Executive Summary Global Investments, LLC, is a national apartment operator based in Washington, D.C. with an investment strategy that typically involves acquiring poorly managed class A and B apartment projects across the United States, repositioning the assets through some combination of capital improvements and management improvement, and then holding the assets for up to seven years. Global targets a minimum year one leveraged cash return on equity of 12% per annum on its assets. Global Investments, LLC is pleased to announce another potential real estate investment opportunity - the acquisition of the 72-unit Vineyard View Apartment property located in Napa County, California. The acquisition of Vineyard View Apartments provides a significant value-add opportunity within a submarket with long-term barriers to entry for construction of new multifamily housing options, superb economic fundamentals, and proven rent growth with appropriate unit renovations. The Vineyard View Apartment community is located within proximity to major employment sectors in the City of Napa. A review of the market shows that these renovations will yield a $275 per month increase in one- bedroom rents and $250 per month increase in two-bedroom rents. The cost of completing the renovations is $825,000. Location Vineyard View Apartments, located in the City of Napa, is in the heart of Northern California's Wine Country approximately fifty-five miles north of San Francisco. Napa is the largest city within, and the county seat of, Napa County. The City of Napa and the surrounding valley provides residents with numerous indoor and outdoor activities, a temperate climate, excellent schools including eight colleges within a thirty-five radius, low crime rate, and a vibrant local economy. Vineyard View Apartments is located at 601 Trancas Street, one mile east of Route 29 (St. Helena Highway) and one mile west of the Silverado Trail -the two main north/south corridors in Napa Valley. GLOBAL INVESTMENTS, LLC 801 Pennsylvania Avenue, NW, Washington, DC 20004 NAPA VALLEY SevenFifty Daily Regional Map SAN FRANCISCO Calistoga AVA Diamond Mountain District AVA Howell Mountain AVA CALISTOGA Spring Mountain District AVA - Chiles LAKE BERRYESSA Valley AVA St. Helena AVA ST. HELENA Yountville AVA Rutherford AVA Oakville AVA Atlas Peak AVA Stags Leap District AVA Mt. Veeder AVA NAPA PETALUMA GAP SONOMA -Oak Knoll District of Napa Valley AVA Wild Horse Valley AVA Coombsville AVA Los Carneros AVA CALIFORNIA The Site and Building Details Vineyard View consists of seventy- two wood frame apartments constructed in 1972 on 1.4 acres in the City of Napa, California. The site includes ninety-eight covered parking spaces, multiple greens with sidewalks and seating areas, and a recently renovated clubhouse and courtyard pool. Individual units are located in two-story pods of four units each - two at ground level and two on a second level accessed by a common open stair. SAN PABLO BAY GLOBAL INVESTMENTS, LLC 801 Pennsylvania Avenue, NW, Washington, DC 20004 1 Bath 1 Bedroom Square Feet: 736 32 Units / 44% Total 1 Bath 2 Bedroom Square Feet: 930 40 Units / 56% Total The apartments units are a mix of 32 one bedroom/one bath units with a net floor area of 736 square feet each and 40 two bedroom/one bath units with a net floor area of 930 square feet each. All units have front and rear exposures providing additional light and cross ventilation. Each unit includes either a ground-level patio or a second-floor balcony. Two-bedroom units include walk- in closets in the master bedroom and individual washers and dryers. One-bedroom units currently do not have individual washers and dryers, but a central laundry facility is available onsite. Value Add Opportunity The existing kitchens at Vineyard View Apartments consist of laminate countertops, twenty- year-old appliances, single bowl stainless steel sinks, and dated wood veneer cabinetry. Baths also include the same dated wood veneer cabinetry and laminate countertops as well as three- Vineyard View Apartments - Existing Kitchen & Bath, ARA, A Newmark Company, Offering Memorandum GLOBAL INVESTMENTS, LLC 801 Pennsylvania Avenue, NW, Washington, DC 20004 piece shower surrounds and "Hollywood" lighting as shown in the two photos to the left. In addition, the one-bedroom units at Vineyard View do not include washers/dryers. Detailed Revenue and Expenses for Past Twelve Months (T-12) An operating statement detailing the past twelve months of income and expenses is provided separately. Assessment Tasks Task 1 - Calculate the purchase price you would offer for the acquisition of Vineyard View Apartments based on the projected revenue and expenses for the next twelve months. Task 2 - Calculate the maximum debt that could be obtained for this acquisition. Task 3 - Calculate the leveraged cash return on equity upon completion of the renovations and increasing rents as described in the Value- Add Opportunity section of the acquisition report. Does this meet the investment target? Task 4- Research Consumer Price Index (CPI) and provide data from at least two sources, graphs, and calculations to support your estimation of operating expense escalation over a forecast period of ten (10) years. One potential data source is: (https://data.bls.gov/timeseries/CUURS49BSA0&output_view=pct_12mths). Task 5 - Research Rent Growth and provide data from at least two sources, graphs, and calculations to support your estimation of revenue escalation over a forecast period of ten (10) years. One potential data source is: (https://www.deptofnumbers.com/rent/california/napa/). Task 6 Calculate the IRR for the proposed acquisition with a ten-year hold period and sale at end of ten years. Assume renovations in the first year with year two revenue being current month revenue plus an increase from renovations. Revenue escalation assumes year 2 revenue as the base. Task 7 - Provide an analysis of the financial risks associated with acquisition. GLOBAL INVESTMENTS, LLC 801 Pennsylvania Avenue, NW, Washington, DC 20004 Assumptions Use the following assumptions for property acquisition, loan calculations, and sale: 6.00% capitalization rate on net operating income after capital expenditures for calculating property value for loan purposes Annual interest rate - Current 0-year treasury bond rate yield plus a spread of 215 basis points Monthly payments 30-year amortization period 10-year term with no prepayment penalty after year four Maximum loan to value is seventy percent (70%) Minimum debt service coverage ratio is 1.25 Lender mandated capital expenditure reserve of $420 per unit annually must be used in determining net operating income for loan calculations in lieu of actual capital expenditures Loan Fees are 1.0% Acquisition due diligence and closing costs equals one and one-half percent (1.5%) of the acquisition price Sale valuation capitalization rate equals same rate used for acquisition Sale commission equals three percent (3%) Sale closing costs equals two percent (2%) of the sale price. GLOBAL INVESTMENTS, LLC 801 Pennsylvania Avenue, NW, Washington, DC 20004