OFFICE 3Q report · consecutive quarter. Average price per square foot dropped to $146 per square foot during Q3 2015; the lowest average the city has seen since Q1 2010 when $105

3Q2015

RA: 300,907 sq. ft. Floors: 11Range of Space: 23,851 - 300,907 sq. ft.Total Available: 300,907 sq. ft.

OFFICEreportPowerful Performance. Extraordinary Results.

Transition of Energy IndustryWhat’s certain is that the energy industry is in transition, with more layoffs, bankruptcies, mergers and acquisitions to come. Oil prices, a catalyst for growth in recent years, are now a drag on Houston’s economy. The industry is restructuring, but it’s too early to know how long the reorganization will last or what the industry will look like when it’s done. Houston is in no danger of losing its role as “Energy Capital of the World,” but the industry will look much different in the future—fewer firms, a smaller workforce, greater capital discipline, and even more reliance on technology.

Source: The Greater Houston Partnership

The Houston Business Cycle The Houston Business-Cycle Index declined at an annual rate of 1.9 percent in August. July’s growth rate was revised down from 5.9 percent to 4.4 percent. Upstream energy (oilfield-related employment and manufacturing) weakness continues to be at least partially offset by strength in downstream energy (refining and petrochemicals). Leisure and hospitality and health care, two sectors driven in part by Houston’s robust population growth, also continue to log solid gains. On whole, the outlook for Houston is for job growth to remain flat.

Source: Federal Reserve Bank of Dallas

WHAT’S IN THIS ISSUE?Market SnapshotHouston EconomyDevelopment UpdateSubmarket SnapshotSublease Review

HOT MARKET TOPICS

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Houston Class A overall occupancy continues to decline, ending Q3 2015 at 80.8 percent (including sublease space), down from 88.1 percent this time last year. Average quoted rental rates declined Q3 2015 to $25.64 per square foot, down $0.63 from Q3 2014.

Currently, Colvill Office Properties is tracking a total of 5.8 million square feet of one-floor-or-more sublease space in Class A & B buildings in the city, an increase of 400,000 square feet from the previous quarter’s 5.4 million square feet. We continue to see increased M&A activity, as well as energy companies adding additional space to the sublease market.

In addition to companies downsizing as a result of layoffs, several of the large leases signed over the previous few years included space for anticipated growth that did not occur, thus contributing to the continued uptick in sublease inventory.

As the competition between office space options continues to increase, many landlords have reduced asking rental rates, as well as offering more concessions such as higher tenant improvement allowances and rental abatement.

Houston has witnessed a flight-to-quality over the past few years, thus driving Class A, Tier 1 absorption. Many of the new buildings that signed leases during that period are still delivering, causing net absorption to remain positive in Houston Class A buildings at this time.

Houston delivered 759,000 square feet of new office development space during Q3 2015, bringing the total to 4.2 million square feet year-to-date (60.3 percent leased) with an additional 2.7 million square feet (52.2 percent pre-leased) set to deliver by the end of 2015.

During the current quarter, we began tracking a new submarket located far west along I-10 and the Grand Parkway. Although the emerging area is comprised of smaller office, retail, and medical buildings, we believe it will be beneficial to follow course of the growing number of developments in the area.

Included on the following pages is an in-depth look into the Houston market performance during Q3 2015. As always, please let us know your feedback or if we can be of further service.

“Houston has witnessed a flight-to-quality over the past few years, thus driving Class A Tier 1 absorption. Many of the new buildings that signed leases during that period are still delivering, causing net absorption to remain positive in Houston Class A buildings.”

Chip ColvillCEO/President

COLVILL OFFICE PROPERTIES 3Q 2015 OFFICE MARKET REPORT 3

MARKET SNAPSHOT

Powerful Performance. Extraordinary Results.

Houston Market Snapshot 4Houston Economy 5Development Update 8

SNAPSHOT

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Market Snapshot

During the past ten years, the city typically gains an average of 50,000 jobs within the last four months out of each year, causing most employment forecasts to predict Houston should gain a total of 20,000 – 30,000 jobs in 2015.

