in Monongalia Countyiii
Company Employees*
West Virginia University 7,654
WVU Medicine 6,000
Mylan Pharmaceuticals 2,200
Monongalia County Board of Education 1,800
Monongalia General Hospital 1,200
Morgantown Energy Technology Center 750
US Center for Disease Control 536
TeleTech 343
Greer Industries 320
Monongalia County Government 309
*Approximate
MONOGALIA COUNTY'S TOP 10 EMPLOYERS
The site is located within short driving distance of the employers listed in Exhibit 1. West
Virginia University’s Downtown Campus is located 4.6 miles from the development site,
while WVU’s Evansdale Campus is located 3.4 miles from the site. Mylan Pharmaceuticals,
one of the largest manufacturer of generic drugs in the world, has a processing plant that is
located 4.3 miles from the site. Both major county hospitals, Monongalia General Hospital
and Ruby Memorial Hospital, are located 5.1 miles and 4.2 miles from the site, respectively.
All of Morgantown’s major employers are located within a 15-minute drive from the
development site, providing easy access to employment for most potential residents.

P a g e 21 | 64
Zoning/Regulatory Conditions
There is currently no zoning, and by right development is permitted.
Current and Future Development
The new development in proximity to City View is being funded by tax increment financing
(TIF), real estate taxation and bond debt. Given the challenging terrain in the Morgantown
MSA, the pad development around the Exit 153 interchange represents some of the best
remaining developed acreage in the county. The future development plans were met with
great enthusiasm by local and state leaders. Exhibit 2 shows the current development plan
and businesses for Phase III of University Town Centre development. Exhibit 3 shows the
development plan for the all of the remaining buildable land surrounding Exit 153. Right
now, there is no residential component planned for any of the available pad sites. It is
expected that multiple more businesses, in addition to the ones listed in in Exhibit 2, will
relocate or expand to the new development pads, bringing more jobs and more potential
residents to the immediate area. The absorption of units at City View will hinge upon the
continued development of these site pads. National carrier FedEx recently completed a
105,000 square foot distribution center that is easily accessible from Exit 153.iv It was
recently announced that a Fortune 500 company will be building its new headquarters at
the development, although the company has yet to be named.v The Gateway, a retail
development located a mile from the subject site at Exit 155, currently has outparcels
available for sale. The development is home to Triple S Harley Davidson, The Greene Turtle,
Hobby Lobby and multiple hotels. Exhibit 4 shows an aerial of the entire development area
as of May, 2016, including Mylan Park and the location of The Mountaineer Center, the
county’s new state of the art aquatic facility. This facility will have an Olympic size pool,
water slides, diving boards and other equipment geared towards indoor watersports.vi
Proposed completion is year 2017. Mylan Park contains 300 acres of recreation, social and
educational facilities in addition to multiple employers at the Mylan Park Business Park.
Mylan Park and The Mountaineer Center represent more nearby amenities that will be an
attractive draw for potential residents at City View.

P a g e 22 | 64
Exhibit 2: Phase III Development for University Town Centre
Exhibit 3: Future Exit 153 Development

P a g e 23 | 64
Exhibit 4: Western Monongalia County Development
#1 - The Mountaineer Center
#2 - Mylan Park
#3 - Future Mylan Park Access Road
#4 - The Gateway
#5 - Exit 155
#6 - Future Commercial/Industrial Pad Sites
#7 - Rumored Location of Future Fortune 500 HQ
#8 - FedEx Distribution Facility
#9 - Exit 153
#10 - University Town Centre

P a g e 24 | 64
III. Development Plan and Design
Traffic, Circulation and Parking
Overview
The proposed development plan for City View will add the first residential component to
the new Exit 153 interchange development. Gyorko Drive will continue to see an increase is
vehicular traffic as more businesses open along the route and along the interchange. The
development site currently has great automobile access. The site design for City View is set
up in a way to allow for easy vehicular access for those wanting to visit the onsite retail, or
for those living at the complex.
Traffic
The primary access point to City View is in the center of the southern property boundary
along Gyorko Drive. This primary access is easily accessible from Gyorko Drive, as it is a four
lane highway with a middle turning lane. No changes in the traffic pattern are needed.
Circulation
There will be one point of ingress and egress to the development. Vehicles will enter at the
main entrance, travel in a semicircle and exit at the main entrance.
Parking
There will be an ample amount of parking situated on the site. At the entrance, angled
parking spaces will flank both sides of the street to allow for retail parking. The buildings
with first floor retail will be placed along the Gyorko Drive road frontage with a 60-foot
buffer from the larger residential buildings on the back of the development site to allow for
parking and freight off-loading. Each large 64’ x 200’ residential building will have one story
of concrete podium parking. Each podium garage will have a maximum of 38 parking spaces
as shown in Exhibit 5.

P a g e 25 | 64
Exhibit 5: Podium Parking Layout
There will also be parking along the front of each apartment building in an effort to
maximize site loading. Given the location of the development and the lack of multiple
public transportation options in the market, having as many parking spaces as possible is
ideal, as many residents will be using a vehicle as their main mode of transportation.
Exhibit 6: Monongalia County Parking Requirements
Unit Type Parking Requirement
1 Bedroom Unit 1 Space Per Unit
2 Bedroom Unit 1.6 Spaces Per Unit
3 Bedroom Unit 1.8 Spaces Per Unit
Retail 3 Spaces Per 1,000 SF
Based on the above ratios and the amount of retail and residential to be included in the
development, Exhibit 6 displays the required parking ratios, and Exhibit 7 displays the
amount of parking the development will need based on unit count. The development plan
was designed to maximize as much square footage as possible while still being able to
satisfy the intended parking requirements.
Exhibit 7: Parking Needed Onsite
Unit Type Spaces Needed
1 Bedroom Unit 101
2 Bedroom Unit 201
3 Bedroom Unit 45
Retail 38

P a g e 26 | 64
Given the current development plan, 386 parking spaces will be needed to satisfy the
parking requirements. The current site plan calls for approximately 416 parking spaces. 209
spaces of street parking and 207 spaces of premium covered podium parking.
Architecture and Landscape
The development will have great curb appeal along Gyorko Drive. The retail store fronts will
have backlit logos and the front elevation of the retail-anchored buildings will be of a
unique architectural design. The residential buildings will have architectural accents and
features that are not typically found in the Morgantown market that will reflect the
development’s quality. Landscaping will be typical of what is seen in the market.
LEED
LEED certified construction materials will be used where applicable with the ability to value
engineer. No minimum green building standard is required to be met.
IV. Market Analysis
National Economyvii
The U.S economy is currently on a self-sustaining growth path that should continue well
into 2017. The economy is predicted to have grown by 1.4 percent this year, with an
expected gain of 2 percent in 2017. Job growth is steady with 150,000 to 200,000 job hires
per month in 2016. Housing prices are currently up 5 percent, and are expected to increase
by 6 percent in 2017. The national unemployment rate sits at a little under 5 percent, which
is the lowest rate since the pre-recession years.
Local Economic Context
The total population in Monongalia County, West Virginia in the 2010 Census was 96,189.
The population of the Morgantown MSA, which includes Monongalia County and Preston
County to the east was 129,709 in 2010.viii The estimated population for Monongalia
County was 104,236 in 2015 with an average median age of 29.9. These numbers represent
an increase of over 8,000 county residents within the past five years. Exhibit 8 shows the

