CASE STUDY. New England Center Boston, MA

Transcription

1 CASE STUDY New England Center Boston, MA April 2004

2 Stacking Plan: Tower One

3 Stacking Plan: Tower Two Floor Low Rise Mid Rise High Rise 14,107 Vacant 7,357 Vacant 5,473 Vacant 299 Vacant 19,085 Vacant 19,085 Vacant 19,085 Vacant 19,085 Vacant 19,085 Vacant 19,085 Vacant 18,661 Vacant Tenant 1 Tenant 1 Tenant 1 Tenant 1 Tenant 1 Tenant 3 Tenant 1 Tenant 1 Tenant 1 Tenant 1 Tenant 1 Tenant 1 Tenant 1 5 Tenant 3 4 Tenant 1 3 Tenant 1 2 Tenant 3 Retail 720 Vacant Vacant Major Tenant Other Tenant

4 Property Description Property New England Center Boston, MA Size & Vacancy Tower One Tower Two Total Vacancy Office 1,035, ,025 1,800, ,293 (23.1%) Retail 22,792 8,437 31,229 1,791 (0.1%) Total 1,058, ,462 1,831, ,084 (23.2%) (1) Includes 10.1% of Pending Leases. (1) Tenancy Office Tower SF % of Total SF Lease Exp Date Tenant 1 (Financial Firm) Two 378,490 21% 5/2009 Tenant 2 (Law Firm) One 322,754 18% 12/2010 Tenant 3 (Financial Firm) Both 94,230 5% Various (6/2004-6/2007) Tenant 4 (Financial Firm) One 88,279 5% 4/2005 Tenant 5 (Law Firm) One 39,929 2% 11/2013

5 Existing Note Summary Opportunity To purchase Note from Lender at a discount in order to gain control of the asset through workout with Borrower or through foreclosure process. Existing Loan Terms Outstanding Balance $622 MM Maturity 2023 Prepayment Open in 2008 Interest Rate 7.3% Amortization 30-Year Schedule Debt Service Payments (est.) $53.1 MM Property Financial Summary (in $MM) FY 2005 FY 2006 FY 2007 NOI $30.9 $36.0 $47.9 CapEx (net of Escrow) ($1.8) ($31.1) ($3.4) Cash Flow after CapEx $29.1 $4.9 $44.5 Debt Service ($53.1) ($53.1) ($53.1) Cash Flow after DS ($24.0) ($48.2) ($8.6)

6 Proforma Assumptions Market Rent Growth Rates & Beyond Office High Rise $45 0%, 3%, 10%, 10% 3%+ Mid Rise $40 0%, 3%, 10%, 10% 3%+ Low Rise $35 0%, 3%, 10%, 10% 3%+ Retail $45 0%, 3%, 10%, 10% 3%+ Expenses 2004 Growth Rate Operating Expenses $ % Real Estate Taxes $ % Total $24.00 Tenant Improvements Office Retail 2004 & & Beyond New Leases $55 $40 Renewals $30 $15 New Leases $30 $30 Renewals $15 $15 Pending Leases Assumes all pending leases to be executed. New Law Firm largest pending lease. Tower High-Rise of Tower Two Area 155,324 Sq Ft Term 10 Years Rent (Average) $45.00 PSF TI $62.00 PSF Rent Abatement 8 Months

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8 Contents Reis Observer 3 Metro Analysis Section 1 - Current Metro Rent Details 14 Section 2 - Rent Growth Comparisons 14 Section 3 - Current Metro Vacancy Details 15 Section 4 - Vacancy Rate Comparisons 15 Section 5 - Metro Inventory Detail 16 Section 6 - Inventory Growth Comparison 16 Section 7 - Construction/Absorption Change 17 Section 8 - Submarket New Construction Project Tally 18 Section 9 - New Construction Listing 19 Section 10 - Market Data by Building Class - Class A Properties 25 Section 11 - Market Data by Building Class - Class B/C Properties 26 Section 12 - Submarket Snapshot 27 Section 13 - Economic and Demographic Trends 28 Section 14 - Submarket Boundaries 29 Section 15 - Metro Data 30 Submarket Analysis Section 16 - Current Submarket Rent Details 32 Section 17 - Rent Growth Comparisons 32 Section 18 - Current Submarket Vacancy Details 33 Section 19 - Vacancy Rate Comparisons 33 Section 20 - Submarket Inventory Detail 34 Section 21 - Inventory Growth Comparison 34 Section 22 - Construction/Absorption Change 35 Section 23 - Market Data by Building Class - Class A Properties 36 Section 24 - Market Data by Building Class - Class B/C Properties 37 Section 25 - Submarket Data 38 Rent Comparables Sale Comparables

9 Reis Observer

10 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 THE ECONOMY Economic conditions in metro Boston continue to cause unease. Jobs continued to disappear from this once-bustling economy at an alarming, albeit slowing, rate, and unemployment is up. Total employment per September 2003 is down 1.8% from one year ago (representing a loss of 35,500 jobs), continuing a declining trend that began in 2001, when employment decreased 2.5%, which was then followed by another loss of 2.1% in 2002, according to the US Department of Labor, Bureau of Labor Statistics (BLS). While nearly all employment sectors are feeling the pinch, Boston s blue-collar workers are being hit the hardest. In the past year, roughly 6.4% of jobs in the Construction sector and 5.0% of jobs in the Manufacturing sector were lost. Meanwhile, the Boston unemployment rate has risen slightly from one year ago, increasing 10 basis points, to 5.3% per September 2003 (though this rate is unchanged from the previous month). Statewide, the employment picture is even worse. The BLS reports that unemployment in Massachusetts has risen to 5.7% per September 2003 from 5.5% a year ago. With unemployment on the rise, word has come from Massachusetts Governor Mitt Romney s administration that the state expects to borrow hundreds of millions of dollars from the federal government to cover jobless benefits in 2004, because its unemployment insurance fund will be drained by year-end 2003, according to the Boston Business Journal. The total borrowing could reach several hundred million dollars, and the state could be borrowing for quite a while unless the Legislature passes an administration plan to overhaul the jobless benefits fund and raise more cash, according to sources in the administration. Massachusetts last borrowed from the federal government in 1994, at the tail end of the last recession. This time around, state officials and Beacon Hill observers insisted the unemployment trust fund would not go broke, even after its onceseemingly comfortable $2.1 billion cushion dwindled to $800 million by the end of last year. But the fund was thrown into crisis by a recession that has lasted longer than state officials and many economists expected, resulting in greater payouts than anticipated and smaller payments into the fund by employers. As 2003 rolls to an end, prospects for a rebound in job growth in the near future have dimmed substantially following a number of highprofile announcements. This time, Boston s once-reliable financial sector is the center of attention. In October of 2003, Charlotte-based Employment: The unemployment rate is unchanged from August, at 5.3% per September 2003, according to the BLS. Annual growth in average non-agricultural employment has been slow in returning, with the BLS reporting a 1.8% decrease in overall employment in metro Boston per September The average median income for Boston is reported at $106,580, according to Economy.com. By contrast, the national average is $95,907. Leisure & Hospitality 8% Boston Employment by Sector Governm ent 12% Services 42% Construction 4% Mining 0% Manufacturing 8% T/PU 3% FIRE 9% Source: BLS Trade 14% Copyright 2003 Reis, Inc. Page 3 1

11 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 Bank of America announced it was taking over FleetBoston Financial Group, creating the nation s second largest bank. There is widespread concern that the purchase could result in layoffs to reduce duplicate jobs. Meanwhile, Providence-based Citizens Financial Group Inc. (one of the twenty largest US banks) has laid off 45% of the 203 employees of Port Financial Corp., the Brighton-based holding company for Cambridgeport Bank, which it acquired in April of Meanwhile, a number of layoffs, battered share prices, and shareholder lawsuits have plagued the metro s biotech sector, reports the Boston Business Journal. In the past few months alone, Millennium Pharmaceuticals Inc. in Cambridge revealed plans of a layoff totaling 600 jobs from their offices in Boston, San Francisco, and England. Further, Cambridge-based Vertex Pharmaceuticals Inc. said it would lay off 111 employees 55 of them in the company's Cambridge operations as part of a corporate restructuring to focus its resources on more than a dozen drugs already in its pipeline. Most recently, Cambridge-based Biopure Corp. said it would cut almost one-third of its jobs and replace its regulatory officer amid attempts to gain U.S. Food and Drug Administration approval to introduce its Hemopure product into the US, a hemoglobin-based oxygen therapy previously used in South Africa. With the metro s once-highflying industries temporarily grounded, Governor Romney has proposed a number of economic development programs to jump-start job growth. According to the Boston Globe, Romney has offered a $125 million economic plan that would give tax cuts to companies that create new manufacturing jobs, provide additional aid to localities that increase affordable housing, and offer incentives for the rehabilitation and development of urban brownfields. The manufacturing tax credit would target biotechnology, life sciences and medical device companies, which are currently in transition from the research and development phase to manufacturing, according to Romney. By allowing the companies to keep half of the new income tax revenue Office Employment (% change) Jobs Added (000's) Population Growth (% change) 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% % 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% Boston Non-Farm Employment Growth Jobs Added Population Trends Rate of Growth Office Employment Trends Source: BLS -2% -4% -6% % 6% 4% 2% 0% Rate of Growth Boston Northeast US US Source: Economy.com Boston Northeast US US Source: Economy.com Copyright 2003 Reis, Inc. Page 4 2

12 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 generated by these jobs, Romney said, the state will encourage the industries to remain in Massachusetts after the research is complete. Despite its New England charm, population growth in metro Boston is weak compared to the rest of the nation, growing just 0.3% in 2002 (compared to an average of 1.2% for the nation s top 50 metros), due to the metro s high development costs, expensive cost of living including staggering home prices, and slow job growth. Any new residential development that is taking place occurs around the I-495 highway, where land is less expensive and relatively plentiful, and into neighboring states such as New Hampshire and Rhode Island. Closer to the city, the shortage of housing has led Boston to become one of the most expensive places to live in the nation. The median home price reported for the Boston area by the National Association of Realtors rose to $432,700 in the third quarter of 2003, up 41% from one year ago, making it the third most expensive metro in the nation after the California s Bay Area and Orange County. Outlook Any Boston economic recovery is expected to lag the rest of the nation, as initial job growth most likely will occur in the low-cost, Sunbelt locales. Still, Boston retains its enviable position as a worldclass education and research center, which should provide it with a solid foundation for future growth. Moreover, recent developments, such as being awarded the Democratic National Convention and the near-completion of the Big Dig, are steps in the right direction toward stimulating this local economy. Copyright 2003 Reis, Inc. Page 5 3

