THE OFFICE MARKET REPORT

LEE NYC TREND TRACKER 3Q2015 SUBMARKETS LEE NYC MANHATTAN TREND TRACKER 3Q2015

W 65TH ST E 65TH ST

BROADWAY BROADWAY BROADWAY BROADWAY BROADWAY 1ST AVE CENTRAL PARK WEST CENTRAL PARK 5TH AVE MIDTOWN WEST CENTRAL PARK SOUTH LEXINGTON AVE W 57TH ST E 57TH ST MIDTOWN PLAZAPLAZA MIDTOWN EAST DISTRICT MIDTOWN SOUTH 8TH AVE 0TH AVE

1 ROCKEFELLERROCKEFELLER

W 47TH ST E 47TH ST

BROADWAY BROADWAY BROADWAY BROADWAY

BROADWAY CENTERCENTER

FDR DRIVE

TIMESTIMES SQUARESQUARE DOWNTOWN

WEST SIDE HIGHWAY HIGHWAY SIDE SIDE WEST WEST

GRAND CENTRAL W 42ND ST E 42ND ST AVENUE OF THE AMERICAS AVENUE 1ST AVE

PENNPENN STATIONSTATION || GARMENTGARMENT DISTRICTDISTRICT MURRAY HILL W 34TH ST E 34TH ST

5TH AVE

BROADWAY BROADWAY BROADWAY BROADWAY BROADWAY BROADWAY

LEXINGTON AVE

12TH AVE AVE 12TH 12TH CHELSEACHELSEA 1ST AVE W 23RD ST E 23RD ST GRAMERCY | FLATIRON 0TH AVE 8TH AVE 1

AVENUE OF THE AMERICAS AVENUE

BROADWAY BROADWAY BROADWAY BROADWAY BROADWAY

W 14TH ST E 14TH ST

1TH AVE AVE 1TH 1TH

FDR DRIVE DRIVE FDR FDR 1 1 GANESEVOORT ST EAST

5TH AVE RIVER AVE A AVE 1ST AVE

W 4TH ST HUDSON SQ. E 4TH ST HUDSON || TRIBECATRIBECA SOHOSOHO || NOHONOHO RIVER E HOUSTON ST

W HOUSTON ST BROADWAY HUDSON ST ST ST ST ST ST ST HUDSON HUDSON HUDSON HUDSON HUDSON HUDSON HUDSON

W HOUSTON ST

DELANCEY ST

BOWERY BOWERY BOWERY BOWERY

ALLEN ST ST ST ST ST ALLEN ALLEN ALLEN ALLEN ALLEN

AVENUE OF THE AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS AMERICAS THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE THE OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF OF AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE AVENUE OF THE AMERICAS THE OF AVENUE DELANCEY ST

