Oklahoma City 2014 Year-End 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 4-7 North Submarket 8-10 Medical Office Submarket 10 Midtown Submarket 11 West Submarket 12 13 Suburban Submarket 13 Office Building Sales Summary Back Cover Submarket Map 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 The calendar year was certainly an eventful period with abnormally high activity, including large moves, even larger announcements. However, what began as a very upbeat market ends the year with much trepidation as energy prices have slumped to 5-year lows. Overall, the market had an outstanding year in as citywide vacancy shrunk from 17.5% to 15.2% and average rental rates rose from $16.74 to $17.46 per square foot. The Central Business District continued to improve as the overall vacancy dropped from 21.7% to 20.7% and rental rates climbed from $16.63 to $18.15 per square foot. The Class A buildings were particularly strong as vacancy fell from 9.3% to 0.7% and rental rates climbed from $19.62 to $21.75 per square foot. There is virtually no Class A vacancy in the downtown area and rental rates reflect the imbalance that existed in between supply and demand. As a by-product of a strong Class A downtown market, the average rental rate in the CBD eclipsed that of the suburbs for the first time in over 20 years. It should also be noted that 84% of the vacant downtown space exists in buildings that were constructed in the 1920 s and 1930 s and nearly two-thirds of all the vacant space in the CBD exists in one building the First National Center. That building s dated systems and troubled ownership has virtually taken this building off the market for the past couple of years and any hope for new ownership and a revitalization of the project through a pending sale is now clouded by monetary claims from a partner in a previous ownership group. The point is, most of the available space downtown is vacant for a good reason and good space is nearly impossible to find in the CBD. A similar situation exists in the North submarket where rental rates held fairly steady at $17.50 per square foot and vacancy rates dropped from 16.5% to 14.6%. More than half of this submarket s vacancy can be found in the Lincoln Plaza, which took a huge hit to its occupancy in due to massive roof leaks and ultimately fell into receivership. The Northwest submarket, which is the city s largest, experienced reduced vacancy form 8.9 to 8.5% and saw rates climb from $17.20 to $17.95 per square foot. Class A space in this submarket is tight as well; currently standing at just 3.1%, down from 4.1% at the beginning of. 2015 will be a critical year for this submarket as it contains and inordinate amount of space leased to large energy companies, who may reign in staff and space needs in the coming year. Many new projects were announced in, with at least two set to dramatically impact the downtown skyline. Hines announced in December that it will move forward with the construction of a 690,000 SF, 27-story tower at 499 West Sheridan and OG&E announced earlier in the year that it had chosen Chicago-based Clayco to construct its 25-story, approximately 500,000 SF tower. Devon Energy will anchor the multi-tenant Hines project with approximately one-half of the building available for other users. Approximately 100,000 to 150,000 SF of the OG&E building will be available for lease to others. As we have said in previous reports, these new Class A projects will test local tenants willingness to pay significantly more than current market rates for higher quality space. That challenge was