CBRE MULTI-HOUSING MARKET UPDATE

Provided by the CBRE Multi-Housing Private Capital Group (PCG) in South Florida SPRING 2010

Red Hot South Florida Apartment Market Shows No Sign of Cooling Down.
INTRODUCTION The South Florida apartment market continues to enjoy strong fundamentals at levels not seen since before the recession. In 2012, South Florida properties in the $1 million to $10 million range saw over $490 million in sales accounting for over 13,700 units. This is the highest sales volume within South Florida in the last five years. Nevertheless, there remains a limited number of properties for sale and investors are aggressively competing for quality assets. Some of the more aggressive activity has come from foreign and first-time buyers who are diversifying their overall investment portfolios to include a multi-housing component. In addition, lenders have loosened criteria to include these new apartment investors, with attractive rates in the high-3% range with 75% leverage of purchase price. Positive market fundamentals, attractive new debt solutions and a plethora of domestic and foreign buyers have contributed to significantly higher sale activity. Rents in Miami-Dade, Broward, Palm Beach County are at record levels, exceeding those set in 2006-2007. Since 2009 rents in Miami-Dade, Broward and Palm Beach have increased by 12.4%, 9.2% and 11.2% respectively. We anticipate rents to continue to increase in 2013 and beyond as strong rental demand and near record occupancies give landlords the upper hand in lease negotiations. Occupancies remain near record levels. Submarkets such as Coral Gables/South Miami (2.3%), Hialeah/Miami Lakes (2.3%) and Downtown Miami/South Beach (2.5%) are the top performing for occupancy rates, whereas the lowest occupied submarkets of West Palm Beach (6.6%), North Palm Beach County (6.1%), and Sunrise/Lauderhill (5.7%) still exhibit overall strong fundamentals. In fact, of the 21 submarkets in the South Florida market, only 3 have recorded an increase in vacancy during the past year.

For SALE :: 93 UnitS :: PALM SPRINGS

For SALE :: 69 UnitS :: pEmBroKE pinES

For SALE :: 54 UnitS :: miAmi BEAcH

SOLD :: 54 UnitS :: pompAno BEAcH

The

CBRE

Multi-Housing

Private

Capital Group (PCG) focuses specifically in the sale, marketing and financing of multi-housing properties on behalf of private investors in South Florida.

Long-term, South Florida is primed to produce superb fundamentals for multihousing investors due to: Future rent appreciation and valu-add upside Long-term trend of condominium conversions depleting rental inventory, resulting in no net increases in inventory Positive demographic trends Recent declining home ownership rate and higher propensity to rent from young professionals Limited new inventory Attractive new debt opportunities Strong occupancy levels

For available listings and more information, please visit

For more information, please contact Calum Weaver T. +1 954 331 1763 calum.weaver@cbre.com Richard Tarquinio T. +1 954 331 1764 richard.tarquinio@cbre.com

www.cbre.com/pcgsouthfloridamhg

2013 SoutH OUTLOOK

FLoridA

muLti-HouSing

mArKEt

There are now significantly more lenders willing to loan on $1 to $10 million properties. While there are ample sources of capital for stable assets and strong borrowers, there is dearth of capital for non-stable assets and challenged borrowers. Some of the major apartment developments currently underway in South Florida include: - The Bridges at Kendall Place 228 Units Kendall Construction began 2011 - Doral Grande 360 Units Doral Construction began 2012 - Modera Miramar 349 Units Miramar Construction began 2011 - One Plantation 321 Units Plantation Construction began 2012 - Broadstone at N Boca Village 384 Units Boca Raton Construction began 2011 - Midtown Delray 116 Units Delray Beach Construction began 2012 Rents have increased in Miami-Dade, Broward and Palm Beach by 3.1%, 3.1% and 4.5% over the past 12 months. Average rents are forecasted to cumulatively increase in Dade, Broward and Palm Beach over the next five years by 13.4% 16.3% and 13.8% respectively. In Miami-Dade, Broward, and Palm Beach average apartment rents are above the record high rents that were recorded in 2006-2007. Occupancies in Miami-Dade, Broward and Palm Beach have increased to 96.8%, 95.4% and 94.7%, respectively. Miami-Dade boasts the #1 highest occupancy level of any MSA in the U.S. Over the next three years, we anticipate occupancies will continue to increase to record levels in MiamiDade and Broward. Improving rents and occupancies is translating into higher net operating income (NOI) for many multi-housing properties in South Florida. Cap rates for Class A product range between 4.75% to 5.25%, Class B between 5.75% to 6.25% and Class C between 6.50% to 8.00%. During 2012, there were over $490 million in sales for properties between the $1 million and $10 million range. Most multi-housing properties are experiencing higher occupancies and rent which is translating into higher net operating income (NOI). 2

As a result of the rapidly improving South Florida apartment market, new apartment developments are coming out of the ground at break-neck speed. New unit completions nearly quadrupled from 2011 to 2012 jumping from approximately 750 new unit completions to over 2,900 new unit completions. In 2013, the number of new unit completions is expected to more than double once again, with developers throughout the region set to complete over 6,900 new units during the year. In all, as the South Florida region rebounds from the global recession of 2009, it should see more than 14,000 post-recession new units built by 2014. Despite all of this new development, the new supply will barely keep pace with demand due to several factors: over 20,000 Class A units were taken off market and converted to condos between 2000 and 2005, no significant Class A product has been developed during the last decade, falling homeownership has increased demand for high-end apartment rentals, and South Florida has continued to have strong population growth since 2000. There are many other development sites that will not materialize in the short-term as there is a shortage of equity capital. That being said, it highlights the strength of the overall market that investors are willing to invest in development deals at a 7.0% return on development costs based on todays rents. This is primarily because they dont want to pay a 5.0% cap rate for existing product, they have a compelling need to be invested, and like the long-term prospects for multihousing market in South Florida. Overall, we expect the South Florida apartment market to continue to perform strongly throughout the current development cycle, as the regions population growth is forecasted to outpace housing unit growth through 2017. Additionally, the population is projected to become significantly younger, with the median age dropping from 51 to 45 by 2017, presumably growing the number of renters who, historically, tend to be younger. rEntS Rents have increased in Miami-Dade, Broward and Palm Beach by 3.1%, 3.1% and 4.5% over the past 12 months. Miami-Dade, Broward, and Palm Beach average apartment rents are above the record high rents that were recorded in 2006-2007. We anticipate rents to increase anywhere between 3.5% to 5.5% , depending on the submarket, over the next two years. occupAnciES Occupancies in Miami-Dade, Broward and Palm Beach are at 96.8%, 95.4% and 94.7%, respectively. Miami-Dade boasts the 4th highest occupancy level in the U.S. Over the next three years, we anticipate occupancies will continue to increase to record levels in Miami-Dade and Broward. Improving rents and occupancies are translating into higher net operating income (NOI) for many multi-housing properties in South Florida. CAP RATES Cap rates, particularly for newer properties, are near record lows. Cap rates on Class A properties ranges from 4.75% to 5.25%; Class B properties from 5.75% to 6.25%; and Class C properties range from 6.5% to 8.0%. We anticipate cap rates will remain stable in 2013. While cap rates have compressed, most investors feel more confident about cap rate levels today. Confidence has been raised by the lower interest rates that have created positive debt arbitrage, along with strong occupancies, a lack of new supply, expected rent growth, favorable demographics, and a continued decline in home ownership. A lack of viable product available for sale is often cited as investors biggest frustration in the South Florida market. DEmogrApHic TrEndS Echo-Boomer and Gen-Y Demographics will Drive Demand Population, personal income, and, most importantly, total employment are the primary economics of multi-housing demand; however, demographic trends, with a booming population

MiAmi-DAdE HiStoricAL SnApSHot

Year 2006 2007 2008 2009 2010 2011 2012 Units 275,031 282,945 287,383 289,454 289,993 290,604 292,049 Vacancy Rate (%) 1.6 3.1 4.5 5.6 3.9 3.6 3.2 Rent Index ($/Unit) $1,052 $1,076 $1,072 $1,052 $1,074 $1,120 $1,155 YOY % Change 7.4 2.2 (0.4) (1.8) 2.1 4.2 3.3

BROWARD HiStoricAL SnApSHot

C B R E M U LT I - H O U S I N G G R O U P | S O U T H F L O R I D A

Year 2006 2007 2008 2009 2010 2011 2012

Units 163,754 165,355 166,620 167,318 167,641 167,696 168,579

Vacancy Rate (%) 2.6 4.5 5.9 6.7 5.0 5.0 4.6

Rent Index ($/Unit) $1,168 $1,165 $1,162 $1,120 $1,140 $1,168 $1,203

YOY % Change 8.3 (0.2) (0.2) (3.7) 1.8 2.5 3.1

MiAmi-DAdE ForEcASt SnApSHot

2013 2014 2015 2016 2017 295,003 300,898 307,967 314,481 320,079 2.5 2.3 2.8 3.2 3.4 $1,183 $1,218 $1,256 $1,288 $1,317 2.4 3.0 3.1 2.6 2.3

BrowArd ForEcASt SnApSHot

2013 2014 2015 2016 2017 170,110 171,055 172,193 173,511 175,004 4.4 3.1 2.8 2.8 2.8 $1,223 $1,263 $1,315 $1,365 $1,412 1.6 3.3 4.1 3.8 3.5

