Texas Office, Q New supply and demand set a high bar for the Lone Star in PDF Free Download

MARKETVIEW Texas Office, Q4 215 New supply and demand set a high bar for the Lone Star in 215 Vacancy Rate 16.8% Net Absorption 3,162,51 SF Under Construction 16,92,242 SF Completions 5,765,638 SF Texas office aggregates the Austin, Dallas/Ft. Worth, Houston and San Antonio markets. Arrows indicate change from previous quarter. Deliveries Outpace Absorption Texas was busy filling space in 215, but even busier installing curtain wall, as annual net absorption for the year yielded more than 13 million sq. ft. amidst an annual delivery total of just under 2 million sq. ft. across the state s major office markets. Over half of those ribbon-cutting ceremonies took place in Houston, where the remaining pipeline is much more muted compared to 12 months ago. Announcements for corporate relocations and campus projects throughout the state should continue to drive absorption throughout 216. Office-Using Job Growth The three primary job sectors that comprise office-using employment all posted job gains for the 12 months ending December 215, for an annual growth rate of 2.%, or 5,7 jobs added. Professional and Business Services, which includes industries such as legal, accounting, architecture, engineering, computer design services and advertising, is the driving force behind this expansion, adding not only the highest number of jobs (44,8) but growing at the fastest rate (2.8%). Figure 1: 215 Texas Annual Deliveries & Absorption by Market DFW Houston Austin San Antonio 2 4 6 8 1 12 Sq. Ft. (in millions) Deliveries Absorption Source: CBRE Research, Q4 215. Figure 2: Year-over-Year Jobs Added ( s), December 215 3.6 2.3 5.7 K Jobs Added 44.8 Professional and Business Services Information Financial Activities Source: Bureau of Labor Statistics, Seasonally Adjusted, February 216. Flight of the Texas Crane Construction underway tapered down throughout 215 and ended the year with just under 17 million sq. ft. in progress; the annual delivery total, however, yielded almost 2 million sq. ft. for 215 more than double the 8.9 million sq. ft. introduced to the Texas markets in 214. Houston and Dallas account for 44% and 4% of the 16.9 million sq. ft. underway across the major metros although the pipeline for both of those markets has contracted over the last 12 months, particularly in Houston. Preleasing in primary markets hovered slightly above 5%, while ranging between 18%-25% in non-primary markets. Q4 215 CBRE Research 216 CBRE, Inc. 1

MARKETVIEW TEXAS OFFICE For the 68 th consecutive month, Texas recorded positive annualized growth for total nonfarm employment, yielding 1.4% year-over-year, or about 166,9 new jobs, for the year ending December 215. Leisure and Hospitality was the fastest-growing employment sector statewide for this year-over-year period, expanding by 4.6%, or 55,3 jobs in the last 12 months, whereas Education and Healthcare was the numeric leader in job growth, at 68,3 jobs added. Nationally, nonfarm employment grew by 1.9%, or about 2.7 million new jobs, for the same time period. At a market level, the four major office hubs in Texas all reported positive growth for the 12 months ending December215. Austin experienced the most significant gains, at 3.8%, followed by San Antonio at 3.5%, Dallas/Fort Worth at 2.9% and Houston at.8%. Office employment, as shown in Figure 3, exceeded the overall nonfarm growth rate for the state and was positive for all major office metro areas with the exception of Houston, which contracted by half a percentage point year-over-year. In line with the nonfarm gains mentioned above, Austin led the other metros in year-overyear office growth, at 6.7%, due to accelerated activity in the Professional and Business Services sector, which had the highest growth of any other office industry across all Texas markets. Figure 3: Office Employment Breakdown, December 215 ( s) Industry Austin- Round Rock Dallas-Fort Worth- Arlington Houston-The Woodlands-Sugar Land San Antonio- New Braunfels Texas Information 26.3 82. 34. 22.4 27.8 Y-o-Y Growth (%) 1.9.6 4.3 2.3 1.8 Financial Activities 54.3 279.8 144.1 87.4 715.5 Y-o-Y Growth (%) 3.2 2.8 (3.5) 5.2.3 Professional and Business Services 165.4 578.9 47.8 131.1 1,62.9 Y-o-Y Growth (%) 8.7 4.5.1 6.2 2.8 Total Office 246. 94.7 648.9 24.9 2,544.2 Y-o-Y Growth (%) 6.7 3.6 (.5) 5.5 2. Source: Bureau of Labor Statistics, Seasonally Adjusted, February 216. Figure 4: Metropolitan Office Employment Primary Market Employment ( s) 1, 8 6 4 2 Non-Primary Market Employment ( s) 3 25 2 15 1 5 Dallas- Fort Worth- Arlington Houston- The Woodlands- Sugar Land Austin- Round Rock San Antonio- New Braunfels Information Financial Activities Professional and Business Services Source: Bureau of Labor Statistics, Seasonally Adjusted, February 216. Q4 215 CBRE Research 216 CBRE, Inc. 2

MARKETVIEW TEXAS OFFICE ABSORPTION AND VACANCY AUSTIN: The Capital City of Texas posted a robust 557,94 sq. ft. of absorption in Q4 215, yielding a record 2.7 million sq. ft. for the year. About 75% of the quarterly demand was concentrated within the Northwest and Southwest submarkets. Vacancy remains tight across the metro and finished the quarter in the single digits, at 8.2%. The tightest vacancy of the market is confined within the CBD where vacancy is 6.5% with virtually no available big blocks of contiguous space. DALLAS/FT. WORTH: For the 22 nd consecutive quarter, the Metroplex posted positive net absorption. Following a six-year high for single quarterly absorption in Q3 215, DFW closed out 215 with 65,714 sq. ft. for the quarter and a record-breaking 5.2 million sq. ft. for the year. Vacancy remained flat over the quarter at 17.7%, a prerecessionary level for North Texas and a 7 basis point decline from year-end 214. HOUSTON: Houston maintained its positive absorption streak of 2 quarters with 1.2 million sq. ft. of net absorption posted in Q4 215, resulting in 4.8 million sq. ft. for the year. Similar to last quarter, the vast majority of the Q4 215 absorption was driven by two oil and gas firms occupying nearly one million sq. ft. of space within single-tenant completions. Outside of single-tenant deliveries and build-to-suits, Houston s competitive leasing market contracted by roughly one million sq. ft. this year. SAN ANTONIO: While annual absorption reached its highest post-recession level in Q4 215, it was just 51,175 sq. ft. shy of breaking its all-time record set back in 27. In total, 927,391 sq. ft. of absorption was posted in 215, with vacancy flat year-overyear due to speculative space in new deliveries that was incorporated into existing inventory throughout the year. Figure 5: Net Absorption Primary Market Absorption (MSF) 6 5 4 3 2 1 DFW Houston 214 215 Non-Primary Market Absorption ( s SF) 2,5 2, 1,5 1, 5 Austin San Antonio 214 215 Source: CBRE Research, Q4 215. Figure 6: Vacancy Rates Vacancy (%) 26 24 22 2 18 16 14 12 1 27 28 29 21 211 212 213 214 215 Austin DFW Houston San Antonio Source: CBRE Research, Q4 215. Q4 215 CBRE Research 216 CBRE, Inc. 3

MARKETVIEW TEXAS OFFICE Figure 7: Overall Office Asking Rate, Gross, Annual $/SF 3. 25. 2. 15. 1. 27 28 29 21 211 212 213 214 215 Austin DFW Houston San Antonio Source: CBRE Research, Q4 215. AUSTIN: The metro-wide average asking rental rate in Austin reached an all-time high over the quarter, increasing by $.28 to close out the year at $31.81 per sq. ft. Austin still retains the highest office rental rate average in Texas and has risen by about 28% since Q3 211. In line with its tight vacancy, the CBD is the scene for prime rental rates, with an average asking rate topping $4. per sq. ft. With some of these downtown Class A properties leasing at a triple net rate, the Austin CBD is now seeing cases of $6. per sq. ft. full service rents once operating expenses are taken into account. DALLAS/FT. WORTH: Strong rent growth preceded the DFW office leasing market as it entered into 216. The overall lease rate increased from $21.22 per sq. ft. to $21.9 per sq. ft. during Q4 215 and is up 5.9% year-over-year. Class A quoted rents followed a similar trajectory, rising from $26.44to $26.5 per sq. ft., yet are down marginally by.4% for the year. Uptown and Preston Center, the metro s two most expensive office submarkets, are now commanding $38.8 per sq. ft. and $36.86 per sq. ft. in Class A rents, respectively. Additionally, many newer office projects are quoting triple net rates, which can easily factor in an additional $15 per sq. ft. HOUSTON: Despite escalating rent concessions, the overall gross asking rate average for the Bayou City continued to rise over the quarter, increasing by $.93 per sq. ft. to $28.67 per sq. ft., representing a significant growth of 11.2% year-over-year. Class A rents increased to $37.73 per sq. ft. over the quarter, while Class B dropped to $23.98 per sq. ft. The geographic pockets that experienced the most considerable rental rate hikes include office buildings within the Far West, Greenway Plaza and Katy Freeway, where the average asking rate rose by no less than 2% on a year-over-year basis. SAN ANTONIO: Rental rate growth in San Antonio was a prominent trend in 215. The market average asking rate closed out the year at $21.2 per sq. ft., surpassing its previous record high from the prior quarter despite the slight drop in the Class A average. Yearover-year, the market-wide average is up by 4.2%. Rates within the CBD drove the overall increase in rents once again as the downtown quoted average rose by $.55 per sq. ft. over the quarter, finishing the year at $2.86 per sq. ft. Class B and C ended the year with averages of $2.5 per sq. ft. and $17.3 per sq. ft., respectively. Q4 215 CBRE Research 216 CBRE, Inc. 4

MARKETVIEW TEXAS OFFICE CONSTRUCTION. AUSTIN: New office demand was a prominent theme in Austin in 215. The 657,37 sq. ft. of new deliveries for the quarter pushed the total near 2.75 million sq. ft. for the year, the highest annual completion volume the market has seen since 28. A little less than two million sq. ft. remained in the pipeline at the close of Q4 215, with nearly half of that confined within the CBD. As of yearend, the pre-leased rate for projects under construction was about 25%. DALLAS/FT. WORTH: The five projects that delivered in Q4 215 totaled 1.3 million sq. ft. with about three-fourths of that space already preleased. For the year, DFW has added 5.2 million sq. ft. to its inventory which mirrors the amount of absorption posted in 215. The elevated amount of new construction does not appear to be decelerating any time soon as another 1.3 million sq. ft. of projects broke ground in Q4 215, bringing the total pipeline to 6.8 million sq. ft. with nearly half (46.5%) pre-committed. Far North Dallas is still the primary hotbed for development activity, with three million sq. ft. of projects underway, including Liberty Mutual s million-sq.-ft. campus in West Plano. HOUSTON: The office pipeline in Houston continued to cool over the quarter, but the market still leads the state in office square footage underway with 7.4 million sq. ft. under construction among 22 office projects. The 52.4% pre-leased rate of these developments was unwavering even after 3.7 million sq. ft. of projects rolled off the pipeline in Q4 215. Combined with the three previous quarters, there were 11.3 million sq. ft. of office deliveries for 215, the highest level of new construction the market has seen since 1983. Most of this activity was concentrated within the CBD, West Loop/Galleria and West Houston submarkets. SAN ANTONIO: 215 marked a particularly strong year for new construction in San Antonio. After seeing 129, sq. ft. come online in Q4 215, the annual total amounted to over 65, sq. ft., with another 769,458 sq. ft. of projects underway. The Landmark I development broke ground over the quarter as expected, which will add 165, sq. ft. of Class A space to the Northwest submarket. This area is one of three submarkets in San Antonio where office construction activity was taking place as of year-end 215. Figure 8: Construction Primary Market Delivered Construction (MSF) 12 1 8 6 4 2 28 29 21 211 212 213 214 215 DFW Houston Source: CBRE Research, Q4 215. Non-Primary Market Delivered Construction ( s SF) 3,5 3, 2,5 2, 1,5 1, 5 28 29 21 211 212 213 214 215 Austin San Antonio Q4 215 CBRE Research 216 CBRE, Inc. 5

