OFFICE TRENDS REPORTGREATER COLUMBUS REGION

www.colliers.com/columbus

Activity Turns to GainsCOLUMBUS REGION OVERVIEWThe Columbus office market gained 195,000 square feet of positive absorption in the third quarter. This is the second quarter in a row of positive absorption, and the last consecutive quarters of positive net absorption were fourth quarter 2008 and first quarter 2009. Construction seems to be picking up in the headlines at least as developers are discussing projects to fill demand for continuous space of 50,000 square feet or greater as well as expansion on the major firms in Columbus such as JP Morgan Chase and Nationwide Insurance. Leasing was led by JP Morgan Chase Bank filling 72,500 square feet of 1000 Polaris Parkway. Continued on page 2 ...

FORECASTS AND REFLECTIONS• The Columbus region posted positive results

during the third quarter of 2011 with the vacancy rate decreasing to 12.8 percent from 13.0 percent.

• NetJets, Inc.’s construction continues at their 140,000-square-foot building at Port Columbus International Airport, as does construction of Water’s Edge II in New Albany. Sherer’s Court expansion of 36,000-square-foot was completed for DZ. In New Albany, Pharmaforce

is expected to complete their 110,000-square-foot faciility in fourth quarter 2011. TJX is also expected to complete its 81,000-square-foot data center in fourth quarter 2011.

• Two new office projects have been approved for downtown. Nationwide Insurance has been approved for a 200,000-square-foot building on the corner of Nationwide and Spring. FBI will anchor a new project by Nationwide Realty Investors.

POSITIVE SIGNS

Manager’s confidence in the economy improved over first quarter 2011 but has since waned due to less than outstanding economic news. The US jobs report in September showed the economy had created 103,000 jobs, which may help managers confidence in the economy.

MARKET INDICATORS

RENTAL RATES

Q3

2011

Q4

2011*

VACANCY

NET ABSORPTION

CONSTRUCTION —

RENTAL RATES — — *Projected trend for next quarter

Q3 2011 | OFFICE

$14.00

$15.00

$16.00

$17.00

$18.00

$19.00

$20.00

$21.00

$22.00

3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Ren

tal R

ates

Class A Rental Rates Class B

(400,000)

(300,000)

(200,000)

(100,000)

0

100,000

200,000

300,000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Completion

s an

d Absorption

Vacan

cy Rates

Completions Absorption Vacancy Rate

ABSORPTION, COMPLETIONS, AND VACANCY RATES

Market interest has increased during the third quarter. While it’s very difficult to calculate and gauge market interest, Colliers International attempts to deduce demand by tracking tenants in the market. There was a slight increase compared to last quarter in the size desired by tenants that have toured space and have been in the market. There were roughly 11 tenants seeking more than 25,000 square feet of space which has not significantly changed from last quarter. (recheck before send)

Tenants are facing similar difficulties as they have been throughout the recovery. Move costs are contributing to slowing a deal down as financing the move has become more difficult.

Landlords are still facing the same bundle of problems they have been all year. Loan maturity has lenders putting pressure on landlords to lease space quickly while the lower net rental rates required to secure those deals are below the returns expected. Tenant improvement costs are being negotiated on either both of the agreement. Sometimes the landlord’s are negotiating pay for improvements in exchange for other incentives.

Market Activity Volume is the sum of the absolute value of each absorption change in the market, and it tells us how much space was in transition in the quarter. The total amount of space in

transition was slightly more than 1 million square feet which is roughly 350,000 more square feet in transition than Q3 2010.

EMPLOYMENT DATAThe unemployment rate for Columbus in July remained at 8.2 percent from June, up from a six month low of 7.3 percent in April 2011. The unemployment rate is determined by the ratio of the number of those who have looked for work in the last 4 weeks compared to the total number of workers including those searching for employment.

The sectors which are significant for office leasing were steady or up in the preliminary July numbers. The Information sector has remained flat January through July, but the sector is down 2.4 percent year-over-year. Employment for Financial Activities in the first half of the year was stronger than the same period in 2011. 1,300 jobs were made from June to July bringing the growth year-over-year in July to 1.3 percent. Professional and Business Services had been stronger this year than last but that growth has waned in June and July. The sector gained 2,000 jobs from June to July but the growth year over year fell from a high of 4.7 percent in May to just 2.5 percent in July. Education and Health Services decreased by about 600 jobs and is down 2.3 percent year over year.

The Columbus office market consists of 15 suburban submarkets plus the Central Business District submarket. The Columbus region features a total of 62.6 million square feet, 43.5 million of which is suburban.

MARKET ACTIVITY

SALES ACTIVITY

PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET

2221 Schrock Road August 11 $6,100,000.00 42,290 MS Consultants Lexington Realty Trust $144.00 B Worthington

2151 Dublin Granville Rd August 3 $550,000.00 21,040 MAPLE CANYON CO LLC 2151 DUBLIN LLC $26.82 C Westerville

560 Cleveland Ave July 7 $2,027,352.00 19,694 Cardinal Westerville LLC Altair Professional Village LLC $102.94 B Westerville

505 High St August 1 $900,000.00 19,192 Columbus Properties LLC Sage 505 Inc $46.89 C CBD

36 Gay St September 2 $550,000.00 15,870 Mohawk Properties LLC LA Buckeye Leaseholder LLC $34.65 C CBD

1476 Manning Pkwy August 24 $1,075,000.00 13,259 Dirtworks Skfd Ltd - $81.08 C Powell

Powell Polaris

Worthington

Westerville

NewAlbany

LickingCounty

Fairfield County

Madison County

Union County

Delaware County

Pickaway County

DublinBethel

Easton

East

Gahanna/Airport

CBD

Hilliard

SouthwestSoutheast

Arlington/Grandview

NorthCentral

LEASE ACTIVITY

PROPERTY ADDRESS LEASE SF LESSOR LESSEE ASKING PRICE (FSG) TYPE SUBMARKET

1000 Polaris Pkwy 72,588 Polaris Crossing LLC JP Morgan Chase $9.95 (NNN) B Polaris

2800 Corporate Exchange 30,000 FTM Associates LLC Stanford Brown University $17.98 B Worthington

3435 Stelzer Rd 27,500 Columbus 1031 LLC Estate Infirmation Services $16.25 A Easton

3455 Mill Run Drive 22,422 One Mill LLC indiana Wesleyan $19.09 A Hilliard

775 Yard St 23,000 775 Yard Street LLC Willis Insurance $23.00 A Arlington/Grandview

775 Yard St 17,000 775 Yard Street LLC MA Architects $23.00 A Arlington/Grandview

P. 2 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | Q3 2011 | OFFICE | GREATER COLUMBUS REGION

COLUMBUS REGION MARKET

Colliers international has changed the critieria for inclusion in the office dataset. All 10,000 square foot, class A , B, C buildings, not owned and fully leased by government are included in the dataset. This has changed the overall vacancy rate significantlyfrom the numbers at the close of 2010.

UPDATE Market Comparisons

OFFICE MARKET

Net Absorption Construction Asking Rental Rates

SUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Class A ($) Class B ($)

CBD 19,091,001 2,252,341 11.8% (31,607) 16,381 - - $19.64 $16.55

ARLINGTON/GRANDVIEW 4,752,155 693,191 14.6% 41,560 36,139 - - $21.60 $15.80

DUBLIN 9,501,878 1,180,242 12.4% 41,814 122,473 - - $17.25 $14.81

EAST 3,555,814 587,656 16.5% (40,319) (4,100) 140,000 - $17.17 $14.22

EASTON 2,685,332 169,260 6.3% (21,079) 14,471 - - $17.83 $22.50

GAHANNA/AIRPORT 1,262,397 159,176 12.6% 8,949 190,213 - - $17.44 $16.24

HILLIARD 2,480,456 472,810 19.1% 22,199 (173,550) - - $19.96 $15.05

NEW ALBANY 1,935,789 184,726 9.5% 21,529 50,208 191,000 - $18.11 $15.00

NORTH CENTRAL 1,255,636 92,496 7.4% (6,849) (24,671) - - $23.00 $14.85

POLARIS 4,419,869 255,423 5.8% 119,337 15,148 - - $18.95 $15.92

POWELL 273,719 78,746 28.8% 2,986 2,282 - - - $14.86

SOUTHEAST 402,548 60,225 15.0% 10,140 (360) - - - -

SOUTHWEST 236,158 54,547 23.1% - (13,074) - - - $7.50

WESTERVILLE 4,489,479 677,634 15.1% 44,358 76,779 - - $16.88 $15.09

WORTHINGTON 6,496,402 1,082,019 16.7% (22,644) (22,476) - - $16.26 $14.70

SUBURBAN TOTAL 43,747,632 5,748,151 13.1% 221,981 269,482 331,000 - $17.96 $14.94

TOTAL 62,838,633 8,000,492 12.7% 190,374 285,863 331,000 - $18.58 $15.41

Net Absorption Construction Asking Rental Rates

PROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeCLASS A 25,676,078 2,951,139 11.5% 193,367 113,503 331,000 - $18.58

CLASS B 23,102,511 3,285,154 14.2% 77,640 229,227 - - $15.41

CLASS C 14,060,044 1,764,199 12.5% (80,633) (56,867) - - $12.47

TOTALS 62,838,633 8,000,492 12.7% 190,374 285,863 331,000 - $16.08

QUARTERLY COMPARISON AND TOTALS

Net Absorption Construction Asking Rental Rates

QUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeQ2, 2011 62,838,633 8,174,763 13.0 189,981 175,481 246,500 - $18.25 $15.25

