OFFERING MEMORANDUM BOUNTIFUL PLACE APARTMENTS

OFFERING MEMORANDUM BOUNTIFUL PLACE APARTMENTS 345 WEST 5TH SOUTH REXBURG, ID 83440

EXCLUSIVELY MARKETED BY: TABLE OF CONTENTS 111 S. Main St., Suite 2200 Salt Lake City, Utah 84111 801.947.8300 cbcadvisors.com Steve Bogden Principal Broker 801.441.5922 steven.bogden@cbcadvisors.com EXECUTIVE SUMMARY 3 FINANCIAL SUMMARY 7 PROPERTY DETAILS 10 LOCATION INFORMATION 14 All materials and information received or derived from CBC Advisors - Intermountain its directors, officers, agents, advisors, affiliates and/or any third party sources are provided without representation or warranty as to completeness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projected financial performance of the property for any party s intended use or any and all other matters. Neither CBC Advisors - Intermountain its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party s active conduct of its own due diligence to determine these and other matters of significance to such party. CBC Advisors - Intermountain will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing. EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE. PROPERTY PHOTOS 23 FLOOR PLANS 27 SALES COMPARABLES 35 Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. CBC Advisors - Intermountain makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. CBC Advisors - Intermountain does not serve as a financial advisor to any party regarding any proposed transaction. All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. All properties and services are marketed by CBC Advisors - Intermountain in compliance with all applicable fair housing and equal opportunity laws.

SECTION 1 EXECUTIVE SUMMARY

EXECUTIVE SUMMARY PROPERTY SUMMARY Address: 345 West 5th South Rexburg, ID 83440 Price: $4,715,000 Cap Rate (Year 1): 6% Number Of Units: 27 (26 Student /1 Manager) Number Of Beds: 148 Price Per Bed: $31,858 Rentable Sq Ft: Approx. 27,296 Lot Size: 1.353 Acres PROPERTY OVERVIEW CBC Advisors is pleased to offer for sale Bountiful Place Apartments, a popular 27-unit contracted student housing project at Brigham Young University-Idaho in Rexburg, Idaho. Bountiful Place is a recently-built student housing project for men with 148 Beds that is ideally located just 2 blocks from the campus of BYU-Idaho and has lease-up timeframes that regularly outperform the market. Apartment units at Bountiful Place, and throughout the Rexburg student rental market, are leased by the bed. This makes it possible for the owner to increase rents more quickly in a market in which rents are rising. Bountiful Place Apartments approved for 148 leases. With a projected men's housing shortage at the University as soon as this coming Winter 2018 semester, due to an increased cap on university enrollment, Bountiful Place is well-situated to be fully occupied for many years to come. *For questions and additional information, please contact listing agents and not on-site management Year Built: 2012 345 WEST 5TH SOUTH, REXBURG, ID 4

COMPLETE HIGHLIGHTS COMMUNITY AMENITIES Lease-Up Outpaces BYU-Idaho Market Large On-Site Office, Including Kitchen and Bathroom Large Floor Plans Free Laundry Facilities Rent Includes Membership to World Gym Rentable Storage Units On-Site Maintenance and Manager's Unit Lounge with Projector Screen Fire Pit Ping Pong Table Multiple Bike Racks Large Outdoor Grills Approximately 90 parking stalls (rented each semester) 345 WEST 5TH SOUTH, REXBURG, ID 5

COMPLETE HIGHLIGHTS UNIT AMENITIES Unique Within Market: 50 Inch Flat Screen Smart TVs with Roku Extra Large Water Heaters in Every Unit HVAC/Heating 2 Refrigerators in Every Unit Dishwasher Garbage Disposal Vinyl Wood Flooring 2 Bathrooms, each with Private Toilets and Showers/Tubs Free Cable Free Optix High-Speed Internet Large, 3 Sink Vanities Private Closets and Desks 9 Foot Ceilings Leather Sectionals Captain's beds with dresser and abundant storage space underneath 345 WEST 5TH SOUTH, REXBURG, ID 6

