DENVER, COLORADO MARKET OVERVIEW & MULTIFAMILY HOUSING UPDATE

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1 DENVER, COLORADO MARKET OVERVIEW & MULTIFAMILY HOUSING UPDATE RED Capital Group 14 September 2014 PAYROLL JOB SUMMARY Total Payrolls 1,329.9m Annual Change 35.7m (2.8%) 2014 Forecast 38.7m 2015 Forecast 44.0m 2016 Forecast 34.1m 2017 Forecast 30.3m Unemployment 5. (July) 14 PAYROLL TRENDS AND FORECAST The pace of job creation remained brisk during the spring quarter as Denver payrolls increased at a 35,700-job, 2.8% year-on-year rate, representing the tenth consecutive quarter of 2.5% or faster annual job growth. Gains were well balanced across sectors: goods producing industries expanded at a 5,200-job, 3.7% rate, while skilled services employers hired workers at a combined 17,600-job, 4.5% pace, incorporating a 5,500-job, 4.8% surge in the tech- and energy-driven professional, technical and scientific services sub-sector. Growth in consumer-driven industries also was robust as retail trade and leisure services employers increased headcount at a combined 8,300-job, 3.1% rate. Seasonally-adjusted data recorded a moderate slowing trend, with net gains of 8,800 jobs during the April-to-June period, down from 11,200 and 9,800 job adds in the previous and year earlier quarters, respectively. Preliminary July reports suggest that a vigorous mid-summer rebound may be underway, however, as establishments added a net of 8,400 workers during the month. RED Research specified a 99. adjusted-r 2 payroll growth model using two lags of the dependent variable and U.S. payroll and metro personal income and home price variables. The model forecasts faster y-o-y expansion in 2H14 and 2015 averaging about 3.3%. The pace of growth is likely to decelerate gradually during the backend of the forecast, falling below in 2017 and 2018 as the U.S. recovery enters its late innings. OCCUPANCY RATE SUMMARY Occupancy Rate (Reis) 96. RED 50 Rent Chg. Rank Annual Chg. (Reis) 23 rd Unch d RCR YE14 Forecast 95. RCR YE15 Forecast 95.3% RCR YE16 Forecast 95.1% RCR YE17 Forecast 94.3% 14 ABSORPTION AND OCCUPANCY RATE TRENDS Tenant demand was moderately softer across the Denver area during the second quarter as renters net leased 804 vacant units, down from 1,282 and 1,352 in the prior and year-earlier quarters, respectively, according to Reis. A decrease in new supply delivered to market was partially responsible, as households were offered 1,093 units of coveted new space in 14, down from 1,549 during the first quarter. Still, occupancy declined sequentially for the second consecutive quarter, dropping 20 basis points to 96.. Axiometrics surveys of larger, stabilized same-store properties found that average 14 occupancy was about 95.8%, reflecting a 70 bps sequential and 30bps year-on-year advance. Class-C assets posted the highest average occupancy (96.), followed by class-b (95.7%) and class-a (95.3%). Lower occupancy was observed in core urban infill submarkets feeling the greatest amount of supply pressure: units in stabilized Central and Downtown submarket buildings were 92.7% and 94.9% occupied in 14. Nevertheless, absorption of space in new properties was strong, averaging about 15 units per month, in line with recent market norms. RCR s absorption model foresees further strong Denver apartment demand, filling an average of nearly 5,000 units annually over the forecast. But supply is likely to be heavier (over 6,000 units/year), pushing metro occupancy down to the mid-9 range by EFFECTIVE RENT SUMMARY Mean Rent (Reis) $928 Annual Change 4.7% RED 50 Rank RCR YE14 Forecast 3. RCR YE15 Forecast 5. RCR YE16 Forecast 3.7% RCR YE17 Forecast 3. 7 th 14 EFFECTIVE RENT TRENDS Reis report that rent trends among the 182,000 units it surveys reaccelerated during the second quarter, rising $10 (1.1%) sequentially, up from s $6 (0.7%) advance. Expressed on a year-onyear basis, rents increased 4.7%, ranking 7th among the RED 50 peer group, down from 6th during the previous quarter. Axiometrics report considerably stronger rent growth. Among the 87,600 units it has surveyed consistently since 20, effective rent averaged $1,153 during, up 5.3% sequentially and 9.3% year-onyear. Each metric was the fastest recorded in the past eight years. Class-B properties notched the most robust overall results, rising 5.8% sequentially and 9.7% y-o-y. Class-C assets increased only 3. sequentially, but still managed to post a class-leading 9.9% y- o-y gain. Class-A properties trailed but showed late speed, advancing 5. sequentially and 7. y-o-y. Double-digit increases were recorded in Aurora, Littleton and Lakewood neighborhoods, but supply burdened Downtown failed to achieve a 1% annual advance. Using the Reis series as foundation data, RCR specified a 96.5% A- R 2 rent forecast model using metro and U.S. home prices, metro personal income growth and vacancy rates and six lags of the dependent variable. Denver home values are projected to rise at an 8.1% average annual rate. Rents are likely to follow with gains ranging from 3.5% - 5. in and 3.3% - 3.7% in TRADE & RETURN SUMMARY $5mm+ Sales 16 Approx. Proceeds $670mm Avg. Cap Rate (FNM) 4.8% Avg. Price/Unit $134,883 Expected Total Return 6. RED 46 ETR Rank RED 46 RAI Rank 21 st Risk-adjusted Index th 14 PROPERTY MARKETS AND TOTAL RETURNS Sales velocity accelerated during the second quarter, rising from eight trades valued at $5 million or more during the first quarter to sixteen transactions. Total proceeds reached about $670mm, largest since 12 (when properties valued at more than $1 billion exchanged hands). The unit average price of 14 trades was $134,883, immaterially different to 14 s $133,486 metric. Approximately one-half of transactions closed during 14 involved class-b or C assets built prior to Buyers were primarily local and regional owner/managers. Prices for these properties ranged from the equivalent of $100 to $150 per square foot. Institutional and private equity investors focused on class-b+ and A assets completed after 2003 at values topping $200/sf. Going-in yields among the older assets ranged from the mid-5s for properties in infill and Lakewood locations to the mid-7s for second -tier suburban sites. Newer assets mostly traded in the 4.5% to 5.5% range, with infill mid-rises commanding the lowest cap rates. In view of the B+ institutional quality trades observed at cap rates in the low to mid-5s, we chose to back the generic cap rate assumption back to the 5.25% level used in 13. Employing model derived occupancy, rent and terminal cap rate (6.) assumptions, RCR concludes that an investor in a generic Denver asset would expect to achieve a 6. unlevered 5-year total return, ranking 21st among the R46 peer group. Below average forecast model standard error boosts the risk-adjusted index to R46 19th rank.

