Quarterly Q2 2022

ANDREWS | DICKMAN GROUP

Q2

CINCINNATI LOUISVILLE LEXINGTON DAYTON

INTR O DUCTION The Federal Reserve raised the tar-

emerge that could impede the at-

get range for the fed funds rate by

tainment of the Committee’s goals.

75bps to 2.25%-2.5% during its July

During the regular press conference,

2022 meeting, the fourth consecu-

Chair Powell said he could not pre-

tive rate hike, and pushing borrowing

dict monetary policy range for next

costs to the highest level since 2019,

year and that next decisions will be

matching market forecasts. The cen-

data dependent. Powell also said the

tral bank said that ongoing increases

central bank will be looking for mod-

in the target range will be appropri-

erately restrictive level by the end of

ate and that it is prepared to adjust

the year, meaning a 3% to 3.5% level

the stance of monetary policy if risks

for the fed funds rate.

AS O F RECENT, we have seen several lenders, in particular, the Debt Funds who experienced ex-

and what sellers are willing to accept. It will just take time for this to work itself

treme popularity with value-add investors during the last 18 months, go pencils

out. Class A Multifamily pricing is off about 5% from Q1. The Workforce housing

down. The Agencies are largely on the sidelines as their underwriting criteria

(Class B & C) pricing is off 10%, or possibly even more, in inferior locations. With

have them sizing to sub-50% LTV on most deals due to rising interest rates and

that said, to put this in perspective for the Class A product specifically, a 5% price

the fixed-rate equivalent sizing rates they use. So, while you can get a loan from

reduction generally indicates we are back to where deals were priced in Q4 of

Fannie or Freddie, due to the LTV’s, they just don’t make much sense from an

2021.

economic viewpoint in most cases today. So, what was a very active, deep, and diverse lender pool in Q1 has now thinned out dramatically in Q2. As a result, the overall leverage available is lower, in addition to the lender spreads widening on top of the higher indexes. Consequently, sellers’ pricing expectations have decreased, but there still appears to be a bid/ask spread between what buyers want Q2

C INC INN ATI

2ND QUA RT ER S N A PSHOT Cincinnati recorded absorption of just 436 units during 2nd quarter 2022, in what is usually a seasonally strong period, while inventory grew by 1,079 units. Annually, the market absorbed 3,889 units and inventory expanded by 1,846 units, on net. In turn, occupancy fell 0.4 points quarter-over-quarter but rose 1.3 points year-over-year, with the 2nd quarter 2022 occupancy rate landing at 97.8%. On the pricing side, effective asking rents increased 11.7% year-over-year - a record high - buoyed by 2. 9% growth specifically in 2nd quarter. As of 2nd quarter 2022, effective asking rental rates in Cincinnati averaged $1,215 per month, or $1.307 per square foot.

Quarterly Rent Growth- 2.9% Rent- $1,215 Rent/SF- $1.307 Occupancy- 97.8% Units Completed in last 4 quarters- 2,022 Annual Supply Growth- 1.10% Units under construction- 6,399 Projected Supply growth- 1.89% YTD 2022 Job Change- 15,000

DAY TO N Quarterly Rent Growth – 2.5% Rent- $1,031 Rent/SF- $1.138 Occupancy- 97.5% Units Completed in last 4 quarters- 370 Annual Supply Growth- 0.7% Units under construction- 708 Projected Supply growth- 1.25% YTD 2022 Job Change- 9,800

LOUISV ILLE Quarterly Rent Growth- 4.0% Rent- $1,097 Rent/SF- $1.167 Occupancy- 96.8% Units Completed in last 4 quarters- 1,755 Annual Supply Growth- 1.9% Units under construction- 1,822 Projected Supply growth- 1.94% YTD 2022 Job Change- 21,000

LEXINGTON Quarterly Rent Growth- 5.2% Rent- $1,097 Rent/SF- $1.215 Occupancy- 97.4% Units Completed in last 4 quarters- 454 Annual Supply Growth- 1.0% Units under construction- 566 Projected Supply growth- 1.23% YTD 2022 Job Change- 8.900

3

C INC IN N ATI C INC IN N ATI C INC IN N ATI

ECONOMY 1| In the year-ending 2nd quarter 2022, the metro’s inflation-adjusted economic output expanded 1.2%. 2| At the same time, the metro recorded a net gain of 15,000 jobs, expanding the employment base 1 .4%. 3| Cincinnati’s unemployment rate in May 2022 declined 1.3 points year-over-year to 3.0%, below the national average of 3.4%. 4| Despite job losses stemming from the pandemic, Cincinnati’s current employment base now sits roughly 71,600 jobs, or about 7% above the 1st quarter 2008 level, prior to the Great Recession.

