1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW

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1 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW

2 Table of Contents 2 United States Multihousing Market Overview 3 Executive Summary 4 Historical Sales Volume 5 Historical Pricing 6 Historical Supply and Demand 7 Employment Growth 8 Multifamily MetroView by Cantor Fitzgerald 9 Select Market Fundamentals 10 Capitalization Rates by Market 11 Price Per Unit by Market 12 Rent Growth Markets 13 Top Regional Buyers 14 Buyer Breakdown 15 Seller Breakdown 16 Homeownership Rate Trends 17 Historical Rent vs. Inflation 18 Student Housing Market Snapshot 19 International Capital Distribution 20 International Capital - Yield Advantage of Multihousing 21 Price Per Unit by Vintage 22 Mortgage Debt Outstanding 23 Lender Composition 24 Mortgage Maturities 25 Notable Investment Sales 26 Properties on the Market 27 Select Market Statistics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 2

3 Executive Summary Robust demand and strong underlying fundamentals acted as catalysts for multihousing in 2015 as transaction volume surged to $150 billion. There remained a strong appetite to place capital in both core and value-add opportunities, even as cap rates held steady. Gateway cities continue to attract the strongest demand. However, price resistance in coastal markets has driven investors to growth markets with lower cost of living and high employment, such as Atlanta and Dallas. Pricing for new supply nationally is trading at a significant premium relative to older product, up 16.6% year-over-year. Developers continued to aggressively enter the multihousing market, as Forest City, Holland Partner Group, JBG Companies and Mill Creek Residential have significantly expanded their portfolios over the past year. Nonfarm employment increased by at least 50,000 jobs in 19 states year-over-year, with sizable upticks in markets such as Orlando, Austin and San Jose. The Sunbelt has remained attractive due to strong employment and population growth. Nearly 42,000 units were delivered nationally in 1Q16, however the National Multihousing Council estimates nearly 300,000 to 400,000 units will be needed to meet annual demand. Even with new supply entering the market, several western markets such as Denver, San Francisco, Seattle and Portland have experienced sizeable year-over-year rent growth. Tightness in Houston s single family market combined with the Panama Canal opening in 2017 will bolster job growth and create value in the multihousing market. Outstanding multihousing debt rose 9.3% year-over-year to $1.1 trillion, up from $996.4 billion in REITs expanded their debt holdings 30.5% in 2015, potentially reversing a trend of minimal activity in prior years. 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 3

4 Billions Historical Sales Volume Quarterly Totals Transaction volume surged to an all-time high of $150.0 billion in 2015, fueled by robust demand and strong underlying market fundamentals. Sales volume in 1Q16 hit $36.4 $60 $50 $40 billion, increasing marginally yearover-year after experiencing record inflows of $55.8 billion in 4Q15. Garden style properties continued to be favored by investors, accounting for $23.1 billion of total volume in 1Q16, representing a 63.4% share. Positive momentum in the student $30 housing sector has carried into early 2016, as transaction volume has risen 53.7% year-over-year. $20 Current Distribution by Type 6.6% $ % 63.4% $ Garden Mid/Highrise Student Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 4

5 Historical Pricing Price Per Unit vs. Cap Rates Cap rates remained flat over the past 24 months while pricing has appreciated 23.1%, reflecting NOI growth at the property level. $200,000 $175,000 $150, % 8.0% 7.0% National cap rates compressed 10 basis points in 1Q16 following six consecutive quarters of no change. Price per unit rose to $181,270 nationally in 1Q16, an 8.8% yearover-year increase. $125,000 $100,000 $75,000 $50,000 $25,000 $0 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Regional Statistics Region Cap Rate PPU Mid-Atlantic 5.5% $187K Midwest 6.1% $136K Northeast 4.7% $386K Southeast 6.0% $127K Southwest 5.7% $145K West 5.2% $218K Price Per Unit Cap Rates Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 5