2 MARKET OVERVIEW 14 DENVER, COLORADO YoY Rent Trend 97% 9 95% 9 93% 9 91% 9 Denver Occupancy Rate Trends Source: Reis History, RCR Forecasts % RED 46 AVERAGE DENVER (REIS/RCR) f 15f 16f 17f 18f Denver Absorption and Supply Trends Source: Reis History, RCR Forecasts Units (T12 Months) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,000 ABSORPTIONS COMPLETIONS f 15f 16f 17f 18f Denver Cap Rate Trends Source: efannie.com, RCR Calculations Average Cap Rate 8.5% % % % % 8.1% MOU NTAIN REGION 7. DENVER % 6.5% % % 5.9% 5.9% 4.8% 5.5% NOTABLE TRANSACTIONS Property Name (Submarket) Property Class/Type (Constr.) Approx. Date of Transaction Total Price / <Appr. Value> (in millions) Price / <Appr. Value> per unit Estimated <Underwritten> Cap Rate City Gate Apartments (Downtown/Five Points) B+ / MR (2004) 18-Apr-2014 $52.1 $216, % Griffis Fitzsimons South (Aurora North) B / GLR (2008) 1-May-2014 $40.8 $141, % The Wellshire (Denver South / Glendale) A / HR (1962) 8-May-2014 $20.7 $193, % Verve (Downtown / LoDo) A+ / MR (2014) 23-Jul-2014 $94.8 $322,456 NA / 5.5% p.f. 21 Fitzsimons (Aurora-No./ Fitzsimons Village) B+/MR+RET (2008) 9-Aug-2014 $115.3 (MF only) $269, % Waterfield Court Apts. (Aurora-South / Knolls) B- / GLR (1987) 23-Aug-2014 $57.5 $119, RED Capital Research September 2014

3 MARKET OVERVIEW 14 DENVER, COLORADO YoY Rent Trend - - Denver Effective Rent Trends Sources: Reis, Inc., History, RCR Forecasts 4.7% 4.7% % % RED 46 AVERAGE DENVER (REIS/RCR) f 15f 16f 17f 18f Y-o-Y % Change 15% 13% 1 8% 5% 3% -3% -5% Denver Home Price Trends Source: FHFA Home Price Indices, S&P Case-Shiller HPI and RCR Forecasts % f 2015f 2016f 2017f 2018f 12.3% 8.5% 13.1% 10.5% % 6.5% U.S.A. DENVER (FHFA) DENVER (CASE-SHILLER) 9.1% 4.8% Denver Payroll Employment Trends Source: BLS, Institute for Economic Competitiveness at UCF & RCR U.S.A. DENVER Y-o-Y % Change 3% 1% 2.7% % % 1.7% f 2016f 2017f 2018f The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED Capital Group. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors. RED Capital Research September 2014

4 MARKET OVERVIEW 14 DENVER, COLORADO SUBMARKET TRENDS Effective Rent Physical Vacancy Submarket Change Change Arapahoe County $1,138 $1, % % -50 bps Arvada / Broomfield $824 $ % 4.8% 4.7% -10 bps Aurora-Central-Southeast $722 $ % % -50 bps Aurora-Central-Southwest $737 $ % -110 bps Aurora-North $670 $ % bps Aurora-South $1,016 $1, % 4.1% 3.1% -100 bps Denver-Central $968 $1, % 3.5% bps Denver-Downtown $1,118 $1, % 7.9% bps Denver-Far Southeast $757 $ bps Denver-North $1,452 $1, % % 270 bps Denver-Northeast $908 $ % 4.7% 3.8% -90 bps Denver-South $819 $ % % -110 bps Denver-Southeast $799 $ % 2.3% 2.1% -20 bps Douglas County $1,088 $1, % 50 bps Englewood / Sheridan $754 $ % bps Golden / Wheat Ridge $829 $ % -20 bps Lakewood-North $776 $ % 3.9% 60 bps Lakewood-South $944 $ % % 70 bps Littleton $851 $ % 4.5% 3.8% -70 bps North Glenn / Thornton $835 $ % 3.8% 3.7% -10 bps Westminster $8 $ % -110 bps Metro $886 $ % 3.8% 3.8% Unch d RED46 µ = 6.7% RED46 µ = 3. Recession Probability Probability of Longterm avg. Growth or Faster 3% 5% 7% 8% 9% 1 1.5% % % % % - -3% - -1% 1% 3% 5% FOR MORE INFORMATION ABOUT RED S RESEARCH CAPABILITIES CONTACT: Daniel J. Hogan Director of Research djhogan@redcapitalgroup.com office toll free James P. Hensley Senior Managing Director Head of Multifamily Originations jphensley@redcapitalgroup.com office toll free THE FACE OF LENDING RED Capital Group, LLC RED Mortgage Capital, LLC RED Capital Markets, LLC (Member FINRA/SIPC) RED Capital Partners, LLC T w o M i r a n o v a P l a c e, C o l u m b u s, O h i o r e d c a p i t a l g r o u p. c o m RED Capital Group, LLC

