The CoStar Office Report. Y e a r - E n d Fairfield County Office Market

Transcription

1 The CoStar Office Report Y e a r - E n d

2 Year-End 2014 Fairfield County Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets Inventory & Development Analysis Inventory & Development Analysis Select Top Under Construction Properties Select Top Deliveries Figures at a Glance Figures at a Glance by Class & Market Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Analysis of Individual CoStar Submarket Clusters Bethel Market Bridgeport Market Brookfield Market Danbury Market Darien Market East I-287 Corridor Market Fairfield Market Greenwich Market Monroe Market New Canaan Market Newtown Market Norwalk Market Ridgefield Market Shelton Market Stamford Market Stratford Market Trumbull Market Westport Market Wilton Market 2015 CoStar Group, Inc. The CoStar Office Report A

3 Fairfield County Year-End 2014 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 national database includes approximately 80.7 billion square feet of coverage in 3.5 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 COSTAR, or visit our web site at Copyright 2015 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 L ST NW Washington, DC (800) NASDAQ: CSGP B The CoStar Office Report 2015 CoStar Group, Inc.

4 Year-End 2014 Fairfield County 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 certificate 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. : 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 2015 CoStar Group, Inc. The CoStar Office Report C

5 Fairfield County Year-End 2014 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. Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. 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. 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) 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. 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. : 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. D The CoStar Office Report 2015 CoStar Group, Inc.

6 Overview Year-End 2014 Fairfield County Fairfield County s Decreases to 14.2% Net Absorption Positive 66,119 SF in the Quarter The Fairfield County Office market ended the fourth quarter 2014 with a vacancy rate of 14.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 66,119 square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 204,413 square feet. Rental rates ended the fourth quarter at $32.91, a decrease over the previous quarter. One building delivered to the market in the quarter totaling 5,712 square feet, with 62,000 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Fairfield County office market was positive 66,119 square feet in the fourth quarter That compares to positive 170,440 square feet in the third quarter 2014, positive 65,491 square feet in the second quarter 2014, and positive 20,592 square feet in the first quarter Tenants moving out of large blocks of space in 2014 include: Deloitte moving out of (126,017) square feet at Stamford Harbor Park; UBS moving out of (78,015) square feet at One Stamford Forum; and Save the Children Foundation moving out of (62,000) square feet at 54 Wilton Rd. Tenants moving into large blocks of space in 2014 include: Deloitte moving into 137,375 square feet at BLT Financial Centre; Starwood Hotels & Resorts Worldwide, Inc. moving into 126,017 square feet at Stamford Harbor Park; and Datto moving into 100,398 square feet at Merritt 7 Corporate Park - Building 101. The Class-A office market recorded net absorption of positive 139,750 square feet in the fourth quarter 2014, compared to positive 152,295 square feet in the third quarter 2014, positive 148,611 in the second quarter 2014, and negative (58,464) in the first quarter The Class-B office market recorded net absorption of negative (91,548) square feet in the fourth quarter 2014, compared to negative (19,359) square feet in the third quarter 2014, negative (87,061) in the second quarter 2014, and positive 72,490 in the first quarter The Class-C office market recorded net absorption of positive 17,917 square feet in the fourth quarter 2014 compared to positive 37,504 square feet in the third quarter 2014, positive 3,941 in the second quarter 2014, and positive 6,566 in the first quarter The office vacancy rate in the Fairfield County market area decreased to 14.2% at the end of the fourth quarter The vacancy rate was 14.3% at the end of the third quarter 2014, 14.5% at the end of the second quarter 2014, and 14.8% at the end of the first quarter Class-A projects reported a vacancy rate of 15.3% at the end of the fourth quarter 2014, 15.8% at the end of the third quarter 2014, 16.3% at the end of the second quarter 2014, and 16.7% at the end of the first quarter Class-B projects reported a vacancy rate of 16.4% at the end of the fourth quarter 2014, 16.0% at the end of the third quarter 2014, 15.9% at the end of the second quarter 2014, and 16.1% at the end of the first quarter Class-C projects reported a vacancy rate of 7.4% at the end of the fourth quarter 2014, 7.5% at the end of third quarter Rates by Class A B C Total Market 20% 18% 16% 14% Rate 12% 10% 8% 6% 4% 2% 0% q1997 3q1998 3q1999 3q2000 3q2001 3q2002 3q2003 3q2004 3q2005 3q2006 3q2007 3q2008 3q2009 3q2010 3q q2012 3q2013 3q2014 3q 2015 CoStar Group, Inc. The CoStar Office Report 1

