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2PRG
Residential Real Estate
For-sale
Rental Multi Family
Single Family
Urban
Suburban
Market Rate
Low IncomeIncome Restricted
Demographic Targeted
Existing
New Construction
4PRG
Behind Today’s Housing MarketsThe Role of Leverage
U.S. Public/Private Debt as a % of GDP – 1920 to Date
U.S. Savings Rate - 1959 to Date
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Jan
-59
Jan
-62
Jan
-65
Jan
-68
Jan
-71
Jan
-74
Jan
-77
Jan
-80
Jan
-83
Jan
-86
Jan
-89
Jan
-92
Jan
-95
Jan
-98
Jan
-01
Jan
-04
Jan
-07
Public/Private Deleveraging• Balance Sheet driven “Reset” following
highest levels debt in U.S. history.
U.S. Consumer Savings Rate• Reversing several decades long trend
for the first time in 50 years.
5PRG
U.S. Median Housing Prices - 1980 to Date
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
$250,000
$275,000
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
Year
Pri
ce
Inflation-adjusted house prices
Nominal house prices
Today’s Housing MarketsHousing Prices Down 30%
6PRG
Today’s Housing MarketsRental Occupancy Below 90% - Reduced Rents
U.S. Historical Rental Market Data
$0
$200
$400
$600
$800
$1,000
$1,200
1980
1985
1990
1995
2000
2005
2009
Ren
t
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Vac
ancy
%
U.S. Median Rent
U.S. Rental Vacancies
7PRG
20 Year Historical U.S. Housing Completions
0K
100K
200K
300K
400K
500K
600K
1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Year
# o
f U
nit
s
AFFORDABLE
MULTIFAMILY
Today’s Housing MarketsMultifamily Production at 20-year Low
8PRG
Today’s Housing MarketsMultifamily Pricing Returns to 2001 Spreads
Multifamily Cap Rates - Average Spread to U.S. 10-Yr Treasuries
358bps 354bps372bps
273bps
241bps
147bps
180bps
300bps
372bps
0bps
50bps
100bps
150bps
200bps
250bps
300bps
350bps
400bps
2001 2002 2003 2004 2005 2006 2007 2008 2009
Sp
read
Avg. Spread for MF Cap Rates
9PRG
The Future for Multifamily
• Supply is Limited– Starts at historical lows– Rising interest rates will
suppress development
• Demand is Brewing– Occupancy at historical lows– Economic recovery and
“Millennial” generation on horizon
10PRG
Target Product Types
Stabilized Rental Broken Condos
Failed Condo Conversions/High-vacancy Rental
New Development for Rental