Houston Ranked in TOP 10“Best Cities for Job Growth”

HOUSTON MSA EMPLOYMENTJOBS GAINED

2013 82,0002012 97,7002011 75,800

HOUSTON UNEMPLOYMENTPERCENT (%)

04/2014 4.604/2013 5.904/2012 6.6

ENERGY: OIL & NATURAL GASWTI CRUDE OIL: PER BARREL

06/2014 $105.0906/2013 $95.8206/2012 $84.1006/2011 $105.93

NATURAL GAS: PER MMBtu

06/2014 $4.6106/2013 $3.9406/2012 $2.3706/2011 $4.65

IMPORT / EXPORT TRADEHAS AIR FREIGHT: IN MILLION LBS.

2013 914.22012 924.22011 934.22010 882.5

PHA TOTAL TONNAGE (short tons): IN MILLION TONS

2013 35.82012 35.12011 33.52010 28.8

HOUSTON MSA POPULATIONGROWTH (%)IN MILLIONS

2014 6.4 2.22013 6.3 2.02012 6.2 2.3

E X E C U T I V E S U M M A R Y

Houston ranked among the top-performing U.S. metros in 2013 and continues to be among the top 10 metros leading the nation in population and job growth in 2014. Houston is once again making headlines as having one of the healthiest economies in the U.S. In July 2014, Forbes published its list of “Best Cities for Job Growth”, and Houston was in the top 10. Further, Texas dominated the top 10 with �ve metros, which are expected to have annual job growth of at least 3.5% in 2014. As expected, a large majority of the jobs Houston gained are related to the energy sector; however, Houston is also a top 10 city for STEM occupations, jobs requiring a degree in science, technology, engineering and math related subjects. In June 2014, Forbes ranked Houston in the top 10 for companies with the greatest number of STEM positions currently open with 10,278 positions listed. Houston also made Forbes’ list of “The Top 10 Cities For Relocation”, with the highest gains in Engineering and Operations jobs.

Houston’s economic base is comprised of a variety of industries led by the energy sector, which accounts for just over 50 percent of Houston’s employment. Houston is known as the “Energy Capital of the World”, and is home to more than 5,000 energy related companies. It’s no surprise that Texas is the #1 ranked U.S. state by the U.S. Energy Information Administration (EIA) in total energy production, and the production of crude oil, natural gas, and electricity production. Texas ranks 6th in coal production. Texas is home to several shale plays and one of those is the Eagle Ford, which produces more than 1 million barrels of oil equivalent per day, or 7 billion cubic feet equivalent per day and that production level has helped to increase local employment in the industry.Houston’s strategic location and core strengths, including an expanding energy sector, strong import/export trade activity, cutting-edge medical advancements, and technological breakthroughs across industries, uniquely position it to play a vital role in meeting national and global market demands. At a time of unprecedented geopolitical demographic shifts a�ecting markets worldwide, Houston stands as a leader among U.S. metros.

HOUSTON

HARRIS

WALLER

AUSTIN

CHAMBERS

LIBERTY

SANJACINTO

MONTGOMERY

FORT BEND

BRAZORIA

GALVESTON

HOUSTON, TEXASMETRO AREA DETAIL

Population Growth

2013 2 ,195,9142012 2 ,160,7122011 2 ,127,4122010 2 ,102,587

H O U S T O N P O P U L AT I O N

6 PHILLIPS 66 $161.247 CONOCO PHILLIPS $59.456 ENTERPRISE PRODUCTS PARTNERS $47.763 SYSCO CORP $44.470 PLAINS GP HOLDINGS $42.3

H O U S T O N T O P 5 F O R T U N E 5 0 0

Houston ranks among the leading metropolitan areas in the U.S., and is the fourth largest city and the �fth largest Metropolitan Statistical Area (MSA) in the nation. The U.S. Census Bureau announced that the Houston MSA, which consists of 10 counties, ranked �rst in the nation for population growth between 2000 and 2010 when the last census was taken. During that time the Houston MSA increased an impressive 26.1 percent, from 4.7M to 5.9M residents. Since then, Houston’s MSA has added close to 400,000 residents. On a more long-term basis, demographers project strong population growth for the area over the next thirty years as domestic and international migration trends favor Houston’s geographical, cultural, and economic strengths. According to the U.S. Census Bureau, Houston had a net gain of more than 35,000 new residents in 2013, second only to New York. The 2010 U.S. Census also showed a dramatic increase of 23.5 percent in Houston metro area households from 1.7M in 2000 to 2.1M in 2010. The average household income for the metro area was estimated at $76,301 in 2009, with a 11.9 percent projected increase to $85,409 by 2014. The median household income was estimated at $53,942 in 2010, an annual decrease of 0.4 percent from $54,146 in 2009. By comparison, the national income levels fell below the Houston market, with 2010 U.S. household median income at $50,046, an annual decrease of 0.3 percent from $50,221 in 2009. As of June 2014, the average annual income for employees on private non-farm payrolls in the Houston MSA was $52,615, which was slightly higher than the $52,438 average annual income for individuals in the New York-Northern New Jersey-Long Island metro.

