Research & Forecast Report

AtlAntAQ2 2015 | Multifamily

Atlanta Multifamily Market Remains StrongKey Takeaways > Effective rents have increased 2.7% 2Q15 vs. 1Q15, and 7.3% annually.

> Highest 2nd Quarter rent growth was in these submarkets: South Atlanta suburbs (9.2%), Duluth (5.3%), Smyrna (5.0%), Southeast Marietta (4.9%), and West Marietta (4.4%).

> Continued job growth of 3% annually in the region has brought the unemployment rate down to 5.9%.

> Mid-Year 2015 occupancy rates have remained high at 94.2% amongst increasing inventory. These high occupancy rates are driven by sustained demand particularly for middle and top-tier product in the northern and central parts of the city.

> Expansion continues in Atlanta at a rate of 1.4% YoY with 7,997 units added in 2Q15.

Atlanta Multifamily MarketAtlanta’s multifamily market has remained strong with a continued rent growth of 2.7% in the 2nd quarter of 2015. Year-over-year rent growth is at 7.3% putting Atlanta in the top ten of all major metros and number one in the Southern region. The foundation to this growth is a strong, robust economy along with limited new construction in the market.

Demand has remained solid in the Atlanta metro due to continuous employment growth and corporate expansions. Atlanta ranked number 4 nationally for job growth in the 12-month period ending in June, adding over 77,000 jobs. The locations of these jobs tend to be centered around the city lending more desirability for apartments in urban settings. Notable for the quarter, Porsche has opened its new North American headquarters near Hartsfield-Jackson International Airport which will have 400+ employees. Other corporate expansions announced in the quarter include Kaiser Permanente, Sage Group, Courion, and Google. High demand has kept occupancy rates at 94.2% for the quarter even amongst new units being added to the region.

US SOUTH ATLANTA Source: MPF Research

Historical Apartment Occupancy & Rents

Market IndicatorsRelative to prior period

ATLQ2 2015

ATLQ3 2015*

VACANCY

RENTS

CONCESSIONS

TRANSACTIONS

PRICE PER UNIT

CAP RATES - -*Projected

89%90%91%92%93%94%95%96%97%

2013

2014

2015

Occ

upan

cy %

$400

$600

$800

$1,000

$1,200

$1,400

2013

2014

2015

AVG

Mon

thly

Ren

t

2 Research & Forecast Report | Q2 2015 | Atlanta Multifamily | Colliers International

Atlanta Multifamily Market (continued)Another factor in the strong multifamily market is generational. Millennials, whose ages range from 18 to 34, are not buying homes at the same rate as previous generations. The average first time home buyer today rents for six years before buying a home compared to two and half years in the early 1970s. This is largely due to the fact millennials do not have the financial savings to afford the down payment on many of the homes in the market. Rental growth rates across the country have grown at twice the pace of wage growth. In Atlanta, wages have grown at 2% in the twelve month period ending June 2015, compared to a 7.3% increase in rental rates during that same period. This has created further demand for multifamily rental housing.

While demand remains strong, Atlanta’s supply of apartments is certainly on the upswing albeit at a manageable pace. Inventory

growth has remained under 2% for the past three years with 7,997 units added in 2Q15. Absorption in the market for 2Q15 was 4,552 units. Approximately 13,000 units were under construction in 2Q15 with 85% being located in Downtown, Midtown, and Buckhead submarkets. This is largely due to high demand for product in these submarkets which has allowed many completed developments to command rents north of $2.50 per square foot.

To sum, we can expect rents to continue to increase in the future with strong demand prospects and limited new inventory entering the market. Another trend to watch for the future is the growth of baby boomers in the apartment marketplace. The population ages 65 and older will grow to over 50 million by 2019 up from around 30 million in 1989. This is expected to fuel future rent demand as many empty nesters will seek to downsize their household and enjoy many of the conveniences renting an apartment vs. owning a home provides.

Historical Investment Volume & Cap Rates

UPDATE - Recent Transactions in the Market

Notable Sales Activity

PROPERTy SUbMARkET SAlES DATE SAlE PRIcE SIzE (UnITS) PRIcE / UnIT bUyER

Brookleigh Flats Northlake 5/14/2015 $84,950,000 332 $253,582 LaSalle Investment Mgmt.

Steelworks Midtown 6/18/2015 $80,400,000 329 $244,377 Heitman LLC

Dunwoody Place Central Perimeter 7/16/2015 $77,200,000 400 $193,000 Crow Holdings

Avana Lenox Buckhead 6/29/2015 $71,600,000 423 $169,267 Greystar Real Estate Prtnrs

ARIUM Johns Creek North Fulton 7/1/2015 $64,500,000 396 $162,879 Goldman Sachs Asset Mgmt

The Jane Atlanta Apartments Midtown 4/30/2015 $63,600,000 280 $227,143 CWS Capital Partners

Anderson at Clairmont Northlake 6/23/2015 $60,050,000 408 $147,181 Eaton Vance Corp.