13 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 THE REAL ESTATE MARKET The dour local economy has the Boston office market in a strangle hold, despite an improving national economy. According to Grubb & Ellis, landlords will have to wait at least one more quarter before general economic conditions translate into flat adsorption and stabilizing lease rates. According to Reis, after a promising start this year, leasing activity fell in the second and third quarters; developers found themselves delivering new buildings at the same time tenants were returning previously leased space to the market. Consequently, per third quarter, vacancy rates continued to climb, prompting significant losses in both asking and effective rents. OCCUPANCY Occupancy levels continue to dwindle in the Boston office market per third quarter 2003 though at a gradually diminishing rate. Vacancy rose 1,460 basis points over the two-year period 2000 to 2002 (1,020 basis points in 2001 and 440 basis points in Average Vacancy 25% 20% 15% 10% 5% 0% Office Vacancy Trends Boston Northeast US US Source: Reis, Inc. 2002), culminating at a rate of 18.5% per year-end Along with the completion of approximately 1.7 million square feet of new office space thus far this year, declining demand has caused vacancy to grow 120 basis points since year-end 2002, to 19.7% per third quarter 2003, according to Reis. (Of the 24 million square feet of vacant office stock in the metro, roughly 35% is accounted for by sublease availabilities, far above the 23% national average.) However, on a sector basis, the demand for Class A space has improved over the quarter, falling 20 basis points, to 18.5%, at the expense of Class B/C space, which saw a 40-basis-point increase in vacancy over the same time period, to 21.1%. Reis believes overall vacancy will remain steady at 19.7% through the end of 2003, and then peak next year at 19.9%, before gradually heading downward over the remaining years of the forecast period. Special Real Estate Factors: One of the largest Boston real estate deals in decades is in trouble, as New York-based Tishman Speyer Properties is balking at buying 44 Boston Wharf Co. buildings in the Fort Point Channel area for an estimated $400 million. Tishman Speyer tentatively said in July it would buy all of Boston Wharf's industrial-style brick buildings on the edge of the South Boston Waterfront, the city's new development frontier. But after inspecting the huge real estate portfolio, Tishman said it realized there may be less usable square footage in the buildings; it is worried about liabilities if underground water problems recur; and it cannot add floors for structural reasons to some of the aging buildings. The properties for sale include most of the buildings in an area from the Fort Point Channel east to West Service Road, and from Seaport Boulevard south, along Congress and Summer Streets, to the Gillette Co. complex on A Street. One person close to the negotiations told the Boston Globe it is unlikely Boston Wharf would put the buildings on the market if this sale falls through. Instead, Boston Wharf could wait for the economy to improve and property values to increase before talking with another possible buyer. An effort is being made to recapitalize a trophy office complex in Boston that is saddled with a $630 million mortgage from Teachers Insurance. The 1.8-million- Copyright 2003 Reis, Inc. Page 6 4

14 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 According to CB Richard Ellis, third quarter suburban Boston vacancy is reported at 26.3%, up from 24.7% last quarter, while CBD vacancy is reported at 13.8%, up from 13.1% last quarter. Cushman & Wakefield reports a direct vacancy rate of 16.4%, up from 16.0% per second quarter Meanwhile, Grubb & Ellis reports office vacancy has risen to 19.6% in the third quarter, excluding a large potential shadow space overhang. (These sources report on slightly larger inventories than Reis.) SUPPLY AND DEMAND Growth in demand Boston Office Supply and Demand Trends from the financial and high-tech sectors had 8,000 25% driven vacancy rates to 6,000 4,000 20% record lows and rent 2,000 15% gains to record highs, 0 which, in turn, -2,000 10% -4,000 prompted -6,000 5% development. -8,000 Between 1997 and -10,000 0% , roughly 22.7 Completed Absorbed Vacancy Rate million square feet of Source: Reis, Inc. new office space were delivered to this market, including last year s delivery of 2.7 million, increasing the volume of office inventory by 21%. Reis anticipates the completion of 1.7 million square feet this year, all of which has been delivered per third quarter. Fortunately, annual delivery totals are expected to continue to decline in the coming years: Next year, Reis anticipates the delivery of just 945,000 square feet, followed by just 80,000 square feet in CB Richard Ellis estimates that over 2.6 million square feet are under construction in the CBD in five buildings for delivery between now and 2004 (only 51% of which are preleased), while construction activity in the suburbs is nonexistent. Square Feet (000's) Vacancy Rate Special Real Estate Factors: Continued square-foot property, called International Place, is owned by a partnership that includes developer Donald Chiofaro and Hillman Properties of Pittsburgh, reports Commercial Mortgage Alert. The two-tower complex, considered one of Boston's finest properties, is virtually fully occupied, with a roster of blue-chip tenants. But the size of Teachers' mortgage exceeds the complex's value, so the insurance company would be the key player in any recapitalization. It's presumed that Teachers would end up with a sizable equity interest in the property under any arrangement. The goal is to line up both equity and debt. Secured Capital, which is overseeing the effort, has sent out packages to prospective lenders. Teachers would desperately like to get out from under the loan, which it originated in the early 1990s after the real estate market tanked. Net absorption drastically outpaced new supply for much of the 1990s, driving vacancy below 4.0% by However, recent economic turmoil caused the demand for new space to plummet: In 2001, Reis reports the negative net absorption of 7.5 million square feet, followed by the negative net absorption of 2.9 million square feet in Following a brief surge into the positive territory early this year (175,000 square feet of net absorption were reported by Reis for first quarter), net absorption had fallen back into negative territory by Copyright 2003 Reis, Inc. Page 7 5

15 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 second quarter, and remained there through the third quarter, bringing the cumulative year-to-date total to negative 262,000 square feet. Grubb & Ellis reports that a decline in net space usage by a number of large space users mostly the result of relocations contributed to 330,000 square feet of negative net absorption this quarter. Meanwhile, CB Richard Ellis reports year-to-date absorption (not net) of negative 2.7 million square feet. Reis expects modest improvement in the leasing climate over the remaining quarter of this year, resulting in a net absorption tally of negative 255,000 square feet for this year still, this is quite an improvement from last year s negative 2.9 million square feet. More tangible improvements in leasing are expected beginning with 2004, when the metro is forecast to see the positive net absorption of 513,000 square feet. However, net absorption activity will not be strong enough to overtake construction levels until 2005, at which point vacancy levels are expected to begin trending downward, according to Reis. RENTS Prices for Boston Office Rent Trends office space have 25% been declining at a 20% 15% troublesome pace 10% since the market 5% began to tank in 0% That year, -5% -10% asking rents fell -15% 6.2%, while -20% effective rents fell %. In 2002, Boston Northeast US US Source: Reis, Inc. the situation deteriorated further, with Reis reporting a drop in asking rents of 15.7%, while effective rates fell 19.7% a far cry from the 22% annual gain seen in both rent categories during Landlords have yet to get a break. Per third quarter 2003, Reis reports average asking and effective rents of $30.62 psf and $25.55 psf, respectively, down 1.8% and 2.5% from last quarter, and down 12.6% and 16.3% from one year ago. The wide gap between the asking and effective prices continues to indicate the large role being played by landlord concessions, such as free rent, high tenant improvement allowances and moving allowances. Class A space, in particular, is being offered up at bargain rates (relatively speaking), as landlords combat negative net absorption. In the third quarter, Reis reports that Class A asking rates fell 1.7% to $36.20 psf, while Class B rates decreased 1.9% to $23.86 Rent Change Copyright 2003 Reis, Inc. Page 8 6

16 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 psf. Per third quarter 2003, CB Richard Ellis reports an average CBD rental rate of $34.01 psf and a suburban rate of $18.14 psf. Reis expects overall average asking and effective rents to have fallen a total of 11.9% and 14.3%, respectively, by year-end Continued losses, albeit comparatively minor (around 2.0% for both rent categories) are expected next year, followed by very modest rent growth in SUBMARKETS CBD/Back Bay Sherin and Lodgen signed a lease for 35,700 square feet of office space at 101 Federal St. The 55-year-old firm, which specializes in transactional law and litigation, is relocating from 100 Summer Street to the top two floors of the 31-story office building, reports GlobeSt.com. The Boston waterfront is the place to be if construction activity and developer interest is any indicator. While the sluggish economy and the challenges of rebuilding the well-entrenched neighborhoods nearby have stalled some big projects, parts of an old elevated highway that walled off the water from the Downtown area are being demolished and replaced by a network of new roads, bridges, rapid transit and tunnels, reuniting the city and its waterfront, reports the New York Times. New sections of the Massachusetts Turnpike, Interstate 93 and the New Northern Avenue bridge have led to several projects being built in South Boston, including Manulife Financial s $140 million glass-clad office tower, a $700 million convention center with an adjoining 1,150- room Westin hotel, the Silver Line subway station, historic warehouses and a new building with 120 condominiums that is the first phase of Beacon s $350 million Channel Center mixed-use complex. And while rising vacancies and falling rents afflict this district, as well as the rest of the Boston area, investors and developers are still betting on the future of the almost 400-year-old waterfront. In recent weeks, two development teams submitted proposals vying for permission to build a 1.5-million-square-foot mixed-use project on a harbor parcel dubbed the Core Block by city planners. According to Reis, third quarter 2003 average vacancy in the million-square-foot CBD is estimated at 14.5%. The 12.7-millionsquare-foot Back Bay submarket s vacancy rate is reported at Copyright 2003 Reis, Inc. Page 9 7

17 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 17.8%, while the growing 6.8-million-square-foot South Station area s vacancy rate is reported at 19.2%. Per third quarter 2003, Reis reports an average asking rent of $40.61 psf in the CBD, $38.62 psf in Back Bay, and $32.57 psf in the South Station submarkets. In 2004, even more building is expected here, including the 330,000-square-foot Manulife Financial Center at 601 Congress Street in the South Station area and the 600,000-square-foot downtown office tower at 33 Arch Street. However, after more than a year of trying to pre-lease the 600,000- square-foot 33 Arch Street office tower, one tenant has yet to be signed. Congress Group Ventures and CB Richard Ellis/Whittier Partners, the property's new leasing agent, will launch an aggressive marketing campaign to emphasize the advantages of this smart building, which has advanced technology systems, elevators and enhanced security and safety systems. The campaign will also emphasize the fact that this building is likely to be the last Class A office tower to be completed in the city s financial district during this decade, reports GlobeSt.com. Berkeley Investments has acquired the 111,600-square-foot, 343 Congress Street from Intercontinental Real Estate Corp. for $26.8 million. Berkeley purchased the building on behalf of an undisclosed European investment group, reports GlobeSt.com. Cambridge For its 14.2-million-square-foot greater Cambridge submarket, Reis reports an average asking lease rate of $30.51 psf. An abundance of sublease space (primarily from technology companies) has contributed to this submarket s third quarter vacancy rate of 21.1%. Architects from around the world have presented proposals for North Point, a giant mixed-use development planned for a former rail yard mostly in East Cambridge near the Lechmere MBTA station, reports the Boston Globe. Over the next 15 years, the site is to become nineteen city blocks containing 5.2 million square feet of office and laboratory space, 2,700 condos and apartments, as well as retail space. Three proposals will be chosen one for each of the first three blocks with construction to start early next year. Copyright 2003 Reis, Inc. Page 10 8

18 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 Route 128 North At the end of the third quarter of 2003, Reis reports an average asking rent of $20.30 psf in the 20.2-million-square-foot North Shore/Route 128 North submarket, which includes Andover, Woburn, Burlington, and Malden, among other towns. A second quarter average vacancy rate of 28.2% is reported by Reis for this market the highest metrowide. West Per third quarter 2003, Reis reports an average asking rent of $27.45 psf in the 8.1-million-square-foot West/Mass Pike submarket. This submarket, which includes Weston, Waltham, Needham, and Natick, among other towns, currently has an average vacancy of 17.7%, according to Reis. For the 5.6-million-square-foot Framingham/West Suburban submarket, vacancy is reported at 23.8%, with an average asking rent of $21.57 psf. A partnership bought 265 Winter Street, an 89,500-square-foot office building in Waltham, for $11.5 million. An unidentified client advised by LaSalle Investment Management sold the property to a partnership led by the Cresset Group along with partners Hennessey Enterprises and Rye Development, reports GlobeSt.com. South Shore An average asking rent of $21.49 psf the South Shore submarket, which includes Braintree, Quincy and Dedham. Vacancy in this 10.7-million-square-foot submarket is 16.7%, according to Reis. Unable to lease the 183,000-square-foot BlueView Corporate Center on Route 128 in Canton for nearly a year, its owners sold the building for $24.7 million, reports the Boston Globe. Copyright 2003 Reis, Inc. Page 11 9