P a g e 27 | 64
age makeup in the county. Exhibit 9 shows the age makeup in the city of Morgantown. A
large percentage of Morgantown’s population is between the ages of 15 to 24. This can be
attributed to the students at West Virginia University that are permanent residents. City
View will have units that will appeal to those students either finishing up their
undergraduate degrees or those working towards their graduate degrees that are looking
for a quieter, higher end housing option off campus.
Exhibit 8: Age Makeup in Monongalia Countyix
Exhibit 9: Age Makeup in City of Morgantown
4,467
8,238
28,273
24,628
20,757
8,543
1,283
-
5,000
10,000
15,000
20,000
25,000
30,000
< 5 5 to 14 15 to 24 25 to 44 45 to 64 65 to 84 > 85
Monongalia County Population By
Age
786 1,219
15,874
5,465
3,922
1,991
403
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
< 5 5 to 14 15 to 24 25 to 44 45 to 64 65 to 84 > 85
City of Morgantown Population By Age

P a g e 28 | 64
Exhibit 10: Population Trend in Monongalia County
x
Monongalia County has seen a steady increase in population since 1970. As of 2015, the
county’s population was 104,236. This growth trend is the exception in the state of West
Virginia, where the vast majority of counties are losing population. Forecasts for the county
show an expected growth of 1.4 percent annually, which would make it the fastest growing
county over the next 20 years.xi The county is expected to add at least 10,000 new residents
between now and 2030 as development continues. This positive trend in population bodes well
for the future success and absorption of units at City View.
Exhibit 11: Population Trend in City of Morgantown
63,714
75,024 75,509
81,866
96,189
104,236
0
20,000
40,000
60,000
80,000
100,000
120,000
1970 1980 1990 2000 2010 2015
Population of Monongalia County
29,431
27,605
25,879
26,809
29,660
30,708
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
32,000
1970 1980 1990 2000 2010 2015
Population of the City of
Morgantown

P a g e 29 | 64
The City of Morgantown had a population of 29,660 as of the 2010 Census. The estimated
population as of 2015 was 30,708, an increase in population of 1,048 in the past five years.
The growth of Morgantown can be attributed to the growth of major employers in the area.
Within the past 20 years, WVU and WVU Medicine have greatly expanded operations while
Mylan Pharmaceuticals has grown into one of the largest maker of generic drugs in the
United States.
Exhibit 12: Unemployment Trend in Monongalia County
xii
The unemployment rate in Monongalia County saw an uptick in 2012, but has since leveled
off around 5.0 percent, which is in line with the national average. The Morgantown MSA
consistently ranks as the lowest metro area in the state in terms of unemployment.
Income
Monongalia County ranks fourth in Per Capita Income and eight in Median Household
Income in the state of West Virginia.xiii In Monongalia County, 39.1 percent of households
have an income between $50,000 and $149,999. If an individual in this income range were
to spend 28 percent of their household income on housing, they would be able to afford a
monthly rental payment between $1,166 and $3,500. This is the segment of the population
that City View will appeal to as an attractive housing option.
5.4
5.6
5.0
4.8
5.0 5.0
4.2
4.4
4.6
4.8
5.0
5.2
5.4
5.6
5.8
2011 2012 2013 2014 2015 2016
Unemployment Rate in Monongalia
County

P a g e 30 | 64
Exhibit 13: Households by Income in Monongalia County
Exhibits 13 and 14 show the discrepancy in income distribution between Monongalia
County and the city of Morgantown. Many of the city’s residents are permanent college
students with little income, which brings down the city’s median income and household
income statistics, creating an inaccurate picture as to the city’s economic health. Many
permanent students have their housing costs subsidized by other means (loans, family,
etc.). However, the family median income in the city of Morgantown is $72,213, which puts
the city $7,628 above the family median income of the United States. This family median
income amount is indicative of the strong workforce amongst families within the city.
Exhibit 14: Households by Income in City of Morgantown
15.10%
5.90%
11.50%
8.40%
11.70%
17.20%
10.70%
11.20%
4.30%
4.00%
0.00% 5.00% 10.00% 15.00% 20.00%
Less Than $10,000
$10,000 to $14,999
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 or More
Income by Household,
Monongalia County
25.90%
6.30%
12.80%
6.80%
10.50%
13.20%
8.50%
9.50%
3.10%
3.50%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
Less Than $10,000
$10,000 to $14,999
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 or More
Income by Household, City of
Morgantown

P a g e 31 | 64
V. Residential Market Overview
Exhibit 15: Housing by Tenure in Monongalia Countyxiv
Owner Occupied 55.66%
Renter Occupied 44.34%
HOUSING BY TENURE - MONONGALIA COUNTY
Owner Occupied 41.62%
Renter Occupied 58.38%
HOUSING BY TENURE - CITY OF MORGANTOWN
The City of Morgantown has a large number of residents that are renters, with 58.38
percent of units being renter-occupied, mainly due to the amount of WVU students who live
within the city limits. When the entire county is taken into consideration, owner vs. renter
is more evenly distributed. Based on the information provided by the U.S. Census, the
market area rental housing stock has a diverse selection of all housing types. In Monongalia
County and the city of Morgantown, 1-unit single-family detached homes are the most
prevalent, with approximately 21,850 housing units and 5,450 housing units, respectively.
The age of the housing stock in Monongalia County is diverse, with every decade since the
1930s being well represented in Exhibit 17. However, within the city of Morgantown, a
large share of the housing stock is obsolete. Over 60 percent of the housing stock within
the city limits was built prior to 1969. The city, via its comprehensive plan, is taking steps to
replace this obsolete housing with denser and more attractive alternatives.xv

P a g e 32 | 64
Exhibit 16: Housing by Unit by Structure
Exhibit 17: Housing by Year Structure Built
Vacancy
Monongalia County boasts a homeowner vacancy rate of 2.2 percent and a rental vacancy
rate of 5 percent. The city of Morgantown has consistently enjoyed rental vacancy rates
that were below the national average until 2014 as shown in Exhibit 18. However, from
-
5,000
10,000
15,000
20,000
25,000
1-unit,
detached
1-unit,
attached
2 units 3 or 4
units
5 to 9
units
10 to 19
units
20 or
more
units
Mobile
home
Boat, RV,
van, etc.
Units By Structure
City of Morgantown Monongalia County
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Built
2010 or
later
Built
2000 to
2009
Built
1990 to
1999
Built
1980 to
1989
Built
1970 to
1979
Built
1960 to
1969
Built
1950 to
1959
Built
1940 to
1949
Built
1939 or
earlier
Units By Year Structure Built
City of Morgantown Monongalia County

