National Presence. Local Focus

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1 METROPOLITAN DC MARKET OVERVIEW Q 15 OVERALL MARKET SUMMARY The Washington, DC Metropolitan commercial real estate market is comprised of approximately 11. million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. The total vacancy rate decreased to 15.% in the second quarter, down from 15.% at the end of the first quarter. The market recorded 73,97 square feet of net absorption, a substantial improvement from the approximate -1. million square feet absorbed in the previous quarter. Leasing activity totaled. million square feet in transactions signed during the second quarter, with Washington, DC and Northern Virginia contributing % of that total. The largest lease executed was a renewal signed by Dickstein Shapiro for approximately, square feet in the CBD submarket of Washington, DC. Two buildings completed construction in the second quarter ( DC, VA, MD), totaling 135,39 square feet and were 35% leased. There were twenty-nine sale transactions in the second quarter, comprised of 5. million square feet and totaled $.3 billion. Average asking rental rates ticked up $. to $35.39 per square foot, Full Service. From May 1 to May 15 employment in the DC Metropolitan area had a net increase of 57, jobs representing 1.% growth, while the unemployment rate decreased to.7%. Direct Vacancy Total Vacancy Total Net Leasing Activity DC 1.3% 1.% 155,5 SF. M SF VA 1.% 17.% -91,7 SF 5.5 M SF MD 1.7% 17.%,71 SF 1.5 M SF Metro Area 1.9% 15.% -9,79 SF 11. M SF OUTLOOK Arrows reflect differences from 1Q 15 Arrows reflect differences from YTD Q 15 totals The Washington, DC Metropolitan market posted a strong second quarter with vacancy rates decreasing in DC and Northern Virginia, while all three markets (DC, VA, MD) posted positive absorption. The regional economy is growing slowly as new job growth ticks up and the unemployment rate continues to decrease. The private sector should drive employment for the region, while the federal workforce continues to decrease. Metro DC remains a tenant s market with an abundance of space available. Aggressive landlords will continue to offer generous concessions (TI Allowance and free rent); and perform renovations/ upgrade amenities, if possible, on their buildings to remain competitive. Lease renewals should continue to be among the largest leases executed for both the private and public sectors. In general, private sector tenants are expected to continue to maximize space efficiencies; while the GSA continues to reduce the federal footprint. As more space is returned to the market through downsizing (by larger law firms, or the GSA) or by new deliveries, expect an uptick in vacancy and a decrease in net absorption. A total of.5 million square feet is currently under construction, with 1.3 million square feet scheduled to deliver by the end of 15. Sales velocity is expected to remain strong in DC and Northern Virginia, as both national and foreign investors pursue core assets. 11 CONSTITUTION AVENUE SUITE 35 EAST WASHINGTON, DC WILSON BOULEVARD SUITE ARLINGTON, VA

2 WASHINGTON, DC Q 15 MARKET SUMMARY The Washington, DC office market consists of 7 buildings over 5, square feet, totaling approximately 1.7 million square feet of rentable space. As of June 15, the unemployment rate for the District of Columbia decreased to 7.3%, while the Washington, DC metropolitan area decreased to.7%. The national unemployment rate decreased to 5.3%, with 7, new jobs created in the second quarter. The largest lease transaction this quarter was a renewal by Dickstein Shapiro for approximately, square feet at 15 Eye Street, NW - International Square 3. The GSA signed the largest public sector transaction of the quarter with a 1,-square-foot renewal for the Department of Health and Human Services (HHS) at 37 L Enfant Plaza, SW. There were twelve sale transactions in DC, totaling approximately $1.5 billion. The largest sale was a 9% partial interest transfer of seven Brookfield Office Properties buildings, trading for $1. million ($ psf). Two buildings broke ground this quarter, and 5 Massachusetts Avenue, NW, part of the Capitol Crossing development project in the Capitol Hill submarket. VACANCY RATE The total vacancy rate in the District decreased to 1.% at the end of the second quarter, totaling approximately 15.5 million square feet. The Class A total vacancy rate decreased to 11.7%, while Class B total vacancy decreased to 9.%. Direct Vacancy Total Vacancy Net Leasing Activity Percent Pre-Leased Asking Rental Rates (Full Service) Q 15 1Q 15 Q 1 1.3% 1.% 1.% 1.% 11.1% 11.% 1,1 sf -15, sf -37,9 sf 1.9 m sf.9 m sf. m sf. m sf 1.9 m sf 1. m sf 5% 3% % $5. $9.97 $9.99 Sublet vacancy decreased to.5% at the end of the second quarter, totaling approximately 79, square feet. (SF) 111, 7, 11 CONSTITUTION AVENUE SUITE 35 EAST WASHINGTON, DC WILSON BOULEVARD SUITE ARLINGTON, VA

