Quarterly Market Report

Northern Virginia Quarterly Market Report

2nd Quarter 2020

lpcwashingtondc.com Northern Virginia Leasing & Market Research

Neil Alt Senior Vice President [email protected] | 703.284.5868

Doug McLearn Senior Vice President [email protected] | 703.284.5862

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

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

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

Jae Lee Market Spotlight, 2Q 2020: Senior Vice President [email protected] | 202.513.6700 Northern Virginia...... 10

Alexandria...... 12 Stoddie Nibley Senior Vice President Fairfax...... 14 [email protected] | 703.284.5884 Loudoun County...... 16 Correll Caulfield Merrifield...... 18 Vice President [email protected] | 703.284.5886 National Landing...... 20 Jed Prossner Old Town Alexandria/Eisenhower Avenue...... 22 Vice President Reston - Herndon...... 24 [email protected] | 703.284.5864

Rosslyn - Ballston Corridor...... 26 Jack Redmond Senior Associate Route 28 North...... 28 [email protected] | 703.284.5880 Route 28 South...... 30 Brenda Sosa Springfield...... 32 Leasing Associate [email protected] | 703.284.5881 Tysons Corner...... 34 13 Ben Hickey Leasing Associate [email protected] | 703.284.3364

Sarah Rossero Market Research Associate [email protected] | 703.284.3354

Jacqueline Spross Market Research Associate [email protected] | 703.284.3635

2 Metropolitan D.C. Market Overview 2nd Quarter 2020

Overall Market Summary

The Washington, DC Metropolitan commercial real estate market is comprised of approximately 429.6 million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. this quarter; while five buildings, totaling 928,957 square feet, delivered. The largest addition was The total vacancy rate ticked up to 14.0% at the end 1750 Presidents Street - 17Fifty delivering 276,000 of the second quarter, while the market recorded square feet (100% leased to LEIDOS) to the Reston 364,843 square feet of net absorption. Northern submarket in VA. Virginia and Suburban Maryland both posted positive net absorption for the quarter with a There were six sale transactions in the second combined 396,089 square feet absorbed. quarter, totaling $328.75 million. The largest sale was 1530 Wilson Boulevard trading for $71,400,000 ($427 Leasing activity for the quarter totaled 3,447,954 psf) in the RB Corridor of VA. square feet. The largest lease executed was a 396,740-square-foot relet by Microsoft at 11955 Average asking rental rates increased $0.34 to $39.50 Freedom Drive - Two Freedom Square @ RTC, in per square foot, Full Service. Northern Virginia. From May 2019-May 2020 the DC Metropolitan At the end of the quarter, there was 6,876,206 Statistical Area (MSA) lost 67,200 jobs, representing square feet under construction, with 69% of the a contraction of 8.5%% YOY, while the unemployment space pre-leased. No buildings broke ground rate increased to 9.0%.

Metro DC VA MD Area (YTD)

Direct Vacancy 12.0% 13.8% 13.1% 13.0% (2Q 2020)

Total Vacancy 13.2% 14.5% 14.0% 14.0% (2Q 2020)

Total Net Absorption -474,256 -792 -352,443 -121,021 (YTD 2020) SF

Leasing Activity 3,452,820 3,396,769 1,441,094 8.3 M SF (YTD 2020)

Market Outlook / COVID-19

Market fundamentals for the Metropolitan The impact of the COVID-19 pandemic on Washington, DC office market continued to soften our daily lives, and commercial real estate, is in the second quarter 2020 due to the COVID-19 extremely fluid. The DC region is currently in pandemic. Even though close to 365,000 square Phase 2 of re-opening, including the re-opening feet was absorbed in the second quarter, total of non-essential retail and the voluntary return vacancy ticked up to 14.0% for the metro area for office workers. While office buildings have re- (absorption is still negative for the region YTD opened, the vast majority of DC area employees, 2020). Despite the pandemic, leasing activity was including the government, continue to telework only down 29% quarter-over-quarter, as velocity (less than 20% have returned to the office). was driven by an increase of sizable tenant Upticks in vacancy and decreased net absorption renewals across the metro. Investment sales, as are expected for the next two quarters, as tenants expected, were few, as most negotiations have and the CRE industry continue to whether the stalled. A very limited amount of new buildings, if pandemic. The DC area has seemed to ‘flatten any, are expected to come to market near term. the curve” while most of the South and West of The region lost 67,200 jobs YOY ending May 2020 the country have seen a recent spike in cases and with the Leisure & Hospitality sector suffering the have re-imposed some business closures. While majority of these losses (49,600 jobs). The current industry experts remain hopeful that the economy unemployment rate increased to 9.0% in the DC will improve by late 2020 or early 2021, locally, Metro, but it is still lower than the 11.1% nationalSublease Added 2Q the2020 next (SF) few weeks will decide if the DC area is average. Incredibly, the Washington, DCSan MSAFrancisco ready1,400,000 to move into Phase 3, plateau on Phase 2, ranks 4th nationally in unemployment (in MSAs or possibly regress due to an influx in COVID-19 New York 1,300,000 over 1 million in population). cases. Boston 1,200,000

Los Angeles 905,000 The COVID-19 pandemic Atlantahas caused a substantial increase800,000 of sublease space available on the market nationally. ChicagoThe DC Metro area added 334,000425,000 square feet of available sublease space to the marketDC Metro in the second quarter 2020.334,000 However, DC has added the least amount of available sublease space compared to other major markets (see chart below).

Sublease Space Added 2Q 2020 (SF)

DC Metro 334,000

Chicago 425,000

Atlanta 800,000

Los Angeles 905,000

Boston 1,200,000

New York 1,300,000

San Francisco 1,400,000

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

Market Summary

The Northern Virginia office market consists of 2Q 2020 1Q 2020 2Q 2019 1,532 buildings over 25,000 square feet, totaling approximately 188.2 million square feet of rentable space. Direct 13.8% 13.3% 13.5% The largest non-GSA lease signed during the Vacancy second quarter was a 396,740-square-foot relet by Microsoft Corporation at Two Freedom Square Total - 11955 Freedom Drive. This requirement represents 14.5% 14.0% 14.1% primarily new growth to the market for Microsoft. Vacancy

