January 2016 Each Multi-Housing Pulse highlights the equity and debt markets that support transaction volume within the multi-housing industry as well as various regions of the country. For this edition, Atlanta, Austin, Boston, Charlotte, Chicago, Dallas/Fort Worth, Denver, Houston, Los Angeles, Miami, Minneapolis, New York, Northern New Jersey, Philadelphia, Portland, San Antonio, San Diego, San Francisco, Seattle, Tampa, and Washington D.C. are featured as well as Affordable Housing, Student Housing and Seniors Housing.

FOREIGN CAPITAL COMBINES WITH RESILIENT FUNDAMENTALS TO KEEP CAP RATES LOW Multi-housing landlords concluded 2015 enjoying an atmosphere of opportunism. China’s economic deceleration, unrest in the Middle East, weak commodity prices and a strengthening US dollar fueled investors’ sustained interest in US Treasuries, even as the Federal Reserve’s FOMC telegraphed their intention and eventually gave rise to the Federal Funds Rate before the end of the year. Balancing aversion to risk with demand for higher yields, investors increasingly turned to commercial real estate – and multi-housing assets in particular - for better risk adjusted returns.

biotechnology jobs. As a result, these secondary markets are experiencing a tightening of capitalization rates. Raleigh/Durham benefitted from $440 million of overseas investment in 2015 across eleven assets, an alltime high for foreign investment in terms of nominal investment. With Congress’ improvement of FIRPTA allowing foreign-based pension funds alleviated tax treatment for larger percentage interest in direct property investment, the industry widely hopes cross-border capital flows will continue to ascend.

Canadian investors have traditionally invested more capital annually than their foreign counterparts and it is no surprise they led Real Capital Analytics’ list of foreign funds. Preliminary estimates show overseas capital invested in the US multi-housing space surpassed $16 billion last year, with Canada accounting for more than $10.5 billion. The United Kingdom, who invested over $800 million, ran a distant second place and China registered third with $680 million. The past several years have witnessed an explosive rise in capital flows into U.S. real estate from abroad, including both institutional and high net worth investors, much of it spurred by a desire to dollar-denominate and seek a haven from domestic political and economic unrest.

The hunt for yield also led foreign investors to venture into riskier property investments, especially multi-housing development deals, the leader of the housing recovery. HFF capitalized $1.5 billion of multi-housing development in 2015, underscoring our growing presence in the foreign capital arena.

While the overwhelming majority of foreign capital was once solely interested in gateway markets including Manhattan, Washington D.C. and San Francisco, foreign investors broadened their appetite to “secondary” locales in 2015, investing significant capital in Dallas ($1.04 billion), Atlanta ($725 million) and Phoenix ($490 billion). As buyers venture beyond coastal markets, second tier cities have become a viable substitute, especially if they offer urban centers and can attract high-paying technology and

Partially due to portfolio offerings, 2015 marked a record year for multihousing transaction volumes. Although growth in sales volume has begun to decelerate since May, overall volume was still up 26% ahead of last year’s 3Q (latest data available). While a wave of new construction hitting many markets paired with rising debt costs may be to blame for this sudden deceleration, escalating prices in primary markets such as New York, Los Angeles, and San Francisco continue to push capitalization rates to new cycle lows. Real Capital Analytics reports liquidity for the twelve months ending September 2015 at $9.8 billion in Los Angeles, and nearly double that amount in New York. Building momentum, the Dallas multi-housing market unexpectedly outpaced gateway markets like Washington, D.C. and San Francisco in terms of liquidity, corroborating the notion secondary markets are increasingly in favor with investors. With many foreign investors eager

THE RETREAT AT PARK MEADOWS | Littleton, CO Property Sale HFF | 1

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to get large amounts of capital out the door, offshore capital can provide an exit strategy for multifamily owners who have ardently built up a large portfolio and find it draining to sell the portfolio gradually. Despite the fact U.S. multi-housing prices have eclipsed their 2007 peaks, capitalization rates remain higher than in other developed countries, driven primarily by higher benchmark Treasury rates. However, capitalization rates don’t merely depend on interest rates, but also required risk premia and economic growth rate, which in the US is thought to have grown at an annual rate of 2.2% last year. On December 16th, the Federal Open Market Committee (FOMC) unanimously decided to raise their Fed Funds Target Rate for the first time in nearly a decade. Many investors awaited the hike nervously, concerned over the trajectory of capitalization rates. While historically capitalization rates have decreased in periods of FOMC rate hikes, this performance has been in milieu of a multi-decade compression cycle for both USTs and capitalization rates. For example, the yield on the 10yr UST rose around 110 basis points from September 2003 to June 2007, while capitalization rates on commercial real estate transactions dropped roughly 150 basis points. As of 3Q 2015, Garden-asset capitalization rates stood at a nationwide average of 4.78%, while Mid-Rise/High-Rise assets registered 3.80%. As the below graph illustrates, by historical standards, average capitalization rates are still significantly higher than the interest rates available for financing, leaving ample room for interest rates to inch higher without rattling the property markets.

the nation’s largest. Investors are anticipating household formation and rental demand will expand in tandem alongside the labor market. This unprecedented growth will test the ability to address the spiraling need for housing units. Should the supply of rental properties fail to keep up, younger people may end up competing for housing, with the burgeoning population of Baby Boomer renters placing mounting pressure on rents for all types of multi-housing assets. Commercial real estate, and multi-housing assets in particular, are proving the beneficiaries in an environment of increasing capital allocations and demand for predictable and higher-yielding assets. Intermediaries such as HFF can play a pivotal role in seizing opportunity and in bridging the gaps between buyers and sellers.

Investors placing more weight on unlevered returns will of course be less impacted should the Fed Funds Rate hike adversely impact capitalization rates. And foreign investors will likely prove the most resilient in this regard. Proving equally buoyant, underwriting discipline of both equity and debt remains vital to sustainability. Investors and lenders alike remain scrupulous, structuring deals with greater vigilance. In light of this measured approach, commercial real estate loans held by banks’ having reached a record high in 2014 is cause for a sanguine outlook in the face of whatever concerns investors may harbor. Providing further runway to the sector’s recent performance, the multihousing sector appears to be in the midst of a generational shift. Aging Baby Boomers, the arrival of the Millennials in the workforce and the increasing desire of a “live, work, play” lifestyle in a bustling city center are redefining this industry. The Urban Institute in Washington predicts the number of renters who are 65 or older to reach 12.2 million by 2030, more than double the level in 2010. Millennials, on the other hand, are prime renters and, representing one-third of the nation’s working population, are 10yr UST

9%

PARK LA BREA | Los Angeles, CA Fixed-rate Financing

All Multi-Housing

Garden

Mid-Rise/High-Rise

8% 7% 6% 5%

4.78% 4.50%

4%

3.80%

3% 2%

2.17%

1% 0% 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015 Source: Real Capital Analytics

HFF | 3

HFF OFFICE LOCATIONS

Portland

Boston New York Chicago

Pittsburgh

Florham Park

San Francisco

Philadelphia

Denver

Indianapolis

Washington, D.C.

Los Angeles Carolinas

Orange County Atlanta

San Diego Dallas Austin

Houston

Orlando Tampa Miami

CLASS B STILL RULES, BUT CLASS A RISING Class B apartments continued to record the strongest performance among the primary asset classes during the first three quarters of 2015, but rentgrowth rates in the Class A sector have soared in the past year to their highest in at least three years. Class A apartments in the U.S. rented for an average $1,763 per month in September 2015 – some $84 higher than the September 2014 average and by far the largest increase among the three asset classes. That translated to an annual effective-rent-growth rate of 5.0% in September, compared to 3.2% one year earlier. The increase in Class A rent growth can be partially credited to upticks in urban-core performance in many markets. (Urban-core submarkets have the highest concentration of new supply, though suburban areas in total may be receiving more total units). Though most of these central-city submarkets have recently underperformed the metro as a whole – with a notable exception being Philadelphia’s Center City submarket, which has the highest effective rent growth of any submarket in the metro – the difference in the September 2015 rent-growth rate compared to that of September 2014 often exceeds that of the market as a whole. In other words, many urban cores showed the largest rebounds in 2015. Such a trend was found in Austin, Boston, Chicago, Los Angeles, Nashville, New York, San Diego and Washington, D.C. among others. Even in Houston, where oversupply is one of the primary reasons for a decrease in rentHFF | 4

growth rates last year, the urban-core Montrose/River Oaks submarket recorded less of a rent-growth-rate decline than the entire metro. For all the Class A strengthening, this asset class still performed below Classes B and C, though the gap between A and C is narrowing. Class B properties recorded 5.8% annual effective rent growth in September with an average rent of $1,223 per month– some $440 below the average Class A rent. And similar to the national market, Class B rent-growth rates have been remarkably consistent from February through September, staying within a 22-basis-point range in those eight months. Class C rent-growth rates decreased in the third quarter, ending at 5.2% in September off an average monthly rent of $871. While Class B performs the strongest in most metros throughout the nation, Class C dominates in Texas, among other metros. Class A paces Oakland, Sacramento, Fort Lauderdale and several smaller markets. Occupancy was 95.5% in Class A and B properties in September, and 95.0% among Class C units, meaning not many units are available for rent. As more Class A units are built with rents more than $500 above the Class B average and almost $900 higher than the Class C average, the outlook seems bright for all asset classes. Since classification is a function of comparative rent – Class A comprises the 20% of all properties with the highest rent, Class C the lowest 20% and Class B everything in between – the addition of new units could push some older properties into lower classes, increasing rents for all.

CONSISTENT STRENGTH MARKS 2015 APARTMENT MARKET THROUGH THIRD QUARTER The consistent strength of the national apartment market so far in 2015 has not been seen since 2006, as solid job gains for most of the year and decreasing affordability of single-family homes has maintained annual effective rent growth at 5% or higher and apartment occupancy rates above 95%. If 2014 was “The Year of the Apartment Market,” as Axiometrics, the source of the data in this edition of “Pulse,” described it, then 2015 was “The Year of the Apartment Market II.” While 2014 saw rapid increases in the rate of annual effective rent growth (up 185 basis points from year-end 2013), 2015 was the model of high-level consistency. Rent growth, 5.3% in the third quarter, remained within a 22-basis-point (bps) range during the first three quarters, and the three-quarter streak of 5.0% or higher rent growth is the longest at that level since a four-quarter string from the fourth quarter of 2005 through the third quarter of 2006. U.S Annual Effective Rent Growth and Occupancy Occupancy

Effective Rent Growth

6.0%

95.5%

5.0%

95.0% 94.5%

4.0%

94.0%

3.0%

93.5%

2.0%

93.0%

3Q15

2Q15

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

92.0%

1Q11

0.0%

4Q10

92.5%

3Q10

1.0%

Source: Axiometrics Inc.

Third-quarter annual effective rent growth was the highest since the aforementioned third quarter of 2006, while the July-September period’s quarter-over-quarter effective rent growth of 1.7% was the highest thirdquarter figure since 2010, which was just 3 bps higher. The last time thirdquarter quarterly rent growth was higher was in 2005. Quarterly rent growth in each of 2015’s first three quarters was above the figures for the corresponding quarter of 2014. The metric has outperformed the previous year for seven straight quarters. As usual, the second quarter of 2015 was the strongest, recording 2.7% quarterly effective rent growth. Higher Rent, Higher Occupancy, Fewer Concessions QUARTERLY EFFECTIVE RENT GROWTH Quarter First Second Third Fourth

2012

2013

2014

2015

0.61% 2.25% 1.30% -0.55%

0.42% 2.11% 1.19% -0.92%

0.54% 2.66% 1.66% -0.28%

0.87% 2.74% 1.74% Source: Axiometrics Inc.

One reason effective rent levels have increased is that the value of concessions offered by landlords has decreased drastically over the past six quarters. In the third quarter, concessions were 0.5% of asking rent – with 8.3% equivalent to one month’s free rent on a 12-month lease. The average value of these concessions were $5.98 per month (almost $72 per year), or about 2 days of free rent. The third quarter’s concession value was the lowest since Axiometrics began

reporting the metric for all apartments in the third quarter of 2002. The table below shows the monthly concession value, percentage of asking rent, and average asking rent in the third quarter of post-Great Recession years. The average asking rent has increased by $262 since the third quarter of Year (3Q) 2015 2014 2013 2012 2011 2010

Concession Value $5.98 $8.40 $12.71 $20.14 $30.25 $48.13

% of Asking Rent

Average Asking Rent

0.5% 0.7% 1.1% 1.9% 2.9% 4.9%

$1,254 $1,177 $1,123 $1,075 $1,030 $992 Source: Axiometrics Inc.

2010, while concession value decreased $42.15 per month. So, landlords and property owners are pocketing an additional $300-plus per month for the average unit nationally. And, they are able to do that because of the occupancy rate and demand for apartments nationwide. Apartments nationwide were 95.3% occupied in the third quarter, the highest rate since the first quarter of 2001 and the highest third-quarter rate since 2000. Axiometrics considers a market or property “essentially full” at 95% occupancy, and less than five units were available for every 100 on the market in the third quarter. That creates a landlord’s market, since demand for apartments is increasing. As a note, the concession statistics are only based on stabilized properties. New properties often offer incentives such as one month free prior to stabilization. More Jobs Create More Apartment Demand Axiometrics has found an 86% correlation between job gains and apartment demand, and the number of jobs being added to the economy – 2.71 million during the 12 months ended September 2015, according to the U.S. Bureau of Labor Statistics’ initial estimates for September – means more people are looking for apartments. Though the number of jobs added per month moderated during the third quarter, it hasn’t been enough to affect apartment demand. About 34,081 more apartments were absorbed on an annual basis in the third quarter of 2015 than new units that came to market, according to Axiometrics’ Supply/Demand Model. Though the balance is forecast to tilt toward equilibrium during the last part of the year, the fact remains that there aren’t yet enough new apartments to accommodate those who want them. Occupancy remains high and effective-rent-growth rates have been at near-record high rates for a near-record length of time, because demand is increasing – even though a post-recession high number of units have were identified for delivery last year. Some 187,713 new apartment units came to market during the first three quarters of 2015, with another 83,736 identified to be delivered in the fourth quarter and 269,265 identified for 2016 delivery. If all those are delivered and no more are added for 2016 completion, almost 760,000 new units will have come to market in 2014-2016. A lot of this new supply is catch-up from the recession and immediate post-recession period, when hardly any new units were built. HFF | 5

CAPITALIZATION RATE FORECAST City

Class A

Class B

Class C

Atlanta Austin Bay Area - Urban Bay Area - Suburban Birmingham Boston Charlotte Chicago - Urban Chicago - Suburban Charleston, SC Columbus Dallas - Urban Dallas - Suburban Denver Greenville Houston - Urban Houston - Suburban Indianapolis Jacksonville Kansas City Los Angeles - Urban Los Angeles - Suburban Louisville Minneapolis Nashville New Jersey - Northern New Jersey - Southern New York - Long Island New York - Outer Boroughs New York - Westchester New York City Orange County Orlando Philadelphia-Urban Philadelphia-Suburban Phoenix Pittsburgh Portland - Urban Portland - Suburban Raleigh San Antonio San Diego Seattle - Urban Seattle - Suburban South Florida - Broward

4.25% - 4.75% 4.50% - 5.75% 3.50% - 4.00% 4.00% - 4.50% 4.75% - 5.00% 4.00% - 4.50% 4.25% - 5.00% 4.25% - 4.75% 4.75% - 5.50% 4.50% - 5.00% 5.50% - 6.00% 4.25% - 4.75% 4.75% - 5.50% 4.50% - 5.25% 4.75% - 5.25% 4.50% - 5.00% 5.50% - 6.00% 5.50% - 6.25% 5.25% - 5.75% 5.25% - 6.00% 4.00% - 4.50% 4.25% - 5.00% 5.25% - 6.00% 4.75% - 5.50% 4.25% - 5.00% 4.25% - 5.00% 5.00% - 5.75% 4.75% - 5.25% 4.00% - 4.50% 4.75% - 5.25% 3.50% - 4.00% 4.00% - 4.25% 5.00% - 5.50% 4.75% - 5.25% 5.00% - 5.50% 4.50% - 5.00% 6.00% - 6.50% 4.00% - 4.50% 4.50% - 5.00% 4.25% - 5.00% 4.50% - 5.50% 3.75% - 4.25% 3.75% - 4.50% 4.25% - 4.75% 4.25% - 5.25%

4.75% - 6.00% 5.00% - 7.00% 4.00% - 5.00% 4.75% - 5.25% 5.00% - 6.50% 4.75% - 5.50% 5.00% - 6.25% 4.50% - 5.00% 5.50% - 6.50% 5.00% - 6.00% 6.00% - 7.00% 5.00% - 6.00% 5.00% - 6.50% 5.25% - 5.75% 5.25% - 6.00% 5.25% - 6.00% 5.75% - 7.00% 6.25% - 7.00% 6.00% - 6.50% 5.75% - 6.50% 4.75% - 5.25% 5.00% - 5.50% 5.75% - 6.50% 5.50% - 6.50% 4.75% - 6.00% 5.00% - 6.00% 6.00% - 7.00% 5.50% - 6.25% 5.00% - 5.50% 5.50% - 6.25% 4.50% - 5.00% 4.00% - 4.50% 5.50% - 6.00% 5.50% - 6.50% 5.75% - 6.25% 5.00% - 6.00% 6.75% - 7.25% 4.50% - 5.25% 5.00% - 5.75% 5.00% - 6.25% 5.00% - 6.00% 4.25% - 5.00% 4.50% - 5.25% 4.75% - 5.50% 5.50% - 6.50%

6.00% - 7.00% 6.00% + 5.00% - 5.50% 5.50% - 6.00% 6.50% - 7.00% + 6.00% - 7.00% 6.25% - 7.00% + 5.50% - 6.50% 6.75% - 7.50% 6.00% - 7.00% + 7.00% + 6.00% + 6.50% + 5.50% - 6.00% 6.00% - 7.00% + 6.00% - 7.00% 7.25% + 7.00% + 7.00% + 7.00% + 5.50% - 6.00% 5.75% - 6.00% 7.00% + 6.50% - 7.25% 6.00% - 7.00% 6.50% - 7.25% 7.25% - 8.00% 6.50% - 7.25% 6.00% - 6.50% 6.50% - 7.25% 5.50% - 6.00% 5.00% - 5.50% 6.50% + 6.50% - 7.00% 6.75% - 7.25% 6.00% - 7.00% 7.50%+ 5.25% + 5.75% + 6.25% - 7.00% 6.50% + 5.00% - 6.00% 5.25% + 5.50% + 6.50% +

South Florida - Miami South Florida - Palm Beach St. Louis Tallahassee Tampa Washington D.C. - Urban Washington D.C. - Suburban

4.00% - 5.25% 4.50% - 5.00% 5.25% - 6.00% 6.00% - 6.50% 4.75% - 5.25% 4.25% - 4.75% 4.75% - 5.50%

5.50% - 6.50% 5.75% - 6.50% 5.75% - 6.75% 6.50% - 7.25% 5.50% - 6.00% 4.75% - 5.75% 5.00% - 6.00%

6.50% + 7.50% + 7.00% + 7.50% + 6.50% + 6.00% + 6.00% +

HFF | 6

THE CORDELIA | Portland, OR Property Sale

THE MARKE AT SOUTH COAST METRO | Santa Ana, CA Fixed-rate Financing

WINDERMERE CAY| Winter Garden, FL Fixed-rate Financing

A recent study by Axiometrics’ real-estate economists found that had the recession not occurred and multi-housing construction starts remained at the average level recorded from 1995-2008, about 562,000 more units would have been built from 2009-2013 than actually were built during that time frame.

Even some Midwestern metros, such as St. Louis and Detroit, have seen healthy rent-growth rate increases, though Chicago, Kansas City and Indianapolis were down.

The construction boom of 2014-2015 has reduced that shortfall by 12% to date. If starts maintain their 2015 level, the shortfall will be made up in 2024.

Metro Division

Whether the demand will merit that number of units, in addition to those that would be built anyway in the next nine years, remains to be seen as fluctuations in job growth, population shifts and home-buying rates will affect demand and construction.

The top 25 markets for annual effective rent growth in September were: Annual Effective Rent Growth Sept. 2015

Portland-Vancouver-Hillsboro, OR-WA

14.31%

Oakland-Hayward-Berkeley, CA

13.03%

San Francisco-Redwood City-South San Francisco, CA

11.30%

Sacramento-Roseville-Arden-Arcade, CA

9.95%

San Jose-Sunnyvale-Santa Clara, CA

9.33%

Higher Home Prices Also Boost Apartment Market

Denver-Aurora-Lakewood, CO

8.79%

Meanwhile, the homeownership rate was 63.4% in the second quarter, the lowest since 1968. Though the propensity to rent is as strong as ever – credit is still tight for mortgages, though loosening a bit; the millennial generation is still marrying and having children later in life; student debt is a big issue; and aging baby boomers are downsizing from homes to apartments – rising home prices also are a major factor in the decision to buy or rent.

Orlando-Kissimmee-Sanford, FL

8.42%

San Diego-Carlsbad, CA

8.41%

Seattle-Bellevue-Everett, WA

8.03%

Riverside-San Bernardino-Ontario, CA

7.70%

Phoenix-Mesa-Scottsdale, AZ

7.39%

As strong as rent growth has been for apartments during the past year, home prices have risen at an even faster pace. The median home price was $229,400 in the second quarter of 2015, according to the National Association of Realtors, an 8.7% increase over the median for the second quarter of 2014. Meanwhile, median household income increased by 3.0%, though falling mortgage interest rates helped potential home buyers.

West Palm Beach-Boca Raton-Delray Beach, FL

7.18%

Los Angeles-Long Beach-Glendale, CA

7.13%

Charleston-North Charleston, SC

6.84%

Nashville-Davidson-Murfreesboro-Franklin, TN

6.74%

Charlotte-Concord-Gastonia, NC-SC

6.59%

Tampa-St. Petersburg-Clearwater, FL

6.58%

Fort Worth-Arlington, TX

6.54%

Jacksonville, FL

6.38%

Atlanta-Sandy Springs-Roswell, GA

6.35%

Las Vegas-Henderson-Paradise, NV

6.30%

Fort Lauderdale-Pompano Beach-Deerfield Beach, FL

6.16%

Dallas-Plano-Irving, TX

6.12%

Raleigh, NC

5.97%

Salt Lake City, UT

5.96%

Widespread Strength The Western third of the nation continued to dominate the apartment market in the third quarter of 2015. But marked increases in fundamental metrics in parts of the nation that have strengthened over the year – especially the Northeast – were major factors in the national market’s performance during the third quarter and the year so far. The West contributed 11 of the top 15 metro areas with the highest rent-growth rates among Axiometrics top 50 markets, based on number of units, in September 2015. Seven of those 11 were in California. Northern California swept spots 2-5, even though their growth rates have moderated a little bit from their unsustainable peaks earlier this year. Portland, OR was the story of the third quarter, as the Northwestern metro area surpassed Oakland as the No. 1 rent-growth market. Its 14.3% annual effective rent growth in September was almost 2 and half times the rate of September 2014. Oakland remained No. 2.

In Conclusion With annual effective rent growth forecasted to have ended the year at 5.0% and occupancy forecasted to have finished at 95.1%, the 2015 apartment market shapes up to be the second straight year of surprising strength.

Florida also remained strong in the third quarter, though the metros leading the state’s apartment fundamentals have mostly changed. A year ago, South Florida was the second-hottest area in the nation behind the San Francisco Bay Area. But this September, Orlando, Tampa and Jacksonville all were among the nation’s top 20 rent-growth markets, joining South Florida’s West Palm Beach.

Apartment properties are attractive investments, as indicated by the number of deals made so far this year on both large-portfolio and one-off basis. The value of these deals will almost certainly surpass the $112 billion worth of transactions in 2014, according to Real Capital Analytics.

Though most of the Northeast’s markets are underperforming the national rate, their rent-growth rates have significantly increased over the past 12 months. Boston led the way at 5.7%, with Philadelphia at 4.3%, New York at 4.2%, Baltimore at 3.0% and Washington, D.C. – emerging from the depths – at 2.1%. Jobs have found their way back to this portion of the country, and new supply is minimal in the region, except for New York and Washington D.C.

