TWIN CITIES MULTIFAMILY MARKET | 2014-15

Mortgage banking for multifamily housing, senior housing, student housing, and healthcare facilities

M A R K E T V I E W P O I N T

ACKNOWLEDGEMENTSReport Author: Thomas G. O’Neil, Vice President of Midwest FHA Operations, Dougherty Mortgage LLCResearch Assistant: Fritz Waldvogel, Analyst, Dougherty Mortgage LLCReport Layout: Shannon Churchward, Churchward Design

This report is provided for educational purposes for our clients and business associates. The unauthorized use of this work is prohibited. © 2014 DoughertyMortgage LLC

DISCLAIMERThis report assesses the 7-county Twin Cities apartment market as of third quarter 2014 using data from numerous sources. Projects analyzed generallycontain 20 or more units. Market pricing calculations reflect quoted/asking rents before concessions and exclude rents that are restricted per recordedcovenants. The information contained herein has been obtained from sources deemed but not guaranteed to be reliable. Accuracy and completeness are notguaranteed. Past performance does not guarantee future results. Dougherty Mortgage LLC warns against the making of site-specific development decisionsusing this report’s information without a separate and full review of all available information by professional analysts.

DATA SOURCESMarket data in this report comes from a variety of available sources including project web sites, rental clearinghouse sites, industry reports, accounts fromnewspapers and other media outlets, and leasing personnel, building managers, and other real estate professionals. Building permit data was provided by theMet Council and the US Census. Aerial maps were provided by Google per license agreement. The Twin Cities Metro Area map was provided by the Met Council.

PHOTO CREDITSAll photos in this report are original from Dougherty Mortgage except for the following: Eliot Apartments and Millennium at West End (City of St. Louis Park),Victoria Park Apartments (Apartments.com), 4Marq (Star Tribune and Urban Works Architecture), 4th Street Housing Co-op (riverton.org), and Five15 on the Park (Star Tribune).

INTRODUCTION 1NEW MULTIFAMILY PRODUCT TYPES 2TWIN CITIES MULTIFAMILY SUBMARKETS 3DEVELOPMENT PATTERNS BY SUBMARKET 4-7MAPS: NEW MULTIFAMILY DEVELOPMENT IN LEADING SUBMARKETS 2003-2015

DOWNTOWN MINNEAPOLIS 8-9MINNEAPOLIS UPTOWN 10-11UNIVERSITY OF MINNESOTA NEIGHBORHOODS 12-13FIRST-RING SUBURB SPOTLIGHT - ST. LOUIS PARK 14DOWNTOWN ST. PAUL 15

NEW PRODUCT PRICING TRENDS 16-19MARKET OUTLOOK: 2015 20ABOUT DOUGHERTY MORTGAGE 21

T A B L E O F C O N T E N T S

Market ViewpointTwin Cities Multifamily Market 2014-15

Dougherty Mortgage LLC90 South Seventh Street, Suite 4300Minneapolis, MN 55402612-317-2100www.doughertymarkets.com

For more information about this report, please contact Thomas G. O’Neil at Dougherty Mortgage LLC 612-317-2122, toneil@doughertymarkets.com

AT THE DEPTHS of the U.S.housing crisis in 2008-2009, fewwere looking ahead to the point whendevelopers would again provide aconsistent supply of new units andconsumers would widely embracethem. Precipitously-falling homevalues loomed over the country, andby 2009, foreclosures hit a recordyearly peak of 3.96 million. The crisisbecame broad-based across allhousing types, and lenders turned off the flow of capital to virtually allmarkets. The Twin Cities was noexception. At the low point in 2009,multi-unit construction – whetherapartments, townhomes orcondominiums – hit a historic low with just 932 new units built, while only 3,000 single-family homes were added (see chart).This in a metro area of over 3 million people.

Today, we are well past those low points and the housing sector has much more strength and resiliency. In the Twin Cities, asignificant amount of new multifamily product has been delivered and numerous areas have been transformed into vibrantresidential districts. Since the start of 2010, more than 110 rental projects offering roughly 13,300 units have been built inthe Twin Cities. Twenty-two new developments will add another 3,800+ rental units in 2015 and up to 11,400 units are inthe proposal stage for 2016 and after. Rental units have comprised between roughly 20% and 50% of all new housing unitsin the Twin Cities in each of the past three years, and about 33% of all new units from 2010 through 2014.

What has driven all of the recent multifamily construction? First and foremost, the Twin Cities hit a point of severely pent-updemand. Extremely low construction volume from 2008 through 2011 meant that the Twin Cities simply had too few housingunits for its steadily-growing population. While the number of households continued to expand by roughly 14,000 to 15,000per year (Met Council), housing production hit no more than 5,000 units in any given year during this four-year stretch. Oncethe capital markets stabilized after 2010, low interest rates allowed developers to construct new units to start meeting thispent-up demand.

Second, the Twin Cities began to hit its stride as a dynamic, interesting, and very desirable place to work and live – and notjust for locals. One of the country’s most diverse job bases has led the Twin Cities to achieve the country’s lowest 2014unemployment rate (3.8%) among the 49 U.S. metro areas with 1 million people or more. As well, a growing array of culturaland recreational amenities – including a vast biking infrastructure – has made the Twin Cities one of the nation’s top areasfor vibrant young “creatives,” cited by Forbes Magazine as the 10th-best metro area out of the nation’s top 100 for collegegraduates age 24 to 34.

Third, lifestyle preferences and investment views of many householders – especially younger ones – have elevated rentalhousing to the preferred choice. Highly-mobile younger professionals, active empty-nesters, and households seeking low-maintenance living all see rental housing as a better option than ownership. And there are no risks to losing valuablehome equity in an apartment.

Going forward, many questions remain. Most notably, multifamily stakeholders want to know how long this market expansioncan and will continue. This report provides a detailed look at key market dynamics that ultimately hold the answers toessential questions. We at Dougherty Mortgage hope you find value in this report and gain a new perspective for thisimportant part of the Twin Cities housing economy.

.

27%25%

34%

27%

29%

26%

27%26%

27%

23%

33%

28%

54%

44%

48%

20%

25%

30%

35%

40%

45%

50%

55%

60%

3,000

5,000

7,000

9,000

11,000

13,000

15,000

17,000

19,000

21,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(Est.)

