Research & Forecast Report

ATLANTAQ1 2015 | Multifamily

Atlanta Multifamily Rent Growth Highest Since 1995Key Takeaways > Effective rents increased 0.7% quarter-over-quarter, taking year-over-year rent growth to a new 20 year high of 7.5%.

> Highest rent growth in these Submarkets: Alpharetta / Cumming (13.1%), North Gwinnett County (10.7%), East Marietta (10.3%), Chamblee / Brookhaven (10.1%) and Duluth (10.1%).

> Year ending February 2015; 110,900 new jobs were added in the Atlanta metro. This is expanding the employment base 4.6%.

> Overall occupancy rates diluted by trailing lower occupancy rates in lower-tier areas of Atlanta (down 0.2 points to 93.3%). The relatively high construction rate in popular areas was reflected in that same lower occupancy rate.

> 48 properties under construction, 12,544 units. Mainly in Downtown/Midtown, Decatur and Buckhead.

> 1st Quarter 2015; 2,313 units delivered in 9 apartment communities.

Atlanta Multifamily MarketHow High Can It Go? The big story in Atlanta Multi-Family 1st Quarter 2015 is the favorable increase in rental rates. Effective rents increased 0.7% quarter-over-quarter, taking year-over-year rent growth to a new 20-year high of 7.5%. This is the largest increase since 1st Quarter 1995 and well above the national average. The U.S. overall rent growth is 4.6%. Atlanta outperformed other major metropolises throughout the southeast: Nashville (5.7%), Tampa Bay (5.1%), Orlando (4.7%), Charlotte (4.7%), Miami (3.3%) and Raleigh/Durham (3.0%). The largest increase was in 1980’s vintages – these rental rates increased 9.7%. The average rental rate is $943 per month or $0.915 per square foot. Rental rates are expected to continue increasing primarily inside the Perimeter neighborhoods and along Georgia 400 North corridor.

US SOUTH ATLANTA Source: MPF Research

Historical Apartment Occupancy & Rents

Market IndicatorsRelative to prior period

ATLQ1 2015

ATLQ2 2015*

VACANCY

RENTS

CONCESSIONS

TRANSACTIONS

PRICE PER UNIT

CAP RATES -*Projected

89%90%91%92%93%94%95%96%97%

2013

2014

2015

Occ

upan

cy %

$400

$600

$800

$1,000

$1,200

$1,400

2013

2014

2015

AVG

Mon

thly

Ren

t

2 Research & Forecast Report | Q1 2015 | Atlanta Multifamily | Colliers International

Atlanta Multifamily Market (continued)Positive Recession Recovery: Atlanta has been slowly and steadily recovering from the recession, and if this first quarter 2015 is a sign, there are major gains ahead. Employment growth has been increasing progressively since 2013 and Atlanta has some of the highest job growth in the entire U.S. The metro’s $300 billion economy is gaining momentum and projections show the positive multifamily market conditions increasing until mid 2016 when stabilization is anticipated. The local economy is expected to continue adding new jobs at a rapid rate. Even the Bureau of Labor Statistics (BLS) estimates were too low for year-ending November 2014 at 60,000 and had to be revised to 92,000 new jobs. After the high numbers of new jobs in January – February 2015, Atlanta posted its largest employment growth since 1999. Some of the major corporate wins this quarter include relocations, new offices, and expansions from Mercedes-Benz, Athenahealth, Kaiser

Permanente, NCR Corporation, Cisco Systems, Inc. and WorldPay. Atlanta has also made major gains in the technology headquarters arena. Over the past 5 years investors have committed $1.2 billion in venture capital to Atlanta based startups according to the CrunchBase data. There is a clear growth path for the market which is mainly central Perimeter and the northern suburban areas. These are historically and projected to be the most live-work-play areas in the region.

To conclude, the rent growth for Atlanta this quarter has been exceptional and increases are projected through 2016. Job growth is forecasted to continue gaining momentum with Atlanta adding 93,000 jobs in the next year. Areas to watch include: central Perimeter in-town neighborhoods as well as the northern suburbs and along the Georgia 400 corridor.

Historical Investment Volume & Cap Rates

UPDATE - Recent Transactions in the Market

Notable Sales Activity

PROPERTY SUBMARKET SALES DATE SALE PRICE SIZE (UNITS) PRICE / UNIT BUYER

Roswell Village Apartments North Fulton 3/24/2015 $88,000,000 668 $131,736 Strata Equity Group

Deerfield Village Apartments North Fulton 3/24/2015 $85,000,000 554 $153,429 Strata Equity Group

The Manor at Buckhead Buckhead 3/11/2015 $74,250,000 301 $246,678 Carroll Org./Goldman Sachs

Madison at River Sound Northeast Atlanta 3/12/2015 $58,550,000 586 $99,575 Investors Mgmt. Group

Barrington Mill Apartments Northwest Atlanta 2/6/2015 $58,000,000 752 $77,128 BH Mgmt./Freedom REIT

Lofts at Perimeter Center Central Perimeter 2/26/2015 $56,575,000 269 $221,098 AEW Capital Mgmt.