Though rent-growth and occupancy rates are predicted to moderate in 2016 – to 3.8% and 94.6%, respectively – those rates are still above the long-term average for both metrics. Through 2018, rent growth is expected to average 3.7% and occupancy 94.9%, even with hundreds of thousands of new units being delivered. The current apartment growth cycle has been in place for five years, one year longer than the previous cycle. It doesn’t look like it’s going to end any time soon. HFF | 7

AFFORDABLE HOUSING Investment in Low-Income Housing Tax Credit (“LIHTC”) communities remains strong as investors continue to recognize the ability to diversify their portfolios while achieving attractive yields. One of the major benefits of owning a LIHTC community is the generation of stable cash flow, sheltered from surrounding market volatility. The gap between maximum allowable rents under the LIHTC program and rents charged at comparable, market-rate properties generates consistently high occupancies and attractive risk adjusted returns throughout the given hold of a LIHTC asset. HFF is currently in the process of completing the sale of a 32 property, 8,948-unit LIHTC portfolio that garnered considerable interest from a diversified buyer pool. In addition to the nation’s largest affordable housing owners, the portfolio saw institutional intrigue from investors with unique sources of capital including pension fund advisors, university endowments, foreign family offices, mortgage REITs, and real estate fund managers. Despite having minimal (or no) prior affordable housing experience, these institutional owners and advisors pursued the Portfolio with earnest due to, among other characteristics, the offering’s relatively risk free cash flow, superior risk adjusted return profile and large equity requirement. The Portfolio benefitted from the market trends below which combined to create a distinctive offering unique to the affordable housing sector, yielding high-watermark pricing for the asset class: • Significant Rental Spread • Low Cost of Capital • Attractive Risk Adjusted Returns • Large Equity Deployment

Significant Rental Spread The spread between maximum allowable rents under the LIHTC program and rents charged at comparable, market-rate properties allows for consistently high occupancies and stable rental revenue throughout the given hold of a LIHTC community. America’s economy has surged out of the recession, experiencing significant job growth, wage gains and GDP growth. Intuitively, gains in area median income (AMI) would be expected as families across the country benefit from a growing and healthy economy, but the resurgence has yet to take hold in HUD’s annual AMI calculations. The spread has also widened further due to rapid market-rate rent growth, minimizing the volatility of revenue streams at LIHTC communities. As illustrated in Exhibit 1, effective rents nationwide have increased 37% since 2009, while maximum LIHTC rents have only increased 3% over the same time period. As of the third quarter, the current spread exceeds $330 and value appreciation has been seen as investors adjust their return requirements downwards to more accurately reflect the risk profile of the asset class. Low Cost of Capital Despite recent gains, the 10 yr UST continues to trade well below its 50-year average. Since 1961, the 10 yr UST has averaged 6.47%. As of this writing 10-year treasuries closed at 2.25%, more than 400 basis points below historical levels. While interest rates remain comparatively muted, affordable housing investors who typically focus on levered cash-on-cash yields are able to generate attractive returns at elevated pricing thresholds. Cap rate compression across the affordable housing space has been seen as quality sponsors are able to source debt at attractive terms. Exhibit 1

Spread Between Max LIHTC Rents and Market-Rate Effective Rents $1,300

$1,200

$1,100

$1,000

$900

$800

$700

$600

2004

2005

2006

2007

Average Effective Rent - USA

2008

2009

2010

2011

2012

2013

2014

2015

2 Bedroom 60% AMI Max LIHTC Rent - USA Sources: U.S. Department of Housing and Urban Development, Axiometrics Inc.

HFF | 8

Attractive Risk Adjusted Returns Well located LIHTC communities in markets with significant rental spreads offer attractive risk adjusted returns, generating value-add yields, while operations reflect that of a core plus asset class. In many cases LIHTC communities experience lower vacancy and turnover than comparable market-rate product, but can be acquired at discounted pricing that is well below replacement costs. Furthermore, the asset class produces returns heavily weighted towards current cash flow with limited downside risk, creating an

ideal investment vehicle for institutional investors who have been priced out of other product types and are on the “hunt for yield.” As demonstrated in Exhibit 2, the cap rate premium for top quartile assets has increased to nearly 100 basis points, up from approximately 60 basis points at the turn of the century. Accordingly, many institutional investors have migrated up the risk curve seeking out higher returns in secondary markets and alternative asset classes such as affordable housing.

Premium For Top Quartile Deals Is Growing

Exhibit 2

Average & Top Quartile Cap Rates, Spread Average Cap Rate

110

Top Quartile Cap Rate

9%

100

8%

90

7%

80

6%

70

5%

60

4%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

50

Spread Between Average & Top Quartile (bps)

Capitalization Rates (%)

10%

Source: Real Capital Analytics, as of September 30, 2015

Large Equity Deployment

Billions

Commercial real estate allocations and assets under management (AUM) among institutions have notably increased during the current cycle as commercial real estate continues to gain acceptance as a distinct asset class. Real estate was recently bifurcated from “financials” by S&P and MSCI after a review of the Global Industry Classification Standard and, beginning August 2016, real estate will officially stand as its own sector on the S&P index. Additionally, real estate has significantly outperformed other investment vehicles over the past 15 years. Over the past year alone, the NCREIF and REIT indexes returned a total yield of 13% and 10%, while corporate bonds and the S&P 500 yielded total returns of -1.3% and 11.2%, respectively.

As real estate allocations have increased, fund managers and institutions have “struggled” to keep pace. Based on 2014 allocations, institutions invested approximately 90 basis points less in real estate than they would have preferred. Despite this, institutions increased real estate allocation targets by 20 basis points in 2015 and total dry powder reached an all-time high of $137 billion as of September 2015 (Exhibit 3). As a result, institutions are eager to deploy large buckets of capital, especially into programmatic portfolio offerings that require significant equity investments.

Total Dry Powder Now Highest All-Time Dry Powder Raised

$160

Exhibit 3 $137

$140 $120

$106

$100 $80

$86

2007

2008

$93

$101

$89

$78

$70 $56

$60 $40

$84

$95

$37 $25

$26

2002

2003

$20 $-

2004

2005

2006

2009

2010

2011

2012

2013

2014

Oct-15 Source: Prequin

HFF | 9

2016 MULTI-HOUSING DEBT OUTLOOK In 2015, where most were anxiously awaiting what decision the Fed would make on interest rates, the year ended with the true volatility coming from increasing spreads. The 10 year treasury closed 2015 at 2.31%, which was only a 12 bps increase year-over-year and currently sits at 2.13%, showing virtually no change. On the other hand, spreads increased on full leverage deals by around 50-75 bps, depending on leverage and type of transaction. All of this had zero effect on lending volumes however, as every lender group either reached or exceeded volume goals for the year. 2016 brings a new year of continued volatility outside the real estate umbrella both domestically and internationally, as well as an election year in the United States. Lending appetite for all lenders is projected at or above all previous 2015 levels. 2016 starts the beginning with a significant amount of debt rolling over from 10 year maturities placed between 2006-2008 warranting a significant amount of refinance volume. This, accompanied by a very active acquisition market, looks for lenders to be very active in the first half of the year. GSE’s are still the dominant force, but look for ups and downs throughout year Capital consumers continued to look at the GSE’s as the primary source of financing for multi-housing properties throughout 2015 and will continue into 2016. The cap requirements set into effect at the end of 2015 by the FHFA were $30 billion each for FNMA and Freddie Mac. Fannie Mae finished the 2015 calendar year with $42 billion in volume compared to Freddie Mac with $47 billion. Assuming the same uncapped percentages in 2016, look for both groups to hover around the $50 billion in 2016 volume. The biggest question for 2015 however, will be how well both groups manage their respective pipelines in order to avoid the volatile swings of lending appetite that was witnessed in 2015. Both groups are rumored to have upwards of $15 billion in 2016 pipeline rollover business, which is a large chunk of first quarter 2016 volume. CMBS: Crowded Volatile Room On any particular day, you will find around 46 different CMBS groups actively originating CMBS loans for securitization. This is up significantly year-over-year and has resulted in hyper competition for CMBS loans. Total 2015 U.S. CMBS volume was $101 billion over all product types, marking a 7.3% increase over the prior year. Volatility has crept back into the space over the past 3 months and anticipated to continue as AAA spreads have widened from a low of 80 bps all the way out to 145 bps since mid-2015. The b-piece investor field has also impacted spreads with fewer groups playing in this space today.

the 135-175 range for their primary business placing all in rates at 3.353.85% today. Floor rates will continue to be in play if the ten year treasury drops below 2.0% as CIO’s are focused on all in coupon returns achieved compared to alternative investments. The other ask that is common at the beginning of the year and mostly available are forwards through year end, which have been more common of late to address later in the year maturities locking in today’s coupon. For the right type of business we continue to see life companies get more aggressive than the market on prepayment flexibility, spread and ability to rate lock at application. Banks: Aggressively pursuing the right business 2015 was a year where banks absorbed the new Basel III regulations and learned how to interpret the new HVCRE (high volatility commercial real estate) regulations put in place. We found a variety of interpretations used and different banks had different solutions in dealing with this. However, several overall themes were consistent here. 1. The cost of construction debt increased. Whether it was passed on directly to the consumer is a case by case basis. 2. The largest impact on developers was the requirement of 15% cash equity in transactions. This impacted developers who had significant equity gains in land that typically contribute this as equity on transactions. Banks have thus targeted “less risky” multi-housing opportunities of late and have done so very aggressively. Spreads are 140-200 over the applicable index and Borrowers are also able to obtain financing for renovation work in addition to their initial advance rate. Continued health in the regional bank space has prompted additional options for local markets as well as foreign bank interest providing aggressive coupons. Look for banks to continue to aggressively seek business throughout 2016 and also be mindful of 30 Day LIBOR, which is at 0.42% today versus 0.16% 45 days ago. More of the same in 2016 Borrowers are prudent to address financing needs early in 2016. With the onset of the 2006 CMBS maturities and also a large balance of carryover pipeline with the GSE’s, look for the first part of the year to be an active time for financings. The good news is there is more debt capital available than any other part of this cycle and will continue to provide a wide market of options for consumers of capital across the board. As is typical with any year, the onset of competition and start of the year conferences in our industry bring aggressive behaviors with all lenders, so being in a position to take advantage of this is key.

The ten-year swap rate is currently hovering around 2.0%, which puts all-in rates at 4.60% for ten-year fixed rate loans today. We anticipate similar volume or more as rollovers of existing CMBS loans will continue to increase over the next two years. Overall, continued demand for quality underwritten CMBS product is anticipated, which will benefit Borrowers and spreads well into 2015. Insurance Companies: Earlier is better Like in 2015, insurance companies will come out of the gates hard and fast in 2016. The majority of these groups look to tie up commitments with the first half of the year. That being said, the majority of these groups have as much or higher volume targets than 2015, and will therefore likely remain active throughout 2016 to reach these goals. There has been a continued appetite by some reaching for yield to look at higher leverage as well as equity opportunities and this will continue. Currently, life companies offer the cheapest long term fixed rate option in the market, with spreads in HFF | 10

THE Q | San Diego, CA Fixed-rate Financing

TELLUS

Arlington, VA Fixed-rate Financing

HFF | 11

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL) Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$2,293.08

$609.41

6.61%

$2,691.87

$709.78

6.51%

$2,625.19

$493.40

6.57%

$2,332.89

$520.30

6.81%

$2,151.41

$427.93

6.91%

$2,680.05

$1,238.42

7.22%

$2,511.49

$324.84

7.09%

$2,143.83

$152.65

7.19%

$1,877.84

$161.93

7.49%

$779.87

$140.45

7.26%

$513.14

$58.11

7.60%

$507.20

$146.71

7.37%

$568.17

$222.91

6.91%

$606.69

$178.96

7.29%

$955.70

$407.13

7.12%

$1,635.84

$826.84

7.05%

$1,969.46

$556.53

7.09%

$2,260.76

$470.26

6.92%

$2,226.30

$372.67

7.02%

$2,392.13

$992.67

6.69%

$2,190.65

$355.06

6.60%

$2,121.15

$400.76

6.56%

$3,069.11

$1,320.63

6.43%

$3,970.27

$1,893.83

6.64%

$4,330.74

$715.53

6.69%

$4,331.56

$401.58

6.65%

$3,810.41

$799.48

6.77%

$3,266.37

$1,349.78

6.63%

$3,078.26

$527.42

6.57%

$3,146.47

$469.78

6.65%

$3,455.61

$1,108.62

6.34%

$3,152.02

$1,046.19

6.26%

$4,070.76

$1,446.17

6.16%

$4,691.22

$1,090.24

6.11%

$4,419.57

$836.96

6.11%

$4,000 $3,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$4,500

2008

$3,000 $2,500 $2,000

2009

$1,500 $1,000 $500 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$4,500 $4,000

2012

$3,500 $3,000 Volume ($MM)

REAL-TIME SNAPSHOT

STUDENT HOUSING

Rolling 12-mo. Total $5,000

2013

$2,500 $2,000 $1,500

2014

$1,000 $500 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

US Acq # Props Global Acq # Props

1

American Campus Communities Austin, TX

$423.73

9

$4,745.57

2

Scion Group

Chicago, IL

$385.33

14

$894.98

3

Starwood Capital Group

Greenwich, CT

$293.25

11

$28,810.86

4

Campus Advantage

Austin, TX

$282.68

9

$709.38

23

5

Harrison Street RE Capital

Chicago, IL

$268.44

6

$3,260.97

135

6

EdR

Memphis, TN

$245.80

5

$1,662.31

61

7

Candlebrook Properties

New York, NY

$219.57

5

$2,070.49

175

8

Lubert-Adler

Philadelphia, PA

$219.57

5

$4,352.70

304

9

Principal Financial

Des Moines, IA

$209.86

6

$12,998.60

326

10

Vesper Holdings

New York, NY

$194.80

7

$373.60

16

Location

US Acq # Props Global Acq # Props

Top Sellers Rank Buyer

190 35 1,370

MARKET PERFORMANCE ($MIL)

1

American Campus Communities Austin, TX

$571.75

25

$1,178.52

49

2

Harrison Street RE Capital

Chicago, IL

$280.89

6

$1,073.06

50

3

Landmark Properties

Athens, GA

$240.64

4

$515.34

10

4

Jeff Sutton

New York, NY

$222.73

2

$774.54

19

5

Harel Insurance Invts

Tel Aviv, Israel

$222.73

2

$1,032.29

16

6

SL Green

New York, NY

$222.73

2

$10,612.78

126

7

Tristate Equities

New York, NY

$222.73

2

$347.04

7

8

Trinitas Ventures

Lafayette, IN

$219.57

5

$260.57

7

9

Blue Vista Capital

Chicago, IL

$208.68

5

$942.83

45

10

ASB Capital

Bethesda, MD

$192.52

5

$1,496.07

39

HFF | 12

The Student Housing sector continues to build momentum crowing enviable liquidity as trailing twelve month volumes have well eclipsed $4 billion. During the first three quarters of 2015, private investors accounted for 48% of all acquisitions while also remaining active on the sell side. Institutions accounted for 36% of the buyer pool, 800 bps above the national average. Foreign capital remains muted in this property sector, with Canadians being the only country actively investing with significance. Barriers to entry resulted in few supply additions to the market and therefore pent-up demand began to aggregate. Demographic and economic trends point to continued growth in this niche sector.

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$4,419.57

28%

Q3 '15

$836.96

-23%

T12 Vol.

174

-4%

Q3 '15

34

-24%

T12 Vol.

30,678

13%

Q3 '15

5,582

-29%

T12 Vol.

$145,380.66

1%

Q3 '15

$164,599.11

12%

T12 Vol.

6.11%

-23

Q3 '15

6.22%

-13

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL) 2007

$25,000

$20,000 Volume ($MM)

HISTORICAL MARKET TRENDS

Year

2008 $15,000

2009

$10,000

$5,000 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$20,000 $18,000 2012

$14,000 Volume ($MM)

REAL-TIME SNAPSHOT

$16,000

$12,000

2013

$10,000 $8,000 $6,000

2014

$4,000 $2,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

US Acq # Props Global Acq # Props

1

Northstar Healthcare

Englewood, CO

$3,637.12

299

$3,676.62

300

2

Brookdale Senior Living

Brentwood, TN

$3,589.10

244

$5,166.13

362

3

NorthStar Realty Finance

New York, NY

$3,137.44

177

$14,775.49

762

4

Omega Healthcare Investors

Cockeysville, MD

$2,431.76

413

$4,377.19

675

5

Welltower

Toledo, OH

$2,193.52

98

$16,906.56

927

6

HCP Inc

Irvine, CA

$1,964.44

57

$20,499.79

1,066

7

Ventas

Chicago, IL

$1,708.54

75

$19,614.21

1,024

8

CNL Financial Group

Orlando, FL

$1,380.26

56

$10,825.55

425

9

Newcastle

New York, NY

$1,299.29

66

$1,777.15

99

10

New Senior Investment Group New York, NY

$1,273.05

58

$1,273.05

58

Top Sellers Rank Buyer

T12 Vol.

Qtr. Vol.

Avg. Cap

$14,180.96

$7,331.73

11.24%

$15,131.03

$1,351.84

10.74%

$15,720.07

$1,694.46

10.98%

$11,064.94

$686.91

7.20%

$5,308.34

$1,575.13

7.97%

$4,905.03

$948.53

8.68%

$3,751.99

$541.42

8.66%

$3,572.78

$507.70

8.72%

$2,559.28

$561.63

9.09%

$2,105.86

$495.12

9.39%

$1,781.70

$217.25

9.53%

$3,045.53

$1,771.53

10.21%

$2,798.39

$314.49

9.95%

$3,862.12

$1,558.85

9.77%

$6,103.43

$2,458.56

9.65%

$6,368.42

$2,036.53

9.40%

$11,265.91

$5,211.97

9.15%

$20,659.34

$10,952.28

9.07%

$27,347.72

$9,146.93

9.11%

$27,684.28

$2,373.09

8.87%

$23,687.72

$1,215.42

8.65%

$14,498.64

$1,763.20

8.56%

$8,099.73

$2,748.02

8.28%

$11,894.57

$6,167.93

8.26%

$12,063.20

$1,384.05

8.49%

$12,024.31

$1,724.31

8.03%

$13,953.69

$4,677.41

7.90%

$12,527.12

$4,741.35

7.66%

$13,593.00

$2,449.93

7.56%

$15,447.57

$3,578.88

7.61%

$18,736.09

$7,965.93

7.53%

$18,403.16

$4,408.42

7.42%

$20,452.17

$4,498.93

7.72%

$24,997.29

$8,124.00

7.97%

$20,077.47

$3,046.11

7.96%

Trailing twelve month volumes are approximately $20 billion in the Seniors Housing sector. Price per unit has risen as new deliveries take the highest share of sales. Listed REITs accounted for 60% of all acquisitions during the first three quarters of the year. Private investors were net sellers in this time period. The aging population paired with housing preferences and needs are creating an attractive outlook from both domestic and international investors. Expect an increased participation from an array of foreign equity sources, particularly from Asian capital, who have have injected over $110 million into the sector over the past 24 months.

MARKET PERFORMANCE ($MIL) Location

US Acq # Props Global Acq # Props

1

Fortress

New York, NY

$3,600.42

159

$17,715.99

1,008

2

Emeritus

Seattle, WA

$2,431.65

194

$4,736.05

351

3

Aviv REIT

Chicago, IL

$1,740.34

333

$1,772.54

354

4

G-A Healthcare REIT II

Newport Beach, CA

$1,249.82

65

$3,998.75

245

5

ARC Healthcare Trust

New York, NY

$1,185.49

47

$2,564.81

115

6

Chartwell Retirement Residences Mississauga, Canada $1,115.40

43

$1,797.62

77

7

Formation Capital

Atlanta, GA

$1,083.25

81

$1,284.76

103

8

Safanad

Geneva, Switzerland

$1,012.00

80

$1,012.00

80

9

Welltower

Toledo, OH

$971.37

50

$2,840.80

197

10

Brookdale Senior Living

Brentwood, TN

$943.24

21

$1,022.48

29

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$20,077.47

7%

Q3 '15

$3,046.11

-63%

T12 Vol.

1,627

23%

Q3 '15

202

-75%

T12 Vol.

169,269

24%

Q3 '15

21,593

-73%

T12 Vol.

$121,904.62

7%

Q3 '15

$128,590.90

-13%

T12 Vol.

7.96%

43

Q3 '15

7.59%

-75

HFF | 13

SENIORS HOUSING

$30,000

ATLANTA, GEORGIA

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 88%

2009

2010

Occupancy and Absorption Atlanta apartments were 94.8% occupied in the third quarter of 2015, 140 basis points above the long-term average of 93.4%. Atlanta is expected to have finished 2015 at 94.5% occupancy. In 2016, occupancy is expected to moderate to 94.1% but remain above 94% throughout the forecast period (2016-2018). Absorption has outpaced new supply since 2012 because of the great job growth Atlanta has experienced. As of the third quarter, Atlanta absorbed 9,997 units, leaving a deficit of supply of nearly 3,000 units. Through the end of 2015, absorption is expected to have increased to 11,372 units and average 9,366 units per year over the next three years.

2016

2017

2018

Forecast

Rent/Unit/Mo.

$1,000 $800 $600

2009

2010

2011

2012

Effective Rent Growth

2013

2014

Forecast

2015

2016

2017

2018

Long-Term Average

8% 6%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

$0

4% 2% 0% -2% -4% -6% -8% -10%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast 14,000 12,000 10,000

Units

Most of the new supply was delivered into the Buckhead, Midtown and Downtown submarkets, in which 4,770 units are expected to deliver, according to Axiometrics’ identified supply. Over the next three years, new supply will average 9,552 units per year, peaking in 2016 with 12,488 units. Though new supply continues to increase, currently delivery totals remain below the pre-recession average of 11,668 units per year.

2015

$200

COMPLETIONS & NET ABSORPTION

After recovering later than most major U.S. metros, apartment construction in Atlanta has been gaining momentum. More than 7,000 units have been delivered to the Atlanta market, as of third quarter of 2015. Atlanta is expected to have finished the year with 9,640 new units, roughly 1,000 more units than 2014.

2014

$400

Atlanta was among the top markets for job gain during the third quarter of 2015, adding more than 76,000 jobs (3.0% annual growth). Atlanta is expected to have finished 2015 among the top three markets for job gain, adding about 83,700 jobs, a 3.3% increase over 2014. Looking forward, job gain is expected to moderate to 76,115 jobs in 2016 and average 63,500 jobs per year through 2018. Development

2013

$1,200

RENTAL RATES

Atlanta is ranked fourth in the number of Fortune 500 companies headquartered within the city. These companies include The Coca-Cola Company, Home Depot, UPS and Delta Airlines, and they, along with many more, have produced phenomenal job growth recently.

2012

Effective Rental Rates

$1,400

Overview

2011

8,000 6,000 4,000 2,000 0 2009 2010 2011 2012 2013 2014

2015 2016 2017 2018

HFF | 14

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast 250 200

YoY Change (%)

Atlanta has had strong rent growth, despite the increase of new supply. Annual effective rent growth was 6.9% in the third quarter, beating the non-recessionary average of 2.9%, with full-year growth expected to be right around the thirdquarter mark. Looking forward, rent growth is expected to moderate, averaging 3.9% over the next three years.

EMPLOYMENT & POPULATION TOTALS

Rental Rates

150 100 50 0 -50 -100 -150

2009 2010 2011 2012 2013 2014

2015 2016 2017 2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$8,000

Year

T12 Vol.

Qtr. Vol.

2007

$4,209.05

$772.02

6.62%

$3,917.25

$960.20

6.36%

$4,104.10

$1,277.09

6.36%

$4,482.60

$1,473.29

6.31%

$4,100.26

$389.68

6.11%

$3,776.20

$636.14

6.30%

$2,958.23

$459.13

6.30%

$1,816.24

$331.29

6.42%

$1,474.60

$48.04

6.54%

$2,000

$950.44

$111.98

6.72%

$797.26

$305.95

7.32%

$1,000

$638.45

$172.48

7.40%

$718.26

$127.85

7.58%

$779.83

$173.55

7.39%

$806.79

$332.91

7.14%

$1,167.23

$532.92

6.99%

$1,279.27

$239.89

6.68%

$1,879.64

$773.91

6.75%

$2,128.39

$581.67

6.82%

$2,137.27

$541.80

6.67%

$2,517.36

$619.98

6.72%

$2,680.13

$936.69

6.50%

$2,934.94

$836.48

6.38%

$3,370.04

$976.90

6.28%

$3,594.90

$844.84

6.18%

$3,580.41

$922.20

6.37%

$3,714.94

$971.00

6.48%

$3,887.38

$1,149.35

6.77%

$4,231.46

$1,188.91

6.82%

$4,056.27

$747.01

6.95%

$4,569.69

$1,484.43

6.82%

$5,918.68

$2,498.33

6.69%

$6,534.72

$1,804.95

6.72%

$6,817.74

$1,030.03

6.63%

$7,092.14

$1,758.82

6.64%

$6,000 $5,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$7,000

2008

$4,000 $3,000

2009

2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$7,000 2012

$5,000 Volume ($MM)

REAL-TIME SNAPSHOT

$6,000

$4,000

2013

$3,000 2014

$2,000 $1,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

ATL Acq # Props Global Acq # Props

1

Clarion Partners

New York, NY

$310.23

8

$27,415.19

1,080

2

Carroll Organization

Atlanta, GA

$307.13

9

$2,213.58

60

3

Radco Cos

Atlanta, GA

$305.70

14

$1,010.85

50

4

CWS Capital Partners

Newport Beach, CA

$281.83

5

$2,488.91

82

5

Cortland Partners

Atlanta, GA

$255.56

5

$2,323.13

84

6

Resource America

Philadelphia, PA

$234.06

7

$2,026.77

114

7

Strata Equity Group

San Diego, CA

$233.00

4

$1,542.58

44

8

TriBridge Residential

Atlanta, GA

$230.00

6

$2,001.04

71

9

Cocke Finkelstein

Atlanta, GA

$225.73

11

$628.46

50

10

Bridge Investment Group

Salt Lake City, UT

$222.68

10

$3,189.59

152

Top Sellers Rank Buyer

Avg. Cap

Atlanta’s Business Chronicle described its apartment market as “smoking hot” earlier last year. With rents rising in its Buckhead and Midtown markets, demand has spilled over into suburban locales. Private investors made up 53% of all acquisitions in the first nine months of 2015, while the less active Institutions made up 30%, who were more interested in selling. During the first three quarters of 2015, foreign firms together invested a whopping $650 million. Fundamentals remain strong across the board despite rising housing and business costs. It’s central location in the Southwest coupled with its economic leader status make the area attractive to relocating and expanding businesses.

