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CORE National Market Overview 2011 - Commercial Real Estate Market Overview 2011
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2010
NATIONAL MARKET OVERVIEW
TABLE OF CONTENTS
ADDITIONAL INFORMATION INCLUDED IN THIS REPORT WAS PROVIDED BY COSTAR GROUP WWW.COSTAR.COM
2
NATIONAL MARKET OVERVIEW
SECTION I - INTRODUCTION03 Introduction
04 National Market Summary
06 Statistical Summary
SECTION I I - CIT Y STATISTICS07 Atlanta, GA
08 Austin, TX
09 Birmingham, AL
10 Chicago, IL
11 Colorado Springs, CO
12 Dallas, TX
13 Denver, CO
14 Fort Worth, TX
15 Hampton Roads, VA
16 Kansas City, MO
17 Los Angeles, CA
18 Miami, FL
19 Milwaukee, WI
20 New York, NY
21 Northern/Central NJ
22 Oklahoma City, OK
23 Philadelphia, PA
24 Portland, OR
25 Richmond, VA
26 San Antonio, TX
27 San Francisco Bay Area, CA
28 St. Louis, MO
29 Washington, D.C.
SECTION I I I - ADDITIONAL INFORMATION30 Industrial Services
31 Board of Directors
2010
The National Market Overview is published by
MB Real Estate, an active member of the CORE Network.
To obtain additional copies or for further information,
please contact:
Andrew J. DavidsonEVP/Managing Director of Corporate Services &
Tenant Advisory at MB Real Estate
181 West Madison Street, Suite 4700
Chicago, Illinois 60602
p: 312 726 1700
www.mbres.com
3
2 0 1 0 INTRODUCTIONNATIONAL MARKET OVERVIEWThe National Market Overview was created to spotlight many of the active commercial real estate markets in U.S. citieswithin the CORE Network.
WHAT IS THE CORE NET WORK?CORE Network is an over 25-member organization of mid-sized commercial real estate companies that are hand se-
lected to provide a full line of commercial real estate services to clients. With an international geographic reach and
a full line of service capabilities, CORE is often compared to some of the largest commercial real estate providers in
the industry.
CORE offers its clients comprehensive real estate investment, management, development, strategic planning, tenant
representation, acquisition, disposition, and financial services. It meets the varying requirements of its members’
clients by employing the expertise of industry-specific account teams and handpicked specialists from its growing body
of member firms. This collective effort enhances the overall capabilities of CORE; however, each member is
empowered and committed to providing its own clients with a single-point-of accountability. Member clients therefore
have the best of all worlds, the capabilities and services of a highly organized Network with the flexibility and
customization of a single-source provider. Please visit www.corenetworkcre.org for more information. ■
4
2 0 1 0 NATIONAL MARKET SUMMARYOVERVIEW AND OUTLOOKWhile much of the United States is recovering from recession, the real estate markets across CORE member cities arelagging in performance. The unemployment rate has fallen over the year. Total employment is 5.2 percent below peak2007 levels, which puts considerable pressure on the office market.
CoStar’s National Office total vacancy rate is now 13.4 percent, unchanged since the end of 2009 but 270 basispoints above the 2006 low. Net absorption has been positive for the year, but continued deliveries have added tooversupply. Construction has slowed considerably with only 34 million square feet under construction compared tonearly 158 million square feet just three years ago. A majority of these developments were underway before therecession began and are slowly finishing. Most CORE markets note that construction has stopped. Yet some, includingDallas, Denver, Miami, and Nashville, still faced major deliveries this year creating further oversupply.
Total occupied space has only fallen 0.2 percent since peak contrasting with the 5.2 percent decline in headcount,creating a disconnect between office market fundamentals and the job market. Due to long-term leases, tenants havebeen unable to reduce their footprint to match their smaller work force. Therefore, considerable excess space existsfor many tenants across the United States. Despite economic stabilization, vacancy may continue to rise as this excessspace is shed when leases expire. At the very least, tenants will need to backfill this space before they increasedemand for additional square footage.
From a capital markets perspective, the market has shown signs of life in 2010. The assets that are trading are at theopposite end of the spectrum. While distressed office buildings have garnered interest, so have trophy assets inpremier markets. The Moody’s/REAL Commercial Property Price Index climbed 2.8 percent from a year earlier but is
5
still 42 percent below its October 2007 peak,indicative of the adjusted pricing conditions.
Several markets, including Atlanta and Milwaukee,noted a steady increase in overall vacancy throughoutthe year. Most markets agree that tenants hold thenegotiating power and landlords have increasedconcessions markedly. This is even true in Portland,the market with the lowest total vacancy rate.
However, the news is not all bad. Leasing activity hasincreased in many markets. Colorado Springs andDallas both reported that many tenants are relocatingto take advantage of lowered rents. Correspondingly,Chicago and Northern/Central NJ note a flight toquality with occupancy increasing in Class A spacewhile falling in others. Kansas City, Los Angeles, NewYork City, and Washington, D.C. see signs of
MarketTotal Vacancy
(YYE 2010))Increase
Birmingham, AL 13.0% -3.8%St. Louis, MO 13.8% -0.2%Philadelphia, PA 13.5% 1.2%Denver, CO 14.4% 1.4%Dallas, TX 23.0% 2.4%
Markets with Decrease/Smallest Vacancy Increase(Mid 2008 to YE 2010)
MarketTotal Vacancy
(YE 2010)Increase
San Antonio, TX 17.1% 5.2%New York, NY 14.7% 5.6%Milwuakee, WI 21.1% 5.9%Colorado Springs, CO 17.2% 8.7%Northern/Central NJ 26.6% 9.0%
Markets with the Largest Vacancy Increase(Mid 2008 to YE 2010)
stabilization while Hampton Roads, Miami, Oklahoma City, and San Antonio noted positive absorption during the year.
2011 is expected to be a year of slow economic growth. It will be driven by increased productivity, coupled with slowemployment growth. Office markets must overcome uncertainty before they can substantially rebound.
