Connecting the Dots: Why Orlando s Investment in Infrastructure Matters

301 E. Pine Street, Suite 900 // Orlando, FL 32801 // P/ 407.422.7159 // orlandoedc.com

“Central Florida is making huge investments in transportation, community venues, centers of innovation and our downtown core. All of these investments are geared to improving our quality of life, enhancing our talent pipeline, and creating a robust and diverse economy which will lead to new opportunities, growth for our region and economic competitiveness._”

“The advantage of the central location of Orlando International Airport is a network of transportation options. Our current expansion plans follow the vision to provide true multimodal connectivity for the state by integrating rail into our existing ground and air transportation system._”

Connecting the Dots: Why Orlando’s

Investment in Infrastructure Matters

Corporate location decisions involve many different factors. Traditionally, available workforce and compatible real estate solutions have been critical in the site selection process.

In 2014, highway accessibility ranked as the single most important factor to U.S. corporate site selectors in a survey by Area Development

magazine, up from its second place ranking in the previous year’s study. The shift was reflective of a process that is rewarding communities who invest in their future by making strategic, targeted investments.

Yet investing in infrastructure is about more than just upgrading

transportation. In job creation strategies, regions are increasingly shifting efforts toward creating environments that will satisfy both short and long-term corporate objectives. Approximately half of 2014’s list of top site selection factors fall into an expanded definition of infrastructure that also capture regional capacity and quality of life issues.

In all areas, Orlando is proving itself to be amongst the most progressive, forward-looking regions in the country, currently completing or planning investments totaling approximately $15 billion.

Connecting Jobs to Workers

Transportation and logistical efficiencies are crucial in today’s highly-competitive domestic and global markets. Communities who make major investments in connectivity are at a clear economic advantage.

In Dallas, the recent opening of a fully rebuilt, 10-mile highway through one of Texas’ most congested corridors was critical to arguably the highest profile corporate relocation of 2014. The North Tarrant Express will help move workers to and from the new Toyota USA headquarters in Plano, TX that is slowly filling up with 4,000 jobs formerly located in Southern California.

Almost twice as long, Florida’s $2.3 billion investment in the I-4 Ultimate Improvement Project promises to similarly grease Orlando’s economic wheels. Additional funds approaching $5 billion are being invested to further improve the region’s connectivity through expansion of Orlando International Airport and construction of both All Aboard Florida and the Wekiva Parkway.

Commission (EDC). Comprised of local industry leaders, the Forum meets quarterly to discuss both current economic conditions and issues of regional significance in the four-county Orlando Metropolitan Statistical Area (MSA). Orlando Insight reflects those discussions and draws from the most recent data available at time of preparation.

––Phil Brown Executive Director Greater Orlando Aviation Authority –– Orlando L. Evora Co-Managing Shareholder Greenberg Traurig, P.A.

“Orlando’s strong infrastructure is one of the reasons why we’ve landed numerous economic development projects and is why Orlando was named a top 10 “American City of the Future” by fDi Magazine.”

Sowing the Seeds of Tomorrow’s Innovation

Long before Dallas was upgrading its road infrastructure, Austin was establishing a framework that would later be credited as the catalyst for the region’s subsequent rise as a high-tech center. The University of Texas donated the land that would host SEMATECH, a consortium that set out to redesign the United States’ semiconductor industry. Major chip manufacturers would soon follow.

In partnership with Osceola County, the University of Central Florida (UCF) broke ground late last year on the Florida Advanced Manufacturing Research Center (FAMRC), operated by the International Consortium for Advanced Manufacturing Research (ICAMR). The 100,000-square-foot facility will seek to emulate

SEMATECH’S success, only in the smart sensors market, by creating a one-of-a-kind R&D facility for multinationals. Separately, a planned 150,000-square-foot BioResearch Center within Florida Hospital’s Health Village will look to advance the region’s leading position in healthcare technology.

The Business of Place Making

While FAMRC will facilitate near-term decisions, many companies are looking decades into the future when evaluating potential locations.

In most cases, that means placing the

needs of their future workforce to the forefront and moving toward a live/work environment that will help attract the workers of tomorrow.

Americans overall are moving less but young, college-educated people continue to relocate in large numbers – almost a million cross state lines each year. The cities where they have largely ended up in recent years have also been among the decade’s most celebrated economic success stories. Denver, Portland and Nashville have increased their millennial populations by an average of 45 percent over the last five years. The three regions are joined by a common thread – a vibrant downtown rich in amenities. In Orlando, the completion of the Community Venues initiative, the promise of both a cutting-edge MLS stadium and the Orlando Sports Entertainment District and plans for a UCF Downtown Campus and development of Creative Village will go a long way to establishing our own millennial magnet.