The largest lease signed by the GSA was a Net 61,256-square-foot renewal at Crystal Park Five - Absorption -352,443 SF -712,680 SF 1.1 M SF 2451 Crystal Drive. (YTD) Building sales volume totaled $175,750,000 during the second quarter 2020. The largest transaction Leasing was the sale of 1530 Wilson in the Rosslyn- Activity 3.4 M SF 1.9 M SF 6.0 M SF Ballston Corridor submarket. Velocis acquired the (YTD) building from Invesco for $71,400,000 ($416.64 psf). The asset was 71.0% occupied at the time of Under 2.8 M SF 3.5 M SF 3.2 M SF sale. The second largest sale was John Marshall Construction II - 8283 Greensboro Drive in the Tysons Corner submarket. The Meridian Group acquired the building from Washington Real Estate Investment Deliveries 1.1 M SF 298,460 SF 484,171 SF Trust for $57,000,000 ($255.62 psf). The building (YTD) was 100.0% occupied at the time of sale. The third largest sale was Center for Innovative Technology - 2214 Rock Hill Road in the Reston-Herndon submarket. Origami acquired the building from VA Rental Rates $33.03 PSF $33.04 PSF $33.11 Department of General Services for $47,350,000 ($316.90 psf). The building was 100.0% occupied at the time of sale. U/C Percent 76.2% 78.8% 71.1% Pre-Leased Inside the Beltway, there were 44 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first and second quarter 2020. Outside the Beltway, there were 81 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the second quarter 2020 compared to 75 from the first quarter 2020.

Vacancy Rate Deliveries vs. Under Construction Total vacancy in Northern Virginia increased from 14.0% in the first quarter 2020 to 14.5% in the second quarter 5 2020, and has increased from 14.1% since second quarter 2019. At the end of the second quarter 2020, 4 27.3 million square feet was vacant and available.

3 Direct vacancy has increased from 13.3% in the first quarter 2020 to 13.8% in the second quarter 2020, and SF (Millions) 2 has increased from 13.5% since second quarter 2019. 26.1 million square feet was vacant and available for direct lease. 1

0 The sublet vacancy rate in Northern Virginia has '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 decreased from 0.7% from the first quarter 2020 to 0.6% in the second quarter 2020, and has decreased Deliveries Under Construction slightly from 0.7% since second quarter 2019. At the end of the second quarter 2020, 1.2 million square feet was vacant and available for sublease. Deliveries | Net Absorption | Vacancy Rate Total vacancy for Class A product in Northern Virginia was 16.0% while Class B product was 12.2% for the quarter. Class A vacancy increased from 15.7% in the 3.0 20 first quarter 2020, and Class B vacancy increased from 2.5 18 11.3% in the first quarter 2020. 2.0 16

1.5 14 (%) Rate Vacancy Absorption & Gross Leasing 1.0 12 Northern Virginia recorded 360,237 square feet of net 0.5 10

SF (Millions) absorption in the second quarter of 2020, bringing 0.0 8

the year-to-date absorption to -352,443 square feet. -0.5 6

A significant contributor to the positive absorption -1.0 4

was a 276,000-square-foot move-in By Leidos at -1.5 2 17Fifty - 1750 Presidents Street in the Reston-Herndon -2.0 0 submarket and a 160,000-square-foot move-in by '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 General Dynamics at General Dynamics HQ - 11011 Delivery Net Absorption Direct Vacancy Rate Sunset Hills Road, also located in the Reston-Herndon submarket.

Leasing activity at the end of the second quarter 2020 Vacancy by Building Class totaled 1,495,345 square feet, bringing the year-to- date activity to 3,396,769 square feet. Eight of the

top ten leases signed in the second quarter were by 150 20 private sector tenants. 16.0%

120 Class VacantBuilding of (%) The ten largest leases signed during the second quarter 15 ranged in size from 396,740 square feet to 39,356 12.2% square feet, and six of these largest transactions were 90 renewals. 10 SF (Millions) 60

Two of the submarkets that contributed to this quarter's 5 positive absorption were the Reston-Herndon and 30 2.8% Old Town/Eisenhower Ave submarkets. Old Town/ Eisenhower Ave had a total of 122,160 square feet 0 0 A B C of move-ins and Reston-Herndon recorded 488,187 A B C square-feet of move-ins, having the strongest absorption of the quarter. 101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.6700 lpcwashingtondc.com 6 4300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.4600 8120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300 Northern Virginia 2nd Quarter 2020 Construction Outlook A total of nine buildings were under construction A majority of the leasing activity for the second in Northern Virginia at the end of the second quarter 2020 were private sector tenants, who quarter, totaling approximately 2.8 million square signed eight of the ten top leases. However, the GSA feet and 77.2% pre-leased. signed the sixth and seventh top lease this quarter in Northern Virginia. Four buildings delivered this quarter, Penrose II - 14401 Penrose Place (125,000 sf) in the Route 28 COVID-19 is still significantly impacting our national South submarket, 17Fifty - 1750 Presidents Street and local economies. At the end of June, Northern (276,000 sf) in the Reston-Herndon submarket, Virginia was just starting to enter Phase 2 of Reston Station - Ph. II - 1906 Reston Metro Plaza reopening. This meant that non-essential businesses (212,957 sf) in the Reston-Herndon submarket, and could open at 50% capacity with social distancing. General Dynamics HQ - 11011 Sunset Hills Road However, working from home has still been strongly (160,000 sf) also located in the Reston-Herndon encouraged. With hospitality and retail being hit submarket. the hardest by the pandemic, the coworking office sector also faces a lot of new challenges. Private and Other buildings set to deliver in 2020 include, TSA consolidated work spaces will be in higher demand HQ - 6595 Springfield Center Drive (634,000 sf), than open communal settings going forward. Loft Office at Market Common - 1440 Edgewood Street (158,994 sf), One Endicott - 44697 Endicott Across Northern Virginia there has been a slight Drive (54,000 sf), Building T at One Loudoun - uptick in vacancy rates, and a decline in leasing Brimfield Drive (40,000 sf). activity and absorption. Building sales have also stalled significantly. There were a total of three Buildings scheduled to deliver in 2021 include, building sales over $10,000,000 this quarter Tysons Central - 1750 Tysons Central Street in Northern Virginia, as a result of the ongoing (383,628 sf), APTA Centennial Center - 3030 pandemic. Despite some setbacks in the market, Potomac Avenue (104,453 sf), and Reston Station experts remain hopeful that the market will improve - Phase III - 1902 Reston Metro Plaza (221,000 sf). by late 2020 or early 2021. However, until businesses Lastly, Office Bldg A - Sunset Hills Road @ Town complete their re-entry back into the market, there Center Boulevard (800,000 sf) is expected to is too much uncertainty to accurately determine the deliver in 2022, as well as The Institute for Defense market's timing for recovery. Analyses - 701 E. Glebe Road (370,000 sf). The Northern Virginia region lost 133,400 jobs from Amazon's HQ2, Metropolitan Park - 1450 South May 2019 - May 2020, representing 8.8% decline Eads Street, located in the National Landing YOY. The Information sector had the most significant submarket plans to break ground by third quarter increase with 13,000 new jobs, while the Leisure 2020 and is expected to be completed by 2023. The and Hospitality sector lost 64,500 jobs. Also, the project consists of two 22-story towers totaling 2.1 Government sector lost 7,400 jobs. As of May million square-feet. The Virginia Tech Innovation 2020, the unemployment rate for Northern Virginia Campus in the National Landing submarket will increased from the previous year to 6.3%. The begin construction in 2021. The University plans to national unemployment rate increased to 11.1%. open by third quarter 2024.

