Market Feasibility Analysis Tupelo Ridge Apartments Warner Robins, Houston County, Georgia Preparedfor: Zimmerman Properties, LLC EffectiveDate: May2,2017 SiteInspection:April28,2017 TupeloRidge|TableofContents TABLE OF CONTENTS 1. EXECUTIVESUMMARY....................................................................................................1 2. INTRODUCTION..............................................................................................................8 A. OverviewofSubject..............................................................................................................................................8 B. PurposeofReport.................................................................................................................................................8 C. FormatofReport..................................................................................................................................................8 D. Client,IntendedUser,andIntendedUse.............................................................................................................8 E. ApplicableRequirements......................................................................................................................................8 F. ScopeofWork......................................................................................................................................................8 G. ReportLimitations................................................................................................................................................9 3. PROJECTDESCRIPTION.................................................................................................. 10 A. ProjectOverview................................................................................................................................................10 B. ProjectTypeandTargetMarket.........................................................................................................................10 C. BuildingTypesandPlacement............................................................................................................................10 D. DetailedProjectDescription...............................................................................................................................11 1. ProjectDescription.....................................................................................................................................11 2. OtherProposedUses.................................................................................................................................12 3. ProposedTimingofDevelopment.............................................................................................................12 4. SITEEVALUATION......................................................................................................... 13 A. SiteAnalysis........................................................................................................................................................13 1. SiteLocation...............................................................................................................................................13 2. ExistingUses...............................................................................................................................................14 3. Size,Shape,andTopography.....................................................................................................................14 4. GeneralDescriptionofLandUsesSurroundingtheSubjectSite...............................................................15 5. LandUsesSurroundingtheSubjectSite....................................................................................................16 B. NeighborhoodAnalysis.......................................................................................................................................17 1. GeneralDescriptionofNeighborhood.......................................................................................................17 2. NeighborhoodPlanningActivities..............................................................................................................17 3. PublicSafety...............................................................................................................................................18 C. SiteVisibilityandAccessibility............................................................................................................................19 1. Visibility......................................................................................................................................................19 2. VehicularAccess.........................................................................................................................................19 3. AvailabilityofPublicTransit.......................................................................................................................19 4. AvailabilityofInter-RegionalTransit..........................................................................................................19 5. AccessibilityImprovementsunderConstructionandPlanned..................................................................19 6. EnvironmentalConcerns............................................................................................................................20 D. ResidentialSupportNetwork..............................................................................................................................20 1. KeyFacilitiesandServicesneartheSubjectSite........................................................................................20 2. EssentialServices.......................................................................................................................................21 3. CommercialGoodsandServices................................................................................................................22 4. LocationofLowIncomeHousing...............................................................................................................22 E. SiteConclusion...................................................................................................................................................22 5. MARKETAREA.............................................................................................................. 