LOUISVILLE - Colliers Multifamily Advisory Group...Date Property Name Address City Units Year Built Price in $ $/Units Mar-17 Park at Hurstbourne 5555 Big Ben Dr Louisville 689 1972

Accelerating success.

Research & Forecast Report

LOUISVILLEQ1 2017 | Multifamily

RECENT SALES

Source: AXIOMetrics. RCA, CoStar

Market Survey Results and ForecastsSequential Month Annual

2Q16 3Q16 4Q16 1Q17 Mar-17 2015 2016 2017F 2018F 2019F 2020F 2021F

Effective Rent Per Unit $850 $858 $853 $858 $869 $824 $849 $869 $889 $916 $951 $977 Per Sq. Ft $0.88 $0.89 $0.89 $0.89 $0.90 $0.86 $0.88 $0.90 $0.92 $0.95 $0.99 $1.01

Effective Rent Growth - Annually 2.5% 3.1% 3.5% 3.0% 2.9% 2.3% 3.0% 2.4% 2.2% 3.0% 3.9% 2.8%

Effective Rent Growth - Quarterly 1.9% 1.0% -0.6% 0.6%

Occupancy Rate 96.1% 96.2% 95.2% 95.1% 94.9% 94.9% 95.6% 95.3% 94.5% 94.9% 95.1% 94.7% Occupancy Change - Annually 0.8% 0.9% 0.6% 0.0% -0.3% 0.3% 0.8% -0.4% -0.8% 0.4% 0.2% -0.4%

Occupancy Change - Quarterly 1.0% 0.1% -1.0% -0.2%

Economic Concessions Concession Value $-6.70 $-5.33 $-8.88 $-7.49 $-4.83 $-3.98 $-7.93

As a % of Asking Rent -0.8% -0.6% -1.0% -0.9% -0.6% -0.5% -0.9%

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

Mar-17 Park at Hurstbourne 5555 Big Ben Dr Louisville 689 1972 49,652,078.00 72,064

Jan-17 The Enclave at Breckenridge 7204 Churchill Park Dr Louisville 384 1970 34,000,000.00 88,542

Jan-17 Willowbrook Apartments 2106 Buechel Bank Rd Louisville 111 1970 6,175,000.00 55,631

Dec-16 Lakeview 7000 Lake Dr Sellersburg 144 1999 9,200,000.00 63,889

Nov-16 Stonewater Park 11353 N Tazwell Dr Louisville 236 1972 20,250,000.00 85,805

Oct-16 Clifton Ridge Apartments 2025 Brownsboro Rd Louisville 80 1967 3,450,000.00 43,125

Oct-16 Avana Southgate 10960 Southgate Manor Dr Louisville 256 2001 26,750,000.00 104,492

Oct-16 Iroquois Gardens 518 Iroquois Gardens Dr Louisville 156 1972 5,950,000.00 38,141

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

Multifamily Absorption and Supply

Annual 1Q17 Annual Forecast

2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F

Total Units Absorbed 1,733 2,016 1,597 1,477 264,921 2,422 901 1,506 854 471New Supply 1,629 1,877 1,109 1,415 350,515 2,464 1,745 1,187 797 1,013Inventory Growth 1.9% 2.1% 1.2% 1.4% 1.4% 2.7% 1.9% 1.2% 0.8% 1.0%

Market Employment and Permitting

Annual Februaty-17 Annual Forecast

2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F

Employment (000s) 626.1 642.7 660.3 659.6 144,271.0 672.8 685.1 697.9 712.1 722.9 Job Gain (000s) 12.9 16.6 17.6 15.0 2,352.0 12.6 12.3 12.8 14.2 10.9

Job Growth (%) 2.1% 2.7% 2.7% 2.3% 1.7% 1.9% 1.8% 1.9% 2.0% 1.5%

Total Residential Permitting 4,511 3,828 5,001 4,675 1,101,437 5,275 6,391 5,731 5,293 6,073 Relative Change 18.4% -15.1% 30.6% 22.5% 0.3% 5.5% 21.2% -10.3% -7.6% 14.7%