6 Historical Supply and Demand Annually Completed Units vs. Vacancy Rates Vacancy rates increased 10 basis points to 4.5% nationally during 1Q16, the third consecutive quarter of measured escalation. 250, % There were 41,769 units delivered nationally in 1Q16, the highest first quarter delivery total since , , ,000 50, % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% The National Multihousing Council (NMHC) estimates nearly 300,000 to 400,000 units will be needed to meet annual demand. Approximately 231,775 units are expected to be delivered throughout 2016, with the vacancy rate projected to reach 4.7%. Rising rents have helped support over 200,000 units delivered to the market over the past 12 months. 1.0% % Annually Completed Units Vacancy Rate Source: Newmark Grubb Knight Frank Research, REIS 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 6

7 Employment Growth Following The Jobs 35 states have experienced significant nonfarm employment growth over the past 12 months, with 19 states adding at least 50,000 jobs or more. Apartment investors have flocked to where the most jobs are being created, as transactions in New York, Georgia, Florida, Texas and California combined to account for 96, % of the total multihousing volume over the past 12 months. 55,300 90, ,300 67,100 The completion of the Panama Canal expansion is expected to generate long-term employment 65,700 51,000 78,700 53,300 59,800 growth several markets including Charleston and Houston. 451,600 63,000 96,500 Job Growth in Large Metros Metro Area Year-Over-Year 77,500 89,300 86,700 Orlando 4.9% Austin 4.7% San Jose 3.8% 116,000 Phoenix 3.6% 170,900 San Francisco 3.6% Atlanta 3.5% 243,200 Dallas 3.4% Portland 3.1% 100,000 or greater 50,000 to 99,999 Seattle 3.0% Miami 2.9% Source: Newmark Grubb Knight Frank Research, US Bureau of Labor Statistics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 7

8 Multifamily MetroView By Cantor Fitzgerald The Sunbelt has remained attractive due to strong employment and population growth. Cantor Fitzgerald Proprietary Market Rankings Multifamily REITs Year-to-date multifamily REITs have returned -0.5% and are currently trading at an implied cap rate of 5.0%. Home Affordability San Jose, San Francisco, San Diego, Los Angeles and Miami are the top markets skewed in favor of renters. Rank Las Vegas Orlando Fort Worth 2 Sacramento Jacksonville Las Vegas 3 San Bernardino/ Riverside Las Vegas Orlando 4 Orlando Phoenix Phoenix 5 Oakland-East Bay Fort Worth Denver Supply Supply in 2016 and 2017 is expected to remain higher at 2.3% and 1.5%, while supply in 2018 at 0.9% is lower than the historical average Employment and Population 2.1% job growth, 1.1% population growth and 1.9% growth in household formation is expected in Jacksonville Raleigh/Durham Raleigh/Durham 7 Phoenix San Bernardino/ Riverside San Diego 8 San Diego Palm Beach Houston 9 Palm Beach San Diego San Antonio 10 Los Angeles Sacramento Sacramento Model is based on variables including employment, population, home affordability, supply, rent growth, vacancy, rent to own ratio, home prices, household income and household formation. For important disclosures on the companies mentioned, contact Cantor Fitzgerald Research Department at 110 East 59th Street, New York, NY or Source: Newmark Grubb Knight Frank Research, Cantor Fitzgerald Research 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 8

9 Price Per Unit Select Market Fundamentals Institutional Quality Pricing Matrix In 1Q16, San Francisco surpassed Manhattan in terms of pricing, although Manhattan still has the lowest cap rates in the country. $700,000 San Francisco $600,000 $500,000 Manhattan $400,000 Los Angeles Boston Miami Washington DC $300,000 Seattle Chicago Denver Philadelphia $200,000 Portland Dallas Orlando $100,000 Austin Atlanta Charlotte Houston $0 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% Cap Rate Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 9

