Research & Forecast Report

ATLANTAYear-End 2015 | Multifamily

Record-Setting Year in Atlanta for Multifamily Key Takeaways > Annual Effective Rent Growth: 6.8% (Top Five in USA)

> Average Vacancy Rate: 5% (lowest level since 1Q 2001)

> Annual Demand: 12,484 units (2nd Highest in Five Years)

> Annual Supply Growth: 9,076 units

> Annual Inventory Change: 1.7% (1.2% over past three years)

> Highest Annual Rent Growth by Submarket: Smyrna (14.6%), West Marietta (11.9%), Southeast Marietta (11.2%), Doraville (11.1%), Norcross (10.6%)

> Transaction volume at $5.7 billion, 4th nationally behind NYC, LA, and DC

> Average Cap Rate of 6.44%, down 43 basis points year-over-year

Atlanta Multifamily MarketAtlanta has all of the fundamentals of a robust multifamily market, and 2015 marked a record performing year in the sector. Demand, the paramount factor in any real estate market, remained strong throughout 2015 with annual absorption of 12,484 units. This marked the second-highest annual total in 5 years. Occupancy ended at 95%, the highest level since 2006, with developments near full even in high-supply submarkets such as Buckhead, Midtown, and West Atlanta. On the transaction side, Atlanta posted apartment deal volume of $5.7 billion which puts it 4th nationally behind only New York, Los Angeles, and Washington D.C. Atlanta strengths include a thriving economy, low cost of doing business, and an educated, relatively young workforce. This has allowed Atlanta to achieve sustained rent growth, and its multifamily market to thrive.

US SOUTH ATLANTA Source: MPF Research

Historical Apartment Occupancy & Rents

Market IndicatorsRelative to prior period

ATLQ4 2015

ATLQ1 2016*

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 | Year-End 2015 | Atlanta Multifamily | Colliers International

Atlanta Multifamily Market (continued)DEMANDSustained demand is at the crux of the success of Atlanta’s multifamily market, and proved to be strong in 2015. Annual absorption ended at 12,484 units, which is the 2nd highest annual total in the past five years. Demand drivers include a young demographic with over 60% of Atlanta population below the age of 45. Atlanta possesses a large well-educated millennial population which feeds well into the economy and multifamily market. With corporate relocations and expansions omnipresent in the city, this has sustained high rental demand and growth in the city. Another factor to watch is the 55+ age cohort which is the fastest-growing demographic in the region. This is sure to fuel future demand as older generations are attracted to the appeal of low maintenance and convenience that apartments offer. SUPPLYA total of 9,076 units were added in 2015 which equates to 1.7% of the inventory. Supply in Atlanta has expanded at a manageable rate of 1.2% over the past three years. 2016 is poised to be a year of development for Atlanta region with 9,800 units expecting to be completed. Most of this development is centered in Midtown, Buckhead, and Northern submarkets. Midtown alone has over 30 residential projects that have

recently been completed or are under development as of the end of 2015 (Curbed Atlanta). Most of these developments are Class A product, and this is expected to put some pressure occupancies of this product type in 2016.OUTLOOK FOR 20162016 looks to be another positive year for multifamily and Atlanta should enjoy similar success in terms of rent demand and growth as 2015. Atlanta has solid fundamentals in its demographics, geography, and economy that bode well for multifamily. Atlanta’s rent growth consistently outpaces the national average and can be expected to continue to do so in the future. Rent increases are most pronounced in the Class A and B product types, but Class C product can be expected to gain momentum in 2016 as supply catches up with demand for upper-tier product. Rent growth in 2016 can also expected to be driven by northern and central submarkets near the employment hubs of the city. Some risks include the uptick in supply which we can expect to keep occupancy near 95%. With 11,603 units planned over the next two years, household growth is expected to remain close to 3% facilitating an absorption rate of 4,094 units a year. Asking rents are expected to grow at an average of 4.1% in the region for 2016 and 2017 (REIS). Overall, demand should remain strong as long as Atlanta continues to attract companies and jobs due to its favorable business climate.

