1PRG

Phoenix Realty Group

FOA Fall Global Summit

2PRG

Residential Real Estate

For-sale

Rental Multi Family

Single Family

Urban

Suburban

Market Rate

Low IncomeIncome Restricted

Demographic Targeted

Existing

New Construction

3PRG

PRG Institutional Investors

4PRG

Behind Today’s Housing MarketsThe Role of Leverage

U.S. Public/Private Debt as a % of GDP – 1920 to Date

U.S. Savings Rate - 1959 to Date

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Jan

-59

Jan

-62

Jan

-65

Jan

-68

Jan

-71

Jan

-74

Jan

-77

Jan

-80

Jan

-83

Jan

-86

Jan

-89

Jan

-92

Jan

-95

Jan

-98

Jan

-01

Jan

-04

Jan

-07

Public/Private Deleveraging• Balance Sheet driven “Reset” following

highest levels debt in U.S. history.

U.S. Consumer Savings Rate• Reversing several decades long trend

for the first time in 50 years.

5PRG

U.S. Median Housing Prices - 1980 to Date

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

$250,000

$275,000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

Year

Pri

ce

Inflation-adjusted house prices

Nominal house prices

Today’s Housing MarketsHousing Prices Down 30%

6PRG

Today’s Housing MarketsRental Occupancy Below 90% - Reduced Rents

U.S. Historical Rental Market Data

$0

$200

$400

$600

$800

$1,000

$1,200

1980

1985

1990

1995

2000

2005

2009

Ren

t

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Vac

ancy

%

U.S. Median Rent

U.S. Rental Vacancies

7PRG

20 Year Historical U.S. Housing Completions

0K

100K

200K

300K

400K

500K

600K

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Year

# o

f U

nit

s

AFFORDABLE

MULTIFAMILY

Today’s Housing MarketsMultifamily Production at 20-year Low

8PRG

Today’s Housing MarketsMultifamily Pricing Returns to 2001 Spreads

Multifamily Cap Rates - Average Spread to U.S. 10-Yr Treasuries

358bps 354bps372bps

273bps

241bps

147bps

180bps

300bps

372bps

0bps

50bps

100bps

150bps

200bps

250bps

300bps

350bps

400bps

2001 2002 2003 2004 2005 2006 2007 2008 2009

Sp

read

Avg. Spread for MF Cap Rates

9PRG

The Future for Multifamily

• Supply is Limited– Starts at historical lows– Rising interest rates will

suppress development

• Demand is Brewing– Occupancy at historical lows– Economic recovery and

“Millennial” generation on horizon

10PRG

Target Product Types

Stabilized Rental Broken Condos

Failed Condo Conversions/High-vacancy Rental

New Development for Rental

11PRG

Stabilized Rental

Baltimore Apartments

La Mesa, CA406 Units

12PRG

Stabilized Rental

Baltimore Apartments

La Mesa, CA406 Units

13PRG

Broken Condos

Trio Apartments

Palisades Park, NJ71 Units

14PRG

Broken Condos

Trio Apartments

Palisades Park, NJ71 Units

15PRG

Failed Condo Conversions

Laguna Bay Apartments

Naples, FL368 Units

16PRG

Failed Condo Conversions

Laguna Bay Apartments

Naples, FL368 Units

17PRG

Distressed Owners and Half-Builts

18PRG

Investment Structures

Public Funds Private Funds

Direct Ownership Partnerships

19PRG

Phoenix Realty Group

FOA Fall Global Summit