Twinbrook Office Center MID-ATLANTIC CAPITAL MARKETS GROUP 1700 Rockville Pike Offering Memorandum Rockville, MD

1700 ROCKVILLE PIKE

HALPINE RD

CHAPMAN AVE

TWINBROOK

ROCKVILLE PIKE METRO STATION

BOUIC AVE

THOMPSON AVE

ROLLINS AVE TWINBROOK PKWY 1700 Rockville Pike

Executive Overview...... 6

The Future of Twinbrook...... 14

Property Specifications...... 20

Tenancy...... 30

Financial Analysis ...... 42

DEAL CONTACTS Gerald P. Trainor 202.775.7091 [email protected]

James V. Cardellicchio 202.775.7094 [email protected]

Wesley M. Machowsky 202.775.7038 [email protected]

LEASING Jovi McAndrew 301.896.9122 [email protected]

Scott Randolph 301.896.9055 [email protected]

FINANCING Cary Abod 202.533.2513 [email protected]

EXECUTIVE OVERVIEW 6 EXECUTIVE OVERVIEW

Transwestern’s Mid-Atlantic Capital Markets Group, as the exclusive representative for the owner, is pleased to PROPERTY AT-A-GLANCE present the fee simple sale of a 163,194 SF Class B+ office building commonly known as Twinbrook Office Center located at BUILT/RENOVATED: 1983 / 2013 1700 Rockville Pike in Rockville, Maryland (the “Property”). This SQUARE FOOTAGE: 163,194 SF 6-story value-add office building is adjacent to the Twinbrook Metrorail Station within a submarket that is undergoing a TYPICAL FLOOR: 28,000 SF significant revitalization to a transportation oriented live-work- play town center. STORIES: 6-stories; center-core 654 total spaces: The building is currently 71% occupied with an average lease ON-SITE PARKING: 534 covered garage spaces term of 4-years. The Property has stable cash flow with immediate 120 surface spaces upside through the lease up of the vacancy space. Longer term value creation can be achieved through the redevelopment of PARKING RATIO: 4.0 / 1,000 SF the Property in an effort to maximize its density. OCCUPANCY: 70.8% (May 2016) Further upside will be achieved as rents at the Twinbrook YEAR 1 NOI: $2,196,419 (pro forma) Metro Station outpace the rest of the market as a result of the transformation of the neighborhood into an amenity driven town STABILIZED NOI (YR 3): $3,358,857 (pro forma) center. Adjacent mixed use projects such as the Galvan and Pike & Rose have already established the amenity base that are an integral part of a successful town center environment.

SUMMARY OF TERMS

INTEREST OFFERED: Fee Simple

EXISTING DEBT: None; Free and Clear

OFFERS DUE: April 22, 2016

Please note that this asset is being sold “As Is, Where Is” by a Special Servicer. The following list of documents have been posted on-line in the “war room”:

• Leases • Income/Expense Reports • Rent Roll • Reimbursement Schedules • Environmental Report (March 2016) • Property Condition Report (March 2016) • Title Report (March 2016) • Purchase and Sale Contract

This information has been made available to expedite investors underwriting process and to minimize the due diligence period. Strong preference will be given to those investors that do the majority of their due diligence in advance and provide contract comments upon bidding. dius ra ile m 5 INVESTMENT HIGHLIGHTS .2 0 ►► Secure Cash Flow • 71% leased to strong mix of national tenants: Merck, Novartis Pharmaceuticals, Bayer Pharmaceuticals, 1700 ROCKVILLE PIKE Johnson & Johnson, AbbVie (f/k/a Abbott), Dovel Technologies and BarnAllen Technologies TWINBROOK • 14.2% of building is investment grade credit (23,243 SF) METRO STATION • Average lease term of 4 years

►► Opportunity to purchase well below replacement cost ►► Upside Potential • Lease up of vacant suites (47,692 sf) • Reposition retail in front of Metrorail Station • Average lease rate • Above average projected rent growth as neighborhood transforms to “Urban Town Center” • Opportunity to add density to existing structure or redevelop entire site ►►Redevelopment Potential — Zoned MXTD • Mixed use designation (office, retail, multifamily) • Unlimited density subject to setback requirements • 120’ height by right; up to 150’ with approvals

PROPERTY HIGHLIGHTS

►► Class A Location • Adjacent to Twinbrook Metrorail Station • Visibility and Access off Rockville Pike • Walkable Amenities

►► Quality Class B+ Office Building • Renovated in 2013 – Lobby, Restrooms, Elevator Cabs • Efficient 28,000 SF floor plates with high glass-to- floor ratio • Floor Plates ideal for both single and multi-tenant use • 3 levels of below grade parking – 4.0 / 1,000 • Flexible Climate Control – Tenant controlled heat pumps 8 EXECUTIVE SUMMARYOVERVIEW

REGIONAL OVERVIEW

Market Fundamentals OFFICE DEMAND AND DELIVERIES SUBURBAN MARYLAND | THROUGH DECEMBER 2017 ►►The Washington, DC metropolitan area grew 70,600 1.8 DEMAND net new jobs for the 12-month period ending January 1.6 = 1.6 million SF 2016; versus the historical 12-month average of 43,400 1.4

►►Another 53,200 net new jobs are projected to be added 1.2 DELIVERIES

to the Washington, DC economy in 2016 1.0 = Planned and may ►►Suburban Maryland represented 40% of the 0.8 deliver by 12/17: 200,000 SF metropolitan area’s job growth with 28,400 net new 0.6 = Under Construction

jobs during the past 12 months with an additional SF OF IN MILLIONS 0.4 461,000 SF 18,000 jobs projected in 2016 0.2 ►►As a result of such strong job growth, demand for office Total = 761,000 SF 0.0 space in Suburban Maryland is anticipated to outpace supply as these are high wage, office using jobs Source: Transwestern.

Regional Payroll & Employment PAYROLL JOB GROWTH WASHINGTON METRO AREA ►►The Washington, DC metropolitan area employs 3.2 million; 140 the sixth largest job market behind New York, LA , Chicago, 120 Dallas/Ft. Worth, and San Francisco Bay Area 5-Year Projected Average = 47,700/Year 100 20-Year Annual Average = 43,400/Year ►►The metropolitan area’s unemployment rate is the 3rd lowest 80

in the country at 3.8%; well below the national average of 60

4.8% 40

►►Federal budget cuts and sequestration are no longer 20

occurring and the federal government continues to fuel 0 200020012002200320042005200620072008200920102011201220132014201520162017201820192020 the metropolitan area’s economy with over $70 billion of -20

procurement spending in 2015. JOBS AVERAGE) (ANNUAL -40 THOUSANDS OF NEW PAYROLL OF NEW PAYROLL THOUSANDS ►►The federal government’s procurement spending continues to -60 shift job growth to the private sector as government contractors District Sub. MD No. Virginia represent 15% of the metropolitan area’s workforce ►►Locally, Montgomery County receives approximately $8.6 Source: Bureau of Labor Statistics, Moody’s, Transwestern. billion of the federal government’s procurement spending primarily via the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) UNEMPLOYMENT RATE LARGE METRO AREAS | DECEMBER 2014 VS. DECEMBER 2015 ►►The Professional/Business Services sector will lead job growth 8% December 2014 through 2020 with high paying, office using jobs that have a National 7% December 2015 high multiplier effect on the economy Average 6% 5.4% 5% 4.8% Regional Outlook 4% 3% ►Strong private sector will continue to drive the region’s ► 2% economic expansion with health care, education, and cyber UNEMPLOYMENT RATE UNEMPLOYMENT security fueling the growth 1% ►►Job growth will continue to strengthen consumer confidence 0% DFW Den Hou SF Bay Bos Was Phx Phil Atl NY Chi LA ►►Imbalance between office supply and demand will result in Basin declining future vacancy rates Source: Bureau of Labor Statistics, Transwestern. MONTGOMERY COUNTY OVERVIEW

Montgomery County is the largest employment center in the State of Maryland, and the second largest in the Washington, DC region. It is commonly known for its bio-medical and technology industries that span the I-270 corridor (“DNA Alley”) and home to the National Institutes of Health (NIH) and Department of Health and Human Services (HSS). As a result, the county has evolved into an international business center with one of the most highly educated workforces in the nation.

►►Montgomery County is home to 19 prominent federal agencies including the US Department of Health and Human Services, the National Institutes of Health and the National Oceanic and Atmospheric Administration. • 61% of all Maryland procurement spending is allocated to Montgomery County. • 59% of the Washington, DC metropolitan area’s HHS procurement funds are spent in Maryland, with the majority of spending allocated to Montgomery County. Professional & Business Services 21.60% •Government Over the past seven years, HHS’s18.60% procurement spending in Montgomery County has increased on average 5.6%. During 2015, Education & Health Services 14.30% MONTGOMERY COUNTY PROFESSIONAL INDUSTRIES Retailspending Trade increased 7.1%, which10.10% is anticipated to boost commercial real estate demand from government contractors. Leisure & Hospitality 9.00% ►►MontgomeryFinancial Activities County is home to 1186.90% corporate headquarters. ►►ConstructionMontgomery County boasts the 12th5.70% highest median household income in the country at $94,365 per year. Other Services 5.30% Manufacturing 2.80% Information Technology 3.75% WholesaleMontgomery Trade County’s office 2.05%market is propelled by more than 525,000 workers employed by 32,000 diverse businesses – including 1,200 IT companies.

3.75% 2.05% 2.80% Professional & Business Services

5.30% 21.60% Government Education & Health Services 5.70% Retail Trade

6.90% Leisure & Hospitality Financial Activities

Construction 9.00% 18.60% Other Services

Manufacturing 10.10% Information Technology 14.30% Wholesale Trade 10 EXECUTIVE OVERVIEW

ROCKVILLE OVERVIEW

The City of Rockville is the most dynamic jurisdiction within Montgomery County. It features a diverse tenant base, anchored by a strong biotech & life sciences presence, an abundance of retail amenities catering to an affluent demographic pool, and a thriving stock of multifamily and single family home communities.