SECTION 2 FINANCIAL SUMMARY

Bountiful Place - Rexburg Idaho 6-Year Cash Proforma INCOME 2017 2018 2019 2020 2021 2022 Assumptions Gross Fall/Winter Rents $331,520 $341,466 $351,710 $362,261 $373,129 $384,323 Income Growth 3.0% Less: Vacancy 4% ($13,261) ($17,073) ($17,585) ($18,113) ($18,656) ($19,216) Expense Growth 2.0% Spring Rents $149,184 $153,660 $158,269 $163,017 $167,908 $172,945 Summer Rents $15,540 $16,006 $16,486 $16,981 $17,490 $18,015 Fall/Winter Rent $1,120 EFFECTIVE RENTAL INCOME $482,983 $494,058 $508,880 $524,146 $539,871 $556,067 Projected Occupancy 100% Total Other Income $27,089 $27,902 $28,739 $29,601 $30,489 $31,404 Sprint Rent $1,120 EFFECTIVE GROSS INCOME $510,072 $521,960 $537,619 $553,747 $570,360 $587,470 Projected Occupancy 90.00% EGI Per Unit $18,892 $19,332 $19,912 $20,509 $21,124 $21,758 Summer Rent $350.00 EGI Per Bed $3,446 $3,527 $3,633 $3,742 $3,854 $3,969 Projected Occupancy 30.00% EXPENSES Controllable Leasing and Advertising $8,000 $8,160 $8,323 $8,490 $8,659 $8,833 General & Administrative $4,000 $4,080 $4,162 $4,245 $4,330 $4,416 Payroll $15,000 $15,300 $15,606 $15,918 $16,236 $16,561 Repairs $ 450 $12,150 $12,393 $12,641 $12,894 $13,152 $13,415 Maintenance and Grounds $11,500 $11,730 $11,965 $12,204 $12,448 $12,697 Management Fee 4.5% $22,953 $23,412 $23,881 $24,358 $24,845 $25,342 Reserves $ 250 $6,750 $6,885 $7,023 $7,163 $7,306 $7,453 Non-Controllable Property Tax $61,843 $63,080 $64,341 $65,628 $66,941 $68,280 Property Insurance $ 225 $6,075 $6,197 $6,320 $6,447 $6,576 $6,707 Gross Utility Expense $79,000 $80,580 $82,192 $83,835 $85,512 $87,222 TOTAL EXPENSES ($227,271) ($231,817) ($236,453) ($241,182) ($246,006) ($250,926) EXPENSES AS % OF EGI 44.56% 44.41% 43.98% 43.55% 43.13% 42.71% Expenses Per Unit ($8,417) ($8,586) ($8,758) ($8,933) ($9,111) ($9,294) Expenses Per Bed ($1,536) ($1,566) ($1,598) ($1,630) ($1,662) ($1,695) NET OPERATING INCOME $282,801 $290,143 $301,166 $312,565 $324,354 $336,544 345 WEST 5TH SOUTH, REXBURG, ID 8

Price $4,715,000 # of units 27 Price Per Unit $174,630 # of beds 148 Price Per Bed $31,858 Cap Rate - Year 1 6.00% Year Built 2012 Cash-on-Cash - Year 1 5.39% NEW LOAN New Loan Terms DEBT SERVICE Loan Amount $3,300,500 Principal $50,929 $53,402 $55,994 $58,713 $61,563 $64,552 Down Payment $1,414,500 Interest $155,674 $153,202 $150,609 $147,891 $145,041 $142,052 LTV 70% TOTAL DEBT SERVICE ($206,604) ($206,604) ($206,604) ($206,604) ($206,604) ($206,604) Interest Rate 4.75% Amortization 30 NET AVAILABLE CASH FLOW $76,197 $83,539 $94,562 $105,961 $117,750 $129,941 Years of I/O 0 Cash-on-Cash Return 5.39% 5.91% 6.69% 7.49% 8.32% 9.19% EXISTING LOAN Existing Loan Terms DEBT SERVICE Loan Amount $2,880,000 Principal $63,348 $66,291 $69,371 $72,594 $75,967 $79,497 Down Payment $1,835,000 Interest $129,730 $126,787 $123,707 $120,484 $117,111 $113,581 LTV 61% TOTAL DEBT SERVICE ($193,078) ($193,078) ($193,078) ($193,078) ($193,078) ($193,078) Interest Rate 4.55% Amortization 25 NET AVAILABLE CASH FLOW $89,723 $97,065 $108,088 $119,487 $131,276 $143,467 Assumption Fee 1% Cash-on-Cash Return 4.89% 5.29% 5.89% 6.51% 7.15% 7.82% 345 WEST 5TH SOUTH, REXBURG, ID 9

