Office 600 University Street, Suite 2220 Seattle, 98101

Commercial Real Estate Services broderickgroup.com SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016

DOWNTOWN SEATTLE OFFICE MARKET STATISTICS

Entire Seattle Market # of buildings w/ 50,000 SF or more of contiguous Total SF: 53,760,829 Qtr Change YTD Change available space within Vacant SF: 3,545,443 each category Vacant %: 6.59% ( -0.52%) ( -0.52%) Asking Rates: $35.36/SF, G ( +$0.00) ( +$0.00) Entire Seattle Market Absorption Qtr: 533,619 SF Absorption YTD: 533,619 SF

Class A Buildings 15 Total SF: 34,876,090 Vacant SF: 2,299,700 Qtr Change YTD Change Class A Buildings Vacant %: 6.59% ( -1.03%) ( -1.03%) Asking Rates: $40.28/SF, G ( +$0.41) ( +$0.41) Absorption Qtr: 509,901 SF 10/ Absorption YTD: 509,901 SF 15

Class A CBD Class A CBD Total SF: 18,844,936 Vacant SF: 1,211,539 Qtr Change YTD Change Vacant %: 6.43% ( -1.90%) ( -1.90%) 5/ Asking Rates: $40.66/SF, G ( +$0.59) ( +$0.59) 15 Absorption Qtr: 354,152 SF Absorption YTD: 354,152 SF Class A+* Class A+ * Total SF: 6,102,368 Vacant SF: 408,583 Qtr Change YTD Change 1 / Vacant %: 6.70% ( -1.14%) ( -1.14%) 15 Asking Rates: $44.00/SF, G ( -$0.29) ( -$0.29) Absorption Qtr: 94,307 SF Absorption YTD: 94,307 SF

Two , US Bank Centre, Fourth & Madison, , * broderickgroup.com | pg. 2 Russell Investments Center, 1918 Eighth, West 8th SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016

SIGNIFICANT LEASES Significant Leases LEASING ACTIVITY Quarter Tenant Building Submarket Size (SF) Significant leases in the Seattle area for the First Quarter were Q1 2016 Google 625 Boren Lake Union 607,000 dominated by technology market movers leasing space in both existing and future space. The largest deal of the quarter was Google’s Q1 2017 Amazon Urban Union Lake Union 287,000 Seattle campus move by pre-leasing 607,000 SF at Vulcan’s 625 Boren Q1 2016 Saltchuk 450 Alaskan Pioneer Square 91,357 development. Additionally, Amazon leased 287,000 SF of Urban Union, which has an expected Q2 2016 delivery. Additional notable leases Q1 2016 Oracle (Expansion) Century Square CBD 88,000 were Saltchuk’s 91,357 SF lease at 450 Alaskan (Q3 2017), making it the Q1 2016 Qumulo (Expansion) Century Square CBD 67,000 first tenant of the development. In Century Square, both Oracle and Qumulo expanded to 88,000 SF and 67,000 SF respectively. Expedia Q1 2016 Expedia 645 Elliott Waterfront 38,000 leased a full floor of 38,000 SF at 645 Elliott and F5 Networks leased Q1 2016 F5 Networks Elliott Bay Office Park Queen Anne 20,000 20,000 SF at Elliott Bay Office Park. Q4 2015 Insurance (Expansion + Renewal) CBD 504,000 LARGESTLargest CONTIGUOUS Contiguous Blocks BLOCKS Q4 2015 DocuSign 999 Third CBD 119,000 Available Square Rank Building Submarket Floors Feet 1 300 Pine CBD 5-8 312,691 Q4 2015 Moss Adams (Renewal) 999 Third CBD 77,274 2 2nd & Seneca CBD 2-9 204,620 Q4 2015 URS Aecom 1111 Third CBD 55,000 3 Elliott Bay Office Park Queen Anne 1-5 179,017 4 Hill7 Denny Regrade 2-7 168,203 Q4 2015 Seattle Credit Union Home Plate Center (S) SODO 43,500 5 325 Eastlake - Yale & Thomas Lake Union 1-7 161,095 6 1101 Westlake Lake Union 1-6 150,621 Q4 2015 Groupon 1201 Third CBD 42,000 7 Met Park East CBD 2-7 117,835 Q4 2015 Antioch University 3rd & Battery Denny Regrade 38,000 8 800 5th CBD 23-28 117,601 9 8th & Olive CBD 1-7 97,301 Q3 2015 Tableau Software North Edge Lake Union 210,000 10 800 Fifth CBD 4-5 81,272 Q3 2015 Avvo 8th & Olive CBD 100,000 MostMOST Vacant VACANT Buildings BUILDINGS (Sorted By (BY Percentage AVAILABLE Available) SF) Available Percent Rank Building Submarket Q3 2015 Uber Second & Seneca CBD 50,000 Square Feet Available 1 300 Pine CBD 312,691 100% Q3 2015 Hillis Clark Martin 999 Third CBD 32,000 2 1101 Westlake Lake Union 150,621 100% 3 325 Eastlake - Yale & Thomas Lake Union 161,095 88% Q3 2015 Perkins + Will CBD 20,300 4 Elliott Bay Office Park Queen Anne 179,017 72% Q2 2015 Holland America Line Holland America Building Queen Anne 175,000 5 Hill7 Denny Regrade 170,064 57% 6 2nd & Seneca CBD 221,661 42% Q2 2015 Community Health Plan 1111 Third CBD 91,816 7 800 Fifth CBD 331,397 35% Q2 2015 Juno Therapeutics 400 Dexter Lake Union 80,000 8 Fourth & Madison CBD 141,932 17% Stadium Innovation 9 1201 Third CBD 144,406 13% Q2 2015 Oculus VR SODO 51,000 Center 10 CBD 194,260 12% Q2 2015 Pitchbook 901 Fifth CBD 35,000

broderickgroup.com | pg. 3 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Seattle Office Market Class A Historical Overview Seattle ClassHistorical A Office MarketSummary 2005 - First Quarter 2016 Historical Overview Forecast 2016 - 2019

