Savills Effective Rent Index

2016 Savills Rent Index

SERI2016 Table Of Contents Statistical Summary 1 Summary of Key Findings 2 National Benchmarks 4 Tenant Rent Trends 11 Landlord Concession Trends 13 Landlord Rent Trends 15 Total Rent Components 19 CBD Rent Trends 25 Suburban Rent Trends 33 Glossary 37 SERI Supplement 38

Methodology Since 1995, the Savills Rent Index (SERI) has been providing the real estate industry s only comprehensive, in-depth study of effective rental rate trends and the real cost of occupancy for tenants in the nation s major Central Business Districts (CBDs) and surrounding suburban markets. The SERI report tracks actual lease terms that reflect negotiated rents and concessions, as well as the costs of maintaining a building that are partially passed through to tenants operating expenses, real estate taxes and electricity costs. The SERI Supplement highlights key economic trends and market fundamentals that underpin each market s performance. Every year, Savills Studley s Research team examines larger long-term direct deals signed in higher-caliber Class A properties. Total (gross) rent is separated into its key components: net (or base) rent and building expenses (operating expenses, real estate taxes and electricity costs). The Tenant Rent Index (the cost of occupancy to the tenant) is derived from total rent less the amortized value of concessions provided by the landlord. The Landlord Rent Index (the landlord s bottom line) is calculated from total rent less costs incurred by the landlord, which include expenses, concessions and commissions. All statistics in this year s SERI report are based on larger long-term leases completed during 2015 in existing or newly constructed Class A buildings.

SERI2016 Total (Gross) Rent LESS Building Expenses: Operating Expenses Real Estate Taxes Tenant Electric LESS Amortized Concessions LESS Operating Expenses, Real Estate Taxes, Amortized Concessions and Commissions Net (Base) Rent Tenant Rent (Average cost of occupancy for tenants) Landlord Rent (Landlord's remaining balance) All numbers are based on negotiated larger long-term direct leases in higher-caliber Class A properties.

Statistical Summary Total (Gross) Rent Operating Expenses Building Expenses Real Estate Taxes Tenant Electric Net (Base) Rent Leasing Costs Concessions Tenant Landlord CBD Markets 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Atlanta (ATL) 31.33 35.57 7.83 7.95 4.00 4.10 1.50 1.50 18.00 22.02 92.00 85.00 18.63 23.84 2.62 7.22 Boston (BOS) 52.10 57.23 12.00 12.50 10.50 11.25 2.10 2.23 27.50 31.25 101.65 100.80 38.07 43.34 13.44 17.45 Chicago (CHI) 45.45 48.00 8.75 8.80 8.40 8.50 1.80 1.80 26.50 28.90 99.00 110.00 31.79 32.82 12.76 13.65 Dallas (DFW) 24.65 26.15 7.40 7.50 1.75 1.80 2.00 2.00 13.50 14.85 50.00 55.00 17.75 18.56 7.07 7.63 Denver (DEN) 38.55 42.23 6.85 6.92 2.80 2.85 1.90 1.90 27.00 30.56 83.00 85.77 25.74 29.00 15.04 18.17 Houston (HOU) 49.04 45.70 6.68 6.75 6.81 6.90 2.30 2.30 33.25 29.75 66.00 72.00 39.93 35.76 23.64 19.51 Downtown Los Angeles (DTLA) 39.92 40.82 10.75 10.85 3.57 3.60 2.10 2.35 23.50 24.02 83.00 85.00 28.47 29.09 12.44 12.91 West Los Angeles (WLA) 45.45 47.60 9.75 9.90 4.10 4.25 2.60 2.85 29.00 30.60 74.00 72.52 35.24 37.59 19.46 21.43 Miami (MIA) 40.55 42.40 8.10 8.20 5.15 5.25 3.05 3.05 24.25 25.90 80.00 78.00 29.51 31.64 16.11 18.03 Manhattan - Downtown (DTNY) 52.10 52.97 11.75 11.90 9.60 9.92 2.65 2.60 28.10 28.55 101.00 102.00 37.71 38.89 14.61 14.81 Manhattan - Midtown (MTNY) 83.91 84.34 13.90 14.25 16.41 16.98 3.35 3.30 50.25 49.81 138.00 138.50 64.87 65.23 31.67 31.12 New Jersey (NNJ) 29.95 33.63 8.75 9.10 3.25 3.35 1.95 1.95 16.00 19.23 62.50 67.00 21.33 24.38 7.23 9.56 Philadelphia (PHI) 30.62 32.71 8.76 8.85 2.36 2.45 1.97 1.97 17.53 19.44 62.00 61.00 22.06 24.29 9.23 11.15 Phoenix (PHO) 30.38 31.32 7.46 7.69 3.72 3.84 1.74 1.79 17.46 18.00 84.00 80.00 18.79 20.28 5.71 6.80 San Diego (SDO) 31.10 32.00 7.25 7.35 4.65 4.70 2.95 3.05 16.25 16.90 54.00 58.00 22.40 22.65 9.23 9.30 San Francisco (SFO) 68.85 69.95 12.45 12.75 5.45 5.60 3.45 3.45 47.50 48.15 72.00 73.00 57.25 58.19 37.58 38.07 Tampa Bay (TAM) 28.00 29.04 5.65 5.75 3.00 3.10 2.50 2.50 16.85 17.69 43.25 44.52 22.03 22.90 10.68 11.24 Washington, DC (WDC) 65.59 63.12 9.25 9.50 12.76 12.90 2.83 2.83 40.75 37.89 132.35 135.57 47.33 44.41 21.55 18.40 CBD Averages 44.07 45.38 8.99 9.14 5.88 6.02 2.43 2.46 26.76 27.77 80.76 82.68 32.63 33.70 15.68 16.39 Suburban Markets 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Central Perimeter, GA 26.10 27.30 6.05 6.15 2.30 2.35 1.50 1.50 16.25 17.30 52.58 51.50 18.85 20.19 7.23 8.35 Cook County, IL 26.85 27.85 7.90 7.95 4.55 4.60 1.50 1.50 12.90 13.80 70.00 69.00 17.19 18.33 3.24 4.28 DuPage County, IL 25.50 26.00 7.20 7.25 2.05 2.10 1.75 1.75 14.50 14.90 60.00 60.00 17.22 17.72 6.47 6.87 Fairfield County, CT 39.13 38.45 11.15 11.20 4.48 4.50 2.75 2.75 20.75 20.00 50.00 54.00 32.23 31.00 14.55 13.29 Fort Lauderdale, FL 36.24 39.74 8.95 9.05 3.80 3.90 2.99 2.99 20.50 23.80 48.50 47.50 28.30 33.19 13.63 18.03 Long Island, NY 32.69 32.93 8.20 8.25 6.90 6.94 1.34 1.34 16.25 16.40 41.50 41.50 26.96 27.20 10.03 10.17 Main Line/Conshohocken, PA 32.45 33.90 7.50 7.60 3.00 3.10 2.70 2.70 19.25 20.50 30.00 30.00 28.31 29.76 16.03 17.19 North Dallas Corridor, TX 29.25 31.50 8.45 8.55 3.80 3.85 2.60 2.60 14.40 16.50 45.00 42.50 23.04 25.64 9.13 11.28 Northern Virginia 41.27 40.53 6.25 6.32 3.05 3.07 2.97 2.97 29.00 28.17 92.00 102.00 27.66 25.44 16.06 13.80 Orange County, CA 28.89 33.75 7.09 7.25 1.90 1.98 2.05 2.20 17.85 22.32 60.00 67.00 20.01 23.84 9.82 13.19 Raleigh/Durham, NC 23.00 24.20 4.65 4.75 2.05 2.05 1.90 1.90 14.40 15.50 35.00 34.00 17.04 18.41 9.07 10.27 Scottsdale, AZ 33.58 36.44 9.14 9.36 2.49 2.68 1.95 1.97 20.00 22.43 80.00 78.00 22.54 25.68 8.82 11.36 Silicon Valley, CA 43.05 45.00 8.65 8.75 4.05 4.15 3.10 3.10 27.25 29.00 45.00 44.00 36.11 38.21 22.84 24.72 Southeast, CO 35.53 34.87 3.90 3.95 3.88 3.92 1.75 1.75 26.00 25.25 45.00 43.50 17.07 18.22 8.34 9.40 Waltham (Route 128), MA 36.63 43.20 7.40 8.40 6.00 7.00 1.63 1.75 21.60 26.05 64.15 65.15 27.78 32.68 12.67 16.92 West Loop/Galleria, TX 39.93 40.91 7.00 7.05 3.30 3.33 2.13 2.13 27.50 28.40 46.00 47.00 32.08 31.27 20.42 19.56 West Palm Beach, FL 36.37 36.02 10.45 10.52 7.92 8.00 3.00 3.00 15.00 14.50 61.00 60.00 40.40 41.57 22.08 23.12 Westchester, NY 35.45 35.70 9.85 9.90 6.35 6.40 3.00 3.00 16.25 16.40 50.00 52.00 27.30 26.62 9.28 8.52 Suburban Averages 33.37 35.70 7.69 8.69 3.99 4.11 2.26 2.27 19.43 20.62 54.21 54.93 25.56 26.94 12.21 13.35 1 SAVILLS EFFECTIVE RENT INDEX 2016

