COLLINS PARK 2001 Harbour Lake Drive Goose Creek, Berkeley County, South Carolina

A MARKET FEASIBILITY STUDY OF

Effective Date: March 29, 2006 Report Date: April 12, 2006

Prepared For

Ms. Leanne Johnson South Carolina Housing Finance and Development Authority 300-C Outlet Pointe Blvd. Columbia, SC 29210

Assignment Code: SOU600V 012

Prepared By

Novogradac & Company LLP 2325 Lakeview Parkway Suite 450 Alpharetta, Georgia 30004 678.867.2333

April 12, 2005

Ms. Leanne Johnson South Carolina Housing Finance and Development Authority 300-C Outlet Pointe Blvd. Columbia, SC 29210

Re: Market Study for Collins Park, Goose Creek, South Carolina

Dear Ms. Johnson:

At your request, Novogradac & Company LLP performed a study of the multifamily rental housing market in the Goose Creek, Berkeley County, South Carolina area relative to the above-proposed Low-Income Housing Tax Credit (LIHTC) project known as Collins Park, (the Subject).

The purpose of this market study is to assess the viability of Collins Park, a proposed development consisting of 48 units. The property will offer affordable rental units restricted to households earning 50 percent and 60 percent or less of the Area Median Gross Income (AMI). The following report provides support for the findings of the study and outlines the sources of information and the methodologies used to arrive at these conclusions. The scope of this report meets the requirements of the South Carolina Housing Finance and Development Agency (SCHFDA), including the following:

• Inspecting the site of the proposed Subject and the general location. • Analyzing appropriateness of the proposed unit mix, rent levels, available amenities and site. • Estimating market rent, absorption and stabilized occupancy levels for the market area. • Investigating the health and conditions of the multifamily housing market. • Calculating income bands, given the proposed Subject rents. • Estimating the number of income-eligible households. • Reviewing relevant public records and contacting appropriate public agencies. • Analyzing the economic and social conditions in the market area in relation to the proposed project. • Establishing the Subject Primary and Secondary Market Area(s) if applicable. • Surveying competing projects, Low-Income Housing Tax Credit (LIHTC) and market rate.

2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia 30004 Telephone 678.867.2333, Fax 678.867.2366 Novoco.com Market Study Cover Letter April 12, 2006

This report contains, to the fullest extent possible and practical, explanations of the data, reasoning, and analyses that were used to develop the opinions contained herein. The report also includes a thorough analysis of the scope of the study, regional and local demographic and economic studies, and market analyses including conclusions. The depth of discussion contained in the report is specific to the needs of the client.

Please do not hesitate to contact us if there are any questions regarding the report or if Novogradac & Company LLP can be of further assistance. It has been our pleasure to assist you with this project.

Respectfully submitted, Novogradac & Company LLP

H. Blair Kincer, MAI Partner Novogradac & Company LLP

Michalena M. Skiadas Manager Novogradac & Company LLP

Julia Buckmaster Real Estate Analyst Novogradac & Company LLP

2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia 30004 Telephone 678.867.2333, Fax 678.867.2366 Novoco.com

ASSUMPTIONS AND LIMITING CONDITIONS

1. In the event that the client provided a legal description, building plans, title policy and/or survey, etc., the consultant has relied extensively upon such data in the formulation of all analyses.

2. The legal description as supplied by the client is assumed to be correct and the consultant assumes no responsibility for legal matters, and renders no opinion of property title, which is assumed to be good and merchantable.

3. All information contained in the report, which others furnished, was assumed to be true, correct, and reliable. A reasonable effort was made to verify such information, but the author assumes no responsibility for its accuracy.

4. The report was made assuming responsible ownership and capable management of the property. The analyses and projections are based on the basic assumption that the apartment complex will be managed and staffed by competent personnel and that the property will be professionally advertised and aggressively promoted

5. The sketches, photographs, and other exhibits in this report are solely for the purpose of assisting the reader in visualizing the property. The author made no property survey, and assumes no liability in connection with such matters. It was also assumed there is no property encroachment or trespass unless noted in the report.

6. The author of this report assumes no responsibility for hidden or unapparent conditions of the property, subsoil or structures, or the correction of any defects now existing or that may develop in the future. Equipment components were assumed in good working condition unless otherwise stated in this report.

7. It is assumed that there are no hidden or unapparent conditions for the property, subsoil, or structures, which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering, which may be required to discover such factors. The investigation made it reasonable to assume, for report purposes, that no insulation or other product banned by the Consumer Product Safety Commission has been introduced into the Subject premises. Visual inspection by the consultant did not indicate the presence of any hazardous waste. It is suggested the client obtain a professional environmental hazard survey to further define the condition of the Subject soil if they deem necessary.

8. A consulting analysis market study for a property is made as of a certain day. Due to the principles of change and anticipation the value estimate is only valid as of the date of valuation. The real estate market is non-static and change and market anticipation is analyzed as of a specific date in time and is only valid as of the specified date.

9. Possession of the report, or a copy thereof, does not carry with it the right of publication, nor may it be reproduced in whole or in part, in any manner, by any person, without the prior written consent of the author particularly as to value conclusions, the identity of the author or the firm with which he or she is connected. Neither all nor any part of the report, or copy

thereof shall be disseminated to the general public by the use of advertising, public relations, news, sales, or other media for public communication without the prior written consent and approval of the appraiser. Nor shall the appraiser, firm, or professional organizations of which the appraiser is a member be identified without written consent of the appraiser.

10. Disclosure of the contents of this report is governed by the Bylaws and Regulations of the professional appraisal organization with which the appraiser is affiliated: specifically, the Appraisal Institute.

11. The author of this report is not required to give testimony or attendance in legal or other proceedings relative to this report or to the Subject property unless satisfactory additional arrangements are made prior to the need for such services.

12. The opinions contained in this report are those of the author and no responsibility is accepted by the author for the results of actions taken by others based on information contained herein.

13. All applicable zoning and use regulations and restrictions are assumed to have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report.

14. It is assumed that all required licenses, permits, covenants or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which conclusions contained in this report is based.

15. On all proposed developments, Subject to satisfactory completion, repairs, or alterations, the consulting report is contingent upon completion of the improvements in a workmanlike manner and in a reasonable period of time with good quality materials.

16. All general codes, ordinances, regulations or statutes affecting the property have been and will be enforced and the property is not Subject to flood plain or utility restrictions or moratoriums except as reported to the consultant and contained in this report.

17. The party for whom this report is prepared has reported to the consultant there are no original existing condition or development plans that would Subject this property to the regulations of the Securities and Exchange Commission or similar agencies on the state or local level.

18. Unless stated otherwise, no percolation tests have been performed on this property. In making the appraisal, it has been assumed the property is capable of passing such tests so as to be developable to its highest and best use, as detailed in this report. 19. No in-depth inspection was made of existing plumbing (including well and septic), electrical, or heating systems. The consultant does not warrant the condition or adequacy of such systems.

20. No in-depth inspection of existing insulation was made. It is specifically assumed no Urea Formaldehyde Foam Insulation (UFFI), or any other product banned or discouraged by the Consumer Product Safety Commission has been introduced into the appraised property. The appraiser reserves the right to review and/or modify this appraisal if said insulation exists on the Subject property.

21. This consulting report specifically permitted no contact with or disclosure of who the Subject developer is, and reliance solely upon information received from IFA was utilized in this analysis.

22. Acceptance of and/or use of this report constitute acceptance of all assumptions and the above conditions. Estimates presented in this report are not valid for syndication purposes.

Table of Contents

A. EXECUTIVE SUMMARY...... 9

B. PROJECT DESCRIPTION ...... 15

C. SITE EVALUATION ...... 19

D. MARKET AREA ...... 23

E. MARKET AREA ECONOMY ...... 26

F. COMMUNITY DEMOGRAPHIC DATA...... 33

G. PROJECT-SPECIFIC DEMAND ANALYSIS...... 39

H. SUPPLY ANALYSIS...... 51

I. PROPERTY INTERVIEWS...... 61

J. CONCLUSIONS AND RECOMMENDATIONS...... 69

K. ANALYST QUALIFICATIONS...... 74

L. SIGNED STATEMENT REQUIREMENTS ...... 79

ADDENDA...... 81

A. EXECUTIVE SUMMARY

Collins Park – Goose Creek, SC – Market Study

EXECUTIVE SUMMARY

Subject Property Overview: Collins Park is a proposed 48-unit apartment community restricted to households earning no more than 50 and 60 percent of the Area Median Income (AMI). The Subject will offer two and three-bedroom units.

Date of Construction: The Subject is proposed construction. We have projected 2008 as the date of market entry.

Development Location: The Subject will be located on Harbour Lake Drive in Goose Creek, Berkeley County, South Carolina.

Construction Type: The Subject will consist of four, two-story walk-up garden style buildings and a clubhouse. The exterior of each building will have brick veneer and hardiplank siding.

Occupancy Type: Family.

Target Income Group: The Subject will target households earning 50 and 60 percent of the AMI. Household sizes ranging from two to five persons are expected to be residents of the Subject. The maximum allowable household income for the Subject is $36,540 (five- person household at 60 percent AMI). The minimum allowable household income for the Subject is $18,994 (based on 35 percent of the annualized gross rent for the smallest unit).

Land Area: The Subject will be located on a 5.4 acre site.

Proposed Rents and Unit Mix: The following table details the Subject’s proposed rents and unit mix.

PROPOSED RENTS LIHTC Maximum Utility Allowable HUD Fair Number Asking Allowance Gross Gross Market Unit Type of Units Rent (1) Rent Rent Rents 50% AMI 2BR/2BA 12 $400 $154 $554 $635 $663 3BR/2BA 12 $500 $174 $674 $733 $864 60% AMI 2BR/2BA 12 $500 $154 $654 $762 $663 3BR/2BA 12 $595 $174 $769 $879 $864 Total 48 Notes (1) Source of Utility Allowance provided by the Developer.

Site Evaluation: The Subject site is located on Harbour Lakes Drive. The neighborhood consists of primarily single-family homes and multifamily, both rental apartments and for sale townhouses. Novogradac & Company, LLP 10

Collins Park - Goose Creek, SC – Market Study

Harbour Lakes Drive intersects with Red Bank Road approximately 0.1 miles northeast of the Subject site. Red Band Road is lined with retail and commercial uses.

NORTH- Immediately north of the Subject site is vacant undeveloped land. North of the vacant land is a Food Lion anchored retail plaza. Other stores in this plaza include a CVS, Chinese restaurant, H&R Block, a barber shop, Rent Way, a nail salon, and other stores. The plaza appeared to be fully occupied. There are also new townhouses for sale and the Harbour Lake Self Storage facility. North of the self storage facility is an older retail plaza anchored by a Mexican restaurant.

SOUTH- The area south of the Subject site consists of multifamily properties for both sale and rent. Immediately south of the Subject site is the River Ridge Townhouses. The townhouses appear in average condition and were most likely built in the 1970s or 1980s. We attempted to obtain the purchase price, however have not been able to do so. South of River Ridge Townhouses is Rosewood Townhouses and Summercreek Apartments.

There are two market rate apartment communities south of the Subject site, Summercreek Apartments and Pine Harbour Apartments. Summercreek Apartments was built in 1984 and offers two-bedroom units and is 100 percent occupied. Pine Harbour Apartments was built in 1976 and offers one-, two-, and three-bedroom units. This property is 99 percent occupied. Both of these properties are detailed in the Supply analysis of this report.

EAST- East of the Subject is the vacant undeveloped land.

WEST- West of the Subject is a combination of single family homes and multifamily properties. The single family homes appeared to be in average to good condition and were most likely built in the 1980s. The Townhouses at Pine Harbour I and II offers units for ownership and for rent. The Townhouses at Pine Harbour II is a market rate rental development and offers 187 two-bedroom units. This development was built in 1982 and is 98 percent occupied. The Townhouses at Pine Harbour I is a for sale development. No prices were available.

Inspection Date: March 30, 2006.

Ownership and History

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Collins Park - Goose Creek, SC – Market Study

of the Subject: The developer has applied for a reservation of Low-Income Housing Tax Credits in order to construct the project.

Market Area Definition: The boundaries of the PMA are defined as Interstate 26 to the west, Interstate 526 to the south, the US Military reservation to the east, and Alternate U.S. Route 17, U.S. Route 176, Mt. Holly Road, and Medway Drive to the north. These boundaries were drawn based on conversations with local property managers and on geographic indicators, such as major roads or intersections. The PMA covers approximately 44 square miles. According to the property manager at Pine Lakes Apartments, 70 percent of their tenants are from Goose Creek and the northern Charleston area. We have delineated the PMA at Interstate 285 as this provides for a distinct boundary. We do expect some tenants to originate from south of Interstate 285. The property manager also indicated that there are some tenants from the Summerville area and southern Dorchester County. The remaining 30 percent of households are from out of state.

Market Area Economy: Berkeley County and the Charleston – North Charleston MSA have healthy economies, with a decreasing unemployment rate and a growing workforce. The region continues to attract new business and has experienced few business closures or downsizing in recent years. In 2006, Expansion Management magazine, named Charleston as one of the top United States located for European expansions for the sixth consecutive year. The regional economy has averaged an annual increase of 3,812 new jobs with jobs with nine of the 15 years experiencing overall job growth and two years of stable employment. The region has experienced significant growth in recent years which has resulted in an increased demand for additional housing. Furthermore, similar to many other metropolitan and coastline communities, the region has been experiencing a condominium conversion trend which has decreased the supply for new and affordable rental housing in the region. Based on current research and statistics, a significant percentage of the population will likely be income- eligible for the Subject, because of the lower-wage paying occupations that dominate the region.

Market Area Demographics: Both the PMA and the MSA have reported significant increases in population. Similar to population, the rate of growth in the number of households within the PMA is considered very positive. The rate of growth in households in the PMA is expected to increase at a slightly more rapid pace than the rate of growth in the population. As with population

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Collins Park - Goose Creek, SC – Market Study

growth, we believe this projected growth is a positive indicator for the Subject. Households within the PMA reside in predominately owner occupied residences. This trend is projected to remain relatively unchanged through 2010. Overall, the strong growth projections reported within the PMA are considered a very positive indicator for the Subject.

Capture Rates: The Subject’s capture rates vary from 7.5 to 19.4 percent with an overall capture rate of 10.1 percent. The capture rates appear adequate and indicate demand for the Subject’s units. The following table illustrates the indicated capture rates derived from our standard SCHFDA demand analysis.

Bedrooms Total Supply Net Units Capture Demand Demand Proposed Rate 2 Bedroom at 50% AMI 196 39 157 12 7.6% 2 Bedroom at 60% AMI 309 247 62 12 19.4% 3 Bedroom at 50% AMI 125 31 94 12 12.8% 3 Bedroom at 60% AMI 197 37 160 12 7.5% Project Overall 827 354 473 48 10.1%

Market Supply Conclusions: Our market interviews indicate strong demand for additional affordable housing in the market area. The Subject’s proposed rents are significantly below the average rents at the market rate properties. Pinebrook Pointe, Springhill Apartments, and Summercreek offer the lowest rents, which are slightly below the Subject’s rents at 60 percent AMI. These properties were built in the 1970s/80s and are significantly inferior when compared to the Subject with regards to condition, unit size, and in-unit amenities. These properties are located within the same neighborhood as the Subject. The highest rental rates are being achieved at the newer market rate properties. These properties also reported the highest number of military tenants. They indicated that their rents are in-line with the military housing voucher. These properties are significantly superior when compared to the older market rate properties within the Subject’s neighborhood. We believe that the proposed rents are reasonable and will offer a positive price value relationship in the market area.

Projected Absorption Period: Three of the comparable properties were able to report absorption rates, Gardens at Montague, Osprey Place, and Alta Shores. Gardens at Montague reported an absorption rate of 21 months, or three to four months. Osprey Place stated that they were stabilized within seven to eight months, or 15 units per month. Alta Shores reported that their absorption rate was 24 Novogradac & Company, LLP 13

Collins Park - Goose Creek, SC – Market Study

units per month on average, or 10 months. All three LIHTC properties report lengthy waiting lists. There are three proposed LIHTC properties in the PMA. According to our demand estimates, there is adequate demand for the Subject as well as the proposed properties. We believe that the Subject will have an absorption rate of four months, or 12 units per month.

MARKET STUDY CONCLUSION: The project is recommended as proposed. Our market interviews indicate strong demand for additional affordable housing in the market area. The two closest LIHTC properties reported full occupancy and lengthy waiting lists. Birchwood Apartments reported maintaining over 400 households on their waiting list. The Subject will offer some of the lowest rents when compared to the LIHTC properties. This will give the Subject a positive price value relationship. There are several new projects either proposed or under construction in the PMA. Several of the developments will be for sale units or market rate units. A significant portion of the market rate tenants are reported to be affiliated with the military. However, none of the LIHTC properties reported military tenants as they are over income qualified. There appears to be sufficient non-military demand in the market. The Subject is well-designed with large units and a full range of amenities to accommodate the tenancy. As proposed, the Subject property appears to be a well-conceived addition to the affordable housing market and we recommend the property as proposed.

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B. PROJECT DESCRIPTION

Collins Park – Goose Creek, SC – Market Study

PROPERTY DESCRIPTION

The Subject property will consist of a total of 48 units in four buildings. Our description of the improvements is based on a site inspection as well as a review of information provided by SCHFDA. We assume that this information is accurate.

Development Location: The Subject will be located on Harbour Lake Drive in Goose Creek, Berkeley County, South Carolina. Older multifamily properties for sale and for lease, a Food Lion anchored shopping plaza, and a storage facility are all nearby uses.

Construction Type: The Subject will be a brick and hardiplank siding, two-story garden apartment complex.

Occupancy Type: Family.

Special Population Target: None.

Proposed Rents and Unit Mix: The following table details the Subject’s proposed rents and unit mix.

Number of Buildings/Stories: Four, two-story buildings.

Unit Size: The following table details the proposed unit mix and unit sizes for the Subject.

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UNIT MIX AND SQUARE FOOTAGE Number Unit Size Gross Unit Type of Units (SF) Area 2BR/2BA 24 1082 25,968 3BR/2BA 24 1322 31,728 Total 48 57,696

Structure Type: The Subject will be constructed in four, two-story, garden-style buidings of 12 units each. Additionally, the Subject will be constructed with a 1,200 square foot community building.

Utility Structure: All of the units will be individually metered for electricity. The tenant will be responsible for paying electric, water, and sewer. The landlord will pay for trash. The following table depicts the utility allowance calculations.

UTILITY ALLOWANCES Utility Paid By Two-bedroom Three-bedroom Utilities-Electricity Tenant $40.00 $50.00 Utilities-Electric Heating Tenant $19.00 $23.00 Utilities-Electric Cooking Tenant $8.00 $10.00 Utilities-Electric Heated Hot Water Tenant $25.00 $30.00 Utilities-Water and Sewer Services Tenant $55.00 $55.00 Utilities-Trash Collection Landlord $6.00 $6.00 Total Utility Allowance $153.00 $174.00 Total Tenant Paid Utilities $147.00 $168.00 Source: The SC Region III Housing Authority, dated March, 2006

The utility allowance provided by the local housing authority differs by $6 when compared to the utility allowance provided by the developer. The proposed rents are well below the maximum allowable level, therefore, we have used the developer’s utility allowance.

Existing or Proposed Project Based Rental Assistance: None.

Community Amenities: Community amenities will include an on-site leasing office, community building with a community room, central laundry, and playground.

Unit Amenities: Units will be equipped with a range, refrigerator, dishwasher, microwave, garbage disposal, central air conditioning, washer/dryer hook-ups, walk-in closets, patio/balconies, ceiling fans, carpet and vinyl flooring in wet areas, and window coverings.

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Parking: There will be surface parking located at the Subject that will offer 96 parking spaces. This equates to two parking spaces per unit. We believe the parking will be adequate for the Subject.

Date of Construction: The Subject is proposed construction. The estimated completion date for the Subject is March 2008.

Current Tenancy: The Subject does not exist and therefore, has no current tenancy.

Conclusion: The Subject will be an above average-quality brick and hardiplank siding apartment complex, similar to most of the inventory in the area. As a newly constructed property, the Subject will not suffer from deferred maintenance, functional obsolescence, or physical obsolescence.

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C. SITE EVALUATION

Collins Park – Goose Creek, SC – Market Study

The location of a multifamily property can have a substantial negative or positive impact upon the performance, safety and appeal of the project. The site description discusses the physical features of the site, as well as the layout, access issues, and traffic flow.

Date of Site Visit: March 30, 2006.

Frontage: The Subject will have frontage along Harbour Lake Drive.

Layout and Curb Appeal: As new construction, the Subject should have excellent curb appeal. We have reviewed the site plan and the Subject appears to have been designed in a functional and attractive layout.

Topography: The site is heavily wooded and appeared to be flat.

Surrounding Land Uses: The Subject site is located on Harbour Lakes Drive. The neighborhood consists of primarily single-family homes and multifamily, both rental apartments and for sale townhouses. Harbour Lakes Drive intersects with Red Bank Road approximately 0.1 miles northeast of the Subject site. Red Band Road is lined with retail and commercial uses.

EAST- East of the Subject is the vacant undeveloped land.

Access and Traffic Flow: The Subject site is located on Harbour Lakes Drive. This street is not a through street. Single family and multifamily properties line the street and thus traffic flow is limited to those who are residents in the neighborhood. Red Bank Road is the primary artery in the neighborhood, which is less than 0.2 miles from the Subject site. Red Bank Road provides access to North Rhett Street and Highways 52/78. Access and traffic flow are considered to be adequate for the Subject.

Availability of Public Transportation: There is no public transportation available in Berkeley County. There is public transportation throughout Charleston County provided by CARTA.

Zoning of Surrounding Area: The development site for the Subject site and the surrounding land is currently zoned as multifamily residential district.

Road/Infrastructure Proposed Improvements: We witnessed no current road improvements in the immediate neighborhood.

Proximity to Local Services: The Subject is located in reasonable proximity to local services including medical services and retail. The following table details the Subject’s distance from key locational amenities. A Locational Amenities Map, corresponding to the following table is provided in the addenda to this report.

Locational Amenitites Map # Name Service Distance to Subject 1 Goose Creek Police Department Law Enforcement 4.2 miles 2 CvS Pharmacy Drug Store/Pharmacy 0.1 miles 3 Food Lion Grocer 0.1 miles 4 Goose Creek Medical Center Hospital 2.9 miles 5 Marrington Elementary School Elementary School 2.0 miles 6 Sedgefield Middle School Middle School 0.6 miles 7 Goose Creek High School High School 0.4 miles 8 Berkeley County Library Library 3.5 miles Novogradac & Company LLP 21 Collins Park – Goose Creek, SC – Market Study

Detrimental Influences: No significant detrimental influences.

Environmental Concerns: None visible upon site inspection. We recommend the sponsor obtain a Phase 1 environmental study to determine any possible environmental risk.

Flood Plain: The Subject is located outside the flood zone according to www.floodinsights.com panel number 0685D, dated October 16, 2003.

Neighborhood Crime: Interviews in the market area did not reveal any local concern with regards to crime in the Subject’s neighborhood. Further, according to South Carolina’s Law Enforcement Division’s 2004 County Crime Rates per 100,000 persons, Berkeley County has a crime index of 331. The statewide average crime index is 525.6. Therefore, crime in the Subject’s county is far below the statewide average and does not appear to be an issue.

