North American Office Highlights Q4-12

Real Estate

coy-davidson
  • 1. Q4 2012 | OFFICENORTH AMERICAHIGHLIGHTS Unlocking 2013 Office Property Performance What will be the right combination in 2013? K.C. CONWAY, MAI, CRE EMD | Market AnalyticsMARKET INDICATORSRelative to prior period KEY TAKEAWAYSUSUS Canada Canada • The North American and U.S. office vacancy rates declined further during Q4 2012 to 14.09%Q4Q1 Q4 Q1 20122013*2012 2013*and 14.63%, respectively. This was the fourth consecutive quarter of improvement for the 6.4billion square feet of inventory in the 85 North American office markets tracked by Colliers.VACANCY • The market uncertainty and volatility of 2H2012 inhibited neither office leasing or transactionNET ABSORPTION  activity. Q4 North American net absorption of 21.1 MSF was more than double Q3’s 10.4 MSF.CONSTRUCTION2012 total net absorption was 50.7 MSF (roughly the office inventory of Ft. Lauderdale), the bestsince the 2008–2009 financial crisis. RENTAL RATE *Projected• Major office property transactions totaled $77.6 billion in 2012, and surged at year-end 2012.Construction is the change in Under ConstructionQ4’s $29.1 billion in office building sales surpassed all prior quarters in 2012, according to RealCapital Analytics.NORTH AMERICAN OFFICE MARKETSummary Statistics, Q4 2012 NORTH AMERICAN OFFICE VACANCY, INVENTORY AND ABSORPTION – Q4 2012US CANNAVACANCY RATE14.63% 6.80% 14.09%Change From Q3 2012 -0.21% -0.26% -0.21% ABSORPTION (MSF) 18.8 2.321.1NEW CONSTRUCTION (MSF) 9.1 1.5 10.6UNDER CONSTRUCTION (MSF)39.5 11.350.8 Absorption Per Market (SF)q3 12 - q4 122,500,000ASKING RENTS PER SF US CAN 1,250,000250,000 -250,000 Downtown Class A $41.22 $51.42 -1,250,000 -2,500,000 Change from Q3 2012 0.17% 1.67%Suburban Class A $26.21$31.94 Sq. Ft. By Region 2 billion 2.00000000 1 billion 1.00000000 Change from Q3 20120.08%0.16% 200 mil. 2.00000000 Occupied Sq. Ft.Total_OffSF-Vacant_OffSFVacant_OffSF Ft. Vacant Sq.WWW.COLLIERS.COM
  • 2. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAKEY TAKEAWAYS (continued)• Capital is migrating out of the risk curve for investment in office building assets in search of yield. This trend, reported by Colliers in previous 2012 reports, was corroborated by the recent Association of Foreign Investors in Real Estate report in which four of the top five markets for investment were in the U.S., including Houston for the first time.• “ICEE” office markets are still hot. Intellectual Capital, Energy and Education (ICEE) markets continue to capture a disproportionate share of North American office absorption. During 2012, two-thirds of the 10 North American MSAs with the greatest absorption are characterized as ICEE markets. We see this trend continuing in 2013 as technology, energy and knowledge gateway centers remain the dominant generators of office-related employment.• Medical Office has been a sleeper office sub-property type that saw a 30% growth in transaction activity in CY 2012 to $6.1 billion, or just shy of the 10% total $77.6 billion in CY 2012 office property sales. And, approximately half of the 71 MSF of office space under construction in the U.S. at the onset of 2013 is for medical-related use.• Recovery in housing is an overlooked office demand driver that will gain additional traction in 2013.IN THIS QUARTER’S REPORT, WE TAKE A LOOK AT THECOMBINATION TO UNLOCKING VALUE IN 2013:CANADIAN OFFICE ABSORPTION BY MARKET Q4 2012 RIGHT 14: In 2013 look for North American vacancy to drop below 14%, fueled byMontréal, QC 365.7 another 50 MSF of absorption.Calgary, AB330.0203.3 LEFT 80:total office transactions above Toronto, ON 190.2 $80 billion Regina, SK Saskatoon, SK 138.9 RIGHT 10: CMBS office property Waterloo Region, ON 24.4 delinquencies rate below 10%Edmonton, AB13.3 LEFT ICEE: Office job growth in Tech/Winnipeg, MB0.0 Energy/Education MSAs outperformsHalifax, NS-0.5 FIRE MSAs for a third consecutive year Victoria, BC -14.4 Vancouver, BC -130.9 RIGHT MO: Medical Office is the emerging -183.2Ottawa, ON leader among office sub-property sectors -300.0 -200.0-100.0 0.0100.0200.0 300.0 400.0See page 7 for details ThousandsCANADIAN OFFICE UNDER CONSTRUCTION BY MARKET Q4 2012Toronto, ON 2.78 Calgary, AB1.66Vancouver, BC 1.56 Ottawa, ON0.36 Montréal, QC0.30 Halifax, NS 0.19 Winnipeg, MB0.13Regina, SK0.08Waterloo Region, ON 0.07Saskatoon, SK 0.05 Victoria, BC 0.00Edmonton, AB0.000.00.5 1.01.52.02.5 3.0 Millions Note: Q3 data reported for Winnipeg, MBP. 2| COLLIERS INTERNATIONAL
  • 3. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAIN BRIEF: OFFICE OUTLOOK 2013 North American Downtown Markets:2012 finished—and 2013 began—as Colliers observed in fall 2012: with progress on all fronts.Excluding renewals, of the leases signed• North American Office Vacancy falls to just 14.09% at YE 2012. this quarter, did most tenants:• Net leasing activity best in five years: i) 21.1 MSF in Q4 2012; and ii) 50.7 MSF for CY 2012• A 19% surge in office building sales surpasses 2004 transaction volume (3,000+ properties Hold Steady totaling approximately $78 billion during 2012)69.1%Expand16.2%Despite the harmful summer “UV (Uncertainty & Volatility) rays” during 1H2012, and lingering anxietyContractsurrounding the U.S. fiscal debt crisis, ongoing Eurozone recession, the cost and logistics of 14.7%implementing Obamacare, and anemic job growth (150,000/month) for two consecutive years, officereal estate is persevering and returning to a state of balance. However, the recovery is broadening,both in the factors that have driven it over the past 12 months, as well as the markets that it’s reaching.No longer is the recovery confined to the CBDs of the “sexy six” core MSAs of New York, Boston,Chicago, Los Angeles, San Francisco and Seattle; it’s expanding to suburban submarkets andsecondary MSAs. Real Capital Analytics’ Office Year In Review report noted a 31 percent increase in North American Downtown Markets:What was the trend in Free Rent (in months)suburban office building sales during 2012, and a 40 percent increase in office building sales outsideoffered by CBD landlords this quarter?the six core MSAs. While this new interest is driven by a dearth of assets in the core MSAs and thesearch for yield in response to Federal Reserve monetary policy and cap rate compression, it has beenoffice job growth in technology, energy and primary-education focused MSAs (what Colliers coined theIntellectual Capital, Energy and Education, or “ICEE” markets in 2011) that has defined which secondary Samemarkets were participating in this broadening recovery in the office property sector thus far. Less 80.9%14.7%MoreIn 2013, two other positive influences will impact this expansion: the housing recovery and growth in 4.4%medical office demand. Both are broad-based across the U.S. and will have more of an effect onsuburban office submarkets than CBDs. Why? First, professional services associated with a rise innew home construction and existing home sales activity will rebuild in proximity to this increasinghousing activity in the suburbs. Second, our healthcare delivery model is shifting from one concentratedon expensive urban hospital campuses to less capital-intensive, suburban outpatient facilities.North American Downtown Markets:The ICEE, housing, and medical office factors, along with the continuing search for yield by investors, What was the trend for tenantadd up to M.O.T.S (More Office To Secondaries) in 2013. As the diagram below depicts, risingimprovement allowances offered byabsorption and modest new supply are driving vacancy down, and the requisite conditions to improveCBD landlords this quarter?NOI are in place to absorb any interest rate risk in 2H2013. Hold Steady 91.2% U.S. OFFICE MARKET Q4 2010–Q4 2012 Contract Expand2.9% 5.9% 20.016.11 15.57 15.36 15.14 18.015.03 14.9614.88 14.83 14.6316.0 16.014.0 14.0 12.0 12.0 North American Suburban Markets:Vacancy % 10.0 Excluding renewals, of the leases signed 10.0 8.0this quarter in your CBD/downtown,8.0 did most tenants: 6.06.04.04.0 2.0 Expand2.030.9%Hold Steady60.3%--Q4Q1Q2 Q3 Q4Q1Q2 Q3Q4 Contract 8.8% 20112012Absorption MSFCompletions MSFVacancy % COLLIERS INTERNATIONAL |P. 3
  • 4. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAVacancyFrom a regional perspective, Canada has the lowest average vacancy rateat 6.8 percent; and in the U.S., the Northeast has the lowest vacancy ratejust shy of 14 percent. The highest vacancy rate among North Americanregions is the Western U.S. at 15.27 percent. The South and Midwest haveaverage regional vacancy rates of 14.81% and 14.71%, respectively.Housing has been slow in its recovery in both these regions, and the jobgrowth has been more focused on manufacturing, transportation anddistribution, favoring industrial real estate over office. USCANA Vacancy Rate:14.63% 6.80% 14.09%BEHIND THE STATISTICS & BEYOND THE BASICSChange from Q3 2012-0.21%-0.26%-0.21%Scope of Colliers Office Outlook Report: Colliers monitors office propertyconditions in 85 North American markets from Toronto to Tampa, totalingAbsorption6.4 billion square feet of inventory. Approximately 93 percent (6.0 billionThe final tally on 2012 net office absorption was not in the cards insquare feet) of this inventory is located in the United States.mid-2012, when it appeared that tenants and businesses were pulling backfrom leasing activity driving absorption down 6% over the prior six-monthThe largest 20 North American markets (those with at least 100 MSF ofperiod (2H2011). However, despite the market’s anxiety over the Novemberexisting inventory) constitute approximately 60 percent of the 6.4 billion2012 election and the Fiscal Cliff, 2012’s net office absorption had itssquare feet of North American office space tracked by Colliers. All of thebest performance since the 2008–2009 financial crisis. Q4 net absorption>90 million-square-foot markets are located in the U.S., except one: Toronto.was more than double that for any prior quarter during 2012 (21.1 MSF inWith respect to 2012 net absorption, just 10 of the 85 markets accountedfor 53 percent of the 50.7 MSF of net absorption, and all but one marketQ4 compared to 10.0 MSF for the rest of the year).(Calgary) are located in the U.S. Below are the ten absorption-leadingMSAs for 2012—seven of which are ICEE markets.Which markets outperformed and why? Examination of the top ten NorthAmerican markets with respect to absorption in Q4 and YTD 2012 revealsthe impact of ICEE employment drivers, commencement of a true housing ICEE MARKETS LEAD IN 2012 ABSORPTION recovery, and importance of having a nationally or regionally recognizedmedical center.MSA2012 ABSORPTION 1Houston (ICEE) 4.50 MSFTOP MARKETS FOR ABSORPTION MSA Q4 2012MSA CY 2012 2Dallas (ICEE)2.90 MSFDetroit 4.50 MSF1 1.66 MSF Houston (Auto + Housing)(ICEE) + Medical Center 3 Atlanta (ICEE)2.80 MSF2.90 MSF2Phoenix1.46 MSF Dallas(ICEE) + Medical Center 4 Detroit 2.75 MSF Atlanta 2.80 MSF3Chicago 1.13 MSF (Housing Recovery) (ICEE) + Medical Center 5Chicago2.70 MSFMontreal 2.75 MSF4 0.99 MSFDetroit (ICEE)Medical Center Philadelphia 2.70 MSF 6 Calgary (ICEE) 2.5 MSF 5 0.98 MSFChicago (ICEE)Medical Center Houston 2.5 MSF6 0.93 MSFCalgary (ICEE)(ICEE) 7Phoenix 2.4 MSFBoston Phoenix7 0.93 MSF 2.4 MSF (ICEE) (Housing Recovery) 8 Boston (ICEE)2.2 MSF Dallas 2.2 MSF8 0.84 MSFBoston (ICEE)(ICEE) + Medical Center 9 Philadelphia (ICEE)2.2 MSF 2.2 MSF9 Minneapolis 0.82 MSF Philadelphia(ICEE) + Medical Center 10Seattle (ICEE) 2.2 MSF 2.2 MSF 10Sacramento 0.82 MSFSeattle(ICEE) + Medical CenterP. 4 | COLLIERS INTERNATIONAL