HOUSTON METRO TRENDS 09.2015 08.2015 07.2015 06.2015 05.2015Nonfarm Payroll Employment (in Ks) 2983.4 2977.0 2982.2 2991.1 2982.7

Change in Jobs (in Ks) 6.4 -5.2 -8.9 +8.4 +11.1

Unemployment Rate N/A 4.6% 4.7% 4.5% 4.2%

WTI Crude Oil Spot Price (price per barrel) $45.48 $42.87 $50.90 $59.82 $59.26

Henry Hub Natural Gas Spot Price (price per MMBtu) $2.66 $2.77 $2.84 $2.78 $2.85

Single-family Home Sales 6,691 7,454 8,149 7,935 6,807

Median Sales Price $208,000 $215,100 $220,000 $225,000 $223,000

HOUSTON OFFICE TRENDS Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014Class A Occupancy Rate 80.8% 82.1% 83.5% 85.9% 88.1%

Class A Average Net Asking Rate $25.64 $26.10 $26.30 $26.35 $26.27

Class A Under Construction (SF) 7,448,512 SF 8,077,844 SF 12,887,015 SF 18,376,747 SF 17,764,313 SF

WHERE BUSINESS MEETS WESTCHASERA: 153,342 sq. ft. Floors: 6Range of Space: 3,276 - 17,979 sq. ft.Total Available: 21,255 sq. ft.


EMPLOYMENTAs of August 2015, Houston employment remains 22,200 jobs below its December 2014 peak. Although some employment sectors continue to grow, their growth is not enough to offset the losses elsewhere. During the past ten years, the city typically gains an average of 50,000 jobs within the last four months out of each year, causing most employment forecasts to predict Houston should gain a total of 20,000 – 30,000 jobs in 2015.

HOME PRICINGThe Houston residential real estate market witnessed above-average single-family home sales during the third quarter of this year. Q3 2015 single-family homes sales totaled 22,294, compared to 21,244 sold during Q2 2015 and 14,785 sold during Q1 2015. The average price of a single-family home dipped from its peak of $302,942 in June 2015 to $270,901 in September 2015. Months of inventory, the estimated time it would take to deplete the current active housing inventory based on the previous 12 months of sales, increased to a 3.5-month supply versus a 2.5-month supply at the end of December 2014, but remains well below the current national supply of 5.2 months of inventory.

OIL & GASJust when oil prices looked like they had stabilized during Q2 2015, the West Texas Intermediate crude price dropped to $45.48 per barrel at the end of September, significantly lower than the $59.82 reported at the end of June 2015. Natural gas prices ended September 2015 at $2.66 price per MMBtu, compared to $3.92 price per MMBtu one year ago. RigData reports that 33,779 U.S. wells (onshore and offshore) have been permitted so far this year, down 34.2 percent from the 51,337 permits issued during the first three quarters of 2014. The firm also reports 16,987 wells were started the first three quarters of this year, down 45.2 percent from 31,034 started in the same period last year.

SUPPLY VERSUS DEMANDThe Houston Class A office market delivered 860,000 square feet of new office buildings to the market during Q3 2015. Of the 860,000 square feet, 759,000 square feet is considered “for-lease” buildings. The remaining total is comprised of other office buildings, such as owner-occupied buildings, data centers, and non-competitive office buildings. Class A net absorption posted a positive 2.7 million square feet year-to-date, which includes a positive 528,000 square feet absorbed during Q3 2015. Currently, 7.5 million square feet of “for-lease” office buildings are under construction in the city. Of that total, 2.7 million square feet is scheduled to deliver during Q4 2015.

COMMERCIAL INVESTMENT SALES ACTIVITYSales volume in Houston totaled $469.5 million during Q3 2015, lower than average for the second consecutive quarter. Average price per square foot dropped to $146 per square foot during Q3 2015; the lowest average the city has seen since Q1 2010 when $105 per square foot was posted. High quality, well-leased assets for sale in Houston are scarce, causing investors to look for opportunities focused more on well-located but under-leased assets which present significant upside.

