Market Report MANHATTAN OFFICE 1Q Leasing Activity MSF. Absorption SF. Availability Rate 10.7% 0.7pp -0.7pp N/A. Average Asking Rent ($/SF/YR)

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1 Market Report MANHATTAN OFFICE Accelerating success. Quarter-to- Quarter Change Year-to- Year Change YTD 2015 ± % $ MANHATTAN Leasing Activity MSF Absorption SF Manhattan posted mixed results in 1Q 2015 as leasing activity slowed, availability increased, and absorption turned negative. Conversely, average asking rents continued to climb, some into record territory. Declines in Midtown South and Downtown caused a 1.8% drop in leasing from 4Q 2014 to 8.32 million square feet. Were this trend to continue for the full year, leasing would fall 11.0% below 2014 s million square feet. Yet, leasing activity for the sixth straight quarter remains above the rolling ten-year average and ten of Manhattan s 17 smaller submarkets had equal or stronger leasing as against 4Q While leases from Manhattan s FIRE (financial services, insurance and real estate) tenants represented the largest share of industry activity, the TAMI (tech, advertising, media and information services) sector continued to expand. Indeed, Publicis Groupe s 582,000 square foot renewal/expansion at 1675 Broadway was the single largest lease transaction. FIRE tenants comprised 40% of Manhattan s first quarter leasing activity (by square feet), followed by TAMI (22%) and professional services (17%). Met Life s 539,000 square foot renewal/expansion at 200 Park Avenue headed all FIRE leases and the Kirkland & Ellis 403,000 square foot renewal/expansion at 601 Lexington Avenue led among professional services tenant leases. At the end of the first quarter, Manhattan s availability rate was 10.7% up from 10.0% in 4Q 2014 and the highest quarterly jump in availability since 1Q This was mainly due to the addition of large blocks of space in both Midtown and Downtown, including nearly 1 million square feet at 28 Liberty Street. Manhattan s negative 1.42 million square feet of absorption ended six successive quarters of positive absorption between 3Q 2013 and 4Q ,321, % -30.1% 8,321,495 (1,421,333) -2,552,559-2,866,481 (1,421,333) Availability Rate 10.7% 0.7pp -0.7pp N/A Average Asking Rent ($/SF/YR) $ % 6.3% N/A Note: pp (percentage points) Despite the added inventory and slower leasing velocity, 1Q 2015 was the eighth uninterrupted quarter of rising average asking rents. Upwards re-pricing of existing available space, along with new construction with above average asking rents, combined to contribute to a 1.7% quarterly increase to $67.62/ square foot. Higher average asking rents occurred citywide. All three markets Midtown, Midtown South and Downtown and 13 of the 17 smaller submarkets saw increases. 2 Downtown s average asking rent at $55.00/ square foot broke the prior record set just at the end of last year. And, Midtown South set a new record average asking rent of $62.02/ square foot surpassing its previous all-time high from At $92.57/ square foot, the Plaza District maintained the highest average asking rent with pricing at trophy assets like 9 West 57th Street, 767 Fifth Avenue and 375 Park Avenue at double Midtown s average. Noteworthy, however, is the fact that three of the five submarkets with the topmost average asking rents are in Midtown South, not Midtown: Greenwich Village, Gramercy Park and Soho rank third, fourth and fifth, respectively. With this upsurge in average asking rents, the concession packages offered by landlords have become more substantial. Large tenant relocations with rental abatements longer than 12 months and tenant improvement allowances above $65.00/ square foot accounted for much of the growth. On a weighted per square foot basis, between 2012 and 2014, Manhattan s average free rent period went from 5.2 month to 9.5 months, while the average tenant allowance was up 60.3 % from $33.88/ square foot to $54.31/ square foot. By comparison, the average asking rent increased by 18.5% from $56.13/squarefootin2012to$66.52/squarefootattheendof On a net effective rent basis, there was only a 5.6% 1 Columbus Circle, Grand Central, Plaza District, U.N. Plaza, Greenwich Village, Hudson Square, Murray Hill, Soho, City Hall and Tribeca 2 Columbus Circle, Grand Central, Plaza District, Times Square, Chelsea, Gramercy Park, Greenwich Village, Hudson Square, Soho, Financial District, Insurance District, Tribeca and World Trade Center 1

