Q1 2024

OH - KY | MIDWEST | MULTIFAMILY

QUARTERLY REVIEW

QUARTER 1 2024

CINCINNATI LEXINGTON LOUISVILLE DAYTON

MARKET OUTLOOK

Job Additions- 900

Transaction dollar volumes in Cincinnati totaled roughly $291.3 million in the year-ending 1st quarter 2024, down about 60% year-over-year. Meanwhile, the number of transactions decreased about 52% over the past year, with 22 apartment properties trading hands. Transactions in the year-ending 1st quarter 2024 yielded an average cap rate of 6.34%, up 86 basis points year-over year.

1ST QUARTER SNAPSHOT

THE ECONOMY

1| Prior to the pandemic, Cincinnati’s real gross metropolitan product grew at an average annual rate of 2.2% from 2015 to 2019. During that same five-year period, job growth averaged 1.4% annually, with roughly 15,200 jobs added on average each year. 2| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 8.2% yearover-year in 2nd quarter. 3| In the year-ending 1st quarter 2024, the metros inflation-adjusted economic output expanded 2.9%. 4| At the same time, the metro recorded a net gain of 2,100 jobs, expanding the employment base 0.2%.

5| Cincinnati’s unemployment rate in February 2024 increased 0.4 points yearover-year to 4.1%, in line with the national average of 4.2%. 6| During the past year, job gains in Cincinnati were most pronounced in the Education/Health Services sector followed by Government. 7| Despite job losses stemming from the pandemic, Cincinnati’s current employment base now sits roughly 30,700 jobs or about 3% above the pre-pandemic level in February 2020.

MIDWEST MARKETS LOCATIONS

CINCINNATI, OHIO

LOUISVILLE, KENTUCKY

DAYTON, OHIO

LEXINGTON, KY

CINCINNATI

Quarterly Rent Growth- 0.4%

Rent- $1,377

Rent/SF- $1.481

Occupancy- 94.7%

Units Completed in last 4 quarters- 3,559

Annual Supply Growth- 2.1%

Units under construction- 4,283

Projected Supply growth- 2.0%

Annual Job Additions- 2,100

QUARTER 1

development pipeline NEW CONSTRUCTION

supply occupancy

1| New apartment completions in Cincinnati were elevated by local standards recently, as 3,559 units delivered in the year-ending 1st quarter 2024.

2| With 150 units removed from existing stock over the past year, the local inventory base grew 2.1%. 3| In the past year, supply was greatest in Central Cincinnati and Southeast Cincinnati. 4| Annual new supply averaged 1,857 units, and annual inventory growth averaged 1.1% over the past five years. During that period, new supply was concentrated in Central Cincinnati and Campbell/Kenton Counties, which received 42% of the markets total completions. 5| At the end of 1st quarter 2024, there were 4,283 units under construction with 3,396 of those units scheduled to complete in the next four quarters. 6| Scheduled deliveries in the coming year are expected to be concentrated in Central Cincinnati, Boone County/Erlanger and Northeast Cincinnati/Warren County.

rent

1| Over the past five years, annual change in effective asking rents in Cincinnati ranged from 2.0% to 11.9%. 2| In 1st quarter 2024, effective asking rents for new leases were up 3.3% year-over- year. That annual rent performance was below the market’s five-year average of 5.7%. 3| Looking at product classes in Cincinnati, Class B led for rent performance over the past five years. 4| In 1st quarter 2024, annual effective rent change registered at 2.9% in Class A units, 3.1% in Class B units and 4.3% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in West Cincinnati and Boone County/Erlanger, both above 5%. The weakest performances were in Central Cincinnati and North Cincinnati, both at 1.1%. 6| In the coming year, effective asking rent growth in Cincinnati is expected to ease from the current level. 7| As of 1st quarter 2024, effective asking rental rates in Cincinnati averaged $1,377 per month, or $1.481 per square foot.