2012 MiAmi-DAdE SnApSHot By SuBmArKEt (AS oF 4Q 2012)

Submarket Bal Harbour/North Miami Beach Coral Gables/South Miami Downtown Miami/South Beach Hialeah/Miami Lakes Homestead/South Dade County North Miami West Miami/Doral Westchester/Kendall Miami-Dade Total
SOURCE :: CBRE and Torto Wheaton

2012 BrowArd SnApSHot By SuBmArKEt (AS oF 4Q 2012)

Submarket Coral Springs Fort Lauderdale Hollywood Margate/Coconut Creek/North Lauderdale Pompano Beach/Deerfield Beach Pembroke Pines/Miramar Plantation/Davie/Weston Sunrise/Lauderhill Broward Total
SOURCE :: CBRE and Torto Wheaton

Units 40,035 39,028 59,392 39,028 18,984 40,035 19,352 29,908 292,049

Vacancy Rate (%) 3.8 2.3 2.5 2.3 3.9 3.8 3.2 3.0 3.2

Rent Index ($/Unit) $1,373 $1,082 $1,732 $1,082 $830 $1,373 $1,301 $1,115 $1,155

YOY % Change 6.4 1.5 6.1 1.5 1.2 6.4 0.5 4.0 3.3

Units 15,331 37,005 24,060 12,231 25,809 16,965 15,510 21,118 168,579

Vacancy Rate (%) 4.3 5.6 3.4 4.5 4.2 3.8 4.8 5.7 4.6

Rent Index ($/Unit) $1,285 $1,276 $1,160 $1,136 $1,039 $1,340 $1,339 $1,044 $1,203

YOY % Change 2.5 3.6 3.7 2.1 1.6 3.4 4.0 3.3 3.1

of younger people, will also drive demand for apartments over the next 5 years. Echo-boomer and Gen-Y households will be a key driver of apartment demand over the intermediate and long-term, as the 2034 age cohort has the highest propensity to rent and will be growing in size. Coupled with a healthy renter capture rate, this is offsetting employment issues. In South Florida, this age group has grown from 923,000 recorded in the in 2000 census to over 1 million. This has led to more potential renters entering the market precisely when home ownership rates are decreasing and rental capture rates are increasing. NEt ABSorption TrEndS The South Florida rental market has experienced positive net absorption over the last four years, when comparing the net change in occupied units on a year-over-year basis. During that time an average of more than 4,500 units were being absorbed per year. In 2012, there was a net absorption of 4,853 units, resulting in 5,905 more occupied units compared to one year ago. When compared to three years ago, however, there are 17,420 more occupied units. Assuming these same patterns continue, and they should improve with an improving economy and resulting job growth, the South Florida rental market is predicted to remain strong in 2013. CBRE projects an overall South Florida vacancy rate of 3.2% by the 4th quarter of 2013. Given these metrics, rent spikes are a foregone conclusion and the market is already experiencing 5%-10%+ effective rent growth on a year-over-year basis.

PALm BEAcH HiStoricAL SnApSHot

Year 2006 2007 2008 2009 2010 2011 2012 Units 92,359 94,427 95,061 95,373 95,478 95,560 96,181 Vacancy Rate (%) 3.6 6.7 7.5 7.9 6.1 6.6 5.3 Rent Index ($/Unit) $1,175 $1,125 $1,106 $1,061 $1,078 $1,104 $1,154 YOY % Change 6.2 (4.2) (1.7) (4.0) 1.5 2.5 4.5

pALm BEAcH ForEcASt SnApSHot

2013 2014 2015 2016 2017 98,624 99,396 100,198 101,070 101,986 7.0 6.4 6.1 5.9 5.9 $1,180 $1,213 $1,252 $1,289 $1,322 2.3 2.8 3.2 2.9 2.6

2012 pALm BEAcH SnApSHot By SuBmArKEt (AS oF 4Q 2012)

Submarket Boca Raton Boynton Beach/Delray Beach Lake Worth/Greenacres/ Wellington North Palm Beach County West Palm Beach Palm Beach Total
SOURCE :: CBRE and Torto Wheaton

Units 17,577 18,898 20,531 13,725 24,972 96,181

Vacancy Rate (%) 4.6 5.0 4.7 6.1 6.6 5.3

Rent Index ($/Unit) $1,392 $1,202 $1,045 $1,159 $966 $1,154

YOY % Change 7.2 4.6 2.6 4.8 1.8 4.5

With improving market conditions and an abundant amount of investors seeking multi-housing opportunities, now may be a good time to get a confidential broker opinion of value for your multi-housing investment. The CBRE Private Capital Group specializes in selling apartment properties between $1 to $20 million. Our clients are typically individuals and partnerships who have their own capital at risk for the purpose of building personal wealth, and their investment goals are met by maximizing value in every assignment and by providing them the finest advisors in the industry. Within the last two years, the CBRE Private Capital Group has closed over 30 multi-housing transactions totaling over $121 million dollars. There is no other platform in the industry that can source buyers as efficiently and effectively as CBRE. Our South Florida database includes detailed owner contact information for every multi-housing property over 10 units in South Florida. Coupled with 450 offices in more than 50 countries around the world, the CBRE platform is truly global, providing access to the most local, national and international investors in the industry. In fact, seven out of our last eight multi-housing sales were to foreign private buyers.

C B R E M U LT I - H O U S I N G G R O U P | S O U T H F L O R I D A

RECENT CBRE PRIVATE CAPITAL GROUP MULTI-HOUSING SALES

27 unitS :: miAmi BEAcH $2,607,000 dEcEmBEr 2012

106 unitS :: dEErFiELd BEAcH $1,750,000 dEcEmBEr 2012

60 unitS :: NortH miAmi $3,200,000 novEmBEr 2012

23 unitS :: wESt pALm BEAcH $1,225,000 OctoBEr 2012

25 UNITS :: Fort LAudErdALE $2,300,000 SEptEmBEr 2012

51 UNITS :: AVENTURA $6,850,000 AUGUST 2012

164 unitS :: HOMESTEAD $7,450,000 AUGUST 2012

30 unitS :: miAmi BEAcH $2,600,000 AUGUST 2012

3.34 AcrES :: miAmi $6,000,000 mAy 2012

34 unitS :: corAL gABLES $4,500,000 mArcH 2012

22 unitS :: DEERFIELD BEACH $1,760,000 mArcH 2012

89 UNITS :: DEERFIELD BEACH $6,914,560 mArcH 2012

28 UNITS :: DEERFIELD BEACH $2,240,000 mArcH 2012

105 unitS :: HomEStEAd $4,550,325 FEBruAry 2012

12 unitS :: JUPITER $9,750,000 dEcEmBEr 2011

8 unitS :: MIAMI BEACH $750,000 NOVEMBER 2011

102 UNITS :: BocA rAton $7,300,000 AUGUST 2011

28 UNITS :: miAmi BEAcH $2,700,000 AuguSt 2011

160 UNITS :: LAKE WORTH $7,800,000 JUNE 2011

20 unitS :: NORTH MIAMI $594,000 JUNE 2011

68 UNITS :: PEMBROKE PINES $4,421,946 MAY 2011

16 unitS :: miAmi BEAcH $1,215,000 mAy 2011

208 unitS :: KENDALL $28,000,000 SEptEmBEr 2010

16 unitS :: corAL gABLES $1,625,000 AUGUST 2010

106 UNITS :: BOYNTON BEACH $8,200,000 JULY 2010

32 UnitS :: NORTH BAY VILLAGE conFidEntiAL DECEMBER 2009

43 UnitS :: MIAMI $2,200,000 JAnuAry 2010

93 UnitS :: DELRAY BEACH $9,000,000 SEPTEMBER 2009

45 UnitS :: MIAMI BEACH $3,225,000 JULY 2009

97 unitS :: HoLLywood $5,500,000 ApriL 2009

For available listings and more information, please visit www.cbre.com/pcgsouthfloridamhg or call Calum Weaver +1 954 331 1763 4

RECENT MIAMI-DADE MULTI-HOUSING PRIVATE CAPITAL TRANSACTIONS C B R E M U LT I - H O U S I N G G R O U P | S O U T H F L O R I D A

Property Address
7609-7617 Carlyle Ave 233 27th St 15400 NE 6th Ave 10200 E Bay Harbor Dr 6495 Indian Creek Dr 1010 SW 2nd Ave 2510-2552 NE 184th Ter 625 Santander Ave 7315 Harding Ave 636 SW 6th St 15410 SW 75th Circle Ln 800 Capri St 6680 W 2nd Ct 1940 Biarritz Dr 925-935 Marseille Dr 1611 Meridian Ave 2201 NW 23rd St 2330 NW 18th Ct 1790 NE 117th Rd 15410 SW 75th Circle Ln 1940 Biarritz Dr 3301 NE 1st Ave, 15 Residential Units 4100 NE 1st Ave 1930 NW 22nd Ave 1495 NE 167th St 5200 NW 26th Ave 777 NW 155th Ln 20875-21093 NW 22nd Ave 440 SW 5th Ave 2860 NW 135th St 145 SW 13th St 3270 W Trade Ave 4022 NW 11th St 215 Phoenetia Ave