Avg. Gross Year-End Vacant Net Vacancy Annual Rent Rate Year Rental Rate New Construction Inventory SquareSeattle Feet ClassAbsorption A Office MarketRate Growth Growth SEATTLE OFFICE MARKET FORECAST (Direct) Historical Overview

2005 $26.13 25,624,369 Avg. Gross 0 2,685,342 376,601 10.5% 1.5% -1.7% Year-End Vacant Net Vacancy Annual Rent Rate Year Rental Rate New Construction Inventory Square Feet Absorption Rate Growth Growth The Seattle Class A vacancy rate is projected 2006 $29.41 26,695,478 (Direct)1,071,109 2,009,591 1,888,918 7.5% 7.1% 12.6% Seattle Class A Office Market 2005 $26.13 25,624,369 0 2,685,342 376,601 10.5% 1.5% -1.7% to continue decreasing throughout the Historicalsecond Overview 2007 $37.31 26,917,043 221,565 2,121,980 124,752 7.9% 0.5% 26.9% 2006 $29.41 26,695,478 1,071,109 2,009,591 1,888,918 7.5% 7.1% 12.6% quarter of 2016.Avg. Gross With new buildings delivering 2008 $37.91 27,446,933 529,890 2,963,393 (119,506) 10.8% -0.4% 1.6% Year-End Vacant Net Vacancy Annual Rent 2007Rate $37.31 26,917,043 221,565 2,121,980 124,752 7.9% 0.5% 26.9% Year Rental Rate New Construction Inventory Square Feet Absorption Rate Growth Growth in 2016, vacancy(Direct) should slightly increase later 2009 $31.41 29,861,3352008 $37.912,414,402 27,446,933 5,936,082529,890 (644,971)2,963,393 (119,506)19.9% 10.8%-2.2% -0.4%-17.1%1.6%

2005 $26.13 25,624,369 0 2,685,342 376,601 10.5% 1.5% -1.7%2009 $31.41 29,861,335 2,414,402 5,936,082 (644,971) 19.9% -2.2% -17.1% this year. 2010 $31.38 30,762,677 901,342 5,554,673 994,359 18.1% 3.2% -0.1% 2006 $29.41 26,695,478 1,071,109 2,009,591 1,888,918 7.5% 7.1% 12.6%2010 $31.38 30,762,677 901,342 5,554,673 994,359 18.1% 3.2% -0.1% 2011 $31.20 31,608,885 846,208 4,590,319 1,178,488 14.5% 3.7% -0.6% 2007 $37.31 26,917,043 221,565 2,121,980 124,752 7.9% 0.5% 26.9%2011 $31.20 31,608,885 846,208 4,590,319 1,178,488 14.5% 3.7% -0.6%

In addition,2008 high$37.91 price 27,446,933sales of Class529,890 A office2,963,393 (119,506)2012 10.8%$31.80 -0.4% 31,985,9041.6%2012 $31.80400,563 31,985,904 4,254,955400,563 1,490,4424,254,955 1,490,44213.3% 13.3%4.7% 4.7% 1.9% 1.9% 2009 $31.41 29,861,335 2,414,402 5,936,082 (644,971) 19.9% -2.2% -17.1% buildings in 2015 will continue the upwards 2013 $33.62 32,027,0222013 $33.62180,710 32,027,022 3,702,487180,710 800,7123,702,487 800,71211.6% 11.6%2.5% 2.5% 5.7% 5.7% 2010 $31.38 30,762,677 901,342 5,554,673 994,359 18.1% 3.2% -0.1%2014 $34.95 32,661,260 480,000 3,018,471 1,029,132 9.2% 3.2% 4.0% 2014 $34.95 32,661,260 480,000 3,018,471 1,029,132 9.2% 3.2% 4.0% momentum2011 on$31.20 rents as 31,608,885the new owners846,208 aim to4,590,319 1,178,488 14.5% 3.7% -0.6%2015 $39.87 34,707,290 1,778,064 2,646,575 969,059 7.6% 2.8% 14.1%

