1235 VFW Highway West Roxbury, MA Investment Presentation · 2017. 10. 30. · 1235 vfw highway...

1235 VFW Highway West Roxbury, MA Investment Presentation

CONFIDENTIAL

WWW.LUZERNASSOC.COM

(Revised October 26, 2017)

http://www.luzernassoc.com/

THIS PRESENTATION HAS BEEN PREPARED TO PROVIDE INVESTORS WHO MEET STATUTORY QUALIFICATION AS “ACCREDITED INVESTORS” UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, WITH THE OPPORTUNITY TO DETERMINE THEIR PRELIMINARY INTEREST REGARDING AN INVESTMENT IN LUZERN REALITY FUND III, L.P. (THE “FUND”) AND MAY NOT BE USED OR REPRODUCED FOR ANY OTHER PURPOSE. THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY AND ALL INFORMATION CONTAINED HEREIN IS SUBJECT TO REVISION. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF AN OFFER TO ISSUE OR SELL, OR OF A SOLICITATION OF AN OFFER TO SUBSCRIBE OR BUY, ANY SECURITIES OR OTHER FINANCIAL INSTRUMENTS, NOR DOES IT CONSTITUTE A FINANCIAL PROMOTION, INVESTMENT ADVICE OR AN INDUCEMENT OR INCITEMENT TO PARTICIPATE IN ANY PRODUCT, OFFERING OR INVESTMENT. ANY SUCH OFFER WILL BE MADE ONLY BY MEANS OF THE CONFIDENTIAL PRIVATE OFFERING MEMORANDUM OF THE FUND, THE AGREEMENT OF LIMITED PARTNERSHIP OF THE FUND AND THE SUBSCRIPTION AGREEMENT OF THE FUND (COLLECTIVELY, THE “PRIVATE OFFERING DOCUMENTS”) AND WILL BE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN SUCH DOCUMENTS. THE INFORMATION SET FORTH HEREIN DOES NOT PURPORT TO BE COMPLETE. THE PRIVATE OFFERING DOCUMENTS WILL CONTAIN ADDITIONAL INFORMATION ABOUT THE INVESTMENT OBJECTIVES, TERMS AND CONDITIONS OF AN INVESTMENT IN THE FUND AND ALSO CONTAIN RISK DISCLOSURES THAT ARE IMPORTANT TO ANY INVESTMENT DECISION. THIS PRESENTATION IS QUALIFIED IN ITS ENTIRETY BY THE PRIVATE OFFERING DOCUMENTS WHICH SHOULD BE READ COMPLETELY BEFORE MAKING AN INVESTMENT. AN INVESTMENT IN THE FUND IS SPECULATIVE AND INVOLVES SIGNIFICANT RISKS. INVESTORS WHO HAVE PRELIMINARY INTEREST IN THE FUND SHOULD UNDERSTAND THESE RISKS AND HAVE THE FINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THEM FOR AN EXTENDED PERIOD OF TIME BEFORE MAKING AN INVESTMENT. ASSUMPTIONS AND STATEMENTS REGARDING FORECASTS AND PROJECTIONS RELY ON A NUMBER OF ECONOMIC AND FINANCIAL VARIABLES AND ARE INHERENTLY SPECULATIVE. FORECASTED RETURNS ARE NOT GUARANTEED AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. FORECASTS ARE BASED ON COMPLEX CALCULATIONS AND FORMULAS THAT CONTAIN SUBSTANTIAL SUBJECTIVITY AND NO EXPRESS OR IMPLIED PREDICTION IS MADE HEREBY WITH RESPECT TO THE FUND OR ANY OTHER ACTUAL INVESTMENT. THERE CAN BE NO ASSURANCE THAT THE MARKET CONDITIONS WILL PERFORM ACCORDING TO ANY FORECAST OR THAT THE FUND WILL ACHIEVE ITS OBJECTIVES OR THAT INVESTORS IN THE FUND WILL RECEIVE A RETURN OF THEIR CAPITAL.