23 A. Introduction........................................................................................................................................................23 B. DelineationofMarketArea................................................................................................................................23 6. COMMUNITYDEMOGRAPHICDATA.............................................................................. 25 A. IntroductionandMethodology..........................................................................................................................25 B. TrendsinPopulationandHouseholds................................................................................................................25 1. RecentPastTrends.....................................................................................................................................25 2. ProjectedTrends........................................................................................................................................25 3. BuildingPermitTrends...............................................................................................................................25 Page i TupeloRidge|TableofContents C. DemographicCharacteristics..............................................................................................................................27 1. AgeDistributionandHouseholdType.......................................................................................................27 2. RenterHouseholdCharacteristics..............................................................................................................28 3. IncomeCharacteristics...............................................................................................................................29 7. EMPLOYMENTTREND................................................................................................... 32 A. Introduction........................................................................................................................................................32 B. LaborForce,ResidentEmployment,andUnemployment..................................................................................32 1. TrendsinCountyLaborForceandResidentEmployment.........................................................................32 2. TrendsinCountyUnemploymentRate......................................................................................................32 C. CommutationPatterns.......................................................................................................................................32 D. At-PlaceEmployment.........................................................................................................................................34 1. TrendsinTotalAt-PlaceEmployment........................................................................................................34 2. At-PlaceEmploymentbyIndustrySector...................................................................................................35 3. MajorEmployers........................................................................................................................................36 4. RecentEconomicExpansionsandContractions........................................................................................38 E. ConclusionsonLocalEconomics.........................................................................................................................38 8. PROJECT-SPECIFICAFFORDABILITY&DEMANDANALYSIS............................................. 39 A. AffordabilityAnalysis..........................................................................................................................................39 1. Methodology..............................................................................................................................................39 2. AffordabilityAnalysis.................................................................................................................................40 3. ConclusionsofAffordability.......................................................................................................................42 B. DemandEstimatesandCaptureRates...............................................................................................................42 1. Methodology..............................................................................................................................................42 2. DemandAnalysis........................................................................................................................................42 3. DCADemandConclusions..........................................................................................................................44 9. COMPETITIVERENTALANALYSIS................................................................................... 45 A. IntroductionandSourcesofInformation...........................................................................................................45 B. OverviewofMarketAreaHousingStock............................................................................................................45 C. SurveyofGeneralOccupancyRentalCommunities...........................................................................................47 1. IntroductiontotheRentalHousingSurvey................................................................................................47 2. Location......................................................................................................................................................47 3. SizeofCommunities...................................................................................................................................47 4. AgeofCommunities...................................................................................................................................48 5. StructureType............................................................................................................................................48 6. VacancyRates............................................................................................................................................48 7. RentConcessions.......................................................................................................................................48 8. AbsorptionHistory.....................................................................................................................................48 