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Survey of Ofce Space
Northern Virginia Fourth Quarter 2013
Contents
DC Metropolitan Area Overview.............................................................................3 Northern Virginia..............................................................................................4-5 Alexandria..........................................................................................................6 Arlington............................................................................................................7 Tysons Corner......................................................................................................8 Reston/Herndon..................................................................................................9 50/66..............................................................................................................10 Springeld/Newington........................................................................................11 Route 28 South................................................................................................12 Loudoun County................................................................................................13 Appendix..........................................................................................................14 Tables.........................................................................................................15-26 Methodology & Denitions.................................................................................27
2 | Cassidy Turley
Washington, DC Metropolitan Area

Some Light in the Darkness
2013what a year! The Washington, DC metro region hit a trifecta weathering the rst year of budget sequestration that took billions out of the federal spend, a 19-day partial federal government shutdown, and a near breach of the nations debt ceiling. Still, somehow, the Washington DC regions ofce market ended the year in positive territory for the most part. Leasing fundamentals for the Washington DC metropolitan region as a whole were positive, albeit modest compared to past averages. Net absorption was 595,000 square feet (sf) for the year, up from the negative 1.7 million square feet (msf) in 2012 with demand coming from private sector activity. The metro region delivered 4.6 msf of ofce space over the course of the year the largest amount of deliveries since 2010. In addition, at years end we were nally witness to some bipartisan compromise in the form of a budget and spending agreement. Thus the regions ofce market is positioned for a great transition into 2014. Compounding this good news is the fact that federal spending a major driver of the regions economy is set to increase in 2014 due to a $40-billion taper to the sequestration cuts that hampered the regions economy in 2013. The recently approved budget and scal clarity that it provides may be sufcient to give the regions businesses enough condence to start hiring again and make more long-term decisions regarding hiring and the acquisition of real estate. Another interesting development is the muchimproved tone of political debate in recent weeks, a factor that could bring increased condence to the region. For example, the debate over raising the next debt ceiling has been more civil than at any point in the past three years. Whats driving the civility? Perhaps its the looming 2014 midterm elections. U.S. lawmakers may have realized that the past years political gridlock and partisan bickering have put Congressional approval ratings in the basement. A recent Gallup.com poll conducted in December 2013 indicated that a mere 12% of the public approves of the job Congress is doing. Perhaps lawmakers sense a change in strategy is needed. But despite the vagaries of policies, politics and electorate perceptions, the Washington region does soldier on. An indication of the overall health of the Washington, DC metro economy is evident in its unemployment rate that ended 2013 at 5.4% among the lowest unemployment rates in the nation for large metropolitan areas. Net job creation in the Washington, DC region during 2013 was approximately 37,000 nonfarm payrolls, according to the Bureau of Labor Statistics (BLS). That surpassed the areas historical average of 30,000 net new jobs per year. Job growth in the region for the next ve years is expected to top 200,000 net new jobs. Of course, it remains to be seen what sort of jobs they are: the high-paying, ofce-using jobs that benetted the regions ofce market in years past, or those non-ofce using jobs in the restaurant, education and health services sectors that have made up most of the job gains in 2013. Another challenge facing the Washington DC metro region going forward is whether the demand generated by future job growth will continue to be offset by the trend towards consistently smaller square feet per worker ratio among the regions largest tenant bases the federal government, law rms and government contractors. Looking forward, ofce supply coming on line for the next four to ve years should hover in the 4 msf per year range down from the 6 msf the region has averaged in the previous 10 years. Vacancy did increase during 2013 to 14.9% 0.6 percentage points up from 2012 and a third straight year of increases. With vacancy at an alltime high elevated 3 percentage points above the average for the past 10 years the region as a whole is expected to experience continued at rents and gaining occupancy will be the goal for owners in 2014.
Market Indicators 4th Quarter 2013 Change from Q3 2013 Net Absorption Deliveries Vacancy Asking Rates Change from Q4 2012
DC Metro Ofce Market 4th Quarter 2013 Q4 13 Net Absorption -382K 1.6 M 14.9% $35.78 157K Q3 13 151K 897K 14.4% $35.78 432K
DC Metro Ofce Market

Deliveries - Net Absorption - Vacancy, 2013
11 9 7 16% 14% 12%
Deliveries Vacancy Asking Rates

Vacancy
msf
5 3 1
10% 8% 6% 4% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2% 0%
New Deliveries Net Absorption Vacancy Rate
Groundbreakings
-1 -3
cassidyturley.com | 3
Northern Virginia
Market Activity
Due primarily to planned move-outs and a lack of leasing velocity during the fourth quarter of 2013, the Northern Virginia ofce market ended the year in the red, giving back more than 358,000 sf to the market. SAIC vacated more than 300,000 sf at 1709 and 1710 Solutions Drive, which it sold to the Meridian Group in July; the SEC gave back nearly 150,000 sf at 6432 General Green Way in the Springeld/Newington submarket as it begins to shift operations to outside service providers. Boeing also vacated large blocks of space during the quarter, moving out of approximately 400,000 sf at 1200 Wilson Boulevard in Rosslyn and 1215 S Clark Street in Crystal City (combined) and into 322,000 sf at 320 6th Street South and 901 S Clark Street in Pentagon City. These large space changes allowed submarkets inside the beltway to experience higher net absorption than submarkets outside the beltway for the rst time in 2013. Thanks to large leases by the FDIC and Stratford University, submarkets inside the beltway absorbed more than 33,000 sf during the quarter. Had Boeing not moved into its new locations, the total net absorption in Northern Virginia would have exceeded 100,000 sf. However, submarkets outside the beltway experienced more than 370,000 sf of negative net absorption facilitated by the move-outs by SAIC and the SEC. The submarkets along the Toll Road continued to see strong demand from tenants in the fourth quarter of 2013. In Reston, activity from government contractors resulted in positive growth for the submarket: 6k Systems signed for 11,000 sf and Bechtel signed for 23,000 sf at Plaza America Tower 2 and 3, respectively. Over the past 12 months, Reston has absorbed nearly 450,000 sf and has seen its vacancy rate decrease by 1.5 percentage points to 14.5%. In Herndon, notable leases executed by Northrop Grumman and the British Standards Institute Group helped the submarket absorb more than 100,000 sf for the quarter. In total the Toll Road registered positive absorption of 101,000 sf for the quarter and nearly 700,000 sf of positive growth for the year. In 2013, the ofce vacancy rate in the Rosslyn/Ballston (RB) Corridor continued to push upwards as government tenants and contractors vacated large blocks of ofce
space. However, various trends point towards positive growth in the RB Corridor during 2014. Large tenants have been renewing instead of exploring the market, including the GSA which renewed for nearly 353,000 sf in the third quarter and FBR Capital Markets which renewed for 53,000 sf in the fourth quarter. Additionally, rents have been declining in the RB Corridor over the past 12 months due to poor leasing fundamentals and increasing competition from submarkets outside the beltway. If large tenants continue to renew and rents continue to decrease, the RB Corridor should be able to generate positive momentum in 2014. In the fourth quarter of 2013, two properties delivered in the Northern Virginia ofce market. The much-anticipated 1812 N Moore project delivered 535,000 sf vacant to the Rosslyn submarket, and Monument Realtys Monument View brought 322,000 sf of new space to the Pentagon City submarket that was fully preleased to Boeing. For the year, the Northern Virginia ofce market delivered a little more than 1.9 million sf, approximately 1.25 million sf of which is still available. In 2014, the Northern Virginia ofce is projected to deliver 1.12 million sf of which only 486,000 sf is available.
Market Outlook
The ofce construction pipeline in Northern Virginia during the second half of 2013 delivered more than 1.5 million sf. However, more than 1.1 million sf delivered vacant. Developers are unlikely to commence construction on a speculative basis going forward as too many new vacant buildings will increase competition for similar tenants and increase an already historically high vacancy rate. Urban light areas in Northern Virginia have already begun establishing themselves as core submarkets. Reston, Herndon and Tysons Corner all had a very strong 2013 due to their increasing amenity base, access and competitive asking rents. Expect more of the same from these submarkets going forward. The ofce market is 17.6% vacant, but the availability rate -- space that is currently occupied but landlords are marketing for lease -- sits at 23%. This gap of 5.4 percentage points represents 8.4 million sf and will be a constant challenge for the market.
VA Ofce Market 4th Quarter 2013 Q4 13 Net Absorption Deliveries Vacancy Asking Rates Groundbreakings -358K 857K 17.6% $31.71 157K Q3 13 57K 696K 17.0% $31.45 321K
4 | Cassidy Turley
Lease Transactions
Top Ten Renewal Lease Transactions 4th Quarter 2013
Tenant
VT iDirect, Inc. Century Link FBR & Co. BAE Systems Boeing Satellite Services TD Bank Deloitte The Associated General Contractors of America Fu Associates Regency Centers
Square Feet
99,100 62,500 54,500 34,000 33,400 26,000 22,500 17,600 17,300 10,900
Address
13861 & 13865 Sunrise Valley Drive 4250 N Fairfax Drive 1300 N 17th Street 4301 N Fairfax Drive 460 Herndon Parkway 2070 Chain Bridge Road 1725 Duke Street 2300 Wilson Boulevard 2300 Clarendon Boulevard 1919 Gallows Road
Submarket
Herndon Ballston Rosslyn Ballston Herndon Tysons Corner Old Town Alexandria Clarendon/Courthouse Clarendon/Courthouse Tysons Corner
Top Ten Nonrenewal Lease Transactions 4th Quarter 2013

Tenant
FDIC CVENT, Inc. Stratford University Appian CSST Miles & Stockbridge P.C. British Standards Institute Pyramid Systems Dovel Technologies Henniger Media Services
Square Feet
171,000 129,000 59,800 55,500 40,300 29,900 29,200 23,400 23,200 22,400
Address
3701 N. Fairfax Drive 1709 & 1710 Solutions Drive 2900 Eisenhower Avenue 11955 Democracy Drive 1320 N Courthouse Road 1751 Pinnacle Drive 12950 Worldgate Drive 2677 Prosperity Avenue 7901 Jones Branch Drive 1320 N Courthouse Road
Submarket
Virginia Square Tysons Corner Eisenhower Avenue Reston Clarendon/Courthouse Tysons Corner Herndon Merrield Tysons Corner Clarendon/Courthouse
Northern Virginia Ofce Market

Deliveries - Net Absorption - Vacancy, Fourth Quarter 2013
7.00 5.00 3.00 1.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Northern Virginia Ofce Market

Inventory and Vacancy by Submarket, Fourth Quarter 2013
20% Vacancy Rate Square Feet (Thousands) 18%
35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 29% 24% 19% 14% 9% 4% Vacancy Rate
Square Feet (millions)
16% 14% 12% 10% 8% 6%
-1.00 -3.00
4%
Leased Space Vacant Space Vacancy Rate
Submarkets
Alexandria
Market Activity The Alexandria ofce market in Northern Virginia continued its positive momentum in the fourth quarter to end 2013 well in positive territory. The most notable lease transaction during the quarter was that of Stratford University which signed for 59,779 square feet (sf) at 2900 Eisenhower Avenue. The demand for large deals along the Eisenhower Avenue corridor is often anemic; however Stratfords University lease is indicative of the increasing demand for large blocks of ofce space in Alexandria. For the quarter, the submarkets that comprise the Alexandria ofce market -- Old Town, Eisenhower Avenue and I-395 -- absorbed 28,400 sf of space. That level of demand pushed the overall vacancy rate downward 0.2 percentage points to 18.1%. For the year, the submarket absorbed more than 145,000 sf and the vacancy declined 0.5 percentage points from 2012. Despite these positive fundamentals, asking rents have declined -from $32.33 per square foot (psf) at the end of 2012 to $30.72 in the fourth quarter of 2013. The noticeable drop in pricing has been facilitated by the fact that Alexandria is still recovering from a number of large government move-outs over the past two years. Still, lower rents will help generate interest for ofce space. Aside from Stratford Universitys lease, there was minimal leasing activity throughout Alexandria during the fourth quarter of 2013. Deloitte renewed for 22,500 sf at 1725 Duke Street, however it gave back more than 15,000 sf in the process. Morgan Stanley also renewed for an additional ve years at its current location, 333 John Carlyle Street. The largest move-out of the quarter was Harris Corporation which vacated 35,000 sf at 1201 E Abingdon. The company is in the midst of regional consolidation and is centralizing its operations in the Washington DC Metro area to 2235 Monroe Street in Reston. There are currently no ofce projects under construction in Alexandria. With limited gross leasing activity and major move-outs over the past few years, the market fundamentals do not support speculative new development. However, the National Science Foundations new 660,000 sf facility will begin construction within the next few years and is expected to deliver in 2017. There are numerous proposed ofce projects around the National Science Foundations site near the Eisenhower Avenue Metro. Market Outlook Expect asking rents to continue to decline until leasing activity throughout Alexandria is more robust. There are numerous large blocks of space (20,000+ sf) available in the Alexandria submarket. Look for large, new deals to continue to materialize going forward as landlords with large vacancies have been offering enticing concession packages to tenants. Aside from sites around the NSFs new facility, there will be little to no ofce construction activity in the Alexandria.
Net Absorption Deliveries Vacancy Asking Rates
Market Indicators 4th Quarter 2013 Change from Q3 2013 Change from Q4 2012
Alexandria Ofce Market 4th Quarter 2013 Q4 13 Net Absorption Deliveries Vacancy 28K 0 18.3% $30.72 0 Q3 13 296K 0 18.3% $31.09 0
Alexandria Ofce Market

Deliveries Net Absorption Vacancy, Fourth Quarter 2013
20% 1,750 Square Feet (thousands) 1,250 750 250 -250 -750
18% 16% 14% 12% 10%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
Vacancy Rate
Asking Rates Groundbreakings
8% 6% 4%
6 | Cassidy Turley
Submarkets
Arlington
Market Activity For the rst time in 2013, the Arlington ofce market experienced positive absorption in the fourth quarter of the year. While at only 5,300 sf, absorption is, at least, heading in the right direction. There were two major deliveries in Arlington during the quarter: 1812 North Moore Street and Monument View. 1812 North Moore, at 535,000 sf, is the largest ofce building ever delivered in Rosslyn and is currently vacant. Monument View consists of two buildings and delivered a little more than 332,000 sf in Pentagon City and was fully leased to Boeing which purchased the property in November for $138 million. The small net absorption number of 5,300 sf masks the urry activity that occurred in Arlington during the fourth quarter of 2013. Boeing was a signicant agent of change throughout Arlington as it moved out of more than 400,000 sf at 1200 Wilson Boulevard in Rosslyn and 1215 S Clark Street in Crystal City and relocated to the 332,000 sf at Monument View. Another big mover was the FDIC which signed a 171,000 sf lease at 3701 N Fairfax Drive in Virginia Square. The former DARPA building just completed $5 million worth of renovations. Aside from the FDIC, there was no other government leasing in the fourth quarter of 2013. However, government contractors remained active. In Clarendon/Courthouse, CSST signed for more than 40,000 sf at 1320 N Courthouse Road and BAE Systems renewed for 34,000 SF at 4301 N Fairfax Drive in Ballston. The largest non-government lease of the quarter was that of Century Link which renewed for 62,500 sf at 4250 N Fairfax Drive for the next seven years. Currently, there is only one ofce project under construction in Arlington. Penzance plans to deliver 288,000 sf across two buildings in the rst quarter of 2014, 196,000 sf of which is preleased to the Center for Naval Analyses. While there are various ofce projects that have been proposed throughout Arlington, the Shooshan Company is poised to actually break ground on Liberty Center sometime in 2014. The proposed ofce building is expected to be nearly 420,000 sf but has not secured any preleases as of the fourth quarter of 2013.
Market Outlook
Look for stabilization in the Rosslyn/Ballston corridor. Notable large renewals toward the end of 2013 (FBR Capital Markets, US Department of State) indicate that tenants are committed to staying in their current submarkets and are not looking for cheaper alternatives outside the beltway. Look for rents in the RB corridor to push downwards in the coming quarters. With the overall ofce vacancy rate at an historic high and signicant negative net absorption totals over the past three years, tenants will continue to be able to demand lower rents. The competition among new space will be heating up in the coming quarters. In addition to 1812 N Moore and Liberty Center, four other new ofce projects have been proposed in the Rosslyn-Ballston corridor.
Arlington Ofce Market 4th Quarter 2013 Q4 13 Net Absorption 5K 857K 22.5% $41.25 0 Q3 13 -393K 308K 20.5% $41.35 0
Arlington Ofce Market

1,500 1,000 Square Feet (thousands) 500 0 -500 -1,000 -1,500 -2,000
24% 22% 20% Vacancy Rate 18% 16%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
Deliveries Vacancy Asking Rates Groundbreakings
14% 12% 10% 8% 6% 4%
Submarkets
Tysons Corner
Market Activity Tysons Corner is the largest, and perhaps most dynamic, submarket in Northern Virginia and was once again at the forefront of ofce leasing activity during the fourth quarter of 2013. Most notable was SAIC vacating its 328,000-sf space at 1709 and 1710 Solutions Drive, and CVENT backlling 129,000 sf of that space in the largest deal of the quarter in the market. CVENT is expanding out of 70,000 sf at 8180 Greensboro Drive. For the quarter, the Tysons Corner submarket experienced 107,000 sf of negative net absorption. But the SAICs move-out had been expected and the ability of the Tysons submarket to continue to generate leasing activity is an indicator of its resiliency going forward. Notable leases that helped restraint the amount of negative growth included Miles & Stockbridge which signed for nearly 30,000 sf at 1751 Pinnacle Drive and Watkins Meegan which will be taking 16,000 sf at 8000 Towers Crescent Drive. There was also a number of new transactions within the 5,000- 15,000 sf range that helped mitigate negative net absorption, including leases signed by NetIQ, Cognosante, Government Contractor Solutions and the Merritt Group. Tysons Corner is one of the few submarkets to boast increases in rents during the past few years. Over the past 12 months rents have increased to $30.32 per square foot (psf), up from $29.67 psf a year ago, a 2.2% increase. At a time when the majority of submarkets see rents holding steady or decreasing in order to generate activity, Tysons Corner ofce space has been able to increase its rents due to the areas robust amenity base, the impending arrival of Metro, and easy access from the surrounding area. Construction activity in Tysons Corner is yet another indicator of the submarkets strength. Tysons Tower is on pace to deliver 524,000 sf in 2014, more than half of which is preleased to Intelsat and Deloitte. In addition, 7940 Jones Branch Drive will bring 320,000 sf to the market toward the end of 2014; LMI has agreed to purchase the lower six oors of the building. Additionally, the Meridian Group is planning to revamp the SAIC campus it purchased in the summer of 2013 and leased to CVENT during the past quarter. Market Outlook The increasing amenity base and improved access to Tysons Corner will continue to attract all tenant types to the submarket. Tysons Corner has not had a new ofce building deliver since 2005. In addition to Tysons Tower, 7940 Jones Branch and the SAIC campus, look for new development and major renovations to continue in Tysons as new product has outpaced the rest of the market over the past few years. The Silver Line Metro is schedule to open in Tysons Corner sometime in 2014. Expect a younger demographic to have a bigger presence and be a demand driver for all types of commercial space going forward.
Tysons Corner Ofce Market 4th Quarter 2013 Q4 13 Q3 13 133K 0 15.4% $29.99 321K
Tysons Corner Ofce Market

1,500 1,000 500 0 -500 -1,000
Net Absorption
22% 20%
-206K 0 16.3% $30.32 0
Deliveries Vacancy
Vacancy Rate
Square Feet (thousands)
18% 16% 14% 12%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
10% 8% 6% 4%
8 | Cassidy Turley
Submarkets
Reston/Herndon
Market Activity Absorption in the Toll Road submarkets outpaced that of all other Northern Virginia areas in 2013. Reston and Herndon generated positive and robust leasing activity during each quarter of 2013, and registered more than 680,000 sf of positive absorption for the year. While not as strong as demand in the previous quarter, in the fourth quarter of 2013 the Toll Road registered a little more than 100,000 sf of positive net absorption. The bulk of positive growth was in Herndon. Strong leasing activity across a variety of space sizes as well as a lack of large moveouts allowed the submarket to register more than 101,000 sf of positive growth. The largest leases of the quarter in Herndon were those for the British Standards Institute Group and Continental Building supplies which took a combined 50,000 sf at 12950 Worldgate Drive. Tenants in Reston, such as Appian and Bechtel, executed large new deals; however, these move-ins were offset by the American Press Institute vacating 42,000 sf at 11690 Sunrise Valley Drive and Siteworx moving out of 11480 Commerce Park Drive. The strongest minimarket within the Toll Road submarket, and perhaps the entire Washington DC Metro region, is Reston Town Center. The Town Center had a vacancy rate just north of 8.00% at the end of 2013 and average asking rents nearly $10.00 higher on a per square foot basis than the rest of the submarket. Two the largest lease transactions in Reston Town Center during the year were executed by SAIC spinoff Leidos and business process management software company Appian, both of which signed deals for more than $40.00 per square foot. There are currently no ofce projects under construction along the Toll Road. However, the Toll Road is due for new construction considering the last building to deliver was 11955 Democracy Drive in 2009. Market Outlook Do not be surprised if a developer begins ofce construction on a speculative basis along the Toll Road in the near future. With strong absorption numbers and a decreasing vacancy rate, it is likely that if you build it they will come. Reston Town Center will continue to be a stronghold for the Toll Road. With the majority of the inventory built after 2000, the newer space in the Town Center will help attract tenants for the foreseeable future. Some of the largest leases in Reston during 2013 were outside the Reston Town Center. The ability of non-Town Center properties to attract large users is an indicator that tenants want to be along the Toll Road, Town Center or not.
Reston/Herndon Ofce Market 4th Quarter 2013 Q4 13 Q3 13 231K 0 13.7% $27.50 0
Reston/Herndon Ofce Market

2,500 2,000 1,500 1,000 500 0 -500
Net Absorption
20% 18% 16% 14% 12% 10% 8% Vacancy Rate
101K 0 13.3% $28.00 0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 YTD
6% 4%
Submarkets
50/66
Market Activity A lack of substantial leasing activity during the quarter resulted virtually no change in the 50/66 corridor ofce leasing fundamentals compared to the previous quarter. The corridor, comprised of the Merrield, Vienna, Oakton, Fairfax Center and Fairfax City submarkets, registered only 1,750 sf of negative net absorption during the fourth quarter and the vacancy rate remained unchanged over the quarter at 14.8%. The largest deal of the quarter in the corridor was in Merrield: Pyramid Systems signed for 23,400 sf at 2677 Prosperity Avenue. Other notable leases outside of Merrield were those for CFC Financial Group for 12,100 sf at 11350 Random Hills Road in Fairfax Center and Brookeld Homes for 10,000 sf at 3201 Jermantown Road in Oakton. The latter is a prime of example of how fully renovating a building in a non-core submarket can still generate strong leasing activity. The Class A properties along the 50/66 corridor experienced strong leasing activity during 2013 and ended the year with 25,000 sf of positive growth. Additionally, Class A buildings are charging a premium compared to the rest of the market; their average price per square foot is $29.50 while that for Class B space is nearly six dollars lower at $23.82 per square foot. There are currently no ofce buildings under construction along the route 50/66 Corridor, however, the submarket has been responsive to speculative ofce development that is well located, such as the Mosaic in Merrield. Market Outlook The 50/66 corridor does not typically generate robust leasing activity every quarter and going forward its overall performance can be susceptible to only a one or two large move-ins or move-outs. Even though new construction has been light over the past few years, renovations to ofce properties have been successful and will be more prominent in non-performing buildings going forward. Do not expect rents to move much in either direction in the coming quarters unless there is a string of major move-outs or an unprecedented surge in demand. Since the beginning of 2012, asking rents have ranged from $27.00 to $27.50 on a square foot basis.
50/66 Ofce Market 4th Quarter 2013
50/66 Ofce Market

600 400 Square Feet (thousands) 200 0 -200 -400 -600 -800 -1,000
Q4 13 Net Absorption
18% 16% 14%
Q3 13 -25K 0 14.8% $27.16 0
-2K 0 14.8% $27.83 0
Deliveries Vacancy
Vacancy Rate
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 YTD
12% 10% 8% 6% 4%
10 | Cassidy Turley
Submarkets
Springeld/Newington
Market Activity Market fundaments worsened for Springeld in the fourth and nal quarter of 2013. The submarket that experienced 387,000 sf of deliveries in the third quarter, 362,000 sf of which were vacant, fell victim to large move-outs and lackluster leasing velocity. Thus, vacancy rates spiked and net absorption plummeted. The most notable move-out was the Securities and Exchange Commission (SEC) which vacated more than 145,000 sf at 6432 General Green Way due to consolidation of operations to its downtown ofce and outsourcing work to government contractors. For the quarter, Springeld Newington registered 239,000 sf of negative net absorption and saw the overall vacancy rate rise from 22.5% at the end of the third quarter to 27.2% to close out the year. In addition to the SEC vacating nearly 150,000 sf, Future Technologies vacated all 52,000 sf at 8000 Corporate Court and Kositzka, Wicks and Company gave back nearly 18,000 sf at 5500 Cherokee Avenue. Unfortunately for the Springeld Newington ofce market, the biggest lease of the fourth quarter was signed by Vanguard Research for a mere 6,200 sf. Similar to other submarkets through the Northern Virginia ofce market, asking rents in the Springeld/Newington area have experienced no growth since 2011. At the end of 2011, the average asking rent was $34.00 psf and was $30.65 psf at year end 2013. The alarmingly high vacancy rate has caused landlords to push rents downward in order to generate activity. One piece of good news for the Springeld market was on the investment sales side: MRP Realty purchased 6225 Brandon Avenue from TA Associates Realty for $16.25 million or $121 per square foot. The transaction proves that investors see upside in the Springeld Newington market. Construction activity has slowed down in the Springeld Newington market after more than 350,000 sf delivered in the third quarter. Currently, there is only 40,000 sf under construction, which is fully preleased to local burger franchise Five Guys, and is expected to be completed in early 2014. Market Outlook Springeld Newington is a large user ofce market that relies heavily on government contractors to ll its vacancies. Expect the new ofce buildings that delivered vacant in the fourth quarter of 2013 to ll up, one large occupant at a time. Similar to every other submarket throughout Northern Virginia, new ofce space has a signicantly higher rate of absorption than does relet or sublet space. Fortunately for Springeld Newington, it has lot of new space to attract tenants. Do not expect to see rent growth until the submarkets record high vacancy signicantly comes down.
Springeld/Newington Ofce Market 4th Quarter 2013 Q4 13 Q3 13 -52K 387K 22.5% $31.70 0
Springeld/Newington Ofce Market

500 400 Square Feet (thousands) 300 200 100 0 -100 -200 -300
Net Absorption
29% 24% Vacancy Rate 19% 14%
-240K 0 27.2% $30.65 0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
9% 4%
Submarkets
Route 28 South
Market Activity In the fourth quarter of 2013, the Route 28 South Corridor struggled to generate leasing activity. For the quarter, the submarket registered a negative 46,000 sf of net absorption and the overall vacancy rate ticked up 30 basis points from the third quarter of 2013 to 16.5%. Government contractor move-outs were the primary contributors to negative net absorption during the quarter. Tellabs executed the largest move-out of the quarter, vacating 24,000 sf at 4219 Lafayette Center Drive. Other notable tenant move-outs during the quarter were Harris Corporation, which is in the midst of a regional consolidation, and Electronic Warfare Associates, which gave back more than 10,000 sf at 13873 Park Center Road. A positive trend that is continuing to emerge in the Route 28 South submarket is the demand for new space: 14399 Penrose Place leased 5,000 sf to an undisclosed tenant during the quarter. Even though the size of the lease is hardly signicant, it still shows that new space in the Route 28 South corridor is actively attracting tenants. There are currently no projects under construction in the Route 28 South submarket; however, Corporate Ofce Properties Trust purchased 31 acres from Duke Realty in July of 2013 and is poised to commence development of ofce buildings in the near future. Effective rental rates for Class A ofce space currently range from $22 to $32 on a full service basis, with tenant improvement allowances ranging from as-is to $40 per square foot for existing space Market Outlook With close proximity to Dulles International Airport, a strong business base and diverse workforce, Route 28 South is expected to continue to be the major employment center in western Fairfax County. Average asking rates are expected to remain near $25 psf in 2014 due to decreased leasing velocity from the submarkets tenant base of government contractors. New space continues to be the most sought-after product type for tenants in the Route 28 South corridor. During 2013, new space absorbed over 325,000 sf while relet and sublet spaces combined to give back 87,000 sf. With nearly 500,000 sf of new space available for lease, look for more positive absorption in this sector of the market.
Route 28 South Ofce Market

2,000 1,500 1,000 500 0 -500
Route 28 South Ofce Market 4th Quarter 2013

22% 20%
Q4 13 Net Absorption Deliveries Vacancy Asking Rates Groundbreakings -46K 0 16.5% $25.26 157K
Q3 13 -18K 0 16.2% $24.98 0
18% Vacancy Rate 16% 14% 12% 10% 8%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
6% 4%
12 | Cassidy Turley
Submarkets
Loudoun County
Market Activity Leasing fundamentals in the Loudoun County ofce market remained at during the fourth quarter of 2013. For the quarter, the county registered just over 700 sf in positive net absorption and the vacancy rate remained unchanged at 18.0%. However, for the year Loudoun County gave back more than 125,000 sf of space and the vacancy rate rose 1 percentage point. The most notable relocation during the fourth quarter was Rees Broome, PC which moved into more than 25,000 sf at 1602 Village Market Boulevard in the West Leesburg submarket. 1602 Village Market Boulevard is new space, built back in 2010, and proves that in all submarkets new space can attract large tenants. Another notable lease during the quarter was the renewal by Brainware, Inc. The software company, which was purchased by Lexmark International in 2012, will remain in more than 12,000 sf at 20110 Ashbrook Place for another ve years. Unfortunately, the limited positive leasing activity was offset from move-outs by Garb Media and Echo 360 which combined to vacate more than 29,000 sf at 21000 Atlantic Boulevard. Construction in Loudoun County has been at a standstill over the past few years and there are currently no projects under development. The most recently delivered building, 1602 Village Market Boulevard, has absorbed 80% of its space since it delivered in 2010 Market Outlook Despite its lack of development activity over the past couple of years, Loudoun County is poised for a major mixed-use development in the near future. Several notable developers have issued proposals for mixed-use facilities that will help generate demand for the ofce market. The majority of planned development is to be located near Dulles Airport and will serve as a hub for ofce users who are required to travel. Average asking rents throughout Loudoun County have remained in the $23.00 per square foot range for more than three years. Do not expect much movement in asking rents.
Loudoun County Ofce Market

800 700 Square Feet (thousands) 600 500 400 300 200 100 0 -100 -200
20% 18% 16% 14% 12% 10% 8%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
Loudoun County Ofce Market 4th Quarter 2013

Vacancy Rate
Q4 13 Net Absorption Deliveries Vacancy Asking Rates Groundbreakings 1K 0 18.0% $23.64 0
Q3 13 -140K 0 18.0% $23.71 0
6% 4%
Appendix
Metro Washington Ofce Market Summary: 4th Quarter 2013
Table Summaries
Employment Data
14 Washington, DC Northern Virginia Suburban Maryland Regional Totals
Total Inventory 122,183,159 161,686,829 72,684,230 356,554,218
Total Space Available 12,915,422 28,535,111 11,643,188 53,093,721
Vacancy Rate (%) 10.6% 17.6% 16.0% 14.9%
Total Absorption 60,138 (358,300) (84,257) (382,419)
Ofce Availability, Vacancy, and Net Absorption

15
Trailing 12-Month Data

16
Historical Year-End Data

17
Market Statistics by Class

18-19
Metro Washington Employment Data

Labor Force (Jan-Nov 2012) Washington, DC Northern Virginia Suburban Maryland Regional Totals 2,472,036 1,352,573 945,591 4,770,200 Labor Force (Jan-Nov 2013p) 2,493,955 1,369,773 957,691 4,821,419 Jobs Added/ Lost* 21,919 17,200 12,100 51,219 Percent Change 0.9% 1.3% 1.3% 1.1%
Survey of New Ofce Space by Submarket

20-26
Methodology & Denitions

27
SOURCE: U.S. Bureau of Labor Statistics (Not seasonally adjusted) * Average per year to date p - preliminary
14 | Cassidy Turley
Ofce Availability, Vacancy, and Net Absorption, Fourth Quarter 2013p

New Space Available4 567,657 0 0 123,569 690,307 0 1,381,533 691,226 11,000 17,356 605,998 634,354 2,015,887 49,541 51,961 96,249 91,118 0 0 0 8,450 267,787 621,821 1,186,927 99,568 183,255 225,687 30,876 439,818 1,626,745 3,642,632 13,649,626 22,747,123 1,538,051 101,903 790,027 646,121 50,095 19,217 7,704 77,016 1,560,067 2,145,356 2,516,034 357,181 12,111,575 1,483,051 710,427 177,864 1,720,165 171,213 476,804 26,902 512,156 2,159,165 1,510,112 14,781,553 2,972,783 879,471 1,034,931 140,483 2,054,885 16,836,438 28,535,111 778,455 172,703 951,158 206,632 10,712 217,344 146,884 1,698 148,582 12.2% 20.2% 14.5% 15.3% 16.5% 27.2% 15.7% 14.8% 14.4% 24.4% 13.4% 18.0% 15.9% 17.6% 907,259 145,166 1,143,543 14.5% 1,012,255 201,214 1,309,718 11.2% 2,392,592 245,479 2,690,032 14.7% 10,575 2,046 14,939 0 0 0 0 5,000 25,113 57,673 14,939 1,412 3,970 27,790 33,172 90,845 422,929 3,760,102 330,100 4,139,743 16.3% 0 9,097,497 585,289 11,698,673 20.9% 332,084 2,916,292 240,745 3,791,391 18.1% 0 1,861,485 88,094 2,555,577 32.3% 0 (4,891) 45,373 (325,219) (191,880) (30,393) 99,666 (27,627) (4,742) 9,444 24,925 (4,839) (43,235) (257,089) (425,770) (2,839) 10,471 11,834 (13,712) 8,593 (417,177) (742,396) 161,628 36,547 215,531 4.4% 0 62,909 893,179 116,104 1,020,283 12.6% 0 (12,645) 3,632,566 187,934 4,511,726 20.5% 0 (108,013) 30,882 (21,920) (4,847) 9,783 (16,984) 26,823 (14,257) 18,454 958 2,661 0 (8,468) (9,310) 1,268 (8,240) (7,683) (24,617) (13,849) (31,452) (4,618) (4,969) (41,039) (65,656) (38,833) 6,181,205 344,544 7,907,282 22.5% 332,084 (370,592) 43,807 256,849 0 256,849 14.4% 332,084 0 0 2,291,790 156,610 3,138,707 27.5% 0 (262,579) 12,925 1,146,919 33,092 1,303,580 17.8% 0 (55,796) 6,002 (49,794) (249,654) 332,084 5,299 (77,131) (34,565) 58,062 4,892 28,389 33,688 (206,137) (1,364) 102,670 (10,027) (4,742) 976 15,615 (3,571) (46,475) (239,659) (392,714) (1,749) (19,569) 11,186 9,109 726 (391,988) (358,300) 208,198 49,173 257,371 23.0% 0 168,723 (150) 168,573 503,004 62,774 565,778 12.4% 0 (40,407) 10,039 (30,368) 1,774,445 42,895 2,384,997 26.5% 0 (180,533) 14,991 (165,542) Relet Space Available Sublet Space Available Total Space Available Vacancy Rate New Space Absorption Relet Absorption Sublet Absorption Total Net Absorption
Total Inventory
Rosslyn
8,988,195
Clarendon /Courthouse
4,560,016
Va Square
1,120,831
Appendix
Ballston
7,332,378
Crystal City
11,404,616
Pentagon City
1,781,463
Arlington Cnty
35,187,499
R/B Corridor2
22,001,420
Old Town
8,109,935
Eisenhower
4,883,598
I-395
7,914,855
Alexandria
20,908,388
Inside the Beltway1
56,095,887
Tysons Corner
25,471,289
Reston
18,308,262
Herndon
11,737,088
Merrield
7,878,879
Vienna
1,219,275
Oakton
1,074,909
Fairfax Center
6,538,055
Fairfax City
3,352,765
28 South
13,056,023
Springeld/Newington
5,558,640
Fairfax County
94,195,185
50/663
20,063,883
28 North
6,111,883
Route 7
4,234,926
Leesburg
1,048,948
Loudoun Cnty
11,395,757
Outside the Beltway
105,590,942
Northern Virginia
161,686,829
1 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties 2 The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets. 3 The 50/66 corridor is comprised of Merrield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets. ****New Space Available and New Space Absorption based on buildings delivered 2005 to present
P - Preliminary
Trailing 12-Month Data

Total Ofce Inventory
2nd Qtr 2013p 8,452,815 4,560,017 1,120,832 7,332,379 11,095,759 1,449,379 34,011,181 21,466,043 8,109,935 4,883,599 7,914,855 20,908,389 54,919,570 25,529,101 18,308,262 11,737,089 7,878,879 1,219,275 1,074,909 6,538,055 3,352,766 13,056,024 13,056,024 13,056,023 15.9% 3,352,765 3,352,765 12.8% 6,538,055 6,538,055 15.1% 14.8% 15.0% 16.0% 1,074,909 1,074,909 19.4% 18.8% 1,219,275 1,219,275 11.7% 12.2% 7,878,879 7,878,879 14.1% 14.2% 14.4% 11.8% 20.3% 14.8% 15.2% 16.2% 11,737,088 11,737,088 12.6% 13.1% 12.0% 18,308,262 18,308,262 15.3% 15.3% 14.7% 14.7% 11.2% 14.5% 12.2% 20.2% 14.5% 15.3% 16.5% 25,471,289 25,471,289 16.0% 16.2% 15.4% 16.3% 55,228,423 56,095,887 18.7% 19.0% 19.7% 20.9% 20,908,389 20,908,388 18.9% 19.7% 18.3% 18.1% (19,915) (306,628) 8,643 298,116 114,433 (63,959) 4,460 38,723 24,981 12,310 47,497 7,914,855 7,914,855 32.8% 34.7% 32.4% 32.3% (30,463) 4,883,599 4,883,598 5.7% 5.7% 5.6% 4.4% 2,478 8,109,935 8,109,935 13.3% 13.5% 12.2% 12.6% 8,070 2,844 (150,585) (159,273) (204,507) (43,253) (8,893) (55,889) (14,724) (5,672) 6,336 21,054 (74,086) 287,018 21,466,039 22,001,420 16.1% 16.4% 18.2% 20.5% (323,651) (51,622) (11,532) 34,320,034 35,187,499 18.5% 18.6% 20.5% 22.5% (286,502) (45,234) 1,449,379 1,781,463 17.7% 17.7% 17.7% 14.4% 0 0 11,404,616 11,404,616 23.2% 23.2% 25.3% 27.5% 37,149 6,388 0 (393,648) (383,629) 105,845 3,580 187,211 296,636 (97,012) 133,324 112,289 119,566 (10,783) 5,042 (15,885) 2,635 (6,024) (17,951) 7,332,378 7,332,378 13.4% 13.6% 17.1% 17.8% 28,108 (9,092) (259,378) (10,019) 1,120,831 1,120,831 28.9% 30.5% 38.0% 23.0% 18,408 (17,470) (84,637) 4,560,016 4,560,016 10.5% 10.5% 11.7% 12.4% (3,837) 990 (57,779) 8,452,814 8,988,195 19.8% 20.1% 19.9% 26.5% (366,330) (26,050) 18,165 (165,542) (30,368) 168,573 (49,794) (249,654) 332,084 5,299 (77,131) (34,565) 58,062 4,892 28,389 33,688 (206,137) (1,364) 102,670 (10,027) (4,742) 976 15,615 (3,571) (46,475) 3rd Qtr 2013p 4th Qtr 2013 1st Qtr 2013 2nd Qtr 2013p 3rd Qtr 2013p 4th Qtr 2013 1st Qtr 2013 2nd Qtr 2013p 3rd Qtr 2013p 4th Qtr 2013
Ofce Vacancy Rate
Total Ofce Absorption
1st Qtr 2013
Appendix
16 | Cassidy Turley
Rosslyn
8,452,814
Clarendon/Courthouse
4,560,016
Va Square
1,120,831
Ballston
7,332,378
Crystal City
11,095,758
Pentagon City
1,449,379
Arlington County
34,011,176
R/B Corridor2
21,466,039
Old Town
8,109,934
Eisenhower
4,883,598
I-3954
7,914,855
Alexandria
20,908,387
Inside the Beltway1
54,919,563
Tysons
25,529,101
Reston
18,308,262
Herndon
11,737,088
Merrield
7,878,879
Vienna
1,219,275
Oakton
1,074,909
Fairfax Center
6,538,054
Fairfax City
3,352,765
28 South 5,136,117
93,830,477 20,063,884 6,111,884 4,234,926 1,048,949 11,395,759 105,226,236
160,145,806
12,697,445
Springeld/Newington4 5,488,634
94,125,180 20,063,883 6,111,883 4,234,927 1,048,950 11,395,760 105,520,940
160,749,363
5,136,117
94,195,185 20,063,883 6,111,883 4,234,926 1,048,948 11,395,757 105,590,942
161,686,829
5,558,640
16.5%
15.1% 14.3% 12.2% 24.4% 14.7% 17.0% 15.3%
16.5%
16.2%
15.3% 14.7% 11.8% 24.5% 15.2% 16.8% 15.4%
16.7%
22.5%
15.2% 14.8% 14.1% 24.7% 14.3% 18.0% 15.6%
17.0%
27.2%
15.7% 14.8% 14.4% 24.4% 13.4% 18.0% 15.9%
17.6%
37,777
522,981 16,515 (11,817) (3,350) 6,864 (8,303) 514,678
208,050
14,871
126,762 (67,092) 26,565 (1,313) (4,605) 20,647 147,409
(57,098)
(52,962)
269,251 (25,015) (139,867) (9,712) 9,487 (140,092) 129,159
32,147
(239,659)
(392,714) (1,749) (19,569) 11,186 9,109 726 (391,988)
(358,300)
Fairfax County
93,471,895
50/663
20,063,882
28 North
6,111,883
Rte 7
4,234,926
Leesburg
1,048,948
Loudoun Cnty
11,395,757
Outside the Beltway
104,867,652
Northern Virginia
159,787,215
1 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties 2 The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets. 3 The 50/66 corridor is comprised of Merrield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets. 4 The I-395 and Springeld/Newington submarkets were updated in the second quarter of 2012 with additional inventory. p- preliminary
Historical Year-End Data

