The Woodlands office submarket snapshot

Transcription

1 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q2 218 office submarket snapshot Lisa Bridges Director of Market Research Houston Once again, office submarket performed well over the quarter, posting 97,754 SF of positive net absorption in Q The average vacancy rate continued to decrease, dropping from 9.8% to 8.2%. Market Indicators VACANCY Research Forest Lakeside Building 4 (2445 Technology Forest Blvd.), completed two subleases over the quarter. Dover Energy Automation subleased 23,535 SF and Star West Generation subleased 6,476 SF. Patrinely Group began construction on City Place 1 (17 City Plaza Dr.) in Springwoods Village. The 5-story, 141,7 sf building with 122,6 sf of office space is estimated to be completed in Q NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q2-218 Q1-218 Q2-218 Q1-218 AVG ($/SF) A 46 11,382, , % 57,65.5% 954, % 9.1% 82,21-2,626 $32.41 B 69 4,461,8 441,31 9.9% 45,976 1.% 487,7 1.9% 1.9% ,14 $26.24 C 5 131,696 25, %.% 25, % 31.2% 15,718-3,234 $24.88 Total 12 15,975,89 1,363, % 13,581.6% 1,466, % 9.8% 97,754-1,846 $3.27 WOODLANDS SUBMARKET MAP TEXAS 149 HOUSTON 1488 Magnolia Waller Hockley 1488 Tomball Spring 242 Kingwood 321 THE WOODLANDS 1488 Woodlands Parkway Research Forest Needham Rd. 242 Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Spring Stuebner To Houston CBD Sugar Land HOU 35 EFD 146 Richmond Pearland Clear Lake Gal

2 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy Rental Rate and Vacancy Percentage, TX $28. Rents Vacancy 18. $ $26. $25. $24. $23. $22. $ $2. 4. $ $18.. Available Sublease Space Available Sublease Space Q2 218 : 129,439 SF or 1.1% : 63,774 SF or 1.4% 4, 35, 3, 25, 2, 15, 1, 5, 2 Research Snapshot Q1 218 Office Colliers International

3 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

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5 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q1 218 office submarket snapshot Lisa Bridges Director of Market Research Houston office submarket remains positive during the first quarter with steady vacancy and positive absorption, while other Houston office submarkets continue to see high vacancy and negative net absorption. Over the quarter, average vacancy rate decreased by 4 basis points and leasing activity remained steady. Construction continues on CityPlace in Springwoods Village where tech giant HP Inc. preleased 378, SF and American Bureau of Shipping preleased 326,8 SF of office space. Completion of the buildings is expected in the latter part of 218. Market Indicators VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q1-218 Q4-217 Q1-218 Q4-217 AVG ($/SF) A 38 1,72, ,198 9.% 56,862.5% 1,19,6 9.5% 9.5% (2,949) 149,43 $33.33 B 69 4,43, ,88 9.4% 46, % 462, % 11.1% 3,27 8,656 $25.5 C 5 131,696 41, %.% 41, % 28.7% (3,234) (3,191) $24.81 Total ,283,33 1,419,36 9.3% 13,76.7% 1,523,12 1.% 1.4% 24,87 154,868 $. WOODLANDS SUBMARKET MAP TEXAS 149 HOUSTON 1488 Magnolia Waller Hockley 1488 Tomball Spring 242 Kingwood 321 THE WOODLANDS 1488 Woodlands Parkway Research Forest Needham Rd. 242 Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Spring Stuebner To Houston CBD Sugar Land 35 HOU EFD 146 Richmond Pearland Clear Lake Gal

6 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy Available Sublease Space - Available Sublease Space Q , 3, 25, 2, 15, 1, 5, : 14,749 SF or.9% : 86,184 SF or 1.9% 2 Research Snapshot Q1 218 Office Colliers International

