2nd Quarter 2017

This Richardson/East Plano Sub-Market covers the I-75 corridor from Walnut Street to Hedgcoxe Road and includes central Plano up to Sam Rayburn Tollway to the North until Alma Road when it drops down to Hedgecoxe Road and Coit Road to the West. The included statistics cover Class A and B office buildings that have more than 50,000 square feet and are either under construction or existing. With more large companies looking to relocate and consolidate to the Dallas suburbs, the Richardson/East Plano Sub-Market provides a value option with several large blocks of space still available. The Richardson/East Plano Sub-Market has shown a decrease in the direct Class A vacancy from 24.4% in the first quarter of 2016 to 23.2% at the beginning of the first quarter of 2017. Meanwhile, direct weighted average full-service rents increased from $26.64 to $27.59 per square foot during the same time. Class A net absorption in the past twelve months sits at negative 151,181 square feet. Class B vacancy remained relatively stable and sits at 14.7% with full-service rental rates increased from $18.86 per square foot to $19.70 per square foot.

TOTAL NET ABSORPTION (through Q1)

DELIVERED (through Q1)

2017 -154,765 SF 2017 0 SF

2016 511,144 SF 2016 808,893 SF

DIRECT FULL SERVICE RENTAL RATE (Q1)

DIRECT VACANCY (Q1)

2017 $24.57 PSF 2017 19.3%

2016 $23.50 PSF 2016 20.4%

DIRECT VACANCY BY CLASS (Q1)

Class A 23.2% Class B 14.7%

Advisory Experience

Andy Goldston Advisor

agoldston@citadelpartnersus.com 214-420-3168

2nd QUARTER INSIGHT Richardson/East Plano

Advisory Experience

Maxim – 700,000 SF

The Domain, Austin, TX – 70 Acres Weaver – 58,000 SF

Knoll Trail Plaza – 120,000 SF Build-to-Suit

Weaver – 171,000 SF Multi-market Texas Instruments – 1,200,000 SF

Invensys – 45,000 SF Sublease

Texas Instruments – 70.537 Acres with a 441,362 SF Semiconductor

Flextronics – 1,500,000 SF

ESI – 70,000 SF

TECHNOLOGY LEASE

MULTIPLE TRANSACTIONS

DISPOSITION

ADAPTIVE REUSE OFFICE LEASE

This document has been prepared by Citadel Partners, LLC. for advertising and general information only. Citadel Partners, LL C. makes no guarantees, representations or warranties of any kind, expressed or implied,

regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Citadel Partners, LLC.

excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This

publication is the copyrighted property of Citadel Partners, LLC. and/or their licensor(s). All rights reserved.

Sub-Market Momentum & Forecast

The East Plano/Richardson Submarket is looking better and better to many companies that have lease terms coming up in “hot” markets such as Legacy and North Central Expressway. Richardson still provides value options in a North Texas market that doesn’t provide many opportunities for companies that don’t want to pay the historically high rental rates that they face in a renewal. With that said, Richardson still faces a surplus of large blocks of space. In fact, the submarket has sixteen blocks of space that have 100,000 square feet of availability. Every time a large consolidation or relocation occurs in East Plano/Richardson, it seems like another large block comes available. As a result, we expect lease rates to stabilize over the next twelve months until at least a few of these large blocks are absorbed. Despite the value option that the submarket provides, there are only so many large tenants out there and landlords will have no choice but to consider breaking their large blocks for smaller tenants.

Office Sub-Market Highlights

Office Sub-Market Momentum & Forecast East Plano/Richardson News

Total Office Sub-Market Q1 Statistics

2017 SUB-MARKET HIGHLIGHTS

Lease Rates – Full Service (All Classes)

citadelpartnersus.com

Top New Leases Tenant Square Feet Campbell Commons Qorvo 114,247 Galatyn Commons Service King 64,916 Plano Corporate Center East Penny Mac Financial Services 75,825 Plano Corporate Center East Fresnius Medical Care 52,406 Deliveries Delivery Date Square Feet State Farm Campus – Bldg D 2016 Q1 499,992 Alcatel Lucent Regional HQ 2016 Q3 250,000 Construction Delivery Date Square Feet 3400 Cityline 2017 Q2 300,000 APCON 2016 Q4 58,901

Absorption / Deliveries / Vacancy (All Classes)

Hall Group’s new Richardson campus to include a 1.5-acre oasis Dallas developer Craig Hall, in a partnership with Leon Capital Group, has plans to up the residential density of a new Richardson mixed-use development, which is expected to have a 1.5-acre oasis of a park in the project.

