RubinBrown Apartment Stats 2018

’18

APARTMENT STATS

A publication by RubinBrown LLP

Contents

RubinBrown is pleased to present the 2018 Apartment Statistical Analysis, an annual survey compiled by the Real Estate Services Group.

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

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 2017 and represents approximately 750 apartment projects in roughly 40 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 17 for contact information).

@RubinBrownRE

@RubinBrownRealEstate

Disclaimer: Apartment Stats, a publication of RubinBrown LLP, is designed to provide general information regarding the subject matter covered. Although prepared by professionals, its content should not be construed as the rendering of advice regarding specific situations. If accounting, legal, or other expert assistance is needed, consult with your professional business advisor. Please call RubinBrown with any questions.

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RubinBrown Apartment Stats 2017

ii

EXECUTIVE SUMMARY

Multi-Family Industry The multi-family industry continued to experience above-average performance in 2017. There were 336,000 multi-family units completed in 2017, an increase over the 321,000 units completed in 2016. According to the Fannie Mae 2018 Multi-Family Affordable Housing Outlook , most new supply over the past few years has been focused in high rent segments. There has been little growth in stock of affordable multifamily housing. Strong demand for multi-family rentals has prompted developers to renovate more affordable housing to higher rent units. The impact of the two trends has been that while the number of Class A units have grown by an estimated 1.1 million to 5.0 million total units since the end of the recession, the number of Class B/C units remained virtually unchanged at an estimated 5.7 million units, according to the sample data tracked by Reis, Inc. This trend is unlikely to change in the next 12 to 24 months. According to the Joint Center for Housing Studies of Harvard University, the national vacancy rate for all rental units averaged 7.2% in 2017, an increase from 6.9% in 2016. Meanwhile, according to the Fannie Mae 2018 Multi-Family Affordable Housing Outlook , vacancies for rent-restricted affordable housing properties remains historically low. At the close of 2017, Reis, Inc. estimates a 1.9% vacancy rate for rent-restricted properties, which consist of multi-family rental properties assisted with federal Low Income Housing Tax Credits (LIHTC) and Section 8 project-based vouchers, reflecting the demand for all types of affordable multi-family rentals. A 2016 National Low Income Housing Coalition study found that for every 100 extremely low-income renters, only 35 rental units were affordable and available which is a nationwide shortfall of more than 7.2 million units. Conditions for very-low income renter households improved slightly with 56 affordable and available rentals per 100 households. According to the Joint Center for Housing Studies of Harvard University, the number of multi-family starts declined slightly over the past year and expanding supplies of new luxury apartments pushed up rental rates.

According to data from the National Council of Real Estate Investment Fiduciaries, net operating income for investment-grade multi-family properties in 2017 grew 3.4% from 2016. In addition, the annual rate of return on rental property investments was 6.4% for 2017. Rental property prices and sales remain strong. Real Capital Analytics (a commercial real estate database which tracks prices for rental properties and portfolios of at least $2.5 million), reports that nominal apartment property prices rose at a 12% annual rate averaged in 2014 – 2017. As a result, apartment prices now stand 30% above the mid-2000s peak in real terms. Tax Reform The Tax Cuts & Jobs Act (the Act) was signed into law at the end of 2017. According to the Joint Center for Housing Studies of Harvard University, the Act left LIHTC intact; however the decline in the corporate tax rate from 35% to 21% will likely have negative consequences for new rent-restricted supply. Tax credits are now less valuable and prices have declined since discussions on implementing a corporate tax cut began in 2017. Developers may struggle with new projects to fill the financing gap resulting from lower proceeds from investment in LIHTC due to this decline. Congress introduced the Affordable Housing Credit Improvement Act of 2017 to help offset the decline in LIHTC prices. Positive news from the Act came in the form of a new program that could provide funding for affordable housing. The Act allows investors to defer paying tax, up to nine years, on gains if those gains are invested in Qualified Opportunity Funds that in turn invest in economically distressed communities (known as opportunity zones) designated by the governor of each state. Market Trends Demand for housing is driven primarily by an increase in household growth, which is expected to remain strong based on aging millennials and the overall population. According to the Joint Center for Housing Studies of Harvard University, with a large portion of the millennial population now in its early 30s, adults under age 35 formed

