Office Market Continues to Improve

Research & Forecast Report LAS VEGAS OFFICE Q3 2016 Office Market Continues to Improve > > Southern Nevada s office market is improving at a steady rate > > Net absorption has been positive in twelve of the last thirteen quarters, and has totaled almost 2 million square feet in the past three years > > Steady improvements in demand and a lack of new supply have contributed to year-over-year rent growth Economic Indicators Office Employment Office SF/Job -5.4% Sublease Vacancy -17.7 Southern Nevada s office market continues to emulate the local desert tortoise, with slow and steady improvement that actually picked up steam in the third quarter of 2016. Vacancy continued its three quarter downward trend, hitting 17.1 percent in the third quarter, 1.1 points lower than one year ago. This was on 210,859 square feet of net absorption and no new completions. Continued improvements in demand have driven asking rates steadily upward as well, hitting $2.01 per square foot (psf) on a Full Service Gross (FSG) basis this quarter. Southern Nevada s office job market improved in (the latest month of data available) compared with July 2015, but at a slower pace than in recent months. The office job market added approximately 5,600 jobs in the past twelve months, with the largest Historical Vacancy Rates and Asking Lease Rates +7.9% Market Indicators Q2 2016 Relative to prior period Q3 2016 Q4 2016* VACANCY NET ABSORPTION COMPLETIONS RENTAL RATE *Projected Summary Statistics Q3 2016 Las Vegas Market Q3-2015 Q2-2016 Q3-2016 21.0% $2.05 Vacancy Rate 18.2% 17.6% 17.1% 20.0% $2.00 Asking Rent (PSF, NNN) $1.94 $1.99 $2.01 19.0% $1.95 18.0% $1.90 Net Absorption (SF) 212,326 156,809 210,859 17.0% $1.85 New Completions (SF) 46,650 164,663 0 16.0% 15.0% 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016 2 Q 2016 3 Q 2016 $1.80 $1.75 Overall Asking Rents Per Square Foot Vacancy Asking Rental Rate Class A $2.63 $2.68 $2.67 All signs point to continued steady improvement in the office market through 2017. Class B $1.95 $2.00 $2.04 $1.63 $1.68 $1.68

contribution coming from the health care sector (+4,500 jobs), and with the information sector losing 300 jobs. The professional and business services sector, which had shown very strong growth over the past year, added only 900 new jobs year-over-year, and the financial services sector added 500 jobs. Unemployment in the Las Vegas- Paradise MSA stood at 6.7 percent as of, down from 7.1 percent in July 2015. From July 2015 to, total employment in Southern Nevada has increased by 27,000 jobs. Historical Net Absorption vs. Completions 700,000 600,000 500,000 400,000 300,000 There was no new office inventory completed in the third quarter of 2016. The market had 203,000 square feet of office space under construction, almost 90 percent of it speculative. The pace of construction has been slower than expected due to high land and construction costs, as well as continued overall high vacancy rates. We think 134,000 square feet of office space will be completed in the fourth quarter of 2016, with another 69,000 square feet completed in early 2017. 200,000 100,000 0-100,000-200,000 3 Q 2014 4 Q 2014 1 Q 2015 Net Absorption 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016 Completions 2 Q 2016 3 Q 2016 Southern Nevada s office market had 210,859 square feet of net absorption in the third quarter of 2016, bringing net absorption yearto-date to 640,796 square feet. This was the seventh straight quarter of positive net absorption for the office market, and the market has had positive net absorption in twelve of the last thirteen quarters. In the third quarter of 2016, net absorption was highest in the Southwest submarket (111,862 square feet), followed by North Las Vegas (61,303 square feet) and Henderson (51,885 square feet). Negative net absorption was experienced in the Airport (negative 90,906 square feet) and Downtown (negative 35,184 square feet). Occupancy vs. Office Employment 130,000 125,000 120,000 115,000 110,000 84.0% 83.0% 82.0% 81.0% 80.0% Demand for office space over the past twelve months came primarily from manufacturing, professional and business services, and financial activities, especially mortgage and title companies. Mortgage and title companies have been stimulated by the recent expansion of the Valley s construction industry. Manufacturing includes printing and publishing, which includes digital media like websites, hence the strong office demand of manufacturing. The trend of taking less space per office employee remains a headwind to office market growth, but Southern Nevada s office users appear to be in expansion mode, offsetting that trend somewhat. Positive net absorption drove the office vacancy rate down this quarter to 17.1 percent due to positive net absorption and a lack of new supply. Current vacancy is 1.1 percentage points lower than one year ago. At recent rates of net absorption, the office market will stabilize at 9.0 percent vacancy (the pre-recession average) in approximately 4.7 years. 105,000 100,000 3 Q 2014 4 Q 2014 1 Q 2015 Office Jobs 2 Q 2015 JUL 2015 JUL 2016 CHANGE Information 10,200 9,900-300 Financial Activities 45,600 46,100 + 500 Professional & Business Services 123,500 124,400 + 900 Health Care 59,000 63,500 + 4,500 79.0% 78.0% Source: Nevada Department of Employment, Training and Rehabilitation 3 Q 2015 4 Q 2015 1 Q 2016 2 Q 2016 Occupancy Rate 3 Q 2016 Investment Sales Activity 2012 2013 2014 2015 2016 YTD* No. Sales 87 90 71 68 36 Square Footage 3,929,000 3,512,000 2,505,000 2,044,000 1,009,000 Sales Volume $261.0 MM $571.9 MM $296.4 MM $384.1 MM $129.1 MM Average Price/SF $89.11 $162.83 $118.32 $187.88 $127.96 Average Cap Rate* 8.2% 7.6% 7.7% 7.5% 7.8% Average Sale Size (SF) 34,000 39,000 35,000 30,000 28,000 2 Las Vegas Research & Forecast Report Q3 2016 Office Colliers International

Office vacancy decreased in six of the Valley s eight submarkets in the third quarter of 2016, with the relatively small North Las Vegas submarket experiencing the largest decrease (7.8 percentage points), followed by Southwest (1.6 points) and Henderson (1.0 points). Vacancy increased in the Airport (1.4 points) and Downtown (0.7 points) submarkets. The Valley s lowest vacancy rate was still in Downtown, at 12.8 percent, while West Central had the Valley s highest vacancy rate at 20.4 percent. Over the next few years, the East Las Vegas submarket should see the completion of a major expansion and renewal of the Las Vegas Convention Center, the completion of the nearby World Resorts property on the Strip and the potential construction of a new stadium near McCarran International Airport. This activity in Midtown Las Vegas could stimulate demand for office space in the Airport and East Las Vegas submarkets. Vacancy in Class A office stood at 21.4 percent in the third quarter of 2016 after especially anemic net absorption of 3,685 square feet. Yearover-year, Class B product saw vacancy decrease by 1.1 percentage points to 17.5 percent, while vacancy in office vacancy decreased by 1.0 percentage point to 15.4 percent. The weighted average asking rental rate for office space in Southern Nevada decreased to $2.01 per square foot (psf) on a full service gross (FSG) basis in the third quarter of 2016, a $0.05 psf increase from one year ago and a $0.02 increase from one quarter ago. Downtown wrested the title of most expensive submarket this quarter from the Southwest, with Downtown s asking rental rate hitting $2.25 psf FSG compared to the Southwest s $2.24 psf FSG. The Valley s lowest average asking rate is in the West Central submarket, at $1.71 psf FSG. Office space available for sublease increased this quarter to 396,736 square feet, but was still 17.7 percent lower than it was one year ago. Sublease availability increased significantly in the first quarter of 2014 when Citibank s call center operations center in the Northwest was put on the market. It then decreased significantly earlier this year with the sublease of 138,000 square feet at 8725 W Sahara Avenue to Sutherland Global