CINCINNATI OVERVIEW

Economy

1| Prior to the pandemic, Cincinnati’s real gross metropolitan product grew at an average annual rate of 1.9% from 2015 to 2019. During that same fiveyear period, job growth averaged 1.4% annually, with roughly 15,500 jobs added on average each year. In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 9.4% year-over-year in 2nd quarter. 2| In 2022, the metros inflation-adjusted economic output contracted 0.4%. At the same time, the metro recorded a net gain of 12,800 jobs, expanding the employment base 1.2%.

Capital Markets

1| Transaction dollar volumes in Cincinnati totaled roughly $520.8 million in 2022, down about 22% year-over-year. 2| Meanwhile, the number of transactions decreased about 40% over the past year, with 31 apartment properties trading hands. 3| Transactions in 2022 yielded an average cap rate of 5.39%, down 34 basis points year-over year. By comparison, cap rates averaged 5.05% in the Midwest region and 4.54% nationally. 4| Meanwhile, the average price per unit in Cincinnati came in at roughly $170,200, up 66.0% annually.

1| Over the past five years, annual change in effective asking rents in Cincinnati ranged from 1.7% to 11.9%. 2| In 4th quarter 2022, effective asking rents for new leases were up 9.9% year-over- year. That annual rent performance was above the market’s five-year average of 5.0%. 3| Looking at product classes in Cincinnati, in 4th quarter 2022 annual effective rent change registered at 9.2% in Class A units, 11.0% in Class B units and 9.1% in Class C units. 4| Among submarkets, the strongest annual rent change performances over the past year were in North Cincinnati and Butler County. In the coming year, samestore effective asking rent change in Cincinnati is expected to slow from the current level.