Q3 2019 Office Submarket Report Chelsea New York Market Chelsea Office

OFFICE SUBMARKET REPORT

Submarket Key Statistics 2 Leasing 3 Rent 8 Construction 10 Sales 14 Sales Past 12 Months 16 Supply & Demand Trends 18 Rent & Vacancy 20 Sale Trends 22

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Overview Chelsea Office

12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth 295 K (94.8 K) 7.2% 1.3%

Chelsea, like most of the Midtown South area, has by the NYC Economic Development Corporation, tech undergone a transformation since the start of the cycle firms are projected to account for nearly 30% of as tech firms have flocked to the area. Although demand incremental office-space demand in New York through has been inconsistent in Chelsea this cycle, it has been 2025—a greater share than any industry except particularly impressive over the past 18 months as healthcare. With its generous stock of pre-war industrial positive absorption was recorded in five of the past six buildings, Chelsea is poised to continue capitalizing on quarters. As a result, vacancies have taken a plunge and demand from tech firms willing to pay up for space with now sit below their historical average as of 19Q3. Net character. absorption has been more consistent for 4 & 5 Star inventory than lower-rated properties, with the flight to Chelsea’s rent growth in this cycle ranks in the top five of quality trend permeating throughout . all New York submarkets, but performance has declined Occupancies have also been helped by limited supply more recently as the glut of underway projects has additions in this cycle. In fact, most construction activity limited rent growth across the metro, especially in has centered on office demolitions and conversions and Manhattan submarkets. Rents losses appear to have the inventory has declined since the start of this cycle. A stopped through three quarters of 2019, as robust few projects are underway, but most impending supply- demand from tech firms should keep rents stable moving driven pressure will come from developments in nearby forward. submarkets. Increased tenant interest has been a boon for the Tech and creative tenants are the centerpieces of submarket as investment volume has surpassed $1 Chelsea’s demand story as numerous TAMI (tech, billion in most years of the cycle. Sales boomed in 2018, advertising, media and information services) firms have reaching about $4 billion—fueled by ’s March taken space here lately. Google expanded in 2015 at acquisition of Chelsea Market for $2.4 billion. Google’s both 85 Tenth Ave. and 75 9th Ave., and will take expansion plans did not end there, as the tech company 260,000 SF at RXR and Young Woo’s SuperPier. The paid nearly $600 million to purchase the adjacent Milk tech giant recently purchased the Milk Building at 450 W Building in May, which has helped sales volume reach 15th Street in 19Q2, with plans to immediately occupy $1 billion as of 19Q3. more than 100,000 SF. According to a study published

KEY INDICATORS

Net Absorption Under Current Quarter RBA Vacancy Rate Market Rent Availability Rate Deliveries SF SF Construction 4 & 5 Star 8,477,134 10.3% $86.30 8.1% 6,675 0 336,893 3 Star 33,429,778 6.3% $60.89 9.6% (139,604) 0 0 1 & 2 Star 2,563,694 8.4% $77.98 9.4% (5,155) 0 0 Submarket 44,470,606 7.2% $66.86 9.3% (138,084) 0 336,893

Historical Forecast Annual Trends 12 Month Peak When Trough When Average Average Vacancy Change (YOY) 0.8% 7.1% 6.5% 11.2% 1994 Q4 2.9% 2000 Q2 Net Absorption SF (94.8 K) (12,625) 29,321 1,325,281 1998 Q1 (2,372,852) 2001 Q4 Deliveries SF 295 K 76,498 128,660 508,980 2018 Q4 0 2015 Q3 Rent Growth 1.3% 6.8% 1.1% 35.7% 2000 Q4 -22.5% 2003 Q1 Sales Volume $2.3 B $969.3 M N/A $4.9 B 2011 Q3 $7.9 M 1995 Q2

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 2 Leasing Chelsea Office

Since the start of the cycle, submarkets in Midtown by taking large blocks of space as evidenced by the South have transformed due to heavy interest from TAMI 220,000 SF lease at 620 Avenue of the Americas in tenants. The Chelsea submarket, in particular, has seen 19Q2—the neighborhoods largest new lease of the year. demand driven by some of the world's largest tech firms. Since 2018, the coworking firm has added four locations Google, for example, has had its Chelsea footprint grow sized above 50,000 SF. As vacancies have declined in to nearly 1.5 million SF, with no signs that its expansion the submarket, WeWork has opted to add more mid- will slow. The tech giant has already committed to sized locations for its HQ platform which aims to offer occupying the full 260,000-plus SF of office space at full-floor opportunities to growing companies. RXR and Youngwoo & Associates’ SuperPier when it delivers in 2019. With plans to double its NYC headcount While the submarket has done well with companies over the next ten years, Google has started purchasing looking for small, pre-war spaces, it could struggle to assets in the submarket as opposed to leasing them attract companies in the market for large continuous directly from landlords. In March 2018, Google, office blocks. Only half a dozen existing properties have purchased the 1.2 million SF Chelsea Market for $2.4 available blocks comprising more than 50,000 SF, and billion which followed the nearly $600 million purchase of the only sizable construction project underway is fully the adjacent Milk Building in May 2019—with plans to pre-leased to Google. Both Spotify and Mediaocean slowly move into space as leases in the building expire in recently left Chelsea for Lower Manhattan, as the the next few years. submarket could not satisfy their expansion needs. With that said, if large spaces in desirable assets do come As Google has assembled its massive campus, it has online, they will likely attract heavy interest as demand attracted other tech firms to the submarket. In one of the continues to outpace supply. largest Chelsea deals signed in 2019, Yext signed a 146,000 SF lease at 61 9th Avenue in April. The tech The submarket’s residential boom has also been a company paid a premium, above $90/SF, to secure one benefit to the office market. More than 3,500 rental units of the few desirable large blocks of available space in have been built here since 2014, and multifamily projects the submarket—a necessity for a company that is aiming under construction are expected to add another 500 units to add 500 employees in the coming years. The in the coming years. The area’s cultural amenities, abundance of TAMI tenants interested in Chelsea has including the and the Whitney Museum, are a helped push vacancies down considerably since the end draw, as is the desire of many New Yorkers to live close of 2017. to work. Accordingly, the number of households in Chelsea has grown by approximately 13% over the past As interest has risen from creative tenants, coworking five years—more than three times the metro average. As firms have added more locations in the submarket in an C-Suite executives have moved into Chelsea’s wildly effort to appeal to growing occupiers who do not have popular Meatpacking District, their desire to be able to the room to expand in their current building, but wish to walk to work has been the driving force for relocations remain in the submarket. WeWork, whose headquarters into the submarket. are in Chelsea, has been the most active of these firms

