Appraisal Institute Conditions of the Chicago Real Estate

Appraisal Institute Conditions of the Chicago Real Estate Market - 2018 Multi-Family April 4, 2018 David Bradley Regional Manager Downtown Chicago Office Dean Giannakopoulos First Vice President – Capital Markets Marcus & Millichap Capital Corporation John Bailey First Vice President Investments Downtown Chicago Office

Over 1, 700 Investment Professionals in Offices Throughout the U. S. and Canada

SERVICES OFFERED BY MARCUS & MILLICHAP REAL ESTATE INVESTMENT SALES FINANCING Largest commercial real estate brokerage firm in the country, with specialization in all major property types and more than 1, 700 professionals collaborating at every stage Superior capital market expertise, precisely managed financing, and unparalleled access to the most competitive rates, terms, and capital sources through MMCC Access to the industry’s largest inventory of quality investment opportunities Prominent capital market relationships with commercial banks, secured lenders, debt and equity funds, life insurance companies, private and public funds, etc. RESEARCH ADVISORY SERVICES Provides clients with the latest local and national market trends based on real-time data to create optimal positioning, pricing, and marketing strategies Comprehensive advisory and consulting services to give you buy-sell-hold decisions based on real-time market knowledge and research Industry’s most in-depth understanding of a variety of property types in numerous local and national markets, with over 1, 000 research products produced annually Maximizes value for our clients in each transaction and shapes long-term portfolio strategies

BROKERAGE BY PRODUCT TYPE MULTIFAMILY SINGLE TENANT NET-LEASE LAND INDUSTRIAL FINANCING SELF-STORAGE RETAIL HEALTHCARE OFFICE MANUFACTURED HOUSING HOSPITALITY SENIORS HOUSING AFFORDABLE HOUSING STUDENT HOUSING 4

MOVING CAPITAL, MAXIMIZING VALUE % of out of area Buyers M&M All Regional Transactions All Transactions Regional 75% 69% Out of Area Buyers 4% M&M Apartment Transactions # Total Apartment Transactions 77% 62% Out of Area Buyers #

Marcus & Millichap Capital Migration Helping West Coast Investors Access $714 Million $357 M $149 M $73 M $128 M $7 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

Marcus & Millichap 2017 Capital Migration Helping Northeast Investors Access $718 Million $347 M $46 M $205 M $102 M $18 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

Marcus & Millichap 2017 Capital Migration Helping Mountain Region Investors Access $1. 8 Billion $379 M $60 M $1. 2 B $114 M $26 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

Marcus & Millichap 2017 Capital Migration Helping Texas/Oklahoma Investors Access $2. 0 Billion $393 M $235 M $117 M $770 M $475 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

Marcus & Millichap 2017 Capital Migration Helping Southeast Investors Access $3. 6 Billion $1. 7 B $410 M $420 M $910 M $142 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

Marcus & Millichap 2017 Capital Migration Helping Midwest Investors Access $2. 1 Billion $660 M $708 M $319 M $303 M $129 M Trailing 12 through 4 Q 2017 Sources: Marcus & Millichap Research Services, MNet

WHERE WE SOURCE OUR INVESTORS Foreign and International Buyers 1031 Exchange Capital PREMIER ACCESS TO INVESTOR PROFILES Cross-Product Capital 1 st Tier Investors Pension funds, advisors, banks, REITs, and life insurance companies 2 nd Tier Investors Syndicators, developers, merchant builders, general partnerships, and professional investors 3 rd Tier Investors Private, individual investors who account for the majority of transactions in the marketplace

MARCUS & MILLICHAP PREMIER INVESTMENT SERVICES Marcus & Millichap is the premier commercial real estate investment services firm in the United States. Founded in 1971 on a unique model that matches each property with the largest pool of pre-qualified investors, we leverage four decades worth of experience and relationships to handle all of your commercial real estate needs. Our team of more than 1, 700 professionals in the U. S. and Canada focuses exclusively on real estate investment sales, financing, research, and advisory services. Founded in 1971 on a unique methodology Largest pool of pre-qualified investors in the industry Moves capital across our network of investment professionals More than 1, 700 investment professionals in the U. S. and Canada WITH AN EXCLUSIVE FOCUS ON real estate investment sales, financing, research, and advisory services MORE THAN 1, 700

