Steady activity in the office market

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1 Research & Forecast Report MINNEAPOLIS-ST. PAUL OFFICE Quarter Steady activity in the office market Rising taxes, operating expenses push up leasing costs Vacancy and absorption trends The vacancy rate in the Minneapolis-St. Paul office market is 13.5 percent, which is unchanged since Quarter One but down from 13.7 percent at Year-End There was 90,643 square feet of positive absorption that combined with inventory adjustments, including the removal of the 60,000-square-foot Jax building and the 110,000-square-foot Degree of Honor building in the St. Paul CBD, leading to no reduction in the overall vacancy rate. Both the Jax Building and Degree of Honor building are the latest office properties in the CBD to be slated for apartments. Year-to-date absorption is 203,012 square feet. Market Indicators Relative to prior period Q VACANCY NET ABSORPTION RENTAL RATE Market Activity Tenants continue to be attracted to properties with access to amenities and transit that appeal to potential employees. Businesses are using their office space to create environments that aid in the recruitment of top talent. Areas of strength in the market include the North Loop neighborhood of the Minneapolis CBD, the West End in St. Louis Park, and properties along France Avenue in the Southwest submarket. These areas have a concentration of restaurants, retail, and entertainment options that appeal to tenants in this market. Vacancy Percent Vacant 20% 16.3% 15.2% 15% 10% 5% % 16.8% 16.7% 16.1% 14.9% 15.6% 14.2% 13.7% % 2016 Q2 Wells Fargo has begun its move from various locations in the CBD into its new office towers at Downtown East. The two 550,000-square-foot towers were completed this quarter, and the bank will be vacating from multi-tenant space in the CBD. There are plans for some of that space to be converted into apartments, including the 313,000-square-foot Northstar East office building. Lease terms continue to lengthen as they are favored by both tenants and landlords in order to spread moving costs over longer periods of time. Lease terms of 10 years or longer are becoming more common as opposed to five-to-seven-year terms. SF Absorbed Net Absorption 2,000,000 1,000,000 0 (1,000,000) (2,000,000) 966, , ,779 (1,661,963) (312,099) 585, ,934 1,025, , , , Q2

2 Ever-Increasing Overall Leasing Costs Several factors are contributing to increasing leasing costs including a significant number of properties selling at premium prices. These sale prices lead to rising assessed values and higher tax bills for owners. It then influences assessors to increase values on neighboring comparable properties, and the resulting higher taxes get passed through to tenants. In addition to rising taxes, operating costs are increasing as landlords upgrade common areas to include popular amenities. The demand for collaborative workplaces that help to attract and retain talent is driving these upgrades. The expense of building rooftop decks, fitness centers, bike-friendly spaces, fire pits, and conference rooms is charged to tenants through higher operating costs per square foot. The significant amount of construction occurring in the Minneapolis-St. Paul area, including apartments and the new Vikings stadium, are putting a strain on both labor and materials availability, pushing up tenant improvement costs. This is on top of growing expenditures on furniture and design fees as companies implement new workplace strategies that call for open, collaborative spaces. Q2 Vacancy Percent Vacant % Airport/South of the River Q2 Absorption SF Absorbed 80,000 40, % Minneapolis CBD 14.9% 13.4% 14.5% Southwest St. Paul CBD (14,317) (40,000) (33,679) (43,182) (48,312) (80,000) Airport/South of the River Minneapolis CBD Southwest St. Paul CBD St. Paul Suburban 33,569 St. Paul Suburban 10.1% West 52,549 West 47, % Northwest Northwest Significant Lease and Sales Activity Lease Activity TENANT PROPERTY ADDRESS CITY SF