Real Estate Market Overview 2008 Report

AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Real Estate Market Overview 2008 Austin - Round Rock Originally a buffalo-hunting ground favored by Tonkawa Indians, Austin was permanently settled in 1838 as a trading post. The Austin-Round Rock Metropolitan Statistical Area (MSA) is now part of the I-35 growth corridor in the heart of Texas. According to the U.S. Census Bureau, the Austin MSA experienced the largest increase in income in the state and was one of the country's fastestgrowing cities during the 1990s, growing by nearly 48 percent. Austin, the capital of Texas, is home to the University of Texas, the largest university in the nation. The city supports a politically charged and culturally rich environment. Quick Facts Land Area 4,224 square miles 2007 Population Density 378.4 people per square mile Counties Bastrop, Caldwell, Hays, Travis, Williamson Area Cities and Towns Austin, Cedar Park, Georgetown, Leander, Lockhart, Pflugerville, Round Rock, San Marcos, Taylor * This report's MSA data reflects either 1999 or 2003 MSA definitions based on data availability. Use of 1999 definition is noted w here applicable. Source: U.S. Census Bureau and Real Estate Center at Texas A&M University Microsoft product screen shot reprinted with permission from Microsoft Corporation. Metropolitan Statistical Areas (MSAs) DALLAM SHERMAN HANSFORD OCHILTREE LIPSCOMB HARTLEY MOORE HUTCHINSON ROBERTS HEMPHILL OLDHAM POTTER RANDALL DEAF SMITH 2 CARSON GRAY WHEELER ARMSTRONG DONLEY COLLINGSWORTH PARMER CASTRO SWISHER BRISCOE HALL CHILDRESS HARDEMAN BAILEY LAMB HALE FLOYD MOTLEY COTTLE FOARD COCHRAN HOCKLEY LUBBOCK 14 WILBARGER WICHITA CROSBY DICKENS KING KNOX BAYLOR ARCHER 25 CLAY MONTAGUE COOKE GRAYSON 20 COLLIN FANNIN LAMAR DELTA RED RIVER YOAKUM TERRY LYNN GARZA KENT STONEWALL HASKELL THROCKMORTON YOUNG JACK WISE DENTON HUNT JONES GAINES DAWSON BORDEN SCURRY FISHER ANDREWS MARTIN HOWARD MITCHELL NOLAN TAYLOR 1 SHACKLEFORD STEPHENS PARKER PALO PINTO TARRANT 8 FRANKLIN TITUS HOPKINS MORRIS CAMP RAINS 21 CASS BOWIE ROCKWALL DALLAS KAUFMAN ELLIS VAN ZANDT SMITH WOOD UPSHUR MARION CALLAHAN HOOD EASTLAND ERATH SOMERVELL JOHNSON EL PASO 9 HUDSPETH CULBERSON JEFF DAVIS LOVING WINKLER 17 16 ECTOR MIDLAND GLASSCOCK CRANE UPTON REAGAN HENDERSON HILL STERLING COKE RUNNELS COMANCHE COLEMAN BROWN HAMILTON MILLS BOSQUE WARD REEVES IRION 18 TOM GREEN CONCHO MCCULLOCH MENARD MASON LLANO SAN SABA LAMPASAS 11 3 CORYELL MCLENNAN 24 FALLS MILAM NAVARRO ANDERSON FREESTONE LIMESTONE LEON ROBERTSON 22 13 GREGG RUSK HARRISON PANOLA CHEROKEE SHELBY NACOGDOCHES HOUSTON ANGELINA TRINITY SAN AUGUSTINE SABINE BELL SCHLEICHER PECOS CROCKETT SUTTON TERRELL BURNET WILLIAMSON 6 MADISON WALKER POLK SAN JACINTO TYLER JASPER NEWTON BRAZOS KIMBLE GILLESPIE BLANCO TRAVIS BURLESON GRIMES WASHINGTON AUSTIN WALLER HARDIN MONTGOMERY LIBERTY LEE BASTROP FAYETTE PRESIDIO BREWSTER VAL VERDE EDWARDS REAL KERR KENDALL BANDERA COMAL HAYS CALDWELL 10 BRAZORIA 4 ORANGE JEFFERSON CHAMBERS HARRIS KINNEY UVALDE MEDINA 19 BEXAR ATASCOSA MCMULLEN COLORADO GUADALUPE GONZALES LAVACA WHARTON WILSON KARNES GOLIAD DE WITT FORT BEND GALVESTON MAVERICK ZAVALA FRIO 23 VICTORIA JACKSON MATAGORDA CALHOUN DIMMIT LA SALLE BEE LIVE OAK REFUGIO ARANSAS 1. Abilene 2. Amarillo 3. Austin-Round Rock 4. Beaumont-Port Arthur 5. Brownsville-Harlingen 6. College Station-Bryan 7. Corpus Christi 8. Dallas-Fort Worth-Arlington 9. El Paso 10. Houston-Sugar Land-Baytown 11. Killeen-Temple-Fort Hood 12. Laredo 13. Longview 14. Lubbock 15. McAllen-Edinburg-Mission 16. Midland 17. Odessa 18. San Angelo 19. San Antonio 20. Sherman-Denison 21. Texarkana 22. Tyler 23. Victoria 24. Waco 25. Wichita Falls 12 WEBB ZAPATA SAN PATRICIO JIM WELLS DUVAL NUECES KLEBERG 7 JIM HOGG BROOKS KENEDY STARR 15 WILLACY CAMERON HIDALGO 5 Prepared by the Labor Market and Career Information Department, TWC Edited by Real Estate Center at Texas A&M University AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 TABLE OF CONTENTS DEMOGRAPHICS..................................................................................................... 1 EDUCATION ............................................................................................................ 7 EMPLOYMENT ........................................................................................................ 8 ECONOMY ............................................................................................................. 15 INFRASTRUCTURE ................................................................................................ 16 MULTIFAMILY ....................................................................................................... 17 HOUSING ............................................................................................................... 19 RETAIL ................................................................................................................... 26 HOTEL.................................................................................................................... 30 OFFICE ................................................................................................................... 31 INDUSTRIAL .......................................................................................................... 34  AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Demographics Austin MSA Population Percent Year Population Change 1996 1,073,037 1997 1,111,264 3.6 1998 1,155,579 4.0 1999 1,205,898 4.4 2000 1,249,763 3.6 2001 1,319,000 5.5 2002 1,346,332 2.1 2003 1,376,005 2.2 2004 1,411,199 2.6 2005 1,452,529 2.9 2006 1,513,565 4.2 2007 1,598,161 5.6 * July 1 population estimates Source: U.S. Census Bureau County Bastrop Caldwell Hays Travis Williamson County Population* Growth Growth 1997-2007 1997 2007 (in percent) 51,058 72,248 41.5 30,208 36,705 21.5 85,902 141,480 64.7 736,587 974,365 32.3 207,509 373,363 79.9 * July 1 population estimates Source: U.S. Census Bureau City Austin Cedar Park Georgetown Lockhart Pflugerville Round Rock San Marcos Taylor Area Cities With 10,000 or More Residents 1990 2000 Growth 1990 - 2000 Population Population (in percent) 465,622 656,562 41.0 5,161 26,049 404.7 14,842 28,339 90.9 9,205 11,615 26.2 4,444 16,335 267.6 30,923 61,136 97.7 28,743 34,733 20.8 11,472 13,575 18.3 Source: U.S. Census Bureau ____________________________________________________________________ 1   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Texas Metropolitan Area Population* Change Metropolitan Area Austin-Round Rock McAllen-Edinburg-Mission Laredo Dallas-Fort Worth-Arlington Houston-Sugar Land-Baytown Brownsville-Harlingen San Antonio Texas Tyler Sherman-Denison El Paso College Station-Bryan Amarillo Killeen-Temple-Fort Hood Waco Midland Longview Lubbock Texarkana Victoria Odessa Corpus Christi San Angelo Abilene Beaumont-Port Arthur Wichita Falls * July 1 population estimates Source: U.S. Census Bureau 1997 1,111,264 519,903 177,140 4,770,420 4,427,401 318,281 1,628,676 19,740,317 168,531 105,122 665,066 176,098 219,752 321,821 207,991 116,826 192,139 247,658 128,258 109,417 121,749 402,504 105,261 157,405 381,675 151,480 2007 1,598,161 710,514 233,152 6,145,037 5,628,101 387,210 1,990,675 23,904,380 198,705 118,675 734,669 203,371 242,240 370,008 228,123 126,408 203,611 267,211 134,215 113,797 129,570 414,376 108,085 159,343 376,241 148,148 Percent Change 43.8 36.7 31.6 28.8 27.1 21.7 22.2 21.1 17.9 12.9 10.5 15.5 10.2 15.0 9.7 8.2 6.0 7.9 4.6 4.0 6.4 2.9 2.7 1.2 -1.4 -2.2 Year 2000 2005 2010 2015 2020 2025 2030 2035 2040 Austin-Round Rock MSA Projected Population Texas State Data Center Texas Water Development (Scenario 0.5) Board 1,249,763 1,249,763 1,405,638 1,563,179 1,610,452 1,727,413 1,898,404 2,061,706 2,079,470 2,269,254 2,508,413 2,463,056 2,658,510 2,937,897 Sources: Texas State Data Center (2006 projection) and Texas Water Developm ent Board (2006 projection) ____________________________________________________________________ 2   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Texas Metropolitan Area Population Growth Forecast, 2000 - 2020 Texarkana Wichita Falls Beaumont-Port Arthur Abilene San Angelo Sherman-Denison Longview Lubbock Midland Tyler Waco Odessa Victoria College Station-Bryan Amarillo San Antonio Corpus Christi Texas Killeen-Temple-Fort Hood Houston-Sugar Land-Baytown El Paso Dallas-Fort Worth-Arlington Brownsville-Harlingen Austin-Round Rock McAllen-Edinburg-Mission Laredo 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Texas State Data Center – Scenario 0.5 (2006 projection) Household Composition Austin MSA Average household size (2000) 2.57 Population younger than 18 (2000, in percent) 25.4 Population 65 and older (2000, in percent) 7.3 Source: U.S. Census Bureau (1999 definition) Texas 2.74 28.2 9.9 Distribution by Race and Hispanic or Latino Origin, 2000 (in percent) Austin MSA Texas White 72.5 71.0 Black 8.0 11.5 Asian 3.5 2.7 American Indian 0.6 0.6 Other 12.8 11.7 Two or more races 2.6 2.5 Hispanic (of any race) 26.2 32.0 Source: U.S. Census Bureau (1999 definition) ____________________________________________________________________ 3   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Texas Migration Patterns 2007 Data is based on Atlas Van Lines Interstate and Cross-Border Household Goods Moves per calendar year. Atlas analyzes data in January on the origins and destinations of the company’s interstate moves during the prior 12 months. Year 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Inbound / Outbound 8,831 6,665 9,714 6,812 9,525 7,210 8,644 7,442 8,075 6,920 7,723 6,778 9,030 7,584 10,063 8,659 8,718 7,945 10,075 7,965 Source: Atlas Van Lines Jan-2008 http://www.atlasworldgroup.com/migration/ ____________________________________________________________________ 5   City of Austin Growth Watch: http://www.ci.austin.tx.us/growth/default.htm 78717 78681 78729 78728 78660 78727 Lake Travis 78726 78750 78759 78732 78730 78758 78753 78754 78653 78731 78757 78756 78752 78723 78724 78653 78751 78722 78703 78746 78705 78701 Decker Lake 78736 78735 78702 78741 78721 78725 78704 78749 78739 78745 78748 78744 ABIA 78617 78652 Source: Map produced by Ryan Robinson, City Demographer 78747 Department of Planning, City of Austin. March 2008. City of Austin, 2000 to 2020 Projected by ZIP Code Population Growth 20,000 Plus Persons 15,000 to 20,000 10,000 to 15,000 5,000 to 10,000 2,500 to 5,000 Less than 2,500 AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Education County Bastrop Caldwell Hays Travis Williamson Texas Educational Attainment, Persons Age 25 and Older, 2000 (in percent) High school Some college, Associate's Bachelor's Master's Doctorate graduate no degree degree degree degree degree 31.7 22.9 5.3 12.4 3.1 0.5 34.8 20.2 3.1 10.0 2.6 0.2 22.9 25.6 4.8 20.4 7.4 1.9 17.3 21.5 5.2 26.1 9.6 2.1 22.2 26.4 6.6 24.4 6.8 1.1 24.8 22.4 5.2 15.6 5.2 0.8 Source: U.S. Census Bureau Educational Level, Persons Age 25 and Older, 2000 (in percent) Level of Education High School Graduate or Higher Bachelor's Degree or Higher Source: U.S. Census Bureau (1999 definition) Austin MSA 84.8 36.7 Texas 75.7 23.2 Local College and University Enrollment, Fall Semester School 2003 2004 2005 2006 Austin Community College 28,862 29,004 30,499 31,610 Concordia University 1,061 1,114 1,193 1,239 Huston-Tillotson University 666 685 706 742 St. Edward's University 4,441 4,648 4,928 5,218 Texas State University - San Marcos 26,306 26,783 27,129 27,485 University of Texas 51,426 50,377 49,233 49,697 Source: Texas Higher Education Coordinating Board 2007 31,822 1,213 768 5,298 28,121 50,170 ____________________________________________________________________ 7   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Employment Top Ten Employers Employer State of Texas Dell Inc. University of Texas at Austin Austin Independent School District Federal Government City of Austin Seton Healthcare Network IBM Corporation St. David's Healthcare Partnership Round Rock Independent School District Sector Government Computer equipment mfg./sales Higher education Public education Government Government Healthcare (headquarters) Computer systems, hardware, software Healthcare (headquarters) Public education Employees 65,941 17,000 14,104 10,610 10,405 10,000 6,743 6,300 6,219 5,175 Source: Greater Austin Cham ber of Com m erce Feb-2008 Top Ten Employer Dell Inc. Seton Healthcare Network IBM Corporation St. David's Healthcare Partnership Freescale Semiconductor AT&T Flextronics San Marcos Outlets University Medical Center at Brackenridge Advanced Micro Devices Private Employers Sector Computer equipment mfg./sales Healthcare (headquarters) Computer systems, hardware, software Healthcare (headquarters) Semiconductor chip design, mfg. Telecommunications (hdq. of Texas) Contract electronics mfg. Outlet retail stores Hospital, acute care Semiconductor chip engineering Employees 17,000 6,743 6,300 6,219 5,000 3,450 3,000 3,000 2,887 2,600 Source: Greater Austin Cham ber of Com m erce Feb-2008 ____________________________________________________________________ 8   GREATER AUSTIN CHAMBER OF COMMERCE TOP 100 SELECTED MAJOR EMPLOYERS Summer 2007 List excludes hospitals/healthcare-related, school districts, and other government agencies. Name 3M Co. Accenture ACS State Healthcare Activant Solutions Advanced Micro Devices AirBorn (Georgetown)* American Achievement Corp. American Cancer Society Apple Computer Applied Materials AT&T Austin Energy Austin Foam Plastics BAE Systems Integrated Defense Solutions Bank of America Blizzard Entertainment BMC Software CFAN Co. (San Marcos)* CIBER Cirrus Logic Cisco Systems CSC Financial Services Group CyberTrader Cypress Semiconductor Corporation Dell Dell Financial Services Dresser Wayne Emerson Process Management ERCOT - Electric Reliability Council of Texas EZCorp Farmers Insurance Group First American Flood Data Services Freescale Semiconductor Gary Job Corp Center (San Marcos)* Golfsmith International Grande Communications (San Marcos)* GSD&M GTECH Guaranty Financial Services Harcourt Education Harris Connect Harte-Hanks Response Management HEB Distribution Center (San Marcos)* Hewlett-Packard Home Depot Technology Center Hoover's Hospira Hunter Industries (San Marcos)* Hyatt Regency Lost Pines Resort & Spa (Bastrop)* IBM Corp. Employees 1,000 455 1,200 300 2,500 350 780 500 1,400 2,700 3,450 1,600 305 600 500 500 383 315 300 305 1,000 425 300 325 18,000 1,100 600 505 570 327 700 425 5,200 567 413 375 791 350 538 600 300 1,092 480 550 400 342 1,350 650 720 6,200 Indymac Bank Intel Corp. Name Employees 300 500 300 625 600 1,669 300 541 350 500 297 2,024 280 320 420 460 1,300 500 1,500 1,250 3,000 1,200 400 300 340 2,900 1,200 1,403 350 400 340 300 721 800 400 600 485 322 1,400 400 403 300 4,728 600 550 670 500 900 1,468 361 Interstate Connections JPMorgan Chase Bank Level 3 (formerly Broadwing) Lower Colorado River Authority (L.C.R.A.) Martin-Decker Totco Maximus Michael Angelo's Gourmet Foods Minacs Worldwide Multimedia Games National Instruments National Western Life Insurance NFP Securities and Insurance Oracle Pearson Educational Measurements PPD Development PRC Progressive Insurance Co. Samsung Austin Semiconductor* San Marcos Outlets (San Marcos)* Sears Home Services SEMATECH SigmaTel Silicon Laboratories Solectron Texas Spansion State Farm Insurance Co. Stock Building Supply of Texas Sun Microsystems SYSCO Food Services TECO-Westinghouse Motor Co. (N Round Rock)* TeleNetwork Temple-Inland Texas Association of School Boards Texas Guaranteed Student Loan Corp. Texas Mutual Insurance Co. The 401(k) Company Time Warner Cable Co. Tokyo Electron America Toppan Photomasks Trilogy U.S. Internal Revenue Service U.S. Veterans Administration Unisys Corp. URS Corp. Vignette Corp. Wells Fargo Bank Texas Whole Foods Market Wide-Lite (San Marcos)* * Employers not included in the map. AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Employment Growth by Industry Austin-Round Rock MSA Employment Growth 2007 (Percent Change) 5.2 Unemployment Rate 2007 (Percent Change) 3.6 Net Job Change in 2007 37,300 2007 Employment Growth by Sector (Percent Change) Natural Resources and Mining and Construction 9.0 Manufacturing 1.9 Trade, Transportation, and Utilities 6.4 Information 0.5 Financial Activities 3.9 Professional and Business Services 7.1 Educational and Health Services 3.8 Leisure and Hospitality 5.5 Government 2.8 Source: Texas Workforce Com m ission and Real Estate Center at Texas A&M University Texas 3.0 4.3 305,900 7.5 0.9 2.9 -0.7 3.0 5.3 3.1 3.9 0.9 Texas Metropolitan Area Nonfarm Employment Change Metropolitan Area Sherman-Denison Wichita Falls San Angelo Beaumont-Port Arthur Abilene Victoria Texarkana Corpus Christi El Paso Lubbock Amarillo Waco Odessa Dallas-Fort Worth-Arlington Texas Longview Killeen-Temple-Fort Hood College Station-Bryan Tyler San Antonio Houston-Sugar Land-Baytown Brownsville-Harlingen Austin-Round Rock Laredo McAllen-Edinburg-Mission Midland 1997 43,900 61,300 43,900 157,400 62,000 46,200 50,800 158,800 243,100 114,900 97,800 94,800 50,000 2,452,900 8,608,500 79,500 100,600 74,600 76,900 684,400 2,064,400 97,400 566,300 60,200 133,900 133,900 2007 43,800 62,500 44,900 164,300 65,700 50,900 56,200 176,000 270,900 128,500 111,900 108,800 59,400 2,941,700 10,359,200 95,800 121,400 90,200 93,400 832,400 2,549,600 123,600 757,300 86,200 210,200 210,200 Percent Change -0.2 2.0 2.3 4.4 6.0 10.2 10.6 10.8 11.4 11.8 14.4 14.8 18.8 19.9 20.3 20.5 20.7 20.9 21.5 21.6 23.5 26.9 33.7 43.2 57.0 57.0 Source: Texas Workforce Com m ission and Real Estate Center at Texas A&M University ___________________________________________________________________ 10   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Metropolitan Area Nonfarm Employment Change 1997-2007 Midland McAllen-Edinburg-Mission Laredo Austin-Round Rock Brownsville-Harlingen Houston-Sugar Land-Baytown San Antonio Tyler College Station-Bryan Killeen-Temple-Fort Hood Longview Texas Dallas-Fort Worth-Arlington Odessa Waco Amarillo Lubbock El Paso Corpus Christi Texarkana Victoria Abilene Beaumont-Port Arthur San Angelo Wichita Falls Sherman-Denison 0% 10% 20% 30% 40% 50% 60% Source: Texas Workforce Commission and Real Estate Center at Texas A&M University Average Hourly Wage 2006 Dallas-Fort Worth-Arlington Austin-Round Rock Houston-Sugar Land-Baytown College Station-Bryan Texas Midland Beaumont-Port Arthur San Antonio Lubbock Odessa Victoria Amarillo Tyler Waco Sherman-Denison Corpus Christi Longview Texarkana Killeen-Temple-Fort Hood El Paso Wichita Falls San Angelo Abilene Laredo McAllen-Edinburg-Mission Brownsville-Harlingen $12.57 $13.00 $13.59 $13.76 $16.08 $16.07 $15.98 $15.72 $15.46 $15.34 $15.27 $15.12 $15.09 $15.09 $14.98 $14.86 $14.86 $14.67 $14.66 $14.39 $17.49 $17.25 $18.44 $19.19 $19.17 $19.07 $10.00 Source: Texas Workforce Commission $12.00 $14.00 $16.00 $18.00 $20.00 ___________________________________________________________________ 12   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock MSA Nonfarm Employment Percent Year Employment Change 1997 566,300 1998 600,700 6.1 1999 635,400 5.8 2000 672,700 5.9 2001 674,100 0.2 2002 658,400 -2.3 2003 653,000 -0.8 2004 667,400 2.2 2005 693,300 3.9 2006 720,000 3.9 2007 757,300 5.2 Source: Texas Workforce Com m ission and Real Estate Center at Texas A&M University Nonfarm Employment Growth Austin-Round Rock MSA 7.0 6.0 5.0 Percent Change from Previous Year 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Texas Workforce Commission and Real Estate Center at Texas A&M University ___________________________________________________________________ 13   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock MSA Unemployment Rate 7 6 5 Percent 4 3 2 1 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Texas Workforce Commission and Real Estate Center at Texas A&M University Distribution of Employment in Major Categories Austin-Round Rock MSA 800,000 700,000 600,000 Total Annual Jobs 500,000 400,000 300,000 200,000 100,000 0 2003 2004 2005 Manufacturing Information Professional and Business Services Leisure and Hospitality 2006 2007 Natural Resources and Mining and Construction Trade, Transportation, and Utilities Financial Activities Educational and Health Services Government Source: Texas Workforce Commission and Real Estate Center at Texas A&M University ___________________________________________________________________ 14   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Economy Austin-Round Rock Gross Retail Sales Sales per Capita Year Total Sales 1996 $11,856,282,020 1997 $13,041,622,170 1998 $13,938,050,757 1999 $15,595,121,628 2000 $18,067,257,543 2001 $18,727,357,098 2002 $16,106,539,761 2003 $16,209,875,331 2004 $18,482,846,782 2005 $20,171,460,330 2006 $22,085,594,109 State Average 2006: $11,049 $11,736 $12,062 $12,932 $14,457 $14,198 $11,963 $11,780 $13,097 $13,887 $14,592 $15,527 * 2007 data not available as of January 2008. Source: Texas Com ptroller's Office Gross Retail Sales per Capita 2006 Brownsville-Harlingen Texarkana McAllen-Edinburg-Mission El Paso Corpus Christi Wichita Falls Beaumont-Port Arthur College Station-Bryan Sherman-Denison Waco Abilene San Angelo Laredo Victoria Killeen-Temple-Fort Hood Houston-Sugar Land-Baytown San Antonio Fort Worth-Arlington MD Amarillo Longview Tyler Austin-Round Rock Odessa Texas Midland Dallas-Plano-Irving MD Lubbock $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 $19,000 $21,000 Source: Texas Comptroller's Office ___________________________________________________________________ 15   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Infrastructure Austin Airline Activity 2003 2004 Austin-Bergstrom International Airport Enplaned (int'l & national) 3,306,357 3,707,864 Deplaned (int'l & national) 3,400,724 3,530,781 Total (int'l & national) 6,707,081 7,238,645 Source: Austin-Bergstrom International Airport 2005 3,922,203 3,761,342 7,683,545 2006 2007 4,211,309 4,552,481 4,050,001 4,332,910 8,261,310 8,885,391 2003 Austin-Bergstrom International Airport Austin Cargo Statistics 2004 2005 254,419,495 241,814,505 2006 229,750,544 2007 210,775,763 252,276,024 Source: Austin-Bergstrom International Airport ___________________________________________________________________ 16   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Multifamily Austin Apartment Statistics 2007 Austin $0.91 $0.91 94.7% 93.9% San Texas Marcos Metro Area $0.87 $0.80 $0.94 $0.89 94.3% 92.8% 93.6% 93.8% Average Average Average Average rent per square foot rent for units built since 2000 occupancy occupancy for units built since 2000 Source: Apartm ent MarketData Research Austin MSA Multifamily Market Historical Rent and Occupancy 100.00% $0.97 98.00% $0.89 96.00% $0.78 94.00% 92.00% $0.50 90.00% $0.40 88.00% 86.00% 84.00% 82.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $0.30 $0.20 $0.10 $0.00 $0.85 $0.80 $0.88 $0.82 $0.81 $0.83 $0.98 $0.91 $0.96 $1.00 $0.90 $0.80 $0.70 $0.60 Occupancy Rental Rate Source: Austin Investor Interests www.apartmenttrends.com ___________________________________________________________________ 17   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-San Marcos Multifamily Building Permits 5+ Multifamily Building Permits 9,000 1999 MSA definition 8,000 7,000 6,000 5,000 Units 4,000 3,000 2,000 1,000 - Source: U.S. Bureau of Census and Real Estate Center at Texas A&M University 2007 figure is a preliminary number. ___________________________________________________________________ 18   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Housing 2007 Housing Affordability Index Required Median 2007 Median- Income to Family Priced Home Qualify Income $184,200 $45,314 $69,300 $147,500 $36,286 $52,600 $217,800 $53,138 $59,000 HAI for FirstTime Homebuyers** 1.01 1.03 0.63 MLS Austin TEXAS United States HAI* 1.53 1.45 1.11 * The HAI is the ratio of the median family income to the income required to buy the median-priced house using standard mortgage financing at the current interest rate. Standard financing is a fixed-rate, 30-year loan covering 80 percent of the cost of the home. A HAI of 1.00 indicates that the median family income is exactly equal to the required income to qualify for the standard loan to purchase the median-priced house. ** First-time home buyer is assumed to purchase a home equal to the first quartile home price using a 90% home loan at an interest rate 0.5 percent greater than the standard current rate. Source: Real Estate Center at Texas A&M University Price Distribution of MLS Homes Sold, Austin Area Price Range $29,999 or less 30,000 - 39,999 40,000 - 49,999 50,000 - 59,999 60,000 - 69,999 70,000 - 79,999 80,000 - 89,999 90,000 - 99,999 100,000 - 119,999 120,000 - 139,999 140,000 - 159,999 160,000 - 179,999 180,000 - 199,999 200,000 - 249,999 250,000 - 299,999 300,000 - 399,999 400,000 - 499,999 500,000 and more 2001 0.3 0.4 0.6 0.9 1.3 1.8 3.2 4.5 14.6 16.2 11.7 9.4 6.4 10.2 6.5 6.2 2.2 3.6 (in percent) 2002 2003 0.3 0.4 0.3 0.6 0.6 0.8 0.9 1.1 1.2 1.4 1.6 1.6 2.5 2.9 3.9 3.9 13.3 12.6 16.5 15.6 12.5 12.1 9.4 9.4 6.6 6.5 10.8 10.7 7.4 7.4 6.5 6.5 2.4 2.6 3.5 3.7 2004 0.7 1.0 1.1 1.2 1.6 2.3 3.1 4.0 12.1 14.7 11.7 8.8 6.4 10.5 6.9 7.2 2.8 4.0 2005 0.5 0.8 0.8 1.0 1.4 2.0 3.0 3.7 11.0 13.7 11.4 9.3 6.7 11.2 7.2 8.2 3.5 4.6 2006 0.3 0.6 0.6 0.9 1.1 1.7 2.2 2.7 9.0 13.5 11.4 10.1 7.1 11.7 8.0 8.9 4.3 6.1 2007 0.2 0.3 0.5 0.8 0.9 1.2 1.7 2.3 7.1 11.8 11.8 9.8 8.0 13.0 8.9 9.9 5.0 6.9 Source: Real Estate Center at Texas A&M University ___________________________________________________________________ 19   Austin Neighborhoods 183 Anderson Mill Estates Balcones Village Jollyville McNeil Estates 35 Wells Branch Pflugerville 620 Austin Hills Jester Estates Steiner Ranch 2222 Balcones Woods Gracy Woods Quail Creek 1 N Great Hills 360 Lakewood Windsor Hills Northwest Hills Crestview Allandale Highland Park West Rosedale Tarrytown Bryker Woods Enfield 360 Georgian Acres St. Johns University Hills Walnut Hills Delwood Springdale Hills French Place 183 290 2244 Davenport Ranch West Lake Hills Hyde Park UT Colony Park Lost Creek The Estate of Barton Creek Rollingwood Clarksville Capitol Govalle 969 1 71 Kennedy Ridge Oak Hill Barton Hills 290 Bouldin Travis Heights Montopolis Southside Del Valle AustinBergstrom International Airport Hornsby Bend Sunset Valley Maple Run Circle C Cherry Creek Buckingham Estates Texas Oaks San Leanne Onion Creek 71 Dove Springs Shady Hollow Tanglewood Forest 35 Manchaca © Real Estate Center at Texas A&M University AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Price Distribution of MLS Homes Sold Austin Area 16.0 14.0 12.0 10.0 Percent 8.0 6.0 4.0 2.0 0.0 2005 2006 2007 Source: Real Estate Center at Texas A&M University Property Tax Rates, 2007 County, Major City, Major School District Tax Rate per $100 