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<strong>Canada</strong> & U.S. <strong>Office</strong> <strong>Market</strong> OverviewEconomic headwinds challenge Canadian office market fundamentals, U.S. sector shows resilienceThe Canadian and U.S. office sectors appear to be moving in opposite directions. Stymied by less-than-stellar economic results, Canadian markets areseeing mixed performance, while U.S. indicators have been largely positive. Despite the differences, there are similarities – mounting concern surroundingdepressed oil prices and the burden placed on markets tied to the energy industry (such as Calgary and Houston) on both sides of the border.<strong>Canada</strong> OverviewAlready contending with a burgeoning development pipeline,Canadian office market fundamentals faced additional headwindsfrom weaker-than-expected economic indicators through the first halfof 2015. While performance was mixed among the 13 markets surveyed,depressed oil prices are taking a toll in Alberta – particularly Calgary.Meanwhile, workplace strategies and urban intensification continue,and as purely office development sites become increasingly scarce,urban renewal and mixed-use development – combining office, retailand residential – are found across many of <strong>Canada</strong>’s downtown markets.As economists debate the country’s performance, the officemarketplace will remain active in coming quarters. Commodity-basedand development-laden markets will likely experience a flight to quality,making it difficult for landlords to maintain occupancy levels andgenerate notable rental rate growth, thus shifting the tenant-landlordbalance that some markets have enjoyed.Notable First-Half 2015 Canadian <strong>Office</strong> <strong>Market</strong> Highlights:• Varying and sporadic absorption levels, coupled with new officecompletions, lifted <strong>Canada</strong>’s overall vacancy rate 110 basis points(bps) from one year earlier to 10.3% at the midway point of 2015.• Quebec City (8.6%) and Lethbridge (16.5%) posted the lowest andhighest vacancy rates, respectively; the greatest swing occurred inCalgary (11.5%, +320 bps).• Weighed down by Calgary’s woes, <strong>Canada</strong>’s Western marketscollectively saw vacancy spike 160 bps over the previous yearto 10.3% at mid-year 2015. Eastern markets witnessed a modest30-bps bump to 10%.• Downtown markets as a whole posted 8.8% vacancy at mid-year2015, up 160 bps year-over-year – more than half of the marketsremained in single-digit territory.• Suburban markets recorded positive growth as vacancy retreatedmarginally (12.1%, -20 bps), led by strong absorption numbers inToronto (13%, -120 bps).• <strong>Canada</strong> delivered 8.5 million square feet (msf) annualized of newoffice space (42% in Toronto), with developers slightly favouringcompletions in the country’s downtown markets.• Despite a decline from 2014, more than 20 msf is underconstruction across <strong>Canada</strong> (52% preleased and representing 3.9%of existing inventory).• In the past year, the average asking gross rent for class A downtownoffice space in <strong>Canada</strong> fell to $43.47 per square foot (psf) (-$0.52psf), while rising modestly for suburban class A product ($41.34 psf,+$0.83 psf).U.S. OverviewVacancy levels in the 4.4-bsf U.S. office market improved year-overyearwith positive net absorption and rising class A rents. By mid-year2015, many U.S. cities had returned to a leasing atmosphere favorableto landlords, even while tenants continued their flight to quality andas square feet under development trended higher. Rising levels ofpositive absorption are notable in light of the widespread adoption ofoffice design efficiencies and falling rates of space utilization. The labormarket likewise improved. The Bureau of Labor Statistics reported theunemployment rate in June 2015 was 5.3% compared with 6.1% in June2014.Notable First-Half 2015 U.S. <strong>Office</strong> <strong>Market</strong> Highlights:• Overall office vacancy fell to less than 13% at mid-year 2015,dropping by 60 bps since mid-year 2014 - though downtownmarkets remained much healthier and averaged just slightly lessthan 11% vacant. This differential highlights an urban-centricworkforce and the desirability of 24-hour environments.• San Francisco recorded 5.3% vacancy, the country’s lowest overallrate, while the tightest downtown market was also found in NorthernCalifornia with San Mateo reporting a vacancy rate of 1.1%.• At mid-year 2015, annual net absorption was 46 msf, an increase ofmore than 10% year-over-year, and both suburban and downtownmarkets recorded positive net absorption for the 12-month period.• Dallas (6.5 msf), Boston (3.9 msf) and New York (3.6 msf) recordedthe greatest amount of absorption between mid-year 2014 and midyear2015.• Pricing has been trending upward with class A asking rents indowntown markets averaging more than $50 psf on a gross basis,and up by 5% year-over-year.• New York, the country’s largest office market with 435 msf, alsoreported the country’s highest class A rent - $78.57 psf gross. SanFrancisco ($67 psf), Boston ($62.80 psf) and Washington, DC ($56.09psf) round out the list of larger markets with downtown asking rentsnorth of $55 psf.• During the 12-month period ending June 30, 2015, a total of 33 msfof new office space was delivered in <strong>Avison</strong> <strong>Young</strong>’s U.S. markets.Most of that was located in suburban markets where 25 msf, or0.9% of inventory, was delivered. In contrast, just 8 msf, or 0.5%, ofdowntown inventory was completed.• 71 msf remained under construction at mid-year 2015, comparedwith 65 msf at this time last year. Houston (11 msf), Dallas (8 msf)and Washington, DC (8 msf) represent the three leading U.S. citiesin terms of total office space under development. On the whole,preleasing activity in new development has been significant andaverages 58%.Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>3


<strong>Canada</strong> & U.S. <strong>Office</strong> <strong>Market</strong> Highlights25%<strong>Canada</strong> Metropolitan Area<strong>Office</strong> <strong>Canada</strong> Vacancy Metropolitan Rate Comparison Area<strong>Office</strong> Vacancy Rates20%15%10%5%0%<strong>Canada</strong>25%Mid-Year 2014 Mid-Year 20152014 2015U.S. Metropolitan Area<strong>Office</strong> U.S. Vacancy Metropolitan Rate ComparisonArea<strong>Office</strong> Vacancy Rates20%15%10%5%0%AtlantaAustinBostonCharlestonCharlotteChicagoClevelandColumbusDallasDenverDetroitFairfield CountyFort LauderdaleHoustonIndianapolisLas VegasLong IslandLos AngelesMiamiMinneapolisNew JerseyNew YorkOaklandOrange CountyOrlandoPhiladelphiaPittsburghRaleigh-DurhamRenoSacramentoSan Diego CountySan FranciscoSan MateoTampaWashington, DCWest Palm BeachAY U.S. <strong>Market</strong>sMid-Year 2014 Mid-Year 20152014 2015AY U.S. <strong>Market</strong>s4Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


<strong>Canada</strong> & U.S. <strong>Office</strong> <strong>Market</strong> Highlights25%<strong>Canada</strong>Downtown & Suburban <strong>Canada</strong> <strong>Office</strong> Vacancy RatesDowntown & Suburban <strong>Office</strong> Vacancy Rates20%15%10%5%0%<strong>Canada</strong>25%DowntownSuburbanDowntown SuburbanU.S.Downtown & SuburbanU.S.<strong>Office</strong> Vacancy RatesDowntown Suburban <strong>Office</strong> Vacancy Rates20%15%10%5%0%AtlantaAustinBostonCharlestonCharlotteChicagoClevelandColumbusDallasDenverDetroitFairfield CountyFort LauderdaleHoustonIndianapolisLas VegasLong IslandLos AngelesMiamiMinneapolisNew JerseyNew YorkOaklandOrange CountyOrlandoPhiladelphiaPittsburghRaleigh-DurhamRenoSacramentoSan Diego CountySan FranciscoSan MateoTampaWashington, DCWest Palm BeachAY AY U.S. <strong>Market</strong>sDowntownSuburbanDowntown SuburbanMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 5


<strong>Canada</strong> & U.S. <strong>Office</strong> <strong>Market</strong> Highlights$50<strong>Canada</strong>Downtown Class A Average <strong>Canada</strong> Asking Gross RentsDowntown Class A Average Asking Gross Rents$50<strong>Canada</strong><strong>Canada</strong>Suburban Class A Average Asking Gross RentsSuburban Class A Average Asking Gross Rents$45$45$40$40$35$35$30$30$25$25$20$20$15$15$10$10$5$5$0<strong>Canada</strong>$0<strong>Canada</strong>Downtown Class A Average Asking Rent ($psf net)Downtown Class A Average Additional Rent ($psf)Suburban Class A Average Asking Rent ($psf net)Suburban Class A Average Additional Rent ($psf)Downtown Class A Average Asking Rent ($psf net) Downtown Class A Average Additional Rent ($psf)Suburban Class A Average Asking Rent ($psf net) Suburban Class A Average Additional Rent ($psf)* Rental rates are shown in CAN $ * Rental rates are shown in CAN $$80U.S.Downtown Class A Average Asking Gross RentsU.S.Downtown Class A Average Asking Gross Rents$80U.S.Suburban Class A Average Asking Gross RentsU.S.Suburban Class A Average Asking Gross Rents$70$70$60$60$50$50$40$40$30$30$20$20$10$10$0AtlantaAustinBostonCharlestonCharlotteChicagoClevelandColumbusDallasDenverDetroitFairfield CountyFort LauderdaleHoustonIndianapolisLas VegasLong IslandLos AngelesMiamiMinneapolisNew JerseyNew YorkOaklandOrange CountyOrlandoPhiladelphiaPittsburghRaleigh-DurhamRenoSacramentoSan Diego CountySan FranciscoSan MateoTampaWashington, DCWest Palm BeachAY U.S. <strong>Market</strong>sDowntown Class A Average Asking Rent ($psf net)Downtown Class A Average Asking Rent ($psf net)AY U.S. <strong>Market</strong>sDowntown Class A Average Additional Rent ($psf)Downtown Class A Average Additional Rent ($psf)$0AtlantaAustinBostonCharlestonCharlotteChicagoClevelandColumbusDallasDenverDetroitFairfield CountyFort LauderdaleHoustonIndianapolisLas VegasLong IslandLos AngelesMiamiMinneapolisNew JerseyNew YorkOaklandOrange CountyOrlandoPhiladelphiaPittsburghRaleigh-DurhamRenoSacramentoSan Diego CountySan FranciscoSan MateoTampaWashington, DCWest Palm BeachAY U.S. <strong>Market</strong>sSuburban Class A Average Asking Rent ($psf net)Suburban Class A Average Asking Rent ($psf net)* Rental rates are shown in U.S. $ * Rental rates are shown in U.S. $Suburban Class A Average Additional Rent ($psf)Suburban Class A Average Additional Rent ($psf)AY U.S. <strong>Market</strong>s6Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


<strong>Canada</strong> & U.S. <strong>Office</strong> <strong>Market</strong> Highlights8<strong>Canada</strong><strong>Office</strong> Area Under Construction6Million sf420Downtown Downtown <strong>Office</strong> <strong>Office</strong> Area Area Under Under Construction (sf)Suburban <strong>Office</strong> <strong>Office</strong> Area Area Under Under Construction Construction (sf) (sf)12U.S. U.S.<strong>Office</strong> Area Under Construction108Million sf6420AtlantaAustinBostonCharlestonCharlotteChicagoClevelandColumbusDallasDenverDetroitFairfield CountyFort LauderdaleHoustonIndianapolisLas VegasLong IslandLos AngelesMiamiMinneapolisNew JerseyNew YorkOaklandOrange CountyOrlandoPittsburghPhiladelphiaRaleigh-DurhamRenoSacramentoSan Diego CountySan FranciscoSan MateoTampaWashington, DCDowntown <strong>Office</strong> Area Under Construction (sf)Downtown <strong>Office</strong> Area Under Construction (sf)Suburban <strong>Office</strong> Area Under Construction (sf)Suburban <strong>Office</strong> Area Under Construction (sf)Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 7


<strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> Highlights<strong>Canada</strong>, U.S. && U.K. - <strong>Office</strong> - Area Under ConstructionHoustonLondon, UKDallasWashington, DCCalgaryBostonTorontoSan FranciscoChicagoAustinMinneapolisDenverNew YorkLos AngelesMontrealVancouverPittsburghEdmontonPhiladelphiaCharlotteNew JerseyToronto West/MississaugaSan MateoRaleigh-DurhamFort LauderdaleMiamiOrange CountyDetroitClevelandSan Diego CountyTampaHalifaxAtlantaOttawaIndianapolisCharlestonOrlandoReginaGuelph (SW Ontario)Quebec CityColumbusOaklandLas VegasWest Palm BeachSacramentoRenoLong IslandFairfield CountyWinnipegLethbridge0 3 6 9 12Million sf<strong>Canada</strong>, U.S. U.S. & U.K. & U.K. - <strong>Office</strong> - <strong>Office</strong> Area Area Preleased PreleasedClevelandDetroitNew JerseyOttawaTampaMinneapolisPittsburghIndianapolisFort LauderdaleChicagoPhiladelphiaEdmontonSan FranciscoDallasBostonWashington, DCReginaCharlotteTorontoHoustonHalifaxColumbusSan MateoLondon, UKCalgaryGuelph (SW Ontario)MiamiMontrealDenverQuebec CityLos AngelesOrlandoNew YorkOrange CountyAustinVancouverToronto West/MississaugaRaleigh-DurhamSan Diego CountyCharlestonOaklandLas VegasAtlantaWest Palm BeachSacramentoRenoLong IslandFairfield CountyWinnipegLethbridge0% 20% 40% 60% 80% 100%8Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Calgary <strong>Office</strong> <strong>Market</strong>Calgary’s office market has changed significantly fromone year ago. During the 12-month period that endedat mid-year 2015, the vacancy rate rose to 11.5% from 8.3%due to a substantial increase in vacant sublease space onthe market. As a result of a steep decline in oil prices sincethe fourth quarter of 2014, large energy companies haveemployed several defensive strategies to reduce expenses.These actions include cancelling or deferring capitalexpenditures, laying off staff and placing unused space onthe sublease market. Sublease space, as a percentage ofDowntown vacancy, rose nine percentage points year-overyearto 40%.The second quarter of 2015 marked the third consecutivequarter of overall negative absorption. Annualized fromJune 30, 2014, overall absorption in Calgary was negative1.8 msf with Downtown alone registering 1.5 msf ofnegative absorption. Downtown recorded negativeabsorption of 538,000 sf in the first half of 2015 comparedwith positive absorption of 419,000 sf in the same period in2014. Many prospective tenants are staying on the sidelinesas long as possible as rental rates move in their favour.The current environment is conducive to merger andacquisition activity, which has been picking up in theenergy industry as several players face financial difficulties.In addition to an anticipated increase in available subleasespace resulting from mergers, Calgary’s office developmentmarket has approximately 6.2 msf of new projects currentlyunder construction with deliveries through 2018. Thislarge amount of new product could prove problematic ifthe price of oil remains at current levels for an extendedperiod of time. Five developments were delivered duringthe first half of 2015 with significant vacancy and serve asan indication of the potential market impact if depressedoil pricing persists. Five additional developments areanticipated by year-end 2015 - three of those projects arespeculative suburban developments. Cadillac Fairview’sCalgary City Centre is set to come to market Downtownin the fourth quarter. The project is expected to come tomarket with 19% vacancy.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Telus Tower Trans<strong>Canada</strong> Corp. 155,000 Renewal2 Ernst & <strong>Young</strong> Tower Black Diamond Ltd. 68,000 New3 840 Seventh Hatch Ltd. 62,000 Renewal4 Roslyn Building Ensign Energy Services 55,000 Renewal5 Gulf <strong>Canada</strong> Square Baker Hughes 47,000 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,000 3,0004,000 5,0003,500 4,5005,0003,000 4,0004,5002,500 3,5004,0002,000 3,0003,5001,500 2,5003,0001,000 2,0002,5001,5002,0001,000 01,5005001,0000500$ psf$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20$20 $10$0$10 $0Calgary <strong>Office</strong> Absorption & Vacancy RatesCalgary <strong>Office</strong> Absorption & Vacancy RatesCalgary <strong>Office</strong> Space Under Construction & CompletionsCalgary Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201512.0%14.0%1,500 2,50010.0%3,00012.0% 14.0%1,000 2,0002,5008.0%1,50010.0% 12.0%2,0006.0%1,000 01,5008.0% 10.0%-5004.0%1,0006.0% 8.0%-1,00005002.0%-1,500 -5004.0% 6.0%0-2,000 -1,0000.0%-500Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%-1,500-1,000 Downtown Absorption (12 months)Suburban Absorption (12 months)-2,000 Downtown VacancySuburban Vacancy0.0% 2.0%-1,500Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-2,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Calgary Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)5,000 Downtown VacancySuburban Vacancy$ psf$ psf3,0002,5004,500$600Calgary <strong>Office</strong> Absorption & Vacancy RatesCalgary <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionCalgary Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionCalgary Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent14.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 9


Edmonton <strong>Office</strong> <strong>Market</strong>Construction is well underway at Ice District, which housestwo of the three major downtown office developments.The 600,000-sf Edmonton Tower is halfway through itsconstruction schedule and 80% preleased. The new StantecTower, located at the corner of 103rd Avenue and 102ndStreet adjacent to Rogers Place, has started to take shape,and the Kelly Ramsey Tower, situated on Rice Howard Way,is also making excellent progress. In comparison with thesecond quarter of 2014, when most of these projects wereat their initial stages, the downtown Edmonton skyline hasgrown significantly. While industry observers debate howhigh vacancy rates will rise in the next two years, Ice Districtis expected to have an extremely positive impact on themulti-residential and retail markets in the core. The officetowers will also offer choice for tenants who have beenstarved for new modern and efficient premises.Though not to the same degree as Calgary, the Edmontonoffice market is feeling the effects of low oil prices, recordingnegative absorption of 54,298 sf in the second quarter of2015. There have been some high-profile transactions in2015, including Associated Engineering, which is set tooccupy 44,000 sf in the newly refurbished 9Triple8 building;and MNP, which will occupy 72,125 sf at 101st StreetTower this fall. As the market prepares for the forthcomingconsolidations of Enbridge and the City of Edmonton intotheir respective new premises in the first quarter of 2017, thelandlord community, for the most part, has been determinedto maintain rental rates for existing buildings. <strong>Office</strong> vacancyincreased year-over-year to 8.5% at mid-year 2015 from8.1% a year previous. Landlords such as Dream, Morguardand Oxford have increased inducement allowances to enticetenants in order to address the risk their properties face froman increase in vacancy forecasted for 2017.A dramatic drop in oil prices during the past year has had aprofound influence on many markets within Alberta. Witheconomic uncertainty looming, 2016 will represent a pivotalstage in the dynamics of Edmonton’s office market.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Broadmoor Place VI & V Opus Stewart Weir 65,200 Renewal2 Milner Building ATCO 54,600 Renewal3 Centre Point Place Meloche Monnex 44,900 Renewal4 9Triple8 Jasper Associated Engineering 44,000 New5 Edmonton Tower RBC DS 35,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf600500600400600 500300500 400200400 300100300 2000200 1001,600 2,0001,400 1,8002,0001,200 1,6001,8001,000 1,4001,6001,200 8001,4001,000 6001,200400 8001,000200 600800400 06002004000200$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Edmonton <strong>Office</strong> Absorption & Vacancy RatesEdmonton <strong>Office</strong> Absorption & Vacancy RatesEdmonton <strong>Office</strong> Space Under Construction & CompletionsEdmonton Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201512.0%14.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%-1000.0%1000Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-100 0 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-100 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Edmonton Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)2,000 Downtown VacancySuburban Vacancy1,800$45$400Edmonton <strong>Office</strong> Absorption & Vacancy RatesEdmonton <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionEdmonton Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionEdmonton Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent14.0%Vacancy Vacancy Rate Rate Vacancy Rate10Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Situated 45 minutes west of the Greater Toronto Areawith access to three <strong>Canada</strong>-U.S. border crossings, theSouthwestern Ontario market comprises Kitchener, Waterloo,Guelph and Cambridge. <strong>Office</strong> space remains concentratedin Kitchener and Waterloo, which together make up morethan 70% of the market’s 14.1 msf of office inventory. Withcontinued economic uncertainty due to decreased demandin a market driven by the technology sector, vacancy hasremained an issue over the past year. Demand for spaceappears to be increasing as the local economy stabilizes andbusiness confidence improves. Some large tenants haverelocated to more suburban areas as new class A buildingsbecame available for occupancy. As a result, downtownareas continue to struggle, but landlords have become moreaggressive to entice tenants to renew or relocate to the coremarkets.With vacancy rates remaining in the double digits at 11%,a number of landlords are offering significant incentivesto tenants, including improvements, free rent and cashinducements. This trend has had an impact on tenants,as more companies are reviewing all of the alternativesand making the commitment to relocate. While severalcompanies with small- to mid-size leases have relocated,only a limited number of 50,000-sf-plus tenants have electedto do so in the past 12 months.External factors are also having a significant influence onthe Southwestern Ontario office market. Waterloo Region’slight rail transit (LRT) system, currently under construction,and increased rail and bus service to and from the GTA, arespurring construction of a number of office buildings onnewly available commercial lands and along the plannedLRT route. Many of these developments are on a speculativebasis. These additional location options will likely affectthe net effective rental rates that landlords offer in 2015.This situation is expected to continue throughout the restof the year as the market and economy stabilize. Overall,Southwestern Ontario remains a tenant’s market withsignificant opportunities for short-term rental value.Guelph (Southwestern Ontario) <strong>Office</strong> <strong>Market</strong>Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 180 Northfield Drive W., Waterloo Regus 19,200 New2 300 Hagey Boulevard, Waterloo Stantec 17,200 New3 180 Northfield Drive W., Waterloo Sun Life Financial 15,100 New4 72 Victoria Street S., Kitchener Zootly 6,000 Sublease5 409 Weber Street W., Kitchener AECOM 5,200 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf350400250300350200250300150200250100150200100 015050100050$20 $25$25$15 $20$20$10 $15$15$10 $5$10$0 $5$5$0Southwestern Ontario <strong>Office</strong> Absorption & Vacancy Rates15012.0%20014.0%100 Southwestern Ontario <strong>Office</strong> Absorption & Vacancy Rates10.0%200 1505012.0% 14.0%8.0%150 100010.0% 12.0%100 506.0%-508.0% 10.0%5004.0%-1006.0% 8.0%-50 0-1502.0%4.0% 6.0%-100 -50-2000.0%-100 -150 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-150 -200 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Southwestern Downtown Absorption Ontario (12 <strong>Office</strong> months) Space Under Construction Suburban Absorption & Completions(12 months)450 Downtown VacancySuburban Vacancy$ psf$ psf200400 Southwestern Ontario <strong>Office</strong> Space Under Construction & Completions350 450Southwestern Ontario <strong>Office</strong> Space Under Construction & Completions400450 300$250Southwestern Ontario <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSouthwestern Ontario Class A Average Asking Gross RentsSouthwestern Ontario Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionSouthwestern Ontario Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent14.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 11


