MELON STREET MELON STREET FAIRMOUNT AVENUE MEREDITH STREET PEROT STREET FAIRMOUNT AVENUE 26TH STREET BROWN STREET NORTH STREET OLIVE STREET NORTH STREET 25TH STREET FAIRMOUNT AVENUE WALLACE STREET WALLACE STREET WALLACE STREET FAIRMOUNT AVENUE LEMON STREET MOUNT VERNON STREET LEMON STREET CLAY STREET MOUNT VERNON STREET BROAD STREET 24TH STREET GREEN STREET CLAY STREET 5TH STREET 5TH WILCOX STREET GREEN STREET FRONT STREET 23RD STREET 4TH STREET 22ND STREET 21ST STREET 21ST 3RD STREET 6TH STREET 17TH STREET 16TH STREET 18TH STREET 19TH STREET 15TH STREET 20TH STREET 2ND STREET BRANDYWINE STREET 7TH STREET 8TH STREET 8TH 12TH STREET SPRING GARDEN STREET BRANDYWINE STREET STREET 11TH 13TH STREET 9TH STREET MONTEREY STREET 10TH STREET Spring Garden Street Spring Garden Street Buttonwood Street Buttonwood Street Hamilton Street Willow Street 76 Noble Street Ridge Avenue Philadelphia market overview Callowhill Street Wood Street Wood Street 95 Vine Street Vine Street Summer 2009 76 Schuylkill 20 The Philadelphia CBD continues to see its vacancy rate increase River Spring Street 676 and leasing activity slow. Recent sales transactions 21 Building Square feet Price/s.f. Leased Race Street Race Street Broad Street 3501 Market Street 145,000 $217 0.0% 42 1515 Market Street Suite 1000 7 22 Buyer: Drexel University Cherry Street Cherry Street Philadelphia, Pennsylvania 19102 Development stalled in the CBD as troubles in the credit market 1 Seller: Thomson Reuters 8 +1 215 988 5500 curtailed lending. 14 Unisys Technology Center 360,000 $54 50.0% Arch Street Arch Street www.us.joneslanglasalle.com Buyer: Exeter Property Group 23 Seller: Unisys Corporation Transaction activity remains severely constrained as a result of 15 24 John F Kennedy Boulevard John F Kennedy Boulevard Perspective on a Five Tower Bridge 223,736 $326 97.0% 9 10 25 31 the credit crisis and the nation’s most severe recession in Buyer: KBS REIT 2 3 16 17 6 11 12 26 40 Seller: Oliver Tyrone Pulver 27 32 decades. Market Street Market Street 1600 Callowhill Street 88,717 $180 100.0% 4 5 13 18 19 29 28 33 changing market Buyer: Urban America 34 39 Jones Lang LaSalle (NYSE:JLL) is corporate offices. The firm is an Seller: Rubicon America Trust JV NGP Capital 22nd Street 21st Street 20th Street 19th Street 18th Street 17th Street 30 16th Street 15th Street 13th Street 12th Street 11th Street 10th Street 9th Street 8th Street 7th Street 6th Street 5th Street 4th Street 3rd Street 2nd Street 1st Street Christopher Columbus Boulevard 35 38 a financial and professional industry leader in property and Chestnut Street Chestnut Street services firm specializing in real corporate facility management estate. The firm offers integrated services, with a portfolio of Philadelphia Skyline Review Sansom Street Sansom Street services delivered by expert teams approximately 1.4 billion square feet lenders are extending term or granting previous years. Magnifying this lack of liquidity worldwide to clients seeking worldwide. Supply vs. demand Development Walnut Street increased value by owning, borrowers forbearance. There are currently is the fact that underwriting standards and Walnut Street LaSalle Investment Management, Significant opportunities exist for tenants with Development stalled in the CBD as troubles in 37 43 occupying or investing in real95 estate. the company’s investment manage- good credit to renegotiate existing leases or the credit market curtailed lending. After over $300 billion in commercial mortgages mortgage terms have tightened for all active 36 With 2008 global revenue of $2.7 ment business, is one of the world’s achieve favorable economic and operating breaking ground in November 2007, estimated to mature each year from 2009 lenders. Locust Street Locust Street billion, Jones Lang LaSalle serves largest and most diverse in real lease terms. The Philadelphia CBD continues Brandywine Realty Trust suspended through 2011. 41 clients in 60 countries from 750 estate with more than $41 billion of to see its vacancy rate increase and leasing construction on the 600,000 square foot Cira Despite all of the above, we do forecast locations worldwide, including 180 assets under management. Spruce Street Spruce Street activity slow. There are five blocks of space Centre South. The City Council approved Pools of opportunistic equity have gathered moderate sales activity for the remainder of over 100,000 square feet available for lease. Walnut Street Capital’s plans for the 2.2 on the sidelines waiting for these distressed 2009. There is some product available for 76 Landlords are willing to negotiate on rental million square foot American Commerce assets to hit the market and create a sale, there are some sellers who have specific Broad Street Pine Street rate terms and concessions. Additionally, Center but no ground-breaking date has been perceived market “bottom”. As transaction motivation to sell assets, and there are some Pine Street tenants who wish to defray the costs set. activity begins to increase, data will be distressed assets that are already coming