Berkshire Howell Mill Midtown 5/13/2015 $51,500,000 257 $200,389 Berkshire Group

Inman Quarter Downtown 5/29/2015 $50,000,000 200 $250,000 TriBridge Residential/Coro

Manchester at Mansell Apts. North Fulton 5/8/2015 $48,500,000 468 $103,632 Titan Real Estate Investment

Sales Volume AVG Cap Rate

AtlANtA MultifAMily

Apartment investment volume as of mid-year 2015 in Atlanta is almost half of the amount in all of 2014. Around 87 properties with a total of 19,784 units have sold to date. According to Real Capital Analytics, the average price per unit in Atlanta decreased to $95,984 which is lower than last quarter, but still 24% higher than a year ago. The average cap rate for apartments in the Atlanta market has remained practically unchanged from last quarter at 6.6%.

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Source: Real Capital Analytics

Source: CoStar Comps

3 Research & Forecast Report | Q2 2015 | Atlanta Multifamily | Colliers International

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Multifamily Pipeline | Urban Atlanta Sources: CoStar Property, MPf Research

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5

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UNDER CONSTRUCTION

# Name Developer/Owner Address Market Units

1 Broadstone Court Alliance Residential Company 3091 Maple Dr Buckhead 250

2 (not yet named) Abraham Properties & Builders 675 North Highland Ave NE Midtown 124

3 Elan Inman Station Crim & Associates 144 Moreland Ave NE Downtown 285

4 Square on Fifth Gateway Development Services 848 Spring St NW Midtown 220

5 Peachtree Apartments 782 Peachtree St NE Midtown 294

6 Ardmore & 28th Cocke Finkelstein, Inc. 306 Ardmore Cir NW Midtown 165

7 The Monroe Pollack Shores Real Estate Group 222 Colonial Homes Dr NW Buckhead 218

8 33 Peachtree Place Wood Partners 33 Peachtree Pl NE Midtown 369

9 The Brady Perennial Properties, Inc. 930 Howell Mill Rd Midtown 230

10 Aspire West Midtown Westplan Investors 1390 Northside Dr Midtown 133

11 Elan Lindbergh Greystar Real Estate Partners 741 Morosgo Dr NE Buckhead 258

12 Modera Morningside Mill Creek Residential Trust LLC 1845 Piedmont Ave NE Buckhead 300

13 Domain at Phipps Plaza Columbus Realty Partners, Ltd. 705 Phipps Plz NE Buckhead 319

14 AMLI City Place AMLI Residential Properties, LP 3464 Roxboro Rd NE Buckhead 640

15 The Reserve at the Ballpark Atlantic Realty Partners 2875 Crescent Pky Northwest Atlanta 318

16 The Collection JLB Partners, LP 4600 Roswell Rd Central Perimeter 316

17 200 Edgewood Sanctuary Residential LLC 200 Edgewood Ave NE Downtown 144

18 Camden Paces - Phase II Camden Realty Inc 77 E Andrews Dr NW Buckhead 152

19 Hanover Park Place Trammell Crow Residential Company 475 Buckhead Ave NE Buckhead 375

4 Research & Forecast Report | Q2 2015 | Atlanta Multifamily | Colliers International

Multifamily Pipeline | Urban Atlanta (cont.) Sources: CoStar Property, MPf Research

LEASE UP

# Name Developer/Owner Address Market Units

1 Haynes House Alliance Residential Company 2420 Peachtree Rd NW Midtown 186

2 The Jane Atlanta Apartment Homes Pollack Shores Real Estate Group 214 Colonial Homes Dr NW Buckhead 280

3 Cyan on Peachtree Atlantic Realty Partners 3380 Peachtree Rd NE Buckhead 327

4 The High Rise at Post Alexander Post Properties, Inc. 600 Phipps Blvd NE Buckhead 143

5 SkyHouse Buckhead Novare Group 3390 Stratford Rd Buckhead 362

6 Citizen Perimeter Pollack Shores Real Estate Group 1125 Hammond Dr NE Central Perimeter 341

7 Overton Rise Apartments Newport Development, LLC 3695 Cumberland Blvd Northwest Atlanta 294

8 Daily World Apartments Gene Kansas Commercial Real Estate 145 Auburn Ave NE Downtown 5

9 Berkshire Terminus Crescent Communities, LLC 3280 Peachtree Rd NE Buckhead 355

10 Alexan on Krog Trammell Crow Residential Company 112 Krog St NE Downtown 222

11 131 Ponce Sereo Group, Inc. 131 Ponce de Leon Ave NE Midtown 280

12 Crescent Howell Mill Crescent Communities, LLC 1950 Howell Mill Rd NW Midtown 256

13 1105 Town Brookhaven Apartments Fairfield Residential 1105 Town Blvd Buckhead 299

