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The focus market area for PMRE will continue to be the Denver Metropolitan Statistical Area (“MSA”). We have chosen Denver based on the experience in this market of the management team, and research that shows a substantial opportunity for both rental demand of single family properties and appreciation potential for single family properties in this area. Opportunities include:

• Above market population growth in counties such as Arapahoe, Denver, Douglas, and Jefferson.

• A mismatch between available inventory of housing units in these areas and the units that will be demanded by the groups driving growth both in rental and sales

• Above market job formation and economic growth patterns

• Early entry into the current troubled market conditions, and an anticipated earlier exit from current market conditions due to pent up demand for lower priced housing.
In Denver, where the “housing bubble” was not as severe as in other regions such as the East and West coasts, weakness will be seen most in the neighborhoods outside the downtown area. Pricing should remain flat to slightly down as buyers and sellers start to come together to increase the transaction level.

In this type of market, opportunities to purchase homes at discounted prices will abound as sellers -especially banks- become more realistic about pricing to reduce inventory. Additionally, demand for rentals will increase as population growth continues and credit availability tightens, driving more middle class families into rental units. These two factors will allow us to purchase assets at reasonable prices and quickly rent them to families seeking new housing in higher job growth areas.