Market Report. Suburban Maryland 1st Quarter cushmanwakefield.com

Market Report Suburban Maryland 1st Quarter 2017 cushmanwakefield.com

Contents DC Metropolitan Area Overview...3 Suburban Maryland & Map...4-6 Bethesda/Chevy Chase...7 Rock Spring Park...8 Pike Corridor...9 I-270/Rockville...10 Gaithersburg/Germantown...11 Silver Spring...12 Prince George s County...13 Appendix...14 Tables...14-22 Methodology & Definitions...23 About Cushman & Wakefield...24 Cushman & Wakefield 2

Washington, DC Metropolitan Area A Slow Start to 2017 For the Washington, DC metropolitan region (DC Metro) in early March 2017, the Bureau of Labor Statistics (BLS) revised the number of job gains in 2016 downward from 73,000 to 57,000. Despite this significant revision, job creation for 2016 as a whole for the Metro area was still well above its historical annual average of 36,000 jobs per year and the pace of job growth has continued to accelerate into 2017; in the first three months of 2017, the DC Metro saw 12,300 new jobs added. Northern Virginia (NoVA) and Suburban Maryland gained jobs while employment in the District of Columbia (the District) remained flat. Three industry sectors contributed to the majority of job gains: Retail added 5,800 jobs, Professional and Business Services added 4,400 jobs and Education and Healthcare added 4,800 positions. As is typical early in any year, the headline commercial real estate statistics for the first quarter of 2017 were relatively flat. While 2017 began with activity on an uptick, deals continued to take time to transact. The regional vacancy rate ended the first quarter of 2017 at 17.7%, down 10 basis points (BP) from the first quarter of 2016. The majority of vacant space 27.8 million square feet () was in NoVA whose vacancy rate was 21.3% at first-quarter s end, while the District and Suburban Maryland ended the quarter with vacancies of 12.3% and 19.6%, respectively. While asking rents have continued to rise on a regional basis up from $36.19 per square foot (PSF) in Q1 2016 to $39.29 in Q1 2017 concessions have remained at peak levels. Effective rents are expected to remain flat, overall, for the next 12 to 18 months. The amount of new construction that will hit the regional market in 2017 and 2018 totals more than 7. But while that new construction is 68% committed as of the first quarter of 2017, 2.3 remains available and will likely cause vacancy to rise in the near term. Greater rent growth will be seen at the upper end of the market, in highly amenitized suburban submarkets that have access to mass transit, and Class B space downtown. Modest positive net absorption in the District and Suburban Maryland was offset by a negative 195,000 square feet (SF) of absorption in Northern Virginia the result of several moves out of tenants off transit to more efficient space along Metro lines. The largest lease deals of the first quarter of 2017 illustrate the overall market dynamics. In the District, the Federal Communications Commission (FCC) boasted the largest leasing transaction of the quarter, as the agency consolidated operations into 473,00 at Sentinel Square III in NoMA first-generation space that is set to deliver in mid-2019. The FCC downsized from its 660,00 in the Southwest submarket and the overall square-feet-per-worker shrank from 272 SF to 18. As has been the case in other high-profile federal/gsa leases like those for the Department of Justice, the Federal Election Commission and the National Labor Relations Board, the federal government will likely continue to migrate from the core downtown submarkets where price points and efficiency are much harder to achieve to emerging markets to benefit from new, highly efficient offerings. On the private sector side, two significant law firm transactions illustrate the continued demand for new construction and increased efficiency from the legal sector. Akin Gump was the top largest private-sector deal; it signed a lease for 189,00 at the former 2000 L Street, NW an office building currently undergoing a complete façade renovation in a relocation from its current Washington, DC operations at 1333 New Hampshire Avenue, NW. Paul Hastings will relocate from the Bowen Building in the East End to a to-be-built project at 2050 M Street, NW. Both of these transactions illustrate strong face rents in the mid-to-upper $50 s NNN, with 15+ years of term coupled with aggressive tenant improvement allowances and ample free rent. These transactions also represent 15-20% of downsizing on the part of both firms, as high-performance floor plates allow for more timekeepers per square foot on the floor. There are several additional high-profile legal sector tenants active in the market that are targeting the top floors of new or substantially renovated product that are expected sign leases during 2017. The largest non-renewal transaction in the DC Metro suburbs was that of Nestle North America, which will relocate its U.S. headquarters operations from Glendale, CA to 250,00 of first- generation space at 1812 N. Moore Street in Rosslyn, VA. The company is bringing 750 jobs to Northern Virginia and is expected to aggressively hire locally to fill additional positions that will become vacant with Nestle s relocation. Following on the heels of Marriott s decision to occupy new construction in Bethesda, several other regionally and nationally competitive relocations to the region could be on the horizon. New construction in the suburbs will benefit as it continues to outperform existing space. Large suburban users are more active in the market currently than in nearly a decade, and developers are expected to move forward with several projects in key submarkets such as Bethesda, Tysons Corner, Reston and Herndon. WASHINGTON, DC METRO Economic Indicators Q1 16 Q1 17 DC Metro Employment 3.22M 3.26M DC Metro Unemployment 3.8% 3.7% U.S. Unemployment 5.0% 4.5% Market Indicators Q1 16 Q1 17 Overall Vacancy 17.8% 17.7% Net Absorption -334K -76K Under Construction 6.77M 9.63M Deliveries 764K 432K Average (FS) $36.19 $39.29 Net Absorption/ 4Q TRAILING AVERAGE 1,400 1,200 1,000 Washington, DC Metropolitan Area NET ABSORPTION - DELIVERIES - VACANCY 800 600 400 200 0-200 -400-600 -800 10 8 6 4 2 0-2 -4-6 05 06 07 08 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate 12-Month Forecast 12-Month Forecast -1,000 $36 2011 2012 2013 2014 2015 2016 2017 Net Absorption, SF (thousands), $ PSF 20% 16% 12% 8% 4% 0% $39 $39 $38 $38 $37 $37 Vacancy Rate cushmanwakefield.com 3

