Table of Contents. LEASE COMPS SUMMARY Tab 1 CBD LEASE COMPS Tab MARKET ACTIVITY Tab DEMAND IN THE MARKET Tab 4 FLIGHT TO CBD Tab 5

Transcription

1 MARKET DATA

2 Table of Contents LEASE COMPS SUMMARY Tab 1 LEASE COMPS Tab MARKET ACTIVITY Tab DEMAND IN THE MARKET Tab 4 FLIGHT TO Tab 5

3 Market Data Lease Comps Downtown vs. Suburbs # of Deals S. F. Starting Rate/SF Rate Term months Free Rent / YR TI/YR Total Suburbs New 20 14,850 $21.83 $ $3.18 $19.10 Renewals 19 14,711 $21.48 $ $1.03 $21.17 New 12 12,567 $21.02 $ $4.13 $17.31 Renewals 6 15,312 $23.21 $ $3.57 $20.31 Key Takeaways: - Starting rates are higher in the suburbs for new deals but lower for renewals - Downtown gave more than 25% more free rent than suburban leases - Downtown provided 30% more TI for new leases than suburbs - Downtown provided over three times as much TI for renewal leases than suburbs - Downtown required longer term renewal leases than suburbs, comparable lease terms on new deals - Suburbs netted $ $1.79 / sf higher net effective rents than downtown

4 Market Data North Meridian Lease Comps Date Entered Deal Type Tenant Building Name S. F. Starting Rate/SF Escalation Rate Free Rent Term months Free Rent / YR TI TI/YR Total 10/1/2016 New CliqStudios Capital Center North Tower 10,075 $16.00 Annual $0.50 $ $0.00 $0.00 $ /1/2016 New Central Indiana Corporate Partnership Salesforce Tower - Tower Building 7,074 $23.75 Annual $0.50 $ $18.49 $5.28 $ /18/2016 New CareSource BMO Plaza 6,137 $19.50 Annual $0.50 $ $30.00 $4.74 $ /13/2016 New Insight Global Salesforce Tower - Tower Building 6,829 $25.50 Annual $0.50 $ $30.00 $5.71 $ /1/2016 New Fairbanks Foundation Regions Tower 6,249 $20.50 Annual $0.40 $ $30.00 $4.04 $ /16/2016 New New Centaur Salesforce Tower - Circle Building 5,732 $22.50 $ $32.00 $4.31 $ /15/2016 New Hannum Wagle & Cline Engineering BMO Plaza 16,861 $19.50 Annual $0.40 $ $35.00 $4.57 $ /1/2016 New Parr Richey Frandsen Patterson Kruse LLP Capital Center North Tower 10,037 $19.25 Annual $0.35 $ $45.00 $4.50 $ /1/2016 New Crowe Horwath BMO Plaza 5,459 $20.75 Annual $0.50 $ $38.50 $3.64 $ /1/2016 New Milliman USA Market Tower 42,236 $24.00 Annual $0.50 $ $45.00 $4.15 $ /8/2016 New Flaherty & Collins Properties Regions Tower 22,383 $19.00 Annual $0.35 $ $49.84 $4.53 $ /1/2016 New Global Atlantic Financial Group Market Tower 11,732 $22.00 Annual $0.35 $ $45.00 $4.09 $ /1/2016 Renewal Stewart Richardson & Associates Regions Tower 5,414 $22.00 Annual $0.50 $ $16.70 $3.34 $ /19/2016 Renewal HNTB Salesforce Tower - Circle Building 31,686 $22.00 Annual $0.50 $ $13.50 $2.35 $ /18/2016 Renewal Kroger Gardis & Regas, LLP Salesforce Tower - Circle Building 13,239 $24.00 Annual $0.50 $ $25.00 $4.17 $ /1/2016 Renewal Quadel Consulting Corporation Market Tower 7,122 $24.00 Annual $0.50 $ $25.00 $3.37 $ /1/2016 Renewal Indiana Chamber of Commerce PNC Center 21,169 $20.50 Annual $0.50 $ $40.00 $4.00 $ /1/2016 Renewal Hoover Hull Turner LLP Salesforce Tower - Tower Building 13,242 $26.75 Annual $0.50 $ $47.50 $4.19 $23.90

