Strengthening Market Fuels Investment Opportunities

Research & Forecast Report GREENVILLE, SC OFFICE Q3 2016 Strengthening Market Fuels Investment Opportunities Bryana Mistretta Research Coordinator South Carolina Key Takeaways >> Investment sale opportunities are strong with continued low interest rates and high occupancy and asking rental rates. >> Higher quality buildings are in higher demand causing a shift in tenants in many office buildings. >> Investment, development and leasing activity in Spartanburg is starting to take off. Investment Opportunities Strengthen Investment activity in Greenville is escalating as more institutional investors enter the market looking for steady and secure cash flow investments, due in part to the shift of investors from saturated and competitive primary markets to secondary and tertiary markets. High occupancy and asking rental rates are in turn creating a lowerrisk environment with opportunity for higher returns for local and outofmarket investors. Market Indicators Relative to prior period Q3 2016 Q4 2016 VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** Note: Construction is the change in Under Construction. *Projected **Rental rates for current quarter are for CBD. Rent forecast is for metrowide rents. Summary Statistics Q3 2016 Charleston Office Market Market CBD Suburban Vacancy Rate 15.3% 10.2% 18.3% Change From Q3 2015 400 700 80 Absorption 144 131 13 193 193 An office building has not sold in Greenville in three years and there are now five office buildings and a six building office park on the market. Competition in primary markets has driven institutional investors to look for investment opportunities in tertiary markets like Greenville, improving sale opportunities for building owners. (basis points) The properties for sale include multiple buildings in the Brookfield and Patewood office parks in the I385/I85 submarket and the Liberty Square Towers, Wells Fargo Center and Bank of America Building in the Central Business District. These buildings are providing outofmarket and local investors with a strong selection of quality, Class A and B, investable product and are expected to sell quickly. The buildings all have high occupancy rates and asking rental rates. The market average asking rental rate is $23.94 per square foot per year (PSF/YR) for Class A buildings, presenting potential buyers with the opportunity for a strong cash flow. (Thousand Square Feet) (Thousand Square Feet) New Construction (Million Square Feet) Under Construction Asking Rents Per Square Foot Per Year Market $19.33 Market Class A $23.94 Downtown Class A $26.92 Suburban Class A $21.48

FlightToQuality Shifting Tenant Mix The booming economy in Greenville driven by capital investments from companies in manufacturing and engineering industries has attracted new employers to the area over the last year including the Sioux Chief Manufacturing Headquarters, Brose North America and several call centers and customer service agencies. These companies are leasing Class A office spaces in downtown Greenville and several smaller tenants are following suit. Increased leasing activity in Class A space led to the absorption of nearly 194,000 square feet of Class A office space, three times the total absorption of 2015 for Class A space. Additionally, the vacancy rate for Class A office space fell to 8.9% at the end of the third quarter from 12.4% at the end of the previous quarter. As a result, landlords in Greenville are seeing a flighttoquality and a shift in the tenant mix of their office buildings. They are requiring longer leases and raising asking rental rates. Higher operational costs and rising costs for tenant improvements combined with overall electionrelated uncertainty has created a longer deal process, as negotiations between landlords and tenants become more complex. Activity in Spartanburg is Taking Off Over the last 10 years, $259 million in capital investment has poured into Spartanburg with another $67.4 million of capital investment projects planned for the coming years. Renovations to office, retail and residential buildings and streetscaping projects on many downtown roads are enhancing the appeal and walkability of downtown. Historically, the market has not been a viable option to employers due to its distance from residential developments in Greenville County and the lack of downtown amenities. According to the most recent data from the United States Census Bureau, 12% of Spartanburg County s population between 25 and 64 commute to Greenville County for work whereas 6% of Greenville County s working population commutes to Spartanburg County. The rapid improvements to the urban environment in downtown Spartanburg and its comparatively low cost to downtown Greenville makes the submarket an increasingly attractive alternative for employers in the region. > > Renovations at the Montgomery Building will add 72 new marketrate residential units, 10,000 square feet of office space and 9,000 square feet of streetlevel retail space. > > The new AC Hotel will add 120 rooms and include outdoor dining, a rooftop bar and meeting space, significantly enhancing the west side of downtown. > > A planned mixeduse development at the corner of West Main Street and Daniel Morgan Avenue will add 30 new apartment units and 3,000 square feet of streetlevel retail space. > > The planned construction of an office development on Liberty Street will add 50,000 square feet of downtown, Class A office space. Market Vacancy By Building Class 28.6% Market Vacancy 15.3% 8.9% Class A Class B Class C 21.7% Average Asking Rental Rates Market A B C $14.47 $16.90 $23.94 Average Asking Rental Rate Class A Space $19.00 Downtown I385/I85 Spartanburg $21.51 $26.92 2 South Carolina Research & Forecast Report Q3 2016 Greenville Office Colliers International

Q3 2016 Office Market Summary Statistics Greenville, SC MARKET CENTRAL BUSINESS DISTRICT BUILDINGS INVENTORY DIRECT VACANT SUBLEASE VACANT TOTAL VACANT TOTAL VACANCY RATE (%) NET ABSORPTION AVERAGE ASKING RENTAL RATE (SF/YR) Class A 23 2,310,167 231,944 231,944 10.0% 122,302 $26.92 Class B 14 1,084,658 99,600 99,600 9.2% 7,689 $20.27 Class C 6 187,306 33,290 33,290 17.8% 1,450 $14.86 CBD Total 43 3,582,131 364,834 364,834 10.2% 131,441 $24.03 I385/I85 Class A 32 2,606,280 245,189 245,189 9.4% 58,668 $21.51 Class B 34 2,057,553 514,674 514,674 25.0% 33,701 $16.64 Class C 11 344,242 78,132 78,132 22.7% 16,385 $14.23 I385/85 Total 77 5,008,075 837,995 837,995 16.7% 8,582 $17.94 SPARTANBURG Class A 8 500,681 2,944 2,944 0.6% 13,010 $19.00 Class B 12 692,327 219,440 219,440 31.7% 8,593 $14.83 Class C 7 227,692 105,387 105,387 46.3% $15.45 Spartanburg Total 27 1,420,700 327,771 327,771 23.1% 4,417 $14.98 SUBURBAN TOTAL Class A 40 3,106,961 248,133 248,133 8.0% 71,678 $21.48 Class B 46 2,749,880 734,114 734,114 26.7% 42,294 $16.35 Class C 18 571,934 183,519 183,519 32.1% 16,385 $14.33 Suburban Total 104 6,428,775 1,165,766 1,165,766 18.1% 12,999 $17.62 MARKET Class A 63 5,417,128 480,077 480,077 8.9% 193,980 $23.94 Class B 60 3,834,538 833,714 833,714 21.7% 34,605 $16.90 Class C 24 759,240 216,809 216,809 28.6% 14,935 $14.47 Market Total 147 10,010,906 1,530,600 1,530,600 15.3% 144,440 $19.33 Market Conditions The Greenville/Spartanburg office market ended the third quarter with 144,400 square feet of absorption. The market vacancy rate has followed a downward trend for four consecutive quarters, decreasing from 18.4% in the third quarter of 2015 to 15.3% at the end of this quarter. The average asking rental rate was $19.33 PSF/ YR, up from $18.22 PSF/YR a year ago. Strong leasing activity in Greenville s CBD led to the absorption of 122,300 square feet of office space. The vacancy rate for downtown was 10.2% at the end of the third quarter, down from 13.9% the previous quarter. Quick absorption of space downtown, particularly Class A, has also caused a rise in Class A asking rental rates to an average of $26.92 PSF/YR. Robust activity and flighttoquality will continue to increase the occupancy and average asking rental rates in the central business district. The I385/I85 submarket was the most active suburban submarket ending the third quarter with a vacancy rate of 16.9%. Class A office space in this submarket saw significant leasing activity, decreasing the vacancy rate from 11.7% at the end of the second quarter to 9.4% at the end of this quarter. Additionally, the average asking rental rate for Class A space at the end of the third quarter was at a historical high of $21.51 PSF/YR. Increased development in the Spartanburg submarket and robust leasing activity are evident in the Class A vacancy rates for the submarket. Class A office space in the Spartanburg submarket ended the third quarter with a vacancy rate of 0.6%, down from 3.2% last quarter and 5.5% at the start of 2016. New construction planned for the submarket is expected to lease quickly and bring more opportunities to employers looking for office space. 3 South Carolina Research & Forecast Report Q3 2016 Greenville Office Colliers International

Construction Pipeline Construction remains visible along the downtown Greenville skyline as another project begins construction. New construction will add a significant amount of large, Class A, downtown office space for new and existing employers in the Greenville market. Under Construction > > Falls Park Place, a 40,000 squarefoot mixeduse project overlooking Falls Park, is set to deliver in January of 2017. The building will include 12,000 square feet of Class A office space which is fully preleased. > > The Erwin Penland building, at 110 E Court Street, is still under construction. The 125,000 squarefoot, Class A office building is expected to deliver in January 2017. Erwin Penland will occupy two floors in the new building which is now 82.4% preleased. > > Construction of the new, 28,000 squarefoot, Greenville News office building at the Camperdown redevelopment site has begun. The mixeduse development will include 150,000 square feet of office space, a 140room Marriottbranded AC Hotel, 170 marketrate apartment units and 80,000 square feet of retail space. OfficeUsing Employment Officeusing employment, those jobs related to the professional and business services, financial activities, and information sectors are growing within the GreenvilleSpartanburg Metropolitan Statistical Area (MSA). According to the most recent July 2016 data from the Bureau of Labor Statistics, there has been a decrease of 100 officeusing jobs over the last 12 months. Employment in the financial activities sector has shown an uptick in jobs, increasing by 200 jobs whereas the information sector has remained at 7,300 jobs over the same time period. Although office using employment has slightly decreased, nonfarm employment in Greenville has increased by 5,600 jobs over the last year, a 1.4% increase. Office Using Employment GreenvilleAnderson Mauldin, MSA Number of Jobs Added 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 500 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 98.0 96.0 94.0 92.0 90.0 88.0 86.0 84.0 Office Using Employment (Thousands) Source: Bureau of Labor Statistics, St. Louis Federal Reserve, Colliers International Significant Transactions Flighttoquality spaces in Greenville led to significant transactions in Class A office buildings around the market. > > Greenville Health System leased 14,500 square feet in the Suntrust Building located at 300 E McBee Street in downtown Greenville. > > 33,700 square feet were leased at 750 Brookfield Parkway, a suburban office building in the I385/I85 submarket. > > Patriot National leased 21,200 square feet at 80 International Drive in the Patewood Office Park in the I385/I85 submarket. > > Duke Food Productions signed a lease this quarter to move their headquarters to a 12,000 squarefoot space in Falls Park Place. Greenville News Rendering Falls Park Place Rendering Source: GreenvilleOnline Source: GreenvilleOnline 4 South Carolina Research & Forecast Report Q3 2016 Greenville Office Colliers International

Market Forecast Rising asking rental rates and occupancy rates in the Greenville market are expected to promote further investment sale activity from outofmarket investors over the coming quarters. The delivery of the three office buildings currently under construction will impact the tenant mix of downtown office buildings as new tenants move to the market and existing tenants continue to search for higher quality spaces. Spartanburg will be the area to watch as several new developments are moving through the pipeline and employers and residents start taking notice. Around South Carolina Office markets across the state are seeing new developments and are increasingly attractive to outofmarket investors. Charleston, South Carolina Nearly 600,000 square feet of office space are under construction throughout the Charleston market. Increasing land prices and construction costs are influencing developers to incorporate a mix of retail, office and residential space as well as build vertically. These mixeduse projects allow more on less land and increase Charleston s walkability. Projects currently under construction include Courier Square, 101 Coleman Boulevard, 349 Coleman Boulevard, Blackbaud s new campus and the Comcast Center of Excellence. Another 400,000 square feet of office space are planned for a master planned mixeduse community, Launch. > > Rushmark Properties is in the process of constructing a master planned office park in Upper North Charleston along the I526 corridor. Once completed there will be four, 100,000 squarefoot office buildings and three hotels. The development will provide tenants and guests ease of access to I26 via I526 and the Charleston International Airport. Columbia, South Carolina The trend increases the walkability and desirability of working and living in downtown areas. Several of the office towers along Main Street in Columbia have already converted these spaces and new office towers are oftentimes built with the first floor dedicated to retail or restaurant space. The First Citizens Bank, Certus Bank, Synovus Bank and Capital Bank buildings are among those choosing to convert these spaces, welcoming coffee houses, nationally and locally owned restaurants, and boutique style shops. > > The trend is extending outside of Main Street to 2801 Devine Street, the 32,000 squarefoot former Aflac office building. The building is being renovated to include retail space on the streetlevel and two floors of traditional office space above. The building is already 50% preleased by a law firm and engineering firm and will be ready for occupancy by the end of the year. 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 COMMERCIAL REAL ESTATE GROWTH CYCLE PHASE 2: EXPANSION PHASE 3: HYPERSUPPLY Launch Office Building Rendering Source: Rushmark Properties Devine Station Rendering For more statewide commercial real estate news check out our market reports at: www.colliers.com/southcarolina/insights Sources: Devine Station, LLC 5 South Carolina Research & Forecast Report Q3 2016 Greenville Office Colliers International

502 offices in 67 countries on 6 continents United States: 140 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 108 FOR MORE INFORMATION: David Feild, CCIM Market President Greenville +1 864 527 5428 David.Feild@colliers.com Liz H. McCary Director of Marketing South Carolina +1 803 401 4269 Liz.McCary@colliers.com Bryana Mistretta Research Coordinator South Carolina +1 803 401 4252 Bryana.Mistretta@colliers.com $2.5 billion in annual revenue 2 billion square feet under management 16,000 professionals and staff 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 16,300 professionals operating from 502 offices in 67 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. colliers.com Copyright 2015 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.