Top Ten Leases Included in the top ten leases of the second quarter 2020 were six renewals and four relets. The largest lease transaction of the quarter was a 396,740-square-foot relet signed by Microsoft Corporation at Two Freedom Square @ Reston Town Center - 11955 Freedom Drive in the Reston-Herndon submarket. The second largest lease of the quarter was a 215,806-square-foot relet by The City of Alexandria at 4850 Mark Center Drive in the Alexandria submarket. The third largest lease of the quarter was a 162,357-square-foot relet signed by Walmart Labs at 2245 @ Herndon Metro - 2245 Monroe Street in the Reston-Herndon submarket. The fourth largest lease of the quarter was a 158,919-square-foot renewal was signed by Science Applications International Corporation (SAIC) at Liberty Center 2 - 14672 Lee Road in the Route 28 South submarket. The fifth largest lease of the quarter was a 135,000-square-foot relet signed by CACI at Two Reston Overlook - 12021 Sunset Hills Road in the Reston-Herndon submarket. A 61,563-square-foot renewal was signed by the Fairfax County Board of Supervisors at Kelly Square - 10777 Main Steet in the Fairfax submarket. The GSA signed a renewal for 61,256 square feet at Crystal Park Five - 2451 Crystal Drive in the National Landing submarket, as well as a 56,475-square-foot renewal by GSA - Department of Homeland Security at Jefferson Plaza - 1401 S. Clark Street in the National Landing submarket. Ligado Networks signed a renewal for 54,104 square feet at Parkridge Center I - 10800-10802 Parkridge Blvd in the Reston-Herndon submarket. Lastly, Accenture Federal Services, Inc. signed a renewal for 39,356 square feet at Kingstowne Bldg K - 5911 Kingstowne Village Parkway in the Springfield submarket.

Two Freedom 11955 Freedom Drive Square @ RTC 4850 Mark Center Drive

Tenant Microsoft Corporation Tenant City of Alexandria Size 215,806 SF Size 396,740 SF Type Relet Type Relet

2245 @ Herndon 2245 Monroe Street Liberty Center 2 14672 Lee Road Metro Tenant SAIC Tenant Walmart Labs Size 158,919 SF Size 162,357 SF Type Renewal Type Relet

12021 Sunset Hills Two Reston Overlook Kelly Square 10777 Main Street Road Fairfax County Board Tenant CACI Tenant of Supervisors Size 135,000 SF Size 61,563 SF Type Relet Type Renewal

Crystal Park Five 2451 Crystal Drive Jefferson Plaza 1401 S. Clark Street

Tenant GSA GSA - Department of Tenant Homeland Security Size 61,256 SF Size 56,475 SF Type Renewal Type Renewal

10800-10802 5911 Kingstowne Parkridge Center I Kingstowne Bldg K Parkridge Boulevard Village Parkway Tenant Ligado Networks Accenture Federal Tenant Services, LLC Size 54,104 SF Size 39,356 SF Type Renewal Type Renewal

Northern Virginia Sales Transactions

1530 Wilson Boulevard 8283 Greensboro Center For John Marshall II 2214 Rock Hill Drive Innovative Rosslyn-Ballston Road Submarket Technology Corridor Submarket Tysons Corner Date Sold April-2020 Submarket Reston-Herndon Date Sold April-2020 $71,400,000 Date Sold May-2020 Price $57,000,000 ($416.64 psf) Price ($255.62 psf) $47,350,000 Buyer Velocis Price The Meridian ($316.90 psf) Buyer Group Seller Invesco Buyer Origami RBA 171,373 SF Washington Real VA Department of Seller Estate Investment Seller Class A Trust General Services Occupancy 71.0% RBA 222,989 SF RBA 149,415 SF Cap Rate 6.25% Class A Class A Occupancy 100.0% Occupancy 100.0%

Northern Virginia 2nd Quarter 2020

5 20 42 16

14 4 35 16 12

28 ($) Rate Asking 3 12 8

21 6 Vacancy Rate (%) Vacancy SF (Millions) SF (Millions) 2 8 4 14 2

0 1 4 7 -2

-4 0 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Deliveries Under Construction Highlights Total vacancy in Northern Virginia increased from 10 Year Averages (2010 - 2019) 14.0% in the first quarter 2020 to 14.5% in the second quarter 2020, and has increased from 14.1% since Total Absorption 1.0 M SF / Year second quarter 2019. Direct vacancy has increased from 13.3% in the first quarter 2020 to 13.8% in the Deliveries (SF) 1.7 M SF / Year second quarter 2020, and has increased from 13.5% since second quarter 2019. Leasing Activity 13.6 M SF / Year Northern Virginia recorded 360,237 square feet of net absorption in the second quarter of 2020, bringing the year-to-date absorption to -352,443 Market Stats square feet. A significant contributor to the positive absorption for the quarter was a 276,000-square- Inventory 188.2 M SF foot move-in By Leidos at 17Fifty - 1750 Presidents Street in the Reston-Herndon submarket and Direct Vacancy 13.8% a 160,000-square-foot move-in by General Dynamics at General Dynamics HQ - 11011 Sunset Total Vacancy 14.5% Hills Road, also located in the Reston-Herndon submarket. YTD 2020 Absorption -352,443 SF

Leasing activity at the end of the second quarter YTD Leasing Activity 3.4 M SF 2020 totaled 1,495,345 square feet, bringing the year-to-date activity to 3,396,769 square feet. Eight Under Construction 2.8 M SF of the top ten leases signed in the second quarter 2020 were by private sector tenants. Percent Pre-Leased 76.2%

Inside the Beltway, there were 44 buildings YTD 2020 Deliveries 1.1 M SF marketing 50,000 square feet or greater of contiguous space available at the end of the first 2010: 2019: YTD 2020: and second quarter 2020. Outside the Beltway, Asking Rental Rates $30.22 $32.81 $33.03 there were 81 buildings marketing 50,000 square (Full Service) feet or greater of contiguous space available at the PSF PSF PSF end of the second quarter 2020 compared to 75 from the first quarter 2020.