D. AnalysisofProductOfferings.............................................................................................................................49 1. PaymentofUtilityCosts.............................................................................................................................49 2. UnitFeatures..............................................................................................................................................49 3. Parking.......................................................................................................................................................51 4. CommunityAmenities................................................................................................................................51 5. UnitDistribution.........................................................................................................................................52 6. EffectiveRents...........................................................................................................................................52 7. ScatteredSiteRentals................................................................................................................................54 8. DCAAverageMarketRent.........................................................................................................................54 E. Multi-FamilyPipeline..........................................................................................................................................55 F. HousingAuthorityData......................................................................................................................................56 G. ExistingLowIncomeRentalHousing..................................................................................................................56 H. ImpactofAbandoned,Vacant,orForeclosedHomes........................................................................................57 10. FINDINGSANDCONCLUSIONS................................................................................... 59 A. KeyFindings........................................................................................................................................................59 1. SiteandNeighborhoodAnalysis................................................................................................................59 Page ii TupeloRidge|TableofContents 2. EconomicContext......................................................................................................................................59 3. PopulationandHouseholdTrends.............................................................................................................60 4. DemographicAnalysis................................................................................................................................60 5. CompetitiveHousingAnalysis....................................................................................................................60 B. ProductEvaluation.............................................................................................................................................61 C. PricePosition......................................................................................................................................................62 11. ABSORPTIONANDSTABILIZATIONRATES.................................................................. 65 A. AbsorptionEstimate...........................................................................................................................................65 B. ImpactonExistingandPipelineRentalMarket..................................................................................................65 12. INTERVIEWS.............................................................................................................. 66 13. CONCLUSIONSANDRECOMMENDATIONS................................................................. 67 14. APPENDIX1 UNDERLYINGASSUMPTIONSANDLIMITINGCONDITIONS..................... 68 15. APPENDIX2 ANALYSTCERTIFICATIONS..................................................................... 70 16. APPENDIX3NCHMACERTIFICATION......................................................................... 71 17. APPENDIX4 ANALYSTRESUMES............................................................................... 72 18. APPENDIX5 DCACHECKLIST..................................................................................... 75 19. APPENDIX6RENTALCOMMUNITYPROFILES............................................................. 80 Page iii TupeloRidge|TableofContents TABLES, FIGURES AND MAPS Table1 DetailedUnitMixandRents,TupeloRidge...................................................................................................11 Table2 UnitFeaturesandCommunityAmenities......................................................................................................12 Table3 KeyFacilitiesandServices..............................................................................................................................20 Table4 PopulationandHouseholdProjections..........................................................................................................26 Table5 PersonsperHousehold,TupeloRidgeMarketArea......................................................................................26 Table6 BuildingPermitsbyStructureType,HoustonCounty....................................................................................27 Table7 2017AgeDistribution....................................................................................................................................27 Table82010HouseholdsbyHouseholdType.............................................................................................................28 Table9 HouseholdsbyTenure...................................................................................................................................28 Table10 RenterHouseholdsbyAgeofHouseholder................................................................................................29 Table11RenterHouseholdsbyHouseholdSize.........................................................................................................29 Table122017HouseholdIncome...............................................................................................................................30 Table132017HouseholdIncomebyTenure,TupeloRidgeMarketArea..................................................................30 