Dallas - Fort Worth Historical Employment Growth

Employment Growth (Y/Y)

5%
00
00
4% 00
00
3% 01
01
01
2% 01
02
1% 02
02
02
0% 03
03
(1%) 03
03
04
(2%) 04
04
(3%) 04
05
05
(4%) 05
05
(5%) 06
06
06
(6%) 06
06 07 08 09 10 11 12 13 14 15 16 17* 07
07
Dallas - Fort Worth United States

Sources: Moody's Analytics; CoStar Market Analytics As of 17Q3

*Year to Date
Dallas - Fort Worth Job Growth By Employment Sector*
Employment As A % Of Prerecession Peak Employment Growth (Y/Y)
160% 7%
136% Prerecess
140% 130% 6% Current
124% 127%
119% 123% % Of Pre
118%
120% Employm
107% 108% 5%
100% Hard Cop
4%
80% 76%
65% Employm
3% Employm
60%
2%
40%

20% 1%

0% 0%

Trade

Business Services

Construction
Government

Financial Activities

Information
Office-Using

Leisure and Hospitality

Education/Health Services

Manufacturing
Total Nonagricultural

Employment As A % Of Prerecession Peak Employment Growth Last 12 Months

Sources: Moody's Analytics; CoStar Market Analytics As of 17Q3

*Employment sectors ordered by total number of workers.
Dallas - Fort Worth Population & Growth By Age Cohort
United States Dallas - Fort Worth

16%
21%
28% 30%

25%
26%
25%
30%
65+ Years Older 50-64 Years Old 35-49 Years Old 20-34 Years Old

45%
2011-2017 Growth
40%
35%
30%
25%
20%
15%
10%
5%
0%
(5%)
65+ Years Older 50-64 Years Old 35-49 Years Old 20-34 Years Old

Dallas - Fort Worth United States

Sources: Moody's Analytics; CoStar Market Analytics As of 17Q3

Apartment Fundamentals
Demand & Supply (000s Units) Vacancy
25.0 12.0%
Year
01
02
10.0% 03
20.0 04
05
06
07
8.0% 08
09
15.0
10
11
6.0% 12
13
14
10.0 15
16
4.0% 17*
18
19
5.0 20
2.0% 21

0.0 0.0%
06 07 08 09 10 11 12 13 14 15 16 17*

Supply Change Demand Change Vacancy National Vacancy

Source: CoStar Market Analytics As of 17Q3

*Year to Date
SFR Housing Starts And Apt Deliveries vs Household Growth
SFR Starts & Apt Deliveries vs Household Growth (000s)
70

2000Q4
60 2001Q4
2002Q4
2003Q4
2004Q4
50 2005Q4
2006Q4
2007Q4
2008Q4
40 2009Q4
2010Q4
2011Q4
2012Q4
30 2013Q4
2014Q4
2015Q4
2016Q4
20 2017Q4
2018Q4
2019Q4
10

0
06 07 08 09 10 11 12 13 14 15 16 17

Housing Starts Household Growth Apartments Growth

Source: Moody's Analytics; CoStar Market Analytics As of 17Q3

Dallas - Fort Worth Apartment Inventory
% Unit Type Building Age % Unit Ty
Studios
4+ Bedroom,
3 Bedroom, 0.24%
5.65%
Studios,
5.53%
0-5 Years,
12.46%
6-10 Years,
7.20%

2 Bedroom,
38.04%
11-20 Years,
21+ Years, 17.78%
1 Bedroom, 62.42%
50.54%

Source: CoStar Market Analytics As of 17Q3

Submarkets With The Most Construction
Submarke
Number of Units
5,000 Dallas - F
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Frisco/Prosper

Plano

Northwest Dallas
Northwest Fort Worth

Allen/McKinney
Uptown/Park Cities

Arlington

Oak Cliff
East Dallas

Garland/Rowlett
Under Construction Units

Source: CoStar Market Analytics As of 17Q3

Submarkets With The Most Deliveries
Submarke
Number of Units
6,000

5,000
Dallas - F

4,000

3,000

2,000

1,000

West Dallas
Plano
Farmers Branch/Addison/Carrollton

Dallas CBD
Frisco/Prosper

Northwest Fort Worth

Allen/McKinney

Las Colinas
Uptown/Park Cities

East Dallas

New Supply Since 2015

Source: CoStar Market Analytics As of 17Q3

Largest Percent Of Inventory Growth Since 2015
Submarke
Percentage of Growth
140%
122.3%
120%

