Multifamily Advisory Group | East Region WE KNOW LITTLE ROCK · Oct-15 Fairfield Apartments 1912 Green Mountain Dr Little Rock 337 1974 / 1999 19,000,000 56,380 Oct-15 The Berkley

COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 1www.ColliersMultifamilyEast.com

Multifamily Advisory Group | East Region

Accelerating success.

WE KNOW LITTLE ROCKSpecialized Real Estate Investment Services

COLLIERS INTERNATIONALP. 2 MULTIFAMILY ADVISORY GROUP COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 3www.ColliersMultifamilyEast.com www.ColliersMultifamilyEast.com

WE KNOW WHO YOU AREDillard’s Department Stores, Windstream Communications and Acxiom, Simmons Bank, Bank of the Ozarks, Rose Law Firm, Central Flying Service and large brokerage Stephens Inc. are headquartered in Little Rock.

Large companies headquartered in other cities but with a large presence in Little Rock are Dassault Falcon Jet near Little Rock National Airport in the eastern part of the city, Fidelity National Information Services in northwestern Little Rock, and Welspun Corp in Southeast Little Rock.

Little Rock and its surroundings are the headquarters for some of the largest non-profit organizations in the world, such as Winrock International, Heifer International, the Association of Community Organizations for Reform Now, Clinton Foundation, Lions World Services for the Blind, Clinton Presidential Center, Winthrop Rockefeller Foundation, FamilyLife, Audubon Arkansas, and The Nature Conservancy.

Associations, such as the American Taekwondo Association, Arkansas Hospital Association, and the Quapaw Quarter Association.

Arkansas Blue Cross and Blue Shield, Baptist Health Medical Center, Entergy, Dassault Falcon Jet, Siemens, AT&T Mobility, Kroger, Euronet Worldwide, L’Oréal Paris, Timex, and UAMS are employers throughout Little Rock.

One of the largest public employers in the state with over 10,552 employees, the University of Arkansas for Medical Sciences (UAMS) and its healthcare partners — Arkansas Children’s Hospital and the Central Arkansas Veterans Healthcare System—have a total economic impact in Arkansas of about $5 billion per year. UAMS receives less than 11% of its funding from the state. Its operation is funded by payments for clinical services (64%), grants and contracts (18%), philanthropy and other (5%), and tuition and fees (2%).

The Little Rock port is an intermodal river port with a large industrial business complex. It is designated as Foreign Trade Zone 14. International corporations such as Danish manufacturer LM Glasfiber have established new facilities adjacent to the port.

*Source: https://en.wikipedia.org/wiki/Little_Rock,_Arkansas


Multifamily Absorption and Supply

Annual 2Q16 Annual Forecast

2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F

Total Units Absorbed

621 1,036 105 917 322,402 993 667 905 629 1,093

New Supply 1,212 669 388 497 350,290 750 610 594 992 836

Inventory Growth 2.6% 1.9% 1.1% 1.1% 1.4% 1.2% 1.4% 1.2% 1.8% 1.8%

Market Employment and Permitting

Annual June-16 Annual Forecast

2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F

Employment (000s) 344.6 345.7 350.4 353.8 144,185.0 355.9 360.7 364.2 368.3 373.3

Job Gain (000s) 2.1 1.1 4.7 5.9 2,411.0 5.5 4.8 3.5 4.1 5.0

Job Growth (%) 0.6% 0.3% 1.3% 1.7% 1.7% 1.6% 1.4% 1.0% 1.1% 1.4%

Total Residential Permitting 2,322 1,877 2,699 2,511 1,058,258 2,466 2,878 3,452 3,762 3,020