10 Capitalization Rates Institutional Quality Average SEATTLE 4.4% PORTLAND 5.0% BOSTON 4.5% SAN FRANCISCO 3.9% SACRAMENTO 5.3% SAN JOSE 4.2% LAS VEGAS 5.5% SALT LAKE CITY 5.4% DENVER 5.0% WICHITA 6.1% MINNEAPOLIS 5.4% KANSAS CITY 5.5% ST. LOUIS 5.7% CHICAGO 4.9% INDIANAPOLIS 5.8% DETROIT 6.2% CLEVELAND 6.4% LOUISVILLE 5.8% COLUMBUS 5.8% CINCINNATI 6.0% WASHINGTON DC 4.9% RICHMOND 5.9% NORFOLK 5.8% MANHATTAN 3.7% PHILADELPHIA 5.1% LOS ANGELES 4.2% SAN DIEGO 4.6% PHOENIX 5.3% ALBUQUERQUE 6.1% OKLAHOMA CITY 5.6% TULSA 5.8% LITTLE ROCK 6.0% MEMPHIS 5.7% NASHVILLE 5.5% BIRMINGHAM 6.3% ATLANTA 5.2% CHARLOTTE 5.3% CHARLESTON 5.5% RALEIGH/DURHAM 5.3% DALLAS 5.2% JACKSONVILLE 5.8% SAN ANTONIO 5.6% AUSTIN 5.0% HOUSTON 5.6% NEW ORLEANS 6.9% TAMPA 5.6% ORLANDO 5.5% PALM BEACH 5.2% * Based on transactions $25 million and greater. MIAMI 4.7% Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Costar 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 10

11 Price Per Unit Institutional Quality Average SEATTLE $317K PORTLAND $203K BOSTON $422K SAN FRANCISCO $642K SACRAMENTO $191K SAN JOSE $506K LAS VEGAS $124K SALT LAKE CITY $129K DENVER $228K WICHITA $91K MINNEAPOLIS $250K KANSAS CITY $139K ST. LOUIS $205K CHICAGO $304K DETROIT $147K CLEVELAND $59K INDIANAPOLIS $158K LOUISVILLE $121K COLUMBUS $78K CINCINNATI $130K WASHINGTON DC $428K RICHMOND $114K NORFOLK $152K MANHATTAN $545K PHILADELPHIA $259K LOS ANGELES $401K SAN DIEGO $258K PHOENIX $177K ALBUQUERQUE $105K OKLAHOMA CITY $135K TULSA $120K LITTLE ROCK $120K MEMPHIS $92K NASHVILLE $163K BIRMINGHAM $102K ATLANTA $155K CHARLOTTE $149K CHARLESTON $131K RALEIGH/DURHAM $166K DALLAS $161K JACKSONVILLE $129K SAN ANTONIO $151K AUSTIN $146K HOUSTON $150K NEW ORLEANS $78K TAMPA $152K ORLANDO $158K PALM BEACH $223K * Based on transactions $25 million and greater. MIAMI $400K Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Costar 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 11

12 Rent Growth Markets Year-Over-Year Change Of the 20 markets with the fastest rising rents, half are in the western region. Rent growth nationally rose 4.6% year-over-year. 10% 9.7% 8% 7.9% 7.4% 7.4% 6.8% 6.6% 6.5% 6.5% 6% 5.8% 5.7% 5.7% 5.5% 5.5% 5.4% 5.2% 5.0% 5.0% 4.7% 4.7% 4.6% 4% 2% 0% Source: Newmark Grubb Knight Frank Research, REIS 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 12

13 Top Regional Buyers Past 12 Months Large portfolio and entity-level purchases by Blackstone, Starwood Capital and Lone Star have made them top buyers throughout several regions. West Southwest Midwest Southeast Mid-Atlantic Northeast Company Volume Company Volume Company Volume Company Volume Company Volume Company Volume TruAmerica Multifamily $1.2 B Starwood Capital Group $2.3 B Brookfield Asset Management $536 M Starwood Capital Group $3.5 B Lone Star $4.8 B Blackstone $3.2 B Guardian Life Insurance Co $1.1 B Blackstone $543 M Harrison Street Real Estate $521 M Brookfield Asset Management $793 M Starwood Capital Group $973 M Ivanhoé Cambridge $2.7 B Blackstone $1.1 B Steadfast Apartment REIT $496 M Lone Star $510 M Carroll Organization $672 M UDR $900 M Lone Star Funds $2.2 B Starwood Capital Group $734 M Harrison Street Real Estate $454 M Invesco Real Estate $336 M Cortland Partners $534 M Brookfield Asset Management $655 M Akelius Residential $726 M Maximus Real Estate Partners $655 M Milestone Apartment REIT $397 M The Connor Group $276 M Independence Realty Trust $515 M CBRE Global Investors $437 M Fairstead Capital $692 M Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 13

