Though vacancy remained unchanged at 15.6 percent in Q1, as the year continues we expect it to drop below 15 percent for the first time in a decade. Corporate growth is driving expansionary activity, and tenants are thus faced with increasingly challenging market conditions. Currently more than one-third of all markets are favorable to landlords, and that’s expected to increase to three-quarters. With this leverage, landlords will continue driving rents upward, potentially surpassing a 5.0-percent increase by year end. Learn more and see market-by-market data at http://bit.ly/1Cfucrv

1. Fundamentals tighten, furthering
shift in favor of landlords
United States Office Review Q1 2015

2. Despite slower activity in the first quarter,
office markets across the U.S. are on the brink
of a tipping point as evidenced by more
expansionary leasing activity and consistently-
increasing tour velocity. Landlords are
responding by increasing rents aggressively,
with first quarter rent growth posting the
highest increase of the recovery so far, by a
multiple of three.

3. Market fundamentals are tightening, shifting negotiating leverage
more broadly in landlords’ favor
2
Source: JLL Research
Leasing activity
• Leasing activity overall inched ahead slightly from last quarter, but compared to more recent quarters remains
low. Conversely, expansionary activity is on the rise, which will ultimately result in greater net absorption than
recent years in which renewals and contractions were more common.
Absorption
• Absorption fell to a post-recession low of 6.3 million square feet in the first quarter, but the rapid acceleration of
expansionary leasing, especially among large-block occupiers, will likely result in a spike in absorption by the
end of the year. As more and more large tenants ink expansion deals, the time between lease signing and
physical absorption of space will grow as tenants need greater lead time to relocate.
Vacancy
• A reduced level of quarterly absorption, combined with 9.4 million square feet of completions, kept vacancy
stable at 15.6 percent. Vacancy in particular ticked marginally upward in CBD properties, while suburban
markets saw decreases in total vacancy.
Rents
• Rents jumped by 3.1 percent across the country, with CBDs seeing a 6.1-percent bump in asking rents.
Landlords are becoming increasingly aggressive and confident, reducing tenant leverage in the process.
• The gap between CBD and suburban rents widened after narrowing somewhat in 2014 and now rests at
$16.21 per square foot. Similarly, Class A space commands a $5.13-per-square-foot premium.
Construction
• Construction activity has more than doubled over the course of the year as market conditions tighten and
reduced space options are pushing up asking rents. While 72.1 million square feet of space will come to the
market over the next two years, only 50.7 percent is available due to high preleasing rates. Further, new
construction is commanding a 22.8-percent premium in terms of asking rents.

4. Leasing activity

5. Leasing activity was relatively flat in Q1, but more tenants are
expanding rather than renewing
4
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
Leasingactivity(s.f.)
Source: JLL Research

6. Leasing activity inched ahead in Q1, but down from previous
quarters
5
258,547,529
246,521,385
228,764,145
275,274,581
282,356,988
234,094,033
249,187,644
236,140,690
54,915,752
0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000
2007
2008
2009
2010
2011
2012
2013
2014
YTD 2015
Leasing activity (s.f.)
Source: JLL Research

7. Despite absorption losses of +1.0 MSF, NYC and DC comprised
20.0 percent of leasing activity in Q1
6
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
NewYork
Washington,DC
Dallas
Boston
Chicago
LosAngeles
OrangeCounty
SanFrancisco
Seattle
NewJersey
Denver
Atlanta
Philadelphia
SiliconValley
SanDiego
Phoenix
Austin
FairfieldCounty
Oakland-EastBay
Houston
Minneapolis
Detroit
Portland
St.Louis
Baltimore
Pittsburgh
Charlotte
KansasCity
Tampa
Sacramento
WestchesterCounty
Miami
Orlando
Indianapolis
Cleveland
Milwaukee
FortLauderdale
Cincinnati
WestPalmBeach
Raleigh-Durham
Jacksonville
LongIsland
HamptonRoads
SanAntonio
Richmond
SaltLakeCity
Columbus
SanFranciscoPeninsula
Leasingactivity(s.f.)
Source: JLL Research
11.9 MSF

8. 7
25.2 MSF
total square feet leased in Q1 in transactions
20,000 s.f. or larger
99
average term in months
56% / 7% / 33%
of tenants are growing / shrinking / stable
42% / 56%
urban / suburban breakdown
of Q1 volume
56% of leases larger than 20,000 square feet were expansionary
Source: JLL Research

9. 8
Urban Suburban Total metro
186,563
229,964
256,145
329,179
497,342
519,905
941,781
963,554
1,532,062
2,186,351
0 1,500,000 3,000,000
St. Louis
Portland
Boston
Seattle-Bellevue
Silicon Valley
Chicago
Houston
San Francisco
Washington, DC
New York
416,723
499,139
504,294
666,028
671,909
794,909
802,731
902,484
943,319
1,152,952
0 1,000,000 2,000,000
Suburban Maryland
Chicago
Dallas
Atlanta
Orange County
New Jersey
Boston
Sacramento
Oakland-East Bay
Northern Virginia
822,409
902,484
941,781
963,554
968,319
1,019,044
1,058,876
1,214,438
1,532,062
2,186,351
0 1,500,000 3,000,000
New Jersey
Sacramento
Houston
San Francisco
Oakland-East Bay
Chicago
Boston
Northern Virginia
Washington, DC
New York
East Coast markets dominated leasing activity with New York
remaining #1
Source: JLL Research

10. 9
Large leasing from new and established companies spread across
a diverse array of geographies
Seattle CBD
Zillow: 155,000 s.f.
CBD (Portland)
Moda Health: 176,000 s.f.
Airport Area(Orange County)
Hyundai Capital: 178,000 s.f.
Westchase (Houston)
Samsung Engineering: 160,000 s.f.
(Southeast) Minneapolis
Wells Fargo: 190,000 s.f.
North (Chicago)
Baxalta: 260,000 s.f.
Market Street West (Philadelphia)
ISO Insurance: 392,000 s.f.
Grand Central (NYC)
MetLife: 430,000 s.f.
East End (DC)
Fannie Mae: 700,000 s.f.
Source: JLL Research
Northwest (Atlanta)
SITA: 156,000 s.f.

11. 10
Unknown
Non-profit
Creative
Consumer-oriented
Professional and business services
Finance
Scientific & technical
0 3,000,000 6,000,000 9,000,000
Telecom/Mobile
Unknown
Government
Architecture, engineering,…
Manufacturing & distribution
Energy & utilities
Education
Other professional and business…
Association, non-profit, union
Retail & hospitality
Accounting, consulting, research,…
Real estate
Life sciences
Marketing, advertising,…
Media & entertainment
Aerospace, defense, transportation
Law firm
Healthcare
Technology
Banking, finance, insurance
0 2,000,000 4,000,000
Leasing activity within the scientific and technical industry cluster… …dominated by technology companies, led activity in the fourth quarter
Scientific and technical jobs maintain the lion’s share of large-
block leasing activity
Source: JLL Research

12. 11
158
71
58 60
30
38
16
0
20
40
60
80
100
120
140
160
180
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Numberoftransactions(s.f.)
Leasingactivity(s.f.)
s.f. leased number of transactions
Volume highest over 100,000 square feet, but more transactions
among smaller tenants
Source: JLL Research

13. 12
252,776
3,235,040
3,871,638
13,004,919
0 10,000,000
C
Trophy
B
A
40.2%
32.7%
54.2%
60.8%
Class C
Trophy
Class B
Class A
0.0% 20.0% 40.0% 60.0% 80.0%
Total leasing activity >20,000 s.f. by building class % of tenants expanding in each building class
Quality remains top demand driver, but tenants in all classes are
expanding
Source: JLL Research

14. 13
56%
of companies grew in Q1
11%
of companies shrunk in
Q1
33%
of companies were stable
in Q1
Technology
26.5% of companies
Banking, finance, insurance
17.2% of companies
Healthcare
10.7% of companies
Banking, finance, insurance
32.6% of companies
Technology
9.4% of companies
Government
9.1% of companies
Law firm
16.5% of companies
Aerospace, defense, trans.
14.4% of companies
Energy & utilities
12.9% of companies
Expansionary leases account for more than half of all large-block
activity
Source: JLL Research

15. Absorption

16. Absorption as a % of inventory declined from previous quarters,
but still in-line with historical average
15
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2008 2009 2010 2011 2012 2013 2014 2015
Quarterlynetabsorption(as%ofinventory)
Source: JLL Research
15-year trailing annual average

17. Absorption volume expected to increase significantly by year-end
16
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YTDnetabsorption(as%ofinventory)
Source: JLL Research
15-year trailing
annual average

18. Class B and C space recorded its first quarter of absorption in
over a year, as tenants seek quality space
17
-10,000,000
-5,000,000
0
5,000,000
10,000,000
15,000,000
20,000,000
2010 2011 2012 2013 2014 2015
Quarterlynetabsorption(s.f.)
Class A (CBD) Class A (suburban)
Class B (CBD) Class B (suburban)
Class C (CBD) Class C (suburban)
Source: JLL Research

19. Absorption in Class B over the past four quarters 60% of
absorption over the preceding five years
18
Source: JLL Research
19,241,155
11,494,900
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2010-Q1 2014 Past four quarters
ClassBnetabsorption(s.f.)
1,131,833 s.f. per quarter 2,873,725 s.f. per quarter

20. Losses incurred in Q1 expected to be offset by occupancy gains
later in the year
19
-2,000,000
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Dallas
SiliconValley
Austin
Philadelphia
Detroit
Raleigh/Durham
Boston
SanFrancisco
Minneapolis
Orlando
SaltLakeCity
Phoenix
Oakland-EastBay
Atlanta
Sacramento
TampaBay
Cincinnati
Portland
Pittsburgh
SanAntonio
Houston
Baltimore
Chicago
Miami
Charlotte
WestPalmBeach
Richmond
LongIsland
St.Louis
SanFranciscoPeninsula
LosAngeles
Cleveland
Denver
FortLauderdale
OrangeCounty
Milwaukee
SanDiego
HamptonRoads
KansasCity
Indianapolis
Jacksonville
WestchesterCounty
Columbus
FairfieldCounty
Seattle
Washington,DC
NewJersey
NewYork
YTDnetabsorption(s.f.)
Source: JLL Research
Nine markets posted occupancy losses totaling
3.7 million square feet

21. Central U.S. markets recorded highest occupancy gains in Q1,
supplanting East Coast for first time in a year
20
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2010 2011 2012 2013 2014 2015
Shareofquarterlynetabsorption
East Coast Central West Coast
Source: JLL Research

22. Tech markets regained absorption share as NYC and DC
occupancy declined
21
Source: JLL Research
NYC and DC (*excludes Midtown South)
Tech markets (*includes Midtown South)
Energy markets
Sunbelt
All other markets
70.0%
29.7%
6.4%
2010
5.1%
33.5%
19.0%
18.4%
23.9%
2011
0.0%
37.5%
26.0%
29.1%
7.4%
2012
11.1%
21.6%
22.3%
18.6%
26.4%
2013
13.7%
23.1%
15.3%
20.1%
27.8%
2014
0.0%
37.0%
23.5%
12.9%
26.6%
YTD 2015

23. Energy losses severe, but not yet negative. Seattle expected to
erase losses with Amazon by year-end
22
1.2%
0.0%
0.1%
0.3%
0.5%
-0.3%
0.2%
1.7%
0.2%
0.3% 0.3%
1.1%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
YTDnetabsorption(s.f.)
Source: JLL Research
Energy Tech Sunbelt
U.S. average

24. East Coast losses weighing heavily on region’s overall occupancy
gains
23
Source: JLL Research
-10,000,000
-5,000,000
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2010 2011 2012 2013 2014 YTD 2015
Netabsorption(s.f.)
Atlanta South Florida Rest of the East Coast

25. Class B and C properties have accounted for only one-fifth of net
absorption over the past five years
24
Source: JLL Research
Trophy and Class A
net absorption
147.5
m.s.f.2010-YTD 2015
Class B and C net
absorption
29.6
m.s.f.2010-YTD 2015

26. -4,000,000
-3,000,000
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2010 2011 2012 2013 2014 2015
Netabsorption(s.f.)
Atlanta Chicago Los Angeles Miami Philadelphia Phoenix
Diversified markets’ occupancy gains already 30 percent of 2014
volume in Q1
25
Source: JLL Research
Philadelphia tenants
expanded into 566,000 s.f.
in Q1

27. Class A occupancy gains made up for losses in Class B and C
26
133.5%
93.9%
74.5% 76.3%
295.2%
98.5%
82.0% 78.3%
45.2%
73.4%
63.5%
80.9%
57.3%
82.3%
66.9% 69.8%
115.2%
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
300.0%
350.0%
2011 2012 2013 2014 2015
ClassAshareofquarterlyabsorption
Source: JLL Research

28. CBD Class A absorption significantly lower than recent quarters
as supply declines across the U.S.
27
166.2%
90.4% 88.8%
80.8%
100.0%
106.1%
74.8%
0.0%
88.1% 86.5%
49.6%
92.0%
48.8%
100.9%
66.4%
32.6%
19.5%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
2011 2012 2013 2014 2015
ClassAshareofquarterlyabsorption
Source: JLL Research

