Impact of Shale Play on Harris County October 23, 2014

1. Impact of Shale Play on Harris County October 23, 2014 Quentin Hart McCord Development, Inc. (713) 860-3035 qhart@mccorddev.com

2. Unconventional shale continues to evolve The existence of large shale reserves is not new, but the methods of extracting the resources are and they are still evolving New Technology Drilling methods Materials Exploration tools Water treatments Transportation New Meanings Cheap feedstock LNG exports Petrochemicals Gas fired power Cheap industrial fuel Source: Wall Street Journal based on EIA data “Shell testing new laser-based sensor to find shale gas”

3. Harris County is feeling the impact because… • (1) It’s the energy capital of the world – The synergies in the industry make it the best place to locate. Companies can find: • The commodities • Centers of trade & logistics • A capable workforce (we need more!) • Leading research & technology • Business friendly policy • Low cost of electricity • Their vendors, suppliers and customers… • (2) The impact is far-reaching – A trickle down effect is benefiting numerous industries, notably: • Distribution of Goods: More jobs = maturing end user market • Industrial Service & Manufacturing: +$35B nearby energy capex = proliferation of service providers +3.7 MM growth over 30 years! Houston is headquarters to more than 3,600 energy-related establishments Source: Houston-Galveston Area Council

4. A closer look at the supply chain effect…

5. Companies are growing, adapting, dividing, investing… “Siemens bets big on shale with $7.6 billion Dresser-Rand Purchase” New real estate assets acquired through purchase “Southwestern Energy snaps up assets in Marcellus, Utica from Chesapeake” Constructing new corporate headquarters “National Oilwell Varco Completes Spinoff of NOW Inc.” New office & distribution center recently completed “Shell’s Houston-based MLP launches IPO” Expansion of Shell Woodcreek Campus underway “FMC Technologies Makes A Play In Shale” Corporate campus & headquarters consolidation underway

6. And an interesting dynamic Companies Working to Attract & Retain Top Talent The Skilled Workforce is Becoming a Key Focus for Companies • Houston has added more than three jobs for each lost in the recent recession • Engineers per capita rank second only to Silicon Valley • Younger generations have a differing expectations • Good pay –Graduates of the South Dakota School of Mines & Technology earned more than Harvard grads in 2012 Salary Education Training Benefits Mentoring Environment Wellbeing Access Convenience Companies are looking at new ways to differentiate their talent strategy

7. A facilities strategy evolving to meet new needs Consolidated campuses that are in master planned environments and near great housing are best meeting these needs + Innovation Productivity Cost Security Control Space Collaboration Environment Wellbeing Access Convenience

8. Case study: Generation Park • 4,000 master-planned acres • 10 minute drive to IAH • 15 minute drive to The Port • 20 minute drive to Downtown • 11,000 new homes being constructed next door • Great logistics: rail, tax-advantaged FTZ, & 5 interchanges to Beltway 8 • Robust infrastructure – underground electric, offsite detention, water direct from the source • Sites with scale to accommodate any user

9. An environment to attract & retain talent Banking Breakfast Shops Bike Shop Postal Service Dentist Physical Therapy Healthcare & Imaging Center 1MM SF office & industrial under construction Sandwich Shop Full Service Restaurants Coffee Shop Child Development Pet Care Fitness Center Computing Supplies Cafe Automotive Care Cellular Services Crossfit Gym Dry Cleaning Barber Shop Fitness Apparel

10. Quentin Hart McCord Development, Inc. (713) 860-3035 qhart@mccorddev.com