GSA office market is primed for new major tenants

Research & Forecast Report GREENVILLE SPARTANBURG ANDERSON SOUTH CAROLINA OFFICE Q1 2018 GSA office market is primed for new major tenants Crystal Baker Research Coordinator South Carolina Key Takeaways > > Greenville has large blocks of space available and a thriving business environment; perfect for a headquarters location. > > Rental rates must increase before more construction is viable. Headquarters locale Businesses searching for a new headquarters location will find Greenville-Spartanburg-Anderson to be an advantageous spot to land. A city is attractive to a relocating business when it is comprised of important factors such as: a location convenient for building a business and providing an incentive to move; a positive business climate and expanding economy; employment growth with a skilled workforce; and livability. Greenville encompasses all of these elements. Greenville is located halfway between Charlotte, NC and Atlanta, GA with expedient access to I-385 and I-85. Also, the Greenville- Spartanburg International Airport allows for ease of travel by providing convenient access into and out of the city. There are currently top global companies such as Michelin, BMW and GE within the Greenville-Spartanburg-Anderson area, and it continues to gain new investor and employer interest due to the increased global trade growth. Also, the accessibility to Greenville will allow both international and national businesses to further enrich the Greenville economy. The inland port in Greer and the port expansion in Charleston, railway access and an international airport provide enhanced access to clientele which, without these attributes, may previously have been difficult to conduct business with. In addition to a positive business climate and global access to clientele, there are several large blocks of office space available in Greenville to accommodate various tenant size needs and amenity preferences. Axis Office Park has 228,000 square feet available within two buildings, and 125 Parkway has 60,000 square feet available. There are two properties which, in addition to having large blocks of available space, are also furnished: 200 Verdae has 70,600 square feet available and 2 West Washington in downtown Market Indicators Relative to prior period VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** Summary Statistics Q1 2018 Greenville Office Market Market CBD Suburban Vacancy Rate 12.13% 10.68% 12.69% Change From Q4 2017 (basis points) Absorption (Thousand Square Feet) New Construction* (Thousand Square Feet) Under Construction (Thousand Square Feet) *New construction is buildings delivered Asking Rents Per Square Foot Per Year Q1 2018 Q2 2018* Note: Construction is the change in Under Construction. *Projected **Rental rates for current quarter are for CBD. Rent forecast is for metro-wide rents. 228-347 452-260.5 163-423.5 10.5-10.5 143 60 83 Overall $20.66 $25.03 $19.24 Change From Q1 2017 7.83% 2.12% 12.32% Class A $23.09 $26.66 $21.81 Change From Q1 2017-0.99% 0% 4.50%

Greenville has 60,000 square feet to lease. Furthermore, some of the vacant spaces have been empty for a while, and therefore landlords may be more apt to add amenities to the available space or offer lease incentives or moving allowances to fit the needs of a the relocating business. The Greenville-Spartanburg-Anderson market has a positive business climate, with an expanding job market and a lower cost of living than the national U.S. average. During the period from December 2016 through December 2017, there were 2,100 officeusing jobs added within the Greenville-Spartanburg-Anderson area, an annual increase of 1.8%. As of the most recent reports, office-using jobs total 119,100 and the total non-farm employment totals 572,000. As the opportunity for employment grows, so does the need for skilled employees. Within the Greenville area, there are several higher education institutions to provide workforce training, such as: Furman University, North Greenville University, Bob Jones University, the University of South Carolina Upstate and Greenville Technical College. Anderson University and Clemson University are also are in close proximity. The region has received accolades over the years for its livability, business climate and regional attractions. Ranked #2 by Xome 2016 as the Best City in America to Start a Business and #3 by Livability for 2016 Top 10 Downtowns, Greenville is no stranger to new businesses and residents. This vibrant city, located