Multi-Family Market Summary & Activity Update Summer 2015

Tampa-ST. peTerSburg-ClearwaTer, Fl mSa

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CAPSTONE APARTMENT PARTNERS prides itself on the continual value contributions we are able to offer our industry, and thus we produce periodic Multi-Family Market Summaries to further inform the clients and industry we serve. Capstone believes that this market snapshot will be beneficial to current owners, operators, investors, and other industry professionals who are active in the Tampa Bay MSA, as well as others who are looking to break into this market.

ContentsIntroduction 2

Market Commentary 3

Economic Overview 4

Sales Transactions 5

Proposed Development 8

Communities Under Construction 9

Why Choose Capstone? 10

Jad RichaInvestment Advisor

727.282.5547jad@capstoneapts.com

Enon WinklerPartner

407.616.0250enon@capstoneapts.com

Deucie BiesInvestment Advisor

407.470.9030deucie@capstoneapts.com

Brian HunsickerInvestment Advisor

727.631.5870bhunsicker@capstoneapts.com

Orlando Office111 N. Orange Ave. Suite 1125 Orlando, FL 32801

Tampa Office208 N. Armenia Ave. Suite B Tampa, FL 33609

FLORIDA TEAM

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TARYApartment Comparison by Class

Class Units Vacancy Rate Avg. Sq. Ft. Avg. Rent Avg. Rent/Sq. Ft.Lease Up 5,800 22.0% 988 $1,461 $1.48A (1-5 Years in Age) 6,957 3.1% 981 $1,275 $1.30B (6-15 Years in Age) 27,335 3.6% 1,083 $1,141 $1.05C (16-30 Years in Age) 48,632 4.3% 918 $983 $1.07C- (30+ Years in Age) 50,896 4.5% 547 $831 $0.98Stabilized Averages 133,820 4.2% 928 $973 $1.05Totals/Averages 139,620 4.9% 930 $993 $1.07

Growth in the Tampa Bay Market

The Tampa Bay MSA continues to thrive. Over the past year, 32,900 jobs have been added to the area causing an increase in demand for multi-family units. With new developments coming to the area, it is expected that the Tampa Bay market will continue to add hundreds of jobs to the area and improve economically.

Currently in redevelopment is Channelside Drive, which is located in the heart of downtown Tampa. The $1 billion redevelopment project is being ranked as one of the largest downtown development projects in the Southeast. Additonal infrastructure includes a 30 acre entertainment and commerce district, hotels, business offices, apartment towers, restaurants, parks, and entertainment venues.

Additionally, the University of South Florida medical school and heart institute are moving to an acre of land located at Channelside Drive and Meridian Avenue, which will be joined by an adjacent private medical tower and a parking structure for 1,800 cars. This addition will provide an added draw to a downtown that is reshaping itself to appeal to a young and talented workforce.

Another mark of growth in Tampa Bay involves companies relocating their corporate headquarters to the area to take advantage of Florida’s growing population and sophisticated technology base—a recent addition includes Twinlab Consolidation Corporation out of New York. The maker of Metabolife diet and energy products is leasing more than 30,000 sqft in St. Petersburg’s First Central Tower and will bring 80 employees to the new site. In downtown Tampa, Cincinnati-based Total Quality Logistics is launching its carrier services division that will create 75 new jobs. This in addition to the 150 employees at their facilities on Harbour Island adjacent to downtown.

Multi-Family Fundamentals

The current vacancy rate for the Tampa market has improved slightly over the past six months to 4.2%. Demand for apartments remains strong with 3,223 units absorbed over the past six months and a total of 5,639 absorbed over the past year. With 5,000 units under construction and an additional 6,700 units proposed. Market experts anticipate the occupancy rate will remain steady throughout the next 12-18 months, with the region also experiencing a 2.0% - 3.0% rent growth over the coming 12 months.

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WEmployment

As of June 2015, the unemployment rate in the Tampa metro region is 5.3%. The market continues to experience positive job growth with the addition of over 40,000 jobs over the past year. The state and national rate is 5.6% and 5.4%, respectively.

Major Employers (non-government)Rank Company Industry Employment

1 BayCare Health System Healthcare 22,900

2 Publix Super Market Grocery 13,000

3 Home Shopping Network Information 10,550

4 University of South Florida Education 9,000

5 WellCare Insurance 6,700

6 Tampa General Hospital Healthcare 6,400

7 Verizon Information 6,000

8 JP Morgan Chase Financial Services 5,100

9 Moffitt Cancer Center Healthcare 4,200

10 Busch Gardens Entertainment 4,000

Wages & PopulationThere are 1,182,200 employees in the Tampa-St. Petersburg-Clearwater MSA earning a mean hourly wage of $20.88 and an average annual income of $43,420. In comparison, the state and national annual income averages are $47,230 and $41,820, respectively. The overall cost of living index in Tampa Bay is approximately 7.5% less than both the state and national index means.