Houston’s strong economic base continues to be a key factor driving both domestic and international migration trends. Houston ranked 2nd among U.S. cities with the most Fortune 500 headquarters with twenty-six (26) companies on the 2014 list, following New York, with a total of forty-seven (47). Statewide, Texas was the No. 2 ranking state with �fty-two (52) companies on the list, after a tie by New York and California, each states having �fty-four (54) companies on the list. All but three (3) of the Houston companies on the list are in the energy industry. Locally based Phillips 66 took the number 6 spot on the list of 500 companies, with $161.18 billion in revenue.Houston area residents are well-educated, with the majority of the population over 25 years of age holding a high school diploma and residents with college/graduate educational studies outnumbering those with less than a high school education.This high level of educational achievement is not surprising given Houston’s numerous nationally recognized colleges and universities, as well as technical and trade schools, including Rice University, University of Houston, University of St. Thomas, Texas Southern University, Houston Baptist University, Baylor College of Medicine, San Jacinto College, Lone Star College, and Houston Community College. Rice University ranks in the top 20 in U.S. News & World Reports National University Rankings 2014 guide to America’s best colleges. In the No.18 spot, it is the only Texas college in the top 20.Bolstered by above-average demographic trends and a strong base of diverse industries, Houston is well-positioned to compete in today’s global markets. Long recognized as the energy capital of the world, with every major energy company represented locally, Houston now stands as a global example of economic diversity. The area is home to a thriving base of industries including medical/biomedical technology, global trade (particularly airborne and waterborne domestic/international cargo), aeronautics, plastics manufacturing, electronics, computers, software design and integrated power.

PAGE 2HOUSTON ECONOMIC OUTLOOK

REVENUECOMPANYNATIONAL RANK

AS OF JULY 1

in millions

Houston ranked 2nd among U.S. cities with the most Fortune 500 headquarters with twenty-six companies on the 2014 list.

SOURCES: : U.S. Census Bureau, Greater Houston Partnership; Fortune Magazine

Employment Sector

Houston’s employment sector weathered the last recession better than most major metro areas. The downturn here was short-lived and the Houston MSA began recovering jobs sooner than most, recovering more than the jobs it lost in the recession. Between June 2013 and June 2014, Houston added more than 87,500 jobs, which increased the job growth by 3.1%. Among the largest populated U.S. cities, Houston out-performed all but Dallas, and Texas ranked 4th. Texas experienced a 3.3% increase adding 370,300 jobs, while the United States as a whole saw a 1.9% increase adding 2.6 million jobs. Houston was ranked 2nd in the U.S. when looking at the overall percent change in employment in the 10 most populous U.S. major metros as noted in the chart below.Natural gas prices have remained relatively static due in part to the development and perfection of hydraulic fracturing of shale formations for natural gas production. As natural gas is the primary material used in the petrochemical industry, the region looks to gain new capital investment, plants and jobs as one-half of the petrochemical industry jobs in Texas are in the Houston region. This type of job growth is evident as Houston’s Mining and Logging industry sector had one of the largest annual changes in employment at 5.8%, boosted by oil & gas extraction. Additional Houston employment industry sectors that reported annual growth above 5.0% include: Nondurable goods Manufacturing at 6.4%, Wholesale Trade at 5.0%, Architectural, Engineering & Related Services at 10.1%, Educational Services at 6.8%, and Arts, Entertainment & Recreation jumped by 11.7%

HOUSTON ECONOMIC OUTLOOK

Houston was ranked 2nd in the U.S. when looking at the overall percent change in employment in the 10 most populous major metros.

