RubinBrown Apartment Stats 2015

’15 APARTMENT STATS

A Publication of RubinBrown LLP

Welcome

RubinBrown is pleased to present the 2015 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 2014 and represents approximately 555 apartment projects in roughly 36 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 2014 and exceeded many industry and economists’ expectations. The construction in 2014 of multifamily units reached levels that had not been seen since the 1980’s. It should be noted that despite this rise in multifamily units, it is not going to make a significant impact on vacancy rates due to the lagging market conditions in the single-family market and the high demand in the multifamily rental market. A strong movement from single-family housing to multifamily housing is being led by demographics, continued growth and uncertainty in the labor market and an aging population. The Federal Reserve Bank of Kansas City published an article that states, “The longer term outlook is especially positive for multifamily construction, reflecting the aging of the baby boomers and an associated shift in demand from single-family to multifamily housing. By the end of the decade, multifamily construction is likely to peak at a level nearly two-thirds higher than its highest annual level during the 1990’s and 2000’s.” Although 2014 saw a significant increase in new multifamily rental units, rents continued to grow and vacancy rates continued to remain low. Overall the supply and demand of multifamily units has remained in check and in most areas there is a continued need for the supply of units to increase in order to keep up with the demand. We continued to see an increase in the construction of multifamily units throughout 2015 and early into 2016. According to a multifamily outlook published by Freddie Mac, completions are expected to rise above the historical average of 270,000 units, but are not expected to exceed the 440,000 units needed annually to meet the growing housing demand. With the demand still exceeding the supply, many landlords were able to increase rents. According to the Real Estate Investment Society (REIS), gross revenue per unit is up 20% over the last five years. REIS points out that the last time this level of growth was seen was for the five years period ending 2002, when the revenue growth was 23%. Vacancy levels have declined compared to 2013 by 10 basis points, reaching a 13-year low of 4.2%. According to the Joint Center for Housing Studies (JCHS) of Harvard University, the share of U.S. households that rent rose to a 20-year high of 35.5% in 2014, marking the tenth consecutive year of renter household growth. Renter household growth has averaged 770,000 annually since 2004.

According to Freddie Mac, one of the key factors in multifamily renting is age. The largest group of renter’s is in the age group of 25-34, known as Millennials. This group should reach a peak this year or next and continue to rise until 2023, keeping the demand for multifamily units high. It is also expected that as the economy continues to improve the demand for housing will continue to increase as Millennials begin forming their own households. Some of the reasons why the largest group of renters are Millennials include tight underwriting standards for mortgages and lower credit scores due to the slow employment market and lower entry salaries. The study from the JCHS goes on to point out the soaring demand in the rental market is often attributed to Millennials age group preference to rent. Households in the 45-64 age group have accounted for about twice the share of renter growth in 2004-2014 than households in the 35 age group. In 2014, the 55 and over age group households made up only 25% of renters, but contributed 42% of renter household growth over the preceding decade. Market Trends The rental housing market remained strong in 2015, as demand for rental housing is likely to continue to increase. According to JCHS projections, individuals that are currently under the age of 30 will form over 20 million new households between 2015 and 2025, and most of them will be renters. A large increase in renters over 65 is also expected as more individuals in the baby boom generation downsize into the rental market. With the increased demand and revenue in the multifamily sector, property prices grew in 2014. Property values increased in 2014 about 15% as reported by Real Capital Analytics. It is forecasted that this property appreciation will continue as investor demand for multifamily properties remains robust. The multifamily capitalization rates ended 2014 at 6%, a decrease of 16 basis points from 2013. The number of renters living in housing that they can’t afford continues to grow each year. Federal assistance has not been able to keep up with the need of residents and has limited some new construction and upkeep of currently subsidized units. Many neighborhoods still have not experienced a housing recovery. The rising cost of housing is not isolated to just the coasts anymore. Affordable housing shortages are growing in every state. Enterprise Community Partners, Inc. has stated that more than one in four renter families across