MARKET PERFORMANCE ($MIL) Location

ATL Acq # Props Global Acq # Props

1

Worthing Companies

Atlanta, GA

$402.12

7

$1,234.74

37

2

Gables Residential

Atlanta, GA

$310.23

8

$5,178.01

121

3

The Connor Group

Dayton, OH

$303.36

9

$1,643.99

71

4

Pollack Shores RE Group

Atlanta, GA

$299.10

6

$578.85

12

5

GE Capital

Norwalk, CT

$277.58

6

$56,242.32

3,402

6

Morgan Stanley

New York, NY

$254.98

5

$68,884.75

1,641

7

Centennial Holding Co

Atlanta, GA

$210.16

6

$877.32

8

Orion Residential

Deerfield, IL

$207.00

3

$1,041.42

37

9

Wilkinson RE Advisors

Atlanta, GA

$178.56

6

$556.91

34

10

Harbor Group Int'l

Norfolk, VA

$176.00

4

$4,172.34

147

26

Sources: Real Capital Analytics, HFF Research

actual Volume

chg vs prior

T12 Vol.

$7,092.14

55%

Q3 ‘15

$1,758.82

71%

T12 Vol.

276

24%

Q3 '15

67

16%

T12 Vol.

73,296

26%

Q3 '15

17,319

35%

$/unit

T12 Vol.

$97,066.34

19%

Q3 '15

$98,658.59

Avg. Cap

T12 Vol.

6.64%

-17

Q3 '15

6.47%

-38

# Trades Units

20%

HFF | 15

AUSTIN, TEXAS

Occupancy

96%

Forecast

Long-Term Average

OCCUPANCY

95% 94% 93% 92% 91% 90%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,400

2015

Development Austin was one of the first markets to receive new apartment supply after the recession. The market has seen a consistent amount of supply delivered each year from 2013-2015, approximately 10,000 new units per year. A high percentage of the new supply has been delivered into the Central submarket, which encompasses Downtown Austin. According to Axiometrics’ identified supply, the Central submarket received about 1,050 units in 2015, and an additional 1,100 units in 2016. Austin’s new supply is expected to moderate over the next three years, averaging 5,994 units per year, nearly half of what the market has seen in recent years.

Rent/Unit/Mo.

$1,000 $800 $600 $400 $200 $0 2009

2010

2011

2012

2013

2014

2015

Forecast

Effective Rent Growth

10%

Long-Term Average

8% 6%

YoY Change (%)

The population growth was a result of phenomenal job growth. Austin’s high concentration of government, technology and education sectors have fueled job growth averaging 3.9% over the past four years. Austin employers added 30,633 jobs (3.3% growth) over the four quarters ending the third quarter of 2015. Job growth is forecast to moderate over the next three years, but remain healthy, averaging 2.7% annually.

ANNUAL RENTAL RATE GROWTH

The Austin apartment market was among the first to recover after the recession. Tremendous population growth of 12.5% during the past four years, compared to the national average of 3.1%, has fueled demand for housing in the market.

RENTAL RATES

$1,200

Overview

4% 2% 0% -2% -4% -6% -8% -10% 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Rental Rates Despite the large amount of new supply, annual rent growth was 5.2% as of the third quarter of 2015, outpacing its historical average of 1.6%. Austin is expected to have finished 2015 with an annual rent growth of 4.7%. Through the forecast, annual rent growth is expected to moderate to 3.6% in 2017 and pick back up to 5.1% in 2018.

HFF | 16

Completions Net Absorption Completion Forecast Net Absorption Forecast 12,000 10,000

Units

8,000 6,000 4,000 2,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast 100 80

YoY Change (%)

Absorption has been fairly even with supply over the last two years, after three years of absorption outpacing supply. About 3,000 units were absorbed in the third quarter, outpacing new supply by nearly 1,000 units. Absorption is expected to average close to 6,000 units per year in 2016-2018.

EMPLOYMENT & POPULATION TOTALS

Occupancy remained above 95% during the third quarter of 2015, outperforming its historical average of 93.9%. Austin is expected to have finished 2015 at 95.2% occupancy. Occupancy is expected to moderate to 94.7% in 2016, but average 95.0% over the next three years.

COMPLETIONS & NET ABSORPTION

Occupancy and Absorption

60 40 20 0 -20 -40 2009

2010

2011

2012

2013

2014

2015 2016 2017 2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$3,500

T12 Vol.

Qtr. Vol.

2007

$1,600.51

$337.83

6.14%

$1,632.44

$201.44

6.07%

$1,401.87

$328.08

5.92%

$1,377.38

$510.04

6.07%

$1,347.52

$307.97

6.57%

$1,368.92

$222.84

7.10%

$1,598.38

$557.54

7.28%

$1,241.35

$153.00

0.00%

$960.77

$27.40

0.00%

$769.94

$32.00

0.00%

$354.16

$141.76

0.00%

$265.66

$64.50

0.00%

$308.43

$70.18

0.00%

$394.68

$118.25

7.29%

$539.59

$286.67

6.61%

$588.08

$112.98

6.41%

$625.64

$107.74

6.39%

$653.05

$145.65

6.25%

$587.07

$220.69

5.98%

$2,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$3,000

Year

2008

$2,000 $1,500

2009

$1,000 $500

2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$3,000 2012

$2,000 Volume ($MM)

REAL-TIME SNAPSHOT

$2,500

2013 $1,500

$1,000

2014

$500

$0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

AUS Acq # Props Global Acq # Props

1

Clarion Partners

New York, NY

$197.08

5

$27,415.19

2

Northland

Newton, MA

$169.65

2

$1,715.81

1,080 63

3

Starlight Investments

Etobicoke, Canada

$163.55

4

$3,076.79

199

4

Weinstein Properties

Glen Allen, VA

$142.10

3

$976.53

5

Blackstone

New York, NY

$135.79

4

$191,599.69

6

MIG Real Estate

Newport Beach, CA

$120.45

3

$1,364.63

7

Griffis Group

Denver, CO

$118.75

3

$1,179.18

45

8

Intercontinental RE

Boston, MA

$118.30

3

$4,044.43

115

33 6,868 65

9

Heitman

Chicago, IL

$114.50

2

$12,705.34

298

10

Nimes Capital

Los Angeles, CA

$109.10

4

$336.37

10

Top Sellers Rank Buyer

Avg. Cap

$979.96

$505.87

5.92%

$1,131.36

$259.15

5.83%

$1,438.01

$452.30

5.85%

$2,201.00

$983.68

5.97%

$2,600.18

$905.05

5.91%

$2,589.44

$248.41

5.96%

$2,471.02

$333.88

6.02%

$2,017.57

$530.23

5.93%

$1,843.89

$731.37

6.29%

$2,099.81

$504.34

6.25%

$2,329.88

$563.95

6.04%

$2,213.91

$414.26

6.13%

$2,225.03

$742.48

6.00%

$2,750.08

$1,029.39

5.99%

$2,843.95

$657.83

5.81%

$3,070.63

$640.93

5.84%

Austin’s multi-housing market is enjoying record liquidity as it gains favor with investors. During the first three quarters of 2015, private investors accounted for 61% of all acquisitions. Listed REITs were net sellers during this time period. While permits for new multi-housing units are approaching the most in 30 years, Austin’s multi-housing market remains stable thanks to its strong fundamentals. High-tech employment is up by one-third over the past five years, triple the national increase and a trend that will propel the area over the coming years. The aggressive increase in house prices has left affordability much lower than in other parts of Texas. Demand for multi-housing units has therefore accommodated the heightened levels of deliveries. MARKET PERFORMANCE ($MIL)

Location

AUS Acq # Props Global Acq # Props

1

Gables Residential

Atlanta, GA

$278.58

7

$5,178.01

121

2

Investors Management

Sherman Oaks, CA

$251.35

3

$1,183.64

60

3

Greystar RE Partners

Charleston, SC

$181.42

5

$3,346.12

90

4

McDowell Properties

San Francisco, CA

$155.07

8

$1,294.97

61

5

Ares Management

Los Angeles, CA

$142.17

7

$7,553.04

1,044

6

Abacus Capital Group

New York, NY

$126.12

3

$629.38

19

7

Hamilton Zanze & Co

San Francisco, CA

$105.73

2

$788.53

34

8

Carlyle Group

Washington, D.C.

$105.00

3

$36,421.78

1,029

9

Principal Financial

Des Moines, IA

$104.50

1

$12,333.17

378

10

Riverside Resources Corp

Austin, TX

$104.50

1

$270.70

7

Sources: Real Capital Analytics, HFF Research

Volume # Trades Units

actual

chg vs prior

T12 Vol.

$3,070.63

39%

Q3 '15

$640.93

-3%

T12 Vol.

113

3%

Q3 '15

23

-21%

T12 Vol.

26,652

Q3 '15

5,831

3% 6%

$/unit

T12 Vol.

$121,107.56

2%

Q3 '15

$115,495.25

-16%

Avg. Cap

T12 Vol.

5.84%

-30

Q3 '15

0.00%

0

HFF | 17

BOSTON, MASSACHUSETTS

Occupancy

Forecast

Long-Term Average

97% 96%

OCCUPANCY

96% 95% 95% 94% 94% 93% 93% 92% 92%

2009

2010

2013

2014

2015

2016

2017

2018

Forecast

Rent/Unit/Mo.

$2,500

RENTAL RATES

Boston employers added close to 59,000 jobs annually in the third quarter of 2015, and are expected to have finished 2015 with nearly 44,000 jobs added, compared to 2014’s 39,600 added jobs. According to Bureau of Labor Statistics, the Professional & Business and Education & Health Services sectors each added approximately 14,000 jobs to the economy over the past year. Boston’s job growth is expected to remain healthy through the forecast, averaging 1.7% growth (46,000 jobs per year) from 2016-2018.

2012

Effective Rental Rates

$3,000

Overview

2011

$2,000 $1,500 $1,000 $500 $0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Rental Rates Boston’s annual effective rent growth was 4.7% in the third quarter, outperforming the long-term average of 3.1%. By the end of 2015, Boston’s effective rent level was expected to rise to $2,215 per unit, an increase of 4.3% over 2014. Looking ahead, annual effective rent growth is expected to average 4.3% from 2016-2018.

HFF | 18

Long-Term Average

YoY Change (%)

6% 4% 2% 0% -2% -4% -6% -8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Completions Net Absorption Completion Forecast Net Absorption Forecast 12,000 10,000 8,000

Units

Absorption outpaced new supply in 2014 and is expected to continue to do so through 2016. Boston has absorbed 9,460 units as of the third quarter and is outpacing new supply by roughly 3,000 units. Historically, Boston absorbs 2,900 units annually, but will average 5,700 units annually over the next three years, most of which will be new supply.

COMPLETIONS & NET ABSORPTION

Occupancy has remained strong, reaching 96.2% in the third quarter, meaning the market is absorbing the new supply well. Boston’s high demand for apartments means occupancy is not expected to drop below 95% through the forecast.

Forecast

Effective Rent Growth

8%

6,000 4,000 2,000 0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast 80 60

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

A total of 6,395 units were delivered this year, as of the third quarter of 2015. Last year, Boston is expected to have delivered about 8,300 units of which 1,529 units are targeted for the Central City submarket, according to Axiometrics’ identified supply. New supply is expected to moderate to more historical levels by 2018.

ANNUAL RENTAL RATE GROWTH

Development

40 20 0 -20 -40 -60 -80 -100

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$3,500

T12 Vol.

Qtr. Vol.

2007

$1,706.60

$604.46

6.20%

$1,773.11

$258.92

6.23%

$2,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$3,000

Year

2008

$2,000 $1,500

2009

$1,000 $500

2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$2,500 2012

Volume ($MM)

REAL-TIME SNAPSHOT

$2,000

$1,500

2013

$1,000 2014 $500

$0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

BOS Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$597.08

10

$28,971.26

1,566

2

AEW Capital

Boston, MA

$207.72

1

$33,564.90

1,768

3

Prudential RE Investors

Madison, NJ

$197.00

1

$43,844.86

1,152

4

Blackstone

New York, NY

$190.80

4

$191,599.69

6,868

5

DSF Advisors

Waltham, MA

$172.00

2

$852.97

15

6

Bell Partners

Greensboro, NC

$154.16

3

$6,248.03

264

7

Akelius Fastigheter AB

Danderyd, Sweden

$150.00

1

$5,387.73

678

8

ASB Capital

Bethesda, MD

$147.00

3

$3,372.16

91

9

National Development

Newton, MA

$147.00

3

$1,211.95

45

10

Mesirow Financial

Chicago, IL

$145.00

1

$2,107.61

36

Top Sellers Rank Buyer

Avg. Cap

$1,848.59

$653.42

6.60%

$3,054.87

$1,538.08

6.71%

$2,556.00

$105.58

7.33%

$2,455.34

$158.27

7.03%

$1,910.18

$108.26

6.26%

$556.87

$184.77

5.83%

$460.21

$8.91

5.51%

$321.95

$20.02

5.71%

$285.86

$72.17

6.27%

$338.01

$236.91

6.48%

$334.42

$5.33

6.86%

$405.71

$91.31

6.40%

$539.70

$206.16

6.48%

$720.68

$417.89

6.43%

$972.24

$256.89

6.13%

$1,331.69

$450.76

6.12%

$1,374.02

$248.49

6.03%

$1,470.04

$513.91

5.86%

$1,426.73

$213.58

5.83%

$1,529.70

$553.73

5.71%

$2,044.87

$763.66

5.59%

$1,990.34

$459.38

5.37%

$2,769.93

$993.17

5.28%

$2,570.52

$354.32

5.59%

$2,148.41

$341.55

5.50%

$2,276.00

$586.96

5.68%

$1,486.96

$204.13

5.98%

$1,685.81

$553.17

5.62%

$1,700.35

$356.10

5.10%

$1,523.04

$409.64

5.07%

$2,249.43

$930.52

4.95%

$2,338.43

$642.17

4.90%

$2,642.46

$660.12

5.10%

Boston’s trailing twelve month volumes are racing towards 2007 levels. Private investors accounted for 36% of all acquisitions in the first nine months of 2015, more than three times the share of listed REITs, who were net sellers in this time period. Institutions have shown a larger appetite than the national average of 28%, representing 43% of the buyer pool. Boston remains popular among young adults, who are often lured by its transit and pedestrian-oriented lifestyle. Boston’s total nonfarm employment has surpassed its pre-recession peak and continues to expand steadily. Healthcare, high tech and financial services are the main drivers of the economy and bring very educated, high-wage earners to the local multihousing market. MARKET PERFORMANCE ($MIL)

Location

BOS Acq # Props Global Acq # Props

1

Home Properties

Rochester, NY

$644.83

11

$10,666.45

238

2

Wood Partners

Marietta, GA

$238.20

5

$3,976.93

95

3

AvalonBay

Arlington, VA

$208.88

5

$7,273.52

125

4

CC&F

Boston, MA

$207.72

1

$528.24

14

5

Gables Residential

Atlanta, GA

$200.56

3

$5,178.01

121

6

Canyon Partners

Los Angeles, CA

$197.00

1

$2,713.24

51

7

Praedium Group

New York, NY

$190.80

4

$6,554.34

491

8

TGM Associates

New York, NY

$152.25

3

$1,705.45

61

9

Lincoln Property Co

Dallas, TX

$150.00

1

$9,305.96

273

10

Mount Vernon Co

Boston, MA

$147.00

3

$201.72

11

Sources: Real Capital Analytics, HFF Research

Volume

actual

chg vs prior

T12 Vol.

$2,642.46

55%

Q3 '15

$660.12

3%

# Trades

T12 Vol. Q3 '15

20

-5%

Units

T12 Vol.

10,794

19%

2,158

-15%

$/unit

T12 Vol.

$253,493.40

25%

Q3 '15

$308,085.51

9%

Q3 '15

Avg. Cap

105

40%

T12 Vol.

5.10%

0%

Q3 '15

4.71%

-16%

HFF | 19

CHARLOTTE, NORTH CAROLINA

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 88% 87% 2009

2010

HFF | 20

2018

2016

2017

2018

Forecast

Rent/Unit/Mo.

$400

2009

2011

2012

2013

2014

Forecast

2015

Long-Term Average

6%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2010

Effective Rent Growth

4% 2% 0% -2% -4% -6% -8% -10%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

9,000 8,000 7,000 6,000

Units

Apartments in Charlotte achieved an average annual effective rent growth rate of 6.1% in the third quarter. The year is expected to have ended at 5.5%, well above the long-term average of 1.0%. Excluding negative rent growth years, Charlotte achieved an average rent-growth rate of 3.8% from 1997-2014. Annual effective rent growth in the three-year outlook is expected to average 4.1%, close to the growth-year average.

COMPLETIONS & NET ABSORPTION

Rental Rates

2017

8%

5,000 4,000 3,000 2,000 1,000 0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

80 60

YoY Change (%)

Almost 3,000 units were absorbed in the third quarter, outpacing supply by some 500 units. The year 2015 was expected to end at 8,500 units absorbed, staying close to equilibrium with apartment supply. Charlotte’s long-term absorption has averaged about 4,000 units – in balance with supply. Absorption is expected to average 4,600 units per year in the three-year outlook.

2016

$600

$0

EMPLOYMENT & POPULATION TOTALS

Charlotte’s apartments achieved an average occupancy rate of 95.7% in the third quarter and are expected to have finished 2015 with a rate of 95.2%. The metro’s 1997-2014 average occupancy rate was 92.7%, and it is forecast to average 95.1% in the three-year outlook.

2015

$800

Some 2,300 new apartment units were delivered to Charlotte in the third quarter of 2015. The annual total was expected to be about 8,500 units, more than twice the long-term average of 4,000 units annually.

Occupancy and Absorption

2014

$200

Development

The metro is forecast to average nearly 5,000 units annually from 2016-2018, with supply levels gradually moderating until 2018 before picking up past the outlook period.

2013

$1,000

RENTAL RATES

Job growth in Charlotte was 3.6% (on an annual basis) in the third quarter of 2015, as employers added 38,400 jobs. The third-quarter rate was strong compared to the metro’s 1997-2014 average of 1.6%. Excluding negative job-growth years, the long-term average was 3.2%. The metro is expected to have ended 2015 with job growth of 3.0% and average 2.1% in the three-year outlook.

2012

Effective Rental Rates

$1,200

Overview

2011

40 20 0 -20 -40 -60 -80

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$2,000

Year

T12 Vol.

Qtr. Vol.

2007

$911.90

$405.92

5.93%

$1,003.26

$278.67

6.17%

$1,600 $1,400 Volume ($MM)

HISTORICAL MARKET TRENDS

$1,800

2008

$1,200 $1,000 $800

2009

$600 $400 $200 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,600 2012

$1,200 Volume ($MM)

REAL-TIME SNAPSHOT

$1,400

$1,000 2013

Avg. Cap

$1,219.93

$404.45

6.18%

$1,346.47

$257.42

5.98%

$1,098.93

$158.39

6.03%

$863.72

$43.47

5.65%

$502.23

$42.96

5.65%

$273.15

$28.34

6.49%

$114.77

$0.00

0.00%

$79.20

$7.90

0.00%

$36.24

$0.00

0.00%

$62.98

$55.08

0.00%

$62.98

$0.00

0.00%

$133.88

$78.80

0.00%

$146.33

$12.45

0.00%

$239.18

$147.93

6.31%

$408.04

$168.86

6.76%

$442.00

$112.77

7.01%

$615.15

$185.60

6.66%

$572.67

$105.45

6.60%

$626.17

$222.36

6.44%

$683.10

$169.70

6.23%

$693.83

$196.33

6.21%

$919.52

$331.13

6.05%

$1,083.06

$385.91

6.00%

$800

$1,008.67

$95.30

6.20%

$988.68

$176.34

6.34%

$600

$1,359.67

$702.12

6.75%

2014

$400 $200 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

CHA Acq # Props Global Acq # Props

1

Cortland Partners

Atlanta, GA

$321.10

10

$2,445.03

87

2

Starwood Capital Group

Greenwich, CT

$203.26

8

$35,786.85

1,499

3

Centennial Holding Co

Atlanta, GA

$195.75

5

$1,869.14

61

4

Milestone APTS REIT

Dallas, TX

$150.33

5

$1,187.37

33

5

Lone Star

Dallas, TX

$138.08

6

$28,905.95

1,566

6

UBS

Zurich, Switzerland

$115.23

2

$27,129.97

534

7

Berkshire Property Advisors

Boston, MA

$115.23

2

$4,502.20

124

8

The Connor Group

Dayton, OH

$112.95

3

$2,489.23

99

9

TriBridge Residential

Atlanta, GA

$109.27

2

$2,011.29

72

10

Associated Estates

Cleveland, OH

$98.38

3

$1,468.67

43

Top Sellers Rank Buyer

$1,235.33

$261.57

7.06%

$1,278.31

$138.27

6.78%

$1,335.66

$233.70

6.85%

$1,254.70

$621.16

6.55%

$1,380.97

$387.84

6.02%

$1,556.67

$313.98

6.03%

$1,899.35

$576.37

6.06%

Approaching the $2 billion mark, trailing 12 month volumes in Charlotte are at a record high. This city has become a major U.S. financial center, boasting the largest banking center in the U.S. after New York City. Industry diversification coupled with its low cost of doing business drives many companies to move and expand here. Private investors made up 49% of all acquisitions in the first nine months of the year, while the less active Institutions made up 18% of the buyer pool. Canadian and Swiss seem eager for a Charlotte footprint and have together invested $240 million during the first nine months of 2015. As Charlotte remains an attractive destination for young professionals, demand for apartments remains high, triggering rent growth and new developments. MARKET PERFORMANCE ($MIL)

Location

CHA Acq # Props Global Acq # Props

1

Landmark ATA

Tampa, FL

$251.17

9

$2,126.23

86

2

McDowell Properties

San Francisco, CA

$233.38

9

$1,294.97

61

3

Bell Partners

Greensboro, NC

$187.58

7

$6,118.14

250

4

Crescent Communities

Charlotte, NC

$167.48

3

$3,053.48

119

5

JLB Partners

Dallas, TX

$147.27

2

$844.01

14

6

Charter Properties

Charlotte, NC

$143.50

4

$321.05

12

7

DRA Advisors

New York, NY

$138.08

6

$17,102.36

712

8

Northwood Investors

New York, NY

$98.38

3

$2,407.30

33

9

Ravin Partners

Charlotte, NC

$98.38

3

$363.11

8

10

Associated Estates

Cleveland, OH

$98.13

3

$3,619.71

117

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades

chg vs prior

T12 Vol.

$1,899.35

42%

Q3 '15

$576.37

84%

T12 Vol.

75

-12%

Q3 '15

19

27%

T12 Vol.

18,579

0%

Q3 '15

4,159

4%

$/unit

T12 Vol.

$98,626.66

13%

Q3 '15

$126,285.93

Avg. Cap

T12 Vol.

6.06%

-79

Q3 '15

6.47%

38

Units

58%

HFF | 21

CHICAGO, ILLINOIS

Occupancy

Forecast

Long-Term Average

96%

OCCUPANCY

95% 94% 93% 92% 91% 90%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,800

2015

$1,600

Axiometrics expects job growth to have finished 2015 at 1.3%, moderating slightly from 2014’s 1.4% growth. Job growth is expected to rebound in the outlook, increasing to 1.6% and 1.8% in 2016 and 2017, respectively. The healthy job growth will help fuel Chicago’s occupancy, pushing it to remain above 95% during the short-term outlook.

Rent/Unit/Mo.

Chicago’s job growth remained relatively unchanged in the third quarter of 2015, adding 40,233 jobs over the past four quarters, for a job-growth rate of 1.1%.

$1,400

RENTAL RATES

Overview

$1,200 $1,000 $800 $600 $400 $200 $0

2009

2010

2011

2012

2013

2014

2015

Absorption outpaced new supply by more than double in 2014. However, absorption moderated in 2015 and was fairly even with new supply through the third quarter. Looking ahead, absorption is expected to outpace new supply through 2016. While job growth is expected to be strong in 2017, absorption will slow due to occupancy moderating from the peak. Rental Rate Annual effective rent growth bounced back to 3.9% in the third quarter of 2015, improving from 2.3% in 2014. Going forward, Chicago’s annual effective rent should maintain a pace close to 4.0% through 2017, and then slow a bit in 2018 as supply catches up with demand.

HFF | 22

Long-Term Average

YoY Change (%)

6% 4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

16,000 14,000 12,000

Units

Despite the increase in new supply, Chicago occupancy remained above 95% in the third quarter of 2015. The rate is expected to remain strong during the forecast period due to an improvement in job growth. Occupancy in the next three years is expected to average 95.2%, well above the long-term average of 93.8%.