Total Inventory 2012 34,457,141 21,912,004 21,164,887 55,622,028 25,529,101 18,125,838 11,737,088 20,070,532 12,697,445 5,096,117 93,256,121 11,305,557 104,561,678 160,183,706 161,686,829 105,590,942 11,395,757 17.1% 15.6% 14.2% 94,195,185 15.4% 5,558,640 17.3% 15.5% 16.7% 15.6% 16.4% 13,056,023 15.5% 16.3% 20,063,883 14.5% 14.4% 14.8% 16.5% 27.2% 15.7% 18.0% 15.9% 17.6% 11,737,088 13.0% 13.6% 11.2% 18,308,262 16.2% 16.0% 14.7% 25,471,289 16.6% 16.0% 16.3% 48,375 407,765 (356,437) 116,119 514,731 730,553 (131,004) 599,549 (157,872) 56,095,887 11.5% 18.0% 20.9% (757,421) 20,908,388 13.2% 18.6% 18.1% (140,429) 22,001,420 11.7% 14.6% 20.5% (556,573) (556,573) (140,429) (2,348,757) 199,476 30,835 (65,726) 79,665 (106,518) 56,693 218,400 115,100 333,500 (2,015,257) 35,187,499 10.6% 17.6% 22.5% (616,992) (1,743,832) 2013 2011 2012 2013 2011 2012 Vacancy Rate (%) Total Annual Absorption 2013 YTD (720,085) (836,033) 145,837 (574,459) (107,423) 400,148 280,780 (77,341) 270,089 (239,973) 526,280 (127,022) 399,258 (174,990)
Appendix
2011
Arlington County
34,053,135
R/B Corridor2
21,258,299
Alexandria4
18,439,954
Inside the Beltway1
52,493,089
Tysons Corner
25,813,374
Reston
18,127,126
Herndon
11,737,088
50/663
20,024,748
28 South
12,697,445
Springeld/Newington4
Fairfax County
88,399,781
Loudoun County
11,423,169
Outside the Beltway
99,822,950
Northern Virginia
152,316,039
1 Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties 2 The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets. 3 The 50/66 corridor is comprised of Merrield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets. 4 The I-395 and Springeld/Newington submarkets were updated in the second quarter of 2012 with additional inventory.
Market Statistics
Northern Virginia Market Statistics
Existing Properties Buildings Alexandria Class A B C TOTAL Arlington Class A B C TOTAL Tysons Corner Class A B C TOTAL Reston/Herndon Class A B C TOTAL 50/66 Class A B C TOTAL
18 | Cassidy Turley
Total Inventory
New Vacancy
Relet Vacancy
Sublet Vacancy
Total Vacancy
Net Absorption Current QTR
Under Construction
Average Rent
78 138 36 252
10,972,546 9,042,906 892,936 20,908,388
0.0% 0.0% 0.0% 0.0%
17.7% 17.4% 3.4% 17.0%
1.8% 0.4% 0.0% 1.2%
19.1% 20.2% 4.7% 19.7%
(30,970) 62,659 (3,300) 28,389
$31.58 $28.59 $25.73 $30.72
86 69 16 171
21,693,369 11,837,485 1,656,645 35,187,499
2.5% 0.0% 0.0% 1.5%
17.8% 23.2% 25.0% 20.0%
1.2% 0.5% 1.0% 1.0%
21.5% 23.7% 26.0% 22.5%
161,887 (156,255) (333) 5,299
288,727 288,727
$42.46 $39.90 $33.66 $41.25
77 91 5 173
16,918,772 8,415,873 136,644 25,471,289
0.3% 0.0% 0.0% 0.2%
11.0% 22.4% 9.9% 14.8%
1.4% 1.0% 0.0% 1.3%
12.7% 23.4% 9.9% 16.3%
25,783 (233,905) 1,985 (206,137)
832,667 832,667
$33.60 $26.82 $25.33 $30.32
150 151 6 307
23,810,554 6,027,532 207,264 30,045,350
0.6% 0.0% 0.0% 0.5%
9.9% 16.8% 16.1% 11.3%
1.6% 1.0% 0.0% 1.5%
12.2% 17.8% 16.1% 13.3%
130,891 (29,144) (441) 101,306
$29.50 $22.10 $22.03 $28.00
88 168 29 285
12,407,673 7,158,157 498,052 20,063,882
0.8% 0.0% 0.0% 0.5%
13.2% 11.6% 9.0% 12.5%
2.4% 0.7% 0.3% 1.8%
16.5% 12.4% 9.4% 14.8%
26,589 (20,821) (7,517) (1,749)
$29.62 $24.42 $21.82 $27.83
Market Statistics
Northern Virginia Market Statistics
Existing Properties Buildings Springeld/Newington Class A B C TOTAL Route 28 South Class A B C TOTAL Loudoun County Class A B C TOTAL Northern Virginia Class A B C TOTAL 632 868 101 1601 104,125,529 53,743,323 3,782,974 161,651,826 1.5% 0.0% 0.0% 1.0% 13.7% 18.3% 15.8% 15.3% 1.6% 0.9% 0.5% 1.3% 16.8% 19.2% 16.3% 17.6% 259,865 (613,927) (4,238) (358,300) 1,693,644 1,693,644 $33.02 $29.20 $26.70 $31.71 68 127 5 200 6,860,605 4,371,562 163,590 11,395,757 0.0% 0.0% 0.0% 0.0% 18.3% 15.5% 26.6% 17.4% 0.8% 0.4% 0.1% 0.7% 19.1% 16.0% 26.6% 18.0% (9,958) 5,316 5,368 726 0 $26.72 $22.28 $21.00 $23.64 67 75 3 145 9,159,523 3,883,845 12,655 13,056,023 1.8% 0.6% 0.0% 2.1% 12.3% 14.9% 0.0% 13.2% 0.4% 3.5% 0.0% 1.3% 14.4% 18.9% 0.0% 16.5% (36,252) (10,223) (46,475) 532,250 532,250 $28.15 $21.73 $16.46 $25.26 18 49 1 68 2,302,487 3,005,963 215,188 5,523,638 27.0% 0.0% 0.0% 11.3% 7.8% 17.7% 0.3% 12.9% 6.8% 0.7% 0.0% 3.2% 41.6% 18.4% 0.3% 27.3% (8,105) (231,554) (239,659) 40,000 40,000 $26.67 $22.28 $15.16 $30.65 Total Inventory New Vacancy Relet Vacancy Sublet Vacancy Total Vacancy Net Absorption Current QTR Under Construction Average Rent
* Vacancy Current - the vacancy rate is calculated using the combined total of vacant direct, sublease and new space.
Alexandria: Old Town, Eisenhower Avenue, I-395
20 | Cassidy Turley
RENTAL RATE OWNER/ DEVELOPER DELIVERY DATE 2011 0 0 0 Operating Expense and Real Estate Tax Base FS N NNN = Net of all Operating Expenses and Taxes = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char Delivery Date *Under construction as of current quarter 2012 0 0 0 2013 0 0 0 2014 0 0 0 2015 0 0 0
Survey of New Office Space by Submarket
BUILDING ADDRESS
Alexandria, VA Summary
Total New Office Space
Available as of 3Q13
Under Construction as of 3Q13
Rental Rate
N/A = Not Available
TBD = To Be Determined

RENTAL RATE OWNER/ DEVELOPER DELIVERY DATE
BUILDING ADDRESS
Arlington, Virginia Rosslyn

2011 $47.00 48,542 535,381 535,381 167,023 48,542 0 0 535,381 535,381 N/A 3Q13* FS Monday Properties FS 4Q12 Skanska 167,023 2012 2013 2014
2015
1776 Wilson Boulevard
1812 N Moore Street
Clarendon/Courthouse
2011 $51.75 FS FS Penzance Companies 1Q14* Penzance Companies 1Q14* N/A 2012
2013
2014 196,592 0 92,135 92,135 288,727 92,135 288,727
2015
3001 Washington Boulevard
3003 Washington Boulevard
Ballston
N/A 1Q11 1Q12 1Q12 N/A DARPA The JBG Companies $49.00 - $51.00 FS N/A N/A Virginia Tech Research
2011 144,000 0
2012
2013
2014
2015
900 N Glebe Road
Founders Square 675 N Randolph Street
352,740 0 300,575 152,689 144,000 0 0 653,315 152,689 0
800 N Glebe Road
Rental Rate FS N = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char
Operating Expense and Real Estate Tax Base
Delivery Date *Under Construction as of current quarter
N/A = Not Available
Arlington: Rosslyn, Clarendon/Courthouse, Ballston
NNN = Net of all Operating Expenses and Taxes
22 | Cassidy Turley
RENTAL RATE OWNER/ DEVELOPER 2011 $51.00 FS Lowe Enterprises 3Q13 308,856 284,189 308,856 284,189 0 2012 2013 DELIVERY DATE 2014 2011 N/A N/A Monument Realty 4Q13* 2012 2013 332,084 0 332,084 0 332,084 2014 2015 2011 144,000 0 0 Operating Expense and Real Estate Tax Base FS N NNN = Net of all Operating Expenses and Taxes = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char Delivery Date *Under construction as of current quarter 867,465 2012 820,338 201,231 0 2013 1,176,321 819,570 332,084 2014 288,727 92,135 288,727 2015 0 0 0
BUILDING ADDRESS
Crystal City
1400 Crystal 1400 Crystal Drive
Pentagon City
Monument View 601 S Clark Street
Arlington, VA Summary
Rental Rate
N/A = Not Available
Arlington: Crystal City, Pentagon City

BUILDING ADDRESS
Fairfax County, Virginia Tysons Corner

2011 $55.00 - $60.00 $50.00 - $52.00 MRP Realty, Rockpoint Group 3Q14* FS FS Macerich 1Q14* 2012 2013
2014 524,432 252,834 308,235 141,950 832,667 394,784 832,667
2015
Tysons Tower
7900 Tysons One Place
7940 Jones Branch Drive
Available as of 3Q13 Under Construction as of 3Q13
Merrifield/Dunn Loring
2011 $39.00 - $31.50 FS Edens, Inc. 2Q12
2012 66,846 14,883 66,846 14,883 0
2013
2014
2015
One Mosaic
2910 District Avenue
Under Construction as of 3Q13 Operating Expense and Real Estate Tax Base FS N NNN = Net of all Operating Expenses and Taxes = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char Delivery Date
Rental Rate
N/A = Not Available
*Under construction as of current quarter
Fairfax County: Tysons Corner, Reston, Merrield/Dunn Loring

RENTAL RATE OWNER/ DEVELOPER 2011 $39.00 2Q11 0 330,582 139,200 240,565 120,405 242,272 242,272 110,047 110,047 0 0 35,000 9,972 95,000 0 0 0 0 259,605 362,291 571,147 387,319 387,319 362,291 40,000 1Q12 4Q12 3Q13 3Q13 4Q13* 3Q13 $42.00 FS N/A COPT, Inc. Rubenstein Partners, LP Halle Enterprises I-95 Business Parks Beulah Street LLC II FS FS N/A FS ING Clarion Partners, LLC N/A N/A N/A N/A $32.00 FS ING Clarion Partners, LLC 95,000 2012 2013 2014 2015 DELIVERY DATE
Fairfax County: Springeld, Route 28 South
24 | Cassidy Turley
2011 N/A The Peterson Companies Zumot Real Estate Management 2Q13 2Q13 4Q13* Duke Realty The Peterson Companies 2Q10 104,000 78,000 254,578 0 0 0 358,578 78,000 375,250 375,250 0 $29.50 N/A N/A N/A N/A FS N/A 2012 2013 2014 2015 2011 95,000 0 0 Operating Expense and Real Estate Tax Base FS N = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char Delivery Date *Under construction as of current quarter 387319 2012 637,993 274,488 0 2013 745,897 440,291 375,250 2014 832,667 394,784 832,667 2015 0 0 0 NNN = Net of all Operating Expenses and Taxes
BUILDING ADDRESS
Springfield/Newington
MetroPark VII
6348 Walker Lane
MetroPark VI
6361 Walker Lane
Building I
7770 Backlick Road
Belvoir Corporate Campus
7951-7961 Loisdale Road
Kingstowne Ridge
5680 King Center Drive
Gunston Commerce Center
10718 Richmond Highway
Beulah Street Office II
6420 Beulah Street
Route 28 South
Dulles Discovery North
13870 Air & Space Museum Parkway
Penrose Center III
14399 Penrose Place
The Aerospace Corporation Campus Phase 1
4801 Stonecroft Boulevard
Dulles Discovery South Building DDS
3443 Historic Suly Way
Fairfax County, VA Summary
Rental Rate
N/A = Not Available

BUILDING ADDRESS
Loudoun County, VA Route 28 Corridor North

2011 N/A 0 120,000 0 0 N/A CFC 4Q11 120,000 2012 2013
2014
2015
National Rural Utilities Cooperative Finance 20701 Cooperative Way
Available as of 3Q13 Under Construction as of 3Q13
Loudoun County, VA Summary

2011 120,000 0 0 2012
2013
2014
2015
Rental Rate FS N NNN = Net of all Operating Expenses and Taxes = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char
Delivery Date *Under construction as of current quarter
N/A = Not Available
Loudoun County: Route 28 Corridor North, Route 7, Leesburg/West Loudoun
26 | Cassidy Turley
RENTAL RATE OWNER/ DEVELOPER DELIVERY DATE 2011 144,000 0 0 0 201,231 820,338 2012 2013 1,176,321 819,570 332,084 2014 288,727 92,135 288,727 2015 0 0 0 2011 215,000 0 0 2012 637,993 274,488 0 2013 745,897 440,291 375,250 2014 832,667 394,784 832,667 2015 0 0 0 2011 359,000 0 0 2012 1,458,331 475,719 0 2013 1,922,218 1,259,861 707,334 2014 1,121,394 486,919 1,121,394 2015 0 0 0
BUILDING ADDRESS
Inside the Beltway Summary
Outside the Beltway Summary
Northern Virginia Summary
Northern Virginia Summary
Rental Rate FS N NNN = Net of all Operating Expenses and Taxes = Plus Electric NT = Plus Taxes = Full Service NN = Plus Electric & Char
Delivery Date *Under construction as of current quarter
N/A = Not Available
0.65542
Note: Office condominiums listed above are those with RBA of 20,000 square feet or greater.
Methodology & Denitions

Methodology
Market statistics are calculated from a base building inventory made up of ofce properties deemed to be competitive in the typical Washington, DC ofce market. Generally, owner-occupied and federallyowned buildings are not included. Singletenant buildings and privately-owned buildings in which the federal government leases space are included. Older buildings unt for occupancy or ones that require substantial renovation before tenancy are generally not included in the competitive inventory. Vacant space is dened as space that is available immediately or three months (90 days) after the end of the quarter. Sublet space still occupied by the tenant is not counted as available space.
Explanation of Terms
Total Inventory: The total amount of ofce space (in buildings greater than 10,000 square feet) that can be rented by a Fourth party. New Space Available: First generation, never-occupied ofce space in newly constructed or substantially renovated buildings, being actively marketed by a landlord. Relet Space Available: Second-generation, unoccupied ofce space being actively marketed by a landlord. (Space that is marketed but largely occupied is not counted as available space.) Sublet Space Available: Secondgeneration, unoccupied space being actively marketed by a tenant. (Sublet space that is marketed but still occupied is not counted as available space.) Total Space Available: The sums of new, relet, and sublet space that is unoccupied and being actively marketed.
Vacancy Rate: The amount of unoccupied space (new, relet, and sublet) expressed as a percentage of total inventory. (Total Unoccupied Space divided by Total Inventory.) Absorption: The net change in occupied space between two points in time. (Total occupied space in the previous quarter minus total occupied space in the present quarter, quoted on a net, not gross, basis.) New Space Absorption: The net change in occupied new space between two quarters. Relet/Sublet Absorption: The net change in occupied relet and sublet space between two quarters. Total Absorption: The net change in total occupied (new, relet, and sublet) space between two quarters.
Disclaimer This report and other research materials may be found on our website at www.cassidyturley.com. This is a research document of Cassidy Turley in Washington, DC. Questions related to information herein should be directed to the Research Department at 202-463-2100. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. About Cassidy Turley Cassidy Turley is a leading commercial real estate services provider with more than 3,800 professionals in more than 60 ofces nationwide. With headquarters in Washington, DC, the company represents a wide range of clientsfrom small businesses to Fortune 500 companies, from local non-prots to major institutions. The rm completed transactions valued at $22 billion in 2012, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 23,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate servicesincluding capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information about Cassidy Turley.
Researchers Information
Cassidy Turley Nathan Edwards Director of Research 2101 L Street, NW Suite 700 Washington, DC 20037 Tel: 202-463-2100 Washington, DC Bethany Schneider Research Analyst 2101 L Street, NW Suite 700 Washington, DC 20037 Tel: 202-463-2100 Northern Virginia Philip Brannigan Research Analyst 2101 L Street, NW Suite 700 Washington, DC 20037 Tel: 202-463-2100 Suburban Maryland Urmi Joshi Senior Research Analyst 2101 L Street, NW Suite 700 Washington, DC 20037 Tel: 202-463-2100
We are Cassidy Turley

One of the nations largest commercial real estate services rms, Cassidy Turley enjoys a history of 100 years of successful client relationships. Our team of professionals is dedicated to consistently delivering integrated, tailored solutions that produce superior results and champion your business goals. We become your partner and advocate, and are passionate about achieving long-term success on your behalf.
Real Market Knowledge

In every market where we do business, we have in-depth, local market knowledge that enables us to advocate effectively for our clients Many of our associates have honed their skills in their respective markets for years, and even decades.
Real Connections
Our professionals have deep ties to our communities and our industry, which gives Cassidy Turley a competitive advantage when it comes to really understanding what the market is doingand more importantly where it is heading. In order to better serve our clients needs in EMEA and Asia Pacic, Cassidy Turley is proud to partner with GVA Grimley, a respected market leader in its geographies.
Real Passion
In a partnership with Cassidy Turley, you gain a champion who will be as focused on advocating your goals as you are. We believe in long-term, person-to-person relationships and an unwavering commitment to our clients success.
Real Results
We believe that hands-on problem solving is fundamental, and we are committed to delivering integrated, tailored solutions that provide maximum, measurable outcomes. You can depend on us for world-class expertise, service and execution, wherever you do business.
28 | Cassidy Turley

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Survey of Ofce Space

Northern Virginia Fourth Quarter 2013

Washington, DC Metropolitan Area

DC Metro Ofce Market

Deliveries Vacancy Asking Rates

Top Ten Nonrenewal Lease Transactions 4th Quarter 2013

Northern Virginia Ofce Market

Northern Virginia Ofce Market

Square Feet (millions)

16% 14% 12% 10% 8% 6%

Alexandria Ofce Market

18% 16% 14% 12% 10%

Asking Rates Groundbreakings

Arlington Ofce Market

24% 22% 20% Vacancy Rate 18% 16%

Deliveries Vacancy Asking Rates Groundbreakings

14% 12% 10% 8% 6% 4%

Tysons Corner Ofce Market

-206K 0 16.3% $30.32 0

Square Feet (thousands)

18% 16% 14% 12%

Asking Rates Groundbreakings

Reston/Herndon Ofce Market 4th Quarter 2013 Q4 13 Q3 13 231K 0 13.7% $27.50 0

Reston/Herndon Ofce Market

101K 0 13.3% $28.00 0

Deliveries Vacancy Asking Rates Groundbreakings

Square Feet (thousands)

50/66 Ofce Market 4th Quarter 2013

50/66 Ofce Market

Q3 13 -25K 0 14.8% $27.16 0

-2K 0 14.8% $27.83 0

Asking Rates Groundbreakings

Springeld/Newington Ofce Market

-240K 0 27.2% $30.65 0

Deliveries Vacancy Asking Rates Groundbreakings

Route 28 South Ofce Market

Route 28 South Ofce Market 4th Quarter 2013

Q3 13 -18K 0 16.2% $24.98 0

Square Feet (thousands)

18% Vacancy Rate 16% 14% 12% 10% 8%

Loudoun County Ofce Market

20% 18% 16% 14% 12% 10% 8%

Loudoun County Ofce Market 4th Quarter 2013

Q4 13 Net Absorption Deliveries Vacancy Asking Rates Groundbreakings 1K 0 18.0% $23.64 0

Q3 13 -140K 0 18.0% $23.71 0

Total Inventory 122,183,159 161,686,829 72,684,230 356,554,218

Total Space Available 12,915,422 28,535,111 11,643,188 53,093,721

Vacancy Rate (%) 10.6% 17.6% 16.0% 14.9%

Total Absorption 60,138 (358,300) (84,257) (382,419)

Ofce Availability, Vacancy, and Net Absorption

Trailing 12-Month Data

Historical Year-End Data

Market Statistics by Class

Metro Washington Employment Data

Survey of New Ofce Space by Submarket

Methodology & Denitions

Ofce Availability, Vacancy, and Net Absorption, Fourth Quarter 2013p

Inside the Beltway1

Outside the Beltway

Trailing 12-Month Data

Ofce Vacancy Rate

Total Ofce Absorption

1st Qtr 2013