Houston s office market posts positive net absorption for the first time in several years

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1 Research & Forecast Report HOUSTON OFFICE Q4 217 Houston s office market posts positive net absorption for the first time in several years Lisa Bridges Director of Market Research Houston After six straight quarters of negative net absorption, Houston s office market posts 673, SF of positive net absorption in Q Although positive, Houston s office market 217 year-end absorption total is still well within the red, at negative 1.7M SF. After three years in an economic energy slump, Houston s office market is ready for a boost. Even though oil prices have recently increased, the increase is not enough to spur hiring sprees in the energy industry. With the recent increase in oil prices the U.S. Energy Information Administration (EIA) has revised it s forecast for world oil demand in 218 by 1, barrels per day. Although Brent crude prices are up to $64 per barrel, the highest price since November 214, it s not enough to accelerate leasing of vacant office space. Recent news articles indicate that some of the large energy giants reported profits in the fourth quarter. However, profits were largely driven by continued lean budgets and staff reductions. Developers have shown restraint over the past few years, only starting projects with a lead tenant guaranteed. A handful of planned buildings broke ground this past year with lead tenants in place including Bank of America, American Bureau of Shipping and HP. Once these projects deliver, those companies will vacate their existing space, leaving more than 1 million square feet for landlords to backfill. In August 217, Houston faced one of the worst natural disasters in history. Hurricane Harvey, a Category 4 hurricane, slammed the Texas coast and dumped over 5 inches of rain in parts of Houston. The event caused widespread flooding, destroying homes, businesses and infrastructure. This was a temporary set-back for many, but has had permanent ramifications for others. A joint industry survey confirmed that less than 7% of Houston s office inventory suffered damage. Of that amount, the majority have been repaired and back in operation with a handful of buildings still undergoing repair. According to the U.S. Bureau of Labor Statistics, the Houston MSA created 48,5 jobs (not seasonally adjusted) between November 216 and November 217, an annual growth rate of 1.6%, which is above than the national averages job growth rate of 1.5%. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Summary Statistics Houston Office Market Q4 216 Q3 217 Q4 217 Vacancy Rate 17.5% 19.3% 19.1% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year Annual Change % 19.7% Quarterly Change % 21.9% Quarterly Forecast* 18.5% 21.3% Houston Class A $35.35 $35.31 $34.97 CBD Class A $44.64 $44.36 $44.37 Suburban Class A $32.78 $32.92 $32.33 Share or view online at colliers.com/texas/houstonoffice

2 Vacancy & Availability Houston s citywide vacancy rate decreased 2 basis points from 19.3% to 19.1% over the quarter and rose 15 basis points from 17.5% in Q Over the quarter, the average suburban vacancy rate decreased 2 basis points from 18.9% to 18.7% and the average CBD vacancy rate increased 2 basis points from 2.4% to 2.6%. The average CBD Class A and Class B vacancy rates increased 2 basis points over the quarter from 18.3% to 18.5% and from 28.2% to 28.4%, respectively. The average suburban Class A vacancy rate decreased 6 basis points from 21.9% to 21.3% between quarters, while the average suburban Class B vacancy rate rose 1 basis from 16.7% to 16.8%. Of the 1,79 existing office buildings in our survey, 86 buildings have 1, SF or more of contiguous space available for lease or sublease. Further, 24 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 8.8 million SF, or 3.8% of Houston s total office inventory. Available space differs from vacant space, in that it includes space that is currently being marketed for lease and may be occupied with a future availability date. Whereas vacant space is truly vacant and is and may still be immediately available. HISTORICAL AVAILABLE SPACE Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 11/16 11/17 HOUSTON 5.2% 4.3% TEXAS 4.5% 3.7% U.S. 4.4% 3.9% JOB GROWTH 25.% Annual Change # of Jobs Added HOUSTON 1.6% 48.5K TEXAS 2.7% 331.6K U.S. 1.5% 2.1M CBD vs. Suburban A OFFICE 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q3 214 Q4 214 Q1 215 CBD Suburban Houston Total Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q % 15.% 1.% 5.%.% AVAILABLE SPACE - 15, SF OR GREATER Large Sublease Availabilities (Total available in building and/or complex) BUILDING TENANT SUBMARKET SF Four WestLake Park BP Katy Freeway 54,327 Two Allen Center Chevron CBD 396,39 11 Louisiana Enbridge CBD 294,58 Three Greenspoint Place ExxonMobil North Belt 253,562 One Shell Plaza Shell Oil CBD 229,14 Three WestLake Park Phillips 66 Katy Freeway 221,723 8 Greenspoint ExxonMobil North Belt 198, Clay Rd AMEC Foster Wheeler Katy Freeway 189,285 Energy Center I Foster Wheeler Katy Freeway 182,966 Four Oaks Place BHP West Loop/Galleria 18,343 West Memorial Place II IHI E&C Katy Freeway 158,317 CityWestPlace 2 Statoil Westchase 154,887 Three Northborough FMC Technologies North Belt 151,372 Source: CoStar CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q4 217 Office Colliers International

3 Absorption & Demand Houston s office market posted 673,545 SF of positive net absorption in Q CBD Class A space recorded the largest loss, with 72,517 SF of negative net absorption, while Suburban Class A posted the largest gain with 767,23 SF of positive net absorption. Some of the tenants that moved during the quarter include McDermott International (186,962 SF) in the West Belt submarket, Targa Resources Corp. (128,6 SF) in the CBD submarket, Lockton Companies (116,25 SF) in the Westchase submarket and Empyrean Benefit Solutions, Inc. (16,94 SF) in the Westchase submarket. The large amount of sublease space placed on the market during the energy downturn has steadily decreased over the last five quarters from 11.8M SF to 8.8M SF. The majority of the available sublease space has less than three years of term remaining. Rental Rates Houston s average Class A asking rental rate decreased over the quarter from $35.31 per SF to $34.97 per SF. The average Class A rental rate in the CBD remained steady over the quarter at $44.37 per SF, while the average Suburban Class A rental rate decreased from $32.92 to $32.33 per SF. The current average rental rate, which includes all property classes, for Houston office space is $29.22 per SF gross. Leasing Activity Houston s office leasing activity increased 17% over the quarter, rising from 3. million SF in Q3 217 to 3.5 million SF in Q A majority of the leasing activity was caused by renewals, but there were some tenants that needed short-term sublease space while their current lease space is rebuilt due to damage caused by Hurricane Harvey. Q4 217 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE Two Allen Center CBD 2, Saudi Aramco 4 Oct Post Oak Blvd West Loop/Galleria 156,151 Stewart Title 4 Nov-17 Three Allen Center CBD 98, Talos Energy 1 Dec-17 Bank of America Center CBD 82,916 TransCanada 3 Oct-17 Two Allen Center CBD 55,178 Chamberlain Hrdlicka 2 Oct-17 LyondellBasell Tower CBD 48,233 Beck Redden 2 Nov-17 1 New/Direct 2 Renewal 3 Expansion 4 Sublease Sales Activity Houston s office investment sales activity grew substantially over the year, rising by 54% since Q With most of the investor community believing the downturn in the energy industry has reached the bottom and has begun to rebound, they now see Houston as offering limited downside and the potential for healthy returns. The average sales price per square foot increased from $199 to $245 per SF over the quarter and rose significantly over the year by 86%. Q4 217 CHANGE IN SALES (YEAR OVER YEAR) 6.% 5.% 4.% 3.% 2.% 1.%.% -1.% -2.% Q4 '13 Q4 '14 Q4 '15 Q4 '16 Q4 '17 Sources: CoStar and Real Capital Analytics Q4 217 OFFICE SALES PRICE PER SF $3 $25 $2 $15 $1 $5 Q4 '13 Q4 '14 Q4 '15 Q4 '16 Q4 '17 3 Houston Research & Forecast Report Q4 217 Office Colliers International

4 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q4-217 Q3-217 Q4-217 Q3-217 CBD A 35 32,989,934 4,889, % 1,224,54 3.7% 6,114, % 18.3% -72, ,832 $44.37 B 29 9,786,995 2,696, % 79,92.8% 2,776, % 28.2% -12,296 49,426 $29.46 C ,182 11, %.% 11, % 12.5% -45 $2.26 Total 78 43,654,111 7,696, % 1,34,46 3.% 9,, % 2.4% -85, ,46 $42 SUBURBAN A 38 97,348,87 17,483, % 3,243, % 2,726, % 21.9% 767,23-293,549 $32.33 B ,134,9 12,647, % 467,39.6% 13,114, % 16.7% -22, ,857 $2.46 C 39 12,933,782 1,421,941 1% 8,739.1% 1,43, % 11.3% 14,66-46,167 $16.86 Total ,416,679 31,553, % 3,719,261 2.% 35,272, % 18.9% 758,88-566,573 $26.88 OVERALL A ,338,741 22,373, % 4,467, % 26,841, % 2.9% 694, ,381 $34.97 B ,921,85 15,343, % 547,292.6% 15,89, % 18.% -34, ,431 $22.4 C ,81,964 1,532,8 11.1% 8,739.1% 1,54, % 11.4% 13,616-46,167 $17.11 Total ,7,79 39,249, % 5,23, % 44,272, % 19.3% 673, ,979 $29.22 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q4-217 Q3-217 Q4-217 Q3-217 A 8 2,284, , % 26, % 443, % 24.7% 12, ,299 $32.54 B 34 2,587, , % 24,233.9% 181,812 7.% 7.5% 13,36-11,897 $3.17 C ,211 78, %.% 78, % 23.8% 19,982-8,192 $25.86 Total 56 5,287, , % 5,689 % 74, % 16.2% 153, ,388 $31.16 BAYTOWN B 3 186,5 13, %.% 13, % 2.7% -8,617 $21.45 C 3 81,481 2,5 3.1%.% 2,5 3.1%.% -2,5 $. Total 6 267,486 16,79 6.%.% 16,79 6.% 1.9% -11,117 $18.11 BELLAIRE A 6 1,91, , % 2, % 147, % 11.8% -18,293 7,448 $24.31 B 2 2,511,75 2,92 8.% 3,626.1% 24, % 8.6% 12,235-44,953 $24.35 C 5 318,58 34, %.% 34, % 12.9% 6, $17.24 Total 31 3,921, ,63 9.2% 23,92.6% 386, % 9.9% ,996 $23.66 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 377,455 8, %.% 8, % 2.3% 3,879 $19.51 C 7 287,369 14, %.% 14, % 4.9% $16.47 Total ,824 22, %.% 22, % 3.2% 3,879 $17.63 E. FORT BEND CO/SUGAR LAND A 17 3,399, , % 34,456 % 258, % 9.3% 56,893 28,94 $31.24 B 39 2,4, , % 38, % 213, % 9.4% 11,246 23,791 $21.85 C 6 194,524 31, %.% 31, % 16.2% 1,454 $18. Total 62 5,994,691 43, % 73,13 1.2% 53, % 9.7% 68,139 54,149 $ Houston Research & Forecast Report Q4 217 Office Colliers International

5 Houston Suburban Office Market Summary - Continued DIRECT Q4-217 Q3-217 Q4-217 Q3-217 FM 196 A 12 2,913,178 32, % 4,415.2% 36, % 9.8% -22,528 24,21 $27.23 B 72 4,337, , % 9,833.2% 871, % 19.6% 12,812-22,298 $16.88 C 23 86, , %.% 144, % 12.5% -44,38-38,862 $14.1 Total 17 8,56,919 1,38, % 14,248.2% 1,323, % 16.3% -53,754-37,139 $18.95 GREENWAY A 22 7,483,998 1,283, % 4,191.5% 1,324,1 17.7% 15.5% -5,185 73,19 $35.9 B 31 3,99, ,235 1.% 8,443.3% 319, % 1% 21,538 27,379 $27.34 C 16 54,311 7, %.% 7, % 13.4% 1, $22.4 Total 69 11,123,884 1,665, % 48,634.4% 1,714, % 14.1% 18,25 11,328 $33.73 GULF FREEWAY PASADENA A 1 22,76.%.%.%.% $. B 39 2,318, , %.% 353, % 15.3% $21.56 C 29 1,83, , %.% 121, % 13.2% 21,889-13,689 $22. Total 69 3,424,29 475, %.% 475, % 14.5% 22,782-13,361 $21.67 I-1 EAST B 6 427,851 89, %.% 89, % 22.1% 4,961 11,864 $14.92 C 6 25,17 13, 5.2%.% 13, 5.2% 5.2% 5,277 $21.18 Total ,868 12, %.% 12, % 16.4% 4,961 17,141 $15.71 KATY FREEWAY A 89 22,268,352 3,533, % 1,276,44 5.7% 4,89, % 23.2% 429, ,326 $36.91 B 99 9,182,297 1,568, % 38,35.4% 1,67, % 18.5% 164,2-1,522 $22.35 C 32 1,485,888 53, % 5,982.4% 59,72 4.% 5.2% 17,649-9,494 $18.92 Total 22 32,936,537 5,156, % 1,32,331 4.% 6,476, % 21.3% 61, ,342 $32.29 KATY GRAND PARKWAY A 14 1,372,23 253, % 14,92 % 267, % 19.9% 5,492 31,89 $26.93 B 14 1,78,242 5,124.5%.% 5,124.5% 1.5% 1,751 17,536 $3.8 C 3 19, %.% 669.4%.% -669 $22.26 Total 31 2,64, , % 14,92.5% 273, % 12.3% 15,574 49,426 $26.92 KINGWOOD HUMBLE B 21 1,394,112 55,511 4.% 1,414.1% 56, % 4.7% 8,164 1,274 $21.8 C 5 168,3 38, %.% 38, % 23.6% 1, $19.13 Total 26 1,562,412 93,83 6.% 1,414.1% 95, % 6.7% 9,484 9,898 $2.71 NASA CLEAR LAKE A 12 1,772, , % 17,559 % 136, % 7.6% -2,241-6,429 $24.15 B 49 3,323,585 1,54, 31.7% 735.% 1,54, % 3.9% -27,977-45,191 $18.72 C 2 586, ,17 2%.% 123,17 2% 22.2% 7,174-32,76 $15.61 Total 81 5,683,31 1,296, % 18,294.3% 1,314, % 23.8% -23,44-84,38 $18.92 NORTH BELT/GREENSPOINT A 24 5,456,15 2,91, % 251, % 3,153, % 57.9% 7,854 26,269 $23.94 B 51 5,29,944 1,717, % 15,73 2.% 1,814, % 34.4% 6,1-32,72 $15.94 C 22 1,342, , % 2,757.2% 278, % 22.3% 2,573 28,137 $14.9 Total 97 12,89,743 4,894, % 36,353 3.% 5,246, % 44.9% 34,527 21,686 $2.58 NORTHEAST NEAR AND OUTLIER A 3 64,7 32, %.% 32, % 5.1% ,535 $. B 5 27,158 29, %.% 29, % 21.9% 15,561-2,963 $23.21 C 2 56,562 12, %.% 12, % 14.9% -3,83 $15. Total 1 94,42 74, %.% 74, % 9.5% 11,64 49,572 $ Houston Research & Forecast Report Q4 217 Office Colliers International

6 Houston Suburban Office Market Summary - Continued DIRECT Q4-217 Q3-217 Q4-217 Q3-217 NORTHWEST AND NORTHWEST OUTLIER A 1 2,223,165 76, % 3,674.2% 79, % 32.4% 9,834-6,996 $24.1 B 76 5,923, , % 13,967.2% 966, % 15.1% -71,74 38,824 $18.9 C 32 1,31,378 51,716 4.%.% 51,716 4.% 4.7% 9,52-14,112 $16.21 Total 118 9,448,388 1,71, % 17,641.2% 1,727, % 17.4% -52,188 17,716 $2.93 RICHMOND FOUNTAINVIEW B 13 78, , %.% 112, % 14.5% 78-2,24 $22.77 C ,445 2, %.% 2, % 7.6% 16,82 23,263 $16.83 Total 25 1,266, , %.% 132, % 11.8% 17,528 21,23 $21.87 SAN FELIPE VOSS A 3 1,72, , %.% 378, % 22.7% 12,592-17,642 $35.86 B 3 3,162, , % 19,475.6% 53, % 14.7% -64,942-36,31 $23.97 Total 33 4,883, , % 19,475.4% 99, % 18.3% -52,35-53,943 $29.3 SOUTH A 1 76,48 7, %.% 7, % 9.5% 1,33 $32.28 B 12 48,812 28,41 6.9%.% 28,41 6.9% 7.6% 2, $26.55 C 5 194,42 48, 24.7%.% 48, 24.7% 25.4% 1,2 $18. Total ,92 83, %.% 83, % 12.9% 3,775 9,952 $27.26 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% $. B ,274 86, % 18.% 86,45 1.6% 1.8% 1,929-11,79 $16.7 C 8 428,964 71, %.% 71, % 13.6% -12,983 1,434 $15.21 Total 2 1,729, , % 18.% 157, % 8.5% -11,54-1,275 $16.65 SOUTHEAST B 17 1,537,874 91,838 6.%.% 91,838 6.% 5.5% -6,813 3,172 $17.6 C 3 142, %.% 978.7%.% -978 $24. Total 2 1,68,293 92, %.% 92, % 4.5% -7,791 3,172 $17.13 SOUTHWEST A 6 1,578, , % 8,72.5% 44, % 23.9% -28,22-68,56 $18.41 B 63 6,11,765 1,165, % 5,42.1% 1,171, % 18.7% -28,198-37,137 $17.88 C 37 1,877, , %.% 145, % 5.4% -44,789 4,62 $15.11 Total 16 9,566,658 1,78, % 13,474.1% 1,722,23 18.% 14.3% -11,189-11,77 $17.77 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 11 95,22 223, % 1, % 233, % 26.% 1, 16,2 $25.59 C 1 21,396.%.%.%.% $. Total 14 1,85, , % 1,136.9% 253, % 23.5% 1, 16,2 $23.52 WEST BELT A 28 3,68, ,3 17.9% 242,9 6.7% 889, % 25.9% -45,9-114,482 $29.74 B 32 1,95, , % 75,954 4.% 349, % 17.4% -18,758 28,73 $23.7 C 4 112,629.%.%.%.% $. Total 64 5,626,536 92, % 318,44 5.7% 1,238, % 22.5% -63,767-85,752 $27.76 WEST LOOP/GALLERIA A 49 18,98,537 3,376, % 687, % 4,63, % 22.2% -45,9-114,482 $37.67 B 52 5,879, , % 12,219.2% 771, % 12.6% -31,499-42,827 $26.8 C 4 216,268.%.%.% 1.3% 2,9-2 $19.5 Total 15 24,194,393 4,135, % 699, % 4,834,873 2.% 19.7% -73,68-157,59 $ Houston Research & Forecast Report Q4 217 Office Colliers International

7 BUILDING NAME ADDRESS TEXAS 717 Texas Avenue RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 % LEASED 48.9% AVAILABLE SF 355,98 MAX CONTIGUOUS SF 355,98 PARKING RATIO 1.3 OWNER Hines BUILDING NAME 11 FANNIN ADDRESS 11 Fannin Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 % LEASED 97.8% AVAILABLE SF 18,379 MAX CONTIGUOUS SF 28,65 PARKING RATIO OWNER JMB Financial Advisors 6 TRAVIS 6 Travis Street 1,656,529 / 22,575 / 75 9% 357,487 84,949 Texas Tower Ltd 4 PENNZOIL PLACE BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN at TEXAS BG GROUP PLACE 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / % 64.4% 8.1% 54.7% 98.4% 51.3% 93.% 156, ,75 162, ,13 46,276 54,981 17,54 19,858 14,414 92,44 252,363 26,226 37,795 53, M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS Holdings Inc. Holdings Inc. Available Jan 218 (Shell Trading) ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN 121 Main Street 1111 Main Street 1 Main Street 68,66 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / % 95.7% 99.7% 167,6 17,7 147,422 42,47 7, , Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment Real Estate HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / % 91.3% 9.3% 7.% 518,476 97, ,55 39,966 23,52 51,86 115,28 2. Brookfield Asset Brookfield Asset Brookfield Asset Spear Street Capital Management Inc. Management Inc. Management Inc KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street 937,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 1% 87.% 98.5% 99.4% 97.7% 92.2% 8.2% 87.% 88.3% 17, ,898 44, ,588 24,723 92, ,533 38,13 511,145 93, ,461 14,59 225,666 24,723 28, ,124 97, , EPEC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF 2,5, 2,, 1,5, 1,, 5, PARKING RATIO OWNER HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 93.5% 1% 62.5% 262,325 89, , ,325 35,98 135, H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties 16 SMITH 16 Smith Street 1,98,399 / 23, / % 365,882 28,593 Brookfield Office Properties, Inc. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp % 17.% 15.% 13.% 1% 9.% 7.% 5.% Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q4-217 Q3-217 Q4-217 Q3-217 A 34 1,6,734 1,794, % 568,53 5.7% 2,362, % 23.6% 141,748 24,728 $34.45 B 63 7,555,862 1,379, % 33,61.4% 1,413, % 18.2% -36,51-38,5 $19.82 C 5 213,32 31, %.% 31, % 14.7% $16.28 Total 12 17,775,898 3,25, % 62, % 3,87, % 21.2% 15,238-13,277 $28.65 THE WOODLANDS A 37 1,627, , % 48,127.5% 1,1, % 1.9% 149,43 1,649 $32.67 B 7 4,425, ,75 1.4% 65, % 524, % 11.5% -15,854 2,1 $25.7 C 5 131,696 37, %.% 37, % 26.3% -3,191 6,65 $25.2 Total ,184,75 1,459, % 113,779.7% 1,572, % 11.2% 13,358 36,724 $3.9 Office Development Pipeline 1.9 million SF of office space is under construction, of which 62% is pre-leased. Build-to-suit projects make up 44% of the pipeline and the remaining 56% is spec office space under construction and is 36% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY Capitol Tower 8 Capitol St CBD 778,344 31% SCD Acquisitions LLC Jun-19 CityPlace 2 - BTS for ABS 171 City Plaza Dr The Woodlands 326,8 93.9% Barker Patrinely Group, Inc Oct-18 CityPlace - HP Building 1 City Plaza Dr The Woodlands 189, 1% Barker Patrinely Group, Inc Jan-19 CityPlace - HP Building 2 City Plaza Dr The Woodlands 189, 1% Barker Patrinely Group, Inc Jan-19 The Post Oak 16 West Loop S West Loop/Galleria 14,579 7% Tellepsen Builders Feb-18 Skylines Now Available Online at colliers.com/texas/houstonskylines At a glance, view available space for eight of Houston s Class A office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS DECEMBER 217 AVAILABLE* * 75 A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS DECEMBER 217 AVAILABLE* * QUOTED ** QUOTED ** $47.38 $ $45.4 $29.22 $48.16 $42.99-$44.99 $53.56 $42.99-$ $42.35 $48.3-$51.3 $46.3 $56 $54. $46.4 $52.41 $3.72 $58.17 $45.85 $58.41 $38.91 $58.82 $46.21 $64.54 $44.6 QUOTED ** Available Sublease Space Central Business District Class A Available Nov 218 Class B $37.67 $33.32 Available Sublease Space Q3 217 Class A: 2,121,744 SF or 6.3% Class B: 33,174 SF or 3.1% *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. $38.45 At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, CBD Class A Rents CBD Class A Vacancy Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX $48. $46. $44. $42. $4. $38. $36. $34. $32. $3. $28. $26. $24. $22. *Vacancy percentage includes direct and sublease space. COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX Houston Research & Forecast Report Q4 217 Office Colliers International

8 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED BG Group Place 811 Main St CBD 972, % 131,628 $53.91 BG Holdco LLC Heritage Plaza 1111 Bagby St CBD 1,212, % 97,532 $56 Brookfield Office Properties, Inc Kirby Grove 2925 Richmond Ave Greenway Plaza 248, % 45,989 $47.31 Midway Companies CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 8,79 $5.4 Midway Cc15 Partners Town Centre One 75 Town & Country Blvd Katy Freeway 253, % 58,65 $42.4 Moody Rambin Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 171,892 $47.81 Invesco Real Estate 39 Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 39,764 $45.48 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 128,33 $44.83 Canada Pension Plan Investment Board One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 197,928 $44.63 TIER REIT, Inc AVAIL. SF RENT Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 8,899 $ $5.47 Note: Available SF includes direct and sublet space as well as any future available space currently listed. Source: CoStar Property OWNER The Woodlands Development Company, L.P. Q4 217 Houston Office Highlights FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com Colliers statistical criteria includes all general purpose multi and single tenant office buildings 2, SF or greater. 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

9 Research & Forecast Report HOUSTON OFFICE Q3 217 Houston s office market vacancy rate continues to struggle amid $5 crude prices Lisa Bridges Director of Market Research Houston Houston s office market continues to struggle as U.S. crude prices waiver around $5 per barrel. According to the U.S. Energy Information Administration (EIA), they are expected to stay in this range through 218. With no indication that prices will rise substantially over the next few years, vacant office space placed on the market by firms in the energy industry will take longer to absorb. Recent news articles indicate that some of the large energy giants reported profits in the second quarter. However, profits were largely driven by lean budgets and staff reductions. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION Annual Change Quarterly Change Quarterly Forecast* Fortunately, most of the proposed projects that were in the construction pipeline when the oil slump hit were put on hold. Companies such as Bank of America, American Bureau of Shipping and HP, have signed leases in proposed buildings that have either recently begun construction or will begin in the very near future. Once these projects deliver, those companies will vacate their existing space, leaving more than million square feet for landlords to backfill. During the third quarter of 217, Houston faced one of the worst natural disasters in history. Hurricane Harvey, a Category 4 hurricane, slammed the Texas coast and dumped over 5 inches of rain in parts of Houston. The event caused widespread flooding, destroying homes, businesses and infrastructure. Several large refineries were shut down due to the flooding and off-shore drilling was stopped once the storm entered the Gulf of Mexico. This event stalled business for several weeks, but Houston was resilient and quickly went back to work. This was a temporary set-back for many, but has had permanent ramifications for others. A joint industry survey confirmed that less than 7% of Houston s office inventory suffered damage. Of that amount, approximately 45% were repaired and back on-line within the first month. Another 3% reported repairs to be completed by the end of the year and the remaining properties were so severely damaged they could not report a time frame for repairs. According to the U.S. Bureau of Labor Statistics, the Houston MSA created 53,5 jobs (not seasonally adjusted) between August 216 and August 217, an annual growth rate of 1.8%. *Projected Summary Statistics Houston Office Market Q3 216 Q2 217 Q3 217 Vacancy Rate 16.9% 18.8% 19.1% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year % 19.6% % 21.4% 18.3% 21.4% Houston Class A $36.1 $35.5 $35.31 CBD Class A $45.38 $44.39 $44.36 Suburban Class A $34.25 $33.16 $32.92 Share or view online at colliers.com/texas/houstonoffice

10 Vacancy & Availability Houston s citywide vacancy rate rose 3 basis points from 18.8% to 19.1% over the quarter, and rose 2 basis points from 17.1% in Q Over the quarter, the average suburban vacancy rate increased 3 basis points from 18.5% to 18.8%, and the average CBD vacancy rate increased 6 basis points from 19.8% to 2.4%. The average CBD Class A vacancy rate increased 1 basis points from 17.3% to 18.3% over the quarter, while the average CBD Class B vacancy rate fell 5 basis points from 28.7% to 28.2%. The average suburban Class A vacancy rate remained steady at 21.4% between quarters, while the average suburban Class B vacancy rate rose 5 basis from 16.4% to 16.9%. Of the 1,79 existing office buildings in our survey, 91 buildings have 1, SF or more of contiguous space available for lease or sublease. Further, 28 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 1. million SF or 4.3% of Houston s total office inventory, and 18.2% of the total available space. Available space differs from vacant space, in that it includes space that is currently being marketed for lease, and may be occupied with a future availability date. Whereas vacant space is truly vacant and is and may still be immediately available. HISTORICAL AVAILABLE SPACE Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 8/16 8/17 HOUSTON 5.7% 5.2% TEXAS 4.9% 4.5% U.S. 5.1% 4.5% JOB GROWTH 25.% Annual Change # of Jobs Added HOUSTON 1.8% 53.5K TEXAS 2.4% 286.3K U.S. 1.5% 2.1M CBD vs. Suburban A OFFICE 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q3 214 Q4 214 Q1 215 CBD Suburban Houston Total Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q % 15.% 1.% 5.%.% AVAILABLE SPACE - 15, SF OR GREATER Large Sublease Availabilities (Total available in building and/or complex) BUILDING TENANT SUBMARKET SF Four WestLake Park BP Katy Freeway 54,327 Two Allen Center Chevron CBD 396,39 One Shell Plaza Shell Oil CBD 32,796 Four Oaks Place BHP West Loop/Galleria 32, Louisiana Enbridge CBD 294,58 Three Greenspoint Place ExxonMobil North Belt 253,562 Three WestLake Park Phillips 66 Katy Freeway 221,723 8 Greenspoint ExxonMobil North Belt 198,256 CityWestPlace 2 Statoil Westchase 19, Clay Rd AMEC Foster Wheeler Katy Freeway 189,285 Energy Center I Foster Wheeler Katy Freeway 182,966 West Memorial Place II IHI E&C Katy Freeway 158,317 Three Northborough FMC Technologies North Belt 151,372 Source: CoStar CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q3 217 Office Colliers International

11 Absorption & Demand Houston s office market posted 669,517 SF of negative net absorption in Q Suburban Class B space recorded the largest loss, with 46,747 SF of negative net absorption, while Suburban Class A posted the largest gain with 61,218 SF of positive net absorption. Some of the tenants that moved during the quarter include Kirkland & Ellis (14,25 SF) in the CBD submarket, ABM Industries Incorporated (62,457 SF) in the E Fort Bend Co/Sugar Land submarket, and Apache Industrial Services Inc. (33,128 SF) in the Northeast Near submarket. Over the last two years, Houston s office market has suffered due to downsizing by large energy companies, and some of these firms moved from leases in third-party buildings into owned property, thus creating a glut of vacant sublease space. However, available sublease space has decreased over the last four quarters, primarily due to lease expirations and space going back to the landlord. There were a few instances where the sublease space was withdrawn by the sublessor. The majority of the sublease space in the market now has three years of term or less remaining. Rental Rates Houston s average Class A asking rental rate increased over the quarter from $35.5 per SF to $35.31 per SF. The average Class A rental rate in the CBD remained steady over the quarter at $44.36 per SF, while the average Suburban Class A rental rate decreased from $33.16 to $32.74 per SF. The current average rental rate, which includes all property classes, for Houston office space is $29.34 per SF gross. Leasing Activity Houston s office leasing activity decreased 18.7% between quarters, dropping from 3.4 million SF in Q2 217 to 2.7 million SF in Q Q3 217 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE 91 Louisiana CBD 431, NRG 1 Aug-17 1 Main CBD 15,26 Porter Hedges LLP 2 Aug Travis CBD 6, EDF Trading NA 1 Jul Main St CBD 5, Gibson Dunn 4 Sep-17 Heritage Plaza CBD 28,56 S&P Global Platts 2 Sep-17 Three Hughes Landing The Woodlands 27,39 Sabinal Energy 1,3 Sep-17 1 New/Direct 3 Renewal 3 Colliers International Transaction 4 Sublease Sales Activity Houston s office investment sales activity increased substantially over the year, increasing by 3.4% since Q With most of the investor community believing the downturn in the energy industry has reached the bottom and has begun to rebound, they now see Houston as offering limited downside and the potential for healthy returns. The average sales price per square foot increased over the quarter, but is still below the historical average. Q3 217 CHANGE IN SALES (YEAR OVER YEAR) 6.% 5.% 4.% 3.% 2.% 1.%.% -1.% Q3 217 OFFICE SALES PRICE PER SF $3 $25 $2 $15 $1 $5-2.% Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17 $ Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17 Sources: CoStar and Real Capital Analytics 3 Houston Research & Forecast Report Q3 217 Office Colliers International

12 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q3-217 Q2-217 Q3-217 Q2-217 CBD A 35 32,894,996 4,817, % 1,189, % 6,6, % 17.3% -315,51-79,994 $44.36 B 29 9,786,995 2,686, % 77,5.8% 2,763, % 28.7% 49,426-99,793 $29.29 C ,182 19, %.% 19, % 12.5% -1,42 $2.26 Total 78 43,559,173 7,612, % 1,266, % 8,879, % 19.8% -265,625-19,189 $42 SUBURBAN A ,573,957 16,991, % 3,72, % 2,712, % 21.4% 61, ,868 $32.92 B ,347,883 12,735, % 477,6.6% 13,212, % 16.4% -46, ,491 $2.54 C 37 12,89,451 1,421, % 14,41.1% 1,435, % 1.3% -58,363-32,4 $17.22 Total ,731,291 31,148, % 4,212,29 2.2% 35,36, % 18.5% -43, ,777 $27.5 OVERALL A ,468,953 21,89, 16.8% 4,91, % 26,719, % 2.3% -253,833-93,862 $35.31 B ,134,878 15,421, % 554,56.6% 15,975, % 17.8% -357, ,698 $22.7 C ,686,633 1,53, % 14,41.1% 1,545, % 1.4% -58,363-42,82 $17.43 Total ,29,464 38,761, % 5,479,96 2.4% 44,24, % 18.8% -669, ,966 $29.34 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q3-217 Q2-217 Q3-217 Q2-217 A 8 2,284, , % 14, % 563, % 18.8% -135,299 33,687 $33.1 B 34 2,587, , % 11,898.5% 251,4 9.7% 8.5% -31,897 4,878 $3.85 C ,211 98, %.% 98, % 21.9% -8,192-4,23 $25.87 Total 56 5,287, , % 152,95 2.9% 913, % 14.% -175,388 7,362 $31.4 BAYTOWN B 3 186,5 4, %.% 4, % 2.7% $21.45 C 3 81,481.%.%.%.% $. Total 6 267,486 4, %.% 4, % 1.9% $21.45 BELLAIRE A 6 1,91, , % 6,638.6% 129, % 12.5% 7,448 14,641 $24.79 B 2 2,511,75 214,69 8.5% 2,91.1% 216, % 6.8% -44,953 12,529 $24.36 C 5 318,58 41, %.% 41, % 13.1% 59 2,65 $17.29 Total 31 3,921, , % 8,729.2% 387, % 7.9% -36,996 29,235 $23.73 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 33,925 8, %.% 8, % 3.8% 3,879-3,879 $2.65 C 7 287,369 14, %.% 14, % 4.9% 2,298 $17.69 Total ,294 22, %.% 22, % 3.% 3,879-1,581 $18.82 E. FORT BEND CO/SUGAR LAND A 17 3,399, , % 86, % 315, % 1.1% 28,94-28,946 $31.19 B 39 2,432, , % 6,211.3% 227, % 1.3% 23,291 2,31 $21.84 C 5 146,524 39, %.% 39, % 26.9% $. Total 61 5,977,87 49,36 8.2% 92, % 582, % 1.6% 52,195-8,645 $ Houston Research & Forecast Report Q3 217 Office Colliers International

13 Houston Suburban Office Market Summary - Continued DIRECT Q3-217 Q2-217 Q3-217 Q2-217 FM 196 A 12 2,912, , % 4,415.2% 29,343 1.% 11.3% 37,766-19,659 $27.84 B 72 4,269, , % 76, % 98, % 19.3% -85,559 46,529 $16.57 C ,914 91, %.% 91, % 8.6% -29,929 6,41 $14.38 Total 15 7,895,644 1,29, % 8,81 % 1,29, % 15.4% -77,722 33,28 $19.7 GREENWAY A 2 7,22,397 1,42, % 32,497.5% 1,74, % 16.% 74,19-25,442 $36.83 B 31 3,193,44 363,6 11.4% 18,435.6% 381, % 1.8% -36,25-31,852 $27. C ,19 72, %.% 72, % 13.5% 759 1,67 $22.56 Total 67 1,936,946 1,477, % 5,932.5% 1,528, % 14.3% 38,924-47,227 $33.72 GULF FREEWAY PASADENA A 1 22,76.%.%.%.% $. B 39 2,318, , %.% 354, % 15.3% ,513 $21.31 C 29 1,83, , %.% 143, % 12.% -13,689-3,395 $22.51 Total 69 3,424,29 497, %.% 497, % 8.8% -13,361 51,118 $21.66 I-1 EAST B 6 427,851 94, %.% 94, % 24.9% 11,864 4,1 $14.91 C 6 25,17 13, 5.2%.% 13, 5.2% 7.3% 5,277 $2.84 Total ,868 17, %.% 17, % 18.1% 17,141 4,1 $15.63 KATY FREEWAY A 89 22,292,442 3,567, % 1,585, % 5,152, % 22.4% -119,326-21,77 $37.25 B 1 9,271,52 1,729, % 75,591.8% 1,85, % 18.4% -1,522-25,416 $22.5 C 32 1,485,888 62, % 14,41 % 77, % 4.6% -9,494-5,619 $18.64 Total ,49,832 5,36, % 1,675, % 7,35, % 2.5% -229, ,85 $32.27 KATY GRAND PARKWAY A 14 1,254, ,22 2.7% 14,92 1.1% 273, % 24.3% 31,89 9,971 $27.63 B ,368 24, %.% 24, % 4.3% 17,536-9,29 $25.91 C 3 19,54.%.%.%.% 297 $26.26 Total 3 2,49, , % 14,92.6% 297, % 14.4% 49,426 1,239 $27.48 KINGWOOD HUMBLE B 21 1,394,112 65,89 4.7%.% 65,89 4.7% 5.4% 1,274 1,928 $21.87 C 5 168,3 39, %.% 39, % 23.3% ,463 $19.36 Total 26 1,562,412 14, %.% 14, % 6.9% 9,898-12,535 $2.92 NASA CLEAR LAKE A 12 1,772, , % 46, % 164, % 8.9% -6,429 2,14 $24.3 B 49 3,32,833 1,42, %.% 1,42, % 29.5% -64,128 51,34 $18.51 C 2 583, ,2 25.%.% 146,2 25.% 16.3% -5,725 3,187 $15.29 Total 81 5,676,499 1,36, % 46,436.8% 1,352, % 22.% -121,282 56,595 $18.67 NORTH BELT/GREENSPOINT A 24 5,456,15 2,837, % 248, % 3,86, % 57.1% 26, ,763 $24.25 B 51 5,29,944 1,695, % 96,8 1.8% 1,791, % 33.2% -32,72-37,155 $15.8 C 22 1,343, ,46 2.2%.% 271,46 2.2% 22.3% 28,137-22,885 $14.3 Total 97 12,9,743 4,84, % 344, % 5,149, % 43.3% 21,686-34,83 $2.71 NORTHEAST NEAR AND OUTLIER A 3 64,7 32, %.% 32,465 *5.1%.% *52,535 $. B 5 27,158 45, %.% 45, % 2.5% -2,963 23,948 $23.59 C 2 56,562 8, %.% 8, % 14.9% $15. Total 1 94,42 86, %.% 86, % 6.2% 49,572 23,948 $13.88 *Vacancy and absorption increased over the quarter due to the delivery of a new building. Tenant moved in thus the absorption, but part of the building is still vacant. 5 Houston Research & Forecast Report Q3 217 Office Colliers International