COMPLETIONS & NET ABSORPTION

Occupancy and Absorption

Forecast

Effective Rent Growth

8%

10,000 8,000 6,000 4,000 2,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

100 50

YoY Change (%)

The urban core has averaged close to 1,800 units delivered per year from 20132015. Expect closer to 3,000 units to be delivered in the urban core in 2016, with another 1,600 already under way for 2017 delivery.

EMPLOYMENT & POPULATION TOTALS

The 7,000-plus units expected to deliver during 2015 represent a significant increase from the 4,581 that came to market in 2014. New supply is expected to average 7,536 units per year over the next three years.

ANNUAL RENTAL RATE GROWTH

Development

0 -50 -100 -150 -200

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$4,000

Year

T12 Vol.

Qtr. Vol.

2007

$3,024.80

$1,368.83

6.22%

$2,850.59

$357.70

6.16%

$3,000 $2,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$3,500

2008

$2,000 $1,500

2009

$1,000 $500 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$3,000 2012

$2,000 Volume ($MM)

REAL-TIME SNAPSHOT

$2,500

2013 $1,500

$1,000

2014

$500

$0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

CHI Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$512.80

9

$28,971.26

2

Crescent Heights

Miami, FL

$382.00

3

$5,227.22

74

3

Heitman

Chicago, IL

$328.23

1

$12,705.34

298

4

Georgetown Company

New York, NY

$214.25

1

$726.98

10

5

Investcorp

Manama, Bahrain

$197.41

4

$8,177.13

207

6

Invesco RE

Atlanta, GA

$188.35

2

$27,248.90

564

7

Home Properties

Rochester, NY

$158.00

3

$3,378.79

93

8

Planned Realty Group

Chicago, IL

$152.50

2

$152.50

2

9

F&F Realty Ltd

Skokie, IL

$151.09

2

$295.99

7

10

Hometown AM

Chicago, IL

$130.00

1

$502.51

20

Top Sellers Rank Buyer

1,566

Avg. Cap

$3,260.66

$903.40

6.18%

$3,067.55

$437.61

6.50%

$2,304.97

$606.26

6.50%

$2,147.61

$200.33

6.56%

$1,358.27

$114.07

6.75%

$1,100.05

$179.39

6.83%

$608.06

$114.27

6.87%

$544.34

$136.61

7.13%

$474.88

$44.60

7.22%

$497.26

$201.78

6.78%

$442.50

$59.51

6.90%

$368.55

$62.67

7.02%

$709.97

$386.02

6.56%

$864.11

$355.91

6.68%

$1,089.44

$284.83

6.51%

$1,725.27

$698.50

6.36%

$1,754.33

$415.08

6.51%

$2,269.18

$870.76

6.47%

$2,472.40

$488.06

6.45%

$2,220.02

$446.11

6.53%

$2,074.39

$269.45

6.43%

$2,196.98

$993.35

6.38%

$2,214.35

$505.43

6.51%

$2,311.52

$543.29

6.52%

$2,561.40

$519.33

6.64%

$2,331.50

$763.45

6.54%

$2,440.05

$613.99

6.32%

$2,297.88

$401.12

6.30%

$2,482.06

$703.51

6.18%

$2,724.28

$1,005.67

6.23%

$3,143.12

$1,032.83

6.35%

$3,443.98

$701.97

6.21%

$3,492.94

$752.47

6.11%

Chicago’s multi-housing market is benefitting from unprecedented liquidity given trailing twelve month volumes are registering an all-time high. Institutions represent the highest composition of buyers, accounting for 55% of all acquisitions during the first three quarters of 2015. Private buyers represented 38% of the buyer pool and were net sellers during this time. Despite a development boom earlier in 2015, the vacancy rate remains under 5%, as demographics continue to work in the market’s favor. With Motorola and fellow big tech names now well established downtown, expect the influx of young workers to continue as long as the roster of these companies expands.

MARKET PERFORMANCE ($MIL) Location

CHI Acq # Props Global Acq # Props

1

Home Properties

Rochester, NY

$562.10

10

$10,666.45

238

2

Related Companies

New York, NY

$333.93

2

$7,251.68

136

3

Marquette Cos

Naperville, IL

$237.06

4

$363.94

9

4

Fifield Realty Corp

Chicago, IL

$214.25

1

$1,581.65

19

5

Wood Partners

Marietta, GA

$214.25

1

$3,976.93

95

6

ASB Capital

Bethesda, MD

$197.15

3

$1,496.07

39

7

Waterton Associates

Chicago, IL

$181.05

4

$2,542.51

77

8

Morgan Stanley

New York, NY

$179.35

3

$68,884.75

1,641

9

JP Morgan

New York, NY

$179.02

2

$30,396.12

706

10

Golub & Co

Chicago, IL

$162.10

3

$1,491.91

34

Sources: Real Capital Analytics, HFF Research

Volume # Trades Units

actual

chg vs prior

T12 Vol.

$3,492.94

41%

Q3 '15

$752.47

7%

T12 Vol.

172

8%

Q3 '15

37

-33%

T12 Vol.

21,415

11%

Q3 '15

4,158

2%

$/unit

T12 Vol.

$165,424.27

28%

Q3 '15

$185,198.99

10%

Avg. Cap

T12 Vol.

6.11%

-7

Q3'15

5.56%

-51

HFF | 23

DALLAS/FORT WORTH, TEXAS

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 88%

2009

2010

Absorption has consistently outpaced new supply since 2010. While absorption is expected to have outpaced new supply by about 2,000 in 2015, the trend is expected to change course in 2016 with supply outpacing demand for the first time in seven years. The two numbers are expected to be back in balance in 2017.

2016

2017

2018

Forecast

2009

2011

2012

2013

2014

2015

Forecast

Rent/Unit/Mo.

Effective Rent Growth

Long-Term Average

6%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2010

8%

4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

25,000 20,000 15,000 10,000 5,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

250 200

YoY Change (%)

EMPLOYMENT & POPULATION TOTALS

HFF | 24

2018

$600

Rental Rates Annual effective rent growth during the third quarter was 6.3%. By the end of 2015, Dallas/Fort Worth’s annual effective rent level was expected to be $1,023 per unit per month, 6.0% growth over 2014. Axiometrics forecasts annual effective rent growth to average 4.1% over the next three years.

2017

$800

$0

Units

DFW apartments were 95.7% occupied during the third quarter of 2015. The metro’s high job growth has kept occupancy above the historical average of 92.9%. Going forward, occupancy is expected to average 94.6% over the next three years.

2016

$200

COMPLETIONS & NET ABSORPTION

Occupancy and Absorption

2015

$1,000

Development

The urban-core submarket in Dallas, Oak Lawn, has received a large percentage of the new supply, delivering 2,863 units in 2014 and another 2,467 units in 2015, according to Axiometrics’ identified supply. Though deliveries will persist in the urban core (3,000 more in 2016), they have started to ramp up in the suburban submarkets as well. The Plano/Allen/McKinney submarket will receive 2,656 new units in 2016, and the Richardson and North Irving submarkets will each receive close to 1,700 new units.

2014

$400

Population growth also has been robust. Over the past four years, the market’s population has grown by an average of 2.0% annually, compared to the national average of 0.8%. Developers have delivered almost 15,000 new units to Dallas-Fort Worth in each of the past two years, above the long-term average. Another 19,500 units are expected to have delivered during 2015. While Axiometrics forecasts deliveries to moderate to an average of 12,200 per year, don’t be surprised to see more apartment units on the way to keep pace with demand.

2013

$1,200

RENTAL RATES

Dallas-Fort Worth experienced phenomenal job growth last year, adding more than 100,000 jobs. The market’s job-growth was 3.2% in the third quarter of 2015, and the market is expected to have added 110,000 jobs for the year. With the addition of State Farm and Toyota to the Metroplex, annual job gains are not expected to fall below their historical average of 51,000 jobs anytime soon.

2012

Effective Rental Rates

$1,400

Overview

2011

150 100 50 0 -50 -100 -150

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$8,000

Year

T12 Vol.

Qtr. Vol.

2007

$4,674.32

$1,142.08

7.11%

$4,339.76

$912.52

7.14%

$6,000 $5,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$7,000

2008

$4,000 $3,000

2009

$2,000 $1,000 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$7,000 2012

$5,000 Volume ($MM)

REAL-TIME SNAPSHOT

$6,000

$4,000

2013

$3,000 2014

$2,000 $1,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

Blackstone

$527.79

18

$191,599.69

2

Highland Capital Management Dallas, TX

$328.08

16

$970.99

47

3

Invesco RE

Atlanta, GA

$304.96

5

$27,248.90

564

4

Brookfield AM

Toronto, Canada

$283.95

6

$53,757.11

1,142

5

CAF Capital Partners

Frisco, TX

$270.15

7

$390.70

11

6

BH Mgmt Services

Des Moines, IA

$245.68

13

$2,511.31

121

7

Knightvest Capital

Dallas, TX

$244.40

14

$635.60

40

8

Steadfast Apartment REIT

Irvine, CA

$230.00

5

$973.60

9

Lone Star

Dallas, TX

$229.33

7

$28,971.26

1,566

10

Harbor Group Int'l

Norfolk, VA

$228.56

10

$6,068.76

221

Top Sellers Rank Buyer

New York, NY

DFW Acq # Props Global Acq # Props

1

6,868

Avg. Cap

$4,249.97

$1,065.55

7.15%

$4,137.20

$1,017.05

7.14%

$3,840.54

$845.42

7.09%

$3,651.07

$723.05

7.31%

$2,870.67

$285.15

7.68%

$2,145.79

$292.17

8.07%

$1,453.27

$152.90

8.14%

$937.19

$206.97

8.01%

$857.51

$205.47

7.52%

$776.73

$211.40

7.25%

$781.42

$157.59

7.37%

$906.11

$331.66

6.71%

$1,250.28

$549.64

6.92%

$1,735.35

$696.46

6.71%

$2,030.17

$452.42

6.54%

$2,358.05

$659.53

6.86%

$2,670.67

$862.27

6.54%

$2,778.14

$803.92

6.47%

$2,729.26

$403.54

6.55%

$2,903.26

$833.52

6.42%

$3,337.46

$1,296.47

6.50%

$3,610.06

$1,076.52

6.52%

$3,919.62

$713.10

6.45%

$4,227.74

$1,141.64

6.52%

$4,428.61

$1,497.35

6.73%

$5,447.44

$2,095.35

6.83%

$5,857.37

$1,123.02

6.83%

$5,869.04

$1,153.31

6.91%

$5,834.38

$1,462.69

6.85%

$6,013.14

$2,274.12

6.80%

$6,567.49

$1,677.37

6.89%

$6,647.54

$1,233.37

6.84%

$7,201.83

$2,016.97

6.74%

DFW’s multi-housing market registered remarkable trailing twelve month volumes of over $7 billion. Private investors accounted for 57% of all acquisitions during the first three quarters of 2015. At 21%, Institutions represented less than a fourth of the buyer pool. Through 3Q2015, Canadian and British firms have together invested over $830 million. The region continues to draw major corporate relocations to its brandished northern suburbs. While the Dallas area apartment market is in the midst of an extraordinary development boom, absorption of new supply appears to be keeping up. The persistent tightness stands as a strong testament to the strength of the market.

25

MARKET PERFORMANCE ($MIL) Location

DFW Acq # Props Global Acq # Props

1

McDowell Properties

San Francisco, CA

$393.64

16

$1,294.97

61

2

Wood Partners

Marietta, GA

$313.65

8

$3,976.93

95

3

Ares Management

Los Angeles, CA

$297.65

7

$7,553.04

1,044

4

Associated Estates

Cleveland, OH

$283.95

6

$3,619.71

117

5

Columbus Realty Partners LTD Dallas, TX

$257.71

4

$257.71

4

6

Bell Partners

Greensboro, NC

$253.57

8

$6,118.14

250

7

DRA Advisors

New York, NY

$229.33

7

$17,082.61

711

8

England Group

Vancouver, Canada

$228.56

10

$477.26

14

9

Walton Street Capital

Chicago, IL

$208.80

4

$13,918.49

233

10

Greystar RE Partners

Charleston, SC

$208.64

4

$3,346.12

90

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$7,201.83

23%

Q3 '15

$2,016.97

64%

T12 Vol.

349

-1%

Q3 '15

93

39%

T12 Vol.

86,371

-5%

Q3 '15

21,198

29%

T12 Vol.

$93,539.96

7%

Q3 '15

$98,730.19

T12 Vol.

6.74%

-12

Q3 '15

6.23%

-59

6%

HFF | 25

DENVER, COLORADO

Occupancy

Forecast

Long-Term Average

97% 96%

OCCUPANCY

95% 94% 93% 92% 91% 90% 89% 2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,800

2015

$1,600

Rent/Unit/Mo.

Employers are expected to have added 43,110 jobs in 2015, a 3.2% growth rate over 2014, and well above the market’s historical average of 1.5%. Looking forward, job growth is expected to average 2.1% annually during the next three years (20162018).

$1,400

RENTAL RATES

Overview

$1,200 $1,000 $800 $600 $400 $200

Denver population has increased by a healthy 2.0% over the past two years. The population is expected to have risen by 66,000 people in 2015, drawing more demand for apartments. Axiometrics forecasts population growth to average 2.4% between 2016 and 2018.

$0 2009

Much like in other markets, a large percentage of new supply has been delivered to the urban core submarket. Some 2,612 of the 9,829 units expected to deliver in 2015 are earmarked for the Downtown Denver submarket. On top of that, more than 5,000 units are already under construction for delivery in 2016 and 2017.

2011

2012

2013

2014

Forecast

Effective Rent Growth

12%

2015

Long-Term Average

10% 8%

YoY Change (%)

An average of about 7,000 units per year have been delivered to the market the past two years, roughly 2,500 units above the historical average. New supply is expected to have peaked in 2015, with just less than 10,000 units being delivered to the market. New supply is expected to moderate during the outlook, averaging 6,417 units annually.

ANNUAL RENTAL RATE GROWTH

Development

2010

6% 4% 2% 0% -2% -4% -6% -8% 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Rental Rate While Denver has been one of the strongest markets for rent growth the past five years, expectations are that 2015 was its best year yet. Annual effective rent growth is expected to have ended the year at 10.2%, up from an impressive 8.9% growth rate in 2014. Annual effective rent growth is expected to moderate in the outlook as new supply starts to settle in, averaging 4.6% over the next three years. While that pace is slower compared to the current results, Denver is expected to remain one of the top markets in the country for rent growth.

HFF | 26

Completions Net Absorption Completion Forecast Net Absorption Forecast

12,000 10,000

Units

8,000 6,000 4,000 2,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

100 80

YoY Change (%)

The market’s occupancy rate has approached 96% due to absorption outpacing supply for six consecutive years. Absorption will remain robust, but the streak will likely be broken through 2016. Still, Denver will likely have some of the largest absolute absorption totals in the country the next three years.

EMPLOYMENT & POPULATION TOTALS

Occupancy has been above 95% the past two years, reaching its highest rate in 2014 (95.8%) and maintaining close to that level since then. Looking ahead, occupancy is forecast to average 95.2% over the next three years, despite the elevated supply levels.

COMPLETIONS & NET ABSORPTION

Occupancy and Absorption

60 40 20 0 -20 -40 -60 -80 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$5,000

Year

T12 Vol.

Qtr. Vol.

2007

$1,824.08

$336.22

5.90%

$1,709.40

$339.92

5.83%

$4,000 $3,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$4,500

2008

$3,000 $2,500 $2,000

2009

$1,500 $1,000 $500 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$4,000 2012

$3,000 Volume ($MM)

REAL-TIME SNAPSHOT

$3,500

$2,500 2013

Avg. Cap

$1,885.89

$850.98

5.76%

$1,909.59

$382.47

6.20%

$1,767.71

$194.34

6.41%

$1,569.81

$142.02

6.89%

$965.75

$246.92

7.01%

$654.64

$71.36

6.89%

$489.38

$29.08

6.95%

$475.20

$127.84

6.81%

$312.07

$83.79

7.03%

$359.17

$118.46

7.21%

$428.84

$98.75

7.25%

$398.92

$97.92

7.24%

$511.28

$196.16

6.89%

$632.16

$239.33

6.41%

$780.28

$246.87

6.20%

$1,079.34

$396.98

5.98%

$1,073.55

$190.37

6.12%

$1,861.51

$1,027.30

6.13%

$1,939.91

$325.27

6.24%

$1,961.90

$418.97

6.34%

$2,652.55

$881.02

6.10%

$2,684.54

$1,059.29

6.00%

$2,929.75

$570.49

5.99%

$2,000

$2,998.09

$487.30

5.94%

$2,656.05

$538.98

6.03%

$1,500

$2,242.10

$645.34

6.26%

2014

$1,000 $500 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

DEN Acq # Props Global Acq # Props

1

Guardian Life Insurance Co

New York, NY

$293.00

4

$3,379.19

2

TruAmerica Multi-housing

Los Angeles, CA

$293.00

4

$2,356.02

79 49

3

Bell Partners

Greensboro, NC

$251.67

1

$6,248.03

264 76

4

Jackson Square

San Francisco, CA

$219.45

7

$2,134.28

5

Griffis Group

Denver, CO

$170.43

4

$1,179.18

45

6

Inland Real Estate Group

Oak Brook, IL

$170.31

5

$18,974.35

999

7

BMC Investments

Denver, CO

$169.00

4

$282.97

14

8

Advenir Inc

Miami, FL

$168.64

4

$1,186.47

50

9

Allstate

Northbrook, IL

$167.00

2

$2,142.70

45

10

Benedict Canyon Equities Inc Los Angeles, CA

$165.80

3

$627.15

28

Top Sellers Rank Buyer

Location

1

Holland Partners

Vancouver, WA

$313.05

7

$2,120.43

50

2

Simpson Housing LLLP

Denver, CO

$272.24

3

$1,634.87

61

3

Carmel Partners

San Francisco, CA

$271.21

6

$4,127.88

99

4

Fairfield Residential

San Diego, CA

$241.88

6

$12,464.56

348

5

GE Capital

Norwalk, CT

$227.28

4

$56,242.32

3,402

6

Wood Partners

Marietta, GA

$200.54

3

$3,976.93

95

7

Bascom Group

Irvine, CA

$182.87

6

$3,621.04

166

8

DiNapoli Capital Partners

Walnut Creek, CA

$172.70

4

$1,105.41

19

9

Berkshire Property Advisors

Boston, MA

$167.00

2

$2,392.97

78

10

Embrey Development

San Antonio, TX

$164.38

3

$987.02

27

$2,373.89

$702.28

6.22%

$2,528.09

$641.49

6.04%

$2,954.19

$965.08

5.87%

$3,629.29

$1,320.44

5.80%

$3,958.13

$1,031.12

5.88%

$4,314.49

$997.85

6.11%

$4,300.13

$950.72

6.22%

Denver’s multi-housing market remains highly liquid, with trailing twelve month volumes well above $4 billion. Private investors are dominating the acquisition side, accounting for 78% of all purchases year-todate. Institutions have been net sellers in this time period. Canadian and Swiss firms remain hungry for a Denver presence and spent over $115 million dollars during the first three quarters of 2015 in a combined five properties. Energy sector worries aside, Denver continues to display strong economic trends. Its diversification has made it less vulnerable to trends in the energy sector than it was in the past. An under supplied housing market paired with above-average job growth and strong population growth should benefit the metro. MARKET PERFORMANCE ($MIL)

DEN Acq # Props Global Acq # Props

Sources: Real Capital Analytics, HFF Research

Volume

actual

chg vs prior

T12 Vol.

$4,300.13

46%

Q3 '15

$950.72

-5%

# Trades

T12 Vol. Q3 '15

61

61%

Units

T12 Vol.

28,733

43%

Q3 '15

5,990

-5%

$/unit

T12 Vol.

$151,662.16

3%

Q3 '15

$164,005.14

T12 Vol.

6.22%

35

Q3 '15

6.05%

-82

Avg. Cap

186

49%

4%

HFF | 27

HOUSTON, TEXAS

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 88% 87%

2009

2010

As of the third quarter of 2015, Houston’s occupancy rate was still 94.6%, a slight improvement from the 2014 rate of 94.4%. As more supply delivers and absorption slows, the occupancy rate is forecast to moderate to close to 94.0% in 2016 and 2017. Rental Rates As job growth slowed, rent growth followed. The third quarter saw 3.3% year-over-year annual effective rent growth. That rate was 5.3% at the same point in 2014. While the metro overall has slowed, that’s not true for all parts of the market. Submarkets in the south and east parts of the Houston market, extending toward the Gulf of Mexico, are experiencing rent growth above 5%. Growth also varies among asset classes in the Houston metro. Class A properties, which includes most new supply, have stagnant annual effective growth of 0.1% as of the current data. Classes B and C, which are less impacted by new supply, are posting healthy growth rates of 4.3% and 7.1%, respectively. Looking ahead, Axiometrics forecasts full-year growth to be 2.4% in 2016 and 2.8% in 2017, with a continued trend upward into 2018.

HFF | 28

2017

2018

2016

2017

2018

Forecast

Rent/Unit/Mo.

RENTAL RATES

$800 $600

2009

2010

2011

2012

2013

2014

Forecast

Effective Rent Growth

2015

Long-Term Average

8% 6%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

Occupancy and Absorption

2016

$1,000

$0

4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

20,000 15,000 10,000

Units

More than 17,000 units are expected to have been delivered to the Houston metro in 2015 -- an increase of almost 3,000 units from 2014’s total. Many projects in the pipeline were at a point of no return as oil prices began to drop during the last half of 2014. Axiometrics forecasts new development to slow, but deliveries won’t see a significant slowdown until at least 2017 due to construction already in progress. Completions should be in the range of 14,000 units in 2016.

2015

$200

COMPLETIONS & NET ABSORPTION

Development

2014

$400

5,000 0 -5,000 -10,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

200 150

YoY Change (%)

But when oil prices fell dramatically in 2014 and 2015, it was inevitable that the Houston economy would be affected, but to what extent was the question. Given the concerns of the local economy and the amount of supply to be delivered, Houston’s apartment performance has been solid given historical standards. Annual rent growth remained above 3% through the third quarter of 2015, and the occupancy rate held steady, even though the market is not experiencing the same level of job growth.

2013

$1,200

EMPLOYMENT & POPULATION TOTALS

The Houston apartment market had been one of the strongest in the country. The booming job market, with the energy industry as one of the cornerstones, played no small part in that performance.

2012

Effective Rental Rates

$1,400

Overview

2011

100 50 0 -50 -100 -150

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$5,000

Year

T12 Vol.

Qtr. Vol.

2007

$3,177.06

$619.92

7.16%

$2,938.84

$867.81

7.01%

$4,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$6,000

2008 $3,000

2009

$2,000

$1,000 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$6,000 2012

$4,000 Volume ($MM)

REAL-TIME SNAPSHOT

$5,000

2013 $3,000

$2,000

2014

$1,000

$0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

HOU Acq # Props Global Acq # Props

1

Gaia RE Holdings

New York, NY

$345.40

14

$1,768.77

87

2

Menora Mivtachim

Tel Aviv, Israel

$345.40

14

$1,820.08

33

3

Grand China Fund

Beijing, China

$255.40

9

$289.85

11

4

Steadfast Cos

Irvine, CA

$243.37

9

$2,418.88

106 1,566

5

Lone Star

Dallas, TX

$205.02

7

$28,971.26

6

CWS Capital Partners

Newport Beach, CA

$197.00

6

$2,488.91

82

7

Crow Holdings

Dallas, TX

$177.75

2

$7,340.12

379

8

Olympus Property

Arlington, TX

$161.75

3

$1,075.80

39

9

Starlight Investments

Etobicoke, Canada

$156.47

5

$3,076.79

199

10

Clarion Partners

New York, NY

$147.37

7

$27,415.19

Top Sellers Rank Buyer

Avg. Cap

$2,778.59

$580.45

7.02%

$3,152.24

$1,084.05

6.96%

$3,382.23

$849.91

7.01%

$2,946.48

$432.06

7.42%

$2,672.84

$306.81

7.21%

$1,769.31

$180.53

7.25%

$1,037.71

$118.32

7.30%

$832.11

$226.45

7.03%

$808.50

$283.21

6.96%

$784.08

$156.10

7.28%

$1,004.55

$338.79

7.46%

$968.42

$190.32

7.74%

$964.91

$279.70

7.60%

$1,510.11

$701.30

6.67%

$1,349.65

$178.33

6.14%

$1,715.17

$555.84

6.26%

$2,211.88

$776.41

6.07%

$2,334.45

$823.86

5.99%

$2,687.93

$531.81

6.32%

$2,978.24

$846.15

6.27%

$3,194.38

$992.55

6.63%

$3,453.45

$1,082.93

6.67%

$3,621.44

$699.80

6.83%

$4,037.69

$1,262.41

6.94%

$4,034.69

$989.55

6.99%

$4,858.97

$1,907.21

7.13%

$5,108.12

$948.95

7.14%

$5,145.21

$1,299.50

7.11%

$5,668.47

$1,512.81

7.01%

$5,404.06

$1,642.81

7.03%

$5,705.12

$1,250.01

6.86%

$5,555.68

$1,150.06

6.90%

$4,851.01

$808.14

7.00%

Houston’s multi-housing market remains strong as trailing twelve month volumes continue significantly above pre-recession peaks. Private investors accounted for 69% of all acquisitions during the first nine months of 2015. Comparably, Institutions and listed REITS were net sellers in this time period. Canadian, Israeli, Mexican and Chinese firms together invested over $400 million in the first three quarters of 2015 across twelve properties. Due to weakness in the energy sector, Houston is leaning on its diverse base to hold the economy afloat. Population continues to grow close to twice the national pace, prompting demand for services like healthcare and education, and therefore employment in those industries.