19 Q Office - Asset Advisor Reis Observer Reis Observer BOSTON OFFICE MARKET 2003 Q3 Outlook This market is expected to continue to be vexed by an overabundance of office space availabilities. Despite the market s high rate of vacancy, office development is expected to continue, including next year s completion of the 600,000-square-foot 33 Arch Street office project, pushing the average vacancy rate to a peak of near-20.0%, while lease rates are forced lower. A marked slowdown in construction activity in 2005, however, should give the market some much-needed breathing room. Coupled with resurgence in demand, vacancy levels should begin to decline in 2005, while rents more-or-less stabilize. For additional metro and submarket level information on the top 80 markets for the four principal property types, visit or call Reis at: (800) 366-REIS. Unless otherwise indicated, economic and demographic data provided by Economy. com Copyright 2003 Reis, Inc. Publication Date: November Reis, Inc. Page 12 10

20 Metro Analysis

21 Office - Asset Advisor 3rd Quarter 2003 Section 1 - Current Metro Rent Details Asking Rent by Age Asking Rent Distribution Asking Rent Growth Rate Distribution Year Built Rent Before 1970 $ $ $ $34.83 After 1994 $29.50 All $30.62 As of 09/30/03 Low 25% Mean Median 75% High $16.08 $22.12 $30.62 $28.23 $38.13 $50.35 Number of Properties Under $20.37 $24.65 $28.93 $33.21 $37.49 $41.77 $46.05 $20.36 $24.64 $28.92 $33.20 $37.48 $41.76 $46.04 Over Number of Properties Low 25% Mean Median 75% High - 8.9% - 2.8% - 1.8% - 1.5% 0.0% 4.0% Under - 8.0% - 6.4% - 4.8% - 3.2% - 1.6% - 8.1% - 6.5% - 4.9% - 3.3% - 1.7% - 0.1% % 1.5% % Over 649 Negative Growth Positive Growth 292 As of 09/30/03 Qtr Ending 09/30/03 Section 2 - Rent Growth Comparisons Quarterly Asking Rent Growth Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast Boston - 1.8% - 3.6% - 3.4% -15.7% - 1.1% 3.7% - 2.1% Northeast Region - 0.9% - 2.3% - 1.8% - 8.3% 2.3% 5.1% - 0.1% United States - 0.8% - 1.3% - 1.1% - 5.5% 0.7% 2.9% 0.5% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Metro Rank Total Metro Ranks Compared to: Metros 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Northeast United States % Asking Rent Growth Rate Trends and Forecast Boston Northeast US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 14

22 Office - Asset Advisor 3rd Quarter 2003 Section 3 - Current Metro Vacancy Details Vacancy Rate By Age Year Built Vac. Rate Before % % % % After % All 19.7% As of 09/30/03 Number of Properties Vacancy Rate Distribution Low 25% Mean Median 75% High 2.4% 6.6% 19.7% 13.5% 23.8% 91.2% Under 7.4% 7.5% 12.5% 17.5% 22.5% 27.5% 32.5% 37.5% 12.4% 17.4% 22.4% 27.4% 32.4% 37.4% Over As of 09/30/03 Section 4 - Vacancy Rate Comparisons Quarterly Vacancy Rates Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast Boston 19.7% 19.6% 19.2% 16.3% 10.5% 8.9% 18.0% Northeast Region 13.4% 13.0% 13.0% 11.5% 8.7% 8.6% 13.1% United States 16.8% 16.6% 16.6% 14.8% 11.6% 11.0% 15.4% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Metro Rank Total Metro Ranks Compared to: Metros 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Northeast United States % Vacancy Rate Trends and Forecast Boston Northeast US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 15

23 Office - Asset Advisor 3rd Quarter 2003 Section 5 - Metro Inventory Detail Inventory By Building Age Year Built Percent Before % % % % After % All 100.0% As of 09/30/03 Office Stock Traits Metro Low Mean Median High Size (units) 17, ,340 76, ,000 Distance to Highway (miles) Distance to CBD (miles) Distance to Landmark (miles) As of 09/30/03 Landmark = Coast Current Sample Size Properties Square Feet ,955,000 As of 09/30/03 Section 6 - Inventory Growth Comparison Quarterly Inventory Growth Rates Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast Boston - 0.0% 1.2% 0.4% 2.3% 3.4% 3.9% 0.7% Northeast Region 0.0% 0.3% 0.1% 0.6% 0.3% 0.6% 0.8% United States 0.1% 0.2% 0.2% 1.6% 2.5% 2.8% 0.9% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Metro Rank Total Metro Ranks Compared to: Metros 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Northeast United States % Inventory Growth Comparisons and Forecast Boston Northeast US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 16

24 Office - Asset Advisor 3rd Quarter 2003 Section 7 - Construction/Absorption Change Sq Ft Built Construction and Absorption Quarterly 3Q03 2Q03 YTD Avg Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Boston 160, , ,435, , ,333-87, Northeast 388,000-2,373, ,064, , ,000-1,082, Con/Abs Ratio Average over period ending: 09/30/03 09/30/03 09/30/03 06/30/03 06/30/03 06/30/03 09/30/03 09/30/03 09/30/03 Sq Ft Built Construction and Absorption Annualized 1 Year History 3 Year History 5 Year History Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Boston 2,711,000-2,879, ,069,333-1,873, ,303, , Northeast Region 8,867,000-10,292, ,052,000-11,378, ,688,400-1,249, Con/Abs Ratio Average over period ending: 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 Construction and Absorption Sq Ft Built Annualized 5 Year Forecast Sq Ft Absorbed Con/Abs Ratio Boston 877,200 1,524, Northeast 5,533,000 5,986, Average over period ending: 12/31/07 12/31/07 12/31/07 Construction/Absorption and Vacancy Square Feet Vacancy Rate (%) Constuction Absorption Vacancy Rate As of 09/30/03 Copyright 2003 Reis, Inc. Page 17

25 Office - Asset Advisor 3rd Quarter 2003 Section 8 - Submarket New Construction Project Tally Sq Ft Sq Ft Sq Ft Sq Ft Cumulative Rank Submarket Sq Ft Market Share Market share 1 CBD 179,000 1,020, , % 48.0% 2 Not in a Reis submarket 85, , % 63.6% 3 N Shore/Rt 128 N 397, ,000 15, % 77.7% 4 South Station 577, , % 87.5% 5 Northwest/Rt ,000 60, % 93.7% 6 Back Bay/Fenway 356, , % 97.1% 7 West/MassPike 354,000 52, % 98.7% 8 Framingham/W Subrn 504,800 45, % 100.0% 9 Cambridge 232, % 100.0% 10 S Shore/S Suburban 860, % 100.0% As of 09/30/03, based on actual projects (totals may differ from Reis Metro/SubTrend Futures) Copyright 2003 Reis, Inc. Page 18

26 Office - Asset Advisor 3rd Quarter 2003 Section 9 - New Construction Listing No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status DARTMOUTH ST BOSTON, MA 2116 Office SUFFOLK Back Bay/Fenway 356,000 8/ Complete 2 ONE BRIGHAM CIRCLE 1 BRIGHAM CIR BOSTON, MA 2120 Office SUFFOLK Back Bay/Fenway 115,000 6/ Complete BOYLSTON ST BOSTON, MA 2115 Office SUFFOLK Back Bay/Fenway 250,000 4.Proposed 4 33 ARCH ST BOSTON, MA 2110 Office SUFFOLK CBD 600,000 1/ Under Constr. 5 6 THE CAUSEWAY 226 CAUSEWAY MEDFORD ST BOSTON, MA 2114 HAYWARD PLACE WASHINGTON AVENUE DE LAFAYETTE BOSTON, MA 2111 Office SUFFOLK CBD 179,000 12/ Complete Office SUFFOLK CBD 330,000 4.Proposed 7 ONE LINCOLN STREET 1 LINCOLN ST BOSTON, MA 2111 Office SUFFOLK CBD 1,020,000 6/ Complete 8 45 PROVINCE BOSWORTH ST BOSTON, MA 2108 Office SUFFOLK CBD 212,980 4.Proposed TECHNOLOGY SQ 700 TECHNOLOGY WASHINGTON ST & PORTLAND CAMBRIDGE, MA 2139 BRIDGEVIEW CENTER 400 RUTHERFORD AVE CHARLESTOWN, MA 2129 Office MIDDLESEX Cambridge 42,086 1/ Complete Office SUFFOLK Cambridge 110,000 4.Proposed LANDSDOWNE ST 40 LANDSDOWNE ST CAMBRIDGE, MA 2139 Medical Office MIDDLESEX Cambridge 214,638 6/ Complete NEW ENGLAND DEVELOPMENT CENTER SWANSON RT 111 BOXBOROUGH, MA 1719 ASSEMBLY SQUARE [YARD 21] STURTEVANT ASSEMBLY SQ DR SOMERVILLE, MA 2145 Office MIDDLESEX Cambridge 415,000 4.Proposed Office MIDDLESEX Cambridge 2,039,800 4.Proposed 14 1 BOW ST CAMBRIDGE, MA 2138 Office MIDDLESEX Cambridge 26,000 1/ Complete WAVERLY OAKS RD WALTHAM, MA 2452 Office MIDDLESEX Cambridge 142,663 4.Proposed 16 CHARLESTOWN GATEWAY-BLDG 2 12 CITY SQ BOSTON, MA 2129 Office SUFFOLK Cambridge 34,000 12/ Complete 17 CHARLESTON GATEWAY BLDG 1 10 CITY SQ BOSTON, MA 2129 Office SUFFOLK Cambridge 130,000 12/ Complete 18 SOLOMON POND CORPORATE CTR PH I 100 ROBIN HILL ST MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 192,600 6/ Complete Copyright 2003 Reis, Inc. Page 19