RubinBrown Apartment Stats 2015 | 1

Executive Summary

and if policies and procedures need to be examined or changed. Unfortunately, there is no clear guidance contained in the Supreme Court’s opinion to answer these questions. Conclusion In 2014, single-family homeownership continued to fall and single-family construction remained near historical lows. However, the multifamily market experienced a strong year in 2014 which is expected to continue. Due to favorable demographics and an overall stronger economy, demand exceeds supply even with the increase in completed properties available. We expect to see completions remain above the long-term annual average for 2016. Depending on how many new households are formed and how much demand is released, supply could begin to out-pace demand in the coming years. 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.

the country now pay more than half of their income on housing, a staggering statistic that has leapt from 7.5 million households to 11.4 million households since 2001 with no signs of stopping. In 2009, the Secretary of Veterans Affairs, Eric Shinseki, set a goal to end veteran homelessness by the end of 2015. The government showed support for this goal by increasing funding for fiscal years 2013 and 2014 to end homelessness among veterans. Since 2009 the number of homeless veterans has decreased by 33%. According to data collected during a 2014 point-in-time count, 49,433 veterans were homeless on a single night during January 2014. On June 25, 2015, the United States Supreme Court released its decision in Texas Department of Housing and Community Development v. The Inclusive Communities Project, Inc. The court ruled in a 5 to 4 vote that the Federal Fair Housing Act allowed plaintiffs and regulators to seek redress for housing discrimination based on a demonstration of disparate impact. Disparate impact is the adverse effect of a practice that is neutral and non-discriminatory in its intent, however, disproportionately affects individuals belonging to a particular protected class. Because of the Court’s opinion, owners and operators may question the impact on day-to-day operations of multifamily units

2 | RubinBrown Apartment Stats 2015

Comparison of Operations

Government Assisted

Market Rate

Total Number of Projects

516

38

Average Project Age In Years

11.8

10.4

Average Number of Units

108

279

Averages Per Unit: Monthly Rent

$735

$806

Square Feet

944

942

Rooms

4.46

4.00

Economic Occupancy

89.1%

86.2%

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

35.3%

47.8%

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,816

$9.34

100.0%

$9,666

$10.26

100.0%

Less: Vacancy Loss

(744)

(0.79)

-8.4%

(887)

(0.94)

-9.2%

Collection Loss

(123)

(0.13) (0.10)

-1.4% -1.1%

(96)

(0.10) (0.37)

-1.0% -3.6% 86.2% 10.7% 96.9%

(93)

(349)

Concession Loss

Rent Collected

7,856

$8.32

89.1%

8,334 1,039

8.85 1.10

456

0.48

5.2%

Other Income Total Income

$8,312

$8.80

94.3%

$9,373

$9.95

Expenses

Salaries and Personnel

$1,068

$1.13

12.1%

$981

$1.04

10.1%

Administrative

496

0.53

5.6%

427

0.45

4.4%

Marketing

56

0.06

0.6%

139

0.15

1.4%

Management Fees

467

0.49

5.3%

395

0.42

4.1%

Utilities

827

0.88

9.4%

665

0.71

6.9%

Carpeting

133

0.14

1.5%

111

0.12

1.1%

Painting

54

0.06

0.6%

121

0.13

1.3%

Landscaping

128

0.14

1.5%

138

0.15

1.4%

HVAC

51

0.05

0.6%

27

0.03

0.3%

Appliances

54

0.06

0.6%

55

0.06

0.6%

Plumbing

47

0.05

0.5%

46

0.05

0.5%

Electrical

64

0.07

0.7%

47

0.05

0.5%

Other Repairs and Services

855

0.91

9.7%

491

0.52

5.1%

Insurance

348

0.37

4.0%

267

0.28

2.8%

Real Estate Taxes

511

0.54 0.09

5.8% 1.0%

900

0.95 0.09

9.3% 0.8%

84

82

Other Taxes

Total Expenses

$5,243

$5.57

59.5%

$4,892

$5.20

50.6%

Net Operating Income Before Debt Service and Depreciation

$3,069

$3.23

34.8%

$4,481

$4.75

46.3%

Capital Expenditures

$973

$1.03

11.0%

$565

$0.60

5.8%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2015 | 3

Government Assisted

2014

2013

2012

Total Number of Projects

516

371

386

Average Number of Units

108

108

107

Averages Per Unit: Monthly Rent

$735

$702

$699

Square Feet

944

952

932

Rooms

4.46

4.34

4.31

Economic Occupancy

89.1%

90.8%

88.6%

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

35.3%

36.3%

35.4%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,816

$9.34

100.0%

$8,421

$8.85

100.0%

$8,383

$8.99

100.0%

Less: Vacancy Loss

(744)