3 WASHINGTON, DC QUARTERLY OVERVIEW Q 15 ABSORPTION AND GROSS LEASING Net Vacancy Rate The Washington, DC market recorded 1,1 square feet of net absorption in the second quarter, for a total of 155,5 square feet absorbed YTD 15. The 1-year average for net absorption in the District is 1.5 million square feet absorbed per year. Contributing to the positive absorption this quarter was Norton Rose Fulbright moving into 5,31 square feet at 799 9th Street, NW (relocating from 1 Pennsylvania Avenue, NW). The Central Business District (CBD) submarket posted 5,7 square feet of net absorption in the second quarter, up from the -13,97 square feet absorbed in the first quarter. The East End submarket posted 1,1 square feet of net absorption in the second quarter, up from the 7,79 square feet absorbed in the first quarter. Leasing activity in DC decreased with approximately 1.9 million square feet in the second quarter, down 3% from the previous quarter. A total of. million square feet has been leased YTD 15; the 1-year average for leasing in the District is 9.1 million square feet leased annually '5 ' '7 ' '9 '1 '1 '1 Net Total Vacancy Rate The largest of the Top Ten Leases signed this quarter was for, square feet in the CBD submarket; all other leases in the Top Ten ranged between 17, to 3, square feet. Six out of the ten largest leases were new transactions. '5 ' '7 ' '9 '1 '1 '1 CONSTRUCTION Leasing Activity by Year A total of nine buildings were under construction in the DC market at the end of the second quarter, totaling approximately. million square feet and 5% pre-leased Capitol Crossing, a.-million-square-foot speculative development in the Capitol Hill submarket, officially broke ground in the second quarter. Comprised of four office and one multifamily building, Capitol Crossing will be built above I-395 via a platform. Breaking ground this quarter were Massachusetts Avenue, NW (9,99 sf, % pre-leased) and 5 Massachusetts Avenue, NW (559,91 sf, % pre-leased). Both buildings are scheduled for completion in the first quarter '5 ' '7 ' '9 '1 '1 '1

4 WASHINGTON, DC QUARTERLY OVERVIEW Q 15 CONSTRUCTION (CONT.) Buildings scheduled to deliver in 15 include; th Street, SW (3, sf, % pre-leased), 1 Massachusetts Avenue, NW (7, sf, 7% pre-leased to Arnold & Porter), and 9 1th Street, NW (17, sf, % pre-leased to Miller & Chevalier). Scheduled to deliver in 1 are N. Capitol Street, NW (, sf, % pre-leased) and 1 F Street, NW (9,55 sf, 7% pre-leased); while Massachusetts Avenue, NW (1,17 sf, 1% pre-leased to Venable) and Maine Avenue, SW (1, sf, % pre-leased) are scheduled to deliver in M Street, NW is currently under a full building renovation. The renovations, scheduled for completion in the first quarter 1, include adding one new floor and an additional 55, square feet of space; increasing the total rentable area of the building to, square feet. At the end of the second quarter the building was 17% leased to Bracewell & Giuliani. Only 111, square feet has delivered in the first half of 15, with an additional 97, square feet expected to deliver in the remainder of 15. The 1-year average for new inventory added to the District is. million square feet per year. OUTLOOK Sales Volume ($ Billions) '5 ' Sales Volume By Year '7 ' '9 Second Quarter Vacant Space Available & Vacancy Rate By Building Class % 9.% '1 '1.% ' (%) of Building Class Vacant The DC market is expected to remain relatively weak through 15 as vacancy is expected to tick upwards, while net absorption and asking rents remain flat. A B C Expect the GSA to execute short term lease renewals and rightsize federal agencies through space consolidations; while vacating private sector buildings for federally owned buildings when possible. The pre-leasing of buildings currently under construction, or soon to break ground, in the core submarkets of the CBD and East End should remain strong as tenants, especially law firms, continue the trend of flight to quality. Lease renewals, both GSA and private sector, are expected to drive leasing activity. The market should remain a tenant s market as landlords continue to offer generous concessions (TI Allowance and rent abatement). For More Information, Please Contact: John Marvin Jones jmjones@lpc.com Ed Gilpin egilpin@lpc.com Adam Biberaj abiberaj@lpc.com Elaine Clancy eclancy@lpc.cpm Bob Hines rhines@lpc.com John Olson jeolson@lpc.com Terry Amling tamling@lpc.com Joe Mehok jmehok@lpc.com

