Las Vegas Research & Forecast Report Q Las Vegas Economic Review

Transcription

1 Las Vegas Research & Forecast Report Q Las Vegas Economic Review

2 Glossary Industrial Definitions Incubator: Multi-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet and bay sizes lower than 3,500 square feet. Light Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of less than 15,000 square feet. Light Industrial: Flex: Warehouse/Distribution: Multi- or single-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet and, in the case of multi-tenant buildings, bay sizes of at least 3,500 square feet. Multi- or single-tenant buildings without dock-high loading doors with parking ratios in excess of 3.5/1,000 square feet. Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of at least 15,000 square feet. Office Definitions Class A Office: Class B Office: Class C Office: Buildings with steel frame construction, high end exterior finish, distinctive lobbies featuring upgraded finishes, amenities including on-site security, state-of-the-art communications and data infrastructure and covered parking. Class A buildings are usually multi-story. Buildings with steel frame, reinforced concrete or concrete tilt-up construction. Class B buildings contain common bathrooms and hallways, and their lobbies may have granite and hardwood detailing. Class B buildings are often multi-story. Buildings of wood frame construction. Class C buildings are often garden-style and are built around courtyards. Retail Definitions Community Center: Neighborhood Center: Power Center: Strip Center: Retail centers anchored by supermarkets, drug stores and discount department stores. Tenants include offprice retailers selling apparel, home improvements/furnishings, toys, electronics or sporting goods. Retail centers anchored by supermarkets and drug stores. Neighborhood centers are intended for convenience shopping for day-to-day needs of consumers. Retail centers dominated by several large anchors including discount department stores, off-price stores, warehouse clubs or category killers. Power centers generally inline space. Unanchored retail centers that are 20,000 SF in size or larger. Multifamily Definitions Class A Multifamily: Class B/C Multifamily: Buildings constructed in the last 5 years Buildings constructed more than 5 years ago General Definitions Vacant SF: Sublease SF: Net Absorption: Space in a building that is unoccupied and offered for lease by the owner of the company. Space in a building that is offered for sublease by the primary tenant. This space may or may not be occupied. Difference in occupied square footage from one period to another. 2 Las Vegas Research & Forecast Report Q Economic Review Colliers International

3 Table of Contents Economic Review What Comes Next? The economic growth experienced by Southern Nevada in 2015 looks continued in the first quarter of Industrial Review A Good Start, But After a very strong 2015, the first quarter of 2016 seems to be a continuation of the trend of high net absorption. 4 8 Office Review Office Picks Up Steam Over the past three years, and despite a few bad quarters, Southern Nevada s office market has managed a pretty strong recovery. Retail Review More Expasion for Retail Market Southern Nevada s retail market appeared to be back in growth mode. The market managed 285,353 square feet of net absorption in the first quarter of 2016, more than one quarter ago and also more than one year ago. Multifamily Vacancy Edges Up on New Completions According to statistics provided by REIS, multifamily vacancy in Southern Nevada increased in the fourth quarter of 2015 (the most recent quarter of available data), ending a three year long streak. Medical Office Medical Growth But Not in Medical Office Southern Nevada s medical office market managed a positive 2015 due to strong positive net absorption in the first half of the year, and despite negative net absorption in the last half of the year. Hospitality Hospitality Stays Strong 2016 has only just begun, but so far Southern Nevada s hospitality market appears to have extended its winning streak. Land The Calm Before the Storm In terms of acreage sold, the first quarter of 2016 was the best first quarter Southern Nevada has had in five years, with 1,224 acres sold in 87 sales This report and other research materials may be found on our website at This quarterly report is a research document of Colliers International Las Vegas. Questions related to information herein should be directed to the Research Department at Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof Colliers International 3 Las Vegas Research & Forecast Report Q Economic Review Colliers International

4 Research & Forecast Report LAS VEGAS ECONOMIC REVIEW Q What Comes Next? > > Southern Nevada economy grew in Q4 > > Taxable sale growth and job growth was strong > > Hospitality and construction sectors are driving economy The economic growth experienced by Southern Nevada in 2015 looks continued in the first quarter of Led by continued growth in taxable sales and employment, the Valley s economy, despite some lingering areas of weakness, is beginning to transition from recovery to expansion. Recovery Index (Year -Over-Year) Clark County Economic Data Current Year Ago (Year-Over-Year) Jobs (1000s) (Jan. 2016) Jan 2005 = Visitor Volume YTD (Jan. 2016) 3.5 MM 3.4 MM Gaming Revenue YTD (Jan. 2016) $811 MM $838 MM 60.0 Taxable Sales YTD (Dec. 2015) $38.6 BB $36.1 BB Commercial Occupancy (Q1-2016) 91.0% 89.5% 0.0 New Home Sales Commercial Occupancy Gaming Revenue Visitor Volume In-Migration Employment Taxable Sales Port Traffic LA Recovery Index Source: The Center for Business & Economic Research, UNLV; Colliers International Dec 2014 Dec 2015

5 Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January The national unemployment figure was 4.9 percent in February 2016, down from 5.5 percent in February The national labor force participation rate edged up to 62.9 percent, a 0.1 point increase from February Since January 2015, total employment in Southern Nevada increased by 32,600 jobs, slightly more than were added between January 2014 and January On a year-over-year basis, the majority of new jobs were in trade, transportation and warehousing (+9,500 jobs), health care and social assistance (+7,700 jobs), professional and business services (+6,500 jobs), construction (+6,000 jobs) and government (+4,100 jobs). Job expansions were also experienced in the manufacturing (+1,100 jobs), education (+1,000 jobs) and financial activities (+1,000 jobs) sectors. Job losses occurred in information (-100 jobs), natural resources (-100 jobs), other services (-400 jobs) and leisure and hospitality (-3,700 jobs). The job losses in leisure and hospitality are due to the closure of some older resorts for redevelopment rather than a downturn in the industry. In 2015, job growth was dominated by the leisure and hospitality and construction sectors. It is now more diversified, though it is likely that construction and hospitality will reassert themselves as dominant job sectors in the near future. While the current construction employment of 53,300 jobs lags well behind the 111,300 construction jobs the Valley had in August of 2006, it has expanded quite a bit since the low of 34,800 construction jobs in early The industrial and multifamily sectors are the key real estate stimulators of new construction in the Valley, but infrastructure is currently creating the most construction jobs in Southern Nevada, and important infrastructure projects are planned to continue for the next year at least, Project Neon being foremost among them. The coming years will also see construction at the Cadence MPC in Henderson and the ResortsWorld resort on the Las Vegas Strip, as well as additional industrial, multifamily and retail projects. Employment Growth (January January 2016) Trade/Transportation/Utilities Health Care/Social Assistance Professional/Business Services Construction Government Manufacturing Education Financial Activities Information Natural Resources Other Services Leisure/Hospitality Employment Change (Jan 2:15 - Jan 2:16) -1:: -1:: -4:: -3,7:: 9,5:: 7,7:: 6,5:: 6,::: 4,1:: 1,1:: 1,::: 1,::: -6,::: -4,::: -2,::: : 2,::: 4,::: 6,::: 8,::: 1:,::: 12,::: Southern Nevada Commercial Real Estate Recovery Index Colliers International Southern Nevada Commercial Real Estate Recovery Index (Jan 2005 = 100) The Old Growth Rate The New Growth Rate Jan 2014 Aug 2015 Mar 2015 Oct 2014 May 2014 Dec 2013 Jul 2013 Feb 2013 Sep 2012 Apr 2012 Nov 2011 Jun 2011 Jan 2011 Aug 2010 Mar 2010 Oct 2009 May 2009 Dec 2008 Jul 2008 Feb 2008 Sep 2007 Apr 2007 Nov 2006 Jun 2006 Jan 2006 Aug 2005 Mar 2005 Oct 2004 May 2004 Dec 2003 Jul 2003 Feb 2003 Sep 2002 Apr 2002 Nov 2001 Jun 2001 Jan 2001 Aug 2000 Mar 2000 Oct 1999 May 1999 Dec 1998 Jul 1998 Feb 1998 Sep 1997 Apr 1997 Nov 1996 Jun 1996 Southern Nevada was among the fastest growing metropolitan areas in the United States in the decades that preceded the Great Recession, but population growth during the Not-So-Great Recovery has been slow. Factors for this slowing included a stagnant job market, which is now reversing itself, and millions of Americans with mortgage problems who were unable to sell their homes and move west. According to data provided by the Nevada Department of Motor Vehicles, the average number of out-of-state driver s licenses turned in each month was 5,130 in This was lower than the average of 5,324 licenses per month turned in in 2014 and 5,481 licenses per month turned in in The initial bounce back in growth experienced in 2013 from the lows of 2011 and 2012 appears to have reversed itself back into a slow slide. New home sales are equally unimpressive in Southern Nevada over the past three years, and increases in new home prices and multifamily rental rates might be partially to blame. A low-growth Southern Nevada is unfamiliar to many long-time business people in the area, and will require a reappraisal of old methods and assumptions. This is especially true for the commercial real estate market. 5 Las Vegas Research & Forecast Report Q Economic Review Colliers International

6 Southern Nevada s hospitality sector continued to see improved visitor volume in the opening month of 2016, as it had throughout This higher visitor volume is coupled with reductions in the Valley s room inventory due primarily to the closure of the venerable 2,075-room Riviera Hotel & Casino. The Riviera was purchased last year by the Las Vegas Convention & Visitors Authority and is slated for demolition to make room for an expansion of their convention facilities. A total of 373 rooms were removed from inventory in 2014, with three smaller properties being demolished. With more visitors and fewer rooms, the industry is enjoying higher occupancy and room rates. Commercial real estate investment sales volume in 2015 reached $1.65 billion in 230 sales totaling 9.6 million square feet at an average price per square foot (ppsf) of $ Compare this to 2014, when sales volume ended the year at $1.36 billion in 280 sales totaling 9.1 million square feet at an average ppsf of $ This shows a small shift to larger property sales in 2015 than in 2014, and confirms that commercial investment sales have now recovered from the Great Recession. So far in 2016, investment sales volume was $241 million in 37 sales totaling 1.3 million square feet at an average ppsf of $ This is down slightly from the first quarters of 2014 and 2015, but no so much as to cause worry. Sale volume growth in 2015 was highest for single-tenant retail properties (+43 percent) and shopping centers (+24.2 percent), but was also positive for office properties (+13.9 percent) and industrial properties (+8.5 percent). Modest rate hikes by the Fed could reduce commercial real estate investment activity slightly in 2016 compared to Cap rates averaged 7.4 percent in Recovery Index The recovery index managed six straight months of growth, from Jun 2015 to November 2015, before taking a small dip in December The index increased again in January 2016, reaching 99.7, which places the current economy very near where it was in January To put this another way, it has taken Southern Nevada 11 years to get back to where it was during the boom of the early 2000 s. To say, though, that the economy is back to where it was is not quite right. The economy is back to its heights in aggregate, but many measures of the local economy are not back to their old heights, and many others are well ahead of where they once were. New home sales, for example, is a mere shadow of its former self, and it has shown very little recovery since the Great Recession. Commercial occupancy, gaming revenue, out-of-state drivers license count and port traffic in Los Angeles are are below their heights, though generally ahead of where they were in January New home sales and drivers license count are well below where they were in January 2005, and the population growth they represent was a key ingredient of the old economic order of Southern Nevada. On the other side of the coin, visitor volume and taxable sales are both at or ahead of their heights in the early 2000 s. This, to some extent, represents the new economic order of Southern Nevada, which is more reliant on commerce and tourism than it was in the past. 6 Las Vegas Research & Forecast Report Q Economic Review Colliers International

7 Economic Statistics Las Vegas First Quarter 2016 TYPE MARCH 2016 DECEMBER 2015 MARCH AVERAGE 2015 AVERAGE MONTHLY GROWTH ANNUAL GROWTH 2015 TO 2016 GROWTH (AVERAGE) EMPLOYMENT DATA U.S. Employment 143,774, ,242, ,178, ,550, ,960, % 1.8% 1.1% U.S. Unemployment Rate 5.0% 5.0% 5.5% 4.9% 5.3% 0.0% -9.1% -6.6% Las Vegas MSA 981, ,700 1,306, , , % -24.9% 1.5% Employment Las Vegas MSA 6.5% 6.2% 7.2% 6.5% 6.9% 4.8% -9.7% -5.3% Unemployment Rate Las Vegas MSA 53,900 53,700 49,600 53,600 51, % 8.7% 4.1% Construction Employment Las Vegas MSA Hospitality Employment 276, , , , , % -2.2% -3.7% HOUSING/CONSTRUCTION DATA New Home Sales % -11.0% -23.4% New Home Median Price $312,928 $310,814 $312,204 $311,053 $310, % 0.2% 0.2% Existing Home Sales 2,783 2,679 2,707 2,258 2, % 2.8% -12.2% Existing Home Median Price $220,000 $217,000 $205,000 $219,783 $214, % 7.3% 2.7% Residential Permits % -17.5% -17.3% Residential Permit Value $96,569,230 $94,940,590 $103,107,547 $96,569,230 $102,255, % -6.3% -5.6% Commercial Permits % -8.0% -15.9% Commercial Permit Value $34,404,001 $17,265,296 $32,384,944 $1,495,826 $45,905, % 6.2% -96.7% HOSPITALITY DATA Visitor Volume 3,328,116 3,228,768 3,624,587 3,399,925 3,526, % -8.2% -3.6% Gaming Revenue $863,308,000 $864,349,000 $826,410,000 $836,920,000 $801,371, % 4.5% 4.4% Room Inventory 149, , , , , % -0.7% 0.3% Hotel/Motel Occupancy 87.2% 78.5% 88.6% 86.0% 87.7% 11.1% -1.6% -2.0% Passengers 3,443,923 3,669,005 3,851,199 3,497,810 3,778, % -10.6% -7.4% (McCarran Int'l Airport) Convention Attendance 607, , , , , % 10.1% 44.5% The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. 7 Las Vegas Research & Forecast Report Q Economic Review Colliers International

