Quarterly Market Report

Northern Virginia Quarterly Market Report

1st Quarter 2020

lpcwashingtondc.com Northern Virginia Leasing & Market Research

Neil Alt Senior Vice President [email protected] | 703.284.5868

Doug McLearn Senior Vice President [email protected] | 703.284.5862

Gary Cook Table of Contents Senior Vice President [email protected] | 703.284.3379

Chris Dyson Metropolitan D.C. Market Overview...... 3 Senior Vice President Northern Virginia Quarterly Overview...... 5 [email protected] | 703.284.3633

Northern Virginia Top Ten Leases...... 8 Eamon McCrann Senior Vice President Northern Virginia Sales Transactions...... 9 [email protected] | 703.284.5861

Jae Lee Market Spotlight, 1Q 2020: Senior Vice President [email protected] | 202.513.6700 Northern Virginia...... 11

Alexandria...... 13 Stoddie Nibley Senior Vice President Fairfax...... 15 [email protected] | 703.284.5884 Loudoun County...... 17 Correll Caulfield Merrifield...... 19 Vice President [email protected] | 703.284.5886 National Landing...... 21 Jed Prossner Old Town Alexandria/Eisenhower Avenue...... 23 Vice President Reston - Herndon...... 25 [email protected] | 703.284.5864

Rosslyn - Ballston Corridor...... 27 Jack Redmond Senior Associate Route 28 North...... 29 [email protected] | 703.284.5880 Route 28 South...... 31 Brenda Sosa Springfield...... 33 Leasing Associate [email protected] | 703.284.5881 Tysons Corner...... 35 13 Ben Hickey Leasing Associate [email protected] | 703.284.3364

Sarah Rossero Market Research Associate [email protected] | 703.284.3354

Jacqueline Spross Market Research Associate [email protected] | 703.284.3635

2 Metropolitan D.C. Market Overview 1st Quarter 2020

Overall Market Summary

The Washington, DC Metropolitan commercial real estate market is comprised of approximately 427.6 million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. square feet, delivered. The largest addition was 45 L Street, NE - Sentinel Square III delivering 539,903 The total vacancy rate ticked up to 13.6% at the square feet (88% leased to the FCC) to the NoMa end of the first quarter, while the market recorded submarket in DC. -839,909 square feet of net absorption. Only Washington, DC posted positive net absorption for There were twenty-one sale transactions in the first the quarter with 30,454 square feet absorbed. quarter, totaling $2.01 billion. The largest sale was 99 M Street, SE trading for $163,019,413 ($694 psf) in Leasing activity for the quarter totaled 4,842,729 DC’s Capitol Riverfront submarket square feet. The largest lease executed was a 237,062-square-foot renewal by the State Services Average asking rental rates increased $0.71 to $39.16 Organization (SSO) at 400-444 N. Capitol Street, per square foot, Full Service. NW - The Hall of States, in Washington, DC. From February 2019-February 2020 the DC At the end of the quarter, there was 7,743,316 Metropolitan Statistical Area (MSA) had a net square feet under construction, with 72% of the increase of 55,600 jobs (47,000 private sector, space pre-leased. No buildings broke ground this 8,600 government) representing 1.7% growth YOY, quarter; while five buildings, totaling 1,364,363 while the unemployment rate increased to 3.0%.

Metro DC VA MD Area (YTD)

Direct Vacancy 12.0% 13.3% 13.1% 12.8% (1Q 2020)

Total Vacancy 13.0% 14.0% 13.9% 13.6% (1Q 2020)

Total Net Absorption -839,909 30,454 -712,680 -156,873 (YTD 2020) SF

Leasing Activity 1,939,623 1,901,424 1,001,682 4.8 M SF (YTD 2020)

Market Outlook / COVID-19

Market fundamentals for the Metropolitan Virtual tours and the use other on-line Washington, DC office market weakened in technologies are being utilized to conduct the first quarter 2020. Total vacancy increased business as social distancing/stay-at-home across all three markets, with significant negative guidelines are observed. The vast majority of absorption recorded for the region. Leasing office tenants, both Federal and private sector, are activity and sales remained flat compared to teleworking, while only those employees deemed fourth quarter 2019, however, there was an 81% essential are allowed access to their place of increase in new deliveries (SF) quarter over business. Leasing activity is expected to decline quarter. The region added 55,600 new jobs YOY due the economic uncertainty. Some tenants ending February 2020 with 3.0% unemployment. will discuss with their brokers and landlords rent The Washington, DC MSA ranked 14th nationally relief or rent deferment options, while others may in unemployment (in MSAs over 1 million in sign short-term lease extensions. Landlords may population). view that government leases are quite attractive compared to private sector alternatives in this However, the outbreak of the COVID-19 challenging environment and may continue to coronavirus pandemic is having a profound, and think so in the foreseeable future. Investment ongoing, impact on the national economy and sales are expected to be placed on hold, while no commercial real estate industry. On March 27th, new product is expected to come to the market. 2020 the Trump Administration enacted the Lending will be extremely limited, while banks $2.2 trillion CARES Act (Coronavirus Aid, Relief, assess their own portfolios. and Economic Security Act) stimulus package to provide unemployment healthcare benefits and The impact of the COVID-19 pandemic on small business assistance. And more recently our daily lives, and commercial real estate, is on April 9th, the Federal Reserve provided extremely fluid and ever-changing. An increase an additional $2.3 trillion in loans to small in vacancy and negative absorption are expected businesses, consumers, states, cities, and towns. for the next two quarters (as tenants attempt These unprecedented stimulus/loan packages to downsize and an increase of sublease space are there to assist the 16.8 million Americans, floods the market), as well as, a sharp decline or 11% of the U.S. labor force, that have filed for in leasing activity. Best case scenario, COVID-19 unemployment over the past three weeks and to subsides late in the second quarter, or by the blunt the spike in unemployment. third quarter at the latest, then the economy and CRE can start the recovery process in the fourth Locally, the Washington, DC regional economy quarter 2020 or early 2021. could contract .08% to 2.0% in 2020, and possibly rebound up to 3.0% in 2021 (per The Stephen S. Fuller Institute). COVID-19 is having the greatest impact on the Retail and Leisure/ Hospitality sectors as non-essential retail must remain closed and residents are advised to follow social distancing and stay-at-home guidelines. Thousands employed by these two sectors have been furloughed or laid off. However, grocery stores, pharmacies (Walgreen’s, CVS), and big- box retailers like Target, Walmart, and Costco remain open and have seen significant increase in sales, e-commerce especially.

Market Summary

The Northern Virginia office market consists of 1Q 2020 4Q 2019 1Q 2019 1,529 buildings over 25,000 square feet, totaling approximately 187.4 million square feet of rentable space. Direct 13.3% 13.0% 14.3% The largest non-GSA lease signed during the fourth Vacancy quarter was a 125,556-square-foot renewal by Booz Allen Hamilton at 575 Herndon Parkway. Total 14.0% 13.6% 14.9% The largest lease signed by the GSA was a Vacancy 44,989-square-foot renewal by the Department of Defense at Potomac Gateway North - 2800 Crystal Net Drive. Absorption -712,680 SF 2,522,677 SF 472,834 SF (YTD) Building sales volume totaled $697,271,738 during the first quarter. The largest transaction was the sale of Dominion Tech Park - Buildings 1 & 2 - 399 & 499 Leasing Grove Street in the Reston-Herndon submarket. Activity 1.9 M SF 11.2 M SF 2.9 M SF USAA acquired the buildings from Boston Properties (YTD) for $256,000,000 ($519.69 psf). The portfolio was 100.0% occupied at the time of sale. The second Under 3.5 M SF 3.8 M SF 2.6 M SF largest sale was Fairview Park - 2941 Fairview Park Construction Drive in the Merrifield submarket. Menlo Equities acquired the building from Fairfax Park LLC for $97,590,405 ($265.66 psf). The building was 91.6% Deliveries 298,460 SF 627,777 SF 438,169 SF occupied at the time of sale. The third largest (YTD) sale was One Fair Oaks - 4114 Legato Road in the Fairfax Center submarket. Tritower Financial Group acquired the building from Beacon Capital Partners for $58,000,00 ($264.17 psf). The building was Rental Rates $33.04 PSF $32.81 PSF $33.02 89.9% occupied at the time of sale.

