Colliers north american office highlights 3 q 2010

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Colliers north american office highlights 3 q 2010

  1. 1. HIGHLIGHTS NORTH AMERICA www.colliers.com Q3 2010 | Office Ross J. Moore Chief Economist | USA Without raising expectations to unrealistic levels, this quarter’s results suggest the office market has indeed hit bottom and has begun what will almost certainly be a very long and slow road to recovery. Although the economy continues to languish and job growth remains disappointing, third quarter occupancies improved for the second three month period and the national vacancy rate posted a slight decline. Canadian markets also registered modest growth, helping to round a good quarter for North American office markets. With both the U.S. and Canadian economies posting reasonable growth and the addition of more private sector jobs, leasing markets are expected to continue improving, albeit only in small increments with no sudden surge anticipated. Third quarter data reaffirms our view that the U.S. office market has entered the first phase of what will likely be a multi-stage recovery. Most encouraging is the nine-month-long gain in private sector employment. Furthermore, office-using employment was reasonably strong during the July-September period, suggesting office leasing activity is unlikely to fade. The uncertainty surrounding the midterm elections and the possible extension of the Bush administration tax cuts may dampen office leasing demand for the fourth quarter, but that should only be a temporary phenomenon. Widespread increases in rents are unlikely anytime soon, but occupiers in select markets would be wise to lock in today’s lease rates before lower availabilities give land- lords the upper hand. U.S. office vacancy rate down marginally. The U.S. national office vacancy rate moved slightly lower during the third quarter, moving two basis points lower (100 basis points equals one percent). This represented the Two quarters of positive absorption shows the U.S. office market is now stabilizing after a two year period of persistent weakness. market indicators Relative to prior period u.s. Office market Summary Statistics, Q3 2010 Office Markets Show First Signs of Beginning a Long Slow Road to Recovery Q3 2010 Q4 2010* VACANCY NET ABSORPTION construction rental rate *Projected U.S. Office MARKET Q3 2009 – Q3 2010 MillionSquareFeet Vacancy(%) -20 -10 0 10 20 Q3 2010Q2 2010Q1 2010Q4 2009Q3 2009 Absorption Completions Vacancy 13 14 15 16 17% Vacancy Rate: 16.28% Change from Q2 2010: –0.02 Absorption: 6.6 Million Square Feet New Construction: 5.4 Million Square Feet Under Construction: 20.6 Million Square Feet Asking Rents Per Square Foot (Change from Q2 2010): Downtown Class A: $39.06 (1.4%) Suburban Class A: $26.22 (–0.1%) continued on page 7
  2. 2. p. 2 | Colliers International highlights | Q3 2010 | office | north America UNITED STATES | DOWNTOWN OFFICE | ALL INVENTORY MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 NEW SUPPLY Q3 2010 (SF) NEW SUPPLY YTD 2010 (SF) UNDER CONSTRUCTION (SF) VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) Atlanta, GA 56,927,000 0 753,000 0 15.5 15.2 177,000 198,000 Bakersfield, CA 2,966,000 0 0 0 6.9 8.8 (22,000) (11,000) Baltimore, MD 22,117,000 0 28,000 0 16.6 16.8 (32,000) (90,000) Boise, ID 3,470,000 0 0 0 10.6 10.7 (3,000) 46,000 Boston, MA 59,292,000 760,000 760,000 674,000 15.5 16.3 210,000 (940,000) Charleston, SC 2,152,000 61,000 61,000 0 8.5 11.0 (2,000) (2,000) Charlotte, NC 21,504,000 0 2,050,000 0 15.3 13.6 328,000 461,000 Chicago, IL 131,589,000 0 679,000 0 17.1 17.0 127,000 (89,000) Cincinnati, OH 11,920,000 0 0 805,000 18.3 17.8 51,000 (56,000) Cleveland 34,574,000 0 0 0 16.8 18.5 31,000 86,000 Columbia, SC 4,586,000 0 190,000 0 27.1 25.2 87,000 1,000 Columbus, OH 13,318,000 0 0 0 15.3 15.6 (37,000) 39,000 Dallas/Fort Worth, TX 36,666,000 0 0 0 26.1 25.5 204,000 (389,000) Denver, CO 25,704,000 0 0 0 14.9 14.4 346,000 (31,000) Detroit, MI 30,148,000 0 0 0 17.7 17.2 68,000 (499,000) Fresno, CA 3,263,000 50,000 58,000 0 9.4 10.9 (5,000) (7,000) Ft. Lauderdale/Broward Co., FL 9,004,000 0 13,000 0 14.1 13.4 62,000 (33,000) Greenville, SC 3,182,000 0 53,000 0 18.7 18.5 (11,000) (53,000) Hartford, CT 9,707,000 0 0 180,000 20.9 22.5 (41,000) (243,000) Honolulu, HI 8,074,000 0 0 0 11.8 11.7 0 (85,000) Houston, TX 36,969,000 0 0 1,817,000 14.1 14.9 (210,000) (554,000) Jacksonville, FL 15,984,000 0 0 0 12.9 14.3 (8,000) 45,000 Kansas City, KS 26,535,000 0 0 0 14.9 15.4 (68,000) (123,000) Las Vegas, NV 3,601,000 0 0 0 14.3 15.6 (53,000) (164,000) Little Rock, AR 6,513,000 (71,000) (49,000) 0 13.2 10.9 90,000 124,000 Los Angeles, CA 32,039,000 0 0 0 16.2 16.4 (64,000) (527,000) Louisville, KY 17,065,000 0 0 0 8.9 9.3 0 (24,000) Memphis, TN 7,996,000 0 0 0 14.6 14.7 (14,000) (45,000) Miami-Dade County, FL 17,329,000 0 1,335,000 606,000 21.9 21.7 34,000 144,000 Nashville, TN 3,830,000 0 0 0 24.4 16.3 (5,000) 67,000 New York, NY – Downtown Manhattan 87,333,000 0 2,000,000 2,600,000 16.4 16.4 (2,000) (3,810,000) New York, NY – Midtown Manhattan 200,280,000 0 1,100,000 0 13.3 12.7 1,243,000 4,358,000 New York, NY – Midtown S. Manhattan 71,893,000 0 317,000 0 11.7 11.1 460,000 300,000 Oakland, CA 16,892,000 0 0 62,000 12.6 12.8 (37,000) (1,000) Orlando, FL 12,208,000 284,000 284,000 105,000 14.6 15.4 (142,000) 192,000 Philadelphia, PA 41,599,000 0 0 0 12.6 12.9 (134,000) (296,000) Phoenix, AZ 19,957,000 0 769,000 0 19.4 21.6 (113,000) (130,000) Pleasanton/Walnut Creek, CA 10,722,000 0 0 0 19.2 19.1 13,000 (44,000) Portland, OR 33,342,000 0 369,000 62,000 8.7 8.9 335,000 226,000 Raleigh/Durham/Chapel Hill, NC 10,787,000 0 0 165,000 5.7 5.1 102,000 201,000 Reno, NV 1,327,000 0 0 0 28.8 27.5 18,000 (59,000) Sacramento, CA 18,328,000 18,000 18,000 0 8.9 8.9 11,000 (91,000) San Diego County, CA 10,207,000 0 0 0 16.8 17.2 (45,000) (24,000) San Francisco, CA 83,224,000 0 110,000 277,000 15.2 14.9 192,000 (34,000) San Jose/Silicon Valley, CA 7,593,000 0 0 0 25.3 25.0 (29,000) (156,000) Seattle/Puget Sound, WA 59,688,000 172,000 1,332,000 847,000 15.9 15.6 189,000 373,000 St. Louis, MO 26,457,000 0 0 0 14.8 14.7 (225,000) (109,000) Stamford, CT 18,449,000 0 0 400,000 17.7 17.8 (23,000) (697,000) Stockton/San Joaquin County, CA 8,500,000 0 0 0 18.1 17.8 58,000 116,000 Tampa, FL 9,356,000 0 14,000 0 14.6 13.9 20,000 135,000 Washington, DC 139,749,000 365,000 2,646,000 1,550,000 11.7 11.6 882,000 2,808,000 West Palm Beach/Palm Beach Co., FL 9,830,000 0 0 0 18.8 19.8 (95,000) (54,000) White Plains, NY 8,234,000 0 0 0 11.5 11.2 31,000 240,000 U.S. TOTAL/AVERAGE 1,563,979,000 1,639,000 14,891,000 10,151,000 14.94 14.86 3,948,000 690,000
  3. 3. highlights | Q3 2010 | office | north America Colliers International | p. 3 united states | downtown office | class a MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 VACANCY RATE (%) june 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) AVERAGE ANNUAL QUOTED RENT (USD PSF) SEP. 30, 2010 QUARTERLY CHANGE IN RENT (%) ANNUAL CHANGE IN RENT (%) Atlanta, GA 31,486,000 20.2 19.5 216,000 398,000 21.40 0.4 0.7 Bakersfield, CA 670,000 6.0 6.5 (3,000) 13,000 17.40 0.0 0.0 Baltimore, MD 9,799,000 18.1 18.5 (35,000) (65,000) 23.70 -2.1 -5.3 Boise, ID 2,038,000 5.2 4.6 12,000 27,000 18.00 0.0 -11.1 Boston, MA 40,536,000 13.8 15.4 25,000 (498,000) 45.60 0.1 -5.0 Charleston, SC 1,059,000 