27 Office - Asset Advisor 3rd Quarter 2003 No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status 19 9/90 CORPORATE CENTER 200 STAPLES DR FRAMINGHAM, MA 1702 Office MIDDLESEX Framingham/W Subrn 100,000 4.Proposed 20 CRANE MEADOW CORPORATE CENTER B CRANE MEADOW RD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 122,000 4.Proposed FOREST ST 219 FOREST ST MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 150,000 4.Proposed 22 METROWEST PLACE 405 COCHITUTE RD FRAMINGHAM, MA 1701 Office MIDDLESEX Framingham/W Subrn 45,000 2/ Complete LOCKE DR MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 66,000 4.Proposed 24 FOREST WILLIAMS ST MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 120,000 4.Proposed NICKERSON AMES RD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 115,000 4.Proposed NICKERSON AMES RD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 100,000 4.Proposed ROBIN HILL ST & GODDARD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 196,200 6/ Complete NICKERSON AMES RD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 60,000 4.Proposed FOREST ST 221 FOREST ST MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 150,000 4.Proposed CRANE MEADOW CORPORATE CENTER C CRANE MEADOW RD MARLBOROUGH, MA 1752 SOLOMON POND PARK 255 DONALD LYNCH LOWER BIGELOW ST MARLBOROUGH, MA 1752 SOLOMON POND PARK 200 DONALD LYNCH BLVD MARLBOROUGH, MA 1752 CRANE MEADOW CORPORATE CENTER A CRANE MEADOW RD MARLBOROUGH, MA 1752 Office MIDDLESEX Framingham/W Subrn 102,000 4.Proposed Office MIDDLESEX Framingham/W Subrn 150,000 4.Proposed Office MIDDLESEX Framingham/W Subrn 116,000 1/ Complete Office MIDDLESEX Framingham/W Subrn 176,000 4.Proposed 34 EXT 12 OF MASS HWY 9 & 30 FRAMINGHAM, MA 1701 Office MIDDLESEX Framingham/W Subrn 300,000 4.Proposed 35 BURLINGTON WOODS OFFICE PARK 4 BURLINGTON WOODS BURLINGTON, MA 1803 Office MIDDLESEX N Shore/Rt 128 N 100,000 4.Proposed 36 HARBOUR POINTE PK 70 EVERETT AVE CHELSEA, MA 2150 Office SUFFOLK N Shore/Rt 128 N 108,000 1/ Complete 37 TRADE CENTER EXECUTIVE PARK TRADE CTR RTE 38/MAIN ST WOBURN, MA 1801 Office MIDDLESEX N Shore/Rt 128 N 547,000 4.Proposed Copyright 2003 Reis, Inc. Page 20

28 Office - Asset Advisor 3rd Quarter 2003 No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status CONIFER HILL OFFICE PARK 99 CONIFER HILL RTE 128 N DANVERS, MA 1923 STONEHAM EXECUTIVE CENTER WOODLAND POND ST STONEHAM, MA 2180 STONEHAM EXECUTIVE CENTER WOODLAND POND ST STONEHAM, MA 2180 STONEHAM EXECUTIVE CENTER WOODLAND POND ST STONEHAM, MA 2180 STONEHAM EXECUTIVE CENTER WOODLAND POND ST STONEHAM, MA 2180 Office ESSEX N Shore/Rt 128 N 15,000 1/ Under Constr. Office MIDDLESEX N Shore/Rt 128 N 180,000 4.Proposed Office MIDDLESEX N Shore/Rt 128 N 180,000 4.Proposed Office MIDDLESEX N Shore/Rt 128 N 180,000 4.Proposed Office MIDDLESEX N Shore/Rt 128 N 250,000 4.Proposed EDGEWATER DR 701 EDGEWATER DR WAKEFIELD, MA 1880 Office MIDDLESEX N Shore/Rt 128 N 160,000 8/ Complete 44 ANDOVER OFFICE PARK 1 30 SHATTUCK RD ANDOVER, MA 1810 Office ESSEX N Shore/Rt 128 N 110,000 4.Proposed CUMMINGS CENTER 500 CUMMINGS CENTER BEVERLY, MA 1915 Office ESSEX N Shore/Rt 128 N 300,000 6/ Complete 46 STATELINE BUSINESS CENTER PELHAM I-93 METHUEN, MA 1844 Office ESSEX N Shore/Rt 128 N 74,921 4.Proposed 47 METRONORTH CORPORATE CENTER 400 PRESIDENTIAL METRONORTH & RT 93 WOBURN, MA 1801 Office MIDDLESEX N Shore/Rt 128 N 142,500 4.Proposed 48 CROSS POINT CHELMSFORD ST LOWELL, MA 1851 Office MIDDLESEX N Shore/Rt 128 N 400,000 4.Proposed 49 MINUTEMAN OFFICE PARK 150 MINUTEMAN RD ANDOVER, MA 1810 Office ESSEX N Shore/Rt 128 N 129,000 2/ Complete 50 MIDDLESEX POINT 1 ALBION RD BEDFORD, MA 1730 Office MIDDLESEX N Shore/Rt 128 N 90,000 4.Proposed 51 DRUM HILL TECHNICAL CENTER 1 TECHNOLOGY DR CHELMSFORD, MA 1863 Office MIDDLESEX N Shore/Rt 128 N 70,000 4.Proposed EDGEWATER DR 601 EDGEWATER DR WAKEFIELD, MA 1880 Office MIDDLESEX N Shore/Rt 128 N 160,000 1/ Complete QUANNAPOWITT PWY 50 QUANNAPOWITT NORTH AVE WAKEFIELD, MA 1880 Office MIDDLESEX N Shore/Rt 128 N 125,000 4.Proposed 54 AMES POND CORPORATE CENTER IV 299 AMES POND DR TEWKSBURY, MA 1876 Office MIDDLESEX N Shore/Rt 128 N 178,000 4.Proposed 55 WALTHAM WOODS CORPORATE CENTER PH IV 870 WINTER ST WALTHAM, MA 2451 Office MIDDLESEX Northwest/Rt 2 150,000 12/ Under Constr ND AVE WALTHAM, MA 2451 Office MIDDLESEX Northwest/Rt 2 60,000 4/ Planned Copyright 2003 Reis, Inc. Page 21

29 Office - Asset Advisor 3rd Quarter 2003 No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status GROTON RT 3 WESTFORD, MA 1886 Office MIDDLESEX Northwest/Rt 2 50,000 4.Proposed TH AVE 77 4TH AVE WALTHAM, MA 2451 Office MIDDLESEX Northwest/Rt 2 250,000 4.Proposed MORRISSEY I-93 BOSTON, MA 2125 Office SUFFOLK Not in a Reis submarket 80,000 4.Proposed 60 INTERNATIONAL CORPORATE PARK RTE495 HUDSON, MA 1479 Office MIDDLESEX Not in a Reis submarket 500,000 4.Proposed 61 DERRY MUNICIPAL CENTER PEARL MANNING ST DERRY, MA 3038 Government Office ROCKINGHAM Not in a Reis submarket 36,850 3/ Complete LAKEVILLE CORPORATE PARK PH III 30 RIVERSIDE RT 495 & RT 105 LAKEVILLE, MA 495/RT ONE OFFICE PARK TAUNTON WASHINGTON ST PLAINVILLE, MA 2762 Office PLYMOUTH Not in a Reis submarket 49,000 4.Proposed Office NORFOLK Not in a Reis submarket 525,000 6/ Proposed INDEPENDENCE DR CHESTNUT HILL, MA 2467 Office SUFFOLK Not in a Reis submarket 5,000 12/ Complete 65 CROSSTOWN CENTER 785 MASSACHUSETTS ALBANY ST BOSTON, MA 2118 Office SUFFOLK Not in a Reis submarket 220,000 4.Proposed BAY ST DORCHESTER, MA 2125 Office SUFFOLK Not in a Reis submarket 80,000 6/ Complete ARBORETUM DR II 100 ARBORETUM CORPORATE DR PORTSMOUTH, MA 3801 Office ROCKINGHAM Not in a Reis submarket 100,000 4.Proposed 68 NORTH QUINCY CORPORATE CENTER 201 HANCOCK ST QUINCY, MA 2171 Office NORFOLK S Shore/S Suburban 260,000 4.Proposed 69 BLUEVIEW CORPORATE CENTER 250 ROYAL RT 128 CANTON, MA 2021 Office NORFOLK S Shore/S Suburban 188,950 5/ Complete THE ABINGTON MEDICAL & PROFESSIONAL BLDG 360 BROCKTON GROVELAND ST ABINGTON, MA 2351 HINGHAM SHIPYARD SHIPYARD LINCOLN ST/SGT TERRY DR HINGHAM, MA 2043 Office PLYMOUTH S Shore/S Suburban 18,000 11/ Complete Office PLYMOUTH S Shore/S Suburban 39,099 4.Proposed 72 MILL POND BLDG E 51 MILL ST HANOVER, MA 2339 Office Condominiums PLYMOUTH S Shore/S Suburban 16,000 4/ Complete MILL POND BLDG D 51 MILL MILL ST & WASHINGTON ST HANOVER, MA 2339 DEDHAM TECHNOLOGY CENTER 250 ELM ROBINWOOD DR DEDHAM, MA 2026 Office Condominiums PLYMOUTH S Shore/S Suburban 5,000 4/ Complete Office NORFOLK S Shore/S Suburban 155,000 4.Proposed 75 FRANKLIN TECHNOLOGY CENTER UNION ST FRANKLIN, MA 2038 Office NORFOLK S Shore/S Suburban 245,000 4.Proposed Copyright 2003 Reis, Inc. Page 22

30 Office - Asset Advisor 3rd Quarter 2003 No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status CANTON UNIVERSITY AVE WESTWOOD, MA 2090 Office NORFOLK S Shore/S Suburban 60,000 4.Proposed 77 PEABODY BUILDING 536 GRANITE RT 1 & SR 3 BOSTON, MA 2184 Office NORFOLK S Shore/S Suburban 37,500 1/ Complete IVORY ST BRAINTREE, MA 2184 Office NORFOLK S Shore/S Suburban 91,723 4.Proposed 79 WEYMOUTH WOODS CORPORATE CTR 97 LIBBEY INDUSTRIAL MIDDLE ST WEYMOUTH, MA 2189 Office NORFOLK S Shore/S Suburban 100,000 2/ Complete 80 RIVER RIDGE OFFICE PK. 4 RIVER RIDGE ROAD NORWOOD, MA 2062 Office NORFOLK S Shore/S Suburban 117,000 4.Proposed BRAINTREE HILL OFFICE PARK 20 BRAINTREE HILL PARK OFC BRAINTREE, MA 2184 Office NORFOLK S Shore/S Suburban 160,000 4.Proposed DERBY ST HINGHAM, MA 2043 Office PLYMOUTH S Shore/S Suburban 97,000 4.Proposed 83 LEDGEWOOD PLACE BLDG III RTE RTE 228 (HINGHAM ST) ROCKLAND, MA 2370 Office PLYMOUTH S Shore/S Suburban 35,000 4.Proposed 84 NSTAR CORPORATE HEADQUARTERS 1 NSTAR WAY WESTWOOD, MA 2090 Office NORFOLK S Shore/S Suburban 500,000 6/ Complete QUINCY SCAMMELL ST QUINCY, MA 2169 Office NORFOLK S Shore/S Suburban 16,500 7/ Complete S MAIN ST MANSFIELD, MA 2048 Office BRISTOL S Shore/S Suburban 28,880 4.Proposed 87 1 SOUTH STATION 650 ATLANTIC AVE BOSTON, MA 2210 Office SUFFOLK South Station 1,050,000 4.Proposed 88 TWO FINANCIAL CENTER 201 ESSEX SOUTH ST BOSTON, MA 2111 Office SUFFOLK South Station 214,200 4.Proposed 89 WORLD TRADE CENTER WEST 155 SEAPORT BLVD BOSTON, MA 2210 Office SUFFOLK South Station 517,000 5/ Complete 90 PIER IV SEAPORT B ST BOSTON, MA 2210 Office SUFFOLK South Station 440,000 4.Proposed 91 RUSSIA WHARF CONGRESS ATLANTIC AVE BOSTON, MA 2210 Office SUFFOLK South Station 500,000 1/ Proposed BOSTON WHARF STILLINGS ST BOSTON, MA 2210 Office SUFFOLK South Station 60,000 1/ Complete 93 WORLD TRADE CENTER SOUTH SEAPORT NORTHERN AVE BOSTON, MA 2210 Office SUFFOLK South Station 518,000 4.Proposed 94 MANULIFE FINANCIAL BLDG 601 CONGRESS D ST BOSTON, MA 2101 Office SUFFOLK South Station 330,000 5/ Under Constr. Copyright 2003 Reis, Inc. Page 23

