NORTHERN VIRGINIA OFFICE MARKET

REAL ESTATE OUTLOOK NORTHERN VIRGINIA OFFICE MARKET Office market steady during Q2 Demand stabilized while rents crawl up Office market conditions were mild in the Northern Virginia office market during the second quarter of 2016, as the direct vacancy rate ticked down 10 basis points to 16.2% and net absorption was positive 30,000 SF. Asking rents ticked up during the second quarter by 20 basis points to $30.50 PSF. The pipeline expanded to 3.8 million SF and is well pre-leased at 83%. ECONOMY Unemployment down 80 basis points over the year to 2.8% Payroll employment increased by 27,100 jobs during the 12 months ending May 2016 in Northern Virginia, which is above the 20-year annual average of 24,100. The professional/business services sector grew 9,300 of these jobs during the past 12 months, with the professional, scientific, and technical services subsector accounting for 80% of these jobs. The trade, transportation, and utilities sector followed with 6,900 new jobs, with retail trade accounting for 75% of these jobs. The Northern Virginia unemployment rate is the lowest in the Washington metro area at 2.8% at April 2016, down from 3.6% one year ago. The unemployment rate is below the 10-year average of 4.1%. This compares to the Washington metro area unemployment rate of 3.5% and the national rate of 5% at April 2016. We expect conditions to remain healthy during the remainder of 2016 and 2017, as consumer and business confidence strengthens to fuel the Northern Virginia economy. Through 2020, we expect job growth to average 18,900 jobs, accounting for 42% of the metro total. We expect the health, technology, construction, and food services industries to fuel job growth in the period ahead. OFFICE TRENDS 10-YEAR TREND OVERALL RENTAL RATES UNDER CONSTRUCTION JOB GROWTH 16.2% Vacancy rate ticks down (587,000) SF Demand weak YTD $30.50 PSF Up 20 basis points since Q1 3.8 Million SF Construction pipeline controlled 27,100 Jobs During 12-months ending May 2016 OFFICE AND DEMAND Solid demand offset by tenant move-outs Northern Virginia s direct vacancy rate was 16.2% at June 2016, down 10 basis points from three months prior, yet 20 basis points higher than year-end 2015. The current vacancy rate is well above the 10-year average of 13.5%.

NORTHERN VIRGINIA OFFICE MARKET UNEMPLOYMENT RATE 12% 10% 8% 6% 4% 2% 0% PAYROLL JOB GROWTH 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% UNITED STATES WASHINGTON METRO AREA NORTHERN VIRGINIA 05 06 07 08 09 10 11 12 13 14 15 16* NORTHERN VIRGINIA OFFICE NET AND 4.0 3.0 2.0 1.0 0.0-1.0-2.0 *At April 2016 SOURCE: Bureau of Labor Statistics, Transwestern UNITED STATES WASHINGTON METRO AREA NORTHERN VIRGINIA 05 06 07 08 09 10 11 12 13 14 15 16* *12 months ending May 2016 SOURCE: Bureau of Labor Statistics, Transwestern NET IN MILLIONS DIRECT RATE 18% 16% 14% 12% 10% 8% 6% The Class A direct vacancy rate increased to 14.6% at June 2016, from 13.8% at March 2016. The Class B/C direct vacancy rate decreased to 17.1% at June 2016, down 50 basis points from three months prior. Northern Virginia achieved 27 leases of 20,000 SF or greater and nine leases of 50,000 SF or greater during the second quarter of 2016. This compares to 24 leases of 20,000 SF or greater and six leases of 50,000 SF or greater during the second quarter of 2015. Net absorption totaled positive 30,000 SF during the second quarter of 2016, as demand was not enough to offset tenants vacating space. Class A space accounted for negative 33,000 SF during the past three months, compared to positive 58,000 