Oklahoma City. Year-End 2007 Office Market Summary

Oklahoma City Year-End Office Market Summary

TABLE OF CONTENTS Office Market Summary 1 Central Business District Submarket 2-3 Northwest Submarket 4-6 North Submarket 7-9 Midtown Submarket 10-11 West Submarket 12-13 Suburban Submarket 13 Year-End Sales Summary Back Cover The information contained herein has been obtained from reasonably reliable sources. Price Edwards & Company makes no guarantee, either express or implied, as to the accuracy of such information. All data contained herein is subject to errors, omissions and changes. Reproduction in whole or in part, without prior written consent is prohibited.

Oklahoma City Year-End Office Market Summary was another very good year for the Oklahoma City office market. While absorption was not as strong as the previous year, the market overcame some potentially negative factors to remain very healthy. The market absorbed nearly 170,000 square feet and experienced a reduction in the total market vacancy of nearly a full percentage point ending the year at 14.8% vacant. 35% 3 25% 15% 1 5% '98 '99 OKC Total Office Market Vacancy Market Vacancy CBD Vacancy Suburban Vacancy '00 '01 '02 '03 '04 '05 '06 '07 The suburban markets continue to fare well in almost every submarket and building classification. Although the overall suburban vacancy rate increased slightly from 8.8% to 9. because of new construction, the suburban markets actually absorbed 112,000 square feet during the year. Because the suburban submarkets continue to enjoy low vacancies and increasing rents, those areas continue to experience construction of additional inventory, particularly the Northwest submarket along the Kilpatrick Turnpike. However, local developers continue to take a very conservative approach to new construction. Only 100,000 SF of space was added in and only 160,000 or so is currently under construction or on the drawing board for 2008. And of all the new space, not a single building in excess of 45,000 SF has been constructed, as no development group has put its neck on the line for a project of any significant size. As in the past few years, the market should be easily able to absorb the additional space with no adverse effect. (millions of square feet) 20 15 10 5 OKC Total Office Market Inventory 0 '98 '99 Occupied SF '00 '01 '02 Vacant SF '03 '04 '05 '06 '07 continue to be an albatross around the CBD s neck, as the vacancy rate for that building class languishes near 6. While you can t ignore that the Class C vacancy exists, it certainly skews the image of the downtown market, which is actually fairly healthy in the buildings that offer better space and amenities. Overall, the CBD absorbed nearly 60,000 square feet during. The outlook for 2008 also looks good as downtown leasing activity is better than it has been in several years. 2008 should prove to be OKC Total Office Market Absorption another positive year for 500000 the local office market. The national economy bears 400000 watching, but we seem to 300000 be insulated from any serious 200000 downturn locally by the 100000 continued growth of the oil and gas sector. New leasing 0 activity should remain brisk -100000 2003 2004 2005 2006 and many existing tenants continue to expand their operations in Oklahoma City. As mentioned, the continued improvement in the suburban markets is also reflected in rental rates. At the end of the average asking rate for suburban space had risen to $15.36 per square foot, with Class A rates rising from $19.84 to $20.89 per square foot. As in the last few years, the Class A rate increase is $17.00 $16.00 $15.00 $14.00 $13.00 $12.00 $11.00 OKC Total Office Rental Rates Northwest North Suburban 2003 CBD 2004 West 2005 2006 Midtown pulling Class B and C rates up as well. Class B rates increased from $14.30 to $14.56 per square foot and Class C rates rose from $11.52 to $12.19 per square foot. In the Central Business District, it s hard to imagine that the past year could have been better than the final results indicate. Downtown s vacancy rate decreased from 27.7% to 25.8%, but the best news of the year was Sandridge Energy s acquisition of the former Kerr-McGee headquarters building, which averted nearly a half million square feet of inventory being dumped on the market. The downtown Class A vacancy rate is actually only 12.2% and the Class B vacancy rate is 14.3%. The older, less functional Class C buildings Oklahoma City Metro area submarket map 1