14 Houston Suburban Office Market Summary - Continued DIRECT Q3-217 Q2-217 Q3-217 Q2-217 NORTHWEST AND NORTHWEST OUTLIER A 1 2,223,165 75, % 6,15.3% 711, % 31.7% -6,996 6,273 $23.23 B 76 5,918, , % 8,266.1% 873, % 15.6% 51,124 17,445 $18.96 C 32 1,31,378 6, %.% 6, % 3.6% -14,112 3,271 $14.25 Total 118 9,443,341 1,63, % 14,371.2% 1,644, % 17.9% 3,16 26,989 $2.63 RICHMOND FOUNTAINVIEW B 13 78, , %.% 113, % 14.2% -2,24 33,337 $17.43 C ,445 36, %.% 36, % 12.4% 23,263 3,452 $16.46 Total 25 1,266,643 15, %.% 15, % 13.2% 21,23 36,789 $17.19 SAN FELIPE VOSS A 3 1,72,793 39, % 1,.1% 391, % 21.7% -17, $36.27 B 31 3,25,259 51, % 6,492.2% 57, % 14.3% -49,984-6,493 $23.75 Total 34 4,926,52 891, % 7,492.2% 899, % 17.7% -67,626-5,528 $29.23 SOUTH A 1 76,48 7, %.% 7, % 22.7% 1,33-7,252 $32.28 B ,619 3, %.% 3, % 8.6% -81-1,347 $23.54 C 5 194,42 49,2 25.4%.% 49,2 25.4% 25.4% $18. Total ,79 87, %.% 87, % 15.5% 9,952-8,599 $21.15 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% $. B ,821 98, % 958.1% 99, % 1.7% -22,364 5,62 $16.7 C 8 393,112 6, %.% 6, % 15.2% ,135 $15.61 Total 2 1,6, , % 958.1% 159,41 1.% 7.2% -22,64-5,515 $15.9 SOUTHEAST B 17 1,51,848 73, %.% 73, % 5.6% 9,96-38,58 $17.18 C 3 142,419.%.%.%.% $6.76 Total 2 1,653,267 73, %.% 73, % 5.1% 9,96-38,58 $17.18 SOUTHWEST A 6 1,578,768 29, % 32, % 242, % 1% -68,56 4,53 $18.52 B 65 6,187,879 1,38, % 5,42.1% 1,43, % 16.3% -37, ,85 $17.2 C 38 1,93,996 12, %.% 12, % 5.6% 4,62 2,53 $15.35 Total 19 9,697,643 1,35, % 38,195.4% 1,389, % 13.4% -11,77 122,361 $17.26 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 11 95,22 224, % 1, % 234, % 27.8% 16,2 6,252 $25.59 C 1 21,396.%.%.%.% $. Total 14 1,85, , % 1,136.9% 254, % 25.% 16,2 6,252 $23.52 WEST BELT A 29 3,623, , % 95, % 814, % 28.7% 226, ,859 $28.3 B 32 1,95, , % 92,1 4.8% 33, % 18.9% 28,73 9,416 $22.61 C 4 112,629.%.%.%.% $. Total 65 5,641, ,14 17.% 187, % 1,145, % 23.% 255,575-64,443 $26.88 WEST LOOP/GALLERIA A 48 17,816,947 3,279, % 63, % 3,91, % 21.3% -114, ,391 $37.5 B 53 6,161,178 79, % 12,219.2% 82,64 13.% 12.% -62,98-28,842 $26.99 C 4 216,268 2,9 1.3%.% 2,9 1.3% 1.2% -2 1,512 $19.5 Total 15 24,194,393 4,73, % 642,94 2.7% 4,716,5 19.5% 18.8% -176,78-38,721 $ Houston Research & Forecast Report Q3 217 Office Colliers International

15 BUILDING NAME ADDRESS TEXAS 717 Texas Avenue RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 % LEASED 48.9% AVAILABLE SF 355,98 MAX CONTIGUOUS SF 355,98 PARKING RATIO 1.3 OWNER Hines BUILDING NAME 11 FANNIN ADDRESS 11 Fannin Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 % LEASED 97.8% AVAILABLE SF 18,379 MAX CONTIGUOUS SF 28,65 PARKING RATIO OWNER JMB Financial Advisors 6 TRAVIS 6 Travis Street 1,656,529 / 22,575 / 75 9% 357,487 84,949 Texas Tower Ltd 4 PENNZOIL PLACE BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN at TEXAS BG GROUP PLACE 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / % 64.4% 8.1% 54.7% 98.4% 51.3% 93.% 156, ,75 162, ,13 46,276 54,981 17,54 19,858 14,414 92,44 252,363 26,226 37,795 53, M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS Holdings Inc. Holdings Inc. Available Jan 218 (Shell Trading) ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN 121 Main Street 1111 Main Street 1 Main Street 68,66 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / % 95.7% 99.7% 167,6 17,7 147,422 42,47 7, , Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment Real Estate HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / % 91.3% 9.3% 7.% 518,476 97, ,55 39,966 23,52 51,86 115,28 2. Brookfield Asset Brookfield Asset Brookfield Asset Spear Street Capital Management Inc. Management Inc. Management Inc KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street 937,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 1% 87.% 98.5% 99.4% 97.7% 92.2% 8.2% 87.% 88.3% 17, ,898 44, ,588 24,723 92, ,533 38,13 511,145 93, ,461 14,59 225,666 24,723 28, ,124 97, , EPEC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF 2,5, 2,, 1,5, 1,, 5, PARKING RATIO OWNER HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 93.5% 1% 62.5% 262,325 89, , ,325 35,98 135, H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties 16 SMITH 16 Smith Street 1,98,399 / 23, / % 365,882 28,593 Brookfield Office Properties, Inc. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp % 17.% 15.% 13.% 1% 9.% 7.% 5.% Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q3-217 Q2-217 Q3-217 Q2-217 A 33 9,816,819 1,685, % 691,512 7.% 2,377, % 24.5% 25,494-29,891 $35.95 B 63 7,555,163 1,366, % 29,981.4% 1,396, % 18.% -38,5-14,325 $19.99 C 5 213,32 31, %.% 31, % 14.7% -5,762 $16.28 Total 11 17,585,284 3,83, % 721, % 3,85, % 21.6% -12,511-49,978 $28.68 THE WOODLANDS 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 1% 11.3% 45,386 86,492 $32.3 Office Development Pipeline 2.2 million SF of office space is under construction, of which 47.3% is pre-leased. Build-to-suit projects make up 36.5% of the pipeline, and the remaining 1,374,315 SF is spec office space under construction which is approximately 23.4% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY Capitol Tower 8 Capitol St CBD 778, % SCD Acquisitions LLC Jun-19 CityPlace 2 - BTS for ABS 171 City Plaza Dr The Woodlands 326,8 93.9% Barker Patrinely Group, Inc Oct-18 CityPlace -BTS for HP City Plaza Dr The Woodlands 189, 1% Barker Patrinely Group, Inc Jan-19 Kirby Collection 32 Kirby Dr Greenway Plaza 188,545 % Thor Properties LLC Oct-17 Lockton Place 3657 Briarpark Dr Westchase 187,11 8.9% Triten Real Estate Partners Oct-17 Lake Pointe One Creek Bend Dr E Fort Bend Co/Sugar Land 147,159 % Planned Community Developers Sep-18 The Post Oak 16 West Loop S West Loop/Galleria 14, % Tellepsen Builders Dec-17 Skylines Now Available Online at colliers.com/texas/houstonskylines At a glance, view available space for eight of Houston s Class A office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS SEPTEMBER 217 AVAILABLE* * 75 A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS SEPTEMBER 217 AVAILABLE* * QUOTED ** QUOTED ** $47.38 $ $45.4 $29.22 $48.16 $42.99-$44.99 $53.56 $42.99-$ $42.35 $48.3-$51.3 $46.3 $56 $54. $46.4 $52.41 $3.72 $58.17 $45.85 $58.41 $38.91 $58.82 $46.21 $64.54 $44.6 QUOTED ** Available Sublease Space Central Business District Class A Available Nov 218 Class B $37.67 $33.32 Available Sublease Space Q3 217 Class A: 2,121,744 SF or 6.3% Class B: 33,174 SF or 3.1% *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. $38.45 At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, CBD Class A Rents CBD Class A Vacancy Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX $48. $46. $44. $42. $4. $38. $36. $34. $32. $3. $28. $26. $24. $22. *Vacancy percentage includes direct and sublease space. COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX Houston Research & Forecast Report Q3 217 Office Colliers International

16 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED BG Group Place 811 Main St CBD 972, % 17,54 $52.41 BG Holdco LLC Heritage Plaza 1111 Bagby St CBD 1,212, % 44,143 $56 Brookfield Office Properties, Inc Kirby Grove 2925 Richmond Ave Greenway Plaza 248, % 35,989 $47.31 Midway Companies CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 8,79 $5.4 Midway Cc15 Partners Town Centre One 75 Town & Country Blvd Katy Freeway 253, % 87,278 $42.4 Moody Rambin Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 187,88 $47.81 Invesco Real Estate 39 Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 39,764 $45.48 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 128,33 $45.83 Parkway Properties, Inc One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 28,682 $42.63 TIER REIT, Inc AVAIL. SF RENT Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 8,899 $42.6- $48.6 OWNER The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property Q3 217 Houston Office Highlights 2,5, 2,, 1,5, 1,, 5, - CBD Galleria/West Loop Katy Freeway North Belt Westchase FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

17 Research & Forecast Report HOUSTON OFFICE Q2 217 Houston office vacancy increases again over the quarter, now at highest rate since 1994 Lisa Bridges Director of Market Research Houston Houston s office market continues to struggle as global oil futures trade below $5 a barrel. With no indication that prices will rise in the immediate future, it will take a while to absorb all of the space the energy industry has placed on the market over the last few years. The good news is most of the larger office projects that were started before the oil slump have delivered, and the projects that were in the construction pipeline were put on hold. There are some tenants in the market with a preference for newer innovative space, and certain developers are willing to meet these requirements even in an oversaturated market. Skanska USA recently signed a deal with Bank of America to occupy 2, SF in a new building known as Capitol Tower in the CBD and broke ground during the second quarter with the building scheduled to deliver in 219. This isn t such great news for the rest of the submarket, as Bank of America will vacate approximately 4, SF in its existing Class A building at 7 Louisiana St. Absorption remained flat, posting about 7, SF of negative net absorption. The average vacancy rate rose slightly by 4 basis points over the quarter, and by 23 basis points annually. Available sublease space decreased slightly but this was primarily due to expiring terms and the space going back to direct marketing by the landlord. There were a few instances where the sublease space was withdrawn by the sublessor. The majority of the sublease space in the market now has 1-3 years of term remaining. According to the U.S. Bureau of Labor Statistics, the Houston metropolitan area created 45,3 jobs (not seasonally adjusted) between May 216 and May 217. Most of the recent quarterly job growth occurred in employment services, public education, food services and drinking places, health care, and fabricated metal products. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Summary Statistics Houston Office Market Q2 216 Q1 217 Q2 217 Vacancy Rate 16.5% 18.4% 18.8% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year Annual Change % 18.7% Quarterly Change % 2.8% Quarterly Forecast* 17.3% 21.4% Houston Class A $35.94 $35.79 $36.12 CBD Class A $44.76 $44.39 $44.36 Suburban Class A $34.54 $33.26 $33.76 Share or view online at colliers.com/texas/houstonoffice

18 Vacancy & Availability Houston s citywide vacancy rate rose 4 basis points from 18.4% to 18.8% over the quarter, and rose 23 basis points from 16.5% in Q Over the quarter, the average suburban vacancy rate increased 3 basis points from 18.2% to 18.5%, and the average CBD vacancy rate increased 5 basis points from 19.3% to 19.8%. The average CBD Class A vacancy rate increased 2 basis points from 17.1% to 17.3% over the quarter, while the average CBD Class B vacancy rate increased 1 basis points from 27.7% to 28.7%. The average suburban Class A vacancy rate increased 6 basis points from 2.8% to 21.4%, and in contrast, the average suburban Class B vacancy rate fell 3 basis points between quarters from 16.7% to 16.4%. Of the 1,77 existing office buildings in our survey, 94 buildings have 1, SF or more of contiguous space available for lease or sublease. Further, 29 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 1.7 million SF or 4.7% of Houston s total office inventory, and 19.7% of the total available space. Available space differs from vacant space as it includes space that is currently being marketed for lease and may be vacant or occupied with a future availability date. AVAILABLE SPACE Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 5/16 5/17 HOUSTON 4.9% 5.1% TEXAS 4.3% 4.4% U.S. 4.5% 4.1% JOB GROWTH 25.% Annual Change # of Jobs Added HOUSTON 1.5% 45.3K TEXAS 2.2% 268.1K U.S. 1.6% 2.26M CBD vs. Suburban A OFFICE 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q2 214 Q3 214 Q4 214 CBD Suburban Houston Total Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q % 15.% 1.% 5.%.% Large Sublease Availabilities (Total available in building and/or complex) BUILDING TENANT SUBMARKET SF One Shell Plaza Shell Oil CBD 81,99 Four WestLake Park BP Katy Freeway 54,327 Four Oaks Place BHP West Loop/Galleria 411,38 Two Allen Center Chevron CBD 396,39 11 Louisiana Enbridge CBD 294,58 Three Greenspoint Place ExxonMobil North Belt 253,562 Three WestLake Park Phillips 66 Katy Freeway 221,723 Energy Center II WorleyParsons Katy Freeway 23,343 Pinnacle Westchase Phillips 66 Westchase 198,425 8 Greenspoint ExxonMobil North Belt 198,256 CityWestPlace 2 Statoil Westchase 19, Clay Rd AMEC Foster Wheeler Katy Freeway 189,285 Westway II GE Oil & Gas West Belt 186,957 Energy Center I Foster Wheeler Katy Freeway 182,966 West Memorial Place II IHI E&C Katy Freeway 158,317 Source: CoStar CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q2 217 Office Colliers International

19 Absorption & Demand Houston s office market posted 654,564 SF of negative net absorption in Q Suburban Class A space recorded the largest loss, with 754,825 SF of negative net absorption, while Suburban Class B posted the largest gain with 336,469 SF of positive net absorption. Some of the tenants contributing to the positive absorption include Vantiv (46,777 SF) in the North Belt/Greenspoint submarket, Disa Global Solutions Inc. (34,865 SF) in the West Belt submarket and PSS Industrial Group (33,286 SF) in the South Main/Med Center submarket. Over the last two years, Houston s office market has suffered due to downsizing by large energy companies, and some of these firms moved from leases in third-party buildings into owned property, thus creating a glut of vacant sublease space. However, available sublease space has decreased over the last three quarters, primarily due to lease expirations and space going back to the landlord. Rental Rates Houston s average Class A asking rental rate increased over the quarter from $35.79 per SF to $36.12 per SF. The average Class A rental rate in the CBD decreased marginally over the quarter while the average Suburban Class A rental rate increased from $33.26 to $33.76 per SF. The current average rental rate, which includes all property classes, for Houston office space is $29.89 per SF gross. Leasing Activity Houston s office leasing activity changed marginally between quarters. It increased by 1, SF to 2.6 million SF of transactions in Q Q2 217 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE Post Oak Central West Loop/Galleria 524, Apache Corporation 3 Jun-17 Capitol Tower CBD 29,447 Bank of America 5 Apr-17 One Allen Center CBD 24, Motiva Enterprises 1,2 May-17 Port Crossing Commerce Center Southeast 77,892 MRC Global 5,6 Jun-17 Air Liquide Center North Katy Freeway 73,128 Archrock Inc. 4 May Broadfield Katy Freeway 54,426 Saipem 7 May-17 Grandway West - Bldg 4 Katy Grand Parkway West 35,449 PCL Industrial Construction 5 Jun-17 1 Expansion 2 Renewal 3 Extension 4 Sublease 5 Prelease in proposed or building under construction 6 Colliers International Transaction 7 New/Direct Sales Activity Houston s office investment sales activity increased substantially over the year, increasing by 439% since Q With most of the investor community believing the downturn in the energy industry has reached the bottom and has begun to rebound, they now see Houston as offering limited downside and the potential for healthy returns. The average sales price increased marginally over the quarter, but is still well below the historical average. Q2 217 CHANGE IN SALES (YEAR OVER YEAR) Q2 217 OFFICE SALES PRICE PER SF Sources: CoStar and Real Capital Analytics 3 Houston Research & Forecast Report Q2 217 Office Colliers International

20 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT CBD Q2-217 Q1-217 Q2-217 Q1-217 A 35 32,892,879 4,911, % 789, % 5,71, % 17.1% -89, ,338 $44.36 B 29 9,786,995 2,736, % 76,577.8% 2,813, % 27.7% -99,793-17,36 $29.15 C ,797 19, %.% 19, % 1.8% -1,42-2,491 $2.22 Total 79 43,61,671 7,757, % 866,58 2.% 8,624, % 19.3% -199,99-662,189 $38.65 SUBURBAN A ,618,239 17,78, % 3,559, % 2,638,9 21.4% 2.8% -754, ,265 $33.76 B ,258,117 12,272, % 559,199.7% 12,831, % 16.7% 336, ,793 $2.5 C 38 12,944,939 1,39, % 19,189.1% 1,328,65 1.3% 1.% -36,218-9,926 $15.57 Total ,821,295 3,659, % 4,137, % 34,797, % 18.2% -454,574-62,454 $27.67 OVERALL A ,511,118 21,99, % 4,349,26 3.4% 26,339, % 19.6% -844,62-242,73 $36.12 B ,45,112 15,8, % 635,776.7% 15,644, % 18.1% 236,676-47,153 $22.8 C ,866,736 1,419,15 1.2% 19,189.1% 1,438, % 1.3% -46,62-12,417 $15.93 Total ,422,966 38,417, % 5,3, % 43,421, % 18.4% -654, ,643 $29.89 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q2-217 Q1-217 Q2-217 Q1-217 A 8 2,284, , % 6,556.3% 428, % 2.2% 33,687 19,721 $33.87 B 33 2,566, , %.% 219, % 1.1% 4,878-31,288 $28.93 C ,39 84, % 5, % 9, % 19.8% -4,23-1,51 $25.77 Total 56 5,287, , % 12,447.2% 738, % 15.3% 7,362-13,77 $31.43 BAYTOWN B 3 186,5 4, %.% 4, % 2.7% $21.45 C 3 81,481.%.%.%.% $. Total 6 267,486 4, %.% 4, % 1.9% $21.45 BELLAIRE A 6 1,91,536 12, % 11, % 132, % 13.5% 14,641-3,236 $24.82 B 2 2,516, , % 2,91.1% 135,23 5.4% 5.9% 12,529 8,124 $24.26 C 5 318,58 41, %.% 41, % 13.7% 2,65-5,88 $17.17 Total 31 3,926, , % 13,767.4% 39, % 8.6% 29, $23.49 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 33,925 12, %.% 12, % 2.7% -3,879 15,198 $18.6 C 7 277,66 7, %.% 7, % 3.3% 1,536 8,49 $14.91 Total ,585 2,166 3.%.% 2,166 3.% 2.7% -2,343 23,247 $16.89 E. FORT BEND/SUGAR LAND A 17 3,399,199 26, % 83,77 2.5% 344, % 9.3% -28,946 1,851 $31.18 B 39 2,432, , % 21,674.9% 251, % 11.2% 2,31 7,124 $21.74 C 5 146,524 39, %.% 39, % 26.9% $. Total 61 5,977,87 529, % 15, % 634, % 1.5% -8,645 8,975 $ Houston Research & Forecast Report Q2 217 Office Colliers International

21 Houston Suburban Office Market Summary - Continued DIRECT FM 196 Q2-217 Q1-217 Q2-217 Q1-217 A 12 2,912, ,35 1.9% 11,759.4% 328, % 1.6% -19,659 7,791 $27.81 B 72 4,271,48 741, % 8, % 822, % 2.3% 46,529-54,518 $16.7 C ,914 61, %.% 61, % 9.5% 6,41 5,1 $14.26 Total 15 7,897,94 1,119, % 92, % 1,212, % 15.8% 33,28-41,717 $19.7 GREENWAY A 2 7,22,397 1,136, % 13,141.2% 1,149, % 15.6% -25,442-29,925 $37.7 B 31 3,194,36 334, % 1,998.3% 345, % 9.8% -31,852-38,114 $26.56 C ,19 73, %.% 73, % 15.4% 1,67-7,42 $22.18 Total 67 1,937,812 1,543, % 24,139.2% 1,567, % 13.9% -47,227-75,459 $34.9 GULF FREEWAY/PASADENA A 1 22,76.%.%.%.% 3,122 $23. B 39 2,38,259 23,979 1.%.% 23,979 1.% 9.4% 6,513 15,871 $21.76 C 29 1,18,382 73,67 6.6%.% 73,67 6.6% 6.4% -1,595 1,222 $14.7 Total 69 3,439,347 34,46 8.8%.% 34,46 8.8% 8.3% 58,918 2,215 $19.91 I-1 EAST B 5 343,71 89, %.% 89, % 27.1% 3,81-6,972 $14.64 C 6 25,17 18, %.% 18, % 7.3% $2.84 Total ,718 17, %.% 17, % 18.8% 3,81-6,972 $15.69 KATY FREEWAY A 87 22,242,43 3,494, % 1,538, % 5,32, % 21.5% -251,376 22,562 $37.51 B 1 9,271,52 1,595, % 57,553.6% 1,653, % 17.6% -25, ,447 $22.64 C 32 1,485,888 54, % 12,922.9% 67, % 4.2% -5,619-3,861 $18.24 Total ,999,82 5,145, % 1,68, % 6,754,22 2.5% 19.6% -282,411 61,254 $32.69 KATY/GRAND PARKWAY WEST A 14 1,254,281 35, %.% 35, % 25.1% 9,971 3,479 $27.39 B ,368 41, %.% 41, % 3.4% -9,29 16,566 $25.65 C 3 19,54.%.%.% 2.% $26.26 Total 3 2,49, , %.% 346, % 14.5% 1,239 2,758 $27.18 KINGWOOD/HUMBLE B 21 1,41,599 59, % 8,73.6% 68, % 5.3% 5,59 1,235 $23.22 C 5 168,3 39, %.% 39, % 14.7% -14,463 $15.47 Total 26 1,569,899 99,85 6.3% 8,73.6% 17, % 6.3% -9,44 1,235 $2.15 NASA/CLEAR LAKE A 12 1,77, , % 46,31 2.6% 157, % 9.% 2,14-33 $24.17 B 49 3,319,55 1,11,52 3.5%.% 1,11,52 3.5% 3.7% 51,34-23,328 $18.24 C 2 658,589 93, %.% 93, % 14.2% $15.9 Total 81 5,748,617 1,216, % 46,31.8% 1,263,55 22.% 22.% 53,59-24,22 $18.54 NORTH BELT/GREENSPOINT A 24 5,448,487 2,831, % 248, % 3,8, % 52.% -247,515 15,366 $24.14 B 51 5,346,53 1,731, % 181, % 1,879, % 34.7% -26,18-33,161 $16.87 C 22 1,343, , % 376.% 299, % 2.6% -22,885-1,9 $14.4 Total 97 12,138,324 4,862, % 431, % 5,259, % 4.9% -296,58 61,35 $2.93 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7.%.%.%.% $. B 5 27,158 42, %.% 42, % 32.1% 23,948-3,889 $23.59 C 2 56,562 8, %.% 8, % 14.9% $15. Total 9 819,42 5, %.% 5, % 9.1% 23,948-3,889 $ Houston Research & Forecast Report Q2 217 Office Colliers International

22 Houston Suburban Office Market Summary - Continued DIRECT NORTHWEST AND NORTHWEST OUTLIER Q2-217 Q1-217 Q2-217 Q1-217 A 1 2,223,165 69, % 13,858.6% 74, % 32.% 6,273-31,317 $22.87 B 76 5,922,24 919, % 4,2.1% 924, % 15.9% 17,445 1,884 $18.75 C 32 1,281,482 62, %.% 62, % 5.1% 3, $14.3 Total 118 9,426,887 1,672, % 18,58.2% 1,69, % 18.2% 26,989-28,77 $2.27 RICHMOND/FOUNTAINVIEW B , , %.% 173, % 26.5% 33,337-11,869 $17.8 C ,445 6, %.% 6, % 13.1% 3,452 1,314 $17.1 Total 25 1,266, , %.% 233, % 21.4% 36,789-1,555 $17.62 SAN FELIPE/VOSS A 3 1,72, , % 1,.1% 414, % 24.1% ,344 $36.33 B 31 3,25, , % 6,219.2% 457, % 14.1% -6,493-24,333 $23.84 Total 34 4,926,52 865, % 7,219.1% 872, % 17.6% -5,528-2,989 $29.81 SOUTH A 1 76,48 17, %.% 17, % 13.2% -7,252 $32.42 B ,619 3, %.% 3, % 8.2% -1,347-4,148 $23.44 C 5 194,42 49,2 25.4%.% 49,2 25.4% 25.4% 2,63 $18. Total ,79 97, %.% 97, % 14.1% -8,599-2,85 $22.29 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% $. B ,821 76, % 85.1% 77,15 1.7% 11.4% 5,62-6,124 $16.49 C 8 393,112 39,5 9.9%.% 39,5 9.9% 7.1% -11,135-6 $19.49 Total 2 1,6, ,17 7.2% 85.1% 116,2 7.2% 6.9% -5,515-6,724 $17.51 SOUTHEAST B 17 1,51,848 83, %.% 83, % 3.% -38, $15.67 C 3 142,419.%.%.%.% $6.76 Total 2 1,653,267 83, %.% 83, % 2.8% -38, $15.67 SOUTHWEST A 7 1,651,91 187, % 2,54.2% 19, % 11.8% 4,953 4,816 $18.75 B 65 6,221,695 1,1, % 5,42.1% 1,6, % 18.% 115,85-66,376 $17.13 C 38 1,924, ,17 5.8%.% 112,17 5.8% 5.8% 283 6,399 $14.72 Total 11 9,798,132 1,3, % 7,942.1% 1,38, % 14.6% 121,41-55,161 $17.16 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 11 95,22 241, % 1, % 251, % 28.4% 6,252 2,8 $25.59 C 1 21,396.%.%.%.% $. Total 14 1,85,138 26, % 1,136.9% 27, % 25.5% 6,252 2,8 $23.65 WEST BELT A 29 3,673,25 759,22 2.7% 187, % 946, % 24.6% -42,783-43,819 $29.97 B 32 1,93,446 24, % 118,75 6.2% 359, % 23.6% 9,416 1,63 $2.81 C 4 162,629 16,2 1.%.% 16,2 1.% 1.5% 9-8 $24.58 Total 65 5,739,325 1,16, % 36, % 1,322, % 23.9% 48,533-34,16 $27.71 WEST LOOP/GALLERIA A 49 17,884,563 3,16, % 659, % 3,82, % 19.8% -272,966-15,439 $37.39 B 53 6,161, ,5 11.7% 17,51.3% 74,56 12.% 11.6% -28,842 15,33 $27.46 C 4 216,268 2,7 1.2%.% 2,7 1.2% 1.9% 1,512 6,849 $. Total 16 24,262,9 3,886, % 676, % 4,563, % 17.6% -3,296 6,443 $ Houston Research & Forecast Report Q2 217 Office Colliers International

23 BUILDING NAME ADDRESS TEXAS 717 Texas Avenue RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 % LEASED 48.9% AVAILABLE SF 355,98 MAX CONTIGUOUS SF 355,98 PARKING RATIO 1.3 OWNER Hines BUILDING NAME 11 FANNIN ADDRESS 11 Fannin Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 % LEASED 97.8% AVAILABLE SF 71,12 MAX CONTIGUOUS SF 28,65 PARKING RATIO OWNER JMB Financial Advisors 6 TRAVIS 6 Travis Street 1,656,529 / 22,575 / % 386,129 84,919 Texas Tower Ltd 4 PENNZOIL PLACE BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN at TEXAS BG GROUP PLACE 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / % 64.4% 8.1% 54.7% 98.4% 5.9% 91.4% 17,11 348,75 162, , ,728 58, ,643 19,858 14,414 92,44 188, ,882 37,795 53, M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS Holdings Inc. Holdings Inc. Available Jan 218 (Shell Trading) ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN 121 Main Street 1111 Main Street 1 Main Street 68,66 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / % 95.7% 99.7% 167,6 17,7 147,422 42,47 7, , Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment Real Estate HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / % 93.9% 9.3% 69% 518,476 66,696 27,36 181,175 28,181 12,485 51,86 115,28 2. JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Spear Street Capital KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street 937,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / % 86.3% 99.1% 99.4% 97.7% 92.8% 78.2% 96% 88.3% 99, ,13 72, ,588 24,723 19, , , ,145 85,53 114,372 28,56 22,997 24,723 37,14 121, , , EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. 2,5, 2,, 1,5, 1,, BUILDING NAME 5, ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF PARKING RATIO OWNER HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 93.5% 1% 66.7% 95,295 34,378 35,98 135, H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties 16 SMITH 16 Smith Street 1,98,399 / 23, / % 359,178 28,593 Brookfield Office Properties, Inc. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp. $48. $46. $44. $42. $4. $38. $36. $34. $32. $3. $28. $26. $24. $ % 17.% 15.% 13.% 1% 9.% 7.% 5.% Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q2-217 Q1-217 Q2-217 Q1-217 A 33 9,816,819 1,714, % 688,486 7.% 2,42, % 24.2% -29,891-1,115 $36.6 B 62 7,476,713 1,354, % 16,11.2% 1,37, % 18.1% -14,325 2,64 $19.71 C 5 213,32 31, %.% 31, % 12.% -5,762 2,195 $16.28 Total 1 17,56,834 3,99, % 74,587 4.% 3,84, % 21.4% -49,978-95,28 $28.72 THE WOODLANDS A 38 1,683,16 1,117, % 46,534.4% 1,163, % 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% 62,894.4% 1,717, % 11.8% 86,492 33,552 $32.41 Office Development Pipeline Houston s construction pipeline for office space contains 2.2 million SF of which 37% is pre-leased. Build-to-suit projects make up 43% of the pipeline, and the remaining 1,33,13 SF is spec office space under construction which is approximately 37% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY Capitol Tower 8 Capitol St CBD 778, % SCD Acquisitions LLC Jun-19 CityPlace 2 - BTS for ABS 171 City Plaza Dr The Woodlands 326,8 93.9% Barker Patrinely Group, Inc Oct-18 Kirby Collection 32 Kirby Dr Greenway Plaza 188,545 % Thor Properties LLC Aug-17 Lockton Place 3657 Briarpark Dr Westchase 187, % Triten Real Estate Partners Oct-17 Lake Pointe One Creek Bend Dr E Fort Bend Co/Sugar Land 147,159 % Planned Community Developers Sep-18 The Post Oak 16 West Loop S West Loop/Galleria 14, % Tellepsen Builders Dec-17 Skylines Now Available Online at colliers.com/texas/houstonskylines At a glance, view available space for eight of Houston s Class A office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS JUNE 217 AVAILABLE* * 75 A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS JUNE 217 AVAILABLE* * QUOTED ** QUOTED ** $47.38 $ $45.4 $29.22 $48.16 $42.99-$44.99 $53.56 $42.99-$44.99 Available July 6 7 $42.35 $48.3-$51.3 $46.3 $56 $54. $46.4 $52.41 $3.72 $58.17 $45.85 $58.41 $38.91 $58.82 $46.21 $64.54 $44.6 QUOTED ** Available Sublease Space Central Business District Class A Class B $37.67 $33.32 Available Sublease Space Q2 217 Class A: 2,214,721 SF or 6.6% Class B: 32,123 SF or 3.1% *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. $38.45 At a glance, view available space for eight of Houston s class a office skylines Class A Rental Rate and Vacancy Percentage Central including Business District - Houston, CBD, TX Galleria, CBD Class A Rents CBD Class A Vacancy Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. *Vacancy percentage includes direct and sublease space. COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX Houston Research & Forecast Report Q2 217 Office Colliers International

24 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) BG Group Place 811 Main St CBD 972, % 116,538 $52.41 BG Holdco LLC 69 Main at Texas 69 Main St CBD 1,56, % 58,444 $54. Hines Interests Limited Partnership CityCentre One 8 Town & Country Blvd Katy Freeway 119, % 27,779 $56 Stockbridge Capital Group LLC Town Centre One 75 Town & Country Blvd Katy Freeway 253, % 93,826 $42.54 Moody Rambin Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 148,635 $49.9 Invesco Real Estate 39 Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 3,75 $45.48 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 1,331 $47.33 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 27,681 $42.63 TIER REIT, Inc. 21 Waterway 21 Waterway Ave The Woodlands 14, % 7,234 $ Waterway Holding LLC Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 4,355 $49.64 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property OWNER Q2 217 Houston Office Highlights FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

25 Research & Forecast Report HOUSTON OFFICE Q1 217 Houston office construction down 5% from one year ago Lisa Bridges Director of Market Research Houston Houston s office market has struggled over the past few years with rising vacancy and slower than average job growth due to a weakened energy market. However, as the office construction pipeline has grown smaller and most spec developments have been put on hold, the office market appears to be stabilizing. Although the average vacancy rate in Houston increased 1 basis points over the quarter, 1.8M SF of new inventory delivered and 4% of that space was vacant. Available sublease space has decreased over the last two quarters and energy sector layoffs have declined. The market will most likely remain relatively flat, plodding through 217. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Annual Change Quarterly Change Quarterly Forecast* Houston s office market posted.7m SF of negative net absorption during the first quarter, which is only.3% of Houston s total office inventory. Developers have been disciplined over the last few years as evidenced by the fact the construction pipeline has shrunk by 5% in just one year and by 65% in two years. The 1.8M SF of office space under construction is 43% pre-leased and the majority is scheduled to deliver within the next year. Recent press announcements regarding tenants pre-leasing space in proposed buildings indicates a preference for newer innovative space. Although this will eventually add more vacant space to an already saturated market, it is a very small percentage overall. According to the U.S. Bureau of Labor Statistics, the Houston metropolitan area created 19,3 jobs (not seasonally adjusted) between February 216 and February 217. Most of the job growth occurred in arts, entertainment & recreation, government, retail trade, and education. Summary Statistics Houston Office Market Q1 216 Q4 216 Q1 217 Vacancy Rate 15.3% 17.5% 18.5% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year 11.7% 16.% % 19.7% 17.% 2.5% Houston Class A $27.98 $35.35 $35.79 CBD Class A $42.15 $44.64 $44.46 Suburban Class A $33.11 $32.78 $33.26 Share or view online at colliers.com/texas/houstonoffice

26 Vacancy & Availability Houston s citywide vacancy rate rose 1 basis points from 17.5% to 18.5% over the quarter, and rose 32 basis points from 15.3% in Q Over the quarter, the average suburban vacancy rate increased 7 basis points from 17.6% to 18.3%, and the average CBD vacancy rate increased 35 basis points from 15.6% to 19.1%. The average CBD Class A vacancy rate increased 43 basis points from 12.7% to 17.% over the quarter, primarily due to the delivery of 69 Main. The average CBD Class B vacancy rate increased 18 basis points from 24.6% to 26.4%. The average suburban Class A vacancy rate increased 8 basis points from 19.7% to 2.5%, and the average suburban Class B vacancy rate rose 5 basis points between quarters from 16.5% to 17.%. Of the 1,78 existing office buildings in our survey, 93 buildings have 1, SF or more of contiguous space available for lease or sublease. Further, 31 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 1.9 million SF or 4.7% of Houston s total office inventory, and 21.2% of the total available space. Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 2/16 2/17 HOUSTON 4.7% 5.9% TEXAS 4.4% 5.1% U.S. 5.2% 4.9% JOB GROWTH Annual Change # of Jobs Added HOUSTON.6% 19.3K TEXAS 1.8% 218.8K U.S. 1.7% 2.36M CBD vs. Suburban 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q1 214 Q2 214 Q3 214 CBD Suburban Houston Total Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 A OFFICE 25.% 2.% 15.% 1.% 5.% Large Sublease Availabilities (Total available in building and/or complex) BUILDING TENANT SUBMARKET SF One Shell Plaza Shell Oil CBD 81,99 Four WestLake Park BP Katy Freeway 59,52 Four Oaks Place BHP West Loop/Galleria 461,931 Two Allen Center Chevron CBD 311,85 Three Greenspoint Place ExxonMobil North Belt 253,562 Three WestLake Park Phillips 66 Katy Freeway 221,723 CityWestPlace 2 Statoil Westchase 211,774 Energy Center II WorleyParsons Katy Freeway 21,871 Northborough Tower Noble Energy North Belt 24,198 8 Greenspoint ExxonMobil North Belt 198,256 Two Westlake ConocoPhillips & BP Katy Freeway 191, Clay Rd AMEC Foster Wheeler Katy Freeway 189,285 Westway II GE Oil & Gas West Belt 186,957 Energy Center I Foster Wheeler Katy Freeway 182,966 Pinnacle Westchase Phillips 66 Westchase 16,356 West Memorial Place II IHI E&C Katy Freeway 158,317 Three Northborough FMC Technologies North Belt 151,372 Source: CoStar.% CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q1 217 Office Colliers International

27 Absorption & Demand Houston s office market posted 745,413 SF of negative net absorption in Q CBD Class A space recorded the largest loss, with 457,627 SF of negative net absorption, while Suburban Class A posted a gain with 334,148 SF of positive net absorption. Over the last two years, Houston s office market has suffered due to downsizing by large energy companies and some of these firms moving from thirdparty buildings into owned property, thus creating a glut of vacant sublease space. However, available sublease space has decreased over the last two quarters, indicating that Houston s office market might be at a turning point. Rental Rates Houston s average asking rental rates remained relatively flat over the quarter. The average Class A rental rate in both the CBD and Suburban submarkets decreased marginally over the quarter, as did the average Class B rental rates. The current average rental rate, which includes all property classes, for Houston office space is $29.59 per SF gross. Leasing Activity Houston s office leasing activity decreased 27.8% between quarters from 3. million SF to 2.2 million SF of transactions in Q Q1 217 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE 811 Louisiana CBD 127,734 Targa Resources Corporation Mar Enclave Katy Freeway 91,414 IHS Global, Inc 1,2,3 Feb Main CBD 54,215 Crestwood Partners 4 Feb Kuland Dr Gulf Freeway/Pasadena 42,627 IBM 3 Mar Main CBD 35,788 McKinsey & Company Feb-17 Park Ten Plaza Katy Freeway 28,88 RigNet Jan-17 Three Allen Center CBD 27,673 Castex Energy, Inc Mar Smith CBD 21,65 Legacy Holding Feb-17 Bank of America Center CBD 21,29 Arnold & Porter Kaye Sholer Mar-17 Loop Central One Bellaire 18,69 Easter Seals of Greater Houston 1 Mar-17 1 Colliers International transaction 2 Expansion 3 Renewal 4 Sublease Sales Activity Houston s office investment sales activity soared over the year, increasing by 14% since Q The average sales price increased from $183 to $199 per square foot. Q4 216 CHANGE IN SALES (YEAR OVER YEAR) Q4 216 OFFICE SALES PRICE PER SF 25.% 2.% 15.% 1.% 5.%.% -5.% -1.% Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17 $3 $25 $2 $15 $1 $5 $ Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1 '17 Sources: CoStar and Real Capital Analytics 3 Houston Research & Forecast Report Q1 217 Office Colliers International

