Welcometo the:

February 7, 2013

Jack R. NorrisManaging Director | CBRE Pittsburgh

Jeffrey B. AckermanIncoming Managing Director | CBRE Pittsburgh

Asieh Mansour, Ph. D.Head of Americas Research | CBRE

Speakers

Moderator

Pittsburgh Market Overview

National Perspective

PittsburghMarket Overview

Presented by:Jeffrey Ackerman

201222@01220Review of the Pittsburgh Market 2012

Overall 2012 was a year of modest growth despite the volatile macro global economy

Technology, financial services, healthcare & energy drove the growth the past year

Leasing activity was strong across most sectors despite a lack of extremely large transactions

Occupancy and rental rates rose in most sectors

There was modest job growth in 2012 and we are expected to continue to see annual job growth of 2.2 % from 2013 to 2016

Source:moodys.com

New Office Buildings Under Construction / Planned

Cranberry Crossroads

Schenley Plaza

PNC Tower

Southpointe II

Offices at the Gardens

Bakery Square II

Pittsburgh Overall Office Market

All ClassesTotal Absorption

Square Feet 9 Million SF

Source:CBRE – Econometric Advisors

Markets Driving Absorption

Gr. Downto

wn

CBD and Gr. Downtown

ParkwayWest

Parkway West

Parkway North

Parkway North

SouthpointeSouthpointe

Southpointe

Cranberry

Cranberry

Pittsburgh CBD Office Market

Class ATotal Absorption

1,683,253 SFSquare Feet

Source:Co-Star

Job Growth Pittsburgh Office Market 2007-2012

z Hotels

Office

Medical

Office

Square Feet

Pittsburgh Suburban Office Market

Class ATotal Absorption

5,041,175 SF

Source:Co-Star

Market Comparison – Overall Office

All ClassesOccupancy Rate

Source:CBRE – Econometric Advisors

Market Comparison – CBD Office

Class AOccupancy Rate

Source:CBRE – Econometric Advisors

Market Comparison – Overall Office

All ClassesTotal Absorption2007-2012

Source:CBRE – Econometric Advisors

Market Comparison – CBD Office

Class ATotal Absorption2007-2012

Source:CBRE – Econometric Advisors

Vacancy Rates in 20 Largest Markets

7.9%

9.2%

8.4%

10.5%

10.1%

11.4%

11.0%

11.9%

11.8%

12.3%

12.2%

12.9%

12.9%

14.2%

13.5%

15.9%

15.5%

18.6%

16.0%

19.2%

Sources:Co-Star Group, Inc.PPR (Property and Portfolio Research )

Retail New Development

New Development starting to occur:

McCandlessCrossing

The Foundry

Blue SpruceShoppes

Cranberry Echo Development

Former Consol HQ North Shore Place I & II

Multi-Family New Development

Southside

2600 E. Carson Street

90 Units

East Side

City of Pittsburgh

5,000 SF Retail129 Market-Rate

Apartments180 Car Parking

Cranberry Twp

Cranberry Woods

302 Multifamily Units, comprising apartments,

townhomes, & live-work units

Cranberry Twp

Rochester Road

Phase I – 120 UnitsPhase II 108 Units

Brixat 26

Highland Building/

Wallace Building

Rochester Village at Park Place

Cranberry Woods Office

ParkJohnson Development Company

Multi-Family New Development

River Vue Apartments

CBD

300 LibertyAvenue

218 Units

Strip District

24th & Railroad Street

95 Units

Phase II of the Cork Factory

CBD

425 6th

Avenue

Converting upper 14 floors to apartments

Murrysville

School Rd & Marquis Place Lane

188 Units

Regional Enterprise

Tower

Marquis Place Apartments

Our downtown urban core will continue to experience a rebirth

Redevelopment will be on the upswing with a particular focus on Class B and C properties

The workplace will be designed with higher ceilings and greater creativity, productivity and innovation

Rental rates will spike for well located and designed real estate in most sectors

Strong investor demand for Class A assets in our CBD and strong suburban markets

What to Expect in 2013

Asieh Mansour, Ph. D.Head of AmericasResearch

The Global Economy and Real Estate Markets

Thank You!

PittsburghThe Future is Now

Sources:Bureau of Labor and StatisticsCBRE – EACo-Star Group, Inc.PPR (Property and Portfolio Research )Real Capital Analytics