MARKETVIEW TEXAS OFFICE Figure 9: Top Lease Transactions. Market Transaction Size (SF) Tenant Address/Building Name Submarket AUSTIN 93,973 Natera 1311 McCallen Pass East DALLAS/FT. WORTH 5, Weaver Field St & Cedar Springs Rd Uptown/Turtle Creek HOUSTON 524, Apache Corporation Post Oak Central West Loop/Galleria SAN ANTONIO 51,298 Time Warner Cable 113 Hwy 151 Far West Source: CBRE Research, Q4 215. Figure 1: Top Sale Transactions Market Transaction Size (SF) Buyer Address/Building Name Submarket AUSTIN 911,579 Accesso Partners 77 Parmer Far Northwest DALLAS/FT. WORTH 1,53,957 TriGate Capital Comerica Bank Tower Dallas CBD HOUSTON 55, Prime Asset Management Houston Chronicle Building CBD SAN ANTONIO 196,348 Source: CBRE Research, Q4 215. Hartman One Technology Center, LLC 7411 John Smith Northwest Figure 11: Capital Markets and Office Sales Sales Volume (Millions SF) 8 7 6 5 4 3 2 1 October 215 November 215 December 215 Primary Markets Non-Primary Markets Source: Real Capital Analytics, CBRE Research, Q4 215. Texas Sales Activity: Capital markets throughout the state closed out Q4 215 with the highest sales volume of the year; more than 17.1 million sq. ft. of transactions trading hands from October through December, an increase from 14.3 million sq. ft. last quarter. Investment activity picked up in non-primary markets over the quarter, totaling 3.5 million sq. ft. in Q4 215, more than double the square footage from last quarter and 2% of the quarterly total across all major markets. More than one-fourth of the total square footage transacted occurred within a CBD, also a higher share than last quarter. Note: Non-primary market data might occasionally account for locations outside of CBRE market boundaries such as Corpus Christi and Harlingen, TX. Q4 215 CBRE Research 216 CBRE, Inc. 6

MARKETVIEW TEXAS OFFICE CONTACTS Robert C. Kramp Director of Research & Analysis robert.kramp@cbre.com E. Michelle Miller Research Operations Manager michelle.miller@cbre.com Lauren Paris Senior Research Analyst, DFW +1 214 979 6587 lauren.paris@cbre.com Patrick Loewe Research Coordinator, Austin +1 512 499 4939 patrick.loewe@cbre.com Julia Burman Research Coordinator, DFW +1 214 979 653 julia.burman@cbre.com CBRE OFFICES Austin 1 Congress, Suite 5 Austin, TX 7871 Dallas 21 McKinney, Suite 7 Dallas, TX 7521 Houston 28 Post Oak, Suite 23 Houston, TX 7756 San Antonio 2 Concord Plaza, Suite 8 San Antonio, TX 78216 Cammie Moise Senior Research Analyst, Houston +1 713 881 947 cammie.moise@cbre.com Nicholas Ianetta Research Coordinator, San Antonio +1 21 253 619 nicholas.ianetta@cbre.com To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at www.cbre.com/researchgateway. Texas totals, including vacancy, represent aggregate data from Austin, Dallas/Fort Worth, Houston, and San Antonio markets. Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

MARKETVIEW Texas Office, Q3 215 Four new Empire State Buildings in 215 in Texas Vacancy Rate 16.5% Net Absorption 3,83,119 SF Under Construction 2,355,318 SF Completions 3,72,77 SF Texas office aggregates the Austin, Dallas/Ft. Worth, Houston and San Antonio markets. Arrows indicate change from previous quarter. Absorption Reaches New Heights In Q3 215 alone, the four major metro areas of Texas posted over 3.8 million sq. ft. in net absorption, resulting in more than 1 million sq. ft. year-to-date, which is the equivalent in size to almost four Empire State Buildings. In comparison to 12 months ago, the year-to-date total for 214 was 8.3 million sq. ft. Many of the Texas office markets have seen record levels of absorption by some measure in 215 and are monitoring related fundamentals to gauge what might be in store for the coming year. Office-Using Job Growth The three primary job sectors that comprise office-using employment have all posted job gains for the 12 months ending September 215, for an annual growth rate of 1.9%, or 46,2 jobs added. Professional and Business Services, which includes industries such as legal, accounting, architecture, engineering, computer design services and advertising, contributed to the vast majority of these job gains, taking into account many large relocations and expansions throughout the state. Figure 1: Texas Office Absorption Year-to-Date by Market 1.6 MSF 3.3 MSF 4.6 MSF Source: CBRE Research, Q3 215. Figure 2: Year-over-Year Jobs Added ( s), September 215 224.8 849 KSF 1.3 MSF 38.9 5 2.3 DFW Houston Austin San Antonio Professional and Business Services Information Financial Activities Total NonFarm Source: Bureau of Labor Statistics, Seasonally Adjusted, November 215. Construction Across the State Current construction underway has tapered down throughout 215, yet still exceeds the 2 million sq. ft. mark. Houston still makes up more than half of the quad-market total pipeline, but is down significantly from this time last year, from 17.3 million sq. ft. to 1.7 million sq. ft. Across all markets in Q3 215, new groundbreakings did not compensate for deliveries rolling off the pipeline. Collectively, new completions totaled just over three million sq. ft., a 2% drop from last quarter, but a 73% spike from Q3 214. Q3 215 CBRE Research 215 CBRE, Inc. 1

MARKETVIEW TEXAS OFFICE For the 65 th consecutive month, Texas recorded positive annualized growth for total nonfarm employment, yielding 1.9% year-over-year, or about 225, new jobs, for September 215. Nationally, nonfarm employment grew by 2.%, or 2.8 million new jobs, for the same time period. At a market level, the four major office hubs in Texas all reported positive growth for the 12 months ending September 215. San Antonio experienced the most significant gains, at 3.7%, followed by Dallas/Fort Worth at 3.2%, Austin at 3.% and Houston at 1.2%. Leisure and Hospitality was the fastest-growing employment sector statewide for this year-over-year period, expanding by 5.4%, or 65,2 jobs in the last 12 months, whereas Education and Healthcare was the numeric leader in job growth, at just under 8, jobs added. Office employment, as shown in Figure 3, exceeded the overall nonfarm growth rate for the state and was positive across the board for all major office metro areas. In line with the nonfarm gains mentioned above, San Antonio led the other metros in year-over-year office growth, at 6.1%, due to accelerated activity in the Professional and Business Services sector, which had the highest growth of any other office industry across all markets. Austin was another metro with annual office growth eclipsing 5%, followed by DFW at 3.9% and Houston at.1%. Figure 3: Office Employment Breakdown, September 215 ( s) Industry Austin- Round Rock Dallas-Fort Worth- Arlington Houston-The Woodlands-Sugar Land San Antonio- New Braunfels Texas Information 26.2 82.9 34.7 22.4 28.3 Y-o-Y Growth (%) 3.4 1. 6.4 2.8 2.5 Financial Activities 53.7 276.6 143.9 86.6 76.2 Y-o-Y Growth (%) 2.4 3.5 (3.3) 6.2.3 Professional and Business Services 16.7 565.9 471.7 129.4 1,596.1 Y-o-Y Growth (%) 6.6 4.5.7 6.7 2.5 Total Office 24.5 925. 65.3 238.4 2,51.6 Y-o-Y Growth (%) 5.3 3.9.1 6.1 1.9 Source: Bureau of Labor Statistics, Seasonally Adjusted, November 215. Figure 4: Metropolitan Office Employment Primary Market Employment ( s) 1, 8 6 4 2 Non-Primary Market Employment ( s) 3 25 2 15 1 5 Dallas- Fort Worth- Arlington Houston- The Woodlands- Sugar Land Austin- Round Rock San Antonio- New Braunfels Information Financial Activities Professional and Business Services Source: Bureau of Labor Statistics, Seasonally Adjusted, November 215. Q3 215 CBRE Research 215 CBRE, Inc. 2

MARKETVIEW TEXAS OFFICE ABSORPTION AND VACANCY AUSTIN: The Capital City of Texas posted its highest single quarter of absorption in almost three years, recording 649,339 sq. ft. for the quarter and 1.5 million sq. ft. year-todate. After two consecutive quarters of rising vacancy, Q3 215 witnessed total vacancy compression of 1 basis points, closing the quarter at 1.9% and falling below 11% for the second time in CBRE market history. DALLAS/FT. WORTH: For the 21 st consecutive quarter, the Metroplex posted positive net absorption. Q3 215 marked the largest yield of net absorption for a single quarter in DFW in over six years, breaking last quarter s record. Year-to-date, the 4.6 million sq. ft. of market-wide absorption has already surpassed the entire annual total for 214. Additionally, vacancy for the quarter compressed even further to 17.7% the first time the market has seen sub-18% vacancy since 28. HOUSTON: Houston absorption totaled 1.5 million sq. ft. in Q3 215, slightly higher than the previous quarter, bringing the yearto-date yield to 3.6 million sq. ft. The bulk of current quarter absorption stems from several large oil and gas occupancies in build-to-suits and single tenant deliveries. In turn, vacancy dipped by 2 basis points to close Q3 215 at 13.2%, the first decrease of 215 as sublease space has expanded considerably throughout the year. Figure 5: Net Absorption Primary Market Absorption (MSF) 5 4 3 2 1 DFW Figure 6: Vacancy Rates Houston 214 YTD Q3 215 Non-Primary Market Absorption ( s SF) 1,8 1,6 1,4 1,2 1, 8 6 4 2 Vacancy (%) 26 24 22 Austin Source: CBRE Research, Q3 215. San Antonio 214 YTD Q3 215 SAN ANTONIO: Net absorption in the Alamo City is approaching a record high for 215. The year-to-date net absorption of 848,61 sq. ft. is only 129, sq. ft. shy of meeting the annual record high set in 27. Despite posting 21,974 sq. ft. for Q3 215, vacancy remained flat at 15.4% due to vacant deliveries, but is still the lowest level the area has seen since 27. 2 18 16 14 12 1 27 28 29 21 211 212 213 214 Q3 215 Austin DFW Houston San Antonio Source: CBRE Research, Q3 215. Q3 215 CBRE Research 215 CBRE, Inc. 3

MARKETVIEW TEXAS OFFICE Figure 7: Overall Office Asking Rate, Gross, Annual $/SF 3. 25. 2. 15. 1. 27 28 29 21 211 212 213 214 Q3 215 Austin DFW Houston San Antonio Source: CBRE Research, Q3 215. AUSTIN: The overall average asking rental rate in Austin rebounded over the quarter, increasing by $.2 to close out Q3 215 at $31.53 per sq. ft. Austin still retains the highest office rental rate average in Texas and has risen by 21% since Q3 211. Class A rates have shown consistently prominent growth throughout this time period, with Class B following suit with a notable spike between year-end 214 and Q3 215. The CBD is home to the highest rates within the metro, with the average rising $.24 since Q2 215 and topping $4. per sq. ft. Suburban rates closed the quarter at $29.61 per sq. ft. after increasing by $.91 per sq. ft. in a single quarter. HOUSTON: The overall gross asking rate average for the Bayou City continued to rise over the quarter, increasing by $.17 per sq. ft. to $27.74 per sq. ft. This represents a 6.3% growth rate year-over-year. Despite the escalation in rents, landlords are becoming more aggressive by offering additional concessions as leasing activity has seen a measurable slowdown, concurrent with an increasing supply. Class A rents experienced a more pronounced quarterly increase, rising by $.26 per sq. ft. to land at $37.7 per sq. ft. at the close of September. Pinpointing this growth by submarket, office buildings along the FM 196/Highway 249 Corridor, Westchase and Southwest Freeway displayed the most considerable percentage hike in rates over the quarter, all rising by at least 2.% since Q2 215. DALLAS/FT. WORTH: DFW rent growth has maintained its momentum despite a recoiling of Class A rents over the quarter. The overall lease rate increased to $21.22 per sq. ft. in Q3 215 and is up 4% year-over-year. After spiking by $2. per sq. ft. last quarter, the average Class A rent retracted back to $26.44 per sq. ft. likely due to prime space taken off the market. Submarkets like Uptown, Las Colinas and Far North Dallas all continue to be strong contributors to overall rental rate growth in North Texas. Once expenses are factored in, rents for some of the newer, high-profile available space in Uptown are pushing $5. per sq. ft., an unprecedented price point for the market. SAN ANTONIO: Rental rate growth slowed somewhat in Q3 215, but was still enough to push the overall average asking rate over the $21. sq. ft. for the first time in CBRE history, finishing the quarter at $21.9 per sq. ft. Similarly, the Class A average rate eclipsed the $26. per sq. ft. mark after increasing by $.31 per sq. ft. over the quarter and closing out Q3 215 at $26.4 per sq. ft. Class B and Class C both rose by $.2 per sq. ft. and $.18 per sq. ft., respectively. The CBD was the most significant rent growth driver for the quarter after experiencing quarterly rental rate growth of 1.7% from Q2 215. Q3 215 CBRE Research 215 CBRE, Inc. 4