5 Market Data North Meridian Lease Comps Building Summary S. F. Starting Rate/SF Rate Free Rent Term months Free Rent / YR TI TI/YR Total Trophy 15,432 $23.83 $ $31.28 $4.18 $19.48 Non-Trophy 11,532 $19.67 $ $31.67 $3.71 $17.14 Starting Rents Rent less TI $30.00 $30.00 $25.00 $25.00 $20.00 $20.00 $15.00 $15.00 $10.00 $10.00 $5.00 $5.00 $0.00 Jan-16 Mar-16 May-16 Jun-16 Aug-16 Oct-16 Nov-16 Jan-17 $0.00 Jan-16 Mar-16 May-16 Jun-16 Aug-16 Oct-16 Nov-16 Jan-17 Trophy A Bldgs Non-Trophy A Bldgs

6 Office Leasing Activity Report Market Share of Completed Transactions Indianapolis Q This report analyzes all closed office leases > 5,000 s.f. in Class A and B office buildings At a glance Leasing activity by Tenant rep (s.f.) Leasing activity by Landlord rep (s.f.) Total Leased S.F. Transactions Quarter 541, YTD 2,465, Tenant Rep S.F. Transactions JLL 386, C + W 563, NAI Meridian 71,825 6 Newmark 255,306 3 CBRE 120, Landlord Rep S.F. Transactions JLL 1,232, CBRE 405, C + W 216, Colliers 160, Zeller Realty Group 102,061 7 Colliers 6.5% Direct 7.0% CBRE 5.6% Other 10.8% Jackson Cooksey / NAI Meridian 5.1% Resource 5.9% Newmark 11.8% NAI Meridian 3.3% JLL 17.9% C + W 26.1% Colliers 6.9% C + W 9.3% Zeller 4.4% CBRE 17.5% Other 8.7% JLL 53.2% Top 20 lease transactions during the year Tenant Address Submarket Size Type Tenant Rep Landlord Rep Salesforce.com 111 Monument Circle 227,781 Growing Newmark JLL Allied Solutions 340 1st Ave Sw 109,600 Growing Jackson Cooksey / NAI Meridian JLL Stanley Security Solutions 8350 Sunlight Dr Northeast 80,000 Growing C + W JLL Sallie Mae 8425 Woodfield Crossing Blvd 75,558 Growing JLL JLL JD Byrider Hamilton Crossing 70,320 Growing Colliers JLL Republic Services Crosspoint Blvd Northeast 68,000 Growing Cresa CBRE NextGear Capital, Inc City Center Dr 44,479 Growing C + W JLL Ardagh Group Crosspoint Blvd Northeast 43,369 Growing C + W CBRE Walker Information Milliman Heritage Environmental Services TriMedex 8940 River Crossing 10 W Market St 42,500 Stable Resource PK Partners 42,236 Growing Avison Young Zeller Realty Group 6510 Telecom Dr Northwest 36,225 Growing JLL JLL 7702 Woodland Dr Northwest 33,973 Growing C + W C + W HNTB 111 Monument Circle 31,686 Stable Resource JLL Morgan Stanley 800 E 96th St 30,571 Stable JLL JLL Blue & Co., LLC N Meridian St 29,671 Growing Direct JLL Blackboard 3815 River Crossing Pkwy 28,674 Growing C + W CBRE Monster Worldwide 500 E 96th St 27,947 Stable JLL JLL Finishmaster W Washington St 27,516 Stable NAI Meridian CBRE Blue Horseshoe Solutions, Inc N Meridian St 26,668 Growing REI Colliers Eli Lilly 525 S Meridian St 26,517 Growing 0 Titan Real Estate Source: JLL Research 2016 Jones Lang LaSalle IP, Inc. All rights reserved.

