1920 Gunbarrel Rd Chattanooga / ,000,000 93,333

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1 Research & Forecast Report CHATTANOOGA Q Multifamily Accelerating success. Source: AXIOMetrics. RCA, CoStar Market Survey Results and Forecasts Sequential Month Annual 1Q16 2Q16 3Q16 4Q16 Dec F 2018F 2019F 2020F Effective Rent Per Unit $895 $916 $909 $897 $880 $848 $873 $904 $920 $949 $985 $1,016 Per Sq. Ft $0.91 $0.94 $0.93 $0.92 $0.91 $0.87 $0.89 $0.92 $0.94 $0.97 $1.01 $1.04 Effective Rent Growth - Annually 5.5% 5.0% 2.4% 1.5% 0.3% 1.1% 3.0% 3.6% 1.8% 3.1% 3.8% 3.2% Effective Rent Growth - Quarterly 1.3% 2.4% -0.8% -1.3% Occupancy Rate 95.6% 95.8% 95.7% 94.8% 94.7% 94.3% 95.5% 95.5% 94.8% 95.0% 95.3% 95.0% Occupancy Change - Annually 0.9% 0.1% -0.1% -1.1% -1.2% 0.5% 1.3% 0.0% -0.7% 0.2% 0.3% -0.3% Occupancy Change - Quarterly -0.3% 0.2% -0.2% -0.8% Economic Concessions Concession Value $-7.36 $-5.87 $ $ $ $ $ As a % of Asking Rent -0.8% -0.7% -1.3% -1.6% -1.8% -1.7% -1.2% RECENT SALES Date Property Name Address City Units Year Built Price in $ $/Units Pending Park Ridge 728 Frawley Rd Chattanooga ,963,771 47,403 Dec-16 Ledford At Hamilton Place 1701 N Concord Rd Chattanooga / ,500,000 70,248 Dec-16 Fountain Gardens 3725 Fountain Ave Chattanooga ,905,000 39,050 Dec-16 Mountain Creek 936 Mountain Creek Rd Chattanooga / ,000,000 67,568 Nov-16 Standifer Place 3400 Jenkins Rd Chattanooga ,500, ,250 Oct-16 Hunters Point 7401 Allemande Way Chattanooga ,000, ,231 Oct-16 Mountain Brook 1185 Mountain Creek Rd Chattanooga / ,625,000 66,518 Oct-16 Silver Creek 3001 Dayton Blvd Chattanooga / ,924,406 47,282 Oct-16 The Chalet 4103 Dayton Blvd Chattanooga / ,775,482 47,755 Sep-16 The District at Hamilton Place 1920 Gunbarrel Rd Chattanooga / ,000,000 93,333 Aug-16 The Overlook Apartments 1201 Boynton Dr Chattanooga / ,340,000 26,790 Jul-16 Golden Gateway 1201 Grove St Chattanooga ,600,000 16,250

2 SUPPLY AND DEMAND According to the Bureau of Labor Statistics, job growth in Chattanooga, TN-GA Metro Area was 1.3% in November 2016, reflecting 3,300 jobs added during a 12-month period. Axiometrics forecasts Chattanooga, TN-GA Metro Area s job growth to be 1.4% in 2017, with 3,586 jobs added. Job growth is expected to average 1.8% from 2018 to 2020, with an average of 4,783 jobs added each year. On the supply side, permits for 608 multifamily units were issued in the 12 months ending in November 2016, up 310 units from the prior year s sum. In terms of total residential housing, 2,122 units were permitted in the 12 months ending November 2016, an increase of 522 units from the prior year s total. Market Employment and Permitting Annual November-16 Annual Forecast Market National F 2018F 2019F 2020F Employment (000s) , Job Gain (000s) , Job Growth (%) 0.5% 0.5% 3.0% 1.3% 1.6% 1.8% 1.4% 1.8% 2.1% 1.7% Total Residential Permitting 1,239 2,173 1,600 2,014 1,087,532 2,199 2,084 2,584 2,032 1,818 Relative Change 5.5% 75.4% -26.4% 48.4% 1.9% 37.4% -5.2% 24.0% -21.4% -10.5% Single Family Units Permitted 1,094 1,073 1,289 1, ,576 Relative Change 4.8% -1.9% 20.1% 14.3% 8.7% Multifamily Units Permitted 123 1, ,009 Relative Change 6.0% 766.7% -72.0% 312.4% -8.6% Multifamily as a % of Total 9.9% 49.1% 18.6% 29.7% 34.1% Demand/Supply Ratio Job Gain / Total Residential Units Permitted Job Gain / Single Family Units Permitted Job Gain / Multifamily Units Permitted Multifamily Absorption and Supply Annual 4Q16 Annual Forecast Market National F 2018F 2019F 2020F Total Units Absorbed (491) 440 1, , New Supply , , Inventory Growth 0.3% 0.4% 2.9% 2.2% 1.5% 2.2% 2.0% 2.1% 1.5% 1.2% MULTIFAMILY ADVISORY GROUP P. 2