25%
30%
TTotal Vacancy by Market - Year End 2010
10%
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Total Vacancy by Market - Year End 2010
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Total Vacancy by Market - Year End 2010
OFFICE MARKET STATISTICAL SUMMARY
COMPILED BY MB REAL ESTATE WWW.MBRES.COM (312) 726 -1700
6
LocationSize of Market
(sf)YTD Absorption
(sf)Direct Vacancy
%
Sublease Vacancy
%
Total Vacancy %
Total Vacancy Change since
2009%
Atlanta, GA 201,421,815 (444,769) 18.9% 2.4% 21.2% 2.3%
Austin, TX 80,410,862 638,673 13.8% 0.7% 14.5% -0.8%
Birmingham, AL 17,250,000 10,900 10.7% 2.4% 13.0% 0.9%
Chicago, IL 242,984,156 (1,766,053) 19.2% 2.9% 22.1% 1.2%
Colorado Springs, CO 27,542,895 984,989 16.7% 0.5% 17.2% 4.5%
Dallas, TX 206,076,977 108,017 22.0% 1.0% 23.0% 1.2%
Denver, CO 178,542,917 1,258,246 14.4% 0.0% 14.4% -3.1%
Fort Worth, TX 45,575,336 57,361 13.4% 0.5% 13.9% -0.5%
Hampton Roads, VA 45,283,089 204,353 12.4% 0.4% 12.8% 3.5%
Kansas City, MO 104,700,509 (274,134) 13.2% 0.5% 13.7% -0.3%
Los Angeles, CA 378,795,720 2,009,415 12.3% 0.9% 13.1% 2.3%
Miami, FL 227,394,634 1,379,920 14.1% 0.6% 14.7% 0.1%
Milwuakee, WI 21,877,428 (121,894) 18.5% 2.6% 21.1% 4.3%
New York, NY 686,000,000 129,000 12.1% 2.6% 14.7% 1.4%
Northern/Central NJ 69,358,368 (372,998) 24.0% 2.6% 26.6% 4.3%
Oklahoma City, OK 14,591,894 33,433 19.5% 0.3% 19.7% 1.9%
Philadelphia, PA 177,773,373 434,853 12.6% 0.9% 13.5% -3.9%
Portland, OR 90,982,493 229,128 11.0% 0.2% 11.7% 1.4%
Richmond, VA 58,889,080 245,039 11.4% 0.6% 11.9% 2.7%
San Antonio, TX 25,667,379 498,801 15.5% 2.4% 17.1% 4.0%
San Francisco Bay Area, CA 381,165,900 1,926,170 12.3% 0.9% 13.3% -2.0%
St. Louis, MO 51,119,000 218,000 12.9% 0.9% 13.8% 1.3%
Washington, D.C. 326,532,272 4,225,313 13.6% 1.5% 15.2% -2.1%
CCORE Network Vacancy Summary
Please note: Numbers in parentheses are negative.
ATLANTA, GA
COMPILED BY MB REAL ESTATE WWW.MBRES.COM (312) 726 -1700
ACKERMAN & CO. WWW.ACKERMANCO.NET
7
MARKET OVERVIEWThe Atlanta Office Market has seen a steady increasein the overall vacancy rate since 2009. Vacancy iscurrently sitting at 20.3 percent. This increase ismainly due to several million square feet of officespace delivered in late 2009 and early 2010 coupledwith the increasing unemployment rate. At a timewhen vacancy is increasing and rental rates aredecreasing, tenants have the upperhand.Creditworthy tenants have a host of options availableto them in the current market whether they arenegotiating with their current landlord or looking fornew space.
TRENDS & ECONOMIC CONDITIONSMetro Atlanta’s unemployment rate has seen a modestdecrease from 10.2 percent in late 2009 to 9.9percent. According to the state labor commissioner,the change was a result of individuals exiting theworkforce due to their inability to find employment. Sothis change actually represents little improvement butmay indicate that Atlanta job market is at or near abottom. ■
Adddress Size ((sf)) Submarket
1075 Peachtree St 572,058 Midtown600 Peachtree St 524,341 Downtown100 Peachtree St 404,019 Downtown3438 Peachtree Rd 396,515 Buckhead1230 Peachtree St 384,183 Midtown
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
None
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 64,422,681 308,036 19.4% 1.7% 21.1%Suburban 136,999,134 (752,805) 18.6% 2.7% 21.3%Total 201,421,815 (444,769) 18.9% 2.4% 21.2%
Vacancy Rates
Tenant Submarket Address Size (sf)
Auto Trader Central Perimeter 3003 Summit Blvd 339,200Kilpatrick Stockton LLP Midtown 1100 Peachtree St 206,140InComm Downtown 250 Williams St 184,824Zurich North America Central Perimeter 1001 Summit Blvd 136,578GE Digital Energy Northwest Atlanta 2018 Powers Ferry Rd 107,207
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
AUSTIN, TXMARKET OVERVIEWThe city market contains 13,239,047 square feet andis currently showing a vacancy rate of 10.2 percent,while the suburban market contains just over 67million square feet and is showing a vacancy rate of15.4 percent. There currently are 213,445 square feetof new development to be completed within the nextyear.
TRENDS & ECONOMIC CONDITIONSBusiness and consumer confidence began to rebounddue to the stabilizing economy, causing the market torespond with consecutive quarters of positiveabsorption. The sublease vacancy rate in the CBD fell0.5 percent while the suburban market subleasevacancy rate dropped 0.1 percent. The completion ofvacant new office space in 2011 may reduce ornegate the benefits of slow but steady positive netabsorption in 2010. Large office users havestreamlined their space needs and the trend to vacatelarge blocks of space in favor of newer, more efficientlayouts may continue with new construction in thecoming quarters. ■
COMPILED BY MB REAL ESTATE WWW.MBRES.COM (312) 726 -1700
SWEARINGEN REALTY GROUP, LLC WWW.SWEARINGEN.COM
8Adddress Size ((sf)) Submarket
7700 W Parmer Ln - Bldg C 282,000 Far Northwest6800 Burleson Rd 206,037 Southeast13785 Research Blvd 204,940 Far Northwest7700 W Parmer Ln - Bldg D 140,000 Far Northwest10700 Pecan Park Blvd 100,947 Far Northwest
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Lakeway Medical Plaza 80,000 2nd Quarter 2012Plaza North Office Building 36,112 3rd Quarter 2011Vista 620 Professional Center 35,000 2nd Quarter 2011
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 13,239,047 195,875 9.3% 0.9% 10.2%Suburban 67,171,815 442,798 14.6% 0.7% 15.4%Total 80,410,862 638,673 13.8% 0.7% 14.5%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Hanger Orthopedic Group, Inc. North 10910 Domain Dr 75,509St. Jude Medical Inc. Southwest 6300 Bee Caves Rd 75,177LifeSize Southwest 1601 MoPac Expy S 72,824Banc Vue Northwest 4516 Seton Center Pky 62,193Apple Southwest 916 S Capital of Texas Hwy 54,000
Largest Tenant Transactions In 2010
BIRMINGHAM, ALMARKET OVERVIEWThe direct vacancy rate in the Birmingham market hasincreased slightly over the past twelve months to 13percent. The only new construction of any size hasbeen in healthcare and education. The market isstagnant at best and negative absorption is theprimary indicator for 2010. Class A properties aremaintaining decent occupancy levels but have a fairamount of sublease space available. The B and Cproperties are struggling to compete due to lack ofgrowth in new and emerging office users.
TRENDS & ECONOMIC CONDITIONSThe unemployment rate is holding steady at 8.6percent and that number is expected to decrease aswe move through 2011. Occupancy has only droppedabout 1 percent with rental rates keeping pace. Theanticipation is that 2011 will be more of the same withmost companies maintaining or downsizing space.One bright spot in the market is activity for data centerspace. Some groups are planning for disaster recoverywhile others need a redundant system. ■
COMPILED BY MB REAL ESTATE WWW.MBRES.COM (312) 726 -1700
Adddress Size ((sf)) Submarket
Colonnade 410,000 280Wells Fargo 165,000 CBDGrandview 60,000 280Cahaba Beach 50,000 280
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
None
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 4,450,000 (17,000) 14.0% 0.5% 14.5%Suburban 12,800,000 27,900 9.5% 3.0% 12.5%TTotal 17,250,000 10,900 10.7% 2.4% 13.0%
Vacancy Rates
HARBERT REALTY SERVICES WWW.HARBERTREALTY.COM
Please note: Numbers in parentheses are negative.