  • 5. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICALooking at this list, several themes emerge:Association of Foreign Investors in Real Estate’s annual 2013 ForeignInvestment Survey ranked the U.S. as the top place overall to invest; four• The overlapping seven MSAs: Seven of the top ten most active U.S. markets were among their top five picks, including Houston, which markets for leasing activity in Q4 were also among the ten most active had never before made this report’s global ranking. MSAs for all of calendar 2012. Houston, Dallas, Detroit, Chicago, Phoenix, Boston, and Philadelphia are prominent in both categories.Construction ActivityTo assess the risk of overbuilding, new construction activity needs• The predominance of ICEE: Seven of the top ten markets for netto be considered from three perspectives: 1) new supply as a percent absorption in 2012 are MSAs with an ICEE employment profileof existing inventory; 2) geographic concentration; and 3) sub-property (technology, energy and/or primary education).type concentration.• The increasing role of housing and medical office: However, only five of the top ten markets for Q4 leasing activity are ICEE MSAs. At the onset of 2013, approximately 78.5 MSF of new office supply is What explains the difference, and what explains the emergence of underway in the U.S. and Canada, according to Dodge Pipeline. That MSAs like Atlanta, Detroit and Phoenix? The answer is two-fold:activity translates to a North American new supply to existing inventory 1) the real housing recovery is taking hold in even the most ratio of 1.2%. Historically, only when this ratio passes 2.0% is it considered distressed housing markets, such as Atlanta, Detroit and Phoenix;elevated and indicative of overbuilding risk. What’s more, the current and 2) high-profile medical centers are strongly impacting demandsupply-to-inventory ratio is actually much lower for most U.S. office for medical office space: Eight of the leading MSAs for absorption markets due to geographic and sub-property type concentration. in 2012 have nationally or regionally recognized medical centers.With respect to sub-property type construction, 51% of the 78.5 MSF ofLooking forward to 2013, the only brake on office leasing activity in key total new supply is medical-office-related construction. Of the remainingenergy markets—Dallas, Denver, Houston, Oklahoma City, Philadelphia 38.5 MSF, 17.55 MSF (45.7% of the non-medical office new supply) is(impact of Bakken shale), and Calgary—will be the delayed delivery of new concentrated in just five states. The following table delineates thesespace under construction. Houston and Denver can’t complete new space geographic and sub-property type ratios:fast enough to keep pace with demand. ICEE will also continue to be animportant office space demand driver in markets like Atlanta and Detroit New Supplywhere auto technology is fueling demand for engineers, and the officeDelineation Ratio (%) (MSF)space to house them. (In 2012, Porsche and General Motors both madematerial commitments to locating auto technology centers in Atlanta.) North America 78.5100.0And, the housing recovery will benefit suburban office space demand ascontractors and professional service providers (closing attorneys, Canada 7.2 9.2architects, engineers, building inspectors, etc.) rebuild or expand theiroperations to service housing activity of approximately 1.0 million new United States 71.391.8units—after years of less than half that level of activity. Atlanta, Charlotte,Nashville, Phoenix, Tampa, and inland California markets will see the mostOffice Property 78.5100.0benefit from this housing recovery in 2013. In aggregate, 2013 shouldsurpass 2012’s 50 MSF of net absorption by conservative estimates of15%–20%, or 57.5 to 60.0 MSF in total. Market forces will see 2H2013 Medical Office 40.0 51.0disproportionately higher net leasing activity than 1H2013, as was the casein 2012. Non-Medical Office 38.5 49.0Transaction ActivityU.S. Non-Medical Office 38.5100.0Transactions of major office property were also uninhibited by 2H2012uncertainty. There were more than 3,000 transactions in 2012, totaling Top 5 States17.545.7$77.6 billion, with a noticeable surge at year-end 2012: the $29.1 billion inQ4 office building sales surpassed all prior quarters in 2012, according toTexas 6.7 17.4Real Capital Analytics. As in recent years, New York, San Francisco, LosAngeles, Washington D.C., and Seattle accounted for approximately 50percent of the total dollar volume of office building sales during 2012.California4.912.8Houston and Denver (two key ICEE MSAs) now rank among the topmarkets for office building transaction volume. Pennsylvania 2.56.4The $77.6 billion in office transaction activity from 2012 is likely to beNew York 2.05.2surpassed in 2013, given the amount of idle domestic and foreign capitalsearching for yield in tangible assets, such as commercial real estate. The New Jersey1.5 3.9 COLLIERS INTERNATIONAL |P. 5
  • 6. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA ENGINEERING NEWS-RECORD’S CONSTRUCTION COST INDEX YEARJAN FEB MARAPR MAYJUN JUL AUGSEP OCTNOV DECAVG2013 9437 9453 Note: Construction Costs never dropped post 2007 & are rising at a faster pace.2012 9176 9198 9268 9273929092919324 9351 93419376 93989412 93082011 8938 899890119027903590539080 9088 91169147 91739172 90702010 8660 867286718677876180558844 8837 88368921 89518952 8799 20098549 8533 8534 8528857485788566 8564 85868596 85928641 8570 20088090 8094 8109 8112814181858293 8362 85578623 86028551 8310 20077880 7880 7856 7865794279397959 8007 80508045 80928089 7966 20067660 7689 7692 7695769177007721 7722 77637883 79117888 7751 20057297 7298 7309 73557398 7415 7422 7479 75407563 76307647 7446 20046825 6862 6957 7017706571097126 7188 72987314 73127308 7115 20036581 6640 6627 6635664266946695 6733 67416771 67946782 6694 20026462 6462 6502 6480651265326605 6592 65896579 65786563 65382001 6281 6272 6279 6286628863186404 6389 63916397 64106390 6343 20006130 6160 6202 6201623362386225 6233 62246259 62666283 6221INDEX METHODOLOGY: 200 hours of common labor at the 20-city average of common labor rates, plus 25 cwt of standard structural steel shapes at the mill price prior to 1996 and the fabricated20-city price from 1996, plus 1.128 tons of portland cement at the 20-city price, plus 1,088 board-ft of 2x4 lumber at the 20-city price.The good news is that the U.S. ratio of new supply to inventory (excludingCAPITAL MARKETSmedical office construction) is less than a one-half of one percent—the What is better than improving office property type fundamentals? Forlowest since 2003. And, only 21 MSF of new construction is underway those that purchased any of the 3,000 office properties that traded inoutside of the five most active states, where energy and technology 2012, the answer is availability of capital. Domestic and foreign sourcescompanies, such as Exxon Mobil and Shell Energy in Texas and Endo are flush with capital ready to invest in tangible assets like real estate, thatPharmaceutical in Pennsylvania, account for 60 percent of activity. can offer 2.5 to 3.0 times the yield offered by the U.S. government’s10-year Treasury bond. And, the CMBS debt markets are opening up againHowever, rising construction costs are a concern that spans all commercialafter four consecutive years of annual new issuance below $50 billion.property types. It may surprise many to learn that construction costs Underwriting terms and pricing spreads have also compressed in favor ofnever actually declined during the 2008–2009 financial crisis and the borrowers: Improving market conditions have enabled even propertiesensuing recession. As documented by the Engineering-News Record,with elevated vacancy rates to become financeable again due to the lowConstruction, costs have risen 17% since the end of 2007, and are up over DSCR hurdle provided by sub-5.0 percent interest rates and 90 percent5.0 percent since February 2011. Investors and developers considering LTVs. Declining CMBS delinquency rates have further aided new issuancenew construction investments should budget construction cost increases at interest, and have CMBS investors enthusiastic about 2013 new issuancedouble the CPI for 2013 and 2014, due to pressures on labor and materials.increasing 50 percent over 2012’s $50 billion level to $75 billion. If youhave tenants, and can meet a 1.4 DSCR using a 4.5% loan coupon, thecapital markets are once again open to refinance your office building. PERCENTAGE 30+ DAYS DELINQUENT BY PROPERTY TYPE 12PERCENTAGE 30+ DAYS DELINQUENT BY PROPERTY TYPE JAN ‘13 DEC ‘12 NOV ‘123 MON6 MON1 YEAR10.3410.16 10.13 Industrial11.3211.2411.4811.5311.7212.1410.04 9.99 10 9.68 9.80 9.69 9.71 9.719.579.52 9.37Lodging11.7711.7312.2411.2413.06 12.09 Multifamily13.4313.9814.21 14.26 15.6915.39Office10.4810.6610.37 10.20 10.698.90 8Jan 2012Mar 2012May 2012Jul 2012Sep 2012Nov 2012Jan 2013Retail 7.797.627.758.03 8.03 7.88Source: Trepp – January 2013 CMBS Delinquency ReportSource: Trepp – January 2013 CMBS Delinquency ReportP. 6 | COLLIERS INTERNATIONAL
  • 7. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA THE COMBINATION TO UNLOCKING 2013 OFFICE PROPERTY PERFORMANCE RIGHT 14 – Vacancy:LEFT ICEE – Office Demand Drivers:If the absorption momentum from 2H2012 carries over into The greatest opportunity for value enhancement and yield will2013 and Congress can maneuver its fiscal debt obstacleremain in those secondary markets with an ICEE employmentcourse in 1H2013, the North American office vacancy rate will declineprofile. Traditional FIRE (Finance Insurance and Real Estate) markets arebelow 14.0 percent for the first time since 2005. Office property investorsgoing to face office absorption headwinds as financial institutions reduceare keenly focused on the need for improvement in NOI in office properties operating costs and the amount of office space they occupy. Financialgoing forward to be positioned to absorb higher interest rate costs 3-5institutions will be returning office inventory to the market underminingyears out. Cap rate compression has aided property values the past two recent improvement in vacancy. For this part of the combination, turn toyears, but future value enhancement will have to be unlocked through NOI ICEE vs. FIRE.improvement (i.e., increasing occupancy and rental rates).RIGHT MO – Medical Office: LEFT 80 – Office Transaction Activity: The role of medical office space in the overall office vacancy With improving office property fundamentals and cheap debt topicture warrants monitoring in 2013, particularly as the Obama leverage transactions to maximize yield, 2013 should see office administration’s healthcare legislation and mandated healthcare exchangestransaction activity surpass the $80 billion mark by as much as 20%. The are implemented. Due to strong demand and an absence of much newopportunity to unlock value here is in quality assets in secondary ICEEsupply since 2007, demand for medical office space has risen dramaticallymarkets, such as Atlanta, Austin, Baltimore (now a post-Panamax readyand is fueling a boom in new construction. The states with the mostport), Denver, Fort Worth, and Houston.medical office construction activity are Texas, California, Maryland, New York, North Carolina and Ohio. Medical office offers an unlocked opportunity RIGHT 10 – CMBS Office Delinquency: as contraction continues among traditional users of office space, suchFor the capital markets to contribute to the improving office as financial services firms. Do your homework before jumping into thisproperty conditions, CMBS delinquency rates need to continue sub-property sector, though. Vacancy and rental rates vary widely, andon their downward trajectory and remain south of 10 percent overall. Asthis subsector lacks the same availability of data and transparency as thenew issuance increases to a level north of $50 billion (increases thegreater North American office market.denominator in the delinquency calculation), and special servicerscontinue to resolve in excess of $1.0 billion in delinquent or defaulted loans(decreases the numerator portion of the delinquency ratio calculation),CMBS delinquency is likely to remain below 10 percent. This trend needsto translate over to the office property sector. With a January CMBS officedelinquency rate of 10.48%, this ratio should decline further, and maybeeven drop below 10%, as mature legacy office property loans are finallyable to refinance. CMBS delinquency below 10 percent is critical to capitalmarket confidence and unlocking more opportunity for office propertyleverage in 2013.Houston COLLIERS INTERNATIONAL |P. 7
  • 8. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORYEXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTION MARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012 DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF) NORTHEAST Baltimore, MD 28,840,782234,874- 14.06 14.029,076 Boston, MA60,725,404 98,0962,435,000 14.08 13.06616,698 Hartford, CT 9,769,060-- 21.24 20.72 50,896 New York, NY – Downtown Manhattan110,942,138-5,200,000 16.09 15.36814,431 New York, NY – Midtown Manhattan 227,532,283-1,052,150 11.94 12.04(226,585) New York, NY – Midtown South Manhattan 165,368,697- 850,000 7.968.03(119,601) Philadelphia, PA43,133,883654,000- 11.17 10.76178,159 Pittsburgh, PA32,161,109 52,000 800,000 9.6810.9(129,087) Stamford, CT18,966,293-- 19.55 21.00(274,722) Washington, DC 140,909,953-1,903,911 10.44 10.48 (59,655) White Plains, NY 7,741,025-- 15.19 15.78 (45,062) Northeast Total 846,090,627 1,038,97012,241,06111.86 11.77814,548 SOUTH Atlanta, GA 49,933,614433,822 450,00017.04 16.94 47,727 Birmingham, AL*4,338,335-- 22.00 19.80 95,482 Charleston, SC 2,068,469-52,000 7.707.249,369 Charlotte, NC 22,511,630828,831-8.807.94193,649 Columbia, SC 4,490,309-- 16.80 14.21116,125 Dallas, TX34,744,566204,109- 26.98 27.58(208,846) Ft. Lauderdale-Broward, FL 8,003,061-- 16.49 16.33 12,534 Ft. Worth, TX 10,400,974- 154,80113.05 12.14 94,885 Greenville, SC 3,143,679- 235,00012.24 15.68(107,938) Houston, TX 36,514,081 50,000- 14.45 13.72269,002 Jacksonville, FL15,994,027 73,423- 14.66 14.42 30,994 Little Rock, AR6,422,699-- 11.30 12.48 (22,714) Louisville, KY43,630,770300,000- 11.80 11.89228,712 Memphis, TN6,108,640-26,00014.77 14.666,481 Miami-Dade, FL18,491,614 33,930- 18.29 18.36 (12,903) Nashville, TN 12,087,245 48,000- 14.76 13.52167,473 Orlando, FL 12,744,796-- 11.83 11.86(3,379) Raleigh/Durham/Chapel Hill, NC13,657,917--6.496.08 55,964 Richmond, VA17,066,905- 112,00010.76 10.70 10,479 Savannah, GA 825,240 72,072- 15.21 14.18 68,561 Tampa Bay, FL8,607,635 66,927- 12.91 13.36 (39,132) West Palm Beach/Palm Beach County, FL 10,130,113-- 17.79 16.69110,753 South Total 341,916,319 2,111,114 1,029,80115.10 14.881,123,278*Absorption and vacancy figures for Birmingham account for direct space onlyP. 8 | COLLIERS INTERNATIONAL
