Confidential Offering Memorandum

SUMMIT VIEW INN11800 E COLFAX AVENUE I AURORA, CO 80010

PRICE REDUCED BY $1,345,000!!

Table of Contents

Summit View Inn11800 E Colfax Ave | Aurora, CO 80010

Executive Summary

Financial Analysis

Location Overview

Josh NewellPrincipal303-962-9559JNewell@PinnacleREA.com

Lindsey SantaulariaDirector of Team Operations303-962-9573LSantaularia@PinnacleREA.com

Connor KnutsonAdvisor303-962-9567CKnutson@PinnacleREA.com

Barton ThompsonAdvisor303-407-9789BThompson@PinnacleREA.com

Jeremy MillerAssociate Advisor303-407-9780JMiller@PinnacleREA.com

Rachel EdsonTransaction Associate 720-638-5415REdson@PinnacleREA.com

One Broadway, Suite A300Denver, Colorado 80203303.962.9555www.PinnacleREA.com

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EXECUTIVE SUMMARY

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Summit View Inn11800 E Colfax Ave, Aurora, CO 80010

Units: 95

Year Built: 1961

List Price: $7,340,000 $5,995,000

Price/Unit: $63,105

Building Exterior: Concrete Block

Building Size: 32,050

Lot Size: 1.57 Acres

Roof: Flat

Zoning: OA-G

Heating: Hot Water Boiler

Parking: Ample Off-Street Parking

CAP Rate: 15.92%

Cash on Cash Return: 29.57%

Property Features

• 15.92% Current CAP Rate!

• Price Reduced by $1,345,000!!

• Major Redevelopment Opportunity

• Located in Opportunity Zone

• Walking Distance to Fitzsimmons Medical Campus, Retail &

Restaurants, Light Rail Station and Bus Line.

• Recently Renovated Property with New: Windows, Exterior

Lighting, Security System, Kitchens, Bathrooms, Laundry Room,

Restriped Parking Lot and Dumpster Enclosure and Bollards

• Motel Use is Grandfathered with Potential Apartment Conversion

Opportunity on Large Lot

• Tenants Stay Longer than Traditional Hotel Guests: 60%+

Tenant Base 4+ Months at Property

Property Overview

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Property Overview

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Exterior/Site Improvements: • All units have new high efficiency (10,000 – 12,000 btu) wall mounted ACs with new trim• All units have new double pane, vinyl windows, including large 7 x 5 feet “picture” windows at each unit entrance• Brand new security system with HD security cameras installed throughout property• Upgraded exterior lighting• New 6 foot perimeter fencing on South and West side of property• New 15’5” x 4’6” high efficiency face-lit channel LED illuminated property sign• Prepped (skim coated) and painted all siding, railings, fascia, stairs, and walkways on all buildings• Fascia and gutter repair• New dumpster enclosure and bollards• Trimmed and removed trees around the perimeter• All unit front doors have new paint, numbers, kickplates, door knobs, boots, doors sweeps and weather stripping• Restriped parking area• New dog park• Installed new GACO silicone roof coating• New fire extinguishers and mounts

Capital Expenditures/Renovations

Common Area/Amenities • All new office area completely rehabbed including:

• Resident Laundry room with folding area fully rehabbed

Interior Improvements:• All new drywall , low flow toilets (0.8 gallon flush) installed in every unit, semi-gloss easy clean paint, light fixtures, switches, outlets, GFCIs, and cover plates, laminate waterproof plank flooring, kitchen cabinets, countertops, vanities, rough plumbing (where needed), bathroom fixtures, new or resurfaced tubs, shower surrounds, appliances, draperies in all units• Low flow aerators installed in all faucets• Installed LED lightbulbs in all unitso Waterproof laminate plank flooring

o New security doors o Steel reinforced main wallo Electronic fob systemo Alarm system, interior cameras & security system monitorso New shelving in storage areao Low E vinyl exterior windowso Waterproof laminate plank flooringo Paint, subflooring, base, and caseo Completely renovated bathroom

