3Q16 NGKF NY Office Market Overview 11 1 16

3Q16

NEW YORK CITY OFFICE MARKET OVERVIEW

Todd P. Hershman Associate Director

212.359.8520

[email protected]

November 1, 2016

2

TABLE OF CONTENTS

22 Manhattan Development Overview

23 Commercial Development Pipeline

24 Commercial Development Horizon Map

25 Manhattan Development Overview

26 Boutique Development Overview

4 Manhattan Office Market Overview

5 Leasing Activity by Market

6 Key Leasing Activity Metrics

7 Industries Driving Demand: Employment and Leasing Trends

8 Industries Driving Demand: 3Q16 Leasing and Tenants in the

Market

9 Composition of Tech Leasing

10 Manhattan Submarket Comparison

11 Asking Rent Trends

12 Taking and Net Effective Rent Trends

13 Taking Rent Corridor and Submarket Comparisons

14 Concessions Analysis: Work Amount

15 Concessions Analysis: Free Rent

16 Triple-Digit Taking Rent Assets

17 Manhattan Top-Tier Trends

18 Midtown South Top-Tier Trends

19 Midtown Deal Composition

20 Midtown South Deal Composition

21 Downtown Deal Composition

27 Brooklyn and Long Island City

Office Market Overview

28 Brooklyn Office Development Map

29 Brooklyn Office Development Overview

30 Brooklyn’s Changing Inventory

31 Brooklyn Market Trends

32 Brooklyn Submarket Snapshot

33 Asking Rent Comparison

34 Long Island City Trends

35 Long Island City Submarket Snapshot

3 Executive Summary


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3

Borough

Trends

EXECUTIVE SUMMARY

Leasing

Activity

Industry

Growth

Asking and

Taking Rents

Net Effective

Rents

Premier

Space

New

Supply

Despite overall drops in rent growth, activity at the top end of the market remained on

par with 2015 in Midtown, while dropping in Midtown South.

A drop in relocation activity was balanced by an uptick in renewals, particularly among

large deals in Midtown. Overall leasing activity in Midtown South fell below the prior

year and ten-year averages.

FIRE activity increased in the third quarter and TAMI activity declined for the third

consecutive quarter, while the types of tech tenants that were active continued to

diversify from recent years.

Asking rents continued to increase, though at a slower rate than the annual average

during this market cycle. The slow-down was generally more pronounced in taking

rents.

Approximately 29 million square feet of development projects are in the development

pipeline in Manhattan. Of this total, 15 million square feet is scheduled for delivery by

2020.

Brooklyn and Long Island City market conditions remained unchanged in the third

quarter with rents holding steady, a slight drop in availability, and consistency in the

development pipeline.

Net effective rental rates have flattened as landlords are giving more substantial

concession packages including an increased amount of work allowance.


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3Q16

MANHATTAN OFFICE MARKET OVERVIEW


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5

Manhattan (MSF) Midtown (MSF)

Midtown South (MSF) Downtown (MSF)

27.7 MSF

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Relocations Renewals Average First 3 Quarters Velocity

4.9 MSF

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7.9 MSF

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14.9 MSF

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LEASING ACTIVITY BY MARKET

Source: Newmark Grubb Knight Frank Research

Renewals compensated for a dip in

relocation activity, resulting in stable leasing

for overall Manhattan.

Key

Takeaway


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2015 versus 2016

KEY LEASING ACTIVITY METRICS

Relocations 64%

Renewals & Expansions

36%

Relocations 57%

Renewals &

Expansions 43%

20.9

27.4

0

10

20

30

2015 2016 YTD

Average Time on Market for Space Available (Months)

1Q-3Q

2015

1Q-3Q

2016

Renewals vs. Relocations

Renewal activity is on the rise, while space is

sitting on the market longer compared to

2015.

Key

Takeaway



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7

INDUSTRIES DRIVING DEMAND

20%

18%

17%

20%

35%

30%

34%

44%

16%

27%

29%

23%

0%

10%

20%

30%

40%

50%

2013 2014 2015 2016 YTD

Professional Services FIRE TAMI

Leasing by Industry Industries Driving Employment

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

2010 2011 2012 2013 2014 2015 2016

Professional Services FIRE TAMI

Employment growth has flattened in 2016.