Great economic damage can result from long-term, unaddressed infrastructure needs. Orlando’s proactive investments may actually serve to accelerate economic growth.

“Florida Hospital Health Village is designed to deliver economic growth through the promotion of wellness and healthcare innovation. Its emergence will drive

commercial development and employment opportunities to Central Florida._”

–– Rick Weddle

President & CEO Orlando Economic Development Commission –– Vickie White Vice President of Strategic Partnering Florida Hospital

Around the Region

Osceola County:On July 14, 2015, Great Britain’s Prince Harry announced that the 2016 Invictus Games will be held in the U.S. at the ESPN Wide World of Sports Complex at the Walt Disney World Resort. The Invictus Games is the only international adaptive sporting event for injured active duty and veteran service members. The 2016 games will bring together more than 400 competitors from up to 14 nations to compete in 10 sports.

Orange County: Chiquita Brands is relocating its Fresh Express division headquarters to Orange County. Chiquita is leaving Charlotte, NC and bringing around 100 high paying jobs.

City of Orlando: In late July 2015, MLS franchise Orlando City Soccer unveiled additional details about their new downtown stadium. The stadium will now hold up to 25,500 fans, much larger than the 19,000 originally envisioned, and will be completely financed with private money.

Seminole County: FARO Technologies, an international manufacturer of computer driven manufacturing devices with its headquarters in Lake Mary, announced in May 2015 that it would add 51 new high skill jobs to their existing 210 with an average annual salary of more than $60,000.

Lake County: On July 21, 2015, Lake County Commissioners approved the Wellness Way Project for 15,000 acres of vacant land in the southeast corner of Lake County. Leaders hope to leverage nearby assets such as the National Training Center and create high wage jobs in the health and wellness and clean manufacturing sectors.

Labor Market

Labor Force

1,218,366 Unemployment Rate5.1% Initial Claims4,257 New Job Postings26,036

Arrows indicate change from previous year. Data for June 2015 unless otherwise specified. “Central Florida has the capability and resources to become a global leader for talent. As we work to build on our world-class education clusters and training magnets, we are working collaboratively as a community to address talent gaps and attract the world’s top candidates … and proactively meet the needs of the region’s businesses and targeted industries so this vision can become a reality.”

• Unemployment closed the first half of 2015 at 5.1 percent, a decrease of 10 percentage points from one year earlier and lower than the national rate of 5.5 percent. Of the 13 reported cities in the region, Sanford has seen the greatest decline over the last twelve months and currently sits at 5.4 percent. Source: U.S. Department of Labor, Bureau of Labor Statistics

Source: The Conference Board, Help Wanted OnLine; prepared by the Florida Department of Economic Opportunity

Source: Florida Department of Economic Opportunity

• Area companies with the most new online job postings reflect the nature of Orlando’s recovery. Healthcare professionals remain in high demand and made up 1,808 of the 26,036 jobs advertised in June, or 6.9 percent.

• Declines in the unemployment rate are being sustained primarily by absorption of the unemployed already in the workforce. Labor force growth remains elusive; if workers begin to rejoin or enter the workforce in significant numbers meaningful declines will prove ever more difficult to replicate.

0.8 0.9 1.0 1.1 1.2 1.3 2 4 6 8 10 12 14

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Orlando MSA Unemployment & Labor Force

Percent, Millions of Workers, Seasonally Adjusted

Employment (right axis) Unemployment (right exis) Unemployment Rate (left axis)

June 2015 (NSA) Orlando MSA: 5.1% United States: 5.5% 4.1% 4.1% 4.2% 4.3% 4.8% 4.7% 4.5% 4.6% 4.7% 4.9% 4.7% 5.6% 5.4% 4.7% 4.7% 4.8% 5.1% 5.3% 5.4% 5.4% 5.5% 5.6% 5.8% 5.8% 6.4% 7.2% 2% 4% 6% 8% Ocoee Winter Garden Oviedo Apopka Winter Park St. Cloud Winter Springs Orlando Altamonte Springs Clermont Casselberry Kissimmee Sanford

Orlando MSA Area Unemployment Rates

June 2015, Not Seasonally Adjusted

Jun-15 Jun-14 Orlando MSA, June 2015: 5.1% Company Number Florida Hospital 1,221

The Walt Disney Company 489

Marriott 303

HCA – The Healthcare Company 292

Wyndham International 286

Brookdale Senior Living 242

The Holiday Inn & Suites 238

Universal Orlando 213

Wyndham Hotel Group 199

Lockheed Martin 188

Top 10 Employers by Online Job Ads, Orlando MSA

June 2015

–– Pamela Nabors

President & CEO CareerSource Central Florida

Payroll Employment / Consumer Spending

continues to report the largest year-over-year gains in the state, adding 47,200 payroll jobs in the last year.

