Research & Forecast Report

NASHVILLE | MULTIFAMILY3rd Quarter 2019

MARKET SURVEY RESULTS AND FORECASTSSEQUENTIAL MONTH ANNUAL

4Q18 1Q19 2Q19 3Q19 Sep-19 2017 2018 2019F 2020F 2021F 2022F 2023F

EFFECTIVE RENT PER UNIT $1,200 $1,205 $1,235 $1,269 $1,281 $1,170 $1,191 $1,240 $1,284 $1,317 $1,363 $1,404

Per Sq. Ft $1.26 $1.27 $1.31 $1.34 $1.36 $1.23 $1.25 $1.31 $1.36 $1.39 $1.44 $1.49

Annual Effective Rent Growth 2.8% 3.3% 3.8% 4.8% 5.4% 0.4% 2.8% 4.7% 3.3% 3.1% 3.7% 3.1%

Quarterly Effective Rent Growth -0.7% 0.5% 2.5% 2.7%

OCCUPANCY RATE 94.6% 94.6% 95.6% 96.4% 96.2% 94.6% 94.5% 95.6% 95.1% 94.1% 94.6% 94.6%

Annual Occupancy Change 0.1% 0.5% 0.9% 1.1% 1.1% -0.6% 0.1% 1.5% -1.9% 0.0% 0.4% -0.1%

Quarterly Occupancy Change -0.5% -0.1% 1.1% 0.8%

ECONOMIC CONCESSIONS

Concession Value $50.00 $56.00 $58.00 $50.00 $92.00 $52.00 $55.00

As a % of Asking Rent 4.2% 4.6% 4.8% 4.0% 7.1% 4.7% 4.8%Source: AXIOMetrics, RCA

ANNUAL EFFECTIVE RENT GROWTH ANNUAL OCCUPANCY RATE

RECENT SALES

Date Property Name Address City Units Year Built Price Price/Unit

Aug-19 Emblem Apartments 427 Nichol Mill Ln Franklin 361 2017 $88,000,000 $243,767

Aug-19 Novel Lockwood Glen 500 Cobert Lane Franklin 239 2017 $68,500,000 $286,611

Aug-19 Novel Lockwood Glen 1001 Archdale Drive Franklin 239 2018 $68,500,000 $286,611

Sep-19 Arbors of Brentwood 100 Brentwood Place Nashville 346 1986 $62,250,000 $179,913

Jul-19 Grand Reserve 3085 Commonwealth Drive Spring Hill 290 2015 $60,000,000 $206,897

Sep-19 Cambridge at Hickory Hollow 660 Bell Road Antioch 360 1997 $53,350,000 $148,194

Aug-19 Hayes House Hillsboro Village 2101 Portland Avenue Nashville 201 1924 $51,300,000 $255,224

Aug-19 Ashton Creek Farms 14531 Old Nashville Highway La Vergne 250 2014 $29,200,000 $173,810

SUPPLY AND DEMAND

MARKET EMPLOYMENT AND PERMITTING

ANNUAL AUG-19 ANNUAL FORECAST

2016 2017 2018 Market National 2019F 2020F 2021F 2022F 2023F

EMPLOYMENT (000S) 949.9 982.0 1,012.1 1,035.6 151,517.0 1,034.8 1,047.4 1,053.3 1,067.9 1,082.5

Job Gain (000s) 35.3 32.2 30.1 19.1 2,064.0 22.7 12.6 5.9 14.6 14.6

Job Growth (%) 3.9% 3.4% 3.1% 1.9% 1.4% 2.2% 1.2% 0.6% 1.4% 1.4%

TOTAL RESIDENTIAL PERMITTING 19,379 19,292 17,957 17,676 894,674 19,610 15,310 15,568 16,254 15,550

Relative Change 8.8% -0.4% -6.9% 9.3% -1.2% 9.2% -21.9% 1.7% 4.4% -4.3%

Single Family Units Permitted 12,055 12,625 12,296 10,705 544,241

Relative Change 11.5% 4.7% -2.6% -3.8% -3.6%

Multifamily Units Permitted 7,175 6,499 5,566 6,920 328,042

Relative Change 4.3% -9.4% -14.4% 39.9% 2.8%

Multifamily as a % of Total 37.0% 33.7% 31.0% 39.1% 36.7%

DEMAND/SUPPLY RATIO

Job Gain / Total Residential Units Permitted 2.0 1.7 1.6 1.2 2.3 1.3 0.6 0.4 0.9 0.9

Job Gain / Single Family Units Permitted 3.3 2.7 2.4 1.7 3.7

Job Gain / Multifamily Units Permitted 5.1 4.5 4.6 3.9 6.5

MULTIFAMILY ABSORPTION AND SUPPLY

ANNUAL 3Q19 ANNUAL FORECAST

2016 2017 2018 Market National 2019F 2020F 2021F 2022F 2023F

TOTAL UNITS ABSORBED 6,463 6,317 5,038 4,116 273,742 4,620 3,227 4,176 2,194 2,607

NEW SUPPLY 7,384 7,801 5,642 3,612 251,993 3,267 6,346 4,429 1,624 2,931

INVENTORY GROWTH 5.6% 5.6% 3.9% 2.0% 1.2% 2.2% 4.1% 2.8% 1.0% 1.8%

According to the Bureau of Labor Statistics, job growth in Nashville was 1.9% in August 2019, reflecting 19,100 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.4%.

RealPage forecasts Nashville’s job growth to be 1.2% in 2020, with 12,613 jobs added. Job growth is expected to average 1.1% from 2021 to 2023, with an average of 11,683 jobs added each year.

On the supply side, permits for 7,743 multifamily units were issued in the 12 months ending in August 2019, up 2,177 units from the prior year’s sum. In terms of total residential housing, 19,953 units were permitted in the 12 months ending August 2019, an increase of 1,996 units from the prior year’s total.

ANNUAL EMPLOYMENT GROWTH MF SUPPLY AND INVENTORY GROWTH

2 : Nashville Research & Forecast Report | 3Q 2019 | Multifamily | Colliers International

PROJECTS COMPLETED IN THE LAST 12 MONTHS

# NAME ADDRESS DEVELOPER UNITS STORIES ESTIMATED DELIVERY

1 Capitol View I 1015 Nelson Merry Street Northwood Ravin, LLC 378 6 Jan-19

2 Solis North Gulch 600 11th Avenue North Clarion Partners 271 7 Oct-18

3 The Griff 1390 Adams Street Tribridge Residential 255 5 Sep-19

4 Broadstone Gulch 803 Division Street Alliance Residential Company 238 14 Dec-18

1,142

PROJECTS UNDER CONSTRUCTION

# NAME ADDRESS DEVELOPER UNITS STORIES ESTIMATED DELIVERY

1 Kenect Nashville 1815 Division Street Akara Partners 420 21 Jun-20

2 The Place at Fifth + Broadway 601 Commerce Street Oliver McMillan 386 34 May-20

3 West End Residential 2004 & 2012 West End Avenue CA Ventures 358 25 Jul-21

4 805 Lea Avenue 805 Lea Avenue AMG Lea, LLC 354 30 Oct-21

5 Broadstone Stockyard Flats 901 2nd Avenue North Alliance Residential Company 342 5 Nov-20

6 Knox at MetroCenter 101 Athens Way Embrey Management Services 322 4 Feb-21

7 1200 Broadway 1200 Broadway Endeavor Real Estate Group 313 26 Dec-19

8 908 Division 908 Division Street Greystar 300 16 Aug-21

9 Sixth South 516 6th Avenue South The Beach Company 299 11 Jun-21

10 Accent Cumberland 541 Great Circle Road Westplan Investors Inc 282 4 Nov-20

11 LC SoBro 702 2nd Avenue South Lifestyle Communities 271 7 May-20

12 83 Freight 2150 Byrum Avenue FBMC Investments 87 3 Feb-20

13 Moxy Hotel and Residence 1911 Belcourt Avenue Summit Management Corporation 47 6 Jan-20

3,781

MULTIFAMILY URBAN DEVELOPMENT

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3

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41

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34

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7

8

10

12

9 11

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3 : Nashville Research & Forecast Report | 3Q 2019 | Multifamily | Colliers International

REGIONAL AUTHORMULTIFAMILY ADVISORY GROUP | SOUTH

4 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International4 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>

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Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>

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Copyright © 2019 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

COLLIERS INTERNATIONAL NASHVILLE 615 3rd Avenue South | Suite 500 | Nashville, TN +1 615 850 2700 | colliers.com/nashville

IDENTIFIED SUPPLY

SUBMARKET DELIVERY SCHEDULE

PIPELINE DELIVERY SCHEDULE PIPELINE LEASE UP TRENDUnits Absorbed Asking Rent Effective Rent

Top Submarkets 2017 2018 2019 Total Totals PPM Per Unit PSF Per Unit PSF Central Nashville 2,852 1,617 575 5,044 1,125 15 $2,246 $2.62 $2,074 $2.41

Franklin/Brentwood 878 714 650 2,242 615 15 $1,717 $1.71 $1,656 $1.65

Murfreesboro/Smyrna 808 600 620 2,028 309 10 $1,340 $1.32 $1,257 $1.24

Sumner County 0 981 377 1,358 372 9 $1,244 $1.19 $1,156 $1.11

West Nashville 520 790 622 1,932 791 16 $2,224 $2.29 $1,981 $2.03

Other 2,498 910 203 3,611 587 9 $1,436 $1.51 $1,373 $1.44

Nashville, Davidson, Murfreesboro, Franklin, TN

7,556 5,612 3,047 16,215 3,799 12 $1,755 $1.87 $1,630 $1.73

*Based on 2019 deliveries *Trend based on a trailing 12 month period

As of October 9, 2019, RealPage has identified 3,047 apartment units scheduled for delivery in 2019, of which, 2,048 have been

delivered. As a comparison, there were 5,612 apartment units delivered in 2018. Properties delivered to the market in the last 12

months have achieved an average asking rent of $1,755 per unit, or $1.87 per square foot. Effective rent has averaged $1,630, or

$1.73 per square foot, resulting in an average concession value of $184.35. As a comparison, existing properties in the market had

an average asking rent of $1,276 per unit ($1.35 per square foot) and an average effective rent of $1,269 per unit, or $1.34 per square

foot, in 3Q19. Concessions for existing properties averaged $50.00.

IDENTIFIED UNIT DELIVERIES LEASE UP PERFORMANCE

John M. AshleyMultifamily Advisor+1 615 850 2716john.ashley@colliers.com

Patrick Inglis, CFA Senior Vice President +1 615 850 2766 patrick.inglis@colliers.com

Taylor C. IrwinMultifamily Advisor+1 615 850 3306taylor.irwin@colliers.com

Katie Lester CPRC

Director of Research+1 615 850 2758katie.lester@colliers.com