4Q15NATIONAL MULTIHOUSINGMARKET OVERVIEW
| 24Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 2
Table of Contents
2 National Multihousing Market Overview3 Executive Overview4 Historical United States Sales Volume5 Historical United States Supply and Demand 6 Historical United States Pricing Trends7 National Multihousing Outlook by Cantor Fitzgerald8 Homeownership Rate Trends9 Emerging Rental Markets
10 Historical Effective Rent vs. Inflation11 Top Markets by Sales Volume, Sales Volume Growth12 Investment Grade Cap Rates by Market13 Investment Grade Price Per Unit by Market14 Top 20 Buyers and Sellers of 201515 Buyer and Seller Distribution16 Top Regional Buyers17 Largest Landlords Nationally and Regionally 18 International Capital Distribution19 Transaction Analysis20 Price Per Unit by Age21 Select Market Fundamentals22 Renter Households by Age23 Investment Returns24 Mortgage Debt Outstanding25 Lender Composition26 Mortgage Maturities27 Significant Investment Sales by ARA Newmark
4Q15National Multihousing Market Overview
| 34Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 3
4Q15National Multihousing Market Overview
Executive Overview
►Sales volume surged to a historic high of $142.3 billion in 2015, up 23.5% from 2014.– Sales volume totaled $39.9 billion in the fourth quarter, the largest volume quarter in the past 15 years, with increased sums of
capital flowing into secondary and tertiary markets as investors seek higher yield.
► Increased capital flow demonstrated attractive underlying fundamentals, especially among portfolio and entity-level transactions.
► International capital represented 11.2% of purchases in 2015, an increase of 119.6% from 2014.– In December, President Obama signed into law a provision easing taxes on foreign investments in U.S. real estate, a potential
catalyst for further investment by overseas investors.
►National investment grade cap rates remained unchanged at 5.6%, while price per unit of new construction properties increased 20.1% year-over-year.
►New York, Austin and Seattle are expected to see large inventory growth in 2016, while Southern California will see below-average supply come to market.
►As the homeownership rate has fallen to near 50 year lows, renter households increased to nearly 34 million in 2015, surpassing growth during any previous 10-year period. – Several southeastern markets such as Atlanta, Charlotte, Nashville, Orlando and Tampa have experienced substantial renter
population growth.
►Debt capital remained plentiful as multihousing debt outstanding rose to record highs of $1.1 trillion, an increase of 9.6% from $996.4 billion in 2014.
| 44Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 4
4Q15National Multihousing Market Overview
Historical United States Sales VolumeQuarterly Totals by Property Type
Sales volume in 2015 reached
$142.3 billion, surging 23.5% from
the $115.2 billion in 2014.
Sales volume totaled $39.9 billion in
4Q15, an 11.5% increase from
4Q14 and the largest volume
quarter in the past 15 years.
Garden properties continued to be
favored by investors, accounting for
62.2% of total sales volume in 2015,
while mid/high-rise properties
comprised 34.5% and student
housing 3.3%.
From 2010 through 2015, sales
volume has averaged $23.1 billion
per quarter.
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
$0
$5
$10
$15
$20
$25
$30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ions
Garden Mid/Highrise Student Housing
| 54Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 5
4Q15National Multihousing Market Overview
Historical United States Supply and Demand Annually Completed Units vs. Vacancy Rates
Source: Newmark Grubb Knight Frank Research, U.S. Census Bureau, Reis
138,775
100,804
43,016
79,654
134,971
167,754
192,033
217,142
160,180
99,197
74,890
8.0%
6.6%
5.3%
4.6% 4.6%4.3% 4.4%
4.8%5.1% 5.2% 5.3%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
50,000
100,000
150,000
200,000
250,000
2009 2010 2011 2012 2013 2014 2015 2016* 2017* 2018* 2019*
Annually Completed Units Vacancy Rate
With annually completed units
up 14.5% year-over-year and
vacancy steady at 4.4%, market
fundamentals show stability.
As demand for multihousing has
surged, several single-family
homebuilders such as Lennar and
Toll Brothers have aggressively
pursued expansion in the space.
2016 Inventory Growth
Rank Market % Change
1 New York 5.8%
2 Austin 4.8%
3 Greenville 4.0%
4 Palm Beach 3.9%
5 Seattle 3.8%
| 64Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 6
4Q15National Multihousing Market Overview
Historical United States Pricing TrendsPrice Per Unit vs. Cap Rates
National cap rates have remained
unchanged at 5.6% since 3Q14 and
have compressed only 10 basis
points in the past 36 months.
Price per unit has increased to
$177,070 nationally in 4Q15, an
8.9% year-over-year increase.
Since the market lows of 3Q09,
price per unit has surged 51.4%.
*Based on transactions $25 million and greaterSource: Newmark Grubb Knight Frank Research, Real Capital Analytics
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Price Per Unit Cap Rates
Regional Statistics
Region Cap Rate PPU
Mid-Atlantic 5.5% $197,656
Midwest 6.4% $139,264
Northeast 4.6% $386,949
Southeast 6.5% $121,461
Southwest 5.3% $126,925
West 5.7% $220,340
| 74Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 7
National Multihousing OutlookCantor Fitzgerald Market Insight
Source: Newmark Grubb Knight Frank Research, Cantor Fitzgerald ResearchFor important disclosures on the companies mentioned, contact Cantor Fitzgerald Research Department at 110 East 59th Street, New York, NY 10022 or https://cantor2.bluematrix.com/sellside/Disclosures.action
Cantor Fitzgerald Proprietary Multihousing MetroView Model
Markets with above average growth prospects in 2016
1 Las Vegas
2 Jacksonville
3 Sacramento
4 Orlando
5 San Diego
6 Miami
7 Phoenix
8 San Bernardino/Riverside
9 Palm Beach
10 Fort Lauderdale
11 Tampa-St. Petersburg
12 Oakland-East Bay
13 Atlanta
14 Los Angeles
15 Fort Worth
16 Raleigh-Durham
17 Portland
18 Denver
19 Orange County
20 Seattle
SUPPLY1.9% growth in 2016 and
1.5% in 2017Below-average supply is expected
in Southern California
POPULATION1.1% growth in 2016 and
1.2% in 2017Above average growth is expected
in Austin, Las Vegas, Orlando, Palm Beach and Phoenix
HOME AFFORDABILITY
Los Angeles, New York, San Diego, San Francisco and San
Jose remain favorablefor renters
EMPLOYMENT2.5% growth in 2016 and
2.1% in 2017Standouts include Jacksonville,
Las Vegas, Orlando, Palm Beach and Phoenix
4Q15Capital Markets Analysis
| 84Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 8
4Q15National Multihousing Market Overview
Homeownership Rate TrendsUnited States
Source: Newmark Grubb Knight Frank Research, US Census Bureau
65.6%
69.0%
63.6%
60%
62%
64%
66%
68%
70%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Homeownership Rate Long-Term Homeownership Rate Average
The national homeownership rate
has fallen to 63.6%, the lowest level
since 1967.
Homeownership peaked at 69.0%
in 2004, well before the Great
Recession and has trended
downward each year since.
Of the 75 largest metropolitan
statistical areas, Los Angeles, San
Jose, New York, San Diego and Las
Vegas have the lowest home-
ownership rates.
[Long-Term Average = 65.3%]
| 94Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 9
2010-2015 Renter Population Growth
4Q15National Multihousing Market Overview
Emerging Rental Markets5-Year Change Rate in Rental Population
Source: Newmark Grubb Knight Frank Research, US Census Bureau, ESRI Business Analyst
9.7% 9.3%8.5%
7.9% 7.9% 7.8% 7.7% 7.3% 7.1% 7.0% 6.9% 6.5% 6.1% 6.1% 5.9% 5.9% 5.5% 5.5% 5.4% 5.0%
Wic
hita
Mia
mi
Las
Vega
s
Cha
rlotte
Littl
e R
ock
Cin
cinn
ati
Ral
eigh
-Dur
ham
Salt
Lake
City
Col
umbu
s
Cha
rlest
on
Ric
hmon
d
Phila
delp
hia
Por
tland
Day
ton
Nor
folk
Sea
ttle
San
Ant
onio
San
Jos
e
Kans
as C
ity
Hou
ston
Palm Beach+14.5%
Denver+11.5%
Nashville+12.3%
Tampa+12.5%
Jacksonville+11.7%
Phoenix+11.5%
Atlanta+10.9%
Orlando+10.9%
| 104Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 10
4Q15National Multihousing Market Overview
Source: Newmark Grubb Knight Frank Research, Federal Reserve Bank of St. Louis, Reis
Historical Effective Rent vs. InflationUnited States
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Effective Rent Growth U.S. Consumer Price Index 10 Year U.S. Consumer Price Index Average
Effective rent growth outperformed
inflation by 450 basis points in
2015, marking the largest
differential in a decade.
Since 2005, the 10-year U.S.
Consumer Price Index average has
hovered at 2.1%, while the 10-year
effective rent growth average was
2.9% during the same period.
Effective rent is projected to
increase 3.6% nationally in 2016,
whereas the West and Northeast
regions are expected to increase
4.1% and 4.0%, respectively.
[Long-Term Average = 2.1%]
| 114Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 11
4Q15National Multihousing Market Overview
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
Sales Volume Growth Percentage Change(Year-over-Year)
Suburban Virginia 271.2%
Richmond 150.7%
Baltimore 140.6%
Boston 127.4%
Salt Lake City 108.5%
Philadelphia 107.7%
Miami 105.7%
St. Louis 91.2%
Palm Beach 87.8%
Detroit 70.2%
Kansas City 63.7%
Northern New Jersey 60.7%
Suburban Maryland 53.1%
Manhattan 39.1%
San Diego 37.7%
Portland 36.0%
Tampa 34.9%
Chicago 31.7%
Charlotte 30.1%
Cleveland 27.8%
Top Markets by Volume 2015 Sales Volume(Billions)
Manhattan $13.6
Dallas $7.0
Los Angeles $7.0
Atlanta $5.8
New York City Boroughs $5.7
Suburban Virginia $5.1
Seattle $4.6
Houston $4.1
Denver $4.1
Chicago $3.7
Phoenix $3.7
Boston $3.5
Austin $2.9
Baltimore $2.8
Northern New Jersey $2.5
San Diego $2.4
Tampa $2.3
Orlando $2.1
Suburban Maryland $2.1
Raleigh/Durham $2.0
| 124Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 12
4Q15National Multihousing Market Overview
Investment Grade Cap Rates
*Based on transactions $25 million and greaterSource: Newmark Grubb Knight Frank Research, ARA Newmark, Real Capital Analytics
ATLANTA
5.3%
MANHATTAN
3.8%
BOSTON
4.5%
PHILADELPHIA
5.1%CHICAGO
5.1%
LOS ANGELES
4.1%
SAN FRANCISCO
3.9%
AUSTIN
5.1%HOUSTON
5.5%
DALLAS
5.2%
CHARLOTTE
5.3%
DENVER
5.0%
DETROIT
6.4%
INDIANAPOLIS
6.0%
ORLANDO
5.6%
KANSAS CITY
5.6%LAS VEGAS
5.5%
MIAMI
4.5%
MINNEAPOLIS
5.5%
NASHVILLE
5.6%
TAMPA
5.5%
PHOENIX
5.5%
SEATTLE
4.3%
PORTLAND
4.8%
ST. LOUIS
6.0%
SAN DIEGO
4.6%
SAN JOSE
4.2% WASHINGTON, DC
4.8%
ADDITIONAL MARKETS
MSA Cap Rates
Baltimore 5.2%
Cincinnati 6.2%
Cleveland 6.8%
Columbus 5.9%
Dayton 6.1%
Jacksonville 5.5%
Long Island 5.0%
Louisville 5.6%
Memphis 5.8%
Norfolk 5.6%
Northern NJ 5.0%
NYC Boroughs 4.7%
Orange County 5.1%
Palm Beach 4.9%
Pittsburgh 5.9%
Raleigh-Durham 5.2%
Richmond 5.9%
San Antonio 5.4%
Stamford 5.1%
Tulsa 5.9%
Westchester 5.2%
OKLAHOMA CITY
5.8%
LITTLE ROCK
6.0%
WICHITA
6.0%
SALT LAKE CITY
5.5%
ALBUQUERQUE
5.8%
NEW ORLEANS
6.5%
BIRMINGHAM
6.2%
CHARLESTON
5.5%
SACRAMENTO
4.8%
| 134Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 13
4Q15National Multihousing Market Overview
Investment Grade Price Per Unit
*Based on transactions $25 million and greaterSource: Newmark Grubb Knight Frank Research, ARA Newmark, Real Capital Analytics
ATLANTA
$153,238
MANHATTAN
$654,115
BOSTON
$396,370
PHILADELPHIA
$262,152CHICAGO
$292,253
LOS ANGELES
$336,992
SAN FRANCISCO
$473,400
AUSTIN
$146,134
HOUSTON
$145,013
DALLAS
$146,922
CHARLOTTE
$165,572
DENVER
$204,402
DETROIT
$90,224
INDIANAPOLIS
$157,653
ORLANDO
$160,287
KANSAS CITY
$156,806
LAS VEGAS
$119,014
MIAMI
$298,571
MINNEAPOLIS
$214,535
NASHVILLE
$168,802
TAMPA
$141,974
PHOENIX
$176,466
SEATTLE
$358,657
PORTLAND
$193,775
ST. LOUIS
$225,513
SAN DIEGO
$262,980
SAN JOSE
$369,104 WASHINGTON, DC
$428,048
ADDITIONAL MARKETS
MSA PPU
Baltimore $180,913
Cincinnati $130,208
Cleveland $58,823
Columbus $84,705
Dayton $54,791
Jacksonville $130,000
Long Island $216,930
Louisville $78,780
Memphis $91,830
Norfolk $166,666
Northern NJ $294,425
NYC Boroughs $324,883
Orange County $293,453
Palm Beach $208,897
Pittsburgh $69,880
Raleigh-Durham $147,115
Richmond $98,088
San Antonio $133,674
Stamford $355,761
Tulsa $82,652
Westchester $225,687
OKLAHOMA CITY
$108,313LITTLE ROCK
$117,573
WICHITA
$88,585
SALT LAKE CITY
$177,777
ALBUQUERQUE
$130,374
NEW ORLEANS
$71,094
BIRMINGHAM
$97,500
CHARLESTON
$135,273
SACRAMENTO
$183,992
| 144Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 14
4Q15National Multihousing Market Overview
Top 20 BuyersPast 12 Months (Millions)
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
$706
$716
$770
$784
$809
$824
$841
$893
$933
$1,073
$1,165
$1,168
$1,322
$1,773
$1,813
$2,482
$2,668
$3,193
$7,307
$7,542
Carroll Organization
Independence Realty Trust
TIAA-CREF
CBRE Global Investors
Greystar RE Partners
Invesco Real Estate
Allstate
Steadfast Apartment REIT
Cortland Partners
Rockpoint Group
Heitman
UDR
Strata Equity Group
TruAmerica Multifamily
Guardian Life Insurance Co
Brookfield Asset Management
Ivanhoe Cambridge
Clarion Partners
Blackstone
Lone Star
$720
$743
$747
$761
$767
$827
$964
$1,007
$1,024
$1,028
$1,061
$1,106
$1,165
$1,433
$1,548
$1,916
$2,532
$2,915
$5,518
$8,403
JP Morgan
TGM Associates
Harbor Group International
Capri
Angelo Gordon
Principal Financial
Ares Management
Blackstone
Wood Partners
Brookfield Asset Management
Invesco Real Estate
Holland Partners
Fairfield Residential
GE Capital
Greystar RE Partners
Praedium Group
Associated Estates
Gables Residential
CWCapital
Home Properties
Top 20 SellersPast 12 Months (Millions)
| 154Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 15
4Q15National Multihousing Market Overview
Buyer Distribution United States
11.3% 7.7%
19.5%
8.1% 4.8%
48.0%50.4%
49.2%
60.0%55.3%
32.2% 34.9%23.6% 23.6%
26.4%
1.6% 2.1% 2.5% 3.2%
2.3%
7.0% 4.9% 5.2% 5.1%11.2%
0%
20%
40%
60%
80%
100%
2011 2012 2013 2014 2015
Public/REITs Private Institutional User/Other International
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
8.2% 5.3% 9.7% 8.5% 11.5%
58.5%
51.2% 43.7%56.4%
57.1%
26.0%
27.7%38.5%
26.6%26.1%
3.2%
3.3%
3.8% 5.1% 2.2%4.1%12.5%
4.3% 3.4% 3.1%
0%
20%
40%
60%
80%
100%
2011 2012 2013 2014 2015
Public/REITs Private Institutional User/Other International
Seller Distribution United States
| 164Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 16
4Q15National Multihousing Market Overview
Top Regional BuyersPast 12 Months
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
West
Company Volume
Guardian Life Insurance Co $1.6 B
TruAmerica Multifamily $1.6 B
Blackstone $1.3 B
Allstate $841 M
Maximus RE Partners $655 M
Southwest Midwest Southeast Mid-Atlantic Northeast
Company Volume
Clarion Partners $569 M
Invesco Real Estate $523 M
SteadfastApartment REIT $442 M
Blackstone $342 M
Strata Equity Group $342 M
Company Volume
Lone Star Funds $522 M
Brookfield Asset Management $482 M
Heitman $382 M
Weidner Apt Homes $219 M
Solomon Organization $216 M
Company Volume
Cortland Partners $774 M
Brookfield Asset Management $762 M
Clarion Partners $748 M
Blackstone $637 M
CarrollOrganization $607 M
Company Volume
Lone Star Funds $4.5 B
UDR $900 M
Brookfield Asset Management $663 M
Dweck Properties Ltd $651 M
David Werner Real Estate $434 M
Company Volume
Blackstone $3.5 B
Ivanhoe Cambridge $2.7 B
Lone Star Funds $2.2 B
Fairstead Capital $692 M
Rockpoint Group $663 M
| 174Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 17
Company Total Units
Equity Residential 106,365MAA 79,341Blackstone 77,640Lone Star Funds 58,412Essex Property Trust 45,656Greystar Real Estate Partners 41,000Aimco 38,538Westdale 37,501UDR 37,126Fairfield Residential 36,572Gables Residential 35,195AvalonBay Communities 33,520Weidner Apartment Homes 32,946Starwood Capital Group 32,496Morgan Properties 32,433GE Capital 31,821Brookfield Asset Management 30,316GID 29,906TIAA-CREF 29,306Cammeby’s International 28,787Fowler Property Acquisitions 28,309Bridge Investment Group 28,026Cortland Partners 27,727JRK Asset Management 27,136DRA Advisors 27,128
Northeast Total Units
Cammeby’s International 22,006
RiverBay Corporation 15,372
Blackstone 13,665
Ivanhoe Cambridge 13,627
Morgan Management 13,543
Mid-Atlantic Total Units
Southern Management 24,468
Lone Star Funds 24,219
Morgan Properties 22,399
Equity Residential 15,773
Sawyer Realty Holdings 11,729
Southeast Total Units
MAA 50,012
Cortland Partners 18,681
Lindsey Management Co. 16,939
Equity Residential 16,787
Carroll Organization 16,712
Midwest Total Units
Monarch 15,973
Princeton Enterprises 9,605
Mills Properties 9,539
K&D Group 9,451
Apollo Property Management 9,369
Southwest Total Units
MAA 22,998
Westdale 21,445
Weidner Apartment Homes 19,024
CWS Capital Partners 18,225
Ilan Holdings 15,513
West Total Units
Essex Property Trust 45,274
Equity Residential 33,667
Irvine Company 23,142
Kennedy Wilson 20,365
AvalonBay Communities 17,326
4Q15National Multihousing Market Overview
Largest Landlords by UnitsUnited States and Regions
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
| 184Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 18Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
4Q15National Multihousing Market Overview
International Capital DistributionPast 12 Months
Canada58.9%
UK6.0%
China5.1%
Switzerland4.8%
Mexico4.6%
Sweden4.4%
Bahrain4.1%
Kuwait2.8%
Qatar2.6%
Other6.6%
Percentage Based Upon Dollar Volume of Properties PurchaseINVESTED CAPITAL $100 + MILLION
Ivanhoe Cambridge (Canada), Brookfield Asset Management (Canada) $1 B+
Akelius Fastigheter AB (Sweden), Investcorp (Bahrain) $500 M - $999 M
Starlight Investments (Canada), UBS (Switzerland), Wafra(Kuwait), Qatar Investment Authority (Qatar), Grosvenor (UK), Ergas Group (Canada), Kuafu Properties (China), Venterra Properties (Canada), Shanghai Construction Corp (China), Balfour Beatty (UK)
$250 M - $499 M
H&R REIT (Canada), Zurich Financial (Switzerland), REM Finance (UK), Pure Multi-Family REIT (Canada), Nicola Crosby (Canada), Shanghai Municipal (China), JiyuanFinance (China), Romspen Investment Group (Canada), Amitim (Israel)
$100 M - $249 M
| 194Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 19
4Q15National Multihousing Market Overview
Transaction Analysis Portfolio and Entity-Level Commentary
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Cantor Fitzgerald Research
Increased capital flow demonstrated
attractive underlying fundamentals,
especially among portfolio and
entity-level transactions.
Associated Estates was acquired by
Brookfield Asset Management in
August for $2.5 billion cash, for an
implied cap rate of 5.4%.
Home Properties was acquired by
Lone Stars Funds for $7.6 billion in
October for an implied cap rate
of 5.77%.
Equity Residential agreed to sell
23,262 units to Starwood Capital for
$5.4 billion for an implied cap rate of
5.5%. The transaction is expected to
close in early 2016.
4.4% 4.0% 20.7% 2.8% 1.3% 0.0% 0.5% 11.2% 1.0% 4.3% 9.8%
16.4%21.7%
22.1%
22.9%
11.2% 17.4% 19.3%
16.2% 36.6%20.2%
17.8%
79.2%74.3%
57.2%
74.3%
87.5%82.6%
80.2%
72.5%
62.4%
75.5%72.4%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Entity Portfolio Individual
For important disclosures on the companies mentioned, contact Cantor Fitzgerald Research Department at 110 East 59th Street, New York, NY 10022 or https://cantor2.bluematrix.com/sellside/Disclosures.action
| 204Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 20
1970-1979 1980-1989 1990-1999 2000-2009 2010-2015
4Q15National Multihousing Market Overview
Price Per Unit by AgeYear-over-Year Percentage Change
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
MidwestMid-Atlantic Southeast Southwest West
3.1%19.2% 9.6% 12.4% 28.2%1970-1979 -27.4%
6.8%7.2% 7.3% 10.6% 12.6%1980-1989 33.1%
3.2%-6.5% 4.4% 7.3% 0.7%1990-1999 -8.6%
18.8%32.3% 4.4% 1.5% - 0.4%2000-2009 4.0%
29.8%-10.7% 9.2% 13.8% 28.2%2010-2015 53.4%
Northeast
9.0% 9.5% 3.4% 3.6% 20.1%
UNITED STATES
| 214Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 21
4Q15National Multihousing Market Overview
Select Market FundamentalsInvestment Grade Matrix
*Based on transactions $25 million and greaterSource: Newmark Grubb Knight Frank Research, Real Capital Analytics
Manhattan
Boston Washington, DC
Chicago
San Francisco
Los Angeles
Philadelphia
CharlotteAtlanta
Miami
Dallas HoustonDenver
Portland
Seattle
Austin
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
3.5% 4.0% 4.5% 5.0% 5.5% 6.0%
Pric
e Pe
r Uni
t
Cap Rate
Six Major Markets
Secondary Markets
| 224Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 22
4Q15National Multihousing Market Overview
Renter Households by AgeHistorical Growth Trends (millions)
Source: Newmark Grubb Knight Frank Research, US Census Bureau, Harvard University Joint Center for Housing Studies
10 Year Growth (2005-2015)
Age % Change Rate
Under 30 9.3%
30-39 24.4%
40-49 16.4%
50-59 55.3%
60-69 86.5%
70 and Over 17.8%
20 Year Growth (1995-2015)
Age % Change Rate
Under 30 12.3%
30-39 4.7%
40-49 29.6%
50-59 113.3%
60-69 84.9%
70 and Over 14.5%
1995 2005 2015
UNDER 30 YEARS OLD
10.1 10.3 11.3
30 – 39 YEARS OLD9.8 8.3 10.3
40 – 49 YEARS OLD5.8 6.5 7.5
50 – 59 YEARS OLD
3.1 4.2 6.5
60 – 69 YEARS OLD2.4 2.3 4.4
70 YEARS OLD AND OVER3.5 3.4 4.0
| 234Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 23
4Q15National Multihousing Market Overview
Investment ReturnsYields vs. 10-Year Treasury Bill
Source: Newmark Grubb Knight Frank Research, Real Capital Analytics, Federal Reserve Bank of St. Louis
In December, the Federal Open
Market Committee (FOMC) raised
rates for the first time since 2006,
although this is not expected to
significantly affect the market.
Since 2010, cap rates of garden
properties have compressed by
13.1% and mid/highrise properties
by 20.3%. The decline is minimal
compared to the 10-Year Treasury
Bill yield, which has declined by
38.2% over the same time span.
Current yields of garden and
mid/highrise properties exceed the
10-Year Treasury Bill by 380 and
280 basis points, respectively.
6.1%
5.1%
2.3%
0%
2%
4%
6%
8%
10%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Garden Mid/Highrise 10-Year Treasury Bill
| 244Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 24
4Q15National Multihousing Market Overview
Source: Newmark Grubb Knight Frank Research, Federal Reserve Bank of St. Louis, Mortgage Bankers Association, Real Capital Analytics
Multihousing debt outstanding rose
9.6% year-over-year to $1.1 trillion
from $996.4 billion in 2014.
Mortgage debt outstanding
increased 1.9% or $19.3 billion
quarter-over-quarter.
Mortgage Debt OutstandingUnited States
$632.5
$846.8
$1,059.2
$0
$200
$400
$600
$800
$1,000
$1,200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ions
43%
32%
8%
7%6%
4%
Current Multihousing Debt Holders
GSE Banks & ThriftsState & Local Gov't CMBSLife Insurance Other
Top Multihousing Lenders in 2015($ Billions)
1. Fannie Mae $38.6 2. Freddie Mac $12.63. JP Morgan $4.94. New York Community Bank $4.15. Signature Bank $2.66. Wells Fargo $2.57. US Dept. of Housing & Urban Development $1.88. Prudential $1.79. PNC Financial Services $1.510. Berkadia $1.2
| 254Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 25Source: Newmark Grubb Knight Frank Research, Real Capital Analytics
Lender Composition2015 Originated Loans
6.1% 3.2% 6.4%12.9%
3.8% 5.9% 8.1%13.0%
7.7%2.9%
9.1%8.4%
10.1%
7.9%
7.8% 5.8%
12.1%9.4%
10.4%
8.5%
47.7%
39.5%
52.6%
55.7%
32.3%
59.9%51.1% 46.7% 56.2%
47.3%
6.8%
5.4%
8.8%
4.8%
3.8%
5.4% 7.5%6.7%
8.3%
8.6%
2.8%
4.6%
1.9%0.8%
5.1%
2.9% 2.8%3.3%
1.2%
2.0%
11.0%
13.6%
9.4% 7.3%
9.7%
4.7%
10.3%9.2%
7.1%
18.7%
14.6%
22.3%
9.2% 9.4%
33.6%
12.9%6.9%
10.3% 7.6% 10.9%
2.0% 2.8% 1.5% 1.2% 3.8% 2.5% 1.3% 1.4% 1.6% 1.1%
0%
20%
40%
60%
80%
100%
United States Six Major Metros Secondary Markets Tertiary Markets Northeast Mid-Atlantic Southeast Midwest Southwest West
CMBS Financial Gov't Agency Insurance Int'l Bank Nat'l Bank Reg/Local Bank Private/Other
4Q15National Multihousing Market Overview
| 264Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 26
4Q15National Multihousing Market Overview
Source: Newmark Grubb Knight Frank Research, Federal Reserve Flow of Funds, Trepp
Mortgage MaturitiesUnited States
2015 Breakdown Bank: $26.6 B (26.3%)CMBS: $15.8 B (15.6%)Insurance: $3.9 B (3.8%)Other: $54.8 B (54.3%)Total: $101.0 B * Other includes Fannie Mae, Freddie Mac, bridge loans and hard money loans.
$31.9 $29.0 $26.6 $23.6 $25.9$31.5
$36.9 $36.8$29.9
$21.8$14.8
$10.6$10.7 $15.8
$15.5$21.0
$4.2
$5.0 $3.6
$3.7
$2.9
$2.9
$4.0$3.8
$3.9$4.3
$4.4
$4.2
$4.0 $4.0
$3.9
$3.7
$3.5
$53.2$54.6
$54.8 $57.6
$59.0
$60.4$56.5
$50.4
$42.8
$35.7
$30.2
$0
$20
$40
$60
$80
$100
$120
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Bill
ions
Bank CMBS Insurance Companies Other
| 274Q15 NATIONAL MULTIHOUSING MARKET OVERVIEW 27
4Q15National Multihousing Market Overview
Significant Investment SalesRecently Completed Transactions by ARA Newmark
Ashford GreenCharlotte, NC
Crescent CrosstownTampa, FL
Willow Creek ApartmentsKansas City, MO
Retreat at FlatironsBroomfield, CO
EnsoSan Jose, CA
The BridgeHayward, CA
Buyer:
Bainbridge Companies
Seller/Client:
The Connor Group
Price:
$41.5 million
Cap Rate:
5.59%
Price Per Unit:
$138,333
Units:
300
Year Built:
1995
Buyer:
Centennial
Seller/Client:
Crescent Communities
Price:
$58.3 million
Cap Rate:
5.25%
Price Per Unit:
$169,477
Units:
344
Year Built:
2013
Buyer:
Landmark Realty
Seller/Client:
Price Brothers
Price:
Confidential
Cap Rate:
Confidential
Price Per Unit:
Confidential
Units:
986
Year Built:
1970-1987
Buyer:
Invesco Real Estate
Seller/Client:
Etkin Johnson Group
Price:
$94.5 million
Cap Rate:
5.00%
Price Per Unit:
$252,674
Units:
374
Year Built:
2014
Buyer:
Essex Property Trust
Seller/Client:
Fairfield Residential
Price:
$93.0 million
Cap Rate:
4.08%
Price Per Unit:
$508,197
Units:
183
Year Built:
2014
Buyer:
Phoenix Realty Group
Seller/Client:
Kennedy Wilson
Price:
$158.0 million
Cap Rate:
5.25%
Price Per Unit:
$290,441
Units:
544
Year Built:
1986
Source: Newmark Grubb Knight Frank Research
www.aranewmark.com
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James [email protected]
Blake OklandVice Chairman, Head of US [email protected]
Jonathan MazurManaging Director, [email protected]
Michael WolfsonCapital Markets Research [email protected]
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