Conclusion: The Subject is located within a neighborhood with several residential uses include single family and multifamily. The immediate surroundings include family homes, townhouses, and apartment developments. There is also a Food Lion anchored shopping plaza north of the Subject site. Overall, the Subject will be a positive addition to the neighborhood.

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D. MARKET AREA

Collins Park – Goose Creek, SC – Market Study

PRIMARY MARKET AREA

For the purpose of this study, it is necessary to define the market area, or the area from which potential tenants for the project are likely to be drawn. In some areas, residents are very much “neighborhood oriented” and are generally very reluctant to move from the area where they have grown up. In other areas, residents are much more mobile and will relocate to a completely new area, especially if there is an attraction such as affordable housing at below market rents.

The Primary Market Area has been approved by SCHFDA on March 29th, 2006. This correspondence is in the addenda of the report.

The proposed Subject is a 48-unit family development to be constructed in Goose Creek, South Carolina. The boundaries of the PMA are defined as Interstate 26 to the west, Interstate 526 to the south, the US Military reservation to the east, and Alternate U.S. Route 17, U.S. Route 176, Mt. Holly Road, and Medway Drive to the north. These boundaries were drawn based on conversations with local property managers and on geographic indicators, such as major roads or intersections. The PMA covers approximately 44 square miles. According to the property manager at Pine Lakes Apartments, 70 percent of their tenants are from Goose Creek and the northern Charleston area. We have delineated the PMA at Interstate 285 as this provides for distinct boundary. We do expect some tenants to originate from south of Interstate 285. The property manager also indicated that there are some tenants from the Summerville area and southern Dorchester County. The remaining 30 percent of households are from out of state. Novogradac & Company LLP 24 Name of Proposed Community - Name of City, NC – Market Study

The PMA includes all or part of the following census tracts:

45015020705 45019003111-Partial 45015020804 45019003113-Partial 45015020802 45019003105-Partial 45019003112 45019003107-Partial 45015020803 45019003104-Partial 45015020901 45015020706-Partial 45015020902 45019003500-Partial 45015020805 45019003300-Partial 45015020707-Partial 45019003400-Partial 45015020708-Partial 45015021000-Partial 45015020709-Partial

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E. MARKET AREA ECONOMY

Collins Park – Goose Creek, SC – Market Study

MARKET AREA ECONOMY

Regional and Local Economic Overview

The Subject is located in Goose Creek, Berkeley County, South Carolina. The Subject is approximately 16 miles north of Charleston, South Carolina and falls within the Charleston-North Charleston MSA. The MSA is comprised of Charleston, Dorchester, and Berkeley Counties, and accounts for approximately 583,434 residents. This region is located in the southeastern section of South Carolina along the Atlantic Ocean coast. Charleston offers a variety of cultural and recreational experiences such as historical architecture, museums, and beaches.

The economic base in Charleston is formed by a combination of the more than $5.1 billion tourism industry, the Port of Charleston, the medical community, military installations and a diverse group of manufacturers. Charleston continues to experience economic expansion due to its port facilities, the growing work force, and the central location relative to the rest of the Southeast. According to the Charleston Regional Development Alliance, the regional economy has evolved from one focused on military and tourism to one that is much more diversified including companies involved in manufacturing, biosciences, and communication technologies as well as increasing the number of companies headquartered in the region. In 2006, Expansion Management magazine, named Charleston as one of the top United States located for European expansions for the sixth consecutive year. As of 2005 there were approximately 70 firms in the Charleston – North Charleston MSA who are owned by foreign parent companies, including Robert Bosch, Mikasa, DAK Americas and more. These companies represent a total of 20 countries and have approximately 9,000 employees.

Although the closing of the Charleston Naval Base and Shipyard has been completed due to the 1993 BRAC decision and the 2005 BRAC recommendations call for the closing of the Defense Finance and Accounting Service and the realignment of the Naval Weapons Station, the military continues to remain the largest single employer in the Charleston region. An estimated 618 jobs will be lost due to the 2005 BRAC decision. However, an estimated 16,219 Navy personnel remain in the region at installations such as the Charleston Naval Weapons Station, Naval Command, Control and Ocean Survelliance Center, In Service Engineering, East Coast Division (or NISE East) and SPAWAR. Furthermore, the Charleston Air Force Base employs over 5,594 personnel as the home for the U.S. Air Force's 437th Airlift Wing. The Base is home to 57 aircraft, including the C-17 Globemaster III and is located less than half a mile from the Subject. A public airshow is performed annually in North Charleston to showcase the area's pilots, planes and maneuvers.

Goose Creek, with a population of approximately 30,000, is the largest city in Berkeley County, the largest county of the three which comprise the Charleston – North Charleston MSA. The county is also one of the fastest growing counties in South Carolina. Berkeley County’s economy is driven by manufacturing and construction industries. Furthermore, the county is located close to the Port of Charleston, the busiest container port on the South Atlantic and Gulf coasts. The county is also home to the Navy’s Space and Naval Warfare Systems Center.

Employment by Industry The following table exhibits unemployment by industry for the PMA. A well-diversified economy is an indicator of strength and stability. Municipalities that rely primarily on one industry are more susceptible to economic downturns that may occur within that industry.

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2005 EMPLOYMENT BY INDUSTRY PMA USA Industry Number Employed Percent Employed Number Employed Percent Employed Agric/Forestry/Fishing/Hunting 164 0.33% 1,760,542 1.29% Mining 9 0.02% 548,372 0.40% Construction 5,024 10.17% 10,160,166 7.46% Manufacturing 5,043 10.21% 14,926,301 10.96% Wholesale Trade 1,635 3.31% 4,999,859 3.67% Retail Trade 5,963 12.07% 15,722,729 11.54% Transportation/Warehousing 2,615 5.29% 5,432,848 3.99% Utilities 753 1.52% 1,091,239 0.80% Information 1,068 2.16% 3,214,657 2.36% Finance/Insurance 1,663 3.37% 7,115,047 5.22% Real Estate/Rental/Leasing 1,144 2.32% 2,842,793 2.09% Prof/Scientific/Tech Services 2,637 5.34% 8,142,032 5.98% Mgmt of Companies/Enterprises 0 0.00% 97,671 0.07% Admin/Support/Waste Mgmt Srvcs 2,226 4.51% 5,065,877 3.72% Educational Services 4,049 8.20% 12,816,614 9.41% Health Care/Social Assistance 5,249 10.63% 17,310,074 12.71% Arts/Entertainment/Recreation 992 2.01% 2,520,804 1.85% Accommodation/Food Services 3,771 7.63% 8,765,637 6.44% Other Services (excl Publ Adm) 2,184 4.42% 6,831,640 5.02% Public Administration 3,205 6.49% 6,848,295 5.03% Total Employment 49,394 100.00% 136,213,197 100.00% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

The local economy is driven by the manufacturing, construction, retail trade, and healthcare/social assistance industries. Berkeley County’s access to the Port of Charleston, abundant supply of water and wastewater capacity has resulted in the county’s growing manufacturing base. Several key manufactures in Berkeley County include Nucor Steel which employs 831 workers, Alcoa Mt. Holly with 439 employees, C.R. Bard, Inc. with 430 employees, and DAK Americas with 400 employees. Recent growth in Berkeley County as well as the Charleston – North Charleston MSA has resulted in an increase in total employment in the construction industry as a result of the continual demand for new development in the region.

South Carolina as a whole has steadily lost more than 17,000 tobacco, textile, and apparel jobs, which have most severely affected the State’s poorer counties. To date, the closures of manufacturing plants and loss of manufacturing jobs has not had a significant effect on the local economy. The services sectors are also strongly represented in the local economy. This is partially a result of the importance of the tourism industry in the region, although not as significant in the PMA compared to the heart of Charleston. Furthermore, similar to the nation, the retail trade, healthcare/social assistance, and educational services all employ significant portions of the workforce.

Major Employers A fundamental indicator of the economic health of a city or metropolitan area is how well the economy is producing jobs for local residents. The table below shows the largest employers in the area.

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MAJOR EMPLOYERS Charleston-North Charleston, SC MSA Employer Industry Number Employed United States Navy Military 16,219 Medical University of South Carolina Health Services 8,200 Charleston Air Force Base Military 5,594 Charleston County School District Education 5,000 Roper St. Francis Healthcare Health Services 4,000 Berkeley County School District Education 3,414 Piggly Wiggly Carolina Corp. Retail Trade 2,500 Charleston County Government 2,243 Robert Bosch Corporation Manufacturing 2,243 Wal-Mart Stores Retail Trade 2,153 HCA Healthcare/Trident Health System Health Services 2,082 Dorchester County School District Education 2,000 Santee Cooper Utilities 1,725 MeadWWestvaco Manufacturing 1,596 City of Charleston Government 1,470 Source: Charleston Chamber of Commerce, 02/2005.

The largest employers in the Charleston region are military, health care, government, and educational employers. However, a significant portion of residents also work in the service industry. Many of the employees in this industry are employed by numerous small companies that are reliant on the tourism industry. Therefore, many of these employers are not large enough to make the list of major employers. Lower skilled employees in these industries are likely to have incomes which fall within the Subject’s income restrictions. These employees will typically be eligible for the Subject given their income. The top five employers in the region account for 39,013, or approximately 14 percent of the workforce. This indicates that the Charleston region has a relatively diverse economy.

In 2005, seven companies relocated to the Charleston – North Charleston MSA, including Kontane Logistics, DaimlerChrysler, Food Handler, Valley Forge Flag Company, American Cyber Logistics, Interwrap, and AM Conservation Group, Inc. These new companies added approximately 380 new jobs to the region and represented a total investment of over $42 million. Kontane Logistics opened a warehouse and distribution center in the Charleston region and offers services including warehousing and distribution, export packaging, line sequencing, sub assembly, freight consolidation, and information system solutions. AM Conservation Group also relocated to the immediate Charleston area and is a leading supplier of weatherization, water and energy conservation products. Interwrap, a global manufacturer of packaging products based in British Columbia, will open its North American strategic distribution center in the Charleston region. Two of the six new companies are based in the North Charleston area, including Food Handler and American Cyber Logistics. Food Handler, the market leader in the manufacturing of disposable gloves, relocated from Memphis, Tennessee and has added 31 new jobs to the region. The second new company in North Charleston, American Cyber Logistics, relocated from Long Island, New York and is currently located in the Pepperdam Industrial Park. Daimler Chrysler, the world’s largest commercial vehicle producer, opened a new assembly plant in Ladson, just outside of Summerville in Dorchester County, for the assembly of its new Dodge Sprinter van. Daimler Chrysler’s relocation will add approximately 220 new jobs to the region. The final new company, Valley Forge Flag Company, plans to establish its new distribution center in Berkeley County’s Mt. Holly Commerce Park. The company will add 70 new jobs to the region.

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In addition to new businesses, since September 2005, five local companies have announced plans for expansions. These companies include SKF MRC Bearings, Carolina Waterworks, Scout Boats, Nanaoscreen, and Signature Building Systems. These expansions are in the manufacturing industry, including the manufacturing of jet engine main bearings, products for the marine industry, high-end recreational boats, robotic equipment, and modular homes. These expansions will add a total of 223 new jobs to the local economy and a capital investment of over $28 million. Only one company has announced the potential need for downsizing. In September 2005, LATI USA, Inc. announced that it is re-evaluating production capability and consumer demand for their products which are manufactured in the local area. However, no information is available as to the exact number of employees this downsizing would affect.

Labor Force Growth The following table details employment and unemployment trends for the Charleston – North Charleston, SC MSA, from 1990 to 2005.

EMPLOYMENT & UNEMPLOYMENT TRENDS Charleston - North Charleston, SC MSA MSA MSA USA Year Total Employment % Change Unemployment Rate % Change Unemployment Rate 1990 227,152 - 3.0% - 5.7% 1991 232,751 2.5% 4.1% 1.1% 6.9% 1992 232,699 0.0% 5.7% 1.6% 7.6% 1993 232,079 -0.3% 6.2% 0.5% 7.0% 1994 231,439 -0.3% 5.9% -0.3% 6.2% 1995 231,446 0.0% 5.1% -0.8% 5.7% 1996 234,109 1.2% 5.2% 0.1% 5.5% 1997 243,441 4.0% 4.0% -1.2% 5.0% 1998 253,238 4.0% 2.8% -1.2% 4.6% 1999 260,886 3.0% 3.1% 0.3% 4.3% 2000 256,523 -1.7% 3.1% 0.0% 4.0% 2001 250,491 -2.4% 4.3% 1.2% 4.8% 2002 256,767 2.5% 4.6% 0.3% 5.8% 2003 265,155 3.3% 5.3% 0.7% 6.0% 2004 274,611 3.6% 5.3% 0.0% 5.6% 2005 284,332 3.5% 5.2% -0.1% 5.2% Source: U.S. Bureau of Labor Statistics and Real Estate Center at Texas A&M University.

National unemployment rates were at a decade high in 1992, when unemployment reached 7.6 percent. The nation was in a recession during the early 1990’s, which is the reason for the high rate of unemployment in 1992. From 1992 to 2000 each year saw lower unemployment rates for the nation as a whole. In 2000 unemployment rates for the nation were at their lowest since 1990, at a rate of 4.0 percent. 2001, 2002, and 2003 had rises in national unemployment rates, as rates climbed to 4.8, 5.8, and six percent, as the result of the nation going into a recession. Total employment in the U.S. has been steadily increasing since 1991. However, in 2002 employment decreased slightly by 0.2 percent. In 2003, total employment posted an increase of 0.5 percent over 2002, a trend that has continued through 2004 and 2005. Overall, national employment has increased by 13.6 percent since 1990.

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The total employment for the Charleston MSA has increased significantly since 1990, by approximately 57,180, or 23 percent. Total employment posted losses in 1993, 1994, 2000, and 2001 all periods of national recessions. Since the decline in 2000 and 2001, the MSA is showing signs of strong growth. From 2003 through 2005, the region experienced strong increases in total employment. Historically, the unemployment rate in the MSA has remained lower than that of the nation as a whole. Furthermore, the unemployment trends in the MSA have mirrored those in the nation reporting peaks in the early 1990s as well as at the turn of the century. Since 2003 the unemployment rate has only dropped slightly, however, the slight decrease in conjunction with the healthy increase in total employment is reflective of a recovering economy. All these factors are considered to be positive indicators for the economic viability of the market area surrounding the Subject.

ECONOMIC DEVELOPMENT We attempted to contact the City of Goose Creek, however were unable to obtain any information in regards to current economic development in the Goose Creek area. Therefore, we contacted the Charleston Metro Chamber of Commerce who referred us to the Charleston Regional Development Alliance website. Information obtained from the Charleston Regional Development Alliance has been referred to throughout the economic analysis of this report.

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Commuting Patterns The Charleston – North Charleston MSA has a labor force of approximately 300,037 workers, of which 284,332 are employed. Of those that are employed, approximately 8,360 commute out of the MSA for employment. However, according to the 200 Census, there are approximately 10,778 workers who commute into the MSA for employment. Most commuters remain in the tri-county (Dorchester, Berkeley, and Charleston) area for employment.

The following table details travel time to work for residents within the PMA as of 2000. The average travel time is 24.50 minutes, which limits residents to travel in or near the MSA.

2000 Travel Time to Work Travel Time Time in Minutes Average Travel Time 24.50 Travel Time < 5 min 943 Travel Time 5-9 min 3,558 Travel Time 10-14 min 5,499 Travel Time 15-19 min 6,839 Travel Time 20-24 min 8,664 Travel Time 25-29 min 3,578 Travel Time 30-34 min 7,906 Travel Time 35-39 min 993 Travel Time 40-44 min 1,556 Travel Time 45-59 min 2,448 Travel Time 60-89 min 1,119 Travel Time 90+ min 797 Source: EBIS, Novogradac & Co., LLP, 03/2005

Conclusions Berkeley County and the Charleston – North Charleston MSA have healthy economies, with a decreasing unemployment rate and a growing workforce. The region continues to attract new business and has experienced few business closures or downsizing in recent years. In 2006, Expansion Management magazine, named Charleston as one of the top United States located for European expansions for the sixth consecutive year. The regional economy has averaged an annual increase of 3,812 new jobs with jobs with nine of the 15 years experiencing overall job growth and two years of stable employment. The region has experienced significant growth in recent years which has resulted in a decrease of supply for additional housing. Furthermore, similar to many other metropolitan and coastline communities, the region has been experiencing a condominium conversion trend which has added to the increased demand for new and affordable rental housing in the region. Based on current research and statistics, a significant percentage of the population will likely be income-eligible for the Subject, because of the lower-wage paying occupations that dominate the region.

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F. COMMUNITY DEMOGRAPHIC DATA

Collins Park – Goose Creek, SC – Market Study

COMMUNITY DEMOGRAPHIC DATA

The following sections will provide an analysis of the demographic characteristics within the market area. Data such as population, households and growth patterns will be studied to determine if the Primary Market Area (PMA) and the Charleston-North Charleston MSA are areas of growth or contraction. The discussions will also describe typical household size and will provide a picture of the health of the community and the economy. The following demographic tables are specific to the populations of the PMA and the Charleston – North Charleston MSA.

Population The table below illustrates changes within population in the PMA, MSA and nationally from 1990 through 2010.

POPULATION Year Charleston-North Charleston, SC MSA PMA USA Number Annual Change Number Annual Change Number Annual Change 1990 506,874 - 83,470 - 248,709,873 - 2000 549,032 0.83% 90,441 0.84% 280,210,369 1.27% 2005 594,348 1.65% 96,531 1.35% 297,450,843 1.23% Prj Mrkt Entry 2008 625,573 1.66% 99,805 1.07% 309,248,743 1.25% 2010 643,651 1.66% 101,700 1.07% 316,079,106 1.25% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

All three areas of analysis have experienced steady population growth from 1990 to 2005 and are predicted to continue to do so through 2010. Of the three areas of analysis, population growth was strongest in the MSA and weakest in the nation. However, by 2010 population growth in the nation is predicted to surpass that in the PMA and the PMA will have the slowest rate of population growth of the three areas of analysis. Nevertheless, all three areas have and are predicted to continue to have healthy growth in terms of the respective populations. Overall, the stable growth projections illustrated above are considered a positive indicator for the Subject.

Population by Age The following table illustrates the population of the PMA, MSA and nationally by age cohort.

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POPULATION BY AGE IN 2005 Age Cohort Charleston-North Charleston, SC MSA PMA USA Number Percentage Number Percentage Number Percentage 0-4 39,823 6.70% 7,299 7.56% 20,504,694 6.89% 5-9 37,374 6.29% 6,493 6.73% 19,629,512 6.60% 10-14 40,978 6.89% 6,996 7.25% 21,496,274 7.23% 15-19 46,367 7.80% 7,556 7.83% 21,148,027 7.11% 20-24 47,324 7.96% 8,300 8.60% 21,383,795 7.19% 25-29 42,485 7.15% 8,399 8.70% 19,033,812 6.40% 30-34 42,034 7.07% 7,168 7.43% 20,128,309 6.77% 35-39 41,386 6.96% 6,846 7.09% 20,941,531 7.04% 40-44 47,450 7.98% 7,826 8.11% 23,710,436 7.97% 45-49 44,320 7.46% 7,248 7.51% 22,562,743 7.59% 50-54 39,317 6.62% 5,850 6.06% 19,732,445 6.63% 55-59 34,258 5.76% 4,954 5.13% 16,927,010 5.69% 60-64 26,117 4.39% 3,778 3.91% 12,904,332 4.34% 65-69 19,764 3.33% 2,723 2.82% 10,159,617 3.42% 70-74 15,816 2.66% 2,056 2.13% 8,594,238 2.89% 75-79 12,961 2.18% 1,441 1.49% 7,648,661 2.57% 80-84 9,350 1.57% 952 0.99% 5,802,985 1.95% 85+ 7,225 1.22% 647 0.67% 5,142,422 1.73% Total 594,348 100.0% 96,531 100% 297,450,843 100% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

The previous table illustrates the population by age in the PMA, MSA, and nation. The PMA has a younger population compared to the MSA and national average. The largest age cohort in the MSA and nation is the 40 to 44 age group. Meanwhile, the largest age group in the PMA and MSA is the 20 to 29 age group, with 17.3 percent of the PMA population falling within this age cohort. This is partially a result of the military’s presence in the PMA and MSA. However, the MSA also has a significantly high percentage of persons ages 15 to 19. The PMA also has a larger percentage of children under the age of nine when compared to the MSA and nation. This is indicative of many young families in the PMA. As a family housing community, all of these households will be eligible to reside in the Subject.

Households The table below describes household trends in the PMA, MSA and nationally from 1990 through 2010.

HOUSEHOLDS Year Charleston-North Charleston, SC MSA PMA USA Number Annual Change Number Annual Change Number Annual Change 1990 177,668 - 29,549 - 91,947,410 - 2000 207,956 1.70% 33,570 1.36% 105,076,861 1.43% 2005 231,607 2.27% 36,842 1.95% 112,014,956 1.32% Prj Mrkt Entry 2008 246,492 2.03% 38,516 1.43% 116,637,020 1.30% 2010 255,109 2.03% 39,485 1.43% 119,312,952 1.30% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

Similar to population, the rate of growth in the number of households within the PMA and MSA is considered positive. Household growth is occurring at a faster pace in the MSA and PMA compared to the nation, a trend which is expected to continue through 2010, despite the slower pace of growth in the MSA and PMA from 2005 through 2010. The rate of growth in households in the PMA is Novogradac & Company LLP 35 Collins Park – Goose Creek, SC – Market Study

expected to increase at a more rapid pace than the rate of growth in the population. As with population growth, we believe this projected growth is a positive indicator for the Subject. Of the three areas of study, household growth is currently the strongest in the MSA and weakest in the nation and is expected to remain so through 2010.

Average Household Size Average household size is depicted in the following table from 1990 through 2010 in both the Charleston – North Charleston MSA and PMA compared to the national average.

AVERAGE HOUSEHOLD SIZE Year Charleston-North Charleston, SC MSA PMA USA Number Annual Change Number Annual Change Number Annual Change 1990 2.74 - 2.80 - 2.62 - 2000 2.55 -0.69% 2.64 -0.57% 2.59 -0.11% 2005 2.48 -0.55% 2.57 -0.53% 2.59 0.00% Prj Mrkt Entry 2008 2.46 -0.24% 2.54 -0.31% 2.58 -0.08% 2010 2.45 -0.24% 2.53 -0.31% 2.58 -0.08% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

The average household size in both the MSA and PMA is smaller than the national household size average. While all three areas of analysis are expected to experience decreasing household sizes through 2010, the rate of decrease in the MSA and PMA is predicted to occur at a significantly faster pace therein furthering the gap between the average household size of the PMA and MSA with that of the nation. Of the three areas of analysis, the MSA has the smallest average household size and the nation has the largest.

Households by Tenure The table below depicts household growth by tenure from 1990 through 2010. While household growth is vital to the success of a new housing development, the presence of household growth by tenure can provide support for a particular housing type. For example, for demand to exist in a rental complex, growth must be evident for renter households.

TENURE PATTERNS PMA Owner-Occupied Percentage Owner- Renter-Occupied Percentage Renter- Year Units Occupied Units Occupied 1990 18,039 61.05% 11,510 38.95% 2000 21,637 64.45% 11,933 35.55% 2005 24,269 65.87% 12,572 34.13% Prj Mrkt Entry 2008 25,514 66.23% 13,001 33.77% 2010 26,235 66.44% 13,250 33.56% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

As the table illustrates, households within the PMA reside in predominately owner occupied residences. This trend is projected to remain relatively unchanged through 2010. It is interesting to note that the percentage of renter households, ranging from 19.7 percent to 29 percent, is high within households containing one to three persons.

