Deal Activity - - 2006 2006 7,000 $80,000 Deal Activity $70,000 - PDF document

2007 Multifamily Market: Review and Assessment Aubrey L. Layne, Jr. President Great Atlantic Management GREAT ATLANTIC • Deal Activity and Headlines • Economic and Operating Environment • Outlook HR Apartment Deal Volume and Price Deal Activity - - 2006 2006 7,000 $80,000 Deal Activity $70,000 6,000 $60,000 5,000 volume in units $50,000 price in $ 4,000 $40,000 3,000 $30,000 • Unit Volume Down • Unit Volume Down 2,000 $20,000 1,000 $10,000 • Core Pricing Flat • Core Pricing Flat 0 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 Sources: Great Atlantic, volume price Real Data 1

Biggest Deal in 2006 • Alta Cove Now Empirian Chesapeake • $63 Million and $168,000 Per Unit Bonaventure Group Enters HR • 702 Units in 2006 • 540 Units in 2005 Economic and Operating Environment 2

Apartment Cap Rates, Interest Rates and Spreads Renter's Monthly Cash Flow Advantage 9% 450 $1,800 $800 8% 400 $1,600 $700 $1,400 7% 350 cap rates $600 Hom e P&I and Rent Renter's Advantage $1,200 6% 300 $500 spread (bps) $1,000 $400 5% 250 $800 interest rates $300 4% 200 $600 $200 3% 150 $400 spread $100 $200 2% 100 Sources: Capital Analytics, Federal Reserve $0 $0 1% 50 2000 2001 2002 2003 2004 2005 2006 1 2 3 4 5 6 7 0 0 0 0 0 0 0 Sources: 0 0 0 0 0 0 0 2 2 2 2 2 2 2 ODU, Real Data home P&I avg rent renter savings 10-Year Treasury avg cap rate spread (bps) Home Owner Vacancy In Dwellings With 2 or More Units 11% 10% 9% 8% 7% 6% 5% 4% 3% Source: US Census Dept. 2% 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 HR Apartments Under Construction and Starts Employment 3000 2500 Apartm ent Units 2000 1500 1000 500 • Ford Plant Closing 0 • BRAC – 2008, Mostly on Peninsula 8 9 0 1 2 3 4 5 6 9 9 0 0 0 0 0 0 0 9 9 0 0 0 0 0 0 0 1 1 2 2 2 2 2 2 2 • 2007 Unemployment 3.7% Source: Real Data Under Construction Starts 3

HR Rent Growth and Core Inflation HR Vacancy Rates and Rent Growth 8.0% 8.0% 7.0% 6.0% 6.0% 5.0% vacancy 4.0% 4.0% rent growth 3.0% 2.0% 2.0% 1.0% 0.0% Sources: US Dept. of Labor, Real Data 0.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 8 9 0 1 2 3 4 5 6 7 9 9 0 0 0 0 0 0 0 0 9 9 0 0 0 0 0 0 0 0 Source: Real Data 1 1 2 2 2 2 2 2 2 2 HR Rent Growth Core Inflation Outlook - 2007 • Buyers : Competitive Market • Sellers : Relatively High Prices • Owners : Positive Operating Environment • Renters : More Choice and Modestly Higher Rents 4