Heights at Perimeter Center Central Perimeter 2/26/2015 $54,825,000 266 $221,098 AEW Capital Mgmt.

1160 Hammond Dr. - Phase II Central Perimeter 3/2/2015 $54,178,857 236 $229,571 Associated Estates Realty

Wesley St. James Central Perimeter 2/9/2015 $54,000,000 504 $107,143 Euramex Mgmt. Group

Preston Hills Northeast Atlanta 3/10/2015 $51,000,000 464 $109,914 Steadfast Apartment REIT

Sales Volume AVG Cap Rate

ATLANTA MULTIFAMILY

Apartment investment volume in Atlanta was up 51% compared to the end of 2013. Just over 235 properties sold in 2014. According to Real Capital Analytics, the average price per unit in Atlanta increased to $94,037 which is 29% higher than the end of 2013. The average cap rate for apartments in the Atlanta market has increased slightly from the end of 2013 to 6.8%.

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Source: Real Capital Analytics

Source: CoStar Comps

3 Research & Forecast Report | Q1 2015 | Atlanta Multifamily | Colliers International

Multifamily Pipeline | Urban Atlanta Sources: CoStar Property, MPF Research

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UNDER CONSTRUCTION

# Name Developer/Owner Address Market Units

1 Broadstone Maple Alliance Residential Company 3091 Maple Dr Buckhead 250

2 Camden Paces Camden Property Trust 75 E Andrews Dr NW Buckhead 178

3 Alexan on Krog Trammell Crow Residential Company 112 Krog St NE Downtown 222

4 Peachtree Apartments JLB Partners, LP 782 Peachtree St NE Midtown 294

5 The Office Apartments Paces Properties 250 Piedmont Ave NE Downtown 453

6 33 Peachtree Place Wood Partners 33 Peachtree Pl NE Midtown 369

7 Ardmore & 28th Cocke Finkelstein, Inc. 306 Ardmore Cir NW Midtown 165

8 The Monroe Pollack Shores Real Estate Group 222 Colonial Homes Dr NW Midtown 218

9 60 11th St Selig Enterprises, Inc. 60 11th St NE Midtown 320

10 Aspire West Midtown Westplan Investors 1390 Northside Dr Midtown 133

11 The Brady Perennial Properties, Inc. 930 Howell Mill Rd Midtown 230

12 Crescent Howell Mill Crescent Communities, LLC 1950 Howell Mill Rd NW Midtown 257

13 The Heights at West Midtown The Worthing Companies 507 Bishop St NW Midtown 224

14 1105 Town Brookhaven - Phase II The Sembler Company 1105 Town Blvd Buckhead 227

15 Gables Oglethorpe Regent Partners 2925 Hermance Dr NE Buckhead 369

16 Alta Brookhaven Phase II Wood Partners 1295 Dresden Dr NE Buckhead 124

17 AMLI Piedmont Heights AMLI Residential Properties, L.P. 737 Lindbergh Dr NE Buckhead 375

18 Elan Lindbergh Greystar Real Estate Partners 741 Morosgo Dr NE Buckhead 359

19 Modera Morningside Mill Creek Residential Trust LLC 1845 Piedmont Ave NE Buckhead 300

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1013

4 Research & Forecast Report | Q1 2015 | Atlanta Multifamily | Colliers International

Multifamily Pipeline | Urban Atlanta (cont.) Sources: CoStar Property, MPF Research

LEASE UP

# Name Developer/Owner Address Market Units

1 Daily World Apartments Gene Kansas Commercial Real Estate 145 Auburn Ave NE Downtown 5

2 Haynes House Alliance Residential Company 2420 Peachtree Rd NW Midtown 186

3 Berkshire Terminus Berkshire Group 3280 Peachtree Rd NE Buckhead 355

4 755 North Avenue Perennial Properties, Inc. 755 North Ave NE Midtown 227

5 Inman Quarter South City Partners 299 N Highland Ave Midtown 200

6 AMLI Ponce Park AMLI Residential Properties, L.P. 641 NE North Ave Midtown 305

7 131 Ponce Sereo Group, Inc. 131 Ponce de Leon Ave NE Midtown 280

8 The Jane Atlanta Pollack Shores Real Estate Group 214 Colonial Homes Dr NW Midtown 280

9 The Leonard Urban Realty Partners 301 Memorial Dr SE Downtown 94

10 Steelworks The Preston Partnership 1220 Mecaslin St NW Midtown 329

11 Alta Brookhaven Wood Partners 1295 Dresden Dr NE Buckhead 106

12 1105 Town Brookhaven Fairfield Residential 1105 Town Blvd Buckhead 72

13 SkyHouse Buckhead Novare Group 3390 Stratford Rd Buckhead 362

14 Citizen Perimeter Pollack Shores Real Estate Group 1125 Hammond Dr NE Central Perimeter 341

15 Overton Rise Apartments Newport Development, LLC 3695 Cumberland Blvd Northwest Atlanta 294

16 Residences at Chastain RAM Partners, LLC 4011 Roswell Rd Buckhead 119

17 Indigo House 111 Glenridge Point Pky NE Central Perimeter 181

18 1160 Hammond Northwood Ravin 1160 Hammond Dr NE Central Perimeter 114

19 1160 Hammond - Phase II Northwood Ravin 1160 Hammond Dr NE Central Perimeter 236