Houston’s Economy

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Houston’s Economy

3%

4%

5%

6%

7%

8%

9%

10%

11%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

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

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD

HISTORICAL EMPLOYMENT GROWTH

CLASS A HOUSTON SUPPLY, DEMAND AND VACANCY

HISTORICAL UNEMPLOYMENT RATE

Source: U.S. Bureau of Labor Statistics Not Seasonally Adjusted, Sept 2015

Source: CoStar, Sept 2015. Includes all Class A office buildings in the Houston market.

United States Texas Houston

4.6%

5.2%

4.4%

Change in Supply Change in Demand Vacancy Rate

2,200

2,300

2,400

2,500

2,600

2,700

2,800

2,900

3,000

3,100

Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

2.0% 3.2% 4.4% 3.6%3.2%

Source: U.S. Bureau of Labor Statistics, Sept 2015 Number of Non Farm Payroll Jobs; in thousands

A N N U A L G R O W T HYTD

-0.3%


Houston’s Economy

0

50

100

150

200

250

300

350

400

450

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1 '08

Q2 '08

Q3 '08

Q4 '08

Q1 '09

Q2 '09

Q3 '09

Q4 '09

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q3 '11

Q4 '11

Q1 '12

Q2 '12

Q3 '12

Q4 '12

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Q3 '15

$2

$4

$6

$8

$10

$12

$14

$20

$40

$60

$80

$100

$120

$140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0

100

200

300

400

500

600

700

Information Other Mining & Logging Financial Activities Construction Manufacturing Leisure & Hospitality

Education & Health Services

Government Professional & Business Services

Trade, Transportation,

Utilities

HOUSTON MSA JOB SECTORS ONE YEAR CHANGE

HOUSTON SALES VOLUME AND AVERAGE PRICE PSF

SPOT CRUDE AND NATURAL GAS PRICING

Source: Bureau of Labor Statistics, Sept 2015

Source: U.S. Energy Information Administration, Sept 2015

Source: Real Capital Analytics, Sept 2015

Sale

s Vo

lum

e (In

milli

ons)

Sales Price (per square foot)

Sales Volume (in millions) Sales Price (per square foot)

WTI

(pric

e pe

r bar

rel)

Natural G

as (price per MM

Btu)

WTI Crude Spot Price Henry Hub Natural Gas Spot Price

Number of Non Farm Payroll Jobs; Sept 2014

1.0%

0.8%2.5%

5.0%6.5%-4.8%

-1.6%-3.2%-0.6% -0.2%6.5%

Number of Non Farm Payroll Jobs; Sept 2015

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45

10

2886

225

6

99

99

45

10

610

45

90A

59

5990A

8

8

8

249

290

146

Woodlands

Hwy 249

Greenspoint

North Loop/Northwest

Energy CorridorWest

Westchase

Sugar Land

GalleriaWest Loop

Greenway

Inner Loop

CBD

N

West Belt

Energy CorridorEast

8

Katy/Far West

New DevelopmentsSUBMARKET # OF

PROJECTS

CBD 1

West Loop 3

Energy Corridor West 3

Energy Corridor East 3

Westchase 1

West Belt 1

The Woodlands 5

Upper Kirby Greenway 3

Katy Far West 1

TOTAL 21*

* Represents total number of office projects currently under construction in Houston’s major submarkets; not indicative of the total number of projects in the entire market.

33

5

1

1

1

33

PERCENT OF TOTAL SF OF OFFICE SPACE SCHEDULED FOR DELIVERY IN EACH SUBMARKET

20.3%

19.0%

15.4%

14.2%

11.0%

9.7%

6.0%

2.7% 1.7% Energy Corridor West 20.3%

The Woodlands 19.0%

West Loop 15.4%

CBD 14.2%

Upper Kirby Greenway 11.0%

Energy Corridor East 9.7%

Westchase 6.0%

West Belt 2.7%

Katy Far West 1.7%

Five projects totaling 759,000 square feet of office lease space under construction in

Houston delivered during the third quarter, compared to the 2.1 million

square feet delivered during the previous quarter.

Currently, 7.5 million square feet is under construction in the city, 28 percent less than the 10.4 million square feet under construction this time last year.

