In this short presentation, we outline the current and future state of the San Diego multifamily real estate market. This presentation discusses some of the demand drivers, supply constraints, current & future demographics, current construction patterns, and asset and capital markets for San Diego.

1. San Diego
Multifamily
By Shah Ahsan, Cole Martinez & Daniel J. Cleaver

2. Outline
Defining Multifamily
Multifamily Demand Drivers
Multifamily Supply Constraints
San Diego Space & Development Market Analysis & Forecast
San Diego Asset & Capital Market Analysis & Forecasts
Conclusion
Biography
References

3. Defining
Multifamily
• A structure typically containing five or more
independent residential dwelling units.
• May also include common areas, and shared facilities
such as entrances, lobby, elevators, stairs, mechanical
space, grounds, recreation facility and/or parking.

4. Multifamily
Demand
Drivers
• Population Growth
• Jobs, Jobs, Jobs
• Income Growth
• Household Formation
• Median House Price

5. Multifamily
Supply
Constraints
• Scarcity of available land
 Terrain
 Bodies of water
 Political boundaries
• Entitlement Processes
• Environmental Regulation
• NIMBY-ism
• Availability of labor and
materials

6. Local Factors
Affecting Supply
& Demand
• Short Term Rental Legislation
• VMT Standards for New
Housing Developments
• Complete Communities
Initiative

7. San Diego Space
Market Analysis and
Projections
• Population
• Household Formation
• Median Income Growth
• Employment
• Gross Delivered Units
• Planned & Under Construction Developments
• Absorption & Effective Rent
• Vacancy

8. -0.30%
0.00%
0.30%
0.60%
0.90%
1.20%
1.50%
2.50
2.60
2.70
2.80
2.90
3.00
3.10
3.20
3.30
3.40
San Diego MSA - Annual Population Growth (CoStar)
Population (millions) Year Over Year Change (%)
Exhibit 1

9. 0.02%
0.03%
0.04%
0.05%
0.06%
0.07%
0.08%
3,296,000
3,298,000
3,300,000
3,302,000
3,304,000
3,306,000
3,308,000
2022 Q1 2023 Q2 2023 Q1 2024 Q2 2024 Q1 2025 Q2
San Diego MSA – Population Growth Projection
Population Year Over Year Change
Exhibit 2

10. -0.20%
0.10%
0.40%
0.70%
1.00%
1.30%
1.60%
1.90%
850,000
900,000
950,000
1,000,000
1,050,000
1,100,000
1,150,000
San Diego County - Household Formation (CoStar)
Number of Households Year Over Year Change (%)
Exhibit 3

11. -0.20%
-0.10%
0.00%
0.10%
0.20%
0.30%
0.40%
1,116,000
1,118,000
1,120,000
1,122,000
1,124,000
1,126,000
1,128,000
1,130,000
2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Q1
San Diego County - Household Projections
Number of Households Year Over Year Change
Exhibit 4

12. $59,220
$60,467
$62,611
$66,743
$67,964
$72,188
$76,902
$80,423
$84,560 $83,819
$87,994
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2021 Q3
(YTD)
San Diego County - Median Household Income
(Costar)
Median Household Income Year Over Year Change (Median Household Income)
Exhibit 5

13. $83,819
$86,903
$89,719
$92,213
$93,550
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
$83,000
$85,000
$87,000
$89,000
$91,000
$93,000
$95,000
2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Q1
San Diego - Median Household Income Projections
Median Household Income Year Over Year Change
Exhibit 6

14. Professional and Business Services
19%
Mining, Logging, and Construciton
6%
Financial Activities
5%
Information
1%
Manufacturing
8%
Other Services
3%
Education & Health Services
15%
Trade, Transportation, and Utilities
15%
Government
17%
Leisure and Hospitality
11%
Employment Sector as % of Economy (BLS)
Exhibit 7

15. Management occupations
11% Business and financial operations occupations
6%
Computer & mathematical occupations
4%
Architecture and engineering
occupations
3%
Life, physical, and social
science occupations
2%
Community and social service
occupations
2%
Legal occupations
1%
Educational instruction, and
library occupations
6%
Arts, design, entertainment, sports, and media
occupations
3%
Health diagnosing and treating practitioners and
other technical occupations
4%
Health technologists and technicians
2%
Firefighting and prevention, and other protective
service workers including supervisors
1%
Law enforcement workers
including supervisors
1%
Healthcare support occupations
3%
Food preparation and serving related occupations
6%
Building and grounds cleaning
and maintenance occupations
4%
Personal care and service occupations
3%
Sales and Related Occupations
10%
Office and Administrative Support Occupation
9%
Farming, fishing, and forestry
occupations
0%
Construction and extraction occupations
5%
Installation, maintenance, and repair
occupations
2%
Productions Occupations
4%
Transportation Occupations
3% Material Moving
Occupations
3%
San Diego County - Employment Subsector Classification (2019) (BLS)
Exhibit 8