$31.80 31,985,904 400,563 4,254,955 1,490,4422015 13.3%$39.87 4.7% 34,707,2901.9% 1,778,064 2,646,575 969,059 7.6% 2.8% 14.1% hit their2012 underwriting projections while taking Q1 2016 $40.28 34,847,290 140,000 2,276,674 509,901 6.5% 1.5% 1.0% 2013 $33.62 32,027,022 180,710 3,702,487 800,712 11.6% 2.5% 5.7% advantage of the lack of expected deliveries – Q1 2016 $40.28 34,847,290Projected - End of Year 140,000 2,276,674 509,901 6.5% 1.5% 1.0% 2014 $34.95 32,661,260 480,000 3,018,471 1,029,132 9.2% 3.2% 4.0%2016 $41.86 36,620,481 1,913,191 2,609,766 1,950,000 7.1% 2.8% 5.0% Projected - End of Year with available2015 $39.87 space – 34,707,290in the first and1,778,064 second2,646,575 969,059 7.6% 2.8% 14.1%2017 $43.54 39,772,770 3,152,289 3,852,942 1,909,113 9.7% 4.8% 4.0% 2016 $41.86 36,620,481 1,913,191 2,609,766 1,950,000 7.1% 2.8% 5.0% quartersQ1 2016 of 2016.$40.28 34,847,290 140,000 2,276,674 509,901 6.5% 1.5% 1.0%2018 $45.28 42,190,770 2,418,000 4,718,321 1,552,620 11.2% 3.7% 4.0% Projected - End of Year 2017 $43.54 39,772,7702019 $42.523,152,28943,660,770 3,852,9421,470,000 1,909,1134,580,169 1,608,1529.7% 10.5%4.8% 3.7% 4.0% 4.0%

2016 $41.86 36,620,481 1,913,191 2,609,766 1,950,000 7.1% 2.8% Summary5.0% 2016-2019 Total Average Total Average Average Average 2018 $45.28 42,190,770 2,418,000 4,718,321 1,552,620 11.2% 3.7% 4.0% 2017 $43.54 39,772,770 3,152,289 3,852,942 1,909,113 9.7% 4.8% 4.0% 8,953,480 3,940,300 7,019,886 9.6% 3.7% 4.3% 2019 $42.52 43,660,770Notes: 1,470,000 4,580,169 1,608,152 10.5% 3.7% 4.0% 2018 $45.28 42,190,770 2,418,000 4,718,321 1,552,620 11.2% 3.7% 14.0% Year end inventory, (CBD, Denny, Lk Union, Pioneer Sq, Waterfront, Fremont/UW), Class A, 20,000 SF and greater buildings (CoStar). Excludes owner/user. 2 Vacant square feet and total absorption statistics provided by CoStar. Includes direct and sublease space. 2019 $42.52 43,660,770 1,470,000 4,580,169 Summary1,608,152 2016-201910.5% 3.7% 4.0% Total Average Total Average Average Average 3 New supply 2016-2019 is product of known projects and estimated probability of completion/financing. Summary 2016-2019 Total Average Total Average Average Average4 All data are from end of the quarter8,953,480 specified. 3,940,300 7,019,886 9.6% 3.7% 4.3% 5 Annual growth is net absorption divided by inventory. 8,953,480 3,940,300 Notes:7,019,886 9.6% 3.7% 64.3% 2012 deliveries included: Amazon Phase V, Emerald Landing, and Home Plate Center I Notes: 1 Year end inventory, (CBD, Denny, Lk Union, Pioneer7 2013 Sq, deliveries Waterfront, included: Fremont/UW), Bullitt Center (50k) Class delivered A, in20,000 Q2, 202 SF Westlake and greater (130k) delivered buildings in Q3 (CoStar). Excludes owner/user. 1 Year end inventory, (CBD, Denny, Lk Union, Pioneer Sq, Waterfront, Fremont/UW), Class A, 20,000 SF and greater buildings (CoStar). Excludes owner/user. 8 2014 deliveries included: Stone34 (106k) delivered in Q2, and Vulcan - Amazon Phase VI (392k) delivered in Q4 2 Vacant square feet and total absorption statistics provided by CoStar. Includes direct and sublease space. 2 Vacant square feet and total absorption statistics provided by CoStar. Includes direct and sublease space. 9 2015 deliveries include: Dexter Station (346k) delivered in Q1, Hill7 (285k) delivered in Q2, 400 Fairview (320k), Amazon Phase VII (312k), Amazon Phase VIII (316k), Allen Institute for Brain Science (245k), and Westlake Steps (150k) 3 New supply 2016-2019 is product of known projects and estimated probability of completion/financing. 3 New supply 2016-2019 is product of known projects and estimated probability of completion/financing. 10 2016 projected deliveries include: Troy Block Phase 1 (395k), NorthEdge (214k), 200 Occidental (173k), 2701 Eastlake (44k), 4 All data are from end of the quarter specified. 4 All data are from end of the quarter specified. Urban Union (291k), 1007 Stewart (365k), Fairview Research Center II (140k), and 503 Westlake (39k) 5 Annual growth is net absorption divided by inventory. 11 2017 projected deliveries include: (750k), The Mark (528k),Troy Block Phase 2 (422k), 400 Dexter (254k), Roy Street (200k), 450 Alaskan (165k), Tilt49 (307k), 15th & Market (202k), 5 Annual growth is net absorption divided by inventory.and Hawk Tower (200k) 6 2012 deliveries included: Amazon Phase V, Emerald Landing, and Home Plate Center I 6 2012 deliveries included: Amazon Phase V, Emerald12 2018Landing, projected and deliveries Home include: Plate 333Center 8th Avenue I North (194k), 300 8th Avenue North (194k), Legacy Commercial Development (60k), Sellen Site (153k), Amazon's 4th Block (836k), and Vulcan's 7 2013 deliveries included: Bullitt Center (50k) delivered in Q2, 202 Westlake (130k) delivered in Q3 Block 48 (400k) 8 2014 deliveries included: Stone34 (106k) delivered in Q2, and Vulcan - Amazon Phase VI (392k) delivered in Q4 7 2013 deliveries included: Bullitt Center (50k) delivered13 2019 in Q2,projected 202 deliveries Westlake include: (130k) Rainier delivered Square (780k), in Q3 Second & University (690k) 9 2015 deliveries include: Dexter Station (346k) delivered in Q1, Hill7 (285k) delivered in Q2, 400 Fairview (320k), Amazon Phase VII (312k), Amazon Phase VIII (316k), Allen Institute for Brain Science (245k), and Westlake Steps (150k) 8 2014 deliveries included: Stone34 (106k) delivered in Q2, and Vulcan - Amazon Phase VI (392k) delivered in Q4 10 2016 projected deliveries include: Troy Block Phase 1 (395k), NorthEdge (214k), 200 Occidental (173k), 2701 Eastlake9 2015(44k), deliveries include: Dexter Station (346k) delivered in Q1, Hill7 (285k) delivered in Q2, 400 Fairview (320k), Amazon Phase VII (312k), Amazon Phase VIII (316k), Allen Institute for Brain Science Urban Union (291k), 1007 Stewart (365k), Fairview Research Center II (140k), and 503 Westlake (39k) (245k), and Westlake Steps (150k) 11 2017 projected deliveries include: Madison Centre (750k), The Mark (528k),Troy Block Phase 2 (422k), 400 Dexter (254k), Roy Street (200k), 450 Alaskan (165k), Tilt49 (307k), 15th & Market (202k), and Hawk Tower (200k) 10 2016 projected deliveries include: Troy Block Phase 1 (395k), NorthEdge (214k), 200 Occidental (173k), 2701 Eastlake (44k), broderickgroup.com | pg. 4 12 2018 projected deliveries include: 333 8th Avenue North (194k), 300 8th Avenue North (194k), Legacy Commercial DevelopmentUrban Union (60k), (291k), Sellen Site 1007 (153k), Stewart Amazon's (365k), 4th Block Fairview (836k), and Research Vulcan's Center II (140k), and 503 Westlake (39k) Block 48 (400k) 11 2017 projected deliveries include: Madison Centre (750k), The Mark (528k),Troy Block Phase 2 (422k), 400 Dexter (254k), Roy Street (200k), 450 Alaskan (165k), Tilt49 (307k), 15th & Market (202k), 13 2019 projected deliveries include: Rainier Square (780k), Second & University (690k) and Hawk Tower (200k) 12 2018 projected deliveries include: 333 8th Avenue North (194k), 300 8th Avenue North (194k), Legacy Commercial Development (60k), Sellen Site (153k), Amazon's 4th Block (836k), and Vulcan's Block 48 (400k) 13 2019 projected deliveries include: Rainier Square (780k), Second & University (690k) SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Seattle Office Class A Market Vacancy Percentage and Average Gross Rental Rates Class A Vacancy Vs Rates (* Projected) CLASS A VACANCY RATES 22.5% $45.28 At 6.59%, Class A Seattle vacancy rates decreased by -1.04% over- 19.9% $45.00 20.0% $43.54 $42.52 all since the end of the 2015 year. Over the course of the First 18.1% $41.86 17.5% $40.28 $39.87 Quarter, the Lake Union submarket (+0.79%) saw an increase $40.00

