THE LOCAL VIEW

HOW OTHERS SEE US

SoNV HAS AVERAGE DEVELOPMENT & REDEVELOPMENT OPPORTUNITIES2015 Metro Perspective: Top 10 Metros for Development/Redevelopment: Opportunities + Las Vegas MSA (of 60 Largest Metros)

Source: Emerging Trends in Real Estate 2015 ULI-PwC Survey.

1Houston 4.62 Weak

2Dallas/Fort Worth 4.24 Declining

3San Jose 4.20 Average

4Seattle 4.19 Improving

5New Orleans 4.17 Strong

6New York—Brooklyn 4.15

7Denver 4.14

8San Francisco 4.09

9Nashville 4.06

10Minneapolis/St. Paul 4.05

57Las Vegas 3.1758Milwaukee 3.1759Spokane 3.17

60Birmingham 3.17

Based on survey of 1,400 industry leaders.

SoNV LAGS IN PROJECTED ECONOMIC STRENGTHAMONG WESTERN METROS2015 Strength of Economy Scores (Out of 5): Local Outlook: West Region

Source: Emerging Trends in Real Estate 2015 ULI-PwC Survey.

1 2 3 4 5Weak Declining Average Improving Strong

Based on survey of 1,400 industry leaders.

THE REALITY: SOUTHERN NEVADA ECONOMY

NEVADA JOB RECOVERY FROM GREAT RECESSION AFTER 91 MONTHSNevada Recession Recoveries: 1948-Present

Source: Bureau of Labor Statistics

012345678910

11

12

13

14

15

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90

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Comparison of Recession Job Growth Recoveries% Job Losses Relative to Peak Employment Month1948 1953 1957 1960 1969 1974 1980

1981 1990 2001 2007 US 2007

Number of Months After Peak Employment

RECOVERY = SOMEWHAT MIXED…

Rank Among 60 Largest US Metros: 2000-2013

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, *RGMP 2001-2013.

Population Change (#) #10

Population Growth (%) #3

Employment Change (#) #10

Employment Growth (%) #5

Real GMP* Change (#) #33

Real GMP* Growth (%) #25

LAS VEGAS REAL GMP GROWTH IMPROVING COMING OUT OF GREAT RECESSIONLas Vegas Real GMP Forecast: 2014-2015

Source: Bureau of Economic Analysis, RCG Economics

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201565,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

-15%

-10%

-5%

0%

5%

10%

15%

Real Gross Metro Product % Change

Mill

ions

of C

hain

ed 2

009

Dolla

rs

TAXABLE SALES NEARING ALL-TIME HG, CONTINUES TO FUEL LAS VEGAS ECONOMYClark County Taxable Retail Sales: Nov-04 to Nov-14

Source: Nevada Department of Taxation

$1,500,000,000.0

$2,000,000,000.0

$2,500,000,000.0

$3,000,000,000.0

$3,500,000,000.0

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

CC Taxable SalesYOY Chg.

Bill

ions

Nov-14: $3.01B

Nov-14: 8.1%

THE REALITY: SOUTHERN NEVADA POPULATION AND JOBS

LAS VEGAS SKILLED WORKER POOL HAS BOOMED SINCE 2000Las Vegas MSA High-Skill Population Growth (% Change): 2000-2013

Source: Census Bureau

MSABach. Degree+

Pop. Growth RankTotal Pop.

Growth RankCharlotte, NC 102% 1 35% 5Grand Rapids, MI 93% 2 9% 33Las Vegas 91% 3 45% 3Austin, TX 80% 4 49% 2Raleigh, NC 79% 5 51% 1Riverside, CA 74% 6 34% 8Nashville, TN 72% 7 27% 12Orlando, FL 66% 8 37% 4San Antonio 66% 9 32% 9Phoenix 63% 10 34% 6

JOB GROWTH HURT IN ‘01 RECESSION BUT CRIPPLED BY GREAT RECESSIONLas Vegas MSA Employment vs U.S. Employment (% Change): Dec. 1995 – Dec. 2014

Source: Bureau of Labor Statistics

Dec-95

Dec-96

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Las Vegas USA

GREAT RECESSION SEVERELY REDUCED POPULATION GROWTH, NOW RECOVERINGClark County Population vs U.S. Population (% Change): 1981-2013

Source: World Bank, Clark County Comprehensive Planning

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

2013-4%

-2%

0%

2%

4%

6%

8%

10%

Las Vegas Years Las Vegas Lost Jobs USA

NEVADA JOBS BOUNCED BACK BIG IN 2013

Nevada Employment vs Rest of U.S. (% Change): 2013

Source: Bureau of Labor Statistics

Fastest Growing States

1-YR Growth Rate

Slowest Growing States

1-YR Growth Rate

North Dakota 3.7% Rhode Island 0.7%Nevada 3.4% Arkansas 0.6%Florida 2.8% DC 0.6%Oregon 2.8% Pennsylvania 0.5%Utah 2.8% New Jersey 0.5%Texas 2.7% South Dakota 0.4%Colorado 2.7% Vermont 0.3%California 2.6% Virginia 0.3%South Carolina 2.5% West Virginia 0.1%Delaware 2.4% New Mexico -0.2%