P a g e 33 | 64
2013 to today, the city of Morgantown has seen over 4,000 beds added to the market to
meet the increasing demand for quality student housing. This, in turn, has greatly affected
the rental vacancy rate within the city, mainly with Class ‘C’ student housing properties and
student housing located outside of the city limits. Yet, even with this rise in vacancy rates
within the city limits, potential returns on the project will not be negatively affected, as this
increase in housing stock has all been aimed to provide more quality student housing
options. The student housing market is not the market City View is trying to capture;
therefore, the increase in the vacancy rate is not a cause for concern.
Exhibit 18: Rental Vacancy Rate in the City of Morgantownxvi
Survey of General Occupancy Rental Communities
For the competitive analysis, four rental properties were evaluated within a six-mile radius
of the subject site. Age-restricted communities, subsidized communities and tax credit
properties were not included in the analysis. Only one complex dedicated to student
housing was included in this analysis, The Domain at Town Centre, because it is located
within close proximity of the subject site and has a slight mix of market renters (Comparable
Property #1). For rent by owner units were also not included in this analysis. Currently, the
Morgantown MSA lacks a variety of higher end rental communities aimed at the non-
5.12% 5.17%
7.91%
4.93% 4.56%
2.48% 2.37%
3.94% 3.92%
12.25%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Vacancy Rate in City of Morgantown

P a g e 34 | 64
student population. The closest competitor is Whisper Creek Apartments, located along the
eastern boundary of Morgantown. Whisper Creek is property #4 in Exhibit 19.
Location of Communities
Exhibit 19: Location of Comparable and Competing Communities in Relation to Subject Site
All competition is to the north and east of the subject site. City View will be the community
in closest proximity to the new Exit 153 interchange development and only the second
community in greater Morgantown area built in the last ten years that is marketed toward
the non-student population after Whisper Creek, which is still under development. This
would allow the community to be the first to the market to cater to employees of the many
businesses that will be located on Gyorko Drive and around Exit 153 as the development
continues to grow.

P a g e 35 | 64
Advertised Rents and Unit Sizes
Exhibit 20: Competitive Properties Advertised Rents
Comparable
Properties SF Rent Rent PSF SF Rent Rent PSF SF Rent Rent PSF
#1 - The Domain at Town Centre 601 $1,250 $2.08 860 $1,400 $1.63 1,172 $1,845 $1.57
#2 - Burroughs Place 800 $955 $1.19 1,200 $1,185 $0.99 N/A N/A N/A
#3 - Windwood Village 700 $755 $1.08 1,300 $1,350 $1.04 2,300 $2,200 $0.96
#4 - Whisper Creek Apartments 840 $1,065 $1.27 1,045 $1,315 $1.26 1,540 $1,885 $1.22
Average 735 $1,006 $1.41 1,101 $1,313 $1.23 1,671 $1,977 $1.25
One Bedroom Two Bedroom/Two Bath Three Bedroom
Exhibit 20 shows the advertised rents of the four comparable properties. The average rent
for a one-bedroom unit among the four properties is $1,006 for an average size of 735
square feet, or $1,41 per square foot. The average rent for a two-bedroom, two-bath unit
among the four properties is $1,313 for an average size of 1,101 square feet, or $1.23 per
square foot. The average rent for a three-bedroom unit among the three properties that
feature those unit types is $1,977 for an average size of 1,671 square feet or $1.25 per
square foot. Projected rents at City View by the time the units come online in 2018 will be
roughly 10 cents higher per square foot than Whisper Creek’s current advertised rents.
Construction Style
Exhibit 21: Most Comparable Properties Construction Styles
Comparable Properties Construction Style Exterior Finish
The Domain at Town Centre Three-story garden style Hardie plank and vinyl siding
Burroughs Place Four-story over first floor retail Brick and stone
Windwood Village Two-story and townhome-style Vinyl siding
Whisper Creek Apartments Three-story garden style Stone veneer and Hardie plank
Community Amenities
Of the four comparable communities, The Domain at Town Centre and Whisper Creek
Apartments have a full slate of onsite amenities including a pool and clubhouse. This allows
them to command higher rents than the other two comparable properties. The Domain at
Town Centre has upscale interior finishes including granite countertops and luxury vinyl tile.
Whisper Creek features carpet, tile and solid surface countertops along with garage stalls
included with some units.

P a g e 36 | 64
Exhibit 22: Comparable Properties Amenities Offered
Comparable Properties Clubhouse Fitness Center Pool Lounge Picnic Area Rec Courts
#1 - The Domain at Town Centre X X X X X X
#2 - Burroughs Place X X X
#3 - Windwood Village X X
#4 - Whisper Creek Apartments X X X X X X
Comparable Properties Washer/Dryer Granite Hardwood Secured Access Secured Parking Pet Friendly
#1 - The Domain at Town Centre X X X
#2 - Burroughs Place X X X X X
#3 - Windwood Village
#4 - Whisper Creek Apartments X X X
Proposed New Residential Developmentxvii
There is one large student housing development currently in the pipeline within Monongalia
County. It is located in downtown Morgantown and its target market will be WVU students.
This development will not be considered direct competition to City View.
Current Development Pipeline
Whisper Creek Apartments is the only residential apartment community currently under
development. The second phase of the project is now underway. There is one residential
community beginning site work, Newberry Place, which will be a five-story, 100,000 square
foot apartment complex designed to accommodate residents with disabilities.xviii This
project will be 100 units.xix Current plans do not call for any onsite amenities. There are no
other multi-family development projects in the pipeline within 15 miles of the subject site.
Residential Vision
Monongalia County has experienced a large amount of new construction over the past 20
years. However, the residential housing stock for young professionals, dinks and empty
nesters has been neglected in favor of construction aimed at WVU students. Many young
professionals and dinks have been relegated to older apartment and townhome rentals
with less upscale finishes, aging appliances and no onsite amenities. Empty nesters have
had no choice but to stay in a home they no longer desire to maintain. City View will fill a
void in the market by offering the young professional, dink and empty nester segment a

P a g e 37 | 64
new appealing housing option in close proximity to shopping, healthcare and
entertainment. The community will be a modern, upscale community with a variety of
onsite amenities including a pool and hot tub, secured parking, business center and an
exercise room. The proposed rents will be at the high-end of the market, reflecting the
quality of construction, ideal location adjacent to business and retail, proximity to Interstate
79 and amenities located onsite.
VI. Retail Market Overviewxx
National Retail
The national retail market is slowly emerging from the depths of the recession. According
to data from the National Council of Real Estate Investment Fiduciaries, U.S. metropolitan
areas added just 6.5 million square feet of new retail construction in 2013, and 8 million
square feet will be added by the end of 2014. REIS recently reported that the national
vacancy rate for neighborhood and community shopping centers was 10.3 percent.
Countless retailers remain susceptible to the increasing popularity of online retail. Online
retailer, Amazon, currently has the seventh most popular website according to traffic
rankings by Alexa.com.xxi
Local Retail
The Morgantown MSA has seen the development of two large retail centers within the last
10 years. University Town Centre, which is adjacent to the subject site, is the home of
multiple retail giants, which were mentioned earlier in this report. Suncrest Town Center,
located 2.8 miles from the subject site, is the home to retail businesses such as Kroger, Five
Guys, Buffalo Wild Wings, Jos A. Bank, PNC Bank and SunTan City. Both developments are
considered “Large Neighborhood Centers” by the International Council of Shopping
Centers.xxii Both developments have enjoyed a great absorption rate, and there is only
2,100 square feet of available space between the two retail centers according to
Loopnet.com.