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

The Bricks at Perimeter Central Perimeter 11/19/2015 $93,000,000 448 $207,589 Clark Ventures, LLC

The Brooke Decatur 1/19/2016 $73,500,000 537 $136,872 Irinda Capital Mgmt. LLC

4867 Ashford Dunwoody Rd. Central Perimeter 12/15/2015 $69,150,713 504 $137,203 The Blackstone Group

Highlands at Sugarloaf Northeast Atlanta 10/30/2015 $68,640,000 390 $176,000 Olen Commercial Realty

NorthPark Estates North Fulton 12/22/2015 $54,000,000 356 $151,685 Inwood Holdings, LLC

Century Park Northeast Atlanta 12/14/2015 $53,900,000 440 $122,500 Cortland Partners

Creekside at White Oaks South Atlanta 11/10/2015 $53,014,500 561 $94,500 The RADCO Companies

5375 Sugarloaf Pkwy. Northeast Atlanta 12/17/2015 $52,125,000 406 $128,387 Cortland Partners

Park Valley Northwest Atlanta 12/14/2015 $51,400,000 496 $103,629 Steadfast Apartment REIT

Park at Abernathy Central Perimeter 12/3/2015 $50,107,000 484 $103,527 Clark Ventures, LLC

Sales Volume AVG Cap Rate

ATLANTA MULTIFAMILY

Atlanta apartment investment volume in 2015 reached its highest level ever at a total of $6.5 billion. Around 268 properties with a total of 69,848 units sold in the year. According to Real Capital Analytics, the average price per unit in Atlanta remained relatively unchanged year-over-year at $94,201. The average cap rate for apartments in the Atlanta market is down slightly from last year at 6.4%.

5.0%

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3

4

5

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2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Billions

