THE NATIONAL ECONOMY DISRUPTIVE AND THE U.S. ECONOMY U.S. Annual GDP Growth and Deaths 1910 - 2020

20% Polio (1916) 7,000 deaths Polio (1946-52) London Flu (1972-73) 7,710 deaths 1,072 deaths 15% Swine SARS (2002-03) Flu Asian Flu (1957-58) 0 deaths (2009-10) 10% 116,000 deaths 7,000 deaths (1968-69) 100,000 deaths 5%

0%

Ebola (2014-15) -5% 2 deaths

COVID-19 (2020-) -10% 220,000+ deaths (1918-19) 675,000 deaths -15% 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020*

*estimated Source: Bureau of Economic Analysis, CDC, University of Groningen, Delta Associates; October 2020. QUARTERLY GDP PERCENT CHANGE

10% 20-Year Average = 2.0%

5%

0%

-5%

-10%

-15% Q2 2020 = -31.4%

-20%

-25%

-30%

-35% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: Seasonally adjusted at annual rates; change in chained 2012 dollars. Source: Bureau of Economic Analysis, Delta Associates; October 2020. INITIAL UNEMPLOYMENT CLAIMS United States | Four-Week Moving Average in Millions

Great Expansion Period COVID-19 Recession 6.0 Recession Peak (Week of 03/28/20) = 5,790,250 5.5

Millions 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Peak (Week of 3/28/09) = 659,250 (Week of 10/10/20) = 866,250 0.5 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: Data are seasonally adjusted. Source: Federal Reserve Bank of St. Louis, Delta Associates; October 2020. PAYROLL JOB GROWTH United States | Monthly in Thousands

Great Expansion Period COVID-19 Recession Recession 2,600

2,200

1,800

1,400 Monthly Avg. September 2020 1,000 = 168,000 = 661,000 600

200

-200 Mar. 2020 -600 = -701,000 Apr 2020 -1,000 Monthly Avg. = -20,537,000 = -383,000 -1,400 08 09 10 11 12 13 14 15 16 17 18 19 20

Note: Data is seasonally adjusted. Source: Bureau of Labor Statistics, Delta Associates; October 2020. THE WASHINGTON ECONOMY PAYROLL JOB GROWTH Selected Large Metro Areas | 12 Months Ending August 2020

0

-200 -201.4

-400

-600

-800 (THOUSANDS)

-1,000 NET CHANGE IN EMPLOYMENT -1,200

-1,400 Denver Phx Atl DFW Hou Was South FL Bos Chi SF Bay LA Basin NY

Source: Bureau of Labor Statistics, Delta Associates; October 2020. UNEMPLOYMENT RATE Selected Large Metro Areas | August 2019 vs. August 2020

National 16% Rate August 2019 August 2020 14%

12%

10% 8.5% 8%

6%

4% 3.8%

2%

0% Phx Atl DFW Was Den Hou S Fla SF Bay Bos Chi NY LA Basis Point +170 +280 +280 +370 +440 +390 +550 +620 +820 +790 +910 +1,070 Change

Source: Bureau of Labor Statistics, Delta Associates; October 2020. PAYROLL JOB GROWTH Washington Metro Area

140 120 20-Year Annual Average = 37,600/Year 3-Year Projected Avg 100 = 12,000/Year 80 60 40 20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -20 -40 -60

(ANNUAL AVERAGE) (ANNUAL -80 -100 -120 -140 THOUSANDS OF NEW PAYROLL JOBS THOUSANDSNEW OF PAYROLL -160 District Sub. MD No. Virginia

Source: Bureau of Labor Statistics, George Mason University Center for Regional Analysis, Delta Associates; October 2020. PAYROLL JOB GROWTH Washington Metro Area | 12 Months Ending August 2020

Federal Government 12,500 Wholesale Trade Construction/Mining Manufacturing Information Financial Activities

Other Services -213,900 Transportation/Utilities State and Local Government Retail Trade Professional/Business Services Education/Health Leisure/Hospitality

-120,000 -100,000 -80,000 -60,000 -40,000 -20,000 0 20,000 JOB CHANGE

Source: Bureau of Labor Statistics, Delta Associates; October 2020. COVID-19 RELATIVE ECONOMIC IMPACT BY SECTOR Washington Metro Area

Leisure/Hospitality Education/Health Services Retail Trade High Transportation/Utilities

Manufacturing

Other Services Construction/Mining Medium State/Local Govt. Wholesale Trade Information Professional/Business Services

SEVERITY Low Federal Govt. Financial Activities

Short Medium Long

DURATION

Note: Primary demand sources for Class A multifamily units, office, and for-sale housing highlighted in orange. Source: Delta Associates; October 2020. COVID-19 RELATIVE ECONOMIC IMPACT BY SECTOR Washington Metro Area

