Melody Station- Executive Summary

The Nexus of Rhythm and Harmony

Executive Summary -Project Overview

-Location

-Background

-Partners/Consultants

-Investment Highlights

--Market Overview

-Development Overview

Market Analysis -Market Snapshot

-Market Segments

-Market Saturation

-Office

-Multi-family

-Reconciliation

Property Description

-Scope of Project

-Municipality & Zoning

-Long Range Plan

-Area Map

-Campus Office

-Multi-family

-Schematic Floor Plan

-3-5 Short term Site Plan

Site Analysis -Property information

-Utilities

-Zoning

-Access Limitations

-Due Diligence

Conclusion -Project Summary

-Exhibits

I

Melody Station by BMR Development Group

Financial Analysis -Financial Salient Facts

-Project Economics

-Rent Roll

-Multi-Family Cash Flow

“Melody Station,” a mixed-use transit-oriented development, connecting you to your preferred lifestyle. It is located adjacent to American Fork’s new transportation hub - where I-15, Pioneer Crossing, and UTA FrontRunner converge.

Melody Station is oriented around Williamson Park, a 2.5 acre park with an amphitheater. The park will be surrounded by multi-family housing, corporate campus for a single user, and in phase II complementary office, townhomes, and single family homes on the southern portions of the development. Retail will be constructed in Phase III.

Sustainable principles have been maximized to create a walkable master planned mixed-use development. Melody Station uses new urbanism planning strategies that creates long-term sustainability and a sense of place.

Residents will enjoy the direct connection to open space at Williamson Park and amphitheater. While future employees can utilize mass transit and take a break in the park. Melody Station is an urban center for residents and neighbors through open space, arts in the park, and a vibrant mix of commercial and retail services.

Melody Station is strategically located at the junction of I-15, UTA FrontRunner station, 200 South, and the future Vineyard Connector in American Fork, Utah. This location is the junction for American Fork, Saratoga Springs, and Eagle Mountain.

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Site Analysis Executive Summary Market Analysis Property Description Financial Analysis

Frontrunner

Station

I-15

Interchange

The Meadows

Pioneer Crossing

Project Overview Location

3



Phase I comprises of three parcels which total 36.15

acres. The three parcels are owned by three different

parties. The site is currently zoned residential-

agriculture 5. The land is currently under the

jurisdiction of Utah County. However, American Fork

City has shown the parcels in their general land use

plan as Transit-Oriented Development (TOD) which

allows for higher density and greater flexibility of uses.

Melody Station is proposing a multi-family density

between 30-35 units per acre.

The development and timing of future products was

thoroughly analyzed. The goal of future phases is to

enhance the current product and create synergy

between other real estate products (create a sense of

place).

Background

4

Partnerships/Consultants

Mary Street- Cushman & Wakefield

Bret Mackay- DLM Development

Williamson Family

Kent & Jen Paulson- American Fork Residents

Allen Argyle- ICO, Commercial

Brandon Rypien- Urban Planner, Layton City



5

The Multi-family market has grown substantially

over the past 5 years. Financing for this type of

product is favorable with bankers due to low

vacancy rates around 5% and increasing rent rates.

Current average rent rate is at a 10 year high

according to EquiMark- Multi-family Investment

Services, January 2013 report of the Greater Salt

Lake area.

Melody Station is capitalizing on the opportunity to

participate in the market. Melody station is looking

for a LTV of 65%, interest rate 5%, with an

amortization of 25 years, and a loan fee of 1.5%.

Melody Station is looking for an equity investor for

28% of the total development cost. This project

yields a unlevered IRR of 7.9% and levered IRR of

18.7%.



Investment Highlights

6



Market Overview

Utah- Improved economic climate. Values for all product types

increased in 2012. Investment sales at end of 2012 over $800

million. Which is a 27% sales volume increase from 2011.

Utah County- Positive absorption in all sectors. Added 8,000 new

jobs in 2012 equal to a 4.3% increase.

Regional and Location Analysis:

Industrial-Regional market analysis shows that the old Geneva Rock

site is better suited for this type of product.