Single Family Units Permitted 2,376 2,578 3,028 2,853 702,275

Relative Change 1.1% 8.5% 17.5% 16.9% 9.0%

Multifamily Units Permitted 1,951 1,108 1,945 1,796 368,649

Relative Change 40.7% -43.2% 75.5% 42.9% -12.8%

Multifamily as a % of Total 43.2% 28.9% 38.9% 38.4% 33.5%

Demand/Supply Ratio Job Gain / Total Residential Units Permitted 3.4 3.7 4.6 3.9 2.1 2.5 2.3 2.0 2.5 2.1

Job Gain / Single Family Units Permitted 5.5 7.0 6.8 6.1 3.7

Job Gain / Multifamily Units Permitted 9.3 8.5 15.8 11.9 5.6

SUPPLY AND DEMANDAccording to the Bureau of Labor Statistics, job growth in Louisville/Jefferson County, KY-IN Metro Area was 2.3% in February 2017, reflecting 15,000 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.7%.

Axiometrics forecasts Louisville/Jefferson County, KY-IN Metro Area’s job growth to be 1.8% in 2018, with 12,257 jobs added. Job growth is expected to average 1.8% from 2019 to 2021, with an average of 12,621 jobs added each year.

On the supply side, permits for 1,854 multifamily units were issued in the 12 months ending in February 2017, down -91 units from the prior year’s sum. In terms of total residential housing, 4,974 units were permitted in the 12 months ending February 2017, a decrease of -27 units from the prior year’s total.


IDENTIFIED SUPPLYAs of April 16, 2017, Axiometrics has identified 2,440 apartment units scheduled for delivery in 2017, of which, 568 have been delivered. As a comparison, there were 1,025 apartment units delivered in 2016. Properties delivered to the market in the last 12 months have achieved an average asking rent of $1,153 per unit, or $1.20 per square foot. Effective rent has averaged $1,126, or $1.17 per square foot, resulting in an average concession value of $-26.47. As a comparison, existing properties in the market had an average asking rent of $866 per unit ($0.90 per square foot) and an average effective rent of $858 per unit, or $0.89 per square foot, in 1Q17. Concessions for existing properties averaged $-7.49.

Submarket Delivery Schedule

Pipeline Delivery Schedule Pipeline Lease Up Trend

Units Absorbed Asking Rent Effective Rent

Top Submarkets 2015 2016 2017 Total Totals PPM Per Unit PSF Per Unit PSF Chenoweth/Taylorsville 147 318 140 605 195 14 $1,148 $1.10 $1,125 $1.08

East Central 93 300 393 83 10 $1,281 $1.54 $1,268 $1.53

Floyd County 60 54 211 325 96 5 $988 $0.83 $976 $0.82

Northeast Jefferson County 388 361 815 1,564 250 10 $1,249 $1.21 $1,201 $1.16

West Central 357 162 742 1,261 121 6 $1,186 $1.49 $1,161 $1.45

Other 548 130 232 910 24 4 $951 $0.99 $951 $0.99

Louisville/Jefferson County, KY-IN 1,593 1,025 2,440 5,058 769 8 $1,158 $1.20 $1,131 $1.18*Based on 2017 deliveries *Trend based on a trailing 12 month period


PIPELINE DETAIL# Name Status Owner Address Market Units1 Spring House Apartments Lease Up Arlington Properties 8400 Tapestry Cir Bancroft 2242 Academy Park Apartments Lease Up Brown Capital, LLLP 718 Academy Dr New Albany 1143 The Breakwater Lease Up Flaherty & Collins Properties 411 E Spring St New Albany 604 The Nine @ Louisville Lease Up 908 Development Group 1900 S Floyd St Old Louisville 1055 9910 Sawyer Apartments Lease Up Hagan Properties 9910 Westport Rd Outer East End 3566 Echelon at Middletown Lease Up The Garrett Companies 12202-12208 Aiken Rd Outer East End 2107 Omni Louisville (Apartments) Under Construction Omni Hotels & Resorts 400 S 2nd St Downtown Louisville 2258 Starks Building Under Construction Hudson Holdings 455 S 4th St Downtown Louisville 1009 The Breakwater- Phase II Under Construction Flaherty & Collins Properties 411 E Spring St Downtown New Albany 13110 Bradford Mills Lofts Under Construction Marian Development Group, LLC 1100 Reutlinger Ave Germantown 14711 Highland Station Under Construction Edwards Companies 1172 E Broadway Highlands 19712 Vinings of Hurstborne Phase II Under Construction Jefferson Development Group 9500 Williamsburg Plz Hurstbourne 11213 1203-1211 E Broadway Under Construction Edward Communities 1203-1211 E Broadway Irish Hill 26014 Axis on Lexington Under Construction Cityscape Residential 303 Axis Dr Irish Hill 30015 Main & Clay Apartments Under Construction Bristol Development Group 637 E Main St Phoenix Hill 26216 Meeting Point Under Construction Meeting Street Llc 9419 Norton Commons