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FINANCIAL ANALYSIS

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Rent Roll

Unit Type Unit Amount Unit SF Average Monthly RentSleeper/1 Bath/ No Kitchen 29 200 $1,338Sleeper/1 Bath/ No Kitchen, Large 5 275 $1,430Sleeper/ 1 Bath/ Small Kitchen 29 285 $1,643Sleeper/ Living Room/ Kitchen 20 375 $1,7951 Bed/1 Bath/ Large Kitchen 9 500 $1,9472 Bed/ 1Bath/ Living Room/ Kitchen 3 800 $2,099

TOTAL 95 $10,250

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Income & Expenses Analysis

UNIT MIX AND AVERAGE RENT SCHEDULE

UNIT TYPENo. of Units

Approx. SF

Current Nightly

Monthly Income

Current Rent/SF

Pro Forma Nightly

Monthly Income

Pro Forma Rent/SF

Sleeper - Lg Kitchen 20 375 $59 $35,892 $4.79 $65 $39,542 $5.27Sleeper - Sm Kitchen 29 285 $54 $47,633 $5.76 $60 $52,925 $6.40Sleeper 29 200 $44 $38,812 $6.69 $52 $45,868 $7.91Large Sleeper 5 275 $47 $7,148 $5.20 $55 $8,365 $6.081 Bed 1 Bath 9 500 $64 $17,520 $3.89 $70 $19,163 $4.262 Bed 1 Bath 3 800 $69 $6,296 $2.62 $80 $7,300 $3.04

TOTAL 95 29,840 $153,300 $173,162

INCOME Pro FormaGross Possible Sales $1,839,600 $2,077,945Other Income

Damages (Actual - Trailing 12 Months) $5,347 $5,347Late Fees (Actual - Trailing 12 Months) $48,516 $48,516Laundry Income (Actual - Trailing 12 Months) $7,861 $7,861

Total Other Income $61,724 $61,724Gross Potential Income $1,901,324 $2,139,669Vacancy/Collection Loss (Actual - Trailing 12 Months/ Estimated) 17.05% ($313,652) 15.00% ($311,692)EFFECTIVE GROSS INCOME $1,587,672 $1,827,977

EXPENSESProperty Taxes (Actual - Trailing 12 Months) $79,033 $79,033Lodging Tax (Actual - Trailing 12 Months) $62,710 $62,710Insurance (Actual - Trailing 12 Months) $22,260 $22,260Utilities (Actual - Trailing 12 Months) $101,482 $101,482Trash (Actual - Trailing 12 Months) $6,640 $6,640Hospitality (Actual - Trailing 12 Months) $7,780 $7,780Maintenance & Repairs (Actual - Trailing 12 Months) $38,392 $38,392Payroll/Contract (Actual - Trailing 12 Months) $200,886 $200,886Telephone/Internet (Actual - Trailing 12 Months) $1,783 $1,783Management Fee (Actual - 2018/ Estimated: 5%) $37,715 $91,399Legal & Professional (Actual - Trailing 12 Months) $2,161 $2,161Security Services (Actual - Trailing 12 Months) $39,349 $39,349Administrative (Estimated: $100/Unit/Year) $9,500 $9,500Replacements/Reserves (Estimated: $250/Unit/Year) $23,750 $23,750TOTAL EXPENSES $633,441 $687,125Expenses per Unit $6,668 $7,233Expenses per SF $21.23 $23.03% OF EGI 39.9% 37.6%NET OPERATING INCOME $954,231 $1,140,852

Current

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate.

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Pricing Analysis

Price: $5,995,000 CASH FLOW INDICATORS CASH FLOW INDICATORS

Price/Unit: $63,105 Net Operating Income $954,231 Net Operating Income $1,140,852

Price/SF: $187.05 Debt Service ($245,080) Debt Service ($245,080)

Current CAP Rate: 15.92% Net Cash Flow 29.57% $709,151 Net Cash Flow 37.35% $895,772

Principal Reduction $48,455 Principal Reduction $48,455

Total Return 31.59% $757,606 Total Return 39.38% $944,227

Loan Amount: $3,597,000

Down Payment: $2,398,000

Interest: 5.50% CAP Rate 15.92% CAP Rate 19.03%

Amortization: 30 Years Price Per Unit $63,105 Price Per Unit $63,105

Monthly Payment: ($20,423) Price Per Foot $187.05 Price Per Foot $187.05

Proposed Financing

VALUE INDICATORS

Pro FormaInvestment Summary Current

VALUE INDICATORS

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LOCATION OVERVIEWLOCATION OVERVIEW

