Northern Virginia Quarterly Overview

Northern Virginia Quarterly Market Report

4th 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

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

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

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

Jae Lee Market Spotlight, 4Q 2019: Senior Vice President [email protected] | 202.513.6700 Northern Virginia...... 11

Alexandria...... 13 Stoddie Nibley Senior Vice President Crystal City...... 15 [email protected] | 703.284.5884 Fairfax...... 17 Correll Caulfield Loudoun County...... 19 Vice President [email protected] | 703.284.5886 Merrifield...... 21 Jed Prossner National Landing...... 23 Vice President Old Town Alexandria/Eisenhower Avenue...... 24 [email protected] | 703.284.5864

Reston - Herndon...... 26 Jack Redmond Senior Associate Rosslyn - Ballston Corridor...... 28 [email protected] | 703.284.5880 Route 28 North...... 30 Brenda Sosa Route 28 South...... 32 Leasing Associate [email protected] | 703.284.5881 Springfield...... 34 Tysons Corner...... 36 Ben Hickey Leasing Associate 13 [email protected] | 703.284.3364

Sarah Rossero Market Research Associate [email protected] | 703.284.3354

Jacqueline Spross Market Research Associate [email protected] | 703.284.3635

2 Metropolitan D.C. Market Overview 4th Quarter 2019

Overall Market Summary

The Washington, DC Metropolitan commercial real estate market is comprised of approximately 425.4 million square feet of rentable office space located in the District of Columbia, Northern Virginia, and Suburban Maryland. totaling 824,921 square feet, delivered. The largest addition was 250 Massachusetts Avenue, NW - The total vacancy rate ticked up to 13.3% at the end Capitol Crossing delivering 559,921 square feet (0% of the fourth quarter, while the market recorded pre-leased) to the Capitol Hill submarket in DC. 668,949 square feet of net absorption. Northern Virginia posted the largest amount of net absorption There were twenty-one sale transactions in the with approximately 602,000 square feet absorbed fourth quarter, totaling $1.96 billion. The largest sale in the fourth quarter. was in the District with 901 15th Street, NW trading for $209,100,000 ($817 psf). Leasing activity for the quarter totaled 5,005,459 square feet. The largest lease executed was a new Average asking rental rates decreased $0.42 to 308,989-square-foot lease signed by the GSA - DOJ $38.45 per square foot, Full Service. at 601 D Street, NW in Washington, DC. From November 2018-November 2019 the At the end of the quarter, there was 9,537,394 Washington, DC MSA had a net increase of 61,100 square feet under construction, with 66% of the jobs (57,500 private sector, 3,600 government) space pre-leased. Two buildings, totaling 753,628 representing 1.8% growth YOY, while the square feet, broke ground; while two buildings, unemployment rate decreased to 2.8%.

Metro DC VA MD Area (YTD)

Direct Vacancy 11.3% 13.0% 13.1% 12.4% (4Q 2019)

Total Vacancy 12.5% 13.6% 13.8% 13.3% (4Q 2019)

Total Net Absorption 491,028 2,522,677 111,669 3.1 M SF (YTD 2019)

Leasing Activity 10,720,637 11,237,970 3,753,095 25.7 M SF (YTD 2019)

Outlook

The Metropolitan Washington, DC office Overall, the DC Metro had a strong 2019 market slowed down slightly in the final quarter and that trend is expected to continue into of 2019. Total vacancy ticked up, while there was 2020. Amazon will continue to have a trans- a slight decrease in absorption, leasing activity, formative affect on National Landing impacting; and sales compared to the third quarter. Northern leasing, absorption, rent growth, employment, Virginia lead the region this quarter in absorption commercial and residential development. Also in (with 602,000 sf absorbed), leasing activity (2.4 Virginia, Phase II of the Silver Line is scheduled M sf), and sales ($745.25 M), while DC lead in to complete construction and provide passenger new construction with two buildings delivering service to Dulles Airport and Loudoun County by (totaling 824,921 sf). Market fundamentals Summer 2020. The GSA is expected to sign longer strengthen overall in 2019 as vacancy ticked term leases (15-20 years) and avoid short term down 0.7% and absorption increased 63% (or 1.2 extensions, when possible, to reduce costs. In M sf) compared to year-end 2018. The regional Maryland, the bio-tech industry should continue economy strengthened as well with the DC Metro to be an economic driver, while in DC, vacancy area experiencing 1.8% job growth YOY and rates may start to stabilize in the CBD and East the unemployment rate dropping to 2.8% (the End due to a very limited supply of new buildings national average is 3.5%). The DC Metro ranked scheduled to deliver over the next three years 17th nationally for unemployment in metro areas (only 1.3 M sf). with populations over 1 million.

Market Summary

The Northern Virginia office market consists of 4Q 2019 3Q 2019 4Q 2018 1,524 buildings over 25,000 square feet, totaling approximately 186.7 million square feet of rentable space. Direct 13.0% 12.9% 14.3% The largest non-GSA lease signed during the fourth Vacancy quarter was a 207,000-square-foot new lease by ICF at Reston Station - Phase III - 1902 Reston Total Metro Plaza. 13.6% 13.6% 15.0% Vacancy The largest lease signed by the GSA was a 60,421-square-foot renewal at Herndon Square II - Net 535 Huntmar Park Drive. Absorption 2,522,677 SF 1,920,369 SF 1,389,691 SF (YTD) Building sales volume totaled $745,250,000 during the fourth quarter. The largest transaction was the sale of the Skyline Office Portfolio - 5107- Leasing 5275 Leesburg Pike in the Falls Church submarket. Activity 11.2 M SF 8.8 M SF 13.4 M SF Somera Road acquired the portfolio from CW (YTD) Capital for $210,700,000 ($78.00 psf). The portfolio was 49.2% occupied at the time of sale. The second Under 3.8 M SF 3.0 M SF 1.8 M SF largest sale was 1525 Wilson Boulevard in the Construction Rosslyn-Ballston Corridor submarket. The Meridian Group acquired the building from The Blackstone Group for $113,150,000 ($355.27 psf). The building Deliveries 627,777 SF 627,777 SF 1,675,000 SF was 78.4% occupied at the time of sale. The third (YTD) largest sale was of Centerstone @ Tysons - 1550 Westbranch Drive in the Tysons Corner submarket. KAMCO Investment Company acquired the building from Griffith Properties for $80,500,00 ($530.00 Rental Rates $32.81 PSF $33.08 PSF $33.00 PSF psf). The building was 100.0% occupied at the time of sale and traded at a 5.00% Cap Rate. U/C Percent Inside the Beltway, there were 40 buildings 74.7% 72.5% 62.1% marketing 50,000 square feet or greater of Pre-Leased contiguous space available at the end of the fourth quarter 2019, compared to 37 from the third quarter 2019. Outside the Beltway, there were 76 buildings marketing 50,000 square feet or greater of contiguous space available at the end of the fourth quarter 2019, compared to 75 from the third quarter 2019.

Vacancy Rate Deliveries vs. Under Construction Total vacancy in Northern Virginia remained flat at 5 13.6% from the third quarter 2019 to the fourth quarter 2019, and has decreased from 15.0% since fourth quarter 2018. At the end of the fourth quarter 2019, 4 25.3 million square feet was vacant and available. 3 Direct vacancy has increased from 12.9% in the third

quarter 2019 to 13.0% in the fourth quarter 2019, and SF (Millions) 2 has decreased from 14.3% since fourth quarter 2018.