TOTAL 4,086

UNDER CONSTRUCTION, cont

# Name Developer/Owner Address Market Units

20 AMLI City Place AMLI Residential Properties, L.P. 3464 Roxboro Rd NE Buckhead 640

21 Cyan on Peachtree Atlantic Realty Partners 3380 Peachtree Rd NE Buckhead 326

22 Post Alexander - Phase II Post Properties, Inc. 3410 Lenox Rd NE Buckhead 307

23 Solis Downwood Terwilliger Pappas Howell Mill Rd Midtown 280

24 Aspire North Druid Hills Westplan Investors 7 Executive Park Dr NE Buckhead 310

25 Gables Emory Point Phase II Clarion Partners 1627 Clifton Rd NE Northlake 307

26 Reserve at the Ballpark Atlantic Realty Partners Circle 75 Pky Northwest Atlanta 318

27 The Metro Audubon Communities 1500 Parkwood Cir SE Northwest Atlanta 200

28 The Encore Oxford Properties 3290 Cobb Galleria Pky Northwest Atlanta 339

29 The Collection JLB Partners, LP 4600 Roswell Rd Buckhead 316

30 The Place on Ponce - Phase II Carter USA 315 W Ponce de Leon Ave East Atlanta 234

31 Alexan Decatur Trammell Crow Residential Company 160 Clairemont Ave East Atanta 167

32 Trinity Triangle Centro Development LLC 245 E Trinity Pl East Atlanta 210

33 The Reserve at Decatur Atlantic Realty Partners 2600 Milscott Dr East Atlanta 330

35 One City Walk George S. Morgan Development Co., Inc. 6038 Roswell Rd NE Central Perimeter 203

TOTAL 9,554

Over 50 Multifamily Developments currently Proposed for the Metro Atlanta Area.

5 Research & Forecast Report | Q1 2015 | Atlanta Multifamily | Colliers International

Metro Atlanta Housing Permit Activity

Metro Atlanta Employment Overview

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Multifam

ily Permits

 Issued

Metro Atlanta Employment Comparison

METRO AREA RANK Y-O-Y EMPLOYMENT

Y-O-Y PERCENT

UNEMPLOYMENTRATE

New York/NNJ 1 172,200 1.9% 5.6%

Los Angeles/OC 2 133,100 2.4% 6.7%

Dallas-Fort Worth 3 110,000 3.5% 4.0%

Houston 4 97,500 3.4% 4.1%

Atlanta 5 88,200 3.7% 6.4%

Miami-Ft. Lauderdale 6 76,200 3.2% 5.6%

San Francisco 7 74,500 3.5% 4.4%

Chicago 8 59,300 1.3% 5.6%

Seattle 9 53,800 3.0% 4.8%

Denver 10 47,400 3.7% 3.9%

Orlando 11 44,800 4.2% 5.0%

San Jose 12 43,500 4.5% 4.6%

U.S. Total 2,649,000 1.9% 6.2%

Mercedes-Benz relocates headquarters to Atlanta bringing 400 existing employees to the state and creating 600 new jobs. > Atlanta Business Chronicle - February 2015

Kaiser Permanente to put IT campus in Midtown Atlanta and create 900 new jobs. > Atlanta Business Chronicle - April 2015

NCR Corp. to move its headquarters from Duluth (Northeast Atlanta Metro) to midtown, near GA Tech campus, relocating 3,000 - 4,000 jobs. > Atlanta Business Chronicle - January 2015

WorldPay relocates US HQ and 670 employees to Atlanta with plans to add 600 new jobs. > Business Wire - December 2014

Cisco Systems Inc. is adding up to 150 new jobs in Atlanta. > Atlanta Business Chronicle - April 2015

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Jobs Add

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sand

s)

Source: U.S. Census Bureau

Source: US Dept. of Labor Statistics/Moody’s Analytics

Source: Bureau of Labor Statistics; Metro Level Data 2014 Average, not Seasonally Adjusted

Atlanta News

6 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Southeast MultifamilyInvestment ServicesColliers International | AtlantaPromenade | Suite 8001230 Peachtree Street, NEAtlanta, Georgia | USA+1 404 888 9000

FOR MORE INFORMATIONRon CameronSenior Vice President | Atlanta+1 404 888 9000ron.cameron@colliers.com

Will MathewsVice President | Atlanta+1 404 888 9000will.mathews@colliers.com

CONTRIBUTORSScott AmosonDirector of Research | Atlanta

Jaime KahnProject Manager | Atlanta

Brittany StanleyAssociate Financial Analyst | Atlanta

Atlanta Submarkets

Units transacted through 2014

22,500MORE THAN

Group gross transaction value in 2013, $4.5B national company transaction value

$2.0B

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

14TRANSACTING IN

STATES