VARICK ST ST ST ST ST VARICK VARICK VARICK VARICK VARICK

CANAL ST ST VARICK

WEST ST ST WEST WEST

W BROADWAY W

CANAL ST

FRANKLIN ST STCENTRE WORTH ST

BROADWAY CITYCITY HALLHALL CHAMBERS ST || INSURANCEINSURANCE DISTRICTDISTRICT

PARK PL PARK ROW

VESEY ST VESEY ST WORLD TRADETRADE

CENTERCENTER ST WILLIAM

WATER ST

WALL ST

TRINITY PL TRINITY

GOLD ST FINANCIALFINANCIAL BROADWAY DISTRICT

BEAVER ST

BATTERY PL

2 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC MARKET SUMMARY LEE NYC MANHATTAN TREND TRACKER 3Q2015

2015 | 3Q Manhattan Office 2015 | 3Q Manhattan Office Total Total Total Direct Sublease Overall Available Total Total Total Under Direct Sublease Overall Inventory Available Vacancy Availability Net Under Asking Asking Asking Market Inventory Total Vacancy Availability Net Construction Asking Asking Asking Market (MSF) Total Rate Rate Absorption Construction Rent Rent Rent (MSF) (SF) Rate Rate Absorption (SF) Rent Rent Rent (SF) (%) (%) (SF) (SF) ($PSF) ($PSF) ($PSF) (%) (%) (SF) ($PSF) ($PSF) ($PSF) Midtown 223 24,659,164 7.8% 11.0% -68,734 670,000 $81.94 $64.02 $79.37 Grand MidtownCentral 22371 24,659,1649,852,620 7.8%9.6% 11.0%13.8% -68,734230,512 670,000- $81.94$73.80 $64.02$58.93 $79.37$72.28 Grand Central 71 9,852,620 9.6% 13.8% 230,512 - $73.80 $58.93 $72.28 Midtown East 25 1,523,880 4.3% 6.0% -67,592 - $71.73 $60.10 $70.07 Midtown East 25 1,523,880 4.3% 6.0% -67,592 - $71.73 $60.10 $70.07 Midtown West 20 1,532,409 5.6% 7.5% 72,752 - $74.40 $50.35 $71.90 Midtown West 20 1,532,409 5.6% 7.5% 72,752 - $74.40 $50.35 $71.90 Plaza District 39 3,934,705 7.6% 10.1% 165,474 670,000 $114.15 $73.16 $107.61 Plaza District 39 3,934,705 7.6% 10.1% 165,474 670,000 $114.15 $73.16 $107.61 Rockefeller Plaza 30 2,247,312 6.0% 7.5% 46,450 - $82.31 $49.82 $75.89 Rockefeller Plaza 30 2,247,312 6.0% 7.5% 46,450 - $82.31 $49.82 $75.89 Times Square 38 5,568,238 9.7% 14.7% -516,330 - $75.10 $73.05 $74.65 Times Square 38 5,568,238 9.7% 14.7% -516,330 - $75.10 $73.05 $74.65 Midtown South 149 13,029,989 5.9% 8.7% 97,570 6,661,751 $68.95 $52.97 $65.64 Midtown South 149 13,029,989 5.9% 8.7% 97,570 6,661,751 $68.95 $52.97 $65.64 Chelsea 18 980,899 3.7% 5.4% -68,170 85,202 $57.05 $56.61 $56.97 Chelsea 18 980,899 3.7% 5.4% -68,170 85,202 $57.05 $56.61 $56.97 Gramercy | Flatiron 30 2,429,876 5.7% 8.1% 93,893 - $74.98 $61.04 $72.25 Gramercy | Flatiron 30 2,429,876 5.7% 8.1% 93,893 - $74.98 $61.04 $72.25 Hudson Square | Tribeca 21 2,488,053 9.7% 11.4% -375,235 120,413 $73.64 $51.71 $71.62 Hudson Square | Tribeca 21 2,488,053 9.7% 11.4% -375,235 120,413 $73.64 $51.71 $71.62 Murray Hill 13 1,070,943 4.3% 8.3% 85,536 - $64.43 $48.35 $60.78 Murray Hill 13 1,070,943 4.3% 8.3% 85,536 - $64.43 $48.35 $60.78 Penn Station-Garment 54 5,045,821 6.1% 9.4% 224,054 6,456,136 $66.59 $49.96 $62.45 Penn Station-Garment 54 5,045,821 6.1% 9.4% 224,054 6,456,136 $66.59 $49.96 $62.45 SoHo | NoHo 13 1,014,397 3.7% 8.1% 137,492 - $75.36 $57.10 $71.05 SoHo | NoHo 13 1,014,397 3.7% 8.1% 137,492 - $75.36 $57.10 $71.05 Downtown 107 12,957,608 11.0% 12.1% 348,253 2,861,402 $61.10 $45.49 $59.32 Downtown 107 12,957,608 11.0% 12.1% 348,253 2,861,402 $61.10 $45.49 $59.32 City Hall | Insurance Dist. 28 1,707,925 4.6% 6.1% -35,519 - $50.51 $39.64 $49.68 City Hall | Insurance Dist. 28 1,707,925 4.6% 6.1% -35,519 - $50.51 $39.64 $49.68 Financial District 44 5,865,575 10.9% 13.2% 440,736 - $55.20 $43.36 $53.35 Financial District 44 5,865,575 10.9% 13.2% 440,736 - $55.20 $43.36 $53.35 World Trade Center 35 5,384,108 16.4% 15.6% -56,964 2,861,402 $67.87 $50.95 $66.64 World Trade Center 35 5,384,108 16.4% 15.6% -56,964 2,861,402 $67.87 $50.95 $66.64 Manhattan 479 50,646,761 8.0% 10.6% 310,709 10,193,153 $73.28 $56.66 $70.76 Manhattan 479 50,646,761 8.0% 10.6% 310,709 10,193,153 $73.28 $56.66 $70.76