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Renter Households by Number of Persons in the Household The following table illustrates household size for all households in 2006. To determine the number of renter households by number of persons per household, the total number of households is adjusted by the percentage of renter households. As stated, 34 percent of all households are renter households.

Renter Households by Number of Persons - PMA 2000 2005 Projected Mkt Entry: 2010 Number Percentage Number Percentage Number Percentage Number Percentage With 1 Person 3,475 29.1% 3,661 29.1% 3,786 29.1% 3,859 29.1% With 2 Persons 3,438 28.8% 3,622 28.8% 3,746 28.8% 3,818 28.8% With 3 Persons 2,354 19.7% 2,480 19.7% 2,565 19.7% 2,614 19.7% With 4 Persons 1,555 13.0% 1,638 13.0% 1,694 13.0% 1,727 13.0% With 5 Persons 689 5.8% 726 5.8% 751 5.8% 765 5.8% With 6 Persons 287 2.4% 302 2.4% 313 2.4% 319 2.4% With 7+ Persons 134 1.1% 141 1.1% 146 1.1% 149 1.1% Total Renter 11,932 100.0% 12,572 100.0% 13,001 100.0% 13,250 100.0% Households

Median Household Income The following table shows median household income in the PMA, MSA, and nation.

MEDIAN HOUSEHOLD INCOME Year Charleston-North Charleston, SC MSA PMA USA Amount Annual Change Amount Change Amount Annual Change 2000 $39,506 - $41,205 - $42,139 - 2005 $45,994 3.28% $47,166 2.89% $49,718 3.60% Prj Mrkt Entry 2008 $50,843 3.33% $51,109 2.64% $55,185 3.47% 2010 $53,651 3.33% $53,392 2.64% $58,351 3.47% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

As the table above indicates, of the three areas of analysis, the median household income is lowest in the MSA and highest in the nation. Furthermore, the median household income in the nation is growing at a faster pace than that of the PMA and MSA. However, the median household income in the MSA is growing a faster pace than that in the PMA and is predicted to overtake the median household income in the PMA by 2010. Therefore, by 2010, the PMA is predicted to have the lowest median household income of the three areas of analysis. Therefore, the gap between the median household income in the PMA compared to that in the nation is expected to widen through 2010.

Household Income The following table depicts household income in the PMA from 2005 to 2010.

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HOUSEHOLD INCOME PMA PMA Income Cohort 2005 Prj Mrkt Entry 20082010 Annual Change 2005 to 2010 Number Percentage Number Percentage Number Percentage Number Percentage <$10,000 2,562 6.95% 2,520 6.54% 2,495 6.32% -21 -0.83% $10,000-$14,999 1,579 4.29% 1,378 3.58% 1,261 3.19% -101 -6.38% $15,000-$19,999 1,988 5.40% 1,821 4.73% 1,724 4.37% -84 -4.21% $20,000-$24,999 1,953 5.30% 1,984 5.15% 2,002 5.07% 16 0.79% $25,000-$29,999 2,426 6.58% 2,066 5.36% 1,858 4.71% -180 -7.41% $30,000-$34,999 2,266 6.15% 2,264 5.88% 2,263 5.73% -1 -0.04% $35,000-$39,999 2,316 6.29% 2,172 5.64% 2,089 5.29% -72 -3.10% $40,000-$44,999 2,377 6.45% 2,336 6.07% 2,313 5.86% -20 -0.85% $45,000-$49,999 2,073 5.63% 2,150 5.58% 2,194 5.56% 38 1.85% $50,000-$59,999 4,317 11.72% 4,127 10.71% 4,017 10.17% -95 -2.20% $60,000-$74,999 4,286 11.63% 4,760 12.36% 5,034 12.75% 237 5.53% $75,000-$99,999 4,744 12.88% 5,108 13.26% 5,318 13.47% 182 3.83% $100,000-$124,999 2,178 5.91% 3,066 7.96% 3,580 9.07% 444 20.38% $125,000-$149,999 992 2.69% 1,423 3.69% 1,672 4.23% 215 21.71% $150,000-$199,999 493 1.34% 879 2.28% 1,103 2.79% 193 39.18% $200,000-$249,999 152 0.41% 263 0.68% 327 0.83% 55 36.46% $250,000-$499,999 129 0.35% 168 0.44% 190 0.48% 19 14.97% $500,000+ 11 0.03% 33 0.09% 46 0.12% 11 100.76% Total 36,842 100% 38,517 100% 39,486 100% Source: ESRI Business Analyst 9.1; Novogradac & Company LLP - March, 2006

As the table above depicts, the largest percentage of the PMA population earns between $50,000 and $99,999 annually. This is partially a result of the presence of the military as well as the recent increases in professional, scientific, and technology related jobs in the region. The PMA also has significant portions of the population in the lower and moderate income levels. In fact, similar to the national average, approximately 35 percent of the population within the PMA earns less than $35,000 annually. Households within these income cohorts are expected to create demand for the Subject’s proposed units.

Conclusion Both the PMA and the MSA have reported significant increases in population. Similar to population, the rate of growth in the number of households within the PMA is considered very positive. The rate of growth in households in the PMA is expected to increase at a slightly more rapid pace than the rate of growth in the population. As with population growth, we believe this projected growth is a positive indicator for the Subject. Households within the PMA reside in predominately owner occupied residences. This trend is projected to remain relatively unchanged through 2010. Overall, the strong growth projections reported within the PMA are considered a very positive indicator for the Subject.

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G. PROJECT-SPECIFIC DEMAND ANALYSIS

Collins Park – Goose Creek, SC – Market Study

PROJECT SPECIFIC DEMAND ANALYSIS

The following demand analysis evaluates the potential amount of qualified households, which the Subject would have a fair chance at capturing. The structure of the analysis is based on the guidelines provided by SCHFDA.

Income Restrictions LIHTC rents are based upon a percentage of the Area Median Gross Income (AMI), adjusted for household size and utilities. South Carolina Housing Finance Agency (SCHFDA) will estimate the relevant income levels, with annual updates. The rents are calculated assuming that the maximum net rent a household will pay is 35 percent of its household income at the appropriate AMI level.

According to SCHFDA, household size is assumed to be 1.5 persons per bedroom for LIHTC rent calculation purposes. For example, the maximum rent for a four-person household in a two- bedroom unit is based on an assumed household size of three persons (1.5 per bedroom).

To assess the likely number of tenants in the market area eligible to live in the Subject, we use Census information as provided by ESRI Business Information Solutions to estimate the number of potential tenants who would qualify to occupy the Subject as a LIHTC project.

The maximum income levels are based upon information obtained from the Rent and Income Limits Guidelines Table as accessed from the SCHFDA website.

Affordability As discussed above, the maximum income is set by SCHFDA while the minimum is based upon the minimum income needed to support affordability. This is based upon a standard of 35 percent. Lower and moderate-income families typically spend greater that 30 percent of their income on housing. These expenditure amounts can range higher than 50 percent depending upon market area. However, the 30 to 40 percent range is generally considered a reasonable range of affordability. SCHFDA guidelines utilize 35 for families and 40 percent for senior households, which we will use to set the minimum income levels for the demand analysis.

Demand The demand for the Subject will be derived from two sources: existing households and new households. These calculations are illustrated on the attached table.

1. Demand from New Households The number of new households entering the market is the first level of demand calculated. We have utilized 2008, the anticipated date of market entry, as the base year for the analysis. Therefore, 2005 household population estimates are inflated to 2008 by interpolation of the difference between 2005 estimates and 2010 projections. This change in households is considered the gross potential demand for the Subject property. This number is adjusted for income eligibility and renter tenure. In the following tables this calculation is identified as Step 1. This is calculated as an annual demand number. In other words, this calculates the anticipated new households in 2008.

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2. Demand from Existing Households Demand for existing households is estimated by summing three sources of potential tenants. The first source (2a.) is tenants who are rent overburdened. These are households who are paying over 30 percent of their income in housing costs.

The second source (2b.) is households living in substandard housing. We will utilize this data to determine the number of current residents that are income eligible, renter tenure, overburdened and/or living in substandard housing and likely to consider the Subject. The third source (2c.) is those seniors likely to move from their own homes into rental housing. This source is only appropriate when evaluating senior properties and is determined by interviews with property managers in the PMA. The SCHFA guidelines indicate that demand from this segment should not add more than 20 percent of total demand.

The data provided for 2b and 2c is based upon the 2000 census. For 2a, we relied on estimates provided in the Comprehensive Housing Affordability Strategy (CHAS) reported on the HUD webpage which relies on 2000 census data. This data provides information on the number of households within the county that are within certain income brackets and what percentage of those households are rent overburdened. The rent overburdened is divided into two classifications: those paying over 30 percent of their income in rent and those paying over 50 percent of their income in rent. Since we are using 35 percent as the rent overburdened threshold, we interpolate between these two classifications. According to this information, the greatest number of households (29,815) have incomes that are greater than 80 percent of the median family income (MFI), followed by households with incomes less than or equal to 50 percent of the MFI (11,020). This is a positive indication of the need for affordable housing targeted to those at or below 50 percent of the MFI. Within the lower income brackets approximately 64.8 percent of households are paying more than 30 percent of their income in rent and 47.7 percent are paying over 50 percent of their income in rent. We have used 50 percent of households that are rent overburdened.

We also used information from CHAS to determine the percentage of households living in substandard housing, and have used 0.4 percent in our analysis.

Affordable housing properties can pull demand from markets that are located a significant distance away. Therefore, it is often necessary to include a leakage factor. We usually determine an estimate of the leakage factor based on comments from local property managers regarding the percentage of tenants they have that are from out of town. However, SCSHFDA does not encourage the inclusion of a leakage factor. Therefore, we have not included a leakage factor in our demand analysis. Because we have not included a leakage factor in our analysis, we believe our estimate of demand may be understated.

In general, we will utilize this data to determine the number of current residents that are income eligible, renter tenure, overburdened and/or living in substandard housing and likely to consider the Subject.

Additions to Supply Additions to supply will lower the number of potential qualified households. Pursuant to our understanding of SCHFA guidelines, we deduct additions to supply allocated since 2000 to present and those that will be constructed in 2006 that are considered directly competitive. The following table illustrates the properties and the number of units that have been removed. Novogradac & Company LLP 41 Collins Park – Goose Creek, SC – Market Study

Name 2BR Units 3BR Units Wisteria Place (60% AMI) (Proposed) 41 18 Ivy Ridge (60% AMI) (Proposed) 41 18 Hallmark Homes at Redbank (60% AMI) (Under Construction) 102 102 Birchwood (60% AMI) (Existing) 32 32 Gardens at Montague (60% AMI) (Existing) 10 22 Gardens at Montague (50% AMI) (Existing) 9 10 Osprey Place (60% AMI) (Existing) 21 15 Osprey Place (50% AMI) (Existing) 30 6 Total Units Removed 286 223

Capture Rates The calculations and derived capture rates are illustrated in the following table.

Novogradac & Company LLP 42 Collins Park – Goose Creek, SC – Market Study

Household Income Distribution 2000 to Projected Market Entry March 2008 Collins Park PMA

20002005 Prj Mrkt Entry March 2008 Percent #% # % # %Growth < $10,000 2,558 7.63% 2,562 6.95% 2,522 6.56% -1.4% $10,000-$14,999 1,952 5.82% 1,579 4.29% 1,388 3.61% -40.6% $15,000-$19,999 2,020 6.02% 1,988 5.40% 1,830 4.76% -10.4% $20,000-$24,999 2,447 7.30% 1,953 5.30% 1,982 5.16% -23.4% $25,000-$29,999 2,463 7.34% 2,426 6.58% 2,085 5.43% -18.1% $30,000-$34,999 2,345 6.99% 2,266 6.15% 2,264 5.89% -3.6% $35,000-$39,999 2,354 7.02% 2,316 6.29% 2,180 5.67% -8.0% $40,000-$44,999 2,371 7.07% 2,377 6.45% 2,339 6.09% -1.4% $45,000-$49,999 2,292 6.83% 2,073 5.63% 2,146 5.58% -6.8% $50,000-$59,999 3,624 10.81% 4,317 11.72% 4,137 10.77% 12.4% $60,000-$74,999 3,851 11.48% 4,286 11.63% 4,735 12.32% 18.7% $75,000-$99,999 3,212 9.58% 4,744 12.88% 5,088 13.24% 36.9% $100,000+ 2,050 6.11% 3,955 10.74% 5,733 14.92% 64.2% Total 33,539 100.00% 36,842 100.00% 38,428 100.00% 12.7% OK OK

Household Income Distribution Projected Market Entry March 2008 Collins Park PMA Change 2000 to Prj Mrkt Entry March Prj Mrkt Entry March 2008 2008 #% # < $10,000 2,522 6.56% -36 $10,000-$14,999 1,388 3.61% -564 $15,000-$19,999 1,830 4.76% -190 $20,000-$24,999 1,982 5.16% -465 $25,000-$29,999 2,085 5.43% -378 $30,000-$34,999 2,264 5.89% -81 $35,000-$39,999 2,180 5.67% -174 $40,000-$44,999 2,339 6.09% -32 $45,000-$49,999 2,146 5.58% -146 $50,000-$59,999 4,137 10.77% 513 $60,000-$74,999 4,735 12.32% 884 $75,000-$99,999 5,088 13.24% 1,876 $100,000+ 5,733 14.92% 3,683 Total 38,428 100.00% -1,888

Tenure Prj Mrkt Entry March 2008 Renter 33.77% 2736 Owner 66.23% 3947 Total 100.00%

Household Size for Prj Mrkt Entry March 2008 Household Size for 2000 Size Number Percentage Size Number Percentage 1 8,394 21.84% 1 7,326 21.84% 2 12,338 32.11% 2 10,768 32.11% 3 7,750 20.17% 3 6,764 20.17% 4 6,084 15.83% 4 5,310 15.83% 5 2,572 6.69% 5 2,245 6.69% 6 861 2.24% 6 751 2.24% 7+ 428 1.11% 7+ 374 1.11% Total 38,428 100.00% Total 33,539 100.00% Check

Novogradac & Company LLP 43 Collins Park – Goose Creek, SC – Market Study

Calculation of Potential Household Demand by Income Cohort by % of AMI Percent of AMI Level 50% 0% Minimum Income Limit $18,994 $0 Maximum Income Limit $30,450 5 Person $0 0

New Households - Total Change in Households PMA 2000 to Prj Mrkt Households within Income Percent within Income Category Entry March 2008 Income Brackets Percent within Cohort Bracket Brackets Cohort < $10,000 -36 -0.74% 0% 0 14,999 100% $10,000-$14,999 -564 -11.53% 0% 0 -15,000 -150% $15,000-$19,999 -190 -3.89% 1,005 20% -38 $20,000-$24,999 -465 -9.50% 4,999 100% -465 $25,000-$29,999 -378 -7.73% 4,999 100% -378 $30,000-$34,999 -81 -1.65% $450 9% -7 $35,000-$39,999 -174 -3.56% 0% 0 $40,000-$44,999 -32 -0.66% 0% 0 $45,000-$49,999 -146 -2.99% 0% 0 $50,000-$59,999 513 10.49% 0% 0 $60,000-$74,999 884 18.08% 0% 0 $75,000-$99,999 1,876 38.38% 0% 0 $100,000+ 3,683 75.32% 0% 0 4,889 100.00% -888 Percent of households within limits versus total number of households -18.16% Check OK OK

Calculation of New Household Demand by Income Cohort by % of AMI Percent of AMI Level 50% 0% Minimum Income Limit $18,994 $0 Maximum Income Limit $30,450 5 Person $0 $0

Total Households PMA Prj Mrkt Households within Income Percent within Income Category Entry March 2008 Income Brackets Percent within Cohort Bracket Brackets Cohort < $10,000 2,522 6.56% 0 0% 0 14,999 100% $10,000-$14,999 1,388 3.61% 0 0% 0 -15,000 -150% $15,000-$19,999 1,830 4.76% 1,005 20% 368 00% $20,000-$24,999 1,982 5.16% 4,999 100% 1,982 00% $25,000-$29,999 2,085 5.43% 4,999 100% 2,085 00% $30,000-$34,999 2,264 5.89% 450 9% 204 00% $35,000-$39,999 2,180 5.67% 0 0% 0 $40,000-$44,999 2,339 6.09% 0 0% 0 $45,000-$49,999 2,146 5.58% 0 0% 0 $50,000-$59,999 4,137 10.77% 0 0% 0 $60,000-$74,999 4,735 12.32% 0 0% 0 $75,000-$99,999 5,088 13.24% 0 0% 0 $100,000+ 5,733 14.92% 0 0% 0 38,428 100.00% 4,639 Percent of households within limits versus total number of households 12.07% Check OK OK

Does the Project Benefit from Rent Subsidy? (Y/N) No Type of Housing (Family vs Senior) Family Location of Subject (Rural versus Urban) Urban Percent of Income for Housing 35% 2000 Median Income $41,205 Prj Mrkt Entry March 2008 Median Income $51,109 Change from 2000 to Prj Mrkt Entry March 2008 $9,904 Total Percent Change 24.0% Average Annual Change 4.0% Inflation Rate 4.0% Two year adjustment 1.0000 Maximum Allowable Income $30,450 Maximum Allowable Income Inflation Adjusted $30,450 Maximum Number of Occupants 5 Person Rent Income Categories 50% Initial Gross Rent for Smallest Unit $554 Initial Gross Rent for Smallest Unit Inflation Adjusted $554.00

Persons in Household 0BR 1BR 2BR 3BR 4BR Excluded Total 1 0% 90% 10% X X 0% 100% 2 0% 20% 80% X X 0% 100% 3 X 0% 60% 40% X 0% 100% 4 X X 0% 80% 20% 0% 100% 5 X X X 70% 30% 0% 100% 6 X X X 0% 100% 0% 100% 7+ X X X X 100% 0% 100%

Novogradac & Company LLP 44 Collins Park – Goose Creek, SC – Market Study

STEP 1 Please refer to text for complete explanation. Demand from New Households 2000 to Prj Mrkt Entry March 2008 Income Target Population 50% New Households PMA 4,889 Percent Income Qualified -18.2% Income Qualified Households -888 Percent Renter 33.8% New Renter Income Qualified Households -300

STEP 2a. Please refer to text for complete explanation. Demand from Existing Households 2000 Demand form Rent Overburdened Households Income Target Population 50% Total Existing Demand 38,428 Income Qualified 12.1% Percent Renter 33.8% Income Qualified Renter Households 1566 Percent Rent Overburdened Prj Mrkt Entry March 2008 50% Rent Overburdened Households 783

STEP 2b. Please refer to text for complete explanation. Demand from Living in Substandard Housing Income Qualified Renter Households 1566 Percent Living in Substandard Housing 0.4% Households Living in Substandard Housing 6

STEP 2c. Please refer to text for complete explanation. Senior Households Converting from Homeownership Income Target Population 50% Total Senior Homeowners 0 Rural Versus Urban 2.0% Senior Demand Converting from Homeownership 0

Total Demand Total Demand from Existing Households 789 Adjustment Factor 0 0 Adjusted Demand form Existing Households 789 Total New Demand -300 Total Demand (New Plus Existing Households) 490

Demand from Seniors Who Convert from Homeownership 0 Percent of Total Demand From Homeonwership Conversion 0.0% Is this Demand Over 20 percent of Total Demand? No

By Bedroom Demand One Person 21.84% 107 Two Persons 32.11% 157 Three Persons 20.17% 99 Four Persons 15.83% 78 Five Persons 6.69% 33 Six Persons 2.24% 11 Seven Plus Persons 1.11% 5 Total 100.00% 490

Novogradac & Company LLP 45 Collins Park – Goose Creek, SC – Market Study

To place Person Demand into Bedroom Type Units Of one person households in one-bedroom units 90% 96 Of two person households in one-bedroom units 20% 31 Of one person households in two-bedroom units 10% 11 Of two person households in two-bedroom units 80% 126 Of three person households in two-bedroom units 60% 59 Of three person households in three-bedroom units 40% 40 Of four person households in three-bedroom units 80% 62 Of five person households in three-bedroom units 70% 23 Of four person households in four-bedroom units 20% 16 Of five person households in four-bedroom units 30% 10 Of six person households in four-bedroom units 100% 11 Of seven plus person households in four-bedroom units 100% 5 Total Demand 490 Check OK

Total Demand by Bedroom 50% One Bedroom 128 Two Bedroom 196 Three Bedroom 125 Four Bedroom 42 Total Demand 490

Additions To Supply 2000 to Prj Mrkt Entry March 2008 50% One Bedroom 0 Two Bedroom 39 Three Bedroom 31 Four Bedroom 0 Total 70

Net Demand 50% One Bedroom 128 Two Bedroom 157 Three Bedroom 94 Four Bedroom 42 Total 420

Developer's Unit Mix 50% One Bedroom 0 Two Bedroom 12 Three Bedroom 12 Four Bedroom 0 Total 24

Capture Rate Analysis 50% One Bedroom N/A Two Bedroom 8% Three Bedroom 13% Four Bedroom N/A Total 6%

Novogradac & Company LLP 46 Collins Park – Goose Creek, SC – Market Study

Calculation of Potential Household Demand by Income Cohort by % of AMI Percent of AMI Level 60% 0% Minimum Income Limit $22,423 $0 Maximum Income Limit $36,540 5 Person $0 0

New Households - Total Change in Households PMA 2000 to Prj Mrkt Households within Income Percent within Income Category Entry March 2008 Income Brackets Percent within Cohort Bracket Brackets Cohort < $10,000 -36 -0.74% 0% 0 14,999 100% $10,000-$14,999 -564 -11.53% 0% 0 -15,000 -150% $15,000-$19,999 -190 -3.89% 0% 0 $20,000-$24,999 -465 -9.50% 2,576 52% -239 $25,000-$29,999 -378 -7.73% 4,999 100% -378 $30,000-$34,999 -81 -1.65% $4,999 100% -81 $35,000-$39,999 -174 -3.56% $1,540 31% -54 $40,000-$44,999 -32 -0.66% 0% 0 $45,000-$49,999 -146 -2.99% 0% 0 $50,000-$59,999 513 10.49% 0% 0 $60,000-$74,999 884 18.08% 0% 0 $75,000-$99,999 1,876 38.38% 0% 0 $100,000+ 3,683 75.32% 0% 0 4,889 100.00% -752 Percent of households within limits versus total number of households -15.37% Check OK OK

Calculation of New Household Demand by Income Cohort by % of AMI Percent of AMI Level 60% 0% Minimum Income Limit $22,423 $0 Maximum Income Limit $36,540 5 Person $0 $0

Total Households PMA Prj Mrkt Households within Income Percent within Income Category Entry March 2008 Income Brackets Percent within Cohort Bracket Brackets Cohort < $10,000 2,522 6.56% 0 0% 0 14,999 100% $10,000-$14,999 1,388 3.61% 0 0% 0 -15,000 -150% $15,000-$19,999 1,830 4.76% 0 0% 0 00% $20,000-$24,999 1,982 5.16% 2,576 52% 1,022 00% $25,000-$29,999 2,085 5.43% 4,999 100% 2,085 00% $30,000-$34,999 2,264 5.89% 4,999 100% 2,264 00% $35,000-$39,999 2,180 5.67% 1,540 31% 672 $40,000-$44,999 2,339 6.09% 0 0% 0 $45,000-$49,999 2,146 5.58% 0 0% 0 $50,000-$59,999 4,137 10.77% 0 0% 0 $60,000-$74,999 4,735 12.32% 0 0% 0 $75,000-$99,999 5,088 13.24% 0 0% 0 $100,000+ 5,733 14.92% 0 0% 0 38,428 100.00% 6,043 Percent of households within limits versus total number of households 15.72% Check OK OK

