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housing industries and local and general economic conditions. The financial forecast, which <br /> appears in Appendix C should be read in its entirety <br /> Market Study <br /> The ultimate success of the Project and the future sufficiency of revenues to timely <br /> pay all debt on the Series 2001 Bonds and Operating Expenses is dependent on the existence <br /> of adequate tenant demand for units in the Project at anticipated rental rates. The speed at <br /> which the Project's units are initially filled following completion is critical, as well as <br /> maintenance of the long-term occupancy levels of the Project. The projections of the <br /> Project's cash flow set forth in Appendix C hereto assume certain periods for the Project's <br /> initial fill-up, rental rates and occupancy levels. Such assumptions, in turn, are based on <br /> recommendations from Maxfield Research,Inc. ("Maxfield")who prepared a market study <br /> for the Project(the "Market Study"). According to Maxfield, the recommendations in the <br /> Market Study reflect a conclusion by Maxfield that an immediate need exists for the <br /> recommended facilities, without the expression of an opinion as to long-term need. See <br /> Appendix B under the heading"The Project-Market Area and Competition"and Appendix <br /> D for a summary of the Market Study. <br /> The revenue assumptions of the Borrower in the projections of operations are based <br /> on the recommendations contained in the Market Study. Further, the Borrower believes <br /> Maxfield is experienced and reputable in its field. Nevertheless, the conclusions of the <br /> Market Study reflect only the opinions of Maxfield and are no guarantee that actual demand <br /> exists or will continue to exist to support the assumptions of the Borrower. ACTUAL <br /> LEASE-UP AND OCCUPANCY OF THE PROJECT FACILITIES IN THE FUTURE <br /> WILL VARY FROM CONCLUSIONS IN THE MARKET STUDY,WHICH VARIANCE <br /> MAY BE MATERIAL AND ADVERSE. IF, AMONG OTHER THINGS, INITIAL <br /> LEASE-UP OF THE PROJECT FACILITIES IS MATERIALLY SLOWER OR RENTAL <br /> RATES ARE MATERIALLY LESS THAN ASSUMED BY THE SELLER AND THE <br /> BORROWER BASED ON THE MARKET STUDY,REVENUES WILL BE LESS THAN <br /> PROJECTED, AND PERHAPS MATERIALLY LESS. <br /> Risks of Subordinate Bonds ' <br /> THE SUBORDINATE BONDS ARE SPECULATIVE SECURITIES AND ARE <br /> SUBJECT TO CERTAIN ADDITIONAL RISKS. PROSPECTIVE PURCHASERS OF <br /> SUBORDINATE BONDS SHOULD MAKE SUCH INVESTIGATIONS AND OBTAIN <br /> SUCH ADDITIONAL INFORMATION DIRECTLY FROM THE BORROWER AND <br /> OTHERS AS THEY DEEM ADVISABLE IN CONNECTION WITH THEIR <br /> EVALUATION OF THE SUITABILITY OF THE SUBORDINATE BONDS FOR <br /> INVESTMENT. <br /> BEFORE PURCHASING ANY OF THE SUBORDINATE BONDS, <br /> PROSPECTIVE INVESTORS AND THEIR PROFESSIONAL ADVISORS SHOULD <br /> CAREFULLY CONSIDER, AMONG OTHER THINGS, THE ABOVE AND THE <br />