Of the Hill Country (“Property”), a One-Of-A-Kind, 682-Acre Master-Planned Residential Development Project in Dripping Springs, Texas (Austin MSA)

DRIPPING SPRINGS, TEXAS (AUSTIN MSA)

MEMO G RA IN N R D E U F M F O

a s t e e c r la P P la n in n ed ID D P e th ve i lop ty w ment Opportuni

WESTWOOD is inspired by a commitment to open space and conserving the Hill Country’s extraordinary natural character through a lifestyle bound to nature. CONTACT Scott LaMontagne Michael Gonzalez Managing Director Senior Associate 512.368.7140 512.368.7208 [email protected] [email protected] TABLE OF Michael Furrow Associate 512.368.7192 CONTENTS [email protected] Executive Summary 4

FINANCING INQUIRES Location Assessment 13 Acquisition Financing Valuation Section 30 Mark Brandenburg CW Sheehan Managing Director Vice President 214.438.6481 512.593.4883 [email protected] [email protected]

Recapitalization Jonathan Schwartz Aaron Appel Managing Director Managing Director 212.812.3657 212.812.6459 [email protected] [email protected] STWOO E D W E y x r ec a ut m ive Sum INTRODUCTION JLL is pleased to offer the opportunity to acquire Westwood of the Hill Country (“Property”), a one-of-a-kind, 682-acre master-planned residential development project in Dripping Springs, Texas (Austin MSA). This is the first and only project to be approved under the City of Dripping Springs Conservation Development Ordinance, which will keep the character of the hill country intact by encouraging residents to live in harmony with the natural landscaping. This unique opportunity is one of the very few “ready-to-develop” sites on the west side of Austin.

The project is located in the coveted Dripping Spring School District and is less than 3 miles from the high school and middle school and 3 and a half miles from the elementary school. The district serves approximately 5,400 students and is benefitting from the growth along the 290 corridor that is putting development sites in the area in very high demand by builders. STWOO E D W o f

th y e tr H n ill Cou INVESTMENT HIGHLIGHTS

Westwood of the Hill Country is advantageously positioned in the western portion of Dripping Springs, Texas, only 30 minutes west of the booming Capital of Texas, Austin. The strategic location of the project as well as its “PID” advantages and strategic incentives make this property a “must-have” investment that will be in very high demand. The following are project highlights for the master planned community:

Total Master Plan: 682 Acres Estimated Net PID Proceeds: $32,000,000

Total Residential Homes: 912 Net Phase I PID Proceeds: $9,000,000

Total Lots to be Developed: 912 Estimated Net PID Proceeds Per Lot: $35,088

Highly Desirable Dripping Springs Market Statistics • Unemployment Rate of 3.6%, far below the US average of 5.2% • Recent job growth of 2.98%, compared to the US average of 1.59% • Future job growth of 42.36% compared to the US average of 37.98% • Five mile radius from property’s average household income is $95,758, which is highly affluent compared to Texas’ average of $55,653 per household.

Executive Summary

INVESTMENT HIGHLIGHTS

Development Summary 50’ 60’ 70’ Total Phase 1 79 70 53 202 Phase 2 137 96 0 233 Phase 3 196 0 48 244 Phase 4 157 76 0 233 Total 569 242 101 912

Executive Summary DRIPPING SPRINGS HOUSING MARKET

Below are the market statistics for the housing market in the Dripping Springs area, as well as the proposed development summary for the master planned community investment. Westwood of the Hill County is approved for the development of 559 50’ lots, 242 60’ lots, and 101 70’ lots. Looking at the market area’s inventory, there is a dearth of 50’ lots being delivered in Dripping Springs at the moment which is favorable for the 50’ heavy development proposal of Westwood of the Hill Country.

Westwood of the Hill Country Development Summary 50' 60' 70' TOTAL Phase I 79 70 53 202 Phase II 137 96 0 236 Phase III 196 0 48 241 Phase IV 157 76 0 233 Total 569 242 101 912

Dripping Springs Housing Type Summary Lot Size < 50' 50'-59' 60'-69' 70'-79' 80'-89' 90' > Annual Starts 26 9 147 84 33 171

Price Range < $200,000 $200k-$300k $300k-$400k $400k-$500k $500k-$600k $600k > Annual Starts 0 32 131 186 101 23

Dripping Springs Housing Market Overview Average Home Value Appreciation Average Home Value by Year

