2012 Global Market report - NAI Global

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Vancouver, British Columbia, Canada Victoria, British Columbia, Canada Contact NAI Commercial Vancouver +1 604 691 6643 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 3,855,100 2.7% $1,632.89 $47,340.29 2.0% 7.5% 1.0% 34.493 Vancouver is the largest city in British Columbia and the third largest city in Canada. Metro Vancouver is home to 2.4 million people. It is one of the largest ports on the west coast and a gateway to Asia. Signs point to a modest recovery continuing through 2012. Without more robust growth in the US, the British Columbia economy will grow at a respectable 2.5% to 3.0% rate annually. The commercial property market has normalized with average cap rates mostly below 7% regardless of product type. The region continues to be an attractive place to live, operate a business or own commercial property. The office market has experienced positive absorption in 2011 resulting in an overall vacancy rate declining from 8% to 7%. The downtown market is very tight, the result of no new office supply since 2007. The vacancy in the CBD is about 4%, the lowest of any North American city. Three new office towers are in pre-leasing which should address the supply situation in the coming years. Meantime the suburban markets are the beneficiary. The industrial market can be characterized as stable. Overall vacancy is about 5% in the region. The tenant market has been weaker than expected in 2011. Lease rates range between $6.50 and $8.50/SF largely unchanged from last year. Land prices average $1.0 million per acre of land. With economic growth approximating 2.5% per annum we expect a strengthened tenant market in 2012 with corresponding modest increase in rental rates and land values. The retail market is coming off a very robust 2010. While the investment appetite remains strong there are fewer quality assets available, resulting in much lower transaction volume in 2011. Lease rates will remain stable, supported by overall economic growth, increased housing starts and slow but steady employment growth. The investment market has returned to near normal transaction volumes. REITs are flush with cash. Institutional owners are rebalancing portfolios and high-net worth investors continue to be attracted to this supply constrained west coast market. The multifamily market is particularly strong with cap rates below 5% in most sub-markets in the city and between 5% and 6% in the suburban areas. Transaction activity for 2011 was steady with improvement expected in 2012 resulting from continued low interest rates and population growth in the region. Contact NAI Commercial Victoria +1 250 381 2265 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 3,855,100 2.7% $1,632.89 $47,340.29 2.0% 7.5% 1.0% 34.493 Victoria, the capital city of British Columbia, has five primary economic drivers that include the provincial seat of government, the University of Victoria, high technology, tourism and the Department of National Defense, which operates Canada’s largest naval base on the Pacific coast. Since the fall of 2008 when the financial crisis swept across North America and the rest of the world, two of the major economic drivers, government revenue and tourism, have been negatively impacted. The office market has begun an uneven recovery after three years of increasing vacancy rates. The suburban office market has seen private sector growth, particularly from high tech firms, filling spaces vacated by the public sector. The supply of new office space has continued to be stifled by existing inventory (Uptown) and limited new demand for Class A space. Over-all office vacancy rate is expected to continue to trend downwards but will remain above historical levels (9% downtown