Regency Consolidated Residential, LLC

Bloomington,Evansville,Champaign,

Market Rate Multi-Family Housing Portfolio Assessment

Regency Consolidated Residential LLC engaged B&D in 2015 to contribute to a comprehensive evaluation of RCR’s portfolio of 14 multi-family assets located in Bloomington and Evansville, Indiana, and Champaign, Illinois. The objective of the evaluation—which involved multiple consultant teams—was to develop a long-term strategy for RCR’s presence within the three markets. Within the context of the broader evaluation, the focus of our effort was to identify and assess risk factors that would affect the current and future performance of RCR’s 14 multi-family properties. To complete this task, we adopted a multi-pronged approach that assessed risk factors present at both the property and community levels. This approach included:

• Market Analyses: We conducted a high-level review of the market forces shaping broader demand for multi-family rental housing in Bloomington, Evansville, and Champaign. Market forces evaluated included population demographics, local economic conditions, and local political and regulatory environments.

• Property Site Visits and Stakeholder Interviews: We toured each of RCR’s 14 multi-family assets. During these tours, we conducted interviews with property managers and focus groups with residents.

• Property Condition and Performance Assessments: We assessed the condition and performance of each of RCR’s multi-family assets. Conditions assessed included unit types and sizes, in-unit and community amenities, and proximity to schools, retail, recreation, transportation, and large employers. Performance was assessed based on historical occupancy and rent escalation.

• Resident Survey Implementation and Analysis: We developed and implemented a survey assessing demographic characteristics and satisfaction of residents at each of RCR’s 14 multi-family assets.

• Competitor Identification and Analyses: For each of RCR’s multi-family assets, we identified competing properties and assessed them for their unit mix, rental rates, amenities, and proximity to schools, retail, recreation, transportation, and large employers.

Leveraging the findings resulting from these efforts, our assessment not only identified the risk factors affecting the current and future performance of RCR’s properties, but also identified potential opportunities. This assessment provided RCR with the rationale to reinvest in some of its properties and to divest others.