OFFICE TRENDS REPORTGREATER COLUMBUS REGION

www.colliers.com/columbus

More Activity but Little GainCOLUMBUS REGION OVERVIEWThe Columbus region posted postive absorption of 32,000 square feet. The largest lease came from Residential Finance at 1 Easton Oval, who leased nearly 40,000 square feet of space. Vacancy increases in the Easton submarket are due to NetJets vacating 103,000 square feet for their move to a 140,000-square-foot, build-to-suit building at the airport.

FORECASTS AND REFLECTIONS• Construction continues in New Albany on a

50,000 square foot office building, which is the first phase of the 150,000 square feet planned. The construction of the FBI-anchored 425 West Nationwide Boulevard in the Arena District continues. The 51,000 square foot building will have 6,000 square feet of speculative space available when completed.

• Construction continues at 10 West Nationwide Blvd. a 200,000 square foot office building, which will house the current Nationwide employees working at 5900 Parkwood Place in Dublin when completed.

• A Class A office and retail space in the Short North is set for construction in the third quarter. The offices at The Joseph, will be 130-unit hotel and office/retail, mixed-use space.

• Construction continues on the parking garage, which is a part of the Columbia Gas-anchored, 240 West Nationwide Blvd. There will be roughly 35,000 square feet of space not leased by Columbia Gas. The Columbia Gas lease at 200 Civic Center Drive does not run out until 2014.m More parking will also be available downtown due to the reconstruction of the parking garage at 425 North Front Street.

ASKING RATES AND CONSTRUCTION

Asking rates have steadily increased throughout the past year. Operating expenses have seen increases as well, which may be affecting asking ratesThere are only 48 spaces available in Columbus larger than 30,000 square feet; seven in the CBD and 41 in the suburban markets. The market will likely see continued increases in asking rental rates, but not

MARKET INDICATORS

RENTAL RATES

Q2

2012

Q3

2012*

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATES

*Projected trend for next quarter

Q2 2012 | OFFICE

$14.00

$15.00

$16.00

$17.00

$18.00

$19.00

$20.00

$21.00

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

Class A Rental Rates Class B

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

(400,000)

(300,000)

(200,000)

(100,000)

0

100,000

200,000

300,000

400,000

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

Completions Absorption Vacancy Rate

ABSORPTION, COMPLETIONS, AND VACANCY RATES

EMPLOYMENT DATAThe preliminary unemployment rate for Columbus in May fell to 6.1 percent from 7.3 percent in January. The unemployment rate from January to May fell each month: 7.2 in February; 6.8 in March; 6.4 in April; and finally, 6.1 in May. In May, Education and Health Services employment grew to 140,100 from 135,500 employees in January. This sector has been very strong this yeae, averaging 7.28 percent higher employment levels compared to the same time last year.

Employment for Financial Activities hung between 71,400 to 71,800 workers from January to May. Each month has been between 2.3 percent and 2.7 percent higher than Finance employment levels in January through May in 2011. Nationwide Insurance and JP Morgan Chase have been driving this employment growth in 2012.

Professional and Business Services grew steadily from 147,500 employees in January to 154,000 in May. Employment levels in January and February this year were 1.2 and 1.9 percent greater than the same months in 2011. Consistent

employment growth leads to leasing, so these are positive signs.

MARKET ACTIVITYMarket interest increased during the second quarter. Colliers International attempts to track demand for office space by tracking tenants in the market. The average number of tenants in the market has increased slightly in second quarter 2012 than in first quarter 2012, 73 to 76. However, there are fewer tenants seeking large spaces than last quarter. 14 tenants are looking for more than 25,000 square feet, and there are 23 tenants looking for 10,000 up to 25,000 square feet of space.

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 888,000 square feet. The market has picked up from first quarter in office leasing, though activity is not as high as it has been in years past when more than 1.3 million square feet on average were in transition.

The Columbus office market consists of 15 suburban submarkets plus the Central Business District submarket. The Columbus region features a total of 63 million square feet, 43.7 million of which is suburban.

