Quarterly Market Report

Northern Virginia Quarterly Market Report

1st Quarter 2019

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

Chris Dyson Table of Contents Senior Vice President [email protected] | 703.284.3633

Eamon McCrann Metropolitan D.C. Market Overview...... 3 Senior Vice President Northern Virginia Quarterly Overview...... 5 [email protected] | 703.284.5861

Northern Virginia Top Ten Leases...... 8 Jae Lee Senior Vice President Northern Virginia Sales Transactions...... 9 [email protected] | 202.513.6700

Stoddie Nibley Market Spotlight, 1Q 2019: Vice President [email protected] | 703.284.5884 Northern Virginia...... 10 Alexandria...... 12 Correll Caulfield Vice President Crystal City...... 14 [email protected] | 703.284.5886 Fairfax...... 16 Jed Prossner Loudoun County...... 18 Vice President [email protected] | 703.284.5864 Merrifield...... 20 Stoddie Nibley Old Town Alexandria / Eisenhower Avenue...... 22 Vice President Reston - Herndon...... 24 [email protected] | 703.284.5884

Rosslyn - Ballston Corridor...... 26 Luke Joyce Associate Vice President Route 28 North...... 28 [email protected] | 703.284.3376 Route 28 South...... 30 Mary Fitzgerald Springfield...... 32 Senior Associate [email protected] | 703.284.5881 Tysons Corner...... 34r 13 Jack Redmond Senior Associate [email protected] | 703.284.5880

Ben Hickey Leasing Associate [email protected] | 703.284.3364

Ben Gallucci Market Research Associate [email protected] | 703.284.3635

Sarah Casserly Market Research Associate [email protected] | 703.284.3354 2 Metropolitan D.C. Market Overview 1st Quarter 2019

Overall Market Summary

The Washington, DC Metropolitan commercial real estate market is comprised of approximately 420.9 million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. feet, broke ground; while four buildings, totaling 983,169 square feet, delivered. The largest addition The total vacancy rate remained flat at 14.0% at the was The Boro Tower - 8350 Broad Street delivering end of the first quarter, while the market recorded 438,169 square feet (73% leased) in Tysons, VA. -69,932 square feet of net absorption. Northern Virginia posted the only positive absorption with There were twenty-eight sale transactions in the 472,834 square feet absorbed in the first quarter. first quarter, totaling $1.31 billion. The largest sale was in the District with 2175 K Street, NW trading for Leasing activity for the quarter totaled 7.0 million $103,000,000 ($755 psf). square feet. The largest lease executed was a pre- lease by Fannie Mae for 724,820 square feet at Average asking rental rates increased $0.66 to $38.15 Reston Gateway Office Bldg A in Reston, VA. Amazon per square foot, Full Service. also executed leases totaling 534,957 square feet in National Landing (Crystal City, VA). From February 2018 - February 2019 the Washington, DC Metropolitan area had a net increase of 20,700 At the end of the quarter, there was 8,657,912 square jobs (18,300 private sector, 2,400 government) feet under construction, with 63% of the space pre- representing 0.6% growth YOY, however, the leased. Seven buildings, totaling 2,081,614 square unemployment rate increased to 3.5%.

Metro DC VA MD Area (YTD)

Direct Vacancy 11.0% 14.3% 13.1% 13.3% (1Q 2019)

Total Vacancy 11.7% 14.9% 13.8% 14.0% (1Q 2019)

Total Net Absorption -69,932 -296,704 472,834 -246,062 (YTD 2019) SF

Leasing Activity 2,634,502 2,977,268 1,338,620 7.0 M SF (YTD 2019)

Outlook

The Metropolitan Washington, DC office market Landing, during the first quarter 2019. The Seattle- had somewhat of a slow start to 2019. Total based, e-commerce leader is expected to have vacancy and leasing activity remained relatively a substantial boon to employment, leasing, flat compared to the fourth quarter 2018, and construction, infrastructure, housing, and higher absorption was negative for the market overall. education in Arlington and Alexandria. In the Northern Virginia, however, lead the DC Metro emerging submarkets of DC, large projects such in absorption (approx. 473,000 sf) and leasing as The Wharf Phase II (Southwest) and The Yards activity (approx. 3.0 million sf) lead by large (Capitol Riverfront) are expected to break ground signings by Fannie Mae, Amazon, and Northrop in 2019 and already have experienced strong pre- Grumman. Regional employment experienced leasing. As it concerns Government leasing, the 0.6% of growth YOY, however, the DC Metro GSA will continue reducing the federal real estate area’s unemployment rate increased to 3.5% footprint and begin to execute longer lease terms (the national average is 3.8%). The DC Metro was (15-20 year terms) while minimizing/eliminating ranked 17th nationally for unemployment in metro short-term extensions to reduce costs. Proximity areas with populations over 1 million. to Amazon and the new Metro stations for Phase II of the Silver Line in Virginia and the Purple Line Amazon is officially coming to Northern Virginia in Maryland should continue to be a catalyst for having executed approximately 535,000 square demand (leasing and sales). feet in leases, in three buildings in National

Market Summary

The Northern Virginia office market consists of 1Q 2019 4Q 2018 1Q 2018 1,535 buildings over 25,000 square feet, totaling approximately 187.0 million square feet of rentable space. Direct 14.3% 14.3% 15.1% The largest non-GSA lease signed during the first Vacancy quarter was a 724,820-square-foot pre-lease by Fannie Mae at Reston Gateway - Sunset Hills Road Total at Town Center Boulevard. 14.9% 15.0% 16.0% Vacancy The largest lease signed by the GSA was a 73,000-square-foot relet for the GSA-DEA at Net Crystal Plaza 4 - 2200 Crystal Drive. 472,834 1.4 M 467,607 Absorption SF SF SF (YTD) Building sales volume totaled over $271 million during the first quarter. The largest transaction was the sale of Commerce Metro Center III-V - 1850 Leasing Centennial Park Drive, 11400 and 11440 Commerce Activity 2.9 M SF 13.4 M SF 4.2 M SF Park Drive in the Reston-Herndon submarket. (YTD) Comstock acquired the buildings from JBG Smith for $115 million ($282 psf). The buildings were Under 2.6 M SF 1.8 M SF 2.7 M SF 87.0% occupied at the time of sale. The second Construction largest sale was of 2000 Duke Street in the Old Town & Eisenhower Ave submarket. The Shidler Group acquired the building from J.P. Morgan for Deliveries 438,169 1.7 M 0 $75 million ($482 psf). The building was 98.1% (YTD) SF SF SF occupied at the time of sale and traded at a 5.50% Cap Rate. The third largest sale was of 6400 & 6402 Arlington Boulevard in the Falls Church submarket. $33.02 $33.00 $33.20 BoundTrain/Harbert acquired the buildings from Rental Rates PSF PSF PSF AIG for $38,119,000 ($93 psf). The buildings were 73.0% occupied at the time of sale and traded at a 10% Cap Rate. U/C Percent 75.0% 62.1% 68.8% Inside the Beltway, there were 42 buildings Pre-Leased marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2019, compared to 44 from the fourth quarter 2018. Outside the Beltway, there were 78 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the first quarter 2019, compared to 76 from the fourth quarter 2018.