8 Research & Forecast Report LAS VEGAS INDUSTRIAL Q A Good Start, But > > 2016 got off to a good start in terms of net absorption > > New construction sent vacancy up a tick > > Asking rates continued to rise Economic Indicators INDUSTRIAL Employment RESIDENTIAL Permit Value TRANSPORTION Taxable Sales % -74.8% After a very strong 2015, the first quarter of 2016 seems to be a continuation of the trend of high net absorption. Net absorption was 900,732 square feet in the first quarter of 2016, a bit higher than in the first quarter of 2015, and much higher than in the fourth quarter of The renaissance in industrial construction or more properly warehouse/distribution construction was in full swing, with the market s inventory increasing by almost 1 million square feet. Of course, every silver lining has a cloud, and the cloud this quarter was the completion of a large speculative building without pre-leasing. The addition of more than 400,000 square feet of new, empty space sent vacancy up a tenth of a point to 5.6 percent. This minor increase in vacancy did not dampen the weighted average asking rate, which increased to $0.65 per square foot (psf) on a triple net (NNN) basis. Historical Vacancy Rates and Asking Lease Rates Market Trends Relative to prior period Market Q Market Q2 2016* Vacancy Net Absorption Completions Rental Rate *Projected Summary Statistics Q Las Vegas Market Q Q Q Vacancy Rate 5.6% 5.5% 7.5% 12.0% $0.68 Asking Rent (PSF, NNN) $0.65 $0.64 $ % $0.65 Net Absorption (SF) 900, , , % 6.0% $0.62 $0.59 New Completions (SF) 1,104, , % 2.0% $0.56 $0.53 Overall Asking Rents Per Square Foot Previous Quarter Current Quarter 0.0% 1 Q Q Q Q Q Q Q Q Q 2016 $0.50 Warehouse/Distribution $0.54 $0.53 Light Distribution $0.57 $0.58 Vacancy Asking Rental Rate Light Industrial $0.64 $0.69 Incubator $0.70 $0.73 We think demand will hold steady for the industrial market in Flex $0.86 $0.94

9 Southern Nevada s industrial job market improved in January 2016 (the latest month of data available) compared with January 2015, adding 11,200 jobs in the past twelve months, 6,000 of them in the construction sector. The transportation & warehousing sector added 3,700 jobs over the past twelve months, the manufacturing sector added 1,100 jobs, and the wholesale sector added 400. Southern Nevada s strength as a service economy and a high-growth community appear again to be driving industrial employment growth. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January From December 2015 to December 2016, total employment in Southern Nevada has increased by 18,200 jobs. Southern Nevada s industrial inventory expanded by 1,104,060 square feet in the first quarter of This is the largest quarterly expansion of industrial inventory since the third quarter of 2008, soon after the beginning of the Great Recession. Industrial development has been on the rise over the past three years, but only now is speculative development overtaking build-to-suit development, and this presents dangers. The first spate of speculative development hit the market fully pre-leased, and whetted the appetite of developers for more speculative space. The completion of the first new building at the Lone Mountain Corporate Center this quarter was the first new speculative project completed without pre-leasing since the beginning of the Great Recession. It may not be the last, as preleasing of industrial buildings currently under construction stood at 42 percent. Forward supply stood at 6.5 million square feet in the first quarter of Warehouse/distribution product still dominates the development landscape, but low vacancy and rising asking rates in the light industrial sector presage an increase in development of that product type in the future. Historical Net Absorption vs. Completions 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , Q Q Q 2014 Net Absorption 4 Q 2014 Occupancy vs. Industrial Employment 160, , , , , , , ,000 1 Q Q Q Q Q Q Q Q Q 2015 Completions 3 Q Q Q Q Q % 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% Southern Nevada s industrial market has now posted positive net absorption every quarter since the fourth quarter of This streak was extended in the first quarter of 2016, which posted 900,732 square feet of net absorption. This was an improvement over the fourth quarter of 2015, and was slightly higher than one year ago in the first quarter of Whether the remainder of 2016 will follow suit with 2015 is unknown the potential for that kind of performance exists, but current worries about the health of the national economy call it into question. Gross absorption fell this quarter over last, and has been on the decline since the second quarter of 2015, when it surged to 4.3 million square feet. First quarter gross absorption was 2.7 million square feet, the lowest first quarter gross absorption since Industrial Jobs JAN 2016 Occupancy Rate JAN 2015 CHANGE Construction 53,300 47, ,000 Manufacturing 21,900 20, ,100 Transportation & Warehousing 40,000 36, ,700 Wholesale 21,800 21, Source: Nevada Department of Employment, Training and Rehabilitation Net absorption was positive in the first quarter of 2016 in five of the Valley s seven submarkets. The highest net absorption was experienced in the two submarkets with the largest share of warehouse/distribution product, North Las Vegas (565,203 square feet) and Southwest (303,093 square feet). Net absorption was negative in Henderson (negative 105,917 square feet) and the Northwest submarket (negative 10,972 square feet). 2 Las Vegas Research & Forecast Report Q Industrial Colliers International

10 Industrial vacancy declined in every quarter between the first quarter of 2012 and the fourth quarter of 2015, dropping 14.0 percent to 5.5 percent. The first quarter of 2016 saw the first increase in industrial vacancy in four years. Vacancy increased by 0.1 point to 5.6 percent, despite positive net absorption. Lower overall activity (i.e. gross absorption) and the completion of the 450,731 square foot first phase of the Lone Mountain Corporate Center. The next twelve months will add, potentially, another 1.3 million square feet of vacant industrial space to inventory. Given that this is occurring alongside a trend of lower overall industrial lease activity, there is the potential for further increases in vacancy over the next three quarters. The industries most active in occupying industrial space over the past twelve months were involved in wholesale (most likely serving the Resort Corridor), manufacturing, services and retail. Local companies took about 42 percent of the leased square footage we tracked over this period. Companies headquartered in the Southwest U.S. took 17 percent, while 13 percent was taken by companies from the Great Plains, including Texas, and 11 percent by companies from the Mid-Atlantic region. The weighted average asking lease rate for industrial space increased to $0.65 psf NNN in the first quarter of This was $0.08 higher than one year ago, and $0.01 higher than one quarter ago. If adjusted for inflation, the weighted average asking lease rate would be $0.49 psf NNN, a $0.06 increase from one year ago. The current asking rate, adjusted for inflation, is $0.02 lower than it was during the last economic recovery in Units leased in the first quarter of 2016 had effective lease rates that averaged percent of asking rates. This indicates that more increases in asking rental rates will occur in 2016, probably in spite of potential increases in vacancy, especially if those increases in vacancy are due to new construction rather than vacations of existing industrial space. As rental rates climb, new industrial developments will become more viable, especially of nonwarehouse/distribution product. In 2015, final industrial investment sales volume was $295.8 million in 43 sales that totaled 3.1 million square feet. The average sales price in 2015 was $96.58 psf, and the average cap rate was 7.1 percent, a slight compression from 2014 s average cap rate of 7.3 percent. Year-to-date in 2016, we ve seen industrial investment sales volume of $46.1 million in 24 sales totaling 465,000 square feet. This gives us an average sales price per square foot of $ Southern Nevada s industrial market had just over 1.1 million square feet of product available for sale as investments, with an average asking price of $ psf, and an average cap rate of 6.1 percent, a notable compression of the asking cap rate of 6.4 percent recorded in Using the Consumer Price Index, All Urban Consumers, West Region, Class A Cities, = 100 Industrial Development Pipeline Project Type Submarket Size Pre-Leasing Completion Under Construction 1,462,000 SF Jones Corporate Park Warehouse/Distribution Southwest 416,000 SF 20% Q Sunpoint Business Center Warehouse/Distribution North Las Vegas 312,000 SF 0% Q Black Mountain Distribution Center Warehouse/Distribution Henderson 233,000 SF 100% Q Blue Diamond Business Center 3 Warehouse/Distribution Southwest 172,000 SF 84% Q Parc Post Warehouse/Distribution Southwest 165,000 SF 0% Q Cheyenne Distribution Center Warehouse/Distribution North Las Vegas 164,000 SF 100% Q Planned Construction 4,995,000 SF South 15 Airport Center Warehouse/Distribution Airport 1,323,000 SF 0% 2017 Northgate Development 1-2 Warehouse/Distribution North Las Vegas 806,000 SF 0% 2017 Switch SuperNAP 10 Warehouse/Distribution Southwest 500,000 SF BTS 2017 Henderson Freeway Crossings Warehouse/Distribution Henderson 453,000 SF 0% Q Blue Diamond Business Center 6 Warehouse/Distribution Southwest 430,000 SF 0% 2017 ProLogis North 15 Freeway 1/2 Warehouse/Distribution North Las Vegas 411,000 SF 0% 2017 UFC BTS Industrial Southwest 250,000 SF BTS 2017 Lone Mountain Corporate Park 2 Warehouse/Distribution North Las Vegas 244,000 SF 0% 2017 Henderson Commerce Center IV Warehouse/Distribution Henderson 240,000 SF 0% 2017 ProLogis Beltway Distribution Center Warehouse/Distribution Southwest 211,000 SF 0% 2017 Torrey Park Warehouse/Distribution Southwest 73,000 SF 0% Sunset Road Light Industrial Airport 54,000 SF 0% Q Las Vegas Research & Forecast Report Q Industrial Colliers International

11 Warehouse/distribution space knocked it out of the park in 2015, chocking up 2.4 million square feet of net absorption while adding 1.8 million square feet to total inventory might give the warehouse/ distribution market a run for its money, as the market is asked to absorb 3 million square feet of new speculative industrial space. So far, the market has absorbed (or will absorb, given pre-leasing) 1.3 million square feet. If the market sees vacations of industrial space in the neighborhood of 2.3 million square feet per quarter, which would be average for the past four years, Southern Nevada will need to see gross absorption increase significantly over the next three quarters to keep up. This is possible but unlikely, so expect to see warehouse/distribution vacancy increase over the course of 2016, and warehouse/distribution development to cool by Vacancy in the light distribution sector has been dropping like a stone four quarters, from 11 percent in the first quarter of 2015 to the current 6.2 percent vacancy. Alongside this drop in vacancy, the light distribution sector has experienced over 1 million square feet of net absorption and a $0.08 increase in asking rental rates. Despite this excellent performance, there is no light distribution space currently under construction or planned to begin construction in When warehouse/distribution development cools in 2017, developers may turn their eyes to light distribution. If the lack of potential development of light distribution space strikes you as odd, the lack of light industrial development is even more surprising. Light industrial vacancy stood at only 5 percent in the first quarter of 2016, just half a point higher than warehouse/ distribution. Net absorption of light industrial space has averaged 200,000 square feet per quarter over the past two years, which means the market currently has about 2 months of supply. More importantly, gross absorption of light industrial space has remained steady and strong over the past two years, and asking rental rates have increased by $0.13 per square foot over the past twelve months. Fantastic performance, yet only 54,000 square feet of forward supply. Expect this to change by With available light industrial space on the market drying up and little new supply on the horizon, the immediate beneficiary may be incubator and flex space. The incubator market has seen a drop in vacancy rates similar to that of the light distribution market over the past year, with vacancy dropping from 11.7 percent to 7.7 percent. Flex vacancy over the same period has dropped from 16.8 percent to 12.9 percent. Gross absorption has remained healthy for incubator space, and we think this will remain the case over the next year due to spillover from the tight light industrial market. It would be a mistake to fret much over the potential for increasing industrial vacancy in 2016 for two reasons. First and foremost, the year is not over yet and demand may very well rise to the occasion. The summer months will tell if net absorption increases in the second and third quarters of 2016 as it did in 2015, we will be in for another very strong year. The other reason to keep anxiety at bay is the source of this potential rise in vacancy. If vacancy rises in 2016, it will be because of new development rather than business closures or downsizing. The trajectory for 2016, at this moment, seems good. Visitor volume on the Las Vegas Strip continues to rise, which favors the wholesale sector. Construction, primarily of infrastructure but also of Strip resorts, multifamily and industrial space, appears to be on the rise. We think demand will hold steady for the industrial market in Asking rates will probably continue to increase, especially in the light distribution and light industrial sectors, and proposed development will likely diversify. Of course, every silver lining has a cloud, and the cloud this quarter was the completion of a large speculative building without pre-leasing. - John Stater, Research & GIS Manager Investment Sales YTD No. Sales Square Feet Sold 2,488,000 5,697,000 3,063,000 3,062, ,000 Sales Volume $153.4 MM $352.9 MM $272.7 MM $295.8 MM $46.1 MM Average Price/SF $61.11 $61.94 $89.03 $96.58 $92.94 Average Cap Rate* 8.3% 7.9% 7.3% 7.1% - Average Sale Size (SF) 32,000 98,000 37,000 71,000 21,000 *Cap rate on industrial properties available for sale as investments 4 Las Vegas Research & Forecast Report Q Industrial Colliers International

12 NORTHWEST NORTH LAS VEGAS 15 Significant Industrial Sale Activity Westland Corporate Center 79,000 SF - $7,200,000 $92.00/SF February 2016 Flex WEST CENTRAL EAST LAS VEGAS Raco Distribution Facility 103,000 SF - $7,150,000 $69.00/SF February 2016 Warehouse/Distribution 95 PaulSon Dice Facility 65,000 SF - $3,950,000 $61.00/SF January 2016 Warehouse/Distribution SOUTHWEST 215 AIRPORT HENDERSON FedEx Distribution Center 130,000 SF - $11,950,000 $92.00/SF January 2016 Warehouse/Distribution Spencer Airport Plaza II 29,000 SF - $3,250,000 $112.00/SF February 2016 Light Industrial Lease Activity Property Name Lease Date Lease Term Size Lease Rate Type Black Mountain Distribution Center Feb months 233,000 SF $0.55 NNN Warehouse/Distribution Highland Industrial Center Jan months 19,000 SF $0.49 NNN Light Industrial Patrick Commerce Center Jan months 16,000 SF $0.61 NNN Light Distribution Patrick Airport Center Feb months 6,000 SF $0.57 NNN Incubator Northpoint Business Center Feb months 4,000 SF $0.57 NNN Flex 5 Las Vegas Research & Forecast Report Q Industrial Colliers International

13 Market Comparisons - Las Vegas Industrial Market TYPE TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANCY SF TOTAL VACANT SF VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETIONS CURRENT QTR SF COMPLETIONS YTD SF UNDER CONSTRUCTION SF PLANNED CONSTRUCTION SF WEIGHTED AVG ASKING RENTAL RATE AIRPORT SUBMARKET WH 5,856, , % - 646, % 10.8% (15,865) (15,865) ,440 $0.62 LD 3,236, , % 17, , % 9.0% 17,085 17, $0.68 LI 2,968, , % - 276, % 10.2% 18,565 18, ,000 $0.97 INC 1,523, , % 3, , % 15.8% 56,543 56, $0.86 FLX 1,508, , % 3, , % 16.5% (30,605) (30,605) $1.12 Total 15,092,938 1,653, % 23,599 1,676, % 11.3% 45,723 45, ,440 $0.80 EAST LAS VEGAS SUBMARKET WH 1,115, % % 4.9% 54,912 54, $- LD 532,163 11, % - 11, % 1.2% (5,092) (5,092) $0.35 LI 1,798,241 43, % - 43, % 3.1% 11,008 11, $0.56 INC 281,755 30, % - 30, % 12.5% 4,940 4, $0.54 FLX 233,692 4, % 31,339 36, % 6.5% 10,276 10, $0.60 Total 3,961,397 90, % 31, , % 4.2% 76,044 76, $0.53 HENDERSON SUBMARKET WH 6,690, , % 90, , % 1.4% (151,815) (151,815) ,533,630 $0.57 LD 1,634, , % 18, , % 5.2% (16,305) (16,305) $0.59 LI 3,644, , % - 163, % 5.5% 35,651 35, $0.64 INC 497,448 17, % 2,654 20, % 6.6% 15,328 15, $0.56 FLX 1,340, , % - 136, % 12.6% 11,224 11, $0.95 Total 13,807, , % 110, , % 4.2% (105,917) (105,917) ,533,630 $0.67 NORTH LAS VEGAS SUBMARKET WH 21,508, , % 0 731, % 1.4% 397, , , , ,305 1,624,230 $0.40 LD 5,053, , % 50, , % 9.2% 34,468 34, $0.46 LI 9,023, , % 40, , % 5.3% 114, , $0.57 INC 717,495 62, % 0 62, % 9.7% 7,521 7, $0.66 FLX 796, , % 0 109, % 15.1% 10,965 10, $0.62 Total 37,099,380 1,678, % 90,619 1,769, % 3.9% 565, , , , ,305 1,624,230 $0.48 NORTHWEST SUBMARKET WH 224, % % 0.0% $- LD 50,000 12, % - 12, % 7.6% (8,359) (8,359) $0.95 LI 341,430 31, % - 31, % 10.1% 2,469 2, $0.64 INC 99,427 7, % - 7, % 2.0% (5,104) (5,104) $0.97 FLX 740, , % - 129, % 17.4% $0.94 Total 1,455, , % - 180, % 11.6% (10,972) (10,972) $0.89 SOUTHWEST SUBMARKET WH 14,798, , % 53, , % 4.5% 153, , , , ,234 1,464,320 $0.57 LD 7,199, , % 47, , % 4.9% 75,430 75, $0.71 LI 10,467, , % 8, , % 6.1% 37,625 37, $0.66 INC 2,372, , % - 113, % 5.9% 27,086 27, $0.68 FLX 1,684, , % 2, , % 10.0% 9,867 9, $0.86 Total 36,523,031 1,898, % 112,207 2,011, % 5.4% 303, , , , ,234 1,464,320 $0.65 WEST CENTRAL SUBMARKET WH 2,255,565 17, % - 17, % 0.8% $0.33 LD 949,515 60, % - 60, % 9.2% 26,600 26, $0.40 LI 7,901, , % - 363, % 4.7% 9,314 9, $0.70 INC 2,511, , % 12, , % 7.6% (15,033) (15,033) $0.71 FLX 161,527 16, % - 16, % 14.5% 6,677 6, $0.87 Total 13,779, , % 12, , % 5.0% 27,558 27, $0.67 MARKET TOTAL WH 52,450,047 2,370, % 143,726 2,514, % 3.4% 438, ,011 1,104,060 1,104,060 1,446,539 5,101,620 $0.53 LD 18,655,148 1,149, % 133,327 1,282, % 6.9% 123, , $0.58 LI 36,145,598 1,819, % 48,344 1,867, % 5.8% 229, , ,000 $0.69 INC 8,003, , % 18, , % 8.9% 91,281 91, $0.73 FLX 6,465, , % 37, , % 13.5% 18,426 18, $0.94 Total 121,719,635 6,789, % 380,928 7,169, % 5.6% 900, ,732 1,104,060 1,104,060 1,446,539 5,155,620 $0.65 QUARTERLY COMPARISON AND TOTALS Q ,719,635 6,789, % 380,928 7,169, % 5.6% 900, ,732 1,104,060 1,104,060 1,446,539 5,155,620 $0.65 Q ,615,575 6,585, % 110,304 6,696, % 6.2% 575,402 5,108, ,608 1,914,601 2,224,326 4,361,662 $0.64 Q ,441,967 6,987, % 467,329 7,454, % 6.9% 1,771,327 4,533, ,290 1,740,993 1,689,817 6,390,005 $0.61 Q ,489,677 7,806, % 406,957 8,213, % 7.7% 1,863,470 2,761, , ,703 1,731,785 5,453,451 $0.57 Q ,700,974 8,881, % 294,896 9,176, % 8.5% 898, , ,633,705 6,665,344 $0.57 Q ,700,974 9,779, % 303,740 10,083, % 9.0% 892,946 3,990, ,520 1,095, ,161 3,071,639 $0.56 Q ,256,454 10,228, % 364,977 10,593, % 9.7% 868,758 3,097,093 14, , , ,759 $0.56 WH = Warehouse LD = Light Distribution LI = Light Industrial INC = Incubator FLX = Flex 6 Las Vegas Research & Forecast Report Q Industrial Colliers International

14 Research & Forecast Report LAS VEGAS OFFICE Q Office Picks Up Steam > > The office market had strong net absorption in the first quarter of 2016 > > No new construction in the first quarter, but it is on the way in 2016 > > Asking rates continued to rise in response to increased demand Economic Indicators Office Employment Office SF/Job +2.8% Sublease Vacancy % Q4 Over the past three years, and despite a few bad quarters, Southern Nevada s office market has managed a pretty strong recovery. Vacancy is still quite high, but it is nearing levels we might deem the new normal, and could very well exceed expectations and return to the long term 10 percent average vacancy we used to know and love. The first quarter of 2016 extended its run of positive net absorption to five quarters, with 375,054 square feet of net absorption. This brought vacancy down an impressive 0.8 points to 16.7 percent. There were no new completions this quarter, and asking rents increased to $2.00 per square foot (psf) on a Full Service Gross (FSG) basis. Market Indicators Relative to prior period Market Q Market Q1 2016* VACANCY NET ABSORPTION COMPLETIONS RENTAL RATE *Projected Historical Vacancy Rates and Asking Lease Rates Summary Statistics Q Las Vegas Market Q1-16 Q4-15 Q % $2.10 Vacancy Rate 16.7% 17.5% 18.6% 20.0% 19.0% $2.05 $2.00 Asking Rent (PSF, FSG) $2.00 $1.97 $ % $1.95 Net Absorption (SF) 375,054 98, , % $1.90 New Completions (SF) 0 123, , % 15.0% 1 Q Q Q 2014 Vacancy 4 Q Q Q Q Q 2015 Asking Rental Rate 1 Q 2016 $1.85 $1.80 Overall Asking Rents Per Square Foot Previous Quarter Current Quarter Class A $2.65 $2.66 Class B $1.96 $2.04 the willingness by businesses to expand appears to be increasing. Class C $1.65 $1.64

15 Southern Nevada s office job market improved in January 2016 (the latest month of data available) compared with January 2015, adding approximately 13,500 jobs in the past twelve months, with the largest contribution coming from the professional/business services sector (+6,500 jobs), and with the information sector dropping 100 jobs. The health care sector added 6,100 new jobs over the past year, and the financial services sector added 1,000 jobs. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January From January 2015 to January 2016, total employment in Southern Nevada has increased by 32,600 jobs. Historical Net Absorption vs. Completions 800, , , , , , , ,000 0 The office market had a welcome respite from new construction in the first quarter of 2016, after inventory expanded by almost 400,000 square feet in The market had 325,000 square feet of office space under construction, almost half of it being build-to-suit space for government tenants in the Downtown submarket. We think 298,000 square feet of that office space will be completed in the second quarter of Another 421,000 square feet of office space is planned to begin construction within the next twelve months, with completion for most of it scheduled for , , ,000 1 Q Q Q 2014 Net Absorption Occupancy vs. Office Employment 4 Q Q Q Q 2015 Completions 4 Q Q 2016 Southern Nevada s office market had 375,054 square feet of net absorption in the first quarter of 2016, following four straight quarters of positive net absorption in Net absorption in the first quarter of 2016 was a bit more than half of that recorded in the first quarter of 2015, but was more than triple the net absorption in the fourth quarter of , , , , , % 83.0% 82.0% 81.0% 80.0% In the first quarter of 2016, net absorption was highest in the East Las Vegas submarket (126,603 square feet), followed by Airport (99,969 square feet) and West Central (88,352 square feet). It seems that net absorption favors the established office submarkets one quarter, and the newer submarkets in another. Negative net absorption occured in the Downtown and North Las Vegas submarkets. 105, ,000 1 Q Q Q 2014 Office Jobs 4 Q Q Q Q Q 2015 Occupancy Rate 1 Q % 78.0% Demand for office space over the past twelve months came primarily from manufacturing (290,547 square feet), professional and business services (272,562 square feet) and financial activities, especially mortgage and title companies (150,344 square feet). Mortgage and title companies have been stimulated by the recent expansion of the Valley s construction industry. On the manufacturing side, keep in mind that manufacturing includes printing and publishing and publishing includes digital media like websites. The trend of taking less space per office employee remains a headwind to office market growth, but the willingness by businesses to expand appears to be increasing. JAN 2016 JAN 2015 CHANGE Information 10,100 10, Financial Activities 43,600 42, ,000 Professional & Business Services 125, , ,500 Health Care 54,800 60, ,100 Source: Nevada Department of Employment, Training and Rehabilitation Positive net absorption drove the office vacancy rate down to 16.7 percent in the first quarter of An increase in net absorption and a lack of inventory expansion get the credit. Current vacancy is 1.9 percentage points lower than one year ago. At recent rates of net absorption, the office market could stabilize at 10.0 percent vacancy in approximately 3 years, assuming little or no inventory expansion. Office vacancy increased in two of the Valley s eight submarkets in the first quarter of 2016, with the North Las Vegas submarket experiencing the largest increase (1.8 percentage points), followed by Downtown (0.7 points). The East Las Vegas submarket experienced the sharpest decrease in vacancy, 2.3 points, to 21.3 percent. Large 2 Las Vegas Research & Forecast Report Q Office Colliers International