28 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q1-217 Q4-216 Q1-217 Q4-216 CBD A 34 32,513,497 4,773, % 74, % 5,514, % 12.7% -457,627 47,953 $44.46 B 32 1,496,468 2,691, % 76,949.7% 2,768, % 24.6% -182,5-5,964 $3.42 C ,797 99, %.% 99, % 1.5% -2,491 4,574 $19.45 Total 81 43,931,762 7,565, % 817, % 8,382,5 19.1% 15.6% -642,618 46,563 $39.14 SUBURBAN A ,597,717 16,39,34 17.% 3,389, % 19,78, % 19.7% 324,148-52,56 $33.26 B ,841,764 12,812, % 593,89.8% 13,46, % 16.5% -423,37-158,91 $2.6 C 37 12,995,82 1,322, % 5,982.% 1,328,73 1.2% 9.5% -3,96-34,65 $16.62 Total ,434,563 3,525, % 3,989, % 34,515, % 17.6% -12, ,212 $27.22 OVERALL A ,111,214 21,164, % 4,13,49 3.2% 25,294, % 18.1% -133, ,13 $35.79 B ,338,232 15,54, % 67,758.8% 16,175, % 17.7% -65, ,55 $22.3 C ,916,879 1,422,35 1.2% 5,982.% 1,428,17 1.3% 1.2% -6,397-29,491 $16.82 Total ,366,325 38,9,6 16.4% 4,87, % 42,897, % 17.5% -745, ,649 $29.59 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q1-217 Q4-216 Q1-217 Q4-216 A 7 2,13, , % 25, % 454, % 21.6% 5,699 13,997 $34.6 B 34 2,72, , % 2,562.1% 286, % 9.2% -35,531-29,353 $29.22 C ,39 86, % -.% 86, % 19.5% -1,51-19,391 $26.23 Total 56 5,287, , % 27,76.5% 827, % 13.7% -31,342-34,747 $31.5 BAYTOWN B 3 186,5 4, %.% 4, % 2.7% $21.45 C 3 81,481.%.%.%.% $. Total 6 267,486 4, %.% 4, % 1.9% $21.45 BELLAIRE A 6 1,91, ,2 12.5% 11,132 % 147, % 13.2% -3,236 6,479 $26.5 B 2 2,519, , %.% 147, % 6.2% 8,124 12,518 $24.7 C 5 318,58 43, %.% 43, % 11.9% -5,88 2,649 $16.83 Total 31 3,929, , % 11,132.3% 338,6 8.6% 9.7% ,646 $24.11 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 33,925 8, %.% 8, % 7.3% 15,198-13,81 $18.42 C 7 277,66 9,28 3.3%.% 9,28 3.3% 6.2% 8,49-2,916 $7.5 Total ,585 17, %.% 17, % 3.6% 23,247-16,717 $12.89 E. FORT BEND/SUGAR LAND A 17 3,399, ,53 6.8% 83,77 2.5% 315,3 9.3% 9.3% 1,851-17,646 $31.34 B 39 2,434, , % 18,556.8% 296, % 12.4% 5, $22.11 C 5 146,524 39, %.% 39, % 26.9% $. Total 61 5,98,87 548, % 12, % 651, % 1.1% 7,697-18,77 $ Houston Research & Forecast Report Q1 217 Office Colliers International

29 Houston Suburban Office Market Summary - Continued DIRECT Q1-217 Q4-216 Q1-217 Q4-216 FM 196 A 12 2,913, , % 11,759.4% 38,45 1.6% 1.9% 7, $27.8 B 72 4,255,72 815, % 73, % 889, % 19.7% -52,18 16,314 $16.72 C ,914 68,54 9.5%.% 68,54 9.5% 1.2% 5,1-4,144 $13.33 Total 15 7,882,845 1,18, % 85, % 1,265, % 15.6% -39,217 11,736 $19.31 GREENWAY A 2 7,267,315 1,67, % 11,991.2% 1,79, % 15.1% 14,364 73,829 $36.94 B 31 3,194,39 292, % 21,14.7% 313, % 8.6% -38,114 4,668 $26.48 C ,718 83, %.% 83, % 14.2% -7,42 2,887 $22.15 Total 67 1,994,342 1,443, % 33,131.3% 1,476, % 14.2% -31,17 117,384 $33.97 GULF FREEWAY/PASADENA A 1 22,76.%.%.% 13.7% 3,122 $. B 39 2,26,49 22,98 9.8%.% 22,98 9.8% 1.7% 21,772 25,1 $21.55 C 29 1,19,47 69, %.% 69, % 6.4% 1,22-6,15 $17.52 Total 69 3,392,666 29, %.% 29, % 12.% 25,916 18,851 $2.58 I-1 EAST B 6 397,71 147, %.% 147, % 35.3% -6,972 $15.35 C 5 267,13 83, %.% 83, % 33.% 4,883 4, $2.78 Total ,831 23, %.% 23, % 32.% -2,89 4, $17.31 KATY FREEWAY A 87 22,312,368 3,224, % 1,577, % 4,795, % 21.7% 227,17-448,25 $37.42 B 11 9,664,744 1,98, % 51,86.5% 2,32,57 2% 18.8% -211,442 74,647 $23.22 C 32 1,542,378 54, % 5,982.4% 6, % 3.7% -3, $18.52 Total 22 33,519,49 5,259, % 1,635, % 6,888, % 18.9% 12, ,444 $31.88 KATY/GRAND PARKWAY WEST A 14 1,254, , %.% 315, % 25.4% 3,479-3,451 $27.26 B ,368 32, %.% 32, % 2.6% 16,566 4,26 $26.46 C 3 19, %.% % 5.% 713 3,21 $25.92 Total 3 2,49,42 348, %.% 348, % 17.4% 2,758 3,965 $27.18 KINGWOOD/HUMBLE B 21 1,4,7 64, % 8,73.6% 73, % 5.7% 1,235 6,465 $23.22 C 5 168,3 24,8 14.7%.% 24,8 14.7% 14.7% -2,8 $15.47 Total 26 1,569, 89, % 8,73.6% 98, % 7.% 1,235 3,665 $28 NASA/CLEAR LAKE A 12 1,77,973 19, % 5, % 159,786 9.% 9.% $24.7 B 48 3,255, , %.% 991, % 29.% -47,656-6,194 $17.69 C 2 658,973 93, %.% 93, % 14.1% ,441 $15.6 Total 8 5,685,658 1,194,228 2% 5,643.9% 1,244, % 19.2% -48,53-57,492 $18.7 NORTH BELT/GREENSPOINT A 24 5,451,944 2,393, % 447,3 8.2% 2,84, % 54.% 15,366-58,134 $24. B 51 5,326,13 1,631, % 179, % 1,811,66 34.% 33.4% -33,161-14,499 $16.88 C 22 1,344, ,462 2.%.% 268,462 2.% 19.2% -1,9 3,828 $14.13 Total 97 12,122,712 4,293, % 626,85 5.2% 4,92,4 4.6% 32.7% 61,35-158,85 $2.68 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7.%.%.%.% $. B 5 25,618 66, %.% 66, % 3.4% -3,889 $23.28 C 2 56,562 8, %.% 8, % 14.9% 1,178 $15. Total 9 817,88 74, %.% 74, % 9.3% -3,889 1,178 $ Houston Research & Forecast Report Q1 217 Office Colliers International

30 Houston Suburban Office Market Summary - Continued DIRECT Q1-217 Q4-216 Q1-217 Q4-216 NORTHWEST AND NORTHWEST OUTLIER A 1 2,223,66 689,221 3% 21,27 % 71, % 3.5% -31,317-17,748 $22.68 B 77 5,941,82 957, % 3,827.1% 961, % 15.9% -16,816-82,391 $19.8 C 33 1,33,28 65, %.% 65, % 5.1% ,675 $14.7 Total 12 9,467,356 1,712, % 25,34.3% 1,737, % 17.7% -47,47-128,814 $2.34 RICHMOND/FOUNTAINVIEW B 13 78,187 26, %.% 26, % 25.% -11,869-3,648 $17.24 C ,445 63, %.% 63, % 13.4% 1, $17.49 Total 25 1,266,632 27, %.% 27, % 19.2% -1,555-4,14 $17.3 SAN FELIPE/VOSS A 3 1,72, , % 1,.1% 415, % 25.4% 21,344-7,764 $36.32 B 31 3,25, , % 5,119.2% 451, % 13.3% -24,333-72,513 $24.22 Total 34 4,926,52 86, % 6,119.1% 866, % 15.6% -2,989-8,277 $3.5 SOUTH A 1 76,48 1, %.% 1, % 13.2% $32.42 B ,251 29, %.% 29, % 5.5% -4,148 1,582 $23.29 C 5 194,42 49,2 25.4%.% 49,2 25.4% 26.4% 2,63 1,671 $15.1 Total ,341 88, %.% 88, % 12.2% -2,85 3,253 $19.73 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% $. B ,112 81, % 85.1% 82, % 1.% -6,124 19,67 $19.4 C 8 428,964 27,87 6.5%.% 27,87 6.5% 6.4% $19.49 Total 21 1,68,76 19, % 85.1% 11,55 6.6% 7.5% -6,724 19,862 $19.42 SOUTHEAST B 17 1,563,9 45, %.% 45, % 3.% 587 6,753 $14.54 C 3 142,419.%.%.%.% 4,992 $. Total 2 1,75,428 45, %.% 45, % 11.7% ,745 $14.54 SOUTHWEST A 6 1,576,91 178, %.% 178, % 11.7% 5,616 4,95 $18.46 B 65 6,221,242 1,55, % 36,654.6% 1,92, % 16.5% -66,376 2,771 $16.92 C 38 1,924, ,3 5.8%.% 112,3 5.8% 6.2% 6,399 11,26 $14.62 Total 19 9,722,679 1,346, % 36,654.4% 1,382, % 14.1% -54,361 18,72 $16.93 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 1 83,22 23, % 1, % 24,33 29.% 29.4% 3,6-9,5 $24.58 C 1 21,396.%.%.%.% $. Total 13 1,1, , % 1,136 % 26,4 25.7% 25.2% 3,6-9,5 $22.64 WEST BELT A 28 3,584,19 697, % 188, % 886, % 23.5% -43,19 11,319 $29.81 B 32 1,885,983 32, % 12,85 5.5% 45, % 2.6% -17,172 38,33 $2.72 C 3 87,629.%.%.%.% $. Total 63 5,557,721 1,, % 291,52 5.2% 1,292, % 23.1% -6,191 49,352 $27.6 WEST LOOP/GALLERIA A 48 17,798,98 3,238, % 253, % 3,492, % 18.% 23,32-85,562 $37.22 B 53 6,161, , % 17,933.3% 711, % 11.8% 15,33-7,279 $27.57 C 4 216,268 4, %.% 4, % 5.1% 6,849-6,74 $2. Total 15 24,176,354 3,936, % 271, % 4,28,3 17.4% 15.9% 44,914-99,581 $ Houston Research & Forecast Report Q1 217 Office Colliers International

31 PENNZOIL PLACE BUILDING NAME 717 TEXAS 6 TRAVIS BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN BG GROUP PLACE 2 HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER ADDRESS 717 Texas Avenue 6 Travis Street 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 1,656,529 / 22,575 / 75 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / 46 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / 27 % LEASED 1% 93.% 88.9% 69.5% 8.1% 28.9% 97.7% 38.1% 93.% 55.1% 95.6% 91.2% 91.1% AVAILABLE SF 373, ,47 215,43 348,75 124, , , , , ,625 73, ,78 178,252 MAX CONTIGUOUS SF 355,847 33,526 3,124 14,414 81,79 188, , , ,51 28,181 24,31 51,86 115,27 PARKING RATIO OWNER Hines Texas Tower Ltd M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Wells Real Estate Funds Holdings Inc. Holdings Inc BUILDING NAME 11 FANNIN ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER ADDRESS 11 Fannin Street 121 Main Street 1111 Main Street 1 Main Street 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 68,66 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / ,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 % LEASED 98.8% 82.5% 95.7% 98.3% 1% 87.3% 98.6% 99.2% 97.7% 88.2% 73.2% 95.2% 93.5% AVAILABLE SF 87,93 13,559 6,892 43,63 268,848 74,737 95,332 24, , ,47 279,24 153,768 MAX CONTIGUOUS SF 28,65 3,414 7,771 28, ,372 2,89 23,537 24,723 56, , ,244 28,35 PARKING RATIO OWNER JMB Realty Corporation Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Real Estate Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q1-217 Q4-216 Q1-217 Q4-216 A 33 9,817,89 1,716, % 666, % 2,383, % 23.3% -1,115-39,534 $36.13 B 62 7,478,569 1,341, % 14,397.2% 1,355, % 18.2% 2,64-69,14 $19.86 C 5 213,32 25, %.% 25, % 13.% 2,195-2,315 $16.48 Total 1 17,58,96 3,83, % 68, % 3,764, % 2.4% -95,28-11,863 $28.89 THE WOODLANDS A 39 1,926,59 1,222, % 39,842.4% 1,262, % 12.3% 83,394 49,487 $36.8 B 7 4,427,1 453, % 45,98 % 499, % 1.4% -37,17 46,57 $24.54 C 5 131,696 4, %.% 4, % 21.1% -12, $24.6 Total ,485,386 1,716, % 85,822.6% 1,82, % 12.3% 33,426 96,5 $33.27 Office Development Pipeline Houston s construction pipeline for office space contains 1.6 million SF of which 42% is pre-leased. Build-to-suit projects make up 43% of the pipeline, and the remaining 918,4 SF is spec office space under construction which is approximately 1% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY CityPlace 2 - BTS for ABS 171 City Plaza Dr The Woodlands 326,8 94% Barker Patrinely Group, Inc Oct-18 Kirby Collection 32 Kirby Dr Greenway Plaza 188,545 % Thor Properties LLC Aug-17 Lockton Place 3657 Briarpark Dr Westchase 187,11 78% Triten Real Estate Partners Oct-17 One Grand Crossing SWC of Grand Parkway & I-1 Katy/Grand Parkway W 171,538 % Trammell Crow Company Mar-18 The Post Oak 16 West Loop S West Loop/Galleria 14,579 6% Tellepsen Builders Dec-17 Skylines Now Available Online at colliers.com/texas/houstonskylines At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS DECEMBER 216 AVAILABLE* * Under Construction Delivers 1/217 QUOTED ** QUOTED ** $ $38.99 $33.84-$35.34 $46.66 $37.1-$44.6 $52.27 $ $42.29 $47.95-$5.95 $44.94 $51.78 $54.-$58. $44.94 $51.41-$54.41 $39.11-$41.11 $44.14 $46.18 $44.46 $4.16 $45.23 $45.65 $46.79-$5.79 $45.1 At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. 7 Houston Research & Forecast Report Q1 217 Office Colliers International

32 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) Heritage Plaza 1111 Bagby St CBD 1,212, % 66,683 $56 Bop Heritage Llc Bank of America 7 Louisiana St CBD 1,268, % 171,16 $5.7 M-M Properties BG Group Place 811 Main CBD 972, % 223,4 $52.41 BG Holdco LLC CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 1,736 $5.4 LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 132,419 $46.31 Invesco Real Estate 39 Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 3,75 $45.48 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 1,331 $46.49 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 29,564 $44.63 TIER REIT, Inc. 21 Waterway 21 Waterway Ave The Woodlands 14, % 13,315 $47.43 The Woodlands Development Company, L.P. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 9,355 $49.25 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property OWNER Q1 217 Highlights FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

33 Research & Forecast Report HOUSTON OFFICE Q4 216 After several years of economic woes, Houston s office market coasts into 217 Lisa Bridges Director of Market Research Houston After several challenging years, Houston s office market saw some improvement over the quarter. The market will most likely remain relatively flat, coasting through 217. The citywide vacancy rate increased by only 4 basis points between quarters, and absorption, although negative, was only a third of the previous quarter s total. Q4 216 witnessed several energy companies remove available sublease space as they began to shift out of the contraction mode and begin looking forward again. Although leasing activity remains lower than normal, deals are getting done and some of those even include pre-leasing of proposed developments. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Annual Change Quarterly Change Quarterly Forecast* Houston s office market posted.1m SF of negative net absorption during the fourth quarter, an improvement from the.3m SF of negative net absorption posted in the previous quarter. Houston s city-wide office vacancy rate rose significantly on an annual basis, increasing by 22 basis points from 15.3% to 17.5% in Q As stated earlier, the vacancy rate rose by only 4 basis points over the quarter, much less than in previous quarterly comparisons during 215 and 216. No new buildings delivered during Q4 however, 1.8M SF of the 3.1M SF in the construction pipeline is scheduled to deliver in Q There have been several recent press announcements of tenants pre-leasing space in proposed buildings, indicating a preference for newer innovative space. Although this would appear to add vacant space to an already saturated market, it is a very small percentage overall. According to the U.S. Bureau of Labor Statistics, the Houston metropolitan area created 13,4 jobs (not seasonally adjusted) between October 215 and October 216. Most of the job growth occurred in government, retail trade, education and healthcare, trade, transportation and utilities, and professional services. Summary Statistics Houston Office Market Q4 215 Q3 216 Q4 216 Vacancy Rate 15.3% 17.1% 17.5% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year 11.3% 16.3% % 19.1% 13.4% 19.7% Houston Class A $34.71 $35.83 $35.35 CBD Class A $46.13 $45.5 $44.64 Suburban Class A $32.8 $33.58 $32.78 Share or view online at colliers.com/texas/houstonoffice

34 Vacancy & Availability Houston s citywide vacancy rate rose 4 basis points from 17.1% to 17.5% over the quarter, and rose 22 basis points from 15.3% in Q Over the quarter, the average suburban vacancy rate increased 4 basis points from 17.2% to 17.6%, and the average CBD vacancy rate was unchanged at 16.8%. The average CBD Class A vacancy rate decreased 1 basis points from 13.5% to 13.4% over the quarter, while the average CBD Class B vacancy rate remained the same at 26.9%. The average suburban Class A vacancy rate increased 6 basis points from 19.1% to 19.7%, and the average suburban Class B vacancy rate rose 2 basis points between quarters from 16.3% to 16.5%. Of the 1,78 existing office buildings in our survey, 92 buildings have 1, SF or more of contiguous space available for lease or sublease. Further, 29 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 11.8 million SF or 5.1% of Houston s total office inventory, and 22.1% of total available space. Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 1/15 1/16 HOUSTON 4.8% 4.9% TEXAS 4.4% 4.2% U.S. 4.8% 4.4% JOB GROWTH Annual Change # of Jobs Added HOUSTON.4% 13.4K TEXAS 1.8% 212.6K U.S. 1.6% 2.3M Available Sublease Space CBD vs. Suburban 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q1 214 Q2 214 Q3 214 CBD Suburban Houston Total Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 A OFFICE 2.% 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.% Large Sublease Availabilities (Total available in building and/or complex) BUILDING TENANT SUBMARKET SF One Shell Plaza Shell Oil CBD 81,99 Four WestLake Park BP Katy Freeway 559,94 Four Oaks Place BHP West Loop/Galleria 475,7 717 Texas Freeport-McMoRan CBD 355,847 Energy Center II WorleyParsons Katy Freeway 257,659 Three Greenspoint Place ExxonMobil North Belt 253,562 Three WestLake Park Phillips 66 Katy Freeway 242,52 Two Westlake ConocoPhillips & BP Katy Freeway 23,845 Northborough Tower Noble Energy North Belt 24,198 8 Greenspoint ExxonMobil North Belt 198,256 BG Group Place BG Group CBD 194,243 CityWestPlace 2 Statoil Westchase 19, Clay Rd AMEC Foster Wheeler Katy Freeway 189,285 Westway II GE Oil & Gas West Belt 186,957 Energy Center I Foster Wheeler Katy Freeway 182,966.% CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. Source: CoStar CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q4 216 Office Colliers International

35 Absorption & Demand Houston s office market posted 142,249 SF of negative net absorption in Q4 216, pushing the year-end 216 total to negative 363,539 SF. Suburban Class B space recorded the largest loss, with 134,8 SF of negative net absorption, while Suburban Class A posted a gain with 31,374 SF of positive net absorption. Over the last two years, Houston s office market has suffered due to large energy companies downsizing and moving from third-party owned buildings into owned property, thus creating a glut of unoccupied and available sublease space. During the fourth quarter, available sublease space decreased for the first time since Q Rental Rates The significant increases in vacancy rates in Houston s office market have led to decreases in average asking rental rates. Although most average rental rates dropped slightly or remained relatively flat over the quarter, we witnessed several landlords with large blocks of space reduce rental rates by $2. to $6. per square foot. The average Class A rental rate in both the CBD and Suburban submarkets decreased over the quarter, while the average Class B rental rate increased slightly. Leasing Activity Houston s office leasing activity decreased 38.1% between quarters, recording only 2.1 million SF of transactions in Q Quarterly leasing activity has decreased by 53.3% in just one year when compared to the 4.5 million SF recorded in Q Q4 216 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE Springwoods Village The Woodlands 378, HP Inc 2 Dec-16 Heritage Plaza CBD 19,476 Breitburn Energy 4 Nov-16 The Sugar Creek on the Lake E Fort Bend/Sugar Land 62,457 ABM Industries Inc Oct-16 BG Group Place CBD 6,655 Thompson & Knight LLP 4 Nov-16 2 Houston Center CBD 46,84 Diamond McCarthy LLP 5 Dec-16 Sierra Pines II The Woodlands 27,25 Jones & Carter Nov-16 Energy Tower IV Katy Freeway 26,417 Middleton Raines + Zapata LLP Oct-16 Transworld Financial Center Northwest Far 25,889 Luby s, Inc 3 Nov-16 1 Colliers International transaction 2 Pre-lease in proposed or building under construction 3 Renewal 4 Sublease 5 Contraction Sales Activity Houston s office investment sales activity picked up slightly over the past year, increasing by 4% since Q The average sales price decreased from $227 to $21 per square foot. Q4 216 CHANGE IN SALES (YEAR OVER YEAR) 25% 2% 15% 1% 5% % -5% -1% Q4 216 OFFICE SALES PRICE PER SF Sources: CoStar and Real Capital Analytics 3 Houston Research & Forecast Report Q4 216 Office Colliers International

36 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q4-216 Q3-216 Q4-216 Q3-216 CBD A 34 31,571,839 3,277, % 952,244 3.% 4,229, % 13.5% 31, ,324 $44.64 B 32 1,496,468 2,597, % 229, % 2,826, % 26.9% -5,964 9,12 $3.17 C , , %.% 186, % 2.8% 4,574 6,357 $27 Total 81 42,99,14 6,61, % 1,181, % 7,243, % 16.8% 29, ,865 $41.42 SUBURBAN A ,721,265 16,322, % 2,488, % 18,81, % 19.1% -19,78 629,788 $32.78 B 95 79,79,218 12,25, % 772,15 % 13,22, % 16.3% -134,8-562,42 $2.58 C 36 13,112,952 1,237,73 9.4% 3,467.% 1,24,54 9.5% 9.8% -17,725-8,564 $15.81 Total ,913,435 29,89, % 3,263, % 33,73, % 17.2% -172,233 59,182 $27.62 OVERALL A ,293,14 19,599, % 3,44, % 23,39, % 17.7% 11, ,464 $35.35 B ,575,686 14,848, % 1,1, % 15,849, % 17.5% -14, ,94 $22.12 C ,34,749 1,423, % 3,467.% 1,427, % 1.5% -13,151-2,27 $16.51 Total ,93,539 35,871, % 4,445, % 4,316, % 17.1% -142, ,683 $28.66 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q4-216 Q3-216 Q4-216 Q3-216 A 7 2,13, ,97 2.4% 25, % 46, % 22.3% 13,997 16,438 $34.72 B 34 2,72, ,588 9.% 6,69.2% 25, % 8.1% -29,353-2,364 $3.57 C ,17 31, % -.% 31, % 4.2% -13,934 6,788 $23.14 Total 55 5,277, , % 31,267.6% 742, % 13.7% -29,29 2,862 $32.91 BAYTOWN B 3 186,5 4, %.% 4, % 2.7% 589 $21.45 C 3 81,481.%.%.%.% $7.95 Total 6 267,486 4, %.% 4, % 1.9% 589 $21.45 BELLAIRE A 6 1,91, , % 8,532.8% 143, % 13.8% 6,479-56,94 $26.52 B 2 2,749,31 188,21 6.8% 7,727.3% 195, % 7.6% 12,518-26,581 $24.81 C 5 327,2 37, %.% 37, % 12.4% 2,649-5,563 $16.92 Total 31 4,167, ,43 8.7% 16,259.4% 377, % 9.7% 21,646-88,238 $24.62 CONROE AND OUTLYING MONTGOMERY CO A 1.%.%.%.% $. B 9 326,764 23, %.% 23, % 3.1% -13,81-1,722 $17.95 C 7 289,662 17,77 5.9%.% 17,77 5.9% 4.9% -2,916-2,447 $11.63 Total ,426 41,7 6.7%.% 41,7 6.7% 3.6% -16,717-4,169 $15.32 E. FORT BEND/SUGAR LAND A 17 3,399, , % 58, % 317, % 8.8% -17,646-39,58 $3.53 B 39 2,47, ,99 1.5% 18,33.7% 277, % 11.2% ,323 $22.28 C 5 146,524 39, %.% 39, % 26.9% -39,464 $. Total 61 6,16, , % 77, % 633,98 1.5% 1.1% -18,77-72,721 $ Houston Research & Forecast Report Q4 216 Office Colliers International

37 Houston Suburban Office Market Summary - Continued DIRECT Q4-216 Q3-216 Q4-216 Q3-216 FM 196 A 12 2,913,211 3, % 15,553.5% 316, % 1.8% ,927 $27.88 B 72 4,255, , % 69, % 834, % 2.% 16,214 1,178 $17.16 C 2 664,853 65, % 973.1% 66,724 1.% 9.4% -4,144 2,751 $14.36 Total 14 7,833,319 1,131, % 85, % 1,217, % 15.6% 11,636 32,856 $19.85 GREENWAY A 2 7,267,315 1,79, % 13,912.2% 1,93, % 16.1% 73,829 94,724 $36.95 B 31 3,194,39 266, % 9,339.3% 275,45 8.6% 9.9% 4,668-31,52 $26.67 C ,718 75, %.% 75, % 14.8% 2,887-2,646 $22.23 Total 67 1,994,342 1,421, % 23,251.2% 1,445, % 14.2% 117,384 6,576 $34.24 GULF FREEWAY/PASADENA A 1 22,76 3, %.% 3, % 13.7% $3.59 B 4 2,284,432 24,84 1.5% 2,668.1% 242, % 11.7% 25,1 15,176 $2.97 C 29 1,42,96 7, %.% 7, % 6.2% -6, $17.81 Total 7 3,349, ,9 9.4% 2,668.1% 316, % 12.% 18,851 15,638 $2.35 I-1 EAST B 8 467,91 14,416 3.%.% 14,416 3.% 3.7% 3,4-12,344 $15.4 C 5 267,13 83, %.% 83, % 33.% 4,883 4, $2.78 Total ,31 223, %.% 223, % 32.% 8,283-8,344 $17.4 KATY FREEWAY A 86 22,65,52 3,326, % 923, % 4,25, % 19.6% 85,123-96,72 $37.87 B 11 9,675,774 1,676, % 152, % 1,829, % 19.6% 66,444-88,59 $23.75 C 33 1,559,285 54, % 2,494.2% 57, % 3.6% ,221 $18.54 Total 22 33,3,561 5,58, % 1,78, % 6,137, % 18.9% 15, ,45 $32.98 KATY/GRAND PARKWAY WEST A 14 1,254, , %.% 318, % 25.1% -3,451 58,958 $27.87 B ,316 24, %.% 24, % 3.% 4,26 1,775 $25.79 C 3 19,54 1,1 5.%.% 1,1 5.% 2.2% 3,21 $23.44 Total 29 2,384, , %.% 343, % 17.4% 3,965 6,733 $27.71 KINGWOOD/HUMBLE B 2 1,3,7 65,116 5.% 8,73.7% 73, % 6.2% 6,465 1,133 $22.23 C 5 168,3 24,8 14.7%.% 24,8 14.7% 13.1% -2,8 $16.37 Total 25 1,469, 89, % 8,73.6% 98, % 7.% 3,665 1,133 $2.61 NASA/CLEAR LAKE A 12 1,77,973 14, % 35,725 2.% 175, % 9.9% ,38 $24.9 B 48 3,255,36 934, % 4,.1% 938, % 27.1% -54,364-58,779 $17.89 C 2 66,49 92, %.% 92, % 14.6% 3,441 8,741 $15.86 Total 8 5,686,742 1,167, % 39,725.7% 1,27, % 19.2% -51,662-62,418 $18.47 NORTH BELT/GREENSPOINT A 23 5,258,46 2,486, % 255, % 2,741, % 5% -58,134 35,87 $25.15 B 52 5,322,25 1,423, % 245, % 1,669, % 29.9% -78,968 36,938 $17.59 C 22 1,344, , %.% 257, % 19.4% 3,828 8,345 $14.9 Total 97 11,925,96 4,167, % 5, % 4,668, % 32.7% -133,274 8,37 $21.88 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7.%.%.%.% $. B 5 29,618 66, %.% 66, % 31.7% -8,653 $22.97 C 2 56,562 8, %.% 8, % 17.% 1, $15. Total 9 821,88 74, %.% 74, % 9.3% 1,178-8,45 $ Houston Research & Forecast Report Q4 216 Office Colliers International

38 Houston Suburban Office Market Summary - Continued DIRECT Q4-216 Q3-216 Q4-216 Q3-216 NORTHWEST AND NORTHWEST OUTLIER A 1 2,223,66 662, % 43,18 1.9% 75, % 3.9% -17,748 6,81 $22.81 B 78 5,99,78 983, % 1,536.2% 994, % 15.4% -81,991 49,985 $19.58 C 33 1,33,28 66, %.% 66, % 2.9% -28, $13.22 Total 121 9,436,54 1,712, % 53,716.6% 1,766, % 17.7% -128,414 55,978 $2.58 RICHMOND/FOUNTAINVIEW B , , %.% 194, % 24.4% -3,648-9,671 $16.76 C ,591 55, %.% 55, % 1% ,325 $15.65 Total 25 1,279,168 25, %.% 25, % 19.2% -4,14-3,346 $16.52 SAN FELIPE/VOSS A 3 1,72, ,24 24.% 6,816.4% 42, % 24.% -7,764 27,864 $36. B 31 3,25, , % 3,457.1% 427, % 11.1% -72,513-51,994 $24.55 Total 34 4,926,52 836, % 1,273.2% 847, % 15.6% -8,277-24,13 $3.2 SOUTH A 1 8, 1, %.% 1, % 12.5% -548 $26.31 B ,159 25,4 5.5%.% 25,4 5.5% 5.8% 1,582 8,778 $23.87 C 5 194,42 51, %.% 51, % 27.3% 1, $15.1 Total ,21 86, %.% 86, % 12.2% 3,253 8,96 $18.97 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% $. B ,112 75, % 85.1% 76,511 1.% 12.5% 19,67 25,193 $19.62 C 8 428,964 27,27 6.4%.% 27,27 6.4% 6.5% 795 3,99 $2.2 Total 21 1,68,76 12, % 85.1% 13, % 7.5% 19,862 28,292 $19.73 SOUTHEAST B 17 1,563,9 187, %.% 187, % 12.4% 6,753-6,469 $17.29 C 3 142,419.%.%.% 3.5% 4,992-4,992 $. Total 2 1,75, ,424 1%.% 187,424 1% 11.7% 11,745-11,461 $17.29 SOUTHWEST A 6 1,576,91 183, %.% 183, % 11.9% 4,95 4,988 $18.5 B 66 6,266,65 1,5, % 31,594.5% 1,81, % 17.3% 2,771 1,683 $17.2 C 38 1,924, , %.% 118, % 6.7% 11,26 13,255 $14.25 Total 11 9,767,52 1,352, % 31,594.3% 1,384, % 14.1% 18,72 55,926 $17.12 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 1 83,22 233, % 1, % 243, % 28.2% -9,5-15,739 $24.2 C 1 21,396.%.%.%.% $. Total 13 1,1, , % 1,136 % 263, % 25.2% -9,5-15,739 $22.32 WEST BELT A 28 3,584,19 714, % 149, % 864, % 23.9% -9,655-17,854 $3.45 B 32 1,885,695 36, % 9, % 396,723 2% 22.9% 34,466-5,477 $2.31 C 3 87,629.%.%.%.% $. Total 63 5,557,433 1,21, % 239,97 4.3% 1,261, % 23.1% 24, ,331 $27.41 WEST LOOP/GALLERIA A 47 17,418,98 2,933, % 236, % 3,17, % 17.6% -97,613-58,329 $37.68 B 53 6,161,178 75, % 2,846.3% 726, % 11.7% -7,279 47,66 $26.88 C 4 216,268 11,61 5.1%.% 11,61 5.1% 2.% -6,74-2,258 $2. Total 14 23,796,354 3,65, % 256, % 3,97, % 15.9% -111,632-13,521 $ Houston Research & Forecast Report Q4 216 Office Colliers International

39 Under Construction Delivers 1/ PENNZOIL PLACE BUILDING NAME 717 TEXAS 6 TRAVIS BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN BG GROUP PLACE 2 HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER ADDRESS 717 Texas Avenue 6 Travis Street 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 1,656,529 / 22,575 / 75 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / 46 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / 27 % LEASED 1% 93.% 88.9% 69.5% 8.1% 28.9% 97.7% 38.1% 93.% 55.1% 95.6% 91.2% 91.1% AVAILABLE SF 373, ,47 215,43 348,75 124, , , , , ,625 73, ,78 178,252 MAX CONTIGUOUS SF 355,847 33,526 3,124 14,414 81,79 188, , , ,51 28,181 24,31 51,86 115,27 QUOTED ** $38.99 $46.66 $37.1-$44.6 $44.6 $42.29 $44.94 $54.-$58. $51.41-$54.41 $44.14 $44.46 $45.23 $46.79-$5.79 PARKING RATIO OWNER Hines Texas Tower Ltd M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Wells Real Estate Funds Holdings Inc. Holdings Inc BUILDING NAME 11 FANNIN ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER ADDRESS 11 Fannin Street 121 Main Street 1111 Main Street 1 Main Street 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 68,66 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / ,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 % LEASED 98.8% 82.5% 95.7% 98.3% 1% 87.3% 98.6% 99.2% 97.7% 88.2% 73.2% 95.2% 93.5% AVAILABLE SF 87,93 13,559 6,892 43,63 268,848 74,737 95,332 24, , ,47 279,24 153,768 MAX CONTIGUOUS SF 28,65 3,414 7,771 28, ,372 2,89 23,537 24,723 56, , ,244 28,35 QUOTED ** $44.54 $33.84-$35.34 $52.27 $47.95-$5.95 $51.78 $44.94 $39.11-$41.11 $46.18 $4.16 $45.65 $45.1 PARKING RATIO OWNER JMB Realty Corporation Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Real Estate Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF QUOTED ** PARKING RATIO OWNER 2,5, 2,, 1,5, 1,, 5, HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 94.3% 1% 74.4% ,411 35,98 135,568 $37.74 $27.98-$ H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties Class A Class B Available Sublease Space Q4 216 Class A: 2,96,76 SF or 6.4% Class B: 367,818 SF or 3.5% *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. 16 SMITH 16 Smith Street 1,98,399 / 23, / % 341,772 28,593 $38.43 Brookfield Office Properties, Inc. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp. $46. $48. $42. $44. $38. $4. $34. $36. $3. $32. $26. $28. $22. $24. *Vacancy percentage includes direct and sublease space CBD Class A Rents CBD Class A Vacancy % 17.% 15.% 13.% 1% 9.% 7.% 5.% Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q4-216 Q3-216 Q4-216 Q3-216 A 33 9,817,89 1,593, % 676, % 2,27, % 22.7% -39, ,54 $36.9 B 62 7,477,832 1,341, % 17,392.2% 1,358, % 17.2% -69,14-491,434 $2.2 C 5 213,32 27, %.% 27, % 11.9% -2,315 $17.47 Total 1 17,58,223 2,962, % 693,587 4.% 3,656,41 2.9% 2.4% -11, ,62 $28.64 THE WOODLANDS 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 1,723,233 1% 12,655.7% 1,825, % 12.3% 16,5 17,831 $33.55 Office Development Pipeline Houston s construction pipeline for office space contains 3.1 million SF of which 44.8% is pre-leased. Build-to-suit projects make up 24.5% of the pipeline, and the remaining 2.3M SF is spec office space under construction which is approximately 28.5% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY 69 Main at Texas 69 Main St CBD 1,56, % Hines Jan-17 Future Amegy Bank HQ 1717 W Loop Fwy S Post Oak Park 38, 9.2% Hines Feb-17 Memorial City 11 Katy Fwy Katy Freeway East 238, % MetroNational Corporation. Feb-17 Kirby Collection 32 Kirby Dr Greenway Plaza 212, % Thor Equities Aug-17 Lockton Place 3657 Briarpark Dr Westchase 186, 1% Triten Real Estate Partners Oct-17 Bldg. 1 Highway 99 Katy/Grand Parkway W 171,538.% Trammell Crow Company Aug-17 The Post Oak 16 West Loop S Galleria/Uptown 14,579.% Tellepsen Builders Dec-17 Insperity Centre Loop 494 Kingwood/Humble 1, 1% Insperity Jan-17 Skylines Now Available Online at colliers.com/texas/houstonskylines A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS DECEMBER 216 AVAILABLE* * 75 A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS DECEMBER 216 AVAILABLE* * Available Sublease Space Central Business District Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. 7 Houston Research & Forecast Report Q4 216 Office Colliers International

40 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA Q4 216 Highlights YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) Heritage Plaza 1111 Bagby St CBD 1,212, % 74,737 $51.78 Bop Heritage Llc 5 Houston Center 141 McKinney St CBD 58, % 178,253 $ Wells Real Estate Funds 5.79 BG Group Place 811 Main CBD 972, % 277,615 $56.91 BG Holdco LLC CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 9,361 $45.51 LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 171,635 $46.5- Invesco Real Estate $ Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 39,764 $ Post Oak Building LLC $49.27 CityWestPlace CityWest Blvd Westchase 518, % 1,331 $46.49 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 169,458 $44.49 TIER REIT, Inc. 21 Waterway 21 Waterway Ave The Woodlands 14, ,49 $ OWNER The Woodlands Development Company, L.P. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 9,355 $48.9 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

41 Research & Forecast Report HOUSTON OFFICE Q3 216 Houston office market construction pipeline shrinks seventy-three percent over the year Lisa Bridges Director of Market Research Houston Houston s office market continues to struggle due to the downturn in the energy industry, leading to negative net absorption and decreased leasing activity. Leasing activity has dropped by 28.6% since Q3 215 and by 13.8% over the quarter. Tenants are renewing existing leases, but more companies continue to contract than expand. Houston s office market posted.4m SF of negative net absorption during the third quarter. Even with the positive absorption year-to-date, because of the additional space completed and added to the market, Houston s city-wide office vacancy rate rose from 16.2% to 17.1% over the quarter, and the annual rate rose significantly, increasing by 26 basis points from 14.5% in Q Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Annual Change Quarterly Change Quarterly Forecast* Available sublease space has increased from 7.1M SF to 12.M SF, growing 68.6% over the year. The major energy firms, as well as the engineering companies and oilfield service firms that support them continue to suffer with the results of the significant drop in the price of oil. ConocoPhillips has almost 6, square feet of new, never occupied space on the market. Shell recently announced it will vacate the majority of its space in the CBD submarket, adding additional space on the sublease market. We are hopeful that Houston s office market has hit the bottom and no more significant blocks of space will be added. 1.5M SF of new inventory delivered during Q3 216 and 48.9% of this space is pre-leased. Houston s office construction pipeline is shrinking and currently totals 2.9M SF, 73.% less than the 1.8M SF under construction in Q The majority of the new space is located in suburban submarkets and is scheduled to deliver over the next 15 months. According to the U.S. Bureau of Labor Statistics, the Houston metropolitan area created 14,2 jobs (not seasonally adjusted) between August 215 and August 216. Most of the job growth occurred in education and healthcare, trade, transportation and utilities, and professional services. Summary Statistics Houston Office Market Q3 215 Q2 216 Q3 216 Vacancy Rate 14.5% 16.2% 17.1% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year % 14.6% 11.8% 18.3% 13.4% 19.1% Average (all classes) $27.83 $29.57 $29.7 CBD Class A $42.72 $44.89 $45.5 Suburban Class A $33.2 $33.69 $33.58 Share or view online at colliers.com/texas/houstonoffice