Executive Summary

1

EXECUTIVE SUMMARY

Additionally, there is tremendous demand for affordable housing among the nation’s 15.5 million very low and extremely low-income households. Conditions in the affordable market will continue to remain strong with strong demand and diminishing supply. Conclusion In 2017, demand for multi-family rental housing remained high leading to most of the newly completed supply being absorbed. Vacancy rates remained low. The multi-family rental market will continue to move forward and grow, backed by the steady economy. According to the Freddie Mac Multi-family Outlook , unemployment fell to under 4% in the first quarter of 2018. The strong market continues to build household formations. Approximately 1 million new households were formed during the first quarter of 2018. According to Realpage, apartment absorptions are healthy at the national level, averaging 300,000 units. According to the Freddie Mac Multi-family Outlook , multi-family property prices increased 10% during 2017. Apartment investments continue to provide stable and safe returns for investors, which continues to boost property prices. 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.

10.5 million new households in 2012 – 2017, which is 1.5 million more than in the previous five-year period. The millennial generation will continue to lift household growth for years to come. While the number of young adults impacting the housing demand will continue to grow, the older population is growing faster. According to projections by the Census Bureau, the total U.S. population age 65 and older will reach 79 million in 2035. This represents an increase of 31 million over the same statistic in 2015. The largest increase in the housing demand of older adults is expected to come from single-person households. A 2014 survey conducted by AARP indicated 88% of adults 65 and over want to remain in their homes as they age. The decision of older households to age in place will require additional accessible housing with supportive services. The strong demand for units is coupled with an affordability crisis. According to the State of the Nation’s Housing 2017 , only 31% of renters are able to afford the $1,550 median asking rent for a new apartment in 2017. By comparison, in 1990 41% of renters could afford the $1,064 real median asking rent for new units. Supply of low-cost units has also decreased. A Hudson Institute analysis found that 60% of low-cost units in 1985 were lost by 2013. As a result of the supply and demand imbalance, the affordable housing industry is expected to remain strong. According to the Joint Center for Housing Studies of Harvard University, the long-term outlook for rental housing demand is positive as increasing numbers of millennials form new households and older households switch from owning to renting.

RubinBrown Apartment Stats 2018

2

COMPARISON OF OPERATIONS

Government Assisted

Market Rate

Total Number of Projects

701

18

Average Project Age In Years Average Number of Units

11.80

11.67

105

296

Averages Per Unit: Monthly Rent

$767

$1,246

Square Feet

923

929

Rooms

4.50

4.38

Economic Occupancy

92.3%

93.7%

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

34.5%

53.3%

A

B

C

A

B

C

Revenues Gross Potential Rent Less: Vacancy Loss

$9,208

$9.98

100.0%

$14,946

$16.09 (1.01) (0.15) (0.04)

100.0%

(708) (130)

(0.77) (0.14) (0.05)

-7.7% -1.4% -0.5% 90.4%

(938) (138)

-6.3% -0.9% -0.2% 92.6%

Collection Loss

(46)

(35)

Concession Loss

Rent Collected Other Income Total Income

8,324

9.02 0.80

13,835

14.89

742

8.1%

245

0.26

1.6%

$9,066

$9.82

98.5%

$14,080

$15.15

94.2%

Expenses Salaries and Personnel

$1,087

$1.18

11.8% 8.0% 0.8% 5.0% 9.7% 1.2% 0.7% 1.0% 0.7% 0.4% 0.5% 0.4% 3.6% 6.3% 3.3% 11.2% 64.6%