16 vacancy decreases were also experienced in the West Central and Airport submarkets, and smaller decreases occurred in the Southwest, Northwest, and Henderson submarkets. The Valley s lowest vacancy rate remains in Downtown, at 13.2 percent (but rising), while North Las Vegas had the Valley s highest vacancy rate at 22.8 percent. Over the next few years, the East Las Vegas submarket should see the completion of a major expansion and renewal of the Las Vegas Convention Center, the completion of the nearby World Resorts property on the Strip and the potential construction of a new stadium near UNLV. This Midtown renaissance should stimulate demand for office space in the East Las Vegas submarket. Vacancy in Class A office stood at 22.0 percent in the first quarter of 2016, a decrease of 1.1 points from the fourth quarter of 2015, and a year-over-year decrease of 0.7 points. Year-over-year, class B product saw vacancy decrease by 1.6 percentage points to 16.1 percent, while vacancy in Class C office decreased by 2.6 percentage points to 15.4 percent. The weighted average asking rental rate for office space in Southern Nevada increased to $2.00 per square foot (psf) on a full service gross (FSG) basis in the first quarter of 2016, a $0.11 psf increase from one year ago and a sign that the availability of desirable space in the market is tightening. The Southwest continued to boast the Valley s highest office asking rate, at $2.19 psf FSG. This is followed by the Northwest s $2.09 psf FSG and Downtown s $2.08 psf FSG. The Valley s lowest average asking rate is in the West Central submarket, at $1.67 psf FSG. Office space available for sublease took a significant jump in the first quarter of 2014 due to Citibank s call center operations center in the Northwest being put on the market. This brought available sublease space to 427,367 square feet. At the beginning of 2016, available sublease space has finally decreased to 383,992 square feet from a high of 520,969 square feet experienced just last quarter. This sharp decline is due entirely to the sublease of 138,000 square feet at 8725 W Sahara Avenue to Sutherland Global Services. The office investment sales got off to a slow start in 2016, with sales volume of $13.9 million in five sales totaling 86,000 square feet with an average price per square foot of $ and an average cap rate of 9.2 percent. Investment sales lagged slightly in 2015 compared to 2014, with the year-end figures amounting to over 2 million square feet in 68 sales, with a sales volume of $384 million and an average sales price per square foot of $ There was 1.7 million square feet of office space available for sale as investments in the first quarter of 2016, with an average asking price of $ psf and an average asking cap rate of 7.3 percent. Continued on Page 5 Investment Sales Activity YTD No. Sales Square Footage 3,929,000 3,512,000 2,505,000 2,044,000 86,000 Sales Volume $261.0 MM $571.9 MM $296.4 MM $384.1 MM $13.9 MM Average Price/SF $89.11 $ $ $ $ Average Cap Rate* 8.2% 7.6% 7.7% 7.5% 9.2% Average Sale Size (SF) 34,000 39,000 35,000 30,000 17,000 *Cap rate on office properties available for sale as investments Office Development Pipeline Project Type Submarket Size (SF) Status Completion Build-To-Suit 129,000 Federal Justice Tower Class A Downtown 129,000 Under Construction Q Supreme Court Building Class B Downtown 27,000 Under Construction Q Build-To-Suit Total 156,000 Tivoli Village Class A Northwest 134,000 Under Construction Q The Grid Class A Downtown 125,000 Planned 2017 Centennial Hills Center Class B Northwest 124,000 Planned 2017 The Square Class C Southwest 80,000 Planned 2017 Seven Hills Plaza D Class B Henderson 42,000 Planned Q The Park at Spanish Ridge Class B Southwest 35,000 Under Construction Q Cadence Class C Henderson 30,000 Planned 2017 Stone Creek Professional Plaza Class C Southwest 20,000 Planned 2017 Speculative Total 590,000 Office Total 746,000 3 Las Vegas Research & Forecast Report Q Office Colliers International

17 215 NORTH LAS VEGAS Significant Office Sale Activity 7951 Deer Springs Way 95 39,000 SF - $3,800,000 $100.00/SF February 2016 NORTHWEST 15 Class B Flamingo Trails SUMMERLIN WEST CENTRAL DOWN TOWN 95 EAST LAS VEGAS 5,000 SF - $930,000 $176.00/SF February 2016 Class C Oakey Office Building 101,000 SF - $30,100,000 $299.00/SF March 2016 Class B 215 AIRPORT The Park at Spanish Ridge 7,000 SF - $1,150,000 $169.00/SF SOUTHWEST HENDERSON February 2016 Class C Warm Springs Park 21,000 SF - $2,200,000 $107.00/SF February 2016 Class C Lease Activity Property Name Lease Date Lease Term Size Lease Rate Type Marnell Corporate Center Feb months 44,000 SF $2.44 FSG Class A Durango Commons Feb months 35,000 SF $1.12 NNN Class B Augusta Park Jan months 15,000 SF $1.30 NNN Class C The Park Business Center Jan months 14,000 SF $1.34 NNN Class C Summerlin One Feb months 13,000 SF $3.12 FSG Class A 4 Las Vegas Research & Forecast Report Q Office Colliers International

18 Market Comparisons - Las Vegas Office Market CLASS TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANT SF VACANCY RATE TOTAL VACANT CURRENT SF QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETIONS CURRENT QTR SF COMPLETIONS YTD SF UNDER CONSTRUCTION SF PLANNED CONSTRUCTION SF WEIGHTED AVG ASKING RENTAL RATE AIRPORT SUBMARKET A 729, , % 1, , % 32.5% 2,598 2, $2.80 B 2,400, , % 28, , % 12.8% 77,553 77, $1.94 C 3,186, , % 17, , % 16.2% 19,818 19, $1.66 Total 6,315, , % 47, , % 16.8% 99,969 99, $2.01 DOWNTOWN SUBMARKET A 1,103, , % 13, , % 20.8% 5,692 5, , ,000 $2.56 B 2,429, , % - 289, % 10.0% (45,013) (45,013) ,600 - $2.04 C 1,497, , % 3, , % 11.5% 2,696 2, $1.54 Total 5,030, , % 17, , % 12.8% (36,625) (36,625) , ,000 $2.08 EAST LAS VEGAS SUBMARKET A 1,353, , % - 258, % 24.3% 70,335 70, $3.11 B 1,542, , % - 447, % 31.1% 32,306 32, $1.68 C 2,629, , % 1, , % 18.9% 23,962 23, $1.36 Total 5,524,513 1,177, % 1,600 1,179, % 23.6% 126, , $1.87 HENDERSON SUBMARKET A 583, , % - 167, % 28.4% -1,529 (1,529) $2.64 B 2,550, , % 5, , % 16.7% 4,047 4, ,000 $2.13 C 2,213, , % 6, , % 17.6% 20,448 20, ,000 $1.73 Total 5,347, , % 11, , % 18.3% 22,966 22, ,000 $2.07 NORTH LAS VEGAS SUBMARKET A - - n/a - - n/a n/a $- B 245,696 92, % - 92, % 50.3% 5,252 5, $1.92 C 538,960 86, % - 86, % 12.5% (19,097) (19,097) $1.62 Total 784, , % - 179, % 24.4% (13,845) (13,845) $1.77 NORTHWEST SUBMARKET A 1,825, , % 7, , % 26.0% 35,953 35, ,003 - $2.36 B 3,537, , % 33, , % 14.8% (19,105) (19,105) ,000 $2.11 C 3,341, , % 8, , % 13.5% 26,073 26, ,100 $1.78 Total 8,704,828 1,379, % 49,245 1,428, % 16.7% 42,921 42, , ,100 $2.09 SOUTHWEST SUBMARKET A 828, , % 10, , % 11.0% (44,108) (44,108) $2.74 B 2,964, , % 47, , % 22.0% 73,672 73, ,663 42,000 $2.38 C 3,512, , % 2, , % 16.1% 15,149 15, ,040 $1.87 Total 7,305,698 1,205, % 60,301 1,266, % 17.9% 44,713 44, , ,040 $2.19 WEST CENTRAL SUBMARKET A 157,624 25, % - 25, % 19.3% $2.46 B 1,924, , % - 322, % 23.1% 119, , $1.85 C 3,020, , % 4, , % 17.1% (30,997) (30,997) $1.52 Total 5,102, , % 4, , % 19.4% 88,352 88, $1.67 MARKET TOTAL A 6,581,184 1,448, % 32,963 1,481, % 23.7% 68,941 68, , ,000 $2.66 B 17,595,206 2,835, % 114,870 2,949, % 18.2% 248, , , ,000 $2.04 C 19,940,026 3,074, % 44,293 3,118, % 15.9% 58,052 58, ,140 $1.64 Total 44,116,416 7,357, % 192,126 7,549, % 18.0% 375, , , ,140 $2.00 QUARTERLY COMPARISON AND TOTALS Q ,116,416 7,357, % 192,126 7,549, % 18.0% 375, , , ,140 $2.00 Q ,116,416 7,732, % 197,676 7,930, % 17.9% 98,619 1,277, , , , ,140 $1.97 Q ,992,799 7,707, % 150,546 7,857, % 18.8% 402,285 1,179,243 46, , , ,140 $1.95 Q ,946,149 8,063, % 182,799 8,245, % 19.0% 111, ,958 16, , , ,140 $1.91 Q ,930,097 8,158, % 172,615 8,331, % 20.0% 665, , , , , ,140 $1.89 Q ,717,209 8,611, % 146,951 8,758, % 19.1% (171,446) 564, , , , ,140 $1.90 Q ,448,789 8,171, % 111,340 8,282, % 19.1% 54, ,172 12, , , ,040 $1.87 Continued from Page 3 Southern Nevada s office market recovery as a long time coming, but appears to have finally taken root. The past two years have seen over 2 million square feet of net absorption, bringing vacancy down from almost 20 percent to 16.7 percent will not be without inventory expansion, as 325,000 square feet of new office space is now under construction. Much of this is pre-leased, so the impact should be minimal. This means that another strong year of net absorption, in the 1 million square foot range, could see vacancy rates fall to 15 percent, which we would count as normalized vacancy given the altered expectations of the post-great Recession era. 5 Las Vegas Research & Forecast Report Q Office Colliers International

19 Research & Forecast Report LAS VEGAS RETAIL Q More Expasion for Retail Market > > The retail market continued its second post-recession expansion Economic Indicators > > This is being helped by decreasing asking rates and expansion by big box retailers RETAIL Employment RETAIL Taxable Sales RETAIL SF/Job > > Taxable retail sales remain strong, but retail employment growth continues to disappoint % +5.1% Q Southern Nevada s retail market appeared to be back in growth mode. The market managed 285,353 square feet of net absorption in the first quarter of 2016, more than one quarter ago and also more than one year ago. This brought the vacancy rate down to 9.1 percent. This is still higher than the long-term market average, but it s moving in the right direction. Retail completions totaled 80,000 square feet in the first quarter, with potentially 382,000 square feet of additional completions scheduled for The asking rental rate for retail space decreased to $1.30 per square foot (psf) on a triple-net (NNN) basis. Market Trends Relative to prior period Market Q Market Q2 2016* VACANCY NET ABSORPTION COMPLETIONS RENTAL RATE *Projected Historical Vacancy Rates and Asking Lease Rates 11.0% 10.0% 9.0% 8.0% $1.32 $1.29 Summary Statistics Q Las Vegas Market Q Q Q Vacancy Rate 9.1% 9.5% 9.9% Asking Rent (PSF, NNN) $1.30 $1.31 $1.26 Net Absorption (SF) 285,353 89, , % $1.26 New Completions (SF) 80,000 29, % 5.0% 1 Q Q Q Q Q Q Q Q Q 2016 $1.23 Overall Asking Rents Per Square Foot Previous Quarter Current Quarter Power Center $1.61 $1.18 Community Center $1.26 $1.21 Southern Nevada s retail market appears to be back in growth mode. Neighborhood Center $1.36 $1.46 Strip Center $1.18 $1.16

