4th Quarter 2013

U.S. Of ce Trends Report

2 | Cassidy Turley

Contents

U.S. Of ce Sector Analysis........................................................................3-4

Investment Sales.........................................................................................5

Net Absorption by Metro............................................................................6-7

Vacancy Rates by Metro.............................................................................8-9

Asking Rents by Metro...........................................................................10-11

Inventory by Metro................................................................................12-13

Methodology..............................................................................................14

Jennifer EdwardsResearch Manager2101 L Street, NW, Ste. 700Washington, DC 20037Jennifer.Edwards@cassidyturley.com

Kevin ThorpeChief Economist2101 L Street, NW, Ste. 700Washington, DC 20037Kevin.Thorpe@cassidyturley.com

cassidyturley.com | 3

Economy

The U.S. economy shook off Octobers 16-day partial government shutdown and nished 2013 on a surprisingly strong note. Real GDP growth registered a healthy 4.1% in the third quarter of the year, and the latest data on business and consumer spending indicates GDP growth will again exceed 3% in the fourth quarter. Remember that GDP growth has averaged just a tick above 2% during most of this economic recovery, so the latest trends do represent a signi cant acceleration. On the jobs front, the latest data was also mostly good news. Despite a weak December 2013 job growth gure (likely an anomaly caused by unseasonably cold winter weather and one that is likely to be revised upwards next month), the U.S. economy created 2.2 million net new jobs in 2013. The unemployment rate declined from 7.9% at the beginning of the year to 6.7% at the end. Vital to the commercial real estate sector, of ce-using employment continues to accelerate. The U.S. created 721,000 of ce-using jobs in 2013, up from 696,000 in 2012 and 570,000 in 2011. That said, it is worth noting that law rms, key of ce tenants in most major metros, continued to cut jobs in 2013 (a net decline of 1,300). But other job sectors such as professional and business services, energy, tech, and media remained in growth mode. The ADP survey revealed that job growth was broad-based across all industry sizes. Small businesses (with 1-49 employees) led the way, adding 835,000 nonfarm payrolls in 2013. Medium-sized companies (50-499) added 535,000 jobs, and large businesses (500+) added 498,000 jobs.

We also got a small dose of positive news, or at least, less terrible news, on the policy side of things. The Congress reached a budget deal in December of 2013 - the Bipartisan Budget Act of 2013 - that will effectively keep the federal government funded through the fall of 2015. Although the deal did not address the long-term de cit challenges from ballooning entitlement programs, the accord did eliminate a portion of the sequestration cuts that were scheduled to occur in 2014 and 2015. As a result, scal policy (i.e., higher taxes and spending cuts which knocked 1.5 percentage points off of real GDP growth in 2013), will restrain growth in 2014 by an estimated 0.3% - far less of drag.

Of ce Sector

Taking its cue from the economy, the U.S. of ce sector also picked up steam towards the end of the year. In the fourth quarter of 2013, U.S. of ce markets absorbed 15.6 million square feet (msf), up from the 15.3 msf absorbed in the third quarter. In total, the U.S. absorbed 51.6 msf of of ce space in 2013, slightly higher than the 50.1 msf absorbed in 2012. Vacancy rates in the fourth quarter fell 20 basis points (bps) to 15.1%. Vacancy is currently 220 bps lower than its recessionary-peak of 17.3%, but remains 120 bps higher than its historical average.

Although the market fundamentals continue to slowly tighten, this is occurring at a much slower rate than in past recoveries. Job growth is no longer the issue. For instance, of ce-using job growth in 2013 was roughly the same as job growth in 2005 (real estate boom year), but net absorption in 2013 was 37 msf less. With another year of data under our belts, it is clear to see that the subpar demand in the current recovery directly re ects a shift in the way businesses are utilizing space (e.g., more people in less space, shared workstations, encouraging telecommuting). In our view, this is a trend that will continue into the foreseeable future, and one which will keep net growth in the of ce sector well below what one would normally expect during a recovery.

Of ce cont.

U.S. Of ce Sector Analysis

U.S. Net Absorption vs. Vacancy

Source: Cassidy Turley ResearchSource: Cassidy Turley Research

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

6.5

7.5

New

Yor

kDa

llas

Hou

ston

San

Jose

-Sili

con

Atla

nta

Denv

erBo

ston

-Cam

brid

geSe

attle

Char

lotte

Chic

ago

Phoe

nix

Sacr

amen

toSa

n Fr

anci

sco

Cent

ral N

JBa

ltim

ore

Rale

igh

Min

neap

olis

Tam

paSa

n Di

ego

Sain

t Lou

isOr

ange

Cou

nty

Was

hing

ton,

DC

Indi

anap

olis

Kans

as C

ityN

orth

ern

NJ

Loui

svill

eM

ilwau

kee

Cinc

inna

tiDa

yton

Subu

rban

MD

San

Mat

eo C

ount

yCo

lum

bus

Nas

hvill

eOa

klan

d-Ea

st B

aySu

burb

an V

ALo

s An

gele

s

(msf

)

15.0%

15.5%

16.0%

16.5%

0

4

8

12

16

20

24

Q4

11

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Vaca

ncy

Rat

e

(msf

)

Absorption Vacancy Rate

Market Indicators4th Quarter 2013

Net Absorption 15.6M

Asking Rents $22.00

Vacancy

Under Construction

15.1%

57.1M

20134Q

Trend(from previous Qtr)

Net Absorption, Selected Markets 2013

4 | Cassidy Turley

Asking RentsSelect Markets, Avg. Rent 2013

New York, NY $63.20 9.5%

Washington, DC $49.40 -0.8%

San Francisco, CA $49.16 11.4%

San Mateo County, CA $42.06 4.9%

Suburban VA $31.59 0.3%

Los Angeles, CA $30.87 3.3%

San Diego, CA $29.97 4.3%

Boston-Cambridge, MA $29.93 -1.1%

San Jose-Silicon Valley, CA $29.68 7.3%

Suburban MD $26.58 0.6%

Houston, TX $25.19 2.3%

Northern NJ $24.90 0.5%

Orange County, CA $23.83 1.4%

Minneapolis, MN $23.71 -3.7%

Central NJ $23.66 -1.2%

Baltimore, MD $22.62 3.4%

Denver, CO $21.80 7.8%

Oakland-East Bay, CA $21.20 4.4%

Dallas, TX $21.08 5.6%

Charlotte, NC $20.67 0.8%

Phoenix, AZ $20.45 0.9%

Nashville, TN $20.23 3.9%

Sacramento, CA $19.98 1.4%

Columbus, OH $19.78 7.1%

Tampa, FL $19.61 -1.5%

Raleigh, NC $19.43 -0.9%

Atlanta, GA $19.08 0.7%

Saint Louis, MO $18.67 -0.8%

Indianapolis, IN $18.05 -0.1%

Cincinnati, OH $18.05 -1.4%

Kansas City, MO $18.02 0.6%

Milwaukee, WI $17.56 -2.2%

Louisville, KY $16.97 2.3%

Dayton, OH $14.35 0.2%

Source: Cassidy Turley Research

U.S. Of ce Sector Analysis

Bipartisn Budget Act of 2013Caps on Discretionary Spending, $ Trillions

Source: CBO, HBO

Developers are clearly savvy to the trend of shrinking square feet per worker, as new supply remains extremely lean. Just 33.3 msf of new of ce buildings delivered in 2013. Although that level is up from 24.6 msf in 2012, it is still about 50% below the norm. The lack of new supply has proven to be a more powerful force than has the lack of demand. In 2013, vacancy did register declines in 48 out of the 82 metros tracked. With vacancy declining in most areas of the country, rental rates are beginning to creep upward, albeit slowly. In the fourth quarter of 2013, average asking rents increased 10 cents from the previous quarter to $22.00 per square foot (psf). Of ce rents appreciated by 1.5% in 2013 compared to 2012.