Summary of Key Findings SERI2016 Rental Rate Growth in Most Markets, with Declines in a Few Top Metros For the fifth straight year, tenants faced higher effective rent for premium Class A space in nearly all major U.S. CBDs. A distinguishing factor in 2015 was the acceleration of rental rate growth in many of the late recovery markets such as Atlanta, Chicago and Los Angeles. On the other hand, rent fell in a few of the largest markets Houston and Washington, DC and was essentially flat in Manhattan. Tenant effective rent rose nationally by 3.3% from $32.63 to $33.70. The average concession package (amortized value) increased nominally, but was unchanged as a percentage of total rent. Total rent grew by 3.0% to $45.38 and net rent rose by 3.7% to $27.77. Concessions did not keep pace with the rise in rents and in turn, landlord effective rent increased by 4.5% to $16.39. KEY CBD FINDINGS 2014 Unweighted Average 2015 Unweighted Average 2015 Change % 2014 Weighted Average 2015 Weighted Average Total (Gross) Rent $44.07 $45.38 3.0% $60.45 $61.35 Operating Expenses $8.99 $9.14 1.6% $10.98 $11.18 Real Estate Taxes $5.88 $6.02 2.3% $9.51 $9.75 Tenant Electricity $2.43 $2.46 1.3% $2.70 $2.72 Net Rent $26.76 $27.77 3.7% $37.25 $37.71 Amortized Concessions $11.44 $11.68 2.1% $13.86 $14.86 Tenant Rent Index $32.63 $33.70 3.3% $45.69 $46.36 Landlord Rent Index $15.68 $16.39 4.5% $22.53 $22.72 COMMENTS Total rent increased in all markets except for two as many "late recovery" markets once again registered the strongest growth. Operating costs continued their upward trajectory in 2015. Property taxes pushed higher as investment sales intensified in more markets. Tenant electricity costs were flat in most markets during 2015, with sharp rate hikes in a handful of them. Net rent increased for the fifth straight year, but at a much slower pace than in 2014. The value of concessions rose slightly, but as was the case in 2014 did not match the jump in rent. Tenants faced higher effective rents in most markets during 2015, with increases exceeding 5.0% in seven markets. Landlord effective rent posted its fifth year of growth, but at a more moderate pace than in 2014. SAVILLS EFFECTIVE RENT INDEX 2016 2

Summary of Key Findings Total (Gross) Rent $45.38 (+3.0%) LESS: LESS: LESS: Building Expenses ($17.62) Op. Ex. $9.14 (+1.6%) Taxes $6.02 (+2.3%) Tenant Elec. $2.46 (+1.3%) Amortized Concessions* $11.68 (+2.1%) Op. Ex., Taxes, Amortized Concessions and Commissions ($28.99) Net (Base) Rent $27.77 (+3.7%) ` Tenant Rent $33.70 (+3.3%) Landlord Rent $16.39 (+4.5%) *Concessions are amortized over the average lease term in the market. 3 SAVILLS EFFECTIVE RENT INDEX 2016

National Benchmarks SERI2016 Another Year of Growth; 2016 Could Be Peak Year Employers Continue Expansion: Private employers added 2.6 million jobs during 2015. Hiring activity intensified in the final quarter of the year. Heading into 2016, though, concerns about a global slowdown in growth China in particular were mounting. Late Recovery Markets Outperforming Others: For the second year in a row, markets that lagged in 2012 and 2013 were once again among the strongest in terms of hiring and leasing. Sustained leasing made a dent in availability this year in Atlanta, Chicago, Miami and Orange County. All of these markets have limited new construction activity. Downtown Los Angeles, Palm Beach County, Phoenix and Northern New Jersey are a bit further behind in terms of working through their excess space, but effective rent posted its first increase in these markets in quite some time as well. Tech Centers May Be Reaching Their Limits: The competition for talent has shown no signs of relenting in tech-fueled markets such as San Francisco and Silicon Valley, as well as in sections of Denver, Los Angeles and Manhattan. However, more Bay Area companies are looking for lower-cost space alternatives either in the East Bay or Peninsula or in secondary tech metros such as Portland, Oregon, or Salt Lake City, Utah. Many have already set up operations in Atlanta, Chicago and Denver. Investment Sales and Corporate Relocations Boosting Rents in Lower-Cost Markets: More investors feel that pricing in gateway markets such as Manhattan and San Francisco is getting overheated. Some have sold their assets and redeployed gains in markets such as Atlanta, Chicago, Denver and Raleigh/Durham. This out-ofmarket investment, coupled with a resurgence of corporate relocations, has given added impetus to rental rate increases in lower-cost markets. SAVILLS EFFECTIVE RENT INDEX 2016 4

National Benchmarks Total Rent Hits New Peak Total or gross rent (first year taking rent) rose for the fifth straight year, jumping by 3.0% from $44.07 to $45.38, just above the 2007 peak. The increase was not as sharp as in 2014, though, as declines in Washington, DC and Houston, as well as weaker growth in Manhattan and San Francisco offset some of the big increases in Atlanta, Chicago, Denver and Los Angeles. Total Rent Components $50 $45 $40 $35 Net Rent Operating Expenses Real Estate Taxes Tenant Electricity Total rent consists of four components: net (or base) rent and three building expense components operating expenses, real estate taxes and tenant electricity. Total rent rose primarily due to a 3.7% increase in net rent from $26.76 to $27.77. Rising operating expenses and taxes were also a contributing factor. Operating expenses ticked up by 1.6% from $8.99 to $9.14. Real estate taxes increased by 2.3% from $5.88 to $6.02. Tenant electricity also rose from $2.43 to $2.46. $30 $25 $15 $10 $5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Rent.78 $24.18 $28.74 $27.75 $21.42.75 $23.04 $22.93 $24.00 $26.76 $27.77 Operating Expenses $7.35 $7.61 $8.13 $8.42 $8.42 $8.47 $8.70 $8.82 $8.80 $8.99 $9.14 Real Estate Taxes $4.83 $5.09 $5.31 $5.46 $5.61 $5.58 $5.55 $5.57 $5.73 $5.88 $6.02 Electricity $1.92 $2.08 $2.15 $2.25 $2.30 $2.32 $2.39 $2.38 $2.38 $2.43 $2.46 Total Rent $34.87 $38.96 $44.33 $43.88 $37.75 $37.11 $39.68 $39.70 $40.92 $44.07 $45.38 5 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Value of Concessions Falls Relative to Rents Landlord Concessions: 2005-2015 Landlords pulled back on free rent periods and tenant improvement allowances in some of the tightest markets such as Austin, San Francisco and Silicon Valley. Creditworthy tenants can still negotiate favorable concessions in markets that have excess Class A space, though. Although the value of concessions was stable or rose in most markets, it stayed flat relative to rent. As a percentage of total rent, the average value of amortized concession packages ($11.68) remained at 24.4%. Higher relocation and construction costs in many markets eroded the value of tenant improvement allowances, though. $90 $80 $70 $60 $50 $40 $30 $10 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Value of Concessions $51.57 $51.42 $53.25 $61.55 $76.18 $73.62 $78.02 $76.80 $77.41 $80.76 $82.68 Amort. Concessions/Rent 18.2% 15.9% 14.3% 17.4% 26.5% 25.7% 24.4% 24.2% 24.9% 24.4% 24.4% 0.0% SAVILLS EFFECTIVE RENT INDEX 2016 6

National Benchmarks Expenses Share of Total Rent Up Slightly Total (or gross) rent consists of two main components: net (or base) rent and building expenses (operating expenses, real estate taxes and tenant electricity). As a percentage of total rent, net rent fell from 61.6% in 2014 to 61.5% in 2015. Higher real estate taxes made a slight difference during 2014. Building expenses share rose from 38.4% to 38.5%, but was well below its 40.8% share in 2010. Total Rent Components Net Rent Operating Expenses Real Estate Taxes Tenant Electricity Building Expenses: 40.8% 16.5% 4.9% Building Expenses: 38.4% 15.7% 4.5% Building Expenses: 38.5% 15.9% 4.4% 19.4% 2010 18.2% 2014 18.2% 2015 59.2% 61.6% 61.5% 7 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Operating Margins Return to Pre-Recession Norms Net Rent/Total Rent Ratio: 2005-2015 The net (base) rent/total rent ratio measures how much of net rent is flowing to building expenses. Net rent accounted for 61.5% of total rent meaning that 38.5% of total rent was diverted to operating expenses, real estate taxes and electricity. Net rent s share is approaching the levels seen at the start of the last expansion cycle, but still falls short of the peak level of 67.6% in 2007. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Building Expenses Share 39.1% 35.9% 32.4% 34.4% 42.9% 45.0% 41.3% 41.2% 40.3% 38.4% 38.5% Net Rent Share 60.9% 64.1% 67.6% 65.6% 57.1% 55.0% 59.2% 58.8% 59.7% 61.6% 61.5% SAVILLS EFFECTIVE RENT INDEX 2016 8

National Benchmarks Rent Increases Following an 11.5% spike in 2014, net rent posted a moderate 3.7% increase in 2015. Although the growth in net rent was more modest in 2015, it still exceeded the 2.1% rise in the average amortized value of concession packages. $40 $35 National Rent Comparison Tenant Landlord Consequently, tenant occupancy costs (the national Tenant Rent Index) rose by 3.3% from $32.63 to $33.70. $30 Additionally, the national Landlord Rent Index jumped from $15.68 to $16.39, a 4.5% increase. $25 $15 $10 $5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Tenant Rent $27.60 $31.70 $36.76 $35.16 $27.02 $26.72 $28.68 $28.85 $29.98 $32.63 $33.70 Landlord Rent $13.68 $17.11 $21.24 $19.15 $11.13 $10.94 $12.54 $12.57 $13.51 $15.68 $16.39 9 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Flat or Declining Rent in Most Higher-Priced Markets Despite a very weak 0.6% increase in 2015, Manhattan (Midtown), with an average tenant effective rent of $65.23, remained the most expensive market. San Francisco, the second most expensive market for tenants, continued to close the gap. It posted a 1.6% year-on-year increase to $58.19. There may be little upside remaining for San Francisco s rents in this cycle, though. While they were still among the higher-priced markets, Washington, DC ($44.41) and Houston ($35.76) reported decreases in tenant effective rent. $70 $65 $60 $55 $50 $45 $40 $35 $30 Tenant Rent Market Comparison 2014 2015 Unweighted Average: $33.70 (+3.3%) On the other hand, several markets registered year-on-year growth in excess of 10.0%, including Northern New Jersey (+14.3%) and Denver (+12.6%). Atlanta posted the biggest increase (+27.9%), pushing it above Tampa Bay, San Diego and Dallas, all markets that continued to struggle to gain traction. $25 $15 $10 $5 MTNY SFO WDC WLA DTNY HOU CHI MIA DTLA DEN NNJ PHI ATL TAM SDO DFW 2014 $64.87 $57.25 $47.33 $35.24 $37.71 $39.93 $31.79 $29.51 $28.47 $25.74 $21.33 $22.06 $18.63 $22.03 $22.40 $17.75 2015 $65.23 $58.19 $44.41 $37.59 $38.89 $35.76 $32.82 $31.64 $29.09 $29.00 $24.38 $24.29 $23.84 $22.90 $22.65 $18.56 Y-o-Y Change 0.6% 1.6% -6.2% 6.7% 3.1% -10.4% 3.2% 7.2% 2.2% 12.6% 14.3% 10.1% 27.9% 3.9% 1.1% 4.6% SAVILLS EFFECTIVE RENT INDEX 2016 10