Table14RentBurdenedandSubstandardHousing,TupeloRidgeMarketArea........................................................31 Table15 LaborForceandUnemploymentRates........................................................................................................33 Table16CommutationData,TupeloRidgeMarketArea............................................................................................33 Table17 MajorEmployers,HoustonCounty..............................................................................................................37 Table18 2019TotalandRenterIncomeDistribution.................................................................................................39 Table19 LIHTCIncomeandRentLimits,WarnerRobinsMSA.................................................................................40 Table20 2019AffordabilityAnalysis,TupeloRidge....................................................................................................41 Table21 OverallDemandEstimates,TupeloRidge...................................................................................................43 Table22 DemandEstimatesbyFloorPlan,TupeloRidge..........................................................................................44 Table23 DwellingUnitsbyStructureandTenure......................................................................................................45 Table24 DwellingUnitsbyYearBuiltandTenure......................................................................................................46 Table25ValueofOwnerOccupiedHousingStock......................................................................................................46 Table26RentalSummary,SurveyedCommunities.....................................................................................................49 Table27 UtilityArrangementandUnitFeatures.......................................................................................................50 Table28CommunityAmenities..................................................................................................................................52 Table29UnitDistribution,Size,andPricing................................................................................................................53 Table30ScatteredSiteRentals,TupeloRidgeMarketArea.......................................................................................54 Table31AverageRents,ComparableProperties........................................................................................................55 Table32 AverageMarketRentandRentAdvantageSummary.................................................................................55 Table33 SubsidizedCommunities,TupeloRidgeMarketArea..................................................................................56 Table34 ForeclosureRate,ZIPCode31088,March2017..........................................................................................58 Table35 RecentForeclosureActivity,ZIPCode31088...............................................................................................58 Figure1SitePlan.........................................................................................................................................................10 Figure2ViewsofSubjectSite......................................................................................................................................14 Figure3SatelliteImageofSubjectSite.......................................................................................................................15 Figure4ViewsofSurroundingLandUses...................................................................................................................16 Figure5 At-PlaceEmployment,HoustonCounty.......................................................................................................34 Figure6 TotalEmploymentbySector.........................................................................................................................35 Figure7 EmploymentChangebySector,2011-2016Q3............................................................................................36 Figure8PricePosition.................................................................................................................................................63 Map1 SiteLocation....................................................................................................................................................13 Map2 CrimeIndexMap.............................................................................................................................................18 Map3 LocationofKeyFacilitiesandServices............................................................................................................21 Map4 TupeloRidgeMarketArea...............................................................................................................................24 Map5MajorEmployers,HoustonCounty..................................................................................................................37 Map6 SurveyedRentalCommunities........................................................................................................................47 Map7 SubsidizedRentalCommunities......................................................................................................................57 Page iv TupeloRidge|ExecutiveSummary 1. EXECUTIVE SUMMARY Zimmerman Properties, LLC has retained Real Property Research Group, Inc. (RPRG) to conduct a comprehensive market feasibility analysis for Tupelo Ridge, a proposed rental community in southwesternWarnerRobins,Georgia. Asproposed,TupeloRidgewillbefinancedinpartwithLow IncomeHousingTaxCredits(LIHTC)fromtheGeorgiaDepartmentofCommunityAffairs(DCA). The following report, including the executive summary, is based on DCA’s 2017 market study requirements. 