Disclosure Strictly Confidential

1235 VFW Parkway | West Roxbury| Boston 1

THE INFORMATION CONTAINED IN THIS PRESENTATION, INCLUDING INFORMATION SUPPORTING FORECASTS AND PROJECTIONS, HAS BEEN OBTAINED OR DERIVED FROM INDEPENDENT THIRD PARTY SOURCES BELIEVED TO BE RELIABLE BUT THE FUND CANNOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND HAS NOT REVIEWED THE ASSUMPTIONS ON WHICH SUCH INFORMATION IS BASED. BY ACCEPTING DELIVERY OF THIS PRESENTATION, YOU UNDERSTAND AND ACKNOWLEDGE THAT NONE OF THE FUND NOR ITS REPRESENTATIVES ARE MAKING ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS PRESENTATION. NO RELIANCE MAY BE PLACED FOR ANY PURPOSE ON THE INFORMATION AND OPINIONS CONTAINED IN THIS DOCUMENT OR THEIR ACCURACY OR COMPLETENESS AND NOTHING CONTAINED HEREIN SHALL BE RELIED UPON AS A PROMISE OR REPRESENTATION WHETHER AS TO PAST OR FUTURE PERFORMANCE. NOTHING CONTAINED HEREIN SHOULD BE CONSTRUED AS LEGAL, BUSINESS OR TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN ATTORNEY, BUSINESS ADVISOR AND TAX ADVISOR AS TO LEGAL, BUSINESS, TAX AND RELATED MATTERS CONCERNING THE INFORMATION CONTAINED HEREIN. NONE OF THE FUND OR OTHER REPRESENTATIVES WILL HAVE ANY LIABILITY TO YOU OR ANY OTHER PERSON RESULTING FROM USE OF THIS PRESENTATION. NONE OF THE FUND OR OTHER REPRESENTATIVES HAS ANY OBLIGATION TO UPDATE THE INFORMATION CONTAINED IN THIS PRESENTATION. ONLY THOSE REPRESENTATIONS OR WARRANTIES THAT ARE MADE TO YOU IN A DEFINITIVE WRITTEN AGREEMENT BETWEEN YOU AND THE FUND WILL HAVE ANY LEGAL EFFECT. CERTAIN INFORMATION CONTAINED IN THIS PRESENTATION CONSTITUTES “FORWARD-LOOKING STATEMENTS” WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “SHOULD,” “EXPECT,” “TARGET,” “PROJECT,” “ESTIMATE,” “INTEND,” “CONTINUE,” OR “BELIEVE,” OR THE NEGATIVES THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM SUCH FORWARD-LOOKING STATEMENTS. THIS PRESENTATION CONTAINS CONFIDENTIAL INFORMATION AND THE RECIPIENT HEREOF AGREES TO MAINTAIN THE CONFIDENTIALITY OF SUCH INFORMATION. THIS PRESENTATION IS INTENDED SOLELY FOR THE INFORMATION OF THE PERSON TO WHOM IT HAS BEEN DELIVERED. DISTRIBUTION OF THIS PRESENTATION TO ANY PERSON OTHER THAN THE PERSON TO WHOM IT HAS BEEN ORIGINALLY DELIVERED AND TO THE ADVISORS OF SUCH PERSON WHO ARE ALSO SUBJECT TO A DUTY OF CONFIDENTIALLY IS UNAUTHORIZED, AND ANY REPRODUCTION OR TRANSMISSION OF THIS PRESENTATION, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS TO THIRD PARTIES, WITHOUT THE PRIOR CONSENT OF THE FUND, IS PROHIBITED.

Disclosure (Continued) Strictly Confidential

2 1235 VFW Parkway | West Roxbury| Boston

Pages Investment Summary: 4-5 Subject Property Renderings: 6 Local Attributes – Map: 7 Major Employers: 8 Proposed Terms of Joint Venture: 9-10 Project Timeline: 11 Rent Comparable: 12-15 Rent Comparable – Map: 16 Executive Summary & Financial Underwriting: 17-20 Organizational Chart: 21 New Construction for Apartments – Map: 22 West Roxbury Demographics Overview: 23 EA Fish – Overview: 24-25 Market Data: 26-28 Sample Floor Plans: 29

Table of Contents Strictly

Confidential


Investment Summary Luzern Associates, LLC (“Luzern”) has the opportunity to invest in the construction of a 80 unit class A apartment building in the West Roxbury neighborhood of Boston, with E.A. Fish Development, LLC or affiliated entity. The apartment complex is currently under construction with foundation work expected to be completed in October 2017. The new purpose built apartment community will consist of two attached four story structures above a one story parking garage to allow for 73 garage parking spaces and 53 surface parking spaces. This project will be class A in terms of condition, quality and amenities. Unit finishes are expected to include quartz countertops, stainless steel appliances, glass backsplashes and a mix of LVT wood, porcelain tile and carpet flooring. In addition, each unit will have in-unit laundry and Nest thermostats. Amenities will include a fitness center, resident lounge, coffee bar, pet washing station, package concierge, community gardens, a second digital fitness room, Hub way service, bicycle storage, electric vehicle charging stations, a roof terrace on the second floor, garage parking and shuttle service to the nearest MBTA station. The project will be one of the only class A rental properties in the West Roxbury neighborhood. The construction of the building is currently underway minimizing approval, permitting and construction timing risk. The property is expected to be completed in September of 2018 and stabilized by the end of second quarter of 2019. The investment will be made through EAFD West Roxbury LLC, a joint venture owned by VFW Parkway, Holdings LLC, an affiliate of: Luzern Realty Fund II L.P. (”Fund II”), Luzern Realty Fund III L.P. (and together with Fund II, the “Funds”) and E.A. Fish Development, LLC, or affiliated entity (“EA Fish”). Equity to be contributed by the Funds is approximately $4,700,000 (37% from Fund II and 67% from Fund III, see Executive Summary and Financial Underwriting). In addition, Funds will contribute a preferred equity of $2,089,000 proportionately from each fund in accordance with ownership above. EA Fish is a well known Boston based developer that has a 40+ year track record developing high-quality and community sensitive residential, commercial, and mixed-use projects. To date, EA Fish has developed over $1.8 billion of completed projects, including 15,000 housing units, plus over one million square feet of office and commercial developments throughout the Northeast and Florida.

