The CoStar Office Report. T h i r d Q u a r t e r National Office Market

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1 The CoStar Office Report T h i r d Q u a r t e r

2 Third Quarter 2016 National Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview Inventory & Development Analysis Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance by Class & Submarket Figures at a Glance Grouped by CBD vs Suburban Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions 2016 CoStar Group, Inc. The CoStar Office Report A

3 National Third Quarter 2016 Methodology The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's global database includes approximately 95.6 billion square feet of coverage in 4.4 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate. CoStar regularly opens new markets to expand its geographic coverage which results in varying start dates for historical data. Due to differences in market start dates and a desire to show as long a historical timeframe as possible, only the following markets are included in the historical charts within this report: Atlanta, Austin, Baltimore, Boston, Broward County, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas/Ft Worth, Dayton, Denver, Detroit, East Bay/Oakland, Houston, Indianapolis, Inland Empire (California), Jacksonville (Florida), Kansas City, Long Island (New York), Los Angeles, Memphis, Miami-Dade County, Nashville, Northern New Jersey, Orange (California), Orlando, Palm Beach County, Philadelphia, Phoenix, Pittsburgh, Raleigh/Durham, Sacramento, San Diego, San Francisco, Seattle/Puget Sound, South Bay/San Jose, St. Louis, Tampa/ St Petersburg, Washington, and Westchester/So Connecticut. When ever possible all markets are included to provide as broad as possible national coverage. The Market Highlights and Overview narrative includes all markets. For information on subscribing to CoStar s other products and services, please contact us at COSTAR, or visit our web site at Copyright 2016 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc L ST NW Washington, DC (800) NASDAQ: CSGP B The CoStar Office Report 2016 CoStar Group, Inc.

4 Third Quarter 2016 National Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different 2016 CoStar Group, Inc. The CoStar Office Report C

5 National Third Quarter 2016 tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D The CoStar Office Report 2016 CoStar Group, Inc.

6 Overview Third Quarter 2016 National U.S. s Vacancy Decreases to 9.9% Net Absorption Positive 36,110,085 SF in the Quarter The U.S. Office market ended the third quarter 2016 with a vacancy rate of 9.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 36,110,085 square feet in the third Vacant sublease space increased in the quarter, ending the quarter at 46,002,516 square feet. Rental rates ended the third quarter at $23.97, an increase over the previous A total of 424 buildings delivered to the market in the quarter totaling 20,105,946 square feet, with 147,486,814 square feet still under construction at the end of the Absorption Net absorption for the overall U.S. office market was positive 36,110,085 square feet in the third quarter That compares to positive 36,130,102 square feet in the second quarter 2016, positive 16,247,146 square feet in the first quarter 2016, and positive 38,193,108 square feet in the fourth quarter Tenants moving out of large blocks of space in 2016 include: AT&T Wireless moving out of 1,300,000 square feet at 2000 W Att Center Dr in the Chicago market; AIG Global Real Estate moving out of 425,403 square feet at 101 Hudson St in the Northern New Jersey market; and AMEC Paragon moving out of 171,380 square feet at Clay Rd in the Houston market. Tenants moving into large blocks of space in 2016 include: TIAA moving into 346,081 square feet at 1670 Broadway in the Denver market; Motorola Solutions, Inc. at 1303 E Algonquin Rd in the Chicago market; and United Health Group at Whitewater Dr in the Minneapolis market. The Class-A office market recorded net absorption of positive 13,444,803 square feet in the third quarter 2016, compared to positive 10,561,284 square feet in the second quarter 2016, positive 9,935,500 in the first quarter 2016, and positive 18,517,088 in the fourth quarter The Class-B office market recorded net absorption of positive 14,607,060 square feet in the third quarter 2016, compared to positive 16,434,465 square feet in the second quarter 2016, positive 6,670,351 in the first quarter 2016, and positive 15,899,490 in the fourth quarter The Class-C office market recorded net absorption of positive 8,058,222 square feet in the third quarter 2016 compared to positive 9,134,353 square feet in the second quarter 2016, negative (358,705) in the first quarter 2016, and positive 3,776,530 in the fourth quarter Net absorption for U.S. s central business district was positive 3,129,715 square feet in the third quarter That compares to positive 6,091,439 square feet in the second quarter 2016, negative (264,302) in the first quarter 2016, and positive 3,242,993 in the fourth quarter Net absorption for the suburban markets was positive 32,980,370 square feet in the third quarter That compares to positive 30,038,663 square feet in second quarter 2016, positive 16,511,448 in the first quarter 2016, and positive 34,950,115 in the fourth quarter Vacancy The office vacancy rate in the U.S. market area decreased to 9.9% at the end of the third quarter The vacancy rate was 10.0% at the end of the second quarter 2016, 10.3% at the end of the first quarter 2016, and 10.3% at the end of the Vacancy Rates by Class* % Class A Class B Class C Total Market 16% 15% 14% Vacancy Rate 13% 12% 11% 10% 9% 8% 7% q q q q q q q q q q q q q q q q * Select markets included in this historical chart - see Methodology page CoStar Group, Inc. The CoStar Office Report 1

7 National Third Quarter 2016 Overview fourth quarter Class-A projects reported a vacancy rate of 12.1% at the end of the third quarter 2016, 12.1% at the end of the second quarter 2016, 12.1% at the end of the first quarter 2016, and 12.0% at the end of the fourth quarter Class-B projects reported a vacancy rate of 10.1% at the end of the third quarter 2016, 10.3% at the end of the second quarter 2016, 10.6% at the end of the first quarter 2016, and 10.7% at the end of the fourth quarter Class-C projects reported a vacancy rate of 6.2% at the end of the third quarter 2016, 6.6% at the end of second quarter 2016, 7.0% at the end of the first quarter 2016, and 7.0% at the end of the fourth quarter The overall vacancy rate in U.S. s central business district at the end of the third quarter 2016 decreased to 9.8%. The vacancy rate was 9.9% at the end of the second quarter 2016, 10.0% at the end of the first quarter 2016, and 10.0% at the end of the fourth quarter The vacancy rate in the suburban markets decreased to 9.9% in the third quarter The vacancy rate was 10.1% at the end of the second quarter 2016, 10.3% at the end of the first quarter 2016, and 10.4% at the end of the fourth quarter Largest Lease Signings The largest lease signings occurring in 2016 included: the 289,000 square foot lease signed by Georgia Tech at 771 Spring St in the Atlanta market; the 229,000 square foot lease signed by the Environmental Protection Agency at 1201 Elm St in the Dallas/Fort Worth market; and the 694,000 square foot lease signed by Coach, Inc, at 10 Hudson Yards in the New York City market. Sublease Vacancy The amount of vacant sublease space in the U.S. market increased to 46,002,516 square feet by the end of the third quarter 2016, from 42,745,424 square feet at the end of the second quarter There was 41,874,869 square feet vacant at the end of the first quarter 2016 and 41,284,466 square feet at the end of the fourth quarter U.S. s Class-A projects reported vacant sublease space of 28,330,235 square feet at the end of third quarter 2016, up from the 26,285,283 square feet reported at the end of the second quarter There were 25,189,199 square feet of sublease space vacant at the end of the first quarter 2016, and 25,142,003 square feet at the end of the fourth quarter Class-B projects reported vacant sublease space of 15,996,627 square feet at the end of the third quarter 2016, up from the 14,731,751 square feet reported at the end of the second quarter At the end of the first quarter 2016 there were 14,869,358 square feet, and at the end of the fourth quarter 2015 there were 14,351,557 square feet vacant. Class-C projects reported decreased vacant sublease space from the second quarter 2016 to the third quarter Sublease vacancy went from 1,728,390 square feet to 1,675,654 square feet during that time. There was 1,816,312 square feet at the end of the first quarter 2016, and 1,790,906 square feet at the end of the fourth quarter Sublease vacancy in U.S. s central business district stood at 13,604,666 square feet at the end of the third quarter It was 12,673,765 square feet at the end of the second quarter 2016, 12,073,788 square feet at the end of the first quarter 2016, and 11,199,630 square feet at the end of the fourth quarter Sublease vacancy in the suburban markets ended the third quarter 2016 at 32,397,850 square feet. At the end of the second quarter 2016 sublease vacancy was 30,071,659 square feet, was 29,801,081 square feet at the end of the first quarter 2016, and was 30,084,836 square feet at the end of the fourth quarter Rental Rates The average quoted asking rental rate for available office space, all classes, was $23.97 per square foot per year at the end of the third quarter 2016 in the U.S. market area. This represented a 1.7% increase in quoted rental rates from the end of the second quarter 2016, when rents were reported at $23.57 per square foot. The average quoted rate within the Class-A sector was $30.20 at the end of the third quarter 2016, while Class-B rates stood at $21.28, and Class-C rates at $ At the end of the second quarter 2016, Class-A rates were $29.60 per square foot, Class-B rates were $21.03, and Class-C rates were $ The average quoted asking rental rate in U.S. s CBD was $31.50 at the end of the third quarter 2016, and $22.30 in the suburban markets. In the second quarter 2016, quoted rates were $30.40 in the CBD and $22.09 in the suburbs. Deliveries and Construction During the third quarter 2016, 424 buildings totaling 20,105,946 square feet were completed in the U.S. market area. This compares to 343 buildings totaling 19,417,011 square feet that were completed in the second quarter 2016, 415 buildings totaling 20,502,806 square feet completed in the first quarter 2016, and 26,674,063 square feet in 423 buildings completed in the fourth quarter There were 147,486,814 square feet of office space under construction at the end of the third quarter Some of the notable 2016 deliveries include: 10 Hudson Yards, a 1,725,250-square-foot facility that delivered in second quarter 2016 and is now 94% occupied, and 2101 Citywest Blvd - Phillips 66, a 1,100,000-square-foot building that delivered in second quarter 2016 and is now 100% occupied. The largest projects underway at the end of third quarter 2016 were 3 World Trade Center, a 2,861,402-square-foot building with 37% of its space pre-leased, and Apple Headquarters, 2 The CoStar Office Report 2016 CoStar Group, Inc.

8 Overview Third Quarter 2016 National a 2,800,000-square-foot facility that is 100% pre-leased. Inventory Total office inventory in the U.S. market area amounted to 10,743,752,919 square feet in 521,091 buildings as of the end of the third quarter The Class-A office sector consisted of 3,404,560,717 square feet in 17,972 projects. There were 199,167 Class-B buildings totaling 4,964,324,617 square feet, and the Class-C sector consisted of 2,374,867,585 square feet in 303,952 buildings. Within the Office market there were 20,147 owner-occupied buildings accounting for 704,756,477 square feet of office space. Sales Activity Tallying office building sales of 15,000 square feet or larger, U.S. office sales figures rose during the second quarter 2016 in terms of dollar volume compared to the first quarter of In the second quarter, 852 office transactions closed with a total volume of $24,837,534,301. The 852 buildings totaled 84,033,783 square feet and the average price per square foot equated to $ per square foot. That compares to 771 transactions totaling $19,087,174,889 in the first quarter The total square footage in the first quarter was 78,165,116 square feet for an average price per square foot of $ Total office building sales activity in 2016 was down compared to In the first six months of 2016, the market saw 1,623 office sales transactions with a total volume of $43,924,709,190. The price per square foot averaged $ In the same first six months of 2015, the market posted 1,664 transactions with a total volume of $48,286,618,428. The price per square foot averaged $ Cap rates have been lower in 2016, averaging 7.14% compared to the same period in 2015 when they averaged 7.19%. One of the largest transactions that has occurred within the last 4 quarters in the U.S. market is the sale of 1285 Avenue of the Americas in New York. This 1,800,000 square foot office building sold for $1,650,000,000, or $ per square foot. The property sold on 5/20/2016, at a 4.0% cap rate. Albany/Schenectady/Troy The Albany/Schenectady/Troy office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.7%, from 5.3% in the previous Rental rates ended the quarter at $14.96 per square foot, from $15.14 in the previous There was a total of 44,000 square feet that delivered in the quarter, with 230,468 square feet still under construction at the end of the Albuquerque and positive 502,637 square feet of net absorption, Albuquerque s vacancy rate went from 9.4% to 8.1% in the Rental rates went from $15.62 to $15.36 during that time. At the end of the quarter, there was 18,000 square feet underway for future delivery. Anchorage The Anchorage office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 29,479 square feet caused the vacancy rate to decrease from 5.4% to 5.2% in the Rental rates stood at $ Asheville and positive 100,560 square feet of net absorption, Asheville s vacancy rate went from 3.9% to 3.1% in the Rental rates went from $15.71 to $15.76 during that time. At the end of the quarter, there was 105,000 square feet underway for future delivery. Atlanta The vacancy rate remained unchanged in Atlanta in the third With 284,236 square feet in deliveries, and positive 211,606 square feet in net absorption, the vacancy rate held at 12.1%, the same rate reported in the previous The market had 4,678,454 square feet under construction at the end of the quarter, and rental rates stood at $21.78 per square foot. Augusta/Richmond County and positive 49,604 square feet of net absorption, Augusta/ Richmond County s vacancy rate went from 8.3% to 7.9% in the Rental rates went from $14.12 to $12.79 during that time. At the end of the quarter, there was 24,000 square feet underway for future delivery. Austin The Austin office market ended the quarter with a vacancy rate of 8.2%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 238,403 square feet. Vacant sublease space decreased to 631,448 square feet. Rental rates ended the third quarter at $32.77, an increase over the previous A total of 13 buildings with 378,628 square feet of space delivered to the market, with 2,218,471 square feet still under construction at the end of the Bakersfield The Bakersfield office market ended the quarter with a vacancy rate of 5.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 76,531 square feet. Vacant sublease space decreased to 11,558 square feet. Rental rates ended the third quarter at $18.74, an increase over the previous A total of two buildings with 40,200 square feet of space delivered to the market, with 58,600 square feet still under construction at the end of the 2016 CoStar Group, Inc. The CoStar Office Report 3

