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<br />TWIN LAKES, Roseville, Minnesota <br />Market Assessment & Demand Analysis <br /> <br />Executive Summary <br /> <br />BACKGROUND <br /> <br />Rottlund Homes has been selected as the master developer for a redevelopment project in Roseville <br />known as Twin Lakes. Along with partner developers Roseville Properties, Welsh Companies, and <br />Ryan Companies, the development team has proposed a project (Phase I) incorporating the <br />following uses: <br /> <br />1. For-sale townhomes and condos (490 units) <br />2. Senior condominiums (240 units) <br />3. Retail/restaurant (317,000 sf) <br />4. Office (221,000 sf) <br /> <br />We understand that the project team is projecting a three to five-year build out for Phase 1. <br /> <br />Rottlund Homes retained GV A Marquette Advisors to provide an assessment of whether there is <br />sufficient market support for each of the development components as proposed. The conclusions <br />from our study are summarized below. The reader is encouraged to review the individual market <br />assessments for detailed information regarding the current and projected market environment and <br />overall market demand. <br /> <br />RESIDENTIAL CONDOS AND TOWNHOMES (NON-SENIOR) <br /> <br />( <br /> <br />. In total, we project gross demand for 3,675 for-sale housing units over five years (735 <br />units per year) in a competitive market area surrounding Twin Lakes which includes <br />the cities of Roseville, St. Anthony, Lauderdale, Falcon Heights, New Brighton, <br />Arden Hills and Shoreview. This means that the proposed 490 units at Twin Lakes <br />will have to capture just 13.3 % of demand over this period. <br /> <br />. With only 75 units currently under construction and another 245 units expected to <br />come online during the coming 2-year period, we conclude that there is sufficient <br />demand in the market to accommodate the proposed units at Twin Lakes within the <br />developer's projected absorption period (5 years). In fact, based on the projected <br />market environment, Twin Lakes has the potential to achieve a more rapid absorption <br />rate in the coming two years. The market could prove more competitive in <br />subsequent years if redevelopment plans in New Brighton (NW Quadrant) and Arden <br />Hills (TCAAP site) come to fruition. Nonetheless, the Twin Lakes project is well <br />located and will have achieved sufficient market acceptance by that timeframe so as <br />to compete favorably against those projects for potential buyers at that time. <br /> <br />. Based on the projected demographic characteristics of the subject market area and the <br />region as a whole, and given the development concept as proposed (both in terms of <br />product type and price), we expect that Twin Lakes will be particularly attractive to ( <br />the following household groups: <br /> <br />GV A Marquette Advisors <br /> <br />Page 2 <br />