RubinBrown Apartment Stats 2014

‘14 APARTMENT STATS

A Publication of RubinBrown LLP

Welcome

RubinBrown is pleased to present the 2014 Apartment Statistical Analysis, an annual survey compiled by the Real Estate Services Group.

Each year, data is collected from our clients, as well as other contacts and referrals within the industry, to comprise averages in a variety of markets within the United States.

The accompanying statistical information includes operational data for 2013 and represents approximately 420 apartment projects in roughly 30 states. While these averages are representative of a smaller pool of projects, the trends are usually consistent with those experienced at the national level.

If you have questions about the content of this publication, please contact us (see page 16 for contact information).

RubinBrown Real Estate Services Group

Contents 1 Executive Summary 3 Comparison of Operations 4 Government Assisted 8 Government Assisted by Region 10 Government Assisted by Project Size 12 Market Rate 14 Low Income Tax Credit Projects 16 RubinBrown Real Estate Services Group

@RubinBrownRE

Executive Summary

Industry Update The multifamily rental housing industry posted a strong economic position in 2013, remaining consistent with its 2012 performance, if not in many cases, better. Capitalizing on the slowing improving economy, the apartment sector proved itself to be in a much financially different place than it was 4-5 years earlier when it bore the significant burden of foreclosures and housing failures. Much of this improvement over the last few years can be credited to strong demand, which continued to outpace supply in 2013. However, according to a multifamily market outlook published by Freddie Mac, the discrepancy between supply and demand is slowly disappearing as multifamily constructions starts rose 20% over 2012 and 80% over 2011. As noted in the study, supply could be expected to peak in the coming years, but is currently aligned with the start levels experienced pre-recession. Further, this increase in construction starts has been attributed to steady employment growth experienced in 2013 as the unemployment rate dropped 120 basis points from 2012. With demand continuing to exceed supply, growth in rents has been easy to come by as compared to previous years. In fact, as indicated by REIS, the national average for 2013 reflected a 3.6% increase in rents over 2012 vs. a historical measure of roughly 2.8% year over year. Further, vacancies posted a 2013 rate of 4.1% throughout the country vs. a 5.4% rate, historically. Renter demographics continue to play an important role in the apartment market as well. According to Freddie Mac, the number of renters rose by more the 5 million and 15% since 2006. Of this increase, 38% or nearly 2 million, are renting multifamily dwellings, defined as two or more units per building. The remaining portion of the increase consists of single family home rental, which currently comprises 37% of the total rental market, per Freddie Mac. However, it is important to note that the portion of single family home rentals is expected to slip back to its historical average of 33% as the for-sale home market steadily improves. This decline in single family home rentals would result in approximately 1 million households that will either turn to multifamily housing rentals or home ownership, if affordable. And, with single-family housing prices and interest rates on the rise, it is expected that home affordability will decline, which will further fuel the multifamily housing industry. Likewise, the Joint Center on Housing Studies of Harvard University reported that the industry could face an increase of 4.7 million more renter households by 2023. Additionally, it is not surprising to know that young adults comprise the largest share of all renters in the United States. But, what is more impressive is the fact that the Baby Boomers are starting to move out of the home ownership arena and into renting as they value its flexibility and conveniences available given the aging demographic of that Generation. Market Trends As noted above, 2013 proved to be a great year for the apartment sector. These positive trends are continuing into 2014, as rental growth and occupancy levels expect to remain consistent. Not only have these favorable outcomes led to a stronger financial position for the industry, but they have helped spur property value appreciation to pre-recession levels and have ultimately brought multifamily investors back into the market. According to Freddie Mac, increased investor demand can also be tied to lower risk along with low interest rates and lack of other quality investments that produce higher yields. Of course, coupled with investor appetite is the effect it has on cap rates, which currently hover nationally around 6.4%. Indeed, some markets on the coasts have experienced rates as low as 4%, yet they are anticipated to remain around 7% for years to come.

RubinBrown Apartment Stats 2014 | 1

Executive Summary

Conclusion Overall, the multifamily housing market is primed to perform strongly into the coming years. Economic and demographic indicators point towards a solid, healthy market with continued demand and investor support. With the industry’s success experienced in these last years, it is important not to lose sight of looming threats related to pending legislation not only on immigration reform but, tax reform as a whole that, in the past, has looked to remove key subsidy programs essential to the industry. Despite the strengths of the industry’s mission and overall community impact, it cannot be certain that Congressional pressures won’t dramatically alter the industry’s future outlook. RubinBrown invites you to utilize this study as a development and management tool to compare your financial operations to the operating results of your peers. This study also provides sound comparable data to utilize in formulating an acquisition model. Like all compilations of data, it will be most useful when carefully and properly interpreted. We sincerely thank everyone who took time to participate in RubinBrown’s survey.