At the end of the fourth quarter 2019, 24.2 million 1 square feet was vacant and available for direct lease.

0 The sublet vacancy rate in Northern Virginia decreased '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19

from 0.7% from the third quarter 2019 to 0.6% in the Deliveries Under Construction fourth quarter 2019, and has decreased from 0.7% since fourth quarter 2018. At the end of the fourth quarter 2019, 1.1 million square feet was vacant and available for sublease. Deliveries | Net Absorption | Vacancy Rate Total vacancy for Class A product in Northern Virginia

was 15.2% while Class B product was 10.9% for the 3.0 20

quarter. Class A vacancy increased from 14.9% in the 2.5 18 third quarter 2019, and Class B vacancy decreased 2.0 16 from 11.5% in the third quarter 2019.

1.5 14 (%) Rate Vacancy Absorption & Gross Leasing 1.0 12 Northern Virginia recorded 602,308 square feet 0.5 10

SF (Millions) of net absorption in the fourth quarter of 2019. A 0.0 8 significant contributor to the positive absorption was a -0.5 6 59,528-square-foot move-in by Deloitte at Waterview -1.0 4 Tower - 1919 N. Lynn Street. -1.5 2 -2.0 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 Leasing activity at the end of the fourth quarter 2019 totaled 2,403,087 square feet. Eight of the top ten Delivery Net Absorption Direct Vacancy Rate leases signed in the fourth quarter were by private sector tenants.

The ten largest leases signed during the fourth quarter Vacancy by Building Class ranged in size from 207,000 square feet to 50,350 square feet, eight of these largest transactions were renewals. 150 20

The Rosslyn-Ballston Corridor submarket recorded 120 Class VacantBuilding of (%) 15.2% 15 the strongest absorption of the quarter with 258,859 square feet absorbed. The positive absorption for the 90 quarter was driven by a 59,528-square-foot move-in 10.9% 10

by Deloitte at Waterview Tower - 1919 N. Lynn Street. SF (Millions) 60

5 30 3.3%

0 0 A B C

101 Constitution Ave., Suite 325 East | Washington D.C. | 202.513.6700 lpcwashingtondc.com 6 4300 Wilson Blvd., Suite 200 | Arlington, VA | 703.522.4600 8120 Woodmont Ave., Suite 560 | Bethesda, MD | 301.304.8300 Northern Virginia 4th Quarter 2019 Construction Outlook A total of fourteen buildings were under A majority of the leasing activity for the fourth quarter construction in Northern Virginia at the end of the 2019 were private sector tenants, who signed eight fourth quarter, totaling approximately 3.8 million of the ten top leases. However, the GSA signed the square feet. eighth top lease this quarter in Northern Virginia.

Tysons Central - 1750 Tysons Central Street The Northern Virginia region has experienced strong broke ground this quarter in the Tysons Corner positive absorption this quarter, registering 602,308 submarket. The 383,628-square-foot building is square feet of net move-ins. Several notable set to deliver 4Q 2021. move-ins contributed to this level of absorption during the quarter including a 51,422-square-foot Buildings scheduled to deliver next quarter, 1Q move-in by Spaces at The Loft - 1640 Boro Place 2020, include, 4040 Wilson Boulevard, Loft Office and a 59,528-square-foot move-in by Deloitte at at Market Common - 1650 Edgewood Street, Phase Waterview Tower - 1919 N. Lynn Street. II - Broderick One at Loudoun Gateway - 22365 Broderick Drive, and 6595 Springfield Center Drive. The Northern Virginia region gained 25,800 net new jobs from November 2018 - November 2019, Other buildings set to deliver in 2020 include, representing 1.72% growth YOY. Professional & Reston Station - Ph II - 1906 Reston Metro Plaza, Business Services had the most with 14,400 new jobs. 17Fifty - 1750 Presidents Street, TSA HQ - 6595 The Government added 1,200 jobs. As of November Springfield Center Drive, Penrose II - 14401 Penrose 2019, the unemployment rate for Northern Virginia Place, and the General Dynamics HQ - 11011 Sunset declined from the previous year at 2.1%. The national Hills Road. unemployment rate decreased to 3.5%.

Buildings scheduled to deliver in 2021 include, Alexandria Gateway O2 - 4600 King Street, APTA Centennial Center - 3030 Potomac Avenue, and Reston Station - Phase III - 1902 Reston Metro Plaza. Lastly, Office Bldg A - Sunset Hills Road @ Town Center Boulevard is expected to deliver in 2022, as well as, the Institute for Defense Analyses - 701. E Glebe Road.

Top Ten Leases Included in the Top Ten leases of the fourth quarter 2019 were eight renewals, one relet, and one new lease. The largest lease transaction of the quarter was a 207,000-square-foot new lease signed by ICF at Reston Station - Ph. III - 1902 Reston Metro Plaza in the Reston-Herndon submarket. The second largest lease of the quarter was a 179,856-square-foot renewal by Capital One Services at Towers Crescent - 8020 Towers Crescent Drive in the Tysons Corner submarket. The third largest lease of the quarter was a 131,388-square-foot renewal signed by the CIA at Lake Fairfax Business Center 5 - 1759 Business Center Drive in the Reston-Herndon submarket. A 97,449-square- foot renewal was signed by CACI International at Three Ballston Plaza - 1100 N. Glebe Road in the Rosslyn-Ballston Corridor submarket. Capital One also signed a renewal/expansion for 76,388 square feet at Towers Crescent/A - 8000 Towers Crescent in the Tysons Corner submarket. Also, a 75,000-square-foot relet was signed by Facebook at SOMA-C - 1818 Library Street in the Reston-Herndon submarket. SAIC leased 73,444 square feet at 1953 Gallows Road in the Tysons Corner submarket. Also, GSA signed a 60,421-square-foot renewal at Herndon Square II - 535 Huntmar Park Drive in the Reston-Herndon submarket. Additionally, Pricewater Coopers signed a renewal for 53,578 square feet at The Corporate Center @ Tysons II - 1800 Tysons Boulevard in the Tysons Corner submarket. Lastly, Service Source Central Fairfax signed a renewal for 50,350 square feet at Lake Building 4 - 6860 Commercial Drive in the Springfield submarket.

