metro: austin - top producer® website · 2018-03-24 · metro austin continues to run out of...

Metro: Austin

Copyright 2018 Reis, Inc.


ContentsMetro Executive Briefing 3

Reis Observer 6

Metro Trend Futures 14

Current Metro Rent Details15

Nonanchor Rent Growth Comparisons15

Current Metro Rent Details15

Nonanchor Rent Growth Comparisons16

Current Metro Vacancy Details16

Vacancy Rate Comparisons17

Current Metro Vacancy Details17

Vacancy Rate Comparisons18

Nonanchor Rent Growth Comparisons and Forecast18

Vacancy Rate Comparisons and Forecast19

Metro Inventory Details20

Inventory Growth Comparisons20

Construction/Absorption Change21

Economic and Demographic Trends22

Metro Area Map23

Metro Data25

Metro Data26

Metro Data27

Submarket Overview 28

New Construction Listing 30

Construction Deliveries31

Metro Construction Breakdown31

Submarket New Construction Project Tally31

Metro Inventory Details31

Inventory Growth Rankings Forecast32

Construction/Absorption Change32

Occupancy at Completion32

Stabilization Data33

Metro Area Map33

New Construction Listing35

Sales Trend 44

Activity45

Map45

Most Recent Transactions45

Comparable Group Details46

Power Center Report 49

Current Rent Snapshot50


Contents (Continued)Current Vacancy Snapshot

50New Construction

50Metro Power Center and Regional Mall Projects

51Cap Rate Trending

51Recent Metro Area Regional Mall Sales

52Metro Area Power Center and Regional Malls

52Metro Area Power Center and Regional Malls

54Economic and Demographic Data

54Economic and Demographic Trends

54

Metro Executive Briefing

Metro Executive BriefingRetail - 4th Quarter 2017Prepared By Reis, Inc.

Powered By Reis Metro: AustinCustomerID:1016323

Copyright 2018 Reis, Inc. 1016323

Section 1 - Executive Briefing on Metro Conditions

Average Asking Rent $23.51

● Up 0.9% from Q3 2017.

● Has risen in every quarter since Q1 2013.

● Expected to finish 2018 at $24.06.

Average Vacancy Rate 5.5%

● Lowest in the Southwest region, fifth lowest in thenation.

● Drifted upward by 20 basis points.

● Expected to finish 2018 at 5.5%.

Market Overview

A comprehensive assessment of theAustin retail market suggests that themajor concentrations of competitiveretail space are located in the SouthAustin submarket, amounting to 7.7million square feet and 35.6% of themetropolitan inventory, followed byCentral/Downtown Austin, with a34.4% share, and RoundRock/Williamson County (30.0%).Since the beginning of Q1 2008, thefastest growing area has been theRound Rock/Williamson Countysubmarket, adding 1.0 million squarefeet over that period, or 59.2% of totalmetropolitan retail completions.

Asking and Effective Rent

Asking rents in the Texas state capitalrose by 0.9% during the fourth quarterof 2017 to an average of $23.51. Thisadvance extends the market's run of

gains to nineteen quarters, duringwhich asking rents have advanced bya total of 15.8%. Since the beginningof Q1 2008, the metro as a whole hasrecorded an annual average increaseof 1.7%. Effective rents, whichexclude the value of concessionsoffered to prospective tenants,advanced by 0.8% during the fourthquarter to an average of $21.40.During the past four quarters, positivemovement in asking rent wasrecorded in all three of the metro'ssubmarkets.

Competitive Inventory, Absorption

Over the last four quarters, marketabsorption totaled 23,000 square feet,a fraction of the average annualabsorption rate of 244,900 square feetrecorded since the beginning of Q12008. From an historical perspective,the fourth quarter vacancy rate is 1.8percentage points lower than the

7.3% average recorded since thebeginning of Q1 2008.

Outlook

During 2018 and 2019, constructionactivity under surveillance is expectedto deliver a total of 297,000 squarefeet. Total employment growth overthe same period is projected toaverage 2.0% annually, whilehousehold formations are anticipatedto average an increase of 2.9% peryear. Over the same period the metroabsorption rate is expected toaverage 136,000 square feet peryear. The market vacancy rate willfinish both years at 5.5%. On anannualized basis, asking and effectiverents are expected to climb at a rateof 2.3% through year end 2019,reaching average rates of $24.58 and$22.41 per square foot, respectively.


Reis Observer

Reis Observer AUSTIN

1

Published December 11, 2017 THE ECONOMY

Metro Austin continues to run out of housing and workers, limiting its employment growth based on the supply of workers, not the supply of jobs. According to Current Employment Statistics (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm payroll employment increased by 22,200 jobs (2.2%) from October 2016 to October 2017, down from a gain of 35,100 (3.6%) in the prior 12 months. The private sector increase was 19,200 (2.3%), down from an increase of 31,600 (3.9%). According to household-based data from the BLS, the labor force of metro Austin increased by 22,240 (2.0%) in the year to September, a healthy gain but only half the increase of 44,820 (4.2%) in the prior 12 months. Moody’s Economy.com reports the overall population increased 58,950 (2.8%) in the year to the third quarter of 2017, consistent with past large gains, with the number of households up 22,210 (2.8%). But household average income rose just 0.9% over a year, according to this source. Meanwhile, the National Association of Realtors reports that the median existing home sales price was $296,400 in the third quarter in metro Austin, up 4.4% from a year earlier and well above the U.S. average of $254,000, Dallas-Fort Worth at $249,000, Houston at $233,900, and San Antonio at $220,700. PricewaterhouseCoopers, however, doesn’t see the threat to growth that others do. “The annual Emerging Trends in Real Estate Report is out and Austin remains a hot spot for real estate investment—but another city has edged out the Texas capital in the No. 1 position,” the Austin Business Journal reported in October. “Austin’s secret sauce is that the workers are there,” particularly the young. “An added boost—there are more young people in the pipeline. In the next five years, the growth of population in the 15-34 year old age range is projected to increase by 2.6% across the U.S. In Austin, the number may grow dramatically more—some 20.0%, experts forecast.” “Austin is described along with Nashville and Charlotte as southern cities with a strong appeal to younger workers. Furthermore, Austin was also likened to Raleigh/Durham, North Carolina and Knoxville, Tennessee for providing a pipeline of talent from highly ranked universities.” Meanwhile, according to another Business Journal article, “there are about 39,500 job openings in the area during the most recent look.” “Registered nurse was the top posted occupation for September 2017—likely fueled by the new Dell Seton Medical Center teaching hospital—while computer systems analysts saw the largest year-to-year increase in postings for all occupations.”

Employment:

The BLS reports a seasonally unadjusted unemployment rate of 2.9% in September 2017 for the Austin-Round Rock MSA, down from 3.4% a year earlier.

Moody’s Economy.com reports

a third quarter 2017 average household income of $137,018 for the Austin MSA. Average household incomes of $147,921 and $142,523 are reported for the top metros in the nation and Southwest region, respectively.

Employment Growth:

Employment by Sector:

Reis ObserverDecember 11, 2017Prepared By Reis, Inc.




2

Published December 11, 2017 According to CES data by sector, the Professional and Business Services

sector added no net jobs in the year to October 2017, down from a gain of 6,100 (3.7%) in the prior 12 months. Among the other office-based sectors, Financial Activities added just 100 jobs (0.2%), down from a gain of 3,500 (6.4%), and Information lost 1,200 jobs (4.2%), following a gain of 1,200 (4.4%). Most of the consumer-driven sectors added jobs, thanks to population growth. The institutional Education and Health Services sector was up 5,000 jobs (4.2%) in the year to October, Leisure and Hospitality added 6,000 (4.9%), and Other Services was up 900 (2.0%). The Retail Trade sector, however, lost 1,500 jobs (1.4%) despite gains of 600 jobs (2.9%) in the Food and Beverage Store industry, which includes supermarkets, and 700 (4.2%) in the big-box General Merchandise Stores industry. Among the industrial sectors, Construction and related was up 2,800 jobs (4.7%) in the year to October, and Manufacturing employment was also up 2,800 (5.1%) despite a decrease of 100 jobs in the locally important Computer and Electronic Product Manufacturing industry. Distribution is apparently expanding, however, as Wholesale Trade employment was up 3,500 jobs (7.1%) and Transportation and Utilities up 800 (4.4%). In addition to housing, rapid population growth is overwhelming metro Austin’s automobile-oriented transportation system. “The expansion of I-35 has morphed into an $8.1 billion plan that would add two managed toll lanes in both directions—similar to the ones that just opened on MoPac Expressway—but no extra free lanes,” according to the Business Journal. “The Texas Department of Transportation unveiled the plan…which would get rid of the highway’s upper deck in downtown Austin and instead stack three levels of roads with two lanes each on top of each other in what’s known as a ‘cantilever’ configuration.” “The so-called Capital Express project would stretch 33 miles along I-35, from RM 1431 in Williamson County in the north to Texas 45 Southeast near Hays County in the south.” OUTLOOK Moody’s Economy.com predicts that the local population will continue to soar by about 60,000 per year despite rising housing prices and traffic congestion. The number of households is forecast to rise by 116,910 in the five years from year-end 2016 to year-end 2021. But employment growth is expected to slow, from an average 38,700 (4.3%) per year from 2012 to 2016 to 21,900 (2.1%) per year from 2017 to 2021.





3

Published December 11, 2017 THE REAL ESTATE MARKET

OFFICE A new supply boom is preventing a decrease in vacancy in the 46.5-million-square-foot Austin general purpose, multi-tenant office market, but rent gains show the market is strong. Reis reports nearly 1.5 million square feet of new competitive space has been added in 2017 through October, with net absorption at nearly 1.1 million square feet. The October vacancy rate was 12.9%, unchanged since mid-year but up 40 basis points year-to-date. The third quarter Class A vacancy rate is 12.6%, little changed for the quarter and year-over-year, while the Class B/C rate is 13.6%, up 30 basis points over three months and 12 months. Nearly two-thirds of local space is Class A. An additional 186,400 square feet of new office space completed construction in November and December, leaving 2.86 million square feet under construction. Reis predicts the vacancy rate will end 2017 at 13.3% and then fall to 12.3% in 2021 as 2.9 million square feet of new space added is met by 3 million square feet of net absorption. With planned space waiting in the wings, the boom is expected to extend past 2021. Rents increased 0.5% by both measures in the third quarter to $30.88 psf asking and $25.10 psf effective. A one-penny asking rent gain in October lifted the year-to-date increase to 2.5% by both measures, and Reis predicts a solid gain of 3.2% for all of 2017. The Class A asking average was up 0.7% during the third quarter to $34.41 psf, while the Class B/C asking average was up 0.5% to $24.53 psf, up 2.1% and 2.3% from a year earlier. Overall rents are rising, in part, because a higher and higher share of the total inventory is Class A. Reis predicts average rents will rise 2.0% to 3.0% per year from 2018 to 2021, with large gains in years when more expensive new space completes construction. Cushman & Wakefield reports a vacancy rate of 10.5%, up from 8.8% a year

earlier, and an average asking rent of $36.71 psf, up from $34.00 psf. This source reports a lease by Facebook for 231,000 square feet during the quarter.

Special Real Estate Factors:

Office: “Austin’s red-hot

commercial real estate market means office tenants are paying rental rates similar to those found in some of the country’s priciest cities,” wrote the Austin Business Journal. “A tenant spending $5,000 per month for Class A office space can get 1,087 square feet in Austin. That trails only Boston (where you could afford 1,006 square feet); Washington, D.C. (849 square feet); San Francisco (803 square feet); and New York City (703 square feet). Austin is more expensive than places including Dallas (where you could afford 2,012 square feet at that price), Portland (1,789), and San Jose in the heart of Silicon Valley (1,250 square feet), CommercialCafe reports. Here’s a graphical look at the comparison: Put another way, if a startup executive wanted to give each of her 101 employees 151 square feet, she would need a 15,251-square-foot office. That would cost $841,855 a year in Austin for Class A space, versus $692,167 in Seattle, $436,102 in Nashville, or $321,949 in Kansas City.” “‘Significant leasing activity and expansion by blue-chip companies such as Google, Facebook, and Amazon reflect the ongoing confidence in the Austin office market,’ according to Cushman & Wakefield. ‘In addition, the market for younger startup companies is strong and healthy.’”





