GREATER BOSTON MARKET VIEWPOINT 1ST QUARTER Accelerating success.

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1 GREATER BOSTON MARKET VIEWPOINT 1ST QUARTER 2012 Accelerating success.

2 MARKET VIEWPOINT Q Boston Overview The measured recovery in the Boston office market carried into the first quarter, as net absorption was positive for the fourth consecutive quarter and the vacancy rate declined from 15.8% to 15.4%. The Seaport was primarily responsible for the positive results, and tenants are now finding options in some areas of that submarket extremely tight. The market is segmented, both in terms of pricing and with respect to availability. In the Financial District, the vacancy rate remains a sluggish 19.2%, due in large part to a surplus of lowrise space, and contrasts sharply to the Back Bay s vacancy rate of 6.1%. Key statistics at the end of the first quarter include: Market Supply SF (000s) Vacancy Rate Q Absorption SF (000s) Total Boston 61, % 153 Back Bay 11, % 11 Financial District 33, % 40 Charlestown 2, % (80) Crosstown 1, % 6 Fenway/Kenmore 1, % (8) North Station 1, % 3 Seaport 6, % 140 South Station 1, % 41 SUPPLY AND DEMAND Supply totals over 60 million square feet, with three-quarters of the inventory located in the core Financial District and Back Bay submarkets. At the end of the first quarter there were over 120 tenants in the market seeking an aggregate of over 4.5 million square feet of office space. Although the average requirement is 14,000 square feet, some of the larger requirements include: Tenant SF Industry State Street Bank (c) 800,000 Financial Services Blue Cross Blue Shield of Massachusetts 350,000 Health Care/Medical Brown Brothers Harriman 350,000 Financial Services Mintz Levin 225,000 Legal Lexington Insurance 175,000 Insurance Converse 125,000 Retail Logmein (c) 125,000 Computer Software (c) = Committed VELOCITY Velocity (signed lease activity) totaled over 750,000 square feet in the quarter, the largest transaction being Cambridge Associates relocation from 100 Summer Street to 125 High Street. An additional 15 tenants representing approximately 1.4 million square feet had commitments pending at quarterend. Some of the larger leases signed during the quarter included: Tenant Address SF Cambridge Associates 125 High Street 170,000 Loomis Sayles One Financial Center 88,000 Convexity 200 Clarendon Street 58,000 Summit Partners 222 Berkeley Street 45,000 Old Mutual / UAM 200 Clarendon Street 41,000 ABSORPTION AND VACANCY The vacancy rate is 15.4%, or 15.0% in the Class A market compared to 16.1% in the Class B space. Certain segments of the market are outperforming the rest. The vacancy rates In the city s three largest submarkets break down accordingly: Market/Submarkets Class A Class B Total Boston 15.0% 16.1% Financial District 18.4% 22.3% Back Bay 4.5% 14.4% Seaport 18.0% 15.0% The Seaport had the strongest showing during the first quarter, accounting for 140,000 of the overall market s 153,000 square feet of positive absorption and driven by a number of leases in the 15,000- to 20,000-square-foot range. Roughly one-third of the remaining 1.2 million square feet available in the Seaport is in two buildings: 245,000 square feet at Fan Pier s One Marina Park Drive and 100,000 square feet at 51 Melcher Street. These provide tenants very different options one Class A new construction and the other Class B rehab. With some sizable tenants in the market seriously considering Seaport, this submarket is likely to tighten further over the remainder of the year. Even with a submarket vacancy rate of 15.9%, smaller innovation economy tenants seeking value options in some of the former warehouse buildings between p. 2 Colliers International