2018 National Multi Housing Group - Who are the typical buyers we are seeing? Chicago Apartment Market Overview and Outlook John Bailey National Multi Housing Group April 2018

* Forecast GDP; Consumer confidence through February Sources: Marcus & Millichap Research Services, BEA, The Conference Board Consumer Confidence Index millions)Percent Change Annualized Quarterly Starts (in Industrial U. S. GDP in Eighth Year of Expansion; Growth Moderate But Picking Up

Quarterly Job Growth (Millions) Employment Growth Durable and Remarkably Stable -8. 7 Million +8. 2 Million 2017 Total: 2018 Forecast: 2, 188, 000 1, 800, 000 * Through February 2018 Sources: Marcus & Millichap Research Services, BLS +18. 5 Million* 89 Months of Continuous Gains* Monthly Average: 200, 000 Jobs

National Employment Rank by Metro Y-O-Y Absolute Change Through December 2017 Absolute Change Percent Change 800 0. 0% Cleveland 1, 600 0. 2% 1. 3% Cincinnati 4, 400 0. 4% 54, 700 2. 8% Milwaukee 7, 700 0. 9% Washington, D. C. 53, 700 1. 7% Baltimore 8, 500 0. 6% Boston 49, 800 1. 8% Kansas City 9, 600 0. 9% Inland Empire 47, 300 3. 3% St. Louis 9, 800 0. 7% Los Angeles 46, 700 1. 1% West Palm Beach 11, 200 1. 8% Orlando 46, 100 3. 8% Oakland 12, 900 1. 1% Houston 45, 500 1. 5% Columbus 15, 000 1. 4% U. S. Total 2, 188, 000 1. 5% Top 10 Metros Bottom 10 Metros Absolute Change Percent Change Dallas-Fort Worth 80, 000 2. 2% Northern New Jersey Atlanta 56, 000 2. 1% New York 56, 000 Seattle-Tacoma Chicago: (26, 100, 0. 6%) Sources: Marcus & Millichap Research Services, BLS

* Forecast Sources: Marcus & Millichap Research Services, Real. Page, Inc. Vacancy Rate Completions (000 s of Units) National Apartment Vacancy vs. Construction

National Apartment Rank by Metro 2018 Completions* Top 10 Metros 2018 Completions* Completions as % Inv. Dallas-Fort Worth 32, 000 4. 2% New York 17, 530 Los Angeles Bottom 10 Metros 2018 Completions* Completions as % Inv. St. Louis 1, 100 0. 7% 1. 0% Detroit 1, 500 0. 6% 17, 200 1. 6% Cleveland 1, 600 1. 0% Washington, D. C. 15, 700 2. 5% West Palm Beach 1, 600 1. 4% Denver 14, 300 5. 1% Inland Empire 1, 700 0. 9% Atlanta 13, 000 2. 6% Orlando 1, 800 0. 8% Houston 12, 400 1. 8% Sacramento 1, 900 1. 3% Seattle-Tacoma 12, 100 3. 1% Cincinnati 2, 100 1. 3% Chicago 10, 500 1. 5% Oakland 2, 500 1. 2% Northern NJ 10, 200 3. 1% San Francisco 2, 500 1. 0% U. S. Total 335, 000 1. 9% * Forecast Sources: Marcus & Millichap Research Services, Real. Page, Inc. , Co. Star Group, Inc.

Contribution to GDP Housing Contribution to GDP Recessions Long-Term Average: 4. 6% * Through 4 Q Recession periods: (3 Q 1981 -4 Q 1982), (3 Q 1990 -1 Q 1991), (1 Q 2001 -4 Q 2001), (4 Q 2007 -2 Q 2009) Sources: Marcus & Millichap Research Services, BEA

Completions / Household Growth (Mil. ) Housing Construction Has Fallen Short of Demand 2000 -2007 Oversupply: 2. 5 M * Forecast Trailing 24 -month average for household growth Sources: Marcus & Millichap Research Services, U. S. Census Bureau, Real. Page, Inc. 2008 -2018* Undersupply: 2. 2 M

Vacancy Rate U. S. Apartment Vacancy Trends by Class 5. 2% 4. 8% 4. 5% Trailing 12 -month average Sources: Marcus & Millichap Research Services, Real. Page, Inc.

