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NORTH CAROLINA MHC PORTFOLIO

THREE COMMUNITIES | 302 TOTAL SITESPRICE: CONTACT BROKER

FAIRGROVE

SHADY ACRES COUNTRY VALLEY

PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES

PORTFOLIO INVESTMENT HIGHLIGHTS• Unique opportunity to acquire a three-property portfolio in high quality locations near major

metro areas in North Carolina. With three properties spanning 302 sites within a two hour drive of each other, a new owner will benefit from economies of scale.

• The offering includes 127 park-owned homes, of which 113 are currently occupied. The low number of vacant homes indicates the healthy demand for this product type in the area.

• Of the occupied park-owned homes, 70 are currently on a lease-option program where residents put down a minimum of 10% and have equity in the home. The remaining occupied homes are pure rentals. The current Owner is now able to use a third party financing source to sell homes as well.

• There is attractive upside in filling the remaining vacant sites at all three properties. There is high demand for homes across the portfolio, and Shady Acres recently saw four new homes brought in, all of which sold in a short time frame.

• All communities sit near major thoroughfares, providing easy access to larger markets such as Charlotte, Winston-Salem, Greensboro, and Raleigh-Durham. Country Valley sits only 45 minutes north of Charlotte while Shady/Fairgrove are only less than 30 minutes from Greensboro.

• These communities offer an attractive, cheaper alternative to traditional housing and their appeal should continue to increase as home prices in the area grow quickly relative to income, making the market more and more unaffordable for lower income households.

GREENSBORO

DURHAM

RALEIGH

WINSTON-SALEM

CHARLOTTE

COUNTRY VALLEY MHC

SHADY ACRES MHC

FAIRGROVE MHC

NORTH CAROLINA

NORTH CAROLINASOUTH CAROLINA

NORT

H CA

ROLIN

A

TENN

ESSE

E

VIRGINIA

Name Fairgrove MHC Shady Acres MHC Country Valley MHC Totals/Avg

Address 125 Capitol Loop Reidsville, NC 27320

111 Shade Tree Dr Reidsville, NC 27320

1270 Shady Valley Ln Claremont, NC 28610 -

Number of Sites 96 35 171 302

Avg Lot Rent $338 $338 $254 $280

Year Built 1980s 1980s 1983/1995/2008 -

Community Type All Age All Age All Age -

Land Size (acres) 36.23 28.02 100.35 164.60

Density (sites/acre) 2.60 1.20 1.70 1.83

Total Inventory Homes* 35 (31 occupied) 7 (7 occupied) 85 (75 occupied) 127 (113

occupied)

Avg Home Rent** $316 $301 $370 $351

MH Phys Occ* 56.25% 37.14% 87.13% 71.50%

MH Eco Occ* 52.08% 37.14% 81.29% 66.90%

*as of Aug ‘18 / **includes LTO and pure home rentals

SHADY ACRES

FAIRGROVE

COUNTRY VALLEY

THREE PROPERTY MHC PORTFOLIO 302 TOTAL SITES

PRICE: CONTACT BROKER


PORTFOLIO OVERVIEW

FAIRGROVE MHC SITE INFORMATION

ADDRESS 125 Capitol Loop, Reidsville, NC 27320

COUNTY Rockingham

YEAR BUILT 1980s

TAX PARCEL ID 7981-00-80-2475-00

SITES 96

COMMUNITY TYPE All Age

LAND SIZE & DENSITY 36.23 acres (2.60 sites/acre)

MH PHYS OCC 56.25% (54 sites as of Aug ‘18)

MH ECO OCC 52.08% (50 sites as of Aug ‘18)

INVENTORY HOMES 35 (31 occupied as of Aug ‘18)

AVG LOT RENT $338

LAST RENT INCREASE $10 (Q4 2017)

ROADS Asphalt

FLOODPLAIN Zone X

ZONING Residential Mixed District (RM)

SHADY ACRES MHC SITE INFORMATION

ADDRESS 111 Shade Tree Dr, Reidsville, NC 27320

COUNTY Rockingham

YEAR BUILT 1980s

TAX PARCEL ID 8900-00-09-8835-00

SITES 35



MH PHYS OCC 37.14% (13 sites as of Aug ‘18)

MH ECO OCC 37.14% (13 sites as of Aug ‘18)

INVENTORY HOMES 7 (7 occupied as of Aug '18)

AVG LOT RENT $338

LAST RENT INCREASE $10 (Q4 2017)

ROADS Asphalt

FLOODPLAIN Zone X & Zone AE

ZONING Residential Mixed District (RM)

FAIRGROVE & SHADY ACRES MHC UTILITIES

WATER* Private - Well (Owner pays)

SEWER Private - Septic (Owner pays)

ELECTRICITY Duke Power (direct billed to tenants)

TRASH GDS (direct billed to tenants)

*2 well pump houses at Fairgrove and 1 at Shady Acres

AREA HIGHLIGHTS

INVESTMENT HIGHLIGHTS

• Tremendous value-add opportunity to fill sites at these two well-located parks. With average occupancy around 47%, there is a lot of upside to drive increased revenue. A 10% increase in economic occupancy should drive over 100bp in additional yield for a new investor. Seller has been able to bring in new homes priced in the mid-$20k to mid-$30k range and easily get them sold or leased.

• High demand for homes and the ability to get them sold. For example, Shady Acres recently saw four new homes brought in, all of which sold in a short time frame.

• Apartments in the area are expensive, thus providing a new owner with pricing power for quality MHCs. Current owner pushed home rents $100 with relative ease as apartments were priced well above.

• New subdivisions are popping up to the south of these properties, with new homes being sold in the $250-500k range.

• The majority of occupied park-owned homes are being sold as part of a lease-option program where tenants put an average 10% down and have equity in the home. The park maintains all the park-owned homes.

• Small town lifestyle with historic downtown and 750-acre lake/park.• 411-acre technology and industrial park home to two international companies:

Alcan Packaging (based in Canada) and Albaad (based in Israel). – Albaad, an international manufacturer of wet wipes and other non-woven textile products, recently announced a $45 million expansion with plans to add 302 jobs over a three-year period.

• Love’s Travel Stop & Country Store began construction on a new $15 million location in Spring 2018 with plans to open in the fall; will provide 80 jobs in Reidsville once completed.

• Rockingham County Schools – serves 13,179 students and comprised of 16 elementary schools, four middle schools, one alternative school, and one early college high school.

• Communities are located in the Greensboro-High Point MSA, which is comprised of three counties – Rockingham, Guilford and Randolph County. MSA contains two major cities – Greensboro and High Point. The metro area is connected by Interstates 85, 40, 73 and 74, and served by the Piedmont Triad International Airport.

• Area has been known as a large transportation and manufacturing hub for the southeastern United States; large producers of textile, tobacco, and furniture.

FAIRGROVE

SHADY ACRES




FAIRGROVE & SHADY ACRES MHC PROPERTY DETAILS

2 Gross Scheduled RentGross Potential Income

Less: Vacancy 48.09%

Less: Bad Debt 0.50%

Total Rental Income 51.41%3 Plus: Other Income 434 Plus: Option Payments (LTO) 05 Plus: Net Home Rent 663

