Miami DDA Office Area. (134 Office Buildings)

Miami DDA Office Area (134 Office Buildings)

Miami Dade County Office Employment Growth 1988 to 2013: Following economic downturn, Miami Dade County office employment experiencing modest, but sustained growth 250 200 Jobs in 000 s 150 100 50 Services Financial 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: CBREEA

Miami Dade County Office Employment (annual % change): Professional services strongest office employment growth sector for several years; financial services achieving solid growth more recently. 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1990-2013: Avg. Annual Growth at 1.4% Financial Services Total Source: CBREEA

Miami Dade County Office Employment Projections: Increasing an average 3,867 per annum through 2019 Financial Services Total 1990 63,600 76,400 140,000 Avg. Annual Change Avg. Annual Growth % 2000 60,800 134,400 195,200 5,520 3.4% 2010 60,400 119,200 176,600-1,860-1.0% 2013 67,800 125,800 193,600 5,667 3.1% 2019 72,700 144,100 216,800 3,867 1.9% Note: Lambert Advisory also utilizes the Florida Department of Economic Opportunity (FDEO) industry employment and projection data to determine office employment and growth. Lambert s projection of average annual office employment growth for Miami Dade County is 4,146 between 2013 and 2019 or slightly higher than the CBREEA projection herein. Unlike, CBREEA, Lambert includes a percentage of wholesale trade employment growth as a driver office employment given the nature of trade in the County. Source: CBREEA

Miami Dade County Office Sector by Industry: FIRE and Professional Services entities represent largest office sectors in Miami Dade County Transportation, 5% Manufacturing, 4% Retail, 5% All Other, 19% FIRE, 22% Prof. Serv., 18% Commination, 6% Law Firms, 13% Bus. Serv., 8%

Miami Dade County & DDA Office Area Office Deliveries: CBD and Brickell office deliveries sporadic during past several years 2,500 2,000 Sq.Ft. in 000 s 1,500 1,000 500 Brickell CBD County -

CBD Office Completions (History): Averaging 100,000+ sq.ft. of office deliveries past several years Year CBD Brickell Total 2000 64,000 522,900 586,900 2003 255,000 255,000 2004 163,000 260,000 413,000 2007 25,800 25,800 2008 95,000 55,000 150,000 2010 752,500 583,000 1,335,500 2011 42,000 632,000 672,000 Total 1,142,300 2,307,900 3,450,200

Miami Dade County and DDA Office Area Net Absorption Trends: Historically, Miami Dade County office net absorption stronger than DDA Office Area; however, DDA Office Area gaining past 3 to 4 years 800 2,500 Sq.Ft. in 000 s 600 400 200 - (200) (400) (600) 2,000 1,500 1,000 500 - (500) (1,000) (1,500) (2,000) Sq.Ft. in 000 s CBD Brickell County Source: CBREEA

DDA Office Area Net Absorption (Q4 2011-Q3 2013) More than 800,000 square feet of Space Absorbed 250,000 200,000 Total Net Absorption = 750,000 sq.ft. 150,000 Sq.Ft. 100,000 50,000 - Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 (50,000)

DDA Office Area % Capture Net Absorption of County (by period): DDA Office Area capture very strong within past 5-10 years 35% 30% 25% 20% 15% 31% 30% 10% 5% 11% 16% 0% Q1 2000-Q4 2013 Q1 2004-Q4 2013 Q1 2009-Q4 2013 Q1 2012-Q4 2013

Miami Dade County, DDA Office Area Vacancy (History): Submarket consistently higher vacancy than Miami Dade County 30.0% 25.0% 20.0% 15.0% 10.0% County CBD Brickell 5.0% 0.0%

Miami Dade County, DDA Office Area Average Full Service Asking Rents (History): Brickell among highest in Miami Dade County $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 County CBD Brickell $10.00 $5.00 $-

Miami Dade County, DDA Office Area Average asking rent growth (Inflation Adjusted $2013): Historically tracks annual inflation $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- Avg. Annual growth at 2.2% County_Actual County_Adj. CBD_Actual CBD_Adjsuted Brickell_Actual Brickell_Adj

Tenant Profile

Miami Dade County Office Space Profile (by Tenant Size): More than 80% of Miami Dade County office tenants occupy less than 2,500 sq.ft. of space 25,000 to 49,999 SF, 2% 50,000 to 75,000 SF, 1% 10,000 to 24,999 SF, 7% 75,000 SF and up, 1% 5,000 to 9,999 SF, 9% 2,500 to 4,999 SF, 19% Up to 2,499 SF, 61% Up to 2,499 SF 2,500 to 4,999 SF 5,000 to 9,999 SF 10,000 to 24,999 SF 25,000 to 49,999 SF 50,000 to 75,000 SF 75,000 SF and up

