An in-depth look at the Cincinnati office market. Analysis includes leasing, sales, construction and employment.

1. JLL Research
Cincinnati | Q1 2017
Office
Outlook
An in-depth look at the
Cincinnati office market.
Analysis includes leasing,
sales, construction and
employment.
JLL Research

2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Insight
The Cincinnati office market saw approximately 275,000 square feet of
negative absorption in the first quarter as the market felt the rippling effect of
large users relocating and (or) consolidating operations. Notable users such
as GE, Coca-Cola, and United Healthcare consolidated operations and
vacated large blocks of space in the first quarter. While these vacated spaces
have negatively impacted market fundamentals, they’ve opened up large
blocks of quality space for Cincinnati’s growing business community.
While larger users vacated their old spaces in the first quarter, several locally
based companies bolstered their footprints to start the year. This positive
trend in leasing activity was seen across multiple submarkets, both urban and
suburban, signaling the underlying strength of the Cincinnati office market.
Tenants in the 10,000-25,000-square-foot range drove leasing velocity in the
first quarter. Users within this size segment looked to Class A space in the
market for their expansions or relocations, while Class B leasing activity
lagged behind in the first quarter.
Outlook
While the trends cited above have led to softened fundamentals to begin the
year, the improving economy and growth of industries that require office
space will strengthen market fundamentals moving forward. Demand in the
market remains high as tenants look to high-end space for expansions,
forecasting an increase in rental rates and a decrease in vacancy rates for
Class A space moving forward. The bulk of demand in the market remains in
the 10,000-25,000 square foot range that has driven leasing year-to-date.
Projects in the development pipeline will wait for positive absorption in the
market before beginning construction.
Fundamentals Forecast
YTD net absorption -276,145 s.f. ▲
Under construction 266,000 s.f. ▶
Total vacancy 18.6% ▼
Average asking rent (gross) $19.28 p.s.f. ▶
Concessions Stable ▶
-500,000
500,000
1,500,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Office market stumbles out of the gate to start 2017
21.3% 19.8% 18.1%
16.1%
18.6%
2013 2014 2015 2016 2017
Total vacancy
$0.00
$20.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
• Several large users relocated and consolidated operations at the
beginning of the year, negatively affecting absorption and vacancy.
• Organic growth of local companies led to expansions of their overall
footprint, driving leasing activity in the first quarter.
• Speculative development remains in a holding phase in the aftermath of
several large users relocating in the market and softening overall
fundamentals.
Cincinnati Office Outlook

3. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Statistics
Cincinnati Office Outlook
Class
Inventory
(s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption
(% of stock)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 12,266,866 19,989 19,989 0.2% 15.7% 17.1% $20.02 0 0
CBD Peripheral Totals 1,622,161 -20,446 -20,446 -1.3% 30.8% 30.8% $18.52 0 0
Midtown Totals 2,462,767 69,253 69,253 2.8% 7.1% 7.3% $21.73 80,000 146,000
Urban Totals 16,351,794 68,796 68,796 0.4% 15.9% 16.9% $19.85 80,000 146,000
Blue Ash/Montgomery Totals 4,889,567 -218,090 -218,090 -4.5% 13.9% 15.8% $17.40 0 120,000
East Totals 1,128,534 0 0 0.0% 17.5% 17.5% $15.97 0 0
Fields Ertel/Mason Totals 2,584,744 -23,015 -23,015 -0.9% 12.9% 13.5% $22.60 47,000 0
Kenwood Totals 1,411,516 -27,782 -27,782 -2.0% 11.1% 11.9% $24.62 0 0
Northern Kentucky Totals 2,659,124 -10,048 -10,048 -0.4% 15.1% 15.6% $22.89 0 0
Northern Kentucky Riverfront Totals 1,435,604 1,353 1,353 0.1% 31.2% 31.2% $21.37 0 0
Tri-County Totals 3,133,895 27,808 27,808 0.9% 23.2% 24.5% $16.81 0 0
West Totals 156,329 0 0 0.0% 9.7% 9.7% $17.31 0 0
West Chester Totals 1,561,477 -11,187 -11,187 -0.7% 15.8% 15.8% $22.39 0 0
Suburbs Totals 18,960,790 -260,961 -260,961 -1.4% 16.9% 17.8% $19.70 47,000 120,000
Cincinnati Totals 35,312,584 -192,165 -192,165 -0.5% 16.4% 17.4% $19.77 127,000 266,000
CBD A 6,905,746 -39,047 -39,047 -0.6% 14.1% 14.9% $22.88 0 0
CBD Peripheral A 789,967 -12,474 -12,474 -1.6% 39.9% 39.9% $20.82 0 0
Midtown A 1,410,903 79,860 79,860 5.7% 8.7% 8.7% $23.55 80,000 146,000
Urban A 9,106,616 28,339 28,339 0.3% 15.5% 16.1% $22.48 80,000 146,000
Blue Ash/Montgomery A 2,474,319 -167,914 -167,914 -6.8% 9.9% 13.7% $21.40 0 120,000
East A 741,078 0 0 0.0% 0.1% 0.1% $17.93 0 0
Fields Ertel/Mason A 1,630,862 -44,024 -44,024 -2.7% 13.4% 13.6% $25.78 47,000 0
Kenwood A 996,823 -8,976 -8,976 -0.9% 8.9% 10.0% $27.64 0 0
Northern Kentucky A 1,328,310 -600 -600 0.0% 14.0% 15.0% $19.33 0 0
Northern Kentucky Riverfront A 1,320,104 3,673 3,673 0.3% 32.8% 32.8% $21.54 0 0
Tri-County A 1,001,196 -23,844 -23,844 -2.4% 13.9% 15.0% $19.49 0 0
West A 22,472 0 0 0.0% 28.9% 28.9% $18.95 0 0
West Chester A 1,329,626 2,310 2,310 0.2% 15.1% 15.1% $23.49 0 0
Suburbs A 10,844,790 -239,375 -239,375 -2.2% 14.0% 15.2% $22.27 47,000 120,000
Cincinnati A 19,951,406 -211,036 -211,036 -1.1% 14.7% 15.6% $22.37 127,000 266,000
CBD B 5,361,120 59,036 59,036 1.1% 17.7% 19.8% $17.08 0 0
CBD Peripheral B 832,194 -7,972 -7,972 -1.0% 22.2% 22.2% $14.59 0 0
Midtown B 1,051,864 -10,607 -10,607 -1.0% 4.8% 5.3% $17.26 0 0
Urban B 7,245,178 40,457 40,457 0.6% 16.3% 18.0% $16.70 0 0
Blue Ash/Montgomery B 2,415,248 -50,176 -50,176 -2.1% 18.0% 18.0% $15.15 0 0
East B 387,456 0 0 0.0% 50.9% 50.9% $15.96 0 0
Fields Ertel/Mason B 953,882 21,009 21,009 2.2% 12.1% 13.2% $16.56 0 0
Kenwood B 414,693 -18,806 -18,806 -4.5% 16.5% 16.5% $20.71 0 0
Northern Kentucky B 1,330,814 -9,448 -9,448 -0.7% 16.3% 16.3% $25.95 0 0
Northern Kentucky Riverfront B 115,500 -2,320 -2,320 -2.0% 12.6% 12.6% $16.52 0 0
Tri-County B 2,132,699 51,652 51,652 2.4% 27.6% 28.9% $16.18 0 0
West B 133,857 0 0 0.0% 6.5% 6.5% $16.08 0 0
West Chester B 231,851 -13,497 -13,497 -5.8% 19.6% 19.6% $17.56 0 0
Suburbs B 8,116,000 -21,586 -21,586 -0.3% 20.8% 21.3% $17.39 0 0
Cincinnati B 15,361,178 18,871 18,871 0.1% 18.7% 19.7% $17.11 0 0

4. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Construction
Cincinnati Office Outlook
Address: 105 N Broadway Street
Square feet: 47,000
Tenant: Citizens National Bank
Owner: Bunnell Hill Development
Delivered: Q1 2017
Estimated completion: Q2
2017 Delivered: Q1 2017
Address: SE of E University Ave
and Burnet Ave
Square feet: 146,000
Tenants: TBD
Owner: The City of Cincinnati
Address: 3075 Vandercar Way
Square feet: 80,000
Tenant: Anthem Blue Cross and
Blue Shield
Owner: Al. Neyer
Address: 4420 Cooper Road
Square feet: 120,000
Tenant: TBD
Owner: The City of Blue Ash
Estimated completion: Q2
2017

5. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Sales
Cincinnati Office Outlook
This report analyzes sales over the last 12 months.
$328,529,920
15
$175
-
43.3%
56.7%
6-7% 1 - $0
6.5-7.5% 0.0% 16 $328,529,920
Notable sales transactions year-to-date
RBA (s.f.) $ p.s.f. Sale date
338,533 $316 Oct-16
163,000 $180 Nov-16
175,695 $177 Feb-16
175,695 $154 Mar-16
190,733 $150 Jan-16
221,215 $148 Sep-16
253,353 $101 Mar-16
64,000 $44 Feb-16
81,000 $41 May-16
197,302 $41 Aug-16
Transactions details
Number of partial interest
transactions
Core Class A CBD
Core Class A suburban
Number of domestic
buyers
Foreign capital
Average partial interest
acquired
Number of foreign buyers
Domestic capital
Average Class A price p.s.f.
Sales activity by building class12 months at a glance
YTD sales volume
Number of transactions
Average Class A cap rate
Sales volume $ by submarket
Urban sales volume as % of total
Suburban sales volume as % of
total
Cap rate range
90 North Real Estate Partners Carter & Associates $107,000,000
Building Buyer Seller Sale price ($)
The Landings II
McAuley Place
Rookwood Tower
The Landings I
GE Building
$32,700,000
Pictoria Tower I Fairbridge Properties New Tower Trust Co. $25,694,920
Top buyers (s.f.)
URS Center Neyer Properties LNR Partners $8,000,000
Hartford Building Neyer Holdings Corp Vulcan Property Management $2,800,000
Tri-State Building The Parkes Companies Tri-State Equities LLC $3,285,000
Park 50 Bldg 26 Cole Capital Lexington Realty Trust
$29,300,000
$31,165,000
$27,135,000
$28,700,000
Top sellers (s.f.)
Ayers Asset Management
VanTrust Real Estate
VanTrust Real Estate
Matrix Holdings Casto
Gramercy Property Trust
Gramercy Property Trust
Gramercy Property Trust
27%
24%
19%
18%
13%
NewcrestImage Hudson Holdings
VanTrust Real Estate 90 North Real Estate Partners
Fairbridge Properties
26%
24%21%
16%
12%
Gramercy Property Trust CW Capital
Hertz Investment Group Carter & Associates
New Tower Trust Co.
$1,300,000
$3,400,000
$29,800,000
$31,944,920
$32,700,000
$87,000,000
$142,385,000
CBD Peripheral
Fields
Ertel/Mason
Midtown
Tri-County
East
Blue Ash
CBD
$281,694,920
$38,950,000
$7,885,000
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
A B C

6. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
20%
16%
15%12%
11%
10%
7%
Trade, Transportation & Utilities
Professional & Business Services
Educational & Health Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
Q1 2017
Employment
Cincinnati Office Outlook
4.7%U.S. unemployment
1.7%U.S. 12-month job growth
5.0%Cincinnati unemployment
1.9%Cincinnati 12-month job growth
5.0%Ohio unemployment
0.8%Ohio 12-month job growth
0.0%
0.7%
1.4%
2.1%
2.8%
2013 2014 2015 2016 2017
Cincinnati U.S.
-600
-500
200
300
1,400
2,200
2,700
3,000
4,600
6,300
-2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Leisure & Hospitality
Government
Information
Other Services
Professional & Business Services
Educational & Health Services
Manufacturing
Mining, Logging & Construction
Financial Activities
Trade, Transportation & Utilities
-2.0
3.0
8.0
2013 2014 2015 2016 2017
Professional & Business Services Information
Government Financial Activities
0%
4%
8%
12%
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
2013 2014 2015 2016 2017
Employment Unemployment
Employment vs. unemployment rate
Employment by industry Office employment trends (12-month change, 000s)
Job growth by sector (12-month change)
Job growth (12-month change)
Job growth by sector (12-month change)

7. © 2017 Jones Lang LaSalle IP, Inc.
All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Andrew Batson
Vice President, Director of Research
+1 216 937 4374
andrew.batson@am.jll.com
Abby Armbruster
Research Analyst
+1 513 252 2148
abby.armbruster@am.jll.com
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. A
Fortune 500 company, JLL helps real estate owners,
occupiers and investors achieve their business ambitions.
In 2016, JLL had revenue of $6.8 billion and fee revenue of
$5.8 billion and, on behalf of clients, managed 4.4 billion
square feet, or 409 million square meters, and completed
sales acquisitions and finance transactions of
approximately $136 billion. At year-end 2016, JLL had
nearly 300 corporate offices, operations in over 80
countries and a global workforce of more than 77,000. As
of December 31, 2016, LaSalle Investment Management
has $60.1 billion of real estate under asset management.
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Jones Lang LaSalle Incorporated. For further information,
visit www.jll.com.
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