Under Construction

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

Building T-One Loudoun - Retail Properties of Route 7 Corridor 40,000 SF 30,000 SF 25.0% 3Q 2020 Undisclosed Brimfield Drive America

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

Rosslyn-Ballston LOMC - 1440 Edgewood Street 158,994 SF 158,994 SF 17.3% 3Q 2020 Regency Centers None Corridor

One Endicott - 44697 Endicott Retail Properties of Route 7 Corridor 54,000 SF 32,491 SF 39.8% 4Q 2020 Undisclosed Drive America

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

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

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

Institute for Defense Analyses - Institute for Crystal City 370,000 SF - 100.0% 1Q 2022 Undisclosed 701 E. Glebe Rd Defense Analyses

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

Totals

Broke Ground 2Q2020 0 SF

Total Under Construction 2,766,075 SF

% Preleased 77.2% (Does not include condos)

Alexandria 2nd Quarter 2020

0.8

25 35 1.5 0.7

0.6 20 28 1.0 0.5

Lorem ipsum ($) Rate Asking 15 21 0.4 0.5 SF (Millions) Vacancy Rate (%) Vacancy

0.3 SF (Millions) 10 14

0.2 0.0

0.1 5 7

0.0 -0.5 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in Alexandria decreased from 14.0% in the first quarter 2020 to 13.8% in the second quarter 2020, and has decreased from 14.3% since second quarter 2019. Total vacancy has decreased from 15.2% 10 Year Averages (2010 - 2019) in the first quarter 2020 to 14.3% the second quarter 2020, and has decreased from 14.8% since second Total Absorption 163,624 SF / Year quarter 2019. Deliveries (SF) 261,419 SF / Year The Alexandria submarket recorded 97,797 square feet of net absorption in the second quarter of 2020, Leasing Activity 802,466 SF / Year bringing the year-to-date absorption to 206,165 square feet. The positive absorption was driven by a 102,316-square-foot sublet at Crescent at Carlyle - Market Stats 1940 Duke Street. Inventory 18.5 M SF The second largest lease of the quarter in Northern Virginia and the largest lease signed in the Direct Vacancy 13.8% Alexandria submarket was a 215,806-square-foot relet by City of Alexandria at 4850 Mark Center Drive. Total Vacancy 14.3%

YTD 2020 Absorption 206,165 SF

YTD Leasing Activity 217,724 SF

Under Construction 0 SF

Percent Pre-Leased 0%

YTD 2020 Deliveries 58,460 SF

2010: 2019: YTD 2020: Asking Rental Rates $32.44 $34.13 $34.24 (Full Service) PSF PSF PSF

Alexandria 2nd Quarter 2020

Major Leases

4850 Mark Center Drive 115 South Union Street

Tenant City of Alexandria Tenant Oxford Finance

Size 215,806 SF Size 20,800

Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

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

Fairfax (Fairfax Center, Fairfax City, Oakton) 2nd Quarter 2020

0.20 24 30 1.5

20 25 0.16 1.0

16 20 ($) Rate Asking 0.12

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

-0.5 0.00 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 0 0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD '20 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights Direct vacancy in Fairfax has increased from 17.9% in the first quarter 2020 to 19.0% in the second quarter 10 Year Averages (2010 - 2019) 2020, and has increased from 17.9% since the second quarter 2019. Total vacancy has increased from 18.9% Total Absorption -25,306 SF / Year from the first quarter 2020 to 20.1% in the second quarter 2020, and has increased from 18.7% since Deliveries (SF) 26,250 SF / Year second quarter 2019. Leasing Activity 904,811 SF / Year The Fairfax submarket recorded -104,218 square feet of net absorption in the second quarter of 2020, bringing the year-to-date absorption to -197,177 Market Stats square feet. The negative absorption for the quarter was driven by a 89,076-square-foot move-out at Inventory 12.6 M SF Greenwood - 12015 Lee Jackson Memorial Highway.

19.0% The largest lease signed in the Fairfax submarket Direct Vacancy and one of the top leases in Northern Virginia was a 61,563-square-foot renewal by the Fairfax County Total Vacancy 20.1% Board of Supervisors at Kelly Square - 10777 Main Street. Another lease signed this quarter was a YTD 2020 Absorption -197,177 SF 25,000-square-foot renewal by Teoco at One Monument Place - 12150 Monument Drive. YTD Leasing Activity 148,577 SF

Under Construction 0 SF

Percent Pre-Leased 0.0%

YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $26.40 $26.88 $27.32 (Full Service) PSF PSF PSF

Fairfax (Fairfax Center, Fairfax City, Oakton) 2nd Quarter 2020

Major Leases

Kelly Square 10777 Main Street One Monument Place 12150 Monument Drive

Fairfax County Board of Tenant Tenant Teoco Supervisors Size 25,000 SF Size 61,563 SF Type Renewal Type Renewal

WillowWood Plaza 10306 Eaton Place Fair Lakes 7 12730 Fair Lakes Circle Bldg 2 Crescent Hotels and Tenant Tenant MAG Aerospace Resorts Size 12,500 SF Size 13,550 SF Type Expansion Type Relet

11781 Lee Jackson 3701 Pender Drive Oakwood Highway Customer Value Tenant Tenant WMC Global Partners Size 10,500 SF Size 11,305 SF Type Renewal Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

No new construction reported Fairfax N/A N/A N/A N/A N/A N/A this quarter

Loudoun County 2nd Quarter 2020

24 3.00 0.35 30

0.30 20 25 2.35

0.25

16 20 ($) Rate Asking 1.70 0.20 12 15 SF (Millions)

0.15 Rate (%) Vacancy SF (Millions) SF 1.05 8 10 0.10

0.40 0.05 4 5

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

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in Loudoun County remained flat at 7.7% from the first quarter 2020 to the second quarter 10 Year Averages (2010 - 2019) 2020, and has decreased from 9.5% since second quarter 2019. Total vacancy has remained flat at 7.9% Total Absorption 221,525 SF / Year from the first quarter 2020 to the second quarter 2020 and has decreased from 9.6% since second quarter Deliveries (SF) 178,791 SF / Year 2019. Leasing Activity 873,066 SF / Year Loudoun County recorded 67,881 square feet of net absorption in the second quarter 2020, bringing the year-to-date absorption to 321,727 square feet. A Market Stats significant contributor to the positive absorption this quarter was a 75,292-square-foot move in by Northrop Inventory 15.8 M SF Grumman at Lakeside at Loudoun Building 1 – 21351 Ridgetop Circle, which represented new growth for Direct Vacancy 7.7% Northrop Grumman in the Loudoun market. Total Vacancy 7.9% The largest lease signed in the Loudoun County submarket in the second quarter 2020 was a YTD 2020 Absorption 321,727 SF 27,306-square-foot renewal by CGI at Loudoun Gateway IV - 22980 Indian Creek Drive. The second YTD Leasing Activity 256,205 SF largest lease signed in the Loudoun County submarket this quarter was a 26,733-square-foot expansion by Under Construction 94,000 SF Northrop Grumman at Lakeside @ Loudoun Bldg I - 21351 Ridgetop Circle. Percent Pre-Leased 33.5%

