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2012 Statewide Conference

2012 Statewide Conference. Indiana Multifamily Housing Market and It’s Future. September 18, 2012. The Apartment Market. Overall Market Vacancy Rate Indianapolis Metro Area. Source: Tikijian Associates. Annual Revenue Growth (2011) 30 Property Sample – Class A & B - Well Managed.

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2012 Statewide Conference

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  1. 2012 Statewide Conference Indiana Multifamily Housing Market and It’s Future September 18, 2012

  2. The Apartment Market

  3. Overall Market Vacancy RateIndianapolis Metro Area Source: Tikijian Associates

  4. Annual Revenue Growth (2011)30 Property Sample – Class A & B - Well Managed Source: Tikijian Associates and Property Owners

  5. Total Residential Building PermitsIndianapolis Metro Area 7 Months annualized Source: US Census Bureau Residential Construction Branch

  6. Total Residential Building PermitsState of Indiana 7 Months annualized Source: US Census Bureau Residential Construction Branch

  7. Monthly Residential Building PermitsIndianapolis MSA Valley 1/09 195 Units Source: US Census Bureau Residential Construction Branch

  8. New Apartment DevelopmentIndianapolis Metro Area Trailing 12 Mos. 7/12 Source: Tikijian Associates

  9. New Market Rate Projects in the Pipeline Source: Tikijian Associates

  10. Total Tax Credit DevelopmentState of Indiana Source: IHCDA

  11. Average Sale Cap RatesIndianapolis Metro Area - Class “B” or better Why? How? 3.5% rate, 30 year amortization = 5.4% Constant Prelim. Source: Tikijian Associates Source: Tikijian Associates

  12. 2011 National Lender Composition

  13. GSE (Government Sponsored Enterprises) – • in 2011 represented 65% of new loans • Freddie Mac: • up to 80% LTV, mostly likely 70% to 75% LTV in Indiana • 3.50% to 4.00% interest rates (7 & 10 Year Term) • Some Flexibility on Terms: fixed or floating rate, potential interest only period • Capped ARM is comparable to a Bank Term Loan • Fannie Mae: • up to 80% LTV, most likely 65% to 70% LTV in Indiana • Indiana is a Pre-Review State • 3.50% to 4.00% interest rates (7 & 10 Year Term) • FHA/HUD 223(f): • up to 83.3% LTV acquisition, 80% LTV refinance • 35 Year Fully Amortizing, Non-Recourse Loan • 2.75% -3.75% All-in Rate (incl. .45% MIP increasing to .60%) • 6 Month +/- Time Frame • Downside: Higher fees, potentially higher reserves, required audit and bi-annual limit on owner distributions (surplus cash calculations)

  14. Bank Loans - in 2011 represented 20% of new loans • Development Loans (up to 90% loan to cost) • Bridge Loans • Offers more flexibility (prepayment) but almost always recourse • More variation on rates and terms, typically a floor rate around 4% • Decisions based on global financial analysis of borrower • CMBS • Still not active in our market • Potential loan for lower quality product and borrower credit quality • Life Companies • Up to 75% LTV (won’t go higher – prefer 60% – 65% LTV) • Rates 4.25 – 4.00 • Advantages: no required replacement reserves, Loan sizes range from$2M and can do very large deals

  15. Questions & Discussion

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