2Q 2017 Update

Schertz-Cibolo-Universal City ISD

District Demographics 2Q 2017 Update

Solutions Through Demographics SAN ANTONIO-NEW BRAUNFELS MSA POPULATION GROWTH

San Antonio-New Braunfels MSA defined as the 8-county region: Atascosa, Bandera, Bexar, Comal, Guadalupe, Kendall, Medina, & Wilson

San Antonio market is estimated to have added over 311K residents since 2010

Source: Esri, U.S. Census Bureau

 From 2000-2010, the San Antonio market’s population increased by a record 430,625 people  In 2017, the San Antonio market’s total population is estimated to be 2.45 million  8.7% of the state’s population lives in the San Antonio market  This decade San Antonio is on pace to surpass the record growth seen from 2000-2010  San Antonio-New Braunfels MSA is projected to be near 2.7 million people by year-end 2022

2 MOST POPULATED U.S. METROPOLITAN AREAS

#3 – Chicago-Naperville-Elgin

#1 - New York-Newark-Jersey City

Metropolitan Statistical Area (MSA) 2017 Total Population 1 New York-Newark-Jersey City 20,487,271 #2 – Los Angeles-LB 2 Los Angeles-Long Beach-Anaheim 13,505,354 -Anaheim #4 – DFW 3 Chicago-Naperville-Elgin 9,680,659 4 Dallas-Fort Worth-Arlington 7,284,296 #5 – Houston 5 Houston-The Woodlands-Sugar Land 6,896,170 6 Philadelphia-Camden-Wilmington 6,162,249 #23 San Antonio 7 Washington D.C.-Arlington-Alexandria 6,146,460 #28 Austin 8 Miami-Fort Lauderdale-West Palm Beach 6,027,585 9 Atlanta-Sandy Springs-Roswell 5,806,085  Over the past two years San Antonio 10 Boston-Cambridge-Newton 4,830,528 11 Phoenix-Mesa-Scottsdale 4,732,910 has moved up from 25th to the 23rd 12 San Francisco-Oakland-Hayward 4,679,371 13 Riverside-San Bernardino-Ontario 4,542,092 most populated metro area in the 14 Detroit-Warren-Dearborn 4,329,087 country 23 San Antonio-New Braunfels 2,453,759  San Antonio’s 14.5% growth from Source: Esri, U.S. Census Bureau 2010-2017 ranks 4th nationally

3 SAN ANTONIO-NEW BRAUNFELS MSA POPULATION GROWTH BY COUNTY 2010-2017 (Ranked by percentage change)

Population Growth Rank County % Chg. 2010-2017 1 Kendall 10,011 +30.0% 2 Comal 29,057 +26.8% 3 Guadalupe 26,052 +19.8% 4 Wilson 6,128 +14.3% 5 Bexar 229,971 +13.4% 6 Atascosa 4,637 +10.3% Source: Esri, U.S. Census Bureau 7 Medina 3,941 +8.6% 8 Bandera 1,454 +7.1%

 In 2017, 79.3% of San Antonio’s total population lives in Bexar County

 From 2010-2017, the number of people living in Guadalupe County has increased by 19.8%

4 MARKET POPULATION PROJECTIONS 2017-2022

2.7 million residents

Source: Esri, U.S. Census Bureau  United States population climbs to 341.3M (+13.8M)  18% of the national population growth occurs in Texas  Texas surpasses the 30M mark within the next 5 years by adding another 2.44M people  San Antonio market adds 236K residents (10% of the state’s projected growth)  At the projected rate, San Antonio’s population would be near 2.7M by mid- 2022 (79% of the market’s population would be in Bexar County)

5 GREATER SAN ANTONIO NEW HOME STARTS AND CLOSINGS Annual Starts: 11,212 Annual Closings: 10,510

Start = Foundation started Year-Over-Year Change Closing = Occupied home Annual Starts +7.2% Current Cycle Annual Closings +6.0%

. In 2Q17, Greater San Antonio homebuilders produced more almost 3,200 starts, a new high for the current housing cycle . San Antonio region’s annual starts rate climbs to 11,212 (+7.2% YoY and highest level since 2008) . 10,510 annual closings is a new record for the current housing cycle and the most in 9 years

6 GROWTH DRIVERS: GREATER SAN ANTONIO ANNUAL JOB GROWTH (8 county MSA: Atascosa, Bandera, Bexar, Comal, Guadalupe, Kendell, Medina, Wilson counties)

10-year Avg. = 20,724

Annual Job Growth = +24,300 (+2.4% Y-o-Y)

Source: Texas Workforce Commission Current Employment Survey (CES)

Unemployment Rates – June 2017 San Antonio: 3.9% Austin: 3.4%, DFW: 4.0%, Houston: 5.3% Texas: 4.7%, US: 4.5%

7 GREATER SAN ANTONIO ANNUAL CHANGE IN EMPLOYMENT BY INDUSTRY

Annual June 2017 % Change Change Mining and Logging +800 +12.1% Construction +3,300 +6.4% Manufacturing +1,600 +3.4% Trade, Transp, Util -500 -0.3% Information -700 -3.3% Financial Activities +200 +0.2% Prof & Bus Services +5,000 +3.9% Edu. & Health Serv. +10,600 +6.8%

Leisure & Hospitality +800 +0.6%

Other Services +200 +0.5% Government +3,000 +1.8% Source: TWC

8 GROWTH DRIVERS: LOW MORTGAGE RATES

7 30-YEAR RATE July 27, 2017 6.5 30YR : 3.92% 15YR : 3.20% 6 1YR ARM : 3.18%

5.5 Rates subside Rates remain near slightly as market 4% during key sales 5 enters 2Q17

Rate% months

4.5

3.5

Source: Freddie Mac

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

9 GROWTH DRIVERS: TIGHT SUPPLY OF PRE-OWNED HOMES (SAN ANTONIO-NEW BRAUNFELS MSA)

Annual Resale Rate (6/17) 32,277 +7.2% vs. 1 Year Ago Month Supply of Listings: 3.7

Source: Texas A&M Real Estate Center  Pre-owned sales in the region continue to increase; however, the supply of listings remains extremely tight at 3.7 months (6 months considered normal)

10 Source: SABOR S.C.U.C. ISD PRE-OWNED HOME MARKET SF Sales Only

• 454 existing home sales in the 2nd quarter of 2017

• 1,624 total resales from 3Q16-2Q17 (+4.4% YoY)

• District’s median resale sold price for the past 12 months was $218,950 (+4.0% YoY)

• Greater San Antonio Median Resale Price currently $218K (+3.9% YoY)

11 S.C.U.C. ISD QUARTERLY NEW HOME CONSTRUCTION

Start = Foundation started Closing = Occupied home

Starts 2010 2011 2012 2013 2014 2015 2016 2017 Closings 2010 2011 2012 2013 2014 2015 2016 2017 1Q 168 156 151 173 158 170 159 194 1Q 260 178 150 154 119 149 238 189 2Q 259 211 197 198 195 231 193 195 2Q 238 208 139 181 179 176 248 176 3Q 214 184 174 215 184 286 200 3Q 225 231 183 177 163 224 216 4Q 178 151 159 136 165 247 148 4Q 189 178 178 170 163 162 173 Total 819 702 681 722 702 934 700 389 Total 912 795 650 682 624 711 875 365

. Builders start 195 and close 176 new homes in the district during the 2nd quarter

12 S.C.U.C. ISD ANNUAL NEW HOME CONSTRUCTION

Annual Starts: 737 Annual Closings: 754

Year-Over-Year Change Annual Starts -16.7% Annual Closings -13.5%

Current Cycle Annual District Average = 725 Closings

Start = Foundation started Closing = Occupied home

. Annual starts are down 16.7% compared to this time last year (737 total starts from 3Q16-2Q17) . New home closings have decreased 13.5% over the past 12 months to 754 homes . Since 2Q11, district builders have produced an average of 745 starts & 725 closings per yr. . Developers delivered 786 new single-family lots (SF) over the past year