14 Buyer Breakdown Institutions have increased their holdings in 1Q16, while international capital greatly expanded their purchases throughout Top Buyers (Past 12 Months, $ Millions) 100% 80% 4.9% 5.2% 5.1% 2.1% 2.5% 3.2% 23.6% 23.6% 34.9% 12.6% 0.8% 26.6% 6.6% 3.3% 40.7% Blackstone Lone Star Starwood Capital Group Ivanhoé Cambridge Brookfield Asset Management Greystar Real Estate Partners TruAmerica Multifamily $2,588 $1,534 $1,415 $9,645 $7,738 $7,585 $5,633 60% Guardian Life Insurance $1,378 UDR $1,168 40% 50.4% 49.2% 60.0% 55.3% 43.7% Strata Equity Group Invesco Real Estate FPA Multifamily CBRE Global Investors Heitman $975 $963 $925 $886 $864 20% Steadfast Apartment REIT $858 0% 19.5% 7.7% 8.1% 4.7% 5.7% YTD Cortland Partners Carroll Organization TIAA-CREF Intercontinental Real Estate $830 $802 $784 $783 Public/REITs Private Institutional User/Other International Akelius Residential $725 Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 14

15 Seller Breakdown The top sellers all participated in outsized portfolio and entity-level transactions, however more one off transactions are expected in Top Sellers (Past 12 Months, $ Millions) 100% 80% 12.5% 3.3% 4.3% 3.4% 3.1% 3.0% 2.2% 1.3% 3.8% 5.1% 15.6% 26.1% 26.6% Home Properties Equity Residential CWCapital Greystar Real Estate Partners Associated Estates $2,770 $2,607 $5,915 $7,023 $8, % 38.5% Landmark ATA Fairfield Residential $2,001 $1,198 60% Holland Partners $1, % Ares Management $1,051 Blackstone $1,018 40% 56.4% 57.1% Invesco Real Estate Brookfield Asset Management $992 $ % 43.7% AvalonBay Communities $919 Berkshire Group $882 20% 29.8% TIAA-CREF Bell Partners $831 $825 0% 9.7% 8.5% 11.5% 5.3% YTD AIG Wood Partners Carlyle Group $777 $768 $707 Public/REITs Private Institutional User/Other International Harbor Group International $698 Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 15

16 Homeownership Rate Trends United States Homeownership increased slightly over the past two quarters but remain 15 basis points below the longterm average as renters continue to enter the market. After trending downward since 70% 68% 66% [Long-Term Average = 65.3%] 2Q04, the homeownership rate bottomed in 2Q15 and has risen over the past two quarters to 63.8%. The S&P/Case-Shiller national home price index rose 5.4% over the past 12 months while the median sales price for new houses sold increased to $301, % 62% 60% 63.8% In 2015, renter households surpassed growth during any previous 10-year period. Renter Household Growth by Age Age 10 Year 20 Year Under % 12.3% 35 to % 4.7% 58% Homeownership Rate Long-Term Homeownership Rate Average 45 to % 29.6% 55 to % 113.3% 65 and Over 86.5% 14.5% Source: NGKF Research, US Census Bureau, Standard & Poor s, Joint Center for Housing Studies of Harvard University 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 16

17 Historical Rent vs. Inflation Asking rents maintained steady growth while inflation trended downward, allowing multifamily landlords to take advantage of the divergence. Asking rent growth outperformed 10% 8% 6% 4% 2% [Long-Term Average = 2.2%] inflation by 450 basis points in 2015, marking the largest spread in a decade. Since 2005, the 10-year United States Consumer Price Index average has hovered at 2.2%, while 10-year asking rent growth averaged 2.8% during the same period. Asking rent are projected to increase 4.2% nationally in 2016 following 4.6% growth in % % -4% Asking Rent Growth U.S. Consumer Price Index 10 Year U.S. Consumer Price Index Average Source: Newmark Grubb Knight Frank Research, Costar, REIS, Federal Reserve Bank of St. Louis 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 17

18 Billions Student Housing Market Snapshot Large transactions continue to institutionalize the sector, as shown by the recent $1.4 billion portfolio joint venture between CPP, GIC and Scion. $7 $6 10.0% 8.0% Cap rates have remained steady at 5.7% for six consecutive quarters. Year-over-year sales volume has risen 48.7% with approximately $2.9 billion of deals pending. $5 $4 6.0% 80% YOY Sales Volume Growth 70% 67.3% $3 4.0% 60% 50% 54.5% 46.8% $2 40% 33.9% 38.6% $1 2.0% 30% 20% 10% $0 0.0% % 1Q15 2Q15 3Q15 4Q15 1Q16 Sales Volume Cap Rate Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 18

19 International Capital Distribution Past 12 Months Canadian groups continue to dominate international investment into multihousing. TOP 20 BUYERS Ivanhoé Cambridge Canada $5.7 B Brookfield Asset Management Canada $2.6 B GIC Singapore $1.4 B China 5.2% Sweden 4.1% UK 3.8% Mexico 3.4% Bahrain 2.8% Switzerland UAE 2.6% 2.2% Qatar 2.1% Other 4.8% CPP Investment Board Canada $1.4 B Akelius Residential Sweden $726.0 M Investcorp Bahrain $506.6 M ADIA UAE $398.0 M Qatar Investment Authority Qatar $381.7 M Venterra Properties Canada $361.1 M Starlight Investments Canada $359.9 M Grosvenor UK $346.2 M Kuafu Properties China $303.4 M Pure Multi-Family REIT Canada $290.3 M Ergas Group Canada $274.2 M Shanghai Construction Group China $260.8 M Balfour Beatty UK $239.9 M UBS Switzerland $238.9 M Zurich Financial Switzerland $219.6 M H&R REIT Canada $189.4 M Nicola Crosby Canada $155.0 M Canada 69.0% Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 19

20 International Capital Yield Advantage of Multihousing Country Total Volume into United States Real Estate (Past 12 Months) Domestic 10-Year Government Bond Yield Yield Advantage of United States Multihousing (Multihousing Cap Rate = 5.5%) Top Market Destinations by Sales Volume (Past Five Years) Canada $27.9 B 1.26% 424 Basis Points Manhattan 30.0% Dallas 6.9% Phoenix 6.3% China $20.4 B 1.23% 427 Basis Points Manhattan 34.9% Houston 21.2% Northern NJ 11.1% Singapore $8.1 B 2.09% 341 Basis Points Phoenix 11.5% Orlando 10.3% Atlanta 9.4% Germany $4.4 B 0.31% 519 Basis Points Boston 7.3% Atlanta 5.1% Austin 4.6% South Korea $3.2 B 1.86% 364 Basis Points Los Angeles 18.5% Houston 12.6% Denver 12.3% Switzerland $3.0 B -0.33% 583 Basis Points Suburban VA 19.4% Los Angeles 9.2% Raleigh/Durham 7.2% United Kingdom $2.6 B 1.45% 405 Basis Points Dallas 17.7% Seattle 12.8% San Jose 8.6% Japan $1.1 B -0.06% 516 Basis Points Los Angeles 21.1% East Bay 14.5% Seattle 13.9% Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Bloomberg 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 20

21 Price Per Unit by Vintage Year-Over-Year Change Prices on a per unit basis have increased in the Southeast and Southwest regions each of the past five decades. UNITED STATES % 13.6% 13.4% 7.7% 16.6% Mid-Atlantic Midwest Northeast Southeast Southwest West % 1.6% (31.1%) 6.8% 17.9% 10.1% % (4.4%) 47.2% 7.1% 19.0% 12.1% % 2.9% 6.3% 8.9% 28.6% 0.5% % 39.4% (3.5%) 10.1% 14.5% (8.3%) (12.4%) 13.9% 44.9% 11.6% 13.0% 23.0% Source: Newmark Grubb Knight Frank Research 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 21

22 Billions Mortgage Debt Outstanding United States Debt outstanding increased 9.3%, year-over-year to $1.1 trillion from $996.4 billion in Mortgage debt outstanding rose $39.6 billion quarter-over-quarter, a 3.7% increase. $1,200 $1,000 $1,098.8 REITs expanded their debt holdings 30.5% in 2015, potentially reversing a trend of minimal activity in prior years. $800 $ % 5.6% 3.9% $632.5 $ % Current Multihousing Debt Holders 43.4% $ % $200 GSE Banks & Thrifts State & Local Gov't CMBS Life Insurance Other $ Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Mortgage Bankers Associates 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 22