Suburban Maryland Economy The Washington, DC metropolitan region continued its robust economic expansion in the first quarter of 2017, adding a total of 12,300 net new nonfarm jobs to payrolls in the first quarter of 2017. 9,100 of those jobs took place in Suburban Maryland jurisdictions. Job growth was led by a variety of sectors, including Retail (1,300 jobs), Professional and Business Services (2,550 jobs), Leisure and Hospitality (880 jobs), Construction (920 jobs) and Education and Healthcare (830 jobs). The unemployment rate for Montgomery and Prince George s counties ended March 2017 at 3.5% and 4.4%, respectively. Market Overview SSuburban Maryland ended the first quarter of 2017 with 75,294 square feet (SF) of positive absorption. The I-270/Rockville submarket alone accounted for 273,224 SF of newly occupied space; Lockheed Martin contributed to this by taking 25,979 SF of space at 700 King Farm Boulevard. Absorption did decrease by 383,072 SF from the fourth quarter of 2016 to the first quarter of 2017. Year-over-year overall vacancy in Suburban Maryland declined by 100 basis points (BP) closing the first quarter 2017 at 19.6%; the market s overall vacancy rate hasn t been this low since the fourth quarter of 2013 when vacancy was 18.3%. The decline in vacancy was due primarily to two large move-ins: NIH occupying 140,852 SF at 6700 Rockledge Drive in Bethesda, and Emmes taking 27,86 at 5280 Corporate Drive in Frederick. Although NIH took occupancy at their new location this quarter, they have yet to vacate their current location at 5635 Fishers Lane and wont until the middle of 2018. New leasing activity for the first quarter of the year totaled 548,109 square feet SF a 34.6% decline from the first quarter of 2016. Montgomery County accounted for 343,87 of the total leasing activity, with Prince George s County capturing 167,169 SF of the total and Frederick County accounting for roughly 37,000 SF. Despite the substantial decline year-over-year, leasing activity should begin to pick up, since a minimum of at least 150 leases are scheduled to expire in 2017. There were no new deliveries in the first quarter 2017 although 75,00 of spec, Class A, office space is under construction at 5801 University Research Court in College Park, set to deliver in the fourth quarter of 2018. In the Bethesda/Chevy Chase submarket, a handful of new projects are expected to hit the market in the next few years, including 4747 Bethesda Avenue and 7272 Wisconsin Avenue. Both projects are scheduled to break ground this year. Construction on the new Marriott HQ at 7750 Wisconsin Avenue in Bethesda is also set to begin in 2019, and is scheduled for a 2022 delivery. Outlook Suburban Maryland still drags behind the District of Columbia in terms of market fundamentals and with the priorities of the new Trump administration favoring defense-heavy Northern Virginia in lieu of the life sciences agencies that flourish in Suburban Maryland. Leasing activity should still start to pick up speed as a wave of lease expirations are set to hit the market in the coming months. Market Indicators Net Absorption/ FOUR QUARTER TRAILING AVERAGE Overall Vacancy Q1 16 Q1 17 Overall Vacancy 20.8% 19.6% Net Absorption 267k 75k Under Construction 234k 75k Deliveries 0 0 Average $26.91 $26.04 x 100000 24% 22% 20% 18% 16% 14% Suburban Maryland 3 2 1 0-1 -2 Large Blocks of Contiguous Space 12-Month Forecast $29.00 $28.50 $28.00 $27.50 $27.00 $26.50 $26.00 $25.50-3 $25.00 2011 2012 2013 2014 2015 2016 Q1 17 Net Absorption, Pike Corridor Silver Spring I-270/Rockville Germantown Bethesda/Chevy Chase Rock Spring Park Gaithersburg North Silver Spring Prince George's County Historical Average = 19.5%, $ PSF 12% 2011 2012 2013 2014 2015 2016 Q1 17 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 50-100k SF 100-150k SF 150-200K SF 200K+ SF Cushman & Wakefield 4

Maryland Office Submarkets 83 FREDERICK 27 26 795 340 85 32 695 GERMANTOWN 28 GAITHERSBURG NORTH SILVER SPRING 29 95 I-270/ROCKVILLE PIKE CORRIDOR LAUREL 190 270 BELTSVILLE/ COLLEGE PARK ROCK SPRING PARK 295 GREENBELT BETHESDA/ CHEVY CHASE SILVER SPRING LANDOVER/ LANHAM BOWIE 236 495 395 95 OXON HILL/ SUITLAND 95 1 210 5 cushmanwakefield.com 5

Top Transactions Key Lease Transactions Q1 2017 PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET 11785 Beltsville Drive 99,617 GSA FDA New Beltsville/College Park 15850 Crabbs Branch Way 15,053 Apex Companies New Pike Corridor 30 West Gude Drive 14,207 Department of Assessment and Taxation Renewal Beltsville/College Park 6110 Executive Boulevard 11,460 Research Triangle Institute Downsize/Renewal Pike Corridor 11400 Rockville Pike 8,500 ASAM New Pike Corridor Suburban Maryland Office Market Net Absorption - Deliveries - Vacancy, First Quarter 2017 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5 05 06 07 08 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate 24% 20% 16% 12% 8% 4% 0% Vacancy Rate Suburban Maryland Office Market Inventory & Vacancy by Submarket, First Quarter 2017 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Class A Class B Class C Sub MD Overall Vacancy = 19.60% 35% 30% 25% 20% 15% 10% 5% 0% Cushman & Wakefield 6

