Metro Denver/Boulder Office Market Report 4th Quarter 2017

W i l l i a m G a r y, M B A , M I M • P r i n c i p a l • 303-294-0277
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 9 2 3 3 P a r k M e a d o w s D r i v e • S u i t e 1 5 5 • L o n e Tr e e , C O 8 0 1 2 4

Personal Profile William A. Gary, MBA, MIM Principal & Managing 100% Tenant/Buyer Representative Having successfully negotiated over 400 transactions during 29+ years in the industry, William Gary is a very, very experienced commercial estate professional. Described by his clients and peers as "direct, creative, organized and professional," Will has earned the wisdom that comes from having a diverse business background. Christopher P. Gallo of KPMG Peat Marwick noted that Will has "that rare quality of both detail and 'big picture' real estate expertise." With world-class learning experiences at Cushman & Wakefield, Frederick Ross Company (now Newmark Grubb Knight Frank), Iliff, Thorn & Company (now CBRE) and CoRE Partners, Will has pushed himself to learn his craft in the rough and tough arena of commercial real estate. Prior to entering commercial real estate, Will worked in Metro New York City in national brand advertising at Benton & Bowles (now Publicis) and in consumer goods marketing with Richardson-Vicks (now Procter & Gamble). Will has done a lot in the world of big-time, corporate business. A patient and detailed professional, Will prides himself in finding creative and effective solutions to problems. "He has a reputation of getting the job done, and done right," says Phil Dunne, Executive Director of the Texas Medical Foundation. With decades at the table as Tenant Rep, Will has honed his craft and become a very sharp, master negotiator. Superior negotiators are hard to find and Will has earned his stripes in this department. Will has received many honors in advertising and real estate. He received "Creative Deal of the Year" while at Cushman & Wakefield for a lease with Pet Expo, a pet superstore. The Flick Report named him to their "All-Star Line-Up" for transactions totaling 236,345 square feet. He has been a Commercial Broker in Austin, Texas, and in Metro Denver/Boulder, Colorado. Teresa Krieger, CFO of Applegate Group, a regional water resources engineering firm, said, “I have been working with William for over the past 10 years. He has been instrumental in finding us great new office space. He is an excellent negotiator and has very creative ideas when it comes to initial leases and lease renewals. William was also able to find a subtenant for some extra office space we had so that we could reduce our rental expenses until we relocated. He has so much knowledge in this area and is so effective, I will continue to use him and recommend him for commercial real estate transactions.” Performing at high levels for his clients is not new to Will. He won academic scholarships to attend Southern Methodist University (SMU) in Dallas, Texas, and graduated with honors in Economics and an MBA in Marketing. Will also earned a Master of International Management (MIM) with highest honors at the highly renowned Thunderbird School of Global Management in Phoenix/Glendale, Arizona. MacLaurin Williams strongly believes in giving back to the community and has completed pro bono Tenant Representation projects for Colorado Preservation, Inc., a Montessori charter school, Al-Anon Service Center, Family Resource Center Association and Bicycle Colorado. In his leisure time, Will enjoys road cycling and MacLaurin Williams has proudly sponsored two amateur cycling teams, Rocky Mountain Road Club ("RMRC") in conjunction with Turin Bicycles and also COBRAS.

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MacLaurin Williams Worldwide

Sole business is Tenant & Buyer Representation

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Only acts as true advocate for Occupiers

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Manages properties for Landlords











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Dedicated to best interests of Occupiers

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Services for Tenants & Owner-Occupants

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Year-End 2017 – Denver

Denver Office Market Table of Contents Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C Market Highlights & Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CoStar Markets & Submarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Figures at a Glance by Class & Market Figures at a Glance by Class & Submarket Figures at a Glance Grouped by CBD vs Suburban Historical Figures at a Glance Leasing Activity Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Select Top Lease Transactions Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Aurora Market Boulder Market Broomfield Market Clear Creek County Market Colorado Blvd/Glendale Market Downtown Market Elbert County Market Fort Collins/Loveland Market Gilpin County Market Longmont Market Midtown Market North Denver Market Northeast Denver Market Northwest Denver Market Park County Market Parker/Castle Rock Market Southeast Denver Market Southwest Denver Market Weld County Market West Denver Market

©2018 CoStar Group, Inc.

CoStar Office Statistics

A

Denver – Year-End 2017

Denver Office Market Methodology The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group’s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's global database includes approximately 119 billion square feet of coverage in 5.4 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.

For information on subscribing to CoStar’s other products and services, please contact us at 1-877-7COSTAR, or visit our web site at www.costar.com

© Copyright 2018 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc. 1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP B

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate.The Cap Rate is a calculation that reflects the relationship between one year’s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building.These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills,older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is,or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certifi©2018 CoStar Group, Inc.

cate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door,even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time,generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing,distribution,and maintenance facilities.The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different

CoStar Office Statistics

C

Denver – Year-End 2017

Denver Office Market tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant’s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time.

Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise,rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied.

Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy)

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CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Overview

Denver’s Vacancy Increases to 10.5% Net Absorption Positive 32,956 SF in the Quarter

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he Denver Office market ended the fourth quarter 2017 with a vacancy rate of 10.5%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 32,956 square feet in the fourth quarter. Vacant sublease space increased in the quarter, ending the quarter at 1,906,860 square feet. Rental rates ended the fourth quarter at $26.32, an increase over the previous quarter. A total of 11 buildings delivered to the market in the quarter totaling 482,174 square feet, with 5,233,168 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Denver office market was positive 32,956 square feet in the fourth quarter 2017. That compares to positive 257,788 square feet in the third quarter 2017, positive 1,047,678 square feet in the second quarter 2017, and negative (165,073) square feet in the first quarter 2017. Tenants moving out of large blocks of space in 2017 include: DCP Midstream moving out of 157,676 square feet at 370 17th St; EKS&H moving out of 117,700 square feet at 7979 E Tufts Ave; and United Forest Service moving out of 96,780 square feet at 740 Simms St. Tenants moving into large blocks of space in 2017 include: Arrow Electronics moving into 227,000 square feet at 9151 E Panorama Cir; Comcast moving into 211,579 square feet at 7250 S Havana; and Agrium Advanced Technologies moving into 128,033 square feet at 5296 Harvest Lake Dr. The Class-A office market recorded net absorption of positive 205,114 square feet in the fourth quarter 2017, compared to positive 365,472 square feet in the third quarter 2017, posi-

Vacancy Rates by Class

tive 417,975 in the second quarter 2017, and negative (676,178) in the first quarter 2017. The Class-B office market recorded net absorption of negative (76,960) square feet in the fourth quarter 2017, compared to negative (122,480) square feet in the third quarter 2017, positive 599,628 in the second quarter 2017, and positive 471,414 in the first quarter 2017. The Class-C office market recorded net absorption of negative (95,198) square feet in the fourth quarter 2017 compared to positive 14,796 square feet in the third quarter 2017, positive 30,075 in the second quarter 2017, and positive 39,691 in the first quarter 2017. Net absorption for Denver’s central business district was positive 33,431 square feet in the fourth quarter 2017. That compares to positive 259,271 square feet in the third quarter 2017, positive 30,198 in the second quarter 2017, and negative (305,214) in the first quarter 2017. Net absorption for the suburban markets was negative (475) square feet in the fourth quarter 2017. That compares to negative (1,483) square feet in third quarter 2017, positive 1,017,480 in the second quarter 2017, and positive 140,141 in the first quarter 2017. Vacancy The office vacancy rate in the Denver market area increased to 10.5% at the end of the fourth quarter 2017. The vacancy rate was 10.3% at the end of the third quarter 2017, 10.5% at the end of the second quarter 2017, and 10.2% at the end of the first quarter 2017. Class-A projects reported a vacancy rate of 13.8% at the

1999-2017 A

B

C

Total Market

25%

Vacancy Rate

20%

15%

10%

5%

0% 1999 4q2000 4q 2001 4q2002 4q 2003 4q2004 4q 2005 4q2006 4q 2007 4q2008 4q2009 4q 2010 4q 2011 4q 2012 4q 2013 4q 2014 4q 2015 4q 2016 4q 20174 Source: CoStar Property®

Absorption & Deliveries

©2018 CoStar Group, Inc.

Past 10 Quarters

U.S. Vacancy Comparison

CoStar Office Statistics

Past 10 Quarters

1

Denver � Year-End 2017

Denver Office Market Overview

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end of the fourth quarter 2017, 13.6% at the end of the third quarter 2017, 13.9% at the end of the second quarter 2017, and 13.3% at the end of the first quarter 2017. Class-B projects reported a vacancy rate of 9.9% at the end of the fourth quarter 2017, 9.8% at the end of the third quarter 2017, 9.6% at the end of the second quarter 2017, and 9.6% at the end of the first quarter 2017. Class-C projects reported a vacancy rate of 4.1% at the end of the fourth quarter 2017, 3.9% at the end of third quarter 2017, 4.0% at the end of the second quarter 2017, and 4.1% at the end of the first quarter 2017. The overall vacancy rate in Denver’s central business district at the end of the fourth quarter 2017 decreased to 13.9%. The vacancy rate was 14.0% at the end of the third quarter 2017, 14.8% at the end of the second quarter 2017, and 14.7% at the end of the first quarter 2017. The vacancy rate in the suburban markets increased to 9.8% in the fourth quarter 2017. The vacancy rate was 9.6% at theTotal endMarket of the third quarter 2017, 9.4% at the end of the second quarter 2017, and 9.2% at the end of the first quarter 2017. Largest Lease Signings The largest lease signings occurring in 2017 included: the 333,929-square-foot lease signed by Encana Oil & Gas (USA), Inc. at Republic Plaza in the Downtown market; the 266,776-square-foot deal signed by Western Union at One Belleview Station in the Southeast Denver market; and the 257,744-square-foot lease signed by Charter Communications at Granite Place at Village Center in the Southeast Denver market.

Sublease Vacancy The amount of vacant sublease space in the Denver market increased 1,906,860 feet4q by2015 the4qend 07 4q2008 4q2009 4q 2010 4qto 2011 4q 2012 4qsquare 2013 4q 2014 2016of 4qthe 2017fourth 4 quarter 2017, from 1,806,780 square feet at the end of the third quarter 2017. There was 1,760,827 square feet vacant at the

U.S. Vacancy Comparison Past 10 Quarters Denver

United States

12.0%

Vacancy Rate

10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2015 3q

2016 1q

2016 3q

2017 1q

2017 3q

end of the second quarter 2017 and 1,788,014 square feet at the end of the first quarter 2017. Denver’s Class-A projects reported vacant sublease space of 1,302,640 square feet at the end of fourth quarter 2017, up from the 1,262,484 square feet reported at the end of the third quarter 2017. There were 1,237,669 square feet of sublease space vacant at the end of the second quarter 2017, and 1,226,093 square feet at the end of the first quarter 2017. Class-B projects reported vacant sublease space of 565,176 square feet at the end of the fourth quarter 2017, up from the 538,976 square feet reported at the end of the third quarter 2017. At the end of the second quarter 2017 there were 508,903 square feet, and at the end of the first quarter 2017 there were 546,231 square feet vacant. Class-C projects reported increased vacant sublease space from the third quarter 2017 to the fourth quarter 2017. Sublease vacancy went from 5,320 square feet to 39,044 square feet during that time. There was 14,255 square feet at the end of the second quarter 2017, and 15,690 square feet at the end of the first quarter 2017. Sublease vacancy in Denver’s central business district stood at 650,542 square feet at the end of the fourth quarter 2017. It was 671,039 square feet at the end of the third quarter 2017, 677,327 square feet at the end of the second quarter 2017, and 717,867 square feet at the end of the first quarter 2017. Sublease vacancy in the suburban markets ended the fourth quarter 2017 at 1,256,318 square feet. At the end of the third quarter 2017 sublease vacancy was 1,135,741 square feet, was 1,083,500 square feet at the end of the second quarter 2017, and was 1,070,147 square feet at the end of the first quarter 2017. Rental Rates The average quoted asking rental rate for available office space, all classes, was $26.32 per square foot per year at the end of the fourth quarter 2017 in the Denver market area. This represented a 1.3% increase in quoted rental rates from the end of the third quarter 2017, when rents were reported at $25.99 per square foot. The average quoted rate within the Class-A sector was $30.16 at the end of the fourth quarter 2017, while Class-B rates stood at $23.49, and Class-C rates at $19.80. At the end of the third quarter 2017, Class-A rates were $29.98 per square foot, Class-B rates were $23.15, and Class-C rates were $19.57. The average quoted asking rental rate in Denver’s CBD was $32.26 at the end of the fourth quarter 2017, and $24.78 in the suburban markets. In the third quarter 2017, quoted rates were $31.69 in the CBD and $24.59 in the suburbs. Deliveries and Construction During the fourth quarter 2017, 11 buildings totaling 482,174 square feet were completed in the Denver market

Source: CoStar Property®

2

CoStar Office Statistics

©2018 CoStar Group, Inc.

5% Year-End 2017 – Denver

Denver Office Market 0%

1999 4q2000 4q 2001 4q2002 4q 2003 4q2004 4q 2005 4q2006 4q 2007 4q20

Overview

Inventory Total office inventory in the Denver market area amounted to 202,018,262 square feet in 7,676 buildings as of the end of the fourth quarter 2017. The Class-A office sector consisted of 69,059,545 square feet in 380 projects. There were 4,016 Class-B buildings totaling 107,386,453 square feet, and the Class-C sector consisted of 25,572,264 square feet in 3,280 buildings. Within the Office market there were 585 owneroccupied buildings accounting for 24,808,354 square feet of office space. Sales Activity Tallying office building sales of 15,000 square feet or larger, Denver office sales figures fell during the third quarter 2017 in terms of dollar volume compared to the second quarter of 2017. In the third quarter, 23 office transactions closed with a total volume of $330,103,956. The 23 buildings totaled 1,511,616 square feet and the average price per square foot equated to $218.38 per square foot. That compares to 32 transactions

©2018 CoStar Group, Inc.

