Quarterly Economic & Project Update 2018, Quarter 2 [April 1 June 30]

Quarterly Economic & Project Update 2018, Quarter 2 [April 1 June 30]

O U R M I S S I O N The mission of the City of Schertz Economic Development Corporation (SEDC) is to grow the Schertz economy through Projects. Specifically, we pursue Projects that focus on the creation/retention of Primary Jobs and Infrastructure Improvements. P R I M A R Y J O B S One of the key elements of our mission involves Primary Jobs - jobs that produce goods/services for customers that are predominantly outside the region and defined by Local Government Code 501.002 (12). Primary Jobs create new money for our community by exporting products. Once an employer is paid for these Primary Job-produced goods/services, the new money is redistributed into the community through wages paid to employees; capital investments; tax payments to the City, local school districts, and counties; and through payments to local suppliers. Schertz is fortunate to have a variety Primary Job Employers - companies that create Primary Jobs. In Schertz, examples of companies that create Primary Jobs are associated with our key industries of: manufacturing, warehouse and distribution, and e-commerce because they export goods/services to regional, statewide, national, or international markets. CalTex Protective Coatings is an example of a Schertz company that creates Primary Jobs. They manufacture sealants and other car-care detailing products. These products are exported to other markets, such as Kansas City, and new money is created in Schertz. This is what creates and maintains the flow of new wealth into our community. On the other hand, an example of a business sector that does not create Primary Jobs is retail or medical. Purchases made at a local shopping center or payments made when visiting the doctor generally use existing money to pay for those goods or services. These businesses rely on new money that was created through the companies that generate Primary Jobs to fuel our local economy. 2

P R O J E C T S Notable updates on Projects located in Schertz. TEXAS PLUMBING SUPPLY 35K Square Feet of Building Construction is finished and operations have begun. A formal grand opening will be held in the fall. WIEDERSTEIN RANCH Multiple Pad Sites Will Be Available Soon This new Schertz site marks their fifth location Status COMPLETE EVO Entertainment, the first tenant of the development, has started construction. 17.4 Acres Under Development EVO Facility Size 73,330 SF Proposed Opening FEBRUARY 2019 3

R E A L E S T A T E Quarterly comparison data for the Industrial, Office, & Retail sectors for both the Schertz and San Antonio market. S C H E R T Z I n d u s t r i a l Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Average Asking Price (NNN) $5.32 $5.57 $5.61 $5.80 $5.84 Inventory (sf) 8,444,949 8,454,949 8,814,200 8,814,200 8,814,200 Vacancy Rate 9.9% 7.4% 11.1% 10.7% 10.6% Quarterly Absorption (sf) -152,465 260,180 4,692 91,833 8,600 O t h e r S e c t o r s O f f i c e R e t a i l Q2 2017 Q2 2018 Q2 2017 Q2 2018 Office Base Rent/Average Asking Price $15.33 $22.80 $3.95 (NNN)* $5.31 (NNN)* Inventory (sf) 205,351 269,133 1,858,488 1,858,488 Vacancy Rate 2.9% 2.9% 1.3% 6.0% Quarterly Absorption (sf) 0-4,129 20,694-5,845 *When removing outliers, the average rent per square foot per year range is $11-14 (NNN) S A N A N T O N I O I n d u s t r i a l Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Average Asking Price (NNN) $5.52 $5.55 $5.61 $5.64 $5.51 Inventory (sf) 114,325,640 114,482,134 115,070,272 115,156,888 115,397,265 Vacancy Rate 5.5% 4.9% 5.2% 5.3% 5.4% Quarterly Absorption (sf) 93,783 922,643 114,543 42,640 73,556 O t h e r S e c t o r s O f f i c e R e t a i l Q2 2017 Q2 2018 Q2 2017 Q2 2018 Office Base Rent/Average Asking Price $21.95 $22.41 $16.36 (NNN) $17.25 (NNN) Inventory (sf) 163,053,484 166,095,033 227,276,078 228,938,131 Vacancy Rate 8.7% 9.0% 3.5% 3.8% Quarterly Absorption (sf) 1,128,032-41,717 406,444-278,808 4

R E A L E S T A T E I-10 I-35 Vanderpool Bandera Boerne New Braunfels I-10 Schertz Seguin I-35 Hondo 410 1604 Stockdale I-35 Pleasanton I-10 San Antonio Market Schertz Market Average Asking Price - The amount for which landlords are offering their space per square foot, per year for lease for a listing. The NNN stands for Triple Net rent. In this type of commercial real estate rent, tenants pay the amount listed plus additional costs (usually operating expenses and taxes). Inventory - Total existing square feet of each property type. Vacancy Rate - Expressed as a percentage, Vacancy Rate identifies the amount of new/relet/sublet space vacant divided by the existing rental building area (includes the usable area and its associated share of the common areas). Quarterly Absorption - For existing buildings, the measure of total square feet occupied (indicated as a move-in) less the total space vacated (indicated as a move-out) over a given period of time. Sublet space and lease renewals are not factored into net absorption. However, in a lease renewal that includes the leasing of additional space, that additional space is counted in net absorption. Pre-leasing of space in non-existing buildings (planned, under construction or under renovation) is not counted in net absorption until actual move in, which by definition may not be any earlier than the delivery date. H O U S I N G Number of new residential building permits issued by City of Schertz Planning & Zoning Division during the quarter. 2018 44 26 42 112 2017 44 36 45 125 APRIL MAY JUNE TOTAL The number of permits is 11.6% lower than those issued during the same period last year. 5