1| Occupancy in the Cincinnati apartment market has ranged from 94.7% to 98.2% over the past five years, averaging 96.4% during that period. 2| Over the past year, occupancy lost 0.9 points, with the 1st quarter 2024 rate landing at a six-year low of 94.7%. 3| Looking at product classes in Cincinnati, 1st quarter 2024 occupancy registered at 93.9% in Class A units, 94.6% in Class B units and 95.7% in Class C units. 4| Among submarkets, 1st quarter 2024 occupancy was strongest in Campbell/Kenton Counties (95.7%) and West Cincinnati (95.4%). 5| The weakest readings were seen in Central Cincinnati (92.1%) and North Central Cincinnati (93.4%). 6| During the coming year, occupancy in Cincinnati is expected to register around 94.5%.

demand

1| Over the past five years, annual absorption in Cincinnati has ranged from net move-outs from 1,652 units to demand for 4,537 units, averaging 1,571 units annually during that time. 2| In the year-ending 1st quarter 2024, the market recorded demand for 1,687 units, trailing concurrent supply volumes. 3| Among submarkets, the strongest absorption over the past five years was seen in Campbell/Kenton Counties, Northeast Cincinnati/Warren County and Central Cincinnati. Those areas accounted for 63% of the markets total demand over the past five years. 4| In the past year, demand was greatest in North Cincinnati, Campbell/Kenton Counties and Butler County.

for-sale housing

1| During the year-ending 1st quarter 2024, median home prices in Cincinnati increased an average of 5.3%, landing at a median price of roughly $284,000. 2| The median sales price averaged annual appreciation of 10.1% over the past five years. 3| Meanwhile, estimated home sales totaled roughly 22,800 homes over the past year, down 16.2% year-over-year. 4| The local homeownership rate averaged 69.6% in 2023, above the U.S. average of 65.9% during that same period.

capital markets

1| Transaction dollar volumes in Cincinnati totaled roughly $291.3 million in the year-ending 1st quarter 2024, down about 60% year-over-year. 2| Meanwhile, the number of transactions decreased about 52% over the past year, with 22 apartment properties trading hands. 3| Transactions in the year-ending 1st quarter 2024 yielded an average cap rate of 6.34%, up 86 basis points year-over year. 4| By comparison, cap rates averaged 5.59% in the Midwest region and 5.24% nationally. 5| Meanwhile, the average price per unit in Cincinnati came in at roughly $114,200, down 31.5% annually. 6| Cincinnati’s average price per unit landed below the norms for both the Midwest region ($151,200) and U.S. overall ($210,400).

HIGHEST OVERALL PERFORMING SUBMARKET

3,559 units completed in past 12 months 4,283 units currently in progress

LOWEST OVERALL PERFORMING SUBMARKETS

RENT GROWTH

SECTOR

EMPLOYMENT

ge aerospace

Locally based aircraft engine supplier GE Aerospace announced in March a plan to invest $650 million in its manufacturing sites and supplier partners, including $107 million in Cincinnati area facilities, after it becomes a spinoff from GE Vernova in April. The investments aim to enhance future flight technologies and safety measures, with over 1,000 jobs expected to be created across the firms U.S. factories, reports Cincinnati Business Courier. GE Aerospace aims to double revenue and reach $10 billion in profit by 2028, with a $15 billion share buyback. These investments aim to boost production and quality to meet growing demands from commercial and defense customers. GE Aerospace is a major player in the commercial aircraft engine industry.

duke energy center

New renderings for the renovation of Cincinnati’s Duke Energy Center were unveiled during Visit Cincy’s annual luncheon in January. The $200 million renovation project, set to begin this year, will add over 90,000 square feet of new space alongside a new 800-room hotel, according to local news.

Visit Cincy has partnered with the Cincinnati Regional Business Committee to develop a funding plan for a new sports commission aimed at boosting sports tourism in the area. This initiative, slated to launch in spring 2024, seeks to attract top-level sporting events to Cincinnati, filling a gap as the city currently lacks an active sports corporation.

amtrak green township

Amtrak rail service has plans for new routes linking Cincinnati, Cleveland, Columbus and Dayton to Detroit via Toledo. The Federal Railroad Administration awarded initial funding for these projects, which will undergo planning phases to determine costs, passenger estimates, travel times and station locations, reports the Mid-Ohio Regional Planning Commission. However, there’s uncertainty about whether all proposed routes will proceed to construction. Despite challenges, advocates argue that improved rail service will enhance productivity, economic impact and sustainability. The expansion is part of a broader $66 billion investment in rail infrastructure, supported by policy pushes from the federal government.