42 Vacancy & Availability Houston s citywide vacancy rate rose 9 basis points from 16.2% to 17.1% over the quarter, and rose 26 basis points from 14.5% in Q Over the quarter, the average suburban vacancy rate increased 8 basis points from 16.4% to 17.2%, and the average CBD vacancy rate increased 12 basis points from 15.6% to 16.8%. The average CBD Class A vacancy rate rose 16 basis points from 11.8% to 13.4% over the quarter, while the average CBD Class B vacancy rate remained the same at 26.5%. The average suburban Class A vacancy rate increased 8 basis points from 18.3% to 19.1%, and the average suburban Class B vacancy rate rose 1 basis points between quarters from 15.3% to 16.3%. Of the 1,71 existing office buildings in our survey, 142 buildings now have 1, SF or more of contiguous space available for lease or sublease. Further, 57 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 12. million SF or 5.2% of Houston s total office inventory, two and one half times more than the 3.4M SF in Q3 214 when oil prices dropped significantly. Available Sublease Space 14,, 12,, 1,, 8,, 6,, 4,, 2,, Q1 214 Q2 214 CBD Suburban Houston Total Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 8/15 8/16 HOUSTON 4.9% 5.8% TEXAS 4.6% 5.% U.S. 5.% 5.2% JOB GROWTH 2.% 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% Annual Change # of Jobs Added HOUSTON.5% 14.2K TEXAS 1.6% 186.9K U.S. 1.7% 2.4M CBD vs. Suburban A OFFICE Large Sublease Availabilities BUILDING TENANT SUBMARKET SF One Shell Plaza Shell Oil CBD 756,162 Energy Center Four ConocoPhillips Katy Freeway 597,628 Four WestLake Park BP Katy Freeway 559,94 Four Oaks Place BHP West Loop/Galleria 421, Texas Freeport-McMoRan CBD 355,847 Energy Center II WorleyParsons Katy Freeway 257,659 Three WestLake Park Phillips 66 Katy Freeway 242,52 BG Group Place BG Group CBD 299,257 Northborough Tower Noble Energy North Belt 24,198 8 Greenspoint ExxonMobil North Belt 198,256 CityWestPlace 2 Statoil Westchase 19, Clay Rd AMEC Foster Wheeler Katy Freeway 187,285 Westway II GE Oil & Gas West Belt 186,957 Energy Center I Foster Wheeler Katy Freeway 182,966 Pinnacle Westchase Phillips 66 Westchase 16,356 Source: CoStar CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q3 216 Office Colliers International

43 Absorption & Demand Houston s office market posted.4m SF of negative net absorption in Q3 216, pushing year-to-date absorption down to around.3m SF. Suburban Class B space posted the largest loss, with.5m SF of negative net absorption, while Suburban Class A posted the largest gain, 565,185 SF of positive net absorption. This positive absorption is the result of resulting from Phillips 66 occupancy of its namesake new building at 211 Citywest Blvd in the Westchase submarket. The majority of Q3 negative absorption was due to tenants downsizing and consolidating in an effort to cut expenditures. Rental Rates The significant increases in vacancy rates in Houston s office market have begun to have an impact on average asking rental rates. Although most rental rates remained relatively flat over the quarter, we witnessed several landlords with large blocks of space drop rental rates by $2. to $4. per square foot. In contrast, several buildings delivered over the quarter and those buildings are offering lease space with a higher than average asking rental rate. Leasing Activity Houston s office leasing activity decreased 13.8% between quarters recording only 2.5 million SF of transactions in Q When compared to the 3.5 million SF recorded in Q3 215, quarterly leasing activity has fallen by 28.6% in just one year. Q3 216 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE 69 Main St. CBD 237,78 United Airlines 2 Aug Enclave Parkway Katy Freeway 86, Lloyd's Register 3 Jul-16 Wells Fargo Plaza CBD 75,378 Halcon Resources 4 Sep Main St. CBD 56,86 Orrick, Herrington & Sutcliffe LLP 2 Aug-16 CityWestPlace Bldg 4 Westchase 5,929 American Midstream 4 Jul-16 Sugar Land Town Square Bldg B E Fort Bend/Sugar Land 46,629 CVR Energy, Inc 1 Jul-16 CityWestPlace Bldg 1 Westchase 46,92 TechSpace Holding Aug Northwest Fwy Northwest 32,664 K. Hovnanian of Houston II, LLC 1 Jul-16 1 Colliers International transaction 2 Pre-lease in proposed or building under construction 3 Renewal 4 Sublease Sales Activity Houston s office investment sales activity has slowed significantly over the past year, dropping by 77.% since Q The average sales price has remained stable over the year and is currently $227 per square foot. Q3 216 CHANGE IN SALES (YEAR OVER YEAR) 25% 2% 15% 1% 5% % -5% -1% Q3 216 OFFICE SALES PRICE PER SF Sources: CoStar and Real Capital Analytics 3 Houston Research & Forecast Report Q3 216 Office Colliers International

44 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q3-216 Q2-216 Q3-216 Q2-216 CBD A 34 31,571,839 3,213,76 1.2% 1,29, % 4,243, % 11.8% -412,324-5,848 $45.5 B 33 1,516,468 2,582, % 24, % 2,786, % 26.5% -2,115 25,78 $29.4 C , ,37 2.8%.% 191,37 2.8% 21.5% 6,357-3,989 $27 Total 8 42,869,14 5,981,34 14.% 1,234, % 7,215, % 15.6% -524,282 17,26 $38.67 SUBURBAN A ,782,9 15,871, % 2,384, % 18,256, % 18.3% 565,185-4,762 $33.58 B ,88,917 11,873, % 948,43 1.2% 12,822, % 15.3% -531, ,77 $2.53 C 34 13,199,398 1,288, % 7,149.1% 1,295,42 9.8% 9.7% -32,378 24,549 $16.7 Total ,862,45 29,33, % 3,34, % 32,373, % 16.4% 1, ,29 $26.46 OVERALL A ,353,929 19,84, % 3,414,87 2.7% 22,499, % 16.7% 152,861-46,61 $35.83 B ,397,385 14,456, % 1,152,55 1.3% 15,68, % 16.5% -533, ,369 $22.11 C ,121,195 1,479, % 7,149.1% 1,486,79 1.5% 1.5% -26,21 2,56 $16.71 Total ,872,59 35,2, % 4,574,56 2.% 39,594, % 16.2% -46, ,419 $29.7 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q3-216 Q2-216 Q3-216 Q2-216 A 7 2,13, , % 25, % 474, % 23.% 16,438 56,584 $34.14 B 32 2,637, , % 6,69.2% 194, % 7.5% 3,449-12,79 $29.83 C ,791 41, % -.% 41, % 5.2% -17,26 7,654 $2.66 Total 54 5,24, , % 31,267.6% 718, % 13.6% 2,861 52,159 $32.6 BAYTOWN B 3 186,5 4, %.% 4, % 3.% 589 $21.45 C 3 81,481.%.%.%.% - Total 6 267,486 4, %.% 4, % 2.1% 589 $21.45 BELLAIRE A 6 1,91, , % 8,532.8% 15, % 8.6% -56,94 6,553 $26.57 B 18 2,599, , %.% 197, % 6.6% -26,581-2,25 $24.26 C 5 327,2 4, %.% 4, % 1.7% -5,563 2,649 $16.56 Total 29 4,18, , % 8,532.2% 388, % 7.5% -88,238 6,997 $25.2 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 326,764 1, %.% 1, % 2.6% -1,722 $17.93 C 7 289,662 14, %.% 14, % 4.% -2,447-5,39 $15. Total ,426 24, %.% 24, % 3.% -4,169-5,39 $17.25 E. FORT BEND/SUGAR LAND A 17 3,399, ,318 7.% 61, % 299,55 8.8% 7.6% -39,58-67,51 $3.37 B 39 2,469, ,9 1.6% 15,853.6% 276, % 11.5% 6,323-13,121 $22.19 C 3 24,593 39, %.% 39, %.% -39,464 $. Total 59 6,73,24 538, % 77,4 1.3% 615, % 8.9% -72,721-8,622 $ Houston Research & Forecast Report Q3 216 Office Colliers International

45 Houston Suburban Office Market Summary - Continued DIRECT Q3-216 Q2-216 Q3-216 Q2-216 FM 196 A 12 2,913, , % 2,296.7% 315,87 1.8% 11.8% 28,927 16,63 $27.23 B 72 4,255, , % 84,422 2.% 85,34 2.% 2.% 1,178 18,774 $17.15 C 2 664,853 56,67 8.5% 973.1% 57,58 8.7% 9.1% 2,751-3,597 $14.48 Total 14 7,833,58 1,118, % 15, % 1,223, % 13.8% 32,856 31,87 $18.4 GREENWAY A 2 7,248,25 1,162, % 4,713.1% 1,167, % 15.3% 94,724 21,721 $37.42 B 31 3,194,39 36, % 9,339.3% 316, % 8.9% -31,52-62,69 $26.53 C ,718 78, %.% 78, % 14.3% -2,646-9,372 $22.32 Total 67 1,975,277 1,548, % 14,52.1% 1,562, % 13.3% 6,576-5,26 $33.63 GULF FREEWAY/PASADENA A 1 22,76 3, %.% 3, % 13.7% $3.59 B 39 2,257,56 296, %.% 296, % 16.8% 14,376-4,944 $2.72 C 29 1,42,96 99, %.% 99, % 9.6% ,739 $18.46 Total 69 3,322,38 398, %.% 398, % 14.5% 14,838-24,683 $2.29 I-1 EAST B 7 447,91 14, %.% 14, % 28.8% -11,244-4,314 $15.4 C 5 267,13 88,16 33.%.% 88,16 33.% 34.5% 4, -2,16 $2.78 Total ,31 228, %.% 228, % 3% -7,244-6,474 $18.5 KATY FREEWAY A 86 22,64,12 3,36, % 974, % 4,335, % 17.8% -96,72-63,218 $35.92 B 99 9,611,14 1,647, % 228, % 1,875, % 18.6% -88,59-16,753 $23.93 C 33 1,559,285 52, % 3,866.2% 56, % 3.4% -4,221 1,289 $18.63 Total ,234,41 5,6, % 1,26,97 3.6% 6,267, % 17.3% -189,45-78,682 $3.63 KATY/GRAND PARKWAY WEST A 14 1,254, , %.% 358, % 29.8% 15,95 6,617 $27.75 B 12 96,841 47,37 5.2%.% 47,37 5.2% 5.5% 2, $26.6 C 3 19,54 4,22 2.2%.% 4,22 2.2% 2.2% -4,22 $23.14 Total 29 2,351,893 49, %.% 49, % 18.2% 18,61 56,29 $27.59 KINGWOOD/HUMBLE B 2 1,3,7 71, % 8,73.7% 8, % 6.3% 1,133 6,51 $21.67 C 5 168,3 22, 13.1%.% 22, 13.1% 13.1% 14, $17.97 Total 25 1,469, 93, % 8,73.6% 12,311 7.% 7.% 1,133 2,51 $21.19 NASA/CLEAR LAKE A 12 1,77, ,42 8.2% 3, % 175, % 9.2% -12,38-5,58 $24.1 B 47 3,196,342 87, % 4,.1% 811, % 23.5% -59,279 64,292 $17.5 C 2 66,49 96, %.% 96, % 15.9% 8, $15.85 Total 79 5,627,724 1,47, % 34,823.6% 1,82, % 18.1% -62,918 58,87 $18.53 NORTH BELT/GREENSPOINT A 23 5,258,46 2,71, % 12,516.2% 2,84, % 4.3% 35,87-241,291 $25.16 B 55 5,571,641 1,412, % 248, % 1,66, % 3.5% 36,138-41,491 $16.38 C 22 1,344, , %.% 241, % 18.6% 8,345 16,663 $14.16 Total 1 12,174,712 3,725, % 261,14 2.1% 3,986, % 33.4% 79,57-266,119 $29 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7.%.%.%.% $. B 5 26,618 66, %.% 66, % 16.5% -8,653 6,821 $22.97 C 2 56,562 9, %.% 9, % 17.4% $15. Total 9 818,88 76, %.% 76, % 5.% -8,45 6,3 $22 5 Houston Research & Forecast Report Q3 216 Office Colliers International

46 Houston Suburban Office Market Summary - Continued DIRECT Q3-216 Q2-216 Q3-216 Q2-216 NORTHWEST AND NORTHWEST OUTLIER A 1 2,223,66 652, % 35, % 687, % 31.2% 6,81-7,58 $22.97 B 78 5,98,621 92, % 9,36.2% 912, % 16.3% 49,985 58,627 $19.11 C 34 1,336,21 8,178 6.%.% 8,178 6.% 5.9% -88 8,971 $13.25 Total 122 9,467,78 1,635, % 44,598.5% 1,68, % 18.3% 55,978 6,9 $2.35 RICHMOND/FOUNTAINVIEW B , , %.% 191, % 23.2% -9,671 6,136 $16.56 C ,591 54,748 1%.% 54,748 1% 12.3% 6,325 6,218 $15.8 Total 25 1,279, , %.% 246, % 19.% -3,346 12,354 $16.37 SAN FELIPE/VOSS A 3 1,72,793 45, % 6,816.4% 412, % 25.6% 27,864-47,187 $36.27 B 31 3,21, , % 6,344.2% 354, % 9.5% -51,994-26,956 $24.3 Total 34 4,922, , % 13,16.3% 766, % 15.1% -24,13-74,143 $3.68 SOUTH A 1 8, 1, %.% 1, % 11.9% ,783 $27.22 B ,159 26, %.% 26, % 7.7% 8, $22.69 C 5 194,42 52, %.% 52, % 27.2% ,74 $15.1 Total ,21 89, %.% 89, % 13.3% 8,16-9,423 $19.45 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,391 95, %.% 95, % 15.3% 25,193-11,5 $18.61 C 7 398,964 27, % 7.2% 28,65 7.% 7.8% 3,99-5,16 $2.71 Total 2 1,642, , % 7.% 123,59 7.5% 8.5% 28,292-16,21 $18.85 SOUTHEAST B 17 1,563,9 194, %.% 194, % 12.% -6,469 4,686 $17.5 C 3 142,419 4, %.% 4, %.% -4,992 - Total 2 1,75, , %.% 199, % 1% -11,461 4,686 $17.5 SOUTHWEST A 6 1,576,91 187, %.% 187, % 14.5% 4,988-2,52 $18.33 B 66 6,262,972 1,12, % 31,594.5% 1,43, % 16.7% 1,683 54,683 $16.62 C 38 1,924, ,95 6.7%.% 129,95 6.7% 7.4% 13,255 12,931 $14.16 Total 11 9,679,657 1,329, % 31,594.3% 1,361, % 14.6% 55,926 65,562 $16.7 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% - B 1 83,22 224, % 1, % 234, % 26.3% -15,739-1,333 $24.2 C 1 21,396.%.%.%.% - Total 13 1,1, ,4 24.2% 1,136 % 254, % 23.6% -15,739-1,333 $24.2 WEST BELT A 28 3,584,133 75, % 149, % 854, % 2.8% -17,854-47,386 $27.81 B 32 1,91,39 272, % 158,22 8.3% 431, % 21.6% -2,922-15,138 $2.53 C 3 87,629.%.%.%.% - Total 63 5,573, , % 37,82 5.5% 1,286, % 2.8% -11, ,524 $24.21 WEST LOOP/GALLERIA A 47 17,44,174 2,834, % 237, % 3,72, % 14.4% -58,323-13,267 $37.69 B 53 6,161,178 68,631 1% 38,787.6% 719, % 12.4% 47,66-6,58 $26.79 C 4 216,268 2, % 161.7% 4,321 2.% % -2, $2. Total 14 23,817,62 3,517, % 278, % 3,796, % 13.7% -13,515-74,127 $ Houston Research & Forecast Report Q3 216 Office Colliers International

47 AVAILABLE* * Under Construction Delivers 1/ PENNZOIL PLACE BUILDING NAME 717 TEXAS 6 TRAVIS BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN BG GROUP PLACE 2 HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER ADDRESS 717 Texas Avenue 6 Travis Street 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 1,656,529 / 22,575 / 75 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / 46 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,649 / 27 % LEASED 1% 91.3% 9.6% 69.5% 77.9% 26.6% 97.7% 38.1% 98.5% 52.8% 94.8% 9% 91.1% AVAILABLE SF 199, , , , , ,16 827, , ,123 52,13 75, ,23 178,252 MAX CONTIGUOUS SF 165,754 33,526 3,124 14,27 81,79 188, , , ,51 28,181 12,485 51,86 115,27 QUOTED ** $26.69-$49.49 $36.82-$49.32 $37.1-$44.6 $37.1-$44.6 $41.82 $4.94-$44.94 $54.-$58. $51.91-$56.91 $ $31.96-$44.46 $27.23-$45.23 $46.79-$5.79 PARKING RATIO OWNER Hines Texas Tower Ltd M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Wells Real Estate Funds Holdings Inc. Holdings Inc BUILDING NAME 11 FANNIN ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER ADDRESS 11 Fannin Street 121 Main Street 1111 Main Street 1 Main Street 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 62,122 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / ,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 % LEASED 98.8% 82.1% 1% 98.3% 1% 91.8% 99.2% 99.4% 97.7% 87.3% 73.2% 93.8% 93.1% AVAILABLE SF 11,686 25,251 43,63 224,41 18,38 13,779 24, , ,47 223, ,348 MAX CONTIGUOUS SF 54,99 63,13 28, ,372 18,565 23,537 24,723 56, ,352 84,58 28,35 QUOTED ** $44.54 $33.99-$35.49 $35.27-$52.27 $ $5.95 $54.28 $37.44-$44.94 $43.11 $45.18-$46.18 $37.16-$42.16 $33.65-$45.65 $33.1-$45.1 PARKING RATIO OWNER JMB Realty Corporation Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Real Estate Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF QUOTED ** PARKING RATIO OWNER 2,5, 2,, 1,5, 1,, 5, HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 92.1% 1% 7.4% 83,525 33,781 35,98 121,751 $22.24-$37.74 $17.98-$ H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties Class A Class B Available Sublease Space Q3 216 Class A: 2,272,19 SF or 7.1% Class B: 327,73 SF or 3.1% AVAILABLE* 16 SMITH 16 Smith Street 1,98,399 / 23, / % 341,772 28,593 $38.43 Brookfield Office Properties, Inc. * *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp. $48. $46. $44. $42. $4. $38. $36. $34. $32. $3. $28. $26. $24. $22. *Vacancy percentage includes direct and sublease space CBD Class A Rents 7 6 COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX CBD Class A Vacancy 19.% 17.% 15.% 13.% 1% 9.% 7.% 5.% Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q3-216 Q2-216 Q3-216 Q2-216 A 33 9,817,89 1,51, % 741, % 2,252, % 29.4% 633,488-7,892 $36.99 B 62 7,477,832 1,27, % 19,377.3% 1,289, % 1.7% -491,434-45,456 $2.3 C 5 213,32 25, %.% 25, % 11.9% 7,14 $17.56 Total 1 17,58,223 2,85, % 761, % 3,567,14 2.4% 21.2% 142,54-19,334 $3.72 THE WOODLANDS 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 Office Development Pipeline Houston s construction pipeline contains 2.9 million SF of office space and 46.9% is pre-leased. Build-to-suit projects make up 23.2% of the pipeline, and the remaining 2.2M SF of spec office space under construction is approximately 32.7% pre-leased. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY 69 Main at Texas 69 Main St CBD 1,56, % Hines Jan-17 Future Amegy Bank HQ 1717 W Loop Fwy S Post Oak Park 38, 9.2% Hines Feb-17 Memorial City 11 Katy Fwy Katy Freeway East 238, % MetroNational Corporation. Feb-17 Kirby Collection 32 Kirby Dr Greenway Plaza 191,85.5% Thor Equities Dec-17 Lockton Place 3657 Briarpark Dr Westchase 186, 1% Triten Real Estate Partners Oct-17 The Post Oak 16 West Loop S Galleria/Uptown 14,579.% Tellepsen Builders Dec-17 Insperity Centre Loop 494 Kingwood/Humble 1, 1% Insperity Jan-17 Skylines Now Available Online at colliers.com/texas/houstonskylines A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS SEPTEMBER A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS SEPTEMBER 216 Available Sublease Space Central Business District Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. 7 Houston Research & Forecast Report Q3 216 Office Colliers International

48 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA Q3 216 Highlights YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) Heritage Plaza 1111 Bagby St CBD 1,212, % 184,663 $55.28 Bop Heritage Llc 5 Houston Center 141 McKinney St CBD 58, % 51,969 $ Wells Real Estate Funds 5.79 BG Group Place 811 Main CBD 972, % 338,228 $56.91 NPS of Korea CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 9,361 $48. LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 177,594 $46.5- Invesco Real Estate $ Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 42,962 $ Post Oak Building LLC $49.27 CityWestPlace CityWest Blvd Westchase 518, % 125,265 $46.49 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 183,88 $44.49 TIER REIT, Inc. 21 Waterway 21 Waterway Ave The Woodlands 14, ,49 $ OWNER The Woodlands Development Company, L.P. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 9,355 $48.9 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

49 Research & Forecast Report HOUSTON OFFICE Q2 216 Houston s office market leasing activity drops almost thirty-five percent in one year Lisa Bridges Director of Market Research Houston Houston s office market continues to struggle due to the downturn in the energy industry, leading to negative net absorption and decreased leasing activity. Leasing activity has dropped by 34.3% since Q2 215 and decreased by 2.6% over the quarter. Tenants are renewing existing leases, but more companies are contracting than expanding. Houston s office market posted.4m SF of negative net absorption during the second quarter, pushing mid-year net absorption down to M SF. Houston s city-wide office vacancy rate rose from 15.2% to 16.2% over the quarter, and the annual rate rose significantly, increasing by 22 basis points from 14.% in Q Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Annual Change Quarterly Change Quarterly Forecast* Available sublease space has increased from 6.9M SF to 1.8M SF, growing 55.9% over the year. The majority of this space was leased by growing energy companies addressing their future expansion needs and now that the hiring has stopped and job cuts have occurred, the expansion space is no longer needed. Some of the larger energy firms with multiple blocks of space on the market for sublease ultimately intend to consolidate operations into space not taken under a sublease. 2.3M SF of new inventory delivered during Q2 216 and 58.7% of this space is pre-leased. Houston s office construction pipeline is shrinking and currently totals 4.M SF of which 49.7% is pre-leased. The majority of the new space is located in suburban submarkets and is scheduled to deliver over the next 18 months. According to the U.S Bureau of Labor Statistics, the Houston metropolitan area created only 5,1 jobs (not seasonally adjusted) between May 215 and May 216, about an eighth of the historical average. Most of the job growth occurred in the Arts, Entertainment & Recreation sector, followed by Accommodation & Food Services, then by Healthcare. Summary Statistics Houston Office Market Q2 215 Q1 216 Q2 216 Vacancy Rate 14.% 15.2% 16.2% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year % 14.1% Average (all classes) $28.13 $28.34 $28.1 CBD Class A $45.25 $45.6 $44.89 Suburban Class A $33.59 $33.33 $32.75 Share or view online at colliers.com/texas/houstonoffice

50 Vacancy & Availability Houston s citywide vacancy rate rose 1 basis points from 15.2% to 16.2% over the quarter, rising 22 basis points from 14.% in Q Over the quarter, the average suburban vacancy rate increased 13 basis points from 15.1% to 16.4%, and the average CBD vacancy rate remained flat at 15.4%. The average CBD Class A vacancy rate was unchanged at 11.9% over the quarter, while the average CBD Class B vacancy rate decreased 3 basis points from 25.6% to 25.3%. The average suburban Class A vacancy rate increased 23 basis points from 16.% to 18.3%, and the average suburban Class B vacancy rate rose 4 basis points between quarters from 14.9% to 15.3%. Of the 1,697 existing office buildings in our survey, 14 buildings now have 1, SF or more of contiguous space available for lease or sublease. Further, 52 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 1.8 million SF or 4.7% of Houston s total office inventory, but only 3.1 million SF or 1.4% of the available space is currently vacant. Available sublease space now accounts for almost 21.7% of all available space. Available Sublease Space 12,, 1,, 8,, 6,, 4,, 2,, Q2 214 Absorption & Demand Houston s office market posted.4m SF of negative net absorption in Q2 216, pushing mid-year absorption down to around M SF. Suburban Class A space posted the largest loss, with.3m SF of negative net absorption, while CBD Class B posted the largest gain, 25,78 SF of positive net absorption. The majority of Q2 negative absorption was due to tenants downsizing and consolidating in an effort to cut expenditures. Rental Rates Q3 214 CBD Suburban Houston Total Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Houston s office market has softened and this has begun to have an impact on average asking rental rates. The average asking rate for all classes in Houston decreased from $28.34 per SF to $28.1 per SF over the quarter, and decreased from $28.13 per SF in Q The average suburban Class A rental rate decreased from $33.33 per SF to $32.75 per SF over the quarter, and decreased from $33.59 per SF in Q The average CBD Class A rental rate decreased over the quarter from $45.6 per SF to $44.89 per SF. Job Growth & Unemployment (not seasonally adjusted) UNEMPLOYMENT 5/15 5/16 HOUSTON 4.4% 4.8% TEXAS 4.3% 4.2% U.S. 5.3% 4.5% JOB GROWTH 2.% 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% CBD Vacancy Annual Change # of Jobs Added HOUSTON.2% 5.1K TEXAS 1.4% 169.4K U.S. 1.7% 2.4M CBD vs. Suburban A OFFICE A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. Suburban Vacancy CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q2 216 Office Colliers International

51 AVAILABLE* * Under Construction Delivers 12/ PENNZOIL PLACE BUILDING NAME 717 TEXAS 6 TRAVIS BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN BG GROUP PLACE 2 HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER ADDRESS 717 Texas Avenue 6 Travis Street 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 1,656,529 / 22,575 / 75 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / 46 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,452 / 51 58,875 / 29,352 / 27 % LEASED 1% 95.8% 91.6% 69.5% 78.% 3.2% 97.7% 5.9% 98.5% 58.4% 94.8% 91.2% 91.1% AVAILABLE SF 34,24 194, ,432 28, , ,16 827, , ,123 51,85 79,613 24,733 51,969 MAX CONTIGUOUS SF 16,579 33,526 23,557 14,27 81,79 188, , , ,51 234,333 12,485 51,86 18,994 QUOTED ** $48.49-$49.49 $49.32-$5.32 $44.6 $44.6 $41.82-$43.82 $48.42 $54.-$58. $56.91 $44.14 $44.46 $45.23 $46.79-$5.79 PARKING RATIO OWNER Hines Texas Tower Ltd M-M Properties Metropolis Investment Metropolis Investment Busycon Properties LLC Busycon Properties LLC Hines NPS JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Wells Real Estate Funds Holdings Inc. Holdings Inc BUILDING NAME 11 FANNIN ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER ADDRESS 11 Fannin Street 121 Main Street 1111 Main Street 1 Main Street 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 62,122 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / ,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 % LEASED 98.5% 83.2% 1% 98.3% 1% 91.8% 98.9% 99.4% 97.7% 87.3% 69.4% 94.1% 97.3% AVAILABLE SF 118,83 25,251 43,63 236,749 21,89 8,242 24, , , , ,531 MAX CONTIGUOUS SF 54,99 63,13 28, , ,263 22,982 24,723 56, ,352 84,58 28,35 QUOTED ** $47.4 $34.5-$35.5 $52.27 $ $5.96 $54.28 $47.44 $43.31 $46.3 $42.16 $45.65 $45.1 PARKING RATIO OWNER JMB Realty Corporation Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Real Estate Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF QUOTED ** PARKING RATIO OWNER 2,5, 2,, 1,5, 1,, 5, HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 92.1% 1% 68.9% 77, ,871 35,98 121,751 $37.74 $ H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties Class A Class B Available Sublease Space Q2 216 Class A: 2,184,443 SF or 6.7% Class B: 276,3 SF or 2.6% AVAILABLE* 16 SMITH 16 Smith Street 1,98,399 / 23, / % 341,772 28,593 $43.43 Brookfield Office Properties, Inc. * *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp. $48. $46. $44. $42. $4. $38. $36. $34. $32. $3. $28. $26. $24. $22. *Vacancy percentage includes direct and sublease space CBD Class A Rents 7 6 COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX CBD Class A Vacancy 19.% 17.% 15.% 13.% 1% 9.% 7.% 5.% Leasing Activity Houston s office leasing activity decreased 2.6% between quarters recording only 2. million SF of transactions in Q When compared to the 3. million SF recorded in Q2 215, quarterly leasing activity has fallen by 34.3% in just one year. Q2 216 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE CityPlace 2 The Woodlands 326,8 American Bureau of Shipping 2 May-16 3 Sugar Creek Center Blvd E Fort Bend Co/Sugar Land 26, Aetna 1,3 May Tallyho Rd Gulf Freeway/Pasadena 35,35 Wally Park May-16 Remington Square Phase II West Belt 34,748 Patterson-UTI Drilling Company May-16 Air Liquide Center-South Katy Freeway East 23,451 Texas Mutual Jun Augusta Dr. San Felipe/Voss 23,812 Johnston, LLC Feb-16 1 Colliers International transaction 2 Pre-lease in proposed building 3 Renewal Sales Activity Houston s office investment sales activity has slowed significantly over the past year, dropping by 83.% since Q The average sales price decreased over the year from $23 per SF to $199 per SF in Q Q2 216 OFFICE SALES VOLUME 3% 2% 1% % -1% -2% Q2 216 OFFICE SALES PRICE PER SF Sources: CoStar and Real Capital Analytics Skylines Now Available Online at colliers.com/texas/houstonskylines A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS JUNE A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS JUNE 216 Available Sublease Space Central Business District Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. 3 Houston Research & Forecast Report Q2 216 Office Colliers International

52 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q2-216 Q1-216 Q2-216 Q1-216 CBD A 33 31,45,31 3,19, % 728, % 3,747, % 11.9% -5, ,35 $44.89 B 32 1,496,468 2,469, % 19, % 2,66, % 25.6% 25,78 6,86 $29.12 C , , %.% 197, % 2% -3,989 6,6 $27 Total 8 42,868,566 5,687, % 918, % 6,65, % 15.4% 15, ,495 $38.54 SUBURBAN A ,46,944 15,943, % 1,319, % 17,263, % 16.% -32,143 1,4,374 $32.75 B ,414,546 11,278, % 868,12 1.1% 12,146, % 14.9% -18,8 152,516 $2.38 C 34 13,278,222 1,287, % 6,119.5% 1,293, % 1.4% -3,657-21,74 $16.23 Total ,153,712 28,51, % 2,193, % 3,74, % 15.1% -413,88 1,171,816 $26.4 OVERALL A ,911,245 18,963, % 2,47, % 21,11, % 14.9% -37,991 1,251,49 $34.56 B ,911,14 13,748, % 1,58, % 14,87, % 16.3% -82,3 159,376 $21.1 C ,2,19 1,485,66 1.5% 6,119.% 1,491, % 1.4% -7,646-14,474 $16.56 Total ,22,278 34,197, % 3,112, % 37,39, % 15.2% -397,937 1,396,311 $28.1 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q2-216 Q1-216 Q2-216 Q1-216 A 7 2,13, , % 6,63.3% 49,63 23.% 25.7% 56,584 2,24 $34.74 B 32 2,637,63 196, % 6,964.3% 23,61 7.7% 7.% -17,946-2,84 $3.68 C ,791 24, % -.% 24, % 6.8% 7,654 1,727 $21.5 Total 54 5,239,847 75, % 13,27.2% 718, % 15.1% 46,292 1,127 $32.84 BAYTOWN B 3 186,5 5,551 3.%.% 5,551 3.% 3.% $23.18 C 3 81,481.%.%.%.% $7.95 Total 6 267,486 5, %.% 5, % 2.1% $19.43 BELLAIRE A 6 1,91,536 73,89 6.8% 2, % 94, % 9.2% 6,553 13,768 $26.64 B 19 2,631, , %.% 182, % 6.9% -2,25-5,939 $24.33 C 5 327,2 34, %.% 34, % 11.5% 2,649 1,785 $16.51 Total 3 4,49, , % 2,393.5% 312,58 7.7% 7.9% 6,997-35,386 $25.2 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 326,764 8,47 2.6%.% 8,47 2.6% 2.6% 2,149 $17.44 C 7 289,662 11,714 4.%.% 11,714 4.% 2.2% -5,39 $12.1 Total ,426 2,184 3.%.% 2,184 3.% 2.2% -5,39 2,149 $15.38 E. FORT BEND/SUGAR LAND A 17 3,399, , % 6,413.2% 25,151 6.% 5.7% -12,727 39,285 $31.34 B 39 2,469, , % 2,511.8% 283, % 1.9% -13,121 32,99 $21.88 C 3 24,593.%.%.%.% $. Total 59 6,73,24 461, % 26,924.4% 488,336 8.% 7.6% -25,848 71,384 $ Houston Research & Forecast Report Q2 216 Office Colliers International

53 Houston Suburban Office Market Summary - Continued DIRECT Q2-216 Q1-216 Q2-216 Q1-216 FM 196 A 12 2,924,111 32,367 1% 17,562.6% 337, % 12.% 12,863-1,183 $26.8 B 72 4,264,18 768, % 83,351 2.% 851,518 2.% 2.% 18,774-46,85 $17.37 C 2 664,853 59, % 973.1% 6, % 8.5% -3,597 1,864 $14.11 Total 14 7,853,72 1,147, % 11, % 1,249, % 13.8% 28,4-46,169 $18.24 GREENWAY A 19 7,72,528 1,72, % 7,442.1% 1,8, % 15.6% 21, ,879 $37.18 B 31 3,194,39 277, % 7,251.2% 284, % 7.% -62,69 4,415 $27.52 C ,718 76, %.% 76, % 12.5% -9,372-3,51 $22.29 Total 66 1,799,555 1,426, % 14,693.1% 1,441, % 13.% -5,26 156,793 $33.22 GULF FREEWAY/PASADENA A 1 22,76 3, %.% 3, % 13.7% $3.59 B 38 2,231,56 374, %.% 374, % 12.6% -4,944 2,351 $27 C 3 1,157,96 125,28 1.8%.% 125,28 1.8% 6.9% -44,96 1,434 $18.23 Total 69 3,411,38 52, %.% 52, % 1.6% -49,85 21,785 $2.48 I-1 EAST B 7 447,68 19, %.% 19, % 23.6% -4,314 11,197 $14.88 C 5 267,13 92, %.% 92, % 33.7% -2,16 $12. Total ,81 22, %.% 22, % 27.4% -6,474 11,197 $14.1 KATY FREEWAY A 85 21,681,711 3,416, % 44,432 2.% 3,856, % 14.% -63, ,313 $35.87 B 99 9,69,77 1,579, % 288,399 3.% 1,868, % 18.7% -67,71-74,69 $24.36 C 32 1,539,285 48, % 4,244.3% 52, % 3.5% -1, $18.72 Total ,83,766 5,44, % 733,75 2.2% 5,777, % 15.9% -132,39 165,22 $3.65 KATY/GRAND PARKWAY WEST A 14 1,254, , %.% 394, % 27.5% 4,25 4,527 $27.4 B 12 96,841 49, %.% 49, % 3.2% $26.14 C 3 19,54 4,22 2.2%.% 4,22 2.2%.% -4,22 $23.47 Total 29 2,351, , %.% 448, % 15.4% 35,437 5,427 $27.27 KINGWOOD/HUMBLE B 2 1,3,7 72, % 8,73.7% 81, % 6.8% 6,51 21,248 $21.46 C 5 165,5 22, 13.3%.% 22, 13.3% 21.8% 14, 745 $17.95 Total 25 1,466,2 94, % 8,73.6% 13, % 8.5% 2,51 21,993 $2.94 NASA/CLEAR LAKE A 12 1,77, ,38 7.5% 29, % 162, % 8.9% -5,58-62,627 $23.87 B 48 3,259, , % 4,.1% 751, % 25.4% 75,92 161,381 $17.8 C 2 66,49 15, %.% 15, % 15.9% $15.45 Total 8 5,69, , % 33,537.6% 1,19, % 19.1% 69,67 97,858 $18.68 NORTH BELT/GREENSPOINT A 24 5,278,921 2,19, % 32,51.6% 2,51, % 35.6% -173,898-59,529 $25.58 B 55 5,673,872 1,449, % 92,66 1.6% 1,542, % 29.2% 112,963 6,43 $16.68 C 21 1,315, , %.% 249, % 2.2% 16,663-7,76 $13.95 Total 1 12,268,458 3,718, % 125,17 % 3,844, % 31.9% -44,272-6,859 $21.31 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7.%.% 13.6% 13.6% 555,7 $. B 5 26,618 41, %.% 41, % 12.6% 6,821 1,863 $22.75 C 2 56,562 9, %.% 9, % 16.% ,786 $15. Total 9 818,88 5, %.% 5, % 4.% 6,3 555,777 $ Houston Research & Forecast Report Q2 216 Office Colliers International

54 Houston Suburban Office Market Summary - Continued DIRECT Q2-216 Q1-216 Q2-216 Q1-216 NORTHWEST AND NORTHWEST OUTLIER A 1 2,23, , % 35, % 694, % 3.8% -7,58-68,646 $22.95 B 78 5,976, , % 8,859.1% 962, % 17.1% 58,627-15,345 $18.73 C 35 1,356,21 79,37 5.9%.% 79,37 5.9% 6.5% 8, $13.2 Total 123 9,563,57 1,692, % 44,97.5% 1,736, % 18.8% 6,9-84,16 $2.8 RICHMOND/FOUNTAINVIEW B , , %.% 181, % 24.% 6,136-1,22 $17.49 C ,591 61, %.% 61, % 13.6% 6,218-7,16 $15.95 Total 25 1,279, , %.% 242, % 19.9% 12,354-17,362 $17.2 SAN FELIPE/VOSS A 3 1,72, , % 2,996.2% 44, % 22.8% -47,187-2,246 $36.3 B 32 3,242,4 296,22 9.1% 6,344.2% 32, % 8.5% -26,956 5,789 $24.1 Total 35 4,962, , % 9,34.2% 742,72 15.% 13.5% -74,143 3,543 $3.55 SOUTH A 1 8, 9, %.% 9, % 2.1% -7,783 $29.63 B ,159 35,76 7.7%.% 35,76 7.7% 7.7% $22.17 C 5 194,42 52,8 27.2%.% 52,8 27.2% 26.3% -1,74 $15.1 Total ,21 98, %.% 98, % 12.% -9, $21.38 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,58 18, %.% 18, % 13.% -11,5 5,34 $18.86 C 7 398,964 3, % 7.2% 31, % 6.5% -5,16 6,649 $2.49 Total 2 1,637, , % 7.% 139, % 7.6% -16,21 11,989 $19.37 SOUTHEAST B 17 1,557, , %.% 187, % 12.4% 4,686-2,46 $18.62 C 3 144,43.%.%.%.% $. Total 2 1,71, ,78 1%.% 187,78 1% 11.3% 4,686-2,46 $18.62 SOUTHWEST A 6 1,576,91 228, % 1,.6% 238, % 15.% -2,52 2,535 $18.43 B 66 6,262,972 1,13, % 31,594.5% 1,45, % 17.6% 54,683 5,35 $16.55 C 38 1,918, , %.% 148, % 8.4% 12,931 4,188 $14.22 Total 11 9,758,49 1,391, % 41,594.4% 1,433, % 15.5% 65,562 12,73 $16.72 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 1 83,22 218, %.% 218, % 26.2% -1,333 $22.2 C 1 21,396.%.%.%.% $. Total 13 1,1, , %.% 238, % 23.5% -1,333 $22.2 WEST BELT A 28 3,579,518 7, % 46, % 746, % 19.5% -47,386 12,465 $29.79 B 31 1,879,39 259, % 146, % 46, % 16.% -15,138-1,764 $2.11 C 3 87,629.%.%.%.% $. Total 62 5,546, , % 193, % 1,153, % 18.% -152,524 1,71 $25.61 WEST LOOP/GALLERIA A 46 16,846,324 2,223, % 2, % 2,424, % 13.5% -13,267 5,848 $37.83 B 53 6,161,178 73, % 62,787 % 766, % 11.5% -6,58 95,61 $26.8 C 4 216,268 1,861.9% 22.1% 2,63 %.% -82 $2. Total 13 23,223,77 2,929, % 263,32 1.1% 3,192, % 12.9% -74,127 1,99 $ Houston Research & Forecast Report Q2 216 Office Colliers International

55 Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q2-216 Q1-216 Q2-216 Q1-216 A 33 9,815,18 2,418, % 358, % 2,776, % 18.4% -7, ,673 $37.75 B 62 7,758, ,694 1.% 19,377.2% 798,71 1.3% 9.7% -45,456-38,59 $19.57 C 5 213,32 25, %.% 25, % 15.2% 7,14 5,553 $17.56 Total 1 17,786,597 3,222, % 378,11 2.1% 3,6,42 2.2% 14.3% -19, ,167 $31.58 THE WOODLANDS A 38 1,724,657 1,129, % 15,428 % 1,235, % 9.6% 11,69-62,628 $36.88 B 7 4,399, , % 8,51 1.8% 493, % 1.5% -29,786 47,964 $24.13 C 4 38,161 25, %.% 25, % 8.2% -24,119 $19.8 Total ,432,136 1,568, % 185, % 1,754,9 11.4% 9.8% -18,177-38,783 $3.23 Office Development Pipeline Houston s construction pipeline contains 3.9 million SF of office space and 49.7% is pre-leased. Build-to-suit projects make up 38.7% of the pipeline, and the remaining 2.4M SF of spec office space under construction is approximately 19.4% pre-leased. Approximately 6, SF, or 39.1% of the build-to-suit projects under construction, are pre-leased to energy industry companies. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER/CONTRACTOR EST. DELIVERY 69 Main at Texas 69 Main St CBD 1,56, % Hines Jan-17 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1% Transwestern Aug-16 West Memorial Place Phase II Memorial Dr Katy Freeway West 428, % Skanska Commercial Development Jul-16 Future Amegy Bank HQ 1717 W Loop Fwy S Post Oak Park 38, 9.2% Hines Feb Katy Fwy 11 Katy Fwy Katy Freeway East 238, % Anslow Bryant Construction Ltd. Jan-17 Regions Financial Center 3773 Richmond Ave Greenway Plaza 21, 51.3% The Redstone Companies Jul-16 Wildwood Corporate Centre II 48 Wildwood Forest Dr The Woodlands 21,933 % Archway Properties Jul-16 Kirby Collection 32 Kirby Dr Greenway Plaza 186,696 % Thor Equities Dec-17 Lockton Place 3657 Briarpark Dr Westchase 186, 1% Triten Real Estate Partners May-17 The Post Oak 161 Hollyhurst Ln Galleria/Uptown 14, 1% Tellepsen Builders Oct-17 The George R. Brown 7 Avenida De Las Americas CBD 115, 1% Griffin Partners Inc. Oct-16 7 Houston Research & Forecast Report Q2 216 Office Colliers International

56 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA Q2 216 Highlights YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 236,749 $ $5.95 OWNER New York State Common Retirement Fund 5 Houston Center 141 McKinney St CBD 58, % 51,969 $49.79 Wells Real Estate Funds BG Group Place 811 Main CBD 972, % 15,652 $56.91 NPS of Korea CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 9,361 $48. LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 147,871 $48.5- Invesco Real Estate $ Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 42,962 $ Post Oak Building LLC $49.27 CityWestPlace CityWest Blvd Westchase 518, % 179,217 $46.49 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 149,819 $44.49 TIER REIT, Inc. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 9,355 $48.9 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

57 Research & Forecast Report HOUSTON OFFICE Q1 216 Houston s office market continues to struggle, but it s faring better than expected Lisa Bridges Director of Market Research Houston Houston 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. Houston s Q1 216 office market continues to struggle due to the low price of oil, but it appears to be faring better than expected in a $4 per barrel economy. Houston s city-wide vacancy rate remained unchanged at 15.3% over the quarter, however the annual rate rose significantly, increasing by 22 basis points from 13.1% in Q The increase in the amount of sublease space placed on the market during 215 was a major factor. Houston s available sublease space more than doubled between Q4 214 and Q4 215, increasing from 3.8M SF to 8.M SF, but only increased to 9.2M SF in Q The majority of this space was previously leased by growing energy companies addressing their future expansion needs. Houston s office leasing activity declined 3.3% over the year, and 5.5% over the quarter. Tenants are renewing existing leases, but in today s market, more companies are contracting than expanding. Only 1.4M SF of new inventory delivered during Q1 216 and 1% of this space is pre-leased. Houston s office construction pipeline is shrinking and currently totals 6.3M SF of which 5% is pre-leased. The majority of the new space is located in suburban submarkets and is scheduled to deliver over the next 12 months. Houston s office market posted 1.3M SF of positive net absorption in Q1 216 and average office rental rates have remained relatively flat. According to the U.S Bureau of Labor Statistics, the Houston metropolitan area created only 9, jobs (not seasonally adjusted) between February 215 and February 216, about half of the annual long-term average. Most of the job growth occurred in the government sector, followed by construction and health care. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION *Projected Summary Statistics Houston Office Market Q1 215 Q4 215 Q1 216 Vacancy Rate 13.1% 15.3% 15.3% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year Annual Change % 12.6% Quarterly Change Quarterly Forecast* Average (all classes) $27.75 $27.83 $27.98 CBD Class A $42.15 $46.4 $45.6 Suburban Class A $33.11 $33.2 $33.33 Share or view online at colliers.com/texas/houstonoffice

58 Vacancy & Availability Houston s citywide vacancy rate remained at 15.3% over the quarter, but it rose by 22 basis points from 13.1% in Q Over the quarter, the average suburban vacancy rate decreased marginally from 15.2% to 15.1%, and the average CBD vacancy rate increased from 15.5% to 15.9%. The average CBD Class A vacancy rate increased 4 basis point over the quarter from 11.3% to 11.7%, while the average CBD Class B vacancy rate increased 5 basis points from 25.8% to 26.3%. The average suburban Class A vacancy rate decreased 3 basis points from 16.3% to 16.%, and the average suburban Class B vacancy rate decreased 1 basis points between quarters from 15.% to 14.9%. Of the 1,697 existing office buildings in our survey, 132 buildings now have 1, SF or more of contiguous space available for lease or sublease. Further, 51 buildings have 2, SF or more of contiguous space available. Citywide, available sublease space totals 9.2 million SF or 4.% of Houston s total office inventory, but only 3.2 million SF of the available sublease space is currently vacant. Available sublease space now accounts for almost 2.% of all available space. Available Sublease Space 1,, 9,, 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, Absorption & Demand Houston s office market posted 1.2M SF of positive net absorption in Q1 216, three times as much as the 4, SF absorbed in the previous quarter. Most of the positive absorption can be attributed to the two new buildings that FMC Technologies completed in Generation Park, and the new Millenium Tower in Westchase that National Oilwell Varco pre-leased. Suburban Class A space posted the largest gain, with 1.1M SF of positive net absorption, while CBD Class B posted the largest loss, 49,322 SF of net negative absorption. Some of the larger tenants that moved into new space during Q1 included FMC Technologies (555,7 SF) moving into 1345 Lockwood in the Northeast Near submarket, Stage Stores, Inc (168,9 SF) moving into 2425 West Loop South in the West Loop/Galleria submarket, Texas Children s Health Plan (138,6 SF) moving into 633 West Loop South in the Bellaire submarket, and National Oilwell Varco (126, SF) moving into Millennium Tower II in the Westchase submarket. Rental Rates CBD Suburban Houston Total Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Although Houston s office market has softened, most submarkets saw an increase in rental rates over the quarter. This is the result of increasing operating expenses and new building deliveries which typically demand higher rental rates. The average asking rate for all classes in Houston increased from $27.83 per SF Job Growth & Unemployment (not seasonly adjusted) UNEMPLOYMENT 2/15 2/16 HOUSTON 4.4% 4.7% TEXAS 4.4% 4.3% U.S. 5.8% 5.2% JOB GROWTH 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% CBD Vacancy Annual Change # of Jobs Added HOUSTON.3% 9.K TEXAS 1.5% 172.7K U.S. 2.% 2.9M CBD vs. Suburban A OFFICE A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Vacancy Suburban Rents 2 Houston Research & Forecast Report Q1 216 Office Colliers International

59 AVAILABLE* * Under Construction Delivers 12/ PENNZOIL PLACE BUILDING NAME 717 TEXAS 6 TRAVIS BANK OF AMERICA CENTER NORTH BLDG SOUTH BLDG 811 LOUISIANA ONE SHELL PLAZA 69 MAIN BG GROUP PLACE 2 HOUSTON CENTER LYONDELLBASELL TOWER FULBRIGHT TOWER 5 HOUSTON CENTER ADDRESS 717 Texas Avenue 6 Travis Street 7 Louisiana Street 7 Milam Street 711 Louisiana Street 811 Louisiana Street 91 Louisiana Street 69 Main Street 811 Main Street 99 Fannin Street 1221 McKinney Street 131 McKinney Street 141 McKinney Street RBA / FLOOR / FLOORS 696,228 / 21,97/ 33 1,656,529 / 22,575 / 75 1,268,48 / 25, / ,337 / 2,523 / ,94 / 2, / ,423 / 33,35 / 26 1,228,923 / 24,572 / 5 1,56,658 / 22,35 / ,474 / 27, / 46 1,24,956 / 25,624 / 4 1,61,351 / 23,5 / 46 1,247,61 / 24,425 / 51 58,875 / 29,352 / 27 % LEASED 1% 95.8% 91.6% 75.5% 79.7% 3.2% 97.6% 5.9% 98.5% 58.4% 94.8% 91.2% 91.1% AVAILABLE SF 4, ,199 13,832 28, , , , ,648 15, ,783 64,21 255,569 51,969 MAX CONTIGUOUS SF 16,579 33,526 23,557 91,18 81,79 188, , ,873 81, ,333 12,485 51,86 18,994 QUOTED ** $48.49-$49.49 $49.32-$5.32 $44.6 $44.6 $41.82-$43.82 $48.42 $54.-$58. $56.91 $44.14 $44.46 $45.23 $46.79-$5.79 PARKING RATIO OWNER Hines Texas Tower Ltd M-M Properties Mann Enterprises Mann Enterprises Busycon Properties LLC Busycon Properties LLC Hines NPS JPMorgan Chase & Co JPMorgan Chase & Co JPMorgan Chase & Co Wells Real Estate Funds BUILDING NAME 11 FANNIN ONE CITY CENTRE HILCORP ENERGY TOWER 1 MAIN KINDER MORGAN BLDG. WELLS FARGO PLAZA HERITAGE PLAZA 11 LOUISIANA CENTERPOINT ENERGY ONE ALLEN CENTER PLAZA THREE ALLEN CENTER TWO ALLEN CENTER ADDRESS 11 Fannin Street 121 Main Street 1111 Main Street 1 Main Street 11 Louisiana Street 1 Louisiana Street 1111 Bagby Street 11 Louisiana Street 1111 Louisiana Street 5 Dallas Street 121 Louisiana Street 333 Clay Street 12 Smith Street RBA / FLOOR / FLOORS 1,385,212 / 27,21 / 49 62,122 / 21,266 / 29 46,6 / 17,678 / ,161 / 23,333 / ,3 / 28,51 / 32 1,721,242 / 25, / 71 1,212,895 / 26,652 / 51 1,327,882 / 23,6 / 55 1,81,251 / 22,968 / ,297 / 29,214 / ,533 / 24,6 / 35 1,194,719 / 25, /5 995,623 / 26,613 / 36 % LEASED 98.4% 83.2% 1% 98.% 1% 91.8% 98.9% 99.3% 97.7% 87.3% 87.5% 94.1% 97.6% AVAILABLE SF 124, ,18 45,634 24,321 27,746 63,92 31, , ,86 219,51 153,531 MAX CONTIGUOUS SF 54,99 63,13 28, ,66 137,99 22,982 24,723 56, ,352 9,467 28,35 QUOTED ** $47.4 $34.5-$35.5 $52.25 $ $54.6 $54.28 $47.44 $43.1 $46.3 $42.16 $45.65 $45.1 PARKING RATIO OWNER JMB Realty Corporation Accesso Partners, LLC Hilcorp Ventures Inc. Union Investment EPC Property Holdings New York State Common Brookfield Office Enterprise Products CenterPoint Energy, Inc. Brookfield Office Brookfield Office Brookfield Office Brookfield Office Real Estate Retirement Fund Properties, Inc. Partners L.P. Properties, Inc. Properties, Inc. Properties, Inc. Properties, Inc. BUILDING NAME ADDRESS RBA / FLOOR / FLOORS % LEASED AVAILABLE SF MAX CONTIGUOUS SF QUOTED ** PARKING RATIO OWNER 2,5, 2,, 1,5, 1,, 5, HESS TOWER NRG TOWER 131 FANNIN OFFICE TOWER 14 SMITH WEDGE INT L TOWER 151 McKinney Street 121 Fannin Street 131 Fannin Street 14 Smith Street 1415 Louisiana Street 844,763 / 3,5 /29 265, / 22,71 / ,143 / 26, / 24 1,266,714 / 24,578 / 5 52,475 / 18, / 43 1% 1% 92.1% 1% 68.9% 92, ,285 4,22 137,611 $37.74 $ $ H&R REIT Midway Companies/ Netrality Properties Chevron Corporation Wedge Commercial Lionstone Investments Properties Class A Class B Available Sublease Space Q1 216 Class A: 2,26,252 SF or 6.3% Class B: 251,56 SF or 2.4% AVAILABLE* 16 SMITH 16 Smith Street 1,98,399 / 23, / % 21,931 93,345 $43.43 Cullen Allen Holdings * *Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location of available space. **Rental rates listed are net + operating expenses. 15 LOUISIANA 15 Louisiana Street 1,157,69 / 25,263 / 4 1% 1.1 ChevronTexaco Corp. $46. $48. $42. $44. $38. $4. $34. $36. $3. $32. $26. $28. $22. $24. *Vacancy percentage includes direct and sublease space CBD Class A Rents 7 6 CBD Class A Vacancy 19.% 17.% 15.% 13.% 1% 9.% 7.% 5.% COLLIERS INTERNATIONAL 1233 West Loop South, Suite 9 Houston, TX to $27.98 per SF over the quarter, and increased from $27.75 per SF in Q The average suburban Class A rental rate increased from $33.2 per SF to $33.33 per SF over the quarter, and increased from $33.11 per SF in Q The average CBD Class A rental rate decreased over the quarter from $46.4 per SF to $45.6 per SF. Leasing Activity Houston s office leasing activity decreased 5.5% between quarters recording 2.1 million SF of transactions in Q When compared to the 3. million SF recorded in Q1 215, quarterly leasing activity has decreased significantly, falling by 3.3% in just one year. Q1 216 Select Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE Greenspoint Park II North Belt/Greenspoint 43,6 Bureau Veritas Jan-16 Total Plaza CBD 34,9 Pattern Energy Group Feb McKinney St CBD 22,92 Mitsubishi Motors Mar N Loop W Northwest 21,79 Catholic Charities of the Archdioces of Jan-16 Galveston-Houston 1 Southwest Center Southwest 19,384 HRSS LLP Feb-16 Dairy Ashford Plaza Katy Freeway 17,927 Shellpoint Mortgage Servicing 1 Jan-16 1 Colliers International transaction Sales Activity Houston s office investment sales activity has also slowed significantly recording only 12 transactions, with an average price of $172 per square foot. Below is a list of significant transactions and current investment opportunities. Q1 216 Significant Sales Transactions and Listings (1, SF or greater) BUILDING NAME SUBMARKET RBA 53 Memorial Dr & 1497 Town & Country Way Midtown Katy Freeway 5433 Westheimer West Loop/ Galleria 2625 Bay Area Blvd 2525 Bay Area Blvd NASA/Clear Lake 153, ,936 YEAR BUILT , / ,76 114, BUYER SELLER SALE PRICE $/SF CLOSED Equus Capital Partners, Ltd Parkway Properties, Inc. $6.M $198 Jan-16 Quasar Galleria Ltd Songy Highroads Undisclosed Mar-16 Metro Clear Lake Office Partners Shadow Creek Pky South 8, 29 Zt Shadow Creek Partners Sources: CoStar and Real Capital Analytics List Price $45.M List Price $25.M $162 Current Listing $312 Current Listing Skylines Now Available Online at colliers.com/texas/houstonskylines A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS MARCH A OFFICE BUILDINGS CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS MARCH 216 Available Sublease Space Central Business District Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX At a glance, view available space for eight of Houston s class a office skylines including CBD, Galleria, Energy Corridor, Greenway Plaza, North Belt, Sugar Land, The Woodlands, and Westchase. 3 Houston Research & Forecast Report Q1 216 Office Colliers International

60 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q1-216 Q4-215 Q1-216 Q4-215 CBD A 33 31,45,31 2,998, % 695, % 3,694, % 11.3% 211,35 6,656 $45.6 B 32 1,475,97 2,512, % 239, % 2,752, % 25.8% -49,13-42,453 $29.63 C 15 1,95, , %.% 388, % 36.% 6,6-2,557 $21.24 Total 8 43,21,195 5,899, % 935, % 6,834, % 15.5% 168,532-38,354 $39.13 SUBURBAN A ,956,492 13,148, % 1,525, % 14,673, % 16.3% 1,57, ,313 $33.33 B ,831,152 11,167, % 758,27.9% 11,925, % 15.% 13,46-359,72 $2.34 C 31 13,5,833 1,399,58 1.4% 5,886.4% 1,44, % 1.1% -42,322 58,881 $15.52 Total ,288,477 25,714, % 2,289, % 28,4, % 15.2% 1,118, ,122 $26.45 OVERALL A ,46,793 16,146, % 2,221, % 18,367, % 15.% 1,268,24 738,969 $34.71 B 978 9,36,249 13,679, % 998,25 1.1% 14,677, % 16.4% 54,33-41,525 $21 C ,596,63 1,787, % 5,886.% 1,793, % 12.1% -35,722 56,324 $15.79 Total ,39,672 31,613, % 3,225,59 1.4% 34,838, % 15.3% 1,286, ,768 $27.98 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q1-216 Q4-215 Q1-215 Q4-215 A 6 2,5,993 53, % 6,63.3% 537,6 26.2% 27.2% 21,19-3,891 $34.79 B 32 2,637,63 178, % 6,964.3% 185,655 7.% 6.2% -2,84-29,498 $3.2 C ,399 54, % 2,692.6% 57, % 12.1% 1,727-15,596 $21.57 Total 54 5,174, , % 15,719.3% 779, % 15.1% 1,996-48,985 $32.72 BAYTOWN B 3 186,5 5,551 3.%.% 5,551 3.% 3.% 697 $23.18 C 3 81,481.%.%.%.% 1,812 $7.95 Total 6 267,486 5, %.% 5, % 2.1% 2,59 $19.43 BELLAIRE A 6 1,91,536 8,82 7.4% 2,16 1.8% 1, % 1.5% 13,768-16,35 $26.62 B 19 2,631,259 18, %.% 18, % 4.9% -5,939-8,79 $23.18 C 5 327,2 51, %.% 51, % 16.3% 1,785-3,298 $16.68 Total 3 4,49, , % 2,16.5% 332, % 7.3% -35,386-28,123 $24.35 CONROE AND OUTLYING MONTGOMERY CO A 1 6,.%.%.%.% $. B 9 326,764 8,47 2.6%.% 8,47 2.6% 3.2% 2,149 $17.44 C 7 289,662 6, %.% 6, % 2.2% 931 $12.1 Total ,426 14, %.% 14, % 2.5% 2, $15.49 E. FORT BEND/SUGAR LAND A 17 3,399, , % 11,28.3% 199, % 7.% 39, $3.65 B 39 2,469, , % 2,115.8% 27,64 1.9% 12.2% 32,99 45 $21.64 C 3 24,593.%.%.%.% $. Total 59 6,73,24 438, % 31,143.5% 469, % 8.9% 71,384 1,398 $ Houston Research & Forecast Report Q1 216 Office Colliers International

61 Houston Suburban Office Market Summary - Continued DIRECT Q1-216 Q4-215 Q1-216 Q4-215 FM 196 A 12 2,589, , % 17,562.7% 128,796 5.% 4.7% -8,196-14,82 $27.57 B 72 4,294,86 748, % 12, % 85, % 18.7% -46,85-128,619 $17.5 C ,753 56, %.% 56, % 8.5% 1,864 3,857 $14.12 Total 15 7,572,43 915, % 119, % 1,35, % 13.% -53, ,844 $17.87 GREENWAY A 18 6,935,83 1,68, % 2,335.% 1,71, % 17.5% 155,897 89,234 $36.6 B 32 3,327, , % 7,251.2% 234, % 7.2% 4,415 5,895 $27.85 C ,718 72, %.% 72, % 13.% -3,51-1,673 $22.43 Total 66 1,796,44 1,369, % 9,586.1% 1,378, % 14.2% 156,811 93,456 $33.54 GULF FREEWAY/PASADENA A 1 22,76 3, %.% 3, % 13.7% -3,122 $3.59 B 37 2,128, , % 26,33 1.2% 368, % 17.4% 1,587 12,919 $22 C 32 1,226,984 1,32 8.2%.% 1,32 8.2% 8.3% 1,434 21,555 $18.58 Total 7 3,377,99 445, % 26,33.8% 472, % 14.1% 3,21 31,352 $2.2 I-1 EAST B 7 447,68 62, %.% 62, % 1.% -17,944 6,475 $14.84 C 5 267,13 99, %.% 99, % 37.2% -25, $12. Total ,81 161, %.% 161, % 2.1% -17,944-18,525 $14.1 KATY FREEWAY A 84 21,159,368 2,84, % 56, % 3,31, % 16.6% 199,75 342,983 $36.21 B 99 9,62,55 1,546, % 248, % 1,794, % 18.% -63,639-42,422 $23.99 C 32 1,539,378 51, % 2,494.2% 53, % 3.5% 687 1,68 $18.34 Total ,31,251 4,41, % 757,23 2.3% 5,158, % 16.4% 136, ,169 $3.55 KATY/GRAND PARKWAY WEST A 13 1,13,253 38, % 1,6.1% 31, % 27.9% 4,527 15,131 $28.8 B ,516 28, %.% 28, %.2% 9 $28.85 C 3 19,54.%.%.%.% $. Total 28 2,313, , % 1,6.1% 338, % 13.9% 5,427 15,131 $28.64 KINGWOOD/HUMBLE B 2 1,3,7 79, % 8,73.7% 87, % 8.4% 21,248-4,828 $26 C 4 143,5 14, 9.8%.% 14, 9.8% 1.3% 745 1,371 $17.95 Total 24 1,444,2 93, % 8,73.6% 11, % 8.6% 21,993-3,457 $2.65 NASA/CLEAR LAKE A 12 1,77, , % 29, % 157, % 5.3% -62,627 1,969 $24.66 B 48 3,259, , %.% 816, % 3.% 161,281 26,189 $17.89 C 2 66,49 15, %.% 15, % 15.8% ,498 $15.43 Total 8 5,69,959 1,49, % 29,537.5% 1,78, % 2.7% 97,758 32,656 $18.52 NORTH BELT/GREENSPOINT A 24 5,462,492 1,853, % 229,89 4.2% 2,82, % 37.% -59,521-44,452 $25.96 B 54 5,8,592 1,512, % 129, % 1,642, % 28.6% 13, ,599 $16.9 C 22 1,43, , %.% 316, % 2.2% -33,332 1,814 $12.86 Total 1 12,666,36 3,681, % 358, % 4,4, % 31.3% -78,874-24,237 $21.22 NORTHEAST NEAR AND NORTHEAST OUTLIER A 2 555,7 13.6%.% 13.6% 13.6% 555,7 $. B 4 181,618 22, %.% 22, % 13.6% 1,863 2,997 $2.59 C 2 56,562 9,33 16.%.% 9,33 16.% 12.8% -1,786 $14.71 Total 8 793,88 31,868 4.%.% 31,868 4.% 13.4% 555,777 $ Houston Research & Forecast Report Q1 216 Office Colliers International

62 Houston Suburban Office Market Summary - Continued DIRECT Q1-216 Q4-215 Q1-216 Q4-215 NORTHWEST AND NORTHWEST OUTLIER A 1 2,23, , % 35, % 672, % 27.1% -68, ,436 $23.6 B 78 5,977,38 971, % 5,146.1% 977, % 16.3% 55 25,752 $18.56 C 35 1,356,21 96,28 7.1%.% 96,28 7.1% 7.1% ,886 $13.24 Total 123 9,564,57 1,75, % 4,384.4% 1,745, % 17.5% -68,76 142,74 $2.9 RICHMOND/FOUNTAINVIEW B 13 78, , %.% 187, % 22.7% -1,22-12,667 $17.52 C ,819 67, %.% 67, % 12.2% -7,16 16,72 $16.1 Total 25 1,275, ,46 2.%.% 255,46 2.% 18.6% -17,362 4,53 $17.4 SAN FELIPE/VOSS A 3 1,72, , % 8,49.5% 392, % 22.7% -2,246 1,84 $35.43 B 32 3,242,4 274, % 7,725.2% 282,7 8.7% 8.9% 5,789 25,298 $24.24 Total 35 4,962, , % 16,134.3% 675, % 13.7% 3,543 27,12 $3.12 SOUTH A 1 8, 1,72 2.1%.% 1,72 2.1% 2.1% 5,485 $29.63 B ,159 35, %.% 35, % 7.8% 633 3,912 $2.39 C 5 194,42 71, %.% 71, % 36.6% $15.82 Total ,21 18, %.% 18, % 14.8% 633 9,397 $19.48 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,58 97, %.% 97, % 13.3% 5,34 7,474 $19.1 C 7 398,964 25,34 6.3% 7.2% 26,4 6.5% 8.2% 6,649 1, $2.57 Total 2 1,637, ,25 7.5% 7.% 123, % 8.3% 11,989 8,474 $19.54 SOUTHEAST B 17 1,554,646 11, %.% 11, % 6.4% -2, $18.41 C 5 194,326 5, %.% 5, % 1.9% -1,615 8,514 $27. Total 22 1,748,972 16, %.% 16, % 5.9% -3,661 8,688 $18.74 SOUTHWEST A 6 1,576,91 224, % 12,1.8% 236, % 15.2% 2,535-15,289 $18.22 B 66 6,255,637 1,118, % 6,594.1% 1,125, % 17.7% -19,726 69,153 $16.3 C 38 1,918, ,28 7.2%.% 138,28 7.2% 7.7% 9,758 1,882 $14.5 Total 11 9,751,74 1,481, % 18,694.2% 1,5, % 15.3% -7,433 55,746 $16.45 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% $. B 1 83,22 217, %.% 217, % 26.2% $16.5 C 1 21,396.%.%.%.% $. Total 13 1,1, , %.% 237, % 23.5% $16.5 WEST BELT A 28 3,577, , % 22,78.6% 699, % 19.9% 12,465 4,952 $31.72 B 31 1,878,743 25, % 5,69 2.7% 31, % 15.5% -1,764-39,934 $28 C 3 87,629.%.%.%.6% $. Total 62 5,543, , % 73, % 1,, % 18.1% 1,71 1,18 $27.24 WEST LOOP/GALLERIA A 45 16,671,482 2,79, % 157,283.9% 2,236, % 13.2% -31, ,172 $37.62 B 55 6,268, , % 59,271.9% 742, % 13.4% 95,61-4,784 $26.1 C 4 216,268 1,261.6%.% 1,261.6%.6% $2. Total 14 23,156,25 2,763, % 216,554.9% 2,979, % 13.1% 63,876-33,956 $ Houston Research & Forecast Report Q1 216 Office Colliers International

63 Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q1-216 Q4-215 Q1-216 Q4-215 A 32 8,725,11 1,193, % 412, % 1,65, % 17.% 247,673 4,85 $37.89 B 63 7,84, ,34 9.6% 14,859.2% 771, % 8.9% -56,923 54,938 $2.3 C 5 213,32 32, %.% 32, % 17.8% 5,553 $16.92 Total 1 16,778,634 1,982, % 427, % 2,49, % 13.2% 196,33 95,23 $31.52 THE WOODLANDS A 37 1,51, , % 54,36.5% 96, % 9.% 36, ,284 $35.95 B 7 4,398,619 42,49 9.5% 64, % 484,216 1% 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 Office Development Pipeline Houston s construction pipeline contains 6.3 million SF of office space, and 5.2% of the new space is pre-leased. Build-to-suit projects make up 42.6% of the pipeline, and the remaining 3.6M SF of spec office space under construction is approximately 17.1% pre-leased. Approximately 1.7 million SF, or 27.2% of the build-to-suit projects under construction, are pre-leased to energy industry companies. The table below includes office buildings with a RBA of 1, SF or more under construction. PRE- BUILDING NAME ADDRESS SUBMARKET SF LEASED DEVELOPER/CONTRACTOR EST. DELIVERY Phillips Citywest Blvd Westchase 1,1, 1.% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,56, % Hines Dec-16 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1.% Transwestern Oct-16 Energy Center V 915 N Eldridge Pky Katy Freeway West 524,744.1% Trammell Crow Company Apr-16 West Memorial Place Phase II Memorial Dr Katy Freeway West 428, % Skanska Commercial May-16 Development Future Amegy Bank HQ 1717 W Loop Fwy S Post Oak Park 38, 9.2% Hines Feb-17 Havenwood Office Park 257 Interstate 45 The Woodlands 24,47.2% Everson Developments, LLC Apr Katy Fwy 11 Katy Fwy Katy Freeway East 226, % Anslow Bryant Construction Jun-17 Ltd. Regions Financial Center 3773 Richmond Ave Greenway Plaza 21, 51.3% The Redstone Companies May-16 Wildwood Corporate Centre II 48 Wildwood Forest Dr The Woodlands 21,933.1% Archway Properties Jul-16 Kirby Collection 32 Kirby Dr Greenway Plaza 186,696.% Thor Equities Dec-17 Lockton Place 3657 Briarpark Dr Westchase 186, 1.% Triten Real Estate Partners May Saint James Place 1885 St James Pl West Loop/Galleria 158, % Nelson Murphree Legacy Apr-16 Partners The Post Oak 161 Hollyhurst Ln Galleria/Uptown 14, 1.% Tellepsen Builders Oct-17 Grandway West - Bldg 2 22 Grand Pky N Katy/Grand Parkway 124, % Transwern Apr-16 West The George R. Brown 7 Avenida De Las Americas CBD 115, 1.% Griffin Partners Inc. Oct-16 Deerwood Glen Phase III 446 Highway 225 Gulf Freeway/Pasadena 12, 82.6% Clay Development May-16 7 Houston Research & Forecast Report Q1 216 Office Colliers International

64 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA Q1 216 Highlights YEAR BUILT % LEASED AVAIL. SF RENT ($/ SF) Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 24,321 $ $54.95 OWNER New York State Common Retirement Fund 5 Houston Center 141 McKinney St CBD 58, % 51,969 $5.29 Wells Real Estate Funds BG Group Place 811 Main CBD 972, % 15,652 $56.91 NPS of Korea CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 1,946 $48. LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/Galleria 1,476, % 175,916 $48.5- Invesco Real Estate $ Post Oak Blvd 39 Post Oak Blvd West Loop/Galleria 34, % 43,65 $ Post Oak Building LLC $49.27 CityWestPlace CityWest Blvd Westchase 518, % 253,455 $46.49 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 176,513 $44.49 TIER REIT, Inc. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 14,243 $43.55 The Woodlands Development Company, L.P. Note: Available SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@colliers.com Houston led the nation in population growth in 215, adding more than 159, residents, according to the U.S. Census Burea. 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 Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houstonoffice 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

65 Research & Forecast Report HOUSTON OFFICE Q4 215 Houston s office market vacancy rate continues to rise amid more energy industry lay-offs Lisa Bridges Director of Market Research Houston Known as the Energy Capital of the World, Houston is home to most major energy companies and its economy is negatively affected by low oil prices. Houston s Q4 and YE 215 office market indicators are, in large part, a response to the dramatic drop in oil prices that occurred in Q4 214 and the subsequent reevaluation of and to adjustments in growth plans implemented by the upstream sector of the energy market. The mid and downstream players remain strong but tend to occupy less office space than the upstream companies. Further, other industries that provide services and goods to the energy industry, such as engineering, finance, manufacturing and law firms, are also feeling the effects, and the majority of these companies are office users. Market Indicators Relative to prior period NEW CONSTRUCTION UNDER CONSTRUCTION Annual Change Quarterly Change Quarterly Forecast* Although Houston s city-wide vacancy rate rose by only 8 basis points over the quarter, the annual rate rose significantly, increasing by 43 basis points from 11.1% in Q4 214 to 15.4% in Q The increase in the amount of sublease space placed on the market during 215 was a major factor. Houston s available sublease space more than doubled between Q4 214 and Q4 215, increasing from 3.8M SF to 8.M SF. The majority of this space was previously leased by growing energy companies addressing their future expansion needs. Houston s office leasing activity declined 53.5% over the year. Tenants are renewing existing leases, but in today s market, more companies are contracting, not expanding. Over 3.2M SF of new inventory delivered during Q4 215 and 58.3% of the space is pre-leased. Houston s office construction pipeline totals 8.M SF and 64.3% is pre-leased, which is significantly less than the 17.M SF under construction one year ago. The majority of the new space is located in suburban submarkets and is scheduled to deliver over the next 12 months. Houston s office market posted 652,9 SF of positive net absorption in Q This pushed year-end positive net absorption to 1.7M SF, an annual total less than previous year s average net quarterly absorption. Average office rental rates have remained relatively flat over the year. According to the U.S Bureau of Labor Statistics, the Houston metropolitan area created only 23,7 jobs between November 214 and November 215. This is an annual increase of just.8%, well below the 214 annual growth rate of 3.4% (97,5 jobs). Local economists have predicted 215 annual job growth will be around 2, jobs, however, we believe that number will be lower. *Projected Summary Statistics Houston Office Market Q4 214 Q3 215 Q4 215 Vacancy Rate % 15.4% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Suburban Asking Rents Per Square Foot Per Year Average (all classes) $27.52 $27.62 $27.83 CBD Class A $43.1 $42.13 $42.72 Suburban Class A $32.66 $32.88 $33.2

66 Vacancy & Availability Houston s citywide vacancy rate rose 8 basis points between quarters from 14.6% to 15.4%, and rose by 43 basis points from 11.1% in Q Over the quarter, the average suburban vacancy rate increased from 14.4% to 15.3%, and the average CBD vacancy rate decreased from 15.8% to 15.7%. The average CBD Class A vacancy rate decreased 1 basis point over the quarter from 11.2% to 11.1%, while the average CBD Class B vacancy rate fell 2 basis points from 27.3% to 27.1%. The average suburban Class A vacancy rate increased 14 basis points from 14.6% to 16.%, and the average suburban Class B vacancy rate increased 7 basis points between quarters from 14.7% to 15.4%. Of the 1,7 existing office buildings in our survey, 122 buildings now have 1, SF of contiguous space available for lease or sublease. Further, 44 buildings have 2, SF of contiguous space available, twice as many as in the previous quarter. Citywide, available sublease space totals 8. million SF or 3.5% of Houston s total office inventory, but only 3.7 million SF of the available sublease space is currently vacant. Job Growth & Unemployment (not seasonly adjusted) UNEMPLOYMENT 11/14 11/15 HOUSTON 4.3% 4.9% TEXAS 4.5% 4.5% U.S. 5.5% 4.8% JOB GROWTH Annual Change # of Jobs Added HOUSTON.8% 23.7K TEXAS 1.5% 18.4K U.S. 1.9% 2.7M Available Sublease Space Houston, TX 9,, 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, CBD Suburban Houston Total Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 CBD vs. Suburban A OFFICE 18.% 16.% 14.% 12.% 1.% 8.% 6.% Absorption & Demand Houston s office market posted 652,9 SF of positive net absorption in Q4 215, more than the 457,762 SF absorbed in the previous quarter but significantly less than the 3.M SF recorded in Q Suburban Class A space posted the largest gain, with 941,63 SF of positive net absorption, while suburban Class B posted the largest loss, of 47,167 SF of negative net absorption. 4.% 2.%.% A OFFICE RENTS Some of the larger tenants that moved into new space during Q4 included Statoil (43,677 SF) moving into CityWestPlace 2 in the Westchase submarket, Air Liquide USA, Inc. (234,5 SF) moving into 9811 Katy Freeway in the Katy Freeway submarket, Regions Bank (62,363 SF) moving into 3773 Richmond in the Greenway Plaza submarket, and Zachary Engineering Corp. (5, SF) moving into Westchase Park II in the Westchase submarket. Rental Rates Although Houston s office market has softened, the citywide average rental rates remained relatively flat over the quarter, increasing marginally from $27.62 per SF to $27.83 per SF. The average CBD Class A rental rate increased slightly from $42.7 per SF in Q3 215 to $43.41 per SF at year end while the average suburban Class A rental rate decreased somewhat from $33.23 per SF in Q3 215 to $32.8 per SF at the end of the year. $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q4 215 Office Colliers International