Does the Project Benefit from Rent Subsidy? (Y/N) No Type of Housing (Family vs Senior) Family Location of Subject (Rural versus Urban) Urban Percent of Income for Housing 35% 2000 Median Income $41,205 Prj Mrkt Entry March 2008 Median Income $51,109 Change from 2000 to Prj Mrkt Entry March 2008 $9,904 Total Percent Change 24.0% Average Annual Change 4.0% Inflation Rate 4.0% Two year adjustment 1.0000 Maximum Allowable Income $36,540 Maximum Allowable Income Inflation Adjusted $36,540 Maximum Number of Occupants 5 Person Rent Income Categories 60% Initial Gross Rent for Smallest Unit $654 Initial Gross Rent for Smallest Unit Inflation Adjusted $654.00

Novogradac & Company LLP 47 Collins Park – Goose Creek, SC – Market Study

STEP 1 Please refer to text for complete explanation. Demand from New Households 2000 to Prj Mrkt Entry March 2008 Income Target Population 60% New Households PMA 4,889 Percent Income Qualified -15.4% Income Qualified Households -752 Percent Renter 33.8% New Renter Income Qualified Households -254

STEP 2a. Please refer to text for complete explanation. Demand from Existing Households 2000 Demand form Rent Overburdened Households Income Target Population 60% Total Existing Demand 38,428 Income Qualified 15.7% Percent Renter 33.8% Income Qualified Renter Households 2040 Percent Rent Overburdened Prj Mrkt Entry March 2008 50% Rent Overburdened Households 1020

STEP 2b. Please refer to text for complete explanation. Demand from Living in Substandard Housing Income Qualified Renter Households 2040 Percent Living in Substandard Housing 0.4% Households Living in Substandard Housing 8

STEP 2c. Please refer to text for complete explanation. Senior Households Converting from Homeownership Income Target Population 60% Total Senior Homeowners 0 Rural Versus Urban 2.0% Senior Demand Converting from Homeownership 0

Total Demand Total Demand from Existing Households 1028 Adjustment Factor 0 0 Adjusted Demand form Existing Households 1028 Total New Demand -254 Total Demand (New Plus Existing Households) 774

Demand from Seniors Who Convert from Homeownership 0 Percent of Total Demand From Homeonwership Conversion 0.0% Is this Demand Over 20 percent of Total Demand? No

By Bedroom Demand One Person 21.84% 169 Two Persons 32.11% 249 Three Persons 20.17% 156 Four Persons 15.83% 123 Five Persons 6.69% 52 Six Persons 2.24% 17 Seven Plus Persons 1.11% 9 Total 100.00% 774

Novogradac & Company LLP 48 Collins Park – Goose Creek, SC – Market Study

To place Person Demand into Bedroom Type Units Of one person households in one-bedroom units 90% 152 Of two person households in one-bedroom units 20% 50 Of one person households in two-bedroom units 10% 17 Of two person households in two-bedroom units 80% 199 Of three person households in two-bedroom units 60% 94 Of three person households in three-bedroom units 40% 62 Of four person households in three-bedroom units 80% 98 Of five person households in three-bedroom units 70% 36 Of four person households in four-bedroom units 20% 25 Of five person households in four-bedroom units 30% 16 Of six person households in four-bedroom units 100% 17 Of seven plus person households in four-bedroom units 100% 9 Total Demand 774 Check OK

Total Demand by Bedroom 60% One Bedroom 202 Two Bedroom 309 Three Bedroom 197 Four Bedroom 66 Total Demand 774

Additions To Supply 2000 to Prj Mrkt Entry March 2008 60% One Bedroom 0 Two Bedroom 247 Three Bedroom 37 Four Bedroom 0 Total 284

Net Demand 60% One Bedroom 202 Two Bedroom 62 Three Bedroom 160 Four Bedroom 66 Total 490

Developer's Unit Mix 60% One Bedroom 0 Two Bedroom 12 Three Bedroom 12 Four Bedroom 0 Total 24

Capture Rate Analysis 60% One Bedroom N/A Two Bedroom 19% Three Bedroom 8% Four Bedroom N/A Total 5%

Novogradac & Company LLP 49 Collins Park – Goose Creek, SC – Market Study

Conclusions Several factors affect the indicated capture rates and are discussed following.

• The number of households in the PMA is expected to increase 12.7 percent between 2000 and 2008.

• The Subject’s target income group is $18,994 to $36,540. This spreads across five income cohorts. The $15,000 to $19,999 cohort is expected to contract by 3.89 percent from 2000 to 2008. The $20,000 to $24,999 cohort is expected to contract by 9.50 percent from 2000 to 2008. The $25,000 to $29,999 cohort is expected to contract by 7.73 percent from 2000 to 2008. The $30,000 to $34,999 cohort is expected to contract by 1.65 percent from 2000 to 2008. The $35,000 to $39,999 cohort is expected to contract by 3.56 percent from 2000 to 2008. Finally, the $40,000 to $44,999 cohort is expected to contract by 0.66 percent from 2000 to 2008. Overall, the appropriate income cohorts in the PMA are projected to contract by 1,288 households.

• This demand analysis does not measure the PMA’s or Subject’s ability to attract additional or latent demand into the market from elsewhere by offering an affordable option. We believe this to be significant and therefore the demand analysis is somewhat conservative in its conclusions because this demand is not included.

The previous table illustrates the indicated capture rates derived from our standard SCHFDA demand analysis.

As the analysis illustrates, the Subject’s capture rates vary from 7.5 to 19.4 percent with an overall capture rate of 10.1 percent. The capture rates appear adequate and indicate demand for the Subject’s units.

Novogradac & Company LLP 50

H. SUPPLY ANALYSIS

Collins Park – Goose Creek, SC – Market Study

SUPPLY ANALYSIS

REGIONAL MARKET HOUSING OVERVIEW

Existing Housing Stock Properties located within the immediate area of the Subject were examined on the basis of physical characteristics; i.e., building type, building age/quality and the level of common amenities.

PUBLIC AND ASSISTED HOUSING The South Carolina Regional Housing Authority Number Three oversees Allendale, Bamberg, Barnwell, Berkeley, Calhoun Hampton, Jasper, and Orangeburg Counties. We spoke with Debra Young, Section 8 Supervisor of the South Carolina Regional Housing Authority Number 3, who reported that there are 139 Section 8 vouchers in use in Berkeley County. There are approximately 61 households on the Berkeley County waiting list and the list has been closed since 2002. Only four vouchers were issued in March 2006.

Project Based Section 8 and Public Housing The following table details project-based Section 8 and public housing in the PMA.

Section 8 And Public Housing Property Location Occupancy Waiting list Shannon Park Apartments Family - Goose Creek N/Av N/Av Parkway Village Apartments Family - Summerville 100% 341 Households Oakfield Apartments Disabled - Summerville 100% 50+ Households Fairwinds Apartments Family - Summerville 100% 50+ Households Greentree North Apartments Family - North Charleston N/Av N/Av Filbin Creek Apartments Elderly - Summerville 95% 20 Households

All the Section 8 properties within the Subject’s vicinity are 100 percent occupied except for Filbin Creek Apartments. However, management is currently in the process of reviewing applicants from the waiting list to fill the vacant units.

Rural Development Properties There are no rural development properties located in the Subject’s PMA. All rural development properties in Berkeley County are located to the north of the PMA in St. Stephens and Moncks Corner.

LIHTC Competition There are a total of three LIHTC projects in the PMA that have recently received allocations and are either in the final planning stages or are currently under construction, including Wisteria Place, Ivy Ridge, and Hallmark Homes at Redbank Road. Wisteria Place located in Summerville along the northeastern border of the PMA. The project was proposed as infill new construction and will have a total of 64 units. This family property will feature 32, two-bedroom units and 32, three-bedroom units. Ivy Ridge, also a family property, will be constructed in Charleston and will feature a total of 72 units of which 12 will be one-bedroom units, 41 will be two-bedroom units, and 18 will be three- bedroom units. The final project, Hallmark Homes at Redbank Road, is located in Goose Creek in close proximity to the Subject. Construction began in August 2005 and has a scheduled completion date of September 2006. The property will consist of 13, three-story garden style residential buildings and a clubhouse/leasing office. The tax credit rents are going to be at the maximum allowable rates of $571 for a one-bedroom, $679 for a two-bedroom, and $780 for a three-bedroom

Novogradac & Company LLP 52 Collins Park – Goose Creek, SC – Market Study

unit. Birchwood Apartments is the only LIHTC property located in the PMA. However, we have included two other LIHTC properties, Gardens at Montague and Osprey Pointe, located in the northern portion of the Charleston peninsula as comparable properties for this market study. Of these properties, two, Gardens at Montague and Birchwood, are 100 percent occupied and Osprey Pointe is 93.5 percent occupied. They are detailed later in the supply analysis of this report.

OTHER AFFORDABLE HOUSING OPTIONS We do believe the affordability of homeownership is a competitive issue for the Subject in this market. Many property managers stated that homeownership is a significant competitive issue. We spoke with Diane Johnson of Century 21 Southern Homes, Inc. who reported that the price of most two-bedroom starter homes is around $100,000 and three-bedroom single family starter homes in the Subject’s PMA range from a low of $110,000 to a high of $125,000. The average cost of a three- bedroom starter home in the Subject’s PMA is approximately $117,500. These are modest, mostly single-story home offering two or three bedrooms.

We performed a rent buy analysis. The inputs assume a three-bedroom single family home with a purchase price of $117,500 and interest rate of 6.25 percent for a 30 year fixed mortgage with a five percent down payment. This was compared to the cost to rent the Subject’s three-bedroom unit at 60 percent AMI. This analysis indicates that with a monthly differential of $60.34, it is slightly more affordable to rent an apartment than purchase a starter home.

RENT BUY ANALYSIS -6.25% RENT BUY ANALYSIS - Goose Creek, South Carolina

Inputs Ownership Rental Notes

Average Price $117,500 Closing Costs 3% $3,525 Down payment 5% $5,875.00 Principal $111,625.00 Interest Rate 6.25% Amortization period 30 Monthly Payment $687.29 Annual Payment $8,247.53 Real Estate Taxes 1.25% $1,469 Private Mortgage Insurance 0.50% $558.13 Homeowner's Insurance 0.50% $300 Utilities $717 Water, sewer and trash estimated cost for one year. Maintenance and Repairs 1.00% $1,175 Assumes a 1% cost for maintenance and repairs. Tax Benefit Assumes taxable income of $36,000 Marginal Tax Bracket 28% Annual Interest $6,977 Assumes first year Annual Tax Savings ($2,364.69)

Rental Costs Annual Rent $9,228 3 BR (60% AMI) gross rent Insurance (renter) $150

Total Annual Cost $10,102 $9,378 Total Monthly Cost $842 $782 Differential per year $724 Differential per month $60.34 Cash Due at Occupancy $9,400 $1,069

Novogradac & Company LLP 53 Collins Park – Goose Creek, SC – Market Study

A less expensive house in the market may make home purchase more likely. However, the ability to come up with a down payment might further derail those plans. The cash due at occupancy of $9,400 is a barrier for many households. A less expensive house would have a lower down payment, but it will still keep the dream of owning a home out of reach for many of the Subject’s potential residents.

Recently, interest rates have been at an all-time low, but there are indications that this trend may be reversing. Some economists have suggested that recent increases in inflation, due to high energy and real estate prices, could send interest rates up sooner than was originally predicted. As the graph indicates, mortgage rates increased sharply during the first quarter of 2005. Although they have declined during the second quarter, rates are likely to rise again in the future. As of June 2005, the average 30 year fixed mortgage rate is approximately 5.1 percent.

Source: Bankrate.com, Novogradac and Company, LLP 6/2005

In the beginning of July 2004, the Federal Reserve raised the federal funds rate, which influences borrowing costs throughout the economy, to 1.25 percent from a 46-year low of 1.00 percent. Since then, Federal Reserve Chairman Alan Greenspan has announced a series of additional rate hikes that have brought the rate to 2.5 percent. Additionally, Greenspan has warned that future increases may be inevitable, should Congress fail to reduce the federal deficit in a timely fashion.

In light of recent events, we tested this analysis again assuming a higher interest rate of 8.25 percent with a purchase price of $117,500. This analysis indicates that with a monthly differential of $159.56; it is more affordable to rent than buy a starter home. This indicates the Subject would have less competition against home ownership at this higher interest rate level. Moreover, the competition from homeownership will be limited based upon the following factors. First, many of the Subject’s tenants may lack an acceptable credit rating for homeownership. Second, the cash due at occupancy of $9,400 is a barrier for many households. The following table illustrates the rent/buy analysis at the 8.25 interest rate level.

Novogradac & Company LLP 54 Collins Park – Goose Creek, SC – Market Study

RENT BUY ANALYSIS -8.25% RENT BUY ANALYSIS - Goose Creek, South Carolina

Inputs Ownership Rental Notes

Average Price $117,500 0 Closing Costs 3% $3,525 Down payment 5% $5,875.00 Principal $111,625.00 Interest Rate 8.25% Amortization period 30 Monthly Payment $838.60 Annual Payment $10,063.22 Real Estate Taxes 1.25% $1,469 Private Mortgage Insurance 0.50% $558.13 Homeowner's Insurance 0.50% $300 Utilities $717 Water, sewer and trash estimated cost for one year. Maintenance and Repairs 1.00% $1,175 Assumes a 1% cost for maintenance and repairs. Tax Benefit Assumes taxable income of $36,000 Marginal Tax Bracket 28% Annual Interest $9,209 Assumes first year Annual Tax Savings ($2,989.79)

Rental Costs Annual Rent $9,228 3 BR (60% AMI) gross rent Insurance (renter) $150

Total Annual Cost $11,293 $9,378 Total Monthly Cost $941 $782 Differential per year $1,915 Differential per month $159.56 Cash Due at Occupancy $9,400 $1,069

Therefore, we do not believe homeownership is a viable alternative for the Subject’s potential market pool. There is not enough support from local programs or organization to have a sizable impact. Purchasing a home without assistance is still out of reach for the lower income households the Subject will attract. The Subject’s low rents help make it more competitive in the market than higher-rent LIHTC communities and market-rate communities.

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SURVEY OF COMPARABLE PROJECTS Comparable properties are examined on the basis of physical characteristics, i.e. building type, age/quality, level of common amenities, absorption, as well as similarity in rent. We attempted to compare the Subject to complexes from the competing market to provide a broader picture of the health and available supply in the market. We surveyed many properties that we chose not to use in the survey because they were not as comparable to the Subject as others that were selected.

Description of Property Types Surveyed/Determination of Number of Tax Credit Units We interviewed several properties to determine which ones were considered “true” competition for the Subject. Several properties in the market area were interviewed and not included because of their dissimilarity or other factors.

Comparable Properties Property managers and realtors were interviewed for information on unit mix, size, absorption, unit features and project amenities, tenant profiles, and market trends in general. Our competitive survey includes 11 “true” comparable properties containing 2,159 units.

A detailed matrix describing the individual competitive properties as well as the proposed Subject is provided in the addenda to this report. The Comparable Properties Map, illustrating the location of the Subject in relation to comparable properties is also provided in the addenda. The properties are further profiled in the write-ups following. The property descriptions include information on vacancy, turnover, absorption, age, competition, and the general health of the rental market, when available.

Novogradac & Company LLP 56 Summary Matrix

Rent Size Units Vacancy Comp # Project Distance Type / Built Market / Subsidy Units # % Restriction (Adj.) (SF) Vacant Rate SubjectCollins Park n/a Garden @50%, @60% 2BR / 2BA 12 25.00% @50% $400 1,082 N/A N/A 2001 Harbour Lake Drive (2 stories) 2BR / 2BA 12 25.00% @60% $500 1,082 N/A N/A Goose Creek, SC 2008 3BR / 2BA 12 25.00% @50% $500 1,322 N/A N/A Berkeley County 3BR / 2BA 12 25.00% @60% $595 1,322 N/A N/A

48 100% N/A N/A 1Birchwood Apartments 3.2 miles Garden @60% 2BR / 2BA 32 50.00% @60% $491 959 0 0.00% 2001 Stokes Avenue (3 stories) 3BR / 2BA 32 50.00% @60% $615 1,183 0 0.00% North Charleston, SC 29406 2004 Charleston County 64 100% 0 0.00% 2Gardens At Montague 7.7 miles Garden @50%, @60% 2BR / 2BA 9 14.10% @50% $501 1,082 0 0.00% 4840 Upjohn Road (3 stories) 2BR / 2BA 23 35.90% @60% $627 1,082 0 0.00% North Charleston, SC 29405 2004 3BR / 2BA 10 15.60% @50% $580 1,322 0 0.00% Charleston County 3BR / 2BA 22 34.40% @60% $726 1,322 0 0.00%

64 100% 0 0.00% 3Osprey Place 9.2 miles Garden @50%, @60%, 2BR / 2BA 30 27.80% @50% $502 933 0 0.00% 2390 Baker Hospital Blvd (3 stories)Market 2BR / 2BA 6 5.60% @60% $628 933 0 0.00% North Charleston, SC 29405 2004 3BR / 2BA 21 19.40% @50% $582 1,127 1 4.80% Charleston County 3BR / 2BA 15 13.90% @60% $636 1,127 2 13.30% 3BR / 2BA 36 33.30% Market $726 1,127 4 11.10%

108 100% 7 6.50% 4Alta Shores 3 miles Garden Market 1BR / 1BA 50 20.80% Market $679 764 N/A N/A 2605 Elms Plantation Blvd 2004 1BR / 1BA 50 20.80% Market $734 824 N/A N/A North Charleston, SC 2BR / 2BA 120 50.00% Market $727 1,071 N/A N/A Charleston County 2.5BR / 2BA 20 8.30% Market $752 1,071 N/A N/A

240 100% 33 13.80% 5Atlantic Palms 3 miles Garden Market 1BR / 1BA N/A N/A Market $700 830 0 N/A 2510 Atlantic Palms Lane 2001 2BR / 2BA N/A N/A Market $780 1,070 0 N/A Charleston, SC 29406 2BR / 2BA N/A N/A Market $855 1,115 0 N/A Charleston County 3BR / 2BA N/A N/A Market $940 1,270 0 N/A

312 100% 0 0.00% 6Audubon Park 1.7 miles Garden Market 1BR / 1BA N/A N/A Market $582 690 N/A N/A 1700 Eagle Landing 1991/2005 1BR / 1BA N/A N/A Market $732 800 N/A N/A Hanahan, SC 29406 2BR / 2BA N/A N/A Market $778 960 N/A N/A Berkeley County 2BR / 2BA N/A N/A Market $833 1,060 N/A N/A 2BR / 2BA N/A N/A Market $834 1,070 N/A N/A 3BR / 2BA N/A N/A Market $958 1,220 N/A N/A

228 100% 27 11.80% 7Pine Lakes 0.3 miles Various Market 2BR / 1.5BA (Townhouse) 34 14.90% Market $611 1,127 5 14.70% 120 South Cranford Road 1988 2BR / 2BA (Garden) 194 85.10% Market $561 992 0 0.00% Goose Creek, SC 29445 Berkeley County 228 100% 5 2.20% 8Pinebrook Pointe/pine Harbour 0.2 miles Various Market 1BR / 1BA (Garden) N/A N/A Market $411 536 0 N/A

5500 Harbour Lake Drive 1976 1BR / 1BA (Garden) N/A N/A Market $421 623 0 N/A Goose Creek, SC 2BR / 1.5BA (Townhouse) N/A N/A Market $596 1,062 1 N/A Berkeley County 2BR / 2BA (Garden) N/A N/A Market $486 885 0 N/A 3BR / 2BA (Garden) N/A N/A Market $586 1,050 0 N/A

416 100% 1 0.20% 9Springhill Apartments 0.3 miles Garden Market 1BR / 1BA 32 16.70% Market $436 880 0 0.00% 100 Swift Blvd 1974 2BR / 2BA 128 66.70% Market $476 1,000 0 0.00% Goose Creek, SC 29445 3BR / 2BA 32 16.70% Market $576 1,150 0 0.00% Berkeley County

192 100% 0 0.00% 10Summercreek Apartments 0.3 miles Garden Market 2BR / 1BA 120 100.00%Market $481 877 0 0.00% 5055 Harbour Lake Drive 1984 Goose Creek, SC Berkeley County 120 100% 0 0.00% 11Townhouses At Pine Harbor II 0 miles Townhouse Market 2BR / 1.5BA 187 100.00% Market $561 953 4 2.10%

4000 Harbour Lake Drive 1982 Goose Creek, SC Berkeley County 187 100% 4 2.10% Unit Matrix Report

Collins Park Birchwood Gardens At Osprey Place Alta Shores Atlantic Palms Audubon Park Pine Lakes Pinebrook Springhill Summercreek Townhouses At 2BR / 2BA Apartments Montague Pointe/pine Harbour Apartments Apartments Pine Harbor II Comp # Subject 1 2 3456789 1011 Distance from Subject n/a 3.2 miles 7.7 miles 9.2 miles 3 miles 3 miles 1.7 miles 0.3 miles 0.2 miles 0.3 miles 0.3 miles 0 miles

Unit Types @50% Bath/Bedroom 2BR / 2BA -- 2BR / 2BA 2BR / 2BA ------Base Rent/Month $400 -- $555 $556 ------Unit GLA (SF) 1,082 -- 1,082 933 ------Adjusted Utility Base Rent $400 -- $501 $502 ------

@60% Bath/Bedroom 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA ------Base Rent/Month $500 $491 $681 $682 ------Unit GLA (SF) 1,082 959 1,082 933 ------Adjusted Utility Base Rent $500 $491 $627 $628 ------

Market Bath/Bedroom ------2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 1BA 2BR / 1.5BA Base Rent/Month ------$865 $780 $910 $615 $540 $530 $535 $615 Unit GLA (SF) ------1,071 1,070 1,070 992 885 1,000 877 953 Adjusted Utility Base Rent ------$727 $780 $910 $561 $486 $476 $481 $561

Property Information Property Type Garden (2 stories) Garden (3 stories) Garden (3 stories) Garden (3 stories) Garden Garden Garden Various Various Garden Garden Townhouse Year Built 2008 2004 2004 2004 2004 2001 1991/2005 1988 1976 1974 1984 1982 Market (Conv.)/Subsidy Type @50%, @60% @60% @50%, @60% @50%, @60%, Market Market Market Market Market Market Market Market Market

Unit Information Total Units 24 32 32 36 120 N/A N/A 194 N/A 128 120 187 Vacant N/A 00 0N/A 0N/A 00 0 0 4 Vacancy Rate N/A 0.00% 0.00% 0.00% N/A N/A N/A 0.00% N/A 0.00% 0.00% 2.10%

Utilities central central central central central central central central central central central central A/C tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric electric electric electric electric Cooking tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric electric electric electric electric Water Heat tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric electric electric electric electric Heat tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant Other Electric tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant tenant Water tenant tenant landlord landlord tenant tenant tenant landlord landlord landlord landlord landlord Sewer tenant tenant landlord landlord tenant tenant tenant landlord landlord landlord landlord landlord Trash Collection landlord landlord landlord landlord tenant landlord landlord landlord landlord landlord landlord landlord