U. S. Apartment Rent Growth Trends by Class Y-O-Y Percent Change +6. 1% Sources: Marcus & Millichap Research Services, Real. Page, Inc. +4. 5% +3. 8% Class Change Since 2009 Class A +41. 3% Class B +39. 2% Class C +33. 2%

Monthly Payment National Apartment Rent and Home Payment Trends $209 $741 $21 Mortgage payments based on quarterly median home price for a 30 -year fixed rate conventional mortgage, 90% LTV, taxes, insurance, and PMI Sources: Marcus & Millichap Research Services, Real. Page, Inc. , Freddie Mac, National Association of Realtors

U. S. Apartment Investment Trends Transaction Activity by Price Tranche Total Transactions (000 s) +6. 9% Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, Co. Star Group, Inc. , Real Capital Analytics -4. 5%

10 -Yr Treasury Long-Term Avg. Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, Co. Star Group, Inc. , Real Capital Analytics, Federal Reserve 230 bps 100 bps 450 bps 390 bps Cap Rate Long-Term Avg. 430 bps 390 bps 380 bps Average Rate U. S. Apartment Cap Rate Trends Average Cap Rates vs. 10 -Year Treasury

* Trailing 12 -month average ** Through 3 Q Includes sales $15 million and greater Sources: Marcus & Millichap Research Services, Real Capital Analytics, Co. Star Group, Inc. Percent of Dollar Volume (Billions) Apartment Investors Pursue Yield – Capital Allocations Moving Beyond the Core

Chicago Economic Overview and Outlook

* Forecast Sources: Marcus & Millichap Research Services, Real. Page, Inc. Vacancy Rate Completions (000 s of Units) Chicago Apartment Construction and Vacancy Trends

Vacancy Rate Chicago Apartment Vacancy Rate Trends by Class Trailing 12 -month average Sources: Marcus & Millichap Research Services, Real. Page, Inc.

Number of Transactions Midwest and Chicago Apartment Transaction Activity * Trailing 12 -months through 3 Q Includes sales $1 million and greater Midwest includes: Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Milwaukee, Minneapolis, and St. Louis Sources: Marcus Millichap Research Services, Co. Star Group, Inc. , Real Capital Analytics

Average Price per Unit (000 s) Apartment Pricing Trends +41% +55% +46% Includes sales $1 million and greater Midwest includes: Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Milwaukee, Minneapolis, and St. Louis Sources: Marcus & Millichap Research Services, Co. Star Group, Inc. , Real Capital Analytics

Average Cap Rate Apartment Cap Rate Spreads Compress as Investors Pursue Yields Beyond Core 370 bps 120 bps Preferred Markets Include: NY, DC, BOS, SD, LA, OC, SJ, SF, SEA Sources: Marcus & Millichap Research Services, Real Capital Analytics, Co. Star Group, Inc. 190 bps

2017 Midwest Multi-Family Transactions By the Chicago Offices Source: Marcus & Millichap Research Services,

2017 Chicago MSA Multi-Family Transactions By the Chicago Offices Source: Marcus & Millichap Research Services,

2017 Chicago Multi-Family Transactions By the Chicago Offices North Side Between the Eisenhower and the Evanston Border 19 City Transactions $1, 734, 558 average price 6. 21% average CAP rate South Side South of the Eisenhower 25 City Transactions $1, 094, 404 average price 11. 55% average CAP rate Source: Marcus & Millichap Research Services,

Vacancy & Rent Comparison for Three Markets Chicago Source: Marcus & Millichap Research Services, Denver Minneapolis

2018 National Multi Housing Group Chicago Apartment Market Overview and Outlook The Fianancing Perspective Dean Giannakopoulos First Vice President – Capital Markets Marcus & Millichap Capital Corporation April 2018

Thank You Conditions of the Chicago Real Estate Market - 2018 April 4, 2018 David Bradley Regional Manager Downtown Chicago Office Dean Giannakopoulos First Vice President – Capital Markets Marcus & Millichap Capital Corporation John Bailey First Vice President Investments Downtown Chicago Office