67 Leasing Activity Houston s Class A office leasing activity increased 74.4% between quarters recording 1.5 million SF of transactions in Q When compared to the 3.1 million SF recorded in Q4 214, leasing activity has decreased significantly, falling by 53.5% in just one year. Q4 215 Top Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE Post Oak Central Galleria/Uptown 524, Apache Corporation 6 Nov-15 Pennzoil Place South CBD 189, Bracewell & Giuliani LLP 1 Oct Main Street Midtown 139,424 St. Luke s Episcopal Health System 1 Oct-15 Energy Center IV Katy Freeway West 16,555 BASF Oct Main CBD 62, Kirkland & Ellis LLP 4 Dec-15 Westchase Park II Westchase 5, Zachary Engineering Corp Oct Richmond Ave Westchase 49,24 Ignite Restaurant Group Oct-15 1 Renewal 2 Expansion 3 Sublease 4 Pre-lease/proposed or under construction 5 Colliers International Transaction 6 Expansion Sales Activity Houston s office investment sales activity included 14 transactions, with an average price per square foot of $247. Listed below are a few significant transactions that closed in Q Q4 215 Significant Sales Transactions (1, SF or greater) BUILDING NAME SUBMARKET RBA BBVA 22 Post Oak Blvd Energy Center Three 935 N Eldridge Pky West Loop/ Galleria 1655 Space Center Blvd NASA/Clear Lake YEAR BUILT 326,2 213 Masaveu Post Oak Houston Delaware, LLC BUYER SELLER SALE PRICE $/SF CLOSED Stream Realty partners, L.P. Katy Freeway 546, ConocoPhillips Trammell Crow Company $275M approx. 149, Space Center Acquisition LLC $172M $527 Oct-15 $53 Nov-15 Parfinco Inc Dec-15 Sources: CoStar and Real Capital Analytics Bloomberg named Houston among the nation s richest and most productive cities in America, sitting in the No. 9 spot. Only two Texas cities are on the list. Dallas came in at No Houston Research & Forecast Report Q4 215 Office Colliers International

68 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q4-215 Q3-215 Q4-215 Q3-215 CBD A 32 31,43,71 2,661, % 798, % 3,46, % 11.2% 19, ,636 $43.41 B 32 9,888,74 2,461, % 223,38 2.3% 2,684, % 27.3% 11,396-12,467 $28.92 C ,861 42, %.% 42, % 46.8% -3,757-2,511 $18.71 Total 79 41,822,266 5,543, % 1,21, % 6,565, % 15.8% 27,31-272,614 $38.65 SUBURBAN A 358 9,911,3 12,637, % 1,917, % 14,555, % 14.6% 941,63 946,29 $32.8 B 95 79,468,453 11,467, % 744,52.9% 12,211, % 14.7% -47, ,21 $2.3 C ,662,675 1,421,54 1.4% 9,781.7% 1,431, % 12.2% 91,163-4,452 $15.39 Total ,42,131 25,526, % 2,671, % 28,198, % 14.4% 625,599 73,376 $26.32 OVERALL A ,954,74 15,299, % 2,716, % 18,16, % 13.7% 961, ,393 $34.71 B ,357,157 13,928, % 967,9 1.1% 14,895, % 15.9% -395, ,668 $21 C ,552,536 1,841, % 9,781.1% 1,851, % 14.1% 87,46-6,963 $15.79 Total ,864,397 31,69, % 3,693,81 1.6% 34,763, % 14.6% 652,9 457,762 $27.98 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q4-215 Q3-215 Q4-215 Q3-215 A 6 2,59,595 56, % 6,63.3% 566, % 27.3% -3,388 53,443 $33.58 B 32 2,636, ,68 6.1% 3,135.1% 164, % 5.1% -29,498-9,973 $29.43 C ,292 53, % 5, % 58, % 9.3% -15,596 21,363 $22.5 Total 53 5,162, , % 14,391.3% 789, % 14.4% -48,482 64,833 $31.85 BAYTOWN B 3 186,5 5,551 3.%.% 5,551 3.% 3.4% 697 $23.18 C 3 81,481.%.%.% 2.2% 1,812 $. Total 6 267,486 5, %.% 5, % 3.% 2,59 $23.18 BELLAIRE A 6 1,91,536 7, % 43,771 4.% 114,64 1.5% 9.% -16,35 4,341 $25.92 B 19 2,631, , % 2,324.1% 129, % 4.6% -8,79 7,816 $23.9 C 5 327,2 53, %.% 53, % 15.3% -3,298 $16.97 Total 3 4,49, , % 46,95 1.1% 297, % 6.7% -28,123 12,157 $23.64 CONROE AND OUTLYING MONTGOMERY CO A 2 17,161 47, %.% 47, % 44.% $24.53 B 9 429,851 28, %.% 28, % 6.6% $18.9 C 7 289,662 6, %.% 6, % 2.5% 931-2,781 $15.72 Total ,674 81, %.% 81, % 1.% 931-2,781 $21.25 E. FORT BEND/SUGAR LAND A 17 3,399, , % 14,756.4% 228, % 6.8% 993 2,625 $3.65 B 39 2,49, , % 22,2.9% 285, % 12.6% 16, ,256 $21.91 C 3 24,593.%.%.%.% $. Total 59 6,13, , % 36,956.6% 514, % 8.9% 17, ,881 $ Houston Research & Forecast Report Q4 215 Office Colliers International

69 Houston Suburban Office Market Summary - Continued DIRECT Q4-215 Q3-215 Q4-215 Q3-215 FM 196 A 12 2,589,817 13,38 4.% 17,562.7% 12,6 4.7% 4.1% -14,82 23,395 $27.61 B 7 4,199, , % 62,1 1.5% 8,13 19.% 16.% -128,619 28,12 $16.48 C ,855 62,27 8.5%.% 62,27 8.5% 9.1% 3,857 6,478 $16.52 Total 13 7,516,356 93,77 12.% 79, % 982, % 11.2% -138,844 57,885 $17.53 GREENWAY A 18 6,949,625 1,24, % 1,816.2% 1,251,8 18.% 1.8% 79,114 23,7 $34.83 B 34 3,451,98 243,28 7.% 8,91.3% 251, % 7.5% 5,895-36,49 $26.13 C ,718 69, % -.% 69, % 12.7% -1,673 37,55 $22.42 Total 68 1,933,441 1,552, % 19,726.2% 1,572, % 9.8% 83,336 24,13 $31.97 GULF FREEWAY/PASADENA A 1 22,76 3, %.% 3, %.% -3, $3.42 B 38 2,223, , % 26,33 1.2% 37, % 17.2% 12,919 9,13 $2.91 C 32 1,228,317 84,66 6.9%.% 84,66 6.9% 8.6% 21,555 7,769 $18.21 Total 71 3,474, , % 26,33.8% 458, % 14.1% 31,352 17,398 $2.2 I-1 EAST B 7 447,68 62, %.% 62, % 1.% -17,944 6,475 $14.84 C 5 267,13 99, %.% 99, % 37.2% -25, $12. Total ,81 161, %.% 161, % 2.1% -17,944-18,525 $14.1 KATY FREEWAY A 84 21,159,368 2,654, % 622, % 3,277, % 12.4% 55,96 423,31 $37.6 B 11 9,747,554 1,568, % 236, % 1,85, % 17.8% -68,27-146,299 $24.1 C 32 1,539,378 51, % 2,812.2% 54, % 4.2% 1,68 6,237 $18.2 Total ,446,3 4,274, % 861,83 2.7% 5,136, % 13.7% 493, ,239 $31.37 KATY/GRAND PARKWAY WEST A 13 1,13, , % 3,555.3% 315,8 27.9% 29.2% 15,131 17,667 $27.79 B ,991 1,87.2%.% 1,87.2%.2% $19.83 C 3 19,54.%.%.%.% $. Total 27 2,285, , % 3,555.2% 316, % 14.5% 15,131 17,667 $27.69 KINGWOOD/HUMBLE B 21 1,48,379 11,49 1.5% 8,73.8% 119, % 1.9% -4,828-1,169 $21.23 C 4 143,5 14, %.% 14, % 11.2% 1,371-1,492 $17.89 Total 25 1,191, , % 8,73.7% 133, % 1.9% -3,457-11,661 $2.85 NASA/CLEAR LAKE A 12 1,77,973 65,11 3.7% 29, % 94, % 5.5% 1,969-32,32 $24.59 B 48 3,285, , %.% 988, % 29.8% -1,64-26,83 $18.41 C 2 66,49 14, %.% 14, % 16.5% 4,498 9,498 $15.15 Total 8 5,716,777 1,157, % 29,537.5% 1,187, % 2.7% -4,173-49,625 $19.7 NORTH BELT/GREENSPOINT A 24 5,442,482 1,731, % 256, % 1,987, % 35.7% -44,455-11,231 $26.82 B 54 5,898,413 1,494, % 15,12 2.5% 1,644, % 23.6% -197,596-91,685 $16.46 C 22 1,43, ,89 2.2%.% 282,89 2.2% 2.3% 1,814-1,351 $11.97 Total 1 12,744,171 3,58, % 46,14 3.2% 3,915,77 3.7% 28.4% -24, ,267 $21.79 NORTHEAST NEAR AND NORTHEAST OUTLIER B 4 181,618 24, %.% 24, % 15.2% 2,997 $2.59 C 2 56,562 7, %.% 7, % 12.8% 558 $14.68 Total 6 238,18 31, %.% 31, % 14.7% 2, $ Houston Research & Forecast Report Q4 215 Office Colliers International

70 Houston Suburban Office Market Summary - Continued DIRECT Q4-215 Q3-215 Q4-215 Q3-215 NORTHWEST AND NORTHWEST OUTLIER A 1 2,23, , % 39, % 64, % 32.1% 111,436 32,457 $23.3 B 78 5,99, , % 17,873.3% 977, % 15.5% 25,752-5,68 $18.91 C 36 1,433,477 95, %.% 95, % 7.% 4,886 1,916 $13.24 Total 124 9,655,9 1,62, % 57,14.6% 1,677, % 18.1% 142,74-15,695 $2.18 RICHMOND/FOUNTAINVIEW B 13 78, , %.% 177, % 21.1% -12,667 2,836 $17.49 C ,819 6, %.% 6, % 15.5% 16,72 2 $14.84 Total 25 1,275, , %.% 237, % 18.9% 4,53 3,36 $16.69 SAN FELIPE/VOSS A 3 1,72, , % 8,49.5% 39, % 22.8% 1,84 15,819 $35.63 B 32 3,241, , % 3,847.1% 291,373 9.% 9.8% 25,298-25,246 $24.44 Total 35 4,962,17 669, % 12,256.2% 682, % 14.3% 27,12-9,427 $3.92 SOUTH A 1 8, 1,72 2.1%.% 1,72 2.1% 9.% 5,485 2,954 $29.63 B ,159 36, %.% 36, % 8.7% 3,912 5,415 $2.21 C 5 194,42 71,1 36.6%.% 71,1 36.6% 36.6% $15.82 Total ,21 19, %.% 19, % 16.1% 9,397 8,369 $2.23 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,58 1, % 2,662.4% 13, % 14.7% 7,474-1,434 $19.18 C 7 367,37 31, % 982.3% 32, % 9.2% 1, -1,235 $16.91 Total 2 1,65, ,7 8.2% 3,644.2% 135, % 9.% 8,474-11,669 $18.53 SOUTHEAST B 17 1,499,68 92, %.% 92, % 6.2% ,79 $19.95 C 6 272,443 58,9 21.6%.% 58,9 21.6% 24.7% 8,514-53,9 $. Total 23 1,772,51 151, %.% 151, % 9.1% 8,688-19,191 $19.95 SOUTHWEST A 6 1,583,72 227, % 12,1.8% 239, % 14.1% -15,289-22,81 $17.67 B 66 5,94,57 1,292, % 1,95.% 1,294, % 22.6% 48,258-24,61 $15.95 C 38 1,891, , %.% 175, % 9.5% 34,164-1,217 $14. Total 11 9,415,991 1,694,61 18.% 14,5.1% 1,78, % 17.7% 67,133-48,619 $15.98 SOUTHWEST FAR AND OUTLIER A 2 158,72 19, %.% 19, % 12.4% 1, $. B 1 83,22 217, %.% 217, % 26.2% $16.5 C 1 21,396.%.%.%.% $. Total 13 1,1, , %.% 237, % 23.5% 1, $16.5 WEST BELT A 28 3,576, , % 22,78.6% 712,5 19.9% 16.4% 4,4 33,81 $31.34 B 31 1,882,92 244, % 4,19 2.1% 284, % 13.1% -37,454-18,549 $21.22 C 3 87,629.%.%.%.6% $. Total 62 5,546, , % 62,97 1.1% 996, % 15.% 2,946 15,252 $27.63 WEST LOOP/GALLERIA A 45 16,67,76 1,975, % 253, % 2,229, % 11.9% -251, ,279 $36.51 B 55 6,268,275 74, % 66, % 87, % 12.7% -11,3-46,56 $26.4 C 4 216,268 1,261.6%.% 1,261.6%.6% $2. Total 14 23,155,249 2,717, % 32, % 3,38, % 12.% -262,69 66,773 $ Houston Research & Forecast Report Q4 215 Office Colliers International

71 Houston Suburban Office Market Summary - Continued DIRECT WESTCHASE Q4-215 Q3-215 Q4-215 Q3-215 A 31 8,333,3 899, % 59,45 6.1% 1,48, % 17.4% 4,85 88,484 $37.3 B 63 7,554,795 7, % 1,646.1% 711,64 9.4% 1.2% 57,538 9,491 $19.94 C 6 23,42 37, % 794.3% 38,9 16.5% 16.5% $18.5 Total 1 16,118,515 1,637, % 52, % 2,158, % 14.% 97,623 97,975 $3.86 THE WOODLANDS A 36 1,348, , % 67,912.7% 943,75 9.1% 4.4% 442,284 68,282 $35.68 B 71 4,52, ,26 1.% 79,81 1.8% 534,7 11.8% 9.4% -87,638 38,428 $24.44 C 5 335,395 1,.3%.% 1,.3%.3% $19.8 Total ,24,78 1,331,53 8.8% 147,722 % 1,478, % 5.9% 354,646 16,71 $29.66 Office Development Pipeline Houston s construction pipeline contains 8. million SF of office space, and 64.3% of the new space is pre-leased. Build-to-suit projects make up 6.4% of the pipeline, and the remaining 2.2M SF of spec office space under construction is approximately 21.9% pre-leased. Approximately 2.6 million SF, or 52.9% of the build-to-suit projects under construction, are pre-leased to energy industry companies. The table below includes office buildings with a RBA of 1, SF or more under construction. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER EST. DELIVERY FMC Technologies Campus Subsea Ln & W Lake Houston Northeast Near 1,7, 1% McCord Development, Inc Jan-16 Phillips Citywest Blvd Westchase 1,1, 1% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,56,658.% Hines Dec-16 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1% Transwestern Oct-15 Energy Center V 915 N Eldridge Pky Katy Freeway West 524,328.% Trammell Crow Company Apr-16 Millennium Tower II 1353 Richmond Ave Westchase 445, 1% BMS Management, Inc. Feb-16 Hilcorp Energy Tower 111 Main Street CBD 46,6 1% Hines Jan-16 West Memorial Place II Memorial Dr Katy Freeway West 389, % Skanska Commercial May-16 Development Future Amegy Bank HQ 1717 W. Loop South Post Oak Park 38, 74.2% Hines Feb-17 Havenwood Office Park 257 Interstate 45 The Woodlands 24,47.2% Everson Developments, LLC Nov-15 Regions Financial Center 3773 Richmond Ave Greenway Plaza 21, 44.7% The Redstone Companies Apr-16 Wildwood Corporate Centre II 48 Wildwood Forest Dr The Woodlands 21,933.% Archway Properties Jul-16 Kirby Collection 32 Kirby Dr Greenway Plaza 186,813.% Thor Equities Jul Saint James Place 1885 St James Pl West Loop/Galleria 165, 3.9% Nelson Murphree Legacy Mar-16 Partners The Post Oak 161 Hollyhurst Ln West Loop/Galleria 14, 1% Landry s Restaurants Sep-17 Grandway West II Grand Pky & Franz Rd Katy Freeway West 124, % Transwestern Apr-16 7 Houston Research & Forecast Report Q4 215 Office Colliers International

72 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED AVAIL. SF RENT Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 25,81 $54.6 New York State Common Retirement Fund Heritage Plaza 1111 Bagby St CBD 1,212, % 178,84 $54.4 Brookfield Office Properties BG Group Place 811 Main CBD 972, % 18,823 $56.91 NPS of Korea CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 5,986 $48.7 LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/ Galleria 39 Post Oak Blvd 39 Post Oak Blvd West Loop/ Galleria 1,476, % 117,818 $ $52.38 OWNER Invesco Real Estate 34, % 33,961 $48.73 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 28,838 $45.93 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 47,51 $44.49 TIER REIT, Inc. Note: Avail. SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property Q4 215 Highlights OFFICE 122.M SF 226. Million SF 89.4M SF 8.M SF A LEASING ACTIVITY 3.1 Million Square Feet % Annual 74.4% Quarterly % Current Vacancy 652,9 SF Current Net Absorption 14.7M SF Class A (54%) Class B (4%) Class C (6%) Q4 Q1 214 Q2 Q3 Q4 215 FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@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. Colliers International Market Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houston 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

73 Research & Forecast Report HOUSTON OFFICE Q3 215 Houston s office market impacted by energy industry layoffs Lisa Bridges Director of Market Research Houston Known as the Energy Capital of the World, Houston is home to more than 3,7 energy related companies which make up just over half of the local economy. Houston s Q3 215 office market indicators reflect the dramatic drop in oil prices that occurred in Q4 214 and the subsequent reevaluation and adjustments in growth plans implemented by the upstream sector of the energy market. The mid and downstream players remain very strong but tend to occupy less office space than the upstream companies. Market Indicators Relative to prior period NEW CONSTRUCTION Annual Change Quarterly Change Quarterly Forecast* Houston s office leasing activity declined 39.7% between quarters, recording only.7 million SF in Q When compared to the 3.4 million SF recorded 12 months ago in Q3 214, leasing activity decreased by 77.7%. Tenants are renewing existing leases, but in today s market, more companies are contracting, not expanding. UNDER CONSTRUCTION *Projected Over 1.4M SF of new inventory delivered during Q3 215 and 41.4% of the space was vacant. Houston s office construction pipeline totals 1.8M SF and 62.4% is pre-leased. The majority of the new space is located in suburban submarkets and is scheduled to deliver over the next 12 months. Houston s office market posted 338,584 SF of positive net absorption, pushing year-to-date positive net absorption to 891,825 SF. Average rental rates increased marginally, however submarkets with higher than average vacancy rates have slightly lower quoted rental rates than a year ago. Recent hikes in property taxes have increased operating expenses, thus increasing gross rental rates. The Houston metropolitan area created 38,4 jobs between August 214 and August 215, an annual increase of 1.3%. Sectors creating most of the jobs contributing to the annual increase include Legal Services and Accommodation & Food Services. Employment sectors that lost the most jobs over the year include Durable Goods Manufacturing and Real Estate & Rental and Leasing. Summary Statistics Houston Office Market Q3 214 Q2 215 Q3 215 Vacancy Rate % 14.5% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Subrurban Asking Rents Per Square Foot Per Year Average (all classes) $27.52 $27.62 $27.83 CBD Class A $43.1 $42.13 $42.72 Suburban Class A $32.66 $32.88 $33.2

74 Vacancy & Availability Houston s citywide vacancy rate rose 2 basis points between quarters from 14.3% to 14.5%, and rose by 23 basis points from 12.2% in Q Over the quarter, the average suburban vacancy rate increased from 14.2% to 14.4%, and the average CBD vacancy rate increased from 14.5% to 14.7%. The average CBD Class A vacancy rate increased 2 basis point over the quarter from 1.2% to 1.4%, while the average CBD Class B vacancy rate rose 1 basis points from 24.8% to 24.9%. The average suburban Class A vacancy rate increased 2 basis points from 14.4% to 14.6%, and the average suburban Class B vacancy rate increased 3 basis points between quarters from 14.4% to 14.7%. Of the 1,691 existing office buildings in our survey, 7 buildings have 1, SF of contiguous space available for lease or sublease. Further, 22 buildings have 2, SF of contiguous space available. Citywide, available sublease space totals 7.6 million SF or 3.4% of Houston s total office inventory, but only 3.3 million SF of the available sublease space is currently vacant. Available Sublease Space Houston, TX 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Absorption & Demand CBD Suburban Houston Total Houston s office market posted 338,584 SF of positive net absorption in Q3 215, slightly less than the 368,4 SF absorbed in the previous quarter. Suburban Class A space posted the largest gain, with 62,515 SF of positive net absorption, while suburban Class B posted the highest loss, with 178,238 SF of negative absorption. Some of the larger tenants that moved into new space during Q3 include Gardere Wynne Sewell LLP (74,1 SF) moving into 1 Louisiana in the CBD submarket, Vitol, Inc. (62,9 SF) moved into Kirby Grove in the Greenway Plaza submarket, and Microsoft (4,5 SF) moved into Town Centre One in the Katy Freeway submarket. Rental Rates Although Houston s office market has softened, the citywide average rental rates increased slightly over the quarter. The average CBD Class A rental rate increased 1.4% from $42.13 per SF in Q2 215 to $42.72 per SF, but decreased from $43.1 per SF in Q The average CBD Class B rental rate increased slightly from $28.14 per SF in Q2 215 to $$28.31 per SF. Job Growth & Unemployment (not seasonly adjusted) UNEMPLOYMENT 8/14 8/15 HOUSTON 5.1% 4.6% TEXAS 5.3% 4.4% U.S. 6.3% 5.2% JOB GROWTH Annual Change # of Jobs Added HOUSTON 1.3% 38.4K TEXAS 1.8% 212.4K U.S. 2.1% 2.9M CBD vs. Suburban A OFFICE 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% CBD Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. Suburban Vacancy The average suburban Class A and B rental rates increased marginally from $32.88 per SF in Q2 215 to $33.2 per SF and from $2.34 per SF to $2.41 per SF, respectively. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q3 215 Office Colliers International

75 Leasing Activity Houston s office leasing activity decreased 39.7% between quarters recording only.7 million SF of transactions in Q When compared to the 3.4 million SF recorded in Q3 214, leasing activity has decreased drastically, falling by 77.7% in just one year. Q3 215 Top Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE 11 Richmond Ave Westchase 554,385 WesternGeco 1 Sep West Loop South Bellaire 139,244 Texas Children s Health Plan Aug Katy Fwy Katy Freeway East 8, CEMEX USA 4 Jul West Loop South Bellaire 55,676 Jones and Carter 3,5 Aug McKinney St CBD 5,237 MRC Global 3 Aug-15 Deerwood Glen SH 225 Gulf Freeway/Pasadena 38,24 Brock Holdings III, Inc 5 Jul Post Oak Blvd Post Oak Park 32, Rockwater Energy Solutions, Inc Aug-15 Two Hughes landing The Woodlands 25,576 The Woodlands Development Company 5 Aug-15 Granite 29 Northwest Far 2,91 IDS Jul-15 One Riverway Riverway 19,478 EMC Corporation 1 Jul-15 1 Renewal 2 Expansion 3 Sublease 4 Pre-lease/proposed or under construction 5 Colliers International Transaction Sales Activity Houston s office investment sales activity included 3 transactions, with an average price per square foot of $129 and a median cap rate of 7.%. Listed below are a few significant transactions that are pending or closed in Q Q2 215 Significant Sales Transactions (1, SF or greater) BUILDING NAME SUBMARKET RBA Energy Center N Eldridge Pky One Commerce Green 515 W Greens Rd Comerica Bank 1 Sugar Creek Center Blvd YEAR BUILT BUYER SELLER SALE PRICE $/SF CLOSED Katy Freeway 548, 215 ConocoPhillips Trammell Crow Co $275M $51 Pending North Belt 34, Nabors Property Holdings LLC E Fort Bend/ Sugar Land 241 Fountain View San Felipe/ Voss Parkway Partners $47.5M $139 Sep , Equus Capital Partners, Ltd Parkway Partners $31.4M $16 Sep , / 1999 Jetall Companies, Inc American Spectrum Realty, Inc $15.4M $99 Jul-15 Sources: CoStar and Real Capital Analytics Houston ranked No. 1 on Forbes 215 America s Fastest-Growing Cities list. Forbes ranked metros Using data from Moody s Analytics, including 214 and 215 estimated population growth and 214 year-over-year job growth and gross metro product. 3 Houston Research & Forecast Report Q3 215 Office Colliers International

76 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT CBD Q3-215 Q2-215 Q3-215 Q2-215 A 31 3,78,6 2,579, % 612,669 2.% 3,192,56 1.4% 1.2% -68, ,92 $42.72 B 32 1,423,15 2,383, % 215, % 2,599, % 24.8% -12, ,193 $28.31 C 16 1,115, ,32 37.%.% 412,32 37.% 37.% $18.56 Total 79 42,247,52 5,375, % 828,445 2.% 6,24, % 14.5% -81, ,113 $37.9 SUBURBAN A ,51,933 1,869, % 1,871,93 2.1% 12,741, % 14.4% 62,515 1,73,683 $33.2 B ,359,571 11,62, % 585,711.7% 11,648, % 14.4% -178,238-19,62 $2.41 C ,57,632 1,77, % 13,311.8% 1,72, % 12.1% -4,452 21,459 $15.4 Total ,928,136 23,639, % 2,47, % 26,11, % 14.2% 419, ,54 $26.31 OVERALL A ,219,533 13,449, % 2,484, % 15,933, % 13.4% 533, ,763 $34.74 B ,782,676 13,446, % 81,487.9% 14,248, % 15.6% -19,75-66,795 $24 C ,173,429 2,119, % 13,311.1% 2,132, % 14.% -4,452 21,459 $15.74 Total ,175,638 29,15, % 3,299,37 1.5% 32,314, % 14.3% 338, ,427 $27.83 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q3-215 Q2-215 Q3-215 Q2-215 A 6 2,59, , % 6,63.3% 562, % 23.7% 53,443 58,347 $33.57 B 33 2,688, , % 3,135.1% 135,317 5.% 5.% ,138 $3.8 C ,292 1, % 2,51.5% 13, % 23.7% 21,363-1,651 $21.58 Total 55 5,274, , % 11,699.2% 81, % 13.9% 74,633 53,558 $32.12 BAYTOWN B 3 186,5 6, %.% 6, % 3.4% $23.18 C 3 81,481 1, %.% 1, % 2.2% $7.95 Total 6 267,486 8,6 3.%.% 8,6 3.% 3.% $19.76 BELLAIRE A 6 1,91,536 76,353 7.% 22,216 2.% 98,569 9.% 9.4% 4,341 7,19 $25.71 B 19 2,631, ,64 4.5% 2,324.1% 12, % 4.9% 7, $24.15 C 5 327,2 49, %.% 49, % 15.3% 2,247 $16.97 Total 3 4,49, ,88 6.% 24,54.6% 269,42 6.7% 7.% 12,157 8,843 $23.72 CONROE AND OUTLYING MONTGOMERY CO A 2 17,161 47, %.% 47, % 44.% $24.53 B 9 429,851 28, %.% 28, % 6.6% $18.9 C 7 289,662 7, %.% 7, % 2.5% -2, $15.72 Total ,674 82,679 1.%.% 82,679 1.% 1.% -2, $21.25 E. FORT BEND/SUGAR LAND A 17 3,399, , % 17,175.5% 229, % 7.4% 2,625 2,447 $29.89 B 39 2,397, , % 21,337.9% 336,22 14.% 15.3% 143,256 27,57 $22.75 C 3 24,593.%.%.%.% $. Total 59 6,1,63 527,51 8.8% 38,512.6% 566,13 9.4% 1.2% 163,881 29,54 $ Houston Research & Forecast Report Q3 215 Office Colliers International

77 Houston Suburban Office Market Summary - Continued DIRECT FM 196 Q3-215 Q2-215 Q3-215 Q2-215 A 22 3,353,57 114, % 27,68.8% 142, % 5.1% 28, ,97 $28.68 B 84 4,714, , % 7,61.2% 69, % 15.1% 22,432 46,892 $16.34 C ,2 65, %.% 65, % 9.6% 6,478-3,855 $16. Total 128 8,825, , % 35,281.4% 898, % 1.8% 57, ,134 $18.76 GREENWAY A 16 6,31,35 667, % 13,928.2% 681, % 11.2% 23,7-48,34 $33.45 B 33 3,314,4 216,71 6.5% 1,953.3% 227,24 6.8% 5.8% -36,49 1,888 $26.34 C , , % -.% 227, % 34.1% 37,55-4,798 $18.27 Total 68 1,393,45 1,111, % 24,881.2% 1,136, % 11.2% 24,13-42,25 $29.66 GULF FREEWAY/PASADENA A 1 22,76.%.%.% 2.3% 526 $27.59 B 37 2,188, , %.% 348, % 16.3% 9,13 4,836 $24 C 32 1,228,317 16, %.% 16, % 9.3% 7,769-9,637 $18.21 Total 7 3,439, , %.% 454, % 13.7% 17,398-4,81 $2.8 I-1 EAST B 7 447,68 44,592 1.%.% 44,592 1.% 11.4% 6,475 5,41 $14.75 C 5 267,13 99, %.% 99, % 27.8% -25, $12. Total ,81 143, %.% 143, % 17.5% -18,525 5,41 $13.86 KATY FREEWAY A 86 2,441,21 1,994, % 869, % 2,864, % 13.8% 264, ,95 $37.31 B 17 1,444,466 1,482, % 254, % 1,737, % 15.2% -146,299-44,458 $24.48 C 33 1,58,62 57,46 3.6% 7,541.5% 64, % 4.5% 6,237 7,38 $18.22 Total ,466,296 3,535,26 1.9% 1,132,36 3.5% 4,667, % 13.8% 124,61-64,55 $31.28 KINGWOOD/HUMBLE B ,52 75,56 8.8%.% 75,56 8.8% 8.% -6,834-7,752 $19.36 C 4 143,5 16, %.% 16, % 1.2% -1,492 3 $17.84 Total ,2 91, %.% 91, % 8.4% -8,326-7,452 $19.9 NASA/CLEAR LAKE A 12 1,77,973 67,7 3.8% 29, % 96,67 5.5% 3.6% -32,32-8,213 $24.44 B 49 3,337, , % 6,434.2% 922, % 28.1% 16,247 36,331 $18.67 C 2 66,49 18, %.% 18, % 17.9% 9,498-2,51 $15.44 Total 81 5,769,177 1,91, % 35,971.6% 1,127, % 19.4% -6,575 25,617 $19.3 NORTH BELT/GREENSPOINT A 24 5,442,36 1,814, % 242, % 2,56, % 33.7% -224,32-1,629 $28.76 B 58 5,999,273 1,261,448 2% 145, % 1,47, % 21.9% -95,556-6,374 $16.51 C 22 1,43, , %.% 284,74 2.3% 19.6% -1,351 17,942 $11.99 Total 14 12,844,585 3,36, % 387,99 3.% 3,748, % 26.6% -329, ,61 $22.96 NORTHEAST NEAR AND NORTHEAST OUTLIER B 4 181,618 27, %.% 27, % 15.2% 4,838 $2.59 C 2 56,562 7, %.% 7, % 13.8% 558 3,946 $14.7 Total 6 238,18 34, %.% 34, % 14.9% 558 8,784 $18.49 NORTHWEST AND NORTHWEST OUTLIER A 27 4,867,73 1,296, % 67, % 1,364, % 29.3% 61,2-15,556 $26.76 B 93 7,294,756 1,114, % 56,594.8% 1,171, % 15.1% -68,47 26,888 $18.48 C 38 1,49,761 1, %.% 1, % 6.9% 1,916 1,61 $13.16 Total ,653,247 2,511, % 124,475.9% 2,636, % 19.3% -5,354-77,67 $ Houston Research & Forecast Report Q3 215 Office Colliers International

78 Houston Suburban Office Market Summary - Continued DIRECT Q3-215 Q2-215 Q3-215 Q2-215 RICHMOND/FOUNTAINVIEW B 13 78, , %.% 164, % 21.5% 2,836 9,298 $17.62 C ,591 76, %.% 76, % 15.5% 2 8,174 $14.78 Total 25 1,276, , %.% 241, % 19.2% 3,36 17,472 $16.79 SAN FELIPE/VOSS A 3 1,72, , % 7,49.4% 392, % 23.7% 15,819-29,896 $36.4 B 32 3,232,526 3, % 7,564.2% 38,41 9.5% 9.% -16,976-22,722 $24.71 Total 35 4,953, , % 14,973.3% 7, % 14.1% -1,157-52,618 $31.65 SOUTH A 1 8, 7,187 9.%.% 7,187 9.% 12.7% 2,954-4,2 $29.63 B ,159 4, %.% 4, % 9.8% 5,415 3,484 $2.79 C 5 194,42 71,1 36.6%.% 71,1 36.6% 36.6% $15.82 Total ,21 118, %.% 118, % 17.2% 8, $2.52 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,35 227,4 26.% 2,662.3% 23, % 25.2% -1,434-7,884 $18.57 C 7 367,37 31, % % 33, % 8.8% -1,235 8,42 $16.5 Total 21 1,725, , % 5,137.3% 263, % 14.6% -11, $18.12 SOUTHEAST B 17 1,499,68 93,22 6.2%.% 93,22 6.2% 7.4% -3, $19.29 C 6 272,443 67, %.% 67, % 5.% -53,9-4 $. Total 23 1,772,51 16, %.% 16, % 6.9% -57, $19.29 SOUTHWEST A 6 1,583,72 211, % 12,1.8% 224, % 12.7% -22,81 21,663 $17.7 B 66 5,94,57 1,289, % 4,345.1% 1,293, % 21.4% -24,61 136,32 $15.82 C 4 2,7, , %.% 179, % 8.6% -1,217-3,81 $13.95 Total 112 9,594,866 1,68, % 16,445.2% 1,696, % 17.2% -48, ,164 $15.86 SOUTHWEST FAR AND OUTLIER A 8 539, , % 3,555.7% 16, % 11.9% 124, $26.78 B 15 1,98, ,21 2.%.% 219,21 2.% 2.% 23,43 $17.22 C 2 51,396.%.%.%.% $. Total 25 1,689, , % 3,555.2% 38, % 17.6% 124,793 23,699 $26.23 WEST LOOP/GALLERIA A 45 16,657,8 1,754, % 222, % 1,977, % 12.1% 113,279-28,546 $36.6 B 56 6,379, , % 28,459.4% 827, % 12.2% -46,56-82,171 $26.31 C 4 216,268 1,261.6%.% 1,261.6%.6% $2. Total 15 23,253,99 2,555,53 1% 251, % 2,86, % 12.% 66, ,717 $34.3 WESTCHASE A 31 8,336,417 1,133, % 285,22 3.4% 1,418, % 18.2% 1,823 21,396 $36.7 B 62 7,527, ,124 1.% 6,42.1% 76, % 1.2% 9,491 52,489 $2.3 C 7 257,772 45, % 794.3% 46, % 18.1% -1,778 $17.12 Total 1 16,121,632 1,933,68 12.% 292, % 2,225, % 14.5% 11,314 72,17 $3.17 THE WOODLANDS 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 $ Houston Research & Forecast Report Q3 215 Office Colliers International

79 Office Development Pipeline Houston s construction pipeline contains 1.8 million SF of office space, and 63.9% of the new space is pre-leased. Build-to-suit projects make up 51.5% of the pipeline, and the remaining 5.2M SF of spec office space under construction is approximately 25.4% pre-leased. Approximately 5.5 million SF, or 5.9% of the build-to-suit projects under construction, are pre-leased to energy industry companies. The table below includes office buildings under construction with a RBA of 5, SF or more. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER EST. DELIVERY FMC Technologies Campus Subsea Ln & W Lake Houston Northeast Near 1,7, 1.% McCord Development, Inc Jan-16 Phillips Citywest Blvd Westchase 1,1, 1.% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,56,658.% Hines Dec-16 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1.% Transwestern Oct-15 Energy Center Four 925 N Eldridge Pky Katy Freeway West 6, 1.% Trammell Crow Company Oct-16 Energy Center V 915 N Eldridge Pky Katy Freeway West 524,328.% Trammell Crow Company Apr-16 Air Liquide Center- South 9811 Katy Fwy Katy Freeway East 452, % MetroNational Nov-15 Millennium Tower II 1353 Richmond Ave Westchase 445, 1.% BMS Management, Inc. Feb-16 Hilcorp Energy Tower 111 Main Street CBD 46,6 1.% Hines Jan Buffalo Speedway 3737 Buffalo Speedway Ave Greenway Plaza 4, 28.8% PM Realty Group Oct-15 West Memorial Place II Memorial Dr Katy Freeway West 389, % Skanska Commercial Development Future Amegy Bank HQ 1717 W. Loop South Post Oak Park 38, 74.2% Hines Feb-17 ExxonMobil - Hughes Landing 1735 Hughes Landing Blvd The Woodlands 318,17 1.% The Woodlands Development Company Three Hughes landing 178 Hughes Landing Blvd The Woodlands 32,815.% The Woodlands Development Company ExxonMobil - Hughes Landing 1725 Hughes Landing Blvd The Woodlands 331, % The Woodlands Development Company One Grove Street 2925 Richmond Ave Greenway Plaza 248, % Midway Companies Oct-15 Havenwood Office Park 257 Interstate 45 The Woodlands 24,47.2% Everson Developments, LLC Nov-15 CityCentre Five 825 Town & Country Katy Freeway East 227, % Midway Companies /215 Wildwood Corporate Centre II 48 Wildwood Forest Dr The Woodlands 21,933.% Archway Properties Jul-16 Remington Square - Ph II 1713 W Sam Houston Pky N FM 196/Hwy 249 2,.% Stream Realty Partners, L.P. Oct-15 Regions Financial Center 3773 Richmond Ave Greenway Plaza 21, 44.7% The Redstone Companies Apr Saint James Place 1885 St James Pl West Loop/Galleria 165,.% Nelson Murphree Legacy Partners Grandway West II Grand Pky & Franz Rd Katy Freeway West 13,2 16.2% Transwestern Mar-16 Gateway at Spring Valley 99 Katy Fwy Katy Freeway East 95, % Ersa Grae Corporation Oct-15 Lennar Office Building/ Bldg Greens Pky Greenspoint/ N Belt 68,95 1.% KDC Real Estate Devel. & Invt. Oct-15 May-16 Oct-15 Nov-15 Oct-15 Mar-16 7 Houston Research & Forecast Report Q3 215 Office Colliers International

80 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED AVAIL. SF Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 25,81 $54.1 New York State Common Retirement Fund Heritage Plaza 1111 Bagby St CBD 1,212, % 12,964 $54.4 Brookfield Office Properties BG Group Place 811 Main CBD 972, % 15,652 $56.91 NPS of Korea CityCentre Two 818 Town & Country Blvd Katy Freeway 149, % 5,986 $48.7 LaSalle Investment Management Williams Tower 28 Post Oak Blvd West Loop/ Galleria 39 Post Oak Blvd 39 Post Oak Blvd West Loop/ Galleria RENT ($/ SF) 1,476, % 67,37 $ $52.38 OWNER Invesco Real Estate 34, % 33,961 $48.73 Post Oak Building LLC CityWestPlace CityWest Blvd Westchase 518, % 28,69 $45.93 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 69,775 $49.24 TIER REIT, Inc. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 23,635 $43.55 The Woodlands Development Company, L.P. Note: Avail. SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property Q3 215 Highlights OFFICE 118.2M SF Million SF 89.8M SF 15.2M SF 1.8M SF LEASING ACTIVITY Million Square Feet % Annual 39.7% Quarterly % Current Vacancy 338,584 SF Current Net Absorption Class A (53%) Class B (4%) Class C (7%) Q3 Q4 Q1 214 Q2 Q3 215 FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@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. Colliers International Market Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houston 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