Green Township in West Cincinnati is scheduled to see significant developments, particularly in housing, infrastructure and public safety, in 2024. One notable project is Trailside Village, a large housing development focused on preserving natural features like woodlands and streams. This conservation development includes various types of homes and amenities integrated with the surrounding environment. Other housing developments by different builders are also underway, adding to the township’s residential options, reports Cincinnati.com. Additionally, the township is investing in enhancing public safety by constructing a new police station to accommodate the growing police department. Infrastructure improvements, such as new sidewalks, road enhancements, and trail expansions, are also planned

DAYTON

Quarterly Rent Growth- (0.1)%

Rent- $1,152

Rent/SF- $1.251

Occupancy- 95.1%

Units Completed in last 4 quarters- 1,065

Annual Supply Growth- 1.9%

Units under construction- 642

Projected Supply growth- 1.0%

Annual Job Additions- 900

QUARTER 1

development pipeline

NEW CONSTRUCTION

supply occupancy

1| New apartment completions in Dayton were elevated by local standards recently, as 1,065 units delivered in the year-ending 1st quarter 2024. Completions over the past year expanded the local inventory base 1.9%. 2| In the past year, supply was greatest in Central Dayton/Kettering. Annual new supply averaged 587 units, and annual inventory growth averaged 1.0% over the past five years. 3| During that period, new supply was concentrated in Central Dayton/Kettering, which received 37% of the market’s total completions. 4| At the end of 1st quarter 2024, there were 642 units under construction with 590 of those units scheduled to complete in the next four quarters. 5| Scheduled deliveries in the coming year are expected to be limited to Central Dayton/Kettering, North Dayton/Miami County and South Montgomery County.

rent

1| Over the past five years, annual change in effective asking rents in Dayton ranged from 2.2% to 10.2%. 2| In 1st quarter 2024, effective asking rents for new leases were up 5.0% year-over-year. That annual rent performance was slightly below the market’s five-year average of 5.5%. .3| Looking at product classes in Dayton, Class A led for rent performance over the past five years. 4| In 1st quarter 2024, annual effective rent change registered at 5.0% in Class A units, 3.7% in Class B units and 6.1% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in Northwest Dayton (6.0%) and Greene County (5.5%). 6| The weakest performances were in North Dayton/Miami County (3.3%) and Central Dayton/Kettering (4.3%). 7| Over the past five years, rent growth was strongest in South Montgomery County. 8| In the coming year, effective asking rent change in Dayton is expected to slow from the current level. 9| As of 1st quarter 2024, effective asking rental rates in Dayton averaged $1,152 per month, or $1.251 per square foot.

1| Occupancy in the Dayton apartment market has ranged from 95.1% to 98.0% over the past five years, averaging 96.5% during that period. 2| Over the past year, occupancy lost 0.7 points, with the 1st quarter 2024 rate landing at 95.1%. 3| Looking at product classes in Dayton, 1st quarter 2024 occupancy registered at 93.8% in Class A units, 95.4% in Class B units and 95.9% in Class C units. Occupancy in Class C product was generally tightest over the past five years. 4| Among submarkets, 1st quarter 2024 occupancy was strongest in Greene County (96.8%) and South Montgomery County (94.8%).

5| The weakest readings were seen in Northwest Dayton (92.9%) and North Dayton/Miami County (94.0%). 6| Over the past five years, Greene County generally led for occupancy. 7| During the coming year, occupancy in Dayton is expected to register around 94.5%.

the economy

1| Prior to the pandemic, Dayton’s real gross metropolitan product grew at an average annual rate of 1.4% from 2015 to 2019. During that same five-year period, job growth averaged 1.0% annually, with roughly 3,700 jobs added on average each year. 2| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 9.2% year-over-year in 2nd quarter. 3| In the year-ending 1st quarter 2024, the metro’s inflation-adjusted economic output expanded 2.5%. 4| The metro recorded a net gain of 900 jobs, expanding the employment base 0.2%. 5| Dayton’s unemployment rate in February 2024 rose 0.3 points year-over-year to 4.3%, in line with the national average of 4.2%. 6| During the past year, job gains in Dayton were most pronounced in the Leisure/Hospitality Services sector followed by Education/Health Services and Government. 7| Due to job losses stemming from the pandemic, Dayton’s current employment base now sits roughly 4,300 jobs or about 1% below the pre-pandemic level in February 2020.

1,065 units completed in past 12 months

642 units currently in progress

HIGHEST

RENT GROWTH

LOUISVILLE

Quarterly Rent Growth- 1.3%

Rent- $1,223

Rent/SF- $1.832

Occupancy- 94.1%

Units Completed in last 4 quarters- 1,265

Annual Supply Growth- 1.3%

Units under construction- 4,109

Projected Supply growth- 4.2%

Annual Job Additions- 3,500

QUARTER 1 NEW CONSTRUCTION

1| New apartment completions in Louisville/Jefferson County were modest recently, as 1,265 units delivered in the year-ending 1st quarter 2024. That annual completion volume was a seven-year low. With 8 units removed from existing stock over the past year, the local inventory base grew 1.3%. 2| In the past year, supply was greatest in Northeast Louisville. Annual new supply averaged 1,877 units, and annual inventory growth averaged 2.0% over the past five years. 3| During that period, new supply was concentrated in Northeast Louisville, which received 36% of the market’s total completions.

