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OFFICEINDUSTRIAL RETAILMULTIFAMILY

MARKETREPORT

FORT COLLINS

Q3|2019

MARKETREPORT

OFFICE MARKET REPORT

Market Key Statistics 2

Leasing 3

Rent 8

Construction 10

Under Construction Properties 11

Sales 12

Sales Past 12 Months 13

Economy 15

Market Submarkets 17

Supply & Demand Trends 19

Rent & Vacancy 21

Sale Trends 23

Fort Collins Office

10/28/2019Copyrighted report licensed to Unique Properties, Inc. - 1010488.

OverviewFort Collins Office

120 K 44.7 K 4.4% 1.3%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth

Fort Collins is a dynamic office market that is heavilyinfluenced by Colorado State University, not only themetro’s largest employer, but also serving as anincubator for local tech firms, feeding them talentedgraduates with hands-on experience. Several prominentcompanies have established a presence here, includingHewlett-Packard and Intel.

Moreover, Fort Collins boasts exceptional economic anddemographic trends. Median incomes have increased ata rate twice the national average over the past fiveyears. Net migration has propelled population growth toan average of 2.1% over the past five years, almostthree times the national average.

Even with steady development this cycle, vacancies areexceptionally tight, and rent growth outpaced the nationalaverage for four straight years through 2016, beforemoderating since then. Both the vacancy and availabilityrates touched historic lows within the last few quarters.

In a significant 2018 development, marketing techcompany Madwire signed on for 102,000 SF at 3405 STimberline Road (which had been largely vacant sincethe beginning of 2015) and leased the remaining 45,000SF at the building three months later. The new space willallow the rapidly growing company to expand from 500 to1,200 employees over the next three years.

KEY INDICATORS

Market RentVacancy RateRBACurrent Quarter Availability RateNet Absorption

SFDeliveries SF

UnderConstruction

$31.945.7%1,098,9374 & 5 Star 6.6% (6,832) 0 91,712

$22.444.1%6,870,4783 Star 7.2% 7,371 3,000 4,000

$19.184.5%3,706,3051 & 2 Star 6.7% (466) 0 0

$22.374.4%11,675,720Market 7.0% 73 3,000 95,712

ForecastAverage

HistoricalAverage

12 MonthAnnual Trends Peak When Trough When

3.9%7.9%0.6%Vacancy Change (YOY) 12.2% 2009 Q4 3.7% 2018 Q4

78,135213,60044.7 KNet Absorption SF 578,637 2005 Q2 (130,650) 2002 Q4

77,765227,215120 KDeliveries SF 574,695 2005 Q3 0 2013 Q4

0.8%0.6%1.3%Rent Growth 8.0% 2014 Q2 -6.9% 2009 Q3

N/A$49.0M$99.3 MSales Volume $119.8M 2015 Q4 $0 2003 Q3


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LeasingFort Collins Office

Fort Collins is a well-educated metro supported by thepresence of Colorado State University (CSU), the largestemployer in the market with more than 7,000 employees.The university feeds the local office employers with asteady stream of intellectual capital, helping to supportoffice demand and employment growth. In fact,employment growth in Fort Collins has outpaced thenational average every year of the recovery, often bymore than 200 basis points.

Tech companies from Intel, Hewlett-Packard and AgilentTechnologies are among the metro’s biggest tenants,with a growing trend toward the renewable energy andbiotech sectors. These firms can take advantage ofpartnerships with CSU and their research facilities,incubating an employee base already experienced ininnovation and laboratory work.

In a major development on the tech front, marketing techfirm Madwire signed on for 102,000 SF at 3405 STimberline Road in March 2018. The building, whichunderwent a significant renovation following Madwire'ssigning, had been entirely vacant and available for abouttwo years prior to the lease. Madwire will keep its 63,000SF space a few miles away at 3404 E Harmony Road.This March 2018 lease helped drive down the availabilityrate, which hit a new cyclical low in early 2018.

The availability rate further declined to a new cyclical lowin June 2018, when Madwire signed on for all of theremaining space at 3405 S Timberline Road (anadditional 45,000 SF). With that deal, all of the space at

the building was leased prior to its reopening (afterrenovations).

In another 2018 tech lease, Columbus, OH-basedVertiv, a provider of equipment and services for datacenters, signed on for 19,000 SF at the Hahns Peak Twobuilding in Centerra. Vertiv plans to move about 50existing employees to the office, and hire 50 newemployees.

A prior surge in absorption in 2017 was attributable toseveral major move-ins across the metro, some at newconstruction. Among them: Agrium AdvancedTechnologies moved into 130,000 SF at a new propertyat the Rangeview campus in Loveland in June. The newbuilding (the first 100,000 SF-plus office constructed inthe metro in over a decade) will house the firm's newheadquarters, while consolidating operations that arecurrently spread across Colorado and other parts of thecountry.

Other recent moves include Hewlett-Packard, whichmoved into 30,000 SF at 3404 E Harmony Rd in the Cityof Fort Collins, joining Comcast, which moved into80,000 SF in the same building in February 2017.

Vacancies are largely drum tight in Fort Collins and sit atabout half of the national average. Sublet space isvirtually nonexistent, and available space averages lessthan a year on the market, a trend that has persistedover the last five years.


