Us Tour Book

Tour book
Macquarie Office
2, 3 AND 6 MAY 2005

Macquarie Property
The "Smooth Operator tour
1 6 May 2005
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MACQUARIE OFFICE TRUST US PORTFOLIO OVERVIEW....................................................... 3
WACHOVIA FINANCIAL CENTER MIAMI, FL ............................................................................ 6
SUNTRUST CENTER ORLANDO, FL....................................................................................... 11
PROMENADE II ATLANTA, GA ................................................................................................ 16
PASADENA TOWERS PASADENA, CA................................................................................... 21
10 & 30 S WACKER DRIVE CHICAGO, IL................................................................................ 26
BANK ONE CENTER INDIANAPOLIS, IN................................................................................. 31
ONE LIBERTY SQUARE BOSTON, MA.................................................................................... 36
745 ATLANTIC AVENUE BOSTON, MA ................................................................................... 41
700 THIRTEENTH STREET WASHINGTON, D.C. ................................................................... 46
1 & 3 CHRISTINA CENTER WILMINGTON, DE....................................................................... 51
PRESTON COMMONS DALLAS, TX........................................................................................ 56
STERLING PLAZA DALLAS, TX ............................................................................................... 61

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Portfolio Valuation (US$)
Property Location
%
Ownership NLA (sqft) Occupancy
Weighted Ave.
Lease Term 100% Equiv. Per sqft
Wachovia Financial Center Miami, FL 50% 1,145,000 92% 6.4 $299,000,000 $261
SunTrust Center Orlando, FL 75% 641,000 89% 3.6 $139,000,000 $217
Promenade II Atlanta, GA 50% 774,000 97% 7.2 $171,900,000 $222
Pasadena Towers Pasadena, CA 75% 439,000 96% 3.9 $111,000,000 $253
10 & 30 South Wacker Drive Chicago, IL 25% 2,003,000 86% 4.8 $505,000,000 $252
Bank One Center Indianapolis, IN 75% 1,058,000 94% 8.1 $166,500,000 $157
One Liberty Square Boston, MA 100% 148,000 91% 3.4 $35,300,000 $239
745 Atlantic Ave. Boston, MA 100% 170,000 100% 6.2 $59,500,000 $350
700 13th Street Washington, D.C. 100% 244,000 100% 5.4 $125,000,000 $512
1 & 3 Christina Center Wilmington, DE 80% 632,797 100% 10.0 $115,400,000 $182
Preston Commons Dallas, TX 50% 419,000 94% 3.3 $66,000,000 $158
Sterling Plaza Dallas, TX 50% 303,000 89% 2.9 $49,200,000 $162
Total/Weighted Average 7,976,797 92% 5.8 $1,842,800,000 $231

As at 3/31/2005

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Preston Commons
Dallas, TX
Sterling Plaza
Dallas, TX 7
Bank One Center
Indianapolis, IN
10 & 30 South Wacker Drive
Chicago, IL
SunTrust Center
Orlando, FL
Wachovia Financial Center
Miami, FL
Pasadena Towers
Pasadena, CA
Promenade II
Atlanta, GA
745 Atlantic Ave.
Boston, MA
One Liberty Square
Boston, MA
700 13
th
Street
Washington, D.C.
1 & 3 Christina Center
Wilmington, DE

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Miami
14%
Orlando
10%
Chicago
12%
Indianapolis
12%
Boston
9%
Atlanta
8%
Wilmington
9%
Pasadena
8%
Washington, D.C.
12%
Dallas
6%

Note: Based on % ownersh|p and most recent va|uat|on
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Gross Revenue Area Leased
Lessee Market Industry US$ pa % of Total Sqft % of Total
Bank One Chicago, Ind., Financial Services $22,307,011 17% 1,015,434 13%
Dallas, Wilmington
AT&T Atlanta Telecom $6,017,870 5% 465,233 6%
The Cassidy Companies Washington D.C. Pr./Gov. Relations $5,390,187 4% 109,701 1%
SunTrust Bank Orlando Financial Services $5,096,941 4% 262,129 3%
Chicago Mercantile Exchange Chicago Financial Services $4,040,543 3% 458,610 6%
Wachovia Securities Miami, Atlanta, Dallas Financial Services $2,692,204 2% 165,721 2%
Iron Mountain Info. Mgmt. Boston Paper Storage $2,614,520 2% 81,759 1%
Smith Gambrell Atlanta Legal $2,314,696 2% 156,636 2%
AON Pasadena Insurance $2,275,265 2% 77,428 1%
Bryan Cave LLP Washington D.C. Legal $2,165,417 2% 48,622 1%
Total (Based on % Ownership) $54,914,653 42% 2,841,273 36%

Note: Based on % ownersh|p and Gross lncome

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46%
14%
11%
7%
11%
9%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2005 2006 2007 2008 2009 2010 2011
%

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Note 1: A|| f|gures based on Gross lncome, exc|ud|ng park|ng |ncome
Note 2: A|| f|gures based on current |ncome (not |ncreased for future rent rev|ews}
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2005 2006 2007 2008 2009+ TOTAL
Wachovia $359,201 $1,273,747 $2,596,619 $1,705,512 $11,352,969 $17,288,047
SunTrust $287,778 $1,713,943 $1,104,044 $101,577 $8,495,879 $11,703,222
Promenade II $18,148 $1,272,580 $18,226 $49,441 $8,850,341 $10,208,735
Pasadena Towers $29,621 $507,344 $3,016,488 $1,736,019 $4,448,936 $9,738,409
10 & 30 South Wacke $204,760 $190,535 $2,372,693 $528,545 $12,769,500 $16,066,032
Bank One Center $691,255 $2,128,697 $509,717 $1,384,179 $12,345,275 $17,059,123
One Liberty Square $361,161 $873,248 $1,122,588 $865,604 $2,686,789 $5,909,390
745 Atlantic Ave. $0 $0 $1,947,786 $925,758 $4,197,072 $7,070,616
700 13th St $0 $1,816,755 $603,536 $212,651 $9,159,283 $11,792,225
1&3 Christina $344,489 $16,389 $35,992 $0 $13,457,036 $13,853,905
Preston Commons $49,539 $688,587 $452,469 $889,726 $2,522,625 $4,602,946
Sterling Plaza $219,313 $598,410 $413,672 $571,533 $1,437,150 $3,240,077
TOTAL $2,565,263 $11,080,234 $14,193,829 $8,970,546 $91,722,855 $128,532,727
% of Total 2% 9% 11% 7% 71% 100%

Note: Annua| Gross lncome based on % ownersh|p

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Source: M|crosoft Streets & Maps

a=
The trophy-qua||ty Wachov|a F|nanc|a| Oenter comp|ex cons|sts of two bu||d|ngs: a 55-story off|ce
tower that dom|nates the M|am| sky||ne, and a 15-story bu||d|ng w|th bank|ng ha||, reta|| and park|ng
for 1,211 cars. The asset occup|es an ent|re c|ty b|ock |n downtown M|am| and |s |ocated c|ose to
the Bayfront Park metro stat|on. lt features |mpress|ve w|ndow ||nes on a|| four s|des w|th expans|ve
v|ews of the c|ty, waterfront, and a d|verse and prest|g|ous tenant m|x.
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The property |s we|| |eased to a w|de range of tenants |nc|ud|ng Wachov|a Bank, Stee| Hector &
Dav|s, De|o|tte & Touche, ABN Amro, Ernst & Young and B||z|n Sumberg. The downtown market
shou|d benef|t from var|ous h|gh-end res|dent|a| condom|n|um, hote| and reta|| projects |n the
|mmed|ate v|c|n|ty of Wachov|a F|nanc|a| Oenter, promot|ng the area as a good p|ace to ||ve and
work. Hav|ng recent|y reta|ned Stee|, Hector & Dav|s for a further term of 10 years from December
2006, the bu||d|ng has a strong we|ghted average |ease term.

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Property Name Wachovia Financial Center Lease Expiry Schedule (by ownership % and Gross Income)
Location Miami, FL
Year Built/Renovated 1984
Ownership % 50%
Acquisition Price (8-02)
(1)
$269,500,000
Valuation (12-04)
(1)
$299,000,000
Net Rentable Area (sqft)
Office 1,047,370
Retail 98,283
1,145,653
Weighted Average Lease Term 6.4
Building Occupancy 92%
Market Occupancy
(2)
89%
Contracted Income Passing Income (US$)
Total Rental Income $21,903,042 Total Rental Income $19.12 $21,903,042
Total Other Income $2,844,235 Total Parking Income $2,844,235
Less Outgoings Shortfall $3,200,247 Outgoings Shortfall $3,200,247
Net Contracted Income $19 $21,547,030 Net Passing Income $21,547,030
Ave. Gross Rent
(3)
$32
Valuer's Gross Market Rent
(4)
$28-$38 (low, mid & high-rise differentiation)
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11
Gr
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Note: A|| va|ues quoted |n S$ as at March 31, 2005. A|| references to |ncome and rent |nc|ude a|| executed |eases, |nc|ud|ng those w|th future start dates
(1} 100% lnterest
(2} Based on vacancy rate ||sted |n "The Oostar Off|ce Report - F|rst Ouarter 2005"
(3} On occup|ed N|A, exc|ud|ng park|ng |ncome
(4} Based on Gross Market Rents stated |n va|uat|on dated 12-04
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Tenant % NLA SqFt
Weighted Ave.
Expiry Date Business
Wachovia Bank 12% 137,913 Nov-17 Financial Services
Steel Hector & Davis 8% 87,469 Nov-16 Legal
Bilzin Sumberg 7% 76,526 Dec-10 Legal
White & Case LLP 6% 71,041 Nov-15 Legal
Morgan Lewis & Bockius 4% 49,700 May-07 Legal
Berkowitz Dick Pollack 4% 41,915 Apr-17 Financial Services
Ernst & Young 3% 35,335 Oct-07 Financial Services
ABN Amro Bank 3% 32,039 Jun-12 Financial Services
Deloitte & Touche 3% 29,627 Dec-08 Financial Services
Merrill Lynch 2% 23,232 Jul-08 Financial Services
51% 584,797

Note: We|ghted Average Exp|ry Date based on % of Gross lncome


Oomparab|e Bu||d|ngs
Building Name/Address Sub-Market Class Year Built/Renovated RSF % Leased
Bank of America Tower/100 SE 2nd St Downtown A 1987 600,959 89%
Miami Center/201 S Biscayne Blvd Downtown A 1983 782,210 95%
701 Brickell Ave Downtown A 1986 677,667 90%
One Brickell Sq/801 Brickell Ave Downtown A 1985 415,150 88%
Mellon Financial Center/1111 Brickell Ave Downtown A 2000 522,892 93%

Oomparab|e |eases
Building Name/Address Date of Execution RSF Avg. Rent Comment
Bank of America Tower/100 SE 2nd St 1/02/2005 6,868 $33.00 (Gross) Direct deal - 33rd Flr.
Miami Center/201 S Biscayne Blvd 4/01/2005 2,370 $31.00 + elec Direct deal - 8th Flr.
Miami Center/201 S Biscayne Blvd 4/01/2005 9,348 $31.50 + elec Direct deal - 10th Flr.
701 Brickell Ave 11/11/2004 6,350 $34.00 (Gross) Direct deal - 12th Flr.
One Brickell Sq/801 Brickell Ave 3/02/2005 6,954 $33.50 (Gross) Direct deal - 24th Flr.
Mellon Financial Center/1111 Brickell Ave 16/12/2004 3,349 $31.00 (Gross) Direct deal - 17th Flr.
Espirito Santo Plaza/1395 Brickell Ave 31/03/2005 2,241 $33.50 (Gross) Direct deal - 10th Flr.

Oomparab|e Sa|es
Street Address Close Date Price SF Price/SF Cap Rate
350-450 Las Olas Blvd, Ft. Lauderdale, FL Nov-04 $138,000,000 468,843 $294 6.72%
550 Biltmore Way, Coral Gables, FL Nov-04 $35,800,000 161,150 $222 6.07%
1 SE 3rd Ave, Miami, FL Dec-03 $70,000,000 418,404 $167 7.44%
100 SE 2nd Ave, Miami, FL Jun-03 $86,250,000 600,959 $144 7.25%
2 Alhambra Plz, Coral Gables, FL Aug-04 $72,300,000 317,566 $228 6.08%

Source: Oostar

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Source: M|crosoft Streets & Tr|ps

a=
The SunTrust Oenter cons|sts of two O|ass A off|ce bu||d|ngs (one th|rty-story and one seven-story}
p|us a s|x-|eve| park|ng garage. The asset was comp|eted |n 1988 and |s |ocated |n downtown
Or|ando. Arguab|y the prem|er bu||d|ng |n Or|ando, major tenants |nc|ude SunTrust Bank and
Ho||and & Kn|ght.
f=p=
|eas|ng up vacant space and manag|ng tenant ro||over |n the med|um-term rema|ns the key focus.
Ho||and & Kn|ght were recent|y reta|ned for a further term of f|ve years on 50,655 square feet, and
other key tenants are be|ng proact|ve|y targeted. Or|ando OBD current|y has a |ow vacancy and
recent|y exper|enced |ts h|ghest net absorpt|on s|nce 2001.

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Property Name SunTrust Center Lease Expiry Schedule (by ownership % and Gross Income)
Location Orlando, FL
Ownership % 75%
(1)
$129,000,000
Valuation (12-04)
(1)
$139,000,000
Net Rentable Area
Office 639,266
Retail 2,339
641,605
Market Occupancy
(2)
89%
Contracted Income Passing Income
Ave. Gross Rent
(3)
$27
(4)
$24-$25.50
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
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(1} 100% lnterest
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Tenant % NLA SqFt
Weighted Ave.
SunTrust Bank 41% 262,129 Aug-08 Financial Services
Holland & Knight 12% 74,658 Apr-09 Legal
Baker & Hostetler 9% 57,955 Nov-13 Legal
Orange County 8% 49,307 Oct-06 Government
CNL Real Estate Services 5% 29,462 Oct-05 Real Estate
74% 473,511



Lincoln Plaza/300 S Orange Ave Downtown A 2000 246,117 92%
Bank of America/390 N Orange Ave Downtown A 1988 419,267 82%
Capital Plaza II/301 E Pine St. Downtown A 2000 302,838 88%
Regions Plaza/201 S Orange St Downtown A 1982 273,938 85%

Oomparab|e |eases
Bank of America/390 N Orange Ave 1/02/2005 6,106 $22.00 (Gross) Direct deal - 2nd Flr.
Regions Plaza/201 S Orange Ave 14/12/2004 7,448 $25.00 (Gross) Direct deal - 1st Flr.
Lincoln Plaza/300 S Orange Ave 18/11/2004 5,954 $26.00 (Gross) Direct deal - 13th Flr.
Capital Plaza II/301 E Pine St 1/02/2005 4,690 $25.50 (Gross) Direct deal - 10th Flr.

Oomparab|e Sa|es
350-450 Las Olas Blvd, Ft. Lauderdale, FL Nov-04 $138,000,000 468,843 $294 6.72%
550 Biltmore Way, Coral Gables, FL Nov-04 $35,800,000 161,150 $222 6.07%
401 E Jackson St, Tampa, FL Feb-04 $73,586,000 527,237 $140 8.05%
1 SE 3rd Ave, Miami, FL Dec-03 $70,000,000 418,404 $167 7.44%
100 SE 2nd Ave, Miami, FL Jun-03 $86,250,000 600,959 $144 7.25%

Source: Oostar

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a=
Promenade ll |s a trophy c|ass A off|ce tower s|tuated |n the v|brant M|dtown bus|ness d|str|ct of
At|anta, |n c|ose prox|m|ty to amen|t|es and cu|tura| centers such as the Symphony Ha|| and the H|gh
Museum of Art. S|tuated on 3.89 acres, the bu||d|ng offers 774,392 square feet of commerc|a|
accommodat|on over 37 stor|es and an adjacent 2,075 space park|ng garage.
f=p=
Promenade ll |s a h|gh qua||ty asset w|th AT&T |eas|ng 60% unt|| June 2010 and Sm|th Gambre||
occupy|ng over 150,000 square feet unt|| June 2021. The M|dtown D|str|ct |s exper|enc|ng some
deve|opment act|v|ty, wh||e suffer|ng from h|gh vacancy rates. However, there |s a genera| sh|ft by
tenants out of downtown to M|dtown. Promenade ll |s a|so protected by a strong |ease exp|ry prof||e
w|th a |ong we|ghted average |ease term of 7.2 years as at March 31, 2005.

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Property Name Promenade II Lease Expiry Schedule (by % Ownership and Gross Income)
Location Atlanta, GA
Ownership % 50%
(1)
$156,500,000
Valuation (12-04)
(1)
$171,900,000
Net Rentable Area
Office 768,644
Retail 5,748
774,392
Market Occupancy
(2)
81%
Ave. Gross Rent
(3)
$27
(4)
$25
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
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(1} 100% lnterest
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Tenant % NLA SqFt
Weighted Ave.
AT&T 60% 465,233 Jun-10 Telecom
Smith Gambrell 20% 156,636 Jun-21 Legal
Thompson Ventulett (TVS&A) 12% 91,915 Jun-21 Business Services
92% 713,784



Proscenium/1170 Peachtree St. Midtown A 2001 527,523 98%
1100 Peachtree St. Midtown A 1990 556,767 100%
Campanile/1155 Peachtree St. Midtown A 1987 428,755 84%
Atlantic Center Plaza/1180 W. Peachtree St. Midtown A 2001 499,407 89%
One Atlantic Center/1201 W. Peachtree St. Midtown A 1987 1,098,709 75%

Oomparab|e |eases
1100 Peachtree St NE 25/10/2004 21,241 $19.00 (Net) Direct deal on 7th Flr.
Campanile/1155 Peachtree St NE 25/02/2005 8,848 $30.00 (Gross) Direct deal, lower level
The Proscenium/1170 Peachtree St 3/01/2005 25,393 $28.50 (Gross) Direct deal, on 6th Flr.
One Midtown Plaza/1360 Peachtree St NE 1/02/2005 1,219 $18.00 (Gross) Sublease deal, on 8th Flr.

Oomparab|e Sa|es
Pershing Park Plaza Sep-04 $41,300,000 159,926 $258 7.00%
Pinnacle Bldg Aug-04 $145,000,000 424,000 $342 7.60%
The Seibel Bldg Jun-04 $81,875,000 352,710 $232 8.00%
One Capital City Plaza Apr-04 $78,600,000 410,128 $192 7.98%
Atlantic Center Plaza Jan-04 $121,819,000 501,900 $243 8.82%
The Proscenium Dec-03 $118,000,000 527,523 $224 8.00%
3200 Windy Hill Rd SE Oct-04 $125,000,000 693,793 $180 N/A

Source: Oostar

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Pasadena Towers cons|sts of two 9-story O|ass A off|ce bu||d|ngs bu||t |n 1990 and 1991, |ocated |n
the heart of the Pasadena off|ce market, and |s ten m||es outs|de of downtown |os Ange|es.
Pasadena |s a we||-estab||shed market w|th a strong commerc|a| presence and access to the
extens|ve southern Oa||forn|a freeway system. Pasadena Towers |s cons|dered a prem|er asset
w|th|n th|s sub-market.
f=p=
Pasadena Towers |s 96% occup|ed w|th a d|vers|f|ed tenant base, w|th Aon (sub|eas|ng to
Oountryw|de Home |oans} as the |argest occup|er. The asset's prom|nent |ocat|on and prem|er
qua||ty w|th|n the sub-market has a||owed management to successfu||y |ncrease occupancy from
90% to 96%. The Southern Oa||forn|an market |s current|y exper|enc|ng strong renta| growth wh|ch
shou|d prov|de an opportun|ty to |ncrease the current |ncome stream.

h=j=
Property Name Pasadena Towers Lease Expiry Schedule (by % Ownership and Gross Income)
Location Pasadena, CA
Year Built/Renovated 1990, 1991
Ownership % 75%
(1)
$92,000,000
Valuation (12-04)
(1)
$111,000,000
Net Rentable Area
Office 415,399
Retail 23,161
438,560
Market Occupancy
(2)
89%
Ave. Gross Rent
(3)
$32
(4)
$30
0
1,000,000
2,000,000
3,000,000
4,000,000
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(1} 100% lnterest
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Tenant % NLA SqFt
Weighted Ave.
AON 18% 77,428 Jan-07 Insurance
Tokio Marine 13% 57,588 Nov-09 Insurance
Morgan Stanley 6% 24,155 Jun-12 Financial Services
First Quadrant 5% 22,564 May-12 Financial Services
Bank of America 5% 22,296 Jan-08 Financial Services
GSA Hearings & Appeals 4% 19,299 Dec-14 Government
Countrywide Home Loans 3% 14,876 May-08 Financial Services
Zurich American Insurance 3% 13,692 Feb-13 Insurance
New York Life 3% 11,132 Nov-07 Financial Services
Lawyers Title Company 2% 9,569 May-08 Real Estate
62% 272,599



300 North Lake Ave. Pasadena A 1989 283,000 100%
301 North Lake Ave. Pasadena A 1989 208,000 92%
Knoll Center Pasadena/1055 E. Colorado Blvd Pasadena A 2001 176,170 93%
Plaza Las Fuentes I and II/135 N. Los Robles
Ave/385 E. Colorado Pasadena A
I = 1990;
II = 2004
I = 167,000 sf;
II = 255,000 sf
I = 100%;
II = 92%

Oomparab|e |eases
Koll Center/1055 E Colorado Blvd 11/03/2005 1,633 $30.00 (Gross) Direct deal - 2nd Flr.
Gateway Plaza/300 N Lake Blvd 22/11/2004 2,499 $30.00 (Gross) Direct deal - 9th Flr.
Lake Corson Bldg/301 N Lake Blvd 16/02/2005 1,247 $28.20 (Gross) Direct deal - 1st Flr.
Lake Corson Bldg/301 N Lake Blvd 16/02/2005 6,538 $28.20 (Gross) Direct deal - 3rd Flr.

Oomparab|e Sa|es
21271-81 Burbank Blvd
5820 Canoga Ave,
Warner Center, CA Jan-05 $155,000,000 449,369 $345 7.00%
200 S Los Robles, Pasadena, CA Dec-04 $34,240,000 124,636 $275 5.70%
6301 - 6305 Owensmouth Ave
Woodland Hills, CA Dec-04
$132,000,000
(leasehold) 517,943 $255 7.25%
21300 Victory Blvd, Woodland Hills, CA Oct-04 $64,500,000 253,698 $254 7.10%
2040 Main St., Irvine, CA Oct-04 $106,500,000 307,559 $346 N/A
777 S Figueroa St. Jun-04 $250,000,000 1,004,522 $249 6.96%

Source: Oostar

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a=
10 & 30 South Wacker Dr|ve |s |ocated |n the West |oop sub-market, |n the heart of the Oh|cago
OBD. Oons|st|ng of over 2 m||||on square feet across two 40-story towers, the asset occup|es an
ent|re c|ty b|ock a|ong the Oh|cago R|ver, prov|d|ng arguab|y the best |ocat|on |n Oh|cago.
The two towers are connected by a ten story ||nk wh|ch |nc|udes a reta|| concourse and the trad|ng
f|oors of the Oh|cago Mercant||e Exchange (OME}. The OME owns the ||nk v|a condom|n|um
arrangement and a|so occup|es over 400,000 square feet (23% of N|A} throughout the two towers.
f=p=
The bu||d|ng |s O|ass A and |ocated |n a major S f|nanc|a| market, w|th a w|de array of tenants and
the home of the OME. The Oh|cago off|ce market cont|nues to exper|ence new supp|y wh|ch has
|mpacted the current occupancy of the bu||d|ng, however those tenants |n p|ace have a we|ghted
average |ease term of 4.8 years. The ab|||ty to |ease the rema|n|ng vacant space represents an
opportun|ty for growth |n net |ncome through a focused |eas|ng campa|gn and asset management.

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Property Name 10 & 30 South Wacker Drive Lease Expiry Schedule (by % Ownership and Gross Income)
Location Chicago, IL
Year Built/Renovated 1983/1987
Ownership % 25%
Acquisition Price (12-99)* $490,000,000
Valuation (06-04)
(1)
$505,000,000
Net Rentable Area
Office 1,987,186
Retail 16,378
2,003,564
Market Occupancy
(2)
83%
Total Other Income $2,215,698 Total Other Income $2,215,698
Less Outgoings Shortfall $6,332,612 Less Outgoings Shortfall $6,332,612
Net Contracted Income $16 $32,136,121 Net Contracted Income $32,136,121
Ave. Gross Rent
(3)
$37
Gross Market Rent $35-$37
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
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Tenant % NLA SqFt
Weighted Ave.
Chicago Mercantile Exchange 23% 458,610 Oct-08 Financial Services
William Mercer (Mercer Human Resources) 7% 135,379 Feb-09 Consulting
Sachnoff Weaver 6% 120,925 Feb-20 Legal
AM & G 4% 88,368 Nov-09 Financial Services
Navigant Consulting 4% 81,218 May-17 Consulting
Refco 4% 72,913 Nov-08 Financial Services
Dykema Gossett 3% 67,514 Apr-15 Legal
Smith Barney 3% 51,823 Mar-08 Financial Services
Prudential Securities 2% 35,972 Jun-10 Financial Services
Banner & Witcoff 2% 33,945 Apr-13 Legal
57% 1,146,667



Citicorp Center/500 W Madison St. West-Loop A 1987 1,350,000 65%
500 W Monroe St. West-Loop A 1991 952,000 84%
525 W Monroe St. West-Loop A 1983 904,593 84%
100 N Riverside Plz West-Loop A 1990 770,271 95%
UBS Tower/1 N Wacker Dr West-Loop A 2001 1,340,000 97%
Sears Tower/233 S Wacker Dr West-Loop A 1973/1993 3,810,000 91%

Oomparab|e |eases
Citicorp Center/500 W Madison St 6/01/2005 21,450 $19.00 (Net) Direct deal - 39th Flr.
525 W Monroe St 14/01/2005 2,207 $16.00 (Net) Direct deal - 2nd Flr.
525 W Monroe St 14/01/2005 3,751 $15.00 (Net) Direct deal - 5th Flr.
UBS Tower/1 N Wacker Dr 10/02/2005 1,475 $26.00 (Net) Direct deal - 40th Flr.
Sears Tower/233 S Wacker Dr 1/11/2004 10,900 $18.50 (Gross) Sublease deal - 56th Flr.
Sears Tower/233 S Wacker Dr 1/03/2005 11,849 $26.00 (Net) Direct deal - 92nd Flr.

Oomparab|e Sa|es
233 S Wacker Dr Apr-04 $840,000,000 3,810,000 $220 7.75%
555 W Monroe St Nov-04 $115,000,000 420,000 $274 7.00%
333 W Wacker Dr Aug-04 $208,000,000 867,821 $240 6.40%
191 N Wacker Dr Sep-04 $222,000,000 732,000 $303 6.00%

Source: Oostar

_^kh=lkb=`bkqbo==fkaf^k^mlifpI=fk=



a=
Bank One Oenter |s arguab|y the most prom|nent bu||d|ng |n lnd|anapo||s, w|th 1,057,877 square feet
of net rentab|e area |n two bu||d|ngs. The 48-story Bank One Tower |s the ta||er of the two and was
constructed |n 1989. The 12-story O|rc|e Bu||d|ng was comp|eted |n 1958, extens|ve|y refurb|shed |n
1988 and subsequent|y |ntegrated |nto the Bank One Oenter |n 1989. The two bu||d|ngs occupy a
pr|me |ocat|on at the northeast corner of Monument O|rc|e, cons|dered the heart of downtown
lnd|anapo||s.
f=p=
Bank One Oenter |s cons|dered one of the best bu||d|ngs |n the c|ty of lnd|anapo||s, and as such
offers a h|gh |mage to off|ce users. lt |s we|| pos|t|oned to attract a var|ety of tenants due to |ts s|ze
w|th|n the downtown market and the w|de range of rents ava||ab|e. The bu||d|ng |s strong|y
pos|t|oned w|th 94% occupancy and a |ong we|ghted average |ease term of e|ght years as at March
31, 2005, w|th JP Morgan Ohase & Oo. (former|y Bank One, lnd|anapo||s} the major tenant.

h=j=
Property Name Bank One Center Lease Expiry Schedule (by % Ownership and Gross Income)
Location Indianapolis, IN
Ownership % 75%
(1)
$159,200,000
Valuation (06-04)
(1)
$166,500,000
Net Rentable Area
Office 1,017,873
Retail 40,004
1,057,877
Market Occupancy
(2)
87%
Ave. Gross Rent
(3)
$23
Gross Market Rent $19
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
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Tenant % NLA SqFt
Weighted Ave.
Bank One 36% 376,597 Nov-19 Financial Services
Guidant Corp 7% 69,512 Sep-07 Financial Services
Woodard Emhardt 6% 60,569 Jun-08 Healthcare
Ernst & Young 6% 58,628 Jun-13 Legal
Sommer & Barnard 3% 34,536 Aug-05 Business Services
57% 599,842



AUL Tower/1 American Sq Downtown A 1982 691,769 100%
Capital Center South/201 N Illinois St Downtown A 1986 318,978 76%
Fifth Third North Tower/251 N Illinois St Downtown A 1986 327,012 92%
Market Tower/10 W Market St Downtown A 1988 508,508 92%
300 N Meridian St Downtown A 1989 336,000 80%
First Indiana Plaza/135 N Pennsylvania St Downtown A 1988 428,028 65%

Oomparab|e |eases
Capital Center South/201 N Illinios St 14/02/2005 2,418 $20.50 (Gross) Direct deal - 3rd Flr.
Market Tower/10 W Market St 1/03/2005 37,674 $22.68 (Gross) Direct deal - 5th Flr.
300 N Meridian St 8/03/2005 7,875 $19.75 (Gross) Direct deal - 16th Flr.
First Indiana Plaza/135 N Pennsylvania St 31/03/2005 4,621 $19.50 (Gross) Direct deal - 13th Flr.

Oomparab|e Sa|es
10 West Market Street Jan-04 $77,500,000 508,508 $152 8.25%

Source: Oostar

lkb=if_boqv=pnrôb==_lpqlkI=j^=



a=
One ||berty Square |s |ocated |n Boston's F|nanc|a| D|str|ct and |s one of f|ve off|ce bu||d|ngs
cons|dered the jewe| boxes" of Boston. The 13-story bu||d|ng was or|g|na||y comp|eted |n 1926 and
extens|ve|y renovated |n 1981, and |s |ocated |n c|ose prox|m|ty to subway and ra|| transportat|on
fac|||t|es as we|| as major amen|t|es.
f=p=
The asset |s we|| |ocated |n the F|nanc|a| D|str|ct. The Boston |eas|ng market has softened over the
past few years, and as a resu|t One ||berty Square |s over-rented. W|th tenant retent|on and new
|eas|ng rema|n|ng the key focus |n the short-term, |eas|ng w||| prov|de the opportun|ty to |mprove the
current va|ue wh|ch fe|| to S$35 m||||on |n December 2005, ref|ect|ng a 9% y|e|d on pass|ng |ncome.

h=j=
Property Name One Liberty Square Lease Expiry Schedule (by % Ownership and Gross Income)
Location Boston, MA
Ownership % 100%
(1)
$48,365,000
Valuation (12-04)
(1)
$35,300,000
Net Rentable Area
Office 145,735
Retail 2,450
148,185
Market Occupancy
(2)
86%
Total Other Income $0 Total Parking Income $0
Ave. Gross Rent
(3)
$44
(4)
$28
0
500,000
1,000,000
1,500,000
2,000,000
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=
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Tenant % NLA SqFt
Weighted Ave.
Cabot LNG (Tractebel) 16% 23,740 Dec-10 Energy
Brodeur & Partners, Inc. 8% 11,870 Sep-06 Business Services
Berman, DeValerio & Pease 8% 11,826 Oct-09 Legal
Accenture LLP 8% 11,826 Jul-07 Financial Services
Great Hill Partners 8% 11,826 Dec-11 Financial Services
AdvisorTech Corporation 6% 9,395 Jul-05 Financial Services/IT
54% 80,483



176 Federal St. CBD A 1900/1986 82,282 100%
45 Milk St. CBD A 1893/1981 68,831 77%
84 State St. CBD A 1903/1985 120,106 78%
One Winthrop Sq. CBD A 1873/1985 114,343 22%

Oomparab|e |eases
313 Congress St 30/03/2005 8,897 $25.00 (Gross) Direct - South Station
280 Summer St 6/04/2005 6,660 $23.00 (Gross) Direct - South Station
133 Federal St 9/02/2005 3,025 $29.50 (Gross) Direct - Financial District
31 Milk St 23/02/2005 1,436 $27.00 (Gross) Direct - Financial District
84 State St 9/03/2005 3,625 $27.00 (Gross) Direct - Financial District

Oomparab|e Sa|es
10 Milk Street May-04 $56,950,000 226,755 $251 8.50%
343 Congress Street Aug-03 $26,850,000 111,583 $241 7.25%
184 High Street Jul-04 $11,500,000 50,044 $230 7.68%
71-77 Summer Street Jul-04 $11,700,000 59,395 $197 8.88%
99 Summer Street Sep-03 $68,250,000 269,448 $253 7.20%

Source: Oostar

TQR=^qi^kqf`=^sbkrb==_lpqlkI=j^=



a=
745 At|ant|c Avenue |s an 11-story bu||d|ng w|th reta|| space on the ground f|oor and qua||ty
commerc|a| off|ce accommodat|on above. |ocated on the corner of At|ant|c Avenue and Beach
Street |n Boston, the property |s oppos|te South Stat|on, a major transport |nterchange prov|d|ng
connect|ons between suburban, reg|ona|, metropo||tan ra|| serv|ces and the bus network. Th|s asset
shou|d further benef|t from comp|et|on of The B|g D|g", a major reconstruct|on of the arter|a| north-
south expressway through Boston. The property was constructed |n 1989 and cons|sts of 170,114
square feet of net |ettab|e area w|th park|ng for 153 cars.
f=p=
745 At|ant|c Avenue |s 99% occup|ed, w|th the major tenant lron Mounta|n lnformat|on Management
cont|nu|ng to extend |ts |eases and take expans|on space. Th|s he|ps protect returns aga|nst the
softer Boston market |n the med|um term, w|th m|n|ma| |eas|ng r|sk.

h=j=
Property Name 745 Atlantic Avenue Lease Expiry Schedule (by % Ownership and Gross Income)
Location Boston, MA
Ownership % 100%
(1)
$54,650,000
Valuation (12-04)
(1)
$59,500,000
Net Rentable Area
Office 168,231
Retail 1,883
170,114
Market Occupancy
(2)
90%
Total Other Income $720,064 Total Parking Income $720,064
Ave. Gross Rent
(3)
$42
(4)
$35
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
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Tenant % NLA SqFt
Weighted Ave.
Iron Mountain Info. Mgmt. 48% 81,759 Sep-13 Business Services
Key Bank USA 22% 37,094 Feb-07 Financial Services
Brown, Rudnick et al 19% 32,474 Oct-11 Legal
Reznick, Fedder / Iron Mountain 7% 11,095 Mar-14 Business Services
95% 162,422



The Rice Building/155 Federal Street South-Station B 1983 192,000 71%
695 Atlantic Ave. South-Station B 1899/1988 173,013 100%
711 Atlantic Ave. South-Station B 1890/1985 81,000 94%
The Landmark/160 Federal St. South-Station A 1929/1986 352,482 66%

Oomparab|e |eases
313 Congress St 30/03/2005 8,897 $25.00 (Gross) Direct - South Station
280 Summer St 6/04/2005 6,660 $23.00 (Gross) Direct - South Station
133 Federal St 9/02/2005 3,025 $29.50 (Gross) Direct - Financial District
31 Milk St 23/02/2005 1,436 $27.00 (Gross) Direct - Financial District
84 State St 9/03/2005 3,625 $27.00 (Gross) Direct - Financial District

Oomparab|e Sa|es
245 Summer Street, &
7 Water Street Oct-04 $322,500,000 911,249 $354 6.50%
116 Huntington Ave Nov-04 $77,300,000 268,672 $288 6.80%
73 Tremont Street Jul-04 $85,000,000 303,975 $280 7.15%
One Beacon Street Oct-04 $340,000,000 1,100,000 $309 6.80%
Charles Park, Cambridge, MA Feb-05 $115,500,000 365,313 $316 6.80%

Source: Oostar

TMM=qefoqbbkqe=pqobbq==t^pefkdqlkI=aK`K=



a=
700 13th Street |s a trophy-qua||ty off|ce bu||d|ng |ocated |n a pr|me |ocat|on w|th|n the East End sub-
market of Wash|ngton DO, just two b|ocks from the Wh|te House. The 12-story property was
constructed |n 1988 and cons|sts of 243,717 square feet. The bu||d|ng features w|ndow ||nes on a||
four s|des, a rar|ty |n the D.O. market, and |s conven|ent|y |ocated oppos|te the Metro Oenter
Metrora|| Stat|on.
f=p=
The bu||d|ng |s 99% occup|ed and features a stab|e tenant base and |ncome stream. The asset
prov|des qua||ty exposure to Wash|ngton D.O., arguab|y the strongest commerc|a| market |n the S
outs|de of Manhattan. The bu||d|ng recent|y benef|ted |n a 26% |ncrease |n va|ue to S$125 m||||on.

h=j=
Property Name 700 13th Street Lease Expiry Schedule (by % Ownership and Gross Income)
Location Washington, D.C.
Ownership % 100%
(1)
$99,500,000
Valuation (12-04)
(1)
$125,000,000
Net Rentable Area
Office 232,115
Retail 11,602
243,717
Market Occupancy
(2)
93%
Ave. Gross Rent
(3)
$48
(4)
$44-$46
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
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Tenant % NLA SqFt
Weighted Ave.
The Cassidy Companies 45% 109,701 Jan-12 Business Services
Bryan Cave LLP 20% 48,622 Mar-10 Legal
Hyman, Phelps, & Mcnamara 11% 27,219 Dec-05 Legal
76% 185,542


900 7th St. East-End A 2004 350,155 66%
701 13th St. East-End A 2003 421,264 84%
607 14th St. East-End A 1990 260,779 82%
901 E St. East-End A 1989 249,000 99%
1350 Eye St. East-End A 1989 342,014 90%
1401 H St. East-End A 1992 345,781 96%

Oomparab|e |eases
1625 Eye Street 1st qtr 2005 68,598 $44.00 (Gross) NA
1700 K Street 1st qtr 2005 19,838 $46.25 (Gross) NA
1667 K Street 1st qtr 2005 24,748 $47.75 (Gross) NA
975 F Street 1st qtr 2005 90,000 $43.00 (Net) NA
616 H Street 1st qtr 2005 53,740 $40.56 (Gross) NA
900 7th Street 1st qtr 2005 9,882 $43.00 (Gross) NA
1025 F Street 1st qtr 2005 52,000 $50.50 (Gross) NA
901 New York Ave 1st qtr 2005 75,528 $35.50 (Net) NA
607 14th Street 1st qtr 2005 23,626 $46.00 (Gross) NA

Oomparab|e Sa|es
333 11th St. NW/Lincoln Square Mar-05 $270,000,000 404,000 $668 N/A
555 11th Street Mar-05 $241,776,000 368,000 $657 5.50%
1875 K Street Mar-05 $115,388,760 187,624 $615 5.60%
1001 Pennsylvania Ave NW Dec-04 $461,300,000 758,796 $608 5.70%
601 13th Street (50% interest)/Homer Bldg Apr-05 $105,200,000 448,426 $469 6.50%
1425 New York Ave $150,000,000 278,251 $539 6.00%
701 13th Street $240,086,280 421,204 $570 6.50%

Source: Oostar

N=C=P=èofpqfk^=`bkqbo==tfijfkdqlkI=ab=

NCP=èofpqfk^=`bkqbo==tfijfkdqlkI=ab=

=
=

a=
1 & 3 Ohr|st|na Oenter cons|st of two O|ass A bu||d|ngs |n the W||m|ngton OBD, a sub-market of
greater Ph||ade|ph|a. The state of De|aware has attracted substant|a| bus|ness act|v|ty to W||m|ngton,
|n part|cu|ar f|nanc|a| |nst|tut|ons seek|ng to benef|t from favourab|e tax |aws and easy access to
Wash|ngton D.O. and New York. Oonstructed |n 1990 and 1988 respect|ve|y, 1 & 3 Ohr|st|na Oenter
offer 632,797 square feet of net |ettab|e area and park|ng for 1,430 cars.
f=p=
JP Morgan Ohase & Oo. (former|y Bank One, De|aware} occupy 91% of the N|A under staggered
|ong-term |eases, and have been progress|ve|y bu||d|ng the|r occupat|on of the bu||d|ng s|nce 1988.
The propert|es are fu||y occup|ed w|th a m|n|ma| |eas|ng r|sk over the short-to-med|um term, and on
that bas|s shou|d cont|nue to prov|de a strong y|e|d and so||d cashf|ows. The propert|es were
purchased on a 9% market y|e|d.

h=j=
Property Name 1&3 Christina Center Lease Expiry Schedule (by % Ownership and Gross Income)
Location Wilmington, DE
Year Built/Renovated 1988, 1990
Ownership % 80%
Acquisition Price (Dec-03)
(1)
$114,600,000
Valuation (07-03)
(1)
$115,400,000
Net Rentable Area
Office 632,134
Retail 663
632,797
Market Occupancy
(2)
86%
Ave. Gross Rent
(3)
$27
Gross Market Rent
(4)
$27
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
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Tenant % NLA SqFt
Weighted Ave.
Bank One 91% 572,908 Dec-15 Financial Services
Brandywine Asset Management 5% 30,050 Dec-10 Real Estate
Amex Credit Corp 1% 8,158 Jun-05 Financial Services
Nobel Ed Dynamics 1% 6,575 Jun-05 Education
Metropolitan Fibre 1% 5,932 Oct-14 Telecom
99% 623,623



City Center @ Wilmington/1000 N West St CBD A 1969/2000 410,000 98%
Hercules Plaza/1313 N Market St CBD A 1982 580,287 100%
Chase Manhattan Centre/1201 N Market St CBD A 1988 438,843 96%
Wilmington Trust Center/1100 N Market St CBD A 1985 349,000 100%
300 Delaware Ave CBD A 1970/2000 317,465 89%
919 N Market St CBD A 1965/2002 220,358 92%
1100 N King St CBD A 1984 300,000 100%

Oomparab|e |eases
824 N Market St 15/03/2005 2,888 $21.75 (Gross) Direct deal - 8th Flr.
1220 N Market St 2/11/2004 7,383 $24.50 (Gross) Direct deal - 8th Flr.
1007 Orange St 26/10/2004 20,504 $23.00 (Gross) Direct deal - 1st Flr.
1007 Orange St 26/10/2004 32,000 $17.50 (Gross) Sublease deal - 3rd Flr.

Oomparab|e Sa|es
1201 N Market St May-02 $80,500,000 438,843 $183 9.88%
919 N Market St Feb-02 $21,100,000 220,358 $96 10.00%
824-834 N Market St Oct-03 $31,900,000 220,032 $145 8.00%

Source: Oostar

mobpqlk=`ljjlkp==aîi^pI=qu=



a=
Preston Oommons cons|sts of three m|d-r|se off|ce bu||d|ngs, two e|ght-story bu||d|ngs bu||t |n 1986
and the ten-story Bank One bu||d|ng bu||t |n 1957. They are |ocated |n the Da||as sub-market of
Preston Oenter. The East and West bu||d|ngs offer |arge f|oor p|ates and are current|y 94% |eased.
f=p=
The bu||d|ngs are |eased to a w|de m|x of sma|| tenants, the |argest of wh|ch are JP Morgan Ohase &
Oo. (former|y Bank One, Texas} and Wachov|a Secur|t|es. The bu||d|ng has recent|y been reva|ued
up by 26% to S$66.0 m||||on and contracts have been exchanged for the sa|e of the bu||d|ng.

h=j=
Property Name Preston Commons Lease Expiry Schedule (by % Ownership and Gross Income)
Location Dallas, TX
Year Built/Renovated 1986(East/West), 1957 (Bank)
Ownership % 50%
(1)
$52,500,000
Valuation (11-04)
(1)
$66,000,000
Net Rentable Area
Office 421,754
Retail 0
421,754
Market Occupancy
(2)
80%
Ave. Gross Rent
(3)
$23
(4)
$22-$23
0
500,000
1,000,000
1,500,000
2,000,000
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Tenant % NLA SqFt
Weighted Ave.
Bank One Texas, N.A. 14% 58,680 Sep-09 Financial Services
Wachovia Securities 7% 27,472 Oct-07 Financial Services
Advanced Business Technology 6% 24,169 Oct-09 Business Services
Sarofim Realty Advisors 5% 21,375 Sep-12 Real Estate
Chief Oil & Gas 5% 19,057 Sep-07 Energy
Malone Mortgage 3% 14,559 Sep-09 Financial Services
RCST, Inc. 3% 14,042 May-10 Business Services
RFA Acquisition 3% 13,869 Jan-09 Financial Services
Ogletree Deakins Nash 3% 11,369 Jan-11 Legal
T. Boone Pickens 3% 11,254 Apr-07 Energy
51% 215,846



Sherry Lane Place/5956 Sherry Ln Preston Center A 1983 286,426 92%
5950 Sherry Lane Preston Center A 1999 196,997 87%
Guaranty Bank Tower/8333 Douglas Ave Preston Center A 1975/1995 251,173 94%
Preston Sherry Plaza/8201 Preston Rd Preston Center A 1987 147,008 89%
The Berkshire at Preston Center/5950 Berkshire
Ln Preston Center A 1984/1998 184,794 93%

Oomparab|e |eases
One Preston Center/8222 Douglas Ave 11/02/2005 2,055 $20.00+elec 8th Flr.
Commercial Tower/5944 Luther Ln 22/12/2004 2,550 $22.50 (Gross) 8th Flr.
Preston Centre Plaza/8214 Westchester Dr 26/01/2005 3,490 $23.50 (Gross) 4th Flr.

Oomparab|e Sa|es
7160 Dallas Parkway, Plano, TX Sep-04 $66,350,000 360,823 $184 7.80%
8333 Douglas Ave, Dallas, TX Aug-04 $37,000,000 253,712 $146 8.13%
2100 McKinney Ave, Dallas, TX Jul-04 $85,680,000 359,155 $239 8.10%
4514 Cole Ave, Dallas, TX May-04 $18,800,000 163,169 $115 8.50%
2911 Turtle Creek Blvd, Dallas, TX Oct-03 $31,200,000 177,296 $176 8.10%
14185 Dallas, Dallas, TX Nov-04 $88,500,000 412,521 $215 7.52%

Source: Oostar

pqboifkd=mi^w^==aîi^pI=qu=



a=
Ster||ng P|aza |s a 19-story O|ass A off|ce bu||d|ng |ocated |n Preston Oenter, one of the strongest
sub-markets |n Da||as. Oonstructed |n 1984, the property cons|sts of 304,331 square feet and w|th
park|ng accommodat|on for 996 cars.
f=p=
Ster||ng P|aza |s 89% occup|ed and |eased to a var|ety of sma|| tenants. The property was reva|ued
|n December 2004 by 28% to S$49 m||||on and contracts have been exchanged for the sa|e of the
bu||d|ng.

h=j=
Property Name Sterling Plaza Lease Expiry Schedule (by % Ownership and Gross Income)
Location Dallas, TX
Ownership % 50%
(1)
$38,500,000
Valuation (11-04)
(1)
$49,200,000
Net Rentable Area
Office 302,517
Retail 1,814
304,331
Market Occupancy
(2)
80%
Ave. Gross Rent
(3)
$24
(4)
$23
0
200,000
400,000
600,000
800,000
1,000,000
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Tenant % NLA SqFt
Weighted Ave.
Sammons Corporation 7% 20,340 Dec-12 Financial Services
John McStay Investment 7% 19,912 Apr-11 Financial Services
McGriff, Seibel & Williams 6% 17,136 Jun-07 Insurance
Point Group, Inc. 5% 14,044 Oct-07 Business Services
Olympic Commercial Realty 3% 10,225 Nov-06 Real Estate
Guida, Slavich & Flores 3% 9,039 May-05 Legal
Budge & Turnage, Inc. 2% 7,154 Nov-08 Financial Services
Holman Robertson Eldridge 2% 7,030 Jan-06 Legal
Tyler Technologies, Inc. 2% 6,726 Jun-06 IT
Eagle Oil & Gas Company 2% 6,301 Nov-08 Energy
39% 117,907


Sherry Lane Place/5956 Sherry Ln Preston Center A 1983 286,426 92%
5950 Sherry Lane Preston Center A 1999 196,997 87%
Guaranty Bank Tower/8333 Douglas Ave Preston Center A 1975/1995 251,173 94%
Preston Sherry Plaza/8201 Preston Rd Preston Center A 1987 147,008 89%
The Berkshire at Preston Center/5950 Berkshire
Ln Preston Center A 1984/1998 184,794 93%

Oomparab|e |eases
One Preston Center/8222 Douglas Ave 11/02/2005 2,055 $20.00+elec 8th Flr.
Preston Centre Plaza/8214 Westchester Dr 26/01/2005 3,490 $23.50 (Gross) 4th Flr.

Oomparab|e Sa|es
7160 Dallas Parkway, Plano, TX Sep-04 $66,350,000 360,823 $184 7.80%
8333 Douglas Ave, Dallas, TX Aug-04 $37,000,000 253,712 $146 8.13%
2100 McKinney Ave, Dallas, TX Jul-04 $85,680,000 359,155 $239 8.10%
4514 Cole Ave, Dallas, TX May-04 $18,800,000 163,169 $115 8.50%
2911 Turtle Creek Blvd, Dallas, TX Oct-03 $31,200,000 177,296 $176 8.10%
14185 Dallas, Dallas, TX Nov-04 $88,500,000 412,521 $215 7.52%

Source: Oostar

Th|s document has been prepared by Macquar|e Off|ce Management ||m|ted ABN 75 006 765 206
(MOM|} for genera| |nformat|on purposes on|y, w|thout tak|ng |nto account any potent|a| |nvestors'
persona| object|ves, f|nanc|a| s|tuat|on or needs. P|ease cons|der your own f|nanc|a| s|tuat|on, object|ves
and needs and obta|n f|nanc|a|, |ega| and/or taxat|on adv|ce before mak|ng any |nvestment dec|s|on.
Past performance |nformat|on prov|ded |n th|s document |s not a re||ab|e |nd|cat|on of future
performance.

Due care and attent|on has been exerc|sed |n the preparat|on of forecast |nformat|on. However,
forecasts, by the|r very nature, are subject to uncerta|nty and cont|ngenc|es and actua| resu|ts may vary
from any forecasts prov|ded.

MOM| rece|ves fees for operat|ng the Macquar|e Off|ce Trust (MOF}, wh|ch are ca|cu|ated by reference
to the va|ue of the assets and performance of MOF. Ent|t|es w|th|n the Macquar|e Bank Group may a|so
rece|ve fees for prov|d|ng resources to MOF.
For more deta|| on fees, see our |atest annua| report. To contact us, ca|| 1300 365 585 (|oca| ca|| cost}.

Wh||st care has been taken |n re|at|on to the accuracy of contents of th|s document, no warranty as to
accuracy or correctness |s g|ven nor shou|d one be |mp||ed. Ne|ther th|s document nor any of |ts
contents may be used for any purpose w|thout the pr|or consent of MOM|.

MOM| |s not an author|sed depos|t-tak|ng |nst|tut|on for the purposes of the Bank|ng Act (Oth} 1959,
and MOM|'s ob||gat|ons do not represent depos|ts or other ||ab|||t|es of Macquar|e Bank ||m|ted ABN
46 008 583 542 (MB|}. MB| prov|des a ||m|ted $17.5 m||||on guarantee to the Austra||an Secur|t|es and
lnvestments Oomm|ss|on |n respect of MOM|'s Oorporat|ons Act ob||gat|ons as a respons|b|e ent|ty of
managed |nvestment schemes. MB| does not otherw|se prov|de assurance |n respect of the ob||gat|ons
of MOM|.

Macquar|e Group

2005 CB Richard Ellis, Inc.
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used to generate National Vacancy and
Availability Index statistics published by CB Richard Ellis Corporate Communications Department or CB Richard Ellis research and Econometric
Forecasting unit, Torto Wheaton Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we
have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and
completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of
the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
MarketView | Miami Office
Miami Office
First Quarter 2005
MarketView
Miami-Dades office market closed first
quarter 2005 with an optimistic outlook for
future quarters to follow. Decreased
vacancy rates from first quarter 2004,
coupled with moderate absorption, and an
increase in rental rates continue to aid the
office sector. Since 2004 asking rates have
increased by 2.3 percent points to a current
rate of $24.64-psf fsg, while vacancy rates
have decreased by approximately 8
percentage points to its current of 14.31
percent.
One explanation for this trend is a lack of
new office construction in Miami. With a
lack of available land, the city of Miami
carries the moniker as being a Mini-
Manhattan, and for the past 10 years has
used much of its available parcels for
mixed-use buildings. Mixed use buildings
are defined as any combination of retail,
office, and residential space. Since 1995,
according to a report published by the City
of Miami, 12 buildings, totaling 4,125
residential units have erected within the
CBD corridor. There are an additional 12
buildings under construction that will deliver
another 5,777 residences into the
submarket. Also proposed is an additional
55 mixed use buildings intended for the
CBD submarket.
Aside from the similarities in lack of land
with Manhattan, Miami is revitalizing its
CBD in an attempt to make itself a 24/7
community. During the construction
process, and upon completion of these
mixed-use buildings, the CBD will reach a
point where the development of new offices
will almost have to occur in order to handle
the influx of people looking for employment
in the CBD. In the interim, look for
continuing decreases in vacancies and
availabilities, while asking rates steadily rise
as available office space gradually
decreases.
Approximately 670,000(sf) of leasing
activity took place to begin 2005; a pace
which enables this year to exceed last years
lofty totals. The non-CBD submarkets
represented 81 percent of this activity;
whereas its CBD counterpart accounted for
the remaining 19 percent. Analogous to
4Q04 Airport West continues to lead
Miami-Dade in all leasing activity --
representing 30 percent of first quarter
activity.
QUICK STATS
Vacancy 14.31%
Asking Rent $24.64
Absorption* 154,254
Construction 0
* The arrows are trend indicators over the specified time period and do not
represent a positive or negative value. (e.g., absorption could be negative,
but still represent a positive trend over a specified period.)
Change f r om l ast
Current Yr. Qtr.
HOT TOPICS
With no new office construction on the
immediate horizon, coupled with
lowering vacancy/availability rates, look
for overall asking rates to increase and
rental concessions to become less
favorable.
Lower interest rates continue to drive the
sales market as investors continue to look
for office and multi-housing opportunities
before rates increase.
Miamis renaissance as a 24/7 living
community.
AVERAGE ASKING LEASE RATE
Rate determined by multiplying the asking net lease rate for each
building by its available space, summing the products, then dividing by
the sum of the available space with net leases for all buildings in the
summary.
NET LEASES
Includes all lease types whereby the tenant pays an agreed rent plus
most, or all, of the operating expenses and taxes for the property,
including utilities, insurance and/or maintenance expenses.
MARKET COVERAGE
Includes all competitive office buildings 30,000 square feet and greater
in size.
NET ABSORPTION
The change in occupied square feet from one period to the next.
NET RENTABLE AREA
The gross building square footage minus the elevator core, flues, pipe
shafts, vertical ducts, balconies, and stairwell areas.
OCCUPIED SQUARE FEET
Building area not considered vacant.
UNDER CONSTRUCTION
Buildings which have begun construction as evidenced by site
excavation or foundation work.
AVAILABLE SQUARE FEET
Available Building Area which is either physically vacant or occupied.
AVAILABILITY RATE
Available Square Feet divided by the Net Rentable Area.
VACANT SQUARE FEET
Existing Building Area which is physically vacant or immediately
available.
VACANCY RATE
Vacant Building Feet divided by the Net Rentable Area.
NORMALIZATION
Due to a reclassification of the market, the base, number and square
footage of buildings of previous quarters have been adjusted to match
the current base. Availability and Vacancy figures for those buildings
have been adjusted in previous quarters.
MIAMI SUBMARKET MAP
VACANCY RATE VS. LEASE RATE
Vacancy Rate 14.31%
Lease Rate $24.64
BRICKELL
777 Brickell Ave
Suite 1000
Miami, FL 33143
305.374.1000
LOCAL OFFICES
WEST DADE
8350 NW 52nd Ter
Suite 101
Miami, FL 33166
305.599.8811
FT. LAUDERDALE
One E Broward Blvd
Suite 915
Ft. Lauderdale, FL 33301
954.462.5655
BOCA RATON
5355 Town Center Rd
Suite 701
Boca Raton, FL 33486
561.394.2100
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2
Q

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4
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0
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$23
$24
$25
$

p
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S
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u
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e

F
e
e
t
CB Richard Ellis | Miami Office MarketView| 1Q 2005 CB Richard Ellis | Miami Office MarketView| 1Q 2005
2005 CB Richard Ellis, Inc. 2005 CB Richard Ellis, Inc.
Market
Rentable
Area
Vacancy
Rate %
YTD Net
Absorption
SF
Under
Construction SF
Average Asking
Lease Rate fs
gross $ SF/YR
Availability
Rate %
UNEMPLOYMENT RATE
Miami 4.8%
Florida 4.45%
US 5.4%
The national unemployment rate remained unchanged from
the previous quarter coming in at a rate of 5.4 percent.
According to the Bureau of Labor Statistics, Floridas
unemployment rate experienced a .05 percentage point
decrease from the 4.5 percent unemployment rate stated last
quarter. The Tri-County unemployment rate showed signs of
improvement in two counties. Miami-Dades rate of 4.8
percent is a 1.0 percentage point decrease from the fourth
quarter, whereas Palm Beach County reported a 0.8
percentage point dip to 4.6 percent. Broward County
experienced a 0.2 percentage point increase bringing
Browards unemployment level to 4.5 percent.
***The Bureau of Labor Statistics is using a new statistical database,
which according to one Labor Statistic employee is a new
econometric technique creating a more sophisticated analysis. As a
result, statistical differences, albeit however large or minimal, need
another quarter to readjust in order to accurately gauge the
economic health of South Florida.
VACANCY/
AVAILABILITY/
NET ABSORPTION
Vacancy 14.1%
Availability 16.8% Absorption
154k
Noteworthy lease transactions contributing to the continuing declines in
vacancy and availability rates were found both in the CBD and the non-
CBD submarkets. Airport West, the most highly absorbed submarket,
witnessed Televisa International and MapFre Insurance Co. of Florida
agree to occupy 21,000(sf) and 19,467(sf) respectively. The CBD
submarkets, particularly Downtown experienced much activity as well.
One of the more notable transactions was Broad & Cassell, P.A. who
agreed to occupy approximately 23,346(sf) at One Biscayne Tower. Class
A office space makes up approximately 42.0 percent of the overall
vacancy rate, while Class B makes up 42.0 percent. Class C accounts for
15.0 percent of unoccupied inventory. Absorption rates began 2005 as
they concluded 2004; that is in a positive, but conservative direction.
Average asking rental rates in Miami-Dade continue to increase. The
average asking rental rate increased 2.3 percent to $24.64 per square
feet (psf) full-service gross (fsg) rate reported last year at this time. With
vacancies down, sublease space at a premium, and no new office
product being delivered in the immediate future, experts concur that
rentals rates will only continue to rise. However, in 1Q05 Class A space
experienced a 5.9 percent decrease from the $28.59-psf fsg reported in
the fourth quarter of 2004. Class Bs rental rate of $23.68-psf fsg is a
8.1 percent increase, while Class C space saw a rise of 2.7 percent to
$19.56 from the asking rate in 4Q04.
AVERAGE ASKING LEASE RATES
CONSTRUCTION ACTIVITY
The Miami-Dade office market has had conservative construction levels
for the past 18 months. Recent constructions trends have been to build
mixed-use facilities; such as The Espirito Santo at 1395 Brickell or the
Millennium Tower at 1441 Brickell. Completed in 2004 and 2003 these
projects are close to being fully absorbed as evidenced by 85 and 100
percent of its office space leased respectively. Additional trends have
been office condominiums. Last quarter, the 43,839(sf) Aventura
Bayview Corporate Center office condo, located in the Aventura
submarket, was competed. With respect to the Central Business District,
Latitude One, a 44-story mixed-use facility, consisting of some office
condos, will be available in October 2006. Additionally, 1110 and
1000 Brickell have plans to be converted into office condominiums.
MARKET OUTLOOK
The Miami-Dade office market continues to display strong market
characteristics. Either through lease renewals, expansions, or entirely new
lease transactions, the Miami-Dade office market is witnessing a decrease
in vacancies and availabilities, and an increase in overall asking rates.
With no new construction projects immediately scheduled, the once tenant
favorable market is quickly diminishing. It is projected that market
conditions in 2005 will continue to tighten, and the first quarter is just a
conservative forecast.
These strong market fundamentals have contributed to strong investor
interest in all of the Miami-Dade submarkets. Buyers throughout the
world are vying to increase their presence in Miami-Dade.
TOP MIAMI LEASE TRANSACTIONS
Size (Sq. Ft.) Tenant Address
57,500 CitiBank Doral Corporate Center I
39,386 Bank of America 55 Alhambra Plaza
28,200 Greenberg Traurig, P.A. 8400 NW 36
th
Street
TOP MIAMI SALES TRANSACTIONS
Size (Sq. Ft.) Buyer Address Price
286,341 Americas Capital Partners 80 SW Eight Street $50.2 Million
243,000 Flagler Development Doral Concourse $41.0 Million
159,384 2121 Ponce Lllp 2121 Ponce de Leon $27.1 Million
-30%
-20%
-10%
0%
10%
20%
30%
Q
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3
Q
4

0
3
Q
1

0
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V
a
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/
A
v
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a
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(2)
(1)
0
1
2
3
4
5
6
N
e
t

A
b
s
o
r
p
t
i
o
n
$0
$5
$10
$15
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$25
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$35
Q
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Class A Average Asking Lease Rate $26.90
Class B/C Avg. Asking Lease Rate $21.88
0
100
200
300
400
500
600
700
800
900
Q
3
0
3
Q
4
0
3
Q
1
0
4
Q
2
0
4
Q
0
3
0
4
Q
4
0
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Q
1

0
5
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q
3

0
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Q
4

0
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5
Airport West 9,458,244 15.23% 76,662 $21.35 19.35%
Aventura 977,833 15.20% 3,557 ---- $27.99 16.05%
Biscayne Blvd. 853,975 17.90% -4,672 $22.25 17.33%
Brickell 5,646,125 16.57% -30,765 $28.41 19.22%
Coconut Grove 1,041,202 17.90% -54,497 $29.11 23.51%
Coral Gables 5,464,297 12.57% -30,978 $27.75 14.76%
Downtown 6,790,990 13.60% 175,019 $26.51 16.39%
Kendall 2,686,245 4.42% -20,904 $22.07 5.49%
Miami Beach 1,849,179 20.98% 8,513 $28.86 23.88%
Miami Lakes 1,223,916 11.91% 2,022 $19.05 13.03%
North Miami 1,086,797 7.70% 23,054 $17.70 8.17%
South Dade 584,576 37.26% 0 $22.67 43.07%
Residual 1,294,575 6.79% 7,243 $16.03 7.70%
TOTAL 38,957,954 14.31% 154,254 ---- $24.64 16.88%
CB Richard Ellis | Miami Office MarketView| 1Q 2005 CB Richard Ellis | Miami Office MarketView| 1Q 2005
Market
Rentable
Area
Vacancy
Rate %
YTD Net
Absorption
SF
Under
Construction SF
Average Asking
Lease Rate fs
gross $ SF/YR
Availability
Rate %
UNEMPLOYMENT RATE
Miami 4.8%
Florida 4.45%
US 5.4%
The national unemployment rate remained unchanged from
the previous quarter coming in at a rate of 5.4 percent.
According to the Bureau of Labor Statistics, Floridas
unemployment rate experienced a .05 percentage point
decrease from the 4.5 percent unemployment rate stated last
quarter. The Tri-County unemployment rate showed signs of
improvement in two counties. Miami-Dades rate of 4.8
percent is a 1.0 percentage point decrease from the fourth
quarter, whereas Palm Beach County reported a 0.8
percentage point dip to 4.6 percent. Broward County
experienced a 0.2 percentage point increase bringing
Browards unemployment level to 4.5 percent.
***The Bureau of Labor Statistics is using a new statistical database,
which according to one Labor Statistic employee is a new
econometric technique creating a more sophisticated analysis. As a
result, statistical differences, albeit however large or minimal, need
another quarter to readjust in order to accurately gauge the
economic health of South Florida.
VACANCY/
AVAILABILITY/
NET ABSORPTION
Vacancy 14.1%
Availability 16.8% Absorption
154k
Noteworthy lease transactions contributing to the continuing declines in
vacancy and availability rates were found both in the CBD and the non-
CBD submarkets. Airport West, the most highly absorbed submarket,
witnessed Televisa International and MapFre Insurance Co. of Florida
agree to occupy 21,000(sf) and 19,467(sf) respectively. The CBD
submarkets, particularly Downtown experienced much activity as well.
One of the more notable transactions was Broad & Cassell, P.A. who
agreed to occupy approximately 23,346(sf) at One Biscayne Tower. Class
A office space makes up approximately 42.0 percent of the overall
vacancy rate, while Class B makes up 42.0 percent. Class C accounts for
15.0 percent of unoccupied inventory. Absorption rates began 2005 as
they concluded 2004; that is in a positive, but conservative direction.
Average asking rental rates in Miami-Dade continue to increase. The
average asking rental rate increased 2.3 percent to $24.64 per square
feet (psf) full-service gross (fsg) rate reported last year at this time. With
vacancies down, sublease space at a premium, and no new office
product being delivered in the immediate future, experts concur that
rentals rates will only continue to rise. However, in 1Q05 Class A space
experienced a 5.9 percent decrease from the $28.59-psf fsg reported in
the fourth quarter of 2004. Class Bs rental rate of $23.68-psf fsg is a
8.1 percent increase, while Class C space saw a rise of 2.7 percent to
$19.56 from the asking rate in 4Q04.
The Miami-Dade office market has had conservative construction levels
for the past 18 months. Recent constructions trends have been to build
mixed-use facilities; such as The Espirito Santo at 1395 Brickell or the
Millennium Tower at 1441 Brickell. Completed in 2004 and 2003 these
projects are close to being fully absorbed as evidenced by 85 and 100
percent of its office space leased respectively. Additional trends have
been office condominiums. Last quarter, the 43,839(sf) Aventura
Bayview Corporate Center office condo, located in the Aventura
submarket, was competed. With respect to the Central Business District,
Latitude One, a 44-story mixed-use facility, consisting of some office
condos, will be available in October 2006. Additionally, 1110 and
1000 Brickell have plans to be converted into office condominiums.
MARKET OUTLOOK
The Miami-Dade office market continues to display strong market
characteristics. Either through lease renewals, expansions, or entirely new
lease transactions, the Miami-Dade office market is witnessing a decrease
in vacancies and availabilities, and an increase in overall asking rates.
With no new construction projects immediately scheduled, the once tenant
favorable market is quickly diminishing. It is projected that market
conditions in 2005 will continue to tighten, and the first quarter is just a
conservative forecast.
These strong market fundamentals have contributed to strong investor
interest in all of the Miami-Dade submarkets. Buyers throughout the
world are vying to increase their presence in Miami-Dade.
TOP MIAMI LEASE TRANSACTIONS
57,500 CitiBank Doral Corporate Center I
39,386 Bank of America 55 Alhambra Plaza
28,200 Greenberg Traurig, P.A. 8400 NW 36
th
Street
TOP MIAMI SALES TRANSACTIONS
Size (Sq. Ft.) Buyer Address Price
286,341 Americas Capital Partners 80 SW Eight Street $50.2 Million
243,000 Flagler Development Doral Concourse $41.0 Million
159,384 2121 Ponce Lllp 2121 Ponce de Leon $27.1 Million
-30%
-20%
-10%
0%
10%
20%
30%
Q
3

0
3
Q
4

0
3
Q
1

0
4
Q
2

0
4
Q
3

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Q
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%

V
a
c
a
n
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y
/
A
v
a
il
a
b
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(2)
(1)
0
1
2
3
4
5
6
N
e
t

A
b
s
o
r
p
t
i
o
n
$0
$5
$10
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$25
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$35
Q
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Q
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2

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3

0
4
Q
4

0
4
Q
1

0
5
Class A Average Asking Lease Rate $26.90
Class B/C Avg. Asking Lease Rate $21.88
0
100
200
300
400
500
600
700
800
900
Q
3
0
3
Q
4
0
3
Q
1
0
4
Q
2
0
4
Q
0
3
0
4
Q
4
0
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Q
1

0
5
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q
3

0
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Q
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0
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Airport West 9,458,244 15.23% 76,662 $21.35 19.35%
Aventura 977,833 15.20% 3,557 ---- $27.99 16.05%
Biscayne Blvd. 853,975 17.90% -4,672 $22.25 17.33%
Brickell 5,646,125 16.57% -30,765 $28.41 19.22%
Coconut Grove 1,041,202 17.90% -54,497 $29.11 23.51%
Coral Gables 5,464,297 12.57% -30,978 $27.75 14.76%
Downtown 6,790,990 13.60% 175,019 $26.51 16.39%
Kendall 2,686,245 4.42% -20,904 $22.07 5.49%
Miami Beach 1,849,179 20.98% 8,513 $28.86 23.88%
Miami Lakes 1,223,916 11.91% 2,022 $19.05 13.03%
North Miami 1,086,797 7.70% 23,054 $17.70 8.17%
South Dade 584,576 37.26% 0 $22.67 43.07%
Residual 1,294,575 6.79% 7,243 $16.03 7.70%
TOTAL 38,957,954 14.31% 154,254 ---- $24.64 16.88%
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used to generate National Vacancy and
Availability Index statistics published by CB Richard Ellis Corporate Communications Department or CB Richard Ellis research and Econometric
Forecasting unit, Torto Wheaton Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we
completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of
the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
MarketView | Miami Office
Miami Office
First Quarter 2005
MarketView
Miami-Dades office market closed first
quarter 2005 with an optimistic outlook for
future quarters to follow. Decreased
vacancy rates from first quarter 2004,
coupled with moderate absorption, and an
increase in rental rates continue to aid the
office sector. Since 2004 asking rates have
increased by 2.3 percent points to a current
rate of $24.64-psf fsg, while vacancy rates
have decreased by approximately 8
percentage points to its current of 14.31
percent.
One explanation for this trend is a lack of
new office construction in Miami. With a
lack of available land, the city of Miami
carries the moniker as being a Mini-
Manhattan, and for the past 10 years has
used much of its available parcels for
mixed-use buildings. Mixed use buildings
are defined as any combination of retail,
office, and residential space. Since 1995,
according to a report published by the City
of Miami, 12 buildings, totaling 4,125
residential units have erected within the
CBD corridor. There are an additional 12
buildings under construction that will deliver
another 5,777 residences into the
submarket. Also proposed is an additional
55 mixed use buildings intended for the
CBD submarket.
Aside from the similarities in lack of land
with Manhattan, Miami is revitalizing its
CBD in an attempt to make itself a 24/7
community. During the construction
process, and upon completion of these
mixed-use buildings, the CBD will reach a
point where the development of new offices
will almost have to occur in order to handle
the influx of people looking for employment
in the CBD. In the interim, look for
continuing decreases in vacancies and
availabilities, while asking rates steadily rise
as available office space gradually
decreases.
Approximately 670,000(sf) of leasing
activity took place to begin 2005; a pace
which enables this year to exceed last years
lofty totals. The non-CBD submarkets
represented 81 percent of this activity;
whereas its CBD counterpart accounted for
the remaining 19 percent. Analogous to
4Q04 Airport West continues to lead
Miami-Dade in all leasing activity --
representing 30 percent of first quarter
activity.
QUICK STATS
Vacancy 14.31%
Asking Rent $24.64
Absorption* 154,254
Construction 0
Change f r om l ast
Current Yr. Qtr.
HOT TOPICS
With no new office construction on the
immediate horizon, coupled with
lowering vacancy/availability rates, look
for overall asking rates to increase and
rental concessions to become less
favorable.
Lower interest rates continue to drive the
sales market as investors continue to look
for office and multi-housing opportunities
before rates increase.
Miamis renaissance as a 24/7 living
community.
Rate determined by multiplying the asking net lease rate for each
building by its available space, summing the products, then dividing by
the sum of the available space with net leases for all buildings in the
summary.
NET LEASES
Includes all lease types whereby the tenant pays an agreed rent plus
most, or all, of the operating expenses and taxes for the property,
including utilities, insurance and/or maintenance expenses.
MARKET COVERAGE
Includes all competitive office buildings 30,000 square feet and greater
in size.
NET ABSORPTION
NET RENTABLE AREA
The gross building square footage minus the elevator core, flues, pipe
shafts, vertical ducts, balconies, and stairwell areas.
UNDER CONSTRUCTION
Available Building Area which is either physically vacant or occupied.
AVAILABILITY RATE
VACANT SQUARE FEET
Existing Building Area which is physically vacant or immediately
available.
VACANCY RATE
NORMALIZATION
Due to a reclassification of the market, the base, number and square
footage of buildings of previous quarters have been adjusted to match
the current base. Availability and Vacancy figures for those buildings
MIAMI SUBMARKET MAP
Vacancy Rate 14.31%
Lease Rate $24.64
BRICKELL
777 Brickell Ave
Suite 1000
Miami, FL 33143
305.374.1000
LOCAL OFFICES
WEST DADE
8350 NW 52nd Ter
Suite 101
Miami, FL 33166
305.599.8811
FT. LAUDERDALE
One E Broward Blvd
Suite 915
Ft. Lauderdale, FL 33301
954.462.5655
BOCA RATON
5355 Town Center Rd
Suite 701
Boca Raton, FL 33486
561.394.2100
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2
Q

0
1
4
Q

0
1
2
Q

0
2
4
Q

0
2
2
Q
0
3
4
Q

0
3
2
Q

0
4
4
Q

0
4
%

V
a
c
a
n
c
y
$21
$22
$23
$24
$25
$

p
e
r

S
q
u
a
r
e

F
e
e
t
Copyright (C) 2005, CB Richard Ellis. All rights reserved. This report contains information from sources we believe to be reliable, but we make no
representation, warranty or guaranty of its accuracy. Opinions, assumptions and estimates constitute CBRE's judgment as of the date this report is first
released and are subject to change without notice. CBRE holds all right, title and interest in this report and the proprietary information
contained herein. This report is published for the use of CBRE and its clients only. Redistribution in whole or part to any third party without the prior
written consent of CBRE is strictly prohibited.
MarketView | Orlando Office
Orlando Office
FIRST QUARTER 2005
MarketView
Vacancy Rate 13.3%
Lease Rate $19.50
First quarter 2005 office market statistics solidify
the trend of falling vacancy rates, increased lease
activity, and a market rebounding solidly. The
Orlando Business Journal, January 2005, agreed
that 2004 seemed to be the year of recovery.
Industry experts remain quite optimistic about the
performance of office market activity in 2005.
The current hot button these days within the office
market is investment sales. The shift toward
investing in commercial real estate has long been
fueled by stock market uncertainty and low interest
rates these past few years.
An article in the March 18, 2005 Orlando Sentinel
stated that brokers see no cooling of the market
until interest rates rise. Because of this desire for
income-producing properties in Central Florida the
market is generating multiple offers for properties
often sparking bidding wars for office buildings.
According to Torto Wheaton Research the
consensus from the real estate community seems to
be a 100 basis point increase in the 10-year yield
over the next 12 to 18 months. The inflation-
indexed Treasury yield spreads are around 2.5%
for the 10-year bond.
If the 10-year Treasury remains low, market
investment activity is expected to maintain its solid
pace. Although the Fed continues to push short-
term rates upward, long-term rates are not feeling
the pressure, and are motivating a new wave of
sellers creating changes in the flow of capital for
office properties.
Real Capital Analytics reports that commercial real
estate investors have proven to be just as savvy as
bond traders in anticipating and reacting to US
Treasury yields. RCA also predicts that capital
should continue to flow into real estate as long as
it continues to out-perform the stock and bond
markets. Rising interest rates alone may not
change this equation.
Investment activity for office buildings remains at
an all-time high. Investor profiles have largely been
dominated by private capital sources taking
advantage of todays low interest fixed rate and
floating rate debt instruments. Pricing is being
pushed to all time highs through the use of interest
only loan products that are dominating investors
acquisitions.
Orlando is projected to be the Nations second-
fastest growing employment and population market
through 2008. Employment in Orlando is expected
to grow each year by 2.5% or more for the next
five to six years. The many new projects under way
expected to either break ground or be delivered
this year will breathe new life into our market
making it a desirable place to invest.
CBRE is currently tracking 28 office building
projects in the market for sale representing a
combined total of over 3.1 million square feet with
an aggregate value of approximately $400 million.
Look for 2005 to be a record setting year for office
building sales.
QUICK STATS
Vacancy 13.3%
Lease Rates $19.50
Net Absorption* 220K
* The arrows are trend indicators over the
specified time period and do not represent a
positive or negative value. (e.g., absorption could
be negative, but still represent a positive trend
over a specified period.)
Change
from last
Current Yr. Qtr.
HOT TOPICS
Orlando MSAs
unemployment figures
remain below state and
national percentages.
Investment sales expected to
increase in 2005.
Office market statistics hold
firm to 4th quarter averages.
Industry experts optimistic
about 2005 office market
activity.
Rate determined by multiplying the asking gross
lease rate for each building by its associated
available space, summing the products, then
dividing by the sum of the available spaces with
gross leases for all buildings in the summary.
Direct Leases only; excludes sublease space.
MARKET COVERAGE
Includes all competitive office buildings 10,000
square feet and greater in size.
NET ABSORPTION
The change in occupied square feet from one
period to the next.
NET RENTABLE AREA
The gross building square footage minus the
elevator core, flues, pipe shafts, vertical ducts,
balconies, and stairwell areas.
UNDER CONSTRUCTION
Buildings which have begun construction as
evidenced by site excavation or foundation
work.
Available Building Area which is either
available for lease or sale; or sublease space.
AVAILABILITY RATE
Available Square Feet divided by the Net
Rentable Area.
VACANT SQUARE FEET
Existing Building Area which is physically vacant
or immediately available.
VACANCY RATE
Vacant Building Feet divided by the Net
Rentable Area.
TOP ORLANDO LEASE TRANSACTIONS
22,000 Avaya 307 Cranes Roost Blvd.
20,780 Florida Hospital Centra Care 901 N. Lake Destiny Dr.
18,000 Zenith Insurance Company 3504 Lake Lynda Dr.
16,932 ATI Research 3501 Quadrangle Blvd.
16,251 Parsons Corporation 225 E. Robinson Street
ORLANDO MSA MAP
For more information regarding the
MarketView, please contact:
CB Richard Ellis
201 Orange Avenue, Suite 1500
Orlando, FL 32801
T. 407-843-4020
F. 407-839-3171
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 4Q04 1Q05
$18.00
$18.50
$19.00
$19.50
$20.00
$20.50
Vacancy Rate Average Asking Rent
CB Richard Ellis | Orlando Office MarketView| 1Q 2005 CB Richard Ellis | Orlando Office MarketView| 1Q 2005
MARKET OUTLOOK
The following is an excerpt from the Florida Consumer
Confidence Index, June 28, 2004, a survey conducted by the
University of Florida.
Floridian consumer confidence has risen two points. The
rebound in June reflects what happened on the national level as
measured by the University of Michigan says Chris McCarty, the
Survey Director. The increase in Florida was smaller than at the
national level, but now the Florida index is at exactly the same
level as the nation.
Recent economic indicators have suggested the economy is
improving. The economy has been producing jobs, now
recovering roughly 1 million of the 2.5 million jobs lost since the
recession. Chain store sales and retail sales figures were positive
particularly in gasoline and autos.
Although overall consumer confidence increased, there was a
four point fall among respondents age 60 and older, said
McCarty. While seniors reported a sharp increase in their
personal finances now compared to a year ago, more of them
anticipate being worse off over the next year. Given Floridas
anticipated pivotal role in the upcoming elections and the high
voter turnout among the elderly, this number is one to watch.
0%
5%
10%
15%
20%
1Q04 2Q04 3Q04 4Q04 1Q05
V
a
c
a
n
c
y

/

A
v
a
i
l
a
b
i
l
i
t
y
-200
-100
0
100
200
300
400
N
e

t

A
b
s
o
r
p
t
i
o
n
(
i
n

T
h
o
u
s
a
n
d
s
)
Market
Rentable
Area
Vacancy
Rate %
Net
Absorption
SF
Under
Construction
SF
Average
Asking
Lease Rate
UNEMPLOYMENT RATE
Orlando 4.2%
FL 4.5%
US 5.4%
Orlando ranks 15
th
in the Nation among the 100 largest
labor markets, according to the American City Business
Journals, parent of the Orlando Business Journal.
Orlandos unemployment rate continues to remain lower
than Floridas overall rate of 4.5%, and below the national
unemployment level of 5.4%. The current report from the
Labor Bureau lists Orlando in the top ten metropolitan
areas with the largest over-the-year percentage increase in
non-farm employment (+4.7 percent).
VACANCY/AVAILABILITY/NET ABSORPTION
The overall vacancy rate for the Metro Orlando office market
remains steady at 13.3% from the close of 2004. It continues
to be the lowest vacancy rate since 2001. The South Orlando
submarket experienced a substantial 1
st
Quarter increase,
leading the market in net absorption with a positive 155,230
sf, while the total market experienced a positive net year-to-
date absorption of 220,410 sf. With 4.8 million sf available in
the market, including direct and sublease space, the overall
availability rate for Orlando is at 15.6%, consistent with
2004s closing rate of 15.7%.
The average full service gross lease rates for the Orlando
market at $19.50 psf has remained comparable to the
previous quarters averages. The average lease rate for
Class A office space in the Suburban markets increased to
$20.12 psf, while Class A office space in the Central
Business District remains steady at $25.04 psf. Total market
Class B and C spaces average $19.40 and $17.20 psf,
respectively, both consistent with the previous quarters
closing rates.
Average Asking Lease Rate
$19.50
There are seven buildings now under construction that will add an
additional 1,284,000 sf to the market. Five of the seven buildings
under construction are set for completion this year. The decrease
from last quarter was the completion of a building in South
Orlando, which was entirely occupied by Starwood Vacation
Ownership. Construction is well underway on the mixed-use
project downtown at Church and Orange. Over 40 projects still
remain planned for 2005 and 2006.
DOWNTOWN
Class A 2,336,950 8.9% 34,398 645,000 $25.04
Class B 2,682,618 9.3% 13,696 0 $23.21
Class C 1,314,999 12.1% (23,912) 0 $20.00
Subt ot al 6,334,567 9.7% 24,182 645,000 $23.01
EAST ORL ANDO
Class A 2,378,676 10.9% 25,550 115,000 $19.61
Class B 1,455,546 27.0% (3,001) 75,000 $19.15
Class C 1,712,443 7.9% (3,248) 0 $16.89
Subt ot al 5,546,665 14.2% 19,301 190,000 $18.80
LAKE MARY
Class A 3,934,491 11.1% 14,745 0 $18.74
Class B 307,368 31.0% 15,735 0 $17.45
Class C 0 0.0% 0 0 $0.00
Subt ot al 4,241,859 12.6% 30,480 0 $18.53
MAI TL AND CENTER
Class A 2,480,177 11.8% 61,714 0 $21.31
Class B 2,485,396 23.2% (14,815) 0 $18.06
Class C 577,372 10.9% 1,033 0 $16.78
Subt ot al 5,542,945 16.8% 47,932 0 $18.92
NORTH ORLANDO
Class A 223,246 4.6% 1,000 300,000 N/A
Class B 905,397 16.1% (40,746) 0 $17.69
Class C 2,704,879 15.1% (16,969) 0 $16.81
Subt ot al 3,833,522 14.7% (56,715) 300,000 $17.07
SOUTH ORLANDO
Class A 2,811,023 7.9% 157,126 137,000 $21.23
Class B 980,425 9.7% 5,801 12,000 $19.13
Class C 1,634,988 23.1% (7,697) 0 $15.58
Subt ot al 5,426,436 12.8% 155,230 149,000 $19.05
TOTAL MSA 30,925,994 13.3% 220,410 1,284,000 $19.50
Source: Bureau of Labor Statistics
Vacancy 13.3%
Availability 15.6%
Absorption 220K
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
4.4%
4.7%
4.4%
3.9%
4.2%
4.6%
5.1%
4.7%
4.3%
4.5%
5.7%
5.8%
5.4%
5.2%
5.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05
Orlando MSA State Nation
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q 04 2Q 04 3Q 04 4Q 04 1Q 05
CB Richard Ellis | Orlando Office MarketView| 1Q 2005 CB Richard Ellis | Orlando Office MarketView| 1Q 2005
MARKET OUTLOOK
The following is an excerpt from the Florida Consumer
Confidence Index, June 28, 2004, a survey conducted by the
University of Florida.
Floridian consumer confidence has risen two points. The
rebound in June reflects what happened on the national level as
measured by the University of Michigan says Chris McCarty, the
Survey Director. The increase in Florida was smaller than at the
national level, but now the Florida index is at exactly the same
level as the nation.
Recent economic indicators have suggested the economy is
improving. The economy has been producing jobs, now
recovering roughly 1 million of the 2.5 million jobs lost since the
recession. Chain store sales and retail sales figures were positive
particularly in gasoline and autos.
Although overall consumer confidence increased, there was a
four point fall among respondents age 60 and older, said
McCarty. While seniors reported a sharp increase in their
personal finances now compared to a year ago, more of them
anticipate being worse off over the next year. Given Floridas
anticipated pivotal role in the upcoming elections and the high
voter turnout among the elderly, this number is one to watch.
0%
5%
10%
15%
20%
1Q04 2Q04 3Q04 4Q04 1Q05
V
a
c
a
n
c
y

/

A
v
a
i
l
a
b
i
l
i
t
y
-200
-100
0
100
200
300
400
N
e

t

A
b
s
o
r
p
t
i
o
n
(
i
n

T
h
o
u
s
a
n
d
s
)
Market
Rentable
Area
Vacancy
Rate %
Net
Absorption
SF
Under
Construction
SF
Average
Asking
Lease Rate
UNEMPLOYMENT RATE
Orlando 4.2%
FL 4.5%
US 5.4%
Orlando ranks 15
th
in the Nation among the 100 largest
labor markets, according to the American City Business
Journals, parent of the Orlando Business Journal.
Orlandos unemployment rate continues to remain lower
than Floridas overall rate of 4.5%, and below the national
unemployment level of 5.4%. The current report from the
Labor Bureau lists Orlando in the top ten metropolitan
areas with the largest over-the-year percentage increase in
non-farm employment (+4.7 percent).
The overall vacancy rate for the Metro Orlando office market
remains steady at 13.3% from the close of 2004. It continues
to be the lowest vacancy rate since 2001. The South Orlando
submarket experienced a substantial 1
st
Quarter increase,
leading the market in net absorption with a positive 155,230
sf, while the total market experienced a positive net year-to-
date absorption of 220,410 sf. With 4.8 million sf available in
the market, including direct and sublease space, the overall
availability rate for Orlando is at 15.6%, consistent with
2004s closing rate of 15.7%.
The average full service gross lease rates for the Orlando
market at $19.50 psf has remained comparable to the
previous quarters averages. The average lease rate for
Class A office space in the Suburban markets increased to
$20.12 psf, while Class A office space in the Central
Business District remains steady at $25.04 psf. Total market
Class B and C spaces average $19.40 and $17.20 psf,
respectively, both consistent with the previous quarters
closing rates.
Average Asking Lease Rate
$19.50
There are seven buildings now under construction that will add an
additional 1,284,000 sf to the market. Five of the seven buildings
under construction are set for completion this year. The decrease
from last quarter was the completion of a building in South
Orlando, which was entirely occupied by Starwood Vacation
Ownership. Construction is well underway on the mixed-use
project downtown at Church and Orange. Over 40 projects still
remain planned for 2005 and 2006.
DOWNTOWN
Class A 2,336,950 8.9% 34,398 645,000 $25.04
Class B 2,682,618 9.3% 13,696 0 $23.21
Class C 1,314,999 12.1% (23,912) 0 $20.00
Subt ot al 6,334,567 9.7% 24,182 645,000 $23.01
EAST ORL ANDO
Class A 2,378,676 10.9% 25,550 115,000 $19.61
Class B 1,455,546 27.0% (3,001) 75,000 $19.15
Class C 1,712,443 7.9% (3,248) 0 $16.89
Subt ot al 5,546,665 14.2% 19,301 190,000 $18.80
LAKE MARY
Class A 3,934,491 11.1% 14,745 0 $18.74
Class B 307,368 31.0% 15,735 0 $17.45
Class C 0 0.0% 0 0 $0.00
Subt ot al 4,241,859 12.6% 30,480 0 $18.53
MAI TL AND CENTER
Class A 2,480,177 11.8% 61,714 0 $21.31
Class B 2,485,396 23.2% (14,815) 0 $18.06
Class C 577,372 10.9% 1,033 0 $16.78
Subt ot al 5,542,945 16.8% 47,932 0 $18.92
NORTH ORLANDO
Class A 223,246 4.6% 1,000 300,000 N/A
Class B 905,397 16.1% (40,746) 0 $17.69
Class C 2,704,879 15.1% (16,969) 0 $16.81
Subt ot al 3,833,522 14.7% (56,715) 300,000 $17.07
SOUTH ORLANDO
Class A 2,811,023 7.9% 157,126 137,000 $21.23
Class B 980,425 9.7% 5,801 12,000 $19.13
Class C 1,634,988 23.1% (7,697) 0 $15.58
Subt ot al 5,426,436 12.8% 155,230 149,000 $19.05
TOTAL MSA 30,925,994 13.3% 220,410 1,284,000 $19.50
Vacancy 13.3%
Availability 15.6%
Absorption 220K
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
4.4%
4.7%
4.4%
3.9%
4.2%
4.6%
5.1%
4.7%
4.3%
4.5%
5.7%
5.8%
5.4%
5.2%
5.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05
Orlando MSA State Nation
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q 04 2Q 04 3Q 04 4Q 04 1Q 05
Copyright (C) 2005, CB Richard Ellis. All rights reserved. This report contains information from sources we believe to be reliable, but we make no
representation, warranty or guaranty of its accuracy. Opinions, assumptions and estimates constitute CBRE's judgment as of the date this report is first
released and are subject to change without notice. CBRE holds all right, title and interest in this report and the proprietary information
contained herein. This report is published for the use of CBRE and its clients only. Redistribution in whole or part to any third party without the prior
written consent of CBRE is strictly prohibited.
MarketView | Orlando Office
Orlando Office
FIRST QUARTER 2005
MarketView
Vacancy Rate 13.3%
Lease Rate $19.50
First quarter 2005 office market statistics solidify
the trend of falling vacancy rates, increased lease
activity, and a market rebounding solidly. The
Orlando Business Journal, January 2005, agreed
that 2004 seemed to be the year of recovery.
Industry experts remain quite optimistic about the
performance of office market activity in 2005.
The current hot button these days within the office
market is investment sales. The shift toward
investing in commercial real estate has long been
fueled by stock market uncertainty and low interest
rates these past few years.
An article in the March 18, 2005 Orlando Sentinel
stated that brokers see no cooling of the market
until interest rates rise. Because of this desire for
income-producing properties in Central Florida the
market is generating multiple offers for properties
often sparking bidding wars for office buildings.
According to Torto Wheaton Research the
consensus from the real estate community seems to
be a 100 basis point increase in the 10-year yield
over the next 12 to 18 months. The inflation-
indexed Treasury yield spreads are around 2.5%
for the 10-year bond.
If the 10-year Treasury remains low, market
investment activity is expected to maintain its solid
pace. Although the Fed continues to push short-
term rates upward, long-term rates are not feeling
the pressure, and are motivating a new wave of
sellers creating changes in the flow of capital for
office properties.
Real Capital Analytics reports that commercial real
estate investors have proven to be just as savvy as
bond traders in anticipating and reacting to US
Treasury yields. RCA also predicts that capital
should continue to flow into real estate as long as
it continues to out-perform the stock and bond
markets. Rising interest rates alone may not
change this equation.
Investment activity for office buildings remains at
an all-time high. Investor profiles have largely been
dominated by private capital sources taking
advantage of todays low interest fixed rate and
floating rate debt instruments. Pricing is being
pushed to all time highs through the use of interest
only loan products that are dominating investors
acquisitions.
Orlando is projected to be the Nations second-
fastest growing employment and population market
through 2008. Employment in Orlando is expected
to grow each year by 2.5% or more for the next
five to six years. The many new projects under way
expected to either break ground or be delivered
this year will breathe new life into our market
making it a desirable place to invest.
CBRE is currently tracking 28 office building
projects in the market for sale representing a
combined total of over 3.1 million square feet with
an aggregate value of approximately $400 million.
Look for 2005 to be a record setting year for office
building sales.
QUICK STATS
Vacancy 13.3%
Lease Rates $19.50
* The arrows are trend indicators over the
specified time period and do not represent a
positive or negative value. (e.g., absorption could
be negative, but still represent a positive trend
over a specified period.)
Change
from last
Current Yr. Qtr.
HOT TOPICS
Orlando MSAs
unemployment figures
remain below state and
national percentages.
Investment sales expected to
increase in 2005.
Office market statistics hold
firm to 4th quarter averages.
Industry experts optimistic
about 2005 office market
activity.
Rate determined by multiplying the asking gross
lease rate for each building by its associated
available space, summing the products, then
dividing by the sum of the available spaces with
gross leases for all buildings in the summary.
Direct Leases only; excludes sublease space.
MARKET COVERAGE
NET ABSORPTION
The change in occupied square feet from one
period to the next.
NET RENTABLE AREA
The gross building square footage minus the
elevator core, flues, pipe shafts, vertical ducts,
balconies, and stairwell areas.
UNDER CONSTRUCTION
Buildings which have begun construction as
evidenced by site excavation or foundation
work.
Available Building Area which is either
available for lease or sale; or sublease space.
AVAILABILITY RATE
Available Square Feet divided by the Net
Rentable Area.
VACANT SQUARE FEET
Existing Building Area which is physically vacant
or immediately available.
VACANCY RATE
Vacant Building Feet divided by the Net
Rentable Area.
TOP ORLANDO LEASE TRANSACTIONS
22,000 Avaya 307 Cranes Roost Blvd.
20,780 Florida Hospital Centra Care 901 N. Lake Destiny Dr.
18,000 Zenith Insurance Company 3504 Lake Lynda Dr.
16,932 ATI Research 3501 Quadrangle Blvd.
16,251 Parsons Corporation 225 E. Robinson Street
ORLANDO MSA MAP
CB Richard Ellis
201 Orange Avenue, Suite 1500
Orlando, FL 32801
T. 407-843-4020
F. 407-839-3171
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 4Q04 1Q05
$18.00
$18.50
$19.00
$19.50
$20.00
$20.50
www.cbre.com
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used to generate National Vacancy
and Availability Index statistics published by CB Richard Ellis Corporate Communications Department or CB Richard Ellis research and Econometric
Forecasting unit, Torto Wheaton Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and
completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance
of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
Rate determined by multiplying the asking gross lease
rate for each building by its available space, summing
the products, then dividing by the sum of the available
space with gross leases for all buildings in the summary.
NET LEASES
Includes all lease types whereby the tenant pays an
agreed rent plus most, or all, of the operating expenses
and taxes for the property, including utilities, insurance
and/or maintenance expenses.
MARKET COVERAGE
Includes all competitive office buildings 30,000 square
feet and greater in size.
NET ABSORPTION
The change in occupied square feet from one period to
the next.
NET RENTABLE AREA
The gross building square footage minus the elevator
core, flues, pipe shafts, vertical ducts, balconies, and
stairwell areas.
UNDER CONSTRUCTION
Buildings which have begun construction as evidenced
by site excavation or foundation work.
Portion of Building Area which is on market for lease;
may be either vacant or occupied at time of reporting.
AVAILABILITY RATE
VACANT SQUARE FEET
Portion of Building Area which is physically vacant.
VACANCY RATE
NORMALIZATION
Due to a reclassification of the market, the base,
number and square footage of buildings of previous
quarters have been adjusted to match the current base.
Availability and Vacancy figures for those buildings have
been adjusted in previous quarters.
For more inf ormat ion regarding t he
Market View, please cont act :
Leigh Martin, Senior Vice President
CB Richard Ellis, Inc.
3348 Peachtree Road, Suite 900
Atlanta, Georgia 30326
T. 404.504.5940 F. 404.504.0030
leigh.martin@cbre.com
T O P A T L A N T A L E A S E T R A N S A C T I O N S
A T L A N T A S U B M A R K E T M A P
MarketView | Atlanta Office
Size (SF) Tenant Address / Building Name
237,000 SF Sutherland Asbill 999 Peachtree - Renewal/expansion
100,000 SF Morris, Manning & Martin Atlanta Fiancial Center - Renewal
75,000 SF Heery International 999 Peachtree - Renewal
61,000 SF Pediatric Services 310 Technology Parkway - Renewal
60,000 SF CompBenefits 100 Mansell Court - Renewal
2004 brought the Atlanta office market its first taste
of unvarnished good news in several years, with
declining vacancies and steadily improving occupancy
growth. The first quarter of 2005 offers further
evidence that Atlantas office market recovery is solidly
underway. While this is a more gradual recovery than
we have seen in past cycles, most market indicators
are very encouraging. Net absorption continues to
improve, with its strongest performance in more than
four years. Vacancy continues its decline, and the
amount of sublease space
on market has dipped by
an average of 500,000
square feet each quarter
for more than a year.
Still, the market engine
has not yet reached full
speed. While absorption
is improving, it remains
below levels seen in the late
1990s. While the vacancy
rate is sliding downward, it
remains above 20 percent,
and shows no sign of
approaching the historic
lows seen five years ago. Of course, its doubtful
whether those years can be duplicated without the
kind of economic stimulus that was led by technology
companies during those years. While sublease space
recedes, it remains a factor in some submarkets,
particularly North Fulton and Central Perimeter, where
vacancies are at their highest. And while construction
falls well below development highs of the 1990s,
the nearly 1.4 million square feet currently under
construction are focused primarily in the Central
Business District, and nearly half of that space
remains available. A premature development boom
could pose a risk to long-term recovery prospects in
a city with more than 28 million square feet of vacant
office space.
Other indicators recommend caution as well. Quoted
lease rates continue to decline, albeit by smaller
margins than in recent years.
While employment figures
showed some improvement
in Atlanta during 2004,
unemployment claims in
Atlanta have risen for the
last three months. In fact,
the gap between national
unempl oy ment r at es
and traditionally better-
performing Georgia has
narrowed significantly in
recent months.
Atlantas office market is
coming out of its recovery
mode and moving into the next expansion cycle.
Barring a new next big thing to drive Atlantas
economic expansion, its difficult to imagine the
market experiencing the kind of growth seen
during the high tech boom in the late 1990s. Still,
2005 is already on track to improve on last years
performance and provide the Atlanta office market
with its best year this decade.
Atlanta Office
HOT TOPICS
Absorption continues to strengthen,
with best quarterly performance since
2000
Vacancy continues to decline gradually
Lease rates still slipping slightly each
quarter
Sublease space receding by an average
of half a million square feet a quarter

QUICK STATS
Change from last *
Current Yr. Qtr.
Vacancy 22.0%
Lease Rates $19.78
Net Absorption 622,926
Construction 1,373,110
* The arrows are trend indicators over the specified time period and do
not represent a positive or negative value. (e.g., absorption could be
negative, but still represent a positive trend over a specified period.)
$

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Vacancy Rate 22.0%
Lease Rate $19.78
MarketView
F I RS T QUART E R 2005
While this is a more
gradual recovery than we
have seen in past cycles,
most market indicators
are very encouraging.
0
5
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15
20
25
0
5
10
15
20
25
CB Richard Ellis | Atlanta Office MarketView | 1Q 2005 CB Richard Ellis | Atlanta Office MarketView | 1Q 2005
UNEMPLOYMENT RATE
2%
3%
4%
5%
6%
7%

Total Sublease YTD Net Under Avg. Asking
Inventory Vacancy Space Availability Absorption Construction Lease Rate
Submarket (SF) Rate % (SF) Rate % (SF) (SF) ($ SF/YR)
Downtown 16,734,642 23.9% 173,922 24.4% -122,009 272,430 $19.99
Midtown 14,468,939 18.8% 362,774 18.9% 292,550 669,000 $24.42
Buckhead 11,547,186 18.6% 364,903 18.6% 4,216 192,680 $23.45
Urban Totals 42,750,767 20.7% 901,599 21.0% 174,757 1,134,110 $21.92
Northwest 20,377,601 20.3% 396,580 21.3% 111,580 -0- $19.85
I-75 / Marietta 2,231,681 13.5% 42,602 17.9% 24,372 -0- $18.01
Central Perimeter 22,995,165 26.4% 623,815 26.7% 76,823 -0- $20.39
North Fulton 16,340,406 24.4% 1,257,259 29.8% 218,150 -0- $17.81
Peachtree Corners 5,082,404 21.5% 135,830 23.6% 9,453 -0- $16.12
I-85 / Northeast 6,429,670 24.0% 321,340 27.7% 23,161 130,000 $16.20
Northlake / Decatur 9,434,155 17.8% 105,954 18.7% -10,544 109,000 $17.54
Airport / South Atlanta 2,341,462 22.6% 31,312 23.0% -1,553 -0- $15.17
Suburban Totals 86,206,680 22.6% 2,914,692 24.6% 448,169 239,000 $18.77

Metro Atlanta 128,957,447 22.0% 3,816,291 23.4% 622,926 1,370,110 $19.78
The economy continues to offer mixed signals to market watchers in Atlanta, just as it
does across the nation. Unemployment rates for both Atlanta and the state of Georgia rose
during first quarter; while still below the national average, local unemployment mirrors
the country more closely than it has in many years. While the overall number of jobs grew
during 2004, the state experienced job losses in the construction, manufacturing, and
hospitality sectors. Over the past 12 months, the state has an employment growth rate
of less than one percent. Some business leaders have expressed the hope that with the
national election behind us, 2005 would bring more positive news on the economic front.
While its too soon to tell if the year will justify such optimism, Atlanta has historically led
Georgias economy, and the metro area continues to outperform the state in job growth.
5
10
15
20
25
30

-1.5
-1.0
-0.5
0.0
0.5
1.0
Atlanta 5.1%
Georgia 5.3%
US 5.4%
0.00
0.25
0.50
0.75
1.00
1.25
1.50

$17
$18
$19
$20
$21
$22

MARKET OUTLOOK
Atlantas office market is poised to experience a greater level of
growth in 2005 than it has seen since the decade began, with
first quarters performance representing half of the occupancy
growth seen during all of 2004. However, without substantial
and sustained job growth, metro Atlanta can only climb so far.
While absorption continues to improve, the market still contains
more than 28 million square feet of vacant space, several years
worth of supply at current absorption rates. Still, 2004 brought
clear indications that progress is being made in Atlantas office
recovery, and the first quarter of 2005 has only reinforced those
signals. Until job growth picks up, we can expect moderate
improvements in occupancy, as long as development remains
restrained.
Vacancy 22.0%
Availability 23.4%
Absorption 622,926
%

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Vacancy in metro Atlantas office market, while still above twenty percent, has declined for five
of the last six quarters, reporting a rate of 22.0% in the first quarter of 2005. Space available
for direct lease declined over the past year, and space on the sublease market has dropped by
an average of 500,000 square feet for more than a year.
Meanwhile, absorption continues its trend of improvement begun during 2003. First quarters
net absorption of 622,926 square feet is the strongest single-quarter performance in more than
four years. While Atlanta shows no sign of reaching the late 1990s absorption rates of nearly
one million square feet per quarter anytime soon, the recovery is clearly underway.
Average asking lease rates in metro Atlanta have remained relatively steady for more than
a year, losing an average of five cents a quarter per rentable square foot (rsf) for the last
five quarters; rates had dipped by more than twenty cents during most of 2003. As of first
quarter 2005, weighted average lease rates were quoted at $19.78 per rsf, $2.00 below
levels seen in 2001 before the office market slide began. Rates saw their greatest decrease
in the Class A sector this quarter, dropping twenty cents to an average of $21.68. Class B
quoted rates have remained remarkably steady throughout the past year. The highest rents
were found in Class A space in Midtown and Buckhead, as has been the case in recent
years.
While construction activity declined to its lowest level in years during 2003, activity has
resumed, particularly in the citys urban core. Two large Class A projects began construction
in 2004, Two Buckhead Plaza and One Centennial, comprising more than 400,000 square
feet. One Centennial, located Downtown, is 50% leased to the Southern Company. 1180
Peachtree began construction in Midtown late in 2003 and is expected to deliver in 2006.
In addition, there are 239,000 square feet of projects under construction in the citys
northeast quadrant.
Cousins Properties announced plans to break ground this summer on a new 500,000
square-foot tower in Buckhead; currently, the project is about 45% pre-leased. Other
speculative projects have been announced in Buckhead, but no other firm launch dates
have been announced.
Source: Georgia Department of Labor
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M
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Average Asking Lease Rent $19.78
Square Feet Under Construction 1,373,110
Source: Dorey Market Analysis Group
CB Richard Ellis | Atlanta Office MarketView | 1Q 2005 CB Richard Ellis | Atlanta Office MarketView | 1Q 2005
UNEMPLOYMENT RATE
2%
3%
4%
5%
6%
7%

Total Sublease YTD Net Under Avg. Asking
Inventory Vacancy Space Availability Absorption Construction Lease Rate
Submarket (SF) Rate % (SF) Rate % (SF) (SF) ($ SF/YR)
Downtown 16,734,642 23.9% 173,922 24.4% -122,009 272,430 $19.99
Midtown 14,468,939 18.8% 362,774 18.9% 292,550 669,000 $24.42
Buckhead 11,547,186 18.6% 364,903 18.6% 4,216 192,680 $23.45
Urban Totals 42,750,767 20.7% 901,599 21.0% 174,757 1,134,110 $21.92
Northwest 20,377,601 20.3% 396,580 21.3% 111,580 -0- $19.85
I-75 / Marietta 2,231,681 13.5% 42,602 17.9% 24,372 -0- $18.01
Central Perimeter 22,995,165 26.4% 623,815 26.7% 76,823 -0- $20.39
North Fulton 16,340,406 24.4% 1,257,259 29.8% 218,150 -0- $17.81
Peachtree Corners 5,082,404 21.5% 135,830 23.6% 9,453 -0- $16.12
I-85 / Northeast 6,429,670 24.0% 321,340 27.7% 23,161 130,000 $16.20
Northlake / Decatur 9,434,155 17.8% 105,954 18.7% -10,544 109,000 $17.54
Airport / South Atlanta 2,341,462 22.6% 31,312 23.0% -1,553 -0- $15.17
Suburban Totals 86,206,680 22.6% 2,914,692 24.6% 448,169 239,000 $18.77

Metro Atlanta 128,957,447 22.0% 3,816,291 23.4% 622,926 1,370,110 $19.78
The economy continues to offer mixed signals to market watchers in Atlanta, just as it
does across the nation. Unemployment rates for both Atlanta and the state of Georgia rose
during first quarter; while still below the national average, local unemployment mirrors
the country more closely than it has in many years. While the overall number of jobs grew
during 2004, the state experienced job losses in the construction, manufacturing, and
hospitality sectors. Over the past 12 months, the state has an employment growth rate
of less than one percent. Some business leaders have expressed the hope that with the
national election behind us, 2005 would bring more positive news on the economic front.
While its too soon to tell if the year will justify such optimism, Atlanta has historically led
Georgias economy, and the metro area continues to outperform the state in job growth.
5
10
15
20
25
30

-1.5
-1.0
-0.5
0.0
0.5
1.0
Atlanta 5.1%
Georgia 5.3%
US 5.4%
0.00
0.25
0.50
0.75
1.00
1.25
1.50

$17
$18
$19
$20
$21
$22

MARKET OUTLOOK
Atlantas office market is poised to experience a greater level of
growth in 2005 than it has seen since the decade began, with
first quarters performance representing half of the occupancy
growth seen during all of 2004. However, without substantial
and sustained job growth, metro Atlanta can only climb so far.
While absorption continues to improve, the market still contains
more than 28 million square feet of vacant space, several years
worth of supply at current absorption rates. Still, 2004 brought
clear indications that progress is being made in Atlantas office
recovery, and the first quarter of 2005 has only reinforced those
signals. Until job growth picks up, we can expect moderate
improvements in occupancy, as long as development remains
restrained.
Vacancy 22.0%
Availability 23.4%
Absorption 622,926
%

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M
)
Vacancy in metro Atlantas office market, while still above twenty percent, has declined for five
of the last six quarters, reporting a rate of 22.0% in the first quarter of 2005. Space available
for direct lease declined over the past year, and space on the sublease market has dropped by
an average of 500,000 square feet for more than a year.
Meanwhile, absorption continues its trend of improvement begun during 2003. First quarters
net absorption of 622,926 square feet is the strongest single-quarter performance in more than
four years. While Atlanta shows no sign of reaching the late 1990s absorption rates of nearly
one million square feet per quarter anytime soon, the recovery is clearly underway.
Average asking lease rates in metro Atlanta have remained relatively steady for more than
a year, losing an average of five cents a quarter per rentable square foot (rsf) for the last
five quarters; rates had dipped by more than twenty cents during most of 2003. As of first
quarter 2005, weighted average lease rates were quoted at $19.78 per rsf, $2.00 below
levels seen in 2001 before the office market slide began. Rates saw their greatest decrease
in the Class A sector this quarter, dropping twenty cents to an average of $21.68. Class B
quoted rates have remained remarkably steady throughout the past year. The highest rents
were found in Class A space in Midtown and Buckhead, as has been the case in recent
years.
While construction activity declined to its lowest level in years during 2003, activity has
resumed, particularly in the citys urban core. Two large Class A projects began construction
in 2004, Two Buckhead Plaza and One Centennial, comprising more than 400,000 square
feet. One Centennial, located Downtown, is 50% leased to the Southern Company. 1180
Peachtree began construction in Midtown late in 2003 and is expected to deliver in 2006.
In addition, there are 239,000 square feet of projects under construction in the citys
northeast quadrant.
Cousins Properties announced plans to break ground this summer on a new 500,000
square-foot tower in Buckhead; currently, the project is about 45% pre-leased. Other
speculative projects have been announced in Buckhead, but no other firm launch dates
have been announced.
Source: Georgia Department of Labor
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Average Asking Lease Rent $19.78
Square Feet Under Construction 1,373,110
Source: Dorey Market Analysis Group
www.cbre.com
of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
Rate determined by multiplying the asking gross lease
space with gross leases for all buildings in the summary.
NET LEASES
MARKET COVERAGE
NET ABSORPTION
the next.
NET RENTABLE AREA
stairwell areas.
UNDER CONSTRUCTION
Portion of Building Area which is on market for lease;
may be either vacant or occupied at time of reporting.
AVAILABILITY RATE
VACANT SQUARE FEET
Portion of Building Area which is physically vacant.
VACANCY RATE
NORMALIZATION
For more inf ormat ion regarding t he
Market View, please cont act :
Leigh Martin, Senior Vice President
CB Richard Ellis, Inc.
3348 Peachtree Road, Suite 900
Atlanta, Georgia 30326
T. 404.504.5940 F. 404.504.0030
leigh.martin@cbre.com
T O P A T L A N T A L E A S E T R A N S A C T I O N S
A T L A N T A S U B M A R K E T M A P
MarketView | Atlanta Office
Size (SF) Tenant Address / Building Name
237,000 SF Sutherland Asbill 999 Peachtree - Renewal/expansion
100,000 SF Morris, Manning & Martin Atlanta Fiancial Center - Renewal
75,000 SF Heery International 999 Peachtree - Renewal
61,000 SF Pediatric Services 310 Technology Parkway - Renewal
60,000 SF CompBenefits 100 Mansell Court - Renewal
2004 brought the Atlanta office market its first taste
of unvarnished good news in several years, with
declining vacancies and steadily improving occupancy
growth. The first quarter of 2005 offers further
evidence that Atlantas office market recovery is solidly
underway. While this is a more gradual recovery than
we have seen in past cycles, most market indicators
are very encouraging. Net absorption continues to
improve, with its strongest performance in more than
four years. Vacancy continues its decline, and the
amount of sublease space
on market has dipped by
an average of 500,000
square feet each quarter
for more than a year.
Still, the market engine
has not yet reached full
speed. While absorption
is improving, it remains
below levels seen in the late
1990s. While the vacancy
rate is sliding downward, it
remains above 20 percent,
and shows no sign of
approaching the historic
lows seen five years ago. Of course, its doubtful
whether those years can be duplicated without the
kind of economic stimulus that was led by technology
companies during those years. While sublease space
recedes, it remains a factor in some submarkets,
particularly North Fulton and Central Perimeter, where
vacancies are at their highest. And while construction
falls well below development highs of the 1990s,
the nearly 1.4 million square feet currently under
construction are focused primarily in the Central
Business District, and nearly half of that space
remains available. A premature development boom
could pose a risk to long-term recovery prospects in
a city with more than 28 million square feet of vacant
office space.
Other indicators recommend caution as well. Quoted
lease rates continue to decline, albeit by smaller
margins than in recent years.
While employment figures
showed some improvement
in Atlanta during 2004,
unemployment claims in
Atlanta have risen for the
last three months. In fact,
the gap between national
unempl oy ment r at es
and traditionally better-
performing Georgia has
narrowed significantly in
recent months.
Atlantas office market is
coming out of its recovery
mode and moving into the next expansion cycle.
Barring a new next big thing to drive Atlantas
economic expansion, its difficult to imagine the
market experiencing the kind of growth seen
during the high tech boom in the late 1990s. Still,
2005 is already on track to improve on last years
performance and provide the Atlanta office market
with its best year this decade.
Atlanta Office
HOT TOPICS
Absorption continues to strengthen,
with best quarterly performance since
2000
Vacancy continues to decline gradually
Lease rates still slipping slightly each
quarter
Sublease space receding by an average
of half a million square feet a quarter

QUICK STATS
Change from last *
Current Yr. Qtr.
Vacancy 22.0%
Lease Rates $19.78
Net Absorption 622,926
$

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Vacancy Rate 22.0%
Lease Rate $19.78
MarketView
F I RS T QUART E R 2005
While this is a more
gradual recovery than we
have seen in past cycles,
most market indicators
are very encouraging.
0
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www.cbre.com
Vacancy 12.6%
Lease Rates $2.16
Net Absorption* 730,908
* The arrows are trend indicators over the positive or negative
value. (e.g., absorption could be negative, but still represent a
positive trend over a specified period.)
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
$2.00
$2.02
$2.04
$2.06
$2.08
$2.10
$2.12
$2.14
$2.16
$2.18
$2.20
$2.22
Vacancy Rate 12.6%
Lease Rate $2.16
In Downtown LA, early relocations or
negotiations by large tenants, are tak-
ing place as early as 2 years before
thei r respecti ve l ease expi rati ons.
There is a limited supply of good sub-
lease space (over 15,000 RSF) with
decent term left.
In the San Fernando Valley, rental
rates continue to firm up, while leasing
concessions are on the decline. At
long last, the growth that companies
are experiencing is translating into
office expansions, resulting in healthy
absorption of vacant space.
The Red Cross submitted an RFP to the
developers of Innovation Village Tech
Park, part of the Cal Poly Pomona
Research & Techni cal Department
located next to Cal Poly Pomona, for
100,000 SF of Class A office space.
Lowe Enterprises is partnering with CB
Richard Ellis.
HOT TOPICS
QUICK STATS
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Yr. Current Qtr.
Change f r om l ast
The Los Angeles County office market experienced
positive trends in the first quarter of 2005,
including:
Decreased vacancy
Increased asking rates
Increased net absorption
Increased construction activity
The vacancy rate in Los Angeles County continued
its steady decline with an annual decrease of 10.7%
from 14.2% in 1Q04 to 12.6% in
1Q05. The San Gabriel Valley
experienced the most significant
annual change, a 25.5%
decrease from 8.1% in 1Q04 to
6.1% in 1Q05, followed closely
by the Tri-Cities market with a
23.3% annual decrease from
11.3% to 8.7%. The Ventura County market
experienced a 23.7% annual decrease from 11.1%
to 8.5%.
At the conclusion of the first quarter of 2005, the
San Gabriel Valley offered the lowest vacancy rate
in the County at 6.1%, while the South Bay market
offered the highest at 20.5%.
Average asking lease rates in Los Angeles County
increased $.04 compared to first quarter 2004,
from $2.12 per SF in 1Q04 to $2.16 per SF in
1Q05. The greatest annual increase was in the
Downtown LA market, rising 14.8% from $1.97 per
SF in 1Q04 to $2.26 per SF in 1Q05. Average
asking rates in the Tri-Cities remained flat, while the
San Fernando Valley and West Los Angeles markets
experienced slight annual decreases of less than 1%
each.
Net absorption in Los Angeles County remained
positive in the first quarter of 2005 and increased
significantly compared to the
previous quarter, from 196,749
SF in 4Q04 to 730,908 SF in
1Q05. Net absorption in the
first quarter was greatest in the
West Los Angeles market at
291,538 SF, followed by the
Downtown Los Angeles market
with 208,831 SF, and San Fernando Valley with
178,732 SF. Two markets in Los Angeles County
experienced negative net absorption, the
Hollywood/Wilshire Corridor with -77,708 SF and
South Bay with -70,656 SF.
Construction activity in 1Q05 returned to the peak
reached in 2004 with 1.3 million SF under
construction. Active construction in Los Angeles
County included projects in the Tri-Cities, San
Fernando Valley and West Los Angeles markets, in
addition to several cities in Ventura County.
F I R S T Q U A R T E R 2 0 0 5
Los Angeles Office
The vacancy rate in Los
Angeles County continued
its steady decline with an
annual decrease of 10.7%
from 14.2% in 1Q04 to
12.6% in 1Q05.
MarketView
LA County
"The first quarter of 2005 is continuing with its momentum from 2004. Vacancy continues to decrease, rents are
increasing overall, and absorption was exceptionally strong. Most notable is the reduction in large blocks of available
space, which will energize new development and build to suit activity in select markets. Several lagging markets (i.e.
Downtown Los Angeles and South Bay) have bottomed out and are starting to recover. We envision that all markets will
continue to strengthen throughout 2005."
John McRoskey, Senior Vice President, Downtown Los Angeles, and
Mike McRoskey, Senior Vice President, Downtown Los Angeles
MARKET OUTLOOK
CB Ri char d El l i s | Los Angel es Of f i ce Mar ket Vi ew | 1Q 2005
0%
1%
2%
3%
4%
5%
6%
7%
8%
04Q1 04Q2 04Q3 04Q4 05Q1
The unemployment rate in Greater Los Angeles (Los Angeles and
Ventura counties combined) and the State of California increased in
1Q05 to 6.0% and 6.1% respectively, yet by comparison remained well
below the 1Q04 rates of 6.7% and 7.0%. The national rate remained
steady at 5.4%, down from 1Q04's 5.7%.
Total Non-Farm employment in Greater Los Angeles declined by 32,500
jobs in 1Q05 compared to the previous quarter. While both the office
and industrial sectors lost jobs, 6,500 and 29,600 respectively, the retail
sector added 100 jobs in the region in the first quarter.
Los Angeles 6.0%
California 6.1%
US 5.4% UNEMPLOYMENT RATE
Source: California Economic Development Department, US.
1
Rates not adjusted for seasonality
Net Vacancy Net Under Average Asking
Rentable Area Rate Absorption Construction Lease Rate
Sub-market SF % SF SF $/SF/MTH
Tri-Cities/Glendale 24,058,489 8.7% 95,710 287,723 $2.26
Downtown Los Angeles 30,991,115 15.5% 208,831 - $2.26
Hollywood/Wilshire Corridor 17,155,280 12.1% (77,708) - $1.73
San Fernando Valley 21,957,482 9.1% 178,732 179,336 $2.04
San Gabriel Valley 12,624,341 6.1% 104,461 - $1.91
South Bay 27,545,505 20.5% (70,656) - $1.84
West Los Angeles 42,975,921 11.7% 291,538 790,000 $2.59
Los Angeles County Total 177,308,133 12.6% 730,908 1,257,059 $2.16
Ventura 8,344,187 8.5% 26,252 230,986 $1.73
Greater Los Angeles Area Total 185,652,320 12.5% 757,160 1,488,045 $2.14
CB Ri char d El l i s | Los Angel es Of f i ce Mar ket Vi ew | 1Q 2005
12.0%
13.0%
14.0%
15.0%
04Q1 04Q2 04Q3 04Q4 05Q1
$1.50
$1.60
$1.70
$1.80
$1.90
$2.00
$2.10
$2.20
04Q1 04Q2 04Q3 04Q4 05Q1
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
04Q1 04Q2 04Q3 04Q4 05Q1
Vacancy rates in Los Angeles County during the first quarter break
down as follows:
Class A: 11.9%
Class B: 15.1%
Overall: 12.6%
In LA County, the Class A market is tightest in the San Gabriel Valley
at 7.4%, and greatest in South Bay at 15.6%. Class B vacancy is
lowest in San Gabriel Valley at 5.3% and greatest in Downtown LA at
33.3%. Overall, the San Gabriel Valley has the lowest combined
vacancy at 6.1%, and South Bay the highest at 20.5%.
Average asking rates in Los Angeles County during the first quarter
break down as follows:
Class A: $2.31 per SF
Class B: $1.75 per SF
Overall: $2.16 per SF
In LA County, Class A rates are highest in West LA at $2.64 per SF,
and lowest in the Hollywood/Wilshire Corridor at $1.74 per SF. Class
B rates are highest in West LA at $2.14 per SF, and lowest in the
Hollywood/Wilshire Corridor at $1.58 per SF. Overall, West LA has
the highest asking rate in the County at $2.59 per SF, and the
Hollywood/Wilshire Corridor has the lowest at $1.73 per SF.
Construction activity increased in the first quarter to 1.3 million SF
from 1.1 million SF in the fourth quarter, returning to the peak
reached in 2004. Construction activity is underway in three Los
Angeles County sub-markets: Tri-Cities with 287,723 SF under
construction, 60,000 SF in Burbank and 227,723 in Pasadena; San
Fernando Valley with 179,336 SF under construction in Woodland
Hills; and West Los Angeles with 790,000 SF under construction at
2000 Avenue of the Stars in Century City.
Vacancy 12.6% Average Asking Lease Rate $2.16
VACANCY RATES AVERAGE ASKING LEASE RATES
%

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0.0
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1.5
04Q1 04Q2 04Q3 04Q4 05Q1
Net Absorption in Los Angeles County during the first quarter breaks
down as follows:
Class A: 654,554 SF
Class B: 76,354 SF
Overall: 730,908 SF
In LA County, Class A net absorption is highest in West Los Angeles
with 293,408 SF, and lowest in the Hollywood/Wilshire Corridor with
(94,094) SF absorbed. Class B net absorption is highest in the San
Gabriel Valley with 69,243 SF, and lowest in the South Bay with
(98,377) SF absorbed. Overall, net absorption is highest in West Los
Angeles with 291,538 SF, and lowest in the Hollywood/Wilshire
Corridor with (77,708) SF absorbed.
Absorption SF (in Millions) .731
NET ABSORPTION
Construction SF (in Milliions) 1.3
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h
AVERAGE ASKING LEASE RATE:
A calculated average that only includes monthly
full service gross lease rates, weighted by their cor-
responding square footage. Excludes sub-lease
space.
GROSS LEASES:
Includes all lease types whereby the landlord
assumes responsibility for most, or all, of the oper-
ating expenses and taxes for the property.
MARKET COVERAGE:
Includes all class A and B multi-tenant office proj-
ects 30,000 square feet and greater in size for Los
Angeles County and 10,000 square feet and larger
for Ventura County, excluding government, med-
ical, and owner-user buildings.
NET ABSORPTION:
The change in Occupied Square Feet from one
period to the next.
NET RENTABLE AREA (NRA):
The gross building square footage minus the ele-
vator core, flues, pipe shafts, vertical ducts, bal-
conies and stairwell areas.
OCCUPIED SQUARE FEET:
NRA not considered vacant.
UNDER CONSTRUCTION:
Buildings which have begun construction as evi-
denced by site excavation or foundation work.
VACANCY RATE:
Vacant Square Feet divided by the NRA.
VACANT SQUARE FEET:
NRA which is ready for occupancy within 30 days.
Los Angeles County:
Includes Tri-Cities/Glendale, Downtown Los
Angeles, Hollywood/Wilshire Corridor, San
Fernando Valley, San Gabriel Valley, South Bay
and West Los Angeles.
Greater Los Angeles:
Includes Los Angeles County plus Ventura County.
TOP LOS ANGELES LEASE TRANSACTI ONS
LOS ANGELES SUBMARKET MAP
Location Tenant Size (Sq. Ft.)
El Segundo Mattel 160,000
Agoura Hills THQ, Inc. 103,394
Downtown LA Manufacturer's Bank 69,206
El Segundo Vendare Group 67,000
Downtown LA Quinn Emanuel Urquhart Oliver & Hedges, LLP 45,251
Century City Lehman Brothers 43,000
Chatsworth U.S. Mortgage 37,043
' Copyright 2005 CB Richard Ellis (CBRE) All rights reserved. This report contains information from sources we believe to be reliable, but we make no representation, warranty or guaranty of its accuracy. Opinions, assumptions
and estimates constitute CBRE's judgment as of the date this report is first released and are subject to change without notice. CBRE holds all right, title and interest in this report and the proprietary information contained herein.
This report is published for the use of CBRE and its clients only. Redistribution in whole or part to any third party without the prior written consent of CBRE is strictly prohibited.
Mar ket Vi ew | Los Angel es Of f i ce
LOCAL OFFI CES
BEVERLY HILLS
1840 Century Park East, Suite 700
Los Angeles, California 90067
310.550.2500
CORONA
391 N. Main St., Suite 201
Corona, CA 92880
909.256.2020
EAST SFV/GLENDALE
505 North Brand Blvd., Suite 100
Glendale, California 91203
818.502.6700
INDIAN WELLS
74-770 Highway 111, Suite 101
Indian Wells, California 92210
760.341.5273
LOS ANGELES CENTRAL
500 Citadel Drive, Suite 301
Commerce, California 90040
323.838.3100
LOS ANGELES DOWNTOWN
355 South Grand Ave, Suite 2700
Los Angeles, California 90071
213.613.3242
ONTARIO
4141 Inland Empire Blvd., Suite 100
Ontario, California 91764
909.418.2000
W. SAN FERNANDO VALLEY
15303 Ventura Boulevard, Ste 200
Sherman Oaks, California 91403
818.907.4600
SAN GABRIEL VALLEY
21680 Gateway Center Drive, Suite 120
Diamond Bar, CA 91765
909.859.2900
SANTA BARBARA
1332 Anacapa Street, Suite 110
Santa Barbara, California 93101
805.963.6100
SOUTH BAY
990 West 190th Street, Suite 100
Torrance, California 90502
310.516.2300
VENTURA
5280 Valentine Road, Suite 105
Ventura, California 93003
805.642.7500
2 0 0 5 CB Ri chard El l i s, Inc.
Copyri ght 2 0 0 5 CB Ri chard El l i s (CBRE) Stati sti cs contai ned herei n may represent a di fferent data set than that used to generate N ati onal Vacancy and
Avai l abi l i ty Index stati sti cs publ i shed by CB Ri chard El l i s Corporate Communi cati ons Department or CB Ri chard El l i s research and Econometri c
Forecasti ng uni t, Torto Wheaton Research. Informati on herei n has been obtai ned from sources bel i eved rel i abl e. Whi l e we do not doubt i ts accuracy, we
have not veri fi ed i t and make no guarantee, warranty or representati on about i t. It i s your responsi bi l i ty to i ndependentl y confi rm i ts accuracy and
compl eteness. Any proj ecti ons, opi ni ons, assumpti ons or esti mates used are for exampl e onl y and do not represent the current or future performance of
the market. Thi s i nformati on i s desi gned excl usi vel y for use by CB Ri chard El l i s cl i ents, and cannot be reproduced wi thout pri or wri tten permi ssi on of
CB Ri chard El l i s.
MarketView | Chicago Downtown Office | 1Q 2005
Chicago Downtown Office
FIRST QUARTER 2005
MarketView
Despi te a vel oci ty
of tenants active in
the market, the
trend of rising
vacancy will
conti nue unti l
demand improves
si gni f i cantl y .
QUI CK STATS
Vacancy 15. 7%
Lease Rat es $29.52 G
Net Absor pt i on* ( 936,434)
Const r uct i on 2.32 msf
* The arrows are t rend i ndi cat ors over t he speci f i ed t i me peri od and do not
represent a posi t i ve or negat i ve val ue. ( e. g. , absorpt i on coul d be negat i ve,
but st i l l represent a posi t i ve t rend over a speci f i ed peri od. )
Change f r om l ast
Cur r ent Yr . Qt r .
HOT TOPI CS
The downtown vacancy
rate increased to 15.7%,
the highest recorded since
1996.
O verall net absorption
was reported negative for
the seventh consecutive
quarter coming in at
936,434 square feet.
Adding 1.5 million square
feet to the CBD inventory,
Hyatt Center, 71 S.
Wacker, came online 78%
pre-l eased.
NET LEASES
I ncl udes al l l ease t ypes whereby t he t enant pays an agreed
rent pl us most , or al l , of t he operat i ng expenses and t axes for
t he propert y, i ncl udi ng ut i l i t i es, i nsurance and/ or mai nt enance
expenses.
MARKET COVERAGE
I ncl udes al l compet i t i ve of f i ce bui l di ngs 2 0 , 0 0 0 sf and great er
i n si ze.
NET ABSORPTION
The change i n occupi ed square feet from one peri od t o t he
next .
NET RENTABLE AREA
The gross bui l di ng square foot age mi nus t he el evat or core,
fl ues, pi pe shaft s, vert i cal duct s, bal coni es, and st ai rwel l are as.
Bui l di ng area not consi dered vacant .
UNDER CONSTRUCTI ON
Bui l di ngs whi ch have begun const ruct i on as evi denced by si t e
excavat i on or f oundat i on work.
VACANT SQUARE FEET
Exi st i ng Bui l di ng Area whi ch i s physi cal l y vacant or
i mmedi at el y avai l abl e.
VACANCY RATE
Vacant Bui l di ng Feet di vi ded by t he Net Rent abl e Area.
OVERALL VACANCY RATE
Vacant Bui l di ng Feet pl us subl ease space di vi ded by t he Net
Rent abl e Area.
TOP CHICAGO LEASE TRANSACTIONS
Size (sf) Tenant Address
162,000 Refco Group LLC 550 West Jackson Boulevard
110,155 Lehman Brothers 190 South LaSalle Street
86,000* Trading Tech 222 South Riverside Plaza
61,000 Schwartz, Cooper, et al 180 North LaSalle Street
60,000 Towers Perrin 71 South Wacker Drive
52,777 Charter O ne Bank 71 South Wacker Drive
48,762* National City 1 North Franklin Street
* Renewal / Expansi on
CHICAGO SUBMARKET MAP
For more i nformat i on regardi ng t he
Market Vi ew, pl ease cont act :
Kel l y Badhwar, Research Manager
CB Ri chard El l i s
3 1 1 Sout h Wacker Dri ve, Sui t e 4 0 0 , Chi cago, I l l i noi s 6 0 6 0 6
T. 3 1 2 .9 3 5 .1 4 0 0 F. 3 1 2 .9 3 5 .1 8 8 0
Kel l y.Badhwar@ cbre.com
The Chicago downtown office market has yet

to register any signs of recovery since the
downturn i n 2000, and the fi rst quarter of
2005 was no exception. With the completion
of the Hyatt Center addi ng over 300, 000
square feet of di rect space to the overal l 18. 9
million square feet of direct vacant space
downtown, the quarter exhibited an increase
of 1.0 percentage point reporting an overall
vacancy rate of 15.7%. This is the highest
rate reported since 1996 and significantly
hi gher than the 13. 4% reported duri ng the
first quarter of 2004.
Despite a high vacancy rate, a fair amount of
leasing activity transpired during the quarter
driven mostly by early renewals and
extensions. Tenants in the 15,000 to 20,000-
square-foot range dominated the activity with
professional services firms, in particular,
among the most acti ve. A total of 22.8 mi l l i on
square feet of space, direct and sublease, was
available across Chicago s CBD.
For the seventh consecutive quarter, the
downtown market reported overall negative
net absorpti on of 936, 434 square feet. Thi s
i s i n compari son to the negati ve 82, 635
square feet noted at fourth quarter 2004 and
negative 20,006 square feet at first quarter
2004.
O f the factors contributing to the CBD s
inability to post positive net absorption, the
vel oci ty of tenants acti ve i n the market are not
signing for additional space, but are merely
making lateral moves from submarket to
submarket.
Demand for downtown office properties
persisted vigorously during the quarter. O ne
example was Zeller Realty Group and ING s
sal e of the hi stori c 27-story Burnham Center.
TIC Properties purchased the property for
$71.9 million or $118 per square foot.
Buildings put on the market first quarter
included 550 W. Jackson, 250 S. Wabash,
225 W. Washington and 200 N. LaSalle.
There were some encouraging signs during
the quarter that corporations are still looking
at Chicago as an attractive home for their
headquarters. Vernon Hills-based CDW is
looking to move its sales offices at 10 S.
Ri versi de Pl aza and 120 S. Ri versi de to one
larger downtown location as it expands to
200,000 square feet, a 39% increase.
Chicago was also one of two other cities vying
to land the corporate headquarters of
Freescale Semiconductor, Inc., a recent
Motorola spin-off and Fortune 500 company,
however losing out to Austin, TX.
Vacancy Rat e 15.7%
Lease Rate $ 29.52 G
- 1 %
1 %
3 %
5 %
7 %
9 %
1 1 %
1 3 %
1 5 %
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CB Richard Ellis | Chicago Downtown O ffice | 1Q 2005 CB Richard Ellis | Chicago Downtown O ffice | 1Q 2005
2 0 0 5 CB Ri chard El l i s, Inc. 2 0 0 5 CB Ri chard El l i s, Inc.
West Loop 3 8 , 8 8 6 , 1 7 2 1 6 . 6 % ( 4 6 8 , 2 0 9 ) 1 , 4 7 0 , 0 0 0 2 0 . 6 %
Cl ass A 2 5 , 1 4 4 , 6 9 5 1 4 . 6 % ( 1 6 8 , 5 3 7 ) 1 , 4 7 0 , 0 0 0 $ 1 5 - $ 2 5 2 2 . 3 %
Cl ass B 9 , 3 9 4 , 2 6 8 2 2 . 5 % ( 2 7 4 , 0 8 9 ) $ 7 - $ 1 4 3 3 . 4 %
Cl ass C 4 , 3 4 7 , 2 0 9 1 5 . 8 % ( 2 5 , 5 8 3 ) $ 6 - $ 1 2 1 9 . 5 %
Cent ral Loop 4 0 , 7 6 3 , 2 6 2 1 3 . 7 % ( 1 8 2 , 2 7 8 ) 8 5 0 ,0 0 0 1 6 . 9 %
Cl ass A 1 5 , 2 5 5 , 6 2 3 1 5 . 3 % ( 5 2 , 5 6 7 ) 8 5 0 ,0 0 0 $ 1 2 - $ 2 3 2 5 . 8 %
Cl ass B 1 6 , 6 2 7 , 2 3 6 1 1 . 9 % ( 3 1 9 , 2 3 1 ) $ 7 - $ 1 3 1 9 . 2 %
Cl ass C 8 , 8 8 0 , 4 0 3 1 4 . 4 % 1 8 9 , 5 2 0 $ 5 - $10 18. 3%
East Loop 2 2 , 1 4 1 , 7 1 1 1 8 . 1 % ( 3 2 6 , 7 0 5 ) 2 1 . 7 %
Cl ass A 5 , 9 3 0 , 8 3 6 1 4 . 6 % 7 1 , 9 1 5 $ 1 1 - $ 2 1 2 7 . 9 %
Cl ass B 1 0 , 0 8 2 , 8 3 5 2 1 . 7 % ( 4 0 1 , 8 2 5 ) $ 7 - $14 2 6 . 7 %
Cl ass C 6 , 1 2 8 , 0 4 0 1 5 . 7 % 3 , 2 0 5 $ 5 - $10 1 9 . 7 %
Nort h Mi chi gan 1 1 , 9 0 9 , 5 8 6 1 1 . 3 % 7 3 , 5 1 8 1 3 . 9 %
Cl ass A 4 , 3 5 7 , 1 6 8 1 3 . 0 % 5 5 , 0 4 2 $ 1 1 - $ 2 1 2 0 . 8 %
Cl ass B 6 , 6 8 5 , 7 1 1 1 1 . 1 % 2 3 , 4 3 6 $ 8 - $15 2 0 . 1 %
Cl ass C 8 6 6 , 7 0 7 4 . 5 % ( 4 , 9 6 0 ) $ 7 - $13 4 . 7 %
Ri ver Nort h 4 , 4 5 5 , 0 5 2 2 5 . 9 % ( 3 2 , 7 6 0 ) 3 1 . 6 %
Cl ass A 3 8 2 , 4 3 6 2 7 . 3 % 5 , 1 0 1 $ 1 0 - $ 1 6 3 3 . 6 %
Cl ass B 2 , 4 5 9 , 1 1 1 3 4 . 6 % ( 4 7 , 8 4 6 ) $ 8 - $13 4 5 . 1 %
Cl ass C 1 , 6 1 3 , 5 0 5 1 2 . 3 % 9 , 9 8 5 $ 6 - $11 1 7 . 2 %
Chi cago CBD 118,155,783 15.7% ( 936,434) 2,320,000 19.3%
Mar k et
Rent abl e
Ar ea
Di r ect
Vacancy
Rate %
Net
Absor pti on
SF
Under
Const r uct i on SF
Aver age Aski ng
Net Lease Rat e $
SF/ YR
Over al l Vacancy
Rate%
UNEMPLOYMENT RATE
The U.S. economy offered a mixed picture as to the true state of
the nation s hiring climate. According to the Bureau of Labor
Statistics, the labor market did support a decrease in both the
number of unemployed persons, 7.7 million, and the
unemployment rate, 5.4%, nationally. The Illinois Department of
Employment Security (IDES) reported, in February, total jobs in the
Chicago metro area rose 24,600 and five industry sectors
experienced employment growth in a majority of metro areas. The
IDES also reported a decrease in the Chicago metro
unemployment rate of 0.1 point to 6.4% in February.
The U.S. Bureau of Economic Analysis showed gross domestic
product (GDP) grew at an annual rate of 3.8% in the fourth
quarter of 2004. Il l i noi s per- capita income grew 4.2% in 2004,
the highest rate in four years but much lower in comparison to the
rest of the nation, according to the Bureau.
VACANCY & NET ABSORPTI ON
Absor pt i on sf ( 936,434)
Vacancy 15.7%
For the first quarter, overall, the CBD vacancy rate increased 1.0 percentage
point from the fourth quarter 2004, registering at 15.7%. Adding in
sublease space, that number rises to 19.3%. The addition of approximately
300,000 square feet to the CBD inventory with Hyatt Center s arrival was
the main contribution to the negative 936,434 square feet of negative net
absorption and to the 18.6 million square feet of direct office space vacant
reported during the quarter.
Breaking the vacancy rate down by submarket, the East Loop came in with
the highest rate of 18.1%. North Michigan Avenue showed the lowest rate
decreasing to 11.3%. The North Michigan Ave submarket was the only to
post positive net absorption registering 73,518 square feet. Coinciding with
the Hyatt Center s completion, the West Loop posted the highest negative
net absorption at 468,209 square feet.
Rental rates have yet to show much increase as excess space remains in all
submarkets. Class A lease rates vary in each submarket, with the highest
rates reported in the West Loop, the favored submarket. When considering
each submarket, West Loop reported $15-$25 net per square foot; Central
Loop came in at $12 -$23 net per square foot; East Loop registered $11-
$21 net per square foot; North Michigan Ave reported $11-$21 net per
square foot; and River North came in at $10-$16 net per square foot.
Minimal change is demonstrated from the fourth quarter 2004, with the
exception of North Michigan Avenue which is fetching almost $2 more per
square foot.
AVERAGE ASKI NG LEASE RATES
CONSTRUCTI ON ACTI VI TY
The highly anticipated delivery of the 1.5-million-square-foot Hyatt Center at
71 S. Wacker was the only construction activity to report during the first
quarter. The building opened 77% pre-leased. No new buildings broke
ground in Chicago s CBD, but two additional buildings are slated for
completion in 2005 O ne S. Dearborn and 111 S. Wacker. These two
buildings will add over 11.8 million square feet to downtowns inventory once
brought online. O n the conceptual side, developer Steven Fifield has given
the city plans for a 38-story building at 601 W. Monroe and Development
Resources Inc. began marketing a proposed 15-story building at 120 N.
Jefferson.
MARKET OUTLOOK
The trend of a rising vacancy rate will continue
throughout 2005 as the new construction comes
online adding additional space to the CBD. With
both new buildings located in the West Loop, that
submarket will experience its highest vacancy in recent
quarters but should also retain its position as most
coveted as tenants desire premium space close to
transportation. Additional demand will persist from
companies looking to take advantage of the weak
market and capitalize on upgrading to better
l ocati ons.
O ffice landlords are anxious to see improvement in
hiring trends and while the national economy added
more than 81,000 jobs in February, Chicago still lags
the overall market in hiring. Some hope can be
derived from the expansion recently noted by
professional services firms, but employers are hiring
cautiously and stringently examining space needs
before expanding.
Despite the high vacancy abundant downtown and
lack of a large driver for demand, developers remain
interested in pursuing new space for growth
downtown. Without an increase in demand,
additional construction will put more pressure on an
already saturated CBD market.
Chi cago 6.4%
I L St at e 6.5%
US 5.4%
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CB Richard Ellis | Chicago Downtown O ffice | 1Q 2005 CB Richard Ellis | Chicago Downtown O ffice | 1Q 2005
2 0 0 5 CB Ri chard El l i s, Inc. 2 0 0 5 CB Ri chard El l i s, Inc.
West Loop 3 8 , 8 8 6 , 1 7 2 1 6 . 6 % ( 4 6 8 , 2 0 9 ) 1 , 4 7 0 , 0 0 0 2 0 . 6 %
Cl ass A 2 5 , 1 4 4 , 6 9 5 1 4 . 6 % ( 1 6 8 , 5 3 7 ) 1 , 4 7 0 , 0 0 0 $ 1 5 - $ 2 5 2 2 . 3 %
Cl ass B 9 , 3 9 4 , 2 6 8 2 2 . 5 % ( 2 7 4 , 0 8 9 ) $ 7 - $ 1 4 3 3 . 4 %
Cl ass C 4 , 3 4 7 , 2 0 9 1 5 . 8 % ( 2 5 , 5 8 3 ) $ 6 - $ 1 2 1 9 . 5 %
Cent ral Loop 4 0 , 7 6 3 , 2 6 2 1 3 . 7 % ( 1 8 2 , 2 7 8 ) 8 5 0 ,0 0 0 1 6 . 9 %
Cl ass A 1 5 , 2 5 5 , 6 2 3 1 5 . 3 % ( 5 2 , 5 6 7 ) 8 5 0 ,0 0 0 $ 1 2 - $ 2 3 2 5 . 8 %
Cl ass B 1 6 , 6 2 7 , 2 3 6 1 1 . 9 % ( 3 1 9 , 2 3 1 ) $ 7 - $ 1 3 1 9 . 2 %
Cl ass C 8 , 8 8 0 , 4 0 3 1 4 . 4 % 1 8 9 , 5 2 0 $ 5 - $10 18. 3%
East Loop 2 2 , 1 4 1 , 7 1 1 1 8 . 1 % ( 3 2 6 , 7 0 5 ) 2 1 . 7 %
Cl ass A 5 , 9 3 0 , 8 3 6 1 4 . 6 % 7 1 , 9 1 5 $ 1 1 - $ 2 1 2 7 . 9 %
Cl ass B 1 0 , 0 8 2 , 8 3 5 2 1 . 7 % ( 4 0 1 , 8 2 5 ) $ 7 - $14 2 6 . 7 %
Cl ass C 6 , 1 2 8 , 0 4 0 1 5 . 7 % 3 , 2 0 5 $ 5 - $10 1 9 . 7 %
Nort h Mi chi gan 1 1 , 9 0 9 , 5 8 6 1 1 . 3 % 7 3 , 5 1 8 1 3 . 9 %
Cl ass A 4 , 3 5 7 , 1 6 8 1 3 . 0 % 5 5 , 0 4 2 $ 1 1 - $ 2 1 2 0 . 8 %
Cl ass B 6 , 6 8 5 , 7 1 1 1 1 . 1 % 2 3 , 4 3 6 $ 8 - $15 2 0 . 1 %
Cl ass C 8 6 6 , 7 0 7 4 . 5 % ( 4 , 9 6 0 ) $ 7 - $13 4 . 7 %
Ri ver Nort h 4 , 4 5 5 , 0 5 2 2 5 . 9 % ( 3 2 , 7 6 0 ) 3 1 . 6 %
Cl ass A 3 8 2 , 4 3 6 2 7 . 3 % 5 , 1 0 1 $ 1 0 - $ 1 6 3 3 . 6 %
Cl ass B 2 , 4 5 9 , 1 1 1 3 4 . 6 % ( 4 7 , 8 4 6 ) $ 8 - $13 4 5 . 1 %
Cl ass C 1 , 6 1 3 , 5 0 5 1 2 . 3 % 9 , 9 8 5 $ 6 - $11 1 7 . 2 %
Chi cago CBD 118,155,783 15.7% ( 936,434) 2,320,000 19.3%
Mar k et
Rent abl e
Ar ea
Di r ect
Vacancy
Rate %
Net
Absor pti on
SF
Under
Const r uct i on SF
Aver age Aski ng
Net Lease Rat e $
SF/ YR
Over al l Vacancy
Rate%
UNEMPLOYMENT RATE
The U.S. economy offered a mixed picture as to the true state of
the nation s hiring climate. According to the Bureau of Labor
Statistics, the labor market did support a decrease in both the
number of unemployed persons, 7.7 million, and the
unemployment rate, 5.4%, nationally. The Illinois Department of
Employment Security (IDES) reported, in February, total jobs in the
Chicago metro area rose 24,600 and five industry sectors
experienced employment growth in a majority of metro areas. The
IDES also reported a decrease in the Chicago metro
unemployment rate of 0.1 point to 6.4% in February.
The U.S. Bureau of Economic Analysis showed gross domestic
product (GDP) grew at an annual rate of 3.8% in the fourth
quarter of 2004. Il l i noi s per- capita income grew 4.2% in 2004,
the highest rate in four years but much lower in comparison to the
rest of the nation, according to the Bureau.
VACANCY & NET ABSORPTI ON
Absor pt i on sf ( 936,434)
Vacancy 15.7%
For the first quarter, overall, the CBD vacancy rate increased 1.0 percentage
point from the fourth quarter 2004, registering at 15.7%. Adding in
sublease space, that number rises to 19.3%. The addition of approximately
300,000 square feet to the CBD inventory with Hyatt Center s arrival was
the main contribution to the negative 936,434 square feet of negative net
absorption and to the 18.6 million square feet of direct office space vacant
reported during the quarter.
Breaking the vacancy rate down by submarket, the East Loop came in with
the highest rate of 18.1%. North Michigan Avenue showed the lowest rate
decreasing to 11.3%. The North Michigan Ave submarket was the only to
post positive net absorption registering 73,518 square feet. Coinciding with
the Hyatt Center s completion, the West Loop posted the highest negative
net absorption at 468,209 square feet.
Rental rates have yet to show much increase as excess space remains in all
submarkets. Class A lease rates vary in each submarket, with the highest
rates reported in the West Loop, the favored submarket. When considering
each submarket, West Loop reported $15-$25 net per square foot; Central
Loop came in at $12 -$23 net per square foot; East Loop registered $11-
$21 net per square foot; North Michigan Ave reported $11-$21 net per
square foot; and River North came in at $10-$16 net per square foot.
Minimal change is demonstrated from the fourth quarter 2004, with the
exception of North Michigan Avenue which is fetching almost $2 more per
square foot.
AVERAGE ASKI NG LEASE RATES
The highly anticipated delivery of the 1.5-million-square-foot Hyatt Center at
71 S. Wacker was the only construction activity to report during the first
quarter. The building opened 77% pre-leased. No new buildings broke
ground in Chicago s CBD, but two additional buildings are slated for
completion in 2005 O ne S. Dearborn and 111 S. Wacker. These two
buildings will add over 11.8 million square feet to downtowns inventory once
brought online. O n the conceptual side, developer Steven Fifield has given
the city plans for a 38-story building at 601 W. Monroe and Development
Resources Inc. began marketing a proposed 15-story building at 120 N.
Jefferson.
MARKET OUTLOOK
The trend of a rising vacancy rate will continue
throughout 2005 as the new construction comes
online adding additional space to the CBD. With
both new buildings located in the West Loop, that
submarket will experience its highest vacancy in recent
quarters but should also retain its position as most
coveted as tenants desire premium space close to
transportation. Additional demand will persist from
companies looking to take advantage of the weak
market and capitalize on upgrading to better
l ocati ons.
O ffice landlords are anxious to see improvement in
hiring trends and while the national economy added
more than 81,000 jobs in February, Chicago still lags
the overall market in hiring. Some hope can be
derived from the expansion recently noted by
professional services firms, but employers are hiring
cautiously and stringently examining space needs
before expanding.
Despite the high vacancy abundant downtown and
lack of a large driver for demand, developers remain
interested in pursuing new space for growth
downtown. Without an increase in demand,
additional construction will put more pressure on an
already saturated CBD market.
Chi cago 6.4%
I L St at e 6.5%
US 5.4%
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2 0 0 5 CB Ri chard El l i s, Inc.
Copyri ght 2 0 0 5 CB Ri chard El l i s (CBRE) Stati sti cs contai ned herei n may represent a di fferent data set than that used to generate N ati onal Vacancy and
Avai l abi l i ty Index stati sti cs publ i shed by CB Ri chard El l i s Corporate Communi cati ons Department or CB Ri chard El l i s research and Econometri c
Forecasti ng uni t, Torto Wheaton Research. Informati on herei n has been obtai ned from sources bel i eved rel i abl e. Whi l e we do not doubt i ts accuracy, we
have not veri fi ed i t and make no guarantee, warranty or representati on about i t. It i s your responsi bi l i ty to i ndependentl y confi rm i ts accuracy and
compl eteness. Any proj ecti ons, opi ni ons, assumpti ons or esti mates used are for exampl e onl y and do not represent the current or future performance of
the market. Thi s i nformati on i s desi gned excl usi vel y for use by CB Ri chard El l i s cl i ents, and cannot be reproduced wi thout pri or wri tten permi ssi on of
CB Ri chard El l i s.
MarketView | Chicago Downtown Office | 1Q 2005
Chicago Downtown Office
FIRST QUARTER 2005
MarketView
Despi te a vel oci ty
of tenants active in
the market, the
trend of rising
vacancy will
conti nue unti l
demand improves
si gni f i cantl y .
QUI CK STATS
Vacancy 15. 7%
Lease Rat es $29.52 G
Net Absor pt i on* ( 936,434)
Const r uct i on 2.32 msf
* The arrows are t rend i ndi cat ors over t he speci f i ed t i me peri od and do not
represent a posi t i ve or negat i ve val ue. ( e. g. , absorpt i on coul d be negat i ve,
but st i l l represent a posi t i ve t rend over a speci f i ed peri od. )
Change f r om l ast
Cur r ent Yr . Qt r .
HOT TOPI CS
The downtown vacancy
rate increased to 15.7%,
the highest recorded since
1996.
O verall net absorption
was reported negative for
the seventh consecutive
quarter coming in at
936,434 square feet.
Adding 1.5 million square
feet to the CBD inventory,
Hyatt Center, 71 S.
Wacker, came online 78%
pre-l eased.
NET LEASES
rent pl us most , or al l , of t he operat i ng expenses and t axes for
expenses.
MARKET COVERAGE
I ncl udes al l compet i t i ve of f i ce bui l di ngs 2 0 , 0 0 0 sf and great er
i n si ze.
NET ABSORPTION
The change i n occupi ed square feet from one peri od t o t he
next .
NET RENTABLE AREA
The gross bui l di ng square foot age mi nus t he el evat or core,
fl ues, pi pe shaft s, vert i cal duct s, bal coni es, and st ai rwel l are as.
UNDER CONSTRUCTI ON
excavat i on or f oundat i on work.
VACANT SQUARE FEET
VACANCY RATE
OVERALL VACANCY RATE
Vacant Bui l di ng Feet pl us subl ease space di vi ded by t he Net
Rent abl e Area.
TOP CHICAGO LEASE TRANSACTIONS
Size (sf) Tenant Address
162,000 Refco Group LLC 550 West Jackson Boulevard
110,155 Lehman Brothers 190 South LaSalle Street
86,000* Trading Tech 222 South Riverside Plaza
61,000 Schwartz, Cooper, et al 180 North LaSalle Street
60,000 Towers Perrin 71 South Wacker Drive
52,777 Charter O ne Bank 71 South Wacker Drive
48,762* National City 1 North Franklin Street
* Renewal / Expansi on
CHICAGO SUBMARKET MAP
Kel l y Badhwar, Research Manager
3 1 1 Sout h Wacker Dri ve, Sui t e 4 0 0 , Chi cago, I l l i noi s 6 0 6 0 6
T. 3 1 2 .9 3 5 .1 4 0 0 F. 3 1 2 .9 3 5 .1 8 8 0
Kel l y.Badhwar@ cbre.com
The Chicago downtown office market has yet

to register any signs of recovery since the
downturn i n 2000, and the fi rst quarter of
2005 was no exception. With the completion
of the Hyatt Center addi ng over 300, 000
square feet of di rect space to the overal l 18. 9
million square feet of direct vacant space
downtown, the quarter exhibited an increase
of 1.0 percentage point reporting an overall
vacancy rate of 15.7%. This is the highest
rate reported since 1996 and significantly
hi gher than the 13. 4% reported duri ng the
first quarter of 2004.
Despite a high vacancy rate, a fair amount of
leasing activity transpired during the quarter
driven mostly by early renewals and
extensions. Tenants in the 15,000 to 20,000-
square-foot range dominated the activity with
professional services firms, in particular,
among the most acti ve. A total of 22.8 mi l l i on
square feet of space, direct and sublease, was
available across Chicago s CBD.
For the seventh consecutive quarter, the
downtown market reported overall negative
net absorpti on of 936, 434 square feet. Thi s
i s i n compari son to the negati ve 82, 635
square feet noted at fourth quarter 2004 and
negative 20,006 square feet at first quarter
2004.
O f the factors contributing to the CBD s
inability to post positive net absorption, the
vel oci ty of tenants acti ve i n the market are not
signing for additional space, but are merely
making lateral moves from submarket to
submarket.
Demand for downtown office properties
persisted vigorously during the quarter. O ne
example was Zeller Realty Group and ING s
sal e of the hi stori c 27-story Burnham Center.
TIC Properties purchased the property for
$71.9 million or $118 per square foot.
Buildings put on the market first quarter
included 550 W. Jackson, 250 S. Wabash,
225 W. Washington and 200 N. LaSalle.
There were some encouraging signs during
the quarter that corporations are still looking
at Chicago as an attractive home for their
headquarters. Vernon Hills-based CDW is
looking to move its sales offices at 10 S.
Ri versi de Pl aza and 120 S. Ri versi de to one
larger downtown location as it expands to
200,000 square feet, a 39% increase.
Chicago was also one of two other cities vying
to land the corporate headquarters of
Freescale Semiconductor, Inc., a recent
Motorola spin-off and Fortune 500 company,
however losing out to Austin, TX.
Vacancy Rat e 15.7%
Lease Rate $ 29.52 G
- 1 %
1 %
3 %
5 %
7 %
9 %
1 1 %
1 3 %
1 5 %
4
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/
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Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herei n may represent a di fferent data set than that used to generate National Vacancy and
Availability Index statistics published by CB Richard Ellis Cor porate Communications Department or CB Richard Ellis research and Econometri c
Forecasting unit, Torto Wheaton Research. Information herein has been obtai ned from sources bel i eved rel i abl e. Whi l e we do not d oubt its accuracy, we
completeness. Any projections, opinions, assumptions or estimates used are for exampl e onl y and do not represent the current or future performance of
the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior wri tten permi ssi on of
CB Richard Ellis.
MarketView | Indi anapol i s Downtown Offi ce
FIRST QUARTER 2005
Indi anapol i s Downtown Offi ce
MarketView
The Indi anapol i s Downtown O ffi ce Market
experi enced a sl i ght reversal from the
previ ous posi ti ve trend set duri ng the fourth
quarter of 2004. The vacancy rate
i ncreased 0. 05% to 15. 35%. Average
rental rates were al so affected droppi ng
al most $0. 20 a square foot to $16. 81.
Duri ng the fi rst quarter of 2005 the
Indi anapol i s Downtown O ffi ce Market
remai ned rel ati vel y fl at wi th an absorpti on
of 5, 562 square feet.
Basi cal l y, downtown offi ce space i s trul y a
tenant s market, hampered by a l ack of j ob
creati on and certai n i nfrastructure assets,
such as mass transi t. Parki ng expenses can
add $4 to $5 a square foot on l ease costs
for downtown space, but that i s frequentl y
offset when touti ng ameni ti es, i ncl udi ng
dozens of restaurants and retai l shops that
are accessi bl e wi thi n wal ki ng di stance from
most offi ces and the concentrati on of ci ty
and state government.
The Downtown O ffi ce Market has seen an
i ncrease i n demand from fi nanci al
i nsti tuti ons. Many banki ng i nsti tuti ons have
started searchi ng for addi ti onal space whi l e
others have upgraded thei r exi sti ng space.
There has al so been i nterest from new
i nsti tuti ons l ooki ng to make a foothol d i n
the Indi anapol i s market.
Leasi ng concessi ons remai n stabl e wi th free
rent and above standard fi ni shes bei ng the
most favored. Most Cl ass A and B
bui l di ngs have upgraded thei r ameni ti es
over the l ast coupl e of years to i ncl ude
thi ngs such as new and/ or i mproved fi tness
faci l i ti es and better food servi ce i n order to
stay competi ti ve.
With all of the new projects slated for
downtown the market i s pri med for an
upswi ng. Key addi ti ons to the market are
the new Si mon headquarters, pl ans for a
new stadi um and upgraded conventi on
center and many of the new resi denti al
proj ects underway.
QUI CK STATS
Vacancy 15.35%
Lease Rat es $16.81
Net Absor pt i on* - 5,562 SF
* The arrows are t rend i ndi cat ors over t he speci fi ed t i me peri o d and do not
represent a posi t i ve or negat i ve val ue. ( e.g., absorpt i on coul d be negati ve,
but st i l l represent a posi t i ve t rend over a speci fi ed peri od.)
Change f r om last
Current Yr . Qtr.
AVERAGE ASKI NG LEASE RATE
Rat e det ermi ned by mul t i pl yi ng t he aski ng net l ease rat e f or
each bui l di ng by i t s avai l abl e space, summi ng t he product s,
t hen di vi di ng by t he sum of t he avai l abl e space wi t h net l eases
f or al l bui l di ngs i n t he summary.
NET LEASES
rent pl us most , or al l , of t he operat i ng expenses and t axes f or
expenses.
MARKET COVERAGE
I ncl udes al l compet i t i ve of f i ce bui l di ngs 1 0 , 0 0 0 square f eet
and great er i n si ze.
NET ABSORPTI ON
The change i n occupi ed square f eet f rom one peri od t o t he
next.
NET RENTABLE AREA
The gross bui l di ng square f oot age mi nus t he el evat or core,
fl ues, pi pe shaft s, vert i cal duct s, bal coni es, and st ai rwel l are a s.
OCCUPI ED SQUARE FEET
UNDER CONSTRUCTI ON
excavat i on or foundat i on work.
AVAI LABLE SQUARE FEET
Avai l abl e Bui l di ng Area whi ch i s ei t her physi cal l y vacant or
occupi ed.
AVAI LABI LI TY RATE
Avai l abl e Square Feet di vi ded by t he Net Rent abl e Area.
VACANT SQUARE FEET
VACANCY RATE
NORMALI ZATI ON
Due t o a recl assi f i cat i on of t he market , t he base, number and
square f oot age of bui l di ngs of previ ous quart ers have been
adj ust ed t o mat ch t he current base. Avai l abi l i t y and Vacancy
f i gures f or t hose bui l di ngs have been adj ust ed i n previ ous
quarters.
INDIANAPOLIS OFFICE BROKERS
INDIANAPOLIS SUBMARKET MAP
Vacancy Rat e 15.35%
Lease Rate $ 16.81
Zach W. Ford, Research Coordi nat or- Of f i ce
1 1 5 West Washi ngt on St reet , Sui t e 1 1 7 0 Sout h
I ndi anapol i s, I ndi ana 4 6 2 0 4
T. 3 1 7 . 2 6 9 . 1 0 0 5 F. 3 1 7 . 6 3 7 . 4 4 0 4
zach.ford@ cbre.com
0 %
5 %
1 0 %
1 5 %
2 0 %
2 5 %
1
Q
9
9
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Q
9
9
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Q
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0
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$

p
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S
q
u
a
r
e

F
e
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t
Nick Arterburn ni ck.arterburn @cbre.com 317.269.1028
Andy Bani ster andrew.banister@cbre.com 317.269.1022
Zane Brown zane.brown@cbre.com 317.269.1116
Greg Carter greg.carter@cbre.com 317.269.1048
Crystal Houston crystal.houston @cbre.com 317.269.1099
Tim Hull tim.hull@cbre.com 317.269.1035
Tim O Brien tim. obri en@cbre.com 317.269.1033
Tom Ott tom. ott@cbre.com 317.269.1036
Yumi Prater yumi.prater@cbre.com 317.269.1031
Dan Richardson dan. richardson@cbre.com 317.269.1043
R.J. Rudol ph rj. rudolph@cbre.com 317.269.1026
Ed Troha ed. troha@cbre.com 317.269.1063
John Vandenbark john. vandenbark@cbre.com 317.269.1046
HOT TOPI CS
Li f e Sci ences sect or gai ns moment um.
Resi dent i al demand cont i nues t o t hri ve.
CB Richard Ellis | Indianapolis Downtown O ffice MarketVi ew| 1Q 2005 CB Richard Ellis | Indianapolis Downtown O ffice MarketVi ew| 1Q 2005
Mar ket
Rent abl e
Ar ea
Vacancy
Rat e %
Net
Absor pt i on
SF
Under
Constr ucti on SF
Aver age Aski ng
Lease Rat e $
SF/ YR
Avai l abi l i t y
Rat e %
UNEMPLOYMENT RATE
I ndi anapol i s 6.0%
IN State 5.7%
US 5.4%
Throughout 2003 and 2004 the Indianapolis unemployment rate
was consistently below the national average, this trend was reversed
in this quarter. As of February 2005, the unemployment rate for
Indianapolis was 6.0%, compared to the national rate of 5.4%.
VACANCY/ AVAI LABI LI TY/ NET ABSORPTI ON
Vacancy 15.35%
Avai l abi l i t y 15.36%
Absor pti on -5, 562
The overall vacancy rate for downtown office space slightly increased to
15.35% in the first quarter of 2005, an increase of 0.05% from th e
fourth quarter of 2004. The first quarter of 2005 showed a signi fi cant
decrease of 2.25% when compared to the vacancy rate of first quarter
2004. The vacancy rate for Class A space decreased to 13.15%, Cl ass
B increased to 13.47%, while Class C buildings increased to 24.81%.
The slight increase in vacancy rate gave way to a absorption of 5,562
square feet for the Downtown O ffice Market during the first quarter of
2005.
Average rental rates for the Downtown O ffice Market during the first
quarter of 2005 dipped to $16.81 from fourth quarter s 2004 rate of
$16.97.
AVERAGE ASKI NG LEASE RATES Aver age Ask i ng Lease Rat e $16.65
There was no new construction in the downtown multi-tenant office
market in the first quarter of 2005.
MARKET OUTLOOK
Given the upcoming developments for
Indy s downtown area, the office market is
well positioned to change. With the new
stadium planned and the expansion of the
convention center, many of the current
downtown properties could become
redevelopment opportunities. The Life
Sciences and Healthcare sectors continue
to increase and there is every indication
that residential development will continue
to thrive. This environment also encourages
the influx of restaurants and service
support in the area and reinforces the
appeal for prospective tenants.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1
Q
0
3
2
Q
0
3
3
Q
0
3
4
Q
0
3
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0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
%
V
a
c
a
n
c
y
/
A
v
a
ila
b
ilit
y
( 1 2 0 , 0 0 0 )
( 1 0 0 , 0 0 0 )
(80,000)
(60,000)
(40,000)
(20,000)
0
2 0 ,0 0 0
4 0 ,0 0 0
6 0 ,0 0 0
N
e
t
A
b
s
o
r
p
t
i
o
n
$16.60
$16.70
$16.80
$16.90
$17.00
$17.10
$17.20
3
Q
0
3
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1 0 0 , 0 0 0
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
S
q
u
a
r
e

F
e
e
t
Class A 6,607,490 13.15% 1,004 0 $19.12 13.15%
Class B 2,165,770 13.47% (3,267) 0 $15.99 13.53%
Class C 1,971,678 24.81% (3,298) 0 $13.52 24.81%
Market Total 10,744,938 15.35% (5,562) 0 $16.81 15.36%
CB Richard Ellis | Indianapolis Downtown O ffice MarketVi ew| 1Q 2005 CB Richard Ellis | Indianapolis Downtown O ffice MarketVi ew| 1Q 2005
Mar ket
Rent abl e
Ar ea
Vacancy
Rat e %
Net
Absor pt i on
SF
Under
Constr ucti on SF
Aver age Aski ng
Lease Rat e $
SF/ YR
Avai l abi l i t y
Rat e %
UNEMPLOYMENT RATE
I ndi anapol i s 6.0%
IN State 5.7%
US 5.4%
Throughout 2003 and 2004 the Indianapolis unemployment rate
was consistently below the national average, this trend was reversed
in this quarter. As of February 2005, the unemployment rate for
Indianapolis was 6.0%, compared to the national rate of 5.4%.
VACANCY/ AVAI LABI LI TY/ NET ABSORPTI ON
Vacancy 15.35%
Avai l abi l i t y 15.36%
Absor pti on -5, 562
The overall vacancy rate for downtown office space slightly increased to
15.35% in the first quarter of 2005, an increase of 0.05% from th e
fourth quarter of 2004. The first quarter of 2005 showed a signi fi cant
decrease of 2.25% when compared to the vacancy rate of first quarter
2004. The vacancy rate for Class A space decreased to 13.15%, Cl ass
B increased to 13.47%, while Class C buildings increased to 24.81%.
The slight increase in vacancy rate gave way to a absorption of 5,562
square feet for the Downtown O ffice Market during the first quarter of
2005.
Average rental rates for the Downtown O ffice Market during the first
quarter of 2005 dipped to $16.81 from fourth quarter s 2004 rate of
$16.97.
AVERAGE ASKI NG LEASE RATES Aver age Ask i ng Lease Rat e $16.65
There was no new construction in the downtown multi-tenant office
market in the first quarter of 2005.
MARKET OUTLOOK
Given the upcoming developments for
Indy s downtown area, the office market is
well positioned to change. With the new
stadium planned and the expansion of the
convention center, many of the current
downtown properties could become
redevelopment opportunities. The Life
Sciences and Healthcare sectors continue
to increase and there is every indication
that residential development will continue
to thrive. This environment also encourages
the influx of restaurants and service
support in the area and reinforces the
appeal for prospective tenants.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1
Q
0
3
2
Q
0
3
3
Q
0
3
4
Q
0
3
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
0 %
5 %
1 0 %
1 5 %
2 0 %
2 5 %
1
Q
0
3
2
Q
0
3
3
Q
0
3
4
Q
0
3
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
%
V
a
c
a
n
c
y
/
A
v
a
ila
b
ilit
y
( 1 2 0 , 0 0 0 )
( 1 0 0 , 0 0 0 )
(80,000)
(60,000)
(40,000)
(20,000)
0
2 0 ,0 0 0
4 0 ,0 0 0
6 0 ,0 0 0
N
e
t
A
b
s
o
r
p
t
i
o
n
$16.60
$16.70
$16.80
$16.90
$17.00
$17.10
$17.20
3
Q
0
3
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1 0 0 , 0 0 0
1
Q
0
4
2
Q
0
4
3
Q
0
4
4
Q
0
4
1
Q
0
5
S
q
u
a
r
e

F
e
e
t
Class A 6,607,490 13.15% 1,004 0 $19.12 13.15%
Class B 2,165,770 13.47% (3,267) 0 $15.99 13.53%
Class C 1,971,678 24.81% (3,298) 0 $13.52 24.81%
Market Total 10,744,938 15.35% (5,562) 0 $16.81 15.36%
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herei n may represent a di fferent data set than that used to generate National Vacancy and
Availability Index statistics published by CB Richard Ellis Cor porate Communications Department or CB Richard Ellis research and Econometri c
Forecasting unit, Torto Wheaton Research. Information herein has been obtai ned from sources bel i eved rel i abl e. Whi l e we do not d oubt its accuracy, we
completeness. Any projections, opinions, assumptions or estimates used are for exampl e onl y and do not represent the current or future performance of
the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior wri tten permi ssi on of
CB Richard Ellis.
MarketView | Indi anapol i s Downtown Offi ce
FIRST QUARTER 2005
Indi anapol i s Downtown Offi ce
MarketView
The Indi anapol i s Downtown O ffi ce Market
experi enced a sl i ght reversal from the
previ ous posi ti ve trend set duri ng the fourth
quarter of 2004. The vacancy rate
i ncreased 0. 05% to 15. 35%. Average
rental rates were al so affected droppi ng
al most $0. 20 a square foot to $16. 81.
Duri ng the fi rst quarter of 2005 the
Indi anapol i s Downtown O ffi ce Market
remai ned rel ati vel y fl at wi th an absorpti on
of 5, 562 square feet.
Basi cal l y, downtown offi ce space i s trul y a
tenant s market, hampered by a l ack of j ob
creati on and certai n i nfrastructure assets,
such as mass transi t. Parki ng expenses can
add $4 to $5 a square foot on l ease costs
for downtown space, but that i s frequentl y
offset when touti ng ameni ti es, i ncl udi ng
dozens of restaurants and retai l shops that
are accessi bl e wi thi n wal ki ng di stance from
most offi ces and the concentrati on of ci ty
and state government.
The Downtown O ffi ce Market has seen an
i ncrease i n demand from fi nanci al
i nsti tuti ons. Many banki ng i nsti tuti ons have
started searchi ng for addi ti onal space whi l e
others have upgraded thei r exi sti ng space.
There has al so been i nterest from new
i nsti tuti ons l ooki ng to make a foothol d i n
the Indi anapol i s market.
Leasi ng concessi ons remai n stabl e wi th free
rent and above standard fi ni shes bei ng the
most favored. Most Cl ass A and B
bui l di ngs have upgraded thei r ameni ti es
over the l ast coupl e of years to i ncl ude
thi ngs such as new and/ or i mproved fi tness
faci l i ti es and better food servi ce i n order to
stay competi ti ve.
With all of the new projects slated for
downtown the market i s pri med for an
upswi ng. Key addi ti ons to the market are
the new Si mon headquarters, pl ans for a
new stadi um and upgraded conventi on
center and many of the new resi denti al
proj ects underway.
QUI CK STATS
Vacancy 15.35%
Lease Rat es $16.81
Net Absor pt i on* - 5,562 SF
* The arrows are t rend i ndi cat ors over t he speci fi ed t i me peri o d and do not
represent a posi t i ve or negat i ve val ue. ( e.g., absorpt i on coul d be negati ve,
but st i l l represent a posi t i ve t rend over a speci fi ed peri od.)
Change f r om last
Current Yr . Qtr.
AVERAGE ASKI NG LEASE RATE
Rat e det ermi ned by mul t i pl yi ng t he aski ng net l ease rat e f or
each bui l di ng by i t s avai l abl e space, summi ng t he product s,
t hen di vi di ng by t he sum of t he avai l abl e space wi t h net l eases
f or al l bui l di ngs i n t he summary.
NET LEASES
rent pl us most , or al l , of t he operat i ng expenses and t axes f or
expenses.
MARKET COVERAGE
I ncl udes al l compet i t i ve of f i ce bui l di ngs 1 0 , 0 0 0 square f eet
and great er i n si ze.
NET ABSORPTI ON
The change i n occupi ed square f eet f rom one peri od t o t he
next.
NET RENTABLE AREA
The gross bui l di ng square f oot age mi nus t he el evat or core,
fl ues, pi pe shaft s, vert i cal duct s, bal coni es, and st ai rwel l are a s.
OCCUPI ED SQUARE FEET
UNDER CONSTRUCTI ON
excavat i on or foundat i on work.
AVAI LABLE SQUARE FEET
Avai l abl e Bui l di ng Area whi ch i s ei t her physi cal l y vacant or
occupi ed.
AVAI LABI LI TY RATE
Avai l abl e Square Feet di vi ded by t he Net Rent abl e Area.
VACANT SQUARE FEET
VACANCY RATE
NORMALI ZATI ON
Due t o a recl assi f i cat i on of t he market , t he base, number and
square f oot age of bui l di ngs of previ ous quart ers have been
adj ust ed t o mat ch t he current base. Avai l abi l i t y and Vacancy
f i gures f or t hose bui l di ngs have been adj ust ed i n previ ous
quarters.
INDIANAPOLIS OFFICE BROKERS
INDIANAPOLIS SUBMARKET MAP
Vacancy Rat e 15.35%
Lease Rate $ 16.81
Zach W. Ford, Research Coordi nat or- Of f i ce
1 1 5 West Washi ngt on St reet , Sui t e 1 1 7 0 Sout h
I ndi anapol i s, I ndi ana 4 6 2 0 4
T. 3 1 7 . 2 6 9 . 1 0 0 5 F. 3 1 7 . 6 3 7 . 4 4 0 4
zach.ford@ cbre.com
0 %
5 %
1 0 %
1 5 %
2 0 %
2 5 %
1
Q
9
9
3
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9
9
1
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0
0
3
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1
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V
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$ 1 4 . 0 0
$ 1 4 . 5 0
$ 1 5 . 0 0
$ 1 5 . 5 0
$ 1 6 . 0 0
$ 1 6 . 5 0
$ 1 7 . 0 0
$ 1 7 . 5 0
$ 1 8 . 0 0
$ 1 8 . 5 0
$

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F
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Nick Arterburn ni ck.arterburn @cbre.com 317.269.1028
Andy Bani ster andrew.banister@cbre.com 317.269.1022
Zane Brown zane.brown@cbre.com 317.269.1116
Greg Carter greg.carter@cbre.com 317.269.1048
Crystal Houston crystal.houston @cbre.com 317.269.1099
Tim Hull tim.hull@cbre.com 317.269.1035
Tim O Brien tim. obri en@cbre.com 317.269.1033
Tom Ott tom. ott@cbre.com 317.269.1036
Yumi Prater yumi.prater@cbre.com 317.269.1031
Dan Richardson dan. richardson@cbre.com 317.269.1043
R.J. Rudol ph rj. rudolph@cbre.com 317.269.1026
Ed Troha ed. troha@cbre.com 317.269.1063
John Vandenbark john. vandenbark@cbre.com 317.269.1046
HOT TOPI CS
Li f e Sci ences sect or gai ns moment um.
Resi dent i al demand cont i nues t o t hri ve.
In the first quarter of 2005, the national economy showed
further signs of stabilization and moderate incremental
growth. Paralleling the improving economy, the downtown
Boston office market saw itself revert back to positive
territory. While the fourth quarter of 2004 closed with signif-
icant negative net absorption, 2005 began with a renewed
demand for space in the Boston office market.
A number of notable leasing deals contributed to the overall
positive office absorption statistic: Pearson Education's
121,000 square foot lease at 501 Boylston; Babson Capital
Management's 83,000 square foot lease at 470 Atlantic;
Elkus/Manfredi Architects' new 39,000 square foot lease at
300 A Street; and FundQuest's 37,000 square foot
sublease at 125 High Street.
The first quarter's improved performance may indeed prove
a beacon of further activity. A review of the Federal Reserve's
most recent Beige Book (FRBB), which tracks business
sentiment across a variety of industries nationwide, showed
improved conditions among Boston's companies. The city's
retailers, software providers, and IT sector companies all
stated that demand met and, in many cases, continued to
exceed expectations. Unlike last year at this time, temporary
to permanent employment in technical, manufacturing,
financial and defense-related occupations
substantially increased.
On a macro level, late March also saw oil futures slip,
reflecting the perception that a supply crunch has finally
eased and inventories are adequate to meet the pending
demand. These factors, mirrored by incremental growth in
the equity markets, have convinced the Federal Reserve to
upwardly adjust interest rates for the seventh consecutive
time as a response to the underlying inflationary threat.
The Boston office market is decidedly active; at quarter's
end, 216 active requirements were looking for 4.3 million
square feet. Growth among Boston's small and mid-size
financial services companies, as well as law and technology
firms, account for over 55% of the overall office demand.
Among the larger business entities in Boston, the
employment and real estate implications surrounding
Proctor & Gamble's acquisition of Gillette remain to be seen.
Gillette's departure from Boston marks the third major
Boston-based company to be sold in the past three years,
essentially leaving State Street and Fidelity to anchor the
local market.
It is important to note that even as a turnaround in
economic activity takes hold in Massachusetts, the
sustainable driver of positive absorption for the downtown
Boston office market remains permanent job creation.
www.cbre-ne.com
MarketView
Boston Office
F I R S T Q U A R T E R 2 0 0 5
QUICK STATS
Change f rom last:
Current Year Qtr.
Vacancy 12.5%
Lease Rates $31.97
* The arrows are trend indicators over the specified time
period and do not represent a positive or negative value
(e.g., absorption could be negative, but still represent a
positive trend over a specified period).
HOT TOPICS
Q The downtown Boston office
market reverted back to
positive territory, posting
594,000 square feet of
net absorption.
Q At quarter's end, demand
remains strong: 216 active
requirements were looking for
4.3 million square feet.
Q The Federal Reserve's Beige
Book indicates improved busi-
ness conditions for Boston.
Q Since the third quarter of 2004,
sublease space as a percent of
the total available inventory
has dropped 90 basis
points to 3.4%.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
1
Q
0
1
2
Q
0
1
3
Q
0
1
4
Q
0
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1
Q
0
2
2
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0
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3
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V
a
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(
%
)
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
L
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F

(
$
)
Vacancy Rate 12.5%
Lease Rate $31.97
CB Richard Ellis/Whittier Partners | Boston Office MarketView | 1Q 2005
ECONOMIC CONDITIONS
Boston 4.9%
Massachusetts 4.9%
Nation 5.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
U
n
e
m
p
l
o
y
m
e
n
t

R
a
t
e

(
%
)
In January of 2005, the latest month for which data is available, the unemploy-
ment rate in Boston was 4.9%. The 4.9% rate in Massachusetts was 50 basis
points below the national rate of 5.4%. Late March also saw the national four-
week moving average of initial jobless claims drop 7% from the same period a
year ago, illustrating a slow but improving employment market. While inflationary
pressures are building, labor is not the cause. The blame goes instead to increas-
ing commodity prices, especially oil. In response, the Federal Reserve also raised
the benchmark federal funds rate, which affects credit costs throughout the econ-
omy, to 2.75%. This move, aimed to thwart the threat of inflation, marked the
seventh consecutive quarter percentage point increase since June of last year.
AVAILABILITY VACANCY SUBLEASE 1ST QUARTER AVERAGE ASKING
MARKET RENTABLE AREA RATE (%) RATE (%) RATE (%) NET ABSORPTION LEASE RATE ($ SF/YR)
Central Business District 34,754,831 SF 16.9% 12.9% 2.9% 383,571 SF $35.31
Class A 25,010,587 SF 17.0% 12.2% 3.6% 396,803 SF $38.20
Class B/C 9,744,244 SF 16.7% 14.8% 1.2% (13,232 SF) $27.17
Back Bay 13,020,270 SF 13.8% 11.6% 5.5% 304,328 SF $32.32
Class A 8,396,319 SF 17.9% 14.8% 8.4% 109,966 SF $32.89
Class B/C 4,623,951 SF 6.4% 5.9% 0.2% 194,362 SF $29.56
Charlestown/East Boston 2,848,796 SF 18.7% 18.5% 13.2% 8,787 SF $18.42
Seaport District 4,687,072 SF 19.3% 19.0% 1.2% (95,856 SF) $25.52
Mid-Town 2,634,772 SF 4.9% 3.9% 0.0% 5,222 SF $23.38
North Station/Waterfront 2,774,930 SF 18.7% 11.5% 0.8% 11,855 SF $25.04
South Station 1,240,839 SF 14.4% 11.5% 1.2% (56,867 SF) $23.81
Dorchester/South Boston 860,987 SF 9.7% 9.7% 0.3% 0 SF $23.62
Allston/Brighton/Longwood Medical 1,613,936 SF 8.5% 8.5% 3.7% 22,688 SF $21.62
Fenway/Kenmore Square 1,929,639 SF 5.4% 5.4% 0.0% 10,500 SF $22.69
Overall Boston Office 66,366,072 SF 15.5% 12.5% 3.4% 594,228 SF $31.97
Core Downtown 47,775,101 SF 16.1% 12.6% 3.6% 687,899 SF $34.72
Peripheral Downtown 18,590,971 SF 13.9% 12.4% 2.9% (93,671 SF) $23.29
First quarter 2005 closed with a slight decrease in Boston's office market vacan-
cy rate, which dipped roughly 70 basis points to 12.5%. Consistent with a posi-
tive absorption statistic, the office market also saw a slight decline in availability
this quarter, from 16.4% at the end of 2004, to 15.7% at the end of March
2005. Availability in the Class A high-rise market (floors 25 and above)
decreased 150 basis points to 13% at quarter close. The low-rise Class A mar-
ket (floors 1 - 15) experienced the most leasing activity over the past quarter, as
its availability fell 190 basis points to 20%. Availability and vacancy rates
remain higher in Boston's core (16.3% availability and 12.6% vacancy), than in
the peripheral regions (13.9% and 12.4%, respectively).
Average asking rents throughout the Boston office market continued their decline
into the first quarter of 2005. Overall, the market's average asking lease rate was
$31.97, down from $33.02 in the fourth quarter of last year. Over the past
three years, average asking lease rates have declined an average of $1.44
between the fourth and first quarters. In the core market, average asking lease
rates experienced a decline of $1.01 to $34.72. Conversely, the peripheral
market saw a marginal 4-cent increase in average asking lease rates to $23.29,
often the result of cheap sublease space reverting to direct space.
The Boston downtown office market posted significant positive absorption this
quarter. The core market posted 687,000 square feet of positive absorption
while conversely, the peripheral markets contributed another 93,000 square feet
to the inventory. Much of the leasing velocity this quarter was attributed to users
finding opportunity in cheaper sublease space options. Since the third quarter of
2004, sublease space as a percent of the total available inventory has dropped
90 basis points to 3.4%. If this activity continues, we can expect a firming in the
market in the second half of the year.
As the Federal Reserve continues to increase the federal funds rate (increasing
from 1% to 2.75% over the past year), the more dramatic effects appear to be
taking hold in the short-term money market. LIBOR rates have increased at a
greater rate than long-term fixed rates. This has caused the yield curve to flatten
out, driving borrowers from floating to fixed rate money, and from shorter to
longer terms. As in the past year, there still seems to be an abundance of invest-
ment capital, which is leading to lenders offering more aggressive programs.
Borrowers are witnessing standard LTVs of 80% or higher, prepayment flexibility
(including prepayment at par without defeasance or yield maintenance costs),
and interest only periods ranging from 1 year to the entire period of the loan.
Source: LJ Melody & Company
VACANCY VS. AVAILABILITY
Availability 15.5%
Vacancy Rate 12.5%
0.00%
5.00%
10.00%
15.00%
20.00%
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
V
a
c
a
n
c
y
/
A
v
a
i
l
a
b
i
l
i
t
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(
%
)
Class A $38.20
Class B/C $27.17
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
L
e
a
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e

R
a
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e

P
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r

S
F

(
$
)
NET ABSORPTION
Core 687,899
Peripheral (93,671)
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
N
e
t

A
b
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(
S
F
)
YIELD CURVE
Yield Curve 2005
Yield Curve 2003
1.22% 1.25%
1.42%
1.80%
2.20%
3.05%
3.62%
4.07%
4.46%
2.66%
2.80%
3.13%
3.34%
3.75%
3.90%
4.13%
4.29%
1.18%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
1
-M
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th
3
-M
o
n
th
6
- M
o
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th
1
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7
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1
0
Y
e
a
r T
re
a
s
u
ry
Rate determined by multiplying the asking net lease
space with net leases for all buildings in the summary.
NET LEASES
agreed rent plus most, or all, of the operating expens-
es and taxes for the property, including utilities, insur-
ance and/or maintenance expenses.
MARKET COVERAGE
NET ABSORPTION
the next, as measured by available square feet.
NET RENTABLE AREA
stairwell areas.
UNDER CONSTRUCTION
Available Building Area which is either physically
vacant or occupied.
AVAILABILITY RATE
VACANT SQUARE FEET
Existing Building Area which is physically vacant or
immediately available.
VACANCY RATE
NORMALIZATION
Due to a reclassification of the market, the base, num-
ber and square footage of buildings of previous quar-
ters have been adjusted to match the current base.
Availability and vacancy figures for those buildings
For more information regarding
the MarketView, please contact:
Scott Hutchinson
Director of Research
CB Richard Ellis/Whittier Partners
600 Atlantic Avenue
Boston, Massachusetts 02210
T: 617.912.7000, F: 617.912.7001
scott.hutchinson@cbre-ne.com
-TOP BOSTON LEASE TRANSACTI ONS-
SIZE (SF) TENANT ADDRESS
354,000 Investors Bank & Trust 200 Clarendon Street
1
150,000 Investors Bank & Trust 1 Copley Place
1
121,000 Pearson Education 501 Boylston Street
83,000 Babson Capital Management 470 Atlantic Avenue
66,000 Time Warner Book Group 3 Center Plaza
1
1
Renewal
BOSTON SUBMARKET MAP-
Central Business District
North Station/Waterfront
Midtown
South Station
Seaport District
Charlestown
East Boston
Dorchester/South Boston
Back Bay
Allston/Brighton/Longwood Medical
Fenway/Kenmore Square
Copyright 2005, CB Richard Ellis. All rights reserved. This report contains information from sources we believe to be reliable, but we make no representation, warranty
or guaranty of its accuracy. Opinions, assumptions and estimates constitute CBRE's judgment as of the date this report is first released and are subject to change without
notice. CBRE holds all right, title and interest in this report and the proprietary information contained herein. This report is published for the use of CBRE and its clients
only. Redistribution in whole or part to any third party without the prior written consent of CBRE is strictly prohibited.
MarketView | Washington, DC Office
Washington, DC Office
F I R S T Q U A R T E R 2 0 0 5
MarketView
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used
to generate National Vacancy and Availability Index statistics published by CB Richard Ellis Corporate
Communications Department or CB Richard Ellis research and Econometric Forecasting unit, Torto Wheaton
Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to
independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are
for example only and do not represent the current or future performance of the market. This information is designed
exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
www.cbre.com
The Washington, DC real estate market has
a tenant base that is steadily increasing, a
long line of buyers wishing to purchase
buildings, and new construction that will
allow the city to grow. These three
indicators have changed little during the
last several years. The year-end vacancy
rate has been under 7% each year since
1998; the city has been ranked as one of
the top investment sales markets in the
country for several years; and an average
of over 2.5 million square feet of space has
been delivered each year since 2000. This
consistent performance, at a time when
most real estate markets have faced
significant challenges, is the true measure
of the strength of the Washington, DC
market.
The size of the office market continued to
grow during the first quarter and topped
110 million square feet for the first time.
That growth was the result of three
buildings which delivered a combined total
of more then one million square feet of
space. The three buildings that came onto
the market; 1717 Rhode Island Avenue,
NW, 100 F Street, NE, and 875 15th Street,
NW, had a combined preleased rate of
92%, the second quarter in a row that the
preleasing rate of new construction has
been higher than 90%.
Net absorption for the first quarter 2005
was 650,000 square feet as demand for
new space continues to grow. Demand is
extremely high for quality buildings that are
being constructed in prime locations.
Trophy projects in the CBD and East End
are being leased despite having asking
rental rates significantly above average.
Law firms and the federal government were
once again the principal actors in the
market. Of the three new buildings
delivered, law firms are the lead tenants in
two of the buildings and the Securities and
Exchange Commission is the sole occupant
of the third.
The sales market in Washington has been
extremely competitive for several quarters.
There is more demand than supply for all
types of office space, from small user-
owned buildings to large trophy-class office
towers. Under these market conditions sale
prices have soared, with several buildings
selling in the range of $600 per square
foot.
QUICK STATS
Vacancy 6.9%
Lease Rates $41.79
Change f r om l ast
Current Yr. Qtr.
HOT TOPICS
The vacancy rate has remained below 7%
for the past seven years.
The inventory of commercial office space
surpassed 110,000,000 square feet in
Washington, DC.
Law firms and the federal government
continue to drive growth.
The proposed baseball stadium is spurring
development along South Capitol Street.
Rate determined by multiplying the asking lease rate for each
building by its available space, summing the products, then
dividing by the sum of the available space with leases for all
buildings in the summary.
NET LEASES
Includes all lease types whereby the tenant pays an agreed
rent plus most, or all, of the operating expenses and taxes for
the property, including utilities, insurance and/or maintenance
expenses.
FULL SERVICE
Rent is inclusive of operating expenses and rates.
MARKET COVERAGE
Includes all competitive office buildings 20,000 square feet
and greater in size. Includes single tenant and owner
occupied buildings.
NET ABSORPTION
The change in occupied square feet from one period to the
next.
NET RENTABLE AREA
The gross building square footage minus the elevator core,
flues, pipe shafts, vertical ducts, balconies, and stairwell areas.
UNDER CONSTRUCTION
Available building area which is either physically vacant or
occupied.
AVAILABILITY RATE
Available square feet divided by the net rentable area.
VACANT SQUARE FEET
Existing building area which is physically vacant or
VACANCY RATE
Vacant building feet divided by the net rentable area.
NORMALIZATION
Due to a reclassification of the market, the base, number and
square footage of buildings of previous quarters have been
adjusted to match the current base. Availability and Vacancy
figures for those buildings have been adjusted in previous
quarters.
TOP WASHINGTON, DC LEASE TRANSACTIONS
Size (Sq. Ft.) Tenant Address Submarket
253,000 Chemonics 1717 H Street, NW CBD
230,000 Piper Rudnick 505 9th Street, NW East End
160,000 GSA 370 LEnfant Plaza, SW Southwest
69,000 Smithsonian 600 Maryland Avenue, SW Southwest
59,000 Reed Smith 1301 K Street, NW East End
WASHINGTON, DC MAP
Margaret Donkerbrook
Director of Marketing and Information Management
555 11
th
Street, NW, Washington, DC 20004
T. 202.585.5664 F. 202.783.1723
margaret.donkerbrook@cbre.com
Washington, DC Historical Net Absorption, Deliveries, and Vacancy
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
Net Absorption
Deliveries
Vacancy
CB Richard Ellis | Washington, DC Office MarketView| 1Q 2005 CB Richard Ellis | Washington, DC Office MarketView|1Q 2005
HISTORICAL NET ABSORPTION/VACANCY
There was 646,000 square feet of net absorption during the first quarter, a
good start for the year that puts this market on track to match last years net
absorption total of 2.5 million square feet. One of the major contributions
to the net absorption total was the Security and Exchange Commissions
move from 450,000 square feet at 450 5th Street, NW to 650,000 square
feet at 100 F Street, NE. This growth of 200,000 square feet accounted for
nearly a third of the net absorption total for the quarter. The vacancy rate
remained stable, moving just 10 basis points from 6.8% to 6.9%. The
minimal change in vacancy reflects the balance in this market between new
construction and the ever increasing demand for space.
Three commercial buildings delivered during the first quarter of 2005
and added a total of one million square feet of inventory to the market.
The largest building to deliver during this quarter was 100 F Street, NE
in Capitol Hill. The 650,000 square foot edifice is the new headquarters
of the SEC. 1717 Rhode Island Avenue, NW delivered in February and
has a rentable building area of 156,250 square feet. It is one of the few
new buildings to be constructed in the CBD during the past five years
and it was 85% preleased. Much of the space was leased to the law firm
of Heller Ehrman. The Bowen Building at 875 15
th
Street, NW delivered
over 230,000 square feet of space at the beginning of the quarter, with
the law firm of Paul Hastings as its lead tenant. A fourth building, 1900
Pennsylvania Avenue, NW, was completed at the end of the first quarter,
but it is owned and will be fully occupied by the International Monetary
Fund and is not included in the competitive office inventory.
The average asking rental rate for direct space in Washington, DC rose to
$41.79 at the end of the first quarter. New construction and the robust
sales market are two factors that are contributing to the increase in rates.
Several buildings are currently being built on a speculative basis in the City,
including four buildings under construction in the Southwest submarket. The
surge in the sales prices of existing buildings and the increasing costs of
construction have put upward pressure on rental rate targets. Demand has
remained constant despite the rising rents. The average Class A rental rate
in the city was $45.60 at the end of the first quarter, but the rates in the East
End and Southwest, where there are significant blocks of available space,
have climbed to $47.09 and $48.29 respectively. Several buildings currently
under construction have signed preleases at rates in the $60 per square foot
range.
MARKET OUTLOOK
The real estate market in Washington, DC continues to build
upon the success it has achieved during the past five years. More
than 8.3 million square feet of office space will deliver during the
next three years and 55% of that space has been preleased.
Demand for large blocks of Class A space is pushing rental rates
in new projects to historical highs. Law firms and the federal
government will drive new construction, but leasing activity will
be spread across a broad range of businesses and tenants of all
sizes. If net absorption continues at the five year average rate of
nearly two million square feet per year, it could be outpaced by
construction and lead to small increases in vacancy in some
submarkets.
Southwest Waterfront
CBD
East End
Capitol Hill
Southwest
Georgetown
West End
Uptown
Washi ngt on, DC
Market
Rentable
1
Area
Vacancy
Rate %
Net
Absorption
YTD SF
Total Under
Construction
SF
Average Asking
Lease Rate $
SF/YR
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
37,864,980
37,605,377
12,475,771
9,792,365
2,658,926
3,686,724
6,850,166
110,934,309
6.2%
10.0%
4.5%
4.4%
1.9%
4.3%
4.2%
6.9%
(40,347)
13,074
623,957
37,931
(2,058)
12,653
1,444
646,654
891,000
2,230,580
3,399,284
1,493,900
216,132
0
106,000
8,336,896
$39.19
$42.97
$39.48
$47.16
$29.68
$43.02
$28.36
$41.79
1
Tot al rent able area includes single t enant and owner occupied buildings.
Absorption 646,654
Vacancy 6.9% Square Feet Delivered 1,039,015
HISTORICAL RENTAL RATES
HISTORICAL DELIVERIES
Average Asking Lease Rate $41.79
Spotlight On: Washington Nationals Baseball Stadium, Anacostia Waterfront Initiative
Baseball has returned to the Nations Capitol, and city officials hope that its arrival may be just the thing to spark an economic
revitalization along the banks of the Anacostia River. Mayor Anthony Williams has made this a major city priority, introducing a
20-year, $8 Billion plan under the direction of the quasi-public Anacostia Waterfront Initiative (AWI), a collaboration of the DC
Office of Planning, federal and District agencies, along with community advisors and third party consultants. They mapped out
their vision in the 2003 AWI Framework Plan, a comprehensive guide to the sweeping proposed improvements. The AWI
Framework addresses everything from traffic relief through road reconfiguration and bridge renovation to affordable housing
needs and cultural components, but there was little tangible momentum prior to the exciting prospect of a major attraction such as
the new Major League Baseball stadium.
Now that the DC City Council has approved a $535 million stadium deal and the design contract has been awarded to HOK
Sport, the nations leading sports architecture firm, one can really feel the early stages of the AWI coming into focus. The citys
most prominent developers have become engaged in a competitive rush to get their hands on any land in proximity to the stadium
site, with three major transactions having already occurred and several more on the horizon. The new Department of
Transportation Headquarters buildings are well underway at the neighboring Southeast Federal Center, accompanied by several
other residential, office and hospitality developments in the near Southeast area either under construction or in the late stages of
planning. All of this activity by itself is exciting, but when one considers the bright prospects for the nearby Southwest Waterfront
redevelopment, it is evident that the area south of the freeway has assumed a new place within the District of Columbia.
CB Richard Ellis | Washington, DC Office MarketView| 1Q 2005 CB Richard Ellis | Washington, DC Office MarketView|1Q 2005
HISTORICAL NET ABSORPTION/VACANCY
There was 646,000 square feet of net absorption during the first quarter, a
good start for the year that puts this market on track to match last years net
absorption total of 2.5 million square feet. One of the major contributions
to the net absorption total was the Security and Exchange Commissions
move from 450,000 square feet at 450 5th Street, NW to 650,000 square
feet at 100 F Street, NE. This growth of 200,000 square feet accounted for
nearly a third of the net absorption total for the quarter. The vacancy rate
remained stable, moving just 10 basis points from 6.8% to 6.9%. The
minimal change in vacancy reflects the balance in this market between new
construction and the ever increasing demand for space.
Three commercial buildings delivered during the first quarter of 2005
and added a total of one million square feet of inventory to the market.
The largest building to deliver during this quarter was 100 F Street, NE
in Capitol Hill. The 650,000 square foot edifice is the new headquarters
of the SEC. 1717 Rhode Island Avenue, NW delivered in February and
has a rentable building area of 156,250 square feet. It is one of the few
new buildings to be constructed in the CBD during the past five years
and it was 85% preleased. Much of the space was leased to the law firm
of Heller Ehrman. The Bowen Building at 875 15
th
Street, NW delivered
over 230,000 square feet of space at the beginning of the quarter, with
the law firm of Paul Hastings as its lead tenant. A fourth building, 1900
Pennsylvania Avenue, NW, was completed at the end of the first quarter,
but it is owned and will be fully occupied by the International Monetary
Fund and is not included in the competitive office inventory.
The average asking rental rate for direct space in Washington, DC rose to
$41.79 at the end of the first quarter. New construction and the robust
sales market are two factors that are contributing to the increase in rates.
Several buildings are currently being built on a speculative basis in the City,
including four buildings under construction in the Southwest submarket. The
surge in the sales prices of existing buildings and the increasing costs of
construction have put upward pressure on rental rate targets. Demand has
remained constant despite the rising rents. The average Class A rental rate
in the city was $45.60 at the end of the first quarter, but the rates in the East
End and Southwest, where there are significant blocks of available space,
have climbed to $47.09 and $48.29 respectively. Several buildings currently
under construction have signed preleases at rates in the $60 per square foot
range.
MARKET OUTLOOK
The real estate market in Washington, DC continues to build
upon the success it has achieved during the past five years. More
than 8.3 million square feet of office space will deliver during the
next three years and 55% of that space has been preleased.
Demand for large blocks of Class A space is pushing rental rates
in new projects to historical highs. Law firms and the federal
government will drive new construction, but leasing activity will
be spread across a broad range of businesses and tenants of all
sizes. If net absorption continues at the five year average rate of
nearly two million square feet per year, it could be outpaced by
construction and lead to small increases in vacancy in some
submarkets.
Southwest Waterfront
CBD
East End
Capitol Hill
Southwest
Georgetown
West End
Uptown
Washi ngt on, DC
Market
Rentable
1
Area
Vacancy
Rate %
Net
Absorption
YTD SF
Total Under
Construction
SF
Average Asking
Lease Rate $
SF/YR
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
92 93 94 95 96 97 98 99 00 01 02 03 04 05
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
37,864,980
37,605,377
12,475,771
9,792,365
2,658,926
3,686,724
6,850,166
110,934,309
6.2%
10.0%
4.5%
4.4%
1.9%
4.3%
4.2%
6.9%
(40,347)
13,074
623,957
37,931
(2,058)
12,653
1,444
646,654
891,000
2,230,580
3,399,284
1,493,900
216,132
0
106,000
8,336,896
$39.19
$42.97
$39.48
$47.16
$29.68
$43.02
$28.36
$41.79
1
Tot al rent able area includes single t enant and owner occupied buildings.
Absorption 646,654
Vacancy 6.9% Square Feet Delivered 1,039,015
HISTORICAL RENTAL RATES
HISTORICAL DELIVERIES
Average Asking Lease Rate $41.79
Spotlight On: Washington Nationals Baseball Stadium, Anacostia Waterfront Initiative
Baseball has returned to the Nations Capitol, and city officials hope that its arrival may be just the thing to spark an economic
revitalization along the banks of the Anacostia River. Mayor Anthony Williams has made this a major city priority, introducing a
20-year, $8 Billion plan under the direction of the quasi-public Anacostia Waterfront Initiative (AWI), a collaboration of the DC
Office of Planning, federal and District agencies, along with community advisors and third party consultants. They mapped out
their vision in the 2003 AWI Framework Plan, a comprehensive guide to the sweeping proposed improvements. The AWI
Framework addresses everything from traffic relief through road reconfiguration and bridge renovation to affordable housing
needs and cultural components, but there was little tangible momentum prior to the exciting prospect of a major attraction such as
the new Major League Baseball stadium.
Now that the DC City Council has approved a $535 million stadium deal and the design contract has been awarded to HOK
Sport, the nations leading sports architecture firm, one can really feel the early stages of the AWI coming into focus. The citys
most prominent developers have become engaged in a competitive rush to get their hands on any land in proximity to the stadium
site, with three major transactions having already occurred and several more on the horizon. The new Department of
Transportation Headquarters buildings are well underway at the neighboring Southeast Federal Center, accompanied by several
other residential, office and hospitality developments in the near Southeast area either under construction or in the late stages of
planning. All of this activity by itself is exciting, but when one considers the bright prospects for the nearby Southwest Waterfront
redevelopment, it is evident that the area south of the freeway has assumed a new place within the District of Columbia.
MarketView | Washington, DC Office
Washington, DC Office
F I R S T Q U A R T E R 2 0 0 5
MarketView
Copyright 2005 CB Richard Ellis (CBRE) Statistics contained herein may represent a different data set than that used
to generate National Vacancy and Availability Index statistics published by CB Richard Ellis Corporate
Communications Department or CB Richard Ellis research and Econometric Forecasting unit, Torto Wheaton
Research. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to
independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are
for example only and do not represent the current or future performance of the market. This information is designed
exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of
CB Richard Ellis.
www.cbre.com
The Washington, DC real estate market has
a tenant base that is steadily increasing, a
long line of buyers wishing to purchase
buildings, and new construction that will
allow the city to grow. These three
indicators have changed little during the
last several years. The year-end vacancy
rate has been under 7% each year since
1998; the city has been ranked as one of
the top investment sales markets in the
country for several years; and an average
of over 2.5 million square feet of space has
been delivered each year since 2000. This
consistent performance, at a time when
most real estate markets have faced
significant challenges, is the true measure
of the strength of the Washington, DC
market.
The size of the office market continued to
grow during the first quarter and topped
110 million square feet for the first time.
That growth was the result of three
buildings which delivered a combined total
of more then one million square feet of
space. The three buildings that came onto
the market; 1717 Rhode Island Avenue,
NW, 100 F Street, NE, and 875 15th Street,
NW, had a combined preleased rate of
92%, the second quarter in a row that the
preleasing rate of new construction has
been higher than 90%.
Net absorption for the first quarter 2005
was 650,000 square feet as demand for
new space continues to grow. Demand is
extremely high for quality buildings that are
being constructed in prime locations.
Trophy projects in the CBD and East End
are being leased despite having asking
rental rates significantly above average.
Law firms and the federal government were
once again the principal actors in the
market. Of the three new buildings
delivered, law firms are the lead tenants in
two of the buildings and the Securities and
Exchange Commission is the sole occupant
of the third.
The sales market in Washington has been
extremely competitive for several quarters.
There is more demand than supply for all
types of office space, from small user-
owned buildings to large trophy-class office
towers. Under these market conditions sale
prices have soared, with several buildings
selling in the range of $600 per square
foot.
QUICK STATS
Vacancy 6.9%
Lease Rates $41.79
Change f r om l ast
Current Yr. Qtr.
HOT TOPICS
The vacancy rate has remained below 7%
for the past seven years.
The inventory of commercial office space
surpassed 110,000,000 square feet in
Washington, DC.
Law firms and the federal government
continue to drive growth.
The proposed baseball stadium is spurring
development along South Capitol Street.
Rate determined by multiplying the asking lease rate for each
building by its available space, summing the products, then
dividing by the sum of the available space with leases for all
buildings in the summary.
NET LEASES
expenses.
FULL SERVICE
Rent is inclusive of operating expenses and rates.
MARKET COVERAGE
Includes all competitive office buildings 20,000 square feet
and greater in size. Includes single tenant and owner
occupied buildings.
NET ABSORPTION
The change in occupied square feet from one period to the
next.
NET RENTABLE AREA
The gross building square footage minus the elevator core,
flues, pipe shafts, vertical ducts, balconies, and stairwell areas.
UNDER CONSTRUCTION
Available building area which is either physically vacant or
occupied.
AVAILABILITY RATE
Available square feet divided by the net rentable area.
VACANT SQUARE FEET
Existing building area which is physically vacant or
VACANCY RATE
Vacant building feet divided by the net rentable area.
NORMALIZATION
square footage of buildings of previous quarters have been
adjusted to match the current base. Availability and Vacancy
quarters.
TOP WASHINGTON, DC LEASE TRANSACTIONS
Size (Sq. Ft.) Tenant Address Submarket
253,000 Chemonics 1717 H Street, NW CBD
230,000 Piper Rudnick 505 9th Street, NW East End
160,000 GSA 370 LEnfant Plaza, SW Southwest
69,000 Smithsonian 600 Maryland Avenue, SW Southwest
59,000 Reed Smith 1301 K Street, NW East End
WASHINGTON, DC MAP
Margaret Donkerbrook
Director of Marketing and Information Management
555 11
th
Street, NW, Washington, DC 20004
T. 202.585.5664 F. 202.783.1723
margaret.donkerbrook@cbre.com
Washington, DC Historical Net Absorption, Deliveries, and Vacancy
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
Net Absorption
Deliveries
Vacancy
www.cbre.com
Vacancy 15.18%
Lease Rates $20.72
Net Absorption* 0.133M
Construction 2.34M
2%
0%
6%
4%
10%
8%
14%
12%
18%
16%
2
Q
0
2
4
Q
0
2
2
Q
0
3
4
Q
0
3
2
Q
0
4
$21
$20
$23
$22
$25
$24
$27
$26
$28
1
Q
0
5
3
Q
0
2
1
Q
0
3
3
Q
0
3
1
Q
0
4
$29
3
Q
0
4
4
Q
0
4
Vacancy Rate 15.18%
Lease Rate $20.72 VACANCY RATE VS. LEASE RATE
NET LEASES
MARKET COVERAGE
NET ABSORPTION
the next.
NET RENTABLE AREA
stairwell areas.
UNDER CONSTRUCTION
Available Building Area which is either physically vacant
or occupied.
AVAILABILITY RATE
VACANT SQUARE FEET
VACANCY RATE
NORMALIZATION
Construction on Liberty Property Trust's
Comcast Center has begun.
Approximately 700,000 square feet is
available for pre-leasing.
Buccini-Pollin Group will add an
additional 350,000 square feet to their
office tower at Gateway Plaza in
Wilmington, Delaware.
Construction at the Philadelphia Navy
Yard is taking shape with a project at 1
Crescent Drive, a 77,000 square foot new
office building expected to deliver in
October, 2005.
HOT TOPICS
QUICK STATS
PHI LADELPHI A REGI ON SUBMARKET MAP
Andrew Rudzinski, Director, Research & Marketing
CB Richard Ellis
1800 John F. Kennedy Blvd., Philadelphia, PA 19103
T. 215.561.8900 F. 215.557.6719
andrew.rudzinski@cbre.com
%
V
a
c
a
n
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y
$
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e
r
S
q
u
a
r
e
F
o
o
t
of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission
of CB Richard Ellis.
Yr. Current Qtr.
Change from last
Mar ket Vi ew | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005
Despite the creation of 37,000 new jobs
in the area, corporations have yet to
decide to lease more office space in the
Philadelphia region. Local developers,
however, remain bullish on the region's
economic recovery. New construction
projects underway
include the
developments along
the Wilmington
riverfront
encompassing office,
residential and retail uses, the ground-
breaking for the Comcast Center in
Philadelphia, and the soon to be
completed Brandywine REITs Cira Centre
in Philadelphia.
As of 1st Quarter 2005, the anticipated
up tick in our regional vacancy rate has
yet to be realized. Overall vacancy rates
and levels of absorption are forecasted to
show some level of improvement in the
coming months. Anxious to fill any
remaining vacant space, building owners
continue to offer competitive rental rates
and attractive concession packages in
order to sign new
leases with tenants.
Select markets could
begin to experience a
number of large blocks
of contiguous space
coming available, specifically southern
New Jersey and downtown Philadelphia.
Employment growth will be essential to
thwart the pending regional vacancy rate
issue.
The Philadelphia region has long enjoyed
a solid tenant base, and a supportive
group of real estate investors that has
F I R S T Q U A R T E R 2 0 0 5
Philadelphia Office
Local developers,
remain bullish on the
region's economic
recovery
MarketView
allowed the Philadelphia MSA to
grow. Real estate experts agree
that a number of factors - from
the low cost of capital to a greater
demand from corporate America
for more efficient office space -
have contributed to this most
recent construction activity in the
region.
Market
Rentable
Area
SF
Vacancy
Rate
%
Availability
Rate
%
YTD Net
Absorption
SF
Under
Construction
SF
Class A Average
Asking Lease Rate
$ FSG/SF/YR
Market West
Market East
Independence Hall
DOWNTOWN PHILADELPHIA SUBTOTAL
Bala Cynwyd
Conshohocken
Delaware County
Exton/West Chester
Fort Washington
Horsham/Willow Grove
Jenkintown
King of Prussia/Valley Forge
Lansdale/Montgomeryville
Lower Bucks County
Main Line
Plymouth Meeting/Blue Bell
Upper Main Line
SUBURBAN PHILADELPHIA SUBTOTAL
Lehigh Valley East
Lehigh Valley West
LEHIGH VALLEY SUBTOTAL
Burlington County
Camden County
Gloucester County
SOUTHERN NEW JERSEY SUBTOTAL
Wilmington CBD
New Castle Co. Suburbs
NORTHERN DELAWARE SUBTOTAL
TOTAL
27,511,080
7,122,977
6,136,792
40,770,849
2,907,225
3,392,650
5,039,830
2,970,273
3,122,004
4,606,211
1,249,758
16,336,563
2,511,405
4,194,327
3,121,996
5,268,946
1,369,761
56,090,949
3,568,963
3,477,423
7,046,386
9,501,556
6,488,583
234,702
16,224,841
5,937,265
7,814,077
13,751,342
133,884,367
12.43%
9.83%
13.20%
12.09%
16.67%
16.14%
20.79%
22.92%
33.47%
10.32%
9.27%
16.27%
16.53%
14.77%
38.64%
18.78%
19.09%
18.80%
19.98%
15.25%
17.65%
12.37%
13.02%
1.73%
12.48%
12.86%
11.94%
12.34%
15.27%
15.4%
10.0%
14.9%
14.4%
18.3%
21.1%
21.6%
28.3%
33.5%
14.2%
10.0%
19.3%
16.5%
16.2%
39.5%
20.4%
22.4%
21.1%
20.8%
15.6%
18.2%
12.6%
13.0%
1.7%
12.6%
13.1%
14.2%
13.7%
17.1%
3,156
-66,276
36,492
(26,628)
(14,954)
50,913
1,729
124,571
(282,257)
247,634
15,458
33,569
74,094
(53,986)
172,235
(109,586)
11,125
270,545
(8,246)
(12,140)
(20,386)
(142,272)
(204,307)
(1,600)
(348,179)
(27,885)
166,688
138,803
14,155
1,965,728
0
0
1,965,728
0
0
128,922
0
0
0
0
0
15,000
182,676
0
0
0
326,598
0
0
0
105,000
0
0
105,000
0
160,000
160,000
2,557,326
$24.50
$23.00
$23.00
$23.50
$27.86
$29.74
$23.20
$22.81
$21.63
$20.87
$23.04
$23.17
$22.66
$22.76
$27.51
$23.92
$25.76
$23.56
$15.90
$20.23
$18.06
$19.71
$17.58
$13.93
$18.72
$20.33
$19.29
$19.75
$20.72
CB Ri char d El l i s | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005 CB Ri char d El l i s | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005
-15%
-10%
-5%
0%
5%
10%
15%
20%
1
Q
0
4
1
Q
0
5
2
Q
0
4
3
Q
0
4
-4
-2
0
2
4
4
Q
0
4
$20
$21
$22
$23
$24
$25
4
Q
0
4
1
Q
0
5
2
Q
0
4
3
Q
0
4
0.0
0.8
Comcast Center Cira Center 1 Crescent Dr
1.2
0.4
Marrows Rd 501 Fellowship Rd
Vacancy & Availability: No significant change in the region's vacancy rate has been reported
since the 4th Quarter. Currently 15.2%, the regional vacancy has only slightly improved from the
15.61% vacancy rate during the 1st Quarter 2004. Downtown Philadelphia, the Philadelphia Suburbs
and Delaware reported static levels of leasing activity since January 2005, even though both the State
of Delaware and the Philadelphia Suburbs have had tremendous success in filling large blocks of
available space over the last 12 months. Southern New Jersey is still in the midst of a great deal of
industrial-to-office conversion projects that have increased vacancy to 12.34%, up more than 2
percentage points from year end 2004. The vacancy rate for the Philadelphia MSA could increase over
the year as several ongoing construction projects are completed, adding vacant space available for
lease to the region's competitive office inventory.
Net Absorption: Absorption for the region totaled 132,684 square feet. Considering the
lower levels of leasing activity that occurred during the 1st Quarter the region's absorption rate
does not come as a surprise and remains consistent with current market conditions. Ultimately,
conditions have improved for the region over the past year. While "flat" absorption levels have
characterized the market, a positive 132,000 square feet compares well to last year's (1,453,
678) square feet reported during the 1st Quarter 2004. In 1st Quarter 2005, Downtown
Philadelphia, Delaware and the Lehigh Valley "sat still," while the abundance of absorption in
the Philadelphia Suburbs (+ 389,074) was counterbalanced by (348,179) in Southern New
Jersey.
Average Asking Lease Rates: Much like the vacancy rate and levels of absorption,
asking full-service rental rates did not experience any major shifts during the 1st Quarter.
Prior speculation that rental rates have "hit bottom" has been accurate. Average asking lease
rates for the region in 1st Quarter 2004 were $23.40 p/sf, compared to $20.75 p/sf
presently. The economy did not improve significantly enough to afford an increase in asking
rates, nor did conditions worsen such that rates should continue their downward trend.
Southern New Jersey did feel the effects of a strained market as Class-A rates in the three
county region dropped to $18.75 p/sf. Class A asking rental rates in Downtown Philadelphia
are currently at $24.50 p/sf.
Construction Activity: Construction activity continues to be most prevalent in the State of
Delaware and the Philadelphia CBD. Adding to the anticipation of numerous mixed-use developments
along the Wilmington Riverfront, the Buccini- Pollin Group has announced approvals to build an
additional 350,000 square feet at Gateway Plaza with construction slated to begin in July of 2005.
The Commowealth Group is expected to deliver 1 River Plaza, headquarters for AAA Mid-Atlantic, in
June. Construction plans for the Wilmington CBD and New Castle County Suburbs total more than 1M
square feet, compared to only 128,000 in the 1st Quarter 2004.
In Downtown Philadelphia, Brandywine Realty Trust's nearly completed Cira Center is expected to
deliver this Fall. Approximately 210,000 square feet remain available for lease at the 727,725 square
foot tower, yet leases in the pipeline should bring the level of occupancy to almost 93% during the
2nd Quarter. Construction of Liberty Property Trust's Comcast Center has begun. Liberty Property Trust
has also begun construction on 1 Crescent Drive, a 77,000 sf office project at the Philadelphia Navy
Yard.
Vacancy 15.18%
Availability 17.1%
Absorption 0.132M
Average Asking Lease Rent FSG $20.72
VACANCY/AVAILABILITY/NET ABSORPTION AVERAGE ASKING LEASE RATES
Economic Conditions: The US economy added more than 110,000 jobs in
March, bringing the total employment level to 132.9 million and lowering the national
unemployment rate to 5.2%. The unemployment rates for the tri-state area vary slightly
with Delaware and New Jersey below the national average at 4.1% and 4.4%, respectively.
Pennsylvania saw a slight decrease in unemployment from 5.7% at the end of 2004 to
5.2% during the 1st Quarter of 2005 supported by the continued increase in defense
spending. Even with recent job cutbacks and facility closures within the manufacturing
sector, a decrease in the unemployment rate may continue throughout the year. The outlook
for the State of Delaware is bright with the recent announcement that Saturn will re-open its'
assembly plant in New Castle County.
%
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A
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a
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b
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q
u
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M
M
)
N
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t A
b
s
o
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p
tio
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(
M
)
We expect some level of improvement in the overall office market during 2005.
Lease transactions will be smaller in size, but the activity level is expected to be
on the rise. The overall direction will be positive even though new construction
projects in the coming year(s) could mean the Philadelphia CBD and Southern
New Jersey will be faced with a pending vacancy issue. A handful of significant
CBD office leases scheduled to expire this year could contribute to an increase in
the overall number of contiguous blocks in Trophy and 'A' class buildings. The
Southern New Jersey office inventory will increase in size, but the defense and
financial sectors should create a level of new job growth strong enough to support
the amount of new inventory.
Chemical and financial services companies have been, and will continue to be
crucial to real estate recovery in Wilmington. Demand for 'A' class space is driving
local developers to the Wilmington CBD and along the Wilmington Riverfront. A
handful of new construction projects have broken ground and the level of
absorption is expected to be positive for the duration of the year.
The 'flight to quality' that took place in 2004 continues in full swing, signaling the
beginning of a recovery for the Philadelphia Suburban market. Demand for space
is expected to trend upward at a modest pace as corporate spending levels
improve. Competition for tenants amongst building owners is still fierce.
Nonetheless, the pipeline for upcoming lease transactions is reported to be strong,
with several major transactions already in the works. Any noticeable increase in
rental rates is not expected for the remaining half of 2005.
MARKET OUTLOOK
0%
2%
4%
6%
1Q05 1Q04 2Q04 3Q04 4Q04
PA 5.2%
NJ 4.4%
DE 4.1%
UNEMPLOYMENT RATE - SEASONALLY ADJUSTED
Source: Bureau of L abor Statistics
Market
Rentable
Area
SF
Vacancy
Rate
%
Availability
Rate
%
YTD Net
Absorption
SF
Under
Construction
SF
Class A Average
Asking Lease Rate
$ FSG/SF/YR
Market West
Market East
Independence Hall
DOWNTOWN PHILADELPHIA SUBTOTAL
Bala Cynwyd
Conshohocken
Delaware County
Exton/West Chester
Fort Washington
Horsham/Willow Grove
Jenkintown
King of Prussia/Valley Forge
Lansdale/Montgomeryville
Lower Bucks County
Main Line
Plymouth Meeting/Blue Bell
Upper Main Line
SUBURBAN PHILADELPHIA SUBTOTAL
Lehigh Valley East
Lehigh Valley West
LEHIGH VALLEY SUBTOTAL
Burlington County
Camden County
Gloucester County
SOUTHERN NEW JERSEY SUBTOTAL
Wilmington CBD
New Castle Co. Suburbs
NORTHERN DELAWARE SUBTOTAL
TOTAL
27,511,080
7,122,977
6,136,792
40,770,849
2,907,225
3,392,650
5,039,830
2,970,273
3,122,004
4,606,211
1,249,758
16,336,563
2,511,405
4,194,327
3,121,996
5,268,946
1,369,761
56,090,949
3,568,963
3,477,423
7,046,386
9,501,556
6,488,583
234,702
16,224,841
5,937,265
7,814,077
13,751,342
133,884,367
12.43%
9.83%
13.20%
12.09%
16.67%
16.14%
20.79%
22.92%
33.47%
10.32%
9.27%
16.27%
16.53%
14.77%
38.64%
18.78%
19.09%
18.80%
19.98%
15.25%
17.65%
12.37%
13.02%
1.73%
12.48%
12.86%
11.94%
12.34%
15.27%
15.4%
10.0%
14.9%
14.4%
18.3%
21.1%
21.6%
28.3%
33.5%
14.2%
10.0%
19.3%
16.5%
16.2%
39.5%
20.4%
22.4%
21.1%
20.8%
15.6%
18.2%
12.6%
13.0%
1.7%
12.6%
13.1%
14.2%
13.7%
17.1%
3,156
-66,276
36,492
(26,628)
(14,954)
50,913
1,729
124,571
(282,257)
247,634
15,458
33,569
74,094
(53,986)
172,235
(109,586)
11,125
270,545
(8,246)
(12,140)
(20,386)
(142,272)
(204,307)
(1,600)
(348,179)
(27,885)
166,688
138,803
14,155
1,965,728
0
0
1,965,728
0
0
128,922
0
0
0
0
0
15,000
182,676
0
0
0
326,598
0
0
0
105,000
0
0
105,000
0
160,000
160,000
2,557,326
$24.50
$23.00
$23.00
$23.50
$27.86
$29.74
$23.20
$22.81
$21.63
$20.87
$23.04
$23.17
$22.66
$22.76
$27.51
$23.92
$25.76
$23.56
$15.90
$20.23
$18.06
$19.71
$17.58
$13.93
$18.72
$20.33
$19.29
$19.75
$20.72
CB Ri char d El l i s | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005 CB Ri char d El l i s | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005
-15%
-10%
-5%
0%
5%
10%
15%
20%
1
Q
0
4
1
Q
0
5
2
Q
0
4
3
Q
0
4
-4
-2
0
2
4
4
Q
0
4
$20
$21
$22
$23
$24
$25
4
Q
0
4
1
Q
0
5
2
Q
0
4
3
Q
0
4
0.0
0.8
Comcast Center Cira Center 1 Crescent Dr
1.2
0.4
Marrows Rd 501 Fellowship Rd
Vacancy & Availability: No significant change in the region's vacancy rate has been reported
since the 4th Quarter. Currently 15.2%, the regional vacancy has only slightly improved from the
15.61% vacancy rate during the 1st Quarter 2004. Downtown Philadelphia, the Philadelphia Suburbs
and Delaware reported static levels of leasing activity since January 2005, even though both the State
of Delaware and the Philadelphia Suburbs have had tremendous success in filling large blocks of
available space over the last 12 months. Southern New Jersey is still in the midst of a great deal of
industrial-to-office conversion projects that have increased vacancy to 12.34%, up more than 2
percentage points from year end 2004. The vacancy rate for the Philadelphia MSA could increase over
the year as several ongoing construction projects are completed, adding vacant space available for
lease to the region's competitive office inventory.
Net Absorption: Absorption for the region totaled 132,684 square feet. Considering the
lower levels of leasing activity that occurred during the 1st Quarter the region's absorption rate
does not come as a surprise and remains consistent with current market conditions. Ultimately,
conditions have improved for the region over the past year. While "flat" absorption levels have
characterized the market, a positive 132,000 square feet compares well to last year's (1,453,
678) square feet reported during the 1st Quarter 2004. In 1st Quarter 2005, Downtown
Philadelphia, Delaware and the Lehigh Valley "sat still," while the abundance of absorption in
the Philadelphia Suburbs (+ 389,074) was counterbalanced by (348,179) in Southern New
Jersey.
Average Asking Lease Rates: Much like the vacancy rate and levels of absorption,
asking full-service rental rates did not experience any major shifts during the 1st Quarter.
Prior speculation that rental rates have "hit bottom" has been accurate. Average asking lease
rates for the region in 1st Quarter 2004 were $23.40 p/sf, compared to $20.75 p/sf
presently. The economy did not improve significantly enough to afford an increase in asking
rates, nor did conditions worsen such that rates should continue their downward trend.
Southern New Jersey did feel the effects of a strained market as Class-A rates in the three
county region dropped to $18.75 p/sf. Class A asking rental rates in Downtown Philadelphia
are currently at $24.50 p/sf.
Construction Activity: Construction activity continues to be most prevalent in the State of
Delaware and the Philadelphia CBD. Adding to the anticipation of numerous mixed-use developments
along the Wilmington Riverfront, the Buccini- Pollin Group has announced approvals to build an
additional 350,000 square feet at Gateway Plaza with construction slated to begin in July of 2005.
The Commowealth Group is expected to deliver 1 River Plaza, headquarters for AAA Mid-Atlantic, in
June. Construction plans for the Wilmington CBD and New Castle County Suburbs total more than 1M
square feet, compared to only 128,000 in the 1st Quarter 2004.
In Downtown Philadelphia, Brandywine Realty Trust's nearly completed Cira Center is expected to
deliver this Fall. Approximately 210,000 square feet remain available for lease at the 727,725 square
foot tower, yet leases in the pipeline should bring the level of occupancy to almost 93% during the
2nd Quarter. Construction of Liberty Property Trust's Comcast Center has begun. Liberty Property Trust
has also begun construction on 1 Crescent Drive, a 77,000 sf office project at the Philadelphia Navy
Yard.
Vacancy 15.18%
Availability 17.1%
Absorption 0.132M
Average Asking Lease Rent FSG $20.72
VACANCY/AVAILABILITY/NET ABSORPTION AVERAGE ASKING LEASE RATES
Economic Conditions: The US economy added more than 110,000 jobs in
March, bringing the total employment level to 132.9 million and lowering the national
unemployment rate to 5.2%. The unemployment rates for the tri-state area vary slightly
with Delaware and New Jersey below the national average at 4.1% and 4.4%, respectively.
Pennsylvania saw a slight decrease in unemployment from 5.7% at the end of 2004 to
5.2% during the 1st Quarter of 2005 supported by the continued increase in defense
spending. Even with recent job cutbacks and facility closures within the manufacturing
sector, a decrease in the unemployment rate may continue throughout the year. The outlook
for the State of Delaware is bright with the recent announcement that Saturn will re-open its'
assembly plant in New Castle County.
%
V
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M
M
)
N
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t A
b
s
o
r
p
tio
n
(
M
)
We expect some level of improvement in the overall office market during 2005.
Lease transactions will be smaller in size, but the activity level is expected to be
on the rise. The overall direction will be positive even though new construction
projects in the coming year(s) could mean the Philadelphia CBD and Southern
New Jersey will be faced with a pending vacancy issue. A handful of significant
CBD office leases scheduled to expire this year could contribute to an increase in
the overall number of contiguous blocks in Trophy and 'A' class buildings. The
Southern New Jersey office inventory will increase in size, but the defense and
financial sectors should create a level of new job growth strong enough to support
the amount of new inventory.
Chemical and financial services companies have been, and will continue to be
crucial to real estate recovery in Wilmington. Demand for 'A' class space is driving
local developers to the Wilmington CBD and along the Wilmington Riverfront. A
handful of new construction projects have broken ground and the level of
absorption is expected to be positive for the duration of the year.
The 'flight to quality' that took place in 2004 continues in full swing, signaling the
beginning of a recovery for the Philadelphia Suburban market. Demand for space
is expected to trend upward at a modest pace as corporate spending levels
improve. Competition for tenants amongst building owners is still fierce.
Nonetheless, the pipeline for upcoming lease transactions is reported to be strong,
with several major transactions already in the works. Any noticeable increase in
rental rates is not expected for the remaining half of 2005.
MARKET OUTLOOK
0%
2%
4%
6%
1Q05 1Q04 2Q04 3Q04 4Q04
PA 5.2%
NJ 4.4%
DE 4.1%
UNEMPLOYMENT RATE - SEASONALLY ADJUSTED
Source: Bureau of L abor Statistics
www.cbre.com
Vacancy 15.18%
Lease Rates $20.72
Net Absorption* 0.133M
Construction 2.34M
2%
0%
6%
4%
10%
8%
14%
12%
18%
16%
2
Q
0
2
4
Q
0
2
2
Q
0
3
4
Q
0
3
2
Q
0
4
$21
$20
$23
$22
$25
$24
$27
$26
$28
1
Q
0
5
3
Q
0
2
1
Q
0
3
3
Q
0
3
1
Q
0
4
$29
3
Q
0
4
4
Q
0
4
Vacancy Rate 15.18%
Lease Rate $20.72 VACANCY RATE VS. LEASE RATE
NET LEASES
MARKET COVERAGE
NET ABSORPTION
the next.
NET RENTABLE AREA
stairwell areas.
UNDER CONSTRUCTION
Available Building Area which is either physically vacant
or occupied.
AVAILABILITY RATE
VACANT SQUARE FEET
VACANCY RATE
NORMALIZATION
Construction on Liberty Property Trust's
Comcast Center has begun.
Approximately 700,000 square feet is
available for pre-leasing.
Buccini-Pollin Group will add an
additional 350,000 square feet to their
office tower at Gateway Plaza in
Wilmington, Delaware.
Construction at the Philadelphia Navy
Yard is taking shape with a project at 1
Crescent Drive, a 77,000 square foot new
office building expected to deliver in
October, 2005.
HOT TOPICS
QUICK STATS
PHI LADELPHI A REGI ON SUBMARKET MAP
Andrew Rudzinski, Director, Research & Marketing
CB Richard Ellis
1800 John F. Kennedy Blvd., Philadelphia, PA 19103
T. 215.561.8900 F. 215.557.6719
andrew.rudzinski@cbre.com
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of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission
of CB Richard Ellis.
Yr. Current Qtr.
Change from last
Mar ket Vi ew | Phi l adel phi a Regi on Of f i ce Mar ket Vi ew | 1Q 2005
Despite the creation of 37,000 new jobs
in the area, corporations have yet to
decide to lease more office space in the
Philadelphia region. Local developers,
however, remain bullish on the region's
economic recovery. New construction
projects underway
include the
developments along
the Wilmington
riverfront
encompassing office,
residential and retail uses, the ground-
breaking for the Comcast Center in
Philadelphia, and the soon to be
completed Brandywine REITs Cira Centre
in Philadelphia.
As of 1st Quarter 2005, the anticipated
up tick in our regional vacancy rate has
yet to be realized. Overall vacancy rates
and levels of absorption are forecasted to
show some level of improvement in the
coming months. Anxious to fill any
remaining vacant space, building owners
continue to offer competitive rental rates
and attractive concession packages in
order to sign new
leases with tenants.
Select markets could
begin to experience a
number of large blocks
of contiguous space
coming available, specifically southern
New Jersey and downtown Philadelphia.
Employment growth will be essential to
thwart the pending regional vacancy rate
issue.
The Philadelphia region has long enjoyed
a solid tenant base, and a supportive
group of real estate investors that has
F I R S T Q U A R T E R 2 0 0 5
Philadelphia Office
Local developers,
remain bullish on the
region's economic
recovery
MarketView
allowed the Philadelphia MSA to
grow. Real estate experts agree
that a number of factors - from
the low cost of capital to a greater
demand from corporate America
for more efficient office space -
have contributed to this most
recent construction activity in the
region.
www.cbre.com
The rate determined by multiplying the asking full service
lease rate for each building by its associated available space,
summing the products, then dividing by the sum of the avail-
able space with net leases for all buildings in the summary.
BUILDING AREA
The total floor area of the building, typically taken at the drip
line of the building.
CLASS A
Designation for buildings that are extremely desirable and
command the highest rents or sale prices. They are typically
well-maintained properties located in desirable areas with
plentiful amenities. Prime tenant accommodations and quality
management are also characteristics, attracting higher profile
national corporate users.
CLASS B
Designation for buildings that are moderately desirable and
command lower rents and sales prices than Class A properties.
They receive average maintenance and have few in house
amenities. Often preferred by value office or expense driven users.
CLASS C
Designation for buildings that are typically older product with
less attractive or desirable locations. They command lower
rents or sales prices, typically have below-average manage-
ment and maintenance, and often have difficulty attracting
quality tenants.
FULL SERVICE
expenses.
MARKET COVERAGE
Includes all competitive multi-tenant office buildings
30,000 sq. ft. and greater in size.
NET ABSORPTION
NORMALIZATION
square footage of buildings for previous quarters have been
adjusted to match the current base. Availability and vacancy
quarters.
UNDER CONSTRUCTION
VACANT SQUARE FEET
Existing building area which is physically vacant or immediately
available.
F I R S T Q U A R T E R 2 0 0 5
Dallas Office
MarketView
2005 CB Richard Ellis (CBRE) All rights reserved. This report contains information from sources we believe to be reliable, but we make no representation, warranty or guaranty of its accuracy. Opinions, assumptions
and estimates constitute CBREs judgment as of the date this report is first released and are subject to change without notice. CBRE holds all right, title and interest in this report and the proprietary information contained
herein. This report is published for the use of CBRE and its clients only. Redistribution in whole or part to any third party without the prior written consent of CBRE is strictly prohibited.
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
1Q 03 2Q 03 3Q 03 4Q 03 1Q04 2Q04 3Q04 4Q04 1Q05
$16
$17
$18
$19
$20
$21
$22
MARKET OVERVIEW
Based on the main indicators and the general mood among professionals, the Dallas/Fort Worth
office market appears to be strengthening. The Metroplex, with its competitive rates and avail-
ability of quality space, has been highly favored for corporate relocations. During the first quar-
ter, the vigorous performance seen at yearend 2004 gave way to a more measured pace, helped
by a return of demand to the market. Leasing activity was strong in both the Dallas CBD and Fort
Worth CBD submarkets, as well as in the Far North Dallas submarket. Overall vacancy declined
to a seven-quarter low of 22.00% aided by steady demand for newer and higher quality product.
Notably, the amount of sublease space on the market continues to recede as occupancy levels
improve.
After ending 2004 with positive absorption of over 1.06 million sq. ft., net absorption in the first
quarter of 2005 was 434,824 sq. ft., the strongest first quarter performance in recent years.
Average asking rents however, were effectively unchanged, appreciating by a mere $0.10 during
the quarter to $17.59. There were five new projects delivered, adding 411,291 sq. ft. of space
to the market with another 732,964 sq. ft. currently under construction. Most of the new
development is taking place in the rapidly growing Far North Dallas submarket, as well as a few
build-to-suit projects the Las Colinas submarket.
Led by tenants-in-common buyers, sales activity in the Dallas-Fort Worth market surged to a
six-year high in 2004 and sales in the first quarter of 2005 are continuing the vigorous pace.
Over the last twelve months $3.26 billion in transactions closed at an average price of $115 per
sq. ft. according to Real Capital Analytics. Real estate investors have remained enthusiastic even
with the prospect of rising interest rates and low cap rates. There is renewed confidence in mar-
kets such as Dallas where competitively-priced product is attracting investment capital from
coastal money markets.
Based on t he mai n i ndi cat or s
and t he gener al mood among
pr of essi onal s, t he Dal l as/ For t
Wor t h of f i ce mar k et appear s t o
be st r engt heni ng.
Vacancy
Lease Rates
Net Absorption*
Construction
not represent a positive or negative value (e.g., absorption could be
negative, but still represent a positive trend over a specified period).
For the seventh consecutive quarter,
the vacancy rate declined, dropping to
22.00% compared to 23.88% at year-
end.
Although less inventory was delivered
this quarter than the previous quarter,
the pipeline of future deliveries is active.
The amount of sublease space contin-
ues to decline through tenant expansion,
while some tenants have withdrawn their
sublease space from the market altogeth-
er.
Net absorption was a positive
434,824 sq. ft., the strongest first quar-
ter performance in several years.
HOT TOPICS
QUICK STATS
Yr. Qtr.
Change f r om l ast
TOP DALLAS/FORT WORTH LEASE TRANSACTI ONS
DALLAS/FORT WORTH OFFI CE MARKETS
Size (Sq. Ft.) Tenant Location/Submarket
MARKET AREA DESCRIPTIONS
Central Expressway
Net Rentable Area 11,013,782
Number of Buildings 66
Dallas CBD
East Dallas
Far North Dallas
Fort Worth CBD
LBJ Freeway
Las Colinas
Lewisville/Denton
Mid-Cities
North Fort Worth
NE Fort Worth
Preston Center
Richardson/Plano
South Fort Worth
Southwest Dallas
Stemmons Freeway
Uptown/Turtle Creek
Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005
83,220 Concentra 5080 Spectrum (Quorum/Bent Tree)
37,284 Hermes Sargent Bates 901 Main (Dallas CBD)
38,000 Davaco 6688 N. Central Expy (Central Expy)
47,878 1st Global, Inc. 8150 N. Central Expy (Central Expy)
52,984 StoneEagle Group 111 Spring Valley (Richardson)
59,256 Avnet 2021 Lakeside (Richardson)
110,060 DISD 2909 North Buckner (East Dallas)
AUSTIN
1221 S. MoPac
Suite 100
Austin, Texas 78746
512.499.4900
DALLAS
5430 LBJ Freeway
Suite 1100
Dallas, Texas 75240
972.458.4800
HOUSTON
2700 Post Oak Boulevard
Suite 400
Houston, Texas 77056
713.840.6500
SAN ANTONIO
10101 Reunion Place
Suite 160
San Antonio, Texas 78216
210.340.5595
LOCAL OFFICES
30,610 American Electric Power 1201 Elm (Dallas CBD)
Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005 Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005
OFFICE MARKET STATISTICS
MARKET NET RENTABLE VACANT VACANCY AVERAGE ASKING NET
(see map on back) AREA SF RATE LEASE RATES ABSORPTION
VACANCY AND AVAILABILITY
Fueled by strong performance of higher quality product in Far North Dallas, Dallas CBD
and Fort Worth CBD, the vacancy rate for the DFW Metroplex declined for the seventh
consecutive quarter. The overall vacancy rate of 22.00% represents the lowest rate
recorded since the second quarter of 2002, and the largest quarterly change in vacan-
cy (a drop of 1.88%) since midyear 2001. The total amount of vacant space on the
market has declined by 4.01 million sq. ft. since yearend.
The vacancy rate for class A product (20.01%) was 57 basis points lower than that of
the 2004 yearend rate. Class B and class C product also closed the quarter with strong
performances of 24.25% and 19.93% respectively. The dramatic change in the class C
vacancy rate was primarily due to the removal of 5.75 million sq. ft. in the Dallas CBD
now designated for residential or other development. The Fort Worth CBD submarket
has the best occupancy in the market, with the vacancy rate dropping sharply to 4.53%.
NET ABSORPTION
During the first quarter, net absorption totaled a positive 434,824 sq. ft. Although this
was a far cry from the 1.06 million sq. ft. of space absorbed at yearend 2004, it was
the strongest first quarter performance in recent years. More tenants preferred
competitively-priced class A space, contributing to positive 482,543 sq. ft. of net
absorption for class A product. Class B absorption was negative 94,825 sq. ft., while
47,106 sq. ft. of class C space was absorbed.
Negative absorption in the Stemmons and Mid-Cities submarkets (negative 188,035
sq. ft. and 109,833 sq. ft. respectively) was more than offset by modest gains in Far
North Dallas, Dallas CBD and LBJ Freeway submarkets, which combined to account for
508,501 sq. ft. of positive absorption.
Average asking lease rates experienced a positive, albeit slight, appreciation of $0.10
over the yearend rate of $17.49. Across all product types, the changes in leasing rates
were effectively flat, and the first quarter rate of $17.59 was unchanged when com-
pared to average asking rates a year ago. Rents should improve as vacancy rates
recede, but new deliveries and pipeline construction will likely take the edge off any
notable near term improvement. At the end of the first quarter, the average asking rates
per rentable square foot were $20.07 for class A, and $15.52 for class B.
Average asking rates appreciated the most in the Dallas CBD and Preston Center sub-
markets, each registering gains of over $1.00. The highest rates are being quoted in
the Preston Center submarket at $22.68, and also in the Uptown/Turtle Creek submar-
ket at $22.37, where class A rates have climbed to an average of $24.20. In addi-
tion to the Far North Dallas submarket, both the Dallas and Fort Worth downtown sub-
markets have experienced growth in rents.
Construction activity declined to its lowest level in three quarters, however a steady slate
of ongoing and proposed developments will keep supply strong for a while. In addition
to 411,291 sq. ft. of new deliveries this quarter, there is 732,964 sq. ft. of space under
construction. Of the five deliveries this quarter, two were in the North Fort Worth sub-
market, while Far North Dallas, Las Colinas and South Fort Worth each added one new
building.
Although the retail market is experiencing the strongest development activity, several
developers including Duke Realty and Hall Financial are building office product in the
Far North Dallas submarket near the north end of the Dallas Tollway. The submarket
has been a hotbed of office development over the past five years, with over 11.17 mil-
lion sq. ft. of space delivered during that period.
ECONOMIC CONDITIONS
The Dallas/Fort Worth economy is looking to improve with an unem-
ployment rate (6.1%) slightly below Texas (6.2%) but above the nation-
al unemployment rate (5.7%). The current rate is relatively unchanged
from 2004 when the Metroplex unemployment rate stood at 6.0%.
Non-Agricultural employment for the Dallas and Fort Worth/Arlington
MSAs now total 2,790,597 jobs.slkdjf
DEMOGRAPHICS
The population of 5,761,057 as of the 2000 Census makes the
Dallas/Fort Worth metropolitan area one of the largest metropolitan
areas in the Southern United States. From 2000-2004, the area's pop-
ulation grew by 10.47%, which outpaced the state of Texas (at 7.46%)
and the United States (4.09%). Growth for Dallas/Fort Worth from
2004-2009 is projected at 11.76%. The median income for
Dallas/Fort Worth is $52,411. Comparatively the median income is
$44,875 for Texas and $46,183 for the United States.
20%
21%
22%
23%
24%
25%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Vacancy Rates
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Net Absorption
$17.00
$17.20
$17.40
$17.60
$17.80
$18.00
$18.20
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Lease Rates by Area
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Under Construction
Comparative Unemployment Rates
2,740,000
2,760,000
2,780,000
2,800,000
2,820,000
2,840,000
2,860,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Non-Agricultural Employment
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
D/FW TEXAS U.S.
Central Expressway 11,013,782 2,164,397 19.65% $18.41 88,274
Dallas CBD 27,484,892 6,358,118 23.13% $18.75 161,620
East Dallas 3,660,639 459,616 12.56% $14.21 42,641
Far North Dallas 25,777,981 5,001,261 19.40% $18.88 219,794
Fort Worth CBD 9,076,648 411,396 4.53% $14.94 87,825
Las Colinas 20,298,602 5,020,303 24.73% $17.99 (6,156)
LBJ Freeway 21,215,729 6,421,747 30.27% $16.39 127,167
Lewisville/Denton 3,474,801 1,309,383 37.68% $15.45 (9,302)
Mid Cities 13,191,112 2,865,046 21.72% $17.23 (109,833)
North Fort Worth 1,419,228 178,297 12.56% $17.50 (2,021)
NE Fort Worth 1,453,718 222,050 15.27% $15.96 (29,162)
Preston Center 3,521,376 379,917 10.79% $22.68 (39,332)
Richardson/Plano 11,811,838 3,208,750 27.17% $16.62 (26,750)
South Fort Worth 4,344,729 475,180 10.94% $16.74 31,260
SW Dallas 1,228,327 247,801 20.17% $13.87 3,000
Stemmons Freeway 9,288,212 2,901,429 31.24% $13.43 (188,035)
Uptown/Turtle Creek 8,313,557 1,227,402 14.76% $22.37 83,834
TOTALS: 176,575,171 38,852,093 22.00% $17.59 434,824
Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005 Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005
OFFICE MARKET STATISTICS
MARKET NET RENTABLE VACANT VACANCY AVERAGE ASKING NET
(see map on back) AREA SF RATE LEASE RATES ABSORPTION
VACANCY AND AVAILABILITY
Fueled by strong performance of higher quality product in Far North Dallas, Dallas CBD
and Fort Worth CBD, the vacancy rate for the DFW Metroplex declined for the seventh
consecutive quarter. The overall vacancy rate of 22.00% represents the lowest rate
recorded since the second quarter of 2002, and the largest quarterly change in vacan-
cy (a drop of 1.88%) since midyear 2001. The total amount of vacant space on the
market has declined by 4.01 million sq. ft. since yearend.
The vacancy rate for class A product (20.01%) was 57 basis points lower than that of
the 2004 yearend rate. Class B and class C product also closed the quarter with strong
performances of 24.25% and 19.93% respectively. The dramatic change in the class C
vacancy rate was primarily due to the removal of 5.75 million sq. ft. in the Dallas CBD
now designated for residential or other development. The Fort Worth CBD submarket
has the best occupancy in the market, with the vacancy rate dropping sharply to 4.53%.
NET ABSORPTION
During the first quarter, net absorption totaled a positive 434,824 sq. ft. Although this
was a far cry from the 1.06 million sq. ft. of space absorbed at yearend 2004, it was
the strongest first quarter performance in recent years. More tenants preferred
competitively-priced class A space, contributing to positive 482,543 sq. ft. of net
absorption for class A product. Class B absorption was negative 94,825 sq. ft., while
47,106 sq. ft. of class C space was absorbed.
Negative absorption in the Stemmons and Mid-Cities submarkets (negative 188,035
sq. ft. and 109,833 sq. ft. respectively) was more than offset by modest gains in Far
North Dallas, Dallas CBD and LBJ Freeway submarkets, which combined to account for
508,501 sq. ft. of positive absorption.
Average asking lease rates experienced a positive, albeit slight, appreciation of $0.10
over the yearend rate of $17.49. Across all product types, the changes in leasing rates
were effectively flat, and the first quarter rate of $17.59 was unchanged when com-
pared to average asking rates a year ago. Rents should improve as vacancy rates
recede, but new deliveries and pipeline construction will likely take the edge off any
notable near term improvement. At the end of the first quarter, the average asking rates
per rentable square foot were $20.07 for class A, and $15.52 for class B.
Average asking rates appreciated the most in the Dallas CBD and Preston Center sub-
markets, each registering gains of over $1.00. The highest rates are being quoted in
the Preston Center submarket at $22.68, and also in the Uptown/Turtle Creek submar-
ket at $22.37, where class A rates have climbed to an average of $24.20. In addi-
tion to the Far North Dallas submarket, both the Dallas and Fort Worth downtown sub-
markets have experienced growth in rents.
Construction activity declined to its lowest level in three quarters, however a steady slate
of ongoing and proposed developments will keep supply strong for a while. In addition
to 411,291 sq. ft. of new deliveries this quarter, there is 732,964 sq. ft. of space under
construction. Of the five deliveries this quarter, two were in the North Fort Worth sub-
market, while Far North Dallas, Las Colinas and South Fort Worth each added one new
building.
Although the retail market is experiencing the strongest development activity, several
developers including Duke Realty and Hall Financial are building office product in the
Far North Dallas submarket near the north end of the Dallas Tollway. The submarket
has been a hotbed of office development over the past five years, with over 11.17 mil-
lion sq. ft. of space delivered during that period.
ECONOMIC CONDITIONS
The Dallas/Fort Worth economy is looking to improve with an unem-
ployment rate (6.1%) slightly below Texas (6.2%) but above the nation-
al unemployment rate (5.7%). The current rate is relatively unchanged
from 2004 when the Metroplex unemployment rate stood at 6.0%.
Non-Agricultural employment for the Dallas and Fort Worth/Arlington
MSAs now total 2,790,597 jobs.slkdjf
DEMOGRAPHICS
The population of 5,761,057 as of the 2000 Census makes the
Dallas/Fort Worth metropolitan area one of the largest metropolitan
areas in the Southern United States. From 2000-2004, the area's pop-
ulation grew by 10.47%, which outpaced the State of Texas (at 7.46%)
and the United States (4.09%). Growth for Dallas/Fort Worth from
2004-2009 is projected at 11.76%. The median income for
Dallas/Fort Worth is $52,411. Comparatively the median income is
$44,875 for Texas and $46,183 for the United States.
20%
21%
22%
23%
24%
25%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Vacancy Rates
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Net Absorption
$17.00
$17.20
$17.40
$17.60
$17.80
$18.00
$18.20
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Lease Rates by Area
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Under Construction
Comparative Unemployment Rates
2,740,000
2,760,000
2,780,000
2,800,000
2,820,000
2,840,000
2,860,000
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
Non-Agricultural Employment
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
D/FW TEXAS U.S.
Central Expressway 11,013,782 2,164,397 19.65% $18.41 88,274
Dallas CBD 27,484,892 6,358,118 23.13% $18.75 161,620
East Dallas 3,660,639 459,616 12.56% $14.21 42,641
Far North Dallas 25,777,981 5,001,261 19.40% $18.88 219,794
Fort Worth CBD 9,076,648 411,396 4.53% $14.94 87,825
Las Colinas 20,298,602 5,020,303 24.73% $17.99 (6,156)
LBJ Freeway 21,215,729 6,421,747 30.27% $16.39 127,167
Lewisville/Denton 3,474,801 1,309,383 37.68% $15.45 (9,302)
Mid Cities 13,191,112 2,865,046 21.72% $17.23 (109,833)
North Fort Worth 1,419,228 178,297 12.56% $17.50 (2,021)
NE Fort Worth 1,453,718 222,050 15.27% $15.96 (29,162)
Preston Center 3,521,376 379,917 10.79% $22.68 (39,332)
Richardson/Plano 11,811,838 3,208,750 27.17% $16.62 (26,750)
South Fort Worth 4,344,729 475,180 10.94% $16.74 31,260
SW Dallas 1,228,327 247,801 20.17% $13.87 3,000
Stemmons Freeway 9,288,212 2,901,429 31.24% $13.43 (188,035)
Uptown/Turtle Creek 8,313,557 1,227,402 14.76% $22.37 83,834
TOTALS: 176,575,171 38,852,093 22.00% $17.59 434,824
www.cbre.com
The rate determined by multiplying the asking full service
lease rate for each building by its associated available space,
summing the products, then dividing by the sum of the avail-
able space with net leases for all buildings in the summary.
BUILDING AREA
The total floor area of the building, typically taken at the drip
line of the building.
CLASS A
Designation for buildings that are extremely desirable and
command the highest rents or sale prices. They are typically
well-maintained properties located in desirable areas with
plentiful amenities. Prime tenant accommodations and quality
management are also characteristics, attracting higher profile
national corporate users.
CLASS B
Designation for buildings that are moderately desirable and
command lower rents and sales prices than Class A properties.
They receive average maintenance and have few in house
amenities. Often preferred by value office or expense driven users.
CLASS C
Designation for buildings that are typically older product with
less attractive or desirable locations. They command lower
rents or sales prices, typically have below-average manage-
ment and maintenance, and often have difficulty attracting
quality tenants.
FULL SERVICE
expenses.
MARKET COVERAGE
Includes all competitive multi-tenant office buildings
30,000 sq. ft. and greater in size.
NET ABSORPTION
NORMALIZATION
square footage of buildings for previous quarters have been
adjusted to match the current base. Availability and vacancy
quarters.
UNDER CONSTRUCTION
VACANT SQUARE FEET
Existing building area which is physically vacant or immediately
available.
F I R S T Q U A R T E R 2 0 0 5
Dallas Office
MarketView
2005 CB Richard Ellis (CBRE) All rights reserved. This report contains information from sources we believe to be reliable, but we make no representation, warranty or guaranty of its accuracy. Opinions, assumptions
and estimates constitute CBREs judgment as of the date this report is first released and are subject to change without notice. CBRE holds all right, title and interest in this report and the proprietary information contained
herein. This report is published for the use of CBRE and its clients only. Redistribution in whole or part to any third party without the prior written consent of CBRE is strictly prohibited.
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
1Q 03 2Q 03 3Q 03 4Q 03 1Q04 2Q04 3Q04 4Q04 1Q05
$16
$17
$18
$19
$20
$21
$22
MARKET OVERVIEW
Based on the main indicators and the general mood among professionals, the Dallas/Fort Worth
office market appears to be strengthening. The Metroplex, with its competitive rates and avail-
ability of quality space, has been highly favored for corporate relocations. During the first quar-
ter, the vigorous performance seen at yearend 2004 gave way to a more measured pace, helped
by a return of demand to the market. Leasing activity was strong in both the Dallas CBD and Fort
Worth CBD submarkets, as well as in the Far North Dallas submarket. Overall vacancy declined
to a seven-quarter low of 22.00% aided by steady demand for newer and higher quality product.
Notably, the amount of sublease space on the market continues to recede as occupancy levels
improve.
After ending 2004 with positive absorption of over 1.06 million sq. ft., net absorption in the first
quarter of 2005 was 434,824 sq. ft., the strongest first quarter performance in recent years.
Average asking rents however, were effectively unchanged, appreciating by a mere $0.10 during
the quarter to $17.59. There were five new projects delivered, adding 411,291 sq. ft. of space
to the market with another 732,964 sq. ft. currently under construction. Most of the new
development is taking place in the rapidly growing Far North Dallas submarket, as well as a few
build-to-suit projects the Las Colinas submarket.
Led by tenants-in-common buyers, sales activity in the Dallas-Fort Worth market surged to a
six-year high in 2004 and sales in the first quarter of 2005 are continuing the vigorous pace.
Over the last twelve months $3.26 billion in transactions closed at an average price of $115 per
sq. ft. according to Real Capital Analytics. Real estate investors have remained enthusiastic even
with the prospect of rising interest rates and low cap rates. There is renewed confidence in mar-
kets such as Dallas where competitively-priced product is attracting investment capital from
coastal money markets.
Based on t he mai n i ndi cat or s
and t he gener al mood among
pr of essi onal s, t he Dal l as/ For t
Wor t h of f i ce mar k et appear s t o
be st r engt heni ng.
Vacancy
Lease Rates
Net Absorption*
Construction
not represent a positive or negative value (e.g., absorption could be
negative, but still represent a positive trend over a specified period).
For the seventh consecutive quarter,
the vacancy rate declined, dropping to
22.00% compared to 23.88% at year-
end.
Although less inventory was delivered
this quarter than the previous quarter,
the pipeline of future deliveries is active.
The amount of sublease space contin-
ues to decline through tenant expansion,
while some tenants have withdrawn their
sublease space from the market altogeth-
er.
Net absorption was a positive
434,824 sq. ft., the strongest first quar-
ter performance in several years.
HOT TOPICS
QUICK STATS
Yr. Qtr.
Change f r om l ast
TOP DALLAS/FORT WORTH LEASE TRANSACTI ONS
DALLAS/FORT WORTH OFFI CE MARKETS
Size (Sq. Ft.) Tenant Location/Submarket
MARKET AREA DESCRIPTIONS
Central Expressway
Dallas CBD
East Dallas
Far North Dallas
Fort Worth CBD
LBJ Freeway
Las Colinas
Lewisville/Denton
Mid-Cities
North Fort Worth
NE Fort Worth
Preston Center
Richardson/Plano
South Fort Worth
Southwest Dallas
Stemmons Freeway
Uptown/Turtle Creek
Dal l as /For t Wor t h Of f i ce Mar ket Vi ew | 1Q 2005
83,220 Concentra 5080 Spectrum (Quorum/Bent Tree)
37,284 Hermes Sargent Bates 901 Main (Dallas CBD)
38,000 Davaco 6688 N. Central Expy (Central Expy)
47,878 1st Global, Inc. 8150 N. Central Expy (Central Expy)
52,984 StoneEagle Group 111 Spring Valley (Richardson)
59,256 Avnet 2021 Lakeside (Richardson)
110,060 DISD 2909 North Buckner (East Dallas)
AUSTIN
1221 S. MoPac
Suite 100
Austin, Texas 78746
512.499.4900
DALLAS
5430 LBJ Freeway
Suite 1100
Dallas, Texas 75240
972.458.4800
HOUSTON
2700 Post Oak Boulevard
Suite 400
Houston, Texas 77056
713.840.6500
SAN ANTONIO
10101 Reunion Place
Suite 160
San Antonio, Texas 78216
210.340.5595
LOCAL OFFICES
30,610 American Electric Power 1201 Elm (Dallas CBD)

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