Strictly Confidential


Investment Summary Summary: ° 80 total rental units (including 10 affordable) consisting of 13 one-bedroom, 44 two-bedroom and 23 three-bedroom units ° Project currently under construction providing short timeline to stabilization (18 months). ° Hold Period – projected three years from investment to exit via third party sale. ° Projected Yield Fund level 14.2 % total return and a 1.5 multiple on equity invested -before profit sharing to general partner. See Critical Metrics. ° Waterfall structure provides Fund investment with priority of distribution over EA Fish. ° EA Fish will cover construction cost overrun risk and loan covenants related to completion risk, liquidity and recourse requirements. ° Luzern, through the Funds combined investment, will have a controlling interest and thereby management of major decisions.



Subject Property Renderings Strictly

Confidential




Locational Attributes



Major Employers


9

Proposed Terms of Joint Venture

Management The Funds will own collectively 59.5% of total equity contributed upon closing of construction loan. EA Fish will own 40.5%. Decisions related to day to day operations will be made via a management committee including principals of EA Fish and Luzern with equal vote. Major decisions such as refinancing, sale or change of strategy with respect to the development will be controlled by Luzern as manager of the Funds. The operating agreement will include a buy sell provision in the event of a dispute between the partners related to a major decision that is unable to be resolved. VFW Parkway Partners, LLC (JV) is proposed to be capitalized as follows: Eastern Bank Construction Loan: $22,950,000 Preferred Equity Participation (Funds) $2,089,000 Ownership Equity Contributed: $7,905,620 Ownership Equity Contributions (“Equity”) VFW Parkway Holdings, LLC (Funds) : $4,705,620 (59.5%) EA Fish: $3,200,000 (40.5%) * Both Luzern Realty Fund II L.P. and Luzern Realty Fund III LP will participate in Preferred Equity and Ownership Equity.

1235 VFW Parkway | West Roxbury| Boston


10

Proposed Terms of Joint Venture

Preferred Equity Participation: ° Pay rate is 9% per annum payable monthly beginning at substantial completion ° Total Yield of 12% per annum payable upon sale or refinance with return of principal Ownership Equity: Distributions From Operating Cash Flow: ° Operating cash flow is defined as net effective revenue less operating expenses, reserves and debt service ° Tier 1 - 90% to Luzern 10% to Developer until Luzern achieves a 9% annual yield on Equity, Tier 2 - prorata based on equity ownership percentage (inclusive of cost over run equity) Distributions From Refinance of Development: ° Tier 1 to Luzern and Developer, pro-rata based on initial ownership percentage, until both parties have received their Initial Equity ° Tier 2 80% to Luzern 20% to Developer until Luzern achieves a 9% annual yield on Equity ° Tier 3 80% to Developer 20% to Luzern until Developer achieves a 9% annual yield on Equity ° Tier 4 prorate to Luzern and Developer in accordance with ownership percentage Distribution From Sale of Development: ° Tier 1 to Luzern and Developer, pro-rata based on initial ownership percentage, until both parties have received their Initial Equity ° Tier 2 80% to Luzern 20% to Developer until Luzern receives a total return of the greater of (i) 1.65X multiple or (ii) 15% IRR, inclusive of distributions from operating cash flow and refinance, if any ° Tier 3 80% to Developer 20% to Luzern until Developer receives a total return of the greater of (i) 1.65X multiple or (ii) 15% IRR, on total equity invested inclusive of distributions from operating cash flow and refinance, if any including $347,000 of development fee. ° Tier 4 prorate to Luzern and Developer in accordance with total ownership percentage


Project Timeline Strictly Confidential

11

November 17, 2017 ° Close on land ° Close construction loan with Eastern Bank ° Luzern capital contributed ° Luzern Preferred Equity contributed Current- September 2018 ° Construction Period August 2018 ° Pre leasing begins September 2018 ° Construction complete ° Building opens for occupancy June 2019 ° Leasing complete ° Building at stabilization