Bethesda/Chevy Chase Market Indicators *Arrows = Current Qtr Trend Vacancy 9.5% Net Absorption (12,90) Under Construction Deliveries $35.43 FS Bethesda/Chevy Chase continued to lead the Suburban Maryland market for a second consecutive quarter; registering healthy fundamentals with high leasing activity numbers, and a singledigit vacancy rate in the first quarter of 2017. Although new leasing activity totaled 100,116 square feet (SF) the highest among the Suburban Maryland submarkets it does represent an 18.0% decrease in new leasing from the first quarter of 2016. The most notable leases were those signed by Mid-City Financial Corporation for 7,261 SF at 4800 Montgomery Lane and by Morgan Wingate for 5,264 SF at 7501 Wisconsin Avenue. With the help of healthy leasing activity over the past few quarters, the overall vacancy rate for Bethesda/Chevy Chase declined by 310-basis-point (BP) year-over-year, closing the first quarter of 2017 at 9.5% and marking the Bethesda/Chevy Chase as the tightest submarket in Suburban Maryland. Class A Overall vacancy was 6.4% at quarter s end a 460-BP decrease yearover-year. Net Absorption Deliveries Vacancy 0.4 0.3 0.3 0.2 0.2 0.1 0.1 0.0-0.1-0.1-0.2 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate 14% 12% 10% 8% 6% 4% 2% 0% Vacancy Rate Despite the substantial amount of new leasing activity and tightening vacancy rates, Bethesda/Chevy Chase closed out the first quarter of 2017 with 12,893 SF of negative overall net absorption. A handful of tenants who signed in the first quarter have yet to take occupancy implying that an increase in absorption in subsequent quarters will occur. Contributing to the negative absorption was SunEdison s vacating of 11,50 at 7550 Wisconsin Avenue and an undisclosed tenant vacating 17,979 SF at 4350 East-West Highway. As the Bethesda/Chevy Chase Class A average rental rate dropped substantially by 7.5% down to $42.06 year-over-year, the Class B average rental rate mimicked by dropping down 6.1% to $33.13 per square foot (PSF) year-over-year; the lowest Class B rate BCC has seen since the second quarter of 2014. There were no new deliveries, new construction, or building renovations in the Bethesda/Chevy Chase submarket during the first quarter 2017. Despite the lack of office product coming online, a number of proposed office projects are set to begin construction in the coming months including; 4 Bethesda Metro Center (which will sit directly above the Bethesda metro), 7272 Wisconsin Avenue (which is commencing construction on the office expansion in spring 2017), and 7300 Pearl Street. In addition, no properties traded in the quarter. New Leasing Activity 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $55 Q1 Q2 Q3 Q4 Outlook Over the course of the next few quarters, Bethesda will shape up to become a behemoth construction powerhouse as a multitude of different projects are slated to break ground both in the office and multifamily sector. The submarket s metro proximity to the red line and proposed purple line will only further serve the amenity-rich location, and further help to attract tenants from across the region who are looking for new construction in a live-work-play location. Full Service PSF $50 $45 $40 $35 $30 $25 2009 2010 2011 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF cushmanwakefield.com 7

Rock Spring Park Market Indicators *Arrows = Current Qtr Trend Vacancy 25.8% Net Absorption 151,052 SF Under Construction Deliveries $30.11 FS Rock Spring Park experienced one of its healthiest quarters in several years. Year-over-year, the submarket s overall vacancy declined 140 BP to 25.8% by the end of the quarter. The decline was due primarily to the large move-in by the National Institutes of Health (NIH), which took occupancy of 140,852 SF at 6700 Rockledge Drive. The last time vacancy was below the current rate was the second quarter of 2015 when it was 24.5%. The Class A overall vacancy rate has also seen a return to a low point, closing the first quarter of 2017 at 25.7% -- the lowest it s been in two years. New leasing closed out the first quarter of 2017 at 22,880 SF spiking 71.0% from the first quarter of 2016. Two noteworthy leases signed in the first quarter of 2017 were those of icontrol Systems for 7,123 SF and Executive Information Systems for 8,995 SF, both at 6903 Rockledge Drive. Given healthy leasing activity in both the fourth quarter of 2016 and the first quarter of 2017, Rock Spring Park posted 151,052 SF of positive overall net absorption the previously mentioned NIH move-in at 6700 Rockledge Drive accounting for most of that total. It should also be noted that NIH isn t scheduled to vacate their location at 5635 Fishers Lane until 2018. Despite a steady decline in vacancy, Class A average rental rates remained stagnant for the quarter seeing little to no movement. With Class A rates staying flat, the Class B average rate for first quarter managed to increase by 1.2% posting a rate of $26.79 per square foot (PSF). No new projects entered pipeline nor did any new supply hit the market throughout the first quarter of 2017 in Rock Spring Park, which will help to keep vacancy rates in check as leasing activity chips away at available blocks of space. Net Absorption Deliveries Vacancy 0.2 0.1 0.1 0.0-0.1-0.1-0.2-0.2 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 35% 30% 25% 20% 15% 10% 5% 0% 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 2012 2013 2014 2015 2016 2017 Vacancy Rate Q1 Q2 Q3 Q4 Outlook Vacancy will continue to fall in the coming quarters as a multitude of leases signed in the first quarter of 2017 will result in tenants physically occupying in subsequent quarters. From a construction standpoint, Rock Spring Park will continue to be quiet as no projects have hit radar recently. Full Service PSF $36 $34 $32 $30 $28 $26 $24 $22 $20 2011 2012 2013 2014 2015 2016 2017 All Classes Class A, $ PSF Cushman & Wakefield 8

Pike Corridor Market Indicators *Arrows = Current Qtr Trend Vacancy 17.0% Net Absorption (51,388 SF) Under Construction Deliveries $28.26 FS Pike Corridor experienced mixed results during the first quarter of 2017. New leasing activity ended the quarter at 87,882 square feet (SF), a 13.2% increase from the fourth quarter of 2016 and a 5.6% increase year-over-year. Two noteworthy new leases signed in the first quarter of 2017 were by Apex Companies, which took 15,053 SF at 15850 Crabbs Branch Way, and the American Society of Addiction Medicine (ASAM), which signed for 8,50 at 11400 Rockville Pike. With a rise in leasing activity came an unexpected increase in vacancy. The overall vacancy rate for Pike Corridor at the end of the first quarter of 2017 was 17.0% -- a 20 basis point (BP) increase from the previous quarter and an 80-BP jump yearover-year. Vacancy is at its highest level since the third quarter of 2015 when it was 17.7%. Contributing to the spike in vacancy was Dixon Hughes vacating 24,849 SF at 111 Rockville Pike. Class A direct vacancy experienced a sizeable increase, jumping 100 BP year-over-year and closing the first quarter of 2017 at 19.1%. Pike Corridor ended the first quarter of 2017 at 51,388 SF of negative overall net absorption, with the previously mentioned Dixon Hughes relocation from 111 Rockville Pike to 9801 Washingtonian Boulevard in Gaithersburg and the FDA vacating 10,00 at 1 Church Street. The submarket saw a significant amount of movement during the first quarter of the year. Despite increasing vacancy and negative absorption, the overall average rental rate managed to climb up to $28.26 per square foot (PSF) a 1.4% increase year-over-year. The Class A average rate rose by 6.0% up to $31.25 PSF, year-over-year for the first quarter of 2017. Net Absorption Deliveries Vacancy 1.0 0.5 0.0-0.5-1.0-1.5 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 1.60 1.40 1.20 1.00 0.80 0.60 0.40 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Vacancy Rate There were no new deliveries, construction starts or building renovations in the Pike Corridor submarket during the first quarter of 2017. The only sale of the quarter was 6116 Executive Boulevard which sold at auction for $9.7M or $46 per square foot (PSF). The purchaser acquired the property because of the multitude of different features it has, including its signage possibilities, parking garage and the floor designs. The property will undergo renovations with an expected completion date of April 2018. 0.20 0.00 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Outlook Pike Corridor will sustain growth in absorption as Apex Companies and the American Society of Addiction Medicine will be taking occupancy in the coming months. As no new product hit the market in the first quarter of 2017 and absorption increased year-over-year, vacancy will continue to trend downward. Full Service PSF $36 $34 $32 $30 $28 $26 $24 $22 $20 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF cushmanwakefield.com 9