Leisure/Hospitality Education/Health Services Retail Trade High Transportation/Utilities

Manufacturing

Other Services Construction/Mining Medium State/Local Govt. Wholesale Trade Information Professional/Business Services

SEVERITY Low Federal Govt. Financial Activities

Short Medium Long

DURATION

Note: Primary demand sources for multifamily units highlighted in blue. Source: Delta Associates; October 2020. MARKET RESILIENCE INDEX 30 Largest Metropolitan Statistical Areas

VERY HIGH HIGH MEDIUM LOW

100 90 80 Avg. = 50.0 70 60 50 40 30 20 10

0 Austin Washington San Antonio Boston Houston Pittsburgh Dallas/Fort Worth Minneapolis San Diego St. Louis Denver Seattle Cincinatti Orlando Phoenix New York Chicago Miami/Ft. Laud. San Francisco Charlotte Atlanta Philadelphia Portland Los Angeles Tampa Sacramento Las Vegas Detroit Inland Empire

Source: Delta Associates; October 2020. THE WASHINGTON METRO AREA APARTMENT MARKET LARGET APARTMENT MARKETS Selected Metro Areas | 2018

3,000

2,500

2,000

1,500

1,000

561 UNITS (THOUSANDS) UNITS 500

0 NY LA Basin Chi SF Bay DFW Hou Wash So FL Bos Atl

Source: U.S. Census Bureau, Delta Associates; October 2020. ANNUAL CLASS A APARTMENT ABSORPTION AND DELIVERIES Washington Metro Area

Expansion Period 16,000 Average = 8,001 Expansion Period 14,000 Average = 9,054 12,000

10,000

8,000

6,000

4,000

2,000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Absorption Deliveries Average Absorption Average Deliveries

Note: Shaded bars represent recession periods. Source: Delta Associates; October 2020. CLASS A APARTMENT ABSORPTION Top 10 Submarkets in Washington Metro Area | 12 Mo. Ending September 2020

1,200

1,000

800

600 UNITS 400

200

0

Source: Delta Associates; October 2020. ABSORPTION PACE Class A Projects in Initial Lease-Up | Washington Metro Area

20 85 Absorption Pace Number of Projects 18 75 16

14 65

12 55 10 45 8

6 35

4 IN ACTIVE LEASE UP NUMBER OF PROJECTS 25 2 UNITS PER PROJECT PER MONTH 0 15 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/20

Source: Delta Associates; October 2020. STABILIZED APARTMENT VACANCY RATES Major Apartment Markets | Third Quarter 2020

National Vacancy Rate = 4.9% 6%

5% 4.5%

4%

3%

2%

1% VACANCY RATE CLASSES)(ALL RATE VACANCY

0% LA Phi NY Wash Phx Balt Atl Chi DFW Hou

Source: Axiometrics, Delta Associates; October 2020. ANNUAL EFFECTIVE RENT GROWTH Class A Apartments | Washington Metro Area | 2007 - 2020

10% Long-Term Average Rent 8% Growth = 3.5%

6%

4%

2%

0%

-2%

-4%

-6%

-8% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

Source: Delta Associates; October 2020. *12 months ending September 2020. PROJECTS CURRENTLY UNDER CONSTRUCTION District of Columbia

In Lease-up Not Yet Leasing

Source: Delta Associates; October 2020. 36-MONTH APARTMENT DEVELOPMENT PIPELINE* Washington Metro Area | 2007 - 2020

45,000

40,000

35,000

30,000

25,000 RATE UNITS RATE

- 20,000

15,000

10,000 MARKET

5,000

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020**

Source: Delta Associates; October 2020. *Market-Rate Units Planned and Under Construction After Attrition. **As of Third Quarter. PROJECTED DELIVERIES Washington Metro Area | 2020 - 2022

6,000 District Sub MD No VA

5,000

Projected Class A Quarterly 4,000 Absorption = 2,229

3,000 RATE UNITS RATE -

CLASS A 2,000

1,000 MARKET

0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2020 2021 2022

Source: Delta Associates; October 2020. 36-MONTH APARTMENT DEVELOPMENT PIPELINE* Top 10 Submarkets in Washington Metro Area | Third Quarter 2020

7,000

6,000

5,000

4,000 RATE UNITS RATE - 3,000 CLASS A

2,000 MARKET 1,000

0

Source: Delta Associates; October 2020. *Market-Rate Units Planned and Under Construction After Attrition. DEMAND AND SUPPLY PROJECTIONS Washington Metro Area Class A Apartments | 36 Mo. Ending September 2023

20 DEMAND 18 16 Net Absorption: 8,917/Year = 26,750 14 12 SUPPLY 10 Planned and may 8 deliver by 9/23: 2,681 units1

RATE UNITS (THOUSANDS) RATE 6 - 4 Under construction: 38,961 units2 2 MARKET 0 Total = 41,642 units No VA Sub MD The District 1 Probable supply after projected attrition. 2 Includes unleased units at projects in 3.9% 4.1% 5.5% lease-up.