Multi

-uni

t % o

f Tot

al

Hous

ing

Perm

its (U

nits

)

All New Units Permitted

Multi-unit % of Total

Note: Multi-unit buildings are not distinguished by rental versus owned.Sources: U.S. Census Bureau - Monthly Building Permits Survey, Dougherty Mortgage LLC

Multi-unit Housing as a Percentage of All New Housing in the Twin Cities (7 Counties)

2000 - 2014 (est.)

I N T R O D U C T I O N

| 1

High-rise Construction (8+ Stories Above Ground)Consists of concrete and/or steel construction, and typically 150 to350 units. This product type is found only in Downtown Minneapolis,neighborhoods near the U of M, and select suburban locations inEdina, Bloomington, and St. Louis Park. High-rise construction hasaccounted for 8% of all new apartment units completed since2010 in the Twin Cities.

Mid-rise Construction (4 to 7 Stories) This style makes up the vast majority of new apartment supply inthe Twin Cities, comprising roughly 59% of new units (10,000+)since 2010. This style generally consists of concrete construction onthe lower 1-2 floors with 4-5 wood-frame floors above. Seventy-fourmid-rise buildings have been built across all areas of the Twin Citiessince 2010.

Low-rise Construction (< 4 Stories) This style consists of wood-frame buildings that are typically locatedin suburban locations or more moderately-priced central-cityneighborhoods. Most newer affordable buildings are of low-riseconstruction. This product type is relatively uncommon, accountingfor just 6% of new units (968) since 2010 in the Twin Cities.

Warehouse and Historic ConversionsThis product type is found almost exclusively in Downtown St. Pauland the North Loop Neighborhood in Downtown Minneapolis.Specific buildings in Midway and Uptown have also been converted.Thirteen conversions have provided about 10% of all new unitsdelivered in the Twin Cities since 2010.

Private, Student-targeted HousingSince 2010, twenty-five new buildings with more than 2,800 unitshave been built by private developers in the four neighborhoodssurrounding the Minneapolis campus of the University of Minnesota.Three smaller projects have also added units near St. Thomas andBethel Universities. While not technically classified as “studenthousing” in the traditional sense, these buildings are geared forstudents. This product type has accounted for 17% of new units inthe Twin Cities since 2010.

FROM 2010 THROUGH 2015, the Twin Cities will have seen the construction of more than 17,100 multifamily units infive main styles of buildings, excluding senior housing offerings:

36 Park in St. Louis Park | 10 Stories

The Penfield in St. Paul | 5 Stories

Victoria Park in St. Paul | 3 Stories

Buzza Lofts in Minneapolis | Historic Conversion

The Bridges in Minneapolis

N E W M U L T I F A M I L Y P R O D U C T T Y P E S

2 |

1 Downtown Minneapolis – the area within the I-94/I-35W freeway ring, plus areas immediately adjacent thathave a Downtown orientation, such as St. Anthony/EastBank Riverfront (centered on East Hennepin Avenue andUniversity Avenue SE).

2 Minneapolis Uptown – the area in the broader LakeStreet corridor, stretching from the West Lake Calhoundistrict near Chowen Avenue, east to roughly LyndaleAvenue. Includes development within roughly ¼-milenorth or south of Lake Street. The 29th Street Greenwayis a key feature of this submarket.

3 U of M Neighborhoods – the area surrounding bothbanks of the Minneapolis campus, generally bounded byI-35W to the west, the Burlington Northern rail yards(north of TCF Bank Stadium) on the north, Malcom Ave

THIS REPORT DIVIDES THE TWIN CITIES into 11 apartment submarkets, each with unique characteristics.Concentrated, upscale development in the downtowns of Minneapolis and St. Paul, and in the Uptown area of Minneapolis,has helped transform key cultural and employment districts into desirable housing locations. Similarly, key nodes in selectfirst-ring suburbs, particularly St. Louis Park and Edina, have seen strong amounts of multifamily investment in recent years asthe market acknowledges the wide array of attractions and short commutes offered in the ‘50s and ‘60s development ring. Inaddition, a historic level of private investment in student-oriented buildings has created a unique rental submarket in theimmediate neighborhoods surrounding the University of Minnesota campus.

SE on the east, and I-94 on the south. Includes all ormost of the student-oriented neighborhoods of Marcy-Holmes (includes Dinkytown), University, Prospect Park(includes Stadium Village), and Cedar-Riverside.

4 Minneapolis Neighborhoods – the remainder of the City outside of Downtown, Uptown, and the University ofMinnesota neighborhoods.

5 Downtown St. Paul – the area bounded by the I-94/I-35E freeway loop between roughly KelloggBoulevard/Chestnut Street on the west and LafayetteRoad/Highway 52 on the east. Includes the UpperLanding housing district and the West Side Neighborhood(north of Plato Boulevard) south of the Mississippi River.

6 St. Paul Neighborhoods – the remainder of the Cityoutside of Downtown.

7 First-ring Suburbs – includes roughly 20 inner-ringsuburbs surrounding Minneapolis and St. Paul. Theseareas were mostly developed in the 1950s and 1960sand have been the focus of significant redevelopmentactivity in recent years.

8 Northwest Suburbs – includes all suburbs north of I-394/US 12 and west of the Mississippi River, plus thewestern ½ of Anoka County (Coon Rapids, Andover,Ramsey, Anoka, etc.)

9 Southwest Suburbs – includes all suburbs south of I-394/US 12 and west of I-35W/I-35. IncludesBloomington and all of Scott and Carver Counties.

10 Northeast Suburbs – generally covers the suburbs eastof the Mississippi River and north of I-94, excluding thewestern ½ of Anoka County.

11 Southeast Suburbs – the suburbs south of I-94 and St. Paul, east of I-35W/I-35 and southeast of theMinnesota River. Includes all of Burnsville and Lakeville.

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Dayton

Oak Grove

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Rosemount

Eureka Twp.

Bloomington

Benton Twp.

Eden Prairie

Shakopee

Helena Twp.

Maple Grove

Minnetrista

Linwood Twp.

Douglas Twp.

Burnsville

Cottage Grove

Edina

Empire Twp.

Camden Twp.

Dahlgren Twp.

Hampton Twp.

Marshan Twp.

Independence

Vermillion Twp.

Hollywood Twp.

Lake Elmo

Minnetonka

Chaska

Watertown Twp.

Belle Plaine Twp.

Waconia Twp.

Cedar Lake Twp.

St. Francis

Savage

Denmark Twp.

New Market Twp.

Castle Rock Twp.Blakeley Twp.

Greenfield

Sand Creek Twp.

Brooklyn Park

Greenvale Twp.

Laketown Twp.

Young America Twp.

Chanhassen

Coon Rapids

Prior Lake

Spring Lake Twp.

Ravenna Twp.

Inver Grove Heights

Fridley

Maplewood

Roseville

Credit River Twp.

Apple Valley

Victoria

Hastings

Oakdale

Hancock Twp.

Farmington

Sciota Twp.

San Francisco Twp.

Shoreview

Nininger Twp.

Stillwater Twp.

Anoka

Louisville Twp.

Champlin

Stillwater

St. Lawrence Twp.

Randolph Twp.

St. Louis Park

Golden Valley

Richfield

North Oaks

Shorewood

Mound

Baytown Twp.

West Lakeland Twp.

Mendota Heights

Wayzata

Waterford Twp.

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Crystal

White Bear Twp.

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NewBrighton White

BearLake

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Belle Plaine

Waconia

NewHope

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Hopkins

Jordan

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SouthSt. Paul

WestSt. Paul

Fort Snelling

Deephaven

Little Canada

Lakeland

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St. Paul Park

Hanover

Watertown

Robbinsdale

Centerville

Marine on St. Croix

Mayer

Cologne

NorthSt. Paul

Bayport

Columbia Heights

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St. AnthonyOak Park Heights

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Coates

New Prague

Elko New Market

Circle Pines

Falcon Heights

Bethel

Hampton

Northfield

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Spring Lake Park

Grey Cloud Island Twp.

Osseo

Woodland

Lilydale

Gem Lake

Randolph

Norwood Young America

Vermillion

Excelsior

Long Lake

Greenwood

Maple Plain

Minnetonka Beach

New Germany

St. Bonifacius

Pine Springs

Lexington

Spring ParkLake St. Croix Beach

Lakeland Shores

Lauderdale

Loretto

Mendota

Rockford

MedicineLake

St. Marys Point

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Medina

Dayton

Oak Grove

Lino Lakes

Forest Lake

Rosemount

Eureka Twp.

Bloomington

Benton Twp.

Eden Prairie

Shakopee

Helena Twp.

Maple Grove

Minnetrista

Linwood Twp.

Douglas Twp.

Burnsville

Cottage Grove

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Empire Twp.

Camden Twp.

Dahlgren Twp.

Hampton Twp.

Marshan Twp.

Independence

Vermillion Twp.

Hollywood Twp.

Lake Elmo

Minnetonka

Chaska

Watertown Twp.

Belle Plaine Twp.

Waconia Twp.

Cedar Lake Twp.

St. Francis

Savage

Denmark Twp.

New Market Twp.

Castle Rock Twp.Blakeley Twp.

Greenfield

Sand Creek Twp.

Brooklyn Park

Greenvale Twp.

Laketown Twp.

Young America Twp.

Chanhassen

Coon Rapids

Prior Lake

Spring Lake Twp.

Ravenna Twp.

Inver Grove Heights

Fridley

Maplewood

Roseville

Credit River Twp.

Apple Valley

Victoria

Hastings

Oakdale

Hancock Twp.

Farmington

Sciota Twp.

San Francisco Twp.

Shoreview

Nininger Twp.

Stillwater Twp.

Anoka

Louisville Twp.

Champlin

Stillwater

St. Lawrence Twp.

Randolph Twp.

St. Louis Park

Golden Valley

Richfield

North Oaks

Shorewood

Mound

Baytown Twp.

West Lakeland Twp.

Mendota Heights

Wayzata

Waterford Twp.

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Crystal

White Bear Twp.

CarverJackson Twp.

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NewBrighton White

BearLake

VadnaisHeights

Belle Plaine

Waconia

NewHope

Mahtomedi

Hopkins

Jordan

Newport

SouthSt. Paul

WestSt. Paul

Fort Snelling

Deephaven

Little Canada

Lakeland

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St. Paul Park

Hanover

Watertown

Robbinsdale

Centerville

Marine on St. Croix

Mayer

Cologne

NorthSt. Paul

Bayport

Columbia Heights

Tonka Bay

St. AnthonyOak Park Heights

Miesville

Coates

New Prague

Elko New Market

Circle Pines

Falcon Heights

Bethel

Hampton

Northfield

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Spring Lake Park

Grey Cloud Island Twp.

Osseo

Woodland

Lilydale

Gem Lake

Randolph

Norwood Young America

Vermillion

Excelsior

Long Lake

Greenwood

Maple Plain

Minnetonka Beach

New Germany

St. Bonifacius

Pine Springs

Lexington

Spring ParkLake St. Croix Beach

Lakeland Shores

Lauderdale

Loretto

Mendota

Rockford

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St. Marys Point

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Downtown MinneapolisDowntown St. PaulFirst Ring SuburbsMinneapolis NeighborhoodsSt. Paul NeighborhoodsUniversity of Minnesota NeighborhoodsUptownNortheast SuburbsNorthwest SuburbsSoutheast SuburbsSouthwest Suburbs

Twin Cities Apartment Submarkets

T W I N C I T I E S M U L T I F A M I LY S U B M A R K E T S

| 3

Downtown Minneapolis – Downtown Minneapolis has emerged as the urbanresidential hot spot in the Twin Cities over the past 10-15 years, and apartmentshave been fueling the latest development push. From the start of 2010 through2015, more than 4,400 new apartment units across 29 projects will have beenadded Downtown, an annual average of 733 units. Product delivery began torise dramatically in 2012, with the peak years of 2013 and 2014 seeing 1,200to 1,400 new units each year. Downtown Minneapolis development since 2010has been scattered among six residential districts, but the North Loop hasgarnered the lion’s share of new units.

Downtown Minneapolis is also offering the widest variety of new product of anyTwin Cities submarket, with nearly 19 newmid-rise buildings (2,627 units), sevenwarehouse/historic conversions (901units), and three high-rise buildings (926units) added to the market since 2010.More than 1,500 units could hit themarket in 2016 or after, with at least oneproject – the 30-story 4Marq tower –under construction.