9 National Third Quarter 2016 Overview Baltimore The Baltimore office market ended the quarter with a vacancy rate of 10.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 143,683 square feet. Vacant sublease space increased to 272,406 square feet. Rental rates ended the third quarter at $22.28, an increase over the previous A total of three buildings with 58,580 square feet of space delivered to the market, with 2,134,276 square feet still under construction at the end of the Baton Rouge The Baton Rouge office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 11.1%, from 11.4% in the previous Rental rates ended the quarter at $16.80 per square foot, from $16.35 in the previous There was a total of 35,061 square feet that delivered in the quarter, with 242,992 square feet still under construction at the end of the Beaumont/Port Arthur The Beaumont/Port Arthur office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.9%, from 5.0% in the previous Rental rates ended the quarter at $13.91 per square foot, from $13.77 in the previous There was a total of 12,825 square feet that delivered in the quarter, with 5,000 square feet still under construction at the end of the Birmingham The vacancy rate remained unchanged in Birmingham in the third With 12,000 square feet in deliveries, and negative (1,852) square feet in net absorption, the vacancy rate held at 11.3%, the same rate reported in the previous The market had 426,940 square feet under construction at the end of the quarter, and rental rates stood at $16.68 per square foot. Boise City/Nampa The Boise City/Nampa office market ended the quarter with a vacancy rate of 7.0%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 122,028 square feet. Vacant sublease space decreased to 43,830 square feet. Rental rates ended the third quarter at $16.29, an increase over the previous A total of two buildings with 9,221 square feet of space delivered to the market, with 693,680 square feet still under construction at the end of the Boston The Boston office market ended the quarter with a vacancy rate of 8.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 2,438,110 square feet. Vacant sublease space increased to 2,405,757 square feet. Rental rates ended the third quarter at $21.09, an increase over the previous A total of nine buildings with 1,479,994 square feet of space delivered to the market, with 5,091,348 square feet still under construction at the end of the Bremerton/Silverdale The Bremerton/Silverdale office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 89,961 square feet caused the vacancy rate to decrease from 9.2% to 7.3% in the Rental rates stood at $ Broward County The Broward County office market ended the quarter with a vacancy rate of 10.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 198,577 square feet. Vacant sublease space increased to 229,723 square feet. Rental rates ended the third quarter at $26.00, an increase over the previous A total of two buildings with 28,787 square feet of space delivered to the market, with 884,521 square feet still under construction at the end of the Brownsville/Harlingen With no space currently under construction, Brownsville/ Harlingen absorbed 20,924 square feet of space and delivered 8,000 square feet of space, resulting in a vacancy rate that went from 5.6% to 5.3% over the course of the Rental rates went from $15.30 to $16.14 per square foot. Buffalo/Niagara Falls The Buffalo/Niagara Falls office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.9%, from 8.0% in the previous Rental rates ended the quarter at $15.94 per square foot, from $15.23 in the previous There was a total of 45,000 square feet that delivered in the quarter, with 64,000 square feet still under construction at the end of the Charleston WV and negative (2,802) square feet of net absorption, Charleston WV s vacancy rate went from 8.4% to 8.4% in the Rental rates went from $15.36 to $15.66 during that time. At the end of the quarter, there was 35,400 square feet underway for future delivery. 4 The CoStar Office Report 2016 CoStar Group, Inc.

10 Overview Third Quarter 2016 National Charleston/N Charleston The Charleston/N Charleston office market ended the quarter with a vacancy rate of 6.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 177,032 square feet. Vacant sublease space increased to 55,489 square feet. Rental rates ended the third quarter at $20.39, an increase over the previous A total of one building with 3,223 square feet of space delivered to the market, with 406,070 square feet still under construction at the end of the Charlotte The Charlotte office market ended the quarter with a vacancy rate of 8.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 109,348 square feet. Vacant sublease space increased to 416,070 square feet. Rental rates ended the third quarter at $22.70, an increase over the previous A total of 10 buildings with 394,604 square feet of space delivered to the market, with 3,138,137 square feet still under construction at the end of the Chattanooga and positive 187,777 square feet of net absorption, Chattanooga s vacancy rate went from 8.3% to 7.2% in the Rental rates went from $16.01 to $16.53 during that time. At the end of the quarter, there was 40,000 square feet underway for future delivery. Chicago The Chicago office market ended the quarter with a vacancy rate of 13.3%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 375,023 square feet. Vacant sublease space decreased to 3,075,577 square feet. Rental rates ended the third quarter at $23.35, an increase over the previous A total of eight buildings with 1,001,184 square feet of space delivered to the market, with 6,444,176 square feet still under construction at the end of the Cincinnati The Cincinnati office market ended the quarter with a vacancy rate of 10.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 488,762 square feet. Vacant sublease space increased to 71,193 square feet. Rental rates ended the third quarter at $16.08, an increase over the previous A total of three buildings with 59,755 square feet of space delivered to the market, with 524,874 square feet still under construction at the end of the Cleveland The Cleveland office market ended the quarter with a vacancy rate of 11.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 734,544 square feet. Vacant sublease space increased to 166,630 square feet. Rental rates ended the third quarter at $17.18, an increase over the previous A total of three buildings with 688,700 square feet of space delivered to the market, with 601,111 square feet still under construction at the end of the Colorado Springs and negative (39,726) square feet of net absorption, Colorado Springs s vacancy rate went from 11.0% to 11.2% in the Rental rates went from $16.38 to $16.41 during that time. At the end of the quarter, there was 22,640 square feet underway for future delivery. Columbia The Columbia office market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.0%, from 6.7% in the previous Rental rates ended the quarter at $15.75 per square foot, from $15.30 in the previous There was a total of 12,390 square feet that delivered in the quarter, with 101,370 square feet still under construction at the end of the Columbus The Columbus office market ended the quarter with a vacancy rate of 7.3%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (88,008) square feet. Vacant sublease space increased to 232,944 square feet. Rental rates ended the third quarter at $17.27, an increase over the previous A total of seven buildings with 127,573 square feet of space delivered to the market, with 1,524,555 square feet still under construction at the end of the Columbus GA The vacancy rate remained unchanged in Columbus GA in the third With 37,100 square feet in deliveries, and positive 33,708 square feet in net absorption, the vacancy rate held at 6.5%, the same rate reported in the previous The market had 11,480 square feet under construction at the end of the quarter, and rental rates stood at $13.01 per square foot. Corpus Christi The vacancy rate remained unchanged in Corpus Christi in the third With 68,184 square feet in deliveries, and 2016 CoStar Group, Inc. The CoStar Office Report 5

11 National Third Quarter 2016 Overview positive 61,176 square feet in net absorption, the vacancy rate held at 8.1%, the same rate reported in the previous The market had 151,000 square feet under construction at the end of the quarter, and rental rates stood at $15.94 per square foot. Dallas/Ft Worth The Dallas/Ft Worth office market ended the quarter with a vacancy rate of 14.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 2,008,183 square feet. Vacant sublease space increased to 2,046,805 square feet. Rental rates ended the third quarter at $24.08, an increase over the previous A total of 62 buildings with 1,729,349 square feet of space delivered to the market, with 11,802,715 square feet still under construction at the end of the Davenport/Moline/Rock Island and positive 118,099 square feet of net absorption, Davenport/ Moline/Rock Island s vacancy rate went from 8.9% to 7.4% in the Rental rates went from $11.49 to $11.23 during that time. At the end of the quarter, there was 42,000 square feet underway for future delivery. Dayton The Dayton office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 150,199 square feet caused the vacancy rate to decrease from 14.0% to 13.6% in the Rental rates stood at $ Deltona/Daytona Beach The vacancy rate remained unchanged in Deltona/ Daytona Beach in the third With 8,074 square feet in deliveries, and positive 11,505 square feet in net absorption, the vacancy rate held at 6.4%, the same rate reported in the previous The market had 76,000 square feet under construction at the end of the quarter, and rental rates stood at $11.74 per square foot. Denver The Denver office market ended the quarter with a vacancy rate of 9.6%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (29,698) square feet. Vacant sublease space increased to 1,369,217 square feet. Rental rates ended the third quarter at $24.94, a decrease over the previous A total of 13 buildings with 511,562 square feet of space delivered to the market, with 5,180,281 square feet still under construction at the end of the Des Moines The Des Moines office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.6%, from 5.2% in the previous Rental rates ended the quarter at $13.30 per square foot, from $13.61 in the previous There was a total of 15,000 square feet that delivered in the quarter, with 453,883 square feet still under construction at the end of the Detroit The Detroit office market ended the quarter with a vacancy rate of 12.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,255,394 square feet. Vacant sublease space increased to 247,818 square feet. Rental rates ended the third quarter at $18.80, an increase over the previous A total of nine buildings with 246,673 square feet of space delivered to the market, with 1,021,357 square feet still under construction at the end of the Duluth The Duluth office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 27,257 square feet caused the vacancy rate to decrease from 3.0% to 2.6% in the Rental rates stood at $ East Bay/Oakland and negative (47,004) square feet of net absorption, East Bay/Oakland s vacancy rate went from 7.9% to 8.0% in the Rental rates went from $28.51 to $28.89 during that time. At the end of the quarter, there was 487,700 square feet underway for future delivery. El Paso and positive 26,903 square feet of net absorption, El Paso s vacancy rate went from 7.2% to 7.1% in the Rental rates went from $15.28 to $16.03 during that time. At the end of the quarter, there was 232,502 square feet underway for future delivery. Erie The Erie office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (13,311) square feet caused the vacancy rate to increase from 3.8% to 3.9% in the Rental rates stood at $ The CoStar Office Report 2016 CoStar Group, Inc.

12 Overview Third Quarter 2016 National Evansville and positive 78,162 square feet of net absorption, Evansville s vacancy rate went from 7.0% to 6.3% in the Rental rates went from $11.11 to $11.33 during that time. At the end of the quarter, there was 82,500 square feet underway for future delivery. Fayetteville and positive 27,024 square feet of net absorption, Fayetteville s vacancy rate went from 7.8% to 7.4% in the Rental rates went from $15.12 to $14.65 during that time. At the end of the quarter, there was 27,568 square feet underway for future delivery. Fayetteville/Springdale/Rogers The Fayetteville/Springdale/Rogers office market ended the quarter with a vacancy rate of 6.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 231,595 square feet. Vacant sublease space decreased to 15,612 square feet. Rental rates ended the third quarter at $17.24, a decrease over the previous A total of three buildings with 117,876 square feet of space delivered to the market, with 253,500 square feet still under construction at the end of the Fort Smith The Fort Smith office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 41,006 square feet caused the vacancy rate to decrease from 3.4% to 2.5% in the Rental rates stood at $ Fort Wayne With no space currently under construction, Fort Wayne absorbed 167,132 square feet of space and delivered 14,142 square feet of space, resulting in a vacancy rate that went from 7.6% to 6.7% over the course of the Rental rates went from $13.40 to $13.65 per square foot. Fresno and positive 155,229 square feet of net absorption, Fresno s vacancy rate went from 9.5% to 9.0% in the Rental rates went from $16.93 to $16.77 during that time. At the end of the quarter, there was 20,776 square feet underway for future delivery. Green Bay and positive 219,345 square feet of net absorption, Green Bay s vacancy rate went from 9.4% to 8.0% in the Rental rates went from $11.91 to $12.43 during that time. At the end of the quarter, there was 5,000 square feet underway for future delivery. Greensboro/Winston-Salem The Greensboro/Winston-Salem office market ended the quarter with a vacancy rate of 9.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 384,686 square feet. Vacant sublease space decreased to 126,684 square feet. Rental rates ended the third quarter at $14.82, an increase over the previous A total of one building with 11,183 square feet of space delivered to the market, with 54,579 square feet still under construction at the end of the Greenville/Spartanburg The Greenville/Spartanburg office market ended the quarter with a vacancy rate of 7.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 108,727 square feet. Vacant sublease space increased to 183,047 square feet. Rental rates ended the third quarter at $16.02, an increase over the previous A total of three buildings with 23,238 square feet of space delivered to the market, with 376,074 square feet still under construction at the end of the Hampton Roads The Hampton Roads office market ended the quarter with a vacancy rate of 11.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 248,146 square feet. Vacant sublease space increased to 127,682 square feet. Rental rates ended the third quarter at $17.03, an increase over the previous A total of three buildings with 90,000 square feet of space delivered to the market, with 250,080 square feet still under construction at the end of the Hartford and positive 51,252 square feet of net absorption, Hartford s vacancy rate went from 8.6% to 8.5% in the Rental rates went from $18.96 to $18.83 during that time. At the end of the quarter, there was 125,050 square feet underway for future delivery. Hawaii The Hawaii office market ended the quarter with a vacancy rate of 4.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 105,286 square feet. Vacant sublease space increased to 49,052 square feet. Rental rates ended the third quarter at $27.46, an increase over the previous A total of two buildings with 11,130 square feet of space delivered to the market, with 89,419 square feet still under construction at the end of the 2016 CoStar Group, Inc. The CoStar Office Report 7

13 National Third Quarter 2016 Overview Houston The Houston office market ended the quarter with a vacancy rate of 14.7%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (150,927) square feet. Vacant sublease space increased to 4,909,764 square feet. Rental rates ended the third quarter at $27.69, a decrease over the previous A total of 19 buildings with 1,696,155 square feet of space delivered to the market, with 3,917,542 square feet still under construction at the end of the Huntington/Ashland and positive 92,008 square feet of net absorption, Huntington/ Ashland s vacancy rate went from 6.3% to 5.3% in the Rental rates went from $11.93 to $11.06 during that time. At the end of the quarter, there was 20,000 square feet underway for future delivery. Huntsville and positive 318,827 square feet of net absorption, Huntsville s vacancy rate went from 11.5% to 10.0% in the Rental rates went from $13.17 to $13.54 during that time. At the end of the quarter, there was 6,000 square feet underway for future delivery. Indianapolis The Indianapolis office market ended the quarter with a vacancy rate of 7.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 377,156 square feet. Vacant sublease space increased to 316,897 square feet. Rental rates ended the third quarter at $17.22, an increase over the previous A total of three buildings with 144,720 square feet of space delivered to the market, with 772,500 square feet still under construction at the end of the Inland Empire (California) The Inland Empire (California) office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 9.6%, from 10.0% in the previous Rental rates ended the quarter at $19.90 per square foot, from $19.91 in the previous There was a total of 65,847 square feet that delivered in the quarter, with 432,702 square feet still under construction at the end of the Jackson The Jackson office market ended the quarter with a vacancy rate of 6.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 125,401 square feet. Vacant sublease space decreased to 25,332 square feet. Rental rates ended the third quarter at $16.00, an increase over the previous A total of two buildings with 16,686 square feet of space delivered to the market, with 47,475 square feet still under construction at the end of the Jacksonville (Florida) The Jacksonville (Florida) office market ended the quarter with a vacancy rate of 9.8%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (61,166) square feet. Vacant sublease space increased to 198,751 square feet. Rental rates ended the third quarter at $18.50, an increase over the previous A total of four buildings with 84,361 square feet of space delivered to the market, with 98,752 square feet still under construction at the end of the Kansas City The Kansas City office market ended the quarter with a vacancy rate of 9.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 555,966 square feet. Vacant sublease space increased to 481,633 square feet. Rental rates ended the third quarter at $18.07, an increase over the previous A total of one building with 90,000 square feet of space delivered to the market, with 1,982,529 square feet still under construction at the end of the Killeen/Temple/Fort Hood With no space currently under construction, Killeen/ Temple/Fort Hood absorbed (7,395) square feet of space and delivered 4,570 square feet of space, resulting in a vacancy rate that went from 8.1% to 8.5% over the course of the Rental rates went from $12.54 to $10.86 per square foot. Kingsport/Bristol/Bristol and positive 54,965 square feet of net absorption, Kingsport/ Bristol/Bristol s vacancy rate went from 7.6% to 6.8% in the Rental rates went from $11.95 to $12.41 during that time. At the end of the quarter, there was 30,000 square feet underway for future delivery. Knoxville The Knoxville office market ended the quarter with a vacancy rate of 6.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 377,514 square feet. Vacant sublease space decreased to 82,119 square feet. Rental rates ended the third quarter at $14.99, an increase over the previous A total of two buildings with 258,000 square feet of space delivered to the market, with 142,740 square feet still under construction at the end of the 8 The CoStar Office Report 2016 CoStar Group, Inc.

14 Overview Third Quarter 2016 National Lafayette and positive 54,913 square feet of net absorption, Lafayette s vacancy rate went from 5.9% to 5.2% in the Rental rates went from $15.07 to $15.11 during that time. At the end of the quarter, there was 50,000 square feet underway for future delivery. Las Vegas The Las Vegas office market ended the quarter with a vacancy rate of 15.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 94,548 square feet. Vacant sublease space increased to 394,791 square feet. Rental rates ended the third quarter at $19.65, a decrease over the previous A total of three buildings with 20,920 square feet of space delivered to the market, with 616,697 square feet still under construction at the end of the Lexington/Fayette The Lexington/Fayette office market ended the quarter with a vacancy rate of 8.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 192,928 square feet. Vacant sublease space decreased to 51,080 square feet. Rental rates ended the third quarter at $15.97, an increase over the previous A total of one building with 67,617 square feet of space delivered to the market, with 61,150 square feet still under construction at the end of the Lincoln The Lincoln office market ended the quarter with a vacancy rate of 3.6%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 110,913 square feet. Vacant sublease space decreased to 7,524 square feet. Rental rates ended the third quarter at $13.27, a decrease over the previous A total of one building with 12,750 square feet of space delivered to the market, with 55,000 square feet still under construction at the end of the Little Rock/N Little Rock The Little Rock/N Little Rock office market ended the quarter with a vacancy rate of 4.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 103,403 square feet. Vacant sublease space stayed the same at 38,097 square feet. Rental rates ended the third quarter at $15.15, an increase over the previous A total of one building with 8,000 square feet of space delivered to the market, with 125,872 square feet still under construction at the end of the Long Island (New York) The Long Island (New York) office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.1%, from 7.3% in the previous Rental rates ended the quarter at $28.56 per square foot, from $27.30 in the previous There was a total of 66,828 square feet that delivered in the quarter, with 3,224,387 square feet still under construction at the end of the Los Angeles The Los Angeles office market ended the quarter with a vacancy rate of 10.6%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,337,135 square feet. Vacant sublease space decreased to 1,316,303 square feet. Rental rates ended the third quarter at $32.77, an increase over the previous A total of 10 buildings with 1,094,964 square feet of space delivered to the market, with 3,595,692 square feet still under construction at the end of the Louisville The Louisville office market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.8%, from 8.3% in the previous Rental rates ended the quarter at $16.38 per square foot, from $16.28 in the previous There was a total of 45,000 square feet that delivered in the quarter, with 239,115 square feet still under construction at the end of the Lubbock The Lubbock office market ended the quarter with a vacancy rate of 7.1%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (41,930) square feet. Vacant sublease space increased to 11,694 square feet. Rental rates ended the third quarter at $14.11, a decrease over the previous A total of four buildings with 16,150 square feet of space delivered to the market, with 54,795 square feet still under construction at the end of the Madison The Madison office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.6%, from 6.5% in the previous Rental rates ended the quarter at $15.06 per square foot, from $15.11 in the previous There was a total of 258,000 square feet that delivered in the quarter, with 183,250 square feet still under construction at the end of the McAllen/Edinburg/Pharr and negative (35,911) square feet of net absorption, McAllen/ Edinburg/Pharr s vacancy rate went from 5.6% to 5.9% in the Rental rates went from $15.32 to $15.27 during that time. At the end of the quarter, there was 66,538 square feet underway for future delivery CoStar Group, Inc. The CoStar Office Report 9

15 National Third Quarter 2016 Overview Memphis The vacancy rate remained unchanged in Memphis in the third With 51,886 square feet in deliveries, and positive 92,905 square feet in net absorption, the vacancy rate held at 10.4%, the same rate reported in the previous The market had 1,375,000 square feet under construction at the end of the quarter, and rental rates stood at $16.60 per square foot. Miami-Dade County The Miami-Dade County office market ended the quarter with a vacancy rate of 9.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 318,948 square feet. Vacant sublease space increased to 247,771 square feet. Rental rates ended the third quarter at $32.78, an increase over the previous A total of one building with 18,000 square feet of space delivered to the market, with 1,685,607 square feet still under construction at the end of the Milwaukee The Milwaukee office market ended the quarter with a vacancy rate of 8.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 650,567 square feet. Vacant sublease space decreased to 136,962 square feet. Rental rates ended the third quarter at $16.41, an increase over the previous A total of two buildings with 54,000 square feet of space delivered to the market, with 1,789,500 square feet still under construction at the end of the Minneapolis The Minneapolis office market ended the quarter with a vacancy rate of 7.5%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (611,418) square feet. Vacant sublease space decreased to 424,908 square feet. Rental rates ended the third quarter at $19.22, an increase over the previous A total of three buildings with 43,290 square feet of space delivered to the market, with 793,574 square feet still under construction at the end of the Mobile The Mobile office market ended the quarter with a vacancy rate of 6.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 45,891 square feet. Vacant sublease space increased to 52,461 square feet. Rental rates ended the third quarter at $13.00, an increase over the previous A total of one building with 5,000 square feet of space delivered to the market, with 158,667 square feet still under construction at the end of the Montgomery and positive 40,902 square feet of net absorption, Montgomery s vacancy rate went from 7.0% to 6.7% in the Rental rates went from $13.63 to $13.61 during that time. At the end of the quarter, there was 12,006 square feet underway for future delivery. Myrtle Beach/Conway The Myrtle Beach/Conway office market ended the quarter with a vacancy rate of 3.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 10,422 square feet. Vacant sublease space stayed the same at 0 square feet. Rental rates ended the third quarter at $14.36, an increase over the previous A total of one building with 4,000 square feet of space delivered to the market, with 8,330 square feet still under construction at the end of the Nashville The Nashville office market ended the quarter with a vacancy rate of 4.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 553,162 square feet. Vacant sublease space increased to 196,166 square feet. Rental rates ended the third quarter at $24.49, an increase over the previous A total of five buildings with 363,325 square feet of space delivered to the market, with 3,297,924 square feet still under construction at the end of the New Orleans/Metairie/Kenner The New Orleans/Metairie/Kenner office market ended the quarter with a vacancy rate of 7.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 485,095 square feet. Vacant sublease space decreased to 105,507 square feet. Rental rates ended the third quarter at $17.04, an increase over the previous A total of six buildings with 144,852 square feet of space delivered to the market, with 79,900 square feet still under construction at the end of the New York City The New York City office market ended the quarter with a vacancy rate of 8.2%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (606,701) square feet. Vacant sublease space increased to 3,770,474 square feet. Rental rates ended the third quarter at $65.11, an increase over the previous A total of two buildings with 126,643 square feet of space delivered to the market, with 13,507,005 square feet still under construction at the end of the North Bay/Santa Rosa The North Bay/Santa Rosa office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently 10 The CoStar Office Report 2016 CoStar Group, Inc.

16 Overview Third Quarter 2016 National sits at 9.4%, from 10.7% in the previous Rental rates ended the quarter at $25.03 per square foot, from $24.98 in the previous There was a total of 9,600 square feet that delivered in the quarter, with 14,000 square feet still under construction at the end of the Northern New Jersey The Northern New Jersey office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 13.6%, from 14.1% in the previous Rental rates ended the quarter at $24.73 per square foot, from $24.75 in the previous There was a total of 959,240 square feet that delivered in the quarter, with 1,356,664 square feet still under construction at the end of the Ocala and positive 23,716 square feet of net absorption, Ocala s vacancy rate went from 8.4% to 7.9% in the Rental rates went from $12.67 to $12.63 during that time. At the end of the quarter, there was 6,277 square feet underway for future delivery. Oklahoma City The Oklahoma City office market ended the quarter with a vacancy rate of 7.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 365,300 square feet. Vacant sublease space increased to 49,098 square feet. Rental rates ended the third quarter at $16.03, an increase over the previous A total of 19 buildings with 216,068 square feet of space delivered to the market, with 1,411,785 square feet still under construction at the end of the Olympia The Olympia office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 64,398 square feet caused the vacancy rate to decrease from 7.6% to 6.9% in the Rental rates stood at $ Omaha/Council Bluffs The Omaha/Council Bluffs office market ended the quarter with a vacancy rate of 5.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 449,828 square feet. Vacant sublease space decreased to 40,075 square feet. Rental rates ended the third quarter at $17.28, an increase over the previous A total of four buildings with 164,014 square feet of space delivered to the market, with 233,459 square feet still under construction at the end of the Orange County (California) The Orange County (California) office market ended the quarter with a vacancy rate of 8.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 626,900 square feet. Vacant sublease space decreased to 460,206 square feet. Rental rates ended the third quarter at $27.73, an increase over the previous A total of one building with 5,000 square feet of space delivered to the market, with 2,430,157 square feet still under construction at the end of the Orlando The Orlando office market ended the quarter with a vacancy rate of 8.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 613,708 square feet. Vacant sublease space increased to 170,747 square feet. Rental rates ended the third quarter at $19.44, an increase over the previous A total of six buildings with 142,990 square feet of space delivered to the market, with 537,120 square feet still under construction at the end of the Palm Beach County The Palm Beach County office market ended the quarter with a vacancy rate of 11.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 483,362 square feet. Vacant sublease space decreased to 115,819 square feet. Rental rates ended the third quarter at $27.82, an increase over the previous A total of three buildings with 39,224 square feet of space delivered to the market, with 67,329 square feet still under construction at the end of the Pensacola and positive 76,277 square feet of net absorption, Pensacola s vacancy rate went from 5.8% to 5.3% in the Rental rates went from $15.10 to $15.09 during that time. At the end of the quarter, there was 193,056 square feet underway for future delivery. Peoria The Peoria office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 20,368 square feet caused the vacancy rate to decrease from 5.7% to 5.5% in the Rental rates stood at $ Philadelphia The Philadelphia office market ended the quarter with a vacancy rate of 9.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,235,664 square feet. Vacant sublease space increased to 898, CoStar Group, Inc. The CoStar Office Report 11

17 National Third Quarter 2016 Overview square feet. Rental rates ended the third quarter at $22.33, an increase over the previous A total of five buildings with 702,890 square feet of space delivered to the market, with 3,350,498 square feet still under construction at the end of the Phoenix The Phoenix office market ended the quarter with a vacancy rate of 15.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,053,043 square feet. Vacant sublease space increased to 1,056,554 square feet. Rental rates ended the third quarter at $23.10, an increase over the previous A total of seven buildings with 483,692 square feet of space delivered to the market, with 2,047,897 square feet still under construction at the end of the Pittsburgh The Pittsburgh office market ended the quarter with a vacancy rate of 7.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 403,895 square feet. Vacant sublease space increased to 392,407 square feet. Rental rates ended the third quarter at $20.51, an increase over the previous A total of five buildings with 152,686 square feet of space delivered to the market, with 411,643 square feet still under construction at the end of the Port St Lucie/Fort Pierce The Port St Lucie/Fort Pierce office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.9%, from 10.1% in the previous Rental rates ended the quarter at $15.72 per square foot, from $16.09 in the previous There was a total of 10,267 square feet that delivered in the quarter, with 60,000 square feet still under construction at the end of the Portland The Portland office market ended the quarter with a vacancy rate of 7.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 378,641 square feet. Vacant sublease space increased to 286,939 square feet. Rental rates ended the third quarter at $23.49, a decrease over the previous A total of one building with 117,500 square feet of space delivered to the market, with 1,545,056 square feet still under construction at the end of the Portland/South Portland With no space currently under construction, Portland/ South Portland absorbed (58,990) square feet of space and delivered 24,851 square feet of space, resulting in a vacancy rate that went from 5.1% to 5.5% over the course of the Rental rates went from $14.52 to $14.46 per square foot. Providence The Providence office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 6.9%, from 7.1% in the previous Rental rates ended the quarter at $16.98 per square foot, from $16.39 in the previous There was a total of 92,000 square feet that delivered in the quarter, with 187,437 square feet still under construction at the end of the Raleigh/Durham The Raleigh/Durham office market ended the quarter with a vacancy rate of 6.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 502,617 square feet. Vacant sublease space decreased to 452,619 square feet. Rental rates ended the third quarter at $20.85, an increase over the previous A total of three buildings with 44,800 square feet of space delivered to the market, with 2,603,002 square feet still under construction at the end of the Reno/Sparks The vacancy rate remained unchanged in Reno/Sparks in the third With 5,000 square feet in deliveries, and negative (6,140) square feet in net absorption, the vacancy rate held at 11.2%, the same rate reported in the previous The market had 16,975 square feet under construction at the end of the quarter, and rental rates stood at $17.57 per square foot. Richmond VA and positive 67,376 square feet of net absorption, Richmond VA s vacancy rate went from 9.2% to 8.5% in the Rental rates went from $17.75 to $17.69 during that time. At the end of the quarter, there was 547,534 square feet underway for future delivery. Roanoke and positive 29,208 square feet of net absorption, Roanoke s vacancy rate went from 11.2% to 11.0% in the Rental rates went from $14.38 to $14.19 during that time. At the end of the quarter, there was 16,800 square feet underway for future delivery. Rochester The Rochester office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.2%, from 8.4% in the previous Rental rates ended the quarter at $13.16 per square foot, from $13.07 in the previous There was a total of 24,000 square feet that delivered in the quarter, with 233,000 square feet still under construction at the end of the 12 The CoStar Office Report 2016 CoStar Group, Inc.

18 Overview Third Quarter 2016 National Sacramento The Sacramento office market ended the quarter with a vacancy rate of 11.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 489,648 square feet. Vacant sublease space increased to 233,031 square feet. Rental rates ended the third quarter at $21.07, an increase over the previous A total of one building with 30,800 square feet of space delivered to the market, with 307,460 square feet still under construction at the end of the Salinas and positive 117,375 square feet of net absorption, Salinas s vacancy rate went from 9.5% to 8.1% in the Rental rates went from $21.16 to $20.82 during that time. At the end of the quarter, there was 141,226 square feet underway for future delivery. Salt Lake City The Salt Lake City office market ended the quarter with a vacancy rate of 6.1%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 2,038,541 square feet. Vacant sublease space increased to 695,566 square feet. Rental rates ended the third quarter at $19.57, a decrease over the previous A total of 19 buildings with 1,626,996 square feet of space delivered to the market, with 1,753,116 square feet still under construction at the end of the San Antonio The San Antonio office market ended the quarter with a vacancy rate of 10.0%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 211,109 square feet. Vacant sublease space increased to 135,029 square feet. Rental rates ended the third quarter at $20.45, an increase over the previous A total of eight buildings with 166,312 square feet of space delivered to the market, with 981,047 square feet still under construction at the end of the San Diego and positive 540,655 square feet of net absorption, San Diego s vacancy rate went from 11.1% to 10.7% in the Rental rates went from $29.61 to $30.50 during that time. At the end of the quarter, there was 365,867 square feet underway for future delivery. San Francisco The San Francisco office market ended the quarter with a vacancy rate of 6.9%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 128,164 square feet. Vacant sublease space increased to 1,627,115 square feet. Rental rates ended the third quarter at $55.28, an increase over the previous A total of three buildings with 320,191 square feet of space delivered to the market, with 5,190,787 square feet still under construction at the end of the San Luis Obispo/Paso Robles and positive 25,814 square feet of net absorption, San Luis Obispo/Paso Robles s vacancy rate went from 2.2% to 1.7% in the Rental rates went from $18.70 to $19.06 during that time. At the end of the quarter, there was 75,369 square feet underway for future delivery. Santa Barbara/Sta Maria/Goleta The Santa Barbara/Sta Maria/Goleta office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 10,588 square feet caused the vacancy rate to decrease from 3.0% to 2.9% in the Rental rates stood at $ Santa Cruz/Watsonville The Santa Cruz/Watsonville office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 31,623 square feet caused the vacancy rate to decrease from 7.3% to 6.9% in the Rental rates stood at $ Savannah The Savannah office market ended the quarter with a vacancy rate of 5.1%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (18,670) square feet. Vacant sublease space decreased to 7,462 square feet. Rental rates ended the third quarter at $16.86, an increase over the previous A total of two buildings with 14,762 square feet of space delivered to the market, with 30,000 square feet still under construction at the end of the Seattle/Puget Sound The Seattle/Puget Sound office market ended the quarter with a vacancy rate of 6.8%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,581,481 square feet. Vacant sublease space increased to 652,370 square feet. Rental rates ended the third quarter at $30.96, an increase over the previous A total of five buildings with 475,008 square feet of space delivered to the market, with 7,972,967 square feet still under construction at the end of the 2016 CoStar Group, Inc. The CoStar Office Report 13

19 National Third Quarter 2016 Overview Shreveport/Bossier City The Shreveport/Bossier City office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 11.7%, from 12.5% in the previous Rental rates ended the quarter at $12.34 per square foot, from $12.31 in the previous There was a total of 116,000 square feet that delivered in the quarter, with 57,500 square feet still under construction at the end of the South Bay/San Jose The South Bay/San Jose office market ended the quarter with a vacancy rate of 8.0%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (170,170) square feet. Vacant sublease space increased to 1,161,928 square feet. Rental rates ended the third quarter at $39.97, an increase over the previous A total of four buildings with 549,465 square feet of space delivered to the market, with 10,090,399 square feet still under construction at the end of the South Bend/Mishawaka The South Bend/Mishawaka office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 65,061 square feet caused the vacancy rate to decrease from 6.4% to 5.7% in the Rental rates stood at $ Southwest Florida The Southwest Florida office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.7%, from 9.3% in the previous Rental rates ended the quarter at $16.17 per square foot, from $16.30 in the previous There was a total of 70,189 square feet that delivered in the quarter, with 67,000 square feet still under construction at the end of the Spokane With no space currently under construction, Spokane absorbed (12,300) square feet of space and delivered 91,000 square feet of space, resulting in a vacancy rate that went from 8.6% to 9.0% over the course of the Rental rates went from $15.03 to $15.14 per square foot. Springfield With no space currently under construction, Springfield absorbed 67,110 square feet of space and delivered 14,000 square feet of space, resulting in a vacancy rate that went from 7.0% to 6.4% over the course of the Rental rates went from $13.11 to $13.47 per square foot. St. Louis The St. Louis office market ended the quarter with a vacancy rate of 9.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 234,352 square feet. Vacant sublease space decreased to 291,344 square feet. Rental rates ended the third quarter at $18.06, a decrease over the previous A total of one building with 60,000 square feet of space delivered to the market, with 1,207,658 square feet still under construction at the end of the Stockton/Modesto and positive 46,204 square feet of net absorption, Stockton/ Modesto s vacancy rate went from 8.1% to 7.8% in the Rental rates went from $14.84 to $14.59 during that time. At the end of the quarter, there was 306,000 square feet underway for future delivery. Syracuse The Syracuse office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.2%, from 8.5% in the previous Rental rates ended the quarter at $14.30 per square foot, from $14.39 in the previous There was a total of 90,565 square feet that delivered in the quarter, with 24,000 square feet still under construction at the end of the Tallahassee The Tallahassee office market ended the quarter with a vacancy rate of 6.8%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 98,875 square feet. Vacant sublease space decreased to 44,739 square feet. Rental rates ended the third quarter at $15.77, an increase over the previous A total of two buildings with 10,546 square feet of space delivered to the market, with 80,695 square feet still under construction at the end of the Tampa/St Petersburg The Tampa/St Petersburg office market ended the quarter with a vacancy rate of 8.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 399,494 square feet. Vacant sublease space decreased to 348,157 square feet. Rental rates ended the third quarter at $20.07, an increase over the previous A total of five buildings with 22,875 square feet of space delivered to the market, with 181,576 square feet still under construction at the end of the Toledo The Toledo office market ended the quarter with a 14 The CoStar Office Report 2016 CoStar Group, Inc.

20 Overview Third Quarter 2016 National vacancy rate of 8.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 266,817 square feet. Vacant sublease space increased to 16,300 square feet. Rental rates ended the third quarter at $13.39, an increase over the previous A total of three buildings with 158,327 square feet of space delivered to the market, with 220,400 square feet still under construction at the end of the Tucson and positive 74,085 square feet of net absorption, Tucson s vacancy rate went from 11.8% to 11.5% in the Rental rates went from $18.62 to $18.68 during that time. At the end of the quarter, there was 33,271 square feet underway for future delivery. Tulsa The Tulsa office market ended the quarter with a vacancy rate of 10.0%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 226,223 square feet. Vacant sublease space increased to 74,549 square feet. Rental rates ended the third quarter at $14.74, an increase over the previous A total of four buildings with 38,257 square feet of space delivered to the market, with 310,332 square feet still under construction at the end of the Utica/Rome The Utica/Rome office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 25,081 square feet caused the vacancy rate to decrease from 4.7% to 4.4% in the Rental rates stood at $ Visalia/Porterville and positive 45,641 square feet of net absorption, Visalia/ Porterville s vacancy rate went from 6.4% to 5.7% in the Rental rates went from $15.05 to $14.37 during that time. At the end of the quarter, there was 6,144 square feet underway for future delivery. Washington The Washington office market ended the quarter with a vacancy rate of 15.1%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (181,711) square feet. Vacant sublease space increased to 3,114,872 square feet. Rental rates ended the third quarter at $35.19, an increase over the previous A total of two buildings with 496,913 square feet of space delivered to the market, with 10,672,155 square feet still under construction at the end of the West Michigan The West Michigan office market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.2%, from 7.5% in the previous Rental rates ended the quarter at $12.83 per square foot, from $12.98 in the previous There was a total of 88,995 square feet that delivered in the quarter, with 690,968 square feet still under construction at the end of the Westchester/So Connecticut The Westchester/So Connecticut office market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 12.0%, from 12.4% in the previous Rental rates ended the quarter at $28.12 per square foot, from $28.09 in the previous There was a total of 75,127 square feet that delivered in the quarter, with 186,510 square feet still under construction at the end of the Wichita and positive 113,595 square feet of net absorption, Wichita s vacancy rate went from 7.2% to 6.7% in the Rental rates went from $13.21 to $12.98 during that time. At the end of the quarter, there was 198,400 square feet underway for future delivery. Wilmington The Wilmington office market ended the quarter with a vacancy rate of 5.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 151,288 square feet. Vacant sublease space increased to 26,529 square feet. Rental rates ended the third quarter at $16.44, an increase over the previous A total of one building with 8,000 square feet of space delivered to the market, with 178,482 square feet still under construction at the end of the Yakima With no space currently under construction, Yakima absorbed 5,252 square feet of space and delivered 18,760 square feet of space, resulting in a vacancy rate that went from 3.9% to 4.2% over the course of the Rental rates went from $11.72 to $11.44 per square foot. Youngstown/Warren/Boardman The Youngstown/Warren/Boardman office market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 24,102 square feet caused the vacancy rate to decrease from 5.2% to 5.0% in the Rental rates stood at $ CoStar Group, Inc. The CoStar Office Report 15

21 National Third Quarter 2016 Inventory & development Historical Deliveries Deliveries Average Delivered SF Millions SF * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction Square Footage Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C New York City 23 13,507,005 7,543, % 148, ,261 Dallas/Ft Worth ,802,715 7,330, % 29, ,449 Washington 45 10,672,155 6,487, % 46, ,159 South Bay/San Jose 39 10,090,399 7,862, % 25, ,728 Seattle/Puget Sound 31 7,972,967 4,113, % 24, ,192 Chicago 37 6,444,176 4,407, % 34, ,167 San Francisco 18 5,190,787 1,615, % 43, ,377 Denver 47 5,180,281 2,327, % 26, ,219 Boston 31 5,091,348 2,257, % 29, ,237 Atlanta 47 4,678,454 2,878, % 19,135 99,542 Houston 45 3,917,542 1,924, % 42,847 87,056 Los Angeles 45 3,595, , % 23,925 79,904 Philadelphia 23 3,350,498 2,816, % 18, ,674 Nashville 25 3,297,924 2,046, % 17, ,917 Long Island (New York) 43 3,224,387 1,731, % 17,272 74,986 Charlotte 21 3,138,137 1,664, % 18, ,435 Raleigh/Durham 31 2,603,002 1,324, % 20,498 83,968 Orange County (California) 14 2,430,157 1,211, % 25, ,583 Austin 42 2,218,471 1,079, % 20,947 52,821 Baltimore 18 2,134,276 1,020, % 21, ,571 Phoenix 27 2,047,897 1,012, % 20,652 75,848 Kansas City 19 1,982,529 1,628, % 26, ,344 Milwaukee 6 1,789,500 1,258, % 21, ,250 Salt Lake City 22 1,753, , % 20,842 79,687 Miami-Dade County 28 1,685, , % 23,135 60,200 Portland 19 1,545, , % 18,765 81,319 Columbus 12 1,524,555 1,086, % 22, ,046 Oklahoma City 22 1,411, , % 13,389 64,172 Memphis 3 1,375,000 1,298, % 18, ,333 Northern New Jerse y 21 1,356,664 1,090, % 21,472 64,603 St. Louis 11 1,207,658 1,017, % 23, ,787 Detroit 21 1,021, , % 20,996 48,636 San Antonio , , % 19,977 61,315 Broward Count y , , % 16,985 63,180 Minneapolis 8 793, , % 31,340 99,197 Indianapolis , , % 18,526 70,227 Boise City/Nampa 5 693, , % 10, ,736 West Michi gan 9 690, , % 12,948 76,774 Las Vegas , , % 16,114 51,391 Cleveland , , % 20,248 31,637 Richmond VA 8 547, , % 20,011 68,442 Orlando , , % 12,609 33,570 Cincinnati 5 524,874 62, % 18, ,975 East Bay/Oakland 5 487, , % 20,881 97,540 Totals 1, ,486,814 87,013, % 20, , The CoStar Office Report 2016 CoStar Group, Inc.

22 Inventory & development Third Quarter 2016 National Historical Construction Starts & Deliveries* Square Footage Per Quarter Starting and Completing Construction 30.0 Construction Starts Deliveries Millions SF q q q q q * Select markets included in this historical chart - see Methodology page. Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single Tenant Multi-Tenant < 50,000 SF ,184,468 8,127, % $ ,010,131 8,174,337 50,000 SF - 99,999 SF 109 7,643,684 5,798, % $ ,060,645 5,583, ,000 SF - 249,999 SF ,928,938 13,819, % $ ,356,172 14,572, ,000 SF - 499,999 SF 34 11,762,053 9,429, % $ ,379,600 8,382,453 >= 500,000 SF 15 10,506,620 9,491, % $ ,173,856 6,332,764 Recent Deliveries Leased & Un-Leased SF in Deliveries Last 5 Years Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 90.0 Leased Un-Leased 40.0 Preleased Un-Leased Millions SF Millions SF q q q q 2016 CoStar Group, Inc. The CoStar Office Report 17