Tenant Rent Trends Lower-Cost Markets Display Strongest Growth Tenant Rent: Year-on-Year Change by Market In contrast to 2014, when all markets posted higher occupancy costs, two markets - Washington, DC and Houston - registered declines in 2015. Additionally, effective rent growth was negligible in the two most expensive markets - Midtown Manhattan and San Francisco. Demand is falling short of supply in both Midtown and Downtown Manhattan as well as in Washington, DC. Sublet supply is starting to spike in Houston, undercutting rents across the region. Last year, seven markets recorded double-digit effective rent growth. During 2015, only four markets posted a 10.0% increase or higher. Tenant effective rent in Denver rose by more than 10.0% for the second year in a row. Atlanta (+27.9%) and Northern New Jersey (+14.3%) also witnessed spikes in effective rent during the year. Atlanta Northern New Jersey Denver Philadelphia Miami West LA Dallas Tampa Bay Chicago Manhattan (DT) Downtown LA San Francisco San Diego 14.3% 12.6% 10.1% 7.2% 6.7% 4.6% 3.9% 3.2% 3.1% 2.2% 1.6% 1.1% 27.9% Manhattan (MT) 0.6% Washington, DC -6.2% Houston -10.4% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 11 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Rent Still Below Peak in Half of the Markets Tenant Rent Trends: Percentage Above/Below Prior Peak Another year of robust growth in Denver pushed tenant occupancy costs 31.6% above their prior peak. Philadelphia was the only other market that was 10.0% above its prior peak but San Francisco (+8.2%), Downtown Los Angeles (+7.5%), Chicago (+5.6%) and Northern New Jersey (+5.5%) were more than 5.0% above their peaks. Denver Philadelphia San Francisco Downtown Los Angeles Chicago 12.7% 8.2% 7.5% 5.6% 31.6% The fallout in energy sectors pushed effective rent in Houston 10.4% below its 2014 peak. Tenant effective rent in Washington, DC, fell to its lowest mark since 2002 and was 19.9% below its peak in 2007. Occupancy costs in Manhattan (Midtown and Downtown) remained more than 20.0% below their prior peak, as did occupancy costs in Dallas (-34.6%) and San Diego (-40.5%). Northern New Jersey (2006) Tampa Bay Atlanta (2006) West Los Angeles (2008) Houston (2014) Miami Washington, DC Downtown New York Midtown New York -7.8% -10.4% -19.0% -19.9% -23.1% -29.8% 5.5% 4.5% 3.0% Dallas (2008) -34.6% San Diego -40.5% -45% -35% -25% -15% -5% 5% 15% 25% 35% *Unless otherwise indicated, prior market peak occurred in 2007. SAVILLS EFFECTIVE RENT INDEX 2016 12

Landlord Concession Trends Value of Concession Packages Up in Majority of Markets Landlord Concessions: Market Comparison 2014 2015 The value of concessions rose in 12 markets and fell in four. The national average rose by 2.4% to $82.68. $140 Landlords in Washington, DC had to extend generous concession packages to keep taking rents from falling precipitously. In markets such as San Francisco, the value of concession packages rose due to rental rate growth that in turn boosted the value of free rent periods. Chicago and Denver also saw a slight increase as several leases signed in new buildings under construction included very large improvement allowances. $120 $100 $80 $60 $40 Unweighted Average: $82.68 (+2.4%) MTNY WDC CHI DTNY DEN ATL DTLA MIA SFO WLA HOU NNJ PHI SDO DFW TAM 2014 $138.00 $132.35 $99.00 $101.00 $83.00 $92.00 $83.00 $80.00 $72.00 $74.00 $66.00 $62.50 $62.00 $54.00 $50.00 $43.25 2015 $138.50 $135.57 $110.00 $102.00 $85.77 $85.00 $85.00 $78.00 $73.00 $72.52 $72.00 $67.00 $61.00 $58.00 $55.00 $44.52 Y-o-Y Change 0.4% 2.4% 11.1% 1.0% 3.3% -7.6% 2.4% -2.5% 1.4% -2.0% 9.1% 7.2% -1.6% 7.4% 10.0% 2.9% 13 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Concessions Not Keeping Pace with Rents Amortized Concessions as Percentage of Total Rent The ratio of amortized concessions to total rent (concessions/rent ratio) is a way of comparing the value of concessions from market to market. In most cases, the higher the ratio the more likely it is that conditions favor the tenant. The ratio also provides a measure of leasing costs as it increases, it indicates that landlords have to concede more to get leases signed. Washington, DC and Houston registered significant jumps in their concessions/rent ratio and the ratio was flat in San Francisco. 45% 40% 35% 30% 25% 20% 15% Unweighted Average: 24.4% (unchanged) A year ago, Atlanta s concessions/ rent ratio (40.5%) was well above the national average of 24.4%. In 2015, a big jump in its base rent pushed the ratio down to 33.0%. San Francisco (14.8%) was the only market with a ratio of less than 20.0%. 10% 5% 0% ATL CHI DEN WDC SDO DAL DTLA NNJ DTNY PHI MIA MTNY HOU TAM WLA SFO 2014 40.5% 30.1% 33.2% 27.8% 28.0% 28.0% 28.7% 28.8% 26.8% 27.9% 27.2% 23.0% 18.6% 21.3% 22.5% 16.8% 2015 33.0% 31.6% 31.3% 29.6% 29.3% 29.0% 28.7% 27.5% 26.6% 25.7% 25.4% 22.7% 21.8% 21.2% 21.0% 16.8% SAVILLS EFFECTIVE RENT INDEX 2016 14

Landlord Rent Trends Landlords Margin Rises in Most Markets: Landlord effective rent rose by 4.5% in 2015, a fifth straight year of growth but well short of the 16.0% increase posted in 2014. A couple of the nation s biggest markets saw a reduction in landlord effective rent, but the majority of markets recorded an increase. Competition for space in many of the familiar locations Denver s CBD, West Los Angeles, San Francisco and Silicon Valley was sustained in 2015. The year brought more noticeable gains in markets such as Atlanta, Los Angeles and Raleigh/Durham. Landlords are breaching rent thresholds that were previously considered unassailable in several areas $35.00 in select sections of Raleigh s Research Triangle Park; $45.00 in Buckhead, Atlanta; $50.00 for view space in Denver and South Florida. New construction in most of these locations has been negligible in this cycle. Late Recovery Markets Outperforming Others: Chicago posted its second consecutive year of 5.0%-plus increase as suburban companies relocating Downtown supplemented moderate expansion among businesses already located within the Loop. More than two-thirds of Chicago s development pipeline has been pre-leased. Downtown Los Angeles enjoyed its strongest year for leasing 4.2 msf in more than decade. Miami registered steady demand from law firms and international banks, further depleting options in Brickell and Coral Gables. A Few Suburban Markets Rebounding: Of note, while urban cores have outperformed suburban locations in this recovery, some markets with a high percentage of suburban office parks also witnessed a spike in volume and surge in rent. Tenants leased 11.1 msf in Orange County during 2015, and 20 tenants have signed leases of 100,000 sf or more in the last two years. Landlord effective rent jumped by 34.4% in 2015. Highest-Cost Markets Lag: Demand is falling short of supply in Houston, Manhattan and Washington, DC. Rental rate declines were moderate in Manhattan but were sharper in Houston and Washington, DC. In the nation s capital, law firms and federal agencies capitalized on the highly favorable terms, spurring a strong year in leasing. In Houston, however, energy companies have been shedding space and sublet supply continues to pile up. 15 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Double-Digit Growth in Six Markets Landlord Rent Market Comparison 2014 2015 Landlord effective rent rose by 4.5% in 2015. This was the fifth consecutive annual increase but rent did not increase as sharply as in 2014 as weakness in Houston, Manhattan (Midtown) and Washington, DC curbed gains. Most markets saw decent growth, though. For the second straight year, San Francisco posted the highest landlord effective rent. As a result of a decline in Houston, West Los Angeles became the third most expensive market. Washington, DC fell closer to the middle of the pack following a 14.6% drop. $40 $35 $30 $25 $15 $10 Unweighted Average: $16.39 (+4.5%) Despite a doubling in its landlord effective rent from $2.62 to $7.22, Atlanta still has the lowest rate among major metros. $5 SFO MTNY WLA HOU WDC DEN MIA CHI DTLA DTNY TAM PHI NNJ SDO DFW ATL 2014 $37.58 $31.67 $19.46 $23.64 $21.55 $15.04 $16.11 $12.76 $12.44 $14.61 $10.68 $9.23 $7.23 $9.23 $7.07 $2.62 2015 $38.07 $31.12 $21.43 $19.51 $18.40 $18.17 $18.03 $13.65 $12.91 $14.81 $11.24 $11.15 $9.56 $9.30 $7.63 $7.22 Y-o-Y Change 1.3% -1.7% 10.1% -17.5% -14.6% 20.8% 11.9% 6.9% 3.7% 1.4% 5.2% 20.8% 32.3% 0.8% 7.9% 175.7% SAVILLS EFFECTIVE RENT INDEX 2016 16

Landlord Rent Trends Five Markets Now Above Their Pre-Recession Peak Landlord Rent Trends: Percentage Above/Below Prior Peak As was the case in 2014, only three markets had pushed more than 10.0% above their pre-recession peak: Denver (+51.1%), Chicago (+17.1%) and Philadelphia (+16.1%). Denver Chicago 17.1% 51.1% With Houston now below its prior peak, 11 markets were below their prior peak and more than half of these markets remained 20% below peak. Philadelphia San Francisco Downtown Los Angeles Tampa Bay (2006) -2.1% 16.1% 5.1% 1.1% Three markets were 50.0% or more below their prior peak: Midtown Manhattan, Dallas and San Diego. Northern New Jersey (2006) West Los Angeles Houston (2014) -6.8% -9.0% -17.5% Miami -27.8% Atlanta (2006) -29.1% Washington, DC -42.5% Downtown NY -49.3% Midtown NY -51.9% Dallas (2008) -52.5% San Diego -62.2% -65% -45% -25% -5% 15% 35% 55% *Unless otherwise indicated, prior market peak occurred in 2007. 17 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Landlord s Bottom Line Still Nearly 25.0% Below 2007 Peak Landlord effective rent has increased during every year since hitting its low of $10.94 in 2010. Nevertheless, in 2015 it was 24.9% below its peak of $21.24 in 2007. During the last recovery (between 2003 and 2007) landlord effective rent nearly doubled, rising from $11.94 to $21.24. In this cycle it has risen less sharply, gradually rising from $10.94 to $16.16 since 2009. Elevated concessions have made all the difference in this cycle. Concessions have declined only very slightly in most markets, and in turn are still cutting very deeply into landlord effective rent. Nationally, average amortized concessions and commissions totaled $11.23, a new record. $50 $45 $40 $35 $30 $25 $15 $10 $5 Landlord Cost Components Landlord Rent Electricity Operating Expenses Real Estate Taxes Amortized Conc & Comm. $7.27 $8.52 $11.04 $11.23 $6.76 $5.31 $10.23 $10.54 $10.62 $5.46 $10.22 $9.54 $6.80 $6.02 $5.09 $5.88 $8.13 $5.73 $8.42 $5.55 $5.57 $4.83 $5.61 $5.58 $7.61 $2.15 $8.99 $9.14 $2.25 $8.80 $7.35 $8.70 $8.82 $2.08 $8.42 $8.47 $2.43 $2.46 $1.92 $2.38 $2.39 $2.38 $2.30 $2.32 $21.24 $19.15 $13.68 $17.11 $11.13 $10.94 $12.54 $12.57 $13.51 $15.68 $16.39 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 SAVILLS EFFECTIVE RENT INDEX 2016 18

Total Rent Components By Market Higher Net Rent/Total Rent Ratio in Nearly All Markets Net Rent/Total Rent Ratio by Market 2014 2015 The ratio of net rent to total rent exceeded 60.0% in eight markets a slight increase from the six such markets in 2014. Denver (72.4%) had the highest net rent/total rent ratio, followed by San Francisco (68.8%). The net rent/total rent ratio was significantly lower in San Diego (53.0%) and Downtown Manhattan (53.9%). 75% 65% 55% 45% 35% 25% DEN SFO HOU WLA ATL MIA TAM CHI WDC PHI MTNY DTLA NNJ DAL DTNY SDO 2014 70.0% 69.0% 67.8% 63.8% 57.5% 59.8% 60.2% 58.3% 62.1% 57.3% 59.9% 58.9% 53.4% 54.8% 53.9% 52.3% 2015 72.4% 68.8% 65.1% 64.3% 61.9% 61.1% 60.9% 60.2% 60.0% 59.4% 59.1% 58.8% 57.2% 56.8% 53.9% 53.0% 19 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Total Rent Increases in Most Markets The national Total Rent Index rose by 3.0%, from $44.07 to $45.38, with increases in all but two markets. During 2015, only two markets registered growth exceeding 10.0%. These were Atlanta (+13.5%) and Northern New Jersey (+12.3%). Eight markets saw increases of less than 5.0%. Dallas continues to struggle as many of its buildings are repositioning and some tenants are relocating Uptown or to North Dallas. Total rent in the most expensive market, Manhattan (Midtown), was nearly unchanged, inching up by only 0.5% to $84.34. Washington, DC (-3.8% to $63.12) and Houston (-6.8% to $45.70) recorded decreases. $85 $80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $15 $10 $5 Total (Gross) Rent Market Comparison 2014 2015 Unweighted Average: $45.38 (+3.0%) MTNY SFO WDC DTNY CHI WLA HOU MIA DEN DTLA ATL NNJ PHI SDO TAM DFW 2014 $83.91 $68.85 $65.59 $52.10 $45.45 $45.45 $49.04 $40.55 $38.55 $39.92 $31.33 $29.95 $30.62 $31.10 $28.00 $24.65 2015 $84.34 $69.95 $63.12 $52.97 $48.00 $47.60 $45.70 $42.40 $42.23 $40.82 $35.57 $33.63 $32.71 $32.00 $29.04 $26.15 Y-o-Y Change 0.5% 1.6% -3.8% 1.7% 5.6% 4.7% -6.8% 4.6% 9.5% 2.3% 13.5% 12.3% 6.8% 2.9% 3.7% 6.1% SAVILLS EFFECTIVE RENT INDEX 2016 20

Total Rent Components By Market Moderate Growth in Operating Expenses Operating Expense Market Comparison 2014 2015 The national Operating Expense Index rose by 1.6% to $9.14 in 2015. Most markets posted moderate increases in operating expenses. Operating expenses in four markets exceeded $10.00 during 2015, while three markets had operating expenses of less than $7.00. $14 $12 $10 Unweighted Average: $9.14 (+1.6%) $8 $6 $4 $2 MTNY SFO DTNY DTLA WLA WDC NNJ PHI CHI MIA ATL DFW SDO DEN HOU TAM 2014 $13.90 $12.45 $11.75 $10.75 $9.75 $9.25 $8.75 $8.76 $8.75 $8.10 $7.83 $7.40 $7.25 $6.85 $6.68 $5.65 2015 $14.25 $12.75 $11.90 $10.85 $9.90 $9.50 $9.10 $8.85 $8.80 $8.20 $7.95 $7.50 $7.35 $6.92 $6.75 $5.75 21 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Taxes Continue Growth Real Estate Tax Market Comparison 2014 2015 The national Real Estate Tax Index rose by 3.0% to $6.02. As more investors enter markets such as Atlanta and Chicago and sales prices in Manhattan, Los Angeles and San Francisco remain elevated, assessed values have spiked in more metro areas. $16 $12 Taxes increased by more than 3.0% in five markets. Strong demand for stabilized Class A assets in major CBDs has pushed pricing higher, and will continue to boost valuations and taxes in some markets. $8 Unweighted Average: $6.02 (+2.3%) $4 MTNY WDC DTNY CHI HOU SFO MIA SDO WLA ATL DTLA NNJ TAM DEN PHI DFW 2014 $16.41 $12.76 $9.60 $8.40 $6.81 $5.45 $5.15 $4.65 $4.10 $4.00 $3.57 $3.25 $3.00 $2.80 $2.36 $1.75 2015 $16.98 $12.90 $9.92 $8.50 $6.90 $5.60 $5.25 $4.70 $4.25 $4.10 $3.60 $3.35 $3.10 $2.85 $2.45 $1.80 SAVILLS EFFECTIVE RENT INDEX 2016 22

Total Rent Components By Market Little Change in Tenant Electricity Tenant electricity costs barely budged in 2015, inching up from $2.43 to $2.46. Tenant electricity was unchanged in most markets. Markets in Southern California have been notable exceptions scheduled rate hikes have boosted tenant electricity costs. $3.50 $3.00 $2.50 Tenant Electricity Cost Market Comparison 2014 2015 Unweighted Average: $2.46 (+1.3%) $2.00 $1.50 $1.00.50.00 SFO MTNY MIA SDO WLA WDC DTNY TAM DTLA HOU DAL PHI NNJ DEN CHI ATL 2014 $3.45 $3.35 $3.05 $2.95 $2.60 $2.83 $2.65 $2.50 $2.10 $2.30 $2.00 $1.97 $1.95 $1.90 $1.80 $1.50 2015 $3.45 $3.30 $3.05 $3.05 $2.85 $2.83 $2.60 $2.50 $2.35 $2.30 $2.00 $1.97 $1.95 $1.90 $1.80 $1.50 23 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Net Rent Up Slightly In 2015, the national Net Rent Index increased by 3.7%, rising from $26.76 to $27.77. Net rent rose in all markets except three. $50 Net Rent Market Comparison 2014 2015 Atlanta, Chicago, Denver and Miami registered solid increases. Philadelphia (+10.9% to $19.44) and Northern New Jersey (+20.2% to $19.23) both posted sharp increases in net rent but this was the first time in several years that rates had shown significant growth. $45 $40 $35 $30 Unweighted Average: $27.77 (+3.7%) Declining rent in Houston and Washington, DC came as little surprise, but, of note rates in Manhattan both Midtown and Downtown and San Francisco, posted negligible increases. $25 $15 $10 $5 MTNY SFO WDC WLA DEN HOU CHI DTNY MIA DTLA ATL PHI NNJ TAM SDO DFW 2014 $50.25 $47.50 $40.75 $29.00 $27.00 $33.25 $26.50 $28.10 $24.25 $23.50 $18.00 $17.53 $16.00 $16.85 $16.25 $13.50 2015 $49.81 $48.15 $37.89 $30.60 $30.56 $29.75 $28.90 $28.55 $25.90 $24.02 $22.02 $19.44 $19.23 $17.69 $16.90 $14.85 Y-o-Y Change -0.9% 1.4% -7.0% 5.5% 13.2% -10.5% 9.1% 1.6% 6.8% 2.2% 22.3% 10.9% 20.2% 5.0% 4.0% 10.0% SAVILLS EFFECTIVE RENT INDEX 2016 24