Minneapolis Uptown – Uptown has been another notable apartmentconstruction story in the Twin Cities in recent years. The long-time apartmentdistrict has been transformed into a luxury market second only to DowntownMinneapolis in overall pricing. More than 1,700 units have been built in Uptownsince 2010, stretching from the West Calhoun area near Chowen Avenue toLyndale Avenue at Uptown’s east end. The Midtown Greenway between Girardand Lyndale Avenues has been the main focal point for development, with seven buildings totaling 1,400+ units recently constructed in this 7-8 blockstretch. All new buildings in Uptown have been mid-rises with the exception of the historic Buzza Building, which was converted to affordable housing in2012. The pace of development in Uptown is forecast to slow, with five projects totaling 480 units proposed for 2016 on.

U of M Neighborhoods – Increasingly, traditional dorm-style living is becoming a thing of the past for students of the U of M Minneapolis campus.Private developers have built nearly 2,200 units in 21 buildings in the fourneighborhoods surrounding the campus since 2010, and another 873 units areslated for delivery in 2015. This level of development is unprecedented in thehistory of the University, and across the country only Louisiana State Universityand the University of Alabama have seen more recent development (Financeand Commerce). All but one recent project near the U of M are proximate to theEast Bank campus, with only the 7West development lying adjacent to the WestBank. Two near-term projects – The Bridges and WaHu – are high-rise buildingswith a skyline presence. The development boom near the U of M is clearlywaning, as just one project totaling 250 units is proposed. This is the lowestproposed total of all eleven Twin Cities submarkets.

D E V E L O P M E N T P A T T E R N S

DOWNTOWN MINNEAPOLIS | MINNEAPOLIS UPTOWN | U OF M NEIGHBORHOODS

4 |

0

200

400

600

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015Downtown MinneapolisNew Units Delivered 2010 - 2016+

Source: Dougherty Mortgage LLC

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015Minneapolis UptownNew Units Delivered 2010 - 2016+

Source: Dougherty Mortgage LLC

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015U of M NeighborhoodsNew Units Delivered 2010 - 2016+

Source: Dougherty Mortgage LLC

New Units by District: DT Minneapolis2010 through 2015DISTRICT NEW UNITS

North Loop 1,813Skyway Core 881St. Anthony/East Bank 682Loring Park 548Gateway/Mill District/DT East 469Elliot Park 61

4,454

D E V E L O P M E N T P A T T E R N S

DOWNTOWN ST. PAUL | FIRST-RING SUBURBS | SOUTHWEST SUBURBS

Downtown St. Paul – Downtown St. Paul has seen seven new buildings withjust over 1,000 units delivered since 2010. Development peaked this yearwith the opening of 498 units in three developments: West Side Flats (178units), The Pioneer Endicott Building (234) and Rayette Lofts (86). More than51% of the new supply of units Downtown since 2010 has been in the formof historic or warehouse conversions. This is the highest percentage for thisproduct type of any submarket in the Twin Cities. Newer buildings Downtownhave been built in Lowertown, the North Quadrant, and along the southernedge near Kellogg Boulevard.

Downtown St. Paul has three proposed projects totaling 632 units in thepipeline for 2016 delivery or after. Two of them – The Sibley Square Buildingand the former main post office building on Kellogg Boulevard (to be calledCustom House) – would be conversions of notable, historic structures.

First-ring Suburbs – New multifamily development in the 1950s-60s ringhas come on strong with nearly 1,700 units delivered between 2010 and2015. Construction has been focused overwhelmingly on the Minneapolisside of the Metro Area, where 97% of new units have been added in Edina,Golden Valley, Richfield, and St. Louis Park. This last community has capturedthe majority of new construction with seven new projects (781 units) in three areas: Hoigaard Village/West 36th Street (3 projects), along ExcelsiorBoulevard (2), or in the West End district at Highways 100 and I-394 (2).Richfield, Edina, Roseville, and Golden Valley each saw development of oneproject since 2010.

First-ring development promises to stay very strong in coming years, and willcontinue to be focused on the Minneapolis side. Key districts that have seenprior development will continue to intensify. Notable areas with proposedmultifamily product include the Southdale area (up to 500 new units), thebroader West End district (Highways 100/394) in St. Louis Park/GoldenValley (1,050+), and the Lyndale Corridor in Richfield (150+). All told, thefirst-ring suburbs of Minneapolis could see 2,500+ new units from 2016 on.

Southwest Suburbs – The pace of multifamily development in theSouthwest Suburbs has been relatively light until this year. Three projectstotaling 352 units were built in 2012-2013, but four projects with 887 unitswill be delivered in 2014-2015, and eight projects with roughly 1,230 unitsare proposed for 2016 and beyond.

Development in the Southwest has been scattered over a variety of sites, and is far less “nodal” than the development pattern in the first-ring suburbs.Bloomington has seen more new units than any other area (766 units built,415 proposed), followed by Hopkins (217 units built, 51 proposed), andMinnetonka (64 units built, 629 proposed). The 1,230 proposed units in the Southwest are the fourth-highest such total among the 11 Twin Citiessubmarkets, signaling a development push outward from the core cities andfirst-ring suburbs.

| 5

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Downtown St. PaulNew Units Delivered 2010 - 2016+

0250500750

1,0001,2501,5001,7502,0002,2502,500

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

First-ring SuburbsNew Units Delivered 2010 - 2016+

0

250

500

750

1,000

1,250

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Southwest SuburbsNew Units Delivered 2010 - 2016+

Minneapolis Neighborhoods – Fourteen projects with 1,100 total unitshave been constructed in the neighborhoods of Minneapolis since 2010.Most have been smaller, in-fill projects of 30 to 65 units. Minneapolisneighborhoods are especially attractive to affordable housing developers,who have built 300 units in seven buildings since 2010. Beacon InterfaithHousing Collaborative, CommonBond Communities, Alliance Housing, andArtspace are among the organizations to open new projects.

Smaller-scale development will continue in 2016 and after, but the unitcount should increase. Fourteen projects with more than 1,600 units areproposed on sites in a variety of areas, mostly in southside neighborhoods,and many being affordable. However, development is beginning to emerge in North Minneapolis as four projects offering 420+ units are expected toopen between December 2014 and 2017.