$763

$ 0.82

5.1% 5.8% 1.0% 3.0% 5.0% 1.0% 0.8% 1.0% 0.1% 0.7% 0.4% 0.4% 7.7% 1.6% 6.7% 3.7%

Administrative

735

0.80 0.08 0.50 0.96 0.12 0.07 0.10 0.07 0.04 0.05 0.04 1.12 0.36 0.63 0.33

870 151 452 745 154 115 145

0.94 0.16 0.49 0.80 0.17 0.12 0.16 0.02 0.12 0.06 0.06 1.24 0.25 1.07 0.59

Marketing

78

Management Fees

461 890 109

Utilities

Carpeting

Painting

65 89 62 36 46 35

Landscaping

HVAC

21

Appliances

111

Plumbing Electrical

59 55

Other Repairs and Services

1,035

1,153

Insurance

333 577 302

232 996 547

Real Estate Taxes

Other Taxes

Total Expenses

$5,940

$6.45

$6,569

$7.07

44.0%

Net Operating Income Before Debt Service and Depreciation

$3,126

$3.37

33.9%

$7,511

$8.08

50.2%

Capital Expenditures

$987

$1.07

10.7%

$599

$0.64

4.0%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

Comparison of Operations

3

GOVERNMENT ASSISTED

2017

2016

2015

Total Number of Projects Average Number of Units

701

562 106

425 109

105

Averages Per Unit: Monthly Rent

$ 767

$802

$750

Square Feet

923

899

951

Rooms

4.50

4.50

4.41

Economic Occupancy

92.3%

92.1%

90.0%

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

34.5%

35.4%

31.0%

A

B

C

A

B

C

A

B

C

Revenues Gross Potential Rent Less: Vacancy Loss

$9,208

$9.98

100.0%

$9,514

$10.58 (0.83) (0.15) (0.10)

100.0%

$9,004

$9.47

100.0%

(708) (130)

(0.77) (0.14) (0.05)

-7.7% -1.4% -0.5% 90.4%

(749) (134)

-7.9% -1.4% -0.9% 89.8%

(617) (167) (104) 8,116

(0.65) (0.18) (0.11)

-6.9% -1.9% -1.2% 90.0%

Collection Loss

Concession Loss

(46)

(88)

Rent Collected

8,324

9.02 0.80

8,543

9.50 0.73

8.53 0.37

Other Income

742

8.1%

661

6.9%

353

3.9%

Total Income

$9,066

$9.82

98.5%

$9,204

$10.23

96.7%

$8,469

$8.90

93.9%

Expenses Salaries and Personnel

$1,087

$1.18

11.8%

$1,079

$1.20

11.3%

$1,211

$1.27

13.5%

Administrative

735

0.80 0.08 0.50 0.96

8.0% 0.8% 5.0% 9.7%

560

0.62 0.08 0.53 0.98

5.9% 0.7% 5.0% 9.2%

487

0.51 0.07 0.50 0.97

5.4% 0.7% 5.2%

Marketing

78

71

62

Management Fees

461 890

476 879

471 925

Utilities

10.3%

All Repair, Maintenance and Contract Services

1,477

1.61

16.1%

1,645

1.83

17.3%

1,680

1.76

18.6%

Insurance

333 577 302

0.36 0.63 0.33

3.6% 6.3% 3.3%

367 578 288

0.41 0.64 0.32

3.9% 6.1% 3.0%

369 510 129

0.39 0.54 0.14

4.1% 5.7% 1.4%

Real Estate Taxes

Other Taxes

Total Expenses

$5,940

$6.45

64.6%

$5,943

$6.61

62.4%

$5,884

$6.15

64.9%

Net Operating Income Before Debt Service and Depreciation

$3,126

$3.37

33.9%

$3,261

$3.63

34.3%

$2,625

$2.75

29.0%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2018

4

AVERAGE MONTHLY RENT PER UNIT

2014

2013

$1,000

516 108

371 108

$900

$802

$750

$735

$767

$800

$702

$735

$702

$700

944

952

$600

4.46

4.34

$500

89.1%

90.8%

2017

2016

2015

2014

2013

35.3%

36.3%

ECONOMIC OCCUPANCY

A

B

C

A

B

C

100%

90%

$8,816

$9.34

100.0%

$8,421

$8.85

100.0%

80%

(744) (123)

(0.79) (0.13) (0.10)

-8.4% -1.4% -1.1% 89.1%

(597) (111)

(0.63) (0.12) (0.07)

-7.1% -1.3% -0.8% 90.8%

70%

60%

(93)

(67)