Relative Change -25.6% -19.2% 43.8% 21.1% 3.9% -8.6% 16.7% 19.9% 9.0% -19.7%

Single Family Units Permitted 1,508 1,309 1,487 1,442 658,769

Relative Change -9.0% -13.2% 13.6% 4.6% 10.9%

Multifamily Units Permitted 744 485 1,142 1,006 370,060

Relative Change -44.8% -34.8% 135.5% 57.9% -6.6%

Multifamily as a % of Total 32.0% 25.8% 42.3% 40.1% 35.0%

Demand/Supply Ratio Job Gain / Total Residential Units Permitted 0.7 0.5 2.5 2.8 2.4 2.0 2.0 1.2 1.2 1.3

Job Gain / Single Family Units Permitted 1.3 0.8 3.6 4.3 4.1

Job Gain / Multifamily Units Permitted 1.6 1.5 9.6 9.3 6.1

WE KNOW YOUR MARKET

RECENT SALES

SUPPLY AND DEMAND

Source: AXIOMetrics. RCA

Market Survey Results and ForecastsSequential Month Annual

3Q15 4Q15 1Q16 2Q16 Jul-16 2014 2015 2016F 2017F 2018F 2019F 2020F

Effective Rent Per Unit $746 $742 $748 $755 $760 $737 $742 $756 $774 $798 $818 $842

Per Sq. Ft $0.83 $0.82 $0.83 $0.84 $0.84 $0.82 $0.82 $0.84 $0.86 $0.89 $0.91 $0.94

Effective Rent Growth - Annually 1.2% 0.7% 1.1% 2.3% 1.8% -0.1% 0.6% 1.9% 2.5% 3.0% 2.5% 2.9%

Effective Rent Growth - Quarterly 1.0% -0.6% 0.9% 0.9%

Occupancy Rate 93.4% 92.7% 92.6% 93.9% 93.9% 93.1% 92.9% 93.4% 93.8% 94.2% 93.8% 94.2%

Occupancy Change - Annually -0.2% -0.6% -0.1% 1.0% 1.0% 0.2% -0.2% 0.6% 0.3% 0.5% -0.4% 0.5%

Occupancy Change - Quarterly 0.5% -0.8% -0.1% 1.4%

Economic Concessions Concession Value $-10.59 $-13.59 $-17.04 $-13.10 $-12.05 $-10.81 $-13.12

As a % of Asking Rent -1.4% -1.8% -2.2% -1.7% -1.6% -1.4% -1.7%

According to the Bureau of Labor Statistics, job growth in Little Rock-North Little Rock-Conway, AR Metro Area was 1.7% in July 2016, reflecting 5,900 jobs added during a 12-month period. The metro job growth figure was at the national number.

Axiometrics forecasts Little Rock-North Little Rock-Conway, AR Metro Area’s job growth to be 1.4% in 2017, with 4,839 jobs added. Job growth is expected to average 1.2% from 2018 to 2020, with an average of 4,209 jobs added each year.

On the supply side, permits for 1,006 multifamily units were issued in the 12 months ending in July 2016, down -136 units from the prior year’s sum. In terms of total residential housing, 2,635 units were permitted in the 12 months ending July 2016, a decrease of -64 units from the prior year’s total.

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

Jul-16 Oakwood 1310 Smithwick Dr Jacksonville 240 1971 6,550,000 27,292

Jun-16 Towne Oaks Apartments 9300 Treasure Hill Rd Little Rock 216 1975 10,080,000 46,667

Apr-16 Colony West Apartments 1420 Breckenridge Dr Little Rock 126 1972 6,300,000 50,000

Mar-16 Metropolitan 75 Riverfront Dr North Little Rock

260 2008 32,015,000 123,135

Feb-16 St Johns Apartments 5501 W 65th St Little Rock 224 1972 3,200,000 14,286

Dec-15 Shorter College Garden 800 Beech St North Little Rock

196 1967 7,050,000 35,969

Dec-15 Willowbend 300 Marshall Rd Jacksonville 100 1977 4,250,000 42,500

Dec-15 Riverhouse Apartments 1200 Brookwood Dr Little Rock 261 2015 40,222,576 154,109