Commenced with report, 1Q 2015, Lee & Associates utilizes new metric methods from its prior reporting methods. Lee & Associates Office Metrics are based on Commencedoffice buildings with with report, a minimum 1Q 2015, rentable Lee & Associatesbuilding area utilizes of 100,000 new metric square methods feet, with from the its exception prior reporting in the submarketmethods. Lee of Soho/Noho,& Associates which Office uses Metrics metrics are basedbased onon officeoffice buildingsbuildings withwith aa minimumminimum rentablerentable buildingbuilding areaarea ofof 100,00050,000 square square feet. feet, Lee with & the Associates exception Office in the Metrics submarket comprise of Soho/Noho, data representing which uses existing metrics office based buildings on for officeClasses buildings A, B and with C. Sincea minimum new metric rentable methods building have area been of 50,000applied, square the correlation feet. Lee &of Associates data for this Office report Metrics (and allcomprise reports data since representing 1Q 2015) will existing have no office bearing buildings over thefor Classesreports A,previously B and C. publishedSince new by metric Lee & methods Associates have (prior been to applied, 1Q 2015). the correlation of data for this report (and all reports since 1Q 2015) will have no bearing over the reports previously published by Lee & Associates (prior to 1Q 2015). 1. Under Construction only includes buildings with expected deliveries, with a primary office use and over 50,000 square feet. Buildings under construction that 1.includeUnder o fficeConstruction as a secondary only includes or tertiary bui ldingsuse are wi ethxcluded. expected All deliveries,proposed newwith constructiona primary office buildings use and we overre e xcluded.50,000 square feet. Buildings under construction that include2. All r entoffice figures as a saecondaryre based onor tmarketertiary ausnde asubmarketre excluded. weighted All proposed averages. new O constructionverall Asking buildings Rents take we Dreirect excluded. and Sublease rents into account. 2. All rent figures are based on market and submarket weighted averages. Overall Asking Rents take Direct and Sublease rents into account. Lee & Associates NYC accepts no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be Leeplaced & Associates on the information NYC accepts contained no liability in this or responsibilitydocument. for the accuracy or completeness of the information contained herein and no reliance should be placed on the information contained in this document.

3 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC MIDTOWN LEE NYC MANHATTAN TREND TRACKER 3Q2015

idtown remained slightly stagnant since last quarter, picked up by George Comfort & Sons with Angelo, Gordon & Mmaintaining the current vacancy and availability rates at Co. for approximately $382.5M. 7.8% and 11%. The market’s overall asking rent increased only by $0.52. With asking rents for Class A space peaking in the For the third consecutive quarter, availability in Midtown West $100s, the market experienced a negative total net absorption (aka Columbus Circle) dropped 60 basis points Q-to-Q. of 68,734 SF. Although Midtown continues to be strong, as it Direct asking rents have increased by $0.85 from last quarter has since pre-recession years sublet vacancy and availability and $2.70 since Q1. Sublet rents in the submarket increased both decreased by 10 basis points, while sublet rents increased by $2 with availability spiraling down by 60 basis points and close to $4 due to prime Class-A spaces. Nevertheless, there’s vacancy by 30 basis points. The Hallmark Channel renewed still a wide difference in direct and sublease pricing in the luxury its lease at Paramount Group’s 1325 Avenue of the Americas market at near $18 per square foot. for approximately 25,000 SF with rents starting in the low $70s.