Projected Stabilized Vacancy % at September 2023 4.4% Metro-Wide

Source: Delta Associates; October 2020. ANNUAL CLASS A APARTMENT EFFECTIVE RENT GROWTH Washington Metro Area | 2007 - 2023

10%

Long-Term Average = 3.5% 8%

6%

4%

2%

0%

-2%

-4%

-6% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023

Source: Delta Associates; October 2020. * Annual rent growth at Third Quarter 2020 is -7.0%. THE BALTIMORE METRO AREA APARTMENT MARKET CLASS A APARTMENT ABSORPTION Baltimore Metro Area | 2011 - 2023

4,000

3,500 Annual Average 10-Year Average = 2,241 ~ 1,808 3,000

2,500 2,332

RATE UNITS RATE 2,000 -

1,500

1,000 MARKET

500

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 - 2023

Source: Delta Associates; October 2020. *12 months ending September 2020. EFFECTIVE RENT AND VACANCY RATE Class A Apartments | Baltimore Metro Area | 2002 - 2020

6% Average Effective Base Rent $1,800

Stabilized Vacancy $1,700 5% $1,600

$1,500 4% $1,400

3% $1,300

$1,200 2% $1,100

$1,000

STABILIZED VACANCY RATE VACANCY STABILIZED 1% $900 AVERAGE EFFECTIVE BASE RENT BASE EFFECTIVE AVERAGE

0% $800

3.6% / YEAR LONG- TERM RENT GROWTH

Source: Delta Associates; October 2020. * As of Third Quarter. 36-MONTH APARTMENT DEVELOPMENT PIPELINE* Baltimore Metro Area | 2007 - 2020

10,000

9,000

8,000

7,000

6,000

5,000 RATE UNITS RATE - 4,000

3,000

MARKET 2,000

1,000

0

*Market-Rate Units Planned and Under Construction After Attrition. Source: Delta Associates; October 2020. **As of Third Quarter. DEMAND AND SUPPLY PROJECTIONS Baltimore Metro Area Class A Apartments | 36 Mo. Ending September 2023

4,000 DEMAND 3,500 Net Absorption: 3,000 1,808/Year = 5,425 2,500 SUPPLY 2,000 RATE UNITS RATE

- Planned and may 1,500 deliver by 9/23: 385 units1 1,000 MARKET Under construction: 500 6,525 units2

0 Total = 6,910 units So Sub No Sub Balt City 1 Probable supply after projected attrition. 3.2% 3.1% 6.0% 2 Includes unleased units at projects in lease-up. Projected Stabilized Vacancy % at September 2023 4.1% Metro-Wide

Source: Delta Associates; October 2020. ANNUAL CLASS A APARTMENT EFFECTIVE RENT GROWTH Baltimore Metro Area | 2007 - 2023

4%

3% Long-Term Average = 3.6%

2%

1%

0%

-1%

-2%

Source: Delta Associates; October 2020. * Annual rent growth at Third Quarter 2020 is -1.0%. THE WASHINGTON/BALTIMORE AREA CAPITAL MARKETS APARTMENT INVESTMENT SALES Selected Metro Areas | 2011 - 2020

LA DFW Chi Was Bal

$14

$12

$10

$8

$6 BILLIONS

$4

$2

$0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

Source: Real Capital Analytics, Delta Associates; October 2020. *Sales through September annualized. NCREIF RETURN INDEX FOR INVESTMENT-GRADE APARTMENTS Selected Metro Areas | 12 Months Ending June 2020

12%

10%

8% National Average = 4.2%

6%

4%

2%

0%

-2% Phx Aus Den Atl Bos Was DFW Hou Chi

Source: NCREIF, Delta Associates; October 2020. CLASS A HIGH-RISE APARTMENT CAP RATES Washington Metro Area | 2009 - 2019

7% 6.61%

6% 5.29% 5.06% 5.11% 4.94% 4.92% 4.88% 4.99% 4.96% 5% 4.75% 4.80%

4%

3%

2%

1%

0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Delta Associates Market Maker Survey; October 2020. YEARS OF SUPPLY Low-Rise Class A Submarkets | Washington Metro Area

2.1 – 4.0 Years 0 – 2.0 Years

Source: Delta Associates; October 2020. YEARS OF SUPPLY High-Rise Class A Submarkets | Washington Metro Area

2.1 – 4.0 Years 0 – 2.0 Years

Source: Delta Associates; October 2020. YEARS OF SUPPLY Class A Submarkets | Baltimore Metro Area

2.1 – 4.0 Years 0 – 2.0 Years

Source: Delta Associates; October 2020. THE WASHINGTON METRO AREA CONDOMINIUM MARKET LARGEST CONDOMINIUM MARKETS Selected Metro Areas | 2018

700

600

500

400

300

200

UNITS (THOUSANDS) UNITS 129 100

0 NY Chi South FL LA Basin Bos Was SF Bay Sea Tampa Bay Phila

Source: U.S. Census Bureau, Delta Associates; October 2020. PRIMARY MORTGAGE INTEREST RATES National Market Survey | 2010 – 2020*

5.5% 30 yr FRM 15 yr FRM 5/1 ARM 5.0%

4.5%

4.0%

3.5% INTERESTRATE 3.0%

2.5%

2.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

*As of October 2020 Source: Freddie Mac, Delta Associates; October 2020. CONDOMINIUM SALES ACTIVITY Washington Metro Area | 12 Mo. Ending Sept. 2020 Compared to Prior Year

Up more than 50% Up 1% - 49% Down more than 1%

Source: Delta Associates; October 2020. ANNUAL CONDOMINIUM RESALES Washington Metro Area | 2004 - 2020

Average From 2004 - 2007 = 17,612 22,000

20,000

18,000

16,000

14,000 UNITS

12,000

10,000

8,000

Source: MRIS, Delta Associates; October 2020. *12 months ending September 2020. ANNUAL CONDOMINIUM RESALES Washington Metro Area | 2004 - 2020

22,000

20,000 Average From 18,000 2008 - 2012 = 11,280

16,000

14,000 UNITS

12,000

10,000

8,000

Source: MRIS, Delta Associates; October 2020. *12 months ending September 2020. ANNUAL CONDOMINIUM RESALES Washington Metro Area | 2004 - 2020

22,000

Average Since 2013 = 20,000 15,438

18,000

16,000

14,000 UNITS

12,000

10,000

8,000

Source: MRIS, Delta Associates; October 2020. *12 months ending September 2020. EFFECTIVE NEW CONDOMINIUM SALES PRICE CHANGE Washington Metro Area | 2007 - 2021

10%

8%

6%

4.0% 4%

2%

0%

-2%

-4%

-6% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021

Source: Delta Associates; October 2020. *12 months ending September 2020. NEW CONDOMINIUM AVERAGE PRICE PER SF Washington Metro Area | Third Quarter 2020

$1,400 $1,319

$1,200

$1,056 $1,055

$1,000

$790 $800 $760 $698

$600 $519 $439 $400

$248 $200

$0 Upper NW DC Central DC Arl/Alex Cap East DC Ffx/FC Mideast DC Mont Pr. George's Lou/PrWm

Source: Delta Associates; October 2020. NEW CONDOMINIUM AVERAGE PRICE PER SF Selected Downtown Areas in the U.S. | Third Quarter 2020

$1,800 $1,642

$1,500 $1,319

$1,200 1,194 $1,067 $1,060 $1,055 $1,036

$900 $790 $698 $589 $600 $430

$300

$0

Source: Realtor.com, Douglas Elliman, Delta Associates; October 2020. *Third Quarter 2020 except for New York City Submarkets which are as of Second Quarter 2020. RESALE CONDOMINIUM SALES PRICE CHANGE Washington Metro Area | 2007 - 2020

15% 13.2%

10%

5%

0%

-5%

-10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

Source: MRIS, Delta Associates; October 2020. * 12 months ending August 2020. UNSOLD CONDO UNITS ACTIVELY MARKETING Washington Metro Area | 2007 - 2020

20,000

16,000

12,000 RATE UNITS RATE - 8,000

MARKET 4,000 2,734

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Delta Associates; October 2020. Note: Number of units are for September of each year. MONTHS OF NEW CONDOMINIUM SUPPLY Washington Metro Area | 2007 - 2021

60

50

40

30

20 16

10

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021

Source: Delta Associates; October 2020. *as of Third Quarter 2020. MONTHS OF NEW CONDOMINIUM SUPPLY BY MARKET Washington Metro Area | Third Quarter 2020

Source: Delta Associates; October 2020. DEMAND AND SUPPLY PROJECTIONS Washington Metro Area Condominiums | 36 Months Ending September 2023

DEMAND 2,000 Net Sales: 1,750/Year = 5,250 units 1,600 SUPPLY

1,200 Planned and May

RATE UNITS RATE Begin Marketing by 1 - 9/23: 601 units 800 Under Construction and/or Marketing: 2 400 2,734 units MARKET Total = 3,335 units 0 1 Probable supply after projected The District No VA Sub MD attrition. 2 Includes unlsold units at projects selling.

Source: Delta Associates; October 2020.