14 Indigo House 111 Glenridge Point Pky NE Central Perimeter 181

15 Alta Brookhaven Wood Partners 1295 Dresden Dr NE Buckhead 230

16 1160 Hammond Northwood Ravin 1160 Hammond Dr NE Central Perimeter 349

17 Avonlea Square Quintus Corporation 1836 Roswell St SE Northwest Atlanta 159

totAl 4,269

20 The Office Apartments DeBartolo Development LLC 250 Piedmont Ave NE Downtown 324

21 Yoo on The Park Trillist Company 207 13th St NE Midtown 245

22 Atlantic House Novare Group 1163 W Peachtree St NW Midtown 407

23 60 11th St Selig Enterprises, Inc. 60 11th St NE Midtown 320

24 Alexan Glenwood Trammell Crow Residential Company 860 Glenwood Ave SE Downtown 216

25 Alexan Village Flats Trammell Crow Residential Company 1205 Metropolitan Ave SE Downtown 120

26 1824 Defoor Westside 1824 Defoor Ave NW Midtown 236

27 The Heights at West Midtown The Worthing Companies 507 Bishop St NW Midtown 224

28 455 Fourteenth Pollack Shores Real Estate Group 455 14th St NW Midtown 361

29 Gables Oglethorpe Clarion 2925 Hermance Dr NE Buckhead 369

30 AMLI Piedmont Heights AMLI Residential Properties, LP 737 Lindbergh Dr NE Buckhead 375

31 Solis Downwood Terwilliger Pappas 3201 Downwood Cir NW Buckhead 280

32 Aspire North Druid Hills Westplan Investors 7 Executive Park Dr NE Buckhead 310

33 Gables Emory Point Phase II Clarion 1627 Clifton Rd NE East Atlanta 307

34 The Metro Audubon Communities 1500 Parkwood Cir SE Northwest Atlanta 200

35 The Encore Oxford Properties 3290 Cobb Galleria Pky Northwest Atlanta 339

36 The Place on Ponce - Phase II Carter USA 315 W Ponce de Leon Ave East Atlanta 206

37 Alexan Decatur Trammell Crow Residential Company 160 Clairemont Ave East Atlanta 167

38 Trinity Triangle Centro Development LLC 245 E Trinity Pl East Atlanta 210

39 The Reserve at Decatur Atlantic Realty Partners 2600 Milscott Dr East Atlanta 330

40 One City Walk George S. Morgan Development Co., Inc. 6038 Roswell Rd NE Central Perimeter 203

41 Alta Belmont Wood Partners 400 Belmont Pl Northwest Atlanta 274

42 Avonlea Square - Phase II Quintus Corporation 1836 Roswell St SE Northwest Atlanta 159

totAl 11,292

5 Research & Forecast Report | Q2 2015 | Atlanta Multifamily | Colliers International

Metro Atlanta Housing Permit Activity

Metro Atlanta Employment Overview

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD15

Multifam

ily Permits

 Issued

Metro Atlanta Employment Comparison

METRO AREA RAnk y-O-y EMPlOyMEnT

y-O-y PERcEnT

UnEMPlOyMEnTRATE

Los Angeles/OC 1 144,300 2.5% 6.6%

New York/NNJ 2 140,900 1.5% 5.6%

Dallas-Fort Worth 3 111,700 3.4% 3.8%

Atlanta 4 79,200 3.2% 5.9%

Miami-Ft. Lauderdale 5 76,800 3.2% 5.7%

Seattle 6 67,100 3.7% 4.3%

San Francisco 7 65,100 3.0% 4.1%

Houston 8 59,700 1.8% 4.2%

DC-Arlington 9 59,100 1.9% 4.6%

Chicago 10 57,600 1.3% 5.8%

San Jose 11 55,000 5.5% 4.0%

Detroit 12 51,400 2.7% 6.6%

U.S. Total 3,068,000 2.2% 5.5%

Mercedes-Benz relocates headquarters to Atlanta bringing 400 existing employees to the state and creating 600 new jobs > Atlanta Business Chronicle - February 2015

Kaiser Permanente to put it campus in Midtown Atlanta and create 900 new jobs > Atlanta Business Chronicle - April 2015

Kaiser Permanente eyes Alpharetta for new business unit, could employ several hundred > Atlanta Business Chronicle - July 2015

Coke moving 500 people to city, leaving Cobb County > Atlanta Business Chronicle - June 2015

Sage Software confirms plans to create 400 jobs in Midtown > Atlanta Business Chronicle - June 2015

lincoln financial adding hundreds of jobs, moving to RiverEdge Summit > Bisnow Atlanta - July 2015

61.3

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Source: U.S. Census Bureau

Source: US Dept. of Labor Statistics/Moody’s Analytics

Source: Bureau of Labor Statistics; Metro Level Data May 2015 Average, not Seasonally Adjusted

Atlanta News

6 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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Jaime SlocumbProject Manager | Atlanta

Michael HenryFinancial Analyst | Atlanta

Atlanta Submarkets

Units transacted through 2014

27,000MORE THAN

Group gross transaction value in 2014, $4.5B national company transaction value

$1.7b

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

14TRANSACTING IN

STATES