MARKET ACTIVITY

SALES ACTIVITY

PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF BUYER SELLER PRICE / SF TYPE SUBMARKET

41 S High Street 6/8/2012 $177,000,000.00 1,112,409 Huntington Center LLC Huntington Center Associates $195.00 A CBD

7800 Walton Parkway 6/4/2012 $13,333,000.00 86,312 CVG12 New Albany OH LLC Walton 605 LLC $154.47 A New Albany

2231 Schrock Road 4/25/2012 $4,700,000.00 41,656 Cole of Columbus Ohio Schrock Office Realty $112.82 B Worthington

570 Metro Place 6/26/2012 $2,100,000.00 32,000 Investment Grade Loan, Inc. 570 Metro Place North LP $61.35 B Dublin

3592 Corporate Drive 6/28/2012 $4,037,000.00 30,003 NCH12 Columbus OH LLC Omni Columbus One LLC $134.55 B Westerville

1335 Worthington Woods 4/23/2012 $1,200,000.00 24,144 A & J Rentals LLC McLeod Properties LLC $49.70 C Worthington

5957 Cleveland Avenue 5/4/2012 $1,250,000.00 17,911 HIS Property LLC Burton Terence W TR $69.78 B Westerville

81 S 5th Street 4/16/2012 $1,180,000.00 15,000 JEK Management Ltd 81 S 5th St LLC $78.66 C Capitol Square

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 SALES DATE LEASE SF TENANT ASKING PRICE (NNN) TYPE SUBMARKET

1 Easton Oval 6/14/2012 39,866 Residential Finance $12.95 A Easton

4689 Hilton Corporate Drive 4/1/2012 20,000 Connections Education $10.00 B East

5747 Perimeter Drive 5/22/2012 15,118 University of Dayton $8.95 B Dublin

4689 Hilton Corporate Drive 6/26/2012 14,586 National Charter School $10.00 B East

6460 Busch Boulevard 5/9/2012 11,897 Learning Never Ends, LLC $11.75 B Worthington

7540 Sawmill Parkway 5/18/2012 11,027 Childrens of America $14.00 B Powell

2400 Corporate Exchange Drive 5/1/2012 10,650 Wilkes Broadcast Group $14.50 B Westerville

P. 2 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | Q2 2012 | 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 and C buildings, not owned and fully leased by government are included in the dataset.

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 19,358,350 2,048,195 10.6 48,968 54,622 251,000 - $19.89 $17.09

ARLINGTON/GRANDVIEW 4,752,155 626,851 13.2 44,819 8,105 - $21.36 $15.59

DUBLIN 9,501,878 1,266,673 13.3 (16,401) (54,536) - $18.80 $15.16

EAST 3,691,158 503,935 13.7 19,072 43,883 - $15.66 $14.97

EASTON 2,685,332 283,146 10.5 (116,057) (116,512) - $21.04 $22.00

GAHANNA/AIRPORT 1,262,031 127,404 10.1 3,634 21,910 - $16.99 $16.54

HILLIARD 2,480,456 472,440 19.0 16,784 5,835 - $19.95 $14.73

NEW ALBANY 1,935,789 153,354 7.9 29,274 29,274 50,000 - $18.73 -

NORTH CENTRAL 1,255,636 74,116 5.9 (4,561) (6,813) - - $13.68

POLARIS 4,419,869 267,398 6.0 (11,712) (35,872) - $19.36 $19.13

POWELL 273,719 60,302 22.0 235 (7,645) - - $15.77

SOUTHEAST 402,548 52,818 13.1 (1,250) (2,065) - - -

SOUTHWEST 236,158 43,987 18.6 (137) (6,216) - - $16.95

WESTERVILLE 4,489,479 651,263 14.5 (15,727) 10,852 - $16.31 $15.11

WORTHINGTON 6,296,402 934,215 14.8 35,804 63,215 - $16.88 $14.56

SUBURBAN TOTAL 43,682,610 5,517,902 12.6 (16,223) (46,585) 50,000 - $18.55 $15.10

TOTAL 63,051,662 7,566,097 12.0 32,745 8,037 301,000 0 $19.05 $15.67

Net Absorption Construction Asking Rental Rates

PROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeCLASS A 26,082,781 2,850,863 10.9 (13,512) (20,580) 301,000 - $19.05

CLASS B 23,087,076 3,020,551 13.1 109,978 66,781 - $15.67

CLASS C 13,881,805 1,694,683 12.2 (63,721) (38,164) - $12.71

TOTALS 63,051,662 7,566,097 12.0 32,745 8,037 301,000 - $16.46

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 TypeQ1, 2012 63,040,960 7,598,842 12.1 (22,230) (22,230) 301,000 140,000 $18.79 $15.57

Q4, 2011 63,040,314 7,632,767 12.1 252,351 732,831 190,000 - $18.61 $15.47

Q3, 2011 63,040,314 7,885,118 12.5 284,581 480,480 190,000 - $18.58 $15.41

Q2, 2011 62,900,314 8,169,699 13.0 202,803 195,899 190,000 - $18.25 $15.25

RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGION

COLLIERS INTERNATIONAL | P. 3

CENTRAL BUSINESS DISTRICTThe CBD saw more than 48,000 square feet of positive absorption. Many smaller leases were completed at 65 East State, 130 Chestnut Street, 10 East Broad Street, and 585 Front Street for more than 36,000 square feet of absorption. Large leases included Safe Auto moving into 28,000 square feet at 175 South Third Avenue and Colliers International moving into just less than 11,000 square feet at Two Miranova Place. No significantly sized tenants vacated space.