P a g e 38 | 64
Approximately 19,500 square feet of retail space is currently being constructed at Fort
Pierpont, a new neighborhood center located off Exit 7 off Interstate 68 near the Cheat Lake
area. This project is located 5.60 miles from the subject site, in the eastern part of
Monongalia County. It would not be considered a direct competitor to the retail space at
City View given its location on the eastern side of the greater Morgantown area.
Proposed New Retail Development
Future development in the Morgantown MSA will continue along Gyorko Drive as illustrated
in Section II of the analysis. Wendy’s, Buffalo Wild Wings, Star Furniture, Fusion
Steakhouse, Los Mariachis, Hampton Inn and a Ford/Kia dealership are either under
construction or projected to begin construction within the next year. 5,509 square feet of
ground floor retail is planned along Maple Drivexxiii, which is 2.4 miles from the subject site
in the North Hills area of Morgantown.
Retail Vision
Given the development’s proximity to Monongalia County Ballpark, the vision is to provide
highly visible retail space for those traveling Gyorko Drive and to provide a few places for
visitors to hang out before or after events at the ballpark. In 2016, WVU’s baseball team
had 24 games at the ballpark, while the West Virginia Black Bears at 40 games at the
ballpark. The retail space is easily walkable from Gate A at the ballpark. See Exhibit 23.
Including miscellaneous events at the ballpark, there are over 70 days of the year where
ballpark foot traffic will be walking past the retail space in additional to the vehicular traffic.
This exposure will help drive customers to the retail businesses at City View. Being in close
proximity to the ballpark will also give these businesses the potential opportunity to do
some cross promotions with the WVU baseball team or the West Virginia Black Bears to
drive foot traffic before and after games.

P a g e 39 | 64
Exhibit 23: Retail Proximity to Monongalia County Ballpark Entrance
The amount of retail, 11,520 total square feet of leasable space is a modest amount meant
to attract smaller retailers that will draw business from onsite residents, visitors to the
ballpark, employees at the WVU UTC and hotel guests at the adjacent Courtyard Marriott.
The intended first floor retail space along Gyorko Drive also creates a synergistic use, as the
remaining development pads along Gyorko Drive are retail/commercial. Lastly, the fact that
University Town Centre currently has zero vacancies bodes well for the marketability of the
retail space at City View. Top end retail space in the market has been leasing at anywhere
from $22 per square foot to $40 per square foot for trophy space.xxiv Namely, Starbucks and
Chipotle recently signed long term leases at >$35 per square foot. The projected rental rate
for the retail space will be $26.00 per square foot with a gross lease structure based off of
current asking rents.

P a g e 40 | 64
VII. Financial Analysis
Introduction
City View Luxury Apartments is a financially viable development with strong cash flow
potential. Throughout the financial analysis, a moderate approach is taken with the
projected rents and the future income factor assumptions to demonstrate the performance
strength of the project. The analysis covers the project through the first two phases of
construction, lease-up and ten years of stabilized operation of the asset.
The financial analysis will assume a disposition in year 2024, five years after the completion
of Phase Two, and disposition in year 2029, ten years after completion of Phase Two. Given
the future development growth around Exit 153 over the next ten years, an assumed exit
cap rate for the project will be seven percent. However, given the project’s cash flow
potential and growing market, a long-term hold position is advised.
Project Programming
Exhibit 24: Project Program
Uses GSF
Residential 268,800
Retail 12,800
Structure Parking 70,400
Clubhouse, Pool and Rec Area 20,400
Total 372,400
TOTAL PROGRAM - CITY VIEW CONDOMINIUMS
The project consists of approximately 268,800 gross square feet of residential, 12,800 gross
square feet of retail, 70,400 square feet of structured parking and 20,400 square feet of
recreational space (including the clubhouse). Exhibit 25 details the programming per
building and the gross and net square footage per floor.

P a g e 41 | 64
Exhibit 25: Programming for Individual Buildings
Dimensions 64 X 100 Dimensions 64 X 100
Building Footprint 6,400 Building Footprint 6,400
Four Story Building GSF Four Story Building GSF
1 - Retail 6,400 1 - Retail 6,400
2 - Residential 6,400 2 - Residential 6,400
Total Retail 6,400 Total Retail 6,400
Total Residential 19,200 Total Residential 19,200
1 - Structured Parking 12,800 1 - Structured Parking 12,800
Total Structured Parking 12,800 Total Structured Parking 12,800
Four Story Building GSF Four Story Building 12,800
BUILDING FOUR - PARKING/RESIDENTIAL
BUILDING FIVE - PARKING/RESIDENTIAL BUILDING SIX - PARKING/RESIDENTIAL
BUILDING ONE - RETAIL/RESIDENTIAL BUILDING TWO - RETAIL/RESIDENTIAL
BUILDING THREE - PARKING/RESIDENTIAL

P a g e 42 | 64
Four Story Building GSF One Story Building GSF
2 - Residential 6,400 1 - Office/Gym/Banquet 6,400
3 - Residential 6,400
4 - Residential 6,400
Total Residential 19,200
BUILDING NINE - RESIDENTIAL ONLY
BUILDING EIGHT - PARKING/RESIDENTIALBUILDING SEVEN - PARKING/RESIDENTIAL
BUILDING TEN - CLUBHOUSE
After adjusting for core loss, the total net square footage for the residential portion of the
development is 202,752 square feet and 11,520 square feet for the retail portion.
Exhibit 26: Total Leasable Square Footage
Total Residential GSF 268,800
Core Loss 12.00%
Total Leasable Square Footage 236,544
Total Number of Residential Units 252
Total Retail GSF 12,800
Core Loss 10.00%
Total Leasable Square Footage 11,520
DEVELOPMENT SQUARE FOOTAGE
DEVELOPMENT SQUARE FOOTAGE

P a g e 43 | 64
Construction Schedule
Exhibit 27: Illustrated Construction Schedule
Pre-Construction - November 2016
Phase Two Begins - January 2018
Phase One Construction
Phase One Begins Phase Two Construction Stabilization - December 2019
Quarter 1, 2017
Initial Lease Up of Phase One - January 2018
Lease Up
The project will begin its due diligence and entitlements period in November 2016. Given
the lack of permitting needed to begin initial site work, pre-construction and development
will begin in the first quarter of 2017 with roughly a 9-12 month construction timeline. The
first phase of the project will include the construction of Building One, Building Two,
Building Three, Building Four and the Clubhouse. Initial infrastructure will be completed
during this phase of construction. The estimated cost of development for Phase One is
approximately $21,300,000. Substantial completion is estimated to be in December 2017.
Phase Two will begin construction immediately following substantial completion of Phase
One, with an estimated start date in January of 2018. Construction on Phase Two is
expected to take 12 months, with substantial completion in December of 2018. This phase
of construction will include the construction of Building Five, Six, Seven, Eight and Nine as
well as any remaining site work items. The estimated construction cost for Phase Two is
approximately $18,700,000. It is estimated that full lease up of the entire development will
take 24 months, with project stabilization in December of 2019.