100%

80%

60%
48.6%
42.6% Dallas - F
40% 29.3%
22.2%
20% 16.5% 15.1% 13.1% 11.7% 10.4%

0%

Frisco/Prosper

Rockwall/Wylie
Dallas CBD

North Fort Worth

Las Colinas
West Dallas

Northwest Fort Worth

Allen/McKinney
Uptown/Park Cities

North Dallas
Percentage of Total Inventory Growth

Source: CoStar Market Analytics As of 17Q3

Dallas - Fort Worth Rent Level & Growth
Rent Level/Month Rent Growth (Y/Y)
$1,200 8%

$1,000 6%

$800 4%

$600 2%

$400 0%

$200 (2%)

$0 (4%)
06 07 08 09 10 11 12 13 14 15 16 17*

Rent Growth Rent Level

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Dallas - Fort Worth Submarkets With The Highest Rent Growth
Submarke
Y/Y Rent Growth
8.0%

7.0%

6.0%

5.0%
Dallas - F
4.0%
7.02% 6.83%
3.0% 5.92% 5.85% 5.77%

2.0%

1.0%

0.0%

South Dallas County

Oak Cliff
East Fort Worth

Grand Prairie

North Richland Hills/Haltom City

Source: CoStar Market Analytics As of 17Q3
Dallas - Fort Worth Submarkets With The Lowest Rent Growth
Submarke
Y/Y Rent Growth
0.2%

0.1%
0.15%
Dallas - F
0.07% Dallas - F
0.0% -0.02%
-0.05%

-0.1%
-0.29%
-0.2%

-0.3%

-0.4%

Southeast Fort Worth

Dallas CBD
Allen/McKinney

Uptown/Park Cities
North Dallas

Source: CoStar Market Analytics As of 17Q3

Rent Growth By Star Rating
Rent Growth (Y/Y)
10%

8%

6%

4%

2%

0%

-2%

-4%
06 07 08 09 10 11 12 13 14 15 16 17*

1 & 2 Star Growth 3 Star Growth 4 & 5 Star Growth

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Cumulative Rent Growth By Star This Cycle
Cumulative Rent Growth
40%
3/31/2010
6/30/2010
9/30/2010
35%
3/31/2011
6/30/2011
30%
9/30/2011

3/31/2012
25%
6/30/2012
9/30/2012

20%
3/31/2013
6/30/2013
9/30/2013
15%
3/31/2014
6/30/2014
10%
9/30/2014

3/31/2015
5%
6/30/2015
9/30/2015
0%
3/31/2016
10 11 12 13 14 15 16 17
6/30/2016
9/30/2016
-5%
3/31/2017
6/30/2017

4&5 Star 3 Star 1&2 Star

Source: CoStar Market Analytics As of 17Q3

Dallas - Fort Worth Rent Growth vs Income Growth
Rent/Personal Income Growth 82
8% 82
82
82
83
6% 83
83
83
84
4%
84
84
84
2% 85
85
85
85
0% 86
86
86
86
(2%) 87
87
87
87
(4%) 88
88
88
88
(6%) 89
06 07 08 09 10 11 12 13 14 15 16 17* 89
89

Income Growth (Y/Y) Rent Growth (Y/Y)

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Dallas - Fort Worth Rent Growth vs Income Growth
Rent/Personal Income Growth 82
35% 82
82
82
83
30% 83
83
83
25% 84
84
84
84
20% 85
85
85
85
15% 86
86
86
86
10% 87
87
87
87
5% 88
88
88
88
0%
89
06 07 08 09 10 11 12 13 14 15 16 17* 89
89

Cumulative Income Growth Cumulative Rent Growth

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Median Home Prices and Annual Pricing Growth
Median Single Family Home Price Annual Growth*
$300,000 15%

$250,000 10%

$200,000 5%
05
05
05
05
$150,000 0% 06
06
06
06
07
$100,000 -5%
07
07
07
08
$50,000 -10% 08
08
08
09
09
$0 -15%
09
06 07 08 09 10 11 12 13 14 15 16 17* 09
10

