SOUTHERN NEVADA2015 & BEYOND

February 10, 2015

Prepared by:

HOW OTHERS SEE US

2

3

SoNv has average development & redevelopment opportunities.2015 Metro Perspective: Top 10 Metros for Development/Redevelopment: Opportunities + Las Vegas MSA (Of 60 Largest Metros)

1Houston 4.62 Weak

2Dallas/Fort Worth 4.24 Declining

3San Jose 4.20 Average

4Seattle 4.19 Improving

5New Orleans 4.17 Strong

6New York—Brooklyn 4.15

7Denver 4.14

8San Francisco 4.09

9Nashville 4.06

10 Minneapolis/St. Paul 4.05

57Las Vegas 3.1758 Milwaukee 3.17

59 Spokane 3.17

60 Birmingham 3.17

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

Based on survey of 1,400 industry

leaders.

4

SoNV lags in projected economic strengthamong western metros.2015 Strength of Economy Scores (Out of 5): Local Outlook: West Region

1 2 3 4 5Weak Declining Average Improving Strong

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

Based on survey of 1,400 industry

leaders.

5

SoNV CRE lags investment prospects lag other western metros, cont’d.2015 Sector Investment Prospects (Out of 5): Las Vegas & Western Region

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

Based on survey of 1,400 industry

leaders.

6

Less than optimal LV real estate prospects: investment, development & homebuilding.2015 Top 10 U.S. Metros to Watch Plus Las Vegas:Overall Real Estate Prospects (5 is Highest Score)

Market (Of 75 Largest Markets) Investment Development Homebuilding

1 Houston (1, 1, 2) 4.01 3.80 4.21

2 Austin (2, 4, 1) 3.85 3.68 4.33

3 San Francisco (3, 2, 5) 3.82 3.75 3.80

4 Denver (5, 5, 4) 3.66 3.54 3.87

5 Dallas/Fort Worth (9, 8, 3) 3.56 3.43 3.98

6 Los Angeles (6, 6, 6) 3.65 3.52 3.73

7 Charlotte (7, 7, 7) 3.61 3.44 3.71

8 Seattle (4, 3, 17) 3.70 3.72 3.34

9 Boston (8, 9, 14) 3.58 3.37 3.39

10 Raleigh/Durham (16, 17, 9) 3.42 3.24 3.57

64 Las Vegas (62, 64, 64) 2.59 2.46 2.58

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

Based on survey of 1,400 industry

leaders.

THE REALITY:SOUTHERN NEVADA

ECONOMY

7

8Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, *RGMP 2001-2013.

Rank Among 60 Largest US Metros: 2000-2013

Recovery somewhat mixed.

Population Change (#) #10

Population Growth (%) #3

Employment Change (#) #10

Employment Growth (%) #5

Real GMP* Change (#) #33

Real GMP* Growth (%) #25

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-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Comparison of Recession Job Growth Recoveries% Job Losses Relative to Peak Employment Month1948 1953 1957 1960 1969 1974 1980 19811990 2001 2007 US 2007

Number of Months After Peak Employment

9Source: Bureau of Labor Statistics.

Nevada Recession Recoveries: 1948-Present

Nevada job recovery from Great Recession after 91 months.

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-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Comparison of Recession Job Growth Recoveries% Job Losses Relative to Peak Employment Month1948 1953 1957 1960 1969 1974 1980 19811990 2001 2007 US 2007

Number of Months After Peak Employment

10Source: Bureau of Labor Statistics.

Nevada Recession Recoveries: 1948-Present

Nevada job recovery from Great Recession after 91 months.

Nevada

US

11Source: Bureau of Economic Analysis, International Monetary Fund.

US Real GDP Actual: 2003-2009

US real GDP further improving, compared to recent years.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201512,000

13,000

14,000

15,000

16,000

17,000

18,000

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Real Gross Domestic Product % Change

Billi

ons o

f Cha

ined

200

9 Do

llars

12Source: Bureau of Economic Analysis, International Monetary Fund.