13 GREATER SAN ANTONIO SCHOOL DISTRICT RANKINGS BY NEW HOME CONSTRUCTION

Total Starts Total Closings Rank District 3Q16-2Q17 3Q16-2Q17 1 Northside 3,710 3,679 2 Comal 1,885 1,752 • SCUC ISD ranked 3 Judson 1,029 824 4th in total new 4 Schertz-Cibolo-U.C. 737 754 home closings over 5 Boerne 628 658 6 New Braunfels 731 597 the past 12 months 7 North East 471 516 among all Greater 8 Medina Valley 508 510 San Antonio school 9 Southwest 364 350 10 East Central 458 333 districts 11 San Marcos Con. 234 208 12 Seguin 128 133 13 Southside 69 99 14 Navarro 89 83 15 San Antonio 175 74 16 Harlandale 64 47 17 South San Antonio 49 31 18 Marion 42 27 Start = Foundation started Closing = Occupied home 19 Alamo Heights 24 5

14 S.C.U.C. ISD ANNUAL NEW HOME CLOSINGS BY CITY

Closing = Occupied home

 3Q16-2Q17 District Closings: 52% Cibolo, 33% Schertz, 13% Selma, 2% Converse

 Watch for closing to increase in Schertz in 2017/18 - Starts in Schertz have topped the 300 unit mark for the first time in two years

15 S.C.U.C. ISD TOP PRODUCING NEW HOME SUBDIVISIONS

Annual Elementary Intermediate Closings Attendance Attendance Projected City 3Q16-2Q17 Zone Zone Build-out

1. Turning Stone (All) 122 Cibolo Valley Schlather Cibolo 2019 2. Saratoga 100 Green Valley Schlather Cibolo 2020 3. Kensington Ranch (All) 87 Paschal/Schertz Wilder Schertz/Selma 2017 4. Riata Terrace 66 Sippel Schlather Schertz 2019 5. Landmark Pointe 59 Cibolo Valley Schlather Cibolo 2019 6. Willow Grove (All) 49 Rose Garden Wilder Schertz 2019 7. The Crossvine 45 Rose Garden Jordan Schertz 2040 8. Cibolo Vista (All) 41 Cibolo Valley Jordan Cibolo 2018 9. Rhine Valley 39 Watts Wilder Schertz 2026 10. Saddle Creek Ranch 38 Cibolo Valley Schlather Cibolo 2024 11. Heights of Cibolo 22 Cibolo Valley Schlather Cibolo 2021 12. MacArthur Park 18 Rose Garden Jordan Converse B/O 13. Fairway Ridge 15 Sippel Schlather Schertz 2018

 5 of the top 11 producers are located in the Cibolo Valley ES zone  8 of the top producing subdivisions are projected to be built-out in the next 3 years

16 NEW HOME ACTIVITY BY ELEMENTARY ZONE

• 37% of new homes occupied over the past 12 months were located in the Cibolo Valley ES zone

• Paschal, Schertz, and Rose Garden zones (combined) produced 29% of new home occupancies over the past year

• Annual closings in the Green Valley ES zone increase to 118 units

17 NEW HOME ACTIVITY BY INTERMEDIATE ZONE

. The Schlather zone continues to be the most active zone in the district with 57% of annual closings over the past 12 months

18 NEW HOME ACTIVITY BY JUNIOR HIGH/HIGH SCHOOL ZONE

 Majority of activity has shifted back to the Dobie JH/Steele HS zones  64% of the district’s closings over the past 12 months occurred in the Dobie JH/Steele HS zones

19 DISTRICT MEDIAN NEW HOME PRICE

 66% of new homes are being built in neighborhoods priced between $201K and $300K

 Annual activity over $300K is up 78% compared to same period last year

 The district’s median new home price increases to a new high of $279,757 in 2Q17 (+5.0% Y-o-Y)

 Greater San Antonio median new home price now $263,542K (-0.8% Y-o-Y)

Median New Home Price by City Cibolo = $282,410 Schertz = $289,736 Selma = $225,945 Converse = $225,500

20 SCHERTZ-CIBOLO-UNIVERSAL CITY ISD NEW HOME LOT INVENTORY  No new lots delivered in 2Q 2017

 1,619 vacant developed lots remaining as of June 30, 2017 (26.4 month supply)