Nov-15 Crestwood Manor Apartments

3802 Kavanaugh Blvd Little Rock 218 1966 9,075,000 41,628

Oct-15 Reserve at Greenwood 1602 Green Mountain Dr Little Rock 450 1975 / 1999 9,000,000 20,000

Oct-15 Fairfield Apartments 1912 Green Mountain Dr Little Rock 337 1974 / 1999 19,000,000 56,380

Oct-15 The Berkley Apartments 1601 N Shackleford Rd Little Rock 252 1974 / 1999 12,600,000 50,000

Oct-15 Warren House/Terrace II Apts.

1900-2000 Reservoir Rd Little Rock 223 1975 3,600,000 16,143

Oct-15 Valley Crossing Apartments 1502 Green Mountain Dr Little Rock 211 1974 9,000,000 42,654

Oct-15 Castle Hills 3200 Congo Rd Benton 96 1986 3,000,000 31,250


IDENTIFIED SUPPLY PIPELINEAs of September 6, 2016, Axiometrics has identified 646 apartment units scheduled for delivery in 2016, of which, 165 have been delivered. As a comparison, there were 389 apartment units delivered in 2015. Properties delivered to the market in the last 12 months have achieved an average asking rent of $1,112 per unit, or $1.20 per square foot. Effective rent has averaged $1,104, or $1.19 per square foot, resulting in an average concession value of $-7.72. As a comparison, existing properties in the market had an average asking rent of $768 per unit ($0.85 per square foot) and an average effective rent of $755 per unit, or $0.84 per square foot, in 2Q16. Concessions for existing properties averaged $-13.10.

Submarket Delivery Schedule

Pipeline Delivery Schedule Pipeline Lease Up Trend

Units Absorbed Asking Rent Effective Rent

Top Submarkets 2014 2015 2016 Total Totals PPM Per Unit PSF Per Unit PSF North Little Rock 301 108 409 $954 $1.05 $954 $1.05

Pulaski County/Other 174 174 $1,091 $1.24 $1,091 $1.24

Saline County 280 280 104 17 $1,041 $1.10 $1,037 $1.10

West 84 84 168 83 10 $1,155 $1.25 $1,151 $1.25

Other 78 305 383 187 12 $1,100 $1.19 $1,096 $1.18

Little Rock-North Little Rock-Conway, AR

379 389 646 1,414

*Based on 2016 deliveries *Trend based on a trailing 12 month period

# Name Status Owner Address Market Units1 Fountaine Bleau West Under Construction Burkhalter Technologies Inc. 4216 Bowman Rd Outer Southwest/University 1002 Bowman Pointe Under Construction Garth Development LLC 3321 S Bowman Rd Outlying West 1003 Village at the Gateway Proposed First Community Bank 12500 Vimy Ridge Rd Chicot West I-30 South 200

Total Units 400

Source: CoStar

12

3


“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

WHO WE AREOne of the largest and most

experienced teams of multifamily

specialists in the industry

Units sold since 2011

30,000MORE THAN

Group gross transaction value in since 2011

$2.0B

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

20COVERING OVER

STATES

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 INTERNATIONALP. 10 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com

www.ColliersMultifamilyEast.com

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AT YOUR SERVICE

Gabe TovarASSOCIATE | EAST REGION

[email protected] +1 816 556 1161

Will MathewsPRINCIPAL | EAST REGION

INSTITUTIONAL CLIENT GROUP


Brooks ColquittASSOCIATE | EAST REGION


Craig BrownASSOCIATE | EAST REGION


Bob Galamba, CCIM, SIOR

SENIOR VICE PRESIDENT | EAST REGION


Documents

Multifamily Advisory Group | East Region WE KNOW LITTLE ROCK · Oct-15 Fairfield Apartments 1912 Green Mountain Dr Little Rock 337 1974 / 1999 19,000,000 56,380 Oct-15 The Berkley