Tampa Bay Land Market Overview - Q2-2018

Erhardt’s Tampa Bay Land Market Overview TAMPA BAY MULTIFAMILY MARKET OVERVIEW AxioMetrics, Inc. Market Performance Summary, Q1-2018, Tampa – St. Petersburg – Clearwater, Florida Metropolitan Statistical Area Apartment Performance Effective rent increased 0.6% from $1,149 in 4Q17 to $1,156 in 1Q18, which resulted in an annual growth rate of 3.4%. Annual effective rent growth is forecast to be 2.9% in 2019, and average 2.6% from 2020 to 2022. Annual effective rent growth has averaged 2.6% since 3Q96. The market’s annual rent growth rate was above the national average of 2.5%. Out of the 120 markets ranked by Axiometrics nationally, Tampa-St. Petersburg-Clearwater, FL Metro Area was 40th for quarterly effective rent growth, and 33rd for annual effective rent growth for 1Q18. The market’s occupancy rate increased from 95.0% in 4Q17 to 95.2% in 1Q18, and was up from 94.8% a year ago.

The market’s occupancy rate was above the national average of 94.5% in 1Q18. For the forecast period, the market’s occupancy rate is expected to be 95.3% in 2019, and average 94.8% from 2020 to 2022. The market’s occupancy rate has averaged 94.0% since 3Q95.

Market Survey Results and Forecasts

Sequential

Month

Annual

2Q17 3Q17 4Q17 1Q18 May-18 2016

2017 2018F 2019F 2020F 2021F 2022F

Effective Rent Per Unit

$1,135 $1,150 $1,149 $1,156 $1,190 $1,107 $1,138 $1,175 $1,209 $1,234 $1,271 $1,306

Per Sq. Ft

$1.20 $1.21

$1.21

$1.22 $1.26 $1.17

$1.20 $1.24 $1.28 $1.30 $1.34 $1.38

Effective Rent Growth - Annually Effective Rent Growth - Quarterly

2.5% 2.4% 2.9% 3.4% 4.9% 5.6% 2.8% 3.2% 2.9% 2.1% 3.0% 2.7%

1.5% 1.3% -0.1% 0.6%

Occupancy Rate

95.0% 95.2%

95.0% 95.2% 95.8% 95.3% 95.0%

95.4% 95.3% 94.8% 95.0% 94.5%

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

-0.6% -0.2% 0.3% 0.4% 0.9% -0.2% -0.3% 0.5% -0.1% -0.6% 0.3% -0.5%

0.2% 0.2% -0.2% 0.2%

$-5.49 $-4.01

$-5.33 $-5.01

$-2.35 $-4.46 $-5.51

As a % of Asking Rent

-0.5% -0.4% -0.5% -0.4%

-0.2% -0.4%

-0.5%

Demand and Supply

According to the Bureau of Labor Statistics, job growth in Tampa-St. Petersburg-Clearwater, FL Metro Area was 2.3% in May 2018, reflecting 30,400 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 Metro Area’s job growth to be 2.1% in 2019, with 28,020 jobs added. Job growth is expected to average 1.1% from 2020 to 2022, with an average of 15,003 jobs added each year.

On the supply side, permits for 4,515 multifamily units were issued in the 12 months ending in April 2018, down -974 units from the prior year’s sum. In terms of total residential housing, 17,583 units were permitted in the 12 months ending April 2018, a decrease of -697 units from the prior year’s total.

Multifamily Absorption and Supply

Annual

3Q17

Annual Forecast

2015 5,620 3,987

2016 1,728 4,704

2017 Market National

2018F 2019F 2020F 2021F 2022F

Total Units Absorbed

5,199 4,646

5,387

342,414 6,801

2,099 3,235

919

3,670 2,460

922

New Supply

4,544 374,265

5,284

3,066

3,830

Inventory Growth

1.3%

1.5%

1.5%

1.5%

1.5%

1.6%

1.0%

0.9% 0.7%

1.1%

8