This translated to leasing for TAMI and

Professional Services while FIRE

increased.

Key

Takeaway

Source: Newmark Grubb Knight Frank Research, New York State Department of Labor


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FIRE 41% FIRE

32%

FIRE 52%

Prof Svcs 20%

Prof Svcs 20%

Prof Svcs 9%

TAMI 27%

TAMI 24%

TAMI 13%

Nonprofits 3%

Nonprofits 10%

Other 9%

Other 24%

Other 16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Midtown Midtown South Downtown

3Q16 Leasing by Industry

INDUSTRIES DRIVING DEMAND

TAMI 26%

FIRE 32%

Prof Svcs 20%

Retail & Apparel

7%

Other 15%

Tenants in the Market (TIM)

TOTAL SF

IN THE

MARKET

TAMI leasing has declined in recent quarters, while

leasing among FIRE tenants continued with an

increase in renewals.

Key

Takeaway



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9

1%

12%

18%

14%

1%

9%

3% 3%

9%

11%

5%

7%

6%

1%

Biotech Cloud Computing Digital Media E-Commerce Edtech Fintech Gaming

Health Tech Infotech Marketing Search Engine Social Media Telecommunications Transportation

2014 2016 2015

COMPOSITION OF TECH LEASING

5%

12%

9%

1%

8%

1%

3% 2% 15%

18%

5%

4%

12%

5% 7%

1%

13%

23%

7% 5%

2%

32%

3% 3%

2% 2%

Major Transactions Include:

Google Sony Amazon

Twitter Buzzfeed Yelp


Bloomberg AOL PayPal

Pandora TED


Salesforce Gilt Groupe Bleacher Report

Grovo Side Walk Labs

Activity Highlights: Marketing dominated with 18%

of leasing in 2014, but dropped to 11% in 2015 and

3% in 2016.

Activity Highlights: Digital media led leasing in

2015 at 18%, up from 2014 and 2016.

Activity Highlights: Infotech surged in 2016, ahead of its

share in the prior two years and all other tech

subindustries in 2016.

While overall tech and creative leasing

dropped in 2016, the composition of tech

industries active in the market has shifted.

Key

Takeaway



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Rental rate growth has begun to slow

across nearly all of Manhattan’s

submarkets

Key

Takeaway

MANHATTAN SUBMARKET COMPARISON

Availability

Rate (%)

Average Asking

Rent ($/SF)

Manhattan 11.3% $ 76.74

Midtown 11.9% $ 82.84

Eastside 9.9% $ 74.79

Far West Side 17.5% $ 85.19

Grand Central 14.8% $ 78.13

Murray Hill 10.1% $ 61.75

Park Avenue 12.7% $ 104.75

Penn Station 8.3% $ 64.93

Plaza District 13.3% $ 110.91

Sixth Ave/Rock Ctr. 13.2% $ 87.60

Times Square 10.0% $ 80.55

Times Square South 10.4% $ 61.64

Westside 9.1% $ 70.28

Midtown South 8.0% $ 72.60

Chelsea 7.6% $ 66.23

East Village 0.6% $ 48.00

Flatiron/Union Square 8.0% $ 71.22

Hudson Square/Meatpacking 11.7% $ 84.02

Soho/Noho 5.2% $ 72.64

Downtown 12.3% $ 62.40

Downtown East 11.8% $ 57.70

Downtown West 12.7% $ 67.84

Tribeca/City Hall 14.1% $ 65.43

Submarket Rent Growth Comparison

25%

8%

11%

6%

1%

5%

-1%

7%

2%

1%

0%

0%

-8%

5%

13%

1%

4%

4%

5%

8%

8%

8%

9%

15%

9%

10%

12%

9%

9%

6%

7%

9%

10%

8%

7%

7%

13%

8%

Tribeca/City Hall

Downtown West

Downtown East

Soho/Noho

Hudson Square/Meatpacking

Flatiron/Union Square

East Village

Chelsea

Westside

Times Square South

Times Square

Sixth Ave/Rock Ctr.