In terms of demand, the top 10 U.S. markets for 2013 were New York with 7.1 msf of net absorption, Dallas with 4.2 msf, Houston with 3.9 msf, San Jose/Silicon Valley with 2.4 msf, Atlanta with 2.3 msf, Denver with 1.9 msf, Boston with 1.7 msf, Seattle with 1.7 msf, Charlotte with 1.5 msf and Chicago registering 1.5 msf of absorption.

The top 10 U.S. markets in terms of 2013 rent growth were San Francisco with average rents up 11.4%, New York up 9.5%, Denver up 7.8%, San Jose/Silicon Valley up 7.3%, Austin up 7.0%, Dallas, up 5.6%, Salt Lake City up 5.5%, San Mateo County up 4.9%, Oakland-East Bay up 4.4% and San Diego posting a 4.3% rent growth.

Investments sales registered another solid recovery year. From Jan-Nov of 2013, sales of signi cant of ce buildings totaled $82.2 billion, up 29% from the same period a year ago. Even assuming a mediocre December (when the data rolls in), 2013 will exceed the sales volume of 2004 (year one of the last real estate boom) and will be close to the level reached in 2005. 2013 was also a strong year for price appreciation, with CBD asset values growing by 13% and suburban assets increasing by 7% compared to the previous year.

Outlook

The stage is set, yet again, for the recovery to morph into something more robust. Given the strong economic data observed at the end of 2013, along with a small breakthrough with respect to scal policy, we are cautiously optimistic that 2014 will nally deliver a GDP growth number north of 3% and that job growth will accelerate.

Demand for of ce space, as weak as it has been throughout the current recovery, has actually exceeded new supply for two straight years. The trend towards space ef ciency will continue in 2014, but stronger job creation will keep demand above new supply for at least one more year. Assuming the current rate of absorption going forward, vacancy levels will decline to equilibrium in most markets by the midpoint of 2014. In half of the country mostly in energy and tech markets the pendulum has already shifted from a rent-declining tenants market to a rent-rising landlords one. By the second half of next year, the majority of the country will see rents pushing upwards.

Source: U.S. Bureau of Labor Statistics

-2000

-1500

-1000

-500

0

500

1000

06 07 08 09 10 11 12 13

721,000

$0.90

$0.95

$1.00

$1.05

$1.10

$1.15

$1.20

$1.25

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Original Budget Sequester Budget Agreement

Rents Yr/Yr % Chg.

Of ce-using EmploymentYr/Yr Change, 000s

cassidyturley.com | 5

Investment Sales

U.S. Of ce Acquisitions by Buyer Type

Source: Real Capital Analytics

Source: Real Capital Analytics

U.S. Of ce Sales Volume

U.S. Of ce Cap Rates

Source: Real Capital Analytics

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Nov

-08

Mar

-09

Jul-

09

Nov

-09

Mar

-10

Jul-

10

Nov

-10

Mar

-11

Jul-

11

Nov

-11

Mar

-12

Jul-

12

Nov

-12

Mar

-13

Jul-

13

Nov

-13

CBD Suburban

$0

$40

$80

$120

$160

$200

$240

01 02 03 04 05 06 07 08 09 10 11 12 Q1-312

Q1-313

Billion

s

Cross-Border Inst'l/Eq Fund Listed/REITs Private User/other

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

Nov

-08

Mar

-09

Jul-

09

Nov

-09

Mar

-10

Jul-

10

Nov

-10

Mar

-11

Jul-

11

Nov

-11

Mar

-12

Jul-

12

Nov

-12

Mar

-13

Jul-

13

Nov

-13

Billion

s

Avg. = $4.9B

Source: Real Capital Analytics, Cassidy Turley Research

Of ce Sale VolumeSelect Markets, Jan - Nov 2013

$ Volume(Millions)

Avg PSF

Manhattan, NY $17,344.9 $744

Los Angeles, CA $7,857.4 $263

Washington DC Metro $5,923.3 $358

Houston, TX $4,776.9 $220

Chicago, IL $4,594.8 $176

Atlanta, GA $3,144.0 $151

Boston, MA $3,116.3 $252

Dallas, TX $2,977.9 $146

San Jose, CA $2,638.1 $330

Seattle, WA $2,594.3 $305

San Francisco, CA $2,488.6 $417

Denver, CO $1,940.9 $194

Austin, TX $1,668.5 $211

Northern NJ $1,419.6 $129

San Diego, CA $1,244.0 $272

Orange County, CA $1,215.8 $222

Philadelphia, PA $1,135.2 $135

Minneapolis, MN $1,096.7 $123

Phoenix, AZ $1,016.8 $136

Milwaukee, WI $914.8 $149

Charlotte, NC $799.5 $150

East Bay, CA $698.6 $215

Miami, FL $690.0 $249

Las Vegas, NV $665.6 $191

Nashville, TN $592.6 $124

Saint Louis, MO $432.7 $93

Detroit, MI $423.7 $82

Portland, OR $409.0 $177

Orlando, FL $387.5 $89

Tampa, FL $377.4 $118

Baltimore, MD $359.9 $115

Raleigh/Durham, NC $331.3 $158

Indianapolis, IN $319.0 $86

NYC Boroughs $312.0 $261

Columbus, OH $307.5 $105

San Antonio, TX $289.4 $112

Inland Empire, CA $279.0 $133

Broward, FL $271.7 $98

Salt Lake City, UT $253.4 $150

Pittsburgh, PA $252.7 $109

Long Island, NY $219.8 $126

Sacramento, CA $180.1 $146

Cincinnati, OH $136.7 $41

Kansas City, MO $123.3 $52

6 | Cassidy Turley

2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

United States 53,105,000 50,075,000 51,593,000 22,368,000 5,865,000 14,808,000 15,310,000 15,611,000

Northeast 6,920,000 3,687,000 13,006,000 2,974,000 484,000 4,155,000 2,831,000 5,537,000

Midwest 2,800,000 5,211,000 6,842,000 2,448,000 575,000 2,789,000 1,834,000 1,644,000

South 19,378,000 20,850,000 19,512,000 8,233,000 3,503,000 3,149,000 6,308,000 6,552,000

West 24,007,000 20,327,000 12,233,000 8,713,000 1,303,000 4,715,000 4,337,000 1,878,000

Albuquerque, NM 58,000 113,000 15,000 140,000 41,000 171,000 -105,000 -92,000

Anaheim-Santa Ana, CA 1,581,000 1,043,000 686,000 352,000 219,000 390,000 206,000 -130,000

Atlanta-Sandy Springs-Marietta, GA -97,000 1,624,000 2,285,000 47,000 98,000 708,000 614,000 865,000