Inside the Beltway, there were 44 buildings U/C Percent marketing 50,000 square feet or greater of 78.8% 74.7% 75.0% Pre-Leased contiguous space available at the end of the first quarter 2020 compared to 40 from the fourth quarter 2019. Outside the Beltway, there were 75 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2020, compared to 76 from the fourth quarter 2019.

Vacancy Rate Deliveries vs. Under Construction Total vacancy in Northern Virginia increased from 5 13.6% in the fourth quarter 2019 to 14.0% in the first quarter 2020 and has decreased from 14.9% since first quarter 2019. At the end of the first quarter 2020, 26.2 4 million square feet was vacant and available. 3 Direct vacancy has increased from 13.0% in the fourth

quarter 2019 to 13.3% in the first quarter 2020, and has SF (Millions) 2 decreased from 14.3% since first quarter 2019. At the

end of the first quarter 2019, 24.9 million square feet 1 was vacant and available for direct lease.

0 The sublet vacancy rate in Northern Virginia remained '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

flat at 0.7% from the fourth quarter 2019 to the first Deliveries Under Construction quarter 2020, and has increased slightly from 0.6% since first quarter 2019. At the end of the first quarter 2020, 1.1 million square feet was vacant and available for sublease. Deliveries | Net Absorption | Vacancy Rate Total vacancy for Class A product in Northern Virginia

was 15.7% while Class B product was 11.3% for the 3.0 20

quarter. Class A vacancy increased from 15.2% in the 2.5 18 fourth quarter 2019, and Class B vacancy increased 2.0 16 from 10.9% in the fourth quarter 2019.

1.5 14 (%) Rate Vacancy Absorption & Gross Leasing 1.0 12 Northern Virginia recorded -712,680 square feet of net 0.5 10

SF (Millions) absorption in the first quarter of 2020. A significant 0.0 8 contributor to the negative absorption were multiple -0.5 6 move-outs in the National Landing Submarket. Devry -1.0 4 University and Chamberlain University moved out of -1.5 2 123,000 square feet at Century One at Century Center- -2.0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 2450 Crystal Drive. Delivery Net Absorption Direct Vacancy Rate

Leasing activity at the end of the first quarter 2020 totaled 1,901,424 square feet. Nine of the top ten leases signed in the first quarter were by private sector Vacancy by Building Class tenants.

The ten largest leases signed during the first quarter 150 20

ranged in size from 125,556 square feet to 39,000 15.7%

square feet, and six of these largest transactions were 120 Class VacantBuilding of (%) 15 renewals. 11.3% 90

Two of the submarkets contributing to this quarter's SF (Millions) 60 negative absorption are National Landing and the Reston-Herndon Submarket. National Landing had 5 30 a total of -197,229 square feet of move-outs and 2.5% Reston-Herndon recorded -377,962 square-feet move-outs, having the weakest absorption of the 0 A B C 0 quarter.

101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.6700 lpcwashingtondc.com 6 4300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.4600 8120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300 Northern Virginia 1st Quarter 2020 Construction Outlook A total of thirteen buildings were under A majority of the leasing activity for the first quarter construction in Northern Virginia at the end of the 2020 were private sector tenants, who signed nine first quarter, totaling approximately 3.5 million of the ten top leases. However, the GSA signed the square feet and 78.8% pre-leased. ninth top lease this quarter in Northern Virginia.

Two buildings delivered this quarter, Alexandria During the first quarter of 2020 we were all impacted Gateway O2 - 4600 King Street (58,460 SF) in by the world pandemic of COVID-19. Because of Alexandria and 4040 Wilson (240,000 SF) in the COVID-19 we are seeing a direct impact on our Rosslyn-Ballston Corridor. national markets, as well as local. In Virginia, the governor called for all non-essential businesses to Other buildings set to deliver in 2020 include, close. Offices are now having to work remotely and Reston Station - Ph II - 1906 Reston Metro Plaza restaurants are having to do carry-out and delivery (212,957 SF), 17Fifty - 1750 Presidents Street only. This has caused our region and nation to fall (383,628 SF), TSA HQ - 6595 Springfield Center into a recession, with hospitality and retail taking the Drive (634,000 SF), Penrose II - 14401 Penrose hardest hit. However, due to the increase demand Place (125,000 SF), Loft Office at Market Common in goods, industrial has seen significant growth and - 1650 Edgewood Street (136,172 SF), Building G at demand. One Loudoun - 20333 Exchange Street (54,000 SF), Building T at One Loudoun - Brimfield Drive Due to Northern Virginia having strong fundamentals (40,000 SF), and the General Dynamics HQ - 11011 regarding vacancy, low unemployment, leasing Sunset Hills Road (160,000 SF). activity, rising asking rates prior to the pandemic, experts believe there will be a quicker return to Buildings scheduled to deliver in 2021 include, normalcy and the market will rebound in the overall Tysons Center - 1750 Tysons Central Street (383,628 market. However, there will be a lot of volatility in SF), APTA Centennial Center - 3030 Potomac the market for the remainder of 2020 while the "new Avenue (104,453 SF), and Reston Station - Phase normal" is determined. III - 1902 Reston Metro Plaza (221,000 SF). Lastly, Office Bldg A - Sunset Hills Road @ Town Center Boulevard (800,000 SF) is expected to deliver in The Northern Virginia region gained 31,100 net 2022, as well as, the Institute for Defense Analyses new jobs from February 2019 - February 2020, - 701 E. Glebe Road (370,000 SF). representing 2.08% growth YOY. Professional & Business Services had the most with 15,400 new jobs. The Government added 6,000 jobs. As of February 2019, the unemployment rate for Northern Virginia declined from the previous year at 0.5%. The national unemployment rate decreased to 2.2%.

Top Ten Leases Included in the top ten leases of the first quarter 2020 were six renewals, three relets, and one new lease. The largest lease transaction of the quarter was a 125,556-square-foot renewal signed by Booz Allen Hamiltion at Dulles Overlook - 575 Herndon Parkway in the Reston-Herndon submarket. The second largest lease of the quarter was a 79,666-square-foot renewal/expansion by Systems Planning & Analysis, Inc. at Mark Center 2001 - 2001 N. Beauregard Street in the Alexandria submarket. The third largest lease of the quarter was a 78,926-square-foot renewal/expansion signed by Airlines Reporting Corporation at Clarendon Center North - 3000 Wilson Boulevard in the Rosslyn-Ballston Corridor submarket. A 75,000-square-foot relet was signed by Convene at 1676 International Drive in the Tysons Corner submarket. Also, a 63,324-square-foot renewal was signed by Accenture at Two Halley Rise - 12018 Sunrise Valley Drive in the Reston-Herndon submarket. Additionally, a 54,000-square-foot relet was signed by Northrop Grumman at Lakeside @ Loudoun Building I - 21351 Ridgetop Circle in the Loudoun County/ Route 28 North submarket. Kudu Dynamics signed a 54,000-square-foot new lease at Penrose Center II - 14401 Penrose Place in the Route 28 South submarket. VMware also signed a renewal for 53,512 square feet at RTC West I - 12100 Sunset Hills Road in the Reston-Herndon submarket. Also, a 44,989-square-foot renewal was signed by GSA - Department of Defense at Potomac Gateway North - 2800 Crystal Drive in the National Landing submarket. Lastly, Hana signed a 39,000-square-foot relet at Crystal Park Five - 2451 Crystal Drive in the National Landing submarket.