already a significant hurdle for developers when the price of oil was $107 a barrel. It becomes a far greater challenge now that oil is less than half that price. Oklahoma City has continued to diversify over the years, but the fact remains the local economy and especially the local office market, is still largely dependent upon energy prices and the strength and growth of local energy companies. A recent report indicated that one-quarter of all jobs in Oklahoma are tied to the energy industry and that impact is certainly felt in the Oklahoma City office market. As we look ahead to 2015, it is impossible to know when energy prices will rebound, but if it extends beyond just a few months, it will begin to have an impact on the office market. One impact that is already being felt is market activity as we are seeing tenants hold off on decisions regarding new space until they feel more certain about the economic impact of falling energy prices. We are forecasting that 2015 vacancy rates will hold steady and rental rates will plateau after several years of steady growth. If there is a silver lining to the abrupt drop in energy pricing it is that several buildings that were on the drawing boards, particularly in the suburban markets, never broke ground and likely will be shelved for some period of time. Otherwise, we could have been facing a major glut in inventory. The market was just beginning to get frothy and fortunately hadn t yet become overheated, but at this point we can t be sure if the market is just tapping the brakes or coming to a screeching halt. That question should be answered in the coming year. (millions of square feet) 3 25% 2 15% 1 5% 20 15 10 5 0 $20.00 $15.00 $10.00 300000 250000 200000 150000 100000 50000 0-50000 -100000-150000 '05 '05 OKC Total Office Market Vacancy Market Vacancy '06 '06 '07 '07 '08 '08 CBD Vacancy '09 '09 '10 '10 '11 '11 Suburban Vacancy '12 '12 '13 OKC Total Office Market Inventory Occupied SF CBD Midtown Northwest Suburban Vacant SF OKC OFFICE MARKET RENTAL RATES '13 North West OKC TOTAL OFFICE MARKET ABSORPTION '14 '14 Year-End OKC Office Market Totals RSF 15,174,523 Vacant SF 2,311,591 Vacant % 15.2% Rate $17.46 1

Year-End Oklahoma City Office Market Summary CENTRAL BUSINESS DISTRICT SUBMARKET 25% 2 HISTORICAL CBD VACANCY MID-YEAR CENTRAL BUSINESS DISTRICT REVIEW Aggregate vacancy rates decreased from 21.7% to 20.7% 15% Class A vacancy decreased from 9.3% to 0.7% 1 5% Class B vacancy decreased from 21.6% to 17.3%% vacancy decreased 62.7% to 55.5% Aggregate rental rates increased from $16.63 per SF to $18.15 per SF $21.00 HISTORICAL CBD RENTAL RATES BY CLASS Class A Class B Class A rates increased from $19.62 per SF to $21.75 per SF $19.00 Class B rates increased from $16.40 per SF to $18.07 per SF $17.00 $15.00 rates remained at $13.19 per SF $13.00 $11.00 The CBD experienced positive absorption of 53,000 SF during largely due to gains in Class A occupancy. CENTRAL BUSINESS DISTRICT 10 8 6 4 2 CBD OCCUPANCY BY CLASS Class A Class B 2015 CENTRAL BUSINESS DISTRICT FORECAST Vacancy rates will remain near current levels until new buildings hit the market. Rental rates will only increase slightly as low energy prices weigh on the market. HISTORICAL CBD ABSORPTION 150000 100000 50000 0-50000 -100000-150000 -200000 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 Ave Building 1923/64 12 99,752 21,329 21% $14.50 12% 100 Park Ave 101 Park Avenue Building 1936 14 197,042 68,987 35% $14.50 16.3% 101 Park Ave. 20 N. Broadway 1981 19 307,388 0 $20.00 2 20 N Broadway Bank of Oklahoma Plaza 1972 16 212,816 5,298 2% $17.00 2 201 Robert S. Kerr Braniff Building 10 90,000 0 $21.00 2 324 N. Robinson Chase Tower 1971 36 514,317 139,147 27% $18.00 15% 100 N. Broadway City Place 1931/85 33 251,449 50,929 2 $18.00 14% 204 N. Robinson Corporate Tower 1980 14 277,849 6,982 2% $20.00 17.5% 101 N. Robinson Court Plaza 1923/79 10 78,381 18,757 23% $12.00 14% 228 Robert S. Kerr First National Center 1931 32 980,941 660,079 67% $13.00 19% 120 N. Robinson Hightower Building 1929 10 107,152 9,038 8% $15.00 15% 105 N. Hudson Leadership Square 1984 21 735,514 7,431 1% $22.00 2 211 N. Robinson Oklahoma Tower 1982 31 568,960 4,924 $22.00 2 210 Park Ave. One North Hudson 1927 11 73,000 0 $12.00 12% 401 W. Sheridan Robinson Plaza 1992 10 195,702 0 $23.00 17.8% 55 N. Robinson Robinson Renaissance 1927/88 12 174,840 51,741 29% $18.00 25% 119 N. Robinson Sonic Building 2003 4 100,654 0 $24.50 8% 300 Johnny Bench Drive The Reserve 1922/97 4 71,616 0 $16.00 2 226 Dean A. McGee Avenue Totals 5,037,373 1,044,642 20.7% $18.15 CENTRAL BUSINESS DISTRICT CBD Construction Year Built Floors RSF Vacant SF Vacant % Rate CAF Century Center Building 2 98,000 10,992 11% $20.00 2 100 W Main Journal Record Building 1923/ 6 100,000 73,267 73% $25.00 1 621 N. Robinson Totals 198,000 84,259 42.6% $22.53 3

Year-End Oklahoma City Office Market Summary NORTHWEST SUBMARKET 12% 1 HISTORICAL NORTHWEST VACANCY YEAR-END NORTHWEST SUBMARKET REVIEW Aggregate vacancy rates decreased from 8.9% to 8.5% 8% 6% 4% Class A vacancy decreased from 4.1% to 3.1% Class B vacancy increased from 9. to 9.2% 2% vacancy decreased from 16.5% to 14.7% Aggregate rental rates increased from $17.20 per SF to $17.95 per SF HISTORICAL NORTHWEST RENTAL RATES BY CLASS $25.00 Class A Class B Class A rental rates increased from $21.89 per SF to $22.37 per SF $20.00 Class B rental rates increased from $16.54 per SF to $17.15 per SF rental rates increased from $13.48 per SF to $13.65 per SF $15.00 $10.00 The Northwest Oklahoma City submarket experienced absorption of 102,000 SF during. 2015 NORTHWEST SUBMARKET FORECAST NORTHWEST OCCUPANCY BY CLASS NORTHWEST 10 8 6 4 Vacancy rates will increase slightly amid lower oil and gas prices Quoted rates will hold steady as landlords brace for potential cutbacks in the energy industry, which is heavily weighted toward this submarket. 2 Class A Class B HISTORICAL NORTHWEST ABSORPTION 120000 100000 80000 60000 40000 20000 0-20000 -40000-60000 -80000 4 IBC Center

Year-End Oklahoma City Office Market Summary NORTHWEST SUBMARKET NORTHWEST Quail Springs Parkway Plaza Northwest Year Built Floors RSF Vacant SF Vacant % Rate CAF 14101-14201 Wireless Way 2001 3 147,852 0 $22.50 16% 14101-14201 Wireless Way 2525 Expressway 1974 6 62,410 20,924 33% $13.50 15% 2525 Northwest Expressway 4100 Perimeter Center 1982 3 47,317 3,825 8% $13.00 15% 4100 Perimeter Center Dr. 4101 Perimeter Center 1982 3 47,317 1,256 3% $13.00 15% 4101 Perimeter Center Dr. 4141 Northwest Expressway 1982 3 46,464 0 $16.00 16% 4141 Northwest Expressway 4200 Perimeter Center 1982 2 61,327 3,561 6% $13.00 15% 4200 Perimeter Center Dr. 4700 Gaillardia 2007 2 42,970 0 $25.00 15% 4700 Gaillardia Parkway 4727 Gaillardia 2009 2 37,624 0 $25.00 18% 4727 Gaillardia Parkway 4747 Gaillardia 2009 2 26,016 0 $25.00 18% 4747 Gaillardia Parkway 4801 Gaillardia 2000 3 74,432 0 $25.00 18.4% 4801 Gaillardia Parkway 4811 Gaillardia 2008 3 41,450 0 $24.00 15% 4811 Gaillardia Parkway 5100 Brookline 1974 10 107,496 2,205 2% $17.00 15% 5100 Brookline 5909 NW 1982 7 101,146 19,730 19% $15.00 15% 5909 Northwest Expressway 5

Year-End Oklahoma City Office Market Summary NORTHWEST SUBMARKET NORTHWEST Northwest Year Built Floors RSF Vacant SF Vacant % Rate CAF AAA Operations Center 2009 3 145,635 0 $20.00 3100 Quail Springs Parkway American Cancer Society 2001 1 45,000 0 $17.50 8400 Silver Crossing Atrium Towers 1980 6 156,106 0 $19.50 15% 3501-3503 N.W. 63rd Avaya Building 1998 1 57,000 0 $20.00 14400 Hertz Quail Springs Parkway Bradley Square 1984 1 30,000 1,800 6% $16.50 2932 N.W. 122nd Brookline Offices 1972 1 40,009 4,190 1 $12.00 6051 N. Brookline Caliber Park One & Two 2007 6 83,208 0 $22.00 17.2% 14201-14301 Caliber Drive Center 3000 1972 2 115,800 30,928 26% $13.00 12% 3000 United Founders Blvd. Chase Bank Building 1976 4 54,793 10,066 18% $17.50 15% 6303 N Portland Ave Chase Park 1981 2 30,281 4,972 16% $13.50 16.5% 4323 NW 63rd St Commerce Center South 1982 3 65,857 0 $14.00 11% 9520 N. May Coppertree Centre 1982 3 26,928 0 $13.00 1 3727 N.W. 63rd Cross Rock Place 1992 2 60,049 0 $22.00 12% 3595 W Memorial Rd Cross Rock Plaza I 1984 3 61,289 0 $22.00 15% 13801 Wireless Way Enterprise Plaza 1981 3 92,180 3,875 4% $17.00 15% 5600 N. May FBI Building 1999 1 110,000 0 $24.00 3301 W. Memorial Fifty-Six Expressway Place 1982 3 58,340 14,009 24% $12.50 5601 N.W. 72nd Five Corporate Plaza 1980 3 49,486 0 $16.00 15% 3625 N.W. 56th Grand Centre 1979 5 101,217 5,484 5% $18.00 15% 5400 N.W. Grand Blvd. Hartford Insurance 1999 1 100,000 0 $18.00 7800 N.W. 85th Terrace HealthSmart Building 1999 2 40,000 3,147 7% $18.00 12% 3121 Quail Springs Parkway IBC Center 1983 10 278,843 11,991 4% $22.00 15% 3817 Northwest Expressway Jamestown Office Park 1972/79 2 74,000 7,580 1 $13.00 1 3037 N.W 63rd Lake Park Tower 1983 6 105,036 34,472 32% $16.00 15% 6525 N. Meridian Lakepointe Towers 1981 6 183,600 33,663 18% $17.00 15% 4005-4013 Northwest Expressway Lakepointe West 1982 6 85,246 12,200 14% $15.00 15% 4045 N.W. 64th Lakeshore Tower 1982 3 33,900 4,380 13% $13.00 15% 4301 N.W. 63rd Landmark Towers 1969/72 10 306,960 44,000 14% $15.00 12% 3535-3545-3555 NW 58th Mercury Insurance Building 1986 2 100,103 14,514 14% $15.00 12.5% 7301 Northwest Expressway North Shore Office Plaza 2001 5 56,418 0 $23.00 16% 10900 Hefner Drive Northwest Office Center 1973 2 85,833 3,295 3% $14.00 15% 4334 Northwest Expressway Oil Center 1973/1994 12 249,657 72,823 29% $17.00 13% 2601 Northwest Expressway One Corporate Plaza 1979 1 63,011 2,845 4% $16.00 15% 3525 NW. 56th 6

Year-End Oklahoma City Office Market Summary NORTHWEST SUBMARKET Northwest Year Built Floors RSF Vacant SF Vacant % Rate CAF Parkway Commons 2003 2 40,729 0 $20.00 15% 13900 N. Portland Portland Plaza 1969 3 35,425 1,383 3% $13.00 14% 5700 N. Portland Quail Commerce Center 1998 1 128,500 0 $18.50 3201 Quail Springs Parkway Quail Creek North 1973 2 36,124 777 2% $12.50 15% 11032 Quail Creek Rd. Quail Ridge Tower 1975 4 49,600 12,448 25% $12.50 16.5% 11212 N. May Quail Springs Parkway Plaza I & II 1986 6 298,610 3,450 1% $22.00 14% 14000 Quail Springs Parkway Rees Plaza at East Wharf 2002 3 40,998 0 $28.00 16.8% 9211 Lake Hefner Parkway Sprint PCS Building 1999 1 89,132 0 $15.00 8525 Silver Crossing St. Martins Building 1990 2 59,712 2,671 4% $16.50 13% 9020 N. May The Parkway Building 1977 6 71,619 26,572 37% $18.50 15% 3401 NW 63rd Street The Summit Building 1975 5 50,000 0 $12.00 13% 5929 N. May Three Corporate Plaza 1980 3 49,920 6,287 12% $17.50 15% 3613 NW. 56th Two Corporate Plaza 1982 3 85,551 0 $15.00 14% 5555 NW. Grand Blvd. Union Plaza 1982 18 248,802 26,511 1 $20.00 14% 3030 Northwest Expressway Williams Sonoma 1998 1 35,862 0 $17.50 7720 NW 84th St Totals 5,310,190 451,834 8.5% $17.95 NORTHWEST Northwest Construction Year Built Floors RSF Vacant SF Vacant % Rate CAF 3250 Parkway Center 2015 2 40,000 30,000 75% $24.00 15% 3250 Quail Springs Parkway Totals 40,000 20,000 5 $24.00 4801 Gaillardia 7

Year-End Oklahoma City Office Market Summary NORTH SUBMARKET HISTORICAL NORTH VACANCY YEAR-END NORTH SUBMARKET REVIEW 2 Aggregate vacancy rates decreased from 16.5% to 14.6% 15% Class A vacancy decreased from 9.3% to 7.5% 1 Class B vacancy decreased from 7.7% to 6.9% 5% : vacancy decreased from 62.6% to 61.3% Aggregate rental rates increased from $17.42 per SF to $17.50 per SF HISTORICAL NORTH RENTAL RATES BY CLASS $25.00 Class A Class B Class A rental rates remained $21.85 per SF Class B rental rates increased from $16.95 per SF to $17.14 per SF $20.00 rental rates held steady at $12.52 per SF $15.00 $10.00 The Oklahoma City North submarket experienced positive absorption of 265,000 SF in, largely due to the relocation of the Oklahoma Healthcare Authority from the Midtown submarket. NORTH OCCUPANCY BY CLASS 2015 NORTH SUBMARKET FORECAST NORTH 10 8 6 4 Vacancy rates should contine to trend downward Rental rates will remain near current levels. 2 Class A Class B HISTORICAL NORTH ABSORPTION 300000 250000 200000 150000 100000 50000 0-50000 -100000-150000 North Year Built Floors RSF Vacant SF Vacant % Rate CAF 1001 Wilshire 2003 4 43,316 0 $20.00 13% 1001 W Wilshire Ave 4345 N. Lincoln 3 160,000 0 $13.50 4335 N. Lincoln 8 The Waterford

Year-End Oklahoma City Office Market Summary NORTH SUBMARKET North Year Built Floors RSF Vacant SF Vacant % Rate CAF 50 Penn Place 1973 16 178,315 14,469 8% $17.50 12% 5100 N. Pennsylvania 5100 Circle Building 1981 6 74,799 0 $17.50 14% 5100 N. Classen Blvd. 5701 N. Shartel 1982 4 97,102 0 $18.00 13% 5701 N. Shartel 7 & 9 Broadway Executive Park 1979 1 30,505 0 $18.00 200 NW 66th Broadway North 1974 2 25,703 1,824 7% $16.00 13% 7301 N. Broadway Broadway Plaza 2003 3 50,726 0 $12.00 13% 16 NW 63rd Broadway Sixty-Eight 1979 3 40,000 0 $14.50 14% 6801 N. Broadway Central Park One 1982 6 113,134 0 $18.00 14% 525 Central Park Dr. Central Park Two 1984 6 124,463 0 $18.00 14% 515 Central Park Dr. Chase Bank Building 1981 4 34,701 14,500 41% $20.00 9% 1200 NW 63rd St Columbus Square 1982 3 36,559 2,078 6% $17.00 15% 1001 NW 63rd Five North Broadway 1972 3 44,805 0 $16.00 15% 6601 N. Broadway Harvey Parkway 1982 6 97,912 0 $17.00 17% 301 NW 63rd Lincoln Plaza Office Park 1968 2 243,423 226,093 92% $12.00 12% 4545 Lincoln Blvd. Market Center I 2008 2 46,368 0 $22.75 701 Market Dr Market Center II 2009 2 50,000 0 $22.75 12% 713 Market Dr Nichols Hills Executive Center 1979 2 52,426 1,806 3% $18.00 1000 W. Wilshire Nichols Hills Tower 1975 4 29,101 9,309 32% $15.00 11% 6410 Avondale Dr One Benham Place 1984 8 152,959 29,534 19% $18.50 15% 9400 N. Broadway One Broadway Center 1980 3 34,984 0 $14.00 9% 100 NW 63rd One Broadway Executive Park 1979 3 58,832 1,077 1% $17.00 12% 201 NW 63rd One Western Plaza 1989 2 50,948 14,546 28% $14.00 16.5% 5500 N. Western Paragon Building 1981 5 110,791 5,282 4% $18.00 15% 5801 N. Broadway Pavilion Building 1974 3 39,895 0 $12.50 12% 6701 N. Broadway Penn Park 1974 3 78,643 18,928 24% $13.50 13% 5001-5005-5009-5015 N. Penn Registry 1980 2 93,167 15,341 16% $14.00 15% 2200 NW 50th Richmond Square 1982 2 27,606 5,393 19% $15.00 12% 4900 Richmond Square Santa Fe North 1981 4 44,000 2,000 5% $17.00 14% 6 NE. 63rd The Commons on Broadway 2009 3 50,188 4,971 9% $23.00 18% 11600 Broadway Extension Three Broadway Executive Park 1977 3 45,256 16,868 37% $17.00 1 6501 N. Broadway Two Broadway Executive Park 1980 3 52,205 13,247 25% $17.00 11% 205 NW 63rd Valliance Tower 1983 22 299,137 22,982 7% $22.00 17.8% 1601 Northwest Expressway Waterford A 1983 4 150,048 2,794 21% $21.50 16% 6301 Waterford Blvd. Waterford B 1983 2 35,468 11,461 32% $21.50 16% 6303 Waterford Blvd. Waterford C 1983 4 81,575 4,777 5% $21.50 16% 6305 Waterford Blvd. Waterford D 1983 2 34,087 2,042 6% $21.50 16% 6307 Waterford Blvd. Totals 3,013,147 441,322 14.6% $17.50 NORTH 9

Mid-Year Oklahoma City Office Market Summary MEDICAL OFFICE SUBMARKET NORTH Medical Year Built Floors RSF Vacant SF Vacant % Rate CAF Deaconess Medical North 1996 3 55,209 4,159 7% $21.00 5701 N Portland Ave Deaconess Medical South 1991 6 119,726 34,396 28% $21.00 5401 N Portland Ave McAuley Physician Offices 1986 4 42,246 1,099 2% $17.00 4205 McAuley Blvd NeuroScience Institute 1998 3 54,558 1,272 2% $19.00 4120 W Memorial Rd Northwest Medical Center 1981 6 82,664 0 $17.00 13.4 3330 NW 56th St Parkway Commons Medical Center 2008 2 27,000 0 $20.00 15% 14100 Parkway Commons Dr Parkway Medical Center 1980 2 44,983 0 $19.00 1 3500 NW 56th St Pasteur Medical Building 1959 5 83,858 13,465 16% $16.50 15% 1111 N. Lee Ave. Physicians & Surgeons Bldg 1962 11 75,000 11,031 14% $15.00 1211 N Shartel Ave Physicians Bldg - A 1970 9 68,349 4,640 6% $16.00 14% 3435 NW 56th St Physicians Bldg - B 1986 9 128,030 6,136 4% $19.50 14% 3433 NW 56th St Physicians Bldg - C 1975 8 75,158 0 $16.00 14% 3400 NW Expressway Physicians Bldg - D 1994 8 120,813 2,167 1% $18.00 14% 3366 NW Expressway Plaza Physician Offices 1992 7 70,050 2,890 4% $18.00 4140 W Memorial Rd Presbyterian Professional Bldg 1995 4 91,122 0 $14.00 15% 711 Stanton L Young Quail Brook Medical 2008 3 34,222 8,425 24% $20.00 15% 13901 McAuley Blvd Saints Medical Plaza 2008 5 82,010 0 $24.36 16.9 NW 9th St & N Walker Ave SMC Medical Office Bldg 1967 3 29,054 1,598 5% $13.50 4200 S Douglas Ave SMC Medical Plaza 1994 5 58,648 688 1% $16.50 4221 S Western Ave St. Anthony ASC 1998 2 36,551 5,348 14% $17.50 14% 6205 N Santa Fe Ave St. Anthony Healthplex East 3 52,675 10,738 2 $26.00 12% 3400 S. Douglas Blvd. St. Anthony Healthplex North 2015 4 96,422 6,956 7% $26.00 13401 N. Western St. Anthony Healthplex South 3 52,675 11,286 21% $26.00 12% 13500 S. Tulsa Ave St. Anthony North POB 1990 2 28,281 11,286 39% $17.50 19.4 6201 N Santa Fe Ave St. Anthony Prof. Bldg 1987 6 83,898 11,718 13% $17.50 11% 608 NW 9th St Tower Physicians Offices 1986 11 93,639 6,845 7% $16.00 4200 W Memorial Rd Totals 1,786,841 156,143 8.7% $18.82 10 St. Anthony Healthplex

Year-End Oklahoma City Office Market Summary MIDTOWN SUBMARKET 2 15% 1 HISTORICAL MIDTOWN VACANCY YEAR-END MIDTOWN SUBMARKET REVIEW Aggregate vacancy rates increased from 6.9% to 16.4% Class B vacancy rates increased from 7. to 17.3% 5% vacancy rates increased from 6.9% to 7.2% Aggregate rental rates increased from $14.62 per SF to $14.69 per SF HISTORICAL MIDTOWN RENTAL RATES $15.00 Class B Class B rental rates increased from $14.90 per SF to $14.99 per SF rental rates decreased from $11.71 per SF to $11.57 per SF $12.00 The Midtown Submarket experienced negative absorption of 124,000 SF due to the Oklahoma Healcare Authority s relocation to its new building on Lincoln Boulevard. 2015 MIDTOWN SUBMARKET FORECAST $9.00 Vacancy rates will likely remain near current levels for the remainder of the year. MIDTOWN OCCUPANCY Rental rates will remain at or near current levels. 10 8 6 4 2 MIDTOWN Class B HISTORICAL MIDTOWN ABSORPTION 200000 150000 100000 50000 0-50000 -100000-150000 Year-End Oklahoma City Office Market Summary MIDTOWN SUBMARKET Midtown Year Built Floors RSF Vacant SF Vacant % Rate CAF 2000 Classen Center 1965 10 318,605 0 $17.50 13% 2000 N Classen Blvd 4801 Classen Building 1974 2 33,151 6,216 18% $10.50 4801 N Classen Blvd Cameron Building 1955/57 5 81,493 2,000 2% $12.00 1 2901 Classen Blvd Classen Park I 1980 2 52,800 3,700 7% $12.00 13% 3700 N Classen Blvd Classen Park II 1982 3 52,800 0 $12.00 13% 3800 N Classen Blvd Santa Fe Building 1954/82 4 55,203 2,000 3% $12.50 1 3814 N. Santa Fe Ave. Shepherd Mall Office Complex 1964/95 2 709,000 199,981 28% $14.50 2401 NW 23rd Street Totals 1,303,052 213,897 16.4% $14.69 The Cameron Building 11

Year-End Oklahoma City Office Market Summary WEST SUBMARKET 4 35% 3 25% 2 15% 1 HISTORICAL WEST VACANCY 2015 YEAR-END WEST SUBMARKET REVIEW Aggregate vacancy rates increased from 24.4% to 31.8% Class B vacancy totals increased from 13.5% to 30.3% vacancy totals decreased from 40.3% to 34.1% 5% Aggregate rental rates increased from $12.38 per SF to $12.45 per SF Class B rental rates remained flat at $12.63 per SF HISTORICAL WEST RENTAL RATES BY CLASS $15.00 Class B rental rates increased from $12.02 per SF to $12.18 per SF The West Oklahoma City Office Market experienced negative absorption of 37,000 SF during. $12.00 2015 WEST SUBMARKET FORECAST Vacancy rates should improve slightly $9.00 Rental rates in the submarket should remain flat WEST OCCUPANCY BY CLASS 8 7 WEST 6 5 4 3 2 1 Class B HISTORICAL WEST ABSORPTION 60000 40000 20000 0-20000 -40000-60000 -80000-100000 12 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 78,650 34,405 43% $12.00 11% 300 N Meridian Ave Bank 2 Tower 1975 7 65,520 12,451 19% $13.50 12% 909 S. Meridian Metro Office Park 1981 3 60,750 22,976 37% $11.00 4300 Highline Blvd. Sovereign Office Park 1983 1 42,260 35,500 84% $12.00 1220 Sovereign Row The Parkway 1982 6 96,960 54,564 56% $14.00 15% 1300 S. Meridian West Park Office Center 1986 1 58,786 0 $12.75 715 Metropolitan Will Rogers Office Park 1 1984 1 52,779 0 $11.50 16% 4400 Will Rogers Parkway Will Rogers Office Park 2 1985 1 46,748 0 $11.50 1 4350 Will Rogers Parkway Totals 502,453 159,896 31.8% $12.45 10 8 SUBURBAN OCCUPANCY BY CLASS Year-End Oklahoma City Office Market Summary SUBURBAN SUBMARKET 6 4 2 YEAR-END SUBURBAN SUBMARKET REVIEW Aggregate vacancy rates increased from 11.6% to 12.5% WEST Class A Class B Class A vacancy decreased from 5.8% to 4.5% HISTORICAL SUBURBAN RENTAL RATES BY CLASS $25.00 Class A Class B Class B vacancy increased from 8.5% to 11. vacancy decreased from 31. to 29. $20.00 Aggregate rental rates increased from $16.74 per SF to $17.46 per SF $15.00 Class A rental rates increased from $21.87 per SF to $22.20 per SF Class B rental rates increased from $16.15 per SF to $16.55 per SF $10.00 rental increased from $12.92 per SF to $13.04 per SF 250000 200000 HISTORICAL SUBURBAN ABSORPTION Suburban Oklahoma City experienced absorption of 206,000 SF during. 2015 SUBURBAN SUBMARKET FORECAST 150000 Suburban rental rates should hold steady at current levels 100000 50000 Suburban vacancy rates should increase slightly until oil prices stabilize and improve. 0 Suburban Submarket Totals 10,137,150 1,266,591 12.5 $17.12 13

