Integra Realty Resources Kansas City Consulting Assignment City Of

Integra Realty Resources Kansas City

Consulting Assignment

City of Lenexa Housing Study Housing Demand Study Lenexa, Johnson County, Kansas

Prepared For: City of Lenexa

Effective Date of the Appraisal: December 15, 2016

IRR ‐ Kansas City File Number: 119‐2016‐0189 Integra Realty Resources 1901 West 47th Place T 913.748.4700 Kansas City Suite 300 F 913.236.4307 Westwood, KS 66205‐1834 www.irr.com

December 15, 2016

Beccy Yocham Director of Community Development City of Lenexa 12350 W. 87th Street Parkway Lenexa, KS 66215

SUBJECT: Consulting Assignment City of Lenexa Housing Study Lenexa, Johnson County, Kansas IRR ‐ Kansas City File No. 119‐2016‐0189

Dear Ms. Yocham:

Integra Realty Resources – Kansas City is pleased to submit the accompanying analysis of the referenced subject matter. The purpose of the consulting assignment is to provide a detailed analysis of Lenexa’s multifamily and single family housing and to forecast demand and trends for at least the next market cycle. The client for the assignment is City of Lenexa, and the intended use is for planning purposes. The effective date of this consulting assignment is December 15, 2016.

This report is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. Supporting documentation concerning the data, reasoning, and analyses is retained in our file. The depth of discussion contained in this report is specific to the needs of the client and the intended use of the analysis as noted herein.

The study area is Lenexa, Kansas, a city located in central Johnson County, Kansas and more particularly the demand, supply, and the character of future multifamily and single family development in Lenexa. Beccy Yocham City of Lenexa December 15, 2016 Page 2

Conclusions ‐ Multifamily The 2016 population of Lenexa is 52,374, according to The Nielsen Company. The population is expected to grow 1.07% annually, with the 2021 (5‐year) population estimated to be 55,164 and the 2030 population estimated to be 60,186. Similarly, Lenexa has 21,013 households as of 2016. The number of households is expected to by 1.12% annually, with 22,188 households estimated for 2021 and 24,303 households estimated for 2030.

The renter‐occupied households in Lenexa are 36.88% of the total households and the owner occupied households are 63.12%. By 2030, we project that the renter‐occupied households will increase to 39.1%.

Our forecast for demand of new units is ‐77 after all projects now under construction or planned with approval are completed. However, the dynamics of a three submarkets in the Kansas City MSA demonstrate in Table 9 that in growing markets with the appropriate amenities, there is prospective growth over and above what a simple projection of demographics identifies. We anticipate that the City of Lenexa will see additional external demand of 25% resulting is a slightly positive demand over the next five years. From 2021 – 2030, we anticipate additional demand for some 2,281units and factoring an additional 25%.

Residents surveyed by the National Multifamily Housing Council and Kingsley Associates indicated that the neighborhood features of greatest important are proximity to local businesses, walkability of the area, and restaurants. The community amenities most important to these residents are parking, swimming pool, fitness center, secured community access, and recycling. Home amenities most important are high‐speed internet, walk‐in closets, soundproof walls, patio/balcony, and washer/dryer in unit.

60% of millennials surveyed by ULI indicated that they will likely move into a detached, single‐family home in the next five years. The redistribution of millennials will also provide an opportunity for the rise of newer suburbs. These newer suburbs will emphasize a transit‐ oriented development that offers the work‐live‐play that has become standard for many urban environments.

Beccy Yocham City of Lenexa December 15, 2016 Page 3

Conclusions ‐ Single Family The median home price has increased an average of 2.63% per year since 2008. Presently the average price is $266,400 and it is projected to be nearly $310,000 by 2021. Presuming a more sustainable average annual percentage change of 1.5%, the price in 2030 should between $350,000 and $360,000. It wouldt no be inconceivable to see a new home sell in the $1,800,000 range within the next five years and certainly over $2,000,000 in the ten years after that.

We anticipate 157 new homes per year for the next five years and 118 homes per year for the ten years after that. Development will become more expenses in the coming years as infrastructure must be added and land prices inflate.

It is difficult to tell what amenities and features residents will be requiring over the next several years. Three car garages will be almost a necessity so long as gas and oil are cheap. The expectations of homebuyers in certain brackets warrant significant investment in audio, visual, and data capability which we expect to continue. Green development practices are more and more appreciated and expected and that will not change any time soon.

If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service.

Respectfully submitted,

Integra Realty Resources ‐ Kansas City

Kenneth Jaggers, MAI, FRICS Melissa Lem Senior Managing Director Analyst Certified General Real Estate Appraiser Telephone: 913‐748‐4726 KS Certificate # G‐969 Email: [email protected] Telephone: 913‐748‐4704 Email: [email protected]

Table of Contents

General Information 1 Purpose of the Study 1 Intended Use and User 1 Prior Services 1 Scope of Analysis 1 Source Data 1 Economic Analysis 3 Johnson County Area Analysis 3 City of Lenexa Analysis 12 City of Lenexa Conclusion 19 Demand Generators 20 Multifamily Market Analysis 26 Class A Multifamily Market 27 Class B/C Multifamily Market 29 Multifamily Property Analysis ‐ Lenexa 39 Demand Analysis 46 Conclusions ‐ Multifamily 52 Single Family Analysis 53 Housing Affordability 53 Single Family Housing Demand 58 Capture Rate 60 Conclusions Single Family 61 Certification 62 Assumptions and Limiting Conditions 64 Addenda A. Appraiser Qualifications B. Definitions C. Nielsen Data D. Engagement Letter

City of Lenexa Housing Study General Information 1

General Information

Purpose of the Study The purpose of the consulting assignment is to provide a detailed analysis of Lenexa’s multifamily and single family housing and to forecast demand and trends for at least the next market cycle.

Intended Use and User The intended use of the analysis is for planning purposes. The client and intended user is City of Lenexa. The assignment is not intended for any other use or user. No party or parties other than City of Lenexa may use or rely on the information, opinions, and conclusions contained in this report.

Prior Services USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have not performed any services regarding the subject of this report within the three‐year period immediately preceding acceptance of this assignment.

Scope of Analysis To perform this assignment, we took the following steps to gather, confirm and analyze relevant data.

 Physically inspected the surrounding market area.

 Collected factual information about the property and the surrounding market area, and confirmed that information with various sources.

 Prepared a report setting forth the conclusions derived in this analysis as well as the information upon which the conclusions are based.

This report involves and analysis of the subject and conforms to the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP) and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

Source Data The type and extent of our research and analysis is detailed in individual sections of the report. In preparing this report we have relied on numerous sources of data. These sources include, but are not limited to the following:

 The Nielsen Company;

 U.S. Department of Labor, Bureau of Labor Statistics;

City of Lenexa Housing Study General Information 2

 Market surveys prepared by REIS, Inc.;

 Information provided by planning department representatives from the City of Lenexa and the Johnson County Appraiser’s office;

 Property managers of multifamily properties in Lenexa;

 The City of Lenexa;

 Developers and brokers;

 CoStar;

 Zillow;

 Loopnet;

 Kansas Citye Hom Builders Association;

 United States Census Bureau;

 Heartland MLS;

 Urban Land Institute;

 National Multifamily Housing Council.

City of Lenexa Housing Study Johnson County Area Analysis 3

Economic Analysis

Lenexa is a city of 52,374 people centrally located within Johnson County and in the southwestern part of the Kansas City MSA. Specifics of the City of Lenexa are discussed in the next section.

Johnson County Area Analysis Johnson County is located in eastern Kansas. It is 473 square miles in size and has a population density of 1,236 persons per square mile. Johnson County is part of the Kansas City, MO‐KS Metropolitan Statistical Area, hereinafter called the Kansas City MSA, as defined by the U.S. Office of Management and Budget.

Population Johnson County has an estimated 2016 population of 584,915, which represents an average annual 1.2% increase over the 2010 census of 544,179. Johnson County added an average of 6,789 residents per year over the 2010‐2016 period, and its annual growth rate exceeded the Kansas City MSA rate of 0.7%.

Looking forward, Johnson County's population is projected to increase at a 1.0% annual rate from 2016‐2021, equivalent to the addition of an average of 5,809 residents per year. Johnson County's growth rate is expected to exceed that of the Kansas City MSA, which is projected to be 0.6%.

Population Trends Population Compound Ann. % Chng 2010 Census 2016 Est. 2021 Est. 2010 ‐ 2016 2016 ‐ 2021 Johnson County, KS 544,179 584,915 613,959 1.2% 1.0% Kansas City MSA 2,009,342 2,094,363 2,161,195 0.7% 0.6% Source: The Nielsen Company Employment Total employment in Johnson County is currently estimated at 334,598 jobs. Between year‐end 2005 and the present, employment rose by 28,694 jobs, equivalent to a 9.4% increase over the entire period. There were gains in employment in seven out of the past ten years despite the national economic downturn and slow recovery. Johnson County's rate of employment growth over the last decade surpassed that of the Kansas City MSA, which experienced an increase in employment of 5.0% or 47,935 jobs over this period.

A comparison of unemployment rates is another way of gauging an area’s economic health. Over the past decade, the Johnson County unemployment rate has been consistently lower than that of the Kansas City MSA, with an average unemployment rate of 4.7% in comparison to a 6.4% rate for the Kansas City MSA. A lower unemployment rate is a positive indicator.

Recent data shows that the Johnson County unemployment rate is 3.3% in comparison to a 4.4% rate for the Kansas City MSA, a positive sign for Johnson County economy but one that must be tempered

City of Lenexa Housing Study Johnson County Area Analysis 4

by the fact that Johnson County has underperformed the Kansas City MSA in the rate of job growth over the past two years.

Employment Trends Total Employment (Year End) Unemployment Rate (Ann. Avg.) Johnson % Kansas City % Year County Change MSA Change Johnson County Kansas City MSA 2005 305,904 954,259 4.6% 5.6% 2006 314,953 3.0% 973,383 2.0% 4.1% 5.1% 2007 320,840 1.9% 981,494 0.8% 4.1% 5.1% 2008 316,110 ‐1.5% 971,228 ‐1.0% 4.6% 5.9% 2009 298,511 ‐5.6% 929,709 ‐4.3% 6.5% 8.7% 2010 300,571 0.7% 927,570 ‐0.2% 6.1% 8.7% 2011 307,865 2.4% 938,546 1.2% 5.4% 7.8% 2012 315,888 2.6% 954,167 1.7% 4.6% 6.5% 2013 325,610 3.1% 967,706 1.4% 4.3% 6.3% 2014 335,917 3.2% 992,219 2.5% 3.8% 5.6% 2015* 334,598 ‐0.4% 1,002,194 1.0% 3.4% 5.0% Overall Change 2005‐2015 28,694 9.4% 47,935 5.0% Avg Unemp. Rate 2005‐2015 4.7% 6.4% Unemployment Rate ‐ February 2016 3.3% 4.5% *Total employment data is as of September 2015; unemployment rate data reflects the average of 12 months of 2015. Source: Bureau of Labor Statistics and Economy.com. Employment figures are from the Quarterly Census of Employment and Wages (QCEW). Unemployment rates are from the Current Population Survey (CPS). The figures are not seasonally adjusted.

Employment Sectors The composition of the Johnson County job market is depicted in the chart below. A complete data set is not available for the Kansas City MSA, so we will compare Johnson County to the United States. Total employment for the two areas is broken down by major employment sector, and the sectors are ranked from largest to smallest based on the percentage of Johnson County jobs in each category.

City of Lenexa Housing Study Johnson County Area Analysis 5

Employment Sectors ‐ 2015

0% 5% 10% 15% 20% 25% 30%

24.2% Professional and Business Services 14.0% 20.6% Trade; Transportation; and Utilities 19.0% 13.3% Education and Health Services 15.0% 9.4% Financial Activities 5.6% 9.1% Government 15.2% 9.1% Leisure and Hospitality 10.9% 5.4% Manufacturing 8.8% 4.1% Construction 4.7% 2.5% Other Services 3.1% 2.3% Information 2.0% 0.1% Natural Resources & Mining 1.5%

Johnson County United States

Source: Bureau of Labor Statistics and Economy.com

Johnson County has greater concentrations than the United States in the following employment sectors:

1. Professional and Business Services, representing 24.2% of Johnson County payroll employment compared to 14.0% for the nation overall. This sector includes legal, accounting, and engineering firms, as well as management of holding companies. 2. Trade; Transportation; and Utilities, representing 20.6% of Johnson County payroll employment compared to 19.0% for the nation overall. This sector includes jobs in retail trade, 3. Wholesale trade, trucking, warehousing, and electric, gas, and water utilities. 4. Financial Activities, representing 9.4% of Johnson County payroll employment compared to 5.6% for the nation overall. Banking, insurance, and investment firms are included in this sector, as are real estate owners, managers, and brokers. 5. Information, representing 2.3% of Johnson County payroll employment compared to 2.0% for the nation overall. Publishing, broadcasting, data processing, telecommunications, and software publishing are included in this sector.

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Johnson County is underrepresented in the following sectors:

1. Education and Health Services, representing 13.3% of Johnson County payroll employment compared to 15.0% for the nation overall. This sector includes employment in public and private schools, colleges, hospitals, and social service agencies. 2. Government, representing 9.1% of Johnson County payroll employment compared to 15.2% for the nation overall. This sector includes employment in local, state, and federal government agencies. 3. Leisure and Hospitality, representing 9.1% of Johnson County payroll employment compared to 10.9% for the nation overall. This sector includes employment in hotels, restaurants, recreation facilities, and arts and cultural institutions. 4. Manufacturing, representing 5.4% of Johnson County payroll employment compared to 8.8% for the nation overall. This sector includes all establishments engaged in the manufacturing of durable and nondurable goods. Major Employers Major employers in the Kansas City MSA are shown in the following table. Those employers particularly relevant to Lenexa are highlighted. These include employers located within Lenexa and also employers located in cities nearby Lenexa that likely have a significant number of employees living in Lenexa.

City of Lenexa Housing Study Johnson County Area Analysis 7

TOP 50 KANSAS CITY MSA EMPLOYERS Current # of Local Rank Company Employees Nature of Operation 1 Federal Government 30,000 Government 2Cerner Corporation 10,128 Health care information technology 3HCA Midwest Health System 9,753 Health care 4Saint Luke's Health System 7,550 Health care 5 Children’s Mercy Hospitals & Clinics 6,305 Health care 6Sprint Corp. 6,300 Communications 7The University of Kansas Hospital 6,030 Health care and education 8 State of Missouri 5,814 Government 9 State of Kansas 4,695 Government 10 Hallmark Cards Inc. 4,600 Greeting cards and Television programming 11 City of Kansas City, Missouri 4,499 Government 12 Olathe District Schools 4,498 Public school district 13 Johnson County, Kansas Government 3,822 Government 14 Garmin International Inc. 3,723 Designs, manufacturers & markets GPS devices 15 Kansas City, Kan Public Schools 3,500 School District 16 DST Systems, Inc. 3,500 Information processing and software 17 General Motors Fairfax Assembly 3,500 Auto Manufacturing 18 Blue Valley School District 3,266 Public school district 19 Truman Medical Centers 3,175 Health care 20 The University of Kansas Medical Center 3,174 Medical school and health care 21 North Kansas City Schools 3,160 Public school district 22 University of Missouri – Kansas City 3,109 Education 23 Black & Veatch 3,107 Global engineering, consulting & construction 24 Farmers Insurance 3,000 Insurance 25 Burns & McDonnell 2,960 Engineering, construction, and consulting 26 UPS 2,852 Logistics 27 UMB Financial Corp. 2,830 Financial services and banking 28 Honeywell Federal Mfg. & Technologies 2,600 Operates National Nuclear Security Administration 29 Shawnee Mission School District 2,545 Public school district 30 Lee’s Summit School District 2,527 Public school district 31 BNSF Railway Co. 2,500 Freight railroad 32 Commerce Bank 2,361 Banking and financial services 33 Shawnee Mission Medical Center 2,267 Health care services 34 Unified Government of WYCO/KCKS 2,200 Government 35 Kansas City Public Schools 2,200 Public school district 36 Great Plains Energy 2,191 Electric utility 37 Blue Springs School District 2,015 School District 37 United Health Group 2,000 Health care services 39 Olathe Health Systems, Inc. 2,000 Health care delivery system 40 Kansas City, MO Police Department 1,990 Police Department 41 Liberty Public Schools 1,922 School District 42 Ameristar Casino Hotel Kansas City 1,901 Hotel and Casino 43 U.S. Bank 1,850 Banking & financial services 44 Quest Diagnostics, Inc. 1,833 Medical lab testing 45 Park Hill 1,800 Public school district 46 YRC Worldwide 1,700 LTL Transportation 47 ATK Small Caliber Systems 1,650 Lake City Army Ammunition plant 48 Jackson County 1,596 Local government 49 Johnson County Community College 1,500 Higher Education 50 Bayer KS/MO Operations 1,450 Healthcare Source: Kansas City Business Journal Updated January, 2016

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Gross Domestic Product Gross Domestic Product (GDP) is a measure of economic activity based on the total value of goods and services produced in a defined geographic area. Although GDP figures are not available at the county level, data reported for the Kansas City MSA is considered meaningful when compared to the nation overall, as Johnson County is part of the MSA and subject to its influence.

Economic growth, as measured by annual changes in GDP, has been similar in the Kansas City MSA and the United States overall during the past eight years. The Kansas City MSA has grown at a 0.8% average annual rate while the United States has grown at a 0.8% rate. As the national economy improves, the Kansas City MSA has recently underperformed the United States. GDP for the Kansas City MSA rose by 2.0% in 2014 while the United States GDP rose by 2.2%.

The Kansas City MSA has a per capita GDP of $54,123, which is 10% greater than the United States GDP of $49,110. This means that Kansas City MSA industries and employers are adding relatively more value to the economy than their counterparts in the United States overall.

Gross Domestic Product ($ Mil) ($ Mil) Year Kansas City MSA % Change United States % Change 2007 105,723 14,798,367 2008 106,772 1.0% 14,718,304 ‐0.5% 2009 103,699 ‐2.9% 14,320,114 ‐2.7% 2010 106,528 2.7% 14,628,169 2.2% 2011 106,750 0.2% 14,833,680 1.4% 2012 108,874 2.0% 15,127,489 2.0% 2013 109,943 1.0% 15,317,517 1.3% 2014 112,096 2.0% 15,659,221 2.2% Compound % Chg (2007‐2014) 0.8% 0.8% GDP Per Capita 2014 $54,123 $49,110 Source: Bureau of Economic Analysis and Economy.com; data released September 2015. The release of state and local GDP data has a longer lag time than national data. The data represents inflation‐adjusted "real" GDP stated in 2009 dollars.

Household Income Johnson County is more affluent than the Kansas City MSA. Median household income for Johnson County is $77,378, which is 31.1% greater than the corresponding figure for the Kansas City MSA.

