A MARKET FEASIBILITY STUDY OF. TOWN PARKE APARTMENTS - PHASE I SR 434 East of Tuskawilla Road Winter Springs, Seminole County, Florida, 32708

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1 A MARKET FEASIBILITY STUDY OF TOWN PARKE APARTMENTS - PHASE I SR 434 East of Tuskawilla Road Winter Springs, Seminole County, Florida, Inspection Date: March 26, 2010 Effective Date: September 14, 2010 Report Date: September 22, 2010 Prepared For Mr. Mark Fredericks AmeriNational Community Services, Inc West Cypress Street, Suite 103 Tampa, FL As an Agent of the Florida Housing Finance Corporation Assignment Code: ACS602V 046 Prepared By Novogradac & Company LLP 4520 East-West Highway, Suite 615 Bethesda, MD

2 San Francisco, CA Dover, OH Bethesda, MD Alpharetta, GA Boston, MA Austin, TX Long Beach, CA Cleveland, OH Kansas City, MO Portland, OR Columbus, OH New York, NY September 22, 2010 Mr. Mark Fredericks AmeriNational Community Services, Inc West Cypress Street, Suite 103 Tampa, FL As an agent of the Florida Housing Finance Corporation Re: Market Study for Town Parke Apartments Phase I, located in Winter Springs, Seminole County, Florida Dear Mr. Fredericks: At your request, Novogradac & Company LLP ( Novoco ) has performed a study of the multifamily rental market in the Winter Springs, Florida area relative to the above-referenced Low-Income Housing Tax Credit (LIHTC) project. We previously performed a market study for the Subject in January 2010 for Atlantic Housing and a market study and appraisal of the Subject in April 2010 for AmeriNational Community Services, Inc. The unit count, unit mix and targeted demographics have changed since our last reports. Previously, the Subject was proposed as a 94-unit family development. The unit mix and targeted tenancy changed due to an agreement with the local municipality. The purpose of this market study is to assess the viability of the age-restricted (55+) 108-unit LIHTC Town Parke Apartments Phase I project. It is a newly constructed affordable LIHTC project restricted to households earning 33 to 60 percent of the Area Median Income (AMI) or less in addition to unrestricted market rate units. At least 80 percent of the units will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. There is a restrictive covenant in place for the Subject s units, which is dictated by the Housing for Older Persons Act of The following report provides support for the findings of the study and outlines the sources of information and the methodologies used to arrive at these conclusions. The scope of this report meets the requirements of AmeriNational Community Services, including the following: Inspecting the site of the proposed Subject, and its general location. Analyzing the appropriateness of the proposed unit mix, rent levels, unit and complex amenities, and site. Estimating the market rents, absorption rates and stabilized occupancy levels for the market area EAST WEST HIGHWAY, BETHESDA, MARYLAND TEL (240) FAX (240)

3 Town Parke Apartments Winter Springs, FL Market Study Page 2 Investigating the general economic health and conditions of the multifamily rental market. Calculating income bands, given the proposed Subject rents. Estimating the number of income-eligible households. Reviewing relevant public records and contacting appropriate public agencies. Analyzing the economic and social conditions in the market area, in relation to the proposed project. Establishing the Subject s Primary and Secondary Market Area(s), if applicable. Surveying competing projects, both LIHTC and market-rate. This report contains, to the fullest extent possible and practical, explanations of the data, reasoning, and analyses that were used to develop the opinions contained herein. The depth of discussion contained in the report is specific to the needs of the client. The National Council of Affordable Housing Market Analysts (NCAHMA) is a professional organization chartered to promote the development of high quality market analysis for the affordable housing industry. Novogradac is a charter member of this organization. NCAHMA has compiled model content standards for market studies. This report generally conforms to those standards. Any slight modifications or departures from those standards are considered incidental and result from client specific needs. Please do not hesitate to contact us if there are any questions regarding the report or if Novogradac & Company LLP can be of further assistance. It has been our pleasure to assist you with this project. Respectfully submitted, H. Blair Kincer, MAI Partner David Boisture Manager Abby M. Cohen Real Estate Analyst 4520 EAST WEST HIGHWAY, BETHESDA, MARYLAND TEL (240) FAX (240)

4 Table of Contents EXECUTIVE SUMMARY... 1 CONCLUSIONS AND RECOMMENDATIONS... 5 FACTUAL DESCRIPTION Description of the Site Description of the Improvements REGIONAL AND LOCAL AREA ANALYSIS Regional and Local Area Summary Regional Map Economic Analysis Neighborhood Description and Analysis DEMOGRAPHIC ANALYSIS Primary Market Area Map Primary Market Area (PMA) SUPPLY ANALYSIS Housing Summary Interviews/Discussion Comparable Rental Property Map Market Characteristics DEMAND ANALYSIS Income-eligible Calculations Demand Analysis One - Capture Rate Analysis by Unit Type Demand Analysis Two Annual Capture Rate Analysis ADDENDUM A ADDENDUM B ADDENDUM C ADDENDUM D... 91

5 EXECUTIVE SUMMARY

6 Town Parke Apartments Phase I Winter Springs, Florida Market Study EXECUTIVE SUMMARY Subject Property Description and Improvements: The Subject will consist of 108 one, two and three-bedroom units in four, four-story elevator-serviced residential buildings. Of the 108 total units, 11 of the units will be unrestricted market rate units and 97 units will be available to households earning 33 to 60 percent of the AMI or less. At least 80 percent of the units will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. There is a restrictive covenant in place for the Subject s units, which is dictated by the Housing for Older Persons Act of Previously, the Subject was proposed as a 94-unit family development. The unit mix and targeted tenancy changed due to an agreement with the local municipality. The Subject buildings will be wood frame construction with HardiePlank exterior. Construction is expected to commence in October 2010 and be completed by September Subject site Subject site Developer: Atlantic Housing Partners, LLLP Property Address: The Subject site is located on the southeast side of SR 434 approximately 1,500 feet east of the intersection of SR 434 and Tuskawilla Road, in Winter Springs, Seminole County, Florida. Location and Surrounding Uses: The Subject site is located on the southwest side of SR434 approximately 1,500 east of the intersection of SR 434 and Tuskawilla Road. The Subject is bordered by SR 434 to the Novogradac & Company LLP 2

7 Town Parke Apartments Phase I Winter Springs, Florida Market Study north. Vacant land surrounds the Subject to the south, east, and west. Commercial uses are located at the intersection of SR 434 and Tuskawilla Road. The Subject is located less than one mile east of the Winter Springs Town Center mixed-use development. The development consists of 147,778 square feet of retail space, with suites ranging in size from 1,295 to 6,495 square feet. Existing tenants include a Publix anchor, several restaurants, personal services tenants and business tenants. Transwestern recently took over management of the development after the prior owners defaulted on their loan and the development was sold in March in a foreclosure sale. We spoke with Patrick Arnold, a broker with Transwestern responsible for leasing. As of September 2010, the development is maintaining a retail occupancy of 80 percent. Mr. Arnold indicated that asking rents have decreased from the upper-thirties per square foot NNN to the current asking rent of the mid-teens to uppertwenties per square foot. Proposed Rents: The following table details proposed rents for the Subject s units. Number of Units PROPOSED RENTS Asking Rent Utility Allowance (1) Gross Rent LIHTC Maximum Allowable Gross Rent HUD Fair Market Rents Unit Type 33% AMI 1Br/1Ba 1 $260 $115 $375 $379 $921 2Br/2Ba 9 $312 $138 $450 $455 $1,052 3Br/2Ba 1 $342 $179 $521 $526 $1,317 60% AMI 1Br/1Ba 7 $568 $115 $683 $690 $921 2Br/2Ba 75 $681 $138 $819 $828 $1,052 3Br/2Ba 4 $768 $179 $947 $957 $1,317 Market 2Br/2Ba 10 $819 N/A N/A N/A $1,052 3Br/2Ba 1 $947 N/A N/A N/A $1,317 Total 108 Notes (1) Source of Utility Allowance provided by the Developer. The table presented above illustrates the targeted rent levels for the Subject s units. There are 11 units restricted at 33 percent AMI and 86 units restricted at 60 percent of AMI. All proposed rents are set slightly below the Florida Housing Finance Corporation maximum allowable rent levels. In addition, there will be 11 unrestricted market rate units. Novogradac & Company LLP 3

8 Town Parke Apartments Phase I Winter Springs, Florida Market Study Inspection Date: The Subject site was inspected on March 26, All of the comparable and market data was updated on September 14, This shall be the effective date of this report. Novogradac & Company LLP 4

9 CONCLUSIONS AND RECOMMENDATIONS

10 Town Parke Apartments Phase I Winter Springs, Florida Market Study CONCLUSIONS In general, we believe there is moderate demand in the marketplace for the Subject. There is no precedent in the market for an age-restricted development with such a large concentration of twobedroom units and three-bedroom units, such as the Subject with 87 percent two-bedroom units. In addition, the mixed tenancy, with 80 percent restricted to seniors and 20 percent without agerestrictions, is unique in the market as well. Local market participants have indicated that the majority of demand for age-restricted LIHTC units is for one-bedroom units. We are concerned that there may not be sufficient demand for the Subject s two-bedroom units. A competitive advantage generated by lowering rents below competitive units is necessary for the Subject to reach stabilization. We recommend lowering the two-bedroom rents at 60 percent of the AMI from $681 to $635. The Subject offers a total of six, three-bedroom units. We believe the proposed rents for the six, three-bedroom units are reasonable for the 20 percent of units that are not age-restricted. We recommend no additional major changes to the development scheme. The availability of LIHTC data in the PMA is considered limited and the availability of market rate data is considered average. There are no age-restricted LIHTC properties in the PMA and agerestricted data is considered limited. The Subject will be unique in the market as an age-restricted LIHTC property. Due to the lack of age-restricted LIHTC data, we have included one age-restricted property, Covenant on the Lakes, located 22.2 miles south of the Subject in Orlando. Covenant on the Lakes was constructed in 2006 and offers LIHTC units at 30 percent and 60 percent of the AMI restricted to seniors. There are only two LIHTC properties in the PMA and many of the market rate properties are in significantly inferior condition or the management would not participate. We have included both LIHTC properties that are located in the PMA as comparable properties. We have included three additional LIHTC family properties located just east of the PMA in Oviedo. Given the overall similarities between the Subject and Oviedo Town Centre, we believe it was necessary to include it as a comparable even though it is outside the PMA. Two market rate properties, Newport Colony and Oviedo Grove Apartments, are also located outside the PMA. Newport Colony is located less than 0.1 miles outside of the PMA and Oviedo Grove Apartments is located approximately two miles outside the PMA. Overall, the rental data gathered from the market is considered sufficient to support the conclusions. A table detailing our comparable properties and their distance relative to the Subject is included below. COMPARABLE PROPERTIES # Property Name City Type Distance 1 Castlewood 7.0 miles 2 Covenant On The miles 3 Loma Vista Apartments 7.8 miles 4 Mystic Cove Apartments 8.0 miles 5 North Springs Estates Altamonte 8.8 miles 6 Oviedo Town 4.8 miles 7 Chatham Pines Apartments Winter Springs Market 5.8 miles 8 Legends Winter Springs Winter Springs Market 1.6 miles 9 Newport Colony Casselberry Market 9.3 miles 10 Oviedo Grove Apartments Oviedo Market 7.8 miles 11 Tuskawilla Town Center Winter Springs Market 1.8 miles *Denotes LIHTC Senior Property Novogradac & Company LLP 6

11 Town Parke Apartments Phase I Winter Springs, Florida Market Study Based upon our market research, demographic calculations and analysis, we believe there is moderate demand in the marketplace for the Subject. There is no precedent in the market for an age-restricted development with such a large concentration of two-bedroom units, such as the Subject with 87 percent two-bedroom units. Local market participants have indicated that the majority of demand for age-restricted LIHTC units is for one-bedroom units. We recommend lowering the two-bedroom rents from $681 to $635. We recommend no additional major changes to the development scheme. The Subject s one-bedroom units are acceptable at market based rental rates. We believe the proposed rents for the six, threebedroom units are reasonable for the 20 percent of units that are not age-restricted. The threebedroom units may also be appropriate for senior households moving from a large house, which need the space of a three-bedroom unit. Primary strengths of the Subject will be age/condition and that it will be a mixed income property. The Subject s one, two and three-bedroom unit sizes will be smaller than the surveyed average. However, the Subject s unit sizes are competitive with the one agerestricted comparables unit sizes which are smaller than the proposed unit sizes. Overall, as an age-restricted property, the Subject should be competitive in terms of unit sizes. As an age-restricted development, we recommend the addition of pull cords and hand rails to the in-unit amenities package, if feasible. We recommend the addition of social and recreational programs, transportation and medical services through third-party service providers targeted to seniors, if feasible. We believe a weakness of the Subject development is the high concentration of two-bedroom units for an age-restricted development. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. Due to the lack of precedent in the market for an age-restricted development with such a large concentration of twobedroom units, we recommend lowering the two-bedroom rents at 60 percent of the AMI. The Subject will offer 10 percent of its units at 33 percent AMI and market, which increases demand and decreases potential impact on existing properties. Based on our analysis, there is demand for the Subject at our concluded rents, and we also believe the concluded rents offer significant value in the market. The proposed Subject would satisfy the need for affordable housing, both senior and family, in Seminole County. Two comparables reported absorption information. Absorption information was not available for Covenant on the Lakes, the one age-restricted LIHTC comparable. Oviedo Town Centre opened in March 2008 and was stabilized by December 2008, for an absorption rate of 26 units per month. The manager of Oviedo Town Centre indicated demand has been strong for affordable housing in the area. The manager of Castlewood, a LIHTC property, indicated that demand has decreased over the last year due to declining economic conditions. Tuskawilla Town Center opened in February 2009 and the property reached stabilized occupancy in September 2010, which equates to an absorption rate of two units per month. We believe the asking rents at this property are overstated. Based on the current economic conditions, we anticipate the absorption rate for the Subject would be lower than Oviedo Novogradac & Company LLP 7

12 Town Parke Apartments Phase I Winter Springs, Florida Market Study Town Centre. Thus, we believe an absorption rate of nine to ten units per month, or a pace of 10 to 12 months at the aforementioned lower rents. The following table illustrates the Subject s proposed 33 percent rents compared to the 33 percent rents at the comparable properties. LIHTC Rent Comparison Property Name 1BR 2BR 3BR Town Parke Apartments (Subject) $260 $312 $342 LIHTC Maximum (Net) $264 $317 $347 Oviedo Town Centre $272 $328 $366 Average (excluding Subject) $272 $328 $366 Oviedo Town Centre is the only comparable that offers 33 percent AMI units and their rents appear higher than the maximum allowable level which is likely due to a differing utility allowance. The 33 percent AMI rents at Oviedo Town Centre are set at the maximum allowable level and are 100 percent occupied with 30 households on the waiting list. Based on the performance of Oviedo Town Centre, we believe the 33 percent AMI rents are achievable. The proposed rents at 33 percent of the AMI will be the lowest in the immediate market. The following table illustrates the Novoco estimated rents and the Subject s proposed 60 percent rents compared to the 60 percent rents at the comparable properties. LIHTC Rent Comparison Property Name 1BR 2BR 3BR Town Parke Apartments (Subject) Proposed $568 $681 $768 Town Parke Apartments (Subject) NOVOCO RECOMMENDED $568 $635 $768 LIHTC Maximum (Net) $575 $690 $778 Oviedo Town Centre $583 $701 $797 Loma Vista Apartments $582 $691 $792 Mystic Cove Apartments $585 $693 $790 Castlewood $591 $705 $802 North Springs Estates N/A N/A $707 Covenant On The Lakes* $579 $691 N/A Average (excluding Subject) $584 $696 $778 *Denotes LIHTC Senior Property The Subject s proposed 60 percent rents are set slightly below the maximum allowable level. The rents at Oviedo Town Centre and Castlewood appear to be above than the maximum allowable level, respectively. However, both reported to be at the maximum allowable level. This difference is likely due to differing utility allowances. At least 80 percent of the Subject s units will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. The proposed Subject will be most similar to Covenant on the Lakes and Oviedo Town Centre. The proposed Subject lacks pull cords and hand rails, which are offered at Covenant on the Lakes. The proposed Subject will have a high concentration of two-bedroom units. Novogradac & Company LLP 8

13 Town Parke Apartments Phase I Winter Springs, Florida Market Study Covenant on the Lakes reported the majority of vacant units are two-bedroom units. According to demographic information, the majority of senior renters consist of one person households. Management at the comparable family LIHTC properties suggested that there was a need for senior affordable housing in the Winter Springs area, primarily for one-bedroom units. It is evident that where seniors have the options of two-bedroom units they still choose the onebedroom units. We believe that this is showing the preference for one-bedroom units and the pricing pressures. Based upon the market data, we believe the Subject s proposed 60 percent AMI one-bedroom rents are achievable based on the performance of Covenant on the Lakes and Oviedo Town Centre. However, due to the lack of demand for age-restricted twobedroom units in the market, we recommend lowering the two-bedroom rents at 60 percent of the AMI from $681 to $635. This recommended two-bedroom rent amount is $67 above the concluded one-bedroom 60 percent of the AMI rents. There is no precedent for the amount of the discount due to a lack of age-restricted properties with such a large concentration of two-bedroom units. The following table summarizes our concluded achievable age-restricted LIHTC rents at 60 percent of the AMI in comparison to the developer s proposed LIHTC rents at 60 percent of the AMI. DEVELOPER PROPOSED LIHTC RENTS COMPARED TO NOVOGRADAC RECOMMENDED LIHTC RENTS - 60% AMI Proposed 60% AMI Rents Recommended 60% AMI Rents $ Unit Type Differential 1Br/1Ba $568 $568 $0 0% 2Br/2Ba $681 $635 -$46-7% 3Br/2Ba $768 $768 $0 0% Percent Differential We placed the achievable two-bedroom rents at 60 percent of the AMI between the one and two-bedroom rents at Covenant on the Lakes, the one age-restricted comparable property, to entice both current one and two-bedroom renters into the Subject. Several family properties reported senior tenants in their one-bedroom units. The one-bedroom rents at Covenant on the Lakes are $579 and the two-bedroom rents are $691, following adjustments for utilities. The recommended two-bedroom rents of $635 are appropriately priced between the one and two-bedroom rents to reflect the benefit of the second bedroom. Since most senior households are on a fixed income, their discretionary spending is typically limited. Therefore, the price differential for the Subject s two-bedroom units cannot be too extreme. Therefore, we recommend lowering the two-bedroom 60 percent AMI rents to $635. There are two guarantee fund developments located within a five-mile radius of the Subject. The guarantee fund developments within a five mile radius of the Subject target family households and will not directly compete with the Subject s proposed 108 age-restricted units. Though both properties are located in the five mile radius, they are not within the PMA and are considered to be in a different market area than the Subject and should not be Novogradac & Company LLP 9

14 Town Parke Apartments Phase I Winter Springs, Florida Market Study negatively impacted by the construction of the Subject. Managers at both properties, which are located in Sanford, indicated that they do not compete with properties located in Winter Springs. Since February 2010, the occupancy rates at both Logan Heights and Wyndham Place have improved. The following table summarizes overall weighted occupancy levels at the properties in the Competitive Market Area. All of the properties below are family-oriented properties. CMA Occupancy - September 2010 Name Type # of Units Vacant Units Occupancy Castlewood LIHTC % North Springs Estates LIHTC % Oviedo Town Centre LIHTC % Loma Vista LIHTC % Mystic Cove LIHTC % Total 1, Average Physical Occupancy Rate (POR #1) 99% As illustrated, the Average Physical Occupancy Rate (POR #1) is 99 percent. The following table summarizes overall weighted occupancy levels at the surveyed properties. OVERALL VACANCY Property name Rent Structure Total Units Vacant Units Vacancy Rate % Covenant On % Loma Vista % Mystic Cove % North Springs % Oviedo % Chatham Pines Apartments Market % Legends Winter Springs Market % Newport Colony Market % Oviedo Grove Apartments Market % Tuskawilla Town Center Market % Total 2, % *Denotes LIHTC Senior Property The overall vacancy rate in the market is considered reasonable based on current economic conditions. Overall vacancy ranges from zero to 8.2 percent, averaging 2.1 percent. The overall vacancy in the market is considered strong compared to other areas of Florida that have been severely affected by the national recession. The average vacancy rate of LIHTC properties is 1.9 percent and the average vacancy rate of the market rate comparables is 2.4 percent. Novogradac & Company LLP 10

15 Town Parke Apartments Phase I Winter Springs, Florida Market Study Oviedo Town Centre, the most recently completed LIHTC property, has the lowest vacancy rate in the market and is the only property that offers 33 and 60 percent AMI units, which likely helps the property maintain a higher than average occupancy rate. The Subject will offer units at 33 and 60 percent AMI as well as market rate units. Covenant on the Lakes, an age-restricted LIHTC property, is maintaining the highest vacancy rate of 8.2 percent. A total of 94 units at the Subject, or 87 percent, are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. As an age-restricted mixed income property, we would anticipate the Subject would maintain a vacancy rate of seven percent or lower at the aforementioned lower rents. Based on the quality of the surveyed comparable properties and the anticipated quality of the proposed Subject, we conclude that the Subject s rental rates are below the achievable market rates for the Subject s area. The following table shows both market rent comparisons and achievable market rents. Subject Comparison to Market Rents Unit Type Subject Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 33% AMI $260 $696 $969 $806 $700 63% 2 33% AMI $312 $856 $1,514 $1,071 $819 62% 3 33% AMI $342 $1,106 $1,498 $1,227 $947 64% Unit Type Subject (Novoco Recommended) Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 1 60% AMI $568 $696 $969 $806 $700 19% 2 60% AMI $635 $856 $1,514 $1,071 $819 22% 3 60% AMI $768 $1,106 $1,498 $1,227 $947 19% Unit Type Subject Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 2 BR - Market Rate $819 $856 $1,514 $1,071 $819 0% 3 BR - Market Rate $947 $1,106 $1,498 $1,227 $947 0% The Subject s proposed market rents are lower than the rents at all of the market rate comparables and are achievable. We believe the proposed market rents are achievable despite the unique unit mix and tenancy. The Subject will be similar to the market rate comparables in terms of in-unit amenities and slightly inferior to similar in terms of common area amenities. The Subject will be in excellent condition upon completion and superior to the comparables in terms of age and condition. The Subject will be most comparable with Tuskawilla Town Center and Legends Winter Springs, which are located approximately 1.8 miles and 1.6 miles from the Subject, respectively. Management at Legends Winter Springs reported 10 to 15 percent of their tenants are seniors and management at Tuskawilla Town Center was unwilling to provide information regarding the senior tenancy at the property. Both properties have larger unit sizes than the Subject. Tuskawilla Town Center opened in February 2009 and just recently completed the initial absorption stage. Tuskawilla Town Center offers an elevator, similar to the proposed Subject. We believe the asking rents at Tuskawilla Town Center are overstated, as evidenced by the slow absorption of the property. We anticipate the three-bedroom units will be occupied by non-age-restricted tenants. We believe the Subject could achieve rental rates similar to Legends Winter Springs. The achievable market rents provide a rental advantage of 19 to 64 percent over the concluded 33 and 60 percent AMI units. Novogradac & Company LLP 11