MARKETVIEW TEXAS OFFICE CONSTRUCTION. AUSTIN: The Austin market reported 339,89 sq. ft. among two new deliveries for the quarter, surpassing two million sq. ft. of new product coming online so far this year. This is the highest amount of completions introduced to the market in a given year since 28, 2.8 million sq. ft. of new product was added to the total office inventory. Deliveries for Q3 215 were 28% preleased at time of completion with at least 94, sq. ft. of actual move-ins scheduled by the end of the year. DALLAS/FT. WORTH: New completions for Q3 215 yielded just under two million sq. ft. among 13 projects with a combined preleasing rate of 66.5%. Aggregated with the previous two quarters, DFW has added 3.9 million sq. ft. to its inventory in 215. The increase in new completions did not slow down the pace of new starts, as 11 projects slated for 2.4 million sq. ft. broke ground over the quarter. As of Q3 215, the DFW pipeline had 29 projects underway which will total 6.8 million sq. ft. when completed. Preleasing rose slightly from 5% to 54.3%. Far North Dallas remains the primary submarket hub for new construction, accounting for over half of the market s pipeline now that Liberty Mutual s one-million sq. ft. build-to-suit is in progress. Figure 8: Construction HOUSTON: The office pipeline in Houston has dialed back in recent quarters, but the market still leads the state in office square footage under construction. In Q3 215, that figure totaled 1.7 million sq. ft. among 32 buildings with 52.4% of that future space preleased. Out of these developments, 13 projects are speculative and 9.2% preleased at the close of September. The CBD, Greenway Plaza, West Loop/Galleria and West Houston are the primary driving submarkets of the metro s construction activity. Q3 215 recorded 581,25 sq. ft. of completions, which brings the year-to-date total to five million sq. ft. SAN ANTONIO: In Q3 215, two new deliveries came online within the San Antonio market, totaling 16, sq. ft. with 17% preleased. For the year, more than 53, sq. ft. of new office product has hit the market, with another 733,458 sq. ft. underway and at least 165, sq. ft. set to break ground before year-end. The projects under construction fall within three submarkets: North Central, Far North Central and Northwest. It was also announced over the quarter that world-renowned architecure firm Pelli Clarke Pelli has been selected to design the new Frost Bank Tower within the CBD, which is set to begin construction in fall 216. The project will be the first downtown office tower for San Antonio since 1989. Primary Market Delivered Construction (MSF) 6 5 4 3 2 1 28 29 21 211 212 213 214 YTD Q3 DFW Houston 215 Source: CBRE Research, Q3 215. Non-Primary Market Delivered Construction ( s SF) 3,5 3, 2,5 2, 1,5 1, 5 28 29 21 211 212 213 214 YTD Q3 Austin San Antonio 215 Q3 215 CBRE Research 215 CBRE, Inc. 5

MARKETVIEW TEXAS OFFICE Figure 9: Top Lease Transactions. Market Transaction Size (SF) Tenant Address/Building Name Submarket AUSTIN 99,47 Logitech Barton Skyway Southwest DALLAS/FT. WORTH 232, Geico Insurance 228 N Greenville Ave Richardson/Plano HOUSTON 179,28 Texas Children s Health Plan 633 West Loop South West Loop/Galleria SAN ANTONIO 45,137 Accenture 1931 Laureate Dr Northwest Source: CBRE Research, Q3 215. Figure 1: Top Sale Transactions Market AUSTIN Transaction Size (SF) Buyer Address/Building Name Submarket 366,638 (Two Buildings) Deutsche/Tier Reit 118 Domain Blvd 1151 Alterra Pkwy Northwest DALLAS/FT. WORTH 1,431,77 CBRE Global Investors Galleria Towers Far North Dallas HOUSTON 428,385 Lincoln Property Galleria Place I & II West Loop/Galleria SAN ANTONIO Source: CBRE Research, Q3 215. 25,251 (Two Buildings) KBS Reit III, Inc 1786 & 1782 W I-1 Northwest Figure 11: Capital Markets and Office Sales Sales Volume (Millions SF) 6 5 4 3 2 1 July 215 August 215 September 215 Primary Markets Non-Primary Markets Source: Real Capital Analytics, CBRE Research, Q3 215. Texas Sales Activity: The capital markets landscape experienced higher activity from Q2 215 to Q3 215 in terms of sales volume; more than 14.3 million sq. ft. of transactions trading hands from July through September, an increase from 12.5 million sq. ft. last quarter. More square footage changed hands in primary markets than the combined total of Q2 215, with about 12.7 million sq. ft. originating out of DFW and Houston in Q3 215. Investment activity slowed significantly in nonprimary markets over the quarter, totaling 1.6 million sq. ft. in Q3 215 compared to 4.8 million sq. ft. in Q2 215. More than 18% of the total square footage transacted over the quarter occurred within a CBD. Note: Non-primary market data might occasionally account for locations outside of CBRE market boundaries such as Corpus Christi and Harlingen, TX. Q3 215 CBRE Research 215 CBRE, Inc. 6

MARKETVIEW TEXAS OFFICE CONTACTS Robert C. Kramp Director of Research & Analysis robert.kramp@cbre.com E. Michelle Miller Research Operations Manager michelle.miller@cbre.com Lauren Paris Senior Research Analyst, DFW +1 214 979 6587 lauren.paris@cbre.com Mark Rodgers Research Coordinator, Austin +1 512 499 4939 mark.rodgers@cbre.com Julia Burman Research Coordinator, DFW +1 214 979 653 julia.burman@cbre.com CBRE OFFICES Austin 1 Congress, Suite 5 Austin, TX 7871 Dallas 21 McKinney, Suite 7 Dallas, TX 7521 Houston 28 Post Oak, Suite 23 Houston, TX 7756 San Antonio 2 Concord Plaza, Suite 8 San Antonio, TX 78216 Cammie Moise Senior Research Analyst, Houston +1 713 881 947 cammie.moise@cbre.com Nicholas Ianetta Research Coordinator, San Antonio +1 21 253 619 nicholas.ianetta@cbre.com To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at www.cbre.com/researchgateway. Texas totals, including vacancy, represent aggregate data from Austin, Dallas/Fort Worth, Houston, and San Antonio markets. Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

MARKETVIEW Texas Office, Q1 215 Positive net absorption sustained; new completion activity accelerates Vacancy Rate 15.2% Net Absorption 2.7 MSF Avg. Asking Rate $24.33 Per Sq. Ft. Completions 4.7 MSF Figure 1: Net Absorption Net Absorption (MSF) 5 Texas Office aggregates the Austin, Dallas/Ft. Worth, Houston and San Antonio markets. Arrows indicate change from previous quarter 4 3 2 1 (1) (2) (3) 27 28 29 21 211 212 213 214 Q1 215 Source: CBRE Research, Q1 215. Austin Dallas/Ft. Worth Houston San Antonio The aggregate office vacancy for the major Texas markets rose over Q1 215, increasing by 4 basis points (bps) since Q4 214, although not all markets witnessed upward movement in vacancy. Accelerated new completion activity coupled with slower construction starts caused the construction pipeline to dip this quarter, with about 23 million sq. ft. of active projects in Q1 215 vs. the 29 million sq. ft. at the end of 214. Total net absorption for Q1 215 yielded approximately 2.7 million sq. ft., slightly higher than the amount of net absorption posted in Q4 214 among the four major Texas office markets. The state unemployment rate dropped from the previous quarter, at 4.3% in February 215 and is down from 5.7% in February 214. At 15 bps lower than the U.S., the Texas unemployment rate has been below the national rate for 74 consecutive months. In March, Texas was awarded another Governor's Cup for 214 based on total project activity for the year. Texas was the #1 ranking state in the country with 689 projects, exceeding its top ranking of 657 projects in 213. Year-over-year sales volume among the major Texas office markets yielded approximately $2.3 billion in Q1 215, about 45% higher than transaction volume in Q1 214. The combined market average for price per sq. ft. also increased throughout Q1 215, along with a downward shift in cap rates. Q1 215 CBRE Research 215 CBRE, Inc. 1

MARKETVIEW TEXAS OFFICE The Texas office market closed out Q1 215 with mixed signals in terms of overall fundamentals, yet continued to add jobs despite sustained lows in oil prices. Its central location, robust population growth, skilled and diverse workforce, low taxes and pro-business environment have been a consistent boon for the office market. The state continues to experience healthy employment growth and is a vital component of the nation's growth, as the state accounted for nearly one-fifth of the country's payroll gains over the last year and is home to 52 Fortune 5 headquarters. The Texas unemployment rate is another barometer of its strength as a labor market as it has outperformed the national level for 74 consecutive months. ECONOMIC CONDITIONS / DEMOGRAPHICS The Texas unemployment rate fell from 4.6% in Q4 214 to 4.3% in February and is down from 5.7% 12 months ago. The state unemployment rate is also 15 bps below the national rate in of 5.8% as of February 215. In terms of jobs added, the seasonally adjusted year-over-year job growth rate for the state was 3.2% through February 215, which equates to 366,2 nonagricultural jobs over the 12-month period, resulting in a total employment of nearly 11.8 million. The construction sector posted the highest percentage growth out of the major industries in Texas, with 7.1% Figure 2: Comparative Unemployment Unemployment Rate (%) 1 9 8 7 6 5 4 3 2 1 2 21 22 23 24 25 26 27 Source: Bureau of Labor Statistics, Non-Seasonally Adjusted Annual Rate, April 215. year-over-year growth and 44,8 jobs added for the 12 months ending February 215. Companies that fall within the Trade, Transportation & Utilities category reported 88,2 jobs added for this same time period, the highest volume of new jobs for any major industry, followed by Professional & Business Services with 63,6 jobs added. Over the past decade, the number of Texas residents has increased by nearly 4.3 million residents and recent studies suggest this fastpaced growth to be a long-term trend for the state. A new report released by the Office of the State Demographer projects Texas to double in size by 25 (based on the 21 Census), yielding a population of 54.4 million by 25 if the migration patterns of 2-21 continue throughout that timeframe. Forbes recently featured all four Texas major markets among the top 2 fastest-growing large metro areas in the country, with Houston as the fastest-growing metro in the nation. Texas is also the only state in the U.S. that has three cities of over one million people (Houston, Dallas and San Antonio). With Houston s energy hub, the critical mass of corporate headquarters in Dallas, San Antonio s diverse economy and rich culture, and Austin s notoriety as one of the nation s strongest high-tech centers, each metro area contributes to the state's industry diversity in a unique way. Austin Dallas/Ft. Worth Houston San Antonio Texas U.S. 28 29 21 211 212 213 214 Q1 215 Q1 215 CBRE Research 215 CBRE, Inc. 2

MARKETVIEW TEXAS OFFICE Figure 3: Industry Employment Breakdown ( s) Industry Austin Dallas Fort Worth Houston San Antonio Texas Mining, Logging & Constr. 5.7 21.4 319.8 57.1 99.3 Manufacturing 58.1 262.6 254.8 45.7 883.9 Trade, Trans. & Utilities 159.9 695.7 62.1 165.1 2,373.3 Information 25.6 81.8 33.2 21.6 25.8 Financial Activities 52.6 271.4 148. 84.5 713.4 Prof. & Bus. Services 148.7 547. 466.2 125.7 1,579.2 Educ. & Health Services 19.4 411.6 361.5 148.2 1,559.2 Leisure & Hosp. Services 17.2 334.9 29.4 116.4 1,223.1 Other Services 4.2 115.3 13.6 34.8 413.1 Government 173.2 411.6 386.1 165.7 1,837.3 Total Nonfarm Employment 925.6 3,333.3 2,965.7 964.8 11,778.6 Source: Bureau of Labor Statistics, April 215. Figure 4: Texas Market Snapshot Market Net Rentable Area (SF) Sublease Availability (SF) Total Availability (SF) Total Vacancy Rate (%) Net Absorption (SF) Asking Rates Average Annual ($/SF) Delivered Buildings (SF) Construction Under Construction (SF) Total Class A Class B Austin 43,665,21 564,845 6,533,95 11.5 442,682 $31.66 $36.27 $24.48 881,95 288,552 Dallas/Ft. Worth 218,268,879 6,322,725 51,81,944 18.3 1,216,398 $2.7 $27. $18.53 1,533,21 6,34,914 Houston 21,947,638 5,19,546 3,52,137 12.6 577,7 $27.17 $37.27 $23.1 2,9,35 15,894,915 San Antonio 27,343,961 393,111 5,465,913 15.5 426,49 $2.67 $25.12 $2.27 16,5 746,977 Source: CBRE Research, Q1 215. Q1 215 CBRE Research 215 CBRE, Inc. 3