SF for Class B/C space. During the first half of 2016, net absorption totaled negative 587,000 SF, which compares to the 10-year annual average of positive 996,000 SF. The Tysons Corner submarket was the leader in net absorption during the past three months due in part to the pre-leased delivery of 1775 Tysons Boulevard, which delivered 45% leased to Ernst & Young and Computer Sciences Corporation. In addition, Holland & Knight took 40,100 SF at 1650 Tysons Boulevard. Also notable, Grant Thornton will consolidate its regional operations in the RCB Corridor. The advisory firm leased 76,000 SF at 1000 Wilson Boulevard and will relocate from 79,000 SF at 333 John Carlyle Street in Old Town Alexandria and 28,000 SF at 2010 Corporate Ridge in Tysons. The gain for the Northern Virginia office market was offset by notable moveouts. Most notably, CAN Corporation of America vacated 160,700 SF at 4825 Mark Center Drive in Alexandria and the U.S. Environmental Protection Agency vacated 149,000 SF at 2733 Crystal Drive in Crystal City. In addition, Fairfax County Public Schools vacated 96,000 SF at 3877 Fairfax Ridge Road in Fairfax Center, and Gannett vacated 89,000 SF at 7950 Jones Branch in Tysons Corner. -3.0 07 08 09 10 11 12 13 14 15 16* 4% *At second quarter 2016 The professional and business services industry represented the largest share of leasing activity at 58% of all new or relet deals during the first half of 2016, of which 21% of these deals were for tech tenants. This was due to several midsized deals such as L-3 Communications leasing 22,800 SF at 14425 Penrose Place in Chantilly and Vencore taking 20,700 SF at 4100 N. Fairfax Drive in Arlington. Most of the leasing activity was concentrated in Arlington as the RCB and Crystal/Pentagon City submarkets represented 20% and 26% of total leasing, respectively. OFFICE RENTAL RATES Asking rents edge up during Q2 The Northern Virginia average asking rental rate was $30.50 PSF at June 2016, up 0.2% from three months prior, but flat compared to year-end 2015. Class A office rents averaged $33.37 PSF, while Class B/C rents averaged $27.84 PSF. 2 REAL ESTATE OUTLOOK NORTHERN VIRGINIA OFFICE MARKET Q2 2016

Concession packages remained elevated during the first half, as landlords compete for tenants. For a typical 10- year term for a new lease, tenant improvement allowances averaged around $75 PSF with 14.2 months of free rent for deals inked since the start of 2016. Concessions are above 2015 levels, which averaged $68 in tenant improvement allowances and 11.9 months in free rent. OFFICE SUPPLY AND DEVELOPMENT Tysons Corner dominates construction pipeline There were three office deliveries, totaling 559,000 SF at 52% pre-leased, during the second quarter of 2016. The Oaklawn building at 600 Hope Parkway, SE in Leesburg delivered in May at 100% leased to K2M Group Holdings. David Cantrall & Associates delivered Courthouse Common at 109-111 E. Market Street in Leesburg in June at 62% leased. Lerner Enterprises delivered 1775 Tysons Boulevard in Tysons Corner in May at 45% leased to Ernst & Young and Computer Sciences Corporation. There is 3.8 million SF of office space under construction or renovation in Northern Virginia at June 2016. The pipeline is currently 83% pre-leased, well above the 10-year average pre-lease rate of 42%. Tysons Corner has the greatest amount of space under construction at June 2016, totaling 1.3 million SF at 100% pre-leased to Capital One. This is highlighted by 975,000 SF at Capital One Drive, which will deliver in 2018 and be Capital One s new headquarters. Also notable is MITRE s build-to-suit property of 340,000 SF at 7598 Colshire Drive. This project is due to deliver by fall 2016. Another win for Tysons Corner was the recently announced 70,000 SF pre-lease by TEGNA at 8350 Broad Street within the Boro development. NORTHERN VIRGINIA CONTIGUOUS BLOCK ANALYSIS 700 600 500 400 300 200 100 0 NORTHERN VIRGINIA OFFICE ASKING RENTAL RATES $40 $35 $30 $25 $20 $15 NUMBER OF BUILDINGS - Q2 2015 NUMBER OF BUILDINGS - Q2 2016 564 588 359 353 CLASS A 157 153 10,000 SF 20,000 SF 50,000 SF 100,000 SF CLASS B/C 07 08 09 10 11 12 13 14 15 16* 77 73 *At second quarter 2016 NORTHERN VIRGINIA OFFICE DEVELOPMENT PIPELINE MILLION SF 7.0 COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE OFFICE INVESTMENT MARKET Investment activity steady The investment sales volume totaled $161 million, or $361 PSF, in Northern Virginia during the second quarter of 2016 due to three investment sales. Notably, The Meridian Group purchased 1735 N. Lynn Street for $106 million, or $368 PSF, and TIAA sold, the office portion of, 2801 Clarendon Boulevard for $40.6 million, or $407 PSF. Both assets are located in the RCB Corridor. During the first half of 2016, investment sales totaled $928 million, or $188 PSF, compared to $2.7 billion, or $227 PSF, during all of 2015. 6.0 5.0 4.0 3.0 2.0 1.0 0.0 06 07 08 09 10 11 12 13 14 15 16* *Completed YTD REAL ESTATE OUTLOOK NORTHERN VIRGINIA OFFICE MARKET Q2 2016 3

NORTHERN VIRGINIA OFFICE MARKET Investors focused slightly more capital on Class B/C assets, as this class represented 52% of the total sales volume during the past six months. In addition, 28% of the capital invested was focused on assets located in walkable to very walkable neighborhoods with access to transportation, retail, and other amenities, while 58% of the total sales volume was allocated to car-dependent locations. OFFICE MARKET OUTLOOK Office market to be sluggish in the near-term We expect the Northern Virginia office market to gradually recover over the next several years. However, in the shortrun market conditions will be challenged by tenants densifying and consolidating operations. Demand will be driven by the tech sector and interest surrounding the recently opened Silver Line. However, we project that demand will not be enough to offset tenants vacating space as they densify and consolidate. Select tenants will continue to take advantage of depressed rates and elevated concession packages. However, progress will be sluggish compared to past recovery cycles. We project the overall Northern Virginia vacancy rate (inclusive of sublease space) to remain relatively flat over the next two years, hovering around the high-16% range. We expect asking rents will remain stable during the second half of 2016 and possibly edge up 0.5% to 1.5% during 2017. Although developers have kept construction levels in check, we expect construction will continue to grow surrounding the Silver Line, and owners will look to renovate older assets to Class A product. Therefore, investment sales should continue to focus on older assets with superior locations. Interest in older value-add assets are gaining traction, which suggests the lowered post-recession pricing on suburban assets will start to rise. Overall, the Northern Virginia office market will remain challenged in the short run and take time to recover. Select submarkets with a relatively low vacancy rate, controlled pipeline and no significant move-outs on the horizon are poised to recover first. 4 REAL ESTATE OUTLOOK NORTHERN VIRGINIA OFFICE MARKET Q2 2016