7 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

8 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q3 217 office submarket remains positive during the third quarter Lisa Bridges Director of Market Research Houston office submarket remains positive during the third quarter with steady vacancy and positive absorption, while other Houston office submarkets continue to see high vacancy and negative net absorption. Over the quarter, average vacancy rate decreased by 3 basis points and leasing activity remained steady. Sabinal Energy leased 27,39 square feet in Three Hughes Landing in September. Construction continues on CityPlace in Springwoods Village where tech giant HP Inc. preleased 378, SF and American Bureau of Shipping leased 326,8 SF of office space. Completion of the buildings is expected in the latter part of 218. Market Indicators VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q3-217 Q2-217 Q3-217 Q2-217 AVG ($/SF) A 38 1,685,124 1,56, % 98,869.9% 1,155, % 1.9% 8,578 98,411 $35.4 B 7 4,429, , % 24,895.6% 482, % 11.6% 3,743-11,919 $25.58 C 5 131,696 34, %.% 34, % 3.9% 6,65 $25.27 Total ,246,178 1,548, % 123,764.8% 1,672,1 11.% 11.3% 45,386 86,492 $32.3 WOODLANDS SUBMARKET MAP TEXAS 149 HOUSTON 1488 Magnolia Waller Hockley 1488 Tomball Spring 242 Kingwood 321 THE WOODLANDS 1488 Woodlands Parkway Research Forest Needham Rd. 242 Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Spring Stuebner To Houston CBD Sugar Land HOU 35 EFD 146 Richmond Pearland Clear Lake Gal

9 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy Available Sublease Space - Available Sublease Space Q , 3, 25, 2, 15, 1, 5, : 156,414 SF or 1.4% : 76,872 SF or 1.7% 2 Research Snapshot Q3 217 Office Colliers International

10 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

11 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q2 217 office submarket continues to be a bright spot among Houston Lisa Bridges Director of Market Research Houston office submarket has been a bright spot among Houston submarkets during the past several years. Most of Houston s submarkets have seen rising vacancy and negative net absorption, while submarket has experienced quite the opposite. Over the quarter, average vacancy rate decreased by 6 basis points. Leasing activity remained steady and net absorption was positive. Construction continues on CityPlace in Springwoods Village where tech giant HP Inc. preleased 378, SF and American Bureau of Shipping leased 326,8 SF of office space. Completion of the buildings is expected in the latter part of 218. Market Indicators VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q2-217 Q1-217 Q2-217 Q1-217 AVG ($/SF) A 38 1,683,16 1,117, % 139, % 1,256, % 11.8% 98,411 83,394 $36.74 B 7 4,429, , % 16,36.4% 512, % 11.3% -11,919-36,891 $25.33 C 5 131,696 4, %.% 4, % 3.9% -12,951 $24.6 Total ,244,574 1,654,52 1.9% 155,641 1.% 1,81, % 11.9% 86,492 33,552 $32.41 WOODLANDS SUBMARKET MAP TEXAS 149 HOUSTON 1488 Magnolia Waller Hockley 1488 Tomball Spring 242 Kingwood 321 THE WOODLANDS 1488 Woodlands Parkway Research Forest Needham Rd. 242 Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Spring Stuebner To Houston CBD Sugar Land HOU 35 EFD 146 Richmond Pearland Clear Lake Gal

12 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy Available Sublease Space - Available Sublease Space Q , 3, 25, 2, 15, 1, 5, : 21,167 SF or 1.8% : 115,3 SF or 2.6% 2 Research Snapshot Q2 217 Office Colliers International

13 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

14 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q4 216 office market sees uptick in leasing activity and absorption in Q4 216 Lisa Bridges Director of Market Research Houston office market fared better than most of Houston s office submarkets, posting the third highest amount of net positive absorption in Q Q4 216 office market vacancy rate decreased 5 basis points over the quarter and by 22 basis points annually. Leasing activity increased 6.4% over the quarter and 54.6% over the year. Tech giant HP Inc. preleased 378, SF of office space at Springwoods Village, a 2,-acre mixed-use community just south of proper. Construction is scheduled to begin in early 217 and is expected to be completed in the third quarter of 218. Jones & Carter leased 27, square feet in Sierra Pines II and Hughes Landing reported leases totaling nearly 47, square feet. Market Indicators VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q4-216 Q3-216 Q4-216 Q3-216 AVG ($/SF) A 39 1,926,59 1,35, % 39,842.4% 1,345, % 12.8% 49,487 36,452 $36.43 B 7 4,47, , % 62, % 462, % 11.5% 46,57-18,621 $24.3 C 5 328,281 17, %.% 17, % 8.6% 1,56 $29.98 Total ,662,754 1,723, % 12,655.7% 1,825, % 12.3% 16,5 17,831 $33.55 WOODLANDS SUBMARKET MAP THE WOODLANDS 149 HOUSTON Woodlands Parkway Research Forest Needham Rd. 242 Waller 1488 Magnolia Hockley Tomball Spring Kingwood 321 Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Spring Stuebner To Houston CBD Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Sugar Land 35 HOU EFD 146 Richmond Pearland Clear Lake Gal

