STATE OF THE MULTIFAMILY MARKET MACRO VIEW

STATE OF THE MULTIFAMILY MARKET MACRO VIEW JEANETTE I. RICE, CRE AMERICAS HEAD OF MULTIFAMILY RESEARCH APRIL 19, 2018 Westchester/ Fairfield

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KEY INVESTMENT STRATEGIES It s not 2015 returns are moderate - but it is still an excellent time to invest in multifamily Top Category Performers Today BEST Luxury Urban Core Core (inv style) Primary Metros Development Workforce Suburban Core Plus / Value-Add Secondary/Tertiary Existing Source: Research, Q1 2018. However, all of these offer attractive long-term investment potential 3 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

AGENDA Economic Framework Property Fundamentals Investment Climate 4 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

CYCLICAL DRIVER - U.S. ECONOMY Despite 4.1% unemployment, job creation maintaining pace % Historical Employment Growth Rate 3 2 1 0-1 -2-3 -4-5 Mar-08 Mar-10 Mar-12 Mar-14 Mar-16 Mar-18 Historical Employment One-Month Change Three-Month Trailing Average 000s 400 200 0-200 -400-600 -800 Mar-08 Mar-10 Mar-12 Mar-14 Mar-16 Mar-18 +1.5% (2.3 m jobs) 1Q18 average = 202,000 2017 average = 182,000 Wage Growth March 2018 y-o-y +2.7% Source: U.S. Bureau of Labor Statistics, seasonally-adjusted data through March 2018. Wage growth is based on average hourly earnings. 5 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

INTEREST RATES RISING This year, rates may stay higher. FRB: 2-3 more tweaks to Federal Funds rate in 2018 % 3.00 10-Year Treasury Rate Two-Year History 2.75 2.50 2.25 2.00 1.75 April 11 = 2.79% Outlook (% as of 4Q) 2016 2.13 2017 2.37 2018 3.10 2019 3.42 2020 3.53 1.50 1.25 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Source: Research, U.S. Department of the Treasury, rates through April 11, 2018; Oxford Economics forecasts as of 04.10.18. 6 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. ECONOMY GDP OUTLOOK 2016 2017 2018 2019 2020 Actual 1.5 2.3 -EA Baseline 2.4 0.8 0.8 -EA Upside 3.6 2.5 1.7 Moody s Analytics 2.9 2.2 0.9 Oxford Economics 2.9 2.4 1.5 Source: Econometric Advisors, Q4 2017; Moody s Analytics, January 2018; Oxford Economics, April 2018. Q4 2017 GDP = 2.6%. 7 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

Property Fundamentals 8 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY MARKET BASICS 15 MILLION UNITS 4.9% VACANCY 0% EFFECTIVE RENT GROWTH YOY 266,000 UNITS DELIVERED 2017 241,000 UNITS ABSORBED 2017

REAL ESTATE CYCLE Industrial Office Hospitality Multifamily Retail* EXPANSION RECOVERY DECLINE RECESSIO N Source: Research, Q1 2018. *Retail is very difficult to generalize due to structural change in the property type. 10 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

REAL ESTATE CYCLE Industrial Office Hospitality Multifamily Retail* EXPANSION RECOVERY DECLINE RECESSIO N Source: Research, Q1 2018. *Retail is very difficult to generalize due to structural change in the property type. 11 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

HIGH LEVELS OF DEMAND U.S. multifamily demand remains very healthy Units in 000s 300 Annual Net Absorption Totals 250 239 219 241 200 150 100 2010 through 2017 = 1.5 million units 50 0-50 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Source: Research, Econometric Advisors, Q4 2016. Total for 62 metro markets tracked by EA. Absorption is counted in the quarter in which property has stabilized. 12 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

LEADING METROS - NET ABSORPTION West Coast, Florida, Texas dominate Metro Units Added Past 4 Qtrs. Completions to Inventory (%)* 1 New York Metro 33,500 1.5 2 Houston 20,100 3.3 3 Dallas/Ft. Worth 11,000 1.6 4 Los Angeles/So. Cal. 10,600 0.7 5 Washington, D.C. 10,200 1.8 6 Denver 10,200 3.4 7 Miami/South Florida 9,700 1.7 8 San Francisco Bay Area 8,400 1.5 9 Seattle 7,700 2.1 10 Phoenix 7,300 2.1 11 Austin 7,000 3.4 12 Orlando 6,900 3.5 13 Atlanta 6,600 1.6 14 Boston 6,500 1.4 15 Minneapolis 5,600 2.1 16 San Antonio 5,100 3.1 17 Tampa 5,100 2.4 18 Portland 4,500 2.4 19 Charlotte 4,300 2.9 20 Nashville 4,000 3.1 Seattle 5 Portland 8 SF Bay Area LA/So Cal 11 7 Numbers on map represent units absorbed in thousands. Minneapolis 10 Denver 6 Nashville 7 Boston 34 New York City 10 Washington, D.C. 4 4 Charlotte Phoenix Dallas/Ft. Worth 7 Atlanta 11 Austin 7 San Antonio 6 7 20 Houston 5 Tampa 10 South Florida Source: Research, Econometric Advisors, Q4 2017. *On table, markets highlighted in green had exceptional multifamily demand in 2017. The smaller markets of Salt Lake City and Greenville achieved absorption rates of 3.2% and 4.0%, respectively. 13 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

SECULAR DEMAND DRIVERS Attraction of multifamily housing rising Historical U.S. Homeownership Rate (%) 72 70 68 66 64 62 68.9 Economy starts improving 64.0 1. Demographics remain favorable Millennials (turning 23-38 in 2018), especially younger ones, still in traditional rental tenure life stages Gen Z generation entering rental market 60 Q4 2001 Q4 2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4 2015 Q4 2017 Baby boomers/empty nesters exploring and more are choosing rentals Source: Research, U.S. Census Bureau, Q4 2017. 14 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

SECULAR DEMAND DRIVERS Attraction of multifamily housing rising 1. Demographics remain favorable 2. Urban living - multifamily rental tenure popularity rising due to attractiveness of urban living (and availability of housing product) 3. Preference for tenure flexibility provided by renting Source: Research, U.S. Census Bureau, Q4 2017. 15 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

STRUCTURAL DEMAND DRIVERS 4. Buying a house - desired, but not attainable High housing costs in many markets Rising cost of housing in most markets Limited supply of new or existing moderately-priced housing Credit approvals and hurdles still difficult Saving for down payment hindered by student debt Single-family construction starts still only slightly above half of last cycle Few condos are being built % 15 10 5 0-5 -10-15 Median Existing Single-Family Home Sales Price - Year-over-Year Change (%) Annual = 7.3% 5.3 5.9 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Feb 18 yoy Source: Research, National Association of Realtors, U.S. Census Bureau, Q1 2018. February 2018 median = $243,400. Total increase six years of 2012-2017 = 52.4%. 16 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

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LEADING METROS FOR COMPLETIONS 7 metros added more than 10,000 units in 2017 Metro Units Added Past 4 Qtrs. Completions to Inventory (%)* 1 New York Metro 33,200 1.5 2 Dallas/Ft. Worth 16,400 2.4 3 Miami/South Florida 12,200 2.1 4 Los Angeles/So. Calif. 12,200 0.8 5 Washington, D.C. 12,200 2.1 6 Seattle 10,700 3.0 7 Denver 10,200 3.4 8 Houston 9,800 1.6 9 San Francisco Bay Area 8,600 1.5 10 Atlanta 8,600 2.0 11 Austin 8,500 4.2 12 San Antonio 7,500 4.7 13 Phoenix 7,500 2.2 14 Chicago 7,400 1.0 15 Boston 6,900 1.5 16 Orlando 6,500 3.3 17 Minneapolis 5,800 2.2 18 Charlotte 5,400 3.6 19 Nashville 5,300 4.1 20 Portland 5,000 2.7 Seattle 5 Portland 9 SF Bay Area LA/So Cal 12 Numbers on map represent units added in thousands. Minneapolis 10 Denver Source: Research, Econometric Advisors, Q4 2017. *On table, markets highlighted in red have greater risk of overbuilding based on high completions to inventory ratio.. 6 Chicago Nashville 8 Phoenix Dallas/Ft. Worth 16 Austin 9 San Antonio 8 10 Houston 7 5 5 9 Atlanta 33 New York City 12 Washington, D.C. Charlotte 7 Orlando 12 7 Boston South Florida 18 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY CONSTRUCTION 266,000 units delivered in 2017; this cycle s peak delivery year moved to 2018 Annual Completions Units in 000s 400 Completions Supply-to-Inventory Ratio (%) 2.4 350 300 260 266 311 Likely higher 2.1 1.8 250 1.5 200 1.2 150 144 0.9 100 0.6 50 0.3-00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 0.0 Source: Research, Econometric Advisors, Q4 2017. Total for 62 metro markets tracked by EA. Completed units are counted in the quarter in which property has stabilized. 2000 was peak of late 1990s/early 2000 expansion period. Forecasts are based on Moody s Analytics economic scenario. 2019 completions forecast overly conservative given 2017 starts. 19 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

MULTIFAMILY STARTS LONG-TERM Despite large construction pipeline, current cycle does not rival 1970s or 1980s Annual Starts Units in 000s 1000 906 800 600 576 400 359 386 342 200 0 64 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 Source: Research, U.S. Census Bureau, Q4 2017. 20 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY VACANCY Vacancy inched up in 2017, but still healthy Historical Vacancy Y-o-Y Vacancy Change (bps) Vacancy Rate (%) 250 8 200 150 100 50 7 6 5 4 Q4 2017 = 4.9% +10 bps year-over-year 0 3-50 2-100 1-150 0 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2014 Q4 2015 Q4 2017 Source: Research, Econometric Advisors, Q4 2017. 22 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY VACANCY BY CLASS Class B and C outperforming Class A Historical Vacancy by Class (%) 10 Class A Class B Class C 8 6 4 2 0 Q4 2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2014 Q4 2015 Q4 2017 5.3 5.0 4.4 Typically highest quality product outperforms the market. Class A had lowest vacancy through recovery and early expansion years. For past 2½ years Class A has trended up while Class C has continued to trend down (due largely to no new supply) Class B and C have lowest vacancy Source: Research, Econometric Advisors, Q4 2017. Class A represents top 20% of properties based on average rent of property; Class B middle 60% and Class C, lowest 20%. 23 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY RENTS TWO PROBLEMS OWNERS not enough, at least not in urban core RESIDENTS rents have risen too much (more than income), especially for lower and middle income multifamily residents

RENT CHANGE BY PRODUCT TYPE Rent growth for garden product outpaces high-rise Historical Rent Change by Type (Y-o-Y %) 9 8.5 High-Rise Garden 6 3 0-3 -6 5.1 4.13.8 2.0 2.4 6.5 5.8 5.9 3.8 4.0 4.0 3.7 2.2 0.7-0.8-4.6-6.1 4.1 5.3 5.0 2.6 2.8 2.8 0.5-1.2 Garden product is clearly outpacing high-rise Over the peak recovery/ expansion years of 2010-2015, annual rent growth averaged: High-rise 4.5% Garden 4.3% Over the past two years: High-rise -0.4% Garden 2.8% -9 05 06 07 08 09 10 11 12 13 14 15 16 17 Source: Research, Econometric Advisors, Q4 2017. 25 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

RENT GROWTH - URBAN VS SUBURBAN Suburban rent growth outperforming urban since 2013 Historical Rent Change by Type (Y-o-Y %) Urban Core Suburban 8 6 6.0 6.2 5.5 5.0 4.5 4 2 3.2 3.0 1.9 0.8 3.5 3.1 2.4 2.1 1.6 1.6 0-0.4-2 -4 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016-1.2 Q3 2016-2.0 Q4 2016-2.6 Q1 2017-2.4-2.4 Q2 2017 Q3 2017-1.8 Q4 2017 Source: Research, Econometric Advisors, Q4 2017. Note that the urban core statistics are skewed slightly by the large inventory in challenged markets including New York Metro. Submarkets contiguous to the urban core submarkets are not included in this analysis. 26 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

AFFORDABILITY - U.S. MULTIFAMILY RENTS +33% from recession, >4% per year Historical Average ($/Month) 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Source: Research, Econometric Advisors, Q4 2017. 27 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY OUTLOOK Demand and supply both expected to rise in 2018 Supply, Demand, Vacancy Outlook Units in 000s Completions (L) 400 300 260 266 241 219 200 100 311 Net Absorption (L) 287 144 92 0 16 17 18 19 Annual Rent Change Outlook % 2 1.6 1 0.6 1.0 0-1 -0.3 16 17 18 19 Source: Research, Econometric Advisors, Q4 2017. Average for 62 markets tracked by EA. *Metros with at least 150,000 units of inventory and based on EA s Moody s Analytics economic scenario. 5-year outlook for U.S. is about 3.6% average annual. 28 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

AGENDA Investment Climate 29 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

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U.S. REPEAT SALES PRICE INDEX Multifamily continues to outperform other sectors Historical Sales Price Index (CPPI) 100 = December 2006 180 All Office Industrial Retail Multifamily 160 Year-over-Year +11.1% - MF +8.1% - All 140 120 100 80 60 Feb-08 Feb-10 Feb-12 Feb-14 Feb-16 Feb-18 Source: Research, Real Capital Analytics, Moody s Analytics, Q4 2017. 31 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

INSTITUTIONAL MULTIFAMILY RETURNS Multifamily stable from prior quarters, but below recent years Annual NCREIF Returns % 25 20 15 10 5 0-5 -10-15 -20-25 13.0 9.4 8.8 8.9 13.0 21.2 14.6 Appreciation Income Total 11.4-7.3 18.2 15.5-17.5 11.2 10.4 10.3 12.0 7.3 6.2 5.3 5.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Investment performance by institutionally-owned multifamily properties averaged 6.16% year ending Q4 2017 Essentially unchanged from Q2 and Q3 but below 20-year average of 9.27% For year ending Q4 2017: Appreciation = 1.70% Income = 4.40% Most of recent decline has been in appreciation, income has held up quite well Subindices, Q4: Garden = 8.90% High-rise = 4.71% Source: Research, NCREIF, Q4 2017; PREA (consensus forecast as of December 2017). 32 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

INSTITUTIONAL MULTIFAMILY RETURNS Garden outperforming high-rise 12 One-Year NCREIF Returns (%) Appreciation Income Total 20-Year Average 10 8 9.3 9.7 9.7 8.9 6 4 6.2 4.7 2 0 All Garden High-Rise Source: Research, NCREIF, Q4 2017 33 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

MULTIFAMILY IS STILL A FAVORED SECTOR $453 billion total investment in U.S. commercial real estate 2017 Multifamily largest market share Retail, $64, 14% Multifamily, $153, 34% Hotel, $28, 6% Industrial, $74, 16% Office, $134, 30% 34 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY YTD 2018 ACQUISITIONS VOLUME 2018 investment starting out on par with 2017 180 150 120 Cumulative Investment Volumes Through Year ($ B) 2013 2014 2015 2016 2017 2018 Total ($ billions) Chg (%) 2017 2016 Y-o-Y Individual Assets 117.0 117.7-0.6 Portfolios 29.2 34.6-15.6 Entity-Level 6.5 6.9-6.0 90 60 Garden 104.1 105.5-1.3 Mid/High-Rise 48.6 53.6-9.4 30 0 J F M A M J J A S O N D Total 152.7 159.2-4.1 Source: Real Capital Analytics, Research, Q1 2018. Table updated 04.11.18. Column sums may not total due to rounding. Preliminary Q1 2018 total is $29.8 billion as of 04.11.18. 35 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

LEADING METROS FOR INVESTMENT, 2017 Gateway markets lose market share in 2017 Rank Metropolitan Area 2017 Volume ($ B) Metro Market Share (%) Cumulativ e Market Share (%) Volume Change Y-o-Y (%) 1 New York Metro 12.2 8.1 8.1-39.0 2 Los Angeles/So. Calif. 10.2 6.8 14.9-8.9 3 Dallas/Ft. Worth 9.6 6.4 21.3-1.0 4 Atlanta 7.5 5.0 26.3-15.8 5 Washington, D.C. 6.7 4.5 30.8 12.6 6 Denver 6.5 4.4 35.1-2.9 7 Chicago 5.0 3.3 38.5 9.6 8 Seattle 4.9 3.3 41.7-13.3 9 Phoenix 4.8 3.2 44.9-8.3 10 Miami/So. Florida 4.6 3.0 48.0-23.9 11 Houston 4.5 3.0 51.0-12.0 12 San Francisco Bay 4.3 2.9 53.9-23.4 13 Orlando 3.6 2.4 56.2 32.9 14 Austin 3.5 2.3 58.6-17.2 15 Boston 3.0 2.0 60.6 4.5 16 San Diego 2.6 1.8 62.3 0.4 17 Las Vegas 2.5 1.7 64.0 1.1 18 Tampa 2.5 1.6 65.6-14.2 19 Baltimore 2.2 1.5 67.1 25.8 20 San Antonio 2.1 1.4 68.5 31.8 21 Raleigh/Durham 2.0 1.3 69.9 1.2 Investment has shifted more to secondary and tertiary markets Gateway investment down more than other metros; -17.5% for the six gateway markets collectively (Boston, NY, Washington, Chicago, Los Angeles, San Francisco) Among major markets on table, San Antonio, Orlando and Baltimore had largest y-o-y gains New York Metro, Miami/So. Florida and San Francisco Bay Area experienced sharpest declines Metro Tier No. of Markets Investment by Metro Tier Total 2017 ($ b) Change Y-o-y (%) Total - 150.1-6.9 Market Share 2017 Market Share 2016 Tier I 9 53.6-17.0 36 40 Tier II 13 51.2-5.2 34 33 Tier III 19 19.3 3.7 13 12 Other - 26.0 11.7 17 15 Source: Real Capital Analytics, Research, Q4 2017. 36 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

CAP RATES BY CLASS For stabilized assets during 2017, Class C experienced the widest compression Infill Suburban 8.5 Class A Class B Class C 9.5 Class A Class B Class C 8.0 9.0 7.5 8.5 7.0 8.0 6.5 6.0 5.5 5.0 5.91 5.15 7.5 7.0 6.5 6.0 5.5 6.32 5.49 4.5 4.0 2009 2010 2011 2012 2013 2014 2015 2016 4.67 2017 5.0 4.5 2009 2010 2011 2012 2013 2014 2015 2016 4.96 2017 Source: Research, Q4 2017. 37 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

CAP RATES BY TIER For stabilized assets during 2017, Tier II metros experienced the widest compression on average Infill Suburban % Tier I Tier II Tier III % Tier I Tier II Tier III 8.5 8.5 8.0 8.0 7.5 7.5 7.0 7.0 6.5 6.23 6.5 6.24 6.0 6.0 5.61 5.5 5.27 5.5 5.0 5.0 5.25 4.5 2009 2010 2011 2012 2013 2014 2015 2016 4.87 2017 4.5 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Research, Q4 2017. For suburban markets the tier breakout is not available prior to 2012. 38 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY CAP RATES More tightening - Class B & C, Tier II & III, suburban Average Rate (%) Class A Class B Class C BP Change from H1 2017 Class A Class B Class C INFILL METRO TIER All I II III 4.67 4.40 4.70 5.42 5.15 4.80 5.24 6.03 5.91 5.45 5.87 7.25 INFILL METRO TIER All I II III -1 4-6 -10 0 8-15 0-9 -6-17 -8 SUBURBAN METRO TIER All I II III 4.96 4.67 5.00 5.52 5.49 5.15 5.58 6.05 6.32 5.95 6.25 7.17 SUBURBAN METRO TIER All I II III -7-1 -15-7 -6 2-16 -6-9 -2-15 -13 Source: Research, 2017. For stabilized assets. The overall average rate for infill was 5.23% (-3 bps from H1 2017) and 5.59% for suburban (-7 bps). 39 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

U.S. MULTIFAMILY CAP RATE SURVEY OUTLOOK Outlook is for stable cap rates in H1 2018; value-add slight compression expected by some respondents Urban Infill Suburban % 90 80 Stabilized 82 82 Value Add % 90 80 Stabilized 84 78 Value Add 70 70 60 60 50 50 40 40 30 30 20 10 0 1 1 Decrease 25-50 bps 8 12 Decrease <25 bps No Change 10 4 Increase < 25 bps 0 1 Increase 25-50 bps 20 10 0 1 1 Decrease 25-50 bps 8 13 Decrease <25 bps No Change 5 5 Increase < 25 bps 2 3 Increase 25-50 bps Source: Research, 2017. 40 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

KEY INVESTMENT STRATEGIES LEADING MARKETS Metros With Highest Five-Year Rent Outlook Rank Metro Average Increase (%) 1 Newark 3.9 2 Long Island 3.8 3 Orlando 3.4 4 Oakland 3.3 5 San Jose 2.9 6 Ventura 2.8 7 W. Palm Beach 2.8 8 Jacksonville 2.8 9 Norfolk 2.7 10 Miami 2.7 11 Ft. Lauderdale 2.7 12 Columbus 2.6 13 San Diego 2.6 14 Sacramento 2.6 15 Tampa 2.5 California and Florida markets dominate this outlook for rent growth Source: Research, Econometric Advisors, Q4 2017. Based on Moody s Analytics economic outlook. 41 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

FINAL THOUGHTS - AGILITY Longer-term risk, opportunity, or both? Agility changes in how we live, product availability, industry adaptability Co-living Rental Single-Family Short-term Rentals Age-restricted Merger of hospitality & multifamily 42 JEANETTE I. RICE STATE OF U.S. MULTIFAMILY MARKET

THANK YOU JEANETTE I. RICE AMERICAS HEAD OF MULTIFAMILY RESEARCH T +1 214 979 6169 JEANETTE.RICE@.COM