(0.79)

-8.4%

(597)

(0.63)

-7.1%

(758)

(0.81)

-9.0%

Collection Loss

(123)

(0.13)

-1.4%

(111)

(0.12)

-1.3%

(127)

(0.14)

-1.5%

Concession Loss

(93)

(0.10)

-1.1%

(67)

(0.07)

-0.8%

(79)

(0.08)

-0.9%

Rent Collected

7,856

8.32

89.1%

7,646

8.03

90.8%

7,419

7.96

88.6%

Other Income

456

0.48

5.2%

400

0.42

4.8%

375

0.40

4.5%

Total Income

$8,312

$8.80

94.3%

$8,046

$8.45

95.6%

$7,794

$8.36

93.1%

Expenses

Salaries and Personnel

$1,068

$1.13

12.1%

$1,079

$1.13

12.8%

$1,031

$1.11

12.3%

Administrative

496

0.53

5.6%

469

0.49

5.6%

453

0.49

5.4%

Marketing

56

0.06

0.6%

52

0.05

0.6%

52

0.06

0.6%

Management Fees

467

0.49

5.3%

449

0.47

5.3%

434

0.47

5.2%

Utilities

827

0.88

9.4%

867

0.91

10.3%

784

0.84

9.4%

All Repair, Maintenance and Contract Services

1,386

1.48

15.7%

1,333

1.40

15.8%

1,428

1.54

17.0%

Insurance

348

0.37

4.0%

327

0.34

3.9%

284

0.30

3.4%

Real Estate Taxes

511

0.54

5.8%

467

0.49

5.5%

464

0.50

5.5%

Other Taxes

84

0.09

1.0%

82

0.09

1.0%

103

0.11

1.2%

Total Expenses

$5,243

$5.57

59.5%

$5,125

$5.37

60.8%

$5,033

$5.42

60.0%

Net Operating Income Before Debt Service and Depreciation

$3,069

$3.23

34.8%

$2,921

$3.08

34.8%

$2,761

$2.94

33.1%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

4 | RubinBrown Apartment Stats 2015

Average Monthly Rent per Unit

2011

2010

$100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

372

363

105

115

$735

$721

$702

$699

$673

$721

$673

964

940

4.32

4.34

89.4%

86.9%

40.0%

37.8%

$0

2014

2013

2012

2011

2010

A

B

C

A

B

C

Economic Occupancy

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0%

$8,653

$8.98

100.0%

$8,078

$8.59

100.0%

90.8%

89.1%

89.4%

88.6%

86.9%

(704)

(0.73)

-8.1%

(826)

(0.88)

-10.2%

(130)

(0.13)

-1.5%

(128)

(0.14)

-1.6%

(84)

(0.09)

-1.0%

(105)

(0.11)