20 According to the Nevada Department of Employment, Training and Rehabilitation, Southern Nevada s retail job market improved significantly in January 2016 (the latest month of data available) compared with January 2015, adding approximately 5,400 jobs in the past twelve months. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January From December 2015 to December 2016, total employment in Southern Nevada increased by 18,200 jobs. The Nevada Department of Taxation reports that Clark County s taxable retail sales for the fourth quarter of 2015 (the most recent quarter of data available) totaled $7.2 billion, up from $6.8 billion in taxable retail sales recorded in the third quarter of 2015, and better than the $6.9 billion in taxable retail sales recorded in the fourth quarter of The highest year-over-year growth in taxable retail sales were in building material and garden equipment and supplies (7.6 percent growth), followed closely by food service and drinking places (7.5 percent). Home furnishings also posted strong 6.3 percent growth. Non-store retailers, by comparison, managed 20.6 percent growth year-overyear. Taxable sales decreased by 20.9 percent for miscellanous store retailers, 8.7 percent for electronics and appliance retailers and 3.1 percent for apparel retailers. The only retail development completed in Southern Nevada in the first quarter of 2016 was the 80,000 square foot Durango Arby Plaza neighborhood center in the Southwest submarket. Forward supply stood at 1,033,000 square feet, which would represent a mild expansion of Southern Nevada s retail inventory if it all were completed. Of this, 243,000 square feet is currently under construction, with 61,000 square feet slated for completion by the second quarter of The most notable new retail project in Southern Nevada, though not tracked in our numbers, is the freestanding IKEA retail building in the Southwest, which should initially be 351,000 square feet with the potential for future expansion, will open in May Historical Net Absorption vs. Completions 400, , , , , , ,000 1 Q Q Q Q Q Q Q Q Q 2016 Net Absorption Occupancy vs. Retail Employment 82,000 80,000 78,000 76,000 74,000 72,000 Completions 93.0% 92.0% 91.0% 90.0% 89.0% 88.0% 70, % 1 Q Q Q Q Q Q Q Q Q 2016 Retail Jobs Occupancy Rate Net absorption totaled 285,353 square feet in the first quarter of This was more than three times the net absorption recorded one quarter ago, and almost double the net absorption recorded one year ago. The occupation of five big box spaces, three in the Northwest submarket, one in Henderson and one in North Las Vegas, played a significant role in boosting net absorption this quarter. Net absorption was positive in six of the Valley s eight submarkets, with only the Northeast and Downtown submarkets posting negative net absorption. Net absorption was highest this quarter in the Northwest submarket (118,563 square feet), followed by the Southwest (81,363 square feet). The Southwest and Henderson submarkets are experiencing strong growth in multifamily development, which should boost demand for retail in both submarkets over the next twelve months. Gross absorption of retail product totaled 1.1 million square feet in the first quarter of 2016, a bit higher than in the fourth quarter of 2015, but almost a half million square feet lower than one year ago in the 2 Las Vegas Research & Forecast Report Q Retail Colliers International

21 first quarter of Higher net absorption coupled with lower gross absorption suggests a more stable market, with fewer existing retailers downsizing or closing up shop entirely. Retail vacancy in Southern Nevada stood at 9.1 percent in the first quarter of 2016, a decrease of 0.8 points from the first quarter of 2015 s vacancy of 9.9 percent. Southern Nevada s retail market is now in its second expansion since the end of the Great Recession, the first occurring between 2012 and At current rates of net absorption, it would take the retail market 4.8 years to get back to a normalized 5 percent vacancy rate. Among submarkets, the Valley s highest vacancy this quarter was 13.4 percent in University East, followed by 10.2 percent in Downtown and West Central. Vacancy has been on the rise in the Downtown submarket over the past few quarters. The Northwest submarket had the lowest vacancy rate in the Valley at 6.8 percent, followed by Northeast at 7.8 percent. All submarkets but Downtown and Northeast saw vacancy decrease in the first quarter. The average asking rental rate for retail space in Southern Nevada stood at $1.30 per square foot (psf) on a Triple-Net basis (NNN). This was $0.01 lower than in the fourth quarter of 2015, but $0.04 higher than one year ago. Adjusting for inflation, asking rental rates are now $0.96 psf NNN in 2002 dollars, $0.44 psf lower than in Over the past quarter, two submarkets, North Las Vegas and University East, saw asking rental rates increase by $0.02 psf and $0.06 psf respectively. Two submarkets, Downtown and Henderson, saw no growth in asking rates. All other submarkets saw asking rental rates decrease quarter-over-quarter, with the largest decrease being $0.09 psf in the Northeast submarket. Since the fourth quarter of 2015, power centers, community centers and strip centers saw their average asking rental rate decrease in the first quarter of 2016, by $0.06 psf in power centers, $0.05 psf in community centers and by $0.02 psf in strip retail. Neighborhood centers saw a $0.10 psf increase in asking rates over the same period. Single Tenant Retail YTD No. Sales Square Footage Sold 319, , , ,000 94,000 Sales Volume $78.2 MM $146.0 MM $192.3 MM $274.8 MM $34.4 MM Average Price/SF $ $ $ $ $ Average Sale Size (SF) 13,000 18,000 9,000 14,000 6,000 Cap Rate 7.2% 7.2% 7.0% Shopping Center Retail YTD No. Sales Square Footage Sold 1,781,000 3,892,000 2,888,000 3,635, ,000 Sales Volume $194.0 MM $378.4 MM $561.1 MM $697.0 MM $178.1 Average Price/SF $ $97.21 $ $ $ Average Sale Size (SF) 59,000 81,000 47,000 60,000 87,000 Cap Rate 8.9% 7.7% 7.1% Retail Development Pipeline Project Type Submarket Size (SF) Completion Silverado Promenade (Las Vegas & Silverado Ranch) Neighborhood Center University East 130,000 Q Decatur 215 (Decatur & I-215) Community Center Northwest 52,000 Q Whitney Ranch Retail (Whitney Ranch & Sunset) Strip Retail Henderson 42,000 Q Upscale Retail Plaza (Rainbow & Warm Springs) Strip Retail Southwest 19,000 Q Under Construction Total 243,000 St Rose Square (St Rose & Amigo) Neighborhood Center Henderson 466, Union Village (Galleria & Gibson) Strip Retail Henderson 125, Caroline s Court (Durango & El Capitan) Community Center Northwest 119, Decatur 215 (Decatur & I-215) Community Center Northwest 100, DCs Plaza (Durango & Farm) Neighborhood Center Northwest 73, Silverado Ranch Boulevard (Silverado Ranch & Bermuda) Strip Retail University East 66, Buffalo Plaza (Buffalo & Warm Springs) Strip Retail Southwest 53, Centennial Hills Center (Durango & Grand Montecito) Strip Retail Northwest 31, Planned Construction Total 1,033,000 3 Las Vegas Research & Forecast Report Q Retail Colliers International

22 Shopping center investment sales volume in 2015 was $697.0 million in 61 sales totaling 3.6 million square feet. The average sales price was $ psf, and the average cap rate was 7.7 percent. So far in 2016, investment sales volume was $178.1 million in 11 sales totaling 960,000 square feet with an average sales price per square foot of $ and an average cap rate of 7.1 percent. Single-tenant retail investment sales volume in 2015 was $274.8 million in 58 sales totaling 838,000 square feet. The average sales price was $ psf, and the average cap rate was 7.2 percent. So far in 2016, single-tenant retail investment volume was $34.4 million in 17 sales totaling 94,000 square feet with an average price per square foot of $ and an average cap rate of 7.0 percent. Single-tenant retail owner/user sales volume so far in 2016 was $14.0 million in 10 sales totaling 71,000 square feet with an average sales price of $ psf. Retailers slated to enter Southern Nevada or expanding here include Paul Mitchell, Discount Tire, Lolo s Chicken & Waffles, Chick-Fil-A, PDQ Chicken, Café Rio, Five Guys Burger & Fries, Black Bear Diner, Wingnutz, Pei Wei, and Cheeseburger Cheeseburger. Target is introducing a new Target Express concept to compete with Dollar General or Walgreens, though no locations have yet been announced in Southern Nevada. Walmart Neighborhood Market is planning locations at Durango & Hualapai and Boulder & Russell, and Smith s Marketplace, a 128,450 square foot (plus fuel center) concept, looking into putting stores in the Cadence MPC and Skye Canyon. With five big box leases in the first quarter of 2016, one might be tempted to credit the quarter s strong performance solely to large retailers. Those five new big box tenants added up to 324,382 square feet, which was impressive, but it was partially offset by 227,411 square feet of newly vacated big box space in the Valley. This means that the lion s share of net absorption (66 percent) was due to expansion by smaller retailers. This makes Southern Nevada s current retail expansion widespread and, hopefully, sustainable. Southern Nevada s current retail expansion [is] widespread and, hopefully, sustainable - John Stater, Research & GIS Manager Las Vegas Households Ave. HH Income (2015) Occupied Retail Space (2015 Average) Occupied Retail Space (2016 Projected) Downtown 36,500 $37,500 1,940,000 1,949,000 Henderson 107,100 $78,000 9,237,000 9,779,000 North Las Vegas 71,600 $62,000 5,552,000 5,993,000 Northeast 78,600 $50,400 3,099,000 3,237,000 Northwest 149,400 $74,200 12,557,000 13,199,000 Southwest 91,100 $75,900 7,644,000 8,421,000 University East 104,200 $54,200 7,597,000 7,905,000 West Central 54,600 $49,000 6,208,000 6,298,000 Source of Demographic Data: Claritas 4 Las Vegas Research & Forecast Report Q Retail Colliers International

23 215 NORTH LAS VEGAS Significant Retail Sale Activity Rainbow Plaza North 290,000 SF - $48,000, $165/SF January 2016 NORTHWEST 15 Power Center Lake Mead Blvd. Retail WEST CENTRAL DOWN TOWN NORTHEAST LAS VEGAS 5,600 SF - $4,900,000 $871/SF February 2016 Freestanding Rainbow Plaza South ,000 SF - $20,400,000 $155/SF UNIVERSITY AIRPORT January 2016 Neighborhood Center SunMark Plaza ,000 SF - $59,800,000 $211.00/SF January 2016 SOUTHWEST HENDERSON Power Center RESORT CORRIDOR Sunset Plaza 34,000 SF - $9,500,000 $277/SF January 2016 Community Center Lease Activity Property Name Tenant Lease Date Lease Term Size Lease Rate Type Craig Rd Retail Burlington Coat Jan months 124,500 SF $1.02 NNN Community Sahara Durango Center Smiths Feb months 54,000 SF $0.50 NNN Community Longford Shoppes Dollar Tree Jan months 14,000 SF $0.81 NNN Neighborhood Pecos Legacy Center Step Up Academy Feb months 3,900 SF $1.47 NNN Community Eastern Ave Retail Muddy Mutts Jan months 3,600 $1.49 NNN Strip 5 Las Vegas Research & Forecast Report Q Retail Colliers International

24 Market Comparisons - Las Vegas Retail Market TYPE TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANT SF TOTAL VACANT SF VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETIONS CURRENT QTR SF COMPLETIONS YTD SF UNDER CONSTRUCTION SF PLANNED CONSTRUCTION SF WEIGHTED AVG ASKING RENTAL RATE DOWNTOWN PC - - n/a - - n/a n/a $- CC 607,055 78, % - 78, % 9.4% (20,839) (20,839) $1.37 NC 518,070 54, % - 54, % 10.5% $1.00 SC 1,022,022 86, % - 86, % 7.0% (14,399) (14,399) $1.41 Total 2,147, , % - 218, % 8.5% (35,238) (35,238) $1.26 HENDERSON PC 2,896, , % - 201, % 8.9% 56,523 56, $1.71 CC 2,646, , % - 150, % 5.5% (6,142) (6,142) $1.31 NC 2,870, , % 221, , % 16.3% (19,985) (19,985) $1.68 SC 1,883, , % 3, , % 13.0% 22,347 22, , ,000 $1.08 Total 10,296, , % 221,052 1,120, % 10.8% 52,743 52, , ,000 $1.36 NORTH LAS VEGAS PC 774,065 31, % - 31, % 4.9% 6,590 6, $3.00 CC 2,311, , % - 188, % 8.0% (2,665) (2,665) $1.36 NC 1,806, , % - 143, % 6.9% (19,105) (19,105) $1.55 SC 1,286, , % - 235, % 20.9% 33,145 33, $1.06 Total 6,178, , % - 599, % 10.0% 17,965 17, $1.26 NORTHEAST PC - - n/a - - n/a n/a $- CC 1,295,615 88, % 18, , % 7.6% (8,677) (8,677) $1.08 NC 1,306,795 84, % 62, , % 12.6% 17,473 17, $1.55 SC 768,914 91, % - 91, % 5.7% (47,218) (47,218) $0.84 Total 3,371, , % 80, , % 9.1% (38,422) (38,422) $1.10 NORTHWEST PC 3,171, ,480 n/a - 224, % 7.5% 13,186 13, $1.60 CC 4,336, , % 73, , % 6.2% 64,932 64, , ,982 $1.29 NC 3,636, , % 30, , % 13.0% 30,823 30, ,550 $1.25 SC 2,488, , % - 242, % 10.2% 9,622 9, ,000 $1.24 Total 13,633, , % 103,920 1,028, % 9.1% 118, , , ,532 $1.37 SOUTHWEST PC 944, % 6,900 6, % 0.7% $- CC 2,616, , % 1, , % 8.9% 7,053 7, $1.63 NC 2,303, , % - 174, % 7.2% 66,189 66,189 80,000 80, $1.78 SC 2,457, , % - 270, % 11.3% 8,121 8, ,700 $1.55 Total 8,321, , % 7, , % 8.2% 81,363 81,363 80,000 80,000-52,700 $1.59 UNIVERSITY EAST PC 1,210, , % - 144, % 12.0% 1,000 1, $1.23 CC 2,761, , % 16, , % 16.1% 48,644 48, $0.81 NC 1,953, , % 115, , % 10.9% 16,638 16, ,588 - $1.24 SC 2,866, , % 8, , % 17.1% (33,145) (33,145) ,851 $1.08 Total 8,792,265 1,175, % 132,040 1,307, % 14.7% 33,137 33, ,588 65,851 $1.11 WEST CENTRAL PC 1,138, , % - 143, % 12.8% 2,115 2, $1.25 CC 1,910, , % - 257, % 14.7% 24,045 24, $1.23 NC 1,746,530 88, % 96, , % 10.9% 5,510 5, $1.19 SC 2,212, , % - 224, % 11.2% 23,572 23, $1.03 Total 7,007, , % 96, , % 12.3% 55,242 55, $1.04 MARKET TOTAL PC 10,134, , % 6, , % 8.2% 79,414 79, $1.55 CC 18,485,259 1,497, % 109,200 1,606, % 9.3% 106, , , ,982 $1.21 NC 16,142,255 1,332, % 526,041 1,858, % 11.5% 97,543 97,543 80,000 80, ,588 72,550 $1.46 SC 14,986,490 1,887, % 11,701 1,899, % 12.7% 2,045 2, , ,551 $1.16 Total 59,748,155 5,461, % 653,842 6,115, % 10.6% 285, ,353 80,000 80, , ,083 $1.26 QUARTERLY COMPARISON AND TOTALS Q ,748,155 5,461, % 653,842 6,115, % 10.6% 285, ,353 80,000 80, , ,083 $1.26 Q ,668,155 5,667, % 629,228 6,296, % 10.6% 89, ,784 29, , , ,023 $1.31 Q ,638,355 5,726, % 579,499 6,306, % 10.9% 140, ,394 55, , , ,095 $1.27 Q ,583,355 5,812, % 675,838 6,487, % 11.0% 166, ,085 67,629 67, , ,550 $1.28 Q ,515,726 5,910, % 623,327 6,533, % 10.7% 181, , , ,883 $1.26 Q ,515,726 6,092, % 295,068 6,387, % 10.3% (207,920) 132,843 49, , , ,865 $1.26 Q ,465,831 5,834, % 306,275 6,141, % 10.3% 182, , , , , ,159 $1.27 PC = Power Center CC = Community Center NC = Neighborhood Center SC = Strip Center 6 Las Vegas Research & Forecast Report Q Retail Colliers International