SCUC ISD Lot Inventory by Attendance Zone Elementary Attendance Level Annual Annual VDL UC FV Model Future Lots Starts Closings Cibolo Valley: 226 282 409 81 63 17 376 Green Valley: 120 118 221 37 30 2 219 Paschal: 34 19 58 8 12 2 0 Rose Garden: 110 118 284 57 18 5 2,725 Schertz: 67 81 3 17 10 1 230 Sippel: 133 91 488 56 19 6 1,168 Watts: 43 39 140 23 12 4 202 Wiederstein: 4 6 16 1 4 0 2,259 Intermediate Attendance Level Jordan: 111 115 256 58 24 7 4,984 Schlather: 428 433 1,017 152 103 22 1,681 Wilder: 198 206 346 70 41 8 514 Junior High/High Attendance Level Corbett/Clemens: 268 275 567 112 54 12 4,285 Dobie/Steele: 469 479 1,052 168 114 25 2,894 District Total: 737 754 1,619 280 168 37 7,179

21 SCHERTZ-CIBOLO-UNIVERSAL CITY ISD 302 lots are in Cibolo 322 lots are in Schertz RESIDENTIAL LOTS UNDER DEVELOPMENT 26 lots are in St. Hedwig

 650 future lots under development as of June 2017

Subdivision Section(s) Total Lots Attendance Zones City Landmark Pointe 5 46 Cibolo Valley/Schlather/Dobie/Steele Cibolo Turning Stone S1 85 Cibolo Valley/Schlather/Dobie/Steele Cibolo Mesa at Turning 7 36 Cibolo Valley/Schlather/Dobie/Steele Cibolo Stone Saratoga 6 49 Green Valley/Schlather/Dobie/Steele Cibolo

Red River Ranch 1 86 Wiederstein/Jordan/Corbett/Clemens Cibolo

Bindseil Farms 1 84 Schertz/Wilder/Corbett/Clemens Schertz The Homestead 3B, 4 124 Sippel/Schlather/Dobie/Steele Schertz The Crossvine 1-4B 67 Rose Garden/Jordan/Corbett/Clemens Schertz Hallie’s Cove 1, 2 47 Rose Garden/Jordan/Corbett/Clemens Schertz Hunter’s Way 1 26 Rose Garden/Jordan/Corbett/Clemens St. Hedwig

 New or updated in 2Q17 22 FM 1103 CORRIDOR

PROPOSED MULTI-FAMILY DEVELOPMENT LOCATIONS

PROPOSED MULTI-FAMILY DEVELOPMENTS LOCATIONS

26 KENSINGTON RANCH

29 lots left to close (Schertz ES zone)

Schertz ES

Green Valley ES

Paschal ES Schertz ES

27 ESTATES AT MESA OAKS / MISTY WOODS / BINDSEIL FARMS

Estates at Mesa Oaks – 56 lots (Paschal ES)

Misty Woods – 36 lots (Paschal ES) Bindseil Farms – 85 lots (Schertz ES zone)

Proposed MF

28 CLEMENS HIGH SCHOOL

29 NEW ROSE GARDEN ELEMENTARY CONSTRUCTION

Corbett JH

30 RHINE VALLEY

Corbett JH

31 THE CROSSVINE (South Side)

32 HALLIE’S COVE

33 RED RIVER RANCH

34 SARATOGA

35 TURNING STONE

36 LANDMARK POINTE / MESA AT TURNING STONE

37 HOMESTEAD

Comal ISD

SCUC ISD

Future SCUC ISD School Site

38 CYPRESS POINT

Comal ISD

SCUC ISD

39 DISTRICT NEW HOME OCCUPANCY FORECAST (Based on known projects as of 2Q 2017)

Annual Period = 4Q-3Q

 District is averaging 0.78 students per new  SCUC ISD now poised to see an average of 780 new home occupancy home occupancies per year over the next five years  S.C.U.C. ISD continues to see an average of  New apartment developments projected to open in 0.33 students per multi-family unit 2019

40 DISTRICT ENROLLMENT FORECAST (FALL 2017- FALL 2026)

From 2015 to 2016, enrollment growth followed the low scenario

Projected Net Low Moderate Growth Scenario Scenario 3-Year 956 1,201 5-Year 1,762 2,056 10-Year 3,641 4,124 10- Yr. Annual 2.2% 2.6% Avg.