Historical Population2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Tampa-St. Petersburg-Clearwater MSA 2,578,104 2,638,814 2,684,639 2,711,222 2,730,007 2,747,272 2,788,961 2,827,556 2,845,178 2,870,569 2,915,582

Florida 17,375,259 17,783,868 18,088,505 18,277,888 18,423,878 18,537,969 18,852,220 19,083,482 19,320,729 19,552,860 19,893,297

Source: U.S. Census Bureau

Employment / Economic Announcements

CitiGroup plans to expand its offices in Brandon and add 1,163 high-paying jobs.

Cognizant Technology Solutions, a national information technology firm, will add 412 high-paying jobs as it expands its operations in the Tampa region.

Total Quality Logistics, a national logistics firm, is planning to relocate its headquarters to Tampa and will add 200 new jobs.

Xcelience, a pharmaceutical company, is adding 100 new jobs to its facility in Tampa.

Inspirata, a cancer research software company, has plans to add 70 new jobs to its Tampa office by 2017.

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S2014-2015 Sales Transactions

Community YOC City Sale Date Units Sale Price Price Per UnitLexington Park At Westchase 2001 Tampa 6/1/2015 400 $64,500,000 $161,250The Gardens at Cross Creek 2008 Tampa 5/12/2015 297 $38,400,000 $129,293Fusion 1560 2010 St. Petersburg 5/7/2015 325 $57,500,000 $176,923Ashford at Feathersound 1986 Clearwater 5/2/2015 276 $34,150,000 $123,732Arbor Walk 2006 Tampa 4/30/2015 230 $22,200,000 $96,522Park at Portofino 1986 Brandon 4/23/2015 444 $43,600,000 $98,198Vinings at Hunter's Green 1995 Tampa 4/2/2015 240 $21,690,000 $90,375Mobley Park 2000 Tampa 4/1/2015 238 $13,200,000 $55,462The Park on Waters 1983 Tampa 3/30/2015 267 $19,491,000 $73,000Stillwater Palms I 1984 Palm Harbor 3/26/2015 168 $21,815,142 $129,852Viera at Westchase 1999 Tampa 3/24/2015 390 $52,750,000 $135,256Stillwater Palms II 1986 Palm Harbor 3/23/2015 264 $21,815,200 $82,633Royal Breeze 1973 Clearwater 3/20/2015 200 $13,850,000 $69,250Boardwalk at Morris Bridge 2000 Tampa 3/19/2015 580 $17,200,000 $29,655Sun Lake 1984 Brandon 3/18/2015 88 $7,437,000 $84,511Park at Elland 1985 Clearwater 3/16/2015 218 $18,925,000 $86,812Lenox Place 1969 Tampa 3/15/2015 168 $8,800,000 $52,381Park at Treviso 1959 St. Petersburg 3/15/2015 304 $20,200,000 $66,447Azure 2013 St. Petersburg 3/5/2015 308 $54,000,000 $175,324Forest Creek 1986 Largo 3/3/2015 104 $7,600,000 $73,077Bryan Dairy Place 1986 Largo 3/3/2015 96 $9,000,000 $93,750Sabal Palm at Carrollwood 1995 Tampa 2/27/2015 432 $51,500,000 $119,213Park at Gibraltar 1987 Clearwater 2/23/2015 207 $19,350,000 $93,478Carrollwood Palms 1985 Tampa 2/10/2015 204 $12,250,000 $60,049Landmark at Savoy Square 1972 Clearwater 2/10/2015 182 $11,375,000 $62,500City Park Clearwater 1990 Clearwater 2/6/2015 228 $29,850,000 $130,921Carlyle At Waters 1985 Tampa 2/3/2015 392 $26,194,200 $66,822Bowery Bayside 1985 Tampa 1/30/2015 832 $85,125,000 $102,314Carlyle at Crosstown 2009 Tampa 1/27/2015 300 $41,243,000 $137,477Sienna Bay 1973 St. Petersburg 1/15/2015 276 $23,250,000 $84,239Park at Knightsbridge 1999 Riverview 1/14/2015 228 $21,150,000 $92,763Three Fountains 1969 South Pasadena 12/27/2014 59 $5,600,000 $94,915Villas at Country Square & Candelwood I 1981 Tampa 12/24/2014 209 $8,150,000 $38,995Tampa Gardens 1965 Tampa 12/23/2014 134 $3,550,000 $26,493University Club 1996 Tampa 12/22/2014 536 $21,800,000 $40,672Liv at Boca Ciega 1970 South Pasadena 12/17/2014 50 $6,000,000 $120,000