St. Paul Neighborhoods – St. Paul’s neighborhoods saw seven projects with859 units added between 2010 and 2014. Projects were scattered throughoutthe western half of the city in the University Avenue Corridor, West 7thNeighborhood, and on Grand and Marshall Avenues. Three more projects –one targeted at St. Thomas students, one affordable in the Midway Corridor,and one market-rate project in the Snelling-Hamline neighborhood – areexpected in 2015.

Going forward, the development focus will shift almost exclusively to theUniversity Avenue Corridor, where the new Green Line LRT opened in 2014.Five of the seven proposals (548 units) for 2016 delivery or after are withintwo blocks of the line. Three of these are expected to be affordable propertiesof 44 to 60 units, including a building for homeless youth developed byBeacon Interfaith Housing Collaborative.

Northwest Suburbs – The Northwest Suburbs have had relatively lightdevelopment activity with just five projects (679 units) since 2010. Notableamong these is the initial 263-unit phase of Skye at Arbor Lakes, a large,multi-phase development just northeast of The Shoppes at Arbor Lakesshopping district in Maple Grove.

Smaller affordable projects have been built in Plymouth and Maple Grove,while market-rate communities were added in Maple Grove, Osseo andRamsey. Roughly 875 units in six projects – including three affordableprojects – are proposed for 2016+ in Maple Grove, Ramsey, Rogers, andPlymouth. The pace of future development in the Northwest Suburbs willplace it right in the middle of the pack compared to the other tensubmarkets in the Twin Cities.

D E V E L O P M E N T P A T T E R N S

MINNEAPOLIS NEIGHBORHOODS | ST. PAUL NEIGHBORHOODS | NORTHWEST SUBURBS

6 |

0

200

400

600

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Minneapolis NeighborhoodsNew Units Delivered 2010 - 2016+

0

150

300

450

600

750

900

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

St. Paul NeighborhoodsNew Units Delivered 2010 - 2016+

0

150

300

450

600

750

900

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Northwest SuburbsNew Units Delivered 2010 - 2016+

D E V E L O P M E N T P A T T E R N S

NORTHEAST SUBURBS | SOUTHEAST SUBURBS

Northeast Suburbs – This region of the Twin Cities has seen the third-lowestmultifamily development total in recent years. Just over 600 units in fiveprojects have been built since 2010 on sites in Woodbury, Arden Hills, NewBrighton, and Shoreview. One of the five was a privately-developed, student-oriented project called E Street Flats in a converted Holiday Inn hotel inArden Hills. The remaining four developments were market-rate communitiesspread among Woodbury, Arden Hills, Shoreview, and New Brighton. Anadditional project under construction in White Bear Lake, Boat WorksCommons, will add another 85 units in 2015.

Proposals in Blaine and Oakdale could add 289 units in 2016 or after, but the Northeast Suburbs should continue to show only limited, sporadicactivity in the coming years.

Southeast Suburbs – The Southeast Suburbs have been very slow toproduce new multifamily units in recent years, with just five projects totaling338 units added since 2010. The most notable recent project is the 190-unit Flats at Cedar Grove in Eagan. Under construction with a 2015 deliveryexpected, this project is part of the Cedar Grove Redevelopment District atHighway 13/Cedar Avenue. The new, $100-million Twin Cities PremiumOutlets mall anchors the district, bringing development momentum to thisimportant node in Eagan.

Development in the Southeast Suburbs should escalate in 2016 and afteras five projects (two in Eagan, three in Apple Valley) are proposed, potentiallyadding 1,155 new units. Two of the three Apple Valley projects are alongGalaxie Avenue, south of 150th Street West in the city’s core commercialdistrict. One of the Eagan proposals involves the conversion of the vacant 10-story office building once owned by Blue Cross and Blue Shield ofMinnesota near Yankee Doodle Road, north of Town Centre Drive. If pursued,it would be one of the most pioneering reuse projects in the suburbs of the Twin Cities.

| 7

0

100

200

300

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Northeast SuburbsNew Units Delivered 2010 - 2016+

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016+

Num

ber o

f Uni

ts

2010-2015

Source: Dougherty Mortgage LLC

Southeast SuburbsNew Units Delivered 2010 - 2016+

Brunsfield North Loop | 50 UnitsGurley Lofts | 30 Units Third North Apartments | 204 Units

District 600 (U/C) | 78 Units

Higher Ground | 85 Units

Junction Flats | 182 Units

Eitel Building City Apartments 213 Units

City Place Lofts | 55 Units

430 Oak Grove | 75 Units Vue | 119 Units Alliance Apartments Expansion 61 Units 4Marq (U/C) | 262 UnitsSoo Line Building City

Apartments | 254 UnitsThe Nic on 5th

253 UnitsLPM | 354 Units

Solhavn | 137 Units Soltva | 100 UnitsElse Warehouse | 116 Units

The Copham | 120 Units The Paxon | 139 Units

Dock Street Flats | 185 Units Velo | 101 Units

222 Hennepin | 286 Units

A-Mill Artist Lofts | 251 UnitsMill and Main West (U/C) | 162 Units

Mill and Main East | 178 Units

Mill District City Apartments 175 Units

St. Anthony Mills | 93 Units

Latitude 45 (U/C) | 319 Units

Stone Arch Apartments | 221 Units

Stone Arch Apartments 2 | 91 Units

Emanuel Housing | 101 Units

D O W N T O W N M I N N E A P O L I S N E W M U L T I F A M I L Y 2 0 0 3 - 1 5

8 | | 9

1

12

34

65

7 8

10 1112

13

9

14

7

10

12

9

2 3 4 65 32

2829

3032

31

31

29

27

25

25

2627

26

23

2021

22

23

24

20

19

19

21 22

24

30

28

8

11

13 14

15

15

1617

18

16 17 18North Loop

Loring Park

Elliot Park

Skyway Core

Gateway/Mill District/DT East

St. Anthony/East Bank

North

|

1800 Lake | 57 Units

Be @ The Calhoun Greenway 185 Units

Flux Apartments | 216 Units

Solhem | 60 Units

Lake Calhoun City Apartments 157 Units

The Walkway | 92 Units Track 29 City Apartments | 198 Units

Elan Uptown | 203 Units Greenleaf Apartments | 63 Units The Murals of Lynlake | 109 Units

M I N N E A P O L I S U P T O W N N E W M U L T I F A M I L Y 2 0 0 3 - 1 5

10 | | 11

1

1

15

3 4 5

6

7

89

10

11

1213

14

2

15

3

Elan Deux (U/C) | 388 Units

4 5 6 7

Lime Apartments | 171 Units

8

10

Buzza Lofts of Uptown | 136 Units

11

Uptown Lake Apartments | 163 Units

12

Blue Apartments | 242 Units

9

2

1314

Lake Street

North

Hen

nepi

n Av

enue

Lynd

ale

Aven

ue

|

Lake Calhoun

Chow

en A

venu

e S.