575 Herndon Parkway 2001 N. Beauregard Mark Center 2001 Street Tenant Booz Allen Hamilton Systems Planning & Tenant Size 125,556 SF Analysis, Inc. Type Renewal Size 79,666 SF Type Renewal/Expansion

Clarendon Center 3000 Wilson 1676 International Drive North Boulevard Tenant Convene Airlines Reporting Tenant Corporation Size 75,000 SF Size 78,926 SF Type Relet Type Renewal/Expansion

12018 Sunrise Valley Lakeside @ Loudoun 21351 Ridgetop Two Halley Rise Drive Building I Circle Tenant Accenture Tenant Northrop Grumman

Size 63,324 SF Size 54,000 SF

Type Renewal Type Relet

12100 Sunset Hills Penrose Center II 14401 Penrose Place RTC West I Road Tenant Kudu Dynamics Tenant VMware

Size 54,000 SF Size 53,512 SF

Type New Lease Type Renewal

Potomac Gateway 2800 Crystal Drive Crystal Park Five 2451 Crystal Drive North GSA - Department of Tenant Hana Tenant Defense Size 39,000 SF

Size 44,989 SF Type Relet

Type Renewal

Northern Virginia Sales Transactions

8111 Gatehouse New Dominion 2941 Fairview Park One Jefferson Park 399 & 499 Grove Fairview Park One Fair Oaks 4114 Legato Road Road Tech Park-Bldg Drive Street 1 & 2 Submarket Merrifield Submarket Fairfax Center Submarket Merrifield Submarket Reston-Herndon Date Sold March-2020 Date Sold March-2020 Date Sold March-2020 Date Sold February-2020 $97,590,405 $58,000,000 $52,000,000 Price Price Price ($265.66 psf) ($264.17 psf) ($184.04 psf) $256,000,000 Price Tritower Financial MTR Capital ($519.69 $psf) Buyer Menlo Equities Buyer Buyer Group Group Seller Fairfax Park LLC Beacon Capital Equus Capital Buyer USAA Seller Seller RBA 367,349 SF Partners Partners 282,542 SF Seller Boston Properties Class A RBA 219,558 SF RBA Class A RBA 492,601 SF Occupancy 91.6% Class A Class A Occupancy 89.9% Occupancy 100.0% Occupancy 100.0% Cap Rate 9.20% 2 Building Portfolio Notes Sale

13900 Lincoln 2034 Eisenhower 20130 & 20135 13625, 13635, Lincoln Park I Carlyle Corner Lakeview East & Park Drive Avenue Lakeview Center Liberty Park & 13645 Dulles West Old Town/ Place Technology Drive Submarket Route 28 South Submarket Eisenhower Ave Submarket Route 28 North Submarket Herndon Date Sold January-2020 Date Sold March-2020 Date Sold January-2020 Date Sold February-2020 $47,100,000 $42,313,653 Price Price ($231.68 psf) ($264.46 psf) $46,500,000 $27,847,680 Price Price ($227.80 psf) ($287.83 psf) Buyer Friedman Capital Buyer Fundrise Innovatus Capital Stanley Martin Buyer Buyer Seller Goldman Sachs Seller ELV Associates Partners Homes Brookdale Group/ RBA 202,428 SF RBA 160,000 SF Seller Seller MRP Realty MRP Class A Class B RBA 36,918 SF RBA 204,128 SF Occupancy 100.0% Occupancy 85.7% Class B Class A Notes Part of portfolio Occupancy 0.0% Occupancy 93.7%

Northern Virginia Sales Transactions

Victory Point at 14200 Park Pender Business 3920 Pender McLean Medical 1515 Chain Bridge 13775 McLearen International Plaza Westfields Meadow Drive Park Drive Bldg Road Road

Submarket Route 28 South Submarket Fairfax Center Submarket Tysons Corner Submarket Route 28 South

Date Sold January-2020 Date Sold March-2020 Date Sold January-2020 Date Sold February-2020 $23,650,000 $22,200,000 $12,070,000 $12,000,000 Price Price Price Price ($159.83 psf) ($267.05 psf) ($393.44 psf) ($90.49 psf) Washington Sunrise Senior DBT Development Buyer AAFMAA Property Buyer Buyer Buyer Alliance Capital Living Group CrossHarbor Seller Office Properties Wilkins-Rogers, Seller Srinivas Chavali Capital Partners Seller Seller Income Trust Inc RBA 132,617 SF RBA 147,966 SF RBA 83,130 SF RBA 28,936 SF Class A Class A Class A Class B Occupancy 100.0% Occupancy 95.9% Occupancy 100.0% Occupancy 100.0% Cap Rate 9.00%

Northern Virginia 1st Quarter 2020

5 16 20 42 14

4 35 12 16 10

3 28 ($) Rate Asking 8 12 6

21 SF (Millions) 4 SF (Millions) 2 Vacancy Rate (%) Vacancy 8 2 14 0 1 4 -2 7 -4 0 '17'16'15'14'13'12'11'10 '19'18 YTD '20 '19 '18 '17'16'15'14'13'12'11'10 '18 '19 YTD '20 0 0 '19'18'17'16'15'14'13'12'11'10 YTD '20 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights Total vacancy in Northern Virginia increased from 10 Year Averages (2010 - 2019) 13.6% in the fourth quarter 2019 to 14.0% in the first quarter 2020, and has decreased from 14.6% since Total Absorption 1.0 M SF / Year first quarter 2019. Direct vacancy has increased from 13.0% in the fourth quarter 2019 to 13.3% in the first Deliveries (SF) 1.7 M SF / Year quarter 2020, and has decreased from 14.5% since first quarter 2019. Leasing Activity 13.6 M SF / Year

Northern Virginia recorded -712,680 square feet of net absorption in the first quarter of 2020. A Market Stats significant contributor to the negative absorption for the quarter was driven by multiple move-outs Inventory 187.4 M SF totaling 123,000-square-feet by Devry University and Chamberlain University at Century One at Direct Vacancy 13.3% Century Center- 2450 Crystal Drive. Total Vacancy 14.0% Leasing activity at the end of the first quarter 2020 totaled 1,901,424 square feet. Nine of the top ten YTD 2020 Absorption -712,680 SF leases signed in the first quarter were by private sector tenants. YTD Leasing Activity 1.9 M SF Inside the Beltway, there were 44 buildings marketing 50,000 square feet or greater of Under Construction 3.5 M SF contiguous space available at the end of the first quarter 2020 compared to 40 from the fourth Percent Pre-Leased 78.8% quarter 2019. Outside the Beltway, there were 75 buildings marketing 50,000 square feet or greater YTD 2020 Deliveries 298,460 SF of contiguous space available at the end of the first quarter 2020, compared to 76 from the fourth 2010: 2019: YTD 2020: Asking Rental Rates quarter 2019. $30.22 $32.81 $33.04 (Full Service) PSF PSF PSF

Under Construction

Property Submarket Building Size Available Pre-Leased Delivery Date Developer Major Tenants

Penrose Center II - Zumot Real Estate Kudu Dynamics, Route 28 South 125,000 SF 33,609 SF 72.9% 2Q 2020 14401 Penrose Plaza Management Rincon Research

Reston Station Phase II - CVS Pharmacy, Reston 212,957 SF 106,210 SF 50.1% 2Q 2020 Comstock 1906 Reston Metro Plaza Neustar Inc