5 WASHINGTON, DC TOP SALES Q th St, NW, 75 9th St, NW, 15 Conn. Ave, NW, 5 Mass. Ave, NW, 1 K St, NW, 1 K St, NW, 77 K St, NE - Brookfield Portfolio Submarket: CBD, East End, NoMa Date Sold: June 15 Price: $1,19,53 PPSF: $ Buyer: AustralianSuper Seller: Brookfield Office Properties Class: A & B Leased: 95.1% Notes: 9% Partial Interest Transfer, 7-building portfolio sale 111 K St, NW Submarket: CBD Date Sold: June 15 Price: $,5, PPSF: $ Cap Rate: 5.1% Buyer: UBS Realty Investors LLC Seller: Mitsubishi Estate New York & The Rockefeller Group Class: A Leased: 95.% 135 & 131 G St, NW Submarket: East End Date Sold: June 15 Price: $,, PPSF: $51 Buyer: Westbrook Partners Seller: TIER REIT Class: A Leased:.1% Notes: 9% Partial Interest Transfer, -building portfolio sale 175 K St, NW Submarket: CBD Date Sold: May 15 Price: $115,, PPSF: $9 Cap Rate: 5.% Buyer: Mirae Asset Global Investments Seller: Sumitomo Corporation of America Class: B Leased: 97.%

6 WASHINGTON, DC TOP SALES Q E St, NW - Rubicon NGP Submarket: East End Date Sold: June 15 Price: $3,5, PPSF: $ Buyer: Nakash Brothers Realty Seller: Princeton Holdings & The Bluestone Group Class: B Leased: 7.9% 5 H St, NE Submarket: NoMa Date Sold: June 15 Price: $51,, PPSF: $7 Cap Rate: 5.57% Buyer: Intercontinental Real Estate Corporation Seller: Jair Lynch Development Partners Class: B Leased: 1% 11 19th St, NW Submarket: CBD Date Sold: June 15 Price: $,5, PPSF: $573 Cap Rate: 3.97% Buyer: Rockrose Development Corporation Seller: The Davis Companies & American Real Estate Partners Class: A Leased:.%

7 WASHINGTON, DC TOP TEN LEASES Q 15 In the second quarter 15, six of the Top Ten Leases executed were new transactions, three were renewals, and one sublease. Three of the top leases signed this quarter exceeded 1, square feet. The largest private sector lease signed this quarter was a renewal by Dickstein Shapiro for approximately, square feet at 15 Eye Street, NW - International Square 3. This renewal extends Dickstein beyond their original expiration, however, the tenant will also be giving back roughly, square feet. The largest public sector lease (and the only one in the Top Ten) was a one-year renewal for 1, square feet signed by the GSA for the Department of Health and Human Services (HHS) at 37 L Enfant Plaza, SW. Aside from Dickstein, other law firms executing leases this quarter include; Kirkland & Ellis signing a pre-lease for 17, square feet at 131 Pennsylvania Avenue, NW (a redevelopment scheduled to break ground first quarter 1), Bracewell & Giuliani signing for 9,9 square feet at 1 M Street, NW (renovations are expected to be completed first quarter 1), and Brownstein Hyatt signing a sublease for 3, square feet at 1155 F Street, NW (Simpson Thatcher s current space). Leasing activity decreased with approximately 1.9 million square feet signed in the second quarter, down from the.9 million square feet leased in the first quarter, representing a 3% decrease in leasing activity. 15 EYE ST, NW 131 PENNSYLVANIA AVE, NW 37 L ENFANT PLZ, SW 15 NEW YORK AVE, NW 199 PENNSYLVANIA AVE, NW Dickstein Shapiro, sf Renewal/Contraction (Downsized, sf) Kirkland & Ellis 17, sf New/Pre-lease GSA - Dept. of Health and Human Services (HHS) 1, sf Renewal Living Social 57, sf New APCO Worldwide 5,53 sf New 11 CONSTITUTION AVE, NW 1 M ST, NW 11 F ST, NW 955 L ENFANT PLZ, SW 1155 F ST, NW American Council of Life Insurers (ACLI) 5,7 sf Renewal/Contraction (Downsized 15,95 sf) Bracewell & Giuliani 9,9 sf New Charles River Associates 3, sf New Veracity Engineering 3, sf New Brownstein Hyatt Farber Schreck 3, sf Sublease