SECTION 3 PROPERTY DETAILS

PROPERTY DETAILS PROPERTY NAME: PROPERTY ADDRESS: APN: LOT SIZE: Bountiful Place Apartments 345 West 5th South Rexburg, ID 83440 RPR000K0050070, RPR000K0050190, RPR000K0050181 1.353 Acres RENTABLE SQ. FT.: Approx. 27,296 BUILDING CLASS: FOUNDATION: A Concrete Slab STRUCTURE: 2" x 6" wood construction FLOORING: Vinyl Wood Plank and Carpet CEILINGS: 9' Ceiling Height NUMBER OF STORIES: 3 stories, 2nd and 3rd stories feature 1' gypcrete EXTERIOR: EFIS / Stucco ROOF: Asphalt Shingle COOLING: Air-conditioning for each unit HEATING: Horizontal furnace in each unit WATER HEATER: 65-75 gallon quick-recovery water heaters in each unit 345 WEST 5TH SOUTH, REXBURG, ID 11

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SECTION 4 LOCATION INFORMATION

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BYU - IDAHO OVERVIEW FOUNDED: November 12, 1888 LOCATION: - Rexburg, Idaho - Yellowstone National Park, Grand Teton National Park, and Jackson Hole all within close driving distance POPULATION: Local population of 28,000 in the agriculturally rich Snake River Valley of easter Idaho ENROLLMENT: - More than 32,000 on-campus students and 33,000 online students enrolled in BYU-Idaho courses in 2016 - Approximately 18,000 students, and growing, on campus each semester - Largest private university in Idaho STUDENT BODY: All 50 states and nearly 100 countries represented CAMPUS: Over 40 major buildings on 400 acres ACADEMIC OFFERINGS: - 25 associate degrees and more than 100 bachelor's degrees - 7 colleges and 33 departments - 6 online associate degrees - 11 online bachelor's degrees - Over 300 online courses ACADEMIC CALENDAR: -Three, 14-week semesters: Fall, Winter, and Spring, and one, 7-week Summer Session - Each student is admitted to a track comprised of two 345 WEST 5TH SOUTH, REXBURG, ID 16

BYU-IDAHO OVERVIEW LOCATION DESCRIPTION Bountiful Place is located in Rexburg, Idaho located in the SouthEastern part of Idaho. The city s population is currently about 28,000 and has experienced a 6.0% increase since 2000. The city is home to Brigham Young University-Idaho, a private institution operated by The Church of Jesus Christ of Latter Day Saints. BYU-Idaho currently has an enrollment of approximately 18,000 students every semester with a focus on undergraduate education. The university is the largest private university in Idaho and provides over 25 associate degrees and more than 100 bachelor s degree programs using a three-semester track system. there are three, 14-week semesters: Fall, Winter, and Spring. Each student accepted is admitted to a track comprised of two semesters. Location is the #1 determinant for long-term success in student housing. Rather than measuring distances in miles, well-located student housing is measured in terms of feet from campus. Bountiful Place is located only two short blocks from BYU-Idaho. It also experiences high-demand as men's housing due to its location surrounded by prominent women's only housing. 345 WEST 5TH SOUTH, REXBURG, ID 17

BYU-IDAHO OVERVIEW BYU-IDAHO 3-TRACK SEMESTER SYSTEM BYU-Idaho operates year-round with three distinct 14-week semesters: Fall, Winter, and Spring. Each student is admitted to a track consisting of two semesters: Fall/Winter, Winter/Spring, or Spring/Fall. Students can enroll in classes only for the two semesters of their assigned track and remain on the same track for the duration of their time at BYU-Idaho. The Three Track System allows BYU-Idaho to admit thousands of additional students each year. The campus currently serves about 18,000 students in a semester and over 29,000 students over the course of a calendar year. Each student has the opportunity to complete a baccalaureate degree in four years by attending two semesters per year. The Three Track System at BYU-Idaho also benefits owners of student housing because, unlike many universities, it allows BYU-Idaho to operate almost year-round. Faculty and staff at the university serve student needs throughout the year, providing an equivalent experience on all tracks. In May 2016, the school s Board of Trustees officially approved an increase in its full-time enrollment cap from 18,000 to 20,000 students. which translates to a new headcount of approximately 23,400 students. It is anticipated that the school reaches the new headcount cap by Fall of 2021. 345 WEST 5TH SOUTH, REXBURG, ID 18