4

Published December 11, 2017 APARTMENT

The 198,350-unit metro Austin apartment market is expected to add the third-most apartments since 1990 in 2017, at about 8,500, according to Reis. By October, nearly 5,800 had completed construction, exceeding the 4,040 units of net absorption and increasing the vacancy rate 70 basis points year-to-date to a still-moderate 6.0%. The third quarter vacancy rate was 7.0% for Class A units, up 10 basis points over the period, and 4.3% for Class B/C units, up 20 basis points. Tenants may be upgrading: the Class A rate is up 50 basis points year-over-year, but the Class B/C rate is up 120 basis points with negative net absorption. The 312-unit Arrington Ridge completed construction in Round Rock in November, leaving just under 11,000 units under construction. Reis predicts the vacancy rate will peak at 6.8% in 2018, then fall back to around 6.0% as development slows. New supply and a preponderance of inventory in the Class A segment are lifting average rents. As of October, the average asking rent was up 4.8% year-to-date to $1,169 per month, and the average effective rent was up 5.9% to $1,094 per month. Gains of 5.9% and 6.9%, respectively, are forecast for 2017. Whereas the Class A asking average is up 3.8% year-over-year to $1,330 per month, however, the Class B/C average is up just 1.9% to $890 per month. As there is less new supply to pull up overall rents, Reis predicts rent gains will slow to around 2.0% per year starting in 2020. Tenants, it appears, are getting their money’s worth here. According to 2016 American Community Survey data from the U.S. Census

Bureau, the vacancy rate for all rental units in metro Austin, including units in small buildings, affordable housing, and rental one-family homes, was 6.5%, above the U.S. average of 5.9%, and the median gross rent was $1,184 per month, above the U.S. average of $981 per month. This source reports 37.9% of metro Austin renters paid 35.0% of their income or more in rent, compared with 40.7% for the U.S. as a whole.

Special Real Estate Factors: Continued

Apartment: The neighborhood between downtown and the UT campus “is expected to be the next locus of construction activity with the redevelopment of the former University Medical Center Brackenridge hospital and an ambitious creation of a proposed innovation district,” stated the Business Journal. “As the innovation district plans have coalesced, the private sector has moved ahead with plans for redeveloping properties in the general vicinity. Real estate blog Austin Towers recently reported that Trammell Crow Residential plans to build a 30-story tower at 700 E. 11th St. on the current site of the Texas Trucking Association building. The project would be an apartment under the banner of Trammell Crow Residential’s Alexan brand.”

“The Guthrie, a new multifamily project, is rising from the former site of Guthrie Lumber & Distribution near Gonzales and Tillery streets in a formerly rural area east of downtown Austin,” according to the Business Journal. “Argyle Residential, an affiliate of Austin-based Cypress Real Estate Advisors, has already broken ground on the 322-unit project, which will include a live-work element on a small parcel across the street from the larger development.” Argyle started developing the area early, noted this source, with three residential projects already completed on the East Side.





5

Published December 11, 2017 RETAIL

Retail development is limited in metro Austin when compared with the amount of housing and office space being built. The 952,175-square-foot first phase of the Stone Hill Town Center power center completed construction in Pflugerville in September, followed by 110,000 square feet of retail at the mixed-use The Summit at Rivery Park in Georgetown and 24,300 square feet at the mixed-use Covered Bridge Village in South Austin. That, however, left just two projects under construction, led by 743,415 square feet of retail at the mixed-use Kyle Crossing in Kyle. The 21.6-million-square-foot Austin community-neighborhood shopping center market is particularly quiet, with just 35,000 square feet of new space completed in 2017 through October and 61,000 square feet of net absorption. The October vacancy rate was just 5.3%, down 10 basis points year-to-date, with the average asking rent up 2.5% to $23.36 psf and the average effective rent up 2.5% to $21.27 psf. The other project under construction is the 75,000-square-foot Oak Meadows Marketplace neighborhood center in Georgetown. Reis predicts the vacancy rate will end 2017 at 5.2%, with rents up 2.7% asking and 2.9% effective for the year. The third quarter 2017 power center vacancy rate was 6.4%, according to Reis, up 40 basis points from prior quarter reporting but down 20 basis points year-over-year. The average asking rent for power centers is high at $29.38 psf and up a huge 7.2% over twelve months. The big-box meltdown has not affected Austin. “Round Rock is considering offering incentives for the master-planned project,

which would include at least 1 million square feet of commercial and residential development,” according to the Business Journal. “That’s roughly equivalent to what Barton Creek Square mall has to offer, in terms of square footage.” Mark VI capital owns 65.5 acres of land on the southeast corner of the intersection between SH 45 and I-35 after buying in 2016, and has planned the project.

Retail: “If you took a walk down New York City’s Bleecker Street in the 1990s, you’d find many eclectic shops, local restaurants, and gathering places like what you see currently on Austin’s famed South Congress Avenue,” a guest columnist wrote in the Business Journal. “If you take a walk down Bleecker Street now, you’ll see deserted sidewalks, boarded up storefronts, and very few of the local businesses that once thrived there. It should serve as a cautionary tale for South Congress landlords.” The cachet of Bleecker Street attracted major national and international brands, and “landlords jumped at the prospect of much higher rents and leases backed by major corporations.” However, “once the street had metamorphosed from a neighborhood with a vibrant local culture into a high-end shopping mall, the cachet with being located on Bleecker faded. The stores were meant to serve more as billboards than lucrative points of sale in the first place, so when Bleecker stopped being cool and the retail sector was disrupted by online shopping, the major brands fled. Today, storefronts are empty or boarded up, and landlords who once commanded some of the highest rents on the globe are struggling to find tenants.” To prevent this from happening in Austin, the source recommends landlords combine into a single leasing agent for the strip and tenants combine into a single online marketplace for all of them.






6

Published December 11, 2017 TRANSACTION ANALYTICS

Office Reis reports just two qualifying single property office investment sales for the third quarter of 2017, with a transaction volume of $10.2 million, a mean price of $283 psf, and a mean cap rate of 5.3%.* A strong fourth quarter will be required for the 2017 sales total, now at $509.1 million, to match the $866 million of 2016. The rolling 12-month cap rate is high at 7.8%, down 90 basis points from the prior quarter and down 80 basis points year-over-year. No third quarter deals are among the ten largest year-over-year. Apartment Apartment deals remained active during the third quarter, with 16 deals for $250.8 million at a mean price of $111,000 per unit. The rolling 12-month cap rate is 5.3%, unchanged from the prior quarter and up 60 from a year earlier. There was $1.75 billion in apartment property told in 2016, compared with $1.16 billion through three quarters of 2017. In the largest third quarter deal, Monogram Residential Trust sold the 217-unit Seven in Austin to Greystar for $56.625 million ($260,945 per unit) in September. Retail Third quarter retail deals were led by the 230,000-square-foot Kyle Marketplace in Kyle. DDR Corporation sold it to InvenTrust Properties Corporation in September for $59 million ($257 psf). There were 17 third quarter deals in total for $158.2 million at a mean price of $249 psf and a mean cap rate of 4.7%. The rolling 12-month cap rate ended the quarter at 6.2%, down from 6.6% the quarter before and down from 8.1% a year earlier.

* Reis Transaction Analytics includes single sale transactions of $2,000,000 and greater, and excludes portfolio sales where pricing of individual buildings cannot be confirmed.





7

Published December 11, 2017 INDUSTRIAL

The 15.9-million-square-foot Austin Flex/R&D market got some new supply in the third quarter of 2017, as the 116,200-square-foot Tech Ridge 3.1 completed construction in northeast Austin in July. By October, however, net absorption totaled 105,000 square feet year-to-date, leaving the vacancy rate unchanged for 2017 at 9.4%. The average asking rent was up 2.5% year-to-date to $9.71 psf in October, with the average effective rent up 2.8% to $8.70 psf. Two Flex/R&D buildings with a total of 230,250 square feet are under construction at Brushy Creek in Cedar Park. In Austin, the three-phase Data Foundry, with 325,000 square feet, and the 325,000-square-foot Texas 2 completed recently. The Flex/R&D vacancy rate is forecast to fall to 8.9% at year-end 2017 and 6.6% at year-end 2021. Rent gains are anticipated at 3.5% to 4.0% per year through 2021, roundly speaking. The 35.6-million-square-foot Austin Metropolitan Statistical Area (MSA) warehouse/distribution market is more active with 754,000 square feet completing construction thus far in 2017 including three buildings with 322,900 square feet added at Freeport Tech Center South in southeast Austin in July. Net absorption totaled just 214,000 square feet year-to-date through October, and the vacancy rate increased 140 basis points to 9.0%. The average asking rent is up a strong 3.3% year-to-date to a relatively high $7.22 psf, with the average effective rent up 3.6% to $6.43 psf. More development is coming, with 145 million square feet under construction including 550,000 square feet at the Living Spaces Fulfillment Center in Pflugerville. Reis predicts the vacancy rate will fall back to 8.5% at year-end 2017 and 6.7% at year-end 2021, as rents rise at around 4.0% per year. Cushman & Wakefield notes a vacancy rate of 9.5%, up 200 basis points from a

year earlier, and an asking rent of $9.34 psf, down from $9.75 psf, for industrial space in Austin. This source reports minus 385,000 square feet of net absorption during the third quarter, a “sign” of a “softening” market.


For additional metro and submarket level information on the top 82 markets for the four principal property types, visit www.reis.com or call Reis at: (800) 366-REIS.

Unless otherwise indicated, economic and demographic data provided by Moody’s Economy.com

Publication Date: December 2017 © 2017 Reis, Inc.

Industrial: “An industrial complex with more than 600,000 square feet of leasable space is set to rise on a 30-acre parcel of grassland just east of I-35 in Buda, south of Austin,” the Business Journal reports. “Exeter Property Group hopes to break ground on the first phase—a 300,000-square-foot building—in early 2018. Hays County has agreed to an incentives deal that would rebate 15.0% of the property taxes for the site at buildout, increasing to 30.0% once the developer finds a tenant with at least 50 employees.” Buda is also putting up $130,000 in cash to subsidize the development. “The site should appeal to companies with big distribution needs—for sending products into Austin as well as the wider region with easy access to I-35.”

Sector 3Q17 3Q16 Chg

Office 12.9% 12.8% 10 bps

Apartment 6.0% 5.2% 80 bps

Retail 5.3% 5.6% -30 bps

Warehouse 9.0% 7.9% 110 bps

Flex/R&D 9.4% 10.0% -60 bps

Vacancy

Sector Chg

Office $30.88 psf $30.15 psf 2.4%

Apartment $1,166 month $1,126 month 3.6%

Retail $23.28 psf $22.64 psf 2.8%

Warehouse $7.04 psf $6.85 psf 2.8%

Flex/R&D $9.63 psf $9.37 psf 2.8%

Rents3Q17 3Q16





Metro Trend Futures

Metro Trend FuturesRetail - 4th Quarter 2017Prepared By Reis, Inc.



Neighborhood Shopping Centers

Section 3 - Current Metro Rent Details

Nonanchor Asking Rentby Age

Nonanchor Asking Rent Distribution Nonanchor Asking Rent Growth Rate Distribution

Year Built Rent

Before 1970 $24.01

1970-1979 $22.47

1980-1989 $21.18

1990-1999 $23.84

2000-2009 $25.78

After 2009 $27.89

All $21.76

As of 12/31/17

Low 25% Mean Median 75% High

$12.68 $18.11 $21.76 $23.27 $27.00 $35.00

37

4439 39

46

24

16

8

Under$16.11

$16.12$19.22

$19.23$22.33

$22.34$25.44

$25.45$28.55

$28.56$31.66

$31.67$34.77

$34.78Over

Num

ber

of P

rope

rtie

s


- 1.4% - 0.3% 0.9% 0.7% 1.2% 6.1%

93

27

110

14

0 0 2 7

Under- 0.1%

0.0%0.6%

0.7%1.3%

1.4%2.0%

2.1%2.7%

2.8%3.4%

3.5%4.1%

4.2%Over

Num

ber

of P

rope

rtie

s

93 Negative Growth 160Positive Growth

As of 12/31/17 Qtr Ending 12/31/17

Anchor Asking Rent DistributionLow 25% Mean Median 75% High

$ 7.68 $11.55 $14.53 $14.29 $17.48 $23.65

As of 12/31/17

Section 4 - Nonanchor Rent Growth Comparisons

Asking Rent Growth

Quarterly Annualized

4Q17 3Q17 YTD Avg 1 Year 3 Year 5 Year

Austin 0.9% 0.7% 0.7% 2.8% 3.1% 2.9%

Southwest 0.5% 0.3% 0.5% 2.1% 2.6% 2.5%

United States 0.5% 0.5% 0.5% 1.9% 2.0% 1.9%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17

Metro Rank Total Metro RanksCompared to: Metros

4Q17 3Q17 YTD 1 Year 3 Year 5 Year

Southwest 9 2 2 2 2 1 2United States 80 16 29 15 15 6 5

4Q16 1Q17 2Q17 3Q17 4Q17

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Quarterly Rent Growth Rate Trends

Austin

US

Southwest

%

Period ending 12/31/17

2012 2013 2014 2015 2016 20170.00.51.01.52.02.53.03.54.0

Austin

Southwest

US

Asking Rent Growth Rate Trends and Forecast%





Community Shopping Centers

Section 5 - Current Metro Rent Details

Nonanchor Asking Rentby Age

Nonanchor Asking Rent Distribution Nonanchor Asking Rent Growth Rate Distribution

Year Built Rent

Before 1970 $16.74

1970-1979 $24.82

1980-1989 $24.91

1990-1999 $32.96

2000-2009 $28.12

After 2009 $34.39

All $25.79

As of 12/31/17


$13.50 $21.17 $25.79 $30.29 $33.77 $41.81

45

9

7

34

10 10

Under$16.11

$16.12$19.22

$19.23$22.33

$22.34$25.44

$25.45$28.55

$28.56$31.66

$31.67$34.77

$34.78Over

Num

ber

of P

rope

rtie

s


- 0.3% 0.0% 0.9% 0.8% 1.3% 5.2%

13

9

26

30 0 0 1

Under- 0.1%

0.0%0.6%

0.7%1.3%

1.4%2.0%

2.1%2.7%

2.8%3.4%

3.5%4.1%

4.2%Over

Num

ber

of P

rope

rtie

s

13 Negative Growth 39Positive Growth

As of 12/31/17 Qtr Ending 12/31/17

Anchor Asking Rent DistributionLow 25% Mean Median 75% High

$ 8.28 $14.50 $17.11 $16.90 $19.81 $26.14

As of 12/31/17

Section 6 - Nonanchor Rent Growth Comparisons

Asking Rent Growth



Austin 0.9% 0.8% 0.9% 3.5% 3.3% 3.0%

Southwest 0.5% 0.2% 0.5% 2.0% 2.2% 2.2%

United States 0.5% 0.5% 0.4% 1.8% 1.8% 1.7%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17




4Q16 1Q17 2Q17 3Q17 4Q17

0.000.100.200.300.400.500.600.700.800.901.001.10

Quarterly Rent Growth Rate Trends

Austin

US

Southwest

%


2012 2013 2014 2015 2016 20170.0

1.0

2.0

3.0

4.0

Austin

Southwest

US







Section 7 - Current Metro Vacancy Details

Vacancy Rate By Age Vacancy Rate Distribution

Year Built Vac. Rate

Before 1970 10.1%

1970-1979 5.7%

1980-1989 7.8%

1990-1999 10.5%

2000-2009 7.9%

After 2009 18.6%

All 6.5%

As of 12/31/17


0.0% 0.0% 6.5% 5.8% 12.5% 41.2%

117

52

20 1912 9 5

19

Under4.6%

4.7%9.2%

9.3%13.8%

13.9%18.4%

18.5%23.0%

23.1%27.6%

27.7%32.2%

32.3%Over

Num

ber

of P

rope

rtie

s

As of 12/31/17

Section 8 - Vacancy Rate Comparisons

Vacancy Rates



Austin 6.5% 6.3% 6.3% 6.3% 6.1% 6.2%

Southwest 11.9% 11.9% 11.9% 11.9% 12.4% 12.9%

United States 10.3% 10.4% 10.4% 10.3% 10.6% 10.9%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17




4Q16 1Q17 2Q17 3Q17 4Q17

6.06.57.07.58.08.59.09.5

10.010.511.011.512.0

Quarterly Vacancy Rates

Austin

US

Southwest

%


2012 2013 2014 2015 2016 2017

6.0

8.0

10.0

12.0

14.0

Austin

Southwest

US

Vacancy Rate Trends and Forecast%






Section 9 - Current Metro Vacancy Details

Vacancy Rate By Age Vacancy Rate Distribution

Year Built Vac. Rate

Before 1970 0.0%

1970-1979 3.7%

1980-1989 7.6%

1990-1999 2.2%

2000-2009 1.5%

After 2009 2.2%

All 4.2%

As of 12/31/17


0.0% 0.6% 4.2% 3.0% 6.8% 20.9%

34

11

3 2 1 1 0 0

Under4.6%

4.7%9.2%

9.3%13.8%

13.9%18.4%

18.5%23.0%

23.1%27.6%

27.7%32.2%

32.3%Over

Num

ber

of P

rope

rtie

s

As of 12/31/17

Section 10 - Vacancy Rate Comparisons

Vacancy Rates



Austin 4.2% 4.0% 4.1% 4.4% 5.7% 6.3%

Southwest 9.9% 9.8% 9.8% 9.7% 9.6% 9.9%

United States 9.7% 9.7% 9.6% 9.6% 9.4% 9.5%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17




4Q16 1Q17 2Q17 3Q17 4Q17

4.04.55.05.56.06.57.07.58.08.59.09.5

Quarterly Vacancy Rates

Austin

US

Southwest

%


2012 2013 2014 2015 2016 2017

5.0

6.0

7.0

8.0

9.0

10.0

Austin

Southwest

US






Neighborhood and Community Shopping Centers

Section 11 - Nonanchor Rent Growth Comparisons and Forecast

Asking Rent Growth


4Q17 3Q17 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast

Austin 0.9% 0.7% 0.8% 3.1% 3.2% 3.0% 2.7%

Southwest 0.5% 0.3% 0.5% 2.0% 2.4% 2.3% 2.1%

United States 0.5% 0.5% 0.4% 1.8% 1.9% 1.8% 1.8%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/22


4Q17 3Q17 YTD 1 Year 3 Year 5 Year 5 Yr Forecast

Southwest 9 2 1 1 1 1 1 1United States 80 18 27 9 9 4 3 2

2012 2014 2016 2018 2020 20220.0

1.0

2.0

3.0

4.0

Austin

Southwest

US







Section 12 - Vacancy Rate Comparisons and Forecast

Vacancy Rates



Austin 5.5% 5.3% 5.3% 5.5% 5.9% 6.2% 5.6%

Southwest 11.0% 10.9% 10.9% 10.9% 11.1% 11.5% 10.8%

United States 10.0% 10.0% 10.0% 9.9% 10.0% 10.2% 9.8%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/22




2012 2014 2016 2018 2020 2022

6.0

7.0

8.0

9.0

10.0

11.0

12.0

Austin

Southwest

US




Section 13 - Metro Inventory Details

Inventory By Center Age Shopping Center Stock Traits

Year Built Percent

Before 1970 6.0%

1970-1979 13.0%

1980-1989 38.0%

1990-1999 20.0%

2000-2009 17.0%

After 2009 7.0%

All 100.0%

As of 12/31/17

MetroLow Mean Median High

Year Built 1955 1990 1986 2017Size (sq. ft.) 7,000 68,518 44,188 380,000

Distance to Highway (miles) 0 0.8 0.4 7.8Distance to CBD (miles) 1.5 9.1 7.8 27

Distance to Landmark (miles) 0.5 5.1 4.2 19As of 12/31/17 Landmark =Colorado River

Average Metro Lease Terms

Anchor/Nonanchor CRD % Free Rent

(mos)Expenses $

(Commercial)Lease Term

(yrs)Leasing

Commission %Tenant

Improvements $A - 6.5% 3.0 $ 7.20 8.2 7.9% $15.60N - 5.0% 1.2 $ 7.30 4.5 10.2% $13.70

As of 12/31/17




Section 14 - Inventory Growth Comparisons

Inventory Growth Rates



Austin 0.0% 0.1% 0.1% 0.2% 1.0% 1.2% 0.7%

Southwest 0.1% 0.1% 0.2% 0.7% 1.0% 0.8% 0.5%

United States 0.1% 0.1% 0.1% 0.5% 0.5% 0.5% 0.4%

Period Ending: 12/31/17 09/30/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/22




2012 2014 2016 2018 2020 20220.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Austin

Southwest

US

Inventory Growth Comparisons and Forecast%





Section 15 - Construction/Absorption Change

Construction and Absorption

Quarterly

4Q17 3Q17 YTD Avg

Sq Ft Built Sq FtAbsorbed

Con/AbsRatio Sq Ft Built Sq Ft

AbsorbedCon/Abs

Ratio Sq Ft Built Sq FtAbsorbed

Con/AbsRatio

Austin 0 -43,000 0.0 15,000 5,000 3.0 8,800 5,800 1.5

Southwest 295,000 200,000 1.5 133,000 -74,000 -1.8 485,500 347,000 1.4Average over period ending: 12/31/17 12/31/17 12/31/17 09/30/17 09/30/17 09/30/17 12/31/17 12/31/17 12/31/17

Annualized

1 Year History 3 Year History 5 Year History



AbsorbedCon/Abs


Con/AbsRatio

Austin 35,000 23,000 1.5 208,000 277,000 0.8 243,000 295,000 0.8

Southwest 1,942,000 1,388,000 1.4 2,527,000 2,797,000 0.9 2,130,000 2,674,000 0.8Average over period ending: 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17

Annualized

5 Year Forecast


Con/AbsRatio

Austin 150,000 137,600 1.1

Southwest 1,208,200 1,272,400 1.0Average over period ending: 12/31/22 12/31/22 12/31/22

0

100,000

200,000

300,000

400,000

Squ

are

Fee

t

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

0

2

4

6

Vac

ancy

Rat

e (%

)Construction/Absorption and Vacancy

Vacancy Rate Construction Absorption





Section 16 - Economic and Demographic Trends

2012 2014 2016 2018 2020 2022-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Austin Southwest US

Household Income Growth Trends and Forecast Metro vs. Region & U.S.

Per

cent

age

Cha

nge

Provided by Moody's Economy.com, Period ending 12/31/22

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

1.0%

2.0%

3.0%

4.0%

Austin Southwest US

Total Employment Growth Trends and Forecast Metro vs. Region & U.S.

Per

cent

age

Cha

nge


2012 2014 2016 2018 2020 2022

2.60%

2.80%

3.00%

3.20%

3.40%

Population Households

Austin Population/Household Growth Trends and Forecast

Per

cent

age

Cha

nge





Section 17 - Metro Area Map: Austin





Section 18 - Metro Data

Year Qtr InventorySF/Units Completions Inventory

Growth% Vacant Stock VacancyRate

VacancyChange(BPS)

OccupiedStock

NetAbsorption Asking Rent Ask Rent %

Chg

2012 Y 11,815,000 11,000 0.1% 836,000 7.1% -120 10,979,000 149,000 $18.87 1.5%

2013 Y 11,873,000 58,000 0.5% 692,000 5.8% -130 11,181,000 202,000 $19.31 2.3%

2014 Y 11,960,000 87,000 0.7% 704,000 5.9% 10 11,256,000 75,000 $19.87 2.9%

2015 Y 12,028,000 68,000 0.6% 718,000 6.0% 10 11,310,000 54,000 $20.66 4.0%

2016 Q1 12,040,000 12,000 0.1% 686,000 5.7% -30 11,354,000 44,000 $20.93 1.3%

2016 Q2 12,063,000 23,000 0.2% 697,000 5.8% 10 11,366,000 12,000 $21.01 0.4%

2016 Q3 12,087,000 24,000 0.2% 728,000 6.0% 20 11,359,000 -7,000 $21.05 0.2%

2016 Q4 12,181,000 94,000 0.8% 745,000 6.1% 10 11,436,000 77,000 $21.17 0.6%

2016 Y 12,181,000 153,000 1.3% 745,000 6.1% 10 11,436,000 126,000 $21.17 2.5%

2017 Q1 12,181,000 0 0.0% 729,000 6.0% -10 11,452,000 16,000 $21.22 0.2%

2017 Q2 12,201,000 20,000 0.2% 755,000 6.2% 20 11,446,000 -6,000 $21.41 0.9%

2017 Q3 12,216,000 15,000 0.1% 768,000 6.3% 10 11,448,000 2,000 $21.56 0.7%

2017 Q4 12,216,000 0 0.0% 789,000 6.5% 20 11,427,000 -21,000 $21.76 0.9%

2017 Y 12,216,000 35,000 0.3% 789,000 6.5% 40 11,427,000 -9,000 $21.76 2.8%

Year Qtr EffectiveRent

Eff Rent %Chg Cons/Abs Abs/Occ

Stock% Population Pop%Chg Employment Emp%

Chg Households HH%Chg

Avg HHIncome

AHHI%Chg

2012 Y $17.11 1.6% 0.1 1.4% 1,858,110 2.8% 860,600 4.9% 709,220 3.3% $123,835 8.6%

2013 Y $17.55 2.6% 0.3 1.8% 1,911,370 2.9% 898,900 4.5% 733,370 3.4% $121,348 - 2.0%

2014 Y $18.09 3.1% 1.2 0.7% 1,970,160 3.1% 936,370 4.2% 755,710 3.0% $129,860 7.0%

2015 Y $18.84 4.1% 1.3 0.5% 2,026,450 2.9% 978,330 4.5% 776,620 2.8% $132,711 2.2%

2016 Q1 $19.10 1.4% 0.3 0.4% 2,041,150 0.7% 987,330 0.9% 781,960 0.7% $131,702 - 0.8%

2016 Q2 $19.18 0.4% 1.9 0.1% 2,056,410 0.7% 994,670 0.7% 786,800 0.6% $132,048 0.3%

2016 Q3 $19.23 0.3% -3.4 - 0.1% 2,070,990 0.7% 1,004,430 1.0% 792,640 0.7% $132,161 0.1%

2016 Q4 $19.33 0.5% 1.2 0.7% 2,085,470 0.7% 1,014,170 1.0% 797,990 0.7% $131,560 - 0.5%

2016 Y $19.33 2.6% 1.2 1.1% 2,085,470 2.9% 1,014,170 3.7% 797,990 2.8% $131,560 - 0.9%

2017 Q1 $19.38 0.3% 0.0 0.1% 2,099,940 0.7% 1,018,830 0.5% 804,030 0.8% $133,741 1.7%

2017 Q2 $19.57 1.0% -3.3 - 0.1% 2,114,970 0.7% 1,023,200 0.4% 810,260 0.8% $133,755 0.0%

2017 Q3 $19.70 0.7% 7.5 0.0% 2,129,940 0.7% 1,025,600 0.2% 816,280 0.7% $134,411 0.5%

2017 Q4 $19.87 0.9% 0.0 - 0.2% 2,144,760 0.7% 1,030,870 0.5% 822,510 0.8% $135,280 0.6%

2017 Y $19.87 2.8% -3.9 - 0.1% 2,144,760 2.8% 1,030,870 1.6% 822,510 3.1% $135,280 2.8%








VacancyChange(BPS)

OccupiedStock


Chg

2012 Y 8,588,000 0 0.0% 615,000 7.2% 10 7,973,000 -1,000 $22.25 0.5%

2013 Y 8,842,000 254,000 3.0% 681,000 7.7% 50 8,161,000 188,000 $22.68 1.9%

2014 Y 9,031,000 189,000 2.1% 690,000 7.6% -10 8,341,000 180,000 $23.37 3.0%

2015 Y 9,249,000 218,000 2.4% 594,000 6.4% -120 8,655,000 314,000 $24.35 4.2%

2016 Q1 9,249,000 0 0.0% 540,000 5.8% -60 8,709,000 54,000 $24.53 0.7%

2016 Q2 9,249,000 0 0.0% 466,000 5.0% -80 8,783,000 74,000 $24.58 0.2%

2016 Q3 9,249,000 0 0.0% 461,000 5.0% 0 8,788,000 5,000 $24.71 0.5%

2016 Q4 9,400,000 151,000 1.6% 430,000 4.6% -40 8,970,000 182,000 $24.92 0.8%

2016 Y 9,400,000 151,000 1.6% 430,000 4.6% -180 8,970,000 315,000 $24.92 2.3%

2017 Q1 9,400,000 0 0.0% 396,000 4.2% -40 9,004,000 34,000 $25.09 0.7%

2017 Q2 9,400,000 0 0.0% 379,000 4.0% -20 9,021,000 17,000 $25.37 1.1%

2017 Q3 9,400,000 0 0.0% 376,000 4.0% 0 9,024,000 3,000 $25.57 0.8%

2017 Q4 9,400,000 0 0.0% 398,000 4.2% 20 9,002,000 -22,000 $25.79 0.9%

2017 Y 9,400,000 0 0.0% 398,000 4.2% -40 9,002,000 32,000 $25.79 3.5%





Avg HHIncome

AHHI%Chg

2012 Y $20.04 0.5% 0.0 0.0% 1,858,110 2.8% 860,600 4.9% 709,220 3.3% $123,835 8.6%

2013 Y $20.43 1.9% 1.4 2.3% 1,911,370 2.9% 898,900 4.5% 733,370 3.4% $121,348 - 2.0%

2014 Y $21.09 3.2% 1.1 2.2% 1,970,160 3.1% 936,370 4.2% 755,710 3.0% $129,860 7.0%

2015 Y $22.02 4.4% 0.7 3.6% 2,026,450 2.9% 978,330 4.5% 776,620 2.8% $132,711 2.2%

2016 Q1 $22.20 0.8% 0.0 0.6% 2,041,150 0.7% 987,330 0.9% 781,960 0.7% $131,702 - 0.8%

2016 Q2 $22.25 0.2% 0.0 0.8% 2,056,410 0.7% 994,670 0.7% 786,800 0.6% $132,048 0.3%

2016 Q3 $22.37 0.5% 0.0 0.1% 2,070,990 0.7% 1,004,430 1.0% 792,640 0.7% $132,161 0.1%

2016 Q4 $22.56 0.8% 0.8 2.0% 2,085,470 0.7% 1,014,170 1.0% 797,990 0.7% $131,560 - 0.5%

2016 Y $22.56 2.5% 0.5 3.5% 2,085,470 2.9% 1,014,170 3.7% 797,990 2.8% $131,560 - 0.9%

2017 Q1 $22.74 0.8% 0.0 0.4% 2,099,940 0.7% 1,018,830 0.5% 804,030 0.8% $133,741 1.7%

2017 Q2 $23.01 1.2% 0.0 0.2% 2,114,970 0.7% 1,023,200 0.4% 810,260 0.8% $133,755 0.0%

2017 Q3 $23.21 0.9% 0.0 0.0% 2,129,940 0.7% 1,025,600 0.2% 816,280 0.7% $134,411 0.5%

2017 Q4 $23.39 0.8% 0.0 - 0.2% 2,144,760 0.7% 1,030,870 0.5% 822,510 0.8% $135,280 0.6%

2017 Y $23.39 3.7% 0.0 0.4% 2,144,760 2.8% 1,030,870 1.6% 822,510 3.1% $135,280 2.8%








VacancyChange(BPS)

OccupiedStock


Chg

2012 Y 20,403,000 11,000 0.1% 1,451,000 7.1% -70 18,952,000 148,000 $20.29 0.9%

2013 Y 20,715,000 312,000 1.5% 1,373,000 6.6% -50 19,342,000 390,000 $20.75 2.3%

2014 Y 20,991,000 276,000 1.3% 1,394,000 6.6% 0 19,597,000 255,000 $21.38 3.0%

2015 Y 21,277,000 286,000 1.4% 1,312,000 6.2% -40 19,965,000 368,000 $22.26 4.1%

2016 Q1 21,289,000 12,000 0.1% 1,226,000 5.8% -40 20,063,000 98,000 $22.49 1.0%

2016 Q2 21,312,000 23,000 0.1% 1,163,000 5.5% -30 20,149,000 86,000 $22.56 0.3%

2016 Q3 21,336,000 24,000 0.1% 1,189,000 5.6% 10 20,147,000 -2,000 $22.64 0.4%

2016 Q4 21,581,000 245,000 1.1% 1,175,000 5.4% -20 20,406,000 259,000 $22.80 0.7%

2016 Y 21,581,000 304,000 1.4% 1,175,000 5.4% -80 20,406,000 441,000 $22.80 2.4%

2017 Q1 21,581,000 0 0.0% 1,125,000 5.2% -20 20,456,000 50,000 $22.90 0.4%

2017 Q2 21,601,000 20,000 0.1% 1,134,000 5.2% 0 20,467,000 11,000 $23.14 1.0%

2017 Q3 21,616,000 15,000 0.1% 1,144,000 5.3% 10 20,472,000 5,000 $23.30 0.7%

2017 Q4 21,616,000 0 0.0% 1,187,000 5.5% 20 20,429,000 -43,000 $23.51 0.9%

2017 Y 21,616,000 35,000 0.2% 1,187,000 5.5% 10 20,429,000 23,000 $23.51 3.1%

2018 Y 21,755,000 139,000 0.6% 1,196,000 5.5% 0 20,559,000 130,000 $24.06 2.3%

2019 Y 21,913,000 158,000 0.7% 1,213,000 5.5% 0 20,700,000 141,000 $24.58 2.2%

2020 Y 22,070,000 157,000 0.7% 1,270,000 5.8% 30 20,800,000 100,000 $25.16 2.4%

2021 Y 22,224,000 154,000 0.7% 1,263,000 5.7% -10 20,961,000 161,000 $25.93 3.1%

2022 Y 22,366,000 142,000 0.6% 1,249,000 5.6% -10 21,117,000 156,000 $26.80 3.4%





Avg HHIncome

AHHI%Chg

2012 Y $18.34 1.0% 0.1 0.8% 1,858,110 2.8% 860,600 4.9% 709,220 3.3% $123,835 8.6%

2013 Y $18.78 2.4% 0.8 2.0% 1,911,370 2.9% 898,900 4.5% 733,370 3.4% $121,348 - 2.0%

2014 Y $19.38 3.2% 1.1 1.3% 1,970,160 3.1% 936,370 4.2% 755,710 3.0% $129,860 7.0%

2015 Y $20.22 4.3% 0.8 1.8% 2,026,450 2.9% 978,330 4.5% 776,620 2.8% $132,711 2.2%

2016 Q1 $20.45 1.1% 0.1 0.5% 2,041,150 0.7% 987,330 0.9% 781,960 0.7% $131,702 - 0.8%

2016 Q2 $20.51 0.3% 0.3 0.4% 2,056,410 0.7% 994,670 0.7% 786,800 0.6% $132,048 0.3%

2016 Q3 $20.59 0.4% -12.0 0.0% 2,070,990 0.7% 1,004,430 1.0% 792,640 0.7% $132,161 0.1%

2016 Q4 $20.74 0.7% 0.9 1.3% 2,085,470 0.7% 1,014,170 1.0% 797,990 0.7% $131,560 - 0.5%

2016 Y $20.74 2.6% 0.7 2.2% 2,085,470 2.9% 1,014,170 3.7% 797,990 2.8% $131,560 - 0.9%

2017 Q1 $20.84 0.5% 0.0 0.2% 2,099,940 0.7% 1,018,830 0.5% 804,030 0.8% $133,741 1.7%

2017 Q2 $21.07 1.1% 1.8 0.1% 2,114,970 0.7% 1,023,200 0.4% 810,260 0.8% $133,755 0.0%

2017 Q3 $21.22 0.7% 3.0 0.0% 2,129,940 0.7% 1,025,600 0.2% 816,280 0.7% $134,411 0.5%

2017 Q4 $21.40 0.8% 0.0 - 0.2% 2,144,760 0.7% 1,030,870 0.5% 822,510 0.8% $135,280 0.6%

2017 Y $21.40 3.2% 1.5 0.1% 2,144,760 2.8% 1,030,870 1.6% 822,510 3.1% $135,280 2.8%

2018 Y $21.91 2.4% 1.1 0.6% 2,204,620 2.8% 1,052,560 2.1% 847,180 3.0% $140,644 4.0%

2019 Y $22.41 2.3% 1.1 0.7% 2,263,100 2.7% 1,072,510 1.9% 870,500 2.8% $145,770 3.6%

2020 Y $23.02 2.7% 1.6 0.5% 2,321,470 2.6% 1,087,170 1.4% 893,640 2.7% $149,625 2.6%

2021 Y $23.78 3.3% 1.0 0.8% 2,382,870 2.6% 1,111,860 2.3% 917,950 2.7% $154,598 3.3%

2022 Y $24.61 3.5% 0.9 0.7% 2,446,130 2.7% 1,137,270 2.3% 942,650 2.7% $159,799 3.4%


Submarket Overview

Submarket OverviewRetail - 4th Quarter 2017Prepared By Reis, Inc.



Section 21 - Submarket Overview

Submarket Anchor/Nonanchor

Inventory(Buildings)

Inventory(Sq Ft)

AskingRent $ CRD % Vac

%

FreeRent(mos)

Expenses $(Commercial)

LeaseTerm(yrs)

LeasingCommission

%

TenantImprovements

$

Cent./Downtown Aust. A 56 2,866,000 $15.30 - 6.0% 1.3% 0.5 $ 7.22 8.9 6.0% $13.67

Cent./Downtown Aust. N 116 4,563,000 $22.99 - 1.7% 5.0% 0.8 $ 7.21 3.1 8.6% $11.34

South Austin A 46 3,591,000 $14.03 - 6.6% 2.4% 4.3 $ 9.46 10.1 10.5% $18.52

South Austin N 87 4,114,000 $27.30 - 7.6% 8.4% 1.8 $ 9.46 5.1 11.1% $17.73

Rnd. Rk./Wllmsn. Co. A 50 3,233,000 $12.36 - 6.7% 2.1% 3.7 $ 4.64 5.5 6.6% $14.04

Rnd. Rk./Wllmsn. Co. N 87 3,249,000 $19.61 - 6.3% 12.9% 1.1 $ 4.62 5.6 11.3% $12.04


New Construction Listing

New Construction ListingRetail - 4th Quarter 2017Prepared By Reis, Inc.

Powered By Reis Metro: AustinAs of 23-Jan-2018CustomerID:1016323


Section 22 - Construction Deliveries

Completed SF SF Under Construction Totals Planned Proposed Totals

2017 YTD 2018 2018 2019 and Later 2017 and LaterNeighborhood 34,730 85,459 0 0 120,189 716,743 125,950 842,693

Community 0 0 0 0 0 1,081,844 113,250 1,195,094Power Center 1,352,174 0 0 0 1,352,174 2,465,328 0 2,465,328

Regional 0 0 0 0 0 0 0 0Mixed Use 134,300 0 0 743,415 877,715 936,000 299,500 1,235,500

Other 0 0 154,712 0 154,712 19,106 7,822 26,928Totals 1,521,204 85,459 154,712 743,415 2,504,790 5,219,021 546,522 5,765,543

Section 23 - Metro Construction Breakdown

14.4 %

25.6 %

11.6 %

2.2 %

46.2 %

Metro Construction by Project Type 2017 and Later

CommunityMixed UseNeighborhoodOtherPower CenterRegional

57.5 %

20.9 %

14.1 %

7.5 %

Metro Construction by Top Five Submarket Share 2017 and Later

Non-Submarketed AreasRnd. Rk./Wllmsn. Co.South AustinCent./Downtown Aust.

Includes all recently completed, under construction, planned, and proposed properties from the table above. Note that some verified listings for planned and proposed properties do not yet have afirm completion date.

Section 24 - Submarket New Construction Project Tally

1. Completed 2. Under Construction 3. Planned/Proposed

Submarket Neigh/Comm

Power/Reg. Other Neigh/

CommPower/Reg. Other Neigh/

CommPower/Reg. Other Grand

Total

Cent./Downtown Aust. 0 0 0 0 0 0 472,639 0 147,822 620,461

South Austin 0 0 24,300 0 0 0 281,504 320,600 536,000 1,162,404

Rnd. Rk./Wllmsn. Co. 111,780 400,000 110,000 0 0 0 523,084 90,000 494,606 1,729,470

Non-Submarketed Areas 8,409 952,174 0 0 0 898,127 760,560 2,054,728 84,000 4,757,998





Section 25 - Metro Inventory Details

Inventory By Center Age

Year Built Percent

Before 1970 6.0%

1970-1979 13.0%

1980-1989 38.0%

1990-1999 20.0%

2000-2009 17.0%

After 2009 7.0%

All 100.0%

As of 12/31/172012 2014 2016 2018 2020 2022

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Austin Southwest US

Retail Inventory Growth Trend and Forecast%

Section 26 - Inventory Growth Rankings Forecast

Southwest Region Cumulative Inventory Growth Forecast Ranking 2018 and Later National Cumulative Inventory Growth Forecast Ranking 2018 and Later

Metro Cumulative Growth Forecast Rank Metro Cumulative Growth Forecast RankAustin 3.5% 1

Houston 2.9% 2

Dallas 2.1% 3

San Antonio 2.0% 4

Oklahoma City 1.6% 5

New Orleans 0.0% 9

New Orleans 0.0% 9

Birmingham 5.3% 1

Northern New Jersey 4.3% 5

Tacoma 3.5% 6

Austin 3.5% 7

Nashville 3.4% 8

Ventura County 3.3% 9

New Orleans 0.0% 80

Section 27 - Construction/Absorption Change

Construction and Absorption

Quarterly

4Q17 3Q17 YTD Avg



AbsorbedCon/Abs


Con/AbsRatio

Austin 0 -43,000 0.0 15,000 5,000 3.0 8,800 5,800 1.5

Southwest 295,000 200,000 1.5 133,000 -74,000 -1.8 485,500 347,000 1.4Average over period ending: 12/31/17 12/31/17 12/31/17 09/30/17 09/30/17 09/30/17 12/31/17 12/31/17 12/31/17

Annualized

1 Year History 3 Year History 5 Year History



AbsorbedCon/Abs


Con/AbsRatio

Austin 35,000 23,000 1.5 208,000 277,000 0.8 243,000 295,000 0.8

Southwest 1,942,000 1,388,000 1.4 2,527,000 2,797,000 0.9 2,130,000 2,674,000 0.8Average over period ending: 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17 12/31/17




Section 28 - Occupancy at Completion

0

20

40

60

80

100

Occ

upan

cy (

%)

2011 2012 2013 2014 2015 2016 2017

Occupancy at Completion Comparisons

Austin Overall Occupancy Austin Occupancy at Completion Southwest Occupancy at Completion US Occupancy at Completion

Occupancy at Completion ComparisonsProperties Built in: 2011 2012 2013 2014 2015 2016 2017

Austin 56.5% 36.7% 76.4% 24.7% 65.3% 82.9% 66.7%Southwest 74.8% 85.0% 92.4% 90.9% 71.5% 39.4% 38.0%United States 86.6% 62.3% 76.3% 61.9% 80.5% 74.7% 64.6%*Occupation at completion is calculated for all properties completed during each individual calendar year

Section 29 - Stabilization Data

0 1 2 3 4 5 6 7 80.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2011 2012 2013 2014 2015 2016 2017 Long Term Metro Vacancy Average

New Construction Quarters to Stabilization

Quarters After Completion

Vac

ancy

(%

)

%

Stabilization Data

Construction Year: 2011 2012 2013 2014 2015 2016 2017 YTD

No.of Properties Tracked 1 1 4 4 9 6 1

Properties Stabilized 0-4 Quarters After Completion 1 1 4 4 9 6 1Properties Stabilized 5-8 Quarters After Completion 0 0 0 0 0 0 0Properties Stabilized 9-12 Quarters After Completion 0 0 0 0 0 0 0Properties Stabilized 13+ Quarters After Completion 0 0 0 0 0 0 0Properties That Have Not Yet Stabilized 0 0 0 0 0 0 0

Stabilization is reached when the average vacancy of the properties built in any given year equals or is less than the metro's average overall vacancy for the last five years. "0" in theQuarters After Completion chart above represents the vacancy at completion.




Section 30 - Metro Area Map: Austin

Completed Projects Under Construction Planned/Proposed




Section 31 - New Construction Listing

No. Property Name and Address Date AsOf Secondary Type County Size (Sq Ft) No. Bldgs Floors Est.

GroundbreakEst.

Completion Status

Submarket: Cent./Downtown Aust.

1

PAD H @QUINLAN CROSSINGRANCH RD 620 @ QUINLAN CROSSINGAUSTIN, TX 78732

Developer Name: CRAIG WYSEDeveloper Phone: (925) 738 - 1400Developer Company: PROPERTYDEVELOPMENT CENTERS

10-18-2016 Freestanding Travis 5,000 1 Proposed

2

PAD J @ QUINLAN CROSSING5145 N FM 620 AUSTIN, TX 78732

Developer Name: CRAIG WYSEDeveloper Phone: (925) 738 - 1400Developer Company: PROPERTYDEVELOPMENT CENTERS

10-18-2016 Freestanding Travis 2,822 1 Proposed

3

Austin Oaks Redevelopment RetailSPICEWOOD SPRINGS RD @ N MOPAC EXPYAUSTIN, TX 78759

Developer Name: CandiDeveloper Phone: (214) 740 - 2300Developer Company: Spire Realty Group

08-01-2017 Mixed Use Travis 100,000 1 Planned

4 MILLENIUM RAINEY91 Rainey Street Austin, TX 78701

06-01-2016 Mixed Use Travis 250,000 6/2016 Complete

5

HIGHPOINTE VILLAGE6701 N. FM 620 AUSTIN, TX 78750

Developer Name: WAY ATMADJEDeveloper Phone: (512) 343 - 0766Developer Company: WAY CONSULTING

05-17-2017 Neighborhood Travis 48,625 1 12 Planned

6

SIENNA CENTERBOGGY FORD RD @ LOHMAN FORD RDLEANDER, TX 78645

Developer Name: JennyDeveloper Phone: (512) 694 - 9400Developer Company: Pohl, Brown andAssociates

05-16-2017 Neighborhood Travis 50,500 2 Planned

7

Volente Retail Center11907 ANDERSON MILL RD AUSTIN, TX 78726

Developer Name: Eric JohnsonDeveloper Phone: (512) 250 - 5356Developer Company: Johnson Four Corners, Ltd.






GroundbreakEst.

Completion Status

8

Block 87 Mixed Use RetailEast 7th Street Austin, TX 78701

Developer Phone: (512) 600 - 7900Developer Company: Cielo Property Group

04-24-2017 Mixed Use Travis 40,000 Planned

9 THE DOMAIN (EXP)11400 BURNET RD AUSTIN, TX 73301

03-25-2016 Regional Travis 171,000 9/2016 Complete

10

LAMAR BLVD @ 9th STREETLAMAR BLVD @ 9TH ST AUSTIN, TX 78703

Developer Name: CindyDeveloper Phone: (512) 472 - 7774Developer Company: SCHLOSSERDEVELOPMENT CORP

02-17-2017 Neighborhood Travis 15,000 Planned

11

Four Points Retail DevelopmentVista Parke Dr and RR 620 Austin, TX 78726

Owner Name: Cory PrestonOwner Phone: (210) 938 - 8000Owner Company: HEB Grocery Company

02-13-2017 Community Travis 300,000 1 1 Planned

12 The Park at Bee Caves3822-3898 South Drive Austin, TX 78759


13 North Campus Development RetailAirport Blvd & E 53 1/2 St Austin, TX 78751


Submarket: Rnd. Rk./Wllmsn. Co.

14

CROSSING AT PALM VALLEY2000-2004 E PALM VALLEY BLVD ROUNDROCK, TX 78665

Developer Name: GRAHAM CARTERDeveloper Phone: (512) 482 - 0094

11-14-2017 Community Williamson 113,250 3 Proposed

15 Spicewood Centre Ph 2 Retail13642 N Highway 183 Austin, TX 78750

11-06-2017 Freestanding Williamson 12,000 1 9/2018 Planned





GroundbreakEst.

Completion Status

16

CRYSTAL FALLS TOWN CENTERLAKELINE BLVD @ CRYSTAL FALLS PKWYLEANDER, TX 78641

Developer Name: PaulDeveloper Phone: (214) 561 - 8800Developer Company: CYPRESS EQUITIES

11-04-2016 Neighborhood Williamson 93,642 5 1 9/2015 11/2016 Complete

17

The Summit at Rivery Park1500 RIVERY BLVD GEORGETOWN, TX 78628

Developer Name: LYNNDeveloper Phone: (512) 931 - 7774Developer Company: NOVAK BROTHERS

10-05-2017 Mixed Use Williamson 110,000 1 1 10/2017 Complete

18

Presidio in Cedar Park-Retail12100 W PARMER LN CEDAR PARK, TX 78613

Developer Name: Jason ArechigaDeveloper Phone: (210) 487 - 7878Developer Company: NRP Group

10-05-2017 Neighborhood Williamson 24,400 2 1 Planned

19

H-E-B Plus! Gattis School Shopping Center5000 Gattis School Road Hutto, TX 78634

Developer Phone: (512) 477 - 1212Developer Company: BARSHOP & OLES

09-15-2017 Community Williamson 150,548 2 1 11/2016 Complete

20

Star Ranch Station4750 Gattis School Road Hutto, TX 78634

Developer Name: Drew SmithDeveloper Phone: (512) 474 - 5557Developer Company: Retail Solutions

09-07-2017 Neighborhood Travis 15,000 1 1 7/2017 9/2017 Complete

21 Shops at Lakeline115 S Lakeline Blvd Cedar Park, TX 78613

09-07-2016 Neighborhood Williamson 23,634 4/2015 7/2016 Complete

22

Shops at Lakeline Village Phase 21850 S LAKELINE BLVD CEDAR PARK, TX78613

Developer Name: GinaDeveloper Phone: (512) 335 - 5577Developer Company: POHL, BROWN &ASSOCIATES

08-01-2017 Freestanding Williamson 7,106 1 Planned

23

HUTTO TOWN CENTER PH IICOUNTY ROAD 119 @ STATE HWY 79HUTTO, TX 78634

Developer Name: DianeDeveloper Phone: (281) 477 - 4300Developer Company: NewQuest Properties

07-31-2017 Community Williamson 128,284 Planned





GroundbreakEst.

Completion Status

24

Scottsdale Crossing Commerce 2Highway 183A & Scottsdale Dr Cedar Park, TX78613

Leasing Agent Name: Tom PardeeLeasing Agent Phone: (512) 587 - 8919Leasing Agent Company: TGI REAL ESTATE

07-12-2017 Neighborhood Williamson 11,750 1 Proposed

25



07-12-2017 Mixed Use Williamson 10,500 1 Proposed

26



07-12-2017 Neighborhood Williamson 7,200 1 Proposed

27

Scottsdale Crossing Technology Center 4Scottsdale Dr & TX-183A Cedar Park, TX 78613

Developer Name: Tom PardeeDeveloper Phone: (512) 587 - 8919Developer Company: TIG REAL ESTATE

07-12-2017 Mixed Use Williamson 5,000 1 Proposed

28 THE SHOPS AT GREENLAWN3200 Greenlawn Blvd Round Rock, TX 78664

07-12-2016 Neighborhood Travis 23,196 4/2016 Complete

29

WATER OAK AT SAN GABRIEL RETAILWATER OAK PKWY @ FM 2243GEORGETOWN, TX 78628

Leasing Agent Name: GrichenLeasing Agent Phone: (210) 402 - 6363Leasing Agent Company: DRAKE COMMERCIAL

06-19-2017 Mixed Use Williamson 260,000 1 Planned

30

Cypress Creek Plaza (EXP)1310 CYPRESS CREEK RD CEDAR PARK, TX78613

Developer Name: HanahDeveloper Phone: (512) 368 - 7021Developer Company: Central SouthwestDevelopment


31

OLD MILL CENTERLAKELINE BLVD @ OLD MILL RD CEDARPARK, TX 78613

Developer Name: LeeDeveloper Phone: (512) 335 - 5577Developer Company: POHL, BROWN &ASSOCIATES

05-17-2017 Neighborhood Williamson 28,600 Planned





GroundbreakEst.

Completion Status

32

LIBERTY CENTERCYPRESS CREEK RD @ LIBERTY OAKS BLVDCEDAR PARK, TX 78613

Developer Name: LeeDeveloper Phone: (512) 335 - 5577Developer Company: POHL, BROWN &ASSOCIATES

05-17-2017 Neighborhood Williamson 60,450 Planned

33

LONE STAR PLAZAHWY 183 @ CALDWELL DR AUSTIN, TX 78750

Developer Name: GINADeveloper Phone: (512) 335 - 5577Developer Company: POHL, BROWN &ASSOCIATES

05-17-2017 Neighborhood Williamson 79,150 3 1 Planned

34

Round Rock Crossing Ph 3LOUIS HENNA BLVD @ I-35 N AUSTIN, TX78664

Leasing Agent Name: BRETT MAZELeasing Agent Phone: (512) 482 - 0094

05-10-2017 Power Center Williamson 90,000 3 1 Planned

35

RANCH AT BRUSHY CREEK (RETAIL)PARMER LN @ BRUSHY CREEK RD CEDARPARK, TX 78613

Developer Name: Mark CarterDeveloper Phone: (214) 217 - 4300Developer Company: MADISON PARTNERS

04-17-2017 Mixed Use Williamson 200,000 Proposed

36

THE PARKE183 TOLL RD CEDAR PARK, TX 78613

Developer Name: CHARLIE NORTHINGTONDeveloper Phone: (512) 682 - 5590

04-13-2017 Power Center Williamson 400,000 7 1 4/2016 4/2017 Complete

37 Holt Caterpillar2101 AIRPORT RD GEORGETOWN, TX 78628

03-31-2017 Neighborhood Williamson 60,000 1 Planned

38

CHANDLER CREEK311 University Blvd Round Rock, TX 78665

Leasing Agent Name: Tim AllenLeasing Agent Phone: (512) 368-7179Leasing Agent Company: JLL

02-05-2016 Neighborhood Williamson 12,260 2/2016 Complete

39

Crystal Falls Center Retail BuildingLAKELINE BLVD @ CRYSTAL FALLS PKWYLEANDER, TX 78641

Developer Name: Corey PittsDeveloper Phone: (281) 477 - 4300Developer Company: NewQuest Properties

01-26-2017 Neighborhood Williamson 10,000 1 Planned





GroundbreakEst.

Completion Status

40

Oak Meadows Marketplace5721 Williams Dr Georgetown, TX 78633

Developer Name: Tom RyanDeveloper Phone: (214) 561 - 8800Developer Company: CYPRESS EQUITIES


Submarket: South Austin

41

Covered Bridge Village8701 W HWY 71 AUSTIN, TX 78735

Developer Name: Bill SchultzDeveloper Phone: (512) 266 - 4749Developer Company: REAL ESTATEINVESTMENTS

11-10-2017 Mixed Use Travis 24,300 3 2 7/2015 11/2017 Complete

42Bella FortunaBradshaw Road & PLeasant Valley Rd ExtensionAustin, TX 78747


43

Gray Rock RidgeS MO PAC BLVD @ STATE HWY 45 AUSTIN,TX 78739

Developer Name: CINDY KOHLERDeveloper Phone: (512) 481 - 0404Developer Company: WALTERS SOUTHWEST

10-09-2017 Mixed Use Travis 490,000 Planned

44

South Congress Station8900 S Congress Ave Austin, TX 78745

Developer Name: Guy GordonDeveloper Phone: (214) 259 - 7000Developer Company: Encore Enterprises


45

RIVERBEND LANDINGHWY 71 @ STATE HWY 130 AUSTIN, TX 78617

Developer Name: JenniferDeveloper Phone: (949) 276 - 8300Developer Company: GOVEIA COMMERCIALREAL ESTATE

07-31-2017 Power Center Travis 320,600 Planned

46 SOUTH LAMAR PLAZA1100 South Lamar Boulevard Austin, TX 78704

07-13-2016 Mixed Use Travis 90,000 4/2013 4/2016 Complete

47

GATEWAY TO FALCONHEAD RETAIL3400 RANCH RD 620 S AUSTIN, TX 78739

Developer Name: JOHN ELGESDeveloper Phone: (512) 391 - 0718Developer Company: ST CROIX CAPITAL

06-19-2017 Mixed Use Travis 46,000 7 1 Planned





GroundbreakEst.

Completion Status

48

REVIVAL SQUARE PH I13308 HIGHWAY 71 BEE CAVE, TX 78738

Owner Name: REF NAMEOwner Phone: (512) 263 - 4182Owner Company: REVIVAL SWUARE


49

MARKET AT SLAUGHTER PH II1807 SLAUGHTER LN AUSTIN, TX 78745

Leasing Agent Name: PAULETTELeasing Agent Phone: (512) 681 - 1000Leasing Agent Company: STONECRESTINVESTMENTS


50

LANTANA PLACESW WILLIAM CANNON DR @ SOUTHWESTPKWY AUSTIN, TX 78735

Developer Name: John AndrewsDeveloper Phone: (512) 478 - 5788Developer Company: STRATUS PROPERTIES


51 Lantana Place Mixed Use~Retail7415 SOUTHWEST PKWY AUSTIN, TX 78735


Submarket: Not in a Reis submarket

52

KYLE CROSSINGSW FM 1626 @ I-35 KYLE, TX 78640

Developer Name: PAUL SHEPPARDDeveloper Phone: (720) 204 - 4488

10-22-2014 Mixed Use Hays 743,415 6/2020UnderConstr.

53

PGI Mixed Use RetailYARRINGTON RD @ POST RD Kyle, TX 78666

Developer Phone: (760) 929 - 1200Developer Company: PGI Investments

10-16-2017 Power Center Hays 133,000 Planned

54

WONDER WORLD RETAIL243 WONDER WORLD DR SAN MARCOS, TX78666

Owner Name: BRETT GISSLEROwner Phone: (512) 708 - 0200Owner Company: AMS COMMERCIAL REALESTATE

10-05-2016 Neighborhood Hays 10,000 1 1 4/2016 10/2016 Complete

55

THE SHOPPES AT GARLIC CREEK PH IIS FM 1626 @ FM 967 BUDA, TX 78610

Developer Name: Sean MurphyDeveloper Phone: (512) 441 - 8888Developer Company: CLD Realty

09-26-2017 Community Hays 103,560 3/2018 Planned





GroundbreakEst.

Completion Status

56

Stone Hill Town CenterSTATE HWY 130 @ STATE HWY 45PFLUGERVILLE, TX 78660

Developer Name: JudyDeveloper Phone: (281) 477 - 4300Developer Company: NewQuest Properties

09-07-2017 Power Center Travis 952,174 26 1 9/2017 Complete

57

Stone Hill Town Center Phase IITexas 130 & State Highway 45 Pflugerville, TX78660

Developer Name: JudyDeveloper Phone: (281) 477 - 4300Developer Company: NewQuest Properties

09-07-2017 Power Center Travis 221,728 17 1 Planned

58

The Pecan District Future PhaseW Pecan St & Heatherwilde Blvd Pflugerville, TX78660

Developer Name: MarkDeveloper Phone: (512) 469 - 5950Developer Company: Galindo Group

08-31-2017 Mixed Use Travis 84,000 Proposed

59

PECAN CROSSINGSEC HWY 71 @ HWY 304 BASTROP, TX 78602

Developer Name: ROBERT LEFSINGDeveloper Phone: (512) 785 - 0440Developer Company: FIRST REPUBLIC

08-30-2017 Power Center Bastrop 700,000 1 Planned

60SHOPS AT 685FM-685 & E Pflugerville Pkwy Pflugerville, TX78660

06-02-2016 Neighborhood Travis 29,075 5/2016 Complete

61 DORMAN RETAIL CENTER4640 FM-1626 S Kyle, TX 78640

06-01-2016 Neighborhood Hays 7,200 6/2015 6/2016 Complete

62 PALM SQUARE SHOPPING CENTER6004 FM-969 Austin, TX 78724

05-31-2016 Neighborhood Travis 50,000 12/2014 6/2016 Complete

63

PARMER COMMONSE PARMER LN @ HARRIS BRANCH PKWYAUSTIN, TX 78754

Owner Phone: (512) 346 - 5180Owner Company: Reoc Austin

05-16-2017 Community Travis 175,000 Planned





GroundbreakEst.

Completion Status

64

LAS ENTRADASUS HWY 290 @ GREGG MANOR RD MANOR,TX 78653

Developer Name: KimDeveloper Phone: (512) 327 - 7415Developer Company: DWYER REALTY

05-03-2017 Power Center Travis 1,000,000 Planned

65

INDIAN HILLSN FM 973 @ DECKER LAKE RD/STATE HAUSTIN, TX 78724

Developer Name: LARRY BEARDDeveloper Phone: (512) 276 - 7200Developer Company: INDIAN HILLSINVESTMENTS LTD

03-23-2017 Community Travis 375,000 Planned

66

PARMER VILLAGE800 E PARMER LN AUSTIN, TX 78753

Developer Name: Winn ScottDeveloper Phone: (512) 474 - 5557Developer Company: Retail Solutions

02-01-2017 Neighborhood Travis 107,000 6 Proposed

67

Windmill Center Commercial Development21511 South Interstate 35 Frontage Road Kyle,TX 78640

Leasing Agent Name: Hampton FriedmanLeasing Agent Phone: (504) 259 - 7377Leasing Agent Company: Longbow Real Estate

01-17-2018 Neighborhood Hays 8,409 1 1 1/2017 1/2018 Complete

68

Costco Wholesale PflugervilleKelly Ln & TX-130-TOLL Pflugerville, TX 78660

Owner Name: Sandy FryOwner Phone: (425) 313 - 8100Owner Company: COSTCO WHOLESALE

01-02-2018 Freestanding Travis 154,712 1 1 1/2018 7/2018UnderConstr.


Sales Trend

Sales TrendRetail - 4Q 2017Prepared By Reis, Inc.



4Q 2017 Metro Statistics Metro Statistics - 12 Month RollingMean Median 25th Percentile Mean Median 75th Percentile

Cap Rate 4.6% 4.6% 4.6% 6.5% 4.9% 6.0%Total Size (SF) 13,919 14,250 10,800 78,803 17,500 44,050Sale Price $4,188,094 $2,078,125 $3,368,750 $10,650,169 $5,375,000 $6,582,500Price/SF (Area Purchased) $301 $297 $182 $317 $280 $473Number of Floors 1 1 1 1 1 1Year Built 2000 1998 1991 2005 2005 2012

Submarkets1. Central/Downtown Austin

2. South Austin

4. Round Rock/Williamson County

Most Recent Transactions

City, State SubmarketYearBuilt Type

Price Per SqFt Range Sale Date

Reis SalesComparables

Number

1. Austin, TX Cent./Downtown Aust. 1994 Freestanding Retail Bldg. n/a Q1 2018 37568292. Marble Falls, TX Outside Delineated Submarkets 1984 Freestanding Retail Bldg. n/a Q4 2017 37490533. Pflugerville, TX Outside Delineated Submarkets 2016 Gas Station/Repair Garage n/a Q4 2017 37526514. Canyon Lake, TX Outside Delineated Submarkets 2011 Freestanding Retail Bldg. n/a Q4 2017 37463655. Austin, TX Cent./Downtown Aust. 1975 n/a Q4 2017 37570516. Austin, TX Cent./Downtown Aust. 1878 Mixed-Use/Downtown/Other n/a Q4 2017 37413807. Austin, TX Cent./Downtown Aust. 1980 Neighborhood Ctr. n/a Q4 2017 37276158. Austin, TX Cent./Downtown Aust. 1970 n/a Q4 2017 37201549. Austin, TX Cent./Downtown Aust. 1958 Bank n/a Q4 2017 370807610. Austin, TX Outside Delineated Submarkets 1983 Neighborhood Ctr. n/a Q4 2017 370799711. Austin, TX Cent./Downtown Aust. 1931 Mixed-Use/Downtown/Other n/a Q4 2017 373605612. Austin, TX South Austin 1972 n/a Q4 2017 370797313. Georgetown, TX Rnd. Rk./Wllmsn. Co. 2009 Freestanding Retail Bldg. n/a Q4 2017 371366114. Austin, TX Cent./Downtown Aust. 1960 Bank n/a Q4 2017 370193215. Austin, TX Cent./Downtown Aust. 2000 n/a Q4 2017 370187616. Hutto, TX Rnd. Rk./Wllmsn. Co. 2006 Gas Station/Repair Garage n/a Q4 2017 370264717. San Marcos, TX Outside Delineated Submarkets 1986 Freestanding Retail Bldg. n/a Q4 2017 369599718. Austin, TX Outside Delineated Submarkets 2002 n/a Q4 2017 369551519. Austin, TX South Austin 1979 Gas Station/Repair Garage n/a Q4 2017 368700720. Round Rock, TX Rnd. Rk./Wllmsn. Co. 2016 Neighborhood Ctr. n/a Q4 2017 3697305

For details on the transactions listed above, click on the Sales Comparables number link. For historical transactions ortransactions in another Reis market, please go to the Sales Comparables section of the Reis website. www.Reis.com

https://se.reis.com/comps/index.cfm?event=comps.getSCByRecordID&scid=3756829























Property Location and Physical Characteristics

Property Name Abels North Property Type

Address 4001 W Parmer Ln Bldg. Area/Area Purchased (SF) 24,550GLA / 24,550GLA

City Austin Anchor/Nonanchor Space (SF) 24,550 / 0

State/ZIP/County TX / 78727 / Travis No. of Bldgs./Floors 1 / 1

Metro (Submarket) Austin (Cent./Downtown Aust.) Year Built/Renovated 2000 / --

Comments Property is a event center.

Sale Details and Analysis

Sale Date 20 Oct 2017 Reis Cap Rate Analysis ProformaSale Price $11,956,250 EST All per square foot figures are on an annual basis

Sale Price PSF $487 Total Rentable Area Assumption --

Vacancy at Sale 0.0% (excludes sublease) Potential Rent Revenue --Vacancy Loss/Rate --

Seller 1. Abels on Parmer LLC / 2815 Manor Rd, Austin, TX 78722 Effective Rent Revenue --

Expense Reimbursements --

Free Rent Concessions --Credit Loss --

Buyer 1. 4001 Creative Offices LLC / 1616 W 5th St, Austin, TX 78703 Additional Income --

Effective Gross Revenue --Operating Expenses --

Capital Reserve --Net Operating Income --

Comments Sales price is undisclosed. Est Going-in Cap Rate/EGIM -- / --

12-Month Rolling Metro Cap Rate 5.2% [Q4 2017]Reported Cap Rate, This Sale None

Additional Details When Available

Seller's Broker (Lstg)Doug Rauls, Colliers International, 111 CongressAve, Ste 750, Austin, TX 78701, (512) 539-3006

Parking Spaces 369

Buyer's Broker Key Tenants Abels North 24550 SF

Other Broker

Interest Purchased

Lot Size 367,864 SF / 8.445 Acres

Parcels Number 479418

Deed Reference 2017168827

Time on Market

Financing Details Frost Bank provided a 5 year $9,565,000 loan.

Other:





Property Name Caliber Collision Property Type Gas Station/Repair Garage

Address 1312 Farm to Market 685 Bldg. Area/Area Purchased (SF) 16,352GLA / 16,352GLA

City Pflugerville Anchor/Nonanchor Space (SF) 16,352 / 0

State/ZIP/County TX / 78660 / Travis No. of Bldgs./Floors 2 / 1

Metro (Submarket) Austin (Outside Delineated Areas) Year Built/Renovated 2016 / --

Comments Property is a repair garage.


Sale Date 27 Dec 2017 Reis Cap Rate Analysis ProformaSale Price $3,937,500 EST All per square foot figures are on an annual basis


Vacancy at Sale 0.0% (excludes sublease) Potential Rent Revenue --Vacancy Loss/Rate --

Seller 1. Cross Development / (214) 614-8252 / 4336 Marsh Ridge Rd,Carrollton, TX 750102. Cross Development CC Pflugerville LLC

Effective Rent Revenue --



Buyer 1. Zaki Family Partnership LP / 1424 La Vereda Ln, Santa Barbara,CA 93108

Additional Income --






Seller's Broker Parking Spaces

Buyer's Broker Key Tenants Caliber Collision 16352 SF

Other Broker

Interest Purchased


Parcels Number 898566


Time on Market

Financing Details Symetra Life Insurance Company provided a 20 year $3,150,000 loan.

Other:





Property Name Property Type Neighborhood Ctr.

Address 2200-2250 E Palm Valley Blvd Bldg. Area/Area Purchased (SF) 22,125GLA / 22,125GLA

City Round Rock Anchor/Nonanchor Space (SF) 0 / 22,125

State/ZIP/County TX / 78665 / Williamson No. of Bldgs./Floors 2 / 1

Metro (Submarket) Austin (Rnd. Rk./Wllmsn. Co.) Year Built/Renovated 2016 / --

Comments


Sale Date 02 Oct 2017 Reis Cap Rate Analysis ProformaSale Price $10,556,250 EST All per square foot figures are on an annual basis


Vacancy at Sale Potential Rent Revenue --Vacancy Loss/Rate --

Seller 1. CSW Development / (512) 861-3550 / 1703 W 5th St, Ste 850,Austin, TX 787032. CSW Palm Valley LLC

Effective Rent Revenue --



Buyer 1. Shops at Palm Valley LLC / PO Box 5156, Norman, OK 73070 Additional Income --






Seller's Broker Parking Spaces

Buyer's Broker Key Tenants Mama Fu's Asian HousMattress 1 OneGNCCookie CuttersATI Physical Therapy

Other Broker

Interest Purchased


Parcels Numbers R550361, R550360


Time on Market

Financing Details First Liberty Bank provided a $8,445,000 loan.

Other:


Power Center Report

Power Center ReportRetail - 4th Quarter 2017Prepared By Reis, Inc.



Section 36 - Current Rent Snapshot

2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4

0.5

1.0

1.5

2.0

2.5

3.0

Power Center Community Neighborhood

Austin Non-Anchor Asking Rent Growth

2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4

0.5

1.0

1.5

2.0

2.5

3.0

Austin Southwest United States

Power Center Non-Anchor Asking Rent Growth

Austin Non-Anchor Asking Rent Comparisons Power Center Non-Anchor Asking Rent Comparisons

4Q 2017 4Q 2016 Annual Rent Growth

Power Centers $29.62 $27.69 7.0%

Neighborhood Centers $21.76 $21.17 2.8%

Community Centers $25.79 $24.92 3.5%

4Q 2017 4Q 2016 Annual Rent Growth

Austin $29.62 $27.69 7.0%

Southwest Region $27.73 $26.92 3.0%

United States $27.77 $27.13 2.4%

Section 37 - Current Vacancy Snapshot

2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4

4.0

4.5

5.0

5.5

6.0

6.5

Power Center Community Neighborhood

Austin Vacancy Rate by Center Type

2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4

5.0

5.5

6.0

6.5


Power Center Vacancy Rate by Region

Austin Vacancy Rate by Center Type Power Center Vacancy Rate Comparisons

4Q 2017 4Q 2016 Annual Vac. Change

Power Centers 6.5% 6.4% 0.1%

Community 4.2% 4.6% - 0.4%

Neighborhood 6.5% 6.1% 0.4%

4Q 2017 4Q 2016 Annual Vac. Change

Austin 6.5% 6.4% 0.1%

Southwest Region 4.8% 4.9% - 0.1%

United States 6.2% 5.9% 0.3%




Section 38 - New Construction

14.4 %

25.6 %

11.6 %

2.2 %

46.2 %

Austin New Construction - 2017 and Later

CommunityMixed UseNeighborhoodOtherPower CenterRegional

Completed SF SF Under Construction Totals Planned Proposed Totals

2017 YTD 2018 2018 2019 and Later 2017 and LaterNeighborhood 34,730 85,459 0 0 120,189 716,743 125,950 842,693

Community 0 0 0 0 0 1,081,844 113,250 1,195,094Power Center 1,352,174 0 0 0 1,352,174 2,465,328 0 2,465,328

Regional 0 0 0 0 0 0 0 0Mixed Use 134,300 0 0 743,415 877,715 936,000 299,500 1,235,500

Other 0 0 154,712 0 154,712 19,106 7,822 26,928Totals 1,521,204 85,459 154,712 743,415 2,504,790 5,219,021 546,522 5,765,543

As of 23-Jan-2018Includes all recently completed, under construction, planned, and proposed properties from the table above. Note that some verified listings for planned and proposed properties do not yet have afirm completion date.

Section 39 - Metro Power Center and Regional Mall Projects

Type Property Name Street Address City County Year Size Status

P LAS ENTRADAS US HWY 290 @ GREGG MANOR RD MANOR Travis 1,000,000 Planned

P Stone Hill Town Center STATE HWY 130 @ STATE HWY 45 PFLUGERVILLE Travis 2017 952,174 Complete

P PECAN CROSSING SEC HWY 71 @ HWY 304 BASTROP Bastrop 700,000 Planned

P THE PARKE 183 TOLL RD CEDAR PARK Williamson 2017 400,000 Complete

P RIVERBEND LANDING HWY 71 @ STATE HWY 130 AUSTIN Travis 320,600 Planned

P Stone Hill Town Center Phase II Texas 130 & State Highway 45 Pflugerville Travis 221,728 Planned

R THE DOMAIN (EXP) 11400 BURNET RD AUSTIN Travis 2016 171,000 Complete

P PGI Mixed Use Retail YARRINGTON RD @ POST RD Kyle Hays 133,000 Planned

P Round Rock Crossing Ph 3 LOUIS HENNA BLVD @ I-35 N AUSTIN Williamson 90,000 Planned

Types: R=Regional/Super Regional Malls P=Power Centers




Section 40 - Cap Rate Trending

Austin Retail Cap RatesMetro Statistics - 12 Month Rolling (All Retail Types)

Mean MedianCap Rate 6.5% 4.9%Sale Price $10,650,169 $5,375,000Price/SF (Area Purchased) $317 $280

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

Community CtrFreestanding

Neighborhood CtrRegl/Super Regl Mall

Power Center

US Retail Average Cap Rates by Center Type

US Average Transaction Data12 Month Rolling

Power Centers Regional MallsCap Rate 7.7% 7.5%Sale Price $31,569,084 $34,986,640Price/SF (Area Purchased) $143 $77

Section 41 - Recent Metro Area Regional Mall Sales

Date Type Property Name CityArea

Purchased ofTotal (SF)

Price Price/SF Seller Buyer

Jul-17 P 1890 Ranch (portion) Cedar Park 6500 / 820821 $3,185,000 $490.001890 Lot 1A-3 Ltd/Endeavor RealEstate Group

Spoonian LLC

Jun-17 P Anna Plaza (portion) Austin 55000 / 382000 $5,375,000 $97.73VS Anna Plaza LLC/ValstonePartners

MF Austin Ridge LLC/MFB RealEstate Services/MFJ R

Jun-16 P Parkline Shopping Center Austin 311600 / 311600 $15,300,000 $49.10 11301 Lakeline LP Grand Parkline LLC

May-16 P SouthPark Meadows Phase I and II Austin 921141 / 1254090 $271,000,000 $294.20Riocan Austin SouthparkMeadow/RioCan Real Estate

Blackstone Group LP/BRE RCSouthpark II TX LP

May-16 P Southpark Meadows Austin 1254090 / 1254090 $271,000,000 $216.09 RioCan/RioCan Austin SouthparkBRE RC Southpark II TX LP &USA/BRE RC Southpark I

Nov-14 P Anna Plaza (portion) Austin 55000 / 382000 $5,163,317 $93.88 C3 Anna Plaza LLCVS Anna Plaza LLC/ValstonePartners

Jun-14 P Parkline Shopping Center (portion) Austin 28000 / 311600 $10,593,750 $378.35 183 Parkline Shopping Center LP 11301 Lakeline LP

Types: R=Regional/Super Regional Malls P=Power Centers




Section 42 - Metro Area Power Center and Regional Malls: Austin

Recently completed, under construction, planned or proposed Existing center




Section 43 - Metro Area Power Center and Regional Malls

Id Name City YearBuilt Size Type Id Name City Year

Built Size Type

1 RIVERBEND LANDING AUSTIN 320,600 P 17 GATEWAY CENTER AUSTIN 1994 240,000 P

2 THE PARKE CEDAR PARK 2017 400,000 P 18 ANNA PLAZA AUSTIN 1997 382,000 P

3 Stone Hill Town Center PFLUGERVILLE 2017 952,174 P 19 HANCOCK CENTER AUSTIN 1964 410,438 R

4 PGI Mixed Use Retail Kyle 133,000 P 20 LAKELINE PLAZA CEDAR PARK 1998 349,116 P

5 Stone Hill Town Center Phase II Pflugerville 221,728 P 21 LAKELINE MALL,LAKELINE PLAZA CEDAR PARK 1998 1,446,922 R

6 Round Rock Crossing Ph 3 AUSTIN 90,000 P 22 BOARDWALK SHOPPING CENTER ROUND ROCK 1995 530,000 P

7 THE DOMAIN (EXP) AUSTIN 2016 171,000 R 23 LA FRONTERA VILLAGE ROUND ROCK 2000 800,162 P

8 LAS ENTRADAS MANOR 1,000,000 P 24 PARKLINE SHOPPING CENTER AUSTIN 1999 311,600 P

9 PECAN CROSSING BASTROP 700,000 P 25 WALDEN PARK SHOPPING CENTER CEDAR PARK 2004 299,106 P

10 BARTON CREEK SQUARE (MALL) Austin 1982 1,428,987 R 26 SOUTHPARK MEADOWS AUSTIN 2005 1,254,090 P

11 THE PARKE CEDAR PARK 2017 400,000 P 27 WOLF RANCH TOWN CENTER GEORGETOWN 2005 614,012 P

12 GATEWAY SQUARE AUSTIN 1993 123,248 P 28 THE DOMAIN AUSTIN 2007 1,211,101 R

13 LAKELINE MALL CEDAR PARK 1995 1,097,806 R 29 SHOPS AT THE GALLERIA BEE CAVE 2007 583,000 P

14 NORTHCROSS MALL AUSTIN 1975 305,000 R 30 1890 RANCH SHOPPING CENTER CEDAR PARK 2007 820,821 P

15 SUNSET VALLEY MARKET FAIR AUSTIN 1993 213,768 P 31 GATEWAY AT LEANDER PH I LEANDER 2008 362,000 P

16 PARMER CROSSING AUSTIN 1992 168,112 P 32 SUNSET VALLEY HOMESTEAD AUSTIN 1990 147,841 P

Type R: Regional/Super Regional malls P: Power Centers

Numbers correspond to listings on map

Section 44 - Economic and Demographic Data

2011 2012 2013 2014 2015 2016

-2.0

0.0

2.0

4.0

6.0

8.0


Household Annual Income Growth Trend Comparisons

2011 2012 2013 2014 2015 2016

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0


Total Annual Employment Growth Comparisons

Source: Economy.com Source: Economy.com




Section 45 - Economic and Demographic Trends

Year Qtr TotalEmployment

OfficeEmployment

IndustrialEmployment Households Population Household Avg.

Income

2007 Y 781,500 255,944 112,342 617,850 1,606,820 $102,510

2008 Y 791,400 263,131 110,704 636,350 1,659,010 $106,631

2009 Y 770,800 259,805 99,665 650,570 1,704,550 $101,831

2010 Y 795,370 266,697 104,358 663,340 1,753,390 $106,811

2011 Y 820,730 274,201 109,771 686,700 1,808,330 $114,070

2012 Y 860,600 287,373 113,294 709,220 1,858,110 $123,835

2013 Y 898,900 300,251 117,328 733,370 1,911,370 $121,348

2014 Y 936,370 313,415 117,996 755,710 1,970,160 $129,860

2015 Y 978,330 326,922 119,630 776,620 2,026,450 $132,711

2016 2 994,670 332,192 121,062 786,800 2,056,410 $132,048

2016 3 1,004,430 335,618 120,881 792,640 2,070,990 $132,161

2016 4 1,014,170 338,867 121,566 797,990 2,085,470 $131,560

2016 Y 1,014,170 338,867 121,566 797,990 2,085,470 $131,560

2017 1 1,018,830 338,490 122,239 804,030 2,099,940 $133,741

2017 2 1,023,200 340,344 123,692 810,260 2,114,970 $133,755

2017 3 1,025,600 339,259 125,029 816,280 2,129,940 $134,411

2017 4 1,030,870 341,215 125,714 822,510 2,144,760 $135,280

2017 Y 1,030,870 341,215 125,714 822,510 2,144,760 $135,280

2018 Y 1,052,560 348,068 126,957 847,180 2,204,620 $140,644

2019 Y 1,072,510 353,928 128,058 870,500 2,263,100 $145,770

2020 Y 1,087,170 358,342 128,710 893,640 2,321,470 $149,625

2021 Y 1,111,860 366,893 130,070 917,950 2,382,870 $154,598

2022 Y 1,137,270 375,918 131,458 942,650 2,446,130 $159,799

Source: Moody's Economy.com

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About Reis

Reis provides commercial real estate market information and analytical tools to real estate professionals through itsReis Services subsidiary. Reis Services, including its predecessors, was founded in 1980. Reis maintains a proprietarydatabase containing detailed information on commercial properties in metropolitan markets and neighborhoodsthroughout the U.S. The database contains information on apartment, office, retail, warehouse/distribution,flex/research & development, self storage, seniors housing properties and affordable housing, and is used by realestate investors, lenders and other professionals to make informed buying, selling and financing decisions. In addition,Reis data is used by debt and equity investors to assess, quantify and manage the risks of default and loss associatedwith individual mortgages, properties, portfolios and real estate backed securities. Reis currently provides itsinformation services to many of the nation's leading lending institutions, equity investors, brokers and appraisers.

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