P a g e 44 | 64
Construction and Development Costs
Exhibit 28: Construction Cost Estimatesxxv
Type Cost PSF
Pool & Recreation Areas $45.00
Residential $82.00
Retail $80.00
Concrete Podium & Garages $13.00
Clubhouse $120.00
Open Space Costs $5.00
CONSTRUCTION COST ESTIMATES
Exhibit 28 displays the construction cost estimates for the project. These approximate costs
were derived from the 2016 National Building Cost Manual by Craftsman. Exhibit 29 and
Exhibit 30 are snapshots of the project’s total construction costs and total development
costs. With the addition of onsite, financing and capitalized costs, the total development
cost for City View over two phases of construction is approximately $40,000,000. A
development fee has not been added to the project. It is projected that there will not be
any offsite work required, as no community benefit agreements are expected, nor any road
improvements to Gyorko Drive.

P a g e 45 | 64
Exhibit 29: Development Costs by Phase
Site Acquisition 3,877,390$
Site Costs 94,500$
Soft Costs 461,384$
Building One 2,336,000$
Building Two 2,336,000$
Building Three 3,648,000$
Building Four 3,648,000$
Elevators 840,000$
Clubhouse 768,000$
Pool & Rec Area 630,000$
Roads and Sidewalks 277,122$
Construction Contingency 724,156$
Construction Financing 811,803$
Permanent Financing 206,871$
Reserves 167,533$
Capitalized Payroll 472,895$
Total 21,299,654$
DEVELOPMENT COSTS - PHASE ONE
Site Costs 94,500$
Soft Costs 267,500$
Building Five 3,648,000$
Building Six 3,648,000$
Building Seven 3,648,000$
Building Eight 1,824,000$
Building Nine 1,824,000$
Elevators 1,050,000$
Roads and Sidewalks 277,122$
Construction Contingency 795,956$
Construction Financing 879,470$
Permanent Financing 183,252$
Reserves 93,729$
Capitalized Payroll 512,312$
Total 18,745,841$
DEVELOPMENT COSTS - PHASE TWO

P a g e 46 | 64
Exhibit 30: Total Development Costs
Site Acquisition 3,877,390$ 9.68%
On-Site Work 189,000$ 0.47%
Off-Site Work -$ 0.00%
Hard Construction Costs 31,922,356$ 79.72%
Soft Costs 728,884$ 1.82%
Construction Financing 1,691,272$ 4.22%
Permanent Financing 390,123$ 0.97%
Reserves 261,262$ 0.65%
Capitalized Payroll 985,207$ 2.46%
Development Fee -$ 0.00%
Total Development Costs 40,045,495$ 100%
TOTAL DEVELOPMENT COSTS
Funding Sources
Source of project funding is to be determined based off investor interest. Approximately
$9,600,000 in equity is needed over the life of the project to arrive at an approximate 75
percent loan-to-value ratio.
Exhibit 31: Loan Assumptions
Months of Construction 24 Debt Coverage Ratio 1.25
Loan Origination 0.50% LTV Ratio: 23.97%
Retainage 10.00% Term 25
Interest Rate 7.50% Interest Rate 4.40%
CITY VIEW CONDOMINIUMS - LOAN ASSUMPTIONS
Construction Loan Permanent Loan

P a g e 47 | 64
Exhibit 32: Sources of Funds
PROPOSED FUNDING
Capital Stack Equity %
Equity Percentage 23.97%
Equity - Sponsor 100,000$ 1%
Equity - Investors, LP, and/or LLC 9,500,000$ 99%
Equity - Owner (Land/Buildings) -$ 0%
Equity - Owner (Other) -$ 0%
Total Equity 9,600,000$
Debt
1st Mortgage (Conventional) 30,445,495$
2nd Mortgage (Mezz/Conv) -$
Other Mortgage (Mezzanine) -$
Total Debt: 30,445,495$
Other
City Loan (Soft) -$
County Loan (Soft) -$
Grants -$
40,045,495$
Current Excess/(Shortfall) -$
SOURCES
Total Capital Needed
Exhibit 33 shows the construction draw schedule for the two years of construction. The
total of the two construction loans is $33,825,447 with $1,353,018 in interest expense
during the periods of construction. For this analysis, it is simply assumed that the draws
are divided evenly over 12 months for each phase of construction with a 10 percent
retainage paid in the final month of construction leading up to substantial completion.

P a g e 48 | 64
Exhibit 33: Construction Draw Schedule
Construction Months: 24
Construction Loan: 33,825,447$
Loan Origination: 1.00% 338,254$
Rate: 7.50%
Retainage: 10.00%
Draw % Month Draw Retainage Net Draw Balance Interest
9.09% January-17 1,476,005$ (147,601)$ 1,328,405$ 1,328,405$ 8,303$
9.09% February-17 1,476,005$ (147,601)$ 1,328,405$ 2,656,809$ 16,605$
9.09% March-17 1,476,005$ (147,601)$ 1,328,405$ 3,985,214$ 24,908$
9.09% April-17 1,476,005$ (147,601)$ 1,328,405$ 5,313,619$ 33,210$
9.09% May-17 1,476,005$ (147,601)$ 1,328,405$ 6,642,023$ 41,513$
9.09% June-17 1,476,005$ (147,601)$ 1,328,405$ 7,970,428$ 49,815$
9.09% July-17 1,476,005$ (147,601)$ 1,328,405$ 9,298,833$ 58,118$
9.09% August-17 1,476,005$ (147,601)$ 1,328,405$ 10,627,237$ 66,420$
9.09% September-17 1,476,005$ (147,601)$ 1,328,405$ 11,955,642$ 74,723$
9.09% October-17 1,476,005$ (147,601)$ 1,328,405$ 13,284,047$ 83,025$
9.09% November-17 1,476,005$ (147,601)$ 1,328,405$ 14,612,451$ 91,328$
0.00% December-17 (0)$ 1,623,606$ 1,623,606$ 16,236,057$ 101,475$
9.09% January-18 1,599,035$ (159,904)$ 1,439,132$ 1,439,132$ 8,995$
9.09% February-18 1,599,035$ (159,904)$ 1,439,132$ 2,878,264$ 17,989$
9.09% March-18 1,599,035$ (159,904)$ 1,439,132$ 4,317,396$ 26,984$
9.09% April-18 1,599,035$ (159,904)$ 1,439,132$ 5,756,528$ 35,978$
9.09% May-18 1,599,035$ (159,904)$ 1,439,132$ 7,195,660$ 44,973$
9.09% June-18 1,599,035$ (159,904)$ 1,439,132$ 8,634,792$ 53,967$
9.09% July-18 1,599,035$ (159,904)$ 1,439,132$ 10,073,924$ 62,962$
9.09% August-18 1,599,035$ (159,904)$ 1,439,132$ 11,513,056$ 71,957$
9.09% September-18 1,599,035$ (159,904)$ 1,439,132$ 12,952,188$ 80,951$
9.09% October-18 1,599,035$ (159,904)$ 1,439,132$ 14,391,319$ 89,946$
9.09% November-18 1,599,035$ (159,904)$ 1,439,132$ 15,830,451$ 98,940$
0.00% December-18 (0)$ 1,758,939$ 1,758,939$ 17,589,390$ 109,934$
100% 33,825,447$ PAID 33,825,447$ 1,353,018$
CITY VIEW CONDOMINIUMS - CONSTRUCTION DRAW SCHEDULE
Project Snapshot and Potential Returns
The entire project is expected to completely stabilize approximately eleven to twelve
months after substantial completion of Phase Two. Exhibit 34 shows the project’s start of
construction, stabilization and exit year at the end of 2029.