25 Research & Forecast Report LAS VEGAS MULTIFAMILY Q Vacancy Edges Up on New Completions > > Multifamily vacancy increased in the fourth quarter of 2015; first increase in 5 years > > The increased vacancy came with increased development; 2,320 units completed in 2015 > > Asking rates continued to increase despite new development Economic Indicators ELECTRIC Meter Hookups NEW HOME Median Price THIRTY YEAR Mortgage Rate % -2.8% Points According to statistics provided by REIS, multifamily vacancy in Southern Nevada increased in the fourth quarter of 2015 (the most recent quarter of available data), ending a three year long streak. Vacancy stood at 4.9 percent in the fourth quarter, 0.2 percentage points higher than last quarter, and 0.5 percentage points lower than in the fourth quarter of Class A properties were 5.5 percent vacant in the fourth quarter, 0.3 percentage points higher than last quarter. Class B/C properties were 4.4 percent vacant, 0.1 percentage point lower than last quarter. Class A s increase in vacancy was coupled with positive net absorption of 126 units for the fourth quarter of 2015, and almost 1,100 units for 2015 as a whole. This means vacancy increased as a result of new supply on the market, rather than falling demand. Market Trends Relative to prior period Market Q Market Q1 2016* VACANCY NET ABSORPTION COMPLETIONS RENTAL RATE *Projected Historical Vacancy Rates and Rental Rates 7.00% 6.00% 5.00% 4.00% 3.00% Vacancy vs Rents $920 $900 $880 $860 $840 Summary Statistics Q Las Vegas Market Q Q Q Vacancy Rate 4.9% 4.7% 5.4% Rent (Per Unit) $925 $910 $878 Net Absorption YTD (Units) 1,767 1,524 1,549 New Completions YTD (Units) 2,320 1, % 1.00% 0.00% 2 Q Q Q Q Q Q Q Q Q 2015 Vacancy Rate Average Rental Rate Driven by three years of increasing occupancy rates, new development has come to Southern Nevada s multifamily market. $820 $800 $780 Overall Asking Rents Per Unit Per Month Previous Quarter Current Quarter Class A $1,033 $1,039 Class B/C $780 $790

26 All multifamily submarkets other than Northwest/Southwest and West Central showed positive net absorption in the fourth quarter of In both cases, the completion of new properties in the Northwest/ Southwest submarket are likely the culprit, since negative net absorption in the Northwest/Southwest submarket took place in Class B/C properties. This could be explained by people moving from older properties to newer properties within that submarket. West Central negative net absorption was in Class A properties. Again, this could be explained by people moving from newer properties in the West Central submarket to new properties in the more upscale Northwest/ Southwest submarket. Three new multifamily projects were completed in the fourth quarter of 2015 in the Northwest/Southwest submarket. They totaled 886 units, bringing year-to-date completions up to 2,320 units. Another 383 units will be completed in the first quarter of 2016, and another 659 units will be completed in the first half of A total of 1,605 units of multifamily are under construction in the Valley, with another 1,345 units planned to begin construction within the next twelve months. Asking rents for multifamily stood at $925 per unit in the fourth quarter of 2015, increasing by $47 psf year-over-year, and only $15 per unit since last quarter. One would expect that this rise came primarily as a result of the completion of new properties, but while Class A properties saw asking rates increase by $4 per unit, older Class B/C properties saw a $10 per unit increase in asking rents. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January Unemployment averaged 6.9 percent in 2015, compared to 7.8 percent in Since January 2015, total employment in Southern Nevada increased by 32,600 jobs, the majority of those new jobs being in healthcare (+7,700 jobs), professional and business services (+6,500 jobs), and construction (+6,000 jobs). The leisure & hospitality sector actually lost 3,700 jobs over the past twelve months, a result of resort closures that will likely persist until the completion of the Resorts World Las vegas project. Historical Net Absorption vs. Completions Q Q Q Q Q Q Q Q Q 2015 Net Absorption (Units) Sales (Units) vs. Price Per Unit 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Completions (Units) $115,000 $105,000 $95,000 $85,000 $75,000 $65,000 $55,000 0 $45,000 2 Q Q Q Q Q Q Q Q Q 2015 Total Sales (Units) Average Price Per Unit Demographics Submarket Estimated Households (2015) Renter Occupied Median Household Average Household Proj. Annual Growth Rental Households ( ) Downtown 49,000 59% $30, East 56,000 44% $41, Henderson/Southeast 139,000 37% $57, North Las Vegas 113,000 38% $49, Northeast 48,000 48% $38, Northwest/Southwest 148,000 33% $63, University 35,000 77% $32, West Central 106,000 54% $44, TOTAL 694,000 43% $49, ,521 Source: Claritas 2 Las Vegas Research & Forecast Report Q Multifamily Colliers International

27 According to data provided by the Nevada Department of Motor Vehicles, the number of out-of-state driver s licenses turned in to the DMV was 61,555 in This is lower than in 2014 when they reported 63,884 out-of-state licenses turned in, and suggests that population growth, despite rebounding from the lows of the Great Recession, remains sluggish by Clark County s standards. Since Las Vegas s birth in 1905, population growth has been a major driver of economic growth. In the past, population growth was driven by the Valley s low unemployment rate and retirees looking to escape the dramatic weather and high cost of living elsewhere in the United States. Multifamily sales increased in the fourth quarter of 2015 compared to the third quarter, with 5,323 units selling at an average sales price per unit of $60,514. For 2015 as a whole, 15,408 units sold with sales volume of $1.1 billion. Preliminary sales numbers for the first quarter of 2016 stood at 3,324 units with sales volume of $359.7 million and an average sales price of $108,223 per unit. This is a significantly higher average sales price that in 2015, and points to investment, mostly from out of state buyers, in newer properties. Driven by three years of increasing occupancy, new development has come to Southern Nevada s multifamily market saw 2,320 units added to inventory, and 2016 will add another 1,988 units to inventory. In the fourth quarter of 2015, vacancy increased possibly the result of inventory expansion. The vacancy increase was minor, and we think similar increases will continue in 2016, though likely not to the overall detriment of the market. Rental rates are still on the rise for now, but if vacancy continues to rise rents may well waver. Complex Under Construction Submarket Units Elysian at Hacienda Northwest/Southwest 466 Spencer/St Rose Apartments Henderson 348 South Beach Apartments Northwest/Southwest 220 The Mercer Northwest/Southwest 177 Elysian at Summerlin Centre Northwest/Southwest 124 Vue at Centennial Northwest/Southwest 111 Warmington Martin Apartments Northwest/Southwest 90 Prestige Apartments Northwest/Southwest 69 TOTAL 1,605 Sales Data 2016 YTD Units Sold 3,324 15,408 14,019 17,808 21,840 Average Price Per Unit $108,200 $71,836 $73,627 $75,600 $65,425 Cap Rate* n/a 7.3% 7.5% 7.9% 8.2% *Cap Rate Source: Real Capital Analytics, CoStar and Colliers International Casa Sorento 3 Las Vegas Research & Forecast Report Q Multifamily Colliers International

28 215 NORTHEAST Significant Multifamily Sales Activity NORTHWEST Boulders at Lone Mountain 388 Units - $55,400,000 $142,800/Unit March 2016 Year Built DOWNTOWN Domain Apartments 308 Units - $58,200,000 $188,961/Unit January 2016 Year Built SUMMERLIN WEST 95 EAST Montego Bay Apartments 420 Units - $51,100,000 $121,700/Unit March 2016 Year Built SOUTHWEST 215 HENDERSON/ GREEN VALLEY 80 Gibson Road 308 Units - $37,300,000 $121,100/Unit December 2015 Year Built Black Mountain Villas 296 Units - $48,200,000 $162,800/Unit January 2016 Year Built Sales Activity Continued Property Name Sale Date Units Price Price/Unit Year Built Broadstone Sonata Jan $35.0 MM $112, Bacara at Southshores Feb $25.0 MM $117, Silver Shadow Apartments Dec $22.6 MM $113, Sonoma Point Mar $20.8 MM $105, The Enclave Feb $16.0 MM $62, Source: Real Capital Analytics 4 Las Vegas Research & Forecast Report Q Multifamily Colliers International

29 Market Comparisons - Las Vegas Multifamily Market CLASS TOTAL INVENTORY UNITS CURRENT VACANCY RATE PRIOR QTR VACANCY RATE NET ABSORPTION NET ABSORPTION YTD UNITS CURRENT QTR COMPLETIONS YTD UNIT COMPLETIONS UNDER CONSTRUCTION UNITS PLANNED CONSTRUCTION UNITS TOTAL SALES UNITS AVERAGE PRICE PER UNIT AVERAGE RENTAL RATE DOWNTOWN A 2, % 1.6% (1) n/a $884 B/C 13, % 2.1% ,016 $51,453 $747 Total 16, % 2.6% ,016 $51,453 $770 EAST LAS VEGAS A 6, % 4.1% n/a $881 B/C 8, % 3.7% $43,747 $758 Total 15, % 4.4% $43,747 $810 HENDERSON/GREEN VALLEY A 19, % 6.5% n/a $1,123 B/C 8, % 8.5% 39 (8) ,089 $75,533 $980 Total 27, % 6.9% ,089 $75,533 $1,081 NORTH LAS VEGAS A 12, % 5.3% n/a $931 B/C 9, % 5.4% n/a $739 Total 22, % 5.9% n/a $849 NORTHEAST A 2, % 5.1% (2) (11) n/a $815 B/C 6, % 8.1% ,100 $60,882 $724 Total 8, % 8.3% ,100 $60,882 $745 NORTHWEST/SOUTHWEST A 16, % 6.0% ,246 1,257 1,114 - n/a $1,172 B/C 5, % 3.2% (72) (81) $96,484 $1,044 Total 22, % 4.8% (22) ,246 1,257 1, $96,484 $1,140 UNIVERSITY A 2, % 1.3% (14) n/a $961 B/C 12, % 5.0% n/a $717 Total 14, % 4.9% n/a $753 WEST CENTRAL A 5, % 2.4% (21) n/a $968 B/C 6, % 4.3% (6) n/a $757 Total 12, % 2.0% (27) n/a $853 MARKET TOTAL A 68, % 5.2% 126 1, ,320 1,826 1,345 - n/a $1,039 B/C 71, % 4.5% n/a n/a 5,323 $60,514 $790 Total 139, % 5.4% 188 1, ,320 1,826 1,345 5,323 $60,514 $925 QUARTERLY COMPARISON AND TOTALS Q4-15* 139, % 4.7% 188 1, ,320 1,826 1,345 5,323 $60,514 $925 Q , % 4.8% 135 1, ,434 1,216 1,704 3,887 $73,685 $910 Q , % 5.1% 647 1, ,110 1,617 2,222 2,626 $77,603 $906 Q , % 5.4% ,617 2,222 3,572 $82,458 $889 Q , % 5.3% 370 1, ,617 2,222 3,572 $82,458 $878 Q , % 5.5% 348 1, ,886 $70,279 $873 Q , % 5.8% ,262 $84,836 $866 * Most recent quarter of data Source: REIS Sales Data provided by Colliers International 5 Las Vegas Research & Forecast Report Q Multifamily Colliers International