3 SF (Thousands) MARKET VIEWPOINT Q Fort Point Channel and Boston Wharf Road are already finding options extremely limited. 157 Berkeley Street Assuming relatively modest absorption over the next few years, the vacancy rate will likely remain above 10% for the overall market through the 2015 forecast period. Back Bay will likely remain the statistical exception, with single-digit vacancy rates. The projection includes the addition of 1.7 million square feet to the office supply in Projected Vacancy & Absorption 2,000 1,500 1, ,000-1,500-2, RENTAL RATES Average asking rents have been relatively flat over the past 12 to 18 months, but began to show incremental growth in selected properties during the latter half of Rental growth has been strongest in Class A and Class B buildings in the Back Bay as well as in the Class B segment of the Seaport. Select Financial District properties, particularly high-rise tower spaces are beginning to see moderate growth in rents. The spread between asking rents in various segments of the market is depicted in the following table. Space Type 2007 Rental Range/SF Class A high rise $55 - $75 Class A mid rise $45 - $55 Class A low rise $40 - $45 Class B $25 - $35 DEVELOPMENT Total Boston Absorption Total Boston Vacancy Rate Back Bay Vacancy Rate 2015 Financial District Vacancy Rate Although there is no speculative office on the horizon, the development pipeline is active in Boston. Construction is well underway on Liberty Mutual s new headquarters building in the Back Bay. The 590,000-square-foot office building is expected to be completed in % 20% 15% 10% 5% 0% In addition to the construction underway at Fan Pier in the Seaport, other large mixed-use projects such as Seaport Square (23 acres, 6.5 million SF mixed-use), Pier 4 (1 million SF), and Waterside Place (372,000 SF retail and residential) are all poised to break ground. Over 4,000 residential units are either approved or under review by the City, ranging from luxury rentals to innovative micro-housing of square feet to meet the demand of the district s labor force. Hotel rooms are being added as well Norwich Partners is converting a former warehouse building built in 1901 at 368 Congress to a 120-room extended stay hotel and approvals are in place for a 24-story, 505-room hotel at 505 Congress Street. TRENDS The vacancy rate peaked in 2010, and should gradually decline over the next few years. Positive absorption is anticipated over the forecast period. Tenant interest in the Seaport Innovation District will remain strong in Less is more as tenants focus on reduced occupancy costs and improved efficiency. Rents will continue to be segmented between various classes of space. CONTACT: Mary Sullivan Kelly mary.kelly@colliers.com Colliers International p. 3

4 MARKET VIEWPOINT Q Cambridge Overview The vacancy rate for the 19.8-million-square-foot Cambridge office and lab market increased slightly from 12.9% to 13.0% during the first quarter Despite this slight uptick in vacancy, Cambridge remains one of the most active markets in the country. Large existing technology companies such as Google continue to expand while newcomers Nokia and Amazon are committed to opening offices in Kendall Square. This activity coupled with expanding homegrown technology companies and institutional users has caused the Kendall Square office market to tighten significantly. With few full-floor options available and a large number of committed requirements set to close in the second and third quarters of 2012, the Kendall Square office market will only tighten further in the foreseeable future. Due to the lack of supply and rising rents, many cost-conscious tenants are considering options in Alewife and outside of Cambridge. The life science industry is fueling a building boom in East Cambridge where there are currently 8 buildings under construction totaling just under 2 million square feet. This represents the largest amount of new lab and office space under construction in the market at a given time since Key statistics at the end of the quarter include: Market Supply SF (000s) Vacancy Rate Q Absorption SF (000s) Total Cambridge* 19, % (20) Office 10, % (68) Lab 8, % 14 *Includes R&D space OFFICE MARKET Absorption in the 10.3-million-square-foot office market was negative 67,000 square feet causing the vacancy rate to increase from 10.0% at the end of 2011 to 10.7% at the close of the first quarter The negative absorption was due in large part to the upcoming availability of 10 Canal Park, a 110,000-square-foot office building located in East Cambridge. The building is expected to be fully vacant by late September, with landlord Equity Office holding out for larger users. Despite the small increase in vacancy, landlords in Kendall Square remain extremely bullish and continue to raise rents. Boston Properties