Perhaps one of the more significant issues facing the industry is its aging housing stock and what its role is in future years. In fact, the 2012 American Community Survey published by the U.S. Census Bureau indicated that roughly 60% of U.S. rental properties with 20 or more units were built prior to 1980. It is clearly evident that demand remains strong for multifamily housing and yet supply has lagged behind for quite some time. New construction can only do so much to reduce the gap between supply and demand. And with anticipated increases in rental populations in the future, quality affordable housing could be difficult to find in the future without additional focus on current housing stock through renovations and modernizations. In addition to possible increases in renter population and aging inventory, immigration reform is looming on the horizon for the apartment industry. Again, according to the American Community Survey, most immigrants live in rental housing complexes and they also are key components in building and operating these complexes. Without consideration for all stakeholders, Congressional reform could enact restrictions that create negative consequences for the apartment sector as a whole and result in an inability to meet the country’s housing needs.

2 | RubinBrown Apartment Stats 2014

Comparison of Operations

Government Assisted

Market Rate

Total Number of Projects

371

45

Average Project Age In Years

10.8

10.0

Average Number of Units

108

263

Averages Per Unit: Monthly Rent

$702

$780

Square Feet

952

909

Rooms

4.34

4.00

Economic Occupancy

90.8%

85.8%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

36.3%

45.9%

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,421

$8.85

100.0%

$9,358

$10.30

100.0%

Less: Vacancy Loss

(597)

(0.63)

-7.1%

(908)

(1.00)

-9.7%

Collection Loss

(111)

(0.12)

-1.3%

(121)

(0.13)

-1.3%

(67)

(0.07)

-0.8%

(303)

(0.33)

-3.2%

Concession Loss

Rent Collected

7,646

$8.03

90.8%

8,026

8.84

85.8%

400

0.42

4.8%

1,088

1.20

11.6%

Other Income

$8,046

$8.45

95.6%

$9,114

$10.04

97.4%

Total Income

Expenses

Salaries and Personnel

$1,079

$1.13

12.8%

$939

$1.03

10.0%

Administrative

469

0.49

5.6%

438

0.48

4.7%

Marketing

52

0.05

0.6%

153

0.17

1.6%

Management Fees

449

0.47

5.3%

419

0.46

4.5%

Utilities

867

0.91

10.3%

664

0.73

7.1%

Carpeting

125

0.13

1.5%

130

0.14

1.4%

Painting

54

0.06

0.6%

172

0.19

1.8%

Landscaping

165

0.17

2.0%

174

0.19

1.9%

HVAC

52

0.05

0.6%

38

0.04

0.4%

Appliances

46

0.05

0.5%

42

0.05

0.4%

Plumbing

53

0.06

0.6%

52

0.06

0.6%

Electrical

25

0.03

0.3%

23

0.03

0.2%

Other Repairs and Services

813

0.85

9.7%

419

0.46

4.5%

Insurance

327

0.34

3.9%

311

0.34

3.3%

Real Estate Taxes

467

0.49

5.5%

841

0.93

9.0%

82

0.09

1.0%

120

0.13

1.3%

Other Taxes

Total Expenses

$5,125

$5.37

60.8%

$4,935

$5.43

52.7%

Net Operating Income Before Debt Service and Depreciation

$2,921

$3.08

34.8%

$4,179

$4.61

44.7%

Capital Expenditures

$185

$0.19

2.2%

$1,025

$1.13

11.0%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2014 | 3

Government Assisted

2013

2012

2011

Total Number of Projects

371

386

372

Average Number of Units

108

107

105

Averages Per Unit:

Monthly Rent

$702

$699

$721

Square Feet

952

932

964

Rooms

4.34

4.31

4.32

Economic Occupancy

90.8%

88.6%

89.4%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

36.3%

35.4%

40.0%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,421

$8.85

100.0%

$8,383

$8.99

100.0%

$8,653

$8.98

100.0%

Less: Vacancy Loss

(597)

(0.63)

-7.1%

(758)

(0.81)

-9.0%

(704)

(0.73)

-8.1%

Collection Loss

(111)

(0.12)

-1.3%

(127)

(0.14)

-1.5%

(130)

(0.13)

-1.5%

Concession Loss

(67)

(0.07)

-0.8%

(79)

(0.08)

-0.9%

(84)

(0.09)

-1.0%

Rent Collected

7,646

8.03

90.8%

7,419

7.96

88.6%

7,735

8.03

89.4%

Other Income

400

0.42

4.8%

375

0.40

4.5%

469

0.49

5.4%

Total Income

$8,046

$8.45

95.6%

$7,794

$8.36

93.1%

$8,204

$8.52

94.8%

Expenses

Salaries and Personnel

$1,079

$1.13

12.8%

$1,031

$1.11

12.3%

$892

$0.93

10.3%

Administrative

469

0.49

5.6%

453

0.49

5.4%

454

0.47

5.2%

Marketing

52

0.05

0.6%

52

0.06

0.6%

102

0.11

1.2%

Management Fees

449

0.47

5.3%

434

0.47

5.2%

444

0.46

5.1%

Utilities

867

0.91

10.3%

784

0.84

9.4%

831

0.86

9.6%

All Repair, Maintenance and Contract Services

1,333

1.40

15.8%

1,428

1.54

17.0%

1,475

1.53

17.1%

Insurance

327

0.34

3.9%

284

0.30

3.4%

350

0.36

4.0%

Real Estate Taxes

467

0.49

5.5%

464

0.50

5.5%

514

0.53

5.9%

Other Taxes

82

0.09

1.0%

103

0.11

1.2%

110

0.11

1.3%

Total Expenses

$5,125

$5.37

60.8%

$5,033

$5.42

60.0%

$5,172

$5.36

59.7%

Net Operating Income Before Debt Service and Depreciation

$2,921

$3.08

34.8%

$2,761

$2.94

33.1%

$3,032

$3.16

35.1%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

4 | RubinBrown Apartment Stats 2014

Average Monthly Rent per Unit

2010

2009

$900 $1,000

363

226

115

129

$800

$721

$702

$699

$673

$662

$700

$673

$662

$600

940

926

4.34

4.19

$500

$400

86.9%

86.9%

$300

$200

$100

37.8%

38.2%

$0

2013

2012

2011

2010

2009

A

B

C

A

B

C

Economic Occupancy

90% 100%

$8,078

$8.59

100.0%

$7,948

$8.58

100.0%

90.8%

89.4%

88.6%

86.9%

86.9%

(826)

(0.88)

-10.2%

(825)

(0.89)

-10.4%

(128)

(0.14)

-1.6%

(133)

(0.14)

-1.7%

80%

(105)

(0.11)

-1.3%

(82)

(0.09)

-1.0%

70%

7,019

7.46

86.9%

6,908

7.46

86.9%

60%

410

0.44

5.1%

331

0.36

4.2%

50%

$7,429

$7.90

92.0%

$7,239

$7.82

91.1%

40%

30%

20%

$801

$0.85

9.9%

$781

$0.84

9.8%

10%

422

0.45

5.2%

367

0.40

4.6%

0%

96

0.10

1.2%

89

0.10

1.1%

2013

2012

2011

2010

2009

406

0.43

5.0%

390

0.42

4.9%

717

0.76

8.9%

726

0.78

9.1%

Gross Potential Rent vs. Net Operating Income per Square Foot

1,324

1.41

16.4%

1,253

1.35

15.8%

298

0.32

3.7%

283

0.31

3.6%

$3.08 $8.85

2013

461

0.49

5.7%

471

0.51

5.9%

$2.94 $8.99

2012

95

0.10

1.2%

107

0.12

1.4%

$3.16 $8.98

$4,620

$4.91

57.2%

$4,467

$4.83

56.2%

2011

$2.99 $8.59

2010

$2,809

$2.99

34.8%

$2,772

$2.99

34.9%

$2.99 $8.58

2009

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2014 | 5

Government Assisted

Expense Trends per Unit

$1,079

$1,031

Salaries and Personnel

$892

$801

$781

$521

$505

Administrative and Marketing

$556

$518

$456

$1,333

$1,428

Contract Services and Repairs & Maintenance

$1,475

$1,324

$1,253

$876

$851

Taxes and Insurance

$974

$854

$861

$0

$250

$500

$750

$1,000 $1,250 $1,500

2012

2011

2010

2013

2009

6 | RubinBrown Apartment Stats 2014

RubinBrown Apartment Stats 2014 | 7

Government Assisted by Region

North

East/Northeast

Midwest

South/Southeast

Total Number of Projects

18

61

187

61

Average Project Age In Years

10.5

12.5

10.3

10.3

Average Number of Units

105

121

92

114

Averages Per Unit: Monthly Rent

$698

$824

$660

$681

Square Feet

1,011

946

932

1,038

Rooms

4.36

4.51

4.28

4.89

Economic Occupancy

92.4%

90.7%

89.6%

90.8%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

32.5%

43.3%

38.2%

29.5%

A

B

C

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,370

$8.28 100.0%

$9,885 $10.45 100.0%

$7,917

$8.49 100.0%

$8,177

$7.88 100.0%

Less: Vacancy Loss

(520) (0.51)

-6.2%

(713) (0.75)

-7.2%

(638) (0.68)

-8.1%

(556) (0.54)

-6.8%

Collection Loss

(83) (0.08)

-1.0%

(125) (0.13)

-1.3%

(99) (0.11)

-1.3%

(127) (0.12)

-1.6%

(35) (0.03)

-0.4%

(80) (0.08)

-0.8%

(76) (0.08)

-1.0%

(64) (0.06)

-0.8%

Concession Loss

Rent Collected

7,732

7.66

92.4%

8,967

9.49

90.7%

7,104

7.62

89.6%

7,430

7.16

90.8%

577

0.57

6.9%

480

0.51

4.9%

424

0.46

5.4%

310

0.30

3.8%

Other Income

$8,309

$8.23 99.3%

$9,447 $10.00 95.6%

$7,528

$8.08 95.0%

$7,740

$7.46 94.6%

Total Income

Expenses

Salaries and Personnel

$1,080

$1.07

12.9%

$1,050

$1.11

10.6%

$1,035

$1.11

13.1%

$1,170

$1.13

14.3%

Administrative

507

0.50

6.1%

392

0.41

4.0%

441

0.47

5.6%

533

0.51

6.5%

Marketing

48

0.05

0.6%

48

0.05

0.5%

54

0.06

0.7%

49

0.05

0.6%

Management Fees

447

0.44

5.3%

505

0.53

5.1%

404

0.43

5.1%

463

0.45

5.7%

Utilities

975

0.96

11.7%

894

0.95

9.0%

779

0.84

9.8%

837

0.81

10.2%

Carpeting

157

0.16

1.9%

123

0.13

1.2%

108

0.12

1.4%

133

0.13

1.6%

Painting

33

0.03

0.4%

49

0.05

0.5%

38

0.04

0.5%

121

0.12

1.5%

Landscaping

135

0.13

1.6%

179

0.19

1.8%

135

0.14

1.7%

225

0.22

2.8%

HVAC

41

0.04

0.5%

56

0.06

0.6%

44

0.05

0.6%

68

0.07

0.8%

Appliances

25

0.03

0.3%

38

0.04

0.4%

35

0.04

0.4%

65

0.06

0.8%

Plumbing

64

0.06

0.8%

46

0.05

0.5%

32

0.03

0.4%

52

0.05

0.6%

Electrical

18

0.02

0.2%

24

0.03

0.2%

19

0.02

0.2%

27

0.03

0.3%

Other Repairs and Services

900

0.89

10.8%

844

0.89

8.5%

759

0.81

9.6%

819

0.79

10.0%

Insurance

281

0.28

3.4%

288

0.30

2.9%

311

0.33

3.9%

431

0.42

5.3%

Real Estate Taxes

652

0.64

7.8%

775

0.82

7.8%

406

0.44

5.1%

328

0.32

4.0%

245

0.24

2.9%

50

0.05

0.5%

51

0.05

0.6%

134

0.13

1.6%

Other Taxes

Total Expenses

$5,608

$5.54 67.2%

$5,361

$5.66 54.1%

$4,651

$4.98

58.7%

$5,455

$5.29

66.6%

Net Operating Income Before Debt Service & Depreciation

$2,701

$2.69 32.1%

$4,086

$4.34 41.5%

$2,877

$3.10

36.3%

$2,285

$2.17

28.0%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

8 | RubinBrown Apartment Stats 2014

Monthly Rent per Unit

South/Southwest

West/Northwest

21

23

10.6

11.1

110

134

$777

$774

754

874

3.69

3.00

91.9%

94.9%

33.5%

26.6%

Net Operating Income per Square Foot

A

B

C

A

B

C

$9,326 $12.37 100.0%

$9,284 $10.62 100.0%

(591) (0.78)