16 Town Parke Apartments Phase I Winter Springs, Florida Market Study The areas within the three-mile radius and five-mile radius have demonstrated that they are areas of growth, along with the MSA. The population and the number of households are both expected to increase from 2010 to The MSA is projected to have the highest population growth, while the highest median income level is within a three-mile radius of the Subject. These factors indicate that there is growing demand in the greater Winter Springs area for family and senior affordable housing. The Subject s neighborhood appears to be an average location for a multifamily property. All desirable locational amenities are located within 5.5 miles of the Subject site. The Subject site lacks proximity to public transportation, which could negatively impact the property. The Subject will be a newly constructed development in a neighborhood that has a variety of residential and commercial uses. It will be a compatible use and will be considered an improvement to the existing neighborhood. The demand analysis illustrates demand for the Subject based on capture rates of incomeeligible renter households. When viewing total income-eligible renter households the calculation illustrates the following capture rates: CAPTURE RATES 33% AMI 60% AMI Market PMA 3.56% 14.40% 4.53% The capture rates for PMA indicate that there is moderate income-eligible demand for the Subject s units restricted at 33 and 60 percent of the AMI and unrestricted market rate units. The majority of property managers reported that demand is originating primarily from the local Winter Springs area. The capture rates are considered reasonable. On a by-bedroom basis, the capture rate for two-bedroom units at 60 percent of the AMI is high, at 28.8 percent, following adjustment for leakage. As discussed in the supply analysis, a total of 94 units, or 87 percent, are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development. The property manager at Covenant on the Lakes, the one agerestricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. To provide another level of analysis, we removed the households from the income-eligible renter demand pool that are currently suitably housed elsewhere in the PMA. We conducted an annual demand analysis, which is based on new income-eligible renter households moving into the area (in the Subject s first year of operation only) and those income-eligible renter households that are rent-overburdened (paying over 35 percent of income to living costs) less the number of vacant LIHTC units in the PMA. This annual capture rate is 24.5 percent in the PMA. The capture rates indicate an expected absorption period of less than one year. The annual demand analysis is reflective of the demand for all of the Subject s 108 units. The capture rates are reasonable and indicative of moderate demand in all areas of analysis. Novogradac & Company LLP 12

17 Town Parke Apartments Phase I Winter Springs, Florida Market Study The following is a summary of the main points from our conclusions: 1. The Subject s proposed mixed tenancy is unique. However, we do not believe that this will significantly harm the Subject, as only 20 percent of the units are available for family tenants. Most likely, less than 20 percent of the tenants will be family tenants. The Subject s proposed and the Novogradac recommended rents will create a significant rent advantage. 2. The Subject s unit mix is unique. We believe that this issue is significant. We believe that the units restricted at 33 percent of the AMI will be in high demand because of the low rents. We believe that the market rate units will also be in high demand because of the large rent differential between the Subject s proposed market rents and the local properties. The one-bedroom units restricted at 60 percent of the AMI are in demand based upon interviews with property managers at comparable properties and demographic data. We do not believe that the two and three-bedroom units restricted at 60 percent of the AMI will experience high demand. The proposed rents do not offer a competitive advantage. The large number of these units creates a market saturation. We believe lower rents are necessary for the property to achieve stabilization. Our recommended rent is based upon our read of the market. However, there is not direct comparable information to prove demand for this many twobedroom units. Therefore, our analysis is limited to the data that is available. This information is summarized below: A. Covenant on the Lakes is an age-restricted LIHTC property located 22.2 miles south of the Subject in Orlando. This property is considered generally comparable to the Subject. i. This property is experiencing sufficient one-bedroom demand. ii. The one-bedroom rents at this property support the Subject s proposed one-bedroom rents. iii. The majority of the reported vacancy is in two-bedroom units, which represent a minority of their units. This indicates that the two-bedroom rents are too high for the market. B. Oviedo Town Centre is a family-oriented LIHTC property located 4.8 miles from the proposed Subject. i. The one-bedroom rents restricted at 60 percent of the AMI are supportive of the Subject s proposed one-bedroom rents. ii. According to management at Oviedo Town Centre, seniors make up roughly 10 to 15 percent of the tenancy. The average age of senior tenants was estimated at 70 years. Management also estimated that 60 to 70 percent of the senior tenants were coming from previous homeownership. Management reported the majority of senior tenants occupy one-bedroom units. Novogradac & Company LLP 13

18 Town Parke Apartments Phase I Winter Springs, Florida Market Study C. Castlewood is a family-oriented LIHTC property located 7.0 miles from the proposed Subject. i. The one-bedroom rents restricted at 60 percent of the AMI are supportive of the Subject s proposed one-bedroom rents. ii. According to management at Castlewood, seniors comprise approximately 15 percent of the tenants. The average age for the senior tenants was estimated at 68. Furthermore, management suggested that an estimated 50 percent of the senior tenants were coming from previous home ownership, but many are not selling their homes due to a down market. It was suggested by management that seniors prefer the one-bedroom units, unless they are moving from a large house and need the space of a two-bedroom unit. D. Loma Vista is a family-oriented property located 7.8 miles from the proposed Subject. i. The one-bedroom rents restricted at 60 percent of the AMI are supportive of the Subject s proposed one-bedroom rents. ii. According to management at Loma Vista Apartments, senior tenancy is between 10 and 15 percent. The average age of seniors at the property was approximately 65 and many of the senior tenants have been at the property for many years. Management suggested that there is a need for more senior affordable housing that provides units on the first floor. Additionally, management suggested that shuttle services are in demand for the senior tenants at the property. E. Mystic Cove is a family-oriented LIHTC property located 8.0 miles from the proposed Subject. i. The one-bedroom rents restricted at 60 percent of the AMI are supportive of the Subject s proposed one-bedroom rents. ii. According to management at Mystic Cove Apartments, approximately 15 percent of the property s tenants are seniors. The average age of the senior tenants was estimated at 65 years. Management was not aware of any current tenants who had been previous homeowners and suggested that most of the senior tenants had been at the property for over five years, with the rest having come from other subsidized properties. Furthermore, management commented that senior tenants prefer first floor living and many do not drive. F. Findings from the demand analysis reveal that on a by-bedroom basis, the capture rate for two-bedroom units at 60 percent of the AMI is high, at 28.8 percent, following adjustment for leakage. With consideration to the Subject s Novogradac & Company LLP 14

19 Town Parke Apartments Phase I Winter Springs, Florida Market Study age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development and believe lower rents are needed for the property to achieve stabilization. G. In conclusion, we believe that the Subject s two-bedroom rents at 60 percent of the AMI need to be between the one and two-bedroom rents at Covenant on the Lakes. Novogradac & Company LLP 15

20 FACTUAL DESCRIPTION

21 Town Parke Apartments Phase I Winter Springs, Florida Market Study DESCRIPTION OF THE SITE The location of a multifamily property can have a substantial negative or positive impact upon the performance, safety, and appeal of the project. The site description will discuss the physical features of the site, as well as layout, access issues, and traffic flow. Size: Shape: According to the Seminole County Assessor s Office, is identified by a portion of the following Parcel IDs: AR-0A00-008D, E and H. According to the legal description and sketch prepared by Allen & Company Professional Surveyors & Mappers on August 26, 2010, the Subject site consists of 4.79 acres. The shape is irregular. Novogradac & Company LLP 17

22 Town Parke Apartments Phase I Winter Springs, Florida Market Study Frontage: The Subject site offers frontage on SR 434. Topography: Utilities: Visibility/Views: The site is currently unimproved, generally level and heavily wooded. All utilities are provided to the site. The views from the Subject will be considered average. To the north, south, east, and west views will be of vacant land. The Subject will have good visibility from SR 434. Access and Traffic Flow: Access to the Subject site will be via a paved driveway from SR 434, which is a four-lane divided thoroughfare. At the Subject site, there is no turn or crossover in the divider, so traffic headed northwest must pass the Subject site to the nearest turnaround to access the Subject. The Seminole Expressway Toll Road is located approximately two miles east of the Subject via SR 434. To the west, SR 434 connects with State Highways 17/92 (4.4 miles approximately) and Interstate 4 (8.2 miles approximately), both of which provide access to Orlando, which is approximately 15 miles to the south of the Subject. Overall, access is considered average, and traffic flow is average to good. Layout and Curb Appeal: As proposed, the Subject s four residential buildings will have parking spaces along the outer edge of the buildings which appears market oriented. As new construction, we expect the Subject to have excellent curb appeal. Environmental, Soil and Subsoil Conditions and Drainage: We were provided with both a Phase I Environmental Site Assessment (ESA) Report dated September 23, 2009 and a Phase II ESA Assessment Report completed by E Sciences. According to the Phase I ESA, E Sciences discovered evidence of recognized environmental conditions (REC) or significant environmental concerns in connection with the Subject site or adjacent properties as identified by ASTM Standard Practice E According to the report, based on conversations with Seminole County and Florida Department of Environmental Protection (FDEP) representatives, the adjacent west former Hi Flavor Meats has an Enforcement Action with the FDEP related to the removal of several unregistered USTs. Additionally, RECs were identified at the Mobil gasoline station adjacent to the Subject. The Phase II ESA was performed in order to determine if off-site and on-site identified RECs had adversely impacted the soil and groundwater beneath the Subject site. Soil tests detected arsenic Novogradac & Company LLP 18

23 Town Parke Apartments Phase I Winter Springs, Florida Market Study impacted soil beneath the site. Novogradac is not an expert in these fields and cannot opine as to the adequacy of the soil conditions, drainage, or existence of adverse environmental conditions. We recommend the developer follow all necessary recommendations from the Phase I and II ESA. Flood Plain: QCT/DDA: Detrimental Influences: Conclusion: Based on a review of Flood Insurance Rate Map Community Panel Number 12117C0160F, dated September 28, 2007, the Subject site is located in Zone X, an area outside the flood plain. Further analysis by Novogradac is beyond the scope of the report. The Subject is located in Census Tract , which is not a Qualified Census Tract for 2011 according to HUD list of Low- Income Housing Tax Credit Qualified Census Tract designations. The Subject is located in the Orlando-Kissimmee, FL MSA which is a Difficult Development Area. No detrimental influences were noted during our site inspection. No detrimental influences were identified for the Subject site. The Subject site is physically capable of supporting a variety of legally permissible uses and is considered a desirable building site. Novogradac & Company LLP 19

24 Town Parke Apartments Phase I Winter Springs, Florida Market Study Comp # Subject Effective Rent Date 9/14/2010 Town Parke Apartments Location SR 434 East Of Tuskawilla Winter Springs, FL Seminole County Distance n/a Units 108 Vacant Units N/A Vacancy Rate N/A Type Garden (4 stories) Year Built / Renovated 2011 / n/a Marketing Began n/a Leasing Began n/a Last Unit Leased n/a Market Leasing Pace n/a Annual Turnover Rate N/A Change in Rent n/a (Past Year) Units/Month Absorbed n/a Concession Section 8 Tenants N/A Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water not included Water Heat not included -- electric Sewer not included Heat not included -- electric Trash Collection included Unit Mix (face rent) Beds Baths Type Units Size Rent Concession Restriction Waiting Vacant Vacancy Max (SF) (monthly) List Rate rent? 1 1 Garden (4 stories) $260 n/a N/A N/A no 1 1 Garden (4 stories) $568 n/a N/A N/A no 2 2 Garden (4 stories) $312 n/a N/A N/A no 2 2 Garden (4 stories) $681 n/a N/A N/A no 2 2 Garden (4 stories) $819 $0 Market n/a N/A N/A N/A 3 2 Garden (4 stories) 1 1,206 $342 n/a N/A N/A no 3 2 Garden (4 stories) 4 1,206 $768 n/a N/A N/A no 3 2 Garden (4 stories) 1 1,206 $947 $0 Market n/a N/A N/A N/A Range In-Unit Balcony/Patio Blinds Cable/Satellite/Internet Carpeting Central A/C Coat Closet Dishwasher Ceiling Fan Garbage Disposal Oven Refrigerator Walk-In Closet Washer/Dryer hookup Amenities Security none Property Car Wash Clubhouse/Meeting Room/Community Room Elevators Exercise Facility Non-shelter Services Off-Street Parking On-Site Management Recreation Areas Swimming Pool Premium none Services Detailed below Other Putting Green, Library Comments At least 80 percent of the units will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. There is a restrictive covenant in place for the Subject's unit which is dictated by the Housing for Older Persons Act of The property will offer welfare to work or sell-sufficiency type programs, homeownershop opportunity program, first time homebuyer seminars, job training, health and wellness classes, resident activities, and a resident assistance referral program. washers and dryers will be available for an additional $55 per month and cable television will be available for an additional $65 per month. A total of six of the 94 two-bedroom units will offer 890 square feet. Novogradac & Company LLP 20

25 Town Parke Apartments Phase I Winter Springs, Florida Market Study DESCRIPTION OF THE IMPROVEMENTS Property Improvements: The Subject will consist of 108 one, two, and three-bedroom units in four, four-story elevator-serviced buildings. Of the 108 total units, 11 of the units will be unrestricted market rate units and 97 units will be available to households earning 33 to 60 percent of the AMI or less. The Subject buildings will be wood frame construction with HardiePlank exterior. Subject site Subject site Date of Construction: Amenities: Subject site Subject site Construction is expected to commence in October 2010 and be completed by September In addition to the amenities presented in the property profile, washers and dryers will be available for an additional $55 per month and cable television will be available for an additional $65 per month. The development will be elevator-serviced due to the senior tenancy. Novogradac & Company LLP 21

26 Town Parke Apartments Phase I Winter Springs, Florida Market Study Resident Programs: Property Layout and Curb Appeal: Unit Layout: NLA: Resident programs will include welfare to work or selfsufficiency programs, homeownership program, first time homebuyer seminars, job training, health and wellness classes, resident activities, and a resident assistance referral program. We recommend the addition of social and recreational programs, transportation and medical services through thirdparty service providers targeted to seniors, if feasible. As proposed, the Subject s four residential buildings will have parking spaces along the outer edge of the buildings which appears market oriented. As new construction, we expect the Subject to have excellent curb appeal. We viewed the Subject s proposed floorplans, which will have a functional layout and appear market-oriented. The floorplans are included in the Addenda of this report. UNIT MIX AND SQUARE FOOTAGE Unit Type Number of Units Unit Size (SF) Gross Area 1BR/1BA ,448 2BR/2BA ,464 2BR/2BA ,340 3BR/2BA 6 1,206 7,236 Total ,488 Approximately 97,488 square feet. Unit Mix: As illustrated in the table above, a total of 94 units, or 87 percent, are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of twobedroom units may be too high as an age-restricted development. The property manager at Covenant on the Lake, the one age-restricted comparable property, reported that onebedroom units are in highest demand and the majority of vacant units are two-bedroom units. Parking: According to the site plan, a total of 174 parking spaces, or a parking ratio of 1.61 spaces per unit, will be provided on-site. A total of 31 additional parking spaces will be provided offsite, along Townhouse Road, according to the site plan. Based upon our review of the site plan, parking is considered adequate. Utility Structure: All of the units are individually metered for electricity. The Novogradac & Company LLP 22

27 Town Parke Apartments Phase I Winter Springs, Florida Market Study tenant will be responsible for paying electric expenses in addition to cold water and sewer costs. The landlord will pay for trash collection. The following table depicts the utility allowance calculations. UTILITY ALLOWANCES Utility Paid By One-bedroom Two-bedroom Three-bedroom Utilities-Electricity Tenant $26.00 $29.00 $34.00 Utilities-Air Conditioning Tenant $29.00 $36.00 $47.00 Utilities-Electric Heating Tenant $5.00 $5.00 $7.00 Utilities-Electric Cooking Tenant $9.00 $11.00 $12.00 Utilities-Electric Heated Hot Water Tenant $15.00 $22.00 $34.00 Utilities-Water and Sewer Services Tenant $29.00 $36.00 $52.00 Utilities-Trash Collection Landlord $19.00 $19.00 $19.00 Total Utility Allowance $ $ $ Total Tenant Paid Utilities $ $ $ Source: Seminole County Housing Authority, Effective January 20, The utility allowances provided by the housing authority slightly differ from the developer estimates of $115, $138 and $179 per unit for a one, two and three-bedroom unit. We have adjusted the comparables with differing utility structures using the housing authority s numbers. Americans With Disabilities Act of 1990: As new construction, we assume that the property will not violate the Americans with Disabilities Act of Quality of Construction Condition and Deferred Maintenance: As new construction, we assume that the Subject will be constructed in a professional and timely manner consistent with the information provided, using average-quality materials. Functional Utility: Conclusion: The Subject design and amenities appear to be market-oriented and functional. The Subject will consist of four, four-story elevator-serviced residential buildings. The Subject will offer an attractive design and amenities package. We recommend the addition of social and recreational programs, transportation and medical services through third-party service providers targeted to seniors, if feasible. Novogradac & Company LLP 23

28 REGIONAL AND LOCAL AREA ANALYSIS

29 Town Parke Apartments Phase I Winter Springs, Florida Market Study REGIONAL AND LOCAL AREA SUMMARY REGIONAL MAP Overview The Subject site is located in Winter Springs, Florida, which is part of the greater Orlando- Kissimmee, FL MSA. Many residents of Winter Springs commute into other parts of the metro area for job opportunities and the local economic environment in the Subject s area is directly related to the economic health of the MSA. Location and Proximity to Metropolitan Areas Winter Springs and Seminole County are located in central Florida. The following table illustrates distances to surrounding metropolitan areas. Novogradac & Company LLP 25

30 Town Parke Apartments Phase I Winter Springs, Florida Market Study PROXIMITY TO MAJOR CITIES Location Miles Orlando, FL 14 Tampa, FL 99 Jacksonville, FL 135 Atlanta, GA 456 Transportation Highway: Air: The Central Florida Greeneway or State Route 417 is the closest major thoroughfare to the Subject. Approximately 2.1 miles east of the Subject, this highway provides access to Interstate four to the north and the Florida Turnpike to the south. Orlando International Airport or MCO lies approximately 19 miles south of the Subject and provides daily flights on all major airlines. MCO is the largest and busiest airport in the state of Florida, serving approximately 36,000,000 passengers in Healthcare Orlando Regional South Seminole Hospital and Florida Hospital-Altamonte fall within the PMA. Orlando Regional South Seminole Hospital is a 206-bed hospital located in Longwood, Florida that primarily serves residents of Seminole County. This facility lies 7.2 miles west of the Subject on the northwestern border of the PMA. Florida Hospital-Altamonte is ranked as one of the top 50 hospitals in the nation and currently provides 341 certified beds to serve more than 160,000 patients each year. The facility lies 9.7 miles west of the Subject on the southwestern border of the PMA. Higher Education City College-Orlando falls within the PMA and lies 7.9 miles southwest of the Subject. This junior college offers programs in medical assistance, medical office administration, management, legal assistance, private investigation services, and emergency medical services. Novogradac & Company LLP 26

31 Town Parke Apartments Phase I Winter Springs, Florida Market Study ECONOMIC ANALYSIS The Orlando-Kissimmee, FL MSA economy is largely driven by tourism, an industry that is susceptible to declining demand during the current recession. With the presence of Walt Disney, Universal Studios, and the timeshare division headquarters for Marriott hotels, tourism accounts for just over 50 percent of the employment among the top ten employers. Orlando is best-known for being the home of Walt Disney World, including the Magic Kingdom, Epcot Center, Disney s Wild Animal Kingdom, and Disney MGM studios. Walt Disney World is located in Lake Buena Vista and Bay Lake, Florida, outside the city limits of Orlando. In addition to the four main theme parks, the resort contains two water parks, six golf courses, a sports complex, an auto race track, twenty resort hotels, and numerous shopping, dining, and entertainment offerings. The 47-square mile property is the largest theme park resort in the world. According to a March 2010 article in the Orlando Sentinel, the theme-park industry is projected to experience a modest rebound this year. Due to a combination of advertising, lower admission prices, and improved consumer outlook on the economy, industry revenues are project to rise 1.7 percent in An excess of 48 million people visited Orlando in 2008, which is reportedly the area s second highest annual visitor count on record. This increase is largely attributed to an 18.9 percent increase in international visitors. Conversely, the number domestic visitors who account for 93 percent of all travelers to Orlando decreased by 0.9 percent in In response to the recession-related decline in domestic visitors, the local tourism industry has increased marketing in countries such as Brazil and Canada and the airport has added flight service from Lufthansa (Germany), Aer Lingus (Ireland), and TAM (Brazil). The following table illustrates visitor counts in the Orlando area from 2001 to This is the most recent information available. ORLANDO VISITOR VOLUME Year Domestic International Total Percent Change ,701,000 3,062,000 40,763, ,590,000 2,378,000 42,968, % ,685,000 2,297,500 44,982, % ,166,000 2,582,000 47,748, % ,649,000 2,673,000 49,322, % ,114,000 2,686,000 47,800, % ,907,000 2,838,000 48,745, % ,515,000 3,373,000 48,888, % ,319,000 3,264,000 46,583, % Source: Orlando/Orange County Convention & Visitors Bureau, Inc., 09/2010. The area's economy includes other industries other than tourism, such as manufacturing, which is also an industry that has experienced layoffs due to the recession. Lockheed-Martin operates a large manufacturing facility in Orlando for aeronautical crafts and related high tech research due to city s proximity to the NASA Kennedy Space Center. Since the 1970's and 1980's, the area has also become home to many computer software and hardware firms, such as IBM. Another developing sector is the film, television, and electronic gaming industries, aided by the presence of Universal Studios, Disney-MGM Studios, Full Sail School, and other entertainment companies and schools. Numerous office complexes for large corporations are located along the Interstate-4 corridor north of Orlando, especially in Maitland, Lake Mary and Heathrow. The U.S. computer modeling, Novogradac & Company LLP 27

32 Town Parke Apartments Phase I Winter Springs, Florida Market Study simulation, and training (MS&T) industry is centered around the Orlando region as well, with a particularly strong presence in the UCF Research Park. According to the Metropolitan Orlando Economic Development Commission, the following tables illustrate additions, expansions, as well as layoffs to the metro area market in 2009 and ORANGE COUNTY EXPANSIONS AND ADDITIONS Year Type Company Product/Service Employment Change 2009 Expansion MicheLee Puppets, Inc. Professional Business Services Expansion Convergys Back Office Expansion Hilton Orlando Accomodation Expansion Waldorf Astoria Accomodation Expansion Mateer Harbert Law Office New to Market Kaplan University Education New to Market Aromatech Food Products 2 Total , Expansion Triad Isotopes Radiopharmaceuticals Expansion Peabody Orlando Hospitality Expansion Seminole State College Education Expansion Bella Automotive Goup Retail 50 Total Source: Orlando/Orange County Convention & Visitors Bureau, Inc. 09/2010 Novogradac & Company LLP 28

33 Town Parke Apartments Phase I Winter Springs, Florida Market Study ORANGE COUNTY LAYOFFS AND CLOSINGS Year Company City Industry Number of Positions 2009 Clear Channel Orlando Communications N/Av Walt Disney Parks and Resorts Lake Buena Vista Arts, Entertainment, and Recreation Universal Orlando Orlando Arts, Entertainment, and Recreation Orlando Opera Co. Orlando Arts, Entertainment, and Recreation Sun Microsystems Inc. Orlando Scientific Services Home Depot Orlando Retail Office Depot, Inc. Orlando Transportation and Warehousing WMFE TV/FM Orlando Information CNL Financial Group Orlando Real Estate Stanford Financial Group Orlando Finance and Insurance Allbertson's LLC Orlando Retail Circuit City Stores Orlando/Groveland Retail Engle Homes Orlando Construction AVIS Budget Rent-A-Car Orlando Rentals and Leasing K-Mart Winter Park Retail Advantage Rent-A-Car Orlando Rentals and Leasing Virgin Entertainment Group Lake Buena Vista Retail HMS Host Corporation Ocoee Accommodation Albertsons, LLC Winter Park Retail Correct Craft Orlando Manufacturing Comair Maintenance Base Orlando Transportation and Warehousing Total 2, Albertsons, LLC Oviedo Retail Walmart Orlando Retail Morgan Research Company Orlando Scientific Services Quality Assured Services Orlando Wholesale Trade Florida's Blood Centers Lake Mary Blood Center ABB Inc. Lake Mary Manufacturing Total 566 Source: Orlando/Orange County Convention & Visitors Bureau, Inc. 09/2010 While not all inclusive, the lists do provide an overview of the local market and are indicative of trends in the current market. Job growth in 2009 outweighs the job loss in the area. However, job loss in 2010 is slightly greater than job growth in the same time period. Major Employers The following table details the largest employers in the Orlando, FL MSA as of January 2010 (most recent available). Novogradac & Company LLP 29

34 Town Parke Apartments Phase I Winter Springs, Florida Market Study MAJOR EMPLOYERS Map # Employer Industry Number Employed 1 Walt Disney Co. Tourism 62,000 2 System) Healthcare 16,002 3 Publix Super Markets, Inc. Retail 15,606 4 Universal Orlando Tourism 13,000 5 Orlando Regional Healthcare System Healthcare 10,000 6 Busch Entertainment Corporation Tourism 7,800 7 Lockheed Martin Corporation Manufacturing 7,200 8 Marriott International, Inc.* Tourism 6,312 9 Central Florida Investments Real Estate 6, Darden Restaurants Food services 5,950 TOTAL 150,025 January 2010 Total Employment Major Employers as a % of MSA employment 972, % Source: Metro Orlando Economic Development Commission, 01/2010. *Includes employees of hotels as well as persons employed in the Hotels and Timeshare Division which is headquartered in Orlando. The largest employers in the Orlando MSA are largely centered on the tourism industry, which accounts for approximately 59.4 percent of employment among the top ten employers. Healthcare is a significant driver as well, comprising 17.3 percent of major employers. Many of the largest employers in the area are those that would provide employment for a broad range of workers, spanning hi-tech, skilled, and service occupations. The relatively low paying jobs in the tourism, retail, and food service industries will likely generate demand for affordable rental housing in the area. The economy appears to be dependent on tourism with some diversification into retail and manufacturing. As a result of the recession, domestic tourism has declined during the current economic downturn. Compensating for some of the decline in tourism, is increased international travel. Overall, the local economy is not overly dependent on the top employers as they comprise only percent of the MSA s total employment. Employment and Unemployment Trends The following table details employment and unemployment trends for the Orlando-Kissimmee, FL MSA from 1999 to July EMPLOYMENT & UNEMPLOYMENT TRENDS (NOT SEASONALLY ADJUSTED) Orlando-Kissimmee-Sanford, FL MSA USA Year Total Employment % Change Unemployment Rate Change Total Employment % Change Unemployment Rate Change , % - 133,488, % , % 3.1% 0.3% 136,891, % 4.0% -0.2% , % 4.2% 1.1% 136,933, % 4.7% 0.7% , % 5.6% 1.4% 136,485, % 5.8% 1.1% , % 5.1% -0.5% 137,736, % 6.0% 0.2% , % 4.4% -0.7% 139,252, % 5.5% -0.5% , % 3.5% -0.9% 141,730, % 5.1% -0.4% ,017, % 3.1% -0.4% 144,427, % 4.6% -0.5% ,052, % 3.8% 0.7% 146,047, % 4.6% 0.0% ,055, % 5.9% 2.1% 145,362, % 5.8% 1.2% ,001, % 10.5% 4.6% 139,877, % 9.3% 3.5% 2010 YTD Average* 985, % 11.8% 1.3% 138,687, % 9.9% 0.6% Jul ,007, % - 141,055, % - Jul , % 11.7% 0.7% 140,134, % 9.7% 0.0% Source: U.S. Bureau of Labor Statistics, Novogradac & Company LLP, September 2010 *2010 data is through Jul Novogradac & Company LLP 30

35 Town Parke Apartments Phase I Winter Springs, Florida Market Study Total employment in the MSA grew at a significant annual rate from 2005 to Due to the recession, annual total employment growth slowed significantly in 2008 and dropped in 2009 with a 5.1 percent decrease. This decrease in total employment was 1.3 percent greater than decrease in total employment in the nation. Similarly, the decrease in total employment from July 2009 to July 2010 was 0.2 percent greater in the MSA than in the nation. Unemployment in the MSA had remained below or comparable to that of the nation through 2007; however, in 2008, the unemployment rate in the MSA surpassed that of the nation by 0.1 percentage points. The current year to date average unemployment rate in the MSA is 1.9 higher than that of the nation as whole. Furthermore, from July 2009 to July 2010, the unemployment rate in the MSA grew by 0.7 percentage points compared to no growth in the national unemployment rate. Unemployment has surpassed the nation by 1.8 percent year-to-date in The decrease in employment is primarily due to the local economy s reliance on the tourism industry and the resulting lack of demand due to the recession. Further, the decline of the housing and condominium market has also led to a decline in construction jobs. Overall, the local economy appears to be susceptible to further total employment declines and increases in the unemployment rate. Employment by Industry The following table illustrates employment by industry within the PMA as of EMPLOYMENT BY INDUSTRY PMA USA Industry Number Employed Percent Employed Number Employed Percent Employed Agric/Forestry/Fishing/Hunting % 1,790, % Mining % 723, % Construction 6, % 8,872, % Manufacturing 4, % 13,047, % Wholesale Trade 2, % 4,407, % Retail Trade 10, % 15,464, % Transportation/Warehousing 2, % 5,487, % Utilities % 1,115, % Information 2, % 3,158, % Finance/Insurance 5, % 6,883, % Real Estate/Rental/Leasing 2, % 2,825, % Prof/Scientific/Tech Services 7, % 8,520, % Mgmt of Companies/Enterprises % 202, % Admin/Support/Waste Mgmt Srvcs 3, % 5,114, % Educational Services 6, % 14,168, % Health Care/Social Assistance 9, % 18,891, % Arts/Entertainment/Recreation 2, % 2,628, % Accommodation/Food Services 5, % 9,114, % Other Services (excl Publ Adm) 4, % 6,679, % Public Administration 3, % 6,916, % Total Employment 81, % 136,013, % Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 Retail, health care and professional/scientific/technology services are the largest employment sectors in the PMA. It is notable that relative to the national averages, education, health care, and manufacturing are underrepresented, while construction, retail trade, and professional/scientific/technology services are overrepresented. Furthermore, retail and construction are generally considered volatile industry sectors that are often directly affected by economic downturns like the current national recession. As previously mentioned, overall employment in the MSA is heavily related to tourism and related industries such as retail trade and Novogradac & Company LLP 31

36 Town Parke Apartments Phase I Winter Springs, Florida Market Study accommodation/food service. This concentration may account for some of the retail outlets in the PMA as well. Overall, the PMA appears to be susceptible to economic downturns like the current national recession. Economic Downturn and Mortgage Crisis The Florida real estate market is among those that have been hit the hardest during the current housing crisis. In the second quarter of 2010, the Brookings Institute published MetroMonitor: Tracking Economic Recession and Recovery in America s 100 Largest Metropolitan Areas. The Orlando MSA statistics follow: Brookings Q2 Metro Indicators, Top 100 Metropolitan Areas Orlando, FL MSA Category MSA Indicator Orlando Rank (out of 100) % Change in employment from peak (2007 Q4) -8.90% 81 One-quarter change in employment 0.80% 25 Unemployment rate 11.40% 83 One-year percentage point change in unemployment rate 0.8points 80 Change in Gross Metropolitan Product from peak (2008 Q1) 0.20% 38 One-quarter change in GMP 0.10% 94 One-year change in housing prices % 99 Real Estate Owner properties per 1,000 mortgage able properties One-quarter change in REOs per 1,000 mortgage able properties Overall Performance Second-weakest 19 metros Source: Brooking Institute, Novogradac & Company LLP, 6/2010 According to this study, real housing prices decreased by 18.5 percent from second quarter 2009 to second quarter 2010, rendering Orlando as 99 th in rank among the top 100 MSAs. Further, Orlando ranks as 99 th among the top 100 MSAs with regard to the number of Real Estate Owned properties (REOs) per 1,000 mortgage able properties as of the second quarter 2010 with 12.6 REOs per thousand. As illustrated, the recession has deeply impacted the Orlando, FL MSA as it fell in the bottom twofifths of metropolitan areas across the nation in all of the economic data measured by the Brookings Study for the second quarter of Single-Family Home Market/Foreclosures According to an August 2010 article in the Seminole Chronicle, in Oviedo and Winter Springs, 30 percent of the 829 homes for sale in mid-august were listed on the market as a short sale, while 11 percent were foreclosures, according to information obtained on the Multiple Listing Service. Home prices in the metropolitan Orlando area decreased for the first time in 2010, decreasing four percent from June to July 2010, according to the Orlando Regional Realtor Association. July 2010 sales prices have decreased by 17 percent over the past year in the metropolitan area. According to the article, the four-county region that comprises the metropolitan area experienced a 14 percent decrease in foreclosure filings over the past six months; however, Seminole County has a six percent increase in foreclosure filings over the same time period. Novogradac & Company LLP 32

37 Town Parke Apartments Phase I Winter Springs, Florida Market Study We believe the increase in foreclosures may negatively impact the performance of the Subject, although the Subject is not expected to experience significant competition from single-family homes. Conclusion Due to the recession, annual total employment growth slowed significantly in 2008 and dropped in 2009 with a 5.1 percent decrease. The year-over-year comparison shows a decrease of 0.9 percent as of July In 2009, the unemployment rate in the MSA surpassed that of the nation by 1.2 percentage points and by 1.8 percent in July The decrease in employment is primarily due to the local economy s reliance on the tourism industry and the resulting lack of demand due to the recession. While domestic tourism declined over 2008 due to the recession, targeted marketing efforts by local officials have resulted in an increase in international tourism. However, there have been considerable losses in the tourism industry over Walt Disney Parks and Resorts alone laid off an estimated 700 workers in Further, the decline of the housing and condominium market has also led to a decline in construction jobs. Orlando placed amongst the second-weakest 19 metros areas in the Brookings Second Quarter 2010 Metro Indicators report which details the top 100 metropolitan areas. Overall, the local economy appears to be susceptible to further total employment declines and increases in the unemployment rate. Novogradac & Company LLP 33

38 Town Parke Apartments Phase I Winter Springs, Florida Market Study NEIGHBORHOOD DESCRIPTION AND ANALYSIS Introduction The neighborhood surrounding an apartment property often impacts the property's status, image, class, and style of operation, and sometimes its ability to attract and properly serve a particular market segment. This section investigates the property's neighborhood and evaluates any pertinent locational factors that could affect its rent, its occupancy, and its overall profitability. Novogradac & Company LLP 34

39 Town Parke Apartments Phase I Winter Springs, Florida Market Study Street view along SR 434 Street view along SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 Novogradac & Company LLP 35

40 Town Parke Apartments Phase I Winter Springs, Florida Market Study New retail uses along Tuskawilla and SR 434 Tuskawilla Town Center Apartments Available land for sale zoned Town Center Cross Seminole Trail New condo development in neighborhood Indian Trails Middle School in neighborhood Novogradac & Company LLP 36

41 Town Parke Apartments Phase I Winter Springs, Florida Market Study Typical single-family home in neighborhood Typical single-family home in neighborhood Mobil gas station on SR 434 and Tuskawilla McDonald s fast food restaurant in neighborhood Predominant Land Uses The Subject site is located in a relatively undeveloped area. The site is bordered to the north by SR 434, which is a four-lane road that is separated by a median. North of SR 434 is vacant land. The Subject site is surrounded by vacant land to the south, east, and west. A high-end single-family homes neighborhood consisting of gated communities is located approximately 0.5 miles east of the Subject. Commercial and retail uses are located at the intersection of SR 434 and Tuskawilla Road in a newly constructed mixed-use development known as Winter Springs Town Center. The uses include a Publix, Wendy s, Great Clips, Subway, nail salon, restaurant, and dry cleaner. The strip mall is approximately 80 percent occupied and is in excellent condition. A Mobil gas station is located at the southeast corner of Tuskawilla Road and SR 434 and a pool supply store is located at the southwest corner. New condominiums are along SR 434 west of Tuskawilla Road. The Subject is also proximate to Lake Jesup. There are several small businesses that operate lakeside restaurants, fish camps and airboat tours in the vicinity of the lake. Compatibility to the Area and Age/Condition of Surrounding Properties The Subject is compatible with the existing surroundings. The Subject s immediate neighborhood consists of a significant amount of new development in good condition. The majority of singlefamily homes are in average to good condition. Novogradac & Company LLP 37

42 Town Parke Apartments Phase I Winter Springs, Florida Market Study Proximity to Local Services The following table illustrates the Subject s proximity to necessary services. Map numbers correspond with the Locational Amenities Map, presented below. Novogradac & Company LLP 38

43 Town Parke Apartments Phase I Winter Springs, Florida Market Study LOCATIONAL AMENITIES Map Numbe r Service or Amenity Miles From Subject 1 Indian Trails Middle School 0.1 miles 2 Publix Grocery & Pharmacy 0.2 miles 3 Countrywide Bank 0.2 miles 4 Keeth Elementary School 0.4 miles 5 Winter Springs High School 0.5 miles 6 Winter Springs Police Department 0.6 miles 7 Central Winds Park 1.0 miles 8 Hess Service Station 1.7 miles 9 Central Florida Greenway Tollroad Access 2.0 miles 10 Target 2.8 miles 11 Winter Springs Senior Center 3.0 miles 12 Seminole County Library 3.6 miles 13 Seminole County Fire Department 4.1 miles 14 Post Office 5.4 miles 15 South Seminole Hospital 5.5 miles Public Transportation The greater Orlando area is serviced by LYNX Central Florida Regional Transportation Authority, which provides bus service to Orange, Seminole and Osceola Counties with additional rush hour services to selected sites in Lake and Volusia Counties. The LYNX system serves over 26 million passengers annually. There are no bus stops within walking distance of the Subject. The closest bus stop to the Subject is located approximately 2.7 miles southeast in Oveido near the intersection of West Broadway Street and Winter Springs Boulevard. Conclusion The Subject s neighborhood appears to be an average location for a multifamily property. All desirable locational amenities are located within 5.5 miles of the Subject site. The Subject site lacks proximity to public transportation, which could negatively impact the property. The Subject will be a newly constructed development in a neighborhood that has a variety of residential and commercial uses. It will be a compatible use and will be considered an improvement to the existing neighborhood. Novogradac & Company LLP 39

44 DEMOGRAPHIC ANALYSIS

45 Town Parke Apartments Phase I Winter Springs, Florida Market Study DEMOGRAPHIC ANALYSIS PRIMARY MARKET AREA AND FIVE-MILE RADIUS MAP The following map illustrates the five-mile radius and the PMA. It should be noted that the submarket is defined as the PMA in this case. As illustrated, the five-mile radius is greater than the PMA. PRIMARY MARKET AREA (PMA) The following sections will provide an analysis of the demographic characteristics within the market area. Data such as population, households, and growth patterns will be studied to determine if Seminole County and the primary market area are areas of growth or contraction. The PMA is 35.9 square miles. Novogradac & Company LLP 41

46 Town Parke Apartments Phase I Winter Springs, Florida Market Study The PMA includes the area bound by Lake Jessup and Shepard Road to the north, the Central Florida Greeneway Toll Road to the east, Red Bug Lake Road, East Semoran Boulevard, and East Altamonte Drive to the south, and Interstate 4 to the west, as depicted in the above map. This area was defined based on interviews with local market participants familiar with affordable housing. We believe the Subject will have some leakage from outside the PMA. Eighty percent of the Subject s tenants are expected to hail from the PMA. Senior Population and Household Trends The table below illustrates senior population and household trends in the 3-mile radius, 5-mile radius, PMA, 10-mile radius, MSA, and nation from 2000 through SENIOR POPULATION, 55+ ANNUAL PERCENT CHANGE GEOGRAPHY Est Three-Mile Radius 7,190 11,332 13, % 3.11% PMA 17,776 24,669 27, % 2.24% 5-mile radius 20,350 31,090 35, % 2.88% 10-mile radius 91, , , % 2.45% Orlando-Kissimmee, FL MSA 343, , , % 3.25% USA 59,266,437 76,758,355 86,873, % 2.64% Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 HOUSEHOLDS WITH SENIOR HOUSEHOLDER, 55+ ANNUAL PERCENT CHANGE GEOGRAPHY Est Three-Mile Radius 4,278 5,844 6, % 3.64% PMA 10,723 13,250 15, % 2.71% 5-mile radius 11,874 16,581 19, % 4.00% 10-mile radius 55,791 71,279 82, % 3.14% Orlando-Kissimmee, FL MSA 203, , , % 3.43% USA 36,458,284 43,461,713 49,202, % 2.64% Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 The senior population of the three-mile radius grew faster than the population of the PMA, five-mile radius, ten-mile radius, MSA, and nation from 2000 to 2010 and is expected to continue this trend through 2015, with the exception of being surpassed by the senior population growth in the MSA. The PMA has the second lowest current and projected growth rates for households with senior householders, 55+. All areas of analysis for the senior population are projected to experience growth through 2015, most significantly in the MSA. The five-mile radius and the three-mile radius are growing faster than all of the local areas of analysis for senior householders. General Population Population and Household Trends The table below illustrates population and household trends in the 3-mile radius, 5-mile radius, PMA, 10-mile radius, MSA, and nation from 2000 through Novogradac & Company LLP 42

47 Town Parke Apartments Phase I Winter Springs, Florida Market Study POPULATION ANNUAL PERCENT CHANGE GEOGRAPHY Est Three-Mile Radius 37,708 42,879 44, % 0.74% PMA 84,404 90,638 92, % 0.42% Five-Mile Radius 110, , , % 1.02% Ten-Mile Radius 487, , , % 0.72% Orlando-Kissimmee, FL MSA 1,644,561 2,130,826 2,278, % 1.39% USA 281,421, ,212, ,209, % 0.77% Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 HOUSEHOLDS ANNUAL PERCENT CHANGE GEOGRAPHY Est Three-Mile Radius 13,238 14,815 15, % 0.68% PMA 32,152 34,180 34, % 0.40% Five-Mile Radius 39,734 46,185 48, % 1.01% Ten-Mile Radius 188, , , % 0.66% Orlando-Kissimmee, FL MSA 625, , , % 1.35% USA 105,480, ,761, ,359, % 0.79% Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 The senior population of the PMA grew slower than the population of the three-mile radius, fivemile radius, ten mile-radius, MSA, and nation from 2000 to 2010 and is expected to continue this trend through All areas of analysis are projected to experience growth through The household data mirrors the senior population trends. The MSA and five-mile radius are growing faster than all of the local areas of analysis. Senior Median Household Income Levels The table below illustrates senior median household income levels in the 3-mile radius, PMA, 5-mile radius, 10-mile radius, MSA, and nation from 2010 through Senior data for 2000 was unavailable. MEDIAN HOUSEHOLD INCOME, SENIOR 55+ ANNUAL PERCENT CHANGE GEOGRAPHY 2010 Est Three-Mile Radius $61,937 $74, % PMA $47,446 $56, % 5-mile radius $51,170 $60, % 10-mile radius $48,147 $56, % Orlando-Kissimmee, FL MSA $41,307 $51, % USA $41,653 $52, % Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 The senior median household income in the PMA in 2010 was the third lowest out of all areas of analysis, but is expected to surpass the ten-mile radius through The national senior median household income shows the strongest growth, followed by the MSA and near equal growth in the three-mile radius and PMA. Senior households within the three-mile radius have the highest current and projected median household incomes out of all areas of analysis. Novogradac & Company LLP 43

48 Town Parke Apartments Phase I Winter Springs, Florida Market Study General Population Median Household Income Levels The table below illustrates median household income levels in the 3-mile radius, PMA, 5-mile radius, 10-mile radius, MSA, and nation from 2000 through MEDIAN HOUSEHOLD INCOME ANNUAL PERCENT CHANGE GEOGRAPHY Est Three-Mile Radius $62,323 $81,090 $90, % 2.25% PMA $48,230 $63,342 $70, % 2.19% Five-Mile Radius $51,714 $69,304 $78, % 2.54% Ten-Mile Radius $45,959 $60,004 $66, % 2.12% Orlando-Kissimmee, FL MSA $42,002 $53,598 $59, % 2.36% USA $42,164 $54,442 $61, % 2.48% Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 The median household income of the MSA in 2010 was lower than all areas of analysis and is expected to continue this trend through The PMA is 18.0 percent greater than the MSA and 28.0 percent less than the three-mile radius. This differential is expected to continue through The greatest projected growth in median household income is in the five-mile radius, a trend that will continue from 2000 to 2010 growth. The three-mile radius shows the highest median household income within the PMA, demonstrating that lower income families close to the Subject may have limited housing options. The following chart shows the AMI level for a four-person household in the Orlando-Kissimmee, FL MSA. Source: Novogradac & Company, LLP, September 2010 Overall, income levels have increased by approximately 21 percent from 1999 to The Orlando-Kissimmee, FL MSA experienced a 4.4 percent decrease from 2006 to 2007 followed by a 7.8 percent increase in AMGI grew 3.1 percent when compared to 2006 levels, which indicates that median income growth in the MSA has recovered. Additionally, the 2009 AMGI represents a 2.5 increase over the 2008 AMGI, and the 2010 AMGI increased 0.3 percent over 2009 levels, which is further evidence that the MSA has recovered. The Subject s rents are set slightly below the maximum allowable level; therefore, any change in AMGI may directly affect its rents. Novogradac & Company LLP 44

49 Town Parke Apartments Phase I Winter Springs, Florida Market Study Senior Household Income The table below illustrates senior household income levels in the PMA for HOUSEHOLD INCOME OF SENIORS 55+ IN 2010 Orlando-Kissimmee- Income Cohort PMA Sanford, FL MSA USA Number Percentage Number Percentage Number Percentage $0-9, % 24, % 4,573, % $10,000-19,999 1, % 38, % 6,173, % $20,000-29,999 1, % 40, % 5,788, % $30,000-39,999 1, % 36, % 4,985, % $40,000-49,999 1, % 30, % 4,161, % $50,000-59,999 1, % 24, % 3,316, % $60,000-74,999 1, % 26, % 3,957, % $75,000-99,999 1, % 28, % 4,495, % $100,000+ 2, % 33, % 6,008, % Total 13, % 283, % 43,461, % Source: Ribbon Demographics 2007, Novogradac & Company LLP, September 2010 Tenants earning between $11,250 and $44,160 may be income-eligible to live at the Subject. Approximately 41 percent of households in the PMA fall within these income bands. Conclusion The areas within the three-mile radius and five-mile radius have demonstrated that they are areas of growth, along with the MSA. The population and the number of households are both expected to increase from 2010 to The MSA is projected to have the highest population growth, while the highest median income level is within a three-mile radius of the Subject. These factors indicate that there is growing demand in the greater Winter Springs area for family and senior affordable housing. Novogradac & Company LLP 45

