East Bay Market Overview Bianca Fargnoli

East Bay Market Overview Bianca Fargnoli

East Bay Submarkets Source: CoStar Realty Information

East Bay - Overview Market Summary Thanks to an improving Bay Area economy and an initial shutdown in construction, vacancies here have been falling for the past three years The East Bay presents a good deal of opportunity and is worth targeting for risk-averse investors Apartment demand should remain healthy The metro s primary benefit is its relative affordability within the region The metro s relatively high costs and public-sector exposure will be a drag on economic prospects The East Bay s solid transportation and distribution infrastructure, along with its wealth of high tech industrial facilities, will continue to be a boon for the metro Investment activity has normalized in the East Bay Long-term liquidity should be mediocre in the East Bay Modest NOI growth should keep pricing steadier than elsewhere in the Bay Area Apartment construction remains subdued relative to regional and even national standards, but the supply pipeline is growing Source: CoStar Realty Information

Downtown Oakland

Downtown Oakland Current Supply Source: CoStar Realty Information

Downtown Oakland Future Deliveries Letter Project Name Developer Units Last Action TCG Status Lake Merritt BART Full App Received Application A Mixed Use (Lake Merritt City of Oakland 4,900 on 01/01/12 Under Review Station Area Plan) B C D E F G H Wood Street Mixed-Use Development (formerly Central Station)--Rem Phases 3093 Broadway Uptown Parcel 4 (Telegraph/19th Street) Phase II 19th and Broadway/ Hamalian 2315 Valdez St 2270 Broadway The Hive None 874 Thompson Dorfman/srmErnst 435 TBD 370 Seth Hamalian 294 Thompson Dorfman Lakeshore Partners LLC Signature Properties 235 223 104 Tentative Map Approved on 05/17/05 Site Approvals Received on 12/15/14 Tentative Map Approved on 07/25/07 First Contact on 01/01/12 First Contact on 11/01/14 First Contact on 12/01/14 Broke Ground on 12/01/13 Fully Entitled Fully Entitled Application Under Review Preliminary Review Preliminary Review Preliminary Review Under Construction Source: The Concord Group

Downtown Oakland - Overview Submarket Summary Downtown Oakland is a major job center with numerous urban amenities and transit advantages, as the BART transit line has many station stops downtown Stabilized vacancies here hover at about 2.5% Home to the Port of Oakland, which ranks among the top 10 in the nation for container traffic Downtown Oakland is unique for its high concentration of government tenants, such as Cal Train, BART, Alameda County, and the City of Oakland The Oakland CBD is fairly liquid, with roughly $100 million in annual trading volume since 13Q1 The stock here is largely made up of 3 Star quality asset and below, with only 36% of inventory tagged with a 4 & 5 rating Source: CoStar Realty Information

Berkeley

Berkeley Current Supply Source: CoStar Realty Information

Berkeley Future Deliveries Letter Project Name Developer Units Last Action TCG Status A Acheson Commons Equity Residential 205 Zoning Approved on 12/01/12 Fully Entitled B Parker Place Site Approvals Lennar/Rhoades 155 Received on Planning Group 01/01/12 Fully Entitled C 2001 Fourth Street Aparments RI Berkeley LLC 152 D Bancroft Center TBD 132 E The Higby Gerding Edlen 98 F G 1950 Addison Street 2107 Dwight Way Westwood BayRock Addison LP Menlo Management Company H StoneFire The Austin Group 98 93 99 Site Approvals Received on 01/22/15 First Contact on 11/03/14 Broke Ground on 12/03/13 Full App Received on 10/15/14 Broke Ground on 07/11/14 Site Approvals Received on 08/25/14 Fully Entitled Conceptual Under Construction Application Under Review Under Construction Fully Entitled Source: The Concord Group

Berkeley - Overview Submarket Summary The Berkeley Submarket is home to the first and most prestigious of California s public universities, University of California, Berkeley, which enrolls over 36,000 students and provides a large pool of renters Demand has kept vacancy rates near historic lows; 2.6% as of 2014Q4 Vacancies are forecasted to average about 3% over the next five years Berkeley residents opposition to growth has gradually softened, and strong demand has made the submarket a favorite of developers Almost two-thirds of complexes are mid-rise, giving the submarket a more urban feel than most other parts of the East Bay Average per square foot rents in the Berkeley Submarket are among the highest in the East Bay Source: CoStar Realty Information

Walnut Creek

Walnut Creek Source: CoStar Realty Information

Walnut Creek Future Deliveries Letter Project Name Developer Units Last Action TCG Status Site Approvals The Landing BHV CenterStreet A 178 Received on Fully Entitled Apartments Properties LLC 12/31/11 B 1500 North California Laconia 140 Broke Ground on 11/01/14 Under Construction C North Main Apartments Mill Creek Residential Trust 126 Broke Ground on 08/01/13 Under Construction D The Arroyo Apartments Hall Equities Group 100 Broke Ground on 06/01/14 Under Construction E The Village Essex Alamo, LLC. 49 Broke Ground on 06/01/13 Under Construction Source: The Concord Group

Walnut Creek Overview Submarket Summary The Walnut Creek Submarket is built for homeowners; more than three-quarters of residents live in single-family homes Attracts renters looking for a commutable, suburban alternative Rents have increased consistently in recent years, by almost 30% since 2009 Developers continue to add to the submarket s stock of high-quality units, especially around transit hubs New units and strong demand have kept rental rates rising, but vacancy has crept up a little, to 3.5% in 14Q3 Investment is tapering off, because few highquality assets are coming on line and prices have possibly reached the peak of the current cycle Almost all units are in garden-style complexes approximately 80% versus 20% in mid-rise structures Source: CoStar Realty Information

New Product Amenities

Amenities PACKAGES: Package Room 100SF for every 150 units Automated Package Delivery - 34 lockers for every 150 units FITNESS CENTER/YOGA: 1000 SF for every 150 units Separate yoga/stretch room, add mirrors and stretching bar, TRX 200 SF Storage for personal belongings and towels TV monitor on equipment Rubberized flooring surface under free weight area Filtered water that fills water bottles in addition to a drinking fountain. Indoor/outdoor open air set up that outlooks to pool deck

Amenities continued BUSINESS CENTER Wireless printing Flexible work spaces Booths for privacy and video conferencing capabilities (smart TVs) PETS 1 pet washing station room per 100 apartments mandatory BIKES Bike Storage rooms mandatory Bike Repair rooms outfitted with tools and pumps Bike Fixtation vending machine that sells parts

The End Q&A