District Demographics Update Allen ISD District Demographics Update 2016/17 February 27, 2017

© School District Strategies ALLEN ISD DEMOGRAPHICS PROFILE: 2016 UPDATE Allen ISD’s overall population in 2016 is estimated to be 96,021 (+3.7% vs. 2015 and +17.4% since 2010 Census) In 2016, the district is estimated to have 31,907 total households, an increase of 4,542 households since 2010 (+16.6%) Total households are up 2.9% (+889) vs. 2015 Over the next five years, the average rate of population and HH growth in the district is projected to be near 2.4% per year District projected to have over 108,000 residents and almost 36,000 total households by summer 2021 Let’s begin with the latest national/government based statistics from ESRI and the US Census Bureau. In the summer 2016, the district’s total population was estimated to be just above 175,000. That’s an increase of 1.8% vs. last year’s total (2015 = 172,042). The total number of Households in the district increased by 1.1% over the past year to 58,544. The key takeaway here is that since the 2010 Census the over population and total number of HH in the district have been growing at a rate generally between 0.5-0.7% per year. This past year these 2016 estimates show growth that has exceeded the average annual rates for this decade. Now moving forward over the next five years, ESRI’s projected growth rates are faster (closer to 1.0% annually), which would push the district’s population up over 184,000 and grow the total number of HH in the district to over, 61,000. <slide> Source: ESRI & U.S. Census Bureau © School District Strategies

ALLEN ISD ENROLLMENT HISTORY (PK-12): FALL 2006-FALL 2016 10/28/16 Total enrollment climbs to a record high in Fall 2016 AISD enrollment has increased by 1,552 students over the past 5 years and by 4,444 students over the past 10 years

ALLEN ISD ENROLLMENT HISTORY: PK-12 ANNUAL GROWTH 2006/07 – 2016/17 5-Yr Avg. = +310 students per year 2-Yr Avg. = +151 students per year +3.5% +2.6% +2.2% +1.5% +0.8% +0.7% AISD has averaged 1.6% annual growth since the 2011/12 school year; however, over the last two years the rate of growth has slowed to an average of 0.75% per year

ALLEN ISD ENROLLMENT HISTORY: GROWTH BY ATTENDANCE LEVEL FALL 2006-FALL 2016 5 Yr. Net Growth = +215 5 Yr. Net Growth = +280 5 Yr. Net Growth = +162 5 Yr. Net Growth = +855

ALLEN ISD ENROLLMENT HISTORY BY GRADE LEVEL In Fall 2016, many grade levels (5th grade and up) climb to record size Largest classes are currently in 5th-8th grade (internal bubble) Kindergarten declines to a 10-year low this fall

ALLEN ISD BIRTHS vs. KINDERGARTEN ENROLLMENT

Annual Job Growth in Major Texas Markets (Dec.2016) GROWTH DRIVERS: TEXAS ECONOMY Employment Growth Dec. 2015 – Dec. 2016 United States +2.032 million +1.41% Texas +213,500 +1.78% # of Jobs Created in Past 6 Years DFW 624,000 Houston 439,400 Austin 207,800 San Antonio 155,500 Annual Job Growth in Major Texas Markets (Dec.2016) DFW +113,500 Houston +14,800 Austin +18,800 San Antonio +21,800 12/2015 - 12/2016 +213,500 net new jobs +1.78% growth rate 12,221,700 employed Source: TWC – CES (Not Seasonally Adjusted)

GROWTH DRIVERS: DFW JOB GROWTH +113,500 3.26% growth rate 25-Year Annual Average 58,336 Economic Cycle Recovery Cycle Low Jan 2010 2,858,400 Current Level Dec 2016 3,597,100 Net Gain +738,700 % Gain +25.8% Annual Change Dec.‘15 – Dec.‘16 TWC CES: +113,500 Total DFW MSA: 3,597,100 Sources: TWC – CES, Dallas Federal Reserve (Not Seasonally Adjusted)

GROWTH DRIVERS: LOW MORTGAGE RATES Source: Freddie Mac

DFW EXISTING HOME SALES (DFW MSA) Median Sales Price = $230,000 Up $21K (+10.0%) YoY Annual Resale Rate (12/16) 98,625 Up +4.8% vs. 1 Year Ago Month Supply of Listings: 1.82 Source: Texas A&M Real Estate Center Low inventory drives buyers to new home market

DFW NEW HOME STARTS, CLOSINGS, AND LOT DELIVERIES Current Cycle

ALLEN ISD PRE-OWNED HOME SALES Source: NTREIS: SF Homes, Non-Builder Sales Only 323 resales in the district during the 4th quarter of 2016 1,500 total resales in 2016 (+7.0% Y-o-Y) District’s median pre-owned sold price in 2016 = $295,001 (+9.3% Y-o-Y)

ALLEN ISD PRE-OWNED HOME SALES 59% of pre-owned sales in 2016 were east of U.S. 75 Source: NTREIS: SF Homes, Non-Builder Sales Only 1/1/2016-12/31/2016

QUARTERLY NEW HOME CONSTRUCTION ALLEN ISD QUARTERLY NEW HOME CONSTRUCTION Start = foundation started Closing = visibly occupied home Builders start 118 and close 120 new homes in AISD in the 4th quarter

ANNUAL NEW HOME CONSTRUCTION ACTIVITY ALLEN ISD ANNUAL NEW HOME CONSTRUCTION ACTIVITY Annual Rate and Change 567 Starts: +15.5% 504 Closings: +10.3% Current Cycle Start = foundation started Closing = visibly occupied home New home builders in AISD start 567 new homes in 2016 (+15.5% vs. 2015) Closings end the year up 10.3% at 504 homes Developers deliver 789 new lots in the district in 2016

DFW DISTRICT RANKINGS BY TOTAL NEW HOME CLOSINGS 4Q15-3Q16 In 2016, Allen ISD ranked 16th in total new home closings compared to the other 82 DFW school districts

AISD NEW HOME CONSTRUCTION BY CITY SECTOR 2016 Vacant Developed Lots Dec. 2016 Annual Starts Annual Closings Allen - West 363 343 654 Allen - East 78 83 28 McKinney 82 51 380 Parker 43 26 80 Lucas 1 2 1 West Allen communities produce 68% of AISD’s new home closings over the past year East Allen closings climb to 83 units (16.5% of all closings) 10.1% in McKinney 5.2% in Parker

ALLEN ISD TOP SELLING SUBDIVISIONS (Ranked by Annual Closings) Elementary/Middle Zone 2017/18 Annual Starts 2016 Annual Closings 2016 Cypress Meadows 66 70 Evans/Ereckson The Landings 35 63 Cheatham/Curtis Morgan Crossing 29 54 Chandler/Ford Creekside at Ridgeview 14 52 Evans/Ereckson Cumberland Crossing 17 44 Kerr/Ereckson Village Park 18 40 Lindsey/Curtis Village at Twin Creeks 59 33 Boon/Ereckson Cottonwood Crossing 29 29 Boyd/Ereckson Kings Crossing 21 19 Chandler/Ford Villas at Twin Creeks 10 18 Green/Ereckson The Preserve 1 14 Evans/Ereckson Spicewood at Craig Ranch 56 11 Kerr/Ereckson Most top selling subdivisions are located in the Northwest portion of the district Ansley Meadow (79 starts/5 closings in Cheatham/Curtis), and Parker Ranch Estates (22 starts/7 closings in Bolin/Ford) will be moving onto the top producing list in 2017

AISD NEW HOME ACTIVITY BY ELEMENTARY ZONE (2017/18 Attendance Zones) 74% of the district’s annual closings occurred in the northwest elementary zones – Evans, Cheatham, Kerr, Lindsey, Green, Boon, and Preston Evans and Chandler zones see the most new home closings in 2016 Cheatham zone sees the most starts in 2016 (Ansley Meadow) Boon start activity increasing as builders at Village at Twin Creeks ramp-up production over the past 9 months

AISD NEW HOME ACTIVITY BY MIDDLE SCHOOL ZONE Ereckson zone continues to see the most activity with 62% of the district’s total closings in 2016

Median New Home Price by City Sector ALLEN ISD NEW HOME ACTIVITY BY PRICE RANGE All new homes started in AISD in 2016 occurred in subdivisions with average base pricing over $300K District’s median new home price ends the year at $459,194 (+6.9% Y-o-Y) DFW Median New Home Price = $345K (+12% Y-o-Y) Median New Home Price by City Sector West Allen = $457,604 East Allen = $400,500 McKinney = $428,484 Lucas/Parker = $750,000

ALLEN ISD RESIDENTIAL DEVELOPMENT 152 new single-family (SF) lots delivered in the 4th quarter Vista Oaks: 152 lots (Lindsey/Curtis) 1,143 vacant developed lots (VDL) remaining (24.2 month supply) 30% of VDL are lots smaller than 50 ft. wide 637 future SF residential lots under development at Y/E 2016 Subdivision/Phase Total Lots Elementary/Middle Spicewood at Craig Ranch Ph.2 60 Kerr/Ereckson Parkview Lane Townhomes 91 Norton/Ereckson Montgomery Farm Estates 194 Norton/Ereckson Parker Ranch Ph. 2 & 3 73 Bolin/Ford Vineyards 131 Lindsey/Curtis Stacy Villas 88 Marion/Curtis (Blue) = New or updated in 2016

ALLEN ISD MULTI-FAMILY DEVELOPMENT New apartments recently completed or under construction: Parkside at Craig Ranch Ph. 3 & 4 (Evans/Ereckson) Twin Creeks Crossing Ph. 2 (Boon/Ereckson) Dolce Living at Bella Terra (Boon/Ereckson) Raleigh House at McKinney Ranch (Lindsey/Curtis) Montgomery Ridge – 333 units (Norton/Ereckson) (Blue) = New or updated in 2016