Year-End Office Building Sales Summary Oklahoma City experienced one of the most active years on record for office building sales. For general office buildings containing a minimum of 25,000 square feet, 17 transactions closed in having an aggregate value of just over $100 million and involving roughly 1 million square feet. It is worth noting that not a single Class A asset traded hands in. As such, an average price of $100 per square foot for Class B and C assets is instructive. As predicted last year, Chesapeake Energy completed the sales of its larger non-campus office assets. Of the five Chesapeake sales, four were purchased by companies looking to ultimately use the space, not lease out to third-party tenants. This is also true of several of the other sales transactions, indicating a healthy expansion of Oklahoma City s business community and its ability to acquire office assets at well below replacement cost. One Grand Park As is typically the case, the suburbs are where most of the transactions occurred, accounting for 13 of the 17 transactions. MidFirst was able to acquire the One & Two Grand Park office buildings, as well as additional land, to ultimately house its corporate activities in one location. Seventy Seven Energy, a Chesapeake spin-off, also purchased two facilities for its use: Regency Center on NW 63rd as well as a building in south Oklahoma City. In the downtown and immediately surrounding areas of Bricktown and Film Row there were four sales. The largest was Robinson Renaissance in the core CBD which contains approximately 175,000 square feet and sold for just under $9 million. The unmistakable conclusion is that real estate asset values continued the upward climb we have been experiencing the last several years. A healthy economy, low interest rates, a volatile stock market, and the availability of both equity and debt capital have converged to create a near optimum environment for investment in the real estate sector. However, as the year ended, a drop in oil prices from over $100 per barrel to under $50 has not only caught most owners/investors very surprised but also very concerned about whether the pricing environment is a temporary 6 to 12 month phenomenon, or rather something much more structural in the long term supply and demand equation. While opinions vary widely, it does ring true that some exploration and development companies will not survive the new pricing environment due to excessive debt loads, and thus some industry consolidation is probable. On the other hand, to think this is a replay of the early 1980 s with record bank failures and personal bankruptcies is very unlikely. Looking into 2015, it will be interesting to see whether the sale of First National Center happens, and what the redevelopment plan for this historic asset entails. There are other potentially significant transactions in the works so, notwithstanding the current concerns relating to commodity pricing, activity at this point remains steady. Oklahoma City continues to be very fortunate. Unlike the early 1980 s where the city did not reinvest in itself when times were good, the exact opposite has occurred this time around. And the rest of the nation has taken note. Oklahoma City is overwhelmed with accolades about how far it has come in such a short amount of time. We are literally one of the most exciting cities in the United States, and it has resulted in tremendous job growth and economic vitality. As long as we remain on track with effective leadership at both the city and state levels, commercial real estate markets should provide very attractive risk adjusted returns for the foreseeable future to those with a good grasp of market conditions and able to properly underwrite revenues, operating costs and capital expenditures. Regency Center Price Edwards & Company 210 Park Avenue, Suite 1000, Oklahoma City, OK 73102 Phone (405) 843 7474 Fax (405) 236 1849 www.priceedwards.com