Multifamily Advisory Group | East Region WE KNOW LEXINGTON Specialized Real Estate Investment Services

AcceleratingCOLLIERS INTERNATIONAL success. www.ColliersMultifamilyEast.com MULTIFAMILY ADVISORY GROUP P. 1 WE KNOW WHO YOU ARE Lexington, consolidated with Fayette County, is the second-largest city in and the 61st largest in the United States. Known as the “Horse Capital of the World”, it is the heart of the state’s . With a mayor-alderman form of government, it is one of two cities in Kentucky designated by the state as first-class; the other is the state’s largest city of Louisville. In the 2015 U.S. Census Estimate, the city’s population was 314,488, anchoring a metropolitan area of 489,435 people and a combined statistical area of 708,677 people.

It is the location of the , The Red Mile and race courses, , the world’s largest basketball-specific arena, , the and Bluegrass Community & Technical College.

P. 2 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL www.ColliersMultifamilyEast.com MULTIFAMILY ADVISORY GROUP P. 3 WE KNOW YOUR MARKET SUPPLY AND DEMAND According to the Bureau of Labor Statistics, job growth in Lexington-Fayette, KY Metro Area was 0.5% in July 2016, reflecting 1,400 Market Survey Results and Forecasts jobs added during a 12-month period. Sequential Month Annual 3Q15 4Q15 1Q16 2Q16 Jul-16 2014 2015 2016F 2017F 2018F 2019F 2020F Axiometrics forecasts Lexington-Fayette, KY Metro Area’s job growth to be 1.9% in 2017, with 5,215 jobs added. Job growth is Effective Rent Per Unit $808 $801 $802 $825 $837 $764 $794 $822 $854 $880 $900 $925 expected to average 1.5% from 2018 to 2020, with an average of 4,283 jobs added each year. Per Sq. Ft $0.88 $0.87 $0.87 $0.90 $0.91 $0.83 $0.86 $0.89 $0.93 $0.96 $0.98 $1.01 Effective Rent Growth - Annually 4.0% 5.9% 4.8% 3.1% 4.3% 1.6% 3.9% 3.5% 3.9% 3.0% 2.3% 2.8% On the supply side, permits for 919 multifamily units were issued in the 12 months ending in June 2016, up 142 units from the prior Effective Rent Growth - Quarterly 0.9% -0.8% 0.1% 2.8% year’s sum. In terms of total residential housing, 2,501 units were permitted in the 12 months ending June 2016, an increase of 295 Occupancy Rate 94.2% 93.9% 94.0% 94.8% 94.6% 92.8% 93.4% 94.4% 94.8% 94.4% 93.9% 94.1% units from the prior year’s total. Occupancy Change - Annually 1.0% 0.7% 2.0% 1.6% 0.9% -0.3% 0.6% 1.1% 0.3% -0.4% -0.6% 0.2% Occupancy Change - Quarterly 0.9% -0.3% 0.1% 0.8% Market Employment and Permitting Economic Concessions Annual June-16 Annual Forecast Concession Value $-6.10 $-9.01 $-8.82 $-11.45 $-9.41 $-12.04 $-9.08 2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F As a % of Asking Rent -0.8% -1.1% -1.1% -1.4% -1.1% -1.5% -1.1% Employment (000s) 257.1 264.5 270.8 269.0 144,185.0 273.9 279.1 283.3 287.2 291.9 Job Gain (000s) 6.1 7.4 6.2 1.4 2,411.0 3.1 5.2 4.2 3.9 4.8 Job Growth (%) 2.4% 2.9% 2.4% 0.5% 1.7% 1.1% 1.9% 1.5% 1.4% 1.7% Total Residential Permitting 1,612 1,580 2,206 2,302 1,058,258 2,905 3,786 4,767 3,208 2,701 Relative Change -29.9% -2.0% 39.6% 28.1% 3.9% 31.7% 30.3% 25.9% -32.7% -15.8% Single Family Units Permitted 1,314 1,317 1,381 1,378 658,769 Relative Change 9.2% 0.2% 4.9% 13.6% 10.9% Multifamily Units Permitted 230 194 777 866 370,060 Relative Change -77.9% -15.7% 300.5% 61.3% -6.6% Multifamily as a % of Total 14.3% 12.3% 35.2% 37.6% 35.0% Demand/Supply Ratio Job Gain / Total Residential Units Permitted 2.7 4.6 4.0 0.8 2.4 1.4 1.8 1.1 0.8 1.5 Job Gain / Single Family Units Permitted 5.1 5.7 4.7 1.2 4.1 Job Gain / Multifamily Units Permitted 5.9 32.3 32.2 2.6 6.1

Multifamily Absorption and Supply Annual 2Q16 Annual Forecast 2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F RECENT SALES Total Units 598 311 608 1,122 322,402 767 484 303 258 724 Absorbed Date Property Name Address City Units Year Built Price in $ $/Units New Supply 935 206 360 533 350,290 579 376 503 646 442 May-16 300 At The Circle 215 Codell Dr Lexington 300 1970 / 2012 25,900,000 86,333 Inventory Growth 1.9% 0.7% 0.9% 1.1% 1.4% 1.3% 1.0% 1.0% 1.5% 1.1% Apr-16 Liberty Heights Apartments 1749 Liberty Rd Lexington 104 1969 2,800,000 26,923 Mar-16 Derby Hills 159 Elkhorn Meadows Dr Georgetown 144 1997 12,000,000 83,333 Mar-16 Oak Grove at Lexington 3901 Rapid Run Dr Lexington 230 1998 19,300,000 83,913 Dec-15 The Vue 2070 Garden Springs Dr Lexington 314 1973 11,000,000 35,032 Sep-15 Old Farm Apts 3571 Appian Way Lexington 330 1985 / 2004 19,375,000 58,712 Sep-15 Richmond Green 108 Richmond Green Dr Richmond 60 1998 2,125,000 35,417 Apartments Aug-15 Christ Church Apts 137 Rose St Lexington 168 1968 4,000,000 23,810 Jun-15 One Hundred Chevy Chase 100 Lakeshore Dr Lexington 244 1970 13,500,000 55,328 Jun-15 Lexington Villas 200 Alsab Ct Lexington 152 1972 5,390,000 35,461 Apr-15 Kampus Square 318 Translyvania Park Lexington 116 1965 9,500,000 81,897 Mar-15 Matador North Apartments 1037 Winburn Dr Lexington 170 1970 2,912,934 17,135 Mar-15 Stoney Falls 2020 Armstrong Mill Rd Lexington 396 1986 25,450,000 64,268 Feb-15 Raintree 175 N Locust Hill Dr Lexington 480 1986 28,222,615 58,797 Feb-15 Stoney Brooke 175 N Mount Tabor Rd Lexington 232 1986 13,852,385 59,709 Source: AXIOMetrics. RCA

P. 4 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL www.ColliersMultifamilyEast.com MULTIFAMILY ADVISORY GROUP P. 5 IDENTIFIED SUPPLY PIPELINE Source: CoStar As of August 21, 2016, Axiometrics has identified 509 apartment units scheduled for delivery in 2016, of which, 329 have been # Name Status Owner Address Market Units delivered. As a comparison, there were 399 apartment units delivered in 2015. Properties delivered to the market in the last 12 months 1 The Avenue Lease Up VITA Property Management Group 801 W Brannon Rd Jessamine County 240 have achieved an average asking rent of $903 per unit, or $0.92 per square foot. Effective rent has averaged $862, or $0.87 per 2 WaterStone at Hamburg Under Construction Miller-Valentine Group 2785 Polo Club Dr East Fayette County 264 square foot, resulting in an average concession value of $-40.92. As a comparison, existing properties in the market had an average 3 The Midlands Phase II Under Construction April L Smith 222 Midland Ave Kenwick 23 asking rent of $836 per unit ($0.91 per square foot) and an average effective rent of $825 per unit, or $0.90 per square foot, in 2Q16. 4 Emerald Twenty Four Under Construction Ball Homes 1024 Greendale Rd Outer Northeast Fayette 50 County Concessions for existing properties averaged $-11.45. 5 Emerald Twenty Four Phase II Under Construction Ball Homes 1024 Greendale Rd Outer Northeast Fayette 337 County Submarket Delivery Schedule 6 The Village at Wyndham Woods Under Construction Lex Properties LLC 3753 Kings Glen Park Outer South Fayette County 22 7 The Tracery Apartments Under Construction Ball Homes 2200 Tracery Oaks St Outer South Fayette County 196 Pipeline Delivery Schedule Pipeline Lease Up Trend 8 The Summit at Fritz Farm Under Construction Bayer Properties 4100 Nicholasville Rd Outer Southeast Lexington 306 Units Absorbed Asking Rent Effective Rent 9 Palomar View Apartments Under Construction David M Tate 4121 Reserve Rd Palomar 144 Top Submarkets 2014 2015 2016 Total Totals PPM Per Unit PSF Per Unit PSF 10 The BLVD at Hays - Phase II Proposed Ball Homes 842 Hays Blvd Outer Southeast Fayette 280 East Fayette County 376 274 97 747 30 15 $941 $0.99 $941 $0.99 County Jessamine County 104 136 240 166 15 $908 $0.94 $839 $0.87 Total Units 1,862 North Circle 34 34 $947 $0.97 $947 $0.97 Scott County 138 138 18 3 $884 $0.83 $884 $0.83 West Fayette County 140 21 104 265 214 9 $903 $0.91 $860 $0.87 Lexington-Fayette, KY 516 399 509 1,424 *Based on 2016 deliveries *Trend based on a trailing 12 month period

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P. 6 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL www.ColliersMultifamilyEast.com MULTIFAMILY ADVISORY GROUP P. 7 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 WHO WE ARE specializes in your market you need The East Region One of the largest and most Multifamily Advisory Group. experienced teams of multifamily Colliers International has one of the largest and specialists in the industry most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and MORE THAN singular focus, make us uniquely successful in helping our clients achieve their disposition objectives. 50 How are we able to bring together the skills Dedicated Multifamily Professionals & Advisors and tools necessary to complete challenging assignments? Our East Region Multifamily

Advisory Group is connected by purpose COVERING OVER and focus. Our team is dedicated to sharing STATES information on market opportunities, capital sources and buyers/sellers to achieve the best 20 results for our clients. Expansive geographic footprint

MORE THAN 30,000 Units sold since 2011

$2.0B Group gross transaction value in since 2011 “We were extremely pleased with the East Region team and its ability to attract an incredible amount of interest in our 3 assets. The number of offers received and the end results exceeded our expectations. They have a talented group who was a pleasure to work with. Their performance stands out against any of the groups we work with nationally.” Nels Billsten, Vice President | CORE Realty Holding Management

P. 8 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL www.ColliersMultifamilyEast.com MULTIFAMILY ADVISORY GROUP P. 9 John Ashley Will Mathews Brooks Colquitt Craig Brown ASSOCIATE | EAST REGION PRINCIPAL | EAST REGION ASSOCIATE | EAST REGION ASSOCIATE | EAST REGION [email protected] INSTITUTIONAL CLIENT GROUP [email protected] [email protected] DIR +1 615 850 2715 [email protected] DIR +1 404 978 2337 DIR +1 404 978 2336 DIR +1 404 877 9285

AT YOUR SERVICE

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