Total Other Income 706

Effective Gross Income

EXPENSES per site

Repairs & Maintenance $1506 Payroll 250

Administrative 65

Marketing 2

Professional Fees 357 Utilities

Electricity 52

Water 68

Total Variable Expenses $6228 Taxes 1129 Insurance 46

10 Management Fee 4.00%

Total Operating Expenses $89411 Plus: Capital Reserves 50

Total Expenses $944

NET OPERATING INCOME

Expense Ratio

23

2

0222,994

4,585

2,910

6,658

2

8,515210

137

14,100$81,483

8,605

0

125 16,329210

47

17,969

6,122 51

0

925 121,123

$28,174

6,858

14,642

262

Proforma

92,550

2017 Actuals1 Mar '18 T12 Actuals1

INCOME$247,300 $252,514 $547,056

2,735$281,233

86,868

14,951$117,102

6,550

$19,65032,750

Proforma

$373,782

5,6810

$256,769

$112,369

30.81%30.50%

$873 $114,3120

66

$215

per site

$371,081

Actual Exp

2,556

5,516$249,958

0

Financial Analysis

0

$252,514

122,909

30,900236

647 84,707

per site

$143 $18,741Actuals

$368,468

5,140236

663

938

86,86830,900

$247,300

4239

$245,5591,741

$114,312

9,42500

$62,886

$858

42,00011.40%

108

$430

$112,369

0

$56,269

0

$858

042,000

$256,099 $250,130

0

6,02611.32%

$480

33.08%

$123,652

$873

0

72

$547,056

263,088

8,863

0

78 10,232

1. Actual numbers based on financials provided by the client.

2. Proforma GSR = 131 sites x $348 avg lot rent x 12 months (includes a $10 rent increase).

3. Other Income grown 3% from Mar ’18 T12 Actuals. Other income includes late fees, cleaning income, NSF fees, credit card fees and application fees.

4. Option Fee Income includes down payments tenants make on the LTO homes and are not included on the proforma.

5. Net home rent calculated by taking the 2017 Actuals home rental income of $113,496 minus the total home rental expenses of approximately $26,628 (includes R&M after move out, R&M on rentals, R&M Hvac and Bank Fees in 2017 Actuals).

6. Payroll at the community includes 1 manager and 1 maintenance employee. Proforma excludes payroll expenses related to the park-owned home business. See footnote 10 for more details on historical payroll.

7. Adjusted utilities grown 3% from Mar ’18 T12 Actuals.

8. Taxes = 2017 tax bills grown 10%. The tax expense incudes taxes on the real estate only (excludes taxes for the park-owned homes).

9. Historical insurance expense is included in the total insurance expense at Country Valley MHC (see Country Valley financial analysis for more details). Proforma estimates a total insurance expense of approximately $6K per year.

10. Management Fee in the historical numbers consist of payments made to Innovative Property Management, which is a company controlled by the current owner. This expense includes payroll for the park.

11. Numbers do not reflect actual expense.

UNDERWRITING ASSUMPTIONS




FAIRGROVE & SHADY ACRES MHC FINANCIAL ANALYSIS

ROCKINGHAM COUNTY LARGEST EMPLOYERS INDUSTRY EMPLOYEES

Rockingham County Schools Education 1,131

Walmart Associates Retail 1,000+

Rockingham County Finance Office Government 500-999

Unifi Manufacturing Manufacturing 500-999

Morehead Memorial Hospital Healthcare 500-999

MillerCoors LLC Manufacturing 500-999

Frontier Spinning Mills Inc Manufacturing 250-499

Keystone Foods LLC Manufacturing 250-499

Cone Health Healthcare 250-499

ATC Staffing Inc Business Services 250-499

Source: Rockingham Economic Development Corporation

DEMOGRAPHIC INFORMATION 3 MILES 5 MILES 10 MILES

2018 Population Estimate 3,799 12,587 83,847

Population Growth 2010 - 2018 2.9% 7.0% 6.2%

2018 Renter Occupied Housing Percentage 22.3% 22.6% 28.9%

2018 Owner Occupied Housing Percentage 69.1% 70.8% 62.8%

2018 Estimated Average Household Income $69,215 $70,334 $72,242

2018 Estimated Average Owner-Occupied Housing Value $208,832 $209,003 $213,652

Source: U.S. Census Bureau

FAIRGROVESHADY ACRES




FAIRGROVE & SHADY ACRES MHC DEMOGRAPHICS

WINSTON-SALEM

RALEIGH

SHADY ACRES MHC

FAIRGROVE MHC

Annie Penn Hospital

Lake Reidsville

GREENSBORO10

MIL

ES29 MILES

23 MILE

S

46 MILES

65 MILES

DURHAM

HIGH POINT

Piedmont TriadInternational Airport

Greensboro, NC

• Located less than 30 minutes from Fairgrove and Shady Acres, Greensboro is the third most populous city in North Carolina

• Home to many notable attractions including the Wet ‘n Wild Emerald Pointe water park, the Greensboro Science Center, and the International Civil Rights Museum

Piedmont Triad International Airport

• Located 15 miles from the Fairgrove and Shady Acres

• Third busiest airport in North Carolina, averaging 280 takeoffs and landings

each day

Lake Reidsville

• 750 acre lake and park with top-notch facilities available for a variety of events

• Local residents can enjoy boating, skiing, kayaking, camping, disc golf, fishing, duck hunting, and hiking and biking trail




FAIRGROVE & SHADY ACRES MHC AREA ATTRACTIONS

INVESTMENT HIGHLIGHTS

AREA HIGHLIGHTS

• Rare opportunity to acquire a 171-site community less than an hour from Charlotte, NC. Spacious lots averaging about half an acre each, ample off-street parking with all homes set parallel to the street, and mature trees throughout the community give it a high-quality subdivision feel.

• Opportunity to continue home sales program through third party lenders. Seller originally rented most units as pure home rentals but in the last two years has been able to convert 28 homes to sales. Buyer should have an opportunity to continue that program.

• Owner historically has had mostly rental homes and thus focused on keeping the total rents high. This has resulted in lower site rents and a focus on pushing home rents only, which currently average about $370 per month. Thus, lot rents are only $254 per month, which seem below market. There should be a value add opportunity to adjust these allocations over time, which should increase the value of the real estate since the lot rental income trades on a lower cap rate than the home business.

• There are a handful of vacant lots that are in need of homes. Owner believes that once filled, those homes will get occupied either through a sale, lease-to-own, or pure rental.

• The state is responsible for maintaining approximately 80% of the roads in the community.

• As of August 2018, there are 85 community owned homes, 75 of which are occupied. The majority of occupied park-owned homes are being sold as part of a lease-option program where tenants put an average of 10% down and have equity in the home. The park maintains all the park-owned homes.

• Utilities at the community are a mix of public and private. 103 lots are serviced by Country Valley’s wells and septic systems, 50 lots are serviced by public water and sewer, and 18 lots are serviced by Country Valley’s wells and public sewer. There is an opportunity to sub-meter water by submission to the NC Utilities Commission and the addition of meters.

• As of August 2018, 40% of the occupied park-owned homes were doublewides and 60% were singlewides. The average age of the park-owned homes is 1997.

• Claremont is located in the foothills of the Blue Ridge Mountains, just off Highway 16 within one hour of Charlotte, NC – the nation’s 17th largest city.

• Catawba County is home to over 425 manufacturers providing 22,895 jobs – 27% of metro area workforce is employed in the manufacturing sector.

• Progressive Furniture, Inc. recently purchased a 48,000 SF building in the Claremont International Business Park. Located next to their existing manufacturing and warehouse operations, they intend to expand the facility to 108,800 SF. This expansion is expected to create 30 new positions immediately and as many as 100 new positions over the next five years.

• Google, Apple, Bed Bath & Beyond, and Facebook have all established data centers in the county and continue to expand; Apple has invested nearly $5 billion and maintains at least 400 regular employees and permanent contractors on-site.

• Prysmian Group, a world leader in the energy and telecom cable and systems industries, is investing $54 million in its Claremont facility to increase the plant’s capacity by 60% and expects to add 50 new jobs over the next three years.

• Sutter Street Manufacturing, a subsidiary of Williams-Sonoma, is investing $1.5 million to expand its Claremont facility, adding 72 jobs.

• Hickory, NC sits about 20 minutes from the community and is a major employment center in the county. Some of the county’s principal employers operate in and around Hickory including CommScope, Catawba Valley Medical Center, and Corning Cable Systems, among others.

• Recreation opportunities abound in Catawba County with three major lakes (Lake Hickory, Lake Lookout Shoals, and Lake Norman) collectively totaling over 37,000 acres and 830 miles of shoreline.

COUNTRY VALLEY MHC SITE INFORMATION

ADDRESS 1270 Shady Valley Lane, Claremont, NC 28610

COUNTY Catawba

YEAR BUILT 1983 / 1995 / 2008 (built in three phases)

TAX PARCEL IDS Lots are subdivided with individual IDs, ask Broker for detailed list

SITES 171



MH PHYS OCC 87.13% (149 as of Aug ‘18)

MH ECO OCC 81.29% (139 as of Aug ‘18)

INVENTORY HOMES 85 (75 occupied as of Aug '18)

AVG LOT RENT $254

LAST RENT INCREASE $10 (Oct '16); $20 (Oct '17); $20 (Oct ‘18)

ROADS Asphalt

FLOODPLAIN Zone X

ZONING Residential (R-20)




COUNTRY VALLEY MHC PROPERTY DETAILS




COUNTRY VALLEY MHC PROPERTY DETAILS

Setup 1 Setup 2 Setup 3

WATER Public (direct billed)

Well (included in rent)

Well (included in rent)

SEWER Public (direct billed)

Public (rebilled)

Septic (included in rent)

ELECTRICITY Duke Power (direct billed)

TRASH GDS (direct billed)

UTILITIES

Five lots marked as being serviced by Country Valley’s well and septic systems are actually serviced by Country Valley’s wells and public sewer.

2 Gross Scheduled RentGross Potential Income

Less: Vacancy 18.71%

Less: Bad Debt 1.00%3 Total Rental Income 80.29%4 Plus: Utility Income $314 Plus: Other Income 1375 Plus: Option Payments (LTO) 0

Plus: Home Sales 06 Plus: Net Home Rent 677

Total Other Income 846

Effective Gross Income

EXPENSES per site

Repairs & Maintenance $1157 Payroll 400

Administrative 50

Marketing 2

Professional Fees 358 Utilities

Electricity 64

Water/Sewer 93

Total Variable Expenses $7599 Taxes 150

Other Tax 010 Insurance 4711 Management Fee 4.00%

Total Operating Expenses $1,09512 Plus: Capital Reserves 50

Total Expenses $1,145

NET OPERATING INCOME

Expense Ratio

075

0

8,311

5,985

12,81149

$129,82115,450

2 382

0

$187,31723,867

1,94233,297

0

59 10,143391

53

57

9,136

9,791 62 10,646

2

0

2538 434,023

Actuals

$4,454

8,550

115,824

00

Proforma

144,633

2017 Actuals1 Mar '18 T12 Actuals1

INCOME$392,096 $396,714 $563,048

5,630$452,052

8,550

25,592

342

$19,66568,400

$5,386

Proforma

$596,685

$275,851$270,561

33.81%

$539,978

$1,613

90

$144

per site

$815,828

143,514 501

50,800297

1580 270,095

11,786

Financial Analysis

014,908

22,920

$381,806

85,754

$26

$24,705$21,230

Actuals

$823,007

per site

$124

22,740224

1362

442,6972589

232,913839

$5,229

38,300

$396,714$392,096

134133

$31

$380,310

0

0

120,000

0

$275,851

283

$74,14733,290

$1,582

120,00014.58%

195

$411

$270,561

$1,582

45,059264

$70,262

11

0

48,413

32.87%

0

$400,818

8,03714.71%

$434

$552,446

0

$1,613

195

32.83%

$563,048

105,366

$195,867

15,91310,966

23,423

0

125 21,413

1. Actual numbers based on financials provided by the client.

2. Proforma GSR = 171 sites x $269 avg lot rent x 12 months (Includes a $15 rent increase).

3. The increase in revenue from the historical numbers to the proforma is due to occupancy gains and a $20 rent increase assumption.

4. Utility and Other Income grown 3% from 2017 Actuals. Utility Income includes bill backs for 10 lots that have Aqua sewer and Country Valley Water. Other income includes late fees, NSF fees, mowing income, security deposit forfeitures, credit card fees and application fees.

5. Option Fee Income includes down payments tenants make on the LTO homes and are not included on the proforma.

6. Net home rent calculated by taking the 2017 Actuals home rental income of $407,125 minus the total home rental expenses on the 2017 profit and loss statement of approximately $263,611 (includes R&M after move out, R&M on rentals, R&M Hvac and Bank Fees in 2017 Actuals). Additionally, $27,690 in payroll expenses related to the park-owned homes was subtracted from the net home rent line item. The $27,690 is the excess payroll between the trailing numbers ($120,000 in management fees) and the proforma expenses ($68,400 in payroll + $23,910 in management fees).

7. Payroll at the community includes 1 manager/sales employee, 1 assistant manager and 1 maintenance employee. Proforma excludes payroll expenses related to the park-owned home business.

8. Adjusted utilities grown 3% from Mar ’18 T12 Actuals.

9. Taxes = 2017 tax bills grown 10%. The tax expense includes taxes on the real estate only (excludes taxes for the park-owned homes).

