RubinBrown Apartment Stats 2012

‘12 APARTMENT STATS

A Publication of Rubinbrown LLP

Welcome

RubinBrown is pleased to present the 2012 Apartment Statistical Analysis, an annual survey compiled by the Real Estate Services Group.

Each year, data is collected from our clients, as well as other contacts and referrals within the industry, to comprise averages in a variety of markets within the United States.

The accompanying statistical information includes operational data for 2011 and represents 407 apartment projects in 30 states. While these averages are representative of a smaller pool of projects, the trends are usually consistent with those experienced at the national level.

If you have questions about the content of this publication, please contact us (see page 16 for contact information).

RubinBrown Real Estate Services Group

Contents 1 Executive Summary 3 Comparison of Operations 4 Government Assisted 8 Government Assisted by Region 10 Government Assisted by Project Size 12 Market Rate 14 Low Income Tax Credit Projects 16 RubinBrown Real Estate Services Group

@RubinBrownRE www.RubinBrownRealEstate.com

Executive Summary

Industry Update Capitalizing on 2010’s multifamily housing industry economic turnaround, 2011’s portfolio performance showed continued improvement in a variety of operational and financial areas. Although faced with unemployment levels that remain fairly high and household creation that is stagnant, apartment owners have benefited from an increased pool of renters, which have aided in improving occupancy levels to highs that haven’t been seen in years. Likewise, according to the National Association of Realtors, it is expected that 2012 will bring some of the all-time lowest vacancy rates, while rental growth is anticipated to be anywhere from 3 and 7 percent. One major source of this forecasted improvement relates to overall renter demographics. Generation Y (those individuals born between 1982 and 1995) have shown a strong propensity to rent given the current wage and mortgage lending situations. Moreover, the multifamily rental market related student and campus housing as well as market rate rentals is expected to be very healthy in the coming years. However, a word of caution as with all real estate trends—these Generation Y individuals will eventually cycle out as the lending industry and compensation levels improve. Similarly, the continued decline in the homeownership rate has added to the growing renter population. The 2011 homeownership rate again dropped roughly 1 percent from 2010 levels, which were down over 2 percent from 2009 levels. Those hit hardest by this rate decrease were minorities, who alone experienced a 1 percent decrease in homeownership on average, according to the Department of Housing and Urban Development. Yet, as the market shifts to improve home values and, in turn, homeownership becomes more desirable, multifamily housing’s growth will once again start to slow. In response to this increased rental demand, multifamily housing permits, starts and completions have risen significantly in 2011 as well as into the first quarter of 2012. Indeed, permits alone in late 2011/early 2012 have shown a 61 percent surge over late 2010/early 2011. Yet, it is important to note that the absorption for the new apartment units has slowed approximately 64% from late 2010 to late 2011, which seems contradictory to demand and the increased renter pool. Much of this could be attributed to the fact that while more individuals are looking to rent, they are also looking to share the costs by living with roommates and family members. Likewise, analysts insist that oversupply is not a concern in the near term, but could become more apparent in some geographic markets by 2013.

With the sluggish job growth, tightened credit conditions and increased occupancy rates, apartment owners are finding themselves with the pricing edge and overall ability to strike while the iron is hot on rent increases. In fact, some owners have even welcomed move-outs to allow them to be released from old lease terms and to begin anew with higher monthly rents going into 2012. But, in the meantime, apartment owners can expect to keep occupancy high and cash flow strong in 2012 given the market conditions. Further, owners have been enhancing property values and curb appeal via substantial apartment upgrades and repairs, which had been delayed in prior years due to weakened economic performance. Market Trends 2011 has seen a lending arena that has improved compared to a few years ago. Indeed, banks have been focusing on the apartment market once again. The decline of vacancy rates, coupled with increased rental demand, has lured financial institutions to place monies in investments that can provide a “safety net” during times of economic uncertainty. Likewise, the multifamily market has also performed better than expected in regards to the timing of selling off distressed assets–another attractive feature to many lending institutions. In keeping with some of the trends noted in the latter half of 2010, Fannie Mae, Freddie Mac and the Federal Housing Administration concentrated lending efforts on preservation projects during 2011, offering low all-in rates. Similarly, Freddie Mac has enticed apartment owners and developers with bond credit enhancements, which has helped to spark interest and opportunity in the otherwise previously diminished area of tax-exempt bond financing. Likewise, the same characteristics that are attracting lenders back into the multifamily market are making a comparable impact on investors. As mentioned above, factors such as improved occupancies, decreased vacancies and surging demand are driving investors to grab deals as they come to market. Yet, most investors are focusing on properties with lower and middle rent price points rather than throwing monies at luxury units. Equity pricing for affordable multifamily housing investments has also rebounded, boasting mid-to-upper ninety cents per dollar of credit on the coasts. And, in some cases, deals have closed with pricing over a dollar per dollar of credit earned. Most often, this has been driven by financial institution investors looking to satisfy their community reinvestment appetite with quality properties.