Year-End Oklahoma City Office Market Summary Central Business District Submarket Year-End CBD Vacancy 35% 3 25% 15% 1 5% 2003 2004 2005 2006 Year-End CBD Rental Rates by Class $19.00 Class A Class B Class C $17.00 YEAR-END CENTRAL BUSINESS DISTRICT REVIEW Aggregate vacancy rates decreased from 27.7% to 25.8% Class A vacancy decreased from 14.7% to 12.2% Class B vacancy decreased from 16.2% to 14.3% Class C vacancy decreased from 60. to 58.6% Aggregate rental rates increased from $14.43 per SF to $14.61 per SF Class A rates increased from $17.06 per SF to $17.08 per SF Class B rates increased from $13.26 per SF to $13.66 per SF Class C rates increased from $12.98 per SF to $13.00 per SF The CBD absorbed 60,000 SF in Central Business District $15.00 $13.00 $11.00 $9.00 2003 2004 2005 2006 Year-End CBD Occupancy by Class 10 8 6 2008 CENTRAL BUSINESS DISTRICT FORECAST Vacancy rates should decrease in 2008 Rental rates will remain near current levels 4 Class A Class B Class C 100000 Year-End CBD Absorption 62000 24000-14000 -52000-90000 2003 2004 2005 2006 2 Downtown Oklahoma City

Year-End Oklahoma City Office Market Summary Central Business District Submarket CBD Year Built Floors RSF Vacant SF Vacant % Rate CAF 100 Park Avenue Building 1923/1964 12 99,752 7,882 8% $11.00 12% 100 Park Ave 101 Park Avenue Building 1936/1974 14 197,042 67,545 34% $14.00 16.39% 101 Park Ave 20 N. Broadway 1981 19 307,388 0 $16.00 20 N Broadway Bank of Oklahoma Plaza 1972 16 233,808 26,724 11% $14.50 201 Robert S Kerr Ave Chase Tower 1971 36 517,454 16,500 3% $14.25 15% 100 N Broadway City Place 1931/1985 33 292,304 71,968 25% $12.00 14% 204 N Robinson Ave Corporate Tower 1980 14 277,849 12,974 5% $16.00 17.59% 101 N Robinson Ave Court Plaza 1923/1979 10 78,381 28,692 37% $10.50 14% 228 Robert S Kerr Ave Dowell Center 1926 20 190,000 190,000 10 $9.50 15% 134 Robert S Kerr Ave First National Center 1931/1974 28 972,267 582,687 6 $14.00 14% 120 N Robinson Ave Hightower Building 1929 10 107,152 15,000 14% $14.00 15% 105 N Hudson Ave Leadership Square 1984 21N/16S 735,514 96,844 15% $17.00 211 N Robinson Ave 11,777 (S) Oklahoma Tower 1982 31 568,960 98,000 17% $17.00 210 Park Ave One North Hudson 1931/1981 11 73,000 16,818 23% $10.00 12% 401 W Sheridan Ave Robinson Plaza 1992 10 183,000 43,000 23% $11.00 50 N Robinson AVe Robinson Renaissance 1927/1987 12 174,840 29,467 17% $13.00 25% 119 N Robinson Ave Sonic Building 2003 4 100,654 1,930 2% $21.50 8.57% 300 Johnny Bench Dr The Reserve 1922/1997 2 59,284 14,631 25% $16.00 226 Dean A McGee Ave CBD Totals 5,168,649 1,332,439 25.8% $14.61 Central Business District 3

Year-End Oklahoma City Office Market Summary Northwest Submarket Year-End Northwest Vacancy 15% 1 5% 2003 2004 2005 2006 Year-End Northwest Rental Rates by Class $21.00 Class A Class B Class C $19.00 $17.00 YEAR-END Northwest submarket REVIEW Aggregate vacancy rates increased from 9.2% to 9.5% Class A vacancy increased from 7.9% to 16.1% Class B vacancy decreased from 10.6% to 6.9% Class C vacancy decreased from 10.5% to 8.4% Aggregate rental rates increased from $15.38 per SF to $15.95 per SF Class A rental rates increased from $19.67 per SF to $20.49 per SF Class B rental rates increased from $14.62 per SF to $14.99 per SF Class C rental rates increased from $11.61 per SF to $12.31 per SF The Northwest Oklahoma City Submarket experienced absorption of 124,000 SF during Northwest $15.00 $13.00 $11.00 2003 2004 2005 2006 Year-End Northwest Occupancy by Class 10 2008 northwest submarket FORECAST Vacancy rates should continue to drop slightly as this submarket remains strong but also deals with the addition of approximately 100,000 SF of new construction Quoted rates will rise due to such a small amount of available Class A and B space 8 6 4 Class A Class B Class C 200000 Year-End Northwest Absorption 150000 100000 50000 0 2003 2004 2005 2006 4 The Caliber Center

