The purpose of the following Vacancy Rates analysis is to establish a historic vacancy rate for markets similar to . The data below was taken from U.S. Census data for various types of multifamily housing. Of the 10 Census datasets that were compiled and reviewed, 3 were seen as being most similar to .

The highlighted columns represent the most similar / comparable datasets. Included are Metropolitan Areas (MAs), Midwest markets (MidW) , and apartment complexes with 5 or more units (5+). At the bottom of each of each column is the average vacancy rate for that dataset.

Below the table is the overall (the composite) average. This "Long-term Average Annual Vacancy Rate" (9.28%) is the number that is used as the vacancy rate beginning in year 5 of the financial projects.

The purpose of the following Historical Rent Rates analysis is to establish the rate at which rents typically change over time for markets similar to . The data below was taken from U.S. Census data for various types of multifamily housing. The data sets that were used represented nationwide rental rates (U.S.) and rates broken down by region of the country (i.e., NE, MidW, S, W). Because of the variation in rent rate changes due to many different factors in many different areas, the average of the U.S. was combined with that of the Midwest.

The first group of data below (on the left-hand side) is the source data from the Census Bureau, which represents the median rent rates for each dataset for each year. The second group of data (on the right) is the annual change in rent rates that has been calculated based on the source data.

Below the tables is the "Comparable Annual Change in Rent Rates", which is the average of the U.S. rate and the Midwest rate. This number (2.89%) is the rate that was used in the Financial Projections section to calculate the average annual increase in rent rates each year.

The following are comparable properties for rent, which are the properties in Park City that were listed on Apartments.com on November 5, 2022. They are listed in decending order (in terms of price). There were no apartments listed for rent within Park City.

The following is a summary of the rent rates for the comparable properties shown above. Below the table is the average rent rate for all of the properties in this dataset.

Below is chart that shows the range of cap rates (shown in green) for multifamily housing over the last 20 years. The data comes from the Freddie Mac 2022 Multifamily Midyear Outlook. Freddie Mac, also known as the Federal Home Loan Mortgage Corporation, is a government sponsored organization that buys mortgages, pools them, and sells them as mortgage-backed securities (MBS) to private investors.

According to the report, "the cap rate for the prior three months averaged 4.6%, which is down 40 bps from the prior year and down 10 bps since the beginning of the year". Cap rates typically have a 1% range across different markets. Given the placement of this project in a secondary market, the Freddie Mac rate was discounted by 1% (to 5.6%) before applied as the cap rate in this report. To keep the estimates in this report conservative, in long-term projects, the cap rate starts at 5.6% but rises to 8.25% over time, to reflect the range of cap rates seen over the last 20 years.

The table below shows the monthly and annual rates of inflation since 1987. 1987 was chosen as the base year for inflation calculations, because that was the year that Alan Greenspan took over as Chairman of the Federal Reserve and began implementing the sophisticated price control models that remain at the heart of the Fed's monetary policies. Those quantitative theory of money policies, which have been implemented through the interest rate and money supply controls of the Federal Open Market Committee, have been aimed at bringing more stability to price levels, inflation, and the business cycle. Therefore, inflation rates since this shift in Fed policy are seen as better predictors of future inflation rates than the rates occurring prior to this change.

The purpose of this Inflation Rate Analysis is to determine an average historical rate of change in interest rates. Once established, this rate is used to estimate the pace at which the operating expenses associated with this project will likely increase in the future. In order to calculate this rate, the average of the monthly inflation rates was first calculated, and then an average of the annual inflation rates was determined.