7.4 8.7 (14,000) (14,000) 24.20 0.0 -14.9 Charlotte, NC 15,507,000 18.2 15.6 389,000 528,000 25.60 -3.5 -11.5 Chicago, IL 74,484,000 18.0 17.8 173,000 263,000 32.50 1.6 -1.5 Cincinnati, OH 5,996,000 18.9 18.7 10,000 (31,000) 21.90 0.1 -6.8 Cleveland 9,728,000 11.4 11.7 (11,000) 8,000 20.70 0.4 -0.3 Columbia, SC 2,250,000 14.0 13.4 14,000 (25,000) 19.70 0.0 -0.5 Columbus, OH 5,600,000 15.0 9.6 36,000 106,000 19.40 -5.3 -15.9 Dallas/Fort Worth, TX 22,612,000 23.3 23.7 (72,000) (321,000) 25.20 -0.2 -1.2 Denver, CO 18,085,000 15.2 13.2 354,000 (28,000) 26.30 -0.9 1.0 Detroit, MI 11,563,000 18.0 17.5 54,000 (284,000) 22.70 0.4 0.9 Fresno, CA 1,039,000 8.7 8.7 0 11,000 24.60 0.0 -2.4 Ft. Lauderdale/Broward Co., FL 4,479,000 20.9 19.8 49,000 (23,000) 32.40 -1.4 1.1 Greenville, SC 1,897,000 9.8 8.0 15,000 11,000 19.50 -4.7 -9.5 Hartford, CT 6,369,000 20.2 22.1 (114,000) (279,000) 23.20 -0.3 -1.3 Honolulu, HI 4,709,000 12.8 11.8 36,000 (29,000) 35.60 -0.7 -0.6 Houston, TX 26,727,000 9.3 10.1 (194,000) (436,000) 35.20 -2.0 -6.1 Jacksonville, FL 6,659,000 16.0 16.3 (20,000) (25,000) 20.20 0.7 -1.7 Kansas City, KS 7,933,000 22.4 22.4 1,000 54,000 20.90 -0.2 4.0 Las Vegas, NV 700,000 11.1 12.4 (18,000) (44,000) 34.90 0.0 -11.1 Little Rock, AR 2,636,000 12.6 3.3 3,000 (28,000) 16.50 0.0 0.9 Los Angeles, CA 15,084,000 15.1 14.8 42,000 (409,000) 39.00 0.3 -0.9 Louisville, KY 4,206,000 7.6 8.5 (14,000) (19,000) 22.80 2.7 8.2 Memphis, TN 1,898,000 23.1 24.3 (22,000) (24,000) 16.80 -1.5 -0.2 Miami-Dade County, FL 9,211,000 24.8 24.6 19,000 97,000 41.80 -0.5 -3.8 Nashville, TN 7,580,000 23.5 23.5 (11,000) (1,000) 22.70 -12.7 1.7 New York, NY – Downtown Manhattan 58,670,000 20.0 20.1 212,000 1,777,000 39.80 -0.2 -12.9 New York, NY – Midtown Manhattan 161,280,000 15.3 14.6 94,000 3,138,000 63.20 0.7 -7.6 New York, NY – Midtown S. Manhattan 29,954,000 14.0 12.8 263,000 1,626,000 42.50 0.1 -14.2 Oakland, CA 10,198,000 10.3 10.8 (46,000) 90,000 31.10 0.4 -4.4 Orlando, FL 5,583,000 17.0 17.9 (53,000) (38,000) 24.10 -0.9 -7.2 Philadelphia, PA 31,537,000 11.4 12.1 (209,000) (336,000) 26.00 -0.3 1.0 Phoenix, AZ 9,694,000 21.4 22.4 (95,000) (16,000) 28.30 11.1 5.9 Pleasanton/Walnut Creek, CA 6,975,000 21.5 21.3 13,000 (33,000) 26.20 -0.5 -3.1 Portland, OR 13,001,000 7.9 7.6 265,000 146,000 24.40 0.7 -2.9 Raleigh/Durham/Chapel Hill, NC 3,870,000 7.5 4.9 (22,000) 32,000 17.20 -24.7 -22.8 Reno, NV 548,000 23.5 19.3 23,000 (10,000) 23.50 0.0 5.9 Sacramento, CA 8,910,000 10.1 9.4 54,000 (6,000) 32.50 -1.5 -2.2 San Diego County, CA 6,977,000 16.0 15.9 3,000 33,000 29.30 -2.0 -7.6 San Francisco, CA 52,123,000 15.2 15.1 70,000 (161,000) 36.20 8.7 -2.8 San Jose/Silicon Valley, CA 3,365,000 35.1 35.0 (35,000) (119,000) 34.70 -2.0 -8.3 Seattle/Puget Sound, WA 19,687,000 32.4 30.5 320,000 550,000 28.40 2.9 9.2 St. Louis, MO 11,941,000 15.5 15.5 (206,000) (53,000) 19.10 -1.5 0.3 Stamford, CT 12,450,000 – – (21,000) (613,000) 40.70 9.9 – Stockton/San Joaquin County, CA 2,773,000 27.0 26.5 65,000 210,000 18.40 -10.9 53.0 Tampa, FL 4,809,000 18.0 16.9 18,000 104,000 22.80 0.2 -3.0 Washington, DC 87,848,000 14.6 14.3 864,000 3,134,000 52.30 2.1 5.5 West Palm Beach/Palm Beach Co., FL 3,323,000 22.9 25.0 (68,000) (62,000) 36.90 -1.7 -5.2 White Plains, NY 5,402,000 14.2 13.3 42,000 267,000 29.10 -0.1 – U.S. TOTAL/AVERAGE 903,463,000 16.19 15.87 2,471,000 8,594,000 39.10 1.39 -2.56 28.20 -0.43 -2.57 weighted equal