  • 9. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY (continued) EXISTING NEW SUPPLY UNDERVACANCYVACANCY ABSORPTIONMARKETINVENTORY (SF)Q4 2012 CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF) (SF) SEP 30, 2012 DEC 31, 2012(SF)MIDWESTChicago, IL 159,986,353 297,763 - 13.45 13.23347,362Cincinnati, OH 18,047,286 - - 18.12 18.095,408Cleveland, OH34,140,929 710,100475,00019.26 19.07 66,433Columbus, OH 19,597,350 395,500280,00011.00 11.90 36,469Detroit, MI26,153,283 1,165,425 - 21.04 20.88 42,065Grand Rapids, MI5,461,588 - - 23.24 22.34 49,026Indianapolis, IN 23,453,317 - 18,00013.71 13.34 94,650Kansas City, MO34,664,036 -215,00014.60 14.43 61,577Milwaukee, WI19,887,288 145,000 - 13.71 13.39 62,655Minneapolis, MN31,840,763 - - 15.13 14.98 46,977Omaha, NE 6,358,92860,000 -7.168.539,192St. Louis, MO27,493,907 - - 16.52 16.66 (37,405)St. Paul, MN 12,904,838 - - 13.85 13.824,013Midwest Total419,989,8662,773,788988,00014.98 14.86788,422WESTBakersfield, CA 3,020,093 - -8.867.62 44,571Boise, ID 3,741,536 241,208260,00010.95 10.24 66,851Denver, CO 34,251,23539,656112,00012.43 12.26 70,574Fresno, CA3,284,713 - - 11.40 11.66(8,393)Honolulu, HI7,119,083 - - 14.00 13.21 55,973Las Vegas, NV 4,192,128 -458,20012.31 12.37(2,488)Los Angeles, CA31,942,700 418,600229,50018.46 19.03(178,200)Oakland, CA16,891,513 - - 12.90 13.45 (92,321)Phoenix, AZ21,016,381 203,609 - 21.30 21.52 29,081Portland, OR 33,287,613 100,083 -9.779.89 (40,940)Reno, NV1,388,078 - - 19.58 19.509,309Sacramento, CA 18,949,701 130,000 -9.809.59 39,662San Diego, CA10,149,972 - - 20.14 19.84 30,448San Francisco, CA88,179,309 189,835 2,510,615 10.51 10.28387,187San Jose/Silicon Valley 7,601,845 318,000 - 23.69 24.73 (81,425)Seattle/Puget Sound, WA56,216,928 340,563625,50112.01 12.04284,779Stockton, CA8,221,819 - - 18.86 18.16 58,138Walnut Creek/Pleasanton, CA12,561,714 - - 16.26 15.71(4,731)West Total 362,016,3611,981,5544,195,81613.32 13.29668,075U.S. TOTAL1,970,013,173 7,905,426 18,454,67813.36 13.253,394,323COLLIERS INTERNATIONAL |P. 9
  • 10. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | CLASS AAVG ANNUALQUARTERLY ANNUALEXISTING VACANCYVACANCY ABSORPTIONQUOTED RENTCHANGE CHANGE MARKETINVENTORY (SF)RATE (%) RATE (%)Q4 2012(USD PSF)IN RENTIN RENT DEC 31, 2012 SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012(%)(%) NORTHEAST Baltimore, MD13,228,62114.93 0.75.914.9314.92 1,726 Boston, MA 41,333,53713.92 1.51.713.9213.07 349,709 Hartford, CT6,660,37922.39-1.0 -0.322.3921.4760,970 New York, NY – Downtown Manhattan77,672,77718.75-0.1 -2.218.7517.54 940,170 New York, NY – Midtown Manhattan192,290,70112.60-1.20.712.6012.76(297,418) New York, NY – Midtown South Manhattan 32,865,338 6.79 0.1 11.7 6.79 8.33(504,207) Philadelphia, PA 32,656,95710.59-0.5-10.5910.5219,612 Pittsburgh, PA 18,279,017 7.64 2.94.1 7.64 7.1329,859 Stamford, CT 13,299,36421.77-1.9 -6.421.7723.01(164,957) Washington, DC 85,704,69811.90 0.32.111.9011.92 (20,351) White Plains, NY4,885,99917.00-2.0 -4.317.0018.10 (53,855) Northeast Total518,877,38813.30 -0.21.213.3013.22 361,258 SOUTH Atlanta, GA30,000,46218.87 0.1 -1.318.8718.53 101,522 Birmingham, AL* 3,322,35311.56 -1.011.5611.34 7,962 Charleston, SC1,043,494 3.33 1.2 10.1 3.33 2.55 8,134 Charlotte, NC16,040,59410.40 1.91.410.40 9.11 208,132 Columbia, SC1,926,91415.02 3.94.115.0210.1394,216 Dallas, TX 22,693,92423.68 0.92.323.6824.69(230,826) Ft. Lauderdale-Broward, FL4,454,23821.30-0.4 -0.521.3021.27 1,229 Ft. Worth, TX 5,850,05211.69 0.90.911.6910.5467,382 Greenville, SC1,871,715 8.83 6.1 -3.5 8.8315.32(121,511) Houston, TX26,119,76410.69 0.45.210.69 9.75 244,855 Jacksonville, FL6,830,48215.40 0.32.015.4014.9729,314 Little Rock, AR 2,636,353 9.72 0.20.6 9.7211.83(3,212) Louisville, KY 10,560,67213.05 0.4 -4.613.0514.57 100,131 Memphis, TN 1,966,54218.26-0.10.318.2618.63(7,338) Miami-Dade, FL9,758,44821.50-0.9 -3.221.5021.3118,821 Nashville, TN 3,953,42320.50-1.5 -6.720.5018.3784,077 Orlando, FL 5,784,86816.57-1.2 -2.116.5715.9337,028 Raleigh/Durham/Chapel Hill, NC5,633,684 8.74 0.4 -3.1 8.74 8.3322,893 Richmond, VA5,895,522 7.46 0.14.6 7.46 7.37 4,979 Savannah, GA642,46013.02 7.57.213.02 7.6597,201 Tampa Bay, FL 4,791,17413.98-0.52.013.9815.22 (59,515) West Palm Beach/Palm Beach County, FL 3,337,55722.51-0.33.222.5120.6960,785 South Total175,114,69515.620.71.015.6215.40 766,259*Absorption and vacancy figures for Birmingham account for direct space onlyP. 10 | COLLIERS INTERNATIONAL
  • 11. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | CLASS A (continued)AVG ANNUALQUARTERLY ANNUALEXISTING VACANCYVACANCY ABSORPTIONQUOTED RENTCHANGE CHANGEMARKET INVENTORY (SF)RATE (%) RATE (%)Q4 2012(USD PSF)IN RENTIN RENT DEC 31, 2012 SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012(%)(%)MIDWESTChicago, IL 60,846,877 37.360.30.714.5214.05 284,974Cincinnati, OH 8,815,068 21.96- -6.019.1122.06(260,407)Cleveland, OH9,728,269 21.33 -0.36.313.6813.34 32,992Columbus, OH 8,106,210 18.52 -1.4 -1.512.1511.14 82,018Detroit, MI9,120,878 22.80 -0.2 -3.117.1417.076,139Grand Rapids, MI 1,542,050 19.280.1 -8.122.3419.56 42,756Indianapolis, IN 9,928,804 19.032.0 -1.218.9218.30 50,070Kansas City, MO 10,276,792 18.90 -0.30.719.9119.892,029Milwaukee, WI5,411,144 20.172.80.913.0912.07 55,208Minneapolis, MN 13,618,828 16.526.9 15.312.3311.78 75,272Omaha, NE3,417,878 19.62 -0.61.7 4.22 4.54 (10,025)St. Louis, MO 10,678,000 17.730.5 -0.313.5313.78 (25,983)St. Paul, MN 2,773,960 13.35 -0.4 17.8 9.6410.19 (15,440)Midwest Total 154,264,75827.200.60.814.8514.64 319,603WESTBakersfield, CA 699,79817.40-- 4.35 3.863,413Boise, ID2,228,115 20.12 -2.68.1 7.05 5.21 200,470Denver, CO21,238,15830.00.14.213.5413.02 110,767Fresno, CA 1,058,046 24.00- -7.712.3712.37-Honolulu, HI 4,966,720 34.450.7 -1.013.3412.23 43,171Las Vegas, NV 807,58831.320.40.810.6711.60(7,551)Los Angeles, CA 17,749,600 36.12- -6.216.4618.00(267,100)Oakland, CA 10,198,245 30.72 -3.0 -3.0 9.8611.22(138,461)Phoenix, AZ9,459,620 22.86-1.520.0521.15(104,497)Portland, OR13,189,621 24.89-- 8.76 8.78(3,087)Reno, NV557,63521.31 -1.3 -7.520.8718.03 15,817Sacramento, CA 9,062,614 32.40-- 8.34 8.08 23,514San Diego, CA7,254,266 28.20- -0.417.6717.37 21,659San Francisco, CA 56,642,612 49.565.6 20.510.31 9.71 508,711San Jose/Silicon Valley3,365,127 31.83 -6.6 -0.725.8427.02 (40,361)Seattle/Puget Sound, WA 32,531,336 30.962.13.414.1213.60 428,837Stockton, CA 2,790,574 20.16- -4.527.0526.45 16,621Walnut Creek/Pleasanton, CA8,233,222 27.720.40.914.9715.44 (38,786)West Total202,032,89735.43-0.813.0712.96 773,137U.S. TOTAL 1,050,289,738 41.220.21.013.8713.742,220,257 COLLIERS INTERNATIONAL | P. 11
  • 12. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY EXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTION MARKET INVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF) NORTHEAST Baltimore, MD 86,786,838234,8741,163,140 12.6512.44386,882 Boston, MA 110,971,331 98,0961,563,851 19.3719.10314,921 Fairfield County, CT41,493,424 74,726- 12.5612.88-68,762 Hartford, CT12,251,551-- 14.9614.44 63,815 Long Island, NY 71,732,215768,000 55,000 10.7110.66718,538 New Jersey – Central 103,723,820315,670116,057 20.9220.70487,335 New Jersey – Northern137,967,000 30,000737,600 21.0321.09-52,196 Philadelphia, PA 110,578,994654,000322,005 15.1714.94802,694 Pittsburgh, PA89,275,846 52,000764,3957.57 7.06 46,342 Washington, DC 283,566,213-- 15.4415.83-1,118,510 Westchester County, NY37,071,839-- 15.0515.39 -126,457 Northeast Total 1,085,419,071 2,227,3664,722,048 15.7315.731,454,602 SOUTH Atlanta, GA171,243,642433,822674,097 17.0417.03363,892 Birmingham, AL* 14,213,847-- 18.4817.93 77,062 Charleston, SC 9,379,515- 75,000 15.0014.79 35,516 Charlotte, NC 75,365,988828,831108,596 13.3113.45626,394 Columbia, SC 5,016,258-- 24.0425.61-79,155 Dallas, TX 241,020,318204,1091,027,817 15.9415.571,050,842 Ft. Lauderdale-Broward, FL42,982,403-806,572 13.7313.716,984 Ft. Worth, TX 20,158,197-144,2337.73 7.25 97,536 Greenville, SC 5,093,005-- 18.5218.10 21,540 Houston, TX159,079,088 50,0004,394,827 14.2013.81664,309 Jacksonville, FL44,916,088 73,4232,607 13.3613.26 96,049 Little Rock, AR7,625,053- 46,000 12.5812.45-43,423 Memphis, TN 27,443,840-113,392 14.8214.46100,717 Miami-Dade, FL63,016,310 33,930162,063 13.9613.64229,620 Nashville, TN 14,842,231 28,000-7.49 7.51 23,248 Orlando, FL 53,927,670- 87,895 15.5814.95431,065 Raleigh/Durham/Chapel Hill, NC64,136,382-- 14.1513.97119,064 Richmond, VA34,412,752-- 11.7312.21 -164,213 Savannah, GA 1,534,208-- 23.6918.94 48,350 Tampa Bay, FL 71,219,715 66,927269,272 16.0815.69404,271 West Palm Beach/Palm Beach County, FL 28,655,101- 30,000 19.1818.30251,828 South Total 1,155,281,611 1,719,0427,942,371 15.0314.784,361,496*Absorption and vacancy figures for Birmingham account for direct space onlyP. 12 | COLLIERS INTERNATIONAL
  • 13. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | ALL INVENTORY (continued) EXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTIONMARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF)MIDWESTChicago, IL157,535,389 297,763- 17.0716.73783,012Cincinnati, OH35,718,611- - 20.1021.01-326,094Cleveland, OH107,371,768 710,100788,8669.94 9.97605,183Columbus, OH43,849,812 156,500111,000 11.8812.0656,993Detroit, MI137,172,7501,165,42531,232 19.0818.59 1,619,025Grand Rapids, MI11,557,283- 382,000 23.2823.1910,173Indianapolis, IN45,740,597-75,000 13.2913.1590,627Kansas City, MO 56,941,429- 1,510,765 13.4513.27103,240Milwaukee, WI 33,034,701 145,000- 11.5111.70 -59,970Minneapolis, MN 82,273,735- 931,700 14.3313.39776,569Omaha, NE 20,597,840 60,000 180,000 12.1212.1072,609St. Louis, MO 55,244,405- - 11.5311.08247,729Midwest Total787,038,3202,534,788 4,010,563 14.8614.62 3,979,096WESTBakersfield, CA5,994,188-81,5946.60 6.98 -22,693Boise, ID 11,093,685 196,235- 18.7718.98135,657Denver, CO 104,416,469- 745,767 14.2914.08126,306Fairfield, CA4,877,417- - 25.2825.70 -20,478Fresno, CA18,008,675-70,000 12.9913.25 -47,197Honolulu, HI 7,490,275-40,000 12.8912.88 9,218Las Vegas, NV 35,115,687-42,123 25.5524.64320,637Los Angeles, CA168,909,400 418,6001,213,700 17.7617.78410,100Los Angeles – Inland Empire, CA 21,626,300- - 22.8421.25344,823Oakland, CA 16,165,151- - 19.5418.11231,011Orange County, CA 80,477,400- 380,000 17.0816.61315,300Phoenix, AZ109,902,559 108,609375,482 21.5820.36 1,435,184Portland, OR44,445,096 100,083163,874 11.7111.19322,024Reno, NV 5,547,351- - 16.3715.9938,829Sacramento, CA73,472,600 130,000257,451 18.7417.82781,917San Diego, CA 70,818,124- 946,457 13.9213.59235,680San Francisco Peninsula 35,142,199 18,781 - 13.6914.03-102,740San Jose/Silicon Valley 54,745,633 318,000- 12.8612.42390,701Seattle/Puget Sound, WA 74,567,897-82,950 12.4710.98370,396Walnut Creek/Pleasanton, CA 32,987,041- - 12.7711.73343,070West Total 975,803,1471,290,308 4,399,398 16.5616.00 5,617,745U.S. TOTAL 4,003,542,1497,771,50421,074,380 15.5615.3115,412,939 COLLIERS INTERNATIONAL |P. 13