In-Unit Amenities Balcony/Patio yes yes no yes yes yes yes no no yes no yes Blinds yes yes yes yes yes yes no yes yes yes yes yes Carpeting yes yes yes yes yes yes yes yes yes yes yes yes Central A/C yes yes yes yes yes yes yes yes yes yes yes yes Dishwasher yes yes yes yes yes yes yes yes yes yes yes yes Exterior Storage yes no no no yes no no no no no no no Ceiling Fan yes no yes yes no yes yes no no no yes yes Garbage Disposal yes yes yes yes yes yes yes no yes yes no yes Microwave yes yes yes yes yes yes yes no no no no yes Oven yes yes yes yes yes yes yes yes yes yes yes yes Refrigerator yes yes yes yes yes yes yes yes yes yes yes yes Washer/Dryer hookup yes yes yes yes yes yes yes yes yes no yes yes

Property Amenities Basketball Court no no no no no no yes yes yes no no yes Business Center no no no no yes yes no no no no no no Car Wash no no no no yes yes yes no no no yes yes Clubhouse yes yes yes yes yes no no no yes no no yes Exercise Facility no no no no yes yes yes yes no no yes no Garage no no no no yes no no no no no no no Jacuzzi no no no no no no yes no no no no no Central Laundry yes yes yes yes no yes yes no yes yes yes no Non-shelter Services yes no no no no no no no no no no no Off-Street Parking yes yes yes yes yes yes yes yes yes yes yes yes On-Site Management yes yes yes yes yes yes yes yes yes yes yes yes Picnic Area no no no no yes no yes no yes no yes no Playground yes yes yes yes no yes yes yes yes no yes yes Sauna no no no no no no no yes no no yes no Sport Court no no no no no no yes no no no no no Swimming Pool no no no no yes yes yes yes yes yes yes yes Tennis Court no no no no no no no yes yes yes yes yes Volleyball Court no no no no no no yes yes yes no no yes Garage Fee ------$100.00 ------

Services Adult Education yes no no no no no no no no no no no

Security In-Unit Alarm no no no no yes no no no no no no no Patrol no no no no yes yes no no yes no yes yes Perimeter Fencing no no no no no no no no yes no yes no Video Surveillance no no no no no no no no yes no no yes

Premium Amenities

Other Amenities Other n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Unit Matrix Report

Collins Park Birchwood Gardens At Montague Osprey Place Atlantic Palms Audubon Park Pinebrook Springhill Apartments 3BR / 2BA Apartments Pointe/pine Harbour Comp # Subject 1 2 3 5 6 8 9 Distance from Subject n/a 3.2 miles 7.7 miles 9.2 miles 3 miles 1.7 miles 0.2 miles 0.3 miles

Unit Types @50% Bath/Bedroom 3BR / 2BA -- 3BR / 2BA 3BR / 2BA ------Base Rent/Month $500 -- $634 $636 ------Unit GLA (SF) 1,322 -- 1,322 1,127 ------Adjusted Utility Base Rent $500 -- $580 $582 ------

@60% Bath/Bedroom 3BR / 2BA 3BR / 2BA 3BR / 2BA 3BR / 2BA ------Base Rent/Month $595 $615 $780 $690 ------Unit GLA (SF) 1,322 1,183 1,322 1,127 ------Adjusted Utility Base Rent $595 $615 $726 $636 ------

Market Bath/Bedroom ------3BR / 2BA 3BR / 2BA 3BR / 2BA 3BR / 2BA 3BR / 2BA Base Rent/Month ------$820 $940 $1,045 $640 $630 Unit GLA (SF) ------1,127 1,270 1,220 1,050 1,150 Adjusted Utility Base Rent ------$726 $940 $958 $586 $576

Property Information Property Type Garden (2 stories) Garden (3 stories) Garden (3 stories) Garden (3 stories) Garden Garden Various Garden Year Built 2008 2004 2004 2004 2001 1991/2005 1976 1974 Market (Conv.)/Subsidy Type @50%, @60% @60% @50%, @60% @50%, @60%, Market Market Market Market Market

Unit Information Total Units 24 32 32 72 N/A N/A N/A 32 Vacant N/A 0 0 7 0 N/A 0 0 Vacancy Rate N/A 0.00% 0.00% 9.70% N/A N/A N/A 0.00%

Utilities central central central central central central central central A/C tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric Cooking tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric Water Heat tenant tenant tenant tenant tenant tenant tenant tenant electric electric electric electric electric electric electric electric Heat tenant tenant tenant tenant tenant tenant tenant tenant Other Electric tenant tenant tenant tenant tenant tenant tenant tenant Water tenant tenant landlord landlord tenant tenant landlord landlord Sewer tenant tenant landlord landlord tenant tenant landlord landlord Trash Collection landlord landlord landlord landlord landlord landlord landlord landlord

In-Unit Amenities Balcony/Patio yes yes no yes yes yes no yes Blinds yes yes yes yes yes no yes yes Carpeting yes yes yes yes yes yes yes yes Central A/C yes yes yes yes yes yes yes yes Dishwasher yes yes yes yes yes yes yes yes Exterior Storage yes no no no no no no no Ceiling Fan yes no yes yes yes yes no no Garbage Disposal yes yes yes yes yes yes yes yes Microwave yes yes yes yes yes yes no no Oven yes yes yes yes yes yes yes yes Refrigerator yes yes yes yes yes yes yes yes Washer/Dryer hookup yes yes yes yes yes yes yes no

Property Amenities Basketball Court no no no no no yes yes no Business Center no no no no yes no no no Car Wash no no no no yes yes no no Clubhouse yes yes yes yes no no yes no Exercise Facility no no no no yes yes no no Garage no no no no no no no no Jacuzzi no no no no no yes no no Central Laundry yes yes yes yes yes yes yes yes Non-shelter Services yes no no no no no no no Off-Street Parking yes yes yes yes yes yes yes yes On-Site Management yes yes yes yes yes yes yes yes Picnic Area no no no no no yes yes no Playground yes yes yes yes yes yes yes no Sauna no no no no no no no no Sport Court no no no no no yes no no Swimming Pool no no no no yes yes yes yes Tennis Court no no no no no no yes yes Volleyball Court no no no no no yes yes no Garage Fee ------

Services Adult Education yes no no no no no no no

Security In-Unit Alarm no no no no no no no no Patrol no no no no yes no yes no Perimeter Fencing no no no no no no yes no Video Surveillance no no no no no no yes no

Premium Amenities

Other Amenities Other n/a n/a n/a n/a n/a n/a n/a n/a Collins Park – Goose Creek, SC – Market Study

Market Inventory In addition to the true comparable properties, we have inventoried the closest and most comparable multifamily market rate rental communities based on age, number of units, and condition, we were able to identify within the City of Goose Creek as well as all subsidized and LIHTC communities located within the defined PMA. The following table provides information on these properties. A map identifying the location of each property can be found in the addenda.

MARKET INVENTORY LIST OF PROPERTIES

Property Name Address City Special Notes Shannon Park Apartments 103-F Central Avenue Goose Creek Tenants pay 30% of their income Parkway Village Apartments 775 Parkway Boulevard Summerville Tenants pay 30% of their income Oakfield Apartments 8750 Fairwind Drive North Charleston Tenants pay 30% of their income Fairwinds Apartments 8750 Fairwind Drive North Charleston Tenants pay 30% of their income Greentree North Apartments 2630 Otranto Road North Charleston Tenants pay 30% of their income Filbin Creek Apartments 1237 Sumner Avenue North Charleston Tenants pay 30% of their income Hidden Oaks 5941 Willard Street 15-A Hanahan No longer LIHTC- Market Sedgefield Apt. Liberty Homes 1650 Celtic Charleston Does not exist at address Gardens at Montague 4840 Upjohn Road N. Charleston Included Osprey Place Baker Hospital Blvd & Evatt Ln N. Charleston Included Birchwood Apartments 2001 Tipson N. Charleston Included Wisteria Place 700 Block of Sangaree Parkway Summerville Proposed - Family Ivy Ridge Greenridge Rd N. Charleston Proposed - Family Hallmark Homes at Redbank Redbank Road Goose Creek Proposed - Family Pine Lakes Apartments 120 S Cranford Rd Goose Creek Market Summer Creek Apartments 5055 Harbour Lake Drive Goose Creek Market Pinebrook Pointe/Pine Harbour 5500 Harbour Lake Drive Goose Creek Market Springhill Apartments 100 Swift Blvd Goose Creek Market Atlantic Palms 2510 Atlantic Palms Ln Charleston Market Townhouses at Pine Harbor II 4000 Harbour Lake Drive Goose Creek Market Rosewood Townhouses 4501 Harbour Lake Drive Goose Creek Market

We attempted to interview each of the aforementioned properties in the market area. However, some of the property managers refused to participate in our survey. We were able to obtain occupancy and waiting list information from the following properties.

Novogradac & Company LLP 58 Collins Park – Goose Creek, SC – Market Study

Property Name Rent Structure Total Units Vacant Units Vacancy Rate Waiting List Parkway Village Apartments Section 8 144 0 0.00% 341 Households Oakfield Apartments Section 8 180 0 0.00% 50+ Households Fairwinds Apartments Section 8 168 0 0.00% 50+ Households Filbin Creek Apartments Section 8 269 9 5.00% 10-12 households Gardens at Montague LIHTC 64 1 2.00% Yes Osprey Place LIHTC 108 22 20.00% 2 Households Birchwood Apartments LIHTC 64 1 2.00% 200+ Households Pine Lakes Apartments Market 228 5 2.20% No Summer Creek Apartments Market 120 0 0.00% Yes Pinebrook Pointe/Pine Harbor Market 416 1 0.24% No Springhill Apartments Market 192 0 0.00% 4 Households Atlantic Palms Market 312 9 2.90% No Hidden Oaks Market 88 1 1.10% No Townhouses at Pine Harbor II Market 187 4 2.10% No Source: Novogradac & Company LLP

This survey indicates a low vacancy rate of 2.68 percent within the market area. All of the LIHTC properties reported vacancies; however, all of the properties reported the presence of a waiting list. Therefore, even if the property has a vacancy there is typically someone ready to lease the units as soon as it is made available for occupancy. Furthermore, the vacancy rate for the LIHTC properties is the average vacancy rate reported in June 2005 and December 2005. Currently, management at Osprey Place reported a much lower vacancy rate of 6.5 percent. Using this more current vacancy rate would bring the overall vacancy rate within the market down significantly to 1.7 percent.

Pipeline Construction The South Carolina recent allocation list reports that a total of three LIHTC projects in the PMA that have recently received allocations and are either in the final planning stages or are currently under construction, including Wisteria Place, Ivy Ridge, and Hallmark Homes at Redbank Road. Wisteria Place will be located in Summerville along the northeastern border of the PMA, approximately 11 miles north of the Subject. The project was proposed as infill new construction and will have a total of 64 units. This family property will feature 32, two-bedroom units and 32, three-bedroom units. Ivy Ridge, also a family property, will be constructed in Charleston approximately 6.7 miles from the Subject and will feature a total of 72 units of which 12 will be one-bedroom units, 41 will be two-bedroom units, and 18 will be three-bedroom units. The final project, Hallmark Homes at Redbank Road, is located in Goose Creek in close proximity to the Subject. Construction began in August 2005 and has a scheduled completion date of September 2006. The property will consist of 13, three-story garden style residential buildings and a clubhouse/leasing office. The tax credit rents are going to be at the maximum allowable rates of $571 for a one-bedroom, $679 for a two- bedroom, and $780 for a three-bedroom unit. All of these properties will be for families. However, Wisteria Place is much further north than the Subject and is not likely to compete directly with the Subject. The remaining two proposed developments, Ivy Ridge and Hallmark Homes at Redbank will likely compete directly with the Subject.

Furthermore, we spoke with Jeff Molinari, city planner for Goose Creek, who reported that there is a significant amount of new development in the Goose Creek area, both residential and commercial. According to Mr. Molinari, Lowe’s is currently clearing and putting in infrastructure for the new Novogradac & Company LLP 59 Collins Park – Goose Creek, SC – Market Study

store which will be located on St. James Avenue. Construction has not begun and the scheduled opening date is sometime in the fall of 2006.

There are seven residential developments that are either in the planning stages or currently under construction in the Goose Creek area. The majority of these new developments are going to be single family homes and townhouse developments. Liberty Hall Plantation, Brickhope Plantation, Longleaf Plantation, Persimmon Hill , Sophia Landing, and Cocker’s Crossing will all feature single family homes. Several of these developments will also feature townhouses. While some have begun construction, such as Liberty Hall, Longleaf, Cocker’s Crossing and Persimmon Hill, others are still clearing the land and putting in infrastructure, including Brickhope and Sophia Landing. According to Mr. Molinari, the Brickhope developers will probably begin applying for permits this summer, while Sophia Landing is not expected to be completed until sometime in 2007. Liberty Hall Plantation, developed by Centex Homes, will consist of 847 single family homes; Longleaf Plantation, developed by Beazer Homes, will consist of 337 units; Persimmon Hill, developed by Portrait Homes, will feature 317 single family and townhouse units; and, Cocker’s Crossing will consist of 263 single family and townhouse units. Currently there are a total of 1,764 single family home and townhouse units under construction. In addition to those units which are currently under construction, there are a total of 1,200 single family homes planned for Brickhope Plantation, and 466 single family homes and townhouses planned for Sophia Landing. Brickhope Plantation will also feature 525 multifamily units, most likely a combination of garden style apartments and townhouses as well as 37 acres of commercial space. Cobblestone Village, the only planned project in Goose Creek which will consist entirely of rental housing, will consist of 196 townhouses, 320 garden style apartment units, and 35 acres of commercial land. Cobblestone Village is scheduled to enter the market in 2007. Therefore, within the next two years, a total of 3,271 units will be added into the supply. The majority of these units will be single family homes and townhouses of which some townhouses will be for sale and others will be rental units. Furthermore, 1,042 will be a combination of townhouse and garden style rental units.

While there is a significant amount of new construction in the PMA, the Subject will remain affordable and offer a price value relationship.

Novogradac & Company LLP 60

I. PROPERTY INTERVIEWS

Collins Park – Goose Creek, SC – Market Study

PROPERTY INTERVIEWS

Age and Condition The Subject’s market area has been developed over the past few decades. Comparable properties one, two, three, and four were all built in 2004 and are in excellent condition. Comparable property five was built in 2001 and is in good condition. Comparable property six was built in 1991 and was renovate in 2005 and is also in good condition. Comparable properties seven through 11 were all built in the 1970s or 1980s and are in fair condition, which are all in the same neighborhood as the Subject site. The Subject will be similar to the newer properties and will be superior to the properties in its immediate neighborhood.

Unit Mix The following table shows the unit mix of the properties in our survey. As illustrated in the matrices, comparable rental properties offered one, two, and three-bedroom units. Comparable properties five, six, and eight, which total 956 units, could not report their unit mix by bedroom. These 956 units have been removed from the following table.

Unit Mix Total Units Percent Total Units Percent Unit Type (Subject) (Subject) (Comps) (Comps) 1 BR 0 0% 132 11% 2 BR 24 50% 903 75% 3 BR 24 50% 168 14% Total 48 100% 1,203 100%

The Subject features two-bedroom (50 percent) and three-bedroom (50 percent) units. Two- bedroom units dominate the market, accounting for 75 percent of total units surveyed. All property managers indicated demand for additional two- and three-bedroom units as most tenants are families. Thus, the Subject will supplement the existing housing stock with larger bedroom types. The following table illustrates the weighted vacancy rates by unit type. It should be noted that comparable properties four, five, six, and eight, which represents 1,196 units, could not provide vacancy by unit type. These 1,196 units have been removed from the following table.

Weighted Vacancy

Total Percent Unit Type Units Vacant Units Vacant 1 BR 32 0 0.00% 2 BR 763 9 1.18% 3 BR 168 7 4.17% Total 963 16 1.66%

The highest vacancy rate is found in the three-bedroom units at 4.17 percent. This is followed by the two-bedroom units at 1.18 percent. Overall, all units are below five percent vacancy which indicates a stable market. As an affordable housing property, the Subject’s affordable units are expected to have low vacancy. We utilized a conservative estimate of five percent vacancy.

Novogradac & Company LLP 62 Collins Park – Goose Creek, SC – Market Study

Unit Size The Subject consists of a combination of two and three-bedroom units. We attempted to compare the Subject to similar unit types. The table below depicts the square footage of the Subject and comparable properties in the market. It should be noted that the average, minimum and maximum unit sizes are available only for those properties that would provide this information.

Unit Size Comparison

Surveyed Surveyed Advantage/ Unit Type Subject Surveyed Min Max Average Disadvantage 2 BR 1,082 877 1,127 1,016 6% 3 BR 1,322 1,050 1,322 1,190 10%

Both the two and three-bedroom units at the Subject are above the average square footage reported within the market. Therefore, the Subject will be similar to slightly superior with regards to unit size. The Subject’s unit size is slightly larger when compared to two of the three LIHTC properties in the market. This will give the Subject a positive price value relationship.

Total Number of Baths per Unit The Subject will offer two bathrooms within two- and three-bedroom units. This is standard in the market.

Unit Amenities The Subject’s units will be equipped with a microwave, range, refrigerator, dishwasher, garbage disposal, central air conditioning, washer/dryer hook-ups, walk-in closets, patio/balconies, ceiling fans, carpet and vinyl flooring in wet areas, and window coverings. The Subject will be generally similar to the three LIHTC properties, comparables one, two, and three. The Subject will also be generally similar to the three newer market rate properties, comparable properties four, five, and six and comparable property 11. Comparable properties seven, eight, nine, and 10 will all be inferior as they do not include a microwave, ceiling fans, or exterior storage. Overall, the Subject will be competitive in the market.

Common Area Amenities Community amenities will include an on-site leasing office, community building, central laundry, playground, and supportive services. The Subject will be similar to the three LIHTC comparable properties, comparables one, two and three. All other market rate comparable properties are generally superior as they offer amenities such as computer centers, exercise facilities or swimming pools, and either basketball, tennis, or volleyball courts. Overall, the Subject will be similar to the LIHTC properties and inferior to the market rate properties.

Security Features Security will often vary based on the needs of the particular area and size of the particular project. Comparable properties four, five, eight, 10, and 11 all offer some form of security. Generally, the Subject’s market area is considered to be safe and security features are not considered to be essential.

Utility Structure The Subject will include trash. To make a fair comparison of the Subject rent levels to comparable properties, rents at comparable properties are typically adjusted to be consistent with the Subject. The comparable properties’ asking rents are illustrated in the matrices as well as rents adjusted to the Subject’s utility convention. Novogradac & Company LLP 63 Collins Park – Goose Creek, SC – Market Study

Parking The Subject will offer adequate surface parking. This is typical for the LIHTC properties. Some of the market rate properties offer garages for an additional fee. Overall, the parking at the Subject is considered adequate.

Tenant Makeup The LIHTC property managers reported that tenants are mostly families. The market rate properties reported a large number of military families and a mix of singles, elderly and smaller families. Many of the property managers reported that approximately 30 percent of tenants are from out of state while the remaining tenants are from the greater Charleston area.

Concessions The following table illustrates the concessions currently in the market.

Property name Rent Structure Concession Birchwood Apartments @60% None Gardens At Montague @50%, @60% None Osprey Place @50%, @60%, Market Discounted 3BR Market Alta Shores Market 1 month free for 2BR Atlantic Palms Market None Audubon Park Market 1st month free Pine Lakes Market None Pinebrook Pointe/pine Harbour Market None Springhill Apartments Market None Summercreek Apartments Market None Townhouses At Pine Harbor II Market None

Three of the 11 comparable properties are reporting a concession. The concessions are not significant and there are no concessions offered for the LIHTC units. We do not expect the Subject to offer concessions.

Waiting Lists The following table illustrates the waiting lists at the comparable properties.

Property name Rent Structure Waiting List Birchwood Apartments @60% 400+ HH Gardens At Montague @50%, @60% Very long for 3BR Osprey Place @50%, @60%, Market 2HH for 2BR Alta Shores Market None Atlantic Palms Market Yes for 2 and 3BR Audubon Park Market None Pine Lakes Market None Pinebrook Pointe/pine Harbour Market None Springhill Apartments Market 2HH Summercreek Apartments Market Yes Townhouses At Pine Harbor II Market None

Novogradac & Company LLP 64 Collins Park – Goose Creek, SC – Market Study

All three of the three LIHTC properties reported waiting lists. We expect the property manager at the Subject to maintain a waiting list. This will assist the property in continually leasing available units quickly and efficiently.

Historical Rent Increases The following table illustrates the rent increases at the comparable properties.

Property name Rent Structure Rent Increase Birchwood Apartments @60% None Gardens At Montague @50%, @60% 1% Osprey Place @50%, @60%, Market 1% Alta Shores Market 1% Atlantic Palms Market 1-2% Audubon Park Market 8% Pine Lakes Market 11-12% Pinebrook Pointe/pine Harbour Market Constantly changing Springhill Apartments Market 4% Summercreek Apartments Market None Townhouses At Pine Harbor II Market None

One way to determine if the apartment market is healthy is to look to the historical rent increases, or lack of them. If rents are stable or increasing in the area, the market may be in a state of expansion. Seven of the 11 properties reported rent increases. Most properties reported a slight increase of one percent. Overall, the rental rate increases indicate a healthy market.

Market Vacancy The table below illustrates the occupancy by unit type for those properties reporting vacancy.

Overall Vacancy

Average Average Vacancy Current Vacant Current Vacancy Vacancy 2nd & Rate 2nd & 4th Q Property name Rent Structure Total Units Units Rates 4th Q 2005* 2005* Birchwood Apartments @60% 64 0 0.00% 1 1.56% Gardens At Montague @50%, @60% 64 0 0.00% N/Av N/Av Osprey Place @50%, @60%, Market 108 7 6.50% 22 20.37% Alta Shores Market 240 33 13.80% N/Av N/Av Atlantic Palms Market 312 0 0.00% N/Av N/Av Audubon Park Market 228 27 11.80% N/Av N/Av Pine Lakes Market 228 5 2.20% N/Av N/Av Pinebrook Pointe/pine Harbour Market 416 1 0.20% N/Av N/Av Springhill Apartments Market 192 0 0.00% N/Av N/Av Summercreek Apartments Market 120 0 0.00% N/Av N/Av Townhouses At Pine Harbor II Market 187 4 2.10% N/Av N/Av Total 2159 77 3.60% 23 13.37% *LIHTC properties only

The current vacancy rate for the comparable properties ranges from zero to 13.8 percent with an average of 3.6 percent. Two of the three LIHTC properties are 100 percent occupied. Osprey Place reported vacancies within their three-bedroom units. The manager at Osprey Place indicated they perform thorough credit checks and criminal checks in order for residents to qualify. She also stated

Novogradac & Company LLP 65 Collins Park – Goose Creek, SC – Market Study

that they would prefer to have slightly higher than average vacancy rate than have poor quality tenants. Further, the high vacancy at this property during 2005 is from an on-going litigation. The property profile in the addenda has more information regarding the litigation. Alta Shores and Audubon Park reported the highest market rate vacancy rates at 13.8 and 11.8 percent, respectively. The large vacancy rate at Alta Shores was reportedly due to military tenants being deported. The manager indicated that since they are very close to the military base, they have a very high turnover and vacancy fluctuates. The property manager at Audubon Park also indicated that there have been several military transfers in the past few months which have resulted in an increased vacancy. The manager also stated that some tenants have left to purchase homes. Overall, the property managers indicated that the market is generally stable and healthy. The LIHTC reported no military tenants as they are over-income qualified. As an affordable housing property, the Subject’s affordable units are expected to have low vacancy and maintain a waiting list. We have utilized a conservative estimate of three percent vacancy which results in a stabilized occupancy of 95 percent.

