MADISON MARKET 2013 LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI December 2013

Title Madison Market Landretti & Company - Dominic Landretti, MAI - December DANE COUNTY

Subdivision Plats Madison Market Landretti & Company - Dominic Landretti, MAI - December 20133

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New Construction – Major Projects Madison Market Landretti & Company - Dominic Landretti, MAI - December Total of 16 projects Cost and footages were not available for all projects

Major New Construction - Proposed Madison Market Landretti & Company - Dominic Landretti, MAI - December Not all footages and costs were available Projects include all uses – Only two were indicated as industrial About 60% of the projects are multifamily or mixed use with a large multifamily component Majority of construction projects are located downtown Madison, about 20%

The Constellation Madison Market Landretti & Company - Dominic Landretti, MAI - December 20137

Spectrum Brands Madison Market Landretti & Company - Dominic Landretti, MAI - December 20138

The Edgewater Madison Market Landretti & Company - Dominic Landretti, MAI - December Hotel Rooms 12,500 Commercial Space Exterior Walking Areas July 2013 September 2013

New Construction Summary Madison Market Landretti & Company - Dominic Landretti, MAI - December Proposed or under construction to be completed within one to three years Total square feet and cost was not available for all projects Total cost was reported for only 43 of the 74 listed projects, or about ~58% – Extrapolates to about $1.4 billion of new construction

Historic New Construction Summary Madison Market Landretti & Company - Dominic Landretti, MAI - December $1.4 billion of construction is equivalent to the new construction added from 2008 to 2012 Dane County 2013 Equalized Value for commercial and industrial property is $13.5 billion

New Construction Summary Other Notables Madison Market Landretti & Company - Dominic Landretti, MAI - December – Judge Doyle Square, Downtown Madison (Source: WSJ October 6, 2013) – 800 Block East Washington Avenue $65 million 13 story mixed use project on 4.5 acres to be purchased from City Phase I - 50,000s square feet for grocery,175 to 240 residential units, and 350 space parking garage Phase II – 22 owner-occupied homes, 65,000 square foot of commercial space, and 173 parking stalls

Multifamily Highlights Madison Market Landretti & Company - Dominic Landretti, MAI - December

Madison Market Landretti & Company - Dominic Landretti, MAI - December Vacancy declined as construction slowed Permits have not been issued for all proposed construction

Multifamily Demand Madison Market Landretti & Company - Dominic Landretti, MAI - December LineDetailIn 3 YearsComments 1Forecasted new competition of units 5, Completed and Proposed 2Percentage of renter occupied units41.6%2010 US Census; includes vacant units 3Implied housing unit demand (total households) 12,077Line 1 / Line 2 4Persons per household US Census 5Population needed to support implied demand 28,139Line 3 * Line 4 6Existing Population 497,021Wisconsin DOA as of 1/1/13 7Annual population increase needed to support additional demand1.9%Growth Rate Factor over three years Impact on Market: Population Growth: 1990 to 2000 – 1.5% 2000 to 2010 – 1.4% Growth may need to increase or percentage of renters may need to increase Millennials are favoring renting versus home ownership – strong Epic influence Existing occupants will likely upgrade to new housing Vacancy will likely increase Rent will experience downward pressure

Land Trends Madison Market Landretti & Company - Dominic Landretti, MAI - December Multifamily sites – Selling between $8,000 and $30,000 per unit with the average about $10,000 to $15,000 per unit – Location and density driving price Commercial sites – Selling between $5 and $30 per foot – Size and exposure driving price Industrial land sales are minimal

Improved Commercial Trends Madison Market Landretti & Company - Dominic Landretti, MAI - December Multifamily is dominating the market – Mixed use is predominately multifamily Office demand appears low – Some new development for existing companies Spectrum, Mead & Hunt – Both vacated existing space in Madison to move to Middleton Retail demand is moderate to high – Credit tenants and exposure are necessary – New construction rents are $25-$40 per foot NNN

Madison Market Landretti & Company - Dominic Landretti, MAI - December

Questions? Madison Market Landretti & Company - Dominic Landretti, MAI - December Thank you Contact: Dominic Landretti, MAI Landretti & Company, LLC 1818 Parmenter Street, Suite 202 Middleton, Wisconsin (608) x100