The proposed mixed-use development, known as Hall Park at Richardson, could transform a nearly 30-acre tract of undeveloped land at the southwest corner of Custer Parkway and the President George Bush Turnpike near State Farm Insurance's regional hub into a high-density destination.

The development plans include the partnership building: • Two, five-story office buildings totaling 300,000 square

feet of space • Seven, three-story apartment buildings totaling 417

apartments • A parking garage • A single-story, 10,000-square-foot retail shop

To help build density, Hall will incorporate more green space into the mixed-use development, such as this 1.5-acre park.

In all, Hall Park at Richardson would include 8.9 acres of landscaping using hardscape materials and planted areas — or roughly 30 percent of the entire development tract.

The landscaping would also include a 1.5-acre oasis of a park, which, much like Dallas' Klyde Warren Park, would bring an outdoor destination to Richardson residents.

Dallas Business Journal 4.20.17

Market

Existing Inventory Vacancy YTD Net Absorption

YTD Deliveries Under Const SF

Quoted Rates # Blds Total RBA Direct SF Total SF Vac %

Central Expressway 274 15,154,527 1,492,884 1,536,314 10.1% (35,134) 0 0 $26.88

Dallas CBD 141 33,581,393 7,261,660 7,548,836 22.5% (119,988) 0 353,637 $25.67

East Dallas 1,125 13,763,001 1,437,693 1,452,788 10.6% (96,264) 6,500 293,921 $23.44

Far North Dallas 1,064 57,743,297 7,214,614 7,780,797 13.5% 805,683 969,249 6,443,100 $27.55

Ft Worth CBD 117 11,806,524 1,187,695 1,221,051 10.3% 19,837 0 280,489 $25.05

Las Colinas 430 39,587,092 4,981,291 5,315,014 13.4% 1,050,369 679,183 987,395 $24.09

LBJ Freeway 265 22,596,714 4,832,087 5,049,104 22.3% (233,145) 0 0 $22.00

Lewisville/Denton 900 12,977,935 888,821 973,365 7.5% (40,650) 30,648 167,104 $22.16

Mid-Cities 2,551 40,406,416 4,842,159 5,018,350 12.4% (73,920) 193,573 892,627 $21.71

North Fort Worth 564 6,551,118 344,778 406,166 6.2% 23,631 34,320 42,003 $20.62

Northeast Ft Worth 337 5,400,765 1,815,846 1,840,861 34.1% 100,610 0 0 $19.18

Preston Center 146 5,885,416 469,283 496,199 8.4% (10,633) 0 183,589 $36.24

Richardson/Plano 1,343 40,835,578 5,991,012 6,122,063 15.0% (21,135) 72,270 812,701 $24.20

South Ft Worth 1,611 19,742,816 1,485,516 1,572,504 8.0% 47,594 191,382 66,236 $23.09

Southwest Dallas 791 7,231,323 561,660 565,160 7.8% 36,928 0 6,300 $17.28

Stemmons Freeway 282 14,945,132 3,406,183 3,489,313 23.3% (103,808) 0 72,630 $15.78

Uptown/Turtle Creek 295 14,664,921 1,442,603 1,534,125 10.5% 175,528 200,000 1,295,323 $37.46

Totals 12,236 362,873,968 49,655,785 51,922,010 14.3% 1,525,503 2,377,125 11,897,055 $24.52