MARKETVIEW TEXAS OFFICE VACANCY Unlike Q4 214, the aggregate vacancy for the major Texas office markets rose in Q1 215, increasing 4 bps from 14.8% to 15.2% quarterover-quarter. The year-over-year variance in vacancy is also 4 bps, with Q1 214 as the lower of the two periods, as the metric has fluctuated throughout the last four quarters. Since mid-211, the combined, weighted vacancy for the four markets has dropped by 41 bps, buoyed by more than 38 million sq. ft. of positive net absorption during that timeframe. Austin, which had the highest vacancy of the four major markets in 29, now has the lowest after falling from its peak of 24.9% to now sit at 11.5%. LEASE RATES Despite the uptick in vacancy, the quad-market average asking lease rate rose throughout Q1 215 as well. The weighted average for quoted lease rates in Texas increased from $24.9 per sq. ft. in Q4 214 to $24.33 per sq. ft. on a gross basis in Q1 215. Year-over-year rental rate growth as of Q1 215 was 4.2% for the total market average, with Class A rates increasing at an even faster pace for the same time period, at 7.3%. From an individual market perspective, Austin has witnessed the highest rental rate growth, at 1.7% year-over-year, followed by Houston at 8.5%. DELIVERED CONSTRUCTION New completions in Q1 215 totaled about half of the amount of deliveries in the previous quarter, posting 4.7 million sq. ft. compared to 9.4 million sq. ft. at year-end 214. The Houston market continues to account for the majority of this activity, although this proportion declined from 62% to 45% over the quarter. Of the 2.1 million sq. ft. of new construction in Houston, 53% was preleased at time of delivery. The office pipeline for Texas also declined in Q1 215, falling from 29.3 million sq. ft. in Q4 214 to now sit at 23.2 million sq. ft., with a pre-committed rate of 65%. Figure 5: Vacancy Rates (%) 26 24 22 2 18 16 14 12 1 26 27 28 29 21 211 212 213 214 Q1 215 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q1 215. Figure 6: Asking Rates, Gross Avg. Annual $/SF 3 28 26 24 22 2 18 16 26 27 28 29 21 211 212 213 214 Q1 215 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q1 215. Figure 7: Delivered Construction MSF 6 5 4 3 2 1 27 28 29 21 211 212 213 214 Q1 215 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q1 215. Q1 215 CBRE Research 215 CBRE, Inc. 4

MARKETVIEW TEXAS OFFICE Figure 8: Average Sale Price $/SF 4 3 2 1 21 23 25 27 29 211 213 Q1 215 Austin Dallas/Ft. Worth Figure 9: Sales Volume $B 6 5 4 3 2 1 21 23 25 27 29 211 213 Q1 215 Austin Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q1 215. Source: Real Capital Analytics, Q1 215. CAPITAL MARKETS Sales volume for office assets throughout the four major Texas office markets totaled approximately $2.3 billion among 93 properties for Q1 215, about 45% higher than the transaction volume of Q1 214, according to data from Real Capital Analytics (RCA). The 12-month trailing price per sq. ft. averaged $28, a 7% increase from the prior trailing period ending in Q1 214, accompanied by falling cap rates, with Q1 215 averages ranging from 6.5% to 7.4% across the key Texas office markets. For Q1 215, Houston had the highest sale price per sq. ft. among the major Texas office markets, at $392 per sq. ft., while Dallas/Fort Worth continued to lead the state in sales volume for Q1 215, at nearly $4.3 billion. Pricing and cap rate figures are based on well-qualified deals that have been confirmed, approximated or assumed by local professionals and gathered by RCA. Figure 1: Top Lease Transactions Market Transaction Size (SF) Tenant Address Submarket Austin 23,75 Indeed 65 N.Capital of Texas Hwy Northwest Dallas/Ft. Worth 119,611 NEC Corporation Royal Ridge V Las Colinas Houston 191,893 Direct Energy* 12 Greenway Plaza Greenway Plaza San Antonio 12,147 iheart Comunications 288 Stone Oak Pky** Far North Central Source: CBRE Research, Q1 215. *Renewal ** Sale/Leaseback Figure 11: Top Sale Transactions Market Transaction Size (SF) Tenant Address Submarket Austin 247, Multiple 1144 Research Blvd Northwest Dallas/Ft. Worth 238,51 Libitzky Property Companies Canal Centre Las Colinas Houston 797,36 Neutrality Partners 131 Fannin CBD San Antonio 12,147 CPA 17 - Global LLC 288 Stone Oak Pky* Far North Central Source: CBRE Research, Q1 215. *Sale/Leaseback Q1 215 CBRE Research 215 CBRE, Inc. 5

MARKETVIEW TEXAS OFFICE CONTACTS Lynn Cirillo Lauren Paris Patrick Loewe Research Operations Manager Senior Research Analyst Research Coordinator, Austin +1 713 577 1771 +1 214 979 6587 +1 512 499 4939 Lynn.cirillo@cbre.com Lauren.paris@cbre.com Patrick.loewe@cbre.com Angie Hamilton Nick Ianetta Research Analyst, Houston Research Coordinator, San Antonio +1 713 881 96 +1 21 253 619 Angie.hamilton@cbre.com nick.ianetta@cbre.com CBRE OFFICES Austin Dallas Houston Downtown 1 Congress, Suite 5 21 McKinney, Suite 7 7 Louisiana, Suite 7 Austin, TX 7871 Dallas, TX 7521 Houston, TX 772 Houston Galleria San Antonio 28 Post Oak, Suite 23 2 Concord Plaza, Suite 8 Houston, TX 7756 San Antonio, TX 78216 Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

MARKETVIEW Texas Office, Q4 214 Texas office vacancy continues to fall despite rise in new completions Vacancy Rate 14.8% Net Absorption 2.6 MSF Avg. Asking Rate 24.9 $/SF Completions 2.6 MSF Figure 1: Net Absorption Net Absorption (MSF) 5 *Arrows indicate change from previous quarter. 4 3 2 1 (1) (2) (3) 27 28 29 21 211 212 213 214 Source: CBRE Research, Q4 214. Austin Dallas/Ft. Worth Houston San Antonio Overall office vacancy in Texas continued to decline throughout Q4 214, albeit marginally, falling by 1 basis points (bps) since Q3 214. Year-overyear, the collective vacancy for the state is down by 2 bps despite adding more than 2.8 million sq. ft. in inventory in 214. Completion activity picked up over the quarter, while the collective under construction pipeline for Texas simultaneously expanded; the Q4 214 benchmarks for these metrics are 143.3% and 41.7% higher, respectively, for 214. Total net absorption for the quarter yielded 2.6 million sq. ft., contributing to an annual total of over 1 million sq. ft. for the four major Texas office markets. The state unemployment rate dropped from the previous quarter, at 4.6% in November, and is down from 5.8% in November 213. At 9 bps lower than the United States, the Texas unemployment rate has been equal to or below the national rate for 95 consecutive months. The Federal Reserve projects 2.2% job growth for Texas in 215, which equates to an additional 235, to 295, jobs throughout the state. The November 214 edition of the Moody's Précis U.S. State report ranks Texas as the #1 state in the country for vitality and employment growth from 213-218. The Professional Services sector, an office-using industry, is also expected to grow at an above-average rate in 215. Q4 214 CBRE Research 215 CBRE, Inc. 1

MARKETVIEW TEXAS OFFICE The Texas office market closed out 214 in a favorable position as the regional economy continues to grow. Its central location, robust population growth, skilled and diverse workforce, low taxes and pro-business environment have been a consistent boon for the office market. The state continues to experience healthy employment growth and is a vital component of the nation's growth, as the state accounted for nearly one-fifth of the country's payroll gains over the last year and is home to 52 Fortune 5 headquarters. The Texas unemployment rate is another barometer of its strength as a labor market as it has either met or outperformed the national level for 95 consecutive months. As a result of these indicators, the major metropolitan areas of Austin, Dallas/Fort Worth, Houston and San Antonio sustained improving fundamentals throughout Q4 214. ECONOMIC CONDITIONS / DEMOGRAPHICS The Texas unemployment rate fell from 5.3% in Q3 214 to 4.6% in November, and is down from 5.8% 12 months ago. The state unemployment rate is also 9 bps below the national rate in November, at 5.5%. In terms of jobs added, the seasonally adjusted year-over-year job growth rate for the Figure 2: Comparative Unemployment Unemployment Rate (%) 1 9 8 7 6 5 4 3 2 1 2 21 22 23 24 25 26 27 state was 3.9% in November, which equates to 441,2 nonagricultural jobs over the past year, for total employment of over 11.7 million at the close of November 214. The major office-using industry of Professional & Business Services continued to post considerable growth for the same time period, at 4.5%, adding the largest number of jobs out of any other sector for the 12 months ending November 214. The Mining & Logging supersector grew at a rate of 1.2% for this time period, outpacing all other Texas industries. Over the past decade, the state s population has increased by nearly 4.3 million and is projected to house as many as 55.2 million residents by 25, if migration patterns continue according to a 213 study conducted by the Office of the State Demographer. Forbes recently featured all four Texas major markets among the top 2 fastest-growing large metro areas in the country, with Houston as the fastest-growing metro in the nation. Texas is also the only state in the U.S. that has three cities of over one million people (Houston, Dallas and San Antonio). With Houston s energy hub, the critical mass of corporate headquarters in Dallas, San Antonio s diverse economy and rich culture, and Austin s notoriety as one of the nation s strongest hightech centers, each metro area contributes to the state's industry diversity in a unique way. 28 29 21 211 212 213 214 Austin Dallas/Ft. Worth Houston San Antonio Texas U.S. Source: Bureau of Labor Statistics, Non-Seasonally Adjusted Annual Rate, January 215. Q4 214 CBRE Research 215 CBRE, Inc. 2

MARKETVIEW TEXAS OFFICE Figure 3: Industry Employment Breakdown ( s) Industry Austin Dallas Fort Worth Houston San Antonio Texas Mining, Logging & Constr. 47.9 189.4 322.9 52.9 986.6 Manufacturing 53.8 256.3 262.1 46.2 891.9 Transp., Whs. & Utilities 15.3 163. 142.2 24.5 585.1 Information 24.5 79.8 33.8 21.6 211.3 Financial Activities 49.4 261.1 145.6 79.2 714. Prof. & Bus. Services 145. 526.5 449. 116.6 1545.5 Retail Trade 99.8 327.6 291.6 14.2 1269.3 Wholesale Trade 47.1 182.8 155.2 33. 57.8 Educ. & Health Services 12.1 398.7 363.5 142.8 1563. Leisure & Hosp. Services 19.4 33.8 29.2 122.4 127.3 Other Services 4.2 118.7 13.5 35. 46.2 Government 171.9 45.8 383.1 161.6 1854.2 Mining, Logging & Constr. 47.9 189.4 322.9 52.9 986.6 Total Nonfarm Employment 96.4 324.4 2942.8 94.1 11742.2 Source: Bureau of Labor Statistics, January 215. Figure 4: Texas Market Snapshot Market Net Rentable Area (SF) Sublease Availability (SF) Total Availability (SF) Total Vacancy Rate (%) Net Absorption (SF) Asking Rates Average Annual ($/SF) Delivered Buildings (SF) Construction Under Construction (SF) Total Class A Class B Austin 42,784,115 65,863 6,25,311 1.6 318,635 29.56 34.78 22.89 143,331 3,569,216 Dallas/Ft. Worth 218,591,6 5,492,392 51,48,659 18.4 343,496 2.68 26.61 18.41 1,35,636 7,154,214 Houston 199,151,13 4,15,37 27,232,558 11.6 1,688,47 25.79 36.13 23.2 1,179,41 17,62,665 San Antonio 27,9,525 434,994 5,483,256 15.9 21,343 2.34 24.66 2.12 197,15 96,8 Source: CBRE Research, Q4 214. Q4 214 CBRE Research 215 CBRE, Inc. 3

