Mill

ion

Squa

reFe

et

05

10

15

20

25

13.0%

15.0%

Q1 2009Q4 2008Q3 2008Q2 2008Q1 2008

-1.3

13.0

17.4

-1.6

13.3

19.4

-2.2

13.5

20.3

-11.4

13.8

18.6

-26.7

14.8

15.4

Absorption Completions Vacancy

-5

14.0%

-20

-10

-30

MARKET INDICATORS

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

* Projected, relativeto prior period

Q12009

Q22009*

U.S. OFFICE MARKETSUMMARY STATISTICSFIRST QUARTER 2009

COLLIERS INTERNATIONAL 1

www.colliers.com

HighlightsC O L L I E R S I N T E R N AT I O N A L | N O RT H A M E R I C A

U.S. OFFICE MARKET Q1 2008 Q1 2009

Vacancy Rate Q1 2009 (Change fromQ4 2008): 14.75% (+0.95)

Absorption Q1 2009(Million Square Feet): -26.7

New Construction CompletionsQ1 2009 (Million Square Feet): 15.4

Under Construction Activity(Million Square Feet): 83.8

Asking Rents Per Square Foot(Change from Q4 2008) Downtown Class A: $43.36 (-5.5%) Suburban Class A: $27.69 (-1.4%)

Tenant InducementsPer Square Foot/Free Rent (Months) Downtown Class A: $29.63 (4.3)

(Continued on page 6)

Colliers International 2009 Colliers International is a worldwide affiliation of independently owned and operated companies.

U.S. Office Space Market Posts Weakest Quarter Since Q3 2001For the fifth consecutive quarter tenants returned more space to the market than they leasedhelping to push the national vacancy rate up for the sixth consecutive three month period.A modest supply of office development also came on the market during the first quarter againhelping to put upward pressure on the national vacancy rate. Rents accelerated downward aslandlords had no choice but to lower lease rates to attract new tenants and keep occupancies fromdeclining any further. This was more apparent in downtown markets but suburban rents alsomoved lower. While the economy may bottom sometime in the third quarter the prospects for theoffice market are not encouraging until well into 2010 or perhaps 2011. Almost every region of thecountry is reporting weak economic growth with heavy job losses expected for the nextfew months and little hope of employment gains until early 2010. Weakness that was largelyrestricted to the financial services and housing sector has now spread to the economy at largewith very few industries considering expansion or new hiring. With such an uncertain businessenvironment the office space market will remain extremely weak through to the end of 2009.

U.S. office vacancy rate posts sixth consecutive increase. The US national office vacancyrate moved substantially higher during the first quarter marking the sixth consecutive increase.Aided by sublease space increasing by 7.5 million square feet (MSF) to total 81.6 MSF theoverall vacancy rate increased 95 basis points to register 14.75%. Vacancy levels have nowreturned to Q2 2005 levels. The Downtown vacancy rate increased 87 basis points to register12.79% while suburban vacancies increased 98 basis points to total 15.67%. Class A vacancy ratesalso moved higher with prime CBD vacancies rising 93 basis points to 12.28% compared withsuburban vacancies which increased 108 basis points to 16.45%.

A trickle turns into a flood as tenants seek to reduce their space needs. First quarterabsorption was again negative with occupied space contracting by 26.7 MSF, the fifth consecutivequarterly contraction and significantly worse than a year ago when absorption was -1.3 MSF andmore than double Q4 when occupied space fell by 11.4 MSF. Companies are now shedding spaceat the quickest pace since Q3 2001 when occupied space shrank by 28.0 MSF. Highlighting thewidespread nature of the current downturn, CBD and suburban markets were equally affected aswere prime and non-prime office properties.