Vacancy Rate Deliveries vs. Under Construction Total vacancy in Northern Virginia decreased from 15.0% in the fourth quarter 2018 to 14.9% in the first quarter 2019, and has decreased from 16.0% since first quarter 2018. At the end of the first quarter 2019, 4.8 28.0 million square feet was vacant and available.

3.6 Direct vacancy remained flat at 14.3% from the fourth quarter 2018 to the first quarter 2019, and has

SF (Millions) 2.4 decreased from 15.1% since first quarter 2018.. At the end of the first quarter 2019, 27.0 million square feet was vacant and available for direct lease. 1.2

0.0 The sublet vacancy rate in Northern Virginia decreased '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 slightly from 0.7% in the fourth quarter 2018 to 0.6% in the first quarter 2019, and has decreased from 0.9% Deliveries Under Construction since first quarter 2018. At the end of the first quarter 2019, 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 16.4% while Class B product was 12.5% for the 3.0 20

quarter. Class A vacancy increased from 16.0% in the 2.5 18 fourth quarter 2018, while Class B vacancy decreased 2.0 16 slightly from 13.4% in the fourth quarter 2018.

1.5 14 (%) Rate Vacancy

Absorption & Gross Leasing 1.0 12 Northern Virginia recorded 472,834 square feet 0.5 10

SF (Millions) of net absorption in the first quarter of 2019. 0.0 8 Significant contributors to the positive absorption -0.5 6 was a 144,342-square-foot move-in by KPMG, a -1.0 4 44,517-square-foot move-in by Hogan Lovells, a 24,239-square-foot move-in by Womble Bond -1.5 2 Dickinson, and a 45,903-square-foot move-in by -2.0 0 Tegna at Boro Tower - 8350 Broad Street. '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Delivery Net Absorption Direct Vacancy Rate Leasing activity at the end of the first quarter 2019 totaled 2.9 million square feet, representing a 31% decrease from the 4.1 million square feet leased Vacancy by Building Class through the first quarter of 2018. Nine of the top ten leases signed in the first quarter were by private sector tenants. 35 20

30 16.4% The ten largest leases signed during the first quarter 17 Class VacantBuilding of (%) ranged in size from 724,820 square feet to 73,000 25 square feet, two of these largest transactions were 14 20 12.5% renewals.

SF (Millions) 15 11

The Tysons Corner submarket recorded the strongest 10

absorption of the quarter with 426,701 square feet 6.8% 8 absorbed. The positive absorption for the quarter was 5 driven by a 144,342-square-foot move-in by KPMG, 0 5 a 44,517-square-foot move-in by Hogan Lovells, A B C a 24,239-square-foot move-in by Womble Bond Dickinson, and a 45,903-square-foot move-in by Tegna at Boro Tower - 8350 Broad Street. 101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.6700 lpcwashingtondc.com 6 1530 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.4600 8120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300 Northern Virginia 1st Quarter 2019 Construction Outlook A total of ten buildings were under construction The first quarter 2019 was dominated by the private in Northern Virginia at the end of the first quarter, sector. Nine of the top ten leases signed were by totaling approximately 2.6 million square feet. private sector tenants.

The Boro Tower - 8350 Broad Street delivered this The Northern Virginia region began the year with quarter in Tysons Corner. The 438,169-square- strong positive absorption, registering 472,834 foot building is 72.7% occupied by Tegna, Hogan square feet of net move-ins. Several notable move- Lovells, KPMG, and Womble Bond Dickerson. ins contributed to this level of absorption. Capital One moved into 142,932 square feet at 1750 Old Buildings scheduled to deliver in 2019 includes, Meadow Road and Deloitte expanded its presence Boro Loft - 1640 Boro Place, a 143,606-square-foot in Rosslyn by subleasing 65,000 square feet at building in the Tysons Corner submarket and 44921 Rosslyn Plaza Bldg North - 1777 N. Kent Street. George Washington Boulevard, a 46,002-square- Demand is continuing to drive increasing asking foot building, in the Loudoun submarket. rents and generous concessions from landlords.

Buildings scheduled to deliver in 2020 include, In February, Amazon announced they have canceled Reston Station - Phase II - 1906 Reston Metro Plaza. plans to build a corporate campus in New York City as The 186,457-square-foot building is 0.0% pre- a result of backlash from state and local politicians. leased. In addition, 6595 Springfield Center Drive, The decision has not impacted plans for National a 625,000-square-foot building, is 100% pre- Landing as they have recently finalized three leases leased to GSA-TSA and 4040 Wilson Boulevard, a totalling 534,957 square feet. 240,000-square-foot building is 51.3% preleased. Penrose II - 14401 Penrose Place and 17Fifty - 1750 The Northern Virginia region gained 18,500 net Presidents Street broke ground this quarter and new jobs from February 2018 - February 2019, are also projected to deliver in 2020. representing 1.3% growth YOY. Professional & Business Services had the most with 8,400 new Buildings scheduled to deliver in 2021 include; jobs, while the Government added 5,200 jobs. Alexandria Gateway O2 - 4600 King Street. The As of February 2019, the unemployment rate for 58,460-square-foot building is 0.0% pre-leased. Northern Virgina decreased to 3.5% compared to Also expected to deliver in 2021 is APTA Centennial 3.6% the prior year. The national unemployment Center - 3030 Potomac Avenue. Reston Gateway rate decreased to 3.8%. Office Bldg A - Sunset Hills Road @ Town Center Boulevard broke ground this quarter and is expected to deliver 2022.

Top Ten Leases

Included in the top ten leases of the first quarter 2019 were five relets, two renewals, one extension/expansion, one pre-lease, and one renewal/expansion. The largest lease transaction of the quarter was a 724,820-square-foot pre-lease signed by Fannie Mae at Reston Gateway Office Bldg A - Sunset Hills Road @ Town Center Boulevard in the Reston-Herndon submarket. The second largest lease of the quarter was a 309,000-square-foot renewal signed by Northrop Grumman at 12900 Federal Systems Park Drive in the Fairfax submarket. The third largest lease of the quarter was a 255,957-square-foot relet by Amazon at Crystal Square 3 - 1770 Crystal Drive in the Crystal City submarket. Amazon also signed a 191,000-square-foot relet at Crystal Mall Office 1 - 1800 S. Bell Street. Orange Business Services renewed 132,618 square feet at International Plaza - 13775 McLearen Road in the Route 28 South submarket. PBS leased 121,993 square feet at Crystal Gateway 2 - 1225 S. Clark Street. Amazon leased 88,000 square feet at Crystal Square 4 - 241 18th Street South. Booz Allen Hamilton signed an 84,000-square-foot extension/expansion at Crystal Square 2 - 1550 Crystal Drive. General Dynamics Information Technology renewed/ expanded 83,982 square feet at 7770 Backlick Road in the Springfield submarket. Finally, GSA-DEA leased 73,000 square feet at Crystal Plaza 4 - 2200 Crystal Drive in the Crystal City submarket.