7 Fairfield County Year-End 2014 Overview 2014, 7.8% at the end of the second quarter 2014, and 7.9% at the end of the first quarter Largest Lease Signings The largest lease signings occurring in 2014 included: the 137,375-square-foot lease signed by Deloitte at BLT Financial Centre in the Stamford market; the 126,017-square-foot deal signed by Starwood Hotels & Resorts Worldwide, Inc. at Stamford Harbor Park in the Stamford market; and the 103,596-square-foot lease signed by United Healthcare at Reservoir Corporate Centre Phase I in the Shelton market. Sublease The amount of vacant sublease space in the Fairfield County market decreased to 204,413 square feet by the end of the fourth quarter 2014, from 255,711 square feet at the end of the third quarter There was 361,772 square feet vacant at the end of the second quarter 2014 and 429,585 square feet at the end of the first quarter Fairfield County s Class-A projects reported vacant sublease space of 164,511 square feet at the end of fourth quarter 2014, down from the 215,360 square feet reported at the end of the third quarter There were 284,978 square feet of sublease space vacant at the end of the second quarter 2014, and 344,377 square feet at the end of the first quarter Class-B projects reported vacant sublease space of 34,902 square feet at the end of the fourth quarter 2014, down from the 36,051 square feet reported at the end of the third quarter At the end of the second quarter 2014 there were 68,428 square feet, and at the end of the first quarter 2014 there were 82,108 square feet vacant. Class-C projects reported increased vacant sublease space from the third quarter 2014 to the fourth quarter Sublease vacancy went from 4,300 square feet to 5,000 square feet during that time. There were 8,366 square feet at the end U.S. Comparison Past 10 Quarters Rate 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% Fairfield County United States of the second quarter 2014, and 3,100 square feet at the end of the first quarter Rental Rates The average quoted asking rental rate for available office space, all classes, was $32.91 per square foot per year at the end of the fourth quarter 2014 in the Fairfield County market area. This represented a 2.3% decrease in quoted rental rates from the end of the third quarter 2014, when rents were reported at $33.69 per square foot. The average quoted rate within the Class-A sector was $38.90 at the end of the fourth quarter 2014, while Class-B rates stood at $27.66, and Class-C rates at $ At the end of the third quarter 2014, Class-A rates were $39.27 per square foot, Class-B rates were $28.02, and Class-C rates were $ Deliveries and Construction During the fourth quarter 2014, one building totaling 5,712 square feet was completed in the Fairfield County market area. There were 62,000 square feet of office space under construction at the end of the fourth quarter The only delivery in 2014 has been 13 Grove St, a 5,712- square-foot facility that delivered in fourth quarter 2014 and is now 0% occupied. The largest projects underway at the end of fourth quarter 2014 were Maplewood Medial Center - Building 2, a 28,000- square-foot building with 0% of its space pre-leased, and Maplewood Medial Center - Building 1, a 28,000-square-foot facility that is 43% pre-leased. Inventory Total office inventory in the Fairfield County market area amounted to 66,503,660 square feet in 2,684 buildings as of the end of the fourth quarter The Class-A office sector consisted of 31,620,981 square feet in 215 projects. There were 851 Class-B buildings totaling 22,374,531 square feet, and the Class-C sector consisted of 12,508,148 square feet in 1,618 buildings. Within the Office market there were 111 owner-occupied buildings accounting for 5,742,798 square feet of office space. Reports compiled by: Kena Mayberry, Research Manager and the Westchester, NY/Southern, CT team. 4.0% 2.0% 0.0% q q q q q 2 The CoStar Office Report 2015 CoStar Group, Inc.

8 Markets Year-End 2014 Fairfield County CoStar 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 Bethel Bridgeport Brookfield Danbury Darien East I-287 Corridor Fairfield Greenwich Monroe New Canaan Newtown Norwalk Ridgefield Shelton Stamford Stratford Trumbull Westport Wilton 2015 CoStar Group, Inc. The CoStar Office Report 3

9 Fairfield County Year-End 2014 Inventory & development Historical Deliveries Deliveries Average Delivered SF Millions of SF * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction Square Footage Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C Newtown 2 56,000 12, % 10,015 28,000 Ridgefield 1 6, % 16,337 6,000 Wilton % 20,849 0 Brookfield % 9,106 0 Danbury % 21,973 0 Darien % 12,202 0 East I-287 Corridor % 10,000 0 Fairfield % 13,583 0 Greenwich % 20,328 0 Monroe % 7,519 0 All Other % 30,323 0 Recent Deliveries Leased & Un-Leased SF in Deliveries Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 0.4 Leased Un-Leased 40 Preleased Un-Leased Millions of SF Thousands of SF T q 4 The CoStar Office Report 2015 CoStar Group, Inc.

10 Inventory & development Year-End 2014 Fairfield County Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.4 Construction Starts Deliveries Millions of SF q q q q Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF 1 5,712 2, % $ 0 5,712 50,000 SF - 99,999 SF % $ ,000 SF - 249,999 SF % $ ,000 SF - 499,999 SF % $ 0 0 >= 500,000 SF % $ 0 0 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi Tenant Use Based on Total RBA 2014 Deliveries Currently Under Construction By Class By Space Type 0% 0% 19% 15% 34% 100% 100% 47% 85% Multi Single Multi Single Class A Class B Class C Multi Single 2015 CoStar Group, Inc. The CoStar Office Report 5

11 Fairfield County Year-End 2014 Inventory & development 6 The CoStar Office Report 2015 CoStar Group, Inc.

12 Figures at a Glance Year-End 2014 Fairfield County Class A Market Statistics Year-End 2014 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates Bethel 1 308, % $ Bridgeport 3 887, , , % (92) 0 0 $24.88 Brookfield % $ Danbury 10 2,325, , , % 60, $25.52 Darien 5 276,653 15,499 32, % 10, $33.52 East I-287 Corridor % $ Fairfield 5 335,261 12,771 15, % 67, $30.85 Greenwich 39 3,535, , , % (48,857) 0 0 $66.56 Monroe % $ New Canaan % $ Newtown 2 87,000 8,000 8, % 4, ,000 $31.43 Norwalk 21 4,563, , , % 84, $32.00 Ridgefield 1 226, % $ Shelton 18 2,552, , , % (201,516) 0 0 $22.65 Stamford 78 13,443,447 2,356,883 2,409, % 491, $39.26 Stratford 3 315,774 18,273 18, % (8,335) 0 0 $21.00 Trumbull 8 721,322 71,469 71, % (46,093) 0 0 $25.32 Westport ,311 47,008 47, % 20, $37.64 Wilton 10 1,310,339 75,276 85, % (51,387) 0 0 $37.48 Totals ,620,981 4,684,780 4,849, % 382, ,000 $38.90 Class B Market Statistics Year-End 2014 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates Bethel ,456 14,354 14, % 4, $18.86 Bridgeport 68 2,154, , , % 22, $23.37 Brookfield 6 117,071 6,905 6, % (143) 0 0 $18.97 Danbury 83 1,929, , , % (30,180) 0 0 $22.72 Darien ,383 99,748 99, % (19,773) 5,712 0 $31.98 East I-287 Corridor % $ Fairfield ,366 64,472 64, % 20, $29.82 Greenwich 98 1,628, , , % 111, $48.33 Monroe 8 85,812 7,035 7, % (2,000) 0 0 $21.07 New Canaan ,745 19,818 19, % (6,643) 0 0 $40.21 Newtown ,457 33,174 33, % 8, ,000 $26.74 Norwalk 84 3,243, , , % (146,814) 0 0 $28.05 Ridgefield , , , % 15, ,000 $28.52 Shelton 33 1,676, , , % 34, $18.39 Stamford 110 4,448, , , % 8, $28.03 Stratford ,011 58,862 58, % 1, $17.65 Trumbull 36 1,538, , , % (92,825) 0 0 $18.90 Westport 89 1,401, , , % (38,779) 0 0 $38.00 Wilton , , , % (16,395) 0 0 $29.04 Totals ,374,531 3,633,722 3,668, % (125,478) 5,712 34,000 $ CoStar Group, Inc. The CoStar Office Report 7