Plaza District

Penn Station

Park Avenue

Murray Hill

Grand Central

Far West Side

Eastside

Growth Per Annum Since 2010 (%) Growth Past 12 Months (%)Source: Newmark Grubb Knight Frank Research


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11

$89.02

$57.02

$82.84

$58.93

$40.33

$72.60

$51.56

$39.09

$62.40

$25

$35

$45

$55

$65

$75

$85

$95

3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16


Average Asking Rent by Market ($/SF)

ASKING RENT TRENDS

Average Annual Change

Since Trough (2010)

Change since

2015

MT 6.4% 3.9%

MTS 10.3% 3.7%

DT 8.1% 9.7%

Year-over-year asking rent growth pulled

back from the 6-year average in Midtown and

Midtown South. Downtown pushed slightly

ahead.

Key

Takeaway



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12

$65.23

$60.24

$42.65

$30

$35

$40

$45

$50

$55

$60

$65

$70

$75

$80

2010 2011 2012 2013 2014 2015 2016 YTD


*Midtown 2016 YTD averages are impacted on a weighted basis by the Citadel deal at 425 Park. Including

that deal, the average taking rent is pushed to $79.40/SF and average NER is pushed to $67.96/SF.

NER Rent Trends

Average net effective rents for direct deals with >5-year terms

TAKING AND NET EFFECTIVE RENT TRENDS

Taking rent growth has slowed with the

exception of Midtown, while net effective

rents have flattened year-over-year.

Key

Takeaway

$76.03

$67.19

$52.61

$30

$35

$40

$45

$50

$55

$60

$65

$70

$75

$80

2010 2011 2012 2013 2014 2015 2016 YTD


Base Taking Rent Trends

Average Annual Change Since

Trough (2009-2010)

Change Since 2015

MT 6.1% 7.6%

MTS 9.8% 1.0%

DT 7.2% 3.7%

Average Annual Change Since

Trough (2009-2010)

Change Since 2015

MT 5.1% 1.6%

MTS 8.4% 1.6%

DT 4.9% 1.1%



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Submarket Market Average Base

Taking Rent ($/SF)

Park Avenue* MT $124.56

Plaza District MT $89.23

Hudson Square/

Meatpacking MTS $84.65

Far West Side MT $84.13

Sixth Ave/Rock

Ctr. MT $78.22

NoHo/SoHo MTS $76.05

Westside MT $75.48

Eastside MT $73.22

Grand Central MT $66.94

Chelsea MTS $65.89

Times Square MT $65.20

Flatiron/Union

Square MTS $63.75

Penn Station MT $62.20

Times Square

South MT $60.81

Downtown West DT $60.38

Murray Hill MT $52.64

Downtown East DT $49.67

Corridor Market Average Base

Taking Rent ($/SF)

Park Avenue* MT $107.91

Upper Fifth Avenue

(47th - 65th Streets) MT $93.36

East 50s MT $78.54

Avenue of the

Americas MT $77.16

West 50s MT $76.57

Broadway MTS $76.37

Lexington Avenue MT $76.01

Madison Avenue MT $74.49

Park Avenue South MTS $73.55

Broadway MT $71.25

Eighth Avenue MTS $68.57

West 40s MT $68.20

Fifth Avenue MTS $67.95

Third Avenue MT $65.66

West 20s MTS $65.28

East 40s MT $63.17

Lower Fifth Avenue

(32nd - 47th

Streets)

MT $61.85

East 20s MTS $58.02

Madison Avenue MTS $53.37

Water Street DT $51.83

Broadway DT $51.08

*Park Avenue Submarket and Corridor averages are impacted on a

weighted basis by Citadel deal at 425 Park.

Average taking rents for direct deals with >5-year terms

TAKING RENT CORRIDOR AND SUBMARKET COMPARISONS



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$65.73

$68.18

$70.00

$72.31

$76.90

$83.32

$86.46

$93.50

$61.67

$62.78

$66.86

$65.80

Chelsea


Eastside

Downtown East


Times Square South

Penn Station

Westside

Sixth Ave/Rock Ctr.

Grand Central

Park Avenue

Plaza District

Downtown Midtown South Midtown

2016 YTD Average Work Amount ($/SF) Percent Change Year-Over-Year

Work amount for direct deals with >10-year terms, +10K SF

CONCESSIONS ANALYSIS

Landlords are spending more on build-

outs through prebuild programs or work

allowances.