30 Research & Forecast Report LAS VEGAS MEDICAL OFFICE Q Medical Growth But Not in Medical Office > > Medical office has lapsed back into negative net absorption Economic Indicators > > Strong gains in healthcare spending and employment created hope for a reversal of fortunes in 2016; they may be yet to come > > Asking rates, which were on the rise despite low demand, took a step back in the first quarter HEALTHCARE Employment HEALTHCARE Spending MEDICAL SF/Job -8.4% Southern Nevada s medical office market managed a positive 2015 due to strong positive net absorption in the first half of the year, and despite negative net absorption in the last half of the year. Unfortunately, the first quarter of 2016 has continued the negative net absorption trend, with net absorption this quarter of negative 21,820 square feet. This increased vacancy to 17.0 percent, 0.3 points higher than one quarter ago, though fortunately 0.2 points lower than one year ago. The weighted average asking rental rate remained fairly stable, dropping to $2.17 per square foot (psf) on a full service gross (FSG) basis. This was only $0.02 from last quarter % Market Trends Q Relative to prior period Market Q Market Q2 2016* VACANCY NET ABSORPTION COMPLETIONS RENTAL RATE Historical Vacancy Rates and Rental Rates 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% 14.0% $2.19 $2.18 $2.17 $2.16 $2.15 $2.14 $2.13 *Projected Summary Statistics Q Las Vegas Market Q Q Q Vacancy Rate 17.0% 16.7% 17.2% Asking Rent (PSF, FSG) $2.17 $2.19 $2.16 Net Absorption YTD (SF) -21,820-21,859 75,113 New Completions YTD (SF) % 12.0% 1 Q Q Q Q Q Q Q Q Q 2016 $2.12 $2.11 Overall Asking Rents Per Square Foot Previous Quarter Current Quarter Class A $2.59 $2.59 Vacancy Rate Rental Rate Class B $2.25 $2.23 Spending on ambulatory health care, which does not include hospitals and which has the largest impact on the medical office space, saw a 13.3 percent year-over-year increase in Class C $1.80 $1.79

31 According to the Nevada Department of Employment, Training and Rehabilitation, Southern Nevada s medical office job market improved in January 2016 (the latest month of data available) compared with January 2015, adding approximately 6,100 jobs in the past twelve months. This does not include jobs at hospitals. Employment that directly impacted medical office projects increased by approximately 1,535 jobs. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January From January 2015 to January 2016, total employment in Southern Nevada has increased by 32,600 jobs. According to the Nevada Department of Taxation, taxable spending on ambulatory health care services in Clark County in 2015 totaled $99.8 million dollars. This represented a 20.5 percent increase in health care spending, though it should be pointed out that that increase in health care spending does not necessarily translate into an increase in the amount of care provided, an important factor when looking at the impact of spending on demand for medical real estate. Where the money is being spent is also important. Spending on ambulatory health care, which does not include hospitals and which has the largest impact on the medical office space, saw a 13.3 percent year-over-year increase in Spending in hospitals, by comparison, increased by 48.5 percent. This jibes with anecdotal evidence that hospital campuses are the prime beneficiaries of the ACA. The last time medical office space was completed in Southern Nevada was during the fourth quarter of 2011, when 57,600 square feet was added to inventory. A new hospital at Union Village is now under construction. When it is completed, development of 150,000 square feet of medical office and 190,000 square feet of retail space will follow, though this could still be months away. Additional medical office projects are planned on Cimarron Road and Tenaya Way, totaling 211,000 square feet. On the hospital front, several new small hospitals for urgent or emergency care are planned in the valley, including the 100,000 square foot Southern Hills Emergency Hospital at Desert Inn & Fort Apache, and four small hospitals being developed by Dignity Health at Craig & Camino Al Norte, Blue Diamond & Decatur, Flamingo & I-215 and Decatur & Sahara. Vacancy in medical office space increased in the first quarter of 2016 to 17.0 percent, from 16.7 percent in the fourth quarter of Despite this increase in quarter-over-quarter vacancy, current vacancy is 0.2 points lower than one year ago in the first quarter of The highest vacancy rates in the first quarter of 2016 were in the Southwest (35.0 percent), Downtown (23.9 percent) and Airport (20.2 percent) submarkets. Downtown formerly had the lowest vacancy rate among submarkets. The new champion is the Henderson submarket, with 11.2 percent vacancy. Vacancy decreased in Airport, East Las Vegas and Southwest, and increased in Downtown, Henderson, North Las Vegas, Northwest and West Central. It should be mentioned that vacancy increased by less than half a point in Henderson, Northwest and West Central. Historical Net Absorption vs. Completions 100,000 80,000 60,000 40,000 20, ,000-40,000-60,000-80, , ,000 1 Q Q Q 2014 Net Absorption Healthcare Jobs vs. Occupancy Rate 84.0% 83.5% 83.0% 82.5% 82.0% 81.5% 81.0% 80.5% 80.0% 1 Q Q Q Q 2014 Healthcare Jobs 4 Q Q Q Q Q Q 2015 Completions 3 Q Q 2015 Occupancy Rate 4 Q Q Q ,400 15,900 15,400 14,900 14,400 13,900 13,400 2 Las Vegas Research & Forecast Report Q Medical Office Colliers International

32 After 120,371 square feet of positive net absorption in 2015, Southern Nevada posted negative 21,820 square feet of net absorption in the first quarter of This was actually the third straight quarter with negative net absorption, following three quarters of positive net absorption. On the bright side, the three quarters of positive net absorption (187,011 square feet) outweighed the three quarters of negative net absorption (50,485 square feet), indicating that while Southern Nevada s medical office market lacks stability, it is slowly recovering. The weighted average asking rental rate for medical office space in the first quarter of 2016 was $2.17 per square foot (psf) on a full service gross (FSG) basis. Asking rents in the first quarter of 2016 were $0.02 psf lower than one quarter ago (not surprising given three quarters of sub-par demand) and $0.01 higher than one year ago. In leases we have tracked over the past four quarters, effective lease rates for medical office leases have averaged percent of asking lease rates, which suggests that asking rates are appropriate for current market conditions, and may continue to increase at a moderate clip through 2016 provided demand for medical space increases. The Valley s highest average asking rate was in the Northwest submarket, at $2.44 psf FSG, followed closely by Henderson s $2.42 psf. The lowest average asking rate was in the West Central submarket, at $1.81 psf, followed by East Las Vegas with $1.89 psf. Lease rates increased this quarter in Downtown, Henderson, North Las Vegas and West Central, and decreased in Airport, East Las Vegas and Southwest. Investment sales volume of medical office so far in 2016 amounted to almost $7 million in two sales totaling 21,700 square feet, with an average sales price of $ per square foot. These buildings had an average cap rate of 6.8 percent. For comparison s sake, investment sales volume in 2015 was almost $80 million. Owner/user sales volume of medical office space in 2015 was $40.9 million in 12 sales totaling 120,543 square feet. The average sales price was $ For comparison s sake, owner/user sales volume in 2014 was only $12.1 million, with an average sales price of $ In the first quarter of 2016 there was one own/user medical sale of a 5,000 square foot building for $1.3 million. The recovery of Southern Nevada s medical office market after the Great Recession has been rough and unstable. In 2015, it looked as though, despite two weak quarters, the recovery was picking up steam. A third weak quarter in a row, though, would tend to point to more of the same two steps forward, one step back. The professional office market followed a similar trajectory two years ago, but now appears to be in a stable recovery. Perhaps the medical office market will do the same. It does have two significant headwinds competition from other types of commercial real estate, and market distortions created by the ACA. Hopefully, higher spending on healthcare is not entirely the result of increases in prices and deductibles, and healthcare employment growth will translate into more demand for medical office space over the remainder of Desert Perinatal Associates 5761 Fort Apache 3 Las Vegas Research & Forecast Report Q Medical Office Colliers International

33 215 NORTH LAS VEGAS Significant Medical Office Sales Activity Pavell Medical Center NORTHWEST ,500 - $6,200,000 $122.67/SF October 2015 Class C Desert Radiology SUMMERLIN WEST CENTRAL DOWN TOWN EAST LAS VEGAS 18,000 SF - $6,400,000 $354.17/SF February 2015 Class C Sienna Pavilion II 64,700 SF - $20,000, $308.67/SF December 2015 Class A AIRPORT Sienna Pavilion ,300 - $27,900,000 $426.63/SF December 2015 SOUTHWEST HENDERSON Class A Horizon Ridge Professional Park 5,993 SF - $1,325,000 $221.09/SF November 2015 Class C Significant Lease Activity Property Name Lease Date Lease Term Size Lease Rate Tenant Siena Pavilion Dec months 4,400 SF $1.29 NNN Physicians Stonecreek Spring Valley Medical Sep months 3,500 SF $0.86 NNN Physician Flamingo Road Mar months 3,000 SF $0.97 MG Non-Medical Rainbow Office Complex Sep months 2,000 SF $0.87 NNN Physician Campbell Court Feb months 1,700 SF $1.25 NNN Laboratory 4 Las Vegas Research & Forecast Report Q Medical Office Colliers International

34 Market Comparisons - Las Vegas Medical Office Market TYPE TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANT SF TOTAL VACANT SF VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETIONS CURRENT QTR SF COMPLETIONS YTD SF UNDER CONSTRUCTION SF PLANNED CONSTRUCTION SF WEIGHTED AVG ASKING RENTAL RATE AIRPORT SUBMARKET A - - n/a - - n/a n/a $- B - - n/a - - n/a n/a $- C 38,000 7, % - 7, % 33.4% 5,000 5, $1.92 Total 38,000 7, % - 7, % 33.4% 5,000 5, $1.92 DOWNTOWN SUBMARKET A 65, % % 0.0% $- B 227,301 82, % - 82, % 11.9% (55,617) (55,617) $1.97 C 75,131 5, % - 5, % 6.7% $1.74 Total 367,432 87, % - 87, % 8.7% (55,617) (55,617) $1.96 EAST LAS VEGAS SUBMARKET A - - n/a - - n/a n/a $- B 669, , % - 143, % 23.4% 11,552 11, $2.13 C 629,240 72, % - 72, % 15.5% 24,880 24, $1.42 Total 1,298, , % - 215, % 19.6% 36,432 36, $1.89 HENDERSON SUBMARKET A 421,834 49, % - 49, % 12.5% 3,516 3, ,000 $3.00 B 309,703 65, % 2,515 68, % 19.2% -8,889 (8,889) $2.15 C 604,238 41, % - 41, % 7.1% $2.16 Total 1,335, , % 2, , % 11.6% (4,440) (4,440) ,000 $2.42 NORTH LAS VEGAS SUBMARKET A - - n/a - - n/a n/a $- B 43,921 5, % - 5, % 13.2% $2.34 C 148,668 31, % - 31, % 14.7% (9,625) (9,625) $2.10 Total 192,589 36, % - 36, % 14.4% (9,181) (9,181) $2.13 NORTHWEST SUBMARKET A 807, , % - 144, % 19.6% 14,428 14, ,251 $2.57 B 1,031, , % - 145, % 12.1% (20,354) (20,354) $2.37 C 202,434 10, % - 10, % 5.1% $1.67 Total 2,041, , % - 300, % 14.4% (5,926) (5,926) ,251 $2.44 SOUTHWEST SUBMARKET A 115,300 51, % - 51, % 41.4% (3,855) (3,855) $2.27 B 380, , % 4, , % 49.5% 20,888 20, ,680 $2.32 C 275,170 54, % - 54, % 19.9% (224) (224) $2.01 Total 771, , % 4, , % 37.7% 16,809 16, ,680 $2.25 WEST CENTRAL SUBMARKET A - - n/a - - n/a n/a $- B 291,027 21, % - 21, % 7.3% $2.35 C 867, , % - 129, % 14.4% (4,897) (4,897) $1.72 Total 1,158, , % - 150, % 12.6% (4,897) (4,897) $1.81 MARKET TOTAL A 1,409, , % - 245, % 18.4% 14,089 14, ,251 $2.59 B 2,953, , % 6, , % 19.8% (51,976) (51,976) ,680 $2.23 C 2,840, , % - 353, % 13.0% 16,067 16, $1.79 Total 7,203,753 1,225, % 6,955 1,232, % 16.8% (21,820) (21,820) ,931 $2.17 QUARTERLY COMPARISON AND TOTALS Q1-16 7,203,753 1,225, % 6,955 1,232, % 16.8% (21,820) (21,820) ,931 $2.17 Q4-15 7,203,753 1,203, % 8,955 1,212, % 16.7% (21,859) 120,371-16, ,931 $2.19 Q3-15 7,203,753 1,181, % 22,436 1,204, % 16.6% (6,806) 142,230-16, ,931 $2.18 Q2-15 7,203,753 1,175, % 20,245 1,195, % 17.4% 73, ,036 16,000 16, ,680 $2.18 Q1-15 7,187,753 1,233, % 15,002 1,248, % 18.4% 75,113 75, ,680 $2.16 Q4-14 7,187,753 1,308, % 15,002 1,323, % 18.9% 37,975 (94,283) ,680 $2.16 Q3-14 7,187,753 1,346, % 15,002 1,361, % 17.5% (101,664) (132,258) $ Las Vegas Research & Forecast Report Q Medical Office Colliers International

