RECENT SALES. MEMPHIS Q Multifamily. Research & Forecast Report. Accelerating success.

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1 Research & Forecast Report MEMPHIS Q Multifamily Accelerating success. Source: AXIOMetrics. RCA, CoStar Market Survey Results and Forecasts Sequential Month Annual 3Q16 4Q16 1Q17 2Q17 Jun F 2018F 2019F 2020F 2021F Effective Rent Per Unit $808 $805 $803 $819 $826 $767 $798 $818 $841 $867 $898 $922 Per Sq. Ft $0.84 $0.84 $0.84 $0.85 $0.86 $0.80 $0.83 $0.85 $0.88 $0.90 $0.94 $0.96 Effective Rent Growth - Annually 4.4% 4.9% 3.0% 2.6% 3.2% 1.4% 4.0% 2.6% 2.8% 3.1% 3.5% 2.7% Effective Rent Growth - Quarterly 1.2% -0.4% -0.2% 2.1% Occupancy Rate 93.4% 93.1% 93.2% 94.0% 94.1% 92.8% 93.3% 93.7% 93.9% 94.4% 94.9% 94.6% Occupancy Change - Annually 0.5% 0.3% 0.5% 0.0% 0.1% 0.3% 0.5% 0.4% 0.1% 0.6% 0.5% -0.3% Occupancy Change - Quarterly -0.7% -0.3% 0.1% 0.9% Economic Concessions Concession Value $-9.92 $ $ $ $-7.48 $ $ As a % of Asking Rent -1.2% -1.7% -1.5% -1.5% -0.9% -1.8% -1.3% RECENT SALES Date Property Name Address City Units Year Built Price in $ $/Units Jun-17 Oak Ridge & Pine Ridge 7560 Chesteridge Ave Southaven ,150,000 46,860 Jun-17 Village Green 3450 Fescue Ln Memphis ,400,000 17,197 May-17 Barron Court 3015 Barron Ave Memphis ,154 10,967 May-17 El Dorado Apartments 2743 Ketchum Rd Memphis ,061,710 10,967 May-17 Longview Gardens 1715 S Orleans St Memphis ,151,485 10,967 May-17 Longview Heights 1949 Philsar St Memphis ,754,644 10,967 Apr-17 Village at Harrison Creek Apartments 3855 Jackson Ave Memphis ,000,000 15,748 Apr-17 Kensington Manor 3896 Chippewa Rd Memphis ,000,000 7,156 Apr-17 Shelby Grove 6322 Gillespie Rd Memphis ,850,000 59,694 *Colliers transaction

2 SUPPLY AND DEMAND According to the Bureau of Labor Statistics, job growth in Memphis, TN-MS-AR Metro Area was 2.1% in June 2017, reflecting 13,400 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.5%. Axiometrics forecasts Memphis, TN-MS-AR Metro Area s job growth to be 0.9% in 2018, with 5,900 jobs added. Job growth is expected to average 1.1% from 2019 to 2021, with an average of 7,183 jobs added each year. On the supply side, permits for 1,103 multifamily units were issued in the 12 months ending in June 2017, down -213 units from the prior year s sum. In terms of total residential housing, 4,211 units were permitted in the 12 months ending June 2017, a decrease of -144 units from the prior year s total. Market Employment and Permitting Annual June-17 Annual Forecast Market National 2017F 2018F 2019F 2020F 2021F Employment (000s) , Job Gain (000s) , Job Growth (%) 1.3% 1.9% 1.6% 2.1% 1.5% 1.1% 0.9% 1.0% 1.3% 1.1% Total Residential Permitting 3,171 3,959 4,355 3,909 1,094,862 4,729 8,263 7,568 6,058 7,365 Relative Change -13.6% 24.9% 10.0% 21.9% 4.7% 8.6% 74.7% -8.4% -20.0% 21.6% Single Family Units Permitted 2,554 2,581 3,003 2, ,478 Relative Change 2.7% 1.1% 16.4% 13.7% 8.5% Multifamily Units Permitted 607 1,370 1,316 1, ,109 Relative Change -40.7% 125.7% -3.9% 57.5% -2.3% Multifamily as a % of Total 19.1% 34.6% 30.2% 28.0% 32.8% Demand/Supply Ratio Job Gain / Total Residential Units Permitted Job Gain / Single Family Units Permitted Job Gain / Multifamily Units Permitted Multifamily Absorption and Supply Annual 2Q17 Annual Forecast Market National 2017F 2018F 2019F 2020F 2021F Total Units Absorbed 714 1,222 1, ,965 1, , New Supply ,016 1, , Inventory Growth 1.0% 0.7% 1.1% 1.1% 1.4% 1.0% 0.8% 0.7% 0.5% 0.7% MULTIFAMILY ADVISORY GROUP P. 2

3 IDENTIFIED SUPPLY As of August 13, 2017, Axiometrics has identified 1,018 apartment units scheduled for delivery in 2017, of which, 612 have been delivered. As a comparison, there were 974 apartment units delivered in Properties delivered to the market in the last 12 months have achieved an average asking rent of $1,252 per unit, or $1.24 per square foot. Effective rent has averaged $1,220, or $1.21 per square foot, resulting in an average concession value of $ As a comparison, existing properties in the market had an average asking rent of $831 per unit ($0.87 per square foot) and an average effective rent of $819 per unit, or $0.85 per square foot, in 2Q17. Concessions for existing properties averaged $ Submarket Delivery Schedule Pipeline Delivery Schedule Pipeline Lease Up Trend Units Absorbed Asking Rent Effective Rent Top Submarkets Total Totals PPM Per Unit PSF Per Unit PSF Downtown/Midtown $1,306 $1.45 $1,300 $1.45 East Memphis/University $1,396 $1.49 $1,374 $1.46 Poplar Pike/Germantown/Cordova , $1,231 $1.12 $1,183 $1.08 Southeast Shelby County/Ridgeway $1,100 $1.04 $1,074 $1.02 Other $1,251 $1.23 $1,218 $1.20 Memphis, TN-MS-AR ,018 2,609 *Based on 2017 deliveries *Trend based on a trailing 12 month period MULTIFAMILY ADVISORY GROUP P. 3

