1. Viewpoint 2015 Real Estate Trends & Investment Criteria
Integra Realty Resources
Viewpoint 2015
Real Estate Trends & Investment Criteria

2. Office Locations and Services
Valuation and Counseling
Due Diligence
Transactional & Litigation Support
Specialty Property Expertise
Portfolio Valuation
Development Incentives

3. Office Properties

4. Office Properties CBD Office Market Cycle
© 2014 Integra Realty Resources, Inc.

5. Case Study: Ally Center – CBD Class A
Sale Price: $ million
Sale Date: 10/28/2014
Rentable Area: 367,595 SF
Unit Price: $295.84/SF
Cap Rate: 6.26% based on in-place income
Buyer: EPIC NC, LLC
Seller: 440 Church Street Venture
Occupancy: 99.5%
Year Built 2009
PICTURE
Comments: 15 stories with 7,026 square feet of ground-level retail built in Tenant size ranges between 715 square feet and 133,238 square feet. The property is part of a master condominium development that contains four buildings within one larger parcel.

6. Case Study: Coliseum Centre (3,5 & 6) – Suburban Class A
Sale Price: $64 million
Sale Date: 6/16/2014
Rentable Area: 490,319 SF
Unit Price: $130.53/SF
Cap Rate: 8.60% based on in-place income
Buyer: Coliseum Center Owner, LLC
Seller: CV Coliseum Building, LLC
Occupancy: 88%
Year Built:
Comments: Three Class-A buildings in the Coliseum Centre Office Park. Sale included a 5.8-acre parcel with additional parking. Largest tenants included Compass, LPL Financial, and Goodrich Corp. LPL Financial will vacate their space in The office park is located in close proximity to Charlotte Douglas International Airport with easy access to Interstates 77 and 85.

7. Case Study: 5811 Glenwood Avenue – Suburban Class B
Sale Price: $4.8 million
Sale Date: 7/15/2014
Rentable Area: 37,257 SF
Unit Price: $128.83/SF
Cap Rate: 8.23% based on in-place income
Buyer: Longvalley I, LLC
Seller: EOR-5811 Glenwood Avenue, LLC
Occupancy: 100%
Year Built: 2000
Comments: Property was 100% occupied at the time of sale with no near term leases.

8. Apartment Properties

9. Apartment Properties Apartment Cycle Chart
© 2014 Integra Realty Resources, Inc.

10. Case Study: Apartments at Quarterside – Urban Class A
Sale Price: $31.2 million
Sale Date: 2/3/2014
Rentable Area: 154,819 SF
No. of Units: 184
Unit Price: $169,565 / Apt. Unit
Cap Rate: 5.03%
Buyer: Quarterside (K21) Apartments (75%), et al.
Seller: Quarterside Charlotte Apartments, LLC & GRDF Quarterside, LLC
Year Built: 2008
Comments: Cap rate is based on T-3 operations and in-place expenses including $250 per unit reserves. Property includes 9,217 square feet of office/retail space that was 66% occupied at the time of sale.

11. Case Study: Madison Square at Northlake – Suburban Class A
Sale Price: $38.31 million
Sale Date: 2/10/2014
Rentable Area: 267,266 SF
No. of Units: 287
Unit Price: $133,500 / Apt. Unit
Cap Rate: 5.36%
Buyer: Northlake Madison
Properties (43%), et al.
Seller: Northlake Residential Associates, LLC
Year Built: 2012
Comments: Cap rate based on T-3 operations and in-place expenses adjusted for taxes including $250 per unit for reserves. Ten, three story garden-style apartment buildings on 16.5 acres.

12. Case Study: Nevin Place Apartments – Suburban Class B
Sale Price: $3.7 million
Sale Date: 7/18/2014
Rentable Area: 44,679 SF
No. of Units: 55
Unit Price: $67,273 / Apt. Unit
Cap Rate: 6.80%
Buyer: Nevin Place, LLC
Seller: Nevin Place Apartments, LLC
Year Built: 1998
Comments: Cap rate based on T-12 operations and in-place expenses. Seven, two-story buildings with garages for rent.