May-12 May-13 May-14 May-15 MAY-16 MAY-17 $344,000 $361,000 $383,000 $405,000 $437,000 $453,000 -1.71% 4.94% 6.09% 5.74% 7.90% 3.66%

Executive Summary WESTWOOD PUBLIC IMPROVEMENT DISTRICT (“PID”)

Westwood of the Hill Country offers a unique investment advantage benefiting from a Public Improvement District that enables the issuance of bonds for the construction of improvement projects within Westwood of the Hill Country. Debt service on these bonds will be paid through a property tax assessment by the future residents of the development. Some of the financial footnotes of the PID are described below;

• Maximum amount of PID bonds $40,890,000 to be adjusted inflating phases at 2% through build out plus 10%. • Maximum of $0.73 per $100 annual assessment installment as tax rate equivalent • Estimated Net PID Proceeds: $32,000,000 • Net Phase I PID Proceeds: $9,000,000

Proposed Amenities for Westwood

A Private nature area as well as a 17-acre private Over seven miles of neighborhood park public community trails

Private recreation center with multiple hangout spots, including Public overlooks of the a swimming pool facility 21-acre public beautiful Texas Hill and private children’s play community park Country with seating area with pond for areas fishing and other activities 11

Executive Summary STWOO E D W o f

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12 12 EXECUTIVE SUMMARY Executive Summary STWOO E D W t c a e ti m e DRIPPING SPRINGS MARKET

Dripping Springs is located in the beautiful hill country of Texas. The city is considered the wedding capital of Texas because of its gorgeous scenery and views. The city is known for the Dripping Springs distillery, which is home to award winning Dripping Springs Vodka and Gin. This brings in a large amount of visitors, making the tourism market a very prominent part of the city’s economy. Another key employer is Dripping Springs ISD which employs almost 300 residents and has about 5,400 students attending its seven schools. Dripping Springs is also just 35 minutes west from the capital of Texas, Austin, which continues to grow outward, directly contributing to the growth of Dripping Springs.

Area Employment Dripping Springs is home to a very talented and highly educated work force, with over half of the city’s residents over the age of 25 having at least a college level degree. The population has an average annual household income of almost $100,000 within a 5 mile radius of the property. This affluence has facilitated a strong retail growth throughout the city over the past few years. Dripping Springs also has an unemployment rate of 3.6%, far below the United States average of 5.2%. The following are a few major employers in Dripping Springs:

Major Employers in Dripping Springs Company Employees Dripping Springs ISD 294

Patriot Erectors 200 Core Health Center 170

Location Assessment

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The Pizza Cave V DRIPPING AUSTIN SPRINGS (35-Minute Drive Creek Road Cafe from Dripping Springs) Rolling in Thyme & Dough AUSTIN MARKET Austin, the capital of Texas, is the eleventh largest city in the United States and one of the nation’s fastest growing metropolitan areas. According to the Texas Workforce Commission, Austin has added 28,300 jobs in the past 12 months, expanding the workforce by 2.8 percent. The city has a dynamic and diverse economy, with a healthy mix of jobs in the government, professional services, education, healthcare, and high tech sectors. Austin also has a well-established entertainment and convention industry, with world-renowned festivals such as Austin City Limits and South by Southwest, that contribute significantly to the local economy and have driven recent growth in the city’s leisure/ hospitality sector. Additionally, the local economy is bolstered by a community-wide consensus for business development and quality job creation.

Austin is world renowned for its knowledge-based economy, built on outstanding university research. The city has an entrepreneurial culture, a broad array of support services, and a rich pool of intellectual talent & leadership.

Austin is home to many large companies, and five Fortune 500 companies are headquartered in the city: Whole Foods Market, Freescale Semiconductor, Forestar Group, Samsung (U.S.), and Dell. Austin has seen an influx in emerging technology companies either relocating or expanding in the city, including Accenture, Amazon, Dropbox, Google, Sparefoot, Sprinklr, Under Armour, and Umbel.

Location Assessment AUSTIN MARKET

CURRENT TOTAL 12 MONTH JOB MEDIAN MEDIAN MEDIAN POPULATION EMPLOYMENT GROWTH HOUSEHOLD AGE HOME VALUE INCOME

2.05 M 1.0 M 2.8% $67.2 K 34 $284 K

19.8% $50.8 K 3.3% 42.6% 14.5 K 64.9%

POPULATION MEDIAN UNEMPLOYMENT POPULATION 2016 HOUSING HOME VALUE

GROWTH SINCE SALARY RATE WITH BACHELORS STARTS INCREASE SINCE 2006 2010 DEGREE

Location Assessment AUSTIN MARKET

The Urban Land Institute has ranked Austin the number one spot in markets to watch during 2017.

In a compressed cap rate environment with low interest rates, I like markets that can generate attractive cash-on-cash returns. That is very difficult in the gateway “markets, but more possible in markets like Dallas & Austin - ULI ”

Location Assessment MAJOR EMPLOYERS

Dell Dell Incorporated is the largest corporation headquartered in the Austin MSA with more than 14,000 people employed in Austin. The now privately owned multinational computer technology corporation is based in Round Rock, TX. Dell recently opened the Dell Medical School of the University of Texas in the Summer of 2016.

Seton Healthcare Family The Seton Healthcare Family is a faith-based nonprofit health care system founded in 1902 by the Daughters of Charity. Called to be a sign of God’s unconditional love for all, Seton strives to expand access to high-quality, low-cost, person-centered care and services. Seton is a part of Ascension, the largest nonprofit health system in the U.S. and the world’s largest Catholic health system.

IBM The International Business Machines Coporations (IBM) is a multinational technology company with operations in over 170 countries. Originating in 1911, it was renamed to “International Business Machines” in 1924. The company manufactures and markets computer hardware, middleware, and software. Additionally, they offer consulting services. As of 2017, IBM holds the record for most patents generated by a business (as of 2017) for 24 consecutive years. Over 6,000 people are employed by IBM in Austin.

Yodle Today, Yodle helps more than 50,000 local business owners in 250 different industries find and keep customers simply and profitably. The firm works to create scalable marketing strategies that meet each location’s unique needs for larger franchises and multi-location businesses. Forbes named Yodle one of America’s most promising companies in 2015.

Location Assessment 22

Location Assessment DRIPPING SPRINGS INDEPENDENT SCHOOL DISTRICT (DISD)

The Dripping Springs Independent School District is the DSISD IS SERVED BY THE FOLLOWING SCHOOLS: DSISD Accolades and Achievements primary school district in the northwest portion of Hays High School: • Dripping Springs ISD has been selected as a finalist County, in Dripping Springs. With approximately 5,400 • Dripping Springs High School for the H-E-B Excellence in Education District of the students and growing, this highly coveted school district Middle School: Year every year since 2014. in Central Texas is a huge contributing feature for this • Dripping Springs Middle School • Superintendent Bruce Gearing was a finalist for the master planned development. • Sycamore Middle School 2016 Superintendent of the Year award presented by Elementary School the Texas Association • Dripping Springs Elementary School of School Boards. • Rooster Springs Elementary School • Dripping Springs ISD has received the highest rating • Walnut Springs Elementary School on the Texas FIRST (Financial Integrity Rating System • Sycamore Springs Elementary School of Texas) report every year. FIRST measures the quality of school districts’ financial management and reporting. • U.S. News & World Report included DSHS in its 2017 national rankings of top high schools, awarding the designation of “Silver Medal” school. • In 2017, Dripping Springs’ average ACT score of 24.7 topped the state and national averages by 19.9 and 17.7 percent, respectively. • Dripping Springs High School is a fantastic public high school that boasts a 99% graduation rate, with approximately 92% of graduates attending a post-secondary higher education institution after graduation. Students in the Class of 2017 received more than $5.2 million in scholarship offers.

Location Assessment EDUCATION

The University of Texas at Austin The University of Texas is one of the largest employers Dell Medical School recently opened in the in the Austin area, employing over 24,000 faculty & Fall of 2016 and is the first medical school built staff. at a Tier-1 University in 50 years. The Seton UT has more than 51,000 students enrolled and is one of Medical Center at the University of Texas the largest student bodies in the country. is a 211-bed teaching hospital that opened earlier in 2017. Together, the two have formed The University offers students 115 different majors the recently dubbed “Innovation District” in through 13 different colleges. downtown Austin.

The campus sits 24 miles from Westwood of the Hill UT is rated the 26th best school for higher  Country education in the world, making it the 7th best public university in the United States. For every $1 of tax money given to UT, $18 is returned to $ the State economy

St. Edwards University

Founded in 1885, St. Edward’s has over 5,000 students and over 90 academic programs

The University is recognized among the nation’s best Catholic universities and colleges, and as one of “America’s best Colleges”

Nation’s #1 producer of Fulbright Students Among Master’s Institutions

The campus sits 22 miles from Westwood of the Hill Country

Location Assessment The Dell Medical School & the Seton Medical Center at the Univeristy of Texas are expected to have an economic impact of over $2 billion annually and create more than 15,000 new permanent jobs for Central Texas.

Other Institutions In The Region Concorida University

Houston Tillotson University

Texas State University

Texas A&M Health Science Center 25

Location Assessment ENTERTAINMENT Austin’s residents are exposed to the highest level of entertainment in the country. Austin is known as the “Live Music Capital of the World” and home to diverse entertainment. Home to the University of Texas, Austin City Limits Music Festival, South by Southwest, and Formula 1 United States Grand Prix, Austin offers residents an ideal balance of business and pleasure.

Austin City Limits Music Festival (ACL) ACL is going on its 15th year of selling out and has expanded to two consecutive weeks • Generates over $200 million per year for the city • 8 stages and more than 130 bands • Attracts 450,000 people annually • Westwood of the Hill Country is just over 24 miles from Zilker Park, where the ACL festival is held

South by Southwest (SXSW) Now in its 30th year, SXSW is one of the world’s most recognized Film, Music and Interactive festivals and is the premier global stage for musicians and cultural leaders to showcase their latest works • Nine days of conferences, trade shows, and festivals featuring industry leaders and top performers • Over 300,000 visitors annually • At night, SXSW Music brings downtown alive with over 100 stages and more than 2,200 artists from around the world

The Circuit of the Americas First racing facility in the United States purposely built for Formula 1 racing and is designed to host a variety of sports and entertainment events and has put Austin on the International map gaining exposure to the world’s top companies • Home to the Formula 1 United States Grand Prix • Attracts over 260,000 people from across the world • Main grandstand features permanent seating for 9,000 • Austin360 Amphitheater has the capacity for 14,000 guests

Sixth Street Registered as a National Historic Place, Sixth Street is lined with bars, clubs, restaurants, and music venues. Popular events such as SXSW and the Pecan Street Festival are hosted here every year. On the weekends, the streets are blocked off for pedestrian traffic creating an electric atmosphere. 26

Location Assessment

Liberty Hill 29 183 29 95 BURNET Georgetown WILLIAMSON Thrall COUNTY COUNTY 79 Leander 35 130 Taylor Municipal Airport National Wildlife Refuge FWS 79 183A Round Crystal Falls 183 Hutto Mun. GC Rock Cedar Park Brushy Creek 45 45 Jonestown Pflugerville 95 Pace Wells Lago Volente Jollyville Branch Bend Vista Park 183 1 Hudson Bend Lake 130 Briarcliff Travis Point The Venture Domain TRAVIS 35 Elgin Lakeway 71 COUNTY 290 Colorado Emma Long River Manor Park 1 888 Austin 40 MINUTE West Walter E. Long Lost Lake University DRIVE TO Bee Creek Hills of Texas Municipal Park AUSTIN Cave Barton Barton Creek 95 Creek Wilderness Park WO 71 Mo-Pac Expy ST O Hornsby Webberville BASTROP E D Bend COUNTY 290 W Austin Bergstrom Sunset 71 Valley o Int’l Airport f Circle C Ranch Garfield Colorado t y h 290 r Metro Park River e t Bear 45 Dripping n Creek Springs H u McKinney Falls 183 HAYSill C COUNTYo Shady State Park 71 Hollow 35 130

Manchaca Driftwood Wyldwood Bastrop 28

Location Assessment 0 1 2 3 4 5 Miles WESTWOOD OF THE HILL COUNTRY DEMOGRAPHICS

Westwood of the Hill Country Demographic Analysis for Primary Trade Area 1 Mile Radius 3 Mile Radii 5 Mile Radii Description Totals Totals Totals Population 2022 Projection 47 2,562 8,102 2017 Estimate 42 2,289 7,221 2010 Census 34 1,891 5,930 2000 Census 21 1,368 4,174 2017 Est. Median Age 46.40 44.60 43.90 2017 Est. Average Age 43.90 41.80 41.20 Households 2022 Projection 17 967 3,020 Other Master-Planned 2017 Estimate 15 859 2,678 Developments 2010 Census 13 703 2,179 in Dripping Springs 2000 Census 7 480 1,455 2017 Est. Average Household Size 2.60 2.63 2.68 • Caliterra 2017 Est. HHs by HH Income • Arrowhead Ranch Income Less than $15,000 7.0% 7.7% 7.3% • Headwaters Income $15,000 - $24,999 4.9% 7.5% 7.9% Income $25,000 - $34,999 5.8% 8.7% 8.7% Income $35,000 - $49,999 11.4% 9.8% 9.0% Income $50,000 - $74,999 15.8% 14.3% 14.3% Income $75,000 - $99,999 18.8% 16.4% 15.9% Income $100,000 - $124,999 11.3% 13.8% 13.5% Income $125,000 - $149,999 5.3% 7.0% 7.5% Income $150,000 - $199,999 11.6% 8.0% 8.1% Income $200,000 - $249,999 5.0% 3.2% 3.2% Income $250,000 - $499,999 2.8% 3.0% 3.7% Income $500,000 and more 0.3% 0.5% 0.8% 2017 Est. Average Household Income $97,544 $92,203 $95,758 2017 Est. Median Household Income $81,789 $78,061 $79,220 2017 Est. Tenure of Occupied Housing Units Owner Occupied 74.48% 78.90% 81.06% Renter Occupied 25.52% 21.10% 18.94% 2017 Est. Median All Owner-Occupied Housing Value $302,278 $324,687 $347,985 Source: 2017 Claritas, LLC.

Location Assessment STWOO E D W

auati COST OF COMPLETION ESTIMATE Expenses Master Hard Costs Site Prep and Grading ($1,300,000) Street Improvements ($4,200,000) Sanitary Sewer ($10,000,000) Water Improvements ($3,400,000) Storm Drain ($2,600,000) Amenities & Special Construction ($5,000,000) Utilities ($900,000) Total Master Hard Costs ($27,400,000)

Soft Costs Fees, Assessments & Bonds - Map ($4,100,000) Consultants & Engineering ($3,400,000) Total Soft Costs ($7,500,000)

Intract Costs Intract Costs ($15,700,000) Total Master Hard Costs ($15,700,000)

Total Developer Costs ($50,600,000)

Valuation DISCLAIMER WestWood / PrImary mark

This Brochure is provideddripping for the springs, sole tpurposeX ofs cenicallowing Land Holding,a potential LLC investor14 to j uneevaluate 2016 whether there is interest in proceeding with further discussions regarding a possible purchase of or investment in Westwood of thePa GHille 6 Country.

The potential investor is urged to perform its own examination and inspection of the property and information relating to same, and shall rely solely on such examination and investigation and not on this Brochure or any materials, statements or information contained herein or otherwise provided.

Neither Jones Lang LaSalle Americas, Inc. nor the Owner, nor any of their respective partners, directors, officers, employees, shareholders, manager and agents (collectively, “Agents”), make any representations or warranties, whether express or implied, by operation of law or otherwise, with respect to this Brochure or the property or any materials, statements (including financial statements and projections) or information contained herein or relating thereto, or as to the accuracy or completeness of such materials, statements or information, or as to the condition, quality or fitness of the property, or assumes any responsibility with respect thereto. Such materials, statements and information have in many circumstances been obtained from outside sources, and have not been tested or verified. Projections, in particular, are based on various assumptions and subjective determinations as to which no guaranty or assurance can be given.

Without limiting the foregoing, in the event this Brochure contains information relating to asbestos or any other hazardous, toxic or dangerous chemical, item, waste or substance (“Hazardous Materials”) in relation to the property, such information shall in no way be construed as creating any warranties or representations, expressed or implied, by operation of law or otherwise, by Agents or the Owner, as to the existence or non-existence or nature of Hazardous Materials in, under, on or around the property.

This Brochure is provided subject to errors, omissions, change of price or terms and other changes to the materials, statements and information contained herein or relating to the property, and is subject to withdrawal, all without notice. The contents hereof are confidential and are not to be reproduced or distributed to any person or entity without the prior written consent of Agents or used for any purpose other than initial evaluation as indicated above. CAPITAL MARKETS CONTACTS For more information, contact: Debt & Equity contact: Scott Lamontagne Mark Brandenburg Managing Director Managing Director [email protected] [email protected] 512 368 7140 214 438 6481

Michael Gonzalez CW Sheehan Senior Associate Vice President [email protected] [email protected] 512 368 7208 214 438 6591

Michael Furrow Jonathan Schwartz Associate Managing Director [email protected] [email protected] 512 368 7219 212 812 3657

Aaron Appel Managing Director [email protected] 212 812 6459