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1 November 2, 2009

2 Thank you to our Sponsors:

3 November 2, 2009

4 Featured Speakers: Debra Maltz Realtor with Kuper Sotheby s International Realty and President of Centro Properties will discuss the downtown residential market Marco A. Barros President/CEO, San Antonio Area Tourism Council will address the downtown visitor and hospitality industry Don Thomas Principal, Reata Real Estate Services will cover the current state of commercial office and retail / leasing and development

5 Featured Speaker: RESIDENTIAL REAL ESTATE INDUSTRY Debra Maltz Realtor /Broker Kuper Sotheby s International Realty Centro Properties

6 2009 Downtown Condominiums

7 Bexar County Condominium Sales By Quarter Source: SABOR (not all condos in MLS)

8 Downtown Condominium Sales By Quarter Source: SABOR (not all condos in MLS)

9 Judson Candy Factory Lofts Newly Completed Condominium South Flores 84 units for sale First closing November s.f s.f. $155K - $350K 93% sold or under contract

10 Vidorra Newly Completed Condominium Sunset Station 146 units for sale Completed March s.f s.f. $199K - $1M 34% sold 50 units closed robust sales in 7 months Quite a few under contract Financing Available Wells Fargo

11 Alteza Condominium Under Construction Market Street 146 units for sale Completion 11/09 thru 3/ s.f s.f. $298K - $3M Financing Available Wells Fargo, Broadway, others

12 600 New Downtown Condominiums Supply & Absorption Alteza Vidorra Judson

13 Condominium Financing Financial Meltdown Much more difficult to finance new projects Additional Fannie Mae & Freddie Mac restrictions on lending for condominiums

14 Lone Star Brewery Pending Condominium 64 units for sale (phase 1) Current Information Unavailable 750 s.f s.f. From $125K

15 Piazza San Lorenzo Terminated Condominium

16 2009 Downtown Apartments

17 Pearl Brewery Full Goods Warehouse Newly Completed Apartments Broadway Corridor 8 units for rent Completed Spring s.f s.f. $ $2326 /month 100% leased

18 Vistana Newly Completed Apartments Market Square 247 Units for rent 491 s.f s.f. $650 - $6793 / month 74% leased Opened April 2009

19 Downtown Demographic Profile: Vistana Status Gender Roommate 14% Married 5% Female 27% Single 81% Male 73%

20 Downtown Demographic Profile: Vistana Age Income Forties 20% Older 16% Twenties 36% >$80K 30% <$40K 27% Thirties 28% $40K - $80K 46%

21 Downtown Demographic Profile: Vistana Work Location Moving From Other 17% Downtown 36% Outside SA 37% Downtown 16% Suburbs 47% Suburbs 47%

22 St. Benedict s Apartments Under Construction King William 66 units for rent 2 of 3 phases complete Complete December s.f s.f. $ $3326 / month 50% leased Originally condos Liberty Bar March 2010

23 Victoria Commons Durango Phase Apartments Under Construction Durango Boulevard 245 units for rent Completion - June 2010 $274 - $1264 / month 184 market, 49 public, 12 tax credit

24 Pearl Brewery Culinary School Bldg. Apartments Under Construction Broadway Corridor 8 units for rent Completion September s.f s.f. $ $2700 /month

25 Steel House Lofts Planned Apartments South Flores 71 units for rent Average s.f. Market rate rental Construction starts January 2010

26 Cevallos Street Lofts Planned Apartments South Flores 252 rental units Some live/work 600 s.f s.f. $425 - $1750 / month Ready Summer 2011

27 1221 Broadway Pending Apartments River North 268 units for rent 409 s.f s.f. $511 - $1682 / month Mixed use: residential, office, retail, garage Pursuing Financing

28 The Eighteen Hundred Pending Apartments Broadway Corridor Details uncertain

29 Big Tex Pending Apartments Blue Star 275 units for rent Mixed use Delayed pending clean up cost resolution

30 Clay Street Flats Pending Apartments Blue Star Area Was condominiums Details uncertain

31 1200 New Downtown Apartments Supply & Absorption Cevallos Steelhouse Victoria Commons St. Bendict's Vistana