15 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy Available Sublease Space - Available Sublease Space Q , 3, 25, 2, 15, 1, 5, : 225,51 SF or 2.1% : 156,42 SF or 3.5% 2 Research Snapshot Q4 216 Office Colliers International

16 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright 215 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

17 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q3 216 office market not isolated from Houston s current market conditions Lisa Bridges Director of Market Research Houston office market continues to feel the effects of Houston s office market woes. is not isolated from Houston s current market conditions, but does fare better than most of Houston s other office submarkets. Q3 216 office market vacancy rate increased 1 basis points over the quarter, but even with this increase its vacancy rate is still lower than that of the other major Houston office submarkets. Leasing activity increased 3.4% over the quarter and 46.3% over the year. Webber, LLC signed a lease in 1725 Hughes Landing for 46,6 SF. The company will be moving in April 217 from its current location at 933 New Trails Dr where it occupies nearly 25, square feet. Market Indicators VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY Statistical Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q3-216 Q2-216 Q3-216 Q2-216 AVG ($/SF) A 39 1,926,59 1,319, % 75,48.7% 1,395, % 11.5% 36,452 1,798 $37.5 B 7 4,399, ,42 9.8% 69, % 5, % 11.1% -14,328-29,786 $24.45 C 4 38,161 25, %.% 25, % 8.2% $19.8 Total ,634,69 1,776, % 144,826.9% 1,92, % 11.3% 22,124-18,988 $32.57 WOODLANDS SUBMARKET MAP THE WOODLANDS 149 HOUSTON Research Forest Woodlands Parkway Needham Rd. 242 Waller 1488 Magnolia Hockley Tomball Spring Kingwood 321 Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Cypress IAH Humble Atascocita Lake Houston Crosby Mont B Spring Stuebner To Houston CBD Brookshire Katy Bellaire CBD 225 Pasadena Ship Channel 33 La Porte Baytown Sugar Land 35 HOU EFD 146 Richmond Pearland Clear Lake Gal

18 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% Available Sublease Space - Available Sublease Space Q3 216 : 277,68 SF or 2.5% 35, 3, 25, 2, 15, 1, 5, 2 Research Snapshot Q3 216 Office Colliers International

19 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright 215 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

20 Gosling Rd. To Houston CBD Research Snapshot THE WOODLANDS OFFICE Q1 216 Office Market Lisa Bridges Director of Market Research Houston Q1 216 Submarket Highlights The greater Houston metro is home to most major energy companies and its economy and real estate market can be positively or negatively affected by the price of oil. The Q1 216 office market continues to struggle due to the low price of oil, but it appears to be performing better than expected in a $4 per barrel economy. is not isolated from Houston s current market conditions, but does fare better than most of Houston s other office submarkets. Q1 216 office market vacancy rates decreased over the quarter with the exception of class C product. Net absorption remained positive and class Office Market Indicators VACANCY NET ABSORPTION CONSTRUCTION A rental rates rose. RENTAL RATE NEW SUPPLY Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE NET ABSORPTION RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q1-216 Q4-215 Q1-216 Q4-215 AVG ($/SF) A 37 1,51, , % 54,36.5% 96, % 9.% 36, ,284 $35.95 B 7 4,398,619 42,49 9.5% 64, % 484, % 11.6% 27,739-71,79 $23.88 C 4 38,161 25, %.% 25, %.3% -24,119 $19.8 Total ,28,237 1,297, % 118,23.8% 1,416, % 9.6% 4,546 37,494 $3.6 Woodlands Submarket Map 1488 In The News Huffsmith-Kohrville Woodlands Parkway Kuykendahl Research Forest Grogan s Mill Rd. Needham Rd The Texas Department of Transportation has recently completed the segments of the Grand Parkway (SH 99), from Interstate 1 West to U.S. Highway 59 North Spring Stuebner

21 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Rental Rate and Vacancy Percentage, TX $28. $27. $26. $25. $24. $23. $22. $21. $2. $19. $18. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% Available Sublease Space - Available Sublease Space Q1 216 : 33,38 SF or 3.1% : 138,558 SF or 3.2% 35, 3, 25, 2, 15, 1, 5, 2 Research Snapshot Q1 216 Office Colliers International

22 Absorption and Woodlands Office 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright 215 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