1,080

MARKET PERFORMANCE ($MIL) Location

HOU Acq # Props Global Acq # Props

1

DRA Advisors

New York, NY

$350.33

14

$17,082.61

711

2

Bell Partners

Greensboro, NC

$314.00

12

$6,118.14

250

3

SMC Management

Watertown, MA

$255.40

9

$276.85

12

4

Carroll Organization

Atlanta, GA

$215.76

5

$307.53

10

5

Investcorp

Manama, Bahrain

$182.50

7

$6,176.62

136

6

Carlyle Group

Washington, D.C.

$177.66

3

$36,421.78

1,029

7

Trammell Crow Residential

Dallas, TX

$161.35

7

$6,382.26

164

8

Greystar RE Partners

Charleston, SC

$152.97

4

$3,346.12

90

9

Gables Residential

Atlanta, GA

$147.37

7

$5,178.01

121

10

Cypress Real Estate Advisors Austin, TX

$145.72

6

$495.08

23

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$4,851.01

-14%

Q3 '15

$808.14

-30%

T12 Vol.

244

-19%

Q3 '15

47

-11%

T12 Vol.

66,431

-15%

Q3 '15

12,825

-25%

T12 Vol.

$89,531.36

-12%

Q3 '15

$85,667.88

T12 Vol.

7.00%

-1

Q3 '15

7.56%

36

4%

HFF | 29

LOS ANGELES, CALIFORNIA

Occupancy

Forecast

Long-Term Average

96% 96%

OCCUPANCY

95% 95% 94% 94% 93% 93% 92% 92% 91%

2009

2010

HFF | 30

2018

Forecast

Rent/Unit/Mo. YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Effective Rent Growth

Forecast

Long-Term Average

6% 4% 2% 0% -2% -4% -6% -8% -10%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

20,000 18,000 16,000 14,000

Units

COMPLETIONS & NET ABSORPTION

Absorption averaged 8,816 units annually since 1997, outpacing the long-term supply average of 6,997 units. However, Axiometrics expects new apartment supply to largely outpace absorption as job growth slows down in the market.

2017

$1,000

8%

12,000 10,000 8,000 6,000 4,000 2,000 0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

200 150

YoY Change (%)

Despite increasing levels of new supply, the metro’s occupancy rate reached 96.1% in 2015, up from 95.9% in 2014. Expect occupancy rates to remain very strong during the outlook period, with a forecast average of 95.8% the next three years.

2016

$1,500

$0

EMPLOYMENT & POPULATION TOTALS

Occupancy and Absorption

2015

$2,000

Development

The Marina Del Rey and Westlake submarkets were forecast to see the most new supply in 2015, receiving 2,031 and 1,096 units, respectively, according to Axiometrics’ identified supply.

2014

$500

The Los Angeles metro’s population has grown by an average of nearly 80,000 people annually since 2010, and is expected to average close to 90,000 from 2015-2018. Axiometrics expects a total of 9,531 units delivered for the entirety of 2015, up from the 9,300 units that were delivered in 2014. Deliveries are expected to eclipse the 10,000 unit mark in 2016 before moderating closer to the long-term average of approximately 7,000 units annually in 2017 and 2018.

2013

$2,500

RENTAL RATES

Though Los Angeles has been unable to repeat the exceptional job-gain numbers of 2012 (141,600 jobs added), it has remained one of the top job producers in the country. The market is expected to have added 92,500 jobs in 2015, a growth rate of 2.1%. Job gain is forecast to moderate to close to 61,200 per year from 2016-2018, or 1.4%.

2012

Effective Rental Rates

$3,000

Overview

2011

100 50 0 -50 -100 -150 -200 -250 -300

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$14,000

T12 Vol.

Qtr. Vol.

2007

$7,147.40

$1,717.83

5.27%

$6,729.83

$1,767.36

5.31%

$10,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$12,000

Year

2008

$8,000 $6,000

2009

$4,000 $2,000

2010 $0

2006

2007

2008

2009

2015

2010

2011

2014

2012

2013

2013

2014

2011

2012

$12,000 2012

$8,000 Volume ($MM)

REAL-TIME SNAPSHOT

$10,000

$6,000

2013

$4,000 2014

$3,000 $2,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

L.A. Acq # Props Global Acq # Props

1

Essex Property Trust

Palo Alto, CA

$2,560.17

37

$10,571.85

241

2

TruAmerica Multi-housing

Los Angeles, CA

$655.61

12

$2,356.02

49

3

Guardian Life Insurance Co

New York, NY

$655.61

12

$3,379.19

79

4

Harel Insurance Invts

Tel Aviv, Israel

$372.61

11

$3,874.73

89

5

Allstate

Northbrook, IL

$372.61

11

$2,142.70

45

6

Equity Residential

Chicago, IL

$339.50

3

$22,309.78

394

7

Clarion Partners

New York, NY

$336.34

3

$27,415.19

1,080

8

Capri

Chicago, IL

$307.00

2

$3,116.38

75

9

Pacific Urban

Encino, CA

$304.91

7

$3,397.45

137

10

Brookfield AM

Toronto, Canada

$291.92

2

$53,757.11

Top Sellers Rank Buyer

Avg. Cap

$6,719.31

$1,735.56

5.39%

$11,098.97

$5,878.22

5.28%

$10,131.02

$749.88

5.22%

$9,020.11

$656.45

5.29%

$7,877.06

$592.51

5.30%

$2,423.44

$424.60

5.34%

$2,056.96

$383.41

5.55%

$1,967.25

$566.73

5.69%

$1,999.21

$624.47

5.89%

$2,077.12

$502.52

6.04%

$2,056.09

$362.37

6.04%

$2,203.30

$713.94

6.10%

$2,836.12

$1,257.30

5.96%

$3,749.82

$1,416.22

5.90%

$4,254.39

$866.94

5.85%

$4,915.35

$1,374.90

5.81%

$5,197.26

$1,539.20

5.72%

$5,270.23

$1,489.19

5.72%

$5,482.80

$1,079.51

5.67%

$5,223.65

$1,115.75

5.59%

$7,199.46

$3,515.01

5.56%

$8,647.55

$2,937.28

5.41%

$12,029.89

$4,461.85

5.45%

$12,623.05

$1,708.91

5.43%

$10,817.89

$1,709.86

5.45%

$9,786.27

$1,905.65

5.41%

$6,782.31

$1,457.89

5.36%

$8,415.27

$3,341.88

5.25%

$9,675.13

$2,969.71

5.12%

$9,538.15

$1,768.68

5.05%

$10,728.21

$2,647.95

5.00%

$10,159.88

$2,773.54

4.97%

$9,777.51

$2,587.33

4.91%

Los Angeles surpassed its all-time high for non-farm employment levels in late 2014. In the 12 months ending August 2015, it ranked second in the nation in terms of absolute growth. Private investors made up 64% of all acquisitions in the first three quarters of 2015, while Institutions made up 22%. Underscoring the growing influence of Asian capital in the Los Angeles market, nearly $1.2 billion has been spent in land development deals during the past 24 months. Fundamentals remain strong across the board with a 3.9% vacancy rate as of the third quarter of 2015, highlighting just how tight this market is.

1,142

MARKET PERFORMANCE ($MIL) Location

L.A. Acq # Props Global Acq # Props

1

BRE Properties

San Francisco, CA

$2,071.22

32

$6,108.34

135

2

JH Real Estate Partners

Newport Beach, CA

$387.86

13

$756.76

24

3

AvalonBay

Arlington, VA

$330.30

6

$7,273.52

125

4

Casden Properties

Beverly Hills, CA

$300.00

1

$1,668.87

119

5

CPP Investment Board

Toronto, Canada

$300.00

1

$8,383.36

53

6

Wood Partners

Marietta, GA

$295.00

2

$3,976.93

95

7

Associated Estates

Cleveland, OH

$291.92

2

$3,619.71

117

8

Washington Capital Mgmt

Seattle, WA

$283.00

1

$566.12

17

9

JH Snyder

Los Angeles, CA

$283.00

1

$1,605.63

22

10

Wolff Company

Scottsdale, AZ

$267.57

4

$1,489.14

50

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$9,777.51

1%

Q3 '15

$2,587.33

-7%

T12 Vol.

876

16%

Q3 '15

253

13%

T12 Vol.

48,168

0%

Q3 '15

11,571

-14%

T12 Vol.

$209,532.84

Q3 '15

$213,813.76

4% 0%

T12 Vol.

4.91%

-21

Q3 '15

4.74%

-11

HFF | 31

MIAMI, FLORIDA

Occupancy

Forecast

Long-Term Average

97.0% 96.5%

OCCUPANCY

96.0% 95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 92.0%

2009

2010

2011

2012

2013

Effective Rental Rates

$2,000

2014

2015

2016

2017

2018

2016

2017

2018

Forecast

$1,800

Rent/Unit/Mo.

A year ago, Miami was one of the hottest apartment markets in the country. Today, Orlando and Tampa would be the Florida markets more likely to be in that discussion. Even though rent growth is less robust, job growth has remained steady and is expected to have ended 2015 with 3.0% growth, above the national average of 2.1%. The Miami metro continues to see healthy fundamentals, even though rent growth is less robust than it was in 2014.

$1,600

RENTAL RATES

Overview

$1,400 $1,200 $1,000 $800 $600 $400 $200 $0

2009

2010

2011

2012

2013

2014

2015

Rental Rates Coming off of a strong year of 6.9% annual effective rent growth in 2014, Miami has cooled off to an extent. Third quarter 2015 year-over-year growth showed the metro with a growth rate of 3.5%. Because of the amount of new supply that has entered the market, it’s no surprise that Class A properties have the lowest annual effective growth rate of all asset classes, at 2.2% in the third quarter -- although the latest data suggests Class A has begun to rebound. Class B and C had growth rates of 3.9% and 5.3%, respectively, in the third quarter.

4% 2% 0% -2% -4% -6% -8%

2010

2011

2012

2013

2014

2015

2016

2017

2018

12,000 10,000 8,000 6,000 4,000 2,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

200 150

YoY Change (%)

EMPLOYMENT & POPULATION TOTALS

2009

Completions Net Absorption Completion Forecast Net Absorption Forecast

Axiometrics forecasts rent growth to average 3.8% during the next three years, just above the metro’s long-term average of 3.4%.

HFF | 32

Long-Term Average

6%

YoY Change (%)

Miami apartments were 96.8% occupied in the third quarter of 2015, some 120 basis points above the long term average (LTA) of 95.6%. Occupancy is expected to be at or above the LTA from 2016-2018, averaging 96.0% over that period. Absorption levels have remained in line with new supply, indicating a healthy balance between the two. In the three-year outlook, absorption is expected to average about 3,000 units per year, while new supply is forecast at an average of 4,000 units per year.

Forecast

Effective Rent Growth

8%

Units

Occupancy and Absorption

COMPLETIONS & NET ABSORPTION

Developers were expected to deliver 4,600 new units to the Miami metro in 2015, on top of the 7,000 that came to market in 2014. New supply in 2015 is in line with the long-term average for the metro, which is about 5,000 units delivered per year going back to 1997. New supply is expected to average about 4,000 new units from 2016-2018.

ANNUAL RENTAL RATE GROWTH

Development

100 50 0 -50 -100

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$9,000

Year

T12 Vol.

Qtr. Vol.

2007

$2,656.33

$498.68

6.24%

$2,515.78

$578.48

6.24%

$7,000 $6,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$8,000

2008

$5,000 $4,000

2009

$3,000 $2,000 $1,000 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$3,500 2012

$2,500 Volume ($MM)

REAL-TIME SNAPSHOT

$3,000

$2,000

2013

$1,500 2014

$1,000 $500 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

SOFLA Acq # Props Global Acq # Props

1

Clarion Partners

New York, NY

$418.25

10

$27,415.19

1,080

2

Morgan Stanley

New York, NY

$322.80

4

$81,168.83

1,464

3

AVR Realty

Yonkers, NY

$314.19

4

$2,805.45

41

4

TIAA-CREF

New York, NY

$290.85

3

$33,062.09

550

5

Brookfield AM

Toronto, Canada

$220.64

4

$53,757.11

1,142

6

Carroll Organization

Atlanta, GA

$183.86

3

$2,213.58

60

7

Northland

Newton, MA

$157.15

4

$1,715.81

63

8

BC Property Investments

Miami, FL

$155.05

2

$560.29

9

Lone Star

Dallas, TX

$149.83

1

$28,971.26

10

BlueMountain Capital

New York, NY

$112.00

1

$453.87

Top Sellers Rank Buyer

Avg. Cap

$2,175.68

$272.91

6.34%

$2,044.35

$694.27

6.43%

$1,661.59

$115.93

6.12%

$1,269.91

$186.80

6.31%

$1,144.16

$147.17

7.35%

$552.01

$102.12

7.31%

$604.71

$168.63

6.95%

$522.93

$105.02

8.14%

$533.24

$157.48

7.51%

$707.23

$276.10

7.69%

$929.69

$391.09

8.01%

$1,148.32

$323.66

7.53%

$1,627.28

$636.44

7.41%

$2,236.32

$885.14

6.84%

$2,023.28

$178.05

6.74%

$2,053.29

$353.66

6.51%

$1,641.54

$224.69

6.35%

$1,289.99

$533.59

6.31%

$1,468.85

$356.91

6.23%

$1,546.72

$431.53

6.28%

$1,914.13

$592.09

6.16%

$2,296.80

$916.26

6.00%

$2,613.06

$673.18

6.02%

$2,653.18

$471.65

5.95%

$2,413.64

$352.55

6.04%

$1,949.44

$452.06

6.15%

$1,645.78

$369.51

6.13%

$1,610.39

$436.27

5.96%

$1,665.64

$407.81

6.09%

$1,925.73

$712.14

6.05%

$2,664.07

$1,107.85

5.76%

$3,122.27

$894.47

5.68%

$3,768.71

$1,054.25

5.60%

South Florida’s multi-housing market remains enviable with trailing twelve month volumes approaching $4 billion. During the first three quarters of the 2015, private investors made up nearly half of the buyer pool, accounting for 44% of all purchases. The equally ardent Institutions followed closely behind, accounting for 43% of all acquisitions. Private investors and listed REITs have been net sellers in this time period. South Florida continues to exhibit fervent signs of popularity among foreign investors, who have injected over $380 million this year alone. Expect the economy to continue benefiting from its tourism, port and logistics industries.

10 1,566 25

MARKET PERFORMANCE ($MIL) Location

SOFLA Acq # Props Global Acq # Props

1

Gables Residential

Atlanta, GA

$390.49

10

$5,178.01

121

2

Mill Creek Residential

Dallas, TX

$333.00

4

$922.09

15

3

Associated Estates

Cleveland, OH

$264.89

5

$3,619.71

117

4

Ares Management

Los Angeles, CA

$218.30

3

$7,553.04

1,044

5

Altman Companies

Boca Raton, FL

$197.60

4

$1,134.03

28

6

Related Companies

New York, NY

$163.79

2

$7,251.68

136

7

TGM Associates

New York, NY

$158.00

2

$1,705.45

61

8

AEW Capital

Boston, MA

$156.13

2

$22,396.81

691

9

UBS

Zurich, Switzerland

$152.50

2

$19,079.38

503

10

Home Properties

Rochester, NY

$149.83

1

$10,666.45

238

Sources: Real Capital Analytics, HFF Research

actual

chg vs prior

T12 Vol.

$3,768.71

126%

Q3 '15

$1,054.25

18%

T12 Vol.

206

43%

Q3 '15

57

-3%

Units

T12 Vol.

24,940

77%

7,048

23%

$/unit

T12 Vol.

$159,620.94

29%

Q3 '15

$150,729.22

-12%

Volume # Trades

Q3 '15

Avg. Cap

T12 Vol.

5.60%

-50

Q3 '15

5.98%

51

HFF | 33

MINNEAPOLIS, MINNESOTA

Occupancy

OCCUPANCY

97.0% 96.5% 96.0% 95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 92.0% 91.5%

2009

2010

2011

Forecast

2012

2013

Long-Term Average

2014

2016

2017

2018

Forecast

Effective Rental Rates

$1,600

2015

$1,400

Rent/Unit/Mo.

The Minneapolis-St. Paul metro finished the third quarter of 2015 with annual job gains of 37,600, a 2.0% annual growth rate. Axiometrics forecasts annual job growth to have ended 2015 at 1.9%, some 20 basis points (bps) above the long-term growth-year rate. The three-year outlook through 2018 calls for average annual job gains to slow slightly to 29,000 jobs per year, with average annual growth of 1.5%.

$1,200

RENTAL RATES

Overview

$1,000 $800 $600 $400 $200 $0

Development

2009

Rental Rates Annual effective rent growth was 2.6% in the third quarter, up from 2.3% at the end of 2014 but slightly below the long-term average of 3.0% during growth years since 1997. Axiometrics forecasts annual effective rent growth to increase gradually, peaking at 3.9% in 2018 and averaging 3.5% over the three-year forecast period.

HFF | 34

2012

2013

2014

Forecast

2015

2016

2017

2018

Long-Term Average

YoY Change (%)

4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

12,000 10,000 8,000

Units

Minneapolis’ annual absorption was about 3,800 units in the third quarter and has generally been balanced with supply since the end of the Great Recession. Absorption is forecast to outpace supply in 2016 and average about 2,140 units over the three-year outlook.

COMPLETIONS & NET ABSORPTION

Third-quarter 2015 occupancy stood at 96.6%, and the year is forecast to have ended at 96.4%. This would be the highest recorded annual average occupancy rate since at least 1997. Occupancy is forecast to remain high, averaging 96.2% through 2018, more than 180 bps higher than the long-term average of 94.4%.

2011

Effective Rent Growth

6%

6,000 4,000 2,000 0 -2,000 -4,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

60 40

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

Axiometrics forecasts development to slow slightly over the three-year forecast period, with an annual average of about 3,000 units each year through 2018. Construction is occurring in eight of the metro’s nine submarkets, with the highest concentrations in the Minneapolis, West and St. Paul submarkets.

ANNUAL RENTAL RATE GROWTH

After reaching a nadir of just 871 units in 2010, apartment deliveries ramped up to 5,100 units by 2013. Since then, the pace of new supply dropped. New deliveries totaled 4,100 units in 2014 and just below 3,500 units as of the third quarter of 2015.

2010

20 0 -20 -40 -60 -80 -100

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$1,600

Year

T12 Vol.

Qtr. Vol.

2007

$694.96

$152.51

6.49%

$673.90

$151.64

6.45%

$1,200 $1,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$1,400

2008

$800 $600

2009

$400 $200 2010 $0

2006

2007

2008

2009

2015

2010

2011

2014

2012

2013

2013

2014

2011

2012

$11.45

6.57%

$50.35

6.45%

$279.62

$66.18

6.55%

$212.90

$84.93

7.06%

$397.32

$195.87

7.07%

$350.40

$3.42

7.08%

$381.92

$97.70

6.92%

$299.73

$2.74

6.85%

$136.36

$32.50

0.00%

$139.27

$6.34

7.16%

$54.39

$12.81

7.54%

$93.65

$42.00

7.33%

$218.78

$157.63

7.17%

$260.85

$48.41

6.91%

$333.81

$85.77

6.80%

$347.82

$56.01

6.56%

$247.71

$57.52

6.49%

$900

$364.90

$165.60

6.34%

2012

$700 Volume ($MM)

$584.71 $365.95

$1,000

$800

REAL-TIME SNAPSHOT

Avg. Cap

$600

2013

$500 $400 $300

2014

$200 $100 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location Kirkland, WA

MIN Acq # Props Global Acq # Props

1

Weidner Apt Homes

$348.58

9

$2,493.04

2

Sterling Real Estate Trust Fargo, ND

$103.50

7

$175.12

3

AEW Capital

$100.00

1

$33,564.90

Boston, MA

131 11 1,768

4

University Communities LLC Denver, CO

$83.50

4

$346.63

5

Clarion Partners

New York, NY

$69.48

2

$27,415.19

22

6

Sidal Realty

Minneapolis, MN

$64.28

3

$74.49

4

7

White Oak Partners

Westerville, OH

$58.00

1

$333.83

14 274

1,080

8

Equus Capital Partners

Morrisville, PA

$57.80

2

$5,757.60

9

Marquette Cos

Naperville, IL

$54.25

1

$656.29

22

10

JP Morgan

New York, NY

$53.75

1

$47,407.98

628

Top Sellers Rank Buyer

$330.08

$50.95

6.28%

$361.93

$87.86

6.30%

$433.45

$129.03

6.26%

$450.15

$182.30

6.66%

$614.63

$215.44

6.72%

$574.04

$47.27

6.80%

$498.05

$53.04

6.98%

$580.31

$264.56

6.47%

$450.17

$85.29

6.41%

$528.88

$125.98

6.52%

$574.06

$98.23

6.43%

$937.24

$627.74

6.48%

$1,109.82

$257.87

6.34%

$1,263.83

$279.99

6.17%

$1,353.03

$187.42

6.10%

Despite its “frostbelt” location, population growth in Minneapolis is above-average, according to Moody’s. At nearly $1.4 billion, Minneapolis’s trailing twelve month volumes have reached a record high. During the first nine months of 2015 private investors were incredibly active, both as net sellers while also seizing 72% of all acquisitions, leaving Institutions the remaining 28%. Recent years of robust employment growth are resulting in strong demand for apartments, keeping developers busy. With a robust vacancy rate of 3.4% during 3Q strong demand levels in the multi-housing sector should prevail as the labor market continues to improve.

MARKET PERFORMANCE ($MIL) Location

MIN Acq # Props Global Acq # Props

1

Opus

Hopkins, MN

$130.79

2

$7,486.16

305

2

Filister Properties

Minneapolis, MN

$120.50

9

$120.50

3

Henderson Global

London, United Kingdom

$115.80

3

$11,824.07

435

4

Invesco RE

Atlanta, GA

$109.00

1

$17,035.80

482

9

5

Excelsior Group

Eden Prairie, MN

$109.00

1

$139.90

8

6

Ryan Companies

Minneapolis, MN

$109.00

1

$2,264.92

94

7

Doran Companies

Minneapolis, MN

$83.50

4

$104.51

5

8

Waterton Associates

Chicago, IL

$81.40

2

$2,542.51

77

9

Walton Street Capital

Chicago, IL

$78.13

3

$13,918.49

233

10

CalPERS

Sacramento, CA

$78.13

3

$26,896.18

989

Sources: Real Capital Analytics, HFF Research

Volume # Trades Units $/unit Avg. Cap

actual

chg vs prior

T12 Vol.

$1,353.03

136%

Q3 '15

$187.42

-33%

T12 Vol.

78

53%

Q3 '15

21

110%

T12 Vol.

9,861

76%

Q3 '15

1,928

21%

T12 Vol.

$127,226.75

24%

Q3 '15

$97,209.78

-45%

T12 Vol.

6.10%

-33

Q3 '15

5.83%

-15

HFF | 35

NEW YORK CITY, NEW YORK

Occupancy

Forecast

Long-Term Average

97.5% 97.0%

OCCUPANCY

96.5% 96.0% 95.5% 95.0% 94.5% 94.0% 93.5%

2009

2010

Rental Rates New York’s annual effective rent growth was 4.1% in the third quarter, up from 1.9% at the end of 2014 and well above the long-term average of 2.4% since 2000. Axiometrics forecasts an annual average of 3.3% effective rent growth over the three-year forecast period.

HFF | 36

2017

2018

2016

2017

2018

Forecast

Rent/Unit/Mo.

$2,000 $1,500

2010

2011

2012

2013

2014

Forecast

Effective Rent Growth

2015

Long-Term Average

4%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2009

6%

2% 0% -2% -4% -6% -8% -10%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

40,000 35,000 30,000

Units

Annual absorption topped 26,000 units in the third quarter, far exceeding supply. Demand is forecast to average more than 21,100 units over the three-year outlook, slightly less than average annual supply, but with little effect on forecast occupancy.

COMPLETIONS & NET ABSORPTION

New York maintains a perpetually high occupancy rate, with a long-term average of 96.3%. Third quarter 2015 occupancy stood at 97.0% and is forecast to have ended the year at 96.9%. Despite increasing new development, occupancy is forecast to remain near the long-term average over the next three years.

2016

$2,500

$0

25,000 20,000 15,000 10,000 5,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

200 150

YoY Change (%)

Occupancy and Absorption

2015

$500

EMPLOYMENT & POPULATION TOTALS

Axiometrics reported almost 21,900 units delivered in 2014 and close to 20,000 for the year ending third quarter 2015. The three-year outlook calls for an annual average of 26,500 units to enter the market. Deliveries remain concentrated in Brooklyn and Queens.