Office- The office market had the most dramatic change during

2012. Cap rates lowered by 95 basis points. The office market is very

saturated with newly constructed buildings at Thanksgiving Park,

several large complexes under construction (Traverse Ridge Center),

and in the pipeline (Perry Homes Office Park, Thanksgiving

Commercial Center).

Retail- Vacancy dropped to 8.2% from 11.8% in 2011. Outlets at

Traverse Mountain 250,000 SF recently opened November 2012.

The Meadows 739,000 SF is adjacent to the site on the east side of

I-15. The Terrace at Traverse Mountain is 117 acre site in Lehi.

Thanksgiving Point has proposed retail pads as well. The retail

market is saturated in the market area.

Multi-family- Vacancy rate is 3.2% in Utah County (EquiMark).

Rental rates are at 10 year high. American Fork has no multi-family

under construction per BEBR, Utah Construction Report.

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• Multi-Family 288 units, 3 story, Garden Style (light yellow)

• Corporate Campus Office 152,000 SF, Anchor (dark blue)



Development Overview

• Williamson Park &

Amphitheater (Joint

Venture w/ City)

• 2-Class B Office

Buildings (light blue)

• Townhomes & Single

Family Residences

• 2 Restaurant Pads

(light red)

• Additional Offices

(light blue)

• Further Residential

expansion

• 2 Additional

Restaurant Pads

• Additional Office on

west side of

Vineyard Connector

and north side of

200 South

• Sports Complex-

Baseball and soccer

fields

Phase I Phase II Phase III Final Phase

Utah- Population 2,855,287 (2010 Census) and

2030 population projection is 3,772,042. Average

household size 3.1.

The growth of Utah continues to outpace the U.S.

During the same period the U.S. grew by 0.5%

compared to Utah at 2.3%. Job growth is steady at

3.1%. The Utah economy added 37,800 jobs over

the past 12 months (by the end of 2012).

Unemployment rate is 5.1%, and the national

average is 7.8%. A third of the population is

bilingual.

The state of Utah has several competitive

advantages such as low tax rates and a young,

highly educated work-force (median age 29.2,

youngest in the nation).

In 2012 there was positive absorption in all product

types.

Utah County- Population 540,504 (2012 est.) and

2030 population projection of 833,101. Positive

absorption in all sectors. Added 8,000 new jobs in

2012 which was an increase of 4.3%. Household

growth 2010 to 2030 is 2.47%. Highest household

size in Utah 3.24. Employment (2020) 329,383.

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Market Snapshot Primary Market Area

The northern portion of the county has experienced

rapid development with Adobe and Xactware

constructing new corporate campuses.

American Fork- Population 27,147 (2012).

Projected 2030 population 39,635 (2.5% increase

per year). Median household income is $68,725.

Persons per household 3.49%. Homeownership rate

is 78.2% with just 11.7% in multi-unit. Total housing

units 7,598 (2011).

Utah Overview-Total Sales Volume $812,827,367.

Total SF 5,381,566. Total Units 6,531. Total Number

of Transactions 156.

Utah County

Industrial- Through the market analysis process it

was determined that Industrial would not serve the

highest and best use. The old Geneva site located

south of the site is better equipped to support this

type of development. Also, this is not the desire of

the city.

Retail- The retail market is very saturated currently

and there are multiple retail projects just completed

and in the pipeline. Therefore, retail is not being

proposed at this time in the project until there is

support for such product.

The Meadows is adjacent to Melody Station on the

east side of the I-15 and has 739,000 SF of retail.

Outlets at Traverse Mountain in Lehi just recently

opened, and The Terrace at Traverse Mountain will

have117 acres of retail at build out. Lehi Pointe will

have 160,000 SF retail. Also, Thanksgiving Point

has large retail pads for future development.

9



Market Segment Snapshot

Office- There are several large Class A Office

complexes recently completed, under construction,

and in the pipeline. Thanksgiving Park has 700,000

SF, with building 3 of 140,000 SF currently under

construction. Traverse Ridge 138,000 SF under

construction with a total of 400,000 at build out.