Grand Central also had an increased overall asking rent of The Plaza District continued its strength with another quarter only $0.49. Its vacancy rate continued to drop for the third decrease in vacancy and availability with a 20 basis point consecutive quarter by 170 basis points since Q4 2014. drop. Overall asking rents increased again by $1.09. The offi ce Simultaneously in the same time frame, its availability rate luxury market’s leasing activity did, however, slow for the fourth increased by 40 basis points and it continues to have a positive consecutive quarter, with leasing activity at 427,619 SF (a fi fth of net absorption of a collective 1,269,756 total for the past three which was in sublet deals). Berkley Insurance leased 18,214 SF consecutive quarters. SL Green Realty retained Pandora Media at the (375 ) with rents starting for the largest lease renewal and expansion in the submarket at in the high $100s in a 10-year lease. Medallion Financial Corp. 125 Park Avenue for $65-$70/rsf on 103,515 SF. Additionally the renewed its lease at 437 Madison for 17,339 SF with rents city’s largest landlord and NYC REIT signed investment advisory commencing in the high $90s per square foot. service PJT Partners at 280 Park Avenue for 42,849 SF. Clarion Partners and Alchemy-ABR Investments purchased a leasehold Overall asking rents in the Rockefeller Plaza submarket interest in 211 E 43rd St. for $99M. The Mt. Sinai Hospital sold decreased by $2.73, even with availability down by 120 basis off a 44,779 SF offi ce condo for $603 psf to Marcus & Pollack points. The submarket had its fi fth consecutive quarter of LLP at 633 Third Avenue. positive net absorption with a collective total of 925,306. In one of the more notable signings, the Japanese company Itocho Vacancy in Midtown East (aka Plaza District East) increased leased 44,100 SF at the Mitsui Building (1251 Avenue of the by 30 basis points, while availability remained steady with a Americas) in a 10-year deal. negative net absorption of 67,592. Leasing activity hasn’t been this low since Q3 2014, with 284,786 SF leased this quarter Times Square direct rents edged up by $1.05 since last quarter, compared to last quarter with 729,731 SF. The sublease market while experiencing large increases in vacancy and availability, continued to tighten with a 30-basis point drop in availability and by 130 and 50 basis points. For the fourth consecutive quarter a vacancy of only 0.3%. Direct asking rents increased by $0.98. Times Square had a negative net absorption, although the Rudin Management completed its renovations at 560 Lexington market remains heavily active in leasing activity. The NBA Ave. Down the street at 570 Lexington, Strathspey Crown Player’s Association leased 47,234 SF at Durst’s 1133 Avenue Holdings signed a 10-year lease with the Feil Organization for of the Americas for rents commencing in the $70s in a 21-year 16,000 SF. Across the street at 575 Lexington, a divestment of deal. Kamber Management also purchased Tower 45 (120 West a 75% stake by Normandy RE and NY Life Insurance Co. was 45th Street) for $365M from SL Green Realty.

4 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC MIDTOWN LEE NYC MANHATTAN TREND TRACKER 3Q2015

Midtown Vacancy and Availability 16.0% 14.0% 12.0% 10.9% 10.0% 8.0% 6.0% 7.3% 4.0% 2.0% 0.0% 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015

Vacancy Availability 10Y Vacancy Avg. 10Y Availability Avg.

Midtown Leasing Activity 8,000,000 7,000,000 6,000,000 5,000,000 4,276,765 4,000,000 3,000,000 2,000,000 1,000,000 - 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015

SF Leased 10Y Avg.

Midtown Net Absorption 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 (500,000) (1,000,000) (1,500,000) (2,000,000) (2,500,000) 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015

5 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC MIDTOWN SOUTH LEE NYC MANHATTAN TREND TRACKER 3Q2015

idtown South continues to remain the strongest construction at 860 Washington Street with Romanoff Equities MManhattan market, with low vacancy and availability and Property Group Partners, the new Class A building will rates. Vacancy did increase by 10 basis points and availability soon be available for occupancy. Horizon Media expanded at decreased by 20 basis points. Direct rents only increased by One Hudson Square with 34,412 SF. The San Francisco based $0.76. Total net absorption remained positive for two years home furnishings retailer One Kings Lane leased 51,576 SF at now. New construction remains a focal point with over six Jack Resnick & Sons’s 315 Hudson Street LaSalle Investment million square feet under construction (mostly in the Hudson Management acquired a 34,742 SF offi ce penthouse condo at Yards submarket). Overall asking rents increased in four of 99 Hudson Street for $1,400 per-square-foot. the six submarkets. Vacancy in Murray Hill decreased by 70 basis points to 4.3%, Chelsea’s availability continued to decrease, down 40 basis while availability increased by 70 basis points. This is the third points since last quarter. Its vacancy rate increased 30 basis consecutive quarter that availability has risen, going from 6.2% points. The submarket remains steady, as it was last quarter, end of 2014 to 8.3% Q3 2015. Overall, direct and sublet asking with overall asking rents only increasing by $0.20. It experienced rents have decreased. Overall asking rent have been lowered a negative net absorption of 68,170 and leasing activity cut more by $1.38. Most notable leasing took place between Houghton than half of what it was last quarter. Teknion Corp. renewed Miffl in Harcourt and Cohen Brothers Realty at 3 Park Ave. The its lease with SL Green Realty at 641 Avenue of the Americas giant book publisher expanded by 40,343 SF for 10 years with for 22,000 SF on a 10-year deal. Additionally, TAMI tenant Infor asking rents in the low $60s. It now has a combined 90,000 SF took 21,981 SF at the same building. Vornado Realty Trust on four fl oors. acquired the Otis Elevator Building and its adjacent garage at 260 Eleventh Ave. for $110M on a 99-year ground lease. The Penn Station-Garment District had a great quarter with a decreased vacancy and availability, positive net absorption, The Gramercy and Flatiron submarket continued to tighten its a high leasing activity and an increase in overall asking rents. vacancy with a 1% decrease since Q1. Availability decreased by Vacancy is down by 40 basis points and availability by 20, with 70 basis points since last quarter, and is the lowest it’s been since a combined positive absorption of 467,829 for the past two the beginning of 2013, at 7.5%. Overall asking rent increased quarters and 907,921 SF of leasing activity. The submarket saw by slightly over $1. The submarket experienced a high leasing a half-a-dollar increase in asking rents. LinkedIn is expanding activity of 1,581,390 SF year-to-date. Rockrose Development at the increasing its offi ces to cover Corp. signed the fantasy sport giant Fanduel to a 41,013 SF 124,125 SF for ten years. The micro-market of Hudson Yards lease at 300 Park Avenue South. The talent agency William fi nally had the breaking news of 10 Hudson Yards topping out. Morris Endeavor leased 33,000 SF for 15 years at the VaynerMedia took space at the new Class A property with Metropolitan Life Insurance Plaza (11 Madison Avenue), which 88,091 SF on two fl oors. Vanbarton Group acquired 31 Penn was recently acquired by SL Green Realty in a $2.285 billion deal. Plaza for close to $596 per square foot from Savanna.

Direct asking rents in Tribeca and Hudson Square have risen SoHo and NoHo had a vacancy decrease of 70 basis points, $2.63 since last quarter. The submarket, however, drove with vacancy down for the second consecutive quarter. The vacancy up by 190 basis points and a slight bump in availability submarket remains heavily active and hot among TAMI tenants, by 10 basis points. Its continued net absorption is still in the driving direct asking prices by $8.32. The submarket continued negative, with 375,235 this quarter alone. With 120,413 SF under its positive net absorption for the seventh consecutive quarter.

6 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC MIDTOWN SOUTH LEE NYC MANHATTAN TREND TRACKER 3Q2015

Midtown South Vacancy and Availability 14.0% 12.0% 9.7% 10.0% 8.0% 6.0% 4.0% 6.2% 2.0% 0.0% 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 Vacancy Availability 10Y Vacancy Avg. 10Y Availability Avg.

Midtown South Leasing Activity 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,039,763 3,000,000 2,000,000 1,000,000 - 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015 SF Leased 10Y Avg.

Midtown South Net Absorption 1,000,000 800,000 600,000 400,000 200,000 0 (200,000) (400,000) (600,000) (800,000) (1,000,000) (1,200,000) 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015 Net Absorption