8 CBD MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 177,1 SF/YR DELIVERIES: 3,19 SF/YR LEASING ACTIVITY: 3.1 MILLION SF/YR INVENTORY:. MILLION SF DIRECT VACANCY:.9% TOTAL VACANCY: 9.7% YTD 15 ABSORPTION: -,31 SF UNDER CONSTRUCTION: 17, SF % PRE-LEASED: 5.% YTD 15 DELIVERIES: SF 5: $39.7 PSF 1: $51. PSF YTD 15: $5.9 PSF The total vacancy rate decreased to 9.7% at the end of the second quarter, down from 9.% at the end of the first quarter. The CBD market recorded 5,7 square feet of net absorption in the second quarter, a significant increase from the -13,97 square feet absorbed in the first quarter. Contributing to the positive absorption includes the Daniel Morgan Academy moving into 1, square feet at 1 L Street, NW. Leasing activity decreased to 9,3 square feet in the second quarter, down from the 7,53 square feet leased in the previous quarter. Tenants executing leases this quarter include Dickstein Shapiro renewing approximately, square feet at 15 Eye Street, NW, Bracewell Giuliani signing for 9,9 square feet at 1 M Street, NW, and Steptoe & Johnson signing for 5,93 square feet of swing space at 1333 New Hampshire Avenue, NW. 111 K Street, NW sold to UBS Realty Investors from Mitsubishi Estate New York & The Rockefeller Group for $,5, ($ psf). The Class A property was 95.% leased at time of sale.

9 EAST END MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 5, SF/YR DELIVERIES: 57, SF/YR LEASING ACTIVITY: 3.5 MILLION SF/YR INVENTORY: 7. MILLION SF DIRECT VACANCY: 1.% TOTAL VACANCY: 1.7% YTD 15 ABSORPTION:,99 SF UNDER CONSTRUCTION: 97,79 SF % PRE-LEASED:.3% YTD 15 DELIVERIES: 111, SF 5: $3.1 PSF 1: $53.11 PSF YTD 15: $53. PSF The total vacancy rate decreased to 1.7% at the end of the second quarter, down from 11.1% at the end of the first quarter. The East End market recorded 1,1 square feet of net absorption in the second quarter, up from the 7,79 square feet absorbed in the first quarter. Contributing to the positive absorption includes Norton Rose Fulbright moving into 5,31 square feet at 799 9th Street, NW and The Raben Group moving into 11,5 square feet at 131 G Street, NW. Leasing activity decreased to 9,95 in the second quarter, down from the 1. million square feet leased in the previous quarter. Tenants executing leases this quarter include Kirkland & Ellis signing a pre-lease for 17, square feet at 131 Pennsylvania Avenue, NW, Living Social renewing 57, square feet at 15 New York Avenue, NW, and APCO Worldwide signing for 5,53 square feet at 199 Pennsylvania Avenue, NW. A 9% Partial Interest Transfer of 135 & 131 G Street, NW sold to Westbrook Partners from TIER REIT for $ million; 135 G Street sold for $15 million ($551 psf), while 131 G Street - The Colorado Building, sold for $5 million ($ psf).