Absorption & Deliveries Past 10 Quarters Net Absorption

Deliveries

1.8 1.55

1.6 1.4

1.20

1.2 Millions SF

area. This compares to four buildings totaling 239,142 square feet that were completed in the third quarter 2017, 17 buildings totaling 1,552,501 square feet completed in the second quarter 2017, and 916,828 square feet in 13 buildings completed in the first quarter 2017. There were 5,233,168 square feet of office space under construction at the end of the fourth quarter 2017. Some of the notable 2017 deliveries include: One Belleview Station, a 318,000-square-foot facility that delivered in second quarter 2017 and is now 100% occupied, and Denver Health Administration, a 300,000-square-foot building that delivered in second quarter 2017 and is now 100% occupied. The largest projects underway at the end of fourth quarter 2017 were 1144 Fifteenth, a 670,000-square-foot building with 39% of its space pre-leased, and 16 Chestnut Building, a 428,219-square-foot facility that is 80% pre-leased.

Source: CoStar Property®

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1.05

0.94

0.8

0.83

0.60

0.6 0.4

0.92

0.51

0.51

0.36

0.26 0.24

0.21

0.17

0.2

0.48

0.42

0.03

0.0 (0.2) (0.20)

(0.4) 2015 3q

2016 1q

2016 3q

(0.17) 2017 1q

2017 3q

Source: CoStar Property®

totaling $554,071,690 in the second quarter 2017. The total square footage in the second quarter was 2,232,598 square feet for an average price per square foot of $248.17. Total office building sales activity in 2017 was up compared to 2016. In the first nine months of 2017, the market saw 87 office sales transactions with a total volume of $1,271,810,441. The price per square foot averaged $216.50. In the same first nine months of 2016, the market posted 86 transactions with a total volume of $1,241,713,939. The price per square foot averaged $166.32. Cap rates have been higher in 2017, averaging 7.21% compared to the same period in 2016 when they averaged 7.19%. One of the largest transactions that has occurred within the last four quarters in the Denver market is the sale of 1125 Seventeenth Street in Denver. This 499,975-square-foot office building sold for $169,700,000, or $339.42 per square foot on 1/9/2017. Reports compiled by: Jeff Warnock, Research Manager.

CoStar Office Statistics

3

Denver � Year-End 2017

Denver Office Market Markets

CoStar Submarket Clusters & Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters

Submarkets

Aurora

Aurora

Boulder

Boulder

Broomfield

Broomfield County

Clear Creek County

Clear Creek County

Colorado Blvd/Glendale

Cherry Creek

Colorado Blvd/I-25

Glendale

LoDo*

Platte River

Downtown

CBD*

Elbert County

Elbert County

Fort Collins/Loveland

Fort Collins/Loveland

Gilpin County

Gilpin County

Longmont

Longmont

Midtown

Capitol Hill

North Denver

North Denver

Northeast Denver

East I-70/Montbello

Northwest Denver

Northwest Denver

Park County

Park County

Parker/Castle Rock

Parker/Castle Rock

Southeast Denver

Arapahoe Rd Greenwood Village Meridian

Southwest Denver

Southwest Denver

Weld County

Weld County

West Denver

West Denver

Boulder County

South Midtown Northeast Denver

Centennial Highlands Ranch Panorama/Highland Park

Denver Tech Center Inverness

East Hampden Lone Tree

* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.

4

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Inventory & development

Historical Deliveries Deliveries

18.0 16.0

1982 - 2017 Average Delivered SF

15.5

Millions of SF

14.0 12.0 9.6

9.1

10.0

8.5 8.6

8.2 8.0 6.0

4.7

4.0

2.5 2.3

2.0

1.8

1.4

0.4

1.9

5.6 3.7

3.3

2.7

2.9

2.6 1.9 2.0 2.3

3.6

3.1

0.9 0.5 0.6 0.5

2.2

1.6

2.4 0.8

1.7

1.2 1.1 1.3

0.0 1982 Source: CoStar Property®

1986

1990

1994

1998

2002

2006

2010

2014

* Future deliveries based on current under construction buildings.

Construction Activity

Markets Ranked by Under Construction Square Footage Average Bldg Size

Under Construction Inventory # Bldgs

Market

Total RBA

Preleased SF

Preleased %

All Existing

U/C

16

2,845,292

1,286,322

45.2%

101,540

177,831

Southeast Denver

5

900,929

487,005

54.1%

55,394

180,186

Boulder

6

301,216

121,303

40.3%

19,700

50,203

Northwest Denver

5

257,462

118,487

46.0%

14,633

51,492

Broomfield

2

255,588

79,000

30.9%

49,826

127,794

West Denver

2

201,000

196,580

97.8%

20,492

100,500

Colorado Blvd/Glendale

2

153,510

66,272

43.2%

29,527

76,755

Weld County

2

122,350

119,141

97.4%

9,760

61,175

Parker/Castle Rock

2

69,230

27,004

39.0%

12,173

34,615

Midtown

1

65,805

47,380

72.0%

13,580

65,805

All Other

3

60,786

50,586

83.2%

17,229

46

5,233,168

2,599,080

Downtown

Totals

49.7%

26,318

20,262 113,765

Source: CoStar Property®

Recent Deliveries

Future Deliveries

Leased & Un-Leased SF in Deliveries Since 2013

Preleased & Un-Leased SF in Properties Scheduled to Deliver

Leased

Un-Leased

Preleased

Un-Leased

2,500

3.5 3.0

2,000 Thousands of SF

2.0 1.5 1.0

1,500

T

Millions of SF

2.5

1,000

500 0.5 0

0.0 2013 Source: CoStar Property®

©2018 CoStar Group, Inc.

2015

2018 1q

2017

2018 3q

Source: CoStar Property®

CoStar Office Statistics

5

Denver � Year-End 2017

Denver Office Market Inventory & development

Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction Construction Starts

1.8

Deliveries 1.55

1.6 1.31

Millions of SF

1.4

1.28

1.2 0.94

1.0 0.8 0.6

1.02 0.94

0.90

0.92

0.87

0.71

0.66

0.540.51

0.53 0.34 0.27

0.4 0.2

1.32

1.26

0.45

0.40

0.51 0.42

0.35

0.23

0.48

0.44 0.24

0.17

0.11

0.31

0.15

0.02 0.0 2014 1q

2015 1q

2016 1q

2017 1q

Source: CoStar Property®

Recent Deliveries by Project Size Building Size

# Bldgs

< 50,000 SF

RBA

Breakdown of Year-to-Date Development Based on RBA of Project SF Leased

% Leased

Avg Rate

Single-Tenant

Multi-Tenant

30

356,179

251,977

70.7%

$24.37

81,751

274,428

50,000 SF - 99,999 SF

8

509,378

384,442

75.5%

$30.51

153,000

356,378

100,000 SF - 249,999 SF

8

1,454,031

1,077,463

74.1%

$36.74

766,708

687,323

250,000 SF - 499,999 SF

3

917,702

917,702

100.0%

$31.27

0

>= 500,000 SF

0

$0.00

0

0

0

0.0%

917,702 0

Source: CoStar Property®

Recent Development by Tenancy

Existing Inventory Comparison

Based on RBA Developed for Single & Multi Tenant Use

Based on Total RBA

2017 Deliveries

Currently Under Construction

By Class

13%

6%

31%

Multi

79%

94%

Single

Multi

Class A

Single

Source: CoStar Property®

6

21%

34%

53% 69%

By Space Type

Class B

Class C

Multi

Single

Source: CoStar Property®

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Inventory & development

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������������������������

©2018 CoStar Group, Inc.

CoStar Office Statistics

7

Denver � Year-End 2017

Denver Office Market Inventory & development

����������������������������������������

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����� ������������������������������ ����������� �������� ����� ������� ���������� � ������� � ����������� �� ������������� ������ ��������������� ������������������ ������������ ������������������ ������������ �������������������� ����������� ��������������������� ����������� ��������������� �

����� ���������������� ����������� �������� ����� ������� ���������� � ������� � ����������� ��� ������������� ������ ��������������� ������������������ ������������ ������������������ ������������ �������������������� ����������� �������������������� ����������� ���������������� �

����� ����������������������������� ����������� �������� ����� ������� ���������� � ������� � ����������� ���� ������������� ��� ��������������� ������������������ ������������ ������������������� ������������ ��������������� ����������� ������������������� ����������� ��������������� �

����������������������� ����������� ���������������� ����� ������� ���������� � ������� � ����������� �� ������������� ������ ��������������� ������������������� ������������ ������������������� ������������ ���� ����������� ��������������������� ����������� ������������������� �

���� ������������ ����������� ����� ���������� ������� ����������� ������������� ��������������� ������������ ������������ ����������� ����������� �

���������������� ������� �� � �� ������ ������������������� ������������������� ���������������������������� ������� ������������������������ ���� ��������������������

����������� ����������� �

��������� ������� � � �� ���������� ������������������� ������������������ �������������������������� �������� ��� ���

������������������������

8

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Figures at a Glance

Class A Market Statistics

Year-End 2017

Existing Inventory

Vacancy

Market

# Blds

Aurora

14

2,158,414

195,435

Boulder

20

2,076,070

Broomfield

20

Clear Creek County

Total RBA

3,171,782

0

0

Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Absorption

Deliveries

Const SF

0

0

195,435

9.1%

(94,919)

172,348

207,237

10.0%

234,738

213,311

247,707

7.8%

88,440

0

0

0.0%

200,000 0

0

Quoted Rates $24.30

83,000

$33.34

255,588

$27.00

0

0

$0.00

Colorado Blvd/Glendale

25

4,108,444

678,062

737,058

17.9%

(3,697)

229,670

153,510

$32.50

Downtown

62

23,576,776

3,410,849

3,889,313

16.5%

62,564

457,653

2,661,052

$34.68

Elbert County Fort Collins/Loveland

0 18

0 1,080,791 0

0 95,477

Gilpin County

0

Longmont

1

106,336

Midtown

7

1,110,758

57,998

North Denver

5

706,944

20,884

0 105,583

0.0% 9.8%

0 85,122

0 128,033

0

0.0%

0

0

$0.00

0

0.0%

22,470

0

0

$24.91

57,998

5.2%

(51,934)

0

20,884

3.0%

0

796

6

556,545

100,324

100,324

18.0%

(60,078)

0

1,873,874

248,990

324,836

17.3%

(150,319)

0

4

Southeast Denver

150

0

0

0

229,056

17,600

17,600

23,869,463

2,682,108

3,252,984

Southwest Denver

5

1,241,467

Weld County

6

667,828

94,897

94,897

0

West Denver

20

2,524,997

221,687

Totals

380

69,059,545

8,209,970

0 260,754

0.0% 7.7%

65,805

0

17 0

$27.69

0

Northwest Denver Park County

$0.00

0

0

Northeast Denver

Parker/Castle Rock

0

0

$20.50

0

$26.50

200,000

0

$29.35

0

0

$25.57 $0.00

42,400

60,000

48,245

$26.26

13.6%

159,145

1,092,767

900,929

$26.44

7.6%

(26,575)

0.0% 10.3%

9,512,610 13.8%

0

0

0

0

$26.15

112,000

$26.70 $27.15

4,230

65,000

175,000

312,383

2,233,123

4,655,129

$30.16

Source: CoStar Property®

Class B Market Statistics

Year-End 2017

Existing Inventory

Absorption

Deliveries

Const SF

Quoted 0

167

6,089,082

560,860

569,524

9.4%

(75,391)

4,026

Boulder

548

12,236,507

1,124,328

1,200,586

9.8%

(82,578)

219,164

70

3,175,348

261,712

266,887

8.4%

79,257

0

0

5

41,618

1.4%

(600)

0

0

$17.07

0

0

$25.64

600

Vac %

Under

Aurora

600

Total SF

YTD

# Blds

Clear Creek County

Direct SF

YTD Net

Market

Broomfield

Total RBA

Vacancy

Colorado Blvd/Glendale

217

7,683,774

670,234

705,588

9.2%

(32,876)

Downtown

212

12,330,148

1,417,081

1,591,697

12.9%

(253,892)

61.5%

Elbert County Fort Collins/Loveland Gilpin County Longmont

4 524 1 88

19,455

11,964

11,964

7,496,844

487,474

504,730

7,400 1,212,172

0 39,453

0.0% 3.3%

(11,964) 189,398 0 7,556

0 177,278

184,240 0 3,200

$25.46 $25.22

$30.05 $0.00 $22.04

0

0

$0.00

0

0

$20.39

Midtown

213

185,602

185,602

4.1%

242,262

300,000

North Denver

104

3,311,327

298,051

309,754

9.4%

74,052

61,000

14,000

Northeast Denver

97

2,852,393

255,132

256,501

9.0%

(70,529)