-1.3%

7,735

8.03

89.4%

7,019

7.46

86.9%

469

0.49

5.4%

410

0.44

5.1%

$8,204

$8.52

94.8%

$7,429

$7.90

92.0%

$892

$0.93

10.3%

$801

$0.85

9.9%

454

0.47

5.2%

422

0.45

5.2%

102

0.11

1.2%

96

0.10

1.2%

2014

2013

2012

2011

2010

444

0.46

5.1%

406

0.43

5.0%

831

0.86

9.6%

717

0.76

8.9%

Gross Potential Rent vs. Net Operating Income per Square Foot

1,475

1.53

17.1%

1,324

1.41

16.4%

350

0.36

4.0%

298

0.32

3.7%

$3.23 $9.34

2014

514

0.53

5.9%

461

0.49

5.7%

$3.08 $8.85 $2.94 $8.99

2013

110

0.11

1.3%

95

0.10

1.2%

$5,172

$5.36

59.7%

$4,620

$4.91

57.2%

2012

$3.16 $8.98

2011

$3,032

$3.16

35.1%

$2,809

$2.99

34.8%

$2.99 $8.59

2010

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2015 | 5

Government Assisted

Expense Trends per Unit

$1,068

$1,079

Salaries and Personnel

$1,031

$892

$801

$552

$521

Administrative and Marketing

$505

$556

$518

$1,386

$1,333

Contract Services and Repairs & Maintenance

$1,428

$1,475

$1,324

$876 943

$876

Taxes and Insurance

$851

$974

$854

$0

$250

$500

$750

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

2012

2011

2010

2014

2013

6 | RubinBrown Apartment Stats 2015

RubinBrown Apartment Stats 2015 | 7

Government Assisted by Region

North

East/Northeast

Midwest

South/Southeast

Total Number of Projects

23

67

276

89

Average Project Age In Years

10.0

13.6

12.6

10.2

Average Number of Units

97

115

105

104

Averages Per Unit: Monthly Rent

$687

$826

$725

$651

Square Feet

963

917

926

1,036

Rooms

4.29

4.43

4.41

4.97

Economic Occupancy

92.0%

90.8%

86.1%

91.2%

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

29.5%

37.3%

36.1%

27.6%

A

B

C

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,249

$8.57 100.0%

$9,910 $10.81 100.0%

$8,700

$9.40 100.0%

$7,818 $7.55 100.0%

Less: Vacancy Loss

(523) (0.54)

-6.3%

(732) (0.80)

-7.4%

(937) (1.01) -10.8%

(517) (0.50)

-6.6%

Collection Loss

(115) (0.12)

-1.4% -0.3%

(128) (0.14)

-1.3% -0.5%

(131) (0.14) (136) (0.15)

-1.5% -1.6%

(120) (0.12)

-1.5% -0.7%

(28) (0.03)

(47) (0.05)

(53) (0.05)