• Year-over-year employment growth of 4.4 percent in the business services industry and 5.4 percent in the financial sector has resulted in the addition of 11,800 office-using jobs in the last 12 months. Total office employment in Orlando is now 292,000, exceeding its pre-recession peak by over 10,000 jobs.

• While employment gains are generally proving broad-based, growth remains disproportionately concentrated in the tourism and construction industries. Tourism makes up 22 percent of Orlando’s total workforce but has accounted for 28 percent of all jobs created in the last 12 months; construction makes up 5 percent of all jobs but has contributed 9 percent of recent gains.

Arrows indicate change from previous year. Data for June 2015 unless otherwise specified.

Source: U.S. Department of Labor, Bureau of Labor Statistics Source: U.S. Department of Labor, Bureau of Labor Statistics

• Employment growth has now exceeded the nation’s rate for almost four years; June’s year-over-year rate of 4.3 percent was second only to San Jose among MSAs with an employment base of over 1 million jobs.

-0.8% -0.3% 2.3% 7.4% 5.4% 1.3% 2.8% 4.4% 5.9% 5.6% 4.3% -2% 0% 2% 4% 6% 8% 10% Information Other Services Manufacturing Construction Financial Activities Government

Educ. & Health Services Prof. & Bus. Svcs. Trade, Trans. & Utilities Leisure & Hospitality

Total Nonfarm

Orlando MSA Employment Growth by Industry

June 2014 to June 2015, Not Seasonally Adjusted

More

Number of Employees

Less

Source: Florida Department of Economic Opportunity

Construction Manufacturing Trade, Transportation, and Utilities Financial Activities Professional and Business Services

Education and Health Services

Leisure and Hospitality

Total Government 0% 5% 10% 15% 20% 25% 30% 35% 40% 0% 5% 10% 15% 20% 25% 30% 35% 40% Contribution to Job Growth Share of Employment

Contribution to Job Growth by Industry

June 2014 to June 2015, Not Seasonally Adjusted

45 Degree Line

Rank MSA % Change

1 San Jose, CA 5.6% 2 ORLANDO, FL 4.3% 3 Seattle,WA 3.7% 4 Riverside, CA 3.6% 5 Dallas, TX 3.4% 6 Denver, CO 3.2% 7 Miami, FL 3.0% 8 Atlanta, GA 2.9% 9 San Francisco, CA 2.9% 10 Portland, OR 2.7%

% Change in Payroll Employment, MSAs > 1 Million Jobs

Commercial / Residential Real Estate

apparent; the Maitland submarket has rebounded from a disproportionately harsh downturn to record the highest year-over-year Class A rental growth in the market at 11.3 percent; the Millenia submarket has surpassed the Central Business District as the market’s most expensive market for Class A product at $26.63.

• Year-over-year home price appreciation, most recently 7.7 percent in June, has rebounded in response to a decline in available inventory and a potential hike in interest rates. Inventory in June sat at 3.5 months, consistent with pre-recession lows.

Arrows indicate change from previous year. Data for June 2015 unless otherwise specified.

Source: CBRE

Source: Cushman & Wakefield

• Two construction completions slowed first quarter net absorption in the industrial market to 340,387 square feet, following first quarter net absorption of 1.7 million square feet. Overall vacancy increased 10 basis points to 9.5 percent.

“At our Orlando holdings, we have seen stronger demand for residential and commercial real estate. Lake Nona continues to grow with record new home sales and $200 million in active commercial development. At Isleworth, housing demand continues to be healthy with prices continuing to escalate. And, our commercial project at the corner of Apopka Vineland Road and Conroy Windermere Road, The Grove, has quickly become a vibrant mixed-use destination with restaurants, shops and offices. We are also preparing to launch the next phase at that corner.”

“The Orlando commercial real estate market continues on a positive trajectory with increased leasing activity and decreasing vacancy rates. Improving job and population growth, coupled with increasing corporate and consumer confidence, make the outlook for the next several years very positive.”