31 Office - Asset Advisor 3rd Quarter 2003 No. Property Name and Address Secondary Type County Submarket Size (Sq Ft) Est. Completion Status 95 SHOPS AT CHESTNUT HILL 1268 BOYLSTON RT 9 & TOLSTON ST CHESTNUT HILL, MA 2167 Office MIDDLESEX West/MassPike 50,000 4.Proposed 96 HIGHLAND DAVENPORT RD NEEDHAM, MA 2494 Office NORFOLK West/MassPike 35,000 4.Proposed 97 GREEN ST OFFICE BLDG 1 40 GREEN MAIN ST WALTHAM, MA 2451 Office MIDDLESEX West/MassPike 300,000 4.Proposed 98 GREEN ST OFFICE BLDG 2 40 GREEN MAIN ST WALTHAM, MA 2451 Office MIDDLESEX West/MassPike 300,000 4.Proposed WATER GALEN ST WATERTOWN, MA WALTHAM WESTON CORPORATE CENTER 201 JONES RT 128 & RT 20 WALTHAM, MA 2154 HILLSIDE CORPORATE CENTER 464 HILLSIDE WEST ST NEEDHAM, MA STONY BROOK OFFICE PARK 130 TURNER ST WALTHAM, MA 2453 Office MIDDLESEX West/MassPike 150,000 4.Proposed Office MIDDLESEX West/MassPike 304,000 1/ Complete Office NORFOLK West/MassPike 50,000 12/ Complete Office MIDDLESEX West/MassPike 52,500 3/ Complete Copyright 2003 Reis, Inc. Page 24

32 Office - Asset Advisor 3rd Quarter 2003 Section 10 - Market Data by Building Class - Class A Properties Year Quarter Inventory (Sq Ft) Completions Vac % Vacant Stock Occupied Stock Net Abs Asking Rent($) Rent Change Constr/ Abs Abs/Occ Stock % Gr Rev. Unit ($) 1990 Y 49,543,000 3,953, % 7,586,000 41,957,000 1,751,000 $ % $ Y 50,453,000 1,073, % 8,133,000 42,320, ,000 $ % $ Y 50,603, , % 8,314,000 42,289,000-31,000 $ % $ Y 51,701, , % 7,399,000 44,302,000 2,013,000 $ % $ Y 51,701, % 5,317,000 46,384,000 2,082,000 $ % $ Y 51,921, , % 4,132,000 47,789,000 1,405,000 $ % $ Y 52,096, , % 2,943,000 49,153,000 1,364,000 $ % $ Y 52,285, , % 2,393,000 49,892, ,000 $ % $ Y 54,206,000 1,911, % 2,321,000 51,885,000 1,993,000 $ % $ ,924, , % 2,203,000 52,721, ,000 $ % $ ,595, , % 2,409,000 53,186, ,000 $ % $ ,775, , % 1,837,000 53,938, ,000 $ % $ ,923, , % 1,781,000 55,142,000 1,204,000 $ % $ Y 56,923,000 2,413, % 1,781,000 55,142,000 3,257,000 $ % $ ,923, % 1,648,000 55,275, ,000 $ % $ ,523, , % 1,343,000 56,180, ,000 $ % $ ,613,000 1,090, % 1,143,000 57,470,000 1,290,000 $ % $ ,079,000 1,466, % 1,537,000 58,542,000 1,072,000 $ % $ Y 60,079,000 3,156, % 1,537,000 58,542,000 3,400,000 $ % $ ,324, , % 2,776,000 57,548, ,000 $ % $ ,706, , % 4,331,000 56,375,000-1,173,000 $ % $ ,729,000 2,086, % 6,243,000 56,486, ,000 $ % $ ,412, , % 8,167,000 55,245,000-1,241,000 $ % $ Y 63,412,000 3,918, % 8,167,000 55,245,000-3,297,000 $ % $ ,947, , % 9,026,000 54,921, ,000 $ % $ ,846, , % 9,547,000 55,299, ,000 $ % $ ,202, , % 10,372,000 54,830, ,000 $ % $ ,366, , % 11,528,000 53,838, ,000 $ % $ Y 65,366,000 1,954, % 11,528,000 53,838,000-1,407,000 $ % $ ,419,000 53, % 11,243,000 54,176, ,000 $ % $ ,854,000 1,435, % 12,501,000 54,353, ,000 $ % $ ,825, , % 12,392,000 54,433,000 80,000 $ % $29.49 Copyright 2003 Reis, Inc. Page 25

33 Office - Asset Advisor 3rd Quarter 2003 Section 11 - Market Data by Building Class - Class B/C Properties Year Quarter Inventory (Sq Ft) Completions Vac % Vacant Stock Occupied Stock Net Abs Asking Rent($) Rent Change Constr/ Abs Abs/Occ Stock % Gr Rev. Unit ($) 1990 Y 46,871,000 1,321, % 10,844,000 36,027, ,000 $ % $ Y 47,080,000 46, % 10,698,000 36,382, ,000 $ % $ Y 46,833, % 8,977,000 37,856,000 1,474,000 $ % $ Y 47,018, , % 7,925,000 39,093,000 1,237,000 $ % $ Y 46,993,000 37, % 6,300,000 40,693,000 1,600,000 $ % $ Y 46,731, % 5,244,000 41,487, ,000 $ % $ Y 46,244, % 3,789,000 42,455, ,000 $ % $ Y 47,195, , % 2,786,000 44,409,000 1,954,000 $ % $ Y 48,833,000 1,718, % 3,218,000 45,615,000 1,206,000 $ % $ ,675, , % 3,645,000 46,030, ,000 $ % $ ,515,000 1,840, % 4,224,000 47,291,000 1,261,000 $ % $ ,560,000 45, % 3,395,000 48,165, ,000 $ % $ ,101, , % 3,404,000 48,697, ,000 $ % $ Y 52,101,000 3,268, % 3,404,000 48,697,000 3,082,000 $ % $ ,312, , % 3,361,000 48,951, ,000 $ % $ ,276, % 2,747,000 49,529, ,000 $ % $ ,319,000 43, % 2,397,000 49,922, ,000 $ % $ ,901, , % 2,875,000 50,026, ,000 $ % $ Y 52,901, , % 2,875,000 50,026,000 1,329,000 $ % $ ,456, , % 3,810,000 49,646, ,000 $ % $ ,499,000 64, % 5,066,000 48,433,000-1,213,000 $ % $ ,602, , % 6,719,000 46,883,000-1,550,000 $ % $ ,302, , % 8,446,000 45,856,000-1,027,000 $ % $ Y 54,302,000 1,587, % 8,446,000 45,856,000-4,170,000 $ % $ ,728, , % 9,965,000 44,763,000-1,093,000 $ % $ ,838, % 10,206,000 44,632, ,000 $ % $ ,838, % 10,155,000 44,683,000 51,000 $ % $ ,085, , % 10,702,000 44,383, ,000 $ % $ Y 55,085, , % 10,702,000 44,383,000-1,473,000 $ % $ ,130,000 45, % 10,909,000 44,221, ,000 $ % $ ,130, % 11,422,000 43,708, ,000 $ % $ ,130, % 11,605,000 43,525, ,000 $ % $18.84 Copyright 2003 Reis, Inc. Page 26

34 Office - Asset Advisor 3rd Quarter 2003 Section 12 - Submarket Snapshot CBD Submarket Back Bay/Fenway South Station Cambridge West/MassPike N Shore/Rt 128 N Northwest/Rt 2 S Shore/S Suburban Framingham/W Subrn Inventory (Buildings) Inventory (Sq Ft) Asking Rent $ CRD % Vac % Free Rent (mos) Expenses $ (Commercial) Expenses % (Apartment) Lease Term (yrs) Leasing Commission % Tenant Improvements $ ,140,000 $ % 14.5% 2.1 $12.91 N/A % $ ,712,000 $ % 17.8% 2.4 $14.02 N/A % $ ,754,000 $ % 19.2% 2.1 $ 8.88 N/A % $ ,212,000 $ % 21.1% 1.9 $ 9.43 N/A % $ ,149,000 $ % 17.7% 1.9 $ 8.13 N/A % $ ,246,000 $ % 28.2% 1.7 $ 6.19 N/A % $ ,493,000 $ % 21.9% 2.0 $ 7.76 N/A % $ ,660,000 $ % 16.7% 1.8 $ 6.53 N/A % $ ,589,000 $ % 23.8% 1.8 $ 6.50 N/A % $11.28 Copyright 2003 Reis, Inc. Page 27

35 Office - Asset Advisor 3rd Quarter 2003 Section 13 - Economic and Demographic Trends Boston Employment Trends Percentage Change 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% Total Employment Office Employment Provided by Economy.com, Period ending 12/31/07 Total Employment Growth Trends Metro vs. Region & U.S. Percentage Change 2.0% 1.0% 0.0% -1.0% -2.0% Boston Northeast US Provided by Economy.com, Period ending 12/31/07 Percentage Change 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Boston Population/Household Growth Trends Population Avg. HH Income Provided by Economy.com, Period ending 12/31/07 Copyright 2003 Reis, Inc. Page 28

36 Office - Asset Advisor 3rd Quarter 2003 Section 14 - Submarket Boundaries Submarkets 1 Central Business District 2 Back Bay/Fenway 3 South Station/Ft. Point Channel 4 Cambridge/Charlestown/Somerville 5 West/MassPike/Route North Shore/Route 128 North 7 Northwest/Route 2 8 South Shore/South Suburban 9 Framingham/West Suburban Copyright 2003 Reis, Inc. Page 29