The Golden Lodge | 12 Units Gould Apartments (U/C) | 13 Units

The Elysian | 57 UnitsCoze Flats | 48 Units 525 Tenth | 10 Units

Solhaus | 75 Units

Stadium Village Flats | 120 Units

700 on Washington | 98 Units The Rail | 36 Units

The Bridges | 210 Units FloCo Fusion | 84 Units The Knoll | 101 Units

Metro Park East | 194 Units ENL House Apartments | 17 Units

Solhaus Tower | 75 Units

The Edge on Oak | 65 Units

WaHu (U/C) | 333 Units

412 Lofts | 102 Units 4th Street Housing Co-Op (U/C)66 Units

The Marshall | 317 Units

1301 University | 92 Units

Sydney Hall | 125 Units

7west | 213 Units

Venue at Dinkytown | 140 Units

Five15 on the Park (U/C) | 259 Units

U O F M N E I G H B O R H O O D S N E W M U L T I F A M I L Y 2 0 0 3 - 1 5

12 | | 13

1

1

2 3

4 5 67

89

10

11

12

13

14

15

1617

18

19

20 21 2322 24

25

26

27

28

27

25

2221

2 3 4 5 6 7 8

9 10

11 12

13 14

15

17 18

28

26

2423

The Station on Washington | 97 UnitsKeeler Apartments | 44 Units

Radius on 15th (U/C) | 202 Units

19 20

16

WestBank

EastBank

North

|

Millennium at West End (U/C) 158 Units

F I R S T R I N G / S T . L O U I S P A R K N E W M U L T I F A M I LY 2 0 0 3 - 1 5

14 |

2

Eliot Park Apartments (U/C) 138 Units

12

The Camerata | 220 Units

11

Medley Row | 22 Units

10

The Adagio | 100 Units

9

Harmony Vista | 78 Units

8

Excelsior & Grand | 337 Units

7

Arcata (U/C) | 151 Units

1

1

23

4

56

7

8910 11

12

The Flats at West End | 119 Units

3

36 Park | 192 Units

4

The Ellipse on Excelsior | 132 Units

5

e2 | 58 Units

6

West End

Hwy. 100/Excelsior Blvd.

North

|

| 15

D O W N T O W N S T . P A U L N E W M U L T I F A M I LY 2 0 0 3 - 1 5

Rayette Lofts | 86 Units

4

Lowertown Lofts | 106 Units

6

West Side Flats | 178 Units

7

Riverview at Upper Landing 344 Units

8

Joseph’s Pointe at Upper Landing 90 Units

9

The Penfield | 254 Units

1

Sibley Park Apartments | 114 Units

3

Lofts at Farmers Market | 58 Units

5

Minnesota Place & Minnesota Vistas

137 Units

11

The Commerce Building 100 Units

12

Pioneer Endicott 234 Units

10

Renaissance Box 70 Units

2

1

3

2

54

6

7

89

10

1211

West SideUpper

Landing

North

|

Overall New Product Rents in the Twin CitiesIn the 3rd quarter of 2014, Dougherty Mortgage gatheredinformation on current asking rents at 67 “newer” market-rateprojects across the 7-county Twin Cities Metro Area (see chart). The survey represents 9,900+ units in buildings that initiallyopened in 2012 or after. The survey covers roughly 86% of the newmarket-rate buildings delivered during this period, and about 91% of the units. Rent data represents asking rents before concessions.

The overall asking rent in the Twin Cities for newer market-rateapartments hit $2.05 in 3rd quarter 2014, per available data.Average, newer-product rents ranged considerably acrosssubmarkets, from $1.41 to $1.52 per square foot in the Northwestand Northeast Suburbs to more than $2.20 in the three urbansubmarkets in Minneapolis. Including the First-ring Suburbs, four of the ten submarkets with available pricing data averaged wellover $2.00 per square foot for newer units, while the remainingsubmarkets averaged between $1.41 and $1.85. The SoutheastSuburban submarket did not offer sufficient data to determine an overall rental market average.

Factors Driving Asking Prices for New UnitsDynamic Urban Settings – Not surprisingly, Downtown Minneapolis and Minneapolis Uptown are the most-expensive rentalmarkets in the Twin Cities, each at about $2.25 per square foot overall market average for newer product. With exception ofthe U of M Neighborhoods in Minneapolis, these two submarkets garner price premiums of 7% to 60% above all other areasin the Twin Cities. Downtown Minneapolis and Uptown have been two of the three strongest rental markets in recent years,owing to their wide array of cultural and recreational amenities, nearness to thousands of professional and "creative-class"jobs, and unique urban settings. Downtown Minneapolis also offers many units in high-rise towers, a product type that oftencaptures rent premiums over other product styles.

Captive University Population – Newer product in neighborhoods near the U of M-Minneapolis campus has also been nearthe top of the market in terms of rent per square foot, averaging $2.21. Many privately-developed buildings in this submarketare de facto student housing, with units often furnished, leases often structured on a per-bedroom basis, high-occupancy (2 persons per bedroom) allowed and in some cases encouraged, and rent guarantees required by parents. Amenities and management services are also geared toward a student population. And because unit sizes tend to be smaller than comparablelayouts in other submarkets, the rent per square foot among newer U of M-oriented buildings tends to be higher, often at thetop-end in the Twin Cities.

First-ring Location Advantages – Projects in notable first-ring locations to the west of Minneapolis such as Southdale inEdina, and the West End District or the Excelsior Boulevard Corridor in St. Louis Park, also garner price premiums. Overall,newer first-ring projects averaged $2.09 in the most-recent quarter. Locations near restaurants, theaters, and shopping havebeen a strong factor for about three-quarters of the units built since 2010.

