Office. Demand for new construction and strength in tech sector drive market at midyear. New York Q Quarterly Office Outlook

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1 Office New York Q Quarterly Office Outlook Demand for new construction and strength in tech sector drive market at midyear The pendulum swung from Downtown to Midtown in the second quarter with a number of high-profile transactions west of Fifth venue, including several in the outperforming Hudson Yards/Manhattan West district. In Midtown South, non-tmi firms signed the largest leases, as the market matures and attracts a more diverse tenant base. Total Manhattan sales volume in the second quarter was $6.0 billion 39.4 percent below the five-year quarterly average.

2 2 New York overview The pendulum swung from Downtown to Midtown in the second quarter with a number of high-profile transactions west of Fifth venue, including several in the outperforming Hudson Yards/Manhattan West district. Despite fair activity, the Manhattan Class vacancy rate rose from 10.9 percent to 11.2 percent over the quarter as new and returning space hit the market. 3 World Trade Center officially entered the Downtown inventory, and space formerly occupied by UBS at 299 Park venue nudged Trophy vacancy upward in Midtown. sking rents were mostly flat, but the average drifted higher as newer and higher-quality space became available. t 4.3 percent, the New York City unemployment rate remained near a historical low at the end of the second quarter. The education and healthcare sector led job growth, expanding by 3.4 percent 31,700 jobs year over year. Though not a traditional space user, the sector is increasingly driving office demand. In contrast, employment growth in financial services remained muted despite recent optimism. t 0.8 percent in May, 12-month job growth in financial services was weighed down by weakness across the board in commercial banking, securities and insurance. Despite its lack of net growth, the FIRE sector continues to be a dominant player in leasing activity, accounting for 29.4 percent of square feet leased year to date. The sector was second in activity only to TMI, which accounts for 31.3 percent of 2017 volume. Large tech and, increasingly, the technology divisions of the financial industry remain in growth mode, which is shifting market activity both west and south. In Midtown, 15 of the 20 top leases year to date were west of Fifth venue. The two largest transactions for the quarter were HSBC s renewal at 452 Fifth venue (548,000 square feet) and JPMorgan Chase s expansion of its technology operation at Five Manhattan West (305,365 square feet). Snap Inc. expanded by 121,000 square feet at 229 West 43rd Street (formerly The New York Times Building). While the hedge fund sector goes through a period of dislocation, the larger asset management segment remains active and is taking premium space. Silver Lake, an investment firm that focuses on the technology sector, will follow Steven Cohen s Point72 and asset management giant KKR to Hudson Yards, taking two tower floors at 55 Hudson Yards (58,000 square feet). In addition to these commitments, it has been reported that BlackRock intends to move westward from its current Plaza District address to anchor 50 Hudson Yards, occupying approximately 850,000 square feet. West Side and now Far West Side locations have become more desirable for asset managers and other high-end financial services tenants due to the fact that many principals and employees live in Central Park West, Hell s Kitchen, Chelsea and other adjacent neighborhoods. The nearby talent pool also continues to grow with thousands of residential units recently completed or in development and amenities parks, retail and cultural facilities in the pipeline.

3 3 In Midtown South, non-tmi firms signed the largest leases as the market matures and attracts a more diverse, but still creative-leaning (or creative-aspiring) tenant base. In perhaps the biggest news of the quarter, insurance giant etna is expected to move its headquarters from Hartford, Connecticut to a 170,000-square-foot building in Chelsea being developed by Vornado Realty Trust and urora Capital ssociates. s etna places a greater emphasis on technology, the company cited New York s and, no doubt, Midtown South s large talent pool as vital to its future. MC Cosmetics signed for 86,524 square feet at One Soho Square West (233 Spring Street). Harry s relocated to 75 Varick Street, taking 60,000 square feet as the firm relocates its U.S. headquarters from within the submarket. Capital One part of a growing list of financial services tenants attracted to the market expanded at 11 West 19th Street, adding another 52,000 square feet to bring its presence in the building to 130,000 square feet. Demand for new construction and strength in the tech sector will continue to drive the market. Those submarkets most aligned with these trends will outperform. More activity from healthcare and biotech is also expected, as employment in these industries continues to grow. With new and returning blocks still on the horizon, both vacancy and asking rents are likely to remain near current levels through year end. Tristan shby Vice President, Research Director

4 4 Capital Markets overview Manhattan investment sales activity noticeably increased quarter over quarter, highlighted by the transfers of a few premier office towers, but still did not approach the deal flow recorded from 2014 to Total sales volume in the second quarter was $6.0 billion, which represented a 40.2-percent increase above the first quarter, yet still 39.4 percent below the five-year quarterly average. Just 69 deals closed in the second quarter, demonstrating a palpable slowdown compared with the per-quarter average of 110 transactions that closed from 2014 to This decline was attributable to a few trends that persisted from the first quarter. Robust foreign and domestic demand and comparatively few available properties kept pricing and, therefore, the barriers to entry for big-ticket opportunities elevated. Office sales metrics in the second quarter were driven by the high-profile purchases of 245 Park venue by HN Group for $2.2 billion and 85 Broad Street by Ivanhoe Cambridge and Callahan Capital Partners for $652 million. s a result, the office segment accounted for 67.6 percent of total dollar volume in the second quarter the highest share since the fourth quarter of The Fed expectedly increased the target federal funds rate from 100 to 125 basis points in June. While this would hypothetically put upward pressure on risk-free rates, the 10-year Treasury rate benchmark remained steady as the 2.31 percent rate as of June 30 represented a decline of 14 basis points from the beginning of This reflects the market s expectation of a conservative 2.0 percent long-term inflation rate while strong national employment conditions endure. These mixed messages pointed to increasing pessimism that the Fed would enact another rate hike by year-end Regardless, the spread between Manhattan property yields and risk-free rates is expected to be sustained in the near term. Barring an unforeseen influx of new availabilities, sales activity in 2017 is not expected to approach the historically high levels recorded in 2015 and Thirteen deals totaling $3.5 billion were under contract at the end of the second quarter, though several additional high-profile partial- and full-interest office properties were actively being marketed. In the event these transactions close, office sector investment volume in 2017 would remain healthy; however, all other property types will likely post noticeably lower year-over-year dollar volumes, continuing a 2016 trend. Overseas investors were particularly bullish in the first half of 2017, accounting for 52.1 percent of total Manhattan sales volume across all property sectors and a sizable 69.4 percent of office sales volume. Foreign capital participated in five of the top six office transactions in the first half of Recapitalizations amounted to $1.9 billion of office sales in the first half of 2017, with foreign capital accounting for 54.6 percent of those transactions by dollar volume. nthony Ledesma Managing Director Glenn Tolchin Managing Director Yoav Oelsner Managing Director

5 5 New York property clock Midtown South Midtown, Downtown Peaking market Falling market Rising market Stabilizing market Clock description This diagram illustrates our estimate of the location of each prime office market within its individual rental cycle at the end of the quarter. Markets can move around the clock at different speeds and directions. The diagram is a convenient method of comparing the relative position of markets in their rental cycle. The position is not necessarily representative of investment or development market prospects. The position refers to prime face rental values. Q positions Midtown: handful of large, high-profile transactions in the pipeline will close by year end, keeping activity at moderate levels. The greater concern is future demand and a growing supply of new and returning blocks. Many of the current transactions will result in smaller square-feet-per-employee ratios. With less demand from traditional services, look for some assets to be repositioned for the growing healthcare and biotech industries. Midtown South: Several deliveries are slated for the latter half of this year, but vacancy will remain low because of the relatively small size of these new developments. With vacancy dropping this quarter, Midtown South continues to be one of the tightest markets in the country. Downtown: Strong demand for new product suggests that near-term absorption of 3 World Trade Center is likely, especially considering 90 percent of Downtown absorption since 2014 has taken place in the World Trade Center submarket. s Hudson Yards and Manhattan West fill to near capacity, large tenants are increasingly considering the World Trade Center.

6 6 New York market definitions The Manhattan market is comprised of three major submarkets: Midtown, Midtown South and Downtown. These markets are further divided into five, five and four submarkets, respectively. Midtown submarkets: Columbus Circle, Grand Central, Penn Plaza/Garment District, Plaza District, Times Square Midtown South submarkets: Chelsea, Gramercy Park, Greenwich Village, Hudson Square, SoHo Downtown submarkets: Financial District, TriBeCa/City Hall, World Trade Center, Water Street Corridor

7 7 New York space statistics Current inventory (SF) Under construction (SF) YTD completion (SF) Overall net absorption (SF) YTD overall net absorption (SF) YTD overall net absorption (% of inventory) Overall vacancy Overall asking rent (gross $ PSF) Midtown Columbus Circle 23,847, ,276-92, % 8.1% $70.75 Grand Central 71,883,891 2,595, , , % 11.0% $68.18 Penn Plaza/Garment District 47,583,157 6,256, ,399-24, % 10.1% $63.17 Plaza District 101,920, , , , % 11.6% $88.54 Times Square 40,223, , , % 10.5% $72.67 Midtown market totals 285,459,442 9,521, , , % 10.8% $75.78 Midtown South Chelsea 23,121, , ,004-14, , % 9.7% $77.51 Gramercy Park 21,572, , , , % 5.5% $73.65 Greenwich Village 5,684,534 34,170 65,500-16,326-97, % 4.4% $83.03 Hudson Square 10,646, , , % 9.8% $75.87 SoHo 4,735, , ,293-92, % 15.0% $78.08 Midtown South market totals 65,761,400 1,184, , , , % 8.2% $76.66 Downtown Financial District 37,832, , , % 11.4% $52.64 TriBeCa/City Hall 17,839, ,486 70, % 7.3% $51.71 Water Street Corridor 23,000, , , % 10.7% $54.48 World Trade Center 21,264,366 2,861, , , % 17.1% $81.07 Downtown market totals 99,936,996 2,861, ,510 1,114, % 11.7% $61.77 Market totals 451,157,838 13,566, , , , % 10.6% $72.46

8 8 Midtown

9 9 Midtown boundaries Columbus Circle South of West 66th Street, west of Central Park West and venue of the mericas, north of West 50th Street and east of the Hudson River. Grand Central South of East 47th Street, north of East 30th Street and east of Fifth venue. Plaza District South of East 65th Street, west of the East River, north of 47th Street and east of venue of the mericas. Times Square South of West 50th Street, west of venue of the mericas, north of West 40th Street and east of the Hudson River. Penn Plaza / Garment District South of 40th Street, west of Fifth venue, north of 30th Street and east of the Hudson River.

10 10 Quarter in review Midtown Class vacancy dropped from 11.5 percent to 11.2 percent in the second quarter, largely as a result of new leasing in the burgeoning Hudson Yards/Manhattan West district. lthough asking rents have largely been flat for more than a year with the exception of Hudson Yards and Manhattan West the average Midtown Class asking rent rose to $83.19 from $82.38 per square foot in the last quarter, as newer and higher-quality product came to market. Strong activity west of Fifth venue drove leasing in the second quarter, as many tenants are opting for new construction and a West Side location. In fact, 15 of the top 20 leases in Midtown year to date have been west of Fifth venue. The largest lease of the quarter was HSBC s renewal at 452 Fifth venue for 548,000 square feet in the popular Bryant Park district. Further west, JPMorgan Chase expanded its technology division by 305,365 square feet at Five Manhattan West, which has become a TMI favorite with its large floorplates and high ceilings. The law firm Cooley preleased 131,000 square feet at 55 Hudson Yards, and Intersection, the urban technology company backed by lphabet, leased 67,058 square feet at 10 Hudson Yards. nother law firm, McKool Smith, will join Skadden at One Manhattan West, taking 64,120 square feet in the tower. Snap Inc. expanded and renewed 121,000 square feet at 229 West 43rd Street, formerly The New York Times Building, which has also attracted several technology tenants. lthough the trend this year has been westward, that could reverse in the coming quarters as major changes come to the Plaza District. The success of 280 Park venue has proven that tenants will pay a premium for renovated properties in prime locations. Further up the avenue, construction continues at 425 Park venue, which is being redeveloped as a Trophy-quality asset with a design by Lord Norman Foster. t 601 Lexington venue, Boston Properties is reimagining the atrium as an urban food hub with an eye toward attracting millennials and other foodies. Neighboring 399 Park venue will be getting an updated curtain wall. While important to the submarket s long-term viability, many of these renovations have been accompanied by higher vacancies in the near term. Since mid-year 2016, the Plaza District Trophy vacancy rate has increased to 10.9 percent from 9.5 percent. Submarket boundaries map Key market indicators Q Stock Overall net absorption Midtown 285,459,442 SF -188,059 SF Overall vacancy rate 10.8% verage asking rent Under construction Market outlook $75.78 PSF 9,521,245 SF handful of large, high-profile transactions in the pipeline from a range of industries will close by year end, keeping activity at moderate levels. The greater concern for Midtown is future demand and a growing supply of new and returning blocks. Many of the current transactions will result in smaller square-feet-peremployee ratios. Job growth in financial and legal services historically the two largest drivers of demand for Midtown Class space has been lackluster. t 0.8 percent in May, 12-month job growth in financial services was weighed down by across-the-board weakness in commercial banking, securities and insurance. With less demand from traditional services, look for some assets, especially east of Park venue, to be repositioned for the growing healthcare and biotech industries.

11 11 Midtown verage rental rates PSF (Class vs. Class B) Overall new deliveries/overall net absorption/ overall vacancy rates PSF $ $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Class rental rate Class B rental rate Q SF in millions New deliveries YTD Vacancy Class YTD Net absorption YTD Vacancy Class B YTD Q % 12% 8% 4% 0% Significant lease transactions HSBC Bank 452 Fifth venue Class 548,000 SF Large availabilities 3 Hudson Boulevard Class 1,869,500 SF JPMorgan Chase Five Manhattan West Class 305,365 SF One Manhattan West (450 West 33rd Street) Class 695,635 SF Mizuho mericas 1271 venue of the mericas Class 148,000 SF 390 Madison venue Class 640,117 SF Cooley 55 Hudson Yards Class 131,000 SF One Manhattan West (450 West 33rd Street) Class 618,532 SF Snap Inc. 229 West 43rd Street Class 121,000 SF Recent sales transactions 825 Eighth venue 2,049,618 SF Class $671 PSF 245 Park venue 1,778,249 SF Class $1,243 PSF

12 12 Midtown South

13 13 Midtown South boundaries Chelsea South of 30th Street, west of Fifth venue, north of 14th Street and east of the Hudson River. Gramercy Park South of 30th Street, west of the East River, north of 14th Street and east of Fifth venue. Hudson Square South of 14th Street, west of venue of the mericas, north of Canal Street and east of the Hudson River. SoHo South of Houston Street, west of the East River, north of Canal Street and east of venue of the mericas. Greenwich Village North of Houston Street, south of 14th Street, west of the East River and east of venue of the mericas.

14 14 Midtown South Quarter in review Submarket boundaries map ctivity in Midtown South increased in the second quarter, led by non-tmi firms, which drove the Class vacancy downward 70 percentage points to 8.8 percent. Overall vacancy dropped 20 points to 8.2 percent. Non-TMI firms signed the largest leases, a trend we have been seeing since the start of the year. The New York City Human Resources dministration (HR) signed the largest lease year to date, a 250,000-square-foot renewal at 109 East 16th Street. MC Cosmetics signed for 86,524 square feet at One Soho Square West (233 Spring Street), taking the top four floors, including the newly added glass penthouses and roof deck. Harry s relocated to 75 Varick Street, taking 60,000 square feet, as the firm relocates its U.S. headquarters from within the submarket. Capital One expanded at 11 West 19th Street, adding on another 52,000 square feet to bring its presence in the building to 130,000 square feet. Late in the quarter, insurance company etna announced it would move its headquarters from Hartford, Connecticut to a new site in Chelsea being developed by Vornado Realty Trust and urora Capital ssociates. Tech leasing activity in Midtown South continued, but at a smaller scale when compared with other industries, with tech giant Google as the lone exception. Google Meatpacking District s largest tenant expanded by 60,000 square feet at 85 Tenth venue, bringing its total occupancy in the building to 240,000 square feet. From its peak in the second quarter of 2014, Midtown South tech leasing declined by nearly 80 percent this second quarter. In similar fashion, tech venture funding streams in New York City continue to temper each quarter from a high of $2 billion in the third quarter of 2015 to about $900 million in the first quarter of Key market indicators Q Stock 65,761,400 SF Overall net absorption 110,956 SF Overall vacancy rate 8.2% verage asking rent $76.66 SF Under construction 1,184,229 SF Only one lease in excess of $100 per square foot was signed this quarter, compared with five in the last quarter. Overall asking rents stayed put at $76.66 per square foot, while Class rents increased just over a dollar during the quarter to $84.51 per square foot, leading Midtown South to surpass Midtown as the most expensive market in New York City. Market outlook Year to date, two renovation projects have been delivered 0 Bond Street and 413 West 14th Street with 48 percent of the space preleased. Several deliveries are slated for the latter half of this year, but vacancy will remain low because of the relatively small size of these new developments. With vacancy dropping this quarter, Midtown South continues to be one of the tightest markets in the country.

15 15 Midtown South verage rental rates (Class vs. Class B) Overall new deliveries/overall net absorption/ overall vacancy rates $90.00 $80.00 $70.00 Class rental rate Class B rental rate New deliveries YTD Vacancy Class YTD Net absorption YTD Vacancy Class B YTD 12% 10% PSF $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 SF in millions % 6% 4% 2% $ Q Q % Significant lease transactions NYC Human Resources dministration 109 East 16th Street MC Cosmetics 233 Spring Street (One Soho Square West) Sequential Brands 601 West 26th Street Harry s 75 Varick Street Google 85 Tenth venue Class B 249,491 SF Class 86,524 SF Class 63,278 SF Class 60,000 SF Class 60,000 SF Large availabilities 375 Hudson Street Class 281,339 SF 601 West 26th Street Class 254,516 SF 150 Fifth venue Class 212,500 SF 512 West 22nd Street Class 174,121 SF 61 Ninth venue Class 141,736 SF Recent sales transactions 95 Morton Street 217,729 SF Class B $946 PSF

16 16 Downtown

17 17 Downtown boundaries TriBeCa/City Hall South of Canal Street, west of the East River and Pearl Street, north of nn Street and east of West Street. World Trade Center South of Vesey Street, but inclusive of 7 World Trade Center, west of Trinity Place, north of lbany Street and east of the Hudson River. Financial District South of nn Street, west of Pearl Street, east of the Hudson River, south of lbany Street and east of Trinity Street. Water Street Corridor South of the Brooklyn Bridge, west of the East River and east of Pearl Street.