Traverse Mountain 1.5M SF in the pipeline. Lehi

Pointe has 385,000 SF. Perrry Homes Office Park

in pipeline 400,000 SF.

Therefore, because of market saturation it is

proposed that a tenant looking for a Corporate

Campus, build to suit would be the highest and

best use for Melody Station’s office component.

Solarwinds is currently looking for a Corporate

Campus, so this could be a potential tenant to

anchor the site. The long range plan is to build

supportive office surrounding the Corporate

Campus.

Multi-family-The vacancy rate for Utah County is

3.2% per Equimark, indicating additional absorption

is possible in the market. Rent growth is 4.6%.

When rent growth occurs and vacancies remain

below 5%, there is market share to be captured.

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Market Saturation Overview

Corporate Campus Office- The office market is

very saturated with newly constructed buildings at

Thanksgiving Park, several large complexes under

construction (Traverse Ridge Center), and in the

pipeline.

For this reason it is proposed that a company

looking for a corporate campus office of 150,000-

250,000 be acquired.

Solarwinds already has space a Thanksgiving

Point, but is currently looking for a corporate

campus. The corporate campus is part of Phase I

because it will be an anchor and incentivize other

companies to come to Melody Station.

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Target Market

Multi-Family- Why multi-family? Vacancy is at

3.2% in Utah County and rents continue to clime and is

at a 10 year high (EquiMark). These are indicators that

more multi-family product could enter the market and be

absorbed. Also, the Utah Construction Report showed

zero multi-family projects under construction in American

Fork as of January 1st, 2013- July 31st, 2013. There is an

opportunity to capture the unmet demand.

Pres. Professor, Arthur Chris Nelson has estimated that

there are enough Single Family Residences for the next

30 years, due to the aging baby boomers looking to

down size. Also, Gen Y wants to be more mobile and

could be lifetime renters according to the Metropolitan

Research Center at the University of Utah. Ivory homes

is constructing the same amount of multi-family units as

single family homes due to demographic desires.

Two product types are proposed for Phase I of

Melody Station. This is due to current market

supply and demand conditions.

Due to the over abundance of office for lease in

northern Utah it is recommended that a company

looking for a corporate campus office of 150,000-

250,000 be acquired.

Solarwinds already has space a Thanksgiving

Point, but is currently looking for a corporate

campus. The corporate campus is part of Phase I

because it will be an anchor and incentivize other

companies to come to Melody Station.

Second product type is multi-family. Vacancy is at

3.2% in Utah County and rents continue to climb

(EquiMark). These are indicators that more multi-

family product could enter the market and be

absorbed. Also, the Utah Construction Report,

showed zero multi-family project under construction

in American Fork as of January 1st, 2013- July 31st,

2013.

These two product types will provide cash flow to

fund further phasing.

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Reconciliation

13

Property Information



14

Utilities

Power: Rocky Mountain Powers

Gas: Questar Gas

Sewer: Timpanogos Special SVC District

Culinary Water: American Fork

Irrigation Water: American Fork River

Storm Water: Utah County Storm Water

Phone: Quest*

Cable: Comcast*

Note: Quest and Comcast will put together a utilities plan to fit the site plan.



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Zoning



Residential Agriculture 5

American

Fork

FrontRunner

Station

Industrial 1

Industrial 1

Transitional Residential 5

Transitional Residential 5 Residential Agriculture 5

Site

Zoned: Residential Agricultural 5 Proposed: Transit-Oriented

Development (TOD) Zone

¼ Mile Radius

TOD Zone

Utah County Zoning Map

(American Fork Land Plan- 2012)

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Access Limitations



Phase I

Phase II

Phase III

2011-2040 Long Range

Transportation Plan (LRP) Utah has a thirty-year plan for state

transportation facilities in urban and rural

areas. In rural areas, UDOT prepares the

Long Range Transportation Plan

(LRP). In urban areas (50,000 or more

inhabitants) the Metropolitan Planning

Organizations (CACHE, WFRC, MAG,

DMPO) prepare the Regional

Transportation Plans (RTPs).