  4. 4. p. 4 | Colliers International highlights | Q3 2010 | office | north America UNITED STATES | SUBURBAN OFFICE | ALL INVENTORY MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 NEW SUPPLY Q3 2010 (SF) NEW SUPPLY YTD 2010 (SF) UNDER CONSTRUCTION (SF) VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) Atlanta, GA 186,627,000 21,000 1,093,000 291,000 18.2 18.3 (212,000) (180,000) Bakersfield, CA 5,968,000 0 0 0 10.0 10.6 (35,000) 60,000 Baltimore, MD 102,760,000 737,000 1,295,000 1,355,000 12.9 13.2 290,000 874,000 Boise, ID 10,784,000 134,000 0 30,000 20.4 20.8 (66,000) (141,000) Boston, MA 104,373,000 356,000 356,000 59,000 19.8 18.9 1,270,000 1,495,000 Charleston, SC 8,500,000 3,000 566,000 0 20.4 20.6 (14,000) 564,000 Charlotte, NC 70,045,000 46,000 100,000 342,000 15.3 14.6 299,000 306,000 Chicago, IL 104,819,000 0 204,000 110,000 23.6 24.2 (506,000) (538,000) Cincinnati, OH 25,119,000 70,000 287,000 294,000 24.7 25.2 (95,000) (297,000) Cleveland 91,335,000 16,000 83,000 385,000 10.4 10.3 31,000 86,000 Columbia, SC 4,782,000 0 0 0 21.3 21.1 10,000 (84,000) Columbus, OH 35,152,000 0 0 90,000 17.3 18.5 (143,000) 29,000 Dallas/Fort Worth, TX 265,026,000 0 1,584,000 186,000 17.8 17.3 1,356,000 775,000 Denver, CO 129,389,000 298,000 28,000 28,000 15.0 15.6 (343,000) 185,000 Detroit, MI 99,957,000 27,000 43,000 705,000 20.9 21.4 (151,000) (205,000) Fairfield, CA 3,607,000 0 0 0 26.4 26.6 (9,000) (93,000) Fairfield County, CT 40,843,000 0 0 33,000 10.2 10.5 (29,000) (167,000) Fresno, CA 17,782,000 15,000 147,000 0 15.7 15.1 106,000 92,000 Ft. Lauderdale/Broward Co., FL 44,281,000 0 183,000 0 14.8 14.5 145,000 337,000 Greenville, SC 4,335,000 0 0 0 21.3 23.3 (141,000) (89,000) Hartford, CT 12,352,000 0 0 14,000 15.3 15.0 47,000 (15,000) Honolulu, HI 7,690,000 0 0 0 - - (32,000) (112,000) Houston, TX 157,637,000 0 34,000 400,000 17.2 17.1 185,000 242,000 Jacksonville, FL 58,655,000 10,000 10,000 0 11.6 15.5 (101,000) 289,000 Kansas City, KS 78,166,000 16,000 21,000 99,000 12.9 13.1 (143,000) (151,000) Las Vegas, NV 38,394,000 21,000 109,000 85,000 25.7 25.1 172,000 (230,000) Little Rock, AR 7,432,000 (1,000) (10,000) 23,000 10.3 10.6 (19,000) (199,000) Los Angeles – Inland Empire, CA 21,938,000 0 41,000 0 24.7 25.2 (91,000) (126,000) Los Angeles, CA 165,877,000 0 518,000 781,000 17.7 18.0 (498,000) (2,229,000) Louisville, KY 33,604,000 0 243,000 4,000 17.5 13.5 (59,000) (212,000) Memphis, TN 27,978,000 0 0 12,000 13.0 13.0 (3,000) 84,000 Miami-Dade County, FL 64,821,000 174,000 616,000 380,000 15.0 14.7 340,000 589,000 Nashville, TN 23,423,000 55,000 528,000 102,000 11.4 11.1 179,000 511,000 New Jersey – Central 65,911,000 0 46,000 343,000 22.3 22.1 92,000 (536,000) New Jersey – Northern 95,461,000 0 0 58,000 17.9 18.5 (593,000) (476,000) Oakland, CA 15,877,000 0 0 0 17.1 17.2 24,000 34,000 Orange County, CA 77,351,000 0 0 0 23.1 22.4 301,000 (963,000) Orlando, FL 54,416,000 0 55,000 670,000 17.3 17.4 (41,000) 27,000 Philadelphia, PA 109,291,000 558,000 713,000 563,000 16.3 16.3 390,000 616,000 Phoenix, AZ 109,058,000 86,000 553,000 508,000 23.3 22.9 96,000 94,000 Pleasanton/Walnut Creek, CA 32,108,000 0 0 0 18.8 20.7 (617,000) (561,000) Portland, OR 44,378,000 0 252,000 0 13.1 12.9 (215,000) (86,000) Raleigh/Durham/Chapel Hill, NC 71,022,000 118,000 356,000 123,000 15.0 14.4 444,000 332,000 Reno, NV 5,462,000 0 0 0 20.9 20.7 6,000 (3,000) Sacramento, CA 72,045,000 134,000 321,000 215,000 18.6 18.8 (24,000) (204,000) San Diego County, CA 67,513,000 0 290,000 0 17.9 17.1 381,000 778,000 San Francisco Peninsula, CA 33,518,000 0 25,000 0 18.4 17.7 231,000 304,000 San Jose/Silicon Valley, CA 53,499,000 0 343,000 917,000 19.1 20.4 (953,000) (651,000) Seattle/Puget Sound, WA 19,687,000 0 232,000 199,000 15.3 15.2 35,000 (52,000) St. Louis, MO 97,094,000 489,000 555,000 568,000 10.8 10.7 556,000 717,000 Tampa, FL 71,668,000 0 0 0 16.1 15.3 310,000 (266,000) Washington, DC 313,619,000 389,000 2,008,000 218,000 14.2 14.0 677,000 1,453,000 West Palm Beach/Palm Beach Co., FL 28,834,000 32,000 83,000 272,000 21.6 21.6 1,000 36,000 Westchester County, NY 37,952,000 0 0 0 10.4 11.0 (192,000) 140,000 U.S. TOTAL/AVERAGE 3,529,214,000 3,804,000 13,911,000 10,463,000 16.90 16.91 2,650,000 2,186,000