18 18 Quarter in review While second-quarter leasing in Lower Manhattan did not match the near-record pace set in the first quarter of the year, the leases that were signed highlighted Downtown s bread and butter : value and transportation. The largest lease of the quarter, a 214,000-square-foot relocation to 375 Pearl Street by the New York City Human Resources dministration (HR), speaks to the relative consistency of government leasing in the market. Driven by competitive pricing and proximity to City Hall, the HR lease represents the second large-block commitment by a government agency to the renovated 375 Pearl Street in the last 12 months. One Liberty Plaza, which boasts excellent proximity to the Fulton Street subway station, continues to lease up space at an impressive clip. Business Insider recently signed for approximately 90,000 square feet across the eighth and ninth floors in a relocation from Midtown South. The digital media firm joins New von LLC and on Insurance in signing leases at the 2.3-million-square-foot tower in The three leases accounted for roughly 385,000 square feet of positive absorption for the Financial District submarket, as New von and on relocated from Midtown and the Water Street Corridor, respectively. Class asking rents across the Downtown market increased 11.7 percent quarter over quarter, from $60.79 to $67.91 per square foot. The increase was due in large part to roughly 1.7 million square feet of available space at the under-construction 3 World Trade Center. The 2.9-million-square-foot tower, expected to deliver in the second quarter of 2018, has average rents nearing $90.00 per square foot. It is worth noting that by removing the availability at 3 World Trade Center, Class rents would have shown moderate growth of just 1.2 percent during the quarter. Downtown Submarket boundaries map Key market indicators Q Stock 99,936,996 SF Overall net absorption 377,510 SF Overall vacancy rate 11.7% verage asking rent $61.77 PSF Under construction 2,861,402 SF Market outlook Downtown s overall vacancy rate increased 130 basis points in the second quarter to 11.7 percent, mainly the result of the addition of 3 World Trade Center. While this large block of premier space has skewed Downtown statistics for the moment, strong demand for new product suggests that near-term absorption of the space is likely, especially considering 90 percent of Downtown absorption since 2014 has taken place in the World Trade Center submarket. s Hudson Yards and Manhattan West fill to near capacity, large tenants are increasingly considering the World Trade Center.

19 19 Downtown verage rental rates (Class vs. Class B) Overall new deliveries/overall net absorption/ overall vacancy rates PSF $65.00 $60.00 $55.00 $50.00 $45.00 $40.00 $35.00 Class rental rate Class B rental rate SF in millions New deliveries YTD Vacancy Class YTD Net absorption YTD Vacancy Class B YTD 18% 16% 14% 12% 10% 8% $ % $ Q Q % Significant lease transactions NYC Human Resources dministration 375 Pearl Street Business Insider One Liberty Plaza Serendipity Labs 28 Liberty Street Class B 214,000 SF Class 90,000 SF Class 34,000 SF Large availabilities 2 World Trade Center Class 2,400,256 SF 3 World Trade Center Class 1,846,843 SF 180 Maiden Lane Class 621,771 SF United Healthcare 77 Water Street Class 30,059 SF One World Trade Center Class 594,321 SF Recent sales transactions 85 Broad Street 1,119,813 SF Class $652 PSF

20 20 ppendix Contiguous space Manhattan new construction Manhattan select sales Glossary

21 Midtown buildings with large contiguous blocks of space B B B B B B B B 37 blocks: 7,199,902 SF 390 Madison venue 640,117 SF 75 Rockefeller Plaza 446,087 SF 1155 venue of the mericas 404,009 SF 9 West 57th Street 278,200 SF 5 Manhattan West (450 West 33rd Street) 265,338 SF 237 Park venue 230,566 SF 4 Times Square 225,677 SF 777 Third venue 221,850 SF 399 Park venue 218,351 SF 575 Fifth venue 212,136 SF 1633 Broadway 212,122 SF 485 Lexington venue 210,373 SF 65 East 55th Street 191,628 SF 601 Lexington venue 188,848 SF 135 West 50th Street 183,948 SF 237 Park venue 183,415 SF 1400 Broadway 179,467 SF 605 Third venue 175,653 SF 335 Madison venue 172,602 SF 31 West 52nd Street 169,916 SF 1345 venue of the mericas 169,226 SF 110 East 60th Street 156,917 SF 620 Eighth venue 156,766 SF 787 Eleventh venue 155,191 SF 405 Lexington venue 145,813 SF 1325 venue of the mericas 144,540 SF 520 Madison venue 140,466 SF 733 Third venue 131,554 SF 717 Fifth venue 125,616 SF 4 Times Square 123,283 SF 1440 Broadway 112,541 SF 11 Times Square 108,923 SF 135 West 50th Street 106,250 SF 132 West 31st Street 103,996 SF West 33rd Street 103,343 SF 530 Fifth venue 103,068 SF 1501 Broadway 102,106 SF Contiguous blocks greater than 100,000 square feet

22 Midtown South buildings with large contiguous blocks of space B 7 blocks: 1,008,792 SF 601 West 26th Street 254,516 SF 512 West 22nd Street 174,121 SF 61 Ninth venue 141,736 SF 412 West 15th Street 129,666 SF 287 Park venue South 106,453 SF 315 Park venue South 102,300 SF Eleventh venue 100,000 SF Contiguous blocks greater than 100,000 square feet

23 Downtown buildings with large contiguous blocks of space B B B B 17 blocks: 3,681,415 SF 180 Maiden Lane 621,771 SF One World Trade Center 594,321 SF 375 Pearl Street 327,212 SF 55 Water Street 270,944 SF One Liberty Plaza 218,486 SF 195 Broadway 205,219 SF 32 Old Slip 193,118 SF 28 Liberty Street 170,583 SF 32 Old Slip 153,500 SF 300 Vesey Street 150,580 SF 17 Battery Place North 121,189 SF 60 Hudson Street 120,000 SF One State Street 118,489 SF 32 Old Slip 105,601 SF 28 Liberty Street 104,827 SF 28 Liberty Street 103,228 SF One New York Plaza 102,347 SF Contiguous blocks greater than 100,000 square feet

24 Manhattan under construction Market/building Class Developer/owner RB Pre-leased Major tenants signed Delivery date Midtown 30 Hudson Yards Trophy Related Companies 2,600,000 SF 100.0% Time Warner; KKR; Wells Fargo; Related; DNB 2019 One Manhattan West Trophy Brookfield Properties 2,216,609 SF 40.7% Skadden; NHL 2019 One Vanderbilt Trophy SL Green Realty 1,732,955 SF 11.5% TD Bank Hudson Yards Trophy Related Companies/Mitsui Fudosan 1,556,136 SF 43.8% Boies, Schiller; Marketxess; Milbank Madison venue Trophy Clarion Partners 862,154 SF 24.0% Hogan Lovells Park venue Trophy L&L Holding Company/GreenOak Real Estate 670,000 SF 29.9% Citadel 2018 Midtown South Pier West 22nd Street RXR/Youngwoo Vornado Realty Trust/lbanese Organization 250,000 SF 174,222 SF 100.0% 0.0% Google Ninth venue Vornado Realty Trust/urora Capital ssociates 167,170 SF 12.8% Starbucks (retail) West 15th Street Rockpoint Group/Highgate Holdings/Meilman Family Real Estate 144,273 SF 0.0% West 26th Street Savanna 128,367 SF 47.7% venues: The World School West 14th Street Rockpoint Group/Highgate Holdings/Meilman Family Real Estate 113,004 SF 0.0% Park venue South CL Investment Group 106,453 SF 0.0% 2018 Downtown 3 World Trade Center Trophy Silverstein Properties 2,861,402 SF 37.0% GroupM 2018 CBD totals 13,390,233 SF 44.3%

25 Manhattan select sales Downtown 85 Broad Street Midtown South 95 Morton Street Class Class B RB 1,119,813 RB 217,729 SF Buyer Ivanhoe Capital/Callahan Capital Partners Buyer RFR Realty Seller MetLife JV Beacon Capital Partners Seller Brickman ssociates Price PSF $582 Date sold May 2017 Price PSF $946 Date sold pril 2017 Midtown 825 Eighth venue (49.90% Interest) Midtown 245 Park venue Class Class RB 2,049,618 SF RB 1,778,249 SF Buyer New York REIT Buyer HN Group Seller George Comfort & Sons/DR dvisors/rcg Longview Seller Brookfield Properties/Clarion Partners obo NYSTRS Price PSF $671 Date sold June 2017 Price PSF $1,243 Date sold May 2017

26 Glossary Common real estate terms ctive requirements Tenants actively seeking space in the market. verage asking rent Quoted at a gross price exclusive of tenant electricity based on a weighted average of available space. vailable space Existing space that is being actively marketed for immediate or future occupancy, including both direct and sublease space. Buildout The cost of configuring and finishing new space in accordance with a tenant s specifications. Build to suit method of leasing property whereby the landlord builds a new building in accordance with a tenant s specifications. Capital improvement ny major physical development or redevelopment to a property that extends the life of the property. Examples include upgrading the elevators, replacement of the roof and renovations of the lobby. Class Building classification system broken down by Trophy, Class, B and C buildings. Location, building amenities, mechanical/hvc systems, age of building and tenant roster are some of the components that determine an office building's class. Concessions Cash expended by the landlord in the form of rent abatement, build-out allowance or other payments to induce the tenant to sign a lease. The level of concessions fluctuates with supply and demand conditions in the market and is up for negotiation in a similar fashion to rental rates. Contiguous space djoining office space. Delivered buildings Buildings that have completed construction and are ready for tenant buildout. May or may not yet have a Certificate of Occupancy. Direct rent Rents quoted directly from the landlord on vacant space. Effective rent The rental rate actually achieved by the landlord or tenant after deducting the value of concessions from the base rental rate paid; usually expressed as an average rate over the term of the lease. Face rental rate The asking or nominal rental rate published by the landlord. Gross leases The quoted rents include tax and operating costs (property taxes, insurance and maintenance expenses). Hard cost The cost of actually constructing property improvements. Indirect (soft) costs Development costs other than material and labor costs, which are directly related to the construction of improvements, including administrative and office expenses, commissions, architectural, engineering and financing costs. Lease legally binding agreement whereby the owner of real property (i.e., landlord) gives the right of possession to another (i.e., tenant) for a specified period of time (i.e., term) and for a specified consideration (i.e., rent). Leased space Existing space under contract, regardless of if it is occupied; also includes subleased space. NNN leases The quoted rents do not include tax and operating costs (property taxes, insurance and maintenance expenses). Net absorption Net change in occupied space between two dates measured as square footage. (i.e., a measure of the total square feet leased over a period of time taking into consideration office space vacated in the same area during the same period). Occupied space Total supply minus available space. Operating expense The actual costs associated with operating a property, including maintenance, repairs, management, utilities, taxes and insurance.

27 Glossary Common real estate terms (cont d) Preleased space Space that has been leased prior to construction completion date or Certificate of Occupancy date. Proposed construction Buildings are proposed when permits are in place, site is being actively marketed, but significant base building has not yet commenced. Proposed asking rents are not included in market calculations. Shell space The interior condition of the tenant's usable square footage when it is without improvements or finishes. Shell construction typically denotes the floor, windows, walls and roof of an enclosed premises and may include some HVC, electrical or plumbing improvements but not demising walls or interior space partitioning. Sublease space Leased space that is being actively marketed by the tenant under contract to another party. Tenant at will One who holds possession of premises by permission of the owner or landlord, but without agreement for a fixed term. Tenant improvement allowance (TI) Improvements to land or buildings to meet the needs of tenants. May be new improvements or remodeling, and may be paid for by the landlord, the tenant or shared. Total supply The entire area of an office building comprised of both usable space and an allocated portion of the common area. Turnkey project project in which the developer is responsible for the total completion of a building (including interior design and construction) or demised premises to the customized requirements of a future owner or tenant. Under construction Buildings are under construction when significant work is under way from ground-up development (i.e., steel is going up). Under renovation/rehab Buildings are under renovation/rehab when significant base building renovation is under way. Vacant space Direct existing space being actively marketed for immediate occupancy as of the survey date, not including sublease space.

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