$37.91 14.5% in vacancy from the end of 2015, as well as Pioneer Square 15.0% 14.1% $37.31 13.1% 13.3% which experienced an increase of +0.27%. All other submarkets 12.5% Rental Rate ($) $34.95 12.5% 11.6% $35.00 $33.62 11.2% 10.8% experienced a loss of vacancy at the end of the First Quarter of 10.5% 10.5% 9.7% 10.0% $31.41 $31.80 $31.38 $31.20 9.2% 2016: Seattle CBD (-1.90%) – which has the strongest influence $30.27 $29.41 7.9% 7.5% 7.6% $30.00 7.5% 7.1% on the overall vacancy – Waterfront (-2.20%), Fremont (-0.30%), (%) Vacancy $27.80 6.5% $26.57 and Denny Regrade (-0.22%). Due to the decreases in vacancies $26.13 5.0% among all but two of the submarkets, the overall Class A Seattle $25.00 vacancy rate declined. 2.5%

0.0% $20.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 *2016 *2017 *2018 *2019 CLASS A RENTAL RATES Class A Vacancy % Class A Rental Rates (Gross) Class A gross rental rates saw an increase of +$0.41/ SF from $39.87 in Q4 2015 to a current rate of $40.28/ SF. The two submarkets with Seattle Office Class A Absorption the largest quarterly changes were Pioneer Square which increased Seattle Class A Office Absorption Trends Net Absorption +$0.73 to a current rate of $36.02/ SF, and Denny Regrade which 2002-2019 (* Projected) experienced a quarterly Increase of +$0.65 to a current rate of 3,400,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 *2016 *2017 *2018 *2019 3,200,000

$33.53/ SF. All submarkets experienced an increase in rental rates 3,000,000 for the First Quarter of 2016. 2,800,000 2,600,000