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Community YOC City Sale Date Units Sale Price Price Per UnitTuscany Villas 1997 Brandon 12/15/2014 248 $23,675,000 $95,464Casablanca 1970 Tampa 12/12/2014 241 $6,600,000 $27,386Camden Lakeside 1985 Brandon 12/9/2014 228 $22,350,000 $98,026Moncler Willow Lake 1986 Lutz 11/20/2014 144 $11,100,000 $77,083Serenity Towers 1971 South Pasadena 11/18/2014 210 $8,750,000 $41,667Woodberry Woods 1988 Brandon 11/14/2014 348 $21,800,000 $62,644Flamingo West 1974 Tampa 10/31/2014 72 $3,500,000 $48,611Crescent Bayshore 2014 Tampa 10/29/2014 367 $111,500,000 $303,815Park at Coventry 1980 Tampa 10/27/2014 320 $16,700,000 $52,188Avesta Lago Bello 1984 Tampa 10/16/2014 120 $4,320,000 $36,000Del Rio 1983 Tampa 10/16/2014 160 $6,450,000 $40,313Moncler Buena Vista 1984 Tampa 10/14/2014 240 $14,100,000 $58,750The Pointe at South Florida 2000 Tampa 10/8/2014 336 $31,000,000 $92,262Laurel Oaks 1982 Tampa 10/8/2014 192 $15,249,000 $79,422Avesta Bella Mar 1973 Tampa 10/5/2014 264 $8,640,000 $32,727The Village at Brandon 1986 Brandon 9/30/2014 112 $10,425,000 $93,080Verandahs at Brighton Bay 2002 St. Petersburg 9/29/2014 381 $50,292,000 $132,000Bay Cove 1972 Clearwater 9/26/2014 336 $31,964,400 $95,132Rivertree Landing 1969 Tampa 9/23/2014 228 $7,180,000 $31,491Sandanay & Stonehenge 1971 Tampa 9/18/2014 100 $3,050,000 $30,500Brandon Crossing 1990 Brandon 9/16/2014 200 $14,500,000 $72,500Citrus Falls 2003 Tampa 9/4/2014 273 $35,250,000 $129,121Lakewood 1984 Brandon 9/3/2014 83 $3,549,400 $42,764Noho Flats at Hyde Park 2013 Tampa 9/1/2014 311 $57,250,000 $184,084Flats at 4200 2013 Tampa 8/29/2014 314 $36,296,300 $115,593The Edge at 42nd Street 1967 Tampa 8/26/2014 221 $36,296,245 $164,236Courtney Cove 1983 Tampa 8/22/2014 324 $18,950,000 $58,488Summit at Sabal Park 1990 Tampa 8/20/2014 252 $19,050,000 $75,595Oakhurst Square 1950 Tampa 8/18/2014 200 $7,000,000 $35,000Grove at Southshore 2001 Riverview 8/7/2014 340 $31,700,000 $93,235Madison Park Road 2000 Plant City 8/4/2014 248 $21,774,194 $87,799Bay Pointe 1975 Clearwater 7/23/2014 417 $18,000,000 $43,165Lincoln Shores 1984 St. Petersburg 7/15/2014 631 $47,170,000 $74,754Serenity Apartments at Royal Court 1974 Tampa 7/15/2014 150 $8,150,000 $54,333Reflections 1996 Riverview 7/14/2014 290 $11,500,000 $39,655Bay Pointe Villa 1971 St. Petersburg 7/10/2014 136 $4,800,000 $35,294Park East 1988 Tampa 7/3/2014 192 $12,400,000 $64,583College Court 2004 Tampa 7/1/2014 92 $11,800,000 $128,261

SALES TRA

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Class A Class B Class C AVERAGE

Average # of Units Per Transaction

2006

1989

1974

1987

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Class A Class B Class C AVERAGE

Average Year of Construction

$40,567,175

$18,508,720

$12,269,855

$23,515,940

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

Class A Class B Class C AVERAGE

Average Transaction Sales Price

$130,144

$77,863

$54,163

$86,238

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Class A Class B Class C AVERAGE

Average Price Per Unit

Class A represents renovated properties and properties built from 2000-2015, Class B includes properties constructed from 1985-1999, and Class C signifies properties constructed in 1984 or earlier. Averages are based on sales of 100+ units during the years of 2014 and 2015.