City
Miami Beach Miami Beach Miami Miami Beach Miami Beach Miami Aventura Coral Gables Miami Beach Miami Miami Coral Gables Hialeah Miami Beach Miami Beach Miami Beach Miami Miami Miami Miami Miami Beach Miami Miami Miami North Miami Beach Miami Miami Miami Gardens Miami Opa Locka Miami Miami Miami Coral Gables

Units
22 15 39 134 43 20 16 16 18 24 190 21 64 30 12 24 50 28 10 190 30 318 5 20 60 84 207 320 18 65 14 15 44 6

Sale Date
Feb-13 Jan-13 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Dec-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12 Nov-12

Sales Price
$2,347,613 $1,470,000 $6,650,000 $15,325,000 $4,150,000 $3,395,000 $1,850,000 $2,500,000 $1,800,000 $1,150,000 $15,200,000 $2,482,500 $3,950,000 $2,600,000 $2,610,000 $2,275,000 $3,060,000 $1,680,000 $2,115,000 $15,200,000 $2,600,000 $11,740,000 $3,500,000 $1,326,000 $3,200,000 $2,874,000 $11,600,000 $10,762,500 $1,550,000 $2,643,300 $2,885,000 $1,500,000 $2,640,000 $1,075,000

Per Unit
$106,710 $98,000 $170,513 $114,366 $96,512 $169,750 $115,625 $156,250 $100,000 $47,917 $80,000 $118,214 $61,719 $86,667 $217,500 $94,792 $61,200 $60,000 $211,500 $80,000 $86,667 $36,918 $700,000 $66,300 $53,333 $34,214 $56,039 $33,633 $86,111 $40,666 $206,071 $100,000 $60,000 $179,167

RECENT BROWARD MULTI-HOUSING PRIVATE CAPITAL TRANSACTIONS

Property Address City Units Sale Date Sales Price
$11,000,000 $1,275,000 $2,450,000 $3,900,000 $1,400,000 $1,350,000 $2,300,000 $15,000,000 $1,375,000 $1,300,000 $2,221,000 $1,300,000 $1,140,000 $1,350,000 $1,450,000 $4,300,000 $1,425,000 $2,600,000 $2,300,000 $13,700,000 $12,300,000 $1,190,000 $7,800,000 $1,750,000 $4,050,000 Sales Price $1,095,000 $7,000,000 $980,000 $1,225,000 $1,950,000 $750,000 $2,400,000 $900,000 $1,100,000 $925,000 $737,000 $2,600,000 $1,050,000 $1,250,000 $3,950,000 $1,500,000 $1,375,000 $1,025,000 $1,250,000 $900,000 $14,750,000 $1,395,000 $950,000 $4,494,000

Per Unit
$203,704 $63,750 $66,216 $34,211 $77,778 $75,000 $95,833 $67,568 $62,500 $81,250 $74,033 $72,222 $71,250 $75,000 $80,556 $33,594 $118,750 $118,182 $95,833 $43,492 $39,677 $85,000 $81,250 $76,087 $66,393 Per Unit $91,250 $33,981 $70,000 $53,261 $162,500 $62,500 $104,348 $36,000 $84,615 $154,167 $46,063 $152,941 $65,625 $138,889 $10,286 $75,000 $5,851 $60,294 $113,636 $180,000 $53,442 $174,375 $105,556 $121,459

649 S Cypress Rd Pompano Beach 7901 Johnson St Pembroke Pines 7841 Johnson St Pembroke Pines 411 SW 25 St Fort Lauderdale 4901 NE 26th Ave Fort Lauderdale 2640 NE 8th Ave Wilton Manors 2201 NE 36th St Lighthouse Point 8650 NW 61st St, 212 units Tamarac 5161 NE 18th Ave Fort Lauderdale 31 NW 2nd Ave Hallandale Beach 905 NE 18th Ave Fort Lauderdale 1830 Sheridan St Hollywood 1118 N 15th Ave Hollywood 4320 SW 6th St Plantation 999 S Riverside Dr Pompano Beach GreenView - 10011 South Nob Hill Circle Tamarac Palm Plaza Resort - 2801 Riomar St Fort Lauderdale Palm Court - 115 SW 16th Street Pompano Beach 2025 Miami Rd Fort Lauderdale Whispering Palms - 4550 NW 36th St Lauderdale Lakes Boardwalk at Inverrary - 2915 NW 60th Ave Sunrise Country Club Apts- 4737 NE 25th Ave Fort Lauderdale Broward Gardens- 2960 NW 19th St Fort Lauderdale RECENT PALM BEACH MULTI-HOUSING Lauderdale-By-The-Sea PRIVATE CAPITAL 4552 Bougainvilla Drive Venetian Address Apartments- 5230 Hollywood Blvd Hollywood Property City 335 Georgia Street Hollywood 5865 Haverhill Rd West Palm Beach 3213 SE 12th Pompano 623 Park Pl St West PalmBeach Beach 917 Bucida RdSt Delray Beach 2313 NE 2nd Pompano Beach 1133 Palm Springs 3904 Colonial SW 13th Palms Court Way Fort Lauderdale 912 Trail Delray Beach 323 Palm Monroe St Hollywood 101 Circle Boca Raton 315 Pine NE Third Ave Fort Lauderdale Oceanside ApartmentsDouglas Drive Ocean Ridge 347 N Birch Rd and Real11 Fort Lauderdale SOURCE :: CBRE Capital Analytics Belle Glades Garden2000 S. Main St Belle Glade 711 & 715 NE 2nd Ave Fort Lauderdale 300 Palm Beach Lakes Blvd West Palm Beach 555 Antioch Ave Fort Lauderdale 125 Inlet Way Palm Beach Shores 9015 NW 38th Dr Coral Springs Palo Verde- 6134 Forest Hill Blvd West Palm Beach 10917-10931 Royal Palm Blvd Coral Springs 11 SW 6th Ave Delray Beach 1916 SW 11th St Fort Lauderdale

54 Feb-13 20 Jan-13 37 Jan-13 114 Dec-12 18 Dec-12 18 Dec-12 24 Dec-12 291 Dec-12 22 Nov-12 16 Nov-12 30 Nov-12 18 Oct-12 16 Oct-12 18 Oct-12 18 Oct-12 128 Sep-12 12 Sep-12 22 Sep-12 24 Sep-12 315 Sep-12 310 Sep-12 14 Aug-12 96 Aug-12 TRANSACTIONS 23 Aug-12 61 Aug-12 Units Trade 12 Jul-12 206 Dec-12 14 Jul-12 23 Oct-12 12 Oct-12 Jul-12 23 Oct-12 25 Jul-12 13 Sep-12 6 Jun-12 16 Jun-12 17 Jun-12 16 Jul-12 9 Jun-12 384 Jun-12 20 Jun-12 235 Jun-12 17 Jun-12 11 Apr-12 5 May-12 276 Jun-12 8 May-12 9 May-12 37 May-12

C B R E M U LT I - H O U S I N G G R O U P | S O U T H F L O R I D A

CAP RATE STUDY

Submarket Class A Class B Class C
with adjustments for taxes and insurance

Low / High 4.75% - 5.25% 5.75% - 6.25% 6.50% - 8.00%

should plan defensively for possible rate spikes. CBRE believes most investors should try to lock in long term fixed rates while the going is good. Keeping financing costs down over the investment holding period can be as valuable an asset as the building itself, creating future gains when rates go up.

Calculation based on trailing 3 months at time the deal goes hard

WHO IS BUYING MULTI-HOUSING PROPERTIES TODAY? VACANCY & RENT INCREASE FORECASTS Currently there are numerous private investors seeking multi-housing opportunities in South Submarket 2012 2013 2014 2015 Florida. Well-located, infill properties are commanding the most investor interest. Miami-Dade Foreign private capital remains very active in Vacancy 2.8% 1.4% 1.2% 1.7% multi-housing opportunities in South Florida. Rent Increase 2.2% 3.8% 4.5% 3.2% Seven out of our last nine CBRE Private Capital Broward Group transactions were to foreign buyers. Vacancy 4.7% 5.0% 4.6% 4.1%
Rent Increase Palm Beach Vacancy Rent Increase 2.3% 6.6% 3.1% 3.0% 3.5% 2.9%

WHAT TYPE OF RETURNS ARE INVESTORS LOOKING TO ACHIEVE Investors return requirements will vary on location and the asset class. In general an investor will underwrite to at least a five yearhold period and seek a steady predictable cash flow generating a 6.0% to 8.0% allcash IRR provides a solid alternative to the opportunistic and more risky investments that took place in the last cycle as investors stretched for yield. On a levered basis IRRs are around 15%. With attractive debt options, many buyers are taking advantage of the low interest rates to finance the properties which will provide them more attractive returns. CONCLUSION Multi-housing properties are undoubtably the strongest and most desired commercial property type by investors in South Florida. Higher rents and occupancies, cheap debt, abundant investors, limited for sale product, and historically low cap rates are continuing to drive pricing. As in previous years, multi-housing properties continue to be the unmatched, preferred asset class for commercial real estate investors. Unusually the current market conditions provide an opportune time for both buyers and sellers. If you are thinking of selling, low cap rates and a high amount of investors will provide you premium pricing. Conversely, attractive financing and anticipated future improved property performance provide an ideal opportunity for buyers. Alternatively, multi-housing owners that have any debt maturing over the next five years should evaluate from both a disposition and refinance perspective to determine what is their best investment strategy. This report is produced by Calum Weaver with CBRE in Miami. Calum exclusively focuses on the marketing and disposition of multi-housing properties on behalf of private owners in South Florida. Over the past four years, Calum has participated in the sale and marketing of more than 45 multi-housing properties (from $500,000 to $59 million) totaling over $300 million in total volume.