MARKETVIEW TEXAS OFFICE VACANCY The collective office vacancy rate for the major Texas markets continued to decline in Q4 214, dropping slightly by 1 bps since last quarter, and 2 bps since Q4 213 despite adding 2.8 million sq. ft. in deliveries over the last 12 months. Since the beginning of 212, the aggregate vacancy for the four markets has dropped by 37 bps, buoyed by more than 25 million sq. ft. of positive net absorption during that timeframe. Austin, which had the highest vacancy of the four major markets in 29, now has the lowest after falling from its peak of 24.9% to now sit at 1.6%. LEASE RATES The aggregate average for quoted lease rates in Texas witnessed yet another uptick in Q4 214, averaging $24.9 per sq. ft. on a gross basis and up by $.13 per sq. ft. from the previous quarter. The year-over-year pace of this rental rate growth has picked up significantly from 1.1% in Q3 214 to 4.3% in Q4 214. From an individual market perspective, Austin has witnessed the highest rental rate growth, at 5.% year-over-year, followed by Houston at 4.8%, Dallas/Fort Worth at 4.2% and San Antonio at 2.6%. Over the quarter, the Class A average rose more prominently than the overall quad-market average, increasing by 4.8% to $3.55 per sq. ft. by year-end. DELIVERED CONSTRUCTION Deliveries in Q4 214 exceeded the previous quarter, posting 2.6 million sq. ft. at year-end and more than 9.4 million sq. ft. for 214. The Houston market accounted for about 62% of the new delivery activity in 214, with 53%, or 622,776 sq. ft., already pre-leased in that market. Under construction activity, also led by Houston, remained relatively flat in Q4 214 with 29.3 million sq. ft. in the pipeline, which is about 42% more square footage than at this point last year. As of year-end, more than 17 million sq. ft. of the pipeline, or about 6%, was pre-committed. Figure 5: Vacancy Rates Vacancy (%) 26 22 18 14 1 26 27 28 29 21 211 212 213 214 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q4 214. Figure 6: Asking Rates, Gross Avg. Annual $/SF 3 28 26 24 22 2 18 16 26 27 28 29 21 211 212 213 214 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q4 214. Figure 7: Delivered Construction MSF 6 5 4 3 2 1 27 28 29 21 211 212 213 214 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q4 214. Q4 214 CBRE Research 215 CBRE, Inc. 4

MARKETVIEW TEXAS OFFICE Figure 8: Average Sale Price $/SF 3 25 2 15 1 5 21 22 23 24 25 26 27 28 29 21 211 212 213 214 Austin Dallas/Ft. Worth Houston San Antonio Austin Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q4 214. Source: Real Capital Analytics, Q4 214. CAPITAL MARKETS Figure 1: Top Lease Transactions Figure 9: Sales Volume $B 6 5 4 3 2 1 21 22 23 24 25 26 27 28 29 21 211 212 213 214 Office sales volume throughout Texas totaled approximately $7.9 billion among 225 properties for the trailing 12-months through Q4 214, yet this amount is down by 28% compared to the prior 12-month period, according to data from Real Capital Analytics (RCA). In Q4 214 alone, however, volume was up by 15% from the previous quarter, from about $2.2 billion to $2.5 billion. The 12-month trailing price per sq. ft. averaged $186, a 1% increase from last year, accompanied by falling cap rates, which averaged 7.% and down by 5 bps from the prior 12 months. At year-end, Austin had the highest average sale price per sq. ft. among the major Texas office markets, at $259 per sq. ft., with Dallas/Fort Worth leading the state in sales volume for Q4 214, at nearly $3.5 billion. Pricing and cap rate figures are based on well-qualified deals that have been confirmed, approximated or assumed by local professionals and gathered by RCA. Market Transaction Size (SF) Tenant Address Submarket AUSTIN 137,615 Bazaarvoice 191 Stonelake Blvd. Northwest DALLAS/FT. FORTH 157,568 EnLink One Art Plaza Dallas CBD HOUSTON 23, Stewart Information Services* 199 Post Oak West Loop SAN ANTONIO 42,262 IBEX 12449 Silicon Dr Northwest Source: CBRE Research, Q4 214. *Renewal Figure 11: Top Sale Transactions Market Transaction Size (SF) Tenant Address Submarket AUSTIN 9,267 Scher Investments 36 B N Capital Of Texas Hwy DALLAS/FT. FORTH 465.73 KBS Realty 1491, 5 Quorum Dr. & 1531 Spectrum Dr. Southwest Far North Dallas HOUSTON 449,87 Stream Realty Partners/DRA Advisors 6 Jefferson CBD SAN ANTONIO 533,465 Clarion Partners / Griffin Partners* 3 Convent St CBD Source: CBRE Research, Q4 214. *Bought by two investment companies Q4 214 CBRE Research 215 CBRE, Inc. 5

Texas Office MarketView Q2 214 VACANCY 16.% CONSTRUCTION 24,125,983 Sq. Ft. DELIVERIES 2,842,243 Sq. Ft. Directional arrows based on change from the previous quarter. Data reflects market totals. TRADE VOLUME 1% Y-o-Y CBRE Global Research and Consulting UNEMPLOYMENT 5.1% JOB GROWTH 383,1 Y-o-Y TEXAS LOGGED THE HIGHEST AMOUNT OF YEAR-OVER-YEAR EMPLOYMENT GROWTH IN NEARLY 17 YEARS AT THE CLOSE OF MAY 214, AN INDICATION OF CONTINUED OFFICE EXPANSION FOR THE STATE. Figure 1: Quick Stats (as compared to Q1 214) Austin Dallas Ft. Worth Houston San Antonio Net Absorption $ $ # $ Asking Rates # # Under Construction # $ # Vacancy # # # Hot Topics For the 12 months ending May 214, Texas has added nearly 4, net jobs, making it the largest year-over-year job increase in Texas in almost 17 years. This change equates to a growth rate of 3.4%, the fastest pace for the state since November 212. Average asking rental rates rose once again for all four major markets, increasing at a 5.7% pace year-over-year, for an average of $23.7 in the state. Despite an uptick in deliveries, the collective under construction pipeline for Texas continued to expand, now totaling over 24 million sq. ft. of active projects. This is more than double the amount of construction activity one year ago. The state unemployment rate continued its descent to 5.1% at the close of May 214, its lowest point in nearly six years. This rate is 12 basis points (bps) lower than the national average. Sales volume throughout Texas remained flat, increasing by 1% statewide year-over-year and totaling more than $1.2 billion for the past 12 months, based on trailing data from Real Capital Analytics. Texas took the top rank for location desirability among job seekers according to a July 214 report from Indeed Hiring Lab. Additionally, the state also led the nation for job searches within the oil and mining industries. According to A Texas Eye on the Dollars, an estimated $21 billion in federal stimulus money is being distributed throughout the state, with the Health & Human Services and Education categories each accounting for more than one-third of the total funds awarded. 's Figure 2: Net Absorption, Sq. Ft. 5, 4, 3, 2, 1, (1,) (2,) (3,) 27 28 29 21 211 212 213 214 Source: CBRE Research, Q2 214. Texas continues to prove through its commercial office market that it is a major contender and highly sought after destination for residents and businesses alike. As a result of its central location, robust population growth, skilled and diverse workforce, low taxes and pro-business environment, Texas consistently wins business. The state continues to experience healthy employment growth and is a vital component of the nation s post-recession recovery, as the state has accounted for one-third of the country s payroll gains over the past decade. More recently, Texas gained 383,1 jobs throughout the 12 months ending May 214 and is projected to grow at a 2.8% annual rate throughout 214 by Moody s Analytics, translating to the third fastest job growth in the nation. As a result of these indicators, the major metropolitan areas of Austin, Dallas/ Fort Worth, Houston and San Antonio continued to witness positive net absorption, rising lease rates and increasing construction momentum throughout the state. As a key component to the state s economic strength, the housing market continues to improve throughout 214. According to the Real Estate Center at Texas A&M University, the year-to-date benchmark through May 214 has surpassed the same metric for 213 at $1.8 billion with the number of sales edging out last year s count by only 168 homes. At just under $25,, the average home price for May of 214 is 6.9% higher on a year-over-year basis. Months inventory of existing homes edged up to 3.7, the highest point since October 213, although still low considering the market equilibrium is closer to six months supply. Texas also continues to show improving foreclosure metrics. In Texas, one in every 2,753 housing units is in foreclosure, less than half the frequency as the U.S. rate of one in every 1,228 according to data from RealtyTrac. Both bank-owned and auction foreclosure filings throughout the state Austin Dallas/Ft. Worth Houston San Antonio were down year-over-year by 41.% and 11.8%, respectively, while pre-foreclosures remained flat. As the state s population approaches 27 million people, Texas holds its notoriety for being fastgrowing and has dominated the nation in population growth. Over the past decade, the number of Texas residents has increased by nearly 4.3 million and is projected to house as many as 55.2 million residents by 25, if migration patterns continue according to a 213 study conducted by the Office of the State Demographer. Recent Census Bureau data revealed that among cities with a population of 5, residents or more, seven of the top 15 fastest growing cities are in Texas. Three of these cities are located within 3 miles of Austin, including the fastest growing city in the country, San Marcos. Frisco, a part of the Dallas/Fort Worth metro area, took the #2 spot. As the only state in the U.S. that has three cities of over one million people (Houston, Dallas and San Antonio), each metro area contributes to the state s industry diversity in a unique way. Houston is a global hub for the thriving energy industry with one of the busiest ports in the country and a significant biomedical research and aerospace presence. Dallas s central location makes it a key financial and logistics hub, while also having strong concentrations in telecommunications and manufacturing. San Antonio holds much of its economic base in the tourism, health, and biotech industries, but has also experienced strong and growing activity related to exploration and production in the Eagle Ford shale. Austin is a hub for high-tech activity, including semiconductor manufacturing and software. 214, CBRE, Inc.

OFFICE SECOND QUARTER MARKETVIEW Q2 214 Texas Office MarketView Figure 3: Market Snapshot Market RBA Available Sublease Sq. Ft. Total Available Space Sq. Ft. Total Vacant Space Sq. Ft. Vacancy Absorption Net Sq. Ft. Average Annual Gross Asking Rates per Sq. Ft. Market Class A Class B Average Delivered Buildings Sq. Ft. Construction Under Construction Sq. Ft. AUSTIN 42,475,999 89,648 6,754,224 5,8,677 11.8% 153,61 $28.82 $33.44 $22.75 2,365,934 DALLAS/FT. WORTH 218,4,253 4,914,71 49,985,586 4,69,826 18.7% 41,163 $2.7 $24.15 $17.94 927,163 4,993,837 HOUSTON 197,38,57 3,831,538 27,456,232 27,456,22 12.% 1,556,96 $25.91 $37.69 $22.29 1,915,8 16,322,252 SAN ANTONIO 26,774,635 39,57 5,436,879 4,498,552 16.8% 276,155 $2. $24.7 $19.73 443,96 Source: CBRE Research, Q2 214. 2 Figure 4: Unemployment Rates 1% 9% 8% 7% 6% 5% 4% 3% 2% 2 21 22 23 24 Source: Bureau of Labor Statistics, Metro Areas, Not Seasonally Adjusted, Annual Rates, June 214. Figure 5: Industry Employment Breakdown ( s) Source: Bureau of Labor Statistics, July 214. 25 26 27 Austin Dallas/Ft. Worth Houston San Antonio Texas US 28 29 21 211 212 213 Q2 214 ECONOMIC CONDITIONS/DEMOGRAPHICS The statewide unemployment rate for Texas edged down once again for both the quarter and the year, dropping from 6.4%, to 5.1% over the last 12 months. This is the lowest rate for the state in nearly six years as it continues to outperform the nation. On a year-overyear basis, the seasonally adjusted annual job growth rate for the state was 3.4%, which equates to 383,1 nonagricultural jobs over the past year, for total employment of over 11.5 million at the close of May 214. Similar to last quarter, the Mining and Logging supersector outpaced all other major industries in year-over-year growth, gaining jobs at an even higher rate of 7.4% rate for the 12 months ending May 214. The major office-using industry of Professional & Business Services registered considerable growth for the same time period, at 4.6%, in addition to Construction at 4.3%, Information at 4.%, and Financial Activities at 2.9%, all industries that are currently impacting the office sector. The Lone Star State was one of the first states to return to its pre-recession employment peak in 211, and continues to exceed that level as it has consistently registered job gains for four years. INDUSTRY Austin Dallas Ft. Worth Houston San Antonio Texas Mining, Logging & Constr. 46.4 181.8 39.1 5.1 947.7 928. Manufacturing 53.3 258.1 258.5 46.3 883.4 88.7 Transp., Whs. & Utilities 159.2 661.2 582.1 16.2 2321. 2293.2 Information 23.9 81. 33.1 21.1 28. 25.3 Financial Activities 49.2 252.6 144.9 76.8 699.3 691.4 Prof. & Bus. Services 143.6 511.7 44.2 114.2 1515.5 1494.4 Educ. & Health Services 11.3 39.5 347.4 141.5 1528.1 1511. Leisure & Hosp. Services 14.4 332.2 281.7 121.2 1188.3 1173.9 Other Services 39.1 121.1 12.5 34.7 42.6 44.8 Government 17.4 397.7 377.7 16.8 1837.9 1833.9 Total Nonfarm Employment 89.7 3187.7 2877.2 926.9 11531.8 11416.6 Total Nonfarm Employment 863.9 2217.6 945.3 2829.4 897.2 11,346.9 214 CBRE, Inc.