Reston Gateway Sunset Hills Road @ 12900 Federal Systems Park Drive Office Bldg A Town Center Boulevard Tenant Northrop Grumman Tenant Fannie Mae Size 309,000 SF Size 724,820 SF Type Pre-Lease Type Renewal

Crystal Square 3 1770 Crystal Drive Crystal Mall Office 1 1800 S. Bell Street

Tenant Amazon Tenant Amazon

Size 255,957 SF Size 191,000 SF

Type Relet Type Relet

International Plaza 13775 McLearen Road Crystal Gateway 2 1225 S. Clark Street

Orange Business Tenant PBS Tenant Services Size 121,993 SF Size 132,618 SF Type Relet Type Renewal

Crystal Square 4 241 18th Street South Crystal Square 2 1550 Crystal Drive Booz Allen Tenant Tenant Amazon Hamilton Size 88,000 SF Size 84,000 SF Extension/ Type Relet Type Expansion

7770 Backlick Road Crystal Plaza 4 2200 Crystal Drive General Dynamics Tenant Tenant GSA-DEA Information Technology Size 73,000 SF Size 83,982 SF Type Relet Type Renewal/Expansion

Northern Virginia Sales Transactions

1850 Centennial 2000 Duke Street 6400 & 6402 1700 Diagonal Road Falls Church Park Drive, Arlington Commerce Metro Old Town/ Corporate Center Old Town/ 11400 & 11440 Submarket Boulevard Submarket Center III-V Eisenhower Ave Eisenhower Ave Commerce Park Drive Date Sold February-2019 Submarket Falls Church Date Sold March-2019 $75,000,000 $20,900,000 Submarket Reston-Herndon Price Date Sold February-2019 Price ($482 psf) ($298 psf) $38,119,000 Date Sold February-2019 Price Buyer The Shidler Group ($93 psf) Buyer Carr Workplaces $115,000,000 Seller J.P. Morgan Southern Price BoundTrain/ Seller ($282 psf) Buyer Management RBA 155,335 SF Harbert RBA 69,897 SF Buyer Comstock Class A Seller AIG Class A Seller JBG Smith Occupancy 98.1% RBA 410,197 SF Occupancy 100.0% RBA 407,612 SF Cap Rate 5.50% Class A Cap Rate 5.90% Class A Occupancy 73.0% Occupancy 87.0% Cap Rate 10.0%

1761 Old Meadow The Tyler Building Summit Centre 4700 King Street Road Submarket Alexandria Submarket Tysons Corner Date Sold February-2019 Date Sold January-2019 $10,729,697 $11,500,000 Price Price ($137 psf) ($237 psf) Buyer JM International Buyer NVR, Inc. The Blackstone AFL-CIO/MRP Seller Seller Group Realty RBA 78,145 SF RBA 48,482 SF Class B Class B Occupancy 20.3% Occupancy 0.0% To be Comments redeveloped

Northern Virginia 1st Quarter 2019

18 36 16

14 16 32 4.8 12 14 28 10

12 24 ($) Rate Asking 3.6 8

10 20 6

SF (Millions) 4 Vacancy Rate (%) Vacancy 8 16 SF (Millions) 2.4 2 6 12 0 1.2 4 8 -2

2 4 -4 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0.0 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Highlights Total vacancy in Northern Virginia decreased from 10 Year Averages (2009 - 2018) 15.0% in the fourth quarter 2018 to 14.9% in the first quarter 2019, and has decreased from 16.0% Total Absorption 845,679 SF / Year since first quarter 2018. Direct vacancy remained flat at 14.3% from the fourth quarter 2018 to the first Deliveries (SF) 1.6 M SF / Year quarter 2019, and has decreased from 15.1% since first quarter 2018. Leasing Activity 12.8 M SF / Year

Northern Virginia recorded 472,834 square feet of net absorption in the first quarter of 2019. Market Stats Significant contributor to the positive absorption was a 144,342-square-foot move-in by KPMG, a Inventory 187.0 M SF 44,517-square-foot move-in by Hogan Lovells, a 24,239-square-foot move-in by Womble Bond Direct Vacancy 14.3% Dickinson, and a 45,903-square-foot move-in by Tegna at Boro Tower - 8350 Broad Street. Total Vacancy 14.9% Leasing activity at the end of the first quarter 2019 YTD 2019 Absorption 472,834 SF totaled 2.9 million square feet, representing a 31% decrease from the 4.2 million square feet leased through the first quarter of 2018. Nine of the top YTD Leasing Activity 2.9 M SF ten leases signed in the first quarter were by private sector tenants. Under Construction 2.6 M SF

Inside the Beltway, there were 42 buildings Percent Pre-Leased 75.0% marketing 50,000 square feet or greater of contiguous space available at the end of the first YTD 2019 Deliveries 438,169 SF quarter 2019, compared to 44 from the fourth quarter 2018. Outside the Beltway, there were 78 2009: 2018: YTD 2019: Asking Rental Rates buildings marketing 50,000 square feet or greater $30.32 $33.00 $33.02 (Full Service) of contiguous space available at the end of the PSF PSF PSF first quarter 2019, compared to 76 from the fourth quarter 2018.

Under Construction

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

Boro Loft Tysons Corner 143,606 SF 89,824 SF 37.5% 3Q 2019 Meridian Whole Foods 1640 Boro Place

44921 George Washington Clarke-Hook Loudoun 46,002 SF 46,002 SF 0.0% 2Q 2019 None Boulevard Corporation

Avalon Bay & 4040 Wilson Boulevard RB Corridor 240,000 SF 116,979 SF 51.3% 1Q 2020 Shooshan Vida Fitness

Reston Station - Phase II Reston-Herndon 186,457 SF 184,231 SF 1.2% 2Q 2020 Comstock None 1906 Reston Metro Plaza

6595 Springfield Center Drive Springfield 625,000 SF 0 SF 100.0% 1Q 2020 Boston Properties GSA-TSA

Penrose II - 14401 Penrose Zumot Real Estate Route 28 South 125,000 SF 125,000 SF 0.0% 2Q 2020 None Place Management

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

Alexandria Gateway 02 Alexandria 58,460 SF 51,960 SF 11.1% 1Q 2021 Weingarten Silver Diner 4600 King Street

American APTA Centennial Center - 3030 Meany & Oliver Crystal City 115,000 SF 40,000 SF 65.2% 1Q 2021 Physical Therapy Potomac Avenue Companies Association Reston Gateway Office - Sunset Hills Road @ Town Reston-Herndon 800,000 SF 0 SF 100.0% 1Q 2022 Boston Properties Fannie Mae Center Boulevard

Totals

Broke Ground 1Q 2019 1,316,000 SF 1st Quarter Start

Total Under Construction 2,615,525 SF

% Preleased 75.0% (Does not include condos)

Alexandria 1st Quarter 2019

0.8 25 35 1.5

0.7

20 28 0.6 1.0

0.5 ($) Rate Asking Lorem ipsum 15 21 0.4 0.5 SF (Millions) SF (Millions) 0.3 Rate (%) Vacancy 10 14

0.2 0.0

0.1 5 7

-0.5 0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights Direct vacancy in Alexandria decreased from 14.8% in the fourth quarter 2018 to 14.6% in the first quarter 2019, and has decreased from 17.4% since first quarter 2018. Total vacancy decreased from 15.1% in the fourth quarter 2018 to 14.9% in the first quarter 2019, and has 10 Year Averages (2009 - 2018) decreased from 18.0% since first quarter 2018. Total Absorption 150,970 SF / Year The Alexandria submarket recorded 62,856 square feet of net absorption in the first quarter of 2019 Deliveries (SF) 251,419 SF / Year Positive absorption was driven by a 15,954-square- foot move-in by FireEye at Carlyle Gateway II - 1900 Leasing Activity 774,678 SF / Year Duke Street.