50 SUPPLY ANALYSIS

51 Town Parke Apartments Phase I Winter Springs, Florida Market Study SUPPLY ANALYSIS HOUSING SUMMARY According to an August 2010 article in the Seminole Chronicle, in Oviedo and Winter Springs, 30 percent of the 829 homes for sale in mid-august were listed on the market as a short sale, while 11 percent were foreclosures, according to information obtained on the Multiple Listing Service. Home prices in the metropolitan Orlando area decreased for the first time in 2010, decreasing four percent from June to July 2010, according to the Orlando Regional Realtor Association. July 2010 sales prices have decreased by 17 percent over the past year in the metropolitan area. According to the article, the four-county region that comprises the metropolitan area experienced a 14 percent decrease in foreclosure filings over the past six months; however, Seminole County has a six percent increase in foreclosure filings over the same time period. Despite the declining home prices in the local area, property managers at the affordable LIHTC and lower priced market rate properties report that they are not losing tenants to homeownership. Many tenants, particularly those living at LIHTC properties or older market rate properties, already have foreclosures on their records, do not qualify for loans given the current tight credit environment, or do not believe that the market has reached the bottom and are unwilling to enter into the ownership market. For all of these reasons, we do not believe that the Subject will compete with homeownership. The following table outlines the rent buy analysis. Novogradac & Company LLP 47

52 Town Parke Apartments Phase I Winter Springs, Florida Market Study RENT BUY ANALYSIS -4.5% RENT BUY ANALYSIS- Winter Springs, Florida Inputs Ownership Rental Notes Average Price $160,000 $160,000-Average sales price provided by zillow.com Closing Costs 3% $4,800 Downpayment 10% $16,000 Principal $144,000 Interest Rate 4.50% Amortization period 30 Monthly Payment $730 Annual Payment $8,756 Real Estate Taxes 1.25% $2,000 Private Mortgage Insurance 0.00% $0 Homeowner's Insurance 0.50% $800 Utilities $228 Trash estimated cost for one year. Maintenance and Repairs 1.00% $1,600 Assumes a 1% cost for maintenance and repairs. Tax Benefit Assumes taxable income of $36,000 Marginal Tax Bracket 25% Annual Interest $6,480 Assumes first year Annual Tax Savings ($2,120) Rental Costs Annual Rent $11,364 3 BR (market rate) net rent Insurance (renter) $150 Total Annual Cost $11,264 $11,514 Total Monthly Cost $939 $960 Differential per year ($250) Differential per month ($21) Cash Due at Occupancy $20,800 $1,247 According to zillow.com, the average purchase price of a single-family home in the Subject s neighborhood is $160,000. Our inputs assume a three-bedroom single-family home with a purchase price of $160,000 and an interest rate of 4.5 percent for a 30-year fixed mortgage with a five percent down payment. This was compared to the cost to rent the Subject s market rate three-bedroom unit. This analysis indicates that with a monthly differential of $21, it is slightly more affordable to purchase a single-family home than to rent in Winter Springs. This indicates that the Subject may have to compete with homes at lower interest rate levels. However, the cash due at occupancy of $20,800 will likely price many lower-income senior households out of homeownership. Tenure The following table is a summary of the tenure patterns of the housing stock within the PMA. Novogradac & Company LLP 48

53 Town Parke Apartments Phase I Winter Springs, Florida Market Study Household Size PMA TENURE PATTERNS OF SENIORS 55+ Year Owner-Occupied Units Percentage Owner-Occupied Renter-Occupied Units Percentage Renter-Occupied , % 1, % , % 2, % , % 2, % Source: ESRI Demographics 2010, Novogradac & Company LLP, September 2010 PMA RENTER HOUSEHOLD SIZE DISTRIBUTION OF SENIORS Total Renter Total Renter Total Renter Households Percent Households Percent Households Percent 1 person % 1, % 1, % 2 persons % % % 3 persons % % % 4 persons % % % 5+ persons % % % Total 1, % 2, % 2, % Source: Ribbon Demographics 2007, Novogradac & Company LLP, September 2010 Owner-occupied housing units dominate the housing market in the PMA. According to the 2000 U.S. Census, approximately 33.8 percent of the housing market nationally consists of renteroccupied housing units. The percentage of senior renter-occupied housing units in the PMA is less than the national average at 15.9 percent. Since 2000, the percentage of senior renter-occupied units in the PMA has increased and is projected to increase through As illustrated in the table above, the majority of senior renter households consist of one person households. A total of 94 units, or 87 percent, of the Subject s units are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development based upon the number of two-person senior renter households in the PMA. In addition, the property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. INTERVIEWS/DISCUSSION In order to ascertain the need for housing and affordable housing in the Subject s area, interviews were conducted with various local officials including the Seminole County Housing Authority, the City of Winter Springs Planning Department, and the Winter Springs Senior Center. Seminole County Housing Authority According to a September 2010 interview with Pam Shaw, Administrative Assistant with the Seminole County Housing Authority, the waiting list for Housing Choice Vouchers is approximately one to two years in length and has approximately 270 households. The housing authority that a total of 334 vouchers in use and there are no immediate plans to re-open the waiting list. The following table illustrates the current payment standards. Novogradac & Company LLP 49

54 Town Parke Apartments Phase I Winter Springs, Florida Market Study BR Payment Standard 1 BR $829 2 BR $947 3 BR $1,185 4 BR $1,396 The Subject s proposed rents are below the payment standards; therefore voucher tenants could reside at the Subject without paying additional rent out of pocket. City of Winter Springs Planning Department According to Mr. John Baker, Senior Planner with the Winter Springs Planning Department, there are currently no plans for multifamily development in the area, other than the Subject. Additionally, Mr. Baker stated that DR Horton is slowly moving forward on the development of 12 townhomes in the area of SR-434, approximately one block west of Tuscawilla Road. LIHTC Competition / Recent and Proposed Construction According to the Florida Housing Finance Corporation s summary of LIHTC projects awarded tax credits, there have been no allocations in the Subject s PMA since Winter Springs Senior Center The Winter Springs Senior Center is located at 400 N Edgemon Avenue, approximately 3.0 miles west of the Subject. According to Susie Coughman, manager of the Winter Springs Senior Center, the center hosts residents from surrounding Lake Mary, Casselberry and Oviedo, FL, as well as Winter Springs. The center offers water aerobics, Zoomba, chair aerobics, yoga, art and social meetings. Transportation is not provided by the center, so many seniors carpool or are driven by family members. As the average age of the seniors ranges from 75 to 80, the vast majority of them do not hold jobs, and attendees that do are usually visiting or accompanying parents. Mrs. Coughman commented that while the center does not refer specific housing options to the seniors, there are a number of flyers available for assisted living communities in the surrounding areas. Mrs. Coughman was not aware of any low-income senior housing options in any of the surrounding area and indicated that most senior properties within a reasonable drive from the center were for assisted living or had premiums similar to those of assisted living properties. Mrs. Coughman indicated moderate demand for affordable senior housing in the area. Novogradac & Company LLP 50

55 Town Parke Apartments Phase I Winter Springs, Florida Market Study INTERVIEWS WITH COMPARABLE FAMILY PROPERTIES To determine the demand for affordable senior housing in the Winter Springs, FL area, ten family properties used as comparable properties were interviewed. Management from eight of the ten comparable family properties provided information. Castlewood According to management at Castlewood, seniors comprise approximately 15 percent of the tenants. The average age for the senior tenants was estimated at 68. Furthermore, management suggested that an estimated 50 percent of the senior tenants were coming from previous home ownership, but many are not selling their homes due to a down market. It was suggested by management that seniors prefer the one-bedroom units, unless they are moving from a large house and need the space of a two-bedroom unit. North Springs Estates According to management at North Springs Estates, most households that rent their three-bedroom homes are young starter families. Management identified only one of 12 of her current tenant households as a senior household. The age of the senior tenant was estimated at 60. Management indicated that there is a need for more affordable senior housing units in the area, as the units that do become available are rented very quickly. Oviedo Town Centre According to management at Oviedo Town Centre, seniors make up roughly 10 to 15 percent of the tenancy. The average age of senior tenants was estimated at 70 years. Management also estimated that 60 to 70 percent of the senior tenants were coming from previous homeownership. Management reported the majority of senior tenants occupy one-bedroom units. The property manager did not know of any senior oriented rental properties in the area and suggested that there was a need for more affordable senior housing for individuals on fixed incomes. Chatham Pines Apartments According to management at Chatham Pines Apartments, seniors make up approximately 25 percent of the tenancy. The average age was estimated to be about 70 years, with 50 to 65 percent of the seniors coming from previous home ownership. It was suggested by management that there is a need for additional affordable senior housing with properties targeted to seniors. Management stated that almost all of the senior tenants request first or second floor units and there are only so many in the local market. Management reported the majority of senior tenants occupy one-bedroom units. Furthermore, management suggested that this properties senior tenancy would likely move to a senior specific property with affordable units if there was one offering elevators and shuttle services. Legends Winter Springs According to management at Legends Winter Springs, senior tenancy is between 10 and 15 percent, with an average age of 70. Management suggested that most seniors at the property were likely coming from previous homeownership if they could afford the current market rents starting at $915 for a one-bedroom unit. It was noted that seniors have trouble affording and qualifying, as their monthly household incomes must be at least three times the rent. Management suggested that seniors are drawn to the property because of its location and planned activities. Management indicated that there was a need for more affordable senior housing in the area as they were only Novogradac & Company LLP 51

56 Town Parke Apartments Phase I Winter Springs, Florida Market Study aware of subsidized senior housing and those properties had wait lists of at least two years. The majority of the senior housing in the area was identified as assisted living or having many premiums that drive the price above the affordability of many local seniors. Oviedo Grove Apartments According to management at Oviedo Grove Apartments, senior tenancy is below 10 percent, with an average age of 65. As far as management was aware, there are no senior oriented affordable housing properties in the area of Oviedo. Loma Vista Apartments According to management at Loma Vista Apartments, senior tenancy is between 10 and 15 percent. The average age of seniors at the property was approximately 65 and many of the senior tenants have been at the property for many years. Management suggested that there is a need for more senior affordable housing that provides units on the first floor. Additionally, management suggested that shuttle services are in demand for the senior tenants at the property. Mystic Cove Apartments According to management at Mystic Cove Apartments, approximately 15 percent of the property s tenants are seniors. The average age of the senior tenants was estimated at 65 years. Management was not aware of any current tenants who had been previous homeowners and suggested that most of the senior tenants had been at the property for over five years, with the rest having come from other subsidized properties. Furthermore, management commented that senior tenants prefer first floor living and many do not drive. Conclusion In conclusion, the average senior tenancy at the family comparable units is roughly 15 percent, with an average age between 65 and 70. According to local managers, slightly more than 50 percent of senior tenants are coming from previous homeownership, while the rest have been lifetime renters or previously lived with families. Management at each of the eight comparable family properties suggested that there was a need for senior affordable housing in the Winter Springs area, primarily for one-bedroom units. It is evident that where seniors have the options of two-bedroom units they still choose the one-bedroom units. We believe that this is showing the preference for one-bedroom units and the pricing pressures faced by seniors. Novogradac & Company LLP 52

57 Town Parke Apartments Phase I Winter Springs, Florida Market Study CLIENT REQUIREMENTS The following map illustrates the five-mile radius and the PMA. As illustrated, the five-mile radius is greater than the PMA. Novogradac & Company LLP 53

58 Town Parke Apartments Phase I Winter Springs, Florida Market Study Effect of Subject on Existing LIHTC Supply We have identified and mapped all LIHTC developments within a five-mile radius of the Subject. There are eight LIHTC properties located within a five-mile radius of the Subject. To determine the properties used as comparables in this report, Novogradac interviews property managers for information on unit mix, sizes, and absorption rates, unit features and project amenities; tenant profiles; and market trends in general. We also gather the names of competitive properties from property managers to assist in choosing our comparable properties. In addition, we consult the LIHTC, Section 8 and Public Housing lists for Winter Springs, along with observing the properties in the Subject s neighborhood, and exclude all properties that are not comparable with the Subject in terms of tenancy, age/condition and rent and income restrictions. The following table and map illustrate all LIHTC properties located within a five-mile radius of the Subject. Novogradac & Company LLP 54

59 Town Parke Apartments Phase I Winter Springs, Florida Market Study LIHTC PROPERTIES WITHIN FIVE-MILE RADIUS Guarantee Year Built Included as # of Novoco Novoco Novoco Competitve # Name Type Fund / Proposed Comparable Units Vacant Units 1 Logan Heights Family Yes 1999 No % 90.0% 96.0% 14 2 Charleston Club Family No 2002 No % 26 3 Wyndham Place Family Yes 2001 No % 88.0% 89.0% 29 4 Castlewood Family No 1993/2003 Yes % 91.1% 98.0% 6 5 Loma Vista Family No 2000 Yes % 97.1% 99.2% 3 6 Barrington Place Family No 1999 No % 96.6% 98.0% 5 7 Mystic Cove Family No 2003 Yes % 97.3% 97.8% 4 8 Oviedo Town Centre Family No 2008 Yes % 99.2% 100.0% 0 Total Competitive and Vacant 87 Based on the data above, it appears that there is currently slightly more supply than demand for LIHTC housing within a five-mile radius of the Subject, with 87 vacant LIHTC units. None of the comparable LIHTC properties located within a five-mile radius are age-restricted. The Subject will be unique in the market as an age-restricted LIHTC property. Management at each of the eight comparable family properties suggested that there was a need for senior affordable housing in the Winter Springs area. Based on the demand analysis performed later in this report, capture rates are reasonable and indicative of moderate demand for additional affordable housing. The national recession appears to have had a slightly negative impact on the LIHTC supply in the Subject s area. Population growth is forecasted to be moderate in the market area. Historically, the area has experienced significant job growth. However, the total employment has decreased since 2009 due to the recession. We expect the market will return to previous levels following the recession. Currently, all of the stabilized LIHTC properties used in our analysis have vacancy rates of zero percent to 8.2 percent. As illustrated in the table above, there are eight LIHTC properties located within a five-mile radius of the Subject. We have included four of these properties as comparables in our report. Logan Heights, Charleston Club and Wyndham Place are all located in Sanford. These properties are not located within the PMA and are considered to be in a different market area than the Subject. Managers at these properties located in Sanford indicated that they do not compete with properties located in Winter Springs. Four of the properties located within a five-mile radius are located in Oviedo. Managers at properties in Oviedo indicated that they do not directly compete with properties in Winter Springs. However, we have included these properties as comparables in our report as further support for our conclusions. Similar to the Subject, Oviedo Town Centre offers units restricted to households earning 33 percent and 60 percent of the AMI. Barrington Place was built in 1999 and is in inferior condition to the proposed Subject. Barrington Place offers units restricted at 50 percent of the AMI. This property has been excluded due to differing AMI levels. The current national economic recession appears to have had some negative impact on the LIHTC supply in the Subject s area. The Subject will enter the market in September 2011 and the local economy and housing market should be recovering and in a better position than it is currently. The introduction of the Subject will likely have a negative short-term impact on existing LIHTC supply Novogradac & Company LLP 55

60 Town Parke Apartments Phase I Winter Springs, Florida Market Study due to current market and economic conditions; however, the long term impact will be mitigated by job growth, no new supply planned, and the mixed income nature of the Subject. This is supported by very low overall capture rates. Based on the projected growth in the PMA, the anticipated recovery of the economy and housing market, anecdotal evidence of demand, and the demand analysis presented later in this report, the addition of the Subject should not negatively impact the existing housing stock in a five-mile radius in the long-term. The Subject will serve a broader income band than is served by the existing LIHTC properties in the Winter Springs market; however, the Subject s lower rents may cause tenants to relocate from other affordable properties and have a negative impact on their occupancy rates. Additionally, the Subject will be the only age-restricted affordable development in the area. FHFC Guarantee Fund Developments The following table and map identify the FHFC Guarantee Fund Developments in the larger of the PMA or five-mile radius. In this case, the five-mile radius is larger. Novogradac & Company LLP 56

61 Town Parke Apartments Phase I Winter Springs, Florida Market Study FHFC Guarantee Fund Developments in PMA or Five-Mile Radius Map # Name # of Units Year Built Feb-10 Mar-10 Apr-10 May-10 Jun-10 Sep-10 1 Logan Heights % 88% 88% 89% 93% 98% 3 Wyndham Place % 88% 84% 88% 84% 89% There are two guarantee funds located within a five-mile radius of the Subject. The guarantee fund developments within a five mile radius of the Subject target family households and will not directly compete with the Subject s proposed 108 age-restricted units. Though both properties are located in the five mile radius, they are not within the PMA and are considered to be in a different market area than the Subject and should not be negatively impacted by the construction of the Subject. Managers at both properties, which are located in Sanford, indicated that they do not compete with properties located in Winter Springs. Since February 2010, the occupancy rates at both Logan Heights and Wyndham Place have improved. Competitive Market Area The Subject s Competitive Market Area (CMA) is slightly larger than the previously defined PMA. The CMA includes the city of Oviedo. Due to its close proximity to Winter Springs, we believe that as an age-restricted development, the Subject may compete with properties in Oviedo. A map of the CMA follows. Novogradac & Company LLP 57

62 Town Parke Apartments Phase I Winter Springs, Florida Market Study Average Physical Occupancy Rate The following table illustrates all competitive properties in the CMA and their occupancy levels as of the effective date of this report. All of the properties below are family-oriented properties. CMA Occupancy - September 2010 Name Type # of Units Vacant Units Occupancy Castlewood LIHTC % North Springs Estates LIHTC % Oviedo Town Centre LIHTC % Loma Vista LIHTC % Mystic Cove LIHTC % Total 1, Average Physical Occupancy Rate (POR #1) 99% As illustrated, the Average Physical Occupancy Rate (POR #1) is 99 percent. Novogradac & Company LLP 58

63 Town Parke Apartments Phase I Winter Springs, Florida Market Study Average Physical Occupancy Rate, Outliers Removed None of the properties are considered outliers. The physical occupancy rates at the LIHTC properties located in the CMA range from 98 to 100 percent, averaging 99 percent. SURVEY OF COMPARABLE PROJECTS Comparable properties are examined on the basis of physical characteristics, e.g., building type, building age/quality, the level of common amenities, absorption rates, and similarity in rent structure. We attempted to compare the Subject to properties from the competing market in order to provide a picture of the general economic health and available supply in the market. Description of Property Types Surveyed/Determination of Number of Tax Credit Units To evaluate the competitive position of the Subject, 2,455 units in eleven rental properties were surveyed in depth. We have also visited and surveyed other properties that were excluded from the market survey, either because they are not considered comparable to the Subject or they would not participate in the survey. Property managers were interviewed for information on unit mix, sizes, absorption rates, unit features, and project amenities; tenant profiles; and market trends in general. The availability of LIHTC data in the PMA is considered limited and the availability of market rate data is considered average. There are no age-restricted LIHTC properties in the PMA and agerestricted data is considered limited. The Subject will be unique in the market as an age-restricted LIHTC property. Due to the lack of age-restricted LIHTC data, we have included one age-restricted property, Covenant on the Lakes, located 22.2 miles south of the Subject in Orlando. Covenant on the Lakes was constructed in 2006 and offers LIHTC units at 30 percent and 60 percent of the AMI restricted to seniors. There are only two LIHTC properties in the PMA and many of the market rate properties are in significantly inferior condition or the management would not participate. We have included both LIHTC properties that are located in the PMA as comparable properties. We have included three additional LIHTC family properties located just east of the PMA in Oviedo. Given the overall similarities between the Subject and Oviedo Town Centre, we believe it was necessary to include it as a comparable even though it is outside the PMA. Two market rate properties, Newport Colony and Oviedo Grove Apartments, are also located outside the PMA. Newport Colony is located less than 0.1 miles outside of the PMA and Oviedo Grove Apartments is located approximately two miles outside the PMA. Overall, the rental data gathered from the market is considered sufficient to support the conclusions. Detailed matrices describing the individual competitive properties, as well as the proposed Subject, are provided in the addenda of this report. A map illustrating the location of the Subject in relation to the comparable properties is also below. Novogradac & Company LLP 59

64 Town Parke Apartments Phase I Winter Springs, Florida Market Study COMPARABLE RENTAL PROPERTY MAP COMPARABLE PROPERTIES # Property Name City Type Distance 1 Castlewood 7.0 miles 2 Covenant On The miles 3 Loma Vista Apartments 7.8 miles 4 Mystic Cove Apartments 8.0 miles 5 North Springs Estates Altamonte 8.8 miles 6 Oviedo Town 4.8 miles 7 Chatham Pines Apartments Winter Springs Market 5.8 miles 8 Legends Winter Springs Winter Springs Market 1.6 miles 9 Newport Colony Casselberry Market 9.3 miles 10 Oviedo Grove Apartments Oviedo Market 7.8 miles 11 Tuskawilla Town Center Winter Springs Market 1.8 miles *Denotes LIHTC Senior Property Novogradac & Company LLP 60

65 Town Parke Apartments Phase I Winter Springs, Florida Market Study SUMMARY MATRIX Comp # Project Distance Type / Built / Renovated Market / Subsidy Units # % Restriction Rent (Adj.) Size Max Wait Units Vacancy (SF) Rent? List? Vacant Rate Subject Town Parke Apartments n/a 1BR / 1BA 1 $ no N/A N/A SR 434 East Of Tuskawilla (4 stories) Market 1BR / 1BA 7 $ no N/A N/A Winter Springs, FL / n/a 2BR / 2BA 9 $ no N/A N/A Seminole County 2BR / 2BA 75 $ no N/A N/A 2BR / 2BA % Market $ n/a N/A N/A 3BR / 2BA 1 $342 1,206 no N/A N/A 3BR / 2BA 4 $768 1,206 no N/A N/A 3BR / 2BA % Market $947 1,206 n/a N/A N/A % N/A N/A 1 Castlewood 7 miles 1BR / 1BA 48 $ yes No % 1131 Castle Woods Terrace (2 stories) 2BR / 2BA 136 $705 1,150 yes No % Casselberry, FL / BR / 2BA 120 $802 1,350 yes No % Seminole County % % 2 Covenant On The Lakes 22.2 miles 1BR / 1BA 8 $ no No % 2214 South Rio Grande Avenue (3 stories) 1BR / 1BA N/A $ no No N/A N/A Orlando, FL / n/a 2BR / 2BA 8 $ no No % Orange County 2BR / 2BA N/A $ no No N/A N/A % % 3 Loma Vista Apartments 7.8 miles 1BR / 1BA 128 $ yes No % 5200 Loma Vista Circle (3 stories) 2BR / 2BA 132 $691 1,079 yes No % Oviedo, FL / n/a 3BR / 2BA 88 $792 1,203 yes No % Seminole County 4BR / 3BA 32 $866 1,454 yes No % % % 4 Mystic Cove Apartments 8 miles 1BR / 1BA 32 $ yes No % 2780 Mystic Lake Drive (2 stories) 2BR / 2BA 112 $ yes No % Oviedo, FL / n/a 3BR / 2BA 16 $790 1,100 yes No % Seminole County 4BR / 3BA 24 $863 1,200 yes No % % % 5 North Springs Estates 8.8 miles 3BR / 2BA 12 $707 1,100 no No % 1193 Merritt Street 1994 / n/a Altamonte Springs, FL Seminole County % % 6 Oviedo Town Centre BR / 1BA 2 $ yes Yes % 450 Fontana Circle (3 stories) 1BR / 1BA 65 $ yes Yes % Oviedo, FL / n/a 2BR / 2BA 1 $328 1,030 yes Yes % Seminole County 2BR / 2BA 44 $701 1,030 yes Yes % 3BR / 2BA 8 $366 1,214 yes Yes % 3BR / 2BA 68 $797 1,214 yes Yes % 4BR / 3BA 1 $400 1,465 n/a Yes % 4BR / 3BA 47 $874 1,465 yes Yes % % % 7 Chatham Pines Apartments 5.8 miles Midrise Market 1BR / 1BA % Market $ n/a No % 1020 Chatham Pines Circle 1991 / BR / 1BA % Market $ n/a No % Winter Springs, FL BR / 1BA % Market $ n/a No % Seminole County 2BR / 2BA % Market $978 1,100 n/a No % 3BR / 2BA % Market $1,118 1,150 n/a No % % % 8 Legends Winter Springs 1.6 miles Lowrise Market 1BR / 1BA % Market $ n/a No % 440 Courtney Springs Circle 2000 / n/a 2BR / 2BA % Market $964 1,138 n/a No % Winter Springs, FL BR / 2BA % Market $1,152 1,330 n/a No % Seminole County % % 9 Newport Colony 9.3 miles Various Market 1BR / 1BA (Garden) N/A N/A Market $ n/a No 0 N/A 1166 Pointe Newport Terrace (2 stories) 1BR / 1BA (Garden) N/A N/A Market $ n/a No 1 N/A Casselberry, FL / BR / 1BA (Garden) N/A N/A Market $ n/a No 8 N/A Seminole County 2BR / 2BA (Garden) N/A N/A Market $906 1,022 n/a No 3 N/A 2BR / 2BA (Townhouse) N/A N/A Market $1,056 1,130 n/a No 3 N/A 3BR / 2BA (Garden) N/A N/A Market $1,106 1,266 n/a No 2 N/A % % 10 Oviedo Grove Apartments 7.8 miles Garden Market 1BR / 1BA % Market $ n/a No % 1600 Oviedo Grove Circle 2000 / n/a 1.5BR / 1BA % Market $ n/a No % Oviedo, FL BR / 2BA % Market $1,019 1,145 n/a No % Seminole County 3BR / 2BA % Market $1,259 1,351 n/a No % % % 11 Tuskawilla Town Center 1.8 miles Lowrise Market 1BR / 1BA % Market $ n/a No % 1401 Blumberg Blvd / n/a 2BR / 2BA % Market $1,264 1,039 n/a No % Winter Springs, FL BR / 2BA % Market $1,282 1,044 n/a No % Seminole County 2BR / 2BA % Market $1,514 1,322 n/a No % 3BR / 2BA % Market $1,498 1,322 n/a No % % % Novogradac & Company LLP 61

66 Town Parke Apartments Phase I Winter Springs, Florida Market Study Property Characteristics Following are relevant characteristics of the comparable properties surveyed: Location The Subject is located in a relatively undeveloped area. Vacant land surrounds the site to the north, south, east, and west. Commercial and retail uses are located at the intersection of Tuskawilla and SR 434, approximately 0.5 miles west of the Subject. Though North Spring Estates is located more proximate to major thoroughfares, it is located in a neighborhood that is significantly inferior to the Subject s neighborhood in terms of quality. Thus, North Spring Estates is in an inferior location relative to the Subject. Tuskawilla Town Center is located in the Winter Springs Town Center at 434 and Tuskawilla Road in a similar location to the Subject. The remaining comparables are located in slightly superior locations compared to the Subject due to being in more developed areas with convenient access to major employers and amenities. Age and Condition The Subject will be a newly constructed property. Oviedo Town Centre, a LIHTC property, was constructed in 2008 and is in excellent condition. Tuskawilla Town Center, a market rate property, opened in 2009 and is also in excellent condition. Loma Vista, Mystic Cove and Covenant on the Lakes, three LIHTC properties, were constructed between 2000 and 2006 and all exhibit good condition. Oviedo Grove Apartments and Legends Winter Springs, market rate properties, were constructed in 2000 and are in good condition. The remaining comparables are in average condition. Overall, the Subject will have a competitive advantage in terms of age and condition. Unit Size The following table summarizes unit sizes in the market area, and provides a comparison of the Subject s unit size and the surveyed average unit sizes in the market. UNIT SIZE COMPARISON Unit Type Subject Surveyed Min Surveyed Max Surveyed Average Advantage/ Disadvantage 1 BR % 2 BR ,322 1,023-13% 3 BR 1,206 1,100 1,351 1,236-3% The Subject s one, two and three-bedroom unit sizes will be smaller than the surveyed average. However, the Subject s unit sizes are competitive with the one age-restricted comparables unit sizes which are 539 for a one-bedroom unit and 760 for a two-bedroom unit. Overall, as an age-restricted property, the Subject should be competitive in terms of unit sizes. Amenities A detailed description of amenities included in both the Subject and the comparable properties can be found in the amenity matrix below. The matrix has been color coded. Those properties that offer an amenity that the Subject does not offer are shaded in red, while those properties that do not offer an amenity that the Subject does offer are shaded in blue. Thus, the inferior properties can be identified by the blue and the superior properties can be identified by the red. Novogradac & Company LLP 62

67 Town Parke Apartments Phase I Winter Springs, Florida Market Study AMENITY MATRIX REPORT Mystic Cove North Apartments Springs Town Parke Apartments Castlewood Covenant On The Lakes Loma Vista Apartments Oviedo Town Centre Chatham Pines Legends Winter Newport Colony Oviedo Grove Apartments Estates Apartments Springs Comp # Subject Property Information Property Type Garden (4 stories) Garden (2 stories) Lowrise (agerestricted) (3 stories) Garden (3 stories) Garden (2 stories) Garden Garden (3 stories) Midrise Lowrise Various (2 stories) Garden Tuskawilla Town Center Year Built / Renovated / / / Market Market Market Market Market Market In-Unit Amenities Balcony/Patio yes no yes no yes no yes yes yes yes yes yes Blinds yes yes yes yes yes yes yes yes yes yes yes yes Cable/Satellite/Internet yes no no no no no no no no no yes no Carpeting yes yes yes yes yes yes yes yes yes yes yes yes Central A/C yes yes yes yes yes yes yes yes yes yes yes yes Coat Closet yes no no yes yes no yes no no no no yes Dishwasher yes yes yes yes yes no yes yes yes yes yes yes Exterior Storage no no no yes no no no no no no yes no Ceiling Fan yes yes yes yes yes no yes yes no no yes yes Fireplace no no no no no no no no no yes no no Garbage Disposal yes yes yes yes yes no yes yes yes yes yes yes Hand Rails no no yes no no no no no no no no no Microwave no no no no no no no no no no yes yes Oven yes yes yes yes yes yes yes yes yes yes yes yes Pull Cords no no yes no no no no no no no no no Refrigerator yes yes yes yes yes yes yes yes yes yes yes yes Vaulted Ceilings no no no no no no no yes no no no no Walk-In Closet yes yes yes yes yes no yes no no no yes no Window A/C no no no no no no no no no no no yes Washer/Dryer no no no no no no yes no yes no yes yes Washer/Dryer hookup yes yes yes yes yes yes no yes no yes no no Property Amenities Basketball Court no yes no no no no no yes no yes yes no Business Center/Computer Lab no no yes yes yes no yes no no no yes no Car Wash yes yes no yes yes no no yes no no no no Carport no no no no no no no no no yes no no Clubhouse/Meeting Room/Community Room yes no yes no yes no yes no yes no no no Elevators yes no yes no no no no no no no no yes Exercise Facility yes yes yes yes yes no yes yes yes no yes yes Garage no no no no no yes no no yes no no no Jacuzzi no no no no no no no yes yes no no no Central Laundry no no no no no no no no no yes no no Non-shelter Services yes no no no no no no yes no no no no Off-Street Parking yes yes yes yes yes no yes yes yes yes yes yes On-Site Management yes yes yes yes yes no yes yes yes yes yes yes Picnic Area no yes no yes no no yes yes no yes yes no Playground no yes no yes yes no yes no no no no no Recreation Areas yes no no no no no no no no no no no Sauna no no no no no no no no no yes no no Swimming Pool yes yes yes yes yes no yes yes yes yes yes no Tennis Court no no no no yes no no no no yes yes no Volleyball Court no yes no yes no no no yes no yes no no Wi-Fi no no no no no no yes no no no no no Carport Fee N/A N/A N/A N/A N/A N/A N/A N/A N/A $25.00 N/A N/A Garage Fee N/A N/A N/A N/A N/A N/A N/A N/A $ N/A N/A N/A Services Adult Education no no no no yes no no no no no no no Afterschool Program no yes no yes yes no no no no no no no Security In-Unit Alarm no no no no no no no no yes no yes no Limited Access no no no no yes no yes no no no no yes Patrol no yes no yes yes no no no yes no yes no Perimeter Fencing no yes no yes yes no yes no no yes no no Video Surveillance no no no no no no no no no no yes no Premium Amenities Floor no no no no no no no no no yes no no View no no no no no no no no no yes no no Other Amenities Other washer/dryer - Putting Green, Library $35, cable - $45 n/a washer/dryer - $45, cable - $56 n/a n/a n/a n/a n/a n/a n/a n/a Novogradac & Company LLP 63

68 Town Parke Apartments Phase I Winter Springs, Florida Market Study Unit Amenities The Subject will be similar to slightly superior to the comparable properties in terms of in-unit amenities. However, the Subject lacks pull cords and hand rails, which are both offered in the units at Covenant on the Lakes, the one age-restricted comparable property. As an age-restricted development, we recommend the addition of pull cords and hand rails to the in-unit amenities package, if feasible. Common Area Amenities The Subject will be similar to slightly superior to the comparable properties in terms of common area amenities due to the Subject s offering of a clubhouse, non-shelter services and several recreation areas. Resident programs will include welfare to work or self-sufficiency programs, homeownership program, first time homebuyer seminars, job training, health and wellness classes, resident activities, and a resident assistance referral program. We recommend the addition of social and recreational programs, transportation and medical services through third-party service providers targeted to seniors, if feasible. The Subject will offer amenities targeted to the senior tenancy including an elevator and a library. In general, the Subject will be competitive in terms of common area amenities. Utility Structure All of the Subject s units are individually metered for electricity. The tenant will be responsible for paying electric expenses. The Subject s rents will include trash collection only. The utility conventions differ at the comparable properties; therefore, we have adjusted base or asking rents of the comparable properties to net rents, reflecting the Subject s utility convention. Parking The Subject and all of the comparable properties offer ample off-street parking. We believe the proposed parking at the Subject is sufficient. MARKET CHARACTERISTICS Following are relevant market characteristics for the comparable properties surveyed. Tenant Makeup The following tables illustrate the tenant characteristics and percentage of voucher holders at the comparable properties. Novogradac & Company LLP 64

69 Town Parke Apartments Phase I Winter Springs, Florida Market Study TENANT CHARACTERISTICS Comparable Property Type Tenant Characteristics Town Parke Apartments LIHTC N/A Castlewood LIHTC Mixed tenancy; 15 percent seniors with an average age of Covenant On The Lakes LIHTC average age; 20% working, but most on fixed incomes Loma Vista Apartments LIHTC Mixed tenancy, primarily from the Oviedo area; percent seniors with average age of 65 Mystic Cove Apartments LIHTC Mostly from the local area, many work in restaurants or customer service fields; 15 percent seniors with average age of 65 North Springs Estates LIHTC Tenants are mostly local families from Orange and Seminole counties, majority work in grocery stores and as waitresses/waitors; one senior tenant Oviedo Town Centre LIHTC Mix of families including single parent hh's primarily from the Oviedo area; 10-15% seniors with average age of 70 Chatham Pines Apartments Market Mixed tenancy; 25% seniors with an average age of 70 Legends Winter Springs Market Mostly families; 10-15% seniors with average age of 65-75; 50% out of state Newport Colony Market Could not disclose. Oviedo Grove Apartments Market Tenants are mostly local families from Oviedo with a variety of occupations; less than 10% seniors Tuskawilla Town Center Market Families from Winter Springs and Orlando. TENANTS WITH VOUCHERS Comparable Property Type Housing Choice Voucher Tenants Town Parke Apartments LIHTC N/A Castlewood LIHTC 10% Covenant On The Lakes LIHTC 10% Loma Vista Apartments LIHTC 3% Mystic Cove Apartments LIHTC 3% North Springs Estates LIHTC 50% Oviedo Town Centre LIHTC 2% Chatham Pines Apartments Market 0% Legends Winter Springs Market 0% Newport Colony Market 0% Oviedo Grove Apartments Market 0% Tuskawilla Town Center Market 0% The majority of the comparables reported tenancy consisting of small families from the Orange and Seminole counties. At least 80 percent of the units at the Subject will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. Based on overall market data, we do not expect the Subject to rely on vouchers for a substantial portion of its tenant base. Absorption Two comparables reported absorption information. Absorption information was not available for Covenant on the Lakes, the one age-restricted LIHTC comparable. Oviedo Town Centre opened in March 2008 and was stabilized by December 2008, for an absorption rate of 26 units per month. The manager of Oviedo Town Centre indicated demand has been strong for affordable housing in the area. The manager of Castlewood, a LIHTC property, indicated that demand has decreased over the last year due to declining economic conditions. Tuskawilla Town Center opened in February Novogradac & Company LLP 65

70 Town Parke Apartments Phase I Winter Springs, Florida Market Study 2009 and the property reached stabilized occupancy in September 2010, which equates to an absorption rate of two units per month. We believe the asking rents at this property are overstated. Based on the current economic conditions, we anticipate the absorption rate for the Subject would be lower than Oviedo Town Centre. Thus, we believe an absorption rate of nine to ten units per month, or a pace of 10 to 12 months at the lower rents. Turnover The following table illustrates reported turnover for the comparable properties. TURNOVER Property name Rent Structure Turnover 32% Covenant On 10% Loma Vista 60% Mystic Cove 42% North Springs 30% Oviedo 22% Chatham Pines Apartments Market 54% Legends Winter Springs Market 44% Newport Colony Market 24% Oviedo Grove Apartments Market 40% Tuskawilla Town Center Market 12% Average Turnover 33% As the table illustrates, the Subject s market demonstrates moderately high turnover rates. The comparable properties that were able to report turnover indicated turnover rates of 10 to 50 54, with an average of 33 percent. Management at comparable properties reported an increase in turnover rates over the past year due to the current recession. Covenant on the Lakes, an age-restricted LIHTC property, reported the lowest turnover rate of 10 percent. Based on data from the comparable LIHTC properties, with greatest weight on the age-restricted comparable, we anticipate that the Subject will experience turnover of 20 percent or less. Vacancy Levels The following table summarizes overall weighted occupancy levels at the surveyed properties. Novogradac & Company LLP 66

71 Town Parke Apartments Phase I Winter Springs, Florida Market Study OVERALL VACANCY Property name Rent Structure Total Units Vacant Units Vacancy Rate % Covenant On % Loma Vista % Mystic Cove % North Springs % Oviedo % Chatham Pines Apartments Market % Legends Winter Springs Market % Newport Colony Market % Oviedo Grove Apartments Market % Tuskawilla Town Center Market % Total 2, % *Denotes LIHTC Senior Property The overall vacancy rate in the market is considered reasonable based on current economic conditions. Overall vacancy ranges from zero to 8.2 percent, averaging 2.1 percent. The overall vacancy in the market is considered strong compared to other areas of Florida that have been severely affected by the national recession. The average vacancy rate of LIHTC properties is 1.9 percent and the average vacancy rate of the market rate comparables is 2.4 percent. Oviedo Town Centre, the most recently completed LIHTC property, has the lowest vacancy rate in the market and is the only property that offers 33 and 60 percent AMI units, which likely helps the property maintain a higher than average occupancy rate. The Subject will offer units at 33 and 60 percent AMI as well as market rate units. Covenant on the Lakes, an age-restricted LIHTC property, is maintaining the highest vacancy rate of 8.2 percent. A total of 94 units at the Subject, or 87 percent, are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that onebedroom units are in highest demand and the majority of vacant units are two-bedroom units. As an age-restricted mixed income property, we would anticipate the Subject would maintain a vacancy rate of seven percent or lower at the aforementioned lower rents. Concessions The following table illustrates concessions offered by comparable properties. Novogradac & Company LLP 67

72 Town Parke Apartments Phase I Winter Springs, Florida Market Study CONCESSIONS Comparable Property Type Concessions Offered Castlewood LIHTC None Covenant On The Lakes LIHTC None Loma Vista Apartments LIHTC None Mystic Cove Apartments LIHTC None North Springs Estates LIHTC None Oviedo Town Centre LIHTC None Chatham Pines Apartments Market Reduced rents. Legends Winter Springs Market One month free. Newport Colony Market $150 off of the first month's rent. Oviedo Grove Apartments Market None Tuskawilla Town Center Market $500 off of available two-bedroom units. None of the comparable LIHTC properties are currently offering concessions. Four of the market rate comparable properties are currently offering concessions. Oviedo Town Centre is the most recently constructed property and will be the most similar to the Subject in terms of age and condition and income restrictions. The property manager of Oviedo Town Centre indicated it has not been necessary to offer concessions in order to have a high occupancy. We anticipate the Subject may need to offer concessions in order to assist in the initial absorption phase, primarily for the two-bedroom units, but once stabilized will not likely need to offer concessions as part of a long term marketing strategy. Waiting Lists Oviedo Town Centre is the only comparable that has a waiting list. According to the manager, there are 30 households on the waiting list for both the 33 percent and 60 percent AMI units. As an agerestricted property, we do not anticipate the Subject will maintain a waiting list for its units at 60 percent of the AMI. A short waiting list may be maintained for units restricted to 33 percent of the AMI. Rental Rate Increases The following table illustrates concessions offered by comparable properties. RENT GROWTH Comparable Property Rent Structure Rent Growth None Covenant On None Loma Vista Decreased 1% Mystic Cove Increase 2%-4% North Springs Increased 2% Oviedo @33% Decreased Increased 1% Chatham Pines Apartments Market Increased 1.6% in three-bedrooms Legends Winter Springs Market None Newport Colony Market Increased 3.5% to 13.5% in one and two-bedrooms Oviedo Grove Apartments Market Decreased 3.2%; Increased 3% to 9.5% Tuskawilla Town Center Market Decreased $300 Novogradac & Company LLP 68

73 Town Parke Apartments Phase I Winter Springs, Florida Market Study Four of the comparables reported modest rent growth over the past year. Based on the current market conditions and the lack of rental rate increases in the market over the past year, we do not anticipate the Subject will experience rent growth until the economy recovers from the current recessions and then it will be constrained by increases in AMI. Most Similar Properties The following table ranks the amenities, location, age, and unit size of the properties surveyed as inferior, slightly inferior, similar, slightly superior, and superior. This will provide us with an overall picture of the market perception of the comparable properties in relation to the Subject. Property Number** Property Name Type Property Amenities Unit Features Location Age / Condition Unit Size Overall Comparison* 1 Castlewood LIHTC Similar Similar Slightly Slightly Slightly 5 Superior Inferior Superior 2 Covenant on the LIHTC Senior Similar Superior Slightly Slightly Inferior 0 Lakes Superior Inferior 3 Loma Vista LIHTC Similar Similar Slightly Slightly Slightly 5 Superior Inferior Superior 4 Mystic Cove LIHTC Similar Similar Slightly Slightly Slightly 5 Superior Inferior Superior 2 North Springs LIHTC Inferior Inferior Inferior Slightly Slightly -30 Estates Inferior Superior 3 Oviedo Town LIHTC Similar Similar Slightly Similar Slightly 10 Centre Superior Superior 4 Chatham Pines LIHTC Slightly Similar Slightly Slightly Slightly 0 Inferior Superior Inferior Superior 5 Legends LIHTC Similar Similar Slightly Slightly Slightly 5 Superior Inferior Superior 6 Newport Colony Market Similar Similar Slightly Slightly Slightly 5 Superior Inferior Superior 7 Oviedo Grove Market Similar Slightly Slightly Similar Slightly 15 Superior Superior Superior 8 Tuskawilla Town Center Market Slightly Superior Slightly Superior Similar Similar Slightly Superior 15 *Inferior=-10; slightly inferior=-5, similar=0, slightly superior=5, superior=10. LIHTC Comparison- Most Similar Overall, several of the stabilized comparable properties are similar to the Subject. Oviedo Town Centre is considered most similar to the Subject in terms of location and condition and Covenant on the Lakes is considered most similar to the Subject based upon its age-restricted tenancy. Covenant on the Lakes is an age-restricted LIHTC property that offers one and two -bedroom units at 30 and 60 percent of the AMI. All rents are set below the maximum allowable level. We believe the Subject should achieve rental rates slightly above this property based on the following: 1. Covenant on the Lakes offers a superior in-unit amenities package since it includes pull cords and hand rails in each unit. The Subject offers larger unit sizes in comparison to Covenant on the Lakes. 2. Covenant on the Lakes, the only age-restricted property included as a comparable, is exhibiting the highest vacancy rate of 8.2 percent. Covenant on the Lakes is achieving rents below the maximum allowable levels. Novogradac & Company LLP 69

74 Town Parke Apartments Phase I Winter Springs, Florida Market Study 3. Covenant on the Lakes was constructed in 2006 and the Subject will be in slightly superior condition upon completion. 4. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. Therefore, we believe that the Subject s proposed two-bedroom rents appear overstated when compared to Covenant on the Lakes. Oviedo Town Centre is a family LIHTC property that offers one, two, and three-bedroom units at 33 and 60 percent of the AMI. All rents are set at the maximum allowable level. We believe the Subject should achieve rental rates below to this property based on the following: 1. Oviedo Town Centre offers a similar in-unit and common amenity package, unit sizes when compared to the Subject. However, the property offers in-unit washers and dryers, which will be available for a charge at the Subject. 2. Oviedo Town Centre is exhibiting a low vacancy rate of zero percent with a waiting list and is achieving maximum rents. 3. Oviedo Town Centre was constructed in 2008 and is in excellent condition, similar to the anticipated condition of the completed Subject. Therefore, the Subject s proposed two-bedroom rents appear slightly overstated when compared to Oviedo Town Centre. Reasonability of Rents The following table is a comparison of the Subject s and comparable properties rents. For the purposes of this market study, Base Rents are the actual rents quoted to the tenant, and are most frequently those rents that potential renters consider when making a housing decision. Net rents are rents adjusted for the cost of utilities (adjusted to the Subject s convention) and are used to compensate for the differing utility structures of the Subject and the comparable properties. Net rents represent the actual costs of residing at a property, and help to provide an apples-to-apples comparison of rents. Additionally, it is important to note that we compared to concessed rent levels at the comparable properties to insure rents are not overstated and are reflective of actual market conditions. The following table illustrates the Subject s proposed 33 percent rents compared to the 33 percent rents at the comparable properties. LIHTC Rent Comparison Property Name 1BR 2BR 3BR Town Parke Apartments (Subject) $260 $312 $342 LIHTC Maximum (Net) $264 $317 $347 Oviedo Town Centre $272 $328 $366 Average (excluding Subject) $272 $328 $366 Oviedo Town Centre is the only comparable that offers 33 percent AMI units and their rents appear higher than the maximum allowable level which is likely due to a differing utility allowance. The 33 percent AMI rents at Oviedo Town Centre are set at the maximum allowable level and are 100 percent occupied with 30 households on the waiting list. Based on the performance of Oviedo Town Novogradac & Company LLP 70