Taxing Entity* Valuation Travis County 0.4216 City of Austin 0.4034 Austin ISD 1.1630 Total $1.99 Tax Rate per $100 Taxing Entity* Valuation Williamson County 0.4591 City of Round Rock 0.3652 Round Rock ISD 1.3238 Total $2.15 Tax Rate per $100 Taxing Entity* Valuation Hays County 0.3714 City of San Marcos 0.5302 San Marcos ISD 1.3700 Total $2.27 * Only the typical taxing entities are listed. How ever, there are numerous numbers of taxing entities that need to be taken into account for an actual tax rate calculation. See follow ing links for more complete lists: http://w w w .traviscad.org/06rates.pdf http://w w w .hayscad.com/PA/haysw eb/taxrates.htm http://w w w .w cad.org/ (tax rates) Source: Travis, William son, and Hays County Appraisal District ___________________________________________________________________ 21   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 National Home Price Appreciation The HPI for each geographic area is estimated using repeated observations of housing values for individual single-fam ily residential properties on which at least two m ortgages were originated and subsequently purchased by either Freddie Mac or Fannie Mae. 30% California 25% 20% Change from Previous Year Florida 15% 10% USA 5% Texas 0% -5% -10% 4Q-97 2Q-98 4Q-98 2Q-99 4Q-99 2Q-00 4Q-00 2Q-01 4Q-01 2Q-02 4Q-02 2Q-03 4Q-03 2Q-04 4Q-04 2Q-05 4Q-05 2Q-06 4Q-06 2Q-07 4Q-07 California Source: Office of Federal Housing Enterprise Oversight Florida Texas USA Home Price Appreciation Austin-Round Rock MSA The HPI for each geographic area is estimated using repeated observations of housing values for individual single-fam ily residential properties on which at least two m ortgages were originated and subsequently purchased by either Freddie Mac or Fannie Mae. 16.0% 14.0% 12.0% Change from Previous Year 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 4Q-97 2Q-98 4Q-98 2Q-99 4Q-99 2Q-00 4Q-00 2Q-01 4Q-01 2Q-02 4Q-02 2Q-03 4Q-03 2Q-04 4Q-04 2Q-05 4Q-05 2Q-06 4Q-06 2Q-07 Austin-Round Rock Texas USA Source: Office of Federal Housing Enterprise Oversight 4Q-07 ___________________________________________________________________ 22   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 2005 Occupied Housing Unit Characteristics Austin-Round Rock MSA Total RenterOwneroccupied occupied occupied housing housing housing units units units 326,484 214,201 540,685 20.0% 35.9% 16.9% 27.2% 42.6% 28.2% 12.6% 16.5% 29.0% 32.9% 15.2% 23.0% Owneroccupied housing units 5,162,604 19.1% 34.2% 17.2% 29.5% Texas Renteroccupied housing units 2,815,491 35.0% 25.8% 16.0% 23.2% Total occupied housing units 7,978,095 24.7% 31.2% 16.8% 27.3% Housing Unit Characteristics Occupied housing units Household Size 1-person household 2-person household 3-person household 4-or-more-person household Race and Hispanic or Latino Origin of Householder One Race White Black or African American American Indian and Alaska Native Asian Native Hawaiian and Other Pacific Islander Some other race Two or more races Age of Householder Under 35 years 35 to 44 years 45 to 54 years 55 to 64 years 65 to 74 years 75 to 84 years 85 years and over Units in Structure 1, detached 1, attached 2 apartments 3 or 4 apartments 5 to 9 apartments 10 or more apartments Mobile home or other type of housing Year Structure Built 2000 or later 1990 to 1999 1980 to 1989 1960 to 1979 1940 to 1959 1939 or earlier Bedrooms No bedroom 1 bedroom 2 or 3 bedrooms 4 or more bedrooms Annual Household Income and Housing Costs* Median household income (dollars) Annual Median Housing Costs (dollars) Housing Costs as a percentage of household income * in 2005 inflation-adjusted dollars 81.3% 5.3% 0.7% 3.5% 8.0% 1.2% 18.0% 25.3% 24.8% 16.1% 9.3% 4.9% 1.6% 87.7% 2.7% 0.7% 0.4% 0.2% 1.4% 6.9% 19.6% 25.7% 21.4% 20.4% 9.0% 3.9% 0.2% 2.0% 65.8% 32.0% $71,389 $15,336 21.5% 69.7% 9.9% 0.3% 5.0% 13.6% 1.5% 55.6% 19.6% 13.7% 5.9% 2.5% 1.8% 0.9% 18.1% 4.5% 7.4% 6.4% 10.8% 49.4% 3.4% 17.7% 19.1% 23.6% 30.5% 7.0% 2.0% 2.0% 38.1% 56.3% 3.6% $30,992 $8,964 28.9% 76.7% 7.1% 0.6% 4.1% 0.0% 10.2% 1.3% 32.9% 23.0% 20.4% 12.1% 6.6% 3.7% 1.3% 60.1% 3.4% 3.3% 2.8% 4.4% 20.4% 5.5% 18.9% 23.1% 22.2% 24.4% 8.2% 3.2% 0.9% 16.3% 62.0% 20.8% $50,484 $11,664 23.1% 79.0% 8.2% 0.5% 2.9% 0.0% 8.3% 1.0% 14.4% 21.9% 24.1% 18.1% 11.9% 7.6% 2.0% 87.5% 2.3% 0.3% 0.4% 0.3% 0.7% 8.5% 13.7% 18.6% 18.7% 28.7% 15.4% 4.9% 0.2% 2.1% 70.8% 26.8% $54,610 $10,536 19.3% 66.2% 17.9% 0.6% 3.1% 0.1% 10.8% 1.4% 46.3% 21.4% 15.4% 8.3% 4.2% 3.1% 1.3% 28.3% 3.6% 4.9% 8.8% 13.8% 35.1% 5.6% 10.9% 14.8% 22.5% 35.0% 12.4% 4.5% 1.5% 32.6% 61.7% 4.2% $26,782 $8,052 30.1% 74.5% 11.6% 0.6% 3.0% 0.0% 9.2% 1.2% 25.6% 21.7% 21.0% 14.7% 9.2% 6.1% 1.8% 66.6% 2.8% 1.9% 3.3% 5.1% 12.9% 7.5% 12.7% 17.2% 20.1% 30.9% 14.3% 4.8% 0.6% 12.9% 67.6% 18.9% $42,139 $9,108 21.6% Source: U.S. Census Bureau 2005 and Real Estate Center at Texas A&M University ___________________________________________________________________ 23   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Yearly Homes Sales and Months Inventory Austin MLS 35,000 7 30,000 6 25,000 5 Months Inventory 20,000 4 Sales 15,000 3 10,000 Months of Inventory measures the current absorption rate and how long it would take for current supply to be depleted if no other listings came on the market. 2 5,000 1 0 1998 1999 2000 2001 2002 Sales 0 2003 Supply 2004 2005 2006 2007 Source: Real Estate Center at Texas A&M University Average Sales Price Austin MLS $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Real Estate Center at Texas A&M University ___________________________________________________________________ 24   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Single-Family Homes Sales Volume Austin MLS 3,500 3,000 2,500 2,000 Units 1,500 1,000 500 0 Jan Feb Mar Apr May Jun 2005 2006 Jul 2007 Aug Sep Oct Nov Dec Source: Real Estate Center at Texas A&M University Single-Family Building Permits and Average Value Austin-San Marcos 1600 1999 MSA definition $180,000 $160,000 $140,000 $120,000 1400 1200 1000 Average Value Units $100,000 800 $80,000 600 $60,000 400 $40,000 $20,000 $0 1998 1999 2000 2001 2002 Units 200 0 2003 2004 2005 2006 2007 Average Value 2007 figure is a preliminary number. Source: U.S. Bureau of Census and Real Estate Center at Texas A&M University ___________________________________________________________________ 25   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Retail Austin Retail Market Average Monthly Base Average Monthly Base Rental Rate 100,000 Rental Rate 50,000-100,000 Sq. Ft. and Up Sq. Ft. $1.15 $1.32 $1.21 $1.40 $1.25 $1.44 $1.36 $1.57 $1.39 $1.62 $1.41 $1.64 $1.43 $1.66 $1.45 $1.75 $1.41 $1.82 $1.54 $1.81 $1.60 $1.97 Overall Occupancy (in percent) 92.77 93.49 94.83 95.77 94.47 94.65 93.35 93.89 92.89 93.30 92.88 Year-End 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total Sq. Ft. Tracked 13,287,479 13,958,132 14,563,469 15,878,458 16,850,866 17,179,470 17,814,319 18,619,585 18,763,591 18,608,587 20,198,154 Source: NAI Austin Sector Arboretum Cedar Park Central East Far North Far Northwest Georgetown North Northeast Northwest Pflugerville Round Rock South Central Southeast Southwest West Total (1) (2) Current Six Month Retail Absorption Total Sq. Ft. Sq. Ft. Percent Sq. Ft. Absorbed (1) Absorbed (2) Occupied 2,294,375 5,253 664,443 93.76 354,928 (1,127) 0 93.82 593,563 (1,039) (12,830) 94.03 1,273,578 5,935 205,645 91.13 1,035,134 5,500 4,458 92.03 3,195,534 13,563 61,077 95.15 474,820 (45,608) 25,385 72.86 1,926,492 (6,988) 13,928 92.91 691,526 1,128 (3,363) 96.89 60,600 (4,600) 0 92.41 184,431 (15,861) 0 83.83 2,764,424 (48,827) 40,272 91.12 2,523,741 (9,971) 383,130 95.36 198,566 (1,200) (4,459) 93.35 1,683,463 0 117,325 95.75 942,979 (813) (10,024) 87.42 20,198,154 (104,655) 1,484,987 92.88 Centers 50,000 to 100,000 sq. ft. Centers over 100,000 sq. ft. Source: NAI Austin Year-end 2007 ___________________________________________________________________ 26   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Retail Centers 50,000 to 100,000 Square Feet, Year-End 2007 Occupied Percent Avg. Monthly Sector Total Sq. Ft. Sq. Ft. Occupied Rate Arboretum 163,543 159,243 97 $2.21 Cedar Park 240,928 218,985 91 $1.78 Central 62,895 45,656 73 $2.50 East 240,406 231,341 96 $1.10 Far North 391,560 335,938 86 $1.28 Far Northwest 751,369 689,028 92 $1.43 Georgetown 170,362 97,001 57 $1.20 North 407,345 379,302 93 $1.41 Northeast 162,136 153,950 95 $1.92 Northwest 60,600 56,000 92 $1.75 Pflugerville 184,431 154,616 84 $1.40 Round Rock 59,538 54,661 92 $1.25 South Central 462,661 434,860 94 $1.52 Southeast 97,391 96,191 99 $1.67 Southwest 148,086 148,086 100 $2.41 West 250,717 196,992 79 $2.45 Total 3,853,968 3,451,850 90 $1.60 Source: NAI Austin Retail Centers Larger Than 100,000 Square Feet, Year-End 2007 Total Sq. Occupied Percent Avg. Monthly Sector Ft. Sq. Ft. Occupied Rate Arboretum 2,130,832 1,992,017 93 $2.74 Cedar Park 114,000 114,000 100 $2.33 Central 530,668 512,488 97 $2.28 East 1,033,172 929,299 90 $1.66 Far North 643,574 616,743 96 $1.52 Far Northwest 2,444,165 2,351,658 96 $1.74 Georgetown 304,458 248,974 82 $1.80 North 1,519,147 1,410,616 93 $1.41 Northeast 529,390 516,064 97 $1.71 Northwest 0 0 0 $0.00 Pflugerville 0 0 0 $0.00 Round Rock 2,704,886 2,464,352 91 $1.95 Southcentral 2,061,080 1,971,734 96 $1.83 Southeast 101,175 89,169 88 $1.75 Southwest 1,535,377 1,463,911 95 $2.26 West 692,262 627,347 91 $2.49 Total 16,344,186 15,308,372 94 $1.97 Source: NAI Austin Year-end 2007 ___________________________________________________________________ 27   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Retail Market Space by Sector Year-End 2007 Southwest 8% Southeast 1% West 5% Arboretum 11% Cedar Park 2% Central 3% East 6% South Central 12% Far North 5% Round Rock 14% Far Northwest 16% Georgetown 2% Pflugerville 1% Northwest Northeast 3% 0% Source: NAI Austin North 10% Retail Market Average Monthly Base Rental Rates $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 50,000 to 100,000 sq. ft. 100,000 sq. ft. and up Source: NAI Austin ___________________________________________________________________ 28   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Retail Market Overall Occupancy Rate 96% 96% 95% 95% 94% 94% 93% 93% 92% 92% 91% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: NAI Austin ___________________________________________________________________ 29   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Hotel Hotel* Occupancy and Rental Rates 2006 2007 Austin Austin Round Rock Texas Round Rock Texas # Rooms 000's 25.4 339.9 26 349.7 Average daily rate $95.78 $80.74 $104.08 $85.28 Occupancy rate (in percent) 66.6 61.3 68.5 61.4 *Only properties exceeding $18,000 in the current quarter are included; those units below $18,000 only result in 1.5% of the total state revenues, and have been excluded from this database. Source: Office of the Governor Econom ic Developm ent and Tourism and Source Strategies, Inc. of San Antonio ___________________________________________________________________ 30   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Office 2007 Year-End Market Summary Vacant Sq. Sq. Ft. Occupied Ft. Absorbed (in percent) 1,142,667 90,627 86% 363,237 78,219 86% 1,218,575 191,569 91% 401,466 96,244 78% 144,646 37,145 90% 457,933 150,592 93% 54,909 (16,301) 77% 3,783,433 628,095 89% Sector CBD North Northwest Northeast South Southwest Southeast Total Total Sq. Ft. 8,111,789 2,626,241 13,666,345 1,796,798 1,394,706 6,174,769 236,625 34,007,273 Weighted Rental Rates Class B Class A Avg. $25.85 $36.07 $32.75 $20.99 $28.66 $22.58 $24.78 $29.36 $27.69 $18.40 $17.00 $18.34 $17.94 $27.36 $19.99 $24.73 $30.08 $24.90 $16.50 $22.03 $20.75 $23.25 $31.38 $27.83 Source: NAI Austin Year-End 2007 Overall Office Rental Rates Against Occupancy (All Classes) 90% 88% 86% 84% $18.01 82% 80% 78% 84.2% 76% 74% 72% 70% 2003 2004 2005 Occupancy Rental Rates $30.00 $25.98 $25.00 $22.43 $20.37 $18.76 $20.00 Rental Rates Occupancy $15.00 87.5% 85.6% $10.00 80.8% 76.7% $5.00 $0.00 2006 Q4 2007 Source: Oxford Commercial ___________________________________________________________________ 31   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Overall Office Rental Rates Against Occupancy (Class A) 100% 90% 80% 70% 60% 50% 40% 30% 20% $5.00 10% 0% 2003 2004 2005 Occupancy Rental Rates $35.00 $29.77 $26.19 $22.75 $20.33 $18.84 $25.00 $30.00 Rental Rates Occupancy $20.00 73.2% 80.3% 85.1% 89.1% 86.5% $15.00 $10.00 $0.00 2006 Q4 2007 Source: Oxford Commercial Overall Office Vacancy (All Classes) 9,000,000 8,000,000 7,000,000 760,357 6,000,000 1,417,838 Square Feet 860,704 5,000,000 4,000,000 7,054,647 3,000,000 2,000,000 1,000,000 0 2003 2004 Direct Available 851,569 750,565 6,202,948 4,984,062 3,872,209 4,686,263 2005 Sublease Available 2006 Q4 2007 Source: Oxford Commercial ___________________________________________________________________ 32   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Overall Office Construction Against Absorption (All Classes) 2,500,000 2,202,535 2,000,000 1,500,000 1,169,181 1,000,000 1,214,853 1,081,403 789,531 595,486 500,000 61,200 0 0 59,907 Square Feet -500,000 -1,000,000 -1,196,803 -1,500,000 2003 2004 2005 Under Construction Office Absorption 2006 Q4 2007 Source: Oxford Commercial Office Market Overview Concentration, Year-End 2007 CBD 24% Southeast 1% Southwest 18% North 8% South 4% Northeast 5% Northwest 40% Source: NAI Austin ___________________________________________________________________ 33   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Austin-Round Rock Market Overview 2008 Industrial 2007 Year-End Industrial Geographical Sector & Building Use Office/Bulk/Manufacturing/Warehouse Flex/R&D Current Vacancy Existing Current Vacancy Under Existing Sq. Ft. (in percent) Constr.* Sq. Ft. (in percent) Submarket Round Rock 2,138,038 9 20,000 655,382 41 North 8,250,182 9 248,569 5,760,078 11 Northeast 3,937,758 9 277,277 2,401,943 14 East 1,357,320 10 0 0 0 Southeast 3,595,444 11 609,725 4,335,119 17 South 1,822,915 8 35,100 223,477 7 Total 21,101,657 9 1,190,671 13,375,999 15 *Scheduled or under construction Source: NAI Austin Under Constr.* 56,000 0 0 0 0 0 56,000 Submarket Round Rock North Northeast East Southeast South Total Current Six-Month Industrial Absorption Flex/R&D Manuf/Warehouse Total 23,959 52,952 76,911 141,323 210,939 352,262 41,518 141,646 183,164 0 (10,152) (10,152) 30,764 450,125 480,889 8,000 79,060 87,060 245,564 924,570 1,170,134 Source: NAI Austin Decem ber 2007 Average Industrial Rental Rates per Annual Flex / R&D $7.20 - $10.20 Bulk Warehouse $4.56 - $6.60 Office Warehouse $5.04 - $7.80 Manufacturing Whse. $6.00 - $8.04 Source: NAI Austin Sq. Ft.* Monthly $0.60 - $0.85 $0.36 - $0.55 $0.42 - $0.65 $0.50 - $0.67 *Based on direct lease rates. Rates quoted on a triple net basis. ___________________________________________________________________ 34   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 Industrial Market Concentration of Space, Year-End 2007 Southeast 23% South 6% Round Rock 8% East 4% Northeast 18% North 41% Source: NAI Austin ___________________________________________________________________ 35   AUSTIN, TEXAS REAL ESTATE CENTER MARKET OVERVIEW 2008 This annual report is created free of charge by the Real Estate Center at Texas A&M University. We strive to provide the most accurate, up-to-date, and insightful data to paint a detailed picture of Texas’ Metropolitan Statistical Areas. However, links contained in this report may change in time and become obsolete. The Real Estate Center advises to contact the original source if any of the links are found to be broken. The Center also provides numerous publications, resources, and data on building permits, employment, population, and home sales at http://recenter.tamu.edu. For the latest daily news visit http://recenter.tamu.edu/mnews/ Report compiled by: Administrative Coordinator Edith Craig Market Research Analyst Beth Thomas, MRE Technical Consultant Blake Lacy, LERE Coordinator Assistant Kory Merten Real Estate Center, 2115 TAMU, College Station, TX 77843-2115 Phone: 979.845.2031 | Fax: 979.845.0460