  • 14. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | CLASS AAVERAGE EXISTING QUARTERLYANNUALVACANCYVACANCY ABSORPTION ANNUAL QUOTED MARKET INVENTORY (SF)CHANGE IN CHANGE INRATE (%) RATE (%)Q4 2012 RENT (USD PSF)DEC 31, 2012 RENT (%)RENT (%) SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012 NORTHEAST Baltimore, MD30,282,85024.87-1.03-3.2315.9115.37362,930 Boston, MA 47,074,11924.74-1.55-3.0617.8017.88-40,309 Fairfield County, CT 17,597,47035.35-2.67 9.2413.2513.77-27,217 Hartford, CT 7,906,889 20.25-2.78-3.3913.5312.75 61,867 Long Island, NY23,077,97530.47 0.20 1.8411.4611.56-21,446 New Jersey – Central 60,391,07626.52-0.86-1.7822.4521.95546,337 New Jersey – Northern84,682,27426.28-1.05-1.2820.6220.42193,221 Philadelphia, PA 68,076,07324.73 0.91 2.9614.5414.27740,149 Pittsburgh, PA 17,179,19321.95 0.87 2.09 6.49 5.30148,053 Washington, DC132,646,60332.03-1.39-1.5115.2615.83 -745,611 Westchester County, NY 17,442,81926.42-0.38-2.8718.7219.26-94,133 Northeast Total 506,357,34127.65-0.92-0.6116.7416.73 1,123,841 SOUTH Atlanta, GA79,312,90522.34 0.68 0.8116.6116.34527,253 Birmingham, AL*8,943,059 21.09-0.80 0.4316.8115.96 76,173 Charleston, SC 3,942,925 23.18 0.17-2.5611.4511.49809 Charlotte, NC19,403,22522.80 0.62 6.1915.1816.61410,325 Columbia, SC973,18916.55-1.55-4.0013.7714.93-11,304 Dallas, TX 91,055,76323.30- 1.3016.2015.50634,612 Ft. Lauderdale-Broward, FL 10,963,05927.14 0.04-2.4418.8218.45 40,574 Ft. Worth, TX2,638,353 24.00--2.04 3.89 3.851,032 Greenville, SC 2,245,798 17.32 1.88-0.4015.6012.66 66,172 Houston, TX66,845,82228.20 3.26 3.1512.0011.44379,470 Jacksonville, FL 9,206,865 19.58--3.59 8.46 8.32 13,028 Little Rock, AR3,027,212 19.25 0.94 3.8918.9818.719,217 Memphis, TN8,113,880 21.44-0.79-1.02 8.42 8.10 25,608 Miami-Dade, FL 16,308,47530.52 0.07-3.0519.8118.70180,756 Nashville, TN7,288,561 23.23 0.13 6.32 5.34 5.87-39,206 Orlando, FL16,827,62820.93-1.60-3.7721.0819.88201,731 Raleigh/Durham/Chapel Hill, NC 24,532,19720.76-0.48-2.2114.3913.76154,190 Richmond, VA 13,564,69718.78-0.05 0.4814.2413.60 86,395 Savannah, GA490,03522.70 0.18 0.3523.7017.79 28,932 Tampa Bay, FL23,629,40222.78-0.35-2.1516.0714.48214,151 West Palm Beach/Palm Beach County, FL9,163,879 29.68-1.53-2.9418.1417.23 83,092 South Total 418,476,92923.80 0.61 0.5715.2314.70 3,083,010*Absorption and vacancy figures for Birmingham account for direct space onlyP. 14 | COLLIERS INTERNATIONAL
  • 15. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | CLASS A (continued)AVERAGEEXISTINGQUARTERLYANNUALVACANCYVACANCY ABSORPTION ANNUAL QUOTEDMARKET INVENTORY (SF) CHANGE IN CHANGE INRATE (%) RATE (%)Q4 2012 RENT (USD PSF) DEC 31, 2012RENT (%)RENT (%) SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012MIDWESTChicago, IL76,979,405 27.00-1.8918.23 17.70403,696Cincinnati, OH 15,916,607 20.54 0.390.2019.40 20.31 -144,815Cleveland, OH13,701,278 21.34-0.330.0510.44 10.05689,788Columbus, OH 18,133,071 19.05 0.372.1410.57 11.50 -27,569Detroit, MI33,643,164 20.52-0.24 -2.0115.52 15.72 -67,275Grand Rapids, MI2,206,876 17.50-2.78 -9.0028.84 28.2213,520Indianapolis, IN 12,403,471 18.00 0.391.5817.72 17.1085,772Kansas City, MO14,734,064 20.30 0.30 -1.9311.87 11.7814,100Milwaukee, WI 5,912,609 22.32 9.909.7910.93 10.5820,889Minneapolis, MN26,674,839 13.80-1.43 -0.5016.12 15.62131,289Omaha, NE 4,342,362 26.15-0.85 5.07 5.01 104,815St. Louis, MO25,996,388 21.89 0.05 -1.4010.62 10.79 -45,320Midwest Total250,644,13421.91 0.14 0.7715.2615.12 1,178,890WESTBakersfield, CA 2,697,867 24.00- - 4.74 5.28-14,426Boise, ID 3,108,058 15.12 0.130.4714.14 13.5717,779Denver, CO 34,321,698 23.74 1.324.4911.95 11.96-3,198Fairfield, CA 1,917,086 25.61-2.072.1126.88 29.77 -55,433Fresno, CA4,017,507 25.20- -17.26 18.85 -63,910Las Vegas, NV 4,979,076 29.28- -1.6134.96 33.0296,889Los Angeles, CA 102,533,800 33.96 0.711.4317.26 17.20455,100Los Angeles – Inland Empire, CA 5,194,800 23.52 1.032.0827.39 23.62195,866Oakland, CA 3,870,228 26.40- -0.9026.20 24.2376,225Orange County, CA32,834,800 25.56-0.93 -0.4717.93 16.96253,700Phoenix, AZ30,242,049 23.29 0.26 -1.0623.12 20.31918,319Portland, OR 11,012,912 22.95-0.350.3114.02 14.06-4,348Reno, NV2,989,478 18.62- -7.0913.90 13.9134,636Sacramento, CA 16,324,396 22.20-0.54 -1.6021.51 20.99185,646San Diego, CA23,418,247 32.88-4.1811.52 10.73184,465San Francisco Peninsula22,281,029 41.64-0.2910.16 13.53 14.09 -109,899San Jose/Silicon Valley27,077,797 39.07-1.348.1714.02 14.43145,393Seattle/Puget Sound, WA20,850,141 31.68 0.864.5510.38 8.57 132,984Walnut Creek/Pleasanton, CA15,972,148 25.92 3.8514.89 10.33 8.98 216,974West Total 365,643,11730.38 0.35 3.3716.2515.68 2,662,762U.S. TOTAL1,541,121,521 26.21-0.08 0.8215.9715.67 8,048,503COLLIERS INTERNATIONAL |P. 15
  • 16. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA CANADA | DOWNTOWN OFFICE | ALL INVENTORYEXISTING NEW SUPPLY UNDERVACANCY VACANCYABSORPTION MARKETINVENTORY (SF)Q4 2012 CONSTRUCTIONRATE (%)RATE (%) Q4 2012 DEC 31, 2012 (SF) (SF) SEP 30, 2012DEC 31, 2012 (SF) Calgary, AB 39,567,994256,657 1,661,0004.523.68 330,012 Edmonton, AB11,260,840117,768 -8.428.3013,280 Halifax, NS4,684,11038,948 190,00011.44 11.45-470 Montréal, QC49,428,581127,000304,000 5.014.27 365,660 Ottawa, ON15,526,94287,700 360,000 5.576.75-183,170 Regina, SK 3,801,824220,00080,0001.922.59 190,164 Saskatoon, SK* 2,319,464109,00050,0003.253.34 138,900 Toronto, ON 69,531,181464,455 2,784,6985.104.58 203,259 Vancouver, BC 24,408,48820,2991,563,8103.504.03-130,891 Victoria, BC 4,952,84980,455-7.798.28-14,428 Waterloo Region, ON3,772,982 - 66,075 14.87 14.2224,360 Winnipeg, MB11,188,648 - 130,375 6.596.59- CANADA TOTAL 240,443,903 1,522,2827,189,9585.355.04 936,676 *Saskatoon tracks but does not submit suburban inventory figures for this report CANADA | DOWNTOWN OFFICE | CLASS AAVG ANNUALEXISTINGQUARTERLYANNUAL VACANCY VACANCYQUOTED RENT ABSORPTION MARKETINVENTORY (SF) CHANGE CHANGE RATE (%)RATE (%)(CAD PSF) Q4 2012 (SF) DEC 31, 2012 IN RENT (%)IN RENT (%) SEP 30, 2012DEC 31, 2012 DEC 31, 2012 Calgary, AB 26,727,38960.21 -8.7 1.46 1.84-102,756 Edmonton, AB 9,074,91342.02 0.75.3 8.27 8.45 -16,593 Halifax, NS1,933,74632.35 -1.7 9.06 8.95 2,144 Montréal, QC23,075,59645.00 7.17.1 4.49 4.1382,257 Ottawa, ON 9,535,83051.60 3.56.7 4.52 4.92 -38,670 Regina, SK 1,094,91142.00 4.0 13.5 0.96 1.42 212,815 Saskatoon, SK 570,571 40.00 5.38.1 1.84 3.5967,509 Toronto, ON 40,130,32854.28 0.62.4 5.70 4.70 187,396 Vancouver, BC 10,029,23454.57-1.10.1 2.08 2.65 -60,827 Victoria, BC513,808 35.00-2.8 -7.4 9.43 4.8839 Waterloo Region, ON1,559,42925.66 - -0.812.4812.01 7,282 Winnipeg, MB 2,619,42833.50 - N/A4.76 4.76 - CANADA TOTAL 126,865,18351.42 1.74.5 4.46 4.24 340,596P. 16 | COLLIERS INTERNATIONAL
  • 17. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA CANADA | SUBURBAN OFFICE | ALL INVENTORYEXISTING NEW SUPPLYUNDERVACANCYVACANCYABSORPTION MARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%) Q4 2012 DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012 (SF) Calgary, AB 24,444,605256,657-8.549.34 40,263 Edmonton, AB9,110,948 117,768 315,15011.2411.13 103,952 Halifax, NS 6,545,97338,948 73,500 10.4510.98-152 Montréal, QC24,355,843127,000 153,516 8.938.55627,008 Ottawa, ON21,181,500 87,700 416,450 9.109.84 -78,742 Regina, SK 720,541--0.41 - - Toronto, ON 68,333,270250,000 924,250 8.127.47377,866 Vancouver, BC 27,698,230 20,2991,712,524 11.1310.00 309,956 Victoria, BC3,681,14380,455 121,000 8.519.39 19,167 Waterloo Region, ON 7,112,148 - 154,71010.7610.85 -3,876 Winnipeg, MB3,353,094 - 192,00012.2612.26- CANADA TOTAL 196,537,295978,8274,063,1009.178.95 1,395,442 CANADA | SUBURBAN OFFICE | CLASS A AVG ANNUALEXISTING QUARTERLYANNUALVACANCY VACANCY ABSORPTION QUOTED RENT MARKETINVENTORY (SF)CHANGE CHANGERATE (%)RATE (%)Q4 2012 (CAD PSF) DEC 31, 2012IN RENT (%)IN RENT (%) SEP. 30, 2012DEC 31, 2012(SF)DEC 31, 2012 Calgary, AB 11,635,48344.002.3 7.37.107.63176,873 Halifax, NS2,875,03627.44- -2.510.649.8420,869 Montréal, QC13,562,83427.00- -3.6 7.806.66272,484 Ottawa, ON12,123,11630.58 -2.8 -2.2 8.869.70 -69,890 Regina, SK 395,432 N/AN/AN/A - - - Toronto, ON 31,584,38930.59 -0.1 1.09.408.87306,382 Vancouver, BC 13,426,37933.500.4 -6.911.139.91179,328 Victoria, BC 770,93938.00- -5.0 8.39 13.9832,512 Waterloo Region, ON3,422,48124.15 -0.8 -0.610.399.9913,845 CANADA TOTAL* 89,796,08931.940.2 -0.5 9.088.72932,403*Edmonton and Winnipeg do not track Suburban Class A inventory. COLLIERS INTERNATIONAL |P. 17
  • 18. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | OFFICE INVESTMENTCBD CBD SUBURBAN SUBURBAN MARKET SALES PRICE CAP RATE SALES PRICE CAP RATE (USD PSF)(%) (USD PSF) (%) Atlanta, GA170.00 7.7 125.00 8.3 Baltimore, MD 48.01 131.82 7.5 Boise, ID84.73 7.4 Boston, MA 246.00 5.5 154.48 Charleston, SC 250.00 8.0 135.0011.0 Chicago, IL350.00 6.5 225.00 7.5 Cincinnati, OH 120.00 9.8 137.50 9.5 Columbia, SC 180.00 Columbus, OH67.4080.58 8.2 Dallas, TX150.00 7.0 Denver, CO 144.00 6.5 125.00 7.4 Detroit, MI 75.2910.347.89 Fairfield County, CT243.00 5.0 Fresno, CA 125.00 9.0 175.00 8.5 Ft. Lauderdale-Broward, FL 175.00 167.00 7.5 Grand Rapids, MI102.56 8.8 Hartford, CT 95.87 7.8 Houston, TX 200.00 7.3 Indianapolis, IN 165.00 9.0 155.00 8.5 Jacksonville, FL150.00 8.5 Las Vegas, NV 132.60 Long Island, NY 190.23 7.6 Los Angeles, CA 200.00 8.0 Los Angeles – Inland Empire, CA191.00 7.0 247.00 6.6 Memphis, TN 32.57 9.084.25 Miami-Dade, FL 285.00 6.0 239.00 5.4 Milwaukee, WI120.00 9.0 100.00 9.5 Minneapolis, MN 121.27 7.3 Nashville, TN200.00 7.0 120.00 7.0 New Jersey – Central172.00 7.5 New Jersey – Northern 190.00 7.9 New York, NY – Downtown Manhattan533.00 5.0 New York, NY – Midtown Manhattan 712.00 5.0 New York, NY – Midtown South Manhattan 400.00 5.2 Oakland, CA152.47 7.5 111.49 8.5 Orange County, CA 350.00 6.3 Orlando, FL175.00 8.0 135.00 8.3 Philadelphia, PA 150.00 8.0 159.00 8.0 Phoenix, AZ 65.00 8.0 108.00 7.5 Pittsburgh, PA 130.00 8.0 105.00 8.3 Portland, OR 175.11 8.8 131.62 7.3 Sacramento, CA 151.44 128.97 8.9 San Diego, CA244.52 6.7 218.44 6.8P. 18 | COLLIERS INTERNATIONAL
  • 19. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | OFFICE INVESTMENT (continued)522 offices in MARKETCBDSALES PRICE CBD CAP RATE SUBURBANSALES PRICE SUBURBAN CAP RATE62 countries on (CAD PSF) (%) (CAD PSF)(%)6 continents San Francisco, CA500.00 5.0United States: 147 San Francisco Peninsula 250.00 7.0 Canada: 37Latin America: 19 San Jose/Silicon Valley280.00 7.0 350.00 6.0 Asia Pacific: 201 Savannah, GA 150.00 9.5 120.00 9.8 EMEA: 118 Seattle/Puget Sound, WA170.22 4.4 367.60 7.4 • $1.8billion in annual revenue• 1.25billion square feet under St. Louis, MO 85.00 9.8 120.00 8.8 management Stamford, CT72.00 8.0• Over 12,300 professionals and staff Tampa Bay, FL115.62 7.4 120.87 9.0 Walnut Creek/Pleasanton, CA210.00 7.5 180.00 8.0 Washington, DC 575.00 5.6 260.00 6.5 COLLIERS INTERNATIONAL West Palm Beach/Palm Beach County, FL122.00 188.00 6.4 601 Union Street, Suite 4800Seattle, WA 98101 Westchester County, NY125.00 8.0 TEL +1 206 695 4200 White Plains, NY72.00 8.0 U.S. AVERAGES* 204.62 7.4 163.49 7.8FOR MORE INFORMATION CANADA | OFFICE INVESTMENTK.C. Conway Calgary, AB550.00 5.5 460.00 5.8 Executive Managing Director,Market Analytics | USA Edmonton, AB 354.67 5.8TEL + 678 458 34771EMAIL kc.conway@colliers.com Montréal, QC 275.00 6.5 190.00 7.3 Ottawa, ON 360.00 6.3 165.00 7.4 James CookDirector of Research | USA Regina, SK 125.00 7.0TEL +1 602 633 4061 Saskatoon, SK240.00 7.0EMAIL james.cook@colliers.com Victoria, BC 354.00 6.2 280.00 6.3 CONTRIBUTORS Waterloo Region, ON140.00 7.3 150.00 7.5 Jeff SimonsonSenior Research Analyst | USA CANADA AVERAGES* 299.83 6.4 249.00 6.8Jennifer Macatiag*Straight averages used.Graphic Designer | USAGlossaryCliff PlankNational Director | GIS & MappingInventory — Includes all existing multi- or single-Annual Quoted Rent — Includes all costs associatedtenant leased and owner-occupied office properties with occupying a full floor in the mid-rise portionCopyright © 2013 Colliers International.greater than or equal to 10,000 square feet (net of a Class A building, inclusive of taxes, insurance,rentable area). In some larger markets this minimummaintenance, janitorial and utilities (electricity The information contained herein has been obtained from sourcesdeemed reliable. While every reasonable effort has been made tosize threshold may vary up to 50,000 square feet.surcharges added where applicable). All office rents inensure its accuracy, we cannot guarantee it. No responsibility isDoes not include medical or government buildings.this report are quoted on an annual, gross per squareassumed for any inaccuracies. Readers are encouraged to consulttheir professional advisors prior to acting on any of the material foot basis. Rent calculations do not include sublease space. contained in this report.Vacancy Rate — Percentage of total inventoryphysically vacant as of the survey date, including Cap Rate — (Or going-in cap rate) Capitalization ratesdirect vacant and sublease space.in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap ratesAbsorption — Net change in physically occupied space are calculated by dividing net operating income (NOI)over a given period of time. by purchase price.New Supply — Includes completed speculative andNote: SF = square feetbuild-to-suit construction. New supply quoted on a net MSF = million square feetbasis after any demolitions or conversions. PSF = per square footAccelerating success. CBD = central business district COLLIERS INTERNATIONAL |P. 19
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    Colliers International North American Office Highlights Q4-2012