BlvdProspect 54

17 The Willard at Preston Crossing Under Construction Highgate Group 4901 Oldshire Rd South Side 16618 LC Idlewild 2 - Phase II Under Construction Lifestyle Property Management,

Ltd700 Landis Ridge Dr Southeast Jefferson

County232

19 Springs at Hurstbourne Under Construction Continental Properties Company, Inc.

9202 Bunsen Park Dr Southeast Jefferson County

284

20 Edgewater East Apartments Proposed Poe Company 1500 River Rd Butchertown 11021 535-539 S 4th St Proposed Power Encore Llc 535-539 S 4th St Downtown Louisville 23722 Hurstbourne Heights Proposed Damon Garrett 6409 Hollow Tree Rd Highview 7623 Pleasant Valley Apartments Proposed Kendall Cogan 6806 Applegate Ln Highview 7224 Jefferson Green Proposed Faulkner Real Estate 1253 McCawley Rd Okolona 55225 Unity Place Apartments Proposed Barrister Commercial Group 8016 Shepherdsville Rd Okolona 26826 11840 Ellingsworth Ln Proposed Hagan Properties 11840 Ellingsworth Ln Outer East End 46827 12201 Avoca Rd Proposed Fetter Properties LLC 12201 Avoca Rd Outer East End 40828 13508 Factory Ln Proposed Jefferson Development Group 13508 Factory Ln Outer East End 180029 Simcoe Lane Apartments Proposed Cityscape Residential 4113 Simcoe Ln Outer East End 26130 700 E Main St Proposed Service Welding & Machine

Company, Inc.700 E Main St Phoenix Hill 272

31 Prospect Cove Proposed Prospect Development Llc 7301 River Rd Prospect 19832 4156 Shelbyville Rd Proposed Jefferson Cnty Planning Svc 4156 Shelbyville Rd S Outer St Matthews/

Lyndo270

33 9707 Cooper Church Rd Proposed Capstone Realty, Inc. 9707 Cooper Church Rd South Side 16134 11312-11404 Taylorsville Rd Proposed Del Investments, Inc. 11312-11404 Taylorsville

RdSoutheast Jefferson County

347

35 1411 Tucker Station Rd Proposed Voit Anna M 1411 Tucker Station Rd Southeast Jefferson County

370

36 Bristol Bluffs Proposed LDG Development 6203 Gellhaus Ln Southeast Jefferson County

216

Total Units 9,625


PIPELINE MAP

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WHO WE AREOne of the largest and most

experienced teams of multifamily

specialists in the industry

Units sold since 2011

33,500MORE THAN

Group gross transaction value in since 2011

$2.3B

Dedicated Multifamily Professionals & Advisors

50MORE THAN

Expansive geographic footprint

20COVERING OVER

STATES

WE CAN HELPAs an investor in multifamily properties, you need a firm that provides experience, broad reach and the ability to market an asset no matter how challenging the economic environment. You need a team that specializes in your market you need The East Region Multifamily Advisory Group.

Colliers International has one of the largest and most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and singular focus, make us uniquely successful in helping our clients achieve their disposition objectives.

How are we able to bring together the skills and tools necessary to complete challenging assignments? Our East Region Multifamily Advisory Group is connected by purpose and focus. Our team is dedicated to sharing information on market opportunities, capital sources and buyers/sellers to achieve the best results for our clients.

John AshleyASSOCIATE | EAST REGION

[email protected] +1 615 850 2715

www.ColliersMultifamilyEast.com

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Will MathewsPRINCIPAL | EAST REGION

INSTITUTIONAL CLIENT GROUP


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LOUISVILLE - Colliers Multifamily Advisory Group...Date Property Name Address City Units Year Built Price in $ $/Units Mar-17 Park at Hurstbourne 5555 Big Ben Dr Louisville 689 1972

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