I-270/Rockville Market Indicators *Arrows = Current Qtr Trend Vacancy 23.3% Net Absorption 273,224 SF Under Construction Deliveries $27.58 FS The I-270/Rockville submarket was home to a considerable amount of activity during the first quarter of 2017 and displayed healthy market fundamentals. New leasing activity locked in at 74,72 for the quarter. The largest new leases were those signed by Mokobio for 7,132 SF at 1445-1455 Research Boulevard, and NIKA, which leased 6,586 SF at 2000 Tower Oaks Boulevard. Overall vacancy in the submarket declined 60 basis points (BP) year-over-year to close the first quarter of 2017 at 23.3%, the lowest level since the first quarter of 2015 when it was 23.1%. Yearover-year, the Class A overall vacancy rate rose 60-BP up to 21.7% for the first quarter of 2017. Overall absorption for I-270/Rockville increased 3.0% year-overyear, ending the first quarter of 2017 with 273,224 SF of positive absorption. Two significant move-ins during the quarter were those of Lockheed Martin, which occupied 25,979 SF at 700 King Farm Boulevard, and Dixon Hughes, which took occupancy of 11,496 SF at 9801 Washingtonian Boulevard. Coupled with the drop in vacancy, the overall average rental rate for I-270/Rockville continued upward locking in at $27.58 per square foot (PSF). Class A and B average rates year-overyear both dropped but by diminutive amounts 0.5% and 2.9%, respectively. Net Absorption Deliveries Vacancy 0.4 0.3 0.2 0.1 0.0-0.1-0.2-0.3-0.4-0.5 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 0.70 0.60 30% 25% 20% 15% 10% 5% 0% Vacancy Rate There were no new deliveries, new construction or building renovations in the I-270/Rockville submarket during the first quarter of 2017, which should suppress vacancy rates and keep rental rates on the rise. Although there was a lack of new developments, the proposed property at 131 Rockville Pike, Metro Plaza III, is scheduled to break ground in the next year or two. In addition, no office properties traded in the quarter. 0.50 0.40 0.30 0.20 0.10 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Outlook Healthy leasing activity numbers for the first quarter of 2017 will yield positive absorption for the quarters down the road. As vacancy dropped year-over-year, the I-270/ Rockville submarket will sustain that downward trend as no new product is set to come online in the next few months resulting landlords going above and beyond to fill up their current inventory. Full Service PSF $36 $34 $32 $30 $28 $26 $24 $22 $20 2009 2010 2011 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF Cushman & Wakefield 10

Gaithersburg/Germantown Market Indicators *Arrows = Current Qtr Trend Vacancy 18.0% Net Absorption 95,218 SF Under Construction Deliveries $23.20 FS The Gaithersburg and Germantown submarkets saw very little leasing activity during the first quarter of 2017, only registering 9,084 SF and 1,988 SF of new leasing, respectively. Among the notable leases signed during the first quarter of 2017 was that of Re/Max Realty Group, which signed for 4,316 SF at 6 Montgomery Village in the Montgomery Village Executive Center; this lease accounts for roughly 40% of the entire first quarter 2017 leasing activity in Gaithersburg. Gaithersburg s overall vacancy rate was 15.2% -- the lowest it has been in over 10 years while Germantown s overall vacancy closed the first quarter of 2017 at 21.1%--the lowest since the fourth quarter of 2012. Both rates represent substantial year-over-year declines a 580-basis point (BP) decrease for Gaithersburg and a 250-BP decrease for Germantown. The Class A overall vacancy rates for Gaithersburg and Germantown locked in at 17.7% and 20.1%, respectively. This is the lowest Class A overall vacancy rate Gaithersburg has seen in over 10 years while Germantown hasn t experienced this low of a rate since the second quarter of 2014. Overall absorption exhibited a massive uptick year-over-year, registering a positive 88,266 SF for Gaithersburg and a positive 6,952 SF for Germantown, for a total of 95,218 SF for the combined submarket. For comparison, positive absorption was 105 SF from the first quarter of 2015 to the first quarter of 2016, barely breaking the -/+ threshold. One noteworthy move-in was by Dixon Hughes for 11,496 SF at 9801 Washingtonian Boulevard in Gaithersburg. Net Absorption Deliveries Vacancy 0.3 0.2 0.2 0.1 0.1 0.0-0.1-0.1-0.2 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 0.25 0.20 0.15 0.10 25% 20% 15% 10% 5% 0% Vacancy Rate Gaithersburg and Germantown told different stories from an overall average rental rate standpoint. Gaithersburg s rate jumped up 2.6% from the same period last year as Germantown s rate dropped immensely down to $24.61 per square foot (PSF) a 10.5% decrease year-over-year. 0.05 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 There were no new deliveries, new construction or building renovations in the Gaithersburg/Germantown submarket during the first quarter of 2017. In addition, no properties traded in the quarter. Outlook Despite displaying grandiose absorption numbers for the first quarter of 2017, Gaithersburg and Germantown will see their vacancy rates start to flatten in the coming quarters as absorption is expected to taper due to the lack of leasing activity recently. Full Service PSF $29 $27 $25 $23 $21 $19 $17 $15 2011 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF cushmanwakefield.com 11

