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Mr. Fran: human May 14, 2010 <br />Dunbar Development Corporation page 4 <br />Aohem Woods in St. Anthony has a total of 201 units; one building is age -restricted for seniors. <br />Current rents are as follows: <br />Studio -$]85 per month for 590 sf <br />IDR—$890 m $1,010 per month 6f 912 to 930 sf <br />2BR-$1,155 to 51,235 per month for 1,034 [01,256 sf <br />While the economic downturn has increased the number of people renting their housing, those <br />who have lostjobs smaller homes are open turning to other options including doubling up with <br />friends and family. This created additional soMess in the rental market where it had been <br />expected that rentals would ineshse. <br />We expect that this softness will gradually disappear as the economy and the housing market <br />strengthen. Those that are financially stable and have been considering owning their housing <br />have moved in to the ownership mrrke4 taking advantage of significant values that exist at this <br />time. As prices gradually the. the number of households moving into the ownership market will <br />decrease and a Turnor of those households will move to rental, albeit upscale rentals. <br />Supply-oonstreined submarsats such as New Brighton, Roseville and SC Anthony have <br />responded well to new product. Average rents for new product have reached as high its $1.39 <br />par square fact for studio and one -bedroom units. Dn average, newer rental product in the area <br />is less than 51.20 per square foot on average and there is a significant gap between per square <br />foot rents for studio and one -bedroom units as compared m two-bedroom how. The average per <br />square Not rent for two-bedroom units is only about $1.10. <br />Table 3 presents our suggested unit mix, sire and rents for a market rate general occupancy <br />development not would be located on the subject property. Rents are shown in 2010 dollars and <br />could be vended upward by 1.00% to 2.0% annually to occupancy depending on current market <br />conditions up to the time ofoprning. <br />The average rent is suggested at $1.31 per square foot This project would compete with newer <br />rentals in the area and the more isolated location of the property may result In a lower per square <br />feet rent achievable as compared N other properties Nat have more convenient access and better <br />visibility. <br />Ifyou have additional questions or need more information, please contact me <br />