23 National Third Quarter 2016 Inventory & development 18 The CoStar Office Report 2016 CoStar Group, Inc.

24 Inventory & development Third Quarter 2016 National 2016 CoStar Group, Inc. The CoStar Office Report 19

25 National Third Quarter 2016 Figures at a Glance Class A Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 29 6,024, , , % 6, ,000 $28.62 Albuquerque 27 4,705, , , % 350, $19.28 Anchorage 21 2,929, , , % (30,192) 0 0 $36.37 Asheville ,270 24,988 24, % 95,893 84,000 0 $25.54 Atlanta ,800,274 14,334,919 15,354, % 288, ,929 4,098,484 $26.50 Augusta/Richmon , , , % 6, $22.08 Austin ,594,509 3,147,158 3,540, % 849, ,074 1,695,011 $37.77 Bakersfield 18 1,409, , , % 1, $21.19 Baltimore ,657,189 4,984,725 5,157, % 130, ,900 1,987,022 $26.17 Baton Rouge 19 3,648, , , % (259,113) 0 88,000 $20.96 Beaumont/Port A ,240 74,138 74, % (1,860) 0 0 $17.45 Birmingham 83 13,019,342 1,873,404 2,163, % (228,308) 0 272,840 $20.93 Boise City/Namp. 23 4,718, , , % 63, ,000 $21.61 Boston ,606,357 13,140,836 14,712, % 1,601,044 2,384,938 4,865,585 $27.27 Bremerton/Silve ,049 16,388 16, % (13,959) 0 0 $24.00 Broward County ,570,329 2,123,719 2,297, % 369, , ,499 $31.05 Brownsville/Har ,752 31,014 31, % 1, $19.79 Buffalo/Niagara ,694,102 1,418,898 1,427, % 114, ,000 $18.94 Charleston WV 8 921,367 97,712 97, % (9,613) 0 0 $19.82 Charleston/N Ch. 78 5,408, , , % 268, , ,013 $27.48 Charlotte ,224,706 3,795,507 4,015, % 196, ,334 3,073,777 $26.74 Chattanooga 20 2,723, , , % 21, $21.06 Chicago ,474,283 25,665,290 27,395, % (427,949) 854,800 5,642,311 $26.38 Cincinnati ,152,251 3,981,481 4,028, % 929, , ,874 $19.32 Cleveland ,750,058 2,595,837 2,661, % 784, , ,500 $22.47 Colorado Spring. 48 5,507, , , % 105, $21.23 Columbia 28 3,258, , , % 134, ,203 0 $21.30 Columbus ,399,355 2,680,363 2,859, % 713, , ,000 $18.66 Columbus GA 9 699,042 3,750 5, % (1,342) 0 0 $23.25 Corpus Christi 3 938, , , % 5, $29.06 Dallas/Ft Worth ,874,548 22,284,250 23,755, % 2,126,401 3,399,628 10,363,293 $27.87 Davenport/Molin ,084 46,065 46, % 6, $15.00 Dayton 58 5,949, , , % (31,351) 0 0 $17.96 Deltona/Daytona ,784 41,792 49, % 3, $12.96 Denver ,964,240 6,099,815 7,016, % 445, ,392 4,267,027 $29.30 Des Moines 54 12,021, , , % 158, ,000 $15.88 Detroit ,631,068 5,055,273 5,173, % 1,296, , ,574 $21.37 Duluth 10 1,136,362 22,478 22, % 208, ,000 0 $17.51 East Bay/Oaklan ,292,570 2,280,231 2,400, % 217, ,700 $38.53 El Paso 5 1,199, , , % (537) 0 0 $14.00 Erie 3 345,764 5,442 5, % 2, $20.60 Evansville 15 2,096, , , % 13, ,500 $12.77 Fayetteville ,416 42,053 42, % (13,250) 0 0 $19.08 Fayetteville/Sp. 24 2,037, , , % 66,627 32, ,000 $23.34 Fort Smith % $0.00 Fort Wayne 18 1,869, , , % 275, ,883 0 $17.07 Fresno 23 2,486, , , % 1, $24.47 Green Bay 11 1,193,590 32,596 44, % 60, $ The CoStar Office Report 2016 CoStar Group, Inc.

26 Figures at a Glance Third Quarter 2016 National Class A Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Greensboro/Wins. 69 8,667,153 1,340,973 1,445, % 159,249 55,700 0 $19.26 Greenville/Spar. 71 6,695, , , % 316, , ,000 $22.50 Hampton Roads ,449,945 1,347,314 1,433, % 69,347 60,000 0 $20.56 Hartford 75 19,908,699 2,920,756 3,099, % (185,273) 0 25,000 $21.81 Hawaii 48 10,219, , , % (44,861) 0 78,500 $29.06 Houston ,603,931 20,007,392 23,700, % 1,476,162 5,314,395 3,232,012 $33.75 Huntington/Ashl ,628 59,285 59, % $15.65 Huntsville 27 2,259, , , % 40,258 51,000 0 $22.53 Indianapolis ,671,725 2,686,399 2,842, % 305, , ,000 $19.89 Inland Empire (. 97 8,481, , , % 77, ,000 $25.81 Jackson 43 4,602, , , % 189, ,500 41,475 $19.62 Jacksonville (F ,102,410 1,758,034 1,819, % (17,497) 132,765 0 $21.82 Kansas City ,610,433 3,013,996 3,393, % 665, ,000 1,672,208 $21.02 Killeen/Temple/. 2 89, % $0.00 Kingsport/Brist ,457 7,472 7, % 300, ,000 0 $18.82 Knoxville 39 4,701, , , % 109, ,069 0 $17.87 Lafayette 6 387,777 36,314 36, % 163, ,938 0 $12.00 Las Vegas 85 10,783,525 1,724,854 1,801, % 124, ,914 $27.10 Lexington/Fayet. 75 4,582, , , % 87,120 67,617 0 $18.50 Lincoln 13 2,455,700 78,006 78, % (9,541) 0 55,000 $16.09 Little Rock/N L. 21 3,145, , , % 50, $19.53 Long Island (Ne ,321,346 3,142,429 3,545, % 279, ,565 1,813,258 $35.39 Los Angeles ,138,239 23,875,047 24,824, % 1,293, ,922 2,622,473 $35.91 Louisville ,722,417 1,230,650 1,256, % (40,830) 208, ,500 $20.66 Lubbock 7 557,814 58,540 58, % 25,133 46,000 0 $17.19 Madison 65 7,071, , , % 256, , ,000 $17.64 McAllen/Edinbur ,913 2,855 2, % 11, $19.38 Memphis 91 11,898, , , % 37, ,375,000 $19.93 Miami-Dade Coun ,517,018 3,507,138 3,663, % 36, ,413 1,291,227 $40.53 Milwaukee 98 14,954,052 1,657,627 1,709, % 398, ,564 1,779,500 $20.47 Minneapolis ,891,489 4,277,357 4,394, % 903,785 1,502, ,750 $25.82 Mobile 12 1,431, , , % (65,879) 0 117,040 $16.67 Montgomery 22 2,999, , , % 19, $19.02 Myrtle Beach/Co ,337 6,885 6, % 12, $20.18 Nashville ,944, , , % 456, ,003 3,137,986 $29.77 New Orleans/Met ,265,395 1,000,421 1,061, % 40, ,000 52,400 $19.02 New York City ,778,748 28,089,789 30,579, % 718,027 1,845,663 13,375,304 $71.23 North Bay/Santa. 46 3,731,984 1,130,197 1,130, % (546,024) 85,000 0 $32.12 Northern New Je ,817,404 24,835,023 26,831, % 305, ,900 1,160,759 $28.28 Ocala 2 117,460 20,987 20, % (4,198) 0 0 $16.43 Oklahoma City 44 8,065, , , % 47,821 90,000 1,007,716 $21.65 Olympia 3 525, % $0.00 Omaha/Council B ,287, , , % 242, , ,811 $20.52 Orange County ( ,773,253 5,175,989 5,414, % 318, ,044 2,366,020 $32.89 Orlando ,505,001 2,612,087 2,707, % 768, , ,000 $23.53 Palm Beach Coun ,659,454 2,130,064 2,189, % 261, $32.87 Pensacola 9 424,457 36,335 36, % 46,550 27,550 42,036 $20.85 Peoria 9 989,081 17,088 17, % (6,524) 0 0 $16.00 Existing Inventory Vacancy 2016 CoStar Group, Inc. The CoStar Office Report 21

27 National Third Quarter 2016 Figures at a Glance Class A Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Philadelphia ,178,143 13,592,413 14,168, % 1,172, ,014 3,082,265 $27.05 Phoenix ,524,686 6,878,171 7,321, % 1,246,069 1,654,436 1,086,718 $28.04 Pittsburgh ,399,005 3,365,783 3,684, % 183, , ,563 $25.40 Port St Lucie/F. 21 1,220, , , % (1,677) 0 60,000 $18.97 Portland ,707,521 2,363,892 2,512, % 953, ,550 1,047,502 $28.32 Portland/South. 28 2,967,273 47,228 79, % (9,110) 0 0 $20.65 Providence 31 6,432, , , % 65,389 72,000 0 $23.10 Raleigh/Durham ,116,237 2,288,955 2,676, % 660, ,655 2,334,724 $24.88 Reno/Sparks 21 1,735, , , % (2,779) 0 0 $22.15 Richmond VA ,083,875 1,826,247 2,250, % (195,850) 137, ,624 $21.19 Roanoke 7 860, , , % (6,808) 0 0 $20.58 Rochester 58 7,856,143 1,441,648 1,494, % 86, , ,000 $14.59 Sacramento ,196,735 2,829,610 2,913, % (109,636) 30,800 0 $26.03 Salinas % $0.00 Salt Lake City ,353,644 1,756,294 2,104, % 2,000,459 2,534,138 1,493,858 $26.11 San Antonio ,262,446 2,363,417 2,443, % 276, , ,650 $24.27 San Diego ,369,368 3,315,598 3,838, % 220, ,896 $37.29 San Francisco ,933,898 4,794,330 5,624, % 1,467,637 1,002,308 4,784,952 $56.88 San Luis Obispo % $0.00 Santa Barbara/S. 1 72, % $0.00 Santa Cruz/Wats % $0.00 Savannah ,154 15,449 15, % 13, $23.51 Seattle/Puget S ,957,121 4,584,266 4,804, % 2,394,352 1,107,271 7,431,078 $41.24 Shreveport/Boss ,410 73,028 74, % 123, ,000 0 $15.40 South Bay/San J ,089,680 2,676,678 2,897, % 686,136 1,298,292 8,609,006 $42.72 South Bend/Mish. 13 1,083, , , % (3,382) 0 0 $17.88 Southwest Flori. 69 3,765, , , % 42, $21.53 Spokane 10 1,384, , , % 10, $19.58 Springfield 9 908,897 9,028 9, % 11, $18.16 St. Louis ,033,730 3,058,056 3,331, % 298, ,000 1,045,000 $21.61 Stockton/Modest. 19 1,961, , , % 139, ,000 $24.18 Syracuse 20 3,216, , , % 88, $16.24 Tallahassee 14 1,349,093 35,182 35, % 9, ,240 $25.32 Tampa/St Peters ,009,545 2,653,266 2,870, % 470, ,089 0 $25.81 Toledo 13 2,946, , , % 29, ,400 $18.10 Tucson 21 2,660, , , % 68,570 28,265 0 $23.78 Tulsa 27 8,292, , , % (26,511) 0 0 $18.08 Utica/Rome 1 122, % $0.00 Visalia/Porterv % $0.00 Washington 1, ,058,179 41,026,183 43,065, % 109,457 1,463,978 10,312,295 $39.17 West Michigan 84 8,782, , , % 132, ,760 0 $19.28 Westchester/So ,789,781 9,067,709 9,480, % 690, , ,000 $32.31 Wichita 10 1,578,227 80,046 80, % (3,980) 0 190,000 $14.69 Wilmington 19 1,285, , , % 7, ,300 $22.08 Yakima % $0.00 Youngstown/Warr 7 445,329 56,671 56, % 44,204 50,000 0 $8.93 Totals 17,972 3,404,560, ,148, ,479, % 33,941,587 41,571, ,841,970 $ The CoStar Office Report 2016 CoStar Group, Inc.

28 Figures at a Glance Third Quarter 2016 National Class B Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 1,692 42,047,880 2,113,704 2,119, % 816,918 55,410 35,468 $15.15 Albuquerque 1,629 24,668,493 2,160,311 2,209, % 414,372 42,853 18,000 $14.79 Anchorage 293 8,699, , , % 31,769 16,000 0 $26.30 Asheville 834 8,239, , , % 52, ,000 $15.34 Atlanta 5, ,916,892 16,678,874 17,191, % 361, , ,970 $18.16 Augusta/Richmon 747 8,772, , , % 125,561 16,521 24,000 $12.91 Austin 2,065 43,354,937 3,479,012 3,692, % 87, , ,460 $27.58 Bakersfield 502 8,024, , , % 106,276 67,600 58,600 $19.10 Baltimore 2,726 66,330,101 7,236,175 7,335, % 395, , ,254 $20.52 Baton Rouge 582 6,634, , , % (40,867) 81, ,992 $18.38 Beaumont/Port A ,844, , , % 6,874 12,825 5,000 $15.66 Birmingham ,102,276 2,714,923 2,732, % 15,078 38, ,100 $16.22 Boise City/Namp. 1,151 17,722,702 1,274,856 1,303, % 263,419 74, ,680 $16.40 Boston 4, ,726,007 13,641,013 14,417, % 1,644, , ,763 $19.81 Bremerton/Silve ,383, , , % (8,492) 0 0 $19.59 Broward County 1,190 32,120,934 3,436,205 3,481, % 420,387 63, ,022 $23.51 Brownsville/Har ,418, , , % 59,225 25,072 0 $16.36 Buffalo/Niagara ,824,511 1,256,529 1,259, % 290,222 75,000 24,000 $15.02 Charleston WV 573 8,874, , , % (77,516) 0 35,400 $15.38 Charleston/N Ch. 1,324 14,578,245 1,163,995 1,200, % 63,535 33, ,057 $18.63 Charlotte 2,049 43,640,767 3,441,867 3,628, % 493, ,003 64,360 $18.95 Chattanooga 318 9,571, , , % 210,586 2,246 40,000 $14.99 Chicago 6, ,142,503 26,398,235 27,605, % (611,855) 798, ,865 $21.13 Cincinnati 1,022 36,014,141 3,878,804 3,893, % 401,044 42,586 0 $14.50 Cleveland 2,191 74,082,644 9,264,396 9,318, % 404,275 81, ,611 $16.45 Colorado Spring ,904,655 2,532,978 2,534, % (109,518) 0 22,640 $15.81 Columbia 1,481 22,828,752 1,388,286 1,483, % (10,712) 44, ,370 $15.21 Columbus 1,161 39,277,337 2,705,388 2,744, % (57,897) 49, ,555 $17.13 Columbus GA 391 5,831, , , % (85,901) 81,896 11,480 $14.58 Corpus Christi 373 6,787, , , % 151,976 85, ,000 $13.90 Dallas/Ft Worth 5, ,745,214 23,201,560 23,743, % 1,162,259 1,263,908 1,439,422 $20.77 Davenport/Molin ,764, , , % 145, ,000 $11.53 Dayton ,559,269 2,297,439 2,322, % 124, $14.56 Deltona/Daytona ,668, , , % 141,577 8,074 76,000 $12.22 Denver 3, ,937,098 10,302,859 10,746, % 786, , ,254 $22.24 Des Moines ,803, , , % 232,232 45, ,883 $12.47 Detroit 3, ,946,786 15,109,011 15,221, % 1,229, , ,783 $18.51 Duluth 74 3,077,348 82,882 82, % 30, $11.86 East Bay/Oaklan. 1,731 54,769,596 4,944,548 5,154, % 140,796 96,016 25,000 $26.60 El Paso 526 8,428, , , % (12,291) 60, ,502 $17.18 Erie 363 6,078, , , % (1,834) 0 0 $9.53 Evansville 415 5,869, , , % 110, $11.29 Fayetteville 517 4,372, , , % 86, ,568 $14.88 Fayetteville/Sp ,888, , , % 590, ,051 10,500 $16.03 Fort Smith 298 3,358,812 88,690 88, % 48, $11.59 Fort Wayne 432 9,435, , , % 175,623 19,967 0 $13.62 Fresno ,614,314 1,531,486 1,541, % 307,111 42,339 20,776 $17.51 Green Bay ,713, , , % 117,509 13,950 5,000 $ CoStar Group, Inc. The CoStar Office Report 23