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    • 1. Q4 2012 | OFFICENORTH AMERICAHIGHLIGHTS Unlocking 2013 Office Property Performance What will be the right combination in 2013? K.C. CONWAY, MAI, CRE EMD | Market AnalyticsMARKET INDICATORSRelative to prior period KEY TAKEAWAYSUSUS Canada Canada • The North American and U.S. office vacancy rates declined further during Q4 2012 to 14.09%Q4Q1 Q4 Q1 20122013*2012 2013*and 14.63%, respectively. This was the fourth consecutive quarter of improvement for the 6.4billion square feet of inventory in the 85 North American office markets tracked by Colliers.VACANCY • The market uncertainty and volatility of 2H2012 inhibited neither office leasing or transactionNET ABSORPTION  activity. Q4 North American net absorption of 21.1 MSF was more than double Q3’s 10.4 MSF.CONSTRUCTION2012 total net absorption was 50.7 MSF (roughly the office inventory of Ft. Lauderdale), the bestsince the 2008–2009 financial crisis. RENTAL RATE *Projected• Major office property transactions totaled $77.6 billion in 2012, and surged at year-end 2012.Construction is the change in Under ConstructionQ4’s $29.1 billion in office building sales surpassed all prior quarters in 2012, according to RealCapital Analytics.NORTH AMERICAN OFFICE MARKETSummary Statistics, Q4 2012 NORTH AMERICAN OFFICE VACANCY, INVENTORY AND ABSORPTION – Q4 2012US CANNAVACANCY RATE14.63% 6.80% 14.09%Change From Q3 2012 -0.21% -0.26% -0.21% ABSORPTION (MSF) 18.8 2.321.1NEW CONSTRUCTION (MSF) 9.1 1.5 10.6UNDER CONSTRUCTION (MSF)39.5 11.350.8 Absorption Per Market (SF)q3 12 - q4 122,500,000ASKING RENTS PER SF US CAN 1,250,000250,000 -250,000 Downtown Class A $41.22 $51.42 -1,250,000 -2,500,000 Change from Q3 2012 0.17% 1.67%Suburban Class A $26.21$31.94 Sq. Ft. By Region 2 billion 2.00000000 1 billion 1.00000000 Change from Q3 20120.08%0.16% 200 mil. 2.00000000 Occupied Sq. Ft.Total_OffSF-Vacant_OffSFVacant_OffSF Ft. Vacant Sq.WWW.COLLIERS.COM
  • 2. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAKEY TAKEAWAYS (continued)• Capital is migrating out of the risk curve for investment in office building assets in search of yield. This trend, reported by Colliers in previous 2012 reports, was corroborated by the recent Association of Foreign Investors in Real Estate report in which four of the top five markets for investment were in the U.S., including Houston for the first time.• “ICEE” office markets are still hot. Intellectual Capital, Energy and Education (ICEE) markets continue to capture a disproportionate share of North American office absorption. During 2012, two-thirds of the 10 North American MSAs with the greatest absorption are characterized as ICEE markets. We see this trend continuing in 2013 as technology, energy and knowledge gateway centers remain the dominant generators of office-related employment.• Medical Office has been a sleeper office sub-property type that saw a 30% growth in transaction activity in CY 2012 to $6.1 billion, or just shy of the 10% total $77.6 billion in CY 2012 office property sales. And, approximately half of the 71 MSF of office space under construction in the U.S. at the onset of 2013 is for medical-related use.• Recovery in housing is an overlooked office demand driver that will gain additional traction in 2013.IN THIS QUARTER’S REPORT, WE TAKE A LOOK AT THECOMBINATION TO UNLOCKING VALUE IN 2013:CANADIAN OFFICE ABSORPTION BY MARKET Q4 2012 RIGHT 14: In 2013 look for North American vacancy to drop below 14%, fueled byMontréal, QC 365.7 another 50 MSF of absorption.Calgary, AB330.0203.3 LEFT 80:total office transactions above Toronto, ON 190.2 $80 billion Regina, SK Saskatoon, SK 138.9 RIGHT 10: CMBS office property Waterloo Region, ON 24.4 delinquencies rate below 10%Edmonton, AB13.3 LEFT ICEE: Office job growth in Tech/Winnipeg, MB0.0 Energy/Education MSAs outperformsHalifax, NS-0.5 FIRE MSAs for a third consecutive year Victoria, BC -14.4 Vancouver, BC -130.9 RIGHT MO: Medical Office is the emerging -183.2Ottawa, ON leader among office sub-property sectors -300.0 -200.0-100.0 0.0100.0200.0 300.0 400.0See page 7 for details ThousandsCANADIAN OFFICE UNDER CONSTRUCTION BY MARKET Q4 2012Toronto, ON 2.78 Calgary, AB1.66Vancouver, BC 1.56 Ottawa, ON0.36 Montréal, QC0.30 Halifax, NS 0.19 Winnipeg, MB0.13Regina, SK0.08Waterloo Region, ON 0.07Saskatoon, SK 0.05 Victoria, BC 0.00Edmonton, AB0.000.00.5 1.01.52.02.5 3.0 Millions Note: Q3 data reported for Winnipeg, MBP. 2| COLLIERS INTERNATIONAL
  • 3. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAIN BRIEF: OFFICE OUTLOOK 2013 North American Downtown Markets:2012 finished—and 2013 began—as Colliers observed in fall 2012: with progress on all fronts.Excluding renewals, of the leases signed• North American Office Vacancy falls to just 14.09% at YE 2012. this quarter, did most tenants:• Net leasing activity best in five years: i) 21.1 MSF in Q4 2012; and ii) 50.7 MSF for CY 2012• A 19% surge in office building sales surpasses 2004 transaction volume (3,000+ properties Hold Steady totaling approximately $78 billion during 2012)69.1%Expand16.2%Despite the harmful summer “UV (Uncertainty & Volatility) rays” during 1H2012, and lingering anxietyContractsurrounding the U.S. fiscal debt crisis, ongoing Eurozone recession, the cost and logistics of 14.7%implementing Obamacare, and anemic job growth (150,000/month) for two consecutive years, officereal estate is persevering and returning to a state of balance. However, the recovery is broadening,both in the factors that have driven it over the past 12 months, as well as the markets that it’s reaching.No longer is the recovery confined to the CBDs of the “sexy six” core MSAs of New York, Boston,Chicago, Los Angeles, San Francisco and Seattle; it’s expanding to suburban submarkets andsecondary MSAs. Real Capital Analytics’ Office Year In Review report noted a 31 percent increase in North American Downtown Markets:What was the trend in Free Rent (in months)suburban office building sales during 2012, and a 40 percent increase in office building sales outsideoffered by CBD landlords this quarter?the six core MSAs. While this new interest is driven by a dearth of assets in the core MSAs and thesearch for yield in response to Federal Reserve monetary policy and cap rate compression, it has beenoffice job growth in technology, energy and primary-education focused MSAs (what Colliers coined theIntellectual Capital, Energy and Education, or “ICEE” markets in 2011) that has defined which secondary Samemarkets were participating in this broadening recovery in the office property sector thus far. Less 80.9%14.7%MoreIn 2013, two other positive influences will impact this expansion: the housing recovery and growth in 4.4%medical office demand. Both are broad-based across the U.S. and will have more of an effect onsuburban office submarkets than CBDs. Why? First, professional services associated with a rise innew home construction and existing home sales activity will rebuild in proximity to this increasinghousing activity in the suburbs. Second, our healthcare delivery model is shifting from one concentratedon expensive urban hospital campuses to less capital-intensive, suburban outpatient facilities.North American Downtown Markets:The ICEE, housing, and medical office factors, along with the continuing search for yield by investors, What was the trend for tenantadd up to M.O.T.S (More Office To Secondaries) in 2013. As the diagram below depicts, risingimprovement allowances offered byabsorption and modest new supply are driving vacancy down, and the requisite conditions to improveCBD landlords this quarter?NOI are in place to absorb any interest rate risk in 2H2013. Hold Steady 91.2% U.S. OFFICE MARKET Q4 2010–Q4 2012 Contract Expand2.9% 5.9% 20.016.11 15.57 15.36 15.14 18.015.03 14.9614.88 14.83 14.6316.0 16.014.0 14.0 12.0 12.0 North American Suburban Markets:Vacancy % 10.0 Excluding renewals, of the leases signed 10.0 8.0this quarter in your CBD/downtown,8.0 did most tenants: 6.06.04.04.0 2.0 Expand2.030.9%Hold Steady60.3%--Q4Q1Q2 Q3 Q4Q1Q2 Q3Q4 Contract 8.8% 20112012Absorption MSFCompletions MSFVacancy % COLLIERS INTERNATIONAL |P. 3
  • 4. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAVacancyFrom a regional perspective, Canada has the lowest average vacancy rateat 6.8 percent; and in the U.S., the Northeast has the lowest vacancy ratejust shy of 14 percent. The highest vacancy rate among North Americanregions is the Western U.S. at 15.27 percent. The South and Midwest haveaverage regional vacancy rates of 14.81% and 14.71%, respectively.Housing has been slow in its recovery in both these regions, and the jobgrowth has been more focused on manufacturing, transportation anddistribution, favoring industrial real estate over office. USCANA Vacancy Rate:14.63% 6.80% 14.09%BEHIND THE STATISTICS & BEYOND THE BASICSChange from Q3 2012-0.21%-0.26%-0.21%Scope of Colliers Office Outlook Report: Colliers monitors office propertyconditions in 85 North American markets from Toronto to Tampa, totalingAbsorption6.4 billion square feet of inventory. Approximately 93 percent (6.0 billionThe final tally on 2012 net office absorption was not in the cards insquare feet) of this inventory is located in the United States.mid-2012, when it appeared that tenants and businesses were pulling backfrom leasing activity driving absorption down 6% over the prior six-monthThe largest 20 North American markets (those with at least 100 MSF ofperiod (2H2011). However, despite the market’s anxiety over the Novemberexisting inventory) constitute approximately 60 percent of the 6.4 billion2012 election and the Fiscal Cliff, 2012’s net office absorption had itssquare feet of North American office space tracked by Colliers. All of thebest performance since the 2008–2009 financial crisis. Q4 net absorption>90 million-square-foot markets are located in the U.S., except one: Toronto.was more than double that for any prior quarter during 2012 (21.1 MSF inWith respect to 2012 net absorption, just 10 of the 85 markets accountedfor 53 percent of the 50.7 MSF of net absorption, and all but one marketQ4 compared to 10.0 MSF for the rest of the year).(Calgary) are located in the U.S. Below are the ten absorption-leadingMSAs for 2012—seven of which are ICEE markets.Which markets outperformed and why? Examination of the top ten NorthAmerican markets with respect to absorption in Q4 and YTD 2012 revealsthe impact of ICEE employment drivers, commencement of a true housing ICEE MARKETS LEAD IN 2012 ABSORPTION recovery, and importance of having a nationally or regionally recognizedmedical center.MSA2012 ABSORPTION 1Houston (ICEE) 4.50 MSFTOP MARKETS FOR ABSORPTION MSA Q4 2012MSA CY 2012 2Dallas (ICEE)2.90 MSFDetroit 4.50 MSF1 1.66 MSF Houston (Auto + Housing)(ICEE) + Medical Center 3 Atlanta (ICEE)2.80 MSF2.90 MSF2Phoenix1.46 MSF Dallas(ICEE) + Medical Center 4 Detroit 2.75 MSF Atlanta 2.80 MSF3Chicago 1.13 MSF (Housing Recovery) (ICEE) + Medical Center 5Chicago2.70 MSFMontreal 2.75 MSF4 0.99 MSFDetroit (ICEE)Medical Center Philadelphia 2.70 MSF 6 Calgary (ICEE) 2.5 MSF 5 0.98 MSFChicago (ICEE)Medical Center Houston 2.5 MSF6 0.93 MSFCalgary (ICEE)(ICEE) 7Phoenix 2.4 MSFBoston Phoenix7 0.93 MSF 2.4 MSF (ICEE) (Housing Recovery) 8 Boston (ICEE)2.2 MSF Dallas 2.2 MSF8 0.84 MSFBoston (ICEE)(ICEE) + Medical Center 9 Philadelphia (ICEE)2.2 MSF 2.2 MSF9 Minneapolis 0.82 MSF Philadelphia(ICEE) + Medical Center 10Seattle (ICEE) 2.2 MSF 2.2 MSF 10Sacramento 0.82 MSFSeattle(ICEE) + Medical CenterP. 4 | COLLIERS INTERNATIONAL
  • 5. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICALooking at this list, several themes emerge:Association of Foreign Investors in Real Estate’s annual 2013 ForeignInvestment Survey ranked the U.S. as the top place overall to invest; four• The overlapping seven MSAs: Seven of the top ten most active U.S. markets were among their top five picks, including Houston, which markets for leasing activity in Q4 were also among the ten most active had never before made this report’s global ranking. MSAs for all of calendar 2012. Houston, Dallas, Detroit, Chicago, Phoenix, Boston, and Philadelphia are prominent in both categories.Construction ActivityTo assess the risk of overbuilding, new construction activity needs• The predominance of ICEE: Seven of the top ten markets for netto be considered from three perspectives: 1) new supply as a percent absorption in 2012 are MSAs with an ICEE employment profileof existing inventory; 2) geographic concentration; and 3) sub-property (technology, energy and/or primary education).type concentration.• The increasing role of housing and medical office: However, only five of the top ten markets for Q4 leasing activity are ICEE MSAs. At the onset of 2013, approximately 78.5 MSF of new office supply is What explains the difference, and what explains the emergence of underway in the U.S. and Canada, according to Dodge Pipeline. That MSAs like Atlanta, Detroit and Phoenix? The answer is two-fold:activity translates to a North American new supply to existing inventory 1) the real housing recovery is taking hold in even the most ratio of 1.2%. Historically, only when this ratio passes 2.0% is it considered distressed housing markets, such as Atlanta, Detroit and Phoenix;elevated and indicative of overbuilding risk. What’s more, the current and 2) high-profile medical centers are strongly impacting demandsupply-to-inventory ratio is actually much lower for most U.S. office for medical office space: Eight of the leading MSAs for absorption markets due to geographic and sub-property type concentration. in 2012 have nationally or regionally recognized medical centers.With respect to sub-property type construction, 51% of the 78.5 MSF ofLooking forward to 2013, the only brake on office leasing activity in key total new supply is medical-office-related construction. Of the remainingenergy markets—Dallas, Denver, Houston, Oklahoma City, Philadelphia 38.5 MSF, 17.55 MSF (45.7% of the non-medical office new supply) is(impact of Bakken shale), and Calgary—will be the delayed delivery of new concentrated in just five states. The following table delineates thesespace under construction. Houston and Denver can’t complete new space geographic and sub-property type ratios:fast enough to keep pace with demand. ICEE will also continue to be animportant office space demand driver in markets like Atlanta and Detroit New Supplywhere auto technology is fueling demand for engineers, and the officeDelineation Ratio (%) (MSF)space to house them. (In 2012, Porsche and General Motors both madematerial commitments to locating auto technology centers in Atlanta.) North America 78.5100.0And, the housing recovery will benefit suburban office space demand ascontractors and professional service providers (closing attorneys, Canada 7.2 9.2architects, engineers, building inspectors, etc.) rebuild or expand theiroperations to service housing activity of approximately 1.0 million new United States 71.391.8units—after years of less than half that level of activity. Atlanta, Charlotte,Nashville, Phoenix, Tampa, and inland California markets will see the mostOffice Property 78.5100.0benefit from this housing recovery in 2013. In aggregate, 2013 shouldsurpass 2012’s 50 MSF of net absorption by conservative estimates of15%–20%, or 57.5 to 60.0 MSF in total. Market forces will see 2H2013 Medical Office 40.0 51.0disproportionately higher net leasing activity than 1H2013, as was the casein 2012. Non-Medical Office 38.5 49.0Transaction ActivityU.S. Non-Medical Office 38.5100.0Transactions of major office property were also uninhibited by 2H2012uncertainty. There were more than 3,000 transactions in 2012, totaling Top 5 States17.545.7$77.6 billion, with a noticeable surge at year-end 2012: the $29.1 billion inQ4 office building sales surpassed all prior quarters in 2012, according toTexas 6.7 17.4Real Capital Analytics. As in recent years, New York, San Francisco, LosAngeles, Washington D.C., and Seattle accounted for approximately 50percent of the total dollar volume of office building sales during 2012.California4.912.8Houston and Denver (two key ICEE MSAs) now rank among the topmarkets for office building transaction volume. Pennsylvania 2.56.4The $77.6 billion in office transaction activity from 2012 is likely to beNew York 2.05.2surpassed in 2013, given the amount of idle domestic and foreign capitalsearching for yield in tangible assets, such as commercial real estate. The New Jersey1.5 3.9 COLLIERS INTERNATIONAL |P. 5
  • 6. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA ENGINEERING NEWS-RECORD’S CONSTRUCTION COST INDEX YEARJAN FEB MARAPR MAYJUN JUL AUGSEP OCTNOV DECAVG2013 9437 9453 Note: Construction Costs never dropped post 2007 & are rising at a faster pace.2012 9176 9198 9268 9273929092919324 9351 93419376 93989412 93082011 8938 899890119027903590539080 9088 91169147 91739172 90702010 8660 867286718677876180558844 8837 88368921 89518952 8799 20098549 8533 8534 8528857485788566 8564 85868596 85928641 8570 20088090 8094 8109 8112814181858293 8362 85578623 86028551 8310 20077880 7880 7856 7865794279397959 8007 80508045 80928089 7966 20067660 7689 7692 7695769177007721 7722 77637883 79117888 7751 20057297 7298 7309 73557398 7415 7422 7479 75407563 76307647 7446 20046825 6862 6957 7017706571097126 7188 72987314 73127308 7115 20036581 6640 6627 6635664266946695 6733 67416771 67946782 6694 20026462 6462 6502 6480651265326605 6592 65896579 65786563 65382001 6281 6272 6279 6286628863186404 6389 63916397 64106390 6343 20006130 6160 6202 6201623362386225 6233 62246259 62666283 6221INDEX METHODOLOGY: 200 hours of common labor at the 20-city average of common labor rates, plus 25 cwt of standard structural steel shapes at the mill price prior to 1996 and the fabricated20-city price from 1996, plus 1.128 tons of portland cement at the 20-city price, plus 1,088 board-ft of 2x4 lumber at the 20-city price.The good news is that the U.S. ratio of new supply to inventory (excludingCAPITAL MARKETSmedical office construction) is less than a one-half of one percent—the What is better than improving office property type fundamentals? Forlowest since 2003. And, only 21 MSF of new construction is underway those that purchased any of the 3,000 office properties that traded inoutside of the five most active states, where energy and technology 2012, the answer is availability of capital. Domestic and foreign sourcescompanies, such as Exxon Mobil and Shell Energy in Texas and Endo are flush with capital ready to invest in tangible assets like real estate, thatPharmaceutical in Pennsylvania, account for 60 percent of activity. can offer 2.5 to 3.0 times the yield offered by the U.S. government’s10-year Treasury bond. And, the CMBS debt markets are opening up againHowever, rising construction costs are a concern that spans all commercialafter four consecutive years of annual new issuance below $50 billion.property types. It may surprise many to learn that construction costs Underwriting terms and pricing spreads have also compressed in favor ofnever actually declined during the 2008–2009 financial crisis and the borrowers: Improving market conditions have enabled even propertiesensuing recession. As documented by the Engineering-News Record,with elevated vacancy rates to become financeable again due to the lowConstruction, costs have risen 17% since the end of 2007, and are up over DSCR hurdle provided by sub-5.0 percent interest rates and 90 percent5.0 percent since February 2011. Investors and developers considering LTVs. Declining CMBS delinquency rates have further aided new issuancenew construction investments should budget construction cost increases at interest, and have CMBS investors enthusiastic about 2013 new issuancedouble the CPI for 2013 and 2014, due to pressures on labor and materials.increasing 50 percent over 2012’s $50 billion level to $75 billion. If youhave tenants, and can meet a 1.4 DSCR using a 4.5% loan coupon, thecapital markets are once again open to refinance your office building. PERCENTAGE 30+ DAYS DELINQUENT BY PROPERTY TYPE 12PERCENTAGE 30+ DAYS DELINQUENT BY PROPERTY TYPE JAN ‘13 DEC ‘12 NOV ‘123 MON6 MON1 YEAR10.3410.16 10.13 Industrial11.3211.2411.4811.5311.7212.1410.04 9.99 10 9.68 9.80 9.69 9.71 9.719.579.52 9.37Lodging11.7711.7312.2411.2413.06 12.09 Multifamily13.4313.9814.21 14.26 15.6915.39Office10.4810.6610.37 10.20 10.698.90 8Jan 2012Mar 2012May 2012Jul 2012Sep 2012Nov 2012Jan 2013Retail 7.797.627.758.03 8.03 7.88Source: Trepp – January 2013 CMBS Delinquency ReportSource: Trepp – January 2013 CMBS Delinquency ReportP. 6 | COLLIERS INTERNATIONAL
  • 7. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA THE COMBINATION TO UNLOCKING 2013 OFFICE PROPERTY PERFORMANCE RIGHT 14 – Vacancy:LEFT ICEE – Office Demand Drivers:If the absorption momentum from 2H2012 carries over into The greatest opportunity for value enhancement and yield will2013 and Congress can maneuver its fiscal debt obstacleremain in those secondary markets with an ICEE employmentcourse in 1H2013, the North American office vacancy rate will declineprofile. Traditional FIRE (Finance Insurance and Real Estate) markets arebelow 14.0 percent for the first time since 2005. Office property investorsgoing to face office absorption headwinds as financial institutions reduceare keenly focused on the need for improvement in NOI in office properties operating costs and the amount of office space they occupy. Financialgoing forward to be positioned to absorb higher interest rate costs 3-5institutions will be returning office inventory to the market underminingyears out. Cap rate compression has aided property values the past two recent improvement in vacancy. For this part of the combination, turn toyears, but future value enhancement will have to be unlocked through NOI ICEE vs. FIRE.improvement (i.e., increasing occupancy and rental rates).RIGHT MO – Medical Office: LEFT 80 – Office Transaction Activity: The role of medical office space in the overall office vacancy With improving office property fundamentals and cheap debt topicture warrants monitoring in 2013, particularly as the Obama leverage transactions to maximize yield, 2013 should see office administration’s healthcare legislation and mandated healthcare exchangestransaction activity surpass the $80 billion mark by as much as 20%. The are implemented. Due to strong demand and an absence of much newopportunity to unlock value here is in quality assets in secondary ICEEsupply since 2007, demand for medical office space has risen dramaticallymarkets, such as Atlanta, Austin, Baltimore (now a post-Panamax readyand is fueling a boom in new construction. The states with the mostport), Denver, Fort Worth, and Houston.medical office construction activity are Texas, California, Maryland, New York, North Carolina and Ohio. Medical office offers an unlocked opportunity RIGHT 10 – CMBS Office Delinquency: as contraction continues among traditional users of office space, suchFor the capital markets to contribute to the improving office as financial services firms. Do your homework before jumping into thisproperty conditions, CMBS delinquency rates need to continue sub-property sector, though. Vacancy and rental rates vary widely, andon their downward trajectory and remain south of 10 percent overall. Asthis subsector lacks the same availability of data and transparency as thenew issuance increases to a level north of $50 billion (increases thegreater North American office market.denominator in the delinquency calculation), and special servicerscontinue to resolve in excess of $1.0 billion in delinquent or defaulted loans(decreases the numerator portion of the delinquency ratio calculation),CMBS delinquency is likely to remain below 10 percent. This trend needsto translate over to the office property sector. With a January CMBS officedelinquency rate of 10.48%, this ratio should decline further, and maybeeven drop below 10%, as mature legacy office property loans are finallyable to refinance. CMBS delinquency below 10 percent is critical to capitalmarket confidence and unlocking more opportunity for office propertyleverage in 2013.Houston COLLIERS INTERNATIONAL |P. 7
  • 8. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORYEXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTION MARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012 DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF) NORTHEAST Baltimore, MD 28,840,782234,874- 14.06 14.029,076 Boston, MA60,725,404 98,0962,435,000 14.08 13.06616,698 Hartford, CT 9,769,060-- 21.24 20.72 50,896 New York, NY – Downtown Manhattan110,942,138-5,200,000 16.09 15.36814,431 New York, NY – Midtown Manhattan 227,532,283-1,052,150 11.94 12.04(226,585) New York, NY – Midtown South Manhattan 165,368,697- 850,000 7.968.03(119,601) Philadelphia, PA43,133,883654,000- 11.17 10.76178,159 Pittsburgh, PA32,161,109 52,000 800,000 9.6810.9(129,087) Stamford, CT18,966,293-- 19.55 21.00(274,722) Washington, DC 140,909,953-1,903,911 10.44 10.48 (59,655) White Plains, NY 7,741,025-- 15.19 15.78 (45,062) Northeast Total 846,090,627 1,038,97012,241,06111.86 11.77814,548 SOUTH Atlanta, GA 49,933,614433,822 450,00017.04 16.94 47,727 Birmingham, AL*4,338,335-- 22.00 19.80 95,482 Charleston, SC 2,068,469-52,000 7.707.249,369 Charlotte, NC 22,511,630828,831-8.807.94193,649 Columbia, SC 4,490,309-- 16.80 14.21116,125 Dallas, TX34,744,566204,109- 26.98 27.58(208,846) Ft. Lauderdale-Broward, FL 8,003,061-- 16.49 16.33 12,534 Ft. Worth, TX 10,400,974- 154,80113.05 12.14 94,885 Greenville, SC 3,143,679- 235,00012.24 15.68(107,938) Houston, TX 36,514,081 50,000- 14.45 13.72269,002 Jacksonville, FL15,994,027 73,423- 14.66 14.42 30,994 Little Rock, AR6,422,699-- 11.30 12.48 (22,714) Louisville, KY43,630,770300,000- 11.80 11.89228,712 Memphis, TN6,108,640-26,00014.77 14.666,481 Miami-Dade, FL18,491,614 33,930- 18.29 18.36 (12,903) Nashville, TN 12,087,245 48,000- 14.76 13.52167,473 Orlando, FL 12,744,796-- 11.83 11.86(3,379) Raleigh/Durham/Chapel Hill, NC13,657,917--6.496.08 55,964 Richmond, VA17,066,905- 112,00010.76 10.70 10,479 Savannah, GA 825,240 72,072- 15.21 14.18 68,561 Tampa Bay, FL8,607,635 66,927- 12.91 13.36 (39,132) West Palm Beach/Palm Beach County, FL 10,130,113-- 17.79 16.69110,753 South Total 341,916,319 2,111,114 1,029,80115.10 14.881,123,278*Absorption and vacancy figures for Birmingham account for direct space onlyP. 8 | COLLIERS INTERNATIONAL
  • 9. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY (continued) EXISTING NEW SUPPLY UNDERVACANCYVACANCY ABSORPTIONMARKETINVENTORY (SF)Q4 2012 CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF) (SF) SEP 30, 2012 DEC 31, 2012(SF)MIDWESTChicago, IL 159,986,353 297,763 - 13.45 13.23347,362Cincinnati, OH 18,047,286 - - 18.12 18.095,408Cleveland, OH34,140,929 710,100475,00019.26 19.07 66,433Columbus, OH 19,597,350 395,500280,00011.00 11.90 36,469Detroit, MI26,153,283 1,165,425 - 21.04 20.88 42,065Grand Rapids, MI5,461,588 - - 23.24 22.34 49,026Indianapolis, IN 23,453,317 - 18,00013.71 13.34 94,650Kansas City, MO34,664,036 -215,00014.60 14.43 61,577Milwaukee, WI19,887,288 145,000 - 13.71 13.39 62,655Minneapolis, MN31,840,763 - - 15.13 14.98 46,977Omaha, NE 6,358,92860,000 -7.168.539,192St. Louis, MO27,493,907 - - 16.52 16.66 (37,405)St. Paul, MN 12,904,838 - - 13.85 13.824,013Midwest Total419,989,8662,773,788988,00014.98 14.86788,422WESTBakersfield, CA 3,020,093 - -8.867.62 44,571Boise, ID 3,741,536 241,208260,00010.95 10.24 66,851Denver, CO 34,251,23539,656112,00012.43 12.26 70,574Fresno, CA3,284,713 - - 11.40 11.66(8,393)Honolulu, HI7,119,083 - - 14.00 13.21 55,973Las Vegas, NV 4,192,128 -458,20012.31 12.37(2,488)Los Angeles, CA31,942,700 418,600229,50018.46 19.03(178,200)Oakland, CA16,891,513 - - 12.90 13.45 (92,321)Phoenix, AZ21,016,381 203,609 - 21.30 21.52 29,081Portland, OR 33,287,613 100,083 -9.779.89 (40,940)Reno, NV1,388,078 - - 19.58 19.509,309Sacramento, CA 18,949,701 130,000 -9.809.59 39,662San Diego, CA10,149,972 - - 20.14 19.84 30,448San Francisco, CA88,179,309 189,835 2,510,615 10.51 10.28387,187San Jose/Silicon Valley 7,601,845 318,000 - 23.69 24.73 (81,425)Seattle/Puget Sound, WA56,216,928 340,563625,50112.01 12.04284,779Stockton, CA8,221,819 - - 18.86 18.16 58,138Walnut Creek/Pleasanton, CA12,561,714 - - 16.26 15.71(4,731)West Total 362,016,3611,981,5544,195,81613.32 13.29668,075U.S. TOTAL1,970,013,173 7,905,426 18,454,67813.36 13.253,394,323COLLIERS INTERNATIONAL |P. 9
  • 10. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | DOWNTOWN OFFICE | CLASS AAVG ANNUALQUARTERLY ANNUALEXISTING VACANCYVACANCY ABSORPTIONQUOTED RENTCHANGE CHANGE MARKETINVENTORY (SF)RATE (%) RATE (%)Q4 2012(USD PSF)IN RENTIN RENT DEC 31, 2012 SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012(%)(%) NORTHEAST Baltimore, MD13,228,62114.93 0.75.914.9314.92 1,726 Boston, MA 41,333,53713.92 1.51.713.9213.07 349,709 Hartford, CT6,660,37922.39-1.0 -0.322.3921.4760,970 New York, NY – Downtown Manhattan77,672,77718.75-0.1 -2.218.7517.54 940,170 New York, NY – Midtown Manhattan192,290,70112.60-1.20.712.6012.76(297,418) New York, NY – Midtown South Manhattan 32,865,338 6.79 0.1 11.7 6.79 8.33(504,207) Philadelphia, PA 32,656,95710.59-0.5-10.5910.5219,612 Pittsburgh, PA 18,279,017 7.64 2.94.1 7.64 7.1329,859 Stamford, CT 13,299,36421.77-1.9 -6.421.7723.01(164,957) Washington, DC 85,704,69811.90 0.32.111.9011.92 (20,351) White Plains, NY4,885,99917.00-2.0 -4.317.0018.10 (53,855) Northeast Total518,877,38813.30 -0.21.213.3013.22 361,258 SOUTH Atlanta, GA30,000,46218.87 0.1 -1.318.8718.53 101,522 Birmingham, AL* 3,322,35311.56 -1.011.5611.34 7,962 Charleston, SC1,043,494 3.33 1.2 10.1 3.33 2.55 8,134 Charlotte, NC16,040,59410.40 1.91.410.40 9.11 208,132 Columbia, SC1,926,91415.02 3.94.115.0210.1394,216 Dallas, TX 22,693,92423.68 0.92.323.6824.69(230,826) Ft. Lauderdale-Broward, FL4,454,23821.30-0.4 -0.521.3021.27 1,229 Ft. Worth, TX 5,850,05211.69 0.90.911.6910.5467,382 Greenville, SC1,871,715 8.83 6.1 -3.5 8.8315.32(121,511) Houston, TX26,119,76410.69 0.45.210.69 9.75 244,855 Jacksonville, FL6,830,48215.40 0.32.015.4014.9729,314 Little Rock, AR 2,636,353 9.72 0.20.6 9.7211.83(3,212) Louisville, KY 10,560,67213.05 0.4 -4.613.0514.57 100,131 Memphis, TN 1,966,54218.26-0.10.318.2618.63(7,338) Miami-Dade, FL9,758,44821.50-0.9 -3.221.5021.3118,821 Nashville, TN 3,953,42320.50-1.5 -6.720.5018.3784,077 Orlando, FL 5,784,86816.57-1.2 -2.116.5715.9337,028 Raleigh/Durham/Chapel Hill, NC5,633,684 8.74 0.4 -3.1 8.74 8.3322,893 Richmond, VA5,895,522 7.46 0.14.6 7.46 7.37 4,979 Savannah, GA642,46013.02 7.57.213.02 7.6597,201 Tampa Bay, FL 4,791,17413.98-0.52.013.9815.22 (59,515) West Palm Beach/Palm Beach County, FL 3,337,55722.51-0.33.222.5120.6960,785 South Total175,114,69515.620.71.015.6215.40 766,259*Absorption and vacancy figures for Birmingham account for direct space onlyP. 10 | COLLIERS INTERNATIONAL
  • 11. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | DOWNTOWN OFFICE | CLASS A (continued)AVG ANNUALQUARTERLY ANNUALEXISTING VACANCYVACANCY ABSORPTIONQUOTED RENTCHANGE CHANGEMARKET INVENTORY (SF)RATE (%) RATE (%)Q4 2012(USD PSF)IN RENTIN RENT DEC 31, 2012 SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012(%)(%)MIDWESTChicago, IL 60,846,877 37.360.30.714.5214.05 284,974Cincinnati, OH 8,815,068 21.96- -6.019.1122.06(260,407)Cleveland, OH9,728,269 21.33 -0.36.313.6813.34 32,992Columbus, OH 8,106,210 18.52 -1.4 -1.512.1511.14 82,018Detroit, MI9,120,878 22.80 -0.2 -3.117.1417.076,139Grand Rapids, MI 1,542,050 19.280.1 -8.122.3419.56 42,756Indianapolis, IN 9,928,804 19.032.0 -1.218.9218.30 50,070Kansas City, MO 10,276,792 18.90 -0.30.719.9119.892,029Milwaukee, WI5,411,144 20.172.80.913.0912.07 55,208Minneapolis, MN 13,618,828 16.526.9 15.312.3311.78 75,272Omaha, NE3,417,878 19.62 -0.61.7 4.22 4.54 (10,025)St. Louis, MO 10,678,000 17.730.5 -0.313.5313.78 (25,983)St. Paul, MN 2,773,960 13.35 -0.4 17.8 9.6410.19 (15,440)Midwest Total 154,264,75827.200.60.814.8514.64 319,603WESTBakersfield, CA 699,79817.40-- 4.35 3.863,413Boise, ID2,228,115 20.12 -2.68.1 7.05 5.21 200,470Denver, CO21,238,15830.00.14.213.5413.02 110,767Fresno, CA 1,058,046 24.00- -7.712.3712.37-Honolulu, HI 4,966,720 34.450.7 -1.013.3412.23 43,171Las Vegas, NV 807,58831.320.40.810.6711.60(7,551)Los Angeles, CA 17,749,600 36.12- -6.216.4618.00(267,100)Oakland, CA 10,198,245 30.72 -3.0 -3.0 9.8611.22(138,461)Phoenix, AZ9,459,620 22.86-1.520.0521.15(104,497)Portland, OR13,189,621 24.89-- 8.76 8.78(3,087)Reno, NV557,63521.31 -1.3 -7.520.8718.03 15,817Sacramento, CA 9,062,614 32.40-- 8.34 8.08 23,514San Diego, CA7,254,266 28.20- -0.417.6717.37 21,659San Francisco, CA 56,642,612 49.565.6 20.510.31 9.71 508,711San Jose/Silicon Valley3,365,127 31.83 -6.6 -0.725.8427.02 (40,361)Seattle/Puget Sound, WA 32,531,336 30.962.13.414.1213.60 428,837Stockton, CA 2,790,574 20.16- -4.527.0526.45 16,621Walnut Creek/Pleasanton, CA8,233,222 27.720.40.914.9715.44 (38,786)West Total202,032,89735.43-0.813.0712.96 773,137U.S. TOTAL 1,050,289,738 41.220.21.013.8713.742,220,257 COLLIERS INTERNATIONAL | P. 11
  • 12. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY EXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTION MARKET INVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF) NORTHEAST Baltimore, MD 86,786,838234,8741,163,140 12.6512.44386,882 Boston, MA 110,971,331 98,0961,563,851 19.3719.10314,921 Fairfield County, CT41,493,424 74,726- 12.5612.88-68,762 Hartford, CT12,251,551-- 14.9614.44 63,815 Long Island, NY 71,732,215768,000 55,000 10.7110.66718,538 New Jersey – Central 103,723,820315,670116,057 20.9220.70487,335 New Jersey – Northern137,967,000 30,000737,600 21.0321.09-52,196 Philadelphia, PA 110,578,994654,000322,005 15.1714.94802,694 Pittsburgh, PA89,275,846 52,000764,3957.57 7.06 46,342 Washington, DC 283,566,213-- 15.4415.83-1,118,510 Westchester County, NY37,071,839-- 15.0515.39 -126,457 Northeast Total 1,085,419,071 2,227,3664,722,048 15.7315.731,454,602 SOUTH Atlanta, GA171,243,642433,822674,097 17.0417.03363,892 Birmingham, AL* 14,213,847-- 18.4817.93 77,062 Charleston, SC 9,379,515- 75,000 15.0014.79 35,516 Charlotte, NC 75,365,988828,831108,596 13.3113.45626,394 Columbia, SC 5,016,258-- 24.0425.61-79,155 Dallas, TX 241,020,318204,1091,027,817 15.9415.571,050,842 Ft. Lauderdale-Broward, FL42,982,403-806,572 13.7313.716,984 Ft. Worth, TX 20,158,197-144,2337.73 7.25 97,536 Greenville, SC 5,093,005-- 18.5218.10 21,540 Houston, TX159,079,088 50,0004,394,827 14.2013.81664,309 Jacksonville, FL44,916,088 73,4232,607 13.3613.26 96,049 Little Rock, AR7,625,053- 46,000 12.5812.45-43,423 Memphis, TN 27,443,840-113,392 14.8214.46100,717 Miami-Dade, FL63,016,310 33,930162,063 13.9613.64229,620 Nashville, TN 14,842,231 28,000-7.49 7.51 23,248 Orlando, FL 53,927,670- 87,895 15.5814.95431,065 Raleigh/Durham/Chapel Hill, NC64,136,382-- 14.1513.97119,064 Richmond, VA34,412,752-- 11.7312.21 -164,213 Savannah, GA 1,534,208-- 23.6918.94 48,350 Tampa Bay, FL 71,219,715 66,927269,272 16.0815.69404,271 West Palm Beach/Palm Beach County, FL 28,655,101- 30,000 19.1818.30251,828 South Total 1,155,281,611 1,719,0427,942,371 15.0314.784,361,496*Absorption and vacancy figures for Birmingham account for direct space onlyP. 12 | COLLIERS INTERNATIONAL
  • 13. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | ALL INVENTORY (continued) EXISTING NEW SUPPLYUNDERVACANCYVACANCY ABSORPTIONMARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%)Q4 2012DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012(SF)MIDWESTChicago, IL157,535,389 297,763- 17.0716.73783,012Cincinnati, OH35,718,611- - 20.1021.01-326,094Cleveland, OH107,371,768 710,100788,8669.94 9.97605,183Columbus, OH43,849,812 156,500111,000 11.8812.0656,993Detroit, MI137,172,7501,165,42531,232 19.0818.59 1,619,025Grand Rapids, MI11,557,283- 382,000 23.2823.1910,173Indianapolis, IN45,740,597-75,000 13.2913.1590,627Kansas City, MO 56,941,429- 1,510,765 13.4513.27103,240Milwaukee, WI 33,034,701 145,000- 11.5111.70 -59,970Minneapolis, MN 82,273,735- 931,700 14.3313.39776,569Omaha, NE 20,597,840 60,000 180,000 12.1212.1072,609St. Louis, MO 55,244,405- - 11.5311.08247,729Midwest Total787,038,3202,534,788 4,010,563 14.8614.62 3,979,096WESTBakersfield, CA5,994,188-81,5946.60 6.98 -22,693Boise, ID 11,093,685 196,235- 18.7718.98135,657Denver, CO 104,416,469- 745,767 14.2914.08126,306Fairfield, CA4,877,417- - 25.2825.70 -20,478Fresno, CA18,008,675-70,000 12.9913.25 -47,197Honolulu, HI 7,490,275-40,000 12.8912.88 9,218Las Vegas, NV 35,115,687-42,123 25.5524.64320,637Los Angeles, CA168,909,400 418,6001,213,700 17.7617.78410,100Los Angeles – Inland Empire, CA 21,626,300- - 22.8421.25344,823Oakland, CA 16,165,151- - 19.5418.11231,011Orange County, CA 80,477,400- 380,000 17.0816.61315,300Phoenix, AZ109,902,559 108,609375,482 21.5820.36 1,435,184Portland, OR44,445,096 100,083163,874 11.7111.19322,024Reno, NV 5,547,351- - 16.3715.9938,829Sacramento, CA73,472,600 130,000257,451 18.7417.82781,917San Diego, CA 70,818,124- 946,457 13.9213.59235,680San Francisco Peninsula 35,142,199 18,781 - 13.6914.03-102,740San Jose/Silicon Valley 54,745,633 318,000- 12.8612.42390,701Seattle/Puget Sound, WA 74,567,897-82,950 12.4710.98370,396Walnut Creek/Pleasanton, CA 32,987,041- - 12.7711.73343,070West Total 975,803,1471,290,308 4,399,398 16.5616.00 5,617,745U.S. TOTAL 4,003,542,1497,771,50421,074,380 15.5615.3115,412,939 COLLIERS INTERNATIONAL |P. 13
  • 14. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | SUBURBAN OFFICE | CLASS AAVERAGE EXISTING QUARTERLYANNUALVACANCYVACANCY ABSORPTION ANNUAL QUOTED MARKET INVENTORY (SF)CHANGE IN CHANGE INRATE (%) RATE (%)Q4 2012 RENT (USD PSF)DEC 31, 2012 RENT (%)RENT (%) SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012 NORTHEAST Baltimore, MD30,282,85024.87-1.03-3.2315.9115.37362,930 Boston, MA 47,074,11924.74-1.55-3.0617.8017.88-40,309 Fairfield County, CT 17,597,47035.35-2.67 9.2413.2513.77-27,217 Hartford, CT 7,906,889 20.25-2.78-3.3913.5312.75 61,867 Long Island, NY23,077,97530.47 0.20 1.8411.4611.56-21,446 New Jersey – Central 60,391,07626.52-0.86-1.7822.4521.95546,337 New Jersey – Northern84,682,27426.28-1.05-1.2820.6220.42193,221 Philadelphia, PA 68,076,07324.73 0.91 2.9614.5414.27740,149 Pittsburgh, PA 17,179,19321.95 0.87 2.09 6.49 5.30148,053 Washington, DC132,646,60332.03-1.39-1.5115.2615.83 -745,611 Westchester County, NY 17,442,81926.42-0.38-2.8718.7219.26-94,133 Northeast Total 506,357,34127.65-0.92-0.6116.7416.73 1,123,841 SOUTH Atlanta, GA79,312,90522.34 0.68 0.8116.6116.34527,253 Birmingham, AL*8,943,059 21.09-0.80 0.4316.8115.96 76,173 Charleston, SC 3,942,925 23.18 0.17-2.5611.4511.49809 Charlotte, NC19,403,22522.80 0.62 6.1915.1816.61410,325 Columbia, SC973,18916.55-1.55-4.0013.7714.93-11,304 Dallas, TX 91,055,76323.30- 1.3016.2015.50634,612 Ft. Lauderdale-Broward, FL 10,963,05927.14 0.04-2.4418.8218.45 40,574 Ft. Worth, TX2,638,353 24.00--2.04 3.89 3.851,032 Greenville, SC 2,245,798 17.32 1.88-0.4015.6012.66 66,172 Houston, TX66,845,82228.20 3.26 3.1512.0011.44379,470 Jacksonville, FL 9,206,865 19.58--3.59 8.46 8.32 13,028 Little Rock, AR3,027,212 19.25 0.94 3.8918.9818.719,217 Memphis, TN8,113,880 21.44-0.79-1.02 8.42 8.10 25,608 Miami-Dade, FL 16,308,47530.52 0.07-3.0519.8118.70180,756 Nashville, TN7,288,561 23.23 0.13 6.32 5.34 5.87-39,206 Orlando, FL16,827,62820.93-1.60-3.7721.0819.88201,731 Raleigh/Durham/Chapel Hill, NC 24,532,19720.76-0.48-2.2114.3913.76154,190 Richmond, VA 13,564,69718.78-0.05 0.4814.2413.60 86,395 Savannah, GA490,03522.70 0.18 0.3523.7017.79 28,932 Tampa Bay, FL23,629,40222.78-0.35-2.1516.0714.48214,151 West Palm Beach/Palm Beach County, FL9,163,879 29.68-1.53-2.9418.1417.23 83,092 South Total 418,476,92923.80 0.61 0.5715.2314.70 3,083,010*Absorption and vacancy figures for Birmingham account for direct space onlyP. 14 | COLLIERS INTERNATIONAL
  • 15. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICAUNITED STATES | SUBURBAN OFFICE | CLASS A (continued)AVERAGEEXISTINGQUARTERLYANNUALVACANCYVACANCY ABSORPTION ANNUAL QUOTEDMARKET INVENTORY (SF) CHANGE IN CHANGE INRATE (%) RATE (%)Q4 2012 RENT (USD PSF) DEC 31, 2012RENT (%)RENT (%) SEP 30, 2012 DEC 31, 2012(SF) DEC 31, 2012MIDWESTChicago, IL76,979,405 27.00-1.8918.23 17.70403,696Cincinnati, OH 15,916,607 20.54 0.390.2019.40 20.31 -144,815Cleveland, OH13,701,278 21.34-0.330.0510.44 10.05689,788Columbus, OH 18,133,071 19.05 0.372.1410.57 11.50 -27,569Detroit, MI33,643,164 20.52-0.24 -2.0115.52 15.72 -67,275Grand Rapids, MI2,206,876 17.50-2.78 -9.0028.84 28.2213,520Indianapolis, IN 12,403,471 18.00 0.391.5817.72 17.1085,772Kansas City, MO14,734,064 20.30 0.30 -1.9311.87 11.7814,100Milwaukee, WI 5,912,609 22.32 9.909.7910.93 10.5820,889Minneapolis, MN26,674,839 13.80-1.43 -0.5016.12 15.62131,289Omaha, NE 4,342,362 26.15-0.85 5.07 5.01 104,815St. Louis, MO25,996,388 21.89 0.05 -1.4010.62 10.79 -45,320Midwest Total250,644,13421.91 0.14 0.7715.2615.12 1,178,890WESTBakersfield, CA 2,697,867 24.00- - 4.74 5.28-14,426Boise, ID 3,108,058 15.12 0.130.4714.14 13.5717,779Denver, CO 34,321,698 23.74 1.324.4911.95 11.96-3,198Fairfield, CA 1,917,086 25.61-2.072.1126.88 29.77 -55,433Fresno, CA4,017,507 25.20- -17.26 18.85 -63,910Las Vegas, NV 4,979,076 29.28- -1.6134.96 33.0296,889Los Angeles, CA 102,533,800 33.96 0.711.4317.26 17.20455,100Los Angeles – Inland Empire, CA 5,194,800 23.52 1.032.0827.39 23.62195,866Oakland, CA 3,870,228 26.40- -0.9026.20 24.2376,225Orange County, CA32,834,800 25.56-0.93 -0.4717.93 16.96253,700Phoenix, AZ30,242,049 23.29 0.26 -1.0623.12 20.31918,319Portland, OR 11,012,912 22.95-0.350.3114.02 14.06-4,348Reno, NV2,989,478 18.62- -7.0913.90 13.9134,636Sacramento, CA 16,324,396 22.20-0.54 -1.6021.51 20.99185,646San Diego, CA23,418,247 32.88-4.1811.52 10.73184,465San Francisco Peninsula22,281,029 41.64-0.2910.16 13.53 14.09 -109,899San Jose/Silicon Valley27,077,797 39.07-1.348.1714.02 14.43145,393Seattle/Puget Sound, WA20,850,141 31.68 0.864.5510.38 8.57 132,984Walnut Creek/Pleasanton, CA15,972,148 25.92 3.8514.89 10.33 8.98 216,974West Total 365,643,11730.38 0.35 3.3716.2515.68 2,662,762U.S. TOTAL1,541,121,521 26.21-0.08 0.8215.9715.67 8,048,503COLLIERS INTERNATIONAL |P. 15
  • 16. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA CANADA | DOWNTOWN OFFICE | ALL INVENTORYEXISTING NEW SUPPLY UNDERVACANCY VACANCYABSORPTION MARKETINVENTORY (SF)Q4 2012 CONSTRUCTIONRATE (%)RATE (%) Q4 2012 DEC 31, 2012 (SF) (SF) SEP 30, 2012DEC 31, 2012 (SF) Calgary, AB 39,567,994256,657 1,661,0004.523.68 330,012 Edmonton, AB11,260,840117,768 -8.428.3013,280 Halifax, NS4,684,11038,948 190,00011.44 11.45-470 Montréal, QC49,428,581127,000304,000 5.014.27 365,660 Ottawa, ON15,526,94287,700 360,000 5.576.75-183,170 Regina, SK 3,801,824220,00080,0001.922.59 190,164 Saskatoon, SK* 2,319,464109,00050,0003.253.34 138,900 Toronto, ON 69,531,181464,455 2,784,6985.104.58 203,259 Vancouver, BC 24,408,48820,2991,563,8103.504.03-130,891 Victoria, BC 4,952,84980,455-7.798.28-14,428 Waterloo Region, ON3,772,982 - 66,075 14.87 14.2224,360 Winnipeg, MB11,188,648 - 130,375 6.596.59- CANADA TOTAL 240,443,903 1,522,2827,189,9585.355.04 936,676 *Saskatoon tracks but does not submit suburban inventory figures for this report CANADA | DOWNTOWN OFFICE | CLASS AAVG ANNUALEXISTINGQUARTERLYANNUAL VACANCY VACANCYQUOTED RENT ABSORPTION MARKETINVENTORY (SF) CHANGE CHANGE RATE (%)RATE (%)(CAD PSF) Q4 2012 (SF) DEC 31, 2012 IN RENT (%)IN RENT (%) SEP 30, 2012DEC 31, 2012 DEC 31, 2012 Calgary, AB 26,727,38960.21 -8.7 1.46 1.84-102,756 Edmonton, AB 9,074,91342.02 0.75.3 8.27 8.45 -16,593 Halifax, NS1,933,74632.35 -1.7 9.06 8.95 2,144 Montréal, QC23,075,59645.00 7.17.1 4.49 4.1382,257 Ottawa, ON 9,535,83051.60 3.56.7 4.52 4.92 -38,670 Regina, SK 1,094,91142.00 4.0 13.5 0.96 1.42 212,815 Saskatoon, SK 570,571 40.00 5.38.1 1.84 3.5967,509 Toronto, ON 40,130,32854.28 0.62.4 5.70 4.70 187,396 Vancouver, BC 10,029,23454.57-1.10.1 2.08 2.65 -60,827 Victoria, BC513,808 35.00-2.8 -7.4 9.43 4.8839 Waterloo Region, ON1,559,42925.66 - -0.812.4812.01 7,282 Winnipeg, MB 2,619,42833.50 - N/A4.76 4.76 - CANADA TOTAL 126,865,18351.42 1.74.5 4.46 4.24 340,596P. 16 | COLLIERS INTERNATIONAL
  • 17. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA CANADA | SUBURBAN OFFICE | ALL INVENTORYEXISTING NEW SUPPLYUNDERVACANCYVACANCYABSORPTION MARKETINVENTORY (SF)Q4 2012CONSTRUCTIONRATE (%) RATE (%) Q4 2012 DEC 31, 2012 (SF)(SF) SEP 30, 2012 DEC 31, 2012 (SF) Calgary, AB 24,444,605256,657-8.549.34 40,263 Edmonton, AB9,110,948 117,768 315,15011.2411.13 103,952 Halifax, NS 6,545,97338,948 73,500 10.4510.98-152 Montréal, QC24,355,843127,000 153,516 8.938.55627,008 Ottawa, ON21,181,500 87,700 416,450 9.109.84 -78,742 Regina, SK 720,541--0.41 - - Toronto, ON 68,333,270250,000 924,250 8.127.47377,866 Vancouver, BC 27,698,230 20,2991,712,524 11.1310.00 309,956 Victoria, BC3,681,14380,455 121,000 8.519.39 19,167 Waterloo Region, ON 7,112,148 - 154,71010.7610.85 -3,876 Winnipeg, MB3,353,094 - 192,00012.2612.26- CANADA TOTAL 196,537,295978,8274,063,1009.178.95 1,395,442 CANADA | SUBURBAN OFFICE | CLASS A AVG ANNUALEXISTING QUARTERLYANNUALVACANCY VACANCY ABSORPTION QUOTED RENT MARKETINVENTORY (SF)CHANGE CHANGERATE (%)RATE (%)Q4 2012 (CAD PSF) DEC 31, 2012IN RENT (%)IN RENT (%) SEP. 30, 2012DEC 31, 2012(SF)DEC 31, 2012 Calgary, AB 11,635,48344.002.3 7.37.107.63176,873 Halifax, NS2,875,03627.44- -2.510.649.8420,869 Montréal, QC13,562,83427.00- -3.6 7.806.66272,484 Ottawa, ON12,123,11630.58 -2.8 -2.2 8.869.70 -69,890 Regina, SK 395,432 N/AN/AN/A - - - Toronto, ON 31,584,38930.59 -0.1 1.09.408.87306,382 Vancouver, BC 13,426,37933.500.4 -6.911.139.91179,328 Victoria, BC 770,93938.00- -5.0 8.39 13.9832,512 Waterloo Region, ON3,422,48124.15 -0.8 -0.610.399.9913,845 CANADA TOTAL* 89,796,08931.940.2 -0.5 9.088.72932,403*Edmonton and Winnipeg do not track Suburban Class A inventory. COLLIERS INTERNATIONAL |P. 17
  • 18. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | OFFICE INVESTMENTCBD CBD SUBURBAN SUBURBAN MARKET SALES PRICE CAP RATE SALES PRICE CAP RATE (USD PSF)(%) (USD PSF) (%) Atlanta, GA170.00 7.7 125.00 8.3 Baltimore, MD 48.01 131.82 7.5 Boise, ID84.73 7.4 Boston, MA 246.00 5.5 154.48 Charleston, SC 250.00 8.0 135.0011.0 Chicago, IL350.00 6.5 225.00 7.5 Cincinnati, OH 120.00 9.8 137.50 9.5 Columbia, SC 180.00 Columbus, OH67.4080.58 8.2 Dallas, TX150.00 7.0 Denver, CO 144.00 6.5 125.00 7.4 Detroit, MI 75.2910.347.89 Fairfield County, CT243.00 5.0 Fresno, CA 125.00 9.0 175.00 8.5 Ft. Lauderdale-Broward, FL 175.00 167.00 7.5 Grand Rapids, MI102.56 8.8 Hartford, CT 95.87 7.8 Houston, TX 200.00 7.3 Indianapolis, IN 165.00 9.0 155.00 8.5 Jacksonville, FL150.00 8.5 Las Vegas, NV 132.60 Long Island, NY 190.23 7.6 Los Angeles, CA 200.00 8.0 Los Angeles – Inland Empire, CA191.00 7.0 247.00 6.6 Memphis, TN 32.57 9.084.25 Miami-Dade, FL 285.00 6.0 239.00 5.4 Milwaukee, WI120.00 9.0 100.00 9.5 Minneapolis, MN 121.27 7.3 Nashville, TN200.00 7.0 120.00 7.0 New Jersey – Central172.00 7.5 New Jersey – Northern 190.00 7.9 New York, NY – Downtown Manhattan533.00 5.0 New York, NY – Midtown Manhattan 712.00 5.0 New York, NY – Midtown South Manhattan 400.00 5.2 Oakland, CA152.47 7.5 111.49 8.5 Orange County, CA 350.00 6.3 Orlando, FL175.00 8.0 135.00 8.3 Philadelphia, PA 150.00 8.0 159.00 8.0 Phoenix, AZ 65.00 8.0 108.00 7.5 Pittsburgh, PA 130.00 8.0 105.00 8.3 Portland, OR 175.11 8.8 131.62 7.3 Sacramento, CA 151.44 128.97 8.9 San Diego, CA244.52 6.7 218.44 6.8P. 18 | COLLIERS INTERNATIONAL
  • 19. HIGHLIGHTS | Q4 2012 | OFFICE | NORTH AMERICA UNITED STATES | OFFICE INVESTMENT (continued)522 offices in MARKETCBDSALES PRICE CBD CAP RATE SUBURBANSALES PRICE SUBURBAN CAP RATE62 countries on (CAD PSF) (%) (CAD PSF)(%)6 continents San Francisco, CA500.00 5.0United States: 147 San Francisco Peninsula 250.00 7.0 Canada: 37Latin America: 19 San Jose/Silicon Valley280.00 7.0 350.00 6.0 Asia Pacific: 201 Savannah, GA 150.00 9.5 120.00 9.8 EMEA: 118 Seattle/Puget Sound, WA170.22 4.4 367.60 7.4 • $1.8billion in annual revenue• 1.25billion square feet under St. Louis, MO 85.00 9.8 120.00 8.8 management Stamford, CT72.00 8.0• Over 12,300 professionals and staff Tampa Bay, FL115.62 7.4 120.87 9.0 Walnut Creek/Pleasanton, CA210.00 7.5 180.00 8.0 Washington, DC 575.00 5.6 260.00 6.5 COLLIERS INTERNATIONAL West Palm Beach/Palm Beach County, FL122.00 188.00 6.4 601 Union Street, Suite 4800Seattle, WA 98101 Westchester County, NY125.00 8.0 TEL +1 206 695 4200 White Plains, NY72.00 8.0 U.S. AVERAGES* 204.62 7.4 163.49 7.8FOR MORE INFORMATION CANADA | OFFICE INVESTMENTK.C. Conway Calgary, AB550.00 5.5 460.00 5.8 Executive Managing Director,Market Analytics | USA Edmonton, AB 354.67 5.8TEL + 678 458 34771EMAIL kc.conway@colliers.com Montréal, QC 275.00 6.5 190.00 7.3 Ottawa, ON 360.00 6.3 165.00 7.4 James CookDirector of Research | USA Regina, SK 125.00 7.0TEL +1 602 633 4061 Saskatoon, SK240.00 7.0EMAIL james.cook@colliers.com Victoria, BC 354.00 6.2 280.00 6.3 CONTRIBUTORS Waterloo Region, ON140.00 7.3 150.00 7.5 Jeff SimonsonSenior Research Analyst | USA CANADA AVERAGES* 299.83 6.4 249.00 6.8Jennifer Macatiag*Straight averages used.Graphic Designer | USAGlossaryCliff PlankNational Director | GIS & MappingInventory — Includes all existing multi- or single-Annual Quoted Rent — Includes all costs associatedtenant leased and owner-occupied office properties with occupying a full floor in the mid-rise portionCopyright © 2013 Colliers International.greater than or equal to 10,000 square feet (net of a Class A building, inclusive of taxes, insurance,rentable area). In some larger markets this minimummaintenance, janitorial and utilities (electricity The information contained herein has been obtained from sourcesdeemed reliable. While every reasonable effort has been made tosize threshold may vary up to 50,000 square feet.surcharges added where applicable). All office rents inensure its accuracy, we cannot guarantee it. No responsibility isDoes not include medical or government buildings.this report are quoted on an annual, gross per squareassumed for any inaccuracies. Readers are encouraged to consulttheir professional advisors prior to acting on any of the material foot basis. Rent calculations do not include sublease space. contained in this report.Vacancy Rate — Percentage of total inventoryphysically vacant as of the survey date, including Cap Rate — (Or going-in cap rate) Capitalization ratesdirect vacant and sublease space.in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap ratesAbsorption — Net change in physically occupied space are calculated by dividing net operating income (NOI)over a given period of time. by purchase price.New Supply — Includes completed speculative andNote: SF = square feetbuild-to-suit construction. New supply quoted on a net MSF = million square feetbasis after any demolitions or conversions. PSF = per square footAccelerating success. CBD = central business district COLLIERS INTERNATIONAL |P. 19
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