and 8% in the suburbs). Lease rates are expected to remain stable. The industrial market is slow but steady demand and limited new supply will result in below 2% vacancy rate in the downtown industrial areas and about 5% in the suburbs. Land values have held steady contributing to stable industrial rents. Due to lack of additional capacity and low vacancy in established industrial areas (particularly downtown), growing businesses will continue to look for expansion options outside downtown Victoria. The retail market in the downtown core has shown weakness due to the anemic economic recovery and continued softness in the important tourism sector. The restaurant sector was hard hit by new minimum wage legislation, tightened drinking and driving regulations and the introduction of the Harmonized Sales Tax (HST) to restaurant meals. Vacancy rates in the CRD (Capital Region District) are expected to hold steady at around 7%. Regional and community retail centers in Greater Victoria experience a healthier 2% to 3% vacancy rate. Lease rates have remained stable. The Investment market in Greater Victoria continues to be frustrated by a lack of sellers. Low interest rates, a volatile stock market and an over-supply of qualified purchasers chasing the limited number of available investment grade properties will keep cap rates down. Cap rates on prime commercial properties have remained unchanged at 6% to 7% with multifamily apartments unchanged at around 5%. Vancouver At A Glance conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores CAD 35.00 CAD 50.00 $ 34.65 $ 49.50 5.00% CAD 28.00 CAD 38.00 $ 27.72 $ 37.62 6.00% CAD 25.00 CAD 35.00 $ 24.75 $ 34.65 8.00% CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 10.00% CAD 25.00 CAD 32.00 $ 24.75 $ 31.68 12.00% CAD 18.00 CAD 25.00 $ 17.82 $ 24.75 14.00% CAD 6.00 CAD 9.00 $ 5.94 $ 8.91 4.50% CAD 6.50 CAD 10.00 $ 6.44 $ 9.90 4.50% CAD 8.50 CAD 14.00 $ 8.42 $ 13.86 5.00% CAD 100.00 CAD 200.00 $ 99.01 $198.02 5.00% CAD 25.00 CAD 65.00 $ 24.75 $ 64.36 5.00% CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 5.50% CAD 25.00 CAD 40.00 $ 24.75 $ 39.60 6.00% N/A N/A N/A N/A N/A deVeloPment land low//acre High/acre low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential CAD 3,267,000.00 CAD 5,880,600.00 $3,234,765.60 $ 5,822,229.60 CAD 900,000.00 CAD 1,200,000.00 $ 891,089.11 $ 1,188,118.81 CAD 850,000.00 CAD 1,200,000.00 $ 841,584.16 $ 1,188,118.81 CAD 750,000.00 CAD 1,100,000.00 $ 742,574.26 $ 1,089,108.91 CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71 CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71 Victoria At A Glance conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores CAD 40.00 CAD 45.00 $ 39.60 $ 44.55 10.00% CAD 36.00 CAD 40.00 $ 35.64 $ 39.60 6.50% CAD 30.00 CAD 36.00 $ 29.70 $ 35.64 8.10% CAD 38.00 CAD 42.00 $ 37.62 $ 41.58 15.00% CAD 32.00 CAD 36.00 $ 31.68 $ 35.64 8.50% CAD 26.00 CAD 30.00 $ 25.74 $ 29.70 9.00% CAD 10.00 CAD 12.00 $ 9.90 $ 11.88 3.00% CAD 12.00 CAD 14.00 $ 11.88 $ 13.86 2.00% CAD 12.00 CAD 18.00 $ 11.88 $ 17.82 2.50% CAD 45.00 CAD 90.00 $ 44.55 $ 89.11 6.00% CAD 30.00 CAD 42.00 $ 29.70 $ 41.58 4.00% CAD 25.00 CAD 30.00 $ 24.75 $ 29.70 2.00% CAD 60.00 CAD 75.00 $ 59.41 $ 74.26 4.00% N/A N/A N/A N/A N/A deVeloPment land low//acre High/acre low/acre High/acre Office in CBD CAD 1,500,000.00 CAD2,000,000.00 $1,485,148.51 $1,980,198.02 Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park CAD CAD CAD 600,000.00 CAD 1,000,000.00 $ 594,059.41 $ 990,099.01 500,000.00 CAD 750,000.00 $ 495,049.50 $ 742,574.26 600,000.00 CAD 900,000.00 $ 594,059.41 $ 891,089.11 Retail/Commercial Land CAD 1,000,000.00 CAD 1,500,000.00 $ 990,099.01 $1,485,148.51 Residential CAD 400,000.00 CAD 1,000,000.00 $ 396,039.60 $ 990,099.01 2012 Global Market Report n www.naiglobal.com 45