RubinBrown Apartment Stats 2012 | 1

Executive Summary

Fueled by investor need and demand for investment, sales activity for 2011 was equally strong, with transactions growing approximately 30% from 2010 to 2011. Garden style properties have contributed to most of the volume. And, as expected, pricing per unit continues to rise as cap rates have steadily fallen since 2010. Of course, now analysts are questioning just how low cap rates can drop. Most believe the trend will not last. However, given the current industry trends involving rental growth, falling vacancies, rising demand and overall investor need, the environment points to low cap rates into the near future. Conclusion 2011’s robust industry performance has left market analysts, apartment owners and other stakeholders optimistic for 2012 performance. With sustained rent increases, lower vacancies and rising permits, this year is expected to experience continued success and end on an even higher note than the previous year. The continued recession felt in the single family housing market as well as the current shift in the rent versus buy perspective remain impactful on the industry’s recovery. With rising demand and a sustained need for multifamily housing on the table, apartment owners have found themselves in prosperous position during 2011 and for the next few years. Dubbed “the Year of the Landlord”, many will find 2012 to be successful, as the multifamily housing market is the apparent place to be.

However, the industry does have some hazards looming on the horizon. Besides the potential threat of oversupply in the coming years, pending legislation could have a substantial effect on the industry’s turnaround–namely in the affordable housing and tax credit arenas. With tax reform imminent, probabilities are high that all multifamily stakeholders will feel the impact to some degree, whether through reduced credits, subsidies or deductions. Many proponents of the affordable housing market have continued to promote the strengths of the industry’s mission and overall community impact. Nonetheless, time will tell as future legislation and its effects lie in the hands of our Congressional leaders. RubinBrown invites you to utilize this study as a development and management tool to compare your financial operations to the operating results of your peers. This study also provides sound comparable data to utilize in formulating an acquisition model. Like all compilations of data, it will be most useful when carefully and properly interpreted. We sincerely thank everyone who took time to participate in RubinBrown’s survey.

2 | RubinBrown Apartment Stats 2012

Comparison of Operations

Government Assisted

Market Rate

Total Number of Projects

372

35

Average Project Age In Years

10.3

8.8

Average Number of Units

105

246

Averages Per Unit:

Monthly Rent

$721

$674

Square Feet

964

938

Rooms

4.32

4.20

Economic Occupancy

89.4%

88.6%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

40.0%

49.4%

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,653

$8.98

100.0%

$8,093

$8.63

100.0%

Less: Vacancy Loss

(704)

(0.73)

-8.1%

(438)

(0.47)

-5.4%

Collection Loss

(130)

(0.13)

-1.5%

(62)

(0.07)

-0.8%

(84)

(0.09)

-1.0%

(420)

(0.45)