10. Historical insurance expense includes expenses for multiple communities. Proforma estimates a total insurance expense of approximately $8K per year.

11. Management Fee in the historical numbers consist of payments made to Innovative Property Management, which is a company controlled by the current owner. This expense includes payroll for the park.

12. Numbers do not reflect actual expense.

UNDERWRITING ASSUMPTIONS




COUNTRY VALLEY MHC FINANCIAL ANALYSIS




DEMOGRAPHIC INFORMATION 3 MILES 5 MILES 10 MILES

2018 Population Estimate 9,603 31,219 101,163

Population Growth 2010 - 2018 3.1% 2.9% 2.9%

2018 Renter Occupied Housing Percentage 26.0% 30.1% 26.6%

2018 Owner Occupied Housing Percentage 65.4% 60.8% 63.9%

2018 Estimated Average Household Income $57,656 $60,160 $63,733

2018 Estimated Average Owner-Occupied Housing Value $167,039 $177,412 $195,285

Source: U.S. Census Bureau

CATAWBA COUNTY LARGEST EMPLOYERS INDUSTRY EMPLOYEES

Catawba County Schools Education & Health Services 1,000+

Catawba Valley Medical Center Education & Health Services 1,000+

GKN Driveline Manufacturing 1,000+

Corning Optical Communications Manufacturing 1,000+

CommScope Manufacturing 1,000+

County of Catawba Public Administration 1,000+

Duke LifePoint/Frye Regional Education & Health Services 1,000+

Walmart Associates Inc Retail 1,000+

Hickory Springs Manufacturing Company Manufacturing 500-999

Target Stores Distribution Center Trade & Transportation 500-999

Source: Catawba County Economic Development Corporation

COUNTRY VALLEY MHC DEMOGRAPHICS




COUNTRY VALLEY MHC

CHARLOTTE

32 MILES

Download 200,000+ brand logos in vector format for freehttp://www.logoeps.com/

Data Center

Catawba Valley Medical Center

Charlotte, NC

• Located about an hour from Country Valley and home to numerous attractions such as the NASCAR Hall of Fame, The Billy Graham Library, and the Carolina Panthers football team

• Charlotte Douglas Airport, used by 45 million passengers in 2017, ranks as the sixth busiest airport in the nation

Valley Hills Mall

• Situated directly off of I-40, it is the only enclosed mall within a 40-mile radius

• Home to over 90 specialty stores and restaurants anchored by Belk, Dillard’s,

Sears, and JCPenney

Catawba Valley Medical Center

• 258-bed hospital with approximately 1,900 employees

• Recently completed a $58 million expansion and renovation of its surgical suites to upgrade existing technology and add three new operating rooms

COUNTRY VALLEY MHC AREA ATTRACTIONS

GREENSBORO

DURHAM

RALEIGH

WINSTON-SALEM

CHARLOTTE

COUNTRY VALLEY MHC

SHADY ACRES MHC

FAIRGROVE MHC

NORTH CAROLINA

NORTH CAROLINASOUTH CAROLINA

NORT

H CA

ROLIN

A

TENN

ESSE

E

VIRGINIA

PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES

Additional information is available on our website at: http://arausa.listinglab.com/NorthCarolinaMHCPortfolio

For a video tour, please visit: https://vimeo.com/290366922

!

This information has been derived from sources deemed reliable. However, it is subject to errors, omissions, price change and/or withdrawal, and no warranty is made as to the accuracy. Further, no warranties or representation shall be made by ARA, A Newmark Company (ARA Newmark) and/or its agents, representatives or affiliates regarding oral statements which have been made in the discussion of the above property. This presentation, prepared by ARA Newmark was sent to the recipient under the assumption that s/ he is a buying principal. Any potential purchaser is advised that s/ he should either have the abstract covering the real estate which is the subject of the contract examined by an attorney of his/her selection, or be furnished a policy of title insurance. Do not contact the Properties.

www.aranewmark.comManufactured Housing and RV Park Group901 S. MoPac Expressway, Barton Oaks Plaza II, Suite 275, Austin, TX 78746 T 512.342.8100

Todd [email protected] 303.260.4470

PRIMARY CONTACTS

Andrew [email protected] 512.637.1219

Joe [email protected] 512.637.1228

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