Building T - One Loudoun - Brimfield Drive is currently YTD 2020 Deliveries 0 SF under construction. The 40,000-square-foot building is projected to deliver third quarter 2020. One Endicott 2010: 2019: YTD 2020: Asking Rental Rates - 44697 Endicott Drive is also under construction. The $25.46 $25.84 $ 26.11 (Full Service) 54,000-square-foot building is set to deliver fourth PSF PSF PSF quarter 2020 and is 39.8% pre-leased.

Loudoun County 2nd Quarter 2020

Major Leases

Lakeside @ Loudoun Loudoun Gateway IV 22980 Indian Creek Drive 21351 Ridgetop Circle Building 1 Tenant CGI Tenant Northrup Grumman

Size 27,306 SF Size 26,733 SF

Type Renewal Type Expansion

215 Depot Court SE

Tenant Leesburg Junction

Size 10,632 SF

Type Sublet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

Building T - One Loudoun Loudoun 40,000 SF 30,000 SF 25.0% 3Q 2020 Regency Centers Undisclosed Brimfield Drive

One Endicott - 44697 Retail Properties Loudoun 54,000 SF 32,491 SF 39.8% 4Q 2020 Undisclosed Endicott Drive of America

Merrifield 2nd Quarter 2020

2.0 0.08 18 40

0.07 16 35 1.5

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

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

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

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

Highlights 10 Year Averages (2010 - 2019)

Direct vacancy in Merrifield has increased from 11.6% Total Absorption 1,676 SF / Year in the first quarter 2020 to 12.4% in the second quarter 2020 and has increased from 11.8% since Deliveries (SF) 9,719 SF / Year second quarter 2019. Total vacancy has increased from 11.9% in the first quarter 2020 to 12.7% in the Leasing Activity 664,670 SF / Year second quarter 2020, and has increased from 12.5% since second quarter 2019. Market Stats The Merrifield submarket recorded 90,598 square feet of net absorption in the second quarter 2020, Inventory 9.6 M SF bringing the year-to-date absorption to 48,800. The positive absorption was driven by a 133,183-square- Direct Vacancy 12.4% foot move-in by BAE Systems at 2941 Fairview Park Drive. Total Vacancy 12.7%

The largest lease signed in the Merrifield submarket YTD 2020 Absorption 48,800 SF was a 14,217-square foot relet by Apex Systems, Inc. at 3190 Fairview Park Drive. Also contributing to YTD Leasing Activity 69,933 SF leasing activity this quarter was a 12,803-square- foot relet by KBR, Inc. at Prosperity Metro - 2677 Under Construction 0 SF Prosperity Avenue. Percent Pre-Leased 0%

YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $34.06 $31.30 $30.97 (Full Service) PSF PSF PSF

Merrifield 2nd Quarter 2020

Major Leases

3190 Fairview Park Drive Prosperity Metro 2677 Prosperity Avenue Tenant Apex Systems, Inc. Tenant KBR, Inc.

Size 14,217 SF Size 12,803 SF

Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

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

National Landing (Crystal City & Pentagon City) 2nd Quarter 2020

700 32 48 2.0

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

16 24

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

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

Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Deliveries Under Construction Highlights Direct vacancy in National Landing increased from 12.1% in the first quarter 2020 to 14.1% in the second quarter 2020, and has increased from 11.8% since second quarter 2019. Total vacancy has increased from 12.5% the first 10 Year Averages (2010- 2019) quarter 2020 to 14.5% in the second quarter 2020, and has increased from 12.1% since second quarter 2019. Total Absorption 50,037 SF / Year

The National Landing submarket recorded -130,657 Deliveries (SF) 120,093 SF / Year square feet of net absorption during the second quarter of 2020, bringing the year-to-date absorption Leasing Activity 1.1 M SF / Year to -327,886 square feet. The negative absorption for the quarter was driven by multiple move-outs.

Market Stats Two of the top leases this quarter happened in National Landing, both being GSA leases. The GSA signed a Inventory 12.9 M SF 61,256-square-foot renewal at Crystal Park Five - 2451 Crystal Drive. Also, GSA - Department of Homeland Direct Vacancy 14.1% Security signed a 56,475-square-foot renewal at Jefferson Plaza - 1401 S. Clark Street. Total Vacancy 14.5% The Institute for Defense Analyses at 701 E. Glebe Road is currently under construction in National Landing. The YTD 2020 Absorption -327,886 SF 370,000-square-foot building is 100.0% pre-leased to the Institute for Defense Analyses and is set to deliver 1Q YTD Leasing Activity 160,809 SF 2022. APTA Centennial Center - 3030 Potomac Avenue is 58.9% pre-leased to the American Physical Therapy Under Construction 474,453 SF Association and the 104,453 square-foot building is set to deliver 1Q 2021. Percent Pre-Leased 91.0%

Amazon's HQ2, Metropolitan Park - 1450 South Eads YTD 2020 Deliveries 0 SF Street, located in National Landing plans to break 2010: 2019: YTD 2020: ground by third quarter 2020 and is expected to Asking Rental Rates $39.31 $38.44 $38.80 be completed by 2023. The project consists of two (Full Service) 22-story towers totaling 2.1 million square-feet. The PSF PSF PSF Virginia Tech Innovation Campus in National Landing will begin construction in 2021. The University plans to open by late third quarter 2024.