2,400,000

2,200,000

NET ABSORPTION 2,000,000 1,950,000 1,888,918 1,888,918 The Seattle Class A market had a positive quarterly absorption 1,800,000 1,608,152 1,600,000 1,552,620 1,490,442 1,490,442 of 509,901 SF during the First Quarter of 2016. This sits on track 1,400,000 1,205,000 1,205,000 1,200,000 1,178,488 1,029,132 1,029,132

for the 1,950,000 SF projection for Class A 2016, and is in-line 994,359 1,000,000 969,059 Square Feet (SF) 800,712 800,712 with the Class A market trends, which experienced a positive 800,000 625,441 625,441 600,000 509,901

net absorption of 969,059 SF in 2015, a positive net absorption 376,601 400,000 273,337 273,337 129,859 129,859 of 1,029,132 SF for 2014 and has absorbed nearly 7 million SF 200,000 124,752 0 since 2010. (200,000)

(400,000) (119,506) (600,000)

(800,000) (644,971)

broderickgroup.com | pg. 5 Seattle Class A Office Vacancy by submarket SEATTLE OFFICE MARKET OVERVIEW Seattle Class A Office First Quarter 2016 Vacancy by submarket Lake SeattleUnion Denny Office Regrade ClassWaterfront A MarketSeattle CBD Pioneer Square Fremont/University Overall Class A Percentage Seattle Class A Year to Date Net Absorption by Submarket Class AAverag Q1 2016 Rentale Gross Rates (Gross) Rental Rates by Submarket Seattle Class A Year to Date Net Absorption by Submarket Lake Union Denny Regrade Waterfront Seattle CBD Pioneer Square Fremont/University Overall Class A Seattle Class A Year to Date NetPercentage AbsorptionLake by Union SubmarketDennyQ2 Regrade 2015 Waterfront Seattle3.4% CBD Pioneer Square7.8%Fremont/Univ Overall9.2% Class A 10.5% 3.5% 2.2% 8.2% Q3 2015 6.0% 8.0% 6.0% 9.8% 4.1% 2.2% 7.8% Seattle Office Class A Absorption Q2 2015 3.4%Q4 2015 7.8% 9.0% 9.2% 7.3% 10.5% 5.5% 3.5% 8.3% 2.2% 3.6% 8.2% 1.9% 7.6% Year-to-Date Absorption Trends by Submarket Q3 2015 6.0%Q1 2016 8.0% 9.7% 6.0% 7.1% 9.8% 3.3% $40.284.1% 6.4% 2.2% 3.8% 7.8% 1.6% 6.6% Q4 2015 9.0%Average 7.3% 7.0% 5.5% 7.5% 8.3% 6.0% 3.6% 8.8% 1.9% 3.8% 7.6% 2.0% 7.6% Fremont/Univ -2,309 1% Pioneer Square -11,694 -2% Q1 2016 9.7% 7.1% 3.3% 6.4% 3.8% 1.6% 6.6% Fremont/Univ -2,309 1% Average 7.0%$28.22 7.5% 6.0% 8.8% 3.8% 2.0% 7.6% Fremont/Univ 28,330 4% 3.4% Pioneer SquareLake- Union11,69454,554-2% 10% 6.0% Pioneer Square 24,935 4% Lake Union 9.0% 9.7% Lake Union 54,554 10% 3.4% $36.02 Lake Union -17,079 -2% 6.0% Lake Union 9.0% Denny Regrade 90,618 12% 9.7% 7.8% $40.66 8.0% Denny Regrade 7.3% Denny Regrade 115,038 21% Lake Union 7.8% 7.1% Denny Regrade 8.0% Denny Regrade $34.88 7.3% Lake Union 7.1% 9.2% Denny Regrade 115,038 21%Waterfront 90,944 12% Waterfront 6.0% Lake Union Waterfront 5.5% Denny Regrade 3.3% Seattle CBD Denny Regrade 9.2% Waterfront 160 0% Waterfront $33.53 6.0% PioneerWaterfront Square 5.5% Seattle CBD 354,152 66% Waterfront Seattle Class A Office 3.3% 10.5% Fremont/UnivSeattle CBD Seattle CBD 9.8% Waterfront 160 0% Seattle CBD Vacancy by submarket $38.14 8.3% Pioneer Square 6.4% 10.5% Pioneer Square 9.8% Seattle CBD 354,152 66% Seattle CBD 8.3% Lake UnionFremont/UnivDenny Regrade$25.00 $26.00Waterfront$27.00 $28.00 Seattle$29.00 CBD$30.00 $31.00Pioneer$32.00 Square $33.00Fremont/University$34.00 $35.00 Overall$36.00 Class$37.00 A $38.00 $39.00 3.5%$40.006.4%$41.00 $42.00 Percentage Fremont/Univ 4.1% Seattle CBD 489,508 66% Pioneer Square 3.6% Q2 2015 3.4% 7.8% 9.2% 10.5% 3.5% 2.2% 3.5% 8.2% 3.8% Q3 2015 6.0% 8.0% Pioneer6.0% Square 9.8% 4.1% 2.2% 7.8%4.1% Q4 2015 9.0% 7.3% 5.5% 8.3% 3.6% Seattle1.9% Office3.6% 7.6% Class A Market 9.7% 7.1% 3.3% 6.4% 3.8% 1.6% 3.8%6.6% 2.2% Q1 2016 2.2% Average 7.0% 7.5% 6.0% 8.8% Fremont/University3.8% Vacancy2.0% Percentage7.6%1.9% by Submarket 2.2% 1.6% Fremont/University3.4% 2.2% 6.0% 1.9% 550,000 Class A Net Absorption YTD Lake Union 1.6% 9.0% 8.2% 9.7% 7.8% Overall Class A 7.6% 500,000 7.8% 8.2% 6.6% Overall Class A, 8.0% 7.8% Denny Regrade Overall Class A 7.3% 450,000 7.1% 7.6% 550,000 Class 509,901A Net Absorption YTD 0.0% 2.0% 4.0% 6.6% 6.0% 8.0% 10.0% 12.0% 750,000 Class A Net Absorption YTD 400,000 9.2% 6.0% Q2 2015 Q3 2015 Q4 2015 Q1 2016 500,000 700,000 Waterfront 0.0% 5.5% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 3.3% 350,000 Overall Class A, 650,000 Overall Class A, 450,000 Q2 2015 10.5%Q3 2015 Q4 2015 Q1 2016 509,901 707,256 9.8% 300,000 600,000 Seattle CBD 8.3% 400,000 6.4% 250,000 550,000 3.5% 350,000 500,000 Pioneer Square 4.1% 200,000 3.6% 3.8% 450,000 Note: 300,000 150,000 2.2% 400,000 Overall Class A Net 2.2% Fremont/University 1.9% 250,000 Absorption includes 1.6% 100,000 350,000 absorption for First Hill / 8.2% 200,000 50,000 300,000 7.8% Capital Hill submarket. Overall Class A 7.6% 250,000 6.6% 150,000 0 200,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