US Real GDP Forecast: 2014-2015

US real GDP further improving, compared to recent years.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201512,000

13,000

14,000

15,000

16,000

17,000

18,000

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Real Gross Domestic Product % Change

Billi

ons o

f Cha

ined

200

9 Do

llars

13Source: Bureau of Economic Analysis, RCG Economics.

Las Vegas Real Gross Metro Product: 2003-2009

Las Vegas real GMP growth also improving coming out of Great Recession.

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

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

-15%

-10%

-5%

0%

5%

10%

15%Real Gross Metro Product % Change

Mill

ions

of C

hain

ed 2

009

Dolla

rs

14Source: Bureau of Economic Analysis, RCG Economics.

Las Vegas Real GMP Forecast: 2014-2015

Las Vegas real GMP growth also improving coming out of Great Recession.

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

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

-15%

-10%

-5%

0%

5%

10%

15%Real Gross Metro Product % Change

Mill

ions

of C

hain

ed 2

009

Dolla

rs

15Source: Nevada Department of Taxation.

Clark County Taxable Retail Sales: Nov-04 to Nov-14

Taxable sales nearing all-time high, continues to fuel LV economy.

$1,500,000,000.0

$2,000,000,000.0

$2,500,000,000.0

$3,000,000,000.0

$3,500,000,000.0

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

CC Taxable SalesYOY Chg.

16Source: Nevada Department of Taxation.

Clark County Taxable Retail Sales: Nov-04 to Nov-14

Taxable sales nearing all-time high, continues to fuel LV economy.

$1,500,000,000.0

$2,000,000,000.0

$2,500,000,000.0

$3,000,000,000.0

$3,500,000,000.0

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

CC Taxable SalesYOY Chg.

Billi

ons

Nov-14: $3.01B

Nov-14: 8.1%

THE REALITY:SOUTHERN NEVADA POPULATION & JOBS

17

18Source: Census Bureau.

Las Vegas MSA High-Skill Population Growth (% Change): 2000-2013

Las Vegas skilled worker pool has boomed since 2000.

MSABach. Degree+

Pop. Growth RankTotal Pop.

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

19Source: Bureau of Labor Statistics.

Las Vegas MSA Employment vs. US Employment (% Change): Dec-95 to Dec-14

Job growth hurt in ‘01 Recession but crippled by Great Recession.

Dec-95

Dec-96

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Las Vegas USA

20Source: Bureau of Labor Statistics.

Las Vegas MSA Employment vs. US Employment (% Change): Dec-95 to Dec-14

Job growth hurt in ‘01 Recession but crippled by Great Recession.

Dec-95

Dec-96

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Las Vegas USA

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

2013-4%

-2%

0%

2%

4%

6%

8%

10%

Las Vegas Years Las Vegas Lost Jobs USA

21Sources: World Bank, Clark County Comprehensive Planning.

Clark County Population vs. US Population (% Change): 1981-2013

Great Recession severely reduced population growth, now recovering.

22Source: Bureau of Labor Statistics.

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

Nevada jobs bounce back big in 2013, but U-6 rate remains stubbornly high.Fastest Growing States

1-YR Growth Rate

Slowest Growing States

1-YR Growth Rate

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

23Note: Quarterly figures are rolling averages of the 4 quarters ending in the noted quarter.

Source: Bureau of Labor Statistics.

Nevada U-3 & U-6 Unemployment Rates: Q4-09 to Q4-14

“Headline” Unemployment rate improving but U-6 rate still too high.

0.0

5.0

10.0

15.0

20.0

25.0

11.3

12.413.5

13.814.4

14.2

13.613.5

13.112.7

12.311.9

11.010.8

10.49.7

9.89.4

8.88.3

7.7

19.2

20.421.5

22.3 23.6

23.7

23.3

23.3

22.722.3

22.121.4

20.319.6

19.018.1

18.117.4

16.215.9 15.3

U3 U6

Perc

ent (

%)

24Source: Bureau of Labor Statistics.