STATE OF THE MARKET ROBUST DEMOGRAPHICS

►► Rockville’s current vacancy is 11.90% and projected to ►► Rockville is currently home to approximately 68,000 residents continue to decline due to increasing traction in the biotech & and expected to dramatically increase through the approved life sciences industries. development surrounding Twinbrook Metro station. ►► Current vacancy has fallen from 16.3% in Q3, 2014 to 11.90% • Rockville is the 3rd most populous cities in Maryland, today. following Baltimore City and Frederick. ► Rockville outpaced all Montgomery County submarkets ► ►► Rockville is one of Maryland’s fastest growing jurisdictions by nearly 50% in Q4, 2015 with 144,000 SF of net positive with its population increasing 29.2% over the last decade and absorption. is anticipated to surpass this growth in the next decade. ►► Demand is driven by the one-and-a-half mile stretch of Rockville Pike along Metrorail’s Red Line, a heavy concentration of several million square feet of retail, further POPULATION GROWTH augmented by the creation of a walkable streetscape. 2000—2010 ►► The influx of mixed-use development will continue to drive vacancy rates lower and create distinct neighborhoods, such as the Pike & Rose community and the Twinbrook Station project. ►► Product located within immediate proximity to Metrorail has been shown to outperform product that is not located in walking distance. • The office product located within 0.1 mile radius of the Grosvenor, White Flint, & Twinbrook Metro station has an aggregate vacancy rate of less than 4%. ►► Historically, the Rockville submarket has had an average vacancy of 8.92% and annual net absorption of positive 96,981 SF from 1993 to 2015. Vacancy rates are anticipated to drop as Rockville transitions from a suburban market to an urban mixed use community. ►► Rockville is projected to transition to a landlord dominated market by 2017 as demand continues to rise for metro-oriented, amenity rich office space. Rockville Household Income

3.60% 4.70% 4.37% <$15,000 4.37% HOUSEHOLD INCOME 5.72% 7.58% $15,000-24,999 $25,000-34,999 7.83% $35,000-49,999 ►► Rockville’s median household income of $98,530 is nearly 12.76% $50,000-74,999 double the national average of $53,482 and 25% more than 13.15% $75,000-99,999 9.50% Maryland itself. $100,000-124,999 14.28% 12.16% $125,000-149,999 $150,000-199,999

BIOTECH & LIFE SCIENCES HUB Biotech & Life Sciences Presence within Rockville

►► The State of Maryland is the 4th strongest biotech & life National Institute of Health sciences cluster in the United States, following the San National Institute of Allergy & Infectious Diseases Francisco Bay Area, Boston/Cambridge, and San Diego. As such, the City of Rockville serves as Maryland’s economic National Institute on Abuse engine, home to over 190 of Montgomery County’s 350 National Human Genome Research Institute biotech & life sciences companies. Rockville is comprised of I-270 Technology Corridor and Rockville Pike Corridor, a US Food & Drug Administration nationally recognized hub of biotech & life sciences research and development. Companies are drawn to hubs such as United States Pharmacopeial Convention these due to the numerous advantages that arise from Fisher Bioservices collaboration. The table to the right represents some of the most prominent employers within Rockville’s Biotech & Life Otsuka America Pharmaceutical, Inc. Sciences sector. Supernus Pharmaceuticals, Inc.

MacroGenics, Inc.

National Institute of Health (NIH)

THE FUTURE OF TWINBROOK 14 THE FUTURE OF TWINBROOK

ABOUT TWINBROOK The City of Rockville and private developers have made significant strides towards transforming Twinbrook from a once automobile dominated, arid suburb to a vibrant live-work-play community that residents are proud to call home. Developments are concentrated around the Twinbrook Metro station (Red Line), and carefully address density, public space, and a variety of building uses and styles. The mix of building uses includes commercial office, street level retail, and residential, comprised of both townhomes & apartment communities. Buildings with the highest density, 8 to 14 stories are located closest to the Metro station, gradually transitioning to the lowest density buildings, 4 to 6 stories towards the periphery. Similarly, public amenity space is concentrated around the Metro station and emphasis is placed on walkability as local retail shops and eateries emerge. The City’s progressive planning efforts combined with innovation from the private sector is rapidly transforming the fabric of the neighborhood into a dynamic urbane locale, while preserving its distinct small town charm.

PUBLIC TRANSIT ACCESS BIKEABILITY & WALKABILITY Providing the infrastructure in Twinbrook to enable bicycling is a top The City of Rockville in concert with private developers are working priority for the City of Rockville. There are dedicated bike lanes along together to interweave existing neighborhoods and promote a transit- the Twinbrook Parkway, a half mile from the Property and Parklawn oriented, pedestrian-friendly environment in which to live, work, shop, Drive, 1 mile from the Property. A third bike path is planned to connect dine, and play. At the forefront of this initiative is The JBG Companies’ existing trails in Rock Creek Park and along Vier Mill Road. Developers (JBG) Twinbrook Station development, named one of the top 14 Transit have also stepped up to provide amenities for bicycling. JBG has made Oriented Development (TOD) sites statewide. Defined as dense, mixed- a conscious effort to promote bicycling by providing options throughout the Twinbrook Station project to encourage the utilization of bicycles. use deliberately-planned communities, within a half-mile of transit For example, The Alaire apartment community offers its residents a stations, TOD sites capitalize on multimodal transportation methods, bike share program and provides bike storage in the parking garage. most notably Metrorail accessibility, a network of dedicated bike lanes/ Meanwhile the Terrano apartment community, has its own bike shop, paths, and an expanded pedestrian network to create an inviting, known as Revolution Cycles. JBG’s office building located at 5615 Fishers walkable community for residents and visitors alike. Lane will also offer a public garage for bike storage. The developer is also in conversations to bring Capital Bike Share to the neighborhood—A As such, Twinbrook’s neighborhood streetscape is being improved recent survey of businesses located near Capital Bikeshare stations in through the provision of the following: Washington, DC, found that 20% of businesses saw an increase in their ►► Clear hierarchy of streets, wider sidewalks, and improved sales, and 70% said they saw a positive impact” on the surrounding area. crosswalks (Source: Buehler & Hamre). ►► Effective signage and more lighting ►► Infrastructure to encourage bicycling ►► Public gathering spaces (i.e. Parks, Community Space) WALKABILITY ►► Multi-modal transportation methods (i.e. Capital Bike Share, Zipcar) The public and private sector are working to transform Twinbrook into a more walkable neighborhood by implementing a clear hierarchy of streets, wider sidewalks, and improved crosswalks. These efforts are METRO ACCESSIBILITY further augmented by the provision of public spaces to help create a sense of community. The developer will be creating a public space known as Village Green as the centerpiece of the Twinbrook Station The subject Property is located adjacent to the Twinbrook Metro station, project to host community events. Their other sites such as 5635 and offering access to Downtown, DC on the Red Line. The commute from 5625 Fishers Lane offer a courtyard space between the buildings, set up Twinbrook to Washington, DC takes less than 30 minutes via Metrorail for community events, including a weekly farmers market. as compared to 40 minutes driving, in addition to time allotted for traffic. For those who need a car for sporadic occasions, Zipcar is Walk Score is a well-known service that measures the walkability of any location based on the distance to nearby places and pedestrian available in immediate proximity to the Twinbrook Metro station, at the friendliness. A score between 90-100 is the highest allocation receivable, Congressional Plaza. Furthermore, in order to encourage sustainable implying daily errands do not require a car. 70-89 is the second tier, practices for those who do drive, Blink electric vehicle charging stations implying most errands can be accomplished on foot. The subject have been implemented at nearby sites. Property falls into this second tier, and is on pace to be promoted to tier 1 as upcoming developments unfold. EVOLVING MARKETPLACE TWINBROOK STATION TWINBROOK STATION COMMERCIAL JBG Companies in partnership with Washington Metropolitan Transit Located adjacent to the Metro, The Mark at Twinbrook Station will be a Authority (WMATA) is in the process of redeveloping the immediate quality 325,000 square foot office building designed to attract quality area surrounding the Twinbrook Metro station into a 26-acre, 2.2 million tenants to the Rockville market. The Mark’s signature design incorporates square foot, mixed use community known as Twinbrook Station (www. a dynamic glass and stone facade with crisp, elegant detailing. The twinbrookstation.com). Upon full-build out of the project it will be building will provide a contemporary lobby and spacious terraces. All 13 comprised of 325,000 square feet of office space, 1,595 multifamily floors will feature luminous, flexible workspace and premium finishes. residential units, 220,000 square feet of retail, and a new public park. The building will also include 20,000 square feet of street level retail. The subject Property was part of the master plan, but was lost to the Designed by nationally renowned architect David M. Schwarz, The Mark lender along with the adjacent hotel. Nevertheless, the balance of the plan is moving forward. is a LEED Core and Shell Silver registered building.

Twinbrook Station is the flagship project of the US Green Building Council’s environmental pilot program, Leadership in Energy and Building Specs: Environmental Design Neighborhood Development (LEED ND). ►► 325,000 SF of office space The developer’s plan earned the site LEED Gold Certification for ►► 20,000 SF of retail Neighborhood Development from the U.S. Green Building Council for ►► Virtually column free space combining principles of smart growth, urbanism and green building into the overall design of the entire neighborhood. It was the first LEED-ND ►► Efficient, flexible floor plans plan in the Washington, DC region and a model for the country. Eighteen ►► Spacious tenant terraces of these types of projects are now underway in the Washington, DC area ►► Direct Metro access (Red Line) and 300 projects nationwide. ►► Proximate to I-495, I-270, and Route 355

The Property benefits from exceptional vehicular access via TWINBROOK STATION Rockville Pike and the Twinbrook Metrorail. It is surrounded by prominent research & development leaders such as US MULTIFAMILY Pharmacopeial, The National Institutes of Health, and the The multifamily coming online as part of the Twinbrook Station project is Federal Food & Drug Administration. Furthermore, the Property truly transforming the area into a live-work-play environment. The Alaire, is proximate to the 15 mile stretch of I-270 commonly known a 380,795 SF, 279 unit building and The Terano, a 170,000 SF, 214 as “DNA Alley,” the heart of a heavily concentrated and thriving unit building are sister buildings, situated east of the Twinbrook Metro biotech & lifesciences sector. Furthermore, The Property offers station. The Galvan, a 360 unit building is currently under construction the convenience of being adjoined to the Hilton Hotel and west of the metro station, and is expected to deliver by mid-2016. The restaurant. It is also in walking distance from an extensive building will also include approximately 100,000 SF of retail, anchored amenity base that includes Congressional Plaza and the by Safeway (60,952 SF). Tenancy will include an Ethan Allan Design numerous retailers below the newly constructed Alaire and Center, 99 Barbershop, Pie 360, and Dunkin Donuts. Terano apartment communities. The Alaire 1101 Higgins Place ►► 279 units, currently 94% leased ►► LEED Gold certified The Terano 5700 Fishers Lane ►► 214 units, currently 92% leased ►► LEED Gold certified Galvan 1801 Chapman Avenue ►► 356 apartments, currently 29% ►► Designed to be LEED Silver