23 Lender Composition 2016 Year-to-Date Bank and life insurance companies continue to provide significantly liquidity to the markets. 100% 80% 60% 40% 2.0% 2.8% 1.5% 1.2% 9.2% 9.4% 14.6% 22.3% 9.4% 7.3% 0.8% 11.0% 1.9% 4.8% 8.8% 2.8% 6.8% 13.6% 4.6% 5.4% 55.7% 52.6% 47.7% 39.5% 3.8% 2.5% 1.3% 1.4% 1.6% 1.1% 6.9% 10.3% 7.6% 12.9% 10.9% 10.3% 7.1% 9.2% 4.7% 1.2% 33.6% 2.8% 2.9% 3.3% 8.3% 5.4% 7.5% 6.7% 18.7% 2.0% 8.6% 9.7% 5.1% 3.8% 51.1% 46.7% 56.2% 59.9% 47.3% 32.3% 20% 0% 7.9% 9.4% 12.1% 10.4% 9.1% 10.1% 8.4% 12.9% 7.8% 5.8% 13.0% 8.5% 6.1% 6.4% 3.2% 3.8% 5.9% 8.1% 7.7% 2.9% United States Six Major Metros Secondary Markets Tertiary Markets Northeast Mid-Atlantic Southeast Midwest Southwest West CMBS Financial Gov't Agency Insurance Int'l Bank Nat'l Bank Reg/Local Bank Private/Other Source: Newmark Grubb Knight Frank Research, Real Capital Analytics 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 23

24 Billions Mortgage Maturities United States $120 $100 Approximately $214.1 billion of mortgages will mature in 2016 and Breakdown Bank: $23.9 B (23.4%) CMBS: $15.7 B (15.4%) Insurance: $4.3 B (4.2%) Other: $58.2 B (56.9%) Total: $102.2 B * Other includes Fannie Mae, Freddie Mac, bridge loans and hard money loans. $80 $59.0 $53.2 $54.6 $54.8 $57.6 $60.4 $56.5 $50.4 $60 $42.8 $40 $20 $4.0 $10.6 $31.9 $3.8 $3.9 $10.7 $15.8 $29.0 $26.6 $4.4 $4.3 $21.0 $15.5 $23.6 $25.9 $4.2 $4.2 $31.5 $4.0 $4.0 $5.0 $3.6 $36.9 $36.8 $3.9 $3.7 $29.9 $35.7 $3.7 $2.9 $21.8 $30.2 $3.5 $2.9 $14.8 $ Bank CMBS Insurance Companies Other Source: Newmark Grubb Knight Frank Research, Trepp 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 24

25 Notable Investment Sales Recently Completed by ARA Newmark Watermark at Southlands Aurora, CO Crescent Cool Springs Nashville, TN Village at Baldwin Park Orlando, FL The Pointe at Chapel Hill Chapel Hill, NC The Shelby Alexandria, VA Blue Horseshoe Portfolio Various Address: East Applewood Drive Buyer: Braddock & Logan Seller/Client: Watermark Residential Price/Price Per Unit: $78.0 million/$260,000 Cap Rate: 5.0% Units: 300 Year Built: 2015 Address: 200 Resource Parkway Buyer: Simpson Housing LP Seller/Client: Crescent Communities Price/Price Per Unit: Confidential Cap Rate: 4.9% Units: 252 Year Built: 2014 Note: Highest price per unit for a suburban garden style property in Tennessee Address: 2055 Lake Baldwin Lane Buyer: Preferred Apartment Communities Seller/Client: Morgan Group Price/Price Per Unit: $110.8 million/$209,745 Cap Rate: 4.5% Units: 528 Year Built: 2008 Address: 100 Saluda Court Buyer: The Connor Group Seller/Client: TIAA Price/Price Per Unit: $39.3 million/$163,750 Cap Rate: 4.2% Units: 240 Year Built: 2000 Address: 6200 North Kings Highway Buyer: PASSCO Companies Seller/Client: Insight Property Group Price/Price Per Unit: $69.5 million/$289,583 Cap Rate: 5.0% Units: 240 Year Built: 2014 Address: Various cities including Houston, Corpus Christi, Austin, Charlotte and Birmingham Buyer: Private Buyer Seller/Client: Central Region Family Office Price/Price Per Unit: Confidential Units: 3,382 Year Built: Note: The buyer plans for a significant value add program over the next 24 months and expects to hold the property for years Source: Newmark Grubb Knight Frank Research 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 25