National Landing 2nd Quarter 2020

Major Leases

Crystal Park Five 2451 Crystal Drive Jefferson Plaza 1401 S. Clark Street GSA - Department of Tenant GSA Tenant Homeland Security Size 61,256 SF Size 56,475 SF Type Renewal Type Renewal

Century Two at Century 2461 S. Clark Street National Gateway 3550 S. Clark Street Center Tenant Bright Horizons Tenant Raytheon Size 11,133 SF Size 30,532 SF Type New Type Renewal Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

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

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

Old Town/Eisenhower Ave 2nd Quarter 2020

0.8 20 40 1.0 0.7

0.6 16 32 0.5

0.5 Asking Rate ($) Rate Asking 12 24 0.4 0.0 SF (Millions) Vacancy Rate (%) Vacancy 0.3 SF (Millions) 8 16

0.2 -0.5

0.1 4 8

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

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

Highlights 10 Year Averages (2010- 2019) Direct vacancy in the Old Town Alexandria and Eisenhower Avenue submarket decreased from 10.5% in the first Total Absorption -2,407 SF / Year quarter 2020 to 10.2% in the second quarter 2020, and has increased from 9.5% since second quarter 2019. Total Deliveries (SF) 11,419 SF / Year vacancy decreased from 12.2% in the first quarter 2020 to 10.9% in the second quarter 2020, and has increased Leasing Activity 519,383 SF / Year from 10.2% since second quarter 2019.

The Old Town/Eisenhower Ave submarket recorded Market Stats 122,262 square feet of net absorption in the second quarter of 2020, bringing the year-to-date absorption to Inventory 12.9 M SF 120,390 square feet. The positive absorption was driven by a 102,316-square-foot move-in at Crescent At Carlyle 10.2% - 1940 Duke Street. Direct Vacancy

The largest lease signed in the Old Town/Eisenhower Total Vacancy 10.9% Ave submarket in the second quarter 2020 was a 20,800-square-foot relet by Oxford Finance at 115 S. YTD 2020 Absorption 120,390 SF Union Street. YTD Leasing Activity 126,931 SF

Under Construction 0 SF

Percent Pre-Leased 0.0%

YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $34.06 $36.11 $35.58 (Full Service) PSF PSF PSF

Old Town/Eisenhower Ave 2nd Quarter 2020

Major Leases

115 S. Union Street

Tenant Oxford Finance

Size 20,800 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

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

Reston-Herndon 2nd Quarter 2020

2.0 4.0 25 35 3.5

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

SF (Millions) 1.0 0.8 10 14 0.5

0.0 0.4 5 7 -0.5

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

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights Direct vacancy increased from 11.9% in first quarter 2020 to 12.7% the second quarter 2020, and has increased 10 Year Averages (2010 - 2019) from 11.1% since second quarter 2019. Total vacancy has increased from 12.5% in the first quarter 2020 to 13.4% in Total Absorption 114,035 SF / Year the second quarter 2020, and has increased from 12.0% since second quarter 2019. Year-to-date direct vacancy Deliveries (SF) 63,983 SF / Year for Reston was 12.3% and total vacancy was 13.0%. Year- to-date direct vacancy for Herndon was 13.5% and total Leasing Activity 2.8 M SF / Year vacancy was 14.0%.

The Reston-Herndon submarket recorded 488,187 square Market Stats feet of positive absorption, bringing the year-to-date absorption to 110,225 square feet. The positive absorption Inventory 32.4 M SF for the quarter was driven by a 276,000-square-foot move-in By Leidos at 17Fifty - 1750 Presidents Street and a 160,000-square-foot move-in by General Dynamics at Direct Vacancy 12.7% General Dynamics HQ - 11011 Sunset Hills Road. Total Vacancy 13.4% The largest sale transaction in the Reston-Herndon submarket for the second quarter 2020 was the sale YTD 2020 Absorption 110,225 SF of Center for Innovative Technology - 2214 Rock Hill Road. The 149,415 square-foot building was acquired by YTD Leasing Activity 1,201,759 SF Origami from the Virginia Department of Federal Services for $47,350,000 ($316.90 psf). The building was 100.0% Under Construction 1.0 M SF occupied at the time of sale. Percent Pre-Leased 84.8% Four of the top ten leases signed in Northern Virginia this quarter were in the Reston-Herndon submarket. Micro- YTD 2020 Deliveries 648,957 SF soft Corporation signed a lease for 396,740-square-feet at Two Freedom Square @ Reston Town Center - 11955 2010: 2019: YTD 2020: Freedom Drive, which was the largest lease of the quar- Asking Rental Rates $28.18 $32.49 $32.56 ter. Walmart Labs signed a lease for 162,357-square-feet (Full Service) PSF PSF PSF at 2245 @ Herndon Metro - 2245 Monroe Street, which was the third largest lease of the quarter.

Reston-Herndon 2nd Quarter 2020 Major Leases Two Freedom 2245 @ Herndon 11955 Freedom Drive 2245 Monroe Street Square @ RTC Metro

Tenant Microsoft Corporation Tenant Walmart Labs Size 162,357 SF Size 396,740 SF Type Relet Type Relet

12021 Sunset Hills 10800-10802 Two Reston Overlook Parkridge Center I Road Parkridge Boulevard Tenant CACI Tenant Ligado Networks

Size 135,000 SF Size 54,104 SF

Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

$47,350,000 Center for Innovative Technology - VA Department of Reston-Herndon May 2020 ($316.90 psf) Origami A 100.0% 2214 Rock Hill Road Federal Services

Under Construction

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

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

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

Deliveries

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

CVS Reston Station Phase II - Reston-Herndon 212,957 SF 105,210 SF 54.5% 2Q 2020 Comstock Pharmacy, 1906 Reston Metro Plaza Neustar Inc

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

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

Rosslyn-Ballston Corridor 2nd Quarter 2020

1.2 27 45 2.5

24 40 2.0 1.0 21 35 1.5

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

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

0.4 9 15 0.0

6 10 0.2 -0.5 3 5

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

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in the Rosslyn-Ballston Corridor increased from 15.7% in the first quarter 2020 to 16.3% in the second 10 Year Averages (2010 - 2019) quarter 2020, and has decreased from 16.6% since second quarter 2019. Total vacancy increased from 16.5% in the Total Absorption 23,183 SF / Year first quarter 2020 to 17.2% in the second quarter 2020, and has decreased from 17.9% since second quarter 2019. Deliveries (SF) 267,726 M SF / Year

The Rosslyn-Ballston Corridor recorded -57,047 square Leasing Activity 2.0 M SF / Year feet of net absorption during the second quarter of 2020, bringing the year-to-date absorption to -99,804 square feet. A contributor to the negative absorption was a Market Stats 23,054-square-foot move-out at Commonwealth Tower - 1300 Wilson Boulevard. Inventory 25.7 M SF The largest lease signed in the Rosslyn-Ballston Corridor Direct Vacancy 16.3% submarket was a 25,073-square-foot renewal by Innovative Defense Technologies at Cooperative Plaza Total Vacancy 17.2% - 4401 Wilson Boulevard. Other top leases include a 21,000-square-foot expansion by Internos Solutions at YTD 2020 Absorption -99,804 SF 4040 N. Fairfax Drive and a 15,267-square-foot relet by the Association for Unmanned Vehicle Systems International YTD Leasing Activity 425,594 SF at 3100 Clarendon Boulevard.