5.8% 5.2% 5.1% 5.0% 5.1% 3.3%

ARE THERE ANY NEGATIVES? First and foremost, a sudden rise in long-term interest rates remains a concern, although that appears unlikely in 2013 as the Fed has pledged to keep interest rates low until the unemployment rate falls to 6.5%. The Fed is now using benchmarks in the U.S. labor markets for the timing of any potential rate increases. Secondly, an over-supply of new units could appear in a select few submarkets, but is likely to be a pause rather than a problem. LENDING FOR PRIVATE INVESTORS There are now significantly more lenders willing to loan on $1 to $10 million properties. However while there are ample sources of capital for stable assets and strong borrowers, there is a dearth of capital for non-stable assets and challenged borrowers. With local banks actively looking to lend, the majority of sub $3mm transactions are occurring with financing from local banks or other lenders. The readily available access to cheap debt is perversely encouraging investors into taking greater risk since they cant make money in bonds or money markets. Lenders are willing to finance stabilized properties at up to 75% LTV in the high 3 to low 4% range. See page 7 for more information. Despite Fed assurances about keeping rates at present levels, we believe interest rates will begin to edge upwards in 2014. Investors 6

WHAT TYPE OF MULTI-HOUSING PROPERTIES ARE INVESTORS FOCUSED ON BUYING? In the past two years investors were focused on newer properties in desirable locations. We are now starting to see increased investor interest in less marquee properties as a lack of available product and intense buyer competition is causing buyers to expand their focus to include more Class B and C assets. With Class A cap rates around 5%, investors are increasingly looking for lower quality properties in the anticipation of higher returns. Hence we are seeing a significant increase in the number of value-add type transactions. Todays investors are back at value-add, but capping their rehab dollars at $3,000 to $7,000 per unit (with a corresponding 15% to 20% return or 5.0+/- year payback), and in the best assets, a maximum of $10,000 per unit. Residents are accepting the higher renovation rents and are staying put for the time being, as the mentality shifts from home ownership to rental ownership. With cheap debt being readily available most buyers are seeking financing on new deals. All cash buyers, which in previous years, had the advantage to move quickly and close transactions are now facing stiff competition from buyers who are financing deals. Abstractly, a buyer will value an investment at a 6 cap, leverage 75% at a 4% interest rate which provides an investor a levered cash-on-cash over 10%. This is an attractive proposition in a low-yield environment, especially as inflation risks emerge given the unprecedented pace of synchronized central bank liquidity injections.

CBRE Capital Markets WEEKLY UPDATE: Week of February 18, 2013 CBRE Capital Markets CBRE Capital Markets Multi-Housing Finance Update Agency Briefs WEEKLY UPDATE: Week Week of February 18, 2013 WEEKLY A SynopsisUPDATE: of Current Trends of February 18, 2013 Agency Briefs is no visibility on how the spending reduction side of the equation
FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING FIXED RATE PRICING

Multi-Housing Finance Finance Update Update Multi-Housing WEEKLY UPDATE: Week of February 18, 2013 Lending Rates
Lending For Private Investors agreed to of raise taxes after a long and bitter fight, but there Agency Briefs Ahave Synopsis Current Trends
In America we have moved from the drama of the election, to the Agency Briefs fiscal cliff, and now to the sequestration. Both sides of the aisle

A good Synopsis ofhave Current Trends will out. on Some view the spending required by the In play America we moved from the reductions drama election, to the The news the private capital frontof isthe that more nonA Synopsis of Current Trends sequestration process to the kick in the on March 1 as being harmful to the fiscal cliff,we and now to sequestration. Both sides of the to aisle recourse lenders have entered market to lend on smaller In America have moved from the drama of the election, the In America we have moved from the drama of the election, to the slow economic recovery and disappointing job market. While job have agreed to raise taxes after a long $1 and bitter fight, but there fiscal cliff, and now to the sequestration. Both sides of the aisle assets and loan sizes that range from Million to $10 Milfiscal cliff, and now to the sequestration. Both sides of the aisle creation results have been revised upward over the past few months, is no visibility on how the spending reduction side of the equation have agreed toalways raise taxes afterlocal a longand and bitter fight, but therewilllion. have There have been regional banks agreed to raise taxes after a long and bitter but there the unemployment rate also ticked up to 7.9% asfight, more unemployed will play out. Some view the spending reductions required by the is no visibility on how the spending reduction side of the equation ing to lend capital on a recourse basis to1 this segment of the is no visibility onprocess how the spending reduction side of the equation people returned to the market. Expectations are theharmful Fed sequestration to kick in on March asthat being will play out. Some view the spending reductions required by will theto the market but there typically was a dearth of capital on the nonwill play out. Some view the spending reductions required by the continue their bond buying program indefinitely in an effort to lower slow economic recovery and job market. While job sequestration process to kick indisappointing on March 1 as being harmful to the sequestration process to kick in on balance March 1job as being harmful the long term rates, spur spending and investment, and creation results have been revised upward over theencourage past few to months, recourse side. Several new small CMBS lenders are slow economic recovery and disappointing market. While job slow economic recovery and disappointing job market. While job hiring. Fed Vice Chairwoman Janet Yellen, a leading candidate to the unemployment rate also ticked up to 7.9% as more unemployed now in the market and will quote loans as small as $2 Million. creation results have been revised upward over the past few months, creation results have been revised upward over the past few months, succeed Ben Bernanke Chair of theto Fed when his term expires in people returned to the market. Expectations are that the Fed will the unemployment rate also ticked up 7.9% as more unemployed In addition, a number ofas banks are now lending capital on a the unemployment rate also ticked up current to 7.9% as more unemployed January 2014, endorsed the approach of the Fed continue theirrecently bond buying program indefinitely in an effort to lower people returned to the market. Expectations are that theas Fed will non-recourse basis at competitive terms with loans small as people returned to the market. Expectations are that the Fed will buying approximately $85 billion a month of treasury and mortgage long term rates, spur spending and investment, and encourage continue theirinformation bond buying program indefinitely in an effort to lower $750,000. The listed in the tables below outline continue their bond buying program indefinitely in an effort lower backed securities. While there is an investment, emerging at the to Fed hiring. Fed Vice Chairwoman Janet Yellen, a faction leading candidate to long term rates, spur spending and and encourage the general terms we are seeing from these lending sources: long term rates, spur spending and investment, and encourage advocating an end to these bond-buying programs by midyear, most succeed Ben Bernanke as Chair of the Fed when his term expires in hiring. Fed Vice Chairwoman Janet Yellen, a leading candidate to
succeed Ben Bernanke as Chair of the Fed target when his term expires as inflation remains below the current Fed of 2%. buying approximately $85 billion a current month of treasury and mortgage Small Balance CMBS January 2014, recently endorsed the approach of the Fedin January 2014, recently endorsed the current of Fed backed securities. there is emerging faction at the the Fed buying approximately $85 billion aan month of approach treasury and mortgage Maximum Leverage While 75% LTV Yields on treasury securities have increased approximately 40 bps buying approximately $85 billion a month of treasury and mortgage advocating an end to these programs midyear, backed securities. While therebond-buying is an emerging faction by at the Fed most Minimum loan size -While $2 Million from the beginning of 4Q2012, and now have settled into a trading backed securities. there is an emerging faction at the Fed market observers put any major policy adjustment into 2014 long advocating an7, end to these bond-buying programs by midyear,as most Loan advocating Terms 5, and 10 years range around 2% for the ten year UST. Credit spreads have remained an end to any these bond-buying programs by2%. midyear, as inflation remains below the current Fed target of market observers put major policy adjustment into 2014 as most long Amortization 30 years stable after a powerful rally in the last quarter of 2012 and are now market observers putbelow any major policy Fed adjustment into 2014 as long as inflation remains the current target of 2%. atYields the low of their historical ranges. Agency and CMBS spread on treasury securities increased approximately 40 bps as inflation remains below the have current Fed target of 2%. Interest Rate end 4.0% to 4.5% compression havesecurities taken some of increased the sting out of rising yields on fromon the beginning of 4Q2012, and now have settled into a trading Pre-Payment Typically 2 year lockout followed by defeaYields treasury have approximately 40 bps Yields on treasury securities have increased approximately 40 bps USTs. Thus the typical 75% LTV year GSE loan is getting done just under range around 2% of for the ten UST. spreads have remained from the beginning 4Q2012, and nowCredit have settled into a trading sance from the beginning of 4Q2012, and now have settled into a trading 4%, while low leverage loans are in the 3.25% 3.50% range. Full stable after a powerful rally in the last quarter of 2012 and are now Bankstable Lender afterend a powerful rallysome in the last quarter of and 2012 and are now are around 3.00% taken incredible positive leverage. compression have of the sting out of rising yields on at the low of their historical ranges. Agency CMBS spread Maximum Leverage 65% (can goloan to 80% with partial reat the low end of typical their historical ranges. Agency CMBS spread USTs. Thus the 75% LTV GSE is getting done just under compression have taken some of the sting out ofand rising yields on Conference season for the industry concluded last week in San Diego compression have taken some of the sting out of rising yields on course to borrower) 4%, while low leverage loans are in the 3.25% 3.50% range. Full USTs. Thus the typical 75% LTV GSE loan is getting done just under where the Annual CREF/Multifamily Conference took place. USTs. Thus the typical 75% LTV GSE loan is getting done just under leverage seven year loans are still around 3.5% and five year loans Minimum loan size -MBA $1 Million 4%, while low leverage loans are in the 3.25% - 3.50% range. Full Like the mood at the CREFC and NMHC Conferences that occurred while low 3.00% leverage loans are in the 3.25% 3.50% Full are around incredible positive leverage. leverage year are still around 3.5%- and fiverange. year loans Loan 4%, Terms seven 3, 5, 7, loans and 10 years in January, the year mood at the MBA Conference was downright leverage seven loans are still around 3.5% and five year loans are around 3.00% incredible positive leverage. Amortization 3.00% 25-30 years bullish. CBRE has had over organized meetings debt capital Conference season for the70 industry concluded lastwith week in San Diego are around incredible positive leverage. Interest Rate the and 3.75% to 4.5% providers, all offor the lending groups have said they want to where Annual MBA CREF/Multifamily Conference took place. Conference season the industry concluded last week in San Diego Conference season for the industry concluded last week in San Diego increase their allocations and volumes in 2013. Life Insurance Pre-Payment Flexible, but typically a step down structure i.e. Like the mood at the CREFC and NMHC Conferences that occurred where the Annual MBA CREF/Multifamily Conference took place. where the Annual MBA CREF/Multifamily Conference took Companies, Commercial CMBS Lenders, Debt Funds, in January, the mood at banks, theand MBA Conference was downright 5%, 4%, 3%, 2%, 1%, Par Like the mood at the CREFC NMHC Conferences that place. occurred in January, the mood at the MBA Conference downright lend more in 2013. This increased liquidity in was the debt markets will providers, and all of the lending groups have said they want to bullish. CBRE has had over 70 organized meetings with debt capital For loan sizes larger than $3 Million and for assets that meet bullish. CBRE has had over 70as organized meetings with debt capital benefit all borrowers this year we expect competition will heat increase their allocations and volumes in 2013. Life Insurance providers, and all of the lending groups have said they want to the criteria, the agency lenders continue to be a very compelproviders, andallocations all of the lending have said they want to up. Multifamily loans continue togroups be in in high demand as the market Companies, Commercial banks, CMBS Lenders, Debt Funds, increase their and volumes 2013. Life Insurance ling choice for multifamily borrowers. Agency debt continues increase their allocations volumes in 2013. Life Insurance fundamentals continue toand be positive apartments, even Bridge Lenders and the Agencies allfor have capacity and a though desire to Companies, Commercial banks, CMBS Lenders, Debt Funds, Commercial banks, CMBS Lenders, Debt Funds, to beCompanies, a reliable and attractive option for multifamily borrowrent growth may be slowing and vacancies may tick up modestly. lend more in 2013. This increased liquidity in theand debt will Bridge Lenders and the Agencies all have capacity a markets desire to Bridge Lenders and concern the Agencies all have capacity and aFlorida. desire to The one consistent expressed by most ofSouth our lenders a benefit all borrowers this year as we expect will is heat ers looking to acquire or refinance assets in lend more in 2013. This increased liquidity incompetition the debt markets will lend in 2013. This increased liquidity in the debt markets will view that rates will riseas this year. forecast a ten year up.more Multifamily loans continue to be inMany high demand as the market benefit allinterest borrowers this year we expect competition will heat Like theLenders mood thethe CREFC and NMHC that occurred Bridge and all haveConferences capacity and a desire to bullish. CBRE has had over 70 organized meetings with debt capital in January, the at mood at Agencies the MBA Conference was downright stable after a powerful in the lastCredit quarter of 2012 and are now range around 2% for the rally ten year UST. spreads have remained range around 2% for thehistorical ten year Credit spreads have remained leverage seven year loans are still UST. around 3.5% and five year loans at the low end of their ranges. Agency and CMBS spread hiring. Fed Vice Chairwoman Janet Yellen, a leading candidate market observers put any major policy adjustment into 2014 as to long January 2014, recently the Fed current approach of the Fed succeed Ben Bernanke asendorsed Chair of the when his term expires in