2014

$1,000

Development New York’s apartment deliveries appeared to be ramping up sharply from 20102014, but the severity of the Great Recession pushed new development down to critically low levels for the size of the market. From 2006-2009, apartment development averaged more than 28,500 units annually.

2013

$3,000

RENTAL RATES

As the financial capital of the nation, New York led the country in job creation. More than 116,000 jobs were added year-over year for the third quarter of 2015. During growth years, annual job growth in this large market has averaged 1.9% per year since 1997 and closed the third quarter at 1.8%. Job growth is forecast to average 1.2% through 2018, with annual average gains of about 80,000 jobs.

2012

Effective Rental Rates

$3,500

Overview

2011

100 50 0 -50 -100 -150 -200 -250

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL) Year

T12 Vol.

Qtr. Vol.

2007

$15,100.27

$2,926.60

5.78%

$16,322.51

$3,854.25

5.73%

$20,000

Volume ($MM)

HISTORICAL MARKET TRENDS

$25,000

2008

$15,000

$10,000 2009 $5,000 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$4,305.34

5.75%

$4,145.41

5.66%

$14,577.98

$2,272.99

5.65%

$12,434.01

$1,710.28

5.81%

$10,182.42

$2,053.74

5.86%

$6,617.58

$580.57

6.06%

$4,821.89

$477.30

6.29%

$3,664.96

$553.35

6.57%

$1,996.47

$385.26

6.64%

$2,162.34

$746.43

6.53%

$2,859.69

$1,174.65

6.40%

$3,338.15

$1,031.81

6.47%

$3,961.07

$1,008.18

6.56%

$5,350.42

$2,135.79

6.33%

$5,870.93

$1,695.16

6.27%

$6,078.17

$1,239.05

5.94%

$8,220.09

$3,150.09

5.87%

$18,000

$7,899.16

$1,814.86

5.82%

2012

$14,000 Volume ($MM)

$18,536.37 $15,231.59

$20,000

$16,000

REAL-TIME SNAPSHOT

Avg. Cap

$12,000

2013

$10,000 $8,000 $6,000

2014

$4,000 $2,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

NYC Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$1,579.64

29

$28,971.26

1,566

2

A&E Real Estate

New York, NY

$1,337.92

67

$1,717.34

85

3

HFZ Capital Group

New York, NY

$1,113.40

5

$2,895.21

22

4

Brookfield AM

Toronto, Canada

$917.34

5

$53,757.11

1,142 215

5

Galil Management

Brooklyn, NY

$799.29

84

$1,604.10

6

Stellar Management

New York, NY

$780.91

17

$4,786.88

75

7

Kushner Companies

New York, NY

$756.52

28

$5,198.25

145

8

Blackstone

New York, NY

$688.68

23

$191,599.69

9

Fairstead Capital

New York, NY

$688.68

23

$688.68

23

10

L&M Development Partners

Larchmont, NY

$667.10

24

$1,346.32

43

Top Sellers Rank Buyer

6,868

$9,132.58

$2,928.58

5.75%

$10,192.99

$2,299.46

5.82%

$10,574.92

$3,532.02

5.80%

$14,251.58

$5,491.53

5.78%

$15,448.71

$4,125.71

5.72%

$15,742.80

$2,593.55

5.52%

$14,596.96

$2,386.18

5.26%

$14,990.17

$5,884.74

4.89%

$14,091.57

$3,227.10

4.83%

$14,549.57

$3,051.55

4.84%

$18,457.11

$6,293.73

4.76%

$17,254.51

$4,682.14

4.91%

$19,127.12

$5,099.71

4.99%

$19,846.41

$3,770.84

4.95%

$17,473.51

$3,920.83

5.02%

The flood of young new citizens and improving incomes in New York City continues to spur the economy and real estate to record highs. Private investors comprised 65% of all acquisitions in the first nine months of 2015, while listed REITs were net sellers in this time period. Foreign capital continues to seek the relative safety in gateway markets of this area injecting nearly $1.1 billion into multi-housing assets in 2015. Despite modest job gains, NYC is experiencing a development boom, particularly in Brooklyn and Queens. Foreign investors are participating in this vein as well. Rent gains have curbed, but still remain well above the rate of inflation and are forecasted to have grown 4.2% in 4Q2015, according to Axiometrics. MARKET PERFORMANCE ($MIL)

Location

NYC Acq # Props Global Acq # Props

Rochester, NY

1

Home Properties

$1,579.64

29

$10,666.45

238

2

Urban American Management Corp West New York, NJ $1,462.93

51

$1,944.72

116

3

AvalonBay

Arlington, VA

$1,027.13

8

$7,273.52

125

4

Fannie Mae

Washington, D.C.

$969.33

10

$3,514.58

380

5

City Investment Fund

New York, NY

$917.34

5

$1,351.96

12

6

Westbrook Partners

New York, NY

$721.51

35

$12,899.14

239

7

Bettina Equities

New York, NY

$688.68

23

$863.61

25

8

AREA Property Ptnrs

New York, NY

$664.17

34

$13,348.56

327

9

CalPERS

Sacramento, CA

$649.00

3

$26,896.18

989

10

Extell

New York, NY

$575.00

1

$7,301.33

133

Sources: Real Capital Analytics, HFF Research

actual Volume

chg vs prior

T12 Vol.

$17,473.51

Q3 '15

$3,920.83

4%

# Trades

T12 Vol.

1,105

-9%

Q3 '15

245

-6%

Units

T12 Vol.

60,130

-16%

11,909

-10%

$/unit

T12 Vol.

$312,498.93

Q3 '15

$321,467.31

Q3 '15

Avg. Cap

-5%

17% 4%

T12 Vol.

5.02%

26

Q3 '15

4.61%

-31

HFF | 37

NORTHERN NEW JERSEY

Occupancy

Forecast

Long-Term Average

97.5% 97.0%

OCCUPANCY

96.5% 96.0% 95.5% 95.0% 94.5% 94.0% 93.5%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$2,000

2015

$1,800

Rent/Unit/Mo.

Verizon Communications and Prudential Financial are among the many large corporations that anchor the employment base in Newark, which is home to a highly-skilled labor pool. Job growth was 1.2% in 2014, or just less than 14,000 added jobs, and is expected to have landed at 1.0% in 2015. While not as robust as 2014, that growth remains an improvement from the average of 0.6% seen from 2011-2013. Along with an improved job market, the apartment sector has started to see some positive momentum. Expect that momentum to continue through the 2016-2018 forecast period.

$1,600

RENTAL RATES

Overview

$1,400 $1,200 $1,000 $800 $600 $400 $200 $0

2009

Newark’s annual effective rent growth was 3.1% in the third quarter 2015. Fullyear growth for 2015 is expected to have been 2.9%, an improvement over 2014’s 2.2%. The strongest growth rates are being seen in Class B properties, which recorded 3.8% growth in the third quarter. While Class A had a more modest 2.2% growth, it marked an improvement over the past three quarters, when annual growth had been either flat or negative. Class C growth was healthy at 3.3% Effective rent growth is expected to continue improving through the forecast period, averaging 3.8%.

HFF | 38

2012

2013

2014

2015

Forecast

Long-Term Average

YoY Change (%)

5% 4% 3% 2% 1% 0% -1% -2% -3%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

6,000 5,000 4,000

Units

Rental Rates

COMPLETIONS & NET ABSORPTION

Newark is a high-occupancy market, with average occupancy exceeding 96%. The occupancy rate remained high at 97.5% in the third quarter of 2015 and is expected to average 96.4% from 2016-2018. Absorption is relatively in line with new development and is expected to average 700 units annually from 20162018. As long as job growth remains at or exceeds current levels, apartment fundamentals should remain healthy.

2011

Effective Rent Growth

6%

3,000 2,000 1,000 0 -1,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

140 120

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

Developers are expected to have delivered close to 1,700 new units to the Newark market in 2015, down from the 3,000 new units delivered in 2014. New development is expected to average 1,100 new units per year from 2016-2018, below the long-term-average of 1,450.

ANNUAL RENTAL RATE GROWTH

Development

2010

100 80 60 40 20 0 -20 -40 -60

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL) Year

T12 Vol.

Qtr. Vol.

2007

$853.89

$123.08

6.94%

$859.43

$336.12

6.80%

$1,911.16

$1,231.50

6.73%

$2,138.77

$448.07

6.40%

$2,000

Volume ($MM)

HISTORICAL MARKET TRENDS

$2,500

2008

$1,500

$1,000 2009 $500 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,800 2012

$1,400 $1,200 Volume ($MM)

REAL-TIME SNAPSHOT

$1,600

2013

$1,000 $800 $600

$2,243.65

$227.96

6.48%

$2,070.75

$163.22

6.70%

$994.74

$155.49

6.88%

$690.10

$143.43

6.52%

$556.85

$94.72

6.56%

$442.04

$48.41

6.50%

$385.31

$98.77

6.54%

$312.41

$70.53

6.60%

$262.49

$44.80

6.60%

$278.96

$64.87

6.67%

$344.97

$164.78

6.36%

$940.49

$666.04

6.19%

$1,224.98

$329.29

6.22%

$1,333.99

$173.88

6.15%

$1,749.19

$579.98

6.36%

$1,322.39

$239.24

6.41%

$1,243.45

$250.34

6.30%

$1,257.46

$187.90

6.21%

$996.24

$318.76

6.07%

$1,113.47

$356.47

6.04%

$1,427.66

$564.53

5.72%

$1,342.16

$102.39

5.93%

$1,201.08

$177.68

6.02%

$1,289.75

$445.14

5.87%

$1,089.20

$363.99

6.01%

$400

$1,273.16

$286.35

6.00%

$200

$1,506.68

$411.21

5.85%

$1,558.05

$496.52

5.80%

$0

2014

Avg. Cap

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

NNJ Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$777.34

14

$28,971.26

1,566

2

Kushner Companies

New York, NY

$222.16

6

$5,198.25

145

3

Extell

New York, NY

$165.66

2

$5,297.07

169

4

Cammeby's

New York, NY

$136.00

1

$3,224.42

101

5

Fieldstone Properties

Parsippany, NJ

$134.15

2

$953.44

21

6

Mesirow Financial

Chicago, IL

$133.25

2

$2,107.61

36

7

JP Morgan

New York, NY

$125.50

1

$47,407.98

628

8

Cornerstone RE Advisers

Hartford, CT

$120.25

1

$9,842.20

225

9

Pantzer Properties

New York, NY

$120.00

1

$1,565.18

26

10

DSF Advisors

Waltham, MA

$110.03

1

$852.97

15

Top Sellers Rank Buyer

$1,482.83

$288.76

6.22%

$1,517.80

$321.32

6.09%

$1,330.24

$223.65

6.04%

Institutions and private investors have remained extremely active in NNJ’s multi-housing market during the first three quarters of 2015, accounting for 50% and 47% of all acquisitions, respectively. Meanwhile, listed REITs were net sellers. Powered by growth in the tech industry paired with profitability on Wall Street should continue to spur demand in the Northern New Jersey much more afforable multi-housing sector. Deliveries in 2015 are expected to be nearly half of 2014’s total. Fundamentals remain strong as residents are lured to New Jersey’s Gold Coast and train stations. Vacancy rate stood at 3.1% during the third quarter of 2015.

MARKET PERFORMANCE ($MIL) Location

NNJ Acq # Props Global Acq # Props

1

Home Properties

Rochester, NY

$777.34

14

$10,666.45

238

2

AvalonBay

Arlington, VA

$250.25

3

$7,273.52

125

3

Ironstate Development

Hoboken, NJ

$206.65

4

$816.19

15

4

Garden Homes

New York, NY

$151.00

2

$389.56

11

5

AFL-CIO

Washington, D.C.

$125.50

1

$1,640.77

58

6

Daibes Enterprises

Edgewater, NJ

$120.25

1

$273.50

7

7

Capri

Chicago, IL

$120.00

1

$2,550.90

60

8

CBRE Global Investors

Los Angeles, CA

$110.03

1

$30,970.51

902

9

Greenfield Partners

Westport, CT

$104.00

1

$2,693.06

145

10

Prism Capital Partners

Bloomfield, NJ

$104.00

1

$281.88

12

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$1,330.24

-12%

Q3 '15

$223.65

-30%

T12 Vol.

64

-29%

Q3 '15

8

-62%

T12 Vol.

8,111

3%

Q3 '15

1,284

-43%

T12 Vol.

$167,842.72

-13%

Q3 '15

$174,182.24

13%

T12 Vol.

6.04%

19

Q3 '15

5.03%

-91

HFF | 39

PHILADELPHIA, PENNSYLVANIA

Occupancy

Forecast

Long-Term Average

96.0% 95.5%

OCCUPANCY

95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 92.0% 91.5%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,800

2015

$1,600

Rent/Unit/Mo.

Philadelphia is not considered a high job-growth market, but nonetheless added 2.1% to its employment base in 2014, just slightly less than the U.S. average. Job growth cooled to 0.5% as of the third quarter of 2015, close to the annual growth-year average of 0.9% since 1997.

$1,400

RENTAL RATES

Overview

$1,200 $1,000 $800 $600 $400 $200

Axiometrics forecasts moderately strong job growth over the three-year forecast period, averaging 1.5% per year through 2018, or about 14,200 new jobs annually.

$0

2009

2010

2011

2012

2013

2014

2015

Annual absorption hit just more than 3,000 units in the third quarter of 2015, close to the 2014 annual total of 3,100. Demand is forecast to cool slightly through 2018, with an annual average absorption of 1,900 per year. Rental Rates Philadelphia’s annual average effective rent growth was a strong 3.9% in the third quarter, more than double the 1.7% rate for all of 2014. Despite occasional negative absorption in the market, effective rent growth has remained positive each year since 1999, save one. Rent growth is forecast to remain strong at an annual average of 3.7% from 2016-2018, with a peak of 4.1% in 2017, well above the long-term average of 2.2%.

HFF | 40

Forecast

Long-Term Average

2014

2015 2016 2017 2018

4%

YoY Change (%)

3% 2% 1% 0% -1% -2% -3% -4% -5%

2009

2010

2011

2012

2013

Completions Net Absorption Completion Forecast Net Absorption Forecast

Units

Occupancy remains high in this market, rarely dipping below 94% on an annual average basis since 1998 and averaging 95.6% over that period. Third-quarter 2015 occupancy stood at the market average of 95.7%. The average annual occupancy forecast for Philadelphia is 95.3% through 2018.

COMPLETIONS & NET ABSORPTION

Occupancy and Absorption

Effective Rent Growth

5%

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 -500 -1,000 -1,500

2009

2010

2011

2012

2013

2014

2015

2016

2017

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

40 30

YoY Change (%)

Completions are forecast to average close to 2,100 units per year through 2018, with 2,400 units anticipated for delivery in 2016.

EMPLOYMENT & POPULATION TOTALS

Annual apartment deliveries totaled just over 2,000 by the third quarter of 2015, twice the level attained in 2013 and the highest total since 2005. Deliveries dipped to less than 200 units after the Great Recession, despite continued population gain of more than 20,000 per year from 2011-2014.

ANNUAL RENTAL RATE GROWTH

Development

20 10 0 -10 -20 -30

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL) Year

T12 Vol.

Qtr. Vol.

2007

$898.88

$182.99

6.13%

$1,165.90

$392.98

6.13%

$1,980.26

$1,076.09

6.18%

$2,093.85

$441.79

6.27%

$2,000

Volume ($MM)

HISTORICAL MARKET TRENDS

$2,500

2008

$1,500

$1,000 2009 $500 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,600 2012

$1,200 Volume ($MM)

REAL-TIME SNAPSHOT

$1,400

$1,000 2013

Avg. Cap

$2,107.19

$196.33

6.16%

$1,937.49

$223.28

6.31%

$977.64

$116.24

6.23%

$676.26

$140.41

6.59%

$508.70

$28.77

6.88%

$318.85

$33.43

6.89%

$252.12

$49.50

7.03%

$176.11

$64.41

6.97%

$165.82

$18.49

6.99%

$149.83

$17.44

6.93%

$139.08

$38.75

7.08%

$742.79

$668.11

7.08%

$781.07

$56.77

7.02%

$1,050.52

$286.89

6.82%

$1,172.45

$160.68

6.68%

$588.71

$84.37

6.45%

$675.85

$143.91

6.36%

$595.90

$206.94

6.25%

$691.32

$256.11

6.16%

$1,111.64

$504.68

6.09%

$1,164.11

$196.38

6.21%

$800

$1,114.71

$157.53

6.42%

$1,086.32

$227.72

6.34%

$600

$1,065.26

$483.62

6.52%

2014

$400 $200 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

PHI Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$695.55

15

$28,971.26

1,566

2

CBRE Global Investors

Los Angeles, CA

$213.03

2

$31,293.03

1,055

3

Lowe Enterprises

Los Angeles, CA

$161.45

3

$3,726.00

99

4

Lubert-Adler

Philadelphia, PA

$131.91

2

$4,352.70

304 628

5

JP Morgan

New York, NY

$113.00

1

$47,407.98

6

Castle Rock Equity Group

Florham Park, NJ

$112.50

1

$157.00

2

7

Lindy Property Management

Jenkintown, PA

$106.94

1

$216.17

10

8

Scully Co

Jenkintown, PA

$103.59

2

$395.25

13

9

Equus Capital Partners

Morrisville, PA

$95.30

2

$5,757.60

274

10

MRP Realty

Washington, D.C.

$95.00

3

$1,290.70

25

Top Sellers Rank Buyer

$1,188.30

$319.42

6.44%

$1,503.27

$472.50

6.24%

$1,503.24

$227.69

6.41%

$1,474.35

$454.73

6.24%

$1,492.04

$337.11

6.31%

$1,369.25

$349.72

6.22%

$1,643.35

$501.79

6.20%

Philadelphia remains popular among Millennials, who are often lured by its transit and pedestrian-oriented lifestyle. At 56%, Institutions comprised over half all acquisitions during the first three quarters of 2015. Simultaneously, private investors made up most of the balance of the buyer pool at 34%. Canada has developed a sudden appetite for this market, investing over $112 million during that time. Job growth in construction is expected to return to annualized rates exceeding 5% during the next 2.5 years, as significant commercial construction projects continue to flow through the development pipeline, particularly in Center City and University City. Vacancy stood at 4.28% at the end of the third quarter in 2015.

MARKET PERFORMANCE ($MIL) Location

PHI Acq # Props Global Acq # Props

1

Home Properties

Rochester, NY

$695.55

15

$10,666.45

238

2

John Buck Co

Chicago, IL

$156.60

1

$4,179.85

31

3

Fairfield Residential

San Diego, CA

$140.24

2

$12,464.56

348

4

Pearl Properties

Philadelphia, PA

$124.67

3

$164.88

10

5

Realen

Berwyn, PA

$113.00

1

$169.64

4

6

Northwestern Mutual

Milwaukee, WI

$113.00

1

$7,047.14

180

7

Federal Capital

Bethesda, MD

$112.50

1

$1,920.97

34

8

Alterra Property Group

United States

$112.50

1

$112.50

1

9

Cross Props

Philadelphia, PA

$112.50

1

$147.50

2

10

Heitman

Chicago, IL

$106.94

1

$5,188.07

132

Sources: Real Capital Analytics, HFF Research

actual Volume

chg vs prior

T12 Vol.

$1,643.35

9%

Q3 '15

$501.79

43%

T12 Vol.

78

-5%

Q3 '15

19

Units

T12 Vol.

12,313

-16%

3,080

34%

$/unit

T12 Vol.

$142,776.35

Q3 '15

$175,212.83

# Trades

Q3 '15

Avg. Cap

6%

39% 0%

T12 Vol.

6.20%

-21

Q3 '15

6.16%

36

HFF | 41

PORTLAND, OREGON

Occupancy

Forecast

Long-Term Average

97%

OCCUPANCY

96% 95% 94% 93% 92% 91%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,600

2015

$1,400

The Beaverton and Northwest submarkets experienced the most new apartment deliveries in 2015 – receiving 939 and 721 units, respectively, according to Axiometrics’ identified supply. Beverton’s astounding 20.2% annual effective rent growth in the third quarter outperformed all other Portland submarkets. You read that correctly, 20.2%! Occupancy and Absorption Occupancy was 96.4% in the third quarter of 2015, which was also expected to be the full-year average, increasing from 95.8% in 2014. Axiometrics expects occupancy to moderate to 95.3% in 2016 and stay close to 95.0% in the three-year outlook. Supply and absorption have been essentially in balance, with approximately 5,000 units delivered and absorbed in 2014 and 2015. Some 194 units were absorbed in the third quarter of 2015. Though there was an imbalance between units delivered and absorbed in the third quarter, Axiometrics expects 2015 at 5,031 units absorbed. Absorption is forecast to lag behind new supply in 2016, but then stay in relative balance through 2018. Rental Rates Portland climbed to the top of the list for annual effective rent growth in 2015. Annual effective rent growth was 14.2% in the third quarter, and the MSA was expected to end 2015 at 12.0%. The 2014 rate was 6.7%. In the outlook, Axiometrics expects rent growth to average 4.7% as growth rates return to more sustainable levels, but that still puts it as one of the top markets in the country over the next three years.

HFF | 42

2009

2010

2011

2012

2013

2014

Forecast

Effective Rent Growth

RENTAL RATES

Rent/Unit/Mo.

15%

2015

Long-Term Average

10%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

A total of 5,154 new apartment units were delivered to the Portland market in 2014, well above the long-term average of 3,241 units. Some 1,122 units came to market in the third quarter of 2015, and Axiometrics expects a total of 4,609 units to have delivered in 2015, with another 5,411 units in 2016.

$600

$0

5% 0% -5% -10%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

6,000 5,000 4,000

Units

Development

$800

$200

COMPLETIONS & NET ABSORPTION

The market remains a center of the global clean-energy economy. It has an increasing concentration of clean technology firms, experienced manufacturers engaged in supply chain across various sectors and international recognition for innovative urban development. A robust entrepreneurial environment helps foster the growth of startup companies in industries such as software and athletics and outdoors. Axiometrics expects the metro to produce 27,000 jobs (2.4% job growth) in 2016, outperforming the forecasted national average of 1.8%.

$1,000

$400

3,000 2,000 1,000 0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

80 60

YoY Change (%)

Portland recorded 3.7% job growth in the third quarter of 2015 and is expected to have averaged 3.0% (32,324 jobs added) in 2015. Portland’s long-term, growthyear average job growth since 1997 was 2.4%. The above-average job growth is fueling the apartment market’s healthy performance.

$1,200

EMPLOYMENT & POPULATION TOTALS

Overview

40 20 0 -20 -40 -60 -80

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$2,500

Year

T12 Vol.

Qtr. Vol.

2007

$551.78

$76.40

5.70%

$653.65

$271.04

5.55%

$738.86

$253.28

5.53%

$1,069.22

$468.50

5.91%

$1,434.60

$441.78

5.81%

$1,241.88

$78.31

6.05%

$1,250.09

$261.50

6.24%

$830.10

$48.51

6.26%

$416.26

$27.94

6.40%

$368.36

$30.41

6.34%

$192.79

$85.93

6.35%

$254.46

$110.18

6.59%

$239.57

$13.05

7.59%

$307.93

$98.78

7.41%

$273.74

$51.73

7.29%

$480.32

$316.76

6.67%

$544.11

$76.85

6.53%

$725.12

$279.79

6.56%

$827.25

$153.86

6.49%

$861.06

$350.57

6.47%

$1,052.08

$267.86

6.55%

$836.58

$64.29

6.48%

$847.32

$164.59

6.43%

$857.28

$360.53

6.34%

$743.38

$153.97

6.09%

$812.64

$133.55

6.16%

$847.30

$199.25

6.21%

$930.39

$443.62

6.38%

$961.62

$185.20

6.35%

$1,155.92

$327.85

6.33%

$1,457.00

$500.33

6.07%

$1,472.65

$459.27

5.82%

$1,645.57

$358.11

5.79%

$1,847.68

$529.97

5.75%

$2,062.49

$715.13

5.78%

Volume ($MM)

HISTORICAL MARKET TRENDS

$2,000

2008

$1,500

$1,000 2009 $500 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,800 2012

$1,400 $1,200 Volume ($MM)

REAL-TIME SNAPSHOT

$1,600

2013

$1,000 $800 $600

2014

$400 $200 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

POR Acq # Props Global Acq # Props

1

Jackson Square

San Francisco, CA

$268.77

7

$2,134.28

76

2

Holland Partners

Vancouver, WA

$150.22

4

$1,864.26

91

3

Guardian Life Insurance Co

New York, NY

$131.78

4

$3,379.19

79

4

TruAmerica Multi-housing

Los Angeles, CA

$131.78

4

$2,356.02

49

5

Heitman

Chicago, IL

$120.85

2

$12,705.34

298

6

NBP Capital

Portland, OR

$113.45

2

$192.60

7

TIAA-CREF

New York, NY

$109.15

2

$33,062.09

8 550

8

Sequoia Equities

Walnut Creek, CA

$107.55

2

$1,507.05

33

9

Invesco RE

Atlanta, GA

$105.50

1

$27,248.90

564

10

Allstate

Northbrook, IL

$87.78

2

$2,142.70

45

Top Sellers Rank Buyer

Avg. Cap

With trailing twelve month volumes surpassing $2 billion, Portland’s multihousing market has reached a record high. During the first three quarters of 2015, private investors control the buyer composition, accounting for 62% of all acquisitions. While not exempt from economic cycles, Portland maintains its allure. Recent strong job creation trends across a broad base of industries have placed Portland in an enviable position. Its very low energy costs and above average concentration of highly skilled workers make it attractive for many businesses. The $1.5 billion MAX Orange Line commuter rail system stretching from Portland to southeast suburban Milwaukee began running in September and is expected to bring significant economic benefits to the area. MARKET PERFORMANCE ($MIL)

Location

POR Acq # Props Global Acq # Props

1

Holland Partners

Vancouver, WA

$335.00

8

$2,120.43

50

2

Unico Properties

Seattle, WA

$158.50

2

$1,617.48

39

3

Fowler Property Acquisitions San Francisco, CA

$130.13

7

$2,882.37

241

4

UBS

Zurich, Switzerland

$120.85

2

$19,079.38

503

5

Mill Creek Residential

Dallas, TX

$109.15

2

$922.09

6

Carlyle Group

Washington, D.C.