4 PIPELINE # Name Status Owner Address Market Source: CoStar Units 1 Concourse Lease Up Crosstown Building Owner Llc 1350 Concourse Ave North Memphis MF Carrington West Lease Up Boyle Investment Company 900 Winchester Rd Collierville MF S Danny Thomas Blvd Proposed Progressive Baptist Ch 272 S Danny Thomas Blvd Downtown Memphis MF The Farms at Bailey Station Proposed Retirement Companies of America, LLC Grand Central Cir E Collierville MF Madison & McLean Proposed Makowsky Ringel Greenberg LLC 1819 Madison Ave Midtown Memphis MF Mason Village Proposed Church Of God In Christ Inc 884 Mason St South Memphis MF 77 7 Overton Gateway Proposed Makowsky Ringel Greenberg LLC 502 E Parkway N Binghampton MF Germantown Town Center Multifamily Proposed Carter USA 7450 Poplar Ave Germantown MF Tennessee Brewery Phase II Proposed Tower Ventures, LLC 495 Tennessee St Downtown Memphis MF Midtown Market Proposed Belz Enterprises 1837 Union Ave Midtown Memphis MF One Beale Proposed 245 Wagner Pl Downtown Memphis MF Springs at Shelby County Proposed Continental Properties Company Inc Winchester Rd Germantown MF E Butler Ave Under Construction Laycook James B 259 E Butler Ave Downtown Memphis MF Meridian Park Apartments Under Construction Grant & Co Elkstone Dr S Collierville MF S Front Under Construction Vince D Smith 266 S Front St Downtown Memphis MF Thornwood Under Construction McNeill Commercial Real Estate 1660 S Germantown Rd Germantown MF Fieldstone Apartments Phase VII Under Construction Michael Lightman Realty 3229 Harcourt Way Germantown MF Highland Row - Phase II Under Construction Milhaus 395 S Highland St East Memphis MF Memphis Under Construction 908 Development Group 521 S Highland St East Memphis MF Uptown Flats Under Construction PIRHL 627 N Main St Uptown Memphis MF Irene Woods Apartments- Phase II Under Construction Edward Rose & Sons 9199 Mayfield Rd N Southern Shelby County MF 22 South Main Artspace Lofts Under Construction Artspace Project Inc 138 St. Paul Ave Downtown Memphis MF Tennessee Brewery Apartments Under Construction Tower Ventures, LLC 495 Tennessee St Downtown Memphis MF Total Units 4, Key Lease-Up Under Construction Proposed miles MULTIFAMILY ADVISORY GROUP P. 4

5 OUR PROVEN TRACK RECORD WHO WE ARE One of the largest and most experienced teams of multifamily specialists in the industry MORE THAN 50 Dedicated Multifamily Professionals & Advisors Trails at Mount Moriah Memphis, TN Units: 630 RENAISSANCE AT PEACHER S MILL Clarksville, TN Expansive geographic footprint MORE THAN 33,500 Units sold since 2011 COVERING OVER 20 STATES Stacks on Main Nashville, TN Units: 268 CLIENT: JA Murphy Group UNITS: 216 CHALLENGE: This was a difficult and cumbersome transaction as the debt execution consisted of an assumable HUD loan which dramatically narrows the pool of buyers and extends the process. Additionally, the East Region team reviewed the seller s proforma and found they were charging too high an administrative fee to each renter. STRATEGY & RESULTS: After reducing the fee, ownership was able to achieve an $80,000 annual NOI increase, which resulted in an increased sale price. To sell the property the team, broadly marketed to work with an active HUD buyer comfortable with the process. $2.3 B Group gross transaction value in since 2011 Shelby Heights Bristol, TN Units: 100 Selling this property resulted in the highest price per unit in the history of Clarksville. Overlook at Allensville Square Phase I Knoxville, TN Units: 288 Overlook at Allensville Square Phase II Knoxville, TN Units: 288 Renaissance at Peacher s Mill Clarksville, TN Units: 216 MULTIFAMILY ADVISORY GROUP P. 5

6 WE CAN HELP As an investor in multifamily properties, you need a firm that provides experience, broad reach and the ability to market an asset no matter how challenging the economic environment. You need a team that specializes in your market, you need The East Region Multifamily Advisory Group. Colliers International has one of the largest and most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and singular focus, make us uniquely successful in helping our clients achieve their disposition objectives. How are we able to bring together the skills and tools necessary to complete challenging assignments? Our East Region Multifamily Advisory Group is connected by purpose and focus. Our team is dedicated to sharing information on market opportunities, capital sources and buyers/sellers to achieve the best results for our clients. MULTIFAMILY ADVISORY GROUP P. 6

7 John Ashley ASSOCIATE EAST REGION DIR Will Mathews PRINCIPAL EAST REGION INSTITUTIONAL CLIENT GROUP DIR Payton Herschberger ASSOCIATE EAST REGION DIR AT YOUR SERVICE To learn more, scan this with a QR code reader or visit: MULTIFAMILY ADVISORY GROUP P. 7