Halifax, Nova Scotia, Canada Ottawa, Ontario, Canada Contact NAI Turner Drake & Partners +1 902 429 1811 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 3,855,100 2.7% $1,632.89 $47,340.29 2.0% 7.5% 1.0% 34.493 Halifax is the capital city of Nova Scotia and economic center for Canada’s east coast. With a population of over 403,000, it is one of the oldest cities in Canada and offers a unique blend of history and modern conveniences. Halifax Shipyard has just received a major government contract worth a combined $25 billion and thousands of new jobs and millions of dollars in spin-off benefits for the area are anticipated over the next 25 years. Halifax’s office rental market is maintaining a healthy status quo. The overall vacancy rate increased slightly from 7.64% in 2010 to 7.75% in 2011 in part due to vacancy in Class C office space increasing by 4.25% over the past year. The overall increase in net rental rates from 2010 is 2.78% of which Class C office space had the highest increase of 4.25%. The average rental rate in the Halifax office market now sits at $13.69/SF. Although there are several new office buildings proposed for the CBD none of these have yet to make it off the drawing board. Migration to suburban office markets located closer to where employees live and with free parking, have made these locations popular with employers. We anticipate the overall vacancy rate will increase to 9.03% in the next year, driven by increases in supply of rental space outpacing increased demand. The industrial market showed an increase in the vacancy rate and is now sitting at 8.22% up from 6.72% in 2010. The net rental rate in the Halifax industrial market now averages $7.30/SF increasing from $7.04/SF in 2010. We anticipate that the overall vacancy rate will rise slightly to 8.32%. Despite the predicted increase in the vacancy rate, a slight increase in net rent per SF is expected. On the retail front Halifax Shopping Center and Mic Mac Mall the two largest regional malls in Nova Scotia are both full with several new to Nova Scotia retailers moving in recently. Sephora, Hollister, Rockport and Aeropostale have opened here as well as Bed, Bath and Beyond. Toys R Us has a stand alone store under construction at Dartmouth Crossing and Banana Republic is opening a factory store in this location at the end of 2011. Financing for multi-unit residential properties is readily available with CMHC mortgage loan insurance and there are numerous buildings under construction in the Halifax metro area. As in previous years, Investment sales are few and far between with most landlords holding onto their real estate. Contact NAI Commercial Ottawa +1 613 230 2100 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 3,855,100 2.7% $1,632.89 $47,340.29 2.0% 7.5% 1.0% 34.493 Ottawa, the national capital of Canada, has experienced another positive year. Employment has increased with 73,000 jobs created, including 22,000 in the private sector and 51,000 in the public sector. In Q3 2011, unemployment was 6.4%. The office market shows an increase in vacancy to 6.5%, lease rates rose during the year and absorption is up at 80,862 SF. Currently new supply under construction in Ottawa is at 787,750 SF. The vacancy in Ottawa’s office market has decreased for the 8th consecutive quarter, now hovering at 6.5%. The downtown core vacancy is at 4.3%. The CBD (Ottawa) market continues to stabilize, but vacancies are expected to impact the market in Q4 2011 with the addition of the EDC building of 535,000 SF. Rental rates are holding steady at this time. Overall, the vacancy rate in Ottawa’s suburban market decreased to just over 