is leading the charge by asking $65 per square foot at its Cambridge Center complex, given the limited amount of available space (14,000 SF). Direct Asking Rents PSF Space Type - Location Q Q Q Class A East Cambridge $30 - $45 $37 - $50 $45 - $65 Class B East Cambridge $28 - $35 $30 - $35 $38 - $47 Class A Alewife $25 - $33 $24 - $28 $25 - $35 At the close of the first quarter, an office user seeking 50,000 square feet or more had only two options in East Cambridge to choose from, including Class A buildings at 101 Main Street and 10 Canal Park. It is anticipated that 141 Portland Street will present a third option early next year when ITA/Google relocates to Google s main facility at 4 Cambridge Center , , , , , , , , , ,350 17, ,350 23, , , , , Main 10 Canal Park The biggest news of the quarter was the City of Cambridge s approval of Google s expansion plans at Cambridge Center. With this approval Google will connect 3, 4 and 5 Cambridge Center with glass-walled walkways and add 40,000 square feet between the buildings. With the pending expansion, Google will bring the ITA Software team which Google purchased in October of 2011 for $700 million together with the existing Google team in a total of 300,000 square feet of space. p. 4 Colliers International

5 MARKET VIEWPOINT Q Binney Street of as much as $40 per square foot between Alewife and Kendall Square, Alewife will appeal to cost conscious tenants who wish to remain in Cambridge. Headed into the second quarter, demand for office space remains strong with over 30 companies seeking approximately 500,000 square feet. LAB MARKET Source: Boston Properties Alexandria Real Estate Equities began construction of 241 Binney Street, a 307,000-square-foot office building leased to Biogen Idec. 241 Binney Street is the first building in the 1.73 million square foot Alexandria Center at Kendall Square. Boston Properties also began construction for Biogen Idec at 17 Cambridge Center, a 190,000-square-foot office building. Biogen will relocate its employees from Weston back to Cambridge upon the construction completion of the two buildings. Four of the five largest leases signed during the quarter were at One Main Street and One Cambridge Center, with Nokia s lease for two floors at One Main Street being the largest. The remaining leases were between 1,000 and 10,000 square feet in size. The five largest leases signed are listed below: Tenant Address SF Nokia One Main Street 64,000 Harvard University 20 University Road 21,500 Alpha Simplex (e) One Cambridge Center 20,600 MIT OSP One Cambridge Center 18,300 United Healthcare Services One Main Street 14,100 (e) expansion Several out-of-state biotechnology and technology companies have been touring the market and plan to open offices in Kendall Square. These companies hope to attract talent from MIT, Harvard and competing companies already located in Kendall Square. The vacancy rate for the 8.8-million-square-foot lab market was 16.9% at the close of the first quarter and only 10,000 square feet of positive absorption was recorded. Despite the lack of completed transactions, demand was strong and was driven mainly by larger users with requirements in excess of 100,000 square feet. After several quarters of light demand from small to mid-sized venturefunded companies, activity increased from this segment of the market, providing a very positive indicator for the health of the Cambridge start-up market and the overall economy. Demand for lab space remains robust with more than 20 tenants in the market seeking an aggregate of approximately 1.3 million square feet of space. Some of the larger active requirements include: Space Type SF Ironwood Pharmaceuticals 400,000 Momenta Pharmaceuticals 175,000 AVEO Pharmaceuticals (c) 130,000 Merrimack Pharmaceuticals (c) 115,000 (c) = committed The largest transaction during the first quarter was Momenta Pharmaceuticals sublease for 67,000 square feet from Merck at 320 Bent Street. The largest lab leases signed during the first quarter included: Tenant Address SF Momenta Pharmaceuticals (s) 320 Bent Street 67,000 Paratek Pharmaceuticals 99 Erie Street 16,100 Alnylam Pharmaceuticals 665 Concord Avenue 15,150 Midori 35 Moulton Street 10,400 Seifluor 300 Technology Square 7,500 (s) sublease While there were a limited number of signed leases in the Alewife submarket during the quarter, activity has increased as tenants look for value options. With a cost savings for Class A properties CONTACT: Mary Sullivan Kelly mary.kelly@colliers.com Colliers International p. 5