Source: Real Capital Analytics

Source: CoStar Comps

3 Research & Forecast Report | Year-End 2015 | Atlanta Multifamily | Colliers International

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

13

4

9

12

3

5

11

7

6

14

1

1

5

9

22

18

8

16

24

3

16

1917

8

23

2

4

21

67

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11

12

25

26

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30

31

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37

36

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35

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34

15

LEASE UP

# Name Developer/Owner Address Market Units

1 Gables Brookhaven Clarion Partners 2925 Hermance Dr NE Brookhaven 69

2 The Monroe Pollack Shores Real Estate Group 222 Colonial Homes Dr NW Brookwood 59

3 The Jane at Colonial Homes Pollack Shores Real Estate Group 240 Colonial Homes Dr NW Brookwood 280

4 Broadstone Court Alliance Residential Company 3091 Maple Dr Buckhead 250

5 Cyan on Peachtree Atlantic Realty Partners 3380 Peachtree Rd NE Buckhead 327

6 The High Rise at Post Alexander Post Properties, Inc. 600 Phipps Blvd NE Buckhead 143

7 SkyHouse Buckhead Novare Group 3390 Stratford Rd Buckhead 362

8 Haynes House Alliance Residential Company 2420 Peachtree Rd NW Buckhead 186

9 The Reserve at the Ballpark Atlantic Realty Partners 2875 Crescent Pky Northwest Atlanta 89

10 The Office Apartments DeBartolo Development LLC 250 Piedmont Ave NE Downtown 327

11 Alexan on Krog Trammell Crow Residential Company 112 Krog St NE Inman Park 222

12 University House Midtown Inland Real Estate Corporation 930 Spring St NW Midtown 268

13 Indigo House South City Partners 111 Glenridge Point Pky NE Central Perimeter 181

14 The Collection JLB Partners, LP 4600 Roswell Rd Central Perimeter 128

15 1824 Defoor RAM Partners, LLC 1824 Defoor Ave NW West Atlanta 236

16 Solis Downwood Terwilliger Pappas 3201 Downwood Cir NW Northwest Atlanta 280

TOTAL 3,407

15

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

43

14

20

4 Research & Forecast Report | Year-End 2015 | Atlanta Multifamily | Colliers International

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

UNDER CONSTRUCTION

# Name Developer/Owner Address Market Units

1 Brookwood Square Grayco Partners 2140 Peachtree Rd Buckhead 250

2 The Monroe - Phase II Pollack Shores Real Estate Group 222 Colonial Homes Dr NW Buckhead 158

3 Ardmore & 28th Cocke Finkelstein, Inc. 306 Ardmore Cir NW Buckhead 165

4 AMLI City Place AMLI Residential Properties, LP 3464 Roxboro Rd NE Buckhead 640

5 Domain at Phipps Plaza Columbus Realty Partners, Ltd. 705 Phipps Plz NE Buckhead 319

6 Hanover Park Place The Hanover Company 475 Buckhead Ave NE Buckhead 375

7 AMLI Piedmont Heights AMLI Residential Properties, LP 2323 Piedmont Rd NE Buckhead 375

8 Elan Lindbergh - Phase II Greystar Real Estate Partners 741 Morosgo Dr NE Buckhead 263

9 Gables Brookhaven - Phase II Gables Residential 2925 Hermance Dr NE Central Perimeter 300

10 Broadstone Sandy Springs Alliance Residential Company 6558 Roswell Rd NE Central Perimeter 230

11 One City Walk George S. Morgan Development Co., Inc. 6050 Roswell Rd NE Central Perimeter 203

12 The Olmsted Chamblee Cocke Finkelstein, Inc. 5193 Peachtree Blvd Central Perimeter 277

13 The Collection - Phase II JLB Partners, LP 4600 Roswell Rd Central Perimeter 188

14 Somerby of Sandy Springs Brasfield & Gorrie 25 Glenlake Pkwy Central Perimeter 200

15 The Reserve at Decatur Atlantic Realty Partners 2600 Milscott Dr Downtown 330

16 Alexan Village Flats Trammell Crow Residential Company 1205 Metropolitan Ave SE Downtown 120

17 Alexan Glenwood Trammell Crow Residential Company 860 Glenwood Ave SE Downtown 216

18 Elan Inman Station Crim & Associates 144 Moreland Ave NE Downtown 285

19 841 Memorial Enfold Properties 841 Memorial Dr SE Downtown 80

20 200 Edgewood Sanctuary Residential LLC 200 Edgewood Ave NE East Atlanta 144

21 Alexan 1133 Trammell Crow Residential Company 1133 Commerce Dr East Atlanta 167

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

23 33 Peachtree Place Wood Partners 60 Peachtree Cir NE Midtown 369

24 60 11th St Selig Enterprises, Inc. 60 11th St NE Midtown 320

25 Atlantic House Novare Group 1163 W Peachtree St NW Midtown 407

26 Broadstone Terraces Alliance Residential Company 811 Juniper St Midtown 218

27 Modera Midtown Mill Creek Residential Trust LLC 90 Peachtree Pl NW Midtown 450

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

29 Post Midtown Millennium Post Properties, Inc. 33 11th St Midtown 356

30 Yoo on The Park Trillist Company 207 13th St NE Midtown 245

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

32 Alta Belmont - Phase II Wood Partners 400 Belmont Pl Northwest Atlanta 223

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

34 The Reserve at the Ballpark - Phase II

Atlantic Realty Partners 2875 Crescent Pky Northwest Atlanta 232

35 Alexan City View Trammell Crow Residential Company 3300 Riverwood Pky SE Northwest Atlanta 232

36 Atlanta Braves Stadium Dvmt Pollack Shores Real Estate Group I 75 S & I 285 W Northwest Atlanta 600

37 Accent North Druid Hills Westplan Investors 7 Executive Park Dr NE Northwest Atlanta 310

38 City Lights Wingate Companies 420 Boulevard Old Fourth Ward 80

39 675 N. Highland Abraham Properties & Builders 675 North Highland Ave NE Poncey-Highland 124

40 Aspire West Midtown Westplan Investors 1390 Northside Dr West Midtown 133

5 Research & Forecast Report | Year-End 2015 | Atlanta Multifamily | Colliers International

Metro Atlanta Employment Overview

Metro Atlanta Employment Comparison

METRO AREA RANK Y-O-Y EMPLOYMENT

Y-O-Y PERCENT

UNEMPLOYMENTRATE

New York/NNJ 1 156,400 2.3% 4.4%

Los Angeles/OC 2 135,100 1.7% 5.4%

Dallas-Fort Worth 3 98,900 2.9% 3.7%

Atlanta 4 77,800 3.0% 4.9%

DC-Arlington 5 68,500 2.2% 3.8%

San Francisco 6 66,300 3.0% 3.9%

Seattle 7 56,800 3.0% 5.0%

Phoenix 8 55,300 2.9% 4.7%

Miami 9 55,300 2.2% 5.0%

Riverside/San Bern. 10 47,800 3.6% 5.9%

San Jose 11 46,100 4.4% 3.8%

Boston 12 45,800 1.7% 4.1%

U.S. Total 2,462,200 1.7% 4.8%

> Alcon Laboratories, a Texas-based lens maker, plans to invest $250 million to increase its production in the Johns Creek area of Atlanta. The company plans to expand their production footprint by 70,000 square feet and yield approximately 300 additional jobs.