CBD Rent Trends Atlanta Total rent rose for the third straight year, increasing by 13.5% from $31.33 to $35.57. Net rent jumped by 22.3% from $18.00 to $22.02. Operating expenses (+1.5%) rose once again and real estate taxes (+2.5%) have increased across all submarkets. Landlords made modest reductions to concession packages, but relative to total rent, the value of concessions fell. Tenant effective rent increased by 27.9% to $23.84. Landlord effective rent spiked from $2.62 to $7.22 a 175.7% jump but remained well under the pre-recession peak of $10.19 attained in 2006. Chicago Total rent rose for the third straight year, rising by 5.6% to a new peak of $48.00. Net rent surged by 9.1% from $26.50 to $28.90. Operating expenses (+0.6%) and real estate taxes (+1.2%) increased but tenant electric was stable. Concessions jumped by 11.1% to $110.00, as several leases in new buildings underway included very aggressive concession packages. Tenant effective rent increased for the sixth consecutive year, rising by 3.2% to $32.82. Finally, landlord effective rent jumped by 6.9% to $13.65, and was 17.1% above the prior peak of $11.66 in 2007. Atlanta Rent Trends $40 $35 $30 $25 $15 $10 $5 27.74 29.35 29.90 Chicago Rent Trends $60 $50 $40 $30 $10 21.53 23.14 9.76 10.19 20.93 7.37 31.09 30.53 30.48 18.83 5.01 16.04 2.15 16.93 3.13 29.62 14.44 Total Rent 28.44 28.90 15.60 0.72 1.01 Total Rent Tenant 16.70 Tenant 31.33 18.63 1.84 2.62 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 36.10 23.68 5.12 38.59 26.17 7.12 42.11 31.07 11.66 39.00 38.15 26.58 7.21 23.66 4.09 39.78 41.00 39.82 40.80 25.57 25.82 26.71 5.99 6.10 6.96 28.30 9.67 45.45 35.57 23.84 7.22 Landlord 48.00 31.79 32.82 12.76 13.65 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 25 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Dallas Total rent rose for the second year in a row, increasing by 6.1% to $26.15. Net rent posted a 10.0% year-on-year increase, from $13.50 to $14.85. Operating expenses (+1.4%) and real estate taxes (+2.9%) both increased but tenant electric was unchanged. Concession packages posted a notable jump from $50.00 to $55.00, offsetting some of the rental rate growth. Tenant effective rent rose for the second consecutive year, jumping by 4.6% to $18.56, but was still 34.5% below its 2008 peak of $28.36. Landlord effective rent increased by 7.9%, from $7.07 to $7.63. Denver Total rent rose for the fifth consecutive year, jumping by 9.5% to $42.23 in what appears to be Denver s longest expansion cycle in decades. Net rent spiked by 13.2% from $27.00 to $30.56. Operating expenses (+1.0%) and real estate taxes (+1.8%) increased but tenant electric was stable. Concessions fell a bit as a percentage of total rent. Tenant effective rent pushed higher into record territory, increasing by 12.6% to $29.00 yet another peak for occupancy costs. Landlord effective rent rose by 20.8% to $18.17, also a new peak. Dallas Rent Trends $40 $35 $30 $25 $15 $10 $5 26.25 27.08 Denver Rent Trends $45 $40 $35 $30 $25 $15 $10 $5 20.18 21.28 8.54 8.30 31.19 25.67 14.29 34.43 28.36 16.07 28.88 21.80 27.20 26.35 20.14 19.73 9.60 8.89 8.92 Total Rent 25.15 18.80 Total Rent Tenant 24.35 24.65 17.45 17.75 Tenant Landlord 26.15 18.56 7.59 6.84 7.07 7.63 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 25.00 15.74 6.18 27.56 18.92 9.10 31.75 22.03 12.02 28.54 29.50 17.43 17.16 7.42 6.80 27.45 28.26 15.72 5.37 16.84 6.38 32.00 19.97 9.41 36.25 24.68 38.55 25.74 14.17 15.04 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 42.23 29.00 18.17 SAVILLS EFFECTIVE RENT INDEX 2016 26

CBD Rent Trends Houston Total rent fell for the first time since 2010, declining by 6.8% to $45.70. Net rent dropped by 10.5% to $29.75. Operating expenses (+1.0%) and real estate taxes (+1.3%) rose but tenant electric was unchanged. Concession packages continued to increase, rising by 9.1% to $72.00. Tenant effective rent decreased by 10.4% to $35.76 and landlord effective rent posted its biggest decline since 2009, falling by 17.5% to $19.51. Houston Rent Trends $60 $50 $40 $30 25.37 20.37 21.00 $10 15.54 11.98 31.32 27.29 16.09 36.83 31.66 20.13 34.45 26.55 15.37 32.48 24.93 13.63 34.37 27.12 15.50 Total Rent 37.96 31.06 18.39 Tenant 44.18 35.24 20.46 49.04 39.93 23.64 Landlord 45.70 35.76 19.51 Downtown Los Angeles Total rent increased for the second consecutive year, rising by 2.3% to $40.82. Net rent increased by 2.2%, from $23.50 to $24.02. Operating expenses (+0.9%) and real estate taxes (+0.8%) both registered sizeable annual increases, with steady investment sales once contributing to the tax increases. Electricity hikes approved in 2013 continued to show up in electricity costs, which rose by 11.9% in 2015. Concession packages posted a minor gain. Tenant effective rent jumped by 2.2% to $29.09. Landlord effective rent rose by 3.7% from $12.44 to $12.91, just above its 2008 peak rate of $12.77. 5.87 Downtown Los Angeles Rent Trends $45 $40 $35 $30 $25 $15 $10 $5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 32.25 23.00 11.24 34.18 24.93 35.47 36.73 26.22 27.07 12.24 12.70 12.77 35.44 36.14 25.09 25.10 10.64 10.91 39.92 29.57 13.55 Total Rent 37.90 27.55 12.39 Tenant 35.85 25.91 10.59 39.92 Landlord 40.82 28.47 29.09 12.44 12.91 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 27 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 West Los Angeles Total rent grew for the third consecutive year but rose more moderately than in 2014, increasing by 4.7% from $45.45 to $47.60. Net rent increased by 5.5% from $29.00 to $30.60. Real estate taxes (+1.5%) and operating expenses (+3.7%) registered moderate gains but tenant electric spiked by 9.6% to $2.85. Landlords pulled back slightly on the value of concession packages. Tenant effective rent jumped by 6.7% from $35.24 to $37.59. Landlord effective rent rose by 10.1% from $19.46 to $21.43. Miami Total rent rose for the fifth straight year, registering a 4.6% annual increase from $40.55 to $42.40. Net rent grew by 6.8% from $24.25 to $25.90. Operating expenses (+1.2%) and real estate taxes (+1.9%) rose but tenant electric was flat. Concessions inched lower to $78.00 and declined as a percentage of total rent. Tenant effective rent averaged $31.64, a 7.2% year-on-year increase. Landlord effective rent rose by 11.9% to $18.03. West Los Angeles Rent Trends $60 $50 $40 $30 $10 36.00 27.31 15.60 41.86 33.17 20.04 46.93 37.96 23.55 50.43 40.77 26.19 38.85 38.40 28.50 28.05 14.11 13.43 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Miami Rent Trends $50 $45 $40 $35 $30 $25 $15 $10 $5 35.50 30.67 19.13 40.50 35.67 22.35 45.00 39.07 24.97 44.00 37.65 22.66 35.75 34.77 45.45 34.41 18.63 36.92 26.66 25.94 25.19 12.91 13.92 Total Rent 39.53 28.49 13.12 Total Rent Tenant 41.20 31.54 15.94 38.66 39.45 26.79 12.89 13.85 45.45 35.24 19.46 Tenant 28.41 40.55 29.51 15.32 16.11 Landlord 47.60 37.59 21.43 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 42.40 31.64 18.03 SAVILLS EFFECTIVE RENT INDEX 2016 28

CBD Rent Trends Manhattan (Downtown) Total rent posted its smallest increase since 2013, rising by 1.7% from $52.10 to $52.97. Net rent posted a 1.6% annual increase from $28.10 to $28.55. Operating expenses (+1.3%) and real estate taxes (+3.3%) continued their upward climb but tenant electric fell slightly. Concession packages ticked up slightly to $102.00, nearly even with its peak set in 2011. Tenant effective rent inched up by 3.1% to $38.89, but was still 23.1% below its 2007 peak. Landlord effective rent inched up by 1.4% to 14.81 and was 49.3% below the $29.20 peak attained in 2007. Manhattan (Midtown) Total rent posted a slight increase, inching up by 0.5% from $83.91 to $84.34. Net rent ticked down by 0.9% from $50.25 to $49.81. Operating expenses (+2.5%) and real estate taxes (+3.5%) rose but tenant electric (-1.5%) fell slightly. Concessions were stable, inching up by 0.4% to a new record value of $138.50. Tenant effective rent inched 0.6% higher to $65.23. Landlord effective rent dropped by 1.8% from $31.67 to $31.12. Manhattan (Downtown) Rent Trends $70 $60 $50 $40 $30 $10 40.54 51.53 61.07 56.72 Manhattan (Midtown) Rent Trends $120 $100 $80 $60 $40 30.19 11.33 41.18 21.03 50.58 29.20 45.96 24.01 43.74 30.93 9.27 35.00 22.17 0.71 41.34 26.99 5.08 Total Rent 46.43 33.32 Tenant 47.97 35.16 10.92 12.29 Landlord 52.10 52.97 37.71 38.89 14.61 14.81 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 73.34 63.69 38.04 88.02 78.70 51.90 102.45 92.93 64.65 94.59 81.62 53.11 63.13 47.26 19.21 58.00 43.10 14.45 Total Rent 74.30 75.05 77.95 58.43 59.16 60.25 28.10 27.80 28.20 Tenant Landlord 83.91 84.34 64.87 65.23 31.67 31.12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 29 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Northern New Jersey Total rent rose for the third straight year, posting its first significant jump in more than a decade as leasing along the Hudson Waterfront dominated activity. Total rent jumped by 12.3% to $33.63. Net rent rose by 20.2%, from $16.00 to $19.23. Operating expenses (+4.0%) and real estate taxes (+3.1%) increased but tenant electric was unchanged. Concessions also rose but were essentially flat relative to the increase in net rent. Tenant effective rent jumped by 14.3% to $24.38, a new peak level. Landlord effective rent spiked by $32.3% to $9.56, but was still below its most recent peak of $10.85 in 2004. Philadelphia Total rent rose for the fifth year in a row, jumping by 6.8% to $32.71. Net rent increased by 10.9% from $17.53 to $19.44. Operating expenses (+1.1%) and real estate taxes (+3.8%) ticked up but tenant electric was static. Concessions inched slightly lower to $61.00, and fell as a percentage of total rent. Tenant effective rent registered its biggest annual increase in several years, rising by 10.1% to $24.29, its highest level on record. Landlord effective rent also reached a new peak, increasing by 20.8% to $11.15. New Jersey Rent Trends $40 $35 $30 $25 $15 $10 $5 27.78 28.49 28.66 29.32 22.54 23.11 22.87 23.11 10.37 10.26 9.88 9.46 28.45 28.11 27.72 27.02 27.25 21.21 20.52 19.92 19.15 18.97 7.68 7.05 6.41 5.68 5.41 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Philadelphia Rent Trends $35 $30 $25 $15 $10 $5 25.60 19.39 7.39 27.75 20.85 8.50 29.25 22.35 22.30 9.60 9.54 28.10 27.70 21.49 8.65 27.00 20.10 19.64 7.21 27.78 27.88 28.42 6.13 Total Rent Total Rent 18.63 5.10 Tenant 20.14 6.13 29.95 21.33 7.23 Tenant 30.62 22.06 9.23 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 33.63 24.38 9.56 Landlord 32.71 24.29 11.15 SAVILLS EFFECTIVE RENT INDEX 2016 30