O F F I C E | F I R S T Q UA RT E R | 2 0 0 9

EXISTING NEW UNDER ABSORPTION VACANCY VACANCYINVENTORY (SF) SUPPLY Q1 CONSTRUCTION Q1 2009 RATE (%) RATE (%)

MARKET MARCH 31, 2009 2009 (SF) (SF) (SF) DEC. 31, 2008 MARCH 31, 2009

2 COLLIERS INTERNATIONAL

DOWNTOWN OFFICE ALL INVENTORYUNITED STATES

Atlanta, GA 55,688,000 0 1,260,000 63,000 13.40 13.28Bakersfield, CA 2,926,000 0 0 (9,000) 6.34 6.54Baltimore, MD 19,471,000 0 803,000 (70,000) 17.38 17.74Boise, ID 3,470,000 0 0 (13,000) 9.52 9.90Boston, MA 57,591,000 0 1,544,000 (580,000) 10.51 11.52Charleston, SC 2,064,000 0 0 (28,000) 6.60 7.96Charlotte, NC 19,023,000 0 2,817,000 (204,000) 2.56 4.06Chicago, IL 130,460,000 1,350,000 2,303,000 (507,000) 12.69 13.98Cincinnati, OH 12,707,000 0 825,000 (3,000) 17.32 17.43Cleveland, OH 30,081,000 0 0 (76,000) 16.30 16.42Columbia, SC 4,460,000 0 190,000 (45,000) 12.53 13.54Columbus, OH 9,673,000 0 195,000 (36,000) 13.06 14.81Dallas/Fort Worth,TX 35,365,000 0 0 317,000 20.59 19.70Denver, CO 26,608,000 0 496,000 (266,000) 14.12 15.11Detroit, MI 29,744,000 0 0 (57,000) 16.12 16.43Fresno, CA 3,206,000 114,000 0 28,000 8.34 10.72Ft. Lauderdale/Broward County, FL 6,122,000 0 0 (14,000) 14.87 15.10Greenville, SC 3,144,000 0 60,000 0 23.79 23.79Hartford, CT 10,096,000 0 0 (205,000) 14.86 16.25Honolulu, HI 15,706,000 0 0 (849,000) 5.04 5.65Houston,TX 37,422,000 0 1,817,000 (171,000) 12.44 12.90Indianapolis, IN 11,559,000 0 0 17,000 14.90 14.77Jacksonville, FL 12,878,000 0 0 (13,000) 10.80 10.90Kansas City MO-KS 11,285,000 44,000 0 17,000 20.38 20.53Las Vegas, NV 3,369,000 0 0 (82,000) 8.94 10.29Little Rock,AR 6,280,000 23,000 0 24,000 11.71 11.56Los Angeles, CA 31,409,000 0 0 46,000 14.90 14.99Louisville, KY 10,105,000 0 0 (32,000) 7.57 7.88Memphis,TN 8,451,000 0 0 (50,000) 11.92 12.52Miami/Dade County, FL 15,165,000 0 1,982,000 (50,000) 14.76 15.09Milwaukee,WI 10,629,000 0 0 (192,000) 17.54 18.62Minneapolis/St. Paul, MN 24,422,000 0 0 (15,000) 15.78 15.85Nashville,TN 7,524,000 75,000 520,000 (50,000) 15.80 17.30New York, NY - DT Manhattan 89,744,000 0 4,600,000 (3,000) 10.21 10.22New York, NY - MT Manhattan 257,412,000 2,102,000 1,438,000 (3,596,000) 10.14 12.44New York, NY - MTS Manhattan 98,339,000 0 315,000 (1,647,000) 11.38 13.06Oakland, CA 16,913,000 0 172,000 (47,000) 11.12 10.99Orlando, FL 11,611,000 0 10,000 (130,000) 13.84 15.10Philadelphia, PA 41,978,000 0 0 (304,000) 9.25 9.97Phoenix,AZ 19,972,000 0 1,030,000 (161,000) 13.80 14.62Pleasanton/Walnut Creek, CA 22,370,000 0 0 (831,000) 17.33 19.34Portland, OR 32,824,000 124,000 908,000 (99,000) 7.32 8.09Raleigh/Durham/Chapel Hill, NC 3,712,000 (26,000) 24,000 (27,000) 8.39 8.80Reno, NV 1,318,000 0 0 (12,000) 21.01 21.96Sacramento, CA 18,680,000 0 434,000 92,000 8.46 7.96San Diego County, CA 10,100,000 0 40,000 21,000 15.34 15.13San Francisco, CA 82,895,000 0 468,000 554,000 12.55 13.22San Jose/Silicon Valley, CA 7,275,000 0 300,000 (164,000) 21.09 20.47Santa Rosa/Sonoma County, CA 1,070,000 0 0 (18,000) 10.72 12.42Seattle/Puget Sound,WA 57,644,000 31,000 4,797,000 (641,000) 9.03 9.28St. Louis, MO 11,401,000 0 0 24,000 21.59 21.38Stockton/San Joaquin County, CA 7,272,000 0 30,000 (33,000) 18.56 19.02Tampa, FL 8,508,000 0 0 (64,000) 14.68 15.43Washington, DC 114,200,000 908,000 8,446,000 174,000 7.84 8.27W. Palm Beach/Palm Beach County, FL 8,847,000 0 0 (17,000) 18.91 19.11Total US 1,592,187,000 4,744,000 37,826,000 (10,034,000) 11.93 12.79