16. 2
4
6
8
10
12
14
16
2011-01-01
2011-05-01
2011-09-01
2012-01-01
2012-05-01
2012-09-01
2013-01-01
2013-05-01
2013-09-01
2014-01-01
2014-05-01
2014-09-01
2015-01-01
2015-05-01
2015-09-01
2016-01-01
2016-05-01
2016-09-01
2017-01-01
2017-05-01
2017-09-01
2018-01-01
2018-05-01
2018-09-01
2019-01-01
2019-05-01
2019-09-01
2020-01-01
2020-05-01
2020-09-01
2021-01-01
2021-05-01
2021-09-01
San Diego County vs US Unemployment Rate
(FRED)
US Unemployment Rate (%) San Diego County Unemployment Rate (%)
30000
60000
90000
120000
150000
180000
210000
240000
San Diego County - Number of Unemployed
(FRED)
Exhibit 9
Exhibit 10

17. 1200
1250
1300
1350
1400
1450
1500
1550
2010-12-01
2011-03-01
2011-06-01
2011-09-01
2011-12-01
2012-03-01
2012-06-01
2012-09-01
2012-12-01
2013-03-01
2013-06-01
2013-09-01
2013-12-01
2014-03-01
2014-06-01
2014-09-01
2014-12-01
2015-03-01
2015-06-01
2015-09-01
2015-12-01
2016-03-01
2016-06-01
2016-09-01
2016-12-01
2017-03-01
2017-06-01
2017-09-01
2017-12-01
2018-03-01
2018-06-01
2018-09-01
2018-12-01
2019-03-01
2019-06-01
2019-09-01
2019-12-01
2020-03-01
2020-06-01
2020-09-01
2020-12-01
2021-03-01
2021-06-01
2021-09-01
SAN DIEGO COUNTY - NUMBER OF EMPLOYED (NON-
FARM, SEASONALLY ADJUSTED) (FRED)
Number of Employees (Thousands)
Exhibit 11

18. -12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
1250.0
1300.0
1350.0
1400.0
1450.0
1500.0
1550.0
1600.0
2021-01-01 2022-01-01 2023-01-01 2024-01-01 2025-01-01
San Diego County - Number of Employees (Projections)
Number of Employed (Thousands) Year Over Year Change (%)
Exhibit 12

19. $385,000
$457,000 $465,000
$502,000
$525,000
$570,000
$587,000
$603,000
$683,000
$814,000
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2021 Q3
(YTD)
San Diego County - Zillow Home Value Index (Zillow)
Zillow Home Value Index Year Over Year Change (Zillow Home Value Index)
Exhibit 13

20. 12%
14%
16%
18%
20%
22%
24%
26%
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
$1,600,000
2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Q1
San Diego County - Median Home Value Projections
Median Home Value Year Over Year Change (%)
Exhibit 14

21. 0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q3
Gross
Delivered
Units
San Diego - Annual Gross Delivered Units (Costar)
Exhibit 15

22. 2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q3
Vacancy Rates (Costar)
Exhibit 16

23. 1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2000
2500
3000
3500
4000
4500
5000
5500
2022 2023 2024 2025
San Diego County - Annual Gross Delivered
Units & Vacancy Rate Projections
Expected New Delivered Units Vacancy Rates
Exhibit 17

24. $1,200
$1,400
$1,600
$1,800
$2,000
$2,200
0
500
1000
1500
2000
2500
2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q3
Units
Absorbed San Diego - Multifamily - Absorption & Market Effective
Rent/Unit (Costar)
Absorption Market Effective Rent/Unit
Exhibit 18

25. $1,947.31
$2,150.02
$2,359.44
$2,647.52
$2,897.19
2%
4%
6%
8%
10%
12%
14%
$1,500
$1,700
$1,900
$2,100
$2,300
$2,500
$2,700
$2,900
$3,100
2021 2022 2023 2024 2025
San Diego MSA - Effective Rent Projections
Effective Rent Year Over Year Change
Exhibit 19

26. Exhibit 20

27. Exhibit 21

28. 68%
30%
2%
San Diego - Multifamily - Gross Delivered Units (2000-2021)(Costar)
Gross Delivered Units (Class A) Gross Delivered Units (Class B) Gross Delivered Units (Class C)
Exhibit 22

29. Asset & Capital
Markets
• Total Annual CRE Sales
• Annual Multifamily Sales Volume & Multifamily
Cap Rate
• San Diego Historical Market Cap Rates (All Asset
Classes)
• San Diego Multifamily Cap Rates (Class A, B, C)
• San Diego Multifamily Cap Rates vs. 10 Year
Treasury
• Multifamily – Price/Unit
• Multifamily Price/Unit – Class A, B, C