CAPITAL MARKETS

UNITS COMPLETIONS BY QUARTER Historic & Projected

1| Transaction dollar volumes in Cincinnati totaled roughly $456.8 million in the year-ending 2nd Quarter 2022, up about 13% year-over-year. 2| Mean-

2,500

while, the number of transactions increased about 6% over the past year, with

2,000

36 apartment properties trading hands.

2nd Quarter 2022 yielded an average cap rate of 5.47%, down 30 basis points

1,500

year-over year. By comparison, cap rates averaged 5.10% in the Midwest region and 4.57% nationally. 4| Meanwhile, the average price per unit in Cincin-

1,000

nati came in at roughly $122,100, up 45.9% annually.

500 0

3| Transactions in the year-ending

RENT 21’ Q2

21’ Q3

21’ Q4

22’ Q1

COMPLETED

22’ Q2

22’ Q3

22’ Q4

23’ Q1

23’ Q2

UNDER CONSTRUCTION

1| Over the past five years, annual change in effective asking rents in Cincinnati ranged from 1.6% to the current all-time high of 11 .7% in 2nd Quarter 2022.

2| In 2nd quarter 2022, annual effective rent change registered

at 14.3% in Class A units, 12.4% in Class B units and 7.1% in Class C units, all record highs.

3| Among submarkets, the strongest annual rent change

performances over the past year were in Boone County/Erlanger and Butler County, both at 13.6%. The weakest performances were in West Cincinnati and Central Cincinnati. As of 2nd quarter 2022, effective asking rental rates in Cincinnati averaged $1,215 per month, or $1.307 per square foot.

Q2

CINCINNATI VS NATIONAL RENT GROWTH Year-over-Year

RENT GROWTH Sector

Quarterly

Yearly

Boone County / Erlanger

2.0%

13.6%

Butler County

4.2%

13.6%

North Central Cincinnati

2.1%

12.3%

Campbell / Kenton Counties

3.5%

12.1%

Northeast / Warren County

3.4%

12.0%

Southeast Cincinnati

3.9%

11.7%

North Cincinnati

1.8%

10.5%

Central Cincinnati

1.9%

9.6%

West Cincinnati

1.9%

7.1%

20% 15% 10% 5% 0%

OCT 21’

Q1 2022 MARKET SNAPSHOT

NOV 21’

DEC 21’

JAN 22’

FEB 22’

MAR 22’

CINCINNATI Pre-1970s

1970s

1980s

1990s

2000+

Occupancy

97.8%

97.8%

97.9%

97.6%

97.9%

Y-O-Y Rent Growth

12.4%

11.7%

12.1%

13.3%

10.4%

Average Rent Per Unit

$964

$1,011

$1,142

$1,267

$1,559

APR 22’

MAY 22’

JUN 22’

NATIONAL

EMPLOYMENT Unemployment Rate Jobs Added YTD

3.0%

CINCINNATI RENT GROWTH BY ASSET CLASS Year-over-Year

15,000

Availability

Market

Nationally

Vacancy Rate

2.2%

5.2%

Vacant Units

5.9K

952K

$1,215

$1,640

Concession Rate

0.4%

0.6%

Studio Asking Rent

$892

$1,491

1 Bedroom Asking Rent

$967

$1,482

2 Bedroom Asking Rent

$1,199

$1,715

3 Bedroom Asking Rent

$1,502

$2,092

Market Effective Rent/Unit

12% 8% 4% 0%

OCT 21’

NOV 21’

DEC 21’

LIFESTYLE

JAN 22’

FEB 22’

MAR 22’

APR 22’

MAY 22’

JUN 22’

RENTERS BY NECESSITY

5

Q2 MARKET DEMAND 1| Over the past five years, annual absorption in Cincinnati has ranged from 581 units to 4,515 units, averaging 2,267 units annually during that time. In the year-ending 2nd quarter 2022, the market recorded demand for 3,889 units, exceeding concurrent supply volumes by almost twice.