100,000 150,000 Q2 2015 Q3 2015 Q4 2015 Q1 2016 broderickgroup.com | pg. 100,000 6 50,000 50,000 0 0 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016

Seattle Office Class A Statistics Submarket Statistics

Seatte Cass A Suaret Statistis Total RSF Vacancy Rate Vacancy Rate Rental Rates Rental Rates Absorption Asorption Submarket Vacancy Rate Rental Rates Inventory Quarterly Change YTD Change Quarterly Change YTD Change (QTR) (YTD) CBD 18,844,936 6.43% -1.90%Seatte Cass-1.90% A Suaret$40.66 Statistis $0.59 $0.59 354,152 354,152 Denny Regrade 4,188,966Total RSF 7.05% Vacancy-0.22% Rate Vacancy-0.22% Rate $33.53 Rental$0.65 Rates Rental$0.65 Rates Absorption115,038 Asorption115,038 Submarket Vacancy Rate Rental Rates Lake Union 6,559,696Inventory 9.74% Quarterly0.79% Change YTD0.79% Change $38.14 Quarterly$0.34 Change YTD$0.34 Change 54,554(QTR) 54,554(YTD) CBD 18,844,936 6.43% -1.90% -1.90% $40.66 $0.59 $0.59 354,152 354,152 Fremont 1,384,868 1.61% -0.30% -0.30% $28.22 $0.45 $0.45 -2,309 -2,309 Denny Regrade 4,188,966 7.05% -0.22% -0.22% $33.53 $0.65 $0.65 115,038 115,038 Pioneer Square 1,521,367 3.84% 0.27% 0.27% $36.02 $0.73 $0.73 -11,694 -11,694 Lake Union 6,559,696 9.74% 0.79% 0.79% $38.14 $0.34 $0.34 54,554 54,554 Waterfront 2,003,071 3.34% -2.20% -2.20% $34.88 $0.48 $0.48 160 160 Fremont 1,384,868 1.61% -0.30% -0.30% $28.22 $0.45 $0.45 -2,309 -2,309

Pioneer Square 1,521,367 3.84% 0.27%Seatte Etire0.27% Suaret$36.02 Statistis $0.73 $0.73 -11,694 -11,694 Waterfront 2,003,071 3.34% -2.20% -2.20% $34.88 $0.48 $0.48 160 160 Total RSF Vacancy Rate Vacancy Rate Rental Rates Rental Rates Absorption Asorption Submarket Vacancy Rate Rental Rates Inventory Quarterly Change YTD Change Quarterly Change YTD Change (QTR) (YTD) CBD 25,022,510 7.35% -1.40%Seatte Etire-1.40% Suaret$39.28 Statistis $0.17 $0.17 325,079 325,079 Denny Regrade 6,361,521Total RSF 7.69% Vacancy0.27% Rate Vacancy0.27% Rate $32.15 Rental$0.33 Rates Rental$0.33 Rates Absorption88,778 Asorption88,778 Submarket Vacancy Rate Rental Rates Lake Union 8,443,844Inventory 8.30% Quarterly0.83% Change YTD0.83% Change $33.07 Quarterly$0.97 Change YTD$0.97 Change 49,267(QTR) 49,267(YTD) CBD 25,022,510 7.35% -1.40% -1.40% $39.28 $0.17 $0.17 325,079 325,079 Fremont 1,670,040 2.00% -0.39% -0.39% $29.52 $1.64 $1.64 -8,384 -8,384 Denny Regrade 6,361,521 7.69% 0.27% 0.27% $32.15 $0.33 $0.33 88,778 88,778 Pioneer Square 4,976,427 6.26% 1.14% 1.14% $31.70 $0.28 $0.28 22,551 22,551 Lake Union 8,443,844 8.30% 0.83% 0.83% $33.07 $0.97 $0.97 49,267 49,267 Waterfront 5,137,750 4.82% -0.81% -0.81% $31.86 $0.69 $0.69 56,328 56,328 Fremont 1,670,040 2.00% -0.39% -0.39% $29.52 $1.64 $1.64 -8,384 -8,384 Pioneer Square 4,976,427 6.26% 1.14% 1.14% $31.70 $0.28 $0.28 22,551 22,551 Waterfront 5,137,750 4.82% -0.81% -0.81% $31.86 $0.69 $0.69 56,328 56,328

