State of the Economy How is Doing?

Dan BellowPresident - HoustonSeptember 24, 2009

Houston’s Tomorrow

Houston

The Power of the 10-County Houston Metro Area

• GAP projected to grow 35% by 2013 to $592 B

• Population projected to increase nearly 11% by 2013

Source: Greater Houston Partnership, The Perryman Group

2009 Estimate $450 B 5.88M

Projected % Increase 2009-2013

32.0% 8.5%

2013 Projection $592 B 6.38 M

GAP Population

Houston: A Growing City

Population Growth

Percent change, July, 2007 – July, 2008 Top U.S. Cities

Houston

Los Angeles

Chicago

New York City

Source: U.S. Census Bureau

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6%

Houston’s Unemployment: Well Below National Rate

EmploymentGrowth

Rate

Aug '09 Aug' 08 July '08 - July '09

-3.1%

U.S. 9.7% 6.2% -4.2%

Unemployment

Houston 8.4% 5.2%

Houston: Stable in a Down Economy

Houston

New York City

Chicago

Los Angeles

U.S.

Employment Growth Rate

(Percent Change in MSA Nonfarm Payroll Employment)4 Most Populous U.S. Metro Areas

July ’08 – July ‘09

Source: Greater Houston Partnership

-5.0% -4.0% -3.0% -2.0% -1.0% 0.0%

Houston: An Affordable Place to Live

Cost of Living

(Percent below/above nationwide average as of 2Q’09)Index: average of 320 urban areas = 100%

Source: ACCRA Cost of Living Index

6.6%

53.6%

-7.4%

-10.6%

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Houston

Dallas

New York City

Chicago

Port of Houston

#1 - imports (84.5 M in ’08)

#2 - exports (51.8 M in ’08)

#16 - int’l tonnage (2007)

NASA / JSC

Global nerve center

17,000 total employees

3,400 federal workers

Texas Medical Ctr

World’s largest

73,600 employees

$7.1 B in future growthInterstate HighwayHighwayAirports (Area)

MAP KEY:

9th largest in U.S. by RBA

140,000 people inflow daily

Office market 86% occupied

The Galleria

#1 in Texas; #4 in U.S.

24 million annual visitors

Office market 87% occupied

Energy Industry

Heartbeat of industry

4th largest submarket

Office market 91% occupied

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The Power Centers of Houston

CBD

Houston: A Stable Real Estate Market

½ Billion SF Market

Occupancy = 94%

Port of Houston

2008 IND Employment

300 Million SF Market

Occupancy = 91%

Galleria Mall

Retail sales up 11.7%

1.7 Million households

Occupancy = 86% (multi-family)

Foreclosures stable

25% off housing costs

150 Million SF Market (Multi-Tenant)

Occupancy = 84%

Energy (48% econ. Base)

29 Fortune 500 HQ’s (#3)

Houston’s Home Prices Outperforming Major Metros

As of July, 2009

Houston Headlines“Best City to Get Ahead”Forbes.com - June 19, 2009

“Top Metro in the Nation (For Corporate Expansions & Relocations)”Site Selection Magazine - March 2009

“Best City to Live, Work and Play”Kiplinger's Personal Finance - July 2008

“Top U.S. Manufacturing Cities”Manufacturers' News Inc. (as reported in the Houston Business Journal) - May 19, 2009

“Best Cities for Jobs”Forbes.com - April 14, 2009 and Fortune Magazine - April 2009

“Fastest Growing Cities”US Census Bureau - July 2009

Houston is listed as one of the Top 10 "World Capital of the Future”Forbes Magazine - September 2009