32 Future Projects: River North & Broadway Corridor Continued Pearl developments Other redevelopment opportunities Capitalizes on river enhancements Proposed rail streetcar

33 Downtown Increasingly Attractive Unique Environment and Amenities Avoidance of Suburban Sprawl and Anonymity Efficient, More Sustainable Development Dense Social Network BRAC and Proximity To Fort Sam Houston

34 Households want more compact living places and public spaces that encourage interaction with a greater diversity of people Ellen Durham Jones, Retrofitting Suburbia We re also going to have to inhabit the landscape differently because suburbia is going to fail us. We re going to have to return to walkable towns and cities, smaller and more modest than we are used to. James Howard Kunstler, The Geography of Nowhere, Home From Nowhere The perfect city isn t static. It s evolving and ever changing and it s laws and structure allow that to happen. Neighborhoods change, clubs close and others open, yuppies move in and out-as long as long as there is a mix of some sort, then business districts and neighborhoods stay healthy even if they re not what they were once David Byrne, A Talking Head Dreams Of A Perfect City, The Wall Street Journal

35 Thank You! Debra Maltz Realtor /Broker Kuper Sotheby s International Realty Centro Properties debra@centroproperties.net

36 Featured Speaker: VISITOR & HOSPITALITY INDUSTRY Marco A. Barros President/CEO San Antonio Area Tourism Council

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38 Tourism & Hospitality Economic Impact of $11 billion in More than $286 million in taxes and fees to local government Over $153 million to City 106,311 workers or 1 of every 8 San Antonio employees

39 Hotel Inventory SA (MSA) = 39,648 hotel rooms SA (City) = 35,009 hotel rooms Downtown = 12,899 hotel rooms Source: SACVB

40 Hotel & Motel Tax (HOT) Supports the operations of various city departments including: Convention & Visitors Bureau, Convention, Sports & Entertainment, Cultural Arts, International Affairs, Parks and Recreation/Riverwalk maintenance, etc. (State Law, Chapter 351)

41 Hospitality Industry Economic Impact (Billions)

42 Hospitality Industry Employment

43 Hospitality Industry Annual Payroll (billions)

44 Tourism Council Mission & Goals to promote and support the development of the visitor industry while preserving and enhancing the special character of the city and surrounding area. we provide ADVOCACY for our industry by providing a voice for all segments of the industry

45 The Economic Impact of the Hospitality Industry in 2008

46 Number of Employees by Sector Hospitality Industry 2008

47 Economic Impact of the Industry s Sectors Over Time (millions)

48 Bexar County: 1.75% venue tax (May 2008) new Performing Arts Center (conversion of Municipal Auditorium) San Antonio River improvements: north and south Community arenas (Freeman Coliseum and AT&T center improvements) Dozens of sports fields all over the county, soccer, volleyball, basketball, little league, fencing plus UTSA Sports Complex, St. Mary s Sports Complex and National Swim Center

49 Contributions to City Revenue $153.4 Million in 2008

50 7% Hotel Occupancy Tax Appropriations $53.7 Million in 2008

51 And there s more... Nearly $14 million HOT to Bexar County $98 million in property taxes to school districts and other taxing entities $21 million in VIA and ATD sales taxes IN TOTAL: $286 million to local government in 2008

52 Summing Up... $11 Billion in economic impact every year Over 106,000 workers One of San Antonio s largest and most enduring industries An important source of local tax revenue and new revenues flowing every year Vibrant and enduring

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54 Tourism and Hospitality growth Downtown 3 significant projects to open in Houston Street Hotel Indigo ( 91 rooms ) at Alamo Plaza TownePlace Suites by Marriott (117 rooms) Embassy Suites Riverwalk (281 rooms) Other limited service hotels doing research Lots of interest in San Antonio by developers

55 What s Ahead for 2010! JW Marriott Resort projected opening January 22, 2010 Airport bi-level roads opening completion March 2010 Traders Village Market 410 South Fall 2010 San Antonio International Airport Terminal B November 2010