CBD Rent Trends San Diego Total rent increased for the third year in a row but continued to register only moderate growth, rising by 2.9% from $31.10 to $32.00. Net rent inched up by 4.0% from $16.25 to $16.90. Operating expenses (+1.4%), real estate taxes (+1.1%) and electricity (+3.4%) pushed higher. The value of concession packages rose slightly to $58.00 and in turn tenant effective rent rose by merely 1.1% from $22.40 to $22.65. Landlord effective rent inched up by 0.8% from $9.23 to $9.30. San Diego Rent Trends $50 $45 $40 $35 $30 $25 $15 $10 $5 36.76 37.13 31.93 31.65 19.66 18.83 43.89 43.42 38.09 24.58 36.98 23.14 33.38 25.81 13.03 32.32 31.39 24.30 11.44 23.17 10.29 Total Rent Tenant Landlord 30.04 30.40 31.10 32.00 20.78 21.54 22.40 22.65 7.86 8.55 9.23 9.30 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 San Francisco Total rent increased for the fifth straight year, rising by 1.6% to $69.95. Net rent rose by 1.4% to $48.15. Operating expenses (+2.4%) and real estate taxes (+2.8%) continued their ascent but tenant electric was flat. Tenant effective rent rose by 1.6% to $58.19, pushing 8.2% above its most recent peak in 2007. Landlord effective rent jumped by 1.3% to $38.07. San Francisco Rent Trends $80 $70 59.79 $60 $50 42.38 53.76 $40 36.21 $30 35.94 36.24 30.24 20.86 $10 15.70 57.93 50.68 33.11 43.78 34.59 16.92 53.15 43.46 25.40 55.75 46.16 27.70 Total Rent 58.35 59.80 48.36 48.53 29.55 29.57 Tenant Landlord 68.85 69.95 57.25 58.19 37.58 38.07 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 31 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Tampa Bay Total rent rose by 3.7% to $29.04, its biggest annual increase since 2007. Net rent increased for the third consecutive year, rising by 5.0% from $16.85 to $17.69. Operating expenses and real estate taxes posted increases, but tenant electric was unchanged. While Class A buildings that traded during the year experienced a whopping 29% average increase in real estate taxes, the Class A market averaged a mere 3.3% increase. Generally, landlord concession packages remained unchanged relative to rent. Tenant effective rent averaged $22.90, a year-on-year increase of 3.9%. Landlord effective rent jumped by 5.2% to $11.24. Washington, DC Total rent declined for the first time since 2012, dropping by 3.8% to $63.12. Net rent decreased by 7.0% from $40.75 to $37.89. Operating expenses (+2.7%) and real estate taxes (+1.1%) pushed higher but tenant electric was unchanged. Concessions attained a new record level, averaging $135.57, and the District was one of only a few major metros to see a significant jump in the value of concessions relative to rent in 2015. Tenant effective rent dropped by 6.2% to $44.41. Landlord effective rent posted a 14.6% decline from $21.55 to $18.40. Tampa Bay Rent Trends $35 $30 $25 $15 $10 $5 23.00 17.34 6.22 25.00 20.86 21.92 11.48 11.10 26.75 27.00 26.50 26.50 26.50 26.50 19.29 7.94 17.65 18.23 18.59 6.61 7.19 7.55 19.31 8.27 27.25 28.00 29.04 20.98 9.71 22.03 22.90 10.68 11.24 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Washington, DC Rent Trends $80 $70 $60 $50 $40 $30 $10 55.50 48.60 58.50 50.57 28.72 29.57 63.75 64.00 55.47 54.34 31.99 28.60 65.75 67.00 68.21 47.92 21.09 53.20 52.82 26.32 26.68 Total Rent Total Rent 64.45 64.68 65.59 47.89 23.22 Tenant Tenant 45.88 47.33 21.52 21.55 Landlord Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 63.12 44.41 18.40 SAVILLS EFFECTIVE RENT INDEX 2016 32

Suburban Rent Trends Fort Lauderdale Total rent registered its biggest increase in this cycle, rising by 9.7% to $39.74. Net rent increased by 16.1% from.50 to $23.80. Operating expenses (+1.1%) and real estate taxes (+2.6%) pushed higher but tenant electric was flat. The value of concessions fell very slightly. Tenant effective rent jumped by 17.3% to $33.19 and landlord effective rent increased by 32.3% from $13.63 to $18.03, a new peak mark. Fort Lauderdale Rent Trends $45 $40 36.50 38.25 $35 33.00 $30 30.98 32.73 $25 27.48 $15 16.09 16.88 17.04 $10 $5 34.70 28.90 14.77 Total Rent 33.50 33.47 33.10 33.60 33.88 25.67 26.33 25.99 26.70 27.33 Tenant 36.24 28.30 12.10 11.27 11.87 12.41 13.02 13.63 Landlord 39.74 33.19 18.03 Orange County Total rent grew for the third consecutive year and registered its largest increase since 2006, rising by 16.8% to $33.75. Net rent jumped by 25.0% from $17.85 to $22.32. Operating expenses (+2.3%) and real estate taxes (+4.2%) rose. Electricity rate hikes continued to impact the region and tenant electric jumped by 7.3% to $2.20. The nominal value of a typical concession package rose to $67.00, but declined as a percentage of total rent. Tenant effective rent spiked by 19.1% to $23.84. Landlord effective jumped by 34.4% to $13.19, but remained well below the 2006 peak of $24.51. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Orange County Rent Trends $45 $40 $35 $30 $25 $15 $10 $5 31.80 27.36 17.88 39.00 34.86 24.51 36.91 32.47 21.82 33.60 27.68 17.15 28.80 20.66 10.72 27.59 26.97 26.85 27.65 28.89 18.71 18.09 18.71 19.35 20.01 8.74 8.01 Total Rent Tenant 9.10 9.59 9.82 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 33.75 23.84 13.19 33 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Silicon Valley Total rent rose for the third consecutive year, jumping by 4.5% to $45.00 and hitting another new peak. Net rent grew by 6.4% from $27.25 to $29.00. Operating expenses (+1.2%) and real estate taxes (+2.5%) both increased but tenant electric was unchanged. Concessions dropped for the fifth consecutive year, declining by 2.2% to $44.00. In turn, tenant effective rent increased by 5.8% to $38.21. Landlord effective posted its third straight annual increase, rising by 8.2% to $24.72. Silicon Valley Rent Trends $50 $45 $40 $35 $30 $25 $15 $10 $5 27.50 21.33 11.53 31.75 25.58 14.42 34.25 34.25 34.25 34.00 28.08 27.92 15.89 15.73 26.54 25.67 14.34 13.73 43.05 35.03 21.76 Total Rent 37.65 29.94 17.35 Tenant 40.45 33.20 20.32 43.05 36.11 22.84 Landlord 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 45.00 38.21 24.72 Northern Virginia Total rent fell for the first time since 2009, decreasing by 1.8% to $40.53. Net rent dropped by 2.9% from $29.00 to $28.17. Operating expenses (+1.1%) and real estate taxes (+0.7%) pushed higher but tenant electric was unchanged. The value of concessions increased by more than 10% for a second year in a row, rising by 10.9% to $102.00. Tenant effective rent averaged $25.44, a year-on-year drop of 8.0%, and was 16.4% below the peak of $31.23 in 2011. Landlord effective rent fell by 14.1% to $13.80. Northern Virginia Rent Trends $45 $40 $35 $30 $25 $15 $10 $5 29.50 23.98 14.85 33.50 26.60 26.59 17.13 16.42 36.25 36.40 35.68 35.82 25.36 14.74 23.86 24.78 13.30 14.17 42.55 31.23 20.15 Total Rent 40.25 29.28 18.19 Tenant 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 36.85 25.40 14.46 41.27 27.66 16.06 Landlord 40.53 25.44 13.80 SAVILLS EFFECTIVE RENT INDEX 2016 34

Suburban Rent Trends Suburban Tenant and Landlord Rent Tenant effective rent fell in four markets during 2015, compared to only two in 2014. Excess space and weak demand in Northern Virginia and Fairfield County, Connecticut caused tenant effective rent decreases of more than 5.0%. Compared to 2014 rental rate growth accelerated in many suburban markets with doubledigit increases in four markets. Orange County s steady leasing activity, particularly from big block users spurred a 19.1% increase. Northern Virginia (-14.1%), Westchester, New York (-8.8%) and Fairfield County, Connecticut (-8.7%) registered the sharpest decreases in landlord effective rents as base rents fell slightly and concessions remained elevated. Rents in North Dallas/Corridor continued to increase, rising by 23.5%. Cook County s 32.1% jump reflects a very low starting point but tightening space options in teh O Hare Corridor as well. Finally, Silicon Valley s 8.2% jump in effective rents does not fully reflect the extent of demand for space among larger tech companies. 35 SAVILLS EFFECTIVE RENT INDEX 2016 Suburban Tenant Rent Comparison: Percentage Change 2014-2015 Orange County, CA Fort Lauderdale, FL Scottsdale, AZ North Dallas Corridor Waltham (Route 128), MA Raleigh, Durham Central Perimeter, GA Southeast, CO Cook County, IL Silicon Valley, CA Main Line/Conshohocken, PA DuPage County, IL West Palm Beach, FL Long Island, NY Westchester, NY West Loop/Galleria, TX Fairfield County, CT Northern Virginia -8.0% -2.5% -2.5% -3.8% 9.0% 8.0% 7.1% 6.7% 6.6% 5.8% 5.1% 2.9% 2.9% 0.9% 11.3% 13.9% 19.1% 17.3% -10% -5% 0% 5% 10% 15% 20% Suburban Landlord Rent Comparison: Percentage Change 2014-2015 Orange County, CA Fort Lauderdale, FL Cook County, IL Scottsdale, AZ North Dallas Corridor Waltham (Route 128), MA Central Perimeter, GA Raleigh/Durham, NC Southeast, CO Silicon Valley, CA Main Line/Conshohocken, PA DuPage County, IL West Palm Beach, FL Long Island, NY West Loop/Galleria, TX Westchester, NY Fairfield County, CT Westchester, NY Northern Virginia -14.1% -8.2% -8.7% -8.8% -4.2% 8.2% 7.2% 6.1% 4.7% 1.4% 15.8% 15.5% 13.2% 12.7% 23.5% 34.4% 32.3% 32.1% 28.8% -15% -5% 5% 15% 25% 35%