26 Properties on the Market Currently Available via ARA Newmark The Pointe At Lenox Park Atlanta, GA 5 West Tampa, FL 7900 at Park Central Dallas, TX Berkshire SoCo Austin, TX AMLI at the Medical Center Houston, TX Metro Six55 Hayward, CA Address: 1900 North Druid Hills Road Address: 5150 Net Drive Address: 7900 Churchill Way Address: 3809 South Congress Avenue Address: 7009 Almeda Road Address: 655 Tennyson Road Units: 271 Units: 318 Units: 308 Units: 375 Units: 334 Units: 188 Average Rent Per Month: $1,162 Average Rent Per Month: $1,172 Average Rent Per Month: $1,401 Average Rent Per Month: $1,466 Average Rent Per Month: $1,427 Average Rent Per Month: $2,385 Occupancy: 93.0% Occupancy: 95.3% Occupancy: 94.8% Occupancy: 92.5% Occupancy: 90.7% Occupancy: 95.0% Year Built: 1989 Year Built: 2009 Year Built: 1988 Year Built: 2008 Year Built: 2000 Year Built: 1987 Quick Facts: Core infill location, condominium quality renovations, ideal mix of employment and retail nearby, excellent rent roll with upside Lead Broker: Bill Shippen shippen@aranewmark.com Quick Facts: Core plus urban midrise, value add potential, strategic central location, dynamic employment market Lead Broker: Patrick Dufour pdufour@aranewmark.com Quick Facts: Infill location, proven value-add through interior upgrades, opportunity to purchase below replacement cost Lead Broker: Brian O Boyle Sr. oboyle@aranewmark.com Quick Facts: Core asset located near downtown Austin, value add component, 22,200 square feet of ground-floor retail Lead Broker: Pat Jones jones@aranewmark.com Quick Facts: Located with the Texas medical center, long-standing institutional ownership, 30% potential value-add ROI Lead Broker: Matt Rotan rotan@aranewmark.com Quick Facts: Ideally located directly across the street from the South Hayward BART station Lead Broker: Mark Leary mleary@aranewmark.com Source: Newmark Grubb Knight Frank Research 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 26

27 Select Market Statistics Market Inventory (Units) Vacancy Rate 12-Month Deliveries 12-Month Inventory Growth 12-Month Absorption 2016 Projected Job Growth Atlanta 484, % 8, % 8, % Austin 225, % 9, % 10, % Boston 348, % 8, % 6, % Charlotte 168, % 4, % 5, % Chicago 547, % 6, % 6, % Dallas 734, % 15, % 17, % Denver 295, % 8, % 7, % Houston 639, % 16, % 12, % Los Angeles 1,085, % 8, % 7, % New York City 1,361, % 11, % 6, % Orlando 215, % 5, % 3, % Philadelphia 501, % 5, % 5, % Phoenix 331, % 5, % 5, % Portland 280, % 6, % 4, % Sacramento 173, % % % Raleigh/Durham 159, % 3, % 5, % San Diego 314, % 2, % 2, % San Francisco 194, % 2, % 1, % San Jose 175, % 4, % 4, % Seattle 362, % 10, % 9, % South Florida 567, % 8, % 6, % Washington DC 584, % 11, % 13, % Source: Newmark Grubb Knight Frank Research, Costar, REIS, Moody s Analytics, MPF Research 1Q16 UNITED STATES MULTIHOUSING MARKET OVERVIEW 27

28 New York City HEADQUARTERS 125 Park Avenue New York, NY James Kuhn President Blake Okland Vice Chairman, Head of US Multifamily Jonathan Mazur Managing Director, Research Michael Wolfson Capital Markets Research Analyst Newmark Grubb Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents. Newmark Grubb Knight Frank Research Reports are also available at All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Knight Frank (NGKF) has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of NGKF. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient s choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of NGKF, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.