4| At the end of 1st quarter 2024, there were 4,109 units under construction with 2,666 of those units scheduled to complete in the next four quarters, which would be a new record high. 5| Scheduled deliveries in the coming year are expected to be largely concentrated in Southwest Louisville.

supply occupancy rent

1| Over the past five years, annual change in effective asking rents in Louisville/Jefferson County ranged from a decline of 0.1% to an increase of 12.1%.

2| In 1st quarter 2024, same-store effective asking rents for new leases were up 4.3% year-over-year. That annual rent performance was below the market’s five-year average of 5.1%. 3| Looking at product classes in Louisville/Jefferson County, Class A led for rent performance over the past five years. 4| In 1st quarter 2024, annual effective rent change registered at 3.5% in Class A units, 4.5% in Class B units and 5.4% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in South Central Louisville (6.0%) and Southeast Louisville (5.0%). 6| The weakest performances were in Northwest Louisville (2.5%) and Central Louisville (3.0%). 7| Over the past five years, rent growth was strongest in South Central Louisville. 8| In the coming year, same-store effective asking rent change in Louisville/Jefferson County is expected to slow from the current level.

1| Occupancy in the Louisville/Jefferson County apartment market has ranged from 94.0% to 97.3% over the past five years, averaging 95.3% during that period. 2| Over the past year, occupancy lost 0.9 points, with the 1st quarter 2024 rate landing at 94.1%. 3| Looking at product classes in Louisville/Jefferson County, 1st quarter 2024 occupancy registered at 93.8% in Class A units, 93.5% in Class B units and 95.2% in Class C units. Occupancy in Class C product was generally tightest over the past five years.4| Among submarkets, 1st quarter 2024 occupancy was strongest in South Central Louisville at 95.2% and Northwest Louisville at 94.5%. 5| The weakest readings were seen in Southwest Louisville and Central Louisville, both at 93.1%.

the economy

1| Prior to the pandemic, Louisville/Jefferson County’s real gross metropolitan product grew at an average annual rate of 2.0% from 2015 to 2019. During that same five-year period, job growth averaged 1.5% annually, with roughly 9,800 jobs added on average each year. 2| In 2020, COVID- 19 mitigation measures and limited business activity caused the local economy to contract as much as 7.6% year-over-year in 2nd quarter. 3| In the year-ending 1st quarter 2024, the metro’s inflation-adjusted economic output expanded 2.5%. 4| At the same time, the metro recorded a net gain of 3,500 jobs, expanding the employment base 0.5%. 5| Louisville/Jefferson County’s unemployment rate in February 2024 rose 0.1 point year-over-year to 4.4%, above the national average of 4.2%. 6| During the past year, job gains in Louisville/ Jefferson County were most pronounced in the Education/Health Services sector followed by Government. 7| Despite job losses stemming from the pandemic, Louisville/Jefferson County’s current employment base now sits roughly 16,900 jobs or about 3% above the pre-pandemic level in February 2020.

1,265 units completed in past 12 months

HIGHEST OVERALL PERFORMING SUBMARKET

4,109 units currently in progress

LOWEST OVERALL PERFORMING SUBMARKETS

RENT

Q1 2024 MARKET SNAPSHOT

LEXINGTON

Quarterly Rent Growth- 3.8%

Rent- $1,185

Rent/SF- $1.288

Occupancy- 95.0%

Units Completed in last 4 quarters- 254

Annual Supply Growth- 0.5%

Units under construction- 1,197

Projected Supply growth- 2.5%

Annual Job Additions- 3,900

QUARTER 1

development pipeline

NEW CONSTRUCTION

1| New apartment completions in Lexington-Fayette were modest recently, as 254 units delivered in the year-ending 1st quarter 2024. That annual completion volume was a 12-year low. 2| Completions over the past year expanded the local inventory base 0.5%. In the past year, supply was greatest in North Lexington. 3| Annual new supply averaged 485 units, and annual inventory growth averaged 1.0% over the past five years. During that period, new supply was concentrated in North Lexington, which received 42% of the market’s total completions. 4| At the end of 1st quarter 2024, there were 1,197 units under construction with 1,027 of those units scheduled to complete in the next four quarters. 5| Scheduled deliveries in the coming year are expected to be somewhat evenly distributed across North Lexington (380 units), Downtown Lexington/University (357 units) and South Lexington (290 units).