benefit all of borrowers as we expect competition will UST yield 2.5% bythis the year end of the year, it may be prudent to get fundamentals continue to be positive forso apartments, even though up. Multifamily loans continue to be in high demand as the heat market Yields on treasury securities have increased approximately 40 up. Multifamily loans to be in high demand the market deals financed before rates go up. Since credit spreads are already rent growth may be continue slowing and vacancies may tickas up modestly. fundamentals continue to be positive for apartments, even though bps from the beginning of 4Q2012, and now have settled fundamentals continue to be positive for apartments, even though tight by historical averages, we expect any increase in UST yields will The one consistent concern expressed by most of our lenders is a rent growthrange may be around slowing and vacancies may tick upUST. modestly. into a trading 2% for the ten year Credit rent growth may be slowing and vacancies may tick up modestly. be passed along torates the borrower. Since the market is in flux and view that interest will expressed rise this year. Many forecast a ten The one consistent concern by most of our lenders isyear athe spreads have remained stable after a powerful rally in the last The one consistent concern expressed by most of our lenders is a competitive lender landscape is changing, it pays to use your CBRE UST yield of 2.5% bywill the rise end of the year, so it may be to get view that interest rates this year. Many forecast a prudent ten year view that interest rates will rise this year. Many forecast a ten year finance professional to help you find the best solution for quarter of 2012 and are now at the low end of their historical deals financed before rates go up. Since credit spreads are already UST yield of 2.5% by the end of the year, so itcapital may be prudent to your get UST yield of 2.5% by the end of the year, so it may be prudent to get property. tight by historical averages, we expect any increase in UST yields will ranges. Agency and CMBS spread compression have taken deals financed before rates go up. Since credit spreads are already financed before rates go up. Since credit spreads are already bethe passed along to borrower. Since the market in flux and the tight by historical averages, weyields expect any increase inisUST yields will somedeals of sting out ofthe rising on USTs. Thus the typical tight by historical averages, we expect any increase in UST yields will competitive lender landscape is Since changing, it pays is toin use your be passed along to the borrower. the under market flux andCBRE the 75% be LTV GSEalong loan isthe getting done just 4%, while low passedprofessional tolandscape borrower. Since thebest market is use insolution flux and the finance to help is you find the capital for your competitive lender changing, it pays to your CBRE leverage loans lender are inlandscape the 3.25% - 3.50% range. Full leverage competitive is changing, it pays to use your CBRE property. finance professional to help you find the best capital solution for your sevenfinance year loans are still around 3.5% and five year loans are professional to help you find the best capital solution for your property. property. around 3.00% incredible positive leverage.