Halifax <strong>Office</strong> <strong>Market</strong>The arrival of cranes on Halifax’s skyline has resulted in newspace being added to a growing office market inventory,causing vacancy to creep slowly upwards. This trend isexpected to continue through 2015. Although tenants arebeing lured to suburban locations with flexible lease terms,attractive rates and environmentally friendly and innovativespaces, the downtown is increasingly attractive and wheredemand will be focused. As a result, the downtown market isexpected to continue to outperform its suburban rivals.Downtown vacancy decreased 70 bps year-over-yearto 11.8% at the end of the second quarter of 2015. Newdevelopments such as the Nova Centre, which will bring1 msf of mixed-use development – including two officetowers – to the downtown market in September 2016, arelikely to attract the interest of corporate and governmentusers. New construction along Barrington Street willhelp revive older class B and C buildings. ESpace, at 1656Barrington Street, will add 15,000 sf of office/retail spaceto the downtown market. Overall vacancy is expectedto increase slightly in the remainder of 2015 as two newbuildings under construction are delivered. No change innet or additional rental rates is expected in 2015 despite thegrowing inventory.Some developers are looking outside the city centre towardthe suburbs, where they are able to offer attractive incentivessuch as free parking, green space and highway accessto avoid downtown traffic – in conjunction with alreadylower assessments and taxes. For many landlords, highwayaccess serves as a major tenant attraction. With vacancy at7.1% as of mid-year 2015, the suburban markets continueto be resilient despite the new construction downtown.Considerable attention is being paid to the Nova Centre,which will replace the former World Trade and ConventionCentre. Nova Centre is slated for completion in December2015.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf400300400200400 300100300 2000200 100-1001000-200-100 0-300-100 -200-400-200 -300-300 -400-400400350400300400350250350300200300250150250200100150200 50100150 050100050$350$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5$5 $0Halifax <strong>Office</strong> Absorption & Vacancy RatesHalifax <strong>Office</strong> Absorption & Vacancy RatesHalifax <strong>Office</strong> Absorption & Vacancy Rates14.0%12.0%14.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Halifax Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)Downtown VacancySuburban VacancyHalifax <strong>Office</strong> Space Under Construction & CompletionsHalifax <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionHalifax Class A Average Asking Gross RentsHalifax Class A Average Asking Gross RentsHalifax Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 TD Centre Halifax TD Bank 200,000 Renewal/Expansion2 Bay West Centre TD Insurance 85,000 New3 Eon Square Royal Bank of <strong>Canada</strong> 40,000 New4 Purdy's Wharf KPMG 16,300 Renewal5 RBC Waterside Centre Torys LLP 5,500 New12Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Lethbridge <strong>Office</strong> <strong>Market</strong>Vacancy in the Lethbridge office market decreased to16.5% at mid-year 2015 from 18.5% one year earlier. Theaverage downtown class A net asking rental rate increased to$16.25 psf in the second quarter of 2015 from $16 psf in thesecond quarter of 2014, while the average suburban class Anet asking rental rate increased to $17.50 psf from $17 psfyear-over-year. Both downtown and suburban landlordscontinue to offer incentives such as project management,free rent and tenant-improvement allowances to attract newtenants.<strong>Market</strong> trends in 2015 include preleasing, new constructionand repurposing of industrial and retail space for office use.The vacancy rates for both downtown and suburban class Aoffice space remain low. Downtown class A office vacancywas at 11.7% in the second quarter of 2015, down from 13%at the same point in 2014. Suburban class A office vacancywas at 7%, also down from 2014. With more than 30,000 sfof new construction anticipated to commence downtown inearly 2016, and an additional 20,000 sf slated for the suburbs,a significant increase to class A vacancy is expected in 2016and 2017.With the recent announcement of a major tenant relocatingto the United States, Lethbridge will see a significant impacton overall suburban vacancy in 2016. With just under219,000 sf of suburban inventory, the departure couldpotentially drive suburban vacancy to more than 40%.The suburban market recorded 15,800 sf of new inventorydelivered in the 12-month period ending at mid-year 2015,with the majority being preleased. Overall downtownvacancy rates decreased to 16.8% in the second quarter of2015 from 17.9% at the same point in 2014. The downtownmarket registered nearly 5,500 sf of new construction inthe first half of 2015. Going forward, a rise in the downtownand suburban vacancy rates is expected due to more than50,000 sf of new construction on the horizon, the relocationof a major tenant and retail spaces increasingly beingrepurposed as office space.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 4303 8 Avenue N. Farmer's Edge 11,100 New2 608 5 Avenue S. Dental <strong>Office</strong> 10,000 New3 400 4 Avenue S. BDO <strong>Canada</strong> LLP 8,900 New4 200 4 Avenue S. Teamworks 6,400 Renewal5 200 4 Avenue S. Intelligent Health Solutions 4,100 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)$ psf$ psf$ psfSquare Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)00000000000000000003530352535 302030 251525 201020 15515 100105$35500$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5$5 $0Lethbridge <strong>Office</strong> Vacancy RatesLethbridge <strong>Office</strong> Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown VacancySuburban VacancyLethbridge <strong>Office</strong> Space Under Construction & CompletionsLethbridge <strong>Office</strong> Space Under Construction & CompletionsLethbridge Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionLethbridge Class A Average Asking Gross RentsSuburban Asking Net RentLethbridge <strong>Office</strong> Vacancy RatesDowntown VacancySuburban VacancyLethbridge <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%0.0%Suburban Completions (12 months)Suburban Under ConstructionLethbridge Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 13


Montreal <strong>Office</strong> <strong>Market</strong>Vacancy rates in the Greater Montreal Area (GMA) reachednew heights at the end of the second quarter of 2015.Downtown vacancy rates rose to 9.4% from 8.6% a yearearlier. Furthermore, the suburban vacancy rate followedthe same trend, rising to 15.6% compared with 14.6% atthe end of the second quarter of 2014. Projects deliveredin the downtown area during the last year amounted tonearly 129,500 sf, which is relatively small compared withthe amount of space under construction. At the end of thesecond quarter of 2015, there were five buildings underconstruction in downtown Montreal, totalling almost 1.4msf. The Deloitte Tower and La Maison Manuvie are twoprominent projects under construction that will add nearly1 msf in the downtown area. On the other hand, nearly900,000 sf of office space has been delivered in the suburbssince the second quarter of 2014. Developers are also activein the suburbs with nine projects under construction thatwill add nearly 1.3 msf.As a result of the significant amount of new space delivered,the GMA office market experienced negative absorption ofnearly 1.1 msf over the past 12 months with approximately850,000 sf of negative absorption downtown and 250,000 sfof negative absorption in the suburban districts. Despite allof the ongoing construction downtown, class A rental rateshave not been affected. At the end of the second quarter of2015, gross asking rental rates remained stable comparedwith one year earlier with the average sitting at just under$41 psf. However, in the suburban markets, average grossasking rental rates for class A space have reached a five-yearlow, decreasing to $27.10 psf from $28.29 psf a year earlier.As of mid-year 2015, there were 41 new projects announcedin the GMA with almost 9.5 msf preleased. Half of thepreleased space is located in the downtown area. The newconstruction figures and announced development projectsillustrate the real estate transformation that the GMA isgoing through, especially downtown. Delivery of yet-to-beleasednew supply should keep vacancy rates high movingforward and may negatively affect rental rates, as there willlikely be more supply than demand.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 900 de Maisonneuve Boulevard W. Manulife 272,800 New2 800 de Maisonneuve Boulevard E. Hydro-Quebec 66,400 Renewal3 999 de Maisonneuve Boulevard W. Hybris <strong>Canada</strong> 48,300 New4 6300 avenue Du Parc Moment Factory 46,000 New5 4 Place Laval SQI 45,000 ExpansionAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,000 1,5001,5001,000 5001,400 1,8001,6001,800 1,2001,4001,6001,0001,2001,4008001,0001,2006008001,000400$ psf600800200400 06002004000200$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Montreal <strong>Office</strong> Absorption & Vacancy RatesMontreal <strong>Office</strong> Absorption & Vacancy RatesMontreal <strong>Office</strong> Space Under Construction & CompletionsMontreal Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201514.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%1,0008.0% 12.0%14.0%500 06.0% 10.0%12.0%5008.0%-5004.0%010.0%2.0% 6.0%8.0%0-1,000 -5000.0% 4.0%6.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%-500 Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%-1,000 Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-1,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Montreal Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)1,800 Downtown VacancySuburban Vacancy$ psf$ psf1,5001,600$45$400Montreal <strong>Office</strong> Absorption & Vacancy RatesMontreal <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionMontreal Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionMontreal Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent18.0%16.0%Vacancy Vacancy Rate Rate Vacancy Rate14Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Ottawa <strong>Office</strong> <strong>Market</strong>The Ottawa office market has had a rougher ride than whatis considered normal in the nation’s capital. Downtownvacancy increased to 8.8% at mid-year 2015 from 8.5% ayear earlier and 4.8% at mid-year 2013. It is hoped that theslowing increase in vacancy is an indication that the worstis now past. The office market recorded significant negativeabsorption in 2014, but first-half 2015 results have reversedthat trend as positive absorption was recorded. Averageasking net rental rates in the downtown core decreasedmarginally year-over-year to $24.68 psf with several classA landlords providing generous inducement packages toprotect face rental rates. This reaction has certainly providedtenants with additional options.The suburban Kanata market has turned the corner. Vacancywas 9.6% at mid-year 2015, a decline from 11.9% a yearearlier, despite the addition of 230,000 sf to inventory. Askingrental rates have increased as large-pocket vacancies wereabsorbed by another wave of technology companies thathave discovered the rich vein of talent living in the Ottawaarea. As the country gears up for another federal election,the Ottawa office market is likely to adopt a wait-and-seeattitude when it comes to any major expansion plans – atleast by those companies that derive the majority of theirincome from providing goods and services to government.Locally based businesses continue to feel the pinch inthis era of austerity, but showed an ability to cope asemployment increased marginally in the second quarterof 2015 compared with the same period in 2014. However,there was a slight increase in the unemployment rate in thesecond quarter of 2015 as more individuals actively joinedthe workforce looking for employment opportunities.Work continues unabated on the first phase of Ottawa’s$2.1-billion LRT system. While traffic patterns have beendisrupted for many residents, the result will mean greateraccess to Ottawa’s downtown core as well as employmentnodes outside downtown. The impact of this project cannotbe understated as hotel and retail developments in the core(and in proximity to future transit nodes) continue to appearon the Ottawa skyline.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf600400600600 2004004000200-2000-4000-200-200 -600-400-400-600-6001,2001,0001,2001,200 8001,0001,00060080080040060060020040040002002000$600$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20$20 $10$0$10 $0Ottawa <strong>Office</strong> Absorption & Vacancy RatesOttawa <strong>Office</strong> Absorption & Vacancy RatesOttawa <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (YoY)Suburban Absorption (YoY)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (YoY)Suburban Absorption (YoY)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Absorption (YoY)Suburban Absorption (YoY)Downtown VacancySuburban VacancyOttawa <strong>Office</strong> Space Under Construction & CompletionsOttawa <strong>Office</strong> Space Under Construction & CompletionsOttawa <strong>Office</strong> Space Under Construction & CompletionsOttawa Class A Average Asking Gross RentsOttawa Class A Average Asking Gross Rents12.0%10.0%12.0%8.0% 12.0%10.0%6.0% 10.0%8.0%4.0% 8.0%6.0%2.0% 6.0%4.0%0.0% 4.0%2.0%2.0%0.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (YoY)Suburban Completions (YoY)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (YoY)Suburban Completions (YoY)Q2 Downtown 2011 Under Q2 Construction2012 Q2 2013 Suburban Q2 2014 Under Construction Q2 2015Downtown Completions (YoY)Downtown Under ConstructionSuburban Completions (YoY)Suburban Under ConstructionOttawa Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 528 March Road Sanmina - SCI 115,000 New2 450 March Road Solar Winds 49,000 Renewal3 390 March Road Qlik 45,000 New4 500 Palladium Drive DNA Genotek 36,000 New5 150 Elgin Street Shopify 33,000 NewMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 15


Quebec City <strong>Office</strong> <strong>Market</strong>Quebec City’s downtown vacancy rate has decreasedfor a third consecutive year, concluding the secondquarter of 2015 at 6.5% compared with 6.9% at mid-year2014. However, suburban vacancy did not follow thesame trend and increased 190 bps year-over-year. Severalnew projects were announced in Quebec City during thepast 12 months. The most notable was Phare de Québec,which could completely alter the city’s image. The towerwould include 65 floors and be the tallest skyscraper in<strong>Canada</strong> east of Toronto. The mixed-use project would offerapproximately 2 msf and require a $600-million investment;however, there has been considerable criticism of the sizeand complexity of the project.At the end of the second quarter of 2015, six suburbanprojects totalling 950,000 sf were in the preleasing phase.The SSQ building, located on Laurier Boulevard in theSte-Foy district, accounts for 500,000 sf of the preleasingactivity. There is also a large amount of space available forpreleasing in the Lebourgneuf District with four projectsthat total 365,000 sf. For the third consecutive year, therewas no inventory under construction in the downtownarea. For the suburban markets, the tendency is the same.Only 133,800 sf of inventory was under construction atmid-year 2015 compared with the five-year average ofalmost 500,000 sf.Asking rental rates have remained stable since the secondquarter of 2014. Gross rates remained steady in downtownand suburban class A buildings, averaging $27.95 psf and$26.87 psf, respectively. Quebec City registered negativeabsorption of 99,000 sf in the 12-month period ending atmid-year 2015. This situation was in contrast to the 724,000sf of positive absorption recorded in the previous 12-monthperiod. Both leasing and development are anticipated torise in the next few years with nearly 60 mixed-use projectsannounced and $1.5 billion invested. Quebec City’s officemarket could see an increase in vacancy as a result of newconstruction.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 950 de la Concorde Street Desjardins 20,000 Renewal2 5700 Des Galeries Boulevard Pratte Morrissette 10,800 New3 825 Lebourgneuf Boulevard CGSI@Solutions TI 5,100 Renewal4 1000-1020 Rte de L'Eglise Medicago 3,300 Expansion5 700 Charest Boulevard East Sigmund 2,200 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf700600500 7001,0001,2001,200 8001,0001,00060080080040060060020040040002002000$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Quebec City <strong>Office</strong> Absorption & Vacancy RatesQuebec City <strong>Office</strong> Absorption & Vacancy RatesQuebec City <strong>Office</strong> Space Under Construction & CompletionsQuebec City Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 20158.0% 10.0%700 400 6007.0% 9.0%10.0%600 300 5006.0% 8.0%9.0%5.0% 7.0%500 200 4008.0%4.0% 6.0%3007.0%400 1003.0% 5.0%2006.0%30002.0% 4.0%5.0%-100 2001.0% 3.0%4.0%-200 10000.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20153.0%-10001.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 2.0%-200 Downtown VacancySuburban Vacancy-100Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%1.0%-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Quebec Downtown City Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)1,200 Downtown VacancySuburban Vacancy$300Quebec City <strong>Office</strong> Absorption & Vacancy RatesQuebec City <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionQuebec City Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionQuebec City Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent10.0%9.0%Vacancy Vacancy Rate Rate Vacancy Rate16Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Regina <strong>Office</strong> <strong>Market</strong>Regina’s office market has been shifting since 2013. Thistrend was sustained into 2015 and has resulted in arebalancing of the market, which has subsequently impactedowners and occupiers of office space. After years of beinga landlord’s market, that trend has come to an end as themarket is now considered balanced – and is very competitive.The provincial economy has remained stable despite loweroil prices - a trend that should have a positive impact on thecity’s office market. A rising population should be viewed aspositive, and supportive of businesses that want to relocatetheir head offices to Regina.Downtown and suburban nodes continued to grow in the firsthalf of 2015. The City of Regina conducted its annual review ofits office development policy in June 2015. No major changeswere adopted by council, and it maintained its position thatthe downtown/central city office area should contain at least80% of the city’s medium and major office development, andthat no new office buildings within the downtown/central cityoffice area shall be approved where the downtown vacancyrate is equal to, or less than, 6.5% of total known availabledowntown office floor area. The policy will continue to bereviewed annually due to its perceived restrictive impact oncurrent and future office development. Meanwhile, HarbourLanding Business Park in Regina’s south end has three officebuildings completed and a fourth ready to begin construction.Regina’s newest 10-storey office tower, Agriculture Place in thedowntown core, is under construction and will add 160,000 sfof office/retail space and underground parking to the marketwhen completed.Despite a slight increase in downtown inventory, the vacancyrate at mid-year 2015 remained unchanged at 10.6% fromthe same time in 2014. Absorption in the suburbs recordedan uptick due to ongoing demand. Average asking rentalrates for downtown and suburban space in all asset classeswere virtually unchanged year-over-year at the end of thesecond quarter of 2015. Class A net rates were at $25 psf, classB-plus at $19.50 psf and class B at $16.50 psf. Net effectiverates versus face rates have changed, as landlords are offeringinducements where none were needed or offered previously.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Hill Tower 1 Ministry Of Central Services 77,000 Renewal2 Saskatchewan Place Ministry Of Central Services 31,700 Renewal3 Hill Tower 1 MLT 31,000 Renewal/Expansion4 1960 Albert Street Conexus Credit Union 13,500 Sublease5 Saskatchewan Place Ministry Of Central Services 7,400 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf150100 150150100 50350 450400450 300350400250300350200250300150200250100150200100 015050100050$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Regina <strong>Office</strong> Absorption & Vacancy RatesRegina <strong>Office</strong> Absorption & Vacancy RatesRegina <strong>Office</strong> Space Under Construction & CompletionsRegina Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201514.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%1008.0% 12.0%14.0%50 06.0% 10.0%12.0%508.0%-504.0%010.0%2.0% 6.0%8.0%0-100 -500.0% 4.0%6.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%-50 Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%-100 Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-100 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Regina Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions (12 months)450 Downtown VacancySuburban Vacancy400$45$400Regina <strong>Office</strong> Absorption & Vacancy RatesRegina <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionRegina Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionRegina Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent18.0%16.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 17


Toronto <strong>Office</strong> <strong>Market</strong>Against a backdrop of disappointing Canadian economic data, theGreater Toronto Area (GTA) office market reached the midwaypoint of 2015 with positive results as the suburbs outperformedthe downtown and midtown markets. Positive absorption duringthe second quarter was attributed to steady deal flow, withmore than 4 msf transacted in the first half and tenants graduallytaking occupancy in new developments. A steady influx of newsupply pushed overall vacancy to 9.9%, up 70 bps year-over-year.Development remains active, with more than 3.5 msf of officespace completed in the past year, evenly distributed between thedowntown and suburban markets. Almost half of those deliveriescame online in the first half of 2015, mostly in suburban TorontoWest. Another 5.7 msf (57% preleased) is under construction – withtwo-thirds in Downtown Toronto – owing to urban intensification.Attracted by a growing millennial workforce and on the heels ofAmazon and Apple’s entry, U.S.-based tenants continue to showconsiderable interest in expanding or establishing a foothold,particularly downtown.The downtown market remains resilient, despite large blocks ofspace being returned as tenants relocate to recently completedtowers. Widespread positive absorption resulted from strongoccupancy gains in Downtown South as Marsh <strong>Canada</strong> and RBCtook occupancy in downtown’s newest high-performance buildings– Bremner Tower and RBC WaterPark Place, respectively. There is alsoa growing trend toward brick-and-beam redevelopment and mixedusedevelopments incorporating retail, office and residential, suchas Allied Properties and RioCan REIT’s King Portland Centre in trendyDowntown West and Concert Properties’ 20 Wellington Street East inToronto’s Financial Core. Downtown vacancy finished higher at 6.8%.Suburban vacancy improved to 13% year-over-year, despite 1.7 msfof new deliveries and another 2 msf underway. Target <strong>Canada</strong>’s quickexit and the successful lease-up of its former headquarters (185,000sf) in the Airport Corporate Centre, by PointClickCare, attest to themarket’s ability to absorb large blocks of space. Tenants reaffirmingtheir commitment to the suburbs included Aviva, KPMG, Huawei,Acklands-Grainger, McKesson, Maple Leaf Foods and TD Bank. Inthe wake of new development, tenant retention will be paramountamong landlords, while tenants enjoy multiple price options.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 310-320 Front Street W. TD Bank 231,000 New2 AeroCentre V PointClickCare 185,000 New3 16 & 19 Allstate Parkway Huawei Technologies 126,000 Renewal/Expansion4 351 King Street E. Yellow Pages 110,400 New5 6985 Financial Drive Maple Leaf Foods 105,000 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,500 2,0002,0001,000 1,5001,5001,000 5005,0006,0006,000 4,0005,0005,0003,0004,0004,0002,0003,0003,0001,0002,0002,00001,0001,0000$ psf$40 $50$35 $45$50$30 $40$45$25 $35$40$20 $30$35$15 $25$30$10 $20$25$15 $5$20$10 $0$15$5$10$0$5Toronto <strong>Office</strong> Absorption & Vacancy RatesToronto <strong>Office</strong> Absorption & Vacancy RatesToronto <strong>Office</strong> Space Under Construction & CompletionsToronto Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0%12.0%14.0% 16.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%1,0008.0% 10.0%4.0%500 06.0% 8.0%2.0%500-50004.0% 6.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%0 Downtown Absorption (12 months)Suburban Absorption (12 months)-500 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-500 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Toronto Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)6,000 Downtown VacancySuburban Vacancy$ psf$ psf2,000$50$450Toronto <strong>Office</strong> Absorption & Vacancy RatesToronto <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionToronto Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionToronto Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent16.0%14.0%Vacancy Vacancy Rate Rate Vacancy Rate18Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


The first half of 2015 was eventful in the Toronto Westoffice market. Kicking off the year, Target <strong>Canada</strong>vacated 185,000 sf of class A space at 5550 Explorer Drivein the Airport Corporate Centre (ACC), leaving many inthe area to ponder how this gaping vacancy would affecta historically coveted and attractive market. The answercame just a few short months later as PointClickCareleased the balance of Target’s former space. Volatility inleasing activity characterizes the last two years at the ACCand its surrounding nodes. Examples of significant gainsand losses during that time period include: Bayer’s leaseof 125,000 sf at 2920 Matheson Boulevard; Blackberryvacating 102,000 sf at 4701 and 4715 Tahoe Boulevard;Sobeys taking occupancy of its new campus at 4980 TahoeBoulevard, totalling 220,000 sf; Target’s departure andnow PointClickCare’s take-up.As is to be expected in a turbulent leasing climate,vacancy rates have continued to edge up, reaching 15% atmid-year 2015. However, absorption is at its highest levelin five years, suggesting that a fair portion of that vacantspace may in fact be spoken for in the form of completeddeals whose terms have yet to commence, such asPointClickCare. Bear this point in mind when taking anextended view at what is to come in the second half of2015 for Toronto West.Noteworthy is the recent trend towards flex space inOakville: all five of the 2015 deliveries in this market havebeen single-storey buildings with an average floorplateof about 44,000 sf. Heading into the remainder of 2015,these new flex developments will compete against thetraditional multi-storey buildings also under developmentin the area. With a number of large-block deals nearingcompletion, it is likely that recent momentum generatedin key nodes will spur further leasing velocity in TorontoWest through 2015.Toronto West / Mississauga <strong>Office</strong> <strong>Market</strong>Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf600500400 600600 300 500500 200 400400 100 300300200 0-100 200-200 1000-300 -1000-200-100-300-200-3001,6001,4001,6001,2001,6001,4001,0001,4001,2008001,2001,0006001,000800400600800 200400600 02004000200$350$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5Toronto West <strong>Office</strong> Absorption & Vacancy RatesToronto West <strong>Office</strong> Absorption & Vacancy RatesToronto West <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyToronto West <strong>Office</strong> Space Under Construction & CompletionsSuburban VacancyToronto West <strong>Office</strong> Space Under Construction & CompletionsToronto West <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Toronto West Class A Average Asking Gross Rents16.0%12.0%14.0% 16.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%2.0% 4.0%0.0% 2.0%Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Toronto Suburban West Completions Class (12 A months) Average Asking Suburban Gross Under Rents ConstructionToronto West Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201516.0%14.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate$5 $0Suburban Asking Net RentSuburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015$0Suburban Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Suburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Address / Complex Tenant Size Suburban (sf) Asking Net RentDeal TypeSuburban Additional Rent1 AeroCentre V PointClickCare 185,000 New2 6985 Financial Drive Maple Leaf Foods 105,000 Renewal3 6355 Viscount Road McKesson 76,000 New4 55 Standish Court AGF 55,000 New5 Spectrum Square I Investment Planning Counsel 54,000 NewMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 19


