Market Overview

Lansing Market Overview Developments

JDS REAL ESTATE OFFERING MEMORANDUM SERVICES, INC. Lansing Market Overview

Lansing at a Glance

METRO POPULATION AVERAGE HH INCOME MEDIAN HOME PRICE 472,400 $98,440 $98,484

IN GROSS METRO PRODUCT COST OF LIVING PROJECTED JOB GROWTH $24.4 B 11.3% 1.5% (below national average)

Lansing is the capital of the US state of Michigan. The Lansing Metropolitan Area, colloquially As the capital city of Michigan and next-door It is mostly in Ingham County, although portions referred to as “Mid-Michigan”, is an important neighbor to one of the state’s major universities, of the city extend west into Eaton County and center for educational, cultural, governmental, Lansing attracts people from all across the region north into Clinton County. The 2010 Census commercial, and industrial functions. The area and benefits from a culturally diverse landscape. placed the city’s population at 114,297, making it is home to two medical schools, one veterinary Downtown is a charming, historic district along the fifth largest city in Michigan. The population school, two nursing schools, two law schools— the Grand River. The Michigan State Capitol of its Metropolitan Statistical Area (MSA) was including Western Michigan University and overlooks a walkable collective of storefront 464,036, while the even larger Combined Michigan State University—a Big Ten Conference shops, cafes, and bars, mainly situated along Statistical Area (CSA) population, which includes university (Michigan State), the Michigan State South Washington Square. Lush riverside parks Shiawassee County, was 534,684. It was named Capitol, the state Supreme Court, the Court of like Hawk Island and Scott Woods give the locals the new state capital of Michigan in 1847, ten Appeals, a federal court, the Library of Michigan scenic areas to picnic, exercise, or just hang out years after Michigan became a state. and Historical Center, and headquarters of four and enjoy the scenery. national insurance companies

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FLOURISHING METROPOLITAN AREA Rated as the 3rd best economy in the mid-west, Lansing is experiencing To that end a $15-million Hilton Homewood Suites is among four hotels in strong economic growth and development throughout its neighborhoods, various stages of construction across Greater Lansing. Another three are leading to a metropolitan area with high sustained demand for multifamily approved and slated to open within the next few years. Four more hotels properties. Major employers such as Jackson National Life Insurance are still in the early planning stages. Co. recently investing upward of one hundred million dollars and General Motors have recently invested $580 Million in local expansion efforts, In addition to the strong employment drivers, the market enjoys a robust helping fuel Lansing’s strong annual job growth and low unemployment average household income of over $98,000 in Q1 of 2017. The annual figures. Developers continue to invest in multi-million dollar mixed-use average household income has enjoyed a positive growth rate in every year projects in downtown Lansing, with private investment in development since 2005. The high average household income is derived from several experiencing a strong surge in the post-recession years. Overall, Lansing high paying employment opportunities in Lansing. Other Primary drivers remains poised for steady and stable growth over the long term. of high income employment include, education, with the Michigan State University and medical jobs with Sparrow Health System, which is the Each year, 4.8 million people visit the region, helping to generate an largest health system in the area. economic impact of $1.1 billion, according to the visitors bureau.

Vacancy Vacancy Asking Asking Population Household Avg HH AHHI Employment Year Population Households Employment Rate Change Rent Rent Chg Change Change Income Change Change

2012 3.0 -130 (BPS) $732 2.5% 467,300 0.2% 187,540 0.7% $88,825 2.8% 217,100 0.5%

2013 2.9 -10 (BPS) $748 2.2% 469,110 0.4% 189,260 0.9% $88,043 -0.9% 221,900 2.2%

2014 2.8 -10 (BPS) $762 1.9% 471,270 0.5% 190,910 0.9% $90,785 3.1% 222,670 0.3%

2015 2.0 -80 (BPS) $784 2.9% 472,540 0.3% 192,070 0.6% $94,836 4.5% 226,500 1.7%

2016 2.2 20 (BPS) $812 3.6% 473,670 0.2% 192,940 0.5% $97,645 3.0% 233,170 2.9%

2017 2.1 -10 (BPS) $818 0.7% 474,320 0.1% 194,250 0.7% $101,765 4.2% 236,530 1.4%

2018 2.0 -10 (BPS) $829 1.4% 474,790 0.1% 195,470 0.6% $105,617 3.8% 239,230 1.1%

2019 2.0 0 (BPS) $848 2.2% 475,140 0.1% 196,730 0.6% $109,591 3.8% 241,250 0.8%

2020 2.1 10 (BPS) $871 2.8% 475,380 0.1% 197,920 0.6% $113,261 3.3% 242,120 0.4%

2021 2.2 10 (BPS) $894 2.6% 475,760 0.1% 199,120 0.6% $116,392 2.8% 242,500 0.2%

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ansin Midwest S

ABOVE-AVERAGE MSA MULTIFAMILY PERFORMANCE UNIT MIX RENT DETAILS Throughout the Lansing-East Lansing metropolitan statistical area, rental apartment activity has been strong in recent quarters. Effective rents grew by 1.9% between the first and second quarters of 2017, corresponding to 1Q 2017 Avg SF YTD 1 Year 3 Studio/Efficiency $611 524 -4.8% 5.8% a 3.7% annual growth rate; this far exceeds the national average growth rate of 2.3%. Occupancy throughout the market is equally strong. Market 1 Bedroom $679 680 ansin-1.6% Midwest3.9% S forecast in the next 3 years puts Lansing in the top 3 economies in the 2 Bedroom $862 976 0.6% 2.9% midwest and the top 20 nationally. With an occupancy rate of 98 % in 3 Bedroom $1,138 1,240 0.9% 6.1% the second quarter of 2017; since 2011, the overall rate of occupancy Avg over period ending 3/31/17 12/31/16 throughout the market has averaged a robust 97%. VACANCY RATE DISTRIBUTION ASKING RENT COMPARISONS 3 LOW 25% MEAN MEDIAN 75% HIGH ansin Midwest S 0.0% Metro:1.0% Lansing 2.0% 1.6% 2.7% 10.4% 3 ansin Midwest S

3 ansin Midwest S 3 Annualized ASKING RENT/SF 5 Year 5 Yr Forecast 2.9% 2.2% 4.2% 4.5% nder . . . . . . . ansin Midwest S 4.5% 5.0% . . . . . . . ver 12/31/16 12/31/21 er o roerties 5 Year 5 Yr Forecast 4 4

3 ansin Midwest S

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ansin Midwest S Developments

PROPERTY ADDRESS DESCRIPTION 1

Sparrow Health Systems Sparrow Health System is developing a $64 Million five story Herbert-Herman cancer center. The glass-fronted 132,000 square foot building will house all 1215 E Michigan Ave of the health system’s cancer treatments under one roof for the first time. Complimenting the hospital will be a new dining area, called the Gathering Place 1 Lansing, MI featuring a full service Starbucks.

2 Sparrow Health System Health Center & Also in development is the $20 Million, three-story health center which is set to partially open in November for primary care services. Sparrow Health System Laboratory is nearing completion of a $10 million Sparrow Reference laboratory. The 35,000 sf facility will house labs located within the St. Lawrence campus. 2 1210 W Saginaw St Lansing, MI

LOC Performance Products LOC Performance Products announced a $96.5 million expansion to the 1600 N. Larch St property. The expansion will provide 700 new jobs and is 3 1600 N. Larch St expected to create a huge economic boost in the area. Lansing, MI

School For The Blind Project Indianapolis-Based TWG Development will redevelop the former Michigan School for the Blind to low-income senior housing. At $24.4 million the plan 4 656 W Maple St includes creating 72 multi-family units and 60 senior units between 3 buildings. Lansing, MI

5 REO Town Investment - The Venue at East Town REO town has seen a $500,000 investment that will allow for development of a brewery and pottery studio. 2010 – 2020 East Lansings East Side is the site of “The Venue at East Town”, a $5 million 4 story development that will have 39 apartments atop retail space on the first floor. Michigan Ave The Gillespie Co. Strange Matter Coffee and Rajje’s Taphouse have been named as tenants. Lansing, MI

Urban Systems purchased the 500 South Washington Avenue block in the beginning of 2018. 500 South Washington The development plans for the property include building a five-to eight-story 170-unit apartment building. The building will also have retail space on the SW Avenue, Lansing, MI corner of Washington Avenue and Lenawee Street.

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Arcadia Ales & Lansing developer Kris Elliot of Urban Feast obtained the licensing from Arcadia Brewing Co. to build a brewpub and restaurant at 2101 E. Michigan Ave. Smokehouse The 10,000-square-foot brewpub will serve Arcadia brands and will also brew six Lansing-only beers on site. The project will also include an outdoor patio to 2101 E Michigan Ave 1 accommodate 150 people. Lansing, MI

8 Ballein Management of East Lansing has partnered with a Chicago developer to build two 12-story buildings in downtown East Lansing. The first building Center City District would be located on the 100 block of East Grand River Avenue and would include apartments with a grocery store on the first floor. The second would be Albert Ave and Grand built in City Lot 1 off Albert Avenue. It would include retail space on the first floor, a parking deck on the next five levels and housing for people 55 and older River Ave 2 in the top Lansing, MI six floors.

Hilton Homewood Suites Hilton Homewood Suites will be the third hotel built since 2015 at the Heights in Eastwood in Lansing Township. Hyatt Place and Fairfield Inn both opened 2201 Showtime Dr within the last two years at the heights. The 7 story hotel, located next to Walmart, will have 139 rooms. 3 Lansing, MI

Springhill Suites A $10-million Spring Hill Suites hotel will be built at the former Howard Johnson motel at 1100 Trowbridge Road in East Lansing. The four-story hotel will By Marriott have 88 rooms, a swimming pool and a fitness center. A one-story retail building will also be constructed on the site, which will accommodate four tenants, 1100 Trowbridge Road 4 anchored by a restaurant and a drive-thru coffee shop. Lansing, MI

Costco A 157,000-square-foot retail warehouse is being built at 5800 Park Lake Road, the site of the former Four Winds Golf Course. When it opens, Costco will 5800 Park Lake Rd employ 150 people. The $30-million project includes a tire center and a standalone gas station that will have 24 pumps. Lansing, MI

Marketplace Apartments Developer Pat Gillespie is building more riverfront apartments in downtown Lansing. The expansion of Marketplace apartments will add 79 rental units to the 313 N Cedar St area, half of which overlook the Grand River while the rest overlook the Cooley law School Stadium. The apartment complex will have a rooftop patio and Lansing, MI amenities that take advantage of the riverfront, though specifics have not yet been announced.

JDS Real Estate Services, Inc. in association with Kidder Mathews | L3 OFFERING MEMORANDUM 6 The information contained herein is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from JDS Real Estate Services, Inc. in association with Kidder Mathews and should not be made available to any other person or entity without the written consent of JDS Real Estate Services, Inc. in association with Kidder Mathews. This information has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. JDS Real Estate Services, Inc. in association with Kidder Mathews has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, JDS Real Estate Services, Inc. in association with Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has JDS Real Estate Services, Inc. in association with Kidder Mathews conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies. Contact Information

Chris Armes Kidder Mathews [email protected] 760.613.9200 | CA LIC #01379750

Jennifer D. Stein JDS Real Estate Services, Inc. [email protected] MI LIC # 6505385865 | 213.446.5366

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