“HEADLINE” UNEMPLOYMENT RATE IMPROVING BUT U-6 RATE STILL TOO HGNevada U-3 & U-6 Unemployment Rates: Q4-2009 to Q4 2014

Note: Quarterly figures are rolling averages of the 4 quarters ending in the noted quarter. Source: Bureau of Labor Statistics.

2009q4

2010q1

2010q2

2010q3

2010q4

2011q1

2011q2

2011q3

2011q4

2012q1

2012q2

2012q3

2012q4

2013q1

2013q2

2013q3

2013q4

2014q1

2014q2

2014q3

2014q40.0

5.0

10.0

15.0

20.0

25.0

11.3

12.413.5

13.814.4

14.2

13.6

13.5

13.112.7

12.311.9

11.010.8

10.49.7

9.89.4

8.88.3

7.7

19.2

20.421.5

22.3 23.6

23.7

23.3

23.3

22.722.3

22.121.4

20.319.6

19.018.1

18.117.4

16.215.9 15.3

U3 U6

Perc

ent

(%)

WAGES, AFTER ADJUSTING FOR INFLATION, REMAIN STAGNANTLas Vegas MSA Average Weekly Earnings: Dec. 2008 to Dec. 2014

Source: Bureau of Labor Statistics.

$550

$600

$650

$700

$750

Dec-14 Nominal: $700

Nominal Avg. Weekly Earnings

Inflation-Adjusted (2007$) Avg. Weekly Earnings Dec-14 Real: $622

THE REALITY: SOUTHERN NEVADA GAMING & TOURISM

RevPAR RECOVERING SLOWLY FROM RECESSION BUT BACK UP OVER $100Las Vegas Valley Hotel Revenue per Available Room: Dec. 2004 to Dec. 2014

Source: Las Vegas Convention and Visitors Authority

Dec-04

Apr-05

Aug-05

Dec-05

Apr-06

Aug-06

Dec-06

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Feb-10

Jun-10

Oct-10

Feb-11

Jun-11

Oct-11

Feb-12

Jul-1

2

Nov-12

Mar-1

3Ju

l-13

Nov-13

Mar-1

4Ju

l-14

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

Nov-14: $100.80

VISITOR VOLUME AT HIGHEST LEVELS EVER & CONTINUES TO RISELas Vegas Valley Visitor Volume: Dec. 2004 to Dec. 2014

Source: Las Vegas Convention and Visitors Authority

2,900,000.0

3,000,000.0

3,100,000.0

3,200,000.0

3,300,000.0

3,400,000.0

3,500,000.0

Dec-14: 3.43M

GAMING REVENUE INCREASING DUE TO BACCARAT; NET BACCARAT STAGNANTClark County Gaming Revenue: Dec. 2004 to Dec. 2014

Source: Nevada Gaming Control Board

$600,000,000

$650,000,000

$700,000,000

$750,000,000

$800,000,000

$850,000,000

$900,000,000

$950,000,000Total Gaming RevenueNet Baccarat

Dec-14 With Bacc.: 796.2

Dec-14 net Bacc.: 671.9M

HENDERSON: 2015 & BEYOND

HENDERSON MAINTAINS A GOOD REPUTATION FOR LIVABILITYHenderson & Las Vegas MSA Info: 2014

Sources: Census Bureau, Federal Bureau of Investigation, Bureau of Labor Statistics, Clark County Comprehensive Planning

6.0%6.2%6.4%6.6%6.8%7.0%

6.4%

6.9%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

13% of LV MSA

0

400,000

800,000

1,200,000

15% of LV MSA

270,811

2,062,253

142,893

984,228

Fun Facts:

- 5th Safest City in US in 2012 (Most recent FBI crime data)

- Home to not one but two NSHE schools: College of So. Nevada-Henderson Campus & Nevada State College

HENDERSON RESIDENTS OLDER, WEALTHIER THAN THOSE IN LAS VEGAS MSAHenderson Demographic Facts: 2014

Source: Nielsen Claritas

Relative to Las Vegas MSA, Henderson residents/workers are more likely…

• To be 55 years old and older, less likely to be under 35• To be Caucasian, less likely to be a minority• To have a higher education degree

• To have a higher income• To be self-employed or government workers• To live nearby workplace• To own multiple vehicles

• To own their homes• To live in Single Family Homes & Townhouses• To have smaller homes