SERI2016 Suburban Tenant Rent 2008 2009 2008 2009 2014 2015 Suburban Landlord Rent 2014 2015 $45 $24 $24.72 $40 $41.57 $23.12 $35 $30 $38.21 $35.60 $33.19 $31.27 $31.00 $29.76 $16 $19.59 $19.56 $18.03 $17.19 $25 $15 $27.20 $26.62 $25.68 $25.64 $25.44 $23.84.19 $18.41 $18.33 $12 $8 $13.80 $13.29 $13.19 $11.36 $11.28 $10.27 $10.17 $9.40 $8.52 $8.35 $10 $5 West Palm Beach, FL Silicon Valley, CA Waltham (Route 128), MA Fort Lauderdale, FL West Loop/Galleria, TX Fairfield County, CT Main Line/Conshohocken, PA Long Island, NY Westchester, NY Scottsdale, AZ North Dallas Corridor Northern Virginia Orange County, CA Central Perimeter, GA Raleigh, Durham Cook County, IL $4 Silicon Valley, CA West Palm Beach, FL Waltham (Route 128), MA West Loop/Galleria, TX Fort Lauderdale, FL Main Line/Conshohocken, PA Northern Virginia Fairfield County, CT Orange County, CA Scottsdale, AZ North Dallas Corridor Raleigh/Durham, NC Long Island, NY Southeast, CO Westchester, NY Central Perimeter, GA SAVILLS EFFECTIVE RENT INDEX 2016 36

Glossary Concessions: Landlord Rent: Net Rent: Operating Expenses: Real Estate Taxes: Tenant Rent: Tenant Electricity: Total Rent: Includes the tenant improvement allowance plus the value of the rental rate abatement. Concessions are amortized over the average market lease term, using beginning-of-period payments. An estimate of rent received from a tenant less related expenses. The gross rental rate exclusive of the tenant s proportionate share of real estate taxes, operating expenses and tenant electricity. Includes (1) heating, ventilation and air conditioning (HVAC); (2) maintenance; (3) common area utilities and electricity; (4) cleaning; and (5) all other non-capital costs associated with the operation of a building. Local real estate taxes exclusive of special assessments and other one-time charges. An estimate of the actual cost of occupancy for the tenant. The calculation is the total rent minus amortized lease concessions. Payments made by the tenant, whether to the landlord or public utility, or by the landlord as a general building expense, for the electrical power utilized within a tenant s premises, exclusive of building HVAC. The sum of the four rental rate components: net rent, operating expenses, real estate taxes and electricity. 37 SAVILLS EFFECTIVE RENT INDEX 2016

SERI Supplement SERI2016 U. S. GDP - Post WWII GDP performance was sporadic in 2015, with growth of less than 1.0% in the first and fourth quarters and sub-3.0% growth in the second and third. Global and U.S. GDP growth expectations for 2016 have both been reduced of late due to a slowing Chinese economy and weakness in commodityfueled countries such as Australia, Brazil, Canada and Russia. The strengthening of the U.S. dollar has also pushed the trade deficit higher. 16.0% 14.0% 1950s: AGR +6.7% Source: U.S. BEA U.S. GDP - Annual Growth Rate 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 1960s +4.9% 1970s +5.1% 0.0% -2.0% -4.0% -6.0% 1948Q1 1949Q3 1951Q1 1952Q3 1954Q1 1955Q3 1957Q1 1958Q3 1960Q1 1961Q3 1963Q1 1964Q3 1966Q1 1967Q3 1969Q1 1970Q3 1972Q1 1973Q3 1975Q1 1976Q3 1978Q1 1979Q3 1981Q1 1982Q3 1984Q1 1985Q3 1987Q1 1988Q3 1990Q1 1991Q3 1993Q1 1994Q3 1996Q1 1997Q3 1999Q1 2000Q3 2002Q1 2003Q3 2005Q1 2006Q3 2008Q1 2009Q3 2011Q1 2012Q3 2014Q1 2015Q3 1980s +4.1% 1990s +3.7% 04-08 +2.6% 10-15 +2.1% SAVILLS EFFECTIVE RENT INDEX 2016 38

SERI Supplement - U.S. Economy Dow Jones Industrial Average (1990-2015) The Dow suffered several sharp declines between 2009 and 2011, precipitated by events such as Eurozone turbulence and periodic debt/ budget brinkmanship in Washington. Confidence rebounded in late 2013 and the market began a steady ascent, punching through a series of crises including standoffs in Washington, the Eurodebt crisis and the taper tantrum. The sharp correction in Asian markets and tanking oil prices that began in the summer of 2015 started a period of volatility and negative investor sentiment that appears to be carrying into 2016. 20,000 18,000 Year End 2015: 17,425 16,000 14,000 3Q 2007: 13,895 Stock Price Index 12,000 10,000 8,000 6,000 1Q 2009: 7,609 4,000 2,000 Source: Dow Jones & Company 0 1990Q1 1990Q3 1991Q1 1991Q3 1992Q1 1992Q3 1993Q1 1993Q3 1994Q1 1994Q3 1995Q1 1995Q3 1996Q1 1996Q3 1997Q1 1997Q3 1998Q1 1998Q3 1999Q1 1999Q3 2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 39 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Home Prices, Case-Shiller 20-City Composite Index (2000-2015) Home prices a key driver of consumer spending and confidence have been increasing since early 2012. Based on the Case-Shiller 20-City Composite Index, pricing has increased by 31.9% since it hit a low point in late 2011. Of note, between 2000 and 2003, prices rose by 35.7%. Price increases were interrupted in the summer of 2014 and early 2015, but have resumed growth since then. Limited new construction has kept the inventory of homes for sale at very low levels, helping to boost pricing. 2.0% 1.5% 2000-2006: 105.4% increase Since 2011: 31.9% increase 1.0% 0.5% Monthly Change 0.0% -0.5% -1.0% -1.5% -2.0% 2007-2011: 50.7% decline Source: S&P/Case-Shiller -2.5% Jan-00 Jun-00 Nov-00 Apr-01 Sep-01 Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 SAVILLS EFFECTIVE RENT INDEX 2016 40

SERI Supplement New and Existing Home Sales (1968-2015) Home sales started to recover by the second half of 2011. Over the last four years home sales have risen and home builders have slowly gained traction. Even so, home sales remain well below their pre-recession peak levels. Existing home sales averaged 4.6 million units in the last twelve months and new home sales averaged 507,000 units (still less than half of their peak of 1.28 million in 2006). The implementation of mortgage transparency regulations hampered sales during late 2015. The biggest impediments to stronger home sales remain weak income growth as well as the challenge of raising a down payment. 9,000 8,000 New Home Sales Existing Home Sales Source: NAR, U.S. Census 7,000 2006 average: 6.18 m existing, 1.28 m new homes Home Sales (Thousands) 6,000 5,000 4,000 3,000 12 month average: 4.6 m existing, 507k new homes 2,000 1,000 0 Jan-68 Jan-69 Jan-70 Jan-71 Jan-72 Jan-73 Jan-74 Jan-75 Jan-76 Jan-77 Jan-78 Jan-79 Jan-80 Jan-81 Jan-82 Jan-83 Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 41 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 U.S. Auto Sales, Monthly (1980-2015) Auto sales have increased steadily from the low point reached in 2009, and by August of 2015 they were just about even with prerecession trends. Attractive auto financing deals and improving household finances pushed sales to more than 17.0 million annually by year-end 2015, a new peak. 2,000 1,800 1,600 2001-2007 average: 1.43 m per month Source:BEA 2010-2015 average: 1.24 m per month 1,400 Monthly Auto Sales, (Thousands) 1,200 1,000 800 600 400 200 0 Dec-79 Aug-80 Apr-81 Dec-81 Aug-82 Apr-83 Dec-83 Aug-84 Apr-85 Dec-85 Aug-86 Apr-87 Dec-87 Aug-88 Apr-89 Dec-89 Aug-90 Apr-91 Dec-91 Aug-92 Apr-93 Dec-93 Aug-94 Apr-95 Dec-95 Aug-96 Apr-97 Dec-97 Aug-98 Apr-99 Dec-99 Aug-00 Apr-01 Dec-01 Aug-02 Apr-03 Dec-03 Aug-04 Apr-05 Dec-05 Aug-06 Apr-07 Dec-07 Aug-08 Apr-09 Dec-09 Aug-10 Apr-11 Dec-11 Aug-12 Apr-13 Dec-13 Aug-14 Apr-15 SAVILLS EFFECTIVE RENT INDEX 2016 42

SERI Supplement U.S. Real Median Household Income (1990-2014) Median household income finally stabilized in most regions by 2012. Income has posted decent gains over the last three years in the Northeast and West, but has lagged in the South and Midwest. Overall, on an inflation-adjusted basis, household income is still slightly below its prerecession levels. $90,000 Median Houshold Income (Inflation-Ajdusted) $80,000 $70,000 $60,000 $50,000 $40,000 $78,703 $78,399 $72,490 $71,024 $66,810 U.S. Northeast West South Midwest Source: U.S. Census Bureau 43 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Total Outstanding Consumer Installment Credit (1980-2015) Consumer installment credit such as credit cards, bank cards and other revolving debt has risen steadily over the last few decades. Until the most recent recession, households supplemented income with gains from higher home prices and home equity loans. They also padded spending power with credit card debt. Households lowered this debt slightly between 2008 and 2010, in some cases by defaulting on loans, but outstanding credit has started to rise again as households and banks have both gained confidence. $4,000 Source: U.S. Board of Governors of the Federal Reserve System Total Outstanding Consumer Installment Credit (Billions $) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 July 2008: $2.58 trillion July 2010: $2.39 trillion Oct 2015: $3.5 trillion SAVILLS EFFECTIVE RENT INDEX 2016 44

SERI Supplement Mortgage Delinquency Rates (1980-2015) Another area of improvement for the U.S. housing market has been the steady decline in delinquency rates from a range of 9.0% to 10.0% in early 2010 to less than 6.0% in all regions currently. Delinquency has remained much higher in the Northeast and South. In contrast, the West has gone from a delinquency rate of nearly 10.0% in 2010 to just below 4.0%, by far the lowest among the four regions. Source: MBA 12.0% 10.0% 8.0% Delinquency Rate 6.0% 4.0% 2.0% Northeast West South Midwest 0.0% 45 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 Financial Accounts, Nonfinancial Corporations - Net Worth (1970-2014) One of the steadier features of the U.S. economy, virtually right out of the gates of the recovery, has been the strong balance sheets of corporations. The net worth (assets less liabilities) of nonfinancial corporations took a big hit in the recession, falling to just under $14 trillion, but has pushed steadily higher, rising to.5 trillion as of year-end 2014. Companies have deployed the funds for mergers and acquisitions, dividend payouts, stock buybacks, and equipment and software. However, most businesses did not start to aggressively expand payroll until 2014. $25.00 Source: Federal Reserve Net Worth, Nonfinancial (Trillions $).00 $15.00 $10.00 $17.99 $13.96.52 $5.00.00 SAVILLS EFFECTIVE RENT INDEX 2016 46

SERI Supplement U.S. Overall Monthly Employment Trends (2007-2015) Overall employment has increased 63 months in a row (every month since October of 2010). Average monthly job growth improved in the last few months of 2015, but averaged only 214,750 during the year as a whole, well below the 259,666 averaged in 2014. While much of the growth in the early stages of the recovery was industry-specific tech, government or energy the growth has spread to other sectors such as retail, hospitality and real estate. 600,000 400,000 200,000-8.7 million Average: -349k per month Job Growth /Loss 0-200,000-400,000 +12.9 million, Average: +204k per month -600,000-800,000-1,000,000 Source: BLS 47 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 U.S. Office-Using Monthly Employment Trends (2008-2015) During the last four years, office-using employment which includes the financial, professional/business services and information sectors has been slowly but consistently increasing, with losses in only five months since September of 2009. Employers have added 4.2 million officeusing jobs since the start of 2010, well above the 2.4 million shed in the recession. Following some weakness in late 2013, hiring accelerated in 2014 with an average monthly gain of 74,166 jobs, well above the average of 58,250 gained per month in 2013. 200,000 150,000 100,000-2.4 million Job Growth / Loss 50,000 0-50,000-100,000 +4.2 million -150,000-200,000-250,000-300,000 Source: BLS SAVILLS EFFECTIVE RENT INDEX 2016 48

SERI Supplement - Office Market Office-Using Employment and Change in Occupancy (Current Cycle vs. Prior Peak) Office-using employment, and in turn occupancy rates, have pushed furthest above their prior peaks in Texas metros (red bubbles) and techfueled West Coast metros (yellow). Office-using employment in Austin, for example, is 34.0% above its prior peak and its occupancy rate has pushed back to prior peak levels. In contrast, most markets in the Northeast (grey) and Midwest (green) are below their prior peak in occupancy despite reaching new levels in employment. Sunbelt markets such as Phoenix and South Florida still have a lot of excess space. Office-Using Employment % Change (2008 vs. Current) 35.0% 25.0% 15.0% 5.0% -5.0% Northeast Southeast Midwest Texas, Plains & Mountain West Southwest Bay Area & Northwest Mid-Atlantic LVG NVA MD PHO SFL WCT, -6.4% CHA SNT POR HOU ATL SLT IND NYC SEA MIN CIN PITDEN BOS BLT ORL TAM KC STL MEM EBAY WAS RIC CHIC CHIS PHI DET LA OC NJ, -5.4% Austin : +34.0%, occ. even with prior peak SVAL SFO -15.0% -1,300-1,100-900 -700-500 -300-100 100 Occupancy Rate Change from prior peak (basis points) CLE RDUR DFW LIS Source: BLS Occupancy Rate 4Q15 vs. prior peak* Off. Emp. 4Q15 vs. 2008 Current Vacancy Market Boston (BOS) 0 6.4% 10.3% Manhattan (NYC) -270 8.1% 8.6% Long Island, NY (LIS) -40-2.7% 8.7% New Jersey (NJ) -430-6.5% 17.9% Westchester/Fairfield (WCT) -580-4.8% 15.8% Pittsburgh, PA (PIT) -60 6.9% 10.1% Philadelphia (PHI) -120 1.5% 12.7% Baltimore, MD (BLT) -70 8.4% 12.0% Suburban Maryland (MD) -810-12.3% 18.6% Washington, DC (DC) -470 0.8% 12.1% Northern Virginia (NVA) -910-1.6% 19.7% Richmond, VA (RIC) -60-0.8% 12.6% Raleigh/Durham (RD) 0 21.8% 10.2% Charlotte (CHA) -60 14.5% 11.0% Atlanta (ATL) -20 11.3% 15.4% Orlando (ORL) -480 3.9% 13.6% Tampa Bay (TBY) -340 2.6% 13.4% South Florida (SFL) -560 5.1% 13.3% Chicago CBD (CHIC) -110 1.2% 11.5% Chicago Suburbs (CHIS) -140 1.2% 17.3% Detroit (DET) 0-0.2% 18.2% Minneapolis (MIN) -80 7.9% 10.8% Cleveland (CLE) -80-3.0% 14.5% Cincinnati (CIN) -190 8.0% 16.6% Indianapolis (IND) -10 9.8% 10.4% St. Louis (STL) -80 2.4% 13.7% Dallas/Ft. Worth (DFW) -20 19.7% 17.8% Houston (HOU) -400 11.2% 16.8% Austin (AUS) 0 34.0% 9.9% San Antonio (SNT) -290 13.2% 13.4% Kansas City (KC) -70 1.9% 12.7% Memphis (MEM) -20 3.7% 13.8% Denver (DEN) 0 6.7% 12.0% Salt Lake City (SLT) 0 12.1% 7.3% Phoenix (PHO) -770 4.7% 19.2% Las Vegas (LVG) -1040-3.9% 19.5% Los Angeles (LA) -510-3.4% 13.4% Orange County (OC) -390-5.5% 11.6% San Diego (SDO) -380 1.6% 13.8% Silicon Valley (SVAL) 0 33.2% 9.1% E Bay/Oakland (EBAY) 0 2.5% 10.6% San Francisco (SFO) -80 32.0% 8.4% Portland, Or (POR) 0 12.0% 9.1% Seattle (SEA) -160 8.4% 10.8% 49 SAVILLS EFFECTIVE RENT INDEX 2016

SERI2016 National Office-Using Employment and Vacancy Rates (2000-2014) The U.S has added an average of 415,000 office-using jobs per year in this recovery, exceeding the annual average of 320,000 jobs gained in the last expansion. Nevertheless, vacancy rates have fallen more slowly, due largely to a widespread effort by companies to consolidate multiple locations and lease less space per employee. Five years after peaking at 17.5%, the vacancy rate has fallen by only 1.4 pp, a fraction of the 4.7 pp decline in the last recovery. Of note, annual office-using employment growth is well short of the pace set in the 1980s and 1990s. 1,000,000 peak: 19.3% 20.0% 800,000 17.0% 17.5% 16.1% 17.5% 600,000 15.0% 400,000 Job Growth/Loss 200,000 0-200,000 7.0% Average Annual Gain (81, 83-90): 526K 1.2 bsf constructed, 256 sf per new off. emp. Average Annual Gain (92-2000): 488K 407 msf constructed, 93 sf per new off. emp. trough:7.9% 12.3% Average Annual Gain: 323k 191 msf constructed, 118 sf per new off. emp. Average Annual Gain: 415k 129 msf constructed, 62 sf per new off. emp. 12.5% 10.0% 7.5% Vacancy Rate -400,000 5.0% -600,000-800,000-1,000,000 Quarterly Job Loss Quarterly Job Gain VacancyRate Source: Savills Studley/BLS 2.5% 0.0% SAVILLS EFFECTIVE RENT INDEX 2016 50

SERI Supplement Leasing Volume as a Percentage of Historical Average (2015) Annual leasing volume in the top U.S. office markets fell short of its long-term historical average by 7.6% in 2015. Los Angeles (+39.3%), Orange County (+31.5%) and Phoenix (+14.3%) each registered very strong activity during the year. Tenants were very active in Washington, DC (+82.2%) but much of this activity came from renewals and lease restructures, as well as companies capitalizing on record-level concessions. Houston, 62.6% Suburban Maryland, 67.7% Atlanta, 67.7% Raleigh/Durham, 70.0% San Francisco, 70.9% New York City, 85.2% Silicon Valley, 86.7% Tampa, 87.6% Dallas/Fort Worth, 89.4% San Diego, 90.5% Boston, 91.3% National Total, 92.4% Northern Virginia, 94.3% South Florida, 97.5% Suburban Philadelphia, 101.2% Philadelphia CBD, 102.9% Chicago Suburbs, 106.0% New Jersey, 106.5% Denver, 108.3% Chicago CBD, 112.5% Phoenix, 114.3% Orange County, 131.5% Los Angeles, 139.3% Washington, DC, 182.2% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0% 51 SAVILLS EFFECTIVE RENT INDEX 2016