3 PIPELINE # Name Status Owner Address Market Units 1 Douglas Heights Lease Up Riverside Development LLC 930 Douglas St Arts District Lofts at Renaissance Under Construction Vision Hospitality Group, Inc. 98 Cherokee Blvd North Chattanooga-Hill Ci Chestnut St Under Construction Kore Company 1400 Chestnut St Downtown Chattanooga Chestnut Under Construction Wise Properties 1920 Chestnut St Southside Integra Vistas Under Construction Integra Land Company 6300 Highway 153 Hixson Market St Under Construction The Simpson Organization 728 Market St Downtown Chattanooga Hawthorne at the Summit Under Construction Hawthorne Residential Partners, LLC 8 The Maclellan Under Construction Heritage Land & Development Co. LLC 8602 Summit Peak Way Collegedale Broad St Downtown Chattanooga 90 9 East 12th Street Apartments Proposed Titan Real Estate Group Llc 812 E 12th St Arts District Broad & 17th Street Lofts Proposed J A Murphy Group 1701 Broad St Southside Fivepoints Northshore Proposed Jeffrey K Morgan 328 Cherokee Blvd North Chattanooga-Hill Ci Chestnut Flats Proposed Robmer 2108 Chestnut St Southside Cowart St Proposed Wells Real Estate Funds 1200 Cowart St Downtown Chattanooga Mountain Creek Rd Proposed Hawthorne Residential Partners, LLC 1105 Mountain Creek Rd 15 Wholelife Apartments Proposed WholeLife Companies Mountain Creek Rd Outer Red Bank 250 Pineville/Moccasin Bend Summit Pointe Proposed Adamson Developers, LLC 8030 Old Lee Hwy Collegedale Grand Oaks at Riverside Proposed Southeastern Development Associates Source: CoStar 950 Riverside Dr Arts District Riverside Dr Proposed Trade Finance International Inc 1428 Riverside Dr Amnicola-East Chattanooga Standard Coosa Artist Lofts Proposed Watkins Street Project LLC 1800 Watkins St Ridgedale-Oak Grove-Clift 170 Total Units 3, Key 19 Lease-Up Under Construction Proposed MULTIFAMILY ADVISORY GROUP P. 3

4 OUR PROVEN TRACK RECORD WHO WE ARE One of the largest and most experienced teams of multifamily specialists in the industry MORE THAN 50 Dedicated Multifamily Professionals & Advisors Overlook at Allensville Square Phase I Knoxville, TN Units: 288 RENAISSANCE AT PEACHER S MILL Clarksville, TN Expansive geographic footprint MORE THAN 33,500 Units sold since 2011 COVERING OVER 20 STATES Overlook at Allensville Square Phase II Knoxville, TN Units: 288 CLIENT: JA Murphy Group UNITS: 216 CHALLENGE: This was a difficult and cumbersome transaction as the debt execution consisted of an assumable HUD loan which dramatically narrows the pool of buyers and extends the process. Additionally, the East Region team reviewed the seller s proforma and found they were charging too high an administrative fee to each renter. STRATEGY & RESULTS: After reducing the fee, ownership was able to achieve an $80,000 annual NOI increase, which resulted in an increased sale price. To sell the property the team, broadly marketed to work with an active HUD buyer comfortable with the process. $2.3 B Group gross transaction value in since 2011 Renaissance at Peacher s Mill Clarksville, TN Units: 216 Selling this property resulted in the highest price per unit in the history of Clarksville. We were extremely pleased with the East Region team and its ability to attract an incredible amount of interest in our 3 assets. The number of offers received and the end results exceeded our expectations. They have a talented group who was a pleasure to work with. Their performance stands out against any of the groups we work with nationally. Nels Billsten, Vice President CORE Realty Holding Management MULTIFAMILY ADVISORY GROUP P. 4

5 WE CAN HELP As 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. MULTIFAMILY ADVISORY GROUP P. 5

6 John Ashley ASSOCIATE EAST REGION DIR Will Mathews PRINCIPAL EAST REGION INSTITUTIONAL CLIENT GROUP DIR Craig Brown ASSOCIATE EAST REGION DIR AT YOUR SERVICE To learn more, scan this with a QR code reader or visit: MULTIFAMILY ADVISORY GROUP P. 6