The Energy Corridor West submarket’s 1.5 million square

feet under construction accounts for 20.3 percent of the total space

under construction in Houston, with The Woodlands submarket’s 1.4 million square feet a close second at 19.0 percent of the total space under construction.

1


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8

8

8

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Woodlands

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Greenspoint


Energy CorridorWest

Westchase

Sugar Land

GalleriaWest Loop

Greenway

Inner Loop

CBD

N

West Belt

Energy CorridorEast

8

Katy/Far West

TOTAL SF OF OFFICE SPACE SCHEDULED FOR DELIVERY

Submarket Building Developer Size (SF) % Leased Asking Rent Major Tenants

Energy Corridor West

Enclave Place1414 Enclave Pkwy. Piedmont Office Realty Trust 300,907 0% 27.00 N/A

Inner Loop San Felipe Place2229 San Felipe Hines 167,562 28% 35.00 N/A

West Loop River Oaks District4444 Westheimer Oliver McMillan 92,021 93% 32.00 US Capital Advisors

Far West Katy Katy Ranch Phase I24275 Katy Freeway Freeway Properties 151,187 16% 20.00 N/A

Far West Katy Det Norske Veritas - Phase II22535 Colonial Pkwy. Chambers Street Properties 47,250 100% N/A Det Norske Veritas

TOTALS 758,927 27%

* The total square footage of office space delivered does not include owner-occupied buildings.3Q 2015 DELIVERIES

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

– Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Pre-Leased Under Construction

ENCLAVE PLACE SAN FELIPE PLACE RIVER OAKS DISTRICT DET NORSKE VERITAS - PHASE IIKATY RANCH PHASE I

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Pre Leased Under Construction

Nine projects totaling 2.7 million square feet are scheduled to deliver by the end of 2015. Of that total, nearly 1.3 million square feet is pre-leased (52.2%), leaving 1.4 million square feet available.

Q3 2015 TOTAL DELIVERED758,927 SF

TOTAL PRE-LEASED27 %

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New Developments

SUBMARKET BUILDING NAME ADDRESS DEVELOPER BUILDING SIZE

LEASED SF

LEASED %

ASKING RENT $ (NNN)

MAJOR TENANTS DELIVERY

EnergyCorridor West Energy Center Four 925 N Eldridge Pkwy. Trammell Crow 600,000 600,000 100% N/A ConocoPhillips Oct-15

Upper Kirby/Greenway 3737 Buffalo Speedway 3737 Buffalo

Speedway PM Realty Group 400,000 115,300 29% 30.00 Solvay America PM Realty Group Oct-15

Upper Kirby/Greenway One Grove Street 2925 Richmond Ave. Midway Companies 224,546 132,249 59% 32.50 Vitol

BoyarMiller Oct-15

West Belt Remington Square Bldg. C 10713 W Sam Houston Pkwy.

Sun Life Financial Services 200,000 - 0% 24.00 None Oct-15

Energy Corridor East Gateway at Valley Spring 9090 Katy Freeway NewQuest Properties 81,234 61,048 75% 26.00 Stoller USA

East West Bank Oct-15

Energy Corridor East Air Liquide Center - South 9811 Katy Freeway MetroNational 452,370 267,507 59% 27.50 Air Liquide Nov-15

The Woodlands Three Hughes Landing 1780 Hughes Landing Blvd.

Woodlands Development Co. 320,815 - 0% 28.00 None Nov-15

The Woodlands Havenwood Office Park 25700 Interstate 45 Synergy Wealth Management 240,470 - 0% 24.00 None Nov-15

Energy Corridor East CityCentre Five 825 Town &

Country Blvd. Midway Companies 192,357 120,223 62% 32.50 EMAS Nov-15

Westchase Millennium Tower II 10353 Richmond Ave. BMS Management 445,000 445,000 100% N/A National Oilwell Varco Feb-16

West Loop 1885 St. James 1885 St. James Place Nelson Murphree Legacy Partners 165,000 - 0% 28.50 None Mar-16

Far West Katy Grandway West - Bldg. 2 Grand Parkway & Franz Rd.