S E L E C T M A J O R A R E A

EMPLOYERS

P E R C E N T C H A N G E I N E M P L O Y M E N TJUNE 2013 TO JUNE 2014

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

DA

LLA

S

HO

UST

ON

MIA

MI

AT

LAN

TA

BO

STO

N

LOS

AN

GE

LES

UN

ITE

D S

TAT

ES

NE

W Y

OR

K

WA

SH

ING

TON

PH

ILID

ELP

HIA

CH

ICA

GO

SOURCES: U.S. Bureau of Labor Statistics

PAGE 3

Strong Business ClimateHouston has long been recognized among the most competitive U.S. cities for corporate relocation and expansion activity. In its March 2014 issue, Site Selection ranked Houston #2 for Tier One New and Expanded Facilities in 2013 of MSA’s with population over 1 million, securing 325 corporate facility expansion projects. Houston was last years winner. In addition, Chief Executive Magazine (for the tenth straight year) named Texas as the “Best State for Business”, in which Houston’s Energy Industry played a huge part. In Summer 2014, Forbes named Houston #1 for “Most Competitive Metro in America” and “Best City for Manufacturing”. In addition to its diverse growth industries and educated/skilled workforce, a key factor underscoring Houston’s business appeal is the fact that it is one of the least expensive major U.S. cities in which to conduct business. Signi�cant bene�ts include the absence of state or city income taxes, no state property tax, as well as an exceptionally low cost of living index.

HOUSTON ECONOMIC OUTLOOK

HOUSTON

SEATTLE

DENVER

LOS ANGELES

CHICAGO

MIAMI

NEW YORK

ATLANTA

As a major transportation hub with two major airports, a world-renowned port, and superior rail and road infrastructure, Houston facilitates the interconnection of global business locations. Business alliances with major U.S. and international markets is further enhanced by the presence of 92 foreign consulate offices in Houston. In 2013, Houston ranked third in the U.S. – following New York and Los Angeles – in foreign consulate representation. Houston’s ability to foster continued expansion in future-growth industries responsible for generating high quality, well-paid jobs across all business sectors has placed it in the top tier among U.S. cities. With its numerous business advantages, Houston is well-positioned to successfully compete in today’s global marketplace.

Atlanta 793 miles 2.5 66 13

Chicago 1,090 miles 2.5 86 18

Denver 1,119 miles 2.5 60 17

Los Angeles 1,550 miles 3.5 90 24

Miami 1,188 miles 2.5 NA 20

New York 1,631 miles 2.5 NA 20

Seattle 2,443 miles 5.0 60 36

T R AV E L T I M E F R O M H O U S T O N

H O U S T O N - S U G A R L A N D - B AY T O W N M S A 2 0 1 3

GROSS AREA PRODUCT $480.6 BILLION

TRUCKRAILAIRDISTANCECITY

in hours

SOURCES: mapquest.com, Official Airlines Guide, BNSF Railway, Union Pacific Railroad, and Greater Houston Parntership Research Department

N M S A 2 0 1 3

LLIO

l as an exceptionally low cost of livin

B AY T O W

T $480.6 B

W

BIL

H O U S T O N -

GR

S U G A R L A N D -

OSS AREA PRODUCT ON

Port of Houston� Ranked #1 U.S. Foreign Tonnage� Ranked #2 U.S. Total Cargo Value� Ranked #7 U.S. Total Container

Energy Industry� Global Energy Capital� Over 5,000 �rms in the region� 40 percent of the national’s base petrochemical capacity

Airport System � Ranked #6 U.S. Airport Passengers� Ranked #9 Global Aircraft Movement � 50.0M Passengers in 2013� 914.2M lbs of Air Freight in 2013

Texas Medical Center� World’s Largest Medical Complex (1,345 Acres)� 106K Employees� 54 Member Institutions� 7.2M Patients Annually� 16K International Patients Annually

NASA / Johnson Space Center� 1,700-acre Complex� Major Employers >Boeing Company >Lockheed Martin >Jacobs Engineering >United Space Alliance

SOURCES: Federal Reserve Bank of Dallas; Port of Houston Authority; Fly2Houston.com; Greater Houston Partnership; Perryman Report; NASA Acquisition Internet Service (NAIS) * Statewide Economic Impact

PAGE 4

Global Energy CapitalHouston is internationally recognized as the global energy capital, with virtually every segment of the energy industry represented by over 5,000 �rms in the region. It is also known as the global center for integrated power, a fast-growing new sector of the energy industry. In just over a decade, the number of Houston-based energy trading companies has tripled, with petrochemical capacity in the area nearly four times larger than the nearest competing U.S. site. All major oil and gas companies have extensive operations in the area, including ExxonMobil, Chevron, BP America, Citgo, ConocoPhillips, Shell Oil Company, BHP Billiton, El Paso Corp., TOTAL, BG Group, Devon Energy, LyondellBasell, Halliburton, Occidental Petroleum, Petrobras, Marathon Oil, Anadarko Petroleum, Transocean, Apache, Hess Corporation, New�eld Exploration, Enterprise Products Partners, and Plains All American Pipeline.