18,702

43,586

$21.11

Northwest Denver

196

3,300,166

224,115

239,241

7.2%

118,072

19,000

57,462

$19.74

Park County

4

4,522,044

0 32,628

6.7%

64,878

218,216

Rates $17.35

18,064

Parker/Castle Rock

105

Southeast Denver

533

21,351,187

Southwest Denver

281

6,480,368

Weld County

294

3,500,575

West Denver Totals

1,573,577

0

0

0.0%

5,720

7.2%

64,602

2,555,795

12.0%

389,414

34,350

0

701,172

10.8%

137,412

22,426

0

170,035

4.9%

26,891

15,347

12.3%

64,796

9.9%

871,602

113,851

113,851

2,387,133 671,504 170,035

353

10,184,404

1,236,961

1,251,461

4,016

107,386,453

10,109,265

10,674,441

0

0

21,351

0 957,522

0 20,985

$24.31 $22.85

$0.00 $26.87 $22.29 $18.72

10,350

$18.66

26,000

$21.53

578,039

$23.49

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

9

Denver � Year-End 2017

Denver Office Market Figures at a Glance

Class C Market Statistics

Year-End 2017

Existing Inventory

Under

Absorption

Deliveries

Const SF

4.2%

36,059

0

0

125

1,228,406

Boulder

243

1,664,126

40,200

69,217

4.2%

(34,653)

0

0

$24.29

41

180,038

6,260

6,260

3.5%

(1,579)

0

0

$20.63

Colorado Blvd/Glendale Downtown Elbert County Fort Collins/Loveland Gilpin County

5

46,852

51,311

0

0

0

$0.00

2,115,130

185,395

185,510

8.8%

(86,692)

0

0

$19.60

98

1,865,793

57,885

57,885

3.1%

22,475

0

0

$24.22

17

37,572 2,216,942

600 56,276

0.0%

0

Rates $12.75

229

360

0

Vac %

Quoted

Aurora

51,311

Total SF

YTD

# Blds

Clear Creek County

Direct SF

YTD Net

Market

Broomfield

Total RBA

Vacancy

600

1.6%

5,734

0

0

$4.60

56,937

2.6%

97,317

0

0

$19.32

3

7,716

5,088

5,088

65.9%

(5,088)

0

0

$0.00

97

643,719

23,606

23,606

3.7%

1,511

0

0

$17.25

457

3,561,135

128,114

129,114

3.6%

(47,607)

0

0

$26.97

57

377,628

7,553

7,553

2.0%

(1,324)

0

0

$13.93

Northeast Denver

144

1,515,974

50,843

50,843

3.4%

(18,623)

0

0

$15.46

Northwest Denver

251

1,615,447

73,887

73,887

4.6%

9,879

0

0

$22.42

1.1%

3,158

0

0

$8.00

3.2%

1,776

0

0

$20.13

Longmont Midtown North Denver

Park County

10

30,432

Parker/Castle Rock

69

364,207

11,043

11,493

342

342

Southeast Denver

174

2,252,099

115,825

116,475

5.2%

(41,903)

0

0

$16.92

Southwest Denver

265

1,986,453

66,155

66,155

3.3%

22,341

0

0

$16.49

Weld County

265

1,346,103

18,600

18,600

1.4%

13,835

0

0

$10.84

West Denver

370

2,516,492

98,530

105,681

4.2%

12,748

0

0

$16.13

3,280

25,572,264

1,036,557

4.1%

(10,636)

Totals

997,513

0

0

$19.80

Source: CoStar Property®

Total Office Market Statistics

Year-End 2017

Existing Inventory Market

# Blds

Aurora

306

9,475,902

807,606

816,270

Boulder

811

15,976,703

1,336,876

Broomfield

131

6,527,168

481,283

Clear Creek County

10

Total RBA

Vacancy

88,470

Direct SF

600

Total SF

Vac %

YTD Net

YTD

Under

Absorption

Deliveries

Const SF 0

8.6%

(134,251)

4,026

1,477,040

9.2%

117,507

419,164

520,854

8.0%

166,118

600

0.7%

(600)

0 0

Quoted Rates $19.31

301,216

$26.61

255,588

$26.20

0

$17.07

Colorado Blvd/Glendale

471

13,907,348

1,533,691

1,628,156

11.7%

(123,265)

229,670

153,510

$27.97

Downtown

372

37,772,717

4,885,815

5,538,895

14.7%

(168,853)

522,531

2,845,292

$33.26

12,564

12,564

22.0%

(6,230)

639,227

667,250

6.2%

371,837

Elbert County Fort Collins/Loveland Gilpin County

21 902 4

57,027 10,794,577

0 305,311

0 3,200

$4.60 $22.17

15,116

5,088

5,088

33.7%

(5,088)

0

0

$0.00

1,962,227

56,234

63,059

3.2%

31,537

0

0

$21.45

371,714

372,714

4.1%

142,721

338,191

7.7%

73,524

Longmont

186

Midtown

677

9,193,937

North Denver

166

4,395,899

326,488

300,000

65,805

$25.72

61,000

14,000

$22.20

Northeast Denver

247

4,924,912

406,299

407,668

8.3%

(149,230)

18,702

43,586

$22.56

Northwest Denver

464

6,789,487

546,992

637,964

9.4%

(22,368)

19,000

257,462

$23.18

Park County

14

48,496

342

342

0.7%

8,878

6.6%

108,778

81,351

0

69,230

$26.10

12.5%

506,656

1,127,117

900,929

$24.40

Parker/Castle Rock

178

2,166,840

142,494

142,944

Southeast Denver

857

47,472,749

5,185,066

5,925,254

Southwest Denver

551

9,708,288

832,556

862,224

8.9%

133,178

22,426

Weld County

565

5,514,506

188,635

188,635

3.4%

40,726

15,347

1,617,896

10.6%

West Denver Totals

743

15,225,893

1,557,178

7,676

202,018,262

19,316,748

21,223,608 10.5%

81,774 1,173,349

0

0

$8.00

$19.11

122,350

$18.09

65,000

201,000

$21.87

3,190,645

5,233,168

$26.32

Source: CoStar Property®

10

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Figures at a Glance

Class A Submarket Statistics

Year-End 2017

Existing Inventory Market Arapahoe Rd

# Blds

Vacancy

Total RBA

Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Absorption

Deliveries

Const SF

Quoted Rates

1

175,000

9,494

9,494

5.4%

(4,122)

0

0

$0.00

Aurora

14

2,158,414

195,435

195,435

9.1%

(94,919)

0

0

$24.30

Boulder

13

1,506,639

89,236

124,125

8.2%

293,529

7

569,431

83,112

83,112

14.6%

(58,791)

0

20

3,171,782

213,311

247,707

7.8%

88,440

0

4

858,723

57,998

57,998

6.8%

(51,934)

0

3,079,471

16.5%

8,567

0

131,665

23.3%

(131,665)

0

153,271

14.6%

17,106

0

Boulder County Broomfield County Capitol Hill CBD

83,000 0 255,588 0

$24.83 $27.00 $29.35

18,627,140

Centennial

3

565,000

Cherry Creek

9

1,051,356

Clear Creek County

0

Colorado Blvd/I-25

7

1,474,924

335,981

389,483

26.4%

(32,304)

229,670

Denver Tech Center

41

8,031,457

1,229,295

1,328,214

16.5%

323,740

617,702

East Hampden

5

650,996

171,839

171,839

26.4%

(37,805)

0

0

$20.18

East I-70/Montbello

5

500,545

100,324

100,324

20.0%

(60,078)

0

0

$26.50

Elbert County

0

0

0

$0.00

0

$27.69

0

0

$0.00

0

$23.63

Fort Collins/Lovelan.

18

0 1,080,791

151,859

0

0

0

0

95,477

0.0% 9.8%

0

0 85,122

0

128,033

0

Glendale

9

1,582,164

190,222

194,304

12.3%

11,501

0

Greenwood Village

18

3,845,022

331,611

350,654

9.1%

(61,133)

0

Highlands Ranch

10

1,310,809

46,646

126,845

9.7%

(43,845)

0

Inverness

19

2,327,926

426,361

450,610

19.4%

192,900

248,065

LoDo

18

3,268,023

201,306

266,591

8.2%

169,345

235,002

Lone Tree

18

2,261,285

100,116

106,227

4.7%

58,724

Longmont

1

106,336

0.0%

20

2,717,473

178,223

385,507

14.2%

North Denver

5

706,944

20,884

20,884

3.0%

Northeast Denver

1

56,000

Northwest Denver

17

1,873,874

248,990

324,836

17.3%

(150,319)

Panorama/Highland Pa.

15

1,984,495

188,523

191,929

9.7%

79,787

0

0

0

0

0

0

0.0%

0.0%

0

$24.91

0

0

$20.50

0

0

$0.00

796 0

0 227,000

543,251

543,251

32.3%

(115,348)

222,651

South Midtown

3

252,035

Southwest Denver

5

1,241,467

Weld County

6

667,828

West Denver

20

2,524,997

221,687

Totals

380

69,059,545

8,209,970

260,754

10.3%

9,512,610 13.8%

$26.61

0

1,681,613

0.0%

337,929

$23.19

0

10

0

0

$26.80

(217,436)

60,000

0

306,000

$27.62

$24.91

42,400

7.6%

257,000

0

7.7%

94,897

$31.83

0

17,600

94,897

0

22,470

17,600

0.0%

$0.00

$28.38

229,056

0

0

0

4

0

$41.65

0

Parker/Castle Rock

0.0%

153,510

$0.00

$40.48

0

0

0

$33.40

0

Park County

Platte River

0

0

105,583

0.0%

Gilpin County

Meridian

0

0

770,303

$40.50

34

0

2,666,292

200,000

0

0 (26,575) 0

0

0 0 0

200,000

$25.57

0

$25.42

0

$0.00

48,245

$26.26

1,890,749

$39.70

65,805 0

$0.00 $26.15

112,000

$26.70 $27.15

4,230

65,000

175,000

312,383

2,233,123

4,655,129

$30.16

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

11

Denver � Year-End 2017

Denver Office Market Figures at a Glance

Class B Submarket Statistics

Year-End 2017

Existing Inventory Market Arapahoe Rd

# Blds

Total RBA

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Absorption

Deliveries

Const SF

Quoted

0

0

$21.85

0

$17.35

Rates

37

1,054,951

35,562

35,562

3.4%

5,857

Aurora

167

6,089,082

560,860

569,524

9.4%

(75,391)

4,026

Boulder

387

8,896,110

703,103

761,408

8.6%

(29,509)

120,200

62,352

$26.30

Boulder County

161

3,340,397

421,225

439,178

13.1%

(53,069)

98,964

155,864

$23.70

Broomfield County

70

3,175,348

261,712

266,887

8.4%

79,257

0

0

$25.22

142

2,915,315

107,775

107,775

3.7%

(34,074)

0

0

$21.91

896,878

1,030,300

14.0%

(216,498)

0

0

$26.85

Capitol Hill CBD

69

7,346,658

Centennial

69

2,560,599

Cherry Creek

60

Clear Creek County

5

1,548,115 41,618

Colorado Blvd/I-25

104

3,131,360

Denver Tech Center

53

3,388,405

East Hampden

75

East I-70/Montbello Elbert County Fort Collins/Lovelan. Gilpin County

182,152

194,057

7.6%

(28,838)

0

0

$20.02

140,465

151,378

9.8%

(16,831)

0

0

$31.78

1.4%

(600)

0

0

$17.07

600

327,221

10.4%

(54,086)

0

0

$22.32

545,633

550,375

16.2%

206,849

0

0

$23.79

2,298,545

189,556

192,387

8.4%

51,218

0

0

$16.18

44

1,984,629

91,316

92,685

4.7%

27,043

5,000

4

19,455

11,964

11,964

61.5%

(11,964)

7,496,844

487,474

504,730

524 1

7,400

315,511

600

0

0

6.7% 0.0%

189,398 0

0 177,278

43,586 0 3,200

$20.82 $0.00 $22.04

0

0

$0.00

Glendale

53

3,004,299

214,258

226,989

7.6%

38,041

0

0

$26.60

Greenwood Village

99

4,908,371

718,803

793,942

16.2%

101,464

0

0

$22.46

Highlands Ranch

28

882,679

84,631

84,631

9.6%

(11,529)

0

0

$26.22

Inverness

85

3,295,617

471,062

518,538

15.7%

30,958

9,350

0

$22.14

106

3,820,399

365,451

404,107

10.6%

23,961

53,478

Lone Tree

43

850,579

55,164

55,164

6.5%

61,133

25,000

Longmont

88

1,212,172

32,628

39,453

3.3%

7,556

Meridian

13

602,498

36,268

44,490

7.4%

6,351

104

3,311,327

298,051

309,754

9.4%

74,052

61,000

Northeast Denver

53

867,764

163,816

163,816

18.9%

(97,572)

13,702

Northwest Denver

196

3,300,166

224,115

239,241

7.2%

118,072

19,000

31

1,508,943

68,302

86,649

5.7%

(34,049)

4

18,064

LoDo

North Denver

Panorama/Highland Pa. Park County Parker/Castle Rock

0

0

0.0%

5,720

44,240

$33.93

0

$30.18

0

0

$20.39

0

0

$23.94

14,000 0 57,462

$22.85 $21.88 $19.74

0

0

$22.27

0

0

$0.00

105

1,573,577

113,851

113,851

7.2%

64,602

21,351

20,985

$26.87

Platte River

37

1,163,091

154,752

157,290

13.5%

(61,355)