1. ProjectDescription • The subject site is on the west side of South Houston Lake Road just north of its intersection with Feagin Mill Road in southwestern Warner Robins, Houston County, Georgia. • Tupelo Ridge will comprise 92 general occupancy rental units including 22 LIHTC units targeting householders earning up to 50 percent of the Area Median Income (AMI), 36 LIHTCunitstargetinghouseholdsearningupto60percentAMI,and34marketrateunits. • Adetailedsummaryofthesubjectproperty,includingtherentandunitconfiguration,is showninthetablebelow. Therentsshownwillincludewater/sewerandtrashremoval. UnitMix/Rents Income Gross Net Bed Bath Size(sqft) Quantity Utility Target Rent Rent 1 1 50%AMI 800 3 $584 $89 $495 1 1 60%AMI 800 4 $689 $89 $600 1 1 Market 800 5 $739 $89 $650 2 2 50%AMI 1,000 8 $700 $110 $590 2 2 60%AMI 1,000 19 $785 $110 $675 2 2 Market 1,000 15 $835 $110 $725 3 2 50%AMI 1,250 8 $807 $132 $675 3 2 60%AMI 1,250 11 $882 $132 $750 3 2 Market 1,250 11 $932 $132 $800 4 2 50%AMI 1,400 3 $878 $153 $725 4 2 60%AMI 1,400 2 $953 $153 $800 4 2 Market 1,400 3 $1,003 $153 $850 Total 92 Rentsincludewater/sewerandtrashremoval Source:ZimmermanProperties,LLC • In-unit features offered at the subject property will include a range, refrigerator, dishwasher,garbagedisposal,microwave,ceilingfans,andfullsizewasher/dryerineach unit. These unit featuresare comparabletoorsuperiorto existingcommunities inthe market area excluding Asbury Parke and Chatham Park which are two Upper Tier communities offering upscale unit features. The subject property will be the only Page 1 TupeloRidge|ExecutiveSummary communityinthemarketareawithawasheranddryerincludedineachunitandwillbe theonlyLIHTCcommunitywithmicrowavesineachunit. • TupeloRidge’scommunityamenitypackagewillincludeacommunityroom,community learning center, fitness center, computer/library room, playground, BBQ area, and community garden. This amenity package paired with the low proposed rents will be competitivewithsurveyedrentalcommunitiesintheTupeloRidgeMarketAreaincluding the existing LIHTC communities. The lack of a swimming pool at Tupelo Ridge is acceptablegiventhelowproposedrentsandthesubject’ssmallsize(92units)compared tothesurveyedcommunitieswhichaverage205units. 2. SiteDescription/Evaluation: The subject site is a suitable location for mixed-income rental housing as it is compatible with surrounding land uses and has ample access to amenities, services, employers, and transportation arteries. • The subject site is in a growing residential neighborhood in southwestern Warner Robins. Single-familydetachedhomesandmulti-familyrentalcommunitiesarecommonwithintwo milesofthesite. • The site is within two miles of community amenities and services including retail, public transit, conveniencestores, apharmacy, banks, restaurants, agrocery store,public schools, andmedicalfacilities. ThesitewillhaveconvenientaccesstomajorthoroughfaresinWarner Robinswhichprovideaccesstoemploymentintheregion. RobinsAirForceBaseisthelargest employerinthecountybyfarandisroughlysixmileseastofthesiteviaRussellParkway. • Thiscrimerisknearthesiteiscomparabletoorlessthanmuchofthemarketareaincluding thelocationofnearlyallofthemostcomparablerentalcommunities. • TupeloRidgewillhaveexcellentvisibilityfromSouthHoustonLakeRoadandresidentsofthe communitywillaccessthesiteviaanentranceonSouthHoustonLakeRoad. 3. MarketAreaDefinition • TheTupeloRidgeMarketAreaconsistsofcensustractsprimarilyinthesouthwesternportion of Warner Robins. The neighborhoods included in the Tupelo Ridge Market Area are those mostcomparablewiththeareaimmediatelysurroundingthesubjectsiteandresidentsofthis market area would likely consider the subject property a suitable place to live; the most comparable multi-family rental communities in Warner Robins are inside this market area. Southwestern Warner Robins which extends to the Houston and Peach County line is a growing portion of the Warner Robins area. The market area does not include portions of Warner Robins north of Watson Boulevard due to the older nature of development and it doesnotextendsouthintoPerryasthisareaisaseparateanddistinctsubmarketinHouston County. The boundaries of Tupelo Ridge Market Area and their approximate distance from the subject site are Watson Boulevard (3.1 miles to the north), Robins Air Force Base / U.S. Highway129(4.4milestotheeast),LangstonRoad(5.0milestothesouth),andPeachCounty (3.3milestothewest). 4. CommunityDemographicData • TheTupeloRidgeMarketAreagrewsignificantlyfrom2000to2010.Growthcontinuedover thepastsevenyears,albeitataslowerpace;growthratesareprojectedtoincreaseslightly overthenexttwoyears. Page 2 TupeloRidge|ExecutiveSummary o Themarketareaadded1,981people(3.4percent)and777households(3.5percent)per yearbetweenthe2000and2010censuscounts.Growthcontinuedataslowerpacefrom 2010 to 2017 with 1.0 percent annual population growth and 0.9 percent annual householdgrowth. o Esri projects annual population and household growth in the market area to accelerate slightly overthe next twoyears comparedto the past sevenyears. Themarket area is projectedtoadd849people(1.1percent)and288households(1.0percent)peryearfrom 2017to2019. • Youngworkingagehouseholds(age25to44)accountformorethanhalf(56.3percent)ofall rentersinthemarketareaincluding35.2percentage25to34years. Roughly14percentof marketarearentersareage45to54yearsoldandlessthan20percentareage55yearsand older. • Roughly41percentofallhouseholdsinthemarketareahadchildrenpresent.Analmostequal percentage (36.5 percent) of households have two or more adults and no children; nearly three-quartersofthesehouseholdsaremarried.Single-personhouseholdscompriselessthan aquarterofallhouseholds. • TheTupeloRidgeMarketArea’s2010renterpercentagewas32.1comparedto33.3percent in Houston County. The market area’s renter percentage is estimated to have increased to 36.0 percent in2017 and is projectedto increase to36.2 percent by 2019; the market area added 1,650 total renter households (97.3 percent of net household growth) from 2010 to 2017 and is projected to add 246 total renter households over the next two years (42.7 percentofnethouseholdgrowth). • The majorityofmarket arearenterhouseholds(56.5percent) containedoneortwo people including30.5percentwithoneperson. Householdswiththreeorfourpeopleaccountedfor 31.8 percent of renter households and large households (5+ people) accounted for 11.6 percentofrenterhouseholds. • The 2017 median household income in the Tupelo Ridge Market Area is$64,553, $5,369 or 9.1 percent higher than the $59,184 median in Houston County. RPRG estimates that the medianincomeofrenterhouseholdsintheTupeloRidgeMarketAreais$44,458. Roughly27 percent ofrenters inthe market areaearn less than $25,000, 29.3 percent earn $25,000 to $49,999,and20.1percentearn$50,000to$74,999. • We do not believe foreclosed, abandoned, or vacant single/multi-family homes will impact thesubjectproperty’sabilitytoleaseitsunitsgivenitsprimarilyaffordablenature. 