Northern Virginia Office Market Indicators PROPERTY CLASS INVENTORY UNDER CONSTRUCTION Q2 NET YTD NET DIRECT SUBLEASE SPACE OVERALL AVERAGE RATE PSF Class A 67,146,519 3,506,348 (33,000) (483,000) 14.6% 1.2% 15.8% $33.37 Class B/C 124,771,182 88,500 58,000 (105,000) 17.1% 0.6% 17.7% $27.84 Total 191,917,701 3,594,848 30,000 (587,000) 16.2% 0.8% 17.0% $30.50 Northern Virginia Office Market Notable Lease Transactions TENANT DEAL TYPE ADDRESS SUBMARKET SQUARE FEET Transportation Security Administration Renewal 601 S 12th Street Crystal/Pentagon City 300,700 Transportation Security Administration Renewal 701 S 12th Street Crystal/Pentagon City 251,000 Grant Thornton New Lease 1000 Wilson Boulevard RCB Corridor 76,000 TEGNA Pre-Lease 8350 Broad Street Tysons Corner 70,000 ScienceLogic New Lease 10700 Parkridge Boulevard Reston 62,400 The Argosy University Renewal 1550 Wilson Boulevard RCB Corridor 40,100 Holland & Knight New Lease 1650 Tysons Boulevard Tysons Corner 38,300 SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern Northern Virginia Office Market Construction Activity SUBMARKET SQUARE FEET UNDER CONSTRUCTION/RENOVATION PERCENT PRE-LEASED RCB Corridor 719,548 65% Eisenhower Ave Corridor 700,000 97% Tysons Corner 1,315,000 100% Rt. 28 South/Chantilly 160,000 100% Loudoun County 261,800 94% Total 3,829,848 83% REAL ESTATE OUTLOOK NORTHERN VIRGINIA OFFICE MARKET Q2 2016 5

NORTHERN VIRGINIA OFFICE MARKET Northern Virginia Office Market Indicators SUBMARKET INVENTORY UNDER CONSTRUCTION Q2 NET YTD NET DIRECT SUBLEASE SPACE TOTAL AVERAGE RATE PSF RCB Corridor 23,984,926 719,548 96,000 0 20.7% 0.8% 21.5% $40.82 Crystal/Pentagon City 14,098,585 0 (215,000) (129,000) 16.2% 0.5% 16.7% $36.55 Old Town 8,389,063 0 (50,000) (109,000) 11.5% 0.8% 12.3% $32.49 Eisenhower Ave Corridor 9,202,185 700,000 (239,000) (221,000) 24.0% 0.2% 24.2% $32.29 Springfield/Huntington/I-95 8,030,384 0 (32,000) 8,000 18.7% 0.4% 19.1% $28.82 Bailey's/Falls Church/Annandale 7,382,823 0 (7,000) (30,000) 26.4% 0.6% 27.0% $28.50 Merrifield 9,247,243 0 (9,000) 18,000 11.4% 1.2% 12.6% $30.86 Reston 18,797,053 365,000 188,000 207,000 10.4% 1.6% 12.0% $27.92 Herndon 12,253,982 0 12,000 (392,000) 16.4% 1.9% 18.3% $27.17 Tysons Corner 28,995,138 1,315,000 299,000 241,000 14.7% 0.7% 15.4% $32.30 McLean/Vienna 2,201,261 235,000 (14,000) (36,000) 7.6% 0.3% 7.9% $31.76 Oakton/Fairfax City 5,840,759 0 6,000 (29,000) 14.7% 0.4% 15.1% $23.09 Fairfax Center 7,248,110 0 (116,000) (384,000) 20.6% 0.8% 21.4% $26.48 Rt. 28 South/Chantilly 13,857,593 160,000 55,000 277,000 15.0% 0.5% 15.5% $25.07 Loudoun County 15,925,917 261,800 69,000 37,000 16.5% 0.5% 17.0% $23.59 Prince William County 6,462,679 73,500 (13,000) (45,000) 11.6% 0.1% 11.7% $22.88 Total 191,917,701 3,829,848 30,000 (587,000) 16.2% 0.8% 17.0% $30.50 CONTACT Elizabeth Norton Managing Research Director Mid-Atlantic 202.775.7026 elizabeth.norton@transwestern.com Mallory Cason Research Associate Mid-Atlantic 202.775.7049 mallory.cason@transwestern.com METHODOLOGY The information in this report is the result of a compilation of information on office properties located in the Northern Virginia area. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency. 7900 Tysons One Place, Suite 600 McLean, Virginia 22102 T 703.821.0040 www.transwestern.com Copyright 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Flex/industrial market steady during Q2 Net absorption driven by pre-leased deliveries The Northern Virginia flex/industrial market was steady during the second quarter of 2016, as the direct vacancy rate increased 20 basis points to 7.9% and net absorption was positive 119,000 SF, driven primarily by pre-leased deliveries in the Dulles Corridor. Landlords increased asking rents by 1.8% since year-end 2015. ECONOMY Unemployment down 80 basis points over the year to 2.8 Payroll employment increased by 27,100 jobs during the 12 months ending May 2016 in Northern Virginia, which is above the 20-year annual average of 24,100. The professional/business services sector grew 9,300 of these jobs during the past 12 months, with the professional, scientific, and technical services subsector accounting for 80% of these jobs. The trade, transportation, and utilities sector followed with 6,900 new jobs, of which retail trade accounted for 75% of these jobs. The Northern Virginia unemployment rate is the lowest in the Washington metro area at 2.8% at April 2016, down from 3.6% one year ago. The unemployment rate is below the 10-year average of 4.1%. This compares to the Washington metro area unemployment rate of 3.5% and the national rate of 5% at April 2016. We expect conditions to remain healthy during the remainder of 2016 and 2017, as consumer and business confidence strengthens to fuel the Northern Virginia economy. Through 2020, we expect job growth to average 18,900, accounting for 42% of the metro total. We expect the health, technology, construction, and food services industries to fuel job growth in the period ahead. FLEX/INDUSTRIAL AND DEMAND Vacancy edging up The Northern Virginia direct vacancy rate edged up to 7.9% during the second quarter, from 7.7% three months prior. Prior to first quarter 2016, the vacancy rate had been declining steadily since 2009. Despite this, the vacancy rate is well below the 10-year average of 9.3%. Bulk warehouse has the lowest direct FLEX/INDUSTRIAL TRENDS 10-YEAR TREND OVERALL RENTAL RATES 7.9% UNDER CONSTRUCTION JOB GROWTH Vacancy rate ticks up 385,000 SF Healthy demand YTD $9.22 PSF Asking rents up 1.8% YTD 150,000 SF Construction pipeline controlled 27,100 Jobs During 12-months ending May 2016

NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET NORTHERN VIRGINIA FLEX/INDUSTRIAL NET AND vacancy rate among the three product types at 6.8% at June 2016. 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5 NET IN MILLIONS DIRECT RATE 07 08 09 10 11 12 13 14 15 16* *At second quarter 2016 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% Northern Virginia achieved 11 leases of 20,000 SF or greater and three leases of 50,000 SF or greater during the second quarter. This compares to 10 leases of 20,000 SF or greater and two leases of 50,000 SF or greater during the second quarter of 2015. Net absorption totaled positive 119,000 SF during the second quarter of 2016. Of the three property types, bulk warehouse contributed the strongest net absorption with positive 95,000 SF during the past three months. During the first half of 2016, net absorption totaled 385,000 SF, below the 10-year average of 930,000 SF. NORTHERN VIRGINIA FLEX/INDUSTRIAL ASKING RENTAL RATES $15 $14 $13 $12 $11 $10 $9 $8 $7 $6 BULK WAREHOUSE FLEX/WAREHOUSE FLEX/R&D 07 08 09 10 11 12 13 14 15 16* NORTHERN VIRGINIA FLEX/INDUSTRIAL DEVELOPMENT PIPELINE MILLION SF 3.0 2.5 2.0 1.5 *At second quarter 2016 COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE The Dulles Corridor was the leader in net absorption during the past three months, totaling positive 188,000 SF. Net absorption was boosted by pre-leased deliveries, as 323,150 SF came online at 70% leased. FLEX/INDUSTRIAL RENTAL RATES Asking rents up 1.8% during first half Flex/industrial asking rents edged