7 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC DOWNTOWN LEE NYC MANHATTAN TREND TRACKER 3Q2015

he Downtown market continued to improve this quarter group NFF (Nonprofi t Finance Fund) signed a 15-year lease at Tas it did last quarter, with both vacancy and availability 5 Hanover Square for 14,126 SF. Part of the move was strategic decreasing. Vacancy dropped to 11%, which is still high in getting a cost-effective space, moving from Midtown. compared to the Midtown and Midtown South markets. Savanna sold its 480,000 SF offi ce tower at 100 Wall Street Availability is down by a full 100 basis points since Q1. Overall to the Cornerstone Group for $275M, or $573 per square foot. asking rents remained steady since Q1, hovering between The property was 97% leased at the time of the transaction. $59-$60 psf. We’ve witnessed another quarter of positive net Alphadyne Asset Management expanded its footprint at RFR absorption. Downtown’s sublet vacancy continued to decrease Realty’s 17 State Street to 29,386 SF. The most notable deal for the third consecutive quarter (0.4%), however subleases of the quarter was between Fosun International and Ironshore accounted for 7% of completed transactions. Holdings at 28 Liberty Street. Ironshore leased over 100,000 SF comprising three fl oors in a 15-year deal. Asking rents in the City Hall and Insurance District have increased. Direct asking rents increased by $1.24 and overall The popularity of the World Trade Center and World Financial asking rents by $0.77. The sublet market is only 0.2% of Center remains high among tenants looking for a move from inventory with average sublet rents down to $39.64. The market Midtown or Midtown South. With average direct asking rents experienced its fi rst negative net absorption since Q3 2013, at hovering between $67 to $70 psf since Q1, the submarket 35,519; and total leasing activity was almost cut in half to below fi nally passed the 500,000 SF mark in leasing activity since Q3 100,000 SF. According to private sources, KBS Realty Advisors 2014 (existing buildings only). Experiencing its fi rst negative net and Savanna renewed FT Interactive Data for 44,500 SF in 110 absorption since Q2 2014, the market’s vacancy increased by William Street. Most of the transactions completed were below 30 basis points. Its availability decreased to 15.6% from 16.5%, 10,000 SF; for example, Ebiquity Inc. took 7,564 SF for 10 years Q-to-Q. Securities brokerage and fi nancial services fi rm KCG at the same building. Holdings leased 169,000 SF in the World Financial Center (300 Vesey Street). The move highlights a growing fi rm relocating The Financial District saw great improvement, with a 1% from Jersey City to Downtown Manhattan. Fashion giant decrease in vacancy, and a 90 basis point drop in availability, Gucci signed a 15-year lease for 83,964 SF at 195 Broadway. continuing its positive net absorption from last quarter with a The asking rents were in the mid-$50s. The credit rating and collective absorption of 908,820 SF. This offset the negative research company Moody’s leased 75,312 SF at One World net absorption of 1.1M experienced in Q1. Leasing activity Trade Center. This makes One World Trade Center Moody’s increased close to 18% since last quarter. Direct asking rents second offi ce footprint in the WTC complex, with the fi rst have increase $0.69 since Q1. The community development located at 7 World Trade Center.

8 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC DOWNTOWN LEE NYC MANHATTAN TREND TRACKER 3Q2015

Downtown Vacancy and Availability 18.0% 16.0% 14.0% 12.3% 12.0% 10.0% 8.0% 9.1% 6.0% 4.0% 2.0% 0.0% 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 Vacancy Availability 10Y Vacancy Avg. 10Y Availability Avg.

Downtown Leasing Activity 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,517,007 1,500,000 1,000,000 500,000 - 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015 SF Leased 10Y Avg.

Downtown Net Absorption 4,000,000

3,000,000

2,000,000

1,000,000

0

(1,000,000)

(2,000,000)

(3,000,000) 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 20052006200620072007200820082009200920102010201120112012201220132013201420142015

9 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC CONSTRUCTION LEE NYC ACTIVITY MANHATTAN TREND TRACKER 3Q2015

Under Construction Office Property Developer Submarket Square Feet Class Est. Delivery 3 World Trade Center Silverstein Properties World Trade Center 2,861,402 A 2018 30 Hudson Yards Related Companies Penn Station-­‐Garment 2,600,000 A 2019 400 West 33rd Street (One ) (North Tower) Brookfield Properties Penn Station-­‐Garment 2,300,000 A 2019 10 Hudson Yards (Approaching Completion) Related Companies Penn Station-­‐Garment 1,725,250 A 2016 Related Companies Penn Station-­‐Garment 1,556,136 A 2018 GreenOak Real Estate Plaza District 670,000 A 2018 855 Sixth Avenue Durst Organization Penn Station-­‐Garment 204,950 A 2016 860 Washington Street (Approaching Completion) Romanoff Equities Hudson Square | Tribeca 120,413 A 2015 430 West 15th Street Atlas Capital Group Chelsea 85,202 B 2015