29. Demand for creative space pushing occupancy gains above
national average % of inventory
28
4.9% 4.9%
3.8% 3.7%
3.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Boston
(Mid-Cambridge)
San Francisco
(South Financial District)
New York
(Hudson Square)
San Francisco
(Mid-Market)
San Francisco
(Jackson Square)
YTDClassBnetabsorption(%ofinventory)
Source: JLL Research
U.S. average

30. Still, Class A continues to trump Class B according to most
indicators
29
Source: JLL Research
115%of absorbed space in 2014
has been Class A
$11.28per square foot difference
between Class A and B space…
45.8%premium charged for Class A space
versus Class B
-420bpdifference between Class A and
Class B total vacancy

31. Vacancy

32. Due to lower quarterly absorption and 9.4 million square feet of
completions, vacancy stayed stable at 15.6 percent
31
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
2009 2010 2011 2012 2013 2014 2015
Totalvacancy(%)
Source: JLL Research

33. Although more space is expected to come to the market, high
preleasing should allow for further drops in vacancy in 2015
32
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2015
Totalvacancy(%)
Source: JLL Research

34. Vacancy has ticked upward marginally in CBD Class A and B
properties, but downward in suburban markets
33
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
2010 2011 2012 2013 2014 2015
Totalvacancy(%)
Class A (CBD) Class A (suburban)
Class B (CBD) Class B (suburban)
Class C (CBD) Class C (suburban)
Source: JLL Research

35. Although office-using employment grew by 156,000 during Q1,
vacancy is flat
34
14.0%
14.5%
15.0%
15.5%
16.0%
16.5%
17.0%
17.5%
18.0%
18.5%
19.0%
26,000
26,500
27,000
27,500
28,000
28,500
29,000
29,500
30,000
30,500
31,000
2011 2012 2013 2014 2015
Totalvacancy(%)
Office-usingemployment(thousands)
Office-using employment (thousands) Total vacancy (%)
Source: JLL Research

36. CBD vacancy just 70 basis points from historic low, while
suburban vacancy is 220 basis points away
35
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
21.0%
23.0%
Totalvacancy(%)
Source: JLL Research

37. After increasing in Q4, sublease vacancy dropped by nearly
500,000 s.f. even with increase in Houston by 3.5 m.s.f.
36
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
2009 2010 2011 2012 2013 2014 2015
Subleasespace(s.f.)
Source: JLL Research

38. Rents

39. Peaking
phase
Falling
phase
Rising
phase
Bottoming
phase
Dallas
Austin, San Francisco
Atlanta, Fort Lauderdale, Indianapolis,
Raleigh-Durham, Richmond, Tampa
Columbus, Sacramento, West Palm Beach
Baltimore,
Washington, DC
Minneapolis
Charlotte, Fairfield County
Chicago, Cincinnati, Jacksonville,
Oakland-East Bay, San Diego
Denver, Miami, Phoenix, United States
Detroit, Hampton Roads, San Antonio, Westchester County
Kansas City, Orange County, Orlando, Salt Lake City
Boston
New York
Los Angeles, Pittsburgh, Portland, Seattle-Bellevue
Cleveland, Long Island, Milwaukee, Philadelphia, St. Louis
San Francisco Peninsula, Silicon Valley
New Jersey
Houston
Source: JLL Research
Q1 2015 U.S. overall office clock

40. Peaking
phase
Falling
phase
Rising
phase
Bottoming
phase
Baltimore, Kansas City
Atlanta, Midtown (New York), Raleigh-Durham, Tampa
Boston, Los Angeles, Pittsburgh
Charlotte, Stamford CBD
Chicago, Downtown (New York), Philadelphia,
Oakland CBD, Salt Lake City
Cincinnati, Cleveland
Columbus, Richmond,
St. Louis, White Plains CBD
Dallas, Greenwich CBD, Indianapolis, Jacksonville
Denver, Fort Lauderdale
Detroit, Milwaukee, Phoenix
Miami, Seattle CBD
Minneapolis
Austin, Midtown South (New York), San Francisco
Orlando, United States
Sacramento, Washington, DC, West Palm Beach
San Antonio, San Diego
Portland, San Jose CBD
Houston
Source: JLL Research
Q1 2015 U.S. CBD office clock

41. Q1 2015 U.S. suburban office clock
Peaking
phase
Falling
phase
Rising
phase
Bottoming
phase
Atlanta, Baltimore, Chicago, Fairfield County,
Fort Lauderdale, Hampton Roads (Peninsula) Miami,
Milwaukee, Oakland Suburbs, Orlando, Raleigh-Durham, Tampa
Cambridge, San Francisco
Boston, Minneapolis, Nassau County,
Phoenix, Salt Lake City
Charlotte, Philadelphia
Cincinnati, San Diego, United States, Westchester County
Cleveland, Columbus,
Hampton Roads (Southside), San Antonio
Dallas
Denver, East Bay Suburbs, Indianapolis
Detroit
Kansas City
Suffolk County
Los Angeles
Central New Jersey,
Northern New Jersey,
Washington, DC
Jacksonville, Orange County, Portland,
Seattle-Bellevue, St. Louis
Pittsburgh
Lehigh Valley, Northern
Delaware, Sacramento,
West Palm Beach
San Francisco Peninsula
Bellevue CBD, Richmond
Silicon Valley
Austin
Southern New Jersey
Houston
Source: JLL Research

42. Tightening market conditions are giving landlords confidence:
asking rents spiked by 3.1 percent in Q1, highest this cycle
41
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
2008 2009 2010 2011 2012 2013 2014 2015
Quarterlyrentgrowth(%)
Source: JLL Research

43. CBD Class A rents continue to jump at 4.2 percent year-on-year;
nearly all segments recording strong growth
42
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
2010 2011 2012 2013 2014 2015
Averageaskingrents($p.s.f.)
Class A (CBD) Class A (suburban)
Class B (CBD) Class B (suburban)
Class C (CBD) Class C (suburban)
Source: JLL Research

44. Since Q1 2010, CBD Class A rents have grown by more than
one-fifth; Suburban Class B barely increased in nominal terms
43
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2010 2011 2012 2013 2014 2015
Averageaskingrents($p.s.f.)
Class A (CBD) Class A (suburban)
Class B (CBD) Class B (suburban)
Class C (CBD) Class C (suburban)
Source: JLL Research
+21.0%
CBD Class A
+10.8%
Suburban Class C
+9.5%
CBD Class C
+6.8%
Suburban Class A
+5.8%
CBD Class B
+0.9%
Suburban Class B

45. 6.1-percent bump in CBD asking rents highlights a combination
of high demand and minimal supply
44
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2011 2012 2013 2014 2015
Quarterlyrentgrowth(%)
CBD rent growth Suburban rent growth
Source: JLL Research
CBD average: 1.1%
Suburban average: 0.2%

46. After narrowing in 2014, the rent gap grew to new heights in Q1:
CBDs are now $16.21 (+66.1 percent) more expensive
45
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
2010 2011 2012 2013 2014 2015
Averageaskingrent($p.s.f)
CBD Suburbs
Source: JLL Research
$11.36
$16.21

47. Like CBDs vs. suburbs, the Class A rent premium jumped in Q1
2015 to a cyclical high of $5.13 per square foot
46
$3.40
$3.49 $3.49
$3.53
$3.68
$3.81
$3.97 $3.99
$4.21
$4.26
$4.37 $4.38
$4.86
$4.71
$4.82
$4.76
$4.97
$4.92 $4.90
$4.81
$5.13
$3.00
$3.50
$4.00
$4.50
$5.00
$5.50
2010 2011 2012 2013 2014 2015
ClassApremium($p.s.f.)
Source: JLL Research

48. TI allowances are beginning to elevate due to new construction
providing higher concessions, but free month is declining
47
3.5
4.1
5.1
6.1 6.2
5.7
5.1
5.3
5.8
5.6
$23.00
$24.00
$25.00
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
TIallowance($p.s.f.)
Freemonthsofrent
Free months of rent TI allowance ($ p.s.f.)
Source: JLL Research

49. Construction

50. Construction volumes have nearly doubled over the course of the
year to 84.3 million square feet; expected to rise even more
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Underconstruction(s.f.)
49
Source: JLL Research

51. Market Under construction (s.f.) Share
Houston 12,833,724 15.2%
New York 7,206,342 8.6%
Dallas 7,177,086 8.5%
Seattle-Bellevue 6,901,827 8.2%
Boston 4,898,240 5.8%
Washington, DC 4,892,802 5.8%
Silicon Valley 4,811,393 5.7%
Phoenix 3,661,725 4.3%
Austin 3,473,083 4.1%
San Francisco 3,134,205 3.7%
Philadelphia 3,047,379 3.6%
Chicago 3,003,000 3.6%
Denver 2,340,203 2.8%
Los Angeles 2,069,739 2.5%
All other markets 9,383,541 17.5%
United States 84,204,307 100.0%
While Houston still leads the nation in development, other
markets have picked up the pace
Houston New York Dallas Seattle-Bellevue Boston
Washington, DC Silicon Valley Phoenix Austin San Francisco
Philadelphia Chicago Denver Los Angeles All other markets
50
Source: JLL Research

52. Year-to-date, completions already total 40.1 percent of 2014’s
total deliveries, although 10.1 m.s.f. is still below average
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Completions(s.f.)
51
10.1 m.s.f.
Source: JLL Research
Average completions: 45.7 m.s.f.

53. The majority of current development – 72.1 million square feet –
will deliver in 2015 and 2016
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
2015 2016 2017 2018
Completions(s.f.)
Speculative BTS
52
Source: JLL Research

54. 0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
2015 2016 2017 2018
Completions(s.f.)
Available Pre-leased
53
Source: JLL Research
Roughly 49.3 percent of the space under construction is
preleased, limiting options for tenants

55. The 12.8 million square feet of starts in Q1 is the second-highest
quarterly figure during the recovery so far
7,322,061
11,407,786
13,060,032
4,781,395
11,818,372
9,168,187
9,855,374
12,720,560 12,810,553
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2013 2014 2015
Starts(s.f.)
54
Source: JLL Research

56. Market Starts (s.f.) Share
Dallas 4,582,534 35.8%
Seattle-Bellevue 1,756,800 13.7%
Silicon Valley 1,280,406 10.0%
Charlotte 978,309 7.6%
New York 858,710 6.7%
Chicago 763,000 6.0%
Denver 535,000 4.2%
Cincinnati 485,000 3.8%
Phoenix 299,822 2.3%
Washington, DC 272,049 2.1%
San Francisco Peninsula 270,614 2.1%
Long Island 232,917 1.8%
Portland 221,827 1.7%
Fort Lauderdale 143,565 1.1%
New Jersey 130,000 1.0%
United States 12,810,553 100.0%
Toyota’s HQ campus, among other developments, pushes Dallas
to lead construction starts
Dallas Seattle Silicon Valley
Charlotte New York Chicago
Denver Cincinnati Phoenix
Washington, DC San Francisco Peninsula Long Island
Portland Fort Lauderdale New Jersey
55
Source: JLL Research

57. Although spec construction is rising, numerous build-to-suit
developments broke ground in Q1 2015
56
Source: JLL Research
181,000 s.f.
Seattle
1,787,000 s.f.
Dallas
365,000 s.f.
Cincinnati
320,000 s.f.
Philadelphia
66,000 s.f.
Los Angeles
250,000 s.f.
Charlotte

58. Market Starts (s.f.) Share
Trammell Crow 4,173,840 5.0%
Hines 4,126,715 4.9%
KDC 3,127,000 3.7%
Boston Properties 2,680,530 3.2%
Sunbelt Holdings 2,108,000 2.5%
Jay Paul 1,962,886 2.3%
Liberty 1,794,077 2.1%
Related 1,700,000 2.0%
Schnitzer West 1,391,000 1.7%
Irvine Company 1,338,230 1.6%
Touchstone 1,308,044 1.6%
O'Donnell 1,200,000 1.4%
Tishman Speyer 1,156,840 1.4%
Federal Realty 1,057,000 1.3%
All other companies 55,080,145 65.4%
United States 84,204,307 100.0%
Trammell Crow, Hines, KDC and Boston Properties are
developing roughly 16.8 percent of space under construction
Trammell Crow Hines KDC Boston Properties
Sunbelt Holdings Jay Paul Liberty Related
Schnitzer West Irvine Company Touchstone O'Donnell
Tishman Speyer Federal Realty All other companies
57
Source: JLL Research

59. BTS-heavy markets such as Phoenix, Philadelphia and Dallas
lead preleasing rates
26.5%
28.4%
32.7%
38.3%
41.3%
45.2%
47.9%
50.7%
51.1%
52.2%
52.5%
59.4%
64.1%
64.6%
67.3%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
New York
Austin
Denver
Seattle-Bellevue
Los Angeles
Atlanta
Silicon Valley
Washington, DC
Houston
Boston
San Francisco
Dallas
Philadelphia
Chicago
Phoenix
Preleasing rate (%)
58
Source: JLL Research

60. A numer of large developments continue to rise despite no
preleasing as market conditions improve
59
609 Main at Texas (Hines)
Houston
1,057,668 s.f.
390 Madison Avenue (L&L)
New York
858,710 s.f.
One SoHo Square (Rockpoint)
New York
768,000 s.f.
Moffett Gateway (Jay Paul)
Silicon Valley
600,864 s.f.
6 Houston Center (Crescent)
Houston
600,000 s.f.
Source: JLL Research
Energy Center V (Trammell Crow)
Houston
505,000 s.f.
1775 Tysons Boulevard (Lerner)
Northern Virginia
476,913 s.f.
7 Bryant Park (Hines)
New York
473,672 s.f.

