Third Quarter: Northern Virginia Focuses on Development

Q3 2012 OFFICE NORTHERN VIRGINIA MARKET REPORT Third Quarter: Northern Virginia Focuses on Development Updated May 2012 MARKET INDICATIONS Q3 2012 Q4 2012 (p) VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE UPDATED SUMMARY STATISTICS Q3 2011 Q3 2012 VACANCY RATE: 14.5% 15.8% ABSORPTION YTD: (387,521) SF (846,268) SF DELIVERIES YTD: 298,137 SF 730,294 SF UNDER CONSTRUCTION: 2,639,728 SF 4,153,021 SF ASKING RENTS/SF: $30.03 $30.94 MARKET OVERVIEW Office activity in Northern Virginia followed the same holding pattern during the third quarter of 2012 as it did during the previous two quarters. With buzz words like sequestration and fiscal cliff in the news coupled with the impending presidential elections in November, businesses were hesitant to act until the future appeared more certain. As a result, the office market experienced little change. Office vacancy rose 40 basis points and closed at 15.8%, while net absorption was negative and leasing activity remained low, consistent with 2012 s YTD activity. Nevertheless, the industry continued to gear up for the next chapter in commercial real estate: walkable urbanism; evident through the large amount of development and variety in the area. Walkable urbanism refers to mixed-use development where users can live, work, and play within walking distance. Centered on the notions of efficiency, environmental consciousness, accessibility and community, this concept is based upon maximizing time, encouraging the use of public transportation, reducing traffic and pollution, designing dense transit-oriented neighborhoods and bringing people together a trend that parallels the rising popularity of open and collaborative office floor plans. Development for walkable urbanism has made way for many things, the first and most expensive being the Metro s multi-billion dollar Silver Line project. The initial phase to Reston is scheduled to deliver in 2013 and the second phase to Dulles was recently approved. Additionally, other Metro stations in the area have plans to be renovated, including the Crystal City and Clarendon stations. Walkable urbanism has also created its own micro-level, multi-family bubble, creating a high-level of demand for this type of development. As a result, the third quarter saw an increase of multifamily buildings being constructed in the area. Contracts for commercial construction continued to rise in Northern Virginia during the third quarter of 2012 and walkable urbanism dominated the blueprints. Several areas include Tysons Corner, Merrifield, Pentagon/Crystal Cities, One Loudoun, Reston Town Center and Rosslyn- Ballston Corridor. Two driving forces behind this new chapter were college students and success. College-educated residents wanted the option of urbanism and collaboration, and the most successful office markets in Northern Virginia, the Washington, DC region and elsewhere in the nation are walkable urban areas such as Reston Town Center, Rosslyn-Ballston Corridor, Washington, DC, New York City and San Francisco. www.colliers.com/washingtondc

