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<br /> <br /> <br /> <br />Hillside Heights Apartments, Elk River, Minnesota <br /> <br />Market Analyst Professionals, LLC 71 April 24, 2020 <br />Market and Achievable Rent <br />Market and achievable rents for the subject are illustrated below. These rents were estimated based <br />on competitive positioning of the project in the area. An analysis utilizing both LIHTC and market rents is <br />presented on the following pages to help illustrate the competitive positioning of the subject and its <br />positioning as a hypothetical market rate project and in comparison to similar LIHTC projects. Rents are <br />adjusted based on appeal (including location, amenities and unit design), included utilities, unit size and <br />where applicable by maximum allowable gross and a minimum 10 percent market advantage when <br />evident within the market. Rents are projected to market entry based on 3.5 percent annual appreciation. <br />Site location, condition and appeal scores are relative to the subject (i.e., the subject is always rated as 5). <br />Based on these analyses proposed contract rents are consistent with estimated achievable LIHTC rent and <br />significantly discounted from hypothetical market rents. <br /> <br /> Estimated LIHTC and hypothetical market rent represent an assessment of what a comparable <br />unit is receiving within the market. It is not an endorsement of rent at that level as the project was <br />analyzed considering contract rent. Changes in contract rent will impact absorption, demand statistics and <br />competitive positioning of the proposal and would necessitate additional analysis. <br /> <br />Rent Derivation <br />Proposed <br />AMI <br />Target <br />Proposed <br />Subject <br />Contract <br />Rent <br /># of Units # of Baths <br />Average Sq. <br />Footage <br />Estimated <br />Achievable Contract <br />Rent <br />Max Achievable <br />LIHTC Rent <br />Estimated <br />Achievable <br />Market Rent <br />Market <br />Advantage <br />Summary 1 BR <br />1 BR-Apt 30% $722 4 1.0 680 $557 $520 $1,351 47% <br />1 BR-Apt 50% $908 3 1.0 680 $973 $908 $1,351 33% <br />1 BR-Apt 50% $722 4 1.0 680 $973 $908 $1,351 47% <br />1 BR-Apt 60% $1,102 2 1.0 680 $1,177 $1,102 $1,351 18% <br />Summary 2 BR <br />2 BR-Apt 50% $1,083 14 1.0 980 $1,160 $1,083 $1,609 33% <br />2 BR-Apt 60% $1,316 14 1.0 980 $1,354 $1,316 $1,609 18% <br />Summary 3 BR <br />3 BR-Apt 50% $1,246 7 2.0 1,280 $1,335 $1,246 $1,917 35% <br />3 BR-Apt 60% $1,515 7 2.0 1,280 $1,519 $1,515 $1,917 21% <br /> <br /> <br />