Under Construction 158,994 SF The only sale in the Rosslyn-Ballston Corridor submarket during the second quarter of 2020 was 1530 Wilson Boulevard. The asset was aquired by Velocis from Invesco Percent Pre-Leased 0.0% for $71,400,000 ($416.64 psf). The property was 71.0% occupied at the time of sale and traded at a 6.25% Cap YTD 2020 Deliveries 240,000 SF Rate.

2010: 2019: YTD 2020: The Loft Office at Market Common - 1440 Edgewood Street, Asking Rental Rates $40.67 $41.39 $41.56 is currently under construction. The 158,994-square-foot (Full Service) property is expected to deliver 3Q 2020 and is currently PSF PSF PSF 17.3% pre-leased.

Rosslyn-Ballston Corridor 2nd Quarter 2020 Major Leases Cooperative Plaza 4401 Wilson Boulevard 4040 N. Fairfax Drive Innovative Defense Tenant Tenant Internos Solutions Technologies Size 21,000 SF Size 25,073 SF Type Expansion Type Renewal

3100 Clarendon Boulevard 1525 Wilson Boulevard Association for Accenture Federal Tenant Tenant Unmanned Vehicle Services Systems International Size 15,107 SF Size 15,267 SF Type Renewal Type Relet

Three Ballston 1525 Wilson Boulevard 1100 N. Glebe Road Plaza INS Arlington Asylum Tenant International Development Office Tenant Group, Inc. Size 14,143 SF Size 12,035 SF Type Renewal Type Relet

2300 Clarendon Courthouse Plaza II International Place 1735 N. Lynn Street Boulevard Tenant Knowland Group Community Health Tenant Accreditation Program Size 11,687 SF Size 11,794 SF Type Renewal Type Relet

Rosslyn City Center 1700 N. Moore Street Tenant DevTech Systems, Inc.

Size 10,598 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

$71,400,000 1530 Wilson Boulevard RB Corridor April-2020 Velocis Invesco A 71.0% 6.25% ($416.64 psf)

Under Construction

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

Loft Office at Market Common - 1440 Edgewood RB Corridor 158,994 SF 158,994 SF 17.3% 3Q 2020 Regency Centers Undisclosed Fitness Tenant Street

Route 28 North 2nd Quarter 2020

0.6 3.00 25 30

0.5 2.35 20 24

0.4 Asking Rate ($) Rate Asking 1.70 15 18

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

5 6 0.40 0.1

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

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights 10 Year Averages (2010 - 2019) Direct vacancy in the Route 28 North submarket increased from 8.9% in the first quarter 2020 to 9.1% in the second Total Absorption 46,548 SF / Year quarter 2020, and has decreased from 11.0% since second quarter 2019. Total vacancy increased from 9.0% in the Deliveries (SF) 51,739 SF / Year first quarter 2020 to 9.2% in the second quarter 2020, and has decreased from 11.2% since second quarter 2019. Leasing Activity 623,379 SF / Year The Route 28 North submarket recorded 51,994 square feet of net absorption in the second quarter of 2020, Market Stats bringing the year-to-date absorption to 230,463 square feet. Positive absorption was primarily driven by a 75,292-square-foot move-in at Lakeside @ Loudoun Inventory 9.5 M SF Bldg 3 - 21355 Ridgetop Circle. Direct Vacancy 9.1% The largest lease signed in the Route 28 North submarket this quarter was a 27,306-square-foot renewal by Total Vacancy 9.2% CGI, Inc. at Loudoun Gateway IV - 22980 Indian Creek Drive. The second largest lease signed in the Route 28 YTD 2020 Absorption 230,463 SF North submarket this quarter was a 26,733-square-foot expansion by Northrop Grumman at Lakeside @ Loudoun YTD Leasing Activity 203,647 SF Bldg I - 21351 Ridgetop Circle. Under Construction 0 SF

Percent Pre-Leased 0%

YTD 2020 Deliveries 0 SF

2010: 2019: YTD 2020: Asking Rental Rates $24.20 $25.59 $25.94 (Full Service) PSF PSF PSF

Route 28 North 2nd Quarter 2020

Major Leases

Lakeside @ Loudoun Loudoun Gateway IV 22980 Indian Creek Drive 21351 Ridgetop Circle Bldg I Tenant CGI Tenant Northrop Grumman

Size 27,306 SF Size 26,733 SF

Type Renewal Type Expansion

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

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

Under Construction

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

No new construction reported Route 28 North N/A N/A N/A N/A N/A N/A this quarter

Route 28 South 2nd Quarter 2020

1.0

25 30 1.5

0.8 20 24 1.0

0.6 ($) Rate Asking 15 18

0.5

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

0.2 0.0 5 6

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

Highlights Direct vacancy in the Route 28 South submarket has increased from 12.2% in the first quarter 2020 to 13.1% in 10 Year Averages (2010 - 2019) the second quarter 2020, and has decreased from 13.8% in the second quarter 2019. Total vacancy has increased Total Absorption 259,505 SF / Year from 12.7% in the first quarter 2020 to 13.7% the second quarter 2020, and has decreased from 14.0% since Deliveries (SF) 183,395 SF / Year second quarter 2019.

Leasing Activity 803,539 SF / Year The Route 28 South submarket recorded -70,394 square feet of net absorption in the second quarter of 2020, bringing the year-to-date absorption to -136,439 square feet. Negative absorption was driven by a 38,852-square- Market Stats foot move-out at Venture Park - 4795 Meadow Wood Lane. Inventory 13.4 M SF

The largest lease signed in the Route 28 South submarket Direct Vacancy 13.1% this quarter and the fourth largest lease signed in Northern Virginia was a 158,919-square-foot renewal by Total Vacancy 13.7% Science Applications International Corporation (SAIC) at Liberty Center 2 - 14672 Lee Road. Also contributing to YTD 2020 Absorption -136,439 SF leasing activity this quarter was a 15,839-square-foot relet signed by the National Captioning Institute at Stonecroft YTD Leasing Activity 363,092 SF Business Park, Bldg A - 14801 Murdock Street. Under Construction 0 SF Penrose II - 11401 Penrose Place delivered this quarter. The 125,000-square-foot building is 84.6% leased to Percent Pre-Leased 0% Kudu Dynamics and Rincon Research. YTD 2020 Deliveries 125,000 SF

2010: 2019: YTD 2020: Asking Rental Rates $26.31 $26.27 $26.43 (Full Service) PSF PSF PSF