1902 Reston Metro 8020 Towers Reston Station-Ph. III Towers Crescent Plaza Crescent Drive Tenant ICF Tenant Capital One Services

Size 207,000 SF Size 179,856 SF Type New Lease Type Renewal

Lake Fairfax 1759 Business Business Center 5 Center Drive Three Ballston Plaza 1100 N. Glebe Road Tenant CIA Tenant CACI International Size 131,388 SF Size 97,449 SF

Type Renewal Type Renewal

8000 Towers Towers Crescent/A SOMA-C 1818 Library Street Crescent Tenant Capital One Tenant Facebook

Size 76,388 SF Size 75,000 SF

Type Renewal/Expansion Type Relet

535 Huntmar Park 1953 Gallows Road Herndon Square II Drive Tenant SAIC Tenant GSA

Size 73,444 SF Size 60,421 SF

Type Renewal Type Renewal

The Corporate Office 1800 Tysons 6860 Commercial Lake Building 4 Center @ Tysons II Boulevard Drive Service Source Tenant Pricewater Coopers Tenant Central Fairfax Size 53,578 SF Size 50,350 Type Renewal Type Renewal

Northern Virginia Sales Transactions

Centerstone @ 1550 Westbranch 1655 N. Fort Myer Skyline Office 5107-5275 1525 Wilson Boulevard Park Place Portfolio Leesburg Pike Tysons Drive Drive Rosslyn-Ballston Submarket Rosslyn-Ballston Corridor Submarket Tysons Corner Submarket Submarket Falls Church Corridor Date Sold December-2019 Date Sold October-2019 Date Sold October-2019 Date Sold October-2019 $113,150,000 $210,700,000 Price $80,500,000 $66,500,000 Price ($355.27 psf) Price Price ($78.00 psf) ($530.00 psf) ($373.46 psf) The Meridian Buyer KAMCO GreenOak Real Buyer Somera Road Group Buyer Investment Buyer Estate Advisors / The Blackstone Seller Company Altus Seller CW Capital Group Seller Griffith Properties Seller Tishman Speyer RBA 2,691,960 SF RBA 318,494 SF RBA 151,949 SF RBA 178,064 SF Class A Class A Class A Class A Occupancy 49.2% Occupancy 78.4% 8 Building Occupancy 100.0% Occupancy 64.6% Notes Portfolio Sale Cap Rate 5.00%

3550 S. Clark Loudoun Gateway 45195 & 45200 12450 Fair Lakes 2100 Reston Parkway National Gateway II Fair Lakes 2 Street II & III Business Court Circle Submarket Reston Submarket Crystal City Submarket Rt. 28 North Submarket Fairfax Center Date Sold December-2019 Date Sold December-2019 Date Sold October-2019 Date Sold November-2019 $33,350,000 $59,850,000 $45,250,000 $40,750,000 Price Price Price Price ($186.66 psf) ($269.98 psf) ($251.58 psf) ($219.58 psf) Harbert Wheelock Street Sackman Turnbridge Buyer Buyer Buyer Buyer Management Capital Enterprises, Inc. Equities Corp. The Meridian Seller Seller Velocis Seller The Buford Group Los Angeles Group RBA 179,864 SF RBA 185,581 SF Seller County RBA 221,686 SF Retirement Assoc. Class A Class A Class A RBA 178,667 SF Occupancy 100.0% Occupancy 100% Occupancy 14.4% Class A Cap Rate 4.98% Occupancy 76.2% 2 Building Notes Portfolio Sale

Northern Virginia Sales Transactions

3130 Fairview Park Drive 6201 & 6211 700 South Washington Street Greenbriar CentreMed I & II Centreville Road Corporation Center 13135 Lee Highway Old Town Submarket Merrifield Submarket 1 Submarket Rt. 28 South Alexandria Date Sold November-2019 Date Sold October-2019 Submarket Fairfax Center Date Sold December-2019 $22,000,000 $17,600,000 Price Price Date Sold November-2019 $20,800,000 ($292.36 psf) ($121.78 psf) Price ($393.44 psf) $13,100,000 Golden Eagle Cambridge Price Buyer ($112.37 psf) Buyer Development Buyer Artemis Hanover Group Seller DWS Buyer Prescott Group Harrison Street Seller Cigna Corporation Seller Capital RBA 60,200 SF Seller CW Capital RBA 180,659 SF RBA 52,104 SF Class A RBA 116,581 SF Class A Class B Occupancy 88.8% Class B Occupancy 40.0% Occupancy 91.4% Cap Rate 7.00% Occupancy 77.1% Part of 9 Building Notes Portfolio

High Ridge Office 3877 Fairfax Ridge 10400 Eaton Eaton Place Building Road Place

Submarket Fairfax Center Submarket Fairfax City

Date Sold November-2019 Date Sold November-2019 $11,200,000 $10,500,000 Price Price ($53.13 psf) ($101.94 psf)

Buyer Time Equities Kennwood Buyer Management Guggenheim Seller Company, LLC Services Seller Polinger Co. RBA 210,811 SF RBA 103,173 SF Class B Class B Occupancy 32.8% Occupancy 81.2%

Northern Virginia 4th Quarter 2019

5 16 18 36 14

4 16 32 12

14 28 10

8 3 12 24 ($) Rate Asking 6 10 20

SF (Millions) 4 SF (Millions) 2

Vacancy Rate (%) Vacancy 8 16 2 6 12 0 1 4 8 -2

2 4 -4 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 Total vacancy in Northern Virginia remained flat 10 Year Averages (2009 - 2018) at 13.6% from the third quarter 2019 to the fourth quarter 2019, and has decreased from 15.0% since Total Absorption 845,679 SF / Year fourth quarter 2018. Direct vacancy has increased from 12.9% in the third quarter 2019 to 13.0% in the Deliveries (SF) 1.6 M SF / Year fourth quarter 2019, and has decreased from 14.3% since fourth quarter 2018. Leasing Activity 12.8 M SF / Year

Northern Virginia recorded 602,308 square feet of net absorption in the fourth quarter of 2019, Market Stats bringing the year-to-date absorption to 2,522,677 square feet. A significant contributor to the positive Inventory 186.7 M SF absorption was a 59,528-square-foot move-in by Deloitte at Waterview Tower - 1919 N. Lynn Street. Direct Vacancy 13.0% Leasing activity at the end of the fourth quarter 2019 Total Vacancy 13.6% totaled 2,403,087 square feet. Eight of the top ten leases signed in the fourth quarter were by private YTD 2019 Absorption 2.5 M SF sector tenants.

Inside the Beltway, there were 40 buildings YTD Leasing Activity 11.2 M SF marketing 50,000 square feet or greater of contiguous space available at the end of the Under Construction 3.8 M SF fourth quarter 2019, compared to 37 from the third quarter 2019. Outside the Beltway, there were 76 Percent Pre-Leased 74.7% buildings marketing 50,000 square feet or greater of contiguous space available at the end of the YTD 2019 Deliveries 627,777 SF fourth quarter 2019, compared to 75 from the third quarter 2019. 2009: 2018: YTD 2019: Asking Rental Rates $30.32 $33.00 $32.81 (Full Service) PSF PSF PSF

Under Construction

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

Rosslyn-Ballston Avalon Bay & 4040 Wilson Boulevard 240,000 SF 95,850 SF 60.1% 1Q 2020 Shooshan Corridor Vida Fitness

Loft Office at Market Common - Rosslyn-Ballston 136,172 SF 107,971 SF 20.7% 1Q 2020 Regency Centers None 1650 Edgewood Street Corridor

Phase II Broderick One at Loudoun Gateway - Route 28 North 56,025 SF 56,025 SF 0.0% 1Q 2020 LGV Group None 22365 Broderick Drive

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

Reston Station Phase II - CVS Pharmacy, Reston 195,987 SF 105,210 SF 46.3% 2Q 2020 Comstock 1906 Reston Metro Plaza Neustar Inc

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

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

Alexandria Gateway O2 - Alexandria 58,460 SF 24,573 SF 58.0% 1Q 2021 Weingarten Silver Diner 4600 King Street

Institute for Defense Analyses - Institute for Crystal City 370,000 SF 0 SF 100.0% 1Q 2022 Davis 701 E. Glebe Road Defense Analyses