Key Rates Key Rates Rates Key

5.00% 4.50% 4.00%
Current

Freddie Mac 5 year* 2.55% - 2.65% 3.41% - 3.51% 2.30% - 2.40% 3.16% - 3.26% 7 year 3.37% 3.57% 7.00% Freddie Mac 1.25x/80% 1.35x/65% Leverage 7 Leverage year 2.42% - 2.52% 3.78% - 3.88% 2.17% 2.27% 3.53% Priced over 1.05x*/80% 1 month Libor. Prepayment Freddie Mac - 3.63% 3%, 2%, 1%, then 1% thereafter. Max Rate Leverage 1.25x/80% 1.35x/65% Leverage 1.05x*/80% Term Spread Rate - 4.21% 1.35x/65% Spread Rate - 3.96% Term Spread Rate 10 year 1.25x/80% 2.11% - 2.21% 4.11% 1.86% - 1.96% 3.86% Leverage Leverage 1.05x*/80% *Based on a stressed interest rate. Term Spread Rate Spread Rate Term Spread Rate Max Rate 5 year* 2.55% - 2.65%yield 3.41% - 3.51% Spread 2.30% - 2.40% Rate 3.16% - 3.26% 7 year Spread 3.37% Rate 3.57% 7.00% Pricing based on standard maintenance. Term Spread Rate Term Max Rate *DSCR/LTV parameters may vary on 5 structures. 5 year* 2.55% - 2.65% 3.41% - year 3.51% 2.30% - 2.40% 3.16% - 3.26% 7 Priced year over 3.37% 3.57% 7.00% 7 year 2.42% 2.52% 3.78% 3.88% 2.17% 2.27% 3.53% 3.63% 1 month Libor. Prepayment 5 year* 2.55% - 2.65% 3.41% - 3.51% 2.30% - 2.40% 3.16% - 3.26% 7 year 3.37% 3.57% 7.00% 3%, 2%, then 1% thereafter. 7 year 2.42% - 2.52% 3.78% - 3.88% 2.17% - 2.27% 3.53% - 3.63% Priced over1%, 1 month Libor. Prepayment year 2.42% 2.11% - 2.21% 3.78% 4.11% - 4.21% 2.17% 1.86% - 1.96% 3.53% 3.86% - 3.96% 7 10 year - 2.52% - 3.88% - 2.27% - 3.63% Priced over 1amonth Libor. Prepayment *Based on stressed interest rate. 3%, 2%, 1%, then 1% thereafter. Fannie Mae 10 year 2.11% - 2.21% 4.11% - 4.21% 1.86% - 1.96% 3.86% - 3.96% Pricing on standard yield maintenance. 3%, 2%, 1%, then 1% thereafter. 10 year based 2.11% - 2.21% 4.11% - 4.21% 1.86% - 1.96% 3.86% - 3.96% *Based on a stressed interest rate. *DSCR/LTV parameters may vary on 5 year structures. Leverage 1.25x/80% 1.35x/65% Leverage *Based on1.00x**/80% a stressed interest rate. Pricing based on standard yield maintenance. Pricing based on standard yield maintenance. *DSCR/LTV parameters may vary on 5 year structures. Term Spread Rate on Spread Rate Term Spread Rate Max Rate *DSCR/LTV parameters may vary 5 year structures. Mae 5 year* 2.54% - 2.64% 3.40% - 3.50% 2.34% Fannie - 2.44% 3.20% - 3.30% 7-6 ARM* 3.12% 3.32% 7.60% Fannie Mae- 3.63% 1.25x/80% 1.35x/65% Leverage 1.00x**/80% 7 Leverage year 2.37% - 2.47% 3.73% - 3.83% 2.17% - 2.27% Mae 3.53% *Prepay consists of 1 year lockout, 1% Fannie thereafter. Leverage 1.25x/80% 1.35x/65% Leverage 1.00x**/80% Term Spread Rate - 4.20% 1.35x/65% Spread Rate - 4.00% Term 1.00x**/80% Spread Rate Max Rate 10 year 1.25x/80% 2.10% - 2.20% 4.10% 1.90% - 2.00% 3.90% Leverage Leverage **Based on the max interest rate. Term Spread Rate Spread Rate Term Spread Rate Max Rate 5 year* 2.54% 2.64% 3.40% 3.50% 2.34% 2.44% 3.20% 3.30% 7-6 ARM* 3.12% 3.32% 7.60% Pricing based on standard yield maintenance. Term Spread Rate Spread Rate Term Spread Rate Max Rate *DSCR/LTV parameters may 3.40% vary on-5 structures. 5 year* 2.54% - 2.64% 3.50% 2.34% - 2.44% 3.20% - 3.30% 7-6 ARM* 3.12% 3.32% 7.60% year 2.54% 2.37% - 2.47% 3.73% - year 3.83% 2.17% - 2.27% 3.20% 3.53% - 3.63% *Prepay year lockout, 57 year* - 2.64% 3.40% - 3.50% 2.34% - 2.44% - 3.30% 7-6 ARM* consists 3.12%of 1 3.32% 7.60%1% thereafter. 7 year 2.37% - 2.47% 3.73% - 3.83% 2.17% - 2.27% 3.53% - 3.63% *Prepay consists of 1 year lockout, 1% year 2.37% 2.10% - 2.20% 3.73% 4.10% - 4.20% 2.17% 1.90% - 2.00% 3.53% 3.90% - 4.00% 7 10 year - 2.47% - 3.83% - 2.27% - 3.63% *Prepay consists 1 year lockout, **Based on theof max interest rate. 1% thereafter. HUD 10 year based 2.10% - standard 2.20% yield 4.10% - 4.20% 1.90% 2.00% FHA 3.90% - 4.00% Pricing on maintenance. thereafter. 10 year 2.10% - 2.20% 4.10% - 4.20% 1.90% - 2.00% 3.90% - 4.00% **Based on the max interest rate. Term may Leverage* Spread Rate** Pricing based on lock out for 2 years, then 7%, rate. 6%, 5%, 4%, *DSCR/LTV vary on 5 year structures. **Based on the max8%, interest Pricing based parameters on standard yield maintenance. Pricing based on standard yield maintenance. (10-YR T) 3%, 2%, 1%, 0% thereafter. Over the yield of 10-year treasuries. *DSCR/LTV parameters may vary on 5 year structures. *DSCR/LTV parameters may vary on 5 year structures. Apartment New 40 1.20/83.3% 0.90% 3.55% HUDIncludes FHA mortgage insurance premium of 0.45%-0.77%; based on estimated spreads and actual treasury yields at time of quote Construction HUD FHA Term Leverage* Spread HUD Rate** FHA Pricing based on lock out for 2 years, then 8%, 7%, 6%, 5%, 4%, sheet preparation. Apartment Refinance 35 1.20/83.3% 0.65% 3.25% (10-YR T) Rate** 3%, 2%, 1%, 0% thereafter. Over the yield ofhave 10-year Term Leverage* Spread Pricing based on lock out for 2 years, then 8%, 7%, lower 6%,treasuries. 5%, 4%, *Market rate projects. Affordable transactions DSC Term Leverage* Spread Rate** Pricing based on lockinsurance out for 2 premium years, then 8%, 7%, 6%, 5%, 4%, Healthcare New 40 1.45/75% 0.90% Includes mortgage ofof 0.45%-0.77%; based (10-YR T) 3.67% 3%, 2%, 1%, 0% ratios. thereafter. Over the yield 10-year treasuries. Apartment New and higher loan 40 1.20/83.3% (10-YR 0.90% 3.55% 3%, T) 2%, 1%, 0% thereafter. Over the yield of 10-year treasuries. Construction on estimated spreads and actual treasury yields at time of quote Construction Includes mortgage insurance premium of 0.45%-0.77%; based **Rate includes MIP . Apartment New 40 1.20/83.3% 0.90% 3.55% Includes mortgage insurance premium of 0.45%-0.77%; based Apartment New sheet preparation. 1.20/83.3% 0.90% 3.55% Healthcare Refinance 35 1.45/80% on estimated spreads and actual treasury yields at time of quote Construction Apartment Refinance 40 35 1.20/83.3% 0.65% 0.65% 3.30% 3.25% on estimated spreads and actual treasury yields at time of quote Construction *Market rate projects. Affordable transactions have lower DSC sheet preparation. Apartment Refinance 35 1.20/83.3% 0.65% 3.25% Healthcare New 40 1.45/75% 0.90% 3.25% 3.67% sheet and preparation. higher loan ratios. Apartment Refinance 35 1.20/83.3% 0.65% *Market rate projects. Affordable transactions have lower DSC Construction MIP has increased, effective October 1, 2012.0.90% The new MIP rates, included in the overall are: *The first year MIP lower for the Apart*Market rate projects. Affordable transactions have DSC Healthcare New 40 1.45/75% 3.67% **Rate includes MIP . rate, and higher loan ratios. Healthcare New 1.45/75% 0.90% 3.67% ment & Healthcare Refinance/ and higher loan ratios. Construction Healthcare Refinance 40 35 1.45/80% 0.65% 3.30% Formerly Effective 10/1/12 **Rate includes MIP . Construction Acquisition remains 1.00% for **Rate includes MIP . Healthcare Refinance 35 1.45/80% 0.65% 3.30% ApartmentRefinance New Construction/Sub Rehab .45% .65% Healthcare 35 1.45/80% 0.65% 3.30% the first year. The new MIP rates MIP has increased, effective October 1, 2012. The new MIP rates, included in the overall rate, are: become *The first year MIP for the ApartApartment Refinance/Acquisition .45% *.60% effective with comment & year Healthcare MIP has increased, effective October 1, 2012. The new MIP rates, included in the .77% overall rate, are: *The first forRefinance/ the Apart mencement ofMIP the second year Formerly 10/1/12 Healthcare New Construction/Sub Rehab .57% MIP has increased, effective October 1, 2012. The new MIP rates, included inEffective the overall rate, are: *The first year MIP for the Apart remains 1.00% for ment Healthcare Refinance/ ofAcquisition the& mortgage loan. Formerly Effective 10/1/12 ApartmentRefinance/Acquisition New Construction/Sub Rehab .45% .65% ment & Healthcare Refinance/ Healthcare .50% *.65% the first year. The new MIP rates Formerly Effective 10/1/12 Acquisition remains 1.00% for MIP Rates for all projects identiAcquisition remainswith 1.00% for Apartment New Construction/Sub Rehab .45% .65% Apartment Refinance/Acquisition .45% *.60% become effective comthe first year. The new MIP fied as affordable within therates Apartment New Construction/Sub Rehab .45% .65% the first year. The new MIP rates mencement of the second Apartment Refinance/Acquisition .45% *.60% become effective with com- year HUD/FHA guidelines remain Healthcare New Construction/Sub Rehab .57% .77% Apartment Refinance/Acquisition .45% *.60% become effective with comof the mortgage mencement of the loan. second year unchanged. Healthcare New Construction/Sub Rehab .57% .77% Healthcare Refinance/Acquisition .50% *.65% mencement of second forthe all projectsyear identiHealthcare New Construction/Sub Rehab .57% .77% ofMIP the Rates mortgage loan. offied the as mortgage loan. Healthcare Refinance/Acquisition .50% *.65% affordable within the MIP Rates for alland projects identiThe rates forRefinance/Acquisition Freddie Mac, Fannie Mae and HUD FHA as published are indicative only, based on information collected are subject Healthcare .50% *.65% MIP Rates for all projects identiHUD/FHA guidelines remain fied as affordable within the to change at any time without notice. Freddie Mac, Fannie Mae and HUD FHA price each loan individually. Freddie Mac and HUD fied as affordable within the unchanged. HUD/FHA guidelines remain FHA does not publish pricing. Freddie Mac, Fannie Mae and HUD FHA have not pre-approved any of these rates.guidelines HUD/FHA remain unchanged. unchanged. The rates for Freddie Mac, Fannie Mae and HUD FHA as published are indicative only, based on information collected and are subject Key Rates to change at any time without notice. Freddie Mac, Fannie Mae and HUD FHA price each loan individually. Mac The rates for Freddie Mac, Fannie Mae and HUD FHA as published are indicative only, based on information Freddie collected andand are HUD subject The rates fornot Freddie Mac, Fannie Mae and HUD FHAMae as published are indicative only, based on information collected and are subject does pricing. Freddie Mac, Fannie and HUD FHA have not pre-approved any of these rates.Mac toFHA change at anypublish time without notice. Freddie Mac, Fannie Mae and HUD FHA price each loan individually. Freddie and HUD to change at any time without notice. Freddie Mac, Fannie Mae and HUD FHA price each loan individually. TREASURY YIELDS INTEREST RATESFreddie Mac and HUD FHA does not publish pricing. Freddie Mac, Fannie Mae and HUD FHA have not pre-approved any of these rates. FHA does not publish pricing. Freddie Mac, Fannie Mae and HUD FHA have not pre-approved any of these rates.
7.50% 7.00%
90 Days Ago 1 Year Ago