7 # of active tenants Office Demand in the market Indianapolis Q Requirements by size (by #) Quick stats Size 250, , ,999 50,000-99,999 25,000-49,999 5,000-14,999 4,999 Requirements by industry (in SF) Industry Healthcare Unknown Aerospace defense transportation Banking finance insurance Technology Government Law firm Association nonprofit union Media and entertainment Architecture engineering construction design Real estate Life sciences Other professional and business services Telecom Accounting consulting research strategy Manufacturing and distribution Marketing advertising communications PR Education Retail and hospitality Energy and utilities Requirements by broker (by SF) Requirements ,000-24,999 SF of active requirements 2,670,319 Colliers 8.4% Direct 7.9% Avison Young 11.2% Newmark 11.8% Other 7.7% CBRE 18.5% JLL 20.1% C + W 14.5% Requirements 384, , , , ,392 North Meridian Northeast 1,254,111 1,218,130 1,124, , ,026 Northwest 873, , , ,408 65,000 53,347 Other 319,000 34, , , , ,000 1,000,000 1,200,000 1,400,000 34,603 *Several requirements span multiple submarkets 25,000 30,000 Industry concentrations 15,684 13,500 6,500 Largest industry demand: Government 19,000 Total active industry requirements: 161,749 SF 0 Northeast Largest industry demand: Healthcare Total active industry requirements: 267,000 SF Largest industry demand: Aerospace defense transportation Industry footprint Active requirements 124 SF of average requirement 21,535 Requirements by target submarket (in SF) Total active industry requirements: 250,000 SF North Meridian Largest industry demand: Aerospace defense transportation Total active industry requirements: 266,000 SF Northwest Largest industry demand: Aerospace defense transportation Total active industry requirements: 250,000 SF Q-to-Q change Shrinking Stable Growing Tenant footprint Growing Shrinking Stable Science and technical Finance Nonprofit Professional and business services Creative Unknown Consumer oriented Source: JLL Research 2017 Jones Lang LaSalle IP, Inc. All rights reserved

8 52 W N S DISTRIBUTION E SUBURBAN MIGRATION Tenant movement from Indianapolis suburbs to 1,400 sf 1 Tenant West/Southwest 70 >1% 9,400 sf 2 Tenants Northwest % 10% 65 White River ,458 sf 6 Tenants 35,063 sf 5 Tenants Midtown 39 Tenants New to * 34,800 sf 3 Tenants Greenwood 17% 16% 11% 4% 3% 2% 55,777 sf 6 Tenants East/Southeast 65 11,924 sf 1 Tenant Northeast *14 Tenants are new to market New to Market - 122,493 sf - 55,777 sf - 53,458 sf Northeast - 8,000 sf Northwest - 9,400 sf East/Southeast - 11,924 sf Greenwood - 38,400 sf Midtown - 35,063 sf 8,000 sf 1 Tenant West/Southwest - 1,400 sf Company Address SF Year Submarket Flaherty & Collins Regions Tower 24, Pondurance 500 North (sublease) 10, Springbuk Brougher Building 5, Noble Consulting Regions Tower 4, Paycom Market Tower 4, Slingshot Allen Plaza 6, Submarket Teradata Corporation BMO Plaza 16, Richard M. Fairbanks Foundation Regions Tower 6, Old National Bank IPALCO Corporate Center 9, Grand Slam Realty Regions Tower 3, DemandJump Market Tower 2, Thompson Thrift Salesforce Tower 16, Northeast Submarket Messer Construction Pan Am Plaza 8, Northwest Submarket ILab Salesforce Tower 4, Hoosiers for Quality Education 101 W Ohio 5, East/Southeast Submarket Section W South St 11, Greenwood Submarket Site Strategics, Inc N Pennsylvania St 5, Keter Environmental Union Station 8, StreetLinks 444 E Washington St 25, Midtown Submarket Barratt Asset Management 601 N Capital 4, The Speak Easy Downtown Morrison Opera 13, Upper Hand, Inc. Morrison Opera 2, Tinderbox Lacy Building 8, Kristian Anderson & Associates Lacy Building 6, West/Southwest Submarket Colonial Life 1030 Central Ave 1, New To Market Home Advisor Allen Plaza 10, Kinetrex J.F. Wild 7, Insight Global Salesforce Tower 6, A Place to Float 425 W South St 4, Sells Group The Majestic Building 3, DTB Taining Inc. (Sandler Sales) Circle Tower 3, Apple One Employment Services Regions Tower 2, WP Glimcher Salesforce Tower 19, UniFirst Regions Tower 17, Emarsys Market Tower 12, High Alpha Circle Tower 10, CareSource BMO Plaza 9, Return Path Market Tower 6, Geofeedia Circle Tower 9, LEASES ANNUAL MIGRATION LEASES Deals - 68,926 sf 9 Deals - 102,804 sf 23 Deals - 225,624 sf INDUSTRY TECHNOLOGY 31% REAL ESTATE 27% SERVICES 11% FINANCE 10% MARKETING 7% CONSULTING 6% WHERE DID THEY GO? 58% CLASS A 194,227 sf 42% CLASS B 141,688 sf OTHER 8%