$107.03

2

$36,421.78

1,029

7

CIGNA

Hartford, CT

$105.50

1

$4,634.68

106

8

Cardinal Group Investments

Denver, CO

$97.20

1

$132.97

5

9

Fundamental Advisors LP

New York, NY

$97.20

1

$372.26

7

10

Invesco RE

Atlanta, GA

$90.50

2

$17,035.80

15

482

Sources: Real Capital Analytics, HFF Research

Volume # Trades Units $/unit Avg. Cap

actual

chg vs prior

T12 Vol.

$2,062.49

42%

Q3 '15

$715.13

35%

T12 Vol.

120

50%

Q3 '15

32

10%

T12 Vol.

14,132

25%

Q3 '15

4,287

12%

T12 Vol.

$152,090.09

Q3 '15

$168,460.46

15% 15%

T12 Vol.

5.78%

-29

Q3 '15

5.56%

-48

HFF | 43

SAN ANTONIO, TEXAS

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 88%

2009

2010

Rental Rates San Antonio had a strong third quarter with annual effective rent growth of 3.6%. The year is expected to have ended at 3.5%, a very strong result compared to the market’s historical average. Annual effective rent growth for San Antonio averaged 1.6% since 1998. When excluding negative growth-years, the long-term average is 2.2%. Expect the market to maintain growth above the historical norm and average 3.7% growth the next three years.

HFF | 44

2017

2018

2016

2017

2018

Forecast

Rent/Unit/Mo.

$400

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2009

2010

2011

2012

2013

2014

Forecast

Effective Rent Growth

2015

Long-Term Average

4% 3% 2% 1% 0% -1% -2% -3%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

8,000 7,000 6,000

Units

Absorption was 2,485 units in the third quarter, outpacing supply by a few hundred units. Axiometrics expects 7,267 units to have been absorbed during 2015. In the three-year outlook, absorption is forecast to average close to 3,000 units annually.

COMPLETIONS & NET ABSORPTION

San Antonio apartments were 94.5% occupied in the third quarter, with the end-of-year forecast at 94.1%. Occupancy rates in the market have averaged 94.0% annually since 1997. In the three-year outlook, San Antonio occupancy is expected to average 94.4%, with a peak of 94.7% in 2017.

2016

$600

5%

5,000 4,000 3,000 2,000 1,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

60 50

YoY Change (%)

Occupancy and Absorption

2015

$800

$0

EMPLOYMENT & POPULATION TOTALS

An average of 3,000 units have been delivered to the San Antonio market annually since 1997. With the pace of new deliveries increasing during the back half of 2015, Axiometrics expected last year to end with a total of 6,308 new units in the metro. The three-year outlook sees approximately 3,352 units delivered annually, close to the long-term average.

2014

$200

Development Developers delivered 2,095 new apartment units to the market just in the third quarter of 2015. The Bexar County (547 units) and East (327 units) submarkets received the highest number of units, but Far North Central (294 units) and Far West (279 units) also saw a large portion, according to Axiometrics’ identified supply.

2013

$1,000

RENTAL RATES

San Antonio has seen healthy job growth since the recession, with the rate averaging 2.9% since 2011. The metro’s job growth was 3.5% in the third quarter of 2015, 141 basis points above the national average. San Antonio’s job growth is forecast to remain above the national rate, averaging 2.0% in the three-year outlook (2016-2018), compared to 1.7% nationwide.

2012

Effective Rental Rates

$1,200

Overview

2011

40 30 20 10 0 -10 -20

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$1,800

Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$620.17

$140.98

6.89%

$818.49

$304.13

6.91%

$769.63

$107.77

7.03%

$698.84

$145.96

7.31%

$713.01

$155.14

7.32%

$429.98

$21.10

7.18%

$450.81

$128.60

7.25%

$448.04

$143.19

7.39%

$297.84

$4.95

0.00%

$302.74

$26.00

0.00%

$231.75

$57.61

0.00%

$199.51

$110.96

0.00%

$194.56

$0.00

0.00%

$171.06

$2.50

0.00%

$238.54

$125.09

6.17%

$306.62

$179.04

6.22%

$357.23

$50.61

6.30%

$552.24

$197.50

5.90%

$601.75

$174.60

6.03%

$620.69

$197.97

5.72%

$713.63

$143.55

5.77%

$642.59

$126.46

5.96%

$726.44

$258.45

5.97%

$816.53

$288.07

6.21%

$931.70

$258.72

6.12%

$1,039.39

$234.15

6.18%

$1,066.60

$285.66

6.24%

$1,082.48

$303.96

6.03%

$911.15

$87.39

6.12%

$1,095.03

$418.03

6.10%

$1,219.75

$410.38

6.48%

$1,274.45

$358.65

6.50%

$1,685.64

$498.58

6.47%

$1,598.42

$330.81

6.38%

$1,555.29

$367.24

6.15%

$1,400 $1,200 Volume ($MM)

HISTORICAL MARKET TRENDS

$1,600

2008

$1,000 $800

2009

$600 $400 $200 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,400 2012

$1,000 Volume ($MM)

REAL-TIME SNAPSHOT

$1,200

$800

2013

$600 2014

$400 $200 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

SNA Acq # Props Global Acq # Props

1

Blackstone

New York, NY

$199.46

5

$191,599.69

6,868

2

Intercontinental RE

Boston, MA

$105.50

1

$4,044.43

115

3

Pure Multi-Housing REIT

Vancouver, Canada

$105.25

2

$584.66

19

4

Presidium Group

Dallas, TX

$102.62

7

$299.34

26

5

Sun Holdings

Houston, TX

$96.15

2

$383.96

12

6

RailField

Bethesda, MD

$90.00

2

$90.00

2

7

Artemis RE Partners

Bethesda, MD

$90.00

2

$1,310.19

78

8

Inland Real Estate Group

Oak Brook, IL

$80.70

2

$18,974.35

999

9

Fulton Property Group

San Antonio, TX

$78.90

2

$209.38

7

10

Cottonwood Residential

Salt Lake City, UT

$68.65

2

$661.71

32

Top Sellers Rank Buyer

Location

San Antonio’s multi-housing market remains strong with trailing twelve month volumes exceeding $1.5 billion. Private investors accounted for nearly two thirds of all acquisitions during the first three quarters of 2015, while the less active Institutions made up 20% of the buyer pool. Institutions were net sellers in this time period. Median household income, historically around 10% below the U.S. average, reached parity for the first time in early 2015, boosted by the surge of high-paying jobs for healthcare professionals. With unemployment rate at a cyclical low of 3.7% as of September 2015, expect new household formation to trigger an increase in apartment demand.

MARKET PERFORMANCE ($MIL)

SNA Acq # Props Global Acq # Props

1

Western Rim

Irvine, CA

$221.79

5

$1,161.88

30

2

Crow Holdings

Dallas, TX

$141.15

2

$7,470.26

501

3

Venterra Properties

Richmond Hill, Canada

$130.04

4

$576.97

26

4

CWS Capital Partners

Newport Beach, CA

$118.32

4

$1,063.18

32

5

Broad Street Development LLC New York, NY

$105.50

1

$1,659.44

24

6

Embrey Development

San Antonio, TX

$105.25

2

$987.02

27

7

Lynd

San Antonio, TX

$95.59

6

$1,201.50

86

8

NRP Group LLC

Cleveland, OH

$88.70

2

$213.20

4

9

Blackstone

New York, NY

$84.77

2

$117,891.34

10

AVR Realty

Yonkers, NY

$81.75

2

$2,014.91

2,500 18

Sources: Real Capital Analytics, HFF Research

Volume # Trades Units $/unit Avg. Cap

actual

chg vs prior

T12 Vol.

$1,555.29

28%

Q3 '15

$367.24

11%

T12 Vol.

70

13%

Q3 '15

19

36%

T12 Vol.

16,881

9%

Q3 '15

4,393

36%

T12 Vol.

$97,974.56

Q3 '15

$118,486.52

21% 7%

T12 Vol.

6.15%

-33

Q3 '15

0.00%

0

HFF | 45

SAN DIEGO, CALIFORNIA

Occupancy

Forecast

Long-Term Average

96.5% 96.0%

OCCUPANCY

95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 92.5%

2009

2010

In the three-year outlook, job growth is expected to gradually moderate before picking up again in 2018. The three-year average is forecast to be 1.9%, outperforming the long-term average (1997-2014) of 1.6%.

2013

2014

2015

2016

2017

2018

2016

2017

2018

Forecast

Rent/Unit/Mo.

$2,000

RENTAL RATES

San Diego job growth was 3.4% in the third quarter of 2015, compared to the nation’s 2.1%. The local economy was expected to end 2015 at 3.1%, (42,343 jobs added).

2012

Effective Rental Rates

$2,500

Overview

2011

$1,500 $1,000 $500 $0

2009

2010

2011

2012

2013

2014

2015

Rental Rates San Diego had a very strong third quarter, with an annual effective rent growth of 7.8%. The year was expected to end at 6.7% and average 4.0% in the three-year outlook. The forecast three-year outlook rate is 50 basis points above the market’s long-term average of 3.5%.

HFF | 46

Long-Term Average

YoY Change (%)

6% 4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

7,000 6,000 5,000

Units

In the third quarter, 2,507 units were absorbed in San Diego. Absorption was more than twice the amount of new supply, and Axiometrics expected the full-year 2015 absorption count to be 3,941 units. In the three-year outlook, absorption is expected to average 4,819 units per year, outpacing new supply in 2017 and 2018.

COMPLETIONS & NET ABSORPTION

San Diego’s third-quarter occupancy rate was 95.6%, and is expected to have finished the year at 95.3%, 80 basis points above the long-term average of 94.5%. In the three-year outlook, occupancy rates are expected to average 95.6%, gradually increasing starting in 2016, reaching a high of 96.1% in 2018.

Forecast

Effective Rent Growth

8%

4,000 3,000 2,000 1,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

60 40

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

San Diego received 4,818 new apartment units in 2014, the highest annual count since 2006, and nearly 1,500 units more than the long-term average of 3,419 units. Some 1,211 new apartment units were delivered in San Diego in the third quarter of 2015, and the full-year count is expected to land at 3,824 units, just over the long-term average. San Diego is expected to receive an average of 4,113 units per year over the three-year outlook.

ANNUAL RENTAL RATE GROWTH

Development

20 0 -20 -40 -60 -80

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$2,500

Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$1,302.94

$376.60

5.16%

$1,500.77

$448.90

5.26%

$1,440.32

$407.60

5.38%

$2,628.63

$1,395.52

5.41%

$2,405.87

$153.85

5.62%

$2,139.37

$182.40

5.76%

$2,052.58

$320.82

5.69%

$962.34

$305.28

5.71%

$919.61

$111.11

5.66%

$874.83

$137.63

5.69%

$589.98

$35.97

5.87%

$429.76

$145.06

6.06%

$484.63

$165.98

6.14%

$436.66

$89.66

6.29%

$763.28

$362.59

6.10%

$761.56

$143.34

6.08%

$742.56

$146.98

6.00%

$828.56

$175.66

5.74%

$569.57

$103.59

5.64%

$1,115.67

$689.44

5.57%

$1,175.67

$206.98

5.59%

$1,291.96

$291.95

5.61%

$1,478.98

$290.61

5.65%

$1,196.37

$406.83

5.70%

$1,452.42

$463.02

5.60%

$1,332.70

$172.24

5.53%

$1,635.58

$593.48

5.49%

$1,948.47

$719.72

5.50%

$1,775.66

$290.22

5.60%

$2,436.29

$832.87

5.54%

$2,143.46

$300.65

5.42%

$1,782.83

$359.09

5.05%

$2,292.74

$800.13

4.95%

$1,961.73

$501.86

4.98%

$2,200.56

$539.48

4.97%

$2,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$3,000

2008 $1,500

2009

$1,000

$500 2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$2,500 2012

Volume ($MM)

REAL-TIME SNAPSHOT

$2,000

$1,500

2013

$1,000 2014 $500

$0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

SND Acq # Props Global Acq # Props

1

Essex Property Trust

Palo Alto, CA

$664.66

10

$10,571.85

241

2

Guardian Life Insurance Co

New York, NY

$276.45

5

$3,379.19

79

3

TruAmerica Multi-housing

Los Angeles, CA

$276.45

5

$2,356.02

49

4

Clarion Partners

New York, NY

$229.60

3

$27,415.19

1,080

5

Alliance Residential

Phoenix, AZ

$160.58

1

$2,822.13

135

6

Prudential RE Investors

Madison, NJ

$160.58

1

$43,844.86

1,152

7

R&V Management Corp

San Diego, CA

$150.40

4

$1,100.91

37

8

John Hancock

Boston, MA

$142.50

1

$2,573.46

29

9

Kreutzkamp 2000 RT

Chula Vista, CA

$123.30

5

$192.41

13

10

Eden Housing

Hayward, CA

$120.00

2

$175.41

8

Top Sellers Rank Buyer

Recognized as one of the leading high-tech hubs in the U.S., San Diego’s unique economy is moored by software industries and growing entrepreneurial, knowledge-based companies. Buoyant incomes paired with low energy prices have set the stage for prolonged tourism expansion. San Diego’s multi-housing market remains sturdy and continued to post low vacancy rates below 5%. At 61%, private investors accounted for over half of all acquisitions during the first three quarters of 2015, followed by the less active Institutions that made up 28% of the buyer pool. With continuing job growth, San Diego should maintain its steady pace of liquidity.

MARKET PERFORMANCE ($MIL) Location

SND Acq # Props Global Acq # Props

1

BRE Properties

San Francisco, CA

$639.09

11

$6,108.34

135

2

Gables Residential

Atlanta, GA

$229.60

3

$5,178.01

121

3

R&V Management Corp

San Diego, CA

$197.93

10

$421.51

24 873

4

LaSalle Investment

Chicago, IL

$160.58

1

$27,195.68

5

Resmark Companies

San Diego, CA

$142.50

1

$226.89

3

6

JH Real Estate Partners

Newport Beach, CA

$137.55

4

$756.76

24 902

7

CBRE Global Investors

Los Angeles, CA

$121.00

1

$30,970.51

8

Related California

Irvine, CA

$120.00

2

$120.00

actual Volume

9

AvalonBay

Arlington, VA

$112.00

1

$7,273.52

125

UDR

Littleton, CO

$102.89

2

$6,278.55

289

Sources: Real Capital Analytics, HFF Research

$2,200.56

Q3 '15

$539.48

# Trades

T12 Vol.

Units

Q3 '15 $/unit

2

10

T12 Vol.

Avg. Cap

chg vs prior 3% 7%

166

41%

Q3 '15

58

61%

T12 Vol.

11,276

-9%

3,125

25%

T12 Vol.

$193,630.33

4%

Q3 '15

$178,160.25

-12%

T12 Vol.

4.97%

-45

Q3 '15

4.94%

-15

HFF | 47

SAN FRANCISCO, CALIFORNIA

Occupancy

Forecast

Long-Term Average

96.5%

OCCUPANCY

96.0% 95.5% 95.0% 94.5% 94.0%

2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$4,000

2015

Employers added 47,067 jobs in the four quarters ending with the third quarter of 2015, a job-growth rate of 4.6%. Axiometrics expects the year to have ended at a rate of 4.0%, nearly 200 basis points above the national rate of 2.1%. In the threeyear outlook, San Francisco job growth is expected to average 2.6% as job growth slows to a more sustainable pace in 2016 and 2017 before picking up in 2018.

$3,000

Rent/Unit/Mo.

Since the end of the recession, San Francisco has enjoyed job growth well above its 1.0% long-term average, averaging 4.6% employment growth from 2011-2014.

RENTAL RATES

$3,500

Overview

$2,500 $2,000 $1,500 $1,000 $500 $0

2009

2010

2011

2012

2013

2014

2015

Rental Rates San Francisco’s annual effective rent growth was 11.3% in the third quarter of 2015, the fifth highest nationwide when ranking Axiometrics’ 120 markets by effective rent growth. The third-quarter number was more than twice the national average (5.1%). San Francisco is also performing well relative to its long-term average of 3.9% rent growth. Axiometrics forecasts effective rent growth to start approaching more sustainable levels during the forecast period, but remain one of the top markets in the country. The market’s annual rate is expected to average 5.0% in the three-year outlook, with a high of 5.8% in 2016.

HFF | 48

Long-Term Average

YoY Change (%)

10% 5% 0% -5% -10%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

8,000 7,000 6,000 5,000

Units

Some 2,066 units were absorbed in San Francisco during the third quarter of last year. The supply-absorption balance was almost in equilibrium in 2014, but the 2015 forecast targets full-year absorption at 3,912 units, below the pace of new supply. Axiometrics expects absorption to outpace supply next in 2017, and to average 2,752 units per year in the three-year outlook.

COMPLETIONS & NET ABSORPTION

San Francisco’s 96.5% occupancy rate in the third quarter was 130 basis points above the market’s long-term average of 95.2% since 1997. The rate is forecasted to have been 96.3% at the end of 2015 and average 95.7% in the three-year outlook.

Forecast

Effective Rent Growth

15%

4,000 3,000 2,000 1,000 0 -1,000 -2,000

2009

2010

2011

2012

2013

2014

2015 2016 2017 2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

80 60

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

Developers delivered 1,188 new apartment units in the third quarter of 2015, 487 of which went to one of San Francisco’s urban submarkets, South of Market. Axiometrics expected 5,319 units to come to market during the entirety of 2015 – the highest count since 1997. San Francisco’s long-term average is 2,106 units annually, and the three-year outlook average is 3,414 units per year.

ANNUAL RENTAL RATE GROWTH

Development

40 20 0 -20 -40 -60

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$8,000

Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$3,795.07

$468.49

4.93%

$3,716.42

$967.83

4.95%

$3,437.34

$1,096.82

4.92%

$5,915.20

$3,382.05

5.00%

$5,960.22

$513.51

5.06%

$5,609.60

$617.22

5.04%

$5,157.24

$644.46

5.28%

$2,095.43

$320.24

5.30%

$1,639.37

$57.45

5.33%

$2,000

$1,313.89

$291.73

5.50%

$1,024.43

$355.00

5.55%

$1,000

$1,042.05

$337.86

6.10%

$1,133.99

$149.39

6.19%

$1,175.05

$332.80

6.27%

$1,553.98

$733.93

6.07%

$1,602.90

$386.78

5.85%

$2,305.12

$851.61

5.86%

$3,316.14

$1,343.82

5.68%

$3,110.89

$528.67

5.71%

$3,848.38

$1,124.28

5.66%

$3,682.74

$685.97

5.56%

$3,438.34

$1,099.43

5.53%

$4,818.32

$1,908.65

5.35%

$5,180.91

$1,486.86

5.24%

$7,586.47

$3,091.54

5.18%

$7,228.92

$741.87

5.11%

$6,430.55

$1,110.29

5.03%

$5,781.08

$837.39

5.01%

$3,303.74

$614.19

4.89%

$4,712.42

$2,150.55

4.74%

$5,084.12

$1,481.98

4.71%

$6,600.57

$2,353.85

4.63%

$7,089.98

$1,103.60

4.58%

$6,052.27

$1,112.84

4.59%

$5,729.26

$1,158.97

4.41%

$6,000 $5,000 Volume ($MM)

HISTORICAL MARKET TRENDS

$7,000

2008

$4,000 $3,000

2009

2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$7,000 2012

$5,000 Volume ($MM)

REAL-TIME SNAPSHOT

$6,000

$4,000

2013

$3,000 2014

$2,000 $1,000 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

SNF Acq # Props Global Acq # Props

1

Maximus RE Partners

San Francisco, CA

$1,605.50

4

$1,605.50

4

2

Essex Property Trust

Palo Alto, CA

$1,475.52

22

$10,571.85

241

3

Rockpoint Group

Boston, MA

$623.00

3

$15,178.21

156

4

Veritas Investments

San Francisco, CA

$409.54

54

$764.54

130

5

Pacific Urban

Encino, CA

$294.47

7

$3,397.45

137

6

CPP Investment Board

Toronto, Canada

$208.10

4

$31,765.31

323

7

TruAmerica Multi-housing

Los Angeles, CA

$200.10

5

$2,356.02

49

8

Guardian Life Insurance Co New York, NY

$200.10

5

$3,379.19

79

9

Carlyle Group

Washington, D.C.

$189.48

21

$20,354.96

821

10

Spieker Companies

Palo Alto, CA

$178.36

13

$405.45

44

Top Sellers Rank Buyer

Despite mounting housing costs, people continue to flock to the West Coast seeking employment. Ranking fourth in the nation in terms of absolute employment growth during the last 12 months ending August 2015, San Francisco boasted one of the strongest job markets in the country. Private investors accounted for 68% of all acquisitions during the first three quarters of 2015, more than double the 25% share from the Institutions. Asian investors continue to show an affinity for this market, injecting nearly $370 million over the past 24 months through September 2015. With an annualized rent growth rate of over 11% during the 3Q according to Axiometrics, tenants are not expected to experience relief anytime soon. MARKET PERFORMANCE ($MIL)

Location

SNF Acq # Props Global Acq # Props

1

BRE Properties

San Francisco, CA

$1,124.79

16

$6,108.34

135

2

Rockpoint Group

Boston, MA

$1,068.50

3

$14,251.24

119

3

Fortress

New York, NY

$982.50

1

$17,715.99

1,008

4

Pacific Urban

Encino, CA

$424.25

8

$3,044.34

109

5

Principal Financial

Des Moines, IA

$410.00

1

$12,333.17

378

6

SARES-REGIS Group

Irvine, CA

$255.10

4

$3,330.13

111

7

Essex Property Trust

Palo Alto, CA

$253.99

8

$3,266.86

100

8

Lyon Capital Ventures

Newport Beach, CA

$180.23

2

$1,453.87

31

9

Fairfield Residential

San Diego, CA

$173.10

4

$12,464.56

348

10

Praedium Group

New York, NY

$152.22

3

$6,554.34

491

Sources: Real Capital Analytics, HFF Research

actual Volume

T12 Vol.

$5,729.26

Q3 '15

$1,158.97

# Trades

T12 Vol.

Units

Q3 '15 $/unit Avg. Cap

chg vs prior 13% 4%

352

-2%

Q3 '15

82

-9%

T12 Vol.

22,285

1%

3,819

-31%

T12 Vol.

$287,277.67

19%

Q3 '15

$350,023.52

62%

T12 Vol.

4.41%

-30

Q3 '15

4.10%

-43

HFF | 49

SEATTLE, WASHINGTON

Occupancy

Forecast

Long-Term Average

96.0% 95.5%

OCCUPANCY

95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 92.0%

2009

2010

2011

2012

2013

Effective Rental Rates

$2100

2014

2015

2016

2017

2018

2016

2017

2018

Forecast

$1900

More than 9,600 units were delivered to the Seattle market last year, as of the third quarter of 2015. Seattle is expected to have finished the year with 9,469 new units, roughly 750 more units than 2014. Most of the new supply has been delivered into the Downtown/ Capitol Hill/Queen Anne submarkets, in which 2,316 units were expected to deliver, according to Axiometrics’ identified supply. Over the next three years, new supply will average 6,980 units per year, peaking in 2016 with 8,941 units. Occupancy and Absorption Seattle’s occupancy rate was above the national average of 95.3% in 3Q15. The market’s occupancy rate remained unchanged at 95.7% from 2Q15 to 3Q15 and was expected to finish 2015 at this same rate. In 2016, occupancy is expected to moderate to 94.9% but remain well above 94% throughout the forecast period (2016-2018). As of the third quarter of 2015, Seattle absorbed 9,096 units. Through the end of 2015, absorption is expected to have increased to 9,262 units and average 6,408 units per year over the next three years.

Rent/Unit/Mo.