10 CBD/EAST END CLASS A MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 77,9 SF/YR DELIVERIES: 91,15 SF/YR LEASING ACTIVITY:. MILLION SF/YR INVENTORY: 59.3 MILLION SF DIRECT VACANCY: 1.% TOTAL VACANCY: 11.% YTD 15 ABSORPTION: -5,5 SF UNDER CONSTRUCTION: 1.1 MILLION SF % PRE-LEASED:.5% YTD 15 DELIVERIES: 111, SF 5: $. PSF 1: $5.3 PSF YTD 15: $5.1 PSF The total vacancy rate in the CBD/East End Class A market decreased to 11.% at the end of second quarter, down from 11.% at the end of the first quarter. The Class A market recorded 7,55 square feet of net absorption in the second quarter, a significant increase from the -13, square feet absorbed in the first quarter. Contributing to the positive absorption includes Major, Lindsey & Africa moving into 1,51 square feet at 13th Street, NW. Leasing activity decreased in the second quarter to 1.1 million square feet, down from the 1. million square feet leased in the previous quarter. Tenants executing leases this quarter include Cozen O Connor renewing,95 square feet at 17 Eye Street, NW, the Solar Energy Industry Association signing a sublease for, square feet at 1th Street, NW, and Huron Consulting Services signing for,7 square feet at K Street, NW th Street, NW sold to Rockrose Development Corporation from The Davis Companies & American Real Estate Partners for $.5 million ($573 psf). Renovated in 13, the building was.% leased at time of sale.

11 CBD/EAST END CLASS B MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: -7,99 SF/YR DELIVERIES: SF/YR LEASING ACTIVITY:. MILLION SF/YR INVENTORY: 3. MILLION SF DIRECT VACANCY:.% TOTAL VACANCY:.3% YTD 15 ABSORPTION: 1,3 SF UNDER CONSTRUCTION: SF % PRE-LEASED: % YTD 15 DELIVERIES: SF 5: $35.5 PSF 1: $3. PSF YTD 15: $3.13 PSF The total vacancy rate in the CBD/East End Class B market decreased to.3% at the end of the second quarter, down from.% at the end of the first quarter. The Class B market recorded 15, square feet of net absorption in the second quarter, up from the 7,9 square feet absorbed in the first quarter. Contributing to the positive absorption include Rock Creek Strategic Marketing moving into 1, square feet at 1 Massachusetts Avenue, NW. Leasing activity decreased to 5,5 square feet in the second quarter, down from the 55,71 square feet leased in the previous quarter. Tenants executing leases this quarter include TrackMaven signing for,7 square feet at 1 Thomas Circle, NW, the International Executive Services Corps (IESC) renewing 15,51 square feet at 19 M Street, NW, and Economic Consulting Services (ECS) renewing 11,5 square feet at 1 L Street, NW. 175 K Street, NW sold to Mirae Asset Global Investments from Sumitomo Corporation of America for $115 million (9 psf). Built in 197, the building was 97.% leased at time of sale.

12 SOUTHWEST MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION:, SF/YR DELIVERIES: 315,77 SF/YR LEASING ACTIVITY:,73 SF/YR INVENTORY: 11.9 MILLION SF DIRECT VACANCY:.9% TOTAL VACANCY: 9.% YTD 15 ABSORPTION: -,57 SF UNDER CONSTRUCTION: 55, SF % PRE-LEASED: % YTD 15 DELIVERIES: SF 5: $.17 PSF 1: $.5 PSF YTD 15: $.93 PSF The total vacancy rate remained flat at 9.% at the end of the second quarter. The Southwest market recorded 5,13 square feet of net absorption in the second quarter, a slight improvement from the -7,71 square feet absorbed in the first quarter. Leasing activity increased in the second quarter to 3, square feet, up from the,53 square feet leased in the previous quarter. Tenants executing leases this quarter include the GSA - U.S. Department of Health and Human Services (HHS) renewing 1, square feet and the Battelle Memorial Institute renewing 11, square feet, both at 37 L Enfant Plaza, SW and Veracity Engineering signing for 3, square feet at 955 L Enfant Plaza, SW (relocating from Maryland Ave, SW). Two buildings are currently under construction; th Street, SW (3, sf, % pre-leased) and Maine Avenue, SW (1, sf, % pre-leased).