17Fifty - Reston 276,000 SF 0 SF 100.0% 2Q 2020 Boston Properties Leidos 1750 Presidents Street

General Dynamics HQ - General Reston 160,000 SF 0 SF 100.0% 2Q 2020 General Dynamics 11011 Sunset Hills Road Dynamics

Loft Office at Market Common - Rosslyn-Ballston 136,172 SF 107,971 SF 20.7% 3Q 2020 Regency Centers None 1650 Edgewood Street Corridor

Building T-One Loudoun- Retail Properties of Route 7 Corridor 40,000 30,000 SF 25.0% 3Q 20020 None Brimfield Drive America

6595 Springfield Center Dr Springfield 634,000 SF 7,000 SF 98.9% 3Q 2020 Boston Properties GSA-TSA

Building G at One Loudoun - Retail Properties of Route 7 Corridor 54,000 SF 32,491 SF 39.8% 4Q 2020 None 20333 Exchange Street America

American APTA Centennial Center - Meany & Oliver National Landing 104,453 SF 42,908 SF 58.9% 1Q 2021 Physical Therapy 3030 Potomac Avenue Companies Association

Reston Station Phase III - Reston 221,000 SF 2,600 SF 98.8% 3Q 2021 Comstock ICF International 1902 Reston Metro Plaza

Tysons Central - Tysons Corner 383,628 SF 383,628 SF 0.0% 4Q 2021 Foulger-Pratt None 1750 Tysons Central Street

Reston Gateway Office - Sunset Hills Rd @ Town Center Reston 800,000 SF 0 SF 100.0% 1Q 2022 Boston Properties Fannie Mae Boulevard

Institute for Defense Analyses - Undisclosed Institute for National Landing 370,000 SF 0 SF 100.0% 1Q 2022 701 E. Glebe Road Defense Analyses

Totals

Broke Ground 1Q2020 0 SF

Total Under Construction 3,517,210 SF

% Preleased 78.8% (Does not include condos)

Alexandria 1st Quarter 2020

0.8

0.7 25 35 1.5

0.6 20 28 1.0 0.5

Lorem ipsum ($) Rate Asking

0.4 15 21 0.5 SF (Millions)

0.3 SF (Millions) Vacancy Rate (%) Vacancy 10 14 0.2 0.0

0.1 5 7

0.0 -0.5 '19'18 '17'16'15'14'13'12'11'10 '19'18 YTD '20 '19'18'17'16'15'14'13'12'11'10 YTD '20 0 0 '19'18'17'16'15'14'13'12'11'10 YTD '20 Deliveries Under Construction Leasing Activity Total Net Absorption Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights Direct vacancy in Alexandria decreased from 14.6% in the fourth quarter 2019 to 14.0% in the first quarter 2020, and has decreased from 14.6% since first quarter 2019. Total vacancy has decreased from 15.7% in the 10 Year Averages (2010 - 2019) fourth quarter 2019 to 15.2% the first quarter 2020, and has increased from 14.9% since first quarter 2019. Total Absorption 163,624 SF / Year

The Alexandria submarket recorded 108,368 square Deliveries (SF) 261,419 SF / Year feet of net absorption in the first quarter of 2020. The positive absorption was driven by a 91,906-square- Leasing Activity 802,466 SF / Year foot move-in at 2000 N. Beauregard Street.

The largest lease signed in the Alexandria submarket Market Stats in the first quarter was a 79,666-square-foot relet by Systems Planning & Analysis, Inc. at Inventory 18.2 M SF the Mark Center - 2001 N. Beauregard Street. Direct Vacancy 14.0% Alexandria Gateway O2 at 4600 King Street delivered this quarter. The 58,460-square-foot building Total Vacancy 15.2% is 58.0% pre-leased. YTD 2020 Absorption 108,368 SF

YTD Leasing Activity 173,964 SF

Under Construction 0 SF

Percent Pre-Leased 0%

YTD 2020 Deliveries 58,460 SF

2010: 2019: YTD 2020: Asking Rental Rates $32.44 $34.13 $34.11 (Full Service) PSF PSF PSF

Alexandria 1st Quarter 2020

Major Leases

Mark Center 2001 N. Beauregard Street Carlyle Center 1925 Ballenger Avenue

Systems Planning & Tenant Tenant Atkins North America Analysis, Inc. Size 21,748 SF Size 79,666 SF Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Carlyle Corner $42,313,653 ELV Alexandria March-2020 Fundrise A 85.7% 2034 Eisenhower Avenue ($264.46 psf) Associates

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

No new construction Alexandria N/A N/A N/A N/A N/A N/A reported during the quarter

Fairfax (Fairfax Center, Fairfax City, Oakton) 1st Quarter 2020

1.5 0.20 24 30

20 25 0.16 1.0

16 20 ($) Rate Asking 0.12

12 15 0.5 Vacancy Rate (%) Vacancy SF (Millions) SF (Millions) 0.08 8 10 0.0 0.04 4 5

0.00 -0.5 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in Fairfax has decreased from 18.0% in the fourth quarter 2019 to 17.9% in the first quarter 10 Year Averages (2010 - 2019) 2020, and has decreased from 18.2% since the first quarter 2019. Total vacancy has remained flat at 18.9% Total Absorption -25,306 SF / Year from the fourth quarter 2019 to the first quarter 2020, and has decreased from 19.1% since first quarter 2019. Deliveries (SF) 26,250 SF / Year

The Fairfax submarket recorded -92,959 square Leasing Activity 904,811 SF / Year feet of net absorption in the first quarter of 2020. The negative absorption for the quarter was driven by a 26,064-square-foot move-out at Bridgewater Market Stats Corporate Center - 11325 Random Hills Road.

Inventory 12.6 M SF The top sale this quarter in the Fairfax submarket was the sale of One Fair Oaks - 4114 Legato Road. 17.9% The building was purchased by Tritower Financial Direct Vacancy Group from Beacon Capital Partner for $58,000,000 ($264.17 psf). The building was 89.9% occupied at the Total Vacancy 18.9% time of sale. YTD 2020 Absorption -92,959 SF The largest lease signed in the Fairfax submarket was a 20,701-square foot relet by the Commonwealth YTD Leasing Activity 102,210 SF of Virginia at the Mainland Building - 10680 Main Street. Another lease signed this quarter was Under Construction 0 SF a 19,926-square-foot renewal by Tiber Creek Consulting at Greenwood - 12015 Lee Jackson Percent Pre-Leased 0.0% Memorial Highway. YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $26.40 $26.88 $27.04 (Full Service) PSF PSF PSF

Fairfax (Fairfax Center, Fairfax City, Oakton) 1st Quarter 2020

Major Leases

12015 Lee Jackson Mainland Building 10680 Main Street Greenwood Memorial Highway Commonwealth of Tenant Tenant TIber Creek Consulting Virginia Size 19,926 SF Size 20,701 SF Type Relet Type Relet

12701 Fair Lakes Circle

Tenant CGI

Size 11,328 SF

Type Expansion

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

One Fair Oaks $58,000,000 Tritower Financial Beacon Capital Fairfax Center March-2020 A 89.9% 4114 Legato Road ($264.17 psf) Group Partners

Pender Business Park $22,200,000 Washington Office Properties Fairfax Center March-2020 A 100.0% 3920 Pender Drive ($267.05 psf) Alliance Capital Income Trust