Vancouver <strong>Office</strong> <strong>Market</strong>Metro Vancouver office vacancy hit an 11-year high atmid-year 2015 – powered by almost 1.5 msf of newinventory delivered in the past 12 months and strongleasing activity that resulted in more than 1 msf of positiveabsorption for the region as a whole since mid-year 2014.Despite previously recording two consecutive years offirst-half negative absorption for the first time in at least 17years, Metro Vancouver registered positive absorption ofnearly 879,000 sf in the first six months of 2015. The midyear2015 regional vacancy rate of 10.4% was primarily theresult of significant new office supply delivered Downtownthat is actually preleased, but yet to be occupied by tenantsand therefore considered vacant. Downtown vacancyrose to 9.8% (the highest Downtown vacancy registeredsince 2004) from 6.4% at mid-year 2014. Vacancy in two ofthe three submarkets that constitute Vancouver proper –Downtown and Yaletown – rose compared with 12 monthsearlier, while vacancy in the Broadway submarket plungedby almost half to 3.6% from 7% a year ago. Overall suburbanvacancy tightened to 10.9% from 12.6% at mid-year 2014.The delivery of almost 2.5 msf of new office space in boththe Downtown and suburban markets in the past two yearsproduced a regional market in flux as it recalibrates to a morebalanced state after a decade of low vacancy.With more than 538,000 sf of positive absorption Downtownand approximately 488,000 sf in the suburban marketsfrom July 1, 2014 to June 30, 2015, regional vacancyrose just 50 bps year-over-year despite the delivery of asignificant volume of new product and a middling economicperformance. Sublease vacancy in Metro Vancouver (9.4%)remained unchanged year-over-year and is at its lowestpoint since mid-year 2012. The historical correlation betweendeclining vacancy and positive absorption has beendisrupted, as forecasted last year, and marks the first phaseof the ‘new normal’ in Metro Vancouver’s office market.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf600400600600 2004004000200-2000-4000-2001,600 2,0001,400 1,8002,0001,200 1,6001,8001,000 1,4001,6001,200 8001,4001,000 6001,200400 8001,000200 600800400 06002004000200$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20Vancouver <strong>Office</strong> Absorption & Vacancy RatesVancouver <strong>Office</strong> Absorption & Vacancy RatesVancouver <strong>Office</strong> Space Under Construction & CompletionsVancouver Class A Average Asking Gross Rents12.0%14.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%-200 -6000.0%-400Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-400-600 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-600 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Vancouver Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)2,000 Downtown VacancySuburban Vacancy1,800$600Vancouver <strong>Office</strong> Absorption & Vacancy RatesVancouver <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionVancouver Class A Average Asking Gross RentsVancouver Class A Average Asking Gross Rents14.0%Vacancy Vacancy Rate Rate Vacancy Rate$20 $10$0$10 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Bentall V Teck 145,000 Renewal2 4250 <strong>Canada</strong> Way Pacific Blue Cross 119,300 Renewal3 380 W. 5th AvenueDHX Media Ltd. dbaNerd Corps Entertainment Inc.Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentDowntown Additional RentSuburban Additional Rent75,000 New4 980 Howe Street ACL Services Ltd. 66,000 New5 840 Cambie Street Animal Logic 47,000 New20Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Winnipeg <strong>Office</strong> <strong>Market</strong>Winnipeg’s office market continues its slow and steadygrowth. Most transactions have been the result ofexpansions, relocations or space consolidation as leaserenewals remain the most cost-effective option for tenantswho wish to maintain their real estate footprint. Unlike someother Canadian markets, Winnipeg has not experienced adownturn in lease rates for the last 10 or more years. Whilethis situation may seem rather uneventful, the stability keepsinvestors happy, and tenants do not generally face hugeswings either way upon lease renewal.While construction costs still impede many transactions thatrequire significant new build-outs, tenants and designers arebecoming very creative in utilizing existing infrastructure atmany great locations. There are sizeable blocks with existingimprovements available at 200 Graham Avenue, 423 MainStreet (the former CWB Building) and 491 Portage Avenue.Mid-size pockets are scattered throughout downtown; arecent mandate for a 5,000-sf location in class B buildingsresulted in two dozen options. Celebrating its official ribboncutting, Centre Point at 311 Portage Avenue had two majoroffice tenants – Stantec and iQmetrix – occupy the majorityof the 80,000-sf building. A local construction/developmentcompany – FWS – absorbed 25,000 sf at Terracon’s TuxedoBusiness Park. The Workers Compensation Board of Manitobaoutgrew its building and spilled over to the neighbouringproperty at 363 Broadway Avenue with a 26,000-sf lease.Exciting redevelopment news was announced in June 2015by True North Sports and Entertainment and CentreVentureDevelopment Corp. True North Square, a $400-million mixedusedevelopment right in the heart of downtown, next to thenewly expanded RBC Convention Centre, is moving forward.Overall, business confidence continues to power positivesentiment in downtown Winnipeg.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 330 Portage AvenueWinnipeg Regional HealthAuthority27,000 New2 330 St. Mary Avenue Hatch 24,000 New3 One Lombard AON 21,000 Renewal4 280 Broadway Province of Manitoba 16,000 New5 393 Portage Avenue Investors Group 10,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)$ psf$ psf$ psfSquare Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)402040 070 908090 6070805060704050603040502030401020 0301020010$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5Winnipeg <strong>Office</strong> Absorption & Vacancy RatesWinnipeg <strong>Office</strong> Absorption & Vacancy RatesWinnipeg <strong>Office</strong> Space Under Construction & CompletionsWinnipeg Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 20158.0% 10.0%-20 407.0% 9.0%10.0%-40 2006.0% 8.0%9.0%5.0% 7.0%-60 -2008.0%4.0% 6.0%-407.0%-20 -803.0% 5.0%-606.0%-100 -402.0% 4.0%5.0%-120 -60-801.0% 3.0%4.0%-140 -100-800.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20153.0%-120-1001.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 2.0%-140 Downtown VacancySuburban Vacancy-120Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%1.0%-140 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Winnipeg Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)90 Downtown VacancySuburban Vacancy80$400Winnipeg <strong>Office</strong> Absorption & Vacancy RatesWinnipeg <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionWinnipeg Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionWinnipeg Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional RentMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 2110.0%9.0%Vacancy Vacancy Rate Rate Vacancy Rate


Atlanta <strong>Office</strong> <strong>Market</strong>Atlanta, the 10th-largest economy in the U.S., comprises147 msf of office space. The region made significant gainsin the last year thanks to successful corporate recruitingefforts and an improving job market. According to the U.S.Bureau of Labor Statistics, Atlanta experienced annual jobgrowth of 3.1% for the 12 months ending June 2015, andhas been a top performer among all large U.S. metros inthe past year. <strong>Office</strong> vacancy ended the second quarter of2015 at 17.1%, down 160 bps year-over-year. The market haswitnessed 15 quarters of net positive absorption, with nearly2.7 msf absorbed in the last 12 months. Class A vacancyhas grown particularly tight, falling by 300 bps year-overyearto end the second quarter of 2015 at 13.2%. Landlordsat last have leverage to increase rental rates and rein inconcessions. Class A asking rates ended the second quarterat $24.29 psf, up 7.5% year-over-year, and class B rates roseby 3.1% to $17.18 psf in the same period.The Buckhead submarket has witnessed one of Atlanta’smost impressive turnarounds. Vacancy ended the secondquarter at 10.7%, down by 430 bps year-over-year anddown from a cyclical high of 25.3%. In Midtown, vacancyfell to 15.1%, down 230 bps year-over-year. These urbansubmarkets are witnessing strong demand from technologycompanies in particular, and they saw the market’s mostpronounced rental-rate increases in the last year. Class Aasking rental rates in Buckhead rose by 12.5% to $29.79 psf -the highest in the market - and class A rates in Midtown roseby 5.7% to $27.55 psf.The market should continue to shift in favor of landlordsfor the next 18 to 24 months. Economists are projectingthat Atlanta will add up to 100,000 new jobs in 2015. Whileseveral projects are planned, just one speculative buildingwas underway at mid-year 2015 and construction remains athistorically low levels. Little new product will hit the marketbefore 2017, leaving ample room for rent growth. Tenantswill need to act decisively and should be prepared forincreased occupancy costs. Rising class A rental rates shouldfuel a more meaningful recovery in the class B market.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,5002,0001,0002,000 1,5005001,500 1,00001,000 500-5005000-1,000-500 0-1,500-1,000 -500-1,000 -1,500-1,500$ psf1,600 2,0001,400 1,8002,0001,200 1,6001,8001,000 1,4001,6001,200 8001,4001,000 6001,200400 8001,000200 600800400 06002004000200$ psf$ psf2,0002,0001,800$300$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Atlanta <strong>Office</strong> Absorption & Vacancy RatesAtlanta <strong>Office</strong> Absorption & Vacancy RatesAtlanta <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Atlanta Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)Downtown VacancySuburban VacancyAtlanta <strong>Office</strong> Space Under Construction & CompletionsAtlanta <strong>Office</strong> Space Under Construction & CompletionsAtlanta Class A Average Asking Gross RentsAtlanta Class A Average Asking Gross Rents25.0%20.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionAtlanta Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 SunTrust Park Comcast 300,000 New2 Three Ravinia Drive InterContinental Hotels Group 277,900 Renewal3 Pershing Point Plaza Kaiser Permanente 157,000 New4 Sterling Point II Mercedes-Benz 89,300 New5 Atlantic Station Sage Software 78,800 New22Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Austin <strong>Office</strong> <strong>Market</strong>In the past year, Austin’s office market continued to tightenacross all submarkets. The demand for space remainshighest downtown, where the vacancy rate dropped to 7.3%in the second quarter of 2015, down from 10% one yearbefore. Much of this demand stems from the rapid growthof the local technology industry, with major firms willing topay rental rates averaging $50.03 psf full-service in order tolocate in class A space downtown. With such high rental ratesand little availability, many firms are forced to look for officespace in submarkets other than Austin’s CBD. In suburbanmarkets, vacancy fell to 11.8% in the second quarter of 2015from 12.1% a year earlier. Suburban class A asking rentalrates also rose during the last year, although less drastically,to an average of $32.09 psf.As demand for office space continued to surge during thepast 12 months, absorption figures continued their positivetrend. From the third quarter of 2014 through the secondquarter of 2015, downtown absorption reached 552,000sf, an increase of more than 300,000 sf over the previous12-month period. With much more office product to offercompared with downtown, Austin’s suburban marketsalso saw increased absorption over the past year. In the 12months from July 2014 through the second quarter of 2015,suburban submarkets recorded 927,000 sf of absorption – upfrom 795,000 sf in the 12 months prior.Austin’s office market continued to attract investors anddevelopers over the past year as well. More than 700,000 sf ofnew office product was delivered in Austin’s CBD, includingthe highly anticipated Colorado Tower and Seaholmdevelopments. The suburban market surpassed Austin’sdowntown in terms of new deliveries as nearly 1.2 msf ofnew product came online in the last year. Development hasyet to slow down with approximately 800,000 sf and 2.4msf of office space currently under construction in Austin’sdowntown and suburban submarkets, respectively.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,200 1,6001,600 1,000 1,4001,400 1,200 8001,2001,000 6001,000 400 800$ psf$ psf$ psf1,6001,400800 200 600600400 0-200 4000200-2000-2003,0002,5003,0003,000 2,0002,5002,5001,5002,0002,0001,0001,5001,5005001,0001,00005005000$600$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20Austin <strong>Office</strong> Absorption & Vacancy RatesAustin <strong>Office</strong> Absorption & Vacancy RatesAustin <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Austin Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions (12 months)Downtown VacancySuburban VacancyAustin <strong>Office</strong> Space Under Construction & CompletionsAustin <strong>Office</strong> Space Under Construction & CompletionsAustin Class A Average Asking Gross RentsAustin Class A Average Asking Gross Rents20.0%18.0%16.0% 20.0%14.0% 18.0%20.0%12.0% 16.0%18.0%10.0% 14.0%16.0%8.0% 12.0%14.0%6.0% 10.0%12.0%4.0% 8.0%10.0%2.0% 6.0%8.0%0.0% 4.0%6.0%2.0%4.0%0.0%2.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionAustin Class A Average Asking Gross RentsVacancy Vacancy Rate Rate Vacancy Rate$20 $10$0$10 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 Capital Ridge Apple 217,500 New2 500 W 2nd Google 207,900 New3 The Summit at Lantana Bldg 3 Solar Winds 117,900 New4 Champion <strong>Office</strong> Park 1 Indeed, Inc. 115,000 New5 Champion <strong>Office</strong> Park 2 Indeed, Inc. 115,000 NewMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 23


Boston <strong>Office</strong> <strong>Market</strong>Boston is currently in the midst of its largest constructionboom since 2003. Despite delays in the pipeline duringthe first quarter, marked by Boston’s all-time record snowfall,more than 2.1 msf of office construction is underway inDowntown Boston – of which 59% is preleased. This officeconstruction boom, in conjunction with an even largerresidential surge (8,000 apartment units under construction),further enhances the city’s live/work/play lifestyle and thecapacity needed to ensure a healthy market. The officeconstruction surge is in reaction to downtown vacancy ratesdropping for the past five quarters to 8.3% and absorptionexceeding 1 msf in each of the past three years. Thefundamentals in Boston remain exceptionally healthy andcontinued upward pressure on rental rates is anticipated.With suburban vacancy rates still above 13%, developersare hesitant to be as active with approximately 3.2 msfcurrently under construction, 69% of which is preleased.The immediate suburbs are responsible for most of the newproduct. Along the 128 Belt, class A vacancy rates have fallenbelow 5%, and speculative construction has become a viableoption as more companies leave downtown, seeking rentrelief while maintaining an urban-like lifestyle. Such majortenants as Forum Pharmaceuticals, TripAdvisor and ClarksShoes demonstrate this activity.The overall market’s future looks bright with some of thehottest submarkets in the country continuing to churn.The Seaport district is still on the rise with class A officevacancy now below 3% and rents exceeding $56 psf, whileCambridge continues to be a hub for the country’s mostinnovative technology and life-science firms. Companiessuch as Alnylam, Genzyme and Bristol-Myers Squibb haveall signed leases totaling more than 750,000 sf this year inCambridge, solidifying the area’s long-term position as thepreferred location for the life-science industry. New tenants,landlords and developers look to Boston as an enticingoption.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,0002,5001,5002,500 2,0001,0002,000 1,5005001,500 1,00001,000 500-5005000-1,000-500 0-1,000 -500-1,000$ psf3,0003,5002,5003,500 3,0002,0003,000 2,5001,5002,500 2,0001,0002,000 1,5005001,500 1,00001,000 500$ psf$ psf2,5003,5005000$700$60$70$50$70 $60$40$60 $50$30$50 $40$20$40 $30$10$30 $20$0$20 $10$10 $0Boston <strong>Office</strong> Absorption & Vacancy RatesBoston <strong>Office</strong> Absorption & Vacancy RatesBoston <strong>Office</strong> Absorption & Vacancy Rates18.0%16.0%14.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%8.0% 12.0%14.0%6.0% 10.0%12.0%4.0% 8.0%10.0%2.0% 6.0%8.0%0.0% 4.0%6.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Boston Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)Downtown VacancySuburban VacancyBoston <strong>Office</strong> Space Under Construction & CompletionsBoston <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionBoston Class A Average Asking Gross RentsBoston Class A Average Asking Gross RentsBoston Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 200 Forest Street, Marlborough GE Healthcare 209,900 New2 125 High Street Houghton Mifflin Harcourt 160,000 New3 20 Guest Street, BrightonHarvard Business SchoolPublishingDowntown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentDowntown Additional RentSuburban Additional Rent124,000 New4 1265 Main Street, Waltham Clarks Americas 120,000 New5 235 Wyman Street, Waltham Shire Pharmaceuticals 104,000 New24Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Charleston <strong>Office</strong> <strong>Market</strong>Throughout its illustrious history, peninsular Charleston hasserved as the CBD for what is now the 12th-fastest-growingmetro in the U.S., according to census estimates. This sharprise in population is driven by job opportunities. Expandingcompanies need somewhere to locate. With that in mind,innovative developers have created gateway developmentsat key locations in the city to meet demand. While no singledevelopment is driving the future of the CBD, three stand outin their scale and transformative nature: the Cigar Factoryon East Bay Street, Courier Square on Meeting Street andWestEdge on Lockwood Boulevard. Each site is at a key entrypoint to the city, each appeals to a distinct market, and all willshape the way residents live and work in Charleston.The Cigar Factory is a 244,000-sf historic structure datingback to the 1880s. Originally constructed as a cotton mill,the building shell has recently been extensively renovated.Predominantly office space, it is proving to be popularwith employers seeking a historic and non-traditionalenvironment. When completed, the Cigar Factory will alsofeature restaurants, event space and retail. Courier Square is along-term development that will progress over six phases, thefirst of which will include multi-family, retail and office. It willultimately cover 12 acres, but the first phase will be located on2.8 acres at the prominent corner of Meeting and ColumbusStreets, and will include 225 apartments and 90,000 sf of retailand office space. At the westernmost entry to peninsularCharleston, the WestEdge development will transform a22-acre site that will give a new identity to this area of thecity. As part of a plan that will span 15 to 25 years, the initialventure will include a 150,000-sf research and office building,complemented by a mixed-use residential and retail complex.Developed on land owned by the Medical University of SouthCarolina (MUSC) and the City of Charleston, the site will targetbiotech- and research-based companies that will benefit fromproximity to the MUSC campus.These significant developments illustrate Charleston’s entryinto a new era that will include a growing and increasinglycomplex and prosperous office market.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 8085 Rivers Avenue Dial America <strong>Market</strong>ing Inc. 40,700 Renewal/Expansion2 2125 Charlie Hall Boulevard MUSC Health 26,200 Renewal3 3484 Shelby Ray Court Charleston Veterinary 16,000 Renewal4 3860 Faber Place Drive Cambridge International Systems Inc. 15,000 New5 1 Southpark Circle MUSC Health 14,900 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf300250200 300300350250350 300200300 250150250 200100200 15050150 1000100 50500$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5Charleston <strong>Office</strong> Absorption & Vacancy RatesCharleston <strong>Office</strong> Absorption & Vacancy RatesCharleston <strong>Office</strong> Space Under Construction & CompletionsCharleston Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0% 20.0%300 150 25014.0% 18.0%20.0%250 100 20012.0% 16.0%18.0%10.0% 14.0%20015016.0%8.0% 12.0%10014.0%15006.0% 10.0%12.0%100 -504.0% 8.0%10.0%-100 5002.0% 6.0%8.0%-150 -5000.0% 4.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20156.0%-100-502.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%-150 Downtown VacancySuburban Vacancy-100Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-150 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Charleston Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)350 Downtown VacancySuburban Vacancy$400Charleston <strong>Office</strong> Absorption & Vacancy RatesCharleston <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionCharleston Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionCharleston Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 25


