2013 Office OFFICE MARKET SURVEY | JACKSONVILLE 2013 Overall Market [ MARKET TOTALS ] Incremental but steady consistent positive quarterly performance metrics characterized the Jacksonville-area office market in 2013. Absorption and, to a lesser extent, vacancy figures showed healthy gains over the previous year, while rental rates remained essentially flat throughout all classes of office product. Class “A” office product concentrated in selected Southside and Downtown submarkets exhibited the strongest year-over-year performance measures, while higher vacancies in the Class “B” and “C” product continued to act as barriers to meaningful rental rate growth. JACKSO NVI LLE REAL ESTATE MARKET OVERVIEW YEAR END 2011 YEAR END 2012 TOTAL INVENTORY SF 26.3 MILLION TOTAL INVENTORY SF 26.5 MILLION VACANCY RATE 21.2% VACANCY RATE 18.9% ABSORPTION 287,500 SF ABSORPTION 815,000 SF COMPLETED CONSTRUCTION 52,000 SF* COMPLETED CONSTRUCTION 152,000 SF* * Excludes Build-To-Suits SIGNIFICANT 2012 LEASES PROJECT NAME LOCATION SIZE (SF) TENANT SUBMARKET FREEDOM COMMERCE CENTER LIBERTY RIDGE DRIVE 100,625 ING INSURANCE BUTLER/BAYMEADOWS NOCATEE OFFICE/MDI 90 FORT WADE ROAD 56,198 ADS WASTE HOLDINGS BEACHES SALISBURY BUSINESS PARK 7259 SALISBURY ROAD 46,400 CONCORDE CAREER INSTITUTE BUTLER/BAYMEADOWS MERIDIAN BUILDING 5022 GATE PARKWAY 31,598 DEUTSCHE BANK BUTLER/BAYMEADOWS 245 RIVERSIDE BUILDING 245 RIVERSIDE AVENUE 20,578 RAYMOND JAMES & ASSOC. DOWNTOWN NORTHBANK SIGNIFICANT 2012 SALES BUILDING/ADDRESS BUYER/SELLER SIZE (SF) PURCHASE PRICE/PSF SUBMARKET BUTLER/ FREEDOM COMMERCE CENTER CROCKER PARTNER/LNR 757,563 $27,825,000/$37.00 BAYMEADOWS REFLECTIONS/7775-7785 BUTLER/ IN-REL/EOLA 114,697 $8,500,000/$74.00 BAYMEADOWS ROAD BAYMEADOWS BANK OF NY BUILDING/ BUTLER/ GONZALES/PARKWAY 50,624 $3,950,000/$77.00 10161 CENTURION PARKWAY BAYMEADOWS JMTN BUILDING/ SALEM COMMUNICATIONS/ BUTLER/ 42,646 $2,550,000/$60.00 7235 BONNEVAL ROAD MAYER BAYMEADOWS SIGNIFICANT 2012 CONSTRUCTION ACTIVITY BUILDING COMPLETION DATE SIZE (SF) DEVELOPER SUBMARKET BUTLER/ 13077 VEVERAS DRIVE 1ST QUARTER 48,574 GENERAL CAPITAL GROUP BAYMEADOWS CONCORDE CAREER INSTITUTE/ BUTLER/ 4TH QUARTER 46,400 LIBERTY PROPERTY TRUST 7259 SALISBURY ROAD BAYMEADOWS Information deemed reliable, but not guaranteed. Peter Crolius Mark Scott 550 Water Street 904.281.0003 904.281.0003 Suite 1225 [email protected] [email protected] Jacksonville, FL 32202 2 2012 OFFICE MARKET AVERAGE ANNUAL PROJECT NAME INVENTORY (SQ FT) VACANCY RATE ABSORPTION GROSS RATE DOWNTOWN NORTH BANK 4,990,280 20.7% 321,576 $18.03 DOWNTOWN SOUTH BANK 2,099,453 13.2% 9,321 $19.87 ARLINGTON/NORTHSIDE 705,342 26.2% 18,744 $12.04 SOUTHSIDE 3,046,775 24.9% 15,227 $16.43 BEACHES 786,366 11.1% 14,320 $23.41 MANDARIN 1,487,945 17.2% 87,643 $18.25 BUTLER/BAYMEADOWS 6,387,931 16.8% 296,855 $17.96 WESTSIDE 97,653 17.1% -4,854 $18.12 CLAY COUNTY/ORANGE PARK 683,954 22.3% 3,217 $14.50 TOTAL 20,285,699 18.9% 762,049 2012 FLEX MARKET AVERAGE ANNUAL NET RATE SUBMARKET INVENTORY (SQ FT) VACANCY RATE ABSORPTION (OFFICE/WAREHOUSE) ARLINGTON/NORTHSIDE 285,082 27.5% 0 $9.00/$5.00 SOUTHSIDE/BUTLER- 5,185,282 20.1% 45,042 $9.50/$5.50 BAYMEADOWS/MANDARIN BEACHES 103,982 16.5% 4,330 $10.00/$6.00 WESTSIDE 287,507 5.2% 1,800 $8.00/$5.00 CLAY COUNTY/ORANGE PARK 367,632 23.6% 2,150 $9.00/$5.00 TOTAL 6,229,485 19.9% 53,322 2012 FLEX MARKET JACKSONVILLE, FLORIDA 3 ABOUT GRAHAM & COMPANY Founded in 1978, Graham & Company is a full-service commercial real estate firm based in Birmingham. With offices in Birmingham and Huntsville, Alabama and Jacksonville and Panama City, Florida, the company offers professional services including sales, leasing, property management, appraisal, consulting, investment and development. In response to client demand, Graham has systematically extended its range of services and geographic reach, now serving clients throughout Alabama and several surrounding states. AFFILIATIONS NAIOP–National Association of Industrial & Office Properties SIOR–Society of Industrial & Office Realtors CRE–Counselors of Real Estate ICSC–International Council of Shopping Centers IREM–Institute of Real Estate Management CCIM–Certified Commercial Investment Member BOMA–Building Owners and Managers Association LEED–Leadership in Energy and Environmental Design ULI–Urban Land Institute grahamcompany.com MEASURE US BY OUR ACTIONS | BIRMINGHAM | HUNTSVILLE | JACKSONVILLE | GULF COAST 110 Office Park Drive 355 Quality Circle 550 Water Street 100 Richard Jackson Boulevard Suite 200 Suite E Suite 1225 Suite 115 Birmingham, AL 35223 Huntsville, AL 35806 Jacksonville, FL 32202 Panama City Beach, FL 32407 TEL 205.871.7100 TEL 256.382.9010 TEL 904.281.0003 TEL 850.563.1500 FAX 205.871.3331 FAX 256.382.9011 FAX 904.281.0849 FAX 850.563.1504 GRAHAM & COMPANY PERSONNEL – JACKSONVILLE FOUNDING PRINCIPALS MANAGING BROKER BUILDING ENGINEER Steve Graham, MAI, CRE Peter Crolius, SIOR Rick Lee Mike Graham, CPM, SIOR SENIOR DIRECTOR/INDUSTRIAL GROUP ADMINISTRATION MANAGING PARTNER Mark Scott Genny Spence Gardner Lee, CPM, SIOR PROPERTY MANAGEMENT Ron Kirkland, RPA, FMA.