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TWIN LAKES, Roseville, Minnesota Market Assessment & Demand Analysis Executive Summar� BACKGROUND Rottlund Homes has been selected as the master developer for a redevelopment project in Roseville known as Twin Lakes. Along with partner developers Roseville Properties, Welsh Companies, and Ryan Companies, the development team has proposed a project (Phase I) incorporating the following uses: L For-sale townhomes and condos (490 u-nts) 2. Senior condominiums (240 units) 3. Retaillrestaurant (317,000 s� 4. Office (221,000 sfj We understand that the proj ect team is proj ecting a three to five-year build out for Phase I. Rottlund Homes retained GVA Marquette Advisors to provide an assessment of whether there is sufficient market support for each of the development components as proposed. The conclusions from our study are summarized below. The reader is encouraged to review the individual market assessments for detailed information regarding the current and projected market environment and overall market demand. RESIDENTIAL CONDOS AND TOWNHOMES (NON-SENIOR) • In total, we project gross demand for 3,675 for-sale housing units over five years (735 units per year) in a competitive market area surrounding Twin Lakes which includes the cities of Roseville, St. Anthony, Lauderdale, Falcon Heights, New Brighton, Arden Hills and Shoreview. This means that the proposed 490 units at Twin Lakes will have to capture just 133°/o of demand over this period. • With only 75 units currently under construction and another 245 units expected to come online during the coming 2-year period, we conclude that there is sufficient demand in the market to accommodate the proposed units at Twin Lakes within the developer's projected absorption period (5 years). In fact, based on the projected market environment, Twin Lakes has the potential to achieve a more rapid absorption rate in the coming two years. The market could prove more competitive in subsequent years if redevelopment plans in New Brighto�. (NW Quadrant) and Arden Hills (TCAAP site) come to fruition. Nonetheless, the Twin Lakes project is well located and will have achieved sufficient market acceptance by that timeframe so as to compete favorably against those projects for potential buyers at that time. � Based on the projected demographic characteristics of the subject market area and the region as a whole, and given the development concept as proposed (both in terms of product type and price), we expect that Twin Lakes will be particularly attractive to the following household groups: GVA Marquette Advisors Page 2