2 growth in Manhattan s average asking rent from Notably, during, since most of the significant transactions were renewals or expansions, the size of these concession packages was reduced. The weighted rental abatement period decreased to 7.8 months while the tenant work allowance only nominally increased to $58.51/ square foot. Manhattan Overall Average Asking Rent and Overall Availability Rate Direct Availability Rate Sublease Availability Rate Overall Average Asking Rent Availability Rate (%) 14% 12% 10% 8% 6% 4% 2% 0% $80 $60 $40 $20 $0 Average Asking Rent ($/SF) Manhattan Overall Leasing Activity *Excludes deals under 5,000 SF Manhattan Leasing Activity 10 Year Average Square Feet (in Millions) Manhattan Concessions Tenant Allowance Free Rent (Months) $ $ $ Q $58.51 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $

3 Manhattan Office Market Report Manhattan Leasing Activity by Industry () *Excludes deals under 5,000 SF 9% 8% 15% 8% 2% By Number of Tenants 38% 11% 17% 4% 3% 4% By Square Footage 40% 20% 22% FIRE TAMI Professional Services Other Public Sector Consumer Goods/Retail Health Services Manhattan Leasing Activity by Size () *Excludes deals under 5,000 SF 18% 10% 5% 4% By Number of Deals 63% 14% 14% 13% By Share of Activity 37% 21% 5,000-14,999 SF 15,000-24,999 SF 25,000-49,999 SF 50,000-99,999 SF 100,000 SF+ Manhattan Available Blocks of Space # of Blocks < 25, ,895 Block Size Range (SF) 25,000-50,000 50, , , ,000 > 250, Total Availability (MSF) 3

4 Market Report MIDTOWN OFFICE Accelerating success. Quarter-to- Quarter Change Year-to- Year Change YTD 2015 ± % $ Leasing Activity MSF Absorption SF 4,911, % 7.8% 4,911,681 (425,710) -113, ,358 (425,710) Availability Rate 11.1% 0.4pp -0.7pp N/A Average Asking Rent ($/SF/YR) $ % 3.6% N/A Note: pp (percentage points) MIDTOWN Publicis Groupe s 582,000 square foot renewal/ expansion at 1675 Broadway and MetLife s 539,000 square foot renewal/expansion at 200 Park Avenue were the two largest transactions last quarter. At 4.91 million square feet, Midtown leasing outperformed both 4Q 2014 and 1Q As with Manhattan overall, FIRE tenants dominated leasing activity, with nearly 50% of all deals (by square feet), including MetLife s lease and the 199,000 square foot renewal/expansion by Fortress Investment Group at 1345 Avenue of the Americas. TAMI tenants also were a sizeable percentage of Midtown leasing at 26%. TAMI leasing was led by the Publicis Groupe deal as well as the 112,000 square foot relocation/expansion by Interpublic Group at 909 Third Avenue. TAMI s share exceeded the professional services sector which had 19% of all leasing. Significantly, none of Midtown s largest five leases were relocations to new space. Even though Publicis Groupe, MetLife and Kirkland & Ellis expanded at their respective locations, all were part of lease renewals. MetLife s transaction was actually a consolidation from 1095 Avenue of the Americas, 277 Park Avenue and Long Island City. Leasing in Midtown s Park Avenue corridor was particularly strong in the first quarter. Fiduciary Trust relocated from 600 Fifth Avenue to 280 Park Avenue for 126,000 square feet; Morgan Lewis & Bockius expanded by 100,000 square feet at 101 Park Avenue and PJT Partners leased 99,000 square feet also at 280 Park Avenue. These and other leases greater than 50,000 square feet closed in Midtown on Park Avenue, represented nearly one-fifth of all Midtown s leasing activity in. Midtown s average asking rent moved higher by 1.8%, quarter-to-quarter, to $76.15/ square foot. While the average is still 17.3% below its record $92.04/ square foot from 3Q 2008, it has added back over 30% from its Great Recession low of $58.38/ square foot in 2Q Theincreaseinaskingrentswaslargelytheresultof1.06 million square feet of newly available space being marketed at above average pricing. For example, following extensive building renovations, RXR Realty recently listed all 566,000 square feet at 75 Rockefeller Plaza at asking rents at or above $85.00/ square foot. Tenant downsizing through tighter space utilization also addedtosupplywith238,000squarefeetcomingtomarket at 12 East 49th Street from Hudson s Bay s consolidation Downtown and 183,000 square feet of new sublet space at 1411 Broadway as The Jones Group reduces its total footprint there. The additional inventory resulted in 426,000 square feet of negative absorption and a quarterly 0.4pp (percentage points) increase in the availability rate to 11.1%. This represents the second consecutive quarter of negative absorption following 312,000 square feet of negative absorption at the end of last year. By submarket, the greatest impact was to Times Square where the availability rate was up 2.0pp to 12.0% with 197,000 square feet of new sublet space from American Management Association at 1601 Broadway and the Jones Group block at 1411 Broadway. 4

