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

Multifamily Advisory Group | East Region

Accelerating success.

WE KNOW CHATTANOOGASpecialized Real Estate Investment Services

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

Chattanooga is home to an impressive array of major employers, including Blue Cross Blue Shield, Unum, TVA, Erlanger Health System, Memorial Health Care System, McKee Foods Corporation, Pilgrim’s Pride Corporation, Cigna Healthcare, Alstom, and most recently Volkswagen and Amazon.com.Named one of “The 45 Places to Go in 2012” world wide (only 4 U.S. cities were chosen for the travel feature). - Wall Street JournalTourism is a $893 million dollar industry in Chattanooga and Hamilton County, and Hotel/Motel Room Tax Collections for fiscal 2012 were $5,571,577 up from $5,250,752 in fiscal 2011. Tourism and hospitality account for 8,500 jobs with an annual payroll of over $197 million.Chattanooga is known as a regional leader in the medical field, with 11% of jobs and 12% of payroll generated by health care in Hamilton County.In the Chattanooga MSA, over 34,000 businesses employ over 309,000 people and generate over $54 billion in annual sales. Metropolitan Statistical Area (MSA) includes Hamilton, Marion and Sequatchie counties in Tennessee and Catoosa, Dade and Walker counties in GeorgiaA “5 Star” distribution community, with one-third of the US consumer markets wihin a day’s drive, Chattanooga is the headquarters for logistic giants like U.S. Xpress, Covenant Transport and Kenco Logistics.Home to over 15 institutions of higher learner, with the two biggest both having enrollment over 11,000 students. The University of Tennessee at Chattanooga (UTC) offers more than 40 undergraduate, 18 graduate and 3 doctorate degree programs. Chattanooga State Technical Community College offers over 50 majors of study towards degrees and certificates.

WE KNOW WHO YOU ARE

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. 4 MULTIFAMILY ADVISORY GROUP COLLIERS INTERNATIONAL MULTIFAMILY ADVISORY GROUP P. 5www.ColliersMultifamilyEast.com www.ColliersMultifamilyEast.com

Multifamily Absorption and Supply

Annual 2Q16 Annual Forecast

(491) 440 1,314 668 322,402 468 496 390 482 463

Total Units Absorbed

103 109 1,075 657 350,290 570 792 621 335 277

New Supply 0.3% 0.4% 2.9% 3.0% 1.4% 2.2% 2.0% 2.1% 1.5% 0.9%

Inventory Growth 1.1% 1.8% 1.9% 1.9% 1.4% 1.6% 1.6% 1.2% 1.2% 1.0%

Market Employment and Permitting

Annual June-16 Annual Forecast

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

Employment (000s) 237.9 239.0 246.2 249.0 144,185.0 250.9 255.5 258.3 261.8 267.2

Job Gain (000s) 1.1 1.1 7.2 3.0 2,411.0 4.7 4.6 2.8 3.5 5.4

Job Growth (%) 0.5% 0.5% 3.0% 1.2% 1.7% 1.9% 1.8% 1.1% 1.4% 2.1%

Total Residential Permitting 1,239 2,173 1,600 1,451 1,058,258 1,899 2,084 2,584 2,032 1,818

Relative Change 5.5% 75.4% -26.4% -10.7% 3.9% 18.7% 9.7% 24.0% -21.4% -10.5%

Single Family Units Permitted 1,094 1,073 1,289 1,235 658,769

Relative Change 4.8% -1.9% 20.1% 11.2% 10.9%

Multifamily Units Permitted 123 1,066 298 189 370,060

Relative Change 6.0% 766.7% -72.0% -61.7% -6.6%

Multifamily as a % of Total 9.9% 49.1% 18.6% 13.0% 35.0%

Demand/Supply Ratio Job Gain / Total Residential Units Permitted 1.0 0.9 3.3 1.8 2.4 2.9 2.4 1.4 1.4 2.7

Job Gain / Single Family Units Permitted 1.1 1.0 6.7 2.7 4.1

Job Gain / Multifamily Units Permitted 9.8 9.1 6.7 6.1 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 $880 $876 $887 $908 $914 $840 $865 $906 $933 $956 $982 $1,017

Per Sq. Ft $0.89 $0.89 $0.90 $0.92 $0.94 $0.85 $0.87 $0.92 $0.94 $0.97 $0.99 $1.03

Effective Rent Growth - Annually 3.5% 4.0% 5.6% 5.1% 2.6% 1.1% 3.0% 4.7% 3.0% 2.5% 2.7% 3.6%

Effective Rent Growth - Quarterly 1.7% -0.4% 1.2% 2.4%

Occupancy Rate 95.4% 95.6% 95.4% 95.5% 95.7% 94.0% 95.2% 95.5% 94.9% 94.3% 94.5% 95.0%

Occupancy Change - Annually 0.6% 1.0% 0.9% 0.1% 0.3% 0.5% 1.3% 0.2% -0.6% -0.7% 0.2% 0.6%

Occupancy Change - Quarterly 0.0% 0.2% -0.3% 0.2%

Economic Concessions Concession Value $-4.25 $-10.01 $-7.32 $-5.74 $-8.22 $-14.04 $-10.06

As a % of Asking Rent -0.5% -1.1% -0.8% -0.6% -0.9% -1.7% -1.2%

According to the Bureau of Labor Statistics, job growth in Chattanooga, TN-GA Metro Area was 1.2% in July 2016, reflecting 3,000 jobs added during a 12-month period.

Axiometrics forecasts Chattanooga, TN-GA Metro Area’s job growth to be 1.8% in 2017, with 4,586 jobs added. Job growth is expected to average 1.5% from 2018 to 2020, with an average of 3,925 jobs added each year.

On the supply side, permits for 200 multifamily units were issued in the 12 months ending in July 2016, down -98 units from the prior year’s sum. In terms of total residential housing, 1,570 units were permitted in the 12 months ending July 2016, a decrease of -30 units from the prior year’s total.

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

Jul-16 Golden Gateway 1201 Grove St Chattanooga 160 1965 2,600,000 16,250

May-16 Silvertree Seniors Chattanooga Apts

5465 TN-58 Chattanooga 125 1984 / 2007

4,675,000 37,400

Mar-16 Riverview Grande 700 Mansion Cir Chattanooga 186 1964 / 1998 24,750,000 133,065

Feb-16 Elements Of Chattanooga 7310 Standifer Gap Rd Chattanooga 340 1987 / 2007

26,600,000 78,235

Jan-16 Bridgeway At Chattanooga 6839 McCutcheon Rd Chattanooga 250 2014 31,100,000 124,400

Sep-15 The Villas At Oak Crest 7255 Lee Hwy Chattanooga 209 1984 / 999 18,500,000 88,517

Jul-15 Forest on Frazier 120 Forest Ave Chattanooga 30 2014 6,456,000 215,200

Jul-15 Southside Flats 1606 Williams St Chattanooga 40 2009 4,675,000 116,875

Jun-15 Robinson Apartments 622 Georgia Ave Chattanooga 20 1910 / 1977 971,151 48,558

Jun-15 Hardwick Hogshead 600 Georgia Ave Chattanooga 41 1912 3,798,671 92,651

COLLIERS INTERNATIONALP. 6 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com

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

PIPELINE# Name Status Owner Address Market Units1 Douglas Heights Lease Up E 10th Street RSD LLC 930 Douglas St Arts District 1952 Village at Apison Pike Lease Up Sterling Capital Management 8605 Tradewind Cir Collegedale 2483 Maclellan Apartments Under Construction Heritage Land & Development

Co. LLC721 Broad St Downtown Chattanooga 90

4 728 Market St Under Construction The Simpson Organization 728 Market St Downtown Chattanooga 1255 Grand Oaks at Riverside Proposed Southeastern Development

Associates950 Riverside Dr Arts District 450

6 Integra Vistas Proposed Integra Land Company 6300 Highway 153 Hixson 2807 Standard Coosa Artist Lofts Proposed Watkins Street Project LLC 1800 Watkins St Ridgedale-Oak Grove-Clifton 1708 Summit Pointe Proposed Adamson Developers, LLC 8030 Old Lee Hwy Collegedale 3009 Wholelife Apartments Proposed WholeLife Companies 1120-1240 Mountain

Creek RdPineville/Moccasin Bend 104

10 1400 Chestnut Proposed Kore Company 1400 Chestnut St Downtown Chattanooga 21011 1428 Riverside Proposed Trade Finance International Inc 1428 Riverside Dr Amnicola-East Chattanooga 174

Total Units 2,346

Source: CoStar

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Overlook at Allensville SquarePhase IIKnoxville, TNUnits: 288

Overlook at Allensville SquarePhase IKnoxville, TNUnits: 288

Renaissance at Peacher’s MillClarksville, TNUnits: 216

RENAISSANCE AT PEACHER’S MILL | Clarksville, TN

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.

Selling this property resulted in the highest price per unit in the history of Clarksville.

CLIENT: JA Murphy Group UNITS: 216

OUR PROVEN TRACK RECORD

“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

COLLIERS INTERNATIONALP. 8 MULTIFAMILY ADVISORY GROUP www.ColliersMultifamilyEast.com

John AshleyASSOCIATE | EAST REGION

john.ashley@colliers.comDIR +1 615 850 2715

www.ColliersMultifamilyEast.com

To learn more, scan this with a QR code reader or visit:

Will MathewsPRINCIPAL | EAST REGION

INSTITUTIONAL CLIENT GROUP

will.mathews@colliers.comDIR +1 404 877 9285

Brooks ColquittASSOCIATE | EAST REGION

brooks.colquitt@colliers.comDIR +1 404 978 2337

Craig BrownASSOCIATE | EAST REGION

craig.brown@colliers.comDIR +1 404 978 2336

AT YOUR SERVICE