up to $9.22 PSF at June 2016, up 1.8% since year-end 2015. Bulk warehouse and flex/warehouse rents increased by 4.4% and 1.7%, respectively during the past three months. Flex/R&D rents decreased 2.5% during this period. FLEX/INDUSTRIAL SUPPLY AND DEVELOPMENT Pipeline concentrated in Dulles Corridor There were five deliveries in the Northern Virginia flex/ industrial market during the second quarter of 2016. Notably, 22880 Quicksilver Drive, a 59,450 SF flex/ warehouse building, and 5615 Wellington Road, a 39,000 flex/warehouse building, delivered vacant during the second quarter. Duke Realty Corporation delivered TransDulles Plaza, 46213 Transdulles Plaza, at 100% leased in June. Every project delivered in the Dulles Corridor. 1.0 0.5 0.0 06 07 08 09 10 11 12 13 14 15 16* *Completed YTD Projects under construction or renovation total 150,000 SF at 0% pre-leased at June 2016. The Dulles Corridor accounts for the entire pipeline. Commercial Group Realty has two flex/warehouse buildings at 42615 and 42671 Trade Center Court totaling 32,000 SF each in Sterling. 2 REAL ESTATE OUTLOOK NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Q2 2016

By summer of 2017, StonebridgeCarras is set to break ground on a new mixed-use project near Potomac Yard in Alexandria. This process will demolish several flex/industrial projects. The developer and landowner, The Blackstone Group, plans to construct a 1.5 million SF mixed-use development located on 13 acres with delivery scheduled for summer of 2019. FLEX/INDUSTRIAL INVESTMENT MARKET Investment volume slow during the second quarter Northern Virginia investment activity was sluggish in the second quarter with only one notable sale. Cambridge Hanover purchased 14119 Sullyfield Circle for $6.1 million, or $69 PSF. The property was 21% leased at the time of sale. During the first half of 2016, the investment sale volume totaled $76 million, or $120 PSF, which compared to $473 million, or $114 PSF, during all of 2015. During the first half, investors focused 84% of capital on flex/warehouse assets, compared to 16% on bulk warehouse and none on flex/r&d. In addition, nearly 36% of investor capitol has been focused on Prince William County assets, followed closely by 30% in the Dulles Corridor. FLEX/INDUSTRIAL MARKET OUTLOOK Market conditions to remain steady We expect continued growth for the Northern Virginia flex/industrial market during the second half of 2016. We project the overall vacancy rate (inclusive of sublease space) will decline in Northern Virginia from 8% today to the mid-7% range by December 2016. We anticipate demand will outpace new supply during this period. Demand will be driven in part for retail distribution and housing construction supply. As demand rises, we expect asking rents to rise 2% to 3% during 2016 as the vacancy rate is low enough to justify rent increases. The pipeline is limited, which will control the vacancy rate from oversupply when the product delivers during the remainder of 2016. We expect the pipeline to expand as tenants are in the market for upgraded space with a focus on efficient building design and site layout, which includes better trailer loading, clear heights, column spacing, and parking. We expect the investment market to pick up pace over the next several quarters, as investors take advantage of healthy market conditions and rising demand. REAL ESTATE OUTLOOK NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Q2 2016 3

NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Northern Virginia Flex/Industrial Market Indicators PROPERTY TYPE INVENTORY UNDER CONSTRUCTION Q2 NET YTD NET DIRECT SUBLEASE SPACE OVERALL AVERAGE RATE PSF Bulk Warehouse 21,566,346 85,507 95,000 366,000 6.8% 0.0% 6.8% $7.66 Flex/Warehouse 59,628,895 64,409 47,000 59,000 7.9% 0.2% 8.1% $9.45 Flex/R&D 4,684,206 0 (24,000) (42,000) 12.7% 0.5% 13.2% $13.35 Total 85,879,447 149,916 119,000 385,000 7.9% 0.1% 8.0% $9.22 Northern Virginia Flex/Industrial Market Notable Lease Transactions TENANT DEAL TYPE ADDRESS SUBMARKET SQUARE FEET NAVFAC New Lease 17001 Interstate Drive Prince William County 62,700 Total Filtration New Lease 46213 Transdulles Plaza Dulles Corridor 21,000 Office Furniture Brokers New Lease 22930 Shaw Road Dulles Corridor 17,000 NES Associates New Lease 6304 Gravel Avenue I-95 Corridor 11,200 Sportrock New Lease 5300-5320 Eisenhower Avenue I-95 Corridor 8,000 Crooked Run Brewing New Lease 22455 Davis Drive Dulles Corridor 7,100 Skyline Auto Body and Paint Renewal 4215 Walney Road Dulles Corridor 6,800 SOURCE: CoStar, County Newsletters, Washington Business Journal, Washington Post, Transwestern Northern Virginia Flex/Industrial Market Construction Activity SUBMARKET SQUARE FEET UNDER CONSTRUCTION/RENOVATION PERCENT PRE-LEASED Dulles Corridor 149,916 0% Total 149,916 0% 4 REAL ESTATE OUTLOOK NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Q2 2016

NORTHERN VIRGINIA FLEX/INDUSTRIAL MARKET Northern Virginia Flex/Industrial Market Indicators SUBMARKET INVENTORY UNDER CONSTRUCTION Q2 NET YTD NET DIRECT SUBLEASE SPACE TOTAL AVERAGE RATE PSF Bulk Warehouse 304,912 0 4,000 5,000 0.0% 0.0% 0.0% N/A Flex/Warehouse 3,180,356 0 2,000 3,000 3.7% 0.2% 3.9% $13.54 Flex/R&D 366,459 0 (7,000) (20,000) 15.5% 0.0% 15.5% $13.36 Beltway (I-495) 3,851,727 0 0 (12,000) 4.5% 0.2% 4.7% $13.52 Bulk Warehouse 5,384,800 0 (75,000) 27,000 10.2% 0.0% 10.2% $8.05 Flex/Warehouse 19,240,932 0 15,000 (6,000) 7.6% 0.3% 7.9% $9.16 Flex/R&D 1,210,412 0 8,000 30,000 12.9% 0.0% 12.9% $14.38 I-95 Corridor 25,836,144 0 (52,000) 52,000 8.4% 0.2% 8.6% $9.17 Bulk Warehouse 70,982 0 0 0 0.0% 0.0% 0.0% N/A Flex/Warehouse 1,575,134 0 15,000 0 8.8% 0.3% 9.1% $13.52 Flex/R&D 592,480 0 (13,000) (11,000) 18.6% 0.0% 18.6% $13.26 Reston/Herndon 2,238,596 0 2,000 (11,000) 11.1% 0.2% 11.3% $13.45 Bulk Warehouse 10,969,948 85,507 142,000 286,000 7.0% 0.0% 7.0% $7.73 Flex/Warehouse 22,073,404 64,409 57,000 92,000 10.4% 0.1% 10.5% $10.25 Flex/R&D 2,181,789 0 (11,000) (41,000) 11.1% 1.0% 12.1% $13.26 Dulles Corridor 35,225,141 149,916 188,000 337,000 9.4% 0.1% 9.5% $9.65 Bulk Warehouse 4,835,704 0 24,000 48,000 3.0% 0.0% 3.0% $7.07 Flex/Warehouse 13,559,069 0 (42,000) (30,000) 5.2% 0.1% 5.3% $7.13 Flex/R&D 333,066 0 (1,000) 0 8.9% 0.0% 8.9% $10.31 Prince William County 18,727,839 0 (19,000) 19,000 4.7% 0.1% 4.8% $7.17 Bulk Warehouse 21,566,346 85,507 95,000 366,000 6.8% 0.0% 6.8% $7.66 Flex/Warehouse 59,628,895 64,409 47,000 59,000 7.9% 0.2% 8.1% $9.45 Flex/R&D 4,684,206 0 (24,000) (42,000) 12.7% 0.5% 13.2% $13.35 Northern Virginia Total 85,879,447 149,916 119,000 385,000 7.9% 0.1% 8.0% $9.22 CONTACT Elizabeth Norton Managing Research Director Mid-Atlantic 202.775.7026 elizabeth.norton@transwestern.com Mallory Cason Research Associate Mid-Atlantic 202.775.7049 mallory.cason@transwestern.com METHODOLOGY The information in this report is the result of a compilation of information on office properties located in the Northern Virginia area. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency. 7900 Tysons One Place, Suite 600 McLean, Virginia 22102 T 703.821.0040 www.transwestern.com Copyright 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.