37 Office - Asset Advisor 3rd Quarter 2003 Section 15 - Metro Data Year Qtr Inventory SF/Units Completions Inventory Growth% Vacant Stock Vacancy Rate Vacancy Change(%) Occupied Stock Net Absorption Asking Rent Ask Rent % Chg 1998 Y 103,039,000 3,629, % 5,539, % 0.2% 97,500,000 3,200,000 $ % 1999 Y 109,024,000 5,681, % 5,185, % - 0.6% 103,839,000 6,339,000 $ % 2000 Y 112,980,000 3,992, % 4,409, % - 0.9% 108,571,000 4,732,000 $ % ,714,000 1,620, % 16,615, % 3.0% 101,099,000-2,273,000 $ % 2001 Y 117,714,000 5,505, % 16,615, % 10.2% 101,099,000-7,472,000 $ % ,675,000 1,045, % 18,990, % 1.9% 99,685,000-1,414,000 $ % ,684, , % 19,752, % 0.5% 99,932, ,000 $ % ,040, , % 20,526, % 0.6% 99,514, ,000 $ % ,451, , % 22,231, % 1.4% 98,220,000-1,294,000 $ % 2002 Y 120,451,000 2,711, % 22,231, % 4.4% 98,220,000-2,879,000 $ % ,549,000 98, % 22,154, % - 0.1% 98,395, ,000 $ % ,984,000 1,435, % 23,923, % 1.2% 98,061, ,000 $ % ,955, , % 23,997, % 0.1% 97,958, ,000 $ % 2003 Y 121,955,000 1,693, % 23,990, % 1.2% 97,965, ,000 $ % 2004 Y 122,900, , % 24,422, % 0.2% 98,478, ,000 $ % 2005 Y 122,980,000 80, % 22,882, % - 1.3% 100,098,000 1,620,000 $ % 2006 Y 123,227, , % 20,742, % - 1.8% 102,485,000 2,387,000 $ % 2007 Y 124,648,000 1,421, % 18,805, % - 1.7% 105,843,000 3,358,000 $ % Year Qtr Effective Rent Eff Rent % Cons/ Abs Chg Abs/Occ Stock% Population Pop% Chg Employment Emp% Chg Off Emp Off Emp Pct Chg Avg HH Income AHHI% Chg 1998 Y $ % % 5,997, % 3,117, % 939, % $89, % 1999 Y $ % % 6,046, % 3,188, % 967, % $94, % 2000 Y $ % % 6,098, % 3,284, % 998, % $104, % $ % % 6,142, % 3,209, % 975, % $103, % 2001 Y $ % % 6,142, % 3,209, % 975, % $103, % $ % % 6,148, % 3,185, % 968, % $103, % $ % % 6,152, % 3,174, % 963, % $105, % $ % % 6,156, % 3,163, % 959, % $104, % $ % % 6,160, % 3,153, % 957, % $104, % 2002 Y $ % % 6,160, % 3,153, % 957, % $104, % $ % % 6,164, % 3,139, % 951, % $105, % $ % % 6,170, % 3,118, % 945, % $105, % $ % % 6,175, % 3,114, % 944, % $106, % 2003 Y $ % % 6,181, % 3,116, % 945, % $107, % 2004 Y $ % % 6,209, % 3,165, % 962, % $110, % 2005 Y $ % % 6,237, % 3,223, % 982, % $113, % 2006 Y $ % % 6,262, % 3,266, % 997, % $117, % 2007 Y $ % % 6,283, % 3,298, % 1,007, % $121, % Copyright 2003 Reis, Inc. Page 30

38 Submarket Analysis

39 Office - Asset Advisor 3rd Quarter 2003 Submarket: CBD Section 16 - Current Submarket Rent Details Asking Rent by Age Asking Rent Distribution Asking Rent Growth Rate Distribution Year Built Rent Before 1970 $ $ $ $46.58 After 1994 $43.03 All $40.61 As of 09/30/03 Low 25% Mean Median 75% High $24.16 $33.82 $40.61 $41.58 $47.64 $ Number of Properties Under $27.54 $30.91 $34.28 $37.65 $41.02 $44.39 $47.76 $27.53 $30.90 $34.27 $37.64 $41.01 $44.38 $47.75 Over Low 25% Mean Median 75% High -11.1% - 3.4% - 2.6% - 2.3% - 1.3% 1.0% Number of Properties Under - 9.0% - 7.5% - 6.0% - 4.5% - 3.0% - 1.5% 0.0% - 9.1% - 7.6% - 6.1% - 4.6% - 3.1% - 1.6% - 0.1% Over Negative Growth Positive Growth 20 As of 09/30/03 Qtr Ending 09/30/03 Section 17 - Rent Growth Comparisons Quarterly Asking Rent Growth Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast CBD - 2.6% - 2.9% - 4.0% -16.0% - 0.9% 5.5% - 2.3% Boston - 1.8% - 3.6% - 3.4% -15.7% - 1.1% 3.7% - 2.1% Northeast Region - 0.9% - 2.3% - 1.8% - 8.3% 2.3% 5.1% - 0.1% United States - 0.8% - 1.3% - 1.1% - 5.5% 0.7% 2.9% 0.5% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Submarket Rank Total Submarket Ranks Compared to: Subs 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Boston Northeast US % Asking Rent Growth Rate Trends and Forecast CBD Boston Northeast US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 32

40 Office - Asset Advisor 3rd Quarter 2003 Submarket: CBD Section 18 - Current Submarket Vacancy Details Vacancy Rate By Age Year Built Vac. Rate Before % % % % After % All 14.5% As of 09/30/03 Number of Properties Vacancy Rate Distribution Low 25% Mean Median 75% High 1.9% 5.8% 14.5% 10.3% 21.0% 51.6% Under 6.9% 7.0% 12.0% 17.0% 22.0% 27.0% 32.0% 37.0% 11.9% 16.9% 21.9% 26.9% 31.9% 36.9% Over As of 09/30/03 Section 19 - Vacancy Rate Comparisons Quarterly Vacancy Rates Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast CBD 14.5% 14.1% 13.6% 10.8% 6.9% 6.4% 14.7% Boston 19.7% 19.6% 19.2% 16.3% 10.5% 8.9% 18.0% Northeast Region 13.4% 13.0% 13.0% 11.5% 8.7% 8.6% 13.1% United States 16.8% 16.6% 16.6% 14.8% 11.6% 11.0% 15.4% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Submarket Rank Total Submarket Ranks Compared to: Subs 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Boston Northeast US % Vacancy Rate Trends and Forecast 15.0 CBD Boston 10.0 Northeast 5.0 US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 33

41 Office - Asset Advisor 3rd Quarter 2003 Section 20 - Submarket Inventory Detail Submarket: CBD Inventory By Building Age Year Built Percent Before % % % % After % All 100.0% As of 09/30/03 Office Stock Traits Submarket Low Mean Median High Year Built Size (Sq. ft.) 17, , ,000 1,071,415 Distance to Highway (miles) Distance to CBD (miles) Distance to Landmark (miles) As of 09/30/03 Landmark = Coast Current Sample Size Properties Square Feet CBD ,140,000 Share of Metro 16.0% 26.0% As of 09/30/03 Section 21 - Inventory Growth Comparison Quarterly Inventory Growth Rates Annualized 3Q03 2Q03 YTD Avg 1 Year 3 Year 5 Year 5 Yr Forecast CBD 0.0% 3.3% 1.1% 0.6% 0.5% 0.8% 1.2% Boston - 0.0% 1.2% 0.4% 2.3% 3.4% 3.9% 0.7% Northeast Region 0.0% 0.3% 0.1% 0.6% 0.3% 0.6% 0.8% United States 0.1% 0.2% 0.2% 1.6% 2.5% 2.8% 0.9% Average over period ending: 09/30/03 06/30/03 09/30/03 12/31/02 12/31/02 12/31/02 12/31/07 Submarket Rank Total Submarket Ranks Compared to: Subs 3Q03 2Q03 YTD 1 Year 3 Year 5 Year 5 Yr Forecast Boston Northeast % Inventory Growth Comparisons and Forecast CBD Boston Northeast US Period ending 09/30/03 Copyright 2003 Reis, Inc. Page 34

42 Office - Asset Advisor 3rd Quarter 2003 Section 22 - Construction/Absorption Change Submarket: CBD Sq Ft Built Construction and Absorption Quarterly 3Q03 2Q03 YTD Avg Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed CBD 0-128, ,020, , ,000 62, Boston 160, , ,435, , ,333-87, Con/Abs Ratio Average over period ending: 09/30/03 09/30/03 09/30/03 06/30/03 06/30/03 06/30/03 09/30/03 09/30/03 09/30/03 Sq Ft Built Construction and Absorption Annualized 1 Year History 3 Year History 5 Year History Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed Con/Abs Ratio Sq Ft Built Sq Ft Absorbed CBD 179, , , , , , Boston 2,711,000-2,879, ,069,333-1,873, ,303, , Con/Abs Ratio Average over period ending: 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 12/31/02 Construction and Absorption Sq Ft Built Annualized 5 Year Forecast Sq Ft Absorbed Con/Abs Ratio CBD 366, , Boston 877,200 1,524, Average over period ending: 12/31/07 12/31/07 12/31/07 Construction/Absorption and Vacancy Square Feet Vacancy Rate (%) Constuction Absorption Vacancy Rate As of 09/30/03 Copyright 2003 Reis, Inc. Page 35

43 Office - Asset Advisor 3rd Quarter 2003 Section 23 - Market Data by Building Class - Class A Properties Submarket: CBD Year Quarter Inventory (Sq Ft) Completions Vac % Vacant Stock Occupied Stock Net Abs Asking Rent($) Rent Change Constr/ Abs Abs/Occ Stock % Gr Rev. Unit ($) 1995 Y 20,980, % 2,052,000 18,928, ,000 $ % $ Y 20,980, % 1,380,000 19,600, ,000 $ % $ Y 20,980, % 1,009,000 19,971, ,000 $ % $ Y 20,980, % 781,000 20,199, ,000 $ % $ ,530, , % 854,000 20,676, ,000 $ % $ ,530, % 791,000 20,739,000 63,000 $ % $ ,530, % 565,000 20,965, ,000 $ % $ ,834, % 584,000 21,250, ,000 $ % $ Y 21,834, , % 584,000 21,250,000 1,051,000 $ % $ ,834, % 482,000 21,352, ,000 $ % $ ,834, % 393,000 21,441,000 89,000 $ % $ ,184, , % 334,000 21,850, ,000 $ % $ ,184, % 268,000 21,916,000 66,000 $ % $ Y 22,184, , % 268,000 21,916, ,000 $ % $ ,184, % 734,000 21,450, ,000 $ % $ ,184, % 1,016,000 21,168, ,000 $ % $ ,121, % 1,043,000 21,078,000-90,000 $ % $ ,121, % 1,809,000 20,312, ,000 $ % $ Y 22,121, % 1,809,000 20,312,000-1,604,000 $ % $ ,121, % 1,834,000 20,287,000-25,000 $ % $ ,121, % 1,861,000 20,260,000-27,000 $ % $ ,121, % 1,950,000 20,171,000-89,000 $ % $ ,121, % 2,383,000 19,738, ,000 $ % $ Y 22,121, % 2,383,000 19,738, ,000 $ % $ ,121, % 2,232,000 19,889, ,000 $ % $ ,141,000 1,020, % 2,803,000 20,338, ,000 $ % $ ,141, % 2,926,000 20,215, ,000 $ % $38.65 Copyright 2003 Reis, Inc. Page 36

