Q1-2019_B_Erhardt_Tampa_Bay_Area_Land

Erhardt’s Tampa Bay Land Market Overview

TAMPA BAY MULTIFAMILY MARKET OVERVIEW AxioMetrics, Inc. Market Performance Summary, Q4-2018, Tampa– St. Petersburg–Clearwater, Florida Metropolitan Statistical Area Apartment Performance Effective rent increased 0.4% from $1,173 in 3Q18 to $1,180 in 4Q18, which resulted in an annual growth rate of 4.4%. Annual effective rent growth is forecast to be 3.9% in 2019, and average 2.5% from 2020 to 2022. Annual effective rent growth has averaged 2.7% since 2Q96. The market’s annual rent growth rate was above the national average of 3.3%. Out of the 150 markets ranked by Axiometrics nationally, Tampa-St. Petersburg-Clearwater, FL was 87th for quarterly effective rent growth, and 32nd for annual effective rent growth for 4Q18. The market’s occupancy rate decreased from 96.1% in 3Q18 to 95.5% in 4Q18 but was up from 95.3% a year ago. The market’s occupancy rate was at the national average of 95.5% in 4Q18. For the forecast period, the market’s occupancy rate is expected to be 94.7% in 2019, and average 94.0% from 2020 to 2022. The market’s occupancy rate has averaged 93.9% since 2Q96.

Market Survey Results and Forecasts

Sequential Annual 1Q18 2Q18 3Q18 4Q18 Dec-18 2016 2017 2018 2019F 2020F 2021F 2022F 2022F Month

Effective Rent Per Unit

$1,135 $1,164 $1,185 $1,180 $1,179 $1,084 $1,117 $1,166 $1,205 $1,238 $1,261

$1,297 $1,323

Per Sq. Ft.

$1.21

$1.24 $1.27 $1.26 $1.27

$1.17 $1.20 $1.25 $1.29 $1.33 $1.35 $1.39 $1.42

Effect Rent Growth - Annually Effective Rent Growth - Quarterly

3.5% 4.4% 4.9% 4.4% 4.7% 4.6% 2.9% 4.4% 3.9% 2.2% 2.3% 3.0% 2.9%

0.7% 2.5% 1.8% -0.4% 95.3%

Occupancy Rate

95.5% 95.9% 96.1% 95.5% 0.2% 95.1% 95.3% 95.8% 95.3% 94.6% 94.3% 94.3% 93.9%

Occupancy Change - Annually Occupancy Change - Quarterly Economic Concessions Concession Value

0.3% 0.6% 0.5% 0.2%

-0.7% 0.3% 0.2% -0.7% -0.7% 0.1% -0.2% -0.2%

0.2% 0.4% 0.2% -0.6%

$41.00 $29.00 $26.00 $46.00 $85.00 $27.00 $31.25 $35.50

As a % of Asking Rent

3.7% 2.6% 2.2% 3.9% 7.2% 2.6% 2.9% 3.1%

Demand and Supply According to the Bureau of Labor Statistics, job growth in Tampa-St. Petersburg- Clearwater, FL was 1.7% in November 2018, reflecting 23,500 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.6%. Axiometrics forecasts Tampa-St. Petersburg-Clearwater, FL’s job growth to be 2.4% in 2019, with 32,518 jobs added. Job growth is expected to average 0.8% from 2020 to 2022, with an average of 11,317 jobs added each year. On the supply side, permits for 3,274 multifamily units were issued in the 12 months ending in October 2018, down -2,215 units from the prior year’s sum. In terms of total residential housing, 17,376 units were permitted in the 12 months ending October 2018, a decrease of -904 units from the prior year’s total. Multifamily Absorption and Supply Annual 4Q18

Erhardt Comment: All new suburban garden product needs $1.45+ SF rents to make sense.

Annual Forecast

2015 2016 2017 Market

National 292,412 300,796

2018 5,567 5,390

2019F 2020F 2021F 2022F

Total Units Absorbed

5,734 1,402

4,778

4,771 5,177

2,255 4,256

2,483 4,562

4,199 4,183

2,825 3,577

New Supply

3,468 3,656 4,443

Inventory

1.5% 1.4% 1.8% 1.8%

1.6%

2.2%

1.7%

1.8%

1.6%

1.3%

8