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

No new construction reported Fairfax N/A N/A N/A N/A N/A N/A during the quarter

Loudoun County 1st Quarter 2020

0.35 24 30 3.00

0.30 20 25 2.35 0.25

16 20 ($) Rate Asking 0.20 1.70

12 15

0.15 SF (Millions) Vacancy Rate (%) Vacancy SF (Millions) SF 1.05

0.10 8 10

0.40 0.05 4 5

0.00 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 0 0 -0.25 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in Loudoun County decreased from 8.6% in the fourth quarter 2019 to 7.7% in the first 10 Year Averages (2010 - 2019) quarter 2020, and has decreased from 9.8 % since first quarter 2019. Total vacancy has decreased from 8.8% Total Absorption 221,525 SF / Year in the fourth quarter 2019 to 7.9% in the first quarter 2020 and has decreased from 9.9% since first quarter Deliveries (SF) 178,791 SF / Year 2019. Leasing Activity 873,066 SF / Year Loudoun County recorded 253,846 square feet of net absorption in the first quarter 2020. A significant contributor to the positive absorption this quarter was Market Stats a 123,750-square-foot move in by GSA-US Customs & Border Protection at Quantum Park at 22001 Loudoun Inventory 16.0 M SF County Parkway – 22001 Loudoun Parkway - Building B. Direct Vacancy 7.7%

The largest lease signed in Loudoun County this Total Vacancy 7.9% quarter was a 54,000 square-foot relet signed by Northrop Grumman at Lakeside @ Loudoun Building YTD 2020 Absorption 253,846 SF I - 21351 Ridgetop Circle, representing new growth for Northrop Grumman. YTD Leasing Activity 153,374 SF

One of the top sales in the Loudoun submarket was Under Construction 94,000 SF the purchase of Lakeview East & West - 20130 & 20135 Lakeview Center Place which was acquired by Percent Pre-Leased 33.5% Innovatus Capital Partners from Brookdale Group/ MRP for $46,500,000 ($227.80 psf). The two assets YTD 2020 Deliveries 0 SF were 93.7% occupied at the time of sale.

2010: 2019: YTD 2020: Building T - One Loudoun - Brimfield Drive is currently Asking Rental Rates $25.46 $25.84 $ 25.86 under construction. The 40,000-square-foot building (Full Service) is projected to deliver third quarter 2020. Building G - PSF PSF PSF One Loudoun at 20333 Exchange Street is also under construction. The 54,000-square-foot building is set to deliver fourth quarter 2020 and is 39.8% pre-leased. 101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.6700 lpcwashingtondc.com 17 4300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.4600 8120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300 Loudoun County 1st Quarter 2020

Major Leases

Lakeside @ Loudoun 22001 Loudoun County 21351 Ridgetop Circle Quantum Park E2 Building I Parkway Tenant Northrop Grumman Tenant GSA

Size 54,000 SF Size 36,770 SF

Type Relet Type Relet

19775 Belmont Executive Belmont Plaza I 106 Catoctin Circle SE Plaza Tenant Toll Brothers Tenant County of Loudoun

Size 29,678 SF Size 18,068 SF

Type Renewal Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Lakeview East & Lakeview West Innovatus $46,500,000 MRP Realty 20130 & 20135 Lakeview Center Loudoun County January-2020 Capital A 93.7% ($227.80 psf) Inc Place Partners

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Building T - One Loudoun Regency Loudoun County 40,000 SF 30,000 SF 25.0% 3Q 2020 None Brimfield Drive Centers

Retail Building G at One Loudoun Loudoun County 54,000 SF 32,491 SF 39.8% 4Q 2020 Properties of None 20333 Exchange Street America

Merrifield 1st Quarter 2020

0.08 18 40 2.0

0.07 16 35 1.5 14 0.06 30 1.0 12 ($) Rate Asking 0.05 25 10 0.04 20 0.5 Vacancy Rate (%) Vacancy

8 SF (Millions) SF (Millions) 0.03 15 6 0.0 0.02 10 4 -0.5 0.01 2 5

-1.0 0.00 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption

Highlights 10 Year Averages (2010 - 2019)

Direct vacancy in Merrifield has remained flat at Total Absorption 1,676 SF / Year 11.6% from the fourth quarter 2019 to the first 2020 and has decreased from 13.1% since first quarter Deliveries (SF) 9,719 SF / Year 2019. Total vacancy has decreased from 12.0% in the fourth quarter 2019 to 11.9% first quarter 2020, and Leasing Activity 664,670 SF / Year has decreased from 13.9 % since first quarter 2019.

The Merrifield submarket recorded -41,798 square Market Stats feet of net absorption in the first quarter 2020. The negative absorption was driven by a 52,129-square- Inventory 9.6 M SF foot move-out at Williams Plaza 2 - 3060 Williams Drive. Direct Vacancy 11.6%

The largest lease signed in the Merrifield submarket Total Vacancy 11.9% was a 25,000-square foot relet by Sheet Metal Workers International at 80 at Fairview - 3180 YTD 2020 Absorption -41,798 SF Fairview Park Drive. YTD Leasing Activity 80,010 SF The second largest sales transaction of the quarter occurred in the Merrifield submarket. Fairview Park Under Construction 0 SF - 2941 Fairview Park Drive - was acquired by Menlo Equities from Fairfax Park LLC for $97,590,405 Percent Pre-Leased 0% ($265.66 psf). The building was 91.6% occupied at the time of sale. YTD 2020 Deliveries 0 SF

2010: 2019: Asking Rental Rates YTD 2020: $34.06 $31.30 (Full Service) $31.04 PSF PSF PSF

Merrifield 1st Quarter 2020

Major Leases

3180 Fairview Park 80 at Fairview Drive Sheet Metal Workers Tenant International Size 25,000 SF

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Fairview Park $97,590,405 Menlo Fairfax Park Merrifield March-2020 A 91.6% N/A 2941 Fairview Park Drive (265.66 psf) Equities LLC

Equus One Jefferson Park $52,000,000 MTR Capital Merrifield March-2020 Capital A 100.0% 9.20% 8111 Gatehouse Road ($184.04) Group Partners

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

No new construction reported Merrifield N/A N/A N/A N/A N/A N/A during the quarter

National Landing (Crystal City & Pentagon City) 1st Quarter 2020

700 32 48 2.0

28 42 1.5 560 24 36 1.0 Asking Rate ($) Rate Asking 420 20 30 0.5

16 24

Vacancy Rate (%) Vacancy 0.0 SF (Millions) SF ( Thousands) SF ( 280 12 18 -0.5 8 12 140 -1.0 4 6

-1.5 0 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Deliveries Under Construction Highlights Direct vacancy in National Landing increased from 10.2% in the fourth quarter 2019 to 12.1% in the first quarter 2020, and has decreased from 14.3% since 10 Year Averages (2010- 2019) first quarter 2019. Total vacancy has increased from 10.6% the fourth quarter 2019 to 12.5% in the Total Absorption 50,037 SF / Year first quarter 2020, and has decreased from 14.4% since first quarter 2019. Deliveries (SF) 120,093 SF / Year The National Landing submarket recorded Leasing Activity 1.1 M SF / Year -197,229 square feet of net absorption during the first quarter of 2020. The negative absorption for the quarter was driven by multiple move-outs Market Stats totaling 123,000-square-feet by Devry University and Chamberlain University at Century One at Inventory 12.9 M SF Century Center - 2450 Crystal Drive.