P a g e 49 | 64
Exhibit 34: Project Timeline
Today's Date 10/19/2016
Acquisition Date 12/1/2016
Acquisition/Predevelopment Duration 2 months
Construction Commencement 2/1/2017
Construction Duration 11 months
Initial Occupancy Date 1/1/2018
Lease-Up Duration 12 months
Units Leased Per Month 6
Stabilization 1/1/2019
Hold Period 11 years
Total Months of Operation 144 months
Property Reversion 12/31/2029
Today's Date 10/19/2016
Acquisition Date 12/1/2016
Acquisition/Predevelopment Duration 13 months
Construction Commencement (If Any) 1/1/2018
Construction Duration 12 months
Initial Occupancy Date 1/1/2019
Lease-Up Duration 12 months
Units Leased Per Month 12
Stabilization 1/1/2020
Hold Period 10 years
Total Months of Operation 132 months
Property Reversion 12/31/2029
PROJECT TIMELINE - PHASE ONE
PROJECT TIMELINE - PHASE TWO
Exhibit 35 details the project’s before-tax cash flow and internal rate of return for the length
of operation. The project shows a substantial internal rate of return of 15.50 percent and a
large net present value at disposition indicating that the initial capital outlay is worth the
discounted cash flow year after year using a 12 percent hurdle rate. The before-tax net
present value of the initial investment is approximately $3,000,000.

P a g e 50 | 64
Exhibit 35: Cash Flow and Return Analysis (Before-Tax)
Total
LLC Cash Flow Before-Tax LLC
Equity Before Property Before-Tax
Year Pay-In Tax Sale Distribution
2017 (5,050,000)$ (5,050,000)$
2018 (4,550,000)$ (638,306)$ (5,188,306)$
2019 -$ (152,020)$ (152,020)$
2020 -$ 1,012,442$ 1,012,442$
2021 -$ 1,042,711$ 1,042,711$
2022 -$ 1,072,245$ 1,072,245$
2023 -$ 1,100,970$ 1,100,970$
2024 -$ 1,128,806$ 1,128,806$
2025 -$ 1,155,671$ 1,155,671$
2026 -$ 1,181,475$ 1,181,475$
2027 -$ 1,206,127$ 1,206,127$
2028 -$ 1,229,528$ 1,229,528$
2029 -$ 1,251,574$ 31,363,534$ 32,615,108$
Total (9,600,000)$ 10,591,222$ 31,363,534$ 32,354,757$
Before-Tax Internal Rate of Return: 15.50%
Before-Tax Net Present Value: 2,913,042$
Hurdle Rate: 12.00%
NPV Rate: 12.00%
CITY VIEW CONDOMINIUMS - BEFORE-TAX INTERNAL RATE OF RETURN
Income Assumptions and Analysis
In calculating the net operating income over the course of operation, the following
assumptions were used in Exhibit 36 to accurately gauge future returns. The total expense
ratio at project commencement is 24 percent, which will increase by 2.5 percent every year
as show in Exhibit 37. The annual vacancy and credit loss factor is a combined 5.5 percent.

P a g e 51 | 64
Exhibit 36: Income Assumptions
Category % of GOI
Salaries and Personnel 4.00%
Insurance 1.00%
Taxes 7.00%
Utilities 2.50%
Management Fees 2.00%
Administrative 2.00%
Marketing 1.00%
Contract Services 2.00%
Repairs and Maintenance 2.50%
Total 24.00%
OPERATIONAL EXPENSES
Exhibit 37: Income Factor Assumptions
Vacancy Rate 5.00%
Credit Loss 0.50%
Core Loss Factor Residential 12.00%
Core Loss Factor Retail 10.00%
Income Escalation (Pre-Stable) 2.00%
Income Escalation (Stabilization) 3.00%
Expense Escalation 2.50%
Cap Rate At Disposition 7.00%
INCOME FACTOR ASSUMPTIONS
Rents
Given the amenities onsite and the development’s location adjacent to Wal-Mart,
Monongalia County Ballpark, WVU UTC and other demand drivers, we can command top
tier rents in the market. The further expansion and development of businesses along Exit
153 with keep demand strong through asset operation allowing for future positive rent
adjustments. The bedroom mix will be 40 percent 1BR/1BA units, 50 percent 2BR/2BA units
and 10 percent 3BR/3BA units. A two-bedroom, two-bath unit is the most in demand unit
type in Morgantown, according it landlords in the area.

P a g e 52 | 64
Exhibit 38: Rents and Unit Mix
Type Rent Average SF PSF Beds Units Monthly Yearly
1 Bedroom/1 Bath $1,050 750 1.40$ 101 101 105,690$ 1,268,278$
2 Bedroom/2 Bath $1,375 1,000 1.38$ 252 126 173,004$ 2,076,051$
3 Bedroom/2 Bath $1,900 1,400 1.36$ 75 25 47,812$ 573,745$
Retail Space $26 1 24,960$ 299,520$
Total/Average $1,298 1,050 1.38$ 428 253 326,506$ 3,918,075$
PROJECTED RENTS
Exhibit 38 shows the total potential development income at full stabilization minus ancillary
fees. Exhibit 39 shows the total income produced by the apartment units with a vacancy
and credit loss factor of 5.5 percent factored into the analysis. It is projected that the
development will make approximately $167,000 a year in ancillary income from late fees,
forfeited depositions and miscellaneous fees related to operation of the apartment units.
The project’s gross potential rent in 2019 will be approximately $3,918,000.
Exhibit 39: Annual Gross Operating Income
Monthly: Yearly: Per Unit, Per Yr. Per NSF
Potential Rental Income 301,546$ 3,618,555$ 14,380$ 15.30$
- Vacancy 15,077$ 180,928$ 719$ 0.76$
- Credit Loss 1,508$ 18,093$ 72$ 0.08$
= Effective Rental Income 284,961$ 3,419,534$ 13,589$ 14.46$
+ Late Fees 3,750$ 45,000$ 179$ 0.19$
+ Forfeited Deposits 2,500$ 30,000$ 119$ 0.13$
+ Vending Machine Income 167$ 2,000$ 8$ 0.01$
+ Laundry Income -$ -$ -$ -$
+ Miscellaneous Income 7,500$ 90,000$ 358$ 0.38$
= Total Other Income 13,917$ 167,000$ 664$ 0.71$
= Gross Operating Income 298,878$ 3,586,534$ 14,252$ 15.16$
ANNUAL APARTMENT RENTAL INCOME