Las Vegas MSA Average Weekly Earnings: Dec-08 to Dec-14

Wages, after adjusting for inflation, remain stagnant.

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

$550

$600

$650

$700

$750

Nominal Avg. Weekly Earnings

Inflation-Adjusted (2007$) Avg. Weekly Earnings

25Source: Bureau of Labor Statistics.

Las Vegas MSA Average Weekly Earnings: Dec-08 to Dec-14

Wages, after adjusting for inflation, remain stagnant.

$550

$600

$650

$700

$750

Dec-14 Nominal: $700

Nominal Avg. Weekly Earnings

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

26Source: Bureau of Labor Statistics.

Las Vegas MSA Average Weekly Hours: Dec-08 to Dec-14

Age of the part-time worker. Weekly hours dropping as unemployment rate drops.

Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-1433

34

35

36

37

38

United States Nevada Las Vegas MSA

27Source: Bureau of Labor Statistics.

Las Vegas MSA Average Weekly Hours: Dec-08 to Dec-14

Age of the part-time worker. Weekly hours dropping as unemployment rate drops.

Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-1433

34

35

36

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38

United States Nevada Las Vegas MSA

US: Dec-14: 34.5

LV: Dec-14: 33.3

NV: Dec-14: 33.4

THE REALITY:SOUTHERN NEVADAGAMING & TOURISM

28

29Source: Las Vegas Convention and Visitors Authority.

Las Vegas Valley Hotel Revenue per Available Room: Dec-04 to Dec-14

RevPAR recovering slowly from recession but back up over $100.

Dec-04

Mar-05Jul-0

5

Nov-05

Mar-06Jul-0

6

Nov-06

Mar-07Jul-0

7

Nov-07

Mar-08Jul-0

8

Oct-08

Feb-09

Jun-09

Oct-09

Feb-10

Jun-10

Oct-10

Feb-11

Jun-11

Oct-11

Feb-12

May-12

Sep-12

Jan-13

May-13

Sep-13

Jan-14

May-14

Sep-14

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

30Source: Las Vegas Convention and Visitors Authority.

Las Vegas Valley Hotel Revenue per Available Room: Dec-04 to Dec-14

RevPAR recovering slowly from recession but back up over $100.

Dec-04

Mar-05Jul-0

5

Nov-05

Mar-06Jul-0

6

Nov-06

Mar-07Jul-0

7

Nov-07

Mar-08Jul-0

8

Oct-08

Feb-09

Jun-09

Oct-09

Feb-10

Jun-10

Oct-10

Feb-11

Jun-11

Oct-11

Feb-12

May-12

Sep-12

Jan-13

May-13

Sep-13

Jan-14

May-14

Sep-14

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

Nov-14: $100.80

31Source: Las Vegas Convention and Visitors Authority.

Las Vegas Valley Visitor Volume: Dec-04 to Dec-14

Visitor volume at highest ever levels & continues to spike.

2,900,000.0

3,000,000.0

3,100,000.0

3,200,000.0

3,300,000.0

3,400,000.0

3,500,000.0

32Source: Las Vegas Convention and Visitors Authority.

Las Vegas Valley Visitor Volume: Dec-04 to Dec-14

Visitor volume at highest ever levels & continues to spike.

2,900,000.0

3,000,000.0

3,100,000.0

3,200,000.0

3,300,000.0

3,400,000.0

3,500,000.0

Dec-14: 3.43M

33Source: Nevada Gaming Control Board.

Clark County Gaming Revenue: Dec-04 to Dec-14

Gaming revenue increasing due to baccarat; net baccarat stagnant.

$600,000,000

$650,000,000

$700,000,000

$750,000,000

$800,000,000

$850,000,000

$900,000,000

$950,000,000

Total Gaming RevenueNet Baccarat

34Source: Nevada Gaming Control Board.

Clark County Gaming Revenue: Dec-04 to Dec-14

Gaming revenue increasing due to baccarat; net baccarat stagnant.