Rental Comparable Strictly Confidential

12

1235-1237 VFW Parkway Market Units Unit Type Avg Rent Average S.F. $/S.FBoston MA 02132 11 1 BR 1 Bath $2,375 821 $2.89

39 2 Bedroom $3,000 1147 $2.6220 3 BR 2 Bath $3,650 1326 $2.7570

Amenities:Fitness center, lounge, coffee bar, pet washing station,package concierge, gardens, hubway service, bycycle storage, roof terrace, garage parking, shuttle to MBTA

Proximity to DT Boston: 8.7 miles

Metro Mark Total Units Unit Type Avg Rent Average S.F. $/S.F Hancock Estates Total Units Unit Type Avg Rent Average S.F. $/S.F3611 Washington St 283 Studio $2,187 510 $4.29 199 Lagrange St, 88 1 BR 1 Bath $3,735 852 $4.38Boston, MA 02130 1 Bedroom $2,451 684 $3.58 Chestnut Hill, MA 1 BR 1.5 Bath $3,957 1042 $3.80

1 BR Den $2,599 843 $3.08 2 BR 1 Bath $4,125 1014 $4.072 Bedroom $3,180 1002 $3.17 2 BR 2 BA $4,585 1052 $4.362BR 2.5BA $3,545 1044 $3.40 2 BR 2.5 Bath $6,307 1640 $3.852 BR Den $3,423 1143 $2.99 2 BR Den 2.5 Bath $6,697 1888 $3.55

3 BR $4,125 1194 $3.45 Amenities:3BR 2.5BA $4,602 1246 $3.69 Concierge, dry cleaning kiosk, fitness center w/ studio space, guest suite, home office center, grilling area,

Amenities: fire pit, putting green, playground, dog run, pet grooming, shuttle service to rail, garage, gardenCourtyards with fireplaces & grilling stations, dog park, pet washing station, rooftop sun deck, bicycle repair shop &storage, entertainment room, café, fitness center, yoga studio, game room, computer lounge, parking extra Proximity to DT Boston: 8.2 miles

Proximity to DT Boston: 5.4 miles Avalon at Chestnut Hill Total Units Unit Type Avg Rent Average S.F. $/S.F160 Boylston Street 204 Studio $2,800 390 $7.18

Olmstead place Total Units Unit Type Avg Rent Average S.F. $/S.F Chestnut Hill, MA 02467 1 BR 1 Bath $2,977 1167 $2.55161 S Huntington Ave 196 Studio $2,840 545 $5.21 2 BR 1 Bath $3,335 1180 $2.83Jamaica Plain 02130 1 BR 1 Bath $3,845 714 $5.39 2 BR 2 Bath $3,771 1308 $2.88

2 BR 2 Bath $4,853 1001 $4.85 3 BR 2 Bath $4,872 1752 $2.783 BR 2 Bath $5,575 1302 $4.28 Amenities:

Amenities: Quartz countertops, glass tile backsplash, stainless appliances, grey cabinets, hard surface flooring, updatedStorage, fitness center, club house, pool, dryer, roof deck, parking extra baths, enganced lighting, washer/dryer, cable & internet, balcony or patio, cherry cabinets, dishwasher,

microwave, carpeting, ceramic tile in foyers, alarms, walk-in closets, central airProximity to DT Boston: 3.6 miles

Proximity to DT Boston: 7.5 miles



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Parkside on Adams Total Units Unit Type Avg Rent Average S.F. $/S.F Parkside on Adams Total Units Unit Type Avg Rent Average S.F. $/S.F4236 Washington St 43 Studio $1,575 575 $2.74 5165 Washington St 20 Studio $1,850 580 $3.19Roslindale, MA 02131 1 BR $2,400 770 $3.12 West Roxbury, MA 02132 1 BR $2,300 710 $3.24

2 BR $2,650 1185 $2.24 2 BR 1 Bath $2,700 1250 $2.16Amenities: Amenities:Fitness facility, roof deck, parking, bike storage Parking included

Proximity to DT Boston: 6.7 miles Proximity to DT Boston: 8.9 miles

Belgrade Place Total Units Unit Type Avg Rent Average S.F. $/S.F Jefferson at Dedham Statio Total Units Unit Type Avg Rent Average S.F. $/S.F446 Belgrade Ave 39 Studio $1,800 750 $2.40 1000 Presidents Way 79 1 BR 1 Bath $1,939 860 $2.25West Roxbury, MA 02132 1 BR $2,500 950 $2.63 Dedham, MA 02026 2 BR 2 Bath $2,329 1133 $2.06

