2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$900

$920

$940

$960

$980

$1,000

$1,020

$1,040

Perc

ent

Vacant

Perc

ent

Vacant

Perc

ent

Vacant

Perc

ent

Vacant

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

0.0%

1.0%

$860

$880

$900

2008 2009 2010 2011 2012 2013 2014 (Q1)

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

Avera

ge M

onth

ly R

Ent

Per

Unit

Average Monthly Rent Vacancy

Source: MPF Research

MINNEAPOLIS-ST. PAUL

www.colliers.com/msp

HIGHLIGHTS> Construction will peak in 2014, as over 6,900 units are forecasted to be delivered to the

market. 2015 should see a significant drop-off.> According to MPF Research, during 2013 and the first quarter of 2014, 2,025 units were

delivered in the Downtown Minneapolis/University submarket and vacancy increased from 2.1 percent at year-end 2012 to 4.5 percent as of first quarter of 2014. Absorption should lower this rate throughout 2014.

> Compared to other major metropolitan areas, Twin Cities vacancy rates are among the lowest in the nation.

> Rent increases are stagnant at 1.9 percent for the year. > The market is experiencing strong investor interest but limited supply; out of state investors

are particularly interested in this market, as cap rate compression in coastal markets has driven down yields.

> If interest rates remain mostly flat through 2014, cap rates will stay at historically low levels.

Q1 2014 | APARTMENT

APARTMENT MARKET REPORT

MARKET INDICATORS

Q1 2014

VACANCY —

RENTS

TRANSACTION ACTIVITY

PRICE PER UNIT

CAP RATES

AVERAGE RENT AND VACANCY

(2)

0

2

4

6

2008 2009 2010 2011 2012 2013 2014

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

(8)

(6)

(4)

Year

Year

Year

Year -- --

Over

Over

Over

Over -- --

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

Year

Em

plo

ym

ent

Change (

%)

MONTHLY EMPLOYMENT TRENDS

Demand meets surge in construction; vacancy continues to decrese

MARKET REPORT | Q1 2014 | APARTMENT | MINNEAPOLIS-ST. PAUL

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

1,000

2,000

2008 2009 2010 2011 2012 2013 2014 (Q1)

Under Construction Completions

Source: MPF Research

APARTMENT SALES UNITS UNDER CONSTRUCTION

SIGNIFICANT APARTMENT SALE ACTIVITY

BUILDING ADDRESS CITY SIZE (UNITS) BUYER SELLER PRICE PRICE PER

UNITSALE DATE

Madison Atrium 1311 143rd St Burnsville 348 Equus Capital Partners

Henderson Global Investors $33,000,000 $94,828 Mar-14

Madison Trailway 429 E Travelers Trail Burnsville 240 Equus Capital

PartnersHenderson Global Investors $24,800,000 $103,333 Mar-14

Lexington Hills 4116 Lexington Ave S Eagan 168 Curtis Capital Group Westfield Real Estate

Investment $13,500,000 $80,357 Feb-14

Westwood Gardens 2501 Nevada Ave S Minneapolis 152 SELA Investments Sidal Realty $11,430,000 $75,197 Jan-14

Lewis Park Apartments 180 Wayzata St St. Paul 103 Lewis Park Renewal LLC

Lewis Park Affordable LLC $6,750,000 $65,534 Jan-14

Seward Square Apart-ments 2121 S 9th St Minneapolis 81 Seward Renewal

LLC Seward Affordable LLC $6,000,000 $74,074 Jan-14

Fairway Flats 500 Greenhaven Rd Anoka 36 4515 Grand LLC Meadows at Greenhaven LLC $2,560,000 $71,111 Feb-14