Services. Office investment sales remained subdued in the third quarter of 2016. So far in 2016, sales volume totaled $129.1 million in 36 sales totaling 1,009,000 square feet with an average price per square foot of $127.96 and an average cap rate of 7.8 percent. The significant decrease in average price is due to the sale of a large building in the Downtown submarket at a low price per square foot earlier this year. In general, investment sales in Southern Nevada are shifting to smaller buildings. In the third quarter of 2016, there was almost 2 million square feet of office space available for sale with an average asking price of $174.73 psf and an average cap rate of 6.9 percent. The only problem with Southern Nevada s office market at the moment is that its improvement is slow. With the industrial market on fire, it is easy to forget just how much improvement has occurred in the office market over the past three years, to the tune of almost 2 million square feet of net absorption, a more than 3 point drop in vacancy and a 7.5 percent increase in asking rates. All signs point to continued steady improvement in the office market through 2017. All signs point to continued steady improvement in the office market through 2017. - John Stater, Research & GIS Manager Office Development Pipeline Project Type Submarket Size (SF) Status Completion Supreme Court Building Class B Downtown 27,000 Under Construction Q1-2017 Build-To-Suit Total 27,000 Tivoli Village Class A Northwest 134,000 Under Construction Q4-2016 Centennial Hills Center Class B Northwest 124,000 Planned 2017 The Square Southwest 80,000 Planned 2017 Pace Plaza Class B Southwest 42,000 Under Construction Q1-2017 Seven Hills Plaza D Class B Henderson 42,000 Planned 2017 Cadence Henderson 30,000 Planned 2017 Speculative Total 452,000 Office Total 479,000 3 Las Vegas Research & Forecast Report Q3 2016 Office Colliers International

215 NORTH LAS VEGAS Significant Office Sale Activity Pointe North 95 27,000 SF - $3,300,000 $124.00/SF NORTHWEST 15 10501 W. Gowan Road SUMMERLIN WEST CENTRAL DOWN TOWN 95 EAST LAS VEGAS 31,000 SF - $4,700,000 $151.00/SF Class B JBA Office Plaza 28,000 SF - $6,100,000 $222.00/SF 215 AIRPORT 4801 Sandhill Road 13,000 SF - $1,300,000 $104.00/SF SOUTHWEST HENDERSON August 2016 Horizon Ridge Prof. Park 8,000 SF - $2,300,000 $265.00/SF Lease Activity Property Name Lease Date Lease Term Size Lease Rate Type Green Valley Civic Center Jul 2016 60 months 31,000 SF $0.75 NNN Class B Pointe Flamingo Jul 2016 15 months 11,000 SF $0.75 NNN Class B Sienna Gardens Jul 2016 84 months 7,000 SF $2.01 NNN Class B The Courtyards on Eastern Aug 2016 126 months 7,000 SF $1.34 FSG Jones Post Office Complex Jul 2016 72 months 6,000 SF $1.01 NNN 4 Las Vegas Research & Forecast Report Q3 2016 Office Colliers International

Market Comparisons - Las Vegas Office Market CLASS TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANT SF VACANCY RATE TOTAL VACANT CURRENT SF QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETIONS CURRENT QTR SF COMPLETIONS YTD SF UNDER CONSTRUCTION SF PLANNED CONSTRUCTION SF WEIGHTED AVG ASKING RENTAL RATE AIRPORT SUBMARKET A 729,174 240,489 33.0% - 240,489 33.0% 32.0% (9,248) (3,367) - - - - $2.81 B 2,407,975 281,414 11.7% 17,662 299,076 12.4% 8.9% (91,581) 2,205 - - - - $2.02 C 3,184,613 512,081 16.1% 19,155 531,236 16.7% 17.0% 9,923 29,774 - - - - $1.71 Total 6,321,762 1,033,984 16.4% 36,817 1,070,801 16.9% 15.6% (90,906) 28,612 - - - - $2.05 DOWNTOWN SUBMARKET A 1,232,341 240,596 19.5% - 240,596 19.5% 15.9% (44,176) 104,236-129,000 - - $2.80 B 2,329,107 240,152 10.3% - 240,152 10.3% 11.2% 20,674 3,903 - - 26,600 - $2.11 C 1,432,337 156,878 11.0% 3,400 160,278 11.2% 10.4% (11,682) 12,208 - - - - $1.61 Total 4,993,785 637,626 12.8% 3,400 641,026 12.8% 12.1% (35,184) 120,347-129,000 26,600 - $2.25 EAST LAS VEGAS SUBMARKET A 1,353,083 270,319 20.0% 37,267 307,586 22.7% 20.7% 6,005 58,020 - - - - $2.91 B 1,542,404 437,295 28.4% - 437,295 28.4% 28.9% 4,696 42,773 - - - - $1.39 C 2,629,026 454,824 