44 Office - Asset Advisor 3rd Quarter 2003 Section 24 - Market Data by Building Class - Class B/C Properties Submarket: CBD Year Quarter Inventory (Sq Ft) Completions Vac % Vacant Stock Occupied Stock Net Abs Asking Rent($) Rent Change Constr/ Abs Abs/Occ Stock % Gr Rev. Unit ($) 1995 Y 9,226, % 1,483,000 7,743,000 13,000 $ % $ Y 8,863, % 1,007,000 7,856, ,000 $ % $ Y 8,863, % 692,000 8,171, ,000 $ % $ Y 8,783, % 618,000 8,165,000-6,000 $ % $ ,783, % 601,000 8,182,000 17,000 $ % $ ,783, % 725,000 8,058, ,000 $ % $ ,783, % 557,000 8,226, ,000 $ % $ ,783, % 549,000 8,234,000 8,000 $ % $ Y 8,783, % 549,000 8,234,000 69,000 $ % $ ,783, % 528,000 8,255,000 21,000 $ % $ ,783, % 526,000 8,257,000 2,000 $ % $ ,783, % 440,000 8,343,000 86,000 $ % $ ,783, % 476,000 8,307,000-36,000 $ % $ Y 8,783, % 476,000 8,307,000 73,000 $ % $ ,783, % 660,000 8,123, ,000 $ % $ ,803,000 20, % 718,000 8,085,000-38,000 $ % $ ,803, % 848,000 7,955, ,000 $ % $ ,820,000 17, % 1,055,000 7,765, ,000 $ % $ Y 8,820,000 37, % 1,055,000 7,765, ,000 $ % $ ,820, % 1,260,000 7,560, ,000 $ % $ ,820, % 1,202,000 7,618,000 58,000 $ % $ ,820, % 1,299,000 7,521,000-97,000 $ % $ ,999, , % 1,446,000 7,553,000 32,000 $ % $ Y 8,999, , % 1,446,000 7,553, ,000 $ % $ ,999, % 1,565,000 7,434, ,000 $ % $ ,999, % 1,729,000 7,270, ,000 $ % $ ,999, % 1,734,000 7,265,000-5,000 $ % $25.24 Copyright 2003 Reis, Inc. Page 37

45 Office - Asset Advisor 3rd Quarter 2003 Section 25 - Submarket Data Submarket: CBD Year Qtr Inventory SF/Units Completions Inventory Growth% Vacant Stock Vacancy Rate Vacancy Change(%) Occupied Stock Net Absorption Asking Rent Ask Rent % Chg 1998 Y 29,763, % 1,399, % - 1.0% 28,364, ,000 $ % 1999 Y 30,617, , % 1,133, % - 1.0% 29,484,000 1,120,000 $ % 2000 Y 30,967, , % 743, % - 1.3% 30,224, ,000 $ % ,941,000 17, % 2,865, % 3.2% 28,076, ,000 $ % 2001 Y 30,941,000 37, % 2,865, % 6.9% 28,076,000-2,148,000 $ % ,941, % 3,094, % 0.7% 27,847, ,000 $ % ,941, % 3,063, % - 0.1% 27,878,000 31,000 $ % ,941, % 3,249, % 0.6% 27,692, ,000 $ % ,120, , % 3,828, % 1.8% 27,292, ,000 $ % 2002 Y 31,120, , % 3,828, % 3.0% 27,292, ,000 $ % ,120, % 3,797, % - 0.1% 27,323,000 31,000 $ % ,140,000 1,020, % 4,532, % 1.9% 27,608, ,000 $ % ,140, % 4,660, % 0.4% 27,480, ,000 $ % 2003 Y 32,140,000 1,020, % 4,942, % 3.1% 27,198,000-94,000 $ % 2004 Y 32,740, , % 5,324, % 0.9% 27,416, ,000 $ % 2005 Y 32,740, % 4,887, % - 1.4% 27,853, ,000 $ % 2006 Y 32,740, % 4,564, % - 1.0% 28,176, ,000 $ % 2007 Y 32,953, , % 4,265, % - 1.0% 28,688, ,000 $ % Year Qtr Effective Rent Eff Rent % Chg Cons/ Abs Abs/Occ Stock% 1998 Y $ % % 1999 Y $ % % 2000 Y $ % % $ % % 2001 Y $ % % $ % % $ % % $ % % $ % % 2002 Y $ % % $ % % $ % % $ % % 2003 Y $ % % 2004 Y $ % % 2005 Y $ % % 2006 Y $ % % 2007 Y $ % % Copyright 2003 Reis, Inc. Page 38

46 Rent Comps

47 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, SUBJECT PROPERTY Subject Property Location Address 503 Federal City Boston State MA ZIP Metro Boston Submarket CBD Subject Property Stats Property Type Office Year Built 1990 Size (SF) 500,000 Latitude Longitude COMP GROUP MARKET SUMMARY Comp Group Summary Stats Low Mean Median High Current Asking Rent/SF $32.00 $41.85 $39.25 $51.25 Current Vacancy Rate 3.1% 13.7% 11.1% 30.1% Operating Expenses/SF $9.23 $14.10 $13.48 $17.37 Real Estate Taxes/SF $3.64 $6.86 $5.50 $10.48 Property Size (SF) 220, , ,500 1,098,000 Year built As of 6/30/03 LEASE TERMS Avg. Submarket Lease Terms Contract Rent Discount -5.9% Free Rent (months/lease) 2.1 Lease Length (years) 6.3 Tenant Improvements/SF $23.54 Commissions 2.8% As of 6/30/03 Copyright 2003 Reis, Inc. Page 40

48 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LOCATION Copyright 2003 Reis, Inc. Page 41

49 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LISTING 1 Name Oliver Street Tower Ph II Current Asking Rent/SF $50.25 Address 125 High St Current Vacancy Rate 6.8% City Boston Distance from Subject (miles) 0.17 State MA Property Size (SF) 490,000 Zip Floors 21 County Suffolk Year Built 1991 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 2 Name 125 Summer Street Building Current Asking Rent/SF $38.57 Address 125 Summer St Current Vacancy Rate 26.9% City Boston Distance from Subject (miles) 0.09 State MA Property Size (SF) 463,691 Zip Floors 22 County Suffolk Year Built 1989 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 3 Name Federal Center Current Asking Rent/SF $32.57 Address 150 Federal St Current Vacancy Rate 13.8% City Boston Distance from Subject (miles) 0.04 State MA Property Size (SF) 529,730 Zip Floors 28 County Suffolk Year Built 1988 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 4 Name 101 Federal Street Current Asking Rent/SF $39.00 Address 101 Federal St Current Vacancy Rate 21.8% City Boston Distance from Subject (miles) 0.08 State MA Property Size (SF) 543,000 Zip Floors 31 County Suffolk Year Built 1988 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 Copyright 2003 Reis, Inc. Page 42

50 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LISTING 5 Name 75 State Street Building Current Asking Rent/SF $32.00 Address 75 State St Current Vacancy Rate 7.6% City Boston Distance from Subject (miles) 0.37 State MA Property Size (SF) 742,106 Zip Floors 31 County Suffolk Year Built 1988 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 6 Name 260 Franklin Street Current Asking Rent/SF $40.26 Address 260 Franklin St Current Vacancy Rate 11.6% City Boston Distance from Subject (miles) 0.22 State MA Property Size (SF) 348,901 Zip Floors 23 County Suffolk Year Built 1985 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 7 Name 101 Arch Street Current Asking Rent/SF $33.47 Address 101 Arch St Current Vacancy Rate 30.1% City Boston Distance from Subject (miles) 0.17 State MA Property Size (SF) 376,955 Zip Floors 21 County Suffolk Year Built 1988 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 8 Name High Street Tower Ph I Current Asking Rent/SF $44.50 Address 125 High St Current Vacancy Rate 4.6% City Boston Distance from Subject (miles) 0.17 State MA Property Size (SF) 950,000 Zip Floors 30 County Suffolk Year Built 1990 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 Copyright 2003 Reis, Inc. Page 43

51 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LISTING 9 Name 1 Congress Street Current Asking Rent/SF $40.71 Address 1 Congress St # 1 Current Vacancy Rate 5.1% City Boston Distance from Subject (miles) 0.62 State MA Property Size (SF) 250,000 Zip Floors 2 County Suffolk Year Built 1990 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 10 Name The Paine Webber Building Current Asking Rent/SF $38.32 Address 265 Franklin St Current Vacancy Rate 29.7% City Boston Distance from Subject (miles) 0.25 State MA Property Size (SF) 317,000 Zip Floors 20 County Suffolk Year Built 1984 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 11 Name 99 Summer Street Current Asking Rent/SF $35.00 Address 99 Summer St Current Vacancy Rate 5.2% City Boston Distance from Subject (miles) 0.10 State MA Property Size (SF) 272,000 Zip Floors 20 County Suffolk Year Built 1987 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 12 Name 222 Berkeley Street Current Asking Rent/SF $44.89 Address 222 Berkeley St Current Vacancy Rate 16.1% City Boston Distance from Subject (miles) 0.90 State MA Property Size (SF) 475,000 Zip Floors 22 County Suffolk Year Built 1991 Submarket Back Bay/Fenway Class A Submarket ID 2 Data as of 6/30/03 Copyright 2003 Reis, Inc. Page 44

52 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LISTING 13 Name 1 International Place Current Asking Rent/SF $50.00 Address 1 International Pl Current Vacancy Rate 25.0% City Boston Distance from Subject (miles) 0.23 State MA Property Size (SF) 1,028,000 Zip Floors 46 County Suffolk Year Built 1987 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 14 Name 500 Boylston Street Current Asking Rent/SF $47.42 Address 500 Boylston St Current Vacancy Rate 15.0% City Boston Distance from Subject (miles) 0.97 State MA Property Size (SF) 641,000 Zip Floors 25 County Suffolk Year Built 1988 Submarket Back Bay/Fenway Class A Submarket ID 2 Data as of 6/30/03 15 Name 1 Post Office Square Current Asking Rent/SF $51.25 Address 1 Post Office Sq Current Vacancy Rate 12.1% City Boston Distance from Subject (miles) 0.27 State MA Property Size (SF) 766,000 Zip Floors 41 County Suffolk Year Built 1981 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 16 Name Exchange Place Current Asking Rent/SF $34.33 Address 53 State St Current Vacancy Rate 10.5% City Boston Distance from Subject (miles) 0.37 State MA Property Size (SF) 1,071,415 Zip Floors 40 County Suffolk Year Built 1984 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 Copyright 2003 Reis, Inc. Page 45

53 Office - Asset CompQuote Advisor Rent Plus Comps 503 Federal, Boston, Boston, MA -- 12/16/2003 MA, COMP GROUP LISTING 17 Name 1 Financial Center Current Asking Rent/SF $48.45 Address 1 Financial Ctr Lbby 1 Current Vacancy Rate 10.3% City Boston Distance from Subject (miles) 0.03 State MA Property Size (SF) 1,098,000 Zip Floors 46 County Suffolk Year Built 1984 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 18 Name 399 Boylston Street Current Asking Rent/SF $32.00 Address 399 Boylston St Current Vacancy Rate 5.3% City Boston Distance from Subject (miles) 0.85 State MA Property Size (SF) 280,000 Zip Floors 13 County Suffolk Year Built 1984 Submarket Back Bay/Fenway Class A Submarket ID 2 Data as of 6/30/03 19 Name 255 State Street Current Asking Rent/SF $38.55 Address 255 State St Current Vacancy Rate 3.1% City Boston Distance from Subject (miles) 0.38 State MA Property Size (SF) 220,430 Zip Floors 12 County Suffolk Year Built 1982 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 20 Name 50 Milk Street Current Asking Rent/SF $39.50 Address 50 Milk St Current Vacancy Rate 10.5% City Boston Distance from Subject (miles) 0.22 State MA Property Size (SF) 267,000 Zip Floors 21 County Suffolk Year Built 1981 Submarket Central Business District Class A Submarket ID 1 Data as of 6/30/03 Copyright 2003 Reis, Inc. Page 46

