Truly Unique Asset – Largest Certified Passive House Apartment Community in the World 

Second + Delaware is currently the largest certified Passive House Apartment Community in the world and is truly built to a different standard! Passive Houses are energy-efficient buildings that can be used for residential, commercial, and industrial purposes, designed to reduce the building’s ecological footprint while cutting heating and cooling costs and lowering maintenance costs. Passive houses do this in multiple ways including higher levels of insulation, superior envelope airtightness, high-performance windows, and more! This means that compared to conventional buildings, it has superior indoor air quality and better thermal comfort, which enables tenants to enjoy a much more comfortable living environment. The energy efficiency throughout the building will lead to increased revenues and lower operating costs over the lifetime of the investment! Tenants also enjoy the peace and quiet of living in Second + Delaware as any outside/neighbor noise is truly deafened by the 16-inch-thick concrete walls! 

Extraordinary 100% Concrete Construction Consuming Between 65% to 90% Less Energy than Comparable Buildings 

Second + Delaware was uniquely designed and boasts 100% concrete construction, built to last over 200 years and to be extremely energy efficient. The building features triple-glazed windows, a green roofing system, LED lighting, and 16-inch insulated pre-cast concrete walls. In addition, there are 760 solar panels, and the HVAC system includes a dedicated outside air system for constant fresh airflow. As a result, the community consumes between 65% to 90% less energy than comparable buildings! This fully concrete structure also will enable new ownership to operate the asset for the long term, with lower insurance costs, and lower maintenance & turn costs compared to stick-built buildings! 

Exceptional Lease Up Speaks to the Asset’s Desirability & Quality – Efficiency & Concrete Construction Result in Quieter Units with Increased Renter Demand 

Second + Delaware delivered in late 2020 and experienced a phenomenal lease-up (during a global pandemic!), achieving stabilization in eight months which equates to a leasing pace of ~34/units per month! The extremely strong lease-up is proof that there is strong demand for sophisticated infill River Market rental communities. 

Significant Upside Through Market Standard Revenue Sources

There is significant upside in revenues across the board at Second + Delaware, including the ability to implement an electric RUB, charging fees for parking stalls on first-generation lease renewals, the ability to implement a bulk Wi-Fi/internet agreement through Google Fiber, and more! Because of the extremely quick lease up at Second + Delaware, these additional revenue items were not and have not been captured just yet but enable new ownership to come in and implement new systems to take advantage of standard market revenues. Second + Delaware is also uniquely positioned with a highly desired product type and class A location, but there is significant room to raise rents as 1st generation leases continue to turn and the River Market continues to grow!

Strategic Location Near KC Streetcar, Retailers, & Highway Connectivity

Strategically located near the new Kansas City Streetcar and intersections of Interstate-35 and Interstate-29, residents of Second + Delaware have quick and easy access to anywhere in the Kansas City metropolitan area. The central downtown location benefits from superior highway connectivity to surrounding Kansas City suburbs, retailers, and employment drivers. The asset is conveniently in the middle of the exploding River Market, which includes numerous restaurants including City Market, The Farmhouse, Habashi House, City Market Coffee, Harry’s Country Club, and more! The property also sits within the Downtown Kansas City Central Business District and features easy access to the Power & Light Entertainment District, and KC Crossroads Entertainment District!

Offered with Attractive Assumable Debt

Second + Delaware is being offered with assumable non-recourse HUD financing with very favorable terms including an original 40-year term offering a 4.23% interest rate, and a current balance of $67,871,200. See debt abstract for salient in-place debt terms on page 36.

Long Term Tax Abatement that Allows for Improved Cash Flow

Second + Delaware benefits from a long-term tax abatement that offers a 100% abatement through 2030 with 50% abatement for an additional 15-year period running through 2045. In the year 2046, property taxes will revert to market Jackson County rates and amounts. The tax savings through the abatement’s life are significant and will help bolster increased cash flows through the new owner’s desired hold period.