17.3% 3,563 458,387 17.4% 18.1% 20,312 40,858 - - - - $1.44 Total 5,524,513 1,162,438 21.0% 40,830 1,203,268 21.8% 21.7% 31,013 141,651 - - - - $1.76 HENDERSON SUBMARKET A 583,905 179,175 30.7% 2,431 181,606 31.1% 29.9% -4,330 (13,294) - - - - $2.65 B 2,566,015 394,493 15.4% 5,000 399,493 15.6% 17.9% 60,173 52,380 - - - 42,000 $2.16 C 2,227,680 386,890 17.4% 3,876 390,766 17.5% 17.3% -3,958 (4,922) - - - 30,000 $1.70 Total 5,377,600 960,558 17.9% 11,307 971,865 18.1% 19.0% 51,885 34,164 - - - 72,000 $2.07 NORTH LAS VEGAS SUBMARKET A - - n/a - - n/a n/a - - - - - - $- B 245,696 33,150 13.5% - 33,150 13.5% 37.8% 59,621 64,500 - - - - $1.97 C 543,389 97,906 18.0% - 97,906 18.0% 18.3% 1,682 (30,283) - - - - $1.56 Total 789,085 131,056 16.6% - 131,056 16.6% 24.4% 61,303 34,217 - - - - $1.66 NORTHWEST SUBMARKET A 1,825,415 412,192 22.6% 52,919 465,111 25.5% 23.0% 6,436 49,529 - - 134,003 - $2.36 B 3,537,640 579,119 16.4% 1,200 580,319 16.4% 17.9% 23,145 (54,675) - - - 87,000 $2.17 C 3,352,556 421,523 12.6% 8,917 430,440 12.8% 12.9% 6,047 33,045-10,700-37,100 $1.76 Total 8,715,611 1,412,834 16.2% 63,036 1,475,870 16.9% 17.0% 35,628 27,899-10,700 134,003 124,100 $2.10 SOUTHWEST SUBMARKET A 597,112 25,163 4.2% 10,098 35,261 5.9% 14.1% 48,998 65,580 - - - - $2.74 B 2,997,298 644,160 21.5% 17,644 661,804 22.1% 22.3% (4,122) (8,216) - 35,663 42,000 - $2.40 C 3,513,211 480,130 13.7% 19,318 499,448 14.2% 16.0% 66,986 81,114 - - - 85,202 $2.00 Total 7,107,621 1,149,453 16.2% 47,060 1,196,513 16.8% 18.5% 111,862 138,478-35,663 42,000 85,202 $2.24 WEST CENTRAL SUBMARKET A 157,624 18,803 11.9% - 18,803 11.9% 11.9% - 6,358 - - - - $2.46 B 1,922,915 463,897 24.1% - 463,897 24.1% 26.4% 43,703 144,088 - - - - $1.87 C 3,007,707 554,599 18.4% 2,420 557,019 18.5% 18.6% 1,555 (35,018) - - - - $1.56 Total 5,088,246 1,037,299 20.4% 2,420 1,039,719 20.4% 21.4% 45,258 115,428 - - - - $1.71 MARKET TOTAL A 6,478,654 1,386,737 21.4% 102,715 1,489,452 23.0% 21.7% 3,685 267,062-129,000 134,003 - $2.67 B 17,549,050 3,073,680 17.5% 41,506 3,115,186 17.8% 18.7% 116,309 246,958-35,663 68,600 129,000 $2.04 C 19,890,519 3,064,831 15.4% 60,649 3,125,480 15.7% 16.1% 90,865 126,776-10,700-152,302 $1.68 Total 43,918,223 7,525,248 17.1% 204,870 7,730,118 17.6% 18.0% 210,859 640,796-175,363 202,603 281,302 $2.01 QUARTERLY COMPARISON AND TOTALS Q3-16 43,918,223 7,525,248 17.1% 204,870 7,730,118 17.6% 18.0% 210,859 640,796-175,363 202,603 281,302 $2.01 Q2-16 43,918,223 7,736,107 17.6% 157,956 7,894,063 18.0% 18.1% 156,809 429,937 164,663 175,363 202,603 421,140 $1.99 Q1-16 43,753,560 7,728,253 17.7% 192,126 7,920,379 18.1% 18.7% 273,128 273,128 10,700 10,700 325,266 463,140 $2.00 Q4-15 43,742,860 7,990,681 18.3% 197,676 8,188,357 18.7% 18.6% 82,364 993,554 123,617 369,607 197,000 485,140 $1.96 Q3-15 43,619,243 7,949,428 18.2% 150,546 8,099,974 18.6% 19.0% 212,326 911,190 46,650 245,990 242,000 435,140 $1.94 Q2-15 43,572,593 8,115,104 18.6% 182,799 8,297,903 19.0% 19.2% 82,173 698,864 (13,548) 199,340 300,444 435,140 $1.91 Q1-15 43,586,141 8,210,825 18.8% 172,615 8,383,440 19.2% 20.2% 616,691 616,691 212,888 212,888 300,444 310,140 $1.89 5 Las Vegas Research & Forecast Report Q3 2016 Office Colliers International

502 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 $2.5 billion in annual revenue* COLLIERS INTERNATIONAL LAS VEGAS 3960 Howard Hughes Parkway Suite 150 Las Vegas, Nevada 89169 USA +1 702 735 5700 www.colliers.com/lasvegas MARKET CONTACT: Mike Mixer Executive Managing Director Las Vegas +1 702 735 5700 mike.mixer@colliers.com John Stater Research & GIS Manager Las Vegas +1 702 836 3781 john.stater@colliers.com 2.0 billion square feet under management 16,000 professionals and staff *All statistics are for 2015 and include affiliates. About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 11 consecutive years, more than any other real estate services firm. For the latest news from Colliers, visit Colliers.com or follow us on Twitter (@Colliers) and LinkedIn. Copyright 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.