13 Fairfield County Year-End 2014 Figures at a Glance Class C Market Statistics Year-End 2014 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates Bethel ,362 10,739 10, % $13.41 Bridgeport 188 1,763, , , % (13,146) 0 0 $19.34 Brookfield ,899 16,157 16, % (2,641) 0 0 $14.32 Danbury 153 1,149,526 68,367 69, % 23, $17.64 Darien ,762 12,193 12, % 4, $43.82 East I-287 Corridor 1 10, % $ Fairfield 120 1,137,771 42,867 42, % 2, $29.08 Greenwich 180 1,280,464 41,613 42, % 10, $46.64 Monroe ,864 27,465 27, % 1, $19.89 New Canaan ,808 10,375 10, % (3,821) 0 0 $42.62 Newtown ,541 47,344 47, % 6, $23.09 Norwalk 211 1,578, , , % 13, $22.35 Ridgefield ,925 47,447 47, % 1, $19.20 Shelton ,976 5,052 5, % 18, $18.99 Stamford 198 1,772, , , % (1,646) 0 0 $39.09 Stratford ,789 38,542 40, % 4, $19.13 Trumbull ,949 19,137 19, % (52) 0 0 $14.69 Westport ,665 45,926 45, % (2,385) 0 0 $30.35 Wilton ,048 21,916 21, % 2, $23.99 Totals 1,618 12,508, , , % 65, $26.33 Total Office Market Statistics Year-End 2014 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates Bethel ,818 25,093 25, % 4, $17.31 Bridgeport 259 4,806, , , % 8, $21.75 Brookfield ,970 23,062 23, % (2,784) 0 0 $16.13 Danbury 246 5,405, , , % 53, $23.63 Darien 98 1,195, , , % (4,754) 5,712 0 $34.96 East I-287 Corridor 1 10, % $ Fairfield 174 2,363, , , % 90, $29.73 Greenwich 317 6,444, , , % 73, $60.65 Monroe ,676 34,500 34, % (256) 0 0 $20.09 New Canaan ,553 30,193 30, % (10,464) 0 0 $40.49 Newtown ,998 88,518 88, % 18, ,000 $27.65 Norwalk 316 9,385,508 1,479,666 1,492, % (48,191) 0 0 $28.87 Ridgefield 79 1,290, , , % 17, ,000 $23.99 Shelton 79 4,433, , , % (148,712) 0 0 $20.92 Stamford ,663,876 3,407,654 3,459, % 498, $37.29 Stratford 112 1,293, , , % (2,365) 0 0 $18.52 Trumbull 55 2,413, , , % (138,970) 0 0 $19.54 Westport 208 2,850, , , % (20,878) 0 0 $36.83 Wilton 113 2,355, , , % (65,292) 0 0 $31.74 Totals 2,684 66,503,660 9,236,017 9,440, % 322,642 5,712 62,000 $ The CoStar Office Report 2015 CoStar Group, Inc.