COLLIERS INTERNATIONAL 3

DOWNTOWN OFFICE CLASS AUNITED STATES

EXISTING ABSORPTION VACANCY VACANCY AVERAGE ANNUAL QUARTERLY ANNUALINVENTORY (SF) Q1 2009 RATE (%) RATE (%) QUOTED RENT (US$PSF) CHANGE CHANGE

MARKET MARCH 31, 2009 (SF) DEC. 31, 2008 MARCH 31, 2009 MARCH 31, 2009 (%) (%)

Atlanta, GA 30,293,000 27,000 17.64 17.56 22.60 (1.35) 1.75Bakersfield, CA 670,000 0 5.03 5.25 17.40 0.00 0.00Baltimore, MD 9,204,000 (87,000) 15.61 16.56 25.20 4.31 4.31Boise, ID 2,038,000 2,000 4.65 4.56 20.70 3.92 7.76Boston, MA 39,352,000 (393,000) 9.96 10.96 52.40 (15.32) (13.64)Charleston, SC 1,031,000 5,000 6.44 5.90 30.00 7.14 8.11Charlotte, NC 13,179,000 (157,000) 1.39 3.30 30.70 (4.53) 6.11Chicago, IL 71,229,000 515,000 12.18 13.12 37.00 (5.13) (7.50)Cincinnati, OH 5,869,000 (5,000) 14.12 14.30 23.50 (0.34) 0.13Cleveland, OH 8,932,000 (164,000) 11.70 13.54 20.60 3.62 3.57Columbia, SC 1,896,000 (25,000) 8.15 9.47 20.40 0.00 2.61Columbus, OH 4,308,000 (5,000) 11.86 13.19 23.00 0.66 3.09Dallas/Fort Worth,TX 22,524,000 313,000 22.23 20.85 25.80 (0.96) (0.96)Denver, CO 17,328,000 (229,000) 13.28 14.60 32.00 (5.88) 7.93Detroit, MI 11,619,000 (25,000) 13.26 13.47 22.50 0.72 (9.89)Fresno, CA 1,039,000 (2,000) 4.01 12.47 25.80 (2.27) (6.52)Ft. Lauderdale/Broward County, FL 4,549,000 83,000 18.34 16.51 32.00 (1.81) (2.56)Greenville, SC 1,794,000 0 17.61 17.61 21.90 0.00 21.78Hartford, CT 6,337,000 (205,000) 13.26 15.47 23.80 0.00 (0.17)Honolulu, HI 4,700,000 (18,000) 10.93 11.31 37.50 0.37 2.91Houston,TX 27,510,000 (131,000) 8.12 8.59 38.90 1.20 0.93Indianapolis, IN 6,504,000 (18,000) 17.56 17.80 20.30 (1.51) 4.01Jacksonville, FL 6,602,000 73,000 14.40 13.30 21.00 0.00 5.00Kansas City MO-KS 6,115,000 (24,000) 17.43 17.83 20.20 0.95 (1.94)Las Vegas, NV 700,000 0 15.06 10.54 39.30 0.00 (0.88)Little Rock,AR 2,191,000 155,000 15.87 8.53 16.40 3.81 3.81Los Angeles, CA 14,715,000 27,000 13.20 13.53 39.10 4.15 (2.10)Louisville, KY 2,857,000 (4,000) 8.68 8.84 20.70 (3.50) 5.95Memphis,TN 1,901,000 (62,000) 20.42 23.69 16.80 (0.18) (0.30)Miami/Dade County, FL 7,702,000 (90,000) 10.70 11.87 42.70 (3.20) (0.02)Milwaukee,WI 5,323,000 30,000 12.56 12.00 22.00 0.00 0.00Minneapolis/St. Paul, MN 1,661,000 32,000 101.94 100.00 27.80 2.54 5.14Nashville,TN 3,943,000 (31,000) 15.64 18.04 19.50 0.15 (4.94)New York, NY - DT Manhattan 55,574,000 79,000 7.69 7.54 49.70 (12.17) (14.40)New York, NY - MT Manhattan 162,663,000 (1,855,000) 9.85 12.16 74.80 (8.88) (22.51)New York, NY - MTS Manhattan 14,176,000 (281,000) 5.80 7.78 52.30 (11.87) (15.32)Oakland, CA 9,843,000 (35,000) 6.93 7.28 27.20 (19.79) (19.50)Orlando, FL 5,681,000 (55,000) 17.14 18.11 27.90 (1.55) (2.14)Philadelphia, PA 30,929,000 (314,000) 8.34 9.36 25.70 0.31 (34.27)Phoenix,AZ 9,547,000 (60,000) 12.81 13.43 30.40 (2.41) 0.07Pleasanton/Walnut Creek, CA 12,991,000 (495,000) 17.18 18.67 27.40 0.00 (2.15)Portland, OR 13,611,000 (3,000) 5.43 6.40 25.30 (0.20) 3.35Raleigh/Durham/Chapel Hill, NC 2,704,000 (5,000) 7.00 7.17 23.20 0.65 6.78Reno, NV 548,000 (11,000) 14.59 16.66 22.90 0.00 0.00Sacramento, CA 8,220,000 93,000 6.73 5.60 34.30 0.35 (3.70)San Diego County, CA 6,977,000 1,000 16.34 16.33 33.80 (1.74) (5.37)San Francisco, CA 51,965,000 399,000 12.06 12.83 39.50 (8.35) (24.29)San Jose/Silicon Valley, CA 3,047,000 (105,000) 23.59 25.08 40.30 (1.18) 13.83Santa Rosa/Sonoma County, CA 369,000 1,000 12.65 12.40 23.40 3.17 (3.47)Seattle/Puget Sound,WA 28,475,000 (475,000) 9.34 11.00 34.50 7.21 (4.28)St. Louis, MO 6,843,000 24,000 21.64 21.29 20.60 0.00 0.00Stockton/San Joaquin County, CA 2,557,000 (62,000) 24.83 27.25 20.20 (2.33) 7.01Tampa, FL 4,795,000 (52,000) 15.95 17.04 23.40 3.95 (0.81)Washington, DC 72,917,000 (241,000) 8.36 8.95 50.20 0.10 (1.18)W. Palm Beach/Palm Beach County, FL 3,313,000 3,000 21.40 21.32 39.70 (1.07) 1.15Total US 853,359,000 (3,866,000) 11.35 12.28 43.40 (Weighted) (5.47) (13.03)

29.70 (Equal) (2.46) (4.03)

EXISTING NEW UNDER ABSORPTION VACANCY VACANCYINVENTORY (SF) SUPPLY Q1 CONSTRUCTION Q1 2009 RATE (%) RATE (%)

MARKET MARCH 31, 2009 2009 (SF) (SF) (SF) DEC. 31, 2008 MARCH 31, 2009

4 COLLIERS INTERNATIONAL

SUBURBAN OFFICE ALL INVENTORYUNITED STATES

Atlanta, GA 179,044,000 195,000 2,706,000 (154,000) 15.59 15.71Bakersfield, CA 5,876,000 104,000 48,000 63,000 9.15 10.64Baltimore, MD 48,430,000 25,000 1,387,000 (1,057,000) 16.55 18.77Boise, ID 10,337,000 29,000 278,000 (93,000) 15.94 17.08Boston, MA 100,011,000 244,000 651,000 (784,000) 14.78 17.81Charleston, SC 7,910,000 0 0 98,000 21.20 19.96Charlotte, NC 54,501,000 132,000 162,000 (167,000) 13.38 14.76Chicago, IL 105,846,000 0 280,000 (872,000) 20.93 21.76Cincinnati, OH 19,336,000 50,000 884,000 (113,000) 21.73 22.50Cleveland, OH 71,557,000 39,000 212,000 (89,000) 9.90 9.98Columbia, SC 4,816,000 0 0 0 17.83 17.83Columbus, OH 16,366,000 0 930,000 19,000 14.28 14.55Dallas/Fort Worth,TX 254,780,000 851,000 3,575,000 847,000 16.03 15.98Denver, CO 129,937,000 468,000 17,000 (558,000) 14.02 14.90Detroit, MI 99,826,000 0 217,000 (407,000) 18.12 18.60Fairfield, CA 3,572,000 0 0 (29,000) 24.50 25.30Fresno, CA 17,591,000 38,000 46,000 (63,000) 13.27 13.81Ft. Lauderdale/Broward County, FL 40,950,000 184,000 435,000 (265,000) 13.72 14.30Greenville, SC 4,328,000 0 0 0 25.94 25.94Hartford, CT 14,325,000 0 0 (129,000) 18.55 19.16Honolulu, HI 7,642,000 0 0 (38,000) 7.31 7.81Houston,TX 153,891,000 1,651,000 3,567,000 (1,057,000) 13.65 15.34Indianapolis, IN 19,877,000 44,000 0 (75,000) 20.78 21.74Jacksonville, FL 26,339,000 0 0 (414,000) 14.43 16.00Kansas City MO-KS 35,743,000 106,000 824,000 (177,000) 15.59 16.33Las Vegas, NV 37,246,000 632,000 611,000 (331,000) 21.80 23.60Little Rock,AR 6,803,000 90,000 0 128,000 13.78 11.54Los Angeles - Inland Empire, CA 22,913,000 306,000 455,000 (154,000) 18.40 23.29Los Angeles, CA 195,933,000 501,000 2,124,000 (2,620,000) 10.35 14.46Louisville, KY 9,632,000 0 0 19,000 16.37 16.18Memphis,TN 27,366,000 0 148,000 (10,000) 13.11 13.14Miami/Dade County, FL 51,166,000 778,000 1,655,000 (302,000) 12.42 13.42Milwaukee,WI 17,809,000 0 0 11,000 16.44 16.37Minneapolis/St. Paul, MN 44,113,000 0 430,000 (517,000) 18.71 19.88Nashville,TN 24,826,000 35,000 318,000 (293,000) 10.22 11.55New Jersey - Central 103,965,000 10,000 577,000 228,000 15.50 15.29New Jersey - Northern 158,718,000 0 231,000 253,000 11.32 11.17New York - Fairfield County, CT 57,371,000 0 975,000 (680,000) 16.44 17.62New York - Westchester County, NY 44,229,000 0 0 (424,000) 15.99 16.95Oakland, CA 15,877,000 0 0 (60,000) 16.47 16.86Orange County, CA 77,207,000 0 81,000 (1,121,000) 18.20 19.45Orlando, FL 51,536,000 316,000 929,000 (229,000) 13.62 14.37Philadelphia, PA 108,763,000 83,000 1,298,000 386,000 15.43 15.14Phoenix,AZ 106,004,000 795,000 1,768,000 (337,000) 20.04 20.99Pleasanton/Walnut Creek, CA 17,865,000 0 0 (798,000) 14.04 14.41Portland, OR 41,990,000 20,000 548,000 (270,000) 10.33 11.00Raleigh/Durham/Chapel Hill, NC 40,726,000 (183,000) 824,000 (371,000) 16.99 18.97Reno, NV 5,349,000 0 0 (101,000) 18.56 21.12Sacramento, CA 68,747,000 431,000 1,280,000 (399,000) 15.76 16.87San Diego County, CA 66,225,000 421,000 913,000 (268,000) 17.38 18.16San Francisco Peninsula, CA 33,347,000 198,000 0 (603,000) 16.12 18.42San Jose/Silicon Valley, CA 52,569,000 777,000 1,844,000 (823,000) 13.62 16.77Santa Rosa/Sonoma County, CA 8,495,000 0 107,000 (126,000) 27.52 29.00Seattle/Puget Sound,WA 83,473,000 237,000 7,659,000 116,000 10.31 10.41St. Louis, MO 38,673,000 361,000 1,033,000 249,000 9.15 9.36Tampa, FL 70,722,000 17,000 710,000 (506,000) 13.33 14.10Washington, DC - N.Virginia 150,300,000 424,000 1,590,000 (521,000) 9.41 10.00Washington, DC - Suburban, MD 73,812,000 238,000 1,549,000 (424,000) 11.02 11.49W. Palm Beach/Palm Beach County, FL 28,619,000 12,000 102,000 (204,000) 18.88 20.99Total US 3,375,217,000 10,657,000 45,978,000 (16,616,000) 14.69 15.67

COLLIERS INTERNATIONAL 5

SUBURBAN OFFICE CLASS AUNITED STATES

EXISTING ABSORPTION VACANCY VACANCY AVERAGE ANNUAL QUARTERLY ANNUALINVENTORY (SF) Q1 2009 RATE (%) RATE (%) QUOTED RENT (US$PSF) CHANGE CHANGE

MARKET MARCH 31, 2009 (SF) DEC. 31, 2008 MARCH 31, 2009 MARCH 31, 2009 (%) (%)

Atlanta, GA 76,666,000 110,000 16.14 16.10 22.80 (1.56) (4.29)Bakersfield, CA 2,661,000 67,000 6.90 7.20 24.00 0.00 0.00Baltimore, MD 20,510,000 (518,000) 18.67 21.20 26.00 (0.31) 0.82Boise, ID 4,391,000 (34,000) 16.99 18.32 18.30 (3.43) (3.99)Boston, MA 28,580,000 (337,000) 16.06 18.23 30.20 (5.86) (0.20)Charleston, SC 3,878,000 128,000 19.74 16.44 26.50 26.19 3.92Charlotte, NC 19,460,000 (130,000) 18.01 19.92 20.10 0.10 0.45Chicago, IL 57,134,000 (583,000) 21.73 22.75 28.00 16.67 0.72Cincinnati, OH 12,042,000 (38,000) 19.52 20.43 21.10 2.88 2.78Cleveland, OH 12,597,000 49,000 10.73 10.34 21.20 0.33 0.48Columbia, SC 959,000 0 13.46 13.46 17.70 0.00 4.67Columbus, OH 8,884,000 3,000 9.14 9.09 19.30 (0.46) (0.26)Dallas/Fort Worth,TX 92,733,000 558,000 15.83 15.66 25.80 (0.96) (4.63)Denver, CO 38,036,000 (38,000) 15.38 16.10 24.50 (2.00) 4.26Detroit, MI 27,661,000 (171,000) 15.73 16.57 23.70 (0.46) (1.29)Fairfield, CA 2,157,000 (20,000) 26.49 27.44 21.60 (14.98) Fresno, CA 3,764,000 (6,000) 23.68 24.09 26.40 (2.22) (4.35)Ft. Lauderdale/Broward County, FL 9,849,000 (72,000) 18.58 18.97 28.00 (10.90) (6.68)Greenville, SC 1,812,000 0 14.20 14.20 18.80 1.07 4.61Hartford, CT 8,139,000 (128,000) 16.48 17.54 21.10 (0.14) 0.29Houston,TX 64,929,000 (193,000) 12.93 15.04 27.90 (0.11) 1.90Indianapolis, IN 9,961,000 (81,000) 20.34 22.36 19.50 1.40 (0.31)Jacksonville, FL 9,410,000 (480,000) 12.00 17.10 21.00 0.00 2.44Kansas City MO-KS 10,953,000 (6,000) 14.83 15.71 22.70 0.26 1.02Las Vegas, NV 4,797,000 (142,000) 30.06 34.75 36.20 (1.52) (2.66)Little Rock,AR 1,733,000 110,000 16.00 9.51 18.30 0.00 0.00Los Angeles - Inland Empire, CA 4,936,000 (61,000) 27.30 33.30 28.00 (2.10) Los Angeles, CA 97,852,000 (1,525,000) 11.76 13.66 37.10 (2.44) (7.96)Louisville, KY 5,394,000 41,000 15.93 15.17 17.60 (9.66) (12.10)Memphis,TN 6,964,000 (70,000) 6.79 7.79 21.80 1.73 2.01Miami/Dade County, FL 12,480,000 (146,000) 14.71 17.23 28.30 (18.41) (15.32)Milwaukee,WI 5,974,000 85,000 12.39 10.97 21.00 (30.81) 0.00Minneapolis/St. Paul, MN 16,733,000 (386,000) 13.15 15.46 27.80 (0.64) 4.99Nashville,TN 15,555,000 (169,000) 9.74 10.84 22.00 (2.10) (0.72)New Jersey - Central 61,418,000 418,000 15.54 14.86 26.20 (3.46) (3.53)New Jersey - Northern 89,908,000 536,000 14.52 14.00 28.70 (1.24) (1.71)New York - Fairfield County, CT 31,271,000 (462,000) 18.49 19.97 33.80 7.64 2.58NewYork - Westchester County, NY 25,108,000 (260,000) 18.31 19.34 28.10 (1.06) (6.36)Oakland, CA 13,425,000 (24,000) 9.15 9.33 28.20 (11.60) (7.48)Orange County, CA 32,256,000 (413,000) 20.88 21.43 32.30 (8.87) (13.28)Orlando, FL 14,595,000 (275,000) 13.92 16.10 23.70 (1.78) (12.75)Philadelphia, PA 66,537,000 423,000 14.73 14.20 24.80 (0.92) 0.61Phoenix,AZ 32,660,000 131,000 23.99 25.75 27.80 (6.11) (12.74)Pleasanton/Walnut Creek, CA 9,802,000 39,000 12.36 11.96 24.00 (0.99) (10.71)Portland, OR 11,437,000 (110,000) 8.72 15.79 24.30 (1.10) 1.42Raleigh/Durham/Chapel Hill, NC 24,560,000 32,000 15.10 16.77 22.20 (0.81) 0.36Reno, NV 2,881,000 (67,000) 19.67 23.95 22.80 0.00 (5.00)Sacramento, CA 14,606,000 (122,000) 20.19 22.67 26.50 5.24 (2.64)San Diego County, CA 23,352,000 (14,000) 22.04 23.39 37.10 (3.13) (4.04)San Francisco Peninsula, CA 21,643,000 (340,000) 15.66 17.84 36.00 (8.26) (17.13)San Jose/Silicon Valley, CA 24,003,000 (354,000) 13.79 19.11 40.40 (2.60) (2.88)Santa Rosa/Sonoma County, CA 3,170,000 (15,000) 33.29 33.75 24.70 0.00 (0.96)Seattle/Puget Sound,WA 22,564,000 42,000 8.42 16.07 27.00 34.93 (2.06)St. Louis, MO 24,000,000 200,000 7.04 7.60 25.00 (3.85) 4.17Tampa, FL 23,642,000 (209,000) 15.20 16.15 24.80 2.27 1.27Washington, DC - N.Virginia 98,511,000 353,000 12.96 13.31 29.80 7.63 (10.01)Washington, DC - Suburban, MD 38,386,000 (116,000) 13.01 14.85 29.70 (2.46) 1.16W. Palm Beach/Palm Beach County, FL 8,403,000 274,000 20.92 21.92 31.50 (4.17) 5.32Total US 1,417,716,000 (4,516,000) 15.37 16.45 27.70 (Weighted) (1.41) (3.81)