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

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

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

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

6595 Springfield Center Dr Springfield 634,000 7,000 98.9% 1st Qtr '20 Boston Properties GSA-TSA

4th Quarter Start Totals

Broke Ground 4Q 2019 753,628 SF

Total Under Construction 3,760,725 SF

% Preleased 74.7% (Does not include condos)

Alexandria 4th Quarter 2019

0.8 25 35 1.5

0.7 20 28 0.6 1.0 Asking Rate ($) Rate Asking 0.5 Lorem ipsum 15 21

0.4 0.5 Vacancy Rate (%) Vacancy SF (Millions) 0.3 10 14 SF (Millions)

0.2 0.0 5 7 0.1

0.0 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 '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 Alexandria increased from 14.2% in the third quarter 2019 to 14.6% in the fourth quarter 2019, and has decreased from 14.8% since fourth 10 Year Averages (2009 - 2018) quarter 2018. Total vacancy has increased from 14.8% in the third quarter 2019 to 15.7% the fourth quarter Total Absorption 150,970 SF / Year 2019, and has increased from 15.1% since fourth quarter 2018. Deliveries (SF) 251,419 SF / Year The Alexandria submarket recorded -161,564 square Leasing Activity 774,678 SF / Year feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to 6,809 square feet. The negative absorption was driven Market Stats by a 10,390-square-foot move-out at the Torpedo Factory Office Building - 201 N. Union Street. Inventory 18.1 M SF The largest lease signed in the Alexandria submarket Direct Vacancy 14.6% in the fourth quarter was a 46,088-square-foot relet by Oliff PLC at 11 Canal Center Plaza. Total Vacancy 15.7% Alexandria Gateway O2 at 4600 King Street is set to YTD 2019 Absorption 6,809 SF deliver 1Q 2021. The 58,460-square-foot building is 58.0% preleased. YTD Leasing Activity 643,514 SF

Under Construction 58,460 SF

Percent Pre-Leased 58.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $33.37 $33.87 $34.13 (Full Service) PSF PSF PSF

Alexandria 4th Quarter 2019

Major Leases

Canal Center 3 11 Canal Center Plaza Edmonson Plaza 1701 Duke Street

Tenant Oliff PLC Tenant The Burgess Group

Size 46,088 SF Size 24,925 SF

Type Relet Type Renewal

Ballenger West 2050 Ballenger Avenue ASCD 1703 N. Beauregard Street

Tenant Catholic University Tenant The Goddard School

Size 18,563 SF Size 12,488 SF

Type Relet Type Relet

Canal Center 4 99 Canal Center Plaza

Tenant Robbins Gioia

Size 11,747 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

$17,600,000 Cambridge 700 S. Washington Street Alexandria October 2019 DWS A 88.8% 7.00% ($292.36 psf) Hanover

Under Construction

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

Alexandria Gateway O2 Alexandria 58,460 24,573 58.0% 1Q 2021 Weingarten Silver Diner 4600 King Street

Crystal City 4th Quarter 2019

2.0 0.500 32 48

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

0.000 -1.5 '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 Direct vacancy in Crystal City decreased from 13.3% in the third quarter 2019 to 11.2% in the fourth quarter 2019, and has decreased from 16.7% since fourth quarter 2018. Total vacancy has decreased 10 Year Averages (2009- 2018) from 13.6% the third quarter 2019 to 11.7% in the fourth quarter 2019, and has decreased from 16.9% Total Absorption -5,945 SF / Year since fourthquarter 2018. Deliveries (SF) 75,664 SF / Year The Crystal City submarket recorded 133,719 square feet of net absorption during the fourth quarter Leasing Activity 923,908 SF / Year of 2019, bringing the year-to-date absorption to 359,381 square feet. The positive absorption for the quarter was driven by a 24,000 square foot Market Stats move-in by the GSA at Crystal Gateway 1 - 1235 S. Clark Street. Inventory 11.3 M SF

The largest lease signed in the Crystal City Direct Vacancy 11.2% submarket this quarter was a 30,616-square-foot new lease by Winrock International at Crystal Park Total Vacancy 11.7% Five - 2451 Crystal Drive. Also contributing to leasing activity this quarter was a 13,666-square- YTD 2019 Absorption 359,381 SF foot renewal/expansion by Deloitte at Crystal Plaza 4 - 2200 Crystal Drive, and a 11,891-square- YTD Leasing Activity 1.2 M SF foot new lease by GSA at Crystal Gateway 1 - 1235 S Clark Street. Under Construction 474,453 SF

APTA Centennial Center at 3030 Potomac Avenue Percent Pre-Leased 91.0% is currently under construction. The building is 58.9% pre-leased with American Physical Therapy YTD 2019 Deliveries 0 SF Association being a major tenant. The 104,453 square-foot building is set to deliver 1Q 2021. Also 2009: 2018: YTD 2019: Asking Rental Rates under construction is the Institute for Defense $38.21 $37.87 $38.09 (Full Service) Analyses at 701 E. Glebe Road. The 370,000 PSF PSF PSF square-foot building is set to deliver 1Q 2022.

Crystal City 4th Quarter 2019

Major Leases

Crystal Park Five 2451 Crystal Drive Crystal Park 4 2345 Crystal Drive Tenant SAIC Tenant Winrock Size 22,833 SF Size 30,616 SF Type Relet Type Relet

Crystal Plaza 4 2200 Crystal Drive Crystal Park One 2011 Crystal Drive Tenant Deloitte Tenant GSA Size 13,666 SF Size 11,891 SF Type Renewal/Expansion Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Wheelock National Gateway II $59,850,000 Meridian Crystal City December 2019 Street Capital, A 14.4% 3550 S. Clark Street ($269.98 psf) Group LLC

Under Construction

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

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

Institute for Defense Institute for Defense Analyses Crystal City 370,000 0 100.0% 1Q 2022 Davis Analyses 701 E. Glebe Road

Fairfax (Fairfax Center, Fairfax City, Oakton) 4th Quarter 2019

1.5 0.20 24 30

20 25 0.16 1.0

16 20 ($) Rate Asking 0.12

12 15 0.5 SF (Millions) Vacancy Rate (%) Vacancy

0.08 SF (Millions)

8 10

0.04 0.0

4 5

0.00 '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 Fairfax has increased from 17.1% in the third quarter 2019 to 18.0% in the fourth quarter 10 Year Averages (2009 - 2018) 2019, and has decreased from 18.2% since the fourth quarter 2018. Total vacancy has increased from 18.0% Total Absorption -56,443 SF / Year in the third quarter 2019 to 18.9% in the fourth quarter 2019, and has decreased from 19.2% since fourth Deliveries (SF) 28,763 SF / Year quarter 2018. Leasing Activity 868,926 SF / Year The Fairfax submarket recorded 103,332 square feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to 258,471 square feet. Market Stats The positive absorption for the quarter was driven by a 18,867-square-foot move-in by Burdette Smith at Inventory 12.6 M SF One Fair Oaks - 4114 Legato Road. Direct Vacancy 18.0% The top sale this quarter in the Fairfax submarket was the sale of Fair Lakes 2 - 12450 Fair Lakes Circle. The Total Vacancy 18.9% building was purchased by Turnbridge Equities from The Buford Group for $40,750,00 ($219.58 psf). The YTD 2019 Absorption 258,471 SF building was 100% occupied at the time of sale.