Major Renovations Office Property Owner Submarket Square Feet Class Completion 390 Madison Avenue Clarion Partners Grand Central 858,710 A 2016 75 Rockefeller Plaza RXR Realty Rockefeller Plaza 623,000 A 2015 110 Wall Street Rudin Management Financial District 292,627 A 2016 125 West 25th Street Waterbridge Capital Chelsea 138,000 B 2015 701 Seventh Avenue Witkoff Group Rockefeller Plaza 112,000 B 2017 45 West 27th Street Edison Properties Gramercy | Flatiron 66,797 B 2015 13-­‐15 West 27th Street Edison Properties Gramercy | Flatiron 65,578 B 2015 133 West 52nd Street MRP Realty, Inc. Rockefeller Plaza 55,744 A 2015

Pre-­‐Construction Phase Office Property Sponsor Submarket Square Feet Class 400 West 33rd Street (One Manhattan West) (South Tower) Brookfield Properties Penn Station-­‐Garment 3,000,000 A Silverstein Properties World Trade Center 2,800,000 A Related Companies Penn Station-­‐Garment 2,300,000 A Moinian Group Penn Station-­‐Garment 1,869,500 A Avenue SL Green Realty Corp. Grand Central 1,763,110 A 435 Tenth Avenue Tishman Speyer Penn Station-­‐Garment 1,259,000 A 451 Tenth Avenue MADDD Equities Penn Station-­‐Garment 415,000 A 57 Eleventh Avenue Youngwoo & Associates Chelsea 300,000 A (Pier 57) 510 West 22nd Street Albanese Organization Chelsea 170,000 A 61 Ninth Avenue (Prince Tower) Vornado Realty Trust Chelsea 153,754 A 540 West 26th Street Savanna Chelsea 128,367 A 600 West 58th Street Durst Organization Midtown West 112,552 A 2 Pike Street Yeung Real Estate Dev. SoHo | NoHo 93,000 A 330 East 62nd Street Joy Construction Corp. Midtown East 90,505 B 315 East 46th Street Fisher Brothers Management Midtown East 75,170 B 122 West 3rd Street Minetta Lane Owners SoHo | NoHo 60,000 A

Only Properties with over 50,000 are Square Feet listed.

10 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC NOTABLE LEE NYC INVESTMENT SALES MANHATTAN TREND TRACKER 3Q2015

