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ROCKAPARTMENT ADVISORS

Rock is the preeminent Apartment brokerage firm in the mid-south with over $1.5 billion in sales

I N T R O D U C T I O N 1

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Why invest in Apartments?

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Three Measures

INFLUENCERS

FUNDAMENTALS

TRANSACTIONS

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Economic Influencers for Apartment Investors Focus

University

Demographics

Housing Shortage

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5 T U S C A L O O S A A P A R T M E N T M A R K E T

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6 T U S C A L O O S A A P A R T M E N T M A R K E T

Enrollment and On-Campus Housing

School Year

Total Enrollment

Number Change

Percent Change

Undergraduate Enrollment

UG % Change

Graduate Enrollment

Grad % Change

Freshman Living on Campus

UG Living on Campus

2003 20,290 15888 4402 70.40% 23.70%

2004 20,929 639 3.15% 16568 4.28% 4361 -0.93% 72.00% 25.00%

2005 21,793 864 4.13% 17550 5.93% 4243 -2.71% 70.00% 26.00%

2006 23,838 2045 9.38% 19471 10.95% 4367 2.92% 91.00% 29.00%

2007 25,544 1706 7.16% 21081 8.27% 4463 2.20% 91.00% 29.00%

2008 27,014 1470 5.75% 22341 5.98% 4673 4.71% 88.80% 29.80%

2009 28,699 1685 6.24% 23700 6.08% 4999 6.98% 90.70% 29.40%

2010 30,232 1533 5.34% 24884 5.00% 5348 6.98% N/A 29.70%

2011 31,747 1515 5.01% 26234 5.43% 5513 3.09% N/A N/A

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7 T U S C A L O O S A A P A R T M E N T M A R K E T

• 90% occupancy for total rental market prior to storm (of approximately 25,000 units)

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8 T U S C A L O O S A A P A R T M E N T M A R K E T

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Alabama Demographics of 20-34 year olds per MSA - 2011

City20-34 year

oldsTotal

PopulationPercentage

Tuscaloosa 23,906 77,906 30.69%

Birmingham 228,025 1,135,203 20.09%

Huntsville 85,348 430,970 19.8%

Montgomery 80,747 397,663 21.27%

Mobile 86,029 416,462 20.66%

T U S C A L O O S A A P A R T M E N T M A R K E T

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11 T U S C A L O O S A A P A R T M E N T M A R K E T

FUNDAMENTALS

MATTER

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T-TOWN SNAPSHOT

• Tight supply

• Growth in Income

• Supply Coming

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Submarket Occupancy Rate

Birmingham 92.3%

Huntsville 92.1%

Mobile 91.4%

Montgomery 89.7%

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Occupancy Rates Mid Year 2012

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Average Occupancy

96.4%

96.5%

96.6%

96.7%

96.8%

96.9%

97.0%

Conventional Student TUSCALOOSA

96.95%

96.6%

96.9%

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Source: David Wilson; Rock Apartment Advisors

New Apartment Unit Deliveries

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Tuscaloosa New Construction/Pipeline

Bluffs at Waterworks

115 Greensboro

East Edge

Standard at Tuscaloosa

Townhomes at Metalworks

Boulevard Lofts

Riverwalk Place

Under Construction

Future Starts/ Speculative

Future Starts/ Planned

T U S C A L O O S A A P A R T M E N T M A R K E T

DENIED

Lofts at City CenterRock Point

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Recent Sales

T U S C A L O O S A A P A R T M E N T M A R K E T

Name: Inverness

Price (2011): $12,500,000

Note Sale

208 units

$60,100 per unit

*Sold in December 2005 for $22,750,000/ $109,375 per unit*

Name: Sterling Crimson

Price: $49,850,000

$71,214 per bed

700 beds

6.5 Cap

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Capital and Cap Rates

T U S C A L O O S A A P A R T M E N T M A R K E T

Cap rates have followed debt rates• Class A Low to Mid 6

• Class B Mid 6 to Low 7

• Class C 9 up

New capital formations on 50% of deals today

Debt Standards higher but still available for development and acquisition

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Questions?T h a n k y o u