Direct Vacancy 12.1% Two of the top leases this quarter happened in National Landing. GSA - Department of Defense 12.5% signed 44,989 square feet at Potomac Gateway Total Vacancy North - 2800 Crystal Drive. Also, Hana signed a new lease for 39,000 square feet at Crystal Park YTD 2020 Absorption -197,229 SF Five - 2451 Crystal Drive. YTD Leasing Activity 108,986 SF Institute for Defense Analyses at 701 E. Glebe Road is currently under construction in Crystal City. The Under Construction 474,453 SF 370,000-square-foot building is 100.0% pre- leased to the Institute for Defense Analyses and Percent Pre-Leased 91.0% is set to deliver 1Q 2022. Another building under construction is APTA Centennial Center - 3030 YTD 2020 Deliveries 0 SF Potomac Avenue. The asset is 58.9% preleased 2010: 2019: with American Physical Therapy Association being Asking Rental Rates YTD 2020: $39.31 $38.44 a major tenant. The 104,453 square-foot building (Full Service) $38.79 PSF is set to deliver 1Q 2021. PSF PSF

National Landing 1st Quarter 2020

Major Leases

Potomac Gateway 2800 Crystal Drive Crystal Park Five 2451 Crystal Drive GSA - Department of Tenant Tenant Hana Defense Size 39,000 SF Size 44,989 SF Type Relet Type Relet

Crystal Gateway North 201 12th Street S Jefferson Plaza 1401 S. Clark Street Tenant Joint Strike Fighter Tenant Deloitte

Size 17,290 SF Size 14,786 SF

Type Relet Type Extension

2221 S Clark Street Crystal Gateway 2 1225 S. Clark Street The Public Goods Tenant Tenant American Electronics Projects Size 11,553 SF Size 14,259 SF Type Renewal Type Relet

Jefferson Plaza 1401 S. Clark Street Tenant Clark Construction

Size 11,164 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

National No new sales reported N/A N/A N/A N/A N/A N/A N/A Landing during the quarter

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Institute for Defense Analyses Institute for Defense National Landing 370,000 SF 0 SF 100.0% 1Q 2022 N/A 701 E. Glebe Road Analyses

Meany APTA Centennial Center American Physical National Landing 104,453 SF 42,908 SF 58.9% 1Q 2021 & Oliver 3030 Potomac Avenue Therapy Association Companies

Old Town/Eisenhower Ave 1st Quarter 2020

1.2 27 45 2.5

24 40 2.0 1.0 21 35 1.5

0.8 18 30 ($) Rate Asking 1.0 15 25 0.6

Vacancy Rate (%) Vacancy 0.5 12 20 SF (Millions) SF (Millions)

0.4 9 15 0.0

6 10 0.2 -0.5 3 5

0.0 -1.0 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption

Highlights 10 Year Averages (2010- 2019) Direct vacancy in the Old Town Alexandria & Eisenhower Ave submarket increased from 10.4% in the fourth quarter Total Absorption -2,407 SF / Year 2019 to 10.5% in the first quarter 2020, and has increased from 10.0% since first quarter 2019. Total vacancy Deliveries (SF) 11,419 SF / Year increased from 12.1% in the fourth quarter 2019 to 12.2% in the first quarter 2020, and has increased from 10.5% Leasing Activity 519,383 SF / Year since first quarter 2019.

The Old Town Alexandria & Eisenhower Ave submarket Market Stats recorded -1,872 square feet of net absorption in the first quarter of 2020. The negative absorption was driven by Inventory 12.5 M SF a 12,245-square-foot move-out by the National Credit Union Administration at Carlyle Gateway II -1900 Duke 10.5% Street. Direct Vacancy

The largest lease signed in the Old Town/Eisenhower Ave Total Vacancy 12.2% submarket in the first quarter 2020 was a 21,748-square- foot relet by Atkins North America at Carlyle Center - 1925 YTD 2020 Absorption -1,872 SF Ballenger Avenue. YTD Leasing Activity 92,619 SF One of the top sales this quarter was in the Old Town/ Eisenhower Ave submarket. Carlyle Group - 2034 Under Construction 0 SF Eisenhower Avenue was acquired by Fundrise from ELV Associates for $42,313,653 ($264.46 psf). The Percent Pre-Leased 0.0% 160,000-square-foot asset was 85.7% occupied at the time of sale. YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $34.06 $36.11 $35.53 (Full Service) PSF PSF PSF

Old Town/Eisenhower Ave 1st Quarter 2020

Major Leases

Carlyle Center 1925 Ballenger Avenue

Tenant Atkins North America

Size 21,748 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Old Town & Carlyle Corner $42,313,653 Eisenhower March-2020 Fundrise ELV Associates B 85.7% 2034 Eisenhower Avenue ($264.46 psf) Ave

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

No new construction Old Town & reported during the N/A N/A N/A N/A N/A N/A Eisenhower Ave quarter

Reston-Herndon 1st Quarter 2020

2.0 4.0 25 35 3.5

1.6 3.0 20 28 2.5 Asking Rate ($) Rate Asking 1.2 2.0 15 21 1.5 SF (Millions) Vacancy Rate (%) Vacancy

SF (Millions) 1.0 0.8 10 14 0.5

0.0 0.4 5 7 -0.5

-1.0 0.0 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights Direct vacancy increased from 10.7% in fourth quarter 2019 to 11.9% the first quarter 2020, and has decreased 10 Year Averages (2010 - 2019) from 13.3% since first quarter 2019. Total vacancy has increased from 11.6% in the fourth quarter 2019 to 12.9% Total Absorption 114,035 SF / Year in the first quarter 2020, and has decreased from 14.1% since first quarter 2019. Year-to-date direct vacancy for Deliveries (SF) 63,983 SF / Year Reston was 11.9% and total vacancy was 12.6%. Year- to-date direct vacancy for Herndon was 11.6% and total Leasing Activity 2.8 M SF / Year vacancy was 12.1%.

The Reston-Herndon submarket recorded -377,962 Market Stats square feet of negative absorption. The negative absorption for the quarter was partially driven by a Inventory 32.0 M SF 87,515-square-foot move-out at Reston Crossing West - 2001 Edmund Halley Drive and a 33,096-square-foot move-out at Dulles Station East Building I - 2303 Dulles Direct Vacancy 11.9% Station Boulevard. Total Vacancy 12.5% The largest sale transaction in the Reston-Herndon submarket for the first quarter 2020 was the sale of YTD 2020 Absorption -377,962 SF New Dominion Technology Park, Bldg 1 & 2 - 399 & 499 Grove Street. The 492,601 square-foot building YTD Leasing Activity 431,163 SF park was acquired by USAA from Boston Properties for $256,000,000 ($519.69 psf). The two buildings were Under Construction 1.7 M SF 100.0% occupied at the time of sale. Percent Pre-Leased 93.5% Three of the top ten leases signed in Northern Virginia this quarter were in the Reston-Herndon submarket. Booz YTD 2020 Deliveries 0 SF Allen Hamilton signed a renewal for 125,556-square-feet at 575 Herndon Parkway, which was the largest lease of 2010: 2019: YTD 2020: the quarter. Asking Rental Rates $28.18 $32.49 $33.03 (Full Service) PSF PSF PSF

Reston-Herndon 4th Quarter 2019 Major Leases

575 Herndon Parkway 12018 Sunrise Valley Two Halley Rise Drive Tenant Booz Allen Hamilton Tenant Accenture Size 125,556 SF Size 63,324 SF Type Renewal Type Renewal

12100 Sunset Hills 12100 Sunset Hills RTC West I RTC West I Road Road Tenant VMware Tenant Leidos

Size 53,512 SF Size 31,892 SF

Type Renewal Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

New Dominion Technology Park - $256,000,000 Bldg 1 & 2 Reston-Herndon February-2020 ($519.69 psf) USAA Boston Properties A 100.0% 399 & 499 Grove Street

Liberty Park $27,847,680 Stanley Martin 13625, 13635, & 13645 Dulles Reston-Herndon February-2020 MRP Realty B 0.0% ($287.83 psf) Companies Technology Drive

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

CVS Pharmacy, Reston Station Phase II - Reston-Herndon 195,987 SF 105,210 SF 50.1% 2Q 2020 Comstock Neustar Inc 1906 Reston Metro Plaza

Boston 17Fifty - 1750 Presidents Street Reston-Herndon 276,000 SF 0 SF 100.0% 2Q 2020 Leidos Properties