Office Property Submarket Class SF Buyer Seller Price $PSF 11 Madison Avenue CIM Group Flatiron A 2,348,115 SL Green Realty $ 2,285,000,000 $973 (MetLifeOffice Property Ins. Plaza) Submarket Class SF Buyer Sapir OrganizationSeller Price $PSF 11 Madison Avenue Angelo, Gordon & Co. NY LifeCIM Insurance Group Co. 575 Lexington Avenue MidtownFlatiron East A 2,348,115739,040 SL Green Realty $ 2,285,000,000$510,000,000 $690$973 (MetLife Ins. Plaza) George Comfort & Sons NormandySapir RealOrganization Estate Fund III 163 Front Street Angelo, Gordon & Co. NY Life Insurance Co. 575 Lexington Avenue InsuranceMidtown EastDist. B/CA 739,040100,213 Oceanwide Holdings Co. Howard Hughes Corp. $510,000,000$390,000,000 $3,891$690 80 George Comfort & Sons Normandy Real Estate Fund III 120163 West Front 45th Street Street InsuranceTimes Square Dist. B/CA 458,446100,213 KamberOceanwide Management Holdings Co. Co. HowardSL Green Hughes Realty Corp. $365,000,000$390,000,000 $3,891$796 80(Tower South Street45) 12051 West Astor 45th Place Street FG Asset Management TimesNoHo Square A 458,446400,000 Kamber Management Co. RockwoodSL Green RealtyCapital $299,400,000$365,000,000 $748$796 (49.9%(Tower Interest) 45) Korean Teachers Credit Union 550 Washington51 Astor Place Street FG Asset Management HudsonNoHo Square AB 1,294,802400,000 Westbrook Partners FortressRockwood Investment Capital Group $287,500,000$299,400,000 $222$748 (St.(49.9% John's Interest) Center) Korean Teachers Credit Union 550 100Washington Wall Street Street Financial Dist. A 520,000 Cornerstone Real Estate Savanna $275,000,000 $528 132 West 31st Street Hudson Square B 1,294,802 Westbrook Partners Fortress Investment Group $287,500,000 $222 (St. John's Center) Penn Station B 444,676 Vanbarton Group Savanna $265,000,000 $595 100(31 PennWall StreetPlaza) Financial Dist. A 520,000 Cornerstone Real Estate Savanna $275,000,000 $528 132 West 31st Street Sherwood Equities 370 Lexington Avenue GrandPenn StationCentral AB 261,000444,676 UnizoVanbarton Holdings Group Company Savanna $247,000,000$265,000,000 $946$595 (31 Penn Plaza) JPMorgan Asset Management 104-110 Greene Street Sherwood Equities 370 Lexington Avenue GrandSoHo Central AB 261,000193,200 UnizoSL Holdings Green Realty Company Goldman Properties $229,500,000$247,000,000 $1,187$946 (90% Interest) JPMorgan Asset Management 104-110511 Fifth Greene Avenue Street Aurora Capital GrandSoHo Central B 125,632193,200 SL Green Realty GoldmanKurt Schimmel Properties $229,500,000$174,000,000 $1,187$1,385 (90%(Leasehold) Interest) Wharton Properties 18511 West Fifth 33rd Avenue Street Aurora Capital GrandPenn StationCentral BC 125,632187,100 Carlyle Group KamberKurt Management Schimmel Co. $111,000,000$174,000,000 $1,385$593 20-28 (Leasehold)West 33rd Street Wharton Properties 21118 West East 33rd43rd Street Clarion Partners GrandPenn StationCentral C 187,100211,000 Carlyle Group KamberMeadow Management Partners Co. $111,000,000$99,000,000 $593$469 20-28 (Leasehold)West 33rd Street Alchemy-ABR Invt. Partners 260211 EleventhEast 43rd Avenue Street Clarion Partners GrandChelsea Central C 211,000227,973 Vornado Realty Trust MeadowGould Investors Partners $99,000,000$80,000,000 $469$350 (Otis(Leasehold) Elevator Bldg) Alchemy-ABR Invt. Partners 26010 West Eleventh 47th Avenue Street Grand Central B 71,738 Extell Development Kenart Realties Inc. $74,350,000 $1,036 Chelsea C 227,973 Vornado Realty Trust Gould Investors $80,000,000 $350 (Otis88 University Elevator PlaceBldg) NoHo B 82,000 Elie Tahari Himmel + Meringoff Properties $70,000,000 $853 434 West 33rd Street 10 West 47th Street GrandPenn StationCentral AB 103,00071,738 BrookfieldExtell Asset Development Management PlannedKenart Realties Parenthood Inc. $74,350,000$69,600,000 $1,036$675 88 (CondoUniversity Unit) Place NoHo B 82,000 Elie Tahari Himmel + Meringoff Properties $70,000,000 $853 434 West 33rd Street Sitt Asset Management 113 Spring Street PennSoHo Station AB 103,00018,550 BrookfieldMorgan Asset Stanley Management (MSREI) Planned Parenthood $68,000,000$69,600,000 $3,665$675 (Condo Unit) Centurion Realty Sitt Asset Management 113 Spring Street SoHo B 18,550 Morgan Stanley (MSREI) $68,000,000 $3,665 Centurion Realty

Selective Bulk Portfolio sales and condominium units are excluded.

Selective Bulk Portfolio sales and condominium units are excluded.

11 MANHATTAN TREND TRACKER 3RD QUARTER 2015 LEE & ASSOCIATES NYC Lee & Associates NYC 600 Madison Avenue, Third Floor , NY 10022 | 212.776.1200 www.leeassociatesnyc.com James Wacht President 212.776.1202 [email protected] Peter Braus Managing Principal 212.776.1203 [email protected] Henry Abramov Research Manager [email protected]

W i t h o f fi c e s across the nation, the Lee & Associates ® group of independently owned and operated companies is the largest provider of regional commercial real estate services in the United States and the fourth-largest full-service commercial real estate organization overall.