5 RED CAPITAL GROUP MARKET OVERVIEW Denver, Colorado Multifamily Housing Update 13 October 2013 Payroll Job Summary Total Payrolls 1,281.1m Annual Change 33.2(2.7%) 2013 Forecast 32.8m 2014 Forecast 36.9m 2015 Forecast 38.8m 2016 Forecast 39.0m Unemployment 6.8% (Aug.) 13 Payroll Trends and Forecast The Denver labor market exhibited strong momentum during the second quarter as establishments added workers at a robust 33,200-job, 2.7% yearover-year pace, representing the sixth consecutive quarter of 2.5% annual growth or faster. The 13 result was on par with 13 s 32,700-job advance, paced by rapid hiring among construction, energy and professional and technical service firms as well as food service and lodging concerns. Seasonally-adjusted data suggest that year-overyear comparisons may understate the strength of the labor market. This series indicates that Denver employers created 16,600 jobs during 13, the largest one-quarter add recorded since RCR found that home prices as well as the usual national income and payroll variables strongly effect Denver payroll growth, and in this case in a very positive way as metro home prices are expected to grow at 5.7% to 7.5% annual rates through Consequently, the forecast calls for sustained annual employment gains in the mid to high-30,000-job range for the next several years. Occupancy Rate Summary Occupancy Rate (Reis) 96. RED 50 Rank 21 st Annual Chg. (Reis) 0. RCR YE13 Forecast 96.5% RCR YE14 Forecast 96.8% RCR YE15 Forecast 97.3% RCR YE16 Forecast 97.9% 13 Absorption and Occupancy Rate Trends Robust space demand persisted in the second quarter as tenants net leased 1,134 units, according to Reis, in line with 13 s exceptional 1,154- unit absorption performance and more than three times the 12 net total. Supply was largely offsetting, however, as developers completed 991 units, limiting sequential and occupancy growth to 10 basis points to 96.. Axiometrics same-store surveys of larger properties uncovered a average occupancy rate, up 50 bps sequentially and 50 bps year-on-year. Every Reis submarket posted positive absorption with the exceptions of Aurora-South and Englewood, where total leased units were flat. Two submarkets posted occupancy rate declines (Denver-South and -North) entirely due to supply. Reis project that heavy supply will trim occupancy 110 bps by Our absorption model is considerably more optimistic, forecasting that strong payroll growth and home price increases will drive further heavy apartment demand, contributing to a 170 bps tightening to 97.9% by YE2016. Effective Rent Summary Mean Rent (Reis) $885 Annual Change 3.5% RED 50 Rank 8 th RCR YE13 Forecast 4.9% RCR YE14 Forecast 5.7% RCR YE15 Forecast 4. RCR YE16 Forecast 3.9% 13 Effective Rent Trends Reis report that effective rents increased $9 (1.1%) sequentially in 13, representing the fastest growth recorded in a year. Expressed on a year-over-year basis, rents were higher by 3.5%, ranking Denver 8th among the RED 50 markets. Axiometrics surveys unearthed evidence of still faster growth in the large, professionally-managed strata. This service found that same-store properties achieved a $71, 7. year-over-year advance to an average of $1,085, up from a 6.3% 13 metric. Properties constructed since 2012 recorded 2. sequential and 5.9% y-o-y advances, reaching a 13 average rent of $1,444. Reis rent forecasts also are relatively conservative, foreseeing peak gains of 4. in 2014, followed by gradual cooling to the low- range in RCR models are considerably more optimistic again. The models suggest that strong absorption and supply trends and rapid home price appreciation will drive rents sharply higher in 2H3 and Gains in the mid- range are possible in 2H13, accelerating to the 5%- area in 2014, Trade & Return Summary $5mm+ Sales 13 Approx. Proceeds $322mm Avg. Cap Rate (FNM) 6.5% Avg. Price/Unit $116,878 Expected Total Return 8. RED 46 ETR Rank RED RAI Rank 4 th Risk-adjusted Index st 13 Property Markets and Total Returns Sales velocity decelerated during the spring quarter as buyers and sellers regrouped following an extraordinary six-month period in which more than 50 investment quality assets exchanged hands for total proceeds of approximately $1.7 billion. Thirteen transactions valued at $5 million or more closed during 13 for total proceeds of about $322mm. The average price of units sold was $116,978, up from $90,892 during 13. Trade picked-up over the summer as 17 properties exchanged hands during 13 for over $475mm of proceeds and average price of $109,764/unit. Recent trade was heavily weighted toward suburban garden properties. B and B+ class properties were valued at cap rates in the low to mid- 5% range. Infill trophies are likely to continue to trade in the mid- area. To reflect the strong demand for Denver assets, RCR elected to edge the generic B+ cap rate down 15 bps to 5.. Applying this level and model derived occupancy, rent and terminal cap rate forecasts, we estimate that a Denver investor would expect to earn an 8. 5-year unlevered IRR, 4th highest among the RED 46 markets.

6 MARKET OVERVIEW 13 DENVER, COLORADO Metro Occupancy Rate Trends Source: Reis History, RCR Forecasts Average Occupancy Rate 98% % 8 RED 46 AVERAGE DENVER % % 98.1% Metro Absorption and Supply Trends Source: Reis History, RCR Forecasts 8,000 ABSORPTIONS COMPLETIONS Units (T12 Months) 6,000 4,000 2, , Average Cap Rate % % % % 5. MOUNTAIN REGION % Metro Cap Rate Trends Source: efannie.com, RCR Calculations 5.8% DENVER % % 7.7% 8.5% 6.5% NOTABLE TRANSACTIONS Property Name (Submarket) Property Class/ Type (Constr.) Date of Transaction Total Price / <Appr. Value> (in millions) Price / <Appr. Value> per unit Estimated Cap Rate Legends at Lowry (Glendale) A-/GLR (2012) 30-Apr-2013 $27.8 $185, % Broadstone Cornerstar (Aurora-South) B+/GLR (2009) 22-Jul-2013 $68.1 $170, % Belmar Villas (Lakewood-South) B / GLR (1970) 28-Jul-2013 $40.6 $127, Arabella (Aurora-South) B-/GLR (1980) 31-Aug-2013 $20.2 $129, % Avena Apartments (Northglenn/Thornton) B / GLR (2008) 25-Sep-2013 $61.3 $159, % RED CAPITAL Research October 2013