5 Demand in Midtown will need to keep pace with this mounting supply as Midtown s historically dominant position in the Manhattan office market is challenged by new construction to the west in Hudson Yards/Manhattan West, to south at the World Trade Center and sustained high demand in Midtown South and Brooklyn. Midtown Overall Average Asking Rent and Overall Availability Rate 16% Direct Availability Rate Sublease Availability Rate Overall Average Asking Rent $100 Availability Rate (%) 14% 12% 10% 8% 6% 4% 2% $80 $60 $40 $20 Average Asking Rent ($/SF) 0% $0 Midtown Overall Leasing Activity *Excludes deals under 5,000 SF Midtown Leasing Activity 10 Year Average 6 5 Square Feet (in Millions)

6 Market Report MIDTOWN SOUTH OFFICE Accelerating success. Quarter-to- Quarter Change Year-to- Year Change YTD 2015 ± % $ MIDTOWN SOUTH Leasing Activity MSF Absorption SF 2,603, % -47.7% 2,603, ,444-74, , ,444 Availability Rate 7.7% -0.2pp -1.1pp N/A Average Asking Rent ($/SF/YR) Midtown South was the only market to finish strongly by almost all measures: The average asking rent reached $62.02/ square foot, an alltime high. It was, in fact, the 17th succeeding quarter of increasing average asking rents (the longest continuous period on record). $ % 11.7% N/A Note: pp (percentage points) Among the major TAMI deals were WebMD s 148,000 square foot relocation to 395 Hudson Street from 111 Eighth Avenue; the relocation by information services firm Markit Group from Midtown to 5 Manhattan West for 139,000 square feet and Facebook s 80,000 square foot expansion at 770 Broadway. But, FIRE tenants too were active in the area with 17% of all leasing, and led by OnDeck Capital s 79,000 square foot expansion at 1400 Broadway. A mix of new construction and the re-pricing of existing space were the two driving factors behind the rise in asking rents: At 860 Washington Street, the 114,000 square foot building is scheduled for completion this year with asking rents starting at $145.00/ square foot the highest ever for new construction in Midtown South. Trinity Real Estate upped the asking rent at 1 Hudson Square to $79.00/ square foot for its available 232,000 square foot block. L&L Holdings set the asking rent for the 102,000 square feet at 315 Park Avenue South in the $85.00-$99.00/ square foot range. In so doing, it helped to push Gramercy Park s average asking rent to $74.46/ square foot, a nearly 7% increase from 4Q14 and the biggest $/ square foot gain of any submarket last quarter. While Midtown South leasing activity decreased to 2.60 million squarefeet a11.5%declineascomparedto4q2014 Midtown South s appeal to a diverse tenant base has kept leasing activity above the rolling ten-year average for five of the past six quarters. TAMI tenants continue to fuel the demand in Midtown South with the second largest industry share at 20% (by square feet) last quarter but trailed the public sector at 23% primarily due to the City of New York s renewal/ expansion at 5 Manhattan West for 268,000 square feet. Due to solid demand, and despite a quarter-over-quarter drop in leasing velocity, the availability rate declined for the third consecutive quarter to 7.7%, the lowest since 3Q Absorption was positive at 855,000 square feet, the third such quarter of positive absorption. Tightening availability, especially for larger tenants, has the potential to threaten Midtown South s steady gains, at least in the short term. 10 Hudson Yards with 383,000 square feet of remaining space scheduled for completion in 2016 and the St. John s Terminal Building at 550 Washington Street are currently the only two existing buildings with more than 250,000 square feet of available contiguous space. But, 10 Hudson Yards is still under construction and subject to delay and the exact date of availability for the space at 550 Washington is pending the building s renovation/rebranding as Clarkson Square. Longer term, new construction in Hudson Yards/Manhattan West and in Chelsea will increase office inventory. More than 800,000 square feet is either under construction or has been proposed in Chelsea and over 14 million square feet in Hudson Yards/Manhattan West. 6