Year-End Oklahoma City Office Market Summary Northwest Submarket Northwest Submarket Year Built Floors RSF Vacant SF Vacant % Rate CAF 14201-14301 Caliber Drive 2 81,520 0 $23.00 17.2% 14201-14301 Caliber Dr 2525 Expressway 1974 6 82,110 6,280 8% $12.00 15% 2525 NW Expressway 4100 Perimeter Center 1982 3 47,317 5,577 12% $13.00 15% 4100 Perimeter Center Dr 4101 Perimeter Center 1982 3 47,317 0 $13.00 15% 4101 Perimeter Center Dr 4141 Northwest Expressway 1982 3 46,464 0 $11.00 16% 4141 NW Expressway 4200 Perimeter Center 1981 2 61,327 0 $13.00 15% 4200 Perimeter Center Dr 4801 Gaillardia 2000 3 71,867 0 $24.00 15% 4801 Gaillardia Parkway 5100 Brookline 1974 10 107,496 7,711 7% $16.00 15% 5100 Brookline AVe 5909 NW 1982 7 101,146 15,407 15% $14.00 13% 5909 NW Expressway American Cancer Society 2001 1 45,000 0 $16.50 8400 Silver Crossing Atrium Towers 1980 6 156,106 8,471 5% $15.00 15% 3501-3503 NW 63rd St Avaya Building 1998 1 57,000 0 $15.00 14400 Hertz Qual Springs Parkway Bradley Square 1984 1 30,000 2,700 9% $15.00 1 2932 NW 122nd St Brookline Offices 1971 1 40,920 13,228 32% $10.00 6051 N Brookline Ave Center 3000 1972 3 104,500 12,886 12% $11.75 12% 3000 United Founders Blvd Chase Bank Building 1981 4 41,943 17,654 42% $15.50 15% 6303 N Portland Ave Chase Park 1981 2 30,281 2,495 17% $13.50 12% 4323 NW 63rd St 2,800 (S) Commerce Center South 1982 3 65,857 0 $13.00 11% 9520 N May Ave Coppertree Centre 1982 3 26,928 1,405 5% $15.00 1 3727 NW 63rd Ave Cross Rock Place 1 1984 3 52,090 0 $18.00 11% 13801 Continental Dr Cross Rock Place 2 1992 2 50,500 9,824 19% $22.00 12% 3600 NW 128th St Dobson Communications 2001 3 144,420 0 $22.50 16% 14101-14201 Wireless Way Enterprise Plaza 1981 3 92,542 0 $16.00 15% 5600 N May Ave FBI Building 1999 1 73,380 0 $17.00 3301 W Memorial Rd Fifty-Six Expressway Place 1982 3 58,340 10,859 19% $12.50 1 5601 NW 72nd St Five Corporate Plaza 1980 3 49,486 0 $16.00 15% 3625 NW 56th St Gaillardia II 2 42,970 8,401 $25.00 15% 4701 Gaillardia Parkway Grand Centre 1982 5 101,217 13,360 13% $16.50 15 5400 NW Grand Blvd Hartford Insurance 1999 1 100,000 0 $16.00 7800 NW 85th Terrace IBC Bank Building 1980 3 69,376 0 $15.00 12% 3601 NW 63rd St Jamestown Office Park 1972/1979 2 78,283 650 1% $12.50 1 3037 NW 63rd St Northwest 5

Year-End Oklahoma City Office Market Summary Northwest Submarket Northwest Northwest Submarket con t. Year Built Floors RSF Vacant SF Vacant % Rate CAF Lakepark Tower 1983 6 103,084 25,550 25% $13.50 13% 6525 N Meridian Ave Lakepointe Towers 1981 6 177,746 10,872 6% $14.00 13% 4005-4013 NW Expressway Lakepointe West 1982 6 85,246 11,161 13% $13.50 12% 4045 NW 64th St Lakeshore Tower 1982 3 29,761 1,834 6% $12.00 15% 4301 NW 63rd St Landmark Towers 1969/1972 10 290,000 11,239 4% $13.00 12% 3535-3545-3555 NW 58th St Mercury Insurance Building 1986 2 100,103 0 $12.50 12.5% 7301 NW Expressway Mutual Assurance Building 1999 2 40,000 3,147 8% $18.00 12% 3121 Quail Springs Parkway North Shore Office Plaza 2001 5 55,570 0 $20.50 15% 10900 Hefner Dr Northwest Office Center 1973 2 85,833 11,803 14% $12.50 12% 4334 NW Expressway Oil Center 1973/1978 13 249,654 28,685 11% $14.00 13% 2601 NW Expressway One Corporate Plaza 1979 1 63,011 2,237 4% $15.50 15% 3525 NW 56th St Portland Plaza 1969 3 35,425 1,009 3% $12.00 14% 5700 N Portland Ave Quail Creek Commerce Center 1998 1 128,500 0 $17.50 3201 Quail Springs Parkway Quail Creek North 1973 2 34,780 1,042 3% $12.00 15% 11032 Quail Creek Rd Quail Ridge Tower 1975 4 46,950 11,621 25% $13.00 16.5% 11212 N May Ave Quail Springs Parkway Plaza I & II 1986 6 321,312 9,774 3% $19.50 14% 14000 Quail Springs Parkway Quail Springs Professional Building 2002 2 25,420 0 $17.50 16% 14313 N May Ave Rees Plaza at East Wharf Nov-02 3 42,000 0 $21.00 15.3% 9211 Lake Hefner Parkway Rockwell Office Center 1982 2 30,000 6,231 21% $12.00 13% 8621 N Rockwell Ave Sprint PCS Building 1999 1 90,000 0 $18.00 8525 Silver Crossing St. Martins Building 1990 2 59,712 0 $14.00 13% 9020 N May Ave Summit Executive Building 1975 5 50,000 1,170 2% $11.00 1 5929 N May Ave The Caliber Center 1983 10 276,246 170,868 62% $19.50 15% 3817 NW Expressway Three Corporate Plaza 1980 3 49,920 10,577 21% $15.00 15% 3613 NW 56th St Two Corporate Plaza 1982 3 85,551 0 $15.00 14.5% 5555 NW Grand Blvd Union Plaza 1982 18 247,379 17,519 7% $19.00 14% 3030 NW Expressway Williams Sonoma 1998 1 36,000 0 $16.00 7720 NW 84th St Northwest Submarket Totals 4,996,906 476,047 9.5% $15.95 Northwest Construction Year Built Floors RSF Vacant SF Vacant % Rate CAF 4811 Gaillardia May 2008 3 41,451 41,451 10 $25.00 15% 4811 Gaillardia Parkway 4727 Gaillardia Dec 2008 3 30,000 24,000 8% $27.00 n/a 4727 Gaillardia Parkway Northwest Construction Totals 71,451 65,451 91.6% $26.00 6

Year-End Oklahoma City Office Market Summary North Submarket Year-End North Vacancy 15% 12% 9% 6% 3% 2003 2004 2005 2006 Year-End North Rental Rates by Class $22.00 Class A Class B Class C $20.00 $18.00 YEAR-END North submarket REVIEW Aggregate vacancy rates decreased from 7. to 5.6% Class A vacancy decreased from 0.8% to 0.4% Class B vacancy decreased from 7.3% to 3.9% Class C vacancy increased from 13. to 17.5% Aggregate rental rates increased from $15.17 per SF to $16.07 per SF Class A rental rates increased from $20.00 per SF to $21.75 per SF Class B rental rates increased from $14.68 per SF to $15.34 per SF Class C rental rates increased from $11.56 per SF to $12.36 per SF The Oklahoma City North Submarket experienced negative absorption of 3,000 SF during $16.00 $14.00 $12.00 $10.00 2003 2004 2005 2006 Year-End North Occupancy by Class 10 2008 north submarket forecast Vacancy rates should continue to drop as local energy companies continue to acquire space and buildings Rental rates will show a slight increase particularly in the Class B segment of this submarket North 8 6 4 Class A Class B Class C 200000 Year-End North Absorption 150000 100000 50000 0-50000 2003 2004 2005 2006 The Waterford 7

Year-End Oklahoma City Office Market Summary North Submarket North Submarket Year Built Floors RSF Vacant SF Vacant % Rate CAF North 1001 Wilshire 2003 4 43,316 0 $19.51 13% 1001 W Wilshire Ave 50 Penn Place 1973 16 178,315 9,927 9% $16.50 1 5100 N Pennsylvania Ave 6, 319 (S) 5101 Circle Building 1982 6 74,799 1,984 3% $14.00 14% 5101 N Classen Blvd 7 & 9 Broadway Executive Park 1979 1 29,201 6,640 23% $14.50 NW 63rd St and N Broadway Ext Broadway Plaza 1982 3 38,726 0 $13.50 13% 16 NW 63rd St Broadway Sixty-Eight 1979 3 40,000 0 $14.00 14% 6801 N Broadway Ext Central Park One 1982 6 113,134 7,454 7% $17.00 14% 525 Central Park Dr Central Park Two 1984 6 124,463 0 $17.00 14% 515 Central Park Dr Chase Bank Building 1970 5 39,367 2,531 6% $15.00 9% 1200 NW 63rd St Columbus Square 1982 3 36,559 2,009 5% $15.50 1 1001 NW 63rd St Five North Broadway 1972 3 44,805 0 $16.00 15% 6601 N Broadway Ext Glenbrook Centre East 1970 3 62,503 25,726 41% $15.00 14% 1120 NW 63rd St Glenbrook Centre West 1972 5 52,905 8,725 16% $15.00 1 1140 NW 63rd St Harvey Parkway 1982 6 98,807 2,538 3% $16.00 17% 301 NW 63rd St Lincoln Plaza Office Park 1970 2 238,300 22,206 9% $11.00 12% 4545 N Lincoln Blvd MidFirst Plaza 1982 6 95,043 0 $13.00 12% 501 NW Expressway Nichols Hills Executive Center 1981 2 53,996 650 1% $17.00 14% 1000 W Wilshire Blvd Northgate 1974 2 48,704 13,000 27% $10.00 4010, 4020, 4024, 4030 N Lincoln Blvd One Benham Place 1983 8 152,959 1,157 1% $17.50 15% 9400 N Broadway Ext One Broadway Center 1980 3 34,984 0 $14.00 9% 100 NW 63rd St One Broadway Executive Park 1979 3 58,832 0 $14.50 12.32% 201 NW 63rd St One Grand Park 1982 6 100,694 0 $15.00 14% 777 NW Grand Blvd One Western Plaza 1972 2 50,948 9,968 $14.00 16.5% 5500 N Western Ave Paragon Building 1981 5 110,791 14,532 13% $15.50 15% 5801 N. Broadway Pavilion Building 1974 3 39,895 3 $11.50 12% 6701 N Broadway Ext Penn Park 1973 2 78,643 13,370 17% $13.00 13% 5001, 5005, 5009, 5015 N Pennsylvania Ave Regency Center 1982 5 67,272 0 $14.00 12% 701 NW 63rd Ave Registry 1980 2 93,176 5,871 6% $14.00 2200 NW 50th St Richmond Square 1982 2 27,606 5,694 21% $14.00 12% 4900 Richmond Square 8

Year-End Oklahoma City Office Market Summary North Submarket North Submarket con t. Year Built Floors RSF Vacant SF Vacant % Rate CAF Santa Fe North 1981 4 44,000 0 $14.50 14% 6 NE 63rd St The Tower 1984 22 299,137 2,121 1% $22.00 17.8% 1601 NW Expressway Three Broadway Executive Park 1977 3 45,256 5,152 11% $14.00 1 6501 N Broadway St Three Grand Park 1985 6 100,813 0 $14.00 13% 999 NW Grand Blvd Two Broadway Executive Park 1980 3 52,205 3,991 8% $14.00 11.42% 205 NW 63rd St Waterford A 1983 4 147,000 0 $21.50 16% 6301 Waterford Blvd Waterford B 1983 2 35,468 0 $21.50 16% 6303 Waterford Blvd Waterford C 1984 2 81,575 0 $21.50 16% 6305 Waterford Blvd Waterford D 1984 2 34,087 0 $21.50 16% 6307 Waterford Blvd North Totals 3,068,284 171,568 5.6% $16.07 North 9

Year-End Oklahoma City Office Market Summary West Submarket Year-End West Vacancy 15% 1 5% 2003 2004 2005 2006 Year-End West Rental Rates by Class $13.00 Class B Class C YEAR-END West submarket REVIEW Aggregate vacancy rates increased from 15.6% to 17.2% Class B vacancy totals increased from 11.3% to 14.2% Class C vacancy totals decreased from 25.2% to 23. Aggregate rental rates decreased from $12.24 per SF to $11.87 per SF Class B rental rates decreased from $12.55 per SF to $11.94 per SF Class C rental rates increased from $11.53 per SF to $11.72 per SF The West Oklahoma City Office Market experienced absorption of 14,000 SF in $12.00 2008 West submarket FORECAST Vacancy rates should remain near current levels in 2008 $11.00 Rental rates in the will also stay near current levels West $10.00 2003 2004 2005 2006 10 Year-End West Occupancy by Class 8 6 4 Class B Class C 15000 Year-End West Absorption 5000-5000 -15000-25000 2003 2004 2005 2006 10 The Parkway

Year-End Oklahoma City Office Market Summary West Submarket West Year Built Floors RSF Vacant SF Vacant % Rate CAF 300 Meridian Place 1982 2 77,559 8,051 26% $12.50 11% 300 N Meridian Ave 12,400 (S) Bank 2 Tower 1975 7 58,598 6,898 12% $13.00 12% 909 S Meridian Ave Corporate West One 1980 3 38,031 12,645 33% $12.00 1 5208 W Reno Ave Corporate West Two 1983 3 39,000 0 $9.00 8% 309 S Ann Arbor Ave Metro Office Park 1981 3 60,750 18,000 3 $9.50 4300 Highline Blvd Sovereign Office Park 1983 1 42,260 8,000 19% $10.00 1300 Sovereign Row The Parkway 1982 6 96,960 14,021 14% $13.50 15% 1300 S Meridian Ave Westpark Office Center 1986 1 73,607 5,865 8% $12.00 715 Metropolitan Will Rogers Office Park 1 1984 1 54,170 15,116 28% $13.50 16% 4400 Will Rogers Parkway Will Rogers Office Park 2 1985 1 46,748 0 $11.00 1 4350 Will Rogers Parkway West Totals 587,683 100,996 17.2% $11.87 West 11

Year-End Oklahoma City Office Market Summary Midtown Submarket Year-End Midtown Vacancy 15% 1 5% 2003 2004 2005 2006 Year-End Midtown Rental Rates by Class $14.00 Class B Class C YEAR-END midtown submarket REVIEW Aggregate vacancy rates increased from 2.1% to 13.1% Class B vacancy rates increased from 2.4% to 14.1% Class C vacancy rates increased from 1.1% to 2.9% Aggregate rental rates increased from $12.08 per SF to $12.88 per SF Class B rental rates increased from $12.43 per SF to $13.04 per SF Class C rental rates average $10.64 per SF to $11.35 per SF The Midtown Submarket experienced negative absorption of 23,000 SF during Midtown $13.00 $12.00 $11.00 $10.00 2003 2004 2005 2006 Year-End Midtown Occupancy by Class 10 2008 midtown submarket FORECAST Vacancy rates will remain low as more users recognize Midtown as the most economical submarket Rental rates will remain at or near current levels 8 6 4 Class B Class C 60000 Year-End Midtown Absorption 40000 20000 0-20000 -40000 2003 2004 2005 2006 12 The Cameron Building