Reasonability of Rents Rents provided by property managers at some properties may include all utilities while others may require tenants to pay all utilities. The Subject will include water, sewer and trash expenses in rental rates. To make a fair comparison of the Subject rent levels to comparable properties, rents at comparable properties are typically adjusted to be consistent with the Subject. Adjustments are made using Section 8 Utility Allowances for Region III. The rent analysis is based on net rents at the Subject as well as surveyed properties.

The table below illustrates the net and gross rents at the Subject, as well as the maximum allowable rents. SCSHFDA requires that LIHTC properties have rents that are at or below SCSHFDA Maximum Allowable Rent per the Rent and Income Guidelines established on their website.

LIHTC UNITS AT 50 PERCENT AMI % Rental Advantage over Estimated Maximum Max Allowable Number Utility Allowable Rents Unit Type of Units Net Rent Allowance Gross Rent Gross Rent 2BR/2BA 12 $400 $154 $554 $635 12.76% 3BR/2BA 12 $500 $174 $674 $733 8.05%

LIHTC UNITS AT 60 PERCENT AMI % Rental Advantage over Estimated Maximum Max Allowable Number Utility Allowable Rents Unit Type of Units Net Rent Allowance Gross Rent Gross Rent 2BR/2BA 12 $500 $154 $654 $762 14.17% 3BR/2BA 12 $595 $174 $769 $879 12.51%

All of the proposed rental rates at the Subject will have an advantage over the maximum allowable gross rent levels. We believe that the Subject’s rents at both the 50 percent and 60 percent AMI levels are achievable because of the similar amenities, quality of construction, and location that the Subject will offer. The following table illustrates the Subject’s proposed rents to the comparable LIHTC properties surveyed.

Novogradac & Company LLP 66 Collins Park – Goose Creek, SC – Market Study

LIHTC RENT COMPARISON – 50% AMI Property Name Two- Three- bedroom bedroom Rent Rent Collins Park (Subject) $400 $500 Birchwood Apartments N/Av N/Av Gardens At Montague $501 $580 Osprey Place $502 $582 Average (Excluding the Subject) $502 $581

LIHTC RENT COMPARISON – 60% AMI Property Name Two- Three- bedroom bedroom Rent Rent Collins Park (Subject) $500 $595 Birchwood Apartments $491 $615 Gardens At Montague $627 $726 Osprey Place $628 $636 Average (Excluding the Subject) $582 $659

The Subject’s proposed two- and three-bedroom rental rates at the 50 percent and 60 percent AMI levels will be below all three of the LIHTC comparable properties, with the exception of the two- bedroom units at Birchwood Apartments. Gardens at Montague and Osprey Place are both at the maximum allowable rent levels for 50 and 60 percent of AMI, with the exception of the three- bedroom 60 percent AMI units at Osprey Place. Osprey Place currently has a discounted rent for their three-bedroom 60 percent and market rate units. Overall, the Subject will offer competitive rents and will generally have a price value relationship when compared to other LIHTC properties.

The overall average and the maximum and minimum adjusted rents for market properties surveyed are illustrated in the table below in comparison with net rents for the Subject.

NET RENT COMAPRISON : MARKET RENTS Unit Subject Subject Comparable Comparable Comparable Type Properties Properties Properties LIHTC 50% LIHTC 60% Minimum Maximum Average 2BR $400 $500 $476 $910 $623 3BR $500 $595 $576 $958 $757

As illustrated in the table above, the Subject’s proposed rents are significantly below the average rents at the market rate properties. Pinebrook Pointe, Springhill Apartments, and Summercreek offer the lowest rents, which are slightly below the Subject’s rents at 60 percent AMI. These properties were built in the 1970s/80s and are significantly inferior when compared to the Subject with regards to condition, unit size, and in-unit amenities. These properties are located within the same neighborhood as the Subject. The highest rental rates are being achieved at the newer market rate properties. These properties also reported the highest number of military tenants. They indicated that their rents are in-line with the military housing voucher. These properties are significantly superior when compared to the older market rate properties within the Subject’s neighborhood. We

Novogradac & Company LLP 67 Collins Park – Goose Creek, SC – Market Study

believe that the rents are reasonable and will offer a positive price value relationship in the market area.

Absorption Three of the comparable properties were able to report absorption rates, Gardens at Montague, Osprey Place, and Alta Shores. Gardens at Montague reported an absorption rate of 21 months, or three to four months. Osprey Place stated that they were stabilized within seven to eight months, or 15 units per month. Alta Shores reported that their absorption rate was 24 units per month on average, or 10 months. All three LIHTC properties report lengthy waiting lists. There are three proposed LIHTC properties in the PMA. According to our demand estimates, there is adequate demand for the Subject as well as the proposed properties. We believe that the Subject will have an absorption rate of four months, or 12 units per month.

Affect of Subject on Other Affordable Units in Market Capture rates for the Subject are considered adequate. The two closest LIHTC properties reported full occupancy and lengthy waiting lists. Birchwood Apartments reported maintaining over 400 households on their waiting list. This is indicative of ample demand. We believe the Subject meets the goals of affordable housing.

Summary Evaluation of the Proposed Project Our market interviews indicate strong demand for additional affordable housing in the market area. The two closest LIHTC properties reported full occupancy and lengthy waiting lists. Birchwood Apartments reported maintaining over 400 households on their waiting list. The Subject will offer some of the lowest rents when compared to the LIHTC properties. This will give the Subject a positive price value relationship. There are several new projects either proposed or under construction in the PMA. Several of the developments will be for sale units or market rate units. A significant portion of the market rate tenants are reported to be affiliated with the military. However, none of the LIHTC properties reported military tenants as they are over income qualified. The Subject is well-designed with large units and a full range of amenities to accommodate the tenancy. As proposed, the Subject property appears to be a well-conceived addition to the affordable housing market and we recommend the property as proposed.

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J. LOCAL INTERVIEWS

Collins Park – Goose Creek, SC – Market Study

South Carolina Regional Housing Authority No. 3 – (803) 259-3588 (Ms. Debra Young)

PUBLIC AND ASSISTED HOUSING The South Carolina Regional Housing Authority Number 3 oversees Allendale, Bamberg, Barnwell, Berkeley, Calhoun Hampton, Jasper, and Orangeburg Counties. We spoke with Debra Young, Section 8 Supervisor of the South Carolina Regional Housing Authority Number Three, who reported that there are 139 Section 8 vouchers in use in Berkeley County. There are approximately 61 households on the Berkeley County waiting list and the list has been closed since 2002. Only four vouchers were issued in March 2006. The South Carolina Regional Housing Authority 3 currently operates a total of 16 developments with a total of 896 public housing units. They also oversee a total of 530, Section 8 vouchers between the seven counties.

Goose Creek Planning Department We spoke with Jeff Molinari, city planner for Goose Creek, who reported that there is a significant amount of new development in the Goose Creek area, both residential and commercial. According to Mr. Molinari, Lowe’s is currently clearing and putting in infrastructure for the new store which will be located on St. James Avenue. Construction has not begun and the scheduled opening date is sometime in the fall of 2006.

There are seven residential developments that are either in the planning stages or currently under construction in the Goose Creek area. The majority of these new developments are going to be single family homes and townhouse developments. Liberty Hall Plantation, Brickhope Plantation, Longleaf Plantation, Persimmon Hill, Sophia Landing, and Cocker’s Crossing will all feature single family homes. Several of these developments will also feature townhouses. While some have begun construction, such as Liberty Hall, Longleaf, Cocker’s Crossing and Persimmon Hill, others are still clearing the land and putting in infrastructure, including Brickhope and Sophia Landing. According to Mr. Molinari, the Brickhope developers will probably begin applying for permits this summer, while Sophia Landing is not expected to be completed until sometime in 2007. Liberty Hall Plantation, developed by Centex Homes, will consist of 847 single family homes; Longleaf Plantation, developed by Beazer Homes, will consist of 337 units; Persimmon Hill, developed by Portrait Homes, will feature 317 single family and townhouse units; and, Cocker’s Crossing will consist of 263 single family and townhouse units. Currently there are a total of 1,764 single family home and townhouse units under construction. In addition to those units which are currently under construction, there are a total of 1,200 single family homes planned for Brickhope Plantation, and 466 single family homes and townhouses planned for Sophia Landing. Brickhope Plantation will also feature 525 multifamily units, most likely a combination of garden style apartments and townhouses as well as 37 acres of commercial space. Cobblestone Village, the only planned project in Goose Creek which will consist entirely of rental housing, will consist of 196 townhouses, 320 garden style apartment units, and 35 acres of commercial space. Cobblestone Village is scheduled to enter the market in 2007. Therefore, within the next two years, a total of 3,271 units will be added

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Collins Park- Goose Creek, SC – Market Study

into the supply. The majority of these units will be single family homes and townhouses of which some townhouses will be for sale and others will be rental units. Furthermore, 1,042 will be a combination of townhouse and garden style rental units

There appears to be a significant amount of new construction within the PMA. The demand analysis indicates that there is adequate demand for the Subject after removing all competitive units. The Subject’s low rents and location within walking distance of a grocery store are positive indicators for the Subject property. The PMA is in the path of development from the Charleston peninsula.

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K: CONCLUSIONS AND RECOMMENDATIONS

Collins Park – Goose Creek, SC – Market Study

CONCLUSIONS AND RECOMMENDATIONS

The project is recommended as proposed. Our market interviews indicate strong demand for additional affordable housing in the market area. The two closest LIHTC properties reported full occupancy and lengthy waiting lists. Birchwood Apartments reported maintaining over 400 households on their waiting list. The Subject will offer some of the lowest rents when compared to the LIHTC properties. This will give the Subject a positive price value relationship. There are several new projects either proposed or under construction in the PMA. Several of the developments will be for sale units or market rate units. A significant portion of the market rate tenants are reported to be affiliated with the military. However, none of the LIHTC properties reported military tenants as they are over income qualified. The Subject is well-designed with large units and a full range of amenities to accommodate the tenancy. As proposed, the Subject property appears to be a well-conceived addition to the affordable housing market and we recommend the property as proposed.

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K. ANALYST QUALIFICATIONS

STATEMENT OF PROFESSIONAL QUALIFICATIONS H. BLAIR KINCER, MAI

I. Education

Duquesne University, Pittsburgh, Pennsylvania Masters in Business Administration Graduated Cum Laude

West Virginia University, Morgantown, West Virginia Bachelor of Science in Business Administration Graduated Cum Laude

II. Licensing and Professional Affiliation

Member of the Appraisal Institute (MAI) Candidate member of the Commercial Investment Real Estate Institute pursuing the Certified Investment Member (CCIM) designation. Member Frostburg Housing Authority

Certified General Real Estate Appraiser - State of Maryland Certified General Real Estate Appraiser – State of New York Certified General Real Estate Appraiser – Commonwealth of Virginia Certified General Real Estate Appraiser – State of Washington

III. Professional Experience

Partner, Novogradac & Company, LLP Vice President, Capital Realty Advisors, Inc. Vice President - Acquisitions, The Community Partners Development Group, LLC Commercial Loan Officer / Work-Out Specialist, First Federal Savings Bank of Western Maryland Manager, Real Estate Valuation Services, Ernst & Young LLP Senior Associate, Joseph J. Blake and Associates, Inc. Senior Appraiser, Chevy Chase, F.S.B. Senior Consultant, Pannell Kerr Forster

IV. Professional Training

Have presented at and attended Various IPED and Novogradac conferences regarding the affordable housing industry. CCIREI – Course CI 101 Financial Analysis for Commercial Real Estate Appraisal Institute – Real Estate Appraisal Principles Appraisal Institute – Basic Valuation Procedures Appraisal Institute – Capitalization Theory and Techniques Part A and B Appraisal Institute – Case Studies in Real Estate Valuation Appraisal Institute – Standards and Professional Practice Appraisal Institute – Valuation Analysis and Report Writing BAI Seminars – Loan Review, Advanced Loan Review, Commercial Loan Work - Out National Institute of Trial Lawyers Appraisal Institute– Expert Witness Testimony Ernst & Young, LLP– - Capital Markets and Financing

H. Blair Kincer Qualifications Page 2

V. Real Estate Assignments

A representative sample of Due Diligence, Consulting or Valuation Engagements includes:

• Have managed and conducted numerous market and feasibility studies for affordable housing. Properties are generally Section 42 Low Income Housing Tax Credit Properties. Local housing authorities, developers, syndicators and lenders have used these studies to assist in the financial underwriting and design of LIHTC properties. Analysis typically includes; unit mix determination, demand projections, rental rate analysis, competitive property surveying and overall market analysis. An area of special concentration has been the category of Senior Independent living properties. Work has been national in scope with a concentration on the east coast.

• Have managed and conducted numerous appraisals of affordable housing (primarily LIHTC developments). Appraisal assignments typically involved determining the as is, as if complete and the as if complete and stabilized values. Additionally, encumbered (LIHTC) and unencumbered values were typically derived. The three traditional approaches to value are developed with special methodologies included to value tax credit equity, below market financing and Pilot agreements.

• In accordance with HUD Notice H 00-12, Mr. Kincer has completed numerous rent comparability Studies for various property owners and local housing authorities. The properties were typically undergoing recertification under HUD’s Mark to Market Program.

• Member of the due diligence team hired by Insignia/ESG to assist in the determination of underlying asset value and marketability of a large retail portfolio of regional malls. Assignment included review of leases, lease abstracting, and cash flow modeling. Prepared due diligence package that included lease abstracts, market analysis and projected operations with explanatory comments.

• Assisted a developer on three projects located in Maryland through all stages of the development process. This assistance included market analysis, contract negotiation, third party report supervision and preparation of financing packages. Market analysis included; preliminary property screening, market analysis, comparable rent surveys, and development programming. Support for contract negotiations involved cash flow projections and valuation analyses. Third party report supervision entailed the marshaling and review of the appropriate third party reports including market studies, environmental and engineering reports and appraisals. Preparation of financing packages included the compilation of development budgets and cash flow projections. Completed financing submissions including; Tax Exempt Bond Applications, Credit Enhancement Applications, Construction Loan Applications, and alternative financing applications.

• Completed a market study for an affordable housing developer on Clifton Terrace Apartments in Washington, DC. Clifton Terrace is a former HUD financed property currently owned by the Federal Government. The market study was used in a response to a request for redevelopment proposals. Our research included neighborhood analysis, competitive supply evaluation and demand projections. Demand by family size was further analyzed using PUMS detailed census analysis. This analysis formed the basis for the proposed unit mix in the response.

STATEMENT OF PROFESSIONAL QUALIFICATIONS MICHALENA M. SKIADAS

I. Education

Union College, Schenectady, New York Bachelor of Arts in Cultural Anthropology Union College Study Abroad, St. Lucy, Barbados

II. Professional Experience

Manager, Novogradac & Company LLP Dallas / Fort Worth and Atlanta Research Manager, CoStar Group, Inc. Senior Research Analyst / Newswire Editor, CoStar Group, Inc.

III. Professional Training and Continuing Education

Member, National Council of Affordable Housing Market Analysts (NCAHMA) Attended HUD Community Development Block Grant (CDBG) 30th Anniversary Conference, September 13-14, 2004, Washington, DC Successfully completed “Introduction to Commercial Real Estate Analysis” and “Financial Analysis for Commercial Real Estate Investment”.

IV. Real Estate Assignments

A representative sample of Due Diligence, Consulting, or Valuation Engagements includes:

• Conducted numerous market and feasibility studies for affordable housing. Properties are generally Section 42 Low Income Housing Tax Credit Properties. Local housing authorities, developers, syndicators and lenders have used these studies to assist in the financial underwriting and design of LIHTC properties. Analysis typically includes; unit mix determination, demand projections, rental rate analysis, competitive property surveying and overall market analysis.

• Assisted in preparing an approved HUD Consolidated Plan for the City of Gainesville, GA; which included a housing and homeless needs assessment, market analysis, non- housing needs analysis, and a strategic plan, which conformed to 24CFR Part 91, Consolidated Plan Regulations for the ensuing five-year period (2004-2009).

• Assisted in preparing a comprehensive senior housing study in Seattle, Washington for the Seattle Housing Authority. This study evaluated the Seattle Housing Authority’s affordable senior housing project for their position within the entire city’s senior housing market. The research involved analysis of the senior population by neighborhood, income, household size, racial composition, and tenure.

Michalena Skiadas Qualifications Page 2

• Conducted market studies for senior projects in Virginia Beach, Virginia; Hampton Roads, Virginia; Goshen, New York; Calumet City, Illinois; Pontiac, Illinois; Galesburg, Illinois; San Antonio, Texas; Salt Lake City, Utah; Ogden, Utah; Philadelphia, Pennsylvania; Thibodaux, Louisiana; Jennings, Louisiana; Rio Rico, Arizona; Twin Falls, Idaho; Sheridan, Wyoming; Cheyenne, Wyoming; Detroit, Michigan; Springfield, Missouri; Jackson, Mississippi; Los Banos, California; Oregon, Wisconsin; Milwaukee, Wisconsin, and Racine Wisconsin.

• Assisted in appraisals of proposed new construction and existing Low-Income Housing Tax Credit properties.

• Assisted in the preparation of Rent Comparability Studies and HUD MAP Market Studies according to HUD guidelines. STATEMENT OF PROFESSIONAL QUALIFICATIONS JULIA BUCKMASTER

I. Education

American University, Washington, DC Bachelor of Arts

II. Professional Experience

Research Analyst, Novogradac & Company LLP Legal Secretary, Bergen & Bergen Law Firm Research Assistant, Chr. Michelson Institute

III. Research Assignments

• Assisted with market studies of proposed new construction and existing Low-Income Housing Tax Credit (LIHTC) properties. Market analysis includes preliminary property screenings, market analysis, comparable rent surveys, and demand analysis.

• Assisted in appraisals of proposed new construction and existing Low-Income Housing Tax Credit properties.

L. SIGNED STATEMENT REQUIREMENTS

I affirm that I have made a physical inspection of the market and surrounding area and the information obtained in the field has been used to determine the need and demand for new rental units. I understand that any misrepresentation of this statement may result in denial of further participation in the South Carolina State Housing Finance and Development Authority’s programs. I also affirm that I have no interest in the project or relationship with the ownership entity and my compensation is not contingent on this project being funded. This report was written according to the SCHFDA’s market study requirements. The information included is accurate and can be relied upon by SCSHFDA to present a true assessment of the low-income housing rental market.

H. Blair Kincer, MAI Partner Novogradac & Company LLP

April 12, 2006 / Date

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ADDENDA

Addendum A: Subject and Neighborhood Photos

Addendum B: Comparable Property Photos and Property Profiles

Property Profile Report Birchwood Apartments Comp # 1 Effective Rent Date 3/30/2006 Created by Ryan Moore (May 13, 2005 08:06 PDT) Last updated by Abby Cohen (March 31, 2006 07:25 PST)

Location 2001 Stokes Avenue North Charleston, SC 29406 Charleston County Distance 3.2 miles

Units 64 Vacant Units 0 Vacancy Rate 0.00%

Type Garden (3 stories) Year Built/Renovated 2004 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors n/a Tenant Characteristics n/a

Contact Name Betty Phone 843-824-6644

Market Program @60% Leasing Pace n/a Annual Turnover Rate N/A Change in Rent (Past None Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 10%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water not included

Water Heat not included -- electric Sewer not included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Birchwood Apartments Comp # 1

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 2 Garden 32 959 $491 $0 @60% 200+ 0 0.00% (3 stories) 3 2 Garden 32 1,183 $615 $0 @60% 200+ 0 0.00% (3 stories)

Unit Mix: @60% 2BR / 2BA 3BR / 2BA

Face Rent $491 $615 Concession $0 $0 Concessed Face Rent $491 $615 Utility Adjustment $0 $0 Adjusted Rent $491 $615 Property Profile Report (page 3) Birchwood Apartments Comp # 1

Amenities In-Unit Balcony/Patio Security none Blinds Carpeting Central A/C Dishwasher Garbage Disposal Microwave Oven Refrigerator Washer/Dryer hookup

Property Clubhouse Premium none Central Laundry Off-Street Parking On-Site Management Playground

Services none Other none

Comments Birchwood Apartments is a garden-style tax credit property built in 2004. The property is fully leased with a large waiting list of over 400 households. The manager reports very strong demand for affordable housing in this area. The North Charleston Housing Authority is a partner in this project. The ownership entity has received tax credits for another 72 unit property in North Charleston, Alston Lake Apartments, which has yet to break ground. Approximately 10 percent of the tenants are using Section 8 vouchers. There has been no change in the rents over the past year and there are no concessions being offered. Property Profile Report (page 4) Birchwood Apartments Trend Report

2QTR 2005 1QTR 2006 Trend: @60% 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BA 2BA # Units N/A N/A 32 32 Vacancy Rate N/A N/A 0.00% 0.00% Waiting List 200+ 200+ Face Rent $491 $615 $491 $615 Concession $0 $0 $0 $0 Concessed Face Rent $491 $615 $491 $615 Utility Adjustment $0 $0 $0 $0 Adjusted Rent $491 $615 $491 $615

Comments 2QTR 2005 Birchwood is a new construction LIHTC property. This property has 64 units and there are currently two vacancies. Approximately 10 percent of the tenants are using Sectino 8 vouchers. There has been no change in the rents over the past year and there are no concessions being offered. 1QTR 2006 Birchwood Apartments is a garden-style tax credit property built in 2004. The property is fully leased with a large waiting list of over 400 households. The manager reports very strong demand for affordable housing in this area. The North Charleston Housing Authority is a partner in this project. The ownership entity has received tax credits for another 72 unit property in North Charleston, Alston Lake Apartments, which has yet to break ground. Approximately 10 percent of the tenants are using Section 8 vouchers. There has been no change in the rents over the past year and there are no concessions being offered. Property Profile Report Gardens At Montague Comp # 2 Effective Rent Date 2/8/2006 Created by Ryan Moore (May 13, 2005 07:03 PDT) Last updated by Bob Edwards (February 10, 2006 11:38 PST)

Location 4840 Upjohn Road North Charleston, SC 29405 Charleston County Intersection: Montague Avenue

Distance 7.7 miles

Units 64 Vacant Units 0 Vacancy Rate 0.00%

Type Garden (3 stories) Year Built/Renovated 2004 Marketing Began 11/1/2004 Leasing Began n/a Last Unit Leased n/a

Major Competitors None Tenant Characteristics n/a

Contact Name Jill-Manager Phone 843-745-9885

Market Program @50%, @60% Leasing Pace n/a Annual Turnover Rate N/A Change in Rent (Past $5 increase in 60% rents. Year) Units/Month Absorbed 21 Concession None

Section 8 Tenants 40%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Gardens At Montague Comp # 2

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 2 Garden 9 1,082 $555 $0 @50% Yes 0 0.00% (3 stories) 2 2 Garden 23 1,082 $681 $0 @60% Yes 0 0.00% (3 stories) 3 2 Garden 10 1,322 $634 $0 @50% Yes 0 0.00% (3 stories) 3 2 Garden 22 1,322 $780 $0 @60% Yes 0 0.00% (3 stories)

Unit Mix: @50% 2BR / 2BA 3BR / 2BA

Face Rent $555 $634 Concession $0 $0 Concessed Face Rent $555 $634 Utility Adjustment ($54) ($54) Adjusted Rent $501 $580

Unit Mix: @60% 2BR / 2BA 3BR / 2BA

Face Rent $681 $780 Concession $0 $0 Concessed Face Rent $681 $780 Utility Adjustment ($54) ($54) Adjusted Rent $627 $726 Property Profile Report (page 3) Gardens At Montague Comp # 2

Amenities In-Unit Blinds Security none Carpeting Central A/C Dishwasher Ceiling Fan Garbage Disposal Microwave Oven Refrigerator Washer/Dryer hookup

Property Clubhouse Premium none Central Laundry Off-Street Parking On-Site Management Playground

Services none Other none

Comments February, 2006: Presently five units are physically vacant as those former tenants have been evicted. All five are pre-leased to new tenants so the property is running at full capacity. There is a long waiting list for the three-bedroom units but only a few households are on the waiting list for a two-bedroom unit. Although this is a very attractive property, it is located in a deteriorating neighorhood with several boarded-up houses.