30. $0.0B
$2.0B
$4.0B
$6.0B
$8.0B
$10.0B
$12.0B
$14.0B
15%
20%
25%
30%
35%
40%
45%
$1.2B $2.0B $818M $478M $801M $1.1B $1.1B $1.3B $1.6B $2.2B $2.6B $3.0B $2.0B $2.4B $2.3B $5.0B
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD
San Diego - Annual Total CRE Sales Volume and
Multifamily (%) (Costar)
Total Sales Volume Multifamily (%)
Exhibit 23

31. 4.0%
4.5%
5.0%
5.5%
6.0%
$0.0B
$0.5B
$1.0B
$1.5B
$2.0B
$2.5B
$3.0B
$3.5B
$4.0B
$4.5B
$5.0B
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD
San Diego - Annual Multifamily Sales Volume & Market Cap
Rate (Costar)
Multifamily Sales Volume Market Cap Rate
Exhibit 24

32. 2020 2021 2022 2023 2024 2025
39.17% 42.64% 43.21% 41.34% 44.84% 45.11%
20.41%
22.06% 19.34% 23.77% 19.53% 15.36%
11.05%
11.52% 12.02% 10.35% 9.34%
10.19%
29.37%
23.78% 25.43% 24.54% 26.29% 29.34%
SAN DIEGO TOTAL CRE SALES VOLUME
PROJECTIONS - MULTIFAMILY (%)
Multifamily Office Retail Industrial
Exhibit 25

33. 5.1%
5.2%
5.9%
6.0%
5.4%
5.2% 5.2% 5.2%
5.0%
4.8% 4.7% 4.6%
4.5%
4.3%
4.2% 4.1%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD
Market
Cap
Rate
YeAR
San Diego Historical Market Cap Rates (Costar)
Office Market Cap Rate Multifamily Market Cap Rate
Retail Market Cap Rate Industrial Market Cap Rate
Exhibit 26

34. 4.50%
5.80%
6.30%
3.50%
4.10%
4.30%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
Class A Class B Class C
SAN DIEGO MULTIFAMILY CAP RATES (COSTAR)
Cap Rates (Q2 2012) Cap Rates (Q2 2021)
Exhibit 27

35. 3.00%
3.20%
3.40%
3.60%
3.80%
4.00%
4.20%
4.40%
2021 2022 2023 2024 2025
SAN DIEGO MULTIFAMILY - CAP RATES
FORECAST
Class A Cap Rates Class B Cap Rates Class C Cap Rates
Exhibit 28

36. 1.45%
4.1%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
SAN DIEGO MULTIFAMILY CAP RATE VS. 10
YEAR TREASURY YIELD (COSTAR &
MACROTRENDS)
10-Year Treasury Rate (Average) SD Multifamily Cap Rates
Exhibit 29

37. 1.36%
1.68%
2.03%
2.15%
2.41%
4.10% 4.05% 4.00%
3.79%
3.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2021 2022 2023 2024 2025
San Diego Multifamily Cap Rates vs. 10 Year Treasury
Forecast
10 Year US Treasury San Diego Multifamily Cap Rates
Exhibit 30

38. 0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(YTD)
San Diego County - Multifamily Price Per Unit (CoStar)
Price Per Unit U.S. Inflation Price Per Unit YOY (Change)
Exhibit 31

39. 2%
3%
4%
5%
6%
7%
8%
9%
10%
100000
150000
200000
250000
300000
350000
400000
450000
500000
550000
600000
2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2021 Q3
Price
Per
Unit San Diego Multifamily Price Per Unit - Class A, Class B & Class C
(CoStar)
Class A - (Market Sale Price Per Unit) Class B - (Market Sale Price Per Unit)
Class C - (Market Sale Price Per Unit) Class A - YOY Change (%)
Class B - YOY Change (%) Class C - YOY Change (%)
Exhibit 32

40. 6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
2021 2022 2023 2024 2025
SAN DIEGO MULTIFAMILY - PRICE PER UNIT
FORECAST
Price Per Unit YOY Change
Exhibit 33

41. Conclusion
• Multifamily will remain highly sought after
 Fundamental demand drivers slowing down.
 Constraints will continue
 Cheap money; uncertainty in office and retail.
• San Diego economy is strong.
 Macroeconomic factors will slow down recovery.
• Cap rates will continue down.
 Even if interest rates go up.
 Spread will slim.
 Historic highs coming ahead.