54 Sales Comparables

55 Office - Asset Advisor Sales Comparables 503 Federal Boston, MA, Sales Comparables Office Subject Property Location Name Asset Advisor Address/Area Searched 503 Federal, Boston, MA, Metro Boston Comparables Group Attributes Comparables Group Summary Statistics Low Average High Gross Building Area (SF) 350, , ,000 Net Rentable Area (SF) 570, , ,000 Unspecified Building Area (SF) Number of Floors Year Built Distance From Subject (miles) Time Since Sale (months) Sale Price $82,200,000 $105,706,750 $133,500,000 Sale Price PSF (Gross Area) $235 $235 $235 Sale Price PSF (Rentable Area) $215 $215 $215 Sale Price PSF (Unspecified Area) $219 $227 $235 Estimated Going-in Cap Rate 10.1% 10.8% 11.4% Total Number of Properties 4 Copyright 2003 Reis, Inc. Page 1 of 6 Copyright 2003 Reis, Inc. Page 48

56 Office - Asset Advisor Sales Comparables 503 Federal Boston, MA, Sales Comparables Office Address Distance From Subject Submarket Year Built Floors Size (SF) Sale Price Price PSF Sale Date 1. 1 Rogers Street 6.07 mi. West/MassPike ,000 $84,500,000 $235 Jun 2003 Boston, MA BOYLSTON STREET 0.94 mi. West/MassPike ,000 NRA $122,627,000 $215 NRA 26 Dec 2002 Boston, MA ATLANTIC AVENUE 0.10 mi. South Station ,000 GBA $82,200,000 $235 GBA 28 Jun 2002 Boston, MA AVENUE DE LAFAYETTE 0.25 mi. CBD ,000 $133,500,000 $ May 2002 Boston, MA 2111 Copyright 2003 Reis, Inc. Page 2 of 6 Copyright 2003 Reis, Inc. Page 49

57 Property Name Office - Asset Advisor Sales Comparables Property Location and Physical Characteristics 503 Federal Boston, MA, Sales Comparables Property Type Multi-Tenant Address 1 Rogers Street Building Area (SF) 360,000 City Boston No. of Bldgs./Floors 2 / 6 State/ZIP/County MA / / Suffolk Year Built/Renovated 1989 / -- Metro (Submarket) Boston (West/MassPike) Asset Class -- Comments The adjoining building also involved in this transaction is 1 Charles Park and both buildings overlook the Charles River. This property also features brick and stone exterior walls with steel construction. Office Sale Details and Analysis Sale Date Jun 2003 Reis Cap Rate Analysis Proforma Sale Price $84,500,000 (Verified: No) All per square foot figures are on an annual basis Sale Price PSF $235 Rentable Area Assumption -- Vacancy at Sale Potential Rent Revenue -- Vacancy Loss/Rate -- Seller 1. Lotus/IBM Effective Rent Revenue -- Expense Reimbursements -- Free Rent Concessions -- Credit Loss -- Buyer 1. Rockwood Capital Corp. / San Francisco, CA Additional Income -- Effective Gross Revenue -- Operating Expenses -- Capital Reserve -- Net Operating Income -- Comments Estimated Going-in Cap Rate -- Avg Off Cap Rates in Metro 8.2% (Q2 2003) Reported Cap Rate, This Sale None Additional Details When Available Seller's Broker Other Broker Interest Purchased 1. Cappy Daume, WIlliam Magner and Timothy Fraser, Spaulding and Slye-Colliers, Boston, MA Buyer's Broker Lot Size 104,979 SF / 2.41 Acres Time on Market Key Tenants IBM Parcel Number M:00011 L:00049 Deed Reference Financing Details Other: This property features a courtyard.this property sits just a few blocks west of the shoreline and is in close proximity to I-93, Highway 1 and Route 3. Also nearby is Columbus park which sits off of Old Colony Avenue. Copyright 2003 Reis, Inc. Page 3 of 6 Copyright 2003 Reis, Inc. Page 50

58 Office - Asset Advisor Sales Comparables 503 Federal Boston, MA, Sales Comparables Office Property Location and Physical Characteristics Property Name Property Type Owner Occupied Address 501 BOYLSTON STREET Building Area (SF) 570,000 NRA City Boston No. of Bldgs./Floors 1 / 10 State/ZIP/County MA / 2116 / Suffolk Year Built/Renovated 1920 / 1990 Metro (Submarket) Boston (West/MassPike) Asset Class -- Comments Building was constructed in 1920 with additions made in the 1940's. Sale Details and Analysis Sale Date 26 Dec 2002 Reis Cap Rate Analysis Proforma Sale Price $122,627,000 (Verified: Buyer) All per square foot figures are on an annual basis Sale Price PSF $215 NRA Rentable Area Assumption 570,000 SF Vacancy at Sale Potential Rent Revenue $24,119,586 Vacancy Loss/Rate ($2,251,582) [10.8%] $36.58 Market Rent x 61,560 SF Seller 1. Metropolitan Life Insurance Effective Rent Revenue $21,868,004 $43.01 In Place Rent x 508,440 SF Expense Reimbursements $0 [$0.00 PSF] ($12.99 PSF Exp. - Avg. $12.99) x 508,440 SF Free Rent Concessions ($146,485) [$0.26 PSF] Credit Loss ($267,101) [1.1%] Buyer Boylston St. Prop LLC / Beacon Capital Partners, LLC / Additional Income $0 [$0.00 PSF] Boston, MA Effective Gross Revenue $21,454,418 Operating Expenses ($7,404,589) [$12.99 PSF] Capital Reserve ($57,000) [$0.10 PSF] Net Operating Income $13,992,829 Comments Seller will continue to occupy the property and begin to turn space over during the second year of the arrangement. By 2004 the seller will lease only 200,000 square feet for five years. Sale-leaseback transaction. Estimated Going-in Cap Rate 11.4% Based on Sale Price of $122,627,000 Avg Off Cap Rates in Metro 8.6% (Q4 2002) Reported Cap Rate, This Sale None Additional Details When Available Seller's Broker Other Broker Interest Purchased 100.0% Buyer's Broker Lot Size 87,555 SF / 2.01 Acres Time on Market Key Tenants MetLife, Inc. Parcel Number M:025 W:05 P:01296 S:000 Deed Reference Financing Details Other: Property is located about a third of a mile north of I-90 on the corner of Boylston and Berkeley Streets. The buyer will convert the property into a multi-tenant space. Copyright 2003 Reis, Inc. Page 4 of 6 Copyright 2003 Reis, Inc. Page 51

59 Office - Asset Advisor Sales Comparables 503 Federal Boston, MA, Sales Comparables Office Property Location and Physical Characteristics Property Name INDEPENDENCE WHARF Property Type Multi-Tenant Address 470 ATLANTIC AVENUE Building Area (SF) 350,000 GBA City Boston No. of Bldgs./Floors 1 / 14 State/ZIP/County MA / / Suffolk Year Built/Renovated 1925 / 2001 Metro (Submarket) Boston (South Station) Asset Class A Comments Red brick and green glass exterior. Fully renovated by seller. Property contains an undisclosed amount of retail space. Sale Details and Analysis Sale Date 28 Jun 2002 Reis Cap Rate Analysis Proforma Sale Price $82,200,000 (Verified: Pub Rcrd) All per square foot figures are on an annual basis Sale Price PSF $235 GBA Rentable Area Assumption -- Vacancy at Sale Potential Rent Revenue -- Vacancy Loss/Rate -- Seller 1. Independence Wharf RT; Marino, Lelio / Modern Continental Enterprises, Inc. / 600 Memorial Drive, Cambridge, MA Effective Rent Revenue -- Expense Reimbursements -- Free Rent Concessions -- Credit Loss -- Buyer 1. Independence Wharf LLC / GE Asset Management Additional Income -- Comments Property procured 13 interested buyers. The sellers purchase price and renovation expenses exceeded the property's sale price. Effective Gross Revenue -- Operating Expenses -- Capital Reserve -- Net Operating Income -- Estimated Going-in Cap Rate -- Avg Off Cap Rates in Metro 8.5% (Q2 2002) Reported Cap Rate, This Sale None Additional Details When Available Seller's Broker (Lstg) Cushman & Wakefield Other Broker Interest Purchased 100.0% Buyer's Broker Lot Size 36,176 SF / 0.83 Acres Time on Market Key Tenants Parcel Number M:020 W:03 P:02956 S:000 Deed Reference 28840/132 Financing Details Other: Property has parking garage. On-site parking and management.property is located at the intersection of Atlantic Avenue and Seaport Boulevard. The waterfront property's roof is open to the public, offering views of downtown Boston. Copyright 2003 Reis, Inc. Page 5 of 6 Copyright 2003 Reis, Inc. Page 52

60 Property Name LAFAYETTE CORPORATE CENTER Property Location and Physical Characteristics 503 Federal Boston, MA, Sales Comparables Property Type Multi-Tenant Address 2 AVENUE DE LAFAYETTE Building Area (SF) 609,000 City Boston No. of Bldgs./Floors 1 / 6 State/ZIP/County MA / 2111 / Suffolk Year Built/Renovated 1978 / 1999 Metro (Submarket) Boston (CBD) Office - Asset Advisor Sales Comparables Asset Class A Comments Property was originally a hotel/retail space that was converted to an office building with ground floor retail in Property includes 34,791 square feet of street level retail. Office Sale Details and Analysis Sale Date 22 May 2002 Reis Cap Rate Analysis Proforma Sale Price $133,500,000 (Verified: No) All per square foot figures are on an annual basis Sale Price PSF $219 Rentable Area Assumption 609,000 SF Vacancy at Sale Potential Rent Revenue $22,429,809 Vacancy Loss/Rate ($3,709,399) [17.3%] $35.21 Market Rent x 105,357 SF Seller 1. Patriot Games, LLC / Angelo, Gordon & Co./Amerimar Enterprises/Centrum Properties Effective Rent Revenue $18,720,410 $37.17 In Place Rent x 503,643 SF Expense Reimbursements $3,520,743 [$5.78 PSF] ($13.87 PSF Exp. - Avg. $6.88) x 503,643 SF Free Rent Concessions ($9,075) [$0.01 PSF] Credit Loss ($246,629) [1.1%] Buyer 1. The Abbey Group / 575 Boylston Street, Boston, MA Additional Income $0 [$0.00 PSF] Effective Gross Revenue $21,985,449 Operating Expenses ($8,444,607) [$13.87 PSF] Capital Reserve ($60,900) [$0.10 PSF] Net Operating Income $13,479,942 Comments Estimated Going-in Cap Rate 10.1% Based on Sale Price of $133,500,000 Avg Off Cap Rates in Metro 8.5% (Q2 2002) Reported Cap Rate, This Sale None Additional Details When Available Seller's Broker Other Broker 1. Cushman & Wakefield of Massachusetts Inc. Interest Purchased 100.0% Buyer's Broker Lot Size Time on Market Key Tenants State Street Corp. (435,000 SF), MFS Investment Management (135,000 SF) Parcel Number Deed Reference Financing Details Other: Property has parking garage.property is located across the street from the Stores At 500 Washington, just off of Essex Street and the I-93 and I-90 interchange. Property includes a 500 room Swisshotel that was not part of the transaction. Property has a strong tenant roster signed to long-term leases. Approximately 22,000 square feet of retail space is vacant. Seller purchased the property in 1997 and redeveloped it. Copyright 2003 Reis, Inc. Page 6 of 6 Copyright 2003 Reis, Inc. Page 53

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