56 Thank you for the opportunity to visit with Downtown Alliance. SanAntonioTourism.com

57 Featured Speaker: COMMERCIAL REAL ESTATE INDUSTRY Don Thomas Principal, Reata Real Estate Services, L.P.

58 Defining the market San Antonio CBD statistical area CBD

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60 San Antonio CBD - OFFICE 5.3 million square feet (Class A, B & C) Average annual rental rate per square foot: $19.15 Rental rates quoted up approximately 4% over 2008 Office absorption year to date is -38,571 Major Leases GSA approximately 50,000 s.f. in Bank of America Plaza Winstead PC approximately 11,250 square feet in Bank of America Plaza Booz Allen renewal and expanded 15,000 s.f. in One Riverwalk Nix Hospital 15,000 s.f. in the new Walgreens building

61 Downtown San Antonio Office Market 3Q 2009 Source: NAI REOC Partners CLASS CBD 3Q 2009 Inventory 1,990,010 A Direct Vacant 254,432 Vacancy Rate 12.8% Average Rent $21.05 Inventory 2,473,874 B Direct Vacant 453,945 Vacancy Rate 18.3% Average Rent $18.16 Inventory 886,936 C Direct Vacant 320,696 Vacancy Rate 36.2% Average Rent $17.66 Total Inventory 5,350,820 Total Direct Vacant 1,029,073 Total Vacancy Rate 19.2% Total Average Rent $19.15

62 Class A Buildings Weston Centre Building Size Rate Vacancy 490,871 s.f. $ % Bank of America Building Size Rate Vacancy 532,992 s.f. $ % One Riverwalk Building Size Rate Vacancy 261,431 s.f. $ %

63 Class B Buildings Houston Street Building Siz (3 bldgs.) Rate Vacancy 173,140 s.f. $ % Travis Park Plaza Building Size Rate Vacancy 160,982 s.f. $ % One Alamo Center Building Size Rate Vacancy 165,826 s.f. $ %

64 40% 35% 30% 25% 20% 15% 10% 5% 0% CBD OFFICE MARKET VACANCY BY CLASS Source: NAI REOC Partners Q09 Class A Class B Class C All Classes

65 CBD OFFICE MARKET RENTS BY CLASS Source: NAI REOC Partners $24 $22 $20 $18 $16 $14 $ Q09 Class A Class B Class C All Classes

66 Downtown San Antonio Retail Market 3Q 2009 Source: NAI REOC Partners PROPERTY TYPE CBD MARKET 3Q 2009 Inventory 1,060,000 REGIONAL Direct Vacant 170,600 MALLS Vacancy Percent 16.1% Inventory 198,270 NEIGHBORHOOD Direct Vacant 47,526 CENTERS Vacancy Percent 24.0% Average Rent $24.33 Total Inventory 1,258,270 Total Direct Vacant 218,126 Total Vacancy Percent 17.3% Total Average Rent $24.33

67 Overall Occupancy Annual Rent Per Sq. Ft. (NNN) CBD Retail Market Historical Rental Rate vs. Occupancy Source: NAI REOC Partners 100% $30 90% 80% 92.6% $24.26 $25.72 $25.72 $ % $24.33 $28 $26 $24 70% $20.15 $21.84 $22 $20 60% $18 $16 50% Q 09 $14

68 35% CBD Retail Market Vacancy By Type Source: NAI REOC Partners 30% 25% 20% 15% 10% 5% 0% 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 3Q 09 ALL RM PC CC NC SC RC Regional Mall PC Power Center CC Community Center NC Neighborhood Center SC Strip Center

69 $28 CBD Retail Market Rental Rates By Type Source: NAI REOC Partners $26 $24 $22 $20 $18 $16 4Q 03 4Q 04 4Q 05 4Q 06 4Q 07 4Q 08 3Q 09 ALL RM PC CC NC SC RC Regional Mall PC Power Center CC Community Center NC Neighborhood Center SC Strip Center

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72 THE VISTANA I HOP / STERLING BANK

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74 Questions?

75 Thanks again to our Sponsors:

76 Thank you!

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