OFFICE SECOND QUARTER MARKETVIEW Figure 6: Vacancy 26% 24% 22% 2% 18% 16% 14% 12% 1% 26 27 28 29 21 211 212 213 Q2 214 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q2 214. VACANCY Collective office vacancy in Texas witnessed an uptick during Q2 214, increasing by 12 bps since last quarter, at the onset of more construction deliveries to the market. With vacancy at 16.% statewide, all major markets experienced vacancy increases with the exception of San Antonio. Since the beginning of 212, the aggregate vacancy for the four markets has dropped by 25 bps with two of the four major metro areas (Austin and Houston) at or below pre-recession levels. Total net absorption for the quarter yielded 2.4 million sq. ft., bringing the year-to-date total to nearly 4.6 million sq. ft. Last year, annual absorption totaled nearly 1 million sq. ft., marking the highest year of annual net absorption for Texas since 26. Q2 214 Texas Office MarketView Figure 7: Lease Rates, Overall Gross, Annual Avg. Asking, Per Sq. Ft. $28 $26 $24 $22 $2 $18 $16 Source: CBRE Research, Q2 214. 's Figure 8: Construction Delivered Sq. Ft. 6, 5, 4, 3, 2, 1, 26 27 28 29 21 211 212 213 Q2 214 Austin Dallas/Ft. Worth Houston San Antonio 27 28 29 21 211 212 213 YTD 214 Source: CBRE Research, Q2 214. Austin Dallas/Ft. Worth Houston San Antonio LEASE RATES, OVERALL Despite the rise in vacancy, the Texas aggregate average for quoted lease rates witnessed another uptick in Q2 214, averaging $23.7 per sq. ft. on a gross basis and up by $.34 per sq. ft. from the previous quarter. This average has climbed by 5.7% throughout the last 12 months. The Class A average rose from $28.33 to $29.84 with the strongest annual growth in Houston, where Class A rates have jumped by 12.9% over the past year. Class B rose at a similar pace, from $19.86 to $2.68 from Q2 213 to Q2 214. Across Texas, the spread for average asking lease rates stayed about the same at $8.82 per sq. ft., with Austin on the high-end at $28.82 per sq. ft. and San Antonio on the low end at $2. per sq. ft. CONSTRUCTION Construction activity throughout the state continues to rise in Q2 214 as the pipeline expanded once again even as deliveries picked up from the previous quarter. The total amount of projects under construction for major metropolitan areas now exceeds 24 million sq. ft., which is more than double the square footage in the pipeline at this point last year. Of this 24 million sq. ft., 64.4% is pre-leased. Additionally, the Houston market alone accounts for more than two-thirds of the current pipeline square footage. Quarterly deliveries for the state continued to pick up steam as well, with over 2.8 million sq. ft. of new completions compared to 1.7 million sq. ft. last quarter and approximately 65, sq. ft. 12 months ago. 3 214 CBRE, Inc.

OFFICE SECOND QUARTER MARKETVIEW Q2 214 Figure 9: Average Price per Sq. Ft. $3 Figure 1: Sales Volume 6, Texas Office MarketView $25 $2 $15 $1 $5 $ 21 22 23 24 25 26 27 28 29 21 211 212 213 Austin Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q2 214. 214 YTD 5, 4, 3, 2, 1, Austin Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q2 214. Capital flow throughout Texas has remained somewhat flat as 1% year-over-year growth in sales volume was posted through Q2 214, according to trailing 12-month data from Real Capital Analytics (RCA). More than $1.2 billion and nearly 4 office properties have transacted in this 12-month timeframe throughout the State of Texas. The 12-month trailing price per square foot averaged $169, a 4% drop from last year, accompanied by falling cap rates, which averaged 7.3% for the prior 12 months and down by 5 bps. Private buyers now comprise the majority of deal volume over the trailing 12-month period, accounting for 48% of transaction activity, while 37% stemmed from institutional trades and the remaining 15% from REITs. Pricing and cap rate figures are based on well-qualified deals that have been confirmed, approximated or assumed by local professionals and gathered by RCA. Figure 11: Top Lease Transactions Market Sq. Ft. Tenant Address Submarket AUSTIN 12, ARM 577 Southwest Parkway Southwest DALLAS/FT. WORTH 3, 7-Eleven Ranch Trail & Hackberry Road Las Colinas HOUSTON 171,16 Energy XXI 121 Main CBD SAN ANTONIO 128,7 Harland Clarke 15955 La Cantera Parkway Northwest *Renewal ** Expansion ***Renewal/Expansion Figure 12: Top Sale Transactions 4 Market Sq. Ft. Tenant Address Submarket AUSTIN 433,24 Cousins Properties Inc. 816 Congress CBD DALLAS/FT. WORTH 1,2,266 Goddard Investment Group 1445 Ross Avenue Dallas CBD HOUSTON 386,277 CWCapital Asset Management 363 N Sam Houston Parkway E North Belt SAN ANTONIO 15,495 Amarillo Tower Ltd 6243 W IH-1 Northwest Source: CBRE Research, Q2 214. 214 CBRE, Inc.

CONTACTS For more information about this Texas Office MarketView, please contact: TEXAS RESEARCH Lynn Cirillo Research Operations Manager CBRE Americas Research lynn.cirillo@cbre.com Lauren Paris Senior Research Analyst, Dallas +1 214 979 6587 lauren.paris@cbre.com Angie Bauer Research Analyst, Houston +1 713 881 96 angie.bauer@cbre.com Q2 214 Texas Office MarketView Nick Ianetta Research Coordinator, Austin +1 512 499 4939 nicholas.ianetta@cbre.com Veronica Gonzales Research Coordinator, San Antonio +1 21 253 619 veronica.gonzales@cbre.com FOLLOW CBRE GLOBAL RESEARCH AND CONSULTING This report was prepared by the CBRE U.S. Research Team which forms part of CBRE Global Research and Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. Additional U.S. research produced by Global Research and Consulting can be found at www.cbre.us/research. DISCLAIMER Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. 5 214 CBRE, Inc.

Texas Office MarketView 1Q 214 Q1 214 CBRE Global Research and Consulting VACANCY 14.8% CONSTRUCTION 23,116,748 Sq. Ft. DELIVERIES 1,677,839 Sq. Ft. TRADE VOLUME 31% Y-o-Y UNEMPLOYMENT 5.5% JOB GROWTH 31, Y-o-Y Directional arrows based on change from the previous quarter. Data reflects market totals. COLLECTIVE VACANCY FOR MAJOR TEXAS MARKETS DIPS BELOW 15% IN Q1 214 AS LEASE RATES AND CONSTRUCTION ACTIVITY GAIN MOMENTUM. Dallas San Austin Ft. Worth Houston Antonio Figure 2: Net Absorption, Sq. Ft. s Figure 1: Quick Stats (as compared to Q4 213) 5, 4, Net Absorption # # $ 3, Asking Rates # 2, Under Construction # # 1, Vacancy # (1,) Hot Topics (2,) Positive net absorption was reported for all major Texas office markets and totaled nearly 3 million sq. ft. collectively for Q1 214. Quoted rental rates rose for most major markets, only showing a decline in San Antonio. All four Texas office markets witnessed an increase in construction activity, totaling over 23 million sq. ft. in the pipeline at the end of Q1 214. For the 12 months ending March 214, Texas has added 31, net jobs as the statewide unemployment rate continues its descent to 5.5%, its lowest point in over five years. Sales volume throughout Texas grew by 31% year-over-year, totaling approximately $1.2 billion for the past 12 months, based on trailing data from Real Capital Analytics. (3,) Two of the top Texas markets, Houston and DFW, were placed within the Top 5 Metros for Foreclosure Equity in a recently released report by RealtyTrac. Foreclosed properties in each of the two metro areas have more than 5% with equity. Texas earned the top rank of Most Inbound State for migration once again, as the annual Allied Van Lines Magnet States 213 report awarded Texas with this title for the ninth consecutive year based on in-migration patterns. 27 28 29 Aus1n 21 Dallas/Ft. Worth 211 Houston 212 213 214 San Antonio Source: CBRE Research, Q1 214. The Texas office market set the tone for 214 on a favorable note, as its robust economy and employment climate continue to be driving forces behind the commercial real estate landscape. In the words of Texas Governor Rick Perry, Texas is crushing it. As a result of its central location, robust population growth, skilled workforce, low taxes and pro-business environment, Texas proves to be a desirable destination for residents and businesses alike. The state continues to experience healthy employment growth and is a vital component of the nation s post-recession recovery, as the state has accounted for one-third of the country s payroll gains over the past decade. More recently, Texas gained 31, jobs throughout the twelve months ending March 214 and is projected to grow at a 2.75% annual rate throughout 214 by Moody s Analytics, for the third fastest job growth in the nation. Correlated to these indicators, positive net absorption and falling vacancy remain prevalent themes for the major metropolitan areas of Austin, Dallas/ Fort Worth, Houston and San Antonio, along with rising lease rates and amplified construction activity throughout the state. As another undercurrent to the state s economic vitality, the housing market continues to improve at record-breaking strength. Sales volume has cooled in typical fashion as compared to the stronger summer months, but was still higher on a year-overyear basis as of March 214. At $5.3 billion, home sales exceeded the previous 12-month benchmark of $4.8 in March 213 based on data from the Real Estate Center at Texas A&M University. Additionally, Q1 214 sales totaled approximately $12.5 billion compared to $11.1 billion in Q4 213. Months inventory has been hovering around 3.3 to 3.4 months since December 213, marking the lowest amount of supply on record (since 199) and indicative of further housing starts. The median listing price of $178, for March 214 is the result of an increase over the last several months, and is 8.1% higher than 12 months ago. Texas also continues to show improving foreclosure metrics - the Q1 214 U.S. Home Equity & Underwater Report released by RealtyTrac listed two of the top Texas markets, Houston and DFW, within the Top 5 Metros for Foreclosure Equity, with 54% and 51% of foreclosed homes reporting equity, respectively. As the state s population approaches 27 million people, Texas holds its notoriety for being fastgrowing and has dominated the nation in population growth. Over the past decade, the number of Texas residents has increased by nearly 4.3 million and is projected to house as many as 55.2 million residents by 25 if these migration patterns continue according to a 213 study conducted by the Office of the State Demographer. From a metro area perspective, Houston and Dallas/Fort Worth had more growth throughout the past decade than any of the nation s other 365 metro areas, each with expansions of about 1.2 million new residents. As the only state in the U.S. that has three cities of over one million people (Houston, Dallas and San Antonio), each metro area contributes to the state s industry diversity in a unique way. Houston is a global hub for the thriving energy industry with one of the busiest ports in the country and a significant biomedical research and aerospace presence. Dallas s central location makes it a key financial and logistics hub, while also having strong concentrations in telecommunications and manufacturing. San Antonio holds much of its economic base in the tourism, health, and biotech industries, but has also experienced strong and growing activity related to exploration and production in the Eagle Ford shale. Austin is a hub for high-tech activity, including semiconductor manufacturing and software. 214, CBRE, Inc.