Concession Loss

Rent Collected

7,583

7.88 0.54

92.0%

9,003

9.82 0.53

90.8%

7,496

8.10 86.1%

7,128

6.88 0.44

91.2%

524

6.3%

483

4.9%

452

0.49

5.2%

451

5.8%

Other Income Total Income

$8,107

$8.42 98.3%

$9,486 $10.35 95.7%

$7,948

$8.59 91.3%

$7,579 $7.32 97.0%

Expenses

Salaries and Personnel

$1,002

$1.04

12.1%

$1,185

$1.29

12.0%

$1,000

$1.08

11.5%

$1,101

$1.06

14.1%

Administrative

507

0.53

6.1%

443

0.48

4.5%

451

0.49

5.2%

625

0.60

8.0%

Marketing

46

0.05

0.6%

44

0.05

0.4%

64

0.07

0.7%

45

0.04

0.6%

Management Fees

466

0.48

5.6%

575

0.63

5.8%

425

0.46

4.9%

450

0.43

5.8%

Utilities

1,001

1.04

12.1%

958

1.04

9.7%

728

0.79

8.4%

768

0.74

9.8%

Carpeting

202

0.21

2.5%

195

0.21

2.0%

101

0.11

1.2%

152

0.15

1.9%

Painting

76

0.08

0.9%

65

0.07

0.7%

42 0.05

0.5%

96

0.09

1.2%

Landscaping

123

0.13

1.5%

171

0.19

1.7%

86

0.09

1.0%

214

0.21

2.7%

HVAC

45

0.05 0.5%

82

0.09

0.8%

36

0.04

0.4%

75

0.07

1.0%

Appliances

30

0.03

0.4%

77

0.08

0.8%

34 0.04

0.4%

83

0.08

1.1%

Plumbing

52

0.05

0.6%

77

0.08

0.8%

23

0.03

0.3%

68 0.07

0.9%

Electrical

43

0.04

0.5%

42

0.05

0.4%

80

0.09

0.9%

31

0.03

0.4%

Other Repairs and Services

906

0.94

11.0%

949

1.03 9.6%

878

0.95

10.1%

730

0.71

9.3%

Insurance

276

0.29

3.3%

295

0.32

3.0%

341

0.37

3.9%

460

0.44

5.9%

Real Estate Taxes

741 201

0.77 0.21

9.0% 2.4%

727

0.79 0.05

7.3% 0.5%

490

0.53 5.6%

402 178

0.39 0.17

5.1% 2.3%

48

59

0.06

0.7%

Other Taxes

Total Expenses

$5,717

$5.94 69.1%

$5,933

$6.45 60.0%

$4,838

$5.25

55.7%

$5,478

$5.27

70.1%

Net Operating Income Before Debt Service & Depreciation

$2,390

$2.48 29.2%

$3,553

$3.90 35.7%

$3,110

$3.34

35.6%

$2,101

$2.05 26.9%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

8 | RubinBrown Apartment Stats 2015

Monthly Rent per Unit

South/Southwest

West/Northwest

31

30

9.8

8.5

128

119

$747

$847

887

836

4.34

3.52

93.3%

96.6%

42.0%

38.3%

Net Operating Income per Square Foot

A

B

C

A

B

C

$8,968 $10.11 100.0%

$10,161 $12.15 100.0%

(449) (0.51)

-5.0%

(248) (0.30)

-2.4%

(107) (0.12)

-1.2% -0.5%

(73) (0.09) (33) (0.04)

-0.7% -0.3%

(45) (0.05)

8,367

9.43 0.64

93.3%

9,870

11.72 96.6%

572 0.33 2.7% $8,939 $10.07 99.7% $10,084 $12.05 99.3% 6.4% 277

$1,052

$1.19

11.7%

$1,272

$1.52

12.5%

522

0.59 5.8%

594 0.71

5.8%

Economic Occupancy

87

0.10

1.0%

13

0.02

0.1%

526

0.59 5.9%

586

0.70

5.8%

873

0.98

9.7%

1,355 1.62

13.3%

139

0.16

1.6%

163 0.20

1.6%

30

0.03

0.3%

31

0.04

0.3%

115

0.13

1.3%

168

0.20

1.7%

52

0.06

0.6%

54

0.06

0.5%

57

0.06

0.6%

107

0.13 1.1%

48

0.05

0.5%

122

0.15

1.2%

115

0.13

1.3%

29

0.03

0.3%

571

0.64

6.4%

1,071

1.28 10.5%

327

0.37

3.6%

310

0.37

3.1%

579 0.65

6.5% 0.8%

280

0.34

2.8%

74

0.08

62 0.07 0.6%

$5,167 $5.81

57.6%

$6,217 $7.44 61.2%

West/Northwest

North

East/Northeast

$3,772

$4.26

42.1%

$3,867 $4.61 38.1%

South/Southwest

Midwest

South/Southeast

RubinBrown Apartment Stats 2015 | 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

138

141

121

60

56

Average Project Age In Years

9.2

12.6

11.7

15.2

12.7

Average Number of Units

32

76

122

176

272

Averages Per Unit: Monthly Rent

$629

$683

$761

$766

$754

Square Feet

1,049

910

909

924

932

Rooms

4.98

4.27

4.30

4.30

4.43

Economic Occupancy

91.1%

92.3%

90.4%

88.0%

86.1%

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

20.6%

32.6%

37.4%

33.0%

40.6%

A

B

A

B

A

B

A

B

A

B

Revenues

Gross Potential Rent

$7,544

$7.19

$8,196

$9.01

$9,131 $10.05

$9,198

$9.95

$9,053 $9.71

Less: Vacancy Loss

(400) (0.38)

(493) (0.54)

(701) (0.77)

(880) (0.95)

(969) (1.04)

Collection Loss

(124) (0.12)

(96) (0.11)

(118) (0.13)

(161) (0.17)

(121) (0.13)

Concession Loss

(148) (0.14)

(39) (0.04)

(56) (0.06)

(65) (0.07)

(169) (0.18)