General Dynamics HQ General General Reston-Herndon 160,000 SF 0 SF 100.0% 2Q 2020 11011 Sunset Hills Road Dynamics Dynamics

Reston Station Phase III - 1902 Reston Metro Plaza Reston-Herndon 221,000 SF 2,600 SF 98.8% 3Q 2021 Comstock ICF International

Reston Gateway Office Bldg A - Boston Sunset Hills Road @ Town Center Reston-Herndon 800,000 SF 0 SF 100.0% 1Q 2022 Fannie Mae Properties Boulevard

1.2 27 45 2.5

24 40 2.0 1.0 21 35 1.5

0.8 18 30 ($) Rate Asking 1.0 15 25 0.6

Vacancy Rate (%) Vacancy 0.5 12 20 SF (Millions) SF (Millions)

0.4 9 15 0.0

6 10 0.2 -0.5 3 5

0.0 -1.0 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in the Rosslyn-Ballston Corridor increased from 15.4% in the fourth quarter 2019 to 15.7% in the first 10 Year Averages (2010 - 2019) quarter 2020, and has decreased from 17.0% since first quarter 2019. Total vacancy increased from 16.3% in the Total Absorption 23,183 SF / Year fourth quarter 2019 to 16.5% in the first quarter 2020, and has decreased from 18.5% since first quarter 2019. Deliveries (SF) 267,726 M SF / Year

The Rosslyn-Ballston Corridor recorded -42,757 square Leasing Activity 2.0 M SF / Year feet of net absorption during the first quarter of 2020. The negative absorption was driven by a 21,815-square-foot move-out at Arlington Tower - 1300 N. 17th Street. Market Stats

The third largest lease of the quarter in Northern Virginia Inventory 25.6 M SF was a 78,926-square-foot renewal/expansion by Airlines Reporting Corporation at Clarendon Center North - 3000 Direct Vacancy 15.7% Wilson Boulevard. Also contributing to leasing activity this quarter was a 37,241-square-foot renewal by ASRC Total Vacancy 16.5% at 1600 Wilson Boulevard and a 28,231-square-foot relet by VentureX at The Navy League Building - 2300 Wilson YTD 2020 Absorption -42,757 SF Boulevard. YTD Leasing Activity 272,939 SF The Loft Office at Market Common - 1650 Edgewood Street, is currently under construction. The 136,172-square-foot Under Construction 136,172 SF property is expected to deliver 3Q 2020 and is currently 20.7% pre-leased. 4040 Wilson Boulevard delivered Percent Pre-Leased 20.7% this quarter. The 240,000-square-foot building is 60.1% leased to Avalon Bay and The Infectious Diseases Society YTD 2020 Deliveries 240,000 SF of America.

2010: 2019: Asking Rental Rates YTD 2020: $40.67 $41.39 (Full Service) $41.88 PSF PSF PSF

Rosslyn-Ballston Corridor 1st Quarter 2020 Major Leases Clarendon Center 3000 Wilson Boulevard 1600 Wilson Boulevard North Tenant ASRC Airlines Reporting Tenant Corporation Size 37,241 SF Size 78,926 SF Type Renewal Type Renewal/Expansion

The Navy League 2300 Wilson Boulevard Ballston Exchange I 4201 Wilson Boulevard Building Tenant AG Associations Tenant VentureX Size 25,000 SF Size 28,321 SF Type Relet Type Relet

1776 Wilson Boulevard 4040 N. Fairfax Drive Tenant NACDS Tenant Internos

Size 21,605 SF Size 20,830 SF

Type Renewal Type Expansion

Ballston Metro 901 N. Stuart Street Colonial Place II 2107 Wilson Boulevard Center I Tenant Primrose Daycare Tenant Two Six Labs Size 14,854 SF Size 18,587 SF Type Relet Type Renewal/Expansion

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

No new sales reported during the RB Corridor N/A N/A N/A N/A N/A N/A quarter

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Loft Office at Market Regency Common - 1650 RB Corridor 136,172 SF 107,971 SF 20.7% 3Q 2020 None Centers Edgewood Street

Deliveries

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Avalon Bay, The Infectious 4040 Wilson Boulevard RB Corridor 240,000 SF 95,850 SF 60.1% 1Q 2020 Shooshan Diseases Society of America

Route 28 North 1st Quarter 2020

0.6 3.00 25 30

0.5 2.35 20 24

0.4 Asking Rate ($) Rate Asking 1.70 15 18

0.3 Vacancy Rate (%) Vacancy SF (Millions) SF (Millions) 10 12 1.05 0.2

5 6 0.40 0.1

0.0 0 0 -0.25 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '13 '15 '16 '17 '18 '19 YTD '20

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights 10 Year Averages (2010 - 2019) Direct vacancy in the Route 28 North submarket decreased from 9.5% in the fourth quarter 2019 to 8.9% in the first Total Absorption 46,548 SF / Year quarter 2020, and has decreased from 12.1% since first quarter 2019. Total vacancy decreased from 9.6% in the Deliveries (SF) 51,739 SF / Year fourth quarter 2019 to 9.0% in the first quarter 2020, and has decreased from 12.3% since first quarter 2019. Leasing Activity 623,379 SF / Year The Route 28 North submarket recorded 178,469 square feet of net absorption in the first quarter of 2020. Positive Market Stats absorption was primarily driven by a 41,319-square-foot move-in by Verizon at Quantum Park E1 - 12100 Loudoun County Parkway. Inventory 9.7 M SF

Only one sale occurred in the Route 28 North submarket Direct Vacancy 8.9% this quarter. Lakeview East & West - 20130 & 20135 Lakeview Center Plaza was acquired by Innovatus Capital Total Vacancy 9.0% Partners from MRP Realty, Inc. for $46,500,000 ($227.80 psf). The two assets were 93.7% occupied at the time of YTD 2020 Absorption 178,469 SF sale. YTD Leasing Activity 129,038 SF The largest lease signed in the Route 28 North submarket this quarter was a 54,000 square-foot relet signed by Under Construction 0 SF Northrop Grumman at Lakeside @ Loudoun Building I - 21351 Ridgetop Circle, representing new growth for Percent Pre-Leased 0% Northrop Grumman. YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $24.20 $25.59 $25.70 (Full Service) PSF PSF PSF

Route 28 North 1st Quarter 2020

Major Leases

Lakeside @ Loudoun 22001 Loudoun County 21351 Ridgetop Circle Quantum Park E2 Building I Parkway Tenant Northrop Grumman Tenant GSA

Size 54,000 SF Size 36,770 SF

Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Lakeview East & West $46,500,000 Innovatus Capital MRP Realty, 20130 & 20135 Lakeview Route 28 North January-2020 A 93.7% ($227.80 psf) Partners Inc. Center Place

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

No new construction reported Route 28 North N/A N/A N/A N/A N/A N/A during the quarter

Route 28 South 1st Quarter 2020

1.0

25 30 1.5

0.8 20 24 1.0

0.6 ($) Rate Asking 15 18

0.5

SF (Millions) 0.4 Vacancy Rate (%) Vacancy SF (Millions) 10 12

0.2 0.0 5 6

0.0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 -0.5 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10' '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 Deliveries Under Construction Leasing Activity Total Net Absorption Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights Direct vacancy in the Route 28 South submarket has increased from 11.9% in the fourth quarter 2019 to 12.2% 10 Year Averages (2010 - 2019) in the first quarter 2020, and has decreased from 14.3% in the first quarter 2019. Total vacancy has increased from Total Absorption 259,505 SF / Year 12.2% in the fourth quarter 2019 to 12.7% the first quarter 2020, and has decreased from 15.1% since first quarter Deliveries (SF) 183,395 SF / Year 2019.