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TCommunities Proposed (100 Units and Above)

Developer Community Units Road/Intersection SubmarketNRP Group NRP Times Site 366 4th St./Second Ave. Peninsula South

Pizzuti Builders Dunedin Gateway 124 Main St./Milwaukee Ave. Peninsula North

Dockside Investors LLC Broadway 258 66th St./126th Ave. Peninsula South

Altis Cardinal Skyline 5th 76 (178 COMPLETE) 441 33rd St. Peninsula South

Richman Group Grady Square 300 3860 Columbus Dr. Tampa Central

Taylor and Mathis Metwest 254 Boy Scout Blvd./Lois Ave. Tampa Central

Crescent Communities Crescent Westshore 374 Lois Ave. Tampa Central

Soho Capital Pearl 300 Palm Ave. Tampa Central

Collier Companies Icon 180 Bruce B. Downs Blvd. Tampa Northeast-1

Richman Group Aurora 351 124 Morgan St. Tampa South

Carter and Associates Grant Block 375 901 Franklin St. Tampa South

Framework Group LLC Ybor City 234 1512 East 12th Ave. Tampa South

ABC Capital Corp. ABC Apartment Site 188 South West Shore Blvd. Tampa South

Framework Group AER 350 Straz Center Tampa South

Altman Companies Altis Grand Central 273 Grand Central Ave. Tampa South

Florida Crystals Amazon Hose and Rubber Site 270 Kennedy Blvd. Tampa South

Lincoln Property Company Aspire 408 West Fortune St. Tampa South

Phillips Development Gas Worx Site 716 1400 Channelside Dr. Tampa South

Mercury Advisors Martin at Meridian 323 Twigs Ave. Tampa South

Pollack Shores Real Estate Havana Square 274 404 Rome Ave Tampa South

Related Group Related Group Tower 340 Temple Palms Ave. Tampa South

Oxford Properties Crosstown Walk 315 (342 COMPLETE) 10151 Iris Crosstown Dr. Tampa SouthGrady Square Noho Flats at Hyde ParkAspire

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Developer Community Units Road/Intersection SubmarketDockside Investors LLC Boulevard 260 66th St. Peninsula Central

Pollack Shores Real Estate Solaris at Clearwater 426 28555 Gulf to Bay Blvd. Peninsula Central

American Land Ventures 330 Third Street 358 330 Third St. Peninsula South

The Allen Morris Company Hermitage 348 700 First Ave. Peninsula South

Northwood Ravin 4310 Spruce 262 4310 Spruce St. Tampa Central

Northwood Ravin Valera Westshore 215 Lois Ave. Tampa Central

Contravest Addison at Tampa Oaks 262 Fletcher Ave. Tampa Northeast-1

Wood Partners Alta Terra Bella 311 State Route 54 Tampa Northeast-2

AG Spanos Bonterra Parc at Northwood 262 2168 Druid Rd. Tampa Northeast-2

Bainbridge Communities Harbour Island 235 Knights Run Ave. Tampa South

Novare Group Skyhouse Channelside 320 12th St. Tampa South

Tampa Housing Authority Tempo 203 Ray Charles Blvd. Tampa South

Bainbridge Communities Bainbridge Brandon 255 Falkenburg Rd. Tampa Southeast

Newland Communities Circa at Fishhawk Ranch 260 Fishhawk Ranch Blvd. Tampa Southeast

Lakehouse of Plant City LLC Lakehouse 125 3001 Lakehouse Cove Isle Tampa Southeast

WRH Realty Valrico Station 160 104 Valrico Station Rd. Tampa Southeast

Circa at Fishhawk Ranch 4310 Spruce Addison at Tampa Oaks

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E?Carolinas Georgia Virginia Tennessee Kentucky Alabama Florida West Virginia

The People Sell the Deal

Capstone’s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector and respective region. We place client service above all else, and can guarantee that no one else will work smarter and harder in achieving the highest level of results for our clients. We don’t rely on a logo to sell the deal, but rather

utilize the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable salesmanship of the team members assigned to each project. At the end of the day, it’s the individuals that drive value and sell the deal, and we know the capabilities of our individual team members are second to none.

Market Expertise & Product Niche

Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies us as the ideal candidate for such assignments. Capstone’s investment sales team has completed a multitude of transactions across the primary, secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment.

National Exposure via Cutting Edge Technology

Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing for optimal operational efficiency. This enables Capstone’s investment brokerage team to spend nearly all of its time servicing clients, interacting with industry players and active asset traders, and promoting transactions.

Reputation and Results

Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm’s trusted relationships among the apartment investment community continue to facilitate seamless, fluid, and successful sales transactions.** Information in this report has been provided by the following resources: Real Data Tampa Report June 2015, Tampa Bay Business Journal, Costar, Tampa Bay Times, Tampa Economic

Development Corporation, Tampa Bay Partnership, U.S Census Bureau, Bureau of Labor Statistics, county tax records, and various multi-family industry contacts. Source Images provided by Joe (cover), Apalapla (p.2 botton, left), Azalia Negron (p. 2 top, right) via https://creativecommons.org/licenses/by/2.0/.