14 Figures at a Glance Year-End 2014 Fairfield County Class A Market Statistics Year-End 2014 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q ,620,981 4,684,780 4,849, % 139, ,000 $ q ,620,981 4,773,681 4,989, % 152, ,000 $ q ,620,981 4,856,358 5,141, % 148, ,000 $ q ,620,981 4,945,570 5,289, % (58,464) $ q ,620,981 4,927,470 5,231, % 265, $ q ,620,981 5,078,978 5,497, % (88,951) $ q ,620,981 4,977,974 5,408, % (32,581) $ q ,620,981 4,901,749 5,375, % 82, $ ,620,981 4,864,270 5,457, % (715,520) 1 74, $ ,546,626 4,361,173 4,667, % 407, , ,355 $ ,286,354 4,102,960 4,815, % (764,705) 2 250, ,272 $ ,035,780 3,064,061 3,800, % (49,529) 2 537, ,846 $ ,498,280 2,865,598 3,213, % 405, , ,010,846 $ ,070,987 2,891,065 3,191, % 736, , ,115 $ ,910,987 3,408,814 3,767, % 995, , ,000 $ ,541,987 3,738,809 4,394, % (140,151) 1 50, ,000 $31.07 Class B Market Statistics Year-End 2014 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q ,374,531 3,633,722 3,668, % (91,548) 1 5, ,000 $ q ,375,582 3,542,076 3,578, % (19,359) ,712 $ q ,375,582 3,490,340 3,558, % (87,061) ,712 $ q ,523,725 3,537,742 3,619, % 72, ,712 $ q ,523,725 3,611,132 3,692, % (246,298) 1 12, ,712 $ q ,580,222 3,261,304 3,502, % 36, ,712 $ q ,600,222 3,306,946 3,559, % (81,336) 1 2, ,712 $ q ,598,083 3,257,829 3,476, % (53,460) ,139 $ ,598,083 3,192,401 3,422, % (233,447) 3 42, ,139 $ ,555,972 2,869,482 3,147, % (112,812) 6 73, ,111 $ ,482,394 2,715,475 2,960, % (320,642) 3 14, ,578 $ ,467,795 2,520,681 2,625, % (27,588) 4 126, ,599 $ ,340,811 2,348,693 2,470, % 329, , ,984 $ ,215,215 2,526,260 2,674, % 203, , ,492 $ ,004,944 2,449,215 2,668, % (825) 6 46, ,480 $ ,958,421 2,326,902 2,620, % (56,378) 2 30, ,623 $25.08 Total Office Market Statistics Year-End 2014 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q 2,684 66,503,660 9,236,017 9,440, % 66, , ,000 $ q 2,684 66,504,711 9,251,889 9,507, % 170, ,712 $ q 2,684 66,504,711 9,316,268 9,678, % 65, ,712 $ q 2,687 66,659,388 9,468,623 9,898, % 20, ,712 $ q 2,688 66,665,388 9,527,700 9,924, % (10,325) 1 12, ,712 $ q 2,689 66,721,885 9,299,763 9,970, % (117,608) ,712 $ q 2,691 66,751,135 9,183,900 9,882, % (105,282) 1 2, ,712 $ q 2,690 66,748,996 9,065,292 9,775, % 26, ,139 $ ,690 66,748,996 8,947,980 9,801, % (993,260) 4 116, ,139 $ ,689 66,737,585 8,186,310 8,797, % 295, , ,466 $ ,683 66,410,265 7,791,328 8,765, % (1,152,149) 5 265, ,850 $ ,680 66,157,872 6,515,683 7,361, % (101,617) 7 668, ,445 $ ,675 65,561,075 6,175,151 6,662, % 546, , ,142,330 $ ,661 65,010,180 6,176,877 6,658, % 1,066, , ,607 $ ,649 64,655,909 6,697,706 7,370, % 1,025, , ,480 $ ,643 64,243,386 6,970,346 7,982, % (180,497) 7 110, ,623 $ CoStar Group, Inc. The CoStar Office Report 9

15 Fairfield County Year-End 2014 Leasing Activity Historical Rental Rates Based on Full-Service Equivalent Rental Rates A B C Total Market $45.00 $4 $35.00 $3 $25.00 $2 $15.00 $1 $5.00 $ q1997 3q1998 3q1999 3q2000 3q2001 3q2002 3q2003 3q2004 3q2005 3q2006 3q2007 3q2008 3q2009 3q2010 3q2011 3q2012 3q2013 3q2014 3q by Available Space Type by Class Percent of All in Direct vs. Sublet Percent of All by Class Fairfield County United States Fairfield County United States 2% 4% 10% 16% 39% 49% 35% 98% 96% 51% Direct Sublet Direct Sublet Class A Class B Class C Class A Class B Class C U.S. Rental Rate Comparison Based on Full-Service Equivalent Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $4 $35.00 $3 Fairfield County United States $25.00 $2 $ $1 0.2 $5.00 $ q q q q q q * Includes Under Construction Spaces 10 The CoStar Office Report 2015 CoStar Group, Inc.