Long Range Plan- Surrounding Site

Vehicle Access: Accessing the site from the north and west side

requires taking Pioneer Crossing, then Mill Pond Road to 200 South.

Access from the site from the east requires taking 300 West to 200

South. From the south, 200 South follows along I-15. Vineyard

Connector (proposed by UDOT) will provide north/south access to the

site (shown as 1020 West on map).

Mass-Transit Access: FrontRunner stops just north of the site.

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Due Diligence

Soil Issues: Chipman silty clay loam. No known soils issues.

Ground Water: Water table 7-10 feet below surface

Sewer: Timpanogos Special SVC District- upsizing needed (sewer

runs along 200 S.)

Culinary Water: American Fork City

Power: Rocky Mountain Power

Natural Gas: Questar

Drainage: Change in grade over site is less than 2%. Possible draining

issues. (4565.37- 4543.54=0.5%)

Liquefaction: High-Utah Geological Survey, Aug. 1994

Flood Plain: Not located in FEMA flood plane zone

Wetlands: No wetlands on site

Environmental: Current and previous use is agricultural

Zoning: Residential-Agriculture 5



Phase I of Melody Station will consist of office, multi-family, and open space.

The Campus-Style Office will be between 150,000-200,000 square feet depending on tenant’s needs. The potential tenant would be a single user such as Solarwinds, who is looking for Campus Office space to employ up to 1000 employees and expand within Utah County. Solarwinds currently has space a Thanksgiving Point.

The Multi-family will consist of 4 buildings, 3 story garden style with a total of 288 apartments. There will be a variety of floor plans from 1 bed/1 bath to 3 bed/2 bath. These apartments will be market rent. Rents will range from $775-$1250.

Arts in the park, both American Fork city and local homeowners recognized the need for a venue for the performing arts. The park will serve a two-fold purpose. One, create open space for residents and employees. Secondly, to house an amphitheater within one quadrant of the park. This component will bring the community into the space and create a sense of place for the community.

Each product type is strategically placed to create synergy and maximize use.

Area Map

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Scope of Project

The property is currently under the jurisdiction of

Utah County. Zoned- Residential-Agriculture 5.

American Fork has proposed on their general land

use map as Transit-Oriented Development.

Recommendations are given in anticipation of a

rezone to Transit-Oriented Development (TOD).

Municipality & Zoning

Area Map

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Long Range- Master Plan

The Master Plan includes

product types that complement

Phase I products. Phase I-

Large Campus Office, Multi-

family, and Open Space (central

park). Phase II- Class B Office,

Amphitheater, Townhomes and

Single Family Residences, and

Restaurants supported by

residents, employees, patrons

going to the park or

amphitheater.

Phase II will have Class B office

that may or may not have an

association with the Campus

Office owner. Townhomes and

Single Family Resident

community will develop in the

South/East quadrant of the

master planned development.

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3-D SketchUp of Site Plan

Office Site Map

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Campus Office

The Campus-Style Office will be between 150,000-

200,000 square feet depending on tenant’s needs.

The potential tenant would be a single user such as

Solarwinds, who is looking for Campus Office space

to employ around 1000 employees and expand

within Utah County.

Solarwinds currently has space at Thanksgiving

Point and is looking to expand operations.

Ancestry.com is another potential tenants with their

lease expiring in 2-3 years and will be most likely

looking for another campus to relocate their

operations facility.

First option would be to create a land lease with the

tenant to create a steady stream of income.

Second option would be to be the developer and

construct the building and sale it to the future tenant.

Example: Campus Office

Multi-family will consist of 4 buildings, 3 story garden style with a total of 288 apartments. The complexes will front the tree lined roads creating an urban feel with parking in the rear to create a more walkable pedestrian friendly environment, a sense of place, and security for the residents. There will be a lounge in each complex and a shared pool. Residents will enjoy the proximity to the park, splash pad, amphitheater, and adjacency to FrontRunner. Future phases will truly create a vibrant transit-oriented development that is desirable and sustainable .