P a g e 53 | 64
Lease-Up Schedule
Lease-up activity for City View will take place over the course of 24 months. A flurry of pre-
leasing activity is expected in the second half of 2018 and the first half of 2019. It is
projected that the development will achieve full stabilization by December 31, of 2019.
Exhibit 40 shows the potential rent, GOI, expenses and NOI as the project achieves full
stabilization through the first three years of operation.
Exhibit 40: Lease-Up Schedule in 2018 and 2019
1st Yr. Lease Up 2nd Yr. Lease Up Stabilization
Period Beginning Date January 2018 January 2019 January 2020
Period Ending Date December 2018 December 2019 December 2020
INCOME:
Gross Potential Rent 1,618,859$ 4,001,516$ 4,283,685$
Gross Potential Parking 120,829$ 249,351$ 264,897$
Other Income 52,882$ 165,710$ 178,840$
Vacancy & Credit Loss 893,820$ 1,318,070$ 260,008$
GROSS OPERATING INCOME: 898,750$ 3,098,507$ 4,467,414$
EXPENSES:
Salaries and Personnel 67,201$ 170,184$ 186,635$
Insurance 16,800$ 42,546$ 46,659$
Taxes 117,603$ 297,822$ 326,611$
Utilities 42,001$ 106,365$ 116,647$
Management Fees 33,601$ 85,092$ 93,317$
Administrative 33,601$ 85,092$ 93,317$
Marketing 16,800$ 42,546$ 46,659$
Contract Services 33,601$ 85,092$ 93,317$
Repairs and Maintenance 42,001$ 106,365$ 116,647$
TOTAL OPERATING EXPENSES 403,209$ 1,021,105$ 1,119,809$
NET OPERATING INCOME (NOI) 495,541$ 2,077,401$ 3,347,605$
RESERVES 61,035$ 219,391$ 325,133$
LEASE UP INCOME AND EXPENSES

P a g e 54 | 64
Property Performance at Stabilization
Exhibit 41 shows the financial and operational ratios for the first year of stabilization
operation. The project demonstrates strong financial indicators at this point of operation: a
break-even percentage of approximately 70 percent, debt service coverage ratio of 1.67, an
average operational expense ratio of 25.07 percent between the two phases, stabilized debt
yield of 11 percent, cash on cash return of 11.76 percent and an equity multiple of 4.98.
Exhibit 41: Property Performance Ratios
Break-Even 70.06% Net Income Multiplier 11.96
Capitalization Rate 7.00% Vacancy & Collection Rate 5.50%
Cash on Cash Return 11.76% Maximum Mortgage Constant 12.97%
Debt Coverage Ratio 1.67 Loan Per Unit 64,319$
Debt Service Ratio 60.04% Mortgage Multiplier 3.62
Gross Rent Multiplier 2.24 Total Cost Per Square Foot 169.29$
LTV 76.03% Price Per Unit 158,507$
Operating Expense Ratio 25.07% NOI Per Unit 13,250$
Stabilized Debt Yield 11.00% Equity Multiplier 4.98
FINANCIAL RATIOS FOR FIRST FULL YEAR OF OPERATION

P a g e 55 | 64
Income and Expenses
A detailed income and expense statement was created for the first 10 years of stabilized
operation. Below, Exhibit 42 details the project at stabilization, in year five and in year ten.
Exhibit 42: Income and Expense Statement
Stabilization Year 5 Year 10
Period Beginning Date January 2020 January 2024 January 2029
Period Ending Date December 2020 December 2024 December 2029
INCOME
Gross Potential Rent 4,283,685$ 4,636,798$ 5,119,400$
Gross Potential Parking 264,897$ 286,733$ 316,577$
Other Income 178,840$ 193,583$ 213,731$
Vacancy & Credit Loss 260,008$ 281,441$ 310,734$
GROSS OPERATING INCOME 4,467,414$ 4,835,673$ 5,338,974$
EXPENSES
Salaries and Personnel 186,635$ 222,992$ 278,554$
Insurance 46,659$ 55,748$ 69,638$
Taxes 326,611$ 390,236$ 487,469$
Utilities 116,647$ 139,370$ 174,096$
Management Fees 93,317$ 111,496$ 139,277$
Administrative 93,317$ 111,496$ 139,277$
Marketing 46,659$ 55,748$ 69,638$
Contract Services 93,317$ 111,496$ 139,277$
Repairs and Maintenance 116,647$ 139,370$ 174,096$
TOTAL OPERATING EXPENSES 1,119,809$ 1,337,951$ 1,671,323$
NET OPERATING INCOME (NOI) 3,347,605$ 3,497,722$ 3,667,651$
RESERVES 325,133$ 358,886$ 406,047$
INCOME AND EXPENSE STATEMENT
Cash Flow Analysis
Exhibit 43 analyses the property’s yearly before-tax and after-tax cash flow. An assumed
tax rate of 46.10 percent was used for Federal and State taxation on ordinary income. The
property has a substantial after-tax cash flow during each year of operation after
stabilization even with the assumed higher taxation percentage.

P a g e 56 | 64
Exhibit 43: Cash Flow Analysis
Period Beginning Date January 2018 January 2019 January 2020 January 2024 January 2029
Period Ending Date December 2018 December 2019 December 2020 December 2024 December 2029
ANNUAL TAXABLE INCOME ANALYSIS
+ Net Operating Income 495,541$ 2,077,401$ 3,347,605$ 3,497,722$ 3,667,651$
- Interest Expense 707,680$ 1,309,521$ 1,278,069$ 1,137,493$ 923,220$
Cost Recovery
- Cost Recovery (Depreciation) 633,386$ 1,335,711$ 1,335,711$ 1,335,711$ 1,263,570$
- Cost Recovery Additions -$ -$ -$ -$ -$
= Total Annual Cost Recovery 633,386$ 1,335,711$ 1,335,711$ 1,335,711$ 1,263,570$
- Non-Operating Expenses (Amortization) 8,275$ 15,605$ 15,605$ 15,605$ 15,605$
= Taxable Income (Loss) (853,799)$ (583,435)$ 718,220$ 1,008,913$ 1,465,256$
ANNUAL CASH FLOW ANALYSIS
Net Operating Income 495,541$ 2,077,401$ 3,347,605$ 3,497,722$ 3,667,651$
- Annual Debt Service 1,072,812$ 2,010,030$ 2,010,030$ 2,010,030$ 2,010,030$
- Capital Additions -$ -$ -$ -$ -$
- Reserves 61,035$ 219,391$ 325,133$ 358,886$ 406,047$
+ Reserves to Capital Additions -$ -$ -$ -$ -$
= Cash Flow Before Tax (638,306)$ (152,020)$ 1,012,442$ 1,128,806$ 1,251,574$
Taxable Income (Loss) (Ordinary) (853,799)$ (583,435)$ 718,220$ 1,008,913$ 1,465,256$
x (Federal & State) 46.10% 46.10% 46.10% 46.10% 46.10% 46.10%
= Tax Liability (393,601)$ (268,964)$ 331,099$ 465,109$ 675,483$
Cash Flow Before Tax (638,306)$ (152,020)$ 1,012,442$ 1,128,806$ 1,251,574$
- Less Tax Liability -$ -$ 331,099$ 465,109$ 675,483$
Cash Flow After Tax (638,306)$ (152,020)$ 681,343$ 663,697$ 576,091$
Debt Service Coverage Ratio 0.46 1.03 1.67 1.74 1.82
ANNUAL CASH FLOW ANALYSIS
Sales Schedule
Exhibit 44 determines both the before and after tax sale proceed returns. It also accounts
for accumulated depreciation at time of sale and the project’s adjusted basis. A seven
percent capitalization rate was used to determine the sales price for the asset. The total
gain from the asset in 2024 is nearly $19,000,000 and nearly $28,000,000 in 2029 indicating
a substantial net gain on investment when depreciation is taken into account.

