Last Second Save LAS VEGAS RETAIL Q Research & Forecast Report -0.7% Economic Indicators. Market Indicators. Summary Statistics

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1 Research & Forecast Report LAS VEGAS RETAIL Q Last Second Save > > Net absorption was very strong in the fourth quarter, bringing year end net absorption to almost 500,000 square feet > > Vacancy decreased to 8.1 percent at year s end Economic Indicators RETAIL Employment RETAIL Taxable Sales RETAIL /Job > > Asking rental rates showed a modest increase to $1.35 per square foot on a triple-net basis % Southern Nevada s retail market was heading for a lackluster year in 2017 until the fourth quarter. With a last second save, the market produced 497,892 square feet of net absorption, dropping retail vacancy to 8.1 percent. Asking rental rates managed a tiny bump, yearover-year, to $1.35 per square foot (psf) on a triple-net (NNN) basis. According to the Nevada Department of Employment, Training and Rehabilitation, Southern Nevada s retail job market suffered in October 2017, losing approximately 1,000 jobs over the past twelve months. After gaining retail jobs from 2012 to 2015, the Valley has now lost retail jobs for the past two years. Unemployment in the Las Vegas- Paradise MSA stood at 5.1 percent in October 2017, down from 5.5 Historical Vacancy Rates and Asking Lease Rates Market Indicators Relative to prior period Q Q1 2018* VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected -0.7% Summary Statistics Q Las Vegas Market Q4-16 Q3-17 Q4-17 Vacancy Rate 8.3% 8.3% 8.1% Asking Rent (P, NNN) $1.35 $1.34 $1.35 Net Absorption () 234,591 68, ,223 New Completions () 65, , ,550 Overall Asking Rents Per Square Foot Power Center $1.58 $1.52 $1.55 Community Center $1.26 $1.31 $1.33 Southern Nevada is struggling with headwinds caused by e-commerce and at the same time is dealing with a retail migration from east to west. Neighborhood Center $1.50 $1.42 $1.41 Strip Center $1.22 $1.23 $1.25

2 percent in October From October 2016 to October 2017, total employment in Southern Nevada increased by 41,600 jobs, a 4.4 percent increase. Historical Net Absorption vs. Completions The Nevada Department of Taxation reports that Clark County s taxable retail sales for the past twelve months (October 2016 to September 2017, the most recent month of data available) totaled $29.7 billion, up from $28.7 billion in the previous twelve months. Over that same timeframe, taxable sales were $4.7 billion in the automotive sector, $10.7 billion in food service and $13.9 billion in other retail (excluding gas stations). The highest year-over-year growth in taxable retail sales in June- September 2017 were in miscellaneous retail (28.1 percent), home and garden stores (6.8 percent growth) and food and beverage stores (5.6 percent growth). Year-over-year taxable sales decreased in sporting goods and hobby stores (negative 6.6 percent), electronics and appliance stores (negative 5.9 percent growth) and clothing stores (negative 1.3 percent growth). Non-store retailers posted negative 4.7 percent year-over-year growth, bucking the long-term trend of strong growth in that sector. The last time non-store retailers experienced negative taxable sales growth was January, Year-over-year taxable sales growth for non-store retailers since January, 2015 then has averaged 17.7 percent. Occupancy vs. Retail Employment Two neighborhood centers were completed in the Valley in the fourth quarter of 2017, DCs Plaza in the Northwest submarket and the Blue Diamond Walmart center in the Southwest submarket. This