Key

Takeaway


-8%

-5%

0%

11%

17%

18%

18%

26%

4%

8%

16%

-2%

Times Square South

Westside

Downtown East

Eastside



Sixth Ave/Rock Ctr.

Chelsea

Penn Station

Park Avenue

Plaza District

Grand Central



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7

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11

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9

8

9

Times Square

Downtown East

Eastside

Chelsea


Downtown West

Westside

Grand Central

Plaza District


Times Square South

Penn Station

Sixth Ave/Rock Ctr.

Park Avenue


2016 YTD Free Rent (Months) Percent Change Year-Over-Year

Free rent for direct deals with >10-year terms, +10K SF

CONCESSIONS ANALYSIS

Free rent has increased in about one-third

of Manhattan’s submarkets, but remained

flat or dropped in all others.

Key

Takeaway


-13%

-13%

0%

0%

0%

10%

11%

11%

13%

-11%

13%

14%

0%

0%

Times Square

Times Square South


Westside

Eastside

Downtown East

Grand Central

Downtown West

Park Avenue

Sixth Ave/Rock Ctr.

Penn Station

Plaza District


Chelsea



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19

48 44

12 8

19 17

24 25

36 33

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5 7

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50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

1Q-3Q 4Q

Midtown

30 Hudson Yards

888 Seventh Avenue

250 West 55th Street


7 Bryant Park

1095 Avenue of the Americas



712 Fifth Avenue

717 Fifth Avenue

745 Fifth Avenue

767 Fifth Avenue

9 West 57th Street

10 East 53rd Street

437 Madison Avenue

510 Madison Avenue

650 Madison Avenue

660 Madison Avenue

667 Madison Avenue

277 Park Avenue

280 Park Avenue

350 Park Avenue

375 Park Avenue

399 Park Avenue

425 Park Avenue

450 Park Avenue

499 Park Avenue

601 Lexington Avenue

Midtown South

111 Eighth Avenue


860 Washington Street

770 Broadway

315 Park Avenue South

Number of buildings that signed $100+ taking rents each year

TRIPLE-DIGIT TAKING RENT ASSETS

Despite an overall slow-down in rent growth,

demand remains for premier space. Manhattan is

set to match 2015 in +$100/SF rent buildings.

Key

Takeaway



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17

34

74

58

10 17

38

24

38 31

46

27

7

16

26

6

9

16

13

22

19

9

17

11

29

18

3 1 1 1 3 7

3 9

4

12

8

3 2 4 8 6

11 13 4

0

25

50

75

100

Transactions with taking rents over $100/SF

MANHATTAN TOP-TIER TRENDS

Transactions Under 20K SF: Transactions Over 20K SF: Relocations Renewals and Expansions Relocations Renewals and Expansions

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

The volume of triple-digit deals is consistent

with 2015 totals.

Key

Takeaway



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Transactions with taking rents over $75/SF

MIDTOWN SOUTH TOP-TIER TRENDS

Other 16%

Business Services

31%

FIRE 32%

TAMI 21%

2016 YTD MTS Taking Rents Over $75/SF By Industry

$75-$79.99 42%

$80-$84.99 21% $90-$94.99

5%

$95-99.99 5%

$100+ 27%

Number of Deals by Price

1 2

7 7

30

34

19

0

10

20

30

40

2010 2011 2012 2013 2014 2015 2016 YTD

Deal-making at the top end of the market in

Midtown South has slowed in 2016 from the

past two years.

Key

Takeaway

Number of Deals Signed Over $75/SF



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0%

5%

10%

15%

20%

25%

$40s $50s $60s $70s $80s $90s $100s $110s $120s $130s $140+

Number of Deals by Taking Rent

Under 10,000 SF

64%

10K-25K SF 23%

25K-50K SF 8%

50K-100K SF 2%

Over 100,000 SF

3%

Number of Deals by Size

MIDTOWN DEAL COMPOSITION Direct deals with five-year terms and longer

Company Address SF Lease Type Industry

Random House 1745 Broadway 605,000 Extension &

Expansion TAMI

C.V. Starr 399 Park Avenue 210,963 Renewal &

Expansion FIRE

Dentons 1221 Avenue of the Americas 207,371 Renewal Legal

Services

Bloomberg 919 Third Avenue 204,000 Expansion FIRE

Morgan Stanley 399 Park Avenue 110,000 Direct New FIRE

Despite strong leasing over 100,000 square feet,

the overwhelming majority of Midtown deals are

small and mid-sized deals in commodity space.

Key

Takeaway



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20

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

$40s $50s $60s $70s $80s $90s $100+


Under 10K SF 65%

10K-25K SF 25%

25K-50K SF 10%


MIDTOWN SOUTH DEAL COMPOSITION Direct deals with five-year terms and longer


Taboola 1115 Broadway 48,010 Direct New TAMI

Deloitte 330 Hudson Street 47,222 Sublease FIRE

Winton Capital 315 Park Avenue South 34,400 Direct New FIRE

Lieff Cabraser Heimann

& Bernstein LLP 250 Hudson Street 27,778 Renewal

Legal

Services

Ernst & Young 218 West 18th Street 27,008 Sublease FIRE

Few high-priced deals and a lack of large

transactions during 3Q16 underscore the

recent slow-down in activity in Midtown

South

Key

Takeaway



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21

0%

5%

10%

15%

20%

25%

30%

35%

$30s $40s $50s $60s $70s $80s


Under 10K SF 49%

10K-25K SF 33%

25K-50K SF 15%

Over 100K SF 3%


DOWNTOWN DEAL COMPOSITION Direct deals with five-year terms and longer


Zurich Insurance 4 World Trade

Center 131,876 Direct New FIRE

QBE 55 Water Street 97,228 Sublease FIRE

American Express 200 Vesey Street 80,000 Direct New FIRE

Port Authority of NY & NJ 80 Pine Street 57,245 Sublease Gov’t

The Solomon R.

Guggenheim Foundation 1 Liberty Plaza 46,588 Direct New Nonprofit

Downtown saw stability in the range of pricing

and a healthy mix in size of transactions.

Key

Takeaway



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3Q16

MANHATTAN DEVELOPMENT OVERVIEW


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TB

D

COMMERCIAL DEVELOPMENT PIPELINE MANHATTAN (MSF)

New

Construction

86.9 MSF

Expected

Delivery

15.0 MSF

Potential

Delivery

13.7 MSF

2014 837 Washington Street 1 World Trade Center

2015 7 Bryant Park 430 West 15th Street 2016 10 Hudson Yards 860 Washington Street 855 Avenue of the Americas 89 Bowery 2017 432 Park Avenue 390 Madison Avenue 540 West 26th Street 510-512 West 22nd Street 2 Pike Street 412-414 West 15th Street

2018 300 Lafayette Street 3 World Trade Center 425 Park Avenue 55 Hudson Yards 61 Ninth Avenue 40 Tenth Avenue

2019 1 Manhattan West 30 Hudson Yards 3 Hudson Boulevard 106 West 56th Street 2020 One Vanderbilt Avenue TBD 50 Hudson Yards 2 World Trade Center 2 Manhattan West 66 Hudson Boulevard 15 Penn Plaza 438 Eleventh Avenue 75 Ninth Avenue 44 Union Square East

Key

Takeaway

About 29 M Sq. Ft. of new office

product is under construction or in the

planning stages in Manhattan.



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3Q14 MANHATTAN DEVELOPMENT UPDATE