-6.3%

(384) (0.44)

-4.1%

(125) (0.17)

-1.3%

(114) (0.13)

-1.2%

(50) (0.07)

-0.5%

(26)

0.03

-0.3%

8,560

11.35

91.9%

8,760

10.08

94.4%

372

0.49

4.0%

246

0.28

2.7%

$8,932 $11.84 95.9%

$9,006 $10.36 97.1%

$1,235

$1.64

13.2%

$1,277

$1.46

13.8%

625

0.83

6.7%

606

0.69

6.5%

Economic Occupancy

99

0.13

1.1%

31

0.04

0.3%

512

0.68

5.5%

580

0.66

6.2%

1,190

1.58

12.8%

1,267

1.45

13.6%

110

0.15

1.2%

209

0.24

2.3%

45

0.06

0.5%

42

0.05

0.4%

178

0.24

1.9%

214

0.24

2.3%

81

0.11

0.9%

45

0.05

0.5%

56

0.07

0.6%

97

0.11

1.0%

81

0.11

0.9%

170

0.19

1.9%

34

0.05

0.4%

56

0.06

0.6%

727

0.96

7.8%

1,226

1.40

13.2%

380

0.50

4.1%

323

0.37

3.5%

489

0.65

5.2%

342

0.39

3.7%

101

0.13

1.1%

129

0.15

0.4%

$5,943

$7.89

63.9%

$6,614

$7.55 70.2%

West/Northwest

North

East/Northeast

$2,989

$3.95

32.0%

$2,392

$2.81 26.9%

South/Southwest

Midwest

South/Southeast

RubinBrown Apartment Stats 2014 | 9

Government Assisted by Project Size

0-50 Units

51-100 Units

101-150 Units

151-200 Units

Over 200 Units

Total Number of Projects

88

108

95

45

35

Average Project Age In Years

10.3

9.4

11.1

13.5

12.7

Average Number of Units

31

76

121

169

271

Averages Per Unit: Monthly Rent

$635

$682

$723

$761

$694

Square Feet

1,060

896

907

957

948

Rooms

4.80

4.09

4.16

4.29

4.36

Economic Occupancy

91.9%

91.9%

91.0%

90.3%

89.8%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

30.5%

35.5%

37.5%

32.7%

40.4%

A

B

A

B

A

B

A

B

A

B

Revenues

Gross Potential Rent

$7,621

$7.19

$8,185

$9.14

$8,670

$9.56

$9,131

$9.54

$8,333

$8.79

Less: Vacancy Loss

(404) (0.38)

(490) (0.55)

(630) (0.69)

(680) (0.71)

(666) (0.70)

Collection Loss

(145) (0.14)

(95) (0.11)

(94) (0.10)

(126) (0.13)

(130) (0.14)

Concession Loss

(70) (0.07)

(77) (0.09)

(60) (0.07)

(79) (0.08)

(58) (0.06)

Rent Collected

7,002

6.60

7,523

8.39

7,886

8.70

8,246

8.62

7,479

7.89

Other Income

470

0.44

324

0.36

405

0.45

379

0.40

474

0.50

Total Income

$7,472

$7.04

$7,847

$8.75

$8,291

$9.15

$8,625

$9.02

$7,953

$8.39

Expenses

Salaries and Personnel

$1,029

$0.97

$1,144

$1.28

$1,125

$1.24

$1,181

$1.23

$943

$1.00

Administrative

677

0.64

545

0.61

478

0.53

455

0.48

356

0.38

Marketing

28

0.03

50

0.06

44

0.05

66

0.07

61

0.06

Management Fees

435

0.41

440

0.49

474

0.52

479

0.50

426

0.45

Utilities

738

0.70

753

0.84

929

1.02

1,076

1.12

794

0.84

Carpeting

91

0.09

125

0.14

149

0.16

144

0.15

96

0.10

Painting

71

0.07

59

0.07

39

0.04

75

0.08

50

0.05

Landscaping

167

0.16

174

0.19

183

0.20

178

0.19

132

0.14

HVAC

54

0.05

60

0.07

49

0.05

67

0.07

36

0.04

Appliances

37

0.04

43

0.05

44

0.05

67

0.07

37

0.04

Plumbing

26

0.02

41

0.05

55

0.06

88

0.09

40

0.04

Electrical

14

0.01

24

0.03

25

0.03

36

0.04

20

0.02

Other Repairs and Services

864

0.82

746

0.83

807

0.89

971

1.01

773

0.82

Insurance

386

0.36

318

0.36

311

0.34

299

0.31

375

0.40

Real Estate Taxes

433

0.41

438

0.49

406

0.45

516

0.54

556

0.59

Other Taxes

143

0.14

105

0.12

68

0.07

104

0.11

48

0.05

Total Expenses

$5,193

$4.92

$5,065

$5.68

$5,186

$5.70

$5,802

$6.06

$4,743

$5.02

Net Operating Income Before Debt Service and Depreciation

$2,279

$2.12

$2,782

$3.07

$3,105

$3.45

$2,823

$2.96

$3,210

$3.37

Capital Expenditures

$175

$0.17

$190

$0.21

$131

$0.14

$250

$0.26

$143

$0.15

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

10 | RubinBrown Apartment Stats 2014

RubinBrown Apartment Stats 2014 | 11

Market Rate

2013

2012

2011

Total Number of Projects

45

34

35

Average Number of Units

263

248

246

Averages Per Unit:

Monthly Rent

$780

$766

$674

Square Feet

909

926

938

Rooms

4.00

4.14

4.20

Economic Occupancy

85.8%

85.0%

88.6%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

45.9%

49.0%

49.4%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$9,358

$10.30

100.0%

$9,193

$9.93

100.0%

$8,093

$8.63

100.0%

Less: Vacancy Loss

(908)

(1.00)

-9.7%

(824)

(0.89)

-9.0%

(438)

(0.47)

-5.4%

Collection Loss

(121)

(0.13)

-1.3%

(116)

(0.13)

-1.3%

(62)

(0.07)

-0.8%

(303)

(0.33)

-3.2%

(435)

(0.47)

-4.7%

(420)

(0.45)

-5.2%

Concession Loss

Rent Collected

8,026

8.84

85.8%

7,818

8.44

85.0%

7,173

7.64

88.6%

1,088

1.20

11.6%

821

0.89

8.9%

630

0.67

7.8%

Other Income

$9,114

$10.04

97.4%

$8,639

$9.33

93.9%

$7,803

$8.31

96.4%

Total Income

Expenses

Salaries and Personnel

$939

$1.03

10.0%

$976

$1.05

10.6%

$762

$0.81

9.4%

Administrative

438

0.48

4.7%

305

0.33

3.3%

339

0.36

4.2%

Marketing

153

0.17

1.6%

127

0.14

1.4%

104

0.11

1.3%

Management Fees

419

0.46

4.5%

350

0.38

3.8%

319

0.34

4.0%

Utilities

664

0.73

7.1%

596

0.64

6.5%

584

0.62

7.2%

All Repairs and Maintenance and Contract Services

1,050

1.16

11.2%

1,054

1.14

11.6%

883

0.94

10.9%

Insurance

311

0.34

3.3%

264

0.28

2.9%

233

0.25

2.9%

Real Estate Taxes

841

0.93

9.0%

690

0.75

7.5%

647

0.69

8.0%

120

0.13

1.3%

48

0.05

0.5%

76

0.08

0.9%

Other Taxes

Total Expenses

$4,935

$5.43

52.7%

$4,410

$4.76

48.1%

$3,947

$4.20

48.8%

Net Operating Income Before Debt Service and Depreciation

$4,179

$4.61

44.7%

$4,229

$4.57

45.8%

$3,856

$4.11

47.6%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

12 | RubinBrown Apartment Stats 2014

Average Monthly Rent per Unit

2010

2009

$900 $1,000

20

14

$809

238

169

$780

$766

$763

$800

$674

$700

$763

$809

$600

932

823

4.30

4.37

$500

$400

82.8%

87.7%

$300

$200

$100

45.5%

47.5%

$0

2013

2012

2011

2010

2009

A

B

C

A

B

C

Economic Occupancy

$9,153

$9.82

100.0%

$9,707

$11.80

100.0%

90% 100%

88.6%

(942)

(1.01)

-10.3%

(902)

(1.02)

-9.3%

87.7%

85.8%

85.0%

82.8%

(113)

(0.12)

-1.2%

(52)

(0.06)

-0.5%

80%

(520)

(0.56)

-5.7%

(220)

(0.27)