RENTAL RATES

$500

2011

2012

2013

2014

2015

Forecast

Effective Rent Growth

Long-Term Average

0% -5% -10% -15%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

60 40

YoY Change (%)

EMPLOYMENT & POPULATION TOTALS

HFF | 50

2010

5%

Rental Rate Seattle has had strong rent growth, despite the increase of new supply. Seattle’s annual rent growth rate was above the national average of 5.1%. Effective rent increased from $1,580 in 2Q15 to $1,609 in 3Q15, which resulted in an annual growth rate of 7.0%. Annual effective rent growth is forecast to be 4.3% in 2016, and average 4.3% through the forecast.

2009

10%

YoY Change (%)

Development

$1100 $900

Units

Seattle is expected to have finished 2015 with an additional 50,400 jobs, a slight increase from 2014’s 48,500 jobs. Looking forward, job gain is expected to moderate to 42,000 jobs in 2016 and average 37,500 jobs per year through 2018.

$1500 $1300

$700

ANNUAL RENTAL RATE GROWTH

Seattle’s edge in e-commerce, data storage and cloud computing has lured a growing roster of top tech firms to the Emerald City, cementing SEA’s status as a global hub for information technology. Top tech, software and app developer positions will play a key role in the area’s expansion, with tech employment growing at nearly double the pace of total payrolls over the next two years. Venture capital placements trail those of San Jose and San Francisco, but startup financing is gaining momentum. Washington sprang to the fourth position among states in venture capital financing in the second quarter of 2015, according to PricewaterhouseCoopers.

$1700

COMPLETIONS & NET ABSORPTION

Overview

20 0 -20 -40 -60 -80 -100

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics, REIS

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$5,000

Year

T12 Vol.

Qtr. Vol.

2007

$2,619.40

$745.00

5.52%

$2,762.40

$747.10

5.48%

$4,000 $3,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$4,500

2008

$3,000 $2,500 $2,000

2009

$1,500 $1,000 $500 $0

2010 Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$4,500 2012

$3,500 $3,000 Volume ($MM)

REAL-TIME SNAPSHOT

$4,000

2013

$2,500 $2,000 $1,500

$2,618.80

$392.30

5.36%

$2,999.30

$1,114.80

5.34%

$2,912.90

$658.60

5.36%

$2,573.30

$407.40

5.31%

$2,657.20

$476.30

5.43%

$1,719.10

$176.70

5.58%

$1,125.00

$64.50

5.60%

$905.00

$187.50

6.09%

$472.70

$44.00

6.18%

$408.50

$112.50

6.25%

$411.30

$67.30

6.37%

$371.90

$148.00

6.12%

$687.80

$360.00

6.21%

$947.40

$372.10

5.99%

$1,052.40

$172.30

5.93%

$1,331.80

$427.40

5.75%

$1,452.10

$480.30

5.61%

$1,395.80

$315.80

5.57%

$1,670.40

$446.90

5.48%

$1,696.70

$453.70

5.43%

$2,023.30

$806.90

5.42%

$2,825.10

$1,117.50

5.41%

$3,183.70

$805.50

5.45%

$3,255.40

$525.50

5.44%

$3,039.50

$591.00

5.40%

$2,828.80

$906.80

5.37%

$2,480.20

$456.90

5.30%

$1,000

$3,435.50

$1,480.80

5.50%

$500

$4,035.60

$1,191.20

5.50%

$4,202.60

$1,073.80

5.36%

$0

2014

Avg. Cap

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

DEN Acq # Props Global Acq # Props

1

Essex Property Trust

San Mateo, CA

$732.80

17

$10,543.90

240

2

TruAmerica Multifamily

Los Angeles, CA

$561.90

13

$2,505.50

52

3

Guardian Life Insurance Co

New York, NY

$555.70

14

$3,535.20

83

4

Starwood Capital Group

Greenwich, CT

$472.00

10

$36,095.80

1,527

5

Kennedy Wilson

Beverly Hills, CA

$404.80

16

$8,981.50

306

6

Heitman

Chicago, IL

$385.70

2

$12,876.40

304

7

Greystar RE Partners

Charleston, SC

$328.70

5

$10,386.10

256

8

Fowler Property Acquisitions San Francisco, CA

$255.10

12

$4,313.40

313

9

Equity Residential

Chicago, IL

$184.10

4

$22,583.80

404

10

Allstate

Northbrook, IL

$183.20

5

$2,142.70

45

Top Sellers Rank Buyer

Location

1

Holland Partners

Vancouver, WA

$717.70

11

$2,120.40

50

2

Simpson Housing LLLP

Denver, CO

$583.30

12

$25,194.00

1,041

3

Carmel Partners

San Francisco, CA

$568.30

14

$6,108.30

135

4

Fairfield Residential

San Diego, CA

$532.60

6

$2,690.40

21

5

GE Capital

Norwalk, CT

$338.90

8

$1,056.00

52

6

Wood Partners

Marietta, GA

$221.00

8

$48,129.80

1,299

7

Bascom Group

Irvine, CA

$221.00

8

$581.70

24

8

DiNapoli Capital Partners

Walnut Creek, CA

$193.70

4

$1,493.20

51

9

Berkshire Property Advisors

Boston, MA

$193.20

5

$17,665.00

496

10

Embrey Development

San Antonio, TX

$167.90

7

$1,493.30

52

$4,547.90

$802.20

5.28%

$4,226.80

$1,159.70

5.14%

$4,547.30

$1,511.60

5.10%

Seattle’s multi-housing market remains highly liquid, with trailing twelve month volumes well above $4 billion. During the first three quarters of 2015, private investors made up nearly half of the buyer pool, accounting for 47% of all purchases. The equally ardent Institutions followed closely behind, accounting for 45% of all acquisitions. Comparably, listed REITs were net sellers during that time period. Underscoring the growing influence of Canadian capital in the Seattle market, over $100 million was invested during that time. With job growth clocking in at nearly twice the U.S. pace, hiring has expanded across a wide range of industries. As of September 2015, high-tech employment stood at nearly 15% above its pre-recession peak and should continue to bring high-wage earners to the local multihousing market. MARKET PERFORMANCE ($MIL)

DEN Acq # Props Global Acq # Props

Sources: Real Capital Analytics, HFF Research

actual Volume

chg vs prior

T12 Vol.

$4,547.30

13%

Q3 '15

$1,511.60

30%

T12 Vol.

219

11%

Q3 '15

66

8%

Units

T12 Vol.

23,171

-1%

Q3 '15

7,626

13%

$/unit

T12 Vol.

$208,908

13%

Q3 '15

$208,233

T12 Vol.

5.10%

-40

Q3 '15

6.05%

-82

# Trades

Avg. Cap

7%

HFF | 51

TAMPA, FLORIDA

Occupancy

Forecast

Long-Term Average

96% 95%

OCCUPANCY

94% 93% 92% 91% 90% 89% 2009

2010

2011

2012

2013

2014

2016

2017

2018

2016

2017

2018

Forecast

Effective Rental Rates

$1,400

2015

Rent/Unit/Mo.

Tampa-St. Petersburg-Clearwater’s job growth of 2.5% in the third quarter of 2015 was 40 basis points (bps) higher than the national rate of 2.1% and more than double the metro’s long-term average of 1.2%. The Tampa Bay area is expected to have ended 2015 with 2.7% job growth, representing 33,221 added jobs.

RENTAL RATES

$1,200

Overview

$1,000 $800 $600 $400 $200

In the three-year outlook, the market’s job growth is expected to average 2.1%, gradually slowing throughout the period. However, in 2019 -- one year past the short-term outlook -- Axiometrics expects job growth to reaccelerate.

$0

2009

2010

2011

2012

2013

2014

2015

Rental Rates The market’s 6.1% average annual effective rent growth in the third quarter outpaced the national rate of 5.1%. Tampa’s year-end 2015 average was expected to land at 5.6%, well above the long-term (1998-2014) average of 2.2%. Excluding the years when the market’s rent growth was negative, Tampa-St. Pete recorded a growth-year average of 4.1%. Axiometrics forecasts annual effective rent growth to average 3.7% during the three-year outlook, with a high of 3.9% in 2017.

HFF | 52

Long-Term Average

YoY Change (%)

6% 4% 2% 0% -2% -4% -6%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

7,000 6,000 5,000

Units

Some 1,312 units were absorbed in the third quarter, outpacing supply. The 2015 absorption total is expected to have been 4,809 units, a relative balance with supply. Tampa’s long-term absorption average is 4,490 units. In the three-year outlook, an average of 2,525 units will be absorbed.

COMPLETIONS & NET ABSORPTION

Tampa-St. Petersburg-Clearwater’s third-quarter occupancy rate of 95.7% was 40 basis points above the national average (95.3%). The rate is expected to have ended the year at 95.4%, well above the long-term average of 94.1%. The metro’s occupancy rate is forecast to average 94.8% during the outlook period.

Forecast

Effective Rent Growth

8%

4,000 3,000 2,000 1,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

60

YoY Change (%)

Occupancy and Absorption

EMPLOYMENT & POPULATION TOTALS

Developers delivered 987 new apartment units to the Tampa-St. PetersburgClearwater market in the third quarter of 2015. Axiometrics expected the full-year count to land at 4,344 units, close to the long-term average of 4,216 units per year and a small uptick from the 4,012 units delivered in 2014. Tampa Bay is expected to receive an average of 3,419 units per year in the three-year outlook.

ANNUAL RENTAL RATE GROWTH

Development

40 20 0 -20 -40 -60 -80

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Axiometrics

Rolling 12-mo. Total

Quarterly Vol.

HISTORICAL TRANSACTION VOLUMES ($MIL)

$4,000

Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$1,473.31

$269.16

6.63%

$1,159.74

$229.61

6.36%

$1,059.17

$161.98

6.49%

$958.68

$297.93

6.57%

$874.83

$185.32

6.53%

$752.28

$107.05

6.83%

$763.63

$173.32

6.79%

$559.07

$93.38

7.19%

$447.71

$73.95

7.24%

$1,000

$355.45

$14.80

7.71%

$348.38

$166.25

7.70%

$500

$371.71

$116.71

7.55%

$438.50

$140.74

7.61%

$527.82

$104.12

7.44%

$532.57

$171.00

7.50%

$674.15

$258.28

7.43%

$706.09

$172.69

7.68%

$924.39

$322.42

7.51%

$1,160.39

$407.00

7.32%

$1,142.90

$240.79

7.21%

$1,227.86

$257.65

6.61%

$1,206.34

$300.90

6.57%

$1,105.31

$305.97

6.66%

$1,302.38

$437.86

6.74%

$1,186.42

$141.68

6.94%

$1,252.59

$367.08

7.03%

$1,197.09

$250.47

7.01%

$1,310.59

$551.37

6.80%

$1,594.28

$425.36

6.89%

$1,599.86

$372.66

6.86%

$1,796.90

$447.51

6.96%

$1,706.62

$461.08

6.90%

$1,879.42

$598.16

6.82%

$2,026.27

$519.52

6.85%

$2,060.53

$481.77

6.62%

$3,000 $2,500 Volume ($MM)

HISTORICAL MARKET TRENDS

$3,500

2008

$2,000 $1,500

2009

2010 $0

Q1 '06

Q1 '07

Q1 '08

Q1 '09

Q1 '10

2015

Q1 '11

Q1 '12

2014

Q1 '13

Q1 '14

2013

Q1 '15 2011

2012

$1,800 2012

$1,400 $1,200 Volume ($MM)

REAL-TIME SNAPSHOT

$1,600

2013

$1,000 $800 $600

2014

$400 $200 $0

2015 J

F

M

A

M

J

J

A

S

O

N

D

MARKET PLAYERS Top Buyers Rank Buyer

Location

TAM Acq # Props Global Acq # Props

1

Carroll Organization

Atlanta, GA

$229.50

4

$2,213.58

60

2

Centennial Holding Co

Atlanta, GA

$142.72

4

$1,855.71

59

3

B&M Management

Montgomery, AL

$137.23

3

$1,365.61

50

4

Investors Management

Sherman Oaks, CA

$134.91

3

$2,267.21

78

5

Berkshire Property Advisors

Boston, MA

$131.87

2

$4,431.90

123

6

Cortland Partners

Atlanta, GA

$126.37

2

$2,323.13

84

7

Goldman Sachs

New York, NY

$122.50

1

$51,897.10

2,122

8

Blue Rock Partners

Tampa, FL

$121.23

6

$747.41

43

9

UBS

Zurich, Switzerland

$111.43

1

$26,864.64

523

10

Crescent Heights

Miami, FL

$98.00

1

$5,227.22

74

Top Sellers Rank Buyer

Is the Tampa multi-housing market getting overheated? While the market’s development boom has many investors worried, liquidity in Tampa’s apartment market continues to grow, with trailing twelve months volumes as of September 2015 surpassing the $2 billion mark. Large volumes of new supply have been absorbed without provoking high vacancy or softening rents. Private investors made up 84% of all acquisitions during the first nine months of 2015. Institutions and listed REITs were net sellers in this time period. Expect ongoing in-migration among retirees to sustain strong demand levels in the multi-housing sector as many Boomers decide to downsize.

MARKET PERFORMANCE ($MIL) Location

TAM Acq # Props Global Acq # Props

1

Crescent Communities

Charlotte, NC

$169.73

2

$3,053.48

119

2

Camden Property Trust

Houston, TX

$155.97

4

$3,150.42

129

3

Praedium Group

New York, NY

$145.90

4

$6,554.34

491

4

JP Morgan

New York, NY

$122.50

1

$30,396.12

706

5

Related Companies

New York, NY

$106.39

2

$7,251.68

136

6

ST Residential

Chicago, IL

$98.00

1

$1,025.84

16

7

General Services Administration

$98.00

1

$3,984.77

105

8

Covenant Capital Group

Nashville, TN

$96.35

2

$714.85

33

9

DRA Advisors

New York, NY

$88.46

3

$17,082.61

711

10

Cornerstone RE Advisers

Hartford, CT

$85.54

2

$8,753.37

201

Sources: Real Capital Analytics, HFF Research

Volume

actual

chg vs prior

T12 Vol.

$2,060.53

15%

Q3 '15

$481.77

-7%

# Trades

T12 Vol.

Units

Q3 '15

5,309

4%

$/unit

T12 Vol.

$94,242.46

7%

Q3 '15

$90,745.16

Avg. Cap

T12 Vol.

6.62%

-35

Q3 '15

6.31%

-77

106

23%

Q3 '15

25

-17%

T12 Vol.

21,711

1%

-3%

HFF | 53

WASHINGTON, D.C.

Occupancy

Forecast

Long-Term Average

96.5% 96.0%

OCCUPANCY

95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 2009

2010

2011

2012

2013

2014

2017

2018

2017

2018

Forecast

Effective Rental Rates

$2,000

2015 2016

$1,800

However, the D.C. metro appears to have turned a corner and is forecast to have finished 2015 with a positive annual effective rent growth rate (1.6%).

Rent/Unit/Mo.

Washington, D.C. was one of the first markets to recover after the recession, but large amounts of new apartment supply combined with low job growth resulted in negative rent growth in 2013 and 2014.

$1,600

RENTAL RATES

Overview

Rental Rates After struggling with negative rent growth for two years, Washington D.C.’s apartment market is forecast to have ended 2015 with an annual effective rent growth rate of 1.6%. The market achieved a year-over-year growth rate of 1.8% in the third quarter. Washington, D.C.’s long-term average effective rent growth is 3.3%, but the market has averaged -0.2% over the past two years. In the three-year outlook, the metro is expected to average 3.7% annual effective rent growth, as positive job growth will result in improved apartment performance.

HFF | 54

2010

2011

2012

2013

2014

Forecast

Effective Rent Growth

2015

2016

Long-Term Average

5%

YoY Change (%)

ANNUAL RENTAL RATE GROWTH

2009

6%

4% 3% 2% 1% 0% -1% -2%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Completions Net Absorption Completion Forecast Net Absorption Forecast

Units

Absorption outpaced new supply by almost 500 units in the third quarter, as 3,327 units were absorbed. This trend is expected to continue with total 2015 absorption forecast at 17,105 units, 2,627 more than the number of units coming to market. Absorption has averaged 5,928 units per year since 1997 and is forecast to average 7,503 units absorbed annually during the three-year outlook period.

COMPLETIONS & NET ABSORPTION

Given the perceived imbalance of supply and demand the last few years, apartments have remained fairly full. The market’s average occupancy was 95.6% in the third quarter of 2015, and the rate was expected to be 95.3% at year-end 2015. Washington, D.C. is in a different part of its “cycle” compared to most other markets, and should actually see improving occupancy rates during the forecast period. In the three-year outlook, occupancy is expected to average 95.7%.

$600

$0

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 -2,000 -4,000

2009

2010

2011

2012

2013

2014

2015 2016 2017 2018

Job Gain (000) Population Gain (000) Job Gain Forecast Population Forecast

YoY Change (%)

Occupancy and Absorption

$800

$200

EMPLOYMENT & POPULATION TOTALS

Washington, D.C. received 2,858 new apartment units in the third quarter of 2015 with 14,478 units expected for the full year. The annual 2015 delivery total is almost 2.5 times the long-term average of 5,850 new units per year. Deliveries are expected to average 7,301 units annually during the 2016-2018 outlook.

$1,000

$400

Job growth also is picking up and is expected to have reached 1.8% in 2015. Though that figure is 30 basis points below the forecast national average of 2.1%, D.C. job growth is expected to outperform the national average in the three-year outlook, averaging 1.9% compared to the nation’s 1.7%. Development

$1,400 $1,200

160 140 120 100 80 60 40 20 0 -20 -40 -60

2009

2010

2011

2012

2013

2014

2015 2016 2017 2018

Source: Axiometrics

HISTORICAL TRANSACTION VOLUMES ($MIL) Year

T12 Vol.

Qtr. Vol.

Avg. Cap

2007

$3,862.22

$945.91

5.80%

$3,917.33

$718.52

5.81%

$4,702.40

$1,473.95

5.70%

$9,693.22

$6,554.83

5.75%

$9,346.70

$599.39

5.57%

$9,258.67

$630.50

5.52%

$8,604.77

$820.05

5.77%

$2,136.81

$86.88

5.60%

$1,542.82

$5.40

6.13%

$1,100.02

$187.69

6.66%

$425.79

$145.82

7.35%

$1,168.60

$829.68

7.22%

$2,124.81

$961.61

6.68%

$2,287.28

$350.16

6.69%

$3,340.23

$1,198.77

6.32%

$3,440.18

$929.63

6.12%

$3,438.60

$960.03

6.27%

$4,242.00

$1,153.57

6.12%

$4,386.04

$1,342.82

5.95%

$5,048.17

$1,591.75

5.93%

$4,581.30

$493.16

5.83%

$4,723.41

$1,295.68

5.87%

$6,399.53

$3,018.93

5.91%

$5,858.88

$1,051.11

6.00%

$11,782.78

$6,417.05

5.86%

$11,429.03

$941.93

6.05%

$9,126.50

$716.41

6.00%

$8,777.19

$701.79

5.98%

$3,376.39

$1,016.26

6.03%

$3,427.03

$992.57

5.83%

$3,721.31

$1,010.69

5.93%

$4,078.39

$1,058.87

5.86%

$4,381.48

$1,319.35

5.89%

$5,084.12

$1,695.21

5.93%

$5,326.38

$1,252.95

6.05%

2008

2009

2010

2011

2012

2013

2014

2015

MARKET PLAYERS Top Buyers Rank Buyer

Location

D.C. Acq # Props Global Acq # Props

1

Lone Star

Dallas, TX

$2,129.89

22

$28,971.26

1,566

2

UDR

Littleton, CO

$946.86

7

$8,911.51

198

3

TIAA-CREF

New York, NY

$662.15

4

$33,062.09

550

4

Brookfield AM

Toronto, Canada

$560.71

5

$53,757.11

1,142

5

Dweck Properties Ltd

Washington, D.C.

$447.26

4

$2,883.89

27

6

David Werner RE

New York, NY

$433.50

3

$10,461.60

122

7

Redbrick Partners

Washington, D.C.

$433.50

3

$458.60

8

CBRE Global Investors

Los Angeles, CA

$377.50

2

$31,293.03

1,055

9

Clarion Partners

New York, NY

$306.84

8

$27,415.19

1,080

10

Morgan Properties

King of Prussia, PA

$299.48

6

$4,341.74

206

Top Sellers Rank Buyer

6

Washington, D.C. continues to benefit from diversified investor interest, albeit at lower liquidity levels than in years past. Institutions comprised 41% of all acquisitions during the first three quarters of 2015. Listed REITs were net sellers in this time period. Foreign capital is flooding this area: firms combined invested nearly $930 million across ten properties during that time. As the health of the local economy continues to improve, there is great potential for the release of pent-up household formation. Washington, D.C. continued to experience record setting Class A absorption with almost double the region’s 10-year average units absorbed during the past 12 months ending September 2015.

MARKET PERFORMANCE ($MIL) Location

D.C. Acq # Props Global Acq # Props

1

Home Properties

Rochester, NY

$3,220.24

30

$10,666.45

238

2

JBG Cos

Bethesda, MD

$958.70

9

$6,030.18

92

3

Associated Estates

Cleveland, OH

$620.71

6

$3,619.71

117

4

Brookfield AM

Toronto, Canada

$505.25

4

$24,589.46

454

5

Berkshire Property Advisors

Boston, MA

$451.40

6

$2,392.97

78

6

Ross Dev & Investment

Bethesda, MD

$367.50

8

$1,016.80

29

7

Federal Capital

Bethesda, MD

$322.35

6

$1,920.97

34

8

Bainbridge Companies

Wellington, FL

$312.10

3

$1,586.47

27

9

Rockwood Capital

White Plains, NY

$301.50

7

$7,585.97

113

10

StonebridgeCarras

Bethesda, MD

$289.00

2

$638.50

5

Sources: Real Capital Analytics, HFF Research

actual Volume # Trades Units $/unit Avg. Cap

chg vs prior

T12 Vol.

$5,326.38

43%

Q3 '15

$1,252.95

-26%

T12 Vol.

111

6%

Q3 '15

24

-33%

T12 Vol.

25,722

14%

Q3 '15

5,654

-39%

T12 Vol.

$198,355.00

20%

Q3 '15

$176,937.97

-2%

T12 Vol.

6.05%

12

Q3 '15

6.74%

59

HFF | 55

AUSTIN (512) 532-1900 BOSTON (617) 338-0990 CAROLINAS (704) 526-2800 CHICAGO (312) 528-3650 DALLAS (214) 265-0880 DENVER (303) 515-8000 FLORHAM PARK (973) 549-2000

CURRENT ASSIGNMENTS

ATLANTA (404) 832-8460

HOUSTON (713) 852-3500

333-335 CARROLL STREET

4TH & L STREET

PALM BREEZE AT KEYS GATE TOWNHOMES

30 Units Class A Multi-housing Brooklyn, NY On The Market

133 Units Class A Mid-rise Multi-housing Washington, D.C. On The Market

402 Units Class A Multi-housing Homestead, FL On The Market

PARKSIDE AT WINDHAVEN

ELAN UNION STATION

CLUB AT FOSSIL CREEK

312 Units Class A Multi-housing Lewisville, TX On The Market

314 Units Luxury Class A Mid-rise Denver, CO On The Market

424 Units Class A-/B+ Multi-housing Fort Worth, TX On The Market

EAVES CARLSBAD

THE SLADE

GREYSTAR MULTI-HOUSING PORTFOLIO

Property Sale 450 Units Multi-Housing Carlsbad, CA Closed: September 2015

$40,000,000 Property Sale 214-unit, Class A Multi-housing Tampa, FL Closed: November 2015

$2,000,000,000 Portfolio Sale 32 Properties - 10,399 Units Multi-market Closed: December 2015

PEAK 4420

METROPOLITAN AT LORTON STATION

COUCH 9

Floating-Rate Financing 209-unit Multi-Housing Colorado Springs, CO Closed: November 2015

$65,200,000 Property Sale 251-unit Class A Mid-rise Multi-housing Lorton, VA Closed: November 2015

Construction Loan 136-unit Class A High-rise Multi-housing Portland, OR Closed: December 2015

LOS ANGELES (310) 407-2100 MIAMI (305) 448-1333 NEW YORK CITY (212) 245-2425 ORANGE COUNTY (949) 253-8800 ORLANDO (407) 745-3900 PHILADELPHIA (484) 532-4200 PITTSBURGH (412) 281-8714 PORTLAND (503) 224-0444 SAN DIEGO (858) 552-7690

RECENTLY CLOSED TRANSACTIONS

INDIANAPOLIS (317) 630-3191

SAN FRANCISCO (415) 276-6300 TAMPA (813) 387-9900 WASHINGTON, D.C. (202) 533-2500

hfflp.com

Visit hfflp.com to view the HFF Multi-housing Flyer and the most current Multi-housing Financing Update. Market data cited in this publication was derived from sources including Axiometrics, the U.S. Department of Housing and Urban Development, the U.S. Census Bureau, Real Capital Analytics, Prequin, and HFF Research. Photo credits for Heliphoto.net for Park La Brea and balloggphoto.com for Gateway West Loop. ©2016 Holliday Fenoglio Fowler, L.P. (“HFF”) and HFF Securities L.P. (“HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. Holliday Fenoglio Fowler, L.P. is acting by and through Holliday GP Corp., a real estate broker licensed with the California Department of Real Estate, License Number 01385740.