| 10/08/2009: - Per borrower reports, occupancy has increased from 89% on 12.31.07 to current rates and average rates have increased from $1,188.30/unit on 12.31.07 to $1,577.50/unit currently. This A1 Note has a Base Building Improvement Reserve with a balance of $18,986,684.00 and no monthly constant. All reserves are held at another financial institution. Servicer has obtained an inspection report from a third party vendor to gauge progress of renovation. Progress is 56.7% complete. Per borrower reports, occupancy has increased from 89% on 12.31.07 to 92.4% on 12.31.08 and average rates have increased from $1,188.30/unit on 12.31.07 to $1,414.44/unit currently. NCF DSCR has decreased from underwriting due to effective gross income decreasing 34% ($21,560,000-$14,286,000), and increasing 14% ($12,537,000-$14,286,000) from prior year. Effective gross income has decreased from underwriting due to other income decreasing 39% ($1,119,000-$685,000), and 3% ($707,000-$685,000) from prior year. Per borrower, they are currently marketing through the internet and analog media. Concessions are being offered on select units to drive traffic. The current market rates for renovated units are $33.55 psf and $26.79 psf for unrenovated units. To lower expenses they are currently rebidding every contract and reducing downtime during turnover.
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