supply occupancy rent

1| Over the past five years, annual change in effective asking rents in Lexington-Fayette ranged from a decline of 0.2% to an increase of 15.5%. 2| In 1st quarter 2024, same-store effective asking rents for new leases were up 3.8% year-over-year. That annual rent performance was below the market’s five-year average of 6.5%. 3| Looking at product classes in Lexington- Fayette, Class A led for rent performance over the past five years. 4| In 1st quarter 2024, annual effective rent change registered at 5.1% in Class A units, 3.4% in Class B units and 2.7% in Class C units. 5| Among submarkets, the strongest annual rent change performance over the past year was in South Lexington (4.4%). 6| The weakest performance was in Downtown Lexington/University (1.8%). 7| Over the past five years, rent growth was strongest in South Lexington. 8| In the coming year, effective asking rent change in Lexington-Fayette is expected to remain around the current level. 9| As of 1st quarter 2024, effective asking rental rates in Lexington-Fayette averaged $1,185 per month, or $1.288 per square foot.

1| Occupancy in the Lexington-Fayette apartment market has ranged from 94.4% to 97.6% over the past five years, averaging 95.8% during that period.

2| Over the past year, occupancy lost 0.1 point, with the 1st quarter 2024 rate landing at 95.0%.3| Looking at product classes in Lexington-Fayette, 1st quarter 2024 occupancy registered at 96.0% in Class A units, 95.0% in Class B units and 93.5% in Class C units. 4| Occupancy in Class B product was generally tightest over the past five years. 5| Among submarkets, 1st quarter 2024 occupancy was strongest in North Lexington at 95.4%. 6| The weakest reading was seen in Downtown Lexington/University at 94.3%. 7| Over the past five years, North Lexington generally led for occupancy. During the coming year, occupancy in Lexington-Fayette is expected to register around 94% to 95%.

the economy

1| Prior to the pandemic, Lexington-Fayette’s real gross metropolitan product grew at an average annual rate of 1.8% from 2015 to 2019. During that same five-year period, job growth averaged 1.2% annually, with roughly 3,100 jobs added on average each year. 2| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 7.8% year-over-year in 2nd quarter. 3| In the year-ending 1st quarter 2024, the metro’s inflation-adjusted economic output expanded 2.9%. 4| The metro recorded a net gain of 3,900 jobs, expanding the employment base 1.3%. 5| Lexington-Fayette’s unemployment rate in February 2024 rose 0.6 points year-over-year to 4.2%, in line with the national average of 4.2%. 6| During the past year, job gains in Lexington-Fayette were most pronounced in the Government sector followed by Education/Health Services. 7| Despite job losses stemming from the pandemic, Lexington-Fayette’s current employment base now sits roughly 15,400 jobs or about 6% above the pre-pandemic level in February 2020.

254 units completed in past 12 months

1,197 units currently in progress

RENT GROWTH

UNRIVALED SUCCESS IN THE MIDWEST

YOUR TEAM

JORDAN DICKMAN

FIRST VICE PRESIDENTS DIRECTOR, NMHG

NICK ANDREWS

FIRST VICE PRESIDENTS DIRECTOR, NMHG

AUSTIN SUM

SENIOR INVESTMENT ASSOCIATE

AUSTIN Hall

INVESTMENT ASSOCIATE

ALDEN SIMMS

INVESTMENT ASSOCIATE

BROKER SUPPORT

SAM PETROSINO

VALUATION & RESEARCH

BRETT MARTIN

INTERNAL ACCOUNTANT

CORPORATE SUPPORT

LIZ POPP

MIDWEST OPERATIONS MANAGER

JOSH CARUANA VICE PRESIDENT

REGIONAL MANAGER

INDIANAPOLIS | CINCINNATI | LOUISVILLE | ST LOUIS | KANSAS CITY

JOHN SEBREE

SENIOR VICE PRESIDENT

NATIONAL DIRECTOR

NATIONAL MULTI HOUSING GROUP

MICHAEL GLASS

SENIOR VICE PRESIDENT

MIDWEST DIVISION MANAGER

NATIONAL DIRECTOR, MANUFACTURED HOME COMMUNITIES GROUP

PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.

BRITTANY CAMPBELL-KOCH

DIRECTOR OF OPERATIONS

ALEX PAPA

MARKETING COORDINATOR

OH - KY | MIDWEST | MULTIFAMILY

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