-5.2%

Concession Loss

Rent Collected

7,735

8.03

89.4%

7,173

7.64

88.6%

469

0.49

5.4%

630

0.67

7.8%

Other Income

$8,204

$8.52

94.8%

$7,803

$8.31

96.4%

Total Income

Expenses

Salaries and Personnel

$892

$0.93

10.3%

$762

$0.81

9.4%

Administrative

454

0.47

5.2%

339

0.36

4.2%

Marketing

102

0.11

1.2%

104

0.11

1.3%

Management Fees

444

0.46

5.1%

319

0.34

4.0%

Utilities

831

0.86

9.6%

584

0.62

7.2%

Contract Services

958

0.99

11.1%

329

0.35

4.1%

Repair and Maintenance

517

0.54

6.0%

554

0.59

6.8%

Insurance

350

0.36

4.0%

233

0.25

2.9%

Real Estate Taxes

514

0.53

5.9%

647

0.69

8.0%

110

0.11

1.3%

76

0.08

0.9%

Other Taxes

Total Expenses

$5,172

$5.36

59.7%

$3,947

$4.20

48.8%

Net Operating Income Before Debt Service and Depreciation

$3,032

$3.16

35.1%

$3,856

$4.11

47.6%

Capital Expenditures

$285

$0.30

3.3%

$555

$0.59

6.9%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

RubinBrown Apartment Stats 2012 | 3

Government Assisted

2011

2010

2009

Total Number of Projects

372

363

226

Average Number of Units

105

115

129

Averages Per Unit:

Monthly Rent

$721

$673

$662

Square Feet

964

940

926

Rooms

4.32

4.34

4.19

Economic Occupancy

89.4%

86.9%

86.9%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

40.0%

37.8%

38.2%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,653

$8.98

100.0%

$8,078

$8.59

100.0%

$7,948

$8.58

100.0%

Less: Vacancy Loss

(704)

(0.73)

-8.1%

(826)

(0.88)

-10.2%

(825)

(0.89)

-10.4%

Collection Loss

(130)

(0.13)

-1.5%

(128)

(0.14)

-1.6%

(133)

(0.14)

-1.7%

Concession Loss

(84)

(0.09)

-1.0%

(105)

(0.11)

-1.3%

(82)

(0.09)

-1.0%

Rent Collected

7,735

8.03

89.4%

7,019

7.46

86.9%

6,908

7.46

86.9%

Other Income

469

0.49

5.4%

410

0.44

5.1%

331

0.36

4.2%

Total Income

$8,204

$8.52

94.8%

$7,429

$7.90

92.0%

$7,239

$7.82

91.1%

Expenses

Salaries and Personnel

$892

$0.93

10.3%

$801

$0.85

9.9%

$781

$0.84

9.8%

Administrative

454

0.47

5.2%

422

0.45

5.2%

367

0.40

4.6%

Marketing

102

0.11

1.2%

96

0.10

1.2%

89

0.10

1.1%

Management Fees

444

0.46

5.1%

406

0.43

5.0%

390

0.42

4.9%

Utilities

831

0.86

9.6%

717

0.76

8.9%

726

0.78

9.1%

Contract Services

958

0.99

11.1%

711

0.76

8.8%

744

0.80

9.4%

Repair and Maintenance

517

0.54

6.0%

613

0.65

7.6%

509

0.55

6.4%

Insurance

350

0.36

4.0%

298

0.32

3.7%

283

0.31

3.6%

Real Estate Taxes

514

0.53

5.9%

461

0.49

5.7%

471

0.51

5.9%

Other Taxes

110

0.11

1.3%

95

0.10

1.2%

107

0.12

1.4%

Total Expenses

$5,172

$5.36

59.7%

$4,620

$4.91

57.2%

$4,467

$4.83

56.2%

Net Operating Income Before Debt Service and Depreciation

$3,032

$3.16

35.1%

$2,809

$2.99

34.8%

$2,772

$2.99

34.9%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

4 | RubinBrown Apartment Stats 2012

Average Monthly Rent per Unit

2008

2007

$900 $1,000

226

194

130

122

$800

$721

$673

$662

$637

$630

$700

$637

$630

$600

937

934

4.20

4.28

$500

$400

89.0%

89.8%

$300

$200

$100

$0

2011

2010

2009

2008

2007

38.2%

40.8%

A

B

C

A

B

C

Economic Occupancy

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

$7,644

$8.16

100.0%

$7,553

$8.09

100.0%

89.8%

89.4%

89.0%

86.9%

86.9%

(630)

(0.67)

-8.2%

(551)

(0.59)

-7.3%

(111)

(0.12)

-1.4%

(118)

(0.13)

-1.6%

(107)

(0.11)

-1.4%

(100)

(0.11)