1700 ROCKVILLE PIKE 15 18

1700 ROCKVILLE PIKE 16

TWINBROOK METRO STATION 7 1 6 ROCKVILLE PIKE 11

2 10 17 5 9 4 14 3 8

18 Y W K 12 P OK 13 RO INB TW ROLLINS AVE 19 23 20

21 22 TWINBROOK STATION THRIVING BIOTECH & LIFE SCIENCES HUB APPROVED PROJECTS GROWING AMENITY BASE DEVELOPMENT 0.7 mile 0.7 mile 0.7 0.4 mile0.4 mile0.4 mile0.4 mile0.4 0.4 mile0.4 0.4 mile0.4 mile0.4 0.6 mile 0.6 mile 0.5 mile 0.5 mile 0.2 mile 0.2 mile 0.2 mile 0.3 mile 0.2 mile 0.2 mile 0.2 mile 0.5 mile 0.2 mile 0.3 mile TO METROTO PROXIMITY ------on a 15 year on a 15 DESCRIPTION (935,386 SF) through 7/2030. munity with 99,500 SF of ground floor retail and restaurant space, anchored SF Safeway by a 60,952 grocery store. LEED Silver. and substantiallyBuilt 1967 in SF office 55,728 renovated 1997. in building, 100% leased to the US Food & Drug Administration through 2/2023. Built and substantially 1980 in renovated 69,300 SF shop 1964. in ping center, anchored by Pier 1 Imports. Tenancy includes various Wireless,AT&T TGI Friday's, and FedEx. Built in 2010. 279-unit,Built 2010. in Class A, multifamily community with 15,000 SF of ground floor retail. LEED Gold. 214-unit,Built Class 2015. in A multifamily community with 332,000 SF of ground floor retail. LEED Gold. Expected to deliver 360-unit, mid-2016. Class A, multifamily com A office SF,Class 100%building, leased 515,717 Built 2014. to in Diseases Infectious & Allergy of Institute the National term. LEED Gold certified. Built 2004. in 165,000 SF office and R&D facility,100% leased to the National Institutes of Health on a long term basis. SF building,Built anchored 2004. in 185,511 by the National Insti tute on Alcohol Abuse and Alcoholism (55,522 SF) and the National Human Genome Research Institute (27,761 SF) Built in 1972 and substantiallyBuilt 1972 in renovated SF office 93,014 2009. in building, 100% leased by the Federal Drug Administration on a long term basis. and substantiallyBuilt 1970 in renovated 1,332,482 SF 1970. in office building, anchored by the US Departmentof Health & Human Services Development of 238-unit, Class A multifamily community. Construc Redevelopment SF office of a 14,697 building to a child day care facility able children. to house to up 167 and substantiallyBuilt 1962 in 336,000 renovated SF 1997. in shopping center, anchored by Giant, Marshalls, The Sports Authority, and Barnes & Noble. Built office Two 1984. in buildings, 60,000 SF and 4,626 SF respec SF of retail Total space, of 237,437 and 1978. anchoredBuilt 1970 in by Ross Dress for Less and Maxx. TJ Tenancy includes Trader Joe's, Ruby Sprint, Tuesday, and Planet Fitness. Redevelopment of 99,000 SF retail strip center to a mixed used site comprised of 140,000 SF office; 44,000 SF health10,000 club; SF retail; 9,000 SF restaurant with 1,500 SF of outdoor seating. Includes structured 781 parking spaces. Addition of a restaurant/bar, known as Green Turtle and associated 1,000 SF of outdoor seating space. Development SF retail of a 9,272 strip center including Cardinal Bank with a full drive-through. Redevelopment of the southwest corner of Congressional Plaza shopping SF multifamily center to a 77,250 building comprised of 48 units. Includes parking 71 spaces. Redevelopment of a 105,000 6-story office building. The developer will convert approximately 13,200 SF of deck level parking space to SF of retail10,700 and an approximately 2,500 SF fitness center. tion is scheduled to begin 6/2016. Built-to-site, approved for office development and ready for con struction. Former site of Syms Department store, a discount retailer. Initially intended to be redeveloped into 658 multifamily units units (319 phasein 1 & 339 units phase in the 2), developer amended their proposal for phase 2 from 339 multifamily units townhomes. to 70 SF of retail.Includes Phase 5,152 1 has already begun while Phase 2 is under review. tively. 345,000 Class A mixed SF, use development Under STATUS Existing Existing Existing Existing Existing Existing Existing Existing Existing Approved Approved Approved Approved Approved Approved Approved Approved Approved Approved Renovated Renovated Renovated Construction TBD Hines OWNER SJKAIA Inc. Learner Corp. Learner Federal Realty Federal Realty Federal Realty Carr Properties Carr Bright Horizons JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies JBG Companies BF Saul Company Weingarten Realty The Albermarle Group/ AvalonBay Communities

Town Plaza Rockville Pike12236-12250 Federal Plaza Twinbrook Metro Park Twinbrook Parkway12750 Pike Shopping Center Rockville Pike 12103-12147 Crossing Montrose Rockville12055 Pike E Jefferson1776 Street Rockville Pike 12266-12270 5615 Fishers Lane5615 DevelopmentSyms Site Avenue Chapman 1900 1620 East1620 Jefferson Street Place Woodmont Rockville1451 Pike Avalon Twinbrook Station Twinbrook Parkway12720 Green Turtle Green Rockville1801 Pike Rollins Center Rockville1807 Pike Congressional Crest at The FDA Building 5630 Fishers Lane MetroplaceTwinbrook Rockville1592 Pike Element 12420 Drive Parklawn 12420 5600 Fishers Lane 5601 Fishers Lane Twinbrook Metro Park 5625 Fishers Lane Twinbrook Metro Park 5635 Fishers Lane The Terano Fishers5720 Lane The Galvan at Twinbrook Avenue Chapman 1801 The Mark at Twinbrook Station Avenue Chapman 1750 DEVELOPMENT SITE The Alaire Higgins Place 1101 THE LANDSCAPE OF TWINBROOK OF LANDSCAPE THE 9 8 7 5 6 4 3 1 2 11 17 15 12 19 16 13 14 18 10 21 23 20 22

PROPERTY SPECIFICATIONS 20 PROPERTY SPECIFICATIONS

GENERAL SPECIFICATIONS OVERVIEW: Twinbrook Office Center is a 163,194 square foot office building on Rockville Pike that is located directly across the street from the Twinbrook Metrorail Station. The Property is conveniently located in the heart of Rockville with convenient vehicular access to I-270 and I-495. It is connected to a first-class Hilton Hotel, and is surrounded by an abundance of retail amenities and affluent residential neighborhoods. Recent upgrades include a complete lobby renovation, restroom upgrades, elevator cab improvements, and demolition of vacant suites. PROPERTY ADDRESS: 1700 Rockville Pike Rockville, MD 20852 YEAR BUILT / RENOVATED: 1983 / 2013

SITE: 2.357 acres (according to ALTA Survey dated 7/12/2013)

BUILDING AREA

NUMBER OF FLOORS: 6 stories above grade (plus 9,270 square feet of retail on the ground level of the adjoining Hilton Hotel) 3 stories below grade parking RENTABLE BUILDING AREA: 163,194 RSF per Rent Roll

MAIN LOBBY: Exquisitely renovated lobby featuring bright recessed LED lighting, rich mahogany wall finishes, white tile floors, sitting area with modern white leather chairs, electronic building directory, and frosted glass walls. RESTROOMS: 1 men’s and 1 women’s restroom per floor. All restrooms have been updated.

PARKING: In accordance with the ALTA Survey dated 7/12/2013: Surface Spaces 120 Below Grade Level 2 359 Below Grade Level 3 175 Total 654 (4.0 / 1,000)

LOADING: Shared loading facilities with hotel. Interior and exterior loading dock with three total bays, two of which are dedicated for use by the connected Hilton Hotel, and one of which serves the Property and is accessible via a common corridor. TYPICAL FLOOR PLATE: 28,000 SF (Floors 2 – 6)

COLUMN SPACING: Varies with most columns being 22’ x 22’

CEILING HEIGHTS: Retail 10’ 0” finished / 14’ 2” slab-to-slab 1st floor 10’ 0” finished / 14’ 4” slab-to-slab 2nd - 6th floors 8’ 5” finished / 10’ 4” slab-to-slab CONSTRUCTION

STRUCTURE: Concrete and steel frame

FACADE: Brick and cement siding with glass windows

ROOF: The roof consists of a PRMA (protected roof membrane assembly) with rock ballasts that was installed in 2005. MECHANICAL SYSTEMS

ELEVATORS: Four geared traction passenger elevators manufactured by Westinghouse rated at 3,000 pounds.

HVAC: Two electric self-contained Air Handler Units per floor that heat and cool the core areas of the building. Perimeter water cooled heat pumps with individual temperature controls on the 2nd through 6th floor. Individual HVAC units for each 1st floor and retail tenant.

Shared with the neighboring Hilton Hotel, the Cooling Tower is housed on the hotel roof along with three boilers in the hotel’s main mechanical room. Controls are a pneumatic system with a Smart BT computer energy based management system installed in January 2013. FIRE / LIFE SAFETY

FIRE PROTECTION SYSTEM: Fire panel is monitored by Datawatch twenty four hours per day, seven days per week.

SECURITY: Perimeter building access and elevator access control provided and maintained by Datawatch Systems via card access systems. Tenant managed security cameras throughout the building. GENERATOR: Life-safety and standby loads backed up by a 1000-kW, 480Y/277-volts diesel engine driven generator located in a separate building. SPRINKLER SYSTEM: Wet sprinkler fire suppression system throughout the interior building areas and a dry sprinkler system in the garage. UTILITIES

ELECTRICITY: Pepco

WATER/SEWER/STORM WATER: City of Rockville

GAS: N/A 22 PROPERTY SPECIFICATIONS

CROSS EASEMENTS & As a result of the Property’s mixed-use development, the hotel owner and the office building owner share cer- SHARED COSTS tain space with one another, as well as certain physical plant items such as the cooling tower and boilers. The Declaration of Easements, Covenants, Restrictions and Agreements for Twinbrook Office and Hotel Complex (“DECRA”) describes these rights and is available for download from the on-line document center.

Below are excerpts from the DECRA document pertaining to these matters. Please note that references to certain exhibits and sections are in reference to the DECRA document, not this offering memorandum.

The following information is for convenience purposes only. Please review the DECRA document(s) as part of your investment due diligence.

SHARED SPACE: A portion of the office building’s first floor is utilized by the hotel for meeting rooms, health club area and an outside terrace. The hotel is allowed to use this space at no charge and has the right to keep any revenue gen- erated from such space. The hotel owner also maintains these areas. Conversely, the office building utilizes the ground floor retail areas facing Twinbrook Metro Station for its benefit. These areas are situated within the hotel component.

RETAIL SPACE: “[Easements are established for the benefit] of the Office Owner, and as appurtenances to the Office Parcel, for (i) the non-exclusive right of ingress and egress to and from the area designated on Exhibit K as “Retail Space” and (ii) the exclusive right to use the Retail Space. The Office Owner shall be solely entitled to all income derived from the Retail Space and, except as expressly set forth in this Declaration, shall be solely responsible for the performance of, and costs associated with, all Maintenance and Major Repairs and any other expenses related thereto.”