Q1, 2011 62,838,633 8,394,042 13.4 (14,500) (14,500) 246,500 65,000 $18.10 $15.46

Q4, 2010 40,544,677 7,188,371 17.73 (13,360) (253,648) 65,000 - $18.56 $14.96

Q3, 2010 40,544,677 7,184,011 17.72 (191,783) (240,288) 90,000 - $18.77 $15.38

RESEARCH & FORECAST REPORT | Q3 2011 | OFFICE | GREATER COLUMBUS REGION

COLLIERS INTERNATIONAL | P. 3

CENTRAL BUSINESS DISTRICTThe CBD incurred negative 42,000 square feet of absorption. The expansions last quarter have given way to shrinkage this quarter. ATNT downsized at 150 Gay Street by 19,000 square feet. There were a few law firms and legal service firms that left space for about 17,600 square feet total. Karlsberger, central Ohio’s fourth-largest architecture firm, closed its doors after 83 years in business. The firm left 30,000 square feet at 99 Main Street.

In terms of positive absorption, there were two larger footprint law firms who leased space at 250 Broad Street and 10 Broad Street for 16,000 and 17,100 square feet respectively. Strategic Public Partners leased 15,000 square feet at 88 Broad Street.

Rennovations are underway at both 51 High Street which will be available in January 2012 and 232 N High Street for which the completion date is not finalized.

Two new office projects have been approved for downtown. Nationwide Insurance has been approved for a 200,000 square foot, $26 million building on the corner of Nationwide Avenue and Spring Street. The property could hold 1,000 workers and would help ease the inflow of 1,400 employees the firm is bringing into the CBD. The FBI will anchor Nationwide Realty’s new $10 million project at 425 W. Nationwide Blvd.

NORTH COLUMBUS MARKETThe north submarkets are Dublin, Powell, Polaris, North Central, Worthington, and Westerville. In Worthington, DZ has completed a 34,000 square foot expansion of their datacenter. In other construction news, Daimler announced plans for new construction in Westerville. Daimler and Casto are seeking approval for rezoning of 20.7 acres near Africa Road and Polaris Parkway. The plans call for the construction of a pair of 117,152-square-foot office buildings and develop four retail parcels.

The big story out of Polaris this quarter is JP Morgan Chase leasing 72,588 square foot at 1000 Polaris Parkway. Chase bank employment has swelled recently as the firm has hired aggressively.

Westerville had strong absorption with Credit Union taking 14,000 square feet at 501 Schrock, taking space at 6363 Presidential Gateway, and Stanford Brown University signing a ten-year, 30,000-square-foot deal at 2800 Corporate Exchange Drive.

In Worthington, a portfolio of properties on Busch Boulevard sold at the very close of the third quarter. 6460 Busch Boulevard, 6660 Doubletree Avenue, and 6600 Busch Boulevard sold for $1.5 million, which is roughly $13 per square foot.

WEST MARKETThe west submarkets, are Arlington/Grandview and Hilliard. In Hilliard, Indiana Wesleyan leased 22,422 square feet at 3455 Mill Run Drive. In Grandview, leasing was led by insurance broker Willis Group Holdings, PLC. Willis leased 23,000 square feet under a ten year deal.

SOUTH MARKETThe south submarkets are the Southwest and the Southeast. Very little change occurred in these submarkets as these are among the smallest least populated submarkets.

EAST MARKETThe east submarkets are the East side, Easton, Gahanna/Airport, and New Albany. Construction in New Albany has been steady.

In Easton, McGraw Hill has left 36,000 square feet out of 1 Easton Oval and they may be leaving more space, up to 30,000 square feet. In East, Safe Auto moved their calling center operation out of 3861 Broad Street, leaving 47,000 square feet. Positive leasing was driven by Estate Information Services who took 27,000 square feet of 3435 Stelzer Road.

GREATER COLUMBUS REGION:

Richard B. Schuen SIOR CCIMCEO | Principal | Columbus8800 Lyra DriveSuite # 150Columbus, Ohio 43240TEL +1 614 410 5612

Leslie HobbsMarketing & Research Manager8800 Lyra DriveSuite # 150Columbus, Ohio 43240TEL +1 614 410 5640

Jonathan BadgleyResearch Analyst175 South Third StreetSuite # 285Columbus, Ohio 43201TEL +1 614 437 4495

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• 978.6 million square feet under management

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This document/email has been prepared by Colliers International for advertising purposes. Colliers International statistics and data are audited annually and may result in revisions to previously reported quarterly and final year-end figures. Sources include Columbus Dispatch, Business First, Xceligent, and the Wall Street Journal.

www.colliers.com/columbus

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RESEARCH & FORECAST REPORT | Q3 2011 | OFFICE | GREATER COLUMBUS REGION