29 National Third Quarter 2016 Figures at a Glance Class B Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Greensboro/Wins. 1,069 27,954,540 2,586,532 2,602, % 19,935 50,183 54,579 $14.58 Greenville/Spar. 1,915 20,758,074 1,499,066 1,608, % 176, , ,074 $14.63 Hampton Roads 1,592 26,985,340 3,461,072 3,502, % 165,348 91, ,080 $16.26 Hartford 1,418 40,288,979 2,747,531 2,794, % 294,112 70, ,050 $18.80 Hawaii ,997, , , % 61,705 11,130 10,919 $27.96 Houston 2, ,992,274 17,046,357 18,249, % (177,869) 563, ,530 $21.42 Huntington/Ashl ,566, , , % 106, ,000 $12.59 Huntsville ,609,832 1,093,729 1,156, % 233,855 31,236 6,000 $14.41 Indianapolis 2,486 53,291,055 3,002,875 3,149, % 715,580 83, ,500 $16.46 Inland Empire (. 3,046 44,517,352 4,597,381 4,671, % 236, , ,702 $20.05 Jackson ,120, , , % 95,220 87,686 6,000 $14.27 Jacksonville (F. 1,755 31,629,554 2,981,221 3,114, % 371,042 34,660 98,752 $17.57 Kansas City 1,896 62,041,964 5,814,824 5,911, % 443, ,321 $17.53 Killeen/Temple/ ,612, , , % (13,361) 8,284 0 $12.79 Kingsport/Brist ,687, , , % 99, ,000 $14.05 Knoxville ,233,136 1,010,455 1,019, % 344,238 80, ,740 $14.95 Lafayette 148 3,749, , , % 3, ,000 $16.03 Las Vegas 2,282 43,702,190 6,555,996 6,870, % (90,750) 194, ,783 $18.25 Lexington/Fayet ,699, , , % 100,752 11,800 61,150 $15.30 Lincoln ,888, , , % 156,021 24,750 0 $13.08 Little Rock/N L ,835, , , % 62,232 30, ,872 $16.11 Long Island (Ne. 4,140 83,085,871 6,760,357 6,804, % 169, ,435 1,411,129 $26.52 Los Angeles 5, ,900,507 17,087,720 17,386, % 1,715,482 1,074, ,219 $30.25 Louisville 1,221 25,647,241 2,585,770 2,662, % (145,863) 10, ,615 $15.40 Lubbock 236 4,735, , , % 55,186 23,698 54,795 $16.00 Madison ,527,295 1,147,209 1,201, % 487, ,000 26,250 $14.97 McAllen/Edinbur ,576, , , % 90,303 24,280 66,538 $15.70 Memphis 1,271 27,733,120 3,087,282 3,202, % 21,030 61,942 0 $16.46 Miami-Dade Coun 1,164 47,155,846 4,925,458 5,013, % 247, , ,380 $28.82 Milwaukee 1,494 47,812,043 3,741,324 3,822, % 799,946 33,300 10,000 $15.79 Minneapolis 2,086 99,082,283 7,441,004 7,711, % 240, , ,824 $17.46 Mobile 849 9,902, , , % 37,729 11,619 41,627 $12.74 Montgomery 487 7,405, , , % 126,473 17,098 12,006 $12.90 Myrtle Beach/Co ,192, , , % 20,689 4,000 8,330 $15.07 Nashville 1,385 35,574,735 1,870,620 1,882, % 318,133 98, ,938 $21.01 New Orleans/Met ,517,543 1,823,072 1,863, % 252, ,062 27,500 $17.00 New York City 1, ,203,921 10,510,446 11,583, % (1,247,043) 18, ,701 $61.85 North Bay/Santa. 1,307 23,301,803 1,901,382 1,924, % 706, ,600 14,000 $25.07 Northern New Je. 5, ,125,784 15,863,439 16,367, % 1,066, , ,905 $21.97 Ocala 138 1,311, , , % 56, ,277 $13.72 Oklahoma City 1,733 32,816,423 2,309,828 2,348, % 848, , ,069 $16.45 Olympia 432 6,408, , , % 163,240 16,700 0 $17.56 Omaha/Council B ,270,092 1,531,145 1,569, % 307,162 16,944 23,648 $17.08 Orange County (. 2,980 86,035,465 7,180,789 7,394, % 965, ,065 64,137 $26.28 Orlando 2,983 49,128,607 4,837,735 4,907, % 710, , ,120 $18.92 Palm Beach Coun. 1,112 28,755,308 3,539,948 3,588, % 450, ,279 67,329 $25.90 Pensacola 610 6,419, , , % 57, ,020 $17.16 Peoria 266 6,941, , , % 63, $12.48 Existing Inventory Vacancy 24 The CoStar Office Report 2016 CoStar Group, Inc.

30 Figures at a Glance Third Quarter 2016 National Class B Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Philadelphia 8, ,901,703 16,472,385 16,753, % 1,023, , ,233 $20.10 Phoenix 4,550 99,544,449 15,680,556 16,251, % 1,494, , ,179 $21.75 Pittsburgh 2,245 60,241,395 4,506,500 4,574, % 580, , ,080 $19.42 Port St Lucie/F ,991, , , % 53,499 10,267 0 $14.52 Portland 1,521 45,324,434 3,487,298 3,612, % 312, , ,554 $22.02 Portland/South ,406, , , % 151,328 41,852 0 $15.35 Providence ,270,653 1,196,237 1,201, % 265, , ,437 $17.28 Raleigh/Durham 2,140 46,295,373 3,284,268 3,342, % 588, , ,278 $17.95 Reno/Sparks ,306,109 1,248,916 1,289, % (55,018) 17,036 16,975 $18.10 Richmond VA 1,247 29,350,152 2,297,148 2,360, % 107,906 60,378 26,910 $16.26 Roanoke 288 6,664, , , % (195,197) 0 16,800 $14.78 Rochester ,941,953 1,394,093 1,409, % 156,297 24,000 33,000 $13.19 Sacramento 1,691 45,428,651 5,415,431 5,558, % 378,204 65, ,460 $20.47 Salinas 259 4,521, , , % (31,326) 0 141,226 $21.47 Salt Lake City 2,746 59,272,314 2,886,384 3,232, % 1,027, , ,258 $17.14 San Antonio 1,566 42,767,384 4,017,156 4,063, % 564, , ,397 $19.35 San Diego 1,917 54,414,362 6,785,349 6,990, % 680, , ,971 $28.48 San Francisco 1,444 64,798,286 4,157,713 4,884, % 349, , ,835 $55.09 San Luis Obispo ,939,657 48,939 50, % 12, ,369 $19.25 Santa Barbara/S. 1,165 10,550, , , % 160,363 52,000 0 $22.48 Santa Cruz/Wats ,618, , , % 146, $22.47 Savannah 524 6,065, , , % 36,803 37,945 30,000 $17.12 Seattle/Puget S. 3,019 98,474,249 6,860,462 7,267, % 749,545 31, ,889 $25.92 Shreveport/Boss ,770, , , % 113, ,500 $13.94 South Bay/San J. 1,762 63,471,432 4,197,726 5,106, % 339, ,024 1,481,393 $39.79 South Bend/Mish ,639, , , % 170, $14.60 Southwest Flori. 1,682 20,238,282 1,702,861 1,727, % 422, ,044 67,000 $15.72 Spokane ,215,436 1,565,839 1,576, % 245,199 91,000 0 $15.26 Springfield 424 5,570, , , % 44,294 14,000 0 $14.12 St. Louis 2,068 59,160,335 6,701,724 6,719, % 419,751 11, ,658 $16.66 Stockton/Modest ,629, , , % 101, $14.51 Syracuse 1,073 23,006,429 1,946,653 1,953, % 280, ,075 24,000 $14.96 Tallahassee 1,524 18,011,069 1,285,292 1,329, % 276,691 18,346 60,455 $15.84 Tampa/St Peters. 4,841 66,416,150 6,722,568 6,830, % 820, , ,576 $19.23 Toledo ,100, , , % 367, ,655 10,000 $12.82 Tucson 1,267 17,456,506 2,318,696 2,345, % 169,044 83,685 33,271 $18.27 Tulsa ,153,143 3,714,215 3,776, % 306, , ,332 $14.28 Utica/Rome 266 5,693, , , % (30,498) 0 0 $10.78 Visalia/Porterv ,357, , , % 43,837 3,900 6,144 $17.49 Washington 4, ,325,107 24,144,920 25,180, % (146,642) 125, ,860 ###### West Michigan 2,062 42,310,797 3,469,765 3,496, % 902, , ,968 $13.56 Westchester/So. 2,303 62,470,285 7,831,357 7,883, % 710, ,332 35,510 $26.14 Wichita ,621,275 1,168,808 1,176, % 95, ,400 $14.02 Wilmington 603 7,143, , , % 148,288 28,454 52,182 $16.53 Yakima 422 3,395, , , % 81,437 18,760 0 $11.48 Youngstown/Warr 440 5,950, , , % 56, $10.77 Totals 199,167 4,964,324, ,935, ,932, % 37,711,876 18,448,377 24,644,844 $ CoStar Group, Inc. The CoStar Office Report 25

31 National Third Quarter 2016 Figures at a Glance Class C Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 2,248 15,549, , , % 139, $11.68 Albuquerque 1,365 7,679, , , % 203, $12.26 Anchorage 359 2,861, , , % (7,176) 0 0 $19.88 Asheville 410 3,195,173 59,415 59, % 39, $13.96 Atlanta 9,580 53,862,276 4,143,499 4,230, % 21, $14.67 Augusta/Richmon 933 3,947, , , % 59, $11.54 Austin 2,231 15,715, , , % (112,473) 0 0 $24.40 Bakersfield 614 3,898, , , % 33, $15.58 Baltimore 3,272 25,577,099 1,657,019 1,657, % 243, $18.41 Baton Rouge 1,783 12,361,573 1,079,455 1,103, % 385, $13.88 Beaumont/Port A ,567, , , % 5, $11.21 Birmingham 2,962 23,068,708 1,705,585 1,707, % 137, $12.80 Boise City/Namp. 1,701 6,602, , , % (6,493) 0 0 $11.87 Boston 8,356 85,748,065 3,287,280 3,345, % 659, $17.73 Bremerton/Silve ,460, , , % 41, $13.34 Broward County 2,761 20,575,540 1,211,853 1,222, % 243, $22.39 Brownsville/Har ,139,142 38,643 38, % 28, $11.32 Buffalo/Niagara ,401, , , % 89, $10.79 Charleston WV 404 2,778, , , % 32, $14.25 Charleston/N Ch. 1,633 7,712, , , % 40, $14.95 Charlotte 3,197 19,463, , , % 219, $16.05 Chattanooga 698 5,081, , , % 110, $15.38 Chicago 6,721 79,087,451 7,216,791 7,355, % 137, $18.37 Cincinnati 3,982 32,447,666 1,897,712 1,907, % 344, $13.25 Cleveland 4,847 44,727,528 4,778,754 4,826, % 122, $14.68 Colorado Spring ,314, , , % 69, $11.74 Columbia 1,288 6,055, , , % 51, $12.68 Columbus 2,942 30,121,765 1,507,616 1,521, % 191, $14.73 Columbus GA 603 2,918, , , % 35, $10.33 Corpus Christi 317 2,434, , , % 10, $10.97 Dallas/Ft Worth 5,984 47,096,140 3,600,322 3,633, % 123, $17.02 Davenport/Molin ,823, , , % 103, $10.31 Dayton 2,501 23,519,392 2,559,486 2,596, % 151, $11.92 Deltona/Daytona ,881, , , % 53, $10.41 Denver 3,262 26,043,080 1,094,531 1,103, % 214, $18.02 Des Moines 614 5,028, , , % 143, $11.69 Detroit 6,073 47,367,851 4,411,081 4,427, % 525, $15.68 Duluth 371 2,858,230 80,194 80, % 61, $12.33 East Bay/Oaklan. 3,425 27,003,348 1,213,423 1,232, % 213, $21.73 El Paso 1,917 12,260, , , % (2,891) 0 0 $15.28 Erie 400 2,511, , , % 13, $9.92 Evansville 349 3,181, , , % 16, $10.34 Fayetteville 436 1,817, , , % 13, $11.49 Fayetteville/Sp ,699, , , % 97, $13.77 Fort Smith 211 1,222,042 27,059 27, % 45, $8.97 Fort Wayne 651 5,769, , , % 113, $12.01 Fresno 1,942 15,931,311 1,044,316 1,044, % 142, $13.88 Green Bay 449 3,539, , , % 113, $ The CoStar Office Report 2016 CoStar Group, Inc.