HOTEL SPACE: “[Easements are established for the benefit] of the Hotel Owner, and as appurtenances to the Hotel Parcel, the following easements on the first floo rof the Office Component:

(i) the non-exclusive right of ingress and egress to and from the entire area designated as the “First Floor Hotel Easement Area” on Exhibit K-1 attached hereto; (ii) intentially deleted [as amended]; (iii) the exclusive right to use the area designated on Exhibit K-1 as “Meeting Room Area”; and (iv) the non-exclusive right to use the area designated on Exhibit K-1 as “Outdoor Terrace Area.”

The Hotel Owner shall be solely entitled to all income derived from the Health Club Area and Meeting Room Area and, except as expressly set forth in this Declaration, shall be solely responsible for the performance of, and all costs associated with, all Maintenance and Major Repairs, and all other expenses related thereto. The Hotel Owner shall be responsible for the performance of Maintenance and Major Repairs of the Outdoor Terrace Area, but the costs thereof shall be included in the Allocated Costs as described in Section 4.1(h).” PHYSICAL PLANT & SHARED Both the office building and hotel are heated and cooled from a single cooling tower and three boilers located COSTS: in the hotel’s rooftop mechanical penthouse. The hotel maintains the systems with the cost of repair, maintenance, and replacement shared between the hotel owner and office building owner. Below is a schedule that outlines how the costs are shared in accordance with the DECRA.

PERSONNEL COST: “The Office Owner shall reimburse the Hotel Owner for the costs of Hotel personnel used to operate, maintain and repair the Mechanical Equipment and Shared Mechanical Supply Lines in an amount equal to $15,000 per annum (payable in monthly installments), which shall be increased on each anniversary [by the Consumer Price Index].”

Costs (See Section 4.1 of the DECRA) Hotel Office Owner (%) Owner (%) Repairs, replacement and Maintenance of Shared Mechanical Equipment 50% 50% and Shared Mechanical Supply Lines Repairs, replacement and Maintenance of Hotel Mechanical Equipment and 100% 0% Hotel Mechanical Supply Lines Repairs, replacement and Maintenance of Office Mechanical Equipment and 0% 100% Office Mechanical Lines Electric Bill for the Hotel Parcel 94% 6% Charges for water consumption, sewer services and any WSSC front foot 90% 10% benefit charges Gas Consumption for Mechanical Equipment 95% 5% Maintenance and Major Repairs for Outdoor Terrace Area 50% 50% Insurance Premiums Relating to Mechanical Equipment and Shared Me- 75% 25% chanical Supply Lines Insurance Premiums for joint insurance on the Property, if any, other than insurance premiums relating to Mechanical Equipment and Shared 55% 45% Mechanical Supply Lines Management fees for operation for the Garage payable to Diplomat Parking 32% 68% Enterprises

MID-ATLANTIC CAPITAL MARKETS GROUP 24 PROPERTY SPECIFICATIONS

SITE PLAN

CHAPMAN AVE

1-Story Building 1st Floor Retail

Outside Terrace

1700 ROCKVILLE PIKE 1700 ROCKVILLE PIKE Ofﬁce Hotel BOUIC AVE

HALPINE RD

6-Story Ofﬁce Building

Property Line

ROCKVILLE PIKE T w i n b r o o k

FLOOR PLANS 1 7 0 0 2 1 1

2 Suite Suite Suite Suite Suite Suite R 2 Suite Suite ,1 , ,063 Signature , 801 095 Congressional Dental B Frasier (12/15) FedEx,1 Office 12 o

Travel Vacant 99 2,112 SF 1,801 SF 2,199 SF c

10 14 18 R 20 RSF RSF RSF RSF

1,063 SF 2,095 SF 22 RSF

Retail | 9,270 SF Suite 10 Suite 14 Suite 22 k

Suite 18 Suite 20

Exp: 09/24 Exp: 12/16 Exp: 02/19 v t

Exp: 03/17 i a l i l l e

P i k e ,

ST 1 Floor R o lle Pike, Rockville, MD Twinbrook 1700 Rockvi c k v i l l e ,

M Hilton Hotel Meeting Rooms (see cross easement agreement) D American Federal Savings Bank 2,887 SF SuiteSuite 100 100 2,887Exp: RSF06/22

Ground Floor | 13,252 SF

Suite 150 Suite 103 2,196 USF 4,441 RSF 2,326 RSF Suite 145 Suite 130

2,061 USF Vacant1,336 USF 10,365 SF 2,183 RSF 1,415 RSF Suite 103

2ND Floor

Twinbrook 1700 Rockville Pike, Rockville, MD

Renal PhysiciansSuite 210/220 Association GlobalSuite Invest. 230 4,064 SF 1,407 SF 3,340 USF 1,172 USF Suite 210 & 220 Suite 230 1,407 RSF Exp:4,064 04/21 RSF Exp: 08/24 BTI Security Vacant240 Suite5,533 SF Suite4,577 200 SF 4Suite,610 240USF Suite3,813 200 USF Exp: 03/20 5,533 RSF 4,577 RSF

2nd Floor | 28,270 SF SuiteVacant 295 1,0801,296 USF SF Suite1,296 295 RSF

Vacant Suite 280 Suite2,886 250 SF Suite 260 Suite 270 2,288 USF 2Suite,886 250RSF Visar3,546 Corporation RSF 1,843 USF 2,746 RSF 3,546 SF 2,215 RSF Suite 260 Exp: 09/20 5AM Solutions 4,961 SF Suite 270 & 280 Exp: 03/17

26 PROPERTY SPECIFICATIONS

3rd Floor

Twinbrook 1700 Rockville Pike, Rockville, MD 3rd Floor | 28,315 SF

Suite 340 Suite 350 Yeager & Et Vacant Vacant Suite1,208 360 SF 2,4582,904 U SFSF 1,7911,791 SFRSF Suite 340 Suite 350 1,208Suite 360 RSF 2,904 RSF Exp: 07/17

IntercontinentalSuite Development 330 Suite 370Vacant 2,512 SF 2,125 USF 4,0744,815 USF SF Suite 330 Suite 370 Exp: 2,51206/18 RSF 4,815 RSF

Bam Allen Tech VacantSuite 325 Suite 300 3,325 SF 2,104 SF Suite3,3 32525 RSF 2,104Suite RSF 300 Exp: 08/19

SuiteVacant 310 3,616 SF 3,616 RSF Suite 310 Dovel Tech Suite3,307 305 SF 3,307Suite RSF 305 Apex Systems Exp: 05/21 2,733Suite SF 320 Suite2,733 320 RSF Exp: 11/19

4th Floor

Twinbrook 1700 Rockvil le Pike, Rockville, MD 4th Floor | 28,218 SF

Suite Suite 450 Lincoln441 PM 696815 USFSF 3,263 RSF Suite815 RSF441 Exp: 04/17 JohnsonSuite 445 & Johnson M Lazerow 176 SF 4,5884,588 RSF SF Suite 445 Suite 444 Exp: 01/20 Exp: 09/16

176 RSF Suite 400 12Source,596 Office RSF Suites 22,639 SF Suite 400, 440, 442 & 445 Exp: 03/20

Suite 442 2,745 RSF

Suite 440 4,035 RSF

5th Floor

Twinbrook 1700 Rockville Pike, Rockville, MD 5th Floor | 27,721 SF

AbbVie SuiteVacant 550 9,066 SF Suite3,452 500 SF 9Suite,066 550 RSF 3,452Suite R500SF Exp: 05/21

Bayer Healthcare Merck SharpSuite & 525Dohme Corp NovartisSuite Pharmaceuticals 510 Suite2,860 505 SF 5,731 SF 6,612 SF 5,731 RSF 6,612 RSF 2Suite,365 505USF Suite 525 Suite 510 Exp: 08/22 Exp: 02/21 Exp: 12/19 2,860 RSF

6th Floor

Twinbrook 1700 Rockville Pike, Rockville, MD 6th Floor | 28,148 SF

Suite 620 Suite 625 3,880 RSF 1,172 RSF

Team Services 3,989 SF SuiteSuite 615 615 Exp:3,989 05/19 RSF

Suite 600 19,107 RSF

Dovel Technologies (fka RN Solutions) 24,159 SF Suite 600, 620 & 625 Exp: 05/21

TENANCY 30 TENANCY

TENANT DESCRIPTIONS

DOVEL TECHNOLOGIES (f/k/a RN Solutions) www.doveltech.com | www.rnsolutions.com

27,466 SF Dovel Technologies recently acquired RN Solutions who is headquartered at the Property. RN Solutions is a CMMI level 3 Information Technology corporation that is critically positioned to support their clients’ 16.8% of NRA needs from Infrastructure Support through Software Development Life Cycle. They are practiced in emerging technologies such as Cloud Computing and High Performance Computing that meet the arising Exp: 5/2021 challenges of the 21st Century.

RNSolutions is a multi-faceted business that assists their clients through the use of best practices and practical technology solutions to meet their strategic goals. Their mission-specific services touch all institutes within the National Institutes of Health; as well as many of the Operational Divisions of the U.S. Department of Health and Human Services.

SOURCE OFFICE SUITES www.sourceoffice.com

22,639 SF Source Office Suites was founded In 1989, and has since established a significant presence in the Wash- ington, DC region. Their seven business centers are located in Rockville, Arlington, Reston, Tyson’s Corner 13.9% of NRA and Washington, DC. Source Office Suites provide their clients with excellent facilities, professional services, and flexible solutions at competitive prices. Their strong commitment to quality in offering versatile Exp: 3/2020 office space solutions, extensive business services and state-of-the-art technology is key to maintaining their prominence in the region’s business center environment.

Source Office Suites’ executive management team has unparalleled experience in commercial real estate, banking, marketing and business administration. This expertise provides Source Office Suites the solid foundation from which they have built a successful enterprise. Their business ideology is as follows:

►► Strive to be the best choice for the credibility and convenience of business support services in a professional environment ►► Attract and retain clients by meeting their needs with quality service and value ►► Be innovative, productive, and aggressive in the operation of their business, using emerging technologies to support growth and enhance productivity. NOVARTIS PHARMACEUTICALS www.novartis.com

6,612 SF Novartis Pharmaceuticals Corporation – a US affiliate of Basel, Switzerland-based Novartis AG – special- izes in the marketing of patent-protected medicines and treatments for helping patients and improving 4.1% of NRA patient care.

Exp: 12/2019 Novartis Pharmaceuticals Corporation researches, develops, manufactures and markets leading innovative prescription drugs used to treat a number of diseases and conditions, including those in the cardio- vascular, central nervous system, cancer, ophthalmics, organ transplantation and respiratory areas.

Their US Pharmaceuticals portfolio includes key marketed products, many of which are leaders in their respective therapeutic areas. Since 2000, their US division has received the most approvals of any pharmaceutical company in the industry.