81 Research & Forecast Report HOUSTON OFFICE Q2 215 Houston s office market leasing activity hit hard by oil price slump Lisa Bridges Director of Market Research Houston Houston is known as the Energy Capital of the World, home to more than 5, energy related companies that make up just over half of the local economy. Houston s Q2 215 office market indicators reflect the dramatic drop in oil prices that occurred in Q4 214 and the subsequent reevaluation and adjustments in growth plans implemented by the upstream sector of the energy market. The mid and downstream players remain very strong but tend to occupy less office space than the upstream companies. Market Indicators Relative to prior period NEW CONSTRUCTION Annual Change Quarterly Change Quarterly Forecast* Houston s office leasing activity decreased 35.8% between quarters, recording only 1.8 million SF in Q When compared to the very strong 5.5 million SF recorded 12 months ago in Q2 214, leasing activity decreased by 67.5%. UNDER CONSTRUCTION *Projected Over 2.1M SF of new inventory delivered during Q Fortunately, only 6.% was vacant. Houston s office construction pipeline totals 12.3M SF and 61.5% of the new product is pre-leased. The majority of the space is located in suburban submarkets and is scheduled to deliver over the next 12 months. For the first time in 5 years, Houston s office market posted negative net absorption, primarily due to tenants relocating to new buildings and companies placing excess space on the sublease market. For the most part, average rental rates remained flat, however, the average CBD Class A rental rate increased 2.7% from $41.96 per SF in Q1 215 to $42.32 per SF. The Houston metropolitan area created 62,3 jobs between May 214 and May 215, an annual increase of 2.1% over the prior year s job growth. Sectors creating most of the jobs contributing to the annual increase include Professional & Business Services, mostly in legal services. Summary Statistics Houston Office Market Q2 214 Q1 215 Q2 215 Vacancy Rate 11.6% 13.% 14.1% Net Absorption (Million Square Feet) New Construction (Million Square Feet) Under Construction (Million Square Feet) Class A Vacancy Rate CBD Subrurban Asking Rents Per Square Foot Per Year Average $27.42 $27.39 $27.38 CBD Class A $42.18 $41.96 $42.32 Suburban Class A $32.89 $32.88 $32.88

82 Vacancy & Availability Houston s citywide vacancy rate rose 11 basis points between quarters from 13.% to 14.1%, and rose by 25 basis points from 11.6% in Q Over the quarter, the average suburban vacancy rate increased 1 basis points from 13.% to 14.%, while the average CBD vacancy rate increased 15 basis points from 12.6% to 14.1%. The average CBD Class A vacancy rate increased 5 basis point over the quarter from 9.5% to 1.%, while the average CBD Class B vacancy rate rose 4 basis points from 18.3% to 22.7%. The average suburban Class A vacancy rate increased 16 basis points from 12.3% to 13.9%, and the average suburban Class B vacancy rate increased 5 basis points between quarters from 13.8% to 14.3%. Of the 1,673 existing office buildings in our survey, 6 buildings have 1, SF of contiguous space available for lease or sublease. Further, 21 buildings have 2, SF of contiguous space available. Citywide, available sublease space totals 7.4 million SF or 3.3% of Houston s total office inventory, but only 2.8 million SF of the available sublease space is currently vacant. Available Sublease Space Houston, TX Job Growth & Unemployment (not seasonly adjusted) UNEMPLOYMENT 5/14 5/15 HOUSTON 4.9% 4.2% TEXAS 5.% 4.1% U.S. 6.1% 5.3% JOB GROWTH Annual Change # of Jobs Added HOUSTON 2.1% 62.3K TEXAS 2.5% 287K U.S. 2.2% 3.1M CBD vs. Suburban 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, CBD Suburban Houston Total Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 A OFFICE 14.% 12.% 1.% 8.% 6.% 4.% Absorption & Demand Houston s office market posted 525, SF of negative net absorption in Q The last time Houston s office market posted negative absorption was in Q2 21. Suburban Class A space posted the largest gain, with 522, SF of positive net absorption, the majority of which occurred in The Woodlands submarket. Some of the larger tenants that moved into new space during Q2 include ExxonMobil Company (5, SF) moving into the third and last phase of its new north Houston corporate campus in The Woodlands submarket, Sasol (171,475 SF) moved into Woodbranch Plaza IV in the Katy Freeway submarket, Nabors Industries (98,4 SF) moved into One Commerce Green in the North Belt submarket, and Air Liquide USA Inc. (73,12) moved into a new building in the Katy Freeway submarket. Rental Rates Although Houston s office market has softened, the citywide average Class A and Class B rental rates remained flat over the quarter. Surprisingly, the average CBD Class A rental rate increased 2.7% from $41.96 per SF in Q1 215 to $42.32 per SF. In contrast, the average CBD Class B rental rate fell slightly by %. 2.%.% CBD Vacancy Suburban Vacancy A OFFICE RENTS $5. $45. $4. $35. $3. $25. $2. $15. $1. $5. $. The average suburban Class A rental rate remained steady while the average suburban Class B rental rate increased marginally over the quarter. CBD Rents Suburban Rents 2 Houston Research & Forecast Report Q2 215 Office Colliers International

83 Leasing Activity Houston s office leasing activity decreased 35.8% between quarters, recording only 1.8 million SF in Q When compared to the 5.5 million SF recorded in Q2 214, leasing activity has decreased an incredible 67.5% in just one year. Q2 215 Top Office Lease Transactions BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE 4 Greenway Plaza Greenway Plaza 255,413 Transocean Ltd. 1 May-15 West Memorial Place Ph II Katy Freeway West 158,5 IHI E&C 4 Jun Fannin CBD 26,198 Virtis May-15 Westchase Park Plaza Westchase 23,891 Crum & Forster Apr West Loop South Post Oak Park 2,272 Heritage Texas Properties Jun-15 Katy Ranch Ph. I Katy Fwy Southwest Outlier 17,464 US Silica Company 4 Jun North Fwy Greenspoint/N Belt 15,179 Fred Loya Jun-15 Town Centre I Katy Freeway Easy 15, Southcross Energy Apr-15 Air Liquide Center - South Katy Freeway East 13,667 Brunei Energy Inc. 4 Apr-15 Brookhollow Central I North Loop West 12,937 Total Renal Care Inc. Apr-15 1 Renewal 2 Expansion 3 Sublease 4 Pre-lease/proposed or under construction Sales Activity Houston s office investment sales activity included 2 transactions, with an average price per square foot of $222 and an average cap rate of 6.87%. Listed below are a few significant transactions that closed in Q Q2 215 Significant Sales Transactions (1, SF or greater) BUILDING NAME SUBMARKET RBA Westgate II & III 1732 Katy Fwy and Park Row YEAR BUILT Katy Freeway 412, Griffin Capital Essential Asset REIT, Inc. 81 Travis CBD 22, / 214 Mason Creek I 2142 Merchants Way 4 North Belt 4 N Sam Houston Pky E Sources: CoStar and Real Capital Analytics BUYER SELLER SALE PRICE $/SF CLOSED LPC Realty Advisors I, Ltd Katy Freeway 135, Nicola Crosby Real Estate Investments North Belt 234, / 213 Hartman Short Term Income Properties XX, Inc. Transwestern $134M $325 Apr-15 Goddard Investment $46.3M $21 Apr-15 Group, LLC TA Realty $38.5M $284 Jun-15 Parkway Properties, Inc. $1.1M $43 May-15 CITY TO WATCH Houston was named the top market to watch for commercial real estate investment in 215, according to the newest PricewaterhouseCoopers Emerging Trends in Real Estate, an annual report based on surveys and interviews with more than 1, real estate investors, fund managers, developers and other industry professionals. 3 Houston Research & Forecast Report Q1 215 Office Colliers International

84 Houston Office Market Summary (CBD, Suburban, & Overall) DIRECT Q2-215 Q1-215 Q2-215 Q1-215 CBD A 31 3,288,63 2,423,841 8.% 61,626 2.% 3,25,467 1.% 9.5% -142,547 7,431 $42.32 B 34 11,43,527 2,351,21 2.6% 235, % 2,586, % 2.% -497,193-1,6,889 $28.14 C 17 1,174, , %.% 447, % 38.1% 8,566 $18.49 Total 82 42,866,22 5,222, % 837,392 2.% 6,6, % 12.8% -639,74-99,892 $37.38 SUBURBAN A ,29,726 1,664, % 1,217,24 1.4% 11,881, % 12.3% 522, ,37 $32.88 B ,574,99 1,843, % 51,834.7% 11,354, % 14.% -411, ,67 $2.41 C ,181,551 1,77, % 8,888.5% 1,779, % 12.5% 4, ,718 $15.33 Total ,46,376 23,278, % 1,736,926 % 25,15, % 13.% 115,163 1,217,632 $25.83 OVERALL A ,578,789 13,88, % 1,818,83 1.6% 14,97, % 11.6% 379, ,738 $34.65 B ,977,626 13,194, % 746,6.8% 13,941, % 14.7% -99,72-481,282 $22 C ,355,983 2,218, % 8,888.1% 2,227, % 14.6% 4, ,284 $15.63 Total ,912,398 28,51, % 2,574, % 31,75, % 13.% -524, ,74 $27.38 Houston Suburban Office Market Summary DIRECT ALLEN PARKWAY (MIDTOWN) Q2-215 Q1-215 Q2-215 Q1-215 A 4 1,598,33 154,77 9.7%.% 154,77 9.7% 13.3% 58,347-8,794 $31.62 B 33 2,914,56 438, % 2,25.1% 44, % 15.% -2,438 1,817 $26.4 C , , % 5,193 % 124, % 23.4% -1,651-2,232 $22.89 Total 53 5,38, , % 7,443.1% 72, % 15.4% 54, $27.12 BAYTOWN B 3 186,5 6, %.% 6, % 3.4% $19.18 C 3 81,481 1, %.% 1, % 2.2% $7.95 Total 6 267,486 8,6 3.%.% 8,6 3.% 3.% $16.66 BELLAIRE A 6 1,91,536 87,799 8.% 15, % 12,91 9.4% 1.1% 7,19 15 $25.83 B 19 2,63, ,42 4.8% 2,324.1% 128, % 4.9% ,63 $24.7 C 5 327,2 49, %.% 49, % 16.% 2,247 3,927 $16.97 Total 3 4,48, , % 17,435.4% 281,577 7.% 7.2% 8,843-19,553 $24.7 CONROE AND OUTLYING MONTGOMERY CO A 2 17,161 47, %.% 47, % 44.% $24.53 B 9 429,851 28, %.% 28, % 6.6% $18.9 C 7 289,662 4, %.% 4, % 1.7% 32 $15.71 Total ,674 79, %.% 79, % 9.7% 32 $21.25 E. FORT BEND/SUGAR LAND A 17 3,399, ,85 6.8% 18,531.5% 25, % 7.4% 2,447 82,12 $29.33 B 37 2,226,93 38, % 17,379.8% 325, % 15.9% 28,791 11,81 $22.71 C 3 223,446 17, % 1,461.7% 18, % 8.5% -2,311 $2 Total 57 5,848, , % 37,371.6% 595,16 1.2% 1.7% 31,238 91,592 $ Houston Research & Forecast Report Q1 215 Office Colliers International

85 Houston Suburban Office Market Summary - Continued DIRECT Q2-215 Q1-215 Q2-215 Q1-215 FM 196 A 14 2,577, , % 26,279 % 142, % 5.8% 32,5 7,478 $29.79 B 89 4,915, , % 1,166.2% 779, % 16.1% 13,99 74,532 $16.53 C ,2 72, %.% 72, % 9.% -3,855-13,168 $15.8 Total 125 8,25,71 957, % 36,445.4% 993, % 12.5% 312,14 68,842 $18.34 GREENWAY A 16 6,31,35 687, % 17,47.3% 74, % 1.4% -48,34-211,12 $34.6 B 33 3,314,4 18, % 9,984.3% 19, % 6.1% 1,888 14,164 $25.93 C , , % -.% 264, % 34.4% -4,798 1,553 $18.33 Total 67 1,37,886 1,132, % 27,454.3% 1,16, % 1.8% -42,25-195,385 $29.86 GULF FREEWAY/PASADENA A 1 22, %.% % 2.3% $27.59 B 38 2,236, , % 7,16.3% 44, % 18.3% 4, ,87 $2.42 C 32 1,228, , %.% 113, % 8.5% -9,637 5,92 $16.48 Total 71 3,487, , % 7,16.2% 519, % 14.8% -4,81 178,899 $19.42 I-1 EAST B 7 447,68 55, %.% 55, % 12.5% 1,95 29 $14.65 C 5 267,13 74, %.% 74, % 27.8% -6, $12. Total ,81 129, %.% 129, % 18.2% 1,95-5,971 $13.86 KATY FREEWAY A 84 19,78,923 2,322, % 457, % 2,78, % 9.6% 29,121 16,921 $35.82 B 15 1,185,6 1,383, % 27,611 2.% 1,591, % 11.7% -44, ,9 $24.25 C 33 1,58,137 7, % 1,44.1% 71, % 5.% 6,54-8,271 $18.13 Total ,546,66 3,776, % 666, % 4,443, % 1.% -368,57 36,74 $3.11 KINGWOOD/HUMBLE B ,52 62,29 7.3% 6,382.7% 68,672 8.% 7.1% -7,752-2,266 $19.38 C 4 143,5 14, %.% 14, % 1.4% 3-78 $17.93 Total ,2 76, % 6,382.6% 83, % 7.6% -7,452-3,46 $18.98 NASA/CLEAR LAKE A 12 1,77,973 47, % 1,311.1% 49, % 2.3% -8,213 27,93 $24.65 B 48 3,278, ,2 28.2% 2,61.1% 928, % 29.4% 35,977-28,168 $18.86 C 2 66,49 118, %.% 118, % 17.5% -2,51 11,868 $15.37 Total 8 5,71,27 1,92, % 3,912.1% 1,96, % 19.6% 25,263 11,63 $19.16 NORTH BELT/GREENSPOINT A 24 5,44,831 1,573, % 44,1.8% 1,617, % 31.6% 13,569-66,8 $29.2 B 57 5,961,888 1,66, % 125, % 1,192,97 2.% 19.2% -47,852-98,586 $15.57 C 22 1,43, , %.% 274, % 2.8% 17,942 6,35 $11.8 Total 13 12,85,995 2,914, % 169, % 3,83, % 24.7% 73, ,36 $23.31 NORTHEAST NEAR AND NORTHEAST OUTLIER B 4 181,618 27, %.% 27, % 17.9% 4,838-5,147 $2.92 C 2 56,562 7, %.% 7, % 2.8% 3,946 $14.32 Total 6 238,18 35,5 14.9%.% 35,5 14.9% 18.6% 8,784-5,147 $17.88 NORTHWEST AND NORTHWEST OUTLIER A 27 4,889,129 1,362, % 72,39 1.5% 1,434, % 22.3% -1,412-13,388 $26.38 B 92 7,232,325 1,47, % 46,941.6% 1,94, % 15.5% 26,627-17,78 $18.63 C 39 1,569,24 18,25 6.9%.% 18,25 6.9% 7.2% 5, $13.46 Total ,69,694 2,517, % 119,25.9% 2,637, % 16.8% -68,692-12,522 $22. 5 Houston Research & Forecast Report Q1 215 Office Colliers International

86 Houston Suburban Office Market Summary - Continued DIRECT Q2-215 Q1-215 Q2-215 Q1-215 RICHMOND/FOUNTAINVIEW B ,51 167, %.% 167, % 22.8% 9,298 13,7 $17.66 C ,591 79, %.% 79, % 17.2% 5,467-17,59 $14.68 Total 25 1,272, , %.% 247, % 2.6% 14,765-4,583 $16.78 SAN FELIPE/VOSS A 3 1,72, , % 11,356.7% 48, % 22.% -29,896-84,986 $35.92 B 32 3,232, , % 9,112.3% 291,425 9.% 8.3% -22,722-11,32 $24.19 Total 35 4,953, , % 2,468.4% 699, % 13.1% -52,618-96,36 $3.93 SOUTH A 1 8, 1, %.% 1, % 7.4% -4,2 $29.63 B ,159 45, %.% 45, % 1.6% 3,484-1,12 $2.78 C 5 194,42 71,1 36.6%.% 71,1 36.6% 36.6% $15.83 Total ,21 127, %.% 127, % 17.1% ,12 $19.84 SOUTH MAIN/MED CENTER A 1 485,.%.%.%.% - B ,96 193, % 2,662.3% 196, % 24.7% -7,884-3,167 $2.58 C 8 475,436 55, %.% 55, % 13.4% 8,42 3,61 $15.57 Total 21 1,725, , % 2,662.2% 252, % 14.6% $18.7 SOUTHEAST B 16 1,28,956 89, %.% 89, % 7.4% 652 $19.39 C 5 213,543 8,514 4.%.% 8,514 4.% 4.% 42, $. Total 21 1,422,499 97, %.% 97, % 6.9% , $19.39 SOUTHWEST A 6 1,583,72 23, % 2,1.1% 25, % 14.1% 16,992 31,433 $17.65 B 63 5,634,229 1,17, %.% 1,17, % 19.6% 88, ,867 $15.56 C 4 2,7, , %.% 195, % 8.4% -21,9 34,164 $13.73 Total 19 9,288,588 1,416, % 2,1.% 1,418, % 16.2% 84,86 312,464 $15.63 SOUTHWEST FAR AND OUTLIER A 6 288,446 3, % 3, % 34, % 12.% 269 1,172 $25.46 B 16 1,121, , %.% 219, % 25.3% 43 $18.78 C 2 51,396.%.%.%.% $. Total 24 1,461,677 25, % 3,555.2% 253, % 21.1% 699 1,172 $23.17 WEST LOOP/GALLERIA A 44 16,564,567 1,726, % 228, % 1,955, % 1.1% -28,388-7,34 $35.95 B 56 6,42, , % 17,871.3% 792, % 11.3% -67,17-11,688 $26.61 C 4 216,268 1,261.6%.% 1,261.6%.6% 1,8 $2.73 Total 14 23,21,19 2,51, % 246, % 2,748, % 1.3% -347,495-17,714 $33.27 WESTCHASE A 31 8,336,417 1,23, % 269,68 3.2% 1,499, % 18.2% 21, ,55 $38.45 B 62 7,528, , % 9,49.1% 796, % 1% 34,817 73,63 $19.98 C 7 257,772 45, % 794.3% 46, % 17.4% -1,778 1,861 $18.21 Total 1 16,122,842 2,63, % 279, % 2,342, % 14.9% 54,435-3,41 $3.11 THE WOODLANDS 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 $ Houston Research & Forecast Report Q1 215 Office Colliers International

87 Office Development Pipeline Houston s construction pipeline contains 12.3 million SF of office space, and 61.5% of the total is pre-leased. Build-to-suit projects make up 6.% of the pipeline, and the remaining 4.9M SF of spec office space under construction is approximately 28.3% pre-leased. Approximately 6.9 million SF, or 85.% of the build-to-suit projects under construction, are pre-leased to energy industry companies. The table below includes office buildings under construction with a RBA of 45, SF or more. BUILDING NAME ADDRESS SUBMARKET SF PRE- LEASED DEVELOPER EST. DELIVERY FMC Technologies Campus Subsea Ln & W Lake Houston Northeast Near 1,7, 1.% McCord Development, Inc Jan-16 Phillips Citywest Blvd Westchase 1,1, 1.% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,56,658.% Hines Dec-16 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1.% Transwestern Oct-16 Energy Center Four 925 N Eldridge Pky Katy Freeway West 6, 1.% Trammell Crow Company Sep-16 Energy Center V 915 N Eldridge Pky Katy Freeway West 524,386.% Trammell Crow Company Apr-16 Noble Energy Center II SH 249 & Louetta Rd FM 196/Hwy , 1.% Trammell Crow Company Jul-15 Air Liquide Center- South 9811 Katy Fwy Katy Freeway East 452, % MetroNational Nov-15 Millennium Tower II 1353 Richmond Ave Westchase 445, 1.% BMS Management, Inc. Feb-16 Hilcorp Energy Tower 111 Main Street CBD 46,6 1.% Hines Jan Buffalo Speedway 3737 Buffalo Speedway Ave Greenway Plaza 4, 38.5% PM Realty Group Aug-15 West Memorial Place II Memorial Dr Katy Freeway West 389,79 4.7% Skanska Commercial May-16 Development Future Amegy Bank HQ 1717 W. Loop South Post Oak Park 38, 74.2% Hines Feb-17 ExxonMobil - Hughes Landing 1735 Hughes Landing Blvd The Woodlands 318,17 1.% The Woodlands Development Apr-16 Company Three Hughes landing 178 Hughes Landing Blvd The Woodlands 32,815.% The Woodlands Development Nov-15 Company ExxonMobil - Hughes Landing 1725 Hughes Landing Blvd The Woodlands 331, % The Woodlands Development Apr-16 Company Enclave Place 1414 Enclave Katy Freeway West 3,97.% PM Realty Group Aug-15 Kirby Grove 2925 Richmond Ave Greenway Plaza 248, % Midway Companies Sep-15 Havenwood Office Park 257 Interstate 45 The Woodlands 24,47.2% Everson Developments, LLC Nov-15 CityCentre Five 825 Town & Country Katy Freeway East 227, % Midway Companies Sep-15 Remington Square - Ph II 1713 W Sam Houston Pky N FM 196/Hwy 249 2,.% Stream Realty Partners, L.P. Oct-15 Regions Financial Center 3773 Richmond Ave Greenway Plaza 185, 32.8% The Redstone Companies Apr-16 San Felipe Place 2229 San Felipe Allen Parkway/Midtown 167, % Hines Aug Saint James Place 1885 St James Pl West Loop/Galleria 165,.% Nelson Murphree Legacy Mar-16 Partners Chasewood Crossing Three 1935 State Highway 249 FM 196/Hwy ,.% Greenwood Corporations Dec-15 Katy Ranch Phase I Katy Fwy Southwest Outlier 151, % Freeway Properties Aug-15 Park Ten Center - Phase II 162 Park Row Katy Freeway West 15,.% Lincoln Property Company Aug-15 Nalco Champion Headquarters 775 Highway 9A E Fort Bend/Sugar Land 133, 1.% Nalco Holding Co Aug-15 The Offices at Sam Houston 123 W Sam Houston Dr Northwest Far 18, % D'Agostino Companies Jul-15 Gateway at Spring Valley 99 Katy Fwy Katy Freeway East 95, % Ersa Grae Corporation Oct-15 River Oaks District - Office 4444 Westheimer Rd Post Oak Park 92, % Oliver McMillan Jul-15 Lennar Office Building/ Bldg Greens Pky Greenspoint/ N Belt 68,95 1.% KDC Real Estate Devel. & Invt. Oct-15 Memorial Green Memorial Dr Katy Freeway East 49, % Midway Companies Jun-16 Det Norske Veritas- Phase Colonial Pky Katy Freeway West 47,25 1.% Chambers Street Properties Aug-15 7 Houston Research & Forecast Report Q1 215 Office Colliers International

88 Quoted gross rental rates for existing top performing office buildings BUILDING NAME ADDRESS SUBMARKET RBA YEAR BUILT % LEASED AVAIL. SF Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 258,563 $53.87 New York State Common Retirement Fund Bank of America Center 7 Louisiana St CBD 1,268, % 28,673 $52.28 M-M Properties BG Group Place 811 Main CBD 972, % 14,632 $55.16 NPS of Korea CityCentre Three 842 W Sam Houston Pky N Katy Freeway 12, % 2,594 $48.7 Midway T & C Land Investors Williams Tower 28 Post Oak Blvd West Loop/ 1,476, % 13,814 $5.36 Invesco Real Estate Galleria BBVA Compass Plaza 22 Post Oak Blvd West Loop/ 312, % 54,793 $48.3 RS Post Oak Perennial LP Galleria CityWestPlace CityWest Blvd Westchase 518, % 21,465 $48.93 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 69,775 $49.24 TIER REIT, Inc. RENT ($/ SF) Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 56,435 $ $46.28 Note: Avail. SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property OWNER The Woodlands Development Company, L.P. Q2 215 Highlights OFFICE 115.6M SF 22.9 Million SF 9.M SF 15.3M SF 12.3M SF LEASING ACTIVITY Million Square Feet % Annual 35.8% Quarterly % Current Vacancy -524,577 SF Current Net Absorption Class A (52%) Class B (41%) Class C (7%) Q2 Q3 Q4 214 Q1 Q2 215 FOR MORE INFORMATION Lisa Bridges Director of Market Research Houston lisa.bridges@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. Colliers International Market Houston 1233 Address, West Loop Suite South, # Suite 9 Houston, Address, Texas Suite 7727 # colliers.com/<<market>> colliers.com/texas/houston 8 North American Research & Forecast Report Q4 214 Office Market Outlook Colliers International

89 Q1 215 OFFICE MARKET HOUSTON OFFICE MARKET RESEARCH & FORECAST REPORT HOUSTON OFFICE MARKET INDICATORS Q1 214 Q1 215 CITYWIDE NET ABSORPTION 2.3M 1.2M CITYWIDE AVERAGE 11.8% 12.5% CITYWIDE AVERAGE $27.1 $27.35 CITYWIDE DELIVERED 2.2M 3.5M A CBD $39.96 $41.96 SUBURBAN $33.5 $32.88 A Houston CBD 1.8% 9.5% SUBURBAN 8.6% 12.2% Houston s Office Market Beginning to Feel the Effects of the Oil Price Slump Houston s office market indicators have begun to reflect the dramatic drop in oil prices that occurred in Q This is no surprise as just over one-half of Houston s economy is directly tied to the energy industry. Available sublease space increased by 33% between quarters from 4.5M SF to 6.M SF. The good news is the majority of new inventory and projects under construction are significantly pre-leased and most proposed projects have been put on hold. This, coupled with a relatively low vacancy rate, should help keep Houston s office market fairly healthy until energy prices rise. Over 3.5M SF of new inventory delivered during Q1 215 and about 68.% of the new inventory is pre-leased including 1.5M SF of ExxonMobil s North Houston campus. Houston s office construction pipeline is still over 14.M SF of which 65.% is pre-leased. The majority of the space is located in suburban submarkets and is scheduled to deliver in 215. Houston s office market recorded 1.2M SF of positive absorption in Q1 215, about one-half of what was recorded in the previous quarter. The citywide average rental rate increased slightly between quarters;.9% from $27.12 to $27.35 per SF, and from $27.1 per SF one year ago. The average CBD Class A rental rate increased over the quarter; however, the average Class A suburban rental rate decreased. The Houston metropolitan area created 96,7 jobs between February 214 and February 215, an annual increase of 3.4% over the prior year s job growth. Sectors creating most of the jobs contributing to the annual increase include mining and logging, arts, entertainment & recreation, and accommodation & food services. Houston s unemployment rate fell from 5.4% one year ago to 4.3%. JOB GROWTH & UNEMPLOYMENT (Not Seasonally Adjusted) UNEMPLOYMENT 2/14 2/15 HOUSTON 5.4% 4.3% TEXAS 5.7% 4.3% U.S. 7.% 5.8% ANNUAL JOBS JOB GROWTH CHANGE ADDED HOUSTON 3.4% 96.7K TEXAS 3.2% 362.4K U.S. 2.4% 3.3M

90 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% $5. $45. $4. $35. $3. $25. $2. $15. $1. CBD VS. Suburban Class A Office Vacancy $5. $. CBD Vacancy Class A Office Rents CBD Rents Suburban Vacancy Suburban Rents & AVAILABILITY Houston s citywide vacancy rate rose 9 basis points between quarters from 11.6% to 12.5%, and rose by 7 basis points from 11.8% in Q Between quarters, the average suburban vacancy rate increased 9 basis points from 12.% to 12.9%, while the average CBD vacancy rate increased 1 basis points from 1.6% to 1.7%. The average CBD Class A vacancy rate remained steady between quarters at 9.5%, and the average CBD Class B vacancy rate rose 6 basis points from 1.3% to 1.9%. The average suburban Class A vacancy rate increased 23 basis points from 9.9% to 12.2%, and the average suburban Class B vacancy rate decreased 2 basis points between quarters from 13.8% to 13.6%. Of the 1,666 existing office buildings in our survey, 55 buildings have 1, SF of contiguous space available for lease or sublease. Further, 2 buildings have 2, SF of contiguous space available. Citywide, available sublease space totals 6. million SF or 2.8% of Houston s total office inventory, but only 1.9 million SF of the available sublease space is vacant. ABSORPTION & DEMAND Houston s office market posted 1.2 million SF of positive net absorption in Q1 215, about one-half of the 2.5 million SF posted in the previous quarter Suburban Class A space posted the largest gain, with 67,117 SF of positive net absorption, the majority of which occurred in The Woodlands submarket. Some of the larger tenants that moved into new space during Q1 include ExxonMobil Company (1,5, SF) moving into the second phase of its new north Houston corporate campus in The Woodlands submarket, EOG Resources, Inc. (248,411 SF) moving into Heritage Plaza in the CBD submarket, Shell Oil (336, SF), Academy Sports and Outdoors, LTD (2, SF) and PGS (139,778 SF) which both moved into buildings located in the Katy Freeway submarket. S Although Houston s office market has softened somewhat, the average citywide rental rate increased slightly between quarters. The average citywide rental rate for Class A space rose marginally, while the average citywide Class B rental rate increased 1.7% from $2.64 per SF to $2.98 per SF between quarters. The average CBD Class A rental rate decreased 1.9% from $42.75 per SF in Q4 214 to $41.96 per SF. The average suburban Class A rental rate rose 1.6% from $32.36 per SF in Q4 214 to $32.88 per SF. The average CBD Class B rental rate decreased marginally while the average suburban Class B rental rate rose 1.9% from $19.94 per SF to 2.31 per SF between quarters. QUOTED GROSS S FOR EXISTING TOP PERFORMING OFFICE BUILDINGS Building Name Address Submarket RBA Year Built % Leased Avail. SF Rent Ow ner Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 258,563 New York State Common $53.87 Retirement Fund Bank of America Center 7 Louisiana St CBD 1,268, % 183,924 $52.28 M-M Properties BG Group Place 811 Main CBD 972, % 144,264 $55.16 NPS of Korea CityCentre Three Williams Tow er 842 W Sam Houston Pky N Katy Freew ay 12, % 2,594 $48.7 Midw ay T & C Land Investors West 28 Post Oak Blvd Loop/Galleria 1,476, % 95,34 $5.38 Invesco Real Estate BBVA Compass Plaza 22 Post Oak Blvd West Loop/Galleria 312, % 54,793 $51.3 RS Post Oak Perennial LP CityWestPlace CityWest Blvd Westchase 518, % 176,193 $48.93 Parkw ay Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 69,775 $49.24 TIER REIT, Inc. Tw o Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 6,684 $ The Woodlands Development $48.92 Company, L.P. Note: Avail. SF includes direct and sublet space as w ell as any future available space listed. Source: CoStar Property COLLIERS INTERNATIONAL P. 2

91 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET LEASING ACTIVITY Houston s office leasing activity decreased 34% between quarters, recording 2.1 million SF in Q The majority of the transactions were renewals and pre-leases in buildings currently under construction. Q1 215 TOP OFFICE LEASE TRANSACTIONS Building Name/Address Submarket SF Tenant Lease Date Twelve Greenway Plaza Greenway Plaza 191,893 Direct Energy 1 Feb-15 Five Greenspoint Place North Belt 113,81 Swift Energy Co. Mar-15 Westway Plaza Westchase 64,18 Superior Energy Services Inc. 4 Jan Richmond Ave Greenway Plaza 62,363 Regions Bank 4 Feb-15 Four Greenspoint Place North Belt 4, HealthHelp LLC Jan-15 Briar Forest Crossing Westchase 39,471 US Physical Therapy 1 Mar-15 Ashford Crossing II Katy Freeway 34,611 RigNet Inc. 1 Jan-15 River Oaks District West Loop/Galleria 33,5 U.S. Capital Advisors LLC 4 Jan Post Oak Blvd West Loop/Galleria 29,99 Morgan Stanley Feb-15 Energy Center II Katy Freeway 27,259 CARBO Ceramics 1 Mar-15 Sugar Creek Place I E Fort Bend/Sugar Land 25,986 Sabic America's Jan-15 Post Oak Central West Loop/Galleria 23,864 Cox Radio 1 Feb-15 Kirby Grove Greenway Plaza 62,93 Vitol Inc. 4 Feb Louisiana CBD 19, Houston Municipal Employees Pension System Jan-15 1 Renewal 2 Expansion 3 Sublease 4 Pre-lease/proposed or under construction SALES ACTIVITY Houston s office investment sales activity included 2 transactions, with an average price per square foot of $236 and an average cap rate of 7.2%. Listed below are a few significant transactions that closed in Q Q1 215 SIGNIFICANT SALES TRANSACTIONS (1, SF or greater) Building Name Submarket RBA Year Built Buyer Seller Sale Price $/SF Closed C&J Energy Services Rogerdale Westchase 125, 214 American Realty Capital Global Trust, Inc. InSite Commercial Real Estate $34.3M $275 3/215 Honeywell 125 W Sam Houston Pky Westchase 155, Klein Family Parkway Properties $28M $18 2/215 Westgate 2 & Katy Fwy Katy Freeway 411,5 214 Griffin Capital Miller Global Properties $135M $328 Under Contract Sources: CoStar and Real Capital Analytics COLLIERS INTERNATIONAL P. 3

92 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET HOUSTON OFFICE MARKET SUMMARY (CBD, SUBURBAN & OVERALL) Class DIRECT # of Bldgs. Total Rate Rate Total Q1-215 Q4-214 Q1-215 Q4-214 CBD A 31 3,286,336 2,422,7 8.% 46,85 1.5% 2,882,92 9.5% 9.5% 7, ,648 $41.96 B 32 1,469,292 1,76,95 1.3% 63,688.6% 1,139, % 1.3% -56,889 22,969 $28.33 C 17 1,174, , %.% 447, % 38.9% 8,566 $18.21 Total 8 41,93,6 3,945,9 9.4% 524, % 4,47, % 1.6% -4, ,617 $37.19 Suburban A ,343,365 9,73,685 1% 1,,47 1.2% 1,74, % 9.9% 67,117 1,694,597 $32.88 B ,257,823 1,274, % 41,76.5% 1,676, % 13.8% 51,93 795,512 $2.31 C ,557,555 1,825, % 5,593.3% 1,831, % 13.2% 115,581-79,6 $15.66 Total ,158,743 21,174, % 1,47,769.8% 22,582, % 12.% 1,287,61 2,41,59 $25.74 Overall A ,629,71 11,495, % 1,461,32 1.3% 12,957, % 9.5% 677,548 1,81,245 $34.68 B ,727,115 11,351, % 465,394.5% 11,816, % 13.4% 445,14 818,481 $2.98 C ,731,987 2,273, % 5,593.% 2,279, % 15.2% 124,147-79,6 $15.89 Total ,88,83 25,12, % 1,932,37.9% 27,52, % 11.5% 1,246,79 2,549,126 $27.35 HOUSTON SUBURBAN OFFICE MARKET SUMMARY Class DIRECT # of Bldgs. Total Rate Rate Total Q1-215 Q4-214 Q1-215 Q4-214 Allen Parkway (Midtown) A 4 1,598,33 26, % 6,822.4% 213, % 12.8% -8,794 3,873 $32.87 B 32 2,62,56 118, % 1,23.% 119, % 4.8% 6,69 8,63 $28.75 C 15 53, , % % 12, % 23.5% -2,232-6,767 $22.82 Total 51 4,721, , % 1,537.2% 453, % 9.5% -4,417 5,169 $3.4 Baytown B 3 186,5 6, %.% 6, % 3.4% $17.18 C 3 81,481 1, %.% 1, % 2.2% $7.95 Total 6 267,486 8,6 3.%.% 8,6 3.% 3.% $14.34 Bellaire A 6 1,91,536 9, % 62, % 152, % 8.1% -63,614 19,472 $25.99 B 19 2,63,415 12,75 4.6% 7,445.3% 128,15 4.9% 4.% -23,63 1,453 $22.57 C 5 327,2 52,17 16.%.% 52,17 16.% 17.2% 3,927 $17.41 Total 3 4,48, ,1 6.5% 69, % 332, % 6.2% -83,317 2,925 $23.45 Conroe and Outlying Montgomery Co A 2 17,161 47, %.% 47, % 44.% $24.53 B 1 511,85 28, %.% 28, % 5.5% -6,444 $18.9 C 7 289,662 4, %.% 4, % 1.7% $15.71 Total 19 98,628 8, %.% 8, % 8.8% -6,444 $21.25 E. Fort Bend/Sugar Land A 17 3,399, , % 79, % 314, % 9.9% 21,5 5,949 $29.29 B 38 2,35, , % 15, % 433, % 19.3% 11,81-26,894 $23.1 C 3 223,446 17, % 1,461.7% 18, % 7.4% -2, $19.5 Total 58 5,928, , % 187,32 3.2% 767, % 13.5% 3,54 24,543 $25.3 FM 196 A 13 2,262,736 17, % 29, % 137, % 6.1% 13 17,88 $29.52 B 91 5,7, , %.% 844, % 18.3% 74,532 24,919 $16.19 C ,848 65, %.% 65, % 7.1% -13,35 8,642 $15.68 Total 125 8,7,312 1,17, % 29,842.4% 1,47, % 13.8% 61,33 51,441 $17.32 COLLIERS INTERNATIONAL P. 4

93 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET HOUSTON SUBURBAN OFFICE MARKET SUMMARY - CONTINUED Class Greenway DIRECT # of Bldgs. Total Rate Rate Total Q1-215 Q4-214 Q1-215 Q4-214 A 16 6,287, ,92 1.1% 24,684.4% 656, % 7.1% -211,12 4,16 $34.75 B 34 3,451,98 22, % 9,839.3% 23, % 7.1% 14,164 28,181 $25.76 C , , % -.% 259, % 34.6% 1,553-8,984 $17.83 Total 68 1,493,465 1,112, % 34,523.3% 1,146, % 9.1% -195,385 59,33 $29.9 Gulf Freeway/Pasadena A 1 22, %.% % 2.3% $27.59 B 38 2,236,248 42, % 7,16.3% 49, % 15.9% 69,612-16,397 $2.26 C 32 1,228,317 14, %.% 14, % 12.6% 5,92-26,62 $16.92 Total 71 3,487,271 57, % 7,16.2% 514, % 14.6% 119,74-42,999 $19.47 I-1 East B 7 447,68 56, %.% 56, % 12.5% 29 9,893 $14.68 C 5 267,13 74, %.% 74, % 25.5% -6, 3,3 $15.26 Total ,81 13, %.% 13, % 17.4% -5,971 13,193 $14.85 Katy Freeway A 76 18,17,64 1,567,9 8.7% 98,21.5% 1,665, % 4.6% 215, ,361 $36.57 B 14 9,976,694 1,62, % 124, % 1,186, % 11.7% 154,9 94,83 $24.55 C 33 1,58,141 77,52 4.9% 1,44.1% 78,492 5.% 4.4% -8,271-8,483 $18.26 Total ,573,899 2,76,33 9.2% 224,452.8% 2,93, % 7.% 36, ,681 $3.13 Kingwood/Humble B ,52 6,92 7.1%.% 6,92 7.1% 6.9% -2, $2.15 C 4 143,5 14, %.% 14, % 9.9% -78 $17.93 Total ,2 75, %.% 75, % 7.3% -3, $19.49 NASA/Clear Lake A 12 1,768,829 39, % 1,311.1% 4, % 3.9% 27,93 19,973 $24.82 B 47 3,184, , % 2,61.1% 944, % 29.4% -8,168 65,88 $18.48 C 2 66,49 115, %.% 115, % 19.3% 11,868 1,287 $15.47 Total 79 5,614,13 1,97, % 3,912.1% 1,11, % 2.2% 31,63 86,348 $18.84 North Belt/Greenspoint A 24 5,441,523 1,71, % 19,21.4% 1,72, % 2.5% -66,8-448,746 $3.18 B 58 6,21,556 1,5, % 43,524.7% 1,49, % 16.2% -79, ,978 $15.99 C 22 1,43, , %.% 292, % 21.3% 6,35 8,446 $11.8 Total 14 12,866,355 2,999, % 62,734.5% 3,62, % 18.6% -68,44-3,322 $24.9 Northeast Near and Northeast Outlier B 4 181,618 32, %.% 32, % 15.1% -5,147-1,94 $2.92 C 2 56,562 11, %.% 11, % 2.8% 755 $13.99 Total 6 238,18 44, %.% 44, % 16.4% -5,147-1,149 $18.39 Northwest and Northwest Outlier A 25 4,578, , % 86, % 954,61 2.8% 12.3% -27,666 36,482 $26.59 B 91 7,147,716 1,8, % 45,585.6% 1,53, % 14.5% -17,78 115,16 $18.51 C 4 1,65,267 14, %.% 14, % 8.8% 646-1,282 $15.16 Total ,331,815 2,17,3 15.1% 131,771 % 2,149, % 13.1% -44,8 15,36 $22.17 Richmond/Fountainview B 14 85, ,2 22.%.% 177,2 22.% 23.6% 13,7 14,178 $17.59 C ,591 85, %.% 85, % 13.6% -17,59 18,367 $14.32 Total 26 1,31, , %.% 262, % 19.8% -4,583 32,545 $16.57 COLLIERS INTERNATIONAL P. 5