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Location OverviewSTAPLETON

Westerly Creekand Montview Park

Renovations

Proposed Multifamily Development

Multi-fieldPark Development 322 Single-Family

Housing Development

Proposed Mixed-Use Redevelopment

E MONTVIEW BLVD

E 17TH AVENUE

PE

OR

IA S

TR

EE

T

COLFAX AVENUE

SUMMIT VIEW INN

Fitzsimions & CU Medical

Campus

OPPORTUNITY ZONE

NOME PARK

SWC Retail Development

Fitzsimons Gateway Hotel Development

50 Unit Apartment Development

Fitzsimons Medical Campus

Apartment & Retail

Development

39 Apartment Units

8 Story Mixed -Use Retail &

Apartments

Edge Point Apartments

Lumien at Fizsimons

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Location Overview

OPPORTUNITY ZONES

Summit View Inn is located in an “Opportunity Zone.” Opportunity Zones were enacted as part of the 2017 tax reform package (Tax Cuts and Jobs Act) to address uneven economic recovery and persistent lack of growth that have left many communities across the country behind. In the broadest sense, the newly enacted federal Opportunity Zone (OZ) program provides a federal tax incentive for investors to invest in low-income urban and rural communities through favorable treatment of reinvested capital gains and forgiveness of tax on new capital gains.

In Colorado, Opportunity Zones may help address a number of

challenges:

• Promoting economic vitality in parts of the state that have not shared in the general prosperity over the past few years

• Funding the development of workforce and affordable housing in areas with escalating prices and inventory shortages

• Funding new infrastructure to support population and economic growth

• Investing in startup businesses that have potential for rapid increases in scale and the ability to “export” outside the state of Colorado

• Upgrading the capability of existing underutilized assets through capital improvement investments

This economic and community development tax incentive program provides a new impetus for private investors to support distressed communities through private equity investments in businesses and real estate ventures. The incentive is deferral, reduction and potential elimination of certain federal capital gains taxes. U.S. investors currently hold trillions of dollars in unrealized capital gains in stocks and mutual funds alone— this is a significant untapped resource for economic development.

Opportunity for Investors

The Opportunity Fund creates an additional incentive to invest in communities by deferring and possibly eliminating the capital gain tax on long-term investments. Some investors have a social investment drive – they want their capital to improve communities they know and love. Volatility in the stock-market has many investors sitting on unrealized capital gains; they can transfer these into Opportunity Funds putting the full value of the capital gain to work.

Benefits of an Opportunity Zone Investment:

1. Deferral. No up-front tax bill on the rolled-over capital gain and investors can defer their original tax bill until the earlier of a) December 31, 2026 or b) the sale of the Opportunity Zone investment

2. Reduction of tax on the rolled-over capital gain investment for long-term holding.

- A 5 year holding increases the rolled-over capital gains basis by 10%

- A 7 year holding increases the rolled-over capital gain investment basis 5% for a total of 15%

3. Tax-free appreciation. If an Opportunity Fund investment is held for 10 years, the taxpayer pays no capital gains tax on appreciation

Source:ColoradoOfficeofEconomicDevelopmentandInternationalTrade(Jan2019)

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Location Overview

Located in northwest Aurora, on what was the former Fitzsimons Army Medical Center, is a one square mile area that has been rapidly developing as a pre-eminent medical education, hospital and research center. The army base was decommissioned in 1999, and since that time the Fitzsimons area has become one of the largest medically-related redevelopment projects in the United States. This area is quickly transforming into a vibrant urban district with a distinct research and educational character, unique in the region.

In 2008, the redeveloped Fitzsimons campus created 16,000 jobs and generated roughly $3.5 billion for the state’s economy. Aurora has designated the land around Fitzsimons as an urban renewal area targeted for mixed-use commercial, retail, and residential developments in order to support the medical campus. Once the Fitzsimons Innovation Campus and the University of Colorado Anschutz Medical Campus are completely built, the area is projected to have 46,000 employees.

9# BEST PEDIATRIC HOSPITALIN THE NATION

Located on 48 acres of land on the southern edge of the Fitzsimons campus, is the Children’s Hospital Colorado on Anschutz Medical Campus.

The $450 million, nine-story facility of approximately 900,000 square feet opened its doors in September 2007.

