2015ForecastPresentation

RegionalIndicators

Source:DETR

Unemployment Rates JobGrowthRates(Y‐O‐Y)

Nov ‘13 Nov ‘14 Nov ‘13 Nov ‘14

Nevada 9.0% 6.9% 1.8% 2.3%

LasVegas‐ParadiseMSA 8.6% 7.1% 2.4% 2.5%

Reno‐SparksMSA 8.2% 6.4% 0.9% 1.6%

UnitedStates 7.0% 5.8% 1.7% 2.0%

California 8.7% 7.2% 1.6% 2.2%

RegionalIndicators

Jobs

• NewJobsinNorthernNevada• 4,292NewJobsovernext2to4years(includes700Teslajobs)• 136SiteVisits• 13Headquarters

• SeveralNewAnnouncementsfromEDAWNcoming1Q2014

• LargestNewEmployersInclude:

• Tesla |6,500Jobs|5.8Msquarefeet

• Petco |150Jobs|770,000squarefeet

• Zulily |1,000Jobs|708,000squarefeet

• CenntroMotors|300Jobs|Headquarters

• GhostSystems|150Jobs|HeadquartersSource:EDAWN

RegionalIndicators

Jobs(EDAWN 2014Highlights)

RegionalIndicators

ResaleMarket

Source:NorthernNevadaMLS

1.5MonthsofActiveInventory

13%JumpintheMedianPricein2014

Source:TheWhitneyGroup/CaliforniaEmploymentDevelopment

Employment GainsCaliforniaMSA NovemberY/Y2014Oakland 39,800

SanJose 34,900

SanFrancisco 38,300

SantaRosa 8,300

Vallejo/Fairfield 5,000

Sacramento 27,300

Modesto 4,500

Stockton 5,600

Fresno 8,300

RegionalIndicators

California

Source:TheWhitneyGroup

AverageY/YResalePriceChangeCaliforniaMSA ResaleHomesAverageSalePrice

4Q13 4Q14 Percent Change

SouthBay $1,011,000 $1,118,667 10.6%

EastBay $618,000 $680,667 10.1%

Sacramento $318,000 $335,667 5.6%

RenoMSA $282,367 $302,154**Oct/NovWtAvg

7.0%

PositiveIndicators

California

0.90 

0.77

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

01 02 03 04 05 06 07 08 09 10 11 12 13 14

United States Reno, NV

NAHB/First American Leading Markets Index (LMI)

*Comparescurrentpermit,homeprice&employmentdatawith“normal”years

*

RegionalIndicator

Confidence(LeadingMarketIndex)

PositiveIndicators

BuilderConfidence

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

10

20

30

40

50

60

70

80

90

100

Housing Market Index

Single-Family Starts

Chart: NAHB/Wells Fargo Housing Market Index (HMI) and New Single-Family Starts

Source: NAHB/Wells Fargo Housing Market Index.U.S. Census Bureau.

Hou

sing

Mar

ket I

ndex

New

Single-Family Starts (in thousands of units)

0

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F

NewHomeSales SFPermits

15YearAvg=2172

1550

1850

NewHomes

Reno/SparksSales&Permits

⬆ 27%⬆ 22%

967

1228 1227

1495

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013 2014

Fernley Dayton

4

117

13

87

NewHomes

Fernley&DaytonSFPermits

20132014

2005

<$200,0002% $200,000‐

$250,0006%

$250,000‐$350,00064%

>$350,00028%

<$200,0007%

$200,000‐$250,00011%

$250,000‐$350,00057%

>$350,00025%

<$200,0000%

$200,000‐$250,000

0%

$250,000‐$350,00028%

>$350,00072%

NewHomes

SalesbyPriceRange

AveragePriceIncreaseinTenActiveCommunities

Area 4Q13AvgPrice 4Q14AvgPrice Increase

West Reno $294,990 $309,990 $15,000

SouthReno $289,900 $313,000 $23,100

South Reno $302,490 $314,490 $12,000

Spanish Springs $256,368 $266,868 $10,500

Sparks $254,450 $268,950 $14,500

SouthReno $303,950 $320,450 $16,500

SouthReno $303,450 $319,450 $16,000

SpanishSprings $326,400 $338,950 $12,550

Spanish Springs $294,990 $314,990 $20,000

Spanish Springs $314,990 $349,990 $35,000

AvgPrice/SF$141

Avg Price/SF$149

AvgIncreasePerHome$17,515

Top10Communitiesthathavebeenactivesince4Q13

0

50

100

150

200

250

300

350

400

450

500 38%

7%

16%

5%

0%

35%

NewHomes

2014SalesbyArea

0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F

58

12YearAvg=55

NewHomes

ActiveCommunities

51

4) DRHorton

2) TollBrothers

1)LennarHomes

5) PulteHomes

1) SierraCanyon,PulteHomes

ByBuilder ByCommunity

2)LaCasata,DiLoretoHomes

3)Aurora@Cyan,DRHorton

5)LaTierra,RyderHomes

3)JenuaneCommunitiesRyderHomes

4)GoldenHills,LennarHomes

NewHomes

TheTopFive‐ 2014

0

100

200

300

400

500

600

700

800

900

4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15‐F

103

193225

NewHomes

UnsoldNewHomeInventory

80%UnderConstruction!

201339Deals

4970Lots

2600Acres

$66.4Million

numbersareestimatesonly

ExcludesCustomLots!123 LotsSoldin2014

MedianSalePriceof$145,000

201436Deals

6817Lots

2865Acres

$96.9Million

EXCLUDESMulti‐Family!1188Lots92Acres

$11.9Million

ResidentialLand

Reno/SparksLandDeals

Cyan

Where’stheAction?

SaddleRidge&DoradoHills

Presidio&Regency

Esplanade

2014ResidentialLandSalesSouthReno

BrightonPark

Wintercreek

Where’stheAction? 2014ResidentialLandSalesWestReno

VerdiNoteSale

GoldenHighlands

Where’stheAction? 2014ResidentialLandSalesNorthValley

LaderaRanch

SkyVistaPkwy

Wildcreek

GalleriaStation

LaTierra

Where’stheAction? 2014ResidentialLandSalesSparks

Pinnacles

Kiley40&41

SonomaHighlands

Where’stheAction? 2014ResidentialLandSalesSpanishSprings

Wingfield2

Stoneridge

PioneerMeadows3&4

RiataKiley38

2,040TotalHomesites*1.32Years(2015ForecastedSales).94Years(15‐YearAverageSales)

*asof12/31/14

ByOwnershipByArea

ResidentialLand

2014FinishedLotSupply

NorthValley14%

Southwest/Central2%

Northwest/West16%

SouthReno20%

Sparks/SpanishSprings48%

EastReno0%

Investor11%

Private38%

Public50%

Bank/Lender1%

2091TotalHomesites*1.35Years(2015ForecastedSales).96Years(15‐YearAverageSales)

*asof12/31/14

ResidentialLand

2014FinalMapLotSupplyByOwnershipByArea

NorthValley32%

Southwest/Central2%

Northwest/West11%

SouthReno24%

Sparks/SpanishSprings31%

EastReno0%

Investor37%

Private39%

Public24%

Bank/Lender0%

NorthValley19%

Southwest/Central0%

Northwest/West6%

SouthReno37%

Sparks/SpanishSprings38%

EastReno0%

Investor67%

Private14%

Public19%

Bank/Lender0%

8,346TotalHomesites*5.38Years(2015ForecastedSales)3.84Years(15‐YearAverageSales)

*asof12/31/14

ByOwnershipByArea

ResidentialLand

2014TentativeMapLotSupply

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F

Basedonanaverage5,500SFHomesite

8.4%10.2%

16.5%

44.2%

26.3% ‐16.5%

‐19.7%

‐36.2%

‐22.7%

‐5.9% ‐6.0% 9.5%

39.1%

16.9%

28.8%

$69,000forecastedforyear‐end2015

$59,000atyear‐end2014

ResidentialLand

AverageFinishedLotPrice

2014$250,000($147/sf)

$115,600($68/sf)

$50,000

$25,000

$59,400

23.8%

Withchangeinhouseprice(assume1,700SFhome)

2005$350,000($206/sf)

$127,500($75/sf)

$70,000

$35,000

$117,500

33.6%

BaseHousePrice(usingmedianhomeprice)

TotalHardCost

TotalSoftCosts(20%)

BuilderProfit(10%)

FinishedLotValue

PercentageofHousePrice

2010$169,000($99.50/sf)

$93,500($55/sf)

$33,800

$17,000

$24,700

14.5%

-52%

-79%

48%

140%

ResidentialLand

LandValueBreakdown

NewHomeSupplyanddemand

LandBuys

ActiveBuilders

Home&LandPrices

ConstructionLenders

Topography

LotSupply

BrokerVacations

2013/2014 2015/2016

SupplyDown/DemandUp

BigLiftOfftheBottom

SupplyUp/DemandUpper

SlowerMovetotheTop

StartingtoBookStartingtoLook

“A”LocationsOnly “B”&“C”WillDo

BackinSecondGear ShiftingintoThird

StayintheFlats TheHillsareAlive

WorkonDemand WorkonSupply

RenoStaycationMexicoAllInclusive

Conclusion

30‐SecondOverview

Jan1978

Jan1985

Jan1992

Jan1999

Jan2006

Jan2013

Jan2020

ThankYou!MyGrandfather’sRealEstateCycle