Lehigh University Student Housing

Lehigh University Student Housing

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Executive Summary PROPERTY SUMMARY Sale Price: $3,390,000 Properties: 11 Beds: 54 NOI: $216,461 Market: Lehigh Student Housing Lehigh Valley PA MSA Property Overview Rare opportunity to purchase a turn key, Lehigh University Student Housing Portfolio. Portfolio consists of 17 units, all located in the most desirable and safest neighborhood near campus. Each property is less than a one minute walk to campus, with stunning views of Bethlehem. In addition, there are 2 desirable building lots included in the package for additional revenue opportunities. This is not a typical student housing portfolio with abused properties and years of deferred maintenance. Each property is clean, modern and very well maintained, with updated kitchens, bathrooms, heating systems, flooring, windows, etc. Approximately half of the units are rented to graduate students each year. The portfolio also attracts medical students from St. Luke s and students from DeSales and Moravian. There is significant upside in increasing average per bed rent by $75-$100 per month. Current rents are below comparable student housing in lesser neighborhoods. Current owner has kept rents under market value in order to maintain 100% occupancy with carefully selected tenants.

Property Photos Apartments 514 1st Terrace Units: 2 Apartment Features: 1,045 sq ft 2 Bedroom/2 Bath Modern Kitchens with Dishwashers Modern Bathrooms Air Conditioning Washer and Dryer in Each Unit Private Off-Street Parking Both Units Renovated in 2015 New Roof in 2016 New Insulated Windows

Property Photos Apartments 432 Stoneman Units: 6 Apartment Features: 885 sq ft 2 Bedroom/1 Bath Modern Kitchens with Dishwasher Modern Bathrooms Air Conditioning Washer and Dryer Facility Decks Overlooking Woods Private Off-Street Parking New Roof in 2015 All Units Renovated Within the Past Few Years

Property Photos Houses 402 1st Terrace Bedrooms: 4 Bathrooms: 2 422 1st Terrace Bedrooms: 4 Bathrooms: 2 424 1st Terrace Bedrooms: 4 Bathrooms: 2 Size: 1824 sqft Size: 1713 sqft Size: 1713 sqft Additional Features: Washer and Dryer Dish Washer Hardwood Floors and W/W Carpeting Gas Heat New Central Air Rear Trex Deck Large Detached Storage Building Additional Features: Washer and Dryer Dish Washer Hardwood Floors and W/W Carpeting Gas Heat Air Conditioning Off Street Parking Additional Features: Washer and Dryer Dish Washer W/W Carpeting Gas Heat Air Conditioning Off Street Parking

Property Photos Houses 496 1st Terrace Bedrooms: 5 Bathrooms: 2 508 1st Terrace Bedrooms: 3 Bathrooms: 1.5 405 Stoneman Bedrooms: 5 Bathrooms: 2 Size: 2052 sqft Size: 1570 sqft Size: 1933 sqft Additional Features: Hardwood Floors and W/W Carpeting New Washer and Dryer New Central Air Rec Room in Fully Finished Lower Level Off Street Parking Attached 1-car Garage New Insulated Windows Additional Features: Hardwood Floors and W/W Carpeting Detached 1-car Garage Washer and Dryer Air Conditioning Off Street Parking Covered Front Porch with Beautiful View of Campus & Covered Rear Deck New Insulated Windows Additional Features: Fully Furnished Brand New Granite and Stainless Kitchen Hardwood FloorsThroughout New Washer and Dryer New Gas Furnace & Gas Hot Water Air Conditioning Off Street Parking Covered Front Porch Walk-out Basement Large Back Yard Both Bathrooms Newly Remodeled

Property Photos Houses 407 Stoneman Bedrooms: 5 Bathrooms: 2 426 Stoneman Bedrooms: 5 Bathrooms: 2 416 Selfridge Bedrooms: 3 Bathrooms: 1 Size: 1933 sqft Size: 1840 sqft Size: 1425 sqft Additional Features: Fully Furnished Hardwood FloorsThroughout New Washer and Dryer New Gas Furnace & Gas Hot Water Air Conditioning Off Street Parking Covered Front Porch Walk-out Basement Large Back Yard Two Refrigerators Additional Features: Off Street Parking New Central Air Wall to Wall Carpeting Washer and Dryer New Gas Furnace and Gas Hot Water Heater New Insulated Windows Large Rear Deck Overlooking Large Private Back Yard Additional Features: New Wall to Wall Carpeting Washer and Dryer Gas Furnace and Gas Hot Water Heater Air Conditioning Newly Remodeled Bathroom Off Street Parking for 3 Cars New Insulated Windows

