3Q 2019 New York Office Market Trend and Analysis

Manhattan Asking Rent and Availability Rate The Manhattan office market finished the third quarter setting another record high of average asking rents. This time increasing 1.5% from 2Q to $80.00 12.0% $77.61 and is 5.7% higher than a year ago. Asking rents have increased 11.5% every consecutive quarter since 3Q2018. Direct asking rents increased in $75.00 12 out of 15 office submarkets. 11.0% $70.00 Recent new construction deliveries definitely contributed to the increase in 10.5% rents, which is mostly in Midtown South's far west side. There's over $65.00 10.0% 600,000 square feet available between One Manhattan West, 30 Hudson Yards, 55 Hudson Yards and 40 Tenth Avenue, where asking rents are well over $100 per square foot. Such rents are seen commonly in the Plaza

15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 District, which saw an increase in rents by $1.38 to $118.31 quarter-to- Asking Rent Availability Rate 4Y Rate Avg. quarter and is up $5.44 year-over-year. Though leasing volume decreased to 7.9 million square feet or 26% from Midtown Asking Rent and Availability quarter-to-quarter, leasing activity remained high and strong ending the third quarter. We forecast high leasing volumes to continue into the next $88.00 13.0% two quarters; due to a strong local and national economy, with strong job $86.00 12.5% numbers and low unemployment rates; followed by an increased appetite $84.00 12.0% of technology companies moving into and expanding in Manhattan, new $82.00 construction deliveries and an increased role of startups keeping this office $80.00 11.5% market so active. $78.00 11.0% $76.00 10.5% TAMI (Technology-Advertising-Media-Information) tenants continued to drive the demand for large blocks of space. Four of the largest TAMI deals were all signed in the downtown area. Spotify continued its expansion at 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 the World Trade Center, subleasing 85,666 square feet at 4 World Trade Asking Rent Availability Rate 4Y Rate Avg. Center (26th & 27th floors). Joining Spotify at the World Trade Center is Uber Technologies, which signed a new lease at 3 World Trade Center (43rd to 49th floors) for 307,970 square feet for 11 years. The Midtown South Asking Rent and Availability transportation tech leader will be consolidating their Manhattan office operations and relocating from 1400 Broadway and the Terminal Stores $100.00 15.0% (261-271 Eleventh Avenue). Advertising giant, Publicis Groupe signed a 20 $80.00 year lease term to renew 682,883 square feet and expand by 277,339 $60.00 10.0% square feet at 375 Hudson Street, bringing their footprint at the building to 960,222 square feet. $40.00 5.0% $20.00 Most notably is the indicative trend of large tech giants giving more weight $- 0.0% to the term, Silicon Alley, with the largest of them all creating a block-by- block campus. Google continues to expand gradually, taking over more of the southwestern portion of Midtown South. After expanding at 85 Tenth 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 Avenue; 57 Eleventh Avenue (Pier 57); 345 Hudson Street and 315 Hudson Asking Rent Availability Rate 4Y Rate Avg. Street, the tech behemoth committed to Oxford Property Group's new development of 1.3 million square feet at 550 Washington Street (St. John's Terminal). Delivery of the new premises is slated for 1Q 2023, where Downtown Asking Rent and Availability Google will occupy the class-A, COOKFOX designed building & pay rents $70.00 15.0% starting in the low $70s and into the high $80s at the end of its lease.

$65.00 10.0% New York Quarter-to-Quarter Movement $60.00 5.0% 20 bp 30 bp $1.17 (1.5%) $55.00 0.0% ↑ ↓ ↑ AVAILABILITY VACANCY ASKING RENTS 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 - 26% 2.4% Rate (30 bp) $3.23 (5%) Asking Rent Availability Rate 4Y Rate Avg. ↑ ↑ ↓ LEASING VOLUME SUBLET AVAILABILITY SUBLET ASKING RENTS