35 Research & Forecast Report LAS VEGAS HOTEL Q Hospitality Stays Strong > > Visitor volume hit a new record in 2015, and is off to a good start in 2016 > > Gaming revenue continued to lag, but is becoming less important to the diversified resorts > > Room inventory may expand by the end of 2016, and will probably expand further in 2017 Economic Indicators AIR Passengers +7.6% CONVENTION Attendance RevPAR +10.4% Q has only just begun, but so far Southern Nevada s hospitality market appears to have extended its winning streak. Visitor volume numbers were strong in January (the most recent month of data), and on pace to match the record visitor volume of 42.3 million people in Room occupancy, average daily room rate (ADR) and revenue per available room (RevPAR) all showed improvement in January 2016 compared to January Gaming revenue was once again the only bad mark on an otherwise stellar Hospitality industry performance, showing year-over-year growth of negative 3.3 percent for Clark County as a whole, and negative 7.7 percent growth on the Las Vegas Strip. Downtown gaming revenue increased by 8.8 percent year-over-year, however, and the Boulder Strip posted 16.1 percent gaming revenue growth. Southern Nevada s resort and hospitality operators started diversifying their entertainment venues during the Great Recession, and those moves have paid off. Millennials in particular appear less likely to partake in gaming than Baby Boomers, but they are still coming to Las Vegas to enjoy other attractions. Revenue Per Available Room (RevPar) RevPAR $ Market Trends Relative to prior period Market Q Market Q4 2015* Room Inventory Room Occupancy Average Daily Rate Revenue Per Available Room *Projected Summary Statistics Q Las Vegas Market Q Q Q Room Inventory 146, , ,738 Room Occupancy 84.7% 85.9% 85.0% Average Daily Rate $ $ $ Revenue Per Available Room $ $ $ $ $80.00 $60.00 $40.00 $20.00 $ Q Q Q Q Q Q Q Q Q 2015

36 Room inventory remained static in the first quarter of 2016, and no new closures are planned for The 201 room Lucky Dragon, under construction in the Resort Corridor, may be completed before the end of 2016, or by early The 124 room Residence Inn under construction in South Las Vegas will almost certainly be completed by the end of These two properties would represent very mild inventory growth for Southern Nevada. The much larger Resorts World Las Vegas property is currently under construction, with completion of the first phase planned for Sales Volume $2,000,000,000 $1,800,000,000 $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 Sales Volume As alluded to above, Southern Nevada s hospitality industry is currently involved in a different kind of construction boom than we are used to, building new entertainment venues instead of new hotels. Recent non-hospitality introductions to Las Vegas include the LINQ retail district and High Roller attraction, two new zip-line attractions on the Strip and in Downtown, new retail fronting the Treasure Island and the Rock N Rio festival will see the completion of the 20,000 seat MGM Resorts International Arena behind New York-New York and Monte Carlo, a $75 million renovation of Caesars Palace s original Roman Tower, a new 5,000-seat theatre at the Monte Carlo, a $47 million renovation of the Thomas & Mack Center, Topgolf International s four-story golf entertainment complex at the MGM Grand, a $23 million renovation and redevelopment of the Boulevard Mall. The LVCVA is currently undertaking a major expansion of the convention center to keep Southern Nevada at the forefront of convention destinations in the United States. In all, we expect that approximately $4.7 billion will be spent on Southern Nevada s hospitality market between 2014 and 2016, before another $4 billion is spent developing the first phase of Resorts World Las Vegas in $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 1 Q Q Q Q Q Q Q Q Q 2016 Sales vs. Price Per Unit 7,000 6,000 5,000 4,000 3,000 2,000 Sales vs. Price Per Unit $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 A total of 927 rooms sold in Southern Nevada in the first quarter of 2016, in two properties, the Westin-Las Vegas Casuarina and the Rodeway Inn-Convention Center. Both properties are located in the Resort Corridor. Sales volume in the first quarter of 2016 was $66 million and average sales price was $72,000 per room. Final sales volume in 2015 was $854 million in 14 sales totaling 7,558 units with an average sales price of $113,000 per room saw as many rooms selling as 2014, but at a much lower sales volume. 1, Q Q Q Q Q Q Q Q Q 2016 Sales (Units) Average Price Per Unit $50,000 $0 Market Health Data Point 2016 YTD* Visitor Volume (Millions) Room Occupancy 84.7% 87.7% 86.8% 84.3% 84.4% ADR $ $ $ $ $ RevPAR $ $ $ $93.27 $91.17 Convention Attendance (Millions) Passengers McCarran Int l (Millions) Gaming Revenue (Clark County, Billions) $0.8 $9.6 $9.6 $10.0 $9.4 Gaming Revenue ( Strip, Billions) $0.5 $7.5 $6.4 $6.5 $6.2 Data from Las Vegas Convention & Visitors Authority * Data from January 2 Las Vegas Research & Forecast Report Q Hospitality Colliers International

37 Southern Nevada s hospitality market, despite strong visitor volume, has actually seen inventory fall over the past year with the closure of the Riviera and Clarion. This has been good for existing operators, increasing their occupancy and profitability will see some inventory growth, with more possibly on the way in 2017, but in the meantime expect the existing resorts to reap the benefits. Hospitality Sales* Year Volume Units Sold Price/Unit 2016 YTD $66 MM 927 $72, $854 MM 7,558 $113, $1,864 MM 7,749 $241, $55 MM 1,129 $49, $121 MM 2,613 $46, $3,009 MM 7,369 $408, $858 MM 8,883 $97, $1,226 MM 4,913 $249,000 * Only includes properties with 100 or more units, arm s-length sales 2016 has only just begun, but so far Southern Nevada s hospitality market appeared to extend its winning streak - John Stater, Research & GIS Manager 3 Las Vegas Research & Forecast Report Q Hospitality Colliers International

38 NORTHWEST 215 NORTH LAS VEGAS Significant Hotel Sale Activity Westin - Las Vegas Casuarina 95 Resort Corridor - $67,000, Units - $81,000/Unit January Casino Hotel Riviera Hotel* Strip - $182,500,000 SUMMERLIN WEST CENTRAL DOWNTOWN RESORT CORRIDOR EAST LAS VEGAS 2,100 Units - $87,000/Unit February 2015 Casino Hotel Renaissance Las Vegas Hotel THE STRIP 95 Resort Corridor - $111,000, Units - $203,000/Unit July 2015 Full Service AIRPORT 215 Hooters Casino Hotel Resort Corridor - $54,000,000 SOUTHWEST HENDERSON 696 Units - $77,000/Unit May 2015 Casino Hotel SOUTH LAS VEGAS Tropicana Las Vegas Strip - $360,000,000 1,497 Units - $240,000/Unit December 2015 Casino Hotel Sale Activity Continued Property Name Sale Date Units Price Price/Unit Submarket Property Type Las Vegas Club Casino Aug $40,000,000 $98,000 Downtown Casino Hotel Westin-Lake Las Vegas Dec $25,000,000 $51,000 Henderson Full Service Townplace Suites Feb $20,000,000 $88,000 Henderson Limited Service Hyatt Place-Las Vegas Feb $19,000,000 $94,000 Resort Corridor Full Service Rodeway Inn Jan $6,100,000 $60,000 Resort Corridor Limited Service * Indicates a redevelopment site 4 Las Vegas Research & Forecast Report Q Hospitality Colliers International

39 Market Comparisons - Las Vegas Hospitality Market TYPE TOTAL INVENTORY UNITS SOLD SALES VOLUME PRICE/UNIT COMPLETIONS THIS QUARTER COMPLETIONS YTD PLANNED DOWNTOWN CAS 7,589 - $0 n/a FS - - $0 n/a LS $0 n/a Total 8,527 - $0 n/a LAS VEGAS STRIP CAS 79,309 - $0 n/a - - 4,600 FS 7,543 - $0 n/a LS $0 n/a Total 87,433 - $0 n/a - - 4,600 RESORT CORRIDOR CAS 11, $66,530,000 $80, FS 5,091 - $0 n/a LS 6, $60,396 $ Total 22, $66,590,396 $71, AIRPORT CAS - - $0 n/a FS - - $0 n/a LS $0 n/a Total $0 n/a EAST LAS VEGAS SUBMARKET CAS 1,913 - $0 n/a FS - - $0 n/a LS 2,571 - $0 n/a Total 4,484 - $0 n/a HENDERSON SUBMARKET CAS 2,281 - $0 n/a FS $0 n/a LS 1,480 - $0 n/a Total 4,629 - $0 n/a NORTH LAS VEGAS SUBMARKET CAS 1,021 - $0 n/a FS - - $0 n/a LS 1,611 - $0 n/a Total 2,632 - $0 n/a SOUTH LAS VEGAS SUBMARKET CAS 2,853 - $0 n/a FS 2,704 - $0 n/a LS 1,206 - $0 n/a Total 6,763 - $0 n/a SUMMERLIN SUBMARKET CAS 1,789 - $0 n/a FS $0 n/a LS $0 n/a Total 2,769 - $0 n/a WEST CENTRAL SUBMARKET CAS 3,425 - $0 n/a FS - - $0 n/a LS 2,188 - $0 n/a Total 5,613 - $0 n/a MARKET TOTAL CAS 111, $66,530,000 $80, ,801 FS 16,329 - $0 n/a LS 18, $60,396 n/a Total 146, $66,590,396 $71, ,925 QUARTERLY COMPARISON AND TOTALS Q , $66,590,396 $71, ,925 Q ,340 2,241 $392,913,841 $175, ,600 3,634 Q , $151,000,000 $157, ,600 3,634 Q ,750 2,499 $442,001,950 $176,872-2,988-3,190 4,169 Q ,738 2,888 $243,075,470 $84, ,124 Q , $5,375,000 $41, ,955 4,124 5 Las Vegas Research & Forecast Report Q Hospitality Colliers International

40 Research & Forecast Report LAS VEGAS LAND Q The Calm Before the Storm > > Land sales were up in the first quarter of 2016 in terms of acreage > > Development continues to be strong for multifamily properties, but might be slowing for industrial properties > > Land prices remained stable in Q1 of 2016 when one discounts a large sale of industrial land in the Apex industrial area Economic Indicators COMMERCIAL Forward Supply Percent RESIDENTIAL Permits Percent COMMERCIAL Permits -4.2 Percent In terms of acreage sold, the first quarter of 2016 was the best first quarter Southern Nevada has had in five years, with 1,224 acres sold in 87 sales. The sales volume of $171.7 million recorded in the first quarter of 2016 was not, however, the highest sales volume in five years. In fact, it s in second place behind the $213.7 million in the first quarter of 2014, and just barely ahead of the $170.6 million recorded in the first quarter of The reason for this disparity was an especially large sale of land in Apex, the industrial area located to the northeast of the Las Vegas Valley. Industrial occupancy decreased in the first quarter of 2016 to 94.4 percent, a 0.1 percentage point decrease compared to the fourth quarter of This rise in industrial vacancy was a result of the completion of a large warehouse/distribution building without pre-leasing. It may not be the last, as at least four more warehouse/distribution buildings that are not approximately 46 percent pre-leased are slated for completion in A total of 955,082 square feet of industrial space was completed in the first quarter of 2016 on 49.1 acres. An additional 6.4 million square feet of industrial space is either under construction or planned on acres of land. During the first quarter of 2016, acres of industrial land was sold, with total sales volume of $11.8 million. The average sales price of industrial land was $0.34 psf, a significant decrease from one year ago but predicated on a very large land sale in Apex. Ignoring the sale of 753 acres in Apex, the average sales price of industrial land would be $4.32 psf on 40 acres sold. Market Trends Relative to prior period Market Q Market Q2 2016* NO. SALES ACREAGE SOLD SALES VOLUME PRICE PER SQUARE FOOT *Projected Land Sales Activity 1,400 $ ,200 $ ,000 $ $ $ $ $ $0.00 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Commercial occupancy increased in the first quarter of 2015 to 87.4 percent, 0.6 percentage points higher than in the first quarter of Demand for office and retail product, while still not as strong as for industrial space, has been positive since 2015, with the retail market entering its second expansion phase since the end of the Great ACREAGE SOLD PRICE PER SQ. FT.