HENDERSON RESIDENTS HAVE HIGHER INCOMES THAN LV METRO AVERAGEHenderson & Las Vegas MSA Effective Buying Income: 2014

Median EBI Average EBI$30,000

$40,000

$50,000

$60,000

$70,000

$48,560

$63,796

$41,576

$53,528

Henderson

Las Vegas MSA

Source: Nielsen Claritas

HENDERSON DOMINATED BY OFFICE & SERVICE INDUSTRIESHenderson 5 Largest Employment Sectors: 2014

Source: EMSI

Transportation and Material Moving Occupations

Personal Care and Service Occupations

Food Preparation and Serving Related Occupations

Sales and Related Occupations

Office and Administrative Support Occupations

5,068

6,641

11,574

12,480

14,851

HENDERSON SPECIALIZES IN SEVERAL SECTORS Henderson Employment Sectors, as % of Las Vegas MSA: 2014

Source: EMSI

Sales and Related Occupations

Production Occupations

Healthcare Support Occupations

Computer and Mathematical Occupations

Arts, Design, Entertainment, Sports, and Media Occupations

11% 12% 13% 14%

11.7%

12.1%

12.7%

12.8%

12.9%

NEVADA GOED TARGETING 9 INDUSTRIES FOR STATE ECONOMIC DEVELOPMENTNevada’s Nine Target Industries

1. Aerospace and Defense

2. Agriculture

3. Business IT Ecosystems

4. Clean Energy

5. Health and Medical Services

6. Logistics and Operations

7. Manufacturing

8. Mining

9. Tourism, Gaming, and Entertainment

HENDERSON STEM JOBS TODAY DOMINATED BY REGISTERED NURSESHenderson Top 10 STEM Occupations, by Jobs: 2014

Source: EMSI

Computer Programmers

Computer Occupations, All Other

Dental Hygienists

Dentists, General

Computer User Support Specialists

Pharmacists

Computer Systems Analysts

Software Developers, Applications

Pharmacy Technicians

Registered Nurses

0 200 400 600 800 1,000 1,200 1,400

182

183

183

191

211

218

227

241

264

1,177

RECENT HENDERSON STEM JOBS GROWTH STRONGHenderson 5 Fastest Growing Employment Sectors, by % Growth: 2014

Source: EMSI

Healthcare Practitioners and Technical Occupa-tions

Healthcare Support Occupations

Life, Physical, and Social Science Occupations

Education, Training, and Library Occupations

Computer and Mathematical Occupations

11.7%

13.4%

13.7%

15.5%

17.0%

GROWTH IN TARGETED SECTOR STEM JOBS TO OUTPACE GENERAL JOB GROWTH IN HENDERSONProjected STEM Growth in Henderson Major* Target Industries: 2014-2020

* Note: Industries with at least 200 workers. Source: EMSI

Business IT Ecosystems Health and Medical Services Manufacturing0

1,000

2,000

3,000

4,000

5,000

6,000

1,064

4,382

240

1,240

4,892

274

2014 STEM Jobs

2020 STEM Jobs

THE REALITY: HENDERSON REAL ESTATE MARKETS

INDUSTRIAL REAL ESTATE THRIVING IN HENDERSON; OFFICE, RETAIL LAG VALLEYCommercial Real Estate Vacancy Rates: Q3 2014

* Note: Industries with at least 200 workers. Source: EMSI

0%

5%

10%

15%

20%

25%

30%

Office Industrial Retail LV Office LV IndustrialLV Retail

RESURGENCE IN INDUSTRIAL SPACE LED BY WAREHOUSE/DISTRIBUTIONIndustrial Vacancy Rates, by Product: Q3 2014

Source: RCG Economics

All Prod. WH/Distrib. Light Distrib. Light Ind. Incub. R&D / Flex0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

LV ValleyHenderson

CLASS A VACANCIES STILL CHALLENGING HENDERSON OFFICE MARKET

Office Vacancy Rates, by Product: Q3 2014

Source: RCG Economics

All Prod. Class A Class B Class C Medical10%

15%

20%

25%

30%

35%

40%

45%

50%

LV ValleyHenderson

LOOKING FORWARD

Three Rules of Forecasting

If you give a number, don’t give a date.

If you give a date, don’t give a number.

If you get it right, don’t look surprised.

– Anonymous

YESTERDAY, TODAY & TOMORROW IN PICTURES

WHILE 2015 DEFINITELY WON’T BE ANOTHER 2004 . . .

IT WON’T BE ANOTHER 2008, EITHER . . .

IT WON’T EVEN BE ANOTHER 2009 – 2013 . . .

EVEN THOUGH STILL A BIT WOBBLY, THE RECOVERY WILL CONTINUE TO TAKE HOLD IN 2015

Fed Policy Corporate Profits Gas Prices Resort Industry

Health Recovering RE

market Healthy Job Growth Population Growth Economic

Development

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