HOUSTON ECONOMIC OUTLOOK$/

bbl

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

SOURCES: Energy Information Administration; West Texas Intermediate; Baker Hughes; Greater Houston Partnership

H I S T O R I C C R U D E O I L P R I C E S

$0

$20

$40

$60

$80

$100

$120

$140June 2014: $105.79/bblJune 2008: $133.93/bbl

Rig

Cou

nt

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

U . S . R O TA R Y R I G C O U N T S

$0

700

900

1100

1300

1500

1700

1900

2100June 2014: 1,861June 2011: 1,972

$/M

MB

tu

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

H I S T O R I C N AT U R A L G A S P R I C E S

$0

$2

$4

$6

$8

$10

$12June 2014: $4.64/MMBtu

June 2008: $10.82/MMBtu

According to a June 2014 British Petroleum statistical review of world energy, global energy consumption growth in 2013 accelerated, despite a stagnant global economy. According to the study, global primary energy consumption increased by 2.3% in 2013, an increase over the 1.8% in 2012, but below the 10-year average of 2.5%. Emerging economies were responsible for nearly 80% of the net growth and consumption growth in North America was above average. Oil remains the world’s leading fuel, at 32.9% of global energy consumption. Natural Gas’s share of global primary energy consumption is 23.7%. Even though world natural gas consumption grew only 1.4% in 2013, below the historical average of 2.6%, consumption growth was above average North America.

The U.S. Energy Information Administration’s (EIA) Annual Energy Outlook released in April 2014 indicates overall U.S. energy consumption will grow at an average annual rate of 0.9% from 2013 through 2014. West Texas Intermediate crude oil prices increased from $95.77 per barrel in June 2013 to $105.79 per barrel in June 2014 and predicts the price to fall to $95.17 per barrel in 2015.The Henry Hub natural gas prices are projected to average $4.64 per MMBtu in 2015 decreasing from to $4.58 per MMBtu by 2014.The U.S. rotary rig count increased annually by 5.7% to 1,861 rigs in June 2014, from 1,761 in June 2013.

PAGE 5

Petrochemical & Plastics Industry

Air L iquide USAAir ProductsBaker Petrol i te Corporat ionBASF Corporat ionBayer Mater ia l ScienceBP Texas Ci tyCelaneseChevron Phi l l ips ChemicalDow Chemical CompanyE. I . du Pont de Nemours CompanyExxonMobi le ChemicalGoodyear Tire & Rubber CompanyINEOS Ole�ns & PolymersLyondel lBasel l Industr iesLubrizol Corporat ionOxyVinyls , LPRohm and Hass TexasShel l Chemica lSolvay Chemicals , Inc.Tota l Petrochemicals USA

M A J O R H O U S T O N R E G I O NC H E M I C A L P L A N T S

Texas is the largest chemical-producing state, generating $145 billion in annual revenues. Houston is a global leader in manufacturing petrochemicals, with the Houston Ship Channel recognized as the largest petrochemical complex in the U.S. The area is home to more than 125 re�ning and petrochemical manufacturing companies operateing the region’s largest petrochemical plants including; Bayport Industrial District, Battleground Industrial Complex, Bayport Shipping Terminal, and the Houston Ship Channel.Today, the chemical industry employs more than 100,000 workers in Texas, nearly 16.0 percent of the industry's total U.S. workforce, according to Labor Department �gures. About half of those jobs are in the Houston region, spread across more than 430 chemical plants and re�neries. In 2013, Texas led the nation in crude oil production, with 27 petroleum re�neries producing over 5.1 million barrels of crude oil per day, 28.8% of total U.S. re�ning capacity. Houston accounts for over 40 percent of the national’s base petrochemical capacity.The discovery of shale rock formations, rich with natural gas and natural gas liquids, has had a huge impact on the region’s economy as many of the major energy companies headquartered in Houston have expanded into natural gas production.Chemical companies are racing to make investments to take advantage of low natural gas prices, since natural gas is used as a feedstock in chemical production. Over the past several years, oil companies have expanded quickly to tap shale oil�elds in Texas, increasing the states percentage of US oil production. Sanchez Energy Corp recently paid $256 million in 2013 for Hess Corp.’s Eagle Ford assets and has recently announced they have entered an agreement to purchase Royal Dutch Shell’s Eagle Ford assets for $639 million. According to a new study from the University of Texas at San Antonio’s Institute for Economic Development, oil and gas development in the Eagle Ford Shale has more than a $60 billion economic impact on the local South Texas economy and over 116,000 jobs are supported in the 20 county area impacted by the play.