Silver Spring Market Indicators *Arrows = Current Qtr Trend Vacancy 11.0% Net Absorption 22,772 SF Under Construction Deliveries $28.83 FS Silver Spring has been a regular top performer and that didn t change during the first quarter of 2017. Although leasing activity trended downward year-over-year, absorption rose, resulting in a decline in overall vacancy. New leasing activity totaled 45,994 SF for the first quarter of 2017 a 41.0% decrease from the first quarter of 2016. But despite this decline, Silver Spring experienced an increase of overall net absorption, year-over-year, locking in at 22,772 SF for the first quarter of 2017. This is the largest absorption figure since the first quarter of 2015 when the submarket registered 27,096 SF of positive absorption. Overall vacancy fell 120-basis points (BP) year-over-year, ending Q1 2017 at 11.0%--the lowest rate since the second quarter of 2015 when it was 10.6%. Class A overall vacancy saw a 70-BP decline year-over-year. With vacancy tightening, the overall average rental rate rose by 0.9% up to $28.83 per square foot (PSF) yearover-year. There were no new deliveries, new construction or building renovations in the Silver Spring submarket during the first quarter of 2017. However, a proposed project that is set to break ground by the end of next year, which will sit at 8615 Georgia Avenue, and is slated to be an approximately 220,00, Class A office building developed by Lee Development Group. No preleasing activity has been announced thus far. In addition, no properties traded in the quarter. Net Absorption Deliveries Vacancy 0.20 0.15 0.10 0.05 0.00-0.05-0.10-0.15 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 0.40 0.35 0.30 0.25 0.20 0.15 13% 12% 11% 10% 9% 8% Vacancy Rate 0.10 0.05 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Outlook Silver Spring will see absorption taper off as leasing activity trended downward over the first quarter of 2017. While vacancy rates have continued to taper in recent quarters, leasing activity remains sluggish. If no preleasing occurs prior to the delivery of 8615 Georgia Avenue, which is set to deliver in 2020, expect to see vacancy rates tick up. Full Service PSF $38 $36 $34 $32 $30 $28 $26 $24 $22 $20 2009 2010 2011 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF Cushman & Wakefield 12

Prince George s County Market Indicators *Arrows = Current Qtr Trend Vacancy 27.2% Net Absorption 102,993 SF Under Construction Deliveries $21.52 FS Prince George s County performance in the first quarter of 2017 was a mixed bag. While it experienced an increase in yearover-year overall absorption and vacancy rates, leasing activity declined over the same time frame. New leasing activity totaled 167,169 SF for the first quarter of 2017 a 51.2% decrease from the first quarter of 2016. Federal agencies accounted for the majority of the leasing, with the Federal Drug Administration (FDA) taking 99,617 SF at 11785 Beltsville Drive, and the Department of Assessment and Taxation renewing for 14,207 SF at 30 West Gude Drive. Despite the decline in leasing activity, positive overall absorption in Prince George s County totaled 102,993 SF for the first quarter of 2017 a dramatic increase from the first quarter of 2016 s absorption figure of negative 7,291 SF. Overall vacancy for the county ended the quarter at 27.2%, a 90-BP decrease year over year, and the lowest vacancy rate since the 24.7% registered in the fourth quarter of 2014. The two submarkets in the County with the tightest vacancies in the first quarter of 2017 were Oxon Hill/Suitland and Bowie, with vacancy rates of 20.9% and 20.1%, respectively. Prince George s overall average rental rate posted a rate of $21.52 per square foot (PSF) for the quarter a 1.2% increase from the same period last year, but a 0.6% decrease quarter-over-quarter. There were no new deliveries for the quarter; however, COPT is currently underway with a 75,000-SF, Class A, spec property at 5801 University Research Court in College Park. Delivery is slated for the fourth quarter of 2018, and to-date, no preleasing activity has been announced. THSF Net Absorption Deliveries Vacancy 0.4 0.3 0.2 0.1 0.0-0.1-0.2-0.3-0.4-0.5-0.6 07 08 09 10 11 12 13 14 15 16 17 Net Absorption Deliveries Vacancy Rate New Leasing Activity 1,200.00 1,000.00 800.00 600.00 400.00 200.00 32% 28% 24% 20% 16% 12% 8% 4% 0% Vacancy Rate 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 $25 Outlook Despite Prince George s County s decrease in leasing activity, it should continue to see vacancy fall as the General Services Administration has numerous agencies set to take occupancy in the coming months, one of which being the FDA on Beltsville Drive. However, with the projected delivery of 5801 University Research Court, the College Park submarket will see an increase in vacancy come the end of 2018. Full Service PSF $24 $23 $22 $21 $20 $19 $18 2011 2012 2013 2014 2015 2016 2017 Class A Class B, $ PSF cushmanwakefield.com 13

Appendix Table Summaries Metro Washington Office Market Summary 13 Employment Data 13 Office Availability, Vacancy, and Net Absorption 14 Metro Washington Office Market Summary: Fourth Quarter 2016p Inventory Total Vacant Space Vacancy Rate Q1 2017 Absorption Year to Date Absorption Washington, DC 108,470,369 13,382,980 12.3% 43,356 43,356 Northern Virginia 130,065,770 27,762,560 21.3% -194,557-194,557 Suburban Maryland 59,331,631 11,619,715 19.6% 75,294 75,294 Regional Totals 297,867,770 52,765,255 17.7% -75,907-75,907 Trailing 12-Month Data 15 Historical Year-End Data 16 Market Statistics by Class 17-18 Survey of New Office Space by Submarket 19-22 Methodology & Definitions 23 Metro Washington Current Employment Data Nonfarm Employment (Jan-Mar 2016) Nonfarm Employment (Jan-Mar 2017p) Jobs Added/ Lost* Percent Change Washington, DC 780,033 787,800 7,767 1.0% Northern Virginia 1,429,000 1,458,467 29,467 2.1% Suburban Maryland 985,967 1,012,667 26,700 2.7% Regional Totals 3,212,200 3,269,167 56,967 1.8% SOURCE: U.S. Bureau of Labor Statistics (Not seasonally adjusted) * Average per year to date p - preliminary Cushman & Wakefield 14

Appendix Office Availability, Vacancy, and Net Absorption, First Quarter 2017p Total Inventory New/Relet Space Vacant Sublet Space Vacant Total Space Vacant Vacancy Rate (%) New/Relet Space Absorption Sublet Space Absorption Total Net Absorption Bethesda/Chevy Chase 8,641,418 690,638 129,020 819,658 9.5% 22,269 (35,162) (12,893) Rock Spring Park 4,189,001 1,077,465 4,161 1,081,626 25.8% 134,480 16,572 151,052 Pike Corridor 11,079,464 1,746,623 133,246 1,879,869 17.0% (22,501) (28,887) (51,388) I-270/Rockville 9,388,900 2,113,830 74,114 2,187,944 23.3% 260,313 12,911 273,224 Gaithersburg 2,022,113 306,029 862 306,891 15.2% 53,715 34,551 88,266 Germantown 1,908,759 397,303 4,616 401,919 21.1% 6,952 0 6,952 Silver Spring 4,877,684 503,627 32,304 535,931 11.0% 21,272 1,500 22,772 North Silver Spring 1,055,127 223,409 0 223,409 21.2% (48,993) 0 (48,993) Montgomery County 43,162,466 7,058,924 378,323 7,437,247 17.2% 427,507 1,485 428,992 Prince George's County 13,423,645 3,605,079 48,768 3,653,847 27.2% 75,632 27,361 102,993 Frederick County 2,745,520 526,725 1,896 528,621 19.3% (454,795) (1,896) (456,691) Suburban Maryland 59,331,631 11,190,728 428,987 11,619,715 19.6% 48,344 26,950 75,294 p - preliminary cushmanwakefield.com 15

Appendix Trailing 12-Month Data Total Inventory Vacancy Rate (%) Total Absorption 2nd Qtr 2016 3rd Qtr 2016p 4th Qtr 2016 1st Qtr 2017p 2nd Qtr 2016 3rd Qtr 2016p 4th Qtr 2016 1st Qtr 2017p 2nd Qtr 2016 3rd Qtr 2016p 4th Qtr 2016 1st Qtr 2017p Bethesda/Chevy Chase 8,612,795 8,612,795 8,612,795 8,641,418 12.2% 11.2% 9.7% 9.5% 45,544 89,940 128,324 (12,893) Rock Spring Park 4,240,001 4,240,001 4,240,001 4,189,001 28.8% 27.8% 29.1% 25.8% (35,919) 12,303 19,722 151,052 Pike Corridor 10,772,914 10,772,914 10,876,464 11,079,464 15.1% 15.3% 16.8% 17.0% 90,346 (9,123) (137,641) (51,388) I-270/Rockville 9,733,771 9,736,139 9,620,139 9,388,900 25.8% 26.9% 24.5% 23.3% (138,050) (105,293) 282,841 273,224 Gaithersburg 2,157,113 2,157,113 2,157,113 2,022,113 20.2% 19.8% 21.3% 15.2% 16,689 8,985 (31,550) 88,266 Germantown 1,908,759 1,908,759 1,908,759 1,908,759 23.1% 21.9% 21.4% 21.1% 20,981 23,941 8,920 6,952 Silver Spring 4,806,040 4,806,040 4,877,684 4,877,684 11.8% 12.1% 11.5% 11.0% 17,899 (12,480) 196,851 22,772 North Silver Spring 1,055,127 1,055,127 1,055,127 1,055,127 23.0% 21.5% 19.6% 21.2% 6,572 15,751 20,653 (48,993) Montgomery County 43,286,520 43,288,888 43,348,082 43,162,466 18.7% 18.6% 18.2% 17.2% 24,062 24,024 488,120 428,992 Prince George's County 13,423,645 13,423,645 13,423,645 13,423,645 29.4% 29.4% 28.3% 27.2% 82,507 (31,998) 145,440 102,993 Frederick county N/A N/A N/A 2,745,520 N/A N/A N/A 19.3% N/A N/A N/A (456,691) Suburban Maryland 56,710,165 56,712,533 56,771,727 56,586,111 21.2% 21.2% 20.6% 19.6% 106,569 (7,974) 633,560 75,294 p - preliminary Cushman & Wakefield 16

Appendix Historical Year-End Data Total Inventory Vacancy Rate (%) Total Absorption 2014 2015 2016 2017p 2014 2015 2016 2017p 2014 2015 2016 2017p Bethesda/Chevy Chase 8,612,795 8,612,795 8,612,795 8,641,418 12.9% 13.1% 9.7% 9.5% (13,664) (37,285) 392,132 (12,893) Rock Spring Park 4,055,404 4,079,001 4,240,001 4,189,001 25.0% 28.2% 29.1% 25.8% 13,911 (156,722) 15,828 151,052 Pike Corridor 10,693,270 10,772,914 10,876,464 11,079,464 21.8% 16.9% 16.8% 17.0% (415,229) 265,303 (194,059) (51,388) I-270/Rockville 9,488,710 9,536,528 9,620,139 9,388,900 24.5% 24.2% 24.5% 23.3% (421,930) (15,436) 322,339 273,224 Gaithersburg 2,122,113 2,157,113 2,157,113 2,022,113 21.9% 21.0% 21.3% 15.2% (28,431) 23,240 (37,426) 88,266 Germantown 1,908,759 1,908,759 1,908,759 1,908,759 23.6% 24.2% 21.4% 21.1% (11,331) (12,067) 62,762 6,952 Silver Spring 4,806,040 4,806,040 4,877,684 4,877,684 10.5% 12.2% 11.5% 11.0% (2,876) (80,969) 399,121 22,772 North Silver Spring 1,055,127 1,055,127 1,055,127 1,055,127 23.2% 24.9% 19.6% 21.2% 12,024 (18,302) 63,629 (48,993) Montgomery County 42,742,218 42,928,277 43,348,082 43,162,466 19.8% 19.0% 18.2% 17.2% (867,526) (32,238) 1,024,326 428,992 Prince George's County 13,417,890 13,515,386 13,423,645 13,423,645 24.7% 28.2% 28.3% 27.2% (110,601) (83,804) 341,389 102,993 Frederick County N/A N/A N/A 2,745,520 N/A N/A N/A 19.3% N/A N/A N/A (456,691) Suburban Maryland 56,160,108 56,443,663 56,771,727 59,331,631 21.0% 21.2% 20.6% 19.6% -978,127-116,042 1,365,715 75,294 p - preliminary cushmanwakefield.com 17

Market Statistics Suburban Maryland 1st Quarter 2017 Market Statistics Buildings Total Inventory (SF) New/Relet Vacancy (%) Sublet Vacancy (%) Total Vacancy* (%) Net Absorption Current QTR (SF) Under Construction (SF) Average (FS) Bethesda/Chevy Chase Class A 23 5,296,101 5.6% 0.8% 6.4% (28,756) 0 $42.06 B 26 2,640,140 11.2% 2.8% 14.0% (5,409) 0 $33.13 C 15 705,177 13.9% 1.4% 15.4% 21,272 0 $31.23 TOTAL 64 8,641,418 8.0% 1.5% 9.5% (12,893) 0 $35.43 Rock Spring Park Class A 14 3,074,412 25.6% 0.1% 25.7% 122,438 0 $31.31 B 8 953,589 28.7% 0.0% 28.7% 28,614 0 $26.79 C 1 161,000 11.0% 0.0% 11.0% 0 0 $16.62 TOTAL 23 4,189,001 25.7% 0.1% 25.8% 151,052 0 $30.11 Pike Corridor Class A 32 5,271,202 19.1% 0.0% 19.1% (49,410) 0 $31.25 B 46 4,947,208 12.1% 2.4% 14.6% 14,033 0 $26.69 C 16 861,054 16.2% 1.2% 17.3% (16,011) 0 $20.46 TOTAL 94 11,079,464 15.8% 1.2% 17.0% (51,388) 0 $28.26 I-270/Rockville Class A 46 6,604,051 20.9% 0.8% 21.7% 120,593 0 $30.35 B 32 2,615,028 25.8% 0.9% 26.7% 142,495 0 $23.20 C 3 169,821 32.6% 0.0% 32.6% 10,136 0 $16.01 TOTAL 81 9,388,900 22.5% 0.8% 23.3% 273,224 0 $27.58 Gaithersburg Class A 6 605,663 17.6% 0.1% 17.7% 62,975 0 $24.69 B 16 1,021,105 15.7% 0.0% 15.7% 11,314 0 $24.71 C 11 395,345 9.8% 0.0% 9.8% 13,977 0 $22.24 TOTAL 33 2,022,113 15.1% 0.0% 15.2% 88,266 0 $24.61 Germantown Class A 5 662,740 19.7% 0.5% 20.1% 2,447 0 $26.46 B 18 1,246,019 21.4% 0.1% 21.6% 4,505 0 $21.03 C 0 0 0.0% 0.0% 0.0% 0 0 N/A TOTAL 23 1,908,759 20.8% 0.2% 21.1% 6,952 0 $21.71 * Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space. Cushman & Wakefield 18

Market Statistics Suburban Maryland 1st Quarter 2017 Market Statistics Buildings Total Inventory (SF) New/Relet Vacancy (%) Sublet Vacancy (%) Total Vacancy* (%) Net Absorption Current QTR (SF) Under Construction (SF) Average (FS) Silver Spring Class A 14 2,901,148 9.9% 1.0% 10.9% 17,736 0 $31.19 B 7 973,764 10.0% 0.0% 10.0% 17,159 0 $26.30 C 21 1,002,772 11.9% 0.2% 12.1% (12,123) 0 $23.42 TOTAL 42 4,877,684 10.3% 0.7% 11.0% 22,772 0 $28.83 North Silver Spring Class A 4 222,322 2.3% 0.0% 2.3% 718 0 N/A B 16 832,805 26.2% 0.0% 26.2% (49,711) 0 $24.04 C 0 0 0.0% 0.0% 0.0% 0 0 N/A TOTAL 20 1,055,127 21.2% 0.0% 21.2% (48,993) 0 $24.04 Prince George s County Class A 39 4,592,560 29.2% 0.3% 29.5% 86,507 0 $22.33 B 135 7,200,030 26.0% 0.5% 26.5% 40,055 0 $21.95 C 54 1,631,055 24.0% 0.0% 24.0% (23,569) 0 $23.10 TOTAL 228 13,423,645 26.9% 0.4% 27.2% 102,993 0 $21.52 Frederick County Class A 14 1,737,465 13.4% 0.0% 13.4% (232,026) 0 $20.61 B 18 1,008,055 29.2% 0.2% 29.4% (224,665) 0 $17.56 C 0 0 0.0% 0.0% 0.0% 0 0 N/A TOTAL 32 2,745,520 19.2% 0.1% 19.3% (456,691) 0 $18.20 Suburban Maryland Class A 197 30,967,664 18.0% 0.5% 18.5% 103,222 0 $29.30 B 322 23,437,743 20.3% 1.1% 21.4% (21,610) 0 $23.40 C 121 4,926,224 17.5% 0.5% 17.9% (6,318) 0 $23.06 TOTAL 640 59,331,631 18.9% 0.7% 19.6% 75,294 0 $26.04 * Total Vacancy - the vacancy rate is calculated using the combined total of relet, sublet and new vacant space. cushmanwakefield.com 19

Survey of Office Space Under Construction/Under Renovation BUILDING ADDRESS OWNER/DEVELOPER RENTAL RATE STATUS DELIVERY DATE RENTABLE BUILDING AREA Total - - AVAILABLE SPACE PERCENT PRELEASED 5801 University Research Court Corporate Office Properties Trust $33.00 - $35.00 FS U/C $43,374 75,000 75,000 0% Suburban, MD Summary RENTABLE BUILDING AREA AVAILABLE SPACE PERCENT PRELEASED 2017 Deliveries 0 0-2018 Deliveries 75,000 75,000 100% TOTAL CURRENTLY UNDER CONSTRUCTION/RENOVATION 75,000 75,000 100% Status Operating Expense and Real Estate Tax Base U/C = Under Construction FS = Full Service NN = Plus Electric & Char U/R = Under Renovation N = Plus Electric NT = Plus Taxes NNN = Net of all Operating Expenses and Taxes MAJOR TENANTS Cushman & Wakefield 20

Suburban Maryland Survey of New Office Space 2017 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET RENTABLE BUILDING AREA NEW SPACE AVAILABLE No Deliveries in the First Quarter Total - - - VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY 2016 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET RENTABLE BUILDING AREA NEW SPACE AVAILABLE VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY 12358 Parklawn Drive Greencourt Property Group Delivered 4Q16 N/A I-270/Rockville 103,550 90,029 87% 0% 12435 Park Potomac Foulger-Pratt Delivered 1Q16 $44.50 FS I-270/Rockville 156,000 70,499 45% 33% Total 259,550 160,528 62% 2015 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET 7800 Harkins Road Maryland Department of Housing and Community Development RENTABLE BUILDING AREA NEW SPACE AVAILABLE VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY Berman Enterprises Delivered 3Q15 N/A Central PGC 110,000 0 0% 100% Total 110,000-0% 100% 2014 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET RENTABLE BUILDING AREA NEW SPACE AVAILABLE VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY 4500 East West Highway Carr Properties Delivered 4Q14 Withheld Bethesda/ Chevy Chase 226,352 24,829 11% 12% 11810 Grand Park Avenue Pike & Rose Building 11 Federal Realty Investment Trust Delivered 3Q14 $45.00 FS North Bethesda 80,000 5,000 6% 50% 5601 Fishers Lane The JBG Companies Delivered 2Q14 N/A Rockville 490,998 0 0% 100% 14995 Shady Grove Road Lerner Enterprises Delivered 2Q14 Withheld North Rockville 101,181 87,003 86% 0% Total 898,531 116,832 13% 87% cushmanwakefield.com 21