  5. 5. highlights | Q3 2010 | office | north America Colliers International | p. 5 united states | SUBURBAN office | class a MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 VACANCY RATE (%) june 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) AVERAGE ANNUAL QUOTED RENT (USd PSF) SEP. 30, 2010 QUARTERLY CHANGE IN RENT (%) ANNUAL CHANGE IN RENT (%) Atlanta, GA 81,026,000 19.0 18.7 233,000 256,000 21.60 -0.8 -2.3 Bakersfield, CA 2,691,000 5.7 6.9 (34,000) 31,000 24.00 0.0 0.0 Baltimore, MD 32,226,000 18.6 17.2 99,000 540,000 26.00 -1.0 -1.2 Boise, ID 4,564,000 22.6 22.4 (22,000) (23,000) 18.00 0.0 -1.4 Boston, MA 44,256,000 19.0 17.5 821,000 1,460,000 26.20 -0.8 -3.6 Charleston, SC 4,333,000 15.8 14.3 62,000 496,000 23.50 -2.9 -7.9 Charlotte, NC 18,037,000 18.9 17.9 150,000 275,000 20.40 0.0 4.4 Chicago, IL 57,646,000 25.1 25.6 (301,000) (327,000) 27.50 0.0 -0.8 Cincinnati, OH 13,398,000 24.4 24.8 (53,000) (253,000) 20.40 -0.3 -3.5 Cleveland 12,691,000 12.2 12.3 (68,000) (119,000) 21.70 -1.2 0.8 Columbia, SC 996,000 20.9 20.9 0 17,000 17.00 0.0 -5.5 Columbus, OH 11,565,000 11.8 12.9 137,000 298,000 18.20 -2.8 -5.8 Dallas/Fort Worth, TX 96,039,000 19.3 18.5 736,000 266,000 24.80 0.0 -2.0 Denver, CO 41,780,000 19.9 19.4 391,000 109,000 20.80 0.0 -1.2 Detroit, MI 25,789,000 17.5 18.0 (152,000) (153,000) 22.10 -1.2 -4.0 Fairfield, CA 2,091,000 31.3 31.1 5,000 (24,000) 26.00 -4.0 -0.1 Fairfield County, CT 16,981,000 10.5 10.6 (5,000) (8,000) 34.40 11.2 - Fresno, CA 3,810,000 24.2 21.9 89,000 159,000 25.20 0.0 -2.3 Ft. Lauderdale/Broward Co., FL 10,380,000 20.2 20.0 23,000 27,000 28.10 -0.2 0.3 Greenville, SC 1,772,000 21.7 20.7 (51,000) (57,000) 17.60 -1.1 -5.7 Hartford, CT 7,466,000 16.9 15.8 83,000 (23,000) 20.40 0.0 -2.4 Houston, TX 68,523,000 19.6 19.3 222,000 72,000 27.30 -0.2 0.0 Jacksonville, FL 9,740,000 14.2 13.7 56,000 203,000 17.80 -12.7 -11.1 Kansas City, KS 15,459,000 18.0 15.9 22,000 17,000 21.40 -0.3 1.9 Las Vegas, NV 4,921,000 36.6 36.3 (57,000) (58,000) 32.80 -0.1 -5.4 Little Rock, AR 2,689,000 16.1 12.2 98,000 (98,000) 18.50 0.0 1.5 Los Angeles – Inland Empire, CA 4,953,000 33.5 34.1 (29,000) 113,000 25.20 -3.2 -8.7 Los Angeles, CA 100,895,000 18.9 18.4 (566,000) (1,856,000) 34.30 -1.7 -3.1 Louisville, KY 7,247,000 21.6 18.7 152,000 109,000 20.20 0.9 14.6 Memphis, TN 7,132,000 8.7 9.4 (55,000) 33,000 21.60 1.6 -0.4 Miami-Dade County, FL 15,468,000 22.1 21.7 205,000 342,000 32.50 -1.1 -1.2 Nashville, TN 12,804,000 9.2 8.9 179,000 511,000 20.00 -10.4 -8.5 New Jersey – Central 46,649,000 24.5 24.4 46,000 (715,000) 23.60 -1.3 -9.5 New Jersey – Northern 63,112,000 17.8 18.2 (237,000) (312,000) 24.30 -0.3 -13.6 Oakland, CA 3,582,000 18.1 20.7 (45,000) (160,000) 24.50 -13.9 -4.2 Orange County, CA 33,319,000 24.8 24.0 259,000 (385,000) 26.60 -2.6 -13.3 Orlando, FL 16,653,000 20.0 20.6 (76,000) (351,000) 22.80 0.0 -1.5 Philadelphia, PA 67,837,000 15.7 16.3 44,000 142,000 24.30 0.0 -1.2 Phoenix, AZ 31,366,000 27.4 26.7 225,000 331,000 24.40 -0.9 -7.1 Pleasanton/Walnut Creek, CA 16,264,000 14.2 14.9 (115,000) 10,000 22.60 -10.5 -7.8 Portland, OR 12,622,000 12.3 12.2 (102,000) (236,000) 23.20 0.0 18.8 Raleigh/Durham/Chapel Hill, NC 25,584,000 18.2 17.3 276,000 389,000 21.50 0.2 -2.3 Reno, NV 2,935,000 19.8 19.8 (2,000) 60,000 19.70 -1.8 -8.9 Sacramento, CA 16,200,000 25.6 25.6 60,000 (42,000) 24.20 -1.9 -4.7 San Diego County, CA 24,240,000 20.9 19.1 406,000 861,000 31.90 -2.2 -9.2 San Francisco Peninsula, CA 