brought total retail completions for 2017 to 414,359 square feet, almost double what was completed in The market currently has 209,237 square feet of retail product under construction, and approximately 209,000 square feet scheduled for completion in A total of 2.1 million square feet of retail is planned to begin construction over the next twelve months. Net absorption was 497,892 square feet in 2017, approximately half the net absorption in Net absorption this year was highest in unanchored strip centers (163,517 square feet) and lowest in power centers (36,366 square feet); a sign of the weakness experienced by large anchor retailers nationally. 2 Las Vegas Research & Forecast Report Q Retail Colliers International

3 Net absorption was positive in five of the Valley s eight submarkets in 2017, including Southwest (393,165 square feet), West Central (115,417 square feet) and Northwest (77,395 square feet). Net absorption was negative in Downtown (negative 40,406 square feet), Northeast (negative 19,561 square feet) and University East (negative 99,162 square feet). Aside from Henderson, demand for retail space is generally weak on the east side of town as the Valley s population center moves west. Gross absorption of retail product totaled 2.6 million square feet in 2017, lower than 2016 s gross absorption of 3.9 million square feet. In general, there was less absorption in the retail market, both net and gross, in 2017 than in Coupled with negative growth in retail employment over the past twelve months, we see a market in flux, most likely driven by technological change. Weakness in the anchor retailer segment of the market is stunting overall growth in retail occupancy. Eight anchor spaces totaling 336,725 square feet were vacated in Compare this to 2016, when a total of 128,396 square feet of anchor space was brought to market and you can see the scope of the challenge faced by Southern Nevada and many other communities. Adding to these woes is the recent declaration of bankruptcy by Toys R Us and Goodwill of Southern Nevada, and the continued closure of K-Mart and Sears locations. Fortunately, a few new anchors are counterbalancing these closures, including Burlington, La Bonita Supermarket, Ross Dress for Less and the PGA Tour Superstore. Retail vacancy in Southern Nevada was 8.1 percent at the end of 2017, lower than 2016 s 8.3 percent vacancy. Retail vacancy has bounced between 8.1 and 8.4 percent over the past year, showing a general downward trend. The last significant decrease in retail vacancy occurred in 2016, when vacancy decreased from 9.4 to 8.6 percent. Among submarkets, the Valley s highest vacancy this quarter was 13.0 percent in University East, while the lowest vacancy rate was 4.4 percent in the Southwest submarket, a sign of the demographic migration of the Valley s middle class from the east side of the Valley, Retail Development Schedule Project Type Submarket Size () Pre-Leasing Q ,000 8% St Rose Coronado Center Strip Retail Henderson 18,000 8% Q ,000 0% Shoppes on the Parkway Henderson Strip Retail 58,000 0% Q ,000 54% Mountains Edge Marketplace Community Center Southwest 133,000 54% 2018/2019 1,842,000 40% 215 Curve Community Center Southwest 207,000 76% Cadence Village Center Neighborhood Center Henderson 153,000 85% Centennial Hills Center Strip Retail Northwest 31,000 0% Craig & Camino Al Norte Strip Retail North Las Vegas 123,000 0% Kaktus Life Strip Retail Southwest 29,000 0% Maryland & Silverado Sprouts Neighborhood Center University East 51,000 72% Quail Bonita Strip Retail Henderson 42,000 