16 Leasing Activity Year-End 2014 Fairfield County Select Top O ce Leases Based on Leased Square Footage For Deals Signed in 2014 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 BLT Financial Centre Stamford 137,375 1st Deloitte N/A Newmark Grubb Knight Frank 2 Stamford Harbor Park Stamford 126,017 2nd Starwood Hotels & Resorts Worldwide, Inc. N/A Building & Land Technology 3 Reservoir Corporate Centre Phase I Shelton 103,596 2nd United Healthcare JLL Cushman & Wake eld 4 Merritt 7 Corporate Park - Building 101 Norwalk 100,398 1st Datto CBRE Marcus Partners 5 3 High Ridge Park* Stamford 99,815 1st Frontier Communications Corporation N/A N/A 6 Far Mill Crossing C Shelton 92,109 3rd Sikorsky N/A JLL Harbor Dr Stamford 91,040 2nd Vineyard Vines Newmark Grubb Knight Frank George Comfort & Sons, Inc. 8 The Towers Norwalk 82,116 1st General Electric Cushman & Wake eld Cassidy Turley 9 Stamford Square Stamford 74,191 1st Pitney Bowes Cushman & Wake eld JLL Atlantic St Stamford 73,564 4th Charter Communications N/A CBRE Long Ridge Rd Stamford 54,000 3rd Stamford Health Systems Newmark Grubb Knight Frank Building & Land Technology 12 Merritt 7 Corporate Park - Building 601 Norwalk 45,737 3rd N/A Cushman & Wake eld Marcus Partners; CBRE Atlantic St Stamford 36,782 1st Charter Communications N/A CBRE Summer St Stamford 32,500 1st N/A N/A Building & Land Technology 15 3 Corporate Dr Shelton 30,034 1st Conopco, Inc Cushman & Wake eld Richard Gretsch Commercial 16 1 Greenwich Plz Greenwich 29,243 3rd N/A N/A JLL 17 Merritt 7 Corporate Park - Building 301 Norwalk 25,067 2nd N/A N/A Marcus Partners; CBRE State St Bridgeport 25,000 3rd Social Security Administration. N/A AMS Real Estate, LLC Washington Blvd Stamford 23,919 3rd XL Global Services N/A Building & Land Technology 20 6 High Ridge Park Stamford 22,408 4th N/A Newmark Grubb Knight Frank Cushman & Wake eld 21 Stamford Square Stamford 22,147 3rd N/A N/A JLL Harbor Dr Stamford 20,252 2nd N/A N/A Cushman & Wake eld 23 1 Greenwich Plz Greenwich 20,098 1st N/A N/A JLL 24 Stamford Square Stamford 19,700 4th First County Bank Direct Deal JLL 25 Greenwich O ce Park - #7 Greenwich 16,690 3rd N/A Newmark Grubb Knight Frank CBRE * Renewal 2015 CoStar Group, Inc. The CoStar Office Report 11

17 Fairfield County Year-End 2014 Deliveries, Absorption & B e t h e l M a r k e t 8 Delivered SF Absorption SF 6.0% 6 5.0% % 3.0% 2.0% (2) 1.0% (4) 0.0% Rental Rates 0.05 $ $ $15.00 $ $ $ Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q ,818 25, % $ q ,818 25, % 5, $ q ,818 30, % $ q ,818 30, % (416) $ q ,818 29, % 2, $ q ,818 32, % 5, $ q ,818 38, % 1, $ q ,818 39, % 5, $ q ,818 45, % (3,478) $ q ,818 41, % 2, $ q ,818 44, % (1,000) $ q ,818 43, % $ q ,818 43, % 2, $ q ,818 45, % (2,250) $ q ,818 43, % (997) $ q ,818 42, % $ The CoStar Office Report 2015 CoStar Group, Inc.

18 Deliveries, Absorption & B r i d g e p o r t M a r k e t Year-End 2014 Fairfield County (0.010) (0.020) (0.030) (0.040) Delivered SF Absorption SF 12.0% 11.5% 11.0% 10.5% 10.0% 9.5% (0.050) 9.0% Rental Rates 0.53 $ $22.60 $22.40 $22.20 $22.00 $ $ $ $21.20 Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 259 4,806, , % (4,308) $ q 259 4,806, , % 1, $ q 259 4,806, , % 5, $ q 259 4,806, , % 5, $ q 259 4,806, , % (37,718) $ q 259 4,806, , % (2,057) $ q 259 4,806, , % 29, $ q 259 4,806, , % (6,739) $ q 259 4,806, , % 6, $ q 259 4,806, , % 38, $ q 259 4,806, , % (23,889) $ q 259 4,806, , % (5,749) $ q 260 4,807, , % (30,970) $ q 260 4,807, , % 1, $ q 260 4,807, , % 12, $ q 260 4,807, , % 36, $ CoStar Group, Inc. The CoStar Office Report 13