SUBMARKET Stinson Leonard Street LLP Fifty South Sixth 50 6th St S Minneapolis 105,000 Minneapolis CBD Cray The MOA 2001 Lindau Ln Bloomington 89,481 Southeast Archdiocese of St Paul & Mpls Historic Building 21 at Beacon Bluff 777 Forest St Saint Paul 75,000 Northeast Code Washington Square 100 S Washington Ave Minneapolis 67,700 Minneapolis CBD Bank of America IDS Center 80 S 8th St Minneapolis 52,706 Minneapolis CBD Clark Engineering Hwy Hwy 55 Plymouth 26,000 Northwest Ascend Learning 510 Marquette Ave 510 Marquette Ave Minneapolis 24,669 Minneapolis CBD Wiley and Sons 400 Metropoint 400 Hwy 19 S Saint Louis Park 22,295 West Aerotek Shoreview Corporate Center 4000 Lexington Ave N Shoreview 20,712 Northeast Pour House Lumber Exchange Building 10 S 5th St Minneapolis 17,000 Minneapolis CBD Johnson Becker UBS Plaza 444 Cedar St Saint Paul 16,255 St Paul CBD Liberty Mutual Crescent Ridge Corporate Center I Wayzata Blvd Minnetonka 15,626 West Met Council 375 Jackson St 375 Jackson St Saint Paul 15,269 St Paul CBD PRTS Common Element Carriage Station Professional Bldg th St Lake Elmo 13,000 Northeast Granite City 3600 Northland Center 3600 W American Blvd Bloomington 10,853 Southeast Ambient Consulting Crescent Ridge II Wayzata Blvd Minnetonka 10,012 West TeamQuest Kickernick Building 416 1st Ave N Minneapolis 10,000 Minneapolis CBD 2 Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International

3 Sales Activity PROPERTY NAME ADDRESS CITY BUYER SELLLER PRICE PRICE PSF SF Plaza Seven Office Tower 45 S 7th St Minneapolis Franklin Street Properties Angelo Gordon JV CCRP $82,000,000 $ ,796 Colonial Warehouse 212 3rd Ave N Minneapolis Excelsior Group T Denny Sanford $30,000,000 $ , Flying Cloud Drive 7500 Flying Cloud Dr Eden Prairie Excelsior Group Edina Corporate Center 4700 W 77th St Edina Roseville West 2277 Hwy 36 W Roseville Waters Lone Oak Pkwy Western National Mutual Insurance Co Team Properties Inc; Mark Saliterman Tamarack Hills F Bielenberg Dr Woodbury Brad Malecha Jax Building 247 4th St E Saint Paul Vor Development 300 Industrial Blvd NE 300 Industrial Blvd NE Glazier Ave Glazier Ave Apple Valley Wings Financial CU 226 Summit Ave 226 Summit Ave Saint Paul Donald Regan Hiawatha Office Center 3355 Hiawatha Ave Minneapolis 3000 Center Pointe Dr 3000 Center Pointe Dr Cornerstone RE Advisers $26,040,000 $ ,780 Invesco RE $11,148,860 $91 122,689 Life Insurance Company of the Southwest $6,875,000 $80 86,381 Eagan Lone Oak LLC Welsh Companies $5,885,000 $64 91,595 KFI Commercial LLC Carol Sundberg & Rudy Sundberg $5,682,639 $280 20,288 $4,100,000 $68 60,000 Minneapolis Charter Schools Dev't Corp John Francis $3,600,000 $55 65,000 Twin Cities Community Land Bank Lighthouse Management Group Inc Archdiocese of St. Paul and Minneapolis Hillcrest Development $3,450,000 $58 60,000 $3,283,333 $55 59,579 $3,133,272 $107 29,364 Roseville Centerpoint Holdings LLC David L Vadis $3,000,000 $117 25, Flying Cloud Drive 6400 Flying Cloud Dr Eden Prairie S&S Development Corp John Trefethen $2,850,000 $89 32,000 Highland Bank Court 1FL-2FL 811 Lasalle Ave Minneapolis Hempel Properties The Wall Companies $2,625,000 $44 60, Nathan Lane 5095 Nathan Ln Plymouth Willow Properties 7 LLC Lone Star Funds $1,395,903 $68 20,528 Franklin Street Properties purchased Plaza Seven for $82 million, which makes it the largest commercial property transaction so far this year. Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International 3