40,000

60,000

80,000

100,000

120,000

100.0

150.0

200.0

250.0

300.0

Pri

ce P

er

Unit

Tota

l S

ale

s V

olu

me

0

20,000

0.0

50.0

2006 2007 2008 2009 2010 2011 2012 2013

Tota

l S

ale

s V

olu

me

Total Quarterly Volume $ (mil) Avg. Price Per Unit

Source: Real Capital Analytics

2014

MARKET REPORT | Q1 2014 | APARTMENT | MINNEAPOLIS-ST. PAUL

5

7

3

5

7

5

5

5

5

7

7

5

62

47

55

51

51

51

36

3636

55

65

55

55

55

62

77

62

13

55

13

55

65

96

47

36

96

95

95

1377

41

100

100

120

149

280

100

100

110

156

252

610

610

610

149

61

10

10

52

12

12

52

61

10

61

10

61

10

52

169

169

212

212

169

212

169

169

94

94

94

94

94

35W

35W

494

35W

35E

35W

35W

35W

35E

35E

35E

694

494

694

494

394

494

494

394

494

610

St. Paul

Minneapolis

Eagan

Grant

Orono

Corcoran

Plymouth

Medina

Woodbury

Bloomington

EdenPrairie

Edina

MapleGrove

LakeElmo

Minnetonka

Chaska

Afton

CottageGrove

Hugo

Chanhassen

Maplewood

Fridley

Roseville

BrooklynPark

Oakdale

Blaine

Shoreview

Inver GroveHeights

Shakopee

LinoLakes

Crystal

ArdenHills

Richfield

GoldenValley

Shorewood

NorthOaks

St. LouisPark

Burnsville

MendotaHeights

Victoria

Wayzata

NewHope

MahtomediVadnaisHeights

Hopkins

Stillwater

BrooklynCenter

WhiteBearLake

Newport

NewBrighton

SouthSt. Paul

Deephaven

WestSt. Paul

LittleCanada

Dellwood

CoonRapids

MoundsView

Robbinsdale

St. PaulPark

NorthSt. Paul

ColumbiaHeights

TonkaBay

FalconHeights

St.Anthony

CirclePines

Spring Lake ParkOsseo

Woodland

GemLake

SunfishLake

Lilydale

Excelsior

Long Lake

Greenwood

Savage

MinnetonkaBeach

Lexington

Oak Park Heights

PineSprings

SpringPark

Minneapolis-St. PaulInternational Airport

94

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Downtown Minneapolis

1 20 3 Mile4 s

This document was prepared by Colliers International for advertising and general information use only. Colliers International makes noguarantees, representation or warranties of any kind, expressed or implied, regarding the information including, but not limited to,warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s).© 2014. All rights reserved. Aerial imagery sources may include: Esri, i-cubed, USDA,USGS, FSA, AEX, Geoeye, Getmapping, Aerogrid, IGN, IGP, and the GIS User Community. Apartment development data provided by Finance & Commerce, March 21st, 2014.

This document was prepared by Colliers International for advertising and general information use only. Colliers International makes noguarantees, representation or warranties of any kind, expressed or implied, regarding the information including, but not limited to,warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s).© 2014. All rights reserved. Aerial imagery sources may include: Esri, i-cubed, USDA,USGS, FSA, AEX, Geoeye, Getmapping, Aerogrid, IGN, IGP, and the GIS User Community. Apartment development data provided by Finance & Commerce, March 21st, 2014.

New Apartment Construction - MetroNew Apartment Construction - Metro Spring 2014Spring 2014

2,000

1,600

1,800

2,000

1,400

1,600

1,200

1,400

Unit

sU

nit

sU

nit

sU

nit

s

800

1,000

1,200

Unit

sU

nit

sU

nit

sU

nit

s

600

800 Unit

sU

nit

sU

nit

sU

nit

s

200

400

600

0

200

0

Completed: 2013 Completed: Q1 14 Q2 14 Q3 14 Q4 14 Q1 2015 Q2 2015Completed: 2013 Completed: Q1 14 Q2 14 Q3 14 Q4 14 Q1 2015 Q2 2015

Source: MPF ResearchSource: MPF Research

APARTMENT CONSTRUCTION: COMPLETIONS BY DATE

MARKET REPORT | Q4 2011 | OFFICE | MINNEAPOLIS-ST. PAUL

Minneapolis-St. Paul 4350 Baker Road, Suite 400 Minnetonka, MN 55343DIRECT 952 897 7700www.colliers.com/msp

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management. Residential property is excluded from this total. All statistics are for 2013.