$22.46 $19.50 $21.87 $23.55 $25.88 $25.90 $26.63 $22.54 _$22.35 1.0% 0.1% 11.3% 3.5% 8.3% 1.6% 8.6% 0.4% -0.7% -2% 0% 2% 4% 6% 8% 10% 12% $18 $20 $22 $24 $26 $28 $30 Lake Mary /

Heathrow AltamonteSprings Maitland University /Research Winter Park Central BusinessDistrict MetrowestMillenia / Tourist Corridor Airport / LakeNona Average Class A Asking Rate by Submarket, Orlando MSA

2nd_{Quarter 2015}

Average Asking Rate, Class A (left axis) Y/Y % Change (right axis)

REGIONAL AVERAGE: $23.58 (+4.7%)

Tenant Submarket SF

JJ Haines & Company NWOrange 136,655

Air Traffic Services SW Orange 122,553

UPS Supply Chain Solutions SW Orange 112,000

Shepard Exposition Services SE Orange 99,124

Omicron Supplies SW Orange 37,949

Happy Talk Event Solutions SW Orange 34,442

Industrial Market, Orlando MSA

Significant New Lease Transactions, 2015 YTD

-25 -20 -15 -10 -5 0 5 10 15 20 25 30 -60% -40% -20% 0% 20% 40% 60% 80% 100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3-Month Moving Average Y/Y % Change 3-Month Moving Average

Home Sales vs. Inventory, Orlando MSA

Through June 2015

Median Sales Price (left axis) Inventory (right axis)

Source: Orlando Regional Realtor Association

––Rasesh Thakkar

Senior Managing Director Tavistock Group

––Bill Moss

Senior Managing Director CBRE

Transportation / Visitor Industry

year-over-year in June for the fifteenth consecutive month as the hub welcomed more than 3.2 million travelers. On a 12-month-moving average basis, total traffic is nearing its pre-recession high of 3.1 million.

“Visitation to Orlando continues to outpace industry forecasts, and room night demand in 2015 shows solid growth on top of the record levels experienced in recent years. This demand growth, coupled with rebounding average daily room rates, is driving revenues and tax collections to unprecedented levels.”

• Both average daily rate (ADR) and occupancy remain on track for another record-breaking year. Year-to-date ADR in the core International Drive and Lake Buena Vista markets have increased 5.5 and 2.7 percent year-over-year, respectively.

Arrows indicate change from previous year. Data for June 2015 unless otherwise specified.

• Orange County tourist tax collections increased 11.4 percent in May to sustain a markedly positive growth trajectory. Year-to-date total revenue of $101.8 million represents the highest May total on record.

Source: Orange County Comptroller

Source: Visit Orlando

-20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Tourist Tax Collections, Orange County

Y/Y % Change, 12-Month Moving Average

2,000,000 2,300,000 2,600,000 2,900,000 3,200,000 3,500,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Passengers – Orlando International Airport

Through June 2015, 12-Month Moving Average

Source: Greater Orlando Aviation Authority

63.9% 67.6% 68.8% 70.5% 73.7% 80.1% $90.76 $94.11 $97.20 $102.03 $108.03 $116.76 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 2015 YTD $80 $90 $100 $110 $120

Hotel Occupancy vs. Average Daily Rate, Orlando MSA

Through June 2015

Occupancy (left axis) Average Daily Rate (right axis)

––Larry Henrichs

COO & CFO Visit Orlando

301 E. Pine Street, Suite 900 // Orlando, FL 32801 // P/ 407.422.7159 // orlandoedc.com

ABOUT THE EDC

The Orlando Economic Development Commission (EDC) is a not-for-profit, public-private partnership that attracts, retains and grows jobs for the region. The EDC serves Orange, Seminole, Lake and Osceola counties and the City of Orlando in Florida.

For more information, contact:

NEIL HAMILTON

Director, Business Intelligence

neil.hamilton@orlandoedc.com

ELIZABETH RAMIREZ

Associate Director, Business Intelligence

elizabeth.ramirez@orlandoedc.com Bill Moss

CBRE

Pamela Nabors

CareerSource Central Florida Bob Provitola

Mitsubishi Hitachi Power Systems Americas, Inc.

Chair, Manufacturers Association of Central Florida

Jon Rambeau

Lockheed Martin Training and Logistics Solutions (TLS) Jerry Ross

National Entrepreneur Center Thomas K. Sittema

CNL Financial Group

Chair, Orlando EDC

Jacob Stuart

Central Florida Partnership Rasesh Thakkar Tavistock Group Rick Weddle Orlando EDC Vickie White Florida Hospital

CHAIR

MEMBERS

Thomas Baptiste, Lt. Gen., USAF (Ret.) National Center for Simulation

Cecelia Bonifay Akerman, LLP

Co-Chair, EDC Business Development Committee

Phillip Brown

Greater Orlando Aviation Authority Robert Chandler, CEcD

Lake County

Chair, Regional Economic Developers (RED) Team

Orlando Evora Greenberg Traurig, LLP

Co-Chair, EDC Business Development Committee

Scott Faris AeroSonix, Inc. David Fuller

SunTrust Foundation

Vice Chair, Orlando EDC

Larry Henrichs Visit Orlando Steven Jamieson The Mall at Millenia Tony Jenkins Florida Blue Kimberly Maki