►► Investment Grade Credit: AA– S&P ►► Total Employees: 122,000 ►► 2015 Net Sales: $49.4 billion ►► 2015 Net Income: $17.8 billion (73% increase over 2014) ►► Market Cap: Approximately $280 billion (largest of any healthcare company)

MERCK SHARP & DOHME CORP (Subsidiary of Merck & Co.) www.merck.com

5,731 SF Merck & Co., d/b/a Merck Sharp & Dohme Corp. (NYSE: MRK), is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies and animal 3.5% of NRA health products, which it markets directly and through its joint ventures. Merck & Co. is ranked 71st among Fortune 500 companies for 2015. Exp: 2/2021 The company’s operations are headquartered in Kenilworth, NJ, and are principally managed on a products basis comprised of four operating segments, the Pharmaceutical, Animal Health, Alliances and Healthcare Services segments The company was established in 1891 as the United States subsidiary of the German company Merck, which was founded in 1668 by the Merck family. Merck & Co. is the world’s seventh largest pharmaceutical company by market capitalization and revenue.

►► Investment Grade Credit: AA S&P ►► Total Employees: 77,000 ►► 2015 Net Sales: $39.5 billion ►► 2015 Net Income: $10.2 billion ►► Market Cap: Approximately $145 billion 32 TENANCY

JOHNSON & JOHNSON www.jnj.com

4,588 SF Johnson & Johnson (NYSE: JNJ) is an American multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. The company is ranked 37th among Fortune 500 2.8% of NRA companies for 2015.

Exp: 1/2020 Johnson & Johnson is headquartered in New Brunswick, New Jersey, directly adjacent to the campus of Rutgers University, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries.

Johnson & Johnson’s brands include numerous household names of medications and first aid supplies. Among its well-known consumer products are the Band-Aid Brand line of bandages, Tylenol medications, Johnson’s baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses.

►► Investment Grade Credit: AAA S&P ►► Total Employees: 126,500 ►► 2015 Net Sales: $70.1 billion ►► 2015 Net Income: $15.4 billion ►► Market Cap: Approximately $295 billion

ABBVIE (f/k/a Abbott) www.abbvie.com

3,452 SF AbbVie (NYSE: ABBV) began as the pharmaceutical leader, Abbott, which was founded in 1888 by Chicago physician, Dr. Wallace Abbott. Since then, Abbott has evolved to become a global healthcare leader, 2.1% of NRA delivering innovative pharmaceutical, nutritional, diagnostic, and medical products to people in more than 150 countries. Exp: 5/2021 On January 1, 2013, AbbVie was founded, a global biopharmaceutical company with the focus and capabilities to address some of the world’s greatest health challenges. AbbVie has the stability, resources, expertise, and passion to discover, develop, and bring to market groundbreaking science to solve the biggest health problems that face the world today and tomorrow.

AbbVie is focused on developing leading-edge therapies and innovation, and has the commitment, expertise, and capabilities to provide life-changing products to patients who need them most. AbbVie combines deep understanding of patient needs and disease states to deliver treatments that have an impact on peoples’ lives.

►► Investment Grade Credit: A S&P ►► Total Employees: 28,000 ►► 2015 Net Sales: $22.9 billion ►► 2015 Net Income: $5.1 billion ►► Market Cap: Approximately $90 billion BAYER HEALTHCARE PHARMACEUTICALS www.pharma.bayer.com

2,860 SF Bayer AG is a German multinational chemical and pharmaceutical company founded in Barmen, Germany in 1863. It is headquartered in Leverkusen, North Rhine-Westphalia, Germany, where its illuminated sign 1.8% of NRA is a landmark. Bayer’s primary areas of business include human and veterinary pharmaceuticals; consumer healthcare products; agricultural chemicals and biotechnology products; and high value polymers. The Exp: 8/2022 company is a component of the Euro Stoxx 50 stock market index.

The Pharmaceuticals Division focuses on prescription products, especially for women’s healthcare and cardiology, and also on specialty therapeutics in the areas of oncology, hematology and ophthalmology. The division also comprises the Radiology Business Unit which markets contrast-enhanced diagnostic imaging equipment together with the necessary contrast agents.

►► Investment Grade Credit: A– S&P ►► Total Employees: 126,500 ►► 2015 Net Sales: $46.3 billion (12.1% increase over 2014) ►► 2015 Net Income: $4.1 billion (20.0% increase over 2014) ►► Market Cap: Approximately $89 billion 34 TENANCY

OVERVIEW

The Property includes 24 tenants ranging in size from 176 SF to 24,159 SF. Twenty percent of the tenancy is investment grade credit totaling 23,243 SF, or 14.2% of the building’s square footage. The Property’s anchor tenant is Dovel Technologies occupying 27,466 SF, 16.8% of the building.

The average lease size in the building is approximately 4,800 SF with an average lease term remaining of 4 years, 2 months, providing investors stable cash flow over the near-term. Further, the Property’s average in-place rental rate is just slightly below market at $27.80, thereby mitigating mark-to-market issues with tenant rollover. In short, the Property’s tenancy provides stable income through the lease-up period and into the market’s revitalization.

LEASE EXPIRATION SCHEDULEExpire Sched (landscape)

100% 100.0% 100.0% 94.3% 97.8% 97.8% 100.0% 90%

80%

70% 69.4% 60%

50% 47.7% 40%

30% 35.4% 36.9% 30.4% 20%

10% 3.5% 29.2% 1.2% 4.9% 1.5% 10.8% 21.7% 24.9% 0.0% 2.2% 0.0% 0.0% 0% Vacant 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026+ Annual Expirations Cummulative Expirations (as a percentage of NRA per calendar year)

Page 1 STACKING PLAN

2016 2017 2018 2019 2020 2021 2022+ Vacant

OFFICE BUILDING FL SF Dovel Technologies (f/k/a RN Solutions) Team Services 24,159 SF 3,989 SF 6 28,148 Suite 600, 620 & 625 Suite 615 Exp: 05/21 Exp: 05/19

AbbVie Bayer Healthcare Novartis Pharmaceuticals Merck Sharp & Dohme Corp. Vacant 3,452 SF 2,860 SF 6,612 SF 5,731 SF 9,066 SF 5 27,721 Suite 500 Suite 505 Suite 510 Suite 525 Suite 550 Exp: 05/21 Exp: 08/22 Exp: 12/19 Exp: 02/21

Source Office Suites Lincoln M Lazerow Johnson & Johnson 22,639 SF 815 SF 176 SF 4,588 SF 4 28,218 Suite 400,440,442 & 450 Suite 441 Suite 444 Suite 445 Exp: 03/20 Exp: 04/17 Exp: 09/16 Exp: 01/20

Barn Allen Tech Dovel Tech Apex Systems Intcont. Dev. Yeager & Etkind Vacant Vacant Vacant Vacant Vacant 2,104 SF 3,307 SF 2,733 SF 2,512 SF 1,208 SF 3,616 SF 3,325 SF 2,904 SF 1,791 SF 4,815 SF 3 28,315 Suite 300 Suite 305 Suite 320 Suite 330 Suite 360 Suite 310 Suite 325 Suite 340 Suite 350 Suite 370 Exp: 08/19 Exp: 05/21 Exp: 11/19 Exp: 06/18 Exp: 07/17

BTI Security Renal Physicians Global Invest. Visar 5 AM Solutions Vacant Vacant Vacant 4,577 SF 4,064 SF 1,407 SF 3,546 SF 4,961 SF 5,533 SF 2,886 SF 1,296 SF 2 28,270 Suite 200 Suite 210 & 220 Suite 230 Suite 260 Suite 270 & 280 Suite 240 Suite 250 Suite 295 Exp: 03/20 Exp: 04/21 Exp: 08/24 Exp: 09/20 Exp: 03/17

American Bank Vacant 2,887 SF 10,365 SF Suite 100 Ground 13,252 Exp: 06/22 Suite 103

Total 153,924

RETAIL Congressional Dental B Fraiser Signature Travel FedEx Office Vacant 2,112 SF 1,801 SF 1,063 SF 2,199 SF 2,095 SF Retail 9,270 Suite 10 Suite 14 Suite 18 Suite 22 Suite 20 Exp: 09/24 Exp: 12/16 Exp: 03/17 Exp: 02/19

Total 163,194

MID-ATLANTIC CAPITAL MARKETS GROUP 36 TENANCY

RENT ROLL Annual Rental Rates Tenant Reimbursements Suite Number Tenant Rent Changes Months % to Base Year + Stop Amount Expiration Date/Term Sq Ftg PSF annual on to (PSF) to Abate Abate (Op Expense / Tax) TIs LCs Comments Congressional Dental $27.55 Jun-2016 $28.38 - - 010_BY14_$395,856/$746,120 - - • Renewal: One 5-year Retail, Suite: 010 2,112 $58,186 Jun-2017 $29.23 option at market, not to Jan-2005 to Sep-2024 Jun-2018 $30.11 exceed 110% of last rent Jun-2019 $31.01 paid, w/ 9 mos notice. Jun-2020 $31.94 Jun-2021 $32.90 Jun-2022 $33.89 Jun-2023 $34.91 Jun-2024 $35.96 Ben Frasier (12/15) $27.25 - - - - 014_NNN_(tax/oe) no jant,elct - - • Tenant’s lease expires Retail, Suite: 014 1,801 $49,077 12/2015. Argus assumes Jul-2010 to Dec-2016 a 1-yr renewalat the same rent. Signature Travel $24.76 Jan-2017 $25.50 - - RTL: NNN (tax/oe) no jant,elc - - • Renewal: One 5-year Retail, Suite: 018 1,063 $26,320 option at market w/ 9 mos Jun-2001 to Mar-2017 notice. • Termination: Either party may terminate the lease at anytime with 6 mos notice. Spec Tenant $25.00 Sep-2017 $25.75 1-5 100% RTL: NNN (tax/oe) no jant,elc $50.00 $16.57 Retail, Suite: 020 2,095 $52,375 Sep-2018 $26.52 6.00% Sep-2016 to Aug-2026 Sep-2019 $27.32 Sep-2020 $28.14 Sep-2021 $28.98 Sep-2022 $29.85 Sep-2023 $30.75 Sep-2024 $31.67 Sep-2025 $32.62 FedEx Ofc+Print Srvc $22.00 - - - - 022_NNN_(tax/oe) no jant,elct - - Retail, Suite: 022 2,199 $48,378 Jan-2012 to Feb-2019 American Fed Savings Bnk $49.17 Jul-2016 $50.65 - - 100_BY12_$1,776,839 (tax+oe) - - • Parking: 9 guest spaces at Suite: 100 2,887 $141,954 Jul-2017 $52.17 no charge in exterior lot. Jul-1992 to Jun-2022 Jul-2018 $53.73 Jul-2019 $55.34 Jul-2020 $57.00 Jul-2021 $58.71 Spec Tenant $28.50 Apr-2018 $29.36 1-10 100% OFC: Mrkt BY Stop (tax / oe) $50.00 $18.18 Suite: 103 10,365 $295,403 Apr-2019 $30.24 6.00% Apr-2017 to Mar-2027 Apr-2020 $31.14 Apr-2021 $32.08 Apr-2022 $33.04 Apr-2023 $34.03 Apr-2024 $35.05 Apr-2025 $36.10 Apr-2026 $37.19 BTI Security $28.54 Apr-2017 $29.25 - - 200_BY13_$400,563/$1,280,461 - - • Renewal: Two 5-year Suite: 200 4,577 $130,628 Apr-2018 $29.98 options at market w/ 6 mos Apr-2013 to Mar-2020 Apr-2019 $30.73 notice. • ROFO: Any contiguous space on the 2nd floor at market. Renal Physcians Assc $28.84 Jan-2017 $29.71 - - 210_BY15_$420,891/$1,235,563e - - Suite: 210 4,064 $117,206 Jan-2018 $30.60 Base year stops are estimates Mar-2006 to Apr-2021 Jan-2019 $31.52 Jan-2020 $32.47 Jan-2021 $33.44 Global Investigative Srvcs $28.12 Feb-2017 $28.96 - - 230_BY14_$395,856//$1,461,776 - - Suite: 230 1,407 $39,565 Feb-2018 $29.83 Feb-2014 to Aug-2024 Feb-2019 $30.72 Feb-2020 $31.64 Feb-2021 $32.59 Feb-2022 $33.57 Feb-2023 $34.58 Feb-2024 $35.62 Annual Rental Rates Tenant Reimbursements Suite Number Tenant Rent Changes Months % to Base Year + Stop Amount Expiration Date/Term Sq Ftg PSF annual on to (PSF) to Abate Abate (Op Expense / Tax) TIs LCs Comments Spec Tenant $28.50 Sep-2017 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $50.00 $8.37 Suite: 240 5,533 $157,691 Sep-2018 $30.24 6.00% Sep-2016 to Aug-2021 Sep-2019 $31.14 Sep-2020 $32.08 Spec Tenant $28.50 Mar-2018 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $50.00 $8.37 Suite: 250 2,886 $82,251 Mar-2019 $30.24 6.00% Mar-2017 to Feb-2022 Mar-2020 $31.14 Mar-2021 $32.08 Visar Corporation $29.36 Apr-2017 $30.24 - - 260_BY15_$420,891/$1,235,563e - - Suite: 260 3,546 $104,111 Apr-2018 $31.15 Base year stops are estimates Feb-2004 to Sep-2020 Apr-2019 $32.09 Apr-2020 $33.05 5AM Solutions $28.50 - - - - 270_BY12_$418,828/$1,329,471 - - • Tenant renewed for a term Suite: 270 4,961 $141,389 4/2016 - 3/2017. Argus Apr-2009 to Mar-2017 assumes tenant’s BY remains the same (2012). Spec Tenant $28.50 Nov-2017 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $40.00 $8.37 Suite: 295 1,296 $36,936 Nov-2018 $30.24 6.00% Nov-2016 to Oct-2021 Nov-2019 $31.14 Nov-2020 $32.08 BamAllen Technologies $28.84 Jun-2016 $29.71 - - 300_BY14_$395,856/$1,461,776 - - Suite: 300 2,104 $60,679 Jun-2017 $30.60 Jun-2014 to Aug-2019 Jun-2018 $31.52 Jun-2019 $32.47 Dovel Technologies $27.00 Aug-2016 $27.74 19 100% 305_BY15_$420,891/$1,235,563e - - • Renewal: One 5-yr option at Suite: 305 3,307 $89,289 Aug-2017 $28.50 31 100% Base year stops are estimates market w/ 9 mos notice. Aug-2015 to May-2021 Aug-2018 $29.29 43 100% • ROFO: To lease Ste 615 Aug-2019 $30.09 55 100% (3,989 SF) at market. Aug-2020 $30.92 • Termination: Effective upon 9 mos advance notice should their contract with Dept of HHS be canceled. Payment of unamortized TIs, LCs, and free rent at 8%. • Part of Ste 600’s lease. Spec Tenant $28.50 Jul-2017 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $30.00 $8.37 Suite: 310 3,616 $103,056 Jul-2018 $30.24 6.00% Jul-2016 to Jun-2021 Jul-2019 $31.14 Jul-2020 $32.08 Apex Systems $28.70 Sep-2016 $29.42 - - 320_BY14_$395,856/$1,461,776 - - • Termination: One-time right Suite: 320 2,733 $78,437 Sep-2017 $30.16 at the end of 37th month Aug-2014 to Nov-2019 Sep-2018 $30.91 (5/31/2017. Notice is 9 mos Sep-2019 $31.68 prior and payment of 6 mos rent and unamortized costs at 6%. Spec Tenant $28.50 May-2017 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $45.00 $8.37 Suite: 325 3,325 $94,763 May-2018 $30.24 6.00% Expires Apr-2021 May-2019 $31.14 May-2020 $32.08 Intercontinental Dvlpmt $29.18 May-2016 $30.06 - - 330_BY13_$400,563/$1,280,345 - - Suite: 330 2,512 $73,300 May-2017 $30.96 May-2013 to Jun-2018 May-2018 $31.89 Spec Tenant $28.50 Jan-2018 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $25.00 $8.37 Suite: 340 2,904 $82,764 Jan-2019 $30.24 6.00% Jan-2017 to Dec-2021 Jan-2020 $31.14 Jan-2021 $32.08 Spec Tenant $28.50 Apr-2018 $29.36 1-5 100% OFC: Mrkt BY Stop (tax / oe) $25.00 $8.37 Suite: 350 1,791 $51,044 Apr-2019 $30.24 6.00% Apr-2017 to Mar-2022 Apr-2020 $31.14 Apr-2021 $32.08 Yeager & Etkind $29.26 Feb-2017 $30.14 - - 360_BY11_$383,089/$1,138,248 - - Suite: 360 1,208 $35,346 Feb-2012 to Jul-2017 Spec Tenant $29.36 Jul-2018 $30.24 1-5 100% OFC: Mrkt BY Stop (tax / oe) $25.00 $8.62 Suite: 370 4,815 $141,344 Jul-2019 $31.14 6.00% Jul-2017 to Jun-2022 Jul-2020 $32.08 Jul-2021 $33.04 38 TENANCY

Annual Rental Rates Tenant Reimbursements Suite Number Tenant Rent Changes Months % to Base Year + Stop Amount Expiration Date/Term Sq Ftg PSF annual on to (PSF) to Abate Abate (Op Expense / Tax) TIs LCs Comments Source Office Suites $31.29 Mar-2017 $32.00 - - 400_BY11_$383,089/$1,138,248 - - • Renewal: One 5-year Suite: 400 22,639 $708,374 Mar-2018 $32.72 option at market w/ 9 mos Jan-2002 to Mar-2020 Mar-2019 $33.46 notice. Mar-2020 $34.21 • ROFO: To lease any space on 4th floor as it becomes vacant. Landlord to provide bona fide offer from another party. Lincoln Prop Mgmt Co $26.50 - - - - Gross Lease: Pays no expense - - Suite: 441 815 $21,598 reimbursement. Jan-2013 to Apr-2017 Michelle Lazerow, Esq (9/15) $24.00 - - - - 444_BY11_$346,177/$1,131,465 - - • Tenant’s lease expires Suite: 444 176 $4,224 9/2015. Argus assumes a Oct-2011 to Sep-2016 1-yr renewal at the same rent. Johnson & Johnson $28.19 Jul-2016 $28.89 - - 445_BY14_$397,910/$1,381,116 - - • Renewal: One 5-year Suite: 445 4,588 $129,336 Jul-2017 $29.61 option at market w/ 9 mos Feb-2002 to Jan-2020 Jul-2018 $30.35 notice. Jul-2019 $31.11 • Termination: Anytime after 7/1/2017 w/ 9 mos notice and rent plus unamortized costs. AbbVie $27.50 Jul-2016 $28.19 - - 500_BY15_$420,891/$1,235,563e - - • Renewal: One-5-year Suite: 500 3,452 $94,930 Jul-2017 $28.89 Base year stops are estimates option at market w/ 9 mos Jul-2015 to May-2021 Jul-2018 $29.61 notice. Jul-2019 $30.35 • Termination: Anytime Jul-2020 $31.11 after 7/1//2018 with 6 mos notice and payment of 2 mos rent and unamortized costs at 5%. Bayer Healthcare Pharm $28.19 Feb-2017 $28.89 - - 505_BY15_$420,891/$1,235,563e - - • Renewal: Two 5-year Suite: 505 2,860 $80,623 Feb-2018 $29.61 Base year stops are estimates options at market w/ 9 mos Feb-2015 to Aug-2022 Feb-2019 $30.35 notice. Feb-2020 $31.11 • Termination: Anytime Feb-2021 $31.89 after 9/30/2018 with 4 mos Feb-2022 $32.69 notice and payment of 4 mos rent and unamortized costs at 6%. Novartis Pharm $29.61 Jan-2017 $30.50 - - 510_BY15_$420,891/$1,235,563e - - • Renewal: One 5-year Suite: 510 6,612 $195,781 Jan-2018 $31.42 Base year stops are estimates option at market w/ 9 mos Jan-1997 to Dec-2019 Jan-2019 $32.36 notice. Merck Sharp & Dohme $29.36 Jan-2017 $30.24 - - 525_BY15_$420,891/$1,235,563e - - • Renewal: One 5-yr option Suite: 525 5,731 $168,262 Jan-2018 $31.15 Base year stops are estimates at market with 9 mos Nov-2003 to Feb-2021 Jan-2019 $32.08 notice. Jan-2020 $33.04 • Termination: Anytime Jan-2021 $34.03 after 2/28/2019 with 9 mos notice and payment of unamortized LCs and free rent. Spec Tenant $29.36 Oct-2018 $30.24 1-5 100% OFC: Mrkt BY Stop (tax / oe) $40.00 $8.62 Suite: 550 9,066 $266,132 Oct-2019 $31.14 6.00% Oct-2017 to Sep-2022 Oct-2020 $32.08 Oct-2021 $33.04 Dovel Technologies $27.00 Aug-2016 $27.74 98 100% 600_BY15_$420,891/$1,235,563e - - • Renewal: One 5-yr option Suite: 600 24,159 $652,293 Aug-2017 $28.51 110 100% Base year stops are estimates at market w/ 9 mos notice. Jan-2009 to May-2021 Aug-2018 $29.29 122 100% • ROFO: To lease Ste 615 Aug-2019 $30.09 134 100% (3,989 SF) at market. Aug-2020 $30.92 • Termination: Effective upon 9 mos advance notice should their contract with Dept of HHS be canceled. Payment of unamortized TIs, LCs, and free rent at 8% per annum. • (Tenant also lease Ste 305) Team Services $28.09 Jun-2016 $27.80 - - 615_BY13_$400,563/$1,280,345 - - Suite: 615 3,989 $112,051 Jun-2017 $28.36 Oct-2013 to May-2019 Jun-2018 $28.92 MID-ATLANTIC CAPITAL MARKETS GROUP

