Mohr Partners, Inc. GLOBAL CORPORATE REAL ESTATE ADVISORS MARKET REPORT 4th QUARTER 2013 NASHVILLE, TN National Office Market The U.S. Office Market ended the fourth quarter of 2013 with a vacancy rate of 11.5%, down from 11.6% in the previous quarter. Net Absorption totaled positive 25,621,357 square feet in the fourth quarter, up from 23,482,656. Vacant sublease space decreased, ending the quarter at 43,128,64 square feet. Rental rates ended at $22.06, an increase over the previous quarter. A total of 177 buildings were delivered to the market in the third quarter totaling 11,714,729 square feet, with 86,895,177 square feet still under construction. Nashville Office Market Vacancy rates as of the 4th quarter of 2013 are the lowest Nashville has seen since 2001. There were only two new buildings delivered in 2013, both of those coming in the first and second quarter respectively. Deliveries were the smallest they have been in over 30 years in Nashville. Rental rates in Nashville have been rising for the last 6 quarters reaching $19.03 in the final quarter of 2013. Mohr Partners, Inc. GLOBAL CORPORATE REAL ESTATE ADVISORS Lease Rates Rental Rate Previous Quarter Total Average $19.03 $18.94 Class A $22.63 $22.35 Class B $18.68 $18.64 Class C $14.75 n/a CBD $19.73 n/a Suburban $18.82 n/a Absorption Net Absorption Previous Quarter Total 476,466 SF 78,244 SF Class A 298,807 SF 85,196 SF Class B 116,747 SF (51,524) SF Class C 99,213 SF n/a CBD 172,674 SF n/a Suburban 399,782 SF n/a Vacancy Rates Vacancy Rate Previous Quarter Total 7.9% 8.6% Class A 6.3% 7.8% Class B 9.80 10.2% Class C 6.1% n/a CBD 13.2% n/a Suburban 6.8% n/a Mohr Partners, Inc. GLOBAL CORPORATE REAL ESTATE ADVISORS Local Market Drivers & Economics Because of the Bipartisan Budget Act, uncertainties about the Federal Budget should decrease because the possibility of a government shutdown, at least over the next two years, is reduced. There is also sustained recovery in the housing sector as well as an improving global economy. Nominal personal income is expected to grow in the state of Tennessee in 2014 and 2015 by 4.2 and 4.5 percent respectively. Nonfarm job growth rates for 2014 and 2015 are expected to be 1.5 and 1.8 percent. Drivers are going to be powerful expansions of Tennessee leisure and hospitality labor force as well as employment in professional and business services. Unemployment is expected to decrease in 2014 and 2015 to levels as low as before 2008, to a rate of 7.0 percent at the end of 2015. However, unemployment is currently at 7.8 percent for the state of Tennessee. Unemployment in the Nashville-Davidson-Murfreesboro-Franklin, TN MSA is at 6.6 percent. TOP 20 OFFICE LEASES Building Submarket SF Tenant Parallon West End 382,500 Parallon Business Solutions 330 Seven Springs Way Brentwood 130,000 Lifepointe UBS Tower Downtown 126,067 UBS Financial Services, Inc. One Nashville Place Downtown 97,000 Regions Bank 5720 Crossings Blvd. Airport South 72,102 Asurion One Century Place Airport North 55,962 Tennessee Education Lottery Corp. Cool Springs IV Cool Springs 53,920 MorphoTrust USA, Inc. Fifth Third Center Downtown 50,835 Sony of ATV Music Publishing One Century Place Airport North 40,653 American President Lines Gateway II Office Complex Brentwood 30,741 W Swuared, Inc. One Century Place Airport North 29,857 N/A SunTrust Plaza Downtown 28,041 Covenant Surgical Partners 5000 Meridian Blvd. Cool Springs 25,941 N/A Cummins Stations Downtown 25,763 G, S & F Highwoods Plaza I Brentwood 25,241 Aspect Software, Inc. Carothers Building Cool Springs 24,067 Community Health Systems 5000 Meridian Blvd. Cool Springs 23,888 N/A Heritage Place MetroCenter 23,483 Tennessee Department of Health Acme Farm Supply Downtown 22,500 MJM Real Estate Investments LLC 201 Jordan Road Cool Springs 21,775 Physician Partners TOP FIVE SALES TRANSACTIONS Building SF Sales Price Price/SF State Farm to Lone Star 6,177,594 $720,000,000 $116.55 Nashville City Center 482,407 $103,000,000 $213.51 402 Franklin Road 347,515 $109,220,000 $314.29 Highland Ridge I & II 341,096 $35,000,000 $102.61 Financial Plaza 196,000 $24,815,000 $126.61 Mohr Partners, Inc. GLOBAL CORPORATE REAL ESTATE ADVISORS Submarket Statistics CLASS A MARKET STATISTICS YTD Net Market Vacancy Absorption Quoted Rates Airport North 5.7% 57,986 SF $20.86 Airport South 42.6% 1,591 SF $15.45 Brentwood 3.1% 19,870 SF $24.67 Cool Springs 3.1% 164,108 SF $25.07 Downtown 10.8% 370,373 SF $22.90 Green Hills/Music Row 1.5% 16,606 SF $29.36 Maury County n/a n/a n/a MetroCenter 13.1% (72,619) SF $18.55 Rivergate/Hendersonville 1.7% (3,886) SF $18.77 Rutherford County 6.5% (14,539) SF $22.00 Southwest n/a n/a $23.50 West n/a n/a n/a West End 6.4% (35,231) SF $26.54 CLASS B MARKET STATISTICS YTD Net Market Vacancy Absorption Quoted Rates Airport North 8.6% (17,949) SF $17.87 Airport South 13.4% (6,295) SF $15.57 Brentwood 4.7% 94,572 SF $21.29 Cool Springs 6.5% 104,975 SF $22.16 Downtown 19.4% (246,446) SF $18.92 Green Hills/Music Row 6.4% (8,434) SF $23.38 Maury County 7.2% 3,729 SF $15.48 MetroCenter 18.0% (61,505) SF $15.79 Rivergate/Hendersonville 6.8% 69,984 SF $16.77 Rutherford County 6.7% 11,110 SF $18.35 Southwest 23.4% 25,254 SF $20.76 West 7.4% 42,011 SF $17.49 West End 5.6% (42,022) SF $22.42 ABOUT MOHR PARTNERS Mohr Partners, Inc. is a global corporate real estate advisory firm offering a full realm of services. Mohr has 20 offices throughout North America, providing corporate tenants with portfolio services including strategic planning, portfolio and lease administration, research and site selection, project and construction management, comprehensive demographic analysis, and eco- nomic incentive services. Since 1986, Mohr Partners has been managing real estate portfolios for corporations in all 50 U.S. states, all Canadian provinces, and many locations around the world through its strategic alliance partners. For more information please visit our website at www.mohrpartners.com..