> Norfolk Southern plans to relocate 253 employees from Virginia to Midtown Atlanta. The roles are primarily back office and functional roles with an average wage of $86,000.

> CareSource, a Dayton, Ohio-based managed care provide plans to add 200 jobs in Atlanta by July 2016. The expansion is to support new business and establish a southern regional headquarters.

> Kaiser Permanente plans to add 900 Information Technology jobs in Atlanta by 2019 establishing a new IT campus in Midtown Atlanta at 1375 Peachtree Street.

UNDER CONSTRUCTION (cont.)

# Name Developer/Owner Address Market Units

41 Westside Heights WSE Property Management LLC 903 Huff Rd NW West Midtown 282

42 455 Fourteenth Pollack Shores Real Estate Group 455 14th St NW West Midtown 361

43 The Heights at West Midtown WSE Property Management LLC 507 Bishop St NW West Midtown 240

TOTAL 11,510

10.8

‐42.3

‐22.9

30.1

69.4 66.2

48.9

‐26.8

‐136.9

‐20.2

35.641.6

59.7

88.7 85.4

 (150.0)

 (100.0)

 (50.0)

 ‐

 50.0

 100.0

Jobs Add

ed/Lost (thou

sand

s)

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

Source: Bureau of Labor Statistics; Metro Level Data December 2015(p) Average, not Seasonally Adjusted

Notable Atlanta Job Relocations

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

6 Research & Forecast Report | Year-End 2015 | Atlanta Multifamily | Colliers International

Metro Atlanta Housing Permit ActivityMetro Atlanta Population Overview

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Multifam

ily Permits

 Issued

Source: U.S. Census BureauSource: U.S. Census Bureau, Moody’s Analytics

Stadium Development Projects to Reshape AtlantaAs 2015 comes to an end, 2016 is poised to be a pivotal year with many high impactful sports stadium development projects in the works throughout the Atlanta region. These projects have some mixed-use or neighborhood development component that should impact multifamily demand in the region. Some notable projects include:

> MERCEDES-BENZ STADIUM: The new state-of-the art $1.4 billion stadium to serve as the new home for the Atlanta Falcons and United FC is projected to be opened in 2017. This stadium will also serve as the host to the 2018 College Football National Championship and the SEC Championship until 2027. Arthur Blank, philanthropist and owner of the Atlanta Falcons, has pledged $15 million for projects to improve the surrounding community of the new stadium with another $15 million pledged by Invest Atlanta through TAD funding.

> SUNTRUST STADIUM: A new $672 million baseball stadium under construction for the Atlanta Braves (SunTrust Park). This stadium, slated to be completed by Opening Day 2017, includes an entertainment and retail district along with an office tower of which Comcast is already confirmed as an anchor tenant. The development will continue to spur new growth and apartment demand in the Cumberland region for 2016.

> TURNER FIELD REDEVELOPMENT: Georgia State University and Carter real estate firm have been awarded a bid for the redevelopment of the current home of the Atlanta Braves. Redevelopment plans include converting the stadium into a new sports facility, along with the building of student housing, retail, and single-family homes in the surrounding area. This is poised to stimulate much needed demand and growth in the neighborhoods surrounding the stadium.

0

1

2

3

4

5

6

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total Pop

ulation (m

illions)

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

Copyright © 2016 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+1 404 877 9287ron.cameron@colliers.com

Will MathewsVice President | Atlanta+1 404 877 9285will.mathews@colliers.com

CONTRIBUTORSScott AmosonDirector of Research | Atlanta

Jaime SlocumbProject Manager | Atlanta

Michael HenryFinancial Analyst | Atlanta

Atlanta Submarkets

Units sold since 2011

27,500MORE THAN

Group gross transaction value since 2011

$1.7B

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

14TRANSACTING IN

STATES