D E V E L O P M E N T U P D A T E Details on major new development and expansions throughout Schertz during the quarter. Locations highlighted in color can be found in the photos below. D I R T W O R K Preparing site for intended use (grading, infrastructure installation, poring pads). 1 4 5 2 U N D E R C O N S T R U C T I O N Activity between site preparation and certificate of occupancy issuance. 7 12 18 13 14 C O M P L E T E / R E M O D E L Certificate of occupancy issued / Internal or external work being done to existing building. 20 21 22 DIRT WORK 1. Unnamed - 133 Windy Meadows Dr - Flex 2. Unnamed 2-105 Windy Meadows Dr - Flex 3. Casa Verde Farms - 7791 FM 482 - Retail 4. Enterprise Building Plaza - 5700 Schertz Pkwy - Industrial 5. Tri County Crossing 1-17750 Lookout Rd - Industrial 6. Tri County Crossing 2-17750 Lookout Rd - Industrial UNDER CONSTRUCTION 7. Platform Warehouse Suites - 7637 FM 3009 - Flex 8. Brake Check 17160 IH 35 N - Retail 9. Schertz Business Park - 1996 Schertz Pkwy - Retail 10. Cibolo Creek Municipal Authority Wastewater Plant Expansion - 12423 Authority Ln - Civic 11. Samuel Clemens Expansion - 1001 Elbel Rd - Civic 12. Ryder Truck Expansion - 9993 Doerr Ln - Industrial UNDER CONSTRUCTION 13. Comal Middle School - 370 Hubertus Rd - Civic 14. Staybridge Hotel -5601 Schertz Pwky - Hotel 15. Founders Classical Academy Expansion - 8453 E. FM 1518 - Civic 16. CVS Pharmacy - 5334 FM 1103 - Retail 17. Rose Garden Elementary - 10414 E. FM 1518 - Civic 18. EVO Entertainment - 18658 IH 35N - Retail 19. Enterprise Building V - 17745 Lookout Rd - Industrial COMPLETE/REMODEL 20. Texas Allergy & Asthma - 3746 Schertz Pwky - Office 21. Simmonds Realty - 17148 I-35 - Office 22. Starbucks/Retail - 917 FM 3009 - Retail 23. Texas Plumbing Supply - 17992 Red Iron - Industrial 6

D E V E L O P M E N T U P D A T E Details on major new development and expansions throughout Schertz during the quarter. 13 3 5 & 6 14 12 19 7 4 21 23 8 18 16 20 9 11 22 2 1 10 17 15 DIRT WORK UNDER CONSTRUCTION COMPLETE/REMODEL 7

A V A I L A B I L I T Y Class A industrial properties (15K+ square feet) and development ready sites (25+ acres) that are currently available (as of July 2018). Indicated within the dashed shapes, development ready sites have immediate access to industrial grade utilities. 90 Acres Proposed Road 24 Acres 75 Acres 81 Acres B C G H 25 Acres F FM 3009 Future Road 85 Acres SCHERTZ PARKWAY J E D TRI COUNTY PARKWAY I Future Road 54 Acres INTERSTATE 35 Area of Focus Available Buildings Availability A 1150 Schwab Road (see page 9) 409,685 sf B Enterprise Building III 360,000 sf C Enterprise Building V (Under Construction) 188,000 sf D Tri-County Crossing 2 (Under Construction) 100,500 sf E Tri-County Crossing 1 (Under Construction) 96,000 sf F 7377 Doerr Lane 77,500 sf G Enterprise Building II 76,874 sf H Enterprise Building I 52,893 sf I 5800 Tri County 41,335 sf J Enterprise Business Plaza (Under Construction) 25,000 sf 8

A V A I L A B I L I T Y Development ready sites are indicated within the dashed shapes and have immediate access to industrial grade utilities. Properties/sections shaded in blue indicate land that is proposed for retail/office. 44 Acres INTERSTATE 35 79 Acres Area of Focus Future SCUC ISD High School 25 A 103 Acres 28 119 Acres 85 Acres INTERSTATE 35 Area of Focus S O U R C E S CoStar Quarterly Data (Q2 2017-Q2 2018 for Industrial, Office, & Retail) Schertz Planning & Zoning Division, What s Developing In Schertz online visualizer Schertz Development Services Department, Building Permit Data (April 1 June 30, 2018) Aerial development images provided by Colglazier Properties and EVO Entertainment 9

1400 Schertz Parkway, Building 2 Schertz, TX 78154 210.619-1070 SchertzEDC.com