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 3 Leasing Chelsea Office

NET ABSORPTION, NET DELIVERIES & VACANCY

VACANCY RATE

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 4 Leasing Chelsea Office

AVAILABILITY RATE

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 5 Leasing Chelsea Office

4 & 5 STAR MOST ACTIVE BUILDINGS IN SUBMARKET - PAST 12 MONTHS

Property Name/Address Rating RBA Deals SF Vacancy (QTD) Net Absorption SF (QTD) Chelsea Arts Tower (CAT) 88,599 2 11,280 22.9% 4,200 543-545 W 25th St 512W22 175,000 4 30,646 98.6% 2,475 512 W 22nd St 40 Tenth Ave 156,938 3 42,106 62.4% 0

156 Fifth Avenue 220,000 3 35,700 10.8% 0 156 Fifth Ave 12 W 21st St 63,870 2 10,548 8.3% 0

541 W 25th St 8,305 2 8,305 31.9% 0

412 W 15th St 144,273 6 80,998 46.0% 0

31-37 W 27th St 145,856 5 62,691 26.8% 0

High Line Building 105,000 4 31,886 0% 0 450 W 14th St 275 Seventh Ave 729,714 4 57,005 10.5% 0

61 9th Ave 167,170 1 145,741 87.2% 0

521-531 W 25th St 46,897 1 2,000 16.1% 0

30 W 26th St 97,900 1 4,356 0% 0

245 W 17th St 149,577 1 147,877 0% 0

16 W 23rd St 11,500 1 2,500 21.7% 0

1165 Broadway 41,095 1 1,415 14.4% 0

625 Avenue of the Americas 160,000 1 35,156 22.0% 0

249 W 17th St 131,717 1 72,000 0% 0

90 Fifth Ave 138,211 1 10,498 0% 0

675 Avenue of the Americas 311,000 1 28,687 0% 0

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 6 Leasing Chelsea Office

3 STAR MOST ACTIVE BUILDINGS IN SUBMARKET - PAST 12 MONTHS

Property Name/Address Rating RBA Deals SF Vacancy (QTD) Net Absorption SF (QTD) 127 W 26th St 95,000 7 25,812 0% 4,204

Spero Bldg 130,000 6 17,600 11.3% 1,945 19 W 21st St 37-43 W 26th St 129,905 7 5,800 0.8% 0

146 W 29th St 82,454 7 11,486 7.7% 0

345 Seventh Ave 180,000 6 25,275 2.4% 0

242 W 30th St 112,500 6 9,230 5.2% 0

307 Seventh Ave 190,000 10 20,025 3.9% 0

547 W 27th St 107,343 9 11,423 34.0% 0

20 W 22nd St 175,270 8 18,353 3.0% 0

153 W 27th St 106,920 8 16,808 5.8% 0

St. James Building 174,764 17 17,330 1.6% (456) 1133 Broadway 352 Seventh Ave 131,000 10 20,973 16.0% (481)

121-127 W 27th St 110,000 11 22,324 2.0% (1,010)

104 W 27th St 72,000 6 14,200 12.5% (1,500)

Chelsea Office 96,000 6 7,850 3.0% (1,500) 135-139 W 29th St 80-90 Eighth Ave 185,198 11 36,128 5.4% (1,950)

