Four Seasons-LEC-2-12-2020

FOUR SEASONS

LIFE
ENHANCEMENT

COMMUNITY

FOR ACTIVE ADULTS

KEY DEAL POINTS

• Luxury, Class-A Buildout focused on Growing Senior Living Market for 150 Active
Adult Multifamily Units with an accent on Community and Wellness.

• Seeking to secure a Long-term HUD Loan with Low Interest Rate: The FHA 221(d)(4)
construction financing, which comes with long-term, low-rate terms. Section
221(d)(4)mortgage loans are designed to facilitate the new construction or substantial
rehabilitation of multifamily rental or cooperative housing for moderate-income
families, elderly, and the handicapped. Single Room Occupancy (SRO) projects may
also be insured under this section. The Project Entity expects to obtain senior debt with
a forty (40) year term.

• The project is a 4-story Garden Style apartment complex of wood frame construction
and will consist of 150 units with 200+ surface parking spaces.

• The amenities will include gated access, on-site management, swimming pool, laundry
room, fitness center, lounge area, two elevators, two dog parks, outdoor grilling stations,
community room with billiards and computers, media room, extra storage, bicycle
racks, and courtyard.

• High-End, Premium, Amenity-Rich Submarket: The property is ideally located on 4 +
Acres and adjacent to an 18 hole golf course and supermarket anchored shopping
center. Just 10 minutes to the beach and a host of amenities in the surrounding area.

SOURCE-USES

Units 150

Sources Amount % of Total CAPITAL STACK

Senior Debt 22,687,500 75.00% Senior Debt Investor Equity Seller Equity
Investor Equity 6,062,500 20.04%
Seller Equity 1,500,000
4.96%

Total Sources 30,250,000 100.00%

Uses 4,000,000 $ 26,667
18,750,000 $ 125,000
Land $ 30,000
Hard Costs 4,500,000 $ 15,000
Soft Costs 2,250,000 $ 5,000
Reserves
Developer Fee 750,000 $201,667

Total Uses 30,250,000

NET EFFECTIVE INCOME

FOUR SEASONS -LEC
MULTI INCOME EXPENSE

Income # Units SF Per Unit Per GSF Avg Monthly Rent
Market Rents 150
140,000 $ 3,360,000 $ 22,400.00 $ 24.00 $ 1,866.67

150

Fees 10.00% $ 25.00 $ 400,000
Parking 16,000 $ 3,760,000
Ret ail
3.00% $ 112,800
GPR Total DU and CU Income

Vacancy 1.00% $ 37,600
Ground Lease
Loss to Lease
Concessions
Models
Employee Apartment Discount
Rent Adjustment Prior Period
Collection Loss

Total Rental Losses $ 150,400

Net Effective Income $ 3,609,600 $ 24,064 $ 26

PROFORMA

Net Effective Income $ 3,609,600 $ 24,064 $ 25.78

Expenses # units Assumptions Expense $ Per Unit $ Per GSF % Distribution Exp. Per GSF 12
Payroll 150 $ 30,000 $ 200.00 $ 0.21 2.53% $ 16.67
Repairs & Maint. 150 $ 30,000 $ 200.00 $ 0.21 2.53% 16.67
Make Ready 150 $ 96,000 $ 640.00 $ 0.69 8.11% $ 0.21 $ 53.33
Contract Services 150 $ $ 700.00 $ 0.75 8.87% $ 0.69 $ 58.33
Advert/Mktg/Promo 150 $ 105,000 $ 860.00 $ 0.92 10.90% $ 0.75 $ 71.67
Admin/Office/Professional 150 $ 129,000 $ 450.00 $ 0.48 5.70% $ 0.92 $ 37.50
Utilities 150 $ $ 900.00 $ 0.96 11.41% $ 0.48 $ 75.00
Management Fees 150 67,500 $ 721.92 $ 0.77 9.15% $ 0.96 $ 60.16
Real Estate Taxes 150 3.00% $ 135,000 $ $ 2.58 30.50% $ 0.77 $
Property Insurance 150 10.00% $ 108,288 $ 2,406.40 $ 0.60 7.12% $ 2.58 $ 200.53
Replacement Reserve 150 360,960 561.87 0.27 3.17% $ 0.60 $ 46.82
$ 250.00 $ 0.27 $ 20.83
Total Expenses $ 84,280
37,500 657.52
Net Operating Income
32.79% $ 1,183,528.00 $ 7,890.19 $ 8.45 100.00% $ 8.24 $

$ 2,426,072 $ 16,174 $ 17.33

FINANCING HUD
22,687,500
PROPOSED FHA 221(d)(4) 4.00 %
LENDER 29 MONTHS
LOAN AMOUNT 480 MONTHS
INTEREST RATE 480 MONTHS
I/O PERIOD
TERM 22,687,500
AMORTIZATION $94,819
$1,137,837
LOAN 5.02 %
MONTHLY PAYMENT
ANNUAL PAYMENT
CONSTANT

Unit Mix

FLOORPLANS

FLOORPLANS

FLOORPLANS

FLOORPLANS

INDEPENDENT LIVING FACILITIES GROWTH

The addition of IL units remains elevated. Stock grew by nearly 12,000 rooms
during 2017, well above the 10-year annual average of 7,350 units. The
construction pipeline remains full, with approximately 22,350 units underway at
the end of last year, down from nearly 23,900 at the end of 2016, which will keep
deliveries above the long-term average. • Despite robust construction, stabilized
majority IL occupancy has remained in the low-90 percent area for the past five
years. In 2017, the rate ended the year at 91.5 percent, down 20 basis points from
one year earlier and on par with the five-year average. • Increased competition
from newer units is slowing rent gains in the majority IL segment, with the
average advancing 2.3 percent to $3,106 per month. In 2016, the average
increased by 3.8 percent, the strongest annual advance in the last 10 years. Sales
activity in the majority IL sector fell by more than half during 2016, but the
segment realized a notable recovery over 2017 as transaction velocity jumped 86
percent. Strengthening demand resulted in a 14 percent jump in the average price
to more than $200,000 per unit. Portfolio deals nearly tripled when compared
with 2016, and cap rates compressed close to 6 percent for these deals. Outlook:
Demand for IL units remains intense, keeping occupancy above 90 percent again
this year. As completions in the segment remain elevated this year, this could
potentially place additional downward pressure on the overall stabilized
occupancy rate, resulting in a decline again in 2018. Rent growth will continue to
moderate as operators compete for tenants, and the average rises 1.7 percent to
$3,158 per month.

10





SURVEY

DEMOS

56,000 + 65 AND OLDER
IN 10 MILE RADIUS

16

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NEARBY

MONMOUTH COLLEGE

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MONMOUTH MALL RENOVATION

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MONMOUTH RACETRACK