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NET ABSORPTION, NET DELIVERIES & VACANCY

VACANCY RATE


Page 4


AVAILABILITY RATE


Page 5


12 MONTH NET ABSORPTION SF IN SELECTED BUILDINGS

3rd QtrBuilding Name/Address Submarket Bldg SF Vacant SF

1st Qtr 2nd Qtr 4th Qtr 12 Month

Net Absorption SF

Fort Collins/Loveland 34,824 0 0 34,824 0 0 34,824Boyd Lake Park Village

Fort Collins/Loveland 34,645 0 33,310 0 0 0 33,3104701 Royal Vista Cir

Fort Collins/Loveland 23,888 0 11,388 12,500 0 0 23,888Oakridge Business Park (1)

Fort Collins/Loveland 23,120 0 23,120 0 0 0 23,120The Plaza @ Riverbend

Fort Collins/Loveland 14,645 0 0 7,493 0 0 12,4684065 St Cloud Dr

Fort Collins/Loveland 26,144 0 3,624 1,760 0 0 12,434The Exchange

Fort Collins/Loveland 58,111 21,417 0 15,833 0 (5,584) 10,249Rangeview

Fort Collins/Loveland 8,794 2,651 4,658 0 0 1,485 6,143808 W Eisenhower Blvd

Fort Collins/Loveland 20,000 0 0 0 5,563 0 5,563Rialto Theater Center

Fort Collins/Loveland 8,640 0 0 7,700 0 0 5,3794102 S Timberline Rd

Fort Collins/Loveland 9,956 0 4,740 0 0 0 5,202Ridgeview Office Park

Fort Collins/Loveland 127,500 0 4,818 0 0 0 4,818Key Bank Tower

Fort Collins/Loveland 30,359 0 0 2,621 2,174 0 4,795Timberline Office Park

Fort Collins/Loveland 83,889 7,085 4,589 (3,249) (1,034) 0 3,969Opera Galleria

Fort Collins/Loveland 18,727 1,166 486 (1,945) 3,295 0 3,596Bank One Bldg

Fort Collins/Loveland 10,248 0 0 0 0 0 3,475Oakridge Business Park (2)

Fort Collins/Loveland 3,070 0 0 0 3,070 0 3,0704800 Larimer Pky

536,560 32,319 90,733 77,537 13,068 (4,099) 196,303Subtotal Primary Competitors

11,139,160 475,623 (69,849) (31,451) (42,844) 4,172 (151,578)Remaining Fort Collins Market

11,675,720 507,942 20,884 46,086 (29,776) 73 44,725Total Fort Collins Market


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TOP OFFICE LEASES PAST 12 MONTHS

Building Name/Address Submarket Leased SF Tenant Name Tenant Rep Company Leasing Rep CompanyQtr

Harmony Corporate Center Fort Collins/Loveland 33,720 Prosci CBRE CBREQ2 19

Oakridge Business Park Fort Collins/Loveland 16,848 summit health - Waypoint Real Estate,…Q4 18

Rangeview Fort Collins/Loveland 15,833 - - Cushman & WakefieldQ4 19

Rangeview Fort Collins/Loveland 15,833 - - Cushman & WakefieldQ2 19

Oakridge Business Park Fort Collins/Loveland 12,500 SummitStone Health Part… - Waypoint Real Estate,…Q1 19

Rangeview Fort Collins/Loveland 9,800 - - Realtec Commercial R…Q1 19

Rangeview Fort Collins/Loveland 9,676 Nutrien Ag Solutions Realtec Commercial… -Q2 19

3420 E Harmony Rd Fort Collins/Loveland 8,840 - Cushman & Wakefield CBREQ3 19

502 E Pitkin St Fort Collins/Loveland 8,705 - - Doberstein Lemburg C…Q2 19

Centerra Fort Collins/Loveland 8,506 - - CBRE;McWhinneyQ3 19

Everitt Plaza Fort Collins/Loveland 8,207 Secure 64 - Cushman & WakefieldQ2 19

4102 S Timberline Rd Fort Collins/Loveland 7,700 SummitStone Health Part… - Cushman & WakefieldQ1 19

Horsetooth East Business Park * Fort Collins/Loveland 7,648 Telesto Solutions, Inc - CBREQ3 19

4065 St Cloud Dr Fort Collins/Loveland 7,493 Agfinity, Inc. - Cushman & WakefieldQ1 19

East Drake Terrace Fort Collins/Loveland 7,256 Veterinary Inc. - RE/MAX Commercial A…Q3 19

Johnstown Plaza Fort Collins/Loveland 6,927 Premier Medical Groups - -Q4 18

Fort Collins Air Park Fort Collins/Loveland 6,757 Heart Centered Counseling - RE/MAX Commercial A…Q2 19

Rangeview Fort Collins/Loveland 6,495 Presidential Wealth Mana… - Realtec Commercial R…Q1 19

Colorado Newspaper Building Fort Collins/Loveland 6,408 Vertiv Corporation Cresa Cushman & WakefieldQ3 19

Observatory Heights * Fort Collins/Loveland 6,097 Keller Williams Fort Collins - Cushman & WakefieldQ4 18

Harmony One at Preston Center Fort Collins/Loveland 6,007 CBRE CBRE Waypoint Real Estate,…Q4 18

400 E Horsetooth Rd Fort Collins/Loveland 5,759 Foundations Counseling,… CBRE Cushman & WakefieldQ4 19

3500 JFK Fort Collins/Loveland 5,180 Koenig - RE/MAX Commercial A…Q3 19

141 Racquette Dr Fort Collins/Loveland 5,061 Joy Organics, LLC Cushman & Wakefield Cushman & WakefieldQ1 19

Oakridge Business Park Fort Collins/Loveland 4,996 - - Waypoint Real Estate,…Q4 18

Harmony One at Preston Center Fort Collins/Loveland 4,573 - - Waypoint Real Estate,…Q1 19

Opera Galleria Fort Collins/Loveland 4,523 - CBRE Cushman & WakefieldQ1 19

2619 Midpoint Dr Fort Collins/Loveland 4,423 Control Vision - The W.W. Reynolds Co…Q2 19

Continental Plaza Fort Collins/Loveland 4,418 Palmer Properties - Cushman & Wakefield;…Q3 19

Oakridge Business Park Fort Collins/Loveland 4,227 - LesseeCRE CBREQ4 18

Poudre Valley Plaza Fort Collins/Loveland 4,129 SWCA, Incorporated Realtec Commercial… Cushman & WakefieldQ4 19

Crossroads Business Park Fort Collins/Loveland 4,100 Mega Natural Gas Solutio… - Cushman & WakefieldQ2 19

Boardwalk Office Park Fort Collins/Loveland 3,729 Slimstock Inc. Livingston Real Esta… SVN l Denver Commer…Q2 19

Boardwalk Office Park Fort Collins/Loveland 3,500 - - Realtec Commercial R…Q2 19

Center for Advanced Technology Fort Collins/Loveland 3,461 - - CSURF Real Estate Off…Q3 19

Continental Plaza * Fort Collins/Loveland 3,359 Securitas Avison Young Cushman & Wakefield;…Q3 19

Center for Advanced Technology Fort Collins/Loveland 3,235 - - CSURF Real Estate Off…Q2 19

Spring Creek Business Condos Fort Collins/Loveland 2,973 Tintometer - The W.W. Reynolds Co…Q1 19

Harmony Hills Bldg Fort Collins/Loveland 2,874 Alexco Water & Environm… - SVN l Denver Commer…Q2 19

Preston Center Office Prk Fort Collins/Loveland 2,859 Thrivent Financial Avison Young;Cush… CBREQ2 19

*Renewal


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RentFort Collins Office

Tight vacancies and healthy demand over the lastseveral years drove strong rent growth since 2012,pushing rents north by almost 25% between 2012-16.Rent growth has since moderated as speculativedevelopment has ramped up, although fundamentalsremain in excellent shape. This follows similarslowdowns in both the Boulder and Denver metros. Still,with vacancies close to cyclical lows despite a healthyamount of speculative development, office owners shouldhave a decent amount of pricing power when space hitsthe market.

Rents at recent or upcoming speculative projects varydepending on the location within the metro. Two recentprojects in the 5,000 to 10,000 SF range in Loveland (onEisenhower Blvd alongside Lake Loveland) listed spacefor $23 to $25/SF triple-net. An 8,000 SF speculativebuilding was recently asking $17/SF NNN.

Space at the North Building of The Exchangedevelopment in Downtown Fort Collins is running fromabout $23 to $25/SF NNN for spaces with street or plazafrontage, and about $19/SF for those without.

MARKET RENT GROWTH (YOY)


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RentFort Collins Office

MARKET RENT PER SQUARE FOOT

4 & 5 STAR EXPENSES PER SF (ANNUAL)

Utilities Cleaning InsuranceMarket / Cluster Taxes Other Total

Fort Collins $1.00 $0.15$0.47 $4.72 $5.03 $11.37

Fort Collins/Loveland $1.00 $0.15$0.47 $4.76 $5.04 $11.42

Outlying Larimer County $0.95 $0.15$0.45 $4.22 $4.85 $10.62

Expenses are estimated using NCREIF, Trepp, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.

3 STAR EXPENSES PER SF (ANNUAL)


Fort Collins $0.81 $0.11$0.42 $4.04 $2.63 $8.01




1 & 2 STAR EXPENSES PER SF (ANNUAL)


Fort Collins $0.51 $0.10$0.39 $3.43 $2.00 $6.43





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ConstructionFort Collins Office

Builders have been relatively active this cycle, deliveringoffice buildings across Loveland and Fort Collins. Severalyears experienced more than 1% of inventory growth,with build-to-suit projects comprising the majority ofnew space. For example, the biggest delivery this cycle,the Rangeview Five building in Loveland, delivered in17Q2 and was built for Agrium Advanced Technologies.It’s the only property built to this point of the cycle largerthan 100,000 SF.

Development continues to generally consist of smallerprojects, a handful of them speculative. The largestproject underway at the start of 2019 was a 35,000-SFmedical office building off of Eisenhower Blvd inLoveland.

Spec construction is not completely shut out. HahnsPeak Two in the Centerra campus delivered in 2016 anda third of the space was still available as of year-end

2017. The final 19,000 SF was leased in March 2018 onan $18.50/SF NNN lease to Vertiv, roughly two yearsafter the project delivered. Prior to that building'sgroundbreaking, Pinnacle Agriculture committed to theentire 28,000-SF first floor (half of the building).

One target for future development could be 2534, a 600-acre, mixed-use site at the intersection of I-25 and US34. Development fees that are among the lowest in theregion, and a development review process that isstreamlined and provides approvals within monthsinstead of years – also among the fastest in the region –contribute to 2534 being a popular target for commercialbuilders. Developers initially focused their efforts onindustrial and retail product, but in mid-2018,construction commenced on a fully speculative 25,000SF office building that wrapped up construction aroundthe start of 19Q2.

DELIVERIES & DEMOLITIONS

SUBMARKET CONSTRUCTION

Average Building Size

RankUnder Constr

Under Construction Inventory

All ExistingSF (000) Pre-Leased SF (000)SubmarketNo. RankBldgs Pre-Leased %

1 Fort Collins/Loveland 3 96 31,90467.1% 1 12,03664 1

2 Outlying Larimer County 0 - -- - 8,161- -

Totals 3 96 31,90467.1% 11,79464


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Under Construction PropertiesFort Collins Office

3 95,712 0.8% 67.1%Properties Square Feet Percent of Inventory Preleased

UNDER CONSTRUCTION PROPERTIES

UNDER CONSTRUCTION

Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner

Aug-2019221 E Mountain Ave

68,850 4 Aug-2020Neenan Archistruction

Elevations Credit Union1

Jun-20184600 E Harmony Rd

The Plaza at Riverbend22,862 - Feb-2020

Neenan Archistruction

Neenan Management Company2

Jul-20191587 Taurus Ct

Building 24,000 1 Dec-2019

-

-3


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SalesFort Collins Office

More than 80 transactions over a calendar year arecommon, with often local investors trading smaller officeproperties at cap rates that have averaged in the high-6% to low-7% range over the last several years.

The largest trade in 2019 to-date involved a 33,000 SFoffice constructed in 2016. The building, 2243 CentreAvenue in Fort Collins, was occupied by affiliates ofCSU, reinforcing the sometimes direct impact of theuniversity of the local office market.

The largest single-asset trade in 2018 was the March2018 sale of 5200 Hahns Peak Drive, a 34,000 SF

building constructed in the late 1990s. The property wassold by local developer McWhinney for $9.7 million, or$286/SF, to a group of individual investors. The buildingwas 82% occupied at the time of the sale.

The metro does not have a large institutional gradestock. There are only five non-government 100,000 SF-plus office buildings in the metro, four owned by localinvestment/development firms, and another owned byHewlett Packard. While tremendous ongoing growth inNorthern Colorado's I-25 corridor is attractive, the officemarket here is largely controlled by local or, lessfrequently, regional players.

SALES VOLUME & MARKET SALE PRICE PER SF


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Sales Past 12 MonthsFort Collins Office

100 6.7% $155 3.6%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale

SALE COMPARABLE LOCATIONS

SALE COMPARABLES SUMMARY STATISTICS

Sales Attributes Low Average Median High

Sale Price $150,000 $2,184,246 $900,000 $21,000,000

Price Per SF $74 $155 $195 $583

Cap Rate 4.5% 6.7% 7.0% 9.9%

Time Since Sale in Months 0.2 6.4 6.8 11.9

Property Attributes Low Average Median High

Building SF 984 13,477 4,665 184,384

Stories 1 2 2 3

Typical Floor SF 492 6,957 4,028 61,461

Vacancy Rate At Sale 0% 3.6% 0% 50.9%

Year Built 1880 1968 1979 2016

Star Rating 2.3


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Sales Past 12 MonthsFort Collins Office

Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF

Property

Sale Date

Sale

Cap Rate

RECENT SIGNIFICANT SALES

-1 3420 E Harmony Rd1980 184,384 7.7% $21,000,000 $1144/19/2019 -

-2 Axis International Acade…2016 58,717 0% $9,695,000 $165

2130 W Horsetooth Rd4/24/2019 -

-3 Preston Center2001 58,333 0% $9,600,000 $165

2809 E Harmony Rd10/31/2018 -

-4 4701 Royal Vista Cir1999 34,645 0% $5,550,000 $1602/1/2019 -

-5 201 E 5th St1910 24,438 0% $3,140,000 $1284/8/2019 -

-6 Bldg A1998 19,164 20.1% $2,747,696 $143

1075 W Horsetooth Rd8/19/2019 5.5%

-7 Poudre River Arts Center1946 15,508 0% $2,300,000 $148

400-406 N College Ave1/18/2019 -

-8 Bldg F1998 15,114 8.3% $2,215,567 $147

1027 W Horsetooth Rd8/19/2019 5.5%

-9 3520 E 15th St2011 5,712 0% $2,100,000 $36811/2/2018 6.6%

-10 Building B2019 4,689 0% $2,078,542 $443

4650 Signal Tree Dr4/29/2019 -

-11 125 W Crestridge Dr1974 3,000 37.5% $1,750,000 $5837/24/2019 -

-12 Harmony Medical Condo…2005 5,174 0% $1,625,000 $314

4674 Snow Mesa Dr12/10/2018 7.2%

-13 4007 Automation Way1998 7,360 0% $1,565,000 $21310/15/2019 -

-14 1148 E Elizabeth St1980 5,880 0% $1,450,000 $2478/16/2019 6.3%

-15 Family Clinic of Fort Coll…1972 8,220 0% $1,400,000 $170

1212 E Elizabeth St1/9/2019 -

-16 Shores Office Park Bldg 41985 6,540 0% $1,275,300 $195

375 E Horsetooth Rd1/16/2019 -

-17 Bldg B1999 8,111 50.9% $1,234,853 $152

1063 W Horsetooth Rd8/19/2019 5.5%

-18 Town Center Plaza1964 12,181 0% $1,200,000 $99

350 E 7th St1/2/2019 9.9%

-19 Orchards Medical & Prof…1981 14,850 17.0% $1,100,000 $74

295 E 29th St11/1/2018 -

-20 1355 Riverside Ave1984 12,200 17.4% $1,050,000 $863/11/2019 8.1%


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EconomyFort Collins Office

While many might consider Fort Collins a collegetown—it is virtually wedded to Colorado StateUniversity—the city’s economic strength stems from thediversity of the employers located here. Colorado StateUniversity’s influence cannot be disregarded, however. Itplays a vital role in drawing the city’s high-payingemployers. Because of the university’s resources andresearch facilities, not to mention the constant supply ofeducated graduates, a number of tech companies, andmore than 20 Fortune 500 companies are located in themetro, including Hewlett-Packard, AMD, and Intel.These firms can take advantage of partnerships with theschool and its research labs, incubating an employeebase already experienced in field work.

Fort Collins has developed a significant craft beerindustry and is home to a number of notable brewers,including New Belgium, Odell, and Black Bottle, not tomention behemoth Annheuser-Busch. This industryniche accounts for a more than $1 billion economicimpact on Larimer County, with almost 3,000 jobs and inthe neighborhood of $175 million in wages.

Population growth data released in September 2018suggested that the metro area's population increased byabout 1.7% for a second straight year in 2017, stillaround twice the national average, but below themassive influx of residents in 2014-2015 (populationgrowth exceeded 2.5% in back-to-back years).

Nonfarm payrolls increased by about 3% for a thirdstraight year in 2018, as job creation continued at animpressive clip.

A low cost of living and affordable home prices alsomake the metro attractive to businesses and residents.Historically, employment growth outperforms the nationalaverage, and nearly every industry, except formanufacturing, has surged past its prerecessionemployment peak. The leisure and hospitality andeducation and health services sectors continue to growrapidly, posting some of the strongest growth numbersthis cycle.

FORT COLLINS EMPLOYMENT BY INDUSTRY IN THOUSANDS

NAICS Industry Jobs LQ MarketUS USMarketUSMarket

Current Jobs Current Growth 10 Yr Historical 5 Yr Forecast

-0.21%0.75%1.06%3.42%1.07%2.16%1.015Manufacturing

0.36%1.01%1.23%2.12%0.56%-1.70%0.827Trade, Transportation and Utilities

0.26%0.90%0.88%1.29%-0.33%-3.00%1.019 Retail Trade

0.34%0.95%1.13%2.28%1.21%-0.14%0.77Financial Activities

0.66%1.60%0.04%3.39%0.51%1.75%1.641Government

0.33%0.65%2.50%4.10%2.40%2.15%1.312Natural Resources, Mining and Construction

0.66%0.58%2.14%1.06%2.41%2.92%0.719Education and Health Services

0.93%0.91%2.72%2.88%2.06%5.79%0.922Professional and Business Services

0.50%0.54%0.23%1.23%0.13%-0.92%0.93Information

0.65%0.96%2.54%3.31%2.06%2.02%1.223Leisure and Hospitality

0.26%1.56%1.07%2.71%1.58%1.70%1.07Other Services

Total Employment 175 1.0 1.78% 1.44% 2.77% 1.53% 1.05% 0.52%

Source: Oxford Economics

LQ = Location Quotient


Page 15

EconomyFort Collins Office


YEAR OVER YEAR JOB GROWTH

DEMOGRAPHIC TRENDS

Current ChangeCurrent Level

Metro U.S.Metro U.S.Demographic Category

10-Year Change

Metro U.S. Metro U.S.

Forecast Change (5 Yrs)

Population 329,689,375356,516 1.5% 0.7% 1.8% 0.7% 1.5% 0.7%

Households 121,374,891139,225 1.4% 0.5% 1.9% 0.6% 1.4% 0.6%

Median Household Income $65,293$75,088 4.3% 4.2% 3.0% 2.6% 4.1% 4.2%

Labor Force 163,676,484208,022 1.8% 0.8% 1.6% 0.6% 1.1% 0.5%

Unemployment 3.7%2.7% -0.3% -0.1% -0.4% -0.6% - -


POPULATION GROWTH


LABOR FORCE GROWTH INCOME GROWTH


Page 16

SubmarketsFort Collins Office

FORT COLLINS SUBMARKETS


Page 17

SubmarketsFort Collins Office

SUBMARKET INVENTORY

12 Month Deliveries Under Construction

Bldgs SF (000) Percent Rank

Inventory

Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.

1 Fort Collins/Loveland 11,170 95.7% 1 3 96 0.9% 1928 8 112 1.0% 1

2 Outlying Larimer County 506 4.3% 2 0 - - -62 2 8 1.6% 2

SUBMARKET RENT

Growth

Market Rent

Per SFSubmarketNo.

12 Month Market Rent QTD Annualized Market Rent

RankRank GrowthRank

1 Fort Collins/Loveland 5.9%1 1.4% 1$22.48 1

2 Outlying Larimer County 3.3%2 0.2% 2$20.12 2

SUBMARKET VACANCY & NET ABSORPTION

12 Month Net Absorption

Rank Construct. Ratio

Vacancy

SF % of InvSF PercentSubmarketNo. Rank

1 Fort Collins/Loveland 488,956 4.4% 2.642,641 0.4% 12

2 Outlying Larimer County 18,986 3.8% 3.82,085 0.4% 21


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Supply & Demand TrendsFort Collins Office

OVERALL SUPPLY & DEMAND

Net AbsorptionInventory

% of Inv Construction RatioSF SF Growth % Growth SFYear

2023 79,708 0.7% 0.7%85,123 0.911,960,957

2022 72,653 0.6% 0.7%82,062 0.911,881,249

2021 41,452 0.4% 0.7%80,231 0.511,808,596

2020 91,424 0.8% 0.6%73,603 1.211,767,144

2019 120,078 1.0% 0.6%67,754 1.811,675,720

YTD 120,078 1.0% 0.3%37,267 3.211,675,720

2018 33,845 0.3% 2.8%321,677 0.111,555,642

2017 337,594 3.0% 3.3%382,648 0.911,521,797

2016 303,505 2.8% 1.5%162,290 1.911,184,203

2015 31,086 0.3% -0.4%(42,368) -10,880,698

2014 129,654 1.2% 2.3%244,181 0.510,849,612

2013 (32,123) -0.3% 1.0%112,249 -10,719,958

2012 45,849 0.4% 1.5%157,694 0.310,752,081

2011 60,384 0.6% 1.9%208,542 0.310,706,232

2010 117,672 1.1% 2.7%282,803 0.410,645,848

2009 236,702 2.3% -0.4%(44,585) -10,528,176

2008 342,279 3.4% 1.0%98,411 3.510,291,474

2007 329,981 3.4% 4.5%446,156 0.79,949,195

4 & 5 STAR SUPPLY & DEMAND



2023 84,339 6.4% 5.6%78,081 1.11,398,331

2022 77,261 6.2% 5.1%66,629 1.21,313,992

2021 46,082 3.9% 4.5%55,578 0.81,236,731

2020 91,712 8.3% 4.5%54,108 1.71,190,649

2019 5,000 0.5% 2.3%25,217 0.21,098,937

YTD 5,000 0.5% 0.7%7,868 0.61,098,937

2018 26,144 2.4% 2.6%28,798 0.91,093,937

2017 138,970 15.0% 10.0%106,777 1.31,067,793

2016 156,217 20.2% 15.9%148,138 1.1928,823

2015 0 0% 2.5%19,472 0772,606

2014 104,188 15.6% 13.3%102,455 1.0772,606

2013 0 0% 1.2%7,821 0668,418

2012 0 0% 7.4%49,179 0668,418

2011 36,324 5.7% 4.9%32,665 1.1668,418

2010 82,000 14.9% 19.9%125,764 0.7632,094

2009 0 0% 0.1%376 0550,094

2008 138,261 33.6% 7.6%41,699 3.3550,094

2007 0 0% 4.9%20,270 0411,833


Page 19

Supply & Demand TrendsFort Collins Office

3 STAR SUPPLY & DEMAND



2023 0 0% 0.1%6,540 06,874,478

2022 0 0% 0.2%12,028 06,874,478

2021 0 0% 0.3%19,293 06,874,478

2020 4,000 0.1% 0.3%21,994 0.26,874,478

2019 108,784 1.6% 1.0%66,936 1.66,870,478

YTD 108,784 1.6% 0.7%51,175 2.16,870,478

2018 7,701 0.1% 4.1%276,641 06,761,694

2017 191,524 2.9% 3.7%253,206 0.86,753,993

2016 151,052 2.4% 0.1%8,891 17.06,562,469

2015 35,041 0.5% -1.9%(121,172) -6,411,417

2014 31,466 0.5% 1.8%116,440 0.36,376,376

2013 (20,623) -0.3% 0.5%34,069 -6,344,910

2012 35,270 0.6% 1.9%118,508 0.36,365,533

2011 39,102 0.6% 3.0%187,297 0.26,330,263

2010 35,672 0.6% 1.8%115,597 0.36,291,161

2009 224,233 3.7% 1.2%72,946 3.16,255,489

2008 180,245 3.1% 0.7%42,594 4.26,031,256

2007 316,577 5.7% 6.0%353,298 0.95,851,011

1 & 2 STAR SUPPLY & DEMAND



2023 (4,631) -0.1% 0%502 -3,688,148

2022 (4,608) -0.1% 0.1%3,405 -3,692,779

2021 (4,630) -0.1% 0.1%5,360 -3,697,387

2020 (4,288) -0.1% -0.1%(2,499) -3,702,017

2019 6,294 0.2% -0.7%(24,399) -3,706,305

YTD 6,294 0.2% -0.6%(21,776) -3,706,305

2018 0 0% 0.4%16,238 03,700,011

2017 7,100 0.2% 0.6%22,665 0.33,700,011

2016 (3,764) -0.1% 0.1%5,261 -3,692,911

2015 (3,955) -0.1% 1.6%59,332 -3,696,675

2014 (6,000) -0.2% 0.7%25,286 -3,700,630

2013 (11,500) -0.3% 1.9%70,359 -3,706,630

2012 10,579 0.3% -0.3%(9,993) -3,718,130

2011 (15,042) -0.4% -0.3%(11,420) -3,707,551

2010 0 0% 1.1%41,442 03,722,593

2009 12,469 0.3% -3.2%(117,907) -3,722,593

2008 23,773 0.6% 0.4%14,118 1.73,710,124

2007 13,404 0.4% 2.0%72,588 0.23,686,351


Page 20

Rent & VacancyFort Collins Office

OVERALL RENT & VACANCY

Market Rent

Per SF Index % Growth Vs Hist PeakYear

Vacancy

SF Percent Ppts Chg

2023 122 0.4% 4.9%$23.02 444,180 3.7% -0.1%

2022 122 0.6% 4.4%$22.92 448,568 3.8% -0.1%

2021 121 0.8% 3.9%$22.80 456,951 3.9% -0.3%

2020 120 0.9% 3.1%$22.62 494,649 4.2% 0.1%

2019 119 2.1% 2.1%$22.42 475,955 4.1% 0.4%

YTD 119 1.9% 1.9%$22.37 507,942 4.4% 0.7%

2018 116 3.3% 0%$21.95 425,131 3.7% -2.5%

2017 113 -2.0% -3.1%$21.26 712,963 6.2% -0.6%

2016 115 6.7% -1.2%$21.68 758,017 6.8% 0.6%

2015 108 6.1% -7.4%$20.32 672,802 6.2% 0.7%

2014 102 6.3% -12.7%$19.16 599,348 5.5% -1.1%

2013 96 3.7% -17.9%$18.02 713,875 6.7% -1.3%

2012 92 3.5% -20.8%$17.39 858,247 8.0% -1.1%

2011 89 0.7% -23.4%$16.80 970,092 9.1% -1.4%

2010 89 -5.0% -23.9%$16.69 1,118,250 10.5% -1.7%

2009 93 -6.7% -19.9%$17.58 1,283,381 12.2% 2.5%

2008 100 -3.5% -14.1%$18.85 1,002,094 9.7% 2.1%

2007 104 3.1% -11.0%$19.53 758,226 7.6% -1.5%

4 & 5 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 135 0.2% 8.4%$33.43 90,661 6.5% 0.1%

2022 135 0.5% 8.2%$33.38 84,440 6.4% 0.5%

2021 134 1.1% 7.7%$33.23 73,850 6.0% -1.0%

2020 133 2.1% 6.5%$32.86 83,386 7.0% 2.8%

2019 130 4.3% 4.3%$32.17 45,782 4.2% -1.9%

YTD 129 3.6% 3.6%$31.94 63,131 5.7% -0.3%

2018 125 6.2% 0%$30.84 65,999 6.0% -0.4%

2017 117 4.2% -5.8%$29.04 68,653 6.4% 2.5%

2016 113 2.0% -9.6%$27.87 36,460 3.9% 0.3%

2015 110 2.4% -11.4%$27.32 28,381 3.7% -2.5%

2014 108 4.9% -13.5%$26.69 47,853 6.2% -0.7%

2013 103 0.7% -17.5%$25.44 46,120 6.9% -1.2%

2012 102 4.7% -18.1%$25.27 53,941 8.1% -7.4%

2011 98 -3.2% -21.7%$24.14 103,120 15.4% -0.3%

2010 101 2.8% -19.2%$24.93 99,461 15.7% -10.3%

2009 98 -2.0% -21.4%$24.24 143,225 26.0% -0.1%

2008 100 6.4% -19.8%$24.74 143,601 26.1% 14.7%

2007 94 1.3% -24.6%$23.25 47,039 11.4% -4.9%


Page 21

Rent & VacancyFort Collins Office

3 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 117 0.5% 4.6%$23.25 205,376 3.0% -0.1%

2022 116 0.7% 4.0%$23.14 211,916 3.1% -0.2%

2021 116 0.9% 3.3%$22.98 223,944 3.3% -0.3%

2020 115 1.2% 2.4%$22.77 243,237 3.5% -0.3%

2019 113 3.5% 1.2%$22.50 261,231 3.8% 0.5%

YTD 113 3.2% 0.9%$22.44 278,487 4.1% 0.8%

2018 109 1.9% -2.2%$21.75 220,878 3.3% -4.0%

2017 107 -4.0% -4.0%$21.34 489,818 7.3% -1.2%

2016 112 8.3% 0%$22.24 551,500 8.4% 1.1%

2015 103 8.0% -7.7%$20.53 465,339 7.3% 2.4%

2014 96 5.2% -14.5%$19.02 309,126 4.8% -1.4%

2013 91 3.6% -18.7%$18.08 394,100 6.2% -0.8%

2012 88 4.6% -21.5%$17.45 448,792 7.1% -1.4%

2011 84 0.7% -24.9%$16.69 532,030 8.4% -2.4%

2010 83 -8.8% -25.5%$16.57 680,225 10.8% -1.3%

2009 91 -8.5% -18.3%$18.17 760,150 12.2% 2.1%

2008 100 -5.7% -10.7%$19.87 608,863 10.1% 2.0%

2007 106 5.8% -5.3%$21.06 471,212 8.1% -1.1%

1 & 2 STAR RENT & VACANCY

Market Rent


Vacancy

SF Percent Ppts Chg

2023 128 0.4% -1.1%$19.25 148,143 4.0% -0.1%

2022 127 0.3% -1.5%$19.18 152,212 4.1% -0.2%

2021 127 0.3% -1.8%$19.11 159,157 4.3% -0.2%

2020 127 -0.4% -2.1%$19.06 168,026 4.5% 0%

2019 127 -1.7% -1.7%$19.13 168,942 4.6% 0.8%

YTD 127 -1.4% -1.4%$19.18 166,324 4.5% 0.8%

2018 129 4.7% 0%$19.47 138,254 3.7% -0.4%

2017 123 -0.3% -4.5%$18.60 154,492 4.2% -0.4%

2016 124 5.6% -4.1%$18.66 170,057 4.6% -0.2%

2015 117 4.0% -9.2%$17.67 179,082 4.8% -1.7%

2014 113 9.3% -12.7%$16.99 242,369 6.5% -0.8%

2013 103 5.5% -20.2%$15.54 273,655 7.4% -2.2%

2012 98 0.6% -24.3%$14.74 355,514 9.6% 0.5%

2011 97 2.6% -24.7%$14.65 334,942 9.0% -0.1%

2010 95 -0.4% -26.6%$14.28 338,564 9.1% -1.1%

2009 95 -4.8% -26.3%$14.34 380,006 10.2% 3.5%

2008 100 -2.9% -22.6%$15.06 249,630 6.7% 0.2%

2007 103 -2.4% -20.4%$15.50 239,975 6.5% -1.6%


Page 22

Sale TrendsFort Collins Office

OVERALL SALES

Completed Transactions (1)

Turnover Avg Price/SFDeals VolumeYear

Market Pricing Trends (2)

Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate

2023 -- - -- 164- $199.39 8.1%

2022 -- - -- 163- $197.98 8.0%

2021 -- - -- 163- $198.39 7.8%

2020 -- - -- 160- $194.77 7.8%

2019 -- - -- 154- $187.21 7.9%

YTD $81.0 M75 5.3% $149.12$2,084,794 1536.5% $186.21 8.0%

2018 $79.6 M81 5.7% $179.02$1,847,398 1527.2% $185.04 7.8%

2017 $52.8 M74 3.4% $179.95$1,126,675 1517.1% $183.49 7.7%

2016 $57.0 M71 4.8% $166.13$1,212,911 1507.8% $182.01 7.7%

2015 $119.8 M137 10.2% $178.82$2,112,456 1427.0% $172.27 7.8%

2014 $54.1 M90 5.1% $133.51$1,263,963 1437.0% $174.19 7.7%

2013 $99.3 M83 6.0% $186.25$3,013,027 1337.5% $161.67 8.0%

2012 $46.1 M82 4.6% $110.82$1,058,416 1208.9% $145.63 8.4%

2011 $36.5 M54 2.7% $147.70$1,195,529 1147.1% $138.13 8.7%

2010 $47.8 M47 3.6% $164.30$1,542,335 1017.9% $122.54 9.4%

2009 $13.5 M25 1.0% $149.78$810,921 857.4% $103.38 10.6%

2008 $38.5 M65 3.1% $137.03$1,017,867 1007.8% $121.42 9.8%

(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.

(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

4 & 5 STAR SALES





2023 -- - -- 150- $269.84 8.1%

2022 -- - -- 150- $268.61 8.0%

2021 -- - -- 150- $269.21 7.9%

2020 -- - -- 147- $263.37 7.8%

2019 -- - -- 139- $250.18 8.0%

YTD $9.7 M1 5.3% $165.11$9,695,000 138- $247.57 8.0%

2018 -- - -- 145- $259.33 7.6%

2017 -- - -- 148- $264.75 7.3%

2016 $2.1 M3 1.9% $331.39- 145- $260.59 7.3%

2015 $35.4 M5 43.9% $254.98$11,615,100 1417.0% $252.92 7.3%

2014 -- - -- 144- $258.03 7.2%

2013 $32.0 M6 39.0% $167.88$32,000,000 1337.0% $239.22 7.5%

2012 $0 M2 2.0% -- 121- $216.70 7.9%

2011 $2.9 M2 1.5% $283.31- 114- $204.55 8.2%

2010 $14.2 M1 9.2% $244.36$14,200,000 101- $180.58 8.9%

2009 -- - -- 86- $154.41 10.0%

2008 $0.6 M1 0.5% $205.70- 100- $179.42 9.3%




Page 23

Sale TrendsFort Collins Office

3 STAR SALES





2023 -- - -- 163- $201.43 8.1%

2022 -- - -- 161- $199.86 8.1%

2021 -- - -- 161- $200.00 7.9%

2020 -- - -- 158- $196.05 7.9%

2019 -- - -- 152- $187.90 8.0%

YTD $50.6 M41 5.6% $141.14$3,039,718 1516.3% $186.71 8.0%

2018 $52.0 M44 6.7% $180.79$2,416,163 1487.1% $183.55 7.9%

2017 $31.6 M34 2.9% $192.38$1,587,459 1487.1% $183.62 7.8%

2016 $37.0 M35 5.8% $181.67$2,048,233 1477.8% $182.28 7.7%

2015 $50.9 M66 5.7% $179.04$2,234,512 1397.0% $172.68 7.8%

2014 $33.1 M50 5.2% $137.81$1,481,376 1447.0% $178.86 7.6%

2013 $59.4 M42 4.4% $227.78$3,505,621 1368.2% $167.89 7.9%

2012 $27.8 M41 4.3% $121.06$1,707,813 1229.4% $150.66 8.3%

2011 $19.0 M26 2.1% $190.87$2,004,625 1156.6% $142.71 8.6%

2010 $22.1 M22 2.0% $179.62$1,756,400 1029.0% $126.38 9.3%

2009 $4.7 M11 0.6% $192.33$2,600,000 859.3% $105.29 10.6%

2008 $20.8 M34 3.0% $140.05$2,281,926 1007.8% $123.85 9.8%



1 & 2 STAR SALES





2023 -- - -- 176- $172.82 8.0%

2022 -- - -- 175- $171.68 7.9%

2021 -- - -- 176- $172.50 7.7%

2020 -- - -- 173- $170.23 7.7%

2019 -- - -- 169- $165.56 7.8%

YTD $20.6 M33 4.8% $164.41$1,025,389 1697.0% $165.45 7.8%

2018 $27.6 M37 5.7% $175.77$1,245,176 1677.3% $163.78 7.7%

2017 $21.2 M40 5.2% $164.14$819,485 160- $156.97 7.7%

2016 $17.9 M33 3.7% $134.51$678,305 1598.1% $156.13 7.7%

2015 $33.4 M66 10.8% $135.65$979,756 1487.1% $145.42 7.8%

2014 $21.1 M40 6.1% $127.29$1,058,629 1417.0% $138.42 7.9%

2013 $7.9 M35 2.9% $96.75$449,935 127- $125.07 8.3%

2012 $18.3 M39 5.5% $98.21$691,366 1158.4% $113.36 8.8%

2011 $14.6 M26 3.9% $106.33$764,011 1107.5% $108.17 9.0%

2010 $11.5 M24 5.3% $104.70$485,313 986.8% $96.65 9.8%

2009 $8.8 M14 1.8% $133.88$673,299 856.5% $83.35 10.9%

2008 $17.2 M30 3.6% $132.11$716,901 1007.5% $98.16 10.1%




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