-2.5%

70%

7,578

8.13

82.8%

8,533

10.45

87.7%

60%

692

0.74

7.6%

502

0.61

5.2%

50%

$8,270

$8.87

90.4%

$9,035

$10.96

92.9%

40%

30%

20%

$794

$0.85

8.7%

$837

$1.02

8.6%

323

0.35

3.5%

465

0.57

4.8%

10%

141

0.15

1.5%

126

0.15

1.3%

0%

2013

2012

2011

2010

2009

330

0.35

3.6%

357

0.43

3.7%

645

0.69

7.1%

778

0.95

8.0%

1,137

1.22

12.4%

1,138

1.38

11.7%

Gross Potential Rent vs. Net Operating Income per Square Foot

319

0.34

3.5%

297

0.36

3.1%

673

0.72

7.3%

602

0.73

6.2%

$4.61 $10.30

2013

145

0.15

1.6%

139

0.17

1.4%

$4.57 $9.93

2012

$4,507

$4.82

49.2%

$4,739

$5.76

48.8%

$4.11 $8.63

2011

$3,763

$4.05

41.2%

$4,296

$5.20

44.1%

$4.05 $9.82

2010

$5.20 $11.80

2009

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2014 | 13

Low Income Tax Credit Projects

2013

2011

2010

Total Number of Projects

362

367

363

Average Number of Units

107

109

106

Averages Per Unit:

Monthly Rent

$798

$697

$722

Square Feet

955

947

952

Rooms

4.36

4.38

4.37

Economic Occupancy

90.6%

88.8%

89.2%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

36.5%

35.4%

36.9%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,429

$8.83

100.0%

$8,370

$8.84

100.0%

$8,665

$9.11

100.0%

Less: Vacancy Loss

(617)

(0.65)

-7.3%

(748)

(0.79)

-8.9%

(718)

(0.75)

-8.3%

Collection Loss

(111)

(0.12)

-1.3%

(129)

(0.14)

-1.5%

(130)

(0.14)

-1.5%

(69)

(0.07)

-0.8%

(67)

(0.07)

-0.8%

(83)

(0.09)

-1.0%

Concession Loss

Rent Collected

7,632

7.99

90.6%

7,426

7.84

88.8%

7,734

8.13

89.2%

404

0.42

4.8%

373

0.39

4.4%

465

0.49

5.4%

Other Income

$8,036

$8.41

95.4%

$7,799

$8.23

93.2%

$8,199

$8.62

94.6%

Total Income

Expenses

Salaries and Personnel

$1,076

$1.13

12.8%

$1,031

$1.09

12.3%

$890

$0.94

10.3%

Administrative

457

0.48

5.4%

450

0.48

5.4%

453

0.48

5.2%

Marketing

51

0.05

0.6%

51

0.05

0.6%

102

0.11

1.2%

Management Fees

447

0.47

5.3%

434

0.46

5.2%

444

0.47

5.1%

Utilities

852

0.89

10.1%

792

0.84

9.5%

829

0.87

9.6%

All Repair, Maintenance and Contract Services

1,353

1.42

16.1%

1,435

1.52

17.1%

1,476

1.55

17.0%

Insurance

327

0.34

3.9%

282

0.30

3.4%

348

0.37

4.0%

Real Estate Taxes

463

0.49

5.5%

459

0.48

5.5%

518

0.54

6.0%

74

0.08

0.9%

103

0.11

1.2%

110

0.12

1.3%

Other Taxes

Total Expenses

$5,100

$5.35

60.6%

$5,037

$5.33

60.2%

$5,170

$5.45

59.7%

Net Operating Income Before Debt Service and Depreciation

$2,936

$3.06

34.8%

$2,762

$2.90

33.0%

$3,029

$3.17

34.9%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

14 | RubinBrown Apartment Stats 2014

Average Monthly Rent per Unit

2009

2008

$900 $1,000

354

122

$798

117

125

$800

$722

$697

$680

$676

$700

$676

$680

$600

947

983

4.38

4.63

$500

$400

86.9%

87.1%

$300

$200

$100

37.8%

37.4%

$0

2013

2012

2011

2010

2009

A

B

C

A

B

C

Economic Occupancy

$8,110

$8.56

100.0%

$8,159

$8.30

100.0%

90% 100%

90.6%

89.2%

88.8%

(828)

(0.87)

-10.2%

(838)

(0.85)

-10.3%

87.1%

86.9%

(130)

(0.14)

-1.6%

(137)

(0.14)

-1.7%

80%

(106)

(0.11)

-1.3%

(77)

(0.08)

-0.9%

70%

7,046

7.44

86.9%

7,107

7.23

87.1%

60%

413

0.44

5.1%

342

0.35

4.2%

50%

$7,459

$7.88

92.0%

$7,449

$7.58

91.3%

40%

30%

20%

$803

$0.85

9.9%

$764

$0.78

9.4%

423

0.45

5.2%

364

0.37

4.5%

10%

96

0.10

1.2%

87

0.09

1.1%

0%

2013

2012

2011

2010

2009

408

0.43

5.0%

390

0.40

4.8%

720

0.76

8.9%

799

0.81

9.8%

1,334

1.40

16.4%

1,351

0.14

16.5%

Gross Potential Rent vs. Net Operating Income per Square Foot

298

0.31

3.7%

276

0.28

3.4%

463

0.49

5.7%

523

0.53

6.4%

$3.06 $8.83

2013

95

0.10

1.2%

109

0.11

1.3%

$2.90 $8.84

2012

$4,640

$4.89

57.2%

$4,663

$4.75

57.2%

$3.17 $9.11

2011

$2,819

$2.99

34.8%

$2,786

$2.83

34.1%

$2.99 $8.56

2010

$2.83 $8.30

2009

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2014 | 15

RubinBrown Real Estate Services Group

· HOPE VI consulting · Senior housing consulting · Business valuations · Low-income housing tax credit consulting and compliance · Affordable housing consulting and compliance · Historic rehabilitation tax credit consulting · Sales and Use Tax consulting · Governmental cost certifications (FHA & state housing agency) · NMTC consulting and compliance · Renewable energy consulting and compliance · Design and evaluation of financial reporting systems and internal control systems · Capital asset segregation analysis · Construction draw accounting and processing · Structured and complex deal structuring · Assistance in obtaining debt/equity financing · Like-kind exchange consulting

For more than 30 years, RubinBrown’s Real Estate Services Group has developed a strong reputation nationally as a leader in accounting and advisory services. Today, the group provides specialized services to real estate entities from coast to coast. The RubinBrown Real Estate Services Group provides a full range of assurance, tax, business planning, and consulting services to: · Investment funds · Real estate partnerships · Developers

· Management companies · Governmental agencies · Syndicators and investors · Financial institutions · Construction-related companies

RubinBrown Real Estate Services Group’s services include: · Financial forecasts and projections · Cash flow and operational analyses · Specialized and complex tax planning · Troubled project workouts

· Strategic planning · Feasibility studies

16 | RubinBrown Apartment Stats 2014

Through the years, our clients have grown to depend on our expertise in four key areas of the real estate sector:

Bryan C. Keller, CPA Partner-In Charge 314.290.3341 bryan.keller@rubinbrown.com

Affordable Housing: This complex and highly regulated industry has been one that RubinBrown has focused on since the early days of HUD and the advent of the federal low-income housing tax credit program. Historic Tax Credit Services: RubinBrown has extensive experience with consulting on historic rehabilitation projects across the country. New Markets Tax Credit Services: In addition to initial program guidance and consulting, RubinBrown experts can help you with NMTC application assistance. Renewable Energy: There are many new financial incentives for companies in the renewable energy sector. We can help you sort through the opportunities and provide financial guidance to move your businesses forward. In addition, the RubinBrown Real Estate Services Group regularly sponsors seminars and roundtables dealing with current topics affecting the real estate industry.

Dave Herdlick, CPA Partner & Vice Chair 314.290.3383 dave.herdlick@rubinbrown.com

Jeff Cunningham, CPA Partner 303.952.1257 jeffrey.cunningham@rubinbrown.com

RubinBrown Apartment Stats 2014 | 17

RubinBrown LLP

@RubinBrown

Denver Office 1900 16th Street Suite 300 Denver, Colorado 80202

Kansas City Office 10975 Grandview Drive Building 27, Suite 600 Overland Park, Kansas 66210

St. Louis Office One North Brentwood Suite 1100 St. Louis, Missouri 63105

St. Louis Cortex Office 4240 Duncan Avenue CIC@4240, Suite 200 St. Louis, Missouri 63110

ph: 303.698.1883 fax: 303.777.4458

ph: 913.491.4144 fax: 913.491.6821

ph: 314.290.3300 fax: 314.290.3400

ph: 314.290.3300 fax: 314.290.3400

For more information, visit www.RubinBrown.com

18 | RubinBrown Apartment Stats 2014