Charlotte <strong>Office</strong> <strong>Market</strong>The Charlotte office market, comprising nearly 50 msf,ended the second quarter of 2015 with vacancy at 13.4%,its lowest level since 2008. Vacancy has fallen 30 bps sincethe end of 2014 and 90 bps in the last 12 months. Class Avacancy ended the second quarter of 2015 at just 10.7%,giving landlords ample room to increase asking rental rates.The average class A asking rate stood at $25.69 psf in thesecond quarter, up by an impressive 11% year-over-year.The average class B rate rose by 6.3% to $19.18 psf. Vacancyis tightest in Charlotte’s urban markets – CBD and Midtown– where vacancy stands at 9% and 4.7%, respectively. Themost improved submarket is the Highway 51 corridor, wherevacancy ended the second quarter at 16%, down by 10.6percentage points in the last 24 months.The largest transactions in the first half of 2015 wereSynchrony Financial’s lease for 152,000 sf at BallantyneCorporate Park in the Highway 51 submarket and Walmart’s107,600-sf lease for its global shared-services unit at ThreeWater Ridge in the Airport submarket. MetLife expanded byanother 28,400 sf at Ballantyne Corporate Park, bringing itstotal square footage in the park to 464,000.Charlotte began 2015 with a relatively modest amount ofpositive net absorption – just under 170,000 sf throughthe first half. This lull in activity follows four years of robustabsorption that reduced vacancy by more than 600 bps froma cyclical high of 19.7%. The recent slowdown is likely duein part to tight market conditions. A lack of large-block classA space is driving new construction, including two majorbuild-to-suit projects just south of the North/South Carolinaborder, for LPL Financial and The Lash Group, as well as ahandful of speculative buildings. Just 370,500 sf of that spaceis scheduled for delivery in 2015 with 25% preleased. As aresult, tenants will continue to face limited class A optionsfor the next 18 to 24 months, keeping upward pressure onrental rates.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,6001,2001,600 1,4001,0001,400 1,2008001,200 1,000600700 9001,000600 800900500 700800400 600700300 500600200 400500100 300400200 03001002000100$ psf1,000 800$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10Charlotte <strong>Office</strong> Absorption & Vacancy RatesCharlotte <strong>Office</strong> Absorption & Vacancy RatesCharlotte <strong>Office</strong> Space Under Construction & CompletionsCharlotte Class A Average Asking Gross Rents20.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%1,000 80040015.0%5.0% 10.0%800 60020040010.0%60000.0% 5.0%400 200 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%2000Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Charlotte Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)1,000 Downtown VacancySuburban Vacancy$ psf$ psf1,6001,400900$300Charlotte <strong>Office</strong> Absorption & Vacancy RatesCharlotte <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionCharlotte Class A Average Asking Gross RentsCharlotte Class A Average Asking Gross Rents25.0%Vacancy Vacancy Rate Rate Vacancy Rate$10 $0$5$5 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 Ballantyne Corporate Park Synchrony Financial 152,000 New2 Three Water Ridge Walmart 109,600 New3 Two Piedmont Town Center AmWINS Group 61,000 Renewal/Expansion4 Toringdon I Heartland Payment Systems 30,300 New5 Ballantyne Corporate Park MetLife 28,400 Expansion26Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Chicago <strong>Office</strong> <strong>Market</strong>The Chicago office market ended the second quarter of 2015with an overall vacancy rate of 13.3% – down 60 bps from13.9% at the same time in 2014. This marks the fifth-consecutivequarter of declining vacancy. The CBD continued to recordtremendous growth as vacancy dropped to pre-recession levels– down 40 bps to 11.1%. Activity within suburban marketsresulted in an uptick during the first half of 2015. Absorptionshifted upwards in the past four quarters, prompting vacancyto decrease 90 bps year-over-year. Average asking rental ratesacross the market continue to rise. Class A rents within the CBDrose 7.5% from mid-year 2014 – a direct result of landlordsacross the market making capital improvements and addingbuilding amenities.Leasing activity continued to thrive throughout the CBD.Meanwhile, demand remains strong in both the West andCentral Loop submarkets. However, many tenants no longerfocus solely on preferred submarkets. The “Google effect”has resulted in many tenants looking at options in alternateareas that are, in some cases, more cost-effective or providedistinctive lifestyle advantages. The East Loop submarketwitnessed great momentum during the first half of 2015.Absorption shifted upward for the first time in several quarters,driving vacancy down 120 bps compared with mid-year 2014.Construction continues on two new trophy-class office towerslocated within the CBD’s West Loop. In the second quarter of2015, River Point added notable tenants such as Morton Saltand Allstate – bringing the project to 58% preleased. DeveloperJohn Buck has announced plans to commence constructionon a third CBD office development, 151 North Franklin, whichis also located within the West Loop and is expected to breakground during the fourth quarter of 2015. Law firms Hinshaw& Culbertson and Freeborn & Peters are both in negotiations tolease 100,000 sf and 90,000 sf, respectively.Benefiting from its diversification, the Chicago metropolitaneconomy has continued to strengthen. More than 56,500 jobshave been added since mid-year 2014, and unemployment hasdropped an impressive 100 bps to 6.7% in the same period. Asdemand for space remains high across the market, users shouldsee further shortages of quality space as well as rising rents.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 One Parkway North United Stationers Inc. 214,200 Renewal2Bannockburn Centre atCollege ParkBaxalta Inc. 170,000 New3 Windy Point I Comcast 101,400 Renewal4 540 W. Madison Street SAC Wireless 83,200 Renewal5 River Point Mead Johnson Nutrition Company 78,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,0002,5002,000 2,5002,5001,500 2,0002,0001,000 1,5001,5001,000 5001,000500 0$ psf5000$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Chicago <strong>Office</strong> Absorption & Vacancy RatesChicago <strong>Office</strong> Absorption & Vacancy RatesChicago <strong>Office</strong> Space Under Construction & CompletionsChicago Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0% 20.0%14.0% 18.0%2,500 1,50020.0%2,00012.0% 16.0%18.0%2,000 1,00010.0% 14.0%1,50016.0%8.0% 12.0%14.0%1,5001,0006.0% 10.0%12.0%4.0% 8.0%1,000010.0%5002.0% 6.0%8.0%-5000.0% 4.0%0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20156.0%2.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%0-500 Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-500 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Chicago Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)2,500 Downtown VacancySuburban Vacancy$ psf$ psf2,500$45$400Chicago <strong>Office</strong> Absorption & Vacancy RatesChicago <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionChicago Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionChicago Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 27


Cleveland <strong>Office</strong> <strong>Market</strong>Located on the southern shores of Lake Erie, Cleveland isthe second most populous city in Ohio. The Clevelandmetropolitan area is the largest in the state by populationcomprising five counties: Cuyahoga, Geauga, Lake, Lorain andMedina.The Cleveland office market continued its positive momentumin the second quarter of 2015 with both downtown andsuburban markets recording gains in net absorption anddeclining vacancies. The CBD, which includes approximately32 msf of office space, experienced net absorption of nearly396,000 sf between the third quarter of 2014 and the secondquarter of 2015. As of mid-year 2015, the downtown vacancyrate was 17.9%, compared with 18.6% one year earlier. Gainswere buoyed by renewals, relocations within the marketand smaller deals rather than significant new-to-marketlease transactions. Investors continued to take advantage ofredevelopment opportunities and underperforming assets. Saletransactions were highlighted by the purchase of 925 EuclidAvenue by Hudson Holdings, which is planning a $280-millionrenovation of the 1.3-msf former Huntington Building, and theacquisition of the Fifth Third Center for $53.75 million by HertzInvestment Group. The proposed nuCLEus project nabbedits first office tenant with Benesch agreeing to lease 66,500 sf.The 72-msf suburban office market also enjoyed a healthysecond quarter and saw slightly more than 400,000 sf of netpositive absorption in the 12 months ending at mid-year 2015.Vacancy rates remained tighter in the suburbs compared withdowntown, declining to 11.3% from 11.7% on a year-over-yearbasis. Second-quarter activity was highlighted by FirstEnergyrenewing the lease on its 19-story headquarters in DowntownAkron through June 2025. Average gross rental rates across allclasses remained relatively flat both downtown (approximately$19 psf) and in the suburbs ($16 psf).The supply of downtown office space is expected to continueto compress as older buildings are repurposed for multi-familyuse. Downtown apartments currently boast an impressive98% occupancy rate, and the growing population should pavethe way for the downtown office market to enjoy continuedpositive absorption and a declining vacancy rate.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 76 S. Main Street, Akron First Energy Corp. 400,000 Renewal26100 Rockside Boulevard,IndependenceVox Mobile 34,000 New3 200 Public Square, Cleveland Fox Sports Cleveland 23,000 New46050 Oak Tree Boulevard,IndependenceNexus Gas/Spectra Energy 22,400 New5 950 Main Avenue, Indepedence Jackson Lewis 14,000 ExpansionAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf800600800400800 600200600 4000400 2002,000 2,5002,5001,500 2,0002,0001,000 1,5001,5001,000 5001,000500 05000$20 $25$25$15 $20$20$10 $15$15$10 $5$10$0 $5$5$0Cleveland <strong>Office</strong> Absorption & Vacancy RatesCleveland <strong>Office</strong> Absorption & Vacancy RatesCleveland <strong>Office</strong> Space Under Construction & CompletionsCleveland Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%-20015.0%20005.0% 10.0%-400-200 010.0%-6000.0% 5.0%-200 -400 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-400 -600 Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-600 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Cleveland Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)2,500 Downtown VacancySuburban Vacancy$250Cleveland <strong>Office</strong> Absorption & Vacancy RatesCleveland <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionCleveland Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionCleveland Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy Rate28Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Columbus <strong>Office</strong> <strong>Market</strong>With one of the fastest-growing populations in the U.S.,Columbus is anticipated to surpass Cleveland andbecome the second-largest city in Ohio in 2016 (the largestbeing Cincinnati). Ohio State University contributes 65,000people to the Columbus area’s population. With a four-yeargraduation percentage of 82%, millennials flood the localworkforce, generating demand for a more creative andcontemporary working environment. The Columbus officeinventory consists of nearly 71 msf spanning 11 counties.The office market continued its vibrancy in the first half of2015 as net absorption levels exceeded expectations andvacancy rates continued on their downward trajectory. Atmid-year 2015, the Columbus Metropolitan Statistical Areareported an unemployment rate of 3.8% compared with4.3% at the same time in 2014.Demand remained high in Columbus’ CBD as overallvacancy decreased to 7.9% at mid-year 2015 from 8.6% ayear earlier. Downtown vacancy fell slightly, by 20 bps to7.6%, while the suburban market dropped an impressive120 bps year-over-year to 8%. Total 12-month absorptionthrough to mid-year 2015 was nearly 857,000 sf comparedwith 262,000 sf in the previous 12-month period. Thedowntown market rebounded strongly, shifting to nearly344,000 sf of net positive absorption between mid-year2014 and mid-year 2015 from negative 99,000 sf a yearearlier. Downtown construction activity has slowed as ofmid-year 2015 due to the completion of the Columbia GasBuilding, which added 290,000 sf to the Arena District inthe fourth quarter of 2014. As of mid-year 2015, there wasnearly 112,000 sf under construction across both suburbanand downtown markets with 53% preleased.Leasing activity also remained strong in the first half of2015. Opportunities for Ohioans with Disabilities signed anew lease at 150 East Campus Boulevard for 61,000 sf, whileIndiana-based Fortune 500 energy company NiSource tookup 43,000 sf. The top renewal was healthcare companyHealthSpot’s extension of its 20,100-sf lease at 545 MetroPlace South in Dublin.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 150 E. Campus View BoulevardOpportunities for Ohioanswith Disabilities61,000 New2 1600 Dublin Road NiSource 43,000 New3 488 W. Nationwide Boulevard Aver Infomatics 24,000 New4 545 Metro Place S., Dublin HealthSpot 20,100 Renewal5 640 S. Front Street Total Quality Logistics 16,800 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf600700500700 600400600 500300500 400200400 300100300 2000200 1001000$16 $20$14 $18$20$12 $16$18$10 $14$16$12 $8$14$10 $6$12$4 $8$10$2 $6$8$0 $4$6$2$4$0$2Columbus <strong>Office</strong> Absorption & Vacancy Rates80012.0%1,00014.0%600 Columbus <strong>Office</strong> Absorption & Vacancy Rates10.0%1,000 80040012.0% 14.0%8.0%800 60020010.0% 12.0%600 4006.0%08.0% 10.0%400 2004.0%-2006.0% 8.0%2000-4002.0%4.0% 6.0%-200 0-6000.0%-200 -400 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-400 -600 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-600 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Columbus Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)700 Downtown VacancySuburban Vacancy$ psf$ psf1,000$20$180Columbus <strong>Office</strong> Absorption & Vacancy RatesColumbus <strong>Office</strong> Space Under Construction & CompletionsColumbus <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionColumbus Class A Average Asking Gross RentsColumbus Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionColumbus Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional RentMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 2914.0%Vacancy Vacancy Rate Rate Vacancy Rate


Dallas <strong>Office</strong> <strong>Market</strong>Dallas-Fort Worth’s commercial real estate market hashad one of its best years in 2015 as significant demandis spurring new office developments. Dallas continues tostrengthen as a corporate destination with 18 Fortune 500companies currently headquartered in the metro. Majorcorporate relocations and expansions have had the addedbonus of attracting ancillary support companies to the area,further boosting job growth and office demand. Large-scaleoffice projects that have been in the works for years cameto fruition, resulting in impressive numbers. In the last 12months, the market absorbed more than 6.5 msf of spaceas tenants took occupancy of large build-to-suit projects.State Farm delivered 1.5 msf of space at its new campus inRichardson. The company began moving its 8,000 employeesto the location earlier in 2015. The campus will total 2 msfwhen completed in 2016. Vacancy has fallen to 14.7%,its lowest point since 2006. Asking rates have increasedsubstantially in the last 12 months due to high demand andincreased operating costs. Asking rates have increased 4%year-over-year to $21.75 psf.The Dallas office market’s building boom currently hasmore than 8.2 msf under construction with 65% preleased.Construction on Toyota’s 1-msf campus at Legacy West brokeground in 2015. However, Toyota has announced plans tomore than double its footprint at the campus, which willnow total 2.1 msf. In the past year, most new constructionstarts have been geared towards large build-to-suit projects.Record-low vacancy and pent-up demand will likely leadto an increase in speculative development. Many newspeculative projects have been announced and will likelybreak ground in coming months, eventually alleviatingtightness in the market.The Dallas-Fort Worth metro has robust fundamentals,including rising population, strong employment growth anda low unemployment rate. The market shows no signs ofslowing, and the positive fundamentals seen in the past yearare expected to continue. Vacancy is expected to tightenthrough 2015 until new speculative construction is deliveredin 2016.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)5,0006,0004,0006,000 5,0003,0005,000 4,0002,0004,000 3,0001,0003,000 2,00002,000 1,000-1,0001,0000-1,000 0-1,000$ psf8,0006,0008,0007,0005,0007,0006,0004,0006,0005,0003,0005,0004,0002,0003,0004,000 1,0002,0003,000 01,0002,00001,000$ psf$ psf6,0008,0007,000$300$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Dallas <strong>Office</strong> Absorption & Vacancy RatesDallas <strong>Office</strong> Absorption & Vacancy RatesDallas <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Dallas Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions (12 months)Downtown VacancySuburban VacancyDallas <strong>Office</strong> Space Under Construction & CompletionsDallas <strong>Office</strong> Space Under Construction & CompletionsDallas Class A Average Asking Gross RentsDallas Class A Average Asking Gross Rents30.0%25.0%30.0%20.0% 30.0%25.0%15.0% 25.0%20.0%10.0% 20.0%15.0%15.0%10.0%10.0%5.0%5.0%0.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionDallas Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 Bank of America Plaza Strasburger & Price 402,600 Expansion2 Lakeside Campus RealPage 332,700 Expansion3 Cypress Waters CoreLogic 327,200 New4 Tollway <strong>Office</strong> Center II Liberty Mutual 160,000 Expansion5 Royal Ridge Business Park NEC Corp. 119,600 Expansion30Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Denver <strong>Office</strong> <strong>Market</strong>Denver’s office market is at the forefront of adapting to anevolving work environment, which has become integralto its continued success and sustained demand. The Denvermetro continues to benefit from a significant in-migration ofmillennials, small start-ups and entrepreneurs who are alteringthe office leasing landscape. To remain competitive, manyexisting buildings have undergone renovations to accommodatethe popular collaborative work environments and improvedamenities that are sought by millennials. Tenants have placedan increasing amount of value on flexibility, with a large numberopting for shorter lease deals rather than locking in a lower ratein exchange for longer terms. This trend is particularly significantbecause asking rates increased 6.8% year-over-year to $24.22 psfat mid-year 2015, and will likely continue to appreciate. Sometenants coming up for renewals are experiencing sticker shockand are opting either to downgrade in the quality of space leasedor to reduce their employee footprint.High demand lowered the vacancy rate to 9.9% at mid-year2015, down from 11.3% at the same point in 2014. Absorption– 1 msf in the first half of 2015 and nearly 2.5 msf in the past 12months – continued to outpace new product deliveries and ispushing Denver towards a landlord-favorable market as well asprompting speculative construction, as evidenced by severalnewly announced developments throughout the CBD. Projectsthat were on the drawing board at mid-year 2014 have brokenground and preleased quickly. More than 3.1 msf of space iscurrently under construction with 38% preleased. Most notably,Hines broke ground on 1144 Fifteenth on a speculative basis. Thebuilding, located in the heart of downtown, totals 640,000 sf andis the largest office building to break ground in the CBD in nearlytwo decades.Finally, annual employment growth was 3.5% for the 12months ending in June 2015 and should spur additionaldemand for office space throughout the remainder of the year.Unemployment was 4.3% at mid-year 2015, down from 4.9% atthe same point in 2014. Denver has a diverse economy that hasnot been significantly impacted by falling oil prices. Indicators arepointing towards a period of sustained growth going forward.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,200 1,6001,000 1,4001,6001,200 8001,4001,000 6001,200400 8001,000200 600800400 0600-200400-4000200-2000-400-200$ psf1,600 2,0001,400 1,8002,0001,200 1,6001,8001,000 1,4001,6001,200 8001,4001,000 6001,200400 8001,000200 600800400 06002004000200$ psf$ psf1,6001,400-4002,0001,800$350$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5$5 $0Denver <strong>Office</strong> Absorption & Vacancy RatesDenver <strong>Office</strong> Absorption & Vacancy RatesDenver <strong>Office</strong> Absorption & Vacancy Rates16.0%14.0%16.0%12.0%14.0% 16.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Denver Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)Downtown VacancySuburban VacancyDenver <strong>Office</strong> Space Under Construction & CompletionsDenver <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionDenver Class A Average Asking Gross RentsDenver Class A Average Asking Gross RentsDenver Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net RentDowntown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Asking Net RentAddress / Complex Tenant Size (sf) Deal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 Millennium Plaza AECOM 282,000 Expansion2 Panorama Comcast 250,000 Expansion3 1801 California TransAmerica 120,000 Expansion4 Gateway Plaza Kaiser 80,000 Expansion5 Palazzo Verde Envision 75,000 ExpansionMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 31


Detroit <strong>Office</strong> <strong>Market</strong>Detroit’s office market activity is continuing at a steady pace.The Greater Detroit Area’s unemployment rate was 4.9% atmid-year 2015, slightly higher than the statewide average of4.8%, according to the U.S. Bureau of Labor Statistics. Demandfor a contemporary working environment is at an all-timehigh, making Detroit’s downtown a desirable location for techcompanies. However, there are still several macroeconomicfactors discouraging potential businesses from a suburban-todowntownmigration.A new transportation system and Detroit Red Wings arenashould spur downtown development, and Wayne StateUniversity Physician Group is building a state-of-the-art,155,000-sf office building in the Midtown submarket. Newconstruction projects in both suburban and downtownmarkets are, in total, 97.1% preleased. Attracted by the recentrecession and over-inflated cap rates, international investorscontinue to keep an eye on Detroit’s downtown. <strong>Office</strong>vacancy in the downtown market dropped 110 bps year-overyearto 14% at mid-year 2015. The suburban vacancy also fellto 17.3% from 19.1% a year earlier. Downtown class A averageasking rental rates increased slightly to $21.84 psf at mid-year2015 from $21.62 psf at the same time in 2014.Major office market activity includes the sale of the historicFisher and Albert Kahn buildings to Detroit firm Redicofor a combined $12.2 million ($13 psf) in June 2015. Bothbuildings are a combined 65% leased and total 925,000 sf.Quicken Loans renewed its 300,000-sf lease at One CampusMartius. Ally Financial had been considering moving itsheadquarters to Southfield in the suburbs, but elected toconsolidate all three offices to one location downtown. Allywill move into 322,000 sf in the soon-to-be-named Ally DetroitCenter located at 500 Woodward. Major suburban activityincluded HTC Global Services acquiring Caretech Solutionsand consolidating both companies’ offices in 130,000 sf at theCentennial <strong>Office</strong> Building located in Troy - an asset recentlypurchased by HTC. As demand for office space in Detroit’s CBDincreases, owners of older office inventory will continue torenovate to meet new market requirements.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)1,000 1,5001,5001,000 5001,000500 0500-50000-1,000 -500-500-1,000-1,000Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf1,500800700800600800700500700600400600500300500400200300400 100200300 01002000100$250$20 $25$25$15 $20$20$10 $15$15$10 $5$10$0 $5$5$0Detroit <strong>Office</strong> Absorption & Vacancy RatesDetroit <strong>Office</strong> Absorption & Vacancy RatesDetroit <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Detroit Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions(12 months)Downtown VacancySuburban VacancyDetroit <strong>Office</strong> Space Under Construction & CompletionsDetroit <strong>Office</strong> Space Under Construction & CompletionsDetroit Class A Average Asking Gross RentsDetroit Class A Average Asking Gross Rents25.0%20.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionDetroit Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 One Detroit Center Ally Financial 322,000 New2 Compuware World Headquarters Quicken Loans Inc. 300,000 Renewal3 Compuware World Headquarters Meridian Health 300,000 Renewal4 Haggerty Corridor Corporate Park Harman Becker Automotive 188,000 Renewal5 Fairlane Business Park Roush 169,200 New32Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Fairfield County <strong>Office</strong> <strong>Market</strong>Fairfield County registered more than 1 msf of leasingduring the first half of 2015. Much of the leasingwas, unfortunately, accomplished at the beginningof the year and, subsequently, volume has been flat.The largest transactions signed during the first half of2015 included Synchrony Financial’s lease renewal of312,000 sf at 777 Long Ridge Road and UBS’ relocationto 119,200 sf at 600 Washington Boulevard, bothin Stamford. Frontier Communications moved itsheadquarters to 84,500 sf at 401 Merritt 7 in Norwalkfrom Stamford, while Sikorsky Aircraft took 121,000 sfat 1 Far Mill Crossing in Shelton. Solid leasing activityhelped push the Fairfield County market’s overallvacancy rate down to 18.1% at mid-year 2015 from22% a year earlier. Fairfield County’s vacancy rate hashistorically settled in the high teens.While the overall market was below 20% at midyear2015, a broadly defined Stamford CBD recordedvacancy greater than 20%, an increase of 460 bpsyear-over-year. Blocks of additional space were addedthroughout the county. In the first half of 2015, at least10 blocks in excess of 30,000 sf each were added tothe market. Furthermore, there will continue to be asurplus of shadow vacancy (space that is leased butnot occupied) added to the market through 2015. Itis anticipated that GE will divest itself of many of itsfinancial services units, potentially adding more than300,000 sf to the Norwalk Route 7 corridor submarket.Due to significant office space overhang in the marketand the threat of more to come, landlords have startedto reduce asking rental rates. Fairfield County’s overallaverage direct asking rental rate has fallen by $1.28 psfto $33.23 psf since mid-year 2014. The class A rate hasfollowed suit with a $1.69 year-over-year decrease to$36.87 psf at mid-year 2015.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 777 Long Ridge Road Synchrony Financial 312,000 Renewal2 1 Far Mill Crossing Sikorsky Aircraft 121,000 Expansion3 401 Merritt 7 Frontier Communications 84,500 New4 6 Landmark Square Cummings & Lockwood 55,600 Renewal5 600 Steamboat AMG Funds 40,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf400600200600 4000400 200-2002000350 450400450 300350400250300350200250300150200250100150200100 015050100050$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Fairfield County <strong>Office</strong> Absorption & Vacancy RatesFairfield County <strong>Office</strong> Absorption & Vacancy Rates400 Fairfield County <strong>Office</strong> Space Under Construction & CompletionsFairfield County Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%-40015.0%-200 05.0% 10.0%-600-200 -40010.0%-8000.0% 5.0%-400 -600 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-600 -800 Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-800 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Fairfield Downtown County Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions(12 months)450 Downtown VacancySuburban Vacancy$ psf$ psf600$45$400Fairfield County <strong>Office</strong> Absorption & Vacancy RatesFairfield County <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionFairfield County Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionFairfield County Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 33