P a g e 57 | 64
Exhibit 44: Sales Schedule
Year 5 Year 10
Period Beginning Date January 2024 January 2029
Period Ending Date December 2024 December 2029
Sales Proceeds Before Tax
Building Sales Price Cap Rate 7.00% 49,967,459$ 52,395,012$
+ Reserve Fund 358,886$ 406,047$
- Less Commission 2.00% 999,349$ 1,047,900$
= Adjusted Sales Price 49,326,996$ 51,753,159$
- Less Mortgage Balance 25,376,324$ 20,389,625$
= Total Sale Proceeds Before Tax 23,950,672$ 31,363,534$
Sales Proceeds Before Tax 23,950,672$ 31,363,534$
- Tax On Capital Gains 5,713,076$ 8,360,713$
- Tax On Ordinary Income 132,869$ 96,900$
= Sales Proceeds After Tax 18,104,727$ 22,905,922$
Calculations
Acquisition Basis 38,760,724$ 38,760,724$
+ Capital Additions -$ -$
- Cost Recovery (Depreciation) 8,647,650$ 15,006,724$
= Adjusted Basis 30,113,074$ 23,754,000$
Sales Price 49,967,459$ 52,395,012$
- Cost of Sale 999,349$ 1,047,900$
- Adjusted Basis 30,113,074$ 23,754,000$
= Total Gain 18,855,036$ 27,593,112$
SALES SCHEDULE
Sensitivity
Lastly, Exhibit 45 shows three different sensitivity analyses to display the asset’s reaction to
fluctuations in market conditions and operation. The income and expenses used in the
sensitivity analyses are pulled from the first year of stabilized operation.

P a g e 58 | 64
Exhibit 45: Sensitivity Analysis
SENSITIVITY IS FOR FIRST YEAR AFTER STABILIZATION
SENSITIVITY ANALYSIS #1: GOI vs. EXPENSES
$4,219,569 $4,343,601 $4,467,414* $4,591,665 $4,715,697
NOI
$3,348,864* $17.01 $17.51 $18.01 $18.51 $19.01
$3.51 $3,348,864 $3,472,896 $3,596,928 $3,720,960 $3,844,992
$4.01 $3,224,832 $3,348,864 $3,472,896 $3,596,928 $3,720,960
Expenses PSF $4.51 $3,100,800 $3,224,832 $3,348,864 $3,472,896 $3,596,928
$5.01 $2,976,768 $3,100,800 $3,224,832 $3,348,864 $3,472,896
$5.51 $2,852,736 $2,976,768 $3,100,800 $3,224,832 $3,348,864
SENSITIVITY ANALYSIS #2: NOI vs. CAP RATE
$3,100,800 $3,224,832 $3,347,605* $3,472,896 $3,596,928
Valuation
$47,840,914* $12.50 $13.00 $13.50 $14.00 $14.50
6.00% $51,680,000 $53,747,200 $55,814,400 $57,881,600 $59,948,800
6.50% $47,704,615 $49,612,800 $51,520,985 $53,429,169 $55,337,354
Cap Rate 7.00% $44,297,143 $46,069,029 $47,840,914 $49,612,800 $51,384,686
7.50% $41,344,000 $42,997,760 $44,651,520 $46,305,280 $47,959,040
8.00% $38,760,000 $40,310,400 $41,860,800 $43,411,200 $44,961,600
SENSITIVITY ANALYSIS #3: EXPENSES vs. CAP RATE
$870,705 $994,737 $1,119,809* $1,242,801 $1,366,833
Valuation
$47,840,914* $3.51 $4.01 $4.51 $5.01 $5.51
6.00% $59,948,800 $57,881,600 $55,814,400 $53,747,200 $51,680,000
6.50% $55,337,354 $53,429,169 $51,520,985 $49,612,800 $47,704,615
Cap Rate 7.00% $51,384,686 $49,612,800 $47,840,914 $46,069,029 $44,297,143
7.50% $47,959,040 $46,305,280 $44,651,520 $42,997,760 $41,344,000
8.00% $44,961,600 $43,411,200 $41,860,800 $40,310,400 $38,760,000
*Numbers are approximate
Total Operating Expenses
Operating Expenses PSF
Gross Operating Income PSF
Total Gross Operating Income
Total Net Operating Income
Net Operating Income PSF

P a g e 59 | 64
Conclusion
In conclusion, City View Luxury Apartments has the potential to be a great long term
investment opportunity. The vision for the development takes advantage of its topography,
location and surrounding market. With its ideal location in close proximity to the new
Interstate 153 interchange and with the continued development of this portion of
Monongalia County, this development project has the potential to be a very profitable for
an investor’s portfolio, provides a new and exciting housing option for young professionals,
dinks and empty nesters and would be a great long-term addition to the Morgantown MSA.

P a g e 60 | 64
VIII. APPENDIX

P a g e 61 | 64
Exhibit 46: Construction Cost Estimate for One 64’ X 200’ Multi-Family Building

P a g e 62 | 64
Exhibit 47: Construction Cost Estimate for Clubhouse

P a g e 63 | 64
Exhibit 48: Construction Cost Estimate for Retail Space (Warm Vanilla Box)

P a g e 64 | 64
Endnotes:
i
http://www.wvha.org/Media/NewsScan/2016/March/3-30-16-WVU-Medicine-expanding-facilities,-service.aspx
ii
https://about.wvu.edu/wvu-facts
iii
http://www.morgantown.org/detail.php?page_id=1
iv
http://thedpost.com/Big-business-ahead-for-I--79-dev
v
http://www.wvalways.com/story/32293241/fortune-500-headquarters-expected-to-be-built-in-monongalia-
county
vi
http://www.timeswv.com/sports/plans-for-morgantown-aquatic-park-unveiled/article_49b39b30-f712-11e5-
a0ac-c706d26e8bde.html
vii
http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/
viii
www.factfinder2.census.gov
ix
x
www.census.gov
xi
http://be.wvu.edu/bber/pdfs/BBER-2014-04.pdf
xii
http://data.bls.gov
xiii
http://westvirginia.hometownlocator.com/wv/monongalia/
xiv
xv
http://www.morgantownwv.gov/wp-content/uploads/MCP-6.-Neighborhoods-and-Housing-compressed.pdf
xvi
http://www.deptofnumbers.com/rent/west-virginia/morgantown/
xvii
http://thedpost.com/Permits-sought-for-11--story-apa
xviii
http://www.acceleratedconstructionservices.com/newberry-place-2/
xix
http://www.washingtontimes.com/news/2015/jul/30/morgantown-developer-feds-settle-housing-lawsuit/
xx
www.ncreif.org
xxi
www.alexa.com
xxii
http://www.icsc.org/uploads/research/general/US_CENTER_CLASSIFICATION.pdf
xxiii
http://www.loopnet.com/Listing/19335102/1053-Maple-Dr-Morgantown-WV/
xxiv
http://www.loopnet.com/for-lease/wv/?sk=aee25f14cdbd3f0c9efe5b36d6816186&e=u
xxv
https://www.craftsman-book.com/2016-national-building-cost-manual

City View Feasibility Analysis

Recomendados

Recomendados

Mais conteúdo relacionado

Destaque

Destaque (10)

Semelhante a City View Feasibility Analysis

Semelhante a City View Feasibility Analysis (20)

City View Feasibility Analysis