Three sales transactions occurred in the Alexandria Market Stats submarket during the first quarter 2019. 2000 Duke Street was purchased by The Shidler Group from J.P. Inventory 18.4 M SF Morgan for $75,000,000 ($482 psf). The building was 98.1% occupied at the time of sale and traded Direct Vacancy 14.6% at a 5.50% Cap Rate. Another sale that occurred in the Alexandria submarket this quarter was the Total Vacancy 14.9% sale of 1700 Diagonal Road. Carr Workplaces acquired the building from Southern Management YTD 2019 Absorption 62,856 SF for $20,900,000 ($298 psf). The building was fully occupied at the time of sale and traded at a 5.90% YTD Leasing Activity 118,279 SF Cap Rate. Under Construction 58,460 SF The largest lease signed in the Alexandria submarket in the first quarter was a 17,784-square-foot relet Percent Pre-Leased 11.1% by Virginia Hospital Center at Shirlington Gateway - 2800 S. Shirlington Road. Also contributing to YTD 2019 Deliveries 0 SF leasing activity this quarter was a 14,778-square- foot renewal by The Lukens Company at Shirlington 2009: 2018: YTD 2019: Gateway - 2800 S. Shirlington Road. Asking Rental Rates $33.37 $33.87 $34.09 (Full Service) PSF PSF PSF

Alexandria 1st Quarter 2019

Major Leases

Shirlington Gateway 2800 S. Shirlington Road Shirlington Gateway 2800 S. Shirlington Road

Tenant Virginia Hospital Center Tenant The Lukens Company

Size 17,784 SF Size 14,778 SF

Type Relet Type Renewal

Canal Center 2 66 Canal Center Plaza Three Skyline Place 5201 Leesburg Pike

National Ready Mixed Planned Systems Tenant Tenant Concrete Association International Size 13,857 SF Size 12,242 SF

Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Old Town & $75,000,000 2000 Duke Street Feb 2019 The Shidler Group J.P. Morgan A 98.1% 5.50% Eisenhower Ave ($482 psf)

Old Town & $20,900,000 Southern 1700 Diagonal Road Mar 2019 Carr Workplaces A 100.0% 5.90% Eisenhower Ave ($298 psf) Management

The Summit Centre $10,729,697 Alexandria Feb 2019 JM International Blackstone B 20.3% N/A 4700 King Street ($137 psf) Group

Under Construction

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

Alexandria Gateway O2 Alexandria 58,460 51,960 11.1% 1Q 2021 Weingarten Silver Diner 4600 King Street

Crystal City 1st Quarter 2019

0.500 32 48 2.0

28 42 1.5

0.375 24 36 1.0 Asking Rate ($) Rate Asking 20 30 0.5 0.250 16 24 0.0 SF (Millions) SF (Millions) Vacancy Rate (%) Vacancy

12 18 -0.5 0.125 8 12 -1.0

4 6 -1.5 0.000 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 '09 '10 '11 '12 '13 '14' '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights

Direct vacancy in Crystal City decreased from 16.7% in the fourth quarter 2018 to 14.5% in the first 10 Year Averages (2009- 2018) quarter 2019, and has decreased from 17.5% since first quarter 2018. Total vacancy decreased from Total Absorption -5,945 SF / Year 16.9% in the fourth quarter 2018 to 14.6% in the first quarter 2019, and has decreased from 17.9% since Deliveries (SF) 75,664 SF / Year first quarter 2018. Leasing Activity 923,908 SF / Year The Crystal City submarket recorded -14,264 square feet of net absorption during the first quarter of 2019. The negative absorption for the quarter was Market Stats driven by multiple smaller tenant move-outs. Inventory 11.5 M SF The two largest leases signed in the Crystal City submarket in the first quarter were both by Direct Vacancy 14.5% Amazon. Amazon leased 255,957 square feet at Crystal Square 3 - 1770 Crystal Drive, 191,000 Total Vacancy 14.6% square feet at Crystal Mall Office 1 - 1800 S. Bell Street. Also contributing to leasing activity this YTD 2019 Absorption -14,264 SF quarter was a 121,993-square-foot relet by PBS at Crystal Gateway 2 - 1225 S. Clark Street. Other top YTD Leasing Activity 766,151 SF leases included an 88,000-square-foot relet by Amazon at Crystal Square 4 - 241 18th Street South Under Construction 115,000 SF and an 84,000-square-foot extension/expansion by Booz Allen Hamilton at Crystal Square 2 - 1550 Percent Pre-Leased 65.2% Crystal Drive. YTD 2019 Deliveries 0 SF APTA Centennial Center - 3030 Potomac Avenue broke ground this quarter. The 115,000-square- 2009: 2018: YTD 2019: Asking Rental Rates foot building is 65.2% pre-leased by the American $38.21 $37.87 $38.20 (Full Service) Physical Therapy Association. PSF PSF PSF

Crystal City 1st Quarter 2019

Major Leases

Crystal Square 3 1770 Crystal Drive Crystal Mall Office 1 1800 S. Bell Street

Tenant Amazon Tenant Amazon

Size 255,957 SF Size 191,000 SF

Type Relet Type Relet

241 18th Street Crystal Gateway 2 1225 S. Clark Street Crystal Square 4 South Tenant PBS Tenant Amazon Size 121,993 SF Size 88,000 SF Type Relet Type Relet

2200 Crystal Crystal Square 2 1550 Crystal Drive Crystal Plaza 4 Drive Tenant Booz Allen Hamilton Tenant GSA-DEA

Size 84,000 SF Size 73,000 SF

Type Extension/Expansion Type Relet

Jefferson Plaza 1401 S. Clark Street

Tenant GDIT

Size 21,800 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during the Crystal City 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

Meany APTA Centennial Center American Physical Crystal City 115,000 40,000 65.2% 1Q 2021 & Oliver - 3030 Potomac Avenue Therapy Association Companies

Fairfax (Fairfax Center, Fairfax City, Oakton) 1st Quarter 2019

0.20 24 30 1.5

0.16 20 25 1.0

0.12 16 20 ($) Rate Asking

0.5 12 15 SF (Millions) SF (Millions)

0.08 Rate (%) Vacancy

8 10 0.0 0.04

4 5 -0.5 0.00 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights 10 Year Averages (2009 - 2018) Total Absorption -56,443 SF / Year Direct vacancy in Fairfax remained flat at 18.2% from the fourth quarter 2018 to the first quarter 2019, and Deliveries (SF) 28,763 SF / Year has decreased from 19.7% since first quarter 2018. Total vacancy decreased from 19.2% in the fourth quarter 2018 to 19.1% in the first quarter 2019, and has Leasing Activity 868,926 SF / Year decreased from 20.5% since first quarter 2018.