106 CHILDREN’S COLORADO PHYSICIANS RANKED

TOP DOCS

46KTOTAL EMPLOYEES AT COMPLETION OF DEVELOPMENT

16KNEW JOBS CREATED TO DATE WITH A PROJECTED

$3.5BGENERATED BY FITZSIMONS DEVELOPMENT FOR THE COLORADO ECONOMY

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NEW BUSINESSES

50+

Summit View Inn is located near the Stanley Marketplace, a community of over 50 independently owned local businesses located in a 140,000 SF market hall and outdoor event venue. The project opened in December 2016 and has provided approximately 500 new jobs to Northwest Aurora.

Built in 1954, the Stanley Aviation building that manufactured airplane ejector seats has been transformed into a marketplace that features a restaurant, beer garden, community park, office spaces and a variety of dining, shopping and recreational options. The $30 million redevelopment rolled out only locally, independently owned businesses that

are not found anywhere else in Aurora.

The Stanley Marketplace has already encouraged additional development in the immediate area. Notable development projects include a $9 million renovation of Westerly Creek, 322 single family homes, and a 200-unit apartment building breaking ground in 2019.

The future is bright for Stapleton Flats. As one of the only existing apartment communities adjacent to the Stanley Marketplace and the imminent surrounding redevelopment, future tenant and investor demand for these assets will remain strong.

PROJECT SIZE

140,000 SFNEW JOBS CREATED

500

Location Overview

STANLEY MARKETPLACE

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Disclaimer

This confidential Offering Memorandum, has been prepared by Pinnacle Real Estate Advisors, LLC (“Pinnacle REA”) for use by a limited number of qualified parties. This Offering Memorandum has been provided to you at your request based upon your assurances that you are a knowledgeable and sophisticated investor in commercial real estate projects and developments. Pinnacle REA recommends you, as a potential buyer/investor, should perform your own independent examination and inspection of the property located at 11800 E Colfax Avenue in Aurora, Colorado (the “Property”) and of all of the information provided herein related to the Property. By accepting this Offering Memorandum, you acknowledge and agree that you shall rely solely upon your own examination and investigation of the Property and you shall not rely on any statements made in this Offering Memorandum or upon any other materials, statements or information provided by Pinnacle REA or its brokers.

Pinnacle REA makes no guarantee, warranty or representation about the completeness or accuracy of the information set forth in this Offering Memorandum. You are responsible to independently verify its accuracy and completeness. Pinnacle REA has prepared the information concerning the Property based upon assumptions relating to the general economy, its knowledge of other similar properties in the market, and on other market assumptions including factors beyond the control of the Pinnacle REA and the Owner of the Property. Pinnacle Real Estate Advisors make no representation or warranty as to either the accuracy or completeness of the information contained herein, and the information set forth in this Offering Memorandum in not intended to be a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be accurate, Pinnacle REA and the Property Owner disclaim any responsibility or liability for any inaccuracies. Further, Pinnacle REA and the Property Owner disclaim any and all liability for any express or implied representations and warranties contained in, or for any omissions from, the Offering Memorandum and for any other

written or oral communication transmitted or made available to you. Pinnacle REA shall make available to you, as a qualified prospective investor, additional information concerning the Property and an opportunity to inspect the Property upon written request. This Offering Memorandum and the contents are intended to remain confidential except for such information which is in the public domain or is otherwise available to the public. By accepting this Offering Memorandum, you agree that you will hold and treat Offering Memorandum in the strictest confidence, that you will not photocopy or duplicate it, or distribute it. You agree you will not disclose this Offering Memorandum or its contents to any other person or entity, except to outside advisors retained by you and from whom you have obtained an agreement of confidentiality, without the prior written authorization of Pinnacle REA. You agree that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the Property. If you determine you have no interest in the property, kindly return the Offering Memorandum to Pinnacle REA at your earliest convenience.

Investment Contacts:

Josh Newell, Principal303.962.9559 | JNewell@PinnacleREA.com

Lindsey Santaularia, Director of Team Operations303.962.9573 | LSantaularia@PinnacleREA.com

Confidential Offering Memorandum

SUMMIT VIEW INN11800 E COLFAX AVENUE I AURORA, CO 80010

PRICE REDUCED