FINANCIAL ANALYSIS 42 FINANCIAL ANALYSIS

CASH FLOW PROJECTIONS

Year 1 PSF Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending 163,194 SF Apr-2017 Apr-2018 Apr-2019 Apr-2020 Apr-2021 Apr-2022 Apr-2023 Apr-2024 Apr-2025 Apr-2026 Apr-2027

Potential Gross Revenue Base Rental Revenue $29.11 $4,750,863 $4,861,598 $4,987,695 $5,125,666 $5,205,148 $5,383,586 $5,543,238 $5,704,470 $5,869,962 $6,049,592 $6,224,932 Absorption & Turnover Vacancy (5.91) (964,907) (158,760) (22,379) (174,576) (122,348) (306,239) (168,367) (14,675) (126,309) (204,870) (422,357) Base Rent Abatements (1.96) (320,152) (548,044) (76,534) (107,850) (20,558) 0 0 0 0 0 0 ______Scheduled Base Rental Revenue 21.24 3,465,804 4,154,794 4,888,782 4,843,240 5,062,242 5,077,347 5,374,871 5,689,795 5,743,653 5,844,722 5,802,575 Expense Reimbursement Revenue 0.74 121,574 188,901 256,970 295,285 253,880 191,819 188,885 235,840 289,689 282,098 247,479 Storage Income 0.08 12,433 13,677 13,675 14,318 13,679 14,620 15,093 15,720 16,588 16,037 17,406 Parking Income 1.29 210,355 216,666 223,166 229,861 236,756 243,859 251,175 258,710 266,471 274,466 282,700 Antenna Income 0.48 78,383 76,248 74,711 86,013 88,593 91,251 93,988 96,808 99,712 102,703 105,785 Sub-Metered Electric 0.02 4,030 4,151 4,276 4,404 4,536 4,672 4,812 4,957 5,106 5,259 5,416 ______Total Potential Gross Revenue 23.85 3,892,579 4,654,437 5,461,580 5,473,121 5,659,686 5,623,568 5,928,824 6,301,830 6,421,219 6,525,285 6,461,361 Vacancy & Credit Loss 0.00 0 (130,604) (271,296) (88,904) (119,120) 0 (107,237) (270,549) (167,189) (97,610) 0 ______Effective Gross Revenue 23.85 3,892,579 4,523,833 5,190,284 5,384,217 5,540,566 5,623,568 5,821,587 6,031,281 6,254,030 6,427,675 6,461,361 ______Operating Expenses Management Fee (1.5%) 0.36 58,389 67,857 77,854 80,763 83,108 84,354 87,324 90,469 93,810 96,415 96,920 Cleaning 1.43 233,684 240,695 247,915 255,353 263,013 270,904 279,031 287,402 296,024 304,905 314,052 Utilities 2.47 403,034 415,125 427,579 440,406 453,618 467,227 481,244 495,681 510,551 525,868 541,644 Repair & Maintenance 0.95 155,039 159,690 164,481 169,415 174,498 179,733 185,125 190,678 196,399 202,291 208,359 Contract Services 0.56 90,941 93,669 96,479 99,374 102,355 105,426 108,588 111,846 115,201 118,657 122,217 Personnel 0.71 116,134 119,618 123,207 126,903 130,710 134,631 138,670 142,830 147,115 151,529 156,074 Insurance 0.20 32,041 33,002 33,992 35,012 36,062 37,144 38,259 39,406 40,589 41,806 43,060 Taxes 2.71 442,472 469,496 485,480 500,044 515,046 530,497 546,412 562,804 579,689 597,079 614,992 Adminstrative (reimb) 1.01 164,426 169,359 174,440 179,673 185,063 190,615 196,333 202,223 208,290 214,539 220,975 ______Total Operating Expenses 10.39 1,696,160 1,768,511 1,831,427 1,886,943 1,943,473 2,000,531 2,060,986 2,123,339 2,187,668 2,253,089 2,318,293 ______Net Operating Income 13.46 2,196,419 2,755,322 3,358,857 3,497,274 3,597,093 3,623,037 3,760,601 3,907,942 4,066,362 4,174,586 4,143,068 ______Leasing & Capital Costs Tenant Improvements 9.15 1,492,800 637,835 53,300 461,688 692,458 1,334,626 755,833 61,789 286,012 1,095,018 1,497,299 Leasing Commissions 2.61 426,132 180,601 17,719 178,235 234,820 454,372 319,832 21,036 122,769 372,797 536,478 Capital Reserve 0.20 32,639 33,618 34,627 35,665 36,735 37,837 38,972 40,142 41,346 42,586 43,864 ______Total Leasing & Capital Costs 11.96 1,951,571 852,054 105,646 675,588 964,013 1,826,835 1,114,637 122,967 450,127 1,510,401 2,077,641 ______Cash Flow Before Debt Service 1.50 244,848 1,903,268 3,253,211 2,821,686 2,633,080 1,796,202 2,645,964 3,784,975 3,616,235 2,664,185 2,065,427 ======Year 1 PSF Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending 163,194 SF Apr-2017 Apr-2018 Apr-2019 Apr-2020 Apr-2021 Apr-2022 Apr-2023 Apr-2024 Apr-2025 Apr-2026 Apr-2027

ASSUMPTIONS ANALYSIS START DATE May 01, 2016

NET RENTABLE AREA Occupied Area 115,502 70.8% Vacant 47,692 29.2% Total NRA 163,194

MARKET LEASING Annual Tenant Leasing Free Rent ASSUMPTIONS Market Lease Lease Renewal Improvements Commissions Rent Lease Type Term Probability Downtime (Upon Rollover) Escalations New Renew New Renew New Renew Retail Areas $25.00 3.0% F/S, NOE 10 years 75% 9 mo $25.00 $5.00 6.0% 4.0% 0 mo 0 mo Bank Space $50.00 3.0% Full Service 10 years 75% 9 mo $60.00 $10.00 6.0% 4.0% 0 mo 0 mo Office Space (Floors 1 - 6) $28.50 3.0% Full Service 5 years 75% 9 mo $50.00 $10.00 6.0% 4.0% 5 mo 2 mo The above schedule, “Market Leasing Assumptions (Upon Rollover)”, reflects market assumptions upon rollover of existing tenants and after the initial term for all existing vacancies being leased-up per the schedule to the right, Initial Lease-Up Schedule. Rent Abatement: All leases expiring during Years 1 & 2 of the proforma receive 5 months of free rent for new leases and 2 months for renewals. During Year 3, new deals get 3 months free, renewals 1 month free. Year 4, new deals get 3 months free, renewals 0 months. Year 5, new deals get 1 month free, renewals 0 months. Year 6+, no free rent is given.

INFLATION RATES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+ General Inflation (CPI) - 3.0% 3.0% 3.0% 3.0% 3.0% Market Rent Inflation - 3.0% 3.0% 3.0% 3.0% 3.0%

MISCELLANEOUS INCOME PSF Year 1 Comments Storage Income $0.08 $12,433 There are 11 storage units that are not part of the building's square footage. Seven units are leased. No income is applied to remaining vacant units. Parking Income $1.29 $210,355 Reflects the owner's 2015 actuals increased 3%. The parking garage is operated under a management agreement with SP+ Parking. The current monthly rate is $80/month. Antenna Income $0.48 $78,383 Reflects the actual terms for two rooftop antennas: AT&T through 5/2018, and T-Mobile through 11/2017. Upon expiration, two months of downtime is incorporated every year 5 years and rent is increased 3%. Sub-Metered Electric $0.02 $4,069 Represents 1% of total Utilities.

VACANCY & CREDIT LOSS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+ 8.0% 8.0% 7.0% 6.0% 5.0% 5.0% of Scheduled Base Rental Revenue, less, Absorption & Turnover. Excludes investment grade tenants.

OPERATING EXPENSES Operating expenses are based on the owner’s 2015 actuals increased 3%. PSF Year 1 Comments Management Fee (1.5%) $0.36 $58,389 1.5% of EGR is charged to the Property; however, 3.0% is billed to the clients. Cleaning $1.43 $233,684 Includes janitorial contract ($216,965), trash ($11,403), and window washing ($5,316). Utilities $2.47 $403,034 Only 99% of Utilities is passed-through to the tenants; 1% is a direct reimbursement for submetered electric and water. Utilities includes electric ($382,548), water and sewer ($14,840), and gas ($5,646). Repair & Maintenance $0.95 $155,039 Contract Services $0.56 $90,941 Personnel $0.71 $116,134 Reflects engineering costs. Insurance $0.20 $32,041 Taxes $2.71 $442,472 Taxes represent the Property’s actual tax assessments through 6/2018, times, the current tax year’s rates. The triennial assesments are as follows: $31,072,500 ending 6/16, $33,145,000 ending 6/17, and $35,217,500 ending 6/18. Effective 7/2018, and each year thereafter, the assessed value increases by General Inflation. Administrative (reimb) $1.01 $164,426 Primarily Includes property management salary and overhead ($114,169), admin other for office rent ($22,657), and telephone ($11,852).

CAPITAL Capital Reserve $0.20 $32,639 Increases annually by General Inflation ANALYSIS START DATE May 01, 2016 INITIAL LEASE-UP SUITE SQ FT START RENT/SF TERM INC. TI / SF FREE COMMENTS SCHEDULE NET RENTABLE AREA Occupied Area 115,502 70.8% 20 2,095 SF Sep-2016 $25.00 10 yrs 3.0% $50 / SF 5 mos Retail with direct access to hotel Vacant 47,692 29.2% 103 10,365 SF Apr-2017 $28.50 10 yrs 3.0% $50 / SF 10 mos Ground floor office space Total NRA 163,194 240 5,533 SF Sep-2016 $28.50 5 yrs 3.0% $50 / SF 5 mos Gutted, white-boxed 250 2,886 SF Mar-2017 $28.50 5 yrs 3.0% $50 / SF 5 mos Vacant 4/1/16 MARKET LEASING Annual Tenant Leasing Free Rent ASSUMPTIONS Market Lease Lease Lease Renewal Downtime Improvements Commissions Rent Type Term Probability 295 1,296 SF Nov-2016 $28.50 5 yrs 3.0% $40 /SF 5 mos (Upon Rollover) Escalations New Renew New Renew New Renew Retail Areas $25.00 3.0% F/S, NOE 10 years 75% 9 mo $25.00 $5.00 6.0% 4.0% 0 mo 0 mo 310 3,616 SF Jul-2016 $28.50 5 yrs 3.0% $30 / SF 5 mos Good condition Bank Space $50.00 3.0% Full Service 10 years 75% 9 mo $60.00 $10.00 6.0% 4.0% 0 mo 0 mo 325 3,325 SF May-2016 $28.50 5 yrs 3.0% $45 / SF 5 mos Gutted, white-boxed Office Space (Floors 1 - 6) $28.50 3.0% Full Service 5 years 75% 9 mo $50.00 $10.00 6.0% 4.0% 5 mo 2 mo 340 2,904 SF Jan-2017 $28.50 5 yrs 3.0% $25 / SF 5 mos Coming vacant 9/1/16 The above schedule, “Market Leasing Assumptions (Upon Rollover)”, reflects market assumptions upon rollover of existing tenants and after the initial term for all 350 1,791 SF Apr-2017 $28.50 5 yrs 3.0% $25 / SF 5 mos existing vacancies being leased-up per the schedule to the right, Initial Lease-Up Schedule. 370 4,815 SF Jul-2017 $29.36 5 yrs 3.0% $25 / SF 5 mos Coming vacant 9/1/16 Rent Abatement: All leases expiring during Years 1 & 2 of the proforma receive 5 months of free rent for new leases and 2 months for renewals. During Year 3, new deals get 3 months free, renewals 1 month free. Year 4, new deals get 3 months free, renewals 0 months. Year 5, new deals get 1 month free, renewals 0 550 9,066 SF Oct-2017 $29.36 5 yrs 3.0% $40 / SF 5 mos months. Year 6+, no free rent is given.