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

22.00%

24.00%

-1000000

-500000

0

500000

1000000

1500000

2006 2008 2010 2012 2014 2016 Q12017

Total Net Absorption RBA Delivered Direct Vacant %

$15.00

$17.00

$19.00

$21.00

$23.00

$25.00

$27.00

2006 2008 2010 2012 2014 2016 Q12017

Sub-Market Momentum & Forecast

The East Plano/Richardson Submarket is looking better and better to many companies that have lease terms coming up in “hot” markets such as Legacy and North Central Expressway. Richardson still provides value options in a North Texas market that doesn’t provide many opportunities for companies that don’t want to pay the historically high rental rates that they face in a renewal. With that said, Richardson still faces a surplus of large blocks of space. In fact, the submarket has sixteen blocks of space that have 100,000 square feet of availability. Every time a large consolidation or relocation occurs in East Plano/Richardson, it seems like another large block comes available. As a result, we expect lease rates to stabilize over the next twelve months until at least a few of these large blocks are absorbed. Despite the value option that the submarket provides, there are only so many large tenants out there and landlords will have no choice but to consider breaking their large blocks for smaller tenants.

Office Sub-Market Highlights

Office Sub-Market Momentum & Forecast East Plano/Richardson News

Total Office Sub-Market Q1 Statistics

2017 SUB-MARKET HIGHLIGHTS

Lease Rates – Full Service (All Classes)

citadelpartnersus.com

Top New Leases Tenant Square Feet Campbell Commons Qorvo 114,247 Galatyn Commons Service King 64,916 Plano Corporate Center East Penny Mac Financial Services 75,825 Plano Corporate Center East Fresnius Medical Care 52,406 Deliveries Delivery Date Square Feet State Farm Campus – Bldg D 2016 Q1 499,992 Alcatel Lucent Regional HQ 2016 Q3 250,000 Construction Delivery Date Square Feet 3400 Cityline 2017 Q2 300,000 APCON 2016 Q4 58,901

Absorption / Deliveries / Vacancy (All Classes)

Hall Group’s new Richardson campus to include a 1.5-acre oasis Dallas developer Craig Hall, in a partnership with Leon Capital Group, has plans to up the residential density of a new Richardson mixed-use development, which is expected to have a 1.5-acre oasis of a park in the project.

The proposed mixed-use development, known as Hall Park at Richardson, could transform a nearly 30-acre tract of undeveloped land at the southwest corner of Custer Parkway and the President George Bush Turnpike near State Farm Insurance's regional hub into a high-density destination.

The development plans include the partnership building: • Two, five-story office buildings totaling 300,000 square

feet of space • Seven, three-story apartment buildings totaling 417

apartments • A parking garage • A single-story, 10,000-square-foot retail shop

To help build density, Hall will incorporate more green space into the mixed-use development, such as this 1.5-acre park.

In all, Hall Park at Richardson would include 8.9 acres of landscaping using hardscape materials and planted areas — or roughly 30 percent of the entire development tract.

The landscaping would also include a 1.5-acre oasis of a park, which, much like Dallas' Klyde Warren Park, would bring an outdoor destination to Richardson residents.

Dallas Business Journal 4.20.17

Market

Existing Inventory Vacancy YTD Net Absorption

YTD Deliveries Under Const SF

Quoted Rates # Blds Total RBA Direct SF Total SF Vac %

Central Expressway 274 15,154,527 1,492,884 1,536,314 10.1% (35,134) 0 0 $26.88

Dallas CBD 141 33,581,393 7,261,660 7,548,836 22.5% (119,988) 0 353,637 $25.67

East Dallas 1,125 13,763,001 1,437,693 1,452,788 10.6% (96,264) 6,500 293,921 $23.44

Far North Dallas 1,064 57,743,297 7,214,614 7,780,797 13.5% 805,683 969,249 6,443,100 $27.55

Ft Worth CBD 117 11,806,524 1,187,695 1,221,051 10.3% 19,837 0 280,489 $25.05

Las Colinas 430 39,587,092 4,981,291 5,315,014 13.4% 1,050,369 679,183 987,395 $24.09

LBJ Freeway 265 22,596,714 4,832,087 5,049,104 22.3% (233,145) 0 0 $22.00

Lewisville/Denton 900 12,977,935 888,821 973,365 7.5% (40,650) 30,648 167,104 $22.16

Mid-Cities 2,551 40,406,416 4,842,159 5,018,350 12.4% (73,920) 193,573 892,627 $21.71

North Fort Worth 564 6,551,118 344,778 406,166 6.2% 23,631 34,320 42,003 $20.62

Northeast Ft Worth 337 5,400,765 1,815,846 1,840,861 34.1% 100,610 0 0 $19.18

Preston Center 146 5,885,416 469,283 496,199 8.4% (10,633) 0 183,589 $36.24

Richardson/Plano 1,343 40,835,578 5,991,012 6,122,063 15.0% (21,135) 72,270 812,701 $24.20

South Ft Worth 1,611 19,742,816 1,485,516 1,572,504 8.0% 47,594 191,382 66,236 $23.09

Southwest Dallas 791 7,231,323 561,660 565,160 7.8% 36,928 0 6,300 $17.28

Stemmons Freeway 282 14,945,132 3,406,183 3,489,313 23.3% (103,808) 0 72,630 $15.78

Uptown/Turtle Creek 295 14,664,921 1,442,603 1,534,125 10.5% 175,528 200,000 1,295,323 $37.46

Totals 12,236 362,873,968 49,655,785 51,922,010 14.3% 1,525,503 2,377,125 11,897,055 $24.52

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

22.00%

24.00%

-1000000

-500000

0

500000

1000000

1500000

2006 2008 2010 2012 2014 2016 Q12017

Total Net Absorption RBA Delivered Direct Vacant %

$15.00

$17.00

$19.00

$21.00

$23.00

$25.00

$27.00

2006 2008 2010 2012 2014 2016 Q12017

2nd Quarter 2017

This Richardson/East Plano Sub-Market covers the I-75 corridor from Walnut Street to Hedgcoxe Road and includes central Plano up to Sam Rayburn Tollway to the North until Alma Road when it drops down to Hedgecoxe Road and Coit Road to the West. The included statistics cover Class A and B office buildings that have more than 50,000 square feet and are either under construction or existing. With more large companies looking to relocate and consolidate to the Dallas suburbs, the Richardson/East Plano Sub-Market provides a value option with several large blocks of space still available. The Richardson/East Plano Sub-Market has shown a decrease in the direct Class A vacancy from 24.4% in the first quarter of 2016 to 23.2% at the beginning of the first quarter of 2017. Meanwhile, direct weighted average full-service rents increased from $26.64 to $27.59 per square foot during the same time. Class A net absorption in the past twelve months sits at negative 151,181 square feet. Class B vacancy remained relatively stable and sits at 14.7% with full-service rental rates increased from $18.86 per square foot to $19.70 per square foot.

TOTAL NET ABSORPTION (through Q1)

DELIVERED (through Q1)

2017 -154,765 SF 2017 0 SF

2016 511,144 SF 2016 808,893 SF

DIRECT FULL SERVICE RENTAL RATE (Q1)

DIRECT VACANCY (Q1)

2017 $24.57 PSF 2017 19.3%

2016 $23.50 PSF 2016 20.4%

DIRECT VACANCY BY CLASS (Q1)

Class A 23.2% Class B 14.7%

Advisory Experience

Andy Goldston Advisor

agoldston@citadelpartnersus.com 214-420-3168

2nd QUARTER INSIGHT Richardson/East Plano

Advisory Experience

Maxim – 700,000 SF

The Domain, Austin, TX – 70 Acres Weaver – 58,000 SF

Knoll Trail Plaza – 120,000 SF Build-to-Suit

Weaver – 171,000 SF Multi-market Texas Instruments – 1,200,000 SF

Invensys – 45,000 SF Sublease

Texas Instruments – 70.537 Acres with a 441,362 SF Semiconductor

Flextronics – 1,500,000 SF

ESI – 70,000 SF

TECHNOLOGY LEASE

MULTIPLE TRANSACTIONS

DISPOSITION

ADAPTIVE REUSE OFFICE LEASE

This document has been prepared by Citadel Partners, LLC. for advertising and general information only. Citadel Partners, LL C. makes no guarantees, representations or warranties of any kind, expressed or implied,

regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Citadel Partners, LLC.

excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This

publication is the copyrighted property of Citadel Partners, LLC. and/or their licensor(s). All rights reserved.