broderickgroup.com | pg. 7 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Investment Sales Update Q1 2016Q1 2015 - Q1 2016 INVESTMENT SALES UPDATE Quarter Building Submarket Bldg Size (SF) Buyer Price ($) / SF 901 Fifth - On Market On Market On Market 901 Fifth CBD 540,589 --- On Market Bay Vista Waterfront 119,701 --- Under Contract Under Contract Safeco Plaza CBD 815,653 --- Under Contract Broadacres Building CBD 123,109 --- Under Contract 1411 Fourth CBD 118,000 --- Q1 2016 Q1 2016 West 8th Lake Union 497,798 RREEF - Deutscge Asset & Wealth Mgmt $743.27/SF Q1 2016 Alley24 Lake Union 182,000 MetLife $600.74/SF Safeco Plaza - Under Contract Q1 2016 101 Elliott Ave W Waterfront 102,777 Credit Suisse Group $393.08/SF Q4 2015 Q4 2015 Amazon Phase 6 Lake Union 394,578 Union Investment Real Estate $756.96/SF Q4 2015 Dexter Horton CBD 336,500 Great Eagle Holdings Ltd. $369.87/SF Q4 2015 400 Fairview Lake Union 336,000 TIAA-CREF $763.00/SF Q4 2015 CBD 169,883 Gaw Capital $291.38/SF Q4 2015 1101 Westlake Lake Union 150,000 Invesco $449.33/SF Q4 2015 Pioneer Building Pioneer Square 72,000 Level Office $285.00/SF Q4 2015 Olympic Block Pioneer Square 70,500 Brickman Olympic LLC $316.54/SF Q4 2015 701 Dexter Avenue North Lake Union 62,000 Unico $287.67/SF Q4 2015 110 Cherry Street Pioneer Square 24,406 Good Arts LLC $192.58/SF Q3 2015 1411 Fourth - Under Contract Q3 2015 Columbia Center CBD 1,680,937 Gaw Capital $417.98/SF Q3 2015 2201 Westlake Denny Regrade 317,102 American Realty Advisors $791.54/SF Q2 2015 Q2 2015 111 South Jackson St Pioneer Square 78,564 RREEF America $433/SF Q1 2015 Q1 2015 Amgen Campus Queen Anne 750,000 Expedia $305/SF Q1 2015 Met Park East CBD 363,725 CBRE Global Investors $383/SF Q1 2015 2601 Elliott Waterfront 339,799 JP Morgan Chase $512/SF Q1 2015 Met Park West CBD 336,041 CBRE Global Investors $398/SF Q1 2015 Blanchard Plaza Denny Regrade 255,818 AFL-CIO Building Investment Trust $479/SF Q1 2015 1300 Dexter Building Lake Union 79,877 PEMCO Mutual Insurance Company $395/SF

broderickgroup.com | pg. 8 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Seattle New Developments New OfficeCurrent Development UnderProjects (Under Construction Construction) Developments in Seattle Scheduled Completion Project Name Submarket Square Footage Developer % Leased Date

Troy Block Phase I South Lake Union 395,000 Touchstone Q2 2016 100% NEW CONSTRUCTION Urban Union South Lake Union 291,000 Schnitzer West Q2 2016 100%

NorthEdge Lake Union 214,000 Touchstone Q3 2016 100% The only building completed in the First Quarter of 200 Occidental Pioneer Square 173,000 Urban Visions Q3 2016 100% 2016 was the Fairview Research Center (140,000 SF), which is fully leased. Third & Battery Belltown 68,429 Martin Selig Q3 2016 83% 4545 Roosevelt U District 54,676 Sellen Construction Q3 2016 0%

Currently under construction with a Q2 2016 deliv- Midtown 21 (1007 Stewart) Denny Regrade 365,000 Trammell Crow Q4 2016 0% ery date is Schnitzer West’s Urban Union (291,000 Holland America Building Queen Anne 183,779 Martin Selig Q4 2016 100% SF) and Touchstone’s Troy Block Phase I (395,000 SF). 2701 Eastlake Lake Union 44,300 2701 L.L.C. Q4 2016 0%

503 Westlake South Lake Union 38,640 S.E. Grainger Development Group Q4 2016 0%

In the second half of 2016, Touchstone’s NorthEdge 400 Dexter (Alexandia Center) South Lake Union 288,850 Alexandria Real Estate Equities Q1 2017 64%

(214,000 SF), Urban Vision’s 200 Occidental (173,000 Madison Centre CBD 750,000 Schnitzer West Q2 2017 0% Daniels Development, SF), Martin Selig’s Third & Battery (68,429 SF), Tram- The Mark CBD 528,000 Q2 2017 0% Stockbridge Capital mell Crow’s Midtown 21 (365,000 SF), and Martin Tilt49 Denny Regrade 307,296 Touchstone Q2 2017 0%

Selig’s Holland America Building (183,779 SF) are Troy Block Phase II South Lake Union 422,000 Touchstone Q3 2017 100% slated to deliver. 15th & Market Ballard 202,000 Martin Selig Q3 2017 40%

450 Alaskan Pioneer Square 166,803 Hudson Pacific Q3 2017 55%

Hawk Tower Pioneer Square 199,870 AmericanLife Q4 2017 0%

Fremont Office Building Lake Union 125,000 First Western Development Services Q4 2017 100%