INFLATION RATES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+ General Inflation (CPI) - 3.0% 3.0% 3.0% 3.0% 3.0% Market Rent Inflation - 3.0% 3.0% 3.0% 3.0% 3.0%

VACANCY & CREDIT LOSS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+ 8.0% 8.0% 7.0% 6.0% 5.0% 5.0% of Scheduled Base Rental Revenue, less, Absorption & Turnover. Excludes investment grade tenants.

CAPITAL Capital Reserve $0.20 $32,639 Increases annually by General Inflation 46 FINANCIAL ANALYSIS

LEASE COMPARABLES

5635 FISHERS LANE 11200 ROCKVILLE PIKE 12300 TWINBROOK PKWY 1451 ROCKVILLE PIKE 1 ROCKVILLE, MD 2 ROCKVILLE, MD 3 ROCKVILLE, MD 4 ROCKVILLE, MD

6006 EXECUTIVE BLVD 1801 ROCKVILLE PIKE 1801 ROCKVILLE PIKE 3204 TOWER OAKS BLVD 5 ROCKVILLE, MD 6 ROCKVILLE, MD 7 ROCKVILLE, MD 8 ROCKVILLE, MD

NEW RENEWALS 1 2 3 4 5 6 7 8 Furtend RR Donnelley Executive Child Red Zebra Montogmery TENANT Aliron International Motionsoft iHeartRadio Technology Financial, Inc. Development Ctr Broadcasting Childcare Ass'n

SF LEASED 5,907 SF 28,116 SF 2,682 SF 20,127 SF 29,942 SF 11,502 SF 68,121 SF 2,011 SF

TERM 5 Years, 5 Months 5 Years, 6 Months 3 Years, 4 Months 11 Years 10 Years 6 Years, 8 Months 10 Years 11 Years

YEAR 1 RENT $29.00 psf, FS $29.00 psf, FS $28.00 psf, FS $27.50 psf, FS $32.00 psf, FS $30.50 psf, FS $32.50 psf, FS $29.00 psf, FS

EXECUTION Feb-16 Sep-15 Sep-15 Jun-15 Aug-15 May-15 Feb-15 Jan-15

FREE RENT 5 month(s) 6 month(s) 4 month(s) 6 month(s) 0 month(s) 4 month(s) 0 month(s) 0 month(s)

IMPROVEMENTS $25.00 psf $40.00 psf $0.00 psf $60.00 psf $40.00 psf $10.00 psf $20.00 psf $35.00 psf

ESCALATIONS 2.75% /Yr 2.75% /Yr 2.50% /Yr 3.00% /Yr 2.25% /Yr 2.75% /Yr 2.75% /Yr 3.00% /Yr SALE COMPARABLES

NORTH BETHESDA PLACE I & II 7401 WISCONSIN AVENUE & BETHESDA OFFICE CENTER 11400 ROCKVILLE PIKE & 1 5515 SECURITY LANE 2 4600 EAST WEST HWY 3 4520 EAST WEST HWY ROCKVILLE, MD BETHESDA, MD BETHESDA, MD

FOUR IRVINGTON CENTRE BLACKWELL II BETHESDA CENTER NORTH ELEMENT 12420 4 805 KING FARM BLVD 5 9600 BLACKWELL 6 11601 LANDSDOWN ST 7 12420 PARKLAWN DR ROCKVILLE, MD ROCKVILLE, MD NORTH BETHESDA, MD ROCKVILLE, MD

1 2 3 4 5 6 7

SUBMARKET North Bethesda Bethesda Bethesda North Rockville Rockville North Bethesda Rockville

RSF 413,892 SF 140,135 SF 174,449 SF 224,258 SF 102,647 SF 358,440 SF 93,014 SF

CLASS B B B A- A- A A

JBG Companies/ Brookfield Office SELLER AEW AREP/State of Utah LNR - Auction.com LCOR Inc. JBG Companies Wells Properties True North Mgmt BUYER Hines AustralianSuper Peel Properties AREP USAA RE Company NGP V Mgmt Group

PRICE $55,000,000 $39,550,463 $64,000,000 $61,000,000 $17,175,000 $195,000,000 $30,055,000

PRICE PSF $133 psf $282 psf $367 psf $272 psf $167 psf $544 psf $323 psf

CAP RATE 7.00% 5.20% 5.69% 8.87% - 7.20% 7.50%

CLOSE DATE Jan-16 Jun-15 Jun-15 Feb-15 Apr-15 Feb-14 Jan-14

LOCATION Inferior Comparable Comparable Inferior Inferior Comparable Inferior

QUALITY Comparable Comparable Comparable Superior Superior Superior Superior

CONDITIONS Built in 1972 & 1982. Built in 1955 & 1988. Built in 1980. Built in 2007. 96% Built in 2001. 74% Built in 2012. Single Built in 1972 and Multi-tenanted 96% leased at the In-place tenancy leased. Anchored leased at time of tenant building, fully underwent a $17 buildings, 55% time of sale. Part of a declining from by Aronson & sale. Anchored by leased to the GSA MM rennovation leased. Within 10-building portfolio 67% to 50%, Company through Shady Grove Fertility. (Nuclear Regulatory in 2009. Single walking distance sale comprised of however Buyer 2020. No Metrorail No Metrorail Commission) tenant buildings of the White Flint 2.2 million square plans to occupy accessibility. accessibility. Parking through October leased to The GSA Metrorail station. feet. Brookfield sold approximately ratio of 4.29/1000. 2027. Within (US Food and Drug 49% stake in the 25,000 SF. One walking distance Adm.) through 2020. portfolio. Directly block from the of the White Flint Located 1/2 mile across from the Bethesda Metrorail Metrorail station. from the Twinbrook Bethesda Metrorail station. Subject to a ground Metrorail station. station. lease.

TRANSWESTERN (including their affiliates, subsidiaries, related parties, successors, and assigns, hereinafter referred to singly and collectively as “Transwestern” or “Agent”) have been engaged as the exclusive agent by the owner (“Owner” or “Seller”) for the fee simple sale of a 163,194 SF Class B+ office building commonly known as Twinbrook Office Center located at 1700 Rockville Pike in Rockville, Maryland (the “Property”).

The Property is being offered for sale in an “as-is, where-is” condition and the Seller and the Agent make no representations or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the interest described herein. Neither the enclosed materials, nor any information contained herein, are to be used for any other purpose, or made available to any other person without the express written consent of the Seller. Each recipient, as a prerequisite to receiving the enclosed information, should be registered with Transwestern Commercial Services as a “Registered Potential Investor” or as “Buyer’s Agent” for an identified “Registered Potential Investor”. The use of this Offering Memorandum and the information provided herein, is subject to the terms, provisions and limitations of the Confidentiality Agreement furnished by the Agent prior to delivery of this Offering Memorandum.

The enclosed materials are being provided solely to facilitate the prospective investor’s due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable, but no representation or warranty, express or implied, is being made by the Agent or the Seller or any of their respective representatives, affiliates, officers, employees, shareholders, partners and directors, as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions contained therein. Neither the Agent or the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained herein, or any other written or oral communications, or information transmitted, or made available, or any action taken, or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections and conclusions without reliance upon the material contained herein.

The Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. The Seller and the Agent each expressly reserve the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This Offering Memorandum is made subject to omissions, corrections or errors, change of price or other terms, prior sale or withdrawal from the market without notice. The Agent is not authorized to make any representations or agreements on behalf of the Seller.

The Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered and approved by the Seller and any conditions to the Seller’s obligations thereunder have been satisfied or waived. By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential nature and will be held and treated in the strictest confidence and shall be returned to the Agent or the Seller promptly upon request; and (b) the recipient shall not contact employees or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or the Agent; and (c) no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of the Seller or the Agent or as otherwise provided in the Confidentiality Agreement executed and delivered by the recipient(s) to Transwestern.

The Seller will be responsible for any commission due the Agent in connection with a sale of the Property. Each prospective purchaser will be responsible for any claims for commissions by any other broker or agent in connection with a sale of the Property if such claims arise from acts of such prospective purchaser or its broker/agent. Any Buyer’s Agent must provide a registration signed by the prospective investor acknowledging said agent’s authority to act on its behalf.

If you have no interest in the Property at this time, please return this Offering Memorandum to the address below if it is a hard copy or delete the file if it is an electronic copy:

Transwestern Mid-Atlantic Capital Markets Group 1717 K Street, NW, Suite 1000 Washington, DC 20006 Attention: Gerald P. Trainor, Executive Managing Director Mid-Atlantic Investment Sales

Mid-Atlantic Capital Markets Group Private Capital Group

Gerald Trainor, CFA Julian Etches Executive Managing Director Managing Director Jim Cardellicchio Vince Ingram Managing Director Director Wesley Machowsky Jim Darby Director Senior Vice President Kimberly Mughal 6700 Rockledge Drive Director Suite 500A Bethesda, MD 20817 1717 K Street 301.571.0900 Suite 1000 Washington, DC 20006 Leo McDermott 202.775.7000 Vice President Mark Glagola 7160 Columbia Gateway Drive Managing Director Suite 210 Columbia, MD 21046 Thomas Hilley III 443.285.0770 Senior Associate Tina Wakley Senior Associate 7160 Columbia Gateway Drive Suite 210 Columbia, MD 21046 443.285.0770

Multifamily Group

Dean Sigmon Executive Vice President Robin Williams Executive Vice President Justin Shay Vice President Chaise Schmidt Senior Associate 6700 Rockledge Drive Suite 500A Bethesda, MD 20817 301.571.0900

1717 K Street, NW Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, Suite 1000 tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages Washington, DC 20006 competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners T. 202.775.7000 and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 180 offices in 37 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate.

For more information, visit us at www.transwestern.com