7,856

8.32 0.48

7,646

8.03 0.42

50%

456

5.2%

400

4.8%

40%

$8,312

$8.80

94.3%

$8,046

$8.45

95.6%

30%

20%

10%

$1,068

$1.13

12.1%

$1,079

$1.13

12.8%

0%

92.3% 2017

92.1%

90.0%

89.1%

90.8%

496

0.53 0.06 0.49 0.88

5.6% 0.6% 5.3% 9.4%

469

0.49 0.05 0.47 0.91

5.6% 0.6% 5.3%

56

52

2016

2015

2014

2013

467 827

449 867

10.3%

GROSS POTENTIAL RENT V.S. NET OPERATING INCOME PER SQUARE FOOT

1,386

1.48

15.7%

1,333

1.40

15.8%

348 511

0.37 0.54 0.09

4.0% 5.8% 1.0%

327 467

0.34 0.49 0.09

3.9% 5.5% 1.0%

$3.37 $9.98

2017

84

82

$3.63 $10.58

2016

$5,243

$5.57

59.5%

$5,125

$5.37

60.8%

$2.75 $9.47

2015

$3,069

$3.23

34.8%

$2,921

$3.08

34.8%

$3.23 $9.34

2014

$3.08 $8.85

2013

GROSS POTENTIAL RENT

NET OPERATING INCOME

Government Assisted

5

GOVERNMENT ASSISTED

EXPENSE TRENDS PER UNIT

2017

$1,087

2016

$1,079

Salaries and Personnel

2015

$1,211

2014

$1,068

2013

$1,079

$813

$631

Administrative and Marketing

$549

$552

$521

$1,477

$1,645

Contract Services and Repairs & Maintenance

$1,680

$1,386

$1,333

$1,212

$876

1,233

Taxes and Insurance

$876

1,008

$943

$876

$0

$250

$500

$750

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

$1,750

RubinBrown Apartment Stats 2018

6

PAGE

7

GOVERNMENT ASSISTED BY REGION

North

East/Northeast

Midwest

South/Southeast

Total Number of Projects

30

79

430

106

Average Project Age In Years Average Number of Units

14.69

15.04

11.49

10.50

115

122

99

102

Averages Per Unit: Monthly Rent

$804

$899

$732

$705

Square Feet

997

952

928

1,022

Rooms

4.48

4.73

4.33

5.22

Economic Occupancy

94.7%

92.5%

92.2%

89.9%

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

35.9%

39.1%

33.5%

31.3%

A

B

C

A

B

C

A

B

C

A

B

C

Revenues Gross Potential Rent Less: Vacancy Loss

$9,643

$9.67 100.0% $10,787 $11.33 100.0%

$8,788

$9.47 100.0%

$8,458

$8.28 100.0%

(515) (0.52) (96) (0.10) (93) (0.09)

-5.3% -1.0% -1.0% 92.7%

(804) (0.84) (135) (0.14) (33) (0.04)

-7.5% -1.3% -0.3% 90.9%

(685) (0.74) (131) (0.14) (46) (0.05)

-7.8% -1.5% -0.5% 90.2% 10.1%

(852) (0.83) -10.1%

Collection Loss

(131) (0.13) (49) (0.05)

-1.5% -0.6% 87.8%

Concession Loss

Rent Collected

8,939

8.96 0.75

9,815

10.31

7,926

8.54 0.96

7,426

7.27 0.38

745

7.7%

461

0.48

4.3%

891

392

4.6%

Other Income

$9,684

$9.71 100.4%

$10,276 $10.79

95.2%

$8,817

$9.50 100.3%

$7,818

$7.65

92.4%

Total Income

Expenses Salaries and Personnel

$1,034

$1.04

10.7% 5.4% 0.8% 4.7% 2.1% 1.1% 0.6% 0.5% 0.3% 0.4% 0.5% 2.6% 7.7% 3.2% 10.8% 12.9%

$1,056

$1.11

9.8% 5.7% 0.7% 4.7% 9.0% 1.6% 0.7% 1.4% 0.8% 0.4% 0.6% 0.5% 9.9% 2.8% 7.4% 2.1%

$1,112

$1.20

12.7% 9.1% 0.9% 5.2% 9.5% 0.9% 0.6% 0.7% 0.7% 0.4% 0.4% 0.3% 3.8% 6.6% 3.4% 11.5% 66.7%

$1,012

$0.99

12.0% 7.7% 0.9% 4.9% 9.3% 1.5% 1.1% 1.6% 0.8% 0.4% 0.6% 0.3% 4.4% 4.3% 3.2% 10.6% 63.6%