at the foothills of the Blue Ridge Mountains, has tree-lined downtown walkways, beautiful waterfalls, sidewalk cafes and over 100 unique restaurants in a 10-block area. In addition to leaving a fabulous first impression, Greenville is home to several parks offering hiking and biking areas, an impressive art scene with numerous art galleries, shopping, a theater for plays and concerts, and many museums. Therefore, in addition to Greenville s convenient location for relocation within an environment primed for business expansion and workforce readiness, Greenville is fun and a perfect headquarters location. Market Conditions The Greenville-Spartanburg-Anderson overall market vacancy rate was 12.15% during the first quarter of 2018, and the annual market absorption was 104,036 square feet. A large portion of that absorption is due to the active Spartanburg market, where 165,145 square feet was absorbed over the past year. The Greenville- Spartanburg-Anderson rental rates continue to rise; the average overall full service market rental rate for the GSA market is $20.66 per square foot, which is a bit higher from the rental rate of $19.16 per square foot during the first quarter of 2017. Central Business District (CBD) Conditions The Central Business District average rent dipped a bit during the first quarter of 2018 compared to the rates at the end of last year; however, as space continues to lease, rates will rise. The Central Business District average full service weighted rental rate for office space is $25.03 per square foot, down slightly from $25.51 per square foot during the fourth quarter of last year. Class A office space followed the same trend, with a rental rate of $26.66 per square foot during this quarter compared to $26.99 per square foot at the end of last year. While the Central Business District added 13,403 square feet of direct vacancy this quarter, the sublease vacancy was decreased by 176,411 square feet. The vacancy rate in the Central Business District dropped from 14.15% during the fourth quarter of 2017 down to 10.68% this quarter. Approximately 10,760 square feet of office sublease space remains within the Central Business District; therefore, lower priced sublease options are limited and the CBD market rental rates will be expected to rise as the remainder of the sublease space is absorbed. Greenville Attractions Shopping Haywood Mall Magnolia Park Parks Falls Park on the Reedy GHS Swamp Rabbit Trail Runway Park at GMU Paris Mountain State Park The Arts Peace Center Centre Stage Popular Restaurants Halls Chophouse Larkin s on the River Smoke on the Water Soby s Crepe du Jour The Lost Cajun The Anchorage Bacon Bros Public House Local Breweries The Brewery Experience Dark Corner Distillery Quest Brewing Company Brewery 85 Thomas Creek Brewery McPherson Park Cleveland Park Museums Bob Jones University Museum & Gallery The Children s Museum of the Upstate Museum and Library of Confederate History Upcountry History Museum Greenville County Museum of Art The Shoppes at Greenridge TD Saturday Farmer s Market Children s Garden at Linky Stone Park Greenville Little Theater Warehouse Theater Sully s Steamers Ruth s Chris Steak House Rick Erwin s Nantucket Seafood Pomegranate on Main The Lazy Goat Pita House Wine Cafe at Northhampton Wines Willy Taco Feed & Seed Source: Greenville Chamber of Commerce, TripAdvisor, Colliers International 2 South Carolina Research & Forecast Report Q1 2018 Greenville-Spartanburg-Anderson Office Colliers International

Suburban Conditions Axis Office Park Rendering Greenville, South Carolina The suburban average office full-service market rental rates are 5.95% higher this quarter than they were at the end of last year; the rent is currently $19.24 per square foot. Similarly, Class A rents have also increased from $20.89 per square foot during the fourth quarter of 2017 to $21.81 per square foot this quarter. The suburban market vacancy rate is currently 15.52%; 703,258 square feet of the office space availability is within the largest office submarket I-385/I-85. The suburban office market posted an annual net absorption of 69,144 square feet; however, over the last quarter, the suburban markets posted a net negative absorption of 423,567 square feet. Significant Transactions This quarter there were 15 sale transactions, according to CoStar, the majority of which were buildings under 10,000 square feet. CoStar reported 52 leases signed, and most of the leases were under 3,000 square feet. Sales > > Legacy Square Hollingsworth Park at Verdae, located at 340 Rocky Slope Road in Greenville, was sold for $4.6 million. This 20,361-square-foot building is comprised of Class A office space and first floor retail space. Source: Colliers International 100 Dunbar Street Spartanburg, South Carolina > > The Zerek Building, located at 500 East North Street, is a 9,292-square-foot office building that sold for $850,000. Leases > > A 18,578-square-foot renewal was executed at 101 E. Washington Street. Source: CoStar Regional Demographics Greenville-Spartanburg-Anderson Population 2010: 1,137,380 (Census) 2017: 1,231,377 (ESRI estimate) 2022: 1,300,179 (ESRI forecast) Households 2010: 442,333 (Census) 2017: 476,468 (ESRI estimate) 2022: 502,205 (ESRI forecast) Race & Ethnicity Caucasian: 73.9% African American: 17.5% Hispanic Origin: 7.5% Educational Attainment (2017 Population 25+ ESRI Estimate) No High School Diploma: 15% High School Graduate: 29% Some College: 30% Bachelor s Graduate Professional Degree: 27% Source: ESRI Demographics, Colliers International Research Household Income Average: 2017: $65,463 (ESRI estimate) 2022: $75,527 (ESRI forecast) Median: 2016: $48,825 (ESRI estimate) 2021: $55,303 (ESRI forecast) Age (2017 ESRI Estimate) 20-34: 243,701 (19.7%) 35-64: 478,560 (38.8%) 65+: 200,327 (16.2%) 3 South Carolina Research & Forecast Report Q1 2018 Greenville-Spartanburg-Anderson Office Colliers International

Construction Pipeline Construction activity remains active in the Greenville market. According to Costar, the area has 143,057 square feet currently under construction. Under Construction > > A 60,000-square-foot Class B office building is under construction and is expected to deliver at the end of this year. > > A 26,567-square-foot Class A office building is under construction at 615 Congaree Road and is expected to deliver around May of 2018. > > 485 North Main Street in Mauldin is the location of a 18,333-square-foot Class B office building expected to deliver in July of 2018. > > A 14,000-square-foot Class B office building is under construction in Greer at 411 Industrial Court. > > 110 North Markley Street has a projected completion date of December of 2018 and will be a 12,717-square-foot, Class B mixed-use office/residential building in Greenville. > > 805 Spartan Boulevard is the site of an 11,440-square-foot Class B office building in Spartanburg. Completion > > A 10,500-square-foot Class B office building recently completed at 1030 E Butler Road in Greenville and is currently 100% leased. Office-Using Employment Office-using employment, those jobs related to the professional and business services, financial activities and information sectors, is growing within the combined Greenville-Spartanburg-Anderson Combined Statistical Area (CSA). According to the most recent December 2017 data from the Bureau of Labor Statistics, there has been an increase of 2,100 office-using jobs over the last 12 months, which is a 1.8% annual increase. Non-farm employment in Greenville-Spartanburg-Anderson market has increased by 9,200 jobs over the last year. Market Forecast Going forward, tenants will still have negotiating power regarding their current rent or new lease price points and space options due to the large blocks of available space; however, landlords will also be able to draw new tenants to the Greenville-Spartanburg-Anderson market by offering relocation incentives, leasing options and upgrading dated common areas within buildings where the largest chunks of square feet are located. The large blocks of available space will deter the immediate need for new construction, and with rising construction costs and newly imposed tariffs increasing the cost of construction materials, the increase of the Greenville-Spartanburg-Anderson market rent is necessary before new construction is foreseeable. Office-Using Employment Greenville-Spartanburg-Anderson, MSAs Office-Using Jobs Added Over 12 Months 6,400 5,400 4,400 3,400 2,400 1,400 400-600 -1,600 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Jobs Added Apr-15 Aug-15 Dec-15 Apr-16 Total Employment Source: Bureau of Labor Statistics, Colliers International Wells Fargo Center Greenville, South Carolina Source: Colliers International Commercial Real Estate Growth Cycle: Where the market stands and where it is going NEW CONSTRUCTION RENTAL RATE EMPLOYMENT OCCUPANCY PHASE 4: RECESSION PHASE 1: RECOVERY Aug-16 COMMERCIAL REAL ESTATE GROWTH CYCLE Dec-16 Apr-17 Aug-17 PHASE 2: EXPANSION PHASE 3: HYPERSUPPLY Dec-17 570 560 550 540 530 520 510 500 490 480 470 Total Non-Farm Employment (Thousands) 4 South Carolina Research & Forecast Report Q1 2018 Charleston Office Colliers International

Q1 2018 Office Market Summary Statistics MARKET ANDERSON COUNTY BUILDINGS INVENTORY DIRECT VACANT SUBLEASE VACANT TOTAL VACANT TOTAL VACANCY RATE (%) NET ABSORPTION AVERAGE ASKING RENTAL RATE (SF/YR) Class A 4 102,403 10,464-10,464 10.22% 3,536 $10.94 Class B 11 145,863 4,046 2,963 7,009 4.81% -2,963 - Class C 15 199,009 5,520-5,520 2.77% 1,589 $9.78 Anderson County Total 30 447,275 20,030 2,963 22,993 5.14% 2,162 $10.65 CENTRAL BUSINESS DISTRICT Class A 28 2,431,874 286,910 9,260 296,170 12.18% 167,708 $26.66 Class B 36 1,799,008 162,417 1,500 163,917 9.11% 92 $23.90 Class C 20 465,993 41,668-41,668 8.94% -4,792 $17.62 CBD Total 84 4,696,875 490,995 10,760 501,755 10.68% 163,008 $25.03 I-385/I-85 Class A 54 4,157,097 637,528 65,730 703,258 16.92% -223,126 $22.00 Class B 88 3,071,063 372,083 65,704 437,787 14.26% -81,848 $17.70 Class C 74 1,765,778 227,141 2,000 229,141 12.98% -64,635 $14.50 I-385/85 Total 216 8,993,938 1,236,752 133,434 1,370,186 15.23% -369,609 $19.68 PICKENS COUNTY Class A 4 84,213 - - - - - - Class B 5 90,600 24,854-24,854 27.43% -24,854 $10.83 Class C 5 54,338 15,091-15,091 27.77% 5,091 - Pickens County Total 14 299,151 39,945-39,945 17.43% -29,945 $10.83 SPARTANBURG COUNTY Class A 9 464,941 17,452 14,980 32,432 6.98% -8,805 - Class B 24 1,066,552 57,714-57,714 5.41% -2,001 $14.49 Class C 30 1,021,094 28,000-28,000 2.74% -15,369 $15.15 Spartanburg County Total 63 2,552,587 103,166 14,980 118,146 4.63% -26,175 $14.68 SUBURBAN MARKETS TOTAL Class A 71 4,808,654 665,444 80,710 746,154 15.52% -228,395 $21.81 Class B 128 4,374,078 458,697 68,667 527,364 12.06% -111,666 $16.90 Class C 124 3,040,219 275,752 2,000 277,752 9.14% -83,506 $14.45 Suburban Total 323 12,222,951 1,399,893 151,377 1,551,270 12.69% -423,567 $19.24 MARKET TOTAL Class A 99 7,240,528 952,354 89,970 1,042,324 14.40% -60,687 $23.09 Class B 164 6,173,086 621,114 70,167 691,281 11.20% -111,574 $18.68 Class C 144 3,506,212 317,420 2,000 319,420 9.11% -88,298 $14.93 Market Total 407 16,919,826 1,890,888 162,137 2,053,025 12.13% -260,559 $20.66 In January 2018, Colliers International benchmarked its office data set for South Carolina. The new standard includes: all office buildings 10,000 square feet or larger, except medical office and government-owned buildings; all single tenant office buildings; buildings in an expanded geography; data for all quarters beginning in Q4 2008; and excluding office condominiums. In addition, the submarkets are separated by class levels A, B and C (A being the highest quality space and C being of lesser quality), and are also divided into 2 divisions: Central Business District (CBD) and Suburban. The Central Business District submarket consists of a highly-populated business area with infrastructure and an office building/high-rise environment, which is often accompanied by heavy daytime foot traffic. A Suburban submarket is an area or town existing as a mixed-use community within commuting distance of a larger city. Due to the adjustments of the building inventory, comparison of data included in previously published market reports should be avoided. 5 South Carolina Research & Forecast Report Q1 2018 Greenville-Spartanburg-Anderson Office Colliers International

400 offices in 69 countries on 6 continents $2.7 billion in annual revenue 2 billion square feet under management 15,400 professionals and staff FOR MORE INFORMATION: David Feild, CCIM Market President Greenville +1 864 527 5428 David.Feild@colliers.com Liz H. McCary Vice President, Marketing South Carolina +1 803 401 4269 Liz.McCary@colliers.com Crystal Baker Research Coordinator South Carolina +1 803 401 4230 Crystal.Baker@colliers.com GREENVILLE OFFICE PROFESSIONALS: Brantley Anderson Brokerage Associate +1 864 527 5440 Brantley.Anderson@colliers.com Taylor Allen Brokerage Associate +1 864 527 5423 Taylor.Allen@colliers.com Colliers International Greenville 55 E. Camperdown Way, Suite 200 Greenville, South Carolina USA +1 864 297 4950 About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 15,000 professionals operating from 396 offices in 68 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 10 consecutive years, more than any other real estate services firm. For the latest news from Colliers International, visit Colliers.com or follow us on Twitter (@ColliersIntl) and LinkedIn. www2.colliers.com Copyright 2018 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.