21,785,000 17.9 16.8 245,000 350,000 31.20 -2.3 -10.3 San Jose/Silicon Valley, CA 25,657,000 21.9 24.0 (679,000) 60,000 35.60 -0.7 -3.6 Seattle/Puget Sound, WA 6,288,000 22.8 21.6 80,000 (110,000) 23.10 -13.0 -15.7 St. Louis, MO 25,192,000 11.5 10.7 402,000 252,000 23.30 -0.3 -6.8 Tampa, FL 23,423,000 17.9 17.3 143,000 (6,000) 23.60 -1.0 -4.6 Washington, DC 161,792,000 16.2 16.0 464,000 1,372,000 30.90 0.4 2.5 West Palm Beach/Palm Beach Co., FL 9,175,000 3.1 20.5 21,000 78,000 30.40 -0.9 -2.3 Westchester County, NY 18,332,000 13.1 14.5 (157,000) 162,000 27.80 1.2 - U.S. TOTAL/AVERAGE 1,391,374,000 18.77 18.60 3,626,000 4,089,000 26.20 -0.08 -2.78 24.40 -1.57 -2.68 weighted equal
  6. 6. p. 6 | Colliers International highlights | Q3 2010 | office | north America CANADA | DOWNTOWN OFFICE | ALL INVENTORY MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 NEW SUPPLY Q3 2010 (SF) NEW SUPPLY YTD 2010 (SF) UNDER CONSTRUCTION (SF) VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) Calgary, AB 37,775,000 0 2,270,000 2,982,000 15.2 13.8 553,000 1,196,000 Edmonton, AB 10,632,000 0 0 630,000 7.2 7.5 (29,000) (70,000) Halifax, NS 4,913,000 0 22,000 10,000 5.9 6.4 (26,000) (90,000) Kitchener-Waterloo, ON 2,371,000 153,000 165,000 0 15.6 19.8 30,000 117,000 Montreal, QC 49,429,000 0 0 0 6.7 7.4 (326,000) (155,000) Ottawa, ON 14,992,000 0 0 550,000 4.2 4.0 49,000 5,000 Regina, SK 3,762,000 0 0 190,000 1.5 1.3 6,000 (3,000) Saskatoon, SK 2,052,000 29,000 29,000 0 4.6 5.8 (27,000) 4,000 Toronto, ON 88,721,000 0 662,000 1,842,000 5.4 5.5 781,000 913,000 Vancouver, BC 24,466,000 0 0 127,000 3.8 4.4 (134,000) 67,000 CANADA TOTAL/AVERAGE 239,113,000 182,000 3,149,000 6,331,000 7.12 7.16 876,000 1,984,000 CANADA | downtown office | class a MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) AVERAGE ANNUAL QUOTED RENT (CAD PSF) SEP. 30, 2010 QUARTERLY CHANGE IN RENT (%) ANNUAL CHANGE IN RENT (%) Calgary, AB 24,783,000 14.4 12.4 510,000 1,497,000 39.50 0.0 -13.2 Edmonton, AB 8,254,000 6.7 7.0 (28,000) (101,000) 39.90 -2.8 -14.3 Halifax, NS 1,916,000 5.4 5.2 1,000 (37,000) 31.60 0.0 0.3 Kitchener-Waterloo, ON 795,000 9.5 15.8 89,000 152,000 27.50 3.1 3.9 Montreal, QC 23,076,000 7.0 7.6 (129,000) (100,000) 32.00 0.0 4.2 Ottawa, ON 9,001,000 4.5 3.9 62,000 5,000 48.30 -0.4 1.7 Regina, SK 1,026,000 1.0 1.0 1,000 (10,000) 34.80 0.0 0.0 Saskatoon, SK 492,000 7.5 0.2 0 34,000 31.50 0.0 5.0 Toronto, ON 41,592,000 7.1 6.8 613,000 650,000 49.70 -7.2 -5.7 Vancouver, BC 10,034,000 2.5 2.6 (12,000) 60,000 54.50 4.8 19.8 CANADA TOTAL/AVERAGE 120,969,000 7.91 7.50 1,106,000 2,150,000 43.20 -2.65 -3.43 38.90 -0.48 -0.50 CANADA | SUBURBAN OFFICE | ALL INVENTORY MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 NEW SUPPLY Q3 2010 (SF) NEW SUPPLY YTD 2010 (SF) UNDER CONSTRUCTION (SF) VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) Calgary, AB 23,302,000 0 186,000 404,000 11.7 11.5 48,000 463,000 Edmonton, AB 8,753,000 0 0 40,000 15.3 16.3 (55,000) (203,000) Halifax, NS 6,173,000 30,000 138,000 110,000 13.9 10.8 200,000 319,000 Kitchener-Waterloo, ON 3,267,000 16,000 16,000 256,000 12.7 12.6 19,000 101,000 Montreal, QC 23,621,000 191,000 191,000 112,000 8.9 9.7 2,000 37,000 Ottawa, ON 20,559,000 24,000 24,000 182,000 7.8 7.1 977,000 1,247,000 Regina, SK 659,000 12,000 12,000 0 0.6 0.6 0 (3,000) Toronto, ON 97,614,000 64,000 983,000 698,000 7.6 7.5 619,000 1,177,000 Vancouver, BC 28,641,000 (78,000) 395,000 881,000 9.9 10.2 (47,000) 39,000 CANADA TOTAL/AVERAGE 212,589,000 259,000 1,946,000 2,684,000 9.10 9.02 1,765,000 3,177,000 CANADA | SUBURBAN office | class a MARKET EXISTING INVENTORY (SF) SEP. 30, 2010 VACANCY RATE (%) JUNE 30, 2010 VACANCY RATE (%) SEP. 30, 2010 ABSORPTION Q3 2010 (SF) ABSORPTION YTD 2010 (SF) AVERAGE ANNUAL QUOTED RENT (CAD PSF) SEP. 30, 2010 QUARTERLY CHANGE IN RENT (%) ANNUAL CHANGE IN RENT (%) Calgary, AB 10,609,000 12.6 12.4 28,000 247,000 32.50 1.6 -0.8 Edmonton, AB 4,834,000 15.2 13.8 222,000 227,000 31.70 1.8 3.1 Halifax, NS 2,555,000 16.4 11.0 121,000 178,000 26.70 0.0 -1.8 Kitchener-Waterloo, ON 1,446,000 16.1 15.2 26,000 71,000 26.00 -2.7 2.0 Montreal, QC 13,226,000 7.6 8.4 69,000 46,000 24.00 0.0 -3.0 Ottawa, ON 11,566,000 8.2 7.9 362,000 625,000 30.10 -3.0 4.0 Regina, SK 659,000 0.6 0.6 0 (3,000) 24.50 0.0 -12.5 Toronto, ON 42,795,000 7.7 7.5 614,000 987,000 31.60 1.3 7.6 Vancouver, BC 13,582,000 12.5 12.5 37,000 142,000 36.70 4.8 11.2 Victoria, BC 769,000 - - - - 31.50 - - CANADA TOTAL/AVERAGE 102,040,000 9.48 9.22 1,480,000 2,519,000 31.00 1.18 7.71 29.50 0.51 0.69 weighted equal weighted equal
  7. 7. highlights | Q3 2010 | office | north America Colliers International | p. 7 first drop (albeit very small) in vacancy after eleven consecu- tive quarterly increases. Office vacancies finished the quarter at 16.28 percent and possibly marked the beginning of a long gradual decline in vacancy. During the third quarter the Downtown vacancy rate decreased 8 basis points to register 14.86 percent while suburban vacancies held steady at 16.91 percent. One change of note was during the quarter down- town Class A vacancies moved significantly lower, dropping 32 basis points to register 15.87 percent. Canadian office va- cancy rates were mixed with central business district (CBD) vacancies rising 4 basis points to 7.16 percent while suburban vacancies decreased 8 basis points to 9.02 percent. Office occupancies up for the second consecutive quarter. Possibly heralding the beginning of the next up cycle, U.S. of- fice markets collectively posted another quarter of positive absorption. This second quarter of positive absorption came after nine consecutive quarters of negative absorption begin- ning first quarter 2008. Third quarter absorption came in at 6.6 MSF (million square feet) which was a substantial in- crease from the second quarter when occupied space in- creased by 1.8 MSF. Third quarter absorption was also a sig- nificant improvement from the year ago period when 17.7 MSF was returned to the market. Examining third quarter absorp- tion in detail shows 92% of newly occupied space was in Class A buildings reflecting a move by tenants to upgrade their premises often with little additional cost. Canadian markets also recorded an increase in occupied space during the third quarter with absorption totaling 2.7 MSF. Rent picture increasingly mixed. Third quarter rent data shows CBD rents increased a further 1.4 percent to average $39.06 per square foot while suburban rents largely held steady dropping by just two cents a square foot to $26.22. Looking beyond the headline numbers, however, shows most office markets are still characterized by declining rents. The reason for this apparent contradiction is rental averages are inventory-weighted and so a few large markets can skew the national averages. Without this “weighting” effect, third quar- ter CBD rents fell 0.4 percent and suburban rents dropped by 1.6%. Canadian downtown office rents moved lower during the quarter with CBD quoted rents decreasing 2.7% while suburban rents increased 1.2%. Office construction pipeline continues to empty out. Third quarter office completions totaled just 5.4 MSF, a significant drop from the second quarter when construction totaled 11.1 MSF, and the lowest on record. Going forward office develop- ment will remain extremely subdued with construction activity falling to just 20.6 MSF at quarter end, compared with 29.2 MSF