13 WEST END / GEORGETOWN MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 1,5 SF/YR DELIVERIES:,71 SF/YR LEASING ACTIVITY:,1 SF/YR INVENTORY: 7.5 MILLION SF DIRECT VACANCY: 9.% TOTAL VACANCY: 9.5% YTD 15 ABSORPTION: 39,3 SF UNDER CONSTRUCTION: SF % PRE-LEASED: % YTD 15 DELIVERIES: SF 5: $. PSF 1: $.99 PSF YTD 15: $.7 PSF The total vacancy rate decreased to 9.5% at the end of the second quarter, a significant drop from 1.7% at the end of the first quarter. The West End/Georgetown market recorded 9,75 square feet of net absorption in the second quarter, up substantially from the -51,17 square feet absorbed in the first quarter. Contributing to the positive absorption includes Cogent Communications moving into 3,117 square feet at 5 N Street, NW and Treliant Risk Advisors moving into 3,9 square feet at 155 3rd Street, NW (relocating from 3 N St, NW). Leasing activity decreased in the second quarter to 5,7 square feet, down from the 93,59 square feet leased in the previous quarter. Tenants executing leases this quarter include Garvey Schubert Barer renewing 1,137 square feet and Regus signing for 1,9 square feet, both at 1 Potomac Street, NW and Atlantic Media signing for 7,13 square feet at New Hampshire Avenue, NW.

14 CAPITOL HILL / NOMA MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Vacancy 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 5,99 SF/YR DELIVERIES: 591,39 SF/YR LEASING ACTIVITY: 37,39 SF/YR INVENTORY: 15.7 MILLION SF DIRECT VACANCY: 13.% TOTAL VACANCY: 13.3% YTD 15 ABSORPTION: 53,7 SF UNDER CONSTRUCTION: 1.3 MILLION SF % PRE-LEASED: % YTD 15 DELIVERIES: SF 5: $37.53 PSF 1: $5. PSF YTD 15: $5.5 PSF The total vacancy rate increased to 13.3% at the end of the second quarter, up from 1.9% at the end of the first quarter. The Capitol Hill/NoMa market recorded -13,53 square feet of net absorption in the second quarter, a notable drop from the,37 square feet absorbed in the first quarter. Contributing to the negative absorption includes State Net vacating 11,79 square feet at - N. Capitol Street, NW. Leasing activity increased to 13,75 square feet in the second quarter, up from the 3,931 square feet leased in the previous quarter. Tenants executing leases this quarter include the American Council of Life Insurers renewing 5,7 square feet at 11 Constitution Avenue, NW (downsizing 15,95 square feet). The construction of Capitol Crossing officially started in the second quarter with & 5 Massachusetts Avenue, NW breaking ground. The two buildings total 1,5,917 square feet and are scheduled for completion in the first quarter 1. 5 H Street, NE sold to Intercontinental Real Estate Corporation from Jair Lynch for $51. million ($7 psf).

15 CAPITOL RIVERFRONT MARKET SPOTLIGHT Q '5 ' '7 ' '9 '1 '1 '1 Total Net '5 ' '7 ' '9 '1 '1 '1 Total Vacancy Rate 1 YEAR AVERAGES (5-1) TOTAL ABSORPTION: 9,7 SF/YR DELIVERIES: 5,97 SF/YR LEASING ACTIVITY: 7,93 SF/YR INVENTORY:.9 MILLION SF DIRECT VACANCY: 17.1% TOTAL VACANCY: 17.3% YTD 15 ABSORPTION: 9,13 SF UNDER CONSTRUCTION: SF % PRE-LEASED: % YTD 15 DELIVERIES: SF 5: $1. PSF 1: $.7 PSF YTD 15: $.3 PSF The total vacancy rate decreased to 17.3% at the end of the second quarter, down from 17.% at the end of the first quarter. The Capitol Riverfront market recorded 1,9 square feet of net absorption in the second quarter, an improvement from the -7,193 square feet absorbed in the first quarter. Contributing to the positive absorption includes Fincantieri Marine Group moving into 5,15 square feet at 55 M Street, SE and Grant Associates moving into 3,51 square feet at 1 Potomac Avenue, SE. Leasing activity decreased to 5, square feet in the second quarter, down from the 93,73 square feet leased in the previous quarter. Tenants executing leases this quarter include Tech-Marine Business, Inc. renewing and expanding into 1,37 square feet at 1 M Street, SE and Parsons Brinckerhoff signing for 11,3 square feet at 115 Half Street, SE.