75 Town Parke Apartments Phase I Winter Springs, Florida Market Study Centre, we believe the 33 percent AMI rents are achievable. The proposed rents at 33 percent of the AMI will be the lowest in the immediate market. The following table illustrates the Subject s proposed 60 percent rents compared to the 60 percent rents at the comparable properties. LIHTC Rent Comparison Property Name 1BR 2BR 3BR Town Parke Apartments (Subject) Proposed $568 $681 $768 Town Parke Apartments (Subject) NOVOCO RECOMMENDED $568 $635 $768 LIHTC Maximum (Net) $575 $690 $778 Oviedo Town Centre $583 $701 $797 Loma Vista Apartments $582 $691 $792 Mystic Cove Apartments $585 $693 $790 Castlewood $591 $705 $802 North Springs Estates N/A N/A $707 Covenant On The Lakes* $579 $691 N/A Average (excluding Subject) $584 $696 $778 *LIHTC Senior property The Subject s proposed 60 percent rents are set slightly below the maximum allowable level. The rents at Oviedo Town Centre and Castlewood appear to be above than the maximum allowable level, respectively. However, both reported to be at the maximum allowable level. This difference is likely due to differing utility allowances. At least 80 percent of the Subject s units will be required to be occupied by at least one person 55 years of age or older. The remaining 20 percent of the housing can be rented by households without a household member that is 55 years of age or older. The proposed Subject will be most similar to Covenant on the Lakes and Oviedo Town Centre. The proposed Subject lacks pull cords and hand rails, which are offered at Covenant on the Lakes. The proposed Subject will have a high concentration of two-bedroom units. Covenant on the Lakes reported the majority of vacant units are two-bedroom units. According to demographic information, the majority of senior renters consist of one person households. Management at the comparable family LIHTC properties suggested that there was a need for senior affordable housing in the Winter Springs area, primarily for one-bedroom units. It is evident that where seniors have the options of two-bedroom units they still choose the one-bedroom units. We believe that this is showing the preference for one-bedroom units and the pricing pressures. Based upon the market data, we believe the Subject s proposed 60 percent AMI one-bedroom rents are achievable based on the performance of Covenant on the Lakes and Oviedo Town Centre. However, due to the lack of demand for age-restricted two-bedroom units in the market, we recommend lowering the two-bedroom rents at 60 percent of the AMI from $681 to $635. This recommended two-bedroom rent amount is $67 above the concluded one-bedroom 60 percent of the AMI rents. There is no precedent for the amount of the discount due to a lack of age-restricted properties with such a large concentration of two-bedroom units. The following table summarizes our concluded achievable age-restricted LIHTC rents at 60 percent of the AMI in comparison to the developer s proposed LIHTC rents at 60 percent of the AMI. Novogradac & Company LLP 71

76 Town Parke Apartments Phase I Winter Springs, Florida Market Study DEVELOPER PROPOSED LIHTC RENTS COMPARED TO NOVOGRADAC RECOMMENDED LIHTC RENTS - 60% AMI Proposed 60% AMI Rents Recommended 60% AMI Rents $ Unit Type Differential 1Br/1Ba $568 $568 $0 0% 2Br/2Ba $681 $635 -$46-7% 3Br/2Ba $768 $768 $0 0% Percent Differential We placed the achievable two-bedroom rents at 60 percent of the AMI between the one and twobedroom rents at Covenant on the Lakes, the one age-restricted comparable property, to entice both current one and two-bedroom renters into the Subject. Several family properties reported senior tenants in their one-bedroom units. The one-bedroom rents at Covenant on the Lakes are $579 and the two-bedroom rents are $691, following adjustments for utilities. The recommended two-bedroom rents of $635 are appropriately priced between the one and two-bedroom rents to reflect the benefit of the second bedroom. Since most senior households are on a fixed income, their discretionary spending is typically limited. Therefore, the price differential for the Subject s two-bedroom units cannot be too extreme. Therefore, we recommend lowering the two-bedroom 60 percent AMI rents to $635. Achievable Market Rents Based on the quality of the surveyed comparable properties and the anticipated quality of the proposed Subject, we conclude that the Subject s rental rates are below the achievable market rates for the Subject s area. The following table shows both market rent comparisons and achievable market rents. In cases where there is more than one floor plan at a comparable property, we chose the unit type most similar. Subject Comparison to Market Rents Unit Type Subject Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 33% AMI $260 $696 $969 $806 $700 63% 2 33% AMI $312 $856 $1,514 $1,071 $819 62% 3 33% AMI $342 $1,106 $1,498 $1,227 $947 64% Unit Type Subject (Novoco Recommended) Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 1 60% AMI $568 $696 $969 $806 $700 19% 2 60% AMI $635 $856 $1,514 $1,071 $819 22% 3 60% AMI $768 $1,106 $1,498 $1,227 $947 19% Unit Type Subject Surveyed Min Surveyed Max Surveyed Average Achievable Market Rents Subject Rent Advantage 2 BR - Market Rate $819 $856 $1,514 $1,071 $819 0% 3 BR - Market Rate $947 $1,106 $1,498 $1,227 $947 0% The Subject s proposed market rents are lower than the rents at all of the market rate comparables and are achievable. We believe the proposed market rents are achievable despite the unique unit mix and tenancy. The Subject will be similar to the market rate comparables in terms of in-unit amenities and slightly inferior to similar in terms of common area amenities. The Subject will be in excellent condition upon completion and superior to the comparables in terms of age and condition. The Subject will be most comparable with Tuskawilla Town Center and Legends Winter Springs, which are located approximately 1.8 miles and 1.6 miles from the Subject, respectively. Management at Legends Winter Springs reported 10 to 15 percent of their tenants are seniors and management at Tuskawilla Town Center was unwilling to provide information regarding the senior tenancy at the property. Both properties have larger unit sizes than the Subject. Tuskawilla Town Novogradac & Company LLP 72

77 Town Parke Apartments Phase I Winter Springs, Florida Market Study Center opened in February 2009 and just recently completed the initial absorption stage. Tuskawilla Town Center offers an elevator, similar to the proposed Subject. We believe the asking rents at Tuskawilla Town Center are overstated, as evidenced by the slow absorption of the property. We anticipate the three-bedroom units will be occupied by non-age-restricted tenants. We believe the Subject could achieve rental rates similar to Legends Winter Springs. The achievable market rents provide a rental advantage of 19 to 64 percent over the concluded 33 and 60 percent AMI units. Summary Evaluation of the Proposed Project Based upon our market research, demographic calculations and analysis, we believe there is moderate demand in the marketplace for the Subject. There is no precedent in the market for an agerestricted development with such a large concentration of two-bedroom units and three-bedroom units, such as the Subject with 87 percent two-bedroom units. In addition, the mixed tenancy, with 80 percent restricted to seniors and 20 percent without age-restrictions, is unique in the market as well. Local market participants have indicated that the majority of demand for age-restricted LIHTC units is for one-bedroom units. We are concerned that there may not be sufficient demand for the Subject s two-bedroom units. A competitive advantage generated by lowering rents below competitive units is necessary for the Subject to reach stabilization. We recommend lowering the two-bedroom rents at 60 percent of the AMI from $681 to $635. The Subject offers a total of six, three-bedroom units. We believe the proposed rents for the six, three-bedroom units are reasonable for the 20 percent of units that are not age-restricted. We recommend no additional major changes to the development scheme. Primary strengths of the Subject will be age/condition and that it will be a mixed income property. The Subject s one, two and three-bedroom unit sizes will be smaller than the surveyed average. However, the Subject s unit sizes are competitive with the one age-restricted comparables unit sizes which are smaller than the proposed unit sizes. Overall, as an age-restricted property, the Subject should be competitive in terms of unit sizes. As an age-restricted development, we recommend the addition of pull cords and hand rails to the in-unit amenities package, if feasible. We recommend the addition of social and recreational programs, transportation and medical services through thirdparty service providers targeted to seniors, if feasible. We believe a weakness of the Subject development is the high concentration of two-bedroom units for an age-restricted development. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are two-bedroom units. The Subject will offer 10 percent of its units at 33 percent AMI and market, which increases demand and decreases potential impact on existing properties. Based on our analysis, there is demand for the Subject at our concluded rents, and we also believe the concluded rents offer significant value in the market. The proposed Subject would satisfy the need for affordable housing, both senior and family, in Seminole County. Novogradac & Company LLP 73

78 DEMAND ANALYSIS

79 Town Parke Apartments Phase I Winter Springs, Florida Market Study DEMAND ANALYSIS Introduction Town Parke Apartments Phase I is a proposed LIHTC development, and income limitations will restrict eligibility. We calculated the number of income-eligible residents in this section of the analysis. LIHTC rents are based upon a percentage of the AMI, adjusted for household size and utilities. HUD estimates the relevant income levels, with annual updates. Rents are calculated assuming that the maximum net rent a household will pay is 35 percent of its income at the appropriate AMI levels. Household size is assumed to be 1.5 persons per bedroom for LIHTC rent calculation purposes. Additionally HUD assumes that one-person households are accommodated in one-bedroom units. For LIHTC income purposes, the actual size of the household is used. To assess the likely number of tenants in the market area eligible to live in the Subject, we used Census information as provided by ESRI Business Information Solutions. Primary Market Areas Defined The PMA includes the area bound by Lake Jessup and Shepard Road to the north, the Central Florida Greeneway Toll Road to the east, Red Bug Lake Road, East Semoran Boulevard, and East Altamonte Drive to the south, and Interstate 4 to the west. This area was defined based on interviews with local market participants familiar with affordable housing. We believe the Subject will have some leakage from outside the PMA. Eighty percent of the Subject s tenants are expected to hail from the PMA; demand estimates will be adjusted to reflect the potential for leakage. Novogradac & Company LLP 75

80 Town Parke Apartments Phase I Winter Springs, Florida Market Study INCOME-ELIGIBLE CALCULATIONS To establish the number of income-eligible potential tenants for the Subject, the calculations are as follows: First, we estimate the Subject s minimum and maximum income levels for the proposed LIHTC project. HUD determines maximum income guidelines for tax credit properties, based on the AMI. For Seminole County, FL, the AMI is $60,900 for a four-person household. Minimum income levels were calculated based on the assumption that lower-income families should pay no more than 35 percent of their income to rent. Often, lower-income seniors pay a higher percentage of gross income toward housing costs. Therefore, we used 40 percent for LIHTC calculations. Therefore, we used 35 percent for LIHTC calculations. Maximum income levels for the market rate units are based upon 80 percent of the AMI. Secondly, we illustrate the household population segregated by income band in order to determine those who are income-qualified to reside in the Subject property. This income distribution was illustrated previously in the demographic analysis section of this report. Senior households are assumed to have one or two persons. Third, we combine the allowable income range with the income distribution analysis in order to determine the number of potential income-qualified households. In some cases the LIHTC incomeeligible band overlaps with more than one census income range. In those cases, the prorated share of more than one census range will be calculated. This provides an estimate of the total number of households that are income-eligible. This also derives an estimate of the percentage of the households that are income-eligible, illustrated by AMI threshold. Novogradac & Company LLP 76

81 Town Parke Apartments Phase I Winter Springs, Florida Market Study DEMAND ANALYSIS ONE - CAPTURE RATE ANALYSIS BY UNIT TYPE In order to determine demand for the proposed market mix, we also analyzed the demand capture rates expected at the Subject by bedroom type. This analysis illustrates demand for the 33 and 60 percent of the AMI levels and market rate units. The by-unit-type breakdown illustrates an ample level of demand at the 33 and 60 percent of AMI levels and market rate units when considered on a by-bedroom basis. The capture rates illustrated are low and indicative of adequate demand. We have not adjusted for leakage outside of the PMA. The distribution of households by unit type is dependent on the following assumptions. HOUSEHOLD DISTRIBUTION 80% Of one-person households in 1BR units 20% Of two-person households in 1BR units 20% Of one-person households in 2BR units 80% Of two-person households in 2BR units 60% Of three-person households in 2BR units 40% Of three-person households in 3BR units 70% Of four-person households in 3BR units Novogradac & Company LLP 77

82 Town Parke Apartments Phase I Winter Springs, Florida Market Study PMA INCOME DISTRIBUTION 2010 Income Cohort Total Renter Households 33% AMI 60% AMI Unrestricted All Units cohort overlap % in cohort # in cohort cohort overlap % in cohort # in cohort cohort overlap % in cohort # in cohort cohort overlap % in cohort # in cohort $0-9, $10,000-19, , % 259 6, % 259 $20,000-29, , % 422 1, % 57 9, % 422 $30,000-39, , % 78 9, % 250 9, % 250 $40,000-49, , % 100 4, % 100 $50,000-59, $60,000-74, $75,000-99, $100, Total 2, % % % % 1,031 Minimum Allowable Income INCOME LIMITS Maximum Allowable Income Minimum Allowable Income Maximum Allowable Income Minimum Allowable Income Maximum Allowable Income Unit Type 33% AMI 60% AMI Unrestricted 1BR $11,250 $14,190 $20,490 $25,800 N/A N/A 2BR $13,500 $16,203 $24,570 $29,400 $28,710 $39,280 3BR $15,630 $18,216 $28,410 $33,120 $33,780 $44,160 The table above demonstrates that there are a total of 1,031 income-eligible senior 55+ renter households in the PMA. The Subject would need to capture 108, or 10.4 percent, of these senior renter households. Novogradac & Company LLP 78

83 Town Parke Apartments Phase I Winter Springs, Florida Market Study 33% of AMI PROJECTED RENTER HOUSEHOLD DEMAND BY BEDROOM TYPE Renter Household Distribution 2010 Renter Household Size Distribution Total Number of Renter Households 1 person 51.5% 1,081 2 persons 32.9% persons 8.3% persons 3.9% persons 3.4% 71 Total 100.0% 2,099 Income-Qualified Renter Demand Total Number of Renter Households % Income-Qualified Renter Households Number Qualified Renter Households 1 person 1,081 x 12.4% persons 691 x 12.4% 85 3 persons 175 x 12.4% 22 4 persons 82 x 12.4% persons 71 x 12.4% 9 Total 2, Projected Renter Household Demand by Bedroom Size Number of Qualified Renter Households 1BR 124 2BR 108 3BR 16 Total 248 Capture Rate Analysis - 33% AMI Developer's Unit Mix Capture Rate 1BR % 2BR % 3BR % Total/Overall % Adjusted for Leakage from Outside of the PMA 20% 1BR % 2BR % 3BR % Total/Overall % Novogradac & Company LLP 79

84 Town Parke Apartments Phase I Winter Springs, Florida Market Study 60% of AMI PROJECTED RENTER HOUSEHOLD DEMAND BY BEDROOM TYPE Renter Household Distribution 2010 Renter Household Size Distribution Total Number of Renter Households 1 person 51.5% 1,081 2 persons 32.9% persons 8.3% persons 3.9% persons 3.4% 71 Total 100.0% 2,099 Income-Qualified Renter Demand Total Number of Renter Households % Income-Qualified Renter Households Number Qualified Renter Households 1 person 1,081 x 23.8% persons 691 x 23.8% persons 175 x 23.8% 42 4 persons 82 x 23.8% persons 71 x 23.8% 17 Total 2, Projected Renter Household Demand by Bedroom Size Number of Qualified Renter Households 1BR 239 2BR 208 3BR 30 Total 478 Capture Rate Analysis - 60% AMI Developer's Unit Mix Capture Rate 1BR % 2BR % 3BR % Total/Overall % Adjusted for Leakage from Outside of the PMA 20% 1BR % 2BR % 3BR % Total/Overall % Novogradac & Company LLP 80

85 Town Parke Apartments Phase I Winter Springs, Florida Market Study Market Rate PROJECTED RENTER HOUSEHOLD DEMAND BY BEDROOM TYPE Renter Household Distribution 2010 Renter Household Size Distribution Total Number of Renter Households 1 person 51.5% 1,081 2 persons 32.9% persons 8.3% persons 3.9% persons 3.4% 71 Total 100.0% 2,099 Income-Qualified Renter Demand Total Number of Renter Households % Income-Qualified Renter Households Number Qualified Renter Households 1 person 1,081 x 19.4% persons 691 x 19.4% persons 175 x 19.4% 34 4 persons 82 x 19.4% persons 71 x 19.4% 14 Total 2, Projected Renter Household Demand by Bedroom Size Number of Qualified Renter Households 2BR 170 3BR 25 Total 194 Capture Rate Analysis - Unrestricted Developer's Unit Mix Capture Rate 2BR % 3BR % Total/Overall % Adjusted for Leakage from Outside of the PMA 20% 2BR % 3BR % Total/Overall % Novogradac & Company LLP 81

86 Town Parke Apartments Phase I Winter Springs, Florida Market Study DEMAND ANALYSIS TWO ANNUAL CAPTURE RATE ANALYSIS The second calculation derives an estimated market penetration rate based on per annum demand. This is an indication of the percentage of net demand penetration that the Subject must attract in order to reach stabilized occupancy. This measure essentially takes the available household demand searching for apartments in the market area and deducts competition in order to determine net demand available to the Subject. The table below outlines the analysis of this methodology. The annual demand for rental housing depends upon the following factors: 1. Existing households that live in the area but move to a new home: This phenomenon occurs because people are searching for better housing, more affordable housing, or housing in a desired location. The calculation begins by determining base level eligible demand in the year This is calculated by adding project household growth to the 2010 incomeeligible households. This is then adjusted by the percentage of renters within the PMA. To determine how many of these households will be looking for units, we multiply the number by the estimated turnover rate. The 2000 Census indicated that 32.1 percent of renter households in the Subject s market area pay 35 percent or higher of their annual wages towards housing costs and therefore were considered rent-overburdened; the percentage of the population that is rent overburdened varies slightly depending on which radius is used. Reported turnover in the market was high, indicating that a significant percentage of households are likely to move in the first year of the Subject s operation, particularly given the Subject s low rents. However, an estimated rent overburdened population of 32.1 percent reflects both severe rent overburden and movership in the market area. 2. Population change as a result of new senior households moving in or out of the area: This was previously calculated, in the estimated senior population increase from 2010 to Since the newly derived senior population will all be eligible, they are included directly into the annual demand estimate. 3. New additions to the LIHTC housing stock, discussed in the previous section of this report, are removed from our estimate of demand if applicable. There are no new LIHTC senior units proposed in the PMA. Therefore, we have not removed any units from our estimate of demand. This calculation derives an annual capture rate for the Subject. Total demand, both currently present and moving into the market, is adjusted for income eligibility and renter status. It is further adjusted by the number of units that are currently in a lease-up phase or under construction. The demand estimate remaining is the number of units that will be unsatisfied in the market without construction of the Subject. These unaccommodated units of demand will be forced to leave the market without additional housing construction. The penetration rate is the percentage of this demand that the Subject will capture. A number below 100 percent is a positive indicator and represents an expected absorption rate of less than one year. A number greater than 100 percent indicates an absorption pace longer than one year. Novogradac & Company LLP 82

87 Town Parke Apartments Phase I Winter Springs, Florida Market Study PMA ANNUAL DEMAND Calculation Primary Market Number of Senior Renter Households in ,099 Increase in Number of Senior Renter Households 390 Number of Senior Renter Households in ,489 Existing Demand Percentage of Total Senior Households that are Renter 15.9% Percentage of Income-Qualified Senior Renter Households 49.1% Number of Income-Qualified Senior Renter Households 1,031 Percentage of Rent-Overburdened 32.1% Existing Income-Qualified Senior Renter Household Turnover 331 New Income-Qualified Demand, Stated Annually Increase in Senior Renter Households per Annum 78 Percentage of Income-Qualified Senior Renter Households 49.1% New Rental Income Qualified Senior Households 38 Capture Rate Analysis Number of Units in Subject 108 Occupied Units at Subject With Vacancy of: 7% 100 Units Pre-Leased 0 Total Demand (Turnover and Growth) from within PMA 369 Portion Originating within PMA 90% Total Demand (Turnover and Growth) from within PMA 410 Less: Existing LIHTC Projects in Absorption Process (Number of Units) Total Demand after Competition (Turnover and Growth) 410 Yielded Annual Capture Rate of Available Demand in % The yielded capture rate is approximately 24.5 percent in the PMA. Conclusion The demand analysis illustrates demand for the Subject based on capture rates of income-eligible senior renter households. When viewing total income-eligible senior renter households the calculation illustrates the following capture rates: CAPTURE RATES 33% AMI 60% AMI Market PMA 3.56% 14.40% 4.53% The capture rates for PMA indicate that there is moderate income-eligible demand for the Subject s units restricted at 33 and 60 percent of the AMI and unrestricted market rate units. The majority of property managers reported that demand is originating primarily from the local Winter Springs area. The capture rates are considered reasonable. Novogradac & Company LLP 83

88 Town Parke Apartments Phase I Winter Springs, Florida Market Study On a by-bedroom basis, the capture rate for two-bedroom units at 60 percent of the AMI is high, at 28.8 percent, following adjustment for leakage. As discussed in the supply analysis, a total of 94 units, or 87 percent, are two-bedroom units. With consideration to the Subject s age-restrictions, we believe the concentration of two-bedroom units may be too high as an age-restricted development. The property manager at Covenant on the Lakes, the one age-restricted comparable property, reported that one-bedroom units are in highest demand and the majority of vacant units are twobedroom units. To provide another level of analysis, we removed the households from the income-eligible renter demand pool that are currently suitably housed elsewhere in the PMA. We conducted an annual demand analysis, which is based on new income-eligible renter households moving into the area (in the Subject s first year of operation only) and those income-eligible renter households that are rentoverburdened (paying over 35 percent of income to living costs) less the number of vacant LIHTC units in the PMA. This annual capture rate is 24.5 percent in the PMA. The capture rates indicate an expected absorption period of less than one year. The annual demand analysis is reflective of the demand for all of the Subject s 108 age-restricted units. The capture rates are reasonable and indicative of moderate demand in all areas of analysis. Novogradac & Company LLP 84

89 ADDENDUM A Assumptions and Limiting Conditions

90 ASSUMPTIONS AND LIMITING CONDITIONS 1. In the event that the client provided a legal description, building plans, title policy and/or survey, etc., the appraiser has relied extensively upon such data in the formulation of all analyses. 2. The legal description as supplied by the client is assumed to be correct and the author assumes no responsibility for legal matters, and renders no opinion of property title, which is assumed to be good and merchantable. 3. All encumbrances, including mortgages, liens, leases, and servitudes, were disregarded in this valuation unless specified in the report. It was recognized, however, that the typical purchaser would likely take advantage of the best available financing, and the effects of such financing on property value were considered. 4. All information contained in the report, which others furnished, was assumed to be true, correct, and reliable. A reasonable effort was made to verify such information, but the author assumes no responsibility for its accuracy. 5. The report was made assuming responsible ownership and capable management of the property. 6. The sketches, photographs, and other exhibits in this report are solely for the purpose of assisting the reader in visualizing the property. The author made no property survey, and assumes no liability in connection with such matters. It was also assumed there is no property encroachment or trespass unless noted in the report. 7. The author of this report assumes no responsibility for hidden or unapparent conditions of the property, subsoil or structures, or the correction of any defects now existing or that may develop in the future. Equipment components were assumed in good working condition unless otherwise stated in this report. 8. It is assumed that there are no hidden or unapparent conditions for the property, subsoil, or structures, which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering, which may be required to discover such factors. 9. The investigation made it reasonable to assume, for report purposes, that no insulation or other product banned by the Consumer Product Safety Commission has been introduced into the Subject premises. Visual inspection by the appraiser did not indicate the presence of any hazardous waste. It is suggested the client obtain a professional environmental hazard survey to further define the condition of the Subject soil if they deem necessary. 10. Any distribution of total property value between land and improvements applies only under the existing or specified program of property utilization. Separate valuations for land and buildings must not be used in conjunction with any other study or appraisal and are invalid if so used.