Median Household Income ‐ 2016 Median Johnson County, KS $77,378 Kansas City MSA $59,028 Comparison of Johnson County, KS to Kansas City MSA + 31.1% Source: The Nielsen Company

City of Lenexa Housing Study Johnson County Area Analysis 9

The following chart shows the distribution of households across twelve income levels. Johnson County has a greater concentration of households in the higher income levels than the Kansas City MSA. Specifically, 51% of Johnson County households are at the $75,000 or greater levels in household income as compared to 38% of Kansas City MSA households. A lesser concentration of households is apparent in the lower income levels, as 19% of Johnson County households are below the $35,000 level in household income versus 30% of Kansas City MSA households.

Household Income Distribution ‐ 2016

1.7% $500,000 and more 0.7% 4.3% $250,000 ‐ 499,999 2.1% 3.7% $200,000 ‐ $249,999 2.0% 8.8% $150,000 ‐ $199,999 5.5% 7.5% $125,000 ‐ $149,999 5.5% 11.4% $100,000 ‐ $124,999 9.2% 13.9% $75,000 ‐ $99,999 13.4% 17.5% $50,000 ‐ $74,999 18.3% 12.1% $35,000 ‐ $49,999 13.8% 7.5% $25,000 ‐ $34,999 9.9% 6.0% $15,000 ‐ $24,999 9.1% 5.5% Less than $15,000 10.6% 0.0% 5.0% 10.0% 15.0% 20.0%

Johnson County, KS Kansas City MSA Source: The Nielsen Company

Education and Age Residents of Johnson County have a higher level of educational attainment than those of the Kansas City MSA. An estimated 52% of Johnson County residents are college graduates with four‐year degrees, versus 34% of Kansas City MSA residents. People in Johnson County are similar in age to their Kansas City MSA counterparts. The median age of both Johnson County and the Kansas City MSA is 38 years.

City of Lenexa Housing Study Johnson County Area Analysis 10

Conclusion The Johnson County economy will benefit from a growing population base and higher income and education levels. Johnson County experienced growth in the number of jobs and has maintained a consistently lower unemployment rate than the Kansas City MSA over the past decade. Moreover, Johnson County benefits from being part of the Kansas City MSA, which generates a higher level of GDP per capita than the nation overall. We anticipate that the Johnson County economy will improve and employment will grow, strengthening the demand for real estate.

City of Lenexa Housing Study Johnson County Area Analysis 11

Area Map

City of Lenexa Housing Study City of Lenexa Analysis 12

City of Lenexa Analysis Boundaries The analysis area is the City of Lenexa, Kansas, which is centrally located in Johnson County.

The City of Lenexa is outlined and highlighted in red in the above map.

City of Lenexa Housing Study City of Lenexa Analysis 13

Access and Linkages Primary access to Lenexa is provided by Interstate 35, a major arterial that crosses the Kansas City metro (and Johnson County) area in a northeast/southwest direction. Primary access to Lenexa is also provided by Interstate 435, a major arterial that encircles the entire Kansas City metro area. Secondary access is provided by Kansas Highway 7 (north/south) and Kansas Highway 10 (east/west). Overall, vehicular access is good.

The traffic counts at significant intersections within Lenexa are cited below:

 On I‐435 between 83rd Street and K‐10: between 67,600 and 70,000 cars per day;

 87th Street Parkway and Renner Blvd: 14,440 cars per day;

 Prairie Star Parkway and Renner Blvd: 9,675 cars per day;

 On K‐10 between K‐7 and I‐435 Between 47,700 (near K‐7) and 65,400 (near I‐435) cars per day;

 On K‐7 between 83rd Street and K‐10: 25,000 cars per day;

 On I‐35 between 87th Street and 95th Street: 99,500 cars per day;

 On I‐35 between 95th Street and I‐435: 97,000 cars per day;

 On I‐35 between I‐435 and College Boulevard: 116,000 cars per day; and

 On 95th Street, just west of Quivira (west of Oak Park Mall): 24,820 cars per day.

In 2015, the Kansas Department of Transportation began a $288 million infrastructure and road improvement project at the I‐35/I‐435 interchange just southeast of Oak Park Mall. The project includes a redesign of the I‐ 35/95th Street exit (west of the mall). This will be a diverging diamond interchange given the intensity of development surrounding the existing interchange. The new design will maximize traffic flow between the interstate and the mall. It is expected to be completed in fall 2016. The City of Overland Park has already completed widening of Quivira from I‐435 to the mall, improving traffic flow from the south.

The new diverging diamond interchange will allow traffic to cross over to the other side of the roadway at the intersections. This eliminates oncoming traffic for left turning vehicles and allows left turns eto th on‐ramp without the left turn arrow.

Public transportation is provided by the Kansas City Area Transity Authority (KCATA)/RideKC and provides access to various locations throughout Johnson County with connections to Downtown Kansas City, Missouri. The local market perceives public transportation as average compared to other areas in the region. However, the primary mode of transportation in this area is the automobile.

City of Lenexa Housing Study City of Lenexa Analysis 14

The Kansas International Airport is located about 30 miles from the City of Lenexa; travel time is about 35 to 40 minutes, depending on traffic conditions. The Kansas City CBD, the economic and cultural center of the region, is approximately 15 miles from Lenexa.

Following is the City of Lenexa Transportation Plan, which was updated in 2013. We expect that the city will encourage development in areas that are already supported by utility and transportation infrastructure. These maps show the existing surface infrastructure. While lower land prices may be available for some tracts without all necessary services, the cost of bring services to a site is likely borne in part by the developer thus bargain land prices on the periphery of the city are not all that they seem.

City of Lenexa Housing Study City of Lenexa Analysis 15

City of Lenexa Housing Study City of Lenexa Analysis 16

I‐435 Corridor

As noted in the above map of the I‐435 corridor, the undeveloped land east of Shawnee Mission Park is zoned R‐1, Single Family Residential. The undeveloped land south of 87th Street and east of I‐435 is zoned CP‐2, Planned Community Commercial, CPO, Planned Office, RP‐4, Planned Residential – High Density. The land west of I‐435 north of Prairie Star Parkway is zoned Agricultural. South of Prairie Star Parkway and west of I‐435, the land switches off between being zoned BP‐1, Planned Business Park, and Agricultural.

City of Lenexa Housing Study City of Lenexa Analysis 17

K‐7 Corridor

Most of the undeveloped land on the east side of K‐7 is zoned Agricultural and Planned Residential – Low Density, which would be suitable for single‐family homes. The undeveloped land located directly north and south of Prairie Star Parkway on the east side of K‐7 is zoned CP‐3, which is Planned Regional Commercial district and the land directly north of K‐10 on the east side of K‐7 is zoned Agricultural. Similarly, the undeveloped land on the west side of K‐7 south of Prairie Star Parkway is zoned Agricultural.

City of Lenexa Housing Study City of Lenexa Analysis 18

Following is a map of the Future Land Use Plan, which was updated in 2013. The City of Lenexa’s Comprehensive Plan is the official policy guide for future growth and development of the city. Within the context of the map, there are several areas labeled with a numbered star. The purpose of the Alternative Land Use Stars is to recognize those areas that are in transition and likely to develop, or redevelop.

City of Lenexa Housing Study City of Lenexa Conclusion 19

City of Lenexa Conclusion The preceding exhibits demonstrate several factors of the community of Lenexa that are supportive of development.

 There is adequate vacant land to support the expected demand for single and multifamily development though topography will be a deterrent to development on some vacant tracts.

 The north south transportation corridors appear capable of supporting new single and multifamily development.

 The east west access to and within the developable areas of Lenexa is presently limited. However, the planned but as of yet uncompleted arterials and collectors west of I‐435 appear to be reasonable for likely future demand.

City of Lenexa Housing Study Demand Generators 20

Demand Generators Major employers in Lenexa include Quest Diagnostics, the Environmental Protection Agency (EPA), Alliance Data Systems, B/E Aerospace, Clinical Reference Labs, Coca‐Cola, Community America Credit Union, Consolidated Container, Deluxe Corporation, Lexmark, Gear for Sports, and Gill Studios. These are all located within Lenexa. These represent a diverse array of industries. In addition to its strong employment base, the area is easily accessible to the Olathe/Gardner, South Overland Park, Northeast Johnson County, and Downtown Kansas City submarkets, all within twenty minutes driving time. Access to employment centers in other submarkets is a major demand driver.

Other demand generators in the area include Kansas Commerce Center in Lenexa which is a 133‐acre business park at 95th and Lackman Road and contains approximately 670,000 square feet of office and industrial space. Renner Ridge Corporate Center is a 75‐acre, 650,000 square foot Class A office park located at the northeast corner of Renner Blvd and K‐10. Renner Corporate Center is a nearby office park that is anchored by Kiewit Construction at 95th Street and Renner Blvd and totals 316,000 square feet in two buildings. Pine Ridge Business Park is a mixed‐use office and industrial park located on more than 240 acres between 75th and 87th Streets.

Also there is Meritex Underground, a subterranean industrial park currently totaling 2.2 million square feet. In addition to its strong employment base, the area is easily accessible to the rest of the Kansas City metro area. Corporate Ridge is a Class A office park located south of K‐10 at Ridgeview Road in Olathe that contains several office buildings and will soon include a hotel. Lenexa Logistics Center is a 260,700 square foot warehouse building at 113th & Renner Boulevard in Lenexa, Kansas was recently completed and is now leased to Amazon.com. Phase I will total 1,040,000 square feet and Phase II will add another 561,500 square feet. This is being developed by Block Real Estate Services. Renner Commerce Center, located at the southeast corner of Renner Road and Eicher Drive, is two industrial buildings totaling 157,000 square feet. The first building of 68,000 square feet was completed in August 1999 is 100% leased and features precast concrete, 24 foot clear height, and has the ability to accommodate 40% office. Phase II is a 90,000 square foot building that was completed in 2014 and was build‐to‐suit for Select Brands.

A new industrial demand generator in Johnson County is the Logistics Park of Kansas City. This park is the tie‐in to the Burlington Northern Santa Fe intermodal center in Edgerton, Kansas. It is a 558 acre intermodal park master planned for over seven million square feet of distribution and warehouse space, three million of which will be rail served. The Logistics Park will feature 7.1 million square feet of warehouse and associated buildings when complete. The two projects are situated between 183rd Street on the north and 191st Street on the south, and Waverly Road on the east and Four Corners Road on the west. An 825,000 square foot distribution center was finished at the end of 2015 and with that completion there is approximately 3.6 million square feet of new buildings at the Logistics Park, according to NorthPoint Development. On July 8, 2015, BNSF Railway and NorthPoint Development announced plans to begin construction of an industrial rail spur and North Park (Waverly Road north of 183rd St) near the logistic park’s intermodal facility. The rail spur will open 325 acres of rail‐served property on Waverly Road north of 183rd Street. This is particularly important to Lenexa because it supports current and future demand for smaller and more localized industrial uses and attracts investor attention to the area.

City of Lenexa Housing Study Demand Generators 21

We note that industrial development by its very nature does not provide a significant number of jobs when compared to office, retail or institutional development. These demand generators support the demographic profile described in the following section.

Demographic Factors A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table.

Area Demographics Lenexa, KS Johnson County, KS Kansas City, MSA 2016 Estimates Population 2010 48,190 544,179 2,009,342 Population 2016 52,374 584,915 2,094,363 Population 2021 55,164 613,959 2,161,195 Compound % Change 2010‐2016 1.45% 1.25% 0.71% Compound % Change 2016‐2021 1.07% 0.99% 0.64%

Households 2010 19,304 212,882 789,533 Households 2016 21,013 229,794 824,507 Household 2021 22,188 241,901 852,187 Compound % Change 2010‐2016 1.48% 1.32% 0.74% Compound % Change 2016‐2021 1.12% 1.05% 0.67%

Median Household Income 2016 $74,638 $77,378 $59,028 Average Household Size 2.5 2.5 2.5 College Graduate % 53% 52% 34% Median Age 383838 Owner Occupied % 63% 71% 67% Renter Occupied % 37% 29% 33% Median Owner Occupied Housing Value $248,685 $241,802 $169,178 Median Year Structure Built 1988 1986 1977 Avg. Travel Time to Work in Min. 22 23 25 Source: The Nielsen Company

As shown above, the current population in Lenexa is 52,374 and the average household size is 2.5. Population in the area has grown on average 1.45% per year since the 2010 census, and this trend is projected to continue over the next five years with an average of 1.07% per year. This is a faster rate as compared to Johnson County overall, with the population of the entire county growing on average of 1.25% per year, and it is projected to grow 0.99% per year over the next five years.

Median household income in Lenexa is $74,638, which is slightly lower than the household income for Johnson County ($77,378) and significantly higher than the median household income in the Kansas City MSA ($59,028). Residents in Lenexa have a similar level of educational attainment to those in Johnson County and a significantly higher level of educational attainment than those in the Kansas City MSA.

City of Lenexa Housing Study Demand Generators 22

The City of Lenexa has a higher percentage of renter‐occupied housing (37%) than both Johnson County (29%) and the Kansas City MSA (33%) as a whole.

These demographic factors combined with the employment base discussed previously provide the basis of demand for multifamily housing in this area.

Development Activity and Trends During the last five years, development has been predominantly of industrial and multifamily uses, and has included:

 Industrial: Kansas Commerce Center, Lenexa Logistics Centre, Lenexa Logistics North, and College Crossing.

 Multifamily: Prairie Creek Phase 2 (under construction), Fairway Villas at City Center (under construction), Waterside Residences on Quivira (under construction), Edgewater (2015), Watercrest at City Center (2014), The Domain at City Center (2014), Westchester Townhomes (2012), and Prairie Creek Apartments (2012). These projects total 1,459 units built (or under construction) since 2012.

 Office: Kansas Commerce Center and Perceptive Software Headquarters

The pace of development has generally accelerated over .this time Like the U.S. economy in general, the greater Kansas City area economic has struggled to recover from the recession. While the Kansas City economy entered the recession later and its bottom wasn’t as deep, it has generally lagged the nation in terms of growth since the recession ended in mid‐2009. Similarly, Lenexa entered the recession later and was not hit as hard by the recession as other areas in the country and the Johnson County unemployment is lower than the national rate.

New and Proposed Construction – Lenexa and Johnson County It is important to recognize new construction in the submarket because as new units become available the standard for Class A multifamily properties is raised based on superior unit features and project amenities of the new properties. According to REIS, the growth rate of the total number of units in Johnson County is projected at 234 units per year until 2020.

The following projects represent new construction since November 2013 in Johnson County.

 EdgeWater at City Center – Located within Lenexa City Center, this Class A apartment complex was recently completed and contains 276 luxury apartment units. Construction commenced in 2015 and the project is presently partially complete and occupied as the remaining buildings are being completed.

 Waterside Residences on Quivira – Located near Quivira Road and W 81st Street, this Class A apartment complex is currently under construction and will contain 286 luxury apartment units with top of the line amenities. Construction commenced in 2015 and the project is expected to be completed by late 2016.

City of Lenexa Housing Study Demand Generators 23

 The District at City Center – located southwest of 87th Street Parkway and Renner Boulevard, Copaken Brooks and EPC Real Estate are partnering on a $56 million mixed‐use project, which plans for 44,000 square feet of offices, 36,500 square feet of restaurants, and 185 multifamily units.

 Fairway Villas at City Center – Jeff Alpert and Melanie Mann are developing the $22 million project which calls for 32 buildings housing 64 villas. The City Council has authorized $3.4 million in TIF to cover eligible developer expenses for that project.

 Prairie Creek Apartments, Phase 2 – the second phase of Prairie Creek Apartments at the northwest corner of Prairie Star Parkway and Renner Boulevard is currently under construction. The plan includes 86 one‐ and two‐bedroom units in seven two‐story buildings developed by Price Family. The first phase has 308 units completed in 2013.

 Domain at City Center – Located within Lenexa City Center, this Class A apartment complex was built between 2014 and 2015 and has 200 apartment units.

 WaterCrest at City Center – Located within Lenexa City Center, this Class A apartment complex was built between 2014 and 2015 and has 306 apartment units.

 The Pointe at Sonoma – Oddo has received preliminary plan approval for 604 units near 87th Street and Maurer with plans to being the first phase of construction of 326 units in spring 2017.

We note several new projects in Overland Park demonstrating strength in the apartment sector beyond the City of Lenexa.

 Corbin Greens – Located in Overland Park, KS, this Class A apartment complex was built in 2014 and has 228 apartment units.

 The Residences at Prairiefire – Located at the southeast corner of W 135th Street and Nall Avenue, this Class A apartment complex was built in 2014 and has 300 apartment units.

 The Avenues at Overland Park – Located at the northwest corner of W 135th Street and Rosehill Road, this Class A apartment complex was built in 2014 and has 402 apartment units.

 Avenue 80 – Located in downtown Overland Park, this mixed use project is currently under construction and will contain 15,500 square feet of retail and office space as well as 218 luxury apartment units. Construction began in 2015 and is expected to be complete in 2017.

 The Vue – Located in downtown Overland Park, this mixed use project will contain 8,700 square feet of storefront retail and 219 apartment units. The project is being developed by Hunt Midwest and construction is expected to begin in 2016.

City of Lenexa Housing Study Demand Generators 24

Class A Amenities Typical Class A amenities for suburban Kansas City apartment properties are granite countertops, stainless steel appliances, washers and dryers in each unit, an abundance of garage parking, walk‐in closets, and well‐appointed pools and common areas. As more units are constructed to these standards, Class A properties of previous development cycles are relegated to Class B product.

According to Multifamily Executive, “if you’re building a new Class A apartment community in 2016 and you don’t have a pool or fitness center, it’s doubtful you’re going to compete.” However, nice pools and large fitness centers aren’t the only communal amenities people seek when looking for the perfect place to rent. Bill Greene, senior design manager for Atlanta‐based Wood Partners says that the bar is “being raised higher and higher on these communal amenities…millennials expect them. Besides wanting to live close to work, they expect every amenity you could probably find in a single‐ family suburban market, but all in one area.”

The National Multifamily Housing Council and Kingsley Associates surveyed approximately 120,000 renters at 3,280 apartment communities nationwide to gauge their interest in specific communal amenities. In the selection of amenities above, the percentages shown represent those residents who said they were “interested” or “very interested” in that amenity; the dollar figures indicate how much more in rent those who were interested or very interested would expect to pay for that amenity. Residents indicate the neighborhood features of greatest important are proximity to local businesses, walkability of the area, and restaurants, as shown in the figure below.

City of Lenexa Housing Study Demand Generators 25

Understanding what the renting public demands in new product is helpful in examining the Lenexa multifamily market and evaluating the product so we can compare to competing submarkets.

City of Lenexa Housing Study Multifamily Market Analysis 26

Multifamily Market Analysis Metro Area Overview The subject is located in the Kansas City metro area as defined by REIS. Supply and demand indicators, including inventory levels, absorption, vacancy, and rental rates for all classes of space are presented in the ensuing table.