The Urban Companies 130,200 21,066 16% 17.50 Severn Trent Mar-16

Energy Corridor West Energy Center Five 915 N Eldridge Pkwy. Trammell Crow 524,328 - 0% 28.00 None Apr-16

The Woodlands 1735 Hughes Landing 1735 Hughes Landing Blvd.

Woodlands Development Co. 331,840 331,840 100% N/A ExxonMobil Apr-16

The Woodlands 1725 Hughes Landing 1725 HughesLanding Blvd.

Woodlands Development Co. 317,052 317,052 100% N/A ExxonMobil Apr-16

Upper Kirby/Greenway Regions Financial Center 3773 Richmond Ave. The Redstone

Companies / 195,000 108,852 56% 31.00 Regions Bank Apr-16

Energy Corridor West West Memorial Place II 15377 Memorial Dr. Skanska 389,709 189,712 49% 28.50 IHI May-16

The Woodlands Wildwood Corporate Center - II

480 Wildwood Forest Dr. Archway Properties 201,933 - 0% 26.00 None Jul-16

West Loop BHP Billiton Tower 1500 Post Oak Blvd. TIAA-CREF/ Transwestern 600,000 600,000 100% N/A BHP Billiton Oct-16

CBD 609 Main at Texas 609 Main Hines 1,056,658 - 0% 36.00 None Dec-16

West Loop Amegy Bank Building 1717 West Loop South

Owner-Occupied (added due to space avail)

380,000 282,088 74% 32.50 Amegy Bank Feb-17

TOTAL UNDER CONSTRUCTION 7,448,512 3,591,937 48.2%

UNDER CONSTRUCTION FOR LEASE

Total Under Construction 7,448,512 SFTotal Leased 3,591,937 SF

Bold indicates the building broke ground during the current quarter.



HOUSTON SUBMARKETS


Submarket Highlights 12Submarket Statistics 13Sublease Review 14

SUBMARKETS

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SUBMARKET HIGHLIGHTSCBD

Market conditions in the CBD have remained relatively steady over the past several quarters. Overall occupancy in Class A buildings closed the current quarter at 86.2 percent and asking net rental rates remained at $31.21 per square foot. During Q3 2015, several tenants began marketing their space for sublease, which included 2 floors located at 1301 Fannin; 1 floor located at Two Allen Center; and 1.5 floors at Pennzoil Place.

WEST LOOP

Overall occupancy dropped from 84.8 percent during Q2 2015 to 82.7 percent during Q3 2015. Asking net rental rates fell $0.25 from $25.58 to $25.33 per square foot during the same period. Air Liquide began vacating its 180,000 square feet located at Galleria Tower I in a move to the Energy Corridor East area.

ENERGY CORRIDOR WEST

Five companies began marketing full-floor availabilities on the sublease market during Q3 2015 located at CityCentre One, Two Memorial Plaza, Cobalt Center, 9805 Katy Freeway, and the Nexen Building.

WESTCHASE

200,000 square feet was added at Pinnacle Westchase to the sublease market. Limited leasing activity in this submarket continued through the third quarter of this year. Westchase overall occupancy remained unchanged from 78.7 percent during Q2 2015 to 77.7 percent during Q3 2015.

FAR WEST KATY

Colvill Office Properties began tracking this emerging area in West Houston. Located along Interstate 10, the Far West Katy submarket begins at Barker Cypress and continues west just past the Grand Parkway, extending along the Grand Parkway both north and south. Please review the new submarket area and let us know if you have questions or would like more information.

Houston’s Submarkets

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Energy CorridorWest

Westchase

Sugar Land

GalleriaWest Loop

Greenway

Inner Loop

CBD

N

West Belt

Energy CorridorEast

8

Katy/Far West


610

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Energy CorridorWest

Westchase

Sugar Land

GalleriaWest Loop

Greenway

Inner Loop

CBD

N

West Belt

Energy CorridorEast

8

Katy/Far West

70

9

64

14 5

22

51

5 9 6

18 12

78

12

44

13

40

24

2 2

24

11 2 8 9 1

31 26

41

19

5 3

1

51

8 2

22

1 10 9

0

10

20

30

40

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60

70

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CBD Inner Loop

West Loop

Upper Kirby Greenway

Sugar Land

North Loop Northwest

Energy Corridor

West

Energy Corridor East

Far West Katy

West Belt

Westchase Highway 249

Greenspoint The Woodlands

FULL FLOORS AVAILABLEDirectSubleaseFuture Available

SubmarketTotal

Inventory(SF)