Square Feet Percent Vacant Dollars Per SF ABSORPTION 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - (200,000) (400,000) (600,000) (800,000) VACANCY 20.0% 15.0% 10.0% 5.0% 0.0% RENTAL RATES $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Class A Class B Class C ECONOMIC OVERVIEW Due to the imminent political elections and possible Federal budget cuts, the District was uncertain and this impacted commercial real estate, especially in the office sector. Federal spending austerity meant that the GSA was reducing its leasing footprint and contractors, heavily reliant on the Federal procurement, were cutting their payrolls and returning office space in anticipation of shrinking funds. For example, Lockheed Martin s District-based office reported 740 cuts to its workforce. Northern Virginia has been the most heavily impacted by federal spending in the region. In Arlington and the I-395 corridors, vacancy rates increased as tenants gave back nearly 3 million square feet on the aggregate during the past year. Due to this uncertainty, 20 percent of businesses were seeking qualified applicants to hire within the next six months, down from 31 percent during the previous quarter, according to the Washington Business Journal. Sequestration was looming for big businesses and those contractors connected to government. While smaller to mid-sized businesses may not be heavily impacted, sequestration could cost the Washington, DC region as many as 450,000 jobs as a result of Federal spending cuts. According to the Federal Times, Virginia is slated to sustain the biggest lost. In addition, the banking and fiscal crisis in Europe created huge headwinds for the U.S. economy and global trade slowed as a result of uncertainty in Europe. However, in techheavy areas, both start-up and established companies were expanding rapidly during the third quarter. Arlington continued to attract a growing number of start-up tech companies, and data centers became an increasingly hotter trend in the Northern Virginia market. Currently, Northern Virginia is the secondlargest data center hub on the East Coast, coming in second behind New York. Virginia may be slated to lose the most jobs due to budget cuts that will affect the GSA and their contractors but, in the long-term, the government won t be the top industry in the region s economy, according to Stephen Fuller, public policy and regional development professor at George Mason University. Healthcare and education will pick up steam, as will hospitality, and Northern Virginia will continue to dominate the region s economy and recovery. The U.S. Conference of Mayors forecasted a growth rate of 2 percent in 2013 versus the nation s 1.8 percent. ABSORPTION Northern Virginia posted a modestly negative 391,466 SF of absorption during the third quarter of 2012. While the majority of submarkets remained relatively flat, the Merrifield submarket paced Northern Virginia with 104,612 SF of positive absorption. This was mainly due to healthcare giant INOVA moving into 50,000 SF at 8111 Gatehouse Road as well as Axiom occupying 22,500 SF at 2941 Fairview Park Drive. The most significant office lease in Northern Virginia during the quarter was Transaction Network Systems (TNS) at One Dulles Corridor (10740 Parkridge Boulevard). TNS leased 120,000 SF and will occupy more than 50 percent of the building. Also noteworthy is Raytheon s renewal of 115,000 SF at 1100 Wilson Boulevard in Rosslyn. VACANCY Total vacancy in Northern Virginia edged up 40 basis points to 15.8 percent during the third quarter, continuing the trend of remaining in the low-to-mid teens over the past three years. Prince William County experienced the most improvement during the third quarter as its vacancy rate decreased 1.3 percent to 13 percent. Loudoun County experienced a 40 basis-point drop to 16.7 percent partly due to Loudoun s attractiveness to IT companies, GSA contractors and data centers. RENTAL RATES The average rental rate continued its upward swing during the third quarter of 2012, finishing at its highest rate since year-end 2008. The overall asking rate averaged $30.94 per square foot, up from $30.78 during the second quarter and $30.49 in the first. Class A rental rates averaged $34.16 during the third quarter, up from $34.08 during the second quarter. Class B rents increased 22 cents to $29.42 from $29.20, and Class C rents increased seven cents to $24.77 from $24.70. s are expected to level off over the next 12 months as more vacant space floods the market. P. 2 COLLIERS INTERNATIONAL

DELIVERIES AND CONSTRUCTION There was 4 million square feet of office space under construction in Northern Virginia during the third quarter of 2012. The vast majority of construction happened in the RB Corridor, Tysons Corner, and Springfield submarkets. The RB Corridor is home to three properties comprised of 928,535 square feet collectively, or 30 percent of all office space under construction in Northern Virginia. Consisting of 718,535 square feet of combined space, 1812 N Moore Street and 1776 Wilson Boulevard were expected to deliver within the next 16 months. Rounding out the trio is 3001-3003 Washington Boulevard, which will add 280,000 SF when delivered in 2014. Fairfax County had 1.6 million square feet of office space under construction, the majority of which is in the Tysons Corner and Route 28 South submarkets. The Lerner Company broke ground on a 475,000 square foot building at 1775 Tysons Boulevard; it is expected to deliver during the first quarter of 2014. Tysons Tower, a 524,400 SF Macerich project at Tysons Corner Center, was also under construction at the end of the third quarter and is expected to deliver in 2014. More projects are scheduled to break ground within the next few years in anticipation of the Dulles Metrorail expansion. Three significant office buildings were delivered during the third quarter and an additional building was being prepared for delivery. A 240,565 SF office building located at 7770 Backlick Road in Springfield was designed to meet government security standards and is the first of four buildings delivering at Patriot Ridge, a 900,000 SF office park, within the next few years. One Mosaic, an urban retail development in Merrifield consisting of over 1.9 million square feet of retail, residential, hotel and office space, delivered its 72,531 SF of office space in the third quarter and has been eight percent leased. One Mosaic also has two parks and additional space for neighborhood festivals, performances and gatherings. Rosslyn s 1776 Wilson Boulevard is expected to deliver in the fourth quarter of 2012 and will add 138,535 SF of office space to the submarket. The five-story building was developed by Skanska and will have LEED Platinum status. NACD and CRDF have preleased this building for a combined total of 53,059 SF. At time of publication, the building has been 42 percent preleased by General Dynamics. OTHER DEVELOPMENT NEWS 1900 Crystal Drive, a property developed by Vornado, is slated to be just three feet shy of Arlington County s maximum height and was recently approved to begin construction. Fairfax County may revise zoning between Monument Drive and Legato Road with the intention of building a 275,000 SF building for the new Public Safety HQ (coming out of the Massey building). Construction is expected to begin in 2014. Developer The JBG Cos. was seeking approval to redevelop 2.2 acres of land for development of two buildings. Bounded by N. 20th Street on the north, N. Moore Street on the east, N. 19th Street on the south and Fort Myer Drive on the west, plans include construction of a 26-story mixeduse residential and hotel building and a 25-story office building. The courthouse office building at 2009 N. 14th Street in Arlington is poised for demolition. There will be a new 16-story, 254-unit apartment called the Tellus, 15,000 SF of office and retail space that could possibly be delivered by 2014 and the Chamber of Commerce is anticipated to move into the first-floor space of the building. The second phase of Metro s Silver Line, a multi-billion dollar project, has been approved while the first phase continued on schedule with projected delivery in 2013. Fairfax County Dulles Rail Project manager Mark Canale says the expansion to Dulles provides the potential for the ultimate buildout and development in addition to opportunity for stations in Tysons Corner and the Dulles Corridor. High Occupancy Toll (HOT) Lanes on I-495 are scheduled to be usable by the end of the year, which will help reduce commuter traffic. Also, the construction of streetcar lines approved for implementation in several areas, including two lines in Arlington County, will also help reduce transportation congestion and pollution, in addition to directly supporting the new trend of walkable urbanism and utilization of public transportation. SIGNIFICANT Q3 2012 DELIVERIES Building Property Address Submarket Building Size SF Lead Tenant 7770 Backlick Road Springfield/Burke 240,565 General Dynamics One Mosiac 2910 District Avenue Merrifield 72,531 N/A Discovery Center I 9385 Discovery Boulevard Route 29/I-66 Corridor 45,000 N/A P. 3 COLLIERS INTERNATIONAL

LOOKING FORWARD The greater Washington, DC commercial real estate market is in a state of uncertainty. Two upcoming factors are the uncertainty of the upcoming election and Federal budget cuts. When Federal agencies are unable to make long-term decisions, partially due to lack of bipartisanship, the market slows. Adding to the uncertainty are budget cuts that will continue to take place regardless of the election outcome; there is currently $1.2 trillion scheduled mandatory Federal budget cuts over the next 10 years, split between Defense and Non-Defense agencies. SIGNIFICANT Q3 2012 CONSTRUCTION PROJECTS Address Submarket Building SF Delivery Date Lead Tenant 1776 Wilson Boulevard Rosslyn-Ballston Corridor 138,535 Fall 2012 NACD, CRDF 1812 North Moore Street Rosslyn-Ballston Corridor 538,092 Fall 2013 N/A 1775 Tysons Boulevard Tysons Corner 476,000 Winter 2014 N/A 1400 Crystal Drive Crystal City 308,000 Spring 2013 N/A 8595 Leesburg Pike Tysons Corner 150,000 2013 N/A 7951 Loisdale Road Springfield/Burke 121,236 2013 N/A 3001-3003 Washington Boulevard (Phase 1) Rosslyn-Ballston Corridor 210,000 2014 Center for Naval Analyses 7900 Tysons One Place Tysons Tysons Corner 526,900 2014 N/A RECENT LEASE TRANSACTIONS Tenant Address Submarket Size SF Type TNS 10740 Parkridge Boulevard Reston 120,000 New Raytheon 1100 Wilson Boulevard Rosslyn-Ballston Corridor 115,000 Renewal NCI Info Systems 11730 Plaza America Drive Reston 78,466 Renewal RECENT SALES TRANSACTIONS Property Address Submarket Sale Price Size SF Price/SF Buyer Seller Loudoun Gate- 45195 Business Court Route 28 North $14,300,000 102,918 $139.00 BIT Systems LNR Property Corp Opus at Westfields 14700 Lee Road Route 28 South $11,200,000 84,652 $132.00 LNR Property Corp JPMorgan McLearen Center 13857 McLearen Route 28 South $49,500,000 202,075 $245.00 COPT Principal RE Investors Webb Building 4040 N Fairfax Drive RB Corridor $21,200,000 184,216 $115.00 Federal Capital RESI Management Presidential Tower 2511 Jefferson Davis Hwy Crystal City $48,200,000 383,524 $126.00 Beacon Capital Pearlmark RE Partners N/A 3023 Hamaker Court Merrifield $43,000,000 120,000 $358.00 Grosvenor Americas, The Long Companies Multi-Property 1940 & 2000 Duke Street Old Town Alexandria 377,296 $506.00 JPMorgan TIAA-CREF P. 4 COLLIERS INTERNATIONAL

ARLINGTON COUNTY NORTHERN VIRGINIA Q3 2012 EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION RENTS Submarket/Class Bldgs RBA Direct Sublease Total Total Prior Qtr Leasing Activity SF Net Absorption Current Qtr SF Net Absorption YTD Weighted Avg Asking Lease R-B CORRIDOR A 59 14,941,437 8.6% 2.2% 10.8% 10.4% 344,125 (45,581) 383,582 $45.02 B 44 7,196,889 16.2% 1.0% 17.2% 14.1% 37,313 (214,908) (262,630) $41.57 C 32 1,742,847 9.9% 0.6% 10.5% 13.8% 12,634 5,885 (23,407) $34.62 Subtotal 135 23,881,173 11.0% 1.7% 12.7% 12.7% 394,072 (254,604) 97,545 $42.77 CRYSTAL/PENTAGON CITIES A 16 5,156,638 16.7% 0.3% 17.1% 15.3% 26,003 (89,419) (267,132) $41.85 B 14 4,122,323 34.7% 0.4% 35.0% 33.7% 23,774 (57,166) (761,325) $39.30 C 18 3,774,281 7.6% 0.4% 8.0% 6.2% 9,561 (66,778) (69,089) $34.78 Subtotal 48 13,053,242 19.8% 0.4% 20.1% 18.5% 59,338 (213,363) (1,097,546) $39.78 ARLINGTON COUNTY A 75 20,098,075 10.7% 1.7% 12.4% 11.7% 370,128 (135,000) 116,450 $43.90 B 58 11,319,212 22.9% 0.8% 23.7% 21.2% 61,087 (272,074) (1,023,955) $40.45 C 50 5,517,128 8.3% 0.5% 8.8% 7.7% 22,195 (60,893) (92,496) $34.69 Subtotal 183 36,934,415 14.1% 1.2% 15.3% 14.0% 453,410 (467,967) (1,000,001) $41.50 ALEXANDRIA COUNTY OLD TOWN ALEXANDRIA A 35 3,602,163 16.8% 2.9% 19.6% 19.7% 35,724 3,049 16,854 $35.27 B 106 4,302,671 11.4% 0.9% 12.2% 11.8% 38,733 (18,603) (7,274) $29.73 C 56 1,242,669 5.5% 0.1% 5.5% 6.7% 18,165 14,318 5,246 $27.63 Subtotal 197 9,147,503 12.7% 1.5% 14.2% 14.2% 92,622 (1,236) 14,826 $32.43 EISENHOWER AVE/I-395 CORRIDOR A 25 7,570,204 20.1% 1.0% 21.1% 21.1% 106,107 3,212 (136,625) $32.96 B 47 5,424,478 21.8% 1.0% 22.8% 18.7% 49,505 (220,588) (456,533) $31.19 C 52 1,675,460 8.1% 0.0% 8.1% 7.8% 1,480 (5,305) 21,683 $22.69 Subtotal 124 14,670,142 19.3% 0.9% 20.2% 18.7% 157,092 (222,681) (571,475) $31.23 ALEXANDRIA A 60 11,172,367 19.0% 1.7% 20.6% 20.7% 141,831 6,261 (119,771) $34.03 B 153 9,727,149 13.9% 1.0% 18.1% 15.6% 88,238 (239,191) (463,807) $30.75 C 108 2,918,129 7.0% 0.3% 7.0% 7.3% 19,645 9,013 26,929 $24.44 Subtotal 321 23,817,645 16.8% 1.1% 17.9% 17.0% 249,714 (223,917) (556,649) $31.68 LOUDOUN & PRINCE WILLAIM COUNTIES ROUTE 28 NORTH A 45 5,460,869 17.5% 0.4% 17.9% 17.9% 14,822 5,435 (12,544) $25.43 B 78 3,633,879 20.1% 0.5% 20.6% 21.9% 23,935 44,442 55,463 $21.44 C 13 452,057 6.9% 0.0% 6.9% 6.9% 0 (83) (4,808) $18.18 Subtotal 136 9,546,805 18.0% 0.4% 18.4% 18.9% 38,757 49,794 38,111 $23.46 LOUDOUN COUNTY A 66 7,045,532 20.7% 0.3% 20.9% 21.0% 43,055 15,242 19,294 $25.96 B 143 7,515,413 13.8% 0.6% 14.4% 15.0% 45,300 45,463 91,078 $22.16 C 56 1,401,822 8.1% 0.0% 8.1% 8.5% 4,790 6,077 14,993 $20.71 Subtotal 265 15,962,767 16.3% 0.4% 16.7% 17.1% 93,145 66,782 125,365 $24.17 PRINCE WILLIAM COUNTY A 18 1,164,259 13.3% 1.1% 14.4% 18.9% 14,736 52,428 96,208 $25,82 B 72 2,420,551 14.4% 0.5% 14.9% 15.0% 2,200 1,973 (3,448) $22.56 C 82 1,881,305 9.7% 0.0% 9.7% 10.5% 7,994 14,845 31,326 $19.87 Subtotal 172 5,466,115 12.5% 0.5% 13.0% 14.3% 24,930 69,246 124,086 $22.66 P. 5 COLLIERS INTERNATIONAL

FAIRFAX COUNTY NORTHERN VIRGINIA Q3 2012 EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION RENTS Submarket/Class Bldgs RBA Direct Sublease Total Total Prior Qtr Leasing Activity SF Net Absorption Current Qtr SF Net Absorption YTD Weighted Avg Asking Lease ANNANDALE A 1 200,000 14.4% 0.9% 15.3% 15.3% 5,690 0 0 $25.70 B 8 381,964 14.0% 0.1% 14.1% 5.3% 9,400 (33,814) 74,658 $24.45 C 45 1,270,728 11.7% 0.0% 11.7% 9.3% 5,969 (30,425) (40,244) $22.43 Subtotal 54 1,852,692 12.4% 0.1% 12.6% 9.1% 21,059 (64,239) 34,414 $23.69 FAIRFAX A 28 4,412,999 8.9% 3.6% 12.5% 12.4% 24,505 (5,064) (25,051) $26.79 B 76 4,542,365 16.8% 0.5% 17.3% 17.1% 97,403 (9,591) 78,131 $24.22 C 89 2,488,141 6.9% 0.1% 6.9% 8.0% 30,936 25,797 23,326 $20.52 Subtotal 193 11,443,505 11.6% 1.6% 13.2% 13.3% 152,844 11,142 76,406 $24.99 FALLS CHURCH A 1 85,000 0.0% 0.0% 0.0% 0.0% 0 0 1,864 $28.50 B 20 1,280,712 9.8% 3.3% 13.1% 11.1% 3,603 (9,498) 15,514 $24.96 C 49 1,047,670 13.7% 0.5% 14.2% 14.1% 9,012 (1,574) (12,502) $20.58 Subtotal 70 2,413,382 11.1% 2.0% 13.1% 12.0% 12,615 (11,072) 4,876 $23.43 MCLEAN B 13 498,725 8.1% 0.0% 8.1% 6.0% 1,637 (10,718) 409 $33.15 C 47 1,063,695 6.3% 0.4% 6.7% 7.6% 18,576 10,092 12,702 $29.03 Subtotal 60 1,562,420 6.9% 0.2% 7.1% 7.1% 20,213 (626) 13,111 $30.57 HERNDON A 47 7,949,950 13.7% 1.1% 14.8% 14.1% 155,211 (54,870) (291,228) $29.83 B 51 3,201,866 13.8% 2.0% 15.7% 14.5% 33,939 (38,387) (37,107) $22.46 C 35 786,928 15.9% 0.0% 15.9% 16.1% 4,211 1,519 266 $20.41 Subtotal 133 11,938,744 13.9% 1.3% 15.1% 14.4% 193,361 (91,738) (328,069) $26.99 MERRIFIELD A 27 4,652,780 8.7% 1.0% 9.8% 9.4% 22,861 47,932 (16,525) $31.38 B 31 3,162,273 12.1% 0.9% 13.0% 14.8% 8,365 56,202 103,484 $28.78 C 44 1,281,554 9.0% 1.8% 10.8% 10.9% 3,862 478 (13,891) $25.74 Subtotal 102 9,096,607 9.9% 1.1% 11.0% 11.5% 35,088 104,612 73,068 $29.73 OAKTON A 3 396,771 30.7% 0.0% 30.7% 38.7% 7,666 31,686 84,162 $28.19 B 9 1,059,829 13.2% 0.5% 13.7% 13.4% 5,480 (3,716) (37,329) $25.94 C 7 131,336 2.7% 0.0% 2.7% 3.9% 1,739 1,514 4,009 $21.16 Subtotal 19 1,587,936 16.7% 0.3% 17.0% 18.9% 14,885 29,484 50,842 $26.76 RESTON A 61 10,812,778 15.3% 4.0% 19.3% 19.8% 207,408 58,018 (15,636) $30.16 B 72 5,838,804 15.9% 0.7% 16.6% 17.6% 127,819 55,971 135,783 $27.07 C 55 1,859,832 19.9% 0.1% 20.0% 15.8% 10,462 (78,942) (2,765) $22.46 Subtotal 188 18,511,414 16.0% 2.6% 18.5% 18.7% 345,689 35,047 117,382 $28.17 RT. 28 SOUTH (CHANTILLY) A 53 8,012,989 12.9% 0.2% 13.2% 13.4% 34,796 17,422 283,471 $28.51 B 68 4,188,801 20.0% 0.3% 20.3% 20.9% 40,180 23,767 12,962 $23.03 C 35 1,088,628 13.0% 6.2% 19.1% 18.0% 5,389 (12,452) 8,338 $17.98 Subtotal 156 13,290,418 15.2% 0.7% 15.9% 16.2% 80,265 28,737 304,771 $25.38 SPRINGFIELD A 13 2,005,810 19.7% 8.9% 28.6% 19.3% 17,750 6,565 157,352 $41.49 B 42 1,957,330 11.6% 0.4% 11.9% 12.9% 33,208 39,504 45,599 $24.79 C 81 2,519,373 11.7% 0.1% 11.8% 11.4% 8,534 (9,662) (4,514) $21.05 Subtotal 136 6,482,513 14.1% 2.9% 17.1% 14.1% 59,492 36,407 198,437 $27.79 TYSONS CORNER A 47 12,313,834 10.1% 1.8% 11.9% 12.1% 117,116 (16,888) 10,719 $36.76 B 104 13,245,622 17.6% 0.8% 18.4% 19.2% 305,269 101,666 (49,195) $27.48 C 41 2,474,841 24.4% 0.1% 24.5% 24.8% 2,218 (3,288) (50,084) $24.68 Subtotal 192 28,034,297 14.9% 1.2% 16.1% 16.6% 424,603 81,490 (88,560) $29.91 VIENNA A 1 189,000 0.0% 0.0% 0.0% 0.0% 0 0 0 - B 5 567,653 2.9% 0.0% 2.9% 3.1% 1,800 1,033 (7,510) $20.30 C 33 810,210 25.3% 0.0% 25.3% 25.7% 4,217 4,133 11,763 $23.81 Subtotal 39 1,566,863 14.1% 0.0% 14.1% 14.5% 6,017 5,146 4,253 $22.74 FAIRFAX COUNTY A 282 51,031,911 12.5% 2.3% 14.7% 14.5% 593,003 84,801 189,128 $31.20 B 499 39,925,944 15.8% 0.8% 16.6% 16.9% 668,103 172,419 335,399 $26.11 C 561 16,822,936 14.2% 0.6% 14.9% 14.4% 105,125-92,830-63,596 $22.31 Subtotal 1,342 107,780,791 14.0% 1.5% 15.4% 15.4% 1,366,231 164,390 460,931 $27.71 P. 6 COLLIERS INTERNATIONAL

NORTHERN VIRGINIA Q3 2012 EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION RENTS Submarket/Class Bldgs RBA Direct NORTHERN VIRGINIA CLASS A TOTALS Sublease Total Total Prior Qtr Leasing Activity SF Net Absorption Current Qtr SF Net Absorption YTD Weighted Avg Asking Lease Northern Virginia 501 90,512,144 13.5% 1.9% 15.4% 15.2% 1,162,753 23,732 301,309 $34.16 NORTHERN VIRGINIA CLASS B TOTALS Northern Virginia 925 70,908,269 16.8% 0.8% 17.6% 17.2% 864,928 (291,410) (1,064,733) $29.42 NORTHERN VIRGINIA CLASS C TOTALS Northern Virginia 857 28,541,320 11.7% 0.5% 12.2% 11.8% 159,749 (123,788) (82,844) $24.77 NORTHERN VIRGINIA CLASS A,B,C TOTALS Northern Virginia 2,283 189,961,733 14.5% 1.3% 15.8% 15.4% 2,187,430 (391,466) (846,268) $30.94 P. 7 COLLIERS INTERNATIONAL

DEFINITIONS OF KEY TERMS FOUND IN THIS REPORT Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Rentable Building Area (RBA): The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. This report tracks buildings with 10,000 square feet or more of speculative space. Includes competitive space in Class A, B and C single and multitenant buildings. Excludes buildings that were built with the intent to house only medical users and government owner-occupied buildings. Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted, Net Absorption includes direct and sublease space. Weighted Average Asking Rental s: Weighted by the total square feet available for direct lease. Data is based on Full Service Gross rents, and includes all costs associated with occupying the space, including taxes, insurance, maintenance, janitorial service and utilities. Reports on an annual per square foot basis. Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Inventory: Includes all existing multi- or single-tenant leased and owner-occupied office properties greater than or equal to 10,000 square feet (net rentable area). Does not include medical of government buildings. 512 offices in 61 countries on 6 continents United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 165 EMEA: 118 $1.8 billion in annual revenue 1,250 million square feet under management Over 12,300 professionals COLLIERS INTERNATIONAL NORTHERN VIRGINIA OFFICE: 8045 Leesburg Pike Suite 401 Vienna, VA 22182 TEL +1 703 394 4800 www.colliers.com/washingtondc RESEARCHER: PATRICK SCORAH TEL +1 703 394 4805 patrick.scorah@colliers.com Accelerating success.