Kansas City Multifamily Market Trends and Forecasts Effective Effective Gross Inventory Occupied Vacancy Completions Absorption Rent Rental Rate Revenue Year (Units) (Units) (Units) (Units) (Units) Vacancy (%) ($/Unit) (% Change) ($/Unit) 2005 113,314 104,729 8,585 1,121 1,496 7.60% $602 0.20% $602 2006 113,847 106,043 7,804 654 1,314 6.90% $619 2.70% $619 2007 114,444 106,786 7,658 1,337 743 6.70% $643 4.00% $642 2008 115,445 106,451 8,994 1,069 ‐335 7.80% $656 1.90% $646 2009 116,470 105,858 10,612 866 ‐593 9.10% $650 ‐0.80% $636 2010 117,496 108,072 9,424 1,185 2,214 8.00% $661 1.70% $655 2011 118,394 110,988 7,406 898 2,916 6.30% $672 1.70% $677 2012 119,022 112,973 6,049 628 1,985 5.10% $693 3.10% $701 2013 120,209 114,871 5,338 1,187 1,898 4.40% $709 2.30% $720 2014 122,029 116,683 5,346 1,820 1,812 4.40% $735 3.70% $744 2015 124,993 119,709 5,284 2,964 3,026 4.20% $761 3.50% $771 Q1 2016 125,037 119,974 5,063 44 265 4.00% $766 0.60% $777 2016 128,443 122,242 6,201 3,450 2,533 4.80% $787 3.40% $792 2017 130,884 124,207 6,677 2,441 1,965 5.10% $811 3.00% $812 2018 131,728 125,146 6,582 844 939 5.00% $831 2.50% $833 2019 132,555 125,683 6,872 827 537 5.20% $848 2.00% $849 2020 133,277 126,197 7,080 722 514 5.30% $867 2.20% $866 2005 ‐ 2014 Average 117,067 109,345 7,722 1,077 1,345 6.6% $664 2.1% $664 Source: ©Reis Services, LLC 2016. Reprinted with the permission of Reis Services, LLC. All rights reserved. Compiled by Integra Realty Resources, Inc.

Market Trends Key Takeaways

Vacancy Rate vs. Effective Rental Rate $1,000 10.00%

$800 8.00%

$600 6.00%

$400 4.00%

$200 2.00%

$0 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Effective Rent ($/Unit) Vacancy (%)

City of Lenexa Housing Study Multifamily Market Analysis 27

 The current vacancy rate in the metro area is 4.00%; the vacancy rate has decreased by 400 basis points over the past six years.  Effective rent averages $766/Unit in the metro area, and future rent values are expected to increase by 13.19% over the next five years to $867/Unit.  Five‐year forecasts project a 5.30% vacancy rate in the metro area, representing an increase of 130 basis points over the next five years.

Supply and Demand Trends 4,000 10.00% 3,500 3,000 8.00% 2,500 2,000 6.00% 1,500 1,000 4.00% 500 0 2.00% ‐500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ‐1,000 0.00%

Completions (Units) Absorption (Units) Vacancy (%)

 Over the past six years, the inventory in the metro area has increased by 6.38% while the occupied stock has increased by 10.77%. e Over th past six years, completions have averaged 1,447 Units annually and reached a peak of 2,964 Units in 2015.  In a six‐year period, absorption figures reached a peak of 3,026 Units in 2015 and a low of 1,812 Units in 2014.

Class A Multifamily Market Supply and demand indicators, including inventory levels, absorption, vacancy, and rental rates for all Class A space in the Kansas City metro area are presented below.

City of Lenexa Housing Study Multifamily Market Analysis 28

Multifamily Class A Market Key Takeaways

Vacancy Rate Vs Asking Rental Rate $1,200 9.00% 8.00% $1,000 7.00% $800 6.00% 5.00% $600 4.00% $400 3.00% 2.00% $200 1.00% $0 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Asking Rent ($/Unit) Vacancy (%)

 The current vacancy rate for Class A properties in the metro area is 6.00%; the vacancy rate has decreased by 80 basis points over the past six years.  Asking rent currently averages $964/Unit and has increased by 15.87% over the past six years.

City of Lenexa Housing Study Multifamily Market Analysis 29

Supply and Demand Trends 3,500 9.00% 3,000 8.00% 7.00% 2,500 6.00% 2,000 5.00% 1,500 4.00% 3.00% 1,000 2.00% 500 1.00% 0 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Completions (Units) Absorption (Units) Vacancy (%)

 Over the past six years, Class A metro area inventory has increased by 15.36% while the occupied stock has increased by 16.29%.  Over the past six years, completions have averaged 1,447 Units annually and reached a peak of 2,964 Units in 2015.  In a six‐year period, absorption figures reached a peak of 2,473 Units in 2015 and a low of 668 Units in 2012.  Gross revenue for Class A properties in the metro area averaged $835/Unit and has increased by 16.80% over the past six years. Class B/C Multifamily Market Supply and demand indicators, including inventory levels, absorption, vacancy, and rental rates for all Class B/C space in the Kansas City metro area are presented in the following table.

City of Lenexa Housing Study Multifamily Market Analysis 30

Multifamily Class B/C Market Key Takeaways

Vacancy Rate Vs Asking Rental Rate $700 12.00% $680 10.00% $660 $640 8.00% $620 6.00% $600 $580 4.00% $560 2.00% $540 $520 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Asking Rent ($/Unit) Vacancy (%)

 The current vacancy rate for Class B/C properties in the metro area is 2.40%; the vacancy rate has decreased by 650 basis points over the past six years.  Asking rent currently averages $682/Unit and has increased by 8.95% over the past six years.

City of Lenexa Housing Study Multifamily Market Analysis 31

Supply and Demand Trends 2,000 12.00%

1,500 10.00% 1,000 8.00% 500 6.00% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 4.00% ‐500

‐1,000 2.00%

‐1,500 0.00%

Completions (Units) Absorption (Units) Vacancy (%)

 Over the past six years, Class B/C metro area inventory has remained constant while the occupied stock has increased by 7.14%.  There have not been any Class B/C completions in the metro area over the past six years.  In a six‐year period, absorption figures reached a peak of 1,440 Units in 2011 and a low of 272 Units in 2014.  Gross revenue for Class B/C properties in the metro area averaged $616/Unit and has increased by 16.72% over the past six years. Submarket Analysis The analysis area is located in the Shawnee/Lenexa submarket. In order to evaluate the market appeal of the subject’s submarket in comparison to others in the Kansas City metro area, we compare key supply and demand indicators for all classes of space in the ensuing table.

City of Lenexa Housing Study Multifamily Market Analysis 32

Kansas City Multifamily Submarket Comparison Inventory Inventory Asking Rent Free Rent Submarket (Buildings) (Units) ($/Unit) Vacancy (%) (mos) Expenses (%) Downtown/East KC 37 4,292 $852 8.00% 0.74 45.00% Midtown 23 2,077 $532 5.50% 1.05 46.20% Gladstone/Liberty 57 9,485 $663 2.70% 0.69 43.00% North Kansas City 47 6,747 $686 4.50% 0.79 44.10% University/Plaza 44 5,551 $895 5.00% 0.62 46.40% Overland Park S 62 15,999 $1,134 9.10% 0.67 40.60% Olathe/Gardner 48 5,544 $767 0.80% 0.69 40.50% Independence 41 6,337 $698 2.10% 0.56 41.60% Lee's Summit 35 4,136 $797 1.00% 0.27 41.70% Wyandotte 37 5,171 $675 5.80% 0.56 43.70% Platte 45 8,589 $810 4.00% 0.81 39.90% Raytown 37 6,147 $676 2.70% 0.76 44.00% SW Kansas City 30 4,594 $573 3.10% 0.83 45.30% Shawnee/Lenexa 46 12,252 $861 3.70% 0.66 40.90% Grandview/Far S 53 10,598 $743 3.90% 0.44 43.20% Merriam/Mission 45 7,551 $800 2.20% 0.62 43.10% Overland Park N 46 9,967 $879 1.10% 0.58 42.30% Market Averages/Totals 733 125,037 $767 4.05% 0.67 43.03% Source: ©Reis Services, LLC 2016. Reprinted with the permission of Reis Services, LLC. All rights reserved.

Shawnee/Lenexa Submarket Snapshot  The Shawnee/Lenexa submarket contains 6.28% of the metro building inventory and 9.80% of the metro unit inventory. It is the second largest  By our estimation, Lenexa comprises approximately 60.00% of the Shawnee/Lenexa submarket units.  The submarket's asking rent is $861/Unit which is greater than the metro average of $767/Unit.  The submarket's vacancy rate is 3.70% which is less than the metro average of 4.00%.  Operating expenses, as a percent of potential rent revenue, average 40.90% in the submarket compared to 43.03% for the overall metro area.  Average free rent in the submarket is consistent with the free rent for the metro area. In comparison to other submarkets in the region, the Shawnee/Lenexa submarket is rated as follows:

City of Lenexa Housing Study Multifamily Market Analysis 33

The market demand in the Shawnee/Lenexa submarket is increasing while the vacancy is decreasing. This shows that the area is not yet in an oversupply of multifamily units.

Submarket Overview Supply and demand indicators for all classes of space in the Shawnee/Lenexa submarket are displayed in the following table.

Shawnee/Lenexa Submarket Multifamily Trends and Forecasts Key Takeaways

Vacancy Rate Vs Effective Rental Rate $1,000 10.00%

$800 8.00%

$600 6.00%

$400 4.00%

$200 2.00%

$0 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Market Effective Rent ($/Unit) Submarket Effective Rent ($/Unit) Market Vacancy % Submarket Vacancy %

City of Lenexa Housing Study Multifamily Market Analysis 34

 The current vacancy rate in the submarket is 3.70%; the vacancy rate has decreased by 340 basis points over the past six years.  Five‐year forecasts project a 6.90% vacancy rate in the submarket, representing an increase of 3.20% over the next five years.  Effective rent averages $814/Unite in th submarket, and future rent values are expected to increase by 12.65% over the next five years to $917/Unit.

Supply and Demand Trends 500 9.00%

400 8.00% 7.00% 300 6.00% 200 5.00% 100 4.00% 3.00% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2.00% ‐100 1.00% ‐200 0.00%

Completions (Units) Absorption (Units) Vacancy (%)

 Current inventory level of 12,252 Units is expected to increase by 8.36% over the next five years.  Over the past six years, the inventory in the submarket has increased by 7.32% while the occupied stock has increased by 11.17%.  Over the past six years, completions have averaged 191 Units annually and reached a peak of 457 Units in 2014.  In a six‐year period, absorption figures reached a peak of 440 Units in 2010 and a low of 91 Units in 2013. Shawnee/Lenexa Submarket Class A Trends Supply and demand indicators, including inventory levels, absorption, vacancy, and rental rates for Class A space in the submarket are presented below.

City of Lenexa Housing Study Multifamily Market Analysis 35

Shawnee/Lenexa Submarket Class A Trends Key Takeaways

Vacancy Rate Vs Asking Rental Rate $1,200 10.00%

$1,000 8.00% $800 6.00% $600 4.00% $400 $200 2.00% $0 0.00% 20052006200720082009201020112012201320142015

Market Class Asking Rent ($/Unit) Submarket Class Asking Rent ($/Unit) Market Class Vacancy % Submarket Class Vacancy %

 The current vacancy rate for Class A properties in the submarket is 4.90%; the vacancy rate has decreased by 50 basis points over the past six years.  Asking rent currently averages $963/Unit and has increased by 18.60% over the past six years.

City of Lenexa Housing Study Multifamily Market Analysis 36

Supply and Demand Trends 500 8.00% 7.00% 400 6.00% 300 5.00% 4.00% 200 3.00% 2.00% 100 1.00% 0 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Completions (Units) Absorption (Units) Vacancy (%)

 Over the past six years, Class A inventory in the submarket has increased by 13.93% while the occupied stock has increased by 14.48%.  Over the past six years, completions have averaged 191 Units annually and reached a peak of 457 Units in 2014.  In a six‐year period, absorption figures reached a peak of 406 Units in 2014 and a low of 37 Units in 2013.  Gross revenue for Class A properties in the submarket averaged $829/Unit and has increased by 19.17% over the past six years. Shawnee/Lenexa Submarket Class B/C Trends Supply and demand indicators, including inventory levels, absorption, vacancy, and rental rates for Class B/C space in the submarket are presented in the ensuing table.

City of Lenexa Housing Study Multifamily Market Analysis 37

Shawnee/Lenexa Submarket Class B/C Trends Key Takeaways

Vacancy Rate Vs Asking Rental Rate $800 12.00% $700 10.00% $600 $500 8.00% $400 6.00% $300 4.00% $200 $100 2.00% $0 0.00% 20052006200720082009201020112012201320142015

Market Class Asking Rent ($/Unit) Submarket Class Asking Rent ($/Unit) Market Class Vacancy % Submarket Class Vacancy %

 The current vacancy rate for Class B/C properties in the submarket is 2.10%; the vacancy rate has decreased by 690 basis points over the past six years.  Asking rent currently averages $735/Unit and has increased by 11.03% over the past six years.

City of Lenexa Housing Study Multifamily Market Analysis 38

Supply and Demand Trends 200 12.00% 150 10.00% 100 8.00% 50 0 6.00% ‐50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 4.00% ‐100 2.00% ‐150 ‐200 0.00%

Completions (Units) Absorption (Units) Vacancy (%)

 Over the past six years, Class B/C inventory in the submarket has remained constant while the occupied stock has increased by 7.55%.  There have not been any Class B/C completions in the submarket over the past six years.  In a six‐year period, absorption figures reached a peak of 157 Units in 2011 and a low of ‐21 Units in 2014.  Gross revenue for Class B/C properties in the submarket averaged $659/Unit and has increased by 19.41% over the past six years. New and Proposed Construction – Lenexa The following table summarizes properties that are under construction, planned, and/or proposed in Lenexa.

Lenexa New Construction Competition 2016/2017 Development No. of Units The District at City Center 175 Waterside Residences on Quivira 380 Fairway Villas at City Center 64 Prairie Creek Apartments, Phase 28 6 Total Under Construction 530

City of Lenexa Housing Study Multifamily Market Analysis 39

Multifamily Property Analysis ‐ Lenexa Most relevant to the subject is the demand and supply of its properties (as defined by REIS) as well as directly competing properties (i.e., peer group). A summary of all of the multifamily properties in Lenexa are shown in the following table.

Property Name Address Year Built Units Lenexa Plaza Apartments 9521 Noland Road 1962 12 Noland Square 9523 Noland Road 1962 12 Oak Park Village Apartments 9515 Monrovia Street 1967 510 Lenexa Crossings 12302 W. 97th Terrace 1970 280 London House Apartments 12901 Lord Nelson Drive 1970 152 Madison at Woodridge Apartments 13245 W. 87th Street 1970 249 Madison Mill Creek 8714 Pflumm Court 1971 119 Lenexa Place 12000 W. 77th Terrace 1972 289 Chelsea Court Apartments 9240 Rosehill Road 1974 24 The Meadows Apartments 11900 W. 77th Street 1974 434 Barrington Park 13219 W. 108th Terrace 1985 408 Rosehill Pointe Apartments 13106 W. 88th Street 1985 498 Dunes at City Center 8640 Schweiger Court 1986 172 Wind River Lodge Apartments 9109 Lichtenauer Drive 1989 567 The Crossings Apartments 8514 Monrovia Street 1996 240 Crescent Apartments 8410 Maurer Road 1998 334 Estancia at City Center 9001 Renner Road 1999 304 Park Edge Apartments 8201 Renner Road 1999 260 Pinnacle Point Apartments 10460 Pflumm Road 1999 160 The Reserve 9101 Renner Road 2000 256 Dunes at Falcon Valley 10211 Millstone Drive 2007 208 Mansions at Canyon Creek 25401 W. 95th Lane 2007 88 West End at City Center 8580 Cardinal Street 2008 309 Prairie Creek Apartments 9460 Kenwood Street 2012 308 Westchester Townhomes 13415 W. 87th Street Parkway 2012 25 The Domain at City Center 8800 Penrose Lane 2014 200 Watercrest at City Center 8401 Renner Boulevard 2014 306 Edgewater 8345 Renner Boulevard 2015 276

Total Apartment Units 29 Projects 7,000

Source: Johnson County Appraiser’s Office

We have conducted surveys of a representative sample of Lenexa’s apartment properties. We do this in order to present rental rates, vacancy, and amenities for comparison to competing submarkets.

City of Lenexa Housing Study Multifamily Market Analysis 40

Summary of Lenexa Rentals Avg. Avg. Avg. Property Name; Yr Built; # Units; Unit Rent/ Rent/ No. Address Survey Date Stories Unit Mix % Occ. SF Month SF 1Oak Park Village 6/15/2016 1961 511 9670 Halsey St. 3 Lenexa 1B/1BA 825 $715 $0.87 2B/1BA 1,050 $735 $0.70 2B/2BA 1,150 $826 $0.72 3B/2BA 1,263 $965 $0.76 Tenant‐Paid Utilities: 2Lenexa Crossing Apartment Homes 5/23/2016 1970 280 12445 W. 97th Ter. 393% Lenexa Studio 559 $660 $1.18 1 BR/1 BA 660 $650 $0.98 1 BR/1 BA 670 $660 $0.99 1 BR/1 BA 754 $745 $0.99 2 BR/1.5 BA 800 $710 $0.89 2 BR/2 BA 848 $875 $1.03 2 BR/2 BA 990 $770 $0.78 2 BR/2 BA 1,009 $845 $0.84 3 BR/2 BA 1,327 $1,115 $0.84 Tenant‐Paid Utilities: Trash, Sewer, Water Unit Features: Dishwasher, Disposal, Patios/Balcony, Walk‐in Closets, Range‐Refrig. Project Amenities: Clubhouse/Rec. Bldg., Fitness Room, Covered Parking, Laundry Facility, Swimming Pool 3Woodridge Apartments 5/23/2016 1985 248 13245 W. 87th Ter. 3 Lenexa One BR/ One BA unit 613 $604 $0.99 One BR/ One BA unit 673 $599 $0.89 Two BR/ One BA unit 818 $681 $0.83 Two BR/ Two BA unit 881 $802 $0.91 Tenant‐Paid Utilities: Trash, In‐Unit Electric, Sewer, Water, Gas Unit Features: Patios/Balcony, Fireplace, Dishwasher, Walk‐in Closets, Storage in Unit Project Amenities: Swimming Pool, Clubhouse/Rec. Bldg., Fitness Room, Spa/Hot Tub, Tennis Court