DDA Office Area Tenant by Size - Compared to Select Markets Miami-Dade County Broward County Palm Beach County Greater Atlanta Greater Houston <5,000 80.1% 78.9% 75.1% 68.9% 68.0% 5,000-9,999 9.6% 10.2% 13.3% 14.3% 13.5% 10,000-24,999 7.5% 7.1% 8.8% 10.5% 11.2% 25,0000-49,999 1.5% 2.3% 1.7% 3.2% 3.5% 50,000 & Up 1.3% 1.6% 1.1% 3.1% 3.7% Source; Costar

DDA Office Area Largest Leases in 2013: 12 leases > than 20,000 sq.ft. out of 400+ lease transactions annually Submarket Building Sq.Ft. CBD 200 S. Biscayne Blvd. 69,155 Brickell 600 Brickell 64,820 CBD 200 S. Biscayne 57,954 CBD 100 SE 2 nd St. 55,006 Brickell 801 Brickell 54,800 CBD 200 S. Biscayne 30,019 Brickell 1111 Brickell 24,242 CBD 201 S. Biscayne 24,133 CBD 201 S. Biscayne 23,344 Brickell 600 Brickell 21,347 Brickell 600 Brickell 21,347 Brickell 777 Brickell 20,400 Source; Costar

DDA Office Area Average Deal Size (History): Avg. Deal size steadily declined past several years 3,000,000 14,000 2,500,000 Total SF Leased Avg. Deal/SF 12,000 Sq.Ft. 2,000,000 10,000 8,000 1,500,000 6,000 1,000,000 500,000 4,000 2,000 Sq.Ft. - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -

Trends by Class of Space

DDA Office Area Office Inventory of 133 Office Buildings (by Class): Class A space dominates office inventory in DDA Office Area DDA Office Area 10% 34% 56% Class A Class B Class C CBD 4% Brickell 14% 32% 54% Class A Class B 37% Class C 59% Class A Class B Class C

Brickell Average Asking Rent (Class A, B): Class A in Brickell outpaced Class B space during economic expansion; gap closing past two years $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Class A Class B

CBD Average Asking Rent (by Class): Class A space far outpaced Class B and C past several years $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 Class A Class B Class C $10.00 $5.00 $0.00

Brickell Office Vacancy (by Class): Class A space greater than 25% in 2011 (new inventory); however, strong decline since 30% 25% 20% 15% 10% Class A Class B 5% 0%

CBD Vacancy (by Class): Class A and Class B office vacancy remains high 30.0% 25.0% 20.0% 15.0% 10.0% Class A Class B Class C 5.0% 0.0%

Downtown Miami by Comparison

DDA Office Area Office Submarket vs. Select Markets (Office Inventory): DDA Office Area largest submarket in S. Florida, but substantially smaller than Downtown Atlanta or Houston 70,000,000 60,000,000 50,000,000 Sq.Ft. 40,000,000 30,000,000 20,000,000 10,000,000 - DT Miami Coral Gables MIA Airport DT Fort Lauderdale Boca DT Atlanta DT Houston

DDA Office Area Office Market vs. Select Markets (Net Absorption): Following economic downturn, DDA Office Area net absorption among strongest of select markets 1,200,000 1,000,000 Sq.Ft. 800,000 600,000 400,000 200,000 - (200,000) (400,000) (600,000) (800,000) 2010 2011 2012 2013 DT Miami Coral Gables MIA Airport DT Ft. Lauderdale Boca DT Atlanta DT Houston

DDA Office Area Office Submarket vs. Select Markets (Average Asking Rents): DDA Office Area has the highest average asking rent of select markets $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- 2010 2011 2012 2013 DT Miami Coral Gables MIA Airport DT. Ft. Lauderdale Boca DT Atlanta DT Houston

DDA Office Area Office Submarket vs. Select Markets (Vacancy): DDA Office Area remains among highest of select DT Miami DT Atlanta Boca DT Ft. Lauderdale MIA Airport 2013 2012 2011 2010 Coral Gables DT Houston 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Headlines Solid office employment growth over next 5+ years in Miami Dade County Miami DDA Office Area gaining substantial market share in terms of construction activity. 37 percent of County s total office development past 5 years, twice the share of its historical share of 19 percent. Miami DDA Office Area up to 31 percent capture of the County s total net absorption during the past five years Although vacancy remains relatively high in the Miami DDA Office Area, it is well off its peak in both Brickell and the CBD and continues to decline. Rents have yet to recover from the highs in 2008, but recovered to levels above 2006/7.

Headlines Historic Trending Total Office Demand (Sq.ft.) Miami Dade County (2014 to 2020) 5,450,000 5,450,000 Miami DDA Office Area Submarket Capture 15% 30% Miami DDA Office Area Total Potential - Office Demand (Sq.Ft.) 2014 to 2020 Miami DDA Office Area Total Potential - Office Demand (Sq.Ft.) Avg. Annual 820,000 1,640,000 140,000 280,000 Miami DDA Office Area needs to absorb 1.2 million square feet to reach stabilized levels Planning for new office development is getting closer in view

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