Leasing Activity 803,539 SF / Year The Route 28 South submarket recorded -66,045 square feet of net absorption in the first quarter of 2020. Negative absorption was driven by a 12,334-square-foot move-out at Meadow Point - 14151 Park Meadow Drive. Market Stats

The largest lease signed this quarter was a Inventory 13.3 M SF 54,000-square-foot new lease by Kudu Dynamics at Penrose Center II - 14401 Penrose Place. Also contributing Direct Vacancy 12.2% to leasing activity this quarter was a 29,483-square-foot renewal by Ultra Electronics Ocean Systems at Avion Total Vacancy 12.7% Business Park - 14585 Avion Parkway. YTD 2020 Absorption -66,045 SF Lincoln Park I - 13900 Lincoln Park Drive sold this quarter. The 202,428-square-foot asset was acquired by YTD Leasing Activity 131,398 SF Freidman Capital from Goldman Sachs for $47,100,000 ($231.68 psf) and was 100.0% occupied at the time of Under Construction 125,000 SF sale. Percent Pre-Leased 72.9% Penrose Center II - 11401 Penrose Place, is currently under construction. The 125,000-square-foot property is YTD 2020 Deliveries 0 SF expected to deliver 2Q 2020 and is 72.9% pre-leased to Kudu Dynamics and Ricon Research. 2010: 2019: YTD 2020: Asking Rental Rates $26.31 $26.27 $26.57 (Full Service) PSF PSF PSF

Route 28 South 1st Quarter 2020 Major Leases

Penrose Center II 14401 Penrose Place Avion Buisness Park 14585 Avion Parkway

Ultra Electronics Ocean Tenant Kudu Dynamics Tenant Systems Size 54,000 SF Size 29,483 SF Type New Lease Type Renewal

Victory Pointe at 14200 Park Meadow Penrose Center II 14401 Penrose Place Westfields Drive Tenant Rincon Research Tenant Strayer University

Size 27,000 SF Size 21,382 SF

Type New Lease Type Renewal

Independence Center 15040 Conference II Center Drive Tenant Anavation

Size 14,204 SF

Type Renewal/Expansion

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Lincoln Park I $47,100,000 Friedman Route 28 South January-2020 Goldman Sachs A 100.0% N/A 13900 Lincoln Park Drive ($231.68 psf) Capital

Victory Point at Westfields $23,650,000 AAFMAA Cross Harbor Route 28 South January-2020 A 95.9% 9.00% 14200 Park Meadow Drive ($159.83 psf) Property Capital Partners

DBT International Plaza $12,000,000 Route 28 South February-2020 Development Srinivas Chavali A 100.0% N/A 13775 McLearen Rd ($90.49 psf) Group

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Zumot Penrose Center II - 14401 Penrose Kudu Dynamics, Route 28 South 125,000 SF 133,609 72.9% 2Q 2020 Real Estate Place Rincon Research Management

Springfield 1st Quarter 2020

0.8 30 35 1.00 0.7

0.6 24 28 0.75

0.5 Asking Rate ($) Rate Asking 18 0.50 0.4 21 SF (Millions)

0.3 Rate (%) Vacancy SF (Millions) 12 14 0.25 0.2

0.00 0.1 6 7

0.0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 -0.25 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD ‘20 Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption

Highlights 10 Year Averages (2010 - 2019)

Direct vacancy in the Springfield submarket increased Total Absorption 69,548 SF / Year from 17.9% in the fourth quarter 2019 to 18.6% in the first quarter 2020, and has decreased from 19.1% since Deliveries (SF) 132,350 SF / Year first quarter 2019. Total vacancy increased from 18.0% in the fourth quarter 2019 to 19.6% in the first quarter Leasing Activity 336,476 SF / Year 2020, and has increased from 19.3% since first quarter 2019. Market Stats The Springfield submarket recorded -104,431 square feet of net absorption in the first quarter of 2020. The Inventory 5.7 M SF negative absorption was driven by multiple smaller tenant move-outs. Direct Vacancy 18.6%

6595 Springfield Center Drive is currently under Total Vacancy 19.6% construction. The Boston Properties’ 634,000-square- foot building is 98.9% pre-leased to the GSA-TSA. The YTD 2020 Absorption -104,431 SF building is set to deliver 3Q 2020. YTD Leasing Activity 46,975 SF

Under Construction 634,000 SF

Percent Pre-Leased 98.9%

YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $30.09 $28.91 $29.45 (Full Service) PSF PSF PSF

Springfield 1st Quarter 2020

Major Leases

Property Submarket Tenant Size Type

No new leases reported during the Springfield N/A N/A N/A quarter

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during the Springfield N/A N/A N/A N/A N/A N/A N/A quarter

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Boston 6595 Springfield Center Drive Springfield 634,000 SF 7,000 SF 98.9% 3Q 2020 GSA-TSA Properties

2.0 20 36 3.0

30 2.5 16 1.5 2.0 24 ($) Rate Asking 12 1.5 1.0 18 SF (Millions) Vacancy Rate (%) Vacancy

SF (Millions) 1.0 8 12 0.5 0.5 4 6 0.0

0.0 -0.5 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights

Direct vacancy in the Tysons Corner submarket increased 10 Year Averages (2010 - 2019) from 11.5% in the fourth quarter 2019 to 11.8% in the first quarter 2020, and has decreased from 12.3% the first Total Absorption 278,113 SF / Year quarter 2019. Total vacancy increased from 12.0% in the fourth quarter 2019 to 12.6% in the first quarter 2020, and Deliveries (SF) 325,028 SF / Year has decreased from 12.9% the first quarter 2019. Leasing Activity 2.2 M SF / Year The Tysons Corner submarket recorded -122,517 square feet of net absorption in the first quarter of 2020. A significant contributor to the negative absorption was a Market Stats 26,789-square-foot move-out at The Corporate Office Centre @ Tysons II - 1800 Tysons Boulevard. Inventory 30.1 M SF The fourth largest lease signed this quarter in Northern 11.8% Virginia was in the Tysons Corner submarket. Convene Direct Vacancy signed a 75,000-square-foot lease at 1676 International Drive. Also contributing to leasing activity this quarter Total Vacancy 12.6% was a 24,522-square-foot relet signed by Ocado at 1600 Tysons Boulevard and a 23,982-square-foot relet by YTD 2020 Absorption -122,517 SF Groundswell Consulting Group at 1660 International Drive. YTD Leasing Activity 229,576 SF

Under Construction 383,628 SF

Percent Pre-Leased 0.0%

YTD 2020 Deliveries 0 SF

2010: 2018: YTD 2020: Asking Rental Rates $30.09 $35.41 $35.73 (Full Service) PSF PSF PSF

Tysons Corner 1st Quarter 2020

Major Leases 1676 International Drive 1600 Tysons Boulevard

Tenant Convene Tenant Ocado

Size 75,000 SF Size 24,522 SF

Type Relet Type Relet

1660 International Drive 8270 Greensboro Drive Groundswell Consulting Tenant Tenant DISYS Group Size 20,826 SF Size 23,982 SF Type Renewal Type Relet

American Center East 8300 Boone Boulevard 1951 Kidwell Drive

Tenant Everbridge, Inc. Tenant RiVidium, Inc.

Size 15,527 SF Size 15,275 SF

Type Relet Type Relet

8201 Greensboro Drive

Tenant Kapsch TrafficCom

Size 14,800 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during Tysons Corner N/A N/A N/A N/A N/A N/A N/A the quarter

Under Construction

Property Submarket Building Size Available Pre-leased Delivery Date Developer Major Tenants

Foulger- Tysons Central - Tysons Corner 383,628 SF 383,628 SF 0.0% 4Q 2021 None Pratt 1750 Tysons Central Street