7 MARKET OVERVIEW 13 DENVER, COLORADO YoY Rent Trend 8% % Metro Effective Rent Trends Sources: Reis, Inc., Axiometrics, RCR Forecast % 5.8% 4.5% RED 46 AVERAGE DENVER AXIOMETRICS SAME-STORE DENVER (REIS/RCR) 4.3% 3.8% Y-o-Y % Change 15% 1 9% 3% -3% - -9% Metro Home Price Trends Source: FHFA Home Price Indices and RCR Forecasts 8.9% 7.5% U.S.A. DENVER MOUNTAIN REGION f 2014f 2015f 2016f 2017f 3.5% Metro Payroll Employment Trends Source: BLS, Institute for Economic Competitiveness at UCF & RCR 3. Y-o-Y % Change 2.5% % 1. U.S.A. DENVER 0.5% f 2014f 2015f 2016f 2017f The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED CAPITAL GROUP. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors. RED CAPITAL Research October 2013

8 SUBMARKET TRENDS Effective Rent Physical Vacancy Submarket Change Change Arapahoe County $1,094 $1, bps Arvada / Broomfield $786 $ % 3.9% 4.8% 90 bps Aurora-Central-Southeast $711 $ bps Aurora-Central-Southwest $709 $ % 6.8% bps Aurora-North $643 $ % 2.8% bps Aurora-South $986 $1, % -50 bps Denver-Central $943 $ % % -50 bps Denver-Downtown $1,5 $1, % 7.9% 610 bps Denver-Far Southeast $740 $ % bps Denver-North $1,440 $1, % bps Denver-Northeast $878 $ % % 70 bps Denver-South $782 $ % bps Denver-Southeast $767 $ % 3.8% 2.3% -150 bps Douglas County $1,058 $1, % 3.5% bps Englewood / Sheridan $741 $ % bps Golden / Wheat Ridge $805 $ % bps Lakewood-North $760 $ % 3.3% -150 bps Lakewood-South $918 $ % 2.5% bps Littleton $829 $ % 7.1% 4.5% -260 bps North Glenn / Thornton $801 $ % % -80 bps Westminster $782 $ % bps Metro $855 $ % 3.9% 3.8% -10 bps RED CAPITAL GROUP For more information about RED s research capabilities contact: Daniel J. Hogan, Director of Research djhogan@redcapitalgroup.com James P. Hensley, Senior Managing Director Head of Mortgage Originations jphensley@redcapitalgroup.com

9 RED CAPITAL GROUP MARKET OVERVIEW Denver, Colorado Multifamily Housing Update 11 April 2012 Payroll Job Summary Total Payrolls 1,225.6m 11 Y-o-y Chg. 18.8m FY m 2012 Forecast 25.7m 2013 Forecast 18.8m 2014 Forecast 25.5m Unemployment 8. (Jan) 11 Payroll Trends and Forecast Denver was among the biggest beneficiaries of the BLS payroll re-benchmark released in March. After initially posting an 8,800-job year-on-year gain for 11, the Bureau upwardly revised Denver growth to an 18,800-job, 1. rate, a 10 increase. The revision was largely attributable to faster than previously reported hiring in the construction and business, health care and education services industries. The New Year got off to a flyer as seasonallyadjusted data indicate that metro establishments created 14,300 new payroll positions Decemberto-January, the largest one-month add since 1990 by 6,300! Although the datum is likely to be revised down it reflects considerable forward momentum in the local labor market. RCR models expect robust hiring for the remainder of the year, producing a 25,700-job gain overall. Conditions are likely to be weaker next year, but we anticipate a rebound to 25,500 jobs in Vacancy Rate Summary Vacancy Rate 4. RED 50 Rank 23rd Annual Change <1.8%> YE12 Forecast 4.5% YE13 Forecast 4.8% YE14 Forecast 4.9% YE15 Forecast Absorption and Vacancy Rate Trends Apartment space demand rebounded from a soft third quarter as tenants moved into a net of 985 units in, up from ten-quarter low absorption of 542 during the prior 3-month period. Developers completed no corresponding supply, allowing occupancy to surge 60 basis points sequentially and 180bps year-on-year to 95., a 10-year high. Occupancy increased sequentially in every submarket with the exception of Arapahoe Co. Urban infill areas recorded the strongest gains, especially Downtown Denver, where renters absorbed more than 50 units to drive vacancy 200 bps lower to 2.9%, and Central Aurora, where about 200 vacant units were tenanted. RCR models project incremental gains in 2012 as constructive demand fundamentals are partially offset by rising supply. Supply is forecast to become a greater impediment to occupancy improvement beginning next year as deliveries are projected to reach the annual equivalent of about of stock. Consequently, our models forecast moderately lower occupancy from Effective Rent Summary Mean Rent $835 Annual Change 2. RED 50 Rank 15th 2012 Forecast Forecast 4.3% 2014 Forecast Forecast 4.7% 11 Rent Trends Face rent growth moderated during 11, slowing from s robust 0.7% advance to 0.. Concession costs declined, however, falling to the lowest percentage of asking rent since Thus, average effective rents increased 0. ($5) to $835. Expressed on a year-on-year basis, rents were nearly 2. higher, ranking 15th among the R50. Effective rents increased sequentially in every submarket save Arapahoe, North Glenn and Central and Southeast Denver. Five submarkets chalked down 1% or greater gains, led by Far Southeast (2.1%), Aurora-North (1.9%) and Downtown (1.). On a year-on-year basis, rents in the luxury infill Denver-North submarket advanced 5.9% on a same-store basis, the largest submarket effective rent increase by 130 basis points. RCR models are very constructive regarding Denver rents, forecasting 4.5% annual compound growth through This trails only NYC and San Francisco among the R45. Reis are still more optimistic, foreseeing a 6.7% gain in 2012, followed by 4. to 4.7% increases through Trade & Return Summary 11 $8mm+ Sales 22 Approx. Proceeds $891mm Average Cap Rate 5.7% Avg. Price / Unit $122,670 Expected Total Ret 8. RED 45 ETR Rank 3rd Risk-adjusted Index 1.84/31st Recent Property Market Review and Total Return Estimates After showing relative indifference to Denver assets during 11, investors dove in head first during the final three months of the year. A total of 22 trades valued at $8mm or more were consummated during the period for aggregate proceeds of $819.2mm. This compared to only 4 transactions closed in 11 totaling $77.2mm. Buyers moved up the quality spectrum. The average price per unit was $122,670, up from $75,922 in the prior quarter. Nine of the trades involved properties constructed since 2000, accounting for 47% of total proceeds. Cap rates averaged about 5. and ranged from 3.8% to 8.8%. Properties built since 2000 traded universally below 5%, however, averaging about 4.3%. Employing a 5. generic A/B hybrid cap rate assumption, the RCR model generates an 8. expected total return for Denver MFH investments. This ranks 3rd among the R45, indicating potentially attractive relative value. Denver NOI growth is more volatile than average through, causing the risk-adjusted index to fall to 31 st among the peers.