$600,000,000

$650,000,000

$700,000,000

$750,000,000

$800,000,000

$850,000,000

$900,000,000

$950,000,000

Total Gaming RevenueNet Baccarat

Dec-14 With Bacc.: 796.2

Dec-14 net Bacc.: 671.9M

35Source: AAA.

US & Las Vegas MSA Gas Prices: One Year Ago to Current (2/2/2015)

Gas prices have tumbled over the last several months.

CurrentYesterdayWeek AgoMonth AgoYear Ago$1.90

$2.10

$2.30

$2.50

$2.70

$2.90

$3.10

$3.30

$3.50

Las Vegas MSAU.S. Average

THE REALITY:SOUTHERN NEVADA

REAL ESTATE MARKETS

36

37Source: RCG Economics.

Las Vegas Valley Commercial Real Estate Vacancy Rates: Q3/04 to Q3/14

Vacancy rates recovering across board, led by Industrial real estate.

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Q1 '07

Q3 '07

Q1 '08

Q3 '08

Q1 '09

Q3 '09

Q1 '10

Q3 '10

Q1 '11

Q3 '11

Q1 '12

Q3 '12

Q1 '13

Q3 '13

Q1 '14

Q3 '14

-5%

0%

5%

10%

15%

20%

25%

30%

Industrial Spec Office Anchored Retail

38Source: RCG Economics.

Las Vegas Valley Commercial Real Estate Vacancy Rates: Q3/04 to Q3/14

Vacancy rates recovering across board, led by Industrial real estate.

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Q1 '07

Q3 '07

Q1 '08

Q3 '08

Q1 '09

Q3 '09

Q1 '10

Q3 '10

Q1 '11

Q3 '11

Q1 '12

Q3 '12

Q1 '13

Q3 '13

Q1 '14

Q3 '14

-5%

0%

5%

10%

15%

20%

25%

30%

Industrial Spec Office Anchored RetailQ3'14 Off: 22.9%

Q3'14 Ind: 10.3%

Q3'14 Ret: 11.4%

39Source: RCG Economics.

Las Vegas Valley Distribution of Available Industrial Units, by Size: Q3/14

Lack of larger units hampering Industrial growth in LV; but help on the way.

0

200

400

600

800

1,000

1,200

1,400

1,6001411

53 17 7 2 0 0 1 1

(94.6%)

(3.6%) (1.1%) (0.5%) (0.1%) (0.0%) (0.0%) (0.1%) (0.1%)

Size Categories (sf)

Num

ber o

f Ava

ilabl

e Un

its

40Source: Home Builder's Research.

Las Vegas MSA Weighted Sales & Median Home Price: Dec-04 to Dec-14

Home sales slowing as price rises & cash-buyers leave market.

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Median Price Total Sales

Med

ian

Hom

e Pr

ice Hom

e Sales

41Source: Home Builder's Research.

Las Vegas MSA Weighted Sales & Median Home Price: Dec-04 to Dec-14

Home sales slowing as price rises & cash-buyers leave market.

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Median Price Total Sales

Med

ian

Hom

e Pr

ice

Home Sales

LOOKING FORWARD

42

“The only function of

economic forecasting is to

make astrology look

respectable.”

--John Kenneth Galbraith

43Sources: *CBER, **Woods & Poole, ***NV State Demographer.

Las Vegas MSA Population/Employment Forecast (% Change): 2014-2015

Looking ahead: Las Vegas MSA poised tocontinue making strides.

Las Vegas MSA (Pop./Emp.) 2014 2015

Population* 2.0% 2.1%

Population** 1.8% 1.8%

Population*** 1.3% 1.4%

Employment** 1.9% 1.9%Three Rules of Forecasting

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

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

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

-- Anonymous

44

LV office-using jobs will be the largest.Las Vegas Major Occupations Forecast, by Total Jobs: 2014-2020

Source: EMSI, RCG Economics.