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Spread

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FLOATING RATE PRICING FLOATING RATE PRICING FLOATING RATE PRICING RATE PRICING FLOATING RATE PRICING RATE PRICING FLOATING FLOATING FLOATING RATE PRICING FLOATING RATE PRICING

Lending Rates Leverage 1.25x/80% Lending Rates Term Spread Lending Rates

Multi-Housing Group For more information on our team, 617.217.6041 please visit www.cbre.com/mhg multi-housinggroup@cbre.com Multi-Housing Group For more information on our team, Multi-Housing 617.217.6041Group Charles Foschini Christopher Apone Multi-Housing Group For more information on our team, please visit www.cbre.com/mhg 617.217.6041 multi-housinggroup@cbre.com Debt & Equity Finance & Equity Finance For more information on Debt our team, 617.217.6041 please visit www.cbre.com/mhg multi-housinggroup@cbre.com 305.381.6424 please visit www.cbre.com/mhg 305.381.6414 multi-housinggroup@cbre.com Freddie Mac charles.foschini@cbre.com christopher.apone@cbre.com
1.35x/65% Leverage 1.05x*/80% Term Spread Rate Max Rate

C Br E M U LT I - H O U S I N G G R O U P | S O U T H FL O R I D A

Conference season for the industry concluded last week in San Diego where the Annual MBA CREF/Multifamily ConferEcon ence took Update place. Like the mood at the CREFC and NMHC Economic reports due this week Conferences that occurred in January, the mood at the MBA Conference wasFebruary downright bullish. CBRE has had over 70 Monday, 18: organized meetings with debt capital providers, and all of the Econ Update US Holiday: Presidents Day - All Markets Closed lending groups have said they want to increase their allocaEcon Update Economic reports due this week Tuesday, February 19: Econ Update and tions volumes in 2013. Life Insurance Companies, ComEconomic reports due this week Index - 10:00AM ET | 3-Month BillLenders AucMonday, February 18: mercial banks,Market CMBS Lenders, Debt Funds, Bridge Economic reports due this week Housing tion -Holiday: 11:30AM ET | 6-Month Auction -Closed 11:30AM ET US Presidents Day -Bill All Markets and the Agencies all have capacity and a desire to lend more Monday, February 18: February 18: Wednesday, February 20: US Holiday: Presidents Day -in All Markets Closed will benin 2013. This increased liquidity the debt markets Monday, Tuesday, February 19: US Holiday: Presidents Day -|All Markets Closed Housing Starts - year 8:30AM ET Producer IndexBill - Aucefit all Tuesday, borrowers this as expect competition will heat Housing Market Index - we 10:00AM ET |Price 3-Month February 19: 8:30AM ET | 4-Week Bill Auction 11:30AM ET | FOMC Tuesday, February up. loans continue to be in high demand as ET the Multifamily tion - 11:30AM ET |19: Bill Auction - 11:30AM Housing Market Index -6-Month 10:00AM ET | 3-Month Bill AucMinutes 2:00PM ET - 10:00AM Housing Market Index ET | 3-Month Bill Aucmarket fundamentals continue to be apartments, tion - 11:30AM ET | 6-Month Bill positive Auction -for 11:30AM ET Wednesday, February 20: tion - 11:30AM ET | may 6-Month Bill Auction - 11:30AM ET even rent growth be and vacancies Thursday, February 21: though Housing Starts - 8:30AM ET slowing | Producer Price Index - may Wednesday, February 20: Consumer Price Index 8:30AM ET concern | 11:30AM Jobless expressed Claims tick up modestly. The one- consistent by Wednesday, 20: 8:30AM ET |February Bill ET | Housing Starts -4-Week 8:30AM ETAuction | Producer Price Index - FOMC 8:30AM ET | PMI Manufacturing Index Flash - 8:58AM Housing Starts - is 8:30AM ET | Producer Price Index most of our lenders a view that interest rates will -rise this Minutes - 2:00PM ET 8:30AM ET | 4-Week Bill Auction - 11:30AM ET | FOMC ET | Existing Sales - 10:00AM ET Philadelphia 8:30AM ET |Home 4-Week Bill Auction - 11:30AM ET by | FOMC year. Many forecast a ten UST yield of|2.5% the end Minutes - 2:00PM ET year Thursday, February 21: Minutes Fed Survey 10:00AM ET | EIAto Petroleum Status Report - 2:00PM ET prudent of the year, so it -may be get deals financed beConsumer Price Index 8:30AM ET | Jobless Claims Thursday, February 21: 11:00AM ET | 30-Yrcredit TIPS Auction - 1:00PM ET rates fore go up. Since spreads are already tight by Thursday, February 21: 8:30AM ET | PMI Manufacturing Index Flash 8:58AM Consumer Price Index - 8:30AM ET | Jobless Claims historical averages, we expect any increase in UST yields Friday, February 22: Price Index - 8:30AM ET | Jobless Claims - will Consumer ET | Existing Home Sales - 10:00AM | Philadelphia 8:30AM ET | PMI Manufacturing Index ET Flash - 8:58AM be passed along to the borrower. Since the market is in flux Jerome Powell Speaks 8:30AM ET | Manufacturing Index Flash - 8:58AM Fed Survey -PMI 10:00AM | EIA Petroleum Status Report ET | Existing Home SalesET - 10:00AM ET | Philadelphia and the competitive lender landscape is changing, it pays to ET | ExistingET Home Sales - 10:00AM | Philadelphia 11:00AM | 30-Yr TIPS - ET 1:00PM ET Report Fed Survey - 10:00AM ET | Auction EIA Petroleum Status FedCBRE Survey - 10:00AM ET | EIA Petroleum Status Report use your finance professional to help you find the best 11:00AM ET | 30-Yr TIPS Auction 1:00PM ET Friday, ET February 22: Auction - 1:00PM ET 11:00AM 30-Yr TIPS capital solution for|your property.
Jerome Powell Speaks CBRE Capital Markets originated over $11.4 billion of multiJerome Powell Speaks family loans in 2012 with over 189 lenders. The MBA Commercial/Multifamily Mortgage Origination Survey confirms that CBRE was the largest Agency originator in America in 2012 with over $8.9 billion in volume. While we are best in class in the Agency space, we also placed 21% of our 2011 volume with non-Agency sources. Our ability to canvass the market for the best multifamily debt capital for our clients is unsurpassed.

