Metro Vancouver Office

CBRE Limited

MarketView Metro Vancouver Office

Notable Lease Transactions Global Research and Consulting Metro Vancouver Office

Size (SF) TtTenant Address www. cbre.ca/research First Quarter 2012 Average Asking Lease Rate Rate determined by multiplying the asking net The Metro Vancouver office market continued to increasingly become good options for these 71,929 MNP LLP 1021 West Hastings, Vancouver lease rate for each building by its available record healthy demand in the first quarter of companies, with the overall vacancy rate in that space, summing the products, then dividing by the sum of the available space with net leases 2012. PitiPositive abtibsorption and didecreasing marktket dliideclining to 11.3%, the ltlowest since the 67,000 Bull Housser Tupper LLP 520 West Georgia Street, Vancouver for all buildings in the summary. vacancy continue to bring the market closer to second quarter of 2009. All other markets also pre-recession levels of activity, with the last six posted declines in vacancy, with the exception of Net Leases months recording the largest gains since the the North Shore which increased to 7.5% this 37,121 Ledcor 1055 West Hastings, Vancouver Includes all lease types whereby the tenant pays global credit crisis. Metro Vancouver continues to quarter. an agreed rent plus most, or all, of the operating experience increasing levels of demand among expenses and taxes for the property, including Quick Stats – Metro Vancouver office occupiers despite ongoing challenges in Suburban construction activity has also increased, 35,894 Microsoft 858 Beatty Street, Vancouver utilities, insurance and/or maintenance the global economy. As such, the overall vacancy but unlike the downtown market, which is mainly expenses. Change from last rate declined for the sixth consecutive quarter to comprised of speculative lease product, consists 7.6% whilequarterlyabibsorption was posiiitive at of several compllletelypre-ldleased,silingle-tenant 27,200 Relic Entertainment 1040 Hamilton Street, Vancouver Market Coverage Current Yr Qtr. Includes all competitive office buildings 10,000 288,609 SF. projects such as Central, Containers Phase 1 and square feet and greater in size. Vacancy 7.6% the recently completed Broadway Tech Building 4 24,665 PCL Constructors Inc. 13911 Wireless Way, Richmond The downtown vacancy rate remained unchanged at 2910 Virtual Way. Conversely, Ivanhoe Net Absorption Lease Rates $19.84 psf for the first time in eight quarters at 3.4% with Cambridge’ s Metrotower III project remains the The change in occupied square feet from one minimal absorption due to constrained supply. only major suburban office tower being offered period to the next. Net Absorption 288,609 SF Accordingly, the market posted a marginal 5,626 on a speculative basis, while several pre-sale Metro Vancouver Submarket Map Net Rentable Area SF of negative absorption this quarter due mostly strata projects remain available in Broadway and New Supply** 173,000 SF The gross building square footage minus the to increments of Class B and C space coming Surrey including Broadway Central, Panorama elevator core, flues, pipe shafts, vertical ducts, back onto the market. Nevertheless, tight market Place and Central City Professional Building. balconies, and stairwell areas. conditions persist and have put the market at the *The arrows are trend indicators over the beginning of a major development cycle After a very positive year, many have wondered if Occupied Square Feet specified time period and do not represent a positive or negative value. (e.g., absorption downtown. The first quarter of 2012 had several the market has reached its peak in terms of Building area not considered vacant. could be negative, but still represent a positive trend over a specified period.) office developments officially under construction, market strength. Over the long-term, expect the Under Construction **Denotes Competitive Lease (Non-Strata) including TELUS Garden, 745 Thurlow and MNP regional office market to continue making Buildings which have begun construction as Product Only. Tower (formerly named 1021 West Hastings) with headway towards lower vacancy and positive evidenced by site excavation or foundation work. several other proposed projects on the verge of absorption. Suburban office markets are still Available Square Feet Hot Topics beginning construction as well. experiencing varying degrees of activity, but are Available Building Area which is either physically expected to show more resilience over the next vacant or occupied. • The Metro Vancouver vacancy rate For the first time since the recession, leasing year with tenants across most markets expanding. declined to 7.6% due to activity in activity in the suburban office market surpassed In the downtown office market, expect quarterly Availability Rate the suburban office market. the downtown core with the overall suburban statistics to show little change given record low Available Square Feet divided by the Net vacancy rate declining 90 basis points (bps) to vacancy; however, over the next several months, Rentable Area. • Vacancy in the downtown submarket 12.0%. The suburban office market has the downtown office market will also begin to see Vacant Square Feet remained unchanged at 3.4% this continued to see increasing levels of leasing changing market dynamics as new construction activity over the past year, supported by resource, challenges market perceptions regarding both Existing Building Area which is physically vacant quarter. or immediately available. technology and engggineering firms looking to available options and ppgricing. • Suburban vacancy declined to 12.0% expand or upgrade their existing facilities. Multi- Vacancy Rate floor and large-block options in Burnaby have Vacant Building Feet divided by the Net Rentable in the first quarter. Area. • Of the 1.2 million SF of downtown Market Area Descriptions Normalization office space under construction, nearly Absorption Vacancy Due to a reclassification of the market, the base, Metro Vancouver Historical Absorption & Vacancy (1) DOWNTOWN VANCOUVER consists of 21.9 million SF (51.4%) of the office market inventory. number and square footage of buildings of half has already been pre-leased. (2) THE BROADWAY CORRIDOR consists of 4.2 million SF (10.1%) of the office market inventory. previous quarters have been adjusted to match 300,000 12% (3) BURNABY consists of 777.7 million SF (17. 5%) of the office market inventory. the current base. Availability and Vacancy figures 250,000 10% for those buildings have been adjusted in (4) RICHMOND consists of 3.6 million SF (8.7%) of the office market inventory. 200,000 8% (5) NORTH SHORE consists of 1.8 million SF (4.3%) of the office market inventory. previous quarters. 150,000 6%

(6) SURREY consists of 2.5 million SF (6.0%) of the office market inventory. SF (7) NEW WESTMINSTER consists of 1. 1 million SF (2. 7%) of the office market inventory. 100,000 4% For more information regarding the 50,000 2% MarketView, please contact: 0 0% Anthio Yuen, Senior Research Analyst CBRE Limited 1Q11 2Q11 3Q11 4Q11 1Q12 This disclaimer shall apply to CBRE Limited, Brokerage, and to all other divisions of the Corporation (“CBRE”). The information set out herein (the “Information”) has not 600 – 1111 WtWest Georg ia SttStreet, Vancouver, been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or assume BC V6E 4M3 Canada any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property T. 604.662.3000 F. 604.684.9368 described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE. [email protected] © 2012 CBRE Limited MarketView Metro Vancouver Office First Quarter 2012 Page 7 l and oca d) ll l te i in the erage e m v t th A erage Li o i d © 2012 CBRE Limited © 2012 . men scientific ntar y psf , lo ng an p py 84 . di disproportionately em 19 , $ d (2318667 O d (2318667 to cspen oar professional ti B the properties 2011 omes dti d nvestment o een supported by a strong natural end t been - d Purchaser CPP ICPP I B d (2318667 O i Li i d) AAA/A e ear ti d has y y it v spot from ti it among psf sac ’ bright ($/SF) or 11 t’ t . 0 $ One ssec . Price y $471 to the Conference Board of Canada availability thi onl g f o space of h resource sector and miningoffice space. activity, creating new requirements for Accordin services sector in British Columbia grew by 2.8%steady in 2011 increases and has seen sinceemployment 2010. For gains thetransportation have and most warehousing, and part, finance, been insurance and the(FIRE). real within estate province’s For two the regionalsector has office major resulted market, in increased positive industries: demand for growthmuc office in space; however, the with FIRE housing market, there are short-term risks toto demand. public Recent sector cutbacks employment are also expectedoffice to affect the appetite for technical industries, which have b Average asking net rentalregional basis, rates with the have overall asking generally rentdropping held in the steady first quarter on of 2012 asking a rents in the downtownover office the market past have twelve also months, stayedlack which steady is somewhat deceptive givenweighting the Class B and C space rentsthe higher. The suburban average office asking market rent also for remainedat consistent from $18.34 2011 psf, levels but areaverage asking much rate was improved from $17.00 psf. 2010 levels when the 032 ,

Size (SF) 222 032 269,000 $467 Investment Board CPP (2318665 Ontario Limited)

2 2 Jan-1

1 1 Nov-1

1 1 Sep-1

owntown

1 1 Jul-1

Price $38,300,000 72,000 $532 Investors Group (I.G. Investment Management, Ltd.) Management, Investment (I.G. $38,300,000 72,000Group $532 Investors $14,525,000 $7,700,000 30,000 29,230 $484 $263 Holdings Ltd (BT) Hamilton 1028 Guildford Real Estate Corp $52,300,000 (50% Interest Transfer) $62,867,000 (50% Interest Transfer)

1 May-1 Finance, Insurance & Real Estate Professional, Scientific & Technical Public Administration 1

1 Mar-1 an 1 b ur

SbS b 1 1 Jan-1

0 0 Nov-1

0 0 Sep-1 treet

d S 0 0 Jul-1

urrar

Weighted

0 May-1 - 0

Address Address 1088-1096 Homer 1088-1096 Homer & 1091-1095 Hamilton 1028-1036 Hamilton Street; 1025-1035 Mainland Street 10228 102A Avenue & 10207-10233 153rd Street 800 B d S

0 0 Mar-1

1Q11 2Q11 3Q11 4Q11 1Q12 0 0 Jan-1 0 . Source: Statistics Canada (Seasonally Adjusted) Statistics Source: ancouver

$5 $0 90.0 70.0 Market VancouverV 401 West Georgia Street Vancouver North VancouverVancouver 1900-1950 Lonsdale AvenueSurrey $18,500,000 40,225 $460 1940 Holdings (BT) Limited

190.0 170.0 150.0 130.0 110 0 $30 $30 $25 $20 $15 $10 Net Rental Rates Net Rental Service Sector Industry -Employment by BC

$ psf $ Sale Transactions Top

00s) 0 0 ( Employees of r e e Numb

MarketView Metro Vancouver Office First Quarter 2012 Page 2 ia b over um l positive o 47 72 66 98 ClC b . . . . h 25.68 $41 47 $30 72 $23 66 $25 98 $ Gross Rate Gross Rate ($/SF) © 2012 CBRE Limited © 2012 ritis momentum Bh B relatively or f 25 87 06 32 d . . . . positive 15.83 despite Net Asking Net Asking ($/SF) $25 25 $18 87 $12 06 $16 32 $ , eman dd d t show ec to ff a ld uncertainty YTD New Supply (SF) face continued ets cou k to economy ------1Q 2012 New Supply (SF) continues ousing mar h regional inese 501 486 - - The the past several months, with Gross3.1% at Domestic the Product end (GDP) of rising 2011.on However, the with the path global to economycontinued still downside recovery, risk Metro over Vancouverand the is short-term commodity despite growth expected strong fueling toeconomy trade a face in number the of first sectors quarter.Ch of For the the local most part, slower U.S. and economy performance in the first quarter of 2012. forestry products, while European debt issuesbusiness continue to and challenge consumer confidence locally. Overall, Vancouver’s , , 655 626 ,

5 626 397 33 501 YTD - - 12 655 - Absorption (SF)

) % % ( Rate yment o o Unempl 501 486 -10 , , 655 626 , , 5 626 397 33 501 10% 8% 6% 4% 2% 0% 1Q 2012 Absorption (SF) - - 12 655 - GDP Unemployment 0% 0% . . 4% 8% . . Vacancy Rate Vacancy (%) 34% 3 78% 7 21 0% 11 0% Forecast 879 , Source: Conference Board of Canada * 338 886 877 730 16.5% -10 294 2.5% 10,522 10,522 - - $22.86 $43.49 , , , , 930 , 21 930 879 850 338 526 886 752 877 First Quarter 2012 eater Vancouver Area eater Vancouver – 170 39 19 17 Total Buildings Inventory (SF) AB 26C 64 69 5,778,937 7,679,528 1.9% 4,123,211 3.6% 7.5% 29,776 -20,326 -29,227 29,776 -20,326 -29,227 ------$32.62 $52.16 $25.98 $42.36 $20.18 $34.36 Class TOTAL C TOTAL 93AB 32 4,249,660C 33 4.8%TOTAL 91 10 2,783,963A 1,922,011 42,264B 8.5% 21 7,732,294 442,474 17.0%C 11.3%TOTAL 42,264 24.7% 69 8 29,301 -8,678 1,278,738B 235,812 -C 21.9% -2,757 29,301 3,533,027TOTAL 225,423 -8,678 41 11 235,812 21.3% 13,357 -2,757 39.5% -B - 173,000C - 20 4,849 1,797,698 301,015TOTAL 13,357 - 44 - 14 7.5% 173,000 8.3%B - 4,849 $20.71 $34.47 - 737 -C $18.77 $31.33 13 2,566,621 288,403 -23,226TOTAL - 5,775 27 - 10 17.3% - 4.0% $19.32 $30.99 -23,226 $15.85 $28.30 589,296 - 5,775 11,920 1,075,938 275,766 $14.98 $26.32 - 11.3% -3,708 - 9.8% - 4.3% - 11,920 $16.72 $25.04 -3,708 15,725 22,616 - 2,390 - - $15.83 $25.28 - 15,725 - 22,616 2,390 $8.82 $16.09 - $17.41 $27.53 - - $15.86 $25.96 - - - $21.68 $31.48 - $10.71 $18.63 - $14.12 $25.46 $14.90 $27.06 $11.45 $25.19 AB 20 29 1,245,175 1,645,853 5.1% 3.8% 1,700 30,439 1,700 30,439 - - - - $21.08 $34.08 $21.68 $36.61 Statistics 1Q12 2Q12* 3Q12* 4Q12* 1Q13* $0

$20 $80 $60 $40 100

Downtown AAA 11Broadway Corridor AAA 4,349,203 5 1.1% 508, 14,151 14,151 - - $35.19 $55.39 Burnaby AAA 16Richmond 2,583,846 AAA 7.9% 21North Shore 217,946 1,501,980 A 18.2% 217,946 13Surrey 173,000 -21,163 743,806 ANew Westminster 173,000 -21,163 3.7% 10 A $24.94 $39.43 - 4 4,500Suburban 1,540,488Metro Vancouver 20.2% TOTAL 535 210,876 4,500 - TOTAL 365 12.8% 26,114 42,886,117 7.6% - $19.23 $29.67 20,955,238 4,501 26,114 12.0% 288,609 - - 4,501 288,609 294,235 173,000 294,235 - $23.80 - 173,000 173,000 $35.86 $19.84 $32.08 - 173,000 $23.82 $33.67 $18.34 $29.47 $18.36 $31.84 $

($ Billions) ($ P P GD Economic Conditions: Gr Conditions: Economic Office Market Office Market MarketView Metro Vancouver Office First Quarter 2012 Page 3 to ly. d their 9% 6% 3% 0% -3% on as market positive ortfolios the © 2012 CBRE Limited © 2012 released –a of inue as only 8 ines. Quarterly to a mixed-use as committe ng are necessary h 1Q12 Vacancy Rate most upper with T , . Street space ousser 4Q11 H ll Beatty properties u Bll B C AAA/A roving to 1.1% and 1.9%, respective 858 irm and f at Class B w continue to face constrained supply and strong SF a in l Absorption (SF) Absorption 3Q11 t a Class 894 h , t d 35 t quarter of 2012 and marked the beginning of a new among availability rst time after seven consecutive quarters of decl leased former department store at Pacific Centre mall in 2Q11 y announce l decreased concentrated Microsoft Relic Entertainment leased 27,200 SF at 1040 Hamilton Street recent is h • • offset ic market, landlords have begun shuffling tenants within their existing p hh h to which 1Q11 wing a 72,000 SF prelease by MNP LLP; 745 Thurlow, which has confirmed pre- en w of n in terms of pricing, most have been working closely with tenants to fill e Class AAA and Class A vacancy rate imp t where creative solutions such as floor reconfigurations and backfilli d he first quarter of 2012, capping off ten quarters of declining vacancy and 00,000 SF of office space to the market in 2014 and could be under constructi t ar helped Gd G 800 most ree , 626 SF, as a result of limited available space. This trend is expected to cont St t and a i which TELUS are being leased almost immediately as tenants 4Q10 d t quarter eorg Gi G t ;an market first Georgia lt es Wt W the the etrau of West to Tl T 520 y verall vacancy rate remained unchanged for the fi as t h 3Q10 a llac Fairview has unveiled plans to redevelop the cially underway in the downtown core as of the firs 401 art SF C c returned MCM h market both 000 d , cal Absorption and Vacancy the in 67 space on d in an C l 2Q10 ava ease exist ld l Ll L interest Class - SF pre- % SNC and 50 000 LLP B , a rom f 10 1Q10 Class upper T of above purchased 0 ousser H 300 200 100

-100

options ll

amounts

u s) 0 (00 SF 0 CPPIB Burrard for $115.1 Million MNP LLP pre-leased 71,929 SF at 1021 West Hastings Street Bll B Ledcor renewed and expanded 37,121 SF at 1055 West Hastings Street easing commitments early as this fall. to complete transactions. While landlords remain in an advantageous positio to accommodate expansions and prospective deals. The result has been a marke Three major office development projects were offi • absorption. Top-quality and multi-floor availabilities on the marke DOWNTOWN VANCOUVER DOWNTOWN Metro Vancouver’s central office market continued at a tremendous pace in t demand downtown. With only 139,149 SF of direct vacant Class AAA/A space on the requirements given the initial difficulty of finding suitable options. The overall vacancy rate remained unchangedSmall at 3.4% this quarter, despite th availability in the 3,000 SF to 7,000 SFabsorption range. was The negative o for the first timevacant in eight quarters at negative 5, l As well, upon announcing the closure of Sears,office/retail Cadi building. The redevelopment could add another 250,000 SF – 3 -Downtown Vancouver Histori Significant Transactions • • • statistic that is expected to rise as more firms target the new builds. 67,000 SF upon completion. Accordingly, of the estimated 1.2 Million SF currently under construction between those three buildings, 47.0% has been p development cycle: 1021 West Hastings, which was renamed to MNP Tower follo

MarketView Metro Vancouver Office First Quarter 2012

Page 6

includin , C class markets on other the vacancy ponding 5-year bond (circa ponding ial mortgages remain will ects rate is 0.75%. This develo 0.75%. This rate is everage with debt service ll t i i130 b j the borrower's other assets or eral quarters, Surrey has become quarters, Surrey eral We have seen far more appetite for ter office market continues to ter office market continues nd ree quarters, countering the t ro offerings available in the North sorption and decreasing vacancy. The sorption and decreasing Credit spreads remain relatively p a 50 bps quarterly decrease to market of SF, 1.1 million small . osi 12, the Bank of Canada (BoC) althy demand for office space, coupled demand for office althy office strata to seems market, which p overa n one of cycles the largest building

e . Several ith th e Rate: 4.22% - 4.97% y w g

respectively a , g gg ers, industrial strata t - 18% . quar

our f n i to market in Surre to market in g 65% and 2 . bank rate is 1.25% and the de 1.25% and the bank rate is ear Commercial Mort g Y vacancy

s seen a steady increase over the lastthe over a steady increase seen s th and 4.0%, respectively. Over the last sev the Over and 4.0%, respectively. n i Canadian Dollar: $1.0079 USD 5-Year Commercial Mortgage Rate: 3.56% - 4.31% 10- ondin ects comin j p with several office and flex several with ro • • • , p ncrease t i announcement to 1announcement to 1 65% and 2 18% respectivelyrelatively spreads remain Credit le office arges p ve seen some deals priced as some deals priced low as seen 165 bps the corres ve over BoC l Accordingly e . ar money, they are very selective about where they place it. about where ar selective money, very they are strong lower debt will require requirements recourse to service positive absorption office positive this quarter. For small a relatively e recent spike in available lease space is the growth of the king system and sovereign debt markets, suggests that commerc king system and sovereign d th the overall vacancy rate of 9.8% the lowest in over a vacancy rate of over decade. the overall 9.8% in the lowest fluctuation in both fluctuation in vacancy and absorption. Accordingly, he first quarter of vacancy down 2012, with 170 bps to 20.2%. a B in unchanged at an average of 65.0%, representing conventional l conventional of 65.0%, representing at an average unchanged in quarter of 2012 in Surrey with the overall vacancy rate posting the overall with quarter of Surrey 2012 in either in the pre-leasing or planning stages the pre-leasing or planning and i in could result either n lead to major gains in vacancy. Nevertheless, the New Westmins New the vacancy. Nevertheless, gains in to major n lead tive quarter tive of gains, with all asset positive ab classes witnessing nesse A good 5-year mortgage commercial rate today 3.50% is to 3.75%. it e will be ample liquidity for the foreseeable future. On 8,for March be ample liquidity the foreseeable will e 20 ht rate at 1.0%. The corres rate ht w hasing spacehasing Accordinglyoffice and flex several with g t has led to multi , e k ment mar

p p, p pj g y g pj, , ce absorption. Vacancy in the North Shore ha North Shore the absorption. Vacancy in eit minimal) with vacancy rising to 16.5% vacancy rising with eit minimal) ffi o

et for the overni the et for ore g th Sh its tar or g gg g20 bps the year bonds risen since have pg p - N e th n i e t ra

overnment in favour of develo year and 10 g - al p pg vacancy NORTH SHORE & NEW WESTMINSTER NORTH , ll ear Canada Bond: 1.65% Y 10-Year Canada Bond: 2.18% Bank Prime Rate: 3.00% 5- overa

e • with a munici one of the steadiest office markets in Metro Vancouver, with little with of one the steadiest office Vancouver, markets in Metro SURREYSHORE & NEW WESTMINSTER NORTH the first unchanged over relatively conditions remained Market 17.3%. The Class the A market again in posted figures positive hand, both recorded negative absorption (alb George station, are and King Building Professional City Central Surrey has seen since 2003. Th SF of negative of 23,226 7.5% as a result to ll for th One explanation market activity. of improving trend regional space purc purchasing and instead away from leasing tenants pulling have t i thN this trend may for future. continue the immediate Shore, th Sh ffi office Westminster market posted The New the second consecu k t itth d l t ii MARKETS CAPITAL if tIn Canada, rates interest remain at historical lows and ther th ith that announced it is maintainin combined with tentative signs of stabilization in the European ban attractive to Canadian lenders. The benchmark 5 assets. We ha producing 180-200 bps for quality income around stable 10-ye funds and banks have companies, pension insurance life While enhanced security. Quick Stats • • 3.35% all in), however, this is the exception, not this is the rule. 3.35% in), all however, the institutions to lend 3 to 5-year money. Lending ratios rema north requirements of 1.25%. Movement to higher leverage and/or benefit from some recovery in regional office fundamentals, in regional with from some recovery benefit changes in availability need to be closely monitored as they ca overall vacancy rate dropped 300 bps to 9.8%, with 22,616 SF of 22,616 bps to rate dropped 9.8%, with 300 vacancy overall MarketView Metro Vancouver Office First Quarter 2012 Page 5 e o t his the t EXP ons. rowth CH2M market tinQ1 yoffice amen t e Burnaby the © 2012 CBRE Limited © 2012 in Burnaby, es of Broadway , ttt t a d 2009 uirements. q of or an t ca ace re p di n idit i quarter ve their s iti of which was in the Class AAA and g t second apos mos the s, was led by leasing activity within – till er reducin ss g i 156,399 SF) at 1795 Willingdon Avenue, since it , 812 SF , . SF lowest Drive 399 ystone Environmental (4400 Dominion Street) and the , 156 Creek tenants are no lon o t t uarter was 235 quarter, Still q SF first this 4321 315 y the at as of ll SF) onsolidating its back-office operations from a variety of downtown locati as ndustries should provide a baseline for further improvement in the Burnab s in perspective, only 27 tenants were being tracked in the Burnaby marke w Street which are 50,000 SF, 173,000 SF and 170,000 SF, respectively. Ivanho ng from a variety of sizes. As of the first quarter of 2012, 58 tenants in th % which indicates tha ing and technology sectors, which comprise a majority of the tenant base 298 2012 include Fraser Health Authority ( uarter of 2012 and as in previous quarter , 3 , uilding 4 (2910 Virtual Way) brought 173,000 SF of new supply to the market t . tion in Burnab 21 ( p 11 including the third phase of 3555 Gilmore Way, the last phase (Building 6) rom as sma f of rate Associates es range i ace on the market p vacancy tion with 411,000 SF of office availability on a speculative basis. Golder uarter. Total absor q and as Navigata Communications (3555 Gilmore Way), Ke e occupanc overall , th e an Drive Whil With . . lease deals this 332 SF of sublease s , w 2012 Wayburne ne n i g has 8 buildings y A 3001 letin onl p pg at y and ng space com i SF) y) AAA 772 , swa g gy) Q409 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 e occupy 23 Class ( b s -term. Burnab ’ ill g w t e 4720 Kin EXP Engineering leased 23,772 SF at 3001 Wayburne Drive Keystone Environmental renewed 14,872 SF at 4400 Dominion Street GT Hiring Solutions leased 10,393 SF at 1901 Rosser Avenue ( kt k 5% 0% 15% 10% 25% 20% 2010 when the vacancy rate reached 17.9%. Upcoming major occupancies in quarter. Broadway Tech Building is currently 100% leased by HSBC which is c Tech Centre at 2920 Virtual Way andCambridge’s Metrotower Renfrew III Business project Centre remains at under construc 2665 Renfre Looking forward, a steady economic environment among mining and resource i renewed leasing activity led by expansions and new headlease deals. To put thi In terms of construction activity, the completion of Broadway Tech Centre B Hill BURNABY The Burnaby office market continuedsubmarket to s record strong demand incontinues the to first absorb excess q space on the marketwere at the a most respectable active pace. this Engineer quarter with groups such A markets at 217,946 SF and 29,301 SF, respectively. Leasing activity has been fairly balanced in Burnaby, with tenant demand comi Engineering Burnaby –(All Classes) Rate Vacancy Market Significant Transactions • Additionally, several projects in Burnaby remain available for pre-lease, mar • • in the lon market in 2012. Employment growth among these sectors should help the market to realize more demand, while declining vacancy should spur rental rate g

MarketView Metro Vancouver Office First Quarter 2012 t s Page 4 F tood vices rity of end of strata- ncy rate available buildings he overall overnmen sAmarket hmond has g of increased to ftheborder. for pheral areas. © 2012 CBRE Limited © 2012 , cording strong SF % 60 . 000 , 23 as well as 10 to , packages. Richmond has s t p uarter of 2011 q move rou g gp, gy compared , helped % 35 . 3 is transactions quarter. Both Containers Phase I and Central have t Station Avenue experienced a surge of activity in January and th smaller Line of s decrease to 16.8% in the fourth financial services and technolo p Canada a number A of . a 420 b m G-III Apparel leased 10,195 SF at 13551 Commerce Parkway DemonWare subleased 7,181 SF at 396 Terminal Avenue g 500 quarter d at 369 Terminal Avenue this quarter including DemonWare taking a 7,181 S sactions in the 5,000 SF to 10,000 SF range. The Class B market witnessed the • • . Most of the deals this quarter were smaller (2,000 SF or less), but this i ostin et remained unchanged and at a historic high of 39.5%. Overall absorption s accounting for over 18,000 SF of leasing volume, while Virtualink and Ser p pg tivity continues to be soft for a market that has maintained an overall vaca s 2,500 SF. Quarterly absorption was 42,264 SF of positive space, the majo within is present (Broadway Corridor, Burnaby, Surrey and New Westminster), Ric nce the recession, with demand from the small-sized user market helping t vacancy rate fell 260 bps from last quarter of 21.0% and similar to the Clas second n suppressed leasing demand due to continued economic challenges south o ll, Broadway Central is expected to be under construction this fall after re as the Neelu Bachra Centre, but now offers up to 80,000 SF of office space on a ,after y 2012, dropping only 10 bps to 21.3%. After seeing a surge in activity toward the the tenants looking to take advantage of flexible pricing and inducemen in buildings for Avenue th 8 rates t Broadway ears to 4.8%. Renewed demand from y West vacancy 1385 Wes t 1285 of uarters. The Class AAA vacanc overall time in three q t SF that 277 SF a , 636 , 15 reveals projects continue to be under construction in the Broadway Corridor as of the firs t 5.0% for the firs seven consecutive t analysis combined w , a belo p quarter occupy Elizabeth Health renewed 7 first t rate di will y the Public Works Canada and Government Services leased 10,430 SF at 1285 West Broadway Sain PCL Constructors renewed 24,665 SF at 13911 Wireless Way of vacanc understandable given that the average tenant size in the Broadway Corridor i which was concentrated in the Class B office market with 30,349 SF. BROADWAY CORRIDOR BROADWAY The Broadway Corridor witnessed the strongest quarter of market activity si users, drove a majority of the leasing activity up over the past several months Deal activity over the first quarter was driven by activity within a handfulCanada of office buildings. 1385 West 8 space off the market at 333 Terminal Avenue, while 17,794 SF of space was lease Anumberofdevelopmen sale basis. Significant Transactions • • RICHMOND Richmond posted virtually no change in vacancy2011, over the the market first was quarter relatively of slow atabove the 20% for beginning the of las the year. Leasing18.2% ac while the Class A vacancy decreasedstrongest 100 quarter bps of to leasing 21.9% activity led among by asset several classeswas tran in driven Richmond by as deals in the the 5,000 SFat to positive 10,000 4,849 SF SF, size reflecting category. minimal changes The to Class leasing C fundamentals mark over theA past trend three in months. Richmond has been the starkAs difference in vacancy rates between buildings located alongoutside the that No.3 range. road Compared corridor to and other buildings located suburbanthe in markets largest peri where difference rapid in vacancy transit between rapid transit and non-rapid transit-oriented officeWe buildings. expect Richmond to remain a favourable option for price-sensitive Significant Transactions • sublet availability in that building. As of late, the U.S. economy is showing signs of recovery and if it continues, should bode well for the Richmond office market. been historically tied to technology and U.S. firms and accordingly, has see February with Saint Elizabeth Health, Lean Sensei, Sora Group and Zymeworks officially broken ground and are in the early stages of construction. As we sales activity. Broadway Central was formerly being marketed for prelease MarketView Metro Vancouver Office First Quarter 2012 Page 5 e o t his the t EXP ons. rowth CH2M market tinQ1 yoffice amen t e Burnaby the © 2012 CBRE Limited © 2012 in Burnaby, es of Broadway , ttt t a d 2009 uirements. q of or an t ca ace re p di n idit i quarter ve their s iti of which was in the Class AAA and g t second apos mos the s, was led by leasing activity within – till er reducin ss g i 156,399 SF) at 1795 Willingdon Avenue, since it , 812 SF , . SF lowest Drive 399 ystone Environmental (4400 Dominion Street) and the , 156 Creek tenants are no lon o t t uarter was 235 quarter, Still q SF first this 4321 315 y the at as of ll SF) onsolidating its back-office operations from a variety of downtown locati as ndustries should provide a baseline for further improvement in the Burnab s in perspective, only 27 tenants were being tracked in the Burnaby marke w Street which are 50,000 SF, 173,000 SF and 170,000 SF, respectively. Ivanho ng from a variety of sizes. As of the first quarter of 2012, 58 tenants in th % which indicates tha ing and technology sectors, which comprise a majority of the tenant base 298 2012 include Fraser Health Authority ( uarter of 2012 and as in previous quarter , 3 , uilding 4 (2910 Virtual Way) brought 173,000 SF of new supply to the market t . tion in Burnab 21 ( p 11 including the third phase of 3555 Gilmore Way, the last phase (Building 6) rom as sma f of rate Associates es range i ace on the market p vacancy tion with 411,000 SF of office availability on a speculative basis. Golder uarter. Total absor q and as Navigata Communications (3555 Gilmore Way), Ke e occupanc overall , th e an Drive Whil With . . lease deals this 332 SF of sublease s , w 2012 Wayburne ne n i g has 8 buildings y A 3001 letin onl p pg at y and ng space com i SF) y) AAA 772 , swa g gy) Q409 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 e occupy 23 Class ( b s -term. Burnab ’ ill g w t e 4720 Kin EXP Engineering leased 23,772 SF at 3001 Wayburne Drive Keystone Environmental renewed 14,872 SF at 4400 Dominion Street GT Hiring Solutions leased 10,393 SF at 1901 Rosser Avenue ( kt k 5% 0% 15% 10% 25% 20% 2010 when the vacancy rate reached 17.9%. Upcoming major occupancies in quarter. Broadway Tech Building is currently 100% leased by HSBC which is c Tech Centre at 2920 Virtual Way andCambridge’s Metrotower Renfrew III Business project Centre remains at under construc 2665 Renfre Looking forward, a steady economic environment among mining and resource i renewed leasing activity led by expansions and new headlease deals. To put thi In terms of construction activity, the completion of Broadway Tech Centre B Hill BURNABY The Burnaby office market continuedsubmarket to s record strong demand incontinues the to first absorb excess q space on the marketwere at the a most respectable active pace. this Engineer quarter with groups such A markets at 217,946 SF and 29,301 SF, respectively. Leasing activity has been fairly balanced in Burnaby, with tenant demand comi Engineering Burnaby –(All Classes) Rate Vacancy Market Significant Transactions • Additionally, several projects in Burnaby remain available for pre-lease, mar • • in the lon market in 2012. Employment growth among these sectors should help the market to realize more demand, while declining vacancy should spur rental rate g

MarketView Metro Vancouver Office First Quarter 2012 t s Page 4 F tood vices rity of end of strata- ncy rate available buildings he overall overnmen sAmarket hmond has g of increased to ftheborder. for pheral areas. © 2012 CBRE Limited © 2012 , cording strong SF % 60 . 000 , 23 as well as 10 to , packages. Richmond has s t p uarter of 2011 q move rou g gp, gy compared , helped % 35 . 3 is transactions quarter. Both Containers Phase I and Central have t Station Avenue experienced a surge of activity in January and th smaller Line of s decrease to 16.8% in the fourth financial services and technolo p Canada a number A of . a 420 b m G-III Apparel leased 10,195 SF at 13551 Commerce Parkway DemonWare subleased 7,181 SF at 396 Terminal Avenue g 500 quarter d at 369 Terminal Avenue this quarter including DemonWare taking a 7,181 S sactions in the 5,000 SF to 10,000 SF range. The Class B market witnessed the • • . Most of the deals this quarter were smaller (2,000 SF or less), but this i ostin et remained unchanged and at a historic high of 39.5%. Overall absorption s accounting for over 18,000 SF of leasing volume, while Virtualink and Ser p pg tivity continues to be soft for a market that has maintained an overall vaca s 2,500 SF. Quarterly absorption was 42,264 SF of positive space, the majo within is present (Broadway Corridor, Burnaby, Surrey and New Westminster), Ric nce the recession, with demand from the small-sized user market helping t vacancy rate fell 260 bps from last quarter of 21.0% and similar to the Clas second n suppressed leasing demand due to continued economic challenges south o ll, Broadway Central is expected to be under construction this fall after re as the Neelu Bachra Centre, but now offers up to 80,000 SF of office space on a ,after y 2012, dropping only 10 bps to 21.3%. After seeing a surge in activity toward the the tenants looking to take advantage of flexible pricing and inducemen in buildings for Avenue th 8 rates t Broadway ears to 4.8%. Renewed demand from y West vacancy 1385 Wes t 1285 of uarters. The Class AAA vacanc overall time in three q t SF that 277 SF a , 636 , 15 reveals projects continue to be under construction in the Broadway Corridor as of the firs t 5.0% for the firs seven consecutive t analysis combined w , a belo p quarter occupy Elizabeth Health renewed 7 first t rate di will y the Public Works Canada and Government Services leased 10,430 SF at 1285 West Broadway Sain PCL Constructors renewed 24,665 SF at 13911 Wireless Way of vacanc understandable given that the average tenant size in the Broadway Corridor i which was concentrated in the Class B office market with 30,349 SF. BROADWAY CORRIDOR BROADWAY The Broadway Corridor witnessed the strongest quarter of market activity si users, drove a majority of the leasing activity up over the past several months Deal activity over the first quarter was driven by activity within a handfulCanada of office buildings. 1385 West 8 space off the market at 333 Terminal Avenue, while 17,794 SF of space was lease Anumberofdevelopmen sale basis. Significant Transactions • • RICHMOND Richmond posted virtually no change in vacancy2011, over the the market first was quarter relatively of slow atabove the 20% for beginning the of las the year. Leasing18.2% ac while the Class A vacancy decreasedstrongest 100 quarter bps of to leasing 21.9% activity led among by asset several classeswas tran in driven Richmond by as deals in the the 5,000 SFat to positive 10,000 4,849 SF SF, size reflecting category. minimal changes The to Class leasing C fundamentals mark over theA past trend three in months. Richmond has been the starkAs difference in vacancy rates between buildings located alongoutside the that No.3 range. road Compared corridor to and other buildings located suburbanthe in markets largest peri where difference rapid in vacancy transit between rapid transit and non-rapid transit-oriented officeWe buildings. expect Richmond to remain a favourable option for price-sensitive Significant Transactions • sublet availability in that building. As of late, the U.S. economy is showing signs of recovery and if it continues, should bode well for the Richmond office market. been historically tied to technology and U.S. firms and accordingly, has see February with Saint Elizabeth Health, Lean Sensei, Sora Group and Zymeworks officially broken ground and are in the early stages of construction. As we sales activity. Broadway Central was formerly being marketed for prelease MarketView Metro Vancouver Office First Quarter 2012 Page 3 to ly. d their 9% 6% 3% 0% -3% on as market positive ortfolios the © 2012 CBRE Limited © 2012 released –a of inue as only 8 ines. Quarterly to a mixed-use as committe ng are necessary h 1Q12 Vacancy Rate most upper with T , . Street space ousser 4Q11 H ll Beatty properties u Bll B C AAA/A roving to 1.1% and 1.9%, respective 858 irm and f at Class B w continue to face constrained supply and strong SF a in l Absorption (SF) Absorption 3Q11 t a Class 894 h , t d 35 t quarter of 2012 and marked the beginning of a new among availability rst time after seven consecutive quarters of decl leased former department store at Pacific Centre mall in 2Q11 y announce l decreased concentrated Microsoft Relic Entertainment leased 27,200 SF at 1040 Hamilton Street recent is h • • offset ic market, landlords have begun shuffling tenants within their existing p hh h to which 1Q11 wing a 72,000 SF prelease by MNP LLP; 745 Thurlow, which has confirmed pre- en w of n in terms of pricing, most have been working closely with tenants to fill e Class AAA and Class A vacancy rate imp t where creative solutions such as floor reconfigurations and backfilli d he first quarter of 2012, capping off ten quarters of declining vacancy and 00,000 SF of office space to the market in 2014 and could be under constructi t ar helped Gd G 800 most ree , 626 SF, as a result of limited available space. This trend is expected to cont St t and a i which TELUS are being leased almost immediately as tenants 4Q10 d t quarter eorg Gi G t ;an market first Georgia lt es Wt W the the etrau of West to Tl T 520 y verall vacancy rate remained unchanged for the fi as t h 3Q10 a llac Fairview has unveiled plans to redevelop the cially underway in the downtown core as of the firs 401 art SF C c returned MCM h market both 000 d , cal Absorption and Vacancy the in 67 space on d in an C l 2Q10 ava ease exist ld l Ll L interest Class - SF pre- % SNC and 50 000 LLP B , a rom f 10 1Q10 Class upper T of above purchased 0 ousser H 300 200 100