This document contains multiple charts and graphs summarizing real estate market trends in Houston, Texas from 2001 to 2016. It shows that drilling permits and rig counts in Texas peaked in the late 2000s and declined sharply after 2014. Houston gained over 100,000 jobs annually from 2009 to 2013 but saw job losses in the energy sector after 2014. Office vacancy rates in Houston doubled from the early 1980s to late 1980s during a period of rapid office development. The industrial, retail, multifamily, and construction sectors are also analyzed with statistics on vacancies, rents, absorption, construction projects, and sales.

2. 2017
0
5,000
10,000
15,000
20,000
25,000
30,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Texas Drilling Permits
Energy

3. 2017
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Rotary Rig Count
North America Texas
Energy

4. 2017
“For every oilfield job created – two jobs are created in Houston”
- Dr. Ray Perryman, the Perryman Group - 2012
Jobs
-111
49,800
83,200
118,600
89,800
117,800
15,200 14,800
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2009 2010 2011 2012 2013 2014 2015 2016
Houston-Sugar Land-Baytown
Annual Job Growth

5. 2017
-5.0%
-1.7%
-7.5%
-2.0
-1.3%
-0.3%
0.8%
2.3%
1.6%
3.7%
-15,000 -10,000 -5,000 0 5,000 10,000 15,000 20,000
Construction
Professional and Business Services
Mining and Logging
Manufacturing
Other Services
Information
Financial Activities
Government
Trade, Transportation and Utilities
Education and Health Services
Houston 2016 Annual Job Growth
Energy
An estimated 80,000+ energy industry jobs lost after 2014
Jobs

6. 2017
Houston Office – 230.8M SF
Houston’s office inventory doubled between 1982-1988 causing
the vacancy rate to soar from 5.7% to 28.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
$0
$20
$40
$60
$80
$100
$120
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
YTD2016
Houston Office Vacancy WTI Crude Oil Annual Average Price
Avg. Annual WTI Crude Oil Price Houston Historical Office Vacancy
doubled
office
inventory

7. 2017
Office Big Picture – End of Q4
• Total Market – 230,820,000 SF
• Vacancy up 40 basis points Q3 – Q4
• Vacancy up 220 basis points Y-Y
• Negative net absorption decreased Q3 to
Q4 from -300,000 SF to -100,000 SF
• Available sublease space contracted
Q3 – Q4
• Construction pipeline increased marginally
Q3 – Q4 but decreased significantly Y-Y
• No deliveries in Q4

8. 2017
Houston Office – 230.8M SF
11.4M SF of Available Sublease Space
Q4 2016 available sublease space decreased for the first time since Q2 2014

9. 2017
Houston Office – 230.8M SF
Forecast
Vacancy rates should level off in 2017 and rents will remain flat

10. Confidential – Colliers International 2016
2017
Average Class A
Vacancy: 18.1%
Houston Office
Class A Submarket Vacancy
Q4 2016 Vacancy Rate
0.0% - 16.1%
16.2% - 18.1%
18.2% - 20.1%
20.2% - >

11. Confidential – Colliers International 2016
20172017
Average Cap Rate (Yield)Average Price ($) Per SF
Data Source:
Houston Office – 230.8M SF
Sales by Total ($) (mil)
0
1,000
2,000
3,000
4,000
5,000
6,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Rolling 12-mo. Total Quarterly Vol.
0
50
100
150
200
250
300
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States
3%
5%
7%
9%
11%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States

12. Confidential – Colliers International 2016
20172017
Industrial Big Picture –
End of Q4
• Total Market – 534,962,373 SF
• Vacancy low at 5.6% up 10 bps Q3 – Q4 ;
• Vacancy up 60 bps Y - Y
• 9.1M SF absorbed in 2016.
Daikin Applied America + 3.9M SF in the NW
corridor.
• Several large B2S distribution facilities under
construction –
FedEx 800,000 SF in the NW Outlier corridor
Two 500,000 SF buildings for Ikea in the ESE
Far corridor.

13. Confidential – Colliers International 2016
20172017
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
$5.00
$5.50
$6.00
$6.50
$7.00
$7.50
Houston Average Rent Houston Average Vacancy
Houston Industrial – 534.9M SF
Forecast

14. Confidential – Colliers International 2016
2017
Average Industrial
Vacancy: 5.6%
Houston Industrial
Submarket Vacancy
Q4 2016 Vacancy Rate
0.0% - 3.6%
3.7% - 5.6%
5.7% - 7.6%
7.7% - >

15. Confidential – Colliers International 2016
20172017
Sales by Total $ (mil)
Data Source:
Average Cap Rate (Yield)Average Price ($) Per SF
Houston Industrial – 534.9M SF
0
500
1,000
1,500
2,000
2,500
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Rolling 12-mo. Total Quarterly Vol.
0
20
40
60
80
100
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States
3%
5%
7%
9%
11%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States

16. Confidential – Colliers International 2016
20172017
Retail Big Picture – End of Q4
• Total Market – 281,610,093 SF
• Absorption down due to limited
(quality) available space
• 2.4M SF under construction, 75%
pre-leased
• Galleria upscale renovation
sparked by high-end tenants
moving to River Oaks District.

17. Confidential – Colliers International 2016
20172017
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Houston Average Vacancy
Houston Retail – 281.6M SF
Forecast

18. Confidential – Colliers International 2016
20172017
Retail Under Construction
2.4M SF
75% Pre-Leased
Grand Parkway Dominant
Largest Projects:
Fairfield Town Center
Simon
374,000 SF
100% Pre-Leased
Paragon Outlets
Lightstone
300,000 SF

19. Confidential – Colliers International 2016
2017
Active Larger (Anchor)
Tenants

20. Confidential – Colliers International 2016
20172017
Sales by Total $ (mil)
Average Cap Rate (Yield)Average Price ($) Per SF
Data Source:
Houston Retail – 281.6M SF
0
500
1,000
1,500
2,000
2,500
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Rolling 12-mo. Total Quarterly Vol.
0
50
100
150
200
250
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States
3%
5%
7%
9%
11%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States

21. Confidential – Colliers International 2016
20172017
Multifamily Projects
Under Construction
15,933 units in
61 projects
#1 - 2016
#3 - 2017

22. Confidential – Colliers International 2016
20172017
Multifamily Big Picture – End of Q4
Total Market – 626,027 Units
Absorption is down – Demand is stabilizing
Under Construction – Inner Loop Hot Spot
Developers pushing new projects to 2018

23. Confidential – Colliers International 2016
20172017
80.0%
85.0%
90.0%
95.0%
100.0%
$600
$700
$800
$900
$1,000
Houston Average Rent Houston Average Occupancy
Houston Multifamily – 626.0K
Units
Forecast

24. Confidential – Colliers International 2016
20172017
Data Source:
Average Cap Rate (Yield)Average Price ($) Per Unit
Sales by Total $ (mil)
Houston Multifamily
537.8K Units
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Rolling 12-mo. Total Quarterly Vol.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States
3%
5%
7%
9%
11%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14 Q4 '15 Q4 '16
Houston United States

25. Confidential – Colliers International 2016
20172017
• Consultants back log continues to dwindle.
• Some firms are branching out supporting markets outside Houston while
others are supplementing national account requirements with local
personnel.
• The general contracting community chasing new markets to supplement the
lack of new ground up projects as well as the tenant improvement sector.
• Sublease office tenant improvement market has limited significant
construction allowances.
• Residential construction continues to thrive in “premium” locations. Medical
and retail have not been adversely affected by the current downturn.
• The number of proposals received in individual trades has increased,
pointing to increased interest in upcoming work.
• Companies are looking to trim costs without affecting production. This has
not translated to any significant decrease in recognized cost.
• Long lead delivery times for critical path material and equipment continues to
drive completion dates.
Construction
Comments

26. Confidential – Colliers International 2016
2017
Office
Retail
Industrial
Apartment
Phase I
Recovery
Phase II
Expansion
Phase IV
Recession
Phase III
Oversupply
Rent
Increasing
Rents
Decreasing
Above Long-
Term Avg.
Occupancy
Below Long-Term
Avg. Occupancy
SELL
HOLD
BUY
Houston Commercial Real
Estate Market Cycle

27. Thank you, have a great 2017.