Austin-Round Rock, TX 2,155,000 1,408,000 631,000 754,000 94,000 203,000 68,000 265,000

Baltimore, MD 778,000 710,000 1,028,000 162,000 218,000 215,000 344,000 251,000

Birmingham-Hoover, AL 377,000 255,000 35,000 119,000 1,000 141,000 13,000 -121,000

Boston-Cambridge, MA 622,000 691,000 1,749,000 771,000 610,000 290,000 313,000 537,000

Buffalo-Niagara Falls, NY 322,000 195,000 -530,000 73,000 13,000 -31,000 -3,000 -509,000

Charleston-North Charleston, SC 285,000 255,000 72,000 186,000 -132,000 125,000 -1,000 80,000

Charlotte-Gastonia-Concord, NC-SC 695,000 998,000 1,570,000 623,000 423,000 257,000 452,000 439,000

Chattanooga, TN-GA 96,000 53,000 -186,000 -20,000 -79,000 -88,000 -18,000 -2,000

Chicago-Joliet-Naperville, IL-IN-WI -517,000 2,328,000 1,503,000 940,000 89,000 780,000 659,000 -24,000

Cincinnati-Middletown, OH-KY-IN 263,000 109,000 279,000 21,000 101,000 -65,000 109,000 135,000

Cleveland-Elyria-Mentor, OH -175,000 107,000 349,000 541,000 -307,000 372,000 165,000 118,000

Colorado Springs, CO 575,000 245,000 364,000 25,000 225,000 146,000 -3,000 -4,000

Columbia, SC 308,000 -374,000 -34,000 24,000 -57,000 -34,000 26,000 30,000

Columbus, OH 555,000 290,000 39,000 164,000 -244,000 100,000 135,000 48,000

Dallas, TX 2,738,000 3,044,000 4,161,000 2,379,000 808,000 -226,000 1,679,000 1,900,000

Dayton, OH 83,000 314,000 264,000 82,000 N/A 13,000 70,000 181,000

Denver-Aurora, CO 1,532,000 1,643,000 1,912,000 535,000 576,000 387,000 726,000 222,000

Detroit-Warren-Livonia, MI 1,185,000 36,000 379,000 107,000 126,000 -19,000 174,000 98,000

Fair eld, CT 720,000 -256,000 5,000 -276,000 26,000 -96,000 17,000 59,000

Ft. Lauderdale, FL 136,000 195,000 470,000 -14,000 10,000 199,000 73,000 187,000

Greensboro-Winston-Salem, NC 208,000 297,000 -104,000 64,000 -57,000 35,000 -66,000 -15,000

Greenville, SC 199,000 324,000 156,000 10,000 -31,000 222,000 -64,000 29,000

Hartford-West Hartford-East Hartford, CT -147,000 -47,000 176,000 74,000 -45,000 157,000 -94,000 159,000

Honolulu, HI 107,000 197,000 145,000 18,000 79,000 2,000 32,000 31,000

Houston, TX 2,646,000 4,546,000 3,946,000 851,000 -147,000 551,000 1,977,000 1,565,000

Indianapolis, IN -188,000 454,000 493,000 204,000 210,000 112,000 56,000 115,000

Jacksonville, FL 630,000 89,000 115,000 -106,000 -50,000 94,000 191,000 -120,000

Kansas City, MO-KS 457,000 606,000 453,000 332,000 180,000 148,000 76,000 50,000

Knoxville, TN 153,000 157,000 -251,000 -1,000 -30,000 -15,000 -11,000 -195,000

Las Vegas-Paradise, NV 994,000 925,000 271,000 348,000 -68,000 435,000 -113,000 16,000

Lexington-Fayette,KY 27,000 119,000 -111,000 170,000 15,000 -14,000 -105,000 -7,000

Little Rock-N. Little Rock, AR 22,000 -12,000 5,000 19,000 -14,000 38,000 -69,000 50,000

Los Angeles-Long Beach-Glendale, CA 597,000 871,000 -404,000 364,000 -552,000 -131,000 396,000 -117,000

Louisville, KY-IN 462,000 395,000 364,000 92,000 -61,000 76,000 103,000 247,000

Madison, WI -46,000 231,000 160,000 62,000 -21,000 11,000 81,000 89,000

Memphis, TN-MS-AR 215,000 72,000 -93,000 98,000 -88,000 0 -62,000 58,000

Miami-Dade, FL 1,018,000 1,521,000 1,315,000 269,000 249,000 316,000 290,000 461,000

Milwaukee-Waukesha-West Allis, WI 290,000 79,000 350,000 -151,000 123,000 68,000 -11,000 170,000

Minneapolis-St. Paul-Bloomington, MN-WI 1,017,000 438,000 957,000 247,000 450,000 197,000 285,000 25,000

Nashville-Davidson-Murfreesboro, TN 744,000 1,102,000 37,000 225,000 154,000 -49,000 -122,000 54,000

New Haven-Milford, CT 240,000 100,000 -118,000 29,000 -79,000 29,000 -28,000 -39,000

Net Absorption

cassidyturley.com | 7

Net Absorption2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

New Orleans-Metairie-Kenner, LA 253,000 227,000 -52,000 26,000 -124,000 50,000 41,000 -20,000

New York, NY 4,217,000 2,602,000 7,101,000 843,000 -943,000 1,542,000 1,284,000 5,217,000

Long Island, NY 797,000 1,215,000 500,000 914,000 46,000 179,000 358,000 -83,000

Northern New Jersey -1,235,000 -900,000 385,000 -161,000 691,000 406,000 -81,000 -630,000

Central New Jersey -140,000 -469,000 1,062,000 -42,000 10,000 623,000 563,000 -134,000

Oakland-East Bay, CA 1,210,000 1,471,000 -91,000 579,000 -55,000 823,000 -263,000 -596,000

Oklahoma City, OK 413,000 2,722,000 -2,000 274,000 141,000 -69,000 -186,000 112,000

Omaha, NE-IA 144,000 45,000 702,000 -131,000 38,000 704,000 -169,000 129,000

Orlando, FL 1,232,000 414,000 832,000 276,000 -5,000 344,000 261,000 232,000

West Palm Beach-Boca Raton, FL 841,000 483,000 218,000 344,000 18,000 71,000 74,000 56,000

Philadelphia-Camden-Wilmington, PA-NJ 1,157,000 803,000 921,000 683,000 -48,000 249,000 64,000 656,000

Phoenix-Mesa-Scottsdale, AZ 653,000 1,726,000 1,358,000 1,135,000 -89,000 -24,000 881,000 591,000

Pittsburgh, PA 649,000 467,000 264,000 285,000 -93,000 411,000 192,000 -246,000

Portland-South Portland-Biddeford, ME -238,000 -120,000 295,000 54,000 75,000 74,000 83,000 62,000

Portland-Vancouver-Beaverton, OR-WA 905,000 774,000 54,000 315,000 -11,000 196,000 -140,000 9,000

Raleigh-Durham, NC 354,000 437,000 966,000 201,000 301,000 189,000 354,000 122,000

Rochester, NY 392,000 -231,000 9,000 -2,000 -59,000 30,000 109,000 -72,000

Sacramento-Arden-Arcade-Roseville, CA 71,000 1,469,000 1,247,000 830,000 178,000 366,000 437,000 266,000