Year-End Oklahoma City Office Market Summary Midtown Submarket Midtown Submarket Year Built Floors RSF Vacant SF Vacant % Rate CAF 2000 Classen Center 1966/1976 6 318,605 22,000 7% $13.50 1 2000 N Classen Blvd 3700 Classen Building 1980 2 52,800 7,000 13% $11.00 13% 3700 N Classen Blvd 3800 Classen Building 1982 3 52,800 4,300 8% $11.00 13% 3800 N Classen Blvd 4801 Classen Building 1974 2 33,151 0 $9.75 4801 N Classen Blvd Cameron Building 1955/1957 5 81,493 3,263 4% $12.00 1 2901 N Classen Blvd Santa Fe Building 1954/1982 4 55,203 0 $9.00 1 3814 N Santa Fe Ave Shepherd Mall Office Complex 1964/95 2 640,000 45,000 7% $13.50 2401 NW 23rd St 80,000 (S) Midtown Totals 1,234,052 161,563 13.1% $12.88 Year-End Oklahoma City Office Market Summary Suburban Submarket Year-End Suburban Rental Rates by Class $18.00 $16.00 $14.00 $12.00 $10.00 Northwest North West Midtown 2003 2004 2005 2006 Year-End Suburban Absorption 400000 300000 YEAR-END Suburban submarket REVIEW Aggregate vacancy rates increased from 8.8% to 9.2% Class A vacancy increased from 5.6% to 11.1% Class B vacancy decreased from 8.8% to 7.7% Class C vacancy increased from 12.4% to 12.6% Aggregate rental rates increased from $14.87 per SF to $15.36 per SF Class A rental rates increased from $19.84 per SF to $20.89 per SF Class B rental rates increased from $14.30 per SF to $14.56 per SF Class C rental rates increased from $11.52 per SF to $12.19 per SF Suburban Oklahoma City experienced absorption of 112,000 SF during Midtown - Suburban 200000 2008 SUburban submarket FORECAST 100000 Suburban rental rates will continue to climb 0 2003 2004 2005 2006 Suburban vacancy rates will decrease particularly in Class B projects Class A space vacancies should also remain very low Some new construction will add approximately 100,000 SF during 2008 Suburban Submarket Totals 9,886,925 910,174 9.2% $15.36 OKC Office Market Totals 15,055,574 2,242,613 14.9% $15.10 13

Oklahoma City Year-End Office Market Sales Summary Oklahoma City experienced another active year of office building sales transactions in. For properties in excess of 25,000 square feet, a total of 12 office buildings changed hands in the suburban and downtown submarkets. Total sales volume was just under $100 million on approximately 2,000,000 square feet of properties. These figures are slightly down from 2006 where 16 properties sold, with total volume of $107 million on 2,250,000 square feet. These results do not include sales of medical office buildings which are considered a different asset class from general office buildings. for their real estate investment dollar. The only Class A property to sell in was the Hertz Financial Center at 3817 NW Expressway. Purchased in December by Caliber Development, the building has been renamed The Caliber Center and will bring to the market approximately 100,000 square feet of space formerly occupied by Hertz. This sale represents one of the few true valueadd opportunities seen in Oklahoma City in several years. The downtown area saw the most significant transaction of the year with Kerr McGee Tower selling to Sandridge Energy. This sale averted what would have been a black eye for Oklahoma City, a major downtown high-rise office building sitting empty. Given that Sandridge will ultimately utilize all of the space, it also avoids additional square footage being injected into the already competitive downtown submarket. The other notable downtown transaction was the sale of BOK Plaza. This 234,000 square foot project was already well leased; however, the seller, a Philadelphia based REIT, took a $4 million loss on the sale to a group of local investors from when it bought the property in 2005. As in years past, the suburban market saw the bulk of the sales activity. With occupancies and rental rates at historical highs, most investors perceive a more comfortable risk/reward environment It is anticipated 2008 will see more diligence by both lenders and investors in order to consummate transactions. The confluence of a weakening economy, a nervous lending community, and a presidential election, should combine to drive everyone back towards more conservative views of the future. As such, there should be a recognition and re-pricing of the risk associated with real estate ownership, something which has been in relatively short supply the last several years. Lenders are already widening loan spreads and decreasing loan-to-value ratios which will have a direct effect on leveraged yields, overall equity requirements, and ultimately, asset value. The result is likely to be disappointed sellers who missed their window of opportunity to sell for historically low capitalization rates, and what may turn out to be, depending on how the presidential election plays out, historically low capital gains tax rates. Nevertheless, compared to many other markets across the United States, Oklahoma City represents a solid economic environment for those looking to take advantage of investment opportunities at pricing well below replacement cost, and with reasonable upside potential. Price Edwards & Company 210 Park Avenue, Suite 1000, Oklahoma City, OK 73102 P (405) 843-7474 F (405) 236-1849 www.priceedwards.com