2 BR $2,800 1200 $2.33Amenities: 2 BR + Den $3,000 1350 $2.22 Amenities:None 3 BR 2 Bath $4,200 1560 $2.69 Washer/dryer, quartz countertops, tiled backsplash, walk-in closets, crown molding, wall accents, pantry,

refrig with ice maker, large bathrooms w/ soaking tub & built -in storage, gas fireplaces, windows inProximity to DT Boston: 13 miles kitchen, views, private balconies, stainless appliances

Proximity to DT Boston: 13.5 milesAvalon Station 250 Total Units Unit Type Avg Rent Average S.F. $/S.F250 Station Circle 285 1 BR 1 Bath $1,972 890 $2.22 Charles River Landing Total Units Unit Type Avg Rent Average S.F. $/S.FDedham, MA 02026 2 BR 2 Bath $2,844 1235 $2.30 300 2nd Avenue 93 1 BR 1 Bath $2,255 1005 $2.24

3 BR 2 Bath $3,025 1377 $2.20 Needham, MA 02494 2 BR 2 Bath $3,636 1483 $2.45AmenitiesWasher & dryer, cable & hi-speed internet, private balcony or patio, kitchen islands, breakfast bar, granite Amenities:countertops, microwave, gas ranges/stoves, work stations, ceramic tiled foyer, tiles kitchen floors, built-ins,air conditioning, dry bar, gourmet kitchen, marble countertops, accent walls, range, stainless appliances,fireplace w/ custom mantels, arched doorways, alarms, 9' foot ceilings, crown molding, ceiling fans, walk-in closets, ceiling fans, dishwasher, garden tub, granite countertops, microwave, patio or balconygarden soaking tubs, marble countertops in bathrooms, glass showers, linen storage, air conditioning refrigerator, study, washer/dryer.hard surface flooring, water heaters.

Proximity to DT Boston: 11.5 milesProximity to DT Boston: 13.5 miles



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1 Bedroom by Rent / SF 1 Bedroom By Sq Ft 1 Bedroom by RentProperty Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf1000 Presidents Way 816 $2,000 $2.45 3611 Washington St (Metro Mark 684 $2,451 $3.58 1000 Presidents Way 816 $2,000 $2.45446 Belgrade Ave (Belgrade Pl) 950 $2,500 $2.63 5165 Washington St (Parkside) 710 $2,300 $3.24 5165 Washington St (Parkside) 710 $2,300 $3.24300 2nd Ave 961 $2,698 $2.81 161 S Huntington Ave (Olmstead 714 $3,845 $5.39 1235-1237 VFW Pkwy 821 $2,375 $2.89250 Station Cir 849 $2,452 $2.89 4236 Washington St (Parkside) 770 $2,400 $3.12 4236 Washington St (Parkside) 770 $2,400 $3.121235-1237 VFW Pkwy 821 $2,375 $2.89 1000 Presidents Way 816 $2,000 $2.45 3611 Washington St (Metro Mar 684 $2,451 $3.583611 Washington St (Metro Mark) 843 $2,599 $3.08 1235-1237 VFW Pkwy 821 $2,375 $2.89 250 Station Cir 849 $2,452 $2.894236 Washington St (Parkside) 770 $2,400 $3.12 3611 Washington St (Metro Mark 843 $2,599 $3.08 446 Belgrade Ave (Belgrade Pl) 950 $2,500 $2.635165 Washington St (Parkside) 710 $2,300 $3.24 250 Station Cir 849 $2,452 $2.89 3611 Washington St (Metro Mar 843 $2,599 $3.08160 Boylston St 900 $3,200 $3.56 199 Lagrange St (Hancock Estat 852 $3,735 $4.38 300 2nd Ave 961 $2,698 $2.813611 Washington St (Metro Mark) 684 $2,451 $3.58 160 Boylston St 900 $3,200 $3.56 160 Boylston St 900 $3,200 $3.56199 Lagrange St (Hancock Estate 1,042 $3,957 $3.80 446 Belgrade Ave (Belgrade Pl) 950 $2,500 $2.63 199 Lagrange St (Hancock Esta 852 $3,735 $4.38199 Lagrange St (Hancock Estate 852 $3,735 $4.38 300 2nd Ave (Charles River Land 961 $2,698 $2.81 161 Huntington Ave (Olmstead P 714 $3,845 $5.39161 Huntington Ave (Olmstead Pl) 714 $3,845 $5.39 199 Lagrange St (Hancock Estat 1,042 $3,957 $3.80 199 Lagrange St (Hancock Esta 1,042 $3,957 $3.80

2 Bedroom by Sq Ft 2 Bedroom by Rent / SF 2 Bedroom by RentProperty Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf161 Huntington Ave (Olmstead Pl) 1,001 $4,853 $4.85 1000 Presidents Way 1,138 $2,400 $2.11 1000 Presidents Way 1,138 $2,400 $2.113611 Washington St (Metro Mark) 1,002 $3,180 $3.17 250 Station Cir 1,269 $2,694 $2.12 4236 Washington St (Parkside) 1,185 $2,650 $2.24199 Lagrange St (Hancock Estate 1,014 $4,125 $4.07 5165 Washington St (Parkside) 1,250 $2,700 $2.16 250 Station Cir 1,269 $2,694 $2.123611 Washington St (Metro Mark) 1,044 $3,545 $3.40 446 Belgrade Ave (Belgrade Pl) 1,350 $3,000 $2.22 5165 Washington St (Parkside) 1,250 $2,700 $2.16199 Lagrange St (Hancock Estate 1,052 $4,585 $4.36 4236 Washington St (Parkside) 1,185 $2,650 $2.24 446 Belgrade Ave (Belgrade Pl) 1,200 $2,800 $2.33160 Boylston St 1,100 $3,675 $3.34 446 Belgrade Ave (Belgrade Pl) 1,200 $2,800 $2.33 1235-1237 VFW Pkwy 1,147 $3,000 $2.621000 Presidents Way 1,138 $2,400 $2.11 1235-1237 VFW Pkwy 1,147 $3,000 $2.62 446 Belgrade Ave (Belgrade Pl) 1,350 $3,000 $2.223611 Washington St (Metro Mark) 1,143 $3,423 $2.99 3611 Washington St (Metro Mark 1,143 $3,423 $2.99 3611 Washington St (Metro Mar 1,002 $3,180 $3.171235-1237 VFW Pkwy 1,147 $3,000 $2.62 300 2nd Ave 1,301 $4,025 $3.09 3611 Washington St (Metro Mar 1,143 $3,423 $2.994236 Washington St (Parkside) 1,185 $2,650 $2.24 3611 Washington St (Metro Mark 1,002 $3,180 $3.17 3611 Washington St (Metro Mar 1,044 $3,545 $3.40446 Belgrade Ave (Belgrade Pl) 1,200 $2,800 $2.33 160 Boylston St 1,100 $3,675 $3.34 160 Boylston St 1,100 $3,675 $3.345165 Washington St (Parkside) 1,250 $2,700 $2.16 3611 Washington St (Metro Mark 1,044 $3,545 $3.40 300 2nd Ave 1,301 $4,025 $3.09250 Station Cir 1,269 $2,694 $2.12 199 Lagrange St (Hancock Estat 1,888 $6,697 $3.55 199 Lagrange St (Hancock Esta 1,014 $4,125 $4.07300 2nd Ave 1,301 $4,025 $3.09 199 Lagrange St (Hancock Estat 1,640 $6,307 $3.85 199 Lagrange St (Hancock Esta 1,052 $4,585 $4.36446 Belgrade Ave (Belgrade Pl) 1,350 $3,000 $2.22 199 Lagrange St (Hancock Estat 1,014 $4,125 $4.07 161 Huntington Ave (Olmstead P 1,001 $4,853 $4.85199 Lagrange St (Hancock Estate 1,640 $6,307 $3.85 199 Lagrange St (Hancock Estat 1,052 $4,585 $4.36 199 Lagrange St (Hancock Esta 1,640 $6,307 $3.85199 Lagrange St (Hancock Estate 1,888 $6,697 $3.55 161 Huntington Ave (Olmstead P 1,001 $4,853 $4.85 199 Lagrange St (Hancock Esta 1,888 $6,697 $3.55



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3 Bedroom by Sq Ft 3 Bedroom by Rent 3 Bedroom by Rent / SFProperty Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf Property Sq Ft Rent Rent/sf3611 Washington St (Metro Mark) 1,194 $4,125 $3.45 250 Station Cir 1,377 $2,921 $2.12 250 Station Cir 1,377 $2,921 $2.123611 Washington St (Metro Mark) 1,246 $4,602 $3.69 1235-1237 VFW Pkwy 1,326 $3,650 $2.75 446 Belgrade Ave (Belgrade Pl) 1,560 $4,200 $2.69161 Huntington Ave (Olmstead Pl) 1,302 $5,575 $4.28 3611 Washington St (Metro Mark 1,194 $4,125 $3.45 1235-1237 VFW Pkwy 1,326 $3,650 $2.751235-1237 VFW Pkwy 1,326 $3,650 $2.75 446 Belgrade Ave (Belgrade Pl) 1,560 $4,200 $2.69 160 Boylston S 1,850 $5,100 $2.76250 Station Cir 1,377 $2,921 $2.12 3611 Washington St (Metro Mark 1,246 $4,602 $3.69 3611 Washington St (Metro Mar 1,194 $4,125 $3.45446 Belgrade Ave (Belgrade Pl) 1,560 $4,200 $2.69 160 Boylston S 1,850 $5,100 $2.76 3611 Washington St (Metro Mar 1,246 $4,602 $3.69160 Boylston S 1,850 $5,100 $2.76 161 Huntington Ave (Olmstead P 1,302 $5,575 $4.28 161 Huntington Ave (Olmstead P 1,302 $5,575 $4.28