BYU-IDAHO OVERVIEW BOUNTIFUL PLACE Bountiful Place is approved as BYU-Idaho student housing. Owners and managers contract with the university to uphold BYU-Idaho standards and partner in providing students with a semester-long contract. Students at BYU-Idaho are required to follow an honor code, which prohibits students from smoking or drinking alcohol in the units and are to obey a curfew which is enforced by the onsite manager. A BYU-Idaho education is generally less expensive than similar private universities, due largely to significant funding from The Church of Jesus Christ of Latter Day Saints. US-20 Freeway access is approximately 1.5 miles away and provides access to nearby cities, such as Idaho Falls (25 miles) and Pocatello (74 miles) and Salt Lake City (260 miles). 345 WEST 5TH SOUTH, REXBURG, ID 19

BYU-Idaho cap increase creates need for additional beds Letter to BYU-Idaho Approved Housing owners from Troy Dougherty, Director May 20, 2016 Dear Owners, It is with great enthusiasm that I inform you that BYU-Idaho s Board of Trustees has officially approved an increase in the enrollment cap from 18,000 to 20,000 FTE (full-time equivalent), which translates to a new headcount of approximately 23,500 students. The previous FTE enrollment cap of 18,000 translated to a headcount of 21,000 students. FTE is determined by dividing the total credits generated in a given semester by 15. FTE is useful for institutional budgeting purposes, but in our world it s the headcount that matters. We do not yet know exactly when we plan to reach 23,500 students, but it is fair to say that it will most likely happen over the next 4-6 years. We will begin work on a new projections model immediately and keep you apprised. Now, the enthusiasm in making this announcement is tempered by the anxiety of recognizing the implications of this type of growth on approved housing. In order to maintain the approved housing program, we will need a significant number of new beds. Allow me to illustrate this need below in the following table: BYU-Idaho is calling on current owners to consider redeveloping if at all possible, reaching out to investors/developers to consider developing in Rexburg, and contemplating whether or not the university will need to respond by adding more beds. As always, we consider it a tremendous privilege to associate with you and are ever grateful for the housing and meaningful experiences you provide for the thousands of single students at BYU-Idaho. We hope this announcement finds you well and prompts you (depending on your unique circumstances) to consider ways to assist in meeting the new demand. Sincerely, Troy 345 WEST 5TH SOUTH, REXBURG, ID 20

BYU-IDAHO PROJECTED HOUSING SHORTAGE 345 WEST 5TH SOUTH, REXBURG, ID 21

DEMOGRAPHICS MAP 1 Mile 3 Miles 5 Miles Total Population 13,767 26,845 29,292 Population Density 4,382 949 373 Median Age 21.9 22.5 22.9 Median Age (Male) 23.3 23.5 23.6 Median Age (Female) 21.0 21.7 22.3 Total Households 3,345 7,324 8,066 # of Persons Per HH 4.1 3.7 3.6 Average HH Income $37,718 $38,928 $41,072 Average House Value $200,471 $192,354 $190,222 *Information provided from 2010 Census 345 WEST 5TH SOUTH, REXBURG, ID 22

SECTION 5 PROPERTY PHOTOS

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SECTION 6 FLOOR PLANS

MAIN FLOOR PLAN 345 WEST 5TH SOUTH, REXBURG, ID 28

SECOND AND THIRD FLOOR PLAN 345 WEST 5TH SOUTH, REXBURG, ID 29

UNIT A PLAN 345 WEST 5TH SOUTH, REXBURG, ID 30

UNIT B PLAN 345 WEST 5TH SOUTH, REXBURG, ID 31

UNIT C PLAN 345 WEST 5TH SOUTH, REXBURG, ID 32

UNIT D PLAN (MANAGEMENT OFFICE) & LOUNGE 345 WEST 5TH SOUTH, REXBURG, ID 33

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SECTION 7 SALES COMPARABLES

SALES COMPARABLES Property Address Units Mountain Lofts Student Beds Year Built Sales Price Price/Bed CAP Rate 538 2nd West Rexburg, ID 83440 161 1,072 2014 $53,000,000 $49,440 5.0% Tuscany Place 440 South 2nd West Rexburg, ID 83440 48 288 2001 $10,500,000 $36,458 6.2% Greenbrier Portfolio Various 99 550 Various (1920s- 1999) $14,800,000 $26,909 5.24% The Pines 140 West 2nd South Rexburg, ID 83440 75 344 1999 $8,143,383 $23,672 6.0% 345 WEST 5TH SOUTH, REXBURG, ID 36

BOUNTIFUL PLACE APARTMENTS Steve Bogden Principal Broker 801.441.5922 steven.bogden@cbcadvisors.com DOWNTOWN SLC 111 S. MAIN ST. SUITE 2200 SALT LAKE CITY, UT 84111 801.947.8300 www.cbcadvisors.com