42. Biography
Daniel J. Cleaver
Danny graduated from the University of Idaho in 2017 with a bachelor’s degree in finance and
marketing. For the last three years, he has worked for CBRE Affordable Housing as a transaction
management specialist in Seattle, WA. Danny recently moved to San Diego, CA to attend the
University of San Diego's Master's in Real Estate (MSRE) program and pivot toward a career in
acquisitions development.
Cole Martinez
Cole is currently pursuing a JD/MSRE dual degree at the University of San Diego and completed
his first year of law school in 2021. Cole obtained his bachelors at the University of California,
Los Angeles, where he competed as goalkeeper on the Division I Men's soccer team. Following
completion of the dual degree program, Cole plans to become a transactional real estate attorney.
Shah Ahsan
Shah earned a bachelor's degree with distinction at Ryerson University in 2016, where he was on
the Dean’s Honors list three times and was actively involved in several on-campus student
organizations. He has worked in the technology and legal sector for four years. During that time,
Shah learned about real estate through investing in publicly-traded REITs in the manufacturing,
housing and industrial sectors. He also interned for High-Rise Capital; a private real estate
investment firm based in Orange County. Shah's experience at the firm ultimately led him to his
strong interest to pursue a career in commercial real estate. He is interested in pursuing a career in
private equity upon graduation and expanding upon his knowledge in real estate finance, capital
markets and asset management.

43. References
1. Exhibit 1. – San Diego MSA - Annual Population Growth – CoStar Raw Data
2. Exhibit 2 – San Diego MSA – Population Growth Projection
3. Exhibit 3 – San Diego County – Household Formation – CoStar Raw Data
4. Exhibit 4 – San Diego County – Household Projections
5. Exhibit 5 – San Diego County – Median Household Income – CoStar Raw Data
6. Exhibit 6 – San Diego - Median Household Income Projections
7. Exhibit 7 – Employment Sector as % of Economy – Bureau of Labor Statistics Raw Data
8. Exhibit 8 – San Diego County - Employment Subsector Classification (2019) – Bureau of Labor Statistics Raw Data
9. Exhibit 9 – San Diego County vs US Unemployment Rate – Federal Reserve Economic Data Raw Data
10. Exhibit 10 – San Diego County Number of Unemployed – Federal Reserve Economic Data Raw Data
11. Exhibit 11 – San Diego County – Number of Employed (Non-Farm, Seasonally Adjusted) – Federal Reserve Economic
Data Raw Data
12. Exhibit 12 – San Diego County - Number of Employees (Projections)
13. Exhibit 13 – San Diego County - Zillow Home Value Index – Zillow. https://www.zillow.com/san-diego-ca/home-values/

44. References
14. Exhibit 14 – San Diego County - Median Home Value Projections
15. Exhibit 15 – San Diego - Annual Gross Delivered Units – CoStar Raw Data
16. Exhibit 16 – Vacancy Rates – CoStar Raw Data
17. Exhibit 17 – San Diego County - Annual Gross Delivered Units & Vacancy Rate Projections
18. Exhibit 18 – San Diego - Multifamily - Absorption & Market Effective Rent/Unit – CoStar Raw Data
19. Exhibit 19 – San Diego MSA - Effective Rent Projections
20. Exhibit 20 – San Diego - Multifamily (Under Construction) – Berkadia – https://base.berkadia.com/wp-
content/uploads/2021/11/Berkadia-3Q21-San-Diego-Construction-Pipeline-Report.pdf
21. Exhibit 21 – San Diego County – Planned New Development –Berkadia – https://base.berkadia.com/wp-
content/uploads/2021/11/Berkadia-3Q21-San-Diego-Construction-Pipeline-Report.pdf
22. Exhibit 22 – San Diego - Multifamily - Gross Delivered Units (2000-2021) – Costar Raw Data
23. Exhibit 23 – San Diego - Annual Total CRE Sales Volume and Multifamily (%) – Costar Raw Data
24. Exhibit 24 –San Diego - Annual Multifamily Sales Volume & Market Cap Rate – Costar Raw Data

45. References
25. Exhibit 25 – San Diego Total CRE Sales Volume PROJECTIONS - Multifamily
(%)
26. Exhibit 26 – San Diego Historical Market Cap Rates – Costar Raw Data
27. Exhibit 27 – San Diego Multifamily Cap Rates – Costar Raw Data
28. Exhibit 28 – San Diego Multifamily Cap Rates Forecast
29. Exhibit 29 – San Diego Multifamily Cap Rate vs. 10 Year Treasury Yield–
Costar Raw Data & Macrotrends. https://www.macrotrends.net/2016/10-year-
treasury-bond-rate-yield-chart
30. Exhibit 30 – San Diego Multifamily Cap Rates vs. 10 Year Treasury Forecast
31. Exhibit 31 – San Diego County - Multifamily Price Per Unit – Costar Raw Data
32. Exhibit 32 – San Diego Multifamily Price Per Unit - Class A, Class B & Class C
– Costar Raw Data
33. Exhibit 33 – San Diego Multifamily - Price Per Unit Forecast