There will be a variety of floor plans available from 1 bed/1 bath to 3 bed/2 bath, which allows for age in place. As the family grows the family can stay within the community long term.

Leases will be competitively priced at market rate ranging from $775-$1250. The multi-family will be a long-term hold for at least 10 years.

Anticipated construction period is 18 months and have a stabilized NOI after 24 months from the time of certification of occupancy.

Multi-family Site Map

22



Multi-family Proposed Sq. Ft and rents Wasatch Front Avg.

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Open floor plans, Stone countertops & backsplashes, Wood & glass cabinetry, Tile or laminate floors, 1.5 parking

stalls/unit, Heated swimming pool, spacious park just feet from the complex, Frontrunner station adjacent to project.



Project Amenities

Floor plans

2 Bed, 2 Bath 3 Bed, 2 Bath

http://www.google.com/url?sa=i&rct=j&q=great+2+bedroom+2+bath+apartment+floor+plans&source=images&cd=&cad=rja&docid=SM2mCR6ljd18vM&tbnid=PjVl822W8QDGUM:&ved=0CAUQjRw&url=http://www.apts-madison.com/p/apartments/floorplans_5517/madison-wi-53711/heather-downs-apartments-5517&ei=vlbyUZLXA4K-9gSc0IDYDg&bvm=bv.49784469,d.eWU&psig=AFQjCNGnoybCWxcr2B12eDb-d0gAGgEP5w&ust=1374922756641169

http://www.google.com/url?sa=i&rct=j&q=great 3 bedroom 2 bath apartment floor plans&source=images&cd=&cad=rja&docid=sRFnP6J01qej_M&tbnid=VXMvFpG1nk50nM:&ved=0CAUQjRw&url=http://www.legacycornelius.com/floorplan/&ei=81fyUYvkOIPq9ATNy4GYCw&bvm=bv.49784469,d.eWU&psig=AFQjCNGlWlyYFUMraUi2gIWSfNeSA49WeQ&ust=1374923116712284

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3-5 yr. Site Plan



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Financial Salient Facts

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Multi-family Pro-forma

27



Multi-family Cash flow

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Conclusion


Project Summary

Market Analysis Summarized Vacancy is at 3.2% in Utah County and rents

continue to climb and are at a 10 year high

(EquiMark). These are indicators that more multi-

family product could enter the market and be

absorbed. Their is an opportunity to capture unmet

demand.

Site Analysis Summarized The site has several great characteristics such as

proximity to the freeway, FrontRunner stop, and

the topography is flat which lowers grading costs.

The visibility from I-15 is a plus for business and

retail.

Product Selection Summarized The Corporate Office – selected due to nearby

office for lease products. This will serve as an

anchor to other future offices proposed.

Multi-family is a growing product type due to

changing views of homeownership. Melody Station

looks to capture this opportunity.

Financial Analysis Summarized The success of the multi-family will depend on the

city’s decision to allow for higher density to make

the numbers pencil. An unlevered IRR of 19% is

attractive to many investors.

Conclusion Melody Station captures the elements desired by

UTA, American Fork, and landowners. Melody

Station will be a vibrant place where residents

within and outside the development can enjoy.

Let the music begin!

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Exhibits

Overview of potential competition for Retail in the region

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Exhibits Soils Report Liquefaction Report

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Exhibits

The Site does not

have any identified

wetlands per the

National Wetlands

Inventory. There is a

Freshwater

Emergent Wetland

about 1000 feet from

the south/east

corner of the site.

The water table is 7-

10 feet below the

surface due to the

proximity to Utah

Lake which prevents

below- grade

improvements

without significant

construction and

mechanical

engineering.

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Sources

• Governor's Office of Planning and Budget, 2012 Baseline Projections

• FEMA

• National Wetlands Inventory

• Utah County

• American Fork City

• UTA

• U.S. Census Bureau

• Commerce Real Estate Solutions

• Layton Construction

• ICO

• Zion’s Bank

• EquiMark Properties

Melody Station- Executive Summary

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