4b

4a

5

1

3c

3d

3a

3b

2

MANHATTAN

WEST

4a

4b

55 HUDSON

YARDS

1

450 WEST

33rd

STREET

2

1 2

3

4

Memorial

2 WTC

WTC

Transportation

Hub

WORLD TRADE CENTER

AND DOWNTOWN

3 HUDSON

BOULEVARD

5

7 BRYANT PARK

ONE

VANDERBILT

AVENUE

425 PARK

AVENUE

390 MADISON

AVENUE

1 WTC

3b

3a

Retail space 3c

4 WTC 3 WTC

6

MIDTOWN EAST

66 & 99

HUDSON

BOULEVARD

FAR WEST SIDE

6

7

7

10, 30 & 50

HUDSON YARDS

3d


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25

MANHATTAN DEVELOPMENT OVERVIEW

WORLD TRADE CENTER

PORT AUTHORITY

OF NY/NJ, DURST SILVERSTEIN PROPERTIES

1 World

Trade Center

2 World

Trade Center

3 World

Trade Center

4 World

Trade Center

3.0M SF 2.8M SF 2.5M SF 2.3M SF

2014 TBD 2018 2013

Completed Planned Under Construction Completed

MIDTOWN EAST

BANK OF CHINA L&L HOLDING,

RREEF

L&L HOLDING

COMPANY SL GREEN

7 Bryant

Park

390 Madison

Avenue

425 Park

Avenue

One Vanderbilt

Avenue

473,000 SF 843,710 SF 670,000 SF 1.8M SF

2015 2017 2018 2020

Completed Under Renovation Under Construction Planned


FAR WEST SIDE

THE RELATED

COMPANIES

MITSUI FUDOSAN,

RELATED

THE RELATED

COMPANIES BROOKFIELD PROPERTIES, QIA

THE RELATED

COMPANIES

MOINIAN

GROUP TISHMAN SPEYER

10 Hudson

Yards

55 Hudson

Yards

30 Hudson

Yards

1 Manhattan

West

2 Manhattan

West

50 Hudson

Yards

3 Hudson

Boulevard

66 Hudson

Boulevard

99 Hudson

Boulevard

1.7M SF 1.3M SF 2.6M SF 2.1M SF 2.1M SF 2.3M SF 1.8M SF 2.85M SF 1.3M SF

2016 2018 2019 2019 TBD TBD TBD TBD TBD

Completed Under Construction Under Construction Under Construction Planned Planned Under Construction Planned Planned


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26

Rendering

not yet

available

MANHATTAN BOUTIQUE DEVELOPMENT OVERVIEW

Rendering

not yet

available

YEUNG REAL ESTATE THE RELATED

COMPANIES VORNADO REALTY TRUST LM LEGACY GROUP

AURORA, WILLIAM

GOTTLIEB REAL ESTATE SAVANNA, ATOM ASSETS

2 Pike Street 300 Lafayette Street 61 Ninth Avenue 412 West 15th Street 40 Tenth Avenue 106 West 56th Street

Midtown South Midtown South Midtown South Midtown South Midtown South Midtown

93,000 SF 81,000 SF 167,170 SF 144,273 SF 116,205 SF 90,000 SF

2017 2018 2018 2017 2018 2019

Planned Under Construction Under Construction Under Construction Planned Planned


ROMANOFF EQUITIES CIM GROUP WING FUNG GROUP SAVANNA

VORNADO REALTY

TRUST, ALBANESE

ORGANIZATION

860 Washington Street 432 Park Avenue 89 Bowery 540 West 26th Street 512 West 22nd Street

Midtown South Midtown Midtown South Midtown South Midtown South

120,413 SF 71,000 SF 23,831 SF 128,367 SF 170,000 SF

2016 2017 2016 2017 2017

Completed Under Construction Under Construction Under Construction Under Construction

3Q16

BROOKLYN AND LONG ISLAND CITY OFFICE MARKET OVERVIEW


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28

121 Morgan Avenue

68 Ferris Street

87 Wythe Ave

25 Kent Avenue

Dumbo

Williamsburg

Navy Yard

Sunset Park

Building 3

25-30 Columbia Heights

Domino Sugar

Factory

80 Hudson Avenue

GMC Building 128

Dock 72

Industry City

Whale Square

Building

77 215 Moore Street

Bushwick

95 Evergreen Avenue

455 Jefferson Street

333 Johnson Avenue

41 Flatbush

Avenue

420 Albee

Square

29 Ryerson Street

47 Hall Street

10 Jay Street

Downtown

422 Fulton

Street

280 Richards Street

160 Van Brunt Street

314 Scholes Street

Redhook

BROOKLYN OFFICE DEVELOPMENT New Construction and Repositioned Buildings


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29

DUMBO DOWNTOWN BROOKLYN NAVY YARD

Triangle

Assets

Cibrano

Family

Kushner Co.,

CIM Group,

LIVWRK

Quinian Dev

Group, BLT

JEMB Realty

Corp.

Tishman

Speyer

Brooklyn Navy Yard

Development Corp.

Madison

Realty

Capital

Boston

Properties,

Rudin Mgt

Westbrook

Partners, RXR

10 Jay

Street

80 Hudson

Avenue

25-30

Columbia

Heights

41 Flatbush

Avenue

420 Albee

Square

422 Fulton

Street

GMC

Building 128

Building

77

Building

3

29 Ryerson

Street

Dock

72

47 Hall

Street

206,000 90,285 750,000 270,910 400,000 TBD 215,000 1,100,000 700,000 215,000 675,000 650,000

2016 2016 2018 2016 2018 TBD 2016 2017 2017 2017 2018 2018

New

Construction Redevelop Redevelop Redevelop

New

Construction Redevelop Redevelop Redevelop Redevelop Redevelop

New

Construction Redevelop

Underway Underway Proposed Underway Proposed Planned Underway Underway Planned Underway Proposed Proposed

Rendering

not yet

available

Rendering

not yet

available

Rendering

not yet

available

SUNSET PARK RED HOOK WILLIAMSBURG BUSHWICK

Jamestown,

Belvedere

Cap, Angelo

Gordon

Madison

Realty

Capital

PWR Estate

Four

Thor

Equities

Heritage

Equity

Cayuga

Capital

Two Trees

Mgt

Savanna,

Hornig

Capital

Lincoln

Property

Group

Hudson

Co.

Princeton

Holdings

Normandy,

Royalton,

Sciame

Heritage

Equity

Industry

City

Whale

Square

160 Van

Brunt

Street

68

Ferris

Street

280

Richards

Street

25

Kent

Avenue

87

Wythe

Avenue

Domino

Sugar

Factory

95

Evergreen

Avenue

455

Jefferson

Street

314

Scholes

Street

121

Morgan

Avenue

333

Johnson

Avenue

215

Moore

Street

6,000,000 405,416 111,565 1,200,000 622,103 400,000 100,000 380,000 165,000 122,700 80,000 100,000 285,000 170,000

In phases

starting 2015 2016 2016 2020 TBD 2018 2018 TBD 2016 2016 2018 TBD TBD TBD

Redevelop Redevelop Redevelop New

Construction

New

Construction

New

Construction

New

Construction Redevelop Redevelop Redevelop Redevelop Redevelop Redevelop Redevelop

Underway Completed Completed Proposed Proposed Proposed Underway Planned Completed Underway Proposed Planned Planned Planned

Submarket

Owner/

Developer

Building

Address

Size (SF)

Year Open

Project Type

Status

BROOKLYN OFFICE DEVELOPMENT New Construction and Repositioned Buildings

Submarket

Owner/

Developer

Building

Address

Size (SF)

Year Open

Project Type

Status



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30

DOWNTOWN

BROOKLYN

SUNSET

PARK DUMBO

WILLIAMSBURG/

BUSHWICK NAVY YARD

2013 Inventory (SF) 15,985,404 6,000,000 3,254,111 1,532,155 1,698,330

Current Inventory (SF) 16,027,693 6,500,000 3,908,181 1,592,745 3,155,330

Projected Inventory (SF)

Through 2018

16,427,693 6,500,000 4,658,181 3,356,196 4,480,330

Inventory Differential

(SF)

2013-2018

442,289 500,000 1,404,070 1,824,041 2,782,000

BROOKLYN’S CHANGING INVENTORY Impact of New Construction and Repositioned Buildings

2.8%

SF DIFFERENCE

2013-2018

8.3%

SF DIFFERENCE

2013-2018

43.1%

SF DIFFERENCE

2013-2018

119.1%

SF DIFFERENCE

2013-2018

163.8%

SF DIFFERENCE

2013-2018

Key

Takeaway

Redevelopment and projects under

construction are creating new submarkets in

Brooklyn.



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31

0%

2%

4%

6%

8%

10%

12%

14%

16%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16

Average Asking Rent (Price/SF) Availability (%)

Overall Average Asking Rent and Availability

BROOKLYN MARKET TRENDS

Across Brooklyn, new inventory continued

to push asking rents and availability to

new historic highs.

Key

Takeaway

0%

2%

4%

6%

8%

10%

12%

14%

16%

$0

$10

$20

$30

$40

$50

$60

3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16


Prime Assets Average Asking Rent and Availability



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32

Greenpoint

Bushwick

Bedford

Stuyvesant

Clinton

Hill Fort

Greene

Navy

Yard

DUMBO

Cypress

Hills

East

New York Brownsville

Crown

Heights

East

Flatbush

Canarsie

Prospect

Heights Park

Slope

Red

Hook

Prospect

Park Lefferts

Gardens

Sunset

Park Windsor

Terrace

Bay

Ridge Dyker

Heights

Fort

Hamilton Bensonhurst

Bath

Beach

Gravesend

Coney

Island

Sea

Gate

Brighton

Beach

Manhattan

Beach

Sheepshead

Bay Gerritsen

Beach

BK

Marine Park Barren

Island

Mill

Basin

Bergen

Beach Marine

Park

Flatlands

Midwood

Borough

Park Flatbush

Kensington

Prospect

Park

South

Jamaica Bay

Upper New York

Bay

Lower New York

Bay

Cobble Hill

Williamsburg

BK Heights

Prime Assets are Class A and newly repositioned space. Standard Assets are all other office inventory.

BROOKLYN SUBMARKET SNAPSHOT

Total Inventory: 16,027,693 SF

Availability Rate: 4.6%

Average Asking Rent, Prime Assets: $48.30/SF

Average Asking Rent, Standard Assets: $41.22/SF

YTD Absorption: -117,085 SF

DOWNTOWN BROOKLYN





YTD Absorption: 1,300 SF

WILLIAMSBURG / BUSHWICK


Average Asking Rent: $39.75/SF

The addition of 29 Ryerson Street caused a jump in rent in 3Q16.

BROOKLYN NAVY YARD


Average Asking Rent: $27.73/SF

SUNSET PARK






DUMBO



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33

$27.73

$38.35 $39.75

$48.30

$52.76

$58.00

$62.40

$72.60

$82.84

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Sunset ParkPrime

Long Island CityPrime

Brooklyn NavyYard - Prime

DowntownBrooklyn - Prime

Williamsburg /Bushwick

Prime

DumboPrime

DowntownManhattan

Overall

Midtown SouthOverall

MidtownOverall

Average Asking Rents ($/SF)

ASKING RENT COMPARISON

Prime Assets are Class A and newly repositioned space.

Dumbo and Williamsburg’s prime assets

compete with Downtown Manhattan.

Key

Takeaway



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34

0%

4%

8%

12%

16%

20%

$10

$15

$20

$25

$30

$35

$40

3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16


Overall Average Asking Rent and Availability

LONG ISLAND CITY TRENDS

Asking rents reached new heights

in 3Q16, rising to $37.78/SF, a

14.8% increase year-over-year.

The Factory District drove leasing

this quarter. Media and Internet

company IAC signed for 8,000

square feet at 47 Austell Place.

Lyft and Uber both expanded in

the Falchi Building.

Availability declined 70 basis

points to 13.2% this quarter,

however current availability is still

significantly higher than it was 12

months ago.

Despite Long Island City’s asking rents

reached a new all time high level as new

and improved inventory droves rents up.

Key

Takeaway



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35

Astoria

Factory District

Hunter’s Point/ LIC Waterfront







ASTORIA






THE FACTORY DISTRICT






HUNTERS POINT/LIC WATERFRONT

Prime Assets are Class A and newly

repositioned space. Standard Assets are all

other office inventory.

LONG ISLAND CITY SUBMARKET SNAPSHOT


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www.ngkf.com

New York City

HEADQUARTERS

125 Park Avenue

New York, NY 10017

212.372.2000

Todd P. Hershman

Associate Director

212.359.8520

[email protected]

Jonathan Mazur

Managing Director, Research

Stephanie Jennings

Tri-State Director, Research

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Knight Frank (NGKF) has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of NGKF. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient’s choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of NGKF, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.

Newmark Grubb Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our

data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents.

Newmark Grubb Knight Frank Research Reports are also available at www.ngkf.com/research

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3Q16 NGKF NY Office Market Overview 11 1 16