Saint Louis, MO-IL -218,000 144,000 827,000 17,000 -39,000 285,000 196,000 385,000

Salt Lake City, UT 1,122,000 405,000 280,000 629,000 6,000 158,000 19,000 98,000

San Antonio, TX 346,000 1,085,000 491,000 582,000 207,000 118,000 111,000 55,000

San Diego-Carlsbad-San Marcos, CA 686,000 1,192,000 887,000 730,000 150,000 586,000 144,000 7,000

San Francisco, CA 2,945,000 2,114,000 1,117,000 427,000 194,000 172,000 227,000 525,000

San Jose-Silicon Valley, CA 5,544,000 3,588,000 2,445,000 1,229,000 -285,000 1,241,000 874,000 614,000

San Mateo County, CA 1,564,000 -588,000 218,000 -130,000 276,000 -521,000 584,000 -122,000

Seattle-Tacoma-Bellevue, WA 3,808,000 3,084,000 1,675,000 1,093,000 396,000 368,000 499,000 412,000

Suburban MD 553,000 364,000 219,000 429,000 459,000 -128,000 -28,000 -84,000

Suburban VA -120,000 -2,015,000 -132,000 -349,000 253,000 -95,000 57,000 -347,000

Syracuse, NY -109,000 -155,000 121,000 10,000 47,000 53,000 9,000 12,000

Tampa-St.Petersburg-Clearwater, FL 540,000 70,000 922,000 516,000 613,000 -259,000 241,000 328,000

Tucson, AZ 175,000 -65,000 -92,000 61,000 -31,000 -67,000 -34,000 40,000

Tulsa, OK 373,000 383,000 85,000 43,000 70,000 50,000 -53,000 18,000

Ventura County, CA -119,000 121,000 147,000 32,000 53,000 18,000 -30,000 106,000

Washington, DC 799,000 -95,000 551,000 -61,000 246,000 123,000 121,000 60,000

Wichita, KS -50,000 30,000 87,000 13,000 -131,000 83,000 9,000 126,000

Westchester, NY -328,000 -209,000 1,067,000 -282,000 233,000 240,000 44,000 550,000

Methodology and data sources explained on page 14p = preliminaryr = revision

8 | Cassidy Turley

2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

(Quarterly Average)

United States 16.5% 15.8% 15.3% 15.5% 15.5% 15.2% 15.3% 15.1%

Northeast 15.7% 15.8% 15.4% 15.6% 15.6% 15.3% 15.4% 15.5%

Midwest 19.3% 19.0% 18.6% 19.0% 19.0% 18.6% 18.6% 18.4%

South 15.8% 14.6% 14.1% 14.2% 14.2% 14.1% 14.2% 13.9%

West 16.5% 15.5% 14.8% 15.1% 15.0% 14.8% 14.7% 14.6%

Albuquerque, NM 13.5% 14.1% 13.5% 13.6% 13.3% 12.8% 13.6% 14.3%

Anaheim-Santa Ana, CA 20.8% 18.4% 16.0% 17.1% 16.7% 15.9% 15.5% 15.7%

Atlanta-Sandy Springs-Marietta, GA 21.5% 20.1% 19.2% 19.7% 19.6% 19.3% 19.1% 18.6%

Austin-Round Rock, TX 14.9% 10.6% 8.6% 9.3% 9.0% 8.7% 8.7% 8.1%

Baltimore, MD 19.3% 18.7% 17.0% 18.5% 17.5% 17.1% 16.9% 16.6%

Birmingham-Hoover, AL 11.2% 10.2% 9.0% 9.5% 9.5% 8.7% 8.6% 9.3%

Boston-Cambridge, MA 14.4% 13.5% 12.0% 11.9% 12.2% 11.8% 12.2% 11.8%

Buffalo-Niagara Falls, NY 12.1% 11.0% 11.4% 10.7% 10.6% 10.8% 10.9% 13.3%

Charleston-North Charleston, SC 11.0% 10.3% 10.7% 9.2% 11.7% 10.1% 11.0% 10.0%

Charlotte-Gastonia-Concord, NC-SC 19.6% 17.9% 15.8% 17.8% 16.7% 16.5% 15.3% 14.6%

Chattanooga, TN-GA 14.9% 13.6% 16.9% 13.8% 15.3% 17.1% 17.5% 17.5%

Chicago-Joliet-Naperville, IL-IN-WI 18.4% 17.8% 17.0% 17.4% 17.3% 17.1% 16.8% 16.9%

Cincinnati-Middletown, OH-KY-IN 23.9% 24.5% 24.0% 25.0% 24.8% 24.2% 23.8% 23.3%

Cleveland-Elyria-Mentor, OH 20.5% 21.3% 22.5% 21.8% 22.6% 22.8% 22.4% 22.1%

Colorado Springs, CO 10.7% 9.3% 7.2% 9.2% 7.8% 6.8% 7.1% 7.1%

Columbia, SC 14.7% 15.7% 16.9% 16.7% 17.3% 17.6% 17.3% 15.6%

Columbus, OH 17.1% 15.8% 16.1% 15.6% 16.6% 15.6% 16.0% 16.1%

Dallas, TX 22.1% 21.0% 19.9% 20.6% 20.2% 20.1% 19.4% 19.8%

Dayton, OH 28.0% 27.0% 27.3% 27.7% 27.7% 27.0% 27.3% 27.3%

Denver-Aurora, CO 13.7% 12.8% 11.8% 12.4% 12.2% 12.1% 11.5% 11.5%

Detroit-Warren-Livonia, MI 24.5% 23.8% 23.1% 23.4% 23.3% 23.3% 23.0% 22.9%

Fair eld, CT 21.9% 21.4% 21.9% 21.7% 21.7% 22.2% 21.5% 22.1%

Ft. Lauderdale, FL 18.1% 17.1% 16.2% 17.1% 17.1% 16.3% 16.0% 15.4%

Greensboro-Winston-Salem, NC 18.3% 16.6% 16.5% 16.1% 16.4% 16.2% 16.6% 16.8%

Greenville, SC 18.1% 15.6% 13.0% 14.7% 15.0% 12.6% 13.3% 11.1%

Hartford-West Hartford-East Hartford, CT 22.9% 23.9% 23.2% 23.5% 23.6% 23.0% 23.5% 22.7%

Honolulu, HI 6.8% 6.2% 5.6% 5.9% 5.7% 5.7% 5.5% 5.4%

Houston, TX 15.5% 13.3% 13.3% 12.0% 12.1% 13.8% 13.9% 13.5%

Indianapolis, IN 20.6% 20.0% 19.5% 19.7% 19.5% 19.5% 19.6% 19.5%

Jacksonville, FL 17.3% 16.6% 16.5% 16.7% 16.8% 16.5% 15.8% 16.7%

Kansas City, MO-KS 21.6% 20.8% 19.4% 19.8% 19.5% 19.2% 19.2% 19.6%

Knoxville, TN 17.1% 13.1% 14.3% 13.1% 13.4% 13.6% 13.8% 16.5%

Las Vegas-Paradise, NV 21.8% 20.6% 17.8% 18.7% 18.9% 17.2% 17.6% 17.6%

Lexington-Fayette,KY 18.6% 19.1% 18.2% 17.1% 16.8% 17.1% 19.4% 19.5%

Little Rock-N. Little Rock, AR 11.5% 11.4% 11.8% 12.0% 12.1% 11.6% 12.4% 11.2%

Los Angeles-Long Beach-Glendale, CA 17.6% 17.3% 18.0% 17.1% 18.0% 18.3% 17.9% 17.9%

Louisville, KY-IN 15.6% 14.8% 14.3% 16.1% 14.2% 14.8% 14.6% 13.5%

Madison, WI 10.2% 9.7% 9.8% 9.5% 9.6% 9.5% 9.9% 10.1%

Memphis, TN-MS-AR 18.8% 18.0% 18.6% 17.7% 18.1% 18.7% 19.0% 18.7%

Miami-Dade, FL 14.2% 11.7% 9.2% 10.7% 10.3% 9.6% 9.0% 7.9%

Milwaukee-Waukesha-West Allis, WI 20.9% 20.8% 20.9% 21.7% 21.2% 20.9% 20.9% 20.4%

Minneapolis-St. Paul-Bloomington, MN-WI 17.7% 17.8% 16.5% 17.5% 16.9% 16.6% 16.2% 16.2%

Nashville-Davidson-Murfreesboro, TN 10.9% 9.9% 9.4% 9.2% 8.9% 9.1% 9.8% 9.7%

Of ce Vacancy Rates

cassidyturley.com | 9

Of ce Vacancy Rates2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

(Quarterly Average)

New Haven-Milford, CT 16.1% 15.8% 16.3% 15.5% 16.2% 16.1% 16.3% 16.6%

New Orleans-Metairie-Kenner, LA 10.1% 9.6% 9.6% 9.4% 9.8% 9.7% 9.5% 9.6%

New York, NY 13.0% 12.7% 11.3% 11.6% 11.8% 11.4% 11.2% 10.8%

Long Island, NY 16.2% 16.0% 14.4% 15.5% 14.7% 14.2% 14.0% 14.6%

Northern New Jersey 14.2% 15.0% 15.1% 15.2% 14.7% 15.1% 15.1% 15.5%

Central New Jersey 16.7% 16.8% 15.3% 17.1% 17.1% 15.1% 14.6% 14.6%

Oakland-East Bay, CA 17.9% 16.9% 15.9% 16.1% 16.2% 15.4% 15.7% 16.2%

Oklahoma City, OK 16.2% 13.2% 11.2% 11.4% 10.6% 10.9% 11.8% 11.5%

Omaha, NE-IA 14.4% 14.9% 15.6% 15.7% 15.6% 15.2% 16.2% 15.5%

Orlando, FL 13.8% 12.2% 11.1% 11.9% 12.1% 11.1% 10.8% 10.4%

West Palm Beach-Boca Raton, FL 14.9% 13.8% 12.3% 12.7% 12.7% 12.4% 12.1% 11.9%

Philadelphia-Camden-Wilmington, PA-NJ 13.3% 13.1% 13.2% 13.1% 13.5% 13.3% 13.2% 12.7%

Phoenix-Mesa-Scottsdale, AZ 24.1% 23.4% 21.5% 22.1% 22.0% 22.1% 21.2% 20.6%

Pittsburgh, PA 14.8% 14.5% 14.4% 14.0% 14.5% 14.3% 14.1% 14.7%

Portland-South Portland-Biddeford, ME 11.3% 12.1% 11.5% 12.5% 12.1% 11.7% 11.2% 10.9%

Portland-Vancouver-Beaverton, OR-WA 12.9% 11.9% 11.1% 11.3% 11.3% 10.9% 11.2% 11.2%

Raleigh-Durham, NC 17.6% 16.4% 14.2% 15.1% 14.8% 14.3% 14.0% 13.7%

Rochester, NY 14.1% 15.4% 16.0% 15.7% 16.0% 15.9% 15.9% 16.3%

Sacramento-Arden-Arcade-Roseville, CA 17.7% 17.1% 15.5% 16.2% 16.1% 15.5% 15.3% 14.9%

Saint Louis, MO-IL 16.0% 16.3% 15.7% 16.5% 16.6% 16.0% 15.5% 14.7%

Salt Lake City, UT 12.1% 11.5% 11.4% 11.0% 11.3% 11.6% 11.5% 11.4%

San Antonio, TX 17.7% 16.9% 16.6% 16.7% 16.9% 16.6% 16.5% 16.3%

San Diego-Carlsbad-San Marcos, CA 19.3% 18.2% 17.9% 17.7% 18.0% 17.9% 17.7% 18.0%

San Francisco, CA 12.4% 9.3% 8.5% 8.9% 8.7% 8.5% 8.5% 8.2%

San Jose-Silicon Valley, CA 15.4% 13.4% 12.7% 13.0% 13.2% 12.6% 12.6% 12.2%

San Mateo County, CA 13.2% 13.3% 13.4% 13.6% 13.2% 14.2% 13.0% 13.3%

Seattle-Tacoma-Bellevue, WA 15.1% 12.4% 11.0% 11.6% 11.2% 11.3% 10.9% 10.7%

Suburban MD 15.4% 15.5% 15.9% 15.5% 15.7% 16.0% 15.9% 16.0%

Suburban VA 14.1% 15.9% 16.9% 16.4% 16.4% 16.7% 17.0% 17.6%

Syracuse, NY 14.2% 15.9% 15.2% 16.0% 15.6% 15.2% 15.0% 15.0%

Tampa-St.Petersburg-Clearwater, FL 20.7% 20.1% 19.0% 19.6% 18.9% 19.3% 18.9% 18.7%

Tucson, AZ 14.5% 14.8% 16.1% 14.9% 15.3% 16.2% 16.7% 16.1%

Tulsa, OK 16.4% 15.0% 14.3% 14.3% 13.9% 14.0% 14.6% 14.5%

Ventura County, CA 24.0% 23.7% 24.3% 24.3% 24.4% 23.9% 24.5% 24.4%

Washington, DC 10.4% 10.4% 10.4% 10.6% 10.4% 10.3% 10.2% 10.6%

Wichita, KS 17.4% 17.4% 17.5% 17.3% 18.3% 17.7% 17.6% 16.3%

Westchester, NY 20.2% 20.3% 20.2% 20.2% 19.2% 19.0% 22.0% 20.5%

Methodology and data sources explained on page 14p = preliminaryr = revision

10 | Cassidy Turley

2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

(Quarterly Average)

United States $21.47 $21.75 $21.86 $21.67 $21.73 $21.82 $21.90 $22.00

Northeast $23.93 $24.46 $24.46 $24.06 $24.36 $24.24 $24.49 $24.75

Midwest $18.26 $18.25 $18.01 $18.06 $18.04 $18.05 $18.04 $17.93

South $20.60 $20.69 $20.72 $20.70 $20.65 $20.71 $20.73 $20.77

West $23.23 $23.80 $24.31 $23.86 $23.97 $24.29 $24.39 $24.58

Albuquerque, NM $15.58 $15.29 $15.03 $15.21 $15.28 $15.00 $14.87 $14.99

Anaheim-Santa Ana, CA $24.11 $23.50 $23.83 $23.47 $23.61 $23.68 $23.93 $24.10

Atlanta-Sandy Springs-Marietta, GA $18.77 $18.94 $19.08 $18.96 $18.91 $19.01 $19.07 $19.33

Austin-Round Rock, TX $24.36 $25.11 $26.88 $25.52 $26.16 $26.96 $26.93 $27.48

Baltimore, MD $22.19 $21.88 $22.62 $22.18 $22.28 $22.91 $22.58 $22.72

Birmingham-Hoover, AL $17.74 $17.92 $17.52 $17.79 $17.74 $17.60 $17.61 $17.16

Boston-Cambridge, MA $34.48 $34.98 $29.93 $28.94 $30.28 $29.51 $28.89 $31.02

Buffalo-Niagara Falls, NY $16.73 $16.70 $16.56 $16.61 $16.54 $16.72 $16.57 $16.44

Charleston-North Charleston, SC $19.01 $18.30 $17.21 $17.87 $16.80 $17.43 $17.35 $17.24

Charlotte-Gastonia-Concord, NC-SC $19.47 $20.50 $20.67 $20.81 $20.62 $20.49 $20.78 $20.80

Chattanooga, TN-GA $13.92 $15.02 $15.06 $14.93 $15.19 $15.09 $15.08 $14.86

Chicago-Joliet-Naperville, IL-IN-WI $24.43 $25.10 $24.70 $24.92 $24.81 $24.65 $24.57 $24.76

Cincinnati-Middletown, OH-KY-IN $18.15 $18.31 $18.05 $18.19 $18.16 $18.07 $18.07 $17.90

Cleveland-Elyria-Mentor, OH $17.83 $18.07 $17.45 $18.05 $17.51 $17.44 $17.41 $17.45

Colorado Springs, CO $16.04 $16.71 $15.62 $16.75 $16.72 $15.37 $15.28 $15.10

Columbia, SC $15.60 $15.51 $15.73 $15.62 $15.87 $15.73 $15.69 $15.65

Columbus, OH $17.11 $18.47 $19.78 $18.84 $19.67 $19.81 $19.81 $19.81

Dallas, TX $19.37 $19.95 $21.08 $20.05 $20.16 $20.93 $21.21 $22.00

Dayton, OH $14.56 $14.31 $14.35 $14.14 $14.14 $14.33 $14.46 $14.45

Denver-Aurora, CO $20.14 $20.22 $21.80 $20.55 $21.13 $21.99 $21.88 $22.19

Detroit-Warren-Livonia, MI $18.31 $17.91 $16.27 $17.67 $16.30 $16.30 $16.28 $16.22

Fair eld, CT $31.06 $32.61 $33.69 $32.19 $33.20 $32.59 $34.59 $34.37

Ft. Lauderdale, FL $24.49 $23.90 $23.18 $23.68 $23.81 $23.11 $22.97 $22.85

Greensboro-Winston-Salem, NC $15.44 $15.30 $15.47 $15.25 $15.23 $15.58 $15.51 $15.56

Greenville, SC $15.76 $15.61 $15.55 $15.61 $15.63 $15.54 $15.39 $15.65

Hartford-West Hartford-East Hartford, CT $19.39 $19.02 $19.18 $18.97 $18.97 $19.05 $19.13 $19.57

Honolulu, HI $28.56 $27.48 $25.08 $26.76 $25.90 $24.66 $24.74 $25.03

Houston, TX $22.96 $24.61 $25.19 $25.23 $25.10 $24.49 $25.37 $25.78

Indianapolis, IN $18.08 $18.08 $18.05 $18.09 $18.03 $18.06 $18.06 $18.06

Jacksonville, FL $17.05 $17.01 $17.02 $16.94 $17.09 $16.97 $17.02 $17.00

Kansas City, MO-KS $18.10 $17.91 $18.02 $17.94 $18.05 $18.01 $18.02 $18.01

Knoxville, TN $15.85 $15.71 $15.07 $15.33 $15.13 $14.99 $15.13 $15.03

Las Vegas-Paradise, NV $21.59 $20.63 $19.62 $20.07 $19.54 $19.71 $19.70 $19.53

Lexington-Fayette,KY $15.89 $15.61 $15.50 $15.72 $15.71 $15.58 $15.41 $15.32

Little Rock-N. Little Rock, AR $14.98 $15.28 $15.32 $15.34 $15.32 $15.43 $15.37 $15.17

Los Angeles-Long Beach-Glendale, CA $29.77 $29.87 $30.87 $30.17 $29.94 $30.36 $31.48 $31.68

Louisville, KY-IN $17.00 $16.59 $16.97 $16.83 $16.83 $17.03 $16.98 $17.04

Madison, WI $17.36 $17.16 $16.47 $17.32 $17.06 $16.42 $16.33 $16.06

Memphis, TN-MS-AR $18.82 $18.79 $18.85 $18.73 $18.86 $18.87 $18.89 $18.77

Miami-Dade, FL $27.52 $27.16 $27.30 $27.04 $27.19 $27.13 $27.18 $27.69

Milwaukee-Waukesha-West Allis, WI $18.35 $17.96 $17.56 $17.76 $17.63 $17.51 $17.51 $17.59

Minneapolis-St. Paul-Bloomington, MN-WI $24.58 $24.63 $23.71 $23.32 $23.45 $24.02 $24.07 $23.28

Nashville-Davidson-Murfreesboro, TN $19.96 $19.47 $20.23 $19.86 $20.01 $20.31 $20.30 $20.30

Asking Rents

cassidyturley.com | 11

Asking Rents2011 2012 2013 2012 4Q 2013 1Q 2013 2Q 2013 3Qr 2013 4Qp

(Quarterly Average)

New Haven-Milford, CT $20.01 $20.44 $19.52 $20.73 $20.97 $19.10 $19.06 $18.93

New Orleans-Metairie-Kenner, LA $14.96 $15.09 $15.10 $15.38 $15.03 $15.17 $15.13 $15.08

New York, NY $51.99 $57.70 $63.20 $59.44 $61.49 $62.13 $63.55 $65.61

Long Island, NY $25.69 $25.66 $25.61 $25.59 $25.67 $25.69 $25.73 $25.36

Northern New Jersey $25.06 $24.78 $24.90 $24.61 $24.52 $24.80 $25.10 $25.17

Central New Jersey $23.50 $23.95 $23.66 $23.84 $23.74 $23.92 $23.65 $23.34

Oakland-East Bay, CA $19.92 $20.32 $21.20 $20.57 $20.77 $21.05 $21.52 $21.47

Oklahoma City, OK $13.41 $13.16 $13.15 $13.11 $13.04 $13.04 $13.27 $13.24

Omaha, NE-IA $17.30 $16.82 $16.80 $16.28 $16.72 $16.84 $16.88 $16.73

Orlando, FL $19.69 $19.47 $18.96 $19.19 $19.07 $18.99 $18.94 $18.86

West Palm Beach-Boca Raton, FL $27.09 $26.85 $25.58 $26.68 $25.47 $25.59 $25.62 $25.63

Philadelphia-Camden-Wilmington, PA-NJ $23.05 $23.24 $23.14 $23.18 $23.29 $23.08 $23.04 $23.14

Phoenix-Mesa-Scottsdale, AZ $21.05 $20.27 $20.45 $20.17 $19.83 $20.39 $20.85 $20.72

Pittsburgh, PA $19.38 $19.39 $19.30 $19.51 $19.25 $19.23 $19.35 $19.40

Portland-South Portland-Biddeford, ME $14.36 $13.63 $12.66 $12.69 $12.55 $12.52 $12.58 $12.97

Portland-Vancouver-Beaverton, OR-WA $20.60 $20.59 $21.03 $20.76 $20.90 $21.10 $21.06 $21.04

Raleigh-Durham, NC $19.88 $19.60 $19.43 $19.41 $19.39 $19.38 $19.40 $19.54

Rochester, NY $13.96 $13.91 $14.14 $13.98 $13.91 $14.13 $14.20 $14.30

Sacramento-Arden-Arcade-Roseville, CA $20.49 $19.71 $19.98 $19.56 $19.92 $19.92 $20.04 $20.04

Saint Louis, MO-IL $19.22 $18.82 $18.67 $18.78 $18.62 $18.77 $18.63 $18.66

Salt Lake City, UT $17.55 $18.43 $19.45 $19.36 $19.50 $19.61 $19.34 $19.35

San Antonio, TX $19.43 $19.61 $19.64 $19.67 $19.59 $19.70 $19.70 $19.59

San Diego-Carlsbad-San Marcos, CA $28.55 $28.73 $29.97 $28.98 $29.82 $29.82 $29.64 $30.60

San Francisco, CA $35.79 $44.13 $49.16 $43.56 $45.37 $49.44 $50.64 $51.18

San Jose-Silicon Valley, CA $25.59 $27.65 $29.68 $28.40 $29.14 $29.85 $29.74 $30.00

San Mateo County, CA $36.42 $40.08 $42.06 $40.20 $40.56 $42.72 $42.12 $42.84

Seattle-Tacoma-Bellevue, WA $26.67 $26.94 $27.31 $27.45 $27.25 $27.13 $27.25 $27.61

Suburban MD $26.55 $26.42 $26.58 $26.18 $26.38 $26.82 $26.80 $26.30

Suburban VA $30.28 $31.51 $31.59 $31.46 $31.18 $31.58 $31.72 $31.89

Syracuse, NY $14.89 $15.47 $15.35 $15.34 $15.46 $15.48 $15.34 $15.11

Tampa-St.Petersburg-Clearwater, FL $19.85 $19.91 $19.61 $19.57 $19.62 $19.48 $19.61 $19.72

Tucson, AZ $19.67 $19.02 $19.00 $18.87 $18.89 $19.02 $19.00 $19.09

Tulsa, OK $15.77 $15.76 $16.00 $15.90 $15.97 $15.96 $16.03 $16.05

Ventura County, CA $23.11 $23.22 $22.82 $23.25 $22.98 $22.77 $22.63 $22.89

Washington, DC $49.41 $49.80 $49.40 $49.95 $49.87 $49.35 $49.08 $49.31

Wichita, KS $11.86 $11.78 $11.76 $11.59 $11.87 $11.81 $11.87 $11.50

Westchester, NY $25.39 $25.47 $26.07 $25.27 $25.50 $25.69 $26.54 $26.56

Methodology and data sources explained on page 14p = preliminaryr = revision

12 | Cassidy Turley

Inventory2013 4Q

Vacant Stock2013 4Q

Inventory Change (2013)

U/C (as of 2013 4Q)

National Total 5,014,144,000 745,856,000 33,347,000 57,140,000

Albuquerque, NM 13,589,000 1,937,000 120,000 289,000

Anaheim-Santa Ana, CA 59,316,000 9,313,000 21,000 380,000

Atlanta-Sandy Springs-Marietta, GA 194,167,000 36,115,000 721,000 1,175,000

Austin-Round Rock, TX 40,896,000 3,301,000 187,000 1,709,000

Baltimore, MD 75,898,000 12,622,000 781,000 1,440,000

Birmingham-Hoover, AL 18,533,000 1,715,000 0 0

Boston-Cambridge, MA 151,391,000 17,864,000 1,755,000 4,030,000

Buffalo-Niagara Falls, NY 20,954,000 2,784,000 20,000 129,000

Charleston-North Charleston, SC 8,061,000 803,000 154,000 100,000

Charlotte-Gastonia-Concord, NC-SC 44,712,000 6,528,000 0 106,000

Chattanooga, TN-GA 4,852,000 849,000 0 0

Chicago-Joliet-Naperville, IL-IN-WI 245,163,000 41,442,000 549,000 1,489,000

Cincinnati-Middletown, OH-KY-IN 32,912,000 7,669,000 0 410,000

Cleveland-Elyria-Mentor, OH 36,546,000 8,061,000 594,000 20,000

Colorado Springs, CO 15,140,000 1,077,000 65,000 17,000

Columbia, SC 10,799,000 1,687,000 0 60,000

Columbus, OH 26,531,000 4,271,000 308,000 516,000

Dallas, TX 206,868,000 40,960,000 1,623,000 3,624,000

Dayton, OH 14,209,000 3,879,000 0 0

Denver-Aurora, CO 186,999,000 21,505,000 971,000 0

Detroit-Warren-Livonia, MI 75,890,000 17,406,000 63,000 0

Fair eld, CT 53,911,000 11,914,000 0 168,000

Ft. Lauderdale, FL 27,232,000 4,203,000 32,000 319,000

Greensboro-Winston-Salem, NC 17,908,000 3,002,000 17,000 59,000

Greenville, SC 8,994,000 997,000 0 0

Hartford-West Hartford-East Hartford, CT 24,728,000 5,625,000 37,000 189,000

Honolulu, HI 25,719,000 1,392,000 0 0

Houston, TX 220,672,000 29,791,000 4,468,000 7,029,000

Indianapolis, IN 31,729,000 6,187,000 0 0

Jacksonville, FL 25,071,000 4,181,000 32,000 210,000

Kansas City, MO-KS 49,501,000 9,702,000 459,000 0

Knoxville, TN 7,124,000 1,176,000 0 33,000

Las Vegas-Paradise, NV 26,596,000 4,675,000 0 481,000

Lexington-Fayette,KY 4,521,000 883,000 0 54,000

Little Rock-N. Little Rock, AR 10,691,000 1,201,000 19,000 0

Los Angeles-Long Beach-Glendale, CA 165,667,000 29,654,000 767,000 745,000

Louisville, KY-IN 21,646,000 2,918,000 0 400,000

Madison, WI 22,426,000 2,255,000 393,000 0

Memphis, TN-MS-AR 19,740,000 3,694,000 139,000 0

Miami-Dade, FL 43,541,000 3,447,000 152,000 177,000

Milwaukee-Waukesha-West Allis, WI 27,721,000 5,655,000 0 0

Minneapolis-St. Paul-Bloomington, MN-WI 68,092,000 11,031,000 22,000 0

Nashville-Davidson-Murfreesboro, TN 33,078,000 3,209,000 64,000 899,000

New Haven-Milford, CT 12,259,000 2,036,000 19,000 515,000

New Orleans-Metairie-Kenner, LA 36,096,000 3,463,000 0 70,000

New York, NY 433,481,000 46,816,000 4,589,000 7,693,000

Long Island, NY 73,464,000 10,726,000 0 29,000

Northern New Jersey 151,299,000 23,451,000 1,047,000 974,000

Central New Jersey 104,227,000 15,217,000 152,000 423,000

Inventory

cassidyturley.com | 13

InventoryInventory2013 4Q

Vacant Stock2013 4Q

Inventory Change (2013)

U/C (as of 2013 4Q)

Oakland-East Bay, CA 109,314,000 17,709,000 64,000 0

Oklahoma City, OK 20,219,000 2,316,000 42,000 22,000

Omaha, NE-IA 19,108,000 2,963,000 794,000 546,000

Orlando, FL 33,444,000 3,472,000 374,000 201,000

West Palm Beach-Boca Raton, FL 24,247,000 2,886,000 30,000 181,000

Philadelphia-Camden-Wilmington, PA-NJ 113,628,000 14,407,000 543,000 667,000

Phoenix-Mesa-Scottsdale, AZ 96,948,000 19,971,000 208,000 661,000

Pittsburgh, PA 50,697,000 7,431,000 656,000 2,123,000

Portland-South Portland-Biddeford, ME 17,886,000 1,942,000 0 0

Portland-Vancouver-Beaverton, OR-WA 41,794,000 4,663,000 0 370,000

Raleigh-Durham, NC 36,798,000 5,041,000 301,000 618,000

Rochester, NY 15,878,000 2,592,000 142,000 145,000

Sacramento-Arden-Arcade-Roseville, CA 86,222,000 12,847,000 82,000 77,000

Saint Louis, MO-IL 48,229,000 7,090,000 0 405,000

Salt Lake City, UT 31,306,000 3,561,000 471,000 829,000

San Antonio, TX 30,477,000 4,974,000 452,000 222,000

San Diego-Carlsbad-San Marcos, CA 71,285,000 12,830,000 441,000 1,692,000

San Francisco, CA 84,322,000 6,914,000 550,000 2,987,000

San Jose-Silicon Valley, CA 201,845,000 24,625,000 1,974,000 3,111,000

San Mateo County, CA 50,844,000 6,762,000 133,000 327,000

Seattle-Tacoma-Bellevue, WA 86,399,000 9,206,000 987,000 1,134,000

Suburban MD 72,652,000 11,624,000 963,000 892,000

Suburban VA 161,633,000 28,447,000 1,913,000 1,175,000

Syracuse, NY 12,765,000 1,909,000 0 0

Tampa-St.Petersburg-Clearwater, FL 60,040,000 11,221,000 519,000 118,000

Tucson, AZ 6,334,000 1,018,000 0 65,000

Tulsa, OK 20,685,000 3,009,000 169,000 172,000

Ventura County, CA 5,495,000 1,338,000 36,000 0

Washington, DC 122,183,000 12,951,000 1,164,000 2,098,000

Wichita, KS 13,940,000 2,269,000 0 0

Westchester, NY 36,972,000 7,579,000 0 345,000

Methodology and data sources explained on page 14

Under construction and inventory change gures are derived from Cassidy Turleys proprietary sample and taken directly from CoStars database for certain markets.

14 | Cassidy Turley

MethodologyMethodologyCassidy Turleys quarterly estimates are derived from a variety of data sources, including its own proprietary sample of market activity, historical inventory data from Reis LLC, Bureau of Labor Statistics Employment data, CoStar and other third party data sources. The market statistics are calculated from a base building inventory made up of of ce properties deemed to be competitive in the local of ce markets. Generally, owner-occupied and federally-owned buildings are not included. Single-tenant buildings and privately-owned buildings in which the federal government leases space are included. Older buildings un t for occupancy or ones that require substantial renovation before tenancy are generally not included in the competitive inventory. The inventory is subject to revisions due to resampling. Vacant space is de ned as space that is available immediately or three months (90 days) after the end of the quarter. Sublet space still occupied by the tenant is not counted as available space.

The gures provided for the current quarter are preliminary, and all information contained in the report is subject to correction of errors and revisions based on additional data received.

Explanation of TermsTotal Inventory: The total amount of of ce space (in buildings greater than 10,000 square feet) that can be rented by a third party.

Total Space Available: The sums of new, relet, and sublet space that is unoccupied and being actively marketed.

Vacancy Rate: The amount of unoccupied space (new, relet, and sublet) expressed as a percentage of total inventory.

Absorption: The net change in occupied space between two points in time. (Total occupied space in the present quarter minus total occupied space from the previous quarter, quoted on a net, not gross, basis.)

Asking Rents: Gross average asking rents.

Disclaimer

This report and other research materials may

be found on our website at www.cassidyturley.

com. This is a research document of Cassidy

Turley in Washington, DC. Questions related

to information herein should be directed

to the Research Department at 202-463-

2100. Information contained herein has

been obtained from sources deemed reliable

and no representation is made as to the

accuracy thereof. Cassidy Turley is a leading

commercial real estate services provider, with

400 million square feet managed on behalf

of institutional, private and corporate clients

and $22 billion in completed transactions

for 2012.

Regional Map

WestMidwestSouthNortheast

cassidyturley.com

KeyStatistics

More than 60 U.S. of ces

65 international of ces*

More than 3,800 professionals

More than 970 brokers

2012 transactions

Gross transaction volume $22 billion

Gross capital markets volume $9.2 billion

400 million sf managed portfolio

More than 23,000 client locations served

*Through GVA Partnership

A Leader in Commercial Real Estate ServicesAt Cassidy Turley, we are market leaders, industry leaders and community leaders. Nationwide, clients recognize us for the creative sophistication of our real estate advice as well as for the discipline and accuracy of our service delivery. We are a trusted partner and advocate, supporting our clients overall business performance. In markets across the country, we are respected as a leading provider of commercial real estate services as well as for our community engagement. Our thorough understanding of local business practices and market dynamics, combined with our customer focus and service commitment, give our clients a distinct edge in commercial real estate across the globe.

Local Market Leaders, Nationwide Our professionals have deep ties to our communities and our industry, and a thorough

understanding of local business leaders and practices, giving Cassidy Turley and our clients an edge.

Our in-depth, local market knowledge provides a comprehensive understanding of market dynamics and enables us to effectively forecast market trends providing insight to clients and helping them make informed real estate decisions.

Our leadership position is recognized in the communities we serve. We are often rated in local business journals as a Best Place to Work, and are honored for our many local philanthropic efforts.

Industry Leadership Named to Leaders List of 2013 Global Outsourcing 100

Over 80% of real estate executives familiar with our brand ranked it Very Good or Excellent Wall Street Journal survey

Ranked a Top 5 Brand Lipseys 2013 Commercial Real Estate Brandy Survey

Ranked in the Top 5 in Best Practices Index Commercial Property Executive

2012 Greenest Company Index Commercial Property Executive

Named by the EPA a 2013 ENERGY STAR Partner of the Year

World-Class Expertise Many of our associates have honed their skills in their respective markets for years

even decades gaining an understanding of industry best practices and serving as thought leaders.

Cassidy Turley has served clients needs outside of the United States since 1985. In order to better serve our clients in Europe and Asia-Paci c, Cassidy Turley is proud to partner with GVA, the founder and majority shareholder of GVA Worldwide, which serves key markets in over 25 countries.