32 Figures at a Glance Third Quarter 2016 National Class C Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Greensboro/Wins. 3,224 19,515,553 1,171,277 1,176, % 426, $12.31 Greenville/Spar. 2,357 10,280, , , % (18,168) 0 0 $11.46 Hampton Roads 1,647 9,454, , , % 84, $12.96 Hartford 4,281 34,704,841 2,195,152 2,195, % 405, $15.98 Hawaii 742 7,596, , , % (16,758) 0 0 $22.80 Houston 3,658 39,786,120 2,861,712 2,875, % (15,710) 0 0 $17.79 Huntington/Ashl ,758, , , % (22,772) 0 0 $8.49 Huntsville 543 6,012, , , % 228, $11.09 Indianapolis 2,843 21,984,351 1,421,150 1,434, % 255, $13.66 Inland Empire (. 3,046 20,139,800 1,373,662 1,389, % 217, $15.41 Jackson 792 5,694, , , % 44, $12.59 Jacksonville (F. 2,612 14,324,324 1,255,498 1,259, % 34, $15.97 Kansas City 2,355 23,124,133 1,478,331 1,484, % 391, $13.73 Killeen/Temple/ ,324, , , % 16, $7.88 Kingsport/Brist ,995, , , % (26,977) 0 0 $10.48 Knoxville 2,189 15,514, , , % 153, $12.39 Lafayette 467 3,971, , , % 67, $14.42 Las Vegas 1,539 8,456,279 1,057,894 1,061, % 16, $13.64 Lexington/Fayet ,440, , , % (32,128) 0 0 $10.84 Lincoln 234 1,585,167 43,469 43, % 40, $12.08 Little Rock/N L. 2,105 19,919, , , % 50, $13.72 Long Island (Ne. 5,960 50,703,049 2,212,425 2,254, % 347, $24.49 Los Angeles 11,365 87,650,934 3,546,667 3,614, % 289,633 3,504 0 $27.39 Louisville 2,265 17,869, , , % 122, $13.28 Lubbock 969 5,488, , , % (109,612) 0 0 $11.18 Madison 587 4,458, , , % 59, $10.59 McAllen/Edinbur ,736, , , % (16,856) 0 0 $14.24 Memphis 1,499 12,238,172 1,188,965 1,188, % 123, $12.38 Miami-Dade Coun 3,035 26,104,367 1,256,948 1,261, % 93, $25.77 Milwaukee 2,117 17,103, , , % 344, $12.26 Minneapolis 3,856 40,293,508 2,187,179 2,224, % 147, $15.09 Mobile 1,247 5,818, , , % (2,095) 0 0 $10.67 Montgomery 806 5,568, , , % 28, $10.69 Myrtle Beach/Co ,248,852 48,685 48, % (17,003) 0 0 $11.26 Nashville 2,882 20,908, , , % 135, $18.67 New Orleans/Met. 2,470 19,159, , , % 273, $14.83 New York City 1,923 71,396,318 3,563,600 3,771, % (617,753) 0 0 $55.12 North Bay/Santa. 2,358 14,154, , , % 190, $18.92 Northern New Je. 10,834 82,700,946 6,466,268 6,520, % 108, $19.84 Ocala 479 3,095, , , % 34, $11.72 Oklahoma City 2,587 17,546,075 1,623,009 1,627, % 104, $13.02 Olympia 424 2,740, , , % 30, $15.07 Omaha/Council B ,620, , , % 135, $12.33 Orange County (. 2,803 22,230, , , % 59, $21.57 Orlando 5,078 28,644,989 1,710,557 1,716, % 328, $16.36 Palm Beach Coun. 1,563 11,734, , , % 86, $23.03 Pensacola 1,373 7,451, , , % 111, $12.38 Peoria 251 2,410, , , % 28, $11.25 Existing Inventory Vacancy 2016 CoStar Group, Inc. The CoStar Office Report 27

33 National Third Quarter 2016 Figures at a Glance Class C Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Philadelphia 14, ,300,463 6,825,556 6,867, % 506,446 2,797 0 $17.80 Phoenix 3,385 22,913,982 2,568,334 2,610, % 191, $16.44 Pittsburgh 4,337 29,303,886 1,520,616 1,527, % 559, $15.18 Port St Lucie/F ,572, , , % 3, $14.57 Portland 3,561 24,100,985 1,066,829 1,080, % 170, $17.55 Portland/South. 1,281 11,198, , , % 105, $12.10 Providence 2,126 16,914, , , % 263, $14.64 Raleigh/Durham 2,247 15,216, , , % 62, $16.27 Reno/Sparks 832 6,981, , , % 110, $15.08 Richmond VA 1,739 12,439, , , % 153, $12.29 Roanoke 712 5,933, , , % $11.71 Rochester 1,188 10,560, , , % 30, $12.25 Sacramento 2,943 29,402,711 3,346,730 3,353, % 353, $17.37 Salinas 565 3,679,231 88,597 91, % 89, $19.08 Salt Lake City 1,710 12,663, , , % 174, $12.31 San Antonio 2,041 16,266, , , % 185, $16.08 San Diego 3,143 24,357,905 1,330,914 1,352, % 218, $21.93 San Francisco 2,111 24,164, , , % (74,805) 0 0 $49.11 San Luis Obispo ,936,971 50,323 50, % 28, $18.91 Santa Barbara/S ,457,275 41,707 41, % 124, $11.44 Santa Cruz/Wats ,671,519 49,285 51, % 8, $14.80 Savannah 905 4,956, , , % 56, $14.64 Seattle/Puget S. 4,447 30,138,800 1,013,936 1,039, % 359, $21.03 Shreveport/Boss ,504, , , % 4, $11.84 South Bay/San J. 2,599 21,610,041 1,059,516 1,091, % 161, $30.70 South Bend/Mish ,448, , , % 68, $12.23 Southwest Flori. 1,474 8,811, , , % 53, $12.92 Spokane 653 4,109, , , % 10, $10.30 Springfield 298 2,240, , , % 88, $10.86 St. Louis 3,195 30,717,507 2,202,497 2,202, % 420, $14.12 Stockton/Modest. 1,264 8,870, , , % 129, $13.74 Syracuse 1,009 9,225, , , % 55, $10.66 Tallahassee 686 2,780, , , % 12, $12.79 Tampa/St Peters. 8,129 49,815,744 3,033,114 3,055, % 505, $15.81 Toledo 2,083 16,783,005 1,466,042 1,470, % 78, $10.67 Tucson 1,207 5,213, , , % 49, $14.96 Tulsa 1,786 13,311, , , % 130, $12.57 Utica/Rome 355 3,017,891 86,136 86, % 58, $10.27 Visalia/Porterv ,005, , , % 59, $12.33 Washington 4,204 36,879,092 2,630,333 2,670, % (228,168) 0 0 $26.72 West Michigan 4,028 28,845,387 1,858,188 1,861, % 343, $10.03 Westchester/So. 4,987 44,288,172 3,234,330 3,258, % 622, $20.80 Wichita 986 7,452, , , % 56, $9.01 Wilmington 1,144 4,550, , , % 43, $11.46 Yakima ,306 55,301 55, % (15,388) 0 0 $11.32 Youngstown/Warr 1,361 8,721, , , % $9.11 Totals 303,952 2,374,867, ,754, ,430, % 16,833,870 6,301 0 $ The CoStar Office Report 2016 CoStar Group, Inc.

34 Figures at a Glance Third Quarter 2016 National Total Office Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 3,969 63,621,172 2,926,398 2,964, % 963,347 55, ,468 $14.96 Albuquerque 3,021 37,054,415 2,919,524 2,993, % 968,940 42,853 18,000 $15.36 Anchorage ,489, , , % (5,599) 16,000 0 $27.24 Asheville 1,257 12,278, , , % 187,358 84, ,000 $15.76 Atlanta 15, ,579,442 35,157,292 36,776, % 671, ,236 4,678,454 $21.78 Augusta/Richmon 1,692 13,632,244 1,064,431 1,083, % 191,494 16,521 24,000 $12.79 Austin 4,567 95,664,921 7,231,569 7,863, % 824, ,444 2,218,471 $32.77 Bakersfield 1,134 13,333, , , % 140,426 67,600 58,600 $18.74 Baltimore 6, ,564,389 13,877,919 14,150, % 769, ,990 2,134,276 $22.28 Baton Rouge 2,384 22,644,466 2,448,328 2,524, % 85,053 81, ,992 $16.80 Beaumont/Port A ,159, , , % 10,757 12,825 5,000 $13.91 Birmingham 3,891 58,190,326 6,293,912 6,603, % (75,646) 38, ,940 $16.68 Boise City/Namp. 2,875 29,043,729 1,975,689 2,019, % 320,091 74, ,680 $16.29 Boston 13, ,080,429 30,069,129 32,474, % 3,904,662 2,830,353 5,091,348 $21.09 Bremerton/Silve ,951, , , % 19, $17.38 Broward County 4,078 69,266,803 6,771,777 7,001, % 1,032, , ,521 $26.00 Brownsville/Har ,682, , , % 89,267 25,072 0 $16.14 Buffalo/Niagara. 1,790 38,920,201 3,045,691 3,057, % 493,994 75,000 64,000 $15.94 Charleston WV ,573,957 1,041,775 1,053, % (54,391) 0 35,400 $15.66 Charleston/N Ch. 3,035 27,699,101 1,683,450 1,738, % 372, , ,070 $20.39 Charlotte 5, ,328,997 8,064,107 8,480, % 909, ,337 3,138,137 $22.70 Chattanooga 1,036 17,376,915 1,173,333 1,254, % 341,913 2,246 40,000 $16.53 Chicago 13, ,704,237 59,280,316 62,355, % (902,263) 1,653,370 6,444,176 $23.35 Cincinnati 5,183 97,614,058 9,757,997 9,829, % 1,674, , ,874 $16.08 Cleveland 7, ,560,230 16,638,987 16,805, % 1,311, , ,111 $17.18 Colorado Spring. 1,720 28,727,195 3,205,664 3,212, % 65, ,640 $16.41 Columbia 2,797 32,142,891 2,125,252 2,236, % 175, , ,370 $15.75 Columbus 4,279 97,798,457 6,893,367 7,126, % 847, ,673 1,524,555 $17.27 Columbus GA 1,003 9,449, , , % (51,636) 81,896 11,480 $13.01 Corpus Christi ,160, , , % 167,587 85, ,000 $15.94 Dallas/Ft Worth 11, ,715,902 49,086,132 51,132, % 3,412,245 4,663,536 11,802,715 $24.08 Davenport/Molin ,846, , , % 255, ,000 $11.23 Dayton 3,034 43,028,353 5,774,455 5,868, % 244, $14.48 Deltona/Daytona. 1,695 10,994, , , % 198,451 8,074 76,000 $11.74 Denver 7, ,944,418 17,497,205 18,866, % 1,446,904 1,138,038 5,180,281 $24.94 Des Moines 1,361 35,853,619 1,572,694 1,639, % 534,032 45, ,883 $13.30 Detroit 9, ,945,705 24,575,365 24,823, % 3,051, ,566 1,021,357 $18.80 Duluth 455 7,071, , , % 299, ,000 0 $13.60 East Bay/Oaklan. 5, ,065,514 8,438,202 8,786, % 571,607 96, ,700 $28.89 El Paso 2,448 21,888,886 1,536,463 1,546, % (15,719) 60, ,502 $16.03 Erie 766 8,934, , , % 13, $9.99 Evansville ,147, , , % 141, ,500 $11.33 Fayetteville 964 6,932, , , % 86, ,568 $14.65 Fayetteville/Sp. 1,251 14,625, , , % 754, , ,500 $17.24 Fort Smith 509 4,580, , , % 94, $10.77 Fort Wayne 1,101 17,074,048 1,116,794 1,145, % 565, ,850 0 $13.65 Fresno 2,852 32,032,033 2,867,277 2,896, % 450,958 42,339 20,776 $16.77 Green Bay 1,027 15,446,413 1,213,362 1,232, % 291,923 13,950 5,000 $ CoStar Group, Inc. The CoStar Office Report 29

35 National Third Quarter 2016 Figures at a Glance Total Office Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Greensboro/Wins. 4,362 56,137,246 5,098,782 5,225, % 605, ,883 54,579 $14.82 Greenville/Spar. 4,343 37,733,860 2,624,934 2,807, % 474, , ,074 $16.02 Hampton Roads 3,380 49,890,142 5,404,299 5,531, % 319, , ,080 $17.03 Hartford 5,774 94,902,519 7,863,439 8,088, % 514,253 70, ,050 $18.83 Hawaii 1,230 33,813,549 1,545,093 1,594, % 86 11,130 89,419 $27.46 Houston 7, ,382,325 39,915,461 44,825, % 1,282,583 5,877,705 3,917,542 $27.69 Huntington/Ashl. 1,043 8,816, , , % 83, ,000 $11.06 Huntsville 1,018 20,882,567 2,018,558 2,081, % 502,491 82,236 6,000 $13.54 Indianapolis 5, ,947,131 7,110,424 7,427, % 1,276, , ,500 $17.22 Inland Empire (. 6,189 73,139,149 6,945,161 7,045, % 531, , ,702 $19.90 Jackson 1,637 23,417,396 1,400,937 1,426, % 330, ,186 47,475 $16.00 Jacksonville (F. 4,467 63,056,288 5,994,753 6,193, % 388, ,425 98,752 $18.50 Kansas City 4, ,776,530 10,307,151 10,788, % 1,500, ,000 1,982,529 $18.07 Killeen/Temple/ ,026, , , % 3,333 8,284 0 $10.86 Kingsport/Brist ,207, , , % 372, ,000 30,000 $12.41 Knoxville 2,913 33,448,634 2,083,213 2,165, % 607, , ,740 $14.99 Lafayette 621 8,108, , , % 234, ,938 50,000 $15.11 Las Vegas 3,906 62,941,994 9,338,744 9,733, % 50, , ,697 $19.65 Lexington/Fayet. 1,262 18,722,375 1,574,730 1,625, % 155,744 79,417 61,150 $15.97 Lincoln ,929, , , % 186,628 24,750 55,000 $13.27 Little Rock/N L. 2,454 33,900,498 1,552,282 1,590, % 163,322 30, ,872 $15.15 Long Island (Ne. 10, ,110,266 12,115,211 12,605, % 796, ,000 3,224,387 $28.56 Los Angeles 18, ,689,680 44,509,434 45,825, % 3,298,216 1,735,549 3,595,692 $32.77 Louisville 3,597 55,238,901 4,774,775 4,878, % (64,172) 219, ,115 $16.38 Lubbock 1,212 10,782, , , % (29,293) 69,698 54,795 $14.11 Madison 1,478 33,057,325 1,795,029 1,855, % 803, , ,250 $15.06 McAllen/Edinbur ,502, , , % 85,442 24,280 66,538 $15.27 Memphis 2,861 51,870,017 5,251,148 5,373, % 182,162 61,942 1,375,000 $16.60 Miami-Dade Coun 4, ,777,231 9,689,544 9,937, % 377, ,968 1,685,607 $32.78 Milwaukee 3,709 79,869,177 6,308,428 6,445, % 1,543, ,864 1,789,500 $16.41 Minneapolis 6, ,267,280 13,905,540 14,330, % 1,291,340 1,658, ,574 $19.22 Mobile 2,108 17,152,698 1,027,028 1,079, % (30,245) 11, ,667 $13.00 Montgomery 1,315 15,973,445 1,041,312 1,070, % 174,878 17,098 12,006 $13.61 Myrtle Beach/Co ,897, , , % 16,308 4,000 8,330 $14.36 Nashville 4,416 79,427,755 3,209,759 3,405, % 910, ,278 3,297,924 $24.49 New Orleans/Met. 3,196 47,942,139 3,677,452 3,782, % 567, ,062 79,900 $17.04 New York City 3, ,378,987 42,163,835 45,934, % (1,146,769) 1,864,627 13,507,005 $65.11 North Bay/Santa. 3,711 41,188,758 3,853,748 3,881, % 350, ,600 14,000 $25.03 Northern New Je. 16, ,644,134 47,164,730 49,718, % 1,480,839 1,173,798 1,356,664 $24.73 Ocala 619 4,523, , , % 86, ,277 $12.63 Oklahoma City 4,364 58,427,825 4,422,110 4,471, % 1,000, ,760 1,411,785 $16.03 Olympia 859 9,674, , , % 194,121 16,700 0 $16.62 Omaha/Council B. 1,805 45,177,695 2,414,403 2,454, % 685, , ,459 $17.28 Orange County (. 6, ,039,098 13,325,571 13,785, % 1,342, ,109 2,430,157 $27.73 Orlando 8, ,278,597 9,160,379 9,331, % 1,807, , ,120 $19.44 Palm Beach Coun. 2,808 55,149,066 6,244,693 6,360, % 798, ,279 67,329 $27.82 Pensacola 1,992 14,295, , , % 215,437 27, ,056 $15.09 Peoria ,340, , , % 85, $12.17 Existing Inventory Vacancy 30 The CoStar Office Report 2016 CoStar Group, Inc.