2| Among submar-

kets, the strongest absorption over the past five years was seen in Central Cin-

Highest Overall Performing Submarket Submarkets

Rent

Occupancy

YOY

Dearborn County

$1,087

97.6%

18.9%

Florence – East/Erlanger

$1,012

97.4%

18.5%

Burlington/Hebron

$1,155

97.4%

17.6%

West Chester – West

$1,518

97.0%

17.1%

Alexandria/Cold Springs

$1,187

98.3%

16.6%

LOWEST OVERALL PERFORMING SUBMARKETS Submarkets

Rent

Occupancy

YOY

Cincinnati – Roselawn

$867

97.9%

5.7%

SUPPLY

Oxford

$1,626

-

4.8%

1| The level of new apartment completions in Cincinnati were modest recently, as 2,022 units delivered in the year-ending 2nd quarter 2022. 2| Annual new

Cincinnati – Avondale

$1,415

94.3%

4.4%

Cincinnati – English Woods/Price Hill

$818

94.2%

3.9%

Cincinnati – Clifton

$981

88.9%

2.4%

cinnati, Northeast Cincinnati/Warren County and Campbell/Kenton Counties.

supply averaged 1,485 units, and annual inventory growth averaged 0.9% over the past five years.

3| Over the next year, inventory growth is set to accelerate

with the scheduled addition of 3,114 units. At the end of 2nd quarter 2022, there

TOTAL FUTURE INVENTORY GROWTH

were 6,399 units under construction. 4| Scheduled new deliveries in the coming

Submarket

year are expected to be concentrated in North Central Cincinnati and Campbell/

Butler County

5.9%

Kenton Counties, although activity is increasing in Boone County/Erlanger.

Central Cincinnati

5.5%

2,022

Boon County/Erlanger

5.4%

Campbell/Kenton County

5.3%

units completed in past 12 months

North Central Cincinnati

4.8%

3,114

UNITS UNDER CONSTRUCTION

units currently in progress

Change

Sector

Units

Butler County

1,177

North Central Cincinnati

1,061

Campbell/Kenton Counties

1,058

Central Cincinnati

895

Southeast Cincinnati

775

Q2

D EV ELOPMENT PIPLINE M A P - C IN C IN N AT I

7

DAY TO N DAY TO N DAY TO N

ECONOMY 1| Job growth averaged 1.0% annually, with roughly 3,900 jobs added on average each year. 2| In the year-ending 2nd quarter 2022, the metro’s inflation-adjusted economic output expanded 1. 7%. 3| The Dayton metro recorded a net gain of 9,800 jobs, expanding the employment base 2.6%. 4| Dayton’s unemployment rate in May 2022 declined 2.0 points year-over-year to 3.2%, below the national average of 3.4%.

OCCUPANCY 1| Over the past year, occupancy gained 0.7 points, with the 2nd quarter 2022 rate landing at 97.5%. 2| Product classes in Dayton for 2nd quarter 2022 oc-

UNITS COMPLETIONS BY QUARTER Historic & Projected 500

cupancy registered at 96.9% in Class A units, 98.1% in Class B units and 97.4% in Class C units.

400

3| Dayton 2nd quarter 2022 occupancy was strongest in

Greene County and Central Dayton/Kettering. The weakest reading was seen in Northwest Dayton, the only submarket below 97% occupancy. Over the past

300

five years, North Dayton/Miami County generally led for occupancy. During

200

the coming year, occupancy in Dayton is expected to register around 97%.

100

RENT

0

21’ Q2

21’ Q3

21’ Q4

22’ Q1

COMPLETED

22’ Q2

22’ Q3

22’ Q4

23’ Q1

23’ Q2

UNDER CONSTRUCTION

1| Over the past five years, annual change in effective asking rents in Dayton ranged from 1 .8% to the current all-time high of 9.9% in 2nd quarter 2022. 2| In 2nd quarter 2022, annual effective rent change registered at 13.3% in Class A units, 8.3% in Class B units and 8.2% in Class C units, with both Class B and C product hitting record highs.

3| Among submarkets, the strongest annual

rent change performances over the past year were in Northwest Dayton and South Montgomery County, both in double digits. The weakest performances were in Central Dayton/Kettering and Greene County, at 9.0% and 9.4%, respectively.