10 MARKET OVERVIEW 11 DENVER, COLORADO Metro Vacancy Rate 1 9% 8% 7% 5% 3% Metro Vacancy Rate Trends DENVER RED 45 AVERAGE 4.9% % Metro and Region Cap Rate Trends Sources: Fannie Mae MBS & RCR Average Cap Rate % % MOU NTAIN REGION DENVER MSA 7.1% 6.8% 6.3% % 6.3% % 6.1% Annual Chg (000) Metro Payroll Employment Trends Sources: BLS & RCR Forecasts f 2013f 2014f DENVER (14.2) (53.3) (6.3) NOTABLE TRANSACTIONS Property Name (Submarket) Property Class/Type (Construction Year) Date of Transaction Total Price (in millions) Price per unit Estimated Cap Rate Broadstone Avena (Thornton) A (2008) 3-Mar-2012 $50.5 $131, % Renaissance (Denver-Southeast) A (2000) 31-Dec-2011 $70.8 $126, % Greenwood Pointe (Englewood) B (1987) 31-Dec-2011 $33.2 $1, % Alton Green (Denver-Southeast) B (1987) 10-Feb-2012 $28.5 $91, % Alexan Broadway (Denver-South) A (20/10) 7-Dec-2011 $82.0 $195, RED CAPITAL Research April 2012

11 MARKET OVERVIEW 11 DENVER, COLORADO Metro Effective Rent Trends, RCR Forecasts % YoY Rent Trend 2. - RED 45 AVG DENVER % Y-o-Y % Change 8% - -8% Metro Home Price Trends Source: S&P Case-Shiller Home Price Index U.S.A. Metro Home Price Trends Source: FHFA Home Price Index. DENVER Y-o-y Growth Rate 4.5% % % % Metro Payroll Employment Growth Trends Sources: BLS data, IEC at UCF and RCR Forecasts DENVER f 2012f 2013f 2014f USA The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED CAPITAL GROUP. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors. RED CAPITAL Research April 2012

12 SUBMARKET TRENDS Submarket Effective Rent Physical Vacancy Change Change Arapahoe County $1,050 $1,8 1.7% % -410 bps Arvada / Broomfield $755 $ % 4.8% 3.9% -90 bps Aurora-Central-Southeast $681 $ % -190 bps Aurora-Central-Southwest $684 $ % bps Aurora-North $6 $ % 3.8% -170 bps Aurora-South $933 $ % 6.9% bps Denver-Central $922 $ % bps Denver-Downtown $1,051 $1, % 2.9% -320 bps Denver-Far Southeast $688 $ % bps Denver-North $1,332 $1, % % -220 bps Denver-Northeast $839 $ % bps Denver-South $754 $ % 9.5% 5.7% -380 bps Denver-Southeast $738 $ % % -170 bps Douglas County $985 $1, bps Englewood / Sheridan $710 $ % 6.7% bps Golden / Wheat Ridge $780 $ % 4.7% 3.8% -90 bps Lakewood-North $729 $ % % -150 bps Lakewood-South $869 $ % 3.3% -150 bps Littleton $791 $ bps North Glenn / Thornton $771 $ % 6.7% bps Westminster $743 $ bps Metro $814 $ bps RED CAPITAL GROUP For more information about RED s research and origination capabilities contact: Kenneth H. Bowen Daniel J. Hogan President, Red Mortgage Capital, LLC. Director, Research khbowen@redcapitalgroup.com djhogan@redcapitalgroup.com

13 RED CAPITAL GROUP MARKET OVERVIEW Denver, Colorado Multifamily Housing Update 11 September 2011 Payroll Job Summary Total Payrolls: 1,199.7m Annual Change: +2.5m 2011 Forecast +5.9m 2012 Forecast +3.8m 2013 Forecast +10.2m Unemployment 8.5% 11 Payroll Trends and Forecast Metro employment trends weakened in the second quarter as the pace of year-over-year payroll growth decelerated from 9,200 (0.8%) in 11 to 2,500 (0.) in 11. Additionally, payroll headcounts declined 1,200 and 1,300 in July and August, respectively. Seasonally-adjusted job trends also were weak. Payroll headcounts were unchanged in the first eight months of 2011 after employers created 8,000 jobs in the comparable period of Economy.com foresee robust employment growth through Indeed, the source projects job gains of 22,970, 30,090 and 24,660 in 2011, 2012 and 2013, respectively. Conversely, RCR expect slower progress over the forecast period. Our model projects a modest 5,900-job increase in 2011, followed by 3,800- and 10,200-job advances in 2012 and Vacancy Rate Summary Vacancy Rate (Reis) 5. RED 50 Rank 24th Annual Chg (Reis) -2.7% RCR YE11 Forecast 5.7% RCR YE12 Forecast 5.5% RCR YE13 Forecast 5.3% 11 Absorption and Vacancy Rate Trends Apartment demand slowed in the second quarter. Property managers net leased 1,371 units during the first quarter but only 577 units in the second. Despite slower tenant demand, the metro vacancy rate declined 40 basis points to 5. as no units were completed from April to June. Vacancy improvement was widespread among submarkets. Only the Douglas County submarket experienced rising vacancy year-over-year. In the balance of the submarkets, vacancy declines ranged from 130 basis points (North Glenn / Thornton) to 1,430 basis points (Arapahoe County). Reis expect tenants to absorb another 1,124 units in 2H11 and 1,017 in 2012, raising occupancy 60 bps by YE11. The RCR forecast models expect a 30 basis point occupancy decrease over the next six months, largely because of our more cautious near-term payroll outlook. Effective Rent Summary Mean Rent (Reis) $823 RED 50 Rank 6th Annual Change 3.7% RCR 2011 Forecast 1.3% RCR 2012 Forecast 0.5% RCR 2013 Forecast Rent Trends The pace of year-over-year effective rent growth decelerated slightly from 3.8% in 11 to 3.7% in 11. Much of the annual gain was banked in the second half of Indeed, effective rent rose 2.5% in 2H10 and only 1.1% in the first six months of Five metro submarkets (Denver-North, Aurora- North, Littleton, Arapahoe County and Denver- Downtown) experienced year-over-year effective rent growth of 6. or better. Effective rent trends in the other 16 submarkets ranged from 0.7% (Denver-Central) to 5.7% (Denver- Southeast). Reis believe that stout effective rent growth will persist, averaging 3.9% per year from 2011 to By contrast, the RCR models predict moderately slower gains of only 1.3% and 0.5% in 2011 and 2012, respectively. For the five-year period ended in 2015, our model foresees a compound average annual growth rate of 1.9%. Trade & Return Summary $5mm+ Sales 33 Approx. Proceeds $589mm Median Cap Rate 5.9% Avg. Price/Unit $96,546 Expected Total Return 2.5% RED 50 Rank 45th 11 Property Markets and Total Returns Real Capital Analytics count 33 investor-grade transactions involving properties priced at or above $5 million. Sales volume totaled $589 million and the average price per unit was $96,546. CBRE report that cap rates for stabilized Class-A assets ranged from 5. to 5.5% in March. Employing an 4.8% acquisition cap rate, RCR estimate that the expected five-year un-levered total return for Denver assets is 2.5% The metric ranks 45th highest among the RED 46. In regard to risk-adjusted returns, Denver assets rank 45th overall. The RCR integrated performance and total return model indicates that Denver investments have a 37.9% probability of achieving a total return of 5% or higher over five years. The model projects typical assets will trade at a 6. cap rate (up 120 bps) after 5 years, with a 10.7% probability of cap rates at or below the current level.