11,400

140,000

$37.28

South Midtown

71

1,606,729

77,827

77,827

4.8%

276,336

300,000

0

$26.13

Southwest Denver

281

6,480,368

671,504

701,172

10.8%

137,412

22,426

0

$18.72

Weld County

294

3,500,575

170,035

170,035

4.9%

26,891

15,347

West Denver

353

10,184,404

1,236,961

4,016

107,386,453

10,109,265

Totals

1,251,461 12.3% 10,674,441

9.9%

64,796 871,602

0 957,522

10,350

$18.66

26,000

$21.53

578,039

$23.49

Source: CoStar Property®

12

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Figures at a Glance

Class C Submarket Statistics

Year-End 2017

Existing Inventory Market Arapahoe Rd

# Blds 39

Total RBA

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

504,175

38,915

38,915

7.7%

(4,609)

0

0

$16.40

51,311

4.2%

36,059

0

0

$12.75

Aurora

125

1,228,406

51,311

Boulder

183

1,357,137

25,241

54,258

4.0%

(24,585)

0

0

$24.78

Boulder County

60

306,989

14,959

14,959

4.9%

(10,068)

0

0

$20.44

Broomfield County

41

180,038

6,260

6,260

3.5%

(1,579)

0

0

$20.63

285

2,151,968

121,077

122,077

5.7%

(97,247)

0

0

$26.32

CBD

29

1,125,758

21,649

21,649

1.9%

29,175

0

0

$20.42

Centennial

15

377,635

0

0

$0.00

Cherry Creek

49

421,647

0

0

$31.69

Clear Creek County

5

46,852

0

0

$0.00

Colorado Blvd/I-25

133

1,241,127

133,966

134,081

10.8%

0

0

$18.20

Denver Tech Center

12

183,388

5,044

5,044

2.8%

(744)

0

0

$17.64

East Hampden

62

576,761

26,696

27,346

4.7%

(6,532)

0

0

$16.32

East I-70/Montbello

33

523,250

10,951

10,951

2.1%

(6,718)

0

0

$13.25

Elbert County

17

37,572

600

600

1.6%

5,734

0

0

$4.60

360

2,216,942

56,276

56,937

2.6%

97,317

0

0

$19.32

Capitol Hill

Fort Collins/Lovelan. Gilpin County

0

0

23,420

23,420 0

0

0.0% 5.6% 0.0%

0 (2,695) 0 (91,794)

3

7,716

5,088

5,088

65.9%

(5,088)

0

0

$0.00

Glendale

47

452,356

28,009

28,009

6.2%

7,797

0

0

$14.86

Greenwood Village

18

194,995

36,539

36,539

18.7%

(33,967)

0

0

$19.38

Highlands Ranch

2

16,633

1,500

1,500

9.0%

(1,500)

0

0

$0.00

Inverness

5

79,735

0

0

$0.00

31

461,087

0

0

$31.14

Lone Tree

3

10,707

0

0

$0.00

Longmont

97

643,719

0

0

$17.25

2

91,117

0

0

$0.00

North Denver

57

377,628

7,553

7,553

2.0%

(1,324)

0

0

$13.93

Northeast Denver

111

992,724

39,892

39,892

4.0%

(11,905)

0

0

$16.40

Northwest Denver

251

1,615,447

73,887

73,887

4.6%

9,879

0

0

$22.42

Panorama/Highland Pa.

16

216,953

7,131

7,131

3.3%

5,449

0

0

$16.68

Park County

10

30,432

342

342

1.1%

3,158

0

0

$8.00

Parker/Castle Rock

69

364,207

11,043

11,493

3.2%

1,776

0

0

$20.13

Platte River

38

278,948

20,250

20,250

7.3%

(9,836)

0

0

$25.18

South Midtown

172

1,409,167

7,037

7,037

0.5%

49,640

0

0

$27.76

Southwest Denver

265

1,986,453

66,155

66,155

3.3%

22,341

0

0

$16.49

Weld County

265

1,346,103

18,600

18,600

1.4%

13,835

0

0

$10.84

West Denver

370

2,516,492

98,530

105,681

4.2%

12,748

0

0

$16.13

3,280

25,572,264

1,036,557

4.1%

(10,636)

LoDo

Meridian

Totals

0

0

15,986 0

15,986 0

23,606 0

23,606 0

997,513

0.0% 3.5% 0.0% 3.7% 0.0%

0 3,136 0 1,511 0

0

0

$19.80

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

13

Denver � Year-End 2017

Denver Office Market Figures at a Glance

Total Office Submarket Statistics Existing Inventory Market Arapahoe Rd

# Blds

Total RBA

Year-End 2017

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

0

0

$19.60

0

$19.31

77

1,734,126

83,971

83,971

4.8%

(2,874)

Aurora

306

9,475,902

807,606

816,270

8.6%

(134,251)

Boulder

583

11,759,886

817,580

939,791

8.0%

239,435

320,200

145,352

$27.97

Boulder County

228

4,216,817

519,296

537,249

12.7%

(121,928)

98,964

155,864

$23.88

Broomfield County

131

6,527,168

481,283

520,854

8.0%

166,118

0

255,588

$26.20

Capitol Hill

431

5,926,006

286,850

287,850

4.9%

(183,255)

0

CBD

132

27,099,556

3,584,819

4,131,420

15.2%

(178,756)

0

Centennial

87

3,503,234

182,152

325,722

9.3%

(160,503)

0

Cherry Creek

118

3,021,118

315,744

328,069

10.9%

(2,420)

0

Clear Creek County

10

88,470

0.7%

(600)

0

Colorado Blvd/I-25

244

5,847,411

785,458

850,785

14.5%

(178,184)

229,670

Denver Tech Center

106

11,603,250

1,779,972

1,883,633

16.2%

529,845

617,702

East Hampden

142

3,526,302

388,091

391,572

11.1%

6,881

East I-70/Montbello

82

3,008,424

202,591

203,960

6.8%

(39,753)

5,000

Elbert County

21

57,027

12,564

12,564

22.0%

(6,230)

0

639,227

667,250

6.2%

371,837

33.7%

(5,088)

0

0

$0.00

8.9%

57,339

0

0

$24.77

6,364

0 0

Fort Collins/Lovelan. Gilpin County

902

10,794,577

4

15,116

600

5,088

Glendale

109

5,038,819

432,489

Greenwood Village

135

8,948,388

1,086,953

Highlands Ranch

40

2,210,121

600

5,088 449,302

1,181,135 13.2%

132,777

212,976

9.6%

(56,874)

4,026

0

305,311

0 770,303 0 153,510

$25.01 $31.83 $20.02 $36.99

0

$17.07

0

$25.78

257,000 0 43,586 0 3,200

306,000 0

$26.45 $17.91 $23.15 $4.60 $22.17

$24.09 $24.41

Inverness

109

5,703,278

897,423

969,148

17.0%

223,858

257,415

337,929

$24.22

LoDo

155

7,549,509

582,743

686,684

9.1%

196,442

288,480

44,240

$35.31

25,000

Lone Tree

64

3,122,571

155,280

161,391

5.2%

119,857

Longmont

186

1,962,227

56,234

63,059

3.2%

31,537

35

3,411,088

214,491

429,997

12.6%

(211,085)

North Denver

166

4,395,899

326,488

338,191

7.7%

73,524

61,000

Northeast Denver

165

1,916,488

203,708

203,708

10.6%

(109,477)

13,702

Northwest Denver

464

6,789,487

546,992

637,964

9.4%

(22,368)

19,000

Panorama/Highland Pa.

62

3,710,391

263,956

285,709

7.7%

51,187

227,000

Park County

14

48,496

0.7%

8,878

Meridian

Parker/Castle Rock

342

342

0

$29.61

0

0

$21.45

0

0

$24.69

0

14,000 0 257,462

$22.20 $20.36 $23.18

0

$23.76

0

$8.00

178

2,166,840

142,494

142,944

6.6%

108,778

81,351

69,230

$26.10

85

3,123,652

718,253

720,791

23.1%

(186,539)

234,051

2,030,749

$38.63

South Midtown

246

3,267,931

84,864

84,864

2.6%

325,976

300,000

65,805

$26.56

Southwest Denver

551

9,708,288

832,556

862,224

8.9%

133,178

22,426

Weld County

565

5,514,506

188,635

188,635

3.4%

40,726

15,347

122,350

$18.09

West Denver

743

15,225,893

1,557,178

1,617,896

10.6%

81,774

65,000

201,000

$21.87

7,676

202,018,262

19,316,748

3,190,645

5,233,168

Platte River

Totals

21,223,608 10.5%

1,173,349

0

$19.11

$26.32

Source: CoStar Property®

14

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Figures at a Glance

Class A Market Statistics

Year-End 2017

Existing Inventory Market CBD

Suburban Totals

# Blds

Total RBA

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

52

21,895,163

2,867,598

3,346,062

15.3%

177,912

235,002

328

47,164,382

5,342,372

6,166,548

13.1%

134,471

1,998,121

69,059,545

8,209,970

13.8%

312,383

2,233,123

380

9,512,610

770,303

$33.67

3,884,826

$28.52

4,655,129

$30.16

Source: CoStar Property®

Class B Market Statistics

Year-End 2017

Existing Inventory Market CBD

# Blds 175

Total RBA 11,167,057

Vacancy Direct SF

Total SF

Vac %

1,262,329

1,434,407

12.8%

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

(192,537)

53,478

44,240

$29.12

904,044

533,799

$22.72

Suburban

3,841

96,219,396

8,846,936

9,240,034

9.6%

1,064,139

Totals

4,016

107,386,453

10,109,265

10,674,441

9.9%

871,602

957,522

578,039

$23.49

Source: CoStar Property®

Class C Market Statistics

Year-End 2017

Existing Inventory Market CBD

Suburban Totals

# Blds

Total RBA

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

60

1,586,845

37,635

37,635

2.4%

32,311

0

0

$23.15

3,220

23,985,419

959,878

998,922

4.2%

(42,947)

0

0

$19.71

1,036,557

4.1%

3,280

25,572,264

997,513

(10,636)

0

0

$19.80

Source: CoStar Property®

Class A & B Market Statistics

Year-End 2017

Existing Inventory Market CBD

# Blds

Total RBA

Vacancy Direct SF

Total SF

Vac %

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

227

33,062,220

4,129,927

4,780,469

14.5%

(14,625)

288,480

814,543

$32.32

Suburban

4,169

143,383,778

14,189,308

15,406,582

10.7%

1,198,610

2,902,165

4,418,625

$25.10

Totals

4,396

176,445,998

18,319,235

11.4%

1,183,985

3,190,645

5,233,168

20,187,051

$26.64

Source: CoStar Property®

Total Office Market Statistics

Year-End 2017

Existing Inventory Market CBD

Suburban Totals

# Blds 287

7,389 7,676

Total RBA

Vacancy

YTD Net

YTD

Under

Quoted

Deliveries

Const SF

Rates

Direct SF

Total SF

Vac %

Absorption

34,649,065

4,167,562

4,818,104

13.9%

17,686

167,369,197

15,149,186

16,405,504

202,018,262

19,316,748

21,223,608

288,480

814,543

$32.26

$24.78

9.8%

1,155,663

2,902,165

4,418,625

10.5%

1,173,349

3,190,645

5,233,168

$26.32

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

15

Denver � Year-End 2017

Denver Office Market Figures at a Glance

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���������� ������ ��� �� ��� ��� �� ��� ��� �� ��� ��� ��� ��� ��� ��� ��� ���

��������� �������� �������� ���������� �������� �������� �������� �������� �������� ���������� ���������� ���������� ���������� �������� ���������� ���������� ����������

������������ ������ ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ��� ���

��������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� ���������� �������� ���������� ����������

������ ����� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ��������� ���������

������������������������

16

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Leasing Activity

Historical Rental Rates Based on Full-Service Equivalent Rental Rates A

B

C

Total Market

$35.00

         

$30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 1999 4q

2001 4q

2003 4q

2005 4q

2007 4q

2009 4q

2011 4q

2013 4q

2015 4q

2017 4q

Source: CoStar Property®

Vacancy by Available Space Type

Vacancy by Class

Percent of All Vacant Space in Direct vs. Sublet

Percent of All Vacant Space by Class

Denver

United States

9%

Denver

5%

United States

13%

5% 50% 45%

42%

45% 91%

Direct

95%

Sublet

Direct

Sublet

Source: CoStar Property®

Class A

Class B

Class C

Class A

Class B

Class C

Source: CoStar Property®

U.S. Rental Rate Comparison

Future Space Available

Based on Full-Service Equivalent Rental Rates

Space Scheduled to be Available for Occupancy*

Denver

United States

$30.00

4.0

3.50

3.5

          

$25.00

3.0

$20.00

2.33

2.5 2.0

$15.00

1.5 $10.00

1.0 $5.00

0.5

$0.00

0.0 2015 3q

Source: CoStar Property®

©2018 CoStar Group, Inc.

2016 3q

0.51 0.00 2018 1q

2017 3q

* Includes Under Construction Spaces

CoStar Office Statistics

2018 3q

0.00

0.00

2019 1q

Source: CoStar Property®

17

Denver � Year-End 2017

Denver Office Market Leasing Activity

Select Top O�ce Leases

Based on Leased Square Footage For Deals Signed in 2017

Building

Submarket

SF

Qtr

Tenant Name

Tenant Rep Company

Landlord Rep Company

1

Republic Plaza*

CBD

333,929

1st

Encana Oil & Gas (USA), Inc.

JLL

JLL

2

One Belleview Station

Denver Tech Center

266,776

3rd

Western Union

Avison Young

Cushman & Wake�eld

3

Granite Place at Village Center

Denver Tech Center

257,744

1st

Charter Communications

N/A

Colliers International

4

INOVA Dry Creek 2

Inverness

141,736

3rd

The Travelers Companies, Inc.

JLL

Newmark Knight Frank

5

Denver Place

CBD

90,217

1st

Vertafore

CBRE

CBRE

6

7979 E Tufts Ave

Denver Tech Center

85,547

4th

Western Union

N/A

Newmark Knight Frank

7

Lansing Point

Meridian

83,001

2nd

Catholic Health Initiatives

Direct Deal

Direct Deal

8

Coal Creek Business Park 1

Boulder County

76,223

4th

Medtronic Inc

N/A

CBRE

9

1801 California*

CBD

74,421

1st

DOJ

N/A

Cushman & Wake�eld

10

Circle Point I

Northwest Denver

71,464

4th

N/A

Cushman & Wake�eld

Cushman & Wake�eld

11

Corporex Center

Inverness

66,809

4th

Performance Food Group

N/A

RISE Commercial Real Estate Advisor

12

4100 E Arkansas Ave*

Colorado Blvd/I-25

63,000

3rd

AAA Colorado, Inc

RE/MAX Commercial Alliance

Direct Deal

13

4100 E Arkansas Ave

Colorado Blvd/I-25

63,000

3rd

The Green Solution

N/A

Direct Deal

14

Landmark Corporate Center

Greenwood Village

62,124

2nd

Air Methods Corp

N/A

Cushman & Wake�eld

15

Cascades

Greenwood Village

61,153

2nd

National Cinemedia

Newmark Knight Frank

Colliers International

16

Church Ranch Corp Center - Bldg 2

Northwest Denver

55,004

2nd

Staples

N/A

CBRE

17

City Center

CBD

51,377

2nd

Marketo

CBRE

JLL

18

101 W Colfax Ave

CBD

46,125

2nd

City and County of Denver

N/A

JLL

19

1821 30th St

Boulder

45,598

1st

Zayo Group

N/A

The Macerich Company

20

1601 Wewatta St

Platte River

44,416

1st

Delloite

N/A

Cushman & Wake�eld

21

1401 Lawrence St

CBD

44,020

2nd

Jagged Peak Energy

N/A

Newmark Knight Frank

22

1800 Wazee St.

LoDo

42,635

2nd

CTRL Collective

N/A

Newmark Knight Frank

23

Two Maroon Circle

Meridian

42,149

4th

Zynex Medical

Savills Studley

RISE Commercial Real Estate Advisor

24

Granite Place at Village Center

Denver Tech Center

41,958

2nd

CSG Systems

N/A

Colliers International

25

Coal Creek Business Park 2

Boulder County

40,511

4th

N/A

N/A

CBRE

26

1801 California

CBD

38,356

2nd

Ibotta

Tributary Real Estate; JLL

Cushman & Wake�eld

27

Johns Manville Plaza

CBD

38,231

2nd

Evolve Vacation Network

N/A

JLL

28

3333 Walnut St.

Boulder

32,773

2nd

Google

CBRE

JLL

29

400 Centennial Pky*

Boulder County

32,699

3rd

Uber Technologies, Inc

JLL

Keys Commercial

30

Creekside Business Park - Bldg 1*

Boulder County

31,183

1st

Pharmerica

N/A

Magi RE Services

31

Jackson National Life

Denver Tech Center

30,502

3rd

Zoom

CBRE

Cushman & Wake�eld

32

2620 E Prospect Rd

Fort Collins/Loveland

30,227

2nd

N/A

Colliers International

CBRE

33

1144 Fifteenth

CBD

30,000

4th

Greenberg Traurig LLP

N/A

JLL

34

The Circa

Platte River

29,989

4th

Xero

JLL

JLL

35

Circle Point Corporate Center II

Northwest Denver

29,731

2nd

Swisslog Healthcare Solutions

JLL

Cushman & Wake�eld

36

Waterview III

Panorama/Highland Park

29,414

4th

N/A

N/A

Transwestern

37

FlatIrons North - Bldg B

Boulder

29,369

3rd

N/A

N/A

The W.W. Reynolds Companies, Inc.

38

Boulder High Point

Boulder

28,463

3rd

N/A

N/A

The W.W. Reynolds Companies, Inc.

39

Peakview Tower

Greenwood Village

27,674

1st

N/A

N/A

Cresa

Source: CoStar Property®

* Renewal 18

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market Sales Activity

The Optimist Sales Index

Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter Price/SF

$630

7.0%

$580

6.0%

$530

5.0%

$480

4.0% $430

3.0%

Dollars/SF

Cap Rate Percentage

Cap Rate

8.0%

$380

2.0%

$330

1.0% 0.0%

$280 2014 4q

2015 4q

2016 4q

Source: CoStar COMPS®

Sales Volume & Price

Sales Analysis by Building Size

Based on Office Building Sales of 15,000 SF and Larger

Based on Office Building Sales From Oct. 2016 - Sept. 2017

Sales Volume

Bldg Size

Price/SF

#

RBA

$ Volume

Price/SF Cap Rate

$300

$900 $250

$800 $700

< 50,000 SF

206 2,762,415

$462,556,586

$ 167.45

7.41%

50K-249K SF

46 5,484,514

$1,196,712,246

$ 218.20

7.24%

1,264,651

$313,350,000

$ 247.78

6.20%

2 1,181,946

$189,800,000

$ 160.58

6.75%

$200

$600 $500

$150

Price/SF

Millions of Sales Volume Dollars

$1,000

$400 $100

$300 $200

250K-499K SF

3

$50

$100 $0 2014 1q

$0 2015 1q

2016 1q

>500K SF

2017 1q

Source: CoStar COMPS®

Source: CoStar COMPS®

U.S. Price/SF Comparison

U.S. Cap Rate Comparison

Based on Office Building Sales of 15,000 SF and Larger

Based on Office Building Sales of 15,000 SF and Larger

$310

Denver

Denver

US

$290

8.0% Cap Rate Percentage

$270 Dollars per SF

US

9.0%

$250 $230 $210 $190

7.0% 6.0% 5.0% 4.0%

$170 3.0%

$150 $130 2014 1q Source: CoStar COMPS®

©2018 CoStar Group, Inc.

2.0% 2015 1q

2016 1q

2017 1q

2014 1q

2015 1q

2016 1q

2017 1q

Source: CoStar COMPS®

CoStar Office Statistics

19

Denver � Year-End 2017

Denver Office Market Sales Activity

����������������

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������

������������ ������� ����� ������� ��������� ���� ����������������������������������� ���� �����������������������

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����������� ������� ���� ������� ���������� ���� ������������������������������� ������������� �����������������������������

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20

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market A u r o r a

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.150

Historical Analysis, All Classes Absorption SF

Vacancy

16.0% 14.0% 12.0% 10.0%

0.050

8.0% 0.000

6.0%

Percent Vacant

Millions SF

0.100

4.0%

(0.050)

2.0% (0.100)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

1.00

$19.50

Sublet SF

0.90

$19.00

Dollars/SF/Year

0.80

Millions SF

0.70 0.60 0.50 0.40

$18.50 $18.00 $17.50 $17.00

0.30 0.20

$16.50

0.10 $16.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 306 9,475,902

Vacancy Vacant SF Vacancy % 816,270 8.6%

Net Absorption 9,635

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $19.31

2017 3q

306

9,475,902

825,905

8.7%

(39,983)

0

0

0

0

$18.66

2017 2q

306

9,475,902

785,922

8.3%

(77,298)

0

0

0

0

$18.28

2017 1q

305

9,467,470

700,192

7.4%

(26,605)

1

2016 4q

304

9,463,444

669,561

7.1%

109,465

0

4,026

1

8,432

$18.41

0

2

12,458

$17.22

2016 3q

303

9,455,944

771,526

8.2%

97,597

0

0

3

19,958

$17.27

2016 2q

303

9,455,944

869,123

9.2%

16,144

0

0

2

11,526

$17.83

2016 1q

302

9,451,244

880,567

9.3%

(16,466)

0

0

2

12,200

$17.86

2015 4q

302

9,451,244

864,101

9.1%

130,552

0

0

1

4,700

$18.22

2015 3q

302

9,451,244

994,653

10.5%

89,438

1

1

4,700

$18.09

2015 2q

301

9,339,244

972,091

10.4%

2015 1q

301

9,339,244

946,960

10.1%

106,885

(25,131)

112,000

0

0

1

112,000

$17.77

0

0

1

112,000

$17.49 $17.54

2014 4q

301

9,339,244

1,053,845

11.3%

65,800

0

0

1

112,000

2014 3q

301

9,339,244

1,119,645

12.0%

54,082

0

0

1

112,000

$17.74

2014 2q

301

9,339,244

1,173,727

12.6%

83,858

0

0

1

112,000

$16.82

2014 1q

301

9,339,244

1,257,585

13.5%

(5,963)

0

0

0

0

$16.31

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

21

Denver – Year-End 2017

Denver Office Market B o u l d e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

Absorption SF

Vacancy

10.0%

0.250

9.0%

0.200

8.0% 7.0%

0.150

6.0%

0.100

5.0% 0.050

4.0%

0.000

Percent Vacant

Millions SF

0.300

Historical Analysis, All Classes

3.0%

(0.050)

2.0%

(0.100)

1.0%

(0.150)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

1.60

$27.50

Sublet SF

1.40

$27.00 Dollars/SF/Year

Millions SF

1.20 1.00 0.80 0.60

$26.50 $26.00 $25.50

0.40 $25.00 0.20 $24.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 811 15,976,703

Vacancy Vacant SF Vacancy % 1,477,040 9.2%

Net Absorption 47,126

Delivered Inventory # Bldgs Total RBA 3 262,798

2017 3q

808

15,713,905

1,261,286

8.0%

(77,483)

1

2017 2q

807

15,709,739

1,179,637

7.5%

157,063

3

2017 1q

805

15,564,447

1,191,408

7.7%

(9,199)

0

2016 4q

805

15,564,447

1,182,209

7.6%

(73,707)

0

2016 3q

805

15,564,447

1,108,502

7.1%

24,741

2

2016 2q

803

15,325,692

894,488

5.8%

77,296

0

2016 1q

803

15,325,692

971,784

6.3%

15,160

1

61,717

4,166

UC Inventory # Bldgs Total RBA 6 301,216

Quoted Rates $26.61

8

506,414

8

448,228

$27.08

0

9

530,330

$26.83

0

8

490,330

$26.43

5

395,200

$26.67

7

633,955

$26.17

4

481,755

$25.50

152,200

238,755 0

$26.93

2015 4q

802

15,263,975

925,227

6.1%

9,164

1

13,065

4

343,472

$24.95

2015 3q

803

15,263,433

933,849

6.1%

(18,802)

1

29,451

4

293,537

$24.45

322,988

$23.99

2015 2q

802

15,233,982

885,596

5.8%

(101,218)

0

0

5

2015 1q

802

15,233,982

784,378

5.1%

(7,803)

0

0

3

218,271

$23.27

2014 4q

802

15,233,982

776,575

5.1%

47,931

0

0

3

218,271

$22.85

884,506

3

218,271

$22.54

2014 3q

803

15,293,982

5.8%

17,245

0

2014 2q

803

15,293,982

901,751

5.9%

(20,265)

1

8,100

0

0

2014 1q

802

15,285,882

873,386

5.7%

67,604

1

12,500

1

0 8,100

$22.18 $21.31

Source: CoStar Property®

22

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market B r o o m f i e l d

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.200

Historical Analysis, All Classes Absorption SF

Vacancy

16.0% 14.0%

0.150

10.0%

0.050

8.0% 6.0%

0.000

Percent Vacant

Millions SF

12.0% 0.100

4.0% (0.050)

2.0%

(0.100)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.80

$27.50

Sublet SF

0.70

$27.00 Dollars/SF/Year

Millions SF

0.60 0.50 0.40 0.30 0.20

$26.50

$26.00

$25.50

0.10 $25.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 131 6,527,168

Vacancy Vacant SF Vacancy % 520,854 8.0%

Net Absorption 65,356

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 2 255,588

Quoted Rates $26.20

2017 3q

131

6,527,168

586,210

9.0%

(4,561)

0

0

2

255,588

2017 2q

131

6,527,168

581,649

8.9%

68,081

0

0

1

176,588

$26.72

2017 1q

130

6,507,343

629,905

9.7%

37,242

0

0

2

196,413

$26.75

2016 4q

130

6,507,343

667,147

10.3%

(11,487)

0

0

2

196,413

$26.64

2016 3q

130

6,507,343

655,660

10.1%

(5,106)

1

102,869

1

19,825

$26.54

2016 2q

129

6,404,474

547,685

8.6%

170,603

1

11,009

1

102,869

$26.57

2016 1q

128

6,393,465

707,279

11.1%

(76,690)

0

0

2

113,878

$27.14

2015 4q

128

6,393,465

630,589

9.9%

21,135

0

0

2

113,878

$26.71

2015 3q

128

6,393,465

651,724

10.2%

25,815

0

0

2

113,878

$26.21

2015 2q

128

6,393,465

677,539

10.6%

39,269

0

0

2

113,878

$26.52

11,009

$25.78

2015 1q

128

6,393,465

716,808

11.2%

177,155

0

0

1

2014 4q

128

6,393,465

893,963

14.0%

9,466

0

0

0

0

$26.64

2014 3q

128

6,393,465

903,429

14.1%

34,174

0

0

0

0

$26.30

2014 2q

128

6,393,465

937,603

14.7%

21,758

0

0

0

0

2014 1q

127

6,386,826

952,722

14.9%

95,248

0

0

1

6,639

$26.57

$26.01 $26.93

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

23

Denver – Year-End 2017

Denver Office Market C l e a r

C r e e k

C o u n t y

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.020

M a r k e t

Historical Analysis, All Classes Absorption SF

Vacancy

25.0%

0.015 20.0%

0.005

15.0%

0.000 10.0%

(0.005) (0.010)