Q2

DAYTON VS NATIONAL RENT GROWTH Year-over-Year

RENT GROWTH Sector

Quarterly

Yearly

Northwest Dayton

2.1%

11.2%

South Montgomery County

1.8%

10.8%

North Dayton / Miami County

4.1%

9.8%

Greene County

3.4%

9.4%

Central Dayton / Kettering

2.0%

9.0%

20% 15% 10% 5% 0%

OCT 21’

Q1 2022 MARKET SNAPSHOT

NOV 21’

DEC 21’

JAN 22’

FEB 22’

MAR 22’

DAYTON Pre-1970s

1970s

1980s

1990s

2000+

Occupancy

96.9%

97.3%

97.5%

98.1%

97.8%

Y-O-Y Rent Growth

8.7%

8.9%

11.5%

9.6%

11.2%

Average Rent Per Unit

$839

$886

$945

$1,113

$1,389

APR 22’

MAY 22’

JUN 22’

NATIONAL

EMPLOYMENT Unemployment Rate

3.2%

Jobs Added YTD

9,800

DAYTON RENT GROWTH BY ASSET CLASS Year-over-Year

Availability

Market

Nationally

Vacancy Rate

2.6%

5.2%

Vacant Units

2K

952K

$1,097

$1,640

Concession Rate

0.5%

0.6%

Studio Asking Rent

$781

$1,491

Market Effective Rent/Unit

14% 10% 6% 0%

OCT 21’

NOV 21’

DEC 21’

LIFESTYLE

JAN 22’

FEB 22’

MAR 22’

APR 22’

MAY 22’

JUN 22’

RENTERS BY NECESSITY

9

Q2 MARKET

Highest Overall Performing Submarket

DEMAND 1| The level of new apartment completions in Dayton were modest recently,

Submarkets

Rent

Occupancy

YOY

West Carrollton

$1,021

94.4%

21.0%

Huber Heights

$1,074

97.6%

18.8%

Bellbrook

$1,467

98.0%

17.0%

as 370 units delivered in the year-ending 2nd quarter 2022.

2| Completions

Miamisburg

$1,195

96.6%

14.2%

over the past year expanded the local inventory base 0.7%.

3| Over the next

Springfield

$830

97.5%

13.4%

year, inventory growth is set to accelerate slightly with the scheduled addition of 708 units.

LOWEST OVERALL PERFORMING SUBMARKETS Submarkets

Rent

Occupancy

YOY

370

Vandalia

$771

95.1%

9.1%

Northridge

$722

94.2%

8.1%

Kettering – West

$1,056

97.2%

7.3%

Englewood

$942

92.3%

6.9%

Dayton - Downtown

$1,210

96.0%

6.4%

units completed in past 12 months

9,800

units currently in progress TOTAL FUTURE INVENTORY GROWTH Submarket

Change

Central Dayton / Kettering

4.8%

North Dayton / Miami County

4.6%

UNITS UNDER CONSTRUCTION Sector

Units

Central Dayton / Kettering

723

North Dayton / Miami County

384

Q2

D EV ELOPMENT PIPLINE M A P - DAY TO N

11

LOUIS V ILLE LOUIS V ILLE LOUIS V ILLE

ECONOMY 1| In the year-ending 2nd quarter 2022, the metro’s inflation-adjusted economic output expanded 0.5%. 2| At the same time, the metro recorded a net gain of 21,100 jobs, expanding the employment base 3.2%. 3| Louisville/Jefferson County’s unemployment rate in May 2022 declined 0.3 points year-over-year to 3. 7%, above the national average of 3.4%.

4|

During the past year, job gains in Louisville/ Jefferson County were most pronounced in the Leisure/Hospitality Services sector followed by Professional/Business Services.

UNITS COMPLETIONS BY QUARTER Historic & Projected

OCCUPANCY

3,000

1| Over the past year, occupancy gained 1.1 points, with the 2nd quarter 2022 rate landing at 96.8%. 2| Looking at product classes in Louisville/Jefferson

2,500

County, 2nd quarter 2022 occupancy registered at 96.0% in Class A units, 96.9% in Class B units and 97.6% in Class C units.

2,000

3| Among submarkets,

2nd quarter 2022 occupancy was strongest in Northwest Louisville (97.8%) and Southeast Louisville (97.4%). The weakest readings were seen in Central

1,500

Louisville {94.9%) and

Southwest Louisville (96.0%), the only submarkets

below 97% occupancy.

1,000

RENT

0

21’ Q2

21’ Q3

21’ Q4

22’ Q1

COMPLETED

22’ Q2

22’ Q3

22’ Q4

23’ Q1

23’ Q2

UNDER CONSTRUCTION

1| The recent annual rent performance was an all-time high for the market of 11.9%. 2| In 2nd quarter 2022, annual effective rent change registered at 14.6% in Class A units, 12.1% in Class B units and 7.8% in Class C units.

3| Among submarkets, the strongest annual rent change performances over the past year were in Central Louisville (16.8%) and Northeast Louisville (12.1%). The weakest performances were in Northwest Louisville (8.6%) and South-Central Louisville (10.9%).

Q2

LOUISVILLE VS NATIONAL RENT GROWTH Year-over-Year

RENT GROWTH Sector

Quarterly

Yearly

Central Louisville

5.1%

16.8%

Northeast Louisville

5.5%

12.1%

Southeast Louisville

2.9%

11.6%

Southwest Louisville

3.7%

11.0%

South Central Louisville

2.3%

10.9%

Northwest Louisville

3.4%

9.6%

20% 15% 10% 5% 0%

OCT 21’

NOV 21’

Q1 2022 MARKET SNAPSHOT

DEC 21’

JAN 22’

FEB 22’

MAR 22’

LOUISVILLE Pre-1970s

1970s

1980s

1990s

2000+

Occupancy

95.0%

97.1%

96.5%

98.5%

97.0%

YoY Rent Growth

13.3%

13.0%

14.7%

10.3%

9.8%

Average Rent Per Unit

$922

$947

$1,058

$968

$1,306

APR 22’

MAY 22’

JUN 22’

NATIONAL

EMPLOYMENT Unemployment Rate Jobs Added YTD

3.7%

LOUISVILLE RENT GROWTH BY ASSET CLASS Year-over-Year

21,100

Availability

Market

Nationally

Vacancy Rate

3.2%

5.2%

Vacant Units

4.5K

952K

$1,097

$1,640

Market Effective Rent/Unit

12% 8% 4% 0%

OCT 21’

NOV 21’

DEC 21’

LIFESTYLE

JAN 22’

FEB 22’

MAR 22’

APR 22’

MAY 22’

JUN 22’

RENTERS BY NECESSITY

13

Q2 MARKET

Highest Overall Performing Submarket Submarkets

Rent

Occupancy

YOY

Shepherdsville

$977

98.7%

29.9%

Pleasure Ridge Park

$978

97.2%

15.9%

Jeffersontown

$1,117

96.5%

14.7%

1| The level of new apartment completions in Louisville/ Jefferson County

Springhurst/Glenview Manor

$1,403

96.5%

14.0%

was moderate recently, as 1,755 units delivered in the year-ending 2nd quarter

Douglas Hills/Lydon

$1,348

96.5%

12.9%

SUPPLY

2022.

2| Completions over the past year expanded the local inventory base

1. 9%. Over the next year, inventory growth is set to remain around the current level with the scheduled addition of 1,822 units.

3| At the end of 2nd quarter

2022, there were 2,607 units under construction. Among submarkets, new supply over the past five years has been concentrated in Northeast Louisville, which received one-third of the market’s total completions over that time.

Scheduled new deliveries in the coming year are expected to be concentrated in Northwest Louisville and Southwest Louisville.

1,775

LOWEST OVERALL PERFORMING SUBMARKETS Submarkets

Rent

Occupancy

YOY

Charlestown/Sellersburg

$1,030

96.6%

8.0%

Central Downtown/Old Louisville

$1,459

88.3%

7.8%

La Grange/Crestwood

$1,102

99.0%

6.0%

Elizabethtown

$930

99.1%

5.4%

Shelbyville

$926

99.6%

2.8%

units completed in past 12 months

TOTAL FUTURE INVENTORY GROWTH

2,607

Submarket

units currently in progress

Change

Northwest Louisville

5.8%

Southwest Louisville

3.8%

Southeast Louisville

1.8%

Northeast Louisville

1.8%

South Central Louisville

1.6%

UNITS UNDER CONSTRUCTION Sector

Units

Southwest Louisville

964

Northwest Louisville

744

Northeast Louisville

320

South Central Louisville

240

Southeast Louisville

198

Q2

D EV ELOPMENT PIPLINE M A P - LOUIS V ILLE

15

LEX IN GTON LEX IN GTON LEX IN GTON

ECONOMY 1| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 9.9% year-over-year in 2nd quarter. In the year-ending 2nd quarter 2022, the metro’s inflation-adjusted economic output expanded O.S.%.

2| The metro recorded a net

gain of 8,900 jobs, expanding the employment base 3.3%. As such, Lexington-Fayette’s unemployment rate in May 2022 declined 0.8 points yearover-year to 2.9%, below the national average of 3.4%.

3| During the past year, job gains in Lexington-Fayette were most pronounced in the Leisure/Hospitality Services sector followed by Government and Professional/Business Services.

UNITS COMPLETIONS BY QUARTER Historic & Projected

OCCUPANCY 1| Over the past year, occupancy gained 1.1 points, with the 2nd quarter 2022 rate landing at 97.4%. 2| Product classes in Lexington/Fayette, 2nd quarter

1,000

2022 occupancy registered at 97.1% in Class A units, 97.4% in Class B units

800

and 97.8% in Class C units.

3| Among submarkets, 2nd quarter 2022 oc-

600

cupancy was strongest in North Lexington. The weakest reading was seen

400

Lexington/University generally led for occupancy. During the coming year, oc-

in Downtown Lexington/University.

4| Over the past five years. Downtown

cupancy in Lexington/Fayette is expected to register around 95.5%.

200 0

RENT 21’ Q2

21’ Q3

21’ Q4

22’ Q1

COMPLETED

22’ Q2

22’ Q3

22’ Q4

23’ Q1

23’ Q2

UNDER CONSTRUCTION

1| Over the past five years. annual change in effective asking rents in Lexington-Fayette ranged from a decline of 0.2% to a record high increase of 15.4% in 2nd quarter 2022. That recent annual rent performance was above the market’s five-year average of 4. 7%.

2| In 2nd quarter 2022, annual effec-

tive rent change registered at 19.0% in Class A units, 14.1% in Class B units and 9.6% in Class C units.

3| Among submarkets, the strongest annual rent

change performance over the past year was in Downtown Lexington/University. The weakest performance was in North Lexington, though still double-digit Q2

rent growth.

LEXINGTON VS NATIONAL RENT GROWTH Year-over-Year

RENT GROWTH Sector

Quarterly

Yearly

Downtown Lexington / University

6.5%

18.2%

South Lexington

5.4%

16.2%

North Lexington

3.5%

10.3%

20% 15% 10% 5% 0%

OCT 21’

Q1 2022 MARKET SNAPSHOT

NOV 21’

DEC 21’

JAN 22’

FEB 22’

MAR 22’

LEXINGTON Pre-1970s

1970s

1980s

1990s

2000+

Occupancy

95.3%

96.7%

97.4%

97.4%

98.1%

Y-O-Y Rent Growth

15.8%

18.1%

15.7%

17.2%

13.1%

Average Rent Per Unit

$826

$973

$998

$1,153

$1,276

APR 22’

MAY 22’

JUN 22’

NATIONAL

EMPLOYMENT Unemployment Rate

2.9%

Jobs Added YTD

8,900

LEXINGTON RENT GROWTH BY ASSET CLASS Year-over-Year

Availability

Market

Nationally

Vacancy Rate

2.6%

5.2%

Vacant Units

2K

952K

$1,097

$1,640

Concession Rate

0.5%

0.6%

Studio Asking Rent

$781

$1,491

Market Effective Rent/Unit

15% 10% 5% 0%

OCT 21’

NOV 21’

DEC 21’

LIFESTYLE

JAN 22’

FEB 22’

MAR 22’

APR 22’

MAY 22’

JUN 22’

RENTERS BY NECESSITY

17

Q2 MARKET

Highest Overall Performing Submarket Submarkets

Rent

Occupancy

YOY

Lexington – South Central

$1,089

95.2%

19.3%

Lexington – South

$1,194

95.9%

17.3%

1| The level of new apartment completions in Lexington-Fayette were modest recently, as 454 units delivered in the year-ending 2nd quarter 2022. 2| Com-

Scott

$1,185

96.8%

16.9%

Lexington – East

$1,157

94.7%

14.1%

pletions over the past year expanded the local inventory base 1.0%. Over the

Lexington - Downtown

$1,112

87.8%

12.3%

SUPPLY

next year, inventory growth is set to remain around the current level with the scheduled addition of 566 units. 3| At the end of 2nd quarter 2022, there were 636 units under construction.

4| Among submarkets, new supply over the

past five years has been concentrated in South Lexington, which received 68% of the market’s total completions over that time. Scheduled new deliveries in the coming year are expected to be concentrated in North Lexington.

454

LOWEST OVERALL PERFORMING SUBMARKETS Submarkets

Rent

Occupancy

YOY

Lexington – Southwest

$1,259

94.4%

8.3%

Jessamine

$1,109

95.9%

8.1%

Lexington – North

$910

98.3%

7.2%

Franklin

$861

93.0%

5.5%

Madison

$774

95.0%

3.5%

units completed in past 12 months

636

units currently in progress

TOTAL FUTURE INVENTORY GROWTH Submarket

Change

North Lexington

4.5%

South Lexington

0.5%

Downtown Lexington / Downtown

0.0%

UNITS UNDER CONSTRUCTION Sector

Units

North Lexington

546

South Lexington

90

Q2

D EV ELOPMENT PIPLINE M A P - LEXIN GTON

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A DG MU LTIFA MILY INVESTMENT ASSOCIATES Austin Sum Senior Investment Associate JD Schmerge Associate Tim VanWingerden Associate Brian Johnston Associate Jordan Dickman First Vice President of Investment

Nick Andrews First Vice President of Investment

E: jordandickman@marcusmillichap.com P: 513 -878 - 7735

E: nicholas.andrews@marcusmillichap.com P: 513 -878 - 7741

RESEARCH & EVALUATION Sam Petrosino Financial Analyst CLIENT RELATIONS Skyler Wilson Client Relations Manager MARKETING Alex Papa Marketing Coordinator OPERATIONS

Austin Sum Senior Associate E: austin.sum@marcusmillichap.com P: 513 -878 - 7747

Q2

Brittany Campbell-Koch Director of Operations

CONFIDENTIALITY & DISCLAIMER The information contained in the following pro-

subject property, the future projected financial

posal is proprietary and strictly confidential. It is

performance of the property, the size and square

intended to be reviewed only by the party receiv-

footage of the property and improvements, the

ing it from Marcus & Millichap and it should not

presence of absence of contaminating substanc-

be made available to any other person or entity

es, PCBs or asbestos, the compliance with local,

without the written consent of Marcus & Millichap.

state and federal regulations, the physical con-

By taking possession of and reviewing the infor-

dition of the improvements thereon, or financial

mation contained herein the recipient agrees to

condition or business prospects of any tenant, or

hold and treat all such information in the strictest

any tenant’s plans or intentions to continue its oc-

confidence. The recipient further agrees that re-

cupancy of the subject property.

cipient will not photocopy or duplicate any part of

The information contained in this proposal has

the proposal. If you have no interest in the subject

been obtained from sources we believe reliable;

property, please promptly return this proposal to

however, Marcus & Millichap has not verified, and

Marcus & Millichap. This proposal has been pre-

will not verify, any of the information contained

pared to provide summary, unverified financial

herein, nor has Marcus & Millichap conducted any

and physical information to prospective purchas-

investigation regarding these matters and makes

ers, and to establish only a preliminary level of in-

no warranty or representation whatsoever regard-

terest in the subject property.

ing the accuracy or completeness of the infor-

The information contained herein is not a substi-

mation provided. All potential buyers must take

tute for a thorough due diligence investigation.

appropriate measures to verify all of the informa-

Marcus & Millichap has not made any investiga-

tion set forth herein. Prospective buyers shall be

tion, and makes no warranty or representation

responsible for their costs and expenses of inves-

with respect to the income or expenses for the

tigating the subject property.

PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.

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Q2 Our commitment is to help our clients create and preserve wealth by providing them with the best real estate investment sales, financing, research and advisory services available www.adgmultifamily.com