August, 2005: Gardens at Monague was built in 2004 and was 100 percent leased at opening. Pre-leasing started in November 2004 and the property opened on February 15, 2005. Management indicated that property was fully leased within three months, which averages to be 21 units per month. During our previous interview in May 2005, the property was fully occupied. A new manager has taken over since our last interview and indicated the number of Section 8 voucher holders is approximately 40 percent opposed to the previous 33 percent. The management was still unable to provide unit sizes. There are no vacant units and there are approximately 225 households on the waiting list. Property Profile Report (page 4) Gardens At Montague Trend Report

2QTR 2005 3QTR 2005 1QTR 2006 Trend: @50% 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BA 2BA 2BA # Units 9 10 9 10 9 10 Vacancy Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Waiting List Yes Yes Yes Yes Yes Yes Face Rent $555 $634 $555 $634 $555 $634 Concession $0 $0 $0 $0 $0 $0 Concessed Face Rent $555 $634 $555 $634 $555 $634 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $555 $634 $555 $634 $555 $634

2QTR 2005 3QTR 2005 1QTR 2006 Trend: @60% 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BA 2BA 2BA # Units 23 22 23 22 23 22 Vacancy Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Waiting List Yes Yes Yes Yes Yes Yes Face Rent $675 $775 $675 $775 $681 $780 Concession $0 $0 $0 $0 $0 $0 Concessed Face Rent $675 $775 $675 $775 $681 $780 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $675 $775 $675 $775 $681 $780

Comments 2QTR 2005 Gardens at Monague was built in 2004 and was 100 percent leased at opening. Pre-leasing started in November 2004 and the property opened on February 15, 2005. Of the 64 units, 21 units are occupied by tenants using Section 8 vouchers. There are no vacant units and there are approximately 225 households on the waiting list. 3QTR 2005 Gardens at Monague was built in 2004 and was 100 percent leased at opening. Pre-leasing started in November 2004 and the property opened on February 15, 2005. Management indicated that property was fully leased within three months, which averages to be 21 units per month. During our previous interview in May 2005, the property was fully occupied. A new manager has taken over since our last interview and indicated the number of Section 8 voucher holders is approximately 40 percent opposed to the previous 33 percent. The management was still unable to provide unit sizes. There are no vacant units and there are approximately 225 households on the waiting list.

1QTR 2006 February, 2006: Presently five units are physically vacant as those former tenants have been evicted. All five are pre-leased to new tenants so the property is running at full capacity. There is a long waiting list for the three-bedroom units but only a few households are on the waiting list for a two-bedroom unit. Although this is a very attractive property, it is located in a deteriorating neighorhood with several boarded-up houses.

Location 2390 Baker Hospital Blvd North Charleston, SC 29405 Charleston County Intersection: Azalea Drive

Distance 9.2 miles

Units 108 Vacant Units 7 Vacancy Rate 6.50%

Type Garden (3 stories) Year Built/Renovated 2004 Marketing Began 1/1/2004 Leasing Began 12/1/2004 Last Unit Leased 7/28/2005

Major Competitors n/a Tenant Characteristics Household size varies, and residents come from all over

Contact Name Holly Phone 843-566-9111

Market Program @50%, @60%, Leasing Pace Pre-leased. Market Annual Turnover Rate 17% Change in Rent (Past None Year) Units/Month Absorbed 15 Concession $780 rent for 3BR Market

Section 8 Tenants 60%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Osprey Place Comp # 3

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 2 Garden 30 933 $556 $0 @50% 2 HH for 0 0.00% (3 stories) 2BR 2 2 Garden 6 933 $682 $0 @60% 2 HH for 0 0.00% (3 stories) 2BR 3 2 Garden 21 1,127 $636 $0 @50% No 1 4.80% (3 stories) 3 2 Garden 15 1,127 $690 $0 @60% No 2 13.30% (3 stories) 3 2 Garden 36 1,127 $820 $40 Market No 4 11.10% (3 stories)

Unit Mix: @50% 2BR / 2BA 3BR / 2BA

Face Rent $556 $636 Concession $0 $0 Concessed Face Rent $556 $636 Utility Adjustment ($54) ($54) Adjusted Rent $502 $582

Unit Mix: @60% 2BR / 2BA 3BR / 2BA

Face Rent $682 $690 Concession $0 $0 Concessed Face Rent $682 $690 Utility Adjustment ($54) ($54) Adjusted Rent $628 $636

Unit Mix: Market 2BR / 2BA 3BR / 2BA

Face Rent n/a $820 Concession $0 $40 Concessed Face Rent n/a $780 Utility Adjustment $0 ($54) Adjusted Rent n/a $726 Property Profile Report (page 3) Osprey Place Comp # 3

Amenities In-Unit Balcony/Patio Security none Blinds Carpeting Central A/C Dishwasher Ceiling Fan Garbage Disposal Microwave Oven Refrigerator Walk-In Closet Washer/Dryer hookup

Property Clubhouse Premium none Central Laundry Off-Street Parking On-Site Management Playground

Services none Other none

Comments Current Interview (03/27/2006): Osprey Place is a LIHTC family property with over 60 percent Section 8 tenants. Management reported that in order to qualify, applicants must pay the income requirements as well as a criminal background check and credit check. Many applicants are denied due to bad credit. The rental rates have not changed in the past year. The property is currently 93.5 percent occupied a slight decline from the previous interview in February 2006 when the property was 95.6 percent occupied. The vacancies are all in the three-bedroom units with the majority in the market rate three-bedroom units. A special rental rate of $780 per month is currently being offered on the three-bedroom market rate units with the signing of a 12-month lease. The rents are at the maximum allowable. Management reported a definite need and demand for more affordable housing in the area, both family and senior housing.

Interview (February, 2006): Occupancy has improved slightly from 93.5 percent to 95 percent. The only concession being offered is for the market rate three-bedroom unit, which has its rent lowered to the 60 percent of AMI threshold.

Original Interview (August, 2005): The Ospreys, formerly known as Osprey Place, is a LIHTC property offering a total of 108 two- and three-bedroom units at the 50% and 60% AMI levels, as well as small number of market rate units.

There was a delay in contruction of 10 months, as the propety was supposed to have opened March 2004. The property opened on January 14, 2005. Marketing first began January 2004, the initial unit delivery was December 2004, and the last unit leased was possibly on July 28 2005 (the contact was unsure of an exact date). This would indicate an absorption pace of about 15 units per month. The occupancy is presently 93.5%, and there is no waiting list. Some months ago, the property began offering the three-bedroom units at the 60% AMI level for the reduced rate of $690 per month. This concession is still being offered. As of our previous interview, of the 50 occupied units at that time, 12 were using Section 8 vouchers. The Section 8 percentage in the table is from our previous interview. Rents have remained the same. Residents come from a broad range of places, and household size and average age varies. While this property offers views of the Ashley River from some of its units, we believe it suffers slightly from its location within an industrial neighborhood. Property Profile Report (page 4) Osprey Place Trend Report

2QTR 2005 3QTR 2005 1QTR 2006 Trend: @50% 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BA 2BA 2BA # Units N/A N/A 30 21 30 21 Vacancy Rate N/A N/A 0.00% 0.00% 0.00% 4.80% Waiting List 0 0 2 HH for 2BR No

Face Rent $556 $636 $556 $636 $556 $636 Concession $0 $0 $0 $0 $0 $0 Concessed Face Rent $556 $636 $556 $636 $556 $636 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $556 $636 $556 $636 $556 $636

2QTR 2005 3QTR 2005 1QTR 2006 Trend: @60% 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BR / 2BA 3BR / 2BA 2BA 2BA # Units N/A N/A 6 15 6 15 Vacancy Rate N/A N/A 0.00% 6.70% 0.00% 13.30% Waiting List 0 0 2 HH for 2BR No

Face Rent $682 $782 $682 $782 $682 $690 Concession $0 $0 $0 $0 $0 $0 Concessed Face Rent $682 $782 $682 $782 $682 $690 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $682 $782 $682 $782 $682 $690

2QTR 2005 3QTR 1QTR 2006 2005 Trend: Market 3BR / 2BA 3BR / 3BR / 2BA 2BA # Units N/A 36 36 Vacancy Rate N/A 11.10% 11.10% Waiting List 0No Face Rent $820 $820 $820 Concession $38 $38 $40 Concessed Face Rent $782 $782 $780 Utility Adjustment $0 $0 $0 Adjusted Rent $782 $782 $780

Comments 2QTR 2005 This LIHTC property has 108 units and is in its initial leasing period. There are currently 50 units leased. The property opened on January 14, 2005. This equates to a leasing pace of approximately 14 units per month. Of the 50 occupied units, 12 are using Section 8 vouchers. The property is currently offering concessed rents on the market rate units. While this property offers views of the Ashley River from some of its units, we believe it suffers slightly from its location within an industrial neighborhood. 3QTR 2005 February, 2006: Occupancy has improved slightly from 93.5 percent to 95 percent. The only concession being offered is for the market rate three-bedroom unit, which has its rent lowered to the 60 percent of AMI threshold.

August, 2005: The Ospreys, formerly known as Osprey Place, is a LIHTC property offering a total of 108 two- and three-bedroom units at the 50% and 60% AMI levels, as well as small number of market rate units. There was a delay in contruction of 10 months, as the propety was supposed to have opened March 2004. The property opened on January 14, 2005. Marketing first began January 2004, the initial unit delivery was December 2004, and the last unit leased was possibly on July 28 2005 (the contact was unsure of an exact date). The occupancy is presently 93.5%, and there is no waiting list. Some months ago, the property began offering the three-bedroom units at the 60% AMI level for the reduced rate of $690 per month. This concession is still being offered. As of our previous interview, of the 50 occupied units at that time, 12 were using Section 8 vouchers. The Section 8 percentage in the table is from our previous interview. Rents have remained the same. Residents come from a broad range of places, and household size and average age varies. While this property offers views of the Ashley River from some of its units, we believe it suffers slightly from its location within an industrial neighborhood.

1QTR 2006 Current Interview (03/27/2006): Osprey Place is a LIHTC family property with over 60 percent Section 8 tenants. Management reported that in order to qualify, applicants must pay the income requirements as well as a criminal background check and credit check. Many applicants are denied due to bad credit. The rental rates have not changed in the past year. The property is currently 93.5 percent occupied a slight decline from the previous interview in February 2006 when the property was 95.6 percent occupied. The vacancies are all in the three-bedroom units with the majority in the market rate three-bedroom units. A special rental rate of $780 per month is currently being offered on the three-bedroom market rate units with the signing of a 12-month lease. The rents are at the maximum allowable. Management reported a definite need and demand for more affordable housing in the area, both family and senior housing.

Location 2605 Elms Plantation Blvd North Charleston, SC Charleston County Distance 3 miles

Units 240 Vacant Units 33 Vacancy Rate 13.80%

Type Garden Year Built/Renovated 2004 Marketing Began 12/1/2003 Leasing Began 3/1/2004 Last Unit Leased 12/1/2004

Major Competitors Atlantic Palms, Oakdbrook Village, Audubon Park Tenant Characteristics Lots of military and out of state

Contact Name Racheal Phone 843-797-7277

Market Program Market Leasing Pace 30 to 45 days Annual Turnover Rate 63% Change in Rent (Past 1BR +1.35%, 2BR +1.1% Year) Units/Month Absorbed 24 Concession 1BR: $500 off; 2BR: 2 mon. free

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water not included

Water Heat not included -- electric Sewer not included

Heat not included -- electric Trash Collection not included Property Profile Report (page 2) Alta Shores Comp # 4

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 1 1 Garden 50 764 $715 $42 Market No N/A N/A 1 1 Garden 50 824 $770 $42 Market No N/A N/A 2 2 Garden 120 1,071 $865 $144 Market No N/A N/A 2.5 2 Garden 20 1,071 $895 $149 Market No N/A N/A

Unit Mix: Market 1BR / 1BA 2BR / 2BA 2.5BR / 2BA

Face Rent $715 - $770 $865 $895 Concession $42 $144 $149 Concessed Face Rent $673 - $728 $721 $746 Utility Adjustment $6 $6 $6 Adjusted Rent $679 - $734 $727 $752 Property Profile Report (page 3) Alta Shores Comp # 4

Amenities In-Unit Balcony/Patio Security In-Unit Alarm Blinds Patrol Carpeting Central A/C Coat Closet Dishwasher Exterior Storage Garbage Disposal Microwave Oven Refrigerator Walk-In Closet Washer/Dryer hookup

Property Business Center Premium none Car Wash Clubhouse Exercise Facility Garage (fee: $100.00) Meeting/Community Rooms Off-Street Parking On-Site Management Picnic Area Swimming Pool

Services none Other none

Comments Current Interview (03/29/2006): Alta Shores is a market rate garden style community offering one and two-bedroom units. Marketing began in December 2003, the first unit was delivered in March 2004 and the last unit was leased in December 2004. This represents an absorption rate of 24 units per month. The property is currently 86 percent occupied with the majority of the vacancies in the two-bedroom units. The two-bedroom units range in price depending on whether the unit has a porch or a sunroom. The two-bedroom unit with a porch is $865 and with a sunroom is $895 per month. The unit with the sunroom is listed in the rent table as a two bedroom unit with a den. The property is close to the military base and therefore has a significant amount of residents who are in some way affiliated with the military. Furthermore, this results in a relatively high turnover. The property is currently offering a concession of $500 off the one-bedroom units with a 13-month lease and two months free on a two-bedroom with a 13-month lease. The rents increased by $10 in August 2005. This represents an increase of 1.4 percent and 1.3 percent on the small one-bedroom and the large one-bedroom units, respectively, and 1.1 percent increase on the two-bedroom units. Property Profile Report (page 4) Alta Shores Trend Report

2QTR 2006 Trend: Market 1BR / 1BA 2BR / 2.5BR / 2BA 2BA # Units 100 120 20 Vacancy Rate N/A N/A N/A Waiting List No No No Face Rent $715 - $770 $865 $895

Concession $42 $144 $149 Concessed Face Rent $673 - $728 $721 $746

Utility Adjustment $0 $0 $0 Adjusted Rent $673 - $728 $721 $746

Comments 2QTR 2006 Current Interview (03/29/2006): Alta Shores is a market rate garden style community offering one and two-bedroom units. Marketing began in December 2003, the first unit was delivered in March 2004 and the last unit was leased in December 2004. This represents an absorption rate of 24 units per month. The property is currently 86 percent occupied with the majority of the vacancies in the two-bedroom units. The two-bedroom units range in price depending on whether the unit has a porch or a sunroom. The two-bedroom unit with a porch is $865 and with a sunroom is $895 per month. The unit with the sunroom is listed in the rent table as a two bedroom unit with a den. The property is close to the military base and therefore has a significant amount of residents who are in some way affiliated with the military. Furthermore, this results in a relatively high turnover. The property is currently offering a concession of $500 off the one-bedroom units with a 13-month lease and two months free on a two-bedroom with a 13-month lease. The rents increased by $10 in August 2005. This represents an increase of 1.4 percent and 1.3 percent on the small one-bedroom and the large one-bedroom units, respectively, and 1.1 percent increase on the two-bedroom units. Property Profile Report Atlantic Palms Comp # 5 Effective Rent Date 5/4/2005 Created by Chris Kohler (May 09, 2005 08:29 PDT) Last updated by Michalena Skiadas (April 06, 2006 06:43 PDT)

Location 2510 Atlantic Palms Lane Charleston, SC 29406 Charleston County Distance 3 miles

Units 312 Vacant Units 0 Vacancy Rate 0.00%

Type Garden (3 stories) Year Built/Renovated 2001 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors Alta Shores Tenant Characteristics n/a

Contact Name Sara Phone 843.797.3336

Market Program Market Leasing Pace Immediate Annual Turnover Rate 48% Change in Rent (Past Increased 1-2% Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water not included

Water Heat not included -- electric Sewer not included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Atlantic Palms Comp # 5

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 1 1 Garden N/A 830 $700 $0 Market No 0 N/A (3 stories) 2 2 Garden N/A 1,070 $780 $0 Market Yes 0 N/A (3 stories) 2 2 Garden N/A 1,115 $855 $0 Market Yes 0 N/A (3 stories) 3 2 Garden N/A 1,270 $940 $0 Market Yes 0 N/A (3 stories)

Unit Mix: Market 1BR / 1BA 2BR / 2BA 3BR / 2BA

Face Rent $700 $780 - $940 $855 Concession $0 $0 $0 Concessed Face Rent $700 $780 - $940 $855 Utility Adjustment $0 $0 $0 Adjusted Rent $700 $780 - $940 $855 Property Profile Report (page 3) Atlantic Palms Comp # 5

Amenities In-Unit Balcony/Patio Security Patrol Dishwasher Garbage Disposal Microwave Oven Refrigerator Washer/Dryer hookup

Property Business Center Premium none Car Wash Exercise Facility Central Laundry Off-Street Parking On-Site Management Playground Swimming Pool

Services none Other none

Comments The Atlantic Palms is a market property with 312 total units. Management indicated the market is very strong, which is evident with the high occupancy rate and the presence of waiting lists. Management was unable to provide a unit breakdown and does not accept Section 8 vouchers. Property Profile Report (page 4) Atlantic Palms Trend Report

2QTR 2005 Trend: Market 1BR / 1BA 2BR / 3BR / 2BA 2BA # Units N/A N/A N/A Vacancy Rate N/A N/A N/A Waiting List No Yes Yes Face Rent $700 $780 - $940 $855 Concession $0 $0 $0 Concessed Face Rent $700 $780 - $940 $855 Utility Adjustment $0 $0 $0 Adjusted Rent $700 $780 - $940 $855

Comments 2QTR 2005 The Atlantic Palms is a market property with 312 total units. Management indicated the market is very strong, which is evident with the high occupancy rate and the presence of waiting lists. Management was unable to provide a unit breakdown and does not accept Section 8 vouchers. Property Profile Report Audubon Park Comp # 6 Effective Rent Date 3/27/2006 Created by Chris Kohler (May 09, 2005 08:16 PDT) Last updated by Michalena Skiadas (April 06, 2006 06:48 PDT)

Location 1700 Eagle Landing Hanahan, SC 29406 Berkeley County Distance 1.7 miles

Units 228 Vacant Units 27 Vacancy Rate 11.80%

Type Garden Year Built/Renovated 1991/2005 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors Atlantic Palms Tenant Characteristics Singles, Families, Seniors, lots of military

Contact Name Kathy Phone 843.569.0055

Market Program Market Leasing Pace One to two weeks. Annual Turnover Rate 32% Change in Rent (Past Increased by 7.5% on average Year) Units/Month Absorbed n/a Concession 12-month lease 1st month rent free and more.

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water not included

Water Heat not included -- electric Sewer not included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Audubon Park Comp # 6

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 1 1 Garden N/A 690 $635 $53 Market No N/A N/A 1 1 Garden N/A 800 $799 $67 Market No N/A N/A 2 2 Garden N/A 960 $849 $71 Market No N/A N/A 2 2 Garden N/A 1,060 $909 $76 Market No N/A N/A 2 2 Garden N/A 1,070 $910 $76 Market No N/A N/A 3 2 Garden N/A 1,220 $1,045 $87 Market No N/A N/A

Unit Mix: Market 1BR / 1BA 2BR / 2BA 3BR / 2BA

Face Rent $635 - $799 $849 - $1,045 $910 Concession $53 - $67 $71 - $76 $87 Concessed Face Rent $582 - $732 $778 - $958 $834 Utility Adjustment $0 $0 $0 Adjusted Rent $582 - $732 $778 - $958 $834 Property Profile Report (page 3) Audubon Park Comp # 6

Amenities In-Unit Balcony/Patio Security none Carpeting Central A/C Dishwasher Garbage Disposal Microwave Oven Refrigerator Washer/Dryer hookup

Property Basketball Court Premium none Car Wash Exercise Facility Jacuzzi Central Laundry Off-Street Parking On-Site Management Picnic Area Playground Sport Court Swimming Pool Volleyball Court

Services none Other none

Comments Current Interview (03/27/2006): This property is currently 88 percent occupied with a few units of each floorplan vacant. Generally the property is stable in the 90 percentile however lately there have been more military transfers than usual and people vacating to purchase a new home. The rental rates range based on the amenities in the unit. The higher rental rates include a fireplace, washer and dryer, screen porch, and/or are on the third floor. The rents range as follows: The small one-bedroom from $627 to $642; the large one-bedroom from $784 to $814; the smallest two-bedroom from $834 to $864; the middle two-bedroom from $894 to $924; the largest two-bedroom from $902 to $917; and the three-bedroom from $1,037 to $1,052. The averages are reported in the rent table. The averages represent the following rental increases: 8.2, 9.2, 7.2, 7.3, 6.8, and 6.4 percent increases for the small one-bedroom, large one-bedroom, smallest two-bedroom, middle two-bedroom, largest two-bedroom, and three-bedroom units, respectively, representing an average rental rate increase of 7.5 percent.

The property is currently offering the following concessions: waiving the $40 application fee, waiving the $200 one time amenity fee, for a six- to 11-month lease ? month free on the first full month, and for a 12-month lease the first full months rent free. These concessions just began several weeks ago and will continue until the property is able to increase its occupancy. The concession amounts listed in the table represent concessions for the 12-month lease.

The property began major renovations in mid-2005 which has included and/or will include both interior and exterior renovations. Exterior renovations include re-roofing, pressure washing, painting, and vinyl and wood repair. These renovations were completed in June 2005. The interior renovations began in February 2005 and are currently underway. As a resident vacates the unit is taken off the market for renovations. The renovations are scheduled to be complete in approximately six months. The only units that are not being renovated are the smallest one-bedroom units. Interior renovations include new appliances, new countertops, re-facing of cabinets, new ceiling fans and light fixtures, and new hardware in the bathrooms.

Management reported that there is a significant amount of new residential development. The condo conversion has hit the Charleston and Mount Pleasant area and therefore renters have been forced to move further north to find affordable housing. Furthermore, there is a new company related to the airline industry relocating to the industrial plant near the airport, perhaps Boeing.

Original Interview (05/04/2005): Audubon Park is a market rate property with 228 total units. The illustrated rents are the base rents offered by the property. These rents vary depending on location and additional amenities such as vaulted ceilings and washer/dryer connections. The property is renovating some units. As a result the occupancy is lower than usual. According to management, the occupancy is generally 97 to 98 percent depending on the season. The property does not accept Section 8 vouchers. In addition to the listed community amenities, the property also offers free tanning beds. Property Profile Report (page 4) Audubon Park Trend Report

2QTR 2005 1QTR 2006 Trend: Market 1BR / 1BA 2BR / 3BR / 2BA 1BR / 2BR / 2BA 3BR / 2BA 2BA 1BA # Units N/A N/A N/A N/A N/A N/A Vacancy Rate N/A N/A N/A N/A N/A N/A Waiting List No No No No No No Face Rent $587 - $732 $792 - $982 $635 - $849 - $910 $1,045 $852 $799 Concession $0 $0 $0 $53 - $67 $71 - $76 $87

Concessed Face Rent $587 - $732 $792 - $982 $582 - $778 - $834 $958 $852 $732 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $587 - $732 $792 - $982 $582 - $778 - $834 $958 $852 $732

Comments 2QTR 2005 Audubon Park is a market rate property with 228 total units. The illustrated rents are the base rents offered by the property. These rents vary depending on location and additional amenities such as vaulted ceilings and washer/dryer connections. The property is renovating some units. As a result the occupancy is lower than usual. According to management, the occupancy is generally 97 to 98 percent depending on the season. The property does not accept Section 8 vouchers. In addition to the listed community amenities, the property also offers free tanning beds. 1QTR 2006 Current Interview (03/27/2006): This property is currently 88 percent occupied with a few units of each floorplan vacant. Generally the property is stable in the 90 percentile however lately there have been more military transfers than usual and people vacating to purchase a new home. The rental rates range based on the amenities in the unit. The higher rental rates include a fireplace, washer and dryer, screen porch, and/or are on the third floor. The rents range as follows: The small one-bedroom from $627 to $642; the large one-bedroom from $784 to $814; the smallest two-bedroom from $834 to $864; the middle two-bedroom from $894 to $924; the largest two-bedroom from $902 to $917; and the three-bedroom from $1,037 to $1,052. The averages are reported in the rent table. The averages represent the following rental increases: 8.2, 9.2, 7.2, 7.3, 6.8, and 6.4 percent increases for the small one-bedroom, large one-bedroom, smallest two-bedroom, middle two-bedroom, largest two-bedroom, and three-bedroom units, respectively, representing an average rental rate increase of 7.5 percent.

Location 120 South Cranford Road Goose Creek, SC 29445 Berkeley County

Distance 0.3 miles

Units 228 Vacant Units 5 Vacancy Rate 2.20%

Type Various Year Built/Renovated 1988 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors n/a Tenant Characteristics 70% from Goose Creek and North Charleston; 30% from out of state

Contact Name Tiffany Phone 843.797.6489

Market Program Market Leasing Pace Pre-leased to one week. Annual Turnover Rate 21% Change in Rent (Past Townhouse +10.8%; garden +11.8% Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Pine Lakes Comp # 7

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 1.5 Townhouse 34 1,127 $665 $0 Market No 5 14.70% 2 2 Garden 194 992 $615 $0 Market No 0 0.00%

Unit Mix: Market 2BR / 1.5BA 2BR / 2BA

Face Rent $665 $615 Concession $0 $0 Concessed Face Rent $665 $615 Utility Adjustment ($54) ($54) Adjusted Rent $611 $561 Property Profile Report (page 3) Pine Lakes Comp # 7

Amenities In-Unit Dishwasher Security none Oven Refrigerator Washer/Dryer hookup

Property Basketball Court Premium none Exercise Facility Off-Street Parking On-Site Management Playground Sauna Swimming Pool Tennis Court Volleyball Court

Services none Other none

Comments Current Interview (03/27/2006): This property is currently 98 percent occupied with all vacant units in the two-bedroom, two-bath floorplan. This represents an increase in occupancy since the previously recorded occupancy rate of 95.6 percent. Management reported that there is a tax credit multifamily property currently under construction in the area. Approximately 70 percent of residents come from Goose Creek and North Charleston. The remaining 30 percent of the tenants have relocated from other states. The property was constructed in 1988 and there have been no major renovations, however management is in the process of developing plans for renovations in the near future. The rental rates have increased by 10.8 percent and 11.8 percent for the two-bedroom townhouse and the two-bedroom garden style units, respectively.

Original Interview (05/03/2005): Pine Lakes is a market rate property with 228 total units. The two-bedroom garden style units at the property are fully occupied which indicates a high demand for these in the market. Managment could not provide a reasoning for the lack of demand for the two-bedroom townhomes. The property offers balcony/patios with some of the units. Property Profile Report (page 4) Pine Lakes Trend Report

2QTR 2005 1QTR 2006 Trend: Market 2BR / 2BR / 2BR / 1.5BA 2BR / 1.5BA 2BA 2BA # Units 34 194 34 194 Vacancy Rate 29.40% 0.00% 14.70% 0.00% Waiting List No No No No Face Rent $600 $550 $665 $615 Concession $0 $0 $0 $0 Concessed Face Rent $600 $550 $665 $615 Utility Adjustment $0 $0 $0 $0 Adjusted Rent $600 $550 $665 $615

Comments 2QTR 2005 Pine Lakes is a market rate property with 228 total units. The two-bedroom garden style units at the property are fully occupied which indicates a high demand for these in the market. Managment could not provide a reasoning for the lack of demand for the two-bedroom townhomes. The property offers balcony/patios with some of the units. 1QTR 2006 Current Interview (03/27/2006): This property is currently 98 percent occupied with all vacant units in the two-bedroom, two-bath floorplan. This represents an increase in occupancy since the previously recorded occupancy rate of 95.6 percent. Management reported that there is a tax credit multifamily property currently under construction in the area. Approximately 70 percent of residents come from Goose Creek and North Charleston. The remaining 30 percent of the tenants have relocated from other states. The property was constructed in 1988 and there have been no major renovations, however management is in the process of developing plans for renovations in the near future. The rental rates have increased by 10.8 percent and 11.8 percent for the two-bedroom townhouse and the two-bedroom garden style units, respectively.

Location 5500 Harbour Lake Drive Goose Creek, SC Berkeley County Distance 0.2 miles

Units 416 Vacant Units 1 Vacancy Rate 0.20%

Type Various Year Built/Renovated 1976 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors Rosewood, Pine Lakes Tenant Characteristics Mix of local and out of state; Lots of military

Contact Name Sharon Phone 843-824-9600

Market Program Market Leasing Pace Pre-leased. Annual Turnover Rate 36% Change in Rent (Past Constantly changing with demand and occupancy Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Pinebrook Pointe / Pine Harbour Comp # 8

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 1 1 Garden N/A 536 $465 $0 Market No 0 N/A 1 1 Garden N/A 623 $475 $0 Market No 0 N/A 2 1.5 Townhouse N/A 1,062 $650 $0 Market No 1 N/A 2 2 Garden N/A 885 $540 $0 Market No 0 N/A 3 2 Garden N/A 1,050 $640 $0 Market No 0 N/A

Unit Mix: Market 1BR / 1BA 2BR / 2BR / 2BA 3BR / 2BA 1.5BA Face Rent $465 - $475 $650 $540 $640 Concession $0 $0 $0 $0 Concessed Face Rent $465 - $475 $650 $540 $640 Utility Adjustment ($54) ($54) ($54) ($54) Adjusted Rent $411 - $421 $596 $486 $586 Property Profile Report (page 3) Pinebrook Pointe / Pine Harbour Comp # 8

Amenities In-Unit Blinds Security Patrol Carpeting Perimeter Fencing Central A/C Video Surveillance Coat Closet Dishwasher Garbage Disposal Oven Refrigerator Walk-In Closet Washer/Dryer hookup

Property Basketball Court Premium none Clubhouse Central Laundry Off-Street Parking On-Site Management Picnic Area Playground Swimming Pool Tennis Court Volleyball Court

Services none Other none

Comments Current Interview (03/29/2006): Pinebrook Pointe and Pine Harbor Apartments are two communities but are managed by the same company and considered one property by the management company. Therefore, the information in this comp. reflects the property as one rather than two separate communities. This comp. also includes Townhouses at Pine Harbor I which are considered a section of the Pine Harbor development. The Townhouses at Pine Harbor II are located at a separate site and considered its own distinct community and therefore is entered as a separate listing. Pinebrook Pointe/Pine Harbor is a market rate property offering one, two, and three-bedroom garden style units as well as two-bedroom townhouses. An exact breakdown by units was not available. There is only one vacant unit, a two-bedroom townhouse which represents a 0.24 percent vacancy rate. The two and three-bedroom garden style units have two rental rates based on whether or not the unit has washer/dryer connections. The two-bedroom garden units rent for $535 without connections and $545 with connections. The three-bedroom garden units rent for $635 without connections and $645 with connections. The rents listed in the table reflect the average of these two rental rates. The rents fluctuate based on occupancy and demand. The property has a significant amount of residents who are affiliated with the military.

Management reported that the company, Pine Harbor Investment Company, also has single family rental homes. There are a total of 19 single family rental homes and there are only two vacant homes. The homes are either three-bedroom, one bath for $700 a month or three-bedroom, one and a half bath for $800 a month. Property Profile Report (page 4) Pinebrook Pointe / Pine Harbour Trend Report

2QTR 2006 Trend: Market 1BR / 1BA 2BR / 2BR / 2BA 3BR / 1.5BA 2BA # Units N/A N/A N/A N/A Vacancy Rate N/A N/A N/A N/A Waiting List No No No No Face Rent $465 - $475 $650 $540 $640

Concession $0 $0 $0 $0 Concessed Face Rent $465 - $475 $650 $540 $640

Utility Adjustment $0 $0 $0 $0 Adjusted Rent $465 - $475 $650 $540 $640

Comments 2QTR 2006 Current Interview (03/29/2006): Pinebrook Pointe and Pine Harbor Apartments are two communities but are managed by the same company and considered one property by the management company. Therefore, the information in this comp. reflects the property as one rather than two separate communities. This comp. also includes Townhouses at Pine Harbor I which are considered a section of the Pine Harbor development. The Townhouses at Pine Harbor II are located at a separate site and considered its own distinct community and therefore is entered as a separate listing. Pinebrook Pointe/Pine Harbor is a market rate property offering one, two, and three-bedroom garden style units as well as two-bedroom townhouses. An exact breakdown by units was not available. There is only one vacant unit, a two-bedroom townhouse which represents a 0.24 percent vacancy rate. The two and three-bedroom garden style units have two rental rates based on whether or not the unit has washer/dryer connections. The two-bedroom garden units rent for $535 without connections and $545 with connections. The three-bedroom garden units rent for $635 without connections and $645 with connections. The rents listed in the table reflect the average of these two rental rates. The rents fluctuate based on occupancy and demand. The property has a significant amount of residents who are affiliated with the military.

Management reported that the company, Pine Harbor Investment Company, also has single family rental homes. There are a total of 19 single family rental homes and there are only two vacant homes. The homes are either three-bedroom, one bath for $700 a month or three-bedroom, one and a half bath for $800 a month. Property Profile Report Springhill Apartments Comp # 9 Effective Rent Date 3/27/2006 Created by Chris Kohler (May 09, 2005 07:53 PDT) Last updated by Michalena Skiadas (April 06, 2006 06:52 PDT)

Location 100 Swift Blvd Goose Creek, SC 29445 Berkeley County Distance 0.3 miles

Units 192 Vacant Units 0 Vacancy Rate 0.00%

Type Garden (2 stories) Year Built/Renovated 1974 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors n/a Tenant Characteristics Families, Singles, Seniors

Contact Name heather Phone 843.553.9068

Market Program Market Leasing Pace Pre-leased. Annual Turnover Rate 31% Change in Rent (Past None Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Springhill Apartments Comp # 9

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 1 1 Garden 32 880 $490 $0 Market No 0 0.00% (2 stories) 2 2 Garden 128 1,000 $530 $0 Market 2 HH 0 0.00% (2 stories) 3 2 Garden 32 1,150 $630 $0 Market 2 HH 0 0.00% (2 stories)

Unit Mix: Market 1BR / 1BA 2BR / 2BA 3BR / 2BA

Face Rent $490 $530 $630 Concession $0 $0 $0 Concessed Face Rent $490 $530 $630 Utility Adjustment ($54) ($54) ($54) Adjusted Rent $436 $476 $576 Property Profile Report (page 3) Springhill Apartments Comp # 9

Amenities In-Unit Balcony/Patio Security none Carpeting Central A/C Dishwasher Garbage Disposal Oven Refrigerator

Property Central Laundry Premium none Off-Street Parking On-Site Management Swimming Pool Tennis Court

Services none Other none

Comments Current Interview (03/31/2006): Springhill Apartments is a market rate community offering one, two, and three-bedroom units. The property is 100 percent occupied and has a waiting list. Management reported that in recent months the property has remained 100 percent occupied. This is an increase in occupancy since the previous interview in which the occupancy was approximately 98.4 percent. There is a large LIHTC multifamily property under construction about two miles away on Red Bank Road but more detailed information was unavailable.

Original Interview (05/04/2005): Springhill Apartments is a market rate property with 192 units. Management was unable to provide a unit mix or specific details regarding the market. However, based on the high occupancy rate and no concessions, the property appears to be doing well. Property Profile Report (page 4) Springhill Apartments Trend Report

2QTR 2005 2QTR 2006 Trend: Market 1BR / 1BA 2BR / 3BR / 2BA 1BR / 2BR / 2BA 3BR / 2BA 2BA 1BA # Units N/A N/A N/A 32 128 32 Vacancy Rate N/A N/A N/A 0.00% 0.00% 0.00% Waiting List No No No No 2 HH 2 HH Face Rent $490 $530 $630 $490 $530 $630 Concession $0 $0 $0 $0 $0 $0 Concessed Face Rent $490 $530 $630 $490 $530 $630 Utility Adjustment $0 $0 $0 $0 $0 $0 Adjusted Rent $490 $530 $630 $490 $530 $630

Comments 2QTR 2005 Springhill Apartments is a market rate property with 192 units. Management was unable to provide a unit mix or specific details regarding the market. However, based on the high occupancy rate and no concessions, the property appears to be doing well. 2QTR 2006 Current Interview (03/31/2006): Springhill Apartments is a market rate community offering one, two, and three-bedroom units. The property is 100 percent occupied and has a waiting list. Management reported that in recent months the property has remained 100 percent occupied. This is an increase in occupancy since the previous interview in which the occupancy was approximately 98.4 percent. There is a large LIHTC multifamily property under construction about two miles away on Red Bank Road but more detailed information was unavailable.

Location 5055 Harbour Lake Drive Goose Creek, SC Berkeley County Distance 0.3 miles

Units 120 Vacant Units 0 Vacancy Rate 0.00%

Type Garden Year Built/Renovated 1984 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors Springhill, Rosewood, Pine Harbor, Pine Lakes Tenant Characteristics Lots of military and out of state; equal amount of residents from local area

Contact Name Lynn Phone 843-797-6737

Market Program Market Leasing Pace Pre-leased. Annual Turnover Rate 10% Change in Rent (Past 3.5 percent increase a couple months ago Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 1%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Summercreek Apartments Comp # 10

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 1 Garden 120 877 $535 $0 Market yes 0 0.00%

Unit Mix: Market 2BR / 1BA Face Rent $535 Concession $0 Concessed Face Rent $535 Utility Adjustment ($54) Adjusted Rent $481 Property Profile Report (page 3) Summercreek Apartments Comp # 10

Amenities In-Unit Blinds Security Patrol Carpeting Perimeter Fencing Central A/C Coat Closet Dishwasher Ceiling Fan Oven Refrigerator Washer/Dryer hookup

Property Car Wash Premium none Exercise Facility Central Laundry Off-Street Parking On-Site Management Picnic Area Playground Sauna Swimming Pool Tennis Court

Services none Other none

Comments Current Interview (03/29/2006): Summercreek Apartments is a market rate property offering two-bedroom garden style units. The property is currently 100 percent occupied which has been normal for the past six months. The property does maintain a waiting list but will not put more than 4 households per month on the list with the goal of keeping the list down. Because the Nuclear Training School is just down the street from the property, there is a significant amount of military and out of state residents. The rent increased by $30 a couple of months ago representing an increase of 3.5 percent. The property is currently undergoing exterior renovations, including a new roof and new windows. Currently there are no plans for interior renovations. Property Profile Report (page 4) Summercreek Apartments Trend Report

2QTR 2006

Trend: Market 2BR / 1BA # Units 120 Vacancy Rate 0.00% Waiting List yes Face Rent $535 Concession $0 Concessed Face Rent $535 Utility Adjustment $0 Adjusted Rent $535

Comments 2QTR 2006 Current Interview (03/29/2006): Summercreek Apartments is a market rate property offering two-bedroom garden style units. The property is currently 100 percent occupied which has been normal for the past six months. The property does maintain a waiting list but will not put more than 4 households per month on the list with the goal of keeping the list down. Because the Nuclear Training School is just down the street from the property, there is a significant amount of military and out of state residents. The rent increased by $30 a couple of months ago representing an increase of 3.5 percent. The property is currently undergoing exterior renovations, including a new roof and new windows. Currently there are no plans for interior renovations. Property Profile Report Townhouses At Pine Harbor II Comp # 11 Effective Rent Date 3/29/2006 Created by Julia Buckmaster (April 01, 2006 12:46 PST) Last updated by Michalena Skiadas (April 06, 2006 06:55 PDT)

Location 4000 Harbour Lake Drive Goose Creek, SC Berkeley County Distance 0 miles

Units 187 Vacant Units 4 Vacancy Rate 2.10%

Type Townhouse Year Built/Renovated 1982 Marketing Began n/a Leasing Began n/a Last Unit Leased n/a

Major Competitors n/a Tenant Characteristics Mostly from the local area, about 25% are corporate or out of town residents

Contact Name Sadi Phone 843-572-2522

Market Program Market Leasing Pace Two weeks Annual Turnover Rate 26% Change in Rent (Past None Year) Units/Month Absorbed n/a Concession None

Section 8 Tenants 0%

Utilities A/C not included -- central Other Electric not included Cooking not included -- electric Water included

Water Heat not included -- electric Sewer included

Heat not included -- electric Trash Collection included Property Profile Report (page 2) Townhouses At Pine Harbor II Comp # 11

Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting List Vacant Vacancy Rate (monthly) 2 1.5 Townhouse 187 953 $615 $0 Market No 4 2.10%

Unit Mix: Market 2BR / 1.5BA Face Rent $615 Concession $0 Concessed Face Rent $615 Utility Adjustment ($54) Adjusted Rent $561 Property Profile Report (page 3) Townhouses At Pine Harbor II Comp # 11

Amenities In-Unit Balcony/Patio Security Patrol Blinds Video Surveillance Carpeting Central A/C Coat Closet Dishwasher Ceiling Fan Garbage Disposal Microwave Oven Refrigerator Walk-In Closet Washer/Dryer hookup

Property Basketball Court Premium none Car Wash Clubhouse Off-Street Parking On-Site Management Playground Swimming Pool Tennis Court Volleyball Court

Services none Other none

Comments Current Interview (03/29/2006): Townhouses at Pine Harbor II is a market rate community offering two-bedroom townhouses. The property is managed by Pine Harbor Investment Company which also manages Pinebrook Pointe/Pine Harbor and Townhouses at Pine Harbor I, all three of which are located next door to one another. The property is currently 98 percent occupied. Management reported that there is one major residential development under construction on Red Bank Road which she believes is going to be for low to moderate income level residents.

2QTR 2006

Trend: Market 2BR / 1.5BA # Units 187 Vacancy Rate 2.10% Waiting List No Face Rent $615 Concession $0 Concessed Face Rent $615 Utility Adjustment $0 Adjusted Rent $615

Comments 2QTR 2006 Current Interview (03/29/2006): Townhouses at Pine Harbor II is a market rate community offering two-bedroom townhouses. The property is managed by Pine Harbor Investment Company which also manages Pinebrook Pointe/Pine Harbor and Townhouses at Pine Harbor I, all three of which are located next door to one another. The property is currently 98 percent occupied. Management reported that there is one major residential development under construction on Red Bank Road which she believes is going to be for low to moderate income level residents.

Addendum C: Matrices

Summary Matrix

4000 Harbour Lake Drive 1982 Goose Creek, SC Berkeley County 187 100% 4 2.10% Unit Matrix Report

Unit Types @50% Bath/Bedroom 2BR / 2BA -- 2BR / 2BA 2BR / 2BA ------Base Rent/Month $400 -- $555 $556 ------Unit GLA (SF) 1,082 -- 1,082 933 ------Adjusted Utility Base Rent $400 -- $501 $502 ------

@60% Bath/Bedroom 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA ------Base Rent/Month $500 $491 $681 $682 ------Unit GLA (SF) 1,082 959 1,082 933 ------Adjusted Utility Base Rent $500 $491 $627 $628 ------

Unit Information Total Units 24 32 32 36 120 N/A N/A 194 N/A 128 120 187 Vacant N/A 00 0N/A 0N/A 00 0 0 4 Vacancy Rate N/A 0.00% 0.00% 0.00% N/A N/A N/A 0.00% N/A 0.00% 0.00% 2.10%

Services Adult Education yes no no no no no no no no no no no

Premium Amenities

Other Amenities Other n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Unit Matrix Report

Unit Information Total Units 24 32 32 72 N/A N/A N/A 32 Vacant N/A 0 0 7 0 N/A 0 0 Vacancy Rate N/A 0.00% 0.00% 9.70% N/A N/A N/A 0.00%

Services Adult Education yes no no no no no no no

Security In-Unit Alarm no no no no no no no no Patrol no no no no yes no yes no Perimeter Fencing no no no no no no yes no Video Surveillance no no no no no no yes no

Premium Amenities

Other Amenities Other n/a n/a n/a n/a n/a n/a n/a n/a

Addendum D: Maps

Regional Map

0 mi 10 20 30 40 50 Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ © 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by TeleAtlas North America, Inc. All rights reserved. Neighborhood Map

0 mi 0.2 0.4 0.6 Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ © 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by TeleAtlas North America, Inc. All rights reserved. Goose Creek PMA

0 mi 2 4 6 8 10 12 Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ © 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by TeleAtlas North America, Inc. All rights reserved. comps

0 mi 2 4 6 Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ © 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by TeleAtlas North America, Inc. All rights reserved. Locational Amenities Map

0 mi 1 2 3 Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ © 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by TeleAtlas North America, Inc. All rights reserved.

Addendum E: PMA Acceptance from Authority

Michalena Skiadas - FW: Collins Park Page 1

From: To: Date: 3/28/2006 9:43:02 PM Subject: FW: Collins Park

Isn't this one yours? If yes, you have the go ahead for this project.

-----Original Message----- From: chris [mailto:[email protected]] Sent: Tue 3/28/2006 2:18 PM To: Johnson, Leanne 6-9194 Cc: Subject: Re: Collins Park

We concur with the market analyst.

Thanks, Chris

Sent from my Verizon Wireless BlackBerry

-----Original Message----- From: Date: Fri, 24 Mar 2006 16:38:16 To: Subject: Collins Park

Per the QAP, please submit your response to the attached by the end of Wednesday, March 29, 2006.

Thank you,

Leanne Johnson

803-896-9194

Leanne Johnson

Public Information Coordinator

SCSHFDA

803.896.9194

803.551.4903 Fax

[email protected]

www.schousing.com Michalena Skiadas - FW: Collins Park Page 2

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