14 MARKET OVERVIEW 11 DENVER, COLORADO Metro Vacancy Rate 1 9% 8% 7% 5% Apartment Vacancy Trends DENVER U.S.A. 5.9% Average Cap Rate % % 6. Metro Multifamily Cap Rate Trends Source:s: Fannie, Freddie, RCR, Reis FNM / FM C US FNM / FM C M OUNTAIN REGION REIS DENVER (T12 AVG) 5.5% Payroll Employment Growth Source: BLS Data & RCG Research Forecast 60 Annual Chg (000) f 12f 13f NOTABLE TRANSACTIONS Property Name (Submarket) Property Class Date of Transaction Total Price (in millions) Price per unit Estimated Cap Rae Landing at Bear Creek (Lakewood-South) A August 2011 $28.0 $124, Hamden Heights (Aurora-South) B/C July 2011 $22.8 $60, % Conifer Creek (Aurora-Central-SW) B/C June 2011 $38.2 $79, Trailside Apartments (Douglas County) A June 2011 $33.6 $119, % RED CAPITAL Research September 2011

15 MARKET OVERVIEW 11 DENVER, COLORADO Apartment Effective Rent Trends 5% 3% 3.7% YoY Rent Trend 1% -1% - -3% - DENVER U.S.A Metro Median Single Family Home Prices 2 Source: S&P Case-Shiller Index 15% 1 Y-o-Y % Change 5% -5% -1-15% -2-25% DENVER SPX Year-over-year Payroll Growth Rate Source: BLS, RCG Research Forecasts Rate DENVER USA f 12f The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED CAPITAL GROUP. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors. RED CAPITAL Research September 2011

16 SUBMARKET TRENDS Submarket Effective Rent Physical Vacancy Change Change Arvada / Broomfield $745 $ % 6.1% 4.5% -160 bps Westminster $732 $ % 7.3% 5.7% -160 bps North Glenn / Thornton $759 $ % % -130 bps Golden / Wheat Ridge $751 $ % 7.9% bps Denver-North $1,269 $1, % 7.3% bps Denver-Northeast $831 $ % 8.1% 5.1% -300 bps Lakewood-North $713 $ % 7.5% 6.1% -140 bps Denver-Central $923 $ % 7.7% bps Aurora-North $582 $ % 7.9% 4.8% -310 bps Lakewood-South $832 $ % bps Denver-South $746 $ % 14.3% 7.5% -680 bps Denver-Southeast $710 $ % 7.9% 5.7% -220 bps Littleton $762 $ % 4.7% -160 bps Englewood / Sheridan $693 $ % 5.7% -500 bps Denver-Far Southeast $687 $ % % -270 bps Arapahoe County $997 $1, % 6. -1,430 bps Aurora-Central-SW $685 $ % 11.7% bps Aurora-Central-SE $655 $ % -270 bps Aurora-South $908 $ % -250 bps Denver-Downtown $979 $1, % 6.3% 4.7% -160 bps Douglas County $955 $ % bps Metro $794 $ % 8.1% bps RED CAPITAL GROUP For more information about RED s research capabilities contact: Daniel J. Hogan Director of Research djhogan@redcapitalgroup.com William T. Hinga Business Development wthinga@redcapitalgroup.com