TOTALS 4,817,643 46%

Troy Block Urban Union North Edge 200 Occidental Midtown 21 Madison Centre The Mark Tilt49

broderickgroup.com | pg. 9 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Appendix Detailed Charts & Graphs

Seattle Office Class A Market Vacancy Percentage and Average Gross Rental Rates (* Projected) Class A Vacancy Vs Rates

22.5%

$45.28 19.9% $45.00 20.0% $43.54 $42.52 18.1% $41.86 17.5% $40.28 $39.87 $40.00

$37.91 14.5% 15.0% 14.1% $37.31 13.1% 13.3%

12.5% Rental Rate ($) $34.95 12.5% 11.6% $35.00 $33.62 11.2% 10.8% 10.5% 10.5% 9.7% 10.0% $31.41 $31.80 $31.38 $31.20 9.2% $30.27 $29.41

Vacancy (%) Vacancy 7.9% 7.5% 7.6% $30.00 7.5% 7.1% $27.80 6.5% $26.57 $26.13 5.0% $25.00

2.5%

0.0% $20.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 *2016 *2017 *2018 *2019 Year Class A Vacancy % Class A Rental Rates (Gross)

broderickgroup.com | pg. 10 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Appendix Detailed Charts & Graphs

Seattle Office Class A Absorption Absorption Trends Seattle Class A Office Net Absorption (* Projected) 2002-2019

3,400,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 *2016 *2017 *2018 *2019 3,200,000

3,000,000

2,800,000

2,600,000

2,400,000

2,200,000

2,000,000 1,950,000 1,888,918 1,888,918 1,800,000 1,608,152 1,600,000 1,552,620 1,490,442 1,490,442

1,400,000 1,205,000 1,205,000 1,200,000 1,178,488 1,029,132 1,029,132 994,359 994,359 1,000,000 969,059 800,712 800,712 800,000 625,441 625,441 Square Feet (SF) 600,000 509,901

400,000 376,601 273,337 273,337 129,859 129,859 200,000 124,752

0

(200,000)

(400,000) (119,506) (600,000)

(800,000) (644,971)

broderickgroup.com | pg. 11 Seattle Class A Office Vacancy by submarket SEATTLE OFFICE MARKET OVERVIEW Lake UnionFirst QuarterDenny 2016Regrade Waterfront Seattle CBD Pioneer Square Fremont/UniversityAppendixOverall Class A Percentage Detailed Charts & Graphs

Q2 2015 3.4% 7.8% 9.2% 10.5% 3.5% 2.2% 8.2% Q3 2015 6.0% 8.0% 6.0% 9.8% 4.1% 2.2% 7.8% Q4 2015 9.0% 7.3% 5.5% 8.3% 3.6%Seattle Office1.9% Class A Market7.6% 9.7% 7.1% 3.3% 6.4% 3.8% 1.6% 6.6% Q1 2016 Vacancy Percentage by Submarket Average 7.0% 7.5% 6.0% 8.8% 3.8% 2.0% 7.6%

3.4% 6.0% Lake Union 9.0% 9.7%

7.8% 8.0% Denny Regrade 7.3% 7.1%

9.2% 6.0% Waterfront 5.5% 3.3%

10.5% 9.8% Seattle CBD 8.3% 6.4%

3.5% 4.1% Pioneer Square 3.6% 3.8%

2.2% 2.2% Fremont/University 1.9% 1.6%

8.2% 7.8% Overall Class A 7.6% 6.6%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Q2 2015 Q3 2015 Q4 2015 Q1 2016

broderickgroup.com | pg. 12 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Appendix Detailed Charts & Graphs

Seattle Office Class A Market Average Gross Rental Rates by Submarket

Class A Q1 2016 Rental Rates (Gross)

Lake Union Denny Regrade Waterfront Seattle CBD Pioneer Square Fremont/Univ Overall Class A

$40.28

$28.22

$36.02

$40.66

$34.88

$33.53

$38.14

$25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 $32.00 $33.00 $34.00 $35.00 $36.00 $37.00 $38.00 $39.00 $40.00 $41.00 $42.00

broderickgroup.com | pg. 13 Seattle Class A Year to Date Net Absorption by Submarket

Fremont/Univ -2,309 1% Pioneer Square -11,694 -2%

Lake Union 54,554 10%

Denny Regrade 115,038 21% Lake Union Denny Regrade Waterfront Seattle CBD Waterfront 160 0% Pioneer Square Seattle CBD 354,152 66% Fremont/Univ SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016 Appendix Detailed Charts & Graphs Seattle Class A Year to Date Net Absorption by Submarket

Seattle Office Class A Absorption Year-to-Date Absorption Trends by Submarket

Fremont/Univ -2,309 1% Pioneer Square -11,694 -2% 550,000 Class A Net Absorption YTD

Lake Union 54,554 10%500,000 Overall Class A, 450,000 509,901

400,000

Denny Regrade350,000115,038 21% Lake Union

300,000 Denny Regrade Waterfront 250,000 Seattle CBD Waterfront200,000 160 0% Pioneer Square Seattle CBD 354,152 66% 150,000 Fremont/Univ

100,000

50,000

0

broderickgroup.com | pg. 14

550,000 Class A Net Absorption YTD

500,000 Overall Class A, 450,000 509,901

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0 SEATTLE OFFICE MARKET OVERVIEW First Quarter 2016

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