Rent Collected

6,872

6.55

7,568

8.32

8,256

9.09

8,092

8.76

7,749

8.36

Other Income Total Income

658

0.63

389

0.43

468

0.51

400

0.43

474

0.51

$7,530

$7.18

$7,957

$8.75

$8,724

$9.60

$8,492

$9.19

$8,268 $8.87

Expenses

Salaries and Personnel

$920

$0.88

$1,173

$1.29

$1,153

$1.27

$1,113

$1.20

$926

$0.99

Administrative

707 0.67

576

0.63

461

0.51

491

0.53

414

0.44

Marketing

36

0.03

49

0.05

55

0.06

70

0.08

58

0.06

Management Fees

419

0.40

455

0.50

509

0.56

445

0.48

464

0.50

Utilities

708

0.67

755

0.83

931

1.02

969

1.05

717

0.77

Carpeting

61

0.06

133

0.15

155 0.17

156

0.17

117

0.13

Painting

39

0.04

40

0.04

48

0.05

63

0.07

68

0.07

Landscaping

118

0.11

144

0.16

154

0.17

123

0.13

97

0.10

HVAC

49

0.05

58

0.06

56

0.06

52

0.06

42

0.05

Appliances

43

0.04

46

0.05

48

0.05

62

0.07

64

0.07

Plumbing

26

0.02

36

0.04

59

0.06

68

0.07

36

0.04

Electrical

53

0.05

76

0.08

73

0.08

45

0.05

66

0.07

Other Repairs and Services

935

0.89

860

0.95

827

0.91

983

1.06

766

0.82

Insurance

454

0.43

352 0.39

305

0.34

321

0.35

376

0.40

Real Estate Taxes

502

0.48

467

0.51

468

0.51

535

0.58

570

0.61

Other Taxes

90

0.09

122

0.13

97

0.11

95

0.10

34

0.04

Total Expenses

$5,160

$4.91

$5,342

$5.86

$5,399

$5.93

$5,591

$6.05

$4,815

$5.16

Net Operating Income Before Debt Service and Depreciation

$2,370 $2.27

$2,615

$2.89

$3,325

$3.67

$2,901

$3.14

$3,453

$3.71

Capital Expenditures

$291

$0.28

$402

$0.44

$374

$0.41

$307 $0.33

$275

$0.30

A = Dollars per unit, per year

B = Dollars per square foot, per year

10 | RubinBrown Apartment Stats 2015

RubinBrown Apartment Stats 2015 | 11

Market Rate

2014

2013

2012

Total Number of Projects

38

45

34

Average Number of Units

279

263

248

Averages Per Unit: Monthly Rent

$806

$780

$766

Square Feet

942

909

926

Rooms

4.00

4.00

4.14

Economic Occupancy

86.2%

85.8%

85.0%

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

47.8%

45.9%

49.0%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$9,666

$10.26

100.0%

$9,358

$10.30

100.0%

$9,193

$9.93

100.0%

Less: Vacancy Loss

(887)

(0.94)

-9.2%

(908)

(1.00)

-9.7%

(824)

(0.89)

-9.0%

Collection Loss

(90)

(0.10)

-1.0%

(121)

(0.13)

-1.3%

(116)

(0.13)

-1.3%

(349)

(0.37)

-3.6%

(303)

(0.33)

-3.2%

(435)

(0.47)

-4.7%

Concession Loss

Rent Collected

8,340

$8.85

86.2%

8,026

8.84

85.8%

7,818

8.44

85.0%

1,039

1.10

10.7%

1,088

1.20

11.6%

821

0.89

8.9%

Other Income

$9,379

$9.95

96.9%

$9,114

$10.04

97.4%

$8,639

$9.33

93.9%

Total Income

Expenses

Salaries and Personnel

$981

$1.04

10.1%

$939

$1.03

10.0%

$976

$1.05

10.6%

Administrative

427

0.45

4.4%

438

0.48

4.7%

305

0.33

3.3%

Marketing

139

0.15

1.4%

153

0.17

1.6%

127

0.14

1.4%

Management Fees

395

0.42

4.1%

419

0.46

4.5%

350

0.38

3.8%

Utilities

665

0.71

6.9%

664

0.73

7.1%

596

0.64

6.5%

All Repairs and Maintenance and Contract Services

1,035

1.10

10.7%

1,050

1.16

11.2%

1,054

1.14

11.6%

Insurance

267

0.28

2.8%

311

0.34

3.3%

264

0.28

2.9%

Real Estate Taxes

900

0.95

9.3%

841

0.93

9.0%

690

0.75

7.5%

82

0.09

0.8%

120

0.13

1.3%

48

0.05

0.5%

Other Taxes

Total Expenses

$4,891

$5.19

50.5%

$4,935

$5.43

52.7%

$4,410

$4.76

48.1%

Net Operating Income Before Debt Service and Depreciation

$4,488

$4.76

46.4%

$4,179

$4.61

44.7%

$4,229

$4.57

45.8%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

12 | RubinBrown Apartment Stats 2015

Average Monthly Rent per Unit

2011

2010

$100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

35

20

$806

246

238

$780

$766

$763

$674

$674

$763

938

932

4.20

4.30

88.6%

82.8%

49.4%

45.5%

$0

2014

2013

2012

2011

2010

A

B

C

A

B

C

Economic Occupancy

$8,093

$8.63

100.0%

$9,153

$9.82

100.0%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0%

88.6%

(438)

(0.47)

-5.4%

(942)

(1.01)

-10.3%

86.2%

85.8%

85.0%

82.8%

(62)

(0.07)

-0.8%

(113)

(0.12)

-1.2%

(420)

(0.45)

-5.2%

(520)

(0.56)

-5.7%

7,173

7.64

88.6%

7,578

8.13

82.8%

630

0.67

7.8%

692

0.74

7.6%

$7,803

$8.31

96.4%

$8,270

$8.87

90.4%

$762

$0.81

9.4%

$794

$0.85

8.7%

339

0.36

4.2%

323

0.35

3.5%

104

0.11

1.3%

141

0.15

1.5%

2014

2013

2012

2011

2010

319

0.34

4.0%

330

0.35

3.6%

584

0.62

7.2%

645

0.69

7.1%

883

0.94

10.9%

1,137

1.22

12.4%

Gross Potential Rent vs. Net Operating Income per Square Foot

233

0.25

2.9%

319

0.34

3.5%

$4.76 $10.26

647

0.69

8.0%

673

0.72

7.3%

2014

76

0.08

0.9%

145

0.15

1.6%

$4.61 $10.30 $4.57 $9.93

2013

$3,947

$4.20

48.8%

$4,507

$4.82

49.2%

2012

$3,856

$4.11

47.6%

$3,763

$4.05

41.2%

$4.11 $8.63

2011

$4.05 $9.82

2010

Gross Potential Rent

Net Operating Income

RubinBrown Apartment Stats 2015 | 13

Low Income Tax Credit Projects

2014

2013

2012

Total Number of Projects

508

362

367

Average Number of Units

108

107

109

Averages Per Unit: Monthly Rent

$735

$798

$697

Square Feet

952

955

947

Rooms

4.51

4.36

4.38

Economic Occupancy

88.9%

90.6%

88.8%

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

35.3%

36.5%

35.4%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,824

$9.27

100.0%

$8,429

$8.83

100.0%

$8,370

$8.84

100.0%

Less: Vacancy Loss

(757)

(0.79)

-8.6%

(617)

(0.65)

-7.3%

(748)

(0.79)

-8.9%

Collection Loss

(123)

(0.13)

-1.4%

(111)

(0.12)

-1.3%

(129)

(0.14)

-1.5%

(94)

(0.10)

-1.1%

(69)

(0.07)

-0.8%

(67)

(0.07)