Properties Map

Financial Analysis Pro Forma Revenues: Total Gross Rents 326,280 Current Gross Rents Economic Loss Less: Vacancy 16,314 No Actual Vacancy Less: Bad Debt 1,631 Concessions Bad Debt Total Economic Loss 17,945 Other Income - Security Deposits 7,350 Effective Gross Income: 315,685 Pro Forma Assumptions Expenses: Cleaning & Maintenance - Advertising 1,200 Administrative 1,350 $25 per bed Insurance 8,903 Legal & Professional Fees 1,500 Payroll 10,800 Management Fees 16,314 Association Fees Repairs and Maintenance 19,950 $350 per bed Taxes 33,691 Utilities Water & Sewer 2,912 Electric 1,272 Trash Removal 1,332 Other Expenses Total Expenses $ 99,224 Valuation Analysis Pro Forma Cap Rate Price $ / Bed 6.00% $3,607,677 $66,809 6.25% $3,463,370 $64,136 6.50% $3,330,163 $61,670 6.75% $3,206,824 $59,386 Cash On Cash Return (Based on Proposed 75% Financing) Pro Forma Cap Rate Price Return % 6.00% $3,607,677 12.00% 6.25% $3,463,370 13.00% 6.50% $3,330,163 14.00% 6.75% $3,206,824 15.00% Net Operating Income $ 216,461 Reserves 14,250 $250 per bed Net Operating Cash Flow $ 202,211

Property Rent Roll Lease Term Expiration (% of Beds) Property Rent Roll 2017 2018 2019 2020 Houses Beds Baths Lease Term SF Monthly Rent Annual Rent Lease Term 0% 18% 17% 65% 402 1st Terrace 4 2 5/31/2018 1824 $ 2,150 $ 25,800 5/31/2018 422 1st Terrace 4 2 5/31/2018 1713 $ 2,050 $ 24,600 5/31/2018 424 1st Terrace 4 2 5/31/2017 1713 $ 2,050 $ 24,600 5/31/2017 496 1st Terrace 5 2 5/31/2020 2052 $ 2,350 $ 28,200 5/31/2020 508 1st Terrace 3 1.5 5/31/2018 1570 $ 1,675 $ 20,100 5/31/2018 405 Stoneman Street 5 2 5/31/2017 1933 $ 1,950 $ 23,400 5/31/2017 407 Stoneman Street 5 2 5/31/2020 1933 $ 2,300 $ 27,600 5/31/2020 426 Stoneman Street 5 2 5/31/2018 1840 $ 2,250 $ 27,000 5/31/2018 416 Selfridge Street 3 1 5/31/2018 1425 $ 1,625 $ 19,500 5/31/2018 $ 18,400 $ 220,800 Apartments - 432 Stoneman Street Unit 1 2 1 5/31/2018 885 $ 1,100 $ 13,200 5/31/2018 Unit 2 2 1 5/31/2018 885 $ 1,050 $ 12,600 5/31/2018 Unit 3 2 1 5/31/2018 885 $ 995 $ 11,940 5/31/2018 Unit 4 2 1 5/31/2018 885 $ 1,100 $ 13,200 5/31/2018 Unit 5 2 1 5/31/2018 885 $ 945 $ 11,340 5/31/2018 Unit 6 2 1 5/31/2018 885 $ 1,100 $ 13,200 5/31/2018 $ 6,290 $ 75,480 Totals Apartments - 514 1st Terrace Unit A 2 2 5/31/2018 1045 $ 1,200 $ 14,400 5/31/2018 Unit B 2 2 5/31/2018 1045 $ 1,300 $ 15,600 5/31/2018 $ 2,500 $ 30,000 Totals Grand Totals 54 26.5 $ 27,190 $ 326,280

Bethlehem, PA POPULATION 75,050 MEDIAN HOUSEHOLD INCOME $46,902 MEDIAN AGE 34.9

Regional Map

Demographics

About Lehigh University Founded: 1865 by Asa Packer, an industrial pioneer, entrepreneur and philanthropist Accreditation: Regionally Accredited, Middle States Association of Colleges and Schools Student Body: 5,080 undergraduates (56% men, 44% women) 1,979 graduate students (55% men, 45% women) 4 Colleges: College of Arts and Sciences, College of Business and Economics, P.C. Rossin College of Engineering and Applied Science and College of Education Lehigh Endowment: $1.2 billion Athletics Program: 25 NCAA Division I intercollegiate sports for men and women, 43 intramural and club sports

Student Housing Forecast Current: # of full time students 7,059 % living off campus 40% # living off campus 2,471 Future: # new full time students added 1,500 to 1,800 Total # of full time students 8,559 Lehigh s % target for off campus students 35% Lehigh s # target for off campus students 2,568 Lehigh s # target for on campus students 5,991 Conclusion: Based on the above projections, Lehigh will have a demand for 97+ additional off campus beds if Lehigh is able to build 1,300-1,400 additional on campus units over the next few years, which would be very optimistic. It is likely that 300-500 additional off campus beds will be needed to meet Lehigh s growth plans.

First Year On Campus Housing

Second Year On Campus Housing

Third, Fourth and Fifth Year Year On Campus Housing

Other Off Campus Housing