23 Gosling Rd. Research Snapshot THE WOODLANDS OFFICE Q3 215 Office Market Lisa Bridges Director of Market Research Houston Q3 215 Submarket Highlights > > Development Company signed a lease for 25,576 SF in Two Hughes Landing. > > rents decreased slightly over the quarter while class B rents remained flat. Office Market Indicators VACANCY > > Construction continues on 1735 Hughes Landing Blvd as well as on Three Hughes Landing. Both buildings are expected to deliver in 216. > > Construction of 1725 Hughes Landing will be completed in Q4 215 and there is a little over 162,12 SF of available space. Summary NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE NET ABSORPTION RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q3-215 Q2-215 Q3-215 Q2-215 AVG ($/SF) A 32 9,251,755 37,598 4.% 44,652.5% 415,25 4.5% 5.2% 68, ,559 $35.19 B 71 4,451,88 45, % 27,353.6% 433,12 9.7% 1.5% 54,74-115,935 $24.76 C 5 338,38 1,.3%.% 1,.3%.3% $19.8 Total 18 14,41, , % 72,5.5% 849,37 6.% 6.8% 123,22 336,624 $29.27 Woodlands Submarket Map 1488 In The News 249 Huffsmith-Kohrville 292 Woodlands Parkway Kuykendahl Research Forest Grogan s Mill Rd. Spring Stuebner Needham Rd. To Houston CBD Innovators in the Woods, a partnership between Houston Advanced Research Center in The Woodlands and Houston Technology Center North, is now open and accepting applicants to pitch their energy technology ideas. The new incubator program fosters scientific start-ups, to promote the growth of entrepreneurial susttainable energy techonology companies in area.

24 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Rental Rate and Vacancy Percentage, TX $28. Rents Vacancy 18.% $27. $ % $ % $24. $23. $ % 1.% $21. 8.% $2. $19. 6.% $18. 4.% Available Sublease Space - Available Sublease Space Q3 215 : 261,433 SF or 2.4% : 17,815 SF or 2.3% 3, 25, 2, 15, 1, 5, 2 Research Snapshot Q3 215 Office Colliers International

25 Absorption and Woodlands Office 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston Copyright 215 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International Market 179 Address, Hughes Landing Suite # Blvd., Suite 25, Address, Suite TX 7738 # colliers.com/<<market>> colliers.com/thewoodlands 3 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

26 Gosling Rd. To Houston CBD Research Snapshot THE WOODLANDS OFFICE Q2 215 Office Market Lisa Bridges Director of Market Research Houston Q2 215 Submarket Highlights > > ExxonMobil completed its relocation into the new 3.5M SF North Houston campus. Office Market Indicators > > Three Hughes Landing, a 12-story 321,-SF office building is currently under construction and is projected to deliver in November 215. > > rents increased slightly over the quarter while class B rents remained flat. > > Positive net absorption and new supply reflected the continuation of ExxonMobil s relocation into phase III of its new campus. VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE NEW SUPPLY > > Construction activity remains slow as proposed projects are still on hold due to the slump in energy prices. Woodlands Submarket Map 1488 Research Forest Needham Rd. 242 Woodlands Parkway Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd Spring Stuebner In The News Memorial Hermann recently announced plans for $25 million worth of expansions and improvements. The new amenities will improve the hospital s heart and vascular, neuroscience, trauma and orthopedics departments.

27 Summary INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE CLASS # OF BLDGS. THE WOODLANDS TOTAL (SF) (SF) RATE (%) (SF) RATE (%) TOTAL (SF) Q2-215 Q1-215 Q2-215 Q1-215 AVG ($/SF) A 32 9,251, , % 49,43.5% 483, % 5.% 452,559 1,671,73 $35.6 B 7 4,426, ,448 1.% 33,34.8% 475, % 8.1% -115, $24.66 C 5 338,38 1,.3%.% 1,.3%.3% $19.8 Total 17 14,16,31 877, % 82,743.6% 96,32 6.9% 5.9% 336,624 1,672,492 $3.28 Absorption and Woodlands Office 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, Woodlands Office 2, 15, 1, 5, -5, -1, -15, 2 Research Snapshot Q2 215 Office Colliers International

28 The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Rental Rate and Vacancy Percentage, TX $28. Rents Vacancy 18.% $27. $ % $ % $24. $23. $ % 1.% $21. 8.% $2. $19. 6.% $18. 4.% Available Sublease Space - Available Sublease Space Q2 215 : 194,363 SF or 2.% : 117,331 SF or 2.5% 25, 2, 15, 1, 5, 3 Research Snapshot Q2 215 Office Colliers International