17 RED CAPITAL GROUP Market Overview Denver, Colorado Multifamily Housing Update May 2011 EXECUTIVE SUMMARY Among institutional investors, Denver is one of the most actively pursued multifamily markets in the country and it is likely to gain even more attention over the next several months. An 8,000-unit Colorado property portfolio was offered for sale in mid-may, and it may become one of most widely followed asset dispositions in the apartment space in some time. Investors favor Denver because of its economic growth potential the Mile High City is ideally situated at the intersection of three of the most robust domestic industries: energy, high tech and health care and lifestyle appeal to the Gen Y renter. With solid prospects for high-wage job creation and a steady inflow of young professionals seeking the kind of class-a, urban infill space that institutional investors favor these days, it s no wonder that trust and private equity players can t acquire enough assets in this region. Belying common perceptions, the Denver labor market was late to join the national recovery. Payrolls increased at 0.3% year-on-year pace in 10, a metric that compared unfavorably to the nation s 0.5% advance. While metro job creation accelerated in 11 to a 10,000-job, 0.9% pace, this merely pulled it even with the national average and did not measure up to the performances of high tech peers San Jose (2.1%); Seattle (1.), Raleigh (2.7%); and Austin (1.7%). First quarter hiring in the professional service, health care and energy sectors was constructive, accounting for creation of about 7,900 jobs expressed on a y-o-y basis. But housing remained a significant drag on the labor market overall, the source of 6,800-job cuts in construction and further weakness in the financial service sector. RED Research s econometric payroll model forecasts 2011 growth near the 1.3% national average or roughly 16,000 jobs. The model projects considerably stronger job growth in 2012 and 2013, however: metro establishment should hire a net of 32,900 workers next year and as many as 37,000 in 2013, assuming the U.S. economic recovery remains intact. By contrast, apartment demand was exemplary as tenants net leased 1,371 units in the seasonally soft first quarter, one of the strongest winters on record. Against supply of 328 units occupancy improved 60 basis points sequentially and 260 bps y-o-y, the latter metric ranking 13th among the RED 50. Occupancy increased quarter-to-quarter in each submarket, with Arapahoe Co areas posting the strongest gains ranging from 80 to 400 bps. Asking rent growth was consistent with seasonal norms: average metro rents increased $3 (0.3%) sequentially to $910, in line with the eight year first quarter average. Concessions burn-off contributed to a $5 (0.) effective rent gain, representing the smallest increase recorded in this series since 09. Six metro submarkets recorded sequential rent declines, including several key infill markets: Denver Central and Downtown, as well as North and South Lakewood. Reis models foresee moderate occupancy and rent improvement over the 5-year forecast period. Occupancy is expected to hover around the 9 level while rents advance at a 3.9% compound annual rate, a bit slower than the 4. forecast national norm. Quality assets are trading in the 4.5% to 5% cap rate range. Using a 4.75% generic cap rate assumption, RCR estimate 7. metro expected annual total returns: 160 bps below the RED 50 mean, ranking 44th overall. Riskadjusted returns also rank 44th highest among the RED 50 peer group. SNAP SHOT Vacancy (5.8% - 11) Effective Rents ($819 11) Cap Rate (5.3% - 11) Employment (1,177.9m - 11) K EY POINTS Y-o-y Projected change % 3.8% 5.1% 1.3% 10.0m 15.9m The Denver area economic recovery gained momentum in 11, adding to total payrolls at a 10,000-job, 0.9% year-on-year pace, in line with the national average but lagging key high tech metro peers. By contrast, seasonally-adjusted data painted a more robust picture, recording a 9,400-job payroll gain during 11, representing the best onequarter result posted in four years. The median price of a Denver home sold in 11 declined only 0. y-o-y, comparing favorably to 4. and 4.7% respective decreases in the U.S. and Western Region. Metro apartment owners continued to enjoy healthy demand. Tenants absorbed 1,371 units in 11, boosting average occupancy 60 basis points sequentially to 94.. Rent trends leveled off, rising 3.8% y-o-y, in line with the 10 metric, and 0. q-o-q. Sales transaction velocity and the value of properties traded were steady quarter to quarter. Investors acquired 8 Denver area properties in 11 for total proceeds of about $215mm compared to 10 transaction for about $200mm during 10. Cap rates ranged from the mid-4s to about.

18 Denver - Aurora - Broomfield, CO MSA - Q VACANCY TRENDS Tenants absorbed 1,371 metro units, according to Reis, moderately below the 1,434-unit and 1,8-unit performances recorded in 10 and 10, respectively. Average occupancy gained 60 basis points sequentially and 260 bps year-on-year to 94., a 10-year high. Weighted average same store occupancy of 12,371 Denver units owned by public REIT declined 30 bps sequentially to 95.3%. Average occupancy was 10 bps higher on a year-over-year basis. Aurora submarket average occupancy improved 70 bps sequentially and 310 bps y-o-y to 94., topping the metro average in each case. Arapahoe Co. submarket occupancy increased 400 bps sequentially and 1,030 bps y-o-y, in each case the strongest metric in the metro area. Metro Vacancy Rate 1 9% 8% 7% 5% Apartment Vacancy Trends DENVER U.S.A % RENT TRENDS Asking and effective rents increased $3 (0.3%) and $5 (0.) sequentially to $910 and $819. Relative to the year-earlier period, asking and effective rents increased $18 (3.1%) and $25 (3.8%). Denver properties owned by public REIT recorded weighted average rent gains of $43 (4.) year-over-year to $981, but only $4 (0.) of the advance was chalked down from December to March. Three submarkets recorded sequential effective rent increases averging 1.5% or greater: Denver-SE (1.5%); Denver North (2.9%) and Aurora- North (2.). Above average over-the-year rent growth was observed in several Arapahoe County submarkets, including Arapahoe Co (7.); Aurora-North (6.) and Aurora-South (5.1%). Reis expect metro rents to increase 5.1% in 2011; 4.3% in RANK: 5 th out of 50 PROPERTY MARKET & CAP RATE TRENDS According to RCA, 29 Denver trades valued at $593 million were closed in Loopnet data suggest that investors stepped up the pace of acquisition activity recently as at least 18 trades valued at $3mm or greater were closed in the six-month period ended in March for total value of approximately $410 million. The second quarter got off to a flying start with five transactions valued at more than $100mm consummated by the third week of May. Going-in yields applicable to institutional quality assets were mostly in the mid- to 5% range. One exception was a 14-year old garden project in Littleton that exchanged hands at an estimated mid-5% cap rate. The investment was described as a value-add play, suggesting that the property may not be of class-a quality. Employing a 4.75% generic cap rate, RCR estimate that institutional quality assets will generate a 7. un-levered return over 5 years, ranking 44th among the RED 50. Risk-adjusted returns rank also rank 44th. YoY Rent Trend Avg Px/Unit (T) 5% 3% 1% -1% % % % 4. Apartm Rent Trends Asking Effective Metro Multifamily Cap Rate Trends Trade Median % % % 11 NOTABLE TRANSACTIONS Property Name (Submarket) Property Class Date of Total Price Estimated Price per unit Transaction (in millions) Cap Rate Flats Whisper Sky (Denver SE) A 26-Apr-2011 $35.4 $166, Dakota Gov. Ranch (Lakewd So) A- 16-May-2011 $24.6 $99, % Terra Vista Apts (Littleton) B+ 2-Apr-2011 $28.5 $87, Parc Belmar (Lakewood-South) A- 21-Mar-2011 $70.5 $137, RED CAPITAL Research