Nationwide Insurance began construction on their 200,000 square foot facility, where they will house the employees transferring into downtown from 5900 Parkwood Place in Dublin. Nationwide Realty also began construction on a new 51,000-square-foot, $10 million project. Located at 425 W. Nationwide Blvd, the site will be anchored by FBI.

WEST MARKETThe west submarkets are Arlington/Grandview and Hilliard.

The Hilliard submarket saw positive absorption of 16,000 square feet from smaller leases.

Arlington/Grandview saw more than 44,000 square feet of positive absorption. The Boy Scouts of America leased 28,000 square feet at 807 Kinnear Road.

NORTH COLUMBUS MARKETThe north submarkets are Dublin, Powell, Polaris, North Central, Worthington and Westerville.

Dublin saw negative 16,000 square feet of space on the back of PICS Photoscan vacating 43,000 square feet at 4150 Tuller Road and Century Link vacating 22,800 square feet at 6000 Parkwood Place. Positive absorption came from Wendy’s leasing 28,000 square feet at 5555 Parkcenter Circle, University of Dayton leasing 15,000 square feet at 5747 Perimeter Drive and Maguire & Schneider leasing 7,000 square feet at 555 Metro Place.

Powell and North Central saw very little change. Polaris and Westerville saw slight negative absorption from multiple smaller vacancies.

Worthington had 35,000 square feet of absorption. Two notable leases were Learning

Never Ends, who leased 11,000 square feet at 6460 Busch Boulevard and Flairsoft, who leased 7,000 square feet at 7720 Rivers Edge Drive.

SOUTH MARKETThe south submarkets are the Southwest and the Southeast.

Very little change occurred in these submarkets as these are among the smallest submarkets, with little significant office space.

EAST MARKETThe east submarkets are the East side, Easton, Gahanna/Airport and New Albany.

The East submarket saw 19,000 square feet of positive absorption from a national charter school leasing 20,000 square feet of negative absorption at 4689 Hilton Corporate Drive.

The Easton submarket lost 116,000 square feet this quarter with strong activity. Net Jets vacated 103,000 square feet at 4349 Easton Way and McGraw Hill vacated 67,000 square feet at 4400 Easton Commons. Positive absorption came from Residential Finance leasing 39,000 square feet at 1 Easton Oval and Abbott Labs leasing 9,000 square feet at 3435 Stelzer Road.

New Albany saw 29,000 square feet of positive absorption from Healthscape, leasing more than 11,000 square feet at 5150 Dublin-Granville Road, and Auto Owners and Maxwell Financial leased space at 6530 Campus Oval for a total of 7,000 square feet.

LANDLORD/TENANT The types of tenants most seen in the market recently have been medical, call centers, higher education, and banking. Tenants have heard so much negativity from the media about the market that deals are extremely difficult to get done because tenants .are hesitant to close deals out of the fear of getting locked in at a bad rate.

The largest issue facing landlords is creating a steady cashflow, especially for landlords who want to renegotiate their debt. Landlords are also challenged to get good financial analysis of tenants to understand tenant’s viability, as well as the tenant credit risk with significant cost for improvements when required.

GREATER COLUMBUS REGION:

Richard B. Schuen SIOR CCIMCEO | Principal | Columbus2 MiranovaSuite 900Columbus, Ohio 43215TEL +1 614 410 5612

Leslie HobbsDirector of Marketing | Ohio2 MiranovaSuite 900Columbus, Ohio 43215TEL +1 614 410 5640

Jonathan SchuenResearch Analyst2 MiranovaSuite 900Columbus, Ohio 43215TEL +1 614 437 4495

522 offices in 62 countries on 6 continentsUnited States: 147Canada: 37Latin America: 19Asia Pacific: 201EMEA: 118

• $1.8 billion in annual revenue

• 1.25 billion square feet under management

• Over 12,300 professionals

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, CoStar, Chain Store Age, Wall Street Journal, Bureau of Labor Statistics,

www.colliers.com/columbus

Accelerating success.

RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGION