Colliers International | Highlights | North America | Office | Q1 2011

Q2 2014 | OFFICE

NORTH AMERICA

HIGHLIGHTS

Frozenomics Thaw Unfreezes Office Market in Q2 ANDREA CROSS National Office Research Manager | USA MARKET INDICATORS

KEY TAKEAWAYS

Relative to prior period

US Q2 2014 VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE**

US Canada Canada Q3 Q2 Q3 2014* 2014 2014*

   

   

  





*Projected | Construction is the change in Under Construction. **Rental rates for current quarter are for CBD Class A space. Rent forecast is for metro-wide rents.

NORTH AMERICAN OFFICE MARKET Summary Statistics, Q2 2014

US

CAN

NA

VACANCY RATE (%)

13.72

8.52

13.36

CHANGE FROM Q1 2014 (%)

-0.21

0.52

-0.15

ABSORPTION (MSF)

17.0

-0.1

16.9

NEW CONSTRUCTION (MSF)

8.8

2.6

11.5

UNDER CONSTRUCTION (MSF)

80.6

21.2

101.8

ASKING RENTS PER SF

US

CAN

DOWNTOWN CLASS A ($)

44.95

48.19

CHANGE FROM Q1 2014 (%)

1.4

-2.9

SUBURBAN CLASS A ($)

27.33

31.64

CHANGE FROM Q1 2014 (%)

0.8

-2.5

WWW.COLLIERS.COM

• Both the U.S. and Canada surmounted the effects of “Frozenomics” in Q2. The U.S. added more than 200,000 jobs each month between February and July – the longest stretch since 1997. Projected job growth and rising business confidence levels bode well for office demand through the remainder of 2014. • The U.S. economic recovery is broadening: half of the metro areas tracked by Colliers have recovered all of the office-using jobs lost during the recession, including hard-hit markets like Atlanta, Miami and Jacksonville. • Continuing the trend of recent quarters, the overall U.S. vacancy rate decreased by 21 basis points to 13.72% in Q2 2014 and the overall Canadian vacancy rate increased by 52 basis points to 8.52%. Of the markets tracked by Colliers reporting both Q1 and Q2 data, 56 of 72 U.S. markets posted quarterly vacancy decreases, whereas vacancies declined in only one of the seven Canadian markets. • North American absorption totaled about 16.9 million square feet in Q2 2014, up from 15.3 million square feet in Q1 2014. The U.S. posted just under 17 million square feet of positive absorption, compared with 83,530 square feet of negative absorption in Canada. • Construction activity continued to increase in both countries, but at a faster pace in the U.S. At mid-year, 101.8 million square feet were under construction in the U.S. and Canadian markets tracked by Colliers, up from 92.1 million square feet at the end of Q1 2014 and 75.7 million square feet one year earlier.

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

U.S. Economic Trends

OFFICE VACANCY, INVENTORY & ABSORPTION | Q2 2014 | NORTH AMERICA 8.5% vac.

Following the weak, weather-impacted first quarter of 2014, the U.S. economy bounced back strongly in Q2. After a 2.1% contraction in Q1 2014 – the largest decline since Q1 2009 – real GDP surged by 4.2% in Q2 2014, with gains in nearly every category. The U.S. labor market continued to show signs of improvement, with more than 200,000 jobs added each month since February 2014. The average monthly gain of 277,000 jobs in Q2 2014 was the highest total since Q1 2006. Also, weekly initial uninsurance claims dipped below 300,000 in recent weeks, on par with 2005-2006 levels.

Tech and energy markets continue to lead the recovery, although economic growth is broadening to include additional markets. As of June 2014, half of the 84 metro areas tracked by Colliers had recovered all of the office-using jobs that were lost during the recession. This includes many Sunbelt markets such as Atlanta, Charlotte and Miami that were hit particularly hard by the housing bust and financial crisis. Officeusing employment is approaching the pre-recession peak in other highly impacted markets, including Orlando, Tampa-St. Petersburg, West Palm Beach and Phoenix. Many of these markets are benefiting from financial services firms relocating to or expanding within lower-cost areas. In contrast, many traditional financial centers, including Chicago, Boston, Los Angeles, San Francisco and New York, are lagging the national recovery in financial activities employment growth. Instead, growth in TAMI (technology, advertising, media and information) industries remains the driver of the office market recoveries in these markets. Tech-driven submarkets, such as San Francisco’s SoMa, New York’s Midtown South, Los Angeles’ Westside, Chicago’s River North and Boston’s Seaport District and Cambridge, remain among the strongest in the U.S., with a shortage of available space and high rents driving demand to other submarkets in these metro areas and adjacent markets. Although robust growth in temporary hiring has garnered much attention, the recovery in permanent employment has gained steam during the last few years. In fact, the recovery in the professional and business services sector excluding temporary employment is ahead of the recovery in temporary employment, with nearly two permanent jobs in the professional and business services sector regained per one lost during the recession, compared with about 1.25 temporary jobs regained for every one lost. This trend reflects businesses’ greater confidence in the strength of the economic recovery and is boosting office demand.

Absorption Per Market (SF) q1 '14 - q2 '14

1,600,000 800,000 160,000 -160,000 -800,000 -1,600,000

Sq. Ft. By Region

2 billion 1 billion 200 mil.

Occupied Sq. Ft. Vacant Sq. Ft.

CHANGE IN EMPLOYMENT FROM CYCLICAL PEAK | US 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12%

0

7

14

21

28

35

42

49

56

63

70

77

84

91

MONTHS Total Employment

Office-Using Employment

Professional & Business Services

Financial Activities

Note: Latest data as of July 2014; x-axis indicates number of months elapsed since each sector’s previous cyclical employment peak; office-using employment sectors include professional and business services, financial activities and information services; information services not displayed separately because sector peaked in 2001. | Sources: Bureau of Labor Statistics, Colliers International.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT | US 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

1990 1991 1992 1993 1994 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Growth in office-using employment continues to track ahead of overall employment growth, an encouraging sign for the office market. As of July 2014, the primary office-using employment sectors had recovered about 122% of jobs lost during the recession, compared with the recovery in total employment of approximately 107% of jobs lost in the downturn. Professional and business services, which contains many jobs in the technology sector, has been the main driver of office-using employment growth, having recovered about 173% of jobs lost during the recession. However, since bottoming in early 2011, financial activities has also been adding jobs at a modest pace.

(

Note: Latest data as of August 9, 2014; data are seasonally adjusted. Sources: Bureau of Labor Statistics, Colliers International.

P. 2

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

OFFICE MARKET | Q2 2012–Q2 2014 | US 14.78 14.73 14.63 14.49 14.45 14.15

25.0

14.00 13.93 13.72

20.0

16.0 14.0 12.0 10.0

15.0

8.0 10.0

6.0

Vacancy %

We expect steady growth in job creation to continue through 2014 and 2015, driving office absorption. IHS projects the addition of an average of 208,000 jobs per month in 2014 for a total of 2.5 million jobs to be added this year, the highest annual total since 2000, followed by nearly 2.7 million jobs added in 2015. Due to the weak Q1 2014 GDP figure, IHS expects real GDP growth to slow slightly, from 2.22% in 2013 to 2.11% in 2014, accelerating to 2.84% in 2015. Steady job creation and economic growth as well as rising business confidence bode well for office demand during the next few years.

4.0

5.0

2.0 0.0

Q2 2012 Q3

FASTEST OFFICE-USING EMPLOYMENT GROWTH | JUNE 2013-2014 | US MSA

PERCENT CHANGE

MSA

9.8

Charlotte

3.4

Austin

6.9

Los Angeles

3.4

Nashville

5.6

Atlanta

3.3

Inland Empire

5.4

Memphis

3.3

Indianapolis

5.3

Miami

3.2

Dallas - Fort Worth

5.1

Sacramento

3.2

San Francisco

3.8

St. Louis

3.2

Jacksonville

3.6

West Palm Beach

3.1

Las Vegas

3.5

Orlando

3.1

Richmond

3.4

San Jose - Silicon Valley

3.1

UNITED STATES: 2.4 Note: All data are seasonally adjusted as of June 2014; Includes markets tracked by Colliers with at least 100,000 office-using jobs as of June 2014. Sources: Bureau of Labor Statistics, Federal Reserve Bank of St. Louis, Colliers International.

TOP 20 MARKETS FOR OFFICE-USING JOBS RECOVERED | JUNE 2014 | US MSA

PERCENT RECOVERED MSA

PERCENT RECOVERED

Austin

504.9

Indianapolis

187.3

Raleigh

349.5

Baltimore

165.0

Nashville

313.2

St. Louis

160.1

San Francisco

267.7

Denver

156.9

Pittsburgh

238.7

Charlotte

152.2

Dallas - Fort Worth

231.8

Atlanta

142.2

San Jose - Silicon Valley

226.1

Jacksonville

Houston

216.6

Minneapolis - St. Paul

Columbus

190.3

Portland, OR

Omaha

188.5

Boston

Q1 2013 Q2

Absorption MSF

PERCENT CHANGE

Raleigh

Q4

Q3

Q4

Completions MSF

Q1 2014 Q2

-

Vac Rate (%) Source: Colliers International.

OFFICE-USING EMPLOYMENT SECTOR RECOVERY - MAJOR MARKETS PROFESSIONAL & FINANCIAL BUSINESS ACTIVITIES JOBS SERVICES JOBS RECOVERED % RECOVERED %

MSA

Chicago

8.5

137.2

Boston

8.6

156.6

Los Angeles

11.6

101.7

San Francisco

25.9

357.0

New York

26.4

197.5

Washington, DC

49.7

281.0

UNITED STATES:

37.4

170.3

Note: Data represent % of jobs lost during the recession that have been regained as of Jun-14. Sources: Bureau of Labor Statistics, Federal Reserve of St. Louis, Colliers International.

MARKETS WITH FINANCIAL ACTIVITIES EMPLOYMENT AT OR ABOVE PRE-RECESSION PEAK | JUNE 2014 | US % OF JOBS MSA RECOVERED

MSA

% OF JOBS RECOVERED

St. Louis

377.8

Richmond

150.0

Dallas - Fort Worth

315.9

Phoenix

141.4

Nashville

305.6

Jacksonville

114.8

128.3

Omaha

266.7

Cincinnati

110.5

128.0

Austin

248.3

Birmingham

103.6

Pittsburgh

172.7

127.1 125.6

UNITED STATES: 119.2 Note: All data are seasonally adjusted as of June 2014; Includes markets tracked by Colliers with at least 100,000 office-using jobs as of June 2014. Sources: Bureau of Labor Statistics, Federal Reserve Bank of St. Louis, Colliers International.

UNITED STATES: 37.4 Note: All data are seasonally adjusted as of June 2014; Includes markets tracked by Colliers with at least 25,000 financial activities jobs as of June 2014. Sources: Bureau of Labor Statistics, Federal Reserve Bank of St. Louis, Colliers International.

COLLIERS INTERNATIONAL |

P. 3

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

CANADA ECONOMIC TRENDS The Canadian economy expanded further through the first half of 2014, adding nearly 53,000 jobs. Major drivers included growth in the energy and tech industries, the improving economy in its key trading partner the United States, and low interest rates. Looking forward, the Conference Board of Canada projects accelerating employment and GDP growth driven by the private sector into 2015, which should support further demand for office space. In 2014 and 2015, the Conference Board predicts average annual employment growth of 1.4% and 1.8%, respectively. Real GDP growth is expected to accelerate from 1.8% in 2013 to 2.4% in 2014 and 2.6% in 2015. Edmonton and Calgary should remain leading markets, fueled by robust energy industry growth in Alberta. Vancouver and Toronto also should experience above-average economic growth, benefiting from both expansions by local tech firms and tech companies relocating from other areas, as well as a preference among many young employees for a walkable environment accessible to transit, restaurant, retail and entertainment options. CANADA AVERAGE ANNUAL FORECASTED REAL GDP GROWTH % CITY

2015F-2018F CITY

2015F-2018F

Edmonton

3.1

Winnipeg

2.4

Calgary

2.9

Kitchener - Cambridge - Waterloo

2.4

Vancouver

2.8

Victoria

2.3

Abbotsford - Mission

2.7

Ottawa-Gatineau

2.2

Saskatoon

2.7

Halifax

2.2

Toronto

2.6

Moncton

2.1

Oshawa

2.4

Montreal

2.1

Regina

2.4 CANADA

2.2 Source: The Conference Board of Canada.

LOWEST OVERALL VACANCY RATES | Q2 2014 | NA MARKET

VACANCY (%)

MARKET

VACANCY (%)

OFFICE OUTLOOK 2014 BEHIND THE STATISTICS & BEYOND THE BASICS

Scope of Colliers’ Office Outlook Report: Colliers’ office space universe encompasses 87 markets in the U.S. and Canada with a combined total of more than 6.4 billion square feet. The 75 U.S. markets account for most of this space, with nearly 6.0 billion square feet of tracked inventory and the remaining 448 million square feet in Canada. Our coverage includes 21 markets with more than 100 million square feet of space, which combined account for 3.8 billion square feet, or nearly 60% of our office market inventory. The largest U.S. markets are New York, Washington, D.C., Chicago, Dallas and Atlanta; Toronto is the only Canadian market with more than 100 million square feet of space.

Vacancy

Vacancy rate trends in Q2 2014 mirrored recent quarters. In the U.S., both the CBD and suburban vacancy rates decreased at a moderate pace, driven by solid office-using employment growth and relatively low levels of new supply. The overall U.S. vacancy rate decreased by 21 basis points to 13.72% in Q2 2014, a slightly faster rate than the 16 basis-point quarterly average decrease since the vacancy rate’s cyclical peak in Q2 2010. Of the 72 U.S. markets tracked by Colliers reporting both Q1 and Q2 vacancy rates, 56 posted vacancy rate decreases during the quarter. In Canada, both the CBD and suburban vacancy rates increased as new supply came online. The overall Canadian vacancy rate increased by 52 basis points to 8.52%, with all but one of the Canadian markets reporting both Q1 and Q2 data posting vacancy rate increases in Q2 2014. LARGEST Q-o-Q DECREASE IN OVERALL VACANCY RATE | NA VACANCY RATE (%) Q2 2014

VACANCY RATE (%) Q1 2014

Savannah, GA

16.51

17.81

-130

San Francisco, CA

8.28

9.45

-117

Nashville, TN

8.00

9.13

-113

New York, NY - Downtown Manhattan

13.35

14.43

-108

MSA

BASISPOINT CHANGE

Toronto, ON

6.29

San Francisco, CA

8.28

Waterloo Region, ON

16.02

17.08

-106

Saskatoon, SK

6.86

Pittsburgh, PA

8.36

Las Vegas, NV

20.00

21.05

-105

Bakersfield, CA

7.77

Montréal, QC

8.68

Fairfield County, CT

12.85

13.84

-99

Winnipeg, MB

7.84

Calgary, AB

8.77

Charleston, SC

10.45

11.38

-93

Nashville, TN

8.00

NYC - Midtown South Manhattan

8.93

Orange County, CA

14.98

15.67

-71

Ft. Lauderdale - Broward, FL

13.64

14.34

-70

NORTH AMERICA

13.36

13.51

-16

NORTH AMERICA 13.36 Source: Colliers International.

Source: Colliers International.

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| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

Like the employment data, the Q2 2014 U.S. vacancy data indicate that the office market recovery is broadening to include more markets. Although some leading markets such as San Francisco and Nashville still rank high in terms of vacancy rate decrease, hard-hit markets such as Las Vegas, Orange County, Fort Lauderdale and West Palm Beach also posted significant decreases in the quarter. We also are observing more spillover demand from the tightest markets and submarkets to adjacent areas with greater availabilities and/or lower rents. Examples include Oakland (spillover demand from San Francisco and Silicon Valley) and Downtown and Midtown Manhattan (spillover demand from Midtown South), all of which posted faster vacancy rate decreases than the U.S. average. Rent trends also reflect increasing demand in these markets: Midtown Manhattan (12.8%) and Downtown Manhattan (7.9%) posted the first-highest and third-highest year-over-year Class A CBD rent growth among Northeast markets in Q2 2014, with Midtown South (8.7%) ranking second; and Oakland (7.5%) posted the fifth-highest year-over-year Class A CBD rent growth among West markets during the quarter, although growth still trailed San Francisco (18.8%) and San Jose/ Silicon Valley (15.5%). In many Canadian markets, the large amount of new supply coming online is contributing to an upward trend in vacancies. Of the markets reporting both Q1 and Q2 data, only the Waterloo Region posted a quarterly decrease in vacancy rate. In general, the Canadian office market has shifted in favor of tenants, particularly for older buildings as companies move into newly constructed properties. However, the overall Canadian office vacancy rate remains well below the 10% threshold considered indicative of a healthy market, and anticipated continued job growth bodes well for market fundamentals into 2015.

North American Downtown Markets: Excluding renewals, of the leases signed this quarter in your CBD/downtown, did most tenants...? Expand 16.7% Contract 9.7%

Hold Steady 73.6%

North American Downtown Markets: What was the trend in Free Rent (in months) offered by CBD landlords this quarter?

Less 14.3% More 2.9%

Tenant Demand and Leasing Activity

Tenants in many industries, particularly tech and other creative firms, continue to lease space in areas and properties preferred by their employees in order to attract and retain top talent. For example, many tech firms in New York are eschewing contemporary corporate space for the renovated nineteenth-century cast-iron buildings common in Midtown South, driving robust rent growth in this office market. Several non-tech companies opened offices or signed leases for their tech operations in the San Francisco Bay Area in recent months, reflecting the region’s deep talent base. Examples included: Wal-Mart’s recently signed lease for an additional 127,000 at Sunnyvale Business Park, for a total footprint of about 312,000 square feet at the park; a new McDonald’s tech incubator on San Francisco’s Market Street; and Target’s recently opened second Bay Area tech hub in Silicon Valley’s Sunnyvale submarket, following the opening of its Technology Innovation Center in San Francisco in 2013. Brooklyn also remains a preferred location by tech tenants in response to many of their employees’ preference to live and work in the borough. Etsy recently signed on to anchor the Dumbo Heights complex where it will have space to grow its current employee base of 350 to 650 or more in the next five years. Also, Vice Media will double its current Williamsburg, Brooklyn footprint by leasing 60,000 square feet that will accommodate its growing workforce, set to increase from 400 employees to 925 employees, citing that three-quarters of its employees live in the neighborhood as a key reason for locating there. Other premier tech submarkets such as Manhattan’s Meatpacking District continue to experience strong demand from tenants seeking to use their office space as a recruiting tool. Samsung Electronics North America leased the entire building at 837 Washington Street in the Meatpacking District for more than $100 per square foot, illustrating the area’s tremendous appeal to TAMI and fashion tenants. In Los Angeles, True Car will double the size of its Santa Monica office to 33,700 square feet when it relocates to oceanfront Portofino Plaza, which will accommodate up to 400 employees. In Chicago, the Merchandise Mart in the River North submarket continues to draw tech tenants. eBay unit Braintree will relocate from 27,000 square feet in the West Loop to 60,000 square feet at the Merchandise Mart, with plans to hire about 360 additional people through 2017. Also, in August, Yelp announced plans to expand from its current Chicago incubator space into a permanent 50,000 square-foot office at the Merchandise Mart, at which it will hire about 300 people during the coming year. Many of these deals also indicate the very high densities employed by tech companies due to open, collaborative layouts as well as the increased mobility of their workforces.

Same 82.9%

North American Downtown Markets: What was the trend for tenant improvement allowances offered by CBD landlords this quarter? Less 12.9% More 8.6%

Same 78.6%

North American Suburban Markets: Excluding renewals, of the leases signed this quarter in your suburban market, did most tenants...? Expand 26.0% Contract 11.0%

Hold Steady 63.0%

Note: Charts above reflect % of markets reporting

COLLIERS INTERNATIONAL |

P. 5

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

Absorption

North American absorption increased in Q2 2014, totaling about 16.9 million square feet, up from 15.3 million square feet in Q1 2014. Positive Q2 absorption was solely due to the U.S., which posted just under 17 million square feet of positive absorption, compared with 83,530 square feet of negative absorption in Canada. Although the U.S. absorption figures are volatile on a quarterly basis, the trend has been consistent improvement: four-quarter trailing average quarterly absorption reached more than 17.6 million square feet in Q2 2014, the highest figure during the current recovery. More than three-quarters of the markets tracked by Colliers posted positive absorption on both a quarterly and year-to-date basis in Q2 2014. Once again, Houston led all North American markets, with 1.6 million square feet of absorption in Q2 2014 and nearly 3.9 million square feet of absorption through the first half of the year, as energy firm leasing remained robust. The confluence of energy and technology remains key to the market’s strength, with advanced oil and natural gas extraction techniques driving the current boom. Illustrative of this trend, Element Materials Technology recently opened its new Oil and Gas Materials Technology Centre near the booming Energy Corridor. The tech industry drove absorption in many of the other top markets in Q2, including San Francisco, Orange County, Seattle and Chicago. Phoenix also is benefiting from tech industry growth. Recent announcements included San Francisco-based Weebly’s plan to open a 25,000 square-foot North American customer operations headquarters in Scottsdale, and Silicon Valley Bank’s plan to add 250 positions, including finance and IT roles, in Tempe during the next three years and make at least $100 million in loans to Arizona firms during the next five years. Other top markets include Atlanta and Dallas, which continue to benefit from expansions of local firms as well as company relocations from other markets. Year-to-date absorption in Atlanta through Q2 nearly reached the total for all of 2013, and Texas continues to attract firms from out-of-state. Recent announcements included a pair of San Diegoarea firms, Active Network and Omnitracs, moving their headquarters and a total of nearly 1,500 jobs to Dallas, and Charles Schwab moving 1,200 jobs to El Paso and Austin. Many markets without significant tech and energy industry concentrations and that were hit particularly hard by the housing bust and financial market correction have been lagging in the recovery. However, positive signs have emerged in many of these markets in recent quarters. For example, although their overall vacancy rates remain high, Las Vegas and the Inland Empire each posted positive absorption for four or more consecutive quarters through Q2. Moderate improvements should continue in these office markets, driven by continued job growth, rising business confidence and a lack of new supply.

P. 6

| COLLIERS INTERNATIONAL

TOP MARKETS FOR METRO OFFICE ABSORPTION | YTD | NA ABSORPTION (MSF)

MARKET

ABSORPTION (MSF)

MARKET

Houston, TX

3.86

Boston, MA

1.41

NYC - Downtown Manhattan

2.45

NYC - Midtown South Manhattan

1.31

Atlanta, GA

2.05

Phoenix, AZ

1.11

Dallas, TX

1.96

Minneapolis, MN

1.04

San Francisco, CA

1.77

Baltimore, MD

.96

YTD NORTH AMERICA ABSORPTION: 16.9 MSF Source: Colliers International.

Construction Activity

Construction activity continued to tick up in Q2 2014, driven by higher occupancy gains and rents, rising business and developer confidence, a gradually loosening lending environment, and a shortage of certain types and blocks of space in some markets. At mid-year, 101.8 million square feet were under construction in the U.S. and Canadian markets tracked by Colliers, up from 92.1 million square feet at the end of Q1 2014 and 75.7 million square feet one year earlier. The amount of new construction increased in both countries during the last 12 months. However, with concerns growing regarding new supply levels in some Canadian markets, construction activity increased at a slower pace than in the U.S., which is further behind in the development cycle. Between mid-year 2013 and mid-year 2014, the amount of square footage under way in the markets tracked by Colliers increased by about 25% in Canada, compared with a 37% increase in the U.S. Absorption in the U.S. and Canada during the first half of 2014 totaled 32.2 million square feet, outpacing new supply totaling 27.2 million square feet – a 1.2:1 ratio. However, the new supply picture varied significantly between the two countries. The absorption to new supply ratio through H1 2014 in the U.S. was nearly 1.4:1, whereas the ratio was 0.1:1 in Canada. Despite the increase in construction activity in the U.S., overbuilding is generally not a concern yet, with development activity still concentrated in the strongest markets and submarkets. The top 10 markets for square footage under construction at mid-year accounted for about 69% of all construction under way in Colliers’ U.S. markets, down only slightly from 72% at mid-year 2013. Moreover, the top ten markets for construction activity include many of the strongest intellectual capital, energy and education (ICEE) markets where tenant demand remains robust, such as Houston, San Jose/Silicon Valley, San Francisco, Seattle and Manhattan’s Midtown South. In other markets with construction under

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

way, development generally is occurring in response to a shortage of a particular type of space or lack of availabilities in a given submarket. Tishman Speyer recently announced groundbreaking on Three Alliance Center, Atlanta’s first new office tower since 2008, in the Buckhead submarket, which has one of the lowest vacancy rates in the metro area. In Phoenix, tightening market conditions in eastern and southeastern submarkets such as Tempe, Scottsdale, Gilbert and Mesa are prompting development activity; all of the 1.8 million square feet under construction at mid-year 2014 were in these areas. TOP MARKETS FOR OFFICE SPACE NEW SUPPLY | YTD | NA YTD SQUARE FEET DELIVERED

MSA

Houston, TX

3,855,608

New York, NY - Downtown Manhattan

2,861,402

Washington DC

2,820,143

Calgary, AB

1,375,670

Dallas, TX

1,311,871

Boston, MA

1,300,000

San Francisco, CA

1,194,405

Montréal, QC

937,060

New York, NY - Midtown South Manhattan

894,672

Baltimore, MD

778,400

Note: Rankings are based on the 87 U.S. and Canadian markets tracked by Colliers International. Source: Colliers International.

CONSTRUCTION AS % OF EXISTING INVENTORY | Q2 2014 | NA SQUARE FEET UNDERWAY (MSF)

MSA

% OF EXISTING INVENTORY

Calgary, AB

5.84

8.81%

Houston, TX

17.77

8.39%

San Jose - Silicon Valley

4.99

6.89%

Vancouver, BC

3.58

6.58%

Edmonton, AB

1.69

6.33%

Halifax, NS

0.46

5.92%

San Francisco, CA

4.99

5.59%

Toronto, ON

6.75

Regina, SK Seattle/Puget Sound, WA NORTH AMERICA

Owners in both the U.S. and Canada are repositioning existing buildings to make them more competitive with newer buildings, with a focus on attracting the creative, tech and media tenants that have been the greatest source of current office demand in many markets. With new supply outpacing absorption in Canada and a large amount of space still under construction, some landlords in markets including Calgary, Vancouver and Ottawa are renovating older buildings to incorporate features such as higher ceilings, energy efficient upgrades, increased on-site amenities, and highly customized spaces. In the U.S., tech tenant demand continues to spread from the strongest tech submarkets to adjacent areas, and developers are repositioning assets to capture this spillover demand. Lane Partners plans to redevelop the 400,000 square-foot Sears Building in downtown Oakland into creative office space in response to a shortage of sizeable blocks of space in buildings with large floorplates in San Francisco and Oakland. Also, Ridge Capital Investors and Contrarian Capital Management recently purchased the 114,000 square-foot Latham Square office building in downtown Oakland with plans to renovate it into creative space. In Downtown Los Angeles, several developers are repositioning former warehouses to attract tech/ creative tenants, including Lincoln Property, which recently signed a lease with AEG to occupy all of the 82,000 square feet of office space at The Desmond, a former department store warehouse that currently is under renovation in the South Park submarket. Redevelopment activity in both Oakland and Downtown Los Angeles also reflects their growing popularity as residential areas, particularly among Millennials desiring a walkable environment and access to public transit.

CAPITAL MARKETS & TRANSACTION ACTIVITY

Investment in North American office properties increased through the first half of 2014, with transaction volume totaling $52.9 billion, up 25% compared with the year-earlier period according to Real Capital Analytics (RCA) data. The increase was entirely due to growth in U.S. transaction activity, which grew by 30% to $51.0 billion during the period. Canadian office transaction volume decreased by nearly 40% to $1.9 billion. OFFICE TRANSACTION VOLUME | Q2 2014 | NA Bil. $300

200%

$250

150%

4.87%

$200

100%

0.20

4.45%

$150

50%

4.61

4.11%

101.80

1.58%

$100

0%

Note: Rankings are based on the 87 U.S. and Canadian markets tracked by Colliers International. Source: Colliers International

$50 $0

-50% 2007

2008

2009

2010

12-Month Trailing Volume (left-axis)

2011

2012

2013

2014

-100%

Year-Over-Year % Change (right-axis)

Note: Latest data as of Q2 2014; all data are 12-month trailing. Sources: Real Capital Analytics; Colliers International.

P. 7

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

Despite the specter of rising interest rates, investor demand for CBD assets in gateway cities remains voracious, further compressing cap rates. According to RCA, the average cap rate in the top quartile of CBD properties in major U.S. metros was just 4.4% in the first half of the year, and the lowest cap rates for office properties in New York, Boston, Washington, DC and San Francisco were in the low- to mid-3% range. Based on the Moody’s/RCA Commercial Property Price Index (CPPI), pricing for major metro CBD properties is now 16.6% above the pre-recession peak, the only segment of the office market in which pricing has fully recovered from the recession. However, quarterly price growth for major metro CBD properties decelerated to 0.2% in Q2 2014, the slowest growth among the four segments. Growth was strongest for non-major metro suburban properties, at 11.2%, reflecting investor interest broadening to include more geographies as well as suburban assets. Nonetheless, pricing in non-major markets remains nearly 19% off the peak for CBD assets and 24% off the peak for suburban assets. Given high pricing and stiff competition for office properties in gateway markets, we expect investor interest to continue to shift to secondary and tertiary markets as well as suburban assets in search of higher yields, driving further price growth in these areas. Foreign investors remain a key source of capital in North American real estate, particular in gateway cities. Of the $13.0 billion of crossborder capital invested in U.S. office properties year-to-date through mid-August 2014, nearly 80% was in Boston, Manhattan, Los Angeles, Washington, DC, and San Francisco. In Canada, 15 of the 19 properties, accounting for 76% of cross-border capital flows, that were purchased by foreign investors were in Toronto. The relative stability and transparency of the North American real estate markets will likely continue to attract foreign investors to both gateway cities and, increasingly, secondary markets in search of higher returns and less competition. Looking forward, the 10-year Treasury yield is expected to rise as the Federal Reserve ends its bond purchases in October 2014 and likely begins raising interest rates in 2015. U.S. office assets, particularly secondary, tertiary and suburban properties, still offer attractive riskadjusted returns and should benefit from continued capital inflows, particularly as economic conditions strengthen further and development activity remains low and targeted in most markets. For suburban office properties, the cap rate spread to the 10-year Treasury was 469 basis points in Q2 2014, higher than the average of 410 basis points between Q1 2001 and Q2 2014 and well above the recent low of 183 basis points in Q2 2007. Non-gateway markets with favorable growth prospects, such as many Texas markets, Raleigh/Durham, Nashville, Phoenix and Portland, will likely attract a greater amount of interest from both domestic and foreign capital sources in the coming quarters.

P. 8

| COLLIERS INTERNATIONAL

US OFFICE SPREADS: CAP RATE TO 10-YEAR TREASURY YIELD Basis Points 700

600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CBD

Suburban

2011

2012 2013 2014

All Office

Note: Latest data as of Q2 2014. Sources: Real Capital Analytics, IHS Global Insight, Colliers International Research.

MOODY’S/RCA COMMERCIAL PROPERTY PRICE INDICES - US OFFICE 300 250 200

Average Cap Rates - Q2 2014 Office U.S. Overall Major Metro CBD Non-Major Metro CBD Major Metro Suburban Non-Major Metro Suburban

5.8% 5.3% 6.9% 6.7% 7.6%

150 100 50 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2011

2012 2013 2014

Major Off-CBD

Non-Major Off-CBD

Major Off-Sub

Non-Major Off-Sub Note: Latest data as of Q2 2014. Sources: Moody’s Investor Service, Real Capital Analytics.

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

NEW SUPPLY Q2 2014 (SF)

YTD NEW SUPPLY 2014 (SF)

UNDER CONSTRUCTION (SF)

VACANCY RATE (%) MARCH 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION YTD Q2 2014 ABSORPTION (SF) 2014 (SF)

NORTHEAST

Baltimore, MD

28,652,392

Boston, MA Hartford, CT New York, NY Downtown Manhattan New York, NY Midtown Manhattan New York, NY Midtown South Manhattan Philadelphia, PA

45,000

45,000

0

62,623,701

0

1,050,000

2,047,827

9,971,800

0

0

0

110,938,458

0

2,861,402

2,800,000

230,068,701

0

0

162,245,367

0

894,672

12.77

12.99

-21,458

-339,193

12.02

12.30

-175,631

649,702

12.53

13.45

-92,168

19,926

14.43

13.35

1,201,140

2,447,603

0

11.78

11.39

902,866

-367,202

3,600,000

8.83

8.93

-162,903

1,305,850

42,857,113

0

0

0

11.08

11.33

-105,278

84,052

Pittsburgh, PA

32,091,162

0

0

1,560,643

10.28

9.64

43,805

38,023

Stamford, CT*

18,708,865

0

0

0

21.28

20.74

152,473

152,473

Washington DC

144,431,119

287,800

863,741

1,513,291

10.38

10.77

-423,371

-208,780

7,671,679

0

0

0

14.89

15.79

-69,577

-90,629

850,260,357

332,800

5,714,815

11,521,761

11.53

11.39

1,249,898

3,691,825

White Plains, NY Northeast Total SOUTH

Atlanta, GA

50,075,209

0

0

487,034

16.26

15.63

319,826

575,588

Birmingham, AL

4,985,532

0

0

0

20.43

20.48

-2,406

450,850

Charleston, SC

2,252,548

0

0

21,000

9.41

7.49

43,231

37,952

Charlotte, NC

22,609,763

0

0

0

9.15

9.65

-111,837

-79,125

Columbia, SC

4,678,427

0

0

0

12.11

11.81

13,964

-36,435

33,948,885

0

0

450,000

26.47

26.91

-150,176

-20,070

8,121,843

0

0

0

12.59

11.29

105,588

165,980

10,154,101

0

0

75,971

15.76

15.87

-11,979

124,173

Dallas, TX Ft. Lauderdale-Broward, FL Ft. Worth, TX

3,293,679

0

0

0

17.87

18.78

-30,169

-39,468

Houston, TX

Greenville, SC

42,670,624

0

0

1,464,268

12.05

11.33

303,907

316,159

Jacksonville, FL

15,572,544

0

0

0

13.24

14.19

-148,449

-133,485

Little Rock, AR

6,482,552

0

0

0

10.79

10.62

27,815

3,330

Louisville, KY

43,702,531

0

299,483

130,000

10.83

10.39

191,924

496,801

5,403,149

0

0

0

17.52

14.71

151,809

184,321

Miami-Dade, FL

Memphis, TN

18,812,554

0

0

172,932

17.63

17.29

65,323

95,249

Nashville, TN

13,240,053

0

0

262,000

12.69

11.56

149,521

134,000

Orlando, FL

12,194,869

0

0

22,832

11.76

13.04

-156,152

-160,132

Raleigh/Durham/ Chapel Hill, NC

14,306,307

0

388,279

242,969

6.53

6.46

9,817

291,219

Richmond, VA

16,533,157

0

106,662

321,500

11.68

11.17

84,145

169,579

Savannah, GA Tampa Bay, FL West Palm Beach/Palm Beach County, FL South Total

803,516

0

0

0

14.06

11.61

19,678

18,442

6,779,680

0

0

0

15.13

15.06

4,801

23,280

10,086,288

0

0

0

15.86

15.27

58,859

55,850

346,707,811

0

794,424

3,650,506

14.37

14.10

939,040

2,674,058

* Q1-14 data used for Stamford.

COLLIERS INTERNATIONAL |

P. 9

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY (continued) MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

NEW SUPPLY Q2 2014 (SF)

YTD NEW SUPPLY 2014 (SF)

UNDER CONSTRUCTION (SF)

VACANCY RATE (%) MARCH 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION YTD Q2 2014 ABSORPTION (SF) 2014 (SF)

MIDWEST

Chicago, IL

158,102,210

0

0

1,073,100

12.71

12.41

475,307

393,097

Cincinnati, OH

18,989,060

0

0

0

15.13

14.97

30,682

12,653

Cleveland, OH

32,520,214

0

0

0

17.66

17.50

49,818

57,258

Columbus, OH

19,452,521

0

0

490,000

10.96

9.97

192,463

246,829

Grand Rapids, MI Indianapolis, IN

5,314,801

0

0

0

17.43

15.02

85,119

107,774

22,548,402

0

0

0

9.49

9.22

60,961

-6,527

Kansas City, MO

34,737,964

0

0

0

14.80

14.64

55,518

146,983

Milwaukee, WI

18,749,253

0

0

42,000

12.27

12.39

-21,790

104,031

Minneapolis, MN

31,690,413

0

0

1,160,000

13.45

12.43

324,289

170,204

6,457,869

0

0

0

7.18

7.06

9,615

-11,707

23,216,158

0

0

0

20.37

19.77

138,714

-386,762

Omaha, NE St. Louis, MO St. Paul, MN

11,730,218

0

0

0

14.08

14.25

-19,239

-95,754

409,631,096

0

0

2,765,100

13.98

13.53

1,381,457

934,987

Albuquerque, NM

3,191,080

0

0

0

27.73

27.00

23,261

40,566

Bakersfield, CA

3,243,457

12,991

12,991

59,242

8.72

8.74

10,955

2,743

Midwest Total WEST

Boise, ID Denver, CO

4,177,362

46,368

298,715

466,022

8.69

11.34

-110,776

-104,324

34,319,952

112,552

112,552

868,100

12.01

12.04

89,363

182,211

Fresno, CA

3,288,944

0

0

0

10.83

11.10

-8,864

-51,311

Honolulu, HI

7,164,686

0

0

0

14.36

14.22

9,727

-39,655

Las Vegas, NV

5,017,501

0

49,200

129,000

11.88

10.78

55,401

153,621

Los Angeles, CA*

32,566,100

0

0

508,200

19.73

20.14

-137,400

-137,400

Oakland, CA

17,255,313

0

0

0

11.49

11.22

47,674

58,788

Phoenix, AZ

20,181,280

0

0

0

21.26

21.26

-2

67,788

Portland, OR

34,830,351

0

15,579

205,290

9.61

9.31

105,075

271,840

3,337,018

0

0

0

15.12

14.41

23,812

308

Reno, NV Sacramento, CA*

13,570,765

0

0

0

15.86

15.49

49,426

49,246

San Diego, CA

10,172,525

0

0

320,000

19.36

18.82

54,760

-44,306

San Francisco, CA

89,213,545

425,993

1,194,405

4,990,366

9.45

8.28

1,442,981

1,772,981

San Jose - Silicon Valley

8,060,488

0

0

0

18.16

16.72

104,197

137,414

Seattle/Puget Sound, WA

55,619,584

58,959

58,959

3,246,507

11.10

10.64

301,649

545,203

Stockton, CA Walnut Creek, CA West Total U.S. TOTALS

8,221,819

0

0

0

15.87

15.66

16,744

41,822

12,443,115

0

0

0

15.29

14.78

62,985

138,734

365,874,885

656,863

1,742,401

10,792,727

13.01

12.57

2,140,968

3,086,269

1,972,474,149

989,663

8,251,640

28,730,094

12.81

12.53

5,711,363 10,387,139

*Q1-14 data used for Sacramento and Los Angeles markets.

P. 10

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | DOWNTOWN OFFICE | CLASS A EXISTING INVENTORY (SF) JUNE 30, 2014

AVERAGE ANNUAL QUOTED RENT (USD PSF)

Baltimore, MD

12,805,993

21.47

Boston, MA

43,673,537

49.63

13.36%

Hartford, CT

6,771,455

22.60

11.21%

MARKET

VACANCY RATE (%) MAR 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

ANNUAL CHANGE IN RENT(%)

18,629

228,016

-0.6%

-8.4%

13.90%

-209,907

529,633

-1.0%

2.4%

13.48%

-154,205

-80,207

0.1%

-0.6%

NORTHEAST

NYC - Downtown Manhattan NYC - Midtown Manhattan NYC - Midtown South Manhattan

11.77%

11.62%

80,463,304

50.97

16.44%

14.98%

1,173,885

2,155,612

-2.7%

7.9%

197,217,338

76.00

12.38%

11.86%

1,020,961

-107,596

1.3%

12.8%

34,311,898

67.16

9.64%

9.43%

71,827

1,059,295

1.9%

8.7%

Philadelphia, PA

30,476,310

27.63

10.99%

11.34%

-106,806

43,380

0.5%

6.0%

Pittsburgh, PA

18,367,184

25.65

8.14%

7.72%

96,262

-43,468

-0.7%

4.0%

Stamford, CT*

13,339,184

38.10

22.04%

21.77%

65,472

65,472

-0.5%

-0.5%

Washington DC

89,488,906

54.54

11.58%

11.53%

311,301

766,835

3.1%

0.7%

White Plains, NY

4,887,012

31.48

17.23%

17.90%

-32,789

-41,736

-0.4%

-0.3%

531,802,121

58.00

12.79%

12.43%

2,254,630

4,575,236

0.8%

8.1%

Northeast Total SOUTH

30,396,533

21.63

17.63%

16.79%

257,499

440,454

-0.1%

-6.6%

Birmingham, AL

Atlanta, GA

4,029,421

20.99

15.21%

15.08%

5,058

476,113

-0.3%

-0.3%

Charleston, SC

1,009,994

34.51

9.33%

6.28%

30,753

31,052

3.7%

5.7%

Charlotte, NC

16,132,547

25.15

9.64%

9.68%

-6,576

53,085

-0.1%

1.0%

Columbia, SC

2,131,068

20.77

11.29%

10.73%

11,957

-39,949

0.8%

1.2%

22,640,759

22.95

25.12%

25.80%

-154,911

-54,371

0.7%

5.8%

Ft. Lauderdale-Broward, FL

Dallas, TX

4,494,296

33.05

17.67%

14.79%

129,694

162,836

0.2%

5.9%

Ft. Worth, TX

5,855,897

28.90

17.08%

17.45%

-21,522

-5,592

0.0%

-0.7%

Greenville, SC Houston, TX

2,021,715

21.26

17.52%

19.14%

-32,085

-25,752

1.8%

10.0%

30,778,455

40.54

10.56%

9.82%

227,672

197,191

4.9%

10.0%

Jacksonville, FL

6,846,824

19.98

16.50%

16.50%

-370

-215,242

0.3%

0.3%

Little Rock, AR

2,635,440

17.30

10.71%

10.69%

681

4,555

4.4%

6.1%

Louisville, KY

10,578,190

20.43

10.78%

10.74%

4,243

254,621

0.6%

0.9%

Memphis, TN

2,009,825

17.12

26.76%

20.64%

123,143

133,943

0.1%

-1.5%

Miami-Dade, FL

9,980,567

40.15

17.75%

17.12%

62,660

108,641

1.0%

1.7%

Nashville, TN

4,058,652

23.77

11.28%

9.98%

52,720

55,383

1.6%

9.5%

Orlando, FL

5,776,846

25.00

12.56%

14.29%

-99,535

-101,212

-0.6%

2.5%

Raleigh/Durham/Chapel Hill, NC

7,059,959

26.03

6.64%

6.67%

-2,081

13,584

-1.0%

9.6%

Richmond, VA

6,355,704

24.88

9.83%

8.09%

110,852

119,490

0.2%

7.1%

Savannah, GA

645,713

20.91

9.65%

6.82%

18,273

14,795

0.0%

1.6%

Tampa Bay, FL

4,999,570

24.24

13.25%

13.26%

-518

11,665

1.9%

4.8%

West Palm Beach/ Palm Beach County, FL

3,515,957

35.63

18.73%

17.84%

31,550

44,363

0.6%

0.9%

183,953,932

27.35

14.93%

14.53%

749,157

1,679,653

1.4%

3.3%

South Total

* Q1-14 data used for Stamford.

COLLIERS INTERNATIONAL |

P. 11

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | DOWNTOWN OFFICE | CLASS A (continued) MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

AVERAGE ANNUAL QUOTED RENT (USD PSF)

61,039,401

39.12

VACANCY RATE (%) MAR 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

ANNUAL CHANGE IN RENT(%)

140,347

2.1%

5.4%

MIDWEST

Chicago, IL

12.85%

12.42%

267,455

Cincinnati, OH

8,359,432

21.77

19.36%

18.79%

47,903

82,998

-2.7%

0.4%

Cleveland, OH

10,512,842

21.34

15.20%

14.83%

38,894

23,102

0.5%

-3.3%

Columbus, OH

8,377,149

19.75

11.96%

11.21%

62,933

106,903

-0.3%

2.9%

Grand Rapids, MI

1,461,047

18.48

22.51%

19.26%

47,385

65,030

-2.2%

-4.6%

Indianapolis, IN

9,501,787

18.95

12.01%

12.07%

-5,780

-58,448

0.0%

0.5%

Kansas City, MO

10,518,171

19.03

20.96%

20.33%

66,538

58,206

0.5%

0.8%

5,106,083

26.53

8.92%

8.80%

5,931

10,877

0.0%

-0.4%

13,618,828

17.17

12.37%

10.85%

205,929

52,768

2.6%

1.6%

Milwaukee, WI Minneapolis, MN Omaha, NE

3,549,103

20.25

3.48%

3.32%

5,544

33,599

0.0%

0.6%

St. Louis, MO

9,558,798

18.06

20.05%

19.76%

28,172

-508,055

-0.2%

0.6%

St. Paul, MN

2,773,960

14.45

12.54%

13.51%

-26,706

-109,108

0.0%

8.0%

151,576,895

27.62

14.06%

13.50%

744,198

97,411

1.4%

3.5%

Albuquerque, NM

575,047

20.14

26.55%

26.55%

0

0

0.0%

1.9%

Bakersfield, CA

729,040

17.40

6.12%

6.35%

-1,737

-13,243

0.0%

0.0%

Midwest Total WEST

Boise, ID Denver, CO

1,941,427

20.75

4.40%

11.52%

-93,934

-56,044

8.0%

9.0%

21,463,546

32.62

12.78%

12.81%

93,041

180,056

0.5%

8.3%

Fresno, CA

1,026,046

24.60

8.43%

6.11%

23,730

809

0.0%

2.5%

Honolulu, HI

4,644,304

35.52

14.16%

12.32%

29,628

-30,844

0.0%

1.9%

Las Vegas, NV

1,103,341

33.36

12.67%

13.10%

-4,771

-665

5.7%

6.9%

Los Angeles, CA*

18,098,100

37.32

19.20%

19.48%

-53,000

-53,000

1.3%

3.0%

Oakland, CA

10,562,045

34.20

9.68%

9.64%

4,133

-37,565

0.7%

7.5%

Phoenix, AZ

9,474,848

22.94

22.43%

22.75%

-30,459

-11,801

0.2%

2.1%

Portland, OR

13,302,291

26.61

9.82%

10.22%

-52,597

-142,686

1.3%

2.9%

583,955

23.51

13.85%

13.42%

2,461

-811

-0.4%

-2.2%

Reno, NV Sacramento, CA*

5,945,146

31.32

15.61%

15.29%

18,734

18,734

-1.1%

-2.6%

San Diego, CA

7,257,266

29.76

18.60%

17.85%

54,316

-53,231

2.5%

6.0%

57,465,551

59.73

10.24%

8.75%

1,190,858

1,458,016

6.0%

18.8%

San Jose - Silicon Valley

San Francisco, CA

3,493,453

36.72

18.31%

17.57%

24,544

26,344

8.1%

15.5%

Seattle/Puget Sound, WA

32,199,750

34.07

11.35%

10.68%

110,223

312,459

0.8%

7.5%

Stockton, CA

2,790,574

19.44

19.49%

19.49%

77

18,649

-3.0%

-10.0%

Walnut Creek, CA

8,271,861

28.08

14.62%

13.62%

82,637

124,189

0.9%

1.7%

200,927,591

39.62

13.01%

12.46%

1,397,884

1,739,366

3.2%

10.1%

1,068,260,539

44.95

13.38%

12.95%

5,145,869

8,091,666

1.4%

7.5%

West Total U.S. TOTALS

* Q1-14 data used for Sacramento and Los Angeles markets.

P. 12

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

NEW SUPPLY Q2 2014 (SF)

UNDER YTD NEW SUPPLY CONSTRUCTION 2014 (SF) (SF)

VACANCY VACANCY RATE (%) RATE (%) MAR 31, 2014 JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

NORTHEAST

Baltimore, MD Boston, MA

88,259,043

0

733,400

0

12.39%

12.15%

207,916

1,299,972

112,698,600

250,000

250,000

1,673,573

18.06%

17.70%

291,990

757,713

Fairfield County, CT

40,646,251

0

0

0

13.84%

12.85%

213,792

194,596

Hartford, CT

12,784,662

0

0

0

13.04%

11.86%

150,825

419,283

Long Island, NY

74,486,194

0

0

154,999

10.23%

10.18%

32,915

-44,348

New Jersey Central

131,315,428

0

20,525

0

15.66%

15.56%

135,589

766,086

New Jersey Northern

163,629,090

0

40,018

0

15.73%

15.79%

-100,064

-327,930

Philadelphia, PA

110,544,032

229,838

605,631

535,000

15.25%

14.94%

545,868

457,790

Pittsburgh, PA

91,138,395

208,981

444,605

1,347,989

7.55%

7.91%

-38,625

-84,678

Washington DC

289,371,434

1,916,402

1,956,402

3,796,119

16.86%

17.28%

252,078

-670,152

38,211,929

0

0

0

13.08%

13.24%

-60,743

-129,118

1,153,085,058

2,605,221

4,050,581

7,507,680

14.75%

14.75%

1,631,541

2,639,214

Westchester County, NY Northeast Total SOUTH

Atlanta, GA

171,907,388

0

0

1,029,608

16.17%

15.95%

424,193

1,480,850

Birmingham, AL

14,683,072

0

0

0

15.02%

14.18%

123,347

-4,800

Charleston, SC

9,818,033

0

114,880

215,000

11.84%

11.13%

69,184

160,216

Charlotte, NC

62,302,056

105,500

241,235

433,758

12.19%

11.72%

382,770

668,161

Columbia, SC

4,966,961

0

0

0

22.62%

22.43%

9,325

62,291

Dallas, TX

238,058,523

969,191

1,311,871

4,621,008

14.72%

14.72%

839,485

1,983,167

Ft. LauderdaleBroward, FL

43,222,291

0

0

515,000

14.67%

14.08%

253,292

114,130

Ft. Worth, TX

21,168,105

153,195

181,285

928,651

10.56%

10.82%

81,459

124,024

Greenville, SC Houston, TX

4,896,690

0

0

0

19.60%

18.54%

51,783

15,959

169,088,850

1,728,894

3,855,608

16,303,874

11.84%

11.98%

1,290,750

3,546,701

Jacksonville, FL

46,157,943

0

12,151

223,000

11.75%

11.28%

214,601

529,741

Little Rock, AR

7,551,255

0

0

0

12.59%

11.83%

39,299

68,375

Memphis, TN

27,227,184

0

0

241,000

14.96%

14.77%

52,426

190,590

Miami-Dade, FL

65,547,026

80,000

80,000

303,768

11.28%

10.88%

334,576

493,769

Nashville, TN

15,010,996

0

0

532,720

5.99%

4.86%

171,544

268,640

Orlando, FL

54,400,023

220,000

295,997

60,000

13.62%

13.88%

-170,392

83,408

Raleigh/Durham/Chapel Hill, NC

64,772,682

206,409

264,481

1,155,043

12.24%

11.99%

343,220

396,296

Richmond, VA

34,772,603

0

15,000

314,658

11.07%

11.03%

66,862

-24,099

Savannah, GA

1,461,838

0

0

0

19.88%

19.21%

9,832

1,261

Tampa Bay, FL

57,275,381

0

0

18,000

17.66%

17.44%

127,713

269,957

West Palm Beach/Palm Beach County, FL

28,464,865

0

0

133,586

18.08%

17.45%

180,268

294,510

1,142,753,765

3,463,189

6,372,508

27,028,674

13.83%

13.65%

4,895,537

10,723,147

South Total

* Q1-14 data used for Stamford.

COLLIERS INTERNATIONAL |

P. 13

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY (continued) MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

NEW SUPPLY Q2 2014 (SF)

UNDER YTD NEW SUPPLY CONSTRUCTION 2014 (SF) (SF)

VACANCY VACANCY RATE (%) RATE (%) MAR 31, 2014 JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

MIDWEST

Chicago, IL

155,576,032

123,475

123,475

915,000

17.19%

17.19%

110,798

-652,665

Cincinnati, OH

46,579,893

0

135,576

0

16.03%

15.89%

66,399

219,673

Cleveland, OH

47,980,920

0

139,212

127,708

11.40%

11.10%

147,404

29,275

Columbus, OH

44,027,261

0

0

424,840

10.46%

10.49%

-11,388

36,460

Grand Rapids, MI

12,533,768

140,593

140,593

0

19.16%

19.20%

-31,258

-31,258

Indianapolis, IN

43,264,183

0

0

132,991

9.70%

9.37%

144,135

110,087

Kansas City, MO

58,622,017

131,200

131,200

637,800

11.94%

11.33%

472,518

588,448

Milwaukee, WI

33,330,654

0

0

160,000

12.36%

12.00%

122,039

203,521

Minneapolis, MN

79,206,435

0

598,400

870,900

13.49%

13.39%

76,411

878,834

Omaha, NE

21,486,334

168,489

284,489

78,689

10.38%

10.18%

275,009

532,931

St. Louis, MO Midwest Total

55,394,777

0

183,000

435,000

9.45%

9.18%

152,087

127,682

737,494,892

571,677

1,755,977

3,872,096

14.35%

14.01%

1,524,154

2,921,390

10,877,999

0

0

0

15.69%

19.09%

-369,650

-306,408

6,070,404

0

8,984

131,894

6.53%

7.24%

-43,291

34

WEST

Albuquerque, NM Bakersfield, CA Boise, ID

17,158,432

3,576

24,142

153,048

12.42%

12.95%

-87,145

-334,958

106,931,545

48,537

91,537

690,310

13.00%

12.71%

352,021

655,505

Fairfield, CA

4,995,686

0

0

30,000

20.05%

19.97%

3,863

12,215

Fresno, CA

17,562,156

0

20,000

0

13.10%

13.34%

-43,410

146,469

Honolulu, HI

7,730,394

0

0

0

11.85%

12.93%

-83,603

-78,267

Denver, CO

Las Vegas, NV

36,776,508

0

47,000

577,894

22.30%

21.26%

382,762

479,548

Los Angeles - Inland Empire, CA

20,516,142

0

94,891

58,000

18.90%

18.46%

102,300

214,800

Los Angeles, CA*

167,879,800

152,300

152,300

1,588,000

17.82%

17.64%

364,700

364,700

Oakland, CA

16,271,372

0

0

0

19.99%

19.03%

155,298

153,599

Orange County, CA

81,476,457

488,696

488,696

354,845

15.67%

14.98%

1,150,900

884,401

Phoenix, AZ

111,159,050

100,622

218,332

1,997,202

18.27%

18.11%

261,531

1,044,490

Pleasanton/TriValley, CA

27,748,942

0

0

0

12.81%

12.48%

90,516

-208,837

Portland, OR

43,981,869

0

45,521

53,000

9.37%

8.93%

192,191

365,717

9,592,304

0

0

0

14.47%

14.93%

-43,645

-72,526

Sacramento, CA*

52,144,531

68,417

68,417

77,000

19.13%

18.91%

141,121

141,160

Reno, NV San Diego, CA

71,901,725

45,917

587,052

920,416

12.79%

12.63%

154,798

847,920

San Francisco Peninsula

35,209,871

57,741

57,741

485,924

11.28%

11.11%

9,726

-4,835

San Jose - Silicon Valley

64,391,616

246,000

711,283

4,993,108

9.89%

9.95%

260,466

521,899

Seattle/Puget Sound, WA

56,542,804

0

0

1,363,700

10.31%

9.95%

287,220

206,577

Walnut Creek, CA West Total U.S. TOTALS

5,513,617

0

0

0

16.27%

16.68%

-22,357

19,330

972,433,224

1,211,806

2,615,896

13,474,341

15.01%

14.80%

3,216,312

5,052,533

4,005,766,939

7,851,893

14,794,962

51,882,791

14.48%

14.31%

11,267,544

21,336,284

* Q1-14 data used for Sacramento and Los Angeles markets.

P. 14

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | SUBURBAN OFFICE | CLASS A MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

AVERAGE VACANCY VACANCY ANNUAL RATE (%) RATE (%) QUOTED RENT MAR 31, 2014 JUNE 30, 2014 (USD PSF)

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

ANNUAL CHANGE IN RENT (%)

NORTHEAST

Baltimore, MD

31,999,072

24.30

13.27%

12.49%

207,916

1,299,972

1.3

-3.0

Boston, MA

48,244,601

26.20

16.52%

16.19%

291,990

757,713

1.0

4.7

Fairfield County, CT

18,121,467

39.48

13.42%

12.63%

213,792

194,596

2.0

8.1

Hartford, CT

7,123,495

21.01

12.82%

11.46%

150,825

419,283

-1.7

0.5

Long Island, NY

25,394,853

30.76

10.92%

10.57%

32,915

-44,348

1.8

0.7

New Jersey - Central

61,295,100

26.50

15.42%

15.33%

135,589

766,086

3.0

0.3

New Jersey - Northern

87,786,735

28.00

18.04%

18.32%

-100,064

-327,930

0.2

6.6

Philadelphia, PA

67,648,043

25.62

13.55%

13.23%

545,868

457,790

0.8

1.4

Pittsburgh, PA

16,920,743

25.92

7.11%

8.69%

-38,625

-84,678

17.1

15.7

Washington DC

139,579,792

31.75

17.22%

17.74%

252,078

-670,152

-2.3

-2.7

Westchester County, NY Northeast Total

17,711,395

27.71

15.60%

15.66%

-60,743

-129,118

1.2

2.7

521,825,296

28.49

15.48%

15.53%

1,631,541

2,639,214

0.6

1.6

81,351,202

22.87

14.07%

14.08%

424,193

1,480,850

1.1

3.3

9,276,993

20.79

11.88%

9.55%

123,347

-4,800

0.5

0.3

SOUTH

Atlanta, GA Birmingham, AL Charleston, SC

3,689,350

25.06

8.08%

7.43%

69,184

160,216

2.7

2.8

Charlotte, NC

20,362,557

23.50

13.33%

12.38%

382,770

668,161

1.7

2.3

Columbia, SC

1,001,769

17.11

18.42%

18.91%

9,325

62,291

-0.1

2.3

Dallas, TX

97,441,781

24.90

13.28%

13.65%

839,485

1,983,167

0.4

5.3

Ft. Lauderdale-Broward, FL

10,571,174

27.47

14.79%

15.18%

253,292

114,130

1.1

0.4

Ft. Worth, TX

3,591,539

24.30

1.87%

1.83%

81,459

124,024

-2.6

-1.6

Greenville, SC

2,458,553

19.33

14.46%

11.02%

51,783

15,959

1.3

9.8

75,225,262

32.17

8.48%

9.37%

1,290,750

3,546,701

0.2

7.7

Jacksonville, FL

9,183,817

19.60

9.31%

7.42%

214,601

529,741

0.7

1.0

Little Rock, AR

2,843,202

19.74

17.26%

16.82%

39,299

68,375

7.0

3.2

Houston, TX

Memphis, TN

8,310,062

20.97

8.22%

8.05%

52,426

190,590

-0.2

-1.2

16,208,719

27.47

15.17%

14.20%

334,576

493,769

1.1

0.4

Nashville, TN

7,660,730

26.50

6.83%

4.78%

171,544

268,640

6.0

10.6

Orlando, FL

16,822,153

21.04

16.96%

17.26%

-170,392

83,408

-0.6

-0.1

Raleigh/Durham/Chapel Hill, NC

25,192,507

21.33

10.08%

9.88%

343,220

396,296

0.1

4.6

Richmond, VA

13,754,859

18.70

11.21%

11.15%

66,862

-24,099

4.4

1.6

Savannah, GA

490,035

22.08

15.96%

16.05%

9,832

1,261

-5.4

-5.0

18,368,902

23.59

17.19%

16.73%

127,713

269,957

0.4

2.3

8,999,060

31.38

18.82%

16.32%

180,268

294,510

-0.1

3.0

432,804,226

25.06

12.48%

12.40%

4,895,537

10,723,147

0.8

4.6

Miami-Dade, FL

Tampa Bay, FL West Palm Beach/ Palm Beach County, FL South Total

COLLIERS INTERNATIONAL |

P. 15

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | SUBURBAN OFFICE | CLASS A (continued) MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

AVERAGE VACANCY VACANCY ANNUAL RATE (%) RATE (%) QUOTED RENT MAR 31, 2014 JUNE 30, 2014 (USD PSF)

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

ANNUAL CHANGE IN RENT (%)

MIDWEST

Chicago, IL

78,047,353

27.33

18.53%

18.75%

110,798

-652,665

0.0

0.6

Cincinnati, OH

18,266,220

20.36

18.40%

17.72%

66,399

219,673

3.8

-1.4

Cleveland, OH

9,345,155

21.15

11.36%

11.23%

147,404

29,275

0.0

-0.2

Columbus, OH

18,337,079

19.67

9.00%

8.91%

-11,388

36,460

1.9

2.5

Grand Rapids, MI

937,115

17.50

17.14%

18.75%

-31,258

-31,258

0.0

0.0

Indianapolis, IN

12,456,333

18.80

12.52%

11.49%

144,135

110,087

1.9

3.0

Kansas City, MO

16,559,970

20.52

12.81%

12.05%

472,518

588,448

-0.1

-0.1

Milwaukee, WI Minneapolis, MN Omaha, NE St. Louis, MO Midwest Total

6,187,173

22.14

11.08%

10.67%

122,039

203,521

0.1

0.4

26,563,731

14.63

16.00%

14.88%

76,411

878,834

2.8

5.8

5,229,149

26.35

2.86%

2.43%

275,009

532,931

3.4

6.3

26,374,431

21.86

9.15%

8.27%

152,087

127,682

0.0

-0.7

252,583,758

22.11

14.70%

14.33%

1,524,154

2,921,390

0.7

0.6

811,008

21.30

4.31%

4.69%

-369,650

-306,408

-3.6

2.2

WEST

Albuquerque, NM Bakersfield, CA

2,776,404

24.00

5.84%

6.50%

-43,291

34

0.0

0.0

Boise, ID

5,826,036

15.75

15.38%

16.36%

-87,145

-334,958

1.5

4.3

35,797,994

25.04

11.90%

11.60%

352,021

655,505

0.8

5.0

Denver, CO Fairfield, CA

1,950,606

25.61

19.82%

19.74%

3,863

12,215

-2.5

-0.9

Fresno, CA

3,973,324

25.80

16.99%

17.49%

-43,410

146,469

0.0

2.4

Las Vegas, NV

4,898,279

30.00

33.12%

28.95%

382,762

479,548

0.8

2.5

Los Angeles - Inland Empire, CA

5,019,438

25.56

21.01%

19.93%

102,300

214,800

0.5

4.9

102,218,200

35.04

16.72%

16.37%

364,700

364,700

0.0

2.8

Los Angeles, CA*

3,682,927

29.40

23.83%

23.66%

155,298

153,599

-0.8

-0.4

Orange County, CA

Oakland, CA

33,193,269

26.52

16.21%

15.48%

1,150,900

884,401

0.5

3.8

Phoenix, AZ

30,886,235

24.16

17.43%

17.45%

261,531

1,044,490

0.5

3.0

Pleasanton/Tri-Valley, CA

15,526,039

29.04

10.07%

10.82%

90,516

-208,837

0.4

9.0

Portland, OR

11,443,780

23.70

10.98%

10.20%

192,191

365,717

-0.2

2.4

Reno, NV

912,364

20.92

14.93%

17.90%

-43,645

-72,526

0.6

8.9

Sacramento, CA*

14,682,299

22.32

17.78%

17.39%

141,121

141,160

0.5

1.1

San Diego, CA

24,117,278

35.64

12.32%

11.86%

154,798

847,920

1.0

5.7

San Francisco Peninsula

22,580,852

45.72

10.33%

10.51%

9,726

-4,835

4.7

5.8

San Jose - Silicon Valley

33,234,700

43.20

12.45%

12.18%

260,466

521,899

1.1

5.9

Seattle/Puget Sound, WA

20,752,875

34.55

9.42%

9.11%

287,220

206,577

4.3

4.3

737,964

28.56

19.13%

19.51%

-22,357

19,330

-0.4

-14.4

375,021,871

31.87

14.65%

14.36%

3,299,915

5,130,800

1.0

4.4

1,582,235,151

27.33

14.34%

14.20%

11,351,147

21,414,551

0.8

3.0

Walnut Creek, CA West Total U.S. TOTALS

* Q1-14 data used for Sacramento and Los Angeles markets.

P. 16

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

CANADA | DOWNTOWN OFFICE | ALL INVENTORY MARKET

EXISTING INVENTORY (SF) JUNE 30, 2014

Calgary, AB

40,447,480

Edmonton, AB

17,140,407 4,547,627

Halifax, NS*

NEW SUPPLY Q2 2014 (SF)

0

YTD NEW SUPPLY 2014 (SF)

UNDER CONSTRUCTION (SF)

VACANCY RATE (%) MAR 31, 2014

VACANCY RATE (%) JUNE 30, 2014

8.13

8.23

ABSORPTION YTD ABSORPTION Q2 2014 2014 (SF) (SF)

841,064

3,359,000

-39,401

389,794

0

0

1,490,493

8.47

8.66

-50,864

-25,644

17,000

17,000

463,900

11.46

12.41

-159,741

-159,741

Montréal, QC

49,610,579

279,476

279,476

653,498

5.14

5.94

-128,429

-34,930

Ottawa, ON

15,995,156

0

0

0

9.47

9.47

-110,669

259,669

Regina, SK

3,714,792

0

0

160,000

12.75

12.79

-1,405

-57,012

2,402,872

0

0

0

6.22

6.86

-15,509

-19,075

Toronto, ON

Saskatoon, SK

70,514,344

40,000

40,000

5,190,400

3.78

3.61

134,792

362,274

Vancouver, BC

24,474,251

0

45,770

2,150,490

5.56

5.78

-54,165

-53,402

Victoria, BC*

4,902,931

0

0

29,000

8.69

9.85

-36,664

-36,664

Waterloo Region, ON

3,938,504

25,586

25,586

43,280

12.90

12.71

29,596

7,696

11,944,204

0

0

70,000

8.65

8.26

46,911

46,911

249,633,147

362,062

1,248,896

13,610,061

6.35

6.55

-385,548

679,876

Winnipeg, MB* CANADA TOTAL

CANADA | DOWNTOWN OFFICE | CLASS A MARKET

Calgary, AB Edmonton, AB

EXISTING INVENTORY (SF) JUNE 30, 2014

AVERAGE ANNUAL QUOTED RENT (CAD PSF)

VACANCY RATE VACANCY RATE (%) MAR 31, (%) JUNE 30, 2014 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

ANNUAL CHANGE IN RENT (%)

27,568,453

58.00

7.53%

7.01%

143,972

630,126

0.0

-5.6

8,434,321

21.50

6.11%

6.34%

16,027

44,935

-2.3

-14.0

Halifax, NS*

1,951,103

32.53

9.14%

9.42%

9,991

9,991

4.3

-0.2

Montréal, QC

23,073,808

45.00

5.87%

7.69%

-157,167

-162,175

0.0

0.0

Ottawa, ON

10,004,044

36.75

6.48%

7.45%

-96,150

-96,150

-19.3

-26.5

Regina, SK

1,392,816

34.97

6.08%

6.11%

-516

-56,123

0.0

16.6

570,571

43.00

5.75%

6.88%

-6,498

-6,498

0.0

0.0

Saskatoon, SK Toronto, ON

39,391,697

53.94

4.54%

4.56%

74,229

201,107

-4.0

-0.7

Vancouver, BC

10,094,997

53.01

5.51%

5.43%

7,554

-7,852

0.9

-5.9

513,808

35.00

3.55%

2.33%

8,969

8,969

2.9

0.0

Victoria, BC* Waterloo Region, ON

1,561,288

24.86

10.50%

10.69%

-2,939

-1,042

3.1

-4.5

Winnipeg, MB*

2,619,428

33.75

3.99%

4.50%

-13,347

-13,347

0.0

0.0

127,176,334

48.19

5.90%

6.24%

-15,875

551,941

-2.9%

-4.3%

CANADA TOTAL

*Halifax, Victoria and Winnipeg report semi-annually. Q2 data displayed.