YTD Leasing Activity 810,326 SF The largest lease signed in the Fairfax submarket was a 18,034-square-foot renewal by General Dynamics 0 SF Mission Systems, Inc. at Oakton Corporate Center - Under Construction 10455 White Granite Drive. Percent Pre-Leased 0.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $26.56 $27.08 $26.88 (Full Service) PSF PSF PSF

Fairfax (Fairfax Center, Fairfax City, Oakton) 4th Quarter 2019

Major Leases

Oakton Corporate 10455 White Granite Fair Lakes 4 12700 Fair Lakes Circle Center Drive General Dynamics Tenant Tenant Vellum Mortgage Mission Systems, Inc. Size 11,839 SF Size 18,034 SF Type Relet Type Renewal

One Fair Oaks 4114 Legato Road

Tenant Kreative Technologies

Size 10,355 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Fair Lakes 2 November $40,750,000 Turnbridge Fairfax Center The Buford Group A 100% 12450 Fair Lakes Circle 2019 ($219.58 psf) Equities

Greenbriar Corporation November $13,100,000 Center Fairfax Center Prescott Group CW Capital B 77.1% 2019 ($112.37 psf) 13135 Lee Highway

High Ridge Office Building November $11,200,000 Guggenheim Fairfax Center Time Equities B 32.8% 3877 Fairfax Ridge Road 2019 ($53.13 psf) Services

Kennwood Eaton Place November $10,500,000 Fairfax City Management Polinger Co. B 81.2% 10400 Eaton Place 2019 ($101.94 psf) Company, LLC

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 4th Quarter 2019

24 30 3.00 0.6

20 25 0.5 2.35

0.4 16 20 ($) Rate Asking 1.70 0.3 12 15 SF (Millions) SF (Millions) SF Vacancy Rate (%) Vacancy 0.2 1.05 8 10

0.1 0.40 4 5 0.0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19

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

Direct Vacancy Rate Total Vacancy Rate Asking Rate Leasing Activity Total Net Absorption Highlights Direct vacancy in Loudoun County increased from 8.2% in the third quarter 2019 to 8.6% in the fourth 10 Year Averages (2009 - 2018) quarter 2019, and has decreased from 8.9% since fourth quarter 2018. Total vacancy has increased from Total Absorption 279,853 SF / Year 8.4% in the third quarter 2019 to 8.8% in the fourth quarter 2019, and has decreased from 9.3% since Deliveries (SF) 161,997 SF / Year fourth quarter 2018. Leasing Activity 933,244 SF / Year Loudoun County recorded 77,117 square feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to -39,343 square feet. Market Stats A significant contributor to the positive absorption this quarter was a 10,917-square-foot move in by Inventory 15.9 M SF Pegasystems at the Corporate Office Park at Dulles Town Center – 21000 Atlantic Boulevard. Direct Vacancy 8.6%

One of the top sales in the Loudoun submarket was Total Vacancy 8.8% the purchase of Loudoun Gateway II & III - 45195 & 45200 Business Court which was acquired by Sackman YTD 2019 Absorption -39,343 SF Enterprises from Velocis for $45,250,000 ($251.58 psf). The two assets were 100% occupied at the time of sale YTD Leasing Activity 573,563 SF and traded at a Cap Rate of 4.98%. Under Construction 56,025 SF Phase II of Broderick One at Loudoun Gateway - 22365 Broderick Drive is under construction. The Percent Pre-Leased 0.0% 56,025-square-foot building is projected to deliver first quarter 2020. YTD 2019 Deliveries 46,002 SF

2009: 2018: YTD 2019: Asking Rental Rates $26.48 $25.73 $25.84 (Full Service) PSF PSF PSF

Loudoun County 4th Quarter 2019

Major Leases

Loudoun Tech Center 45925 Horseshoe Drive Bldg A

Tenant 4th Wall

Size 13,560 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Loudoun Gateway II & III $45,250,000 Sackman Rt 28 North October 2019 Velocis A 100% 4.98% 45195-45200 Business Court ($251.58 psf) Enterprises

Under Construction

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

Phase II at Broderick One at Loudoun Gateway Loudoun 56,025 SF 56,025 SF 0.0% 1Q 2020 LGV Group None 22365 Broderick Drive

Merrifield 4th Quarter 2019

0.30 18 40 2.0

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

0.15 10 20 0.5 SF (Millions)

Vacancy Rate (%) Vacancy 8 SF (Millions) 0.10 15 6 0.0 10 0.05 4 -0.5 2 5 0.00 '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 10 Year Averages (2009 - 2018)

Direct vacancy in Merrifield increased from 11.3% in Total Absorption 31,955 SF / Year the third quarter 2019 to 11.6% in the fourth 2019, and has decreased from 12.7% since fourth quarter Deliveries (SF) 36,398 SF / Year 2018. Total vacancy has remained flat at 12.0% in the third quarter 2019 to fourth quarter 2019, and has Leasing Activity 637,866 SF / Year decreased from 13.6% since fourth quarter 2018.

The Merrifield submarket recorded -204,210 square Market Stats feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to -121,874 Inventory 9.6 M SF square feet. The negative absorption was driven by a 27,473-square-foot move-out at Prosperity Metro Direct Vacancy 11.6% - 2677 Prosperity Avenue. Total Vacancy 12.0% The largest lease signed in the Merrifield submarket was a 22,477-square foot relet by Balfour Beatty at YTD 2019 Absorption -121,874 SF 80 at Fairview - 3180 Fairview Park Drive. YTD Leasing Activity 435,733 SF

Under Construction 0 SF

Percent Pre-Leased 0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $34.57 $30.41 $31.30 (Full Service) PSF PSF PSF

Merrifield 4th Quarter 2019

Major Leases

3180 Fairview Park MetroPlace @ Dunn 80 at Fairview 2650 Park Tower Drive Drive Loring Tenant Balfour Beatty Tenant Centauri

Size 22,477 SF Size 20,634 SF

Type Relet Type Relet

Williams Plaza 1 3040 Williams Drive Tenant Setty & Associates

Size 10,902 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Golden Eagle $22,000,000 Cigna 3130 Fairview Park Drive Merrifield November 2019 Development A 40.0% ($121.78 psf) Corporation Group

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

National Landing (Crystal City & Pentagon City) 4th Quarter 2019

700 20 42 2.0

1.5 35 560 16 1.0

28 ($) Rate Asking 420 12 0.5

21 0.0 SF (Millions) Vacancy Rate (%) Vacancy SF ( Thousands) SF ( 280 8 Lorem ipsum 14 -0.5

-1.0 140 4 7 -1.5 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YTD '19 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 Direct vacancy in National Landing decreased from 10.8% in the third quarter 2019 to 10.2% in the fourth quarter 2019, and has decreased from 14.3% since 10 Year Averages (2009- 2018) fourth quarter 2018. Total vacancy has decreased from 11.1% the third quarter 2019 to 10.6% in the Total Absorption 72,716 SF / Year fourth quarter 2019, and has decreased from 14.4% since fourth quarter 2018. Deliveries (SF) 110,093 SF / Year The National Landing submarket recorded Leasing Activity 1,129,028SF / Year 86,119 square feet of net absorption during the fourth quarter of 2019, bringing the year-to-date absorption to 579,080 square feet. The positive Market Stats absorption for the quarter was driven by a 24,000 square foot move-in by the GSA at Crystal Gateway Inventory 12.9 M SF 1 - 1235 S. Clark Street.

Direct Vacancy 10.2% APTA Centennial Center at 3030 Potomac Avenue is currently under construction in Crystal City. 10.6% The building is 58.9% pre-leased with American Total Vacancy Physical Therapy Association being a major tenant. The 104,453 square-foot building is set to deliver YTD 2019 Absorption 579,080 SF 1Q 2021. YTD Leasing Activity 1.1 M SF This quarter, Arlington County approved the construction of Metropolitan Park in Pentagon City. Under Construction 474,453 SF The 2.1 million square-foot mixed-use project will be one of Amazon’s first HQ2 developments in the Percent Pre-Leased 91.0% area. Metropolitan Park is set to deliver 1Q 2023. Additional HQ2 developments are expected to be YTD 2019 Deliveries 100,000 SF submitted to Arlington County in 2020, potentially 2009: 2018: YTD 2019: totaling 4 million square feet. Asking Rental Rates $38.04 $37.66 $38.44 (Full Service) The DC Metro mass-transit accessibility into the PSF PSF PSF National Landing submarket will significantly improve, with a Potomac Yard Metro Station set to open in 2021.

Old Town/Eisenhower Ave 4th Quarter 2019

0.8 20 40 1.0

0.7 16 32 0.6 0.5 Asking Rate ($) Rate Asking 0.5 12 24

0.4 0.0 Vacancy Rate (%) Vacancy SF (Millions) SF (Millions) 0.3 8 16

0.2 -0.5 4 8 0.1

0.0 0 -1.0 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 Old Town Alexandria and Eisenhower Ave submarket increased from 9.7% in the Total Absorption 44,508 SF / Year third quarter 2019 to 10.4% in the fourth quarter 2019, and has remained flat at 10.4% since fourth quarter 2018. Total Deliveries (SF) 81,419 SF / Year vacancy increased from 10.5% in the third quarter 2019 to 12.1% in the fourth quarter 2019, and has increased from Leasing Activity 601,930 SF / Year 10.8% since fourth quarter 2018.

The Old Town Alexandria and Eisenhower Ave submarket Market Stats recorded -211,413 square feet of net absorption in the fourth quarter of 2019, bringing the year-to-date Inventory 12.5 M SF absorption to -155,672 square feet. The negative absorption was driven by a 10,390-square-foot move- 10.4% out at the Torpedo Factory Office Building - 201 N. Union Direct Vacancy Street. Total Vacancy 12.1% The largest lease signed in the Alexandria submarket in the fourth quarter was a 46,088-square-foot relet YTD 2019 Absorption -155,672 SF by Oliff PLC at Canal Center 3 - 11 Canal Center Plaza. Also contributing to leasing activity this quarter was a YTD Leasing Activity 483,863 SF 24,925-square-foot renewal by the Burgess Group at Edmonson Plaza-1701 Duke Street. Under Construction 0 SF

Percent Pre-Leased 0.0%

YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $34.03 $36.22 $35.40 (Full Service) PSF PSF PSF

Old Town/Eisenhower Ave 4th Quarter 2019

Major Leases

Canal Center 3 11 Canal Center Plaza Edmonson Plaza 1701 Duke Street

Tenant Oliff PLC Tenant The Burgess Group

Size 46,088 SF Size 24,925 SF

Type Relet Type Renewal

Ballenger West 2050 Ballenger Avenue Canal Center 4 99 Canal Center Plaza

Tenant Catholic University Tenant Robbins Gioia

Size 18,563 SF Size 11,747 SF

Type Relet Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

October $17,600,000 Cambridge 700 S. Washington Street Old Town DWS A 88.8% 7.00% 2019 ($292.36 psf) Hanover

Under Construction

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

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

Reston-Herndon 4th Quarter 2019

2.0 4.0 25 35 3.5

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

SF (Millions) 1.0 0.8 10 14 0.5

0.4 5 7 0.0

-0.5

0.0 0 0 -1.0 '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

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights Direct vacancy increased from 10.2% in the third quarter 2019 to 10.7% the fourth quarter 2019, and has decreased 10 Year Averages (2009 - 2018) from 12.4% since fourth quarter 2018. Total vacancy has increased from 11.1% in the third quarter 2019 to 11.6% in Total Absorption 102,334 SF / Year the fourth quarter 2019, and has decreased from 13.4% since fourth quarter 2018. Year-to-date direct vacancy Deliveries (SF) 94,848 SF / Year for Reston was 10.7% and total vacancy was 11.7%. Year- to-date direct vacancy for Herndon was 10.7% and total Leasing Activity 2.7 M SF / Year vacancy was 11.4%.

The Reston-Herndon submarket recorded -60,282 Market Stats square feet of negative absorption, bringing the year-to-date absorption to 268,559 square feet. The Inventory 32.0 M SF negative absorption for the quarter was driven by a 276,024-square-foot move-out at Lake Fairfax Business Center 7 - 1760 Business Center Drive. Direct Vacancy 10.7%

The largest sale transaction in the Reston-Herndon Total Vacancy 11.6% Submarket for the fourth quarter 2019 was the sale of 2100 Reston Parkway. The 178,667 SF building was YTD 2019 Absorption 268,559 SF acquired by Harbert Management from Los Angeles County Retirement Association for $33,350,000 ($186.66 YTD Leasing Activity 2.4 M SF psf). The building was 76.2% occupied at the time of sale. Under Construction 1.7 M SF The two of the three largest leases signed in Northern Virginia this quarter were in the Reston-Herndon Sub- Percent Pre-Leased 93.5% market. ICF signed a 207,000-square-foot new lease at Reston Station - Ph. III - 1902 Reston Metro Plaza and YTD 2019 Deliveries 0 SF the CIA signed a 131,388-square-foot renewal at Lake Fairfax Business Center 5 - 1759 Business Center Drive. 2009: 2018: YTD 2019: Asking Rental Rates $28.07 $31.60 $32.49 (Full Service) PSF PSF PSF

Reston-Herndon 4th Quarter 2019 Major Leases

1902 Reston Metro Lake Fairfax Business 1759 Business Center Reston Station-Ph. III Plaza Center 5 Drive Tenant ICF Tenant CIA

Size 207,000 SF Size 131,388 SF Type New Lease Type Renewal

SOMA-C 1818 Library Street Herndon Square II 535 Huntmar Park Drive Tenant Facebook Tenant GSA

Size 75,000 SF Size 60,421 SF Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

$33,350,000 Harbert Management Los Angeles County 2100 Reston Parkway Reston-Herndon December 2019 ($186.66 psf) A 76.2% Corp. Retirement Association

Under Construction

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

CVS Reston Station Phase II - Reston-Herndon 195,987 SF 105,210 SF 46.3% 2Q 2020 Comstock Pharmacy, 1906 Reston Metro Plaza Neustar Inc

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

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

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

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

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 Direct vacancy in the Rosslyn-Ballston Corridor decreased from 16.2% in the third quarter 2019 to 15.4% in the fourth 10 Year Averages (2009 - 2018) quarter 2019, and has decreased from 16.5% since fourth quarter 2018. Total vacancy decreased from 17.3% in the Total Absorption -31,302 SF / Year third quarter 2019 to 16.3% in the fourth quarter 2019, and has decreased from 17.8% since fourth quarter 2018. Deliveries (SF) 269,242 M SF / Year

The Rosslyn-Ballston Corridor recorded 258,859 square Leasing Activity 2.1 M SF / Year feet of net absorption during the fourth quarter of 2019, bringing the year-to-date absorption to 428,875 square feet. One of the primary drivers for positive absorption was Market Stats a 59,528-square-foot move-in by Deloitte at Waterview Tower - 1919 N. Lynn Street. Inventory 25.4 M SF

The largest lease signed in the Rosslyn-Ballston Corridor Direct Vacancy 15.4% submarket was a 97,449-square-foot renewal by CACI International at Three Ballston Plaza - 1100 N. Glebe Total Vacancy 16.3% Road. Other top leases include a 23,392-square-foot relet by Humana/Anthem at 1812 N. Moore Street and YTD 2019 Absorption 428,875 SF a 15,783-square-foot renewal by U.S. Selective Service System. YTD Leasing Activity 739,509 SF

The second largest sale transaction of Northern Virginia for Under Construction 376,172 SF the fourth quarter 2019 was in the Rosslyn-Ballston Corridor submarket. The Meridian Group acquired 1525 Wilson Percent Pre-Leased 45.8% Boulevard, from the Blackstone Group for $113,150,000 ($355.27 psf). The building was 78.4% occupied at the time YTD 2019 Deliveries 0 SF of sale. The fourth largest sale transaction of the fourth quarter 2019 was the sale of Park Place - 1655 N. Fort Myer Drive. The building was acquired by GreenOak Real Estate 2009: 2018: YTD 2019: Asking Rental Rates Advisors/Altus from Tishman Speyer for $66,500,000 $40.68 $42.73 $41.39 (Full Service) ($373.46 psf). The building was 64.6% occupied at the time PSF PSF PSF of sale.

Rosslyn-Ballston Corridor 4th Quarter 2019

Major Leases

Three Ballston Plaza 1100 N. Glebe Road 1776 Wilson Boulevard Tenant CACI International Tenant CRDF Global

Size 97,449 SF Size 34,107 SF

Type Renewal Type Renewal/Expansion

Art Associates 1812 N. Moore Street 1515 Wilson Boulevard Building Tenant Humana/Anthem US Selective Service Tenant Size 23,392 SF System Size 15,783 SF Type Relet Type Renewal

2500 Wilson Boulevard Strategic Funding Tenant Source, Inc Size 15,010 SF

Type Expansion

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

The $113,150,000 The Meridian 1525 Wilson Boulevard RB Corridor December 2019 Blackstone A 78.4% ($355.27 psf) Group Group

GreenOak Real Park Place $66,500,000 Tishman RB Corridor October 2019 Estate Advisors/ A 64.6% 1655 N. Fort Myer Drive ($373.46 psf) Speyer Altus

Under Construction

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

4040 Wilson Boulevard RB Corridor 240,000 SF 95,850 SF 60.1% 1Q 2020 Shooshan Avalon Bay & Vida Fitness

Loft Office at Market Regency Common - 1650 RB Corridor 136,172 SF 107,971 SF 20.7% 1Q 2020 None Centers Edgewood Street

Route 28 North 4th Quarter 2019

0.6 3.00 25 30

0.5 2.35 20 24

0.4 Asking Rate ($) Rate Asking 1.70 15 18

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

5 6 0.40 0.1

0.0 0 0 -0.25 '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 '13 '15 '16 '17 '18 YTD '19

Direct Vacancy Rate Total Vacancy Rate Asking Rate Deliveries Under Construction Leasing Activity Total Net Absorption Highlights 10 Year Averages (2009 - 2018) Direct vacancy in the Route 28 North submarket increased from 9.3% in the third quarter 2019 to 9.5% in the fourth Total Absorption 104,548 SF / Year quarter 2019, and has decreased from 10.8% since fourth quarter 2018. Total vacancy increased from 9.5% in the Deliveries (SF) 45,747 SF / Year third quarter 2019 to 9.6% in the fourth quarter 2019, and has decreased from 11.4% since fourth quarter 2018. Leasing Activity 675,363 SF / Year The Route 28 North submarket recorded 45,888 square feet of net absorption in the fourth quarter of 2019, Market Stats bringing the year-to-date absorption to -136,973 square feet. Positive absorption was primarily driven by a 17,345 square foot move-in at Loudoun Center Building Inventory 9.7 M SF A - 45305 Catalina Court. Direct Vacancy 9.5% Only one sale occurred in the Route 28 North submarket this quarter. Loudoun Gateway II & III - 45195 & 45200 Total Vacancy 9.6% Business Court was acquired by Sackman Enterprises from Velocis for $45,250,000 ($251.58 psf). The two YTD 2019 Absorption -136,973 SF assets were 100.0% occupied at the time of sale and traded at a Cap Rate of 4.98%. YTD Leasing Activity 366,101 SF

The largest lease signed in the Route 28 North submarket Under Construction 56,025 SF this quarter was a 13,560-square-foot renewal by 4th Wall at 45925 Horseshoe Drive. Percent Pre-Leased 0%

Phase II - Broderick One at Loudoun Gateway - 22365 YTD 2019 Deliveries 0 SF Broderick Drive is currently under construction. The 56,025-square-foot building is 0.0% pre-leased and is 2009: 2018: YTD 2019: Asking Rental Rates expected to deliver first quarter 2020. $25.15 $25.26 $25.59 (Full Service) PSF PSF PSF

Route 28 North 4th Quarter 2019

Major Leases

45925 Horseshoe Drive

Tenant 4th Wall

Size 13,560 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

Loudoun Gateway II & III $45,250,000 Sackman 45195 & 45200 Business Route 28 North October 2019 Velocis A 100.0% 4.98% ($251.58 psf) Enterprises, Inc Court

Under Construction

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

Phase II - Broderick One at Loudoun Gateway Route 28 North 56,025 SF 56,025 SF 0.0% 1Q 2020 LGV Group None 22365 Broderick Drive

Route 28 South 4th 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

0.0 0.2 5 6

0.0 -0.5 '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 Deliveries Under Construction Leasing Activity Total Net Absorption Direct Vacancy Rate Total Vacancy Rate Asking Rate

Highlights Direct vacancy in the Route 28 South submarket has decreased from 12.1% in the third quarter 2019 to 11.9% in 10 Year Averages (2009 - 2018) the fourth quarter 2019, and has decreased from 14.6% in the fourth quarter 2018. Total vacancy has decreased Total Absorption 204,298 SF / Year from 12.4% in the third quarter 2019 to 12.2% the fourth quarter 2019, and has decreased from 15.4% since fourth Deliveries (SF) 183,501 SF / Year quarter 2018.

Leasing Activity 770,115 SF / Year The Route 28 South submarket recorded 238,786 square feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to 358,306 square feet. Positive absorption was driven by a 42,700-square- Market Stats foot move-in by Novetta Solutions, Inc. at Lincoln Park I - 13900 Lincoln Park Drive. Inventory 13.2 M SF

The largest lease signed this quarter was a 38,870-square- Direct Vacancy 11.9% foot renewal by Covance Inc. at Avion Tech Center III - 3635 Concorde Parkway. Also contributing to leasing Total Vacancy 12.2% activity this quarter was a 25,479-square-foot expansion signed by Nobilis ESI, LLC at Penrose Center I - 14425 YTD 2019 Absorption 358,306 SF Penrose Place. YTD Leasing Activity 997,879 SF CentreMed I & II - 6201 & 6211 Centreville Road sold this quarter. The two assets were acquired by Artemis from Under Construction 125,000 SF Harrison Street Capital for $20,800,000 ($393.44 psf) and were 91.4% occupied at the time of sale. Percent Pre-Leased 0.0%

Penrose II - 11401 Penrose Place, is currently under YTD 2019 Deliveries 0 SF construction. The 125,000-square-foot property is expected to deliver 2Q 2020. 2009: 2018: YTD 2019: Asking Rental Rates $26.81 $26.61 $26.27 (Full Service) PSF PSF PSF

Route 28 South 4th Quarter 2019 Major Leases

Avion Tech Center III 3635 Concorde Parkway Penrose Center I 14425 Penrose Place

Tenant Covance, Inc. Tenant Nobilis ESI, LLC

Size 38,870 SF Size 25,479 SF

Type Renewal Type Expansion

Trinity Center 1 5870 Trinity Parkway

Dimension Data North Tenant America Size 18,887 SF

Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy

Harrison Centre Med I & II - 6201 & 6211 December $20,800,000 Route 28 South Artemis Street B 91.4% Centreville Road 2019 ($393.44 psf) Capital

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 4th Quarter 2019

0.8 30 35 1.00

0.7

24 0.75 0.6 28

0.5 ($) Rate Asking 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 18.3% in the third quarter 2019 to 17.9% in the fourth quarter 2019, and has decreased from 19.5% Deliveries (SF) 139,150 SF / Year since fourth quarter 2018. Total vacancy decreased from 18.4% in the third quarter 2019 to 18.0% in the Leasing Activity 311,645 SF / Year fourth quarter 2019, and has decreased from 19.6% since fourth quarter 2018. Market Stats The Springfield submarket recorded 42,909 square feet of net absorption in the fourth quarter of 2019, Inventory 5.7 M SF bringing the year-to-date absorption to 109,579 square feet. The positive absorption was driven by Direct Vacancy 17.9% Unysis moving into 17,594 square feet at Kingstowne Building T - 5971 Kingstowne Village Parkway. Total Vacancy 18.0%

The largest lease signed in the fourth quarter in the YTD 2019 Absorption 109,579 SF Springfield submarket was a 50,350-square-foot renewal by Service Source Central Fairfax at Lake YTD Leasing Activity 256,230 SF Building 4 - 6860 Commercial Drive. Under Construction 634,000 SF 6595 Springfield Center Drive is currently under construction. The Boston Properties 634,000-square- Percent Pre-Leased 98.9% foot building is 98.9% pre-leased to the GSA-TSA. The building is set to deliver 1Q 2020. YTD 2019 Deliveries 0 SF

2009: 2018: YTD 2019: Asking Rental Rates $28.20 $29.33 $28.91 (Full Service) PSF PSF PSF

Springfield 4th Quarter 2019

Major Leases

Springfield Corporate Lake Building 4 6860 Commercial Drive 6225 Brandon Avenue Center 1 Service Source Central Tenant Fairfax Tenant Novetta Solutions Size 50,350 SF Size 18,394 SF

Type Renewal Type Renewal/Expansion

Offices at Springfield Kingstowne Building 5911 Kingstowne Village 6564 Loisdale Court Town Center K Parkway Accenture Federal Tenant New Age Protection Tenant Services Size 14,093 SF Size 12,626 SF Type Relet Type Renewal

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

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

Under Construction

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

Boston 6595 Springfield Center Drive Springfield 634,000 SF 7,000 SF 98.9% 1Q 2020 GSA-TSA Properties

2.0 20 36 3.0

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

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

0.0 -0.5 '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

Direct vacancy in the Tysons Corner submarket increased 10 Year Averages (2009 - 2018) from 11.4% in the third quarter 2019 to 11.5% in the fourth quarter 2019, and has decreased from 12.6% the fourth Total Absorption 161,986 SF / Year quarter 2018. Total vacancy has remained flat at 12.0% from the third quarter to the fourth quarter 2019, and has Deliveries (SF) 294,220 SF / Year decreased from 13.2% the fourth quarter 2018. Leasing Activity 2.1 M SF / Year The Tysons Corner submarket recorded 185,987 square feet of net absorption in the fourth quarter of 2019, bringing the year-to-date absorption to 921,575 square Market Stats feet. A significant contributor to the positive absorption was a 51,422-square-foot move-in by Spaces at The Loft Inventory 29.7 M SF - 1640 Boro Place.

11.5% The third largest sales transaction in Northern Virginia Direct Vacancy happened in the Tysons Corner submarket. Centerstone Tysons - 1550 Westbranch Drive was acquired by Total Vacancy 12.0% KAMCO Investment Company from Griffith Properties for $80,500,000 ($530.00 psf) and was 100.0% occupied at YTD 2019 Absorption 921,575 SF the time of sale. The asset traded at a 5.00% Cap Rate. YTD Leasing Activity 2.0 M SF The second largest lease signed this quarter in Northern Virginia was in the Tysons Corner submarket. Capital One Under Construction 383,628 SF Services signed a 179,856-square-foot renewal at Towers Crescent - 8020 Towers Crescent Drive. Also contributing Percent Pre-Leased 0.0% to leasing activity this quarter was a 76,388-square-foot renewal/expansion signed by Capital One at Towers YTD 2019 Deliveries 581,775 SF Crescent/A - 8000 Towers Crescent and a 73,444-square- foot renewal by SAIC at 1953 Gallows Road. 2009: 2018: YTD 2019: Asking Rental Rates $29.75 $35.87 $35.41 (Full Service) PSF PSF PSF

Tysons Corner 4th Quarter 2019

Major Leases 8020 Towers Crescent 8000 Towers Crescent Towers Crescent Towers Crescent/A Drive Drive Tenant Capital One Services Tenant Capital One

Size 179,856 SF Size 76,388 SF

Type Renewal Type Renewal/Expansion

The Corporate Office 1953 Gallows Road 1800 Tysons Boulevard Center @ Tysons II Tenant SAIC Tenant Pricewater Coopers Size 73,444 SF Size 53,578 SF Type Renewal Type Renewal

Tysons Corner Center 1861 International Drive Fairfax Square III 8045 Leesburg Pike

Tenant RSM US LLP Tenant ServiceNow, Inc

Size 42,599 SF Size 42,595 SF

Type Renewal/Expansion Type Renewal/Expansion

1785 Greensboro Station Boro Station III Place Tenant OneWeb

Size 40,888 SF

Type Relet

Sales

Property Submarket Date Sold Price Buyer Seller Class Occupancy Cap Rate

KAMCO Centerstone @ Tysons October $80,500,000 Griffith Tysons Corner Investment A 100.0% 5.00% 1550 Westbranch Drive 2019 ($530.00 psf) Properties Company

Under Construction

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

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