-0.8%

Concession Loss

Rent Collected

7,850

8.25

88.9%

7,632

7.99

90.6%

7,426

7.84

88.8%

450

0.47

5.1%

404

0.42

4.8%

373

0.39

4.4%

Other Income

$8,300

$8.72

94.0%

$8,036

$8.41

95.4%

$7,799

$8.23

93.2%

Total Income

Expenses

Salaries and Personnel

$1,071

$1.12

12.1%

$1,076

$1.13

12.8%

$1,031

$1.09

12.3%

Administrative

489

0.51

5.5%

457

0.48

5.4%

450

0.48

5.4%

Marketing

57

0.06

0.6%

51

0.05

0.6%

51

0.05

0.6%

Management Fees

467

0.49

5.3%

447

0.47

5.3%

434

0.46

5.2%

Utilities

818

0.86

9.3%

852

0.89

10.1%

792

0.84

9.5%

All Repair, Maintenance and Contract Services

1,531

1.61

17.3%

1,353

1.42

16.1%

1,435

1.52

17.1%

Insurance

349

0.37

4.0%

327

0.34

3.9%

282

0.30

3.4%

Real Estate Taxes

509

0.53

5.8%

463

0.49

5.5%

459

0.48

5.5%

82

0.09

0.9%

74

0.08

0.9%

103

0.11

1.2%

Other Taxes

Total Expenses

$5,373

$5.64

60.8%

$5,100

$5.35

60.6%

$5,037

$5.33

60.2%

Net Operating Income Before Debt Service and Depreciation

$2,927

$3.08

33.2%

$2,936

$3.06

34.8%

$2,762

$2.90

33.0%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

14 | RubinBrown Apartment Stats 2015

Average Monthly Rent per Unit

2011

2010

$100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

363

354

$798

106

117

$735

$722

$697

$676

$722

$676

952

947

4.37

4.38

89.2%

86.9%

36.9%

37.8%

$0

2014

2013

2012

2011

2010

A

B

C

A

B

C

Economic Occupancy

$8,665

$9.11

100.0%

$8,110

$8.56

100.0%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0%

90.6%

89.2%

88.8%

88.9%

(718)

(0.75)

-8.3%

(828)

(0.87)

-10.2%

86.9%

(130)

(0.14)

-1.5%

(130)

(0.14)

-1.6%

(83)

(0.09)

-1.0%

(106)

(0.11)

-1.3%

7,734

8.13

89.2%

7,046

7.44

86.9%

465

0.49

5.4%

413

0.44

5.1%

$8,199

$8.62

94.6%

$7,459

$7.88

92.0%

$890

$0.94

10.3%

$803

$0.85

9.9%

453

0.48

5.2%

423

0.45

5.2%

102

0.11

1.2%

96

0.10

1.2%

2013

2012

2011

2010

2014

444

0.47

5.1%

408

0.43

5.0%

829

0.87

9.6%

720

0.76

8.9%

1,476

1.55

17.0%

1,334

1.40

16.4%

Gross Potential Rent vs. Net Operating Income per Square Foot

348

0.37

4.0%

298

0.31

3.7%

2014

$3.06 $8.83 $3.08 $9.27 $2.90 $8.84 $3.17 $9.11

518

0.54

6.0%

463

0.49

5.7%

110

0.12

1.3%

95

0.10

1.2%

2013

$5,170

$5.45

59.7%

$4,640

$4.89

57.2%

2012

$3,029

$3.17

34.9%

$2,819

$2.99

34.8%

2011

$2.99 $8.56

2010

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2015 | 15

RubinBrown Real Estate Services Group

· 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 · HOPE VI consulting

· Strategic planning · Feasibility studies

16 | RubinBrown Apartment Stats 2015

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

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

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

Amy Broadwater Partner 615.480.2871 amy.broadwater@rubinbrown.com

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

RubinBrown Apartment Stats 2015 | 17

Denver Office 1900 16th Street Suite 300 Denver, Colorado 80202 ph: 303.698.1883 Kansas City Office 10975 Grandview Drive Building 27, Suite 600 Overland Park, Kansas 66210 ph: 913.491.4144 Nashville Office 424 Church Street Suite 2000 Nashville, Tennessee 37219 ph: 615.253.5200 St. Louis Office One North Brentwood Suite 1100 St. Louis, Missouri 63105 ph: 314.290.3300 St. Louis Cortex Office 4240 Duncan Avenue CIC@4240, Suite 200 St. Louis, Missouri 63110 ph: 314.290.3300

RubinBrown.com

1.800.678.3134

RubinBrown LLP

@RubinBrown

18 | RubinBrown Apartment Stats 2015