ALLEN ISD PROPOSED RESIDENTIAL DEVELOPMENT Preliminary Single-Family Projects Included in Enrollment Projections: Silverado TH’s – 86 lots (Lindsey/Curtis) Rivercrest Park – 35 lots (Reed/Curtis) Fountain Park – 26 lots (Reed/Curtis) St. Andrews Park – 62 lots (Olson/Curtis) Cottonwood Tract – 350 lots (Preston/Curtis) [Land surrounding PES) Angel Field East at Montgomery Farm - 131 lots (Norton/Ereckson) Connemara Crossing at Montgomery Farm – 78 lots (Norton/Ereckson) Ashwood Creek Place TH’s – 19 lots (Norton/Ereckson) Walnut Springs at Twin Creeks – 146 lots (Evans/Ereckson) Southgate Ranch – 32 lots (Bolin/Ford) Proposed Multi-Family Included in Enrollment Projections: The Luxe Allen – 454 units (Olson/Curtis) The Kinstead – 380 units (Lindsey/Curtis) Vera Watters Creek – 266 units (Norton/Ereckson) Cornerstone Village – 900 units (Evans/Ereckson) The Reserve at Lucas – 100 units (Chandler/Ford) (Blue) = New or updated in 2016

AISD RESIDENTIAL LOT INVENTORY BY ELEMENTARY ZONE ANNUAL STARTS 2016 VACANT DEVELOPED LOTS REMAINING PLANNED FUTURE SINGLE-FAMILY LOTS PLANNED FUTURE APARTMENTS Anderson Bolin 22 45 156 Boon 59 160 388 592 Boyd 29 6 Chandler 51 37 192 100 Cheatham 114 147 337 Evans 86 130 146 2,220 Green 10 7 Kerr 91 115 89 Lindsey 26 304 217 Marion 88 Norton 168 632 599 Olson 62 454 Preston 3 350 380 Reed 61 Rountree Story 20 21 Vaughan TOTAL 567 1,143 2,381 4,682

AERIAL PHOTOS JANUARY 4, 2017 ALLEN ISD DISTRICT HOUSING ACTIVITY REPORT AERIAL PHOTOS JANUARY 4, 2017

US 75 SRT/121 In-progress/Planned Apartments Bethany Lake Forest Alma Stacy US 75 SRT/121 Angel Pkwy Exchange Exchange McDermott Main Bethany Greenville Bethany In-progress/Planned Apartments

ALLEN ISD NEW HOME CONSTRUCTION CLOSINGS MODERATE FORECAST 4Q16 District averages 0.79 students per new home occupancy (0.47 ES, 0.12 MS, and 0.20 HS) Typical apartment yields 0.27 students per unit 1,737 over the next three years AISD projected to see an average of 545 new SF homes per year over the next three years under the Moderate Scenario (5 Yr. Avg. = 552 per year) Planned apartments will likely take another 6-8 years to be constructed and leased out

5 Yr. Avg. Annual Growth Rate = 1.2% DISTRICT ENROLLMENT PROJECTIONS (PK-12) Fall 2016 enrollment comes in between Low and Moderate 4Q15 projection (20,845-20,933) 5 Yr. Avg. Annual Growth Rate = 1.2% District enrollment is projected to increase by approximately 874 students over the next 3 years, 1,302 over the next 5 years, and leveling off near 22,400 students in 10 years

ALLEN ISD 4Q 2016 SUMMARY District enrollment climbs to a record high of 20,885 in Fall 2016 AISD has averaged 1.6% annual growth over the past five years; however, over the past two years the rate of enrollment growth has slowed to 0.75% per year In 2016/17, many grade levels (5th and up) climb to record numbers; but Kindergarten enrollment falls to a 10-year low Area job growth continues to drive new home construction and residential development in the district: 567 new homes started and 504 occupied in 2016 (10-15% increase vs. 2015) The most active neighborhoods are located in the northwest portion of the district - 74% of 2016 closings occurred in the Evans, Cheatham, Kerr, Lindsey, Green, Boon, and Preston zones In 2016, 62% of new homes were built in the Ereckson zone, but activity is projected to shift towards the Curtis MS zone over the next three years as new neighborhoods open in the Lindsey and Preston zones District’s median new home price now a record $459,194K (DFW new median = $345K) Developers deliver 789 new single-family (SF) lots in 2016; 1,143 vacant SF lots were remaining at Y/E 2016 637 future SF lots currently under development in the district Developers are planning another 1,744 future single-family lots Over 4,600 apartments are in-progress/planned in the district New homes are yielding 0.79 students per home and apartments are yielding 0.27 students per unit Residential development projected to increase total enrollment by an average of 1.2% annually over the next 5 years; pushing district enrollment up to near 22,500 by 2022

Copyright 2017 School District Strategies. 16980 Dallas Parkway Suite 101 Dallas, Texas 75248 www.schooldistrictstrategies.com 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.   Copyright 2017 School District Strategies.