9:30 AM – General Session

Game Changers: New Plans & Perspectives from Active

Developers

Next Level AmenitiesTrends in creative amenities:

• Outdoor theaters• Rooftop pool decks• Bike storage & workshops• Concierge services• Valet / House car• Pilates & Yoga studios• Bark parks• Pet wash stations• Retail / Mixed-use

Author: MVE + Partners

Author: MMC Research

BAY AREA HOME SALES ACTIVITY

Total Sales Average Longterm Home Sales Foreclosure Sales

120 28

Long-term annual average sales ~ 77,795

90 21

60 14

30 7

0 0

Bay

Area

Res

iden

tial S

ales

(000

s)Bay Area Foreclosure Sales (000s)

$5.00

$4.50

$4.00

$3.50

$3.00

$2.502011

Class-A ApartmentEconomics

2012 2013

Market Rent PSF

2014 2015

— A l l - I n Cost Per Unit

$250,000 2016

• Apartment rents have increased 50%• All-in project costs have increased 100%• Actual return-on-cost has decreased from 6.5% to 5.0%

$550,000

$500,000

$450,000

$400,000

$350,000

$300,000

Author: Sares Regis Group Northern California

$600,000

10:25 AM – General Session

Go Long: Value-Add, Repositioning and Long-Term Value Strategies for Late in

the Cycle

What’s not to like?

California Population GrowthThe Trend is Your Friend.

Author: Al Pace

What’s not to like?

1846 1850 1900 2000 2015 -

5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000

10,000 94,000 1,500,000

34,000,000 39,000,000

Population, State of California Since 1846

*non-indigenous peoples

*

Author: Acacia Capital

12/6

/200

24/

24/2

003

1/9/

2004

4/30

/200

49/

11/2

004

10/1

9/20

045/

26/2

005

9/1/

2005

4/3/

2006

6/29

/200

62/

1/20

073/

13/2

007

7/30

/200

79/

12/2

007

12/1

4/20

073/

20/2

008

6/25

/201

06/

29/2

010

10/2

8/20

104/

22/2

011

6/7/

2011

7/12

/201

19/

22/2

011

11/1

0/20

1111

/30/

2011

6/28

/201

28/

1/20

1212

/20/

2012

7/31

/201

312

/14/

2013

12/2

/201

47/

31/2

015

10/2

9/20

154/

19/2

016

10/3

1/20

16

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%Return on Cost vs. Debt Coupon

Return on Cost Debt Cost Spread Average Historical Spread

Bay Area Rent Growth Projections

Author: TruAmerica Multifamily

Source 2017 2018 2019 3-Year Average Source 2017 2018 2019 3-Year AverageReis 2.40% 3.60% 4.60% 3.53% Reis 4.30% 3.50% 3.10% 3.63%Axiometrics 3.50% 3.40% 3.90% 3.60% Axiometrics 1.70% 4.10% 5.20% 3.67%Annual Average 2.95% 3.50% 4.25% 3.57% CBRE 3.60% 1.70% 0.20% 1.83%

Annual Average 3.20% 3.10% 2.83% 3.04%

North Bay South Bay

Source 2017 2018 2019 3-Year Average Source 2017 2018 2019 3-Year AverageReis 2.40% 2.60% 2.40% 2.47% Reis 4.30% 3.60% 2.90% 3.60%Axiometrics 2.30% 4.00% 4.70% 3.67% Axiometrics 2.80% 4.20% 5.50% 4.17%CBRE 1.90% 0.20% -1.50% 0.20% CBRE 0.90% -0.20% -3.30% -0.87%Annual Average 2.20% 2.27% 1.87% 2.11% Annual Average 2.67% 2.53% 1.70% 2.30%

East Bay Peninsula

11:45 AM – Concurrent Session – AIn It to Win It: Today’s Best Practices

for Acquisitions and Dispositions

Environmental Challenges & SolutionsChallenges:• Understand corporate risk tolerance• Vapor intrusion• Legacy pesticides in soil• Source property• Deed restrictions• Regulatory agency buy-in

Solutions:• Fail-safe remedies if feasible (e.g., podium construction)• Site planning with regard to contamination (e.g., strategic

placement of open spaces or parking)• Proactive remedies to protect long-term liability• Ownership that is a single entity & offers financial stability

Author: Michelle KingErler & Kalinowski, Inc.

Author: Jim Alexander

(1) Includes Los Angeles, San Diego and Orange County, CA.

Represents percentage of NOI.

93 Properties

22,407 Units

54 Properties

12,756 Units

37 Properties

7,096 Units30 Properties

7,588 Units

40 Properties

10,632 Units

47 Properties

15,637 Units

EQR Portfolio Characteristics

‒ 24/7 gateway cities

‒ Strong demand drivers

‒ Constrained supply characteristics

‒ Best long term value creation

EQR’s portfolio is focused in the six core, coastal markets

San Francisco

Southern California (1) Washington, D.C.

New York

Seattle Boston8%

20%

25%

17%

19%

11%

San Francisco Attributes

‒ Median income 1.5x national average

‒ Home price to income ratio 11.7x

‒ Despite increased supply, structurally under housed

Author: Marshall Boyd

PROMETHEUS REAL ESTATE GROUP, INC.

Author: John Millham

Is now the right time to start a new multifamily development in the SF Bay Area:YES! Market rents are up 45%-55% since the bottom of the market in 2010 and employment growth still exists!BUT:1. Hard Costs have increased 100%.2. Land Prices are up 75% - 100%.3. City Fees/Exactions are up anywhere from 50% - 150%.4. Entitlement Process Longer with increased risk to success.5. Construction Financing is increasingly difficult to procure (lower

proceeds/wider spreads).6. General Contractor/Subcontractor execution spotty. Huge labor issue.7. Rents moderating to declining –market shift, time of year, election?8. Overall ROC’s down 100-125 basis points.Answer: DEPENDS! Need a very long term view and “must have” sites

11:45 AM – Concurrent Session – BNext Gen Spaces &

Neighborhoods: Breaking the Mold through Design & Construction

Residents Experience• Renters by Choice - Mobility• Arrival Sequence - Leasing as a Secondary Activity

• First Impression - Experience + Materiality• Community + Individuality• Creative Opportunities - Instagram Moments

• Tell a Story - Locavore, Local Connection• Wellness Focused

• Curated Activities• Active Lifestyle

• Resist the Need to Include EVERYTHING• Sense of “HOME” - Simple Retreat

Author: Teresa Ruiz/SB Architects

Example 1: Construction Cost Breakdown1699 Mark Street, San Francisco – Mid-Market Apartment ProjectTotal Buildable Square Footage: 126,767 sfLand Acquisition Cost: Labor Cost: $350 / sfMaterials Cost: $125 / sfFinancing Cost: $50 / sfOthers Costs: $175 / sfTotal Costs (excluding land): $700 / sfExpected Disposition Pricing: $1,000 / sf

Author: Tony Craig

Flight to affordability

Author: Curtis Development

Sacramento Housing Boosted by Bay Area Refugees Source:

The Sunset District is San Francisco's hottest neighborhood Source: CurbedSF

Millennials Driving Design

Author: Ivy Greaner, FivePoint

13.4%

30.1%

20.0%

24.9%

11.6%

0%

5%

10%

15%

20%

25%

30%

35%

GenZ Millennial GenX Baby Boomer Traditionals

POPULATION BY GENERATION

Source: Real Estate Economics, San Francisco-Redwood City-South San Francisco, CA MD, Q2 2016

Millennials (18-34) are redefining the ”American Dream” Purchasing fewer homes // renting Flexibility of being transient or living in areas with great

amenities Entrepreneurial spirit changing the workforce 

Spruce Renovation

Author: Mary Nitschke, Prometheus

Author:

• Efficient Schedule (Multi-tasking)• Less Waste / Greener Construction Process / Less Site

Disturbance • Consistent/ Qualified / Permanent / Offsite Workforce• Creates increase in depth of Qualified Subcontractors

Modular EfficiencyMODUAR CONSTRUCTION

Design & Engineering

Permits & Approvals

Site Development & Foundations/Podium

Install & Site Restoration TIME SAVINGS REALIZED

SITE BUILT CONSTRUCTION

Design & Engineering

Permits & Approvals

Site Development & Foundations/Podium

Conventional Construction

SiteRestoration

Modular Production/Delivery

12:35 PM – Concurrent Session – AThe Cash Melting Pot: The Changing

Debt and Equity Landscape

Author: Scott Croul

Lone Oak Fund Recent TransactionsBroken Condo Project (Refinance) - $4,630,000 1st Trust Deed