94 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET HOUSTON SUBURBAN OFFICE MARKET SUMMARY - CONTINUED Class San Felipe/Voss DIRECT # of Bldgs. Total Rate Rate Total Q1-215 Q4-214 Q1-215 Q4-214 A 3 1,72, , % 11,356.7% 283, % 17.1% 9,694-89,325 $35.82 B 32 3,231,84 255, % 13,11.4% 268,73 8.3% 8.% -11,32 52,745 $24.2 Total 35 4,952, ,16 1.7% 24,367.5% 552, % 11.1% -1,626-36,58 $3.75 South A 1 8, 5, %.% 5, % 7.4% 1,842 $29.63 B ,159 49, %.% 49, % 1.4% -1,12 5,841 $2.74 C 5 194,42 71,1 36.6%.% 71,1 36.6% 36.6% 889 $23.17 Total ,21 126, %.% 126, % 16.9% -1,12 8,572 $23.52 South Main/Med Center A 1 485,.%.%.%.% - B ,96 188, %.% 188, % 21.7% -3, $19.86 C 8 475,436 63, %.% 63, % 14.1% 3,61-1,498 $16.71 Total 22 1,815, , %.% 252, % 13.9% 434-1,72 $19.1 Southeast/Outlier B 16 1,222,226 89, %.% 89, % 7.4% 61,245 $19.84 C 5 213,543 8,514 4.%.% 8,514 4.% 23.7% 42, -5,514 $. Total 21 1,435,769 98, %.% 98, % 9.8% 42, 1,731 $19.84 Southwest A 6 1,583,72 222, %.% 222, % 16.1% 31,433 3,811 $17.36 B 64 5,712,918 1,185, %.% 1,185, % 25.1% 246, ,293 $16.37 C 41 2,13, ,16 8.3%.% 174,16 8.3% 9.9% 34, $13.93 Total 111 9,4,469 1,582, %.% 1,582, % 2.2% 312, ,795 $16.19 Southwest Far and Outlier A 6 289,839 34,76 12.%.% 34,76 12.% 12.4% 1,172 48,788 $26.23 B , , %.% 219, % 24.7% 67,5 $18.75 C 2 51,396.%.%.%.% $18. Total 23 1,23, , %.% 254, % 2.8% 1, ,288 $23.49 West Loop/Galleria A 44 16,548,18 1,43, % 244, % 1,674, % 1.1% -7,34 59,315 $34.98 B 55 6,283, , % 2,173.3% 695, % 1.9% -11,688 63,26 $26.73 C 4 216,268 1,261.6%.% 1,261.6% % 1,8 $2.31 Total 13 23,47,862 2,17, % 264, % 2,372,52 1.3% 1.2% -17, ,341 $32.64 Westchase A 3 8,169,697 1,227, % 285, % 1,512, % 13.8% -383,114 17,859 $38.42 B 63 7,675, , % 767.% 823, % 11.7% 72,212-16,835 $2.17 C 9 68,15 7, %.% 7, % 13.3% 1,861-18,335 $17.3 Total 12 16,453,546 2,119, % 286,28 1.7% 2,45, % 12.8% -3,41 135,689 $3.7 The Woodlands 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 COLLIERS INTERNATIONAL P. 6

95 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET OFFICE DEVELOPMENT PIPELINE Houston s construction pipeline contains 14.5 million SF of office space, of which 65.% is pre-leased. Build-to-suit projects make up 56.4% of the 14.5M SF, and the remaining 6.3M SF of spec office space under construction is approximately 19.5% pre-leased. Approximately 6.9 million SF or 85.% of the build-to-suit projects under construction are pre-leased to energy industry companies. The table below includes office buildings under construction with an RBA of 45, SF or greater. Building Name Address Submarket SF Pre- Leased Developer Est. Delivery FMC Technologies Campus Subsea Ln & W Lake Houston Northeast Near 1,7, 1.% McCord Development, Inc Jan-16 Phillips Citywest Blvd Westchase 1,1, 1.% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,56,658.% Hines Dec-16 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1.% Transwestern Oct-16 Energy Center Four 925 N Eldridge Pky Katy Freeway West 6, 1.% Trammell Crow Company Sep-16 Energy Center Three 935 N Eldridge Pky Katy Freeway West 546,64 1.% Trammell Crow Company Apr-15 Energy Center V 915 N Eldridge Pky Katy Freeway West 524,386.% Trammell Crow Company Apr-16 ExxonMobil Campus - Ph III I-45 S The Woodlands 5, 1.% Gilbane Building Company Jun-15 Noble Energy Center II SH 249 & Louetta Rd FM 196/Hwy , 1.% Trammell Crow Company Jun-15 Air Liquide Center- South 9811 Katy Fwy Katy Freeway East 452, % MetroNational Nov-15 Millennium Tower II 1353 Richmond Ave Westchase 445, 1.% BMS Management, Inc. Feb-16 Hilcorp Energy Tower 111 Main Street CBD 46,6 1.% Hines Jan Buffalo Speedway 3737 Buffalo Speedway Ave Greenway Plaza 4, 22.9% PM Realty Group Aug-15 West Memorial Place II Memorial Dr Katy Freeway West 389,79 4.7% Skanska Commercial Development Jan-16 Future Amegy Bank HQ 1717 W. Loop South Post Oak Park 38, 74.2% Hines Feb-17 Shell Phase 4 21 N Dairy Ashford Rd Katy Freeway West 336, 1.% Hines Apr-15 ExxonMobil - Hughes Landing 1735 Hughes Landing Blvd The Woodlands 331,84 1.% The Woodlands Development Company Apr-16 Three Hughes landing 178 Hughes Landing Blvd The Woodlands 32,815.% The Woodlands Development Company Nov-15 ExxonMobil - Hughes Landing 1725 Hughes Landing Blvd The Woodlands 317,52 1.% The Woodlands Development Company Apr-16 Westway Plaza 1133 Clay Rd FM 196/Hwy , 1.% Transwestern May-15 Enclave Place 1414 Enclave Katy Freeway West 3,97.% PM Realty Group Aug-15 Kirby Grove 2525 Richmond Ave Greenway Plaza 248, % Midway Companies Aug-15 Havenwood Office Park 257 Interstate 45 Woodlands 24,47.2% Everson Developments, LLC Nov-15 CityCentre Five 825 Town & Country Katy Freeway East 227, % Midway Companies Jul-15 Remington Square - Ph II 1713 W Sam Houston Pky N FM 196/Hwy 249 2,.% Stream Realty Partners, L.P. Oct-15 Regions Financial Center 3773 Richmond Ave Greenway Plaza 185, 32.8% The Redstone Companies Apr-16 Woodbranch Plaza IV 1212 Wickchester Ln Katy Freeway West 171,475 1.% PM Realty Group Apr-15 San Felipe Place 2229 San Felipe Allen Parkway/Midtown 167, % Hines Aug Saint James Place 1885 St James Pl West Loop/Galleria 165,.% Nelson Murphree Legacy Partners Mar-16 Chasewood Crossing Three 1935 State Highway 249 FM 196/Hwy ,.% Greenwood Corporations Dec-15 Katy Ranch Phase I Katy Fwy Southwest Outlier 151,187.% Freeway Properties Jun-15 Park Ten Center - Phase II 162 Park Row Katy Freeway West 15,.% Lincoln Property Company Aug-15 Air Liquide Center- North 987 Katy Fwy Katy Freeway East 143,83 1.% MetroNational May-15 Nalco Champion Headquarters 775 Highway 9A E Fort Bend/Sugar Land 133, 1.% Nalco Holding Co Aug-15 Mason Creek Office Center II 217 Merchants Way Katy Freeway West 127,955.% Myers Crow & Saviers, LTD. May-15 CityPlace I Springwoods Village Pky Woodlands 116,5.% Coventry Development Corporation May-16 The Offices at Sam Houston 123 W Sam Houston Dr Northwest Far 18, % D'Agostino Companies Jul-15 Gateway at Spring Valley 99 Katy Fwy Katy Freeway East 95, % Ersa Grae Corporation Oct-15 River Oaks District - Office 4444 Westheimer Rd Post Oak Park 92, % Oliver McMillan May-15 Memorial Green Memorial Dr Katy Freeway East 49, % Midway Companies Jun-16 Det Norske Veritas- Phase Colonial Pky Katy Freeway West 47,25 1.% Chambers Street Properties Aug-15 Data Source: CoStar Property COLLIERS INTERNATIONAL P. 7

96 RESEARCH & FORECAST REPORT Q1 215 HOUSTON OFFICE MARKET The Colliers Advantage Enterprising Culture Colliers International is a leader in global real estate services, defined by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners. When you choose to work with Colliers, you choose to work with the best. In addition to being highly skilled experts in their field, our people are passionate about what they do. And they know we are invested in their success just as much as we are in our clients success. This is evident throughout our platform from Colliers University, our proprietary education and professional development platform, to our client engagement strategy that encourages cross-functional service integration, to our culture of caring. We connect through a shared set of values that shape a collaborative environment throughout our organization that is unsurpassed in the industry. That s why we attract top recruits and have one of the highest retention rates in the industry. Colliers International has also been recognized as one of the best places to work by top business organizations in many of our markets across the globe. Colliers International offers a comprehensive portfolio of real estate services to occupiers, owners and investors on a local, regional, national and international basis. *Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. LISA R. BRIDGES Director of Market Research Houston Direct Fax lisa.bridges@colliers.com COLLIERS INTERNATIONAL 1233 W. Loop South Suite 9 Houston, Texas 7727 Main Accelerating success. COLLIERS INTERNATIONAL P. 8

97 Q4 214 OFFICE MARKET HOUSTON OFFICE MARKET RESEARCH & FORECAST REPORT Houston Houston s Office Market Records 6.8M SF of Positive Net Absorption in 214 Houston s office market posted 2.2M SF of positive net absorption in Q4 214, bringing the year-end total to 6.8M SF. HOUSTON OFFICE MARKET INDICATORS Q3 214 Q4 214 CITYWIDE NET ABSORPTION 674K 2.2M CITYWIDE AVERAGE 11.9% 11.5% CITYWIDE AVERAGE $27.8 $26.79 CITYWIDE DELIVERED 1.5M 2.1M A CBD $42.36 $42.1 SUBURBAN $32.13 $31.61 A CBD 9.9% 8.6% SUBURBAN 9.6% 9.9% Over 2.1M SF of new inventory delivered during Q4, bringing 214 year-end delivered inventory to over 6.6M SF. ExxonMobil began moving into a portion of its new north campus and Southwestern Energy moved into it s new corporate headquarters just south of the ExxonMobil campus. Houston s office construction pipeline still contains over 17.M SF and 7.5M SF of that is speculative development which is 28.8% pre-leased. The majority of the space is located in the suburban submarkets and is scheduled to deliver in 215. The citywide average rental rate decreased slightly between quarters, 1.6% from $27.8 to $26.78 per SF, but is still 3.2% higher than it was a year ago. Both CBD and suburban Class A average rental rates decreased over the quarter; however, both Class B average rental rates rose. Houston s office investment sales market is benefitting from the foreign capital that is pouring into the U.S. According to a recent survey by the Association of Foreign Investors in Real Estate (AFIRE), Houston ranked #3 in the top five U.S. cities for foreign investors. The Houston metropolitan area created 12,6 jobs between October 213 and October 214, an annual increase of 4.3% over the prior year s job growth. Sectors creating most of the jobs contributing to the annual increase include mining and logging, construction, transportation, warehousing and utilities, and health care and social assistance. Houston s unemployment rate fell to 4.7% from 5.9% one year ago. JOB GROWTH & UNEMPLOYMENT (Not Seasonally Adjusted) UNEMPLOYMENT 1/13 1/14 HOUSTON 5.9% 4.7% 2,5, 2,, 1,5, ABSORPTION, NEW SUPPLY & S 17.% 15.% TEXAS 6.1% 4.8% 1,, 13.% U.S. 7.% 5.5% 5, 1% JOB GROWTH ANNUAL CHANGE JOBS ADDED -5, 9.% HOUSTON 4.3% 12.6K -1,, 7.% TEXAS 3.9% 436.7K -1,5, 5.% U.S. 2.% 2.8M Net Absorption New Supply Vacancy

98 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% $45. $4. $35. $3. $25. $2. $15. $1. CBD VS. Suburban Class A Office Vacancy $5. $. CBD Vacancy Class A Office Rents CBD Rents Suburban Vacancy Suburban Rents & AVAILABILITY Houston s citywide vacancy rate fell 4 basis points between quarters from 11.9% to 11.5% and fell by 5 basis points annually from 12.% in Q Between quarters, the average suburban vacancy rate decreased 2 basis points from 12.2% to 12.% while the average CBD vacancy rate decreased 11 basis points from 1.9% to 9.8%. The average CBD Class A vacancy rate decreased 13 basis points between quarters from 9.9% to 8.6%, and the average CBD Class B vacancy rate fell 3 basis points from 1.4% to 1.1%. The average suburban Class A vacancy rate increased 3 basis points from 9.6% to 9.9%, and the average suburban Class B vacancy rate decreased 8 basis points from 14.6% to 13.8% between quarters. Of the 1,647 existing office buildings in our survey, only 47 have 1, SF of contiguous space available for lease or sublease. Further, only 16 have 2, SF of contiguous space available. Citywide, available sublease space totals 4.6 million SF or 2.2% of Houston s total office inventory, but only 1.7 million SF of this sublease space is currently vacant. ABSORPTION & DEMAND Houston s office market posted 2,248,224 SF of positive net absorption in Q4 214, pushing year-end total net absorption to 6,841,398 SF. Suburban Class A space posted the largest gain, with 1,113,43 SF of positive net absorption, the majority of which occurred in The Woodlands submarket. Some of the larger tenants that moved into new space during Q4 include ExxonMobil Company (1,, SF) moving into the first phase of its new north Houston corporate campus in The Woodlands submarket, Memorial Resource Development (125, SF) and Motive Enterprises (19, SF) which moved into One Allen Center located in the CBD submarket, and Samsung Engineering America Inc. (8, SF) which moved into Two BriarLake Plaza in the Westchase submarket. S The citywide average rental rate decreased 1.1% from $27.8 per SF in Q3 214 to $26.79 per SF, but was still up 3.2% from $25.97 per SF in Q The average citywide rental rate for Class A fell % over the quarter and the average citywide Class B rental rate increased 1.3% between quarters. The CBD Class A average rental rate decreased.8% from $42.36 per SF in Q3 214 to $42.1 per SF. The suburban Class A average rental rate fell 1.7% from $32.13 per SF in Q3 214 to $31.61 per SF. The average CBD Class B rental rate rose.5%, and the average suburban Class B rental rate rose 1.3% between quarters. QUOTED GROSS S FOR EXISTING TOP PERFORMING OFFICE BUILDINGS Building Name Address Submarket RBA Year Built % Leased Avail. SF Rent Owner Wells Fargo Plaza 1 Louisiana St CBD 1,721, % 86,799 $53.87 Heritage Plaza 1111 Bagby CBD 1,359, % 14,318 $5.71 BG Group Place 811 Main CBD 972, % 144,264 $51.96 NPS of Korea New York State Common Retirement Fund AEW Capital Management and Brookfield Office Properties, Inc. CityCentre Three 842 W Sam Houston Pky N Katy Freeway 12, % 6,349 $45.96 Midway T & C Land Investors Williams Tower BBVA Compass Plaza 28 Post Oak Blvd 22 Post Oak Blvd West Loop/Galleria West Loop/Galleria 1,476, % 7,353 $48.36 Invesco Real Estate 312, % 67,523 $46. RS Post Oak Perennial LP CityWestPlace CityWest Blvd Westchase 518, % 92,984 $47.43 Parkway Properties, Inc. One BriarLake Plaza 2 W Sam Houston Pky Westchase 52, % 64,82 $47.97 TIER REIT, Inc. Two Hughes Landing 179 Hughes Landing Blvd The Woodlands 197, % 27,251 Note: Avail. SF includes direct and sublet space as well as any future available space listed. Source: CoStar Property $ $48.92 The Woodlands Development Company, L.P. COLLIERS INTERNATIONAL P. 2

99 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET LEASING ACTIVITY Houston s office leasing activity reached 1.8 million SF in Q4 214 with transactions including renewals, expansions, subleases, and pre-leases in buildings currently under construction. 214 year-end leasing activity totaled just over 12.4M SF. Q4 214 Select Office Leases Building name/address Submarket SF Tenant Lease date Post Oak Central West Loop/Galleria 23, Stewart Information Services 6 Nov-14 CityWestPlace Westchase 115, Bristow Group Nov-14 One Commerce Green North Belt/Greenspoint 98, Nabors Industries 2 Dec-14 Gateway At Spring Valley Katy Freeway 4,632 StollerUSA Oct N Sam Houston Pky E North Belt/Greenspoint 32,325 North American University Oct Space Center Blvd NASA/Clear Lake 33,159 MasTec 1, 2, 5 Nov N Sam Houston Pky E North Belt/Greenspoint 32,325 North American University Oct-14 Gateway At Spring Valley Katy Freeway 2,316 East West Bank 4 Oct-14 America Tower Allen Parkway (Midtown) 13,68 Peregrine Petroleum Nov-14 6 Travis CBD 13,191 Wilkie Farr & Galagher 3 Oct Nasa Parkway NASA/Clear Lake 11,77 BurrowGlobal 5 Dec Park Ten Place Katy Freeway 1,216 NACE International 2 Oct-14 Westheimer Central Plaza Westchase 1, Keane Franc Oct-14 1 Renewal 2 Expansion 3 Sublease 4 Pre-lease/proposed or under construction 5 Colliers International Transaction 6 Extension SALES ACTIVITY Houston s office investment sales activity included 38 sales transactions and a total sales volume of approximately $478.9 million averaging $176 per SF, with an average cap rate of 5.9%. Listed below are a few significant transactions that closed in Q Q4 214 SIGNIFICANT SALES TRANSACTIONS (1, SF or greater) Building Name The Lakes on Post Oak - 3 Post Oak Blvd. Cullen Center 6 Jefferson Submarket West Loop/ Galleria RBA Year Built Buyer Seller Sale Price $/SF Closed 441, FG Asset Management Five Mile Capital Partners $17M $385 11/214 CBD 449, Stream Realty Partners Brookfield Office Properties $69M $154 1/ West Loop South West Loop/ Galleria Bering Office Tower 2 Bering Dr San Felipe/ Voss 21, / 2 192, / 28 Tenaris Global Services Corp. Tanglewood Property Group APF Properties LLC $47M $233 1/214 2 Bering Ltd $29M $15 11/214 Sam Houston Crossing One 1343 Sam Houston Park Dr Northwest Far 159, Fuller Realty Partners, LLC and Independencia Asset Management, LLC Duke Realty Corporation and Chambers Street Partners $26M $165 12/214 Sources: CoStar and Real Capital Analytics COLLIERS INTERNATIONAL P. 3

100 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET HOUSTON OFFICE MARKET SUMMARY (CBD, SUBURBAN & OVERALL) Class DIRECT # of Total Rate Rate Total Q4-214 Q3-214 Q4-214 Q3-214 Bldgs. CBD A 31 3,286,336 2,18,777 7.% 482, % 2,59, % 9.9% 415,4 4,532 $42.1 B 3 1,395,668 1,16, % 3,955.3% 1,47, % 1.4% 35,23 27,238 $28.13 C 19 1,254,657 49, %.% 49, % 38.2% -1,761-5,529 $19.21 Total 8 41,936,661 3,615, % 513, % 4,128, % 1.9% 439,266 62,241 $37.4 Suburban A 35 78,22,159 7,18, % 595,927.8% 7,74,12 9.9% 9.6% 1,113,43 788,713 $31.61 B ,215,289 1,232, % 557,154.7% 1,789, % 14.6% 771, ,352 $2.9 C ,75,326 1,93, % 3,742.2% 1,934, % 12.7% -75,957 58,94 $15.68 Total ,942,774 19,271, % 1,156,823.7% 2,428, % 12.2% 1,88, ,265 $24.85 Overall A ,38,495 9,216,97 8.5% 1,78,145 % 1,295, % 9.7% 1,528, ,245 $33.96 B ,61,957 11,248, % 588,19.7% 11,836, % 14.1% 86,58-29,114 $2.78 C ,959,983 2,421, % 3,742.% 2,425, % 14.7% -86,718 53,375 $16.9 Total ,879,435 22,887,89 1.8% 1,669,996.8% 24,557, % 11.9% 2,248, ,56 $26.79 HOUSTON SUBURBAN OFFICE MARKET SUMMARY DIRECT Class # of Bldgs. Total Rate Rate Total Q4-214 Q3-214 Q4-214 Q3-214 Allen Parkway (Midtown) A 4 1,598,33 24, %.% 24, % 13.% 3,873 18,66 $32.84 B 32 2,62,56 19,25 4.2% 17,31.7% 126, % 5.1% 8,63 15,653 $28.16 C 15 53, , %.% 118, % 22.2% -6,767 3,11 $22.82 Total 51 4,721, , % 17,31.4% 448, % 9.6% 5,169 36,82 $29.54 Baytown B 3 186,5 6, %.% 6, % 3.4% -5,551 $17.18 C 3 81,481 1, %.% 1, % 2.2% $9.87 Total 6 267,486 8,6 3.%.% 8,6 3.% 3.% -5,551 $1.98 Bellaire A 6 1,9,749 7, % 22,15 2.% 92, % 1.3% 19,472-8,83 $24.61 B 18 2,69,813 93, % 11,155.4% 14,52 4.% 4.1% 1,453 4,56 $26.27 C 5 327,2 56, %.% 56, % 17.2% 6,498 $18.31 Total 29 4,27,582 22, % 33,26.8% 253,44 6.3% 6.8% 2,925 2,975 $25.24 Conroe and Outlying Montgomery Co A 2 17,161 47, %.% 47, % 44.% -329 $24.53 B 1 511,85 28, %.% 28, % 4.3% -6,444 $18.9 C 7 289,662 4, %.% 4, % 1.7% 2,5 $15.71 Total 19 98,628 8, %.% 8, % 8.1% -6,444 2,171 $21.25 E. Fort Bend/Sugar Land A 18 3,59,489 34, % 15,945.5% 356, % 11.6% 5,949-34,839 $28.66 B 37 2,195, , % 1,27 4.6% 424, % 18.1% -27,224 15,76 $22.7 C 4 264,26 9,52 3.6% 2,32.9% 11,84 4.5% 4.5% 1,481 $18.99 Total 59 5,969, , % 118,454 2.% 793, % 13.7% 23,725-17,598 $25.26 FM 196 A 13 2,262,736 13, % 34,39 1.5% 137, % 6.9% 17,88-1,134 $28.9 B 89 4,934,942 91, %.% 91, % 19.% 26,431 18,46 $15.56 C 2 716,153 52, %.% 52, % 8.5% 8,642-4,48 $15.51 Total 122 7,913,831 1,66, % 34,39.4% 1,1, % 14.6% 52,953 12,792 $17.21 COLLIERS INTERNATIONAL P. 4

101 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET HOUSTON SUBURBAN OFFICE MARKET SUMMARY - CONTINUED Class Greenway DIRECT # of Bldgs. Total Rate Rate Total Q4-214 Q3-214 Q4-214 Q3-214 A 16 6,224,46 427, % 17,86.3% 445, % 7.8% 4,16-5,67 $34.8 B 33 3,386, , % 1,145.3% 232, % 7.6% 25,243 5,31 $24.91 C , , % -.% 271, % 32.2% -4, $18.24 Total 68 1,442,56 921, % 28,5.3% 949, % 9.7% 61,31-45,263 $29.7 Gulf Freeway/Pasadena A 1 22, %.% % 2.3% 837 $27.59 B 34 1,952,561 24, % 7,16.4% 211, % 1.% -16,397 16,161 $19.99 C 31 1,193, , %.% 154, % 1.3% -31,2 $17.18 Total 66 3,168, , % 7,16.2% 366, % 1.1% -47,399 16,998 $19.14 I-1 East B 7 447,68 56, %.% 56, % 14.7% 9, $14.68 C 5 267,13 68, %.% 68, % 26.8% 3,3 4,291 $15.26 Total ,81 124, %.% 124, % 19.2% 13,193 4,63 $14.85 Katy Freeway A 73 17,21,34 836, % 47,314.3% 884, % 5.4% 143, ,253 $33.9 B 14 9,877, ,691 1.% 24,69 2.1% 1,194,3 12.1% 12.9% 18,72-23,421 $23.1 C 34 1,595,235 68, % 1,44.1% 7, % 3.9% -8,483 17,3 $18.14 Total ,493,859 1,895, % 253,363.9% 2,148,7 7.5% 7.9% 243,66-24,165 $27.43 Kingwood/Humble B ,52 58, %.% 58, % 6.9% $2.15 C 4 141, %.% 144.1%.1% 1,51 $15. Total ,2 58, %.% 58, % 5.9% $2.14 NASA/Clear Lake A 12 1,767,866 67, % 1,311.1% 68, % 5.% 19,973 24,892 $24.37 B 47 3,186,22 933, % 3,151.1% 936, % 31.4% 65,88 29,342 $19.24 C 2 655, , %.% 127, % 19.7% 1,287-1,842 $15.64 Total 79 5,69,634 1,128, % 4,462.1% 1,133,28 2.2% 21.7% 86,348 52,392 $19.57 North Belt/Greenspoint A 24 5,438,248 1,16, % 7,617.1% 1,113, % 12.2% -448,746-11,92 $28.43 B 57 5,996,655 98, % 57,363 % 965, % 18.3% 129,199-49,959 $15.8 C 22 1,415, , %.% 298, % 21.7% 8,446-15,581 $11.68 Total 13 12,85,555 2,313, % 64,98.5% 2,378, % 16.1% -311,11-167,442 $22.97 Northeast Near and Northeast Outlier B 4 181,618 27, %.% 27, % 14.% -1,94 22,537 $21.9 C 2 56,562 11, %.% 11, % 22.1% 755 8,269 $13.99 Total 6 238,18 39, %.% 39, % 15.9% -1,149 3,86 $19.3 Northwest and Northwest Outlier A 22 3,99, , % 52, % 511, % 13.7% 36,482-61,578 $22.78 B 92 7,586,898 99, % 59,187.8% 1,49, % 15.4% 118,123 8,85 $18.97 C 4 1,573, ,14 9.%.% 141,14 9.% 8.9% -1,282 1,364 $15.76 Total ,15,838 1,59, % 112,48.9% 1,72, % 14.1% 153,323 29,636 $19.95 Richmond/Fountainview B 14 85,875 19, %.% 19, % 25.3% 14,178 13,394 $17.4 C ,843 67, %.% 67, % 17.3% 18,655 5,577 $14.2 Total 26 1,32, , %.% 257, % 22.3% 32,833 18,971 $16.5 COLLIERS INTERNATIONAL P. 5

102 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET HOUSTON SUBURBAN OFFICE MARKET SUMMARY - CONTINUED Class San Felipe/Voss DIRECT # of Bldgs. Total Rate Rate Total Q4-214 Q3-214 Q4-214 Q3-214 A 3 1,72, , % 7,49.4% 293, % 11.9% -89,325 4,387 $35.58 B 32 3,23, ,89 8.1% 6,778.2% 268, % 9.6% 41,541-9,181 $23.91 Total 35 4,951, , % 14,187.3% 562, % 1.4% -47,784-4,794 $3.37 South A 1 8, 5, %.% 5, % 9.7% 1,842 $26.98 B ,159 48, %.% 48, % 11.6% 5,841-6,667 $2.74 C 5 194,42 71,1 36.6%.% 71,1 36.6% 37.1% 889-1,539 $23.17 Total ,21 125, %.% 125, % 18.1% 8,572-8,26 $23.33 South Main/Med Center A 1 485,.%.%.%.% - B ,96 185, %.% 185, % 21.7% ,73 $19.72 C 8 475,436 63, %.% 63, % 13.8% 2,79 9,45 $16.69 Total 22 1,815, , %.% 249, % 13.7% 2,55 3,118 $18.85 Southeast/Outlier B 16 1,222,226 89, %.% 89, % 8.6% 61,245-2,897 $21.13 C 5 213,543 5, %.% 5, %.% -5,514 $17. Total 21 1,435,769 14, %.% 14, % 7.3% 1,731-2,897 $2.55 Southwest A 6 1,583,72 254, %.% 254, % 16.3% 3,811 29,229 $16.56 B 64 5,675,165 1,423, %.% 1,423, % 27.2% 12,93-136,654 $15.78 C 42 2,2,629 28,27 9.5%.% 28,27 9.5% 9.5% 691 1,957 $14.2 Total 112 9,459,496 1,886, %.% 1,886, % 21.3% 125,45-96,468 $15.66 Southwest Far and Outlier A 3 166,551 26, %.% 26, % 8.2% 53,72 3,248 $23.77 B , , %.% 238, % 31.3% 69,25 1,3 $18.75 C 2 51,396.%.%.%.% $18. Total 22 1,199, , %.% 265, % 28.% 122,745 4,548 $21.51 West Loop/Galleria A 43 16,382,79 1,431,69 8.7% 19, % 1,621, % 1.4% 82,34 192,818 $34.87 B 56 6,455,13 695, % 19,793.3% 715, % 11.9% 56,137 5,32 $26.7 C 4 216,268 2,269 %.% 2,269 % % -767 $2.59 Total 13 23,53,99 2,128, % 29,935.9% 2,338,58 1.1% 1.7% 138, ,83 $32.48 Westchase A 3 8,16, , % 135,51 1.7% 1,129, % 12.7% 17,859 11,757 $36.2 B 63 7,679,669 87, % 35,233.5% 95, % 11.4% -27, ,65 $2.6 C 9 68,15 8, %.% 8, % 1.3% -18,335 2,744 $17.24 Total 12 16,448,497 1,945, % 17,743 % 2,116, % 12.% 125,275-54,564 $29.89 The Woodlands A 27 6,49, ,625 7.% 63,814 % 59, % 9.5% 1,7,77 59,158 $35.39 B 7 4,317, , % 25,126.6% 391, % 8.8% -1,689 61,367 $24.28 C 5 338,38 1,.3%.% 1,.3%.3% $19.8 Total 12 11,65, ,87 7.3% 88,94.8% 92, 8.2% 8.9% 996,388 57,525 $3.2 COLLIERS INTERNATIONAL P. 6

103 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET OFFICE DEVELOPMENT PIPELINE Houston s construction pipeline contains 17. million SF of office space, of which 62.8% is pre-leased. Build-to-suit projects make up 56.% of the 17.M SF, and the remaining 7.5M SF of spec office space under construction is approximately 28.8% pre-leased. The table below includes office buildings under construction with an RBA of 5, SF or greater. Pre- Est. Building Name Address Submarket SF Leased Developer Delivery ExxonMobil Campus - Ph II I-45 S The Woodlands 1,5, 1.% Gilbane Building Company Mar-15 Phillips Citywest Blvd Westchase 1,1, 1.% Gilbane Building Company Jun Main at Texas 69 Main St CBD 1,57,668.% Hines Dec-16 CyrusOne W Campus Expansion 515 Westway Park Blvd Northwest Far 64, 1.% CyrusOne Mar-15 BHP Biliton Petroleum 15 Post Oak Blvd Galleria/Uptown 6, 1.% Transwestern Oct-16 Energy Center Four 925 N Eldridge Pky Katy Freeway West 6, 1.% Trammell Crow Company Dec-16 Energy Center Three 935 N Eldridge Pky Katy Freeway West 546,64 1.% Trammell Crow Company Apr-15 Energy Center V 915 N Eldridge Pky Katy Freeway West 526,637.4% Trammell Crow Company Apr-16 ExxonMobil Campus - Ph III I-45 S The Woodlands 5, 1.% Gilbane Building Company Jun-15 Hilcorp Energy Tower 111 Main Street CBD 475, 1.% Hines Oct-15 Noble Energy Center II SH 249 & Louetta Rd FM 196/Hwy , 1.% Trammell Crow Company Jun-15 Air Liquide Center- South 9811 Katy Fwy Katy Freeway East 452, % MetroNational Nov-15 Millennium Tower II 1353 Richmond Ave Westchase 445, 1.% BMS Management, Inc. Feb-16 Energy Tower IV 1175 Katy Fwy Katy Freeway West 429, % Mac Haik Realty LLC Jan Buffalo Speedway 3737 Buffalo Speedway Ave Greenway Plaza 4, 22.9% PM Realty Group Aug-15 West Memorial Place II Memorial Dr Katy Freeway West 389,79 4.1% Skanska Commercial Development Nov-15 Shell Phase 3 Bldg 1 21 N Dairy Ashford Rd Katy Freeway West 336, 1.% Hines Mar-15 Shell Phase 3 Bldg 2 21 N Dairy Ashford Rd Katy Freeway West 336, 1.% Hines Mar-15 Shell Phase 4 21 N Dairy Ashford Rd Katy Freeway West 336, 1.% Hines Mar-15 West Memorial Place Memorial Dr Katy Freeway West 334, % Skanska Commercial Development Jan-15 ExxonMobil - Hughes Landing 1735 Hughes Landing Blvd The Woodlands 331,84 1.% The Woodlands Development Company Apr-16 ExxonMobil - Hughes Landing 1725 Hughes Landing Blvd The Woodlands 317,52 1.% The Woodlands Development Company Apr-16 Westway Plaza 1133 Clay Rd FM 196/Hwy , 79.8% Transwestern Apr-15 Enclave Place 1414 Enclave Katy Freeway West 3,97.% PM Realty Group Aug-15 Beltway Lakes Phase III 5775 N Sam Houston Pky E Northwest Far 271,384.% Radler Enterprises, Inc. Jan-15 Town Centre I 7 Town & Country Blvd Katy Freeway East 254,489.% Moody Rambin Jan-15 Three Hughes landing 178 Hughes Landing Blvd The Woodlands 25,.% The Woodlands Development Company Oct-15 Kirby Grove 2525 Richmond Ave Greenway Plaza 248, % Midway Companies Aug-15 CityCentre Five 825 Town & Country Katy Freeway East 227, % Midway Companies Jul-15 Legacy at Fallbrook 172 W Sam Houston Pky N Northwest Far 26, % Liberty Property Trust Jan-15 Academy Sports HQ 18 N Mason Rd Katy Freeway West 2, 1.% Academy Jan-15 Remington Square - Ph II 1713 W Sam Houston Pky N FM 196/Hwy 249 2,.% Stream Realty Partners, L.P. Oct Richmond Ave 3773 Richmond Ave Greenway Plaza 185, % The Redstone Companies Dec-15 One Grand Crossing SWC of Grand Pky & I-1 Southwest Outlier 171,538.% Trammell Crow Company Dec-15 Woodbranch Plaza IV 1212 Wickchester Ln Katy Freeway West 171,475 1.% PM Realty Group Apr-15 San Felipe Place 2229 San Felipe Allen Parkway/Midtown 167, % Hines Aug Saint James Place 1885 St James Pl West Loop/Galleria 165,.% Nelson Murphree Legacy Partners Jan-16 Chasewood Crossing Three 1935 State Highway 249 FM 196/Hwy ,.% Greenwood Corporations Dec-15 Katy Ranch Phase I Katy Fwy Southwest Outlier 151,187.% Freeway Properties Mar-15 Park Ten Center - Phase II 162 Park Row Katy Freeway West 15,.% Lincoln Property Company Aug-15 Air Liquide Center- North 987 Katy Fwy Katy Freeway East 143,83 1.% MetroNational May-15 Nalco Champion Headquarters 775 Highway 9A E Fort Bend/Sugar Land 133, 1.% Nalco Holding Co Aug-15 Beltway 8 Corporate Centre 56 Westway Park Blvd Northwest Far 13, % Panattoni Development Jan-15 Mason Creek Office Center II 217 Merchants Way Katy Freeway West 127,955.% Myers Crow & Saviers, LTD. May-15 The Offices at Sam Houston 123 W Sam Houston Dr Northwest Far 18, % D'Agostino Companies Jul-15 River Oaks District - Office 4444 Westheimer Rd Post Oak Park 99, % Oliver McMillan Jan-15 Gateway at Spring Valley 99 Katy Fwy Katy Freeway East 95, % Ersa Grae Corporation Oct Technology Forest Dr 2829 Technology Forest Dr The Woodlands 87, % Black Forest Ventures Jan-15 Grandway West - Bldg 1 Grand Pky & Franz Rd Katy Freeway West 86,8 56.7% The Urban Companies Jan-15 Deerwood Glen II 444 SH 225 Gulf Freeway/Pasadena 78,.% Clay Development Jan-15 Data Source: CoStar Property COLLIERS INTERNATIONAL P. 7

104 RESEARCH & FORECAST REPORT Q4 214 HOUSTON OFFICE MARKET The Colliers Advantage Enterprising Culture Colliers International is a leader in global real estate services, defined by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners. When you choose to work with Colliers, you choose to work with the best. In addition to being highly skilled experts in their field, our people are passionate about what they do. And they know we are invested in their success just as much as we are in our clients success. This is evident throughout our platform from Colliers University, our proprietary education and professional development platform, to our client engagement strategy that encourages cross-functional service integration, to our culture of caring. We connect through a shared set of values that shape a collaborative environment throughout our organization that is unsurpassed in the industry. That s why we attract top recruits and have one of the highest retention rates in the industry. Colliers International has also been recognized as one of the best places to work by top business organizations in many of our markets across the globe. Colliers International offers a comprehensive portfolio of real estate services to occupiers, owners and investors on a local, regional, national and international basis. *Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. LISA R. BRIDGES Director of Market Research Houston Direct Fax lisa.bridges@colliers.com COLLIERS INTERNATIONAL 1233 W. Loop South Suite 9 Houston, Texas 7727 Main Accelerating success. COLLIERS INTERNATIONAL P. 8