Industrial Office Retail100,000

200,000

300,000

400,000

500,000

600,000

224,860

516,008

195,381

235,364

549,365

209,506

2014 2014 20142020 2020 2020

45

Retail jobs will be fastest growing.Las Vegas Major Occupations Forecast, by Percent Growth: 2014-2020

Source: EMSI, RCG Economics.

Industrial Office Retail3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

4.7%

6.5%

7.2%

46Source: EMSI.

Top 5 Las Vegas Industries, by Total Jobs: 2014-2020

In terms of occupations, food service & administration will be the biggest BIGGEST.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

141,893138,757

106,977

70,762 64,757

153,514144,398

111,983

77,27470,036

2014 2020

47Source: EMSI.

Las Vegas Top 10 Job Forecast (# Change): 2014-2020

In terms of the # of jobs that will be produced, Services will lead.

Food Preparation & Serving Related Occupations

Personal Care & Service Occupations

Office & Administrative Support Occupations

Building & Grounds Cleaning & Maintenance Occupations

Sales & Related Occupations

Healthcare Practitioners & Technical Occupations

Transportation & Material Moving Occupations

Healthcare Support Occupations

Management Occupations

Business & Financial Operations Occupations

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

11,621

6,512

5,641

5,279

5,006

3,843

3,690

2,376

2,254

2,056

48Source: EMSI.

Las Vegas Top 10 Job Forecast 2014 Wages (for # Change): 2014-2020

In terms of the # of jobs that will be produced, Services will lead.

Healthcare Practitioners & Technical Occupations

Management Occupations

Business & Financial Operations Occupations

Transportation & Material Moving Occupations

Office & Administrative Support Occupations

Healthcare Support Occupations

Building & Grounds Cleaning & Maintenance Occupations

Sales & Related Occupations

Personal Care & Service Occupations

Food Preparation & Serving Related Occupations

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45

$39.41

$39.32

$27.22

$16.16

$15.68

$15.17

$14.73

$14.28

$12.21

$12.11

49Source: EMSI.

Las Vegas Top 10 Job Forecast (% Change): 2014-2020

In terms of the rate of growth, Healthcare & STEM jobs will lead.

Healthcare Support Occupations

Community & Social Service Occupations

Computer & Mathematical Occupations

Life, Physical, & Social Science Occupations

Healthcare Practitioners & Technical Occupations

Arts, Design, Entertainment, Sports, & Media Occupations

Personal Care & Service Occupations

Food Preparation & Serving Related Occupations

Building & Grounds Cleaning & Maintenance Occupations

Legal Occupations

0% 2% 4% 6% 8% 10% 12% 14%

13.1%

11.8%

11.4%

10.5%

10.5%

9.9%

9.2%

8.2%

8.2%

7.3%

50Source: EMSI.

Las Vegas Top 10 Job Forecast 2014 Wages (for % Change): 2014-2020

In terms of the rate of growth, Healthcare & STEM jobs will lead.

Legal Occupations

Healthcare Practitioners & Technical Occupations

Computer & Mathematical Occupations

Life, Physical, & Social Science Occupations

Community & Social Service Occupations

Arts, Design, Entertainment, Sports, & Media Occupations

Healthcare Support Occupations

Building & Grounds Cleaning & Maintenance Occupations

Personal Care & Service Occupations

Food Preparation & Serving Related Occupations

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45

$40.58

$39.41

$33.26

$32.76

$23.23

$20.98

$15.17

$14.73

$12.21

$12.11

WRAP-UPYESTERDAY, NOW &

TOMORROW IN PICTURES

51

52

While 2015 definitely won’t be another 2004 . . .

53

It won’t be another 2008 either . . .

54

It won’t even be another 2009 – 2013. . .

55

But even though still a bit wobbly, the recovery will continue to take hold in 2015.

Fed Policy

Corporate Profits

Gas Prices

Resort Industry Health

Recovering RE market

Healthy Job Growth

Population Growth

Economic Development

56

Contact:John Restrepo702-967-3188

jrestrepo@rcg1.comwww.rcg1.com

Twitter: @rcgeconomics