City of Lenexa Housing Study Multifamily Market Analysis 41

Summary of Lenexa Rentals Avg. Avg. Avg. Property Name; Yr Built; # Units; Unit Rent/ Rent/ No. Address Survey Date Stories Unit Mix % Occ. SF Month SF 4Dunes at City Center 5/25/2016 1986 172 8640 Schweiger Ct. 299% Lenexa 1 BR/ 1 BA 537 $688 $1.28 1 BR/1 BA 663 $764 $1.15 2 BR/2 BA 920 $889 $0.97 2 BR/2.5 BA Townhome 1,135 $1,030 $0.91 3 BR/2 BA 1,022 $1,100 $1.08 Tenant‐Paid Utilities: In‐Unit Electric Unit Features: Patios/Balcony, Range‐Refrig., Dishwasher, Washer/Dryer In Unit, Walk‐in Closets, Fireplace Project Amenities: Swimming Pool, Clubhouse/Rec. Bldg., Playground 5The Crossings 5/23/2016 1996 240 8514 Monrovia St. 392% Lenexa 1 BR/1 BA 641 $835 $1.30 1 BR/1 BA 701 $895 $1.28 1 BR/1 BA 759 $910 $1.20 1 BR/1 BA 821 $1,045 $1.27 2 BR/2 BA 1,104 $1,079 $0.98 2 BR/2 BA 1,150 $1,279 $1.11 Tenant‐Paid Utilities: Trash, In‐Unit Electric, Water Unit Features: Patios/Balcony, Dishwasher, Range‐Refrig., Washer/Dryer In Unit, Fireplace, Walk‐in Closets Project Amenities: Swimming Pool, Clubhouse/Rec. Bldg., Fitness Room, Garage/Under Building 6Crescent Apartments 5/23/2016 1998 334 8500 Maurer Rd. 3 Lenexa 1 BR/1 BA 673 $740 $1.10 1 BR/1 BA 783 $785 $1.00 1 BR/1 BA 831 $855 $1.03 2 BR/ 2 BA 983 $979 $1.00 2 BR/2 BA 1,088 $1,010 $0.93 2 BR/2 BA 1,185 $1,050 $0.89 3 BR/2 BA 1,436 $1,360 $0.95 Tenant‐Paid Utilities: – Unit Features: Patios/Balcony, Range‐Refrig., Dishwasher, Washer/Dryer Hookup, Fireplace, Walk‐in Closets Project Amenities: Swimming Pool, Laundry Facility, Fitness Room, Covered Parking, Garage/Under Building

City of Lenexa Housing Study Multifamily Market Analysis 42

Summary of Lenexa Rentals Avg. Avg. Avg. Property Name; Yr Built; # Units; Unit Rent/ Rent/ No. Address Survey Date Stories Unit Mix % Occ. SF Month SF 7The Reserve Apartments 5/23/2016 2000 256 9101 Renner Rd. 287% Lenexa 1 BR/1 BA 753 $701 $0.93 1 BR/1 BA 771 $701 $0.91 2 BR/2 BA 950 $859 $0.90 3 BR/2 BA 1,146 $954 $0.83 Tenant‐Paid Utilities: In‐Unit Electric Unit Features: Dishwasher, Disposal, Fireplace, Air Conditioning, Patios/Balcony, Carpets/Drapes/Blinds, Washer/Dryer Hookup, Walk‐in Closets, Storage in Unit Project Amenities: Garage/Under Building, Playground, Swimming Pool, Clubhouse/Rec. Bldg., Laundry Facility, Picnic/BBQ Area 8Park Edge Apartments 5/25/2016 1999 260 8201 Renner Blvd. 298% Lenexa 1 BR/1 BA 792 $955 $1.21 2 BR/2 BA 1,155 $1,182 $1.02 3 BR/2 BA 1,377 $1,251 $0.91 Tenant‐Paid Utilities: Trash, In‐Unit Electric, Water, Gas Unit Features: Patios/Balcony, Dishwasher, Range‐Refrig., Washer/Dryer In Unit Project Amenities: Swimming Pool, Covered Parking, Clubhouse/Rec. Bldg., Fitness Room 9Estancia at City Center fka: Trails 5/23/2016 1999 304 9001 Renner Rd. 397% Lenexa The Brook 740 $825 $1.11 The River Crossing 960 $1,135 $1.18 The Ridge Crest 1,121 $1,063 $0.95 The Summit 1,320 $1,400 $1.06 Tenant‐Paid Utilities: Trash, In‐Unit Electric, Sewer, Water, Gas Unit Features: Patios/Balcony, Dishwasher, Range‐Refrig., Washer/Dryer In Unit, Walk‐in Closets, Fireplace Project Amenities: Swimming Pool, Covered Parking, Garage/Under Building, Clubhouse/Rec. Bldg., Fitness Room

City of Lenexa Housing Study Multifamily Market Analysis 43

Summary of Lenexa Rentals Avg. Avg. Avg. Property Name; Yr Built; # Units; Unit Rent/ Rent/ No. Address Survey Date Stories Unit Mix % Occ. SF Month SF 10 Mansions at Canyon Creek 5/23/2016 2007 56 Prairie Star Parkway & Mize 393% Lenexa 1BR/1BA 1,396 $1,545 $1.11 2BR/2BA 1,195 $1,350 $1.13 3BD/3BA 1,396 $1,545 $1.11 Tenant‐Paid Utilities: In‐Unit Electric, Water, Gas Unit Features: Patios/Balcony, Fireplace, Vaulted Ceilings, Dishwasher, Disposal, Trash Compactor, Washer/Dryer In Unit, Storage in Unit, Air Conditioning, Walk‐ in Closets Project Amenities: Swimming Pool, Spa/Hot Tub, Sauna, Garage/Under Building, Clubhouse/Rec. Bldg., Fitness Room 11 The Dunes at Falcon Valley 5/23/2016 2008 208 19501 W. 102nd St. 298% Lenexa 1 BR/1 BA 657 $839 $1.28 1 BR/1 BA 762 $859 $1.13 2 BR/2 BA 1,074 $1,039 $0.97 2 BR/2 BA 1,198 $1,079 $0.90 3 BR/2 BA 1,328 $1,329 $1.00 2 BR/ 1BA – $1,005 – Tenant‐Paid Utilities: Trash, In‐Unit Electric, Water Unit Features: Patios/Balcony, Fireplace, Dishwasher, Range‐Refrig., Washer/Dryer In Unit

Project Amenities: Swimming Pool, Clubhouse/Rec. Bldg., Fitness Room, Garage/Under Building 12 West End at City Center 5/23/2016 2008 309 17410 W. 86th Ter. 396% Lenexa A1 729 $865 $1.19 A2 793 $1,005 $1.27 A3 906 $1,045 $1.15 B1 1,086 $1,185 $1.09 B2 1,232 $1,385 $1.12 C1 1,471 $1,615 $1.10 Tenant‐Paid Utilities: In‐Unit Electric, Trash, Sewer, Water, Gas Unit Features: Patios/Balcony, Dishwasher, Range‐ Refrig., Washer/Dryer Hookup, Walk‐in Closets Project Amenities: Swimming Pool, Clubhouse/Rec. Bldg., Fitness Room, Garage/Under Building 13 Prairie Creek Apartments 5/23/2016 2013 308 9395 Scarborough 397% Lenexa 1 BR/1 BA 704 $915 $1.30 1 BR/1 BA 841 $990 $1.18 1 BR/1 BA/Den 948 $1,190 $1.26 2 BR/2 BA 1,090 $1,235 $1.13 2 BR/2 BA 1,210 $1,465 $1.21 2 BR/2 BA 1,372 $1,590 $1.16 3 BR/2 BA 1,400 $1,640 $1.17 Tenant‐Paid Utilities: Trash, In‐Unit Electric, Sewer, Water Unit Features: Patios/Balcony, Dishwasher, Range‐Refrig., Washer/Dryer In Unit Project Amenities: Swimming Pool, Garage/Under Building, Clubhouse/Rec. Bldg., Fitness Room, Basketball

City of Lenexa Housing Study Multifamily Market Analysis 44

14 The Domain at City Center 5/23/2016 2014‐2015 200 8800 Penrose Lane 435% Lenexa Studio 553 $995 $1.80 A1,A2,A3,&A4 595 $1,095 $1.84 B1,B2,B3,&B4 929 $1,595 $1.72 C1,C2,C3,C4,C5,&C6 1,097 $1,795 $1.64 D1&D2 1,414 $2,495 $1.76 Tenant‐Paid Utilities: In‐Unit Electric, Trash, Sewer, Water, Gas Unit Features: Dishwasher, Disposal, Vaulted Ceilings, Washer/Dryer In Unit, Air Conditioning, Patios/Balcony, Hardwood Floors, Carpets/Drapes/Blinds Project Amenities: Clubhouse/Rec. Bldg., Garage/Under Building, Swimming Pool, Fitness Room, Storage 15 WaterCrest at City Center 5/23/2016 2014‐2015 306 8401 Renner Rd. 498% Lenexa Alcott 776 $1,140 $1.47 Ashbery 1,119 $1,488 $1.33 Bradbury 1,189 $1,564 $1.32 Hemingway – $1,703 – Tenant‐Paid Utilities: Trash, In‐Unit Electric, Sewer, Water, Gas Unit Features: Patios/Balcony, Vaulted Ceilings, Dishwasher, Disposal, Washer/Dryer In Unit, Air Conditioning, Carpets/Drapes/Blinds, Walk‐in Closets Project Amenities: Swimming Pool, Spa/Hot Tub, Garage/Under Building, Covered Parking, Clubhouse/Rec. Bldg., Fitness Room, Storage, Security 16 EdgeWater at City Center 5/25/2016 2016 276 87th Street and Renner Boulevard 4 – Lenexa 1 BR/1 BA 624 $1,150 $1.84 2BD/2BA 1,150 – – 2 BR/2 BA/Den 1,800 – – Tenant‐Paid Utilities: Trash, In‐Unit Electric, Sewer, Water Unit Features: Dishwasher, Hardwood Floors, Patios/Balcony, Washer/Dryer In Unit, Vaulted Ceilings, Disposal, Trash Compactor, Air Conditioning, Carpets/Drapes/Blinds, Walk‐in Closets Project Amenities: Clubhouse/Rec. Bldg., Covered Parking, Garage/Under Building, Swimming Pool, Spa/Hot Tub, Basketball, Fitness Room, Storage, Security

The City of Lenexa has a sufficiently deep and broad supply of multifamily units renting from $600 per unit to over $1,600 for larger units in newer properties. Based on a 30% of gross income requirement, a household making over $24,000 per year could afford some of the smaller and older units in Lenexa. We expect it will be a struggle as it is in many cities, for rents to remain affordable to the lowest income households in the city while maintaining the quality and appearance of the existing rental supply through zoning and building codes enforcement.

City of Lenexa Housing Study Multifamily Market Analysis 45

Multifamily Market Outlook and Conclusions

Based on the present supply of multifamily development in the Lenexa/Shawnee submarket, Overland Park South, and Olathe/Gardner, Lenexa is rated as follows:

Surrounding Area Attribute Ratings Highway Access Above Average Demand Generators Average Convenience to Support Services Average Convenience to Public Transportation Below Average Employment Stability Above Average Police and Fire Protection Average General Appearance of Properties Average Appeal to Market Average Barriers to Competitive Entry Average Public School System Average Price/Value Trend Average

Relevant vacancy rate indications are summarized as follows:

Vacancy Rate Indications Market Segment Vacancy Rates Kansas City Metro Area 4.00% Kansas City Metro Area Class A 6.00% Kansas City Metro Area Class B/C 2.40% Shawnee/Lenexa Submarket Area 3.70% Shawnee/Lenexa Submarket Area Class A 4.90% Shawnee/Lenexa Submarket Class B/C 2.10%

The Shawnee/Lenexa submarket has a lower vacancy rate than the Kansas City MSA overall and also lower for both Class A and Class B/C properties.

Based on the key metro and submarket area trends, construction outlook, and the performance of competing properties, IRR expects the mix of property fundamentals and economic conditions in the Lenexa and Kansas City metro area to have a positive impact on the submarket’s performance in the near‐term.

City of Lenexa Housing Study Multifamily Market Analysis 46

Demand Analysis

The strength of any market depends on supply and demand. The following analysis addresses the types of apartment properties and national and local investment trends. However, the primary concern is to discover the conditions affecting the subject’s specific market. Supply and demand in this submarket directly affects the subject’s value, as well as its potential exposure time and market period.

Primary and Secondary Market Area (PMA & SMA) The Primary Market Area for any form of rental real estate property is defined as the area from which a majority of the project’s tenants will be drawn. Market areas are shaped by physical barriers, psychological barriers, density, and other factors. In conducting this analysis, we have identified the subject’s primaryt marke area as the City of Lenexa. A map of the PMA is provided on the following page.

The primary and secondary market areas are shown to include areas of potential demand for the subject project. Additionally, we have concluded that an appropriate Secondary Market Area (SMA) for the subject includes all of Johnson County.

Primary Market Area Map

City of Lenexa Housing Study Multifamily Market Analysis 47

The Primary Market Area (PMA) is the City of Lenexa, which is highlighted and outlined in red in the above map.

Population ‐ Table 1 2016‐2021 IRR Area 2000 2010 2016 2021 Change % Annual % 2030 Projection Lenexa 41,153 48,190 52,374 55,164 5.33% 1.07% 60,186 Johnson County 451,087 544,179 584,915 613,959 4.97% 0.99% 666,238 Source: The Nielsen Company The City of Lenexa’s population is expected to increase at a slightly faster annual rate than that of Johnson County as a whole.

Number of Households ‐ Table 2 2016‐2021 IRR Area 2000 2010 2016 2021 Change % Annual % 2030 Projection Lenexa 15,939 19,304 21,013 22,188 5.59% 1.12% 24,303 Johnson County 174,570 212,882 229,794 241,801 5.23% 1.05% 397,892 Source: The Nielsen Company

It is important to note that the City of Lenexa’s number of households is expected to increase at a slightly faster annual rate than that of Johnson County as a whole.

Household Size ‐ Table 3 Lenexa Johnson County Kansas City MSA 2015 2.48 2.52 2.49 Source: The Nielsen Company Depth of the Primary Market Area We have also examined our concluded rental rates for the subject and the general loan guidelines which recommend that the cost of housing not exceed 33.33% of gross income.

City of Lenexa Housing Study Multifamily Market Analysis 48

Households by Household Income ‐ 2016 Lenexa ‐ Table 4 Income % Income Qualified Income Range Households % of Total Qualified Households Less than $15,000 1,040 4.9% 0% 0 $15,000 ‐ $24,999 1,539 7.3% 100% 1,539 $25,000 ‐ $34,999 1,729 8.2% 100% 1,729 $35,000 ‐ $49,999 2,628 12.5% 100% 2,628 $50,000 ‐ $74,999 3,623 17.2% 100% 3,623 $75,000 ‐ $99,999 2,675 12.7% 100% 2,675 $100,000 ‐ $149,999 4,064 19.3% 100% 4,064 $150,000 ‐ $249,999 2,790 13.3% 100% 2,790 $250,000 ‐ $499,999 753 3.6% 100% 753 Greater than $500,000 172 0.8% 100% 172 Total 21,013 100.0% 95.1% 19,973

Percentage of renter occupied households 36.88% Income Qualified Renter households 7,366 Percentage of owner occupied households 63.12% Owner Occupied Households 12,607 Source: The Nielsen Company

Owner Occupied vs. Renter Occupied ‐ Table 5 Area % Owner Occupied % Renter Occupied Total Lenexa 63.12% 36.88% 100% Johnson County 70.87% 29.13% 100% Kansas City MSA 66.44% 33.56% 100% Source: The Nielsen Company

Renter occupied housing in Lenexa from 2010‐2014 averaged 35.60%. The renter occupied housing in 2015 was 35.97% and it is presently 36.88%. Therefore, since 2010, the renter‐occupied housing has been increasing 0.4% annually. By 2030, the renter‐occupied housing percentage is projected to be 39.05%

City of Lenexa Housing Study Multifamily Market Analysis 49

Other Data ‐ Table 6 Lenexa Johnson County Kansas City MSA Average Household Size 2.48 2.52 2.49 Renter Occupied Housing 7,750 (36.88%) 66,936 (29.13%) 320,769 (33.56%) Owner Occupied Housing 13,263 (63.12%) 162,858 (70.87%) 635,179 (66.44%) Median HH Income $74,638 $77,378 $57,835 Median Year Built 1988 1986 1977 Meidan Owner‐Occupied Housing Value $248,685 $241,802 $169,178 Average Travel Time to Work 22 23 25 Percent College Graduates 52.85% 52.25% 33.14% Median Age 37.8 37.5 37.0 Source: Nielsen Churning Demand Analysis In order to evaluate demand, we will analyze demographics for the market area. Using Nielsen we have produced demographic reports for the general population in the market area. As previously discussed, the primary market area (PMA) is the City of Lenexa.

The total existing demand in the PMA is equal to the total unit demand minus the current vacant units and future increases/decreases in supply. This type of demand is referred to as pent‐up demand. The chart on the following page presents our residual demand/supply (pent‐up demand) calculations.

The number of units expected to be constructed in the next year within the PMA includes the projects that are currently under construction, as these will likely be finished and begin leasing in the next year. These projects are shown below:

Lenexa New Construction Competition 2016/2017 ‐ Table 7 Development No. of Units The District at City Center 175 Waterside Residences on Quivira 380 Fairway Villas at City Center 64 Prairie Creek Apartments, Phase 28 6 Total Under Construction 530

In order to evaluate demand, we will analyze demographics for the market area. Using Nielsen, we have produced demographic reports for the general population in the market area. As previously discussed, the subject’s primary market area (PMA) is concluded to be the City of Lenexa, as described in the market/submarket definition earlier in this section of the market study.

City of Lenexa Housing Study Multifamily Market Analysis 50

Rental Housing Demand Analysis ‐ Table 8 Multifamily Housing Demand 2021 2030 Comments

1PMA Household Estimate (Projection) 22,188 24,303 Table 2

2PMA Household Estimate (2016) 21,013 22,188 Table 2

3Estimated Household Change 1,175 2,115 Line 2 ‐ Line 1

4Percentage of New Income Qualified Households 95.1% 95.1% Table 4

5New Income Qualified Households 1,117 2,010 Line 3 x Line 4

6Percentage of Renter Households (Census Est.) 36.9% 39.1% Table 5

7New, Income Qualified Renter Households 412 785 Line 5 x Line 6

8Existing rDemand fo Vacant Units in PMA at subject's rent/class 41 79 10% of income qualified HH (Estimated 10% of current # of income qualified households)

9Total Demand for Presently Vacant and New Rental Units 453 864 Line 7 + Line 8

10 Total Competitive Supply 530 0Table 7 (New Construction units) 11 Existing Demand for Subject and Unannounced Units ‐77 864 Line Line9 ‐ 10

According to the above analysis, by 2021, there will be a slight and short lived imbalance of supply and demand of 77 units based solely on household growth. This is just 1% of the existing Lenexa supply and not overall significant considering the 530 units coming on line in the next couple of years. However, by 2030, there will be demand for an additional 864 units based solely on household growth.

External Demand Household growth is not always the best determinant of demand. Forecast household growth is one measure of demand that, as presented above reflects renter households and income qualification. As will be shown in the following exhibit, which includes an analysis of the University/Plaza, CBD, and South Johnson County submarkets, qualified household growth does not tell the entire story. It does not reflect the unaccommodated demand that we also call step up/external demand.

The example to follow shows the total demand by way of net absorption for all Class A new apartment properties in the three submarkets. First we calculated the demand as a function solely of qualified household growth. Then we identified the demand from other sources. This demand is external to the organic growth by way of qualified renter households that move to newer or better projects within the same submarket. We also consider the trend toward smaller household size, the relationship between wealth and income, and the dramatic growth in renter occupied households, none of which are adequately measured by the demographic projections broadly termed household growth.

City of Lenexa Housing Study Multifamily Market Analysis 51

External Demand ‐ Table 9 CBD excluding South Overland East Side Plaza/University Park 1Actual HH Growth 2000 ‐ 2010 1,598 ‐2,175 13,865 Information from Claritas from PMA; Total HH growth over 10 years 2% Renter Occupied (Current) 81% 68% 25% Current Claritas estimate 3% Income Qualified for New Apartments (Class A) 40% 35% 58% Current % of HH with incomes $25,000 ‐ $150,000 4HH Growth / Demand for Class A Multifamily 518 0 2,010 Line 1 x Line 2 x Line 3 5Net Absorption 2000 ‐ 2010 661 434 3,334 As per REIS 2000 ‐ 2010 6External Demand 143 434 1,324 Line 5 ‐ Line 4; Multifamily demand in excess of qualified HHh growth. Students, wealth vs. income, increases in income qualified % and renter occupied %, redevelopment and demolition

7% of Net Absorption from Other than Forecasted HH Growth 22% 100% 40% Line 6 / Line 5

This exhibit demonstration also recognizes that units are taken out of and put back into service and that are not necessarily new construction or renovation. The three submarkets display a positive demand component in excess of that measured strictly by qualified household growth projections.

Kansas City’s most prolific suburban submarket (South Overland Park), has seen 40% more demand than is indicated when only household growth is considered. In the CBD (excluding the east side), 22% of the demand has come not from increasing numbers of households, but from external demand. Also notable, the University/Plaza submarkets saw virtually all of its net demand, 434 units, during a period in which the number of qualified households actually declined. This demonstrates disconnect between demographic projections and the demand realized in growing or gentrifying submarkets.

For this analysis, we estimate that 25% of demand for multifamily units comes from the change in owner versus renter, actual vs projected household growth, and improving income levels will make actual demand exceed what simply is projected as compound annual growth in the number of households it will support.

City of Lenexa Housing Study Conclusions ‐ Multifamily 52

Total Targeted Rental Demand The total income‐eligible targeted renter demand is identified by the market analysis for a specific development’s primary market or submarket. This is demand on top of the projected and under‐ construction units. We have utilized comparable units which we define as units that are dedicated to the same household type as the proposed project.

Renter Demand ‐ Table 10 2021 2030 Source 1 External Demand (Additional 25%) 103 1,418 Table 9 2 Demand for Unannounced Units (77) 864 Table 8 3 Total Renter Demand 26 2,281 Line 1 + Line 2

The renter‐occupied households in Lenexa are 36.88% of the total households and the owner occupied households is 63.12%. By 2030, we project that the renter‐occupied households will increase to 39.1%.

60% of millennials surveyed by ULI indicated that they will likely move into a detached, single‐family home in the next five years. The redistribution of millennials will also provide an opportunity for the rise of newer suburbs. These newer suburbs will emphasize a transit‐oriented development that offers the work‐live‐play that has become standard for many urban environments.

City of Lenexa Housing Study Housing Affordability 53

Single Family Analysis

Housing Affordability According to a study by Zillow.com dated April 11, 2016, as of the end of 2015, “Americans making the nation’s median annual income ($55,589) and looking to buy the typical American home (valued at $183,600 as of December 2015) could expect to pay 15% of their income towards their monthly payment.e Th same American looking to rent a typical home should plan to set aside 30% of their income each month to pay their landlord. Worsening affordability in the areas that have statistically given parents the best opportunities to ensure a better future for their children is creating an additional barrier for lower‐income Americans.”

Continued deterioration in U.S. housing affordability – particularly at the low end of the market and for renters – is bringing to light a number of problems around income growth and social mobility that may have big implications for all Americans going forward.

Homeowners typically have a significant housing affordability advantage over renters due to low mortgage rates. The aftermath of the housing bubble which began in 2006 and continued through 2011 has exacerbated the affordability advantage. The Zillow Home Value index shown below demonstrates average home values. The loss of equity and market fear ensured that homeowners that lost their homes were almost certain to be renters at least for the short term.

City of Lenexa Housing Study Housing Affordability 54

Renters don’t take out mortgages, and so don’t benefit from today’s low mortgage rates. More importantly, rents themselves didn’t experience the huge drop during the recession that home values did, and instead have been rising steadily for the past several years. The average rent per month shown below is $1,380 whichy could easil support a $400,000 loan or a home of $500,000. Yet the loss of equity by many potential home buyers contributed to a decline in the number of sales and home values that lasted nearly six years.

The problem lately that is contributing to worsening housing affordability is that income growth hasn’t kept pace, especially for those Americans making the least. Below is a chart showing Income Growth by Tier for the Kansas City, MO‐KS MSA. Over the past twenty years, incomes for the lowest‐earning Americans have hardly grown at all, but housing costs have grown dramatically, particularly among entry and mid‐level homes.

City of Lenexa Housing Study Housing Affordability 55

Next we show income and home price characteristics of the Kansas City MSA.

Because rents have been rising steadily for years without much income growth for many Americans, the annual salary needed to get the share of income spent on rent back to historic levels in most markets would represent ea hug raise for most workers.

As shown in the table above, the median income in the Kansas City MSA is $58,715. To get his or her share of income back to historic levels in the Kansas City area, the median renter renting the median apartment would need to make $82,237 per year, a hypothetical raise of more than 40%.

In Lenexa, homebuyers can expect to pay 13% of their income on a mortgage versus a 26% share of their income on rent. This is another example of the affordability gap. We also show the affordability gap for several other cities within the MSA for comparison. In spite of recent trends there are demographic and sociological factors which suggest homeownership will not lose out significantly to the renter population over the next several years. Affordability is key.

City of Lenexa Housing Study Housing Affordability 56

Millennials and Single Family Homes According to a recent survey by ULI, six out of ten millennials expect to live in a detached single‐family home within five years, and 75% of millennials plan to get married, which might drive them out into the suburbs when they have children. Lenexa is will situated with access to good school districts, a well‐planned transportation infrastructure, and affordability as noted above. Thus we do not anticipate that changing trends will continue to support healthy single and multifamily sectors in Lenexa.

According to Multifamily Executive, “suburbs are trying to reinvent themselves by adding urban features and walkable downtown hubs that make the neighborhood feel like a city.” The redistribution of millennials will also provide an opportunity for the rise of newer suburbs. These newer suburbs will emphasize a transit‐oriented development that offers the work‐live‐play that has become standard for many urban environments.

The table and charts belowe show th total sales and corresponding sale price data for the years 2008 2015 in Lenexa, according to the Heartland Multiple Listing Service (MLS).

Single Family Statistics ‐ Table 11 Year Total Sales Sale Price Median Average Sale Price Sale Price Range 2008 511 $225,000 $269,021 $59,907‐$995,000 2009 460 $211,750 $250,963 $69,000‐$850,000 2010 412 $235,000 $265,752 $48,825‐$1,300,000 2011 460 $218,500 $250,614 $45,000‐$1,200,000 2012 524 $230,000 $257,269 $14,500‐$1,250,000 2013 697 $228,500 $264,970 $35,000‐$1,122,900 2014 671 $257,499 $297,884 $80,000‐$1,477,620 2015 718 $266,400 $299,197 $63,500‐$1,023,685 Average annual % Average annual % Average change change 557 2.63% 1.60%

City of Lenexa Housing Study Housing Affordability 57

Presently there are between 150 and 250 homes for sale in Lenexa which is a three to six month supply. Like most of the rest of Johnson County, there is a shortage of homes listed for sale. It is also important to note that the median and average sales prices finally reached pre‐recession levels in 2014 as demonstrate by the Heartland MLS exhibits in the following paragraphs. Also keep in mind that the transactions of occupied homes are neutral insofar as household growth.

Heartland MLS Median & Average Price $350,000 $300,000 $250,000 $200,000 Price $150,000 Sale Price Median $100,000 Average Sale Price $50,000 $‐ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year

Heartland MLS Units/Year 800 700 600 500 Units 400 300 200 Total Sales 100 0

Year

The median sales price has been increasing annually by approximately 4.3% since 2013 and the average sales price has been increasing annually 3.5% since 2011.

City of Lenexa Housing Study Single Family Housing Demand 58

Single Family Housing Demand We undertake much the same analysis for single family that we did for multifamily. Below is the demand analysis using household growth, income qualification for new homes, and owner vs. renter percentage. The single family demand table shown below is taken from the multifamily section and adjusted to shown only incomed qualifie households and also to show the owner percentage rather than the renter percentage.

Single Family Housing Demand Analysis ‐ Table 12 2021 2030 Comments

1PMA Household Estimate (Projection) 22,188 24,303 Table 2 ‐ Multifamily

2PMA Household Estimate (2016) 21,013 22,188 Table 2 ‐ Multifamily

3Estimated Household Change 1,175 2,115 Line 2 ‐ Line 1

4Percentage of New Income Qualified (>$50,000) Households 67.0% 67.0% Table 4 Multifamily

5New Income Qualified Households 787 1,417 Line 3 x Line 4

6Percentage of Owner Households (Census Est.) 63.1% 61.0% Table 5 ‐ Multifamily (1‐Renter %)

7Demand ‐ New Single Family Households 497 864 Line 5 x Line 6

We forecast demand for new single family households to be 497 units over the next five years, or approximately 100 homes per year. We expect the demand to slow somewhat from 2021 – 2030 which isd base upon the trend in land prices and infrastructure costs which will drive lot prices and finished home prices up. Developers at some point will begin to favor lower cost areas such as far western (Shawnee and DeSoto) and southwestern (Gardner and Edgerton) Johnson County.

City of Lenexa Housing Study Single Family Housing Demand 59

Below we include an analysis of single family building permits for the City of Lenexa. The 2002 – 2015 data is taken from the Kansas City Home Builders Association followed by our forecast of permits for 2016 – 2020.

Single Family Permits ‐ Table 13

Johnson Lenexa % Year Lenexa #% Change County #% inc. of Total

2002 343 3,450 9.94% 2003 350 2.04% 3,612 4.70% 9.69% 2004 379 8.29% 3,554 ‐1.61% 10.66% 2005 345 ‐8.97% 3,098 ‐12.83% 11.14% 2006 108 ‐68.70% 2,481 ‐19.92% 4.35% 2007 218 101.85% 1,860 ‐25.03% 11.72% 2008 79 ‐63.76% 937 ‐49.62% 8.43% 2009 38 ‐51.90% 657 ‐29.88% 5.78% 2010 63 65.79% 877 33.49% 7.18% 2011 85 34.92% 869 ‐0.91% 9.78% 2012 123 44.71% 1,273 46.49% 9.66% 2013 217 76.42% 1,677 31.74% 12.94% 2014 188 ‐13.36% 1,586 ‐5.43% 11.85% 2015 247 31.38% 1,610 1.51% 15.34%

Over the past 14 years Johnson County has averaged 1,967 single family permits per year and Lenexa has averaged 199 permits. Our forecast for new housing starts is included on the following page.

City of Lenexa Housing Study Single Family Housing Demand 60

Capture Rate We have developed our findings of housing demand at 8% of the Johnson County projected demand for the next five years and the 6% for the ten year period after that. This recognizes that land costs and infrastructure along with construction costs will make it difficult for builders to offer appropriately priced homes. If income growth continues, there may be additional downward pressure on the number of new homes to be brought to the market and the lower cost alternatives of Gardner, Edgerton, and DeSoto will see a higher capture rate. It is critical to note that this demand is in addition to the strong demand that allows Lenexa to see an average of nearly 600 existing home sales per year and annual price appreciation of the median home price of 2.63% based on Heartland MLS Statistics.

Projections ‐ Table 14 Lenexa Single Johnson Forecast Family County Single Capture Permits Family Permits Rate

2016 ‐ 2020 Total 787 9,836 8.00%

2021 ‐ 2030 Total 1,180 19,672 6.00%

Demand is projected to total 157 new homes per year for the next five years and 118 homes per year for the ten years after that.

City of Lenexa Housing Study Conclusions Single Family 61

Conclusions Single Family The median home price has increased an average of 2.63% per year since 2008. Presently the average price is $266,400 and it is projected to be nearly $310,000 by 2021. Presuming a more sustainable average annual percentage change of 1.5%, the price in 2030 should between $350,000 and $360,000. It would not be inconceivable to see a new home sell in the $1,800,000 range within the next five years and certainly over $2,000,000 in the ten years after that.

City of Lenexa Housing Study Certification 62

Certification

We certify that, to the best of our knowledge and belief:

1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the area that is the subject of this report and no personal interest with respect to the parties involved. 4. We have not performed any services regarding the subject of this report within the three‐year period immediately preceding acceptance of this assignment. 5. We have no bias with respect to the area that is the subject of this report or to the parties involved with this assignment. 6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as applicable state appraisal regulations. 9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 11. No one provided significant real property appraisal assistance to the person(s) signing this certification.

City of Lenexa Housing Study Certification 63

12. We are in compliance with the Competency Rule of USPAP. 13. As of the date of this report, Kenneth Jaggers, MAI, FRICS has completed the continuing education program for Designated Members of the Appraisal Institute.

Kenneth Jaggers, MAI, FRICS Melissa Lem Senior Managing Director Analyst Certified General Real Estate Appraiser KS Certificate # G‐969

City of Lenexa Housing Study Assumptions and Limiting Conditions 64

Assumptions and Limiting Conditions

This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report:

1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use. 2. There are no existing judgments or pending or threatened litigation that could affect the value of the property. 3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property. 4. The revenue stamps placed on any deed referenced herein to indicate the sale price are in correct relation to the actual dollar amount of the transaction. 5. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes. 6. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

This appraisal and any other work product related to this engagement are subject to the following limiting conditions, except as otherwise noted in the report:

1. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised. 2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events. 3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated. 4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies. 5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment. 6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal

City of Lenexa Housing Study Assumptions and Limiting Conditions 65

covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct. 7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal. 8. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical, electrical, structural and other engineering and environmental matters. Such considerations may also include determinations of compliance with zoning and other federal, state, and local laws, regulations and codes. 9. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context. 10. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the persons signing the report. 11. Information, estimates and opinions contained in the report and obtained from third‐party sources are assumed to be reliable and have nnot bee independently verified. 12. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating results. 13. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at the time these leases expire or otherwise terminate. 14. Unless otherwise stated in the report, no consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered. 15. The current purchasing power of the dollar is the basis for the values stated in the appraisal; we have assumed that no extreme fluctuations in economic cycles will occur. 16. The values found herein are subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions. 17. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic

City of Lenexa Housing Study Assumptions and Limiting Conditions 66

conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material. 18. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of the property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA issues, and render no opinion regarding compliance of the subject with ADA regulations. Inasmuch as compliance matches each owner’s financial ability with the cost to cure the non‐ conforming physical characteristics of a property, a specific study of both the owner’s financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance. 19. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk. 20. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No representations or warranties are made regarding the environmental condition of the subject property. Integra Realty Resources – Kansas City, Integra Realty Resources, Inc., Integra Strategic Ventures, Inc. and/or any of their respective officers, owners, managers, directors, agents, subcontractors or employees (the “Integra Parties”), shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property. 21. The persons signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non‐ existent or minimal. 22. Integra Realty Resources – Kansas City is not a building or environmental inspector. Integra Kansas City does not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended. 23. The appraisal report and value conclusions for an appraisal assume the satisfactory completion of construction, repairs or alterations in a workmanlike manner. 24. It is expressly acknowledged that in any action which may be brought against any of the Integra Parties, arising out of, relating to, or in any way pertaining to this engagement, the

City of Lenexa Housing Study Assumptions and Limiting Conditions 67

appraisal reports, and/or any other related work product, the Integra Parties shall not be responsible or liable for any incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with intentional misconduct. It is further acknowledged that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the appraisal report unless the appraisal was fraudulent or prepared with intentional misconduct. Finally, it is acknowledged that the fees charged herein are in reliance upon the foregoing limitations of liability. 25. Integra Realty Resources – Kansas City, an independently downed an operated company, has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided. Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable). 26. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer‐seller decision criteria in the current market, and research conducted by third parties, and such data are not always completely reliable. The Integra Parties are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, we do not representt tha these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this property.

City of Lenexa Housing Study Addenda

Addendum A Appraiser Qualifications

City of Lenexa Housing Study Integra Realty Resources Kenneth Jaggers, MAI, FRICS Kansas City Experience 1901 West 47th Place Suite 300 Mr. Jaggers, Senior Managing Director, has been with Integra Realty Resources – Kansas Westwood, KS 66205 City, since May 1993. He started his career in commercial real estate in 1987 as an investment officer with a subsidiary of Metropolitan Life in Overland Park, Kansas then in T 913.748.4704 the Washington D.C., and Boston, Massachusetts’s offices. In 1991, Mr. Jaggers joined F 913.236.4307 BankBoston and supervised field and review appraisers for two years. Duties included quality control over acquired banks in Maine and Vermont. As Managing Director since 2004 Mr. Jaggers has overseen all appraisal and consulting activity conducted through irr.com the Kansas City office of Integra.

Since that time and while at Integra he has completed appraisals on commercial properties of all types, primarily for institutional investors and for litigation. Unique properties include the 1,140,000 SF IRS Processing Facility and the 600,000 SF Overland Park Trade Center exhibition hall. He has appraised the Corporate Woods Business Park in Overland Park, Kansas, which is the largest single investor owned real estate asset in the Kansas City area. Mr. Jaggers' areas of specialty include development consulting, highest and best use feasibility analysis, and disposition consulting.

Mr. Jaggers also serves as Director for our St. Louis and Chicago offices. Significant appraisal assignments include the Bank of America Plaza office tower – 30 stories with >850,000 SF; One AT&T Center office tower – 42 stories with nearly 1.5 million SF; the 13 story Blu City Spaces condominium; and Gateway Tower office high-rise.

Portfolios managed include >800 office and retail properties for an investment bank, 34 apartment properties for a pension advisor, 19 office and flex industrial properties for a pension advisor, as well as numerous multiple property projects for eminent domain. Professional Activities & Affiliations Westwood City Planning Commission 2000 - 2015 UMKC Bloch School - Lewis White Real Estate Center: Lecturer and Case Studies Judge Blue Springs EDC - Market Trends: Lecturer 2006-2010 Real Estate Trends and Investment Criteria Annual Economic Forecasting Seminar: Organizer and Presenter 2003 - 2015 Appraisal Institute, Member (MAI) President - Kansas City Chapter Appraisal Institute 2010 Royal Institute of Chartered Surveyors, Fellow (FRICS) Fellow of the Royal Institution of Chartered Surveyors Licenses Missouri, Certified General Real Estate Appraiser, RA 003190, Expires June 2018 Kansas, Certified General Real Property Appraiser, G-969, Expires June 2017 Iowa, Certified General Real Property Appraiser, CG02446, Expires June 2018 Nebraska, Certified General Real Estate Appraiser, CG970204, Expires December 2016 Illinois, Certified General Real Estate Appraiser, 553.002180, Expires September 2017 Arkansas, Certified General Real Estate Appraiser, CG 3889, Expires June 2017 South Dakota, State Certified General Appraiser, 1350CG, Expires September 2016 Education

[email protected] - 913.748.4704 x Integra Realty Resources Kenneth Jaggers, MAI, FRICS Kansas City Education (Cont'd) 1901 West 47th Place Suite 300 Bachelor of Arts (1983) Chadron State College, Chadron, Nebraska Westwood, KS 66205 Economics and Marketing, Minor in Business Administration T 913.748.4704 Mr. Jaggers has successfully completed numerous Appraisal Institute courses and F 913.236.4307 attended seminars in keeping current, the educational and professional work product requirements of the Appraisal Institute and states in which he is licensed. irr.com Completed 3rd Party Multifamily Accelerated Processing (MAP), September 18, 2002. IRR Certified Reviewer Seminar

Qualified Before Courts & Administrative Bodies Circuit Court of Jackson County, Missouri Kansas District Court, 7th Judicial District State Tax Commission of Missouri Kansas Board of Tax Appeals

Experience with Municipalities/Administrative Bodies: Mr. Jaggers has provided expert testimony to a number of taxing authorities, city councils, boards of planning and zoning, commissioners’ hearings, and bodies providing public finance. His expertise is sought by the administrative bodies and by the private developers.

[email protected] - 913.748.4704 x

Integra Realty Resources Melissa Lem Kansas City Experience 1901 West 47th Place, Suite 300 Melissa Lem, Analyst, joined Integra Realty Resources full time in July 2012. Ms. Lem’s Westwood, KS 66205 appraisal career began as an intern at Integra in the summer of 2011. Ms. Lem has experience in the valuation analysis of retail, land, multi-family, industrial, and office T 913-236-4700 properties. Valuation assignments have been prepared on proposed, partially completed, F 913-236-4307 and existing structures. Consulting assignments include fair market rent studies and feasibility studies. Ms. Lem attended the University of Kansas for both her undergraduate and graduate degrees. Ms. Lem is active in BOTAR, the American Royal, Operation irr.com Breakthrough, and The Children’s Place.

Licenses Missouri, State Licensed Trainee, 2015002137, Expires January 2019 Education University of Kansas- Lawrence, Kansas B.S. Accounting, May 2011 University of Kansas- Lawrence, KS Master of Accountancy, May 2012

Professional Training: Appraisal Principles Appraisal Procedures General Appraiser Market Analysis & Highest and Best Use National Uniform Standards of Professional Appraisal Practice (USPAP) Real Estate Finance Statistics and Valuation Modeling

[email protected] - 913-236-4726 Clients served by Integra Realty Resources – Kansas/Missouri/Illinois, Inc.

INVESTMENT BANKS, BANKS, AT&T Investment Management Menorah Medical Center Department of the Navy MORTGAGE COMPANIES, etc. Block & Company Realtors, Inc. Fenner & Smith, Inc. Economic Development Corp. AIMCO Block Real Estate Services, LLC Michelin Farm Credit Services Allen Bank & Trust Briarcliff Development North KC Memorial Hospital FDIC Allied lrish Bank CBRE Olathe Medical Center FHLMC American Real Estate Group Cerner Redevelopment Olathe School District FNMA Amerisphere Multifamily Finance CIII Asset Management Price Waterhouse Coopers Franklin County Commissioners Arbor National Colliers International PGP Valuation, Inc. GSA Arvest Bank Copaken Brooks Property Tax Representatives Internal Revenue Service Associated Bank Coulson & Company Puritan Bennett Corporation Jefferson County, Missouri Bank of America Dean Realty Research Medical Center Johnson County District Court Bank of Belton Fishman & Company Saint Joseph Health Center Johnson County Housing Services Bank of Blue Valley Highwoods Realty L.P. Sanofi-Aventis Johnson County Parks & Bank of Jacomo Jones Lang LaSalle St. Luke’s Hospital of KC Recreation Bank Midwest Joseph C Sansone Company Shawnee Mission USD 512 Johnson County Substance Bank of Odessa Karbank Real Estate Company Shell OPUS Abuse Services Bank of Prairie Village Kessinger Hunter Sprint KCCID Bank of the West Lane 4 Standard Havens, Inc. KC Port Authority Barclays Capital Lioness Realty Stern Brothers & Company K.C. Redevelopment Authority BMO Harris Bank LNR Partners Trinity Lutheran Hospital KCMO School District Bayview Financial Management Associates United Telecommunications, Inc. Kansas Dept. of Transportation Bremer Bank Maxicare Utilicorp Kansas Public Employees Capital City Bank MC Lioness Realty Group Yellow Freight Systems, Inc. KHRC Capital Source Bank North Star Development LCRA Centerline Capital Group Price Brothers MHDC/State of Missouri Central Bank of Kansas City Property Company of America INSURANCE COMPANIES/ METRA Citibank Quadrangle, LLC PENSION FUND ADVISORS Metropolitan St. Louis Sewer District Citizens Bank, N.A. R.H. Sailors & Co. Aetna Insurance Mosers Citizens Bank & Trust Realvest, Inc. Allstate Insurance Co. Rockford Housing Authority Clay County Savings & Loan RED Development American Family Insurance PIEA Commerce Bank, N.A. Retirement Management Co. American Fidelity Assurance RTC Cornerstone Bank RH Johnson Company CalPERS St. Charles County Government Country Club Bank RHW Management Central Life Insurance St. Louis County Economic Council Credit Suisse Stephens & Company Commercial Union Insurance Unified Government of Wyandotte County / Credit Union of America Sulgrave Development Cornerstone Real Estate Advisors Kansas City, Kansas CS First Boston Summit Eaton Vance Managed Investments University of Missouri Draper & Kramer Superior Bowen Equitable United States Postal Service Enterprise Bank Tower Properties KC Life Insurance Company USDOJ First Bank of Missouri Trammell Crow LaSalle Investment Management First National Bank of Chicago Varnum/Armstrong/Deeter Metropolitan Life First National Bank of Kansas Zimmer Companies Mutual of New York LAW FIRMS First National Bank of Olathe New York Life Armstrong Teasdale, LLP First Nationwide Bank Northwestern Mutual Life Bryan Cave, LLP Gershman Mortgage CORPORATIONS PM Realty Advisors Buchalter, Nemer GMAC Commercial Mortgage Allstate Appraisal, L.P. Prudential Financial Colliers Lanard & Axilbund Goldman Sachs AMC State Farm Ensz & & Jester, PC Grandbridge Ameren STRS of Ohio Orrick & Associates, LLP Great Southern American Airlines TIAA-CREF Humphrey, Farrington, & McClain PC Harris Bank Anheuser Busch Co., Inc. Transamerica Life Insurance Annuity Company Husch Blackwell, LLP Hillcrest Bank Ashgrove Cement Travelers Insurance King Hershey, PC Imperial Capital Bank Athena Corporation Travelers Pension Fund Kirkland Woods & Martinsen, PC Industrial State Bank Aventis Union Labor Life Insurance Lathrop & Gage, LLP Intrust Bank B.C. Christopher Securities Urdang & Associates Levy & Craig JP Morgan Chase Baird, Kurtz & Dodson US Realty Advisors Lewis, Rice & Fingersh, LC James B. Nutter Company Black & Veatch USF&G Lowe, Farmer, Bacon & Roe Johnson County Credit Union BP Products Zurich of American Insurance Mayer Brown LLP KeyBank Burns & McDonnell McAnany, Van Cleave & Phillips, PA Looking Glass LTD Butler Manufacturing Co. McDermott Will & Emery LLP Mission Bank Cerner Corporation STATE & FEDERAL McDowell, Rice , Smith & Buchanan, PC Missouri Bank & Trust Custom Color GOVERNMENT Hubbard, Ruzicka, Kreamer & North American Savings Deloite & Touche LLP City of Blue Springs, Missouri Kincaid, LC Old National Bank Dodson Group City of Branson, Missouri Krigel & Krigel, PC Peoples Bank DST Systems, Inc. City of DeSoto, Kansas Payne & Jones, Chtd. PNC Bank Employee Relocation Council City of Fulton, Missouri Polsinelli Shughart PC Prudential Mortgage Entertainment Properties Trust City of Gardner, Kansas Sanders Warren & Russell, LLP Pulaski Bank First Industrial Realty Trust City of Gladstone, Missouri Schlagel Kinzer LLC The Private Bank Ford Motor Company City of Grandview, Missouri Sherman, Taff Bangert, et al Security Bank GE Capital City of Harrisonville, Missouri Shook, Hardy & Bacon, LLP Security Financial General Motors Corporation City of Independence, Missouri Seigfreid, Bingham, Levy, Selzer & Standard Bank & Trust George K. Baum & Company City of Kansas City, Kansas Gee, PC Sun America Greystone Graphics City of Kansas City, Missouri SNR Denton US LLP UMB Bank Hall Foundation City of Leavenworth, Kansas Sonnenschein, Nath & Rosenthal, LLP Union Bank Hallmark Cards, Inc. City of Leawood, Kansas Spencer Fane Britt & Browne, LLP US Bank Health Midwest City of Lee’s Summit, Missouri Stinson Morrison Hecker, LLP Valley View State Bank Hoescht Marion Roussel City of Lenexa, Kansas Wallace, Sanders, et al Wells Fargo Hunt-Midwest City of Liberty, Missouri White Goss Bowers March Schulte & Inland Investments City of Manhattan, Kansas Weisenfels J.C. Penney Company City of Merriam, Kansas Winston & Stawn LLP DEVELOPERS – J.E. Dunn Construction Co. City of Mission, Kansas Wyrsch, Hobbs & Mirakian, PC RESIDENTIAL REALTORS John Deere & Company City of Olathe, Kansas Coldwell Banker Real Estate Meara & Company City of Overland Park, Kansas May 25, 2012 Crown Realty, Inc. KPMG, LLP City of Prairie Village, Kansas Eugene D. Brown Realtors KU Medical Center City of Raytown, Missouri Reece & Nichols Kansas City Power & Light City of Shawnee, Kansas Prudential Kansas City Southern Industries City of Springfield, Missouri RE/MAX Realtors KCP&L City of Topeka, Kansas Kraft Foods City of Westwood, Kansas Lab One County Commissioners – DEVELOPERS – LNR Partners Johnson County, Kansas COMMERCIAL REALTORS The Markey Company CRIMI MAE Amresco Advisors Mark One Electric Company Department of HUD Integra Realty Resources, Inc. Corporate Profile

Integra Realty Resources, Inc. offers the most comprehensive property valuation and counseling coverage in North America with 58 independently owned and operated offices located throughout the United States and the Caribbean. Integra was created for the purpose of combining the intimate knowledge of well‐established local firms with the powerful resourcesd an capabilities of a national company. Integra offers integrated technology, national data and information systems, as well as standardized valuation models and report formats for ease of client review and analysis. Integra’s local offices have an average of 25 years of service in the local market, and virtually all are headed by a Senior Managing Director who is an MAI member of the Appraisal Institute.

A listing of IRR’s local offices and their Senior Managing Directors follows:

ATLANTA, GA ‐ Sherry L. Watkins., MAI, FRICS MIAMI/PALM BEACH, FL‐ Anthony M. Graziano, MAI, CRE, FRICS AUSTIN, TX ‐ Randy A. Williams, MAI, SR/WA, FRICS MINNEAPOLIS, MN ‐ Michael F. Amundson, MAI, CCIM, FRICS BALTIMORE, MD ‐ G. Edward Kerr, MAI, MRICS NAPLES, FL ‐ Carlton J. Lloyd, MAI, FRICS BIRMINGHAM, AL ‐ Rusty Rich, MAI, MRICS NASHVILLE, TN ‐ R. Paul Perutelli, MAI, SRA, FRICS BOISE, ID ‐ Bradford T. Knipe, MAI, ARA, CCIM, CRE, FRICS NEW JERSEY COASTAL ‐ Halvor J. Egeland, MAI BOSTON, MA ‐ David L. Cary, Jr., MAI, MRICS NEW JERSEY NORTHERN ‐ Matthew S. Krauser, CRE, FRICS CHARLESTON, SC ‐ Cleveland “Bud” Wright, .,Jr MAI NEW YORK, NY ‐ Raymond T. Cirz, MAI, CRE, FRICS CHARLOTTE, NC ‐ Fitzhugh L. Stout, MAI, CRE, FRICS ORANGE COUNTY, CA ‐ Steve Calandra, MAI CHICAGO, IL ‐ Eric L. Enloe, MAI, FRICS ORLANDO, FL ‐ Christopher Starkey, MAI, MRICS CINCINNATI/DAYTON, OH ‐ Gary S. Wright, MAI, FRICS, SRA PHILADELPHIA, PA ‐ Joseph D. Pasquarella, MAI, CRE, FRICS CLEVELAND, OH ‐ Douglas P. Sloan, MAI PHOENIX, AZ ‐ Walter ‘Tres’ Winius III, MAI, FRICS COLUMBIA, SC ‐ Michael B. Dodds, MAI, CCIM PITTSBURGH, PA ‐ Paul D. Griffith, MAI, CRE, FRICS COLUMBUS, OH ‐ Bruce A. Daubner, MAI, FRICS PORTLAND, OR ‐ Brian A. Glanville, MAI, CRE, FRICS DALLAS, TX ‐ Mark R. Lamb, MAI,A, FRICS CP PROVIDENCE, RI ‐ Gerard H. McDonough, MAI, FRICS DENVER, CO ‐ Brad A. Weiman, MAI, FRICS RALEIGH, NC ‐ Chris R. Morris, MAI, FRICS DETROIT, MI ‐ Anthony Sanna, MAI, CRE, FRICS RICHMOND, VA ‐ Kenneth L. Brown, MAI, CCIM, FRICS FORT WORTH, TX ‐ Gregory B. Cook, SR/WA SACRAMENTO, CA ‐ Scott Beebe, MAI, FRICS GREENSBORO, NC ‐ Nancy Tritt, MAI, SRA, FRICS ST. LOUIS, MO ‐ P. Ryan McDonald, MAI, FRICS HARTFORD, CT ‐ Mark F. Bates, MAI, CRE, FRICS SALT LAKE CITY, UT ‐ Darrin W. Liddell, MAI, FRICS, CCIM HOUSTON, TX ‐ David R. Dominy, MAI, CRE, FRICS SAN DIEGO, CA ‐ Jeff A. Greenwald, MAI, SRA, FRICS INDIANAPOLIS, IN ‐ Michael C. Lady, MAI, SRA, CCIM, FRICS SAN FRANCISCO, CA ‐ Jan Kleczewski, MAI, FRICS JACKSON, MS ‐ John R. Praytor, MAI SARASOTA, FL ‐ Carlton J. Lloyd, MAI, FRICS JACKSONVILLE, FL ‐ Robert Crenshaw, MAI, FRICS SEATTLE, WA ‐ Allen N. Safer, MAI, MRICS KANSAS CITY, MO/KS ‐ Kenneth Jaggers, MAI, FRICS SYRACUSE, NY ‐ William J. Kimball, MAI, FRICS LAS VEGAS, NV ‐ Charles E. Jack IV, MAI TAMPA, FL ‐ Bradford L. Johnson, MAI, MRICS LOS ANGELES, CA ‐ John G. Ellis, MAI, CRE, FRICS TULSA, OK ‐ Owen S. Ard, MAI LOS ANGELES, CA ‐ Matthew J. Swanson, MAI WASHINGTON, DC ‐ Patrick C. Kerr, MAI, FRICS, SRA LOUISVILLE, KY ‐ Stacey Nicholas, MAI, MRICS WILMINGTON, DE ‐ Douglas L. Nickel, MAI, FRICS MEMPHIS, TN ‐ J. Walter Allen, MAI, FRICS CARIBBEAN/CAYMAN ISLANDS ‐ James Andrews, MAI, FRICS

Corporate Office Eleven Times Square, 640 Eighth Avenue, 15th Floor, Suite A, New York, New York 10036 Telephone: (212) 255‐7858; Fax: (646) 424‐1869; E‐mail [email protected] Website: www.irr.com

Addenda

Addendum B Definitions

City of Lenexa Housing Study Addenda

Definitions

The source of the following definitions is the Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), unless otherwise noted.

Amenity A tangible or intangible benefit of real property that enhances its attractiveness or increases the satisfaction of the user. Natural amenities may include a pleasant location near water or a scenic view of the surrounding area; man‐made amenities include swimming pools, tennis courts, community buildings, and other recreational facilities.

As Is Market Value The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date.

Class of Apartment Property For the purposes of comparison, apartment properties are grouped into three classes. These classes represent a subjective quality rating of buildings, which indicates the competitive ability of each building to attract similar types of tenants. Combinations of factors such as rent, building finishes, system standards and efficiency, building amenities, location/accessibility, and market perception are used as relative measures.

Class A apartment properties are the most prestigious properties competing for the premier apartment tenants, with rents above average for the area. Buildings have high‐quality standard finishes, architectural appeal, state‐of‐the‐art systems, exceptional accessibility, and a definite market presence.

Class B apartment properties compete for a wide range of users, with rents in the average range for the area. Class B buildings do not compete with Class A buildings at the same price. Building finishes are fair to good for the area, and systems are adequate.

Class C apartment properties compete for tenants requiring functional space at rents below the average for the area. Class C buildings are generally older, and are lower in quality and condition.

(Adapted from “Class of Office Building” in The Dictionary of Real Estate Appraisal.)

Deferred Maintenance Needed repairs or replacements of item that should have taken place during the course of normal maintenance.

Depreciation A loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date.

City of Lenexa Housing Study Addenda

Discounted Cash Flow (DCF) Analysis The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate.

Disposition Value The most probable price that a specified interest in real property should bring under the following conditions:

1. Consummation of a sale within a future exposure time specified by the client. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. An adequate marketing effort will be made during the exposure time specified by the client. 8. Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

This definition can also be modified to provide for valuation with specified financing terms.

Effective Date of Appraisal The date on which the analyses, opinions, and advice in an appraisal, review, or consulting service apply.

Entrepreneurial Profit 1. A market‐derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur’s compensation for the risk and expertise associated with development. An entrepreneur is motivated by the prospect of future value enhancement (i.e., the entrepreneurial incentive). An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses. 2. In economics, the actual return on successful management practices, often identified with coordination, the fourth factor of production following land, labor, and capital; also called entrepreneurial return or entrepreneurial reward.

City of Lenexa Housing Study Addenda

Excess Land; Surplus Land Excess Land: Land that is not needed to serve or support the existing improvement. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land may have the potential to be sold separately and is valued independently.

Surplus Land: Land that is not currently needed to support the existing improvement but cannot be separated from the property and sold off. Surplus land does not have an independent highest and best use and may or may not contribute value to the improved parcel.

Exposure Time 1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

Floor Area Ratio (FAR) The relationship between the above‐ground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area.

Gross Building Area (GBA) Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above‐grade area. This includes mezzanines and basements if and when typically included in the region.

Highest and Best Use The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property – specific with respect to the user and timing of the use – that is adequately supported and results in the highest present value.

Lease A contract in which rights to use and occupy land or structures are transferred by the owner to another for a specified period of time in return for a specified rent.

Leased Fee Interest A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord‐tenant relationship (i.e, a lease).

City of Lenexa Housing Study Addenda

Leasehold Interest The tenant’s possessory interest created by a lease.

Liquidation Value The most probable price that a specified interest in real property should bring under the following conditions:

1. Consummation of a sale within a short time period. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under extreme compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. A normal marketing effort is not possible due to the brief exposure time. 8. Payment will be made in cash in U.S. dollars, or in terms of financial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

This definition can also be modified to provide for valuation with specified financing terms.

Marketing Time An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal.

Market Rent The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements.

Market Value The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

 buyer and seller are typically motivated;  both parties are well informed or well advised, and acting in what they consider their own best interests;

City of Lenexa Housing Study Addenda

 a reasonable time is allowed for exposure in the open market;  payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and  the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472)

Multifamily Property Type Residential structure containing five or more dwelling units with common areas and facilities. (Source: Appraisal Institute Commercial Data Standards and Glossary of Terms, Chicago, Illinois, 2004 [Appraisal Institute])

Multifamily Classifications Garden/Low Rise Apartments: A multifamily development of two‐ or three‐story, walk‐up structures built in a garden‐like setting; customarily a suburban or rural‐urban fringe development. (Source: Appraisal Institute)

Mid/High‐Rise Apartment Building: A multifamily building with four or more stories, typically elevator‐served. (Source: Appraisal Institute)

Prospective Opinion of Value A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long‐term occupancy.

Rentable Floor Area (RFA) Rentable area shall be computed by measuring inside finish of permanent outer building walls or from the glass line where at least 50% of the outer building wall is glass. Rentable area shall also include all area within outside walls less stairs, elevator shafts, flues, pipe shafts, vertical ducts, air conditioning rooms, fan rooms, janitor closets, electrical closets, balconies and such other rooms not actually available to the tenant for his furnishings and personnel and their enclosing walls. No deductions shall be made for columns and projections unnecessary to the building. (Source: Income/Expense Analysis, 2013 Edition – Conventional Apartments, Institute of Real Estate Management, Chicago, Illinois)

Replacement Cost The estimated cost to construct, at current prices as of the effective appraisal date, a substitute for the building being appraised, using modern materials and current standards, design and layout.

Reproduction Cost The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards,

City of Lenexa Housing Study Addenda

design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building.

Room Count A unit of comparison used primarily in residential appraisal. No national standard exists on what constitutes a room. The generally accepted method is to consider as separate rooms only those rooms that are effectively divided and to exclude bathrooms.

Stabilized Income Income at that point in time when abnormalities in supply and demand or any additional transitory conditions cease to exist and the existing conditions are those expected to continue over the economic life of the property; projected income that is subject to change, but has been adjusted to reflect an equivalent, stable annual income.

City of Lenexa Housing Study Addenda

Addendum C Nielsen Data

City of Lenexa Housing Study Pop-Facts Demographics

Data Version: 2016 Apr (Quick Market Insights)

Report Generation Method: Single

Combined Statistical Area (CSA) KC MSA; County - Johnson Analysis Area: County; Census Place - Lenexa

Reporting Detail: As Selected

Pop-Facts Demographic Snapshot; Pop-Facts Census Demographic Overview; Pop-Facts Population Quick Facts; Pop- Facts Household Quick Facts; Pop-Facts Demographic Quick Report Sections: Facts

Include Map: No

Include Charts: No

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % Population 2021 Projection 2,510,654 613,959 55,164 2016 Estimate 2,436,744 584,915 52,374 2010 Census 2,343,008 544,179 48,190 2000 Census 2,123,375 451,087 41,153 Growth 2016 - 2021 3.03% 4.97% 5.33% Growth 2010 - 2016 4.00% 7.49% 8.68% Growth 2000 - 2010 10.34% 20.64% 17.10%

Households 2021 Projection 986,827 241,801 22,188 2016 Estimate 955,948 229,794 21,013 2010 Census 916,949 212,882 19,304 2000 Census 826,460 174,570 15,939 Growth 2016 - 2021 3.23% 5.23% 5.59% Growth 2010 - 2016 4.25% 7.94% 8.85% Growth 2000 - 2010 10.95% 21.95% 21.11%

Family Households 2021 Projection 647,499 165,932 15,098 2016 Estimate 626,429 157,348 14,272 2010 Census 599,840 145,262 13,043 2000 Census 551,194 121,620 10,774 Growth 2016 - 2021 3.36% 5.46% 5.79% Growth 2010 - 2016 4.43% 8.32% 9.42% Growth 2000 - 2010 8.83% 19.44% 21.06%

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % 2016 Est. Population by Single- 2,436,744 584,915 52,374 Classification Race White Alone 1,915,727 78.62% 492,709 84.24% 43,187 82.46% Black or African American Alone 280,293 11.50% 29,503 5.04% 3,691 7.05% Amer. Indian and Alaska Native Alone 15,123 0.62% 2,240 0.38% 184 0.35% Asian Alone 64,322 2.64% 27,475 4.70% 2,042 3.90% Native Hawaiian and Other Pac. Isl. Alone 4,406 0.18% 231 0.04% 32 0.06% Some Other Race Alone 80,537 3.31% 15,731 2.69% 1,677 3.20% Two or More Races 76,336 3.13% 17,026 2.91% 1,561 2.98%

2016 Est. Population by Hispanic or 2,436,744 584,915 52,374 Latino Origin Not Hispanic or Latino 2,231,229 91.57% 540,322 92.38% 48,302 92.23% Hispanic or Latino 205,515 8.43% 44,593 7.62% 4,072 7.77% Mexican 158,487 77.12% 33,231 74.52% 2,970 72.94% Puerto Rican 7,477 3.64% 1,589 3.56% 145 3.56% Cuban 3,824 1.86% 772 1.73% 75 1.84% All Other Hispanic or Latino 35,727 17.38% 9,001 20.18% 882 21.66%

2016 Est. Hisp. or Latino Pop by Single- 205,515 44,593 4,072 Class. Race White Alone 102,889 50.06% 25,197 56.50% 2,139 52.53% Black or African American Alone 4,872 2.37% 696 1.56% 68 1.67% American Indian and Alaska Native Alone 2,836 1.38% 429 0.96% 39 0.96% Asian Alone 631 0.31% 166 0.37% 6 0.15% Native Hawaiian and Other Pacific Islander 331 0.16% 46 0.10% 5 0.12% Alone Some Other Race Alone 77,613 37.77% 14,807 33.20% 1,509 37.06% Two or More Races 16,343 7.95% 3,252 7.29% 306 7.51%

2016 Est. Pop by Race, Asian Alone, by 64,322 27,475 2,042 Category Chinese, except Taiwanese 12,273 19.08% 4,805 17.49% 299 14.64% Filipino 6,168 9.59% 1,756 6.39% 6 0.29% Japanese 1,734 2.70% 453 1.65% 49 2.40% Asian Indian 15,337 23.84% 11,334 41.25% 830 40.65% Korean 5,440 8.46% 2,161 7.87% 390 19.10% Vietnamese 8,941 13.90% 2,077 7.56% 90 4.41% Cambodian 1,023 1.59% 136 0.49% 1 0.05% Hmong 1,585 2.46% 80 0.29% 0 0.00% Laotian 2,776 4.32% 1,709 6.22% 296 14.50% Thai 965 1.50% 284 1.03% 14 0.69% 8,080 12.56% 2,680 9.75% 67 3.28% All Other Asian Races Including 2+ Category

2016 Est. Population by Ancestry 2,436,744 584,915 52,374 Arab 8,108 0.33% 3,465 0.59% 471 0.90% Czech 7,554 0.31% 3,139 0.54% 401 0.77% Danish 6,675 0.27% 2,116 0.36% 145 0.28% Dutch 18,849 0.77% 4,521 0.77% 322 0.61% English 166,037 6.81% 48,732 8.33% 4,486 8.57% French (except Basque) 32,430 1.33% 9,514 1.63% 657 1.25% French Canadian 5,059 0.21% 1,480 0.25% 181 0.35% German 415,874 17.07% 121,324 20.74% 11,214 21.41% Greek 4,376 0.18% 1,547 0.26% 178 0.34% Hungarian 2,766 0.11% 1,215 0.21% 70 0.13% Irish 189,202 7.76% 48,751 8.33% 4,355 8.32% Italian 60,249 2.47% 19,101 3.27% 1,507 2.88% Lithuanian 1,222 0.05% 402 0.07% 24 0.05% United States or American 187,846 7.71% 30,629 5.24% 2,505 4.78% Norwegian 18,540 0.76% 5,583 0.95% 516 0.99% Polish 25,718 1.06% 8,901 1.52% 776 1.48% Portuguese 1,355 0.06% 511 0.09% 132 0.25% Russian 7,180 0.29% 3,196 0.55% 225 0.43% Scottish 29,774 1.22% 8,257 1.41% 608 1.16% Scotch-Irish 21,390 0.88% 5,728 0.98% 606 1.16% Slovak 861 0.04% 320 0.05% 62 0.12% Subsaharan African 23,127 0.95% 4,598 0.79% 561 1.07% Swedish 26,322 1.08% 9,273 1.59% 782 1.49% Swiss 6,045 0.25% 1,660 0.28% 112 0.21% Ukrainian 2,693 0.11% 1,142 0.20% 57 0.11% Pop-Facts Demographic Snapshot

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % Welsh 12,242 0.50% 3,816 0.65% 416 0.79% West Indian (except Hisp. groups) 3,086 0.13% 308 0.05% 46 0.09% Other ancestries 724,500 29.73% 155,122 26.52% 13,580 25.93% Ancestry Unclassified 427,664 17.55% 80,564 13.77% 7,379 14.09%

2016 Est. Pop Age 5+ by Language 2,275,710 545,823 48,878 Spoken At Home Speak Only English at Home 2,073,054 91.09% 486,203 89.08% 43,828 89.67% Speak Asian/Pac. Isl. Lang. at Home 37,869 1.66% 13,989 2.56% 761 1.56% Speak IndoEuropean Language at Home 31,844 1.40% 13,345 2.44% 1,032 2.11% Speak Spanish at Home 115,347 5.07% 26,354 4.83% 2,499 5.11% Speak Other Language at Home 17,596 0.77% 5,932 1.09% 758 1.55%

2016 Est. Population by Sex 2,436,744 584,915 52,374 Male 1,201,122 49.29% 286,597 49.00% 25,572 48.83% Female 1,235,622 50.71% 298,318 51.00% 26,802 51.17%

2016 Est. Population by Age 2,436,744 584,915 52,374 Age 0 - 4 161,034 6.61% 39,092 6.68% 3,496 6.68% Age 5 - 9 164,205 6.74% 40,564 6.94% 3,523 6.73% Age 10 - 14 166,687 6.84% 42,158 7.21% 3,452 6.59% Age 15 - 17 98,974 4.06% 24,872 4.25% 2,117 4.04% Age 18 - 20 102,481 4.21% 22,088 3.78% 1,897 3.62% Age 21 - 24 133,893 5.49% 27,442 4.69% 2,477 4.73% Age 25 - 34 326,847 13.41% 75,770 12.95% 7,257 13.86% Age 35 - 44 316,773 13.00% 81,381 13.91% 7,021 13.41% Age 45 - 54 320,270 13.14% 80,452 13.75% 6,906 13.19% Age 55 - 64 307,369 12.61% 73,850 12.63% 7,264 13.87% Age 65 - 74 197,401 8.10% 45,940 7.85% 4,281 8.17% Age 75 - 84 96,618 3.97% 20,740 3.55% 1,675 3.20% Age 85 and over 44,192 1.81% 10,566 1.81% 1,008 1.92% Age 16 and over 1,912,388 78.48% 454,949 77.78% 41,212 78.69% Age 18 and over 1,845,844 75.75% 438,229 74.92% 39,786 75.97% Age 21 and over 1,743,363 71.54% 416,141 71.15% 37,889 72.34% Age 65 and over 338,211 13.88% 77,246 13.21% 6,964 13.30% 2016 Est. Median Age 37.0 37.5 37.8 2016 Est. Average Age 38.0 37.9 38.3

2016 Est. Male Population by Age 1,201,122 286,597 25,572 Age 0 - 4 82,203 6.84% 19,963 6.97% 1,777 6.95% Age 5 - 9 83,912 6.99% 20,766 7.25% 1,784 6.98% Age 10 - 14 85,356 7.11% 21,601 7.54% 1,743 6.82% Age 15 - 17 50,542 4.21% 12,697 4.43% 1,059 4.14% Age 18 - 20 52,529 4.37% 11,401 3.98% 962 3.76% Age 21 - 24 68,816 5.73% 14,039 4.90% 1,261 4.93% Age 25 - 34 164,599 13.70% 37,555 13.10% 3,610 14.12% Age 35 - 44 158,701 13.21% 40,544 14.15% 3,511 13.73% Age 45 - 54 158,591 13.20% 39,300 13.71% 3,372 13.19% Age 55 - 64 147,935 12.32% 35,001 12.21% 3,438 13.44% Age 65 - 74 92,071 7.67% 21,363 7.45% 2,021 7.90% Age 75 - 84 41,119 3.42% 8,855 3.09% 726 2.84% Age 85 and over 14,748 1.23% 3,512 1.23% 308 1.20% 2016 Est. Median Age, Male 35.8 36.3 36.7 2016 Est. Average Age, Male 37.0 36.8 37.3

2016 Est. Female Population by Age 1,235,622 298,318 26,802 Age 0 - 4 78,831 6.38% 19,129 6.41% 1,719 6.41% Age 5 - 9 80,293 6.50% 19,798 6.64% 1,739 6.49% Age 10 - 14 81,331 6.58% 20,557 6.89% 1,709 6.38% Age 15 - 17 48,432 3.92% 12,175 4.08% 1,058 3.95% Age 18 - 20 49,952 4.04% 10,687 3.58% 935 3.49% Age 21 - 24 65,077 5.27% 13,403 4.49% 1,216 4.54% Age 25 - 34 162,248 13.13% 38,215 12.81% 3,647 13.61% Age 35 - 44 158,072 12.79% 40,837 13.69% 3,510 13.10% Age 45 - 54 161,679 13.08% 41,152 13.79% 3,534 13.19% Age 55 - 64 159,434 12.90% 38,849 13.02% 3,826 14.28% Age 65 - 74 105,330 8.52% 24,577 8.24% 2,260 8.43% Age 75 - 84 55,499 4.49% 11,885 3.98% 949 3.54% Age 85 and over 29,444 2.38% 7,054 2.36% 700 2.61% 2016 Est. Median Age, Female 38.3 38.7 38.9 2016 Est. Average Age, Female 39.1 39.0 39.3 Pop-Facts Demographic Snapshot

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % 1,944,818 463,101 41,903 2016 Est. Pop Age 15+ by Marital Status Total, Never Married 600,004 30.85% 124,568 26.90% 12,705 30.32% Males, Never Married 317,899 16.35% 64,050 13.83% 6,300 15.03% Females, Never Married 282,105 14.51% 60,518 13.07% 6,405 15.29% Married, Spouse present 920,008 47.31% 256,672 55.42% 21,378 51.02% Married, Spouse absent 77,766 4.00% 12,224 2.64% 1,371 3.27% Widowed 107,246 5.51% 21,331 4.61% 1,974 4.71% Males Widowed 24,479 1.26% 4,524 0.98% 436 1.04% Females Widowed 82,767 4.26% 16,807 3.63% 1,538 3.67% Divorced 239,794 12.33% 48,306 10.43% 4,475 10.68% Males Divorced 103,015 5.30% 18,385 3.97% 1,907 4.55% Females Divorced 136,779 7.03% 29,921 6.46% 2,568 6.13%

2016 Est. Pop Age 25+ by Edu. 1,609,470 388,699 35,412 Attainment Less than 9th grade 46,966 2.92% 6,841 1.76% 592 1.67% Some High School, no diploma 95,527 5.94% 10,646 2.74% 1,026 2.90% High School Graduate (or GED) 437,564 27.19% 57,747 14.86% 4,718 13.32% Some College, no degree 375,721 23.34% 80,639 20.75% 7,695 21.73% Associate Degree 120,277 7.47% 29,731 7.65% 2,667 7.53% Bachelor's Degree 337,311 20.96% 128,500 33.06% 11,794 33.31% Master's Degree 141,500 8.79% 53,064 13.65% 5,031 14.21% Professional School Degree 34,292 2.13% 14,890 3.83% 1,338 3.78% Doctorate Degree 20,312 1.26% 6,641 1.71% 551 1.56%

2016 Est. Pop Age 25+ by Edu. Attain., 104,709 23,329 2,261 Hisp./Lat. No High School Diploma 34,936 33.36% 6,484 27.79% 853 37.73% High School Graduate 28,908 27.61% 5,100 21.86% 409 18.09% Some College or Associate's Degree 24,175 23.09% 6,514 27.92% 482 21.32% Bachelor's Degree or Higher 16,690 15.94% 5,231 22.42% 517 22.87%

955,948 229,794 21,013 2016 Est. Households by Household Type Family Households 626,429 65.53% 157,348 68.47% 14,272 67.92% Nonfamily Households 329,519 34.47% 72,446 31.53% 6,741 32.08%

2016 Est. Group Quarters Population 54,712 5,174 353

2016 HHs by Ethnicity, Hispanic/Latino 56,019 12,419 1,190

2016 Est. Households by HH Income 955,948 229,794 21,013 Income < $15,000 105,510 11.04% 12,648 5.50% 1,040 4.95% Income $15,000 - $24,999 89,394 9.35% 13,871 6.04% 1,539 7.32% Income $25,000 - $34,999 95,502 9.99% 17,319 7.54% 1,729 8.23% Income $35,000 - $49,999 132,204 13.83% 27,779 12.09% 2,628 12.51% Income $50,000 - $74,999 176,664 18.48% 40,243 17.51% 3,623 17.24% Income $75,000 - $99,999 126,228 13.20% 31,923 13.89% 2,675 12.73% Income $100,000 - $124,999 86,386 9.04% 26,206 11.40% 2,348 11.17% Income $125,000 - $149,999 50,703 5.30% 17,264 7.51% 1,716 8.17% Income $150,000 - $199,999 49,695 5.20% 20,261 8.82% 2,039 9.70% Income $200,000 - $249,999 18,376 1.92% 8,475 3.69% 751 3.57% Income $250,000 - $499,999 19,041 1.99% 9,825 4.28% 753 3.58% Income $500,000+ 6,245 0.65% 3,980 1.73% 172 0.82% 2016 Est. Average Household Income $75,476 $102,072 $96,388 2016 Est. Median Household Income $57,835 $77,378 $74,638

2016 Median HH Inc. by Single-Class. Race or Eth. White Alone $62,342 $79,957 $80,155 Black or African American Alone $34,633 $49,941 $46,775 American Indian and Alaska Native Alone $51,155 $69,218 $66,346 Asian Alone $69,615 $92,662 $74,904 Native Hawaiian and Other Pacific Islander $41,479 $56,522 $47,500 Alone Some Other Race Alone $39,498 $53,488 $72,024 Two or More Races $46,345 $61,943 $54,916 Hispanic or Latino $41,986 $47,907 $42,809 Not Hispanic or Latino $59,065 $79,641 $76,803

2016 Est. Family HH Type by Presence of 626,429 157,348 14,272 Own Child. Pop-Facts Demographic Snapshot

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % Married-Couple Family, own children 201,359 32.14% 62,005 39.41% 5,187 36.34% Married-Couple Family, no own children 266,920 42.61% 67,365 42.81% 6,508 45.60% Male Householder, own children 23,752 3.79% 4,469 2.84% 380 2.66% Male Householder, no own children 19,827 3.17% 3,581 2.28% 333 2.33% Female Householder, own children 68,615 10.95% 12,313 7.83% 1,177 8.25% Female Householder, no own children 45,956 7.34% 7,615 4.84% 687 4.81%

955,948 229,794 21,013 2016 Est. Households by Household Size 1-person 271,789 28.43% 61,476 26.75% 5,474 26.05% 2-person 313,691 32.81% 75,452 32.83% 7,343 34.95% 3-person 153,062 16.01% 37,503 16.32% 3,594 17.10% 4-person 122,110 12.77% 32,838 14.29% 2,771 13.19% 5-person 59,243 6.20% 15,116 6.58% 1,243 5.92% 6-person 23,571 2.47% 5,364 2.33% 441 2.10% 7-or-more-person 12,482 1.31% 2,045 0.89% 147 0.70% 2016 Est. Average Household Size 2.49 2.52 2.48

2016 Est. Households by Presence of 955,948 229,794 21,013 People Under 18 Households with 1 or More People under 322,449 33.73% 82,909 36.08% 7,138 33.97% Age 18: Married-Couple Family 213,258 66.14% 63,879 77.05% 5,377 75.33% Other Family, Male Householder 27,078 8.40% 4,955 5.98% 420 5.88% Other Family, Female Householder 78,713 24.41% 13,467 16.24% 1,287 18.03% Nonfamily, Male Householder 2,558 0.79% 455 0.55% 42 0.59% Nonfamily, Female Householder 842 0.26% 153 0.18% 12 0.17%

Households with No People under Age 633,499 66.27% 146,885 63.92% 13,875 66.03% 18: Married-Couple Family 255,055 40.26% 65,510 44.60% 6,318 45.54% Other Family, Male Householder 16,509 2.61% 3,103 2.11% 292 2.10% Other Family, Female Householder 35,843 5.66% 6,449 4.39% 578 4.17% Nonfamily, Male Householder 152,900 24.14% 31,385 21.37% 3,002 21.64% Nonfamily, Female Householder 173,192 27.34% 40,438 27.53% 3,685 26.56%

2016 Est. Households by Number of 955,948 229,794 21,013 Vehicles No Vehicles 56,171 5.88% 7,537 3.28% 846 4.03% 1 Vehicle 310,959 32.53% 66,686 29.02% 6,237 29.68% 2 Vehicles 383,452 40.11% 106,551 46.37% 9,658 45.96% 3 Vehicles 144,261 15.09% 34,564 15.04% 3,107 14.79% 4 Vehicles 44,706 4.68% 11,001 4.79% 911 4.34% 5 or more Vehicles 16,399 1.72% 3,455 1.50% 254 1.21% 2016 Est. Average Number of Vehicles 1.9 2.0 1.9

2016 Est. Families by Poverty Status 626,429 157,348 14,272 2016 Families at or Above Poverty 567,520 90.60% 151,429 96.24% 13,640 95.57% 2016 Families at or Above Poverty with 264,302 42.19% 77,719 49.39% 6,579 46.10% Children 2016 Families Below Poverty 58,909 9.40% 5,919 3.76% 632 4.43% 47,494 7.58% 4,367 2.78% 577 4.04% 2016 Families Below Poverty with Children

2016 Est. Pop Age 16+ by Employment 1,912,388 454,949 41,212 Status In Armed Forces 6,601 0.35% 374 0.08% 30 0.07% Civilian - Employed 1,203,984 62.96% 316,098 69.48% 28,887 70.09% Civilian - Unemployed 88,817 4.64% 15,516 3.41% 1,593 3.87% Not in Labor Force 612,986 32.05% 122,961 27.03% 10,702 25.97%

2016 Est. Civ. Employed Pop 16+ by 1,207,746 317,115 28,986 Class of Worker For-Profit Private Workers 832,347 68.92% 227,652 71.79% 21,132 72.90% Non-Profit Private Workers 114,077 9.45% 25,507 8.04% 2,322 8.01% Local Government Workers 70,595 5.85% 16,521 5.21% 1,319 4.55% State Government Workers 51,291 4.25% 9,926 3.13% 989 3.41% Federal Government Workers 38,407 3.18% 7,483 2.36% 631 2.18% Self-Employed Workers 99,548 8.24% 29,828 9.41% 2,577 8.89% Unpaid Family Workers 1,481 0.12% 198 0.06% 16 0.06%

2016 Est. Civ. Employed Pop 16+ by 1,207,746 317,115 28,986 Occupation Pop-Facts Demographic Snapshot

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % Architect/Engineer 19,597 1.62% 7,958 2.51% 895 3.09% Arts/Entertainment/Sports 21,212 1.76% 7,258 2.29% 691 2.38% Building Grounds Maintenance 41,084 3.40% 6,236 1.97% 548 1.89% Business/Financial Operations 68,329 5.66% 26,157 8.25% 2,420 8.35% Community/Social Services 19,626 1.63% 5,454 1.72% 419 1.45% Computer/Mathematical 39,721 3.29% 16,753 5.28% 1,390 4.80% Construction/Extraction 53,474 4.43% 9,850 3.11% 735 2.54% Education/Training/Library 75,195 6.23% 20,295 6.40% 1,683 5.81% Farming/Fishing/Forestry 3,584 0.30% 781 0.25% 35 0.12% Food Prep/Serving 68,034 5.63% 14,117 4.45% 1,607 5.54% Health Practitioner/Technician 71,812 5.95% 22,450 7.08% 2,288 7.89% Healthcare Support 29,774 2.47% 5,692 1.79% 828 2.86% Maintenance Repair 36,582 3.03% 6,141 1.94% 568 1.96% Legal 14,654 1.21% 5,048 1.59% 393 1.36% Life/Physical/Social Science 9,208 0.76% 2,792 0.88% 227 0.78% Management 125,239 10.37% 45,180 14.25% 3,986 13.75% Office/Admin. Support 176,089 14.58% 40,644 12.82% 3,867 13.34% Production 72,087 5.97% 10,352 3.26% 651 2.25% Protective Services 25,075 2.08% 4,101 1.29% 308 1.06% Sales/Related 127,346 10.54% 39,415 12.43% 3,785 13.06% Personal Care/Service 38,439 3.18% 8,641 2.72% 787 2.72% Transportation/Moving 71,585 5.93% 11,800 3.72% 875 3.02%

2016 Est. Pop 16+ by Occupation 1,207,746 317,115 28,986 Classification Blue Collar 233,728 19.35% 38,143 12.03% 2,829 9.76% White Collar 768,028 63.59% 239,404 75.49% 22,044 76.05% Service and Farm 205,990 17.06% 39,568 12.48% 4,113 14.19%

2016 Est. Workers Age 16+ by Transp. to 1,191,202 311,276 28,385 Work Drove Alone 986,099 82.78% 267,013 85.78% 24,722 87.10% Car Pooled 108,487 9.11% 21,747 6.99% 1,748 6.16% Public Transportation 14,479 1.22% 1,281 0.41% 72 0.25% Walked 20,541 1.72% 2,413 0.78% 272 0.96% Bicycle 3,336 0.28% 520 0.17% 41 0.14% Other Means 11,391 0.96% 2,736 0.88% 148 0.52% Worked at Home 46,869 3.93% 15,566 5.00% 1,382 4.87%

2016 Est. Workers Age 16+ by Travel Time to Work Less than 15 Minutes 337,005 84,062 8,355 15 - 29 Minutes 463,300 141,950 12,885 30 - 44 Minutes 230,285 50,928 4,667 45 - 59 Minutes 68,679 10,249 521 60 or more Minutes 42,571 7,068 465 2016 Est. Avg Travel Time to Work in 25.00 23.00 22.00 Minutes

2016 Est. Occupied Housing Units by 955,948 229,794 21,013 Tenure Owner Occupied 635,179 66.44% 162,858 70.87% 13,263 63.12% Renter Occupied 320,769 33.56% 66,936 29.13% 7,750 36.88%

2016 Owner Occ. HUs: Avg. Length of 16.3 14.7 14.2 Residence

2016 Renter Occ. HUs: Avg. Length of 7.1 6.7 6.6 Residence

2016 Est. Owner-Occupied Housing Units 635,179 162,858 13,263 by Value Value Less than $20,000 22,510 3.54% 3,054 1.88% 143 1.08% Value $20,000 - $39,999 19,899 3.13% 1,113 0.68% 91 0.69% Value $40,000 - $59,999 22,587 3.56% 597 0.37% 37 0.28% Value $60,000 - $79,999 35,290 5.56% 1,329 0.82% 46 0.35% Value $80,000 - $99,999 49,206 7.75% 2,233 1.37% 137 1.03% Value $100,000 - $149,999 121,324 19.10% 16,880 10.36% 878 6.62% Value $150,000 - $199,999 121,943 19.20% 34,637 21.27% 2,596 19.57% Value $200,000 - $299,999 135,195 21.28% 51,639 31.71% 5,553 41.87% Value $300,000 - $399,999 53,075 8.36% 23,980 14.72% 2,278 17.18% Value $400,000 - $499,999 25,053 3.94% 12,246 7.52% 913 6.88% Value $500,000 - $749,999 17,164 2.70% 8,510 5.23% 425 3.20% Pop-Facts Demographic Snapshot

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % Value $750,000 - $999,999 6,177 0.97% 3,206 1.97% 121 0.91% Value $1,000,000 or more 5,756 0.91% 3,434 2.11% 45 0.34% 2016 Est. Median All Owner-Occupied $169,178 $241,802 $248,685 Housing Value

2016 Est. Housing Units by Units in 1,056,177 243,780 22,591 Structure 1 Unit Attached 67,469 6.39% 21,521 8.83% 2,306 10.21% 1 Unit Detached 730,098 69.13% 164,812 67.61% 13,090 57.94% 2 Units 25,369 2.40% 1,914 0.79% 108 0.48% 3 or 4 Units 43,035 4.07% 8,231 3.38% 685 3.03% 5 to 19 Units 102,797 9.73% 31,678 12.99% 4,254 18.83% 20 to 49 Units 27,126 2.57% 6,419 2.63% 1,151 5.09% 50 or More Units 32,267 3.06% 7,413 3.04% 889 3.94% Mobile Home or Trailer 27,741 2.63% 1,777 0.73% 106 0.47% Boat, RV, Van, etc. 275 0.03% 15 0.01% 2 0.01%

2016 Est. Housing Units by Year 1,056,177 243,780 22,591 Structure Built Housing Units Built 2010 or later 52,558 4.98% 18,755 7.69% 1,876 8.30% Housing Units Built 2000 to 2009 154,539 14.63% 42,960 17.62% 4,521 20.01% Housing Units Built 1990 to 1999 148,319 14.04% 44,641 18.31% 3,794 16.79% Housing Units Built 1980 to 1989 127,011 12.03% 39,349 16.14% 5,284 23.39% Housing Units Built 1970 to 1979 157,160 14.88% 36,435 14.95% 4,994 22.11% Housing Units Built 1960 to 1969 119,514 11.32% 23,505 9.64% 1,120 4.96% Housing Units Built 1950 to 1959 117,409 11.12% 23,830 9.78% 568 2.51% Housing Units Built 1940 to 1949 48,294 4.57% 7,386 3.03% 178 0.79% Housing Unit Built 1939 or Earlier 131,373 12.44% 6,919 2.84% 256 1.13% 2016 Est. Median Year Structure Built 1977 1986 1988

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % 2016 Est. Population by Age 2,436,744 584,915 52,374 Age 0 - 4 161,034 6.61% 39,092 6.68% 3,496 6.68% Age 5 - 9 164,205 6.74% 40,564 6.94% 3,523 6.73% Age 10 - 14 166,687 6.84% 42,158 7.21% 3,452 6.59% Age 15 - 17 98,974 4.06% 24,872 4.25% 2,117 4.04% Age 18 - 20 102,481 4.21% 22,088 3.78% 1,897 3.62% Age 21 - 24 133,893 5.49% 27,442 4.69% 2,477 4.73% Age 25 - 34 326,847 13.41% 75,770 12.95% 7,257 13.86% Age 35 - 44 316,773 13.00% 81,381 13.91% 7,021 13.41% Age 45 - 54 320,270 13.14% 80,452 13.75% 6,906 13.19% Age 55 - 64 307,369 12.61% 73,850 12.63% 7,264 13.87% Age 65 - 74 197,401 8.10% 45,940 7.85% 4,281 8.17% Age 75 - 84 96,618 3.97% 20,740 3.55% 1,675 3.20% Age 85 and over 44,192 1.81% 10,566 1.81% 1,008 1.92% Age 16 and over 1,912,388 78.48% 454,949 77.78% 41,212 78.69% Age 18 and over 1,845,844 75.75% 438,229 74.92% 39,786 75.97% Age 21 and over 1,743,363 71.54% 416,141 71.15% 37,889 72.34% Age 65 and over 338,211 13.88% 77,246 13.21% 6,964 13.30% 2016 Est. Median Age 37.0 37.5 37.8 2016 Est. Average Age 38.0 37.9 38.3

2016 Est. Population by Single- 2,436,744 584,915 52,374 Classification Race White Alone 1,915,727 78.62% 492,709 84.24% 43,187 82.46% Black or African American Alone 280,293 11.50% 29,503 5.04% 3,691 7.05% American Indian and Alaska Native Alone 15,123 0.62% 2,240 0.38% 184 0.35% Asian Alone 64,322 2.64% 27,475 4.70% 2,042 3.90% Native Hawaiian and Other Pacific Islander 4,406 0.18% 231 0.04% 32 0.06% Alone Some Other Race Alone 80,537 3.31% 15,731 2.69% 1,677 3.20% Two or More Races 76,336 3.13% 17,026 2.91% 1,561 2.98%

2016 Est. Population by Ethnicity 2,436,744 584,915 52,374 (Hispanic or Latino) Hispanic or Latino 205,515 8.43% 44,593 7.62% 4,072 7.77% Not Hispanic or Latino 2,231,229 91.57% 540,322 92.38% 48,302 92.23%

2016 Est. Population by Sex 2,436,744 584,915 52,374 Male 1,201,122 49.29% 286,597 49.00% 25,572 48.83% Female 1,235,622 50.71% 298,318 51.00% 26,802 51.17%

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % 2016 Est. Households by Household 955,948 229,794 21,013 Income Income < $15,000 105,510 11.04% 12,648 5.50% 1,040 4.95% Income $15,000 - $24,999 89,394 9.35% 13,871 6.04% 1,539 7.32% Income $25,000 - $34,999 95,502 9.99% 17,319 7.54% 1,729 8.23% Income $35,000 - $49,999 132,204 13.83% 27,779 12.09% 2,628 12.51% Income $50,000 - $74,999 176,664 18.48% 40,243 17.51% 3,623 17.24% Income $75,000 - $99,999 126,228 13.20% 31,923 13.89% 2,675 12.73% Income $100,000 - $124,999 86,386 9.04% 26,206 11.40% 2,348 11.17% Income $125,000 - $149,999 50,703 5.30% 17,264 7.51% 1,716 8.17% Income $150,000 - $199,999 49,695 5.20% 20,261 8.82% 2,039 9.70% Income $200,000 - $249,999 18,376 1.92% 8,475 3.69% 751 3.57% Income $250,000 - $499,999 19,041 1.99% 9,825 4.28% 753 3.58% Income $500,000+ 6,245 0.65% 3,980 1.73% 172 0.82% 2016 Est. Average Household Income $75,476 $102,072 $96,388 2016 Est. Median Household Income $57,835 $77,378 $74,638

2016 Median HH Inc. by Single- Classification Race White Alone $62,342 $79,957 $80,155 Black or African American Alone $34,633 $49,941 $46,775 American Indian and Alaska Native Alone $51,155 $69,218 $66,346 Asian Alone $69,615 $92,662 $74,904 Native Hawaiian and Other Pacific Islander $41,479 $56,522 $47,500 Alone Some Other Race Alone $39,498 $53,488 $72,024 Two or More Races $46,345 $61,943 $54,916 Hispanic or Latino $41,986 $47,907 $42,809 Not Hispanic or Latino $59,065 $79,641 $76,803

955,948 229,794 21,013 2016 Est. Households by Household Type Family Households 626,429 65.53% 157,348 68.47% 14,272 67.92% Nonfamily Households 329,519 34.47% 72,446 31.53% 6,741 32.08% 2016 Est. Group Quarters Population 54,712 5,174 353

2016 Est. HHs by Type by Presence of 626,429 157,348 14,272 Own Children Married-Couple Family, own children 201,359 32.14% 62,005 39.41% 5,187 36.34% Married-Couple Family, no own children 266,920 42.61% 67,365 42.81% 6,508 45.60% Male Householder, own children 23,752 3.79% 4,469 2.84% 380 2.66% Male Householder, no own children 19,827 3.17% 3,581 2.28% 333 2.33% Female Householder, own children 68,615 10.95% 12,313 7.83% 1,177 8.25% Female Householder, no own children 45,956 7.34% 7,615 4.84% 687 4.81%

Combined Statistical Area (CSA) KC MSA County - Johnson Census Place - Lenexa (Combined Statistical County (County) (Census Place) Description Total % Total % Total % 2016 Est. Population by Single- 2,436,744 584,915 52,374 Classification Race White Alone 1,915,727 78.62% 492,709 84.24% 43,187 82.46% Black or African American Alone 280,293 11.50% 29,503 5.04% 3,691 7.05% American Indian and Alaska Native Alone 15,123 0.62% 2,240 0.38% 184 0.35% Asian Alone 64,322 2.64% 27,475 4.70% 2,042 3.90% Native Hawaiian and Other Pacific Islander 4,406 0.18% 231 0.04% 32 0.06% Alone Some Other Race Alone 80,537 3.31% 15,731 2.69% 1,677 3.20% Two or More Races 76,336 3.13% 17,026 2.91% 1,561 2.98%

955,948 229,794 21,013 2016 Occupied Housing Units by Tenure Owner-Occupied 635,179 66.44% 162,858 70.87% 13,263 63.12% Renter-Occupied 320,769 33.56% 66,936 29.13% 7,750 36.88%

2016 Average Household Size 2.49 2.52 2.48

2016 Est. Households by Household 955,948 229,794 21,013 Income Income < $15,000 105,510 11.04% 12,648 5.50% 1,040 4.95% Income $15,000 - $24,999 89,394 9.35% 13,871 6.04% 1,539 7.32% Income $25,000 - $34,999 95,502 9.99% 17,319 7.54% 1,729 8.23% Income $35,000 - $49,999 132,204 13.83% 27,779 12.09% 2,628 12.51% Income $50,000 - $74,999 176,664 18.48% 40,243 17.51% 3,623 17.24% Income $75,000 - $99,999 126,228 13.20% 31,923 13.89% 2,675 12.73% Income $100,000 - $124,999 86,386 9.04% 26,206 11.40% 2,348 11.17% Income $125,000 - $149,999 50,703 5.30% 17,264 7.51% 1,716 8.17% Income $150,000 - $199,999 49,695 5.20% 20,261 8.82% 2,039 9.70% Income $200,000 - $249,999 18,376 1.92% 8,475 3.69% 751 3.57% Income $250,000 - $499,999 19,041 1.99% 9,825 4.28% 753 3.58% Income $500,000+ 6,245 0.65% 3,980 1.73% 172 0.82% 2016 Est. Average Household Income $75,476 $102,072 $96,388 2016 Est. Median Household Income $57,835 $77,378 $74,638

Addendum D Engagement Letter

City of Lenexa Housing Study