- Location: Rancho Palos Verdes, California- Collateral: 11 luxury condominium units in a 28-unit

building- Purpose of Loan: Pay off maturing construction loan- Exit Strategy: Sale of units (partial releases were provided)

Value-Add Industrial (Acquisition) - $7,500,000 1st Trust Deed- Location: Oakland, California- Collateral: 277,000 sq. ft. industrial building on 5 acre lot- Purpose of Loan: Acquire 40% occupied industrial building- Exit Strategy: Pay off once property is leased up

1031 Exchange – Retail Cross (Acquisition) - $6,000,000 1st Trust Deed

- Location: San Carlos, California- Collateral: (3) separate retail properties in Downtown area- Purpose of Loan: Complete 1031 Exchange (time sensitive)- Exit Strategy: Bank loan

All of these loans were priced at 7.90% interest only. No prepayment penalty. Non-recourse.

Author: Alexa Mizrahi

Recent Financings$4,000,000 Refi, Stabilized – Antioch Retail CenterTerm: 25 year loan due in 10 years Property’s grocery tenant had a lease expiring within 12 months. Due to strong sponsor, Luther Burbank offered non-recourse financing.

$4,700,000 Refi, Recently Stabilized and Improved Multifamily Rental in HealdsburgTerm: 30 years fixed for 5 yearsRecently completed value add project required current rent roll for income qualification. Strong sponsorship and strong market allowed this project to be approved.

$3,900,000 Value Add Refi for Mixed-Use Project in San FranciscoTerm: 30 years fixed for 5 yearsThis loan has an initial advance of $2,500,000 with a final disbursement once performance is achieved.

Author: Jim Wiegandt

12:35 PM – Concurrent Session – BFrom High Tech to High

Value: Innovations in Multifamily Management

Author: Chris Moreno, Luxer One

TRAVEL/HOSPITALITY

DELIVERY/LOGISTICS

FOOD/BEVERAGE

HOME AMENITIES HEALTH/BEAUTY

The ‘Uber’ service economy: On-Demand Mobile Services

DINING/DRINKSTRANSPORTATION

Author: Chris Moreno, Luxer One

Author: Chris Moreno, Luxer One

1 property948 units

3,308 deliveries in October 2016275 hours saved for staff

Cellular Communication for

UL Listed Digital Fire Alarm Control Panels

Cost For Each Cellular Receiver$550 X 9 fire panels =$4,950 Additional monthly monitoring cost =$13 (Cellular fee per line)

$117 a month (total for all receivers)Replace POD’s Lines

Eliminates 18 “POD’s” lines @ $50 (includes tax) each line = $900 a month Each fire panel has two POD’s lines

10 year estimated savings -$98KPays for its self in 6 months

Author: Karen Bowman

RE Tech For The Rest of Us

Author: Heath Silverman

Management

Leasing

Rehab and Maintenanc

e

Acquisition

Back OfficeProductivity

Accounting

Tech-Forward Managers Software

Market Comps Listing Syndication

On-Demand

Crowdfunding

Contractor Search

Discovery

Individual InvestorsPartnershipLLCREIT & CorpsOther Source: NMHC tabulations

of 2012 Rental Housing Finance SurveyU.S. Bureau of the Census

Majority of Rental Property Owners are Small-Scale Investors

71%

US Apartment Ownership

On-Demand Service is the Winning TrendLarge complexes attempt to attract renters with costly amenities while the real value lies in on-demand resident services:1. Traditional managers spend 45% of revenue on labor.

Powerful automation w/ new tech dramatically reduces labor costs.

2. Self-service showings w/smart-locks reduces vacancy and leasing agent costs by 50% or more.

3. 3D Imaging and Telepresence robots enable remote showings—especially useful for growing international market.

4. 24/7 resident concierge at 10x lower cost with offshore team.

Author: Greg Toschi, Onerent

Amenities not as cool as we thought? 2,000 current Onerent residents say amenities were the least impactful reason for renting

their current home.