19 Fairfield County Year-End 2014 Deliveries, Absorption & B r o o k f i e l d M a r k e t 6 Delivered SF Absorption SF 10.0% 4 2 (2) (4) (6) (8) 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Rental Rates 0.03 $18.00 $ $ $12.00 $1 $8.00 $6.00 $4.00 $2.00 $ Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q ,970 23, % 1, $ q ,970 24, % (486) $ q ,970 23, % (2,093) $ q ,970 21, % (1,362) $ q ,970 20, % (4,025) $ q ,970 16, % 3, $ q ,970 19, % (6,251) $ q ,970 13, % 1, $ q ,970 14, % $ q ,970 15, % (2,450) $ q ,970 13, % $ q ,970 13, % $ q ,970 13, % 2, $ q ,970 16, % 1, $ q ,970 17, % 1, $ q ,970 18, % (2,837) $ The CoStar Office Report 2015 CoStar Group, Inc.

20 Deliveries, Absorption & D a n b u r y M a r k e t Year-End 2014 Fairfield County (0.010) (0.020) (0.030) (0.040) (0.050) Delivered SF Absorption SF 17.0% 16.5% 16.0% 15.5% 15.0% 14.5% 14.0% 13.5% 13.0% (0.060) 12.5% Rental Rates 0.90 $23.70 $ $ $23.40 $23.30 $ $23.10 $ $22.90 Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 246 5,405, , % 33, $ q 246 5,405, , % (701) $ q 246 5,405, , % 5, $ q 246 5,405, , % 15, $ q 246 5,405, , % 28, $ q 246 5,405, , % 29, $ q 246 5,405, , % 10, $ q 246 5,405, , % (37,368) $ q 246 5,405, , % $ q 246 5,405, , % 16, $ q 246 5,405, , % (18,287) $ q 246 5,405, , % 31, , $ q 245 5,395, , % (20,770) ,000 $ q 245 5,395, , % (2,668) ,000 $ q 245 5,395, , % (47,869) ,000 $ q 245 5,395, , % 15, $ CoStar Group, Inc. The CoStar Office Report 15

21 Fairfield County Year-End 2014 Deliveries, Absorption & D a r i e n M a r k e t (5) (0.010) (0.015) (0.020) Delivered SF Absorption SF 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% (0.025) 0.0% Rental Rates 0.16 $ $ $3 $25.00 $2 $ $ $5.00 $ Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 98 1,195, , % (3,836) 1 5, $ q 97 1,190, , % 10, ,712 $ q 97 1,190, , % (20,750) ,712 $ q 97 1,190, , % 8, ,712 $ q 97 1,190, , % (20,866) ,712 $ q 97 1,190, , % (11,879) ,712 $ q 97 1,190, , % 6, ,712 $ q 97 1,190, , % $ q 97 1,190, , % (4,498) $ q 97 1,190, , % $ q 97 1,190, , % 11, $ q 97 1,190, , % 2, $ q 97 1,190, , % 1, $ q 97 1,190, , % (4,229) $ q 97 1,190, , % 11, $ q 97 1,190, , % 15, , $ The CoStar Office Report 2015 CoStar Group, Inc.

22 Deliveries, Absorption & E a s t I C o r r i d o r M a r k e t Year-End 2014 Fairfield County Delivered SF Absorption SF 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Rental Rates $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $ Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ q 1 10, % $ 2015 CoStar Group, Inc. The CoStar Office Report 17

23 Fairfield County Year-End 2014 Deliveries, Absorption & F a i r f i e l d M a r k e t Delivered SF Absorption SF 10.0% 9.0% 8.0% (0.010) (0.020) (0.030) (0.040) 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Rental Rates 0.25 $ $ $31.00 $3 $ $28.00 $27.00 Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 174 2,363, , % (404) $ q 174 2,363, , % 22, $ q 174 2,363, , % 50, $ q 174 2,363, , % 17, $ q 174 2,363, , % (5,968) $ q 174 2,363, , % (29,161) $ q 174 2,363, , % 10, $ q 174 2,363, , % (10,936) $ q 174 2,363, , % 3, $ q 174 2,363, , % (2,545) $ q 174 2,363, , % (6,220) $ q 174 2,363, , % (19,182) $ q 174 2,363, , % 5, $ q 174 2,363, , % (11,608) $ q 174 2,363, , % 19, $ q 174 2,363, , % 7, $ The CoStar Office Report 2015 CoStar Group, Inc.