7 Midtown South Office Market Report Midtown South Overall Average Asking Rent and Overall Availability Rate Direct Availability Rate Sublease Availability Rate Overall Average Asking Rent 14% $70 12% $60 Availability Rate (%) 10% 8% 6% 4% $50 $40 $30 $20 Average Asking Rent ($/SF) 2% $10 0% $0 Midtown South Overall Leasing Activity *Excludes deals under 5,000 SF Midtown South Leasing Activity 10 Year Average 6 5 Square Feet (in Millions)

8 Market Report DOWNTOWN OFFICE Accelerating success. Quarter-to- Quarter Change Year-to- Year Change YTD 2015 ± % $ Leasing Activity MSF Absorption SF 806, % -65.9% 806,668 (1,851,067) -2,365,099-3,097,530 (1,851,067) Availability Rate 14.6% 2.9pp 0.2pp N/A Average Asking Rent ($/SF/YR) $ % 9.5% N/A Note: pp (percentage points) DOWNTOWN Downtown proved to be the most volatile of the three markets in : It broke its own previous all-time high average asking rent record ending the quarter at $55.00/ square foot with the addition of substantial blocks of premium priced space, mostly in the Financial District and World Trade Center submarkets. In the World Trade Center submarket, at 300 Vesey Street, CME Group is downsizing by 320,000 square feet by year s end. There, asking rents are 36.4% above the Downtown average. Also, American Express will vacate 299,000 square feet at 200 Vesey Street next year with asking rents for the most expensive floors at 14.6% above the average. In the Financial District, close to 1 million square feet formerly occupied by JPMorgan Chase was listed at 28 Liberty Street. The asking rent for the top floor was $95.00/ square foot. With this substantial additional inventory, the availability rate spiked to 14.6% from 11.7%; the highest single quarterly jump since 2011 when nearly three million square feet of space came to market from relocations out of the World Financial Center (now Brookfield Place). Absorption was negative (1.85 million square feet) last quarter for the first time since 2Q At 20 Broad Street, the 543,000 square foot New York Stock Exchange space is now being marketed and available in Even City Hall s availability rate (historically one of the lowest) was negatively affected when Sabey Data Center Properties listed 714,000 square feet at 375 Pearl Street for office and data center use. City Hall s availability rate was almost five-fold higher from 2.8% to 13.2%, quarter-over-quarter. Demand Downtown slowed significantly in the quarter and could not offset the sharp increase in supply. Downtown s 807,000 square feet of leasing was nearly half of 4Q 2014 and almost one third of that from a year ago, with only one lease signed for over 100,000 square feet. The majority of Downtown s leasing (by square feet) was to FIRE sector tenants: WeWork expanded Downtown with new leases at 85 Broad Street and 11 John Street for 235,000 square feet and 37,000 square feet, respectively; Ambac Assurance Corp. renewed its lease for 80,000 square feet at 1 State Street and Santander Bank leased 42,000 square feet at 200 Liberty Street. Professional services tenants represented 14% of the quarterly leasing activity with Namely s 42,000 square foot lease at 195 Broadway. TAMI tenants lagged with an 11% share. Asawhole,Downtownisinastrongerpositionthan2011 when it took three years to lease most of the 3 million square feet of newly added available space. Since then, the Fulton Center has opened; Brookfield Place s retail renovation project is now complete; four of the World Trade Center buildings have been rebuilt or are under construction and the World Trade Center Transportation Hub will be finished later this year. Condé Nast s commitment to relocate Downtown and additional tenant relocations there by Time Inc., GroupM, HarperCollins, Teach for America, The College Board, and MediaMath have strengthened Downtown s reputation as an office market with the ability to attract both its foundational FIRE companies and the developing TAMI sector. 8

9 Downtown Office Market Report Downtown Overall Average Asking Rent and Overall Availability Rate Direct Availability Rate Sublease Availability Rate Overall Average Asking Rent 18% $60 Availability Rate (%) 16% 14% 12% 10% 8% 6% 4% 2% $50 $40 $30 $20 $10 Average Asking Rent ($/SF) 0% $0 Downtown Overall Leasing Activity *Excludes deals under 5,000 SF Downtown Leasing Activity 10 Year Average 6 5 Square Feet (in Millions)