Occupancy(%)

Direct Available

(SF)

Direct Available

(%)

Sublet Available

(SF)

Sublet Available

(%)

Average NetRental Rate

CBD - Total Class A 28,284,196 86.2 2,663,210 9.4 1,227,596 4.3 $31.21

CBD Tier I 9,816,558 90.5 442,938 4.5 493,834 5.0 $34.65

CBD Tier II 13,778,127 88.5 1,042,193 7.6 540,349 3.9 $30.64

CBD Tier III 4,689,511 70.8 1,178,079 25.1 193,413 4.1 $25.66

Inner Loop 2,026,719 84.7 297,617 14.7 11,745 0.6 $24.22

West Loop - Total Class A 18,583,897 82.7 2,657,241 14.3 557,844 3.0 $25.33

West Loop Tier I 7,096,927 86.9 718,785 10.1 214,175 3.0 $30.45

West Loop Tier II 8,402,353 80.7 1,345,724 16.0 273,647 3.3 $23.42

West Loop Tier III 3,084,617 78.5 592,732 19.2 70,022 2.3 $18.75

Upper Kirby / Greenway 6,267,350 86.2 677,231 10.8 186,775 3.0 $24.01

Sugar Land 2,401,682 79.9 334,925 13.9 147,562 6.1 $20.29

North Loop / Northwest 2,116,717 65.6 688,810 32.5 40,211 1.9 $13.90

Energy Corridor West - Total Class A 11,327,180 74.3 1,624,438 14.3 1,282,244 11.3 $24.60

Energy Corridor West Tier I 6,968,081 72.0 1,067,118 15.3 887,246 12.7 $26.37

Energy Corridor West Tier II 4,359,099 78.2 557,320 12.8 394,998 9.1 $21.78

Energy Corridor East 2,991,931 86.9 208,785 7.0 183,832 6.1 $26.01

Far West Katy 1,212,125 65.9 409,566 33.8 3,555 0.3 $20.24

West Belt 2,723,435 86.3 281,300 10.3 92,327 3.4 $21.09

Westchase - Total Class A 8,182,197 77.7 955,814 11.7 869,191 10.6 $23.75

Westchase Tier I 4,082,136 77.5 482,219 11.8 436,496 10.7 $27.31

Westchase Tier II 4,100,061 77.9 473,595 11.6 432,695 10.6 $20.21

Highway 249 2,732,095 77.2 569,720 20.9 52,281 1.9 $19.99

Greenspoint 5,193,860 60.8 1,714,239 33.0 319,641 6.2 $16.19

The Woodlands - Total Class A 3,657,838 81.9 356,737 9.8 304,256 8.3 $27.92

The Woodlands Tier I 2,808,203 86.6 110,946 4.0 265,606 9.5 $29.31

The Woodlands Tier II 849,635 66.5 245,791 28.9 38,650 4.5 $23.34

TOTALS 97,701,222 80.8 13,439,633 13.8 5,279,060 5.4 $25.64

CBD Inner Loop West Loop Upper Kirby Sugar Land North Loop Energy Corridor Energy Corridor Far West West Belt Westchase Highway 249 Greenspoint The Greenway Northwest West East Katy Woodlands

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Sublease ReviewThe Houston Office Market (Class A & B) currently has 5.8 million SF of full floor and larger sublease available.Of the total 5.8 million SF:• 73 listings totaling 4.3 million SF were added to the sublease market since January 2015.• 30 listings totaling 1.4 million SF have been listed for sublease for over 1year. Colvill Office Properties reported the following statistics in previous sublease reviews:June 2015: 5.4 million SF total April 2015: 4.2 million SF total

For each submarket, tracking Class A & B, full floor and larger subleases, the chart below depicts:

Total amount of sublease space available.Total number of sublease listings.Percentage of sublease space available.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Energy Corridor West

CBD Westchase Greenspoint West Loop The Woodlands

Greenway Sugar Land

Energy Corridor East

West Belt

Highway 249

Bellaire North Loop

CLASS A CLASS B

TOTAL SUBLEASE AVAILABLEClass A 4,842,595 SF 5.1 % of marketClass B 1,002,040 SF 2.0 % of marketTotal 5,844,635 SF 4.0 % of market

CLASS A!Sublease Available

# of Listings

% of Submarket

Energy Corridor West! 1,250,645! 13! 11.0%!

CBD! 1,162,950! 27! 4.1%!

Westchase! 837,504! 11! 10.2%!

Greenspoint! 477,854! 5! 9.2%!

West Loop! 338,615! 12! 1.8%!

The Woodlands! 206,875! 3! 5.7%!

Energy Corridor East! 175,201! 6! 5.9%!

Greenway! 149,684! 2! 2.4%!

Sugar Land! 112,833! 2! 4.7%!

West Belt! 62,465! 2! 2.3%!

North Loop! 26,414! 1! 1.2%!

Bellaire! 21,555! 1! 1.8%!

Highway 249! 20,000! 1! 0.7%!

CLASS B!Sublease Available

# of Listings

% of Submarket

Energy Corridor West! 318,413! 6! 7.0%!

CBD! 204,489! 2! 2.2%!

Westchase! 0! 0! 0!

Greenspoint ! 140,006! 4! 3.1%!

West Loop! 30,481! 1! 0.3%!

The Woodlands! 69,663! 3! 2.4%!

Energy Corridor East! 0! 0! 0!

Greenway! 0! 0! 0!

Sugar Land! 0! 0! 0!

West Belt! 108,132! 2! 7.6%!

North Loop! 0! 0! 0!

Bellaire! 39,784! 1! 2.2%!

Highway 249! 91,072! 2! 11.3%!


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

< 1 Yr

1 Yr

2 Yrs

3 Yrs

4 Yrs

5 Yrs

6 Yrs

7 Yrs

8 Yrs

9 Yrs

10 Yrs

11 Yrs

12 Yrs

13 Yrs

14 Yrs

15 Yrs

For the total Houston market, tracking Class A & B, full floor and larger subleases, the information depicts:

The remaining lease term on each sublease listing.Total number of sublease listings within each time frame.Total amount of sublease space available within each time frame.

Tracking Class A & B, full floor and larger subleases, the chart below depicts the number of listings by size of sublease block available.

“Of the 5.8 million SF of sublease available in the Houston market, 65% has less than 5 years of lease term remaining.”

20,000 SF - 49,999 SF 50,000 SF - 99,999 SF 100,000 SF +

TOTAL SF AVAILABLETIME REMAINING: Less than 5 years3,813,556 SF65.2% of Total Sublease

TIME REMAINING: 5 - 10 years1,602,040 SF27.4% of Total Sublease

TIME REMAINING: 11 + years429,039 SF7.3% of Total Sublease

# of YearsRemaining on

Sublease Term# of

Listings

Total SFSublease Available

>1 8 338,426

1 17 748,454

2 14 982,480

3 15 1,037,740

4 18 706,456

5 13 577,306

6 7 223,176

7 5 312,341

8 1 20,000

9 4 290,818

10 2 178,399

11 2 253,457

12 0 0

13 0 0

14 1 175,582

15 0 0

20,000 - 49,999 SF50,000 - 99,999 SF100,000 + SF

15 Listings

21 Listings 71

Listings

# of Listings

17

8 457

1318

1514

2 2 11 0 0 0

“Of the 107 sublease listings available in the Houston market, 71 of those are 2 floors or less in size.”

Powerful Performance. Extraordinary Results.www.colvilloffice.com

713.877.1550

The COLVILL Office Reportis compiled and analyzed by Sherra GilbertDirector of ResearchColvill Office Properties

Documents

OFFICE 3Q report · consecutive quarter. Average price per square foot dropped to $146 per square foot during Q3 2015; the lowest average the city has seen since Q1 2010 when $105