to Philadelphia market locations Lombard Street Lombard Street associated with moving, will be more provided to an information starved market. the market. Once a few of these transactions 1 2929 Arch, Cira Centre 12 1801 Market, Ten Penn Center 23 1650 Arch 34 1500 Market, Centre Square East 27th Street Taney Street 26th Street 25th Street 24th Street 23rd Street Naudain Street confident approaching their landlords to This will collectively provide effective trading have closed, and the recently passed fiscal 2 2005 Market, One Commerce Square 13 1818 Market 24 1617 JFK Blvd, One Penn Center 35 1 Penn Sq W, Graham Bldg South Street recast or renew their lease. Investment activity ranges for all assets, giving guidance to both stimulus package begins to have an impact on 3 2001 Market, Two Commerce Square 14 1717 SouthArch, Street Bell Atlantic Tower 25 1600 JFK Blvd, Four Penn Center 36 1525 Locust KATER STREET Transaction activity remains severely buyers and sellers in the current environment. the economy, improving real estate 4 2000 Market 15 1701 JFK Blvd, Comcast Center 26 1635 Market 37 200 S Broad When these transactions occur, we will likely fundamentals, there should be a sustainable BAINBRIDGE STREET BAINBRIDGE STREET BAINBRIDGE STREET BAINBRIDGE STREET constrained as a result of the credit crisis and 5 1900 Market 16 1735 Market, Mellon Bank Center 27 1601 Market 38 1 S Broad see cap rates at least 250 to 300 basis points increase in real estate investment activity. PEMBERTON STREET KENILWORTH STREET Economics the nation’s most severe recession in MONROE STREET 6 1901 Market, Blue Cross 17 1701 Market, Six Penn Center 28 1650 Market, One Liberty Place 39 100 Penn Sq E, Wanamaker Bldg MONROE STREET SCHUYKILL AVENUE higher then their bottom in 2007. FITZWATER STREET FITZWATER STREET FITZWATER STREET PEMBERTON STREET February unemployment for the Philadelphia- decades. Overall volume was down 70% in 7 130 N 18th, One CLYMERLogan STREET Square 18 1760 Market 29 1600 Market, PNC Bank Bldg 40 1101 Market, Aramark Tower Camden-Wilmington area finished at 8.0 2008 and early results for 2009 show FITZWATER STREET 8 100 N 18th, Two STLogan ALBAN’S PLACE Square 19 1700 Market 30 50 South 16th, Two Liberty Place 41 230 W Washington Square GRAYS FERRY AVENUE CATHARINE STREET CATHARINE STREET CATHARINE STREET CATHARINE STREET A significant increase in activity will also Office outlook STREET SWANSON percent, a more than 3.0 percentage point significant further decreases in transaction FULTON STREET 9 1880 JFK Blvd KAUFMANN STREET RD MADISON STREET 20 1600 Vine, Three Franklin Plaza 31 1500 JFK Blvd, Two Penn Center 42 190 N Independence Mall W FULTON STREET MADISON STREET MADISON STREET CATHARINE STREET require an upsurge in liquidity in the debt The Philadelphia CBD will continue to NORFOLK STREET jump from one year ago. The Philadelphia activity year over year. A reversal in trend for STREET TANEY STILLMAN ST CHRISTIAN STREET CHRISTIAN STREET 10 1800 JFK Blvd CHRISTIAN STREET 21 200 N 16th,CHRISTIAN STREET One Franklin Plaza 32 1515 Market 43 510-530 Walnut markets. CMBS debt, which had steadily experience rising vacancy rates for the rest of CATHARINE STREET Suburbs and Southern New Jersey’s finance 2009 would require significantly increased QUEEN STREET MONTROSE STREET 11 1835 Market 22 1601 Cherry,MONTROSE STREET Three Parkway 33 1500 Market, Centre Square West MONTROSE STREET increased over the last decade, so that at its 2009. Currently, asking rental rates remain BOULEVA COLUMBUS CHRISTOPHER CHRISTIAN STREET QUEEN STREET 23RD STREET and mortgage-based economies stagnated 22ND STREET liquidity in the real estate debt markets or a STREET 21ST 25TH STREET 12TH STREET 24TH STREET 11TH STREET 11TH 19TH STREET 13TH STREET 17TH STREET 16TH STREET 15TH STREET 18TH STREET 20TH STREET CARPENTER STREET CARPENTER STREET CARPENTER STREET and led to increased unemployment. major increase in the velocity of distressed peak in 2007 it represented over $230 billion high but landlords will eventually lower them to 10TH STREET 9TH STREET KIMBALL STREET KIMBALL STREET BROAD STREET KIMBALL STREET MONTROSE STREET 8TH STREET KIMBALL STREET of activity and was over 55% of the reflect actual taking deals. Fewer tenants in 7TH STREET Comparatively, the education and healthcare- asset sales. 6TH STREET LEAGUE STREET LEAGUE STREET 5TH STREET CHRISTIAN STREET 4TH STREET commercial real estate debt market, is the market will result in negative absorptionPELTZ STREET CARPENTER STREET 3RD STREET FRONT STREET FRONT based economy insulated the Philadelphia 2ND STREET WASHINGTON AVENUE WASHINGTON AVENUE WASHINGTON AVENUE CBD from severe layoffs but current trouble in Distressed sales may take much of 2009 to currently almost non-existent. The remaining increasing. Long term renewals will be more the legal services industry (as evidenced by develop as the number of troubled loans debt options, commercial banks and frequent as tenants look to deflect the capital the dissolving of WolfBlock, LLP) could lead to approaching maturity increases.