Administrative

524

0.53 0.07 0.46 1.04 0.20 0.11 0.06 0.05 0.03 0.04 0.05 1.25 0.25 0.74 0.31

610

0.64 0.08 0.53 1.02 0.18 0.08 0.15 0.09 0.05 0.07 0.06 1.12 0.32 0.84 0.24

799

0.86 0.09 0.49 0.90 0.08 0.06 0.06 0.06 0.03 0.04 0.03 1.09 0.36 0.62 0.33

650

0.64 0.07 0.40 0.77 0.13 0.09 0.13 0.07 0.03 0.05 0.02 0.88 0.37 0.36 0.26

Marketing

73

74

82

76

Management Fees

455

507 975 175

453 836

411 790 128

Utilities

1,037

Carpeting

200 109

78 55 60 59 32 37 29

Painting

72

89

Landscaping

60 49 32 39 51

147

134

HVAC

82 45 66 55

67 35 47 22

Appliances

Plumbing Electrical

Other Repairs and Services

1,247

1,066

1,015

897 374 365 268

Insurance

248 742 305

305 800 226

332 579 302

Real Estate Taxes

Other Taxes

Total Expenses

$6,205

$6.23 64.3%

$6,261

$6.58 58.1%

$5,860

$6.30

$5,365

$5.26

Net Operating Income Before Debt Service & Depreciation

$3,479

$3.48 36.1%

$4,015

$4.21

37.1%

$2,957

$3.20

33.6%

$2,453

$2.39

28.8%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2018

8

MONTHLY RENT PER UNIT

South/Southwest

West/Northwest

17

39

$804

$899

11.24

11.67

121

117

$944

$732

$731

$731

$944

$705

923

917

4.44

3.88

88.0%

95.3%

27.7%

33.9%

A

B

C

A

B

C

NET OPERATING INCOME PER SQUARE FOOT

$8,770

$9.50 100.0% $11,331 $12.36 100.0%

$3.48

$4.21

(1,049) (1.14) -12.0%

(528) (0.58) (108) (0.12) (31) (0.03)

-4.7% -1.0% -0.3% 94.0%

(141) (0.15) (115) (0.12)

-1.6% -1.3% 85.1%

$4.12

$3.20

7,465

8.09 0.63

10,664

11.63

$2.41

$2.39

579

6.6%

484

0.53

4.3%

$8,044

$8.72

91.7%

$11,148 $12.16 98.3%

$1,098

$1.19

12.5% 7.6% 1.3% 4.7% 2.1% 1.4% 1.3% 0.9% 0.5% 0.7% 0.6% 8.3% 3.8% 7.1% 2.4% 11.0% 66.2%

$1,152

$1.26

10.2% 7.3% 0.5% 5.3% 1.4% 0.4% 1.3% 0.4% 0.6% 0.8% 0.6% 3.0% 3.2% 5.1% 11.9% 13.3% 65.3%

670 118 410 967 182 121 112

0.73 0.13 0.44 1.05 0.20 0.13 0.12 0.09 0.05 0.07 0.06 0.79 0.36 0.67 0.23

822

0.90 0.06 0.65 1.47 0.17 0.05 0.16 0.04 0.07 0.10 0.07 1.64 0.38 0.39 0.63

52

598

ECONOMIC OCCUPANCY

1,346

158

94.7%

46

92.5%

146

95.3%

83 43 60 51

40 65 91 64

92.2%

88.0%

89.9%

727 336 623 211

1,508

344 358 574

$5,812

$6.31

$7,364

$8.04

North

West/Northwest

South/Southeast East/Northeast

$2,232

$2.41

25.5%

$3,784

$4.12

33.0%

South/Southwest

Midwest

Government Assisted

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

160

238

155

64

65

Average Project Age In Years Average Number of Units

10.64

11.51

13.21

11.98

13.17

35

76

121

176

279

Averages Per Unit: Monthly Rent

$700

$742

$790

$812

$756

Square Feet

1,062

898

918

928

915

Rooms

5.12

4.25

4.26

4.31

4.56

Economic Occupancy

94.3%

92.5%

91.6%

90.9%

92.1%

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

33.8%

34.9%

29.2%

34.9%

39.7%

A

B

A

B

A

B

A

B

A

B

Revenues Gross Potential Rent Less: Vacancy Loss

$8,399

$7.91

$8,910

$9.92

$9,475 $10.32 (794) (0.86) (126) (0.14)

$9,739 $10.49 (889) (0.96) (115) (0.12)

$9,077

$9.92

(476) (0.45) (140) (0.13)