4 Lobby waterfall feature at Crown Roller Mill in Downtown Minneapolis. Spotlight Trends: Identifying Tenant Hotspots Properties that offer the right mix of amenities, access to transit, and competitive rates hit the mark If you build it, they will come, might justify a baseball field in the middle of Iowa, but for office space, tenants are looking for amenities, access to mass transit, and competitive economics. We are finding that there is a mix of key elements tenants are measuring as they look at office space: > Amenities and property features that grab tenants interest during property tours. > Access to mass transit. > Price - the economics of the transaction must be on par with other properties in the market. Locations in the Minneapolis-St. Paul office market that meet most or all criteria of on-site amenities and access to transit as well as boast a walkable, vibrant locale include the MOA, Minneapolis CBD, and the North Loop, West End and France Avenue Corridor. Lands Cray After an extensive search of office options throughout the metro area, Cray Inc. is moving from the St. Paul CBD to MOA in Bloomington, where they will lease 87,500 square feet of the 170,000 square foot building. Cray made their choice due to close proximity to the airport, free parking, two full-service hotels, access to mass transit, and a complement of retail options including numerous restaurants. Minneapolis CBD In the core Minneapolis CBD, skyway-connected properties with upgraded amenities and easy access to transit and/or parking are in demand. Companies that have chosen to relocate from the suburbs to the CBD in recent years include Weber Shandwick, Aimia, Varde Partners, Education Credit Management, and Coyote Logistics. Amazon recently chose 100 Fifth Street Towers in the Minneapolis CBD to locate a 100-person technology-development center. West End & France Avenue Other areas that are seeing strong demand include the West End at Park Place Boulevard and Interstate 394 in St. Louis Park, and the France Avenue Corridor in Edina. These areas feature concentrations of restaurant and retail amenities. The growing West End area features the Lifestyle Center Shops at West End. Along France Avenue, there is a major hospital and significant concentration of medical tenants in addition to Southdale Center, a regional shopping mall. While strong on the amenity front, there is limited access to mass transit at both the West End and along France Avenue. 4 Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International

5 Spotlight Trends: Identifying Tenant Hotspots (continued) North Loop With its low vacancy and popular locale, the North Loop has drawn the notice of developers. The vacancy rate is 6.8 percent, compared to 12.7 (UPDATE FOR Q2) percent for the entire Minneapolis CBD. One of the most notable North Loop developments is T3, a 210,000-squarefoot speculative office building from Hines. T3, and Mosaic in Uptown are the only multi-tenant office properties constructed speculatively so far in this office development cycle. There is an additional 870,000 square feet of office space in four buildings planned in the North Loop. Challenges facing office properties in the neighborhood include limited parking and lack of skyway access. > Of the new multi-tenant office construction we are tracking in the North Loop, T3 will have the advantage of being the first to be completed. Hines began construction in November of 2015 on the 210,000-square-foot building that is expected to be completed this fall. The property features wooden construction materials, rather than steel or concrete, to create a historic vibe that fits in with the centuries-old neighborhood. Modern amenities such as collaborative, open floor plans, a rooftop deck, and a fitness center will provide the modern amenities tenants are looking for. > Schafer Richardson is developing a Class A office property a short distance from Target Field Station. They are planning a 11 story, 200,000 square foot building with 4,500 square feet of retail space. The property, located at 700 North 5th Street, will be and currently has a warehouse building on it, which Schafer Richardson plans to tear down. Weather-Rite, an HVAC company, is the only tenant, and their lease expires in > Local developers Ned Adbul and CPM have proposed a 10-story office building on a parking lot immediately south of the Internet Exchange Building they purchased at 419 Washington Avenue North. > United Properties has a 0.67-acre site located at 753 Washington Avenue North, and is planning