Suburban Maryland Survey of New Office Space 2013 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET RENTABLE BUILDING AREA NEW SPACE AVAILABLE VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY 121 Rockville Pike Rockville Metro Plaza II The Foulger-Pratt Companies Delivered 2Q13 $44.50 FS Rockville 184,720 20,818 11% 75% 9609 Medical Center Drive National Cancer Institute The JBG Companies Delivered 1Q13 N/A North Rockville 575,000 0 0% 100% 9905 Medical Center Drive Aquilino Cancer Center Shady Grove Medical Building Delivered 3Q13 N/A North Rockville 41,156 0 0% 100% 12409 Milestone Center Court Milestone Building 5 MEPT/New Tower Trust Company Delivered 1Q13 $28.00 FS Gaithersburg/ Germantown 162,285 28,116 17% 83% Total 963,161 48,934 5% 92% 2012 Deliveries BUILDING ADDRESS OWNER/DEVELOPER STATUS RENTAL RATE SUBMARKET RENTABLE BUILDING AREA NEW SPACE AVAILABLE VACANCY RATE (AS OF CURRENT QUARTER)* PERCENT LEASED UPON DELIVERY 7550 Wisconsin Avenue Akridge Delivered 4Q12 Withheld Bethesda/ Chevy Chase 105,500 0 0% 0% 7700 Old Georgetown Road Chevy Chase Garden Plaza B.F. Saul Delivered 1Q12 Negotiable Bethesda/ Chevy Chase 185,470 14,150 8% 15% 11601 Landsdown Street 3 White Flint North - NRC Headquarters LCOR / USAA Real Estate Delivered 4Q12 N/A North Bethesda 362,000 0 0% 100% 5830 University Research Court NOAA Building University of Maryland Medical System/Corporate Office Properties Trust Delivered 3Q12 N/A Northern Prince George's 269,000 0 0% 100% Total 921,970 14,150 2% 71% Operating Expense and Real Estate Tax Base *Vacancy rate for new space- does not include relet or sublet space available FS = Full Service NN = Plus Electric & Char N = Plus Electric NT = Plus Taxes NNN = Net of all Operating Expenses and Taxes Cushman & Wakefield 22

Methodology & Definitions Methodology Market statistics are calculated from a base building inventory made up of office properties deemed to be competitive in the typical Washington, DC office market. Single-tenant buildings and privately-owned buildings in which the federal government leases space are included. Generally, owneroccupied and federally-owned buildings are not included. Older buildings unfit for occupancy or ones that require substantial renovation before tenancy are generally not included in the competitive inventory. Vacant space is defined as space that is physically vacant and available immediately. Sublet space still occupied by the tenant is not counted as vacant space. Explanation of Terms Total Inventory: The total amount of office space (in buildings greater than 10,000 square feet) that can be rented by a Fourth party. New Space Vacant: First generation, never-occupied office space in newly constructed or substantially renovated buildings, being actively marketed by a landlord. Relet Space Vacant: Secondgeneration, unoccupied office space being actively marketed by a landlord. (Space that is marketed but largely occupied is not counted as vacant space.) Sublet Space Vacant: Secondgeneration, unoccupied space being actively marketed by a tenant. (Sublet space that is marketed but still occupied is not counted as vacant space.) Total Space Vacant: The sum of new, relet, and sublet space that is unoccupied and being actively marketed. Vacancy Rate: The amount of unoccupied space (new, relet, and sublet) expressed as a percentage of total inventory. (Total Space Vacant divided by Total Inventory.) Total Space Available: The total amount of space, both vacant and occupied, being actively marketed for lease by a tenant or landlord. (This includes space that is currently occupied but marketed for future availability.) Availability Rate: The total amount of space being actively marketed for lease (both vacant and occupied) expressed as a percentage of total inventory. (Total Space Available divided by Total Inventory.) Absorption: The net change in occupied space between two points in time. (Total occupied space in the previous quarter minus total occupied space in the current quarter, quoted on a net, not gross, basis.) New/Relet/Sublet Absorption: The net change in occupied new, relet, and sublet space between two quarters. Total Absorption: The net change in total occupied (new, relet, and sublet) space between two quarters. New Leasing Activity: The sum of all square footage underlying any leases between two quarters. This includes pre-leasing activity as well as expansion. It does not include renewals. Disclaimer This report and other research materials may be found on our website at www.cushmanwakefield.com. This is a research document of Cushman & Wakefield in Washington, DC. Questions related to information herein should be directed to the Research Department at +1 202 463 2100. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. cushmanwakefield.com 23

Visit cushmanwakefield.com for more information on the full range of Cushman & Wakefield commercial real estate services or contact: Nathan Edwards Regional Director 2101 L Street, NW, Suite 700 Washington, DC 20037 +1 202 463 2100 Adam Bevirt Research Analyst 2101 L Street, NW, Suite 700 Washington, DC 20037 +1 202 463 2100 Joseph Wood Research Analyst 2101 L Street, NW, Suite 700 Washington, DC 20037 +1 202 463 2100 Core Services Capital Markets - Debt Placement - Investment Sales - Note Sales - Structured Finance Corporate Services - Facilities Management - Portfolio Administration - Project Management - Strategic Consulting - Transaction Management Project Leasing Project and Development Services Property Management Tenant Representation Practices and Specialties Auction Services Distressed Assets Financial Advisory Food and Beverage Golf and Resort Properties Government Contracting Government Services Healthcare Higher Education Hospitality Law Firm Life Sciences Location Advisory and Incentives Mission Critical Net Lease Not-for-profit Private Client Supply Chain Sustainability Services About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive Real Estate Types Industrial Land Multi-family Office Retail platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. Publication date: 6.2.16 Copyright 2016 Cushman & Wakefield. All rights reserved.