OFFICE FIRST QUARTER MARKETVIEW Q1 214 Texas Office MarketView Figure 3: Market Snapshot Market RBA Available Sublease Sq. Ft. Total Available Space Sq. Ft. Total Vacant Space Sq. Ft. Vacancy Absorption Net Sq. Ft. Average Annual Gross Asking Rates (Per Sq. Ft.) Market Average Class A Class B Delivered Buildings Sq. Ft. Construction Under Construction Sq. Ft. AUSTIN 42,444,966 712,219 6,764,159 4,983,921 11.7% 244,628 $28.59 $33.47 $22. 1,831,682 DALLAS/FT. WORTH 223,983,97 4,727,956 49,84,726 37,994,27 17.9% 1,134,39 $2.6 $23.98 $17.54 476,748 5,224,45 HOUSTON 195,279,281 4,243,466 27,536,728 23,296,818 11.9% 1,262,231 $25.3 $36.38 $22.28 1,21,91 15,766,156 SAN ANTONIO 26,92,519 444,85 5,323,649 4,74,323 17.6% 353,227 $19.74 $24.25 $19.44 294,865 Source: CBRE Research, Q1 214. Figure 4: Unemployment Rates 1% 9% 8% 7% 6% 5% 4% 3% 2% 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 Ausn Dallas/Ft. Worth Houston San Antonio Texas US Source: Bureau of Labor Statistics, Metro Areas, Not Seasonally Adjusted, Annual Rates, April 214. ECONOMIC CONDITIONS/DEMOGRAPHICS The statewide unemployment rate for Texas fell once again for both the quarter and the year, dropping from 6.4% to 5.5% over the last 12 months, the lowest rate for the state in more than five years as it continues to outperform the nation. On a year-over-year basis, the seasonally adjusted annual job growth rate for the state was 2.8%, which equates to 31, nonagricultural jobs over the past year, for an employment total of over 11.4 million at the end of March 214. The Mining and Logging supersector outpaced all other major industries in year-over-year growth, gaining jobs at a 5.8% rate for the 12 months ending March 214. The major officeusing industries of Professional & Business Services, Information and Financial Activities all registered considerable growth for the same time period, at 3.3%, 3.2% and 2.1%, respectively. The Lone Star State was one of the first states to return to its pre-recession employment peak in 211, and continues to exceed that level as it has consistently registered job gains for four years. Figure 5: Industry Employment Breakdown ( s) 2 INDUSTRY Austin Dallas Ft. Worth Houston San Antonio Texas Mining, Logging & Constr. 44.6 116.3 61.4 33.8 49. 928. Manufacturing 52.8 161.8 94.2 256.4 46.1 88.7 Transp., Whs. & Utilities 156.7 434.2 212.4 575.7 156.7 2293.2 Information 23.6 67.6 13.1 32.7 21.2 25.3 Financial Activities 49.5 198.6 53.1 142.2 75.7 691.4 Prof. & Bus. Services 139. 394.6 17.5 432.6 111.3 1494.4 Educ. & Health Services 11.2 269.8 118.2 341.5 141.1 1511. Leisure & Hosp. Services 16.8 22.1 14.9 277.8 118.3 1173.9 Other Services 38.5 78.4 36.7 1.6 34.5 44.8 Government 173.2 273.6 129.2 383.9 163.1 1833.9 Total Nonfarm Employment 885.9 2215. 93.7 2847.2 917. 11416.6 Total Nonfarm Employment 863.9 2217.6 945.3 2829.4 897.2 11,346.9 Source: Bureau of Labor Statistics, April 214. 214 CBRE, Inc.

OFFICE FIRST QUARTER MARKETVIEW Figure 6: Vacancy 26% 24% 22% 2% 18% 16% 14% 12% 1% 26 27 28 29 21 211 212 213 Aus/n Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q1 214. Figure 7: Lease Rates, Overall Gross, Annual Avg. Asking, Per Sq. Ft. $28 $26 $24 $22 $2 $18 $16 26 27 28 29 21 211 212 213 Aus/n Dallas/Ft. Worth Houston San Antonio VACANCY Vacancy in Texas continues to be driven down by sustained positive net absorption, fueled by prolonged demand in the state s largest office markets. Total net absorption for the quarter exceeded 3 million sq. ft., a 5% increase since last quarter and a strong start to 214. Last year, annual absorption totaled nearly 1 million sq. ft., marking the highest year of annual net absorption for Texas since 26. Overall vacancy for the state shed another 3 basis points (bps) over the quarter and now sits at 14.8%. Since the beginning of 212, the aggregate vacancy for the four markets has dropped by 25 bps and is expected to continue this declining trend. The Austin market in particular has improved substantially with vacancy now well below its pre-recession low, with Houston also nearing its previous cyclical low, matching levels from 28. LEASE RATES, OVERALL As tightening vacancy continues to put upward pressure on rental rates, the Texas market average for quoted lease rates witnessed another uptick in Q1 214, averaging $23.36 per sq. ft. and up by $.25 per sq. ft. from the previous quarter. This average has climbed by 5.4% throughout the last 12 months. Across Texas, the spread for average asking lease rates widened to $8.85 per sq. ft., with Austin on the high-end at $28.59 per sq. ft. and San Antonio on the low end at $19.74 per sq. ft. Asking rates are expected to continue this rising trend in areas where supply is still constrained due to the slow churn of new speculative inventory. Q1 214 Texas Office MarketView Source: CBRE Research, Q1 214. Figure 8: Construction Delivered Sq. Ft. s 6, 5, 4, 3, 2, 1, 27 28 29 21 211 212 213 214 Ausn Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q1 214. CONSTRUCTION Texas construction activity continues to proliferate as the pipeline expanded once again during Q1 214, growing by about 3 million sq. ft. and exceeding 23 million sq. ft. in total projects actively under construction. This represents an increase of nearly one-third in a single quarter and more than triple the amount of pipeline activity since year-end 212. More than two-thirds of the current pipeline stems from activity in Houston alone, which equates to almost 16 million sq. ft. Quarterly deliveries for the state gained momentum and translated to about 1.7 million sq. ft. of completions coming online in Q1 214. According to the 214 Construction Outlook Survey conducted by The Associated General Contractors of America, the majority of contractors surveyed expect dollar volume of office projects to be higher in 214 than in 213. 3 214 CBRE, Inc.

OFFICE FIRST QUARTER MARKETVIEW Q1 214 Texas Office MarketView Figure 9: Average Price Per Sq. Ft. $35 $3 $25 $2 $15 $1 $5 $ 21 22 23 24 25 26 27 28 29 21 211 212 213-214 YTD Aus4n Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q1 214. Figure 1: Sales Volume 6, 5, 4, 3, 2, 1, 21 22 23 24 25 26 27 28 29 21 211 212 213-214 YTD Aus4n Dallas/Ft. Worth Houston San Antonio Source: Real Capital Analytics, Q1 214. Capital flow throughout Texas sustained its momentum for Q1 214 with 31% year-over-year growth in sales volume, according to trailing 12-month data from Real Capital Analytics (RCA). This growth equates to nearly $1.2 billion in transactions and outpaces the North American annual growth rate of 28% with $13.3 billion in sales volume for the same timeframe. The 12-month trailing price per square foot averaged $182, a 1% increase from last year, accompanied by falling cap rates, which averaged 7.% for the prior 12 months and down by 4 bps. Institutional buyers comprised the vast majority of deal volume over the trailing 12-month period, accounting for 73% of transaction activity, while 18% stemmed from private buyer trades and the remaining 8% from REITs. Pricing and cap rate figures are based on well-qualified deals that have been confirmed, approximated or assumed by local professionals and gathered by RCA. Figure 11: Top Lease Transactions Market Sq. Ft. Tenant Address Submarket AUSTIN 13, Athena Health 8 W Cesar Chavez Street CBD DALLAS/FT. WORTH 5, State Farm President George Bush Tnpke & Hwy. 75 Richardson/Plano HOUSTON 258,735 American Bureau of Shipping*** Greenspoint Place 1 & 2 North Belt SAN ANTONIO 77,63 SWBC 45 Lockhill Road Northwest *Renewal ** Expansion ***Renewal/Expansion Figure 12: Top Sale Transactions 4 Source: CBRE Research, Q1 214. Market Sq. Ft. Tenant Address Submarket AUSTIN 1,912,892 Parkway Properties, Inc. 6 Congress (5 buildings) CBD DALLAS/FT. WORTH 1,2, Olympic Property Partners BDRC 141 Elm Street Dallas CBD HOUSTON 1,359,266 AEW Capital Management 1111 Bagby Street CBD SAN ANTONIO 17,196 SWBC 45 Lockhill Road Northwest 214 CBRE, Inc.

CONTACTS For more information about this Texas Office MarketView, please contact: TEXAS RESEARCH Lynn Cirillo Research Operations Manager CBRE Americas Research lynn.cirillo@cbre.com Lauren Paris Senior Research Analyst, Dallas +1 214 979 6587 lauren.paris@cbre.com Angie Bauer Research Analyst, Houston +1 713 881 96 angie.bauer@cbre.com Q1 214 Texas Office MarketView Nick Ianetta Research Coordinator, Austin +1 512 499 4939 nicholas.ianetta@cbre.com Veronica Gonzales Research Coordinator, San Antonio +1 21 253 619 veronica.gonzales@cbre.com FOLLOW CBRE GLOBAL RESEARCH AND CONSULTING This report was prepared by the CBRE U.S. Research Team which forms part of CBRE Global Research and Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. Additional U.S. research produced by Global Research and Consulting can be found at www.cbre.us/research. DISCLAIMER Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist. 5 214 CBRE, Inc.

Texas Office MarketView 4Q 213 Q4 213 CBRE Global Research and Consulting VACANCY 15.1% CONSTRUCTION 2,668,435 Sq. Ft. DELIVERIES 1,5,183 Sq. Ft. TRADE VOLUME 38% YoY UNEMPLOYMENT 5.8% JOB GROWTH 274,2 YoY Directional arrows based on change from the previous quarter. Data reflects market totals. MAJOR TEXAS OFFICE MARKETS COLLECTIVELY POSTED ANOTHER DROP IN VACANCY; ANNUAL NET ABSORPTION REACHES SEVEN-YEAR HIGH. San Austin Ft.Dallas Worth Houston Antonio Figure 2: Net Absorption, Sq. Ft. 's Figure 1: Quick Stats (as compared to Q3 213) 5, 4, Net Absorption Asking Rates 2, Under Construction 1, Vacancy Hot Topics Positive net absorption was once again reported for all major Texas office markets during Q4 213. 3, (1,) (2,) (3,) Sq. Ft. 27 28 Austin 29 Dallas/Ft. Worth 21 211 Houston 212 213 San Antonio Source: CBRE Research, Q4 213. Quoted rental rates showed differing patterns throughout the state as rates in some markets rose, while others declined. Even though not all markets saw a boost in construction activity, the collective Texas pipeline expanded by nearly one-third since Q3 213. Over the last 12 months, the pipeline has more than tripled. As of November 213, Texas has maintained positive annual growth for 44 consecutive months, adding 274,2 net jobs since the previous November. Unemployment for the state also dropped to 5.8%, its lowest point in nearly five years. Sales volume throughout Texas grew by 38% year-over-year, totaling approximately $1.4 billion for the past 12 months, based on trailing data from Real Capital Analytics. In December 213, Forbes featured all of the major Texas metro areas in their U.S. Regions to Watch in 214 list in the order of Austin (#1), San Antonio (#2), Houston (#4) and Dallas (#6). In migration patterns secured Texas the #1 rank of Most Inbound State once again, as the annual Allied Van Lines Magnet States report for 213 recently dubbed Texas this title for the ninth consecutive year. The Texas office market concluded 213 on a favorable note, both for the quarter and for the year, as its booming economy and employment front continues to propel key variables in the commercial real estate arena. As a result of its central location, robust population growth, diverse workforce and pro-business environment, Texas continues to attract both residents and businesses alike. The state continues to experience healthy employment growth and is a vital component of the nation s post-recession recovery, as the state has accounted for one-third of the country s payroll gains over the past decade. More recently, Texas gained 274,2 jobs throughout the twelve months ending November 213 and is projected to grow at a 2.8% annual rate throughout 214 and have the third fastest job growth in the nation as forecasted by Moody s Analytics. Appropriately, positive net absorption remains a widespread theme for the major metropolitan areas of Austin, Dallas/Fort Worth, Houston and San Antonio, totaling about 9.5 million sq. ft. for the year in just the office market alone. Additionally, falling vacancy, rising lease rates and accelerating construction activity continue to be prevalent themes for the vast majority of the state s top markets. As another undercurrent to the state s economic vitality, the housing market continues to improve at record-breaking strength. After hitting a historical high of $6.8 billion in July 213, sales volume cooled in typical fashion for the winter months, posting $4.8 billion in December 213 and $13.8 billion for the quarter based on data from the Real Estate Center at Texas A&M University. Sales volume outperformed the previous two years for every month of 213. From an annual perspective, Texas home sales totaled over $62 billion for 213, outpacing 212 by 27% and 211 by 54%. At year-end 213, the inventory level is at the lowest point on record (since 199) at 3.4 months supply. Additionally, Texas continues to show improving foreclosure metrics and had one of the most significant decreases in bank repossessions for 213, down 56% from 212, according to data released by RealtyTrac. As the state s population approaches 27 million people, Texas holds its notoriety for being fastgrowing and has dominated the nation in population growth. Over the past decade, the number of Texas residents has increased by nearly 4.3 million and is projected to house as many as 55.2 million residents by 25 if these migration patterns continue. From a metro area perspective, Houston and Dallas/Fort Worth had more growth throughout the past decade than any of the nation s other 365 metro areas, each with expansions of about 1.2 million new residents. As the only state in the U.S. that has three cities of over one million people (Houston, Dallas and San Antonio), each metro area contributes to the state s industry diversity in a unique way. Houston is a global hub for the thriving energy industry with one of the busiest ports in the country and a significant biomedical research and aerospace presence. Dallas s central location makes it a key financial and logistics hub, while also having strong concentrations in telecommunications and manufacturing. San Antonio holds much of its economic base in the tourism, health, and biotech industries, but has also experienced strong and growing activity related to exploration and production in the Eagle Ford shale. Austin is a hub for high-tech activity, including semiconductor manufacturing and software. 214, CBRE, Inc.