an office building up to 10 stories and 200,000 square feet. The site is just west of the Loose- Wiles building, which United Properties renovated in United Properties has also been working with Greco, LLC, on potential multifamily developments in the area. > United Properties has another office building in the works in the North Loop with NoLo, a 10-story, 240,000-square-foot planned project near Target Field Station. How to Compete? Owners can add amenities including upgraded common areas, restaurants, bike storage and repair, and communal gathering spaces. Prepared suites and common areas that tenants can walk through will help potential tenants to visualize adaptable, engaging workspaces. The planned Southwest Light Rail Transit project, which will run from downtown Minneapolis through St. Louis Park, Hopkins, Minnetonka, and Eden Prairie and pass in close proximity to Edina, will bolster the ability of some suburban office areas to provide transit access. Preliminary approvals have occurred for the project with construction scheduled to take place between 2017 and 2019 and service to begin in The importance of being open to lease rates that are in line with rates that tenants see as they look throughout the market cannot be overlooked. Key Tenant Requirements: WELLNESS TECHNOLOGY COMMUNITY URBAN ADAPTABLE WALKABLE BIKEABLE ENGAGING FLEXIBLE MIXED-USE SKYWAY ACCESS Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International 5

6 Submarket Summaries Minneapolis CBD > The vacancy rate in the Minneapolis CBD is 13.2 percent, up from 12.7 percent at the first quarter. Absorption was a negative 33,679 square feet. There was no large movement of any tenants during the quarter, but we expect that to change during the third quarter as Wells Fargo moves workers from multi-tenant office space into their new, 1.1 million-square-foot office towers during the third quarter. > Capella Education Co., with its lease expiring in 2018, is considering a move from its namesake tower at 225 South Sixth, where it leases 371,000 square feet. > It was recently announced that Amazon will add office space to its presence in the Minneapolis-St. Paul market by opening a 100-employee technology and development center at Fifth Street Towers. Amazon already has a significant presence in the industrial market here, including an 820,000-squarefoot distribution facility that is under construction in Shakopee, a 142,000-square-foot delivery station in Eagan, a 150,000-square-foot sorting center in Shakopee, and a 50,000-square-foot distribution center in Minneapolis. > Minneapolis law firm Stinson Leonard Street signed a 105,000-square-foot lease at 50 South Sixth where it will relocate from 140,000 square feet at Fifth Street Towers. The company plans a more open, flexible, and digital environment that reflects overall office space use trends in a legal environment. > Shorenstein Properties is selling 33 South Sixth, a 1.6 millionsquare-foot office tower anchored by Target. Peak Pricing > Franklin Street Properties purchased Plaza Seven Office Tower from City Center Realty Partners and Angelo, Gordon & Co. for $82 million, or $251 per square foot, which makes it the largest commercial property transaction so far this year. > This high water mark for the year could be increased with the future sale of the IDS Center. Accesso Partners of Florida has the iconic 1.43 million-square-foot building for sale. > Franklin Street Properties will redevelop the four-story former TCF Building at 801 Marquette. The company had previously discussed building a 50-story tower on the site, but put aside those plans in favor of working on the existing structure. TCF moved its employees from this location and the TCF Tower next door to Plymouth. Franklin Street is upgrading the TCF Tower with modern amenities including adding a fitness center and lobby. > The Northstar Center, a complex of buildings that includes Northstar East and West office buildings, the former Pillsbury office building, a parking ramp, and a Crowne Plaza hotel will also experience the exit of Wells Fargo workers to the Downtown East towers. Renovations are planned, and include converting the 313,000-square-foot East building into apartments. Southwest > The vacancy rate in the Southwest submarket is 14.9 percent, up from 14.7 percent in the first quarter. There was negative absorption of 43,182 square feet. Bluestem Brands Inc. moved out of 93,000 square feet at Superior Office Center in Eden Prairie into the single-tenant Golden Triangle Innovation Center, also in Eden Prairie. > The France Avenue Corridor in the Southwest office submarket is experiencing strong demand, especially compared to areas in the submarket west of Highway 169 along Interstate 494 to Eden Prairie. The vacancy rate along the France Avenue Corridor is 12.2 percent, while west of Highway 169 the vacancy rate is 25.1 percent. Tenants prefer locations with close proximity to amenities such as the abundant restaurants and shopping options available along France Avenue. > Large users looking for space in the market include Prime Therapeutics and Willis Towers Watson. Both have multiple locations throughout the West and Southwest submarkets. The France Avenue Corridor in the Southwest office submarket is experiencing strong demand, especially compared to areas in the submarket west of Highway 169 along Interstate 494. > Western National Insurance purchased the Edina Corporate Center for use as their corporate headquarters. The property is 122,000 square feet, three stories tall, and located at th Street West near Pentagon Park. The company will be vacating its current headquarters property at th Street West, which is 71,000 square feet. Barr Engineering was the former anchor tenant at Edina Corporate Center, but moved its office to One MarketPointe. > The two-building Norman Pointe Office Complex in Bloomington is for sale. Owned by Gramercy Property Trust, the properties total 537,296 square feet and have a visible location along Interstate Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International

7 St. Paul Suburban > The vacancy rate in the St. Paul Suburban market is 14.5 percent, down from 14.8 percent at Quarter One. There was 60,860 square feet of positive absorption, which includes Nystrom & Associates leasing 20,000 square feet at Northpark Corporate Center in Arden Hills. > Land O Lakes is seeking Arden Hills city approval to expand its headquarters at 4001 Lexington Avenue North where it plans to consolidate its 1,800 Minneapolis-St. Paul employees and have room to grow. The existing campus has two buildings totaling 263,000 square feet, and will add a 155,000-square-foot building. > Smiths Medical s former headquarters at 1265 Grey Fox Road in Arden Hills is available for lease or sale. They vacated the 164,888-square-foot building to move into a new headquarters property in Plymouth. Land O Lakes is seeking city approvals to expand its corporate headquarters and consolidate Minneapolis-St. Paul offices while adding another 200 employees. West/NW > The vacancy rate in the West submarket is 10.1 percent which is flat since Quarter One when vacancy was also 10.1 percent. There was 52,549 square feet of absorption. > In the Northwest submarket, vacancy was 15.5 percent, down from 15.6 percent at Quarter One, and absorption was positive 47,571 square feet. > Highlight Center leased 7,500 square feet to a co-working space devoted to sports-related tech companies. Website management software firm Sport Ngin, already a tenant at the property, is teaming up with Rally Ventures to open The Pitch. > Target has its 371,289-square-foot building along Interstate 394 at 3701 Wayzata Boulevard for sale or lease as it moves workers to its Brooklyn Park campus. > The Excelsior Group and Ryan Companies have plans for a 11-story, 315,000-square-foot office building new parking ramp in the growing West End mixed-use area. Ten West End will be marketed both for lease and for investment, and plans are to begin construction in the spring of > Artis Group and Ryan Cos. are also planning an office development along Interstate 394, and have proposed a 14-story building next to the Carlson Towers in Minnetonka. > Direct mail and digital marketing firm Streamworks is moving out of several buildings in Arden Hills to a new 88,000-square-foot building in Blaine. > Select Comfort, maker of the Sleep Number Bed, is looking at other suburban office buildings for its headquarters. It currently leases 159,000 square feet at th Avenue North in Plymouth where its lease expires in > The 59,100-square-foot Ridgeview Office Center in Minnetonka along Interstate 394 is for sale. The Jewish Community Building Corporation purchased the property in Tenants include the Jewish Family & Children s Service, Hadassah Upper Midwest, the Minneapolis Jewish Federation, Levin Family Board Room, New Beginnings, and the Minnesota Jewelry Buyers. > Mortenson Construction is planning to expand at its campus in Golden Valley. The company would like to raze a two-story parking lot and build a new, four-story lot. In addition, they are planning a new 98,000-square-foot office building, adding to the two existing properties they occupy on the site that total 175,000 square feet. Target s 371,289-square-foot building is for sale or lease with plans to move the workers to its Brooklyn Park campus. Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International 7

8 St. Paul CBD > The vacancy rate in the St. Paul CBD submarket is 13.4 percent, down from 13.9 percent at Quarter One. There was 48,132 square feet of absorption for the quarter, with Securian Center, 375 Jackson Street, and Lawson Commons all absorbing space. > The current plan for the former St. Paul Macy s building includes a rooftop Minnesota Wild practice arena, a street-level Walgreens, and space for a brewery and a medical clinic. The rest of the 540,000-square-foot building will become parking. > The Minnesota Department of Human Services is looking for 70,000 to 100,000 square feet, adding to the 407,000-squarefoot office building it occupies at 540 Cedar Street. > The 110,000-square-foot Degree of Honor Building at 325 Cedar Street is going to be redeveloped into apartments by owner Madison Equities the Stencil Group. > After buying the Jax Building in Lowertown for $4.1 million, VoR Development is planning 32 apartments at the 60,000-squarefoot building at 247 East Fourth Street. New owners VoR Development are planning renovation that will include 32-market rate apartments in the 60,000-square-foot building, which was once a haven for nonprofits and artists. Airport/South of River > The vacancy rate in the Airport/South of the River submarket is 13.6 percent, up from 13.4 percent at Quarter Two, with absorption negative at 14,317 square feet. Activity was low, and the negative absorption was due to North American High Speed Rail Group vacating 14,287 square feet at Riverview Office Tower. > A highlight for the submarket was the announcement that Cray Inc. will be the lead tenant at After an extensive search of office options throughout the metro area, the company decided to move from the St. Paul CBD, and will lease 87,500 square feet of the 170,000-square-foot building. Cray made their choice due to close proximity to the airport, free parking, two fullservice hotels, access to mass transit, and a complement of retail options including numerous restaurants. The landed Cray as its lead tenant in the 170,000 square foot speculative building. 8 Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International

9 Market Statistics Submarket Airport/South of the River Total SF Direct Vacant SF % Vacant Direct Sublease Vacant SF % Vacant W/ Sublease Asking Rate Q Absorption YTD Absorption A 1,883, , % 15, % $ ,857 (2,837) B 3,570, , % 82, % $11.66 (28,294) (4,515) C 1,273, , % 52, % $9.18 7,120 17,103 Totals: 6,727, , % 150, % $11.90 (14,317) 9,751 Minneapolis CBD A 13,262,102 1,615, % 161, % $ ,758 68,550 B 10,655,936 1,450, % 266, % $13.92 (10,972) 15,723 C 3,602, , % 23, % $13.49 (39,465) (70,686) Totals: 27,520,668 3,619, % 450, % $14.72 (33,679) 13,587 Southwest A 9,380,521 1,187, % 274, % $16.22 (105,630) (179,445) B 6,162,426 1,186, % 114, % $ ,975 42,193 C 851,675 73, % 0 8.6% $ ,473 7,674 Totals: 16,394,622 2,447, % 388, % $14.44 (43,182) (129,578) St. Paul CBD A 2,128, , % 12, % $ ,022 78,895 B 4,592, , % 20, % $ ,110 70,799 C 639,936 25, % 0 4.0% $ (8,468) Totals: 7,360, , % 32, % $ , ,226 St. Paul Suburban A 2,875, , % 68, % $ ,831 70,408 B 6,294, , % 178, % $11.77 (5,434) 34,347 C 2,165, , % 2, % $ ,172 4,555 Totals: 11,335,274 1,640, % 249, % $ , ,310 West/Northwest A 5,066, , % 41, % $17.42 (1,652) (98,397) B 6,627, , % 10, % $ , ,131 C 2,046, , % 4, % $8.26 (5,922) (29,018) Totals: 13,740,204 1,629, % 56, % $ ,120 58,716 West A 4,038, , % 21, % $19.13 (5,286) (92,686) B 4,543, , % 8, % $ ,378 73,396 C 730,893 47, % 4, % $8.80 1,457 4,031 Totals: 9,312, , % 34, % $ ,549 (15,259) Northwest A 1,028, , % 19, % $ ,634 (5,711) B 2,083, , % 1, % $ , ,735 C 1,315, , % % $7.59 (7,379) (33,049) Totals: 4,427, , % 21, % $ ,571 73,975 Total All Markets A 34,596,613 4,479, % 573, % $15.98 (36,814) (62,826) B 37,902,736 5,555, % 671, % $ , ,678 C 10,579,647 1,200, % 82, % $10.45 (2,622) (78,840) Totals: 83,078,996 11,235, % 1,327, % $ , ,012 The above table is summarized data on multi-tenant office buildings greater than 20,000 square feet. Not included are single-tenant, owner-occupied, medical or government buildings. Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International 9

10 Market Statistics (Expanded Market) Submarket Total SF Direct Vacant SF % Vacant Direct Sublease Vacant SF % Vacant W/ Sublease Asking Rate Q Absorption YTD Absorption Airport/South of the River A 2,538, , % 15, % $ ,370 (2,738) B 5,983, , % 82, % $11.25 (32,929) (720) C 2,600, , % 52, % $9.18 4,911 13,124 Totals: 11,122,438 1,772, % 150, % $12.05 (22,648) 9,666 Minneapolis CBD A 16,512,916 1,744, % 161, % $ ,336,758 1,388,550 B 14,044,460 1,472, % 273, % $13.92 (11,446) 4,831 C 5,525, , % 23, % $13.49 (39,465) (68,015) Totals: 36,083,346 3,770, % 457, % $ ,285,847 1,325,366 Southwest A 13,162,541 1,478, % 312, % $16.20 (106,914) (167,151) B 8,937,324 1,349, % 115, % $ ,085 58,030 C 3,007, , % 8, % $ ,804 (45,739) Totals: 25,107,274 2,986, % 437, % $14.06 (34,025) (154,860) St. Paul CBD A 2,773, , % 12, % $ ,924 78,549 B 5,510, , % 20, % $ ,110 70,799 C 2,810,535 48, % - 1.7% $ (8,468) Totals: 11,095,453 1,009, % 32, % $ , ,880 St. Paul Suburban A 3,727, , % 68, % $ ,819 59,611 B 10,648,921 1,020, % 178, % $ ,381 22,906 C 7,342, , % 8, % $ ,893 4,127 Totals: 21,719,156 1,952, % 255, % $ ,093 86,644 West/Northwest A 9,427, , % 296, % $ ,414 (81,514) B 9,842,380 1,092, % 10, % $ ,273 21,901 C 4,837, , % 4, % $9.84 (13,205) (39,897) Totals: 24,107,596 1,956, % 310, % $ ,482 (99,510) Total All Markets A 48,142,399 5,126, % 866, % $ ,304,371 1,275,307 B 54,967,663 6,217, % 680, % $ , ,747 C 26,125,201 1,401, % 96, % $10.48 (18,062) (144,868) Totals: 129,235,263 12,746, % 1,643, % $ ,434,783 1,308,186 The above table is summarized data on multi- and single-tenant office buildings greater than 10,000 square feet. Owner-occupied properties are also included. Not included are government or medical buildings. 10 Minneapolis-St. Paul Research & Forecast Report Quarter 2 Office Colliers International

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12 554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 $2.5 billion in annual revenue BROKERAGE SERVICES CONTACT: William M. Wardwell SIOR Executive Vice President Brokerage Minneapolis-St. Paul bill.wardwell@colliers.com FOR MORE INFORMATION: Maura Carland Director of Research Minneapolis-St. Paul maura.carland@colliers.com Colliers International Minneapolis-St. Paul 4350 Baker Road, Suite 400 Minnetonka, MN billion square feet under management 16,000 professionals and staff Copyright 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.