29 52 offices in 67 countries on 6 continents United States: 14 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 18 MARKET CONTACT: Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com Colliers International Two Hughes Landing 179 Hughes Landing Blvd., TX USA $2.3 billion in annual revenue 1.7 billion square feet under management 16,3 professionals and staff About Colliers International Colliers International is a global leader in commercial real estate services, with more than 16,3 professionals operating out of 52 offices in 67 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate occupiers, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. Colliers International has been recognized and ranked by the International Association of Outsourcing Professionals Global Outsourcing 1 for 1 consecutive years, more than any other real estate services firm. colliers.com Copyright 215 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

30 Gosling Rd. To Houston CBD Q1 215 OFFICE THE WOODLANDS RESEARCH SNAPSHOT Office Market Q1 215 SUBMARKET HIGHLIGHTS Q1 215 OFFICE MARKET INDICATORS THE WOODLANDS CLASS A CLASS B NET ABSORPTION VACANCY RENTAL RATE CONSTRUCTION ExxonMobil continues relocation into new North Houston campus, contributing 1.5M SF to Q1 215 absorption. Three Hughes Landing, a 12-story 321,-SF office building is currently under construction and is projected to deliver in November 215. rents remained flat over the quarter while class B rents increased. Positive net absorption and new supply reflected the continuation of ExxonMobil s relocation into new buildings within its new campus. Sublease space increased as oil and gas company mergers and acquistions increased and hiring was put on hold. Construction activity slowed as proposed projects were put on hold due to the slump in energy prices. WOODLANDS SUBMARKET MAP NEW SUPPLY 1488 DOWNLOAD Woodlands Parkway Research Forest Needham Rd. 242 To download a copy of this report, please visit: Huffsmith-Kohrville Kuykendahl Grogan s Mill Rd marketreports/officereport Spring Stuebner

31 RESEARCH SNAPSHOT Q1 215 OFFICE THE WOODLANDS THE WOODLANDS SUMMARY INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION (SF) RENTAL RATE Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q1-215 Q4-214 Q1-215 Q4-214 AVG ($/SF) A 32 8,891, , % 5,94.6% 436,91 4.9% 7.1% 1,671,73 1,621,957 $34.68 B 71 4,353, , % 19,963.5% 393,755 9.% 9.1% 2,86-1,689 $24.6 C 5 338,38 1,.3%.% 1,.3%.3% $19.8 Total 18 13,582,54 759, % 7,93.5% 83, % 7.8% 1,674,59 1,611,268 $29.51 ABSORPTION AND NEW SUPPLY WOODLANDS CLASS A OFFICE 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, -2, WOODLANDS CLASS B OFFICE 2, 15, 1, 5, -5, -1, P. 2 COLLIERS INTERNATIONAL

32 RESEARCH SNAPSHOT Q1 215 OFFICE THE WOODLANDS The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Rental Rate and Vacancy Percentage, TX $39. $37. $35. $33. $31. $29. $27. $25. Rents Vacancy 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Rental Rate and Vacancy Percentage, TX $28. Rents Vacancy 18.% $27. $ % $ % $24. $23. $ % 1.% $21. 8.% $2. $19. 6.% $18. 4.% Available Sublease Space - Available Sublease Space Q1 215 : 195,818 SF or 2.2% : 95,481 SF or 1.9% 25, 2, 15, 1, 5, COLLIERS INTERNATIONAL P. 3

33 RESEARCH SNAPSHOT Q1 215 OFFICE THE WOODLANDS OUR SERVICES The foundation of our service is the strength and depth of our specialists. Our clients depend on our ability to draw on years of direct experience in the local market. Our professionals know their communities and the industry inside and out. Whether you are a local firm or a global organization, we provide creative solutions for all your real estate needs. Colliers International offers a comprehensive portfolio of real estate services to occupiers, owners and investors on a local, regional, national and international basis. In addition to these sectors, we provide our clients with a deep level of knowledge in specialized industries and product types, such as law, technical facilities, and healthcare. Real estate advisors in more than 52 offices in 67 countries. Founding member of the World Green Building Council Member of World Economic Forum Named Top 1 service provider more times than any other real estate firm The second-mostrecognized commercial real-estate brand Copyright 215 Colliers International.Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. The user is required to conduct their own due diligence and verification. RESEARCHER: Lisa Bridges Director of Market Research 1233 W. Loop South, Suite 9 Houston, TX 7727 TEL FAX THE WOODLANDS OFFICE: Two Hughes Landing 179 Hughes Landing Blvd. Suite 25, TX 7738 TEL FAX Accelerating success. P. 4 COLLIERS INTERNATIONAL