The Fairfax submarket recorded -11,869 square feet Market Stats of net absorption in the first quarter of 2019. The negative absorption for the quarter was driven by Inventory 12.5 M SF multiple small tenant move-outs. Direct Vacancy 18.2% The largest lease signed in the Fairfax submarket in the first quarter 2019 was a 309,000-square-foot Total Vacancy 19.1% renewal by Northrop Grumman at 12900 Federal Systems Park Drive. Also contributing to leasing YTD 2019 Absorption -11,869 SF activity this quarter was an 18,867-square-foot relet by Burdette Smith & Bish at One Fair Oaks - 4114 YTD Leasing Activity 468,608 SF Legato Road and a 10,427-square-foot relet by Achieve Beyond at 11200 Waples Mill Road. Under Construction 0 SF

Percent Pre-Leased 0.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $26.56 $27.08 $26.71 (Full Service) PSF PSF PSF

Fairfax (Fairfax Center, Fairfax City, Oakton) 1st Quarter 2019

Major Leases

12900 Federal Systems Park Drive One Fair Oaks 4114 Legato Road

Tenant Northrop Grumman Tenant Burdette Smith & Bish

Size 309,000 SF Size 18,867 SF

Type Renewal Type Relet

11200 Waples Mill Road

Tenant Achieve Beyond

Size 10,427 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during the Fairfax 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

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

Loudoun County 1st Quarter 2019

1.000 24 30 3.00 0.875

20 25 0.750 2.35

0.625 16 20 ($) Rate Asking 1.70 0.500 12 15 SF (Millions) SF (Millions) 0.375 Rate (%) Vacancy 1.05

0.250 8 10

0.40 0.125 4 5

0.000 -0.25 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights 10 Year Averages (2009 - 2018) Direct vacancy in Loudoun County increased from Total Absorption 279,853 SF / Year 8.9% in the fourth quarter 2018 to 9.8% in the first quarter 2019, and has increased from 9.4% since first 161,997 SF / Year quarter 2018. Total vacancy has increased from 9.3% Deliveries (SF) in the fourth quarter 2018 to 9.9% in the first quarter 2019, and has decreased from 10.3% since first quarter Leasing Activity 933,244 SF / Year 2018. Market Stats Loudoun County recorded -26,407 square feet of net absorption in the first quarter of 2019. The Inventory 15.6 M SF negative absorption for the quarter was driven by a 40,361-square-foot move-out by Metron Aviation, Inc. Direct Vacancy 9.8% at Loudoun Center Building B - 45300 Catalina Court.

The largest lease signed in the Loudoun submarket Total Vacancy 9.9% this quarter was a 19,804-square-foot relet by Infosys at 22001 Loudoun County Parkway. YTD 2019 Absorption -26,407 SF

44921 George Washington Boulevard is under YTD Leasing Activity 76,773 SF construction. The 46,002-square-foot building is projected to deliver in second quarter 2019. Under Construction 46,002 SF

Percent Pre-Leased 0.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $26.48 $25.73 $25.59 (Full Service) PSF PSF PSF

Loudoun County 1st Quarter 2019

Major Leases

22001 Loudoun County Parkway

Tenant Infosys

Size 19,084 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

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

Under Construction

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

44921 George Washington Clarke-Hook Loudoun 46,002 SF 46,002 SF 0.0% 2Q 2019 None Boulevard Corporation

Merrifield 1st Quarter 2019

0.30 18 40 2.0

0.25 16 35 1.5 14 30 0.20 1.0 12 ($) Rate Asking 25

0.15 10 0.5 20 SF (Millions) SF (Millions)

Vacancy Rate (%) Vacancy 8 0.10 15 0.0 6

10 -0.5 0.05 4

5 2 -1.0 0.00 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights 10 Year Averages (2009 - 2018)

Direct vacancy in Merrifield increased from 12.7% in Total Absorption 31,955 SF / Year the fourth quarter 2018 to 13.1% in the first quarter 2019, and has increased from 11.5% since first quarter Deliveries (SF) 36,398 SF / Year 2018. Total vacancy has increased from 13.6% in the fourth quarter 2018 to 13.9% in the first quarter 2019, Leasing Activity 637,866 SF / Year and has increased from 12.2% since first quarter 2018.

The Merrifield submarket recorded -25,603 square Market Stats feet of net absorption in the first quarter of 2019. Negative absorption was driven by a 46,388-square- Inventory 9.6 M SF foot move-out by Acentia at 3130 Fairview Park Drive. Direct Vacancy 13.1%

The largest lease signed in the Merrifield submarket Total Vacancy 13.9% this quarter was an 18,133-square-foot relet by Associated Universities, Inc. at MetroPlace I - 2650 YTD 2019 Absorption -25,603 SF Park Tower Drive. Also contributing to leasing activity this quarter was a 16,584-square-foot relet YTD Leasing Activity 56,058 SF by Pinkston Group at 3110 Fairview Park Drive, a 16,374-square-foot relet by Global Tel Link Corp at Under Construction 0 SF 3120 Fairview Park Drive, and a 12,637-square-foot relet by The Retina Group of Washington at Willow Percent Pre-Leased 0% Oaks 3 - 8270 Willow Oaks Corporate Drive. YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $34.57 $30.41 $30.77 (Full Service) PSF PSF PSF

Merrifield 1st Quarter 2019

Major Leases

MetroPlace I 2650 Park Tower Drive 3110 Fairview Park Drive

Tenant Associated Universities, Inc. Tenant Pinkston Group

Size 18,133 SF Size 16,584 SF

Type Relet Type Relet

8270 Willow Oaks 3120 Fairview Park Drive Willow Oaks 3 Corporate Drive Tenant Global Tel Link Corp The Retina Group of Tenant Washington Size 16,374 SF Size 12,637 SF Type Relet Type Relet

8260 Willow Oaks One Jefferson Park 8111 Gatehouse Road Willow Oaks 1 Corporate Drive Tenant USPS Metropolitan Healthcare Tenant Services, Inc. Size 12,090 SF Size 10,545 SF Type Expansion Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during the Merrifield 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

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

Old Town/Eisenhower Ave 1st Quarter 2019

0.8 20 40 1.0

0.7

16 32 0.6 0.5

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

0.2 -0.5

0.1 4 8

-1.0 0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 '09 '10' '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing Activity Total Net Absorption Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Highlights Direct vacancy in the Old Town Alexandria and Eisenhower Ave submarket decreased from 10.4% in 10 Year Averages (2009 - 2018) the fourth quarter 2018 to 10.0% in the first quarter 2019, and has decreased from 10.3% since first quarter Total Absorption 44,508 SF / Year 2018. Total vacancy decreased from 10.8% in the fourth quarter 2018 to 10.5% in the first quarter 2019, and has Deliveries (SF) 81,419 SF / Year decreased from 11.1% since first quarter 2018. Leasing Activity 601,930 SF / Year The Old Town Alexandria and Eisenhower Ave submarket recorded 46,484 square feet of net absorption in the first quarter of 2019. Positive absorption was driven Market Stats by a 15,954-square-foot move-in by FireEye at Carlyle Gateway II - 1900 Duke Street. Inventory 12.8 M SF

Two sales transactions occurred in the Old Town Direct Vacancy 10.0% Alexandria and Eisenhower Ave submarket during the first quarter 2019. 2000 Duke Street was purchased by Total Vacancy 10.5% The Shidler Group from J.P. Morgan for $75,000,000 ($482 psf). The building was 98.1% occupied at the time 46,484 SF of sale and traded at a 5.50% Cap Rate. Another sale YTD 2019 Absorption that occurred in the Alexandria submarket this quarter was the sale of 1700 Diagonal Road. Carr Workplaces YTD Leasing Activity 71,047 SF acquired the building from Southern Management for $20,900,000 ($298 psf). The building was fully Under Construction 58,460 SF occupied at the time of sale and traded at a 5.90% Cap Rate. Percent Pre-Leased 11.1%

The largest lease signed in the Old Town Alexandria YTD 2019 Deliveries 0 SF and Eisenhower Ave submarket in the first quarter was a 13,857-square-foot relet by National Ready Mixed 2009: 2018: YTD 2019: Concrete Association at Canal Center 2 - 66 Canal Asking Rental Rates $34.03 $36.22 $36.11 Center Plaza. (Full Service) PSF PSF PSF

Old Town/Eisenhower Ave 1st Quarter 2019

Major Leases

Canal Center 2 66 Canal Center Plaza

National Ready Mixed Tenant Concrete Association Size 13,857 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Old Town & $75,000,000 2000 Duke Street Feb 2019 The Shidler Group J.P. Morgan A 98.1% 5.50% Eisenhower Ave ($482 psf)

Old Town & $20,900,000 Southern 1700 Diagonal Road Mar 2019 Carr Workplaces A 100.0% 5.90% Eisenhower Ave ($298 psf) Management

Under Construction

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

Old Town & Alexandria Gateway O2 Eisenhower 58,460 51,960 11.1% 1Q 2021 Weingarten Silver Diner 4600 King Street Ave

Reston-Herndon 1st Quarter 2019

4.0 2.0 25 35 3.5

1.6 20 28 3.0

2.5 Asking Rate ($) Rate Asking 1.2 15 21 2.0 1.5 SF (Millions) Vacancy Rate (%) Vacancy 0.8 SF (Millions) 1.0 10 14 0.5 0.4 0.0 5 7 -0.5 0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 -1.0 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy increased from 12.4% in the fourth quarter 2018 to 13.3% the first quarter 2019, and has increased from 11.8% since first quarter 2018. Total vacancy has 10 Year Averages (2009 - 2018) increased from 13.4% in the fourth quarter 2018 to 14.1% the first quarter 2019, and has increased from 12.8% since Total Absorption 102,334 SF / Year first quarter 2018. Year-to-date direct vacancy for Reston was 11.9% and total vacancy was 12.5%. Year-to-date Deliveries (SF) 94,848 SF / Year direct vacancy for Herndon was 15.1% and total vacancy was 16.1%. Leasing Activity 2.7 M SF / Year

The Reston-Herndon submarket recorded 124,046 square feet of net absorption in the first quarter of 2019. Market Stats The positive absorption for the quarter was driven by a 46,402-square-foot move-in by The KeyW at Dulles Inventory 31.2 M SF View North - 2551 Dulles View Drive. Direct Vacancy 13.3% The largest sale transaction of Northern Virginia for the first quarter 2019 was in the Reston-Herndon submarket. Total Vacancy 14.1% Comstock acquired Commerce Metro Center III-V - 1850 Centennial Park Drive, 11400 & 11440 Commerce Park YTD 2019 Absorption 124,046 SF Drive from JBG Smith for $115,000,000 ($282 psf). The buildings were 87.0% occupied at the time of sale. 301,616 SF YTD Leasing Activity The largest lease signed in Northern Virginia this quarter was a 742,800-square-foot pre-lease by Fannie Mae Under Construction 1,262,457 SF at Reston Gateway Office Bldg A - Sunset Hills Road @ Town Center Boulevard. Percent Pre-Leased 77.7%

Reston Gateway Offie Bldg -Sunset Hills Road @ Town YTD 2019 Deliveries 0 SF Center Boulevard and 17Fifty - 1750 Presidents Street broke ground this quarte and Fannie Mae and Leidos are 2009: 2018: YTD 2019: Asking Rental Rates moving their new headquarters to Reston Gateway Office $28.07 $31.60 $32.14 (Full Service) Bldg A - Sunset HIlls Road @ Town Center Boulevard and PSF PSF PSF 17Fifty - 1750 Presidents Street respectively.

Reston-Herndon 1st Quarter 2019

Major Leases

Reston Gateway Office Sunset Hills Road @ 11720 Plaza America Plaza America Tower 3 Bldg A Town Center Boulevard Drive Tenant Fannie Mae Tenant Blackboard

Size 742,820 SF Size 45,644 SF Type Pre-Lease Type Relet

11600 Sunrise Valley 13241 Woodland Park 11600 Sunrise Northridge II Drive Road Tenant Immorsat, Inc. Tenant SpaceFlight

Size 29,289 SF Size 23,738 SF

Type Renewal Type Relet

1902 Campus 10740 Parkridge Campus West Parkridge Center 6 Commons Drive Boulevard Tenant Architecture, Inc. Tenant LeaseAccelerator Inc.

Size 19,166 SF Size 16,000 SF

Type Renewal/Expansion Type Sublease

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Commerce Metro Center $115,000,000 III-V - 1850 Centennial Reston-Herndon Feb 2019 ($282 psf) Comstock JBG Smith A 87.0% N/A Park Dr, 11400 & 11440 Commerce Park Drive

Under Construction

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

Reston Station - Phase II Reston-Herndon 186,457 SF 184,231 SF 1.2% 2Q 2020 Comstock None 1906 Reston Metro Plaza

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

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

Rosslyn-Ballston Corridor 1st Quarter 2019

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 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19

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

Highlights 10 Year Averages (2009 - 2018) Direct vacancy in the Rosslyn-Ballston Corridor increased from 16.5% in the fourth quarter 2018 to 17.0% in the first Total Absorption -31,302 SF / Year quarter 2019, and has decreased from 18.7% since first quarter 2018. Total vacancy increased from 17.8% in the Deliveries (SF) 269,242 M SF / Year fourth quarter 2018 to 18.5% in the first quarter 2019, and has decreased from 20.3% since first quarter 2018. Leasing Activity 2.1 M SF / Year

The Rosslyn-Ballston Corridor recorded -61,261 square feet of net absorption during the first quarter of 2019. Market Stats The primary driver for negative absorption was a 116,077-square-foot lease expiration for System Planning Inventory 25.4 M SF Corporation at One Virginia Square - 3601-3611 Wilson Boulevard. Direct Vacancy 17.0%

The largest lease signed in the Rosslyn-Ballston Corridor Total Vacancy 18.5% submarket was a 71,027-square-foot extension by the GSA at 1310 N. Courthouse Road. Another top lease in the YTD 2019 Absorption -61,261 SF Rosslyn-Ballston Corridor submarket this quarter was a 42,506-square-foot relet by Yext at 1101 Wilson Boulevard. YTD Leasing Activity 280,639 SF Other top leases include a 35,596-square-foot renewal/ expansion by Venture Global, LNG Inc. at Potomac Tower Under Construction 240,000 SF - 1001 N. 19th Street and a 13,189-square-foot renewal by STA Travel at 4100 N. Fairfax Drive. Percent Pre-Leased 51.3%

The Loft Office at Market Common - 1650 Edgewood YTD 2019 Deliveries 0 SF Street, is currently under renovation. The 138,871-square- foot property is expected to deliver 1Q2020. 2009: 2018: YTD 2019: Asking Rental Rates $40.68 $42.73 $42.98 (Full Service) PSF PSF PSF

Rosslyn-Ballston Corridor 1st Quarter 2019

Major Leases

1310 N. Courthouse Road 1101 WIlson Boulevard Tenant GSA Tenant Yext

Size 71,027 SF Size 42,506 SF

Type Extension Type Relet

Potomac Tower 1001 N. 19th Street Ballston Exchange II 4121 Wilson Boulevard Tenant Venture Global, LNG Inc Tenant Booz Allen Hamilton

Size 35,596 SF Size 18,529 SF

Type Renewal/Expansion Type Relet

Arlington Square 4401 N. Fairfax Drive 4100 N. Fairfax Drive American Retirement Tenant Tenant STA Travel Association Size 16,546 SF Size 13,189 SF

Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during RB Corridor N/A 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

4040 Wilson Boulevard RB Corridor 240,000 SF 116,979 SF 51.3% 1Q 2020 Shooshan Avalon Bay & Vida Fitness

Route 28 North 1st Quarter 2019

0.6 25 30 3.00

0.5 20 24 2.35

0.4 ($) Rate Asking 15 18 1.70

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

0.40 0.1 5 6

0.0 -0.25 0 0 '09 '10 '11 '12 '13 '13 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19

Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights 10 Year Averages (2009 - 2018) Direct vacancy in the Route 28 North submarket increased from 10.8% in the fourth quarter 2018 to Total Absorption 104,548 SF / Year 12.1% in the first quarter 2019, and has increased from 11.8% since first quarter 2018. Total vacancy increased Deliveries (SF) 45,747 SF / Year from 11.4% in the fourth quarter 2018 to 12.3% in the first quarter 2019, and has decreased from 12.7% since first Leasing Activity 675,363 SF / Year quarter 2018.

The Route 28 North submarket recorded -41,950 Market Stats square feet of net absorption in the first quarter of 2019. Negative absorption was driven by a 40,461-square-foot move-out by Metron Inc. at Inventory 9.5 M SF Loudoun Center Building B - 45300 Catalina Court. Direct Vacancy 12.1% The largest lease signed in the Route 28 North submarket this quarter was a 19,084 square-foot relet Total Vacancy 12.3% by Infosys at Lakeside at Quantum Park E2- 22001 Loudoun County Parkway. YTD 2019 Absorption -41,950 SF

YTD Leasing Activity 47,939 SF

Under Construction 0 SF

Percent Pre-Leased 0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $25.15 $25.26 $25.35 (Full Service) PSF PSF PSF

Route 28 North 1st Quarter 2019

Major Leases

22001 Loudoun County Quantum Park E2 Parkway Tenant Infosys

Size 19,084 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported during the Rt 28 North 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

No new construction reported Rt 28 North N/A N/A N/A N/A N/A N/A during the quarter

Route 28 South 1st Quarter 2019

1.0 25 30 1.5

0.8 20 24 1.0 Asking Rate ($) Rate Asking 0.6 15 18

0.5 SF (Millions) Vacancy Rate (%) Vacancy

0.4 SF (Millions) 10 12

0.2 0.0 5 6

0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 -0.5 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in the Route 28 South submarket has decreased from 14.6% in the fourth quarter 2018 to 14.3% 10 Year Averages (2009 - 2018) in the first quarter 2019, and has increased from 11.4% in the first quarter 2018. Total vacancy has decreased from Total Absorption 204,298 SF / Year 15.4% in the fourth quarter 2018 to 15.1% the first quarter 2019, and has increased from 12.6% since first quarter Deliveries (SF) 183,501 SF / Year 2018. Leasing Activity 770,115 SF / Year The Route 28 South submarket recorded 6,424 square feet of net absorption in the first quarter of 2019. Positive absorption was driven by a 20,358-square-foot move-in by Redfin at Newbrook II - 14155 Newbrook Drive. Market Stats

The largest lease signed in the Route 28 South submarket Inventory 13.7 M SF this quarter was a 132,618-square-foot renewal by Orange Business Services at International Plaza - 13775 McLearen Direct Vacancy 14.3% Road. Also contributing to leasing activity this quarter was a 20,020 square-foot relet by Tetra Tech at Newbrook I - Total Vacancy 15.1% 14151 Newbrook Drive. Other top leases include an 18,547 -square-foot relet by Bluewater Federal Solutions, Inc. YTD 2019 Absorption 6,424 SF at Albemarle Point-Building 1- 14420 Albemarle Point Place, and a 18,277-square-foot renewal by CACI at YTD Leasing Activity 250,646 SF Independence Center 2 - 15040 Conference Center Drive. Under Construction 125,000 SF Penrose II - 14401 Penrose Place, is currently under construction. The 125,000-square-foot property is Percent Pre-Leased 0% expected to deliver 2Q2020. YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $26.81 $26.61 $26.49 (Full Service) PSF PSF PSF

Route 28 South 1st Quarter 2019 Major Leases

International Plaza 13775 McLearen Road Newbrook I 14151 Newbrook Drive Tenant Tetra Tech Orange Business Tenant Services Size 20,020 SF

Size 132,618 SF Type Relet Type Renewal

Albemarle Point, 14420 Albemarle Point Independence Center 15040 Conference Building 1 Place 2 Center Drive Bluewater Federal Tenant Tenant CACI Solutions, Inc Size 18,277 SF Size 18,574 SF Type Renewal Type Relet

14566 Lee Road Dulles Gateway Ph. 1 13921 Park Center Road First Data Tenant Tenant Fusion LLC Technologies, Inc Size 13,364 SF Size 16,715 SF Type Renewal Type Relet

Southgate Center I 4501 Singer Court Southgate Center I 4501 Singer Court Tenant Amplus Corporation Tenant NetServices, Inc

Size 12,197 SF Size 11,810 SF

Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

No new sales reported Rt 28 South N/A 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

Zumot Penrose II - 14401 Penrose Place Route 28 South 125,000 SF 125,000 SF 0.0% 2Q 2020 Real Estate None Management

Springfield 1st Quarter 2019

1.00 0.8 30 35

0.7 24 28 0.75 0.6 Asking Rate ($) Rate Asking 0.5 18 21 0.50 0.4 SF (Millions) Vacancy Rate (%) Vacancy SF (Millions) 0.3 12 14 0.25

0.2

0.00 0.1 6 7

0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 -0.25 0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Deliveries Under Construction Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption

Highlights 10 Year Averages (2009 - 2018)

Direct vacancy in the Springfield submarket decreased Total Absorption 55,030 SF / Year from 19.5% in the fourth quarter 2018 to 19.1% in the first quarter 2019, and has decreased from 21.9% since Deliveries (SF) 139,150 SF / Year first quarter 2018. Total vacancy decreased from 19.6% in the fourth quarter 2018 to 19.3% in the first quarter Leasing Activity 311,645 SF / Year 2019, and has decreased from 22.1% since first quarter 2018. Market Stats The Springfield submarket recorded-7,159 square feet of net absorption in the first quarter of 2019. The Inventory 5.8 M SF negative absorption was driven primarily by multiple smaller tenant move-outs. Direct Vacancy 19.1%

The largest lease signed in the Springfield submarket Total Vacancy 19.3% in the first quarter of 2019 was an 83,982-square-foot renewal/expansion by General Dynamics Information YTD 2019 Absorption -7,159 SF Technology at 7770 Backlick Road. Additional leases signed this quarter included a 27,000-square-foot YTD Leasing Activity 58,740 SF relet by Immanuel Christian School at Indian Run Office Park - 5252 Cherokee Avenue, and a 15,000-square- Under Construction 625,000 SF foot relet by GSA - Department of Homeland Security at MetroPark Springfield II - 6350 Walker Lane. Percent Pre-Leased 100.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $28.20 $29.33 $29.47 (Full Service) PSF PSF PSF

Springfield 1st Quarter 2019

Major Leases

7770 Backlick Road Indian Run Office Park 5252 Cherokee Avenue General Dynamics Immanuel Christian Tenant Tenant Information Technology School Size 83,982 SF Size 27,000 SF

Type Renewal/Expansion Type Relet

MetroPark Offices at Springfield 6350 Walker Lane 6564 Loisdale Court Springfield II Town Center

Tenant GSA-DHS Tenant New Age

Size 15,000 SF Size 14,093 SF

Type Relet Type Relet

Kingstowne Ridge 5680 King Centre Drive MetroPark 5 6363 Walker Lane

Tenant Unified Industries Tenant Kiewit Infrastructure Co. Size 12,059 SF Size 13,143 SF Type Relet Type Relet

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 Springfield 625,000 SF 0 SF 100.0% 1Q 2020 GSA-TSA 6595 Springfield Center Drive Properties

Tysons Corner 1st Quarter 2019

2.0 20 36 3.0

2.5 30 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 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 0 0 -0.5 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19

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

Direct vacancy in the Tysons Corner submarket decreased 10 Year Averages (2009 - 2018) from 12.6% in the fourth quarter 2018 to 12.3% in the first quarter 2019, and has decreased from 15.8% the first Total Absorption 161,986 SF / Year quarter 2018. Total vacancy decreased from 13.2% in the fourth quarter 2018 to 12.9% in the first quarter 2019, and Deliveries (SF) 294,220 SF / Year has decreased from 16.3% the first quarter 2018. Leasing Activity 2.1 M SF / Year The Tysons Corner submarket recorded 426,071 square feet of net absorption in the first quarter of 2019. A significant contributor to the positive absorption was a Market Stats 144,342-square-foot move-in by KPMG, a 44,517-square- foot move-in by Hogan Lovells, a 24,239-square- Inventory 29.5 M SF foot move-in by Womble Bond Dickinson, and a 45,903-square-foot move-in by Tegna at Boro Tower - 12.3% 8350 Broad Street. Direct Vacancy

The Tyler Building - 1761 Old Meadow Road was Total Vacancy 12.9% acquired by NVR, Inc from AFL-CIO/MRP Realty, Inc. for $11,500,000 ($237 psf). The building was fully vacant at YTD 2019 Absorption 426,071 SF the time of sale and is subject to future redevelopment. YTD Leasing Activity 339,348 SF The largest lease signed in the Tysons Corner submarket this quarter was a 42,557-square-foot relet by Adtolem Under Construction 143,606 SF Global Education Inc. (Devry) at 1951 Kidwell Drive. Another top lease in the Tysons Corner submarket this Percent Pre-Leased 37.5% quarter was a 31,260-square-foot renewal signed by PNC Bank at The Corporate Office Center at Tysons II - YTD 2019 Deliveries 438,169 SF 1750 Tysons Boulevard.

The Boro Tower - 8350 Broad Street delivered this 2009: 2018: YTD 2019: Asking Rental Rates quarter. The 438,169-square-foot building is 72.7% $29.75 $35.87 $35.07 (Full Service) leased by Tegna/Hogan Lovells and KPMG. PSF PSF PSF

Tysons Corner 1st Quarter 2019 Major Leases The Corporate Office 1951 Kidwell Drive 1750 Tysons Blvd Center @ Tysons II Adtolem Global Tenant Education Inc. (Devry) Tenant PNC Bank Size 42,557 SF Size 31,260 SF

Type Relet Type Renewal

Tysons Dulles Plaza 3 1410 Spring Hill Road 1850 Towers Crescent Plaza Tenant Thomson Reuters Tenant Applied Insight

Size 26,865 SF Size 17,000 SF

Type Renewal/Expansion Type Sublease

Tysons Corner Center Tysons Pointe 8300 Greensboro Drive 1861 International Drive - Office Williams, Mullen, Clark & Tenant Dobbins Tenant Geocent Size 15,192 SF Size 14,651 SF Type Extension Type Sublease

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Notes

AFL- The Tyler Building $11,500,000 CIO/ To be Tysons Corner Jan 2019 NVR, Inc. B 0.0% 1761 Old Meadow Road ($237 psf) MRP redeveloped Realty

Under Construction

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

Boro Loft Tysons Corner 143,606 SF 89,824 SF 37.5% 3Q 2019 Meridian Whole Foods 1640 Boro Place

Deliveries

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

Tegna/Hogan The Boro Tower Tysons Corner 438,169 SF 329,983 SF 72.7% 1Q 2019 Meridian Lovells, 8350 Broad Street KPMG