LAKELAND–WINTER HAVEN, FLORIDA | MSA ECONOMIC AND DEMOGRAPHIC OVERVIEW APRIL 2019

a Berkshire Hathaway and Jefferies Financial Group company LAKELAND–WINTER HAVEN, FLORIDA | MSA

Best Place to Live / Retire

The city of Lakeland ranked among the “Best Places to Live” and the “Best Places to Retire” in the United States - U.S. News & World Report

Florida’s Distribution Hub

Polk County is Florida’s hub for distribution with millions of square feet of big-box industrial development along the Interstate 4 corridor - Central Florida Development Council

INTRODUCTION Situated along Central Florida’s I-4 corridor, Polk County comprises the Lakeland-Winter Haven, FL, Metropolitan Statistical Area (MSA). The metro’s location between Tampa Bay and Orlando offers easy access Fastest-Growing Metro to world-famous cities and attractions. With a population of more than 690,300 residents, the Lakeland MSA is the ninth-most-populated The Lakeland-Winter Haven metro area ranked No. 14 among “America’s county in the state. The county offers numerous institutions of higher Fastest-Growing Metros in the Nation for 2018” education including Florida Polytechnic University, a top engineering - Forbes school.

Greater Lakeland’s diverse economy, business-friendly climate, and central location continue to attract businesses, commercial developments, and new residents to the region. In addition, the Lakeland MSA’s location offers a strong transportation network with excellent sites for distribution facilities to Orlando, Tampa Bay, and Miami, and Best Place to Move to has become the epicenter of e-commerce distribution in the state. The Lakeland-Winter Haven metro area ranked No. 9 among the “25 Companies with distribution centers in the area include Publix Super Best Places People are Moving to in 2018” Markets, CenterState Bank, Havertys, Rooms To Go, Walmart, Florida - U.S. News & World Report Natural, Amazon, IKEA, and United Parcel Service.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

DEMOGRAPHICS

96.8 58% OF WORKERS ARE IN 14.3K COST OF LIVING NET MIGRATION IN THE MSA WHITE-COLLAR IN THE METRO POSITIONS METROWIDE (U.S. INDEX = 100) (2018)

752.9k 144.4k 285.6k $200.0k $49.6k

Lakeland–Winter Haven The number of In February 2019, the Lakeland–Winter Haven Over 21% of the metro’s MSA's population households in the Lakeland-Winter Haven MSA's median household residents are in the is forecast to reach metro area is forecast MSA's median home income is projected to key renter age group 752,856 residents, up to reach 285,563, up price was $200,000, reach $49,649 by 2024, between 18 and 35 9.1% over the next five 9.2% over the next five up 6.1% from one year up 8.4% from 2019 years compared to 4.0% years compared to 4.0% prior nationally nationally

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

METRO INDUSTRY BREAKDOWN

AVERAGE ANNUAL WAGE BY OCCUPATION

Historically known for its citrus and phosphate industries, the Lakeland-Winter Haven metro area Health Care Practitioners $ has diversified, with its largest employers by industry in education and health care, government, & Technicians 71.5k tourism, and trade, transportation, and utilities. Professional services and manufacturing are the metro’s fastest-growing industries. Greater Lakeland added approximately 7,600 jobs during the Business & $ 12-month period ending in February 2019, 2,400 of which were in the Trade, Transportation, and Financial Operators 61.1k Utilities sector.