Rental Comparable - Map Strictly Confidential




Major Employers

Executive Summary & Financial Underwriting Strictly Confidential


Investment Executive Summary: VFW Parkway Partners Holdings , LLC (REVISED FOR PREFERRED EQUITY)per Unit per GSF

$80 135,105Land Acquisition $7,000,000 $87,500 $52 Debt SummaryConstruction Costs $21,654,632 $270,683 $160 Limited Recourse Construction loanSoft Costs Including RE Taxes $2,326,938 $29,087 $17 Loan at Completion of Construction $22,950,000Interest and Financing Costs $1,510,050 $18,876 $11 Loan to Cost At Completion 70%Development Fee $450,000 $5,625 $3 Loan to Value at Stabilization 61%Additional Contingency - - - Floating Rate @ 3.25% 0ver LIBOR 4.7%Total Project Costs $32,941,620 $411,770 $244 Term 3 Years

Extension period 2 one year extensions subject to debt coverage ratio test

Note: Recourse covenants, completion, liquidity guarantee provided by E.A. FishCapitalizationConstruction Loan $22,950,000 69.67% LTC Preferred Equity Terms

Preferred Equity Amount $2,089,000Preferred Equity VFW Parkway Holdings LLC $2,089,000 Interest Rate Fixed Paid Current 9.00%Capital Contributions Additional Yield Due Upon Payoff 3.00%Capital Contribution EAFD WR GP LLC $3,200,000 40.5% Ownership Total Yield 12.00%Capital Contribution VFW Parkway Holdings, LLC $4,702,620 59.5% Ownership Payoff with Accrued Interest at Month 36 $2,370,864Total Equity EAFD West Roxbury LLC $7,902,620

Total Capitalization 32,941,620

Projected Distribution From Sales ProceedsTotal Sales Base Case $37,504,609 Residual Value Utilized For Yield AnalysisLess Sales Costs ($468,808) Three Year Hold PeriodSales Proceeds Net of Costs $37,035,802 Net Operating Income -Stabilize Untrended $2,025,249Pay down of Construction Loan ($22,949,983) Cap Rate 5.40%Distribution Preferred Equity (2,370,864) Sales Value $37,504,609Add Operating Reserves $1,392,504 Value Per Unit $468,808Projected Net Proceeds For Distribution $13,107,459 Multiple IRR Value Per GSF $278Distribution EAFD WR GP LLC $5,126,703 1.6 17.0%Distribution VFW Parkway Holdings LLC $7,980,756 1.7 19.3% Cash Flow Reserved Over Hold Period $1,392,504

Joint Venture Level Metrics

Executive Summary & Financial Underwriting Strictly Confidential


Yield Metrics: Fund Level Yield Metrics: Entity

Before Promote Net of Promote Total Project Cost $32,941,620Projected Base Case Cost per Unit $411,770Total Internal Rate of Return 14.0% 11.8% Return on Total Project Cost 6.0%Multiple on Equity Invested 1.5 1.4 Profit $5,204,839

Multiple On Equity 1.7

Alternate Case Assuming Rents Down By 3 % Cap Rate Stable (decrease in value $1.6 ) Perm Loan UnderwritingTotal Internal Rate of Return 13.3% 11.6% Refinance Year 4 NOI $2,084,520

Implied Cap Rate 5.56%Multiple on Equity Invested 1.5 1.4 Valuation $37,504,609

LTV 70%Projected Loan Proceeds Perm Loan $26,253,227

Alternate Case Value Achieved Decreases by 6% (decrease in value $2.3million) Constant 6.00%Total Internal Rate of Return 10.8% 10.7% Debt Service (including amortization) $1,575,194Multiple on Equity Invested 1.4 1.4 DCR 1.32

Projected Net Cash Flow $509,327Yield On Total Equity (net of amortization) 6.4%

Alternate Case Cap Rate Decreases by .20 (increase in value $1.45 million)Total Internal Rate of Return 16.6% 12.8% Total Debt Outstanding End of Year 3 $22,949,983Multiple on Equity Invested 1.6 1.4 Refinancing Proceeds Over (under) $3,303,243