19 Denver - Aurora - Broomfield, CO MSA - Q Y-o-Y % Change Metro Median Single Family Home Prices Source: S&P Case-Shiller Index 1 5% -5% -1-15% -2 DENV -25% Jan- May- Sep- Jan SPX20 May- 10 Sep- 10 Jan- 11 DEMOGRAPHICS & HOUSING MARKET According to Census estimates, the population of Adams, Arapahoe, Denver, Douglas and Jefferson counties increased by 48,868 persons in 2010 or 2.. This compares to a gain of 49,134 (2.1%) in Denver Co. population increased 17,850 (2.9%) last year, the leader in both absolute and percentage terms. Metro home price trends were more stable than the national and regional norms. N.A.R. data indicate that the median price of a metro home sold in 11 was $223,800, a decrease of -0. from U.S. and Western Region medians declined by -4. and -4.7%, respectively. Trulia.com report that the median price of a Denver home sold in the three-month period ended in April was $187,000, representing a $7,500 or 4. increase from the prior quarter and a 1. gain year-on-year. Home sales fell below 2,000 units in April, slowest velocity in 10 years or more. Annual Chg (000) Rate Payroll Employment Growth Source: BLS Data & RCG Research Forecast f 12f Year-over-year Payroll Growth Rate Source: BLS DENVER USA f 12f EMPLOYMENT TRENDS Non-Seasonally Adjusted After getting off to a slow start last year, the Denver area economic recovery gained momentum in 11. Establishments added payroll employees at a 10,000-job, 0.9% rate, up from 10 s 3,900-job, 0.3% advance and in line with the national average pace. The manufacturing, retail trade and business services sector were primarily responsible. Creation of about 7,600 jobs were attributable to these sectors in 11, up from 3,700 during the prior quarter. Professional, scientific and technical service employers added workers to payrolls at a brisk 2,900-job, 2.9% rate in, up from 1,700 in 10 and net attrition of 4,100 (-4.) in the year-earlier period. The unemployment rate declined to 9.3% in March from 9.7% in the year-earlier period. According to BLS Household Survey data, the decline was entirely due to a workforce reduction of 9,884. Total employment actually fell 3,235 jobs. Seasonally-Adjusted Seasonally-adjusted payroll data were more upbeat than the NSA payroll and total employment series. The BLS report that on a seasonally-adjusted basis, payroll employment increased by 9,400 jobs in the first quarter, representing the equal best three-month period recorded since 05. The data also compare well to the prior two quarters wherein Denver establishments trimmed 2,400 positions. Forecast The RED Reasearch econometric payroll model for Denver projects that job growth will mirror the national average in 2011, adding about 15,900 workers to payrolls or about 1.3%. Denver should materially outperform the nation in 2012, however, chalking down a 32,900-job, 2.7% gain, roughly 90 bps faster than the U.S. average % RED Estimated Generic Unlevered Asset Total Return Probabilities DENV (RAI=2.01) SEA (RAI=2.41) % % % P ro bability o f A chieving Stated R eturn o r Greater 11.7% RED CAPITAL Research

20 SUBMARKET TRENDS Submarket Effective Rent Physical Vacancy Change Change Arapahoe County $983 $1, % 6. -1,030 bps Arvada / Broomfield $747 $ % 6.7% 4.8% -190 bps Aurora-Central Southeast $658 $ % 6.1% -260 bps Aurora-Central Southwest $689 $ bps Aurora-North $580 $ % bps Aurora-South $899 $ % bps Denver-Central $916 $ % 4.5% -420 bps Denver-Downtown $1,004 $1, % 6.7% bps Denver-Far Southeast $691 $ % bps Denver-North $1,359 $1, % 6.7% 5.8% -90 bps Denver-Northeast $821 $ % 8.3% 5.5% -280 bps Denver-South $698 $ % % -130 bps Denver-Southeast $7 $ % 8.3% bps Douglas County $963 $ % -30 bps Englewood / Sheridan $698 $ % 8.8% 5.9% -290 bps Golden / Wheat Ridge $736 $ % 7.9% bps Lakewood-North $702 $ % % -170 bps Lakewood-South $828 $ % -170 bps Littleton $757 $ % 5.8% 4.7% -110 b[s North Glenn / Thornton $768 $ % 8.1% bps Westminster $717 $ % -210 bps Metro $789 $ % % -260 bps SUPPLY TRENDS Developers delivered 2,335 units to the Denver market last year, materially fewer than the 3,530-unit average. Supply will drop sharply again this year, falling to a near record low 508 units, according to Reis. The data provider projects 1,926 units in ,000 6,000 Completions and Absorption Source: Reis, Inc Completions Absorption Reis identify five market rate projects with respect to which construction is now underway. Each is expected to be completed during The projects encompass a total of 1,084 units. The South Side will receive the largest share, divided as follows: Aurora-Central-Southeast (242 units); Aurora-South (168 units) and Littleton (282 units). Plenty of entitled projects remain on the shelf, awaiting financing or other contingencies. Twenty-nine projects with an aggregate of 8,229 units are listed by Reis as in the planning phase. Only one is assigned a projected completion date, however, a 231-unit Downtown infill mid-rise sustainable loft building. A summer 2013 delivery date is forecast. Units 4,000 2, f 12f A 309-units REIT-sponsored garden project in Englewood (Aurora-South) delivered in 2009 was 93. occupied in March at rents averaging $1,240. Daniel J. Hogan Director of Research djhogan@redcapitalgroup.com William T. Hinga Business Development wthinga@redcapitalgroup.com RED CAPITAL GROUP Two Miranova Place Columbus, OH RED CAPITAL GROUP The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED CAPITAL GROUP. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors.