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OFFERING MEMORANDUM

818 North 39th Avenue Phoenix, AZ

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and

should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified

information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due

diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the

future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or

asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any

tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be

reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these

matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to

verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or

name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product,

service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

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Phoenix, AZ

ACT ID ZAA0080257

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TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Local Map

Parcel Map

FINANCIAL ANALYSIS 02

Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET OVERVIEW 03

Market Analysis

Demographic Analysis

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INVESTMENT

OVERVIEW

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EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Freeport-Mcmoran Miami Inc 9,477

Arizona Department Trnsp 4,700

Communication and Cmnty Partnr 4,500

Police Department 4,140

City of Phoenix 3,575

Canyon Hospitality LLC 3,518

Parks and Recreation Dept 3,199

Viads Mktg & Events Group 3,054

Cyprus Climax Metals Company 2,930

Human Services Department 2,900

County of Maricopa 2,897

Integrity Stffing Slutions Inc 2,725

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 20,661 130,009 382,893

2010 Census Pop 18,832 118,788 348,369

2018 Estimate HH 5,290 31,578 109,790

2010 Census HH 4,909 29,636 101,146

Median HH Income $24,540 $30,637 $35,052

Per Capita Income $9,318 $11,201 $14,409

Average HH Income $35,734 $41,960 $48,110

UNIT MIX

NUMBEROF UNITS

UNIT TYPEAPPROX.SQUARE FEET

3 1 Bed/ 1 Bath 564

4 2 Bed/1/Bath 832

4 3Bed/ 2 bath 1,116

11 Total 9,482

VITAL DATA

Price $1,500,000 CURRENT YEAR 1

Down Payment 35% / $525,000 CAP Rate 6.65% 6.94%

Loan Amount $975,000 GRM 12.45 10.82

Loan Type Proposed NewNet Operating Income

$99,713 $104,119

Interest Rate / Amortization 3.75% / 30 YearsNet Cash Flow After Debt Service

8.67% / $45,528 9.51% / $49,934

Price/Unit $136,364 Total Return 12.09% / $63,456 13.06% / $68,546

Price/SF $158.19

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OFFERING SUMMARY

▪ Renovated in 2017

▪ Excellent mix of one, two and three bedroom units with individual yards.

▪ Sub-metered Water utility paid by tenants.

▪ Pull-In Carports ( selected units)

▪ New Roofs and HVAC units.

▪ New Electric, Plumbing,

INVESTMENT HIGHLIGHTS

Marcus & Millichap is pleased to announce the opportunity to acquire 818 N. 39th Avenue --- a recently renovated 11-unit multifamily community located in Phoenix,

Arizona.

Situated less than a quarter mile south of Interstate-10 (Papago Fwy.), two and a half miles west of Interstate-17 (Black Canyon Fwy.), as well as two and a half miles from

the proposed Loop-202 (South Mountain Fwy. opening in 2021), the subject property offers ease of access into all parts of the Valley including Sky Harbor International

Airport, Arizona State University, Downtown Phoenix and the southeast Valley.

Built in 1951 and fully renovated in 2017, 818 N. 39th Avenue is comprised of recently remodeled one bedroom, two bedroom, and three bedroom apartment homes. Unit

upgrades include all new drywall, electric panels, plumbing, roofs, HVACs, water heaters, granite countertops, new cabinets, appliances, sinks, faucets, tile showers,

toilets, dual panel windows, entry doors, and lighting fixtures. In addition to the interior upgrades, the owner has also invested in exterior improvements which include

block fencing around the perimeter of the property creating individual yard and storage space as well as low maintenance landscaping; what was previously an asphalt

driveway has been replaced with attractive modern pavers throughout the project.

818 N. 39th Avenue is located south of Roosevelt Street and west of 35th Avenue in close proximity to popular destinations such as the Maryvale Baseball Stadium (the

newly renovated spring training home of the Milwaukee Brewers), Christown Spectrum Mall, Ak-Chin Pavilion, and the entertainment and nightlight of Downtown Phoenix.

The dynamically expanding Grand Canyon University is four miles north of the subject property, offering employment and educational opportunities for residents.

Within a short distance is the I-10 and I-17 business corridors with over 14 million square feet of industrial space; for tenant convenience, the Alta E. Butler Elementary

School, Morris K. Udall Middle School and Carl Hayden High School, are all walking distance to their respective campuses.

INVESTMENT OVERVIEW

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OFFERING SUMMARY

PROPERTY OVERVIEW

Completely renovated 11-unit multifamily community located in Phoenix, Arizona.

Built in 1951 and fully renovated in 2017, 818 N. 39th Avenue is comprised of recently remodeled one bedroom,

two bedroom, and three bedroom apartment homes. Unit

upgrades include all new drywall, electric panels, plumbing, roofs, HVACs, water heaters, granite countertops,

new cabinets, appliances, sinks, faucets, tile showers, toilets, dual

pane windows, entry doors, and lighting fixtures. In addition to the interior upgrades, the owner has also invested

in exterior improvements which include block fencing around

the perimeter of the property creating individual yard and storage space as well as low maintenance landscaping;

what was previously an asphalt driveway has been replaced with

attractive modern pavers throughout the project.

818 N. 39th Avenue is located south of Roosevelt Street and west of 35th Avenue in close proximity to popular

destinations such as the Maryvale Baseball Stadium (the newly

renovated spring training home of the Milwaukee Brewers), Christown Spectrum Mall, Ak-Chin Pavilion, and the

entertainment and nightlight of Downtown Phoenix. The

dynamically expanding Grand Canyon University is four miles north of the subject property, offering employment

and educational opportunities for residents. Within a short

distance is the I-10 and I-17 business corridors with over 14 million square feet of industrial space; for tenant

convenience

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▪ Updated modern paver Driveways

Common Area Amenities

▪ Block Fencing Around Property

▪ New Electric, plumbing

▪ Sub-Metered Water Utility Service

▪ Upgrated Bathrooms and kitchens

Unit Amenities

▪ New windows ( selected units)

▪ New HVAC units

▪ New Granite Countertops ( selected units)

▪ New kitchen Cabinets,

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PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Amount $975,000

Loan Type Proposed New

Interest Rate 3.75%

Amortization 30 Years

Loan Term 30 Years

Loan to Value 65%

Debt Coverage Ratio 1.84

THE OFFERING

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Price $1,500,000

Property Address 818 North 39th Avenue, Phoenix, AZ

SITE DESCRIPTION

Number of Units 11

Year Built/Renovated 2017

Rentable Square Feet 9,482

Lot Size 1.11 acre(s)

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REGIONAL MAP

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Marcus & Millichap closes

more transactions than any

other brokerage firm.

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PROPERTY PHOTO

PARCEL MAP

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FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

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RENT ROLL SUMMARY

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FINANCIAL ANALYSIS

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RENT ROLL DETAIL

FINANCIAL ANALYSIS

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OPERATING STATEMENT

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FINANCIAL ANALYSIS

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NOTES

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FINANCIAL ANALYSIS

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PRICING DETAIL

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MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to

providing superior capital market expertise, precisely managed execution, and

unparalleled access to capital sources providing the most competitive rates and

terms.

We leverage our prominent capital market relationships with commercial banks,

life insurance companies, CMBS, private and public debt/equity funds, Fannie

Mae, Freddie Mac and HUD to provide our clients with the greatest range of

financing options.

Our dedicated, knowledgeable experts understand the challenges of financing

and work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage

offices

$6.24 billion

total national

volume in 2018

Access to

more capital

sources than

any other firm

in the industry

Optimum financing solutions

to enhance value

Our ability to enhance

buyer pool by expanding

finance options

Our ability to enhance

seller control

• Through buyer

qualification support

• Our ability to manage buyers

finance expectations

• Ability to monitor and

manage buyer/lender

progress, insuring timely,

predictable closings

• By relying on a world class

set of debt/equity sources

and presenting a tightly

underwritten credit file

WHY MMCC?

Closed 1,678

debt and equity

financings

in 2018

ACQUISITION FINANCING

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MARKET

OVERVIEW

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PHOENIX METRO AREA

Migration to Phoenix Highest in the Nation,

Driving Continued Housing Demand

Positive business and lifestyle climates draw new residents and companies to the Valley. Phoenix

stands out this year with one of the nation’s fastest-growing economies as firms are drawn to the

favorable business environment, lower expenses and an increasingly educated workforce. Many

businesses are moving operations out of high-cost markets and into the Valley, tapping into the deep

roots that finance, insurance and software firms have grown. This will propel Phoenix to the top spot

in net migration in 2020, adding more than 77,000 new residents, many of which being young

professionals. The Valley is a prime example of activity picking up in secondary markets at this point

in the cycle as the single-family sector has been unable to meet the needs of an expanding metro.

Reflective of this is the exceptionally limited availability of traditional workforce housing as the Class

B and C vacancy rates sit in the mid-3 percent and high-2 percent ranges, respectively. This will

restrain absorption this year, resulting in the majority of new leases stemming from luxury

apartments.

Rush of capital flowing into the market to capture remaining upside. Phoenix has been characterized

by strong capital migration into the apartment sector this cycle as favorable yields and healthy job

gains swell investor appetites. The Valley led the nation last year in rent growth, creating robust cash

flows for owners, which holds buyer interest elevated in 2020. Caps on rent growth in nearby states

encourage private investors to consider acquisitions in Phoenix as the sector here faces minimal

legislative threats. The East Valley will remain a target among private and institutional groups for its

concentration of finance and insurance companies, often recording an initial yield in the upper-5

percent to mid-6 percent band. Many areas of the market remain the focus of value-add and

opportunistic buyers, especially submarkets that have recorded minimal supply growth this cycle,

including the West Valley, Mesa and South Phoenix.

* Estimate; ** Forecast

Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.

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PHOENIX METRO AREA

2019 Market Forecast

Following a 2.5 percent employment expansion in 2019, Phoenix remains

one of the nation’s top job creators with employers adding 40,000 workers

to company payrolls this year.

An impressive wave of apartments are scheduled for delivery this year,

eclipsing last year’s total by almost 1,200 units and accounting for the

greatest supply increase in at least 20 years.

Moderated leasing activity due to limited Class B/C apartment availability

will support a vacancy bump to 4.3 percent.

Rent growth remains strong this year, bringing the average effective rent up

to $1,280 per month after a 9.7 percent advance was registered last year.

Assets near major employment nodes including Glendale and Tempe Town

Lake will continue to receive strong investor interest this year as workers

seek short commutes in these areas.

* Estimate; ** Forecast

Sources: CoStar Group, Inc.; RealPage, Inc.; Real Capital Analytics

Employment

up 1.8%

Construction

9,000 units

Vacancy

up 40 bps

Rent

up 8.6%

Investment

PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS

Source: © 2019 Experian

Created on February 2020

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2023 Projection

Total Population 20,275 127,084 388,907

▪ 2018 Estimate

Total Population 20,661 130,009 382,893

▪ 2010 Census

Total Population 18,832 118,788 348,369

▪ 2000 Census

Total Population 19,255 127,788 337,176

▪ Daytime Population

2018 Estimate 12,982 138,896 495,541

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2023 Projection

Total Households 5,387 31,809 114,810

▪ 2018 Estimate

Total Households 5,290 31,578 109,790

Average (Mean) Household Size 3.78 3.72 3.26

▪ 2010 Census

Total Households 4,909 29,636 101,146

▪ 2000 Census

Total Households 4,880 32,617 100,111

Growth 2015-2020 1.83% 0.73% 4.57%

HOUSING UNITS 1 Miles 3 Miles 5 Miles

▪ Occupied Units

2023 Projection 5,387 31,809 114,810

2018 Estimate 5,818 35,504 124,264

Owner Occupied 2,004 13,522 45,111

Renter Occupied 3,286 18,056 64,679

Vacant 528 3,926 14,473

▪ Persons In Units

2018 Estimate Total Occupied Units 5,290 31,578 109,790

1 Person Units 17.98% 18.66% 24.98%

2 Person Units 15.63% 17.53% 21.22%

3 Person Units 14.44% 13.99% 13.63%

4 Person Units 16.52% 15.60% 14.07%

5 Person Units 15.33% 13.75% 11.23%

6+ Person Units 20.11% 20.46% 14.87%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2018 Estimate

$200,000 or More 0.48% 0.80% 1.24%

$150,000 - $199,000 0.57% 0.70% 1.51%

$100,000 - $149,000 4.39% 5.03% 6.59%

$75,000 - $99,999 4.66% 6.80% 8.31%

$50,000 - $74,999 12.85% 15.35% 16.36%

$35,000 - $49,999 14.17% 15.80% 16.06%

$25,000 - $34,999 12.05% 13.92% 13.36%

$15,000 - $24,999 19.10% 17.48% 15.54%

Under $15,000 31.72% 24.11% 21.04%

Average Household Income $35,734 $41,960 $48,110

Median Household Income $24,540 $30,637 $35,052

Per Capita Income $9,318 $11,201 $14,409

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2018 Estimate Total Population 20,661 130,009 382,893

Under 20 40.53% 36.14% 34.59%

20 to 34 Years 24.36% 26.77% 25.82%

35 to 39 Years 7.29% 7.08% 7.39%

40 to 49 Years 11.31% 11.84% 12.32%

50 to 64 Years 10.83% 11.79% 12.86%

Age 65+ 5.68% 6.40% 7.03%

Median Age 25.90 27.12 28.66

▪ Population 25+ by Education Level

2018 Estimate Population Age 25+ 10,650 70,032 216,578

Elementary (0-8) 27.25% 22.52% 16.50%

Some High School (9-11) 16.39% 17.67% 15.90%

High School Graduate (12) 34.20% 30.43% 28.89%

Some College (13-15) 9.49% 14.58% 18.28%

Associate Degree Only 1.79% 3.30% 5.07%

Bachelors Degree Only 3.13% 4.00% 7.30%

Graduate Degree 0.91% 1.70% 4.11%

▪ Population by Gender

2018 Estimate Total Population 20,661 130,009 382,893

Male Population 50.76% 53.13% 51.85%

Female Population 49.24% 46.87% 48.15%

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Income

In 2019, the median household income for your selected geography is

$24,540, compare this to the US average which is currently $58,754.

The median household income for your area has changed by -8.84%

since 2000. It is estimated that the median household income in your

area will be $27,098 five years from now, which represents a change

of 10.42% from the current year.

The current year per capita income in your area is $9,318, compare

this to the US average, which is $32,356. The current year average

household income in your area is $35,734, compare this to the US

average which is $84,609.

Population

In 2019, the population in your selected geography is 20,661. The

population has changed by 7.30% since 2000. It is estimated that the

population in your area will be 20,275.00 five years from now, which

represents a change of -1.87% from the current year. The current

population is 50.76% male and 49.24% female. The median age of

the population in your area is 25.90, compare this to the US average

which is 37.95. The population density in your area is 6,576.52 people

per square mile.

Households

There are currently 5,290 households in your selected geography. The

number of households has changed by 8.40% since 2000. It is

estimated that the number of households in your area will be 5,387

five years from now, which represents a change of 1.83% from the

current year. The average household size in your area is 3.78 persons.

Employment

In 2019, there are 5,579 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

25.17% of employees are employed in white-collar occupations in

this geography, and 73.18% are employed in blue-collar occupations.

In 2019, unemployment in this area is 5.51%. In 2000, the average

time traveled to work was 32.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

43.10% White, 3.83% Black, 0.12% Native American and 0.50%

Asian/Pacific Islander. Compare these to US averages which are:

70.20% White, 12.89% Black, 0.19% Native American and 5.59%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 89.42% of the current year

population in your selected area. Compare this to the US average of

18.01%.

PROPERTY NAME

MARKETING TEAM

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Housing

The median housing value in your area was $60,855 in 2019, compare

this to the US average of $201,842. In 2000, there were 2,708 owner

occupied housing units in your area and there were 2,173 renter

occupied housing units in your area. The median rent at the time was

$448.

Source: © 2019 Experian

DEMOGRAPHICS

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DEMOGRAPHICS

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