P & L Summary Strictly

Confidential

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Lease up Stabilized Stabilized Stabilized Year 2 Year 3 Year 4 Year 5

Gross RevenueGrowth Rate - - 3.00% 3.00%Base Rental Market Rate 1,759,875 2,593,500 2,671,305 2,751,444 Base Rental Affordable 172,852 180,367 184,876 189,498 Less Vacancy (96,636) (138,693) (142,809) (147,047) Gross Residential Income 1,836,091 2,635,174 2,713,372 2,793,895 Other Income 92,154 129,150 132,379 135,688 Effective Gross Rental 1,928,244 2,764,324 2,845,751 2,929,584

ExpensesGrowth Rate 3% 3% 3% 3%Management Fee 3.50% 67,489 96,751 99,601 102,535 Office Salaries and Admin 137,180 134,930 138,978 143,147 Superintendent 75,000 77,250 79,568 81,955 Maintenance 92,958 92,958 95,746 98,619 Utilities 96,820 96,820 99,725 102,716 Taxes and Insurance 272,196 272,196 280,362 288,773 Shuttle Service 25,750 25,750 26,523 27,318 Replacement Reserves - - - -

767,392 796,655 820,502 845,063

Net Operating Income 1,160,852 1,967,669 2,025,249 2,084,520


Balance Sheet Strictly Confidential


Luzern Realty Fund II LP

Luzern Realty Fund III LP Total Investment

Capitalization 37.0% 63.0%Equity Investment in VFW Parkway Holdings, LLC $1,741,850 $2,960,769 $4,702,620

Preferred Equity Investment VFW Parkway Holdings LLC 773,766 1,315,234 2,089,000

Reserves Held @ Fund II 37,040 62,960 $100,000Total Invested $2,552,656 $4,338,964 $6,891,620Acquisition Closing Costs and Fees 81,794 139,033 $220,827Total Equity Contributed $2,634,450 $4,477,997 $7,112,447

Proforma Balance Sheet At Closing Luzern Realty Fund III, L.P. VFW Parkway Holdings LLC Parcel U LLC Combined

Cash Reserves $37,040 $185,919 $222,959 $62,960Investment Parcel U $2,763,997 $2,763,997Due From Parcel U $401,477 $401,477Investment in VFW Parkway Holdings LLC $2,515,616 $4,276,004Other Assets $81,794 $37,494 $119,288 $139,033Total Assets $2,634,450 $3,388,887 $3,507,721 $4,477,997

Current Liabilities $0 $128,745 $128,745

Equity $2,634,450 $3,260,143 $5,894,593 $4,477,997

Total Debt and Capital $2,634,450 $3,388,888 $6,023,338 $4,477,997

Luzern Realty Fund II L P Balance Sheet based on July 31, 2017 unaudited financials.

Luzern Realty Fund II, L.P.

Organizational Chart Strictly

Confidential


New Construction Pipeline for Apartments



West Roxbury Demographic Overview Strictly Confidential

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Area: ° 4.6 square miles (~6 miles from Boston)

Total Population: ° 30,440 (91.5% non Hispanic or Latino; 8.5% Hispanic)

Workforce: ° 79% employed with largest age group being 35 - 54 yrs. (7k+) ° 93% College educated

Income: ° Average Household income $102k ° Age 25-44 Median income $74,583 ° Age 45-64 Median income $95,691

Households: ° 11,285 households ° 57% family households (6k) ° 42% non-family households (5k) Source: StatisticalAtlas.com West Roxbury, Boston, MA & Point2Homes.com West Roxbury, MA


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EA Fish - Overview


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EA Fish - Overview EA Fish Development is committed to and passionate about our people, our developments, the communities we enter, the business partners we team with – and about competing, executing, and winning – thereby delivering superior results. We take pride in developing values and encouraging teamwork to achieve success. Our professionals and their relationships with our stakeholders are our greatest assets. Working together and respecting one another creates an optimal environment, culture, and community that creates opportunities and drives continued growth and achievement. Our integrated development process mitigates risk by providing seamless leadership and oversight of projects throughout the development life-cycle. Vision, Experience and Results describe the essence of EA Fish’s successful approach to developing, building and managing real estate. With a seasoned team that has worked together for several years, EA Fish has a unique perspective from which to implement its value-added strategy. The operating experience that has been gained managing projects through multiple real estate cycles provides EA Fish development with a broad understanding of how to maximize value and make insightful judgments. Time and again, EA Fish has capitalized on the collaborative experience of its team and has applied insight and vision to create value in real estate.

EA Fish Recent Projects


Market Data Strictly Confidential


Sample Floor Plans Strictly Confidential


1235 VFW Highway West Roxbury, MA Investment Presentation · 2017. 10. 30. · 1235 vfw highway...

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