36 Figures at a Glance Third Quarter 2016 National Total Office Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Philadelphia 23, ,380,309 36,890,354 37,788, % 2,702,068 1,075,621 3,350,498 $22.33 Phoenix 8, ,983,117 25,127,061 26,183, % 2,932,406 1,898,905 2,047,897 $23.10 Pittsburgh 6, ,944,286 9,392,899 9,785, % 1,323, , ,643 $20.51 Port St Lucie/F ,785, , , % 55,385 10,267 60,000 $15.72 Portland 5,283 99,132,940 6,918,019 7,204, % 1,436,701 1,178,989 1,545,056 $23.49 Portland/South. 1,752 24,572,043 1,282,417 1,339, % 247,309 41,852 0 $14.46 Providence 2,839 42,617,590 2,902,583 2,932, % 594, , ,437 $16.98 Raleigh/Durham 4,714 96,628,103 6,029,352 6,481, % 1,311, ,447 2,603,002 $20.85 Reno/Sparks 1,611 19,022,980 2,088,085 2,139, % 53,144 17,036 16,975 $17.57 Richmond VA 3,142 62,873,936 4,864,671 5,359, % 65, , ,534 $17.69 Roanoke 1,007 13,458,712 1,475,798 1,482, % (201,342) 0 16,800 $14.19 Rochester 1,958 42,358,273 3,388,966 3,470, % 273, , ,000 $13.16 Sacramento 4, ,028,097 11,591,771 11,824, % 621,729 96, ,460 $21.07 Salinas 824 8,200, , , % 57, ,226 $20.82 Salt Lake City 4,668 97,289,185 5,229,681 5,925, % 3,202,542 3,360,593 1,753,116 $19.57 San Antonio 3,719 74,296,047 7,282,559 7,417, % 1,026, , ,047 $20.45 San Diego 5, ,141,635 11,431,861 12,180, % 1,119, , ,867 $30.50 San Francisco 3, ,896,610 9,814,574 11,441, % 1,742,583 1,826,731 5,190,787 $55.28 San Luis Obispo ,876,628 99, , % 41, ,369 $19.06 Santa Barbara/S. 1,428 12,079, , , % 284,460 52,000 0 $20.25 Santa Cruz/Wats ,290, , , % 154, $21.25 Savannah 1,439 11,466, , , % 107,024 37,945 30,000 $16.86 Seattle/Puget S. 7, ,570,170 12,458,664 13,111, % 3,502,911 1,138,326 7,972,967 $30.96 Shreveport/Boss ,813,614 1,251,976 1,265, % 240, ,000 57,500 $12.34 South Bay/San J. 4, ,171,153 7,933,920 9,095, % 1,186,789 2,163,316 10,090,399 $39.97 South Bend/Mish ,171, , , % 234, $14.35 Southwest Flori. 3,225 32,814,486 2,812,582 2,841, % 518, ,044 67,000 $16.17 Spokane 1,657 21,709,652 1,931,120 1,953, % 266,457 91,000 0 $15.14 Springfield 731 8,719, , , % 144,867 14,000 0 $13.47 St. Louis 5, ,911,572 11,962,277 12,253, % 1,138, ,600 1,207,658 $18.06 Stockton/Modest. 1,939 20,461,153 1,588,953 1,601, % 370, ,000 $14.59 Syracuse 2,102 35,449,243 2,864,759 2,920, % 424, ,075 24,000 $14.30 Tallahassee 2,224 22,141,104 1,462,699 1,507, % 298,342 18,346 80,695 $15.77 Tampa/St Peters. 13, ,241,439 12,408,948 12,757, % 1,796, , ,576 $20.07 Toledo 2,619 30,830,736 2,523,440 2,539, % 476, , ,400 $13.39 Tucson 2,495 25,330,381 2,885,955 2,918, % 286, ,950 33,271 $18.68 Tulsa 2,696 51,756,687 5,081,714 5,156, % 410, , ,332 $14.74 Utica/Rome 622 8,833, , , % 28, $10.61 Visalia/Porterv. 1,113 6,362, , , % 102,875 3,900 6,144 $14.37 Washington 10, ,262,378 67,801,436 70,916, % (265,353) 1,589,907 10,672,155 $35.19 West Michigan 6,174 79,938,353 5,689,483 5,719, % 1,378, , ,968 $12.83 Westchester/So. 7, ,548,238 20,133,396 20,621, % 2,023, , ,510 $28.12 Wichita 1,663 23,652,300 1,582,858 1,590, % 147, ,400 $12.98 Wilmington 1,766 12,979, , , % 199,124 28, ,482 $16.44 Yakima 595 4,360, , , % 66,049 18,760 0 $11.44 Youngstown/Warr 1,808 15,117, , , % 100,559 50,000 0 $10.13 Totals 521,091 10,743,752,919 1,012,839,330 1,058,841, % 88,487,333 60,025, ,486,814 $ CoStar Group, Inc. The CoStar Office Report 31

37 National Third Quarter 2016 Figures at a Glance Class A Market Statistics Existing Inventory Third Quarter 2016, Grouped by CBD vs Suburban Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 2,775 1,175,610, ,199, ,744, % 7,073,722 8,493,594 46,950,465 $36.08 Suburban 15,197 2,228,949, ,949, ,735, % 26,867,865 33,077,491 75,891,505 $28.07 Class A Totals 17,972 3,404,560, ,148, ,479, % 33,941,587 41,571, ,841,970 $30.20 Class B Market Statistics Existing Inventory Third Quarter 2016, Grouped by CBD vs Suburban Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 15, ,100,993 84,029,875 87,614, % 1,523,762 2,100,258 2,071,970 $26.96 Suburban 183,875 4,054,223, ,905, ,317, % 36,188,114 16,348,119 22,572,874 $20.39 Class B Totals 199,167 4,964,324, ,935, ,932, % 37,711,876 18,448,377 24,644,844 $21.28 Class C Market Statistics Existing Inventory Third Quarter 2016, Grouped by CBD vs Suburban Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 24, ,826,152 25,127,517 25,602, % 359, $23.46 Suburban 279,667 2,011,041, ,627, ,827, % 16,474,502 6,301 0 $16.51 Class C Totals 303,952 2,374,867, ,754, ,430, % 16,833,870 6,301 0 $17.37 Class A&B Market Statistics Existing Inventory Third Quarter 2016, Grouped by CBD vs Suburban Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 18,067 2,085,711, ,229, ,358, % 8,597,484 10,593,852 49,022,435 $32.38 Suburban 199,072 6,283,173, ,855, ,052, % 63,055,979 49,425,610 98,464,379 $23.37 Class A&B Totals 217,139 8,368,885, ,084, ,411, % 71,653,463 60,019, ,486,814 $25.09 Class A,B&C Market Statistics Existing Inventory Third Quarter 2016, Grouped by CBD vs Suburban Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 42,352 2,449,538, ,356, ,961, % 8,956,852 10,593,852 49,022,435 $31.50 Suburban 478,739 8,294,214, ,482, ,880, % 79,530,481 49,431,911 98,464,379 $22.30 Grand Totals 521,091 10,743,752,919 1,012,839,330 1,058,841, % 88,487,333 60,025, ,486,814 $ The CoStar Office Report 2016 CoStar Group, Inc.

38 Figures at a Glance Third Quarter 2016 National 2016 CoStar Group, Inc. The CoStar Office Report 33

39 National Third Quarter 2016 Leasing Activity Historical Rental Rates* Based on Full-Service Equivalent Rental Rates $35.00 Class A Class B Class C Total Market $30.00 Dollars/SF/Year $25.00 $20.00 $15.00 $ q q q q q q q q q q q q q q q q * Select markets included in this historical chart - see Methodology page. Vacancy by Available Space Type Percent of All Vacant Space in Direct vs. Sublet Direct 4% Sublet Vacancy by Class Percent of All Vacant Space by Class Class A 14% Class B Class C 47% 39% 96% Future Space Available Space Scheduled to be Available for Occupancy in the Future* q q q q q q * includes Under Construction Spaces 34 The CoStar Office Report 2016 CoStar Group, Inc.

40 Leasing Activity Third Quarter 2016 National Select Top Oce Leases Based on Leased Square Footage For Deals Signed in 2016 Building Market SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 55 Water St* New York City 900,027 1st McGraw Hill Financial, Inc. CBRE CBRE Avenue of the Americas* New York City 890,861 2nd UBS Group CBRE RXR Realty 3 10 Hudson Yards* New York City 694,000 3rd Coach, Inc. CBRE N/A 4 Leo Burnett Building* Chicago 642,545 2nd Leo Burnett Worldwide, Inc. Cushman & Wakeeld CBRE 5 Moett Gateway South Bay/San Jose 595,840 3rd Google CBRE Newmark Cornish & Carey 6 BHP Billiton Petroleum Houston 593,850 2nd BHP Billiton Petroleum Cushman & Wakeeld Transwestern 7 Verizon Headquarters* Dallas/Ft Worth 576,138 3rd Verizon N/A N/A 8 Randolph West Chicago 486,400 2nd McDonalds Corporation CBRE Sterling Bay Companies 9 Lakepointe Oce Park* Charlotte 470,000 2nd Belk Newmark Grubb Knight Frank N/A Colonnade Pky Birmingham 456,823 1st Southern Co. N/A J.H. Berry & Gilbert, Inc Giralda Farms Northern New Jersey 431,493 3rd Allergan JLL Newmark Grubb Knight Frank 12 Alexandria Technology Campus San Francisco 404,109 1st Verily N/A Direct Deal 13 Nationwide Building A Columbus 401,681 2nd Cardinal Health CBRE CBRE 14 Woodland Corporate Park* Indianapolis 387,308 2nd Interactive Intelligence Inc NAI Meridian LLC JLL 15 Skyport* South Bay/San Jose 356,310 2nd Qualcomm Atheros N/A Colliers International 16 Bell Works - Oce Northern New Jersey 350,000 3rd icims CBRE The Garibaldi Group 17 Two White Flint North* Washington 347,922 2nd Nuclear Regulatory Comm US N/A Lerner Enterprises Broadway* Denver 346,081 2nd TIAA N/A Cushman & Wakeeld 19 Cross Point 1 Boston 342,288 2nd Kronos Incorporated Cushman & Wakeeld CBRE - New England 20 Metrotech Center - North Bldg* Long Island (New York) 339,993 2nd New York City Fire Department Direct Deal Direct Deal 21 Two Riverfront Plaza* Northern New Jersey 339,178 2nd Panasonic Corp Of North America N/A N/A 22 Two Liberty Place* Philadelphia 330,540 3rd CIGNA Health Management, Inc. N/A CBRE 23 Three Constitution Square Washington 316,869 1st The United States Department of Justice CBRE Cushman & Wakeeld 24 One Potomac Yard - South Tower* Washington 312,460 1st U.S. Environmental Protection Agency N/A N/A 25 CityPlace 2 Houston 303,137 2nd American Bureau of Shipping Cushman & Wakeeld JLL; Crimson Services, LLC 26 Pentagon City Two* Washington 300,749 2nd Transportation Security Administration Direct Deal Brookeld Oce Properties, Inc. 27 Coda - Coda Atlanta 289,000 1st Georgia Tech Board of Regents of the University Direct Deal 28 The Atlantic at City Walk Hampton Roads 287,857 1st ADP N/A CBRE Hampton Roads 29 Urban Union Seattle/Puget Sound 285,000 1st Amazon.com, Inc. N/A Broderick Group, Inc N Franklin St Chicago 272,569 1st CNA Savills Studley John Buck Company 31 One Boston Place* Boston 269,762 1st Bank of New York Mellon JLL CBRE - New England Mill Run Cir* Baltimore 269,271 1st CareFirst BlueCross BlueShield JLL N/A 33 Pentagon City One* Washington 251,167 2nd Transportation Security Administration Direct Deal Brookeld Oce Properties, Inc. 34 Three Gotham Center Long Island (New York) 250,000 2nd WeWork Direct Deal Direct Deal Monument Cir Indianapolis 247,100 2nd Salesforce N/A CBRE Main at Texas Houston 237,708 3rd United Airlines CBRE Colvill Oce Properties Bush St San Francisco 236,942 3rd Twitch N/A CBRE 38 Renaissance Tower Dallas/Ft Worth 229,000 3rd Environmental Protection Agency N/A CBRE 39 WestMark One Richmond VA 227,036 1st Suntrust N/A RER Financial Group, LLC 40 Signet Jewelers Dallas/Ft Worth 225,000 2nd Signet Jewelers Newmark Grubb Knight Frank N/A * Renewal 2016 CoStar Group, Inc. The CoStar Office Report 35

41 National Third Quarter 2016 Sales Activity The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates From Each Region 8.0% Cap Rate Price/SF $470 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% $450 $430 $410 $390 $370 $350 $330 $310 Dollars/SF 1.0% q q q $290 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales From July June 2016 $35,000 Sales Volume Price/SF $350 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $30,000 $25,000 $20,000 $15,000 $10,000 $300 $250 $200 $150 $100 Price/SF < 50,000 SF 7,057 83,603,973 $16,606,410,809 $ % 50K-249K SF 250K-499K SF 1, ,148,026 $30,212,975,794 $ % ,201,739 $22,978,298,048 $ % $5,000 $50 $0 $0 >500K SF ,933,635 $35,164,258,907 $ % q q q q Source: CoStar COMPS Source: CoStar COMPS Historical Price/SF Average Based on Office Building Sales of 15,000 SF and Larger Historical Cap Rate Average Based on Office Building Sales of 15,000 SF and Larger $ % $290 Dollars per SF $270 $250 $230 $210 Cap Rate Percentage 8.0% 7.5% 7.0% $ % $ % q q q q 2016 Source: CoStar COMPS Source: CoStar COMPS 36 The CoStar Office Report 2016 CoStar Group, Inc.

42 Third Quarter 2016 National 2016 CoStar Group, Inc. The CoStar Office Report 37 Sales Activity

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