91 11. Possession of the report, or a copy thereof, does not carry with it the right of publication, nor may it be reproduced in whole or in part, in any manner, by any person, without the prior written consent of the author particularly as to value conclusions, the identity of the author or the firm with which he or she is connected. Neither all nor any part of the report, or copy thereof shall be disseminated to the general public by the use of advertising, public relations, news, sales, or other media for public communication without the prior written consent and approval of the appraiser. Nor shall the appraiser, firm, or professional organizations of which the appraiser is a member be identified without written consent of the appraiser. 12. Disclosure of the contents of this report is governed by the Bylaws and Regulations of the professional appraisal organization with which the appraiser is affiliated: specifically, the Appraisal Institute. 13. The author of this report is not required to give testimony or attendance in legal or other proceedings relative to this report or to the Subject property unless satisfactory additional arrangements are made prior to the need for such services. 14. The opinions contained in this report are those of the author and no responsibility is accepted by the author for the results of actions taken by others based on information contained herein. 15. Opinions of value contained herein are estimates. There is no guarantee, written or implied, that the Subject property will sell or lease for the indicated amounts. 16. All applicable zoning and use regulations and restrictions are assumed to have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report. 17. It is assumed that all required licenses, permits, covenants or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 18. On all studies, Subject to satisfactory completion, repairs, or alterations, the report and conclusions are contingent upon completion of the improvements in a workmanlike manner and in a reasonable period of time. 19. All general codes, ordinances, regulations or statutes affecting the property have been and will be enforced and the property is not Subject to flood plain or utility restrictions or moratoriums, except as reported to the appraiser and contained in this report. 20. The party for whom this report is prepared has reported to the appraiser there are no original existing condition or development plans that would Subject this property to the regulations of the Securities and Exchange Commission or similar agencies on the state or local level. 21. Unless stated otherwise, no percolation tests have been performed on this property. In making the appraisal, it has been assumed the property is capable of passing such tests so as to be developable to its highest and best use, as detailed in this report.

92 22. No in-depth inspection was made of existing plumbing (including well and septic), electrical, or heating systems. The appraiser does not warrant the condition or adequacy of such systems. 23. No in-depth inspection of existing insulation was made. It is specifically assumed no Urea Formaldehyde Foam Insulation (UFFI), or any other product banned or discouraged by the Consumer Product Safety Commission has been introduced into the appraised property. The appraiser reserves the right to review and/or modify this appraisal if said insulation exists on the Subject property. 24. Estimates presented in this report are assignable to parties to the development s financial structure.

93 ADDENDUM B Subject Property and Neighborhood Photographs

94 PHOTOGRAPHS OF THE SITE, NEIGHBORHOOD, & STREET SCENES Subject site Subject site Subject site Subject site Street view along SR 434 Street view along SR 434

95 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 New retail uses along Tuskawilla and SR 434 Tuskawilla Town Center Apartments in absorption

96 Available land for sale zoned Town Center Cross Seminole Trail New condo development in neighborhood Indian Trails Middle School in neighborhood Typical single-family home in neighborhood Typical single-family home in neighborhood

97 Mobil gas station on SR 434 and Tuskawilla McDonald s fast food restaurant in neighborhood

98 ADDENDUM C Matrices, Property Profiles, and Rent & Square Footage Table

99 SUMMARY MATRIX Units Comp # Project Distance Type / Built / Renovated Market / Subsidy Size Max Wait # % Restriction Rent (Adj.) Units Vacant Vacancy Rate (SF) Rent? List? N/A Town Parke Apartments Lowrise (age-restricted) 1BR / 1BA 1 $ no N/A Market SR 434 East Of Tuskawilla (4 stories) 1BR / 1BA 7 $ no N/A N/A Winter Springs, FL / n/a 2BR / 2BA 9 $ no N/A N/A Seminole County 2BR / 2BA 75 $ no N/A N/A 2BR / 2BA % Market $ n/a N/A N/A 3BR / 2BA 1 $342 1,206 no N/A N/A 3BR / 2BA 4 $768 1,206 no N/A N/A 3BR / 2BA % Market $947 1,206 n/a N/A N/A % N/A N/A % % 1 7 Castlewood Garden 1BR / $ yes No 1131 Castle Woods Terrace (2 stories) 2BR / 2BA 136 $705 1,150 yes No % Casselberry, FL / BR / 2BA 120 $802 1,350 yes No % Seminole County % % Covenant On The Lakes Lowrise (age-restricted) 1BR / 1BA 8 $ no No % South Rio Grande Avenue (3 stories) 1BR / 1BA N/A $ no No N/A N/A Orlando, FL / n/a 2BR / 2BA 8 $ no No % Orange County 2BR / 2BA N/A $ no No N/A N/A % % % % Loma Vista Apartments Garden 1BR / $ yes No 5200 Loma Vista Circle (3 stories) 2BR / 2BA 132 $691 1,079 yes No % Oviedo, FL / n/a 3BR / 2BA 88 $792 1,203 yes No % Seminole County 4BR / 3BA 32 $866 1,454 yes No % % % % % 4 8 Mystic Cove Apartments Garden 1BR / $ yes No 2780 Mystic Lake Drive (2 stories) 2BR / 2BA 112 $ yes No % Oviedo, FL / n/a 3BR / 2BA 16 $790 1,100 yes No % Seminole County 4BR / 3BA 24 $863 1,200 yes No % % % % % BR / $707 1,100 no No North Springs Estates Garden 1193 Merritt Street 1994 / n/a Altamonte Springs, FL Seminole County % % Oviedo Town Centre Garden % % 6 1BR / $ yes Yes 450 Fontana Circle (3 stories) 1BR / 1BA 65 $ yes Yes % Oviedo, FL / n/a 2BR / 2BA 1 $328 1,030 yes Yes % Seminole County 2BR / 2BA 44 $701 1,030 yes Yes % 3BR / 2BA 8 $366 1,214 yes Yes % 3BR / 2BA 68 $797 1,214 yes Yes % 4BR / 3BA 1 $400 1,465 n/a Yes % 4BR / 3BA 47 $874 1,465 yes Yes % % % % % miles Market Chatham Pines Apartments Midrise 1BR / 1BA Market $ n/a No 1020 Chatham Pines Circle 1991 / BR / 1BA % Market $ n/a No % Winter Springs, FL BR / 1BA % Market $ n/a No % Seminole County 2BR / 2BA % Market $978 1,100 n/a No % 3BR / 2BA % Market $1,118 1,150 n/a No % % % % % miles Market Legends Winter Springs Lowrise 1BR / 1BA Market $ n/a No 440 Courtney Springs Circle 2000 / n/a 2BR / 2BA % Market $964 1,138 n/a No % Winter Springs, FL BR / 2BA % Market $1,152 1,330 n/a No % Seminole County % % Newport Colony Various / 1BA (Garden) N/A N/A Market $ n/a No 0 N/A miles Market 1BR 1166 Pointe Newport Terrace (2 stories) 1BR / 1BA (Garden) N/A N/A Market $ n/a No 1 N/A Casselberry, FL / BR / 1BA (Garden) N/A N/A Market $ n/a No 8 N/A Seminole County 2BR / 2BA (Garden) N/A N/A Market $906 1,022 n/a No 3 N/A 2BR / 2BA (Townhouse) N/A N/A Market $1,056 1,130 n/a No 3 N/A 3BR / 2BA (Garden) N/A N/A Market $1,106 1,266 n/a No 2 N/A % % % % miles Market Oviedo Grove Apartments Garden 1BR / 1BA Market $ n/a No 1600 Oviedo Grove Circle 2000 / n/a 1.5BR / 1BA % Market $ n/a No % Oviedo, FL BR / 2BA % Market $1,019 1,145 n/a No % Seminole County 3BR / 2BA % Market $1,259 1,351 n/a No % % % % % miles Market Tuskawilla Town Center Lowrise 1BR / 1BA Market $ n/a No 1401 Blumberg Blvd / n/a 2BR / 2BA % Market $1,264 1,039 n/a No % Winter Springs, FL BR / 2BA % Market $1,282 1,044 n/a No % Seminole County 2BR / 2BA % Market $1,514 1,322 n/a No % 3BR / 2BA % Market $1,498 1,322 n/a No % % %

100 AMENITY MATRIX REPORT Mystic Cove North Apartments Springs Town Parke Apartments Castlewood Covenant On The Lakes Loma Vista Apartments Oviedo Town Centre Chatham Pines Legends Winter Newport Colony Oviedo Grove Estates Apartments Springs Apartments Comp # Subject Property Information Property Type Garden (4 stories) Garden (2 stories) Lowrise (agerestricted) (3 stories) Garden (3 stories) Garden (2 stories) Garden Garden (3 stories) Midrise Lowrise Various (2 stories) Garden Tuskawilla Town Center Year Built / Renovated / / / Market Market Market Market Market Market In-Unit Amenities Balcony/Patio yes no yes no yes no yes yes yes yes yes yes Blinds yes yes yes yes yes yes yes yes yes yes yes yes Cable/Satellite/Internet yes no no no no no no no no no yes no Carpeting yes yes yes yes yes yes yes yes yes yes yes yes Central A/C yes yes yes yes yes yes yes yes yes yes yes yes Coat Closet yes no no yes yes no yes no no no no yes Dishwasher yes yes yes yes yes no yes yes yes yes yes yes Exterior Storage no no no yes no no no no no no yes no Ceiling Fan yes yes yes yes yes no yes yes no no yes yes Fireplace no no no no no no no no no yes no no Garbage Disposal yes yes yes yes yes no yes yes yes yes yes yes Hand Rails no no yes no no no no no no no no no Microwave no no no no no no no no no no yes yes Oven yes yes yes yes yes yes yes yes yes yes yes yes Pull Cords no no yes no no no no no no no no no Refrigerator yes yes yes yes yes yes yes yes yes yes yes yes Vaulted Ceilings no no no no no no no yes no no no no Walk-In Closet yes yes yes yes yes no yes no no no yes no Window A/C no no no no no no no no no no no yes Washer/Dryer no no no no no no yes no yes no yes yes Washer/Dryer hookup yes yes yes yes yes yes no yes no yes no no Property Amenities Basketball Court no yes no no no no no yes no yes yes no Business Center/Computer Lab no no yes yes yes no yes no no no yes no Car Wash yes yes no yes yes no no yes no no no no Carport no no no no no no no no no yes no no Clubhouse/Meeting Room/Community Room yes no yes no yes no yes no yes no no no Elevators yes no yes no no no no no no no no yes Exercise Facility yes yes yes yes yes no yes yes yes no yes yes Garage no no no no no yes no no yes no no no Jacuzzi no no no no no no no yes yes no no no Central Laundry no no no no no no no no no yes no no Non-shelter Services yes no no no no no no yes no no no no Off-Street Parking yes yes yes yes yes no yes yes yes yes yes yes On-Site Management yes yes yes yes yes no yes yes yes yes yes yes Picnic Area no yes no yes no no yes yes no yes yes no Playground no yes no yes yes no yes no no no no no Recreation Areas yes no no no no no no no no no no no Sauna no no no no no no no no no yes no no Swimming Pool yes yes yes yes yes no yes yes yes yes yes no Tennis Court no no no no yes no no no no yes yes no Volleyball Court no yes no yes no no no yes no yes no no Wi-Fi no no no no no no yes no no no no no Carport Fee N/A N/A N/A N/A N/A N/A N/A N/A N/A $25.00 N/A N/A Garage Fee N/A N/A N/A N/A N/A N/A N/A N/A $ N/A N/A N/A Services Adult Education no no no no yes no no no no no no no Afterschool Program no yes no yes yes no no no no no no no Security In-Unit Alarm no no no no no no no no yes no yes no Limited Access no no no no yes no yes no no no no yes Patrol no yes no yes yes no no no yes no yes no Perimeter Fencing no yes no yes yes no yes no no yes no no Video Surveillance no no no no no no no no no no yes no Premium Amenities Floor no no no no no no no no no yes no no View no no no no no no no no no yes no no Other Amenities Other Putting Green, Library washer/dryer - $35, cable - $45 n/a washer/dryer - $45, cable - $56 n/a n/a n/a n/a n/a n/a n/a n/a

101 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Castlewood Location Distance Units 304 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 1131 Castle Woods Terrace Casselberry, FL Seminole County 7 miles 6 2.0% Garden (2 stories) 1993 / 2003 N/A N/A N/A Sandpiper, Sunshadow Apartments Mixed tenancy; 15 percent seniors with an average age of Mellanie 32% N/A 10% One to two weeks None None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included not included not included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden $591 No 1 2.1% yes None (2 stories) 2 2 Garden (2 stories) 136 1,150 $705 No 3 2.2% yes None 3 2 Garden (2 stories) 120 1,350 $802 No 2 1.7% yes None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $591 $0 $591 $0 $591 2BR / 2BA $705 $0 $705 $0 $705 3BR / 2BA $802 $0 $802 $0 $802 Novogradac & Company LLP All Rights Reserved.

102 Castlewood, continued Amenities In-Unit Blinds Central A/C Ceiling Fan Oven Walk-In Closet Carpeting Dishwasher Garbage Disposal Refrigerator Washer/Dryer hookup Security Patrol Perimeter Fencing Services Afterschool Program Property Basketball Court Exercise Facility On-Site Management Playground Volleyball Court Car Wash Off-Street Parking Picnic Area Swimming Pool Premium None Other washer/dryer - $35, cable - Comments Management stated that occuapncy has increased since the first quarter of 2010, due to higher traffic in the summer months. Novogradac & Company LLP All Rights Reserved.

103 Castlewood, continued Trend Report Vacancy Rates 2Q07 1Q08 3.3% 4.9% 1Q10 8.9% 3Q10 2.0% 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $559 $0 $559 $ N/A $559 $0 $559 $ % $593 $24 $569 $ % $591 $0 $591 $591 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $668 $0 $668 $ N/A $668 $0 $668 $ % $708 $30 $678 $ % $705 $0 $705 $705 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $761 $0 $761 $ N/A $761 $63 $698 $ % $809 $34 $775 $ % $802 $0 $802 $802 Trend: Comments 2Q07 The property does accept Section 8 Tenants however, contact was not able to specify an exact number of tenants that were utilizing vouchers at this time. 1Q08 Contact stated that there is enough affordable housing to meet demand in this area. 1Q10 3Q10 The contact reported occupancy has steadily declined during the past year due to the slow economic conditions. According to management, there is demand in the market for affordable housing. Management stated that occuapncy has increased since the first quarter of 2010, due to higher traffic in the summer months. Novogradac & Company LLP All Rights Reserved.

104 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Covenant On The Lakes Location Distance Units 122 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 2214 South Rio Grande Avenue Orlando, FL Orange County 22.2 miles % Lowrise (age-restricted) (3 stories) 2006 / N/A N/A N/A N/A None identified average age; 20% working, but most on fixed incomes Islanna 10% 10 10% Two to three weeks None Waived application fee Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included included included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Lowrise $273 No 0 0.0% no None (3 stories) 1 1 Lowrise (3 stories) N/A 539 $608 No N/A N/A no None 2 2 Lowrise (3 stories) 2 2 Lowrise (3 stories) $324 No 0 0.0% no None N/A 760 $727 No N/A N/A no None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $273 $0 $273 -$29 $244 2BR / 2BA $324 $0 $324 -$36 Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $608 $0 $608 -$29 $579 2BR / 2BA $727 $0 $727 -$36 $691 Novogradac & Company LLP All Rights Reserved.

105 Covenant On The Lakes, continued Amenities In-Unit Balcony/Patio Carpeting Dishwasher Garbage Disposal Oven Refrigerator Washer/Dryer hookup Blinds Central A/C Ceiling Fan Hand Rails Pull Cords Walk-In Closet Security None Services None Property Business Center/Computer Lab Elevators Off-Street Parking Swimming Pool Clubhouse/Meeting Exercise Facility On-Site Management Premium None Other None Comments The concession includes a waived application fee. Management stated that one-bedroom units are more desirable. Management noted that the billiards are a selling point to many seniors. Current utility allowances are $63 for one-bedrooms and $85 for two-bedrooms. This property has a library and pool tables. Novogradac & Company LLP All Rights Reserved.

106 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Loma Vista Apartments Location Distance Units 380 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics 5200 Loma Vista Circle Oviedo, FL Seminole County 7.8 miles 3 0.8% Garden (3 stories) 2000 / N/A N/A N/A N/A Mystic Cove Mixed tenancy, primarily from the Oviedo area; percent seniors with average age of 65 Contact Name Phone Sarah Market Information Annual Turnover Rate 60% Units/Month Absorbed N/A HCV Tenants 3% Leasing Pace One week Annual Chg. in Rent Decreased 1% Concession None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- gas not included -- gas not included -- electric not included not included not included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden $582 No 1 0.8% yes None (3 stories) 2 2 Garden (3 stories) 132 1,079 $691 No 1 0.8% yes None 3 2 Garden (3 stories) 4 3 Garden (3 stories) 88 1,203 $792 No 1 1.1% yes None 32 1,454 $866 No 0 0.0% yes None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $582 $0 $582 $0 $582 2BR / 2BA $691 $0 $691 $0 $691 3BR / 2BA $792 $0 $792 $0 $792 4BR / 3BA $866 $0 $866 $0 $866 Novogradac & Company LLP All Rights Reserved.

107 Loma Vista Apartments, continued Amenities In-Unit Blinds Central A/C Dishwasher Ceiling Fan Oven Walk-In Closet Carpeting Coat Closet Exterior Storage Garbage Disposal Refrigerator Washer/Dryer hookup Security Patrol Perimeter Fencing Services Afterschool Program Property Business Center/Computer Lab Exercise Facility On-Site Management Playground Volleyball Court Car Wash Off-Street Parking Picnic Area Swimming Pool Premium None Other washer/dryer - $45, cable - Comments Management indicated a need for additional affordable housing in the area. Vacancy decreased by two percent since Novogradac & Company LLP All Rights Reserved.

108 Loma Vista Apartments, continued Trend Report Vacancy Rates 3Q09 4Q09 2.6% 5.3% 1Q10 2.9% 3Q10 0.8% 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $585 $0 $585 $ % $583 $0 $583 $ % $583 $33 $550 $ % $582 $0 $582 $582 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $696 $0 $696 $ % $692 $42 $650 $ % $692 $42 $650 $ % $691 $0 $691 $691 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $800 $0 $800 $ % $795 $42 $753 $ % $795 $0 $795 $ % $792 $0 $792 $792 4BR / 3BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $877 $0 $877 $ % $871 $0 $871 $ % $871 $0 $871 $ % $866 $0 $866 $866 Trend: Comments 3Q09 N/A 4Q09 The contact stated occupancy has remained high at this property during the past year despite the slow economy and struggling rental market. December is typically a slow time of year at the property, and the contact expects the vacancies to be filled in January. 1Q10 3Q10 The contact stated occupancy has remained high at this property during the past year despite the slow economy and a struggling rental market. There has been an increase in turnover during the past year from 25 percent to approximately 40 percent. Many tenants work at call centers or in healthcare. Management has not seen recovery from the recession to date. Management indicated a need for additional affordable housing in the area. Vacancy decreased by two percent since Novogradac & Company LLP All Rights Reserved.

109 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Mystic Cove Apartments Location Distance Units 184 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics 2780 Mystic Lake Drive Oviedo, FL Seminole County 8 miles 4 2.2% Garden (2 stories) 2003 / N/A 5/01/2003 5/01/2003 6/30/2004 Other sister properties, and Concord Management. Mostly from the local area, many work in restaurants or customer service fields; 15 percent seniors with average age of 65 Contact Name Phone Alexis Market Information Annual Turnover Rate 42% Units/Month Absorbed N/A HCV Tenants 3% Leasing Pace One to two weeks Annual Chg. in Rent Increase 2%-4% Concession None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- gas not included -- gas not included -- gas not included not included not included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden $585 No 1 3.1% yes None (2 stories) 2 2 Garden (2 stories) $693 No 2 1.8% yes None 3 2 Garden (2 stories) 4 3 Garden (2 stories) 16 1,100 $790 No 1 6.2% yes None 24 1,200 $863 No 0 0.0% yes None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $585 $0 $585 $0 $585 2BR / 2BA $693 $0 $693 $0 $693 3BR / 2BA $790 $0 $790 $0 $790 4BR / 3BA $863 $0 $863 $0 $863 Novogradac & Company LLP All Rights Reserved.

110 Mystic Cove Apartments, continued Amenities In-Unit Balcony/Patio Carpeting Coat Closet Ceiling Fan Oven Walk-In Closet Blinds Central A/C Dishwasher Garbage Disposal Refrigerator Washer/Dryer hookup Security Limited Access Patrol Perimeter Fencing Services Adult Education Afterschool Program Property Business Center/Computer Lab Clubhouse/Meeting Off-Street Parking Playground Tennis Court Car Wash Exercise Facility On-Site Management Swimming Pool Premium None Other None Comments Management identified a need for more affordable housing in the local area. This property stopped offering concessions in July of Concessions previously consisted of $500 off the first month for three-bedroom units and $600 off of four-bedroom units. Novogradac & Company LLP All Rights Reserved.

111 Mystic Cove Apartments, continued Trend Report Vacancy Rates 4Q09 1Q10 1.6% 2.7% 2Q10 2.7% 3Q10 2.2% 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $585 $0 $585 $ % $585 $0 $585 $ % $585 $0 $585 $ % $585 $0 $585 $585 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $694 $0 $694 $ % $694 $42 $652 $ % $694 $42 $652 $ % $693 $0 $693 $693 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $794 $42 $752 $ % $794 $42 $752 $ % $794 $42 $752 $ % $790 $0 $790 $790 4BR / 3BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $868 $50 $818 $ % $868 $50 $818 $ % $868 $50 $818 $ % $863 $0 $863 $863 Trend: Comments 4Q09 The property is offering $500 off the first month on the three bedroom units and $600 off on the four bedroom units. The overall rents increased between two and four percent in April but decreased less than one percent in November due to an adjustment in the utility allowance. 1Q10 The property is offering $500 off the first month on the three bedroom units and $600 off on the four bedroom units. The overall rents increased between two and four percent in April but decreased less than one percent in November due to an adjustment in the utility allowance. The contact noted there have been more applicants that are denied due to poor credit rating mainly due to previous rental history. 2Q10 N/A 3Q10 Management identified a need for more affordable housing in the local area. This property stopped offering concessions in July of Concessions previously consisted of $500 off the first month for three-bedroom units and $600 off of four-bedroom units. Novogradac & Company LLP All Rights Reserved.