61. New construction is asking a significant premium, which will
boost market-level asking rents upon delivery
$44.13
$35.93
$24.65
$23.15
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Under construction Class A Class B Class C
Directaverageaskingrent($p.s.f.)
60
Source: JLL Research
+22.8% +79.0% +90.6%

62. Properties in the Bay Area and Washington, DC are now asking
more than $80 per square foot
$80.00
$80.00
$80.00
$80.00
$82.00
$85.00
$86.25
$94.20
$102.00
$150.00
$159.00
$60 $80 $100 $120 $140 $160 $180
333 Brannan Street (San Francisco)
345 Brannan Street (San Francisco)
601 Massachusetts Avenue NW (Washington, DC)
600 Massachusetts Avenue NW (Washington, DC)
900 G Street NW (Washington, DC)
1000 F Street NW (Washington, DC)
900 16th Street NW (Washington, DC)
College Terrace (Silicon Valley)
Salesforce Tower (San Francisco)
2460 Sand Hill Road (SF Peninsula)
135 Hamilton Avenue (Silicon Valley)
Month 00, 2014 61
Source: JLL Research – data for many high-profile properties, such as 3 World Trade Center and 10 Hudson Yards in New York, is not available

63. With $36.5 billion of office transactions, nearly one-third of full-
year 2014 deal flow closed in first quarter
62
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Officeinvestmentsalevolumes(billionsof$US)
Q1 Q2 Q3 Q4
Source: JLL Research

64. Strong deal flow in Boston, NY and expanding pipeline in
Seattle, Chicago driving 43.1 percent growth in primary markets
63
11
7
14
11
7
9
13
6
17
12
19
10
8
37
18
7
26
18
14
11
9
8 8
4
0
5
10
15
20
25
30
35
40
Boston New York San Francisco Seattle-Bellevue Chicago Los Angeles Washington, DC Houston
Numberofofficeinvestmentsales
2013 Q1 2014 Q1 2015 Q1
Source: JLL Research

65. … with 6 of the 8 primary markets exceeding $1.0 billion
64
Resurgent New York saw first quarter deal flow triple over comparable 2014 levels
$6,320
$1,648 $1,538
$1,218 $1,118 $1,092
$755 $745 $734 $685 $639
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Totalsalevolumes(millionsof$US,Q12015)
Source: JLL Research Primary markets Secondary markets

66. Average deal size is up 73.0 percent in primary markets
65
As value appreciation continues, all primary markets seeing deal sizes increase with the exception of Boston—a trend driven by
expansion of value add suburban transactions
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
New York Chicago Houston Washington,
DC
San Francisco /
Silicon Valley
Seattle-
Bellevue
Los Angeles Boston
Averagedealsize(millionsof$US)
2014 Q1 2015 Q1
Source: JLL Research

67. … While secondary market deals two-fifths the size
66
Other than strong Miami market, secondary market deal sizes growing at slower pace than primary counterparts
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
Averagedealsize(millionsof$US)
Source: JLL Research Primary markets Secondary markets

68. Primary markets dominating CBD investment activity; non-CBD
volumes led by secondary markets
67
Most active CBD markets Most active Non-CBD markets
Of CBD volumes in Primary markets Of Non-CBD volumes in Secondary markets
Source: JLL Research
$6,466
$1,631
$970
$723 $635
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Q1officeinvestmentsalevolume(millionsof$US)
$745 $621 $505
$299 $233

69. 14.1%
62.2%
23.7%
Trophy Class A Class B
Resurgence in Trophy activity with one-third of comparable full-
year 2014 sales in first quarter
68
28.0%
45.2%
26.8%
Trophy Class A Class B
Source: JLL Research

70. Strong New York activity fueling U.S. Trophy deal flow
69
Foreign buyers Ivanhoe Cambridge, Norges demonstrating strong appetite for NY product
$1,467
$2,460 $2,601
$2,175
$3,009
$1,247
$1,580
$3,190
$5,716
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1
Trophyinvestmentsalevolumes(millionsof$US)
Source: JLL Research
79.2% increase
Q-o-Q
101.9% increase
Q-o-Q