COLLIERS INTERNATIONAL |

P. 17

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

CANADA | SUBURBAN OFFICE | ALL INVENTORY EXISTING INVENTORY (SF) JUNE 30, 2014

MARKET

NEW SUPPLY Q2 2014 (SF)

YTD NEW SUPPLY 2014 (SF)

UNDER CONSTRUCTION (SF)

VACANCY RATE (%) MAR 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

YTD ABSORPTION 2014 (SF)

Calgary, AB**

25,818,920

534,606

534,606

2,478,741

9.49

9.62

153,225

153,225

Edmonton, AB

9,544,323

178,631

278,631

197,400

12.37

12.50

130,801

134,953

Halifax, NS*

3,282,082

34,000

34,000

0

10.23

9.42

56,960

56,960

Montréal, QC

25,664,903

586,676

657,584

1,270,962

11.38

13.99

-150,690

-184,707

Ottawa, ON

21,293,374

211,204

211,204

230,500

10.39

11.44

-34,108

-19,533

784,404

0

31,122

40,000

3.27

6.34

-24,081

-24,081

Toronto, ON

Regina, SK

67,879,191

119,206

472,974

1,554,921

8.05

9.08

-165,311

-173,117

Vancouver, BC

29,985,814

556,000

616,000

1,434,462

11.27

12.23

205,703

214,245

Victoria, BC*

3,717,151

0

0

99,600

9.87

10.03

-5,849

-5,849

Waterloo Region, ON

7,379,966

35,186

35,186

203,265

19.29

17.79

61,528

-475,511

Winnipeg, MB*

3,386,471

0

0

70,000

8.54

6.36

73,840

73,840

198,736,599

2,255,509

2,871,307

2,871,307

10.06

10.50

302,018

-249,575

CANADA TOTAL

CANADA | SUBURBAN OFFICE | CLASS A EXISTING INVENTORY (SF) JUNE 30, 2014

MARKET

Calgary, AB**

AVERAGE ANNUAL QUOTED RENT (CAD PSF)

VACANCY RATE (%) MAR 31, 2014

VACANCY RATE (%) JUNE 30, 2014

ABSORPTION Q2 2014 (SF)

QUARTERLY CHANGE IN RENT (%)

YTD ABSORPTION 2014 (SF)

ANNUAL CHANGE IN RENT (%)

12,727,120

43.00

9.49

8.44

153,225

153,225

-2.3

-2.3

Halifax, NS*

1,478,125

28.56

11.50

10.54

56,960

56,960

-3.7

0.2

Montréal, QC

14,491,322

29.00

10.02

14.62

-184,707

-184,707

0.0

3.6

Ottawa, ON

12,250,530

32.00

10.45

11.58

-34,108

-19,533

8.9

4.6

Regina, SK

141,122

29.00

0.00

22.05

-24,081

-24,081

0.0

0.0

Toronto, ON

32,652,849

31.11

9.07

9.60

-173,117

-173,117

-0.2

1.3

Vancouver, BC

15,332,892

27.62

12.06

13.07

214,245

214,245

-17.4

-17.9

Victoria, BC* Waterloo Region, ON CANADA TOTAL

808,145

40.00

16.53

17.15

-5,849

-5,849

0.0

5.3

3,696,762

22.44

17.57

16.74

-475,511

-475,511

0.0

-7.6

93,578,867

31.64

10.37

11.43

97,377

-458,368

-2.5

-2.2

*Halifax, Victoria and Winnipeg report semi-annually. Q2 data displayed. | **Q1-14 data displayed for Calgary Suburban.

CBD OFFICE UNDER CONSTRUCTION BY MARKET | Q2 2014 | CANADA

CBD OFFICE ABSORPTION BY MARKET | Q2 2014 | CANADA 134.8

Toronto, ON

46.9

Winnipeg, MB*

29.6

Waterloo Region, ON

Edmonton, AB Vancouver, BC

Halifax, NS*

Regina, SK

-50.9

Winnipeg, MB*

-54.2

Waterloo Region, ON

-110.7

Ottawa, ON Montréal, QC

Victoria, BC*

-150

0.2 0.1 0.0 0.0

Saskatoon, SK 0.0 Ottawa, ON 0.0

-128.4 -159.7 -200

0.5

Halifax, NS*

-39.4

Calgary, AB

0.7

Montréal, QC

-36.7

Victoria, BC*

2.2 1.5

Edmonton, AB

-15.5

Saskatoon, SK

3.4

Calgary, AB Vancouver, BC

-1.4

Regina, SK

5.2

Toronto, ON

-100

-50

0

50

100 150 SF (Thousands)

0.0

1.0

2.0

3.0

4.0

5.0 6.0 SF (Millions)

*Victoria, Halifax and Winnipeg report data semi-annually Q2 data shown | Source: Colliers International.

P. 18

| COLLIERS INTERNATIONAL

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

UNITED STATES | OFFICE INVESTMENT (continued)

UNITED STATES | OFFICE INVESTMENT MARKET

CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE (USD PSF) (%) (USD PSF) (%)

CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE (USD PSF) (%) (USD PSF) (%)

MARKET

Albuquerque, NM

145.00

9.00

175.00

8.00

Oakland, CA

Atlanta, GA

125.00

7.90

127.00

8.20

Orange County, CA

Bakersfield, CA

108.00

Baltimore, MD

288.98

Boston, MA

421.00

Chicago, IL

350.00

5.50

225.00

7.50

Pittsburgh, PA

Cincinnati, OH

125.00

9.75

135.00

9.25

Pleasanton/Tri-Valley, CA

57.00

8.00

Portland, OR

Dallas, TX

166.00

6.80

73.00

6.75

Sacramento, CA*

Denver, CO

375.00

6.00

150.00

7.00

San Diego, CA

139.00

7.80

San Francisco Peninsula

Fresno, CA

125.00

8.50

160.00

8.00

San Francisco, CA

565.00

4.58

Ft. LauderdaleBroward, FL

173.00

163.00

8.37

San Jose - Silicon Valley

130.00

Ft. Worth, TX

132.00

8.10

Savannah, GA

160.00

Houston, TX

202.00

7.50

Seattle/Puget Sound, WA

205.00 6.70

124.80

7.65

213.00

Columbia, SC

Fairfield County, CT

Indianapolis, IN

170.00

8.00

150.00

7.25

Jacksonville, FL

94.00

7.00

127.00

9.70

130.35

8.00

117.00

9.00

Long Island, NY

168.00

8.15

Los Angeles - Inland Empire, CA

200.00

7.50

Los Angeles, CA*

276.00

6.44

Las Vegas, NV Little Rock, AR

88.00

9.00

Miami-Dade, FL

311.00

5.00

212.00

6.75

Milwaukee, WI

120.00

8.75

110.00

9.00

116.00

7.40

Minneapolis, MN Nashville, TN

150.00

7.00

New Jersey - Central

200.53

6.26

New Jersey - Northern

155.66

7.75

NYC- Downtown Manhattan NYC - Midtown Manhattan NYC - Midtown South Manhattan

275.00

7.20

440.00

4.50

1221.00

4.50

590.00

4.10

275.00

7.00

180.00

7.75

182.00

6.40

Orlando, FL

220.00

7.50

154.70

7.50

Philadelphia, PA

145.00

7.20

172.00

7.56

Phoenix, AZ

100.00

6.50

120.00

6.80

90.00

8.25

115.00

8.50

163.00

7.90

122.57

6.01

187.97

7.80

85.24

6.50

70.00

8.20

141.50

6.75

325.00

7.45

7.50

394.00

5.70

9.25

120.00

9.50

321.00

5.50

191.00

7.50

St. Louis, MO

90.00

9.50

135.00

8.50

Stamford, CT

186.00

8.00

Tampa Bay, FL

110.58

7.50

125.76

7.75

Walnut Creek, CA

369.00

5.50

180.00

8.00

Washington DC

600.00

5.28

221.00

7.10

West Palm Beach/Palm Beach County, FL

90.00

215.00

Westchester County, NY White Plains, NY

283.73

U.S. TOTALS**

254.06

6.96

179.00

7.60

163.82

7.70

* Q1-14 data used for Sacramento, Stamford and Los Angeles markets. ** Average sales price and cap rate use straight averages.

CANADA | OFFICE INVESTMENT CBD SALES PRICE (CAD PSF)

MARKET

CBD CAP RATE (%)

SUBURBAN SUBURBAN SALES PRICE CAP RATE (CAD PSF) (%)

Edmonton, AB

279.62

5.75

Montréal, QC

265.00

6.75

185.00

6.50 7.25

Regina, SK

280.00

6.75

200.00

7.25

Saskatoon, SK

306.00

6.75

Vancouver, BC

500.00

5.00

375.00

6.25

Victoria, BC*

300.00

6.25

280.00

6.50

Waterloo Region, ON

180.00

7.50

141.00

7.50

Winnipeg, MB*

150.00

7.25

140.00

7.25

CANADA TOTALS**

251.18

5.78

188.71

6.06

*Victoria and Winnipeg report semi-annually. Q2 data displayed. **Straight averages used.

COLLIERS INTERNATIONAL |

P. 19

HIGHLIGHTS | Q2 2014 | OFFICE | NORTH AMERICA

485 offices in 63 countries on 6 continents United States: 146 Canada: 44 Latin America: 25 Asia Pacific: 186 EMEA: 84 • $2.1

billion in annual revenue

• 15,800

professionals and staff

• 1.46

billion square feet under management

• $75

billion in total transaction value

Glossary Inventory — Includes all existing multi- or single-tenant leased and owner-occupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate — Percentage of total inventory physically vacant as of the survey date, including direct vacant and sublease space. Absorption — Net change in physically occupied space over a given period of time. New Supply — Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions.

Annual Quoted Rent — Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building, inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate — (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. NOTE: SF = square feet

MSF = million square feet



PSF = per square foot



CBD = central business district

COLLIERS INTERNATIONAL 601 Union Street, Suite 4800 Seattle, WA 98101 TEL +1 206 695 4200 FOR MORE INFORMATION Andrea B. Cross Office Research Manager | USA TEL +1 415 288 7892 EMAIL [email protected] CONTRIBUTORS Jeff Simonson Senior Research Analyst | USA

VACANCY RATES

Cliff Plank National Director | GIS & Mapping

13.72

Copyright © 2014 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Accelerating success.

8.52

101.

8msf

Up from 88.2 msf at year-end 2013 75.7 msf at mid-year 2013 Note: Office statistics are based on the 87 U.S. and Canadian markets tracked by Colliers Sources: Bureau of Labor Statistics, Federal Reserve of St. Louis, Colliers International

P. 20

| COLLIERS INTERNATIONAL