21% Rainbow & Arby Sprouts Neighborhood Center Southwest 65,000 53% Rainbow Blue Diamond Strip Retail Southwest 45,000 0% Sahara Crossing Strip Retail Downtown 41,000 0% St Rose Square Henderson Neighborhood Center 466,000 45% Shanghai Plaza Strip Retail West Central 80,000 0% Silverado Promenade Neighborhood Center University East 130, % The Bend Community Center Southwest 200,000 0% The Gateway Henderson Strip Retail 35,000 57% Union Village Henderson Strip Retail 125,000 0% University Gateway Strip Retail University East 19,000 80% 3 Las Vegas Research & Forecast Report Q Retail Colliers International

4 Single-Tenant Retail No. Sales Square Footage Sold 719, , , , ,000 Sales Volume $139.8 MM $187.5 MM $306.2 MM $176.6 MM $150.1 MM Average Price/ $ $ $ $ $ Average Sale Size () 15,300 10,500 14,900 8,400 7,900 Cap Rate 7.2% 7.2% 7.0% 6.3% Shopping Center Retail No. Sales Square Footage Sold 3,192,000 4,025,000 3,195,000 2,528,000 4,590,000 Sales Volume $359.2 MM $504.5 MM $588.1 MM $419.7 MM $696.0 MM Average Price/ $ $ $ $ $ Average Sale Size () 66,000 67,000 55,000 62,000 98,000 Cap Rate 8.9% 7.7% 6.7% 8.7% where they settled during the 1970 s and 1980 s, to the west side of the Valley and Henderson, which have predominated since the 1990 s. Vacancy decreased in 2017 in North Las Vegas, Southwest and West Central. The average asking rental rate for retail space in Southern Nevada was $1.35 psf NNN at the end of 2017, the same as at the end of Over the course of 2017, the average asking rent bounced between $1.34 psf and $1.36 psf, with no clear trend. Three submarkets saw asking rates increase in 2017, Downtown ($0.08 psf), North Las Vegas ($0.16 psf) and Northwest ($0.09 psf). Asking rates decreased in West Central ($0.05 psf), Henderson ($0.04 psf), Northeast ($0.04 psf), University East ($0.03 psf) and Southwest ($0.03 psf). Asking rents decreased in power centers ($0.03 psf) and neighborhood centers ($0.09 psf) and increased in community centers ($0.05) and strip centers ($0.03 psf). Single-tenant retail investment sales volume so far in 2017 was $150.1 million in 52 sales totaling 409,000 square feet. This rendered an average price per square foot of $ was a weaker year for single-tenant investment sales than the previous five years. Cap rates have seen significant compression over the past five years, and the average price per square foot decreased for the second straight quarter. Investors are picking up smaller buildings with national credit tenants for lower cap rates than in past years. Shopping center investment sales volume in 2017 was $696 million in 47 sales totaling 4.6 million square feet. This rendered an average price per square foot of $151.63, lower than in the two previous years. The average size of a shopping center sold in 2017 was 98,000 square feet, the highest it has been in five years. The average cap in 2017 was 8.7 percent, a significant increase from with negative growth in retail employment over the past twelve months, we see a market in flux, most likely driven by technological change. 4 Las Vegas Research & Forecast Report Q Retail Colliers International

5 Two trends are impacting Southern Nevada s retail market. The first is a national trend, namely the continued impact of technology on how retail services are delivered to customers. This transition appears, at the moment, to be impacting large anchor stores the most negatively. The second trend is demographic. Beginning in the 1990 s, population in Southern Nevada started shifting away from the central and eastern portions of the Valley and towards Henderson in the southeast, and the west side of town. By the 2000 s, the shift of the middle class from the Valley s east side began to affect the older shopping centers on the east side, and in the 2010 s the impact is more significant. This means that Southern Nevada is struggling with headwinds caused by e-commerce and at the same time is dealing with a retail migration from east to west. If the national economy remains in positive territory in 2018, we think Southern Nevada will reap the benefits and experience another small decrease in vacancy by year s end. The Downtown, University East and Northeast submarkets will probably continue to struggle, while the Northwest, Southwest and Henderson submarkets will become marginally stronger. Households (2017) Avg. HH Income (2017) Occupied Retail Space (2016 Avg.) Occupied Retail Space (2017 Avg.) Downtown 38,000 $41,000 2,010,000 2,031,000 Henderson 112,800 $86,000 9,537,000 9,579,000 North Las Vegas 75,200 $67,000 5,625,000 5,782,000 Northeast 82,300 $55,000 3,122,000 3,102,000 Northwest 181,600 $85,000 12,741,000 12,961,000 Southwest 99,000 $81,000 7,587,000 7,741,000 University East 108,100 $61,000 7,889,000 7,996,000 West Central 56,300 $53,000 6,303,000 6,191,000 Source of Demographic Data: Claritas 5 Las Vegas Research & Forecast Report Q Retail Colliers International

6 Significant Retail Sale Activity 215 NORTH LAS VEGAS Green Valley Crossing 99,300 - $45,575,000 $458.96/ NORTHWEST 95 November 2017 Multi-Tenant/Target 15 Green Valley Crossing 45,000 - $16,575,000 WEST CENTRAL DOWN TOWN NORTHEAST LAS VEGAS $368.33/ September 2017 Multi-Tenant/Bouncy World Green Valley Town Center II 117,902 - $13,010, $110.35/ September 2017 UNIVERSITY AIRPORT Multi-Tenant/Galaxy Theatre Gateway Plaza ,278 - $9,750,000 $176.38/ SOUTHWEST HENDERSON September 2017 Multi-Tenant/Albertsons RESORT CORRIDOR Renaissance Center East 145,584 - $12,400,000 $85.17/ September 2017 Multi-Tenant/Savers Lease Activity Property Name Tenant Lease Date Lease Term Size Lease Rate Type 675 Mall Ring Circle Taquiera El Buen Pastor Nov months 2,905 $3.35 NNN Freestanding Pebble Marketplace Midori Oct months 2,514 $2.47 NNN Neighborhood Center Sunset Ridge Center Cobra Kai Jiu Jitsu Oct months 2,400 $1.47 NNN Strip Center DCs Plaza Firehouse Subs Nov months 1,650 $3.15 NNN Neighborhood Center Horizon Town Center Future Nails Oct months 1,393 $1.24 NNN Neighborhood Center 6 Las Vegas Research & Forecast Report Q Retail Colliers International

7 Market Comparisons - Las Vegas Retail Market TYPE TOTAL INVENTORY DIRECT VACANT DIRECT VACANCY RATE SUBLEASE VACANT TOTAL VACANT VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETIONS CURRENT QTR COMPLETIONS YTD UNDER CONSTRUCTION PLANNED CONSTRUCTION WEIGHTED AVG ASKING RENTAL RATE DOWNTOWN PC - - n/a - - n/a n/a $- CC 731,186 66, % - 66, % 11.5% 17,996 11, $1.29 NC 588, , % - 106, % 18.6% 3,010 (40,511) $0.94 SC 989,530 87, % - 87, % 9.9% 8,218 (11,756) - 19,800-40,500 $1.41 Total 2,308, , % - 260, % 12.6% 29,224 (40,406) - 19,800-40,500 $1.28 HENDERSON PC 2,896,215 77, % - 77, % 2.3% (10,295) 21, $1.89 CC 2,724, , % - 147, % 6.0% 15,547 39,874-33, $1.47 NC 2,930, , % 118, , % 15.2% (45,513) (24,115) ,422 $1.31 SC 1,929, , % 1, , % 16.6% 27,163 (7,257) - 21,000 76, ,860 $1.21 Total 10,480, , % 118,847 1,009, % 9.5% (13,098) 30,167-54,789 76, ,282 $1.35 NORTH LAS VEGAS PC 774,065 31, % - 31, % 4.1% $2.25 CC 2,150, , % - 126, % 6.1% 4,160 31, $1.57 NC 2,025, , % 2, , % 6.5% (42,811) (17,417) $1.64 SC 1,289, , % - 147, % 11.1% (4,800) 26, ,718 $1.43 Total 6,239, , % 2, , % 7.0% (43,444) 40, ,718 $1.60 NORTHEAST PC - - n/a - - n/a n/a $- CC 1,295,615 82, % - 82, % 7.2% (7,196) (14,100) $1.59 NC 1,307,891 84, % 43, , % 11.6% 5,309 (2,182) $1.21 SC 769, , % - 111, % 14.8% 2,266 (3,279) $0.96 Total 3,372, , % 43, , % 10.7% 379 (19,561) $1.22 NORTHWEST PC 3,171, ,348 n/a - 298, % 8.6% (24,776) (62,320) $1.57 CC 4,800, , % 75, , % 4.5% 38,681 27, $1.98 NC 3,492, , % 35, , % 8.8% 32,538 55,999 72,550 72, $1.59 SC 2,472, , % - 217, % 10.4% 40,417 55,796-26,220-31,000 $1.36 Total 13,935, , % 111,067 1,034, % 7.6% 86,860 77,395 72,550 98,770-31,000 $1.57 SOUTHWEST PC 944,314 17, % - 17, % 0.8% (10,500) 28, $1.93 CC 2,555, , % - 108, % 4.2% (1,871) 69,919-72, , ,250 $1.71 NC 2,472, , % 5, , % 6.3% 202, , , , ,200 $1.96 SC 2,362, , % - 138, % 6.0% 3,153 76, ,583 $1.58 Total 8,334, , % 5, , % 4.9% 193, , , , , ,033 $1.74 UNIVERSITY EAST PC 1,210, , % - 131, % 10.3% (6,156) (8,504) $1.16 CC 2,946, , % 28, , % 14.1% 28,162 (64,069) $0.96 NC 2,018, , % 163, , % 16.0% (19,832) (30,551) ,588 $1.34 SC 2,990, , % 1, , % 17.5% (4,288) 3, ,124 $1.09 Total 9,166,263 1,193, % 192,115 1,385, % 15.1% (2,114) (99,162) ,712 $1.10 WEST CENTRAL PC 1,138,224 57, % - 57, % 7.9% 32,934 57, $1.35 CC 1,673, , % - 211, % 14.0% 22,668 36, $1.13 NC 1,777, , % 50, , % 9.7% 9,451 (920) $1.07 SC 2,167, , % - 132, % 6.2% 3,324 23, ,000 $1.22 Total 6,756, , % 50, , % 9.4% 68, , ,000 $1.16 MARKET TOTAL PC 10,134, , % - 613, % 5.9% (18,786) 36, $1.55 CC 18,878,234 1,204, % 104,591 1,308, % 7.7% 118, , , , ,250 $1.33 NC 16,611,792 1,434, % 419,859 1,854, % 10.9% 144, , , ,550-1,016,210 $1.41 SC 14,969,701 1,652, % 3,500 1,655, % 11.6% 75, ,517-67,020 76, ,785 $1.25 Total 60,593,878 4,905, % 527,950 5,433, % 9.2% 319, , , , ,237 2,143,245 $1.35 QUARTERLY COMPARISON AND TOTALS Q ,593,878 4,905, % 527,950 5,433, % 9.2% 319, , , , ,237 2,143,245 $1.35 Q ,352,328 4,982, % 568,785 5,551, % 9.2% 68, , , , ,787 1,850,620 $1.34 Q ,233,108 4,932, % 593,307 5,525, % 9.4% 128, , , ,007 1,770,620 $1.36 Q ,233,108 5,060, % 580,286 5,640, % 8.9% (17,825) (17,825) 53,589 53, ,550 1,183,806 $1.36 Q ,179,519 4,988, % 354,423 5,343, % 9.6% 234, ,447 65, , ,506 1,385,706 $1.35 Q ,113,668 5,157, % 639,448 5,797, % 10.2% 408, ,856 71, ,774-1,564,516 $1.32 Q ,042,599 5,495, % 618,699 6,113, % 10.2% (26,507) 257,090 23, ,705 71,069 1,492,349 $1.30 PC = Power Center CC = Community Center NC = Neighborhood Center SC = Strip Center 7 Las Vegas Research & Forecast Report Q Retail Colliers International

8 396 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 79 EMEA: 111 $2.6 billion in annual revenue* COLLIERS INTERNATIONAL LAS VEGAS 3960 Howard Hughes Parkway Suite 150 Las Vegas, Nevada USA MARKET CONTACT: Mike Mixer Executive Managing Director Las Vegas mike.mixer@colliers.com John Stater Research & GIS Manager Las Vegas john.stater@colliers.com 2.0 billion square feet under management 15,000 professionals and staff *All statistics are for 2016 and include affiliates. About Colliers International Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry leading global real estate services company with 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that helps clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 12 consecutive years, more than any other real estate services firm. Colliers also has been ranked the top property manager in the world by Commercial Property Executive for two years in a row. For the latest news from Colliers, visit Colliers.com or follow us on Twitter (@Colliers) and LinkedIn. Copyright 2018 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.