112 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT North Springs Estates Location Distance Units 12 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 1193 Merritt Street Altamonte Springs, FL Seminole County 8.8 miles 0 0.0% Garden 1994 / N/A N/A N/A N/A None identified Tenants are mostly local families from Orange and Seminole counties, majority work in grocery stores and as waitresses/waitors; one senior tenant Watson Management 30% N/A 50% One month Increased 2% None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included included included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 3 2 Garden 12 1,100 $759 No 0 0.0% no None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 3BR / 2BA $759 $0 $759 -$52 $707 Amenities In-Unit Blinds Central A/C Refrigerator Carpeting Oven Washer/Dryer hookup Security None Services None Property Garage Premium None Other None Comments Management stated that there is a need for more affordable housing. Management noted that none of the households have previously owned homes. Novogradac & Company LLP All Rights Reserved.

113 North Springs Estates, continued Trend Report Vacancy Rates 3Q05 1Q08 0.0% 8.3% 1Q10 8.3% 3Q10 0.0% 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $709 $0 $709 $ % $725 $0 $725 $ % $760 $0 $760 $ % $759 $0 $759 $707 Trend: Comments 3Q05 1Q08 North Springs Estates is a LIHTC property and management indicates that they charge the maximum allowable level at 60% AMI. The address for the property is correct however it is the address for just one of the houses because each house has a different address. Management could not indicate any competitors in the surrounding area. Contact had no additional comments at this time. 1Q10 According to management, there is currently a demand in the market for affordable housing at lower income restriction levels. 3Q10 Management stated that there is a need for more affordable housing. Management noted that none of the households have previously owned homes. Novogradac & Company LLP All Rights Reserved.

114 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Oviedo Town Centre Location Distance Units 236 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 450 Fontana Circle Oviedo, FL Seminole County 4.8 miles 0 0.0% Garden (3 stories) 2008 / N/A N/A N/A N/A None Identified Mix of families including single parent hh's primarily from the Oviedo area; 10-15% seniors with average age of % 26 2% Within a Decreased None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- gas not included -- gas not included -- gas not included not included not included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden $272 Yes 0 0.0% yes None (3 stories) 1 1 Garden (3 stories) $583 Yes 0 0.0% yes None 2 2 Garden (3 stories) 2 2 Garden (3 stories) 3 2 Garden (3 stories) 3 2 Garden (3 stories) 4 3 Garden (3 stories) 4 3 Garden (3 stories) 1 1,030 $328 Yes 0 0.0% yes None 44 1,030 $701 Yes 0 0.0% yes None 8 1,214 $366 Yes 0 0.0% yes None 68 1,214 $797 Yes 0 0.0% yes None 1 1,465 $400 Yes 0 0.0% N/A None 47 1,465 $874 Yes 0 0.0% yes None Unit Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $272 $0 $272 $0 $272 2BR / 2BA $328 $0 $328 $0 $328 3BR / 2BA $366 $0 $366 $0 $366 4BR / 3BA $400 $0 $400 $0 Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $583 $0 $583 $0 $583 2BR / 2BA $701 $0 $701 $0 $701 3BR / 2BA $797 $0 $797 $0 $797 4BR / 3BA $874 $0 $874 $0 $874 Novogradac & Company LLP All Rights Reserved.

115 Oviedo Town Centre, continued Amenities In-Unit Balcony/Patio Carpeting Coat Closet Ceiling Fan Oven Walk-In Closet Blinds Central A/C Dishwasher Garbage Disposal Refrigerator Washer/Dryer Security Limited Access Perimeter Fencing Services None Property Business Center/Computer Lab Exercise Facility On-Site Management Playground Wi-Fi Clubhouse/Meeting Off-Street Parking Picnic Area Swimming Pool Premium None Other None Comments Management was unable to provide absorption information. Units restricted to 33 percent income decreased by 1.0 percentan units restricted to 60 percent income increased by 1.0 percent. Management stated there is a 30 household waitlist for the entire property, with the majority of households interested in the 33 percent income restricted units. Novogradac & Company LLP All Rights Reserved.

116 Oviedo Town Centre, continued Trend Report Vacancy Rates 4Q09 1Q10 3.0% 3.4% 2Q10 0.8% 3Q10 0.0% 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $275 $0 $275 $ % $275 $0 $275 $ % $275 $0 $275 $ % $272 $0 $272 $272 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $329 $0 $329 $ % $329 $0 $329 $ % $329 $0 $329 $ % $328 $0 $328 $328 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $372 $0 $372 $ % $372 $0 $372 $ % $372 $0 $372 $ % $366 $0 $366 $366 4BR / 3BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $400 $0 $400 $ % $400 $0 $400 $ % $400 $0 $400 $ % $400 $0 $400 $400 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $583 $0 $583 $ % $583 $0 $583 $ % $577 $0 $577 $ % $583 $0 $583 $583 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $698 $0 $698 $ % $698 $0 $698 $ % $693 $0 $693 $ % $701 $0 $701 $701 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $798 $0 $798 $ % $798 $0 $798 $ % $790 $0 $790 $ % $797 $0 $797 $797 4BR / 3BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $875 $0 $875 $ % $875 $0 $875 $ % $866 $0 $866 $ % $874 $0 $874 $874 Trend: Comments 4Q09 The proprety opened in March 2008 and was 90 percent leased by December There are different floor plans offered for each unit type, the square footage above represents an average of the floor plans. The waiting list has approximately 10 households for the units restricted at 33 percent of AMI. 1Q10 2Q10 3Q10 The contact reported strong demand for affordable housing in the area. There is a waiting list for the units restricted at 33 percent of AMI with approximately 15 applicants. According to management, there is a one to two year waiting list for all unit types. The 60 percent units have decreased slightly due to a utility allowance change. Management was unable to provide absorption information. Units restricted to 33 percent income decreased by 1.0 percentan units restricted to 60 percent income increased by 1.0 percent. Management stated there is a 30 household waitlist for the entire property, with the majority of households interested in the 33 percent income restricted units. Novogradac & Company LLP All Rights Reserved.

117 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Chatham Pines Apartments Location Distance Units 208 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 1020 Chatham Pines Circle Winter Springs, FL Seminole County 5.8 miles 0 0.0% Midrise 1991 / 2005 N/A N/A N/A Willow Spring, Newport Colony Mixed tenancy; 25% seniors with an average age of 70 Michawn Market 54% N/A 0% Two to four weeks Increased 1.6% in three-bedrooms Reduced rents Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included not included not included not included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Midrise $780 $81 Market No 0 0.0% N/A None 1 1 Midrise $850 $135 Market No 0 0.0% N/A None 2 1 Midrise $1,005 $156 Market No 0 0.0% N/A None 2 2 Midrise 32 1,100 $1,135 $176 Market No 0 0.0% N/A None 3 2 Midrise 24 1,150 $1,255 $156 Market No 0 0.0% N/A None Unit Mix Market Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $780 - $850 $81 - $135 $699 - $715 $19 $718 - $734 2BR / 1BA $1,005 $156 $849 $19 $868 2BR / 2BA $1,135 $176 $959 $19 $978 3BR / 2BA $1,255 $156 $1,099 $19 $1,118 Novogradac & Company LLP All Rights Reserved.

118 Chatham Pines Apartments, continued Amenities In-Unit Balcony/Patio Carpeting Dishwasher Garbage Disposal Refrigerator Washer/Dryer hookup Blinds Central A/C Ceiling Fan Oven Vaulted Ceilings Security None Services None Property Basketball Court Exercise Facility Non-shelter Services On-Site Management Swimming Pool Car Wash Jacuzzi Off-Street Parking Picnic Area Volleyball Court Premium None Other None Comments Management was unable to provice absorption data. Management anticpated an end to the current concessions during the month of September due to the decrease in vacancy. Novogradac & Company LLP All Rights Reserved.

119 Chatham Pines Apartments, continued Trend Report Vacancy Rates 3Q05 1Q08 1.9% 11.1% 1Q10 8.2% 3Q10 0.0% Trend: Market 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $650 - $710 $0 $650 - $710 $669 - $ N/A $685 - $745 $0 $685 - $745 $704 - $ % $780 - $850 $135 - $171 $645 - $679 $664 - $ % $780 - $850 $81 - $135 $699 - $715 $718 - $734 2BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $825 $0 $825 $ N/A $869 $0 $869 $ % $1,005 $176 $829 $ % $1,005 $156 $849 $868 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $915 $0 $915 $ N/A $929 $0 $929 $ % $1,135 $226 $909 $ % $1,135 $176 $959 $978 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $1,055 $0 $1,055 $1, N/A $1,050 $0 $1,050 $1, % $1,235 $136 $1,099 $1, % $1,255 $156 $1,099 $1,118 Trend: Comments 3Q05 The renovation in 2005 consisted of updating of roofs and fireplaces. The property does not accept Section 8 tenants. Management indicated that there has recently been a very high demand for private housing in the area and that many of the surrounding complexes have been switching to condominiums. Management indicated that last year the property turned over 145 units or 70% of its units. 1Q08 Contact stated the annual turnover rate is high due to high student population, relocation, house purchases, and loss of employment. 1Q10 3Q10 The contact reported an increase in skip outs and evictions due to the economic down turn in the past year. Typical occupancy has remained between 91 and 93 percent. Management was unable to provice absorption data. Management anticpated an end to the current concessions during the month of September due to the decrease in vacancy. Novogradac & Company LLP All Rights Reserved.

120 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Legends Winter Springs Location Distance Units 252 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 440 Courtney Springs Circle Winter Springs, FL Seminole County 1.6 miles 0 0.0% Lowrise 2000 / N/A N/A N/A N/A Golf View, Summer Club, Shadow Creek, Alvedo Grove Mostly families; 10-15% seniors with average age of 65-75; 50% out of state Michelle Market 44% N/A 0% Pre-leased None One month free Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included not included not included not included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Lowrise $915 $76 Market No 0 0.0% N/A None 2 2 Lowrise 152 1,138 $1,031 $86 Market No 0 0.0% N/A None 3 2 Lowrise 52 1,330 $1,236 $103 Market No 0 0.0% N/A None Unit Mix Market Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $915 $76 $839 $19 $858 2BR / 2BA $1,031 $86 $945 $19 $964 3BR / 2BA $1,236 $103 $1,133 $19 $1,152 Novogradac & Company LLP All Rights Reserved.

121 Legends Winter Springs, continued Amenities In-Unit Balcony/Patio Carpeting Dishwasher Oven Washer/Dryer Blinds Central A/C Garbage Disposal Refrigerator Security In-Unit Alarm Patrol Services None Property Clubhouse/Meeting Garage Off-Street Parking Swimming Pool Exercise Facility Jacuzzi On-Site Management Premium None Other None Comments Management was unable to provide absorption data. Managament stated that current concessions would not be available in October due to the unavailablity of units. Management identified a need for more affordable housing, as the wait list for subsidized housing in the area is around two years. Novogradac & Company LLP All Rights Reserved.

122 Legends Winter Springs, continued Trend Report Vacancy Rates 3Q05 1Q08 6.0% 0.0% 1Q10 6.0% 3Q10 0.0% Trend: Market 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $799 - $819 $0 $799 - $819 $818 - $ N/A $879 - $899 $0 $879 - $899 $898 - $ % $915 $76 $839 $ % $915 $76 $839 $858 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $909 - $929 $0 $909 - $929 $928 - $ N/A $996 - $1,016 $0 $996 - $1,016 $1,015 - $1, % $1,031 $86 $945 $ % $1,031 $86 $945 $964 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $1,089 - $1,099 $0 $1,089 - $1,099 $1,108 - $1, N/A $1,191 - $1,201 $0 $1,191 - $1,201 $1,210 - $1, % $1,236 $103 $1,133 $1, % $1,236 $103 $1,133 $1,152 Trend: Comments 3Q05 The property does not accept Section 8 tenants. 1Q08 1Q10 Contact stated that new management took over in December 2007, and changed the name to Legends Winter Springs. Contact was unable to provide an accurate annual turnover rate at this time. This property was f.k.a. Courtney Springs Apartments. The current occupancy rate is slightly above the typical rate of 92 percent during the past year. 3Q10 Management was unable to provide absorption data. Managament stated that current concessions would not be available in October due to the unavailablity of units. Management identified a need for more affordable housing, as the wait list for subsidized housing in the area is around two years. Novogradac & Company LLP All Rights Reserved.

123 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Newport Colony Location Distance Units 476 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors 1166 Pointe Newport Terrace Casselberry, FL Seminole County 9.3 miles % Various (2 stories) 1990 / 2004 N/A N/A N/A The Harbors at Lake Howell, Wilow Creek Tenant Characteristics Contact Name Phone Could not disclose. Mildrid Market Information Program Market Annual Turnover Rate 24% Units/Month Absorbed N/A HCV Tenants 0% Leasing Pace One to two weeks Annual Chg. in Rent Increased 3.5% to 13.5% in one and two- Concession $150 off first month or pro-rated Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included not included not included not included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden N/A 657 $690 $13 Market No 0 N/A N/A None (2 stories) 1 1 Garden (2 stories) N/A 832 $700 $13 Market No 1 N/A N/A None 2 1 Garden (2 stories) 2 2 Garden (2 stories) 2 2 Townhouse (2 stories) 3 2 Garden (2 stories) N/A 936 $850 $13 Market No 8 N/A N/A None N/A 1,022 $900 $13 Market No 3 N/A N/A None N/A 1,130 $1,050 $13 Market No 3 N/A N/A None N/A 1,266 $1,100 $13 Market No 2 N/A N/A None Unit Mix Market Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $690 - $700 $13 $677 - $687 $19 $696 - $706 2BR / 1BA $850 $13 $837 $19 $856 2BR / 2BA $900 - $1,050 $13 $887 - $1,037 $19 $906 - $1,056 3BR / 2BA $1,100 $13 $1,087 $19 $1,106 Novogradac & Company LLP All Rights Reserved.

124 Newport Colony, continued Amenities In-Unit Balcony/Patio Carpeting Dishwasher Garbage Disposal Refrigerator Blinds Central A/C Fireplace Oven Washer/Dryer hookup Security Perimeter Fencing Services None Property Basketball Court Central Laundry On-Site Management Sauna Tennis Court Carport Off-Street Parking Picnic Area Swimming Pool Volleyball Court Premium Floor View Other None Comments One-bedroom units increased from 4.5 percent to 9.5 percent and two bedroom units increased from 3.5 percent to 13.5 percent. Management suggested that there was enough affordable housing in the area to meet current demand. Novogradac & Company LLP All Rights Reserved.

125 Newport Colony, continued Trend Report Vacancy Rates 3Q05 1Q08 0.2% 8.4% 1Q10 8.0% 3Q10 3.6% Trend: Market 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $699 - $800 $0 $699 - $800 $718 - $ N/A $810 - $890 $101 - $111 $709 - $779 $728 - $ N/A $630 - $670 $0 $630 - $670 $649 - $ N/A $690 - $700 $13 $677 - $687 $696 - $706 2BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $855 $0 $855 $ N/A $980 $123 $857 $ N/A $750 $0 $750 $ N/A $850 $13 $837 $856 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $940 - $975 $0 $940 - $975 $959 - $ N/A $1,090 - $1,115 $136 - $139 $954 - $976 $973 - $ N/A $870 - $970 $0 $870 - $970 $889 - $ N/A $900 - $1,050 $13 $887 - $1,037 $906 - $1,056 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent N/A $1,120 $0 $1,120 $1, N/A $1,300 $0 $1,300 $1, N/A $1,100 $0 $1,100 $1, N/A $1,100 $13 $1,087 $1,106 Trend: Comments 3Q05 1Q08 The property does not accept Section 8 tenants. The property has two central laundry facilities, two swimming pools, two tennis courts, a jogging trail and a lake. Contact had no additional comments at this time. 1Q10 According to management, the property has removed concessions and permanently lowered rents; therefore, the decrease in rents was significant over the past year. Additionally, management stated that this property rarely get inquires about affordable housing. 3Q10 One-bedroom units increased from 4.5 percent to 9.5 percent and two bedroom units increased from 3.5 percent to 13.5 percent. Management suggested that there was enough affordable housing in the area to meet current demand. Novogradac & Company LLP All Rights Reserved.

126 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Oviedo Grove Apartments Location Distance Units 240 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics Contact Name Phone Market Information Program Annual Turnover Rate Units/Month Absorbed HCV Tenants Leasing Pace Annual Chg. in Rent Concession 1600 Oviedo Grove Circle Oviedo, FL Seminole County 7.8 miles 9 3.8% Garden 2000 / N/A N/A N/A N/A Elmers Village, Courtney Springs Tenants are mostly local families from Oviedo with a variety of occupations; less than 10% seniors John Market 40% N/A 0% one to two weeks Decreased 3.2%; Increased 3% to 9.5% None Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- electric not included -- electric not included -- electric not included not included not included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Garden $899 $0 Market No 1 3.1% N/A None Garden $969 $0 Market No 1 8.3% N/A None 2 2 Garden 120 1,145 $1,019 $0 Market No 6 5.0% N/A None 3 2 Garden 76 1,351 $1,259 $0 Market No 1 1.3% N/A None Unit Mix Market Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $899 $0 $899 $0 $ BR / 1BA $969 $0 $969 $0 $969 2BR / 2BA $1,019 $0 $1,019 $0 $1,019 3BR / 2BA $1,259 $0 $1,259 $0 $1,259 Novogradac & Company LLP All Rights Reserved.

127 Oviedo Grove Apartments, continued Amenities In-Unit Balcony/Patio Cable/Satellite/Internet Central A/C Exterior Storage Garbage Disposal Oven Walk-In Closet Blinds Carpeting Dishwasher Ceiling Fan Microwave Refrigerator Washer/Dryer Security In-Unit Alarm Patrol Video Surveillance Services None Property Basketball Court Exercise Facility On-Site Management Swimming Pool Business Center/Computer Lab Off-Street Parking Picnic Area Tennis Court Premium None Other None Comments Management was unable to provide absorption data. One-bedroom units without a den decreased by 3.2 percent. One-bedroom units with a den increased by 3.0 percent. Two-bedroom units increased by 7.5 percent. Three-bedroom units increased by 9.5 percent. Management was unaware of any affordable properties in the area and suggested a demand for affordable units. Novogradac & Company LLP All Rights Reserved.

128 Oviedo Grove Apartments, continued Trend Report Vacancy Rates 3Q09 4Q % 10.8% 1Q % 3Q10 3.8% Trend: Market 1.5BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $915 $0 $915 $ % $900 $75 $825 $ % $940 $0 $940 $ % $969 $0 $969 $969 1BR / 1.5BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $945 $0 $945 $ % $839 $70 $769 $ % $929 $0 $929 $ % $899 $0 $899 $899 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $1,050 $0 $1,050 $1, % $899 $75 $824 $ % $949 $0 $949 $ % $1,019 $0 $1,019 $1,019 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $1,240 $0 $1,240 $1, % $1,099 $92 $1,007 $1, % $1,149 $0 $1,149 $1, % $1,259 $0 $1,259 $1,259 Trend: Comments 3Q09 The leasing agent noted turnover has increased during the past year due to the slow local economic conditions. There have been several recent moveouts which is typical during this time of year as there is more activity in the rental market. The contact reported occupancy at 85 percent but was pre leased at 94 percent. Typical occupancy during 2009 was reported at 90 percent. Majority of turnover and vacancies are in the two bedroom units. 4Q09 The leasing agent noted turnover has increased during the past year due to the slow local economic conditions. The rents have decreased between 1.6 percent to 14.3 percent since our last survey in July of 2009 with the highest decrease in the two bedroom units. 1Q10 The leasing agent noted turnover has increased during the past year due to the slow local economic conditions. The rents have decreased between 1.6 percent and 14.3 percent since July of 2009 with the highest decrease in the two bedroom units which typically have the highest vacancy rate. 3Q10 Management was unable to provide absorption data. One-bedroom units without a den decreased by 3.2 percent. One-bedroom units with a den increased by 3.0 percent. Two-bedroom units increased by 7.5 percent. Three-bedroom units increased by 9.5 percent. Management was unaware of any affordable properties in the area and suggested a demand for affordable units. Novogradac & Company LLP All Rights Reserved.

129 Effective Rent Date 9/14/2010 PROPERTY PROFILE REPORT Tuskawilla Town Center Location Distance Units 41 Vacant Units Vacancy Rate Type Year Built/Renovated Marketing Began Leasing Began Last Unit Leased Major Competitors Tenant Characteristics 1401 Blumberg Blvd. Winter Springs, FL Seminole County 1.8 miles 3 7.3% Lowrise 2009 / N/A N/A 2/01/2009 9/10/2010 Legends Families from Winter Springs and Orlando. Contact Name Phone Dawn Market Information Program Market Annual Turnover Rate 12% Units/Month Absorbed N/A HCV Tenants 0% Leasing Pace Within five to seven business days Annual Chg. in Rent Decreased $300 Concession $500 off vacant unit Utilities A/C Cooking Water Heat Heat Other Electric Water Sewer Trash Collection not included -- central not included -- gas not included -- electric not included -- electric not included included included included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range (monthly) List Rate 1 1 Lowrise $895 $0 Market No 0 0.0% N/A None 2 2 Lowrise 10 1,039 $1,300 $0 Market No 0 0.0% N/A None 2 2 Lowrise 10 1,044 $1,360 $42 Market No % N/A None 2 2 Lowrise 10 1,322 $1,550 $0 Market No 0 0.0% N/A None 3 2 Lowrise 5 1,322 $1,550 $0 Market No 0 0.0% N/A None Unit Mix Market Face Rent Conc. Concd. Rent Util. Adj. Rent 1BR / 1BA $895 $0 $895 -$29 $866 2BR / 2BA $1,300 - $1,550 $0 - $42 $1,300 - $1,550 -$36 $1,264 - $1,514 3BR / 2BA $1,550 $0 $1,550 -$52 $1,498 Novogradac & Company LLP All Rights Reserved.

130 Tuskawilla Town Center, continued Amenities In-Unit Balcony/Patio Carpeting Coat Closet Ceiling Fan Microwave Refrigerator Washer/Dryer Blinds Central A/C Dishwasher Garbage Disposal Oven Window A/C Security Limited Access Services None Property Elevators Off-Street Parking Exercise Facility On-Site Management Premium None Other None Comments The property is pre-leased at 97.6 percent. Management suggested no demand for affordable housing in the area. The concession is for a 1,044 square foot twobedroom unit. Novogradac & Company LLP All Rights Reserved.

131 Tuskawilla Town Center, continued Trend Report Vacancy Rates 2Q10 3Q % 7.3% Trend: Market 1BR / 1BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $895 $0 $895 $ % $895 $0 $895 $866 2BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $1,300 $0 $1,300 $1, % $1,300 - $1,550 $0 - $42 $1,300 - $1,550 $1,264 - $1,514 3BR / 2BA Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent % $1,550 $0 $1,550 $1, % $1,550 $0 $1,550 $1,498 Trend: Comments 2Q10 3Q10 The property reportedly changed ownership in the past year. The property was originally planned as condominiums. Since opening in February 2009, the property is currently at its highest occupancy level at 78.5 percent. The units has stainless steel appliances, granite countertops, upgraded light fixtures and crown molding. The property is pre-leased at 97.6 percent. Management suggested no demand for affordable housing in the area. The concession is for a 1,044 square foot two-bedroom unit. Novogradac & Company LLP All Rights Reserved.

132 ADDENDUM D Site Plan and Floor Plans

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