(670) (0.75) (147) (0.16)

(713) (0.78) (147) (0.16)

Collection Loss

Concession Loss

(82) (0.08)

(97) (0.11)

(32) (0.03)

(37) (0.04)

(43) (0.05)

Rent Collected

7,701 1,183

7.25 1.11

7,996

8.90 1.01

8,523

9.29 0.75

8,698

9.37 0.51

8,174

8.93 0.83

Other Income

910

686

477

757

Total Income

$8,884

$8.36

$8,906

$9.91

$9,209 $10.04

$9,175

$9.88

$8,931

$9.76

Expenses Salaries and Personnel

$1,039

$0.98

$1,129

$1.26

$1,150

$1.25

$1,070

$1.15

$989

$1.08

Administrative

753

0.71 0.03 0.44 0.74 0.06 0.06 0.13 0.06 0.03 0.02 0.03 1.02 0.42 0.54 0.25

685

0.76 0.11 0.53 0.94 0.11 0.07 0.09 0.08 0.04 0.06 0.06 1.04 0.37 0.59 0.36

1,014

1.10 0.12 0.55 1.07 0.16 0.08 0.11 0.06 0.05 0.06 0.04 1.19 0.32 0.57 0.36

593

0.64 0.06 0.49 1.05 0.11 0.09 0.08 0.08 0.03 0.05 0.04 1.24 0.35 0.57 0.40

558

0.61 0.07 0.44 0.87 0.11 0.06 0.08 0.05 0.03 0.04 0.03 1.06 0.38 0.74 0.25

Marketing

34

97

107 507 985 148

52

65

Management Fees

464 788

474 843 101

457 977 105

399 793

Utilities

Carpeting

68 64

99 54 72 48 31 35 23

Painting

60 85 72 36 53 51

70

82 78 76 30 44 33

Landscaping

135

104

HVAC

66 32 26 36

55 44 56 41

Appliances

Plumbing Electrical

Other Repairs and Services

1,087

932 331 529 319

1,094

1,151

973 347 673 230

Insurance

449 573 268

291 526 333

323 531 371

Real Estate Taxes

Other Taxes

Total Expenses

$5,882

$5.52

$5,797

$6.47

$6,525

$7.09

$5,973

$6.43

$5,389

$5.90

Net Operating Income Before Debt Service and Depreciation

$3,002

$2.84

$3,109 $3.44

$2,684

$2.95

$3,202

$3.45

$3,542

$3.86

Capital Expenditures

$1,216

$1.15

$473

$0.53

$443

$0.48

$293

$0.32

$437

$0.48

A = Dollars per unit, per year

B = Dollars per square foot, per year

RubinBrown Apartment Stats 2018

10

PAGE

11

MARKET RATE

2017

2016

2015

Total Number of Projects Average Number of Units

18

28

31

296

288

266

Averages Per Unit: Monthly Rent

$1,246

$949

$897

Square Feet

929

943

926

Rooms

4.38

4.24

3.60

Economic Occupancy

93.7%

90.7%

87.3%

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

53.3%

50.0%

50.3%

A

B

C

A

B

C

A

B

C

Revenues Gross Potential Rent Less: Vacancy Loss

$14,946

$16.09 (1.01) (0.15) (0.04)

100.0%

$11,383

$12.07 (1.12) (0.13) (0.22)

100.0%

$10,763 $11.62 100.0%

(938) (138)

-6.3% -0.9% -0.2% 92.6%

(1,057)

-9.3% -1.1% -1.8% 87.9% 11.4%

(929) (101) (334)

(1.00) (0.11) (0.36)

-8.6% -0.9% -3.1% 87.4%

Collection Loss

(121) (203)

(35)

Concession Loss

Rent Collected

13,835

14.89

10,002

10.61

9,399 $10.15

245

0.26

1.6%

1,294

1.37

945

1.02

8.8%

Other Income

$14,080

$15.15

94.2%

$11,296

$11.97

99.2%

$10,345 $11.17

96.2%

Total Income

Expenses Salaries and Personnel

$763

$0.82

5.1% 5.8% 1.0% 3.0% 5.0%

$649

$0.69

5.7% 5.1% 1.4% 4.0% 6.1%

$1,044

$1.13

9.7% 4.5% 1.6% 4.4% 6.0%

Administrative

870 151 452 745

0.94 0.16 0.49 0.80

580 164 459 695

0.62 0.17 0.49 0.74

480 168 476 648

.52 .18 .51 .70

Marketing

Management Fees

Utilities

All Repairs and Maintenance and Contract Services

1,813

1.95

12.1%

1,591

1.69

14.0%

939

1.01

8.7%

Insurance

232 996 547

0.25 1.07 0.59

1.6% 6.7% 3.7%

224

0.24 1.12 0.24

2.0% 9.3% 2.0%

279

.30

2.6% 9.3% 0.9%

Real Estate Taxes

1,053

1,005

1.09 0.10

231

96

Other Taxes

Total Expenses

$6,569

$7.07

44.0%

$5,646

$5.98

49.6%

$5,135

$5.54

47.7%

Net Operating Income Before Debt Service and Depreciation

$7,511

$8.08

50.2%

$5,650

$5.99

49.6%

$5,208

$5.62

48.4%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2018

12

AVERAGE MONTHLY RENT PER UNIT

2014

2013

$1,400

38

45

$1,246

279

263

$1,200

$949

$897

$1,000

$806

$806

$780

$780

$800

942

909

4.00

4.00

$600

$400

86.2%

85.8%

2017

2016

2015

2014

2013

47.8%

45.9%

ECONOMIC OCCUPANCY

A

B

C

A

B

C

100%

90%

$9,666

$10.26 (0.94) (0.10) (0.37)

100.0%

$9,358

$10.30 (1.00) (0.13) (0.33)

100.0%

80%

(887)

-9.2% -1.0% -3.6% 86.2% 10.7%

(908) (121) (303) 8,026 1,088

-9.7% -1.3% -3.2% 85.8% 11.6%

70%

(90)

60%

(349)

8,340 1,039

$8.85

8.84 1.20

50%

1.10

40%

$9,379

$9.95

96.9%

$9,114

$10.04

97.4%

30%

20%

10%

$981

$1.04

10.1%

$939

$1.03

10.0%

0%

92.1% 93.7%

90.0% 90.7%

89.1% 87.3%

90.8% 86.2%

88.6% 2013 85.8%

427 139 395 665

0.45 0.15 0.42 0.71

4.4% 1.4% 4.1% 6.9%

438 153 419 664

0.48 0.17 0.46 0.73

4.7% 1.6% 4.5% 7.1%

2017

2016

2015

2014

GROSS POTENTIAL RENT V.S. NET OPERATING INCOME PER SQUARE FOOT

1,035

1.10

10.7%

1,050

1.16

11.2%

267 900

0.28 0.95 0.09

2.8% 9.3% 0.8%

311 841 120

0.34 0.93 0.13

3.3% 9.0% 1.3%

$8.08 $16.09

2017

82

$5.99 $12.07

2016

$4,891

$5.19

50.5%

$4,935

$5.43

52.7%

$5.62 $11.62

2015

$4,488

$4.76

46.4%

$4,179

$4.61

44.7%

$4.76 $10.26

2014

$4.61 $10.30

2013

NET OPERATING INCOME

GROSS POTENTIAL RENT

Market Rate

13

LOW INCOME TAX CREDIT PROJECTS

2017

2016

2015

Total Number of Projects Average Number of Units

597

466 111

386

107

99

Averages Per Unit: Monthly Rent

$771

$812

$709

Square Feet

929

885

952

Rooms

4.48

4.48

4.42

Economic Occupancy

93.2%

92.6%

90.6%

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

34.8%

36.6%

30.6%

A

B

C

A

B

C

A

B

C

Revenues Gross Potential Rent Less: Vacancy Loss

$9,253

$9.96

100.0%

$9,748

$11.01 (0.81) (0.14) (0.10)

100.0%

$8,513

$8.94

100.0%

(633) (117)

(0.68) (0.13) (0.04)

-6.8% -1.3% -0.4% 91.5%

(717) (128)

-7.4% -1.3% -0.9% 90.4%

(580) (160)

(0.61) (0.17) (0.07)

-6.8% -1.9% -0.7% 90.6%

Collection Loss

(41)

(87)

(63)