Median SFR Price Percent Growth

Sources: Moody's Analytics; CoStar Market Analytics As of 17Q3

*Rolling Four Quarter Average
Dallas - Fort Worth Rent Growth vs Housing Price Growth
SFR Home Price/Rent Growth 82
15% 82
82
82
83
10% 83
83
83
84
84
5% 84
84
85
85
0% 85
85
86
86
86
(5%) 86
87
87
87
(10%) 87
88
88
88
88
(15%)
89
06 07 08 09 10 11 12 13 14 15 16 17* 89
89

SFR Home Price Growth (Y/Y) Rent Growth (Y/Y)

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Uptown/Park Cities Submarket Fundamentals
2017
Annual Change in Demand & Supply Vacancy & Vacancy Average 9/30/201
3,500 14.0%

3,000 12.0% Choose a Subm

2,500 10.0%

2,000 8.0%

1,500 6.0%

1,000 4.0%

500 2.0%

0 0.0%
06 07 08 09 10 11 12 13 14 15 16 17*

5%
Annual Rent Growth
3.8% 3.8%
4% 3.1%
2.9% 2.7%
3% 2.4% 2.5%
2% 1.8% 1.6%

1%
0%
0.0%
(1%)
(2%) -1.1%

(3%)
(4%) -3.2%
06 07 08 09 10 11 12 13 14 15 16 17*
Source: CoStar Market Analytics As of 17Q3
*Year to Date
Plano Submarket Fundamentals
2017
Annual Change in Demand & Supply Vacancy & Vacancy Average 9/30/201
1,800 12.0%

1,600
10.0% Choose a Subm
1,400

1,200 8.0%

1,000
6.0%
800

600 4.0%

400
2.0%
200

0 0.0%
06 07 08 09 10 11 12 13 14 15 16 17*

8%
Annual Rent Growth
6.8%
6% 4.8% 4.6%
3.9%
4% 3.2% 3.3%
2.2% 2.6%
1.4%
2% 1.3% 0.9%

0%
(2%)
(4%)
-3.9%
(6%)
06 07 08 09 10 11 12 13 14 15 16 17*
Source: CoStar Market Analytics As of 17Q3
*Year to Date
Quarterly Sales Transaction Count
Transaction Count
160 06
07
08
140 09
10
11
120 12
13
14
15
100 16
17

80

60

40

20

0
06 07 08 09 10 11 12 13 14 15 16 17

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Source: CoStar Market Analytics As of 17Q3

Inventory Turnover
Units Sold % of Turnover
120,000 18%

16%
100,000
14%

80,000 12%

10%
60,000
8%

40,000 6%

4%
20,000
2%

0 0%
06 07 08 09 10 11 12 13 14 15 16 17*

Units Sold % Turnover

Source: CoStar Market Analytics As of 17Q3

*Year to Date
Submarket Inventory Turnover
Units Sold % of Turnover
10,000 25%
9,000
8,000 20%
7,000 1
2
6,000 15% 3
4
5,000
5
4,000 10% 6
7
3,000 8
2,000 5% 9
10
1,000 11
12
0 0%
13

Plano
Uptown/Park Cities
Arlington

Northwest Dallas
Mesquite
Southwest Fort Worth
East Dallas

Farmers Branch/Addison/Carrollton

14
15
16
17
18
19
20

Units Sold Last 4 Quarters Turnover Percentage

Source: CoStar Market Analytics As of 17Q3

Apartment Cap Rates By Star Rating
Cap Rate
11.0%
Make Sur

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%
06 07 08 09 10 11 12 13 14 15 16 17*

1 & 2 Star 3 Star 4 & 5 Star

Source: CoStar Market Analytics As of 17Q3

*Year to Date
10-Year Treasury vs Dallas - Fort Worth Cap Rate
Interest/Cap Rate
10.0%
12/31/20
9.0% 3/31/200
6/30/200
9/30/200
8.0% 12/31/20
3/31/200
6/30/200
7.0% 9/30/200
12/31/20
6.0% 3/31/200
6/30/200
9/30/200
5.0% 12/31/20
3/31/200
6/30/200
4.0% 9/30/200
12/31/20
3.0% 3/31/200
6/30/200
9/30/200
2.0% 12/31/20
3/31/200
6/30/200
1.0% 9/30/200
12/31/20
3/31/200
0.0%
6/30/200
06 07 08 09 10 11 12 13 14 15 16 17 9/30/200
12/31/20
10-Year Treasury Dallas - Fort Worth Cap Rate

Sources: CoStar Market Analytics; Moody's Analytics As of 17Q3