Decreasing Prices for Markets Farther Out – Downtown St. Paul – with more than a third of its newer supply in the formof historic building conversions – had an average price of $1.85 per square foot, just above newer units in Minneapolisneighborhoods ($1.78). Slightly less were the Southwest Suburbs ($1.69) and the neighborhoods of St. Paul ($1.66). TheNortheast and Northwest Suburbs represent the least-expensive submarkets in the Twin Cities, with asking rents betweenabout $1.40 and $1.50 per square foot. Moderately-priced housing overall in communities such as New Brighton, ArdenHills, Osseo, and Ramsey keep prices at newer rental communities moderate in the Northeast and Northwest.

16 |

N E W P R O D U C T P R I C I N G T R E N D S

OVERALL NEW PRODUCT RENTS | FACTORS DRIVING NEW PRODUCT RENTS

Overall Rent/SF Units Buildings

Downtown Minneapolis $2.25 3,061 20Minneapolis Uptown $2.23 1,361 6U of M Neighborhoods $2.21 1,486 11First-ring Suburbs $2.09 874 7Downtown St. Paul $1.85 810 5Minneapolis Neighborhoods $1.78 490 5Southwest Suburbs $1.69 701 4St. Paul Neighborhoods $1.66 274 3Northeast Suburbs $1.52 288 3Northwest Suburbs $1.41 564 3Southeast Suburbs* -- -- --Total: Twin Cities $2.05 9,909 67

* Too few projects available to survey.

Submarket Pricing: Overall Asking Rent Per Square FootNewer Market-rate Units (Opened 2012 and After)

Twin Cities (7 Counties)3rd Quarter 2014

Survey Representation

Source: Dougherty Mortgage LLC

The following sections accompany the submarket pricing charts on pages 18-19.

Studio UnitsStudio pricing in the 3rd quarter of 2014 showed considerable variation across the Twin Cities, with Uptown leading at $1,424 average rent for a typical unit of just under 600 square feet. Studio units are very popular among the young, urbanprofessionals who dominate this submarket. The First-ring Suburbs and Downtown Minneapolis came second in pricing, withaverage studio rents between $1,230 and $1,280 for units of roughly 530 to 550 square feet. Most of the remainingsubmarkets were clustered between about $1,000 and $1,100 average rent for units of about 540 to 580 average squarefeet. The U of M Neighborhoods offer relatively few newer studio units, and such units are generally small (480 square feet,average) and relatively expensive ($2.51 per square foot, average).

One-bedroom UnitsPricing for newer one-bedroom units in the Twin Cities showed a similar pattern to studio pricing with Uptown being the clearleader ($1,768 average), followed by the First-ring Suburbs ($1,651), and Downtown Minneapolis ($1,610). Most othersubmarkets fell between $1,300 and $1,450. Again, units near the U of M are small (about 640 square feet on average)and relatively expensive (just under $1,440 average rent). The Northwest Suburbs offer renters the best value in the TwinCities, with 833 square-foot units averaging just $1,229 per month. One-bedrooms are typically the most common unit typein newer buildings in the Twin Cities, although some submarkets have slightly more two-bedroom units.

Two-bedroom UnitsTwo-bedroom units vie with one-bedrooms as the most prevalent type among newer properties in the Twin Cities. In general,the more “suburban” the market, the more likely that it will have a majority of two-bedroom units. High land costs in theurban core demand higher rents per square foot, which usually comes from studios and one-bedroom units. High land costsare reflected in newer two-bedroom pricing as well, with the most-costly units being in the First-ring Suburbs ($2,412average rent), followed by Downtown Minneapolis ($2,353), and Uptown ($2,317). Four submarkets – Southwest Suburbs,Northeast Suburbs, Minneapolis Neighborhoods and St. Paul Neighborhoods – are clustered between $1,778 and $1,837average rent. Most submarkets offer two-bedroom units between about 1,100 and 1,200 square feet in size, however thosenear the U of M are much smaller (906).

Three-bedroom UnitsThree-bedroom units are far less common than all other types. Most submarkets have three-bedroom units at just one or twoof the newer properties. Surprisingly, this unit type is offered at eight or more newer projects in Downtown Minneapolis, andaverage rents are high ($3,190) for the largest average units in the Twin Cities (1,576 square feet). The overall pricingpattern in the Twin Cities for newer three-bedroom units is similar to that for two-bedrooms, with the First-ring Suburbs hittinga high average rent ($3,263) for a typical-sized unit of 1,443 square feet. Most submarkets fall in the $2,000-$2,500range for a unit between 1,400 and 1,500 square feet. Downtown St. Paul and the U of M area (where three-bedrooms arefairly popular) each offer smaller units overall, while the Northwest Metro again presents the best renter value by far, with anaverage unit of 1,406 square feet renting for just $1,809 on average.

| 17

N E W P R O D U C T P R I C I N G T R E N D S

AVERAGE ASKING RENTS | AVERAGE SIZES BY UNIT TYPE

18 |

N E W P R O D U C T P R I C I N G T R E N D S

PRICING STRUCTURE BY TWIN CITIES SUBMARKET | 3RD QUARTER 2014

Legend: Low Asking Rent High Asking Rent

Minneapolis Uptown ($2.23 / sq. ft. submarket average)

U of M Neighborhoods ($2.21 / sq. ft. submarket average)

First-ring Suburbs ($2.09 / sq. ft. submarket average)

Downtown St. Paul ($1.85 / sq. ft. submarket average)

Average Asking Rent

2BR1BR

Studio

Downtown Minneapolis ($2.25 / sq. ft. submarket average)

$4,852$1,620 $2,353 $3,824

3BR

$3,391

$1,100 $1,610 $2,495$975 $1,233 $1,635

$2,350 $3,190

$2,317$1,760$2,830 $2,885 $2,980

$1,420 $1,768 $2,805$1,230 $1,424 $2,000

$2,247 $2,666 $3,600$1,500 $1,956 $2,500

$999 $1,436 $1,980$1,050 $1,187 $1,350

$3,263 $3,995$1,800 $2,412 $4,675

$2,944

$1,290 $1,651 $2,225$1,058 $1,279 $1,510

$2,600

$2,490

$860 $1,097 $1,335

$2,300$2,550$2,030$1,524

$1,133 $1,448 $2,440

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N E W P R O D U C T P R I C I N G T R E N D S