10 Manhattan Office Market Conclusion Despite some weakness this quarter, especially in Midtown and Downtown, Manhattan has almost fully recovered from Great Recession lows. The average asking rent has climbed 42.1% off its 3Q 2010 bottom of $47.58/ square foot. Downtown and Midtown South are at record high average asking rents. Manhattan s leasing activity during the past six quarters has surpassed its ten-year average and 26 million square feet of new office product, key to attracting and retaining a talented employee base, is under construction or in the pipeline in each of Manhattan s three main markets. Top Leases Submarket Address SF Leased Tenant Submarket Lease Type MIDTOWN 1675 Broadway 581,537 Publicis Groupe Columbus Circle 200 Park Avenue 539,299 MetLife Grand Central 601 Lexington Avenue 403,000 Kirkland & Ellis Plaza District Renewal / Expansion Renewal / Expansion Renewal / Expansion 5 Manhattan West 267,669 City of New York Penn Plaza / Garment Renewal / Expansion 395 Hudson Street 147,670 WebMD Hudson Square New Lease MIDTOWN SOUTH 5 Manhattan West 139,332 Markit Penn Plaza / Garment New Lease 85 Broad Street 234,879 WeWork Financial District New Lease 1 State Street 79,740 Ambac Assurance Corp. Financial District Renewal DOWNTOWN 200 Liberty Street 42,128 Santander Bank World Trade Center New Lease ECONOMIC INDICATORS GDP Gross Domestic Product CCI Consumer Confidence Index NYC Unemployment Rate $17,704 (4Q 2014) [in billions] Increase from 3Q (March 2015) Increase from February % (March 2015) Decrease from February 2015 Source: U.S. Department of Commerce, The Conference Board, New York State Department of Labor 10

11 Manhattan Market Overview Submarket Inventory Overall Availability Rate Leasing Activity (QTR) Net Absorption (QTR) Overall Average Asking Rent Class A Average Asking Rent Class B Average Asking Rent Midtown 234,039, % 4,911,681 (425,710) $76.15 $78.12 $56.29 Columbus Circle 32,858, % 1,026,399 (113,833) $65.40 $67.28 $51.08 Plaza District 84,779, % 2,140,648 49,131 $92.57 $93.95 $60.12 Times Square 58,669, % 322,797 (989,745) $75.11 $78.38 $58.56 Grand Central 54,332, % 1,421, ,494 $68.44 $69.24 $53.32 U.N. Plaza 3,398, % 0 40,243 $56.28 $57.02 $49.00 Midtown South 163,787, % 2,603, ,444 $62.02 $72.60 $63.97 Penn Plaza/Garment 58,625, % 1,141,550 (65,589) $54.89 $58.01 $57.22 Murray Hill 13,494, % 190, ,063 $54.86 $59.12 $54.45 Chelsea 39,970, % 431, ,479 $65.10 $90.00 $64.53 Gramercy Park 25,529, % 374, ,798 $73.83 $92.00 $73.60 Greenwich Village 5,653, % 104, ,814 $74.46 $95.66 $58.56 Soho 7,508, % 86,908 (360,181) $69.09 $76.00 $71.38 Hudson Square 13,004, % 272, ,060 $70.83 $77.15 $73.19 Downtown 106,910, % 806,668 (1,851,067) $55.00 $56.34 $46.71 Tribeca 8,204, % 27,054 62,412 $ $63.32 World Trade Center 38,622, % 167,917 (894,328) $62.34 $64.59 $46.58 Financial District 42,063, % 545,704 (824,636) $50.29 $51.40 $42.29 Insurance District 10,309, % 49, ,095 $44.59 $46.74 $40.10 City Hall 7,711, % 16,685 (568,610) $51.74 $52.02 $39.86 Manhattan 504,737, % 8,321,495 (1,421,333) $67.62 $71.11 $

12 502 offices in 67 countries on 6 continents United States: 140 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 108 CONTRIBUTORS: Chemerie Cheng Managing Director Franklin Wallach Senior Director Brian English Director Chen Zheng Director $2.3 billion in annual revenue 1.7 billion square feet under management 16,300 professionals and staff About Colliers International Colliers International is a global leader in commercial real estate services, with more than 16,300 professionals operating out of 502 offices in 67 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate occupiers, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. Colliers International has been recognized and ranked by the International Association of Outsourcing Professionals Global Outsourcing 100 for 10 consecutive years, more than any other real estate services firm. colliers.com Copyright 2015 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.