TREASURY YIELDS TREASURY YIELDS TREASURY YIELDS

Current 90 Days Ago 1 Year Ago

6.50% 6.00% 7.50% 5.50% 7.00% 7.50% 7.50% 5.00% 6.50% 7.00% 7.00% 4.50% 6.00% 6.50% 6.50% 4.00% 5.50% 6.00% 6.00% 3.50% 5.00% 5.50% 5.50% 3.00% 4.50% 5.00% 5.00% 4.00% 4.50% 4.50% 3.50% 4.00% 4.00% 3.00% 3.50% 3.50% 3.00% 3.00%

INTEREST RATES INTEREST RATES INTEREST RATES

3.50% 5.00% 3.00% 4.50% 5.00% 5.00% 2.50% 4.00% 4.50% 4.50% 2.00% 3.50% 4.00% 4.00% 1.50% 3.00% 3.50% 3.50% 1.00% 2.50% 3.00% 3.00% 0.50% 2.00% 2.50% 2.50% 1.50% 2.00% 2.00% 1.00% 1.50% 1.50% 0.50% 1.00% 1.00% 0.50% 0.50%

Current 90 Days Ago Current 1 Year Ago Current 90 Days Ago 90 Days Ago 1 Year Ago 1 Year Ago

Current 90 Days Ago Current 1 Year Ago Current 90 Days Ago 90 Days Ago 1 Year Ago 1 Year Ago

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Transactions completed by CBREs Multi-Housing Finance Team Recent Closings Click here to download charts. Click here to download charts. TRANSACTION PRICE PER Click here to download charts. CLOSING TYPE LOAN AMOUNT RATE PURPOSE TERM AMORTIZATION Transactions completed by CBREs Multi-Housing Finance Team Recent Closings CLOSING TYPE LOAN AMOUNT RATE PURPOSE TERM AMORTIZATION
Feb. 2013 Park Bank $13,900,000 25 Biscayne Miami, FL CLOSING TYPE LOAN AMOUNT Feb. 2013 Freddie Mac CME LOAN $67,410,000 CLOSING TYPE AMOUNT Feb. 2013 Fannie Mae Floating $23,900,000 San Tropez Apartments Pembroke Pines, FL Feb. 2013 Freddie Mac CME $67,410,000 Jan. 2013 Fannie Mae Fixed $39,600,000 Feb. 2013 Freddie Mac CME $39,925,000 Feb. 2013 Freddie Mac CME $67,410,000 Jan. 2013 Fannie Mae Fixed Orlando, $39,600,000 Polos East Apartments FL Feb. 2013 Bank $13,900,000 Jan. 2013 Fannie Mae Fixed $39,600,000 Feb. 2013 $13,900,000 CBREBank HMF , Floating Inc. $13,250,000 Feb. 2013 Fannie Mae $23,900,000 Feb. 2013 Bank $13,900,000 Palmetto Place Apartments Miami, FL Feb. 2013 Fannie Mae Floating $23,900,000 Feb. 2013 Fannie Freddie Mac CME $39,925,000 Feb. 2013 Mae Floating $23,900,000 Fairway View Apartments Hialeah, FL Feb. 2013 Freddie Mac CME $39,925,000 Feb. 2013 Freddie Mac CME $39,925,000 Feb. 2013 CBRE HMF , Inc. $13,250,000 Second Plaza Miami, FL Feb. 2013 CBRE HMF , Inc. $13,250,000 Feb. 2013 CBRE HMF , Inc. $13,250,000 Fountain Lakes at Bradenton Tampa, FL
Tallahassee Student Housing Fountain Square Apartments Tallahassee, FL Lakeland, FL

MSA PROPERTY NAME LOCATION SIZE (SF OR UNITS) AMOUNT SF | UNIT Transactions completed2.51% by CBREs Multi-Housing Team Recent 2 yr I/O; 30 Amort. Fairfax, VA Feb. 2013 Closings Freddie Mac CME $67,410,000 Acquisition 7 Finance Florida 3 Portfolio Miami,completed FL 1,217 Multi-Housing $75,050,000 $61,668 by CBREs Team Recent 5 yr I/O; 30 Amort. Tampa, FL Jan. 2013 Closings Fannie Mae Transactions Fixed $39,600,000 3.75% Acquisition 10Finance 1.96% 214 RATE 2.51% RATE 3.09% 246 2.51% 3.75% 2.51% 2.51% 3.75% 308 1.96% 3.75% 1.96% 2.60% 3.09% 1.96% 416 3.09% 2.51% 3.09% 301 2.51% 2.51% 2.60% 90 2.60% 2.60% 201
274 148

JeromeFebruary Powell Speaks Friday, 22: Friday, February 22:

Acquisition PURPOSE Acquisition PURPOSE Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition

MSA FL 3 yr I/O $149,533 Jacksonville, 3 $32,000,000 TERM AMORTIZATION MSA 2 yr Fully I/O; Amort. 30 Amort. Los Angeles, Fairfax, 7 TERM AMORTIZATION MSA VA 30 10 CA $24,200,000 $98,374 25 yr yr I/O; 30 Amort. Fairfax, VA 7 I/O; 30 Amort. Tampa, FL 10 1 yr yr I/O; I/O; 30 Amort. Metro San 7 2 30 Amort. Fairfax, VA 7 5 yr I/O; Amort. Tampa, FL 10 3 30 yr I/O $21,680,000 $70,390 Francisco, CA Jacksonville, 5 yr I/O; 30 Amort. Tampa, FL FL 103 3 Fully yr I/O Jacksonville, FL 310 35 Amort. San Jose, CA 35 30 Amort. Los Angeles, CA 3 yr I/O Jacksonville, FL 3 $20,370,000 $48,966 30 10 CA 1 yrFully I/O;Amort. 30 Amort. Los Angeles, Metro San 30 Fully Amort. 107 Los Angeles, CA $16,220,000 $53,887Francisco, 1 yr I/O; 30 Amort. Metro San CA 7 1 yr I/O; 30 Amort. Metro San 7 Francisco, CA 35 Amort. San Jose, CA 35 $12,970,000 $144,111 Francisco, CA 35 Amort. San Jose, CA 35 35 Amort. San Jose, CA 35 $12,700,000 $63,184
$8,000,000 $4,900,000 $29,197 $33,108

CB RICHARD ELLIS :: SOUTH FLORIDA CBRE MULTI-HOUSING MARKET UPDATE MULTI-HOUSING MARKET UPDATE A b o u t t h e C B R E M u l t i - H o u s i n g Pr i va te C a p i t al G r o u p (P C G) i n S o u t h Fl o r id a
About the Multi-Housing CB Richard Ellis Multi-Housing Private Client Group The CBRE Private Capital Group specializes in the

sale and financing of multi-housing properties on behalf of The CB Richard Ellis Multi-Housing Private Client Group specializes private investors in South Florida. The typical CBRE Private in the sale, marketing and financing of multi-housing Capital Group deal size is between $1 to $20 million. Our clients properties on behalf of private investors in South Florida. are typically individuals and partnerships who have their own The typical CBRE Private Client Group deal size is between $1 to capital at risk for the purpose of building personal wealth, and their $20 million. investment goals are met by maximizing value in every assignment and by providing the finest in the Based in Miami, them our team has advisors completed in industry. excess of $9.4
billion in transactions, representing over 153 apartment buildings and 52,800 unitsand throughout South Florida. By any the Based in Miami Ft. Lauderdale, our team hasmetric, completed CBRE Multi-Housing teamin is transactions, consistently ranked #1 in over multiin excess of $9.4 billion representing 200 nationally. There is a housing buildings sales in and South Florida apartment 52,800 units and throughout South Florida. reason continues to setMulti-Housing the bar as the industry With By any CBRE metric, the CBRE team isleader. consistently the most powerful platform in the marketplace, we provide you ranked #1 in multi-housing sales in South Florida and our clientsaccess the most experienced and specialized nationally. With theto most powerful platform inhighly the marketplace, professionals in the industry. This knowledge market dominant performance we provide unrivaled market to our clients. provides unrivaled market knowledge to our clients.

625 SANTANDER, CORAL GABLES :: 16 UNITS KEY FACTS

CBRE Multi-Housing Private Client Group (PCG) focuses specifically in the sales, marketing and financing of multihousing properties on behalf of private investors Specialize between $1 to $20 million in deal size CBRE sells more multi-housing properties in South Florida and throughout the world than any other firm

The of seven The CBRE CBRE Multi-Housing Multi-Housing team team in in South South Florida Florida consists is comprised of members. The team provides a fully integrated platform for selling investment sales and debt & equity finance professionals. Working and financing properties. allows our clients seamlessly in multi-housing a fully integrated global This service offering allowsto evaluate allto alternative investment strategies.Whether youyou are our clients evaluate all alternative strategies. Whether looking to sell, finance or refinance your multi-housing are looking to buy, sell, finance or refinance your multiproperty, CBRE offers the broadest scope of services to provide housing property, CBRE offers the broadest scope of services to you the most comprehensive solutions in South Florida provide you complete capitaldisposition market solutions anywhere around and anywhere around the globe. the globe.
There is no other platform in the industry that can source There is no other platform in the industry that can source buyers as efficiently and effectively as CBRE. With 450 offices buyers as efficiently and effectively as CBRE. Our South Florida around the world, the CBRE platform is truly global. Its size and database includes detailed owner contact information for every depth of local, national and foreign investors, enables CBRE to multi-housing property over 10 units in South Florida. Coupled gather and share client specific intelligence, transactional data, with 450 offices in more than 50 countries around the world, the research and emerging marketplace trends. CBREs collaboration CBRE platform is truly global providing access to the most local, across geographic boundaries allows us to source buyers in a national and international investors in the industry. manner unlike any other organization in the industry.
For moreWeaver information, please Richard contact Tarquinio Calum T. 305.381.6439 T. 561.393.1675 Calum Weaver Richard Tarquinio calum.weaver@cbre.com richard.tarquinio@cbre.com T. +1 954 331 1763 T. +1 954 331 1764 calum.weaver@cbre.com 8 richard.tarquinio@cbre.com

Market dominant performance offers unrivaled market knowledge to our clients

Database: Offering sellers unparalleled exposure to over 13,000 South Florida multi-housing owners and investors. Through the CBRE Private Client Group nationally shared database, we have access to over 150,000 investors and over 34,000 brokers located in other markets throughout the world

Outstanding local, national and international relationships with investors

Established track record for achieving top-of-the market pricing

Full in-house support, including: financial analysis, marketing, production of offering materials, websites, and graphics