Percent Vacant

Millions SF

0.010

5.0%

(0.015) (0.020)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.02

$35.00

Sublet SF

$30.00

0.02

Dollars/SF/Year

0.01

Millions SF

0.01 0.01 0.01 0.01

$25.00 $20.00 $15.00 $10.00

0.00 $5.00

0.00

$0.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 10 88,470

2017 3q

10

88,470

2017 2q

10

88,470

Vacancy Vacant SF Vacancy % 600 0.7% 17,034 600

19.3% 0.7%

Net Absorption 16,434 (16,434) (600)

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $17.07

0

0

0

0

$15.20

0

0

0

0

$22.88

2017 1q

10

88,470

0

0.0%

0

0

0

0

0

$31.25

2016 4q

10

88,470

0

0.0%

0

0

0

0

0

$0.00

2016 3q

10

88,470

0

0.0%

0

0

0

0

0

$7.35

2016 2q

10

88,470

0

0.0%

0

0

0

0

0

$7.35

2016 1q

10

88,470

0

0.0%

0

0

0

0

0

$7.35

2015 4q

10

88,470

0

0.0%

800

0

0

0

0

$7.35

2015 3q

10

88,470

800

0.9%

0

0

0

0

0

$7.35

2015 2q

10

88,470

800

0.9%

0

0

0

0

0

$7.35

2015 1q

10

88,470

800

0.9%

0

0

0

0

0

$7.35

2014 4q

10

88,470

800

0.9%

0

0

0

0

0

$7.35

2014 3q

10

88,470

800

0.9%

0

0

0

0

0

$7.35

2014 2q

10

88,470

800

0.9%

1,460

0

0

0

0

$7.35

2014 1q

10

88,470

2,260

2.6%

(100)

0

0

0

0

$7.35

Source: CoStar Property®

24

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market C o l o r a d o

B l v d / G l e n d a l e

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.300

M a r k e t

Historical Analysis, All Classes Absorption SF

Vacancy

14.0%

0.250 12.0%

0.200

10.0% 8.0%

0.050 0.000

6.0%

(0.050)

Percent Vacant

Millions SF

0.150 0.100

4.0%

(0.100) (0.150)

2.0%

(0.200) (0.250)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

1.80

$28.50

Sublet SF

$28.00

1.60

$27.50

1.40 Dollars/SF/Year

$27.00

Millions SF

1.20 1.00 0.80 0.60

$26.50 $26.00 $25.50 $25.00 $24.50

0.40

$24.00

0.20

$23.50

0.00

$23.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 471 13,907,348

Vacancy Vacant SF Vacancy % 1,628,156 11.7%

Net Absorption (194,205)

Delivered Inventory # Bldgs Total RBA 0 0

2017 3q

471

13,907,348

1,433,951

10.3%

35,154

0

2017 2q

471

13,907,348

1,469,105

10.6%

32,996

1

0

2017 1q

471

13,692,678

1,287,431

9.4%

2,790

0

2016 4q

471

13,692,678

1,290,221

9.4%

(3,213)

0

2016 3q

471

13,689,321

1,283,651

9.4%

(39,969)

1

2016 2q

470

13,671,344

1,225,705

9.0%

(21,407)

0

2016 1q

474

13,687,275

1,220,229

8.9%

(9,172)

2015 4q

476

13,716,853

1,240,635

9.0%

31,091

2015 3q

477

13,741,103

1,295,976

9.4%

140,703

2

127,090 149,000

229,670 0

UC Inventory # Bldgs Total RBA 2 153,510

Quoted Rates $27.97

2

153,510

2

153,510

$27.26 $26.15

3

383,180

$26.26 $25.41

2

341,514

3

359,373

$25.31

0

3

265,506

$25.50

0

0

3

265,506

$24.92

0

0

2

247,647

$25.20

2

247,647

$24.40 $22.20

0 17,977

2015 2q

475

13,614,013

1,309,589

9.6%

86,330

1

2

127,090

2015 1q

474

13,465,013

1,246,919

9.3%

10,145

0

0

3

276,090

$21.68

2014 4q

475

13,558,033

1,350,084

10.0%

68,381

0

0

3

276,090

$22.95

0

3

276,090

$22.45

3

276,090

$21.71

3

275,252

$20.22

2014 3q

475

13,558,033

1,418,465

10.5%

31,019

0

2014 2q

475

13,558,033

1,449,484

10.7%

123,703

1

2014 1q

474

1,546,935

11.4%

194,633

0

13,531,781

26,252 0

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

25

Denver – Year-End 2017

Denver Office Market D o w n t o w n

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.700

Historical Analysis, All Classes Absorption SF

Vacancy

16.0%

0.600

14.0%

0.500 12.0%

0.300

10.0%

0.200

8.0%

0.100 0.000

6.0%

(0.100)

4.0%

Percent Vacant

Millions SF

0.400

(0.200) 2.0%

(0.300) (0.400)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

6.00

$33.40

Sublet SF

$33.20 5.00 Dollars/SF/Year

$33.00

Millions SF

4.00 3.00 2.00

$32.80 $32.60 $32.40 $32.20 $32.00

1.00

$31.80 $31.60

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 372 37,772,717

Vacancy Vacant SF Vacancy % 5,538,895 14.7%

Net Absorption (259,360)

Delivered Inventory # Bldgs Total RBA 2 121,400

2017 3q

370

37,651,317

5,158,135

13.7%

274,476

0

2017 2q

370

37,651,317

5,432,611

14.4%

29,755

1

53,478

2017 1q

369

37,597,839

347,653

2016 4q

367

37,250,186

2016 3q

366

2016 2q

366

2016 1q

365

2015 4q

365

2015 3q

362

2015 2q 2015 1q

5,408,888

0

UC Inventory # Bldgs Total RBA 16 2,845,292

Quoted Rates $33.26

17

2,866,389

$32.77

11

1,992,653

$32.52

14.4%

(213,724)

2

4,847,511

13.0%

(26,094)

1

36,939,171

4,510,402

12.2%

(166,018)

0

36,939,171

4,344,384

11.8%

(257,325)

1

36,873,171

4,021,059

10.9%

(34,414)

0

36,873,171

3,986,645

10.8%

452,577

2

198,000

36,627,048

4,193,099

11.4%

149,890

4

614,599

9

358

36,012,449

3,728,390

10.4%

98,271

2

95,128

12

2,196,217

$32.73

355

35,907,844

3,722,056

10.4%

47,394

1

10,651

11

1,276,342

$32.62

11

1,238,870

$31.92

10

927,855

$31.09

7

975,161

$30.32

7

1,006,329

$29.74

2014 4q

354

35,897,193

3,758,799

10.5%

132,364

0

2014 3q

354

35,897,193

3,891,163

10.8%

430,990

2

2014 2q

352

35,692,601

2014 1q

351

35,580,049

4,117,561 4,088,085

11.5%

83,076

1

11.5%

123,445

0

311,015 0 66,000 0

0 204,592 112,552 0

11

2,014,131

$32.18

11

2,338,144

$32.24

9

2,260,678

$32.25

7

1,692,459

$32.96

6

1,448,146

$33.06

6

1,448,146

$32.79

1,694,269

$32.54

Source: CoStar Property®

26

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market E l b e r t

C o u n t y

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.008

Historical Analysis, All Classes Absorption SF

Vacancy

35.0%

0.006 30.0%

0.004

25.0% 20.0%

(0.002) (0.004)

15.0%

(0.006)

Percent Vacant

Millions SF

0.002 0.000

10.0%

(0.008) (0.010)

5.0%

(0.012) (0.014)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.02

$18.00

Sublet SF

$16.00

0.02

$14.00 Dollars/SF/Year

0.02

Millions SF

0.01 0.01 0.01 0.01

$12.00 $10.00 $8.00 $6.00

0.01 $4.00

0.00

$2.00

0.00

$0.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 21 57,027

Vacancy Vacant SF Vacancy % 12,564 22.0%

Net Absorption 0

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $4.60

2017 3q

21

57,027

12,564

22.0%

5,234

0

0

0

0

$4.60

2017 2q

21

57,027

17,798

31.2%

(11,964)

0

0

0

0

$5.81

2017 1q

21

57,027

5,834

10.2%

500

0

0

0

0

$5.81

2016 4q

21

57,027

6,334

11.1%

0

0

0

0

0

$5.81

2016 3q

21

57,027

6,334

11.1%

0

0

0

0

0

$5.81

2016 2q

21

57,027

6,334

11.1%

0

0

0

0

$15.64

2016 1q

21

57,027

600

1.1%

0

0

0

0

0

$14.74

2015 4q

21

57,027

600

1.1%

600

0

0

0

0

$14.74

2015 3q

21

57,027

1,200

2.1%

0

0

0

0

0

$14.74 $14.74

(5,734)

2015 2q

21

57,027

1,200

2.1%

0

0

0

0

0

2015 1q

21

57,027

1,200

2.1%

0

0

0

0

0

$14.74

2014 4q

21

57,027

1,200

2.1%

0

0

0

0

0

$13.83

2014 3q

21

57,027

1,200

2.1%

0

0

0

0

0

$13.83

2014 2q

21

57,027

1,200

2.1%

0

0

0

0

0

$12.48

2014 1q

21

57,027

1,200

2.1%

0

0

0

0

$14.18

2,700

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

27

Denver – Year-End 2017

Denver Office Market F o r t

C o l l i n s / L o v e l a n d Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.300

M a r k e t

Historical Analysis, All Classes Absorption SF

Vacancy

9.0% 8.0%

0.200

0.100

6.0% 5.0%

0.000 4.0% (0.100)

3.0%

Percent Vacant

Millions SF

7.0%

2.0% (0.200) 1.0% (0.300)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

$23.00

Sublet SF

0.70

$22.50

0.60

$22.00

Dollars/SF/Year

Millions SF

0.80

0.50 0.40 0.30

$21.50 $21.00 $20.50

0.20 $20.00

0.10

$19.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 902 10,794,577

Vacancy Vacant SF Vacancy % 667,250 6.2%

Net Absorption (40,556)

Delivered Inventory # Bldgs Total RBA 1 7,500

UC Inventory # Bldgs Total RBA 1 3,200

Quoted Rates $22.17

2017 3q

901

10,787,077

619,194

5.7%

(2,494)

0

1

7,500

$22.47

2017 2q

900

10,777,121

606,744

5.6%

175,416

5

192,711

2

17,456

$22.42

2017 1q

895

10,584,410

589,449

5.6%

239,471

2

105,100

7

210,167

$22.31

2016 4q

893

10,479,310

723,820

6.9%

68,970

3

27,300

9

315,267

$21.76

0

2016 3q

889

10,439,634

753,114

7.2%

5,136

3

55,774

9

317,197

$20.88

2016 2q

886

10,383,860

702,476

6.8%

98,164

2

116,000

10

212,035

$20.60 $20.70

2016 1q

884

10,267,860

684,640

6.7%

(31,971)

0

0

10

317,635

2015 4q

885

10,268,914

653,723

6.4%

21,510

0

0

8

300,150

$19.23

2015 3q

885

10,268,914

675,233

6.6%

47,786

0

0

4

247,000

$19.75

2015 2q

885

10,268,914

723,019

7.0%

110,814

2

1

60,000

$18.92

2015 1q

883

10,233,873

798,792

7.8%

(219,420)

0

3

95,041

$19.56 $19.96

2014 4q

883

10,233,873

579,372

5.7%

42,550

1

2014 3q

880

10,173,278

561,327

5.5%

13,383

0

2014 2q

879

10,166,446

567,878

5.6%

82,611

1

2014 1q

879

10,120,998

605,041

6.0%

97,261

1

35,041 0 30,600

3

95,041

5

95,636

$20.16

51,448

5

97,427

$19.85

16,779

6

148,875

$19.54

0

Source: CoStar Property®

28

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market G i l p i n

C o u n t y

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.006

Historical Analysis, All Classes Absorption SF

Vacancy

40.0% 35.0%

0.004

25.0%

0.000

20.0% 15.0%

(0.002)

Percent Vacant

Millions SF

30.0% 0.002

10.0% (0.004)

5.0%

(0.006)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.01

$30.00

Sublet SF

$25.00 Dollars/SF/Year

0.01

Millions SF

0.00 0.00 0.00

$15.00 $10.00 $5.00

0.00

$0.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

$20.00

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 4 15,116

Vacancy Vacant SF Vacancy % 5,088 33.7%

Net Absorption (5,088)

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $0.00

2017 3q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2017 2q

4

15,116

0

0.0%

0

0

0

0

0

$24.45

2017 1q

4

15,116

0

0.0%

0

0

0

0

$24.45

2016 4q

4

15,116

0

0.0%

5,088

0

0

0

0

$24.45

2016 3q

4

15,116

33.7%

(5,088)

0

0

0

0

$24.45

2016 2q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2016 1q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2015 4q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2015 3q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2015 2q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2015 1q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2014 4q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2014 3q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2014 2q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

2014 1q

4

15,116

0

0.0%

0

0

0

0

0

$0.00

5,088

0

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

29

Denver – Year-End 2017

Denver Office Market L o n g m o n t

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.060

Historical Analysis, All Classes Absorption SF

Vacancy

12.0%

0.050 10.0%

0.030

8.0%

0.020 6.0% 0.010 0.000

4.0%

Percent Vacant

Millions SF

0.040

(0.010) 2.0% (0.020) (0.030)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.16

$22.00

Sublet SF

$21.80 0.14

$21.60 Dollars/SF/Year

Millions SF

0.12 0.10 0.08 0.06 0.04

$21.40 $21.20 $21.00 $20.80 $20.60 $20.40

0.02

$20.20

0.00

$20.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 186 1,962,227

Vacancy Vacant SF Vacancy % 63,059 3.2%

Net Absorption (1,857)

2017 3q

186

1,962,227

61,202

3.1%

2017 2q

186

1,962,227

96,970

4.9%

35,768 18,511

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $21.45

0

0

0

0

$21.44

0

0

0

0

$21.60 $20.80

2017 1q

186

1,962,227

115,481

5.9%

(20,885)

0

0

0

0

2016 4q

186

1,962,227

94,596

4.8%

24,740

0

0

0

0

$21.81

2016 3q

186

1,962,227

119,336

6.1%

23,257

0

0

0

0

$20.74

2016 2q

186

1,962,227

142,593

7.3%

40,169

1

2016 1q

185

1,922,627

143,162

7.4%

838

0

39,600 0

0

0

$20.66

1

39,600

$20.64

39,600

$18.98

2015 4q

185

1,922,627

144,000

7.5%

47,926

0

0

1

2015 3q

185

1,922,627

191,926

10.0%

(25,768)

0

0

0

0

$18.85

2015 2q

185

1,922,627

166,158

8.6%

1,095

0

0

0

0

$18.44 $18.09

2015 1q

185

1,922,627

167,253

8.7%

7,835

0

0

0

0

2014 4q

185

1,922,627

175,088

9.1%

(1,697)

0

0

0

0

$17.75

2014 3q

185

1,922,627

173,391

9.0%

9,383

0

0

0

0

$17.63

2014 2q

185

1,922,627

182,774

9.5%

(1,109)

0

0

0

0

$17.24

2014 1q

185

1,922,627

181,665

9.4%

0

0

$17.24

24,329

1

3,084

Source: CoStar Property®

30

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market M i d t o w n

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.350

Historical Analysis, All Classes Absorption SF

Vacancy

6.0%

0.300 5.0%

0.200

4.0%

0.150 3.0% 0.100 0.050

2.0%

Percent Vacant

Millions SF

0.250

0.000 1.0% (0.050) (0.100)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.50

$26.00

Sublet SF

$25.50

0.45

$25.00 Dollars/SF/Year

0.40

Millions SF

0.35 0.30 0.25 0.20

$24.50 $24.00 $23.50 $23.00

0.15

$22.50

0.10

$22.00

0.05

$21.50

0.00

$21.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 677 9,193,937

Vacancy Vacant SF Vacancy % 372,714 4.1%

Net Absorption 38,410

Delivered Inventory # Bldgs Total RBA 0 0

2017 3q

678

9,254,955

472,142

5.1%

(79,160)

0

2017 2q

678

9,254,955

392,982

4.2%

262,064

1

2017 1q

677

8,954,955

355,046

4.0%

(78,593)

0

2016 4q

678

8,961,594

283,092

3.2%

17,455

1

0 300,000 0 28,600

UC Inventory # Bldgs Total RBA 1 65,805 1 0

65,805 0

Quoted Rates $25.72 $25.66 $25.44

1

300,000

$25.22

1

300,000

$24.95

2016 3q

677

8,932,994

271,947

3.0%

(39,984)

0

0

2

328,600

$23.53

2016 2q

677

8,932,994

231,963

2.6%

(2,510)

0

0

2

328,600

$22.90

2016 1q

678

8,935,264

231,723

2.6%

(23,201)

0

0

2

328,600

$22.85

2015 4q

679

8,942,744

216,002

2.4%

35,003

1

1

28,600

$23.03

2015 3q

678

8,890,744

199,005

2.2%

26,912

0

0

1

52,000

$21.96

2015 2q

678

8,890,744

225,917

2.5%

10,768

0

0

1

52,000

$21.81

2015 1q

679

8,896,144

242,085

2.7%

(8,648)

0

0

1

52,000

$22.19

0

1

52,000

$21.57

1

52,000

$20.84

52,000

2014 4q

681

8,900,655

237,948

2.7%

11,873

0

2014 3q

681

8,900,655

249,821

2.8%

114,292

1

63,000

2014 2q

680

8,837,655

301,113

3.4%

130,319

2

60,438

2

115,000

$20.84

2014 1q

679

8,780,415

374,192

4.3%

24,094

1

4,050

4

175,438

$20.45

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

31

Denver – Year-End 2017

Denver Office Market N o r t h

D e n v e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.120

Historical Analysis, All Classes Absorption SF

Vacancy

14.0%

0.100

12.0% 10.0%

0.060 0.040

8.0%

0.020

6.0%

0.000

Percent Vacant

Millions SF

0.080

4.0%

(0.020) 2.0%

(0.040) (0.060)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.40

$22.50

Sublet SF

$22.00

0.35

$21.50 Dollars/SF/Year

Millions SF

0.30 0.25 0.20 0.15

$21.00 $20.50 $20.00

0.10

$19.50

0.05

$19.00 $18.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 166 4,395,899

Vacancy Vacant SF Vacancy % 338,191 7.7%

Net Absorption (15,258)

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 1 14,000

Quoted Rates $22.20

2017 3q

166

4,395,899

322,933

7.3%

12,276

0

0

0

0

2017 2q

166

4,395,899

335,209

7.6%

33,622

0

0

0

0

$21.10

2017 1q

166

4,395,899

368,831

8.4%

42,884

2

61,000

0

0

$20.61

15,243

2016 4q

164

4,334,899

350,715

8.1%

(22,026)

1

2016 3q

163

4,319,656

313,446

7.3%

30,620

0

0

$21.49

2

61,000

$21.31

3

76,243

$21.33

2016 2q

163

4,319,656

344,066

8.0%

23,777

1

41,400

3

76,243

$20.26

2016 1q

162

4,278,256

326,443

7.6%

48,338

1

54,425

4

117,643

$20.02

2015 4q

161

4,223,831

320,356

7.6%

33,169

0

2015 3q

161

4,223,831

353,525

8.4%

21,555

1

2015 2q

160

4,210,067

361,316

8.6%

37,754

0

2015 1q

160

4,210,067

399,070

9.5%

(33,803)

2014 4q

160

4,210,067

365,267

8.7%

105,960

2014 3q

161

4,214,017

475,177

11.3%

6,493

5

172,068

$19.90

3

150,825

$19.99

0

1

13,764

$19.33

0

0

1

13,764

$18.34

0

0

1

13,764

0

0

0

2014 2q

161

4,214,017

481,670

11.4%

(14,204)

1

2014 1q

160

4,207,677

461,126

11.0%

11,611

0

0 13,764

6,340 0

0 1

$18.21

0

$18.40

0

$17.94

6,340

$17.85

Source: CoStar Property®

32

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market N o r t h e a s t

D e n v e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.200

Historical Analysis, All Classes Absorption SF

Vacancy

12.0%

0.150

10.0%

Millions SF

8.0%

0.050 6.0% 0.000 4.0%

(0.050)

Percent Vacant

0.100

2.0%

(0.100) (0.150)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.45

$23.00

Sublet SF

0.40

$22.00 Dollars/SF/Year

0.35

Millions SF

0.30 0.25 0.20 0.15 0.10

$21.00 $20.00 $19.00 $18.00

0.05 $17.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 247 4,924,912

Vacancy Vacant SF Vacancy % 407,668 8.3%

Net Absorption (95,003)

Delivered Inventory # Bldgs Total RBA 1 5,000

2017 3q

246

4,919,912

307,665

6.3%

26,757

0

2017 2q

246

4,919,912

334,422

6.8%

(103,356)

1

2017 1q

245

4,906,210

217,364

4.4%

22,372

0

0 13,702 0 9,562

UC Inventory # Bldgs Total RBA 1 43,586

Quoted Rates $22.56

2

48,586

1

43,586

$22.36 $21.70

2

57,288

$20.82

2016 4q

245

4,906,210

239,736

4.9%

56,181

1

2

57,288

$19.44

2016 3q

244

4,896,648

286,355

5.8%

7,019

0

0

2

23,264

$19.50

2016 2q

244

4,896,648

293,374

6.0%

55,412

0

0

2

23,264

$19.49

2016 1q

244

4,896,648

348,786

7.1%

44,354

0

0

1

13,702

2015 4q

244

4,896,648

393,140

8.0%

30,890

1

10,416

0

0

$19.23 $18.47

2015 3q

243

4,886,232

413,614

8.5%

(13,535)

0

0

1

10,416

$18.14

2015 2q

243

4,886,232

400,079

8.2%

152,051

0

0

1

10,416

$18.04

2015 1q

243

4,886,232

552,130

11.3%

(71,128)

0

2014 4q

243

4,886,232

481,002

9.8%

6,674

1

2014 3q

241

4,863,272

464,716

9.6%

38,325

0

0 11,800

0

0

0

0

$18.06 $17.32

0

2

22,960

$17.20

2014 2q

241

4,863,272

503,041

10.3%

(22,759)

0

0

2

22,960

$17.87

2014 1q

241

4,863,272

480,282

9.9%

5,682

0

0

2

22,960

$17.79

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

33

Denver – Year-End 2017

Denver Office Market N o r t h w e s t

D e n v e r

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.150

M a r k e t

Historical Analysis, All Classes Absorption SF

Vacancy

14.0% 12.0% 10.0%

0.050

8.0% 0.000 6.0% (0.050)

Percent Vacant

Millions SF

0.100

4.0%

(0.100)

2.0%

(0.150)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.80

$23.50

Sublet SF

$23.00 0.70

$22.50 Dollars/SF/Year

Millions SF

0.60 0.50 0.40 0.30 0.20

$21.50 $21.00 $20.50 $20.00 $19.50

0.10

$19.00 $18.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

$22.00

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 464 6,789,487

Vacancy Vacant SF Vacancy % 637,964 9.4%

Net Absorption 51,920

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 5 257,462

Quoted Rates $23.18

2017 3q

464

6,789,487

689,884

10.2%

53,786

0

0

2

118,750

$22.80

2017 2q

464

6,789,487

743,670

11.0%

(23,320)

0

0

1

18,750

$22.64

2017 1q

464

6,789,487

720,350

10.6%

(104,754)

1

2016 4q

465

6,772,486

598,595

8.8%

(48,587)

0

2016 3q

466

6,793,154

570,676

8.4%

(47,150)

0

2016 2q

466

6,793,154

523,526

7.7%

136,071

1

2016 1q

465

6,779,862

646,305

9.5%

2,778

0

2015 4q

466

6,782,261

651,482

9.6%

52,427

2

2015 3q

465

6,742,053

663,701

9.8%

76,314

0

19,000 0 0 13,292

0

0

$21.47

1

19,000

$21.39

1

19,000

$20.64

0

0

$20.34

1

13,292

1

13,292

$20.13

0

3

54,472

$19.99

0 41,180

$20.61

2015 2q

465

6,742,053

740,015

11.0%

(41,908)

0

0

2

41,180

$19.71

2015 1q

465

6,742,053

698,107

10.4%

(3,260)

0

0

2

41,180

$19.34

2014 4q

466

6,787,941

740,735

10.9%

86,386

1

1

4,100

$19.51

2014 3q

465

6,765,047

804,227

11.9%

12,472

0

0

2

26,994

$19.89

0

0

2

26,994

$19.47

0

0

2

26,994

$18.82

2014 2q

465

6,765,047

816,699

12.1%

2014 1q

466

6,775,089

834,274

12.3%

7,533 (35,939)

22,894

Source: CoStar Property®

34

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market P a r k

C o u n t y

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.012

Historical Analysis, All Classes Absorption SF

Vacancy

30.0%

0.010 25.0%

0.008

20.0%

0.004 0.002

15.0%

0.000 (0.002)

10.0%

Percent Vacant

Millions SF

0.006

(0.004) (0.006)

5.0%

(0.008) (0.010)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.01

$12.00

Sublet SF

$10.00 Dollars/SF/Year

0.01

Millions SF

0.01 0.01 0.00

$6.00 $4.00 $2.00

0.00

$0.00

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

$8.00

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 14 48,496

Vacancy Vacant SF Vacancy % 342 0.7%

Net Absorption (42)

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $8.00

2017 3q

14

48,496

300

0.6%

2,880

0

0

0

0

$8.72

2017 2q

14

48,496

3,180

6.6%

(3,180)

0

0

0

0

$8.72

2017 1q

14

48,496

0.0%

9,220

2016 4q

14

48,496

9,220

19.0%

2016 3q

14

48,496

9,220

19.0%

2016 2q

14

48,496

9,220

19.0%

2016 1q

14

48,496

9,995

20.6%

2015 4q

14

48,496

9,995

20.6%

2015 3q

14

48,496

10,995

22.7%

2015 2q

14

48,496

10,995

22.7%

0

0

0

0

0

$9.81

0

0

0

0

0

$9.59

0

0

0

0

0

$9.59

0

0

0

0

$9.61

0

0

0

0

$10.29 $10.29

775 0 1,000

0

0

0

0

0

0

0

0

$10.25

2,688

0

0

0

0

$10.26

100

$10.26

0

2015 1q

14

48,496

13,683

28.2%

0

0

0

0

2014 4q

14

48,496

13,783

28.4%

0

0

0

0

0

$11.23

2014 3q

14

48,496

13,783

28.4%

0

0

0

0

0

$12.52

2014 2q

14

48,496

13,783

28.4%

(7,995)

0

0

0

0

$11.90

2014 1q

14

48,496

5,788

11.9%

1,100

0

0

0

0

$13.60

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

35

Denver – Year-End 2017

Denver Office Market P a r k e r / C a s t l e

R o c k

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.070

M a r k e t

Historical Analysis, All Classes Absorption SF

Vacancy

12.0%

0.060 10.0%

0.040

8.0%

0.030 6.0% 0.020 0.010

4.0%

Percent Vacant

Millions SF

0.050

0.000 2.0% (0.010) (0.020)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.25

$26.50

Sublet SF

$26.00 $25.50 Dollars/SF/Year

Millions SF

0.20

0.15

0.10

$25.00 $24.50 $24.00 $23.50 $23.00 $22.50

0.05

$22.00 $21.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 178 2,166,840

Vacancy Vacant SF Vacancy % 142,944 6.6%

Net Absorption 11,343

Delivered Inventory # Bldgs Total RBA 0 0

2017 3q

178

2,166,840

154,287

7.1%

23,522

1

2017 2q

177

2,145,489

156,458

7.3%

8,989

0

21,351 0 60,000

UC Inventory # Bldgs Total RBA 2 69,230

Quoted Rates $26.10

2

69,230

$25.53

3

90,581

$25.85

2

42,336

$23.18

2

81,351

$23.79

2017 1q

177

2,145,489

165,447

7.7%

64,924

1

2016 4q

176

2,085,489

170,371

8.2%

32,136

0

2016 3q

176

2,085,489

202,507

9.7%

21,846

2

63,368

2

81,351

$23.72

2016 2q

173

2,002,814

141,678

7.1%

41,721

1

8,493

3

82,675

$24.43 $24.42

0

2016 1q

172

1,994,321

174,906

8.8%

(3,041)

0

0

4

91,168

2015 4q

172

1,994,321

171,865

8.6%

(11,841)

0

0

3

77,800

$25.42

2015 3q

172

1,994,321

160,024

8.0%

(1,181)

0

0

2

58,493

$24.26

2015 2q

172

1,994,321

158,843

8.0%

11,486

1

5,289

2

58,493

$23.90

2015 1q

171

1,989,032

165,040

8.3%

2,254

1

4,882

2

55,289

$23.38

2014 4q

170

1,984,150

162,412

8.2%

28,184

1

13,624

2

2014 3q

169

1,970,526

176,972

9.0%

41,530

0

0

3

23,795

$22.97

2014 2q

169

1,970,526

218,502

11.1%

(7,625)

0

0

3

23,795

$22.50

2014 1q

169

1,970,526

210,877

10.7%

27,471

1

1

13,624

$22.55

25,903

10,171

$23.43

Source: CoStar Property®

36

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market S o u t h e a s t

D e n v e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.700

Historical Analysis, All Classes Absorption SF

Vacancy

13.5%

0.600 13.0%

0.500

12.5%

0.300 0.200

12.0%

0.100 0.000

11.5%

Percent Vacant

Millions SF

0.400

(0.100) (0.200)

11.0%

(0.300) (0.400)

10.5% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

7.00

$24.80

Sublet SF

$24.60 6.00

$24.40 Dollars/SF/Year

Millions SF

5.00 4.00 3.00 2.00

$24.20 $24.00 $23.80 $23.60 $23.40 $23.20

1.00

$23.00 $22.80

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 857 47,472,749

Vacancy Vacant SF Vacancy % 5,925,254 12.5%

Net Absorption 305,354

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 5 900,929

Quoted Rates $24.40

2017 3q

857

47,472,749

6,230,608

13.1%

(22,405)

1

211,675

5

900,929

$24.56

2017 2q

856

47,261,074

5,996,528

12.7%

402,245

5

610,740

6

1,112,604

$24.49

2017 1q

851

46,650,334

5,788,033

12.4%

(178,538)

2

304,702

2016 4q

849

46,345,632

5,304,793

11.4%

190,796

0

0

11

1,723,344

$24.51

12

1,956,046

$23.94

2016 3q

850

46,458,116

5,608,073

12.1%

(261,024)

1

5,625

7

1,403,767

$23.43

2016 2q

849

46,452,491

5,341,424

11.5%

42,851

1

20,282

7

1,103,392

$23.53

2016 1q

848

46,432,209

5,363,993

11.6%

526,068

0

5

1,076,659

$23.73

2015 4q

848

46,432,209

5,890,061

12.7%

109,954

3

4

776,957

$23.12

2015 3q

849

45,886,625

5,454,431

11.9%

(233,390)

0

5

625,149

$23.01

2015 2q

849

45,886,625

11.4%

519,318

1

2015 1q

848

45,841,625

5,695,359

12.4%

80,392

0

2014 4q

848

45,841,625

5,775,751

12.6%

(198,100)

1

2014 3q

847

45,805,625

5,541,651

12.1%

173,396

3

2014 2q

844

45,425,625

5,335,047

11.7%

(24,668)

0

2014 1q

844

45,425,625

5,310,379

11.7%

(77,153)

0

5,221,041

0 582,792 0 45,000

5

625,149

$22.64

5

649,867

$22.27

36,000

4

627,792

$21.89

380,000

4

618,792

$21.67

0

4

416,000

$21.48

0

4

416,000

$21.31

0

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

37

Denver – Year-End 2017

Denver Office Market S o u t h w e s t

D e n v e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.150

Historical Analysis, All Classes Absorption SF

Vacancy

16.0% 14.0%

0.100

10.0%

0.000

8.0% 6.0%

(0.050)

Percent Vacant

Millions SF

12.0% 0.050

4.0% (0.100)

2.0%

(0.150)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

1.20

$19.50

Sublet SF

$19.00 Dollars/SF/Year

1.00

Millions SF

0.80 0.60 0.40

$18.00 $17.50 $17.00

0.20

$16.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

$18.50

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 551 9,708,288

Vacancy Vacant SF Vacancy % 862,224 8.9%

Net Absorption 66,166

Delivered Inventory # Bldgs Total RBA 3 20,476

UC Inventory # Bldgs Total RBA 0 0

Quoted Rates $19.11

2017 3q

548

9,687,812

907,914

9.4%

(13,664)

1

3

20,476

2017 2q

547

9,685,862

892,300

9.2%

(7,017)

0

0

4

22,426

$18.16

2017 1q

547

9,685,862

885,283

9.1%

87,693

0

0

1

1,950

$17.97

2016 4q

547

9,685,862

972,976

10.0%

(36,416)

1

2016 3q

546

9,660,862

911,560

9.4%

51,155

0

2016 2q

546

9,660,862

962,715

10.0%

131,832

1

2016 1q

545

9,623,782

1,057,467

11.0%

63,329

0

2015 4q

546

9,627,282

1,124,296

11.7%

68,443

1

1,950

25,000 0 37,080 0 26,160

$18.55

1

1,950

$17.96

1

25,000

$17.90 $17.44

1

25,000

2

62,080

$17.50

2

62,080

$17.50

2015 3q

548

9,655,816

1,221,273

12.6%

52,588

0

0

1

26,160

$17.18

2015 2q

548

9,655,816

1,273,861

13.2%

(126,300)

0

0

1

26,160

$16.65

2015 1q

548

9,655,816

1,147,561

11.9%

27,347

0

0

0

0

2014 4q

548

9,655,816

1,174,908

12.2%

66,778

0

0

0

0

$16.57 $16.13

2014 3q

548

9,655,816

1,241,686

12.9%

(18,589)

0

0

0

0

$16.48

2014 2q

549

9,748,275

1,315,556

13.5%

(34,928)

0

0

0

0

$16.46

2014 1q

549

9,748,275

1,280,628

13.1%

20,479

0

0

0

0

$16.39

Source: CoStar Property®

38

CoStar Office Statistics

©2018 CoStar Group, Inc.

Year-End 2017 – Denver

Denver Office Market W e l d

C o u n t y

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

0.140

Historical Analysis, All Classes Absorption SF

Vacancy

7.0%

0.120

6.0% 5.0%

0.080 4.0% 0.060 3.0% 0.040

Percent Vacant

Millions SF

0.100

2.0%

0.020

1.0%

0.000 (0.020)

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

0.30

$18.50

Sublet SF

$18.00 Dollars/SF/Year

0.25

Millions SF

0.20 0.15 0.10

$17.00 $16.50 $16.00

0.05

$15.50

0.00 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

$17.50

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 565 5,514,506

Vacancy Vacant SF Vacancy % 188,635 3.4%

Net Absorption 20,455

Delivered Inventory # Bldgs Total RBA 0 0

UC Inventory # Bldgs Total RBA 2 122,350

Quoted Rates $18.09

2017 3q

565

5,514,506

209,090

3.8%

8,596

0

0

2

2017 2q

565

5,514,506

217,686

3.9%

11,869

0

0

0

2017 1q

564

5,506,074

221,123

4.0%

(194)

2

15,347

1

8,432

$17.92

2016 4q

562

5,490,727

205,582

3.7%

(2,359)

1

6,900

3

23,779

$16.83

2016 3q

561

5,483,827

196,323

3.6%

18,872

2

21,890

4

30,679

$17.23

2016 2q

559

5,461,937

193,305

3.5%

62,064

0

4

31,305

$17.00 $16.52

2016 1q

559

5,461,937

255,369

4.7%

1,076

0

2015 4q

559

5,461,937

256,445

4.7%

30,859

1

2015 3q

558

5,452,161

277,528

5.1%

(1,281)

0 0 9,776

0

0

122,350 0

$17.83

2

21,890

2

21,890

$17.47

1

9,776

$17.00 $16.69

2015 2q

558

5,452,161

276,247

5.1%

(9,390)

0

0

1

9,776

2015 1q

558

5,452,161

266,857

4.9%

35,006

0

0

1

9,776

2014 4q

558

5,452,161

301,863

5.5%

108,543

1

118,000

$18.02

0

0

$16.32 $16.08

2014 3q

557

5,334,161

292,406

5.5%

51,545

1

7,660

1

118,000

$16.28

2014 2q

554

5,304,231

314,021

5.9%

18,498

1

6,500

4

147,930

$15.92

2014 1q

553

5,297,731

326,019

6.2%

26,063

0

0

5

154,430

$16.14

Source: CoStar Property®

©2018 CoStar Group, Inc.

CoStar Office Statistics

39

Denver – Year-End 2017

Denver Office Market W e s t

D e n v e r

M a r k e t

Market Highlights – Class “A, B & C”

Deliveries, Absorption & Vacancy Delivered SF

Absorption SF

Vacancy

14.0%

0.200

12.0%

0.150

10.0%

0.100

8.0%

0.050

6.0%

0.000

4.0%

(0.050)

2.0%

(0.100)

Percent Vacant

Millions SF

0.250

Historical Analysis, All Classes

0.0% 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 2016 2q 2016 3q 2016 4q 2017 1q 2017 2q 2017 3q 2017 4q

Source: CoStar Property®

Vacant Space

Quoted Rental Rates

Historical Analysis, All Classes

Historical Analysis, All Classes

Direct SF

1.75

$22.00

Sublet SF

$21.50

1.70 Dollars/SF/Year

Millions SF

1.65 1.60 1.55

$21.00 $20.50 $20.00

1.50 $19.50

1.45

$19.00

1.40 2016 1q

2016 3q

2017 1q

2016 1q

2017 3q

Source: CoStar Property®

Period 2017 4q

2016 3q

2017 1q

2017 3q

Source: CoStar Property®

Existing Inventory # Bldgs Total RBA 743 15,225,893

Vacancy Vacant SF Vacancy % 1,617,896 10.6%

Net Absorption 12,126

Delivered Inventory # Bldgs Total RBA 1 65,000

UC Inventory # Bldgs Total RBA 2 201,000

Quoted Rates $21.87

2017 3q

742

15,160,893

1,565,022

10.3%

35,523

0

0

3

266,000

2017 2q

742

15,160,893

1,600,545

10.6%

73,802

0

0

2

240,000

$21.63

2017 1q

742

15,160,893

1,674,347

11.0%

(39,677)

0

0

2

240,000

$21.58

2016 4q

742

15,160,893

1,634,670

10.8%

(73,436)

0

0

0

0

$20.77

2016 3q

742

15,160,893

1,561,234

10.3%

82,714

1

5,000

0

0

$20.65 $20.53

$21.68

2016 2q

741

15,155,893

1,638,948

10.8%

221,135

2

155,258

1

5,000

2016 1q

739

15,000,635

1,704,825

11.4%

95,319

2

56,000

3

160,258

$20.24

2015 4q

737

14,944,635

1,744,144

11.7%

136,708

1

10,000

5

216,258

$20.09

2015 3q

736

14,934,635

1,870,852

12.5%

22,901

0

4

197,258

$20.00

2015 2q

735

14,925,940

1,885,058

12.6%

135,896

1

5

205,953

$19.63

2015 1q

733

14,799,725

1,894,739

12.8%

48,175

0

0

6

303,910

$19.77

2014 4q

733

14,799,725

1,942,914

13.1%

(68,419)

0

0

3

134,910

$19.81

2014 3q

734

14,802,600

1,877,370

12.7%

51,955

0

0

2

126,215

$19.59

2014 2q

734

14,802,600

1,929,325

13.0%

38,435

0

1

120,000

$19.33

2014 1q

734

14,802,600

1,967,760

13.3%

68,595

1

0 120,000

0 43,000

0

0

$19.13

Source: CoStar Property®

40

CoStar Office Statistics

©2018 CoStar Group, Inc.

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