41 DISTRICT ENROLLMENT FORECAST LOW CAMPUS PROJECTIONS VS. MAX CAPACITY

Max Capacity w/ New Rose Garden = 6,468 Max Capacity w/ expanded Clemens = 5,700 Current Max Capacity = 5,968 Max Capacity = 4,630

Max Capacity = 2,700 Max Capacity = 2,644

42 DISTRICT ENROLLMENT FORECAST MODERATE CAMPUS PROJECTIONS VS. MAX CAPACITY

Max Capacity w/ New Rose Garden = 6,468 Max Capacity w/ expanded Clemens = 5,700 Current Max Capacity = 5,968 Max Capacity = 4,630

Max Capacity = 2,700 Max Capacity = 2,644

43 S.C.U.C. ISD 2Q17 SUMMARY

• Over the past year, new home builders in the district produced the 4th most new home construction among all of Greater San Antonio’s 32 school districts • District builders produced 195 starts and 176 closings in 2Q17 • 736 new homes were started and 754 were occupied in SCUC ISD over the past 12 months  SCUC ISD has averaged 725 closings per year since 2Q11 (start of current housing cycle) • 52% of new home closings occurred in the City of Cibolo and 33% in Schertz • Cibolo Valley ES attendance zone remains the most active with 37% of annual closings • Rose Garden, Paschal, and Schertz zones combined to produce 29% of district closings • Schlather was the most active intermediate attendance zone with 433 closings (57%) • 64% of district new home activity occurred in the Dobie JH/Steele HS zone • District’s median new home price now a record $279,757 (+5.0% YoY) as starts over $300K have increased by 78% over the past year • Developers delivered 786 new single-family lots over the past 12 months • 1,619 fully developed vacant single family lots remaining as of June 30, 2017 • 650 future lots currently under development (322 lots in Schertz, 302 in Cibolo, 26 in St. Hedwig) • Another 6,529 future single-family residential lots are planned plus 600 apartment units • SCUC ISD is projected to average 780 new homes per year over the next 5 years • District enrollment is projected to increase by 2-3% annually over the next 5 years

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Although School District Strategies (SDS) has used commercially reasonable efforts to obtain information from sources it believes to be reliable and accurate, SDS does not guarantee the accuracy or completeness of such information. Information presented in this report represents SDS’s estimates as of the date of the report and is subject to change without notice. This report is not intended as a recommendation or endorsement of any action taken by you or any third party in regard to the subject matter of this report or any other real estate activity. SDS WILL HAVE NO LIABILITY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES, INCLUDING (BUT NOT LIMITED TO) LOST PROFITS, OR DIMINUTION IN VALUE OF YOUR BUSINESS OR PROPERTY, ARISING FROM OR RELATING TO SDS’S SERVICES HEREUNDER, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES AND WHETHER OR NOT SUCH DAMAGES ARE REASONABLE OR FORESEEABLE UNDER THE APPLICABLE CIRCUMSTANCES. SDS’S LIABILITY ON ANY CLAIM OF ANY KIND, INCLUDING NEGLIGENCE, FOR ANY LOSS OR DAMAGE ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THIS REPORT OR THE SERVICES PROVIDED BY SDS SHALL IN NO SINGLE CASE, OR IN THE AGGREGATE, EXCEED THE AMOUNTS ACTUALLY PAID TO SDS IN CONNECTION WITH THE REPORT.

The following contingencies and limiting conditions are noted as fundamental assumptions that may affect the accuracy or validity of the analysis and conclusions set forth in this report. Specifically, the parties assume: that the Dallas/Fort Worth metropolitan area, the State of Texas, and the nation as a whole will not suffer any major economic shock during the time period of the forecast contained in this report; that general population levels will continue to increase at or above the rate forecast; that the public and third party sources of statistical data and estimates used in this analysis are accurate and complete in all material respects, and that such information is a reasonable resource for project planning purposes; the proposed real estate development projects described herein, when completed, will be designed, promoted, and managed in a manner that will have an impact on the local market that is reasonably consistent with other similar projects in the past; and that the recommendations set forth in this report will be acted upon within a reasonable period of time to preclude major changes in the factual conditions evaluated.