Construction Education $ Industry Breakdown 46.0k 6%

Installation, Maintenance, Trade, Education & Health $ Transportation, & Services & Repair k Utilities 41.8 15% 26% Construction & $ Extraction 37.2 k LAKELAND-WINTER Sales $ Financial Activities 35.9k HAVEN, FL, MSA 5% EMPLOYMENT Production $ 34.9k BY SECTOR

Transportation & $ Professional & Government Material Moving 34.2k Business Services 12% 14% Office & $ Information Administrative Support 33.5k Other Services 1% 3% Manufacturing Leisure & Hospitality Food Preparation & $ 8% Service 23.3k 11% Source: BLS Occupational Employment Statistics Survey Source: BLS Current Employment Statistics Survey

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

METRO EMPLOYMENT TRENDS

FEBRUARY 2019 3.9% the metro's monthly unemployment rate was down 30 bps annually

Employment Trends LAKELAND-WINTER HAVEN MSA 15% 10,000 LARGEST EMPLOYERS Polk County School Board 13,240 12% 5,000 Publix Super Markets* 11,720 Lakeland Regional Medical Center 5,610 9% 0 Walmart 5,100 Polk County Government 4,480 City of Lakeland 2,300 6% (5,000) GEICO 2,220 Winter Haven Hospital 2,080 3% (10,000) Watson Clinic 1,850 Southeastern University 1,560

0% (15,000) Source: Polk County CAFR, September 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* * headquarters

*Projected Unemployment Rate Jobs Added / Lost

FEBRUARY 2019 7,600 jobs

were created metrowide, a 3.4% Y-o-Y increase

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

E-COMMERCE

PUBLIX SUPER MARKETS HEADQUARTERS 58,000 No. 88 Fortune 500 List Jobs Supported Publix Super Markets

31.6 million SF of Industrial Space

Greater Lakeland is strategically located between Tampa Bay and Orlando, making the area an ideal location for distribution facilities. The area is home to nearly 31.6 million square feet of industrial / warehouse space and employs approximately 58,000 employees in this sector. The area is home to Fortune 500 company Publix Super Markets and is one of the largest employers in the area, supporting 11,720 jobs. Other companies with distribution facilities in the area include Rooms To Go, O’Reilly Auto Parts, FedEx, Walmart, Amazon, IKEA, and UPS.

HEALTH CARE

LAKELAND REGIONAL MEDICAL CENTER 9,540 849-bed Total Jobs Supported Lakeland Regional by Top Employers Health Medical Center

Five Hospitals

Greater Lakeland is home to five hospitals and a multitude of other medical care facilities. Lakeland Regional Health, Winter Haven Hospital, and Watson Clinic are top employers, supporting approximately 9,540 total metro area jobs. Lakeland Regional Health Medical Center is the fifth-largest hospital in Florida with 849 beds. Medline recently opened a new medical supplies distribution center in the county, choosing the area because of its central location, proximity to a number of health care facilities, and to accommodate future growth.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

EDUCATION

FLORIDA POLYTECHNIC UNIVERSITY 25,000 Higher Education Students

6 Traditional Colleges

A number of higher educational institutions are located in Greater Lakeland including technical schools, community colleges, and public and private universities. Florida Polytechnic University opened in August 2014 and is the state’s first and only public university dedicated to science, technology, engineering, and mathematics (STEM). This top engineering school generates economic growth by attracting new, large companies, creating high-paying jobs, and a more highly educated work force. As of fall 2017, the university has grown to 1,450 students.

TOURISM

LEGOLAND FLORIDA 24,900 $2.4 billion Industry Jobs County Impact from Supported the Tourism Industry

72 million 14,000 acres Annual Tourists of Recreational Land

The 150-acre Legoland Florida is one of the major tourist attractions in Polk County welcoming two million visitors each year. The park is currently expanding with new attractions and hotels and has generated $1 billion of total economic activity, supporting about 1,500 direct jobs. Additional area attractions include Bok Tower Gardens, Streamsong Golf Resort and Spa, and Joker Merchant Stadium, home of Detroit Tigers spring training. The county also offers some of the country’s best fishing, boating, and golfing, attracting new residents and tourists alike.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

CONSTRUCTION AND DEVELOPMENT

PUBLIX SUPER MARKETS LEGOLAND RESORT

$25 million Two Expansion Project New Hotels Planned

700 Three Jobs Created New Attractions

In September 2018, Publix Super Markets announced plans to expand its Legoland Resort continues to expand its 145-acre Polk County park. In March corporate headquarters in Lakeland, adding 700 new jobs starting around 2019, the park opened its new The Lego Movie World. The new land includes $46,000 per year. The company will invest $25 million and add 190,000 three new attractions: The Lego Movie Masters of Flight, Unikitty’s Disco Drop, square feet of space to its present 320,000-square-foot campus, bringing the and Battle of Bricksburg. A new five-story, 150-room hotel is expected to open building to 510,000 square feet. Construction is slated to begin in late-2019 and in 2020 and connect to the existing 152-room hotel. The new hotel will cost $25 complete by 2020. By 2027 about 2,100 jobs will be supported at the facility. million to construct and will feature a pool with a massive deck area. In addition, the park is building a nine-hole miniature golf course that will connect to its existing hotel to open in summer 2019. In January 2019, plans were announced for a third on-site hotel, which will be pirate themed and also feature a heated pool. The new hotel is slated to open in spring 2020.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

CONSTRUCTION AND DEVELOPMENT

STUART CROSSING NUCOR STEEL FLORIDA

700-acre $240 million Mixed-Use Development Investment

200 acres 250 of Green Spaces New Jobs

A 700-acre mixed-use community is planned for the city of Bartow, Nucor Steel Florida, the largest U.S.-based steel company, recently announced dubbed Stuart Crossing. The development will have a wide range of medical, their plans to build a micro mill on 400 acres on U.S. 27, just south of the city of commercial, and housing options, as well as bike trails, 200 acres of green Frostproof. The $240 million project is expected to create 250 new jobs with spaces, shops, and restaurants. The community is accessible by a new four-lane an annual average salary of $66,000. The micro mill will make steel rebar from road, Ernest M. Smith Boulevard, connecting two U.S. highways, 98 and 17. The scrap metal with an estimated annual capacity of 350,000 tons. Construction 72-bed, 125,000-square-foot BayCare’s Bartow Regional Medical Center and its of the facility is expected to take two years to complete. Nucor is number 169 medical office park will neighbor the new development.BayCare Health System on the Fortune 500 list with over $20 billion in annual revenue. The company recently purchased two additional parcels with future expansion plans. supports 250,000 jobs among its 200 North America facilities, and is capable of producing 27 million tons of steel per year.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

CONSTRUCTION AND DEVELOPMENT

FLORIDA HOSPITAL WINTER HAVEN HOSPITAL

104-acre $107 million Land Purchase Expansion Project

200-bed 45,000 Hospital Expansion Plan Additional SF

In October 2017, Florida Hospital announced plans to expand into Lakeland Winter Haven Hospital is currently undergoing a $107 million three-phase area. The hospital purchased 104 acres of land along Interstate 4, just west expansion, which includes a new emergency department building and of Florida Polytechnic University, where it plans to build a freestanding upgrades to the Bostick Heart Center. In fall 2017, the emergency department emergency room and eventually a 200-bed hospital. The hospital will need moved into the first floor of the new building, which added double the space for state approval prior to building a hospital, based on need and the area’s growth. emergency care. The second floor of the 90,000-square-foot building is being Construction is not expected to begin on the hospital for at least a decade. built out where the Bostick Heart Center is slated to move most of its services and new state-of-the-art equipment into by early 2020. A third floor is being constructed, adding another 45,000 square feet for an intensive care unit. The overall project is expected to be complete in 2021.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

RENT / OCCUPANCY

EFFECTIVE $ OCCUPANCY RENT 1,029 RATE 96.3% in the first quarter of 2019 through March 2019

The Lakeland-Winter Haven apartment market has a large renter demand pool LAKELAND-WINTER HAVEN METRO APARTMENT MARKET fueled by robust job growth in retail / trade, warehouse, and transportation, which pay at or below median income levels, attracting them to the rental 98% Occupancy & Ask Rent $1,100 market. In addition, the area is home to nearly 10,000 college students and a large percent of millennials, who also boost apartment demand. Market rent is approximately 25% less than Metro Tampa rents and within a 45-minute 96% $1,000 commute.

From 2016 to 2018, the Lakeland apartment market saw an influx of new 94% $900 deliveries, with the majority concentrated on the southeastern side of the metro in outlying Polk County. Despite new supply, the market continues to have high occupancy rates and has experienced solid rent growth influenced by the increase in population and high job growth. 92% $800 $808 $845 $897 $927 $980 High demand has allowed operators to continually increase rents, yet remain $1,031 $1,074 comfortably less than neighboring metros. During the quarter ended in 90% $700 March 2019, effective rent in the Lakeland metro market was $1,029, a 3.9% 2013 2014 2015 2016 2017 2018 2019* increase year over year. Through the end of 2019, effective rent in this market *PROJECTED Rent Occupancy is projected to increase further, reaching $1,074.

Positive absorption totals have enabled the local apartment market to see high occupancy rates. The occupancy rate in the Lakeland metro market was 96.3% in the first quarter of 2019, down one percent annually yet remaining above the market’s five-year average.Occupancy is projected to rise slightly to 96.4% by year-end 2019.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

EDUCATION

HIGHER ECONOMIC $ EDUCATION 25,000 IMPACT 481m students metrowide from Polk State College

Polk County Public Schools is the seventh-largest school district in Florida POLK STATE COLLEGE - CLEAR SPRINGS ADVANCED TECHNOLOGY CENTER with an enrollment of more than 104,000 students. The district consists of more than 150 schools and employs over 13,200 faculty and staff.

Polk County offers six traditional colleges / universities with the newest state university, Florida Polytechnic University, which opened in the fall of 2014. The university currently serves about 1,450 students with a 10-year plan to grow the student body to approximately 5,000 students.

The largest metro area college, Polk State University, serves 11,410 students among its six campuses and has a $481 million annual economic impact on the county. The university’s graduates consistently out-earn the graduates of other Florida College System institutions and exceed the statewide median first-year salary. With a commitment to advance the area’s workforce, the college recently opened Clear Springs Advanced Technology Center. Other area colleges and universities include Southeastern University, Florida Southern College, Warner University, and Webber International University.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

LIFESTYLE AND ENTERTAINMENT

LEGOLAND WATERWAYS RESORT 50+ 213 miles rides available of lakes, rivers, and streams

Central Florida’s Polk County is the epicenter of Florida fun, offering a variety BOK TOWER GARDENS of entertainment options including white-sand beaches, sporting events, and theme parks. Attractions include LEGOLAND Florida Resort with over 50 rides, historic Bok Tower Gardens, 260-acre Safari Wilderness Ranch with more than 400 species of exotic animals, 1,700-acre Westgate River Ranch, and the largest collection of Frank Lloyd Wright architecture. Additional adventures include water sports, paintball, go-cart racing, batting cages, balloon rides, ziplining, and skydiving. The metro area hosts approximately 260 sporting events each year and is the headquarters for the Detroit Tigers Spring Training, the Lakeland Flying Tigers, the Orlando Magic’s G-League affiliate-the Lakeland Magic, two professional soccer teams, the annualSun ‘n Fun International Fly-In and Expo, and the Miss Florida Pageant.

Polk County is known as the “Water Ski Capital of the World” with 213 miles of lakes, rivers, and streams. Water activities are endless and include boating, flyboarding, paddleboarding, and jet skiing. With some of the best golf courses in the country, Central Florida features 32 public-access ranges, resorts, links, and parkland courses. The region is surrounded by over 25,000 acres of wetland preserves and wildlife habitats with abundant hiking, biking, and exploring options.

A variety of culinary options are available from fried catfish and hushpuppies, high-end steakhouses, and some of the country’s best barbecue. Popular breweries include Beer Revolution, Brass Tap, Brew Hub, Grove Roots Brewing Company, and Lakeland Brewing Company. Central Florida also offers a vibrant collection of historic landmarks, art galleries, museums, unique boutiques, theaters, music venues, and annual events.

BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

TRANSPORTATION

CITRUS ECONOMIC $ CONNECTION 1.1m IMPACT 284m passengers served annually by Lakeland Linder Regional Airport

Greater Lakeland is situated along the Interstate 4 corridor, connecting LAKELAND LINDER INTERNATIONAL AIRPORT residents with Orlando to the east and Tampa Bay to the west. Polk County is also served by US Highway 27 and State Road 60.

Public transportation in Polk County is provided by the Lakeland Area Mass Transit District, operating as Citrus Connection, Winter Haven Area Transit, and Polk County Transit Services. Citrus Connection offers fixed-route service in Lakeland, Winter Haven, and the rural areas, and provided over 1.2 million rides in FY 2016-17. Winter Haven Area Transit has grown to more than 500,000 riders annually.

The Lakeland metro area is home to numerous airports including Lakeland Linder International Airport offering full TSA and Customs operations to accommodate personal, business, and charter aircraft operations. The airport is home to 45 businesses, which support 1,500 jobs. Combined, Polk County airports are responsible for an estimated $352 million in annual economic activity. The county is also within 40 minutes of both Tampa International Airport (TIA) and Orlando International Airport (MCO).

Sources: Berkadia; Tetrad; U.S. Census Bureau; U.S. Bureau of Labor Statistics; Fortune / Money.CNN.com; Forbes; Moody’s; Wikipedia; Axiometrics; Berkadia Research; Publix; Tampa Bay Business Journal; Orlando Business Journal; Legoland; The Ledger; City of Winter Haven; City of Lakeland; Lakeland Economic Development Council; Orlando Sentinel; Polk County; The Advocate; Americanshipper.com; Lakeland Central Park; Winter Haven Chamber of Commerce; Time Herald- Record; News Channel 8; Central Florida Development Council; Growth Spotter; Business Facilities; Fox 13 News; Stuart Crossing; Medline; News Chief; The Lakelander; WGCU News; Business Observer; Crain’s Detroit Business; Bartow Chamber of Commerce; Bartow Economic and Development Council; Sperlings Best Places; CoStar; Lakeland Linder International Airport; Citrus Connection; Polk Transit; Polk State College; Polk County Public Schools; WInter Haven EDC; Southeastern University; Lakeland Regional Health; Florida Polytechnic University; IHS Global Insight; U.S. News & World Report; Visit Central Florida; Visit Florida; Bloomberg; Florida Southern College. BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW LAKELAND–WINTER HAVEN, FLORIDA | MSA

BY THE NUMBERS

TOTAL POPULATION MEDIAN AGE 2010 602,095 2010 40.0 2019* 690,318 2019* 41.1 2024* 752,856 2024* 41.4

Growth Rate (2019 - 2024) 9.1%

TOTAL HOUSEHOLDS MEDIAN HOME PRICE 2010 227,485 February - 2018 $188,500 2019* 261,530 February - 2019 $200,000

2024* 285,563 Growth Rate Y-o-Y 6.1% Growth Rate (2019 - 2024) 9.2%

MEDIAN INCOME EMPLOYMENT GROWTH 2010 $41,180 February - 2018 224,500 2019* $45,817 February - 2019 232,100

2024* $49,649 Growth Rate Y-o-Y 3.4% Growth Rate (2019 - 2024) 8.4%

RENT SHARE OF WALLET RENT VS. OWN National - 2019 27.2% Average Mortgage Payment** $1,122 Lakeland-Winter Haven Metro - 2019 27.0% Effective Rent $1,029

National - 2024* 27.6% Difference $93 Lakeland-Winter Haven Metro - 2024* 29.4% *Projected *Projected **30-yr fixed; 20% down; 5.1% interest rate; 1.02% FL property taxes; Annual Rent / Median Household Income $1,000 annual homeowner’s insurance BERKADIA ECONOMIC AND DEMOGRAPHIC OVERVIEW A Berkshire Hathaway and Jefferies Financial Group company