13. Retail Properties

14. Retail Properties Retail Market Cycle
© 2014 Integra Realty Resources, Inc.

15. Case Study: Northlake Commons Shopping Center – Class A
Sale Price: $31.5 million
Sale Date: 9/5/2014
Rentable Area: 103,306 SF
Unit Price: $304.92/SF
Cap Rate: 7.15%
Buyer: ARC NCCHRN001, LLC
Seller: Northlake Commons, LLC
Occupancy: 92%
Year Built: 2005
Comments: Walkable, urban-style shopping center adjacent to Northlake Mall. Tenants include Party City, FedEx/Kinko’s, Starbucks, Men’s Wearhouse, Panera Bread, and Fox and Hound. Five outparcels include Chick-Fil-A, On the Border, Olive Garden, Red Robin, and Chili’s.

16. Case Study: Sardis Village Shopping Center – Class B
Sale Price: $3.15 million
Sale Date: 12/05/2014
Rentable Area: 40,242 SF
Unit Price: $78.28/SF
Cap Rate: 8.00%
Buyer: Waldorf DG, LLC
Seller: Azalea Limited Partnership
Occupancy: 97%
Year Built: 1983/1987
Comments: The Food Lion lease was set to expire soon but had options in place. Additionally, Food Lion had recently renovated the store at its own expense.

17. Industrial Properties

18. Industrial Properties
Industrial Cycle Chart
© 2014 Integra Realty Resources, Inc.

19. Case Study: Coffey Creek Carrier Center – Class A Flex
Sale Price: $10.3 million
Sale Date: 12/18/2014
Rentable Area: 116,554 SF
Unit Price: $88.37/SF
Cap Rate: 7.34%
Buyer: Wells Fargo as Trustee of the Will of W.A. Wilson
Seller: Carrier Centers, LLC
Occupancy: 78%
Year Built: 2001
Comments: Sale was part of a two-property portfolio along with the adjacent property but valued separately in the purchase contract. The property includes above average quality tenants including Charlotte Hospital System and Schindler Elevator. Duke Energy leases the roof and has installed solar panels. 28 dock high and 4 drive-in doors, 40% office and 20’ clear height.

20. Case Study: Chemway Industrial Buildings – Class B Warehouse
Sale Price: $10.95 million
Sale Date: 10/28/2014
Rentable Area: 387,038 SF
Unit Price: $28.29/SF
Cap Rate: 8.76%
Buyer: Beacon #39 (Beacon Partners)
Seller: Carlson Real Estate Investments-Chemway, LLC
Occupancy: 98%
Year Built: 1966, 1969, 1971 and 1973
Comments: Four buildings on four parcels served by a CSX rail line. Contract rents estimated to be 10% below market. Combined total of 56 dock high and 4 drive-in doors. Combined total of 3% office and clear heights are 22’ in three buildings and 28’ in the fourth. NOI based on contract rents in place at the time of sale, a market vacancy of 8%, and actual expense data for the property.

21. IRR Forecast

22. AVERAGE GOING-IN CAP RATE
Capitalization
2013–2014 Class A Cap Rate Changes
AVERAGE GOING-IN CAP RATE
2014
2013
2013–14∆
Urban Multifamily
5.52%
5.76%
-0.23%
Suburban Multifamily
5.67%
5.87%
-0.20%
Regional Mall
6.83%
7.01%
-0.18%
Community Retail
7.17%
7.26%
-0.10%
CBD Office
7.05%
7.37%
-0.32%
Neighborhood Retail
7.33%
7.41%
-0.07%
Industrial
7.11%
7.50%
-0.39%
Suburban Office
7.43%
7.68%
-0.25%
Flex Industrial
7.79%
8.01%
-0.22%

23. National Real Estate Cap Rate Ranks
RANGE
MEDIAN
AVERAGE
CHARLOTTE
IRR 2016 FORECAST
Urban Multifamily – Class A
4.00 –
8.00
5.50
5.52
5.00 −
Suburban Multifamily – Class A
7.00
5.75
5.67
Urban Multifamily – Class B
4.50
8.75
6.25
6.38
6.00
Suburban Multifamily – Class B
4.30
8.50
6.50
6.75
Regional Mall Retail
9.50
6.83
7.25
N/A
Community Retail Center – Class A
5.25
8.55
7.17
CBD Office – Class A
10.50
7.05 ↓
Neighborhood Retail – Class A
9.00
7.40
7.33
Industrial – Class A
7.11
Suburban Office – Class A
5.30
7.50
7.43
7.75
CBD Office – Class B
11.25
7.84
Flex Industrial – Class A
4.55
10.00
7.79
Suburban Office – Class B
6.10
8.25
8.06
Lodging – Full Service
8.13
Lodging – Limited Service
11.00
8.78
9.25
© 2014 Integra Realty Resources, Inc.

24. Factors’ Impact on Cap Rates Vary by Class