5. EconomicData: HoustonCounty’seconomyistrendingupwardwithrecentjobgrowthandadecliningunemployment rate. • HoustonCounty’sunemploymentratehasdecreasedineachofthepastfiveyearstoaneight- yearlowof5.4percentin2016whichisthesameasthestaterate. • Houston County’s At-Place Employment grew by 26 percent from 2000 to 2007 with the addition of 11,639 total jobs. At-Place-Employment has been cyclical since this period of growthwithfouryearsofjobgrowthandfouryearsofdecline;losesweretemperedduring the recession as Robins Air Force Base buffered the county from significant job loss. The county added 637 jobs in 2015 and 1,555 more jobs through the third quarter of 2016, reachinganall-timehighjobtotalforthecounty. Page 3 TupeloRidge|ExecutiveSummary • GovernmentisthelargestemploymentsectorinHoustonCounty,accountingfor41.1percent of all jobs in 2016 (Q3) compared to 15.5 percent of national employment; a major driving forceofthecounty’seconomyisRobinsAirForceBase. Nootherindividualsectoraccounts formorethan13.4percentofthecounty’sjobs. • CommutingdataindicatesthatmostworkersintheTupeloRidgeMarketAreaworklocallyas three-quarters of workers commute less than 30 minutes to work and over three-quarters (77.3percent)areemployedinHoustonCounty. • TwomanufactureshavemovedtoorexpandedemploymentinHoustonCountysince2016, creating170totalnewjobs. Twojobexpansionswereannouncedinlate2015atRobinsAir Force Base including 400 total new jobs; no major expansions or contractions have been announcedatthebasesince2016. • Houston County’s economy is trending upward with recent job growth and a declining unemploymentrate. 6. ProjectSpecificAffordabilityandDemandAnalysis: • TupeloRidgewillcontain92generaloccupancyrentalunitsincluding12one-bedroomunits, 42 two-bedroom units, 30 three-bedroom units, and eight four-bedroom units. Fifty-eight LIHTCunitswilltargethouseholdsearningupto50percentor60percentoftheAMIand34 marketrateunitswillnothaveincomeorrentrestrictions. • The50percentunitswilltargetrenterhouseholdersearningbetween$20,023and$38,150. The 22 proposed units at 50 percent AMI would need to capture 1.0 percent of the 2,309 income-qualifiedrenterhouseholdsinordertolease-up. • The60percentunitswilltargetrenterhouseholdersearningbetween$23,623and$45,780. The 36 proposed units at 60 percent AMI would need to capture 1.4 percent of the 2,526 income-qualifiedrenterhouseholdsinordertolease-up. • Themarketrateunitswilltargetmoderateincomerenterhouseholdersearningbetweenan estimated$25,337and$61,040. The34proposedmarketrateunitswouldneedtocapture 0.9percentofthe3,636income-qualifiedrenterhouseholdsinordertolease-up. • Theoverallaffordabilitycaptureratefortheprojectis2.1percent. • BasedonDCAmethodology,totalnetdemandforall92proposedunitsintheTupeloRidge MarketAreais1,014households,resultinginacapturerateof9.1percent.Captureratesby income level are 2.7 percent for the 50 percent units, 4.4 percent for the 60 percent AMI units,6.2percentforallLIHTCunits,and3.6percentforthemarketrateunits. TupeloRidge's captureratesbyfloorplanrangefrom1.5percentto11.4percent. • AllcaptureratesarewellbelowDCAthresholdsandindicatemorethansufficientdemandin the market area to support the proposed Tupelo Ridge and multiple pipeline communities includingThePinesatWestdale’sLIHTCunits. 7. CompetitiveRentalAnalysis RPRGsurveyed20multi-familyrentalcommunitiesintheTupeloRidgeMarketAreaincludingthree LIHTCcommunities.WedesignatedsevenmarketratecommunitiesasUpperTierandtheremaining surveyedcommunitiesincludingthethreeLIHTCcommunitiesasLower/AffordableTiercommunities. The rental market was performing well including both Upper Tier and Lower/Affordable Tier communities. Page 4 TupeloRidge|ExecutiveSummary • The 19 stabilized communities had 120 vacancies among 3,894 combined units for an aggregatevacancyrateof3.1percent;ChathamParkisundergoinginitiallease-upandisnot included in stabilized totals. Chatham Park is still under construction but 110 units are completed and leased. The Upper Tier was performing better than the Lower/Affordable Tierswithvacancyratesof2.3and3.6percent,respectively. • The three LIHTC communities had 10 vacancies among 372 total units for avacancy rate of 2.7 percent. All LIHTC communities had a vacancy rate of less than five percent including PacificParkwhichwasfullyoccupiedwithawaitinglist. • Amongthe20surveyedcommunities,netrents,unitsizes,andrentspersquarefootwereas follows: o One-bedroomeffectiverentsaveraged$696permonth. Theaverageone-bedroom unitsizewas832squarefeet,resultinginanetrentpersquarefootof$0.84. o Two-bedroomeffectiverentsaveraged$791permonth. Theaveragetwo-bedroom unitsizewas1,111squarefeet,resultinginanetrentpersquarefootof$0.71. o Three-bedroom effective rents averaged $893 per month. The average three- bedroom unit size was 1,324 square feet, resulting in a net rent per square foot of $0.67. o LIHTCrentsrangefrom$549to$595forone-bedroomunits,$630to$685fortwo- bedroomunits,and$700to$775forthree-bedroomunits. • Average rents at the Upper Tier communities are roughly $150 to $225 higher than the averagerentsamongLower/AffordableTiercommunities. • The“averagemarketrent”inthemarketareawas$718forone-bedroomunits,$825fortwo- bedroomunits,and$945forthree-bedroomunits. Theaveragethree-bedroommarketrent was utilized for the average four-bedroom market rent as no four-bedroom units were surveyedinthemarketarea. Thesubjectproperty’sproposed50percentand60percentAMI rentsareallwellbelowtheseaveragemarketrentswithrentadvantagesrangingfrom15.3 percent to 31.1 percent; all of the subject’s proposed market rate rents are well below average market rents in the market area and the project’s overall weighted average rent advantageamongLIHTCunitsis22.2percent. • A200-unitmarketratecommunity(ChathamParke)isunderconstructiononCohenWalker DriveneartheintersectionofSouthHoustonLakeRoadandStateHighway96,1.5milessouth ofthesite. Theunitsatthiscommunitywillcompetewiththemarketrateunitsproposedat the subject property; however, rents are well above those proposed at Tupelo Ridge. The PinesatWestdaleisunderconstructionadjacenttothesitetothenorthandwillinclude180 LIHTCunitstargetinghouseholdsearningupto50percentor60percentoftheAreaMedian Income(AMI). Thiscommunitywilldirectlycompetewiththesubjectpropertygivensimilar incomeandrentrestrictions. 8. Absorption/StabilizationEstimates • Based on projected household growth, the number of income-qualified renter households projected in the market area, demand estimates, rental market conditions, and the marketabilityoftheproposedsiteandproduct,weexpectTupeloRidge tolease-upatarate of15unitspermonth. Atthisrate,thesubjectpropertywillreachastabilizedoccupancyof at least 93 percent within six months. Limited to no overlap of absorption periods are expected between the subject property and The Pines at Westdale which is a LIHTC communityunderconstructionadjacenttothesite. Page 5