-1.3%

6,796

7.26

89.0%

6,784

7.26

89.8%

324

0.35

4.2%

449

0.48

5.9%

$7,120

$7.61

93.2%

$7,233

$7.74

95.7%

$770

$0.82

10.1%

$698

$0.75

9.3%

0%

371

0.40

4.8%

397

0.42

5.3%

2011

2010

2009

2008

2007

84

0.09

1.1%

88

0.09

1.2%

388

0.42

5.1%

381

0.41

5.0%

691

0.74

9.0%

668

0.72

8.8%

696

0.74

9.1%

659

0.71

8.7%

Gross Potential Rent vs. Net Operating Income per Square Foot

492

0.52

6.4%

468

0.50

6.2%

305

0.33

4.0%

322

0.34

4.3%

$3.16 $8.98

2011

495

0.53

6.5%

481

0.51

6.4%

$2.99 $8.59

2010

106

0.11

1.4%

117

0.13

1.5%

$2.99 $8.58

2009

$4,398

$4.70

57.5%

$4,279

$4.58

56.7%

$2.91 $8.16

2008

$2,722

$2.91

35.7%

$2,954

$3.16

39.0%

$3.16 $8.09

2007

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2012 | 5

Government Assisted

Expense Trends per Unit

$892

$801

Salaries and Personnel

$781

$770

$698

$556

$518

Administrative and Marketing

$456

$455

$485

$1,475

$1,324

Contract Services and Repairs & Maintenance

$1,253

$1,188

$1,127

$974

$854

Taxes and Insurance

$861

$906

$920

$0

$250

$500

$750 $1,000 $1,250 $1,500

2010

2009

2008

2011

2007

6 | RubinBrown Apartment Stats 2012

Government Assisted by Region

North

East/Northeast

Midwest

South/Southeast

Total Number of Projects

18

61

190

56

Average Project Age In Years

10.3

11.0

9.9

10.5

Average Number of Units

90

117

93

119

Averages Per Unit:

Monthly Rent

$769

$813

$681

$694

Square Feet

1,024

963

934

1,020

Rooms

4.51

4.55

4.33

4.72

Economic Occupancy

92.0%

91.7%

88.1%

86.3%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

30.2%

43.8%

37.6%

30.0%

A

B

C

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$9,227

$9.01 100.0%

$9,754 $10.13 100.0%

$8,168

$8.74 100.0%

$8,322

$8.16 100.0%

Less: Vacancy Loss

(523) (0.51)

-5.7%

(645) (0.67)

-6.6%

(774) (0.83)

-9.5%

(862) (0.85) -10.4%

Collection Loss

(175) (0.17)

-1.9%

(107) (0.11)

-1.1%

(116) (0.12)

-1.4%

(174) (0.17)

-1.9%

(32) (0.03)

-0.4%

(59) (0.06)

-0.6%

(80) (0.09)

-1.0%

(113) (0.11)

-1.4%

Concession Loss

Rent Collected

8,497

8.30

92.0%

8,943

9.29

91.7%

7,198

7.70

88.1%

7,173

7.03

86.3%

542

0.53

5.9%

556

0.58

5.7%

518

0.55

6.4%

302

0.30

3.5%

Other Income

$9,039

$8.83 97.9%

$9,499

$9.87 97.4%

$7,716

$8.25 94.5%

$7,475

$7.33 89.8%

Total Income

Expenses

Salaries and Personnel

$942

$0.92

10.2%

$866

$0.90

8.9%

$897

$0.96

11.0%

$917

$0.90

11.0%

Administrative

570

0.56

6.2%

378

0.39

3.9%

449

0.48

5.5%

491

0.48

5.9%

Marketing

87

0.08

0.9%

101

0.10

1.0%

95

0.10

1.2%

112

0.11

1.4%

Management Fees

488

0.48

5.3%

483

0.50

5.0%

410

0.44

5.0%

427

0.42

5.1%

Utilities

1,018

0.99

11.0%

881

0.91

9.0%

731

0.78

8.9%

828

0.81

10.0%

Contract Services

981

0.96

10.6%

865

0.90

8.9%

938

1.00

11.5%

938

0.92

11.3%

Repair and Maintenance

619

0.60

6.7%

509

0.53

5.2%

438

0.47

5.4%

528

0.52

6.3%

Insurance

331

0.32

3.6%

301

0.31

3.1%

338

0.36

4.1%

422

0.41

5.1%

Real Estate Taxes

1,078

1.05

11.7%

833

0.86

8.5%

424

0.45

5.2%

474

0.47

5.7%

199

0.19

2.2%

124

0.13

1.3%

91

0.10

1.1%

95

0.09

1.1%

Other Taxes

Total Expenses

$6,313

$6.15

68.4%

$5,341

$5.53

54.8%

$4,811

$5.14

58.9%

$5,232

$5.13

62.9%

Net Operating Income Before Debt Service & Depreciation $2,726

$2.68

29.5%

$4,158

$4.34

42.6%

$2,905

$3.11

35.6%

$2,243

$2.20

26.9%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

8 | RubinBrown Apartment Stats 2012

Monthly Rent per Unit

South/Southwest

West/Northwest

20

27

10.4

11.1

133

117

$712

$783

945

800

4.40

3.15

87.3%

96.6%

Net Operating Income per Square Foot

33.6%

35.7%

A

B

C

A

B

C

$8,540

$9.04 100.0%

$9,388 $11.73 100.0%

(729) (0.77)

-8.5%

(176) (0.22)

-1.9%

(169) (0.18)

-2.0%

(106) (0.13)

-1.1%

(188) (0.20)

-2.2%

(39) (0.05)

-0.4%

7,454

7.89

87.3%

9,067

11.33

96.6%

556

0.59

6.5%

243

0.30

2.5%

$8,010

$8.48 93.8%

$9,310 $11.63 99.1%

Economic Occupancy

$854

$0.90

10.0%

$879

$1.10

9.4%

418

0.44

4.9%

546

0.68

5.8%

140

0.15

1.6%

94

0.12

1.0%

441

0.47

5.2%

566

0.71

6.0%

1,056

1.12

12.4%

1,006

1.26

10.7%

977

1.03

11.5%

1,296

1.62

13.8%

499

0.53

5.7%

918

1.15

9.8%

343

0.36

4.0%

395

0.49

4.2%

421

0.45

4.9%

161

0.20

1.7%

166

0.18

1.9%

124

0.15

1.3%

$5,315

$5.63

62.1%

$5,985

$7.48

63.7%

$2,695

$2.85

31.7%

$3,324

$4.15

35.4%

West/Northwest

North

East/Northeast

South/Southwest

Midwest

South/Southeast

RubinBrown Apartment Stats 2012 | 9

Government Assisted by Project Size

0-50 Units

51-100 Units

101-150 Units

151-200 Units

Over 200 Units

Total Number of Projects

91

115

95

35

36

Average Project Age In Years

9.5

9.5

11.0

12.6

10.9

Average Number of Units

30

77

122

175

271

Averages Per Unit:

Monthly Rent

$709

$749

$762

$699

$664

Square Feet

1,034

897

917

953

974

Rooms

4.82

4.05

4.34

4.05

4.33

Economic Occupancy

88.4%

91.3%

91.2%

88.1%

82.6%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

29.8%

33.2%

38.3%

37.3%

37.9%

A

B

A

B

A

B

A

B

A

B

Revenues

Gross Potential Rent

$8,505

$8.23

$8,992 $10.02

$9,144

$9.97

$8,388

$8.80

$7,974

$8.19

Less: Vacancy Loss

(768) (0.74)

(612) (0.68)

(626) (0.68)

(766) (0.80)

(821) (0.84)

Collection Loss

(145) (0.14)

(101) (0.11)

(124) (0.13)

(134) (0.14)

(156) (0.16)

Concession Loss

(70) (0.07)

(69) (0.08)

(59) (0.06)

(100) (0.11)

(120) (0.12)

Rent Collected

7,522

7.28

8,210

9.15

8,335

9.10

7,388

7.75

6,877

7.07

Other Income

652

0.63

360

0.40

566

0.62

328

0.34

490

0.50

Total Income

$8,174

$7.91

$8,570

$9.55

$8,901

$9.72

$7,716

$8.09

$7,367

$7.57

Expenses

Salaries and Personnel

$1,051

$1.02

$996

$1.11

$912

$1.00

$817

$0.86

$777

$0.80

Administrative

683

0.66

582

0.65

501

0.55

353

0.37

283

0.29

Marketing

81

0.08

132

0.15

101

0.11

91

0.10

87

0.09

Management Fees

475

0.46

477

0.53

494

0.54

395

0.41

378

0.39

Utilities

801

0.77

884

0.98

906

0.99

790

0.83

730

0.75

Contract Services

884

0.85

1,002

1.12

1,006

1.10

1,035

1.09

836

0.86

Repair and Maintenance

692

0.67

595

0.66

579

0.63

518

0.54

322

0.33

Insurance

491

0.48

419

0.47

348

0.38

258

0.27

308

0.32

Real Estate Taxes

452

0.44

513

0.57

532

0.58

482

0.51

529

0.54

Other Taxes

129

0.12

128

0.14

117

0.13

99

0.10

87

0.09

Total Expenses

$5,739

$5.55

$5,728

$6.38

$5,496

$6.01

$4,838

$5.08

$4,337

$4.46

Net Operating Income Before Debt Service and Depreciation $2,435

$2.36

$2,842

$3.17

$3,405

$3.71

$2,878

$3.01

$3,030

$3.11

Capital Expenditures

$302

$0.29

$224

$0.25

$185

$0.20

$269

$0.28

$209

$0.21

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

10 | RubinBrown Apartment Stats 2012

Market Rate

2011

2010

2009

Total Number of Projects

35

20

14

Average Number of Units

246

238

169

Averages Per Unit:

Monthly Rent

$674

$763

$809

Square Feet

938

932

823

Rooms

4.20

4.30

4.37

Economic Occupancy

88.6%

82.8%

87.7%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

49.4%

45.5%

47.5%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,093

$8.63

100.0%

$9,153

$9.82

100.0%

$9,707

$11.80

100.0%

Less: Vacancy Loss

(438)

(0.47)

-5.4%

(942)

(1.01)

-10.3%

(902)

(1.02)

-9.3%

Collection Loss

(62)

(0.07)

-0.8%

(113)

(0.12)

-1.2%

(52)

(0.06)

-0.5%

(420)

(0.45)

-5.2%

(520)

(0.56)

-5.7%

(220)

(0.27)

-2.5%

Concession Loss

Rent Collected

7,173

7.64

88.6%

7,578

8.13

82.8%

8,533

10.45

87.7%

630

0.67

7.8%

692

0.74

7.6%

502

0.61

5.2%

Other Income

$7,803

$8.31

96.4%

$8,270

$8.87

90.4%

$9,035

$10.96

92.9%

Total Income

Expenses

Salaries and Personnel

$762

$0.81

9.4%

$794

$0.85

8.7%

$837

$1.02

8.6%

Administrative

339

0.36

4.2%

323

0.35

3.5%

465

0.57

4.8%

Marketing

104

0.11

1.3%

141

0.15

1.5%

126

0.15

1.3%

Management Fees

319

0.34

4.0%

330

0.35

3.6%

357

0.43

3.7%

Utilities

584

0.62

7.2%

645

0.69

7.1%

778

0.95

8.0%

Contract Services

329

0.35

4.1%

662

0.71

7.2%

619

0.75

6.4%

Repair and Maintenance

554

0.59

6.8%

475

0.51

5.2%

519

0.63

5.3%

Insurance

233

0.25

2.9%

319

0.34

3.5%

297

0.36

3.1%

Real Estate Taxes

647

0.69

8.0%

673

0.72

7.3%

602

0.73

6.2%

76

0.08

0.9%

145

0.15

1.6%

139

0.17

1.4%

Other Taxes

Total Expenses

$3,947

$4.20

48.8%

$4,507

$4.82

49.2%

$4,739

$5.76

48.8%

Net Operating Income Before Debt Service and Depreciation

$3,856

$4.11

47.6%

$3,763

$4.05

41.2%

$4,296

$5.20

44.1%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

12 | RubinBrown Apartment Stats 2012

Average Monthly Rent per Unit

2008

2007

$900 $1,000

13

30

$809

186

201

$763

$743

$728

$800

$674

$700

$728

$743

$600

862

879

4.40

4.44

$500

$400

90.2%

88.0%

$300

$200

$100

$0

49.3%

52.3%

2011

2010

2009

2008

2007

A

B

C

A

B

C

Economic Occupancy

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

$8,738

$10.13

100.0%

$8,911

$10.13

100.0%

90.2%

88.6%

88.0%

87.7%

(583)

(0.68)

-6.7%

(670)

(0.76)

-7.5%

82.8%

(93)

(0.11)

-1.1%

(143)

(0.16)

-1.6%

(174)

(0.20)

-2.0%

(260)

(0.30)

-2.9%

7,888

9.14

90.2%

7,838

8.91

88.0%

667

0.77

7.6%

651

0.74

7.3%

$8,555

$9.91

97.8%

$8,489

$9.65

95.3%

$861

$1.00

9.9%

$844

$0.96

9.5%

0%

364

0.42

4.2%

274

0.31

3.1%

2011

2010

2009

2008

2007

149

0.17

1.7%

155

0.18

1.7%

379

0.44

4.3%

299

0.34

3.4%

616

0.72

7.1%

492

0.56

5.5%

603

0.70

6.9%

316

0.36

3.5%

Gross Potential Rent vs. Net Operating Income per Square Foot

489

0.57

5.6%

690

0.78

7.7%

334

0.39

3.8%

335

0.38

3.8%

$4.11 $8.63

2011

458

0.53

5.2%

572

0.65

6.4%

$4.05 $9.82

2010

81

0.09

0.9%

72

0.08

0.8%

$5.20 $11.80

2009

$4,334

$5.03

49.6%

$4,049

$4.60

45.4%

$4.88 $10.13

2008

$4,221

$4.88

48.2%

$4,440

$5.05

49.9%

$5.05 $10.13

2007

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2012 | 1 3

Low Income Tax Credit Projects

2011

2010

2009

Total Number of Projects

363

354

122

Average Number of Units

106

117

125

Averages Per Unit:

Monthly Rent

$722

$676

$680

Square Feet

952

947

983

Rooms

4.37

4.38

4.63

Economic Occupancy

89.2%

86.9%

87.1%

Net Operating Income Before Debt Service & Depreciation as a Percentage of Total Income

36.9%

37.8%

37.4%

A

B

C

A

B

C

A

B

C

Revenues

Gross Potential Rent

$8,665

$9.11

100.0%

$8,110

$8.56

100.0%

$8,159

$8.30

100.0%

Less: Vacancy Loss

(718)

(0.75)

-8.3%

(828)

(0.87)

-10.2%

(838)

(0.85)

-10.3%

Collection Loss

(130)

(0.14)

-1.5%

(130)

(0.14)

-1.6%

(137)

(0.14)

-1.7%

(83)

(0.09)

-1.0%

(106)

(0.11)

-1.3%

(77)

(0.08)

-0.9%

Concession Loss

Rent Collected

7,734

8.13

89.2%

7,046

7.44

86.9%

7,107

7.23

87.1%

465

0.49

5.4%

413

0.44

5.1%

342

0.35

4.2%

Other Income

$8,199

$8.62

94.6%

$7,459

$7.88

92.0%

$7,449

$7.58

91.3%

Total Income

Expenses

Salaries and Personnel

$890

$0.94

10.3%

$803

$0.85

9.9%

$764

$0.78

9.4%

Administrative

453

0.48

5.2%

423

0.45

5.2%

364

0.37

4.5%

Marketing

102

0.11

1.2%

96

0.10

1.2%

87

0.09

1.1%

Management Fees

444

0.47

5.1%

408

0.43

5.0%

390

0.40

4.8%

Utilities

829

0.87

9.6%

720

0.76

8.9%

799

0.81

9.8%

Contract Services

965

1.01

11.1%

714

0.75

8.8%

745

0.76

9.1%

Repair and Maintenance

511

0.54

5.9%

620

0.65

7.6%

606

0.62

7.4%

Insurance

348

0.37

4.0%

298

0.31

3.7%

276

0.28

3.4%

Real Estate Taxes

518

0.54

6.0%

463

0.49

5.7%

523

0.53

6.4%

110

0.12

1.3%

95

0.10

1.2%

109

0.11

1.3%

Other Taxes

Total Expenses

$5,170

$5.45

59.7%

$4,640

$4.89

57.2%

$4,663

$4.75

57.2%

Net Operating Income Before Debt Service and Depreciation

$3,029

$3.17

34.9%

$2,819

$2.99

34.8%

$2,786

$2.83

34.1%

A = Dollars per unit, per year

B = Dollars per square foot, per year

C = Percent of gross potential rent

14 | RubinBrown Apartment Stats 2012

Average Monthly Rent per Unit

2008

2007

$900 $1,000

130

138

123

123

$800

$722

$680

$676

$656

$642

$700

$656

$642

$600

986

966

4.62

4.64

$500

$400

89.2%

89.6%

$300

$200

$100

$0

38.2%

40.7%

2011

2010

2009

2008

2007

A

B

C

A

B

C

Economic Occupancy

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

$7,866

$7.98

100.0%

$7,709

$7.98

100.0%

89.5%

89.2%

89.2%

87.1%

86.9%

(652)

(0.66)

-8.3%

(580)

(0.60)

-7.5%

(129)

(0.13)

-1.6%

(133)

(0.14)

-1.7%

(67)

(0.07)

-0.9%

(95)

(0.10)

-1.2%

7,018

7.12

89.2%

6,901

7.14

89.6%

329

0.33

4.2%

393

0.41

5.1%

$7,347

$7.45

93.4%

$7,294

$7.55

94.7%

$706

$0.72

9.0%

$676

$0.70

8.8%

0%

380

0.39

4.8%

379

0.39

4.9%

2011

2010

2009

2008

2007

79

0.08

1.0%

84

0.09

1.1%

403

0.41

5.1%

374

0.39

4.9%

758

0.77

9.6%

701

0.73

9.1%

661

0.67

8.4%

602

0.62

7.8%

Gross Potential Rent vs. Net Operating Income per Square Foot

547

0.55

7.0%

535

0.55

6.9%

302

0.31

3.8%

299

0.31

3.9%

$3.17 $9.11

2011

600

0.61

7.6%

559

0.58

7.3%

$2.99 $8.56

2010

107

0.11

1.4%

114

0.12

1.5%

$2.83 $8.30

2009

$4,543

$4.62

57.8%

$4,323

$4.48

56.1%

$2.83 $7.98

2008

$2,804

$2.83

35.6%

$2,971

$3.07

38.6%

$3.07 $7.98

2007

Net Operating Income

Gross Potential Rent

RubinBrown Apartment Stats 2012 | 15

RubinBrown Real Estate Services Group

For more than 30 years, RubinBrown’s Real Estate Services Group has developed a strong reputation nationally as a leader in accounting and advisory services. Today, the group provides specialized services to real estate entities from coast to coast. The RubinBrown Real Estate Services Group provides a full range of assurance, tax, business planning, and consulting services to: • Investment funds • Real estate partnerships • Developers

Through the years, our clients have grown to depend on our expertise in four key areas of the real estate sector:

Affordable Housing: This complex and highly regulated industry has been one that RubinBrown has focused on since the early days of HUD and the advent of the federal low-income housing tax credit program. Historic Tax Credit Services: RubinBrown has extensive experience with consulting on historic rehabilitation projects across the country. New Markets Tax Credit Services: In addition to initial program guidance and consulting, RubinBrown experts can help you with NMTC application assistance. Renewable Energy: There are many new financial incentives for companies in the renewable energy sector. We can help you sort through the opportunities and provide financial guidance to move your businesses forward. In addition, the RubinBrown Real Estate Services Group regularly sponsors seminars and roundtables dealing with current topics affecting the real estate industry.

• Management companies • Governmental agencies • Syndicators and investors • Financial institutions • Construction-related companies

RubinBrown Real Estate Services Group’s services include: • Financial forecasts and projections • Cash flow and operational analyses • Specialized and complex tax planning • Troubled project workouts • HOPE VI consulting • Senior housing consulting • Business valuations • Low-income housing tax credit consulting and compliance • Affordable housing consulting and compliance • Historic rehabilitation tax credit consulting • Sales and Use Tax consulting • Governmental cost certifications (FHA & state housing agency) • NMTC consulting and compliance • Renewable energy consulting and compliance • Design and evaluation of financial reporting systems and internal control systems • Capital asset segregation analysis • Construction draw accounting and processing • Structured and complex deal structuring • Assistance in obtaining debt/equity financing • Like-kind exchange consulting

Bryan C. Keller, CPA Partner-In Charge 314.290.3341 bryan.keller@rubinbrown.com

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Frank Seffinger, CPA, LL.B., LL.M. Partner 303.952.1240 frank.seffinger@rubinbrown.com

• Strategic planning • Feasibility studies

16 | RubinBrown Apartment Stats 2012

@RubinBrownRE www.RubinBrownRealEstate.com

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