Fort Lauderdale <strong>Office</strong> <strong>Market</strong>Fort Lauderdale’s office market – which also includes all ofBroward County – witnessed a great number of sales andleasing and construction activity during the first half of 2015.Vacancy is declining – downtown vacancy fell 60 bps yearover-yearand suburban vacancy dropped 130 bps. Averageasking rental rates for downtown class A space rose to $35.74psf gross at mid-year 2015 from $32.98 psf gross a yearearlier. Average asking rental rates for suburban class A spaceincreased only marginally year-over-year to $28.20 psf grossat mid-year 2015.After years with no new construction in Downtown FortLauderdale, there are currently two buildings underconstruction totaling nearly 60,000 sf. One West Las OlasBoulevard is expected to be complete in October 2015and will feature 32,200 sf of class A office space withapproximately 80% preleased. Another downtown building,105 North Federal Highway, is set to deliver in early 2016,offering 27,400 sf of class B office space. Suburban BrowardCounty is experiencing a surge in new construction withnearly 890,000 sf under construction in eight buildings as ofmid-year 2015 – an increase of more than 700% comparedwith one year earlier – with 77.2% of this new constructionpreleased. The largest suburban project currently underconstruction is the new American Express regionalheadquarters, a 400,000-sf class A building in Sunrise.Both downtown and suburban Broward County marketsregistered positive absorption in the four quarters ending atmid-year 2015. Suburban Broward recorded nearly417,000 sf of positive absorption during that time, a 59%increase year-over-year. Downtown Fort Lauderdale alsoexperienced positive absorption, though at a less rapid rate,with 17,300 sf absorbed since the third quarter of 2014.It is expected that absorption, as well as rental rates, willincrease as the new product currently under constructionis completed. The largest office lease transaction year-todatewas AmSurg Corp.’s new 221,600-sf lease at 8000 WestSunrise Boulevard in Plantation. AmSurg is set to occupy167,000 sf by September 2016 and then expand in May 2017.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 8000 W. Sunrise Boulevard AmSurg Corp. 221,600 New2 3200 S. University Drive Nova Southeastern 90,000 New3 1100 W. McNab Road ChildNet 82,900 New4 Royal Palm at South Pointe Thales LLC 54,000 Renewal5 Las Olas City Centre Patriot National Inc. 49,100 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf5004005001,000 800700 9001,000600 800900500 700800400 600700300 500600200 400500100 300400200 03001002000100$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5Fort Lauderdale <strong>Office</strong> Absorption & Vacancy RatesFort Lauderdale <strong>Office</strong> Absorption & Vacancy RatesFort Lauderdale <strong>Office</strong> Space Under Construction & CompletionsFort Lauderdale Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0% 20.0%300500 40014.0% 18.0%20.0%20012.0% 16.0%18.0%400 30010.0% 14.0%16.0%1008.0%30012.0%20014.0%06.0% 10.0%12.0%200 1004.0% 8.0%-10010.0%10002.0% 6.0%8.0%-2000.0% 4.0%-100 0 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20156.0%Downtown Absorption (12 months)2.0%Suburban Absorption (12 months) 4.0%-100 -200 Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Fort Lauderdale Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions (12 months)1,000 Downtown VacancySuburban Vacancy900$400Fort Lauderdale <strong>Office</strong> Absorption & Vacancy RatesFort Lauderdale <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionFort Lauderdale Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionFort Lauderdale Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy Rate34Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Houston <strong>Office</strong> <strong>Market</strong>Depressed oil prices in the first half of 2015 have resultedin mounting concern over their potential impact onHouston’s office market. Tenants have shifted focus fromsecuring real estate in prime locations to downsizing as acost-cutting measure, a drastic change in outlook from just12 months earlier. Houston recorded negative net absorptionof 187,700 sf in the first half of 2015, compared with positiveabsorption of 6.1 msf in the first half of 2014. Leasing velocityfell sharply in the first half of 2015 as companies continuedto implement a wait-and-see approach. Leasing activity isnot expected to pick up through the rest of 2015 given thecurrent market conditions, but should increase in 2016 asmore tenants approach lease expirations.Houston entered 2015 from a position of strength, whichis helping to minimize the current downturn’s negativeinfluence. Particular concerns are substantial amounts ofavailable sublease space, recently delivered vacant space,and rising shadow space (due to tenants moving to newlydelivered space) as a result of lower oil prices. Tenants whoare able to make real estate decisions will find opportunitiesin the form of concessions, particularly for sublease space.Asking rates have held up in the past three major downturns– a trend that continued in the first half of 2015. Overallaverage asking rates increased by 2.5% to $26.99 psf in the12 months ending at mid-year 2015.Vacancy increased to 12.1% at mid-year 2015 from 10.3%one year earlier. Large occupancies from newly deliveredbuildings and leases signed in 2014 will counteract thevacated space, resulting in only a moderate increase invacancy by year-end 2015. However, the downturn inthe energy industry appears to have halted Houston’sconstruction boom. This situation will likely give demanda chance to catch up with supply and pull the market backfrom the brink of an overbuild scenario. As of mid-year 2015,a total of 10.8 msf of office space was under constructionwith 54% preleased. <strong>Office</strong> construction will still have animpact on the vacancy rate over the next seven quarters asavailable space is delivered to the market.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 West Memorial Place II IHI E&C 171,000 New2 West Loop Plaza Stage Stores 170,000 Expansion3 Five Greenspoint Place Swift Energy 113,800 Expansion4 Parc Plaza Business Park United Way of Greater Houston 80,000 Expansion5 Westway Plaza Superior Energy Services 64,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)12,00014,00010,00014,000 12,0008,00012,000 10,0006,00010,000 8,0004,0008,000 6,0002,0006,000 4,00004,000 2,0002,0000$ psf$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Houston <strong>Office</strong> Absorption & Vacancy Rates7,000 9,00016.0%Houston <strong>Office</strong> Absorption & Vacancy Rates12.0%9,000 6,000 8,00014.0% 16.0%10.0%8,000 5,000 7,00012.0% 14.0%8.0%7,000 4,000 6,00010.0% 12.0%6.0%6,000 3,000 5,0008.0% 10.0%4,0004.0%5,000 2,0006.0% 8.0%4,000 1,000 3,0002.0%3,0002,000 04.0% 6.0%0.0%1,0002,000Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)0 Downtown VacancySuburban Vacancy1,000Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0% 2.0%0 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Houston Downtown Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban Absorption & Completions(12 months)14,000 Downtown VacancySuburban Vacancy$ psf$ psf9,0008,000$45$400Houston <strong>Office</strong> Absorption & Vacancy RatesHouston <strong>Office</strong> Space Under Construction & CompletionsHouston <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionHouston Class A Average Asking Gross RentsHouston Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionHouston Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent16.0%14.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 35


Indianapolis <strong>Office</strong> <strong>Market</strong>Indianapolis’ office market has a collective inventory of35 msf. As of June 2015, the city’s unemployment ratefell to 4.5% from the 6.8% reported a year earlier. Thereare 18 Fortune 1000 companies that call Indianapolishome. The largest industries (by employment) are healthcare, manufacturing and retail trade. Along with havingthe most diverse interstate commerce, Indianapolis isrecognized for being a prime center for logistics anddistribution facilities.The local office market continues to report solid numbers.Downtown and suburban markets had a combinednet absorption of 197,000 sf between mid-year 2014and mid-year 2015. Overall vacancy fell to 17.1% from18.2% on a year-over-year basis. The suburban market,which consists of approximately 25 msf, demonstrated asignificant reduction in vacancy in the same period, dropping130 bps to 15.8% from 17.1%. After three years withoutcompletions, new supply deliveries in the suburbanmarket have intensified. Approximately 255,000 sf wascompleted between mid-year 2014 and mid-year 2015.An additional 161,000 sf was still under construction atmid-year 2015 with 44% preleased. The downtown marketsaw a slight improvement in vacancy, dropping 50 bpsto 20.3% at mid-year 2015 from 20.8% a year earlier. Netabsorption for the 12 months leading up to June 2015 wasonly 52,000 sf for the downtown market. Downtown classA rental rates have been stable since 2011; the averageasking gross rate for downtown class A sits at $19.54 psf.The suburban market remains predictable, with averagegross asking rates of $24.39 psf.Major leasing activity included Hall Render Killian Heath& Lyman and the Indiana Department of Child Servicesboth signing new leases totaling 136,000 sf at 500 NorthMeridian Street, and Carrington Mortgage Services takingan additional 78,000 sf in the suburbs at 19831 US 31North in Westfield, Indiana.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf350300250 350400300400350250350300200300250150250200100150200 50100150 050100050$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10Indianapolis <strong>Office</strong> Absorption & Vacancy RatesIndianapolis <strong>Office</strong> Absorption & Vacancy RatesIndianapolis <strong>Office</strong> Space Under Construction & CompletionsIndianapolis Class A Average Asking Gross Rents20.0% 25.0%200 30035025.0%150 25030015.0% 20.0%100 20025020.0%15020010.0% 15.0%100 015015.0%-501005.0% 10.0%-10005010.0%-150 -500.0% 5.0%0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-100-50 Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-150 Downtown VacancySuburban Vacancy-100Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%-150 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Indianapolis Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban & Absorption Completions (12 months)400 Downtown VacancySuburban Vacancy350$300Indianapolis <strong>Office</strong> Absorption & Vacancy RatesIndianapolis <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionIndianapolis Class A Average Asking Gross RentsIndianapolis Class A Average Asking Gross Rents25.0%Vacancy Vacancy Rate Rate Vacancy Rate$10 $0$5$5 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 500 N. Meridian Street Hall Render Killian Heath & Lyman 68,000 New2 500 N. Meridian StreetIndiana Department ofChild ServicesDowntown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentDowntown Additional RentSuburban Additional Rent68,000 New3 6325 Digital Way Indiana Wesleyan University 36,000 Renewal4 2601 Metropolis Centene Management 36,000 New5 12900 N. Meridian Street Experian 30,000 Renewal36Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Las Vegas <strong>Office</strong> <strong>Market</strong>The Las Vegas office market continued to show signsof improvement as vacancy dropped 80 bps to 18.6%in the second quarter of 2015 as compared with 19.4% inthe second quarter of 2014. Medical office vacancy alsodecreased to 16.1% in the second quarter of 2015 from17.8% one year earlier. While average class A asking leaserates have increased in 2015, average class B asking ratesdropped considerably compared with the second quarterof 2014.Approximately 165 leases and 120 sales transactionswere completed throughout the valley in the first halfof 2015. The majority of new tenant activity took placein the south and southwest submarkets with lease dealsaveraging 5,000 sf. Of the 120 office buildings sold,27 were medical buildings. By comparison, averageasking class B lease rates remained relatively flat forthe 12-month period ending at mid-year 2015. Class Arates, however, are noticeably increasing. During theGreat Recession, many class B tenants took advantageof vulnerable market conditions and moved into class Aspace at class B rates. Now that the market is starting tostabilize, average asking class A rates are climbing due todecreasing vacancy, forcing some tenants to relocate tomore affordable space.With a continued lack of new construction, demand ispushing sale prices upward. Increases in foreclosures andshort sales in recent years are beginning to taper andmarket pricing is becoming more realistic. While banksstill have office properties in their inventory, many ofthem are working to add value before selling. The amountof available sublease space has decreased significantlyin recent quarters. Those businesses that needed todownsize due to the economic downturn are starting torecover, reducing the amount of sublease space on themarket. While some tenants chose to relocate to smallersuites, many waited for their subtenants’ leases to expirebefore reoccupying their original space.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf800700600 800800 500 700700 400 600600 300 500500 200 400400 100 300300200 0-100 2000100-1000-100800700800600800700500700600400600500300500400200300400 100200300 01002000100$350$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5Las Vegas <strong>Office</strong> Absorption & Vacancy RatesLas Vegas <strong>Office</strong> Absorption & Vacancy RatesLas Vegas <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyLas Vegas <strong>Office</strong> Space Under Construction & CompletionsSuburban VacancyLas Vegas <strong>Office</strong> Space Under Construction & CompletionsLas Vegas <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Las Vegas Class A Average Asking Gross Rents20.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Las Suburban Vegas Completions Class A (12 Average months) Asking Suburban Gross Rents Under ConstructionLas Vegas Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201525.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate$5 $0Suburban Asking Net RentSuburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015$0Suburban Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Address / Complex Tenant Size Suburban (sf) Asking Net RentDeal Type1 4750 Oakey United Healthcare Services 98,000 New2 1701 CharlestonUniversity of NevadaSchool of MedicineSuburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Additional Rent34,900 New3 6611 Las Vegas Boulevard Solar City 22,000 New4 8205 Warm Springs Desert Orthopedic 17,600 New5 7450 Arroyo Crossing Solar City 15,300 NewMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 37


Long Island <strong>Office</strong> <strong>Market</strong>The first half of 2015 brought a detectable increase inactivity in the Long Island office market. However, LongIsland conditions are still lagging those in the region’sstronger urban markets. Insurance companies, law firmsand health care still remain the most active sectors, withfinancial and real estate divisions lagging. Additionally,Long Island’s unemployment rate remains at post-recessionlows of 4.5%.The office market ended the second quarter of 2015 witha vacancy rate of 10.5%, reflecting a significant decreasefrom a year earlier. These rates demonstrate the impactof growth in the health care, financial and energy sectorsand the resultant activity in all submarkets. Meanwhile,asking and effective rents are continuing their upwardtrend, and with continued activity forthcoming, positiveabsorption and lower vacancy rates should prevail in theensuing months. Significant space resulting from Canon’sdeparture from Lake Success still remains vacant. However,there is activity in the submarket, primarily fueled by NorthShore-LIJ, which continues to be the most active healthcare organization in the region. Further east in the Melvillemarket, the departure of Adecco from a large block ofspace and the planned relocation of First Data have putseveral hundred thousand square feet on the market inwestern Suffolk County, which has been experiencingsoft market conditions. Historically, Suffolk County hasalways been a softer market than Nassau County due toSuffolk County’s relative location to New York City, lowerpopulation density and bedroom community status.Average asking rents for class A buildings have remainedstable over the past few years, but typical leasingincentives, such as free rent, work letters and escalations,are beginning to come off their highs. The average askingrent for class A buildings increased slightly to $31.73 psffull-service (plus electric) at mid-year 2015, rising $0.60from a year earlier. This promising increase is indicative ofgrowing demand for class A space on Long Island.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)$ psf$ psf$ psf300 500200 400500100 300400200 0300-100200-2000100-300 -1000-400 -200-100-500 -300-200-400-300-500-400-500Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)500400908070 908090 6070805060704050603040502030401020 0301020010$350$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5Long Island <strong>Office</strong> Absorption & Vacancy RatesLong Island <strong>Office</strong> Absorption & Vacancy RatesLong Island <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyLong Island <strong>Office</strong> Space Under Construction & CompletionsSuburban VacancyLong Island <strong>Office</strong> Space Under Construction & CompletionsLong Island <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Long Island Class A Average Asking Gross Rents12.0%14.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%2.0% 4.0%0.0% 2.0%Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Long Suburban Island Completions Class A (12 Average months) Asking Suburban Gross Under Rents ConstructionLong Island Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201514.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate$5 $0Suburban Asking Net RentSuburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015$0Suburban Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Suburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Address / Complex Tenant Size Suburban (sf) Asking Net RentDeal TypeSuburban Additional Rent1 600 Community Drive North Shore-LIJ Health System 252,000 Renewal/Expansion2 300 Jericho Quadrangle Darby 69,000 Renewal3 RXR Plaza Ruskin 63,000 Renewal4 88 Froelich Farm Wells Fargo 22,000 Renewal/Expansion5 6800 Jericho Turnpike Neilsen 21,000 Renewal38Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Los Angeles <strong>Office</strong> <strong>Market</strong>Los Angeles County office vacancy continued to decreaseas of mid-year 2015 due to an increase in leasing activity.At mid-year 2015, the vacancy rate had declined 130 bps to15.7% from 17% a year earlier. The direct average asking rentincreased at a solid pace, reaching $33.72 psf full-servicegross (FSG) as of mid-year 2015, up from $32.04 at mid-year2014. The range of asking rents in the seven markets withinthe Los Angeles County office market, which run from $25.32psf FSG in Hollywood/Mid-Wilshire to $48.72 psf FSG in WestLos Angeles, highlight the different market dynamics at play.The Los Angeles County office market recorded 992,000 sfof net absorption during the 12 months ending at mid-year2015. The amount of square footage under construction inthe suburbs reached slightly more than 2 msf, with somesuburban areas slowing due in part to recent deliveries. Ofthis new suburban inventory, nearly 44% is preleased, andthere is confidence that the market will readily lease theremainder. The downtown area has more than 700,000 sfunder construction, with more than 12% preleased. Creativeoffice space may be driving the newer developments;however, there is still a hefty requirement for traditionalprivate offices in the market, and this need for a variety ofpremises is ensuring a healthy amount of leasing activity.A significant increase in positive absorption was recordedin the first half of 2015 as leasing activity picked up acrossDowntown, South Bay, and both West and North LosAngeles. West Los Angeles led the market with strongactivity from media, entertainment and technology firms.The unemployment rate in Los Angeles County decreasedto 7.3% as of June 2015 – putting 2015 on track to reachan average rate lower than that of the previous year.Educational and health service industries, along with theleisure and hospitality sectors, powered employment gains,while manufacturing jobs declined. An increase in leasingactivity is expected in the second half of 2015 as tenantsseek to skirt the continuing upward rental-rate trend.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 333 S. Hope Street The Capital Group Companies Inc. 306,000 Renewal2 633 W. 5th Street Lewis Brisbois Bisgaard & Smith 215,200 Renewal3 2175 E. Park Place, El Segundo DaVita Inc. 130,000 New4 2 Innovation Way, Pomona Southern California Edison 125,000 New5 350 S. Grand Avenue City of Los Angeles 114,600 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,0002,5001,5002,500 2,0001,0002,000 1,5005001,500 1,0002,000 2,5002,5001,500 2,0002,0001,000 1,5001,5001,000 5001,000500 0$ psf5000$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Los Angeles <strong>Office</strong> Absorption & Vacancy RatesLos Angeles <strong>Office</strong> Absorption & Vacancy RatesLos Angeles <strong>Office</strong> Space Under Construction & CompletionsLos Angeles Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%015.0%1,000 5005.0% 10.0%-500500010.0%-1,0000.0% 5.0%-500 0 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-1,000 -500 Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-1,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Los Downtown Angeles Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)2,500 Downtown VacancySuburban Vacancy$ psf$ psf2,500$45$400Los Angeles <strong>Office</strong> Absorption & Vacancy RatesLos Angeles <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionLos Angeles Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionLos Angeles Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 39


Miami <strong>Office</strong> <strong>Market</strong>Miami’s office market is experiencing increased demandacross all classes and submarkets. Large tenantsrenewed leases and expanded into more space during thefirst half of 2015. Vacancy is declining – with downtownvacancy down 80 bps year-over-year and suburban vacancydown 70 bps year-over-year at mid-year 2015. Asking rentalrates for downtown class A space rose 3.6% to $41.45 psfgross at mid-year 2015 from $40.01 psf gross at the samepoint in 2014. Asking rates for suburban submarkets arealso increasing, up 5.3% year-over-year to $37.87 psf grossat mid-year 2015.The first new downtown office project in several years, TwoMiamiCentral, a 215,000-sf class A building, is currentlyunder construction and expected to be delivered in 2017.As of mid-year 2015, a total of 726,900 sf of office spacewas under construction in Miami-Dade County, up from the557,000 sf a year earlier. More than 50% of the space underconstruction has been preleased. One notable constructionproject is the ambitious Brickell City Centre development,a mixed-use project that includes more than 260,000 sf ofoffice space.Both downtown and suburban Miami-Dade County marketshave registered positive absorption and led the state in netabsorption during the past four quarters. Suburban Miamirecorded 684,000 sf of absorption from the third quarterof 2014 to mid-year 2015. Downtown Miami also recordednearly 250,000 sf of absorption since the third quarter of2014. Norwegian Cruise Line (NCL) renewed and expandedits Miami headquarters at Airport Corporate Center. NCLrenewed its 206,100-sf lease in buildings 10 and 11 andexpanded into 70,300 sf in building 8. Airport CorporateCenter was purchased by CBRE Global Investors in 2014 andwill be undergoing major renovations. Miami Center officetower is also undergoing major renovations, including$20 million to upgrade the lobby, elevators and exteriorplaza. Citigroup recently renewed its 125,000-sf lease inMiami Center.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 The Landing at MIA (Bldgs. 10 & 11) Norwegian Cruise Line 206,100 Renewal2 Miami Center Citibank 123,300 Renewal3 Museum Tower Sterns Weaver 103,000 Renewal4 PRC Building Alorica Inc. 101,300 Renewal5 The Landing at MIA (Bldg. 8) Norwegian Cruise Line 70,300 ExpansionAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,0001,2001,200 8001,0001,0001,2001,200 8001,0001,000600800$ psf80040060060020040040002002000$45$35$40$45 $30$35$40 $25$30$35 $20$25$30 $15$20$25 $10$15$20 $5$10$15 $0$5$10$0$5Miami <strong>Office</strong> Absorption & Vacancy RatesMiami <strong>Office</strong> Absorption & Vacancy RatesMiami <strong>Office</strong> Space Under Construction & CompletionsMiami Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%1,000 60080020.0%10.0% 15.0%800 40060015.0%5.0% 10.0%600 20040010.0%40000.0% 5.0%200Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%2000 Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Miami Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions (12 months)1,200 Downtown VacancySuburban Vacancy$ psf$ psf1,200$45$400Miami <strong>Office</strong> Absorption & Vacancy RatesMiami <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionMiami Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionMiami Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy Rate40Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Minneapolis <strong>Office</strong> <strong>Market</strong>Minneapolis is the second-largest economic centerin the Midwest and lies on both the Mississippi andMinnesota Rivers. With the recent increase in demandfor urban living, new apartment projects and plans haveflooded the Minneapolis/St. Paul region. The broadermetropolitan area, which includes Anoka, Dakota, Midway,Minneapolis, Scott City, St. Paul and Washington County, isthe 15th-largest (with 3.8 million in population) in the UnitedStates. The Minneapolis metropolitan area is home to 18Fortune 500 company headquarters. A city that was onceknown for producing farm implements is now a major hubfor the commerce, finance, logistics services and health careindustries. During the last four years, Minnesota has added189,000 jobs, according to the Minnesota Department ofEmployment. As of June 2015, the unemployment rate was3.4%, one of the lowest unemployment rates in the nation,employing approximately 2 million people, according to theU.S. Bureau of Labor Statistics.Minneapolis has a combined suburban and downtownoffice inventory of nearly 148 msf. Downtown vacancy hasdecreased in the past year, falling to 13.5% at mid-year 2015from 14.5% a year earlier. Downtown office constructionhas ramped up with 1.7 msf scheduled to be added tothe market in 2016 with 99% preleased as of June 2015.The vacancy rate for the suburban office market dippedslightly to 9.4% from 9.7% year-over-year at the halfwaypoint of 2015. Construction activity has remained relativelyconsistent for the suburban market with approximately1 msf completed annually since the third quarter of 2013.Class A rental rates downtown have continued to increaseannually at an average of 9% since 2011 and reached $25.52psf in June 2015. Class A rental rates in the suburbs dippedslightly to $21.05 psf from $21.85 psf on a year-over-yearbasis at mid-year 2015.Major leasing activity included Smiths Medical, a designerand manufacturer of medical devices, signing a 182,300-sflease at 6000 Nathan Lane in Plymouth.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 6000 Nathan Lane, Plymouth Smiths Medical 182,300 New2 Butler Square Aimia 54,400 New3 605 Waterford Park, Plymouth OneBeacon Insurance 53,000 New4 Fifth Street Towers Martin Williams Agency 31,400 New5 Highlight Center Sport Ngin 30,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,000 1,4001,400 1,200 8001,200 1,000 6001,000 400 800$ psf$ psf$ psf1,4001,200800 200 600600400 0-200 4002,000 2,5002,5001,500 2,0002,0001,000 1,5001,5001,000 5001,000500 05000$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Minneapolis <strong>Office</strong> Absorption & Vacancy RatesMinneapolis <strong>Office</strong> Absorption & Vacancy RatesMinneapolis <strong>Office</strong> Space Under Construction & CompletionsMinneapolis Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201514.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%8.0% 12.0%14.0%6.0% 10.0%12.0%4.0% 8.0%10.0%2.0% 6.0%8.0%-400 20000.0% 4.0%6.0%-2000Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%-400 Downtown VacancySuburban Vacancy-200Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-400 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Minneapolis Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban & Absorption Completions (12 months)2,500 Downtown VacancySuburban Vacancy$300Minneapolis <strong>Office</strong> Absorption & Vacancy RatesMinneapolis <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionMinneapolis Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionMinneapolis Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent18.0%16.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 41


New Jersey <strong>Office</strong> <strong>Market</strong>The New Jersey Economic Development Authority (NJEDA)continues to offer aggressive incentives for companiesrelocating to and remaining in the state. Over the past 12months, the Hudson Waterfront, otherwise known as NewJersey’s “Gold Coast,” has been a major beneficiary of statefunds, showing strong leasing demand as companies movedor expanded their operations from throughout the region. NewYork Life Insurance, RBC, Jackson Hewitt and First Data all tookadvantage of state aid to lease space in Jersey City, where theywill receive more than $50 million worth of incentives and addmore than 1,350 jobs. Since 2010, more than $5 billion has beenawarded through the Urban Transit Hub Tax Credit, EconomicRedevelopment and Growth, and Grow New Jersey Assistanceprograms signed into law by Governor Chris Christie, whoseadministration has spent the most in state history on businessretention and growth.Available in qualified incentive areas statewide, these tax breaksprovide benefits to areas beyond the aforementioned HudsonWaterfront. In West Windsor, BlackRock received approval formore than $12 million to expand its facility. Like BlackRock andFirst Data, the finance and technology industries continue tobe targets for the NJEDA, which hopes to bring more of thesehigh-paying jobs to New Jersey. More than one-third of allapproved tax incentives have gone to technology companiesalone. The state’s open purse strings have not gone unnoticedby developers, who are now completing projects to meetthe increased demand for new space. SJP Properties’ recentlycompleted 508,000-sf office and retail tower in Hoboken isalready 60% leased.In spite of the aggressive incentives, New Jersey continues tolag neighboring states economically and, according to theU.S. Department of Commerce, ranked 46th in the countryoverall in GDP growth for 2014. This lag is naturally reflectedin the statewide office vacancy rate, which remained constantyear-over-year, at 21.3% as of mid-year 2015. As a result, tenantopportunity will remain in the marketplace for the foreseeablefuture, provided companies can sort out the other economicterms and impacts that go hand-in-hand with locating andoperating in New Jersey.$0Suburban Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Address / Complex Tenant Size Suburban (sf) Asking Net RentDeal Type1 295 North Maple Avenue Verizon Wireless 1,306,400 New2 67 Whippany Road Metlife 185,000 New3 184 Liberty Corner Road GlaxoSmithKline 144,500 New4 103 JFK Parkway Dun & Bradstreet 123,000 Renewal5 30 Hudson Street New York Life Insurance Co. 114,700 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)200 600600 400 0-200 400-400 2000-600 -2000-200 -800 -400-1,000 -400-600-1,200 -600-800-1,000-800-1,200-1,000-1,200$ psf1,2001,4001,0001,400 1,2008001,200 1,0006001,000 800$ psf$ psf6004001,400400800 600200600 4000400 2002000$300$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0New Jersey <strong>Office</strong> Absorption & Vacancy RatesNew Jersey <strong>Office</strong> Absorption & Vacancy RatesNew Jersey <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Absorption (12 months)Suburban VacancyNew Jersey <strong>Office</strong> Space Under Construction & CompletionsSuburban VacancyNew Jersey <strong>Office</strong> Space Under Construction & CompletionsNew Jersey <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Completions (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015New Jersey Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%Suburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015New Suburban Jersey Completions Class A (12 Average months) Asking Suburban Gross Under Rents ConstructionNew Jersey Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Suburban Asking Net RentSuburban Under ConstructionSuburban Additional RentSuburban Additional Rent25.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate42Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


New York <strong>Office</strong> <strong>Market</strong>New York City continues on its multi-year upward trend.Whether one looks to the successes of residentialdevelopments and the advent of “Billionaires’ Row” along57th Street or to the more than 10 msf of commercialoffice space that will be delivered in the coming years,New York is on a roll. New York City has three distinct officesubmarkets, and that is before venturing to Brooklyn orQueens where the least expensive leasing alternativesare now found. Midtown, Midtown South and Downtowncomprise nearly 450 msf of class A and B space alone.The Midtown class A vacancy rate decreased morethan 100 bps year-over-year to 10.2% at mid-year 2015.Although most submarkets saw a decrease in vacancy,the Grand Central and Times Square South areas did notas several large blocks of space became available duringthe second quarter. Overall, both existing and proposedspace has performed very well with the developmentpipeline attracting several notable tenancies. Skadden,Arps, Slate, Meagher & Flom LLP will continue its marchwestward after the expiration of its current lease in 2020,having committed to 1 Manhattan West in the HudsonYards development. Meanwhile, 1 Vanderbilt (next toGrand Central Station) received a commitment from TDBank. Midtown South keeps its hold on the title of thetightest market of the three as the vacancy rate remainedwell below 10%, at a relatively stingy 6.8%. Blocks of classB space in the Madison Square/Park Avenue South andHudson Square/Tribeca submarkets became available, butleasing activity was relatively tepid during the first half ofthe year. One notable transaction, however, was PayPalsigning a 12-year lease at 95 Morton Street for 95,000 sf,leaving its current location at 625 Avenue of the Americas.Downtown class A space is still the value play for tenantswith the direct asking rent standing at $66.14 psf, nearly$19 psf cheaper than the Midtown class A average.Overall, New York continues to be the place to be, andwhile there is a potential for a development overhang,the city’s continued job growth should easily outstrip thedevelopment pipeline.$0Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Address / Complex Tenant Size (sf) Asking Net RentAdditional Deal Rent Type1 200 Park Avenue MetLife 550,000 New2 1 Manhattan W. Skadden, Arp, Slate, Meagher & Flom 550,000 New3 1675 Broadway Publicis Groupe 506,000 Renewal/Expansion4 101 Park Avenue Morgan Lewis & Bockius 300,000 Renewal/Expansion5 450 W. 33rd Street IPG 278,000 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)8,0004,0008,000 6,0002,0006,000 4,00004,000 2,000-2,0002,0000-4,000-2,000 0-6,000-2,000 -4,000-8,000-4,000 -6,000-6,000 -8,000-8,00010,00012,00012,000 8,00010,00010,0006,0008,0008,0004,0006,0006,0002,0004,0004,00002,0002,0000$ psf$ psf8,0006,00012,000$ psf$90$800$90$70$80$90 $60$70$80 $50$60$70 $40$50$60 $30$40$50 $20$30$40 $10$20$30 $0$10$20$0$10New York <strong>Office</strong> Absorption & Vacancy RatesNew York <strong>Office</strong> Absorption & Vacancy RatesNew York <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Absorption (12 months)VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Absorption (12 months)VacancyNew York <strong>Office</strong> Space Under Construction & CompletionsVacancyNew York <strong>Office</strong> Space Under Construction & CompletionsNew York <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Completions (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015New York Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201512.0%14.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%2.0% 4.0%0.0% 2.0%Completions (12 months)Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015New York Completions Class (12 A months) Average Asking Gross Under Rents ConstructionNew York Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Asking Net RentUnder ConstructionAdditional Rent14.0%0.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 43


Oakland <strong>Office</strong> <strong>Market</strong>Oakland’s office market vacancy continues to fall, leavingfewer quality leasing opportunities for tenants andputting upward pressure on rents. Demand continues toincrease, resulting in year-over-year asking rent growthof roughly 29% to $37.79 psf full-service from $29.34 psffull-service for class A buildings in the Oakland CBD. Thelatest figure understates the true average rent, as manyclass A landlords in the CBD are not quoting rents in thislandlord-driven market. Demand, coupled with a generallack of tenants relocating out of the market, resulted in morethan 488,000 sf of absorption in the first six months of 2015.Positive gains are expected to continue through the secondhalf of this year.Migrations are steady as San Francisco tenants continue totour through the Oakland CBD. Expansions within the CBDare prolific as tenants secure a foothold in the market inthe face of growing rental rates. However, Oakland officeconstruction has remained sporadic in recent years. Tenantdemand is strong, but construction costs are too high andasking rents are not high enough. Nevertheless, a significantnumber of residential projects are expected to break groundduring the second half of 2015. Projected to have some ofthe highest forecasted rental growth in the Bay Area, marketrents in Oakland will likely continue to rise in the near term.Wareham Development’s 740 Heinz Avenue is scheduledfor completion in the third quarter of 2015. The 105,000-sfoffice/lab building, located in West Berkeley’s Aquatic Park,represents the newest office product to hit the market since2013.The perception of Oakland has changed. Oakland is now anacceptable first-choice location for innovative and creativetenants. Not only has the market become a lower-costalternative to San Francisco, but it is rapidly becoming apreferred choice for tenants. Vision is turning into actionin Oakland, and the local vibrancy is converting intoinstitutional reality. Investors have changed their mentalityfrom “Oakland, no way” to “we’ll make it work” and “thenumbers will pencil.”Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 1000 Broadway Oakland Unified School District 124,500 Renewal2 5800 Hollis Street Stanford Health Care 98,500 New3 555 12st Street Matson Navigation 52,600 Renewal4 2100 Franklin Street Pandora 49,300 Sublease5 2101 Webster Street iParadigms (Turnitin) 48,900 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf400300400400 200300300 1002002000100-1000140 180160180 1201401601001201408010012060801004060802040 0602040020$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5Oakland <strong>Office</strong> Absorption & Vacancy RatesOakland <strong>Office</strong> Absorption & Vacancy RatesOakland <strong>Office</strong> Space Under Construction & CompletionsOakland Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201514.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%8.0% 12.0%14.0%6.0% 10.0%12.0%4.0% 8.0%10.0%2.0% 6.0%8.0%-2004.0%00.0% 6.0%-100Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%-100-200 Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Oakland Downtown Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban Absorption & Completions(12 months)180 Downtown VacancySuburban Vacancy160$400Oakland <strong>Office</strong> Absorption & Vacancy RatesOakland <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionOakland Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionOakland Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent18.0%16.0%Vacancy Vacancy Rate Rate Vacancy Rate44Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Orange County <strong>Office</strong> <strong>Market</strong>Orange County continued to see increasing demand anda tightening supply of office space that has resultedin rising prices. This thriving hub for financial services,information technology, logistics and health care hascontinued to attract a talented workforce. The region’sideal geography and bustling tourism trade contributeto a high quality of life. Orange County boasts one of thelowest unemployment rates in California, at 4.3% as of June2015. Year-to-date, unemployment levels are on track to besignificantly lower than the previous year for the county.As of mid-2015, Orange County’s office vacancy reached9.5%, marking a sharp year-over-year decrease from 11.5%at mid-year 2014. As vacancy tightens, rental rates areregistering a robust increase. At the end of the secondquarter of 2015, the average asking rental rate for all classeswas $26.16 psf full-service gross (FSG), up from $24.12 psfFSG one year earlier. Rents are increasing each quarteracross every major submarket in the county with the highestrents found in the Airport area at $29.04 psf FSG. Totalnet absorption of more than 2.5 msf was recorded for the12-month period ending June 30, 2015.There are currently seven investment-grade office propertiesunder construction in the county, amounting to nearly711,000 sf of new inventory that will be added, almostentirely in the suburban markets. Approximately 73% ofthe new inventory will be available to the market withthe remainder preleased. The largest project is locatedin Irvine. The 425,000-sf, LEED-Gold development has noprelease commitments. As of the mid-point of 2015, therehas been one new office delivery, also a LEED Gold-certifieddevelopment, totaling 21,300 sf. The larger volume of newconstruction that was delivered in nearly equal proportionbetween the downtown area and the suburbs in 2014 isnot expected in 2015; however, developers are still movingforward, albeit cautiously since the recession. There is nearly6.5 msf of proposed office development on record in thecounty.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentSuburban Asking Net RentDeal Type14000 MacArthur Boulevard,Newport BeachHyundai Capital America 177,000 New2 5515 E. La Palma Avenue, Anaheim Safran 87,000 New3 9701 Jeronimo Road, Irvine Unisys 83,100 Renewal4 3800 W. Chapman Avenue, Orange American Advisors Group 71,500 Renewal526642 Towne Centre Drive,Foothill RanchAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,400 1,800700 9001,000600 800900500 700800400 600700300 500600200 400500100 300400200 03001002000100$ psf1,000 800$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5$5 $0Orange County <strong>Office</strong> Absorption & Vacancy RatesOrange County <strong>Office</strong> Absorption & Vacancy Rates900 Orange County <strong>Office</strong> Space Under Construction & CompletionsOrange County Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015LoanDepot 67,700 Renewal14.0% 18.0%1,200 1,6001,80012.0% 16.0% 18.0%1,000 1,4001,60010.0% 14.0% 16.0%1,200 8001,4008.0% 12.0%14.0%1,000 6001,2006.0% 10.0%12.0%400 8001,0008.0%2004.0%60010.0%8006.0%400 02.0% 8.0%600-2000.0% 4.0%6.0%400Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%4.0%0200 Downtown Absorption (12 months)Suburban Absorption (12 months)-200 Downtown VacancySuburban Vacancy0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Orange Downtown County Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions(12 months)1,000 Downtown VacancySuburban Vacancy$ psf$ psf1,8001,600$350Orange County <strong>Office</strong> Absorption & Vacancy RatesOrange County <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionOrange County Class A Average Asking Gross RentsOrange County Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional RentMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 4518.0%16.0%Vacancy Vacancy Rate Rate Vacancy Rate


Orlando <strong>Office</strong> <strong>Market</strong>Orlando’s office market consists of the Orlandometropolitan area as well as the coastal submarkets:Titusville/Cape Canaveral, Cocoa Beach and Melbourne.Vacancy rates in this market are tightening significantly.Downtown vacancy is down 170 bps year-over-year andsuburban vacancy is down 160 bps year-over-year. Askingrental rates for downtown class A space are up slightly, to$25.55 psf gross at mid-year 2015 from $25.02 psf gross atmid-year 2014. Suburban asking rates are also increasing,having climbed to $22.19 psf gross at mid-year 2015 from$21.29 psf gross in the second quarter of 2014.No new office developments have been completed inDowntown Orlando in the past several years. There werealso no projects under construction as of mid-year 2015.However, 252,000 sf of office space was under constructionin suburban Orlando (34% preleased), up from 172,000 sf ayear earlier. The largest suburban project under constructionis the 92,000-sf GuideWell Innovation Center at Lake Nona,a multi-tenant building geared toward life sciences, healthinnovation and technology companies and scheduled fordelivery in late 2015.Both downtown and suburban Orlando markets sawpositive and increasing absorption during the four quartersending at mid-year 2015. Suburban Orlando recorded morethan 577,000 sf of positive absorption during that period.Downtown Orlando is also registering positive absorption,with more than 227,000 sf absorbed during the same period.These increases represent a significant departure from thenegative absorption of 173,000 sf recorded in the previous12-month period. Diamond Resorts International renewed its30,000-sf-plus lease and expanded into an additional 54,000sf at SouthPark Center for a total of more than 85,000 sf. WellsFargo’s renewal of its 81,900-sf lease at One Orlando Centerwas another large lease transaction in the first half of 2015.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf700600500 700600700500700 600400600 500300500 400200400 300100300 2000200 1001000$25$30$30 $20$25$25 $15$20$20 $10$15Orlando <strong>Office</strong> Absorption & Vacancy RatesOrlando <strong>Office</strong> Absorption & Vacancy RatesOrlando <strong>Office</strong> Space Under Construction & CompletionsOrlando Class A Average Asking Gross Rents14.0% 18.0%400 60070012.0% 16.0% 18.0%300 50060010.0% 14.0% 16.0%200 4005008.0% 12.0%14.0%100 3004006.0% 10.0%12.0%200 03008.0%-1004.0%10.0%2006.0%-20002.0% 8.0%100-300 -1000.0% 4.0%6.0%0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%4.0%-200-100 Downtown Absorption (12 months)Suburban Absorption (12 months)-300 Downtown VacancySuburban Vacancy-200Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-300 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Orlando Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban Absorption & Completions(12 months)700 Downtown VacancySuburban Vacancy$300Orlando <strong>Office</strong> Absorption & Vacancy RatesOrlando <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionOrlando Class A Average Asking Gross RentsOrlando Class A Average Asking Gross Rents18.0%16.0%Vacancy Vacancy Rate Rate Vacancy Rate$ psf$15 $5$10$10 $0$5$5 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 SouthPark Center Diamond Resorts 85,900 Renewal/Expansion2 One Orlando Center Wells Fargo 81,900 Renewal3 Maitland Colonnades Sprint 44,800 New4 University Corporate Center Northrop Grumman 36,100 Renewal5 Bank of America Center CareerSource 22,100 New46Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Philadelphia <strong>Office</strong> <strong>Market</strong>Philadelphia, the fifth-largest city in the United States, liesin the seventh-largest metropolitan area in the country.Comprising 13 counties, the Philadelphia region stretchesinto northern Delaware, southern New Jersey and centralPennsylvania, while also running up the I-81 corridor intonortheast Pennsylvania. The office market consists of morethan 312 msf. Class A office space totaling 130 msf accountsfor 42% of the market. Within the CBD, class A space makesup 58% of the total office market. In the suburbs, this figuredrops to 39%.The Philadelphia market has seen an overall drop in vacancyacross all building classes; however, things played outdifferently in the CBD versus the suburbs. For all buildingclasses, the CBD posted a vacancy rate of 9.5% at mid-year2015, up from 8.6% at the same time in 2014, while vacancyin the suburbs declined to 10.6% from 11.6% over the sameperiod. The Philadelphia market saw class A vacancy tightenas it dropped 40 bps year-over-year in the suburbs to 12.8%,and to 9.9% from 11.2% in the CBD. The CBD recorded12-month positive absorption of nearly 492,000 sf, whichrepresents a 54% increase over the previous year. Absorptionalso increased by 72% in the suburbs to nearly 1.4 msf.Class A office space registered a small overall decrease inaverage gross rent to $26.25 psf at mid-year 2015 from$26.88 psf at mid-year 2014; however, CBD and suburbanrental rates went in opposite directions. In the CBD, wherethe market is primarily landlord-driven, rents increasedto $28.60 psf from $27.07 psf whereas in the suburbs,where specific markets are currently soft, rents dropped to$24.65 psf from $26.69 psf. Space under construction in theCBD jumped 64% to nearly 2 msf from 1.2 msf, with 87%preleased as of mid-year 2015. In the suburbs, total squarefeet under construction fell 97.7% to 32,500 sf with 7,500sf (23%) preleased at the same point. During the 12-monthperiod leading up to mid-year 2015, nearly 444,000 sfof office space in the CBD was completed. The suburbsdelivered 751,000 sf of new office space compared with639,500 sf in the previous year.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 1865 Marlton Pike, Cherry Hill, NJ Clinical Health Care 150,000 New2 40 Liberty Boulevard, Malvern The Vanguard Group 126,000 New3101-163 E. County Line Road,HatboroABB Process Automation 115,000 Renewal4 1900 <strong>Market</strong> Street Independence Blue Cross 112,000 New5 401 <strong>Market</strong> Street American Bible Society 93,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,000 2,5002,5001,500 2,0002,0001,000 1,5001,5001,000 5001,000500 0$ psf5000$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Philadelphia <strong>Office</strong> Absorption & Vacancy Rates1,50012.0%2,00014.0%1,000 Philadelphia <strong>Office</strong> Absorption & Vacancy Rates10.0%2,000 1,50050012.0% 14.0%8.0%1,500 1,000010.0% 12.0%1,000 5006.0%-5008.0% 10.0%50004.0%-1,0006.0% 8.0%-500 0-1,5002.0%4.0% 6.0%-1,000 -500-2,0000.0%-1,000 -1,500 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-1,500 -2,000 Downtown VacancySuburban Vacancy0.0% 2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-2,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Philadelphia Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)2,500 Downtown VacancySuburban Vacancy$ psf$ psf2,000$300Philadelphia <strong>Office</strong> Absorption & Vacancy RatesPhiladelphia <strong>Office</strong> Space Under Construction & CompletionsPhiladelphia <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionPhiladelphia Class A Average Asking Gross RentsPhiladelphia Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionPhiladelphia Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional RentMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 4714.0%Vacancy Vacancy Rate Rate Vacancy Rate


Pittsburgh <strong>Office</strong> <strong>Market</strong>Pittsburgh’s office market, consisting of more than 82 msfacross five counties, ended the second quarter of 2015with a vacancy rate of 8.2%, up 20 bps from 8% in the secondquarter of 2014. This increase marked the fifth-consecutiveyear in which the vacancy rate has been below 10%. Yearover-yearoffice leasing activity was vibrant at mid-year 2015with 1.2 msf of positive absorption, which represented asignificant increase compared with the previous 12-monthperiod. Downtown outperformed the suburban markets byslightly more than 72,000 sf.Notable lease transactions in the first half of 2015 includedPPG Industries’ 348,000-sf renewal and expansion at PPGPlace in Pittsburgh’s CBD, Rice Energy’s new headquarterslease for 150,000 sf at Zenith Ridge III, a class A officebuilding currently under construction in SouthpointeBusiness Park, and Chevron’s 120,000-sf lease at 700Cherrington Parkway in Moon Township. Meanwhile, Applehas been looking to expand its presence in the city andwill be taking approximately 26,000 sf at Three Crossings, amixed-use complex in the Strip District, upon completion.Average asking rental rates for class A office space increasedto $26.10 psf in the second quarter of 2015 from $25.47 psf ayear earlier, representing another year of increases. Movingforward, asking rental rates may continue to increase;however, rental rates should remain stable as a result ofthe influx of available space on the horizon. During the firsthalf of 2015, several of the region’s largest corporationsannounced plans to consolidate a total of approximately1.4 msf over the next three years, primarily in the Downtownmarket. Additionally, another 1.4 msf of office space underconstruction is scheduled for completion by year-end 2015.These factors will have an impact on the region’s officemarket conditions in the near term, shifting leverage fromthe landlord to the tenant and providing opportunities forlarge users to establish a presence in new or existing space.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)8001,0001,000 600800$ psf$ psf$ psf1,000800 400600600 20040040002001,2001,4001,0001,400 1,2008001,200 1,0006001,000 800400800 600200600 4000400 2002000$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10Pittsburgh <strong>Office</strong> Absorption & Vacancy RatesPittsburgh <strong>Office</strong> Absorption & Vacancy RatesPittsburgh <strong>Office</strong> Space Under Construction & CompletionsPittsburgh Class A Average Asking Gross Rents7.0% 9.0%6.0% 8.0% 9.0%5.0% 7.0% 8.0%4.0% 6.0%7.0%3.0% 5.0%6.0%2.0% 4.0%5.0%1.0% 3.0%4.0%-2002.0%0.0% 3.0%0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20151.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 2.0%0-200 Downtown VacancySuburban Vacancy0.0%1.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Pittsburgh Downtown Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)1,400 Downtown VacancySuburban Vacancy$300Pittsburgh <strong>Office</strong> Absorption & Vacancy RatesPittsburgh <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionPittsburgh Class A Average Asking Gross RentsPittsburgh Class A Average Asking Gross Rents9.0%8.0%Vacancy Vacancy Rate Rate Vacancy Rate$10 $0$5$5 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 1 PPG Place PPG Industries Inc. 348,000 Renewal/Expansion2 Zenith Ridge III Rice Energy 150,000 New3 700 Cherrington Parkway Chevron Corp. 120,000 New4 Tower Two-Sixty JLL 54,400 New5 Foster Plaza 9 CA Technologies 22,100 New48Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Sustained employment growth and new constructiondrove robust activity in the Raleigh-Durham officemarket in the first half of 2015. Net absorption surgedto more than 2.1 msf in the 12-month period ending atmid-year 2015 – a level of activity not witnessed sincethe late 1990s. In Cary, Highwoods Properties completedtwo buildings totaling 427,000 sf for MetLife as well asa 75,000-sf build-to-suit for Biologics. Three speculativebuildings were also delivered, all of which were at least50% preleased: GlenLake V (167,000 sf) in the Glenwood/Creedmoor submarket, Charter Square (243,000 sf) inDowntown Raleigh and Alliance One (146,000 sf) in WestRaleigh.Raleigh-Durham <strong>Office</strong> <strong>Market</strong>Vacancy ended the second quarter of 2015 at 13.4%, down190 bps during the last 12 months and at its lowest levelsince 2007. Class A vacancy fell to just 9.1%. A dwindlingsupply of quality leasing options, combined with the higherprice point of new construction, placed upward pressureon rental rates. Class A asking rates rose to $22.98 psf inthe second quarter, up by 7.5% in the last 24 months anda record high for the region. In Downtown Raleigh, theaverage class A asking rate jumped to $28.08 psf, up 27%in the last 24 months. Asking rental rates are poised toincrease further heading into 2016. Rates for speculativeprojects still underway range from $24.95 to $34.50 psfwith the average at $30.80 psf. Additional buildingsare expected to break ground before the end of 2015,including the second Charter Square tower (250,000 sf)and Edison (250,300 sf) in Downtown Raleigh and MidtownPlaza (330,000 sf) at North Hills on Six Forks Road. Allscriptspreleased 250,000 sf at Midtown Plaza, but will vacateapproximately 305,000 sf at the Forum office park just a fewmiles away.Demand from office tenants is projected to be strongthrough at least 2016. Unemployment has fallen to prerecessionlevels, and employers continue to be drawn tothe region for its quality of life, low cost of living and doingbusiness, and highly educated workforce.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Midtown Plaza Allscripts 250,000 New2 GlenLake VI PRA International 46,300 Expansion3 SouthCourt Blue Cross Blue Shield of NC 50,000 New4 Berrington Center Quintiles 31,600 New5 North Hills Tower Two G&S Business Solutions 25,500 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,500 2,0002,0001,000 1,5001,5001,000 5001,000500 01,4001,6001,0001,2001,4008001,0001,2006008001,000400$ psf600800200400 06002004000200$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Raleigh-Durham <strong>Office</strong> Absorption & Vacancy RatesRaleigh-Durham <strong>Office</strong> Absorption & Vacancy Rates1,600 Raleigh-Durham <strong>Office</strong> Space Under Construction & Completions1,400 1,800Raleigh-Durham <strong>Office</strong> Space Under Construction & Completions1,6001,800 1,200Raleigh-Durham Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%50010.0%-50000.0% 5.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150 Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-500 Downtown VacancySuburban Vacancy0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-500 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Raleigh-Durham Downtown Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions(12 months)1,800 Downtown VacancySuburban Vacancy$ psf$ psf2,000$300Raleigh-Durham <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionRaleigh-Durham Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionRaleigh-Durham Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 49


Reno <strong>Office</strong> <strong>Market</strong>Reno is a tertiary office market and, by definition, growthis slower than in other markets. For the past few years,nearby primary and secondary markets have improvedand even thrived while Reno remained stagnant. Thecity’s growth has, until recently, been slow at best. Reno’soffice market vacancy at mid-year 2015 was 17.1%, downfrom 19% one year earlier. This decrease represents netabsorption of nearly 23,000 sf in the past year. Much of theactivity has been from the medical sector with RenownHealth taking 80,000 sf for administration purposes in thesecond quarter of 2015 and New York-based ArroHealthleasing 30,000 sf for a customer-support center. Largevacancies in the past 12 months included MorrisonUniversity vacating 25,000 sf and WMS Gaming returning54,000 sf to the marketplace. The big drivers of leasingactivity have been tenants of 10,000 sf or less.The 2.2-msf Meadowood submarket is the largest in Reno,and it was the biggest winner during the 12-month periodending at mid-year 2015. Vacancy decreased 500 bps to12.2% from 17.2%, representing net absorption of 111,000 sf.The biggest lease transaction involved the Coral Academy,which occupied 27,000 sf. The remainder of leasing activityinvolved sub-10,000-sf tenants. The Central Reno submarketrecorded negative absorption of 34,000 sf. This submarketrepresents mostly older class B and C buildings thatsuffered during the Great Recession and, until the lease ratespread between class A, B and C product improves, a flightto quality will continue.Reno’s historic vacancy rate is 15%. As market vacancybegins to stabilize at that point, more developers willconsider speculative construction. McKenzie Propertiesplans to break ground in the first quarter of 2016 on a40,000-sf building with a 13,000-sf prelease commitmentfrom a medical group. This project represents the first newoffice building of any decent size in Reno since 2009.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)$ psf$ psf$ psf150 200200100 150150100 5010050 0Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)20050-5000-50-501614161216141014128121061084$2562840624020$20 $25$25$15 $20$20$10 $15$15$10 $5$10$0 $5$5$0Reno <strong>Office</strong> Absorption & Vacancy RatesReno <strong>Office</strong> Absorption & Vacancy RatesReno <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months)Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Reno <strong>Office</strong> Absorption Space (12 months) Under Construction Suburban & Absorption Completions (12 months)Downtown VacancySuburban VacancyReno <strong>Office</strong> Space Under Construction & CompletionsReno <strong>Office</strong> Space Under Construction & CompletionsReno Class A Average Asking Gross RentsReno Class A Average Asking Gross Rents25.0%20.0% 25.0%25.0%15.0% 20.0%20.0%10.0% 15.0%15.0%5.0% 10.0%10.0%0.0% 5.0%5.0%0.0%0.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionReno Class A Average Asking Gross RentsSuburban Completions (12 months)Suburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 10315 Professional Circle Renown Health 63,000 New2 1450 Vassar Street ArroHealth 30,000 New3 6275 Neil Road Coral Acadamy of Science 27,000 New4 50 Liberty Street Renown Health 17,000 New5 10615 Professional Circle Coupa 12,000 New50Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Sacramento <strong>Office</strong> <strong>Market</strong>Sacramento Valley’s office market is inching closer to whereit was before the recession started in 2008. Since thebeginning of 2012, the market has experienced 2.5 msf ofpositive net absorption – and more than 600,000 sf duringthe past 12 months, ending the second quarter of 2015 witha vacancy rate of 14.2%. This is the lowest vacancy rate theSacramento Valley office market has recorded since the thirdquarter of 2008.Moving forward in 2015, observers will pay close attentionto the Downtown Sacramento submarket. With the NBA’sSacramento Kings’ new arena breaking ground in the fourthquarter of 2014 at Downtown Plaza, the downtown districtis preparing for a rebirth. Over the past 12 months, the arenahas already started to have a positive effect on the 10-msfdowntown office market. It recorded the highest amount ofoccupancy in all of the Sacramento Valley during the past 12months, with more than 170,000 sf of positive absorption.The team’s owners have plans to develop up to 475,000 sf ofoffice space adjacent to the arena.The Highway 50 corridor has been very active to date in2015, recording 223,000 sf of positive absorption duringthe first six months of the year. This absorption was largelydue to Blue Shield of California leasing a total of 174,000 sfin the submarket. After experiencing negative absorptionfor the first time in 15 quarters during the fourth quarterof 2014, the Roseville/Rocklin submarket was back in theblack in each of the first two quarters of 2015. Despite thenegative absorption during late 2014, it has recorded 44,000 sfof positive absorption in the last 12 months and 1.3 msf ofpositive absorption dating back to 2012.Moving into and beyond the second half of 2015, thechallenge for the Sacramento Valley office will be a lack ofmajor job generators to feed the local economy. The stategovernment and the health care industry will continue todrive the market.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 3300 Zinfandel Drive Blue Shield of California 128,100 New2 10834 International Drive Blue Shield of California 46,400 New3 555 Capitol Mall Murphy, Austin, Adams, Shoenfield LLP 14,200 New4 2901 Douglas Boulevard VALIC 10,000 Renewal5 2180 Harvard Street Alliant 9,500 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)1,000 1,500Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf200 250250150 200200100 150150100 5010050 0500$30$35$25$35 $30$20$30 $25$15$25 $20$10$20 $15$5$15 $10$0$10 $5$5 $0Sacramento <strong>Office</strong> Absorption & Vacancy RatesSacramento <strong>Office</strong> Absorption & Vacancy RatesSacramento <strong>Office</strong> Space Under Construction & CompletionsSacramento Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0% 20.0%1,50014.0% 18.0%20.0%1,000 50012.0% 16.0%18.0%1,00010.0% 14.0%16.0%500 08.0% 12.0%14.0%5006.0% 10.0%12.0%-50004.0% 8.0%10.0%02.0% 6.0%8.0%-1,000 -5000.0% 4.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20156.0%-500(12 months)Downtown Absorption2.0%(12 months) 4.0%Suburban Absorption-1,000 Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-1,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Sacramento Absorption <strong>Office</strong> (12 months) Space Under Construction Suburban & Absorption Completions (12 months)250 Downtown VacancySuburban Vacancy$ psf$ psf1,500$350Sacramento <strong>Office</strong> Absorption & Vacancy RatesSacramento <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSacramento Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionSacramento Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 51


San Diego’s office market is moving forward withconfidence, supported by its diverse industries anddesirable geography. The region is a thriving hub forbiotechnology, telecommunications and tourism, whichhave contributed to the resilience of the market since theGreat Recession. There is strong demand for space fromhealth care innovators, independent research institutesand sectors that work closely with the local military. Theunemployment rate for San Diego County, as of June 2015,dropped to 5%. Year-to-date, unemployment levels aremarkedly lower in comparison with the previous year.The San Diego County office vacancy rate dropped to10.7% at mid-year 2015, tightening significantly from12.3% at mid-year 2014. Rental rates are responding tothis movement and, by the end of the second quarter of2015, the average asking rental rate for all classes reached$30 psf full-service gross (FSG), up from $27.84 psf FSG oneyear earlier. Rents are experiencing a quarter-over-quarterincrease across every major submarket in the county. Thehighest rents, by far, are found in the Central Coast area,at $36.12 psf FSG. The North County Coastal area and theDowntown area achieved the next highest rents, whilethe Central Cities experienced the greatest gain over theprevious year. Total net absorption for the 12-month periodending at mid-year 2015 was nearly 1.9 msf.The San Diego office market had six investment-gradeoffice properties under construction at the midpoint of2015. These projects amount to more than 635,000 sfof new inventory, approximately 89% of which will beavailable to the market with the remainder preleased. TheDowntown market saw the completion of a 320,000-sf,LEED-Gold certified office tower, which is fully occupiedby Sempra Energy. There is currently more than 8 msf ofproposed office development on record in the county.A gradual increase in new construction is expected tocontinue through 2015 and well into 2016.San Diego County <strong>Office</strong> <strong>Market</strong>Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 15051 Avenue of Science Daybreak 70,000 New2 4767 Nexus Centre Drive Senomyx Inc. 65,300 Renewal3 8954 Rio San Diego Drive Kaiser Foundation Healthcare 62,100 Renewal4 10636 Scripps Summit Court MedImpact 47,200 New5 11149 N. Torrey Pines Road, La Jolla Synthetic Genomics Inc. 44,800 RenewalAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)1,500 2,0001,000600800$ psf80040060060020040040002002000$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5San Diego County <strong>Office</strong> Absorption & Vacancy RatesSan Diego County <strong>Office</strong> Absorption & Vacancy RatesSan Diego County <strong>Office</strong> Space Under Construction & Completions1,0001,200San Diego County <strong>Office</strong> Space Under Construction & Completions1,200 8001,000San Diego County Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201516.0% 20.0%2,00014.0% 18.0%20.0%1,000 1,50012.0% 16.0%18.0%1,50010.0% 14.0%16.0%1,000 5008.0% 12.0%14.0%1,0006.0% 10.0%12.0%500 04.0% 8.0%10.0%5002.0% 6.0%8.0%-50000.0% 4.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20156.0%0(12 months)Downtown Absorption2.0%(12 months) 4.0%Suburban Absorption-500 Downtown VacancySuburban VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20150.0%2.0%-500 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015San Downtown Diego Absorption County <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions(12 months)1,200 Downtown VacancySuburban Vacancy$ psf$ psf2,000$400San Diego County <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSan Diego County Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionSan Diego County Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy Rate52Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


San Francisco <strong>Office</strong> <strong>Market</strong>The San Francisco office market showed no signs ofslowing down as the first half of 2015 came to a close.Unemployment fell to a historic low of 3.5% at mid-year 2015from the previous historic low of 4.4% in the second quarterof 2014. Vacancy continued to decrease, dropping 110 bps to5.3% at mid-year 2015 from mid-year 2014. Leasing activityremained strong with more than 4.6 msf in transactionsduring the first half of 2015.Much like the first half of 2014, technology companiescontinued to be the driving force in the market. Four ofthe top five leases in the first half of 2015 belonged totech companies looking to expand their footprint in thecity. Stripe had the largest deal with a 300,000-sf preleaseat 510 Townsend Street. Uber increased its presence bytaking 172,800 sf at 555 <strong>Market</strong> Street, while Fitbit signeda new 163,600-sf lease at 199 Fremont Street. Both Orrick,Herrington & Sutcliffe and Advent Software renewed theirleases; Orrick at 405 Howard Street for 168,200 sf and AdventSoftware at 600 Townsend Street for 129,500 sf.There has been a lot of speculation regarding subleaseavailability in San Francisco. The market has not witnessed aninflux of sublease space to date. At the close of the secondquarter of 2015, 1.4 msf of sublease space was available onthe market. Sublease availability has averaged approximately1.3 msf over the past five years. Unlike the dot-com bustin the early 2000s, the majority of companies are notsubleasing their existing spaces due to downsizing, butinstead are either banking space for future growth or simplyoutgrowing their current spaces and relocating.Rental rates continue to increase steadily; average classA asking rental rates are currently at $67 psf full-service,compared with $57 psf at mid-year 2014. With more than20 tenants seeking 100,000 sf or more during the next 12 to24 months, the San Francisco office market is expected toremain extremely active in the second half of 2015.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)2,5003,0003,000 2,0002,5002,500 1,5002,0002,000 1,0001,5001,5001,0001,0000500$ psf$ psf$ psf3,000500004,0003,5004,0003,0004,0003,5002,5003,5003,0002,0003,0002,5001,5002,5002,0001,0001,5002,000 5001,0001,500 05001,0000500$700$60$70$50$70 $60$40$60 $50$30$50 $40$20$40 $30$10$30 $20$0$20 $10San Francisco <strong>Office</strong> Absorption & Vacancy RatesSan Francisco <strong>Office</strong> Absorption & Vacancy RatesSan Francisco <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Downtown VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Downtown VacancySan Francisco <strong>Office</strong> Space Under Construction & CompletionsDowntown VacancySan Francisco <strong>Office</strong> Space Under Construction & CompletionsSan Francisco <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Downtown Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015San Francisco Class A Average Asking Gross Rents16.0%12.0%14.0% 16.0%10.0%12.0% 14.0%8.0%10.0% 12.0%6.0%8.0% 10.0%4.0%6.0% 8.0%2.0%4.0% 6.0%0.0%2.0% 4.0%0.0% 2.0%Downtown Completions (12 months)Downtown Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015San Downtown Francisco Completions Class (12 A months) Average Asking Downtown Gross Under Rents ConstructionSan Francisco Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 201516.0%14.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate$10 $0Downtown Asking Net RentDowntown Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015$0Downtown Asking Net RentNOTABLE LEASE TRANSACTIONS BY SIZE - FIRST HALF 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Address / Complex Tenant Size Downtown (sf) Asking Net RentDeal TypeDowntown Additional Rent1 510 Townsend Street Stripe 300,000 New2 555 <strong>Market</strong> Street Uber 172,800 New3 405 Howard Street Orrick, Herrington & Sutcliffe 168,200 Renewal4 199 Fremont Street Fitbit 163,600 New5 600 Townsend Street Advent Software 129,500 RenewalMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 53


San Mateo <strong>Office</strong> <strong>Market</strong>San Mateo County boasted the lowest unemploymentrate in California at 3.3% as of June 2015. Year-overyear,employment grew by nearly 17,000 jobs in SanMateo County. The positive employment figures helpedincrease occupancy by almost 190,000 sf in the marketduring that time period. The San Mateo County officemarket ended the second quarter of 2015 with an 8.9%vacancy rate, down 70 bps year-over-year. The majority ofthe growth over the past year has come from expandingtenants that already have a presence in San Mateo County.However, new construction projects in south San MateoCounty have received a lot of attention from Silicon Valleycompanies. In downtown Redwood City, Silicon Valleybasedtech company Box Inc. preleased the entire 300,000-sf Crossing/900 office development, which is due to deliverin the second half of 2015. Another Silicon Valley company,EMC Corp., preleased 151 Commonwealth Drive, a 260,000-sf new development in Menlo Park. After decreasing forthe first time in 15 quarters in the fourth quarter of 2014,average asking rental rates for all classes increased in thefirst half of 2015, ending at $46.80 psf full service.Due to an increase in demand from technology tenants,development activity in San Mateo County is the mostactive it has been since the dot-com days in the early2000s. More than 460,000 sf has been delivered duringthe past 12 months, while more than 1 msf is currentlyunder construction within the county. That total does notinclude the more than 7 msf of potential future projectsbeing considered within the borders of San Mateo County;however, the majority of these projects are at least 24months from breaking ground.San Mateo County will continue to be a landlord’s market asdemand from tenants remains extremely strong, enablinglandlords to increase asking rates. With tenants totalingnearly 3 msf looking for space within the county during thenext 24 months, a strong second half of 2015 is expected.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)800San Mateo <strong>Office</strong> Absorption & Vacancy Rates12.0%70090014.0%600 San Mateo <strong>Office</strong> Absorption & Vacancy Rates80010.0%90012.0% 14.0%5007008008.0%40060010.0% 12.0%7003005006.0%6002008.0% 10.0%4005001004.0%3006.0% 8.0%40002002.0%-1003001004.0% 6.0%-2002000.0%0100 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0%-100 Downtown Absorption (12 months)Suburban Absorption (12 months)0-200 Downtown VacancySuburban Vacancy0.0% 2.0%-100 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-200 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015San Downtown Mateo Absorption <strong>Office</strong> (12 Space months) Under Construction Suburban Absorption & Completions(12 months)800 Downtown VacancySuburban VacancySquare Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf900700800600800700500700600400600500300500400200300400 100200300 01002000100$600$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20San Mateo <strong>Office</strong> Absorption & Vacancy RatesSan Mateo <strong>Office</strong> Space Under Construction & CompletionsSan Mateo <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionSan Mateo Class A Average Asking Gross RentsSan Mateo Class A Average Asking Gross RentsSan Mateo Class A Average Asking Gross Rents14.0%Vacancy Vacancy Rate Rate Vacancy Rate$20 $10$0$10 $0Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 2955 Campus Drive NetSuite 140,000 Renewal/Expansion2 162 Jefferson Drive, Menlo Park EMC 135,300 New31800 Bridge Parkway,Redwood ShoresDowntown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentDowntown Additional RentSuburban Additional RentNevro Corp. 50,500 New4 2855 Campus Drive GoPro 49,300 New5 700 Saginaw Drive, Redwood City Revolution Medicine 41,900 New54Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Tampa <strong>Office</strong> <strong>Market</strong>The Tampa office market consists of Hillsborough, Pinellas,Pasco, Polk, Hernando, Manatee and Sarasota counties.In the first half of 2015, downtown office vacancy, includingTampa and St. Petersburg, decreased 160 bps year-over-year to11%, and suburban vacancy fell 240 bps year-over-year to 12%.Asking rental rates for downtown class A space rose 5.9% to$25.41 psf gross at mid-year 2015 from $23.99 psf gross at midyear2014. Asking rental rates for suburban class A space wereup 2.3% to $24.49 psf gross at mid-year 2015 from $23.94 psfgross a year earlier.There have been no new office construction projects orcompletions in downtown for many years. However, thissituation could change in the near future with developer JeffVinik’s $1-billion plan to revitalize Downtown Tampa with newoffice buildings and a new University of South Florida (USF)Medical School building on 40 acres in Channelside. The projectwill total 2.5 msf of office, retail, residential and USF campus.Suburban Tampa Bay is experiencing a surge in developmentwith nearly 621,000 sf under construction at mid-year 2015(89.5% preleased), up more than 900% year-over-year. Thelargest suburban project currently under construction is theUSAA’s new corporate offices in Brandon, near the CrosstownExpressway. Phase one of construction, which is 260,000 sfof class A office space, is set to be completed in late 2015.Construction has not yet begun on phase two, which will have160,000 sf of office space.Both downtown and suburban Tampa markets recordedpositive absorption in the 12-month period ending at mid-year2015. Leading the state, suburban Tampa has experiencednearly 1.5 msf of positive absorption since the third quarter of2014, an increase of nearly 300% compared with the previous12-month period. Downtown Tampa’s positive absorptionincreased at a less rapid rate, with 296,000 sf absorbed betweenthe third quarter of 2014 and the second quarter of 2015. Thelargest office lease transaction year-to-date was Citigroup’s135,000-sf lease at Hidden River Corporate Park. Anothernotable transaction was Ashley Furniture’s 67,600-sf lease inCentro Ybor, a former movie theater, for its e-commerce offices.Ashley Furniture is backfilling the Centro Ybor space.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)1,200 1,6001,600 1,000 1,4001,400 1,200 8001,2001,000 6001,000 400 800Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf1,6001,400800 200 600600400 0-200 4000200-2000-200700600700500700 600400600 500300500 400200400 300100300 2000200 1001000$300$25$30$30 $20$25$25 $15$20$20 $10$15$15 $5$10$10 $0$5$5 $0Tampa <strong>Office</strong> Absorption & Vacancy RatesTampa <strong>Office</strong> Absorption & Vacancy RatesTampa <strong>Office</strong> Absorption & Vacancy Rates18.0%16.0%14.0% 18.0%12.0% 16.0% 18.0%10.0% 14.0% 16.0%8.0% 12.0%14.0%6.0% 10.0%12.0%4.0% 8.0%10.0%2.0% 6.0%8.0%0.0% 4.0%6.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20152.0%Downtown Absorption (12 months)Suburban Absorption (12 months) 4.0%Downtown VacancySuburban Vacancy0.0%2.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown Tampa Absorption <strong>Office</strong> Space (12 months) Under Construction Suburban & Absorption Completions (12 months)Downtown VacancySuburban VacancyTampa <strong>Office</strong> Space Under Construction & CompletionsTampa <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionSuburban Completions (12 months)Suburban Under ConstructionTampa Class A Average Asking Gross RentsTampa Class A Average Asking Gross RentsTampa Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Vacancy Vacancy Rate Rate Vacancy RateDowntown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal TypeSuburban Asking Net RentDowntown Additional RentSuburban Additional Rent1 Hidden River Corporate Park Citigroup 135,000 New2 Centro Ybor Ashley Furniture 67,600 New3 Ceridian Building Jabil 51,000 New4 Grand Regency Holland & Knight 48,600 New5 Corporate Center Two BioSpine 30,700 NewMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 55


Washington, DC <strong>Office</strong> <strong>Market</strong>The Metropolitan Washington office market comprises nearly377 msf in the District of Columbia, Northern Virginia andSuburban Maryland. As a whole, the market recorded a 14.8%vacancy rate and 347,000 sf of negative net absorption betweenmid-year 2014 and mid-year 2015. The strongest demand isin newer and class A properties, where the positive growth isoccurring. Likewise, there has not been any softening in class Arental rates. Tenants continue to demonstrate a preference formixed-use and amenity-rich projects near public transportation,often at the expense of traditional suburban office parks. Thistrend, coupled with a paradigm shift in how office space isutilized, has resulted in an overall decline in office occupancyin the region. As well, new office leases, by and large, reflect ashrinking tenant footprint. One bright spot for the aging vacantinventory is that adaptive reuse continues to rise. Recently,suburban office buildings have been converted to schools,residential and other uses.During the last 12-month period, less than 2 msf was delivered inthe region, an amount notably below historical averages. In theprior four reporting periods, the 12-month average was 3.6 msf.Nevertheless, another 8 msf is underway, for delivery duringthe next three years, with an overall prelease rate of 64%. Federalgovernment leasing activity has been moribund. The largest nongovernmentoffice transaction in the first half of 2015 was FannieMae’s prelease for its new headquarters, in which it is slated tooccupy 700,000 sf. As with other major tenants, Fannie Mae willbe reducing its overall occupancy, by roughly 30%, when its newbuilding is completed in 2018.Metrorail’s expansion continues to have a meaningful impact onmarket conditions around the region. The Silver Line opening inVirginia and its future extension to Dulles International Airportand beyond mean that certain tenants now consider beyondthe-Beltwaysubmarkets viable after possibly eschewing thempreviously. Likewise in Maryland, the proposed Purple Lineextension (approved but undergoing design and budget review)is expected to be a catalyst for business expansion in emergingsubmarkets. With the exception of a few select submarketsand prime properties, current market conditions should persistthrough year-end 2015.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 1150 15th Street, NW Fannie Mae 700,000 New2 1215 South Clark Street U.S. Marshals Service 371,000 New3 1301 Pennsylvania Avenue, NW Kirkland & Ellis 187,000 New4 12000 Sunrise Valley Drive Fannie Mae 186,000 New5 2002 Edmund Halley Drive Noblis 160,000 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)6,000 4,0005,0005,0003,0004,0004,0002,0003,0003,0001,0002,0002,00001,0001,0000$ psf$50$60$60 $40$50$50 $30$40$40 $20$30$30 $10$20$20 $10$0$10 $0Washington, DC <strong>Office</strong> Absorption & Vacancy Rates2,5003,50016.0% 20.0%2,000 Washington, DC <strong>Office</strong> Absorption & Vacancy Rates3,00014.0% 18.0%3,50020.0%1,5002,50012.0%3,00016.0%1,00018.0%2,0002,50010.0% 14.0%50016.0%1,5002,0008.0% 12.0%01,00014.0%1,5006.0%-50010.0%50012.0%-1,0001,0004.0% 8.0%010.0%-1,5005002.0% 6.0%-5008.0%-2,00000.0%-1,0004.0%6.0%-500 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-1,5002.0%Downtown Absorption (12 months)Suburban Absorption (12 months)-1,0004.0%-2,000 Downtown VacancySuburban Vacancy0.0%-1,5002.0%Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015-2,000 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Washington, Downtown Absorption DC <strong>Office</strong> (12 months) Space Under Construction Suburban Absorption & Completions(12 months)6,000 Downtown VacancySuburban Vacancy$ psf$ psf3,5003,000Washington, DC <strong>Office</strong> Space Under Construction & Completions5,0006,000$600Washington, DC <strong>Office</strong> Absorption & Vacancy RatesWashington, DC <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionWashington, DC Class A Average Asking Gross RentsWashington, DC Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 2015Suburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionWashington, DC Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent20.0%18.0%Vacancy Vacancy Rate Rate Vacancy Rate56Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


West Palm Beach <strong>Office</strong> <strong>Market</strong>The West Palm Beach office market has not shown the levelsof growth that other South Florida markets are experiencing.However, vacancy is declining. As of mid-year 2015, downtownvacancy was down 120 bps year-over-year to 13.7% whilesuburban vacancy was down 180 bps year-over-year to 15.5%.Average asking rental rates for downtown class A spaceremained nearly flat year-over-year and were at $35.13 psf grossin the second quarter of 2015. Suburban class A space askingrates were up more than 5%, to $33.26 psf gross at mid-year2015 from $31.63 psf gross a year earlier.There has been no new office space construction downtownin Palm Beach County for many years despite low vacancyrates. The City Commission approved a measure in April 2015amending the downtown master plan to allow for additionaldevelopment capacity as well as additional height for class Aoffice and hotel buildings. The city is hopeful that this revisionwill encourage development of more class A office product.Suburban Broward County has had some new constructionwith approximately 140,000 sf completed during the past 12months and 58,000 sf completed in the year prior. One notablecompletion during the last year was Harbourside Place, a mixedusedevelopment that includes nearly 100,000 sf of class A officespace, in Jupiter.Suburban Palm Beach markets witnessed more than734,000 sf of positive absorption between the third quarterof 2014 and mid-year 2015, an increase of more than 50%year-over-year. Downtown West Palm Beach also experiencedpositive absorption, though at a less rapid rate, with 32,500 sfabsorbed during the same period. The largest office leasetransaction in the first half of 2015 was Bank of America’s longtermlease renewal of its 32,000-sf space in the Bank of AmericaTower in Boca Raton. Another notable lease was OlympusInsurance’s new 18,600-sf lease at Corporate Center at theGardens in Palm Beach Gardens, a relocation from Orlando.Downtown Asking Net Rent$0NOTABLE LEASE TRANSACTIONS BY SIZE Suburban - FIRST Asking Net HALF Rent 2015Address / Complex TenantDowntownSize (sf)Asking Net RentDeal Type1 Bank of America Tower Bank of America 32,000 Renewal2 Corporate Center @ the Gardens Olympus Insurance 18,600 New3 Delray <strong>Office</strong> Plaza Lifescape Solutions 14,500 New4 Northbridge Pavilion S&N Debt Solutions 14,000 New5 Golden Bear North Tower Slimfast 13,300 NewAbsorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)$ psf$ psf$ psf800700600 800800 500 700700 400 600200 250250150 200200100 150150100 5010050 0500$35$40$30$35$40$25$30$35$20$25$30$15$20$25$10$15$20$5$10$15$0$5$10$0$5West Palm Beach <strong>Office</strong> Absorption & Vacancy RatesWest Palm Beach <strong>Office</strong> Absorption & Vacancy RatesWest Palm Beach <strong>Office</strong> Space Under Construction & CompletionsWest Palm Beach Class A Average Asking Gross RentsDowntown Asking Net RentDowntown Additional RentSuburban Asking Net RentSuburban Additional RentQ2 2011 Q2 Q2 2014 Q2 2012 Q2 2013 2015Downtown Additional RentQ2 2011 Q2 2012 Q2 2013 Suburban Q2 Additional 2014 Rent Q2 201520.0% 25.0%25.0%15.0% 20.0%600 300 50020.0%10.0% 15.0%500 200 400400 100 30015.0%5.0% 10.0%300200 010.0%-100 2000.0% 5.0%0100Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Suburban Absorption (12 months) 5.0%-1000Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown VacancySuburban Vacancy0.0%-100 Downtown Absorption (12 months)Suburban Absorption (12 months) 0.0%Downtown Q2 2011 Vacancy Q2 2012 Q2 2013 Suburban Q2 2014 Vacancy Q2 2015Downtown West Palm Absorption Beach (12 <strong>Office</strong> months) Space Under Construction Suburban Absorption & Completions (12 months)250 Downtown VacancySuburban Vacancy$400West Palm Beach <strong>Office</strong> Absorption & Vacancy RatesWest Palm Beach <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Downtown Under ConstructionSuburban Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Suburban Completions (12 months)Q2 Downtown 2011 Under ConstructionQ2 2012 Q2 2013 Suburban Q2 Under 2014 Construction Q2 2015Downtown Completions (12 months)Downtown Under ConstructionWest Palm Beach Class A Average Asking Gross RentsSuburban Asking Net RentSuburban Completions (12 months)Suburban Under ConstructionWest Palm Beach Class A Average Asking Gross RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Additional RentSuburban Additional Rent25.0%Vacancy Vacancy Rate Rate Vacancy RateMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 57


London, U.K. <strong>Office</strong> <strong>Market</strong>In London’s office market, the issue is how to managegrowth. This challenge is most clearly demonstrated inpress headlines about rental-rate growth. Central Londonrental-rate growth hit 1.5% in June 2015 – equivalent to19.6% per annum (pa) – with the West End submarket hitting2%. The West End is now the most expensive office locationin the world based on the highest per-square-foot rent paidin the market. In the St. James submarket, small office suiteshave hit as high as £185 psf. The previous record rent was£140 psf, set in 2007. In the City of London, upper floors intower buildings are hitting £90 psf, although the benchmarkfor lower floors is £62.50 psf. Previously “cheap” submarkets,such as Shoreditch (located on the northern fringe of theCity of London), have seen quoting rents move into the mid-£60s-psf range.These headline-grabbing rents are symptomatic of a marketthat is running out of space. Take-up in Central London forthe first six months of 2015 was the highest since 1998.This trend is set to continue. Across most Central Londonsubmarkets, vacancy rates are 4% or less – and rental growthis inevitable. The office supply in most of the key submarketsis less than 12 months’ take-up. In response, some occupiersare moving jobs out of London. For example, HSBC recentlyannounced that it will move its 1,000-head retail bankingoperation to Birmingham from Canary Wharf. Other firms arealso thinking hard about their Central London occupationalstrategies.Serviced offices have come into favour by offering moreflexible occupancy options than the traditional lease.<strong>Market</strong> entrants are widening the scope and scale of theoffering – WeWork recently took 168,000 sf in Moor Placein the City of London. In the past, London has shown itsability to meet occupiers’ needs. The Broadgate and Ludgateschemes opened up new areas for office users. Arguably, thedevelopment of the Kings Cross and London Bridge areas isperforming that same function in this cycle. That said, thereis no obvious domestic reason for demand to slow.Absorption Absorption (Thousands Absorption (Thousands sf) (Thousands sf) sf)Square Square Feet (Thousands)Feet Square (Thousands) Feet (Thousands)3,500 4,5004,500 3,000 4,0004,000 2,500 3,5003,500 2,000 3,0003,000 1,500 2,5002,500 1,000 2,0002,0001,5001,5001,000 05001,000£ psf0500010,000 8,0007,000 9,00010,0006,000 8,0009,0005,000 7,0008,0004,000 6,0007,0003,000 5,0006,0002,000 4,0005,0001,000 3,0004,0002,000 03,0001,0002,00001,000£ psf4,5004,00010,000£ psf9,000£600£50£60£60 £40£50£50 £30£40£40 £20£30£30 £10£20£20 £10£0London, UK <strong>Office</strong> Absorption & Vacancy RatesLondon, UK <strong>Office</strong> Absorption & Vacancy RatesLondon, UK <strong>Office</strong> Absorption & Vacancy RatesQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Absorption (12 months)Downtown VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015London, UK <strong>Office</strong> Space Under Construction & CompletionsDowntown Absorption (12 months)Downtown VacancyLondon, UK <strong>Office</strong> Space Under Construction & CompletionsLondon, UK <strong>Office</strong> Space Under Construction & CompletionsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015London, UK Class A Average Asking Rents8.0%6.0%7.0% 8.0%5.0%6.0% 7.0%4.0%5.0% 6.0%3.0%4.0% 5.0%2.0%3.0% 4.0%1.0%2.0% 3.0%0.0%1.0% 2.0%0.0% 1.0%Downtown Completions (12 months)Downtown Under ConstructionQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Downtown VacancyQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Downtown Completions (12 months)Downtown Under ConstructionLondon, UK Class A Average Asking RentsDowntown Under ConstructionLondon, UK Class A Average Asking RentsQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 20158.0%7.0%0.0%Vacancy Vacancy Rate Rate Vacancy Rate£10 £0Downtown Asking RentSuburban Asking RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015£0NOTABLE LEASE TRANSACTIONS BY SIZE - FIRST Downtown HALF Asking Rent 2015Suburban Asking RentQ2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015Address / Complex Tenant Size (sf) Deal TypeDowntown Asking RentSuburban Asking Rent1 10 Upper Bank Street Deutsche Bank 389,000 New2 1 New Street Square Deloitte LLP 275,000 New3 56 Westfield Avenue Transport for London 260,000 New4 Moorgate Exchange WeWork 168,000 New5 30 Fenchurch Street QBE International Insurance 100,500 Renewal58Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


NotesMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 59


About <strong>Avison</strong> <strong>Young</strong>THAMES VALLEYHAMBURGDUESSELDORFLONDONFRANKFURT<strong>Avison</strong> <strong>Young</strong> at a GlanceFounded: 1978Total Real Estate Professionals: 1,900+<strong>Office</strong>s: 67Brokerage Professionals: 800+Property Under Management: >75 million sf<strong>Avison</strong> <strong>Young</strong> is the world’s fastest-growingcommercial real estate services firm.Headquartered in Toronto, <strong>Canada</strong>, <strong>Avison</strong><strong>Young</strong> is a collaborative, global firm ownedand operated by its principals. Foundedin 1978, the company comprises 1,900 realestate professionals in 67 offices, providingvalue-added, client-centric investment sales,leasing, advisory, management, financing andmortgage placement services to owners andoccupiers of office, retail, industrial and multifamilyproperties.VANCOUVERSACRAMENTOOAKLANDSAN FRANCISCOSAN MATEOLOS ANGELES (4)RENOORANGE COUNTYSAN DIEGOLAS VEGASEDMONTONCALGARYLETHBRIDGEDENVERREGINAWINNIPEGMINNEAPOLISDALLASAUSTINHOUSTONCHICAGO (2)MISSISSAUGADETROITINDIANAPOLISTORONTO (2)CLEVELANDGUELPHPITTSBURGHCOLUMBUSATLANTATAMPAWEST PALM BEACH (2)FORT LAUDERDALETORONTONORTHMIAMIOTTAWAMONTREALQUEBEC CITYORLANDOBOSTONMONCTONHALIFAXFAIRFIELD/WESTCHESTERLONG ISLANDNEW YORK CITYNEW JERSEYPHILADELPHIASUBURBAN MARYLANDWASHINGTON, DCTYSONS CORNER, VARALEIGH-DURHAM (2)CHARLOTTESOUTH CAROLINA (2)MUNICHTransaction Services- Tenant representation, leaseacquisition and disposition- Investment acquisitionand disposition for ownersand occupiers- Landlord representation—all property types—office,industrial, retail, build-to-suit,land and multi-familyConsulting & AdvisoryServices- Portfolio review and analysis- Valuation and appraisal- Benchmarking- Transaction management- Asset rationalization- Mergers and acquisitions- Workplace solutions- Acquisitions and dispositions- Property tax servicesManagement Services- Project management- Property and operationsreview- Property/facility management- Tenant relations- Financial reporting- Lease administration- Operations consulting- Asset management- Portfolio managementEnterprise Solutions- Integrated servicescoordination- Transaction management- Optimization strategies- Portfolio lease administration- Project coordination andreportingInvestment Management- Acquisitions- Asset management- Portfolio strategy- Capital repositioning60Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Our ContactsCanadian ResearchBill Argeropoulos, PrincipalPractice Leader, Research (<strong>Canada</strong>)416.673.4029bill.argeropoulos@avisonyoung.comU.S. ResearchMargaret DonkerbrookVice-President, U.S. Research202.644.8677margaret.donkerbrook@avisonyoung.comCorporate Communications & MediaSherry Quan, PrincipalGlobal Director of Communications & Media Relations604.647.5098sherry.quan@avisonyoung.comAdditional research reports are available at avisonyoung.com or by contacting the <strong>Avison</strong> <strong>Young</strong> offices below.Canadian <strong>Office</strong>sToronto (HQ)T 416.955.0000CalgaryT 403.262.3082EdmontonT 780.428.7850Guelph (SW Ontario)T 226.366.9090HalifaxT 902.454.6185LethbridgeT 403.330.3338MississaugaT 905.712.2100MonctonT 506.388.1202MontrealT 514.940.5330OttawaT 613.567.2680Quebec CityT 418.654.8200ReginaT 306.359.9799Toronto(Property Management)T 416.343.0078Toronto NorthT 905.474.1155VancouverT 604.687.7331WinnipegT 204.947.2242U.S. <strong>Office</strong>sAtlantaT 404.865.3663AustinT 512.474.2411BostonT 617.250.7600CharlotteT 704.531.5550Chicago (Downtown)T 312.957.7600Chicago (Suburban)T 847.881.2045ClevelandT 216.609.0303Columbus, OHT 614.840.0700DallasT 214.559.3900DenverT 720.508.8100DetroitT 313.209.4120Fairfield/WestchesterT 203.614.1260Fort LauderdaleT 954.903.1800HoustonT 713.993.7700IndianapolisT 317.210.8801Las VegasT 702.472.7979Long IslandT 516.962.5400Los Angeles (Downtown)T 213.935.7430Los Angeles (Santa Monica)T 310.899.1800Los Angeles (North)T 323.851.6666Los Angeles (West)T 424.265.9200MiamiT 305.446.0011MinneapolisT 612.913.5640New JerseyT 973.898.6360New YorkT 212.729.7140OaklandT 510.254.4255Orange County (Irvine)T 949.757.1190OrlandoT 407.219.3500PhiladelphiaT 610.276.1080PittsburghT 412.944.2130Raleigh-DurhamT 919.785.3434Raleigh-Durham(Chapel Hill)T 919.968.4017RenoT 775.332.2800SacramentoT 916.563.7555San Diego CountyT 858.201.7070San FranciscoT 415.322.5050San MateoT 650.425.6420South Carolina (Charleston)T 843.725.7200South Carolina (Greenville)T 864.334.4145Suburban MarylandT 301.948.9870TampaT 813.288.1800Tysons CornerT 703.288.2700Washington, DCT 202.644.8700West Palm BeachT 561.721.7000West Palm Beach(Boca Raton)T 954.903.1800U.K. <strong>Office</strong>sLondon, U.K.T +44 (0)20 7101 0200Thames Valley, U.K.T +44 (0)1494 540 000Germany <strong>Office</strong>sDuesseldorfT +49 (0)211 5405 7106FrankfurtT +49 (0)69 7593 7233HamburgT +49 (0)40 3111 2140MunichT +49 (0)89 71042 2166Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 61


<strong>Avison</strong> <strong>Young</strong> Research<strong>Canada</strong>, U.S. and U.K. PublicationsTurning information into intelligence<strong>Avison</strong> <strong>Young</strong>’s multi-disciplinary group of dedicated research professionals works collectively to deliver market analysisand insights that drive value in real estate decisions. We translate data into market intelligence to help our clientsstrategically solve their real estate concerns and concentrate on what their businesses do best.<strong>Avison</strong> <strong>Young</strong> regularly produces an array of local, regional and global market research, including quarterly and topicalreports, white papers and annual forecasts. Our research is quoted extensively in local, national, business and global mediaoutlets.Through <strong>Avison</strong> <strong>Young</strong>’s professionals, our research team engages with a wide variety of corporate, investor andinstitutional clients to conduct customized research, due diligence and market assessments, as well as demographic andlocation analysis.Leveraging in-depth knowledge from our broad services platform with information from internal proprietary andindependent third-party data-tracking systems, our clients’ real estate decisions are fully supported by best-in-class,interpreted data – true market intelligence.<strong>Avison</strong> <strong>Young</strong>Industrial <strong>Market</strong> <strong>Report</strong><strong>Canada</strong>, U.S. & U.K.(Spring 2015)<strong>Avison</strong> <strong>Young</strong>2015 ForecastCommercial Real Estate<strong>Canada</strong>, U.S. and U.K.(2014 Annual Review)<strong>Avison</strong> <strong>Young</strong>Commercial Real EstateInvestment Review<strong>Canada</strong>, U.S. and U.K.(Fall 2014)62Mid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong>


Follow UsFollow <strong>Avison</strong> <strong>Young</strong> on Twitter:For industry news, press releases and market reports:www.twitter.com/avisonyoungFor <strong>Avison</strong> <strong>Young</strong> listings and deals:www.twitter.com/AYListingsDealsFollow <strong>Avison</strong> <strong>Young</strong> Bloggers:http://blog.avisonyoung.comFollow <strong>Avison</strong> <strong>Young</strong> on LinkedIn:www.linkedin.com/company/avison-youngcommercial-real-estateFollow <strong>Avison</strong> <strong>Young</strong> on YouTube:www.youtube.com/user/<strong>Avison</strong><strong>Young</strong>REavisonyoung.comMid-Year 2015 <strong>Canada</strong>, U.S. & U.K. <strong>Office</strong> <strong>Market</strong> <strong>Report</strong> 63


avisonyoung.com© 2015, <strong>Avison</strong> <strong>Young</strong> (<strong>Canada</strong>) Inc.Data sourced from: AltusInSite, <strong>Avison</strong> <strong>Young</strong>, Costar Group Inc.,Real Capital Analytics, Inc., Reis Services, LLCThe information contained herein was obtained from sourceswhich we deem reliable and, while thought to be correct, is notguaranteed by <strong>Avison</strong> <strong>Young</strong> (<strong>Canada</strong>) Inc.

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