HOUSTON ECONOMIC OUTLOOK

SOURCES: Energy Information Administration; Greater Houston Partnership SOURCES: Forbes; Houston and San Antonio Business Journal; Houston Chronicle

EXPANSIONS, ACQUISITIONS & NEW INVESTMENTS

Aug 2014 EOG Resources increases Eagle Ford reserve potential 45%Aug 2014 Houston oil company grabs assets in East Texas for $278 millionAug 2014 Small gas-to-liquids plant planned for former Houston power plant siteAug 2014 Houston energy startup lands $600M investment.Aug 2014 North Carolina energy engineering/construction consulting �rm opens shop in HoustonAug 2014 Pattern Development acquires Texas wind farm developmentJuly 2014 Fast-growing Tennessee energy company to open downtown Houston officeJuly 2014 Los Angeles MLP acquires Houston energy company for $1.6 billionJuly 2014 ExxonMobil restarts Pegasus pipeline in TexasJuly 2014 Texas’ oil and gas industry expands to near-record levelsJuly 2014 New pipe mill near San Antonio will serve Eagle FordJuly 2014 TETRA’s gas compression arm to make $825M acquisitionJuly 2014 Shell announces new Gulf of Mexico discoveryMay 2014 Energy M&A hits 10-year highMay 2014 Sanchez to buy Shell’s Eagle Ford assets in $639M dealMay 2014 3-Freeport to buy Apache’s Gulf of Mexico assets after shale sale

E N E R G Y I N D U S T R Y

PAGE 6

�e Port of HoustonThe Port of Houston’s market strength and strategic location represents a winning combination for business growth and increased industrial development. The economic impact of the Port of Houston is signi�cant, accounting for more than 1.1 million jobs and $179 billion of total economic activity in Texas. Business activities related to the port generate more than $4.5 billion in state and local tax revenue. Houston was ranked the No. 1 U.S. city for global trade by Global Trade magazine and according to a recent report by the U.S. Department of Commerce’s International Trade Administration, the Houston MSA is now the top U.S. market for exports based on 2013 statistics.The Port of Houston Authority (PHA) has planned signi�cant infrastructure improvements over the next few years to accommodate larger vessels and increased cargo resulting from the Panama Canal expansion. More than $220 million has been allocated for capital improvement projects in 2013. Approximately $146 million is allocated to continued development and modernization of Bayport and Barbours Cut container terminals. In addition, about $5 million has been allocated for maintenance dredging and related improvements of the 52-mile Houston Ship Channel. The remaining capital budget will be used primarily for projects at the general cargo and bulk terminals in the Turning Basin area and port security. In addition, private industries have invested over $35 billion in capital improvements along the ship channel.The PHA handled more than 1.9 million cargo containers in 2013, for a total of 19.1 million tons, placing the Port of Houston in the No. 7 spot in the U.S. An immense network of interstate highways and railways connect the port with an inland market of approximately 100 million customers. Over 25 million square feet of distribution centers near the port and other centers are growing around the Houston metro area in response to the port’s global trade and commerce.

HOUSTON ECONOMIC OUTLOOK

P O R T O F H O U S T O N A U T H O R I T YTOTAL TONNAGE HANDLED 2010-2013

0

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2010

2011

2012

2013

Sho

rt T

ons

(in

mil

lion

s)

PAGE 7

Houston’s location in the south central U.S. strategically places it equidistant from the nation’s major population centers – New York (1,631 miles) and Los Angeles (1,550 miles). Connection to major national and international locations is facilitated through Houston’s excellent transportation infrastructure which includes the George Bush Intercontinental Airport, William P. Hobby Airport, Ellington Field, the Port of Houston, and the well-integrated mainline railroads and trucking system serving the area.In the Houston MSA, an extensive freeway system spans 575.5 miles and are continually being expanded as the regions population grows. Between 2003 and 2008, a boom in new construction projects for Houston’s major freeways and tollways signi�cantly improved mobility and accessibility for the region. Expansion of the Katy Freeway (Interstate 10) was one of the most signi�cant projects completed in October 2008, with other key improvement projects including Loop 610/West Loop, Southwest Freeway (U.S. Highway 59 South), Grand Parkway (State Highway 99), North Freeway (Interstate 45 North), Eastex Freeway (U.S. Highway 59 North), Crosby Freeway (U.S. Highway 90), Sam Houston Tollway (Beltway 8), and Westpark Tollway. New and existing projects in

2014 and beyond include the expansion of Hwy 290, IH 610 and U.S. Hwy 290 interchange, as well as Segment E and F of the Grand Parkway. The Houston-Galveston Area Council revised the 2035 and 2040 Regional Transportation Plans (RTP), which provides a 20-year capital projects

improvement plan for area transportation, detailing capital priorities and projected expenditures. More than

$61.1 billion of the $87.0 billion estimated cost for these projects is funded

through toll revenues, property tax, and Metro sales tax.

NASA/Johnson Space Center

NASA’s Johnson Space Center (JSC) is a $1.8B complex occupying 1,700 acres, �rst established in 1961, and later renamed in 1973 in honor of the late President Lyndon B. Johnson, a native Texan. JSC is one of NASA’s largest research and development facilities and mission control for all U.S. manned space flight communications, including the International Space Station and Exploration Programs. From the early space exploration projects Gemini, Apollo and Skylab, came the historic moment when the �rst word from the moon was “Houston”, and deservedly so, as it took a 15,000-member team in Houston to develop, test and put into action what millions around the world watched on television in 1969. Since its inception, JSC continues to make signi�cant advances in science, aeronautics, technology, engineering and medicine.In 2013 JSC’s workforce represented over 15,000 jobs, including approximately 3,000 civil servants and 12,000 contractor personnel employed onsite or in facilities in the area. JSC’s top contractors include The Boeing Company, United Space Alliance, Lockheed Martin, Anadarko Industries, Jacobs Technology, Honeywell International, Bastion Technologies, Science Applications International Corporation (SAIC), Raytheon Technical Services, Oceaneering Space Systems, and Odyssey Space Research, among many others.The Mission Control Center at Johnson Space Center directs all space shuttle missions, including international space station assembly flights. MCC also manages all activity onboard the international space station. JSC serves as the lead NASA center for the International Space Station – a U.S.-led collaborative effort of 16 nations, and the largest, most powerful, complex human facility to ever operate in space.

Mobility Infrastructure

HOUSTON ECONOMIC OUTLOOK

SH99 Grand Pkwy $6.7B Bus Replacement $2.8B City of Houston $29.9MUS 290 Corridor $3.7B North Corridor $1.6B Greenspoint $29.8MIH 45 South $1.5B Southeast Corridor 1.1B Galveston/Harris Co. $22.0MSH 288 $1.4B Northwest Corridor $1.1B City of La Porte $14.9MUS 59 South $1.2B University Corridor $1.0B Westchase District $14.8MBeltway 8 $1.1B Southwest Commuter $0.7B City of Conroe $12.4MIH 610 $1.0B East End Corridor $0.7B Sims Bayou Trail $11.6MSH 146 $0.7B Uptown Corridor $0.6BALL ROADWAYS $25.6B ALL TRANSIT $11.9B ALL PED/BIKE $0.3B

2 0 3 5 R T P C A P I TA L P R I O R I T I E S

PED/BIKETRANSITROADWAYS

�rst established in 1961 and later renamed in 1973

PAGE 8

Airport SystemThe Houston Airport System (HAS) is one of the world’s leading multi-airport facilities and includes George Bush Intercontinental Airport, William P. Hobby Airport, and Ellington Field. HAS ranked sixth nationally in passenger volume in 2013, carrying an impressive 50.9 million passengers and 914.2 million pounds of air freight. The Houston Airport System has a local economic impact of more than $27 billion annually.

GEORGE BUSH INTERCONTINENTAL AIRPORT/HOUSTON (IAH), situated twenty-three miles north of downtown Houston, is the nation’s 12th busiest airport serving 39.8 million passengers in 2013 and offering 200 domestic and international destinations, with nearly 650 daily departures including non-stop direct flights to major cities in Europe, Mexico, Latin America and Asia. IAH is served by 21 scheduled passenger airlines and numerous charter airlines. The airport is served by 12 all-cargo airlines handling more than 885 million pounds of cargo in 2013. Currently, IAH has �ve terminals, no takeoff and landing curfews, and ample land to expand its facilities as requirements demand. The scope and quality of IAH facilities make it one of the top U.S. airports for international air cargo traffic.

WILLIAM P. HOBBY AIRPORT is located seven miles southeast of downtown Houston and is the nation’s 33rd busiest commercial airport, handling over 11 million passengers in 2013. Hobby Airport also serves as a major regional center for corporate and private aviation, with �ve passenger airlines offering scheduled service to approximately 117 U.S. destinations and 70 international destinations. There are 255 private aircraft based at Hobby, including 91 corporate jets and �ve �xed-base operators serving the airport.

AIR CARGO A strong increase in domestic and international trade continues to drive activity at IAH where the 500,000-SF state-of-the-art Air Cargo Center handled over 885M pounds of cargo in 2013. With over 900 air freight-related businesses in the area, IAH is among the leading distribution hubs in the nation with a solid track record of growth and continued future expansion.

HOUSTON ECONOMIC OUTLOOK

SOURCES: Airport Council International; Houston Airport System

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

A I R F R E I G H TDOMESTIC & INTERNATIONAL CARGO - IN POUNDS

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

1,000,000,000International Domestic

IAH Air Freight Statistics & Trends� IAH ranked 14th largest air cargo hub in the U.S.

� IAH is one of the fastest growing distribution hubs in the U.S.

� IAH 2013 air freight cargo exceeded 885M pounds.

� IAH has state-of-the-art facilities to globally transport time-sensitive products.

� Houston’s role as a major gateway for import-export trade is expected to continue expanding with the new Panama Canal lock open.

� IAH ranked #12 serving almost 40M passengers in 2013.

PAGE 9

Texas Medical CenterThe Texas Medical Center (TMC) – the world’s largest medical center – represents one of Houston’s major economic drivers and core industries with an estimated regional annual economic impact of $15 billion. TMC is also one of Houston’s largest employers with 106,000 employees, including physicians, scientists, researchers and other advanced degree professionals in the life sciences.

HOUSTON ECONOMIC OUTLOOK

T E X A S M E D I C A L C E N T E R

including physicians, sc

S M E D I C A L C E N

TMC Patient Care Institutions� DePelchin Children’s Center� The Menninger Clinic� The University of Texas M.D. Anderson Cancer Center � Texas Children’s Hospital � Memorial Hermann Hospital System� The Methodist Hospital � St. Luke’s Episcopal Hospital � Lyndon B. Johnson General Hospital� Quentin Mease Community Hospital� Ben Taub General Hospital � The Institute for Rehabilitation and Research� The Hospice at the Texas Medical Center� Texas Heart Institute � Shriners Hospitals for Children – Houston � Veterans Affairs Medical Center in Houston

TMC Academic & Research Institutions� Sabin Vaccine Institute� The University of Houston – Victoria School of Nursing� Texas Children’s Hospital Neurological Research Institute� Baylor College of Medicine � The University of Texas Health Science Center at Houston� The University of Texas M.D. Anderson Cancer Center� University of Houston College of Pharmacy� Rice University� Texas A&M University Health Science Center� Prairie View A&M University College of Nursing� Texas Woman’s University Institute of Health Sciences� Texas Southern University College of Pharmacy and Health Sciences � Harris County Psychiatric Center� Houston Academy of Medicine

The University of Texas M.D. Anderson Cancer Center in the Texas Medical Center, ranked #2 in U.S. News & World Reports “Americas Best Hospitals 2014-2015” for cancer care.

The internationally-renowned, 1,345-acre TMC is the world’s largest medical complex with 41 member institutions, including leading medical, academic and research institutions, all of which are non-pro�t and dedicated to the highest standards of research, education and patient and preventive care. Over 50,000 students, including more than 20,000 international students, are affiliated with TMC, including high school, college and health profession graduate programs. More than 7.2 million patients visit TMC each year, including approximately 16,000 international patient visits. In addition to the medical facilities and institutions of higher learning, TMC is also home to more than 290 professional buildings. Overall, the complex covers over 18 miles of public and private streets and roadways, with 45.8M SF of existing patient, education, and research space. TMC has continued to grow and expand over the past several decades with the majority of growth occurring in the past ten years. The Center is located in the 110-acre University of Texas Research Park, a joint effort between the University of Texas Health Science Center, M.D. Anderson, and General Electric Healthcare. TMC spends billions of dollars on research and charity care annually.

KATY

GALLERIA

BELLAIRE

RICHMOND

SUGAR LAND

PASADENA

LEAGUE CITY

IAH

HOUEFD

CBD

H

610

290

249

90

59

59

610

288

225

146

I-45

I-45

I-10I-10

8

8

8

8

SHIPCHANNEL

GALBAY

6

Texas Medical Center� World’s Largest Medical Complex (1,345 Acres)� 106,000 Employees� 54 Member Institutions� 7.2M Patients Annually� 5,000 Physicians� 49,000 Life Science Students� $960 million in Charity Care

Houston MSA Health Care� 115 Hospitals� 19,830 Hospital Beds� 13,360 Physicians� 299,600 Health Care & Social Assistance jobs� 3.5% annual employment growth

TEXAS MEDICAL CENTER LOCATION

PAGE 10

Biosciences & BiotechnologyBiotechnology and the life science industry continue expanding in the Houston region with more than 100 institutions and companies attracting over $1.8B in research and development funding annually. Since 2005, the Texas Emerging Technology Fund has allocated more than $205 million in funds to 145 early-stage companies, and $220 million in grant matching and research superiority funds to Texas universities. Since 2010, the state-funded Cancer Prevention and Research Institute of Texas has awarded $382 million in cancer research, commercialization and prevention grants. Leading research efforts in the area represent established and emerging industries, including nanotechnology, pharmaceuticals, nutraceuticals, genetics/genomics, biodefense and infectious diseases, stem cell research, and oncology. Long known for its research-centric Texas Medical Center (TMC), the Houston region is gaining momentum in the development and commercialization of products ensuring its place as a major biotechnology and life sciences cluster. Public and private sector support, including investments by entrepreneurs and venture capitalists, will continue to be crucial in creating the necessary infrastructure to facilitate the entrance of both established and start-up private companies committed to biotechnology.

HOUSTON AREA BIOTECHNOLOGY BUSINESS PARKSOutside of the TMC, the 1,000-acre Research Forest located in The Woodlands (30 miles north of downtown Houston) is a long-standing major research center designed speci�cally for scienti�c, research and biotechnology companies. More recently established business parks/organizations geared towards biotechnology commercialization in the Houston region include the Genesis Biotechnology Park and BioHouston, Inc. Genesis Biotechnology Park comprises 16 innovative life science companies and researchers located just south of the TMC. The Park was developed to increase venture capital interests in Houston and is committed to supporting start-up companies by providing tenant options for shared office, wet laboratory space (including equipment), and flexible leases. BioHouston, Inc., a non-pro�t corporation founded by Houston-area academic/research institutions, is actively leading a broad-based effort to strengthen Houston’s position as a global competitor in life science and biotechnology. BioHouston’s Resource Center, the �rst incubator facility serving the Houston life sciences community, is housed at the Genesis Biotechnology Park, adding a key component to ongoing commercialization efforts. The Center is speci�cally designed to serve start-up biotech and life sciences companies by offering access to shared laboratory space, research resources, and networking opportunities with a community of biotech entrepreneurs. From its base of cutting-edge research, Houston has taken the next step in its evolution as a primary life science cluster by creating an environment conducive for private companies to develop and market life science products. With key initiatives in place to bring together the public and private sectors, as well as signi�cant improvements to the scope of services and incentives available to private companies, the infrastructure is in place to capitalize on Houston’s strong research base and convert it into commercialized product. With this process now in motion, the biotech future in Houston looks bright.

HOUSTON ECONOMIC OUTLOOK

B I O S C I E N C E S I N 2 0 1 3 - 2 0 1 4

� FEB 2014 DNAtrix snags $10.8 million from Texas cancer-research institute.

� FEB 2014 Cancer Prevention and Research Institute of Texas (CPRIT) awards $22.9 million in research grants to DNAtrix Inc., The University of Texas Medical Branch at Galveston, Baylor College of Medicine,

Rice University, The University of Texas Health Science Center at Houston and the University of Texas M.D. Anderson Cancer Center.

� JAN 2014 Early studies show microspheres could be key in preventing bone infections after joint replacement.

� JAN 2014 Houston Biotech company closes major funding round.

� OCT 2013 New company to manufacture heart pumps in Houston.

PAGE 11

�e Colliers AdvantageENTERPRISING CULTURE Colliers International is a leader in global real estate services, de ned by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners. When you choose to work with Colliers, you choose to work with the best. In addition to being highly skilled experts in their eld, our people are passionate about what they do. And they know we are invested in their success just as much as we are in our clients’ success.This is evident throughout our platform—from Colliers University, our proprietary education and professional development platform, to our client engagement strategy that encourages cross-functional service integration, to our culture of caring. We connect through a shared set of values that shape a collaborative environment throughout our organization that is unsurpassed in the industry. That’s why we attract top recruits and have one of the highest retention rates in the industry. Colliers International has also been recognized as one of the “best places to work” by top business organizations in many of our markets across the globe. Colliers International offers a comprehensive portfolio of real estate services to occupiers, owners and investors on a local, regional, national and international basis.

LISA R. BRIDGESDirector of Market Research | HoustonDirect +1 713 830 2125Fax +1 713 830 2118lisa.bridges@colliers.com

COLLIERS INTERNATIONAL1233 W. Loop SouthSuite 900Houston, Texas 77027Main +1 713 222 2111

Accelerating success.

$75BTRANSACTION VALUE

1.46BSF UNDER MANAGEMENT

$2.1BIN REVENUE

485OFFICES

15,800PROFESSIONALS & STAFF

238ACCREDITED MEMBERS

63COUNTRIES

*2013 stats include office, industrial, andretail properties under management. Residential

properties are excluded from this total.

*

SIOR

HOUSTON ECONOMIC OUTLOOK

*Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed