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DTZ_National_Office_Report_Q2_15I01 j g. � .s� r' .ate" 41. , 4� I� _+.. . r✓„rte �• ��.41100 40W 4P, yac- 4_ U.S. Office Trends Report _ .h. 2nd Quarter 2015 4. It, '•ll J K; IWO Contents U.S. Office Sector Analysis ................................................. ...................................... ................ .... 3-4 InvestmentSales.................................................................................................................................5 NetAbsorption by Metro..............................................................................................................6-7 VacancyRates by Metro...............................................................................................................8-9 AskingRents by Metro................................................................................................................10-11 Inventoryby Metro.......................................................................................................................12-13 Methodology.......................................................................................................................................14 Contacts: Kevin Thorpe Chief Economist 2101 L Street, NW, Ste. 700 Washington, DC 20037 Kevin.Thorpe@dtz.com Jennifer Edwards Research Manager 2101 L Street, NW, Ste. 700 Washington, DC 20037 Jennifer. Edwards@dtz.com Rebecca Rockey Economist 2101 L Street, NW, Ste. 700 Washington, DC 20037 Rebecca. Rockey@dtz.com 2 1 DTZ Economy Midway through 2015, we see patterns quite similar to those we have seen before -weak Market Indicators growth (or contraction) in the first quarter followed by stronger growth in the remaining Q2 Trend quarters. This year, first quarter real GDP contracted at a -0.2% annualized rate. That figure 2015 (from prevtnusQtr) was revised upwards from the earlier estimate of -0.7%. Real GDP in the second quarter of 2015 is already tracking much stronger, but will still likely fail to surpass the 2.5% mark. Net Absorption 20.9M IAL After having contributed to that negative GDP growth in the first quarter, the energy sector is now showing signs of stabilization. A rebound in gas prices -from $2.05 per gallon in Vacancy 14.2% 0 January to $2.78 per gallon in late June -is helping ameliorate some of the pain felt by Net Absorption, Selected Markets Q2 2015 major oil and gas firms that had to make significant cuts in exploration and mining when Asking Rents $22.92 IAL prices were dropping. Those cuts are certainly not over -job losses in energy-related 15.4% sectors continue to mount. But there is evidence that the worst of the oil price correction Under is behind us. Still, there have been over 25,600 energy-related layoffs in Texas since prices Construction 108.5M started to fall, most of which have happened in the last six months. The next several months of data will be crucial in determining whether or not these trends are decelerating. The labor markets continue to provide evidence of a solid economic foundation. After disappointing employment numbers in March and April, job creation came back to life in May and June, registering a combined gain of 477,000 net new jobs. Exactly one-third of the 1.25 million jobs created in 2015 have been in office -using sectors, with administration, professional and technical services, and finance and insurance accounting for nearly all of the office -using job growth. We have many reasons to expect job growth to remain equally robust throughout the rest of the year. For the first time since 2000 -when the Job Openings and Labor Turnover Survey (JOLTS) began -the number of job openings currently exceeds the number of hires. The most recent data, released in May, revealed 5.4 million positions are waiting to be filled, compared to 4.6 million in May 2014. In addition, nearly a quarter of those additional 750,000 jobs are business and professional positions. Given that job openings are a harbinger of job creation, we expect job growth to average a monthly pace of 240,000 for the rest of the year. Office Sector After a weak start to the year, the U.S. office sector was back on track in the second quarter of 2015. Demand for office space was 20.9 million square feet (msf) in the second quarter, nearly double the 11.4 msf absorbed in the first quarter of the year. Although the trend towards space efficiency continues to work against a full office -sector recovery, the robust office -using job growth numbers are now pushing absorption back to pre -recession levels in most major markets. The vacancy rate declined 20 basis points (bps) to 14.2% in the second quarter, down from 14.4% last quarter; vacancy is down 80 bps from a year ago. While there is still room for vacancy rates to decline further -vacancy was 12.8% at the peak of the last cycle in the third quarter of 2007 -they are low enough to drive modest rental growth. Year -over -year growth in asking rents has exceeded 2% for six consecutive quarters; second- quarter 2015 rent growth was 2.5% -with rents at a cyclical high of $22.92 per square foot, up from $22.32 in the second quarter of last year. Of the 80 metros tracked, 57 reported rental rate increases in the second quarter compared to 53 that registered increases in the first quarter. Construction volume surged to 108.5 msf in the second quarter after hitting 98.5 msf in the first quarter. Although new development is ramping up, demand remains sufficient. In fact, net absorption has exceeded deliveries in every single quarter since the third quarter of 2010. However, the volume of deliveries relative to demand is rising -deliveries over the past four quarters were 61% of demand, up from 52% in the second quarter of 2013. As this relationship between deliveries and demand inches upwards, we expect to see deceleration in rental rate growth and a decline in building activity sometime in 2018. U.S. Net Absorption vs. Vacancy Net Absorption, Selected Markets Q2 2015 28 15.4% 4.0 24 3.5 20 15.0% 3.0 2.5 16 2.0 m 14.6% 12 � m 1.5 8 m 1.0 14.2% 0'o I,IIII��.�;.1,�111�■■■...---- 4 0 13.8% 0.5 C N T w O ca X L s N Q O '- m U w O N N O N N Q) '- omm °mEoZa om 0� mt°. of C2 C2 V 7 7 7 ltd t() � m a��y �> anZ>C 5: C 5 N N O O C N O N O-- O 16 N y (0 E N C J E E p t0 o6c CL¢L rR 3� NL H O'-' a a) C O U Crn C)Um N N LCJULL N Ci M V C� O Ci N co V N O O C� O Ci w lil NU d Z Z �m � dU TUU m c_' -@-p ° � c �MEZ cJ sU in ° m jY c m U to 2 U =Absorption Vacancy Rate o) o Source: DTZ Research Source: DTZ Research www.dtz.com 1 3 Another wide-ranging development is the dynamic between growth in CBDs and the Asking Rents suburbs. We are now observing a transition to demand for Class B CBD space, and in some Select Markets, Avg. Rent Q2 2015 instances, suburban space -enough to drive substantial differences in rent appreciation rates. The general theme we are seeing is tenant demand has turned robust in almost Rents Yr/Yr % Chg. every CBD in the U.S. regardless of product type. Markets that have seen year -over -year rent growth for Class B CBD exceed Class A CBD (as well as suburban space) include San New York, NY $70.09 3.0% Francisco, New York City, Oakland and Northern New Jersey. There are some rare instances San Francisco, CA $66.77 14.5% where suburban rent growth is outpacing that of Class A CBD space; this is especially true Washington, DC $51.36 1.9% in the white-hot San Jose market. San Mateo County, CA $47.04 8.1% Investment sales between January and May totaled $54.7 billion, up $15 billion from the San Jose -Silicon Valley, CA $34.24 4.5% $39.7 billion during the same period a year ago. Cap rates declined 40 bps since the start San Diego, CA $33.24 6.1% of the year, down from 6.8% in January to 6.4% in May. Cap rates compressed in both CBD Boston, MA $32.85 5.9% and suburban transactions -declining to 5.7% from 6.0% for CBD properties, and to 6.9% Los Angeles, CA $31.92 3.9% from 7.3% for suburban ones. Global uncertainty has resulted in capital flows pouring into the U.S. at a record pace: through July 8th of this year, year-to-date foreign investment Suburban VA $31.64 -0.2% in U.S. commercial real estate is up 63% compared to the same period last year. This Chicago, IL $28.56 2.6% aggressive inflow of capital is pushing office prices upward to new heights, particularly for Houston, Tx $28.55 1.3% CBD assets. Average pricing is up 20.3% over its average from the same January through Northern NJ $27.65 2.0% May timeframe last year; pricing on suburban assets has grown three times faster than that Suburban MD $26.12 -0.6% of CBD assets, 32.5% versus 10.3%. Minneapolis, MN $25.99 4.5% Central NJ $24.72 0.6% Outlook Oakland -East Bay, CA $24.26 8.6% Although we remain alert to changes in the underlying economic and financial drivers, Denver, CO $24.09 5.6% the probability that any of these will sink the U.S. economic expansion is low. The Dow Baltimore, MD $22.93 2.8% Jones Industrial Average has risen almost 70% since the Greek crisis officially began in 2010. Puerto Rico debt totals $72 billion, just one-quarter of monthly tax revenue in the phoenix, AZ $22.76 4.5% U.S. These debt -related crises are not systemic in nature and will have fairly muted overall Dallas, Tx $21.88 3.1% impacts on the U.S. economy. China's economy has been wobbling for two and a half years Charlotte, NC $21.77 5.7% but it has yet to derail the U.S. growth trajectory. Furthermore, in addition to the $5 trillion Nashville, TN $21.49 7.6% that China has in its coffers, which can be used to stimulate growth at any given time, there is a cultural difference in the way Chinese individuals and corporations view equity Raleigh, NC $21.18 3.3% markets. Nevertheless, we anticipate extraordinary measures by the People's Bank of China Sacramento, CA $20.64 1.2% to stabilize the Chinese stock markets. Also worth noting: whenever there is choppiness Tampa, FL $20.56 3.1% overseas, investors flock to safe havens. That has a tendency to push U.S. Treasury rates Atlanta, GA $20.48 4.4% lower. If the global economic picture worsens, it is not out of the realm of possibility that the Columbus, OH $20.33 2.7% 10 -year Treasury could dip below 2% again. St. Louis, MO $19.06 1.0% The U.S. economy is off and running. Barring a major exogenous shock or contagion, expect Kansas City, MO $18.63 3.6% GDP growth to average 2.5% in 2015 -good enough to generate around 2.9 million jobs. The Indianapolis, IN $18.11 0.2% U.S. office sector will register 80 msf of absorption, vacancy rates will fall to 14%, and rent Louisville, KY $17.65 1.7% growth will surpass 3%. Milwaukee, WI $17.29 2.9% Cincinnati, OH $17.09 -2.4% Dayton, OH $14.56 -0.9% Source: DTZ Research Job Openings (000s) Nonfarm Openings: 5.4 million Source: BLS 4 1 DTZ ■ Professional & Business Services •Trade, Transportation, Utilities ■ Education & Healthcare • Leisure & Hospitality e Retail • Government ■ Manufacturing • Construction Job Growth Month -over -month, 000s 450 400 350 300 250 200 150 100 50 0 0 N N N N N N N N N N N N Q W 0 Z 0 ii Q g ■ Total Nonfarm ■ Office -Using Source: BLS Office Sales Volume Select Markets, Jan - July 2015 Source: Real Capital Analytics, DTZ Research U.S. Office Sales Volume $21 $18 $15 c $12 0 m $9 Avg. _ $7.6B $6 $0 O O N N N M M >. a >, o. c >, oa c >, o_ c >, L c >, M N M M N M t6 N M t6 N f6 co N f6 co Source: Real Capital Analytics U.S. Office Cap Rates 9% 8% 7% 6% 5% 4% O O N N N M M C�, Q C J, Q Ca) M cc —CBD —Suburban Source: Real Capital Analytics U.S. Office Acquisitions by Buyer Type M ' ! u7 u7 Q C L C 0 O m 2 0 3 2 $240 $ Volume (Millions) Avg PSF Manhattan, NY $12,780.3 $963 Chicago, IL $4,458.8 $259 San Jose, CA $4,284.5 $384 Boston, MA $3,729.9 $298 DC Metro $3,610.7 $437 San Francisco, CA $3,548.4 $524 kLos Angeles, CA $2,917.9 $342 Seattle, WA $2,720.3 $353 [Atlanta, GA $2,226.7 $161 Northern NJ $1,768.6 $209 Denver, CO $1,530.9 $197 Houston, TX $1,454.6 $299 Phoenix, AZ $1,389.7 $176 Dallas, TX $1,288.5 $157 San Diego, CA $1,193.6 $280 Raleigh/Durham, INC $923.2 $187 Minneapolis, MN $721.3 $108 Miami, FL $695.9 $246 St. Louis, MO $596.8 $63 Charlotte, NC $542.8 $182 East Bay, CA $406.6 $174 Nashville, TN $330.0 $178 Baltimore, MD $317.7 $168 Milwaukee, WI $265.9 $117 Indianapolis, IN $256.5 $91 Cincinnati, OH $226.0 $130 Louisville, KY $224.3 $141 Sacramento, CA $193.7 $147 Tampa, FL $126.6 $119 Columbus, OH $58.5 $74 Kansas City, MO $49.7 N/A Source: Real Capital Analytics, DTZ Research U.S. Office Sales Volume $21 $18 $15 c $12 0 m $9 Avg. _ $7.6B $6 $0 O O N N N M M >. a >, o. c >, oa c >, o_ c >, L c >, M N M M N M t6 N M t6 N f6 co N f6 co Source: Real Capital Analytics U.S. Office Cap Rates 9% 8% 7% 6% 5% 4% O O N N N M M C�, Q C J, Q Ca) M cc —CBD —Suburban Source: Real Capital Analytics U.S. Office Acquisitions by Buyer Type M ' ! u7 u7 Q C L C 0 O m 2 0 3 2 $240 $200 u $160 c _° $120 m $80 $40 N 79 $O...II=�III�I:■ 01' 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' 12' 13' 14' Q1 Q1 14 15 ■ Cross -Border ■ Inst'I/Eq Fund Listed/REITs n Private ■ User/other Source: Real Capital Analytics www.dtz.com 1 5 6 1 DTZ 2012 2013 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p United States 46,869,000 51,023,000 74,549,000 17,236,000 21,771,000 24,334,000 11,371,000 20,904,000 Northeast 2,369,000 13,338,000 14,444,000 3,063,000 5,923,000 3,224,000 -1,348,000 1,460,000 Midwest 4,992,000 6,677,000 7,924,000 2,148,000 1,446,000 3,289,000 591,000 2,416,000 South 18,422,000 16,629,000 24,685,000 4,688,000 6,727,000 8,590,000 6,852,000 7,620,000 West 21,087,000 14,379,000 27,496,000 7,338,000 7,674,000 9,232,000 5,274,000 9,408,000 Albuquerque, NM 113,000 15,000 138,000 112,000 15,000 22,000 140,000 185,000 Atlanta -Sandy Springs -Marietta, GA 1,624,000 1,314,000 3,000,000 539,000 461,000 779,000 661,000 993,000 Austin -Round Rock, TX 1,408,000 631,000 676,000 221,000 189,000 52,000 312,000 509,000 Baltimore, MD 710,000 1,028,000 1,268,000 227,000 635,000 157,000 224,000 349,000 Birmingham -Hoover, AL 255,000 35,000 222,000 55,000 12,000 149,000 79,000 77,000 Boston -Cambridge, MA 691,000 1,749,000 2,300,000 569,000 871,000 786,000 846,000 -60,000 Buffalo -Niagara Falls, NY 195,000 -530,000 201,000 -39,000 219,000 66,000 37,000 89,000 Charleston -North Charleston, SC 255,000 72,000 192,000 -23,000 17,000 110,000 264,000 115,000 Charlotte -Gastonia -Concord, NC -SC 1,370,000 1,445,000 1,362,000 287,000 485,000 292,000 183,000 228,000 Chattanooga, TN -GA 53,000 -186,000 -65,000 -58,000 -19,000 26,000 46,000 71,000 Chicago -Joliet -Naperville, IL -IN -WI 2,191,000 1,488,000 3,600,000 644,000 794,000 1,530,000 120,000 1,078,000 Cincinnati -Middletown, OH -KY -IN 125,000 215,000 88,000 -104,000 118,000 167,000 132,000 69,000 Cleveland -Elyria -Mentor, OH 107,000 349,000 249,000 173,000 88,000 125,000 37,000 245,000 Colorado Springs, CO 249,000 426,000 -18,000 17,000 8,000 -40,000 96,000 -4,000 Columbia, SC -374,000 -34,000 181,000 66,000 84,000 105,000 114,000 72,000 Columbus, OH 290,000 246,000 300,000 150,000 143,000 -33,000 98,000 203,000 Dallas, TX 1,495,000 2,703,000 3,756,000 470,000 1,686,000 744,000 1,080,000 1,465,000 Dayton, OH 231,000 127,000 298,000 -11,000 142,000 155,000 40,000 38,000 Denver -Aurora, CO 1,341,000 1,892,000 2,437,000 484,000 955,000 572,000 192,000 622,000 Detroit -Warren -Livonia, MI 36,000 379,000 425,000 -4,000 24,000 267,000 34,000 133,000 Fairfield County, CT -416,000 452,000 -726,000 -388,000 369,000 -1,002,000 -283,000 -12,000 Ft. Lauderdale, FL 195,000 470,000 588,000 224,000 107,000 214,000 -72,000 215,000 Greensboro -Winston-Salem, NC 297,000 -104,000 318,000 -4,000 181,000 166,000 -132,000 23,000 Greenville, SC 324,000 156,000 -174,000 -42,000 121,000 20,000 74,000 6,000 Hartford -West Hartford -East Hartford, CT -47,000 176,000 623,000 206,000 130,000 49,000 164,000 -89,000 Honolulu, HI 197,000 145,000 -96,000 -50,000 -170,000 105,000 4,000 -88,000 Houston, TX 4,546,000 3,741,000 6,893,000 1,345,000 843,000 3,037,000 1,742,000 -220,000 Indianapolis, IN 454,000 493,000 245,000 62,000 78,000 40,000 10,000 119,000 Jacksonville, FL 89,000 115,000 267,000 -126,000 120,000 189,000 47,000 133,000 Kansas City, MO -KS 603,000 573,000 396,000 110,000 -132,000 292,000 105,000 -97,000 Knoxville, TN 157,000 -251,000 153,000 16,000 71,000 89,000 140,000 -85,000 Las Vegas -Paradise, NV 925,000 271,000 716,000 243,000 354,000 212,000 -75,000 253,000 Lexington -Fayette, KY 119,000 -111,000 -11,000 24,000 -33,000 -15,000 127,000 56,000 Little Rock -N. Little Rock, AR -12,000 5,000 150,000 0 2,000 152,000 6,000 107,000 Long Island, NY 190,000 308,000 -228,000 81,000 -278,000 -66,000 -145,000 300,000 Los Angeles -Long Beach -Glendale, CA 1,665,000 710,000 3,247,000 696,000 754,000 1,343,000 50,000 1,233,000 Louisville, KY -IN -77,000 606,000 392,000 112,000 110,000 22,000 111,000 106,000 Madison, WI 231,000 160,000 -113,000 81,000 -106,000 -10,000 130,000 152,000 Memphis, TN -MS -AR 72,000 -93,000 279,000 115,000 -29,000 81,000 353,000 22,000 Miami -Dade, FL 964,000 1,146,000 1,220,000 393,000 340,000 306,000 -6,000 301,000 Milwaukee -Waukesha -West Allis, WI 79,000 350,000 472,000 222,000 89,000 41,000 -110,000 -198,000 Minneapolis -St. Paul -Bloomington, MN -WI 438,000 724,000 1,329,000 317,000 394,000 434,000 160,000 133,000 6 1 DTZ Methodology and data sources explained on page 14 p = preliminary r = revision www.dtz.com 1 7 2012 2013 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p Nashville -Davidson -Murfreesboro, TN 1,102,000 36,000 767,000 299,000 121,000 294,000 280,000 453,000 New Haven -Milford, CT 100,000 -118,000 -13,000 -8,000 15,000 28,000 15,000 14,000 Northern New Jersey -812,000 514,000 603,000 285,000 627,000 -634,000 -89,000 110,000 Central New Jersey -433,000 2,108,000 690,000 110,000 332,000 -279,000 113,000 270,000 New Orleans -Metairie -Kenner, LA 227,000 -52,000 227,000 70,000 61,000 21,000 -47,000 54,000 New York, NY 2,602,000 7,116,000 9,301,000 1,454,000 2,743,000 3,561,000 -1,719,000 709,000 Oakland -East Bay, CA 2,224,000 458,000 1,124,000 276,000 429,000 245,000 996,000 1,396,000 Oklahoma City, OK 2,722,000 -2,000 287,000 -62,000 200,000 22,000 251,000 95,000 Omaha, NE -IA 45,000 702,000 278,000 211,000 4,000 -5,000 -101,000 76,000 Orange County, CA (Anaheim -Santa Ana) 1,306,000 819,000 2,254,000 1,084,000 471,000 1,318,000 147,000 406,000 Orlando, FL 414,000 832,000 316,000 -88,000 153,000 157,000 256,000 282,000 Philadelphia -Camden -Wilmington, PA -NJ -DE 222,000 1,037,000 1,431,000 870,000 362,000 562,000 -371,000 723,000 Phoenix -Mesa -Scottsdale, AZ 1,778,000 1,173,000 2,401,000 736,000 436,000 597,000 64,000 850,000 Pittsburgh, PA 467,000 264,000 423,000 -25,000 383,000 231,000 166,000 -40,000 Portland -South Portland -Biddeford, ME -120,000 295,000 -150,000 29,000 -27,000 -159,000 -61,000 9,000 Portland -Vancouver -Beaverton, OR -WA 774,000 54,000 1,085,000 244,000 41,000 418,000 131,000 96,000 Raleigh-Durham, NC 215,000 770,000 1,458,000 254,000 479,000 768,000 230,000 828,000 Rochester, NY -231,000 9,000 122,000 -5,000 23,000 18,000 102,000 36,000 Sacramento -Arden -Arcade -Roseville, CA 876,000 1,047,000 737,000 110,000 194,000 12,000 259,000 257,000 Saint Louis, MO -IL 133,000 784,000 367,000 370,000 -183,000 264,000 -190,000 265,000 Salt Lake City, UT 405,000 280,000 316,000 133,000 67,000 -16,000 78,000 69,000 San Antonio, TX 1,085,000 491,000 874,000 181,000 302,000 250,000 205,000 146,000 San Diego -Carlsbad -San Marcos, CA 1,192,000 887,000 1,412,000 -251,000 650,000 846,000 178,000 187,000 San Francisco, CA 2,328,000 779,000 3,235,000 539,000 566,000 1,040,000 437,000 66,000 San Jose -Silicon Valley, CA 3,588,000 2,755,000 3,567,000 1,809,000 1,448,000 1,099,000 1,445,000 3,754,000 San Mateo County, CA -357,000 653,000 2,270,000 342,000 982,000 392,000 981,000 2,000 Seattle -Tacoma -Bellevue, WA 2,429,000 1,961,000 2,529,000 759,000 507,000 979,000 279,000 64,000 Suburban MD 364,000 219,000 -1,146,000 334,000 -300,000 -213,000 116,000 -80,000 Suburban VA -2,015,000 -132,000 -380,000 142,000 -35,000 -426,000 -197,000 370,000 Syracuse, NY -155,000 121,000 -241,000 20,000 7,000 1,000 -14,000 132,000 Tampa -St. Petersburg -Clearwater, FL 70,000 922,000 790,000 4,000 215,000 436,000 284,000 297,000 Tucson, AZ -65,000 -92,000 -12,000 0 -30,000 68,000 -22,000 22,000 Tulsa, OK 383,000 85,000 163,000 -87,000 88,000 77,000 7,000 134,000 Ventura County, CA 121,000 147,000 154,000 55,000 -3,000 21,000 -105,000 39,000 Washington, DC -95,000 551,000 -490,000 -321,000 -256,000 198,000 -25,000 275,000 Westchester County, NY 115,000 -163,000 110,000 -97,000 147,000 63,000 -107,000 -730,000 West Palm Beach -Boca Raton, FL 483,000 218,000 1,151,000 121,000 316,000 331,000 139,000 223,000 Wichita, KS 30,000 87,000 -10,000 -72,000 -6,000 21,000 127,000 200,000 Methodology and data sources explained on page 14 p = preliminary r = revision www.dtz.com 1 7 8 1 DTZ Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p 15.0% 2012 2013 2014 14.2% 15.8% (Quarterly Average) 15.6% United States 15.8% 15.3% 14.9% Northeast 16.0% 15.6% 15.7% Midwest 19.3% 19.0% 18.3% South 14.6% 14.2% 13.9% West 14.9% 14.2% 13.4% Albuquerque, NM 14.1% 13.5% 13.9% Atlanta -Sandy Springs -Marietta, GA 20.3% 19.6% 18.3% Austin -Round Rock, TX 10.6% 8.6% 8.1% Baltimore, MD 18.7% 17.0% 16.0% Birmingham -Hoover, AL 10.2% 9.0% 8.9% Boston -Cambridge, MA 13.5% 12.1% 11.5% Buffalo -Niagara Falls, NY 11.0% 11.4% 13.8% Charleston -North Charleston, SC 10.3% 10.7% 9.8% Charlotte -Gastonia -Concord, NC -SC 12.3% 11.6% 10.3% Chattanooga, TN -GA 13.6% 16.9% 18.6% Chicago -Joliet -Naperville, IL -IN -WI 17.1% 16.4% 15.7% Cincinnati -Middletown, OH -KY -IN 24.7% 23.9% 23.5°% Cleveland -Elyria -Mentor, OH 21.3% 22.S% 22.0% Colorado Springs, CO 13.3% 11.9% 12.1% Columbia, SC 15.7% 16.9% 15.3% Columbus, OH 16.5% 16.2% 16.1% Dallas, TX 21.1% 20.3% 19.4% Dayton, OH 28.9% 29.3% 27.3% Denver -Aurora, CO 12.6% 12.0% 11.2% Detroit -Warren -Livonia, MI 23.8% 23.1% 22.6% Fairfield County, CT 21.8% 21.8% 21.6% Ft. Lauderdale, FL 17.1% 16.2% 14.3% Greensboro -Winston-Salem, NC 16.6% 16.5% 16.7% Greenville, SC 15.6% 13.0% 13.7% Hartford -West Hartford -East Hartford, CT 23.9% 23.2% 20.9% Honolulu, HI 6.2°% 5.6% 5.7% Houston, TX 11.9% 11.5% 10.8% Indianapolis, IN 20.0% 19.5% 19.3% Jacksonville, FL 16.6% 16.5% 16.3% Kansas City, MO -KS 20.5% 18.8% 18.6% Knoxville, TN 13.1% 14.3% 16.3% Las Vegas -Paradise, NV 20.6% 17.8% 16.7% Lexington -Fayette, KY 19.1% 18.2% 19.3% Little Rock -N. Little Rock, AR 11.4% 11.8% 11.9°% Long Island, NY 16.1% 14.7% 15.0% Los Angeles -Long Beach -Glendale, CA 15.7% 15.8% 15.0°% Louisville, KY -IN 14.0% 13.2% 12.1% Madison, WI 9.7°% 9.8% 10.4% Memphis, TN -MS -AR 18.0% 18.6% 17.7% Miami -Dade, FL 15.2% 14.2% 12.9% Milwaukee -Waukesha -West Allis, WI 20.8% 20.9% 19.5% Minneapolis -St. Paul -Bloomington, MN -WI 17.8% 16.3% 15.4% 8 1 DTZ Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p 15.0% 14.8% 14.5% 14.4% 14.2% 15.8% 15.5% 15.6% 15.8% 15.7% 18.4% 18.2% 18.1% 18.1% 17.9% 14.1% 13.8% 13.5% 13.2% 12.9% 13.6% 13.3% 12.8% 12.9% 12.6% 13.8% 13.7% 13.6% 12.5% 11.2% 18.3% 18.3% 18.0% 17.6% 17.0% 8.1% 7.8% 8.0% 8.1% 8.5% 16.2% 15.7% 15.7% 15.6% 15.4% 8.9% 8.8% 8.5% 8.0% 7.6% 11.7% 11.4% 10.8% 10.4% 10.0% 14.2% 13.9% 13.6% 13.6% 13.1% 10.2% 10.0% 8.9% 7.5% 7.8% 10.3% 10.2% 9.8% 9.8% 9.3% 19.0% 19.1% 18.6% 18.9% 17.5% 15.6% 15.9% 16.2% 15.8% 15.9% 23.8% 23.5°% 23.3°% 24.3% 24.2°% 21.9% 21.8% 21.7°% 21.6% 21.0°% 12.0% 12.0% 12.2% 11.8% 11.6% 15.7% 14.9% 14.4% 13.50% 12.8% 16.1% 15.6% 16.2°% 16.2% 15.8% 19.7% 19.2°% 19.2°% 19.3% 18.7°% 27.9% 26.9% 26.4% 26.6% 25.7% 11.3°% 11.1°% 10.9°% 10.8% 10.4% 22.7% 22.7% 22.3% 22.3% 22.1% 21.7% 20.9% 23.0% 23.5% 23.5% 14.5% 14.1% 13.3% 13.7% 13.1% 17.2% 16.8% 15.8% 16.6% 16.6% 14.5% 13.2% 12.9°% 12.4% 12.3% 20.9°% 20.5°% 20.3°% 19.6% 20.1% 5.5% 6.2% 5.8% 5.8% 6.1% 10.7°% 11.0°% 10.7% 11.4% 12.5% 19.3% 19.3% 19.2% 19.2% 19.1% 16.8% 16.4% 15.6% 15.5% 15.0% 19.0% 18.6% 17.8% 17.8% 18.0% 17.1°% 16.1°% 14.8% 12.9% 14.1% 17.2°% 16.1% 15.6°% 15.9% 15.9% 18.7% 19.5°% 19.8°% 17.0°% 18.4% 12.5% 12.4% 11.0% 10.9% 10.0% 14.7°% 15.2% 15.3% 15.6% 15.0% 15.2% 15.0%r 14.5% 14.6% 14.2% 12.0% 12.3°% 11.8% 11.0% 10.8% 10.0% 10.5% 10.5% 10.0% 9.3% 17.5% 17.7% 17.3°% 17.1% 17.1% 13.1% 12.7% 12.4% 12.4% 12.0% 20.0% 19.0% 18.9% 19.2% 20.1% 15.6% 15.0% 15.0% 14.2% 14.4% Methodology and data sources explained on page 14 p = preliminary r = revision Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p 9.6% 2012 2013 2014 8.1% 17.1% (Quarterly Average) 16.6% Nashville -Davidson -Murfreesboro, TN 9.9% 9.4% 9.6% New Haven -Milford, CT 15.8% 16.3% 16.9% Northern New Jersey 17.5% 17.9°% 19.0% Central New Jersey 18.8% 17.6°% 15.8% New Orleans -Metairie -Kenner, LA 9.6% 9.6% 9.3% New York, NY 12.7% 11.3% 9.8°% Oakland -East Bay, CA 16.6% 15.1% 14.5% Oklahoma City, OK 13.2% 11.2% 10.6% Omaha, NE -IA 14.9% 15.6°% 15.0% Orange County, CA (Anaheim -Santa Ana) 15.1°% 14.0% 13.8% Orlando, FL 12.2% 11.1°% 10.6% Philadelphia -Camden -Wilmington, PA -NJ -DE 11.4% 11.5% 11.3% Phoenix -Mesa -Scottsdale, AZ 23.5% 21.9% 19.7% Pittsburgh, PA 14.5% 14.4% 15.5% Portland -South Portland -Biddeford, ME 12.1% 11.5% 11.0% Portland -Vancouver -Beaverton, OR -WA 11.9% 11.1% 9.8% Raleigh-Durham, NC 14.8% 13.4°% 12.5% Rochester, NY 15.4°% 16.0% 15.8% Sacramento -Arden -Arcade -Roseville, CA 17.1% 15.7% 14.6% Saint Louis, MO -IL 16.6% 16.0°% 14.6% Salt Lake City, UT 11.5% 11.4% 12.5% San Antonio, TX 16.9% 16.6% 15.7% San Diego -Carlsbad -San Marcos, CA 18.2% 17.9% 17.7% San Francisco, CA 9.3% 8.7% 7.3% San Jose -Silicon Valley, CA 13.4% 12.4% 10.9% San Mateo County, CA 13.6% 13.5% 10.9% Seattle -Tacoma -Bellevue, WA 11.1% 10.4% 9.5% Suburban MD 15.5% 15.9% 17.9% Suburban VA 15.9% 16.9% 18.3% Syracuse, NY 15.9% 15.2% 16.9% Tampa -St. Petersburg -Clearwater, FL 20.1% 19.0% 18.2% Tucson, AZ 14.8°% 16.1% 17.5% Tulsa, OK 15.0% 14.3°% 14.3% Ventura County, CA 23.7°% 24.3% 21.6% Washington, DC 10.4% 10.4% 11.2% Westchester County, NY 19.8% 19.1% 20.2% West Palm Beach -Boca Raton, FL 13.8% 12.3% 9.5% Wichita, KS 17.4% 17.5% 16.3% Methodology and data sources explained on page 14 p = preliminary r = revision Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p 9.6% 9.3% 9.2% 8.8% 8.1% 17.1% 16.9% 16.6% 16.6% 16.3% 19.1°% 18.4% 19.0% 19.8% 19.7% 16.0% 15.4% 15.8% 16.9% 16.5% 9.4% 9.2% 9.1% 9.3°% 9.2% 10.1% 9.5% 9.3% 9.8% 9.6% 14.6% 14.3% 14.2% 13.1% 12.0% 11.2% 10.2% 10.1°% 9.5°% 9.2°% 14.8°% 15.1% 15.1% 15.6% 15.2% 13.9% 13.8% 12.8% 12.7% 12.5% 11.1°% 10.7% 10.2% 9.4% 8.7% 11.3% 11.2% 11.2% 11.3% 11.0% 19.7% 19.6% 19.1% 19.4% 19.3% 15.7% 15.7% 15.2% 15.4% 15.5% 10.6% 10.8% 11.7% 12.0% 11.9% 9.9% 9.8% 8.8% 8.7% 8.6% 12.7°% 12.2% 12.3% 11.8% 11.3% 15.8% 15.7% 16.0% 15.4% 15.1% 14.7°% 14.4% 14.4% 14.0% 13.7% 14.4% 14.3% 14.6% 14.7% 14.1°% 12.8% 12.6% 12.7% 12.4% 13.2% 15.8°% 15.6% 15.3% 15.1% 14.9% 18.6% 18.0% 16.0% 15.9% 15.9% 7.7% 7.1% 62% 5.7% 5.7% 11.0% 10.5% 10.0% 10.1% 9.0% 11.5°% 10.3% 9.8% 9.6°% 9.6% 9.6% 9.4% 9.0°% 9.0% 9.1% 17.6% 18.0% 18.5% 18.4% 18.5% 18.1% 18.4% 18.8% 19.0% 18.8% 16.9% 16.8% 16.8% 16.8% 16.1% 18.6% 18.2% 17.5% 17.1% 16.6% 17.5% 18.1% 17.1% 17.8°% 17.7% 14.7°% 14.3% 14.0% 14.2% 13.6% 21.4°% 21.5% 21.1% 24.4% 23.7% 11.2% 11.5% 11.2% 11.3% 11.0% 20.5% 20.1°% 19.9% 20.1°% 22.1% 10.2% 8.9% 8.1% 7.6°% 6.7% 16.4°% 16.5% 16.3% 15.4% 15.5% www.dtz.com 1 9 2013 2014 (Quarterly Average) United States $21.72 $21.92 $22.40 Northeast $24.38 $24.65 $25.19 Midwest $18.26 $18.12 $18.21 South $20.48 $20.50 $20.80 West $24.27 $24.97 $26.00 Albuquerque, NM $15.29 $15.03 $14.84 Atlanta -Sandy Springs -Marietta, GA $19.37 $19.39 $19.81 Austin -Round Rock, TX $25.11 $26.88 $28.01 Baltimore, MD $21.88 $22.62 $22.40 Birmingham -Hoover, AL $17.92 $17.52 $17.16 Boston -Cambridge, MA $30.27 $29.90 $31.10 Buffalo -Niagara Falls, NY $16.70 $16.56 $16.16 Charleston -North Charleston, SC $18.30 $17.21 $17.72 Charlotte -Gastonia -Concord, NC -SC $19.86 $19.99 $20.67 Chattanooga, TN -GA $15.02 $15.06 $14.69 Chicago -Joliet -Naperville, IL -IN -WI $26.05 $27.12 $28.41 Cincinnati -Middletown, OH -KY -IN $17.78 $17.55 $17.47 Cleveland -Elyria -Mentor, OH $18.07 $17.45 $17.41 Colorado Springs, CO $16.47 $16.34 $16.26 Columbia, SC $15.51 $15.73 $15.57 Columbus, OH $18.25 $19.53 $19.88 Dallas, TX $19.79 $20.27 $21.31 Dayton, OH $14.47 $14.57 $14.67 Denver -Aurora, CO $20.40 $21.74 $22.96 Detroit -Warren -Livonia, MI $17.91 $16.27 $16.39 Fairfield County, CT $32.61 $33.69 $33.38 Ft. Lauderdale, FL $23.90 $23.18 $23.18 Greensboro -Winston-Salem, NC $15.30 $15.47 $15.64 Greenville, SC $15.61 $15.55 $16.31 Hartford -West Hartford -East Hartford, CT $19.02 $19.18 $19.31 Honolulu, HI $27.48 $25.08 $23.34 Houston, TX $24.61 $25.37 $27.22 Indianapolis, IN $18.08 $18.06 $18.08 Jacksonville, FL $17.01 $17.02 $16.87 Kansas City, MO -KS $17.91 $18.02 $18.07 Knoxville, TN $15.71 $15.07 $15.23 Las Vegas -Paradise, NV $20.63 $19.62 $19.32 Lexington -Fayette, KY $15.61 $15.50 $15.67 Little Rock -N. Little Rock, AR $15.28 $15.32 $15.50 Long Island, NY $25.66 $25.70 $26.40 Los Angeles -Long Beach -Glendale, CA $29.04 $29.58 $30.78 Louisville, KY -IN $16.59 $16.96 $17.17 Madison, WI $17.16 $16.47 $15.84 Memphis, TN -MS -AR $18.79 $18.85 $18.94 Miami -Dade, FL $27.16 $27.30 $27.95 Milwaukee -Waukesha -West Allis, WI $17.96 $17.41 $16.90 Minneapolis -St. Paul -Bloomington, MN -WI $24.63 $23.97 $24.96 10 1 DTZ 2012 Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p $22.35 $22.45 $22.58 $22.73 $22.92 $25.15 $25.23 $25.27 $25.35 $25.50 $18.18 $18.24 $18.28 $18.34 $18.37 $20.74 $20.84 $20.90 $21.03 $21.17 $25.94 $26.06 $26.46 $26.77 $27.18 $14.81 $14.92 $14.96 $15.14 $14.27 $19.62 $19.92 $20.21 $20.48 $20.48 $27.87 $28.40 $27.90 $28.07 $28.77 $22.30 $22.23 $22.72 $22.53 $22.93 $17.20 $17.10 $17.15 $17.32 $17.27 $31.03 $30.96 $31.52 $32.83 $32.85 $16.41 $15.96 $16.00 $15.88 $15.77 $17.86 $17.81 $17.74 $17.62 $17.55 $20.60 $20.75 $20.90 $21.32 $21.77 $14.66 $14.66 $14.67 $14.81 $14.90 $28.13 $28.75 $28.81 $28.56 $28.86 $17.51 $17.49 $17.34 $17.22 $17.09 $17.40 $17.47 $17.34 $17.34 $17.37 $16.24 $16.35 $16.28 $16.24 $16.26 $15.53 $15.45 $15.48 $15.58 $15.62 $19.79 $19.91 $20.05 $20.10 $20.33 $21.23 $21.41 $21.50 $21.71 $21.88 $14.69 $14.66 $14.74 $14.55 $14.56 $22.82 $23.12 $23.48 $23.78 $24.09 $16.40 $16.36 $16.45 $16.47 $16.60 $33.43 $34.23 $32.47 $32.89 $34.09 $23.18 $23.34 $23.43 $23.81 $23.81 $15.65 $15.61 $15.69 $15.47 $15.71 $16.10 $16.27 $16.92 $16.98 $16.38 $19.30 $19.15 $19.10 $18.89 $19.06 $23.50 $23.25 $22.82 $22.96 $22.71 $27.07 $27.16 $27.31 $27.49 $28.55 $18.07 $18.08 $18.08 $18.07 $18.11 $16.70 $16.80 $16.96 $17.19 $17.29 $17.98 $18.13 $18.18 $18.51 $18.63 $15.15 $15.49 $15.27 $15.30 $15.06 $19.58 $19.08 $19.09 $19.17 $19.24 $15.72 $15.66 $15.61 $15.54 $15.60 $15.44 10 1 DTZ 2012 Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2015p $22.35 $22.45 $22.58 $22.73 $22.92 $25.15 $25.23 $25.27 $25.35 $25.50 $18.18 $18.24 $18.28 $18.34 $18.37 $20.74 $20.84 $20.90 $21.03 $21.17 $25.94 $26.06 $26.46 $26.77 $27.18 $14.81 $14.92 $14.96 $15.14 $14.27 $19.62 $19.92 $20.21 $20.48 $20.48 $27.87 $28.40 $27.90 $28.07 $28.77 $22.30 $22.23 $22.72 $22.53 $22.93 $17.20 $17.10 $17.15 $17.32 $17.27 $31.03 $30.96 $31.52 $32.83 $32.85 $16.41 $15.96 $16.00 $15.88 $15.77 $17.86 $17.81 $17.74 $17.62 $17.55 $20.60 $20.75 $20.90 $21.32 $21.77 $14.66 $14.66 $14.67 $14.81 $14.90 $28.13 $28.75 $28.81 $28.56 $28.86 $17.51 $17.49 $17.34 $17.22 $17.09 $17.40 $17.47 $17.34 $17.34 $17.37 $16.24 $16.35 $16.28 $16.24 $16.26 $15.53 $15.45 $15.48 $15.58 $15.62 $19.79 $19.91 $20.05 $20.10 $20.33 $21.23 $21.41 $21.50 $21.71 $21.88 $14.69 $14.66 $14.74 $14.55 $14.56 $22.82 $23.12 $23.48 $23.78 $24.09 $16.40 $16.36 $16.45 $16.47 $16.60 $33.43 $34.23 $32.47 $32.89 $34.09 $23.18 $23.34 $23.43 $23.81 $23.81 $15.65 $15.61 $15.69 $15.47 $15.71 $16.10 $16.27 $16.92 $16.98 $16.38 $19.30 $19.15 $19.10 $18.89 $19.06 $23.50 $23.25 $22.82 $22.96 $22.71 $27.07 $27.16 $27.31 $27.49 $28.55 $18.07 $18.08 $18.08 $18.07 $18.11 $16.70 $16.80 $16.96 $17.19 $17.29 $17.98 $18.13 $18.18 $18.51 $18.63 $15.15 $15.49 $15.27 $15.30 $15.06 $19.58 $19.08 $19.09 $19.17 $19.24 $15.72 $15.66 $15.61 $15.54 $15.60 $15.44 $15.61 $15.58 $15.29 $15.41 $26.60 $26.31 $26.29 $26.44 $27.06 $30.72 $30.84 $31.20 $31.08 $31.92 $17.35 $17.36 $17.03 $17.59 $17.65 $15.88 $15.76 $15.77 $15.56 $15.44 $18.92 $19.05 $18.89 $18.88 $18.95 $27.99 $28.01 $28.08 $28.13 $28.57 $16.81 $16.80 $16.73 $17.36 $17.29 $24.87 $24.96 $25.46 $26.08 $25.99 Methodology and data sources explained on page 14 p = preliminary r = revision Q2 2014 2012 2013 2014 Q2 2O15p $19.98 (Quarterly Average) $20.66 Nashville -Davidson -Murfreesboro, TN $19.47 $20.19 $20.22 New Haven -Milford, CT $20.44 $19.52 $18.69 Northern New Jersey $27.43 $26.91 $27.47 Central New Jersey $24.80 $24.47 $24.76 New Orleans -Metairie -Kenner, LA $15.09 $15.10 $15.08 New York, NY $57.70 $63.20 $68.59 Oakland -East Bay, CA $21.27 $21.72 $22.46 Oklahoma City, OK $13.16 $13.15 $13.37 Omaha, NE -IA $16.82 $16.80 $16.59 Orange County, CA (Anaheim -Santa Ana) $22.74 $23.16 $24.51 Orlando, FL $19.47 $18.96 $18.91 Philadelphia -Camden -Wilmington, PA -NJ -DE $23.24 $23.14 $23.43 Phoenix -Mesa -Scottsdale, AZ $20.28 $20.40 $21.87 Pittsburgh, PA $19.39 $19.30 $19.78 Portland -South Portland -Biddeford, ME $13.63 $12.66 $12.67 Portland -Vancouver -Beaverton, OR -WA $20.59 $21.03 $21.77 Raleigh-Durham, NC $19.94 $19.61 $20.78 Rochester, NY $13.91 $14.14 $14.43 Sacramento -Arden -Arcade -Roseville, CA $20.37 $20.01 $20.31 Saint Louis, MO -IL $18.82 $18.67 $18.84 Salt Lake City, UT $18.43 $19.45 $19.19 San Antonio, TX $19.61 $19.64 $19.73 San Diego -Carlsbad -San Marcos, CA $28.73 $29.97 $31.26 San Francisco, CA $43.56 $50.01 $59.00 San Jose -Silicon Valley, CA $27.65 $30.81 $32.77 San Mateo County, CA $39.11 $41.29 $43.70 Seattle -Tacoma -Bellevue, WA $26.94 $27.31 $27.99 Suburban MD $26.42 $26.65 $26.23 Suburban VA $31.51 $31.64 $31.72 Syracuse, NY $15.47 $15.35 $14.56 Tampa -St. Petersburg -Clearwater, FL $19.91 $19.61 $20.00 Tucson, AZ $19.02 $19.00 $18.74 Tulsa, OK $15.76 $16.00 $15.98 Ventura County, CA $23.22 $22.82 $22.90 Washington, DC $49.80 $49.51 $50.45 Westchester County, NY $25.47 $26.07 $27.13 West Palm Beach -Boca Raton, FL $26.85 $25.58 $26.07 Wichita, KS $11.78 $11.76 $11.50 Methodology and data sources explained on page 14 p = preliminary r = revision Q2 2014 Q3 2014 Q4 2014 Q1 2015r Q2 2O15p $19.98 $19.89 $20.66 $21.33 $21.49 $18.84 $18.64 $18.34 $18.17 $18.28 $27.11 $27.48 $27.54 $27.83 $27.65 $24.80 $24.92 $24.73 $24.84 $24.72 $15.03 $15.09 $15.16 $15.32 $15.09 $68.05 $68.82 $70.28 $69.73 $70.09 $22.33 $22.55 $22.96 $23.39 $24.26 $13.28 $13.35 $13.46 $13.35 $13.66 $16.53 $16.62 $16.63 $16.42 $16.35 $24.24 $24.72 $25.20 $25.68 $26.28 $18.88 $18.88 $19.05 $19.41 $19.39 $23.41 $23.52 $23.57 $23.65 $23.71 $21.77 $22.00 $22.13 $22.37 $22.76 $19.60 $19.84 $20.00 $20.07 $20.25 $12.65 $12.63 $12.76 $12.68 $12.79 $21.79 $22.05 $22.07 $22.32 $22.50 $20.51 $21.04 $21.07 $21.09 $21.18 $14.45 $14.32 $14.59 $14.76 $14.60 $20.40 $20.40 $20.28 $20.52 $20.64 $18.87 $18.89 $18.85 $18.91 $19.06 $19.13 $19.07 $19.27 $19.39 $19.56 $19.65 $19.87 $19.76 $19.93 $20.04 $31.32 $31.20 $31.62 $32.04 $33.24 $58.30 $59.35 $62.75 $63.22 $66.77 $32.75 $32.41 $33.63 $34.20 $34.24 $43.50 $43.91 $45.23 $46.88 $47.04 $27.97 $28.07 $28.11 $28.36 $28.77 $26.29 $26.21 $26.08 $26.07 $26.12 $31.69 $31.76 $31.82 $31.67 $31.64 $14.48 $14.50 $14.58 $14.48 $14.49 $19.94 $20.16 $20.04 $20.36 $20.56 $18.78 $18.82 $18.62 $18.73 $18.73 $15.91 $16.03 $16.03 $15.97 $16.14 $22.85 $22.99 $22.99 $23.08 $23.22 $50.40 $50.29 $50.40 $51.13 $51.36 $27.14 $27.20 $27.23 $27.11 $27.06 $25.97 $26.26 $26.33 $26.31 $26.65 $11.55 $11.43 $11.55 $11.61 $11.52 www.dtz.com 1 11 12 1 DTZ Inventory Vacant Stock Inventory Change U/C Q2 2015 Q2 2015 (YTD 2015) (as of Q2 2015) National Total 5,466,397,000 740,220,000 26,845,000 108,521,000 Albuquerque, NM 13,637,000 1,523,000 0 0 Atlanta-Sandy Springs-Marietta, GA 172,911,000 29,395,000 0 702,000 Austin-Round Rock, TX 42,731,000 3,638,000 1,131,000 2,929,000 Baltimore, MD 78,101,000 12,043,000 125,000 2,075,000 Birmingham-Hoover, AL 18,653,000 1,424,000 0 33,000 Boston-Cambridge, MA 154,310,000 15,462,000 0 5,246,000 Buffalo-Niagara Falls, NY 21,318,000 2,801,000 31,000 547,000 Charleston-North Charleston, SC 8,517,000 667,000 319,000 213,000 Charlotte-Gastonia-Concord, NC-SC 85,640,000 7,965,000 225,000 1,446,000 Chattanooga, TN-GA 4,986,000 873,000 76,000 0 Chicago-Joliet-Naperville, IL-IN-WI 257,020,000 40,866,000 689,000 2,995,000 Cincinnati-Middletown, OH-KY-IN 33,169,000 8,020,000 250,000 437,000 Cleveland-Elyria-Mentor, OH 36,740,000 7,699,000 0 660,000 Colorado Springs, CO 28,376,000 3,292,000 0 0 Columbia, SC 10,937,000 1,400,000 20,000 151,000 Columbus, OH 27,685,000 4,369,000 343,000 315,000 Dallas, TX 209,781,000 39,183,000 1,897,000 6,079,000 Dayton, OH 14,229,000 3,660,000 0 51,000 Denver-Aurora, CO 171,724,000 17,859,000 293,000 3,750,000 Detroit-Warren-Livonia, MI 76,054,000 16,815,000 0 180,000 Fairfield County, CT 49,522,000 11,638,000 28,000 28,000 Ft. Lauderdale, FL 27,800,000 3,635,000 94,000 958,000 Greensboro-Winston-Salem, NC 18,133,000 3,019,000 43,000 74,000 Greenville, SC 9,082,000 1,116,000 26,000 138,000 Hartford-West Hartford-East Hartford, CT 24,803,000 4,978,000 27,000 64,000 Honolulu, HI 25,749,000 1,573,000 0 0 Houston, TX 304,034,000 38,004,000 7,732,000 13,859,000 Indianapolis, IN 31,862,000 6,086,000 0 0 Jacksonville, FL 25,095,000 3,758,000 24,000 24,000 Kansas City, MO-KS 49,584,000 8,925,000 77,000 468,000 Knoxville, TN 7,164,000 1,009,000 0 0 Las Vegas -Paradise, NV 27,142,000 4,327,000 309,000 234,000 Lexington-Fayette, KY 4,671,000 861,000 150,000 94,000 Little Rock-N. Little Rock, AR 10,836,000 1,078,000 0 73,000 Long Island, NY 55,738,000 8,361,000 0 0 Los Angeles-Long Beach-Glendale, CA 282,264,000 40,081,000 671,000 4,029,000 Louisville, KY-IN 21,704,000 2,344,000 0 150,000 Madison, WI 22,451,000 2,086,000 0 40,000 Memphis, TN-MS-AR 20,186,000 3,455,000 415,000 610,000 Miami-Dade, FL 85,198,000 10,253,000 107,000 941,000 Milwaukee-Waukesha-West Allis, WI 27,834,000 5,595,000 0 1,574,000 Minneapolis-St. Paul-Bloomington, MN-WI 64,890,000 9,344,000 0 170,000 Nashville-Davidson-Murfreesboro, TN 34,094,000 2,762,000 392,000 2,332,000 New Haven-Milford, CT 12,535,000 2,039,000 20,000 508,000 Northern New Jersey 93,943,000 18,507,000 0 1,008,000 Central New Jersey 56,951,000 9,397,000 0 677,000 New Orleans-Metairie-Kenner, LA 36,376,000 3,335,000 35,000 49,000 12 1 DTZ Methodology and data sources explained on page 14 Under construction and inventory change figures are derived from DTZ's proprietary sample and taken directly from CoStar's database for certain markets. www.dtz.com 1 13 Inventory Vacant Stock Inventory Change U/C Q2 2015 Q2 2015 (YTD 2015) (as of Q2 2015) New York, NY 435,098,000 41,769,000 0 6,653,000 Oakland -East Bay, CA 109,692,000 13,163,000 176,000 0 Oklahoma City, OK 20,457,000 1,875,000 170,000 885,000 Omaha, NE -IA 19,346,000 2,949,000 0 421,000 Orange County, CA (Anaheim -Santa Ana) 118,919,000 14,865,000 59,000 647,000 Orlando, FL 33,836,000 2,931,000 17,000 172,000 Philadelphia -Camden -Wilmington, PA -NJ -DE 242,644,000 26,691,000 137,000 1,986,000 Phoenix -Mesa -Scottsdale, AZ 96,618,000 18,647,000 1,041,000 4,366,000 Pittsburgh, PA 52,051,000 8,051,000 298,000 2,057,000 Portland -South Portland -Biddeford, ME 17,938,000 2,144,000 0 41,000 Portland -Vancouver -Beaverton, OR -WA 42,071,000 3,628,000 157,000 1,170,000 Raleigh-Durham, NC 49,757,000 5,623,000 1,204,000 1,017,000 Rochester, NY 15,953,000 2,415,000 0 295,000 Sacramento -Arden -Arcade -Roseville, CA 87,363,000 11,969,000 0 0 Saint Louis, MO -IL 48,505,000 6,839,000 0 116,000 Salt Lake City, LIT 32,506,000 4,298,000 367,000 1,124,000 San Antonio, TX 31,400,000 4,672,000 276,000 884,000 San Diego -Carlsbad -San Marcos, CA 71,917,000 11,455,000 597,000 1,756,000 San Francisco, CA 89,016,000 5,074,000 0 5,095,000 San Jose -Silicon Valley, CA 205,940,000 18,535,000 3,948,000 6,276,000 San Mateo County, CA 52,395,000 5,030,000 929,000 753,000 Seattle -Tacoma -Bellevue, WA 157,828,000 14,362,000 662,000 11,011,000 Suburban MD 72,888,000 13,484,000 0 634,000 Suburban VA 162,377,000 30,527,000 203,000 1,931,000 Syracuse, NY 12,890,000 2,079,000 42,000 0 Tampa -St. Petersburg -Clearwater, FL 60,176,000 9,970,000 26,000 599,000 Tucson, AZ 6,463,000 1,145,000 49,000 0 Tulsa, OK 20,810,000 2,830,000 78,000 310,000 Ventura County, CA 5,598,000 1,327,000 103,000 121,000 Washington, DC 122,850,000 13,514,000 105,000 2,227,000 Westchester County, NY 36,217,000 8,004,000 382,000 0 West Palm Beach -Boca Raton, FL 24,507,000 1,633,000 15,000 32,000 Wichita, KS 14,214,000 2,209,000 256,000 35,000 Methodology and data sources explained on page 14 Under construction and inventory change figures are derived from DTZ's proprietary sample and taken directly from CoStar's database for certain markets. www.dtz.com 1 13 Disclaimer This report and other research materials may be found on our website at www.dtz.com. This is a research document of DTZ 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. About DTZ DTZ is a global leader in commercial real estate services providing occupiers, tenants and investors around the world with a full spectrum of property solutions. The company's core capabilities include agency leasing, tenant representation, corporate and global occupier services, property management, facilities management, facility services, capital markets, investment and asset management, valuation, research, consulting, and project and development management. DTZ provides property management for 1.9 billion square feet, or 171 million square meters, and facilities management for 1.3 billion square feet, or 124 million square meters. The company completed $63 billion in transaction volume globally in 2014 on behalf of institutional, corporate, government and private clients. Headquartered in Chicago, DTZ has more than 28,000 employees who operate across more than 260 offices in 50 countries and represent the company's culture of excellence, client advocacy, integrity and collaboration. DTZ announced an agreement to merge with Cushman & Wakefield in a May 11 press release. The new company, which will operate under the Cushman & Wakefield brand, will have revenues over $5.5 billion, over 43,000 employees and will manage more than 4 billion square feet globally on behalf of institutional, corporate and private clients. The agreement is subject to customary closing conditions and is expected to close before the end of 2015. For further information, visit: www.dtz.com or follow us on Twitter @DTZ. Methodology DTZ's 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 office properties deemed to be competitive in the local office 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 unfit 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 defined as space that is available immediately or within three months (90 days) after the end of the quarter. Sublet space still occupied by the tenant is not counted as available space. The figures 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 Terms Total Inventory: The total amount of office space (in buildings greater than 10,000 square feet) that can be rented by a third party. Total Space Available: The sum 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 Regional Map 14 1 DTZ www.dtz.com