9
Tenant Submarket Adddress Size ((sf))
Walter Energy Riverchase Galleria Tower 40,000Southern Link Riverchase Southlake 30,000Daxco Midtown University Park 25,000Adeptio Wellness CBD Regions/Harbert 18,600
Largest Tenant Transactions In 2010
CHICAGO, IL
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MB REAL ESTATE WWW.MBRES.COM
10
MARKET OVERVIEWThe direct vacancy rate in Chicago’s CBD hasgradually risen over the past twelve months to 16.3percent. Despite a lack of new construction, job lossescoupled with tenants’ reluctance to make real estatedecisions has kept the market sluggish. Class Aproperties have experienced increased demand,however they have been outweighed by occupancylosses in Class B and C properties.
TRENDS & ECONOMIC CONDITIONSDespite a peak-to-current decline in total employmentof 8.6 percent, occupancy has only fallen 1.5 percentin the CBD. Rental rates continue to decline across allbuilding classes, further signaling that the bottom ofthe market has not been reached. Therefore, vacancyrates are expected to increase through 2012. Severaltenants with large space requirements have leasesexpiring within the next three years. These tenants’decisions may have a large impact on the health ofthe market. Recovery can occur prior to then if supplycontinues to be constrained and if the CBD continuesto attract outside firms. ■
Adddress Size ((sf)) Submarket
500 W Monroe 369,207 West Loop (CBD)1701 Golf Rd 281,667 Northwest (Suburban)21440 Lake Cook Rd 277,200 Northwest (Suburban)200 E Randolph 273,034 East Loop (CBD)700 Oakmont Ln 256,767 East-West (Suburban)
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
300 E Randolph (Expansion) 933,710 1st Quarter 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 130,603,524 (796,143) 16.3% 2.4% 18.7%Suburban 112,380,632 (969,910) 22.6% 3.4% 25.9%TTotal 242,984,156 (1,766,053) 19.2% 2.9% 22.1%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
UBS West Loop (CBD) 1 N Wacker 393,000Career Education Corp. Northwest (Suburban) 231 N Martingale Rd 317,200Neal, Gerber & Eisenberg Central Loop (CBD) 2 N LaSalle 179,451Nuveen Investments West Loop (CBD) 333 W Wacker 167,000Federal Deposit Insurance Corp. Northwest (Suburban) 200 N Martingale Rd 150,705
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
COLORADO SPRINGS, CO
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CAMERON BUTCHER COMMERCIAL REAL ESTATE WWW.CAMERONBUTCHER.COM
11
MARKET OVERVIEWAfter two consecutive years of negative absorption, itappears (at least on the surface) that 2010 will breakthis downward trend. Cumulative absorption for thefirst three quarters totals 984,989 square feet. Allthree markets showed positive absorption; however,Office's 706,553 square feet was offset by 285,923square feet of owner-occupied construction and theIntel building purchase at 289,255 square feet.
TRENDS & ECONOMIC CONDITIONSThe "musical chairs" game (relocating for lower rentand downsizing) helped to produce 1.9 million squarefeet of leasing during the first three quarters of 2010.Keeping existing tenants and attracting the few newones will still involve aggressive marketing and rentconcessions. Until the job market improves, free rentand other incentives will be needed to lure tenantsfrom one property to another and attract the limitednumber of new tenants. ■
Adddress Size ((sf)) Submarket
565 Space Center Dr 90,099 Southeast10807 New Allegiance Dr 60,936 Northeast
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
None
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 27,542,895 984,989 16.7% 0.5% 17.2%
Total 27,542,895 984,989 16.7% 0.5% 17.2%
Vacancy Rates
Tenant Submarket Address Size (sf)
Colorado Springs Health Partners North Union Medical Campus, Build One 48,637Colorado Springs Health Partners North Union Medical Campus, Build Two 46,626Kaiser Permanente Northeast Corporate Point 21,500
Largest Tenant Transactions In 2010
DALLAS, TX
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SWEARINGEN REALTY GROUP, LLC WWW.SWEARINGEN.COM
12
MARKET OVERVIEWThe city market contains almost 33 million square feetand is currently showing a vacancy rate of 29.5percent, while the suburban market contains just over173 million square feet and is showing a vacancy rateof 21.8 percent. There currently is almost 460,000square feet of new development to be completedwithin the next year.
TRENDS & ECONOMIC CONDITIONSBusiness and consumer confidence remains low dueto the current economy, causing the market to operatecautiously. There is a strong concern for the officemarket as companies merge and put space on themarket for sublease. Recently, the completion ofvacant new office space has reduced or negated thebenefits of positive net absorption. Large office usershave streamlined their space needs and have vacatedlarge blocks of space in favor of newer, more efficientlayouts. ■
Address Size (sf) Submarket
13737 Noel Rd 379,518 Quorum / Bent Tree1601 Elm St 346,855 CBD1201 Elm St 308,703 CBD1717 McKinney Ave 293,238 Uptown / Turtle Creek1700 Pacific Ave 289,625 CBD
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
1001 E Lookout Dr 1,000,000 20103410 Worth St 459,717 3rd Quarter 20111717 McKinney Ave 369,656 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 32,908,326 (375,246) 28.4% 1.1% 29.5%Suburban 173,168,651 483,263 20.8% 1.0% 21.8%TTotal 206,076,977 108,017 22.0% 1.0% 23.0%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Caris Diagnostics Las Colinas 6655 MacArthur Blvd 172,232Baylor Healthcare System Lewisville 2501 S State Hwy 121 172,000Patton Boggs Uptown / Turtle Creek 2000 McKinney 114,000SoftLayer Technologies Quorum / Bent Tree 4849 Alpha Rd 104,736Huawei Technologies USA Upper Tollway / W Plano 5700 Tennyson Pky 103,148
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
DENVER, COMARKET OVERVIEWThe third quarter of 2010 ended with a vacancy rateof 14.5 percent, which is higher than the previousquarter, with net absorption totaling a positive30,339 square feet in the third quarter. Vacantsublease space decreased in the quarter, ending thequarter at 1,446,274 square feet.
TRENDS & ECONOMIC CONDITIONSRental rates ended the third quarter at $19.97, anincrease over the previous quarter. A total of fourbuildings were delivered to the market in the quartertotaling 393,596 square feet, with 784,800 squarefeet still under construction. ■
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CAMERON BUTCHER COMMERCIAL REAL ESTATE WWW.CAMERONBUTCHER.COM
13Adddress Size ((sf)) Submarket
1900 16th St 243,242 Platte River6550-6560 Greenwood Plaza 197,528 Greenwood Village385 Interlocken Crescent 113,957 Broomfield County9127 S Jamaica St 104,440 Meridian1225 17th St 103,760 CBD
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
None
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 26,592,582 182,831 14.0% 0.0% 14.0%Suburban 151,950,335 1,075,415 14.5% 0.0% 14.5%Total 178,542,917 1,258,246 14.4% 0.0% 14.4%
Vacancy Rates
Tenant Submarket Address Size (sf)
United Launch Alliance Southeast Suburban multiple buildings 418,320LGS, Inc. Northwest 11300 Westmoor Circle 133,000Social Security Administration CBD 1001 17th St 106,000Williams Companies CBD 1001 17th St 105,683WildBlue Communications Southeast Suburban 349 Inverness Dr South 98,445
Largest Tenant Transactions In 2010
FORT WORTH, TXMARKET OVERVIEWThe CBD market contains just over 9 million squarefeet of office space and is currently showing a vacancyrate of 11.2 percent, while the suburban marketcontains over 36 million square feet and is showing avacancy rate of 14.6 percent. The Fort Worth marketbrought on line almost 462,000 square feet of newoffice space in 2010. There are no new officedevelopments currently underway.
TRENDS & ECONOMIC CONDITIONSThe Fort Worth market continues to be at equilibrium.Leasing activity should pick up in 2011, as tenants’real estate needs become clearer. Effective rentalrates still have room to fall, as landlords remainaggressive in negotiations, by offering concessions inorder to sign new tenants and to keep their existingtenants. Rental rates are expected to remain softthrough most of 2011, with the current economicconditions. ■
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Adddress Size ((sf)) Submarket
1 E Kirkwood Blvd 381,376 Westlake/Grapevine3 Campus Cir 120,243 Westlake/Grapevine777 Main St 73,186 CBD7000 Calmont Ave 60,453 West SW Ft. Worth8 Campus Cir 57,213 Westlake/Grapevine
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
1000 Montgomery St 461,805 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 9,283,329 187,622 10.7% 0.5% 11.2%Suburban 36,292,007 (130,261) 14.1% 0.5% 14.6%Total 45,575,336 57,361 13.4% 0.5% 13.9%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Quicksilver Resources Ft Worth CBD 801 Cherry St 115,494Dale Resources Ft Worth CBD 500 Taylor St 70,000Bell Helicopter HEB / Mid-Cities 2208 N Highway 121 35,255
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
14
SWEARINGEN REALTY GROUP, LLC WWW.SWEARINGEN.COM
HAMPTON ROADS, VAMARKET OVERVIEWHampton Roads, Virginia is also known as the VirginiaBeach/Norfolk/Newport News MSA. The regionexperienced positive absorption of 244,442 squarefeet in the third quarter, the most since the 4th quarterof 2007 when 286,901 square feet were leased.Although the 2nd Quarter of last year came close at206,222 it was offset by a negative of (214,386square feet) in the following three months.
TRENDS & ECONOMIC CONDITIONSRates are declining in the last two years but onlyslightly, retaining approximately $21.45 for Class Aspace in the central business district for the entire yearof 2010. Two major, Class A deliveries in theSouthside CBD of Downtown Norfolk have increasedthe local inventory to over 45 million square feet, butthe horizon shows only smaller, Class B properties inthe pipeline until demand increases. Medical, highereducation, government contracting and engineeringfirms continue to be the industries that are demandingthe largest office suites in the market. ■
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DIVARIS REAL ESTATE, INC. WWW.DIVARIS.COM
15Adddress Size ((sf)) Submarket
5800 Northampton Blvd 63,904 Central Norfolk, Southside2877 Guardian Lane 24,000 Virginia Beach, Southside222 Central Park Ave 23,000 Virginia Beach CBD, Southside2901 S Lynnhaven Rd 20,512 Virginia Beach, Southside3 Commercial Place 16,558 Norfolk CBD, Southside
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
The Wells Fargo Center 299,887 2nd Quarter 2010Fort Norfolk Medical Office Tower 196,000 3rd Quarter 2010Virginia Natural Gas Building 48,242 4th Quarter 2010Greenbrier Medical Office Bldg II 27,476 4th Quarter 2010101 Production Dr 30,000 2nd Quarter 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 9,221,218 65,404 13.2% 0.3% 13.5%Suburban 36,061,871 138,949 12.2% 0.4% 12.6%Total 45,283,089 204,353 12.4% 0.4% 12.8%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Verizon Wireless Virginia Beach, Southside TRC Center III, Virginia Beach 52,329Booz Allen Hamilton Inc. Central Norfolk, Southside Twin Oaks II, Norfolk 34,577Strayer University Chesapeake, Southside Independence Place, Chesapeake 25,622Vanasse Hangan Brustlin, Inc. Virginia Beach CBD, Southside Two Columbus Center, Town Center of Virginia Beach 15,618Strayer University Newport News, Peninsula Interstate Professional Center Bldg 2 15,000
Largest Tenant Transactions In 2010
KANSAS CITY, MOMARKET OVERVIEWKansas City’s Metropolitan Office Market concluded2010 with an overall vacancy rate of 13.7 percent.Overall net absorption for the year was a negative300,000 square feet. Class A office space recorded apositive net absorption of approximately 100,000square feet with all other office classes finishing 2010with the following overall negative absorptionnumbers; Class B was 225,000 square feet and ClassC was 175,000 square feet.
TRENDS & ECONOMIC CONDITIONSThanks to agriculture, distribution, governmentservices and continued growth in the animal healthand bio-science industries the Kansas City metro areaunemployment rate is approximately 8 percent. Thecommercial real estate market has shown some signsof stabilizing rental rates and lease incentives due tovery little new inventory delivered or underconstruction in 2010 and relatively solid ownershipthroughout the market. ■
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LASALA-SONNENBERG COMMERCIAL REALTY CO. WWW.LASALA-SONNENBERG.COM
16Adddress Size ((sf)) Submarket
Towne Center 400,000 CBDSprint Campus 300,000 South Johnson CountyOne Main Center 300,000 CBD
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Park Place 62,726 South Johnson County
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 26,534,739 (123,386) 14.9% 0.5% 15.4%Suburban 78,165,770 (150,748) 12.6% 0.5% 13.1%TTotal 104,700,509 (274,134) 13.2% 0.5% 13.7%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
FAA CBD 901 Locust 204,605UHLIG, LLC South Johnson County Pine Ridge Plaza 77,828FDIC CBD Towne Pavilion 70,044BKD Accounting CBD 1201 Walnut 46,136GSA South Johnson County 7600 College 50,000
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
LOS ANGELES, CAMARKET OVERVIEWThe direct vacancy rate in the Los Angeles market hasgrown over the past twelve months from 9.8 percentto 12.3 percent, with the suburban markets takingmore of a hit compared to Downtown Los Angeles.The market is still experiencing negative netabsorption, although at an improving rate. A significantamount of positive net absorption is occurring forsublease space. Rental rates continue to adjust lowerto vie for the available tenants.
TRENDS & ECONOMIC CONDITIONSThe employment market is improving, althoughbusinesses are hiring part time employees. 2011 ispoised to be more of the same, with a slow turnaroundin the fundamentals. Tenants have been extendingtheir lease for short terms rather than paying to moveand build out new space, especially with theescalating cost of internet connectivity in the digitalage. For the tenants that take advantage of the lowlease rates, there has been a pick-up in largerrequirements and the willingness to sign longer termleases. ■
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RAMSEY-SHILLING COMMERCIAL REAL ESTATE SERVICES WWW.RAMSEY-SHILLING.COM
17Adddress Size ((sf)) Submarket
2900 W Alameda Ave 443,356 Burbank2029 Century Park East 386,548 Century City2300 W Empire Ave 300,300 Burbank2260 E Impreial Highway 298,728 El Segundo2049 Century Park East 283,476 Century City
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
6163 Centinela Ave 350,639 Proposed5800 W Sunset Blvd 315,000 Proposed700 Corporate Pointe 278,604 Proposed5900 Center Dr 272,000 Proposed5901 Center Dr 258,100 Proposed
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 68,889,319 (884,750) 10.3% 0.30% 11.1%Suburban 309,906,401 2,894,165 12.7% 0.80% 13.5%TTotal 378,795,720 2,009,415 12.3% 0.85% 13.1%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
E! Entertainment Miracle Mile 5750 Wilshire Blvd 355,304Southern California Gas Downtown LA 555 W Fifth St 350,000County of Los Angeles Downtown LA 1933 S Broadway 142,360HBO Santa Monica 2500 Broadway 128,000eHarmony Santa Monica 2401 Colorado Ave 64,450
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
MIAMI, FLMARKET OVERVIEWTwo new buildings in the Brickell Avenue/DowntownMiami corridor were completed totaling over 1.3million square feet. Those two submarkets contained7.4 million square feet of Class A space, so the newspace will add nearly 20 percent to existing supply.The prospect of construction for any proposed newSouth Florida development(s) in the new term areremote.
TRENDS & ECONOMIC CONDITIONSMany of the South Florida submarkets are reportingpositive absorption for the first time in nearly threeyears. Miami-Dade County leads the way with a 66percent increase over 2009. The vacancy rate for theSouth Florida Market decreased below 15 percent,with positive absorption of nearly 1.4 million squarefeet and a vacancy rate of 14.7 percent. Increasedleasing activity should begin to stabilize rates and re-duce concessions going into 2011. Confirming astrengthening market was the recent sale of the468,000 square feet 350-450 Las Olas Centre inDowntown Fort Lauderdale to USAA for $362/sf. ■
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STILES REALTY WWW.STILES.COM
18Adddress Size ((sf)) Submarket
1501 Biscayne Blvd 276,213 BiscayneTown Center Rd 200,000 Boca Raton1500 Concord Terrace 143,000 Sunrise2501 Military Trail 124,000 Boca Raton110 SE 6th St 112,000 Fort Lauderdale (CBD)
Largest Blocks Of Class A Space
Address Size (sf) Delivery Date
600 Brickell 605,886 TBD396 Alhambra 273,000 TBD
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 41,437,337 114,908 16.9% 1.1% 18.0%Suburban 185,957,297 1,265,012 13.5% 0.5% 14.0%Total 227,394,634 1,379,920 14.1% 0.6% 14.7%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
ADT Security (TYCO) Boca Raton 1501 Yamato Rd 171,490Wells Fargo Miami (CBD) 333 Avenue of the Americas 91,000Franklin Templeton Fort Lauderdale (CBD) 300 SE 2nd St 87,000Broadspire Services Sunrise 1391 NW 136th Avenue 64,241JP Morgan Chase Brickell 1450 Brickell Ave 47,000
Largest Tenant Transactions In 2010
MILWAUKEE, WIMARKET OVERVIEWVacancy rates rose and absorption numbers for theoverall Milwaukee market were down towards the endof 2010. The vacancy rate inched higher in thedowntown submarket to just over 16 percent,absorption was a negative 72,099 square feet for thethird quarter. The suburban submarkets were a mixedbag, with large vacancies opening in the Brookfieldand Northshore submarkets paired with gains in theMayfair and West Allis markets.
TRENDS & ECONOMIC CONDITIONSUnemployment figures showed some signs ofrecovery, with the unemployment rate hovering around8.5 percent (down from 9.3 percent a year ago). Theoffice sector remained relatively flat, adding less than1,000 jobs from this time last year. We expectvacancies to continue to rise as office users continueto downsize their space as leases roll over. ■
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RFP COMMERCIAL, INC. WWW.RFPCOMMERCIAL.COM
19Adddress Size ((sf)) Submarket
10850 W Park Place 137,995 Northwest7800 N 113th St 80,000 Northwest
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
None
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 6,944,685 (86,644) 16.4% 4.0% 20.4%Suburban 14,932,743 (35,250) 19.4% 2.0% 21.4%TTotal 21,877,428 (121,894) 18.5% 2.6% 21.1%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Aurora Healthcare Downtown 750 W Virginia 70,000Johnson Controls Northshore 5055 N Lydell Dr 50,000U.S. Bank Brookfield 400 N Executive Dr 20,796
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
NEW YORK, NYMARKET OVERVIEWThe New York City office marketplace is comprised ofthree different markets in Manhattan: Midtown,Midtown South and Downtown. Together they aremade up of over 450 million square feet of which over230 million square feet is considered Class A. NewYork City is host to a diverse group on industries andis home many “Fortune 500” companies.
TRENDS & ECONOMIC CONDITIONS2010 has been an interesting year to date – two stepsforward, one step back. Overall, we have experiencedsome stabilizing factors including positive movementin employment figures and corporate earnings. Inaddition, the perception that we have already reachedthe bottom of the market has provided an impetus fortenants with leases expiring over the next few years tomake early commitments. Accordingly, Manhattan hasexperienced positive absorption and a firming of rentalrates, concessions, etc. ■
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GEORGE COMFORT & SONS, INC. WWW.GCOMFORT.COM
20Adddress Size ((sf)) Submarket
85 Broad St 1,074,383 Downtown11 Times Square 705,000 Midtown1 New York Plaza 640,680 Downtown825 Eighth Ave 500,000 Midtown120 Park Ave 464,350 Midtown
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
One World Trade Center 2,923,786 3rd Quarter 2013150 Greenwich St 2,307,000 1st Quarter 2013175 Greenwich St 2,400,000 3rd Quarter 2015
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
Midtown 212,000,000 1,964,000 10.1% 3.3% 13.4%Midtown South 140,000,000 2,060,000 10.1% 2.3% 12.4%Downtown 98,000,000 (1,395,000) 12.7% 2.5% 15.2%Suburban 236,000,000 (2,500,000) 14.9% 2.2% 17.1%Total 686,000,000 129,000 12.1% 2.6% 14.7%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Proskauer Rose LLP Midtown 11 Times Square 406,399Jones Apparel Group, Inc. Midtown 1411 Broadway 385,153Willkie Farr & Gallagher Midtown 787 Seventh Ave 352,418McKinsey & Company Midtown Park Avenue Plaza 295,452CBS Broadcasting Midtown 555 West 57th St 281,896
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
NORTHERN/CENTRAL NJMARKET OVERVIEWThe Northern New Jersey Class A office market beganto see some increased leasing activity in 2010, butstill ended the year with 372,000 square feet ofnegative net absorption. The overall vacancy rateremains above 20 percent, but the average grossasking price rose slightly to $25.78 per square footgross. There is very little activity in the way of newconstruction.
TRENDS & ECONOMIC CONDITIONSLeasing velocity has begun to increase as tenants takeadvantage of the unique pricing opportunities in themarket. Almost 65 percent of the leasing activityoccurred in Class A space, creating some optimismfor 2011. The lower-rent market deals are still heavyon free rent, increased tenant improvementallowances and base building improvements bylandlords. Landlords are valuing their tenant basesmore than ever, leading to a trend of writing earlyrenewal deals. ■
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WEICHERT COMMERCIAL BROKERAGE WWW.WEICHERTCOMMERCIAL.COM
21Adddress Size ((sf)) Submarket
800 Scudders Mill Rd 770,000 Princeton300/400 Corporate Dr 620,000 Somerset1 Continental Dr 491,000 Princeton184 Liberty Corner Rd 365,000 Route 78307 Middletown Rd 352,000 Monmouth
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
111 Wood Ave South 550,000 1st Quarter 201115 Deer Park Dr 60,000 1st Quarter 20112700 Route 10 58,000 3rd Quarter 2011
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
Northern NJ 69,358,368 (372,998) 24.0% 2.6% 26.6%
TTotal 69,358,368 (372,998) 24.0% 2.6% 26.6%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
BASF Morristown Build to Suit 325,000National Union Fire Insurance Jersey City Waterfront 101 Hudson St 232,465Medco Health Solutuons Bergen North 225 Summit Ave 142,500
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
OKLAHOMA CITY, OKMARKET OVERVIEWOklahoma City's office market showed signs ofimprovement in 2010 with its first net positiveabsorption in two years. Average asking rent ratesremain stable and very few large blocks of space areavailable.
TRENDS & ECONOMIC CONDITIONSThe economic outlook in Oklahoma City continues tobe remarkably upbeat and stronger than most of therest of the country. The city continues to enjoy broadpublic support for investments in urban infrastructure,venues and schools as reflected in the voters' recentapproval of the MAPs III projects downtown. Duringthe next decade more than $2 billion of civic andcorporate investments are committed to the downtownarea, a strong indication that its remarkable 20-yearrenaissance will continue. ■
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WIGGIN PROPERTIES, LLC WWW.WIGGINPROP.COM
22Adddress Size ((sf)) Submarket
4727 Gaillardia 37,627 MemorialCaliber Center 27,044 NorthwestLeadership Square 24,464 DowntownOklahoma Tower 18,500 Downtown
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Devon Tower 1,900,000 2013
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 5,553,616 (22,857) 26.5% 0.2% 26.7%Suburban 9,038,278 56,290 15.2% 0.3% 15.4%TTotal 14,591,894 33,433 19.5% 0.3% 19.7%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
State of Oklahoma West/Central 2401 NW 23rd St 80,000JP Morgan Chase CBD 100 N Broadway Ave 36,079Canaan Resources LLC CBD Leadership Square 24,652
Largest Tenant Transactions In 2010
Please note: Numbers in parentheses are negative.
PHILADELPHIA, PAMARKET OVERVIEWThe Philadelphia Central Business District hasexperienced a slight increase in leasing activity duringthe 3rd quarter 2010. Tenants seem to be morecomfortable in making real estate decisions,promoting positive absorption in the 3rd quarter, com-pared with negative absorptions in the 1st and 2ndquarters of 2010.
TRENDS & ECONOMIC CONDITIONSWhile the number of completed lease transactionsincreased in the 3rd quarter, so did the dollar amountof landlord concessions, allowing tenants to leaseClass “A” space at Class “B” rental rates. Vacancyrates should continue to stabilize throughout the endof the year and slow growth should follow in 2011 asemployment levels begin to return to normal.Additionally, there are almost no construction projectsin the pipeline, reducing the influence of additionalsupply on market conditions. ■
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BEACON COMMERCIAL REAL ESTATE WWW.BEACONCRE.COM
23Adddress Size ((sf)) Submarket
500 Arcola, Collegeville, PA 481,451 West Montgomery Cty1170 8th Ave, Bethlehem, PA 449,998 Lehigh/Northampton11601 Roosevelt Blvd 430,000 Northeast Philadelphia1717 Arch St 339,767 CBD2900 S 29th St 283,520 South Philadelphia
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Uptown Worthington, Malvern, PA 283,920 2012Seven Tower Bridge, Conshohocken, PA 250,000 2013
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 60,923,557 80,758 9.8% 0.9% 10.7%Suburban 116,849,816 354,095 14.2% 0.8% 15.0%Total 177,773,373 434,853 12.6% 0.9% 13.5%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Quest Diagnostics Suburban 1001 Adams Ave, Norristown, PA 136,919ING USA Annuity & Life Insurance Suburban 1475 Dunwoody Dr, West Chester, PA 126,444IMS Health Inc Suburban Highview II - 200 Campus Dr, Collegeville, PA 104,796
Largest Tenant Transactions In 2010
PORTLAND, OR
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MELVIN MARK BROKERAGE COMPANY WWW.MELVINMARKCOMPANIES.COM
24
MARKET OVERVIEWThe Portland office market ended the 3rd quarter withpositive net absorption of over 150,000 square feet,bringing vacancy to less than 12 percent. Availablesublease space has decreased as well. The Class Amarket had positive net absorption of over 260,000square feet. The Class B and C markets combined fora negative absorption of approximately 110,000square feet. Class A CBD properties ended the quarterat 90 percent occupancy. Quoted rental rates werestable at $24.46. Although occupancy levels haveincreased, continued slow demand and concessionsare commonplace.
TRENDS & ECONOMIC CONDITIONSThe tenant market is expected to continue through2011. However, as demand increases and largerblocks of office space continue to dwindle, the CBDmarket may well turn more favorable for landlords inlate 2011 and 2012. Office tenants with requirementsexceeding 20,000 square feet may find fewalternatives in the next couple of years and shouldbegin to evaluate their future requirements now. ■
Address Size (sf) Submarket
KOIN Center- 220 SW Columbia 45,401 CBD400 SW 6th 35,676 CBD
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
SW Park & 9th Ave 360,000 1st Quarter 2013Other Developments Pending 300,000 4th Quarter 20131201 NW Naito Pkwy 260,000 1st Quarter 2013
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 25,276,433 206,148 9.7% 0.5% 10.3%Suburban 65,706,060 22,980 11.5% 0.1% 12.2%Total 90,982,493 229,128 11.0% 0.2% 11.7%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
General Service Administration CBD First & Main Bldg 263,364Nike, Inc. North Beaverton Tektronix Howard Vollum- Bldg 55 & 58 191,573Vestas American Wind Technology, Inc. CBD Meier & Frank Building 133,258Oregon Institute of Technology Wilsonville 27500 SW Parkway Avenue 131,848Portland Energy Conservation, Inc. CBD First & Main Bldg 73,489
Largest Tenant Transactions In 2010
RICHMOND, VAMARKET OVERVIEWThe downtown central business district in Richmondexperienced continued year-to-date absorption of theregion’s only delivered space of 262,453 square feet.In the Innsbrook submarket, 257,274 square feetwere absorbed, adding to the 3rd quarter 2010 netabsorption of 345,491 square feet – a statistic notseen in the capital city since 2007. However, amajority of large lease signings were renewals andoccurred in the first half of the year.
TRENDS & ECONOMIC CONDITIONSThe northwest quadrant of suburban Richmond tooksome hard hits this year with the closing ofheadquarters for Circuit City, LandAmerica and CapOne and Mead Westvaco recently relocatingdowntown. Large amounts of vacant office space areavailable and consequently, new developments arenon-existent for the Class A pipeline. Only smaller,owner-occupied Class B buildings are expected to bedelivered in the coming quarters. ■
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25
DIVARIS REAL ESTATE, INC. WWW.DIVARIS.COM
Adddress Size ((sf)) Submarket
9954 Maryland Dr 383,523 NWQ (Suburban)9950 Maryland Dr 282,567 NWQ (Suburban)11013 West Broad St 205,000 NWQ (Suburban)10800 Nuckols Rd 135,375 NWQ (Suburban)5600 Cox Rd 127,500 NWQ (Suburban)
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Williams Mullen Center, Downtown 210,000 2nd Quarter 2010OrthoVirginia Building, Southwest 70,000 3rd Quarter 2010Dominion Medical Park, Bldg 3, East 16,500 2nd Quarter 2010Bell Creek Square, Building 7, East 15,000 3rd Quarter 2010Millworks V, Southwest 14,540 1st Quarter 2011
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 18,294,725 150,807 10.6% 0.8% 11.3%Suburban 40,594,355 94,232 11.7% 0.5% 12.2%Total 58,889,080 245,039 11.4% 0.6% 11.9%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Williams Mullen CBD Williams Mullen Office Tower, 200 South Tenth Street 140,000Dominion Due Diligence Group Innsbrook Innsbrook Commons 29,314The Martin Agency CBD Two James Center, Three James Center 34,933Nationwide Insurance Midlothian Corridor Boulders IV 43,107Ironworks Consulting Innsbrook Highwoods I 34,962
Largest Tenant Transactions In 2010
SAN ANTONIO, TXMARKET OVERVIEWSan Antonio finished 2009 with positive absorptionmarking the sixth consecutive year of office growth.As of the third quarter, 2010 will boast absorption near500,000 square feet. Significant lease deals areexpected to close before year-end fueling predictionsthat the office market will end the year with 700,000square feet or greater in positive absorption. Availablesublease space is just over 600,000 square feet withmore than half of that in the CBD with the majoritystemming from the AT&T corporate relocation in 2008.
TRENDS & ECONOMIC CONDITIONSThe city is offering incentives to draw businesses toDowntown. With a citywide occupancy rate at 85percent and suburban, big-block space diminishing,Downtown is expected to see more activity in the shortterm with suburban development predicted to resumemid to late 2011. Since October 2009, the MSA hasgained 5,700 jobs. San Antonio’s business friendlyenvironment and logistic advantages are favorable tobusinesses looking to reduce operating costs orexecute efficient expansion. ■
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CAMBRIDGE REALTY GROUP WWW.CAMBRIDGEREALTY.NET
26Adddress Size ((sf)) Submarket
IBC Centre - 175 E Houston St 271,679 CBDEilan III - 17806 IH-10 205,520 Far Northwest7990 W IH-10 86,547 Northwest10100 Reunion Pl 85,112 North Central401 E Sonterra Blvd 73,571 Far North Central
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
17802-17806 IH-10 189,792 December 201018707 Hardy Oak Blvd 116,000 January 201011503-12400 NW Military Hwy 95,000 September 20101027 Austin Hwy 25,229 September 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 4,756,207 41,082 15.7% 7.4% 23.1%Suburban 20,911,172 457,719 15.2% 1.3% 16.5%Total 25,667,379 498,801 15.5% 2.4% 17.1%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
PETCO Support Center West Westpoine Business Park, 654 Richland Hills Dr. 114,180Kohl's West Westover Office Center I, 10000 Rogers Run 102,000Becton Dickinson Northwest 5859 Farinon 49,504Nationwide Mutual Insurance Co. Northwest 5859 Farinon 40,000XL Health Northwest 4350 Lockhill Selma 39,057
Largest Tenant Transactions In 2010
SAN FRANCISCO BAY AREA, CAMARKET OVERVIEWThe San Francisco office market began its long-expected turnaround in vacancies and absorption mid-2010. With a minor positive net absorption in the 3rdquarter of 50,000 feet, the year is ending with anoverall office vacancy rate of 13.5 percent anddeclining. Rental rates have shown a marginalincrease after several years of decline, about 2percent from mid-year. Watch for surprising rental rateincreases in 2011.
TRENDS & ECONOMIC CONDITIONSThe Bay Area continues to be the global leader ininnovation and concentrated productive venturecapital. Recovery is underway, especially in Sunnyvale,Cupertino, Mountain View, Palo Alto and San Fran-cisco's own Social Network/Gaming/Apps South ofMarket. Any buildings close to the CalTrain Station thatconnects these markets are in extreme demand.Some blocks are near zero vacancy due to the Zynga,Twitter, Google, Facebook and Salesforce effect. Rentsin this neighborhood have more than doubled in 2010and are among the highest in the U.S. ■
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RITCHIE COMMERCIAL, INC WWW.RITCHIECOMMERCIAL.COM
Please note: Numbers in parentheses are negative.
27Adddress Size ((sf)) Submarket
1355 Market Street 715,000 SF Civic Center333 Bush Street 301,358 SF North Financial 500 Terry Francois 269,964 SF Mission Bay555 Mission Street 255,340 SF South Financial123 Mission Street 235,455 SF South Financial
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Brocade Tower 1-3 (North SJ) 563,349 2010SFPUC Headquarters (SF DT W) 257,097 2nd Quarter 2012455 Mission (SF Southeast) 210,000 4th Quarter 20101 Kearny St (SF ST West) 112,410 1st Quarter 2010
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
San Francisco 160,338,040 870,959 12.0% 1.1% 13.1%East Bay/Oakland 112,893,475 (655,528) 12.3% 0.5% 12.8%South Bay/San Jose 107,934,385 1,710,739 13.0% 1.0% 14.0%TTotal 381,165,900 1,926,170 12.3% 0.9% 13.3%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Salesforce.com, Inc. SF South Financial District One Market St 260,519 Zynga, Inc. SF Showplace Square 650 Townsend St 230,275 Morrison & Foerster LLP SF South Financial District 425 Market St 220,000 Deloitte SF South Financial District 555 Mission St 166,435 Theravance, Inc. SF South SF East of 101 Fwy 901 Gateway Blvd 130,342
Largest Tenant Transactions In 2010
ST. LOUIS, MOMARKET OVERVIEWOverall vacancy rates in the St. Louis market haveslightly increased to 13.8 percent up 1.1 percent fromone year ago. Overall net absorption was positive dueto the addition of Centene Plaza, despite the continueddecline in leasing activity. The St. Louis City marketsuffered a significant loss with tenants such asArmstrong Teasdale relocating, leaving is 123,000square foot headquarters vacant, while Claytonexperienced positive absorption and continues toremain at the highest asking rates in the St. Louisregion.
TRENDS & ECONOMIC CONDITIONSAverage asking rates reduced over the past 12months, allowing current and prospective tenants tolock in at some great rates. Landlords continue tocompete to attract and maintain tenants by offeringmore concessions, as well as owners continue toadjust to the market and ensure their cashflow whilethey ride out the remainder of the poor economy. ■
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COZAD COMMERCIAL REAL ESTATE, LTD WWW.COZADGROUP.COM
28Adddress Size ((sf)) Submarket
13736 Riverport Dr 138,584 West700 Market St. 128,250 CBD211 N Broadway 116,937 CBD100 . Broadway 108,893 CBD6710 Clayton Rd 51,586 CBD
Largest Blocks Of Class A Space
Adddress Size ((sf)) Delivery Date
Centene Building 485,000 3rd Quarter 2010Sunnen Business Park 180,000 Proposed
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 11,467,000 29,000 21.6% 0.7% 22.3%Suburban 39,652,000 189,000 10.4% 0.9% 11.3%Total 51,119,000 218,000 12.9% 0.9% 13.8%
Vacancy Rates
Tenant Submarket Adddress Size ((sf))
Essence Healthcare North 13900 Riverport 104,700Panera Central Laumeier Office Park 90,000Stinson Morrison Hecker Central 7700 Forsyth Blvd 46,500St. Louis Arc West 1177 North Warson Rd 25,000IKON West 16253 Swingley Ridge 25,000
Largest Tenant Transactions In 2010
WASHINGTON, D.C.MARKET OVERVIEWDirect vacancy rates have dropped as marketconditions in Metro D.C. and close-in subwayaccessible suburbs underwent a shift back tolandlords. Subway accessible Class A (especiallyLEED certified) projects have experienced increaseddemand with smaller landlord concession packages,however, rents have not seen much upwardmovement. Class B and C properties in outersuburban markets have fared much worse. Job gainsand the lack of new construction have stabilized rentsin Metro D.C. and close-in suburban markets andslowed the decline in rents in outer suburban markets.
TRENDS & ECONOMIC CONDITIONSThe flow of government spending has increased theFederal Government’s local footprint and helped boostconfidence in the private sector. All three majorjurisdictions have recorded occupancy gains and thistrend is expected to continue throughout 2011.Concession packages will gradually shrink and rentsshould see a slight uptick as existing space is leasedand the new construction pipeline remains empty. ■
COMPILED BY MB REAL ESTATE WWW.MBRES.COM (312) 726 -1700
AMR COMMERCIAL, LLC WWW.AMRCOMMERCIAL.COM
29Address Size (sf) Submarket
5001 Eisenhower Ave 605,998 Alexandria, VA400 7th St, SW 400,000 Southwest DC1101 1st St, NE 317,415 NoMa90 K St, NE 301,385 NoMa1201 Maryland Ave, SW 295,118 Southwest DC
Largest Blocks Of Class A Space
Address Size (sf) Delivery Date
1015 Half St, SE 414,000 1st Quarter 20111000 Connecticut Ave, NW 394,145 3rd Quarter 2012800 17th St, NW 365,000 4th Quarter 2010425 Eye Street, NW 363,000 4th Quarter 2010800 N Glebe Road, Ballston 300,575 3rd Quarter 2011
Major New Developments
Location Size of Market (sf) YTD Absorption (sf)Direct Vacancy
%Sublease Vacancy
%Total Vacancy
%
City 113,431,748 1,927,707 12.5% 1.3% 13.8%Suburban 213,100,524 2,297,606 14.2% 1.6% 15.8%Total 326,532,272 4,225,313 13.6% 1.5% 15.2%
Vacancy Rates
Tenant Submarket Address Size (sf)
Securities Exchange Commission Southwest, D.C. 400 7th St, SW 900,000National Cancer Institute Gaithersburg, MD Johns Hopkins Shady Grove Campus 575,000Defense Inteligence Agency Reston, VA 12300 Sunrise Valley Dr 532,482Crowell and Moring Northwest, D.C. 1001 Pennsylvania Ave, NW 380,000VeriSign Inc. Reston, VA 12061 Bluemont Way 221,326
Largest Tenant Transactions In 2010
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INDUSTRIAL SERVICES
The following CORE member firms service industrial clients in their respective markets:
Ackerman & Company Atlanta, GA
Aronov Commercial Montgomery, AL
Arthur J. Rogers Chicago, IL
Cambridge Realty Group San Antonio, TX
Cameron Butcher Denver & Colorado Springs, CO
Cozad Commercial St. Louis, MO
Divaris Real Estate Hampton Roads, VA
LaSala-Sonnenberg Kansas City, KS
Ramsey-Shilling Los Angeles, CA
RFP Commercial Milwaukee, WI
Stiles Realty Fort Lauderdale, FL
Swearingen Realty Group Dallas, TX
Weichart Commercial New Jersey
Wiggin Properties Oklahoma City, OK
Please visit www.corenetworkcre.org for contact information.
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BOARD OF DIRECTORSChristopher V. BonbrightChief Executive OfficerRamsey Shilling Commercial Real Estate6711 Forest Lawn DriveLos Angeles, California 90068p: 323 851 [email protected]
Andrew J. DavidsonExecutive Vice President/Managing Director MB Real Estate181 West Madison Street, Suite 4700Chicago, Illinois 60602p: 312 558 [email protected]
Bruce M. HechtExecutive Vice President, Managing PrincipalSwearingen Realty Group, LLC5950 Berkshire Lane, Suite 700Dallas, Texas 75225p: 214 365 [email protected]
M. James MarkChief Executive OfficerMelvin Mark Companies111 Southwest Columbia, Suite 1380Portland, Oregon 97201p: 503 223 [email protected]
William K. MontrosePrincipalAMR Commercial, LLC7900 Wisconsin Avenue, Suite 202Bethesda, Maryland 20814p: 301 961 [email protected]
Jeanne Rogers, CCIM. SIORExecutive Vice President/PrincipalArthur J. Rogers & Co.3170 Des Plaines AvenueDes Plaines, Illinois 60018p: 847 297 [email protected]
Michael CozadExecutive Vice PresidentCozad Commercial Real Estate, Ltd.16 Sunnen Drive, Suite 164St. Louis, Missouri 63143p: 314 781 [email protected]
Michael B. DivarisPresidentDivaris Real Estate, Inc.One Columbus Center, Suite 700Virginia Beach, Virginia 23462p: 757 497 [email protected]
Rachel Gilbert KrupnickExecutive DirectorCORE NetworkOne Columbus Center, Suite 600Virginia Beach, VA 23462p: 757 490 [email protected]
F. Keene MillerPresident, BrokerageAckerman & Co.10 Glenlake Parkway, South Tower, Suite 1000Atlanta, Georgia 30328p: 770 913 [email protected]
Mark RitchiePresidentRitchie Commercial Real Estate351 California Street, Suite 150San Francisco, California 94104p: 415 981 [email protected]