8.0%. The Kanata vacancy rate has decreased with a net positive absorption of 65,000 SF. The East End continues to be Ottawa’s tightest office market with vacancy decreased to 3.2%. The West End sees a 4.5% vacancy rate with Genivar’s 80,000 SF new building coming on stream for Q1 2012. For the industrial market, Ottawa again performed well with a vacancy rate decreasing to 5.4%, lease rates are averaging $7.79/SF, net absorption year to date is at 363,533 SF and construction remains constant. Demand remains healthy and there has been significant investment activity. Big block users are prevalent in the East market. There is a decreased availability in the west with Avaya (from the former Nortel campus), leasing a 107,000 SF in a building on Legget Drive. There are currently no new industrial buildings under construction. Controlex Corp. completed a sale-leaseback at 820 Belfast Road; the 12,000 SF building sold for $2.2 million and is fully occupied by two tenants. Investment activity has been strong this year with notable transactions by Dundee Realty continuing to add to their portfolio; 130 Slater Street (a private sector transacted office building for $190.00/SF, 100% occupied by private sector tenants) and 360 Laurier West (a public sector transacted office building at $176.00/SF, fully occupied by five public sector tenants) was acquired by Dundee in Q3 for $48.6 million. Halifax At A Glance conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal CAD CAD CAD CAD N/A 32.75 7.44 N/A 21.50 13.50 N/A CAD 35.99 CAD 29.48 N/A CAD 35.94 CAD 33.00 N/A $ 32.43 $ 17.27 N/A $ 21.29 $ 13.37 N/A $ 35.63 $ 29.19 N/A $ 35.58 $ 32.67 N/A 6.50% 5.70% N/A 7.20% 7.80% Bulk Warehouse Manufacturing High Tech/R&D retaIl CAD CAD 6.84 N/A 7.96 CAD 18.85 N/A CAD 20.00 $ $ 6.77 N/A 7.88 $ 18.66 N/A $ 19.80 11.00% N/A 6.60% Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores CAD CAD CAD CAD 33.00 27.03 28.41 68.00 N/A CAD 60.00 CAD 29.03 CAD 31.50 CAD 95.00 N/A $ 32.67 $ 26.76 $ 28.13 $ 67.33 N/A $ 59.41 $ 28.74 $ 31.19 $ 94.06 N/A N/A N/A N/A N/A N/A deVeloPment land low/acre High/acre low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential N/A N/A N/A N/A CAD 261,360.00 CAD 391,169.00 $ 258,772.28 $ 387,296.04 CAD 217,800.00 CAD 392,040.00 $ 215,643.56 $ 388,158.42 CAD 609,840.00 CAD 1,118,620.00 $ 603,801.98 $ 1,107,544.55 CAD 609,575.00 CAD 1,118,620.00 $ 603,539.60 $ 1,107,544.55 CAD 7,717,000.00 CAD 7,857,143.00 $7,640,594.06 $ 7,779,349.50 Ottawa At A Glance conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) N/A CDN 25.00 CDN 15.00 N/A CDN 18.00 N/A CDN 35.00 CDN 20.00 N/A CDN 22.00 N/A $ 24.75 $ 14.85 N/A $ 17.82 N/A $ 34.65 $ 19.80 N/A $ 21.78 N/A 4.00% 5.00% N/A 4.00% Class B (Secondary) IndustrIal CDN 10.00 CDN 14.00 $ 9.90 $ 13.86 5.00% Bulk Warehouse CDN 4.00 CDN 8.00 $ 3.96 $ 7.92 5.20% Manufacturing High Tech/R&D retaIl CDN CDN 6.00 8.00 CDN 11.00 CDN 10.00 $ $ 5.94 7.92 $ 10.89 $ 9.90 5.40% 12.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores CDN 20.00 CDN 20.00 CDN 20.00 CDN 20.00 N/A CDN 50.00 CDN 50.00 CDN 50.00 CDN 50.00 N/A $ 19.80 $ 19.80 $ 19.80 $ 19.80 N/A $ 49.50 $ 49.50 $ 49.50 $49.50 N/A 2.10% 3.50% 3.50% 5.00% N/A deVeloPment land low/acre High/acre low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential CAD 17,000,000.00 CAD 17,000,000.00 $ 16,831,683.17 $16,831,683.17 CAD 350,000.00 CAD 400,000.00 $ 346,534.65 $ 396,039.60 CAD 275,000.00 CAD 375,000.00 $ 272,277.23 $ 371,287.13 N/A N/A N/A N/A CAD 350,000.00 CAD 2,000,000.00 $ 346,534.65 $ 1,980,198.02 CAD 375,000.00 CAD 3,000,000.00 $ 371,287.13 $ 2,970,297.03 2012 Global Market Report n www.naiglobal.com 46