25.70 (Equal) (1.84) (3.04)

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OFFICE INVESTMENTUNITED STATES

UNITED STATES OFFICE INVESTMENT

CBD CBD SUBURBAN SUBURBANSALES PRICE CAP RATE SALES PRICE CAP RATE

MARKET (US$PSF) (%) (US$PSF) (%)

Atlanta, GA 178.00 7.40 170.00 7.90Bakersfield, CA 170.00 Baltimore, MD 200.00 8.50 175.00 9.00Boise, ID 151.00 7.60 151.00 7.60Boston, MA 245.00 7.00 180.00 Charleston, SC 275.00 8.00 170.00 9.00Charlotte, NC 275.00 7.00 120.00 7.75Chicago, IL 161.00 7.50 112.00 8.20Cincinnati, OH 65.00 50.00 Cleveland, OH 115.00 10.00 115.00 9.50Dallas/Fort Worth,TX 121.00 9.00Denver, CO 225.00 8.50 125.00 9.25Fresno, CA 185.00 8.50 202.50 8.00Ft. Lauderdale/Broward County, FL 147.71 8.52Greenville, SC 166.00 8.00 138.00 8.50Houston,TX 140.00 8.00 100.00 9.60Jacksonville, FL 115.00 9.00 135.00 9.00Kansas City MO-KS 245.00 9.00 150.00 10.00Las Vegas, NV 270.00 8.00Little Rock,AR 78.50 9.00 127.78 9.00Los Angeles - Inland Empire, CA 187.00 5.90Los Angeles, CA 282.00 5.00 300.00 6.10Miami/Dade County, FL 345.00 6.50 227.95 7.29Milwaukee,WI 225.00 8.00 180.00 8.00Minneapolis/St. Paul, MN 175.00 8.00 165.00 8.50Nashville,TN 176.50 8.25 188.24 7.25New Jersey - Central 175.00 7.50New Jersey - Northern 180.00 7.50New York - Fairfield County, CT 275.00 8.00New York - Westchester County, NY 200.00 8.00New York, NY - DT Manhattan 300.00 8.00 New York, NY - MT Manhattan 390.00 6.00 New York, NY - MTS Manhattan 300.00 8.00 Oakland, CA 250.00 8.00 200.00 8.00Orange County, CA 285.00 6.30Orlando, FL 185.00 9.00 175.00 9.50Philadelphia, PA 144.00 8.00 170.00 8.00Phoenix,AZ 185.00 7.80 126.51 7.50Pleasanton/Walnut Creek, CA 311.00 8.10 285.00 6.10Portland, OR 126.56 7.58 199.68 7.04Raleigh/Durham/Chapel Hill, NC 125.00 9.25Reno, NV 150.00 8.00 205.00 7.75Sacramento, CA 250.00 7.75 218.00 7.25San Diego County, CA 208.93 246.42 7.75San Francisco Peninsula, CA 390.00 5.50San Francisco, CA 330.69 San Jose/Silicon Valley, CA 280.00 10.70Santa Rosa/Sonoma County, CA 243.10 6.40St. Louis, MO 100.00 9.75 100.00 10.50Stockton/San Joaquin County, CA 160.00 8.75 Tampa, FL 150.00 9.00 145.00 9.00Washington, DC 401.00 7.50 Washington, DC - Suburban, MD 280.00 6.60W. Palm Beach/Palm Beach County, FL 183.02 7.66Total US 208.59 8.00 185.00 8.06

Inventory Includes all existing multi or single tenant leased andowner-occupied office properties greater than or equal to 10,000square feet (net rentable area). In some larger markets thisminimum 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 asat the survey date including direct vacant and sublease space.

Absorption Net change in physically occupied space over a givenperiod of time.

New Supply Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after anydemolitions or conversions.

Annual Quoted Rent Includes all costs associated withoccupying a full floor in the mid-rise portion of a Class A buildinginclusive of taxes, insurance, maintenance, janitorial and utilities(electricity surcharges added where applicable). All office rents inthis 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 thissurvey are based on multi-tenant institutional grade buildings fullyleased at market rents. Cap rates are calculated by dividing netoperating income (NOI) by purchase price.

Note: SF=Square FeetPSF=Per Square FootCBD=Central Business District

U.S. Office Space Market Posts WeakestQuarter Since Q3 2001 (Continued from page 1)

Wilting demand pushing rents lower. For the secondconsecutive quarter, downtown lease rates droppedsubstantially during the quarter with Q1 asking rentsdipping by 5.5% to $43.36 per square foot. Markets such asManhattan, Boston and San Francisco contributed largelyto the unusually large drop but nonetheless the nationaltrend is clearly down (see unweighted rent on page 3).Suburban asking rents also fell during the quarter, decliningby 1.4% to $27.69 per square foot. On an annual basis thisleft CBD rents down 13.0% and suburban rents down 3.8%.

Office construction falls to a two year low. First quarteroffice completions dropped considerably relative to the priorquarter with new construction totaling 15.4 MSF comparedwith 18.6 MSF in Q4. This was also a modest decline fromthe first quarter of 2008 when construction registered 17.4MSF. Construction activity also registered a substantialdecline with Q1 under construction activity falling by 10.4MSF to total 83.8 MSF. Construction activity is expectedto drop-off sharply in the coming quarters leaving thedevelopment pipeline below levels witnessed in early 2005when just 40 MSF of office development was underway.

Ross J. MooreExecutive Vice President, Market and Economic ResearchColliers International USA, ross.moore@colliers.com

GLOSSARY

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The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has beenmade to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouragedto consult their professional advisors prior to acting on any of the material contained in this report.

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