71. As East Coast CBD investment increases, Boston and West Coast
investment strategies diversifying further into the Suburbs
70
100%
81%
60%
66% 65%
50%
55%
25%
100% 99%
93% 90%
59% 55%
13% 12%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
New York Chicago Houston Washington, DC Boston Seattle-Bellevue San Francisco Los Angeles
CBDinvestmentsales(asa%oftotalvolumes)
2014 2015 Q1
Source: JLL Research
Westside
Palo Alto /
Santa Clara
Lake Union /
Belltown
Cambridge /
495 Mass
Pike

72. 56.7%
43.3%
Primary markets Secondary markets
Secondary market activity continues to rise on a square footage
basis, accounting for 57.8 percent of 2015 activity year-to-date
71
Source: JLL Research
2013
47.1%
52.9%
Primary markets Secondary markets
2014
42.2%
57.8%
Primary markets Secondary markets
2015
YTD

73. More than 30.0 million square feet of non-CBD deal flow drives
secondary market volumes in the first quarter
72
44%
40%
50%
57%
43%
69%
52%
45%
56%
27%
28%
27%
24%
27%
15%
17%
24%
16%
13% 17%
10% 7%
14%
9%
10% 14% 8%
16% 15% 13% 13% 17%
7%
21% 17% 21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1
Primary CBD Primary Non-CBD Secondary CBD Secondary Non-CBD
Source: JLL Research

74. While stable in the primary markets, composition of non-CBD
investments diversifying into Class B in secondary markets
73
Source: JLL Research
76% 76% 72%
24% 24% 28%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 Q1
Class A Class B
75% 76%
55%
25% 24%
45%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 Q1
Class A Class B
Primary, non-CBD activity Secondary, non-CBD activity

75. With nearly $11.0b of deal flow, these submarkets drove 62.8 and
36.0 percent of primary and secondary activity, respectively
74
Source: JLL Research
West Loop (Chicago)
$1.0 billion
Portland CBD
$0.2 billion
SE Suburban (Denver)
$0.3 billion
LoDo (Denver)
$0.3 billion
Buckhead (Atlanta)
$0.4 billion
RTP/RDU (Raleigh)
$0.7 billion
Airport Area (Phoenix)
$0.2 billion
Bellevue CBD
$0.5 billion
Westside (LA)
$0.5 billion
Capitol Hill (DC)
$0.5 billion
Times Square $3.2b
Plaza District $1.2b
Water Street Corridor $0.5b
Grand Central $0.5b
Houston CBD
$0.6 billion
Primary markets Secondary markets

76. Outlook

77. 76
Source: JLL Research
2015 outlook strongest in nearly a decade
Markets across the U.S. expect to see continued employment growth within office-using sectors
and corporate occupiers remain certain that expansionary activity is now necessary. As a result,
leasing activity is expected to increase in the coming quarter, likely nearing 60 million square feet
on average.
Large relocations and expansions, once occupied will likely push absorption above 2014’s total of 55
million square feet. Additionally, traditional industries are increasingly committing to expansion space
unlike in previous years, and that growth will impact a wider array of geographies.
As occupancy gains mount, overall vacancy will likely dip to 15.0 percent by year-end, but this
accelerating decline could be tempered if projects currently under construction don’t secure tenants
before delivery.
Rental rate growth will continue to accelerate, especially as Trophy and Class A spaces disappear in
advance of new supply coming online. Landlords anticipating significant growth in demand are
pushing rates ahead of other fundamentals, but economic expansion so far is padding the impact.
1.
2.
3.
4.

78. If cracks exist in the growing economy, they
aren’t yet visible in the leasing, sales or
development markets. In fact, growth, both
economic, as well as real estate-centric, is
shifting from tech-heavy markets and spilling
over into secondary and tertiary markets,
giving legs to a longer-term economic
expansion despite a slowdown and correction
in the energy markets.

79. COPYRIGHT © JONES LANG LASALLE IP, INC. 2015
John Sikaitis
Managing Director – Office and Local Markets Research
+1 202 719 5839
John.Sikaitis@am.jll.com
Julia Georgules
Associate Director – Office Research
+1 415 354 6908
Julia.Georgules@am.jll.com
Sean Coghlan
Manager – Capital Markets Research
+1 215 988 5556
Sean.Coghlan@am.jll.com
Phil Ryan
Research Analyst – Office and Economy Research
+1 202 719 6295
Phil.Ryan@am.jll.com
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