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Research & Forecast Report

CHARLOTTEQ3 2017 | Multifamily

Source: AXIOMetrics. RCA, CoStar

Market Survey Results and ForecastsSequential Month Annual

4Q16 1Q17 2Q17 3Q17 Sep-17 2015 2016 2017F 2018F 2019F 2020F 2021F

Effective Rent Per Unit $1,032 $1,033 $1,057 $1,066 $1,070 $981 $1,027 $1,054 $1,091 $1,135 $1,169 $1,195

Per Sq. Ft $1.07 $1.07 $1.10 $1.11 $1.11 $1.02 $1.07 $1.10 $1.13 $1.18 $1.21 $1.24

Effective Rent Growth - Annually 3.7% 3.1% 2.7% 2.1% 2.0% 5.4% 4.6% 2.7% 3.5% 4.0% 3.0% 2.2%

Effective Rent Growth - Quarterly -1.1% 0.1% 2.3% 0.8%

Occupancy Rate 95.3% 94.9% 95.2% 95.4% 95.2% 95.2% 95.4% 95.1% 95.2% 95.6% 95.0% 94.4%

Occupancy Change - Annually -0.1% -0.2% -0.5% -0.2% -0.3% 0.6% 0.2% -0.4% 0.1% 0.4% -0.6% -0.6%

Occupancy Change - Quarterly -0.4% -0.4% 0.4% 0.2%

Economic Concessions Concession Value $-7.51 $-6.82 $-6.36 $-4.10 $-4.60 $-4.32 $-5.29

As a % of Asking Rent -0.7% -0.7% -0.6% -0.4% -0.4% -0.4% -0.5%

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 2www.ColliersMultifamilyEast.com

Multifamily Absorption and Supply

Annual 3Q17 Annual Forecast

2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F

Total Units Absorbed 6,165 6,631 8,403 6,614 350,478 7,597 8,741 5,141 3,972 4,622

New Supply 5,772 5,916 9,047 8,154 387,002 9,077 8,013 4,981 5,860 6,206

Inventory Growth 3.7% 3.7% 5.4% 4.9% 1.5% 5.2% 4.4% 2.6% 3.0% 3.1%

Market Employment and Permitting

Annual August-17 Annual Forecast

2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F

Employment (000s) 1,066.2 1,108.8 1,149.5 1,178.9 146,541.0 1,179.1 1,206.4 1,234.3 1,258.0 1,278.1

Job Gain (000s) 37.2 42.6 40.7 30.2 2,100.0 29.6 27.3 28.0 23.7 20.2

Job Growth (%) 3.6% 4.0% 3.7% 2.6% 1.5% 2.6% 2.3% 2.3% 1.9% 1.6%

Total Residential Permitting 17,812 18,790 19,353 17,267 1,120,198 19,004 22,045 24,750 21,085 19,226

Relative Change 10.4% 5.5% 3.0% -2.2% 6.1% -1.8% 16.0% 12.3% -14.8% -8.8%

Single Family Units Permitted 11,157 11,742 12,989 12,465 723,217

Relative Change 7.5% 5.2% 10.6% 9.9% 9.8%

Multifamily Units Permitted 6,510 6,861 6,293 4,720 364,705

Relative Change 16.5% 5.4% -8.3% -24.9% -1.0%

Multifamily as a % of Total 36.5% 36.5% 32.5% 27.3% 32.6%

Demand/Supply Ratio Job Gain / Total Residential Units Permitted 2.3 2.4 2.2 1.7 2.0 1.5 1.4 1.3 1.0 1.0

Job Gain / Single Family Units Permitted 3.6 3.8 3.5 2.7 3.2

Job Gain / Multifamily Units Permitted 6.7 6.5 5.9 4.8 5.7

SUPPLY AND DEMANDAccording to the Bureau of Labor Statistics, job growth in Charlotte-Concord-Gastonia, NC-SC Metro Area was 2.6% in August 2017, reflecting 30,200 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.5%.

Axiometrics forecasts Charlotte-Concord-Gastonia, NC-SC Metro Area’s job growth to be 2.3% in 2018, with 27,300 jobs added. Job growth is expected to average 1.9% from 2019 to 2021, with an average of 23,928 jobs added each year.

On the supply side, permits for 5,795 multifamily units were issued in the 12 months ending in August 2017, down -498 units from the prior year’s sum. In terms of total residential housing, 19,606 units were permitted in the 12 months ending August 2017, an increase of 253 units from the prior year’s total.

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 3www.ColliersMultifamilyEast.com

IDENTIFIED SUPPLYAs of October 15, 2017, Axiometrics has identified 9,024 apartment units scheduled for delivery in 2017, of which, 5,819 have been delivered. As a comparison, there were 8,198 apartment units delivered in 2016. Properties delivered to the market in the last 12 months have achieved an average asking rent of $1,419 per unit, or $1.55 per square foot. Effective rent has averaged $1,321, or $1.44 per square foot, resulting in an average concession value of $-98.29. As a comparison, existing properties in the market had an average asking rent of $1,070 per unit ($1.11 per square foot) and an average effective rent of $1,066 per unit, or $1.11 per square foot, in 3Q17. Concessions for existing properties averaged $-4.10.

Submarket Delivery Schedule

Pipeline Delivery Schedule Pipeline Lease Up Trend

Units Absorbed Asking Rent Effective Rent

Top Submarkets 2015 2016 2017 Total Totals PPM Per Unit PSF Per Unit PSF Concord/North Concord 213 243 655 1,111 229 16 $1,393 $1.20 $1,273 $1.10

Downtown 703 625 1,458 2,786 374 6 $1,847 $2.18 $1,656 $1.95

N. Tryon St. - The Plaza 182 343 1,244 1,769 449 13 $1,423 $1.75 $1,335 $1.64

North Pineville 52 114 863 1,029 260 12 $1,328 $1.35 $1,212 $1.23

ROCK HILL 729 1,059 1,129 2,917 670 10 $1,177 $1.15 $1,141 $1.11

Other 3,502 5,814 3,675 12,991 3,711 12 $1,395 $1.51 $1,299 $1.41

Charlotte-Concord-Gastonia, NC-SC 5,381 8,198 9,024 22,603 5,693 11 $1,421 $1.55 $1,321 $1.44*Based on 2017 deliveries *Trend based on a trailing 12 month period

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 4www.ColliersMultifamilyEast.com

Date Property Name Address City Units Year Built Price in $ $/Units

Oct-17 Highland Park at Northlake 7116 Finn Hall Ave Charlotte 240 2014 35,625,000.00 148,438

Oct-17 The Arboretum 7700 Arboretum Dr Charlotte 277 1989 / 2010 46,750,000.00 168,773

Sep-17 Woodfield Northlake 10331 Tisbury Rd Charlotte 310 2016 57,250,000.00 184,677

Sep-17 Northwoods Townhomes 2600 Celanese Rd Rock Hill 76 1975 5,315,000.00 69,934

Sep-17 Stone Gate Apartments 950 Southwood Oaks Ln Charlotte 144 2000 12,650,000.00 87,847

Sep-17 Tower Place 100-700 And 51 Tala Dr SW Concord 128 2000 9,950,000.00 77,734

Aug-17 Berkeley Place 500 Solano Dr Charlotte 368 2001 52,450,000.00 142,527

Aug-17 Pavilion Village 131 Gracyn Olivia Dr Charlotte 294 2016 44,690,000.00 152,007

Aug-17 Grand Terraces 6000 Regal Estate Ln Charlotte 240 1999 / 2006 24,000,000.00 100,000

Aug-17 Stanford Reserve 1207 Kelston Pl Charlotte 310 1986 29,000,000.00 93,548

Aug-17 Brookson Resident Flats 13428 Bryton Gap Blvd Huntersville 296 2016 48,840,000.00 165,000

Aug-17 Garden Villas 1776 Poston Cir Gastonia 100 1950 5,250,000.00 52,500

Aug-17 Century Parkside 605 Candler Ln Charlotte 300 1998 43,400,000.00 144,667

Aug-17 The Commons At Fort Mill 221 Embassy Dr Fort Mill 144 2009 16,500,000.00 114,583

Aug-17 Crown Point 100 Crown Point Cir NW Concord 152 1999 12,778,350.00 84,068

Aug-17 Willow Creek 161 Lansing Cir Mooresville 207 1997 11,611,279.10 56,093

Aug-17 Coopers Ridge 1100 Coopers Ridge Dr Kannapolis 153 1999 8,000,000.00 52,288

Aug-17 Parkway Crossing 100 Samuel Adams Cir Concord 219 1999 13,850,000.00 63,242

Aug-17 SOMERSET APARTMENTS 1400 Ventura Way Dr Charlotte 240 1973 12,853,403.00 53,556

Jul-17 Aztec 2700 Eastway Dr Charlotte 103 1974 6,300,000.00 61,165

Jun-17 W Flats 7200 Wallace Rd Charlotte 247 1986 / 2008 19,750,000.00 79,960

Jun-17 Mission Matthews Place 2100 Woodway Hills Dr Charlotte 392 1995 44,900,000.00 114,541

Jun-17 Matthews Pointe 1700 Chambers Dr Matthews 100 1987 10,900,000.00 109,000

Jun-17 Waterford Hills 6219 Waterford Hills Dr Charlotte 270 1996 30,766,667.00 113,951

Jun-17 Beacon Hill 1322 Beacon Ridge Rd Charlotte 349 1986 29,600,000.00 84,814

Jun-17 Belle Haven 9005 Post Canyon Ln Charlotte 176 2013 28,250,000.00 160,511

Jun-17 Pressley Ridge 1210 Pressley Rd Charlotte 504 1969 19,623,000.00 38,935

Jun-17 Gateway At Rock Hill 835 Sebring Dr Rock Hill 312 2016 41,250,000.00 132,212

RECENT SALES

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 5www.ColliersMultifamilyEast.com

DOWNTOWN CHARLOTTE

GREATER CHARLOTTE

Downtown Charlotte

PIPELINE MAP

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Key

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COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 6www.ColliersMultifamilyEast.com

PIPELINE DETAIL

# Name Status Owner Address Market UnitsLease Up1 Encore Southpark Lease Up Simpson Property Group 6205 Morrison Blvd Barclay Downs 2802 Legacy Concord Lease Up Goldberg Companies, Inc. 5020 Avent Dr NW Cabarrus Country Club 3483 Solis Dilworth Lease Up Terwilliger Pappas 1010 Kenilworth Ave Dilworth 1844 Solis Southline Lease Up Pappas Properties, LLC 2520 South Blvd Dilworth 3005 Alta Berewick Lease Up Wood Partners 7015 Skye Bridge Way Dixie-Berryhill 2666 Solis Berewick Lease Up Pappas Properties, LLC 9550 Gannon Dr Dixie-Berryhill 1387 The Stevenson Apartments Lease Up Charlotte-Mecklenburg Housing

Partnership, Inc.1445 Samuel St Double Oaks 130

8 The Gibson Lease Up Pollack Shores Real Estate Group 1000 Central Ave Elizabeth 2509 The Langston Lease Up White Edward A 1925 E 7th St Elizabeth 9110 Cadence Music Factory Lease Up ARK Group 606 NC Music Factory

BlvdLockwood 210

11 The Abbey Lease Up Spectrum Companies 1415 Abbey Pl Madison Park 13712 Sovereign at Belgate Lease Up Davis Development 6008 Lewis St Mineral Springs 26613 Novel NoDa Lease Up Crescent Communities, LLC 424 E 36th St North Charlotte 34414 Wren Northlake Lease Up Cortland Partners 8524 Mason Andrew Way Northlake 31015 Brookson Residential Flats Lease Up Carter-Haston Real Estate

Services, Inc.13428 Bryton Gap Blvd Outer Huntersville/Cornel 296

16 Silver Collection at The Park Lease Up Silver Companies 13816 Boren St Outer Huntersville/Cornel 33217 Concord Ridge Apartments Lease Up Tribute Companies 3635 Coventry Commons

Ave SWOutlying Cabarrus County 143

18 The Residence at Tailrace Marina

Lease Up Arnold Companies 1001 Marina Village Dr Outlying Gaston County 128

19 Fox Hunt Farms Apartments Lease Up Weinstein Development Co 355 Amistead Ave Outlying York County 18020 The Villas at Regal Manor Lease Up Carolina Capital Communities 1069 Chateau Crossing Dr Outlying York County 14421 One305 Central Lease Up TriBridge Residential 1305 Central Ave Plaza Midwood 24622 Horizons at Steele Creek Lease Up The Carroll Companies 10615 Beckstone Dr Steele Creek 9623 Ascent Uptown Lease Up Greystar Real Estate Partners 225 S Poplar St Uptown Charlotte 30024 Centric Gateway Lease Up Dominion Realty Partners, LLC 1010 W Trade St Uptown Charlotte 29725 Museum Tower Apartments Lease Up Wells Fargo & Company 525 S Church St Uptown Charlotte 39426 Presley Uptown Lease Up Proffitt Dixon Partners 900 E Stonewall St Uptown Charlotte 23027 SkyHouse Uptown - Tower II Lease Up Grubb Properties 601 N Tryon St Uptown Charlotte 336

Units 6,376

Under Construction28 District South Under Construction Flournoy Companies 12600 District South Dr Ballantyne 39729 Allen Street Housing Under Construction St Paul Baptist Church Inc (TE) 1301-1321 Allen St Belmont 11230 The Lofts at Hawthorne Mill Under Construction Clachan Properties LLC 1101 Hawthorne Ln Belmont 15031 Pollack Shores South End Under Construction Pollack Shores Real Estate Group 327-349 W Tremont Ave Brookhill 35032 Laurel View Under Construction The Gateway Companies 2535 Laurelview Dr NW Cabarrus Country Club 17433 Seasons at Poplar Tent Under Construction Southwood Realty Company 4735 Poplar Tent Rd Cabarrus Country Club 26434 Alta Prosperity Village Under Construction Pr Ii Of Wood Prosperity Apartmen 7304 Brice Knoll Ln Davis Lake-Eastfield 29235 Greenside Under Construction Armada Hoffler Properties, Inc. 1301 Harding Pl Dilworth 25536 Novel Atherton Under Construction Crescent Communities, LLC 2100 South Blvd Dilworth 34637 The Lincoln at Dilworth Under Construction Lincoln Property Company 905 Kenilworth Ave Dilworth 37938 Solis Berewick - Phase II Under Construction Pappas Properties, LLC 4913 Dixie River Rd Dixie-Berryhill 13739 Providence Row Under Construction Northwood Investors LLC 3906 Providence Rd Foxcroft 32640 Capital Crossing at Whitehall Under Construction TWO Capital Partners, LLC 9214 Christy Joy Dr Griers Fork 27141 Blu at Northline - Phase II Under Construction Panorama Holdings 2508 April Yixuan Ln Hidden Valley 31342 The Abbey - Phase II Under Construction Spectrum Companies 1415 Abbey Pl Madison Park 12343 Inspire SouthPark Under Construction Grubb Properties 345 Sharon Township Ln Myers Park 36744 436 E 36th St Under Construction Flywheel Group 436 E 36th St North Charlotte 18045 2359 Cold Water Ridge Dr Under Construction The Gateway Companies 2359 Cold Water Ridge Dr Northlight 260

Over 60 Multifamily Developments Proposed for the Charlotte area.

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 7www.ColliersMultifamilyEast.com

46 Whitehall Crossing Under Construction MPV Properties, LLC 2600 W Arrowood Rd Olde Whitehall 9647 Whitehall Village Apartments Under Construction Dominion Realty Partners, LLC 2720 W Arrowood Rd Olde Whitehall 31848 Parkwood Station Under Construction Parkwood Residences Llc 1708 N Brevard St Optimist Park 30949 The Optimist Park Under Construction Wood Partners 2104 N Brevard St Optimist Park 26150 Junction at Antiquity - Phase II Under Construction LIV Development, LLC 22415 Market St Outer Huntersville/Cornel 12951 The Adley at Bryton Under Construction Davis Development 11600 Old Statesville Rd Outer Huntersville/Cornel 30052 Skybrook Under Construction Blue Ridge Companies 3 Odell Rd Outlying Cabarrus County 26853 Station at Poplar Tent - Phase II Under Construction Tynes Development 50 Poplar Station Cir Outlying Cabarrus County 28054 Evolve at Tega Cay Under Construction Evolve Companies 3050 Old Farm Rd Outlying York County 26055 Fox Hunt Farms Apartments -

Phase IIUnder Construction Weinstein Development Company 355-356 Amistead Ave Outlying York County 96

56 Kingsley Apartments Under Construction Clear Springs Development Co 287 Textile Way Outlying York County 8557 Revere at Lake Wylie - Phase II Under Construction Gross Residential 1001 Wylie Springs Cir Outlying York County 14458 Revere at Tega Cay Under Construction Gross Residential 260 N Revere Cv Outlying York County 33659 CampusWorks - Plaza Midwood Under Construction The Carlyle Group 1205 Central Ave Plaza Midwood 34960 Midwood Station Under Construction DPJ Residential 2017 Central Ave Plaza Midwood 9761 The Links at Rea Farms Under Construction Lincoln Harris 11500 Providence Rd Providence Crossing 45562 Novel Providence Farm Under Construction Bahakel Communications 6408 Providence Farm Ln Providence Estates East M 40463 Bainbridge South End Under Construction Bainbridge-magnolia South End 2670 South Blvd Sedgefield 20064 Bainbridge South End Under Construction The Bainbridge Companies 175 Poindexter Dr Sedgefield 20065 New Bern Station Under Construction Pepsi Bottling Ventures, LLC 2820 South Blvd Sedgefield 42366 Horizons at Steele Creek - PII Under Construction The Carroll Companies 10615 Beckstone Dr Steele Creek 19267 500 W Trade St Under Construction Crosland 500 W Trade St Uptown Charlotte 40068 Montage Under Construction The Walsh Group 650 E Stonewall St Uptown Charlotte 30269 Novel Stonewall Station Under Construction Crescent Communities, LLC 400 E Stonewall St Uptown Charlotte 45970 Tenth Street Apartments and

DeckUnder Construction Levine Properties, Inc. 707 N Brevard St Uptown Charlotte 200

71 Uptown 550 Under Construction Northwood Ravin 550 E Stonewall St Uptown Charlotte 42172 Arlo Under Construction ArchCo Residential 1331 W Morehead St Wesley Heights 28773 The Lowrie Under Construction Trinity Partners 3570 Toringdon Way Whiteoak 241

Units 12,208

Total Units 18,584

# Name Status Owner Address Market UnitsUnder Construction

PIPELINE DETAIL, continued

WE CAN HELPAs an investor in multifamily properties, you need a firm that provides experience, broad reach and the ability to market an asset no matter how challenging the economic environment. You need a team that specializes in your market you need The East Region Multifamily Advisory Group.

Colliers International has one of the largest and most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and singular focus, make us uniquely successful in helping our clients achieve their disposition objectives.

How are we able to bring together the skills and tools necessary to complete challenging assignments? Our East Region Multifamily Advisory Group is connected by purpose and focus. Our team is dedicated to sharing information on market opportunities, capital sources and buyers/sellers to achieve the best results for our clients.

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 8www.ColliersMultifamilyEast.com

OUR PROVEN TRACK RECORDRecent Closings

WHO WE AREOne of the largest and most

experienced teams of multifamily

specialists in the industry

Units sold since 2011

33,500MORE THAN

Group gross transaction value in since 2011

$2.3B

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

20COVERING OVER

STATES

Oaktree ApartmentsDurham, NCUnits: 24

Sommerset PlaceRaleigh, NCUnits: 144

Falcon Pointe ApartmentsWinston Salem, NCUnits: 120

Arbor TownhomesGreensboro, NCUnits: 150

Arlington West ApartmentsJacksonville, NCUnits: 324

Eagle PointDurham, NCUnits: 323

Teal PointCharlotte, NCUnits: 216

Wolf Creek ApartmentsRaleigh, NCUnits: 385

Oakview TerraceHigh Point, NCUnits: 150

Geneva Park ApartmentsCary, NCUnits: 248

Hidden LakesGreensboro, NCUnits: 483

Fiddlers CreekWinston-Salem, NCUnits: 160

Tower PlaceCharlotte, NCUnits: 128

Stone GateCharlotte, NCUnits: 144

Park LaneCharlotte, NCUnits: 60

www.ColliersMultifamilyEast.com

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AT YOUR SERVICE

Will MathewsPRINCIPAL | EAST REGION

INSTITUTIONAL CLIENT GROUP

will.mathews@colliers.comDIR +1 404 877 9285

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payton.herschberger@colliers.comDIR +1 404 574 1061

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max.kemether@colliers.comDIR +1 404 978 2337