PRICING STRUCTURE BY TWIN CITIES SUBMARKET | 3RD QUARTER 2014

Legend: Low Asking Rent High Asking Rent

Minneapolis Neighborhoods ($1.78 / sq. ft. submarket average)

Southwest Suburbs ($1.69 / sq. ft. submarket average)

St. Paul Neighborhoods ($1.66 / sq. ft. submarket average)

Northeast Suburbs ($1.52 / sq. ft. submarket average)

Northwest Suburbs ($1.41 / sq. ft. submarket average)

Studio Average Asking Rent1BR2BR3BR

$3,250$930 $1,331 $1,690

$875 $1,001 $1,123

$1,375 $1,778 $2,138$925 $1,310 $1,600

$2,413 $2,519 $2,620

$2,395$1,050 $1,301 $1,695

$960 $1,063 $1,138

$1,308 $1,837$1,935 $2,190 $2,600

$945 $993 $1,075

$1,695 $2,055

$1,338 $1,778$1,950 $2,018 $2,085

$1,025 $1,025

$1,631 $1,809 $1,995$1,066 $1,598 $2,067

$1,400 $1,784 $2,255$1,200 $1,455 $1,633

$2,415

$933 $1,229 $1,562$825 $933 $1,050

WITH ROUGHLY 3,800 NEW UNITS to be delivered next year across nearly all submarkets, we will learn much moreabout the depth of the Twin Cities apartment market and what hurdles may lie ahead. However, there are many reasons tobelieve that the market will continue to be very dynamic and not a development bubble that bursts and quickly fades. Below are important factors that will be in play in 2015 in the Twin Cities multifamily market:

Decreasing Supply but Steady Demand – There are good indications that demand will stay strong in 2015. Despite nearly5,400 new units delivered throughout the Twin Cities in 2014, the overall Twin Cities vacancy rate (all product classes)stayed below 3% and overall rents grew in excess of 2.5% through the 3rd quarter, according to Marquette Advisors.Production volume should drop metro-wide to roughly 3,800 units delivered in 2015. Given very low overall housingproduction in the Twin Cities between 2008 and 2011, there is still pent-up demand that would support the development ofnew apartments.

Broader demographic trends also favor apartments. An increasing number of households are choosing to rent instead ofowning their housing for lifestyle reasons, and to ensure maximum financial flexibility. This is especially true in DowntownMinneapolis and Uptown, where many renters are mobile, young and climbing in their careers, and for whom a mortgage and home upkeep represent undue burdens. A solid economy that attracts workers from outside the region and continuedgrowth of 14,000+ households annually will also help spur rental housing demand in the Twin Cities in 2015 and beyond.

Stable Lending Environment – If interest rates continue to stay low through 2015, strong construction volume will continuethroughout the Twin Cities and additional projects will stay on track for delivery in 2016 and beyond. If rates rise significantly,projects in more moderately-priced areas will be the first to be postponed or abandoned as increasing debt service costseat up valuable cash flow.

Increasing Development Outside the Urban Core – Construction costs have been high enough in recent years to dampendevelopment in the second- and third-tier suburbs. Achievable rents in many locations have simply not been strong enough to overcome labor and materials costs. As the overall Twin Cities rental market has strengthened and ongoing demand hasbeen proven in the central cities and first-ring suburbs, developers are moving forward with projects farther out. While fewerthan 500 units are expected in the outer suburbs in 2015, no fewer than 3,500 units are proposed for 2016 delivery orafter. Surely, not all proposals will go forward, but developer interest in the second- and third-tier suburbs is clearly strong.Well-located sites in established commercial districts with lifestyle amenities will lead the way.

Light Rail Transit’s Continued Influence – New apartments near either the Green orBlue Line LRT corridors have accounted for 4,355 units or 25% of all new units in theTwin Cities from 2010 through 2015. An additional 2,300 units are in the proposalstage for 2016 or after, with at least five proposals slated for the Green Line corridor in St. Paul. Transit-proximate development will be a factor for many years to come as allfive cities on the future Southwest line are in the process of designing station-area plans,many of which include zoning changes to encourage higher-density housing.

Ending of the U of M Development Boom – Five projects with 873 units will bedelivered in 2015 in the neighborhoods surrounding the U of M Minneapolis campus,but only one additional project with 250 units is proposed for 2016 and beyond. Additional proposals could come forward, but it appears as though 2015 will be the last year with large amounts of new units delivered in neighborhoods surrounding the Minneapolis campus of the U of M.

M A R K E T O U T L O O K 2 0 1 5

20 |

Blue GreenLine Line Total

2010-2014 1,391 1,752 3,1432015 771 441 1,2122016+ 1,202 1,130 2,332Total 3,364 3,323 6,687

* Projects located within 2 blocks of an LRT line.

Multifamily in LRT Corridors*New Units Built 2010-2016+

Twin Cities

Source: Dougherty Mortgage LLC

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Dougherty Mortgage LLC90 South Seventh Street, Suite 4300Minneapolis, MN 55402612-317-2100 866-922-0786 Toll-freewww.doughertymarkets.com

ABOUT DOUGHERTY MORTGAGEDougherty Mortgage LLC is a top provider of conventional and affordable multifamily financing. DoughertyMortgage is a leader in the multifamily industry thanks to a wide variety of financing options and a dedicatedteam of multifamily experts. Dougherty Mortgage specializes in providing access to federal agency loan programsto customers interested in Fannie Mae DUS®, Freddie Mac Program Plus®, and FHA financing solutions. Inaddition to multifamily financing, Dougherty Mortgage also provides financing solutions for affordable housing,as well as senior independent and assisted living, hospitals, health care facilities, and student housing.

Office LocationsMinneapolis, MN (Headquarters)Addison, TX (Dallas)Brentwood, TN (Nashville)Denver, CODripping Springs, TX (Austin)Fort Collins, COFort Worth, TXIrvine, CA (Orange County)New Boston, TX (Texarkana)Vienna, VA (Washington, DC)

For more information about this report, please contact Thomas G. O’Neil at Dougherty Mortgage LLC 612-317-2122, toneil@doughertymarkets.com

| 21

90 South Seventh Street, Suite 4300Minneapolis, MN 55402

612-317-2100 866-922-0786 Toll-free

www.doughertymarkets.com