350 Seventh Ave 172,385 12 20,415 7.9% (3,350)

152 W 25th St 72,000 7 28,778 15.9% (6,253)

276 Fifth Ave 199,578 8 29,478 3.7% (7,398)

Starrett-Lehigh Building 2,300,000 13 139,102 19.1% (34,609) 601 W 26th St

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 7 Rent Chelsea Office

In this cycle, rent growth in Chelsea has outperformed have finally stopped, however, with very slight gains that of every other New York submarket of comparable recorded as of 19Q3. size. Only the significantly smaller Midtown South submarkets of Gramercy, Greenwich Village, and As vacancies remain tight in Chelsea, average rents for Hudson Square have fared better. quality assets in the submarket rank near the top of the metro. Tenants who have signed leases before the Despite the early cycle gains, the submarket has not Chelsea office boom could pass up properties here for been immune from rent losses experienced across the locations in Brooklyn and Queens. Chelsea’s asking metro over the last three years. In fact, Chelsea has rents exceed the averages in Downtown Brooklyn and experienced more rent losses than most as rents have Long Island City by about 30% and 50%, respectively. declined by more than 4% since 2016 compared to the Moreover, buildings in Brooklyn and Queens have the flat performance in metrowide rents over the same span. advantage of being able to offer prospective tenants New York is in the midst of a large supply wave that will incentives such as the REAP tax benefit, which can add about 20 million SF to the market across 2018-20. significantly defray leasing costs. Submarkets in Lower With tenants focusing on relocating to new supply, Manhattan have especially reaped the benefits of rising competition has especially intensified in submarkets not rents in Chelsea, and Midtown South overall, as creative seeing much construction, making it harder for landlords firms relocating south has played a major role in to push rents upward. Rent losses have appeared to transforming the Downtown market.

MARKET RENT GROWTH (YOY)

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 8 Rent Chelsea Office

MARKET RENT PER SQUARE FOOT

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 9 Construction Chelsea Office

RThough now considered one of the most in-demand delivery to Roc Nation and the World School at rents just office nodes in the country, the Chelsea submarket was north of $100/SF. With limited land opportunities, not viewed by developers as a desirable location for redevelopment opportunities have arisen and have thus much of its history. Even early on in the current cycle, far been successful as evidenced by the conversion of the submarket demolished more office inventory than it 430 W 15th from a garage to a 98,000 SF office. The delivered as owners flocked to building more multi-family building was able to fully lease to a single tenant, Live projects. As the neighborhood started to mature as an Nation, in under a year at rents starting at $100/SF. office destination due to an influx of tech companies, developers took notice and construction activity started to Today, only one notable project is currently under ramp up near the end of 2015. Developer sentiment had construction, the SuperPier at Pier 57. RXR and Young changed due to limited supply and increased demand, Woo’s waterside project measures 264,000 SF and is set the area's vicinity to major attractions like the High Line to house a 70,000 SF outpost of City Winery on the and Meatpacking District coupled with a flourishing ground floor. With the entirety of the office component condo market that housed C-suite executives who would already pre-leased to Google, the submarket faces no rather walk to work. immediate threat of oversupply when the building delivers in 19Q3. Starting in 16Q3, the submarket started experiencing sizable deliveries. Much of the construction activity Perhaps the reason there has not been more differed greatly from the towers rising in Hudson Yards construction, outside of limited opportunities to develop, and World Trade Center. Of the seven projects to have is that some recent deliveries still have sizable delivered in the past three years, all have been boutique availability. Vornado Realty Trust's 174,000 SF project in nature; measuring under 200,000 SF and with directly adjacent to the High Line on 512 W 22nd Street floorplates sized at roughly 15,000 SF. The ground-up is still unoccupied despite delivering in 2018. The same projects all featured similar design aesthetics as well; notion goes for Wiliam Gottlieb Real Estate's asset on 40 with floor to ceiling glass and an abundance of natural . The 157,000 SF building which delivered light. in 19Q1, has witnessed only two office floors lease as of 19Q3. With the economy this far into the cycle, perhaps The first project to have delivered was Romanoff tenants are a bit more hesitant to pay rents in the triple Equities' 860 Washington Street. By being first, the 10- digits and developers are staying put as a result.With story 120,000 SF property located near the High Line land opportunities limited, renovations have become was able to capitalize on the pent-up tenant demand, more popular in Chelsea, with several projects currently taking less than two years to fully lease the asset to a underway. The most notable is taking place at 150 Fifth variety of tenants from tech companies like Alibaba to Avenue. L&L Holdings committed to a top-to-bottom hedge funds like Baker Brothers Investments. Even more renovation of the 232,000 SF asset in order to obtain a impressive were the rental rates achieved, which ranged future commitment from Mastercard for the entirety of the from $130-$150/SF. building. The 11-story building will feature multiple landscaped rooftop terraces, an upgraded elevator Other recent deliveries which have performed well system, a redesigned lobby, and more open floorplans. include Savanna's office building at 540 W 26th Street. The project topped out in 19Q2 and is expected to be The 167,000 SF asset became fully leased not long after completed at the end of 2019.

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 10 Construction Chelsea Office

DELIVERIES & DEMOLITIONS

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 11 Construction Chelsea Office

All-Time Annual Avg. SF Delivered SF Past 4 Qtrs Delivered SF Next 4 Qtrs Proposed SF Next 4 Qtrs 39,600 156,938 336,893 0

PAST 4 QUARTERS DELIVERIES, UNDER CONSTRUCTION, & PROPOSED

PAST & FUTURE DELIVERIES IN SQUARE FEET

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 12 Construction Chelsea Office

RECENT DELIVERIES

Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner 40 Tenth Ave Aurora Capital Associates 1 156,938 10 Sep-2017 Mar-2019 William Gottlieb Real Estate 61 9th Ave Aurora Capital Associates 2 167,170 10 Aug-2016 Oct-2018 Vornado Realty Trust

UNDER CONSTRUCTION

Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner Pier 57 AKA SuperPier RXR Realty 1 263,835 4 May-2016 Dec-2019 57 11th Ave The Port Authority of New York a… 76 8th Ave - 2 36,546 12 Oct-2018 Nov-2020 Chun Woo Realty Corp 500 W 17th St - 3 36,512 12 Sep-2017 Jul-2020 Property Markets Group, Inc.

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 13 Sales Chelsea Office

The Chelsea submarket has witnessed impressive sales history. In May 2019, Google continued its expansion in volume over the past 18 months during a time that the submarket with the purchase of the Milk Building at investment activity in Manhattan is widely considered to 450 W 15th Street for nearly $600 million, or $1,821/SF . be no longer at its 2015-2016 peak, with the fleeing of The building is connected to Chelsea Market via a Chinese investors in the market. Assets in the submarket bridge, thus making it an ideal asset to acquire as the are highly desirable as investors aim to take advantage tech giant announced plans to double its headcount over of healthy fundamentals, with rents for quality office the next ten years. buildings peaking as vacancies have compressed with supply not able to keep up with demand. While volume One of the largest single asset deals of 2017 was the has topped $1 billion in most years, a total of $4.2 billion January purchase of 42 W by The New has traded hands in 2018 to lead all New York School for $153 million ($823/SF). The school plans on submarkets. This momentum has carried over this year ultimately utilizing the entire 186,000 SF 3 Star asset and with $1 billion worth of investment as of 19Q3. With will begin moving into the building when the first leases strong economic drivers, average pricing has more than roll in ten years. Another significant deal was the three- doubled in this cycle. Cap rates have hovered around property portfolio sale of 245-249 17th Street for $514.1 4% over the last several years. million or $1,145/SF. Atlanta-based Columbia Property Trust purchased the fully leased Class A properties from As creative users look to plant their flag in the market, New York REIT in October 2017. At the time of the sale, they find it difficult as major tech firms like Google and the buildings had notable tenants such as Twitter and Facebook are aiming to expand their already massive Red Bull. footprint. It’s this interest that has driven activity in the past 18 months as Google has opted to purchase the In the submarket’s largest deal of 2016, AFIAA U.S. buildings they wish to occupy instead of leasing it directly Investment purchased the newly repositioned asset at with a landlord. In March 2018, one of the largest trades 125 West 25th St. from Normandy Real Estate Partners of the cycle occurred. Google purchased the 1.2 million- for $150 million—nearly triple what Normandy paid for SF Chelsea Market for almost $2.4 billion, well above the the asset in a foreclosure sale three years earlier. $800 million valuation Jamestown paid for the property. Normandy invested $20 million in capital upgrades, Jamestown purchased a partial interest in the asset in which were specifically geared to improve the property’s 2003 and again in 2011. What was once the building for appeal among tech and creative tenants. Thus far, the the National Biscuit Company that sold in 1999 for $27.6 repositioning appears to have been a success, with million is now one of the priciest sales in New York's WeWork leasing 58,000 SF the following year.

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 14 Sales Chelsea Office

SALES VOLUME & MARKET SALE PRICE PER SF

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 15 Sales Past 12 Months Chelsea Office

Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale 26 3.6% $899 1.4%

SALE COMPARABLE LOCATIONS

SALE COMPARABLES SUMMARY STATISTICS

Sales Attributes Low Average Median High Sale Price $6,321,139 $138,697,967 $39,500,000 $880,000,000

Price Per SF $286 $899 $814 $6,902

Cap Rate 3.0% 3.6% 3.6% 4.2%

Time Since Sale in Months 1.8 6.2 5.1 11.8

Property Attributes Low Average Median High Building SF 8,305 155,818 67,682 1,200,000

Stories 2 8 6 13

Typical Floor SF 2,718 18,270 9,075 133,333

Vacancy Rate At Sale 0% 1.4% 0% 10.7%

Year Built 1891 1914 1911 1950

Star Rating 3.1

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 16 Sales Past 12 Months Chelsea Office

RECENT SIGNIFICANT SALES

Property Sale

Property Name - Address Rating Yr Built Bldg SF Vacancy Sale Date Price Price/SF Cap Rate Terminal Stores 1 - 1912 1,200,000 0% 10/23/2018 $880,000,000 $733 - 261-271 Eleventh Ave The Milk Building 2 - 1936 325,000 2.6% 5/22/2019 $591,800,000 $1,821 - 450 W 15th St 160 Fifth Ave 3 - 1892 122,328 0% 12/20/2018 $180,750,000 $1,478 -

430 W 14th Street 4 - 1900 70,766 0% 4/30/2019 $129,500,000 $1,830 - 875 Washington St 48 W 25th St 5 - 1920 124,800 0% 12/12/2018 $90,000,000 $721 3.0%

675 Avenue of the Ameri… 6 - 1901 311,000 0% 5/17/2019 $89,000,000 $286 -

511 W 25th St 7 - 1917 93,000 4.4% 5/23/2019 $69,267,562 $784 -

555 W 25th St 8 - 1891 51,301 0% 3/28/2019 $43,300,000 $844 4.2%

155 W 23rd St 9 - 1911 82,104 10.7% 8/21/2019 $39,500,000 $481 -

535 W 25th St 10 - 1910 51,800 0% 5/23/2019 $37,736,327 $767 -

521-531 W 25th St 11 - 1910 46,897 9.1% 5/23/2019 $34,929,472 $784 -

28-30 W 22ND St 12 - 1907 35,461 0% 11/28/2018 $31,500,000 $888 -

The Getty 13 - 2018 6,506 0% 12/31/2018 $29,000,000 $4,457 - 501-503 W 24th St Traffic Building 14 - 1931 20,958 0% 11/28/2018 $18,050,000 $861 - 163 W 23rd St COOP 15 - 1896 2,347 0% 12/17/2018 $16,200,000 $6,902 - 1-5 W 19th St 44 W 18th St 16 - 1906 211,871 0% 8/2/2019 $10,065,000 $969 -

Leasehold 17 - 1950 24,000 0% 5/9/2019 $9,500,000 $396 - 234 Fifth Ave 541 W 25th St 18 - 1910 8,305 0% 5/23/2019 $6,321,139 $801 -

115 W 29th St 19 - 1913 7,616 0.7% 6/26/2019 $6,200,000 $814 -

Chelsea Arts Tower (CAT) 20 - 2007 5,382 8.9% 3/11/2019 $4,800,000 $892 - 543-545 W 25th St

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 17 Supply & Demand Trends Chelsea Office

OVERALL SUPPLY & DEMAND

Inventory Net Absorption

Year SF SF Growth % Growth SF % of Inv Construction Ratio 2023 44,772,400 46,490 0.1% (198,487) -0.4% - 2022 44,725,910 12,886 0% (74,218) -0.2% - 2021 44,713,024 (44,236) -0.1% (88,876) -0.2% - 2020 44,757,260 286,654 0.6% 227,097 0.5% 1.3 2019 44,470,606 216,938 0.5% 192,473 0.4% 1.1 YTD 44,470,606 216,938 0.5% (325,384) -0.7% - 2018 44,253,668 508,980 1.2% 1,095,690 2.5% 0.5 2017 43,744,688 144,273 0.3% (584,593) -1.3% - 2016 43,600,415 120,413 0.3% (294,553) -0.7% - 2015 43,480,002 (314,552) -0.7% 13,238 0% - 2014 43,794,554 (359,255) -0.8% (31,787) -0.1% - 2013 44,153,809 (336,626) -0.8% (703,097) -1.6% - 2012 44,490,435 (283,434) -0.6% 139,778 0.3% - 2011 44,773,869 40,160 0.1% 830,179 1.9% 0 2010 44,733,709 (206,083) -0.5% (312,321) -0.7% - 2009 44,939,792 38,973 0.1% (225,178) -0.5% - 2008 44,900,819 (91,106) -0.2% (501,298) -1.1% - 2007 44,991,925 255,046 0.6% (433,969) -1.0% -

4 & 5 STAR SUPPLY & DEMAND

Inventory Net Absorption

Year SF SF Growth % Growth SF % of Inv Construction Ratio 2023 8,981,104 97,527 1.1% 30,388 0.3% 3.2 2022 8,883,577 63,207 0.7% 36,379 0.4% 1.7 2021 8,820,370 6,343 0.1% 147,985 1.7% 0 2020 8,814,027 336,893 4.0% 400,748 4.5% 0.8 2019 8,477,134 156,938 1.9% 28,305 0.3% 5.5 YTD 8,477,134 156,938 1.9% (125,789) -1.5% - 2018 8,320,196 508,980 6.5% 464,765 5.6% 1.1 2017 7,811,216 144,273 1.9% 95,285 1.2% 1.5 2016 7,666,943 120,413 1.6% 39,548 0.5% 3.0 2015 7,546,530 98,087 1.3% 133,238 1.8% 0.7 2014 7,448,443 0 0% 91,279 1.2% 0 2013 7,448,443 0 0% (138,622) -1.9% - 2012 7,448,443 0 0% (61,102) -0.8% - 2011 7,448,443 105,000 1.4% 433,410 5.8% 0.2 2010 7,343,443 (201,168) -2.7% (127,515) -1.7% - 2009 7,544,611 0 0% 210,752 2.8% 0 2008 7,544,611 0 0% (6,051) -0.1% - 2007 7,544,611 291,099 4.0% (422,897) -5.6% -

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 18 Supply & Demand Trends Chelsea Office

3 STAR SUPPLY & DEMAND

Inventory Net Absorption

Year SF SF Growth % Growth SF % of Inv Construction Ratio 2023 33,429,778 0 0% (172,778) -0.5% - 2022 33,429,778 0 0% (63,771) -0.2% - 2021 33,429,778 0 0% (183,175) -0.5% - 2020 33,429,778 0 0% (114,195) -0.3% - 2019 33,429,778 60,000 0.2% 198,999 0.6% 0.3 YTD 33,429,778 60,000 0.2% (171,999) -0.5% - 2018 33,369,778 0 0% 675,729 2.0% 0 2017 33,369,778 0 0% (648,193) -1.9% - 2016 33,369,778 0 0% (312,657) -0.9% - 2015 33,369,778 (376,105) -1.1% (157,676) -0.5% - 2014 33,745,883 (334,561) -1.0% (84,091) -0.2% - 2013 34,080,444 (329,546) -1.0% (528,805) -1.6% - 2012 34,409,990 (317,934) -0.9% 164,585 0.5% - 2011 34,727,924 (42,340) -0.1% 408,300 1.2% - 2010 34,770,264 0 0% (161,215) -0.5% - 2009 34,770,264 82,482 0.2% (394,304) -1.1% - 2008 34,687,782 (85,813) -0.2% (448,018) -1.3% - 2007 34,773,595 0 0% 11,266 0% 0

1 & 2 STAR SUPPLY & DEMAND

Inventory Net Absorption

Year SF SF Growth % Growth SF % of Inv Construction Ratio 2023 2,361,518 (51,037) -2.1% (56,097) -2.4% - 2022 2,412,555 (50,321) -2.0% (46,826) -1.9% - 2021 2,462,876 (50,579) -2.0% (53,686) -2.2% - 2020 2,513,455 (50,239) -2.0% (59,456) -2.4% - 2019 2,563,694 0 0% (34,831) -1.4% - YTD 2,563,694 0 0% (27,596) -1.1% - 2018 2,563,694 0 0% (44,804) -1.7% - 2017 2,563,694 0 0% (31,685) -1.2% - 2016 2,563,694 0 0% (21,444) -0.8% - 2015 2,563,694 (36,534) -1.4% 37,676 1.5% - 2014 2,600,228 (24,694) -0.9% (38,975) -1.5% - 2013 2,624,922 (7,080) -0.3% (35,670) -1.4% - 2012 2,632,002 34,500 1.3% 36,295 1.4% 1.0 2011 2,597,502 (22,500) -0.9% (11,531) -0.4% - 2010 2,620,002 (4,915) -0.2% (23,591) -0.9% - 2009 2,624,917 (43,509) -1.6% (41,626) -1.6% - 2008 2,668,426 (5,293) -0.2% (47,229) -1.8% - 2007 2,673,719 (36,053) -1.3% (22,338) -0.8% -

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 19 Rent & Vacancy Chelsea Office

OVERALL RENT & VACANCY

Market Rent Vacancy

Year Per SF Index % Growth Vs Hist Peak SF Percent Ppts Chg 2023 $69.57 142 1.3% 1.0% 3,163,724 7.1% 0.5% 2022 $68.69 141 1.1% -0.3% 2,918,458 6.5% 0.2% 2021 $67.95 139 0.8% -1.4% 2,831,083 6.3% 0.1% 2020 $67.38 138 0.5% -2.2% 2,786,137 6.2% 0.1% 2019 $67.03 137 1.4% -2.7% 2,726,214 6.1% 0% YTD $66.86 137 1.2% -3.0% 3,186,571 7.2% 1.1% 2018 $66.10 135 0.3% -4.1% 2,704,249 6.1% -1.4% 2017 $65.89 135 -2.5% -4.4% 3,290,959 7.5% 1.6% 2016 $67.61 138 -1.9% -1.9% 2,565,754 5.9% 0.9% 2015 $68.91 141 7.5% 0% 2,150,788 4.9% -0.7% 2014 $64.12 131 7.6% -7.0% 2,478,578 5.7% -0.7% 2013 $59.61 122 12.5% -13.5% 2,806,046 6.4% 0.9% 2012 $53.01 109 15.7% -23.1% 2,439,575 5.5% -0.9% 2011 $45.81 94 10.9% -33.5% 2,862,787 6.4% -1.8% 2010 $41.30 85 -0.3% -40.1% 3,652,806 8.2% 0.3% 2009 $41.41 85 -15.2% -39.9% 3,546,568 7.9% 0.6% 2008 $48.83 100 -1.6% -29.1% 3,282,417 7.3% 0.9% 2007 $49.62 102 21.8% -28.0% 2,872,225 6.4% 1.5%

4 & 5 STAR RENT & VACANCY

Market Rent Vacancy

Year Per SF Index % Growth Vs Hist Peak SF Percent Ppts Chg 2023 $90.05 155 1.3% -4.3% 606,355 6.8% 0.7% 2022 $88.87 153 1.1% -5.6% 539,287 6.1% 0.3% 2021 $87.88 151 0.9% -6.6% 512,538 5.8% -1.6% 2020 $87.07 150 0.8% -7.5% 654,217 7.4% -1.0% 2019 $86.42 148 0.6% -8.2% 718,072 8.5% 1.4% YTD $86.30 148 0.4% -8.3% 874,644 10.3% 3.2% 2018 $85.94 148 -1.0% -8.7% 591,917 7.1% 0.1% 2017 $86.81 149 -1.6% -7.8% 547,702 7.0% 0.5% 2016 $88.19 152 -6.3% -6.3% 502,375 6.6% 1.0% 2015 $94.12 162 13.0% 0% 421,510 5.6% -0.5% 2014 $83.27 143 8.3% -11.5% 456,661 6.1% -1.2% 2013 $76.91 132 13.3% -18.3% 547,940 7.4% 1.9% 2012 $67.87 117 18.8% -27.9% 409,318 5.5% 0.8% 2011 $57.15 98 15.4% -39.3% 348,216 4.7% -4.5% 2010 $49.52 85 -4.0% -47.4% 676,626 9.2% -0.7% 2009 $51.60 89 -11.4% -45.2% 750,279 9.9% -2.8% 2008 $58.21 100 1.3% -38.1% 961,031 12.7% 0.1% 2007 $57.49 99 19.7% -38.9% 954,980 12.7% 9.3%

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 20 Rent & Vacancy Chelsea Office

3 STAR RENT & VACANCY

Market Rent Vacancy

Year Per SF Index % Growth Vs Hist Peak SF Percent Ppts Chg 2023 $63.24 141 1.3% 3.2% 2,318,336 6.9% 0.5% 2022 $62.44 139 1.0% 1.9% 2,145,558 6.4% 0.2% 2021 $61.79 138 0.8% 0.9% 2,081,787 6.2% 0.5% 2020 $61.30 137 0.4% 0.1% 1,898,612 5.7% 0.3% 2019 $61.07 136 1.7% -0.3% 1,784,417 5.3% -0.4% YTD $60.89 136 1.4% -0.6% 2,095,436 6.3% 0.5% 2018 $60.05 134 1.4% -2.0% 1,923,437 5.8% -2.0% 2017 $59.20 132 -2.9% -3.4% 2,599,166 7.8% 1.9% 2016 $60.95 136 -0.5% -0.5% 1,950,973 5.8% 0.9% 2015 $61.25 136 5.9% 0% 1,638,316 4.9% -0.6% 2014 $57.85 129 6.9% -5.6% 1,856,745 5.5% -0.7% 2013 $54.11 121 12.5% -11.7% 2,107,215 6.2% 0.6% 2012 $48.10 107 15.4% -21.5% 1,907,956 5.5% -1.3% 2011 $41.68 93 9.5% -32.0% 2,390,475 6.9% -1.3% 2010 $38.05 85 0.7% -37.9% 2,841,115 8.2% 0.5% 2009 $37.77 84 -15.9% -38.3% 2,679,900 7.7% 1.4% 2008 $44.89 100 -2.3% -26.7% 2,203,114 6.4% 1.1% 2007 $45.94 102 22.9% -25.0% 1,840,909 5.3% 0%

1 & 2 STAR RENT & VACANCY

Market Rent Vacancy

Year Per SF Index % Growth Vs Hist Peak SF Percent Ppts Chg 2023 $81.81 120 1.3% -2.2% 239,033 10.1% 0.4% 2022 $80.79 119 1.1% -3.5% 233,613 9.7% 0.1% 2021 $79.88 118 1.1% -4.5% 236,758 9.6% 0.3% 2020 $79.03 116 1.2% -5.5% 233,308 9.3% 0.6% 2019 $78.09 115 1.7% -6.7% 223,725 8.7% 1.4% YTD $77.98 115 1.6% -6.8% 216,491 8.4% 1.1% 2018 $76.77 113 -5.6% -8.2% 188,895 7.4% 1.7% 2017 $81.29 120 -2.9% -2.9% 144,091 5.6% 1.2% 2016 $83.67 123 1.9% 0% 112,406 4.4% 0.8% 2015 $82.11 121 2.7% -1.9% 90,962 3.5% -2.8% 2014 $79.94 118 11.2% -4.5% 165,172 6.4% 0.6% 2013 $71.90 106 9.0% -14.1% 150,891 5.7% 1.1% 2012 $65.97 97 8.6% -21.2% 122,301 4.6% -0.1% 2011 $60.75 89 9.7% -27.4% 124,096 4.8% -0.4% 2010 $55.39 82 3.0% -33.8% 135,065 5.2% 0.7% 2009 $53.79 79 -20.8% -35.7% 116,389 4.4% 0% 2008 $67.93 100 -3.7% -18.8% 118,272 4.4% 1.6% 2007 $70.56 104 18.5% -15.7% 76,336 2.9% -0.5%

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 21 Sale Trends Chelsea Office

OVERALL SALES

Completed Transactions (1) Market Pricing Trends (2)

Year Deals Volume Turnover Avg Price Avg Price/SF Avg Cap Rate Price/SF Price Index Cap Rate 2023 ------$972.39 204 4.2% 2022 ------$972.49 204 4.2% 2021 ------$975.96 205 4.1% 2020 ------$971.26 204 4.1% 2019 ------$950.50 200 4.1% YTD 19 $1,085 M 2.8% $96,447,227 $991.67 4.2% $947.26 199 4.1% 2018 21 $4,276 M 7.1% $331,841,825 $1,361.05 4.1% $885.31 186 4.2% 2017 19 $1,146 M 3.1% $81,017,185 $938.15 4.9% $872.52 183 4.1% 2016 27 $733.9 M 2.3% $44,374,833 $736.98 4.7% $865.15 182 4.1% 2015 32 $1,098 M 3.5% $74,467,857 $751.49 4.2% $864.06 181 4.1% 2014 44 $1,448 M 5.6% $48,940,592 $640.84 4.3% $772.68 162 4.2% 2013 32 $869.4 M 3.0% $33,550,580 $651.30 4.5% $699.27 147 4.4% 2012 51 $1,346 M 5.7% $58,829,313 $586.06 4.5% $610.77 128 4.7% 2011 29 $3,158 M 12.3% $222,027,840 $578.24 4.5% $554.39 116 5.0% 2010 18 $2,089 M 9.3% $330,392,744 $546.01 4.4% $464.65 98 5.6% 2009 8 $48.2 M 0.4% $1,995,877 $260.33 - $395.75 83 6.3% 2008 36 $488.9 M 2.3% $51,290,000 $537.05 3.0% $476.43 100 5.7% (1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period. (2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

4 & 5 STAR SALES

Completed Transactions (1) Market Pricing Trends (2)

Year Deals Volume Turnover Avg Price Avg Price/SF Avg Cap Rate Price/SF Price Index Cap Rate 2023 ------$1,213.03 208 3.7% 2022 ------$1,214.05 208 3.7% 2021 ------$1,222.27 209 3.6% 2020 ------$1,218.23 209 3.6% 2019 ------$1,189.45 204 3.6% YTD 5 $204.3 M 5.4% $49,879,543 $446.92 - $1,183.73 203 3.6% 2018 4 $638.7 M 4.8% $152,650,000 $1,589.74 5.0% $1,124.46 193 3.6% 2017 4 $458.7 M 5.7% $114,672,283 $1,038.49 4.8% $1,110.33 190 3.6% 2016 1 $135.0 M 1.3% $135,000,000 $1,376.33 4.8% $1,094.56 188 3.6% 2015 ------$1,150.44 197 3.5% 2014 7 $472.8 M 8.3% $118,193,750 $1,009.12 5.0% $950.89 163 3.7% 2013 ------$851.08 146 3.9% 2012 6 $140.8 M 7.7% $46,916,667 $329.51 5.5% $737.07 126 4.2% 2011 3 $719.5 M 11.6% $719,469,763 $838.67 3.9% $672.32 115 4.4% 2010 2 $1,770 M 41.9% $1,770,000,000 $605.77 3.4% $570.22 98 4.9% 2009 ------$486.46 83 5.5% 2008 4 $52.8 M 2.0% $48,750,000 $546.41 - $583.72 100 5.0% (1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period. (2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 22 Sale Trends Chelsea Office

3 STAR SALES

Completed Transactions (1) Market Pricing Trends (2)

Year Deals Volume Turnover Avg Price Avg Price/SF Avg Cap Rate Price/SF Price Index Cap Rate 2023 ------$886.75 205 4.4% 2022 ------$886.70 205 4.3% 2021 ------$888.96 206 4.3% 2020 ------$884.44 205 4.2% 2019 ------$866.87 201 4.2% YTD 13 $880.3 M 2.3% $123,057,332 $1,382.90 4.2% $864.44 200 4.2% 2018 11 $3,532 M 8.0% $569,759,009 $1,321.91 3.5% $799.12 185 4.3% 2017 12 $657.9 M 2.6% $80,804,234 $863.51 5.0% $785.65 182 4.3% 2016 23 $580.0 M 2.6% $38,373,000 $662.05 4.6% $781.09 181 4.2% 2015 27 $1,061 M 4.3% $91,422,727 $749.91 4.2% $767.77 178 4.2% 2014 31 $939.1 M 5.3% $45,117,832 $538.46 3.7% $705.64 163 4.3% 2013 27 $831.5 M 3.8% $38,154,029 $654.73 4.5% $642.36 149 4.5% 2012 35 $1,163 M 5.5% $92,623,240 $648.41 4.3% $561.16 130 4.9% 2011 19 $2,416 M 13.2% $296,027,208 $529.71 3.4% $506.91 117 5.2% 2010 13 $311.7 M 3.0% $51,464,116 $350.50 5.0% $422.11 98 5.8% 2009 5 $42.2 M 0.5% - $267.46 - $359.34 83 6.5% 2008 28 $415.4 M 2.4% $96,500,000 $528.19 3.0% $432.14 100 5.9% (1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period. (2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

1 & 2 STAR SALES

Completed Transactions (1) Market Pricing Trends (2)

Year Deals Volume Turnover Avg Price Avg Price/SF Avg Cap Rate Price/SF Price Index Cap Rate 2023 ------$1,261.20 184 4.2% 2022 ------$1,260.21 184 4.2% 2021 ------$1,263.16 184 4.1% 2020 ------$1,253.66 183 4.1% 2019 ------$1,219.08 178 4.1% YTD 1 $0 M 0.4% - - - $1,213.68 177 4.1% 2018 6 $105.6 M 3.5% $35,199,282 $1,547.11 3.5% $1,186.45 173 4.1% 2017 3 $29.1 M 1.4% $14,558,792 $1,649.35 - $1,187.10 173 4.0% 2016 3 $18.9 M 1.2% $13,768,000 $872.51 - $1,172.15 171 4.0% 2015 5 $36.9 M 3.4% $12,300,000 $799.88 - $1,134.45 166 4.0% 2014 6 $36.5 M 2.0% $7,300,000 $767.03 4.0% $1,033.79 151 4.1% 2013 5 $37.9 M 2.5% $10,533,333 $584.19 4.4% $919.19 134 4.4% 2012 10 $42.0 M 3.7% $6,002,286 $555.94 4.7% $823.19 120 4.6% 2011 7 $22.7 M 1.9% $4,140,467 $530.38 6.2% $767.72 112 4.9% 2010 3 $7.6 M 1.0% $6,500,000 $496.69 - $656.18 96 5.4% 2009 3 $6.0 M 1.0% $1,995,877 $219.14 - $558.37 82 6.1% 2008 4 $20.7 M 1.0% $7,350,000 $759.11 - $685.00 100 5.5% (1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period. (2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.

10/16/2019 Copyrighted report licensed to Okada & Company - 246101. Page 23