Route 28 South 2nd Quarter 2020

Major Leases

Stonecroft Business Liberty Center 2 14672 Lee Road 14801 Murdock Street Park - Bldg A Tenant SAIC National Captioning Tenant Institute Size 158,919 SF Size 15,839 SF Type Renewal Type Relet

Independence 15036 Conference Southgate Center II 4511 Singer Court Center I Center Drive Tenant The Boeing Company Tenant Siege Technologies

Size 15,151 SF Size 14,204 SF

Type Renewal Type Relet

4795 Meadow Wood Venture Park Avion Business Park 14585 Avion Parkway Lane MBA Consulting Tenant Tenant GHD, Inc. Services, Inc. Size 11,243 SF Size 11,747 SF Type Renewal Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported Route 28 South N/A N/A N/A N/A N/A N/A N/A during the quarter

Deliveries

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

Zumot Kudu Dynamics, Penrose II - 14401 Penrose Place Route 28 South 125,000 SF 33,906 SF 84.6% 2Q 2020 Real Estate Rincon Research Management

Springfield 2nd Quarter 2020

0.8 30 35 1.00 0.7

0.6 24 28 0.75

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

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

0.00 0.1 6 7

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

Highlights 10 Year Averages (2010 - 2019)

Direct vacancy in the Springfield submarket decreased Total Absorption 69,548 SF / Year from 18.6% in the first quarter 2020 to 17.9% in the second quarter 2020, and has decreased from 19.1% Deliveries (SF) 132,350 SF / Year since first quarter 2019. Total vacancy decreased from 19.6% in the first quarter 2020 to 18.9% in the second Leasing Activity 336,476 SF / Year quarter 2020, and has decreased from 19.3% since second quarter 2019. Market Stats The Springfield submarket recorded 17,165 square feet of net absorption in the second quarter of 2020, Inventory 5.8 M SF bringing the year-to-date absorption to -87,266 square feet. The positive absorption was driven by Direct Vacancy 17.9% multiple smaller tenant move-ins. Total Vacancy 18.9% The largest lease signed in the Springfield submarket this quarter and the tenth largest lease signed in YTD 2020 Absorption -87,266 SF Northern Virginia was a 39,356-square-foot renewal by Accenture Federal Services, LLC at Kingstowne Bldg YTD Leasing Activity 126,845 SF K - 5911 Kingstowne Village Parkway. Also contributing to leasing activity this quarter was another lease Under Construction 634,000 SF signed at Kingstowne Bldg K - 5911 Kingstowne Village Parkway by Spok Holdings, Inc. for 26,477 square feet. Percent Pre-Leased 98.9% 6595 Springfield Center Drive is currently under YTD 2020 Deliveries 0 SF construction. The Boston Properties’ 634,000-square- foot building is 98.9% pre-leased to the GSA-TSA. The building is scheduled to deliver 3Q 2020. 2010: 2019: YTD 2020: Asking Rental Rates $30.09 $28.91 $28.18 (Full Service) PSF PSF PSF

Springfield 2nd Quarter 2020

Major Leases

5911 Kingstowne 5911 Kingstowne Kingstowne Bldg K Kingstowne Bldg K Village Parkway Village Parkway Accenture Federal Tenant Tenant Spok Holdings, Inc. Holdings Inc. Size 26,477 SF Size 39,356 SF Type Relet Type Renewal

Metro Park @ 6361 Walker Lane Springfield VI CADD Microsystems, Tenant Inc. Size 13,284 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

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

Under Construction

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

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

Tysons Corner 2nd Quarter 2020

2.0 20 36 3.0

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

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

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

Direct vacancy in the Tysons Corner submarket increased 10 Year Averages (2010 - 2019) from 11.8% in the first quarter 2020 to 12.1% in the second quarter 2020, and has increased from 11.5% the second Total Absorption 278,113 SF / Year quarter 2019. Total vacancy increased from 12.6% in the first quarter 2020 to 12.8% in the second quarter 2020, Deliveries (SF) 325,028 SF / Year and has increased from 12.0% the second quarter 2019. Leasing Activity 2.2 M SF / Year The Tysons Corner submarket recorded 27,677 square feet of net absorption in the second quarter of 2020, bringing the year-to-date absorption to -94,840 square Market Stats feet. Positive absorption was partially driven by a 15,334-square-foot move-in at Tysons Plaza 2 - 1430 Inventory 30.1 M SF Spring Hill Road.

12.1% The only sale in the Tysons Corner submarket during Direct Vacancy the second quarter of 2020 was John Mashall II - 8283 Greensboro Drive. The building was aquired by the Total Vacancy 12.8% Meridian Group from Washington Real Estate Investment Trust for $57,000,000 ($255.62 psf). The asset was 100.0% YTD 2020 Absorption -94,840 SF occupied at the time of sale by Booz Allen Hamiltion. YTD Leasing Activity 375,036 SF The largest lease signed in the Tysons Corner submarket this quarter was a 30,839-square-foot sublease by Under Construction 383,628 SF QOMPLX, Inc. at the Corporate Office Centre @ Tysons II - 1775 Tysons Boulevard. Also contributing to leasing Percent Pre-Leased 0.0% activity this quarter was a 24,690-square-foot renewal by Favor TechConsulting, LLC at Fairfax Square II - 8075 YTD 2020 Deliveries 0 SF Leesburg Pike and a a 24,638-square-foot expansion by ServiceNow at Fairfax Square III - 8045 Leesburg Pike. 2010: 2018: YTD 2020: Asking Rental Rates $30.09 $35.41 $35.81 (Full Service) PSF PSF PSF

Tysons Corner 2nd Quarter 2020

Major Leases

Corporate Office 1775 Tysons Boulevard Fairfax Square II 8075 Leesburg Pike Centre @ Tysons II Favor TechConsulting, Tenant Tenant QOMPLX, Inc. LLC Size 30,839 SF Size 24,690 SF

Type Sublease Type Renewal

Fairfax Square III 8045 Leebsurg Pike 8270 Greensboro Drive Tenant ServiceNow Tenant ID.me, Inc.

Size 24,638 SF Size 20,909 SF

Type Expansion Type Sublease

Pike & Gallows 1934 Old Gallows Road Tysons Plaza I 1420 Spring Hill Road Eberle Communications Tenant Intelligent Office Tenant Group Size 11,667 SF Size 10,966 SF Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

John Marshall II - 8283 $57,000,000 The Meridian Tysons Corner April-2020 WashREIT A 100.0% Greensboro Drive (255.62 psf) Group

Under Construction

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

Tysons Central - Tysons Corner 383,628 383,628 0.0% 4Q 21 Foulger-Pratt None 1750 Tysons Central Street