Concession Loss

Rent Collected

8,462

9.11 0.78

8,816

9.96 0.80

7,710

8.09 0.29

723

7.8%

707

7.2%

275

3.2%

Other Income

$9,185

$9.89

99.3%

$9,523

$10.76

97.7%

$7,985

$8.38

93.8%

Total Income

Expenses Salaries and Personnel

$1,084

$1.17

11.7%

$1,086

$1.23

11.1%

$1,172

$1.23

13.8%

Administrative

750

0.81 0.09 0.50 0.95

8.1% 0.9% 5.0% 9.6%

570

0.64 0.09 0.55 1.01

5.9% 0.8% 5.0% 9.1%

452

0.47 0.06 0.47 0.91

5.3% 0.7% 5.3%

Marketing

80

77

57

Management Fees

466 885

490 892

448 862

Utilities

10.1%

All Repair, Maintenance and Contract Services

1,467

1.58

15.9%

1,637

1.85

16.8%

1,631

1.71

19.2%

Insurance

329 621 311

0.35 0.67 0.33

3.6% 6.7% 3.4%

362 624 296

0.41 0.71 0.33

3.7% 6.4% 3.0%

352 451

0.37 0.47 0.13

4.1% 5.3% 1.4%

Real Estate Taxes

96

Other Taxes

Total Expenses

$5,993

$6.45

64.9%

$6,034

$6.82

61.9%

$5,546

$5.82

65.2%

Net Operating Income Before Debt Service and Depreciation

$3,192

$3.44

34.4%

$3,489

$3.94

35.8%

$2,439

$2.56

28.6%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2018

14

AVERAGE MONTHLY RENT PER UNIT

2014

2013

$1,000

508 108

362 107

$900

$812

$798

$771

$800

$735

$709

$735

$798

$700

952

955

4.51

4.36

$600

$500

88.9%

90.6%

2017

2016

2015

2014

2013

35.3%

36.5%

ECONOMIC OCCUPANCY

A

B

C

A

B

C

100%

90%

$8,824

$9.27

100.0%

$8,429

$8.83

100.0%

80%

(757) (123)

(0.79) (0.13) (0.10)

-8.6% -1.4% -1.1% 88.9%

(617) (111)

(0.65) (0.12) (0.07)

-7.3% -1.3% -0.8% 90.6%

70%

(94)

(69)

60%

7,850

8.25 0.47

7,632

7.99 0.42

50%

450

5.1%

404

4.8%

40%

$8,300

$8.72

94.0%

$8,036

$8.41

95.4%

30%

20%

10%

$1,071

$1.12

12.1%

$1,076

$1.13

12.8%

0%

88.9%

92.6%

90.6%

90.6%

93.2%

489

0.51 0.06 0.49 0.86

5.5% 0.6% 5.3% 9.3%

457

0.48 0.05 0.47 0.89

5.4% 0.6% 5.3%

2017

2016

2015

2014

2013

57

51

467 818

447 852

10.1%

GROSS POTENTIAL RENT V.S. NET OPERATING INCOME PER SQUARE FOOT

1,531

1.61

17.3%

1,353

1.42

16.1%

349 509

0.37 0.53 0.09

4.0% 5.8% 0.9%

327 463

0.34 0.49 0.08

3.9% 5.5% 0.9%

$3.44 $9.96

2017

82

74

$3.94 $11.01

2016

$5,373

$5.64

60.8%

$5,100

$5.35

60.6%

$2.56 $8.94

2015

$2,927

$3.08

33.2%

$2,936

$3.06

34.8%

$3.08 $9.27

2014

$3.06 $8.83

2013

NET OPERATING INCOME

GROSS POTENTIAL RENT

Low Income Tax Credit Projects

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

RubinBrown Apartment Stats 2018

16

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 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, CPA Partner 615.480.2871 amy.broadwater@rubinbrown.com

Chris Langley, CPA Partner 847.972.5964 chris.langley@rubinbrown.com

RubinBrown Real Estate Services Group

17

1.800.678.3134 www.RubinBrown.com

@RubinBrown RubinBrown LLP

Founded in 1952, RubinBrown’s team members establish best practices within specific industry segments and work to serve the community both inside and outside the workplace. RubinBrown’s mission is to help clients build and protect value, while at all times honoring the responsibility to serve the public interest.

RubinBrown is also an independent member of Baker Tilly International, a high-quality, dedicated network of 126 independent firms in 147 countries.