1. Investment Proposal The Acadia Arlington, Virginia
Morgan Privitte, Will Mu,
Ryan Li, Robin Chen & Jennie Sohn

2. Introduction Another Option: Condominium Development Option 1
Apartments
Option 3
Apartments &
Condominiums
Option 2
Final
Recommendation

3. Property Basic Information Location: Pentagon City, Virginia Type:
Class A Apartment Building
Physical Volume:
411 Units
Site:
91,050 SF
Construction Cost
Land Cost (21%)
$ 32,904,636
Hard Cost (61%)
$ 96,173,519
Soft Cost (14%)
$ 21,801,036
Construction Cost before Debt
$ 150,879,191
Operating Shortfall
$ ,930
Kettler Fee
$ 4,401,815
Construction Cost after Debt
$ 155,408,936

4. Market Analysis Economic Highlights Washington Metro Area, 2013
Payroll Employment: 3.0 million at February 2013.
Job Change: grew 45,739 during Compares to 39,800/year long-term average.
Unemployment Rate: 5.5% at February 2013, down from 5.9% one year ago and
lowest among the nation's largest metro areas.
Inflation: prices increased 1.4% during the 12 months ending March 2013.
Housing Prices: increased 6.00% during the 12 months ending January 2013.
Source: Bureau of Labor Statistics, S&P Case Shiller

5. Apartment Market

6. Condominium Market Source: Delta Association, March 2013
Normalized Range
Inventory
% Of Metro Supply
Years of Supply
The District
339
12%
0.7
Arlington 93 3%
0.6
Alexandria
401
14%
1.6
Fairfax
122 4%
0.5
Loudoun
857
29%
1.7
Prince William
585
20%
1.4
Montgomery
427
15%
0.8
Prince Georges 97
Total
2,921 1
1 Year

7. Development Team JV Partnership During Construction 10% - KETTLER
90% - Lion Properties Fund (Clarion Partners)
After Construction
100% - Lion Properties Fund
(Clarion Partners)

8. Financial Analysis Option1: Apartment
Sensitivity Analysis
Best
Most-likely
Worst
Vacancy Rate
2.5%
4.0%
6.0%
Rent Growth
4.5%
3.5%
2.0%
Expenses Growth
3.0%
Cap Rate
Present Value
$220 M
$177 M
$121 M
IRR
11.4%
8.8%
4.6%
Assumption and Quick Facts
Monthly Average
Rent (2014)
$2.80/SF
Rent Growth
3.5%
Expense Growth 3%
Cap Rate
4.5%
Discount Rate
7.5%
Development Cost
$155,208,367
Present Value
$176,825,895
Operating CF
43.2%
Sales Reversion
56.8%
IRR
8.8%
Payback Period
10 years
Holding Period
IRR

9. Financial Analysis Option 2: Condominium
Selling Pace
10 units/ months
Average Price
$ 524,896 /unit
$ 591 /sq.ft.
Median Price
$ 417,000 /unit
$ 562/ sq.st.
Sale Term
42 months
Pay Back Term
35 months
IRR
35%
ACADIA
RISK & RETURN ANALYSIS
Pay Back Term
60 months
IRR
14%

10. Financial Analysis Option 3: Mix
Condominium
211 Units
Strategy
Pre-sell
10 units/ month
Price
$ 591/ sq.ft.
Proceeds
$104,979,285
Return
IRR
14.4%
Cash Flow
10 years
Liquidity
2/3 of investment
Apartment
200 Units
Strategy
1 year lease up
17 units/ month
10 years holding
Price
$ 2.80/ sq.ft.
Present Value
$ 90,847,740

11. Rent vs. Buy Down payment Rent deposit Closing costs Broker's fee
Buying
Cost
Year 6
Total Cost
Year 1 to 6
Renting
PURCHASE COSTS
INITIAL RENTING COSTS
Down payment
95,911
Rent deposit
2,313
Closing costs
19,182
Broker's fee -
MONTHLY COSTS
$3,779
$2,831
Mortgage payment
1,445
102,829
Rent
2,814
184,105
Condo fees
410
28,084
Renter's Insurance 17
1,105
Property taxes
289
19,323
Maintenance
682
46,738
Homeowner's insurance
954
63,900
OPPORTUNITY COSTS
S&P 500 investment
9,107
35,633
4,117
12,026
SELLING COSTS
LEAVING YOUR RENTAL
22,905
Return of rent deposit
(2,313)
Remaining principal
335,349
Tax on profit
Proceeds from home sale
(572,614)
YEAR 6 TOTALS
$54,458
$197,240
$38,089
$197,236

12. Conclusion Final Recommendation:
Option 1:
Apartments
Option 2:
Condominiums
Option 3:
Apartments &
Pros
Long-term Return
Previous Experience
Low Inventory
Liquidity
Cons
Over Supply
Temporary Revenue
Marketing Risk
Opportunity Cost
Final Recommendation:
Continue with construction as planned.
File application with Arlington County to convert top 9 floors (approx. 200 units) into condos.
Create teams to market the property.
Begin to prelease the apartment units, and presell condominium units.

13. The Acadia Team Will Mu Robin Chen Jennie Sohn Ryan Li Morgan Privitte
Financial Analyst
Robin Chen
Financial Analyst
Jennie Sohn
Property Consultant
Ryan Li
Financial Analyst
Morgan Privitte
Property Consultant

14. Rent vs. Buy Assumptions Median Home Price $479,555 Down Payment 20%
Mortgage Rate
3.5%
Annual Property Tax
0.84%
Monthly Condo Fee
$371
Closing Cost 4%
Term of Mortgage (yrs) 30
Annual Maintenance Cost
1.5%
Homeowner's Insurance Rate
2.0%
Annual Home Appreciation 3%
Annual Rent Increase
Capital Gains Exclusion
$5,000,000
Rate of Return on Investment
Marginal Tax Rate
28%
Inflation Rate 2%
Median Monthly Rent
$2,313
Rent Deposit
Renter's Insurance Rate
0.6%

15. Market Comparable: Apartment

16. Market Comparable: Condos
Condominium
Price
Bed
Sq.Ft.
/Sq.Ft.
Built
Arlington-22202 
3650 S Glebe Rd., #665, Arlington, VA
544,900 2
1200
454
2007
3600 S Glebe Rd., #418W, Arlington, VA
539,900
1242
434
2006
3600 S Glebe Rd., #408W, Arlington, VA
325,000 1
669
485
3600 S Glebe Rd., #606W, Arlington, VA
239,900
411
583
Arlington-All 
1881 N Nash St., #610, Arlington, VA
1,299,555
1800
721
2009
4195 S Four Mile Run Dr., #203, Arlington, VA
383,900
1180
325
1201 N Garfield St., #711, Arlington, VA
589,000
980
601
3650 S Glebe Rd., # 665, Arlington, VA
th St., N, #1505, Arlington, VA
975,000
1396
698
4167 S Four Mile Run Dr., #403, Arlington, VA
381,900
1135
336
888 N Quincy St., #2107, Arlington, VA
792,500
1248
635
2220 Fairfax Dr., #206, Arlington, VA
559,000
1178
474
1800 Wilson Blvd., #438, Arlington, VA
495,000
870
568