Tony Villamil Florida Entered the New Year with Strong Economic Momentum: A Positive Environment for South Florida Real Estate Economic Outlook: It’s the Economy! Get Smart on What to Expect in 2015 January 28, 2015

Economic Drivers and Long-Term Fundamentals of South Florida* are Mostly Positive for 2015 and Beyond US Economic Activity/ Financial Indicators Global Economic Performance Florida Business Climate South Florida Fundamentals West Palm Beach Broward Miami-Dade *Comprised of Miami-Dade, Broward and Palm Beach Counties.

Economic DriverOutlook 2015 Florida “Operating on All Cylinders” as we Enter 2015: US and Global Economies, Together with State Business Climate, are Key Drivers of South Florida US Economy Economy growing at 3% plus this year: Positive for key industries of Florida and South Florida such as Wholesale Trade, Construction, Retail, Tourism, Professional Services and Manufacturing Florida Business Climate Pro-growth Governor and Legislature. Election results solidify top business climate. Low and stable taxes, positive fiscal situation, aggressive recruitment, retention and expansion of companies by Governor/EFI Global Economy A mixed performance continuing in Euro Zone slow growth. Canada, Asia and most of Latin America countries experiencing moderate growth

US Financial Indicators: Positive for South Florida in

Household Net Worth: Positive for Consumer Spending Increasing in 2015 Source: Federal Reserve Bank, Flow of Funds Accounts, Flows and Outstandings, 3Q-2014 (Dec 11, 2014). Up $24 Trillion Since ‘08

Source: Federal Reserve Bank, Flow of Funds Accounts, Flows and Outstandings, 3Q-2014 (Dec 11, 2014). US Non-Financial Debt: Households Borrowing Prudently, Business Debt Growing YearsHouseholdsBusiness State & Local Governments Federal Financial and Housing “Bubbles” The “Great Recession” and the Aftermath :Q1 2014:Q2 2014:Q Keynes Lives!

Monetary Base: Record Breaking Growth: Exit Strategy of FED Keeps Me “Awake in Miami!” Source: Federal Reserve Bank of St. Louis Economic Research. Jan 2002-Dec Shaded areas indicate US Recessions. From QE1 to QE3! Ample Liquidity

Source: Federal Reserve Bank of St. Louis Economic Research. Q1:2002-Q3:2014. Shaded areas indicate US recessions.

US Economic Activity Likely to Gain Moderate Momentum in 2015: A Positive Development for South Florida Real Estate Industries Sources: BEA and The Washington Economics Group, Inc. (WEG) for Estimate (E) and Forecast (F).

Global Economy Continues to Underperform Again in 2015: But There are Significant Country Differences Source: International Monetary Fund, World Economic Outlook, January 20, 2015 Revision.

Top Business Climate, Low-Interest Rates and Declining Energy Prices are Propelling Florida and South Florida to Another Strong Economic Year

Florida’s Real GDP Growing Faster than National Average: State Likely to Grow Faster than Texas this Year! Sources: Bureau of Economic Analysis and The Washington Economics Group, Inc. (WEG) for Estimate (E) and Forecast (F). "Great Recession"

Economic Activity Accelerated in South Florida During 2014: Additional Gains Expected this Year

South Florida Payroll Employment Growth Rose Strongly in 2014: Continued Solid Growth Expected this Year in a Variety of Industries Category Dec 2013 Employment Dec 2014 Employment Over the Year Change Over the Year % Change Total Payroll Employment2,414,4002,487,200+72,8003.0% Total Private2,105,5002,177,200+71,7003.4% Trade, Transportation & Utilities575,500590,600+15,1002.6% Professional & Business Services378,700396,700+18,0005.0% Education & Health Services352,700363,100+10,4003.0% Leisure & Hospitality293,400301,700+8,3003.0% Financial Activities167,300172,700+5,4003.2% Construction97,200104,900+7,7008.0% Source: DEO, FREIDA, December 2014 Current Employment *Comprised of Miami-Dade, Broward and Palm Beach Counties.

South Florida* Housing Activity Consistent with Steady Growth: Preferably to “Boom and Bust” Housing Indicators Housing Starts11,47717,22521,311 Single-Family Home Sales39,23242,50144,903 Median Single-Family Home Price ($)$202,200$250,000$265,000 Multifamily Home Sales46,75448,40646,317 Multifamily Median Home Price ($)$103,000$129,000$145,000 Single-Family Homes (Months Supply Inventory) Multifamily Homes (Months Supply Inventory) Sources: Florida Realtors and US Census Bureau. *Comprised of Miami-Dade, Broward and Palm Beach Counties.

 Global “Brand” positive for expansion of key South Florida industries  Corporate relocations and growing technology hub of State  Higher education cluster  MIA/Fort Lauderdale airports  Port of Miami post Panama ships Long-Term Fundamentals of South Florida Remain Strong for 2015 and Beyond: Strengthening the Cyclical Upturn Strong Fundamentals Strengthen the Outlook for A Strong 2015 Economic Year Strong Fundamentals Strengthen the Outlook for A Strong 2015 Economic Year

“Bottom Line” 2015  Florida likely to outperform National economy again this year Top performing State among “The Big Four” South Florida has become a leading region of Florida  Continued low-interest rates, declining energy prices and pro-growth State, add to the fundamental strengths of Florida and South Florida  Downside risks to monitor : FED Policy Euro Zone and Japan “malaise” Middle East The “Executive Order” WH

Happy Business Hunting, with Moderation!

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