6 MARKET VIEWPOINT Q Cambridge Overview There are currently six life science research buildings under construction in East Cambridge totaling 1.3 million square feet. Novartis s 181 Massachusetts Avenue and 22 Windsor Street totaling 600,000 square feet is the largest project currently under construction. Upon completion Novartis will occupy over 1.7 million square feet in East Cambridge. 75 Ames Street, a 250,000-square-foot research facility that Boston Properties is developing for the Broad Institute, will connect with the Broad Institute s current headquarters facility to total 480,000 square feet. MIT has also begun construction on 610 Main Street, a 230,000 square foot building of which Pfizer will occupy 184,000 square feet. Pfizer recently put 200 Cambridgepark Drive, a 200,000 -square-foot research facility in Alewife, on the market for sale. Should the building trade, Pfizer could potentially enter the Kendall Square market for a second larger requirement. At the end of the first quarter 74% of the available lab space represents Class A space, comprised of 51% biotech-ready shell space and 23% existing lab space. With asking rents ranging from $50-$70 per square foot, NNN tenants seeking more affordable options have a limited inventory. This has caused many cost conscious young to mid-stage biotechnology companies to consider options in Alewife and the suburbs. The chart below depicts the breakdown of available lab space by type and quality at the end of the first quarter Space Type SF Available % of Available Space Class A Biotech-Ready Shell 753,300 51% Class A Existing Lab 346,000 23% Class B Existing Lab 238,700 16% Obsolete Lab 142,500 10% Totals 1,480, % The spread between asking rents in various segments of the market is depicted below: Direct Asking Rents PSF, NNN Space Type - Location Q Class A Existing - East Cambridge $50 - $65 Class A Shell - East Cambridge $58 - $70 Class B Existing/Shell - East Cambridge $40 - $48 Class B Existing Alewife $28 - $35 TRENDS Large technology and life science companies will continue to flock to Kendall Square to recruit world-class talent from MIT, Harvard and competing companies. Landlords will continue to push office rents in East Cambridge. Expect more build-to-suit activity from life science companies. p. 6 Colliers International

7 Employment The local economy is moving in the right direction again, with employment levels increasing significantly in recent months. These near-term gains resulted in 27,000 jobs being added statewide from February 2011 to February Although growth has reportedly undulated over the past year, with job gains slowing during the second-half of 2011, revisions in the data have likely understated economic expansion last year. More recent analysis from MassBenchmarks points to above-average job growth in 2011 and estimates that the U.S. Bureau of Labor statistics could have miscounted employment in the state by 36,600 jobs. The cloud of uncertainty hovering around the state s economic recovery and job data will most likely delay corporate decision-making, and ultimately weigh on the commercial leasing market. Once statewide employment reaches pre-recession levels, activity in the market should gain momentum. Total Employment Massachusetts Non-farm, Seasonally Adjusted MARKET VIEWPOINT Q ,400 3,350 3,300 Recession Recession Thousands 3,250 3,200 3,150 3,100 3,050 3, Source: BLS, Colliers International For the twelve months ended in February 2012, the Professional and Business Services sector recorded the largest gain, with 11,800 jobs added statewide. This growth bodes well for near-term office absorption. On the downside, the Financial Activities sector accounts for more than half of the employment losses posted from February 2011 to February 2012, with 2,600 jobs. Jobs Gained/Lost February 2011 to February 2012 Professional and Business Services Trade, Transportation, and Utilities Leisure and Hospitality Education and Health Services Manufacturing Information Construction Financial Activities Jobs (thousands) CONTACT: Mary Sullivan Kelly mary.kelly@colliers.com Colliers International p. 7

8 SF (Thousands) MARKET VIEWPOINT Q Suburban Overview The suburban Boston office and R&D market has been statistically flat for the past three years, with the vacancy rate hovering over 20% since the second quarter of First quarter results were mixed, ranging from a low of 152,000 square feet of negative absorption in the Route 128 South submarket to a high of 333,000 square feet of positive absorption in Route 128 Northwest. Aggregate statistics for the office and R&D market are provided below: Market Supply SF (000s) Vacancy Rate Q Absorption SF (000s) Suburban Boston 128, % 11 Inner Suburbs 5, % 6 Route , % 167 Route , % (155) Worcester 1, % (7) SUPPLY AND DEMAND The suburban office and R&D market totals 129 million square feet, with performance and product varying from one submarket to the next. The four Route 128 submarkets report a combined vacancy rate of 18.3%, compared to 25.9% in the three Route 495 submarkets. Although the median suburban requirement is 15,000 square feet, there are some sizeable tenants in the market with potential requirements over the next 12 to 24 months, including: Tenant SF Industry Target Market TJX Companies* 700,000 Retail Routes 495 West/ 128 Mass Pike Keurig 500,000 Consumer Products Route 128 North NetApp 400,000 Athenahealth 250,000 Computer Software and Services Electronic Health Records Verizon 300,000 Telecommunications Constant Contact 250,000 Marketing Route 128 Mass Pike Inner Suburbs/ Route 128 Mass Pike Routes 495 West/ 495 North Routes 128 MassPike/ 128 and 495 North *TJX announced in March that it would be acquiring the former Fidelity buildings at 300 and 400 Puritan Way, Marlborough to allow for its future expansion. The transaction had not closed as of quarter-end and is not reflected in the market statistics. VELOCITY Some of the larger transactions executed during the quarter included: Tenant Address SF Red Hat 10 Technology Drive, Westford 100,000 Potpourri Group 101 Billerica Avenue, Billerica 88,000 Welch s 300 Baker Avenue, Concord 85,000 Demandware 5 Wall Street, Burlington 75,500 Fidelity Information Services 10 Dan Road, Canton 75,000 ABSORPTION AND VACANCY Absorption was positive, but a meager 11,000 square feet. Positive absorption in the central Route 128 and 128 Northwest submarkets of over 400,000 square feet has been tempered by negative absorption elsewhere in the suburbs, and the overall vacancy rate remained flat at 21.0%. Historical Vacancy and Absorption Office and R&D 5,000 4,000 3,000 2,000 1, ,000-2,000-3,000-4,000-5, Q Positive absorption in the Route 128 Northwest submarket is attributed to the construction completion of Shire s new lab building at 200 Shire Way, Lexington, and the company s relocation of employees from Cambridge to its Lexington campus. Also contributing to positive absorption was Welch s 85,000-square-foot headquarters lease at 300 Baker Avenue, Concord. OFFICE RENTAL RATES Absorption Total Vacancy 25% 20% 15% 10% Weighted average Class A office rents range from $19.30 per square foot in the Route 495 West submarket to $30-$32 per square foot in the 128 Mass Pike and Inner Suburban submarkets. The Class A office parks in Waltham, Wellesley 5% 0% p. 8 Colliers International

9 MARKET VIEWPOINT Q and Newton are recently sending out proposals that average $43 per square foot. Moderate rental increases are being recognized in the Route 128 Mass Pike and 128 Northwest submarkets, but are still below pre-recession peaks. In submarkets where the vacancy rate tops 20%, significant across-the-board increases are unlikely in the near term. Weighted Average Rents Route 128 Mass Pike $40 $35 $30 $25 $20 Class B Class A TRENDS It is no longer simply about rent per square foot. Amenities and sustainability are critical. A marginal decrease in the vacancy rate is expected in 2012, with expansion primarily from small businesses and start-ups. $15 $10 $5 $ Q Select Class A, amenity-rich buildings located along the stretch from Burlington to Needham and close to Route 128 will be the first to realize rental growth in Tenant growth and expansion are back. Tenants seeking 5,000 to 10,000 square feet over their existing footprint are more likely to satisfy this by expanding in their current locations rather than relocating. Suburban Brokerage Territories Boston Cambridge Worcester 2 Inner Suburbs Route 128 North Route 128 Northwest Route 128 South 90 Route 495 North Route 495 West 95 Route 128 Mass Pike Route 495 South 24 CONTACT: Mary Sullivan Kelly mary.kelly@colliers.com Colliers International p. 9

10 Billions MARKET VIEWPOINT Q Investment Sales First quarter investment activity in Greater Boston was dominated by core transactions in the best-performing submarkets and property types. Sales volume for the quarter totaled $1.2 billion, 10% higher than the $1.1 billion that transacted in the first quarter of While last year s sales were well diversified across the major asset classes, recent activity has been highly concentrated with five large Boston and Cambridge office trades representing over 80% of total sales volume. BOSTON OFFICE There were six downtown office transactions in the first quarter totaling $867.6 million. By far the largest was Boston Properties $ Q purchase of 100 Federal Street from Bank of America for $615 million. Boston Properties pre-empted the marketing process by working with tenant Wellington Management to exercise its right of first offer. The sale also included a long-term leaseback with Bank of America for 787,000 square feet. Two additional Boston office transactions similar in size that closed this quarter demonstrate the price gap between Class A and Class B assets: Clarion Partners purchased Boylston Street in the Back Bay (Class A) for $457 per square foot whereas Invesco purchased 179 Lincoln Street (Class B) for $341 per square foot. Both assets were approximately 90% leased at the time of sale. Address Buyer Seller Price (million) Size (000) $/SF 100 Federal Street Boston Properties, Inc. Bank of America $ ,355 $ Boylston Street Clarion Partners Westport Point Capital JV Prudential $ $ Lincoln Street Invesco Millennium Partners $ $341 The most significant properties on the market include a number of assets in the Seaport District, a location which has emerged as a viable alternative to Kendall Square for innovation economy tenants. Rockpoint Group has 451 D Street under contract to Shorenstein Properties and Brickman is in the market with three additional Seaport assets located at 51 Sleeper Street, 313 and 330 Congress Street, and 300 A Street. CAMBRIDGE OFFICE Cambridge continues to be one of the most sought-after investment markets on the East Coast given institutional demand-drivers MIT and Harvard, rapidly expanding technology and life science companies, and severe constraints on new development. As investors scour the market for opportunities, the few properties that have been offered have been bid up significantly. Four Cambridge assets totaling $210.9 million sold during the quarter. The two largest sales were in the red-hot East Cambridge submarket. Cambridge Place, the three-building portfolio on Broadway and Hampshire Street which was 80% leased at the time of sale, sold for $119 million or $412 per square foot. The Davenport Building, a Class B brick and beam office building, sold for $79 million or $359 per square foot. Address Buyer Seller Price (million) Size (000) $/SF 1-3 Cambridge Place BioMed Realty Trust, Inc. MetLife, Inc. $ $412 Davenport Building, 25 First Street DivcoWest Properties AEW Capital Management, L.P $ $359 SUBURBAN OFFICE Annual Sales Volume by Type Sale activity in Boston s suburbs was more muted as owners opted to hold properties and wait for improving leasing fundamentals to support improved asset pricing. There were only four suburban office trades in the first quarter of 2012 totaling $26.6 million. Though investors are exercising caution with suburban assets, total volume is expected to increase as a number of significant Class A assets trade, including Boston Properties Bedford Business Park in Bedford and Brookwood Financial Partners 75 Sylvan Street campus in Danvers. $2.0 $1.5 $1.0 $0.5 Multifamily Industrial Retail Suburban Office CBD Office p. 10 Colliers International

11 MARKET VIEWPOINT Q First Quarter Suburban Office Sales Address Buyer Seller Price (million) Size (000) $/SF 10 & 55 Technology Drive, Lowell Novaya Ventures Nordblom Properties $ $ First Ave, Needham Intrum Corp. Abrams Roberts Klickstein & Levy $ $117 INDUSTRIAL The Boston industrial investment sale market is small relative to the rest of the country. This is due to the limited number of major distribution properties and smaller asset sizes in general. Sale volume in in the industrial sector totaled just over $400 million last year. In the first quarter of this year only $27.7 million in sales closed. Two of the three largest sales were purchased by users. Address Buyer Seller Price (million) Size (000) $/SF 200 Riverpark Drive, North Reading Atlantic Management High Street Equity Advisors $ $90 1 United Drive, West Bridgewater CDF Corporation Eastern Bank $ $24 80 Hampden Road, Mansfield Boston Cedar Millwork Cape Cod Lumber Co., Inc. $ $43 RETAIL Retail investment activity was brisk as six retail assets totaling $57.3 million sold in the first quarter. The two largest sales included blue chip grocery chains Katz Properties purchased Washington Street in Stoughton, a neighborhood center anchored by a Super Stop & Shop, and Acadia Realty Trust purchased a Whole Foods Supermarket in Cambridge. First Quarter Retail Sales Address Buyer Seller Price (million) Size (000) $/SF Washington Street, Stoughton Katz Properties, LLC Invesco $ $ River Street, Cambridge (Whole Foods) Acadia Realty Trust Kennedy Development Group Inc. $ $ & 203 Sudbury Road, Concord David A. Mack Properties, LLC Eastern Real Estate LLC $ $232 MULTIFAMILY There has yet to be a major sale in the perennially popular multifamily sector this year. First quarter market activity was characterized by smaller transactions nine assets totaling $48.9 million traded at an average size of $5.4 million. Six of these were in Boston including the largest sale of the quarter, Gould & Company s Brainerd Road in Allston, purchased by the Mount Vernon Company for $13.6 million. Multifamily sale volume is expected to increase over the course of the year as several pending transactions come to fruition. Address Buyer Seller Price (million) Size (000) $/SF Brainerd Road, Boston The Mount Vernon Co. Gould & Co. $ $164, Cambridge Road, Woburn Philip Privitera CFC Investment Company $ $131,250 TRENDS Aggressive asset pricing is concentrated in the core office submarkets of Boston, Cambridge and the close-in suburbs. While multifamily is cooling off in other markets across the country, investor demand for multifamily in Boston remains extremely high. Most investors expect interest rates to remain low, providing ample opportunities for positive leverage. Investment sale volume is expected to continue at its current pace for the balance of the year. CONTACT: Mary Sullivan Kelly mary.kelly@colliers.com Colliers International p. 11

12 Market Snapshot Q STATISTICS OFFICE/R&D MARKET SQUARE FEET (SF) SUPPLY DIRECT SF AVAILABLE SUBLEASE SF AVAILABLE VACANCY* 1ST QTR ABSORPTION BOSTON 61,061,477 8,563, , % 152,954 Back Bay 11,981, , , % 11,182 Financial District 33,737,258 6,096, , % 39,601 Charlestown 2,886, ,037 55, % (79,538) Crosstown 1,025,000 52, % 5,500 Fenway/Kenmore 1,826, , , % (8,218) North Station 1,881, ,647 16, % 3,032 Seaport 6,538, , , % 140,387 South Station 1,184, ,061 15, % 41,008 CAMBRIDGE 19,823,999 2,398, , % (19,756) Alewife Station/Route 2 2,756, ,587 42, % (16,571) East Cambridge 15,141,442 1,961, , % (42,169) Harvard Square/Mass Ave 1,926,146 82,459 7, % 38,984 SUBURBS 128,991,274 24,161,769 2,868, % 10,660 Inner Suburbs 5,851, ,226 83, % 6,255 Route 128 North 7,974,140 1,340, , % (95,915) Route 128 Northwest 21,926,577 3,052, , % 332,871 Route 128 Mass Pike 28,318,820 4,471, , % 80,889 Route 128 South 15,353,178 3,030, , % (151,191) Route 495 North 25,325,433 5,221, , % 61,750 Route 495 West 17,916,828 4,924, , % (134,977) Route 495 South 4,510, , , % (81,579) Worcester 1,813, , % (7,443) TOTAL 209,876,750 35,124,294 3,867, % 143,858 *Including sublease space CONTACT: Mary Sullivan Kelly Senior Vice President & Chief Research Officer DIR FAX mary.kelly@colliers.com To be placed on our mailing list, please visit 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. This publication is the copyrighted property of Colliers International and/or its licensor(s) Colliers International. All rights reserved. Colliers International 160 Federal Street Boston, MA,