at the end of the second quarter and well below the 120 MSF underway at midyear 2008. Construction is expected to drift lower and with the exception of just a small number of build-to-suits and a few select speculative developments, of- fice development will be absent from the U.S. office landscape by as soon as mid-2011. Office Markets Show First Signs of Beginning a Long Slow Road to Recovery Continued from page 1 UNITED STATES | OFFICE INVESTMENT MARKET CBD SALES PRICE (USD PSF) CBD CAP RATE (%) SUBURBAN SALES PRICE (USD PSF) SUBURBAN CAP RATE (%) Atlanta, GA 80.00 8.73 100.00 9.40 Bakersfield, CA 128.00 9.26 111.00 – Charleston, SC 250.00 8.00 135.00 11.00 Chicago, IL 220.00 7.25 120.00 8.00 Columbus, OH – – 118.00 – Dallas/Fort Worth, TX – – 75.00 8.75 Denver, CO 195.00 8.00 153.00 8.50 Fairfield County, CT – – 250.00 8.00 Fresno, CA 160.00 9.00 170.00 8.50 Ft. Lauderdale/Broward County, FL 183.05 6.65 80.00 – Hartford, CT 11.00 – 136.00 8.60 Honolulu, HI 251.00 7.00 – – Houston, TX 150.00 8.80 122.00 8.80 Jacksonville, FL 110.00 9.25 120.00 8.75 Las Vegas, NV – – 49.00 – Little Rock, AR 88.00 9 110.00 9.00 Los Angeles – Inland Empire, CA – – 71.00 – Los Angeles, CA 332.00 6.00 275.00 8.00 Miami-Dade Country, FL – – 319.00 – New York, NY – Downtown Manhattan 350.00 6.00 – – New York, NY – Midtown Manhattan 422.00 5.00 – – New York, NY – Midtown S. Manhattan 400.00 6.00 – – Oakland, CA – 8.00 – 9.00 Orange County, CA – – 162.00 8.10 Orlando, FL 183.59 – 171.28 9.20 Philadelphia, PA 122.00 9.00 112.00 9.00 Phoenix, AZ – – 105.00 – Pleasanton/Walnut Creek, CA 112.50 8.00 87.50 8.50 Portland, OR 162.58 – 159.56 7.16 Sacramento, CA 220.00 8.50 150.00 8.70 San Diego County, CA 124.50 – 181.66 8.45 San Francisco Peninsula, CA – – 250.00 6.50 San Francisco, CA 314.00 6.25 – – Stamford, CT 350.00 8.00 – – Stockton/San Joaquin County, CA 134.00 8.80 – – Tampa, FL – – 108.32 10.50 Washington, DC 724.22 5.80 – – West Palm Beach/Palm Beach Co., FL 97.44 10.50 105.39 11.00 Westchester County, NY – – 250.00 8.00 canada | OFFICE INVESTMENT MARKET CBD SALES PRICE (cAD PSF) CBD CAP RATE (%) SUBURBAN SALES PRICE (cAD PSF) SUBURBAN CAP RATE (%) Calgary, AB 340.00 6.50 335.00 7.25 Kitchener-Waterloo, ON 160.00 8.00 110.00 7.75 Montreal, QC 275.00 7.00 190.00 7.75 Ottawa, ON 270.00 7.25 145.00 7.60 Regina, SK 213.00 7.45 – – Saskatoon, SK 175.00 7.75 - - Toronto, ON 167.00 – 151.00 9.30 Vancouver, BC 450.00 5.70 330.00 6.50
  8. 8. highlights | Q3 2010 | office | north America www.colliers.com Inventory – Includes all existing multi- or single-tenant leased and owner-occupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate – Percentage of total inventory physically vacant as at the survey date including direct vacant and sublease space. Absorption –Net change in physically occupied space over a given period of time. New Supply – Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions. Annual Quoted Rent – Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate – (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. Note: SF = Square Feet PSF = Per Square Foot CBD = Central Business District Glossary COLLIERS INTERNATIONAL 601 Union Street, Suite 5300 Seattle, WA 98101 tel +1 206 223 0866 FAX +1 206 757 9427 FOR MORE INFORMATION Ross J. Moore Chief Economist | USA tel +1 617 722 0221 EMAIL ross.moore@colliers.com 480 offices in 61 countries on 6 continents United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95 • $1.9 billion in annual revenue • 2.4 billion square feet under management • Over 15,000 professionals Copyright © 2010 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success. Nashville, Tennessee

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