CREJ

May 2021 — Multifamily Properties Quarterly — Page 11 www.crej.com TYPE OF CAPITAL SOURCE OF CAPITAL EXPLANATION RATES/SPREADS LTV/COVERAGE TERM AMORTIZATION FOCUS TRENDS LIFE INSURANCE COMPANY • Insurance premiums • Annuity and GIC sales • Non-Recourse • Longer-term fixed rate loan • No structure 150-250 bps over the comparable US Treasuries Rates 2.50%-3.50% • Up to 65% LTV, majority of lenders quoting in the 55%- 60% LTV range 5-30 Years 25-30 Years • Market rate properties in major metro areas • B quality properties and above • Life companies are cognizant of collections and occupancy during COVID-19 • Lowest pricing available for loans with 5-7 year terms • Ability to incorporate flexible prepayment structures for a slight premium to the rate • Additional loan structure tactics such as holdbacks, debt service escrows funded at closing, and partial personal guarantees are more frequently requested on loans with higher leverage or cash-out • Several life companies have loan allocations for properties in lease-up AGENCY • Sales of mortgage- backed securities with implied government guaranty • Non-Recourse • Longer-term fixed rate loan 150-270 bps over the comparable US Treasuries Interest rates are 2.45%-3.65% • Up to 75% LTV, but more appetite for 65%-70% • 1.25x Minimum DCR 5-10 Years 30 Years • Market Rate • Age-Restricted • Affordable/Workforce • Major metro areas • Secondary/Tertiary Markets • C quality properties and above • Agencies are requiring up to 6 months of debt service, taxes, and insurance to be escrowed at closing • Lower end of interest rate range commonly achievable for Borrowers utilizing the Green or Mission Rich agency programs • Partial to full-term I/O is available, depending on leverage • Lowest pricing available for properties with "Mission Rich" programs CONDUIT (CMBS) • Sales of mortgage- backed securities through public markets • Non-Recourse • Longer-term fixed rate loan Rates 3.00% - 3.75% (spreads 200-300) • Up to 70% LTV • 1.25x Minimum DCR • 8.0% Minimum Debt Yield 5, 7 & 10 Years Interestly Only to 30 Years • Market Rate • Second tier properties • Secondary/Tertiary Markets • C quality properties and above • Most competitive at higher leverage in secondary and tertiary markets • Focused on debt yield as an important metric • May incorporate 6 month debt service reserve at closing BANK • Corporate Debt • Deposits • Recourse (some non- recourse available) • Shorter-term fixed and floating rate loans Interest rates range between 3.50% - 4.25% • Up to 70% for term loans • Up to 60-70% for construction loans Up to 7 Years Fixed Interest Only to 25 Years • Market Rate • Age-Restricted • Affordable/Workforce • Major metro areas • Secondary/Tertiary Markets • B quality properties and above • Standards are tightening for Sponsors with no deposit relationship • Small amount of non-recourse available at <55% LTV for existing bank clients • More flexible prepayment penalty options • Some banks reserving capital for existing relationships only DEBT FUND / BRIDGE LOAN • Private Capital • Institutional Capital • Non-Recourse • Shorter term bridge loans for acquisition and/or repositioning LIBOR + 275 - 450 bps (0.25%-0.50% LIBOR floors) • up to 80% LTC • Going-in 1.0x DCR 1 - 5 (3+1+1) Interest Only • Market Rate • Secondary/Tertiary Markets • C quality properties and above • Pricing depends on leverage, property quality, existing cash flow, sponsor strength, and capital source • Debt funds have lowered spreads substantially to compete on top product with strong sponsors. • Internal allocations for multi-family have increased for 2021 due to impacts of COVID during 2020. • Lender fees are typically 0.75-1.00% upfront, 0.50% at exit LIBOR - London Interbank Offered Rate REIT - Real Estate Investment Trust This information is intended to illustrate some of the lending options currently available. Other options may exist. While Essex Financial Group strives to present this information as accurately as possible, no guarantee is made as to the accuracy of the data presented, or the availability of the terms at time of application. Rates and terms are subject to change. Please contact one of our mortgage bankers for up to date rate and term information. Essex Financial Group | 1401 17th Street, Suite 700 | Denver, CO 80202 | www.essexfg.com DCR - Debt Coverage Ratio DUS - Delegated Underwriter Servicer LTV - Loan to Value Ratio LTC - Loan to Cost Ratio Essex Financial Group - Recent Multifamily Transactions 1025 Julian Denver, CO $2,570,000 Permanent Loan Agency Prescott Apartments Denver, CO $10,500,000 Permanent Loan Life Insurance Company Irving Row Denver, CO $2,837,000 Permanent Loan Agency J EFF R IGGS F OUNDER AND C HAIRMAN (303) 843-0440 JRIGGS @ ESSEXFG . COM C OOPER W ILLIAMS P RESIDENT (303) 843-4581 CWILLIAMS @ ESSEXFG . COM P ETER K EEPPER M ANAGING P RINCIPAL (303) 843-6002 PETERK @ ESSEXFG . COM M IKE J EFFRIES P RINCIPAL (303) 843-9220 MJEFFRIES @ ESSEXFG . COM A LEX R IGGS VP OF L OAN P RODUCTION (303) 843-4027 ARIGGS @ ESSEXFG . COM P AUL D ONAHUE A SSISTANT VP (303) 843-4021 PDONAHUE @ ESSEXFG . COM J ARED W IEDMEYER A SSISTANT VP (303) 843-4022 JWIEDMEYER @ ESSEXFG . COM B LAIRE B UTLER A SSISTANT VP (303) 843-4024 BBUTLER @ ESSEXFG . COM Multifamily Properties Quarterly - Financing Sources Matrix