Page 1 and 2: 2012 Global Market report Values, t

Page 3 and 4: n n n table of contents General Inf

Page 5 and 6: Global Outlook US Year in Review As

Page 7 and 8: On the Road to Recovery % of Loss S

Page 9 and 10: 55% (1.1 million) owning and 45% (8

Page 11 and 12: short-term leases, the multifamily

Page 13 and 14: Alberta is home to Canada’s oil a

Page 15 and 16: Office The sovereign debt crisis an

Page 17 and 18: Area Type Q1 2010 Q2 2010 Q3 2010 Q

Page 19 and 20: obust telecom infrastructure and av

Page 21 and 22: egion’s cities. Nevertheless, lea

Page 23 and 24: For 2012, absorption in the commerc

Page 25 and 26: n us Highlights - northeast region

Page 27 and 28: n us Highlights - midwest region n

Page 29 and 30: n us Highlights - West region n Ari

Page 31 and 32: Adelaide, Australia Brisbane, Austr

Page 33 and 34: Sydney, Australia Beijing, China Co

Page 35 and 36: Shanghai, China Shenzhen, China Con

Page 37 and 38: Chennai, India Mumbai, India Contac

Page 39 and 40: Jakarta, Indonesia Tokyo, Japan Con

Page 41 and 42: Christchurch, New Zealand Wellingto

Page 43 and 44: Taipei, Taiwan Ho Chi Minh City, Vi

Page 45: Calgary, Alberta, Canada Edmonton,

Page 49 and 50: Regina, Saskatchewan, Canada Contac

Page 51 and 52: The Baltics (Latvia/Estonia/Lithuan

Page 53 and 54: Helsinki, Finland Paris - lle de Fr

Page 55 and 56: Tel Aviv, Israel Almaty, Kazakhstan

Page 57 and 58: Amsterdam, The Netherlands Oslo, No

Page 59 and 60: Moscow, Russia St. Petersburg, Russ

Page 61 and 62: Madrid, Spain Stockholm, Sweden Con

Page 63 and 64: Istanbul, Turkey Kiev, Ukraine Cont

Page 65 and 66: Leeds, England, United Kingdom Lond

Page 67 and 68: Latin America sectIon contents Buen

Page 69 and 70: Rio de Janeiro, Brazil Sao Paulo, B

Page 71 and 72: San Jose, Costa Rica Contact NAI Co

Page 73 and 74: Guadalajara, Jalisco, Mexico Guanaj

Page 75 and 76: Mexico City, Mexico Contact NAI Mex

Page 77 and 78: Saltillo, Coahuila, Mexico San Luis

Page 79 and 80: Lima, Peru Caracas, Venezuela Conta

Page 81 and 82: Birmingham, Alabama Huntsville/Deca

Page 83 and 84: Little Rock, Arkansas Bakersfield,

Page 85 and 86: Oakland, California Orange County,

Page 87 and 88: San Francisco, California Ventura C

Page 89 and 90: Hartford, Connecticut Wilmington, D

Page 91 and 92: Fort Lauderdale, Florida Ft. Myers/

Page 93 and 94: Miami, Florida Ocala/Gainesville, F

Page 95 and 96: Tampa Bay, Florida Atlanta, Georgia

Page 97 and 98: Boise, Idaho Southeast (Idaho Falls

Page 99 and 100: Fort Wayne, Indiana Indianapolis, I

Page 101 and 102: Des Moines, Iowa Sioux City, Iowa C

Page 103 and 104: Baton Rouge, Louisiana Lake Charles

Page 105 and 106: Greater Portland, Maine Baltimore,

Page 107 and 108: Greater Springfield, Massachusetts

Page 109 and 110: Minneapolis/St. Paul, Minnesota Jac

Page 111 and 112: Billings, Montana Bozeman, Montana

Page 113 and 114: Omaha, Nebraska Las Vegas, Nevada C

Page 115 and 116: Portsmouth, New Hampshire Atlantic

Page 117 and 118: Ocean/Monmouth Counties (“Shore M

Page 119 and 120: Las Cruces, New Mexico Albany, New

Page 121 and 122: Westchester, New York Asheville, No

Page 123 and 124: Raleigh/Durham, North Carolina Farg

Page 125 and 126: Cincinnati, Ohio Cleveland, Ohio Co

Page 127 and 128: Oklahoma City, Oklahoma Tulsa, Okla

Page 129 and 130: Berks County, Pennsylvania Bucks Co

Page 131 and 132: Philadelphia, Pennsylvania Philadel

Page 133 and 134: Wilkes-Barre/Scranton/Hazleton, Pen

Page 135 and 136: Sioux Falls, South Dakota Chattanoo

Page 137 and 138: Memphis, Tennessee Nashville, Tenne

Page 139 and 140: Corpus Christi, Texas Dallas, Texas

Page 141 and 142: Houston, Texas Contact NAI Houston

Page 143 and 144: Salt Lake City, Utah Washington Cou

Page 145 and 146: Northern Virginia Seattle/Puget Sou

Page 147 and 148: Madison, Wisconsin Milwaukee, Wisco

Page 149 and 150: n Glossary n Acre Area of land equa

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