OFFICE FOURTH QUARTER MARKETVIEW Q4 213 Texas Office MarketView Figure 3: Market Snapshot Market RBA Available Sublease Sq. Ft. Total Available Space Sq. Ft. Total Vacant Space Sq. Ft. Vacancy Absorption Net Sq. Ft. Average Annual Gross Asking Rates (Per Sq. Ft.) Market Average Class A Class B Delivered Buildings Sq. Ft. Construction Under Construction Sq. Ft. AUSTIN 42,444,966 662,445 6,919,831 5,151,719 12.1% 25,463 $28.15 $33.32 $21.8 64,459 1,366,682 DALLAS/FT. WORTH 225,51,521 4,294,633 49,33,128 4,69,177 18.% 436,746 $19.85 $23.64 $17.49 185,841 5,68,47 HOUSTON 193,551,155 4,158,634 26,986,51 22,827,417 11.8% 1,343,85 $24.62 $35.52 $21.84 756,383 14,233,76 SAN ANTONIO 27,151,91 422,434 6,7,69 5,174,42 19.1% 13,484 $19.82 $24.9 $19.36 43,5 Source: CBRE Research, Q4 213. Figure 4: Unemployment Rates 1% 9% 8% 7% 6% 5% 4% 3% 2% 2 21 22 23 24 25 26 27 28 29 21 211 212 213 Ausn Dallas/Ft. Worth Houston San Antonio Texas US Source: Bureau of Labor Statistics, Metro Areas, Not Seasonally Adjusted, Annual Rates, December 213. ECONOMIC CONDITIONS/DEMOGRAPHICS Since November 212, the Texas unemployment rate has dropped from 6.% to 5.8%, the lowest rate for the state in nearly five years as it continues to outperform the nation. On a year-over-year basis, the seasonally adjusted annual job growth rate for the state was 2.5%, a pace that has either been met or exceeded since January 212 according to the Texas Workforce Commission. Additionally, Texas has added nearly 274,2 nonagricultural jobs over the past year, for an employment total of nearly 11.3 million at the end of November 213. The Trade, Transportation & Utilities supersector outpaced all other major industries in monthly job gains for November 213, adding an estimated 22,6 new jobs and marking the largest monthly increase in the history of its series for Texas. In terms of annual industry growth, the Professional & Business Services supersector recorded the strongest job gains with 79,7 jobs added, resulting in a 5.6% yearly growth rate. The Lone Star State was one of the first states to return to its pre-recession employment peak in 211, and continues to exceed that level as it has consistently registered job gains for 44 months. 2 INDUSTRY Austin Dallas Ft. Worth Houston San Antonio Texas Mining, Logging & Constr. 45.9 117.6 63.6 292.7 45.7 898.9 Manufacturing 51.2 161.7 98.8 253.1 45.9 872.9 Whsl. & Retail Trade 142.7 364.1 149.6 453.7 133.5 1,848.3 Transp., Whs. & Utilities 14.5 78.5 67.3 134.9 22.8 456.7 Information 22.8 65. 13.5 33.1 21.1 25.6 Financial Activities 46.3 2. 55.2 14. 7.4 672.7 Prof. & Bus. Services 138.2 4.9 19.5 428.5 111.8 1,55.3 Educ. & Health Services 1.5 27.4 122.9 347.1 136.9 1,517.4 Leisure & Hosp. Services 97. 212. 15.3 27.3 19.2 1,136.4 Other Services 36.4 75.8 33.6 93.6 33.8 387.5 Government 168.4 271.6 126. 382.4 166.1 1,845.2 Total Nonfarm Employment 863.9 2217.6 945.3 2829.4 897.2 11,346.9 Source: Bureau of Labor Statistics, December 213. 214 CBRE, Inc.

OFFICE FOURTH QUARTER MARKETVIEW Figure 6: Vacancy 26% 24% 22% 2% 18% 16% 14% 12% 1% 26 27 28 29 21 211 212 213 Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q4 213. Figure 7: Lease Rates, Overall (Gross, Annual Avg. Asking, Per Sq. Ft.) $3 VACANCY Office vacancy in Texas continues to be driven down by sustained positive absorption, fueled by prolonged demand in most of the state s largest markets. Total net absorption for the quarter was positive and exceeded two million square feet, a reduced amount since last quarter, but this boosts the annual total to nearly 1 million sq. ft. of positive net absorption when combined with the previous three quarters. This marks the highest year of annual absorption for Texas since 26, with Houston and Dallas accounting for 52% and 32% of the four-market total, respectively. Collective vacancy for the state shrunk by another 2 basis points (bps) over the quarter and now sits at 15.1%. Since the beginning of last year, the aggregate vacancy for the four markets has dropped by 22 bps and is expected to continue this declining trend. The Austin market in particular has improved substantially with vacancy now well below its pre-recession low, while Houston is nearing its previous vacancy. Q4 213 Texas Office MarketView $28 $26 $24 $22 $2 $18 $16 26 27 28 29 21 211 212 213 Per Sq. Ft. Annually Austin Dallas/Ft. Worth Houston San Antonio Source: CBRE Research, Q4 213. 's Figure 8: Construction Delivered (Sq. Ft.) 6, 5, 4, 3, 2, 1, Sq. Ft. Source: CBRE Research, Q4 213. 27 28 29 21 211 212 213 Austin Dallas/Ft. Worth Houston San Antonio LEASE RATES, OVERALL As falling vacancy continues to put upward pressure on rental rates, the quad-market average for quoted lease rates witnessed another uptick in Q4 213, averaging $23.11 per sq. ft. and up by $.33 per sq. ft. from the previous quarter. Throughout the last 12 months, this average has climbed by more than 6% percent. Across Texas, the spread for average lease rates is currently $8.33 per sq. ft. and narrowing, interpolated by Austin at $28.15 per sq. ft. on the high-end and San Antonio at $19.82 per sq. ft. on the low end. Asking rates are expected to continue this rising trend while supply is still constrained due to the slow churn of new speculative inventory. CONSTRUCTION The construction pipeline picked up momentum once again over Q4 213, expanding by almost 4.5 million sq. ft. and exceeding 2 million sq. ft. in total projects actively under construction. This represents an increase of nearly onethird in a single quarter and more than triple the amount of pipeline activity since year-end 212. Deliveries cooled down over the quarter with just over one million sq. ft. of new product coming to market, however, new completions for the year added up to nearly 5.5 million sq. ft., which is over five times the amount of completions introduced in 212. Houston continues to have the most active office construction pipeline in the state, now with over 14 million sq. ft. of projects in progress, while Dallas/Fort Worth constitutes the majority of the remaining share with more than five million sq. ft. According to the 214 Construction Outlook Survey conducted by The Associated General Contractors of America, the majority of contractors surveyed expect dollar volume of office projects to yield a higher amount in 214. 3 214 CBRE, Inc.

OFFICE FOURTH QUARTER MARKETVIEW Q4 213 Texas Office MarketView Figure 9: Average Price Per Sq. Ft. $23 $21 $19 $17 $15 $13 $11 $9 $7 $5 21 22 23 24 25 26 27 28 29 21 211 212 213 Figure 1: Sales Volume 's 6,, 5,, 4,, 3,, 2,, 1,, 21 22 23 24 25 26 27 28 29 21 211 212 213 Austin Dallas/Ft Worth Houston San Antonio Source: Real Capital Analytics, Q4 213. Source: Real Capital Analytics, Q4 213. Austin Dallas/Ft Worth Houston San Antonio Texas continued to prove its validity as a desirable investment option as it rounded out Q4 213 with 38% year-over-year growth in sales volume, according to trailing 12-month data from Real Capital Analytics (RCA). This growth equates to nearly $1.4 billion in transactions and outpaces the North American annual growth rate of 22% with $97.6 billion in sales volume. The 12-month trailing price per sq. ft. averaged $188, a 7% increase from last year, accompanied by falling cap rates, which averaged 7.1% for the prior 12 months and down by about 3 bps. Pricing and cap rate figures are based on well-qualified deals that have been confirmed, approximated or assumed by local professionals and gathered by RCA. 213 has seen a shift in capital flow for Texas as REITs have become the predominant buyer type instead of the private buyer majority from last year, based on annual buyer type data from RCA. Figure 11: Top Lease Transactions Market Sq. Ft. Tenant Address Submarket AUSTIN 96, Spiceworks 37 San Clemente Southwest DALLAS/FT. WORTH 37, Santander 161 Elm St. Dallas CBD HOUSTON 581, Statoil City West Place 2 & 4 Westchase SAN ANTONIO *38,931 University of Phoenix 82 W IH-1 Northwest *Renewal ** Expansion Figure 12: Top Sale Transactions 4 Market Sq. Ft. Tenant Address Submarket AUSTIN 445,641 Smith Management, LLC 342 Executive Center Dr. Northwest DALLAS/FT. WORTH 1,35,267 Ashkenazy Acquisition Corporation Barrow Street Capital 2711 N Haskell Ave. Central Expressway HOUSTON 1,168,85 CBRE Global Investors 5555 San Felipe St. West Loop SAN ANTONIO 618,17 Cole RE Investments 191 Ridgewood Pkwy. North Central Source: CBRE Research, Q4 213. 214 CBRE, Inc.

OFFICE FOURTH QUARTER MARKETVIEW CONTACTS For more information about this Texas Office MarketView, please contact: TEXAS RESEARCH Lynn Cirillo Research Operations Manager, TX, OK, NE CBRE Americas Research 28 Post Oak, Suite 23 Houston, TX 7756 lynn.cirillo@cbre.com Lauren Paris Senior Research Analyst CBRE Dallas Research 21 McKinney, Suite 7 Dallas, TX 7521 +1 214 979 6587 lauren.paris@cbre.com Q4 213 Texas Office MarketView Nick Ianetta Research Coordinator, Austin +1 512 499 4939 nicholas.ianetta@cbre.com Angie Bauer Research Analyst, Houston +1 713 881 96 angie.bauer@cbre.com Veronica Gonzales Research Coordinator, San Antonio +1 21 253 619 veronica.gonzales@cbre.com +FOLLOW US GOOGLE+ FACEBOOK TWITTER GLOBAL RESEARCH AND CONSULTING This report was prepared by the CBRE U.S. Research Team which forms part of CBRE Global Research and Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. DISCLAIMER Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist. 5 214 CBRE, Inc.

Texas Office, Q New supply and demand set a high bar for the Lone Star in 2015