Austin Office, Q1 2019 Austin office market grows finer with maturation 9.3% 5,100,332 SF 1,674,961 SF 548,351 SF $37.62 PSF Figure 1: Net Absorption and Vacancy Net Absorption (000s SF) 2,200 *Arrows indicate change from previous quarter. Vacancy Rate (%) 26 1,400 21 600 16 (200) 11 (1,000) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 6 Q1 Q2 Q3 Q4 Total Annual Net Absorption Vacancy Rate Q1 2019 CBRE Research 2019 CBRE, Inc. 1
Figure 2: Austin Office Market Statistics Net Total Total Avg. FSG Under Q1 2019 Q1 2019 2019 Submarket Rentable Vacancy Availability Asking Construction Deliveries Net Net Area (%) (%) Rate ($) (SF) (SF) Absorption Absorption CBD 11,344,354 5.8 8.1 49.78 2,149,826 347,637 61,799 61,799 Class A 8,420,694 5.2 7.8 54.49 2,149,826 347,637 (24,122) (24,122) Class B 2,611,510 6.8 7.4 45.16 - - 95,601 95,601 Northwest 14,865,727 8.7 10.3 37.50 693,330 315,862 146,237 146,237 Class A 9,275,789 8.3 10.0 41.74 693,330 315,862 174,870 174,870 Class B 5,411,806 9.6 11.2 32.89 - - (30,548) (30,548) Far Northwest 4,927,943 8.8 13.5 32.73 188,078 396,329 12,504 12,504 Class A 3,408,649 10.8 13.6 35.68 188,078 396,329 7,230 7,230 Class B 1,392,161 4.6 13.6 29.45 - - 1,557 1,557 Northeast 2,103,166 15.6 24.1 28.04 518,390-41,907 41,907 Class A 1,031,394 17.1 26.2 29.69 314,000 - - - Class B 891,268 15.8 17.3 24.42 204,390-48,573 48,573 North 734,307 14.1 15.4 29.24 - - (3,464) (3,464) Class A - - - N/A - - - - Class B 723,307 13.7 15.0 29.35 - - (3,464) (3,464) Central 1,957,209 10.2 12.0 34.08 178,770 26,391 28,237 28,237 Class A 522,914 7.5 10.8 44.54 178,770-10,210 10,210 Class B 1,245,386 11.3 12.8 31.96-26,391 10,955 10,955 Round Rock 923,602 17.6 18.8 25.87-59,476 1,725 1,725 Class A 210,610 47.5 47.5 31.54-59,476 (731) (731) Class B 670,874 9.3 10.9 23.57 - - (59) (59) East 1,186,470 11.5 11.6 43.00 720,334 464,982 97,528 97,528 Class A 413,172 13.4 13.7 45.97 694,334 263,812 90,077 90,077 Class B 663,823 11.8 11.8 38.04 26,000 201,170 (4,044) (4,044) South 1,205,648 9.3 10.9 32.19 270,899 64,284 1,375 1,375 Class A 463,742 13.6 13.6 50.20 229,917 64,284 6,641 6,641 Class B 405,857 2.1 4.1 36.69 40,982-623 623 Southeast 1,127,958 15.3 16.2 26.84 138,850-9,179 9,179 Class A 155,022 14.8 18.9 33.36 71,225 - (2,145) (2,145) Class B 876,225 16.5 16.9 28.01 67,625-11,783 11,783 Southwest 11,102,764 10.6 12.8 37.17 241,855-151,324 151,324 Class A 7,730,533 11.2 14.3 41.58 177,102-96,259 96,259 Class B 3,225,191 9.0 9.5 31.18 64,753-57,365 57,365 Austin Total 51,479,148 9.3 11.7 37.62 5,100,332 1,674,961 548,351 548,351 Class A 31,632,519 9.2 11.8 43.53 4,696,582 1,447,400 358,289 358,289 Class B 18,117,408 9.5 11.3 32.16 403,750 227,561 188,342 188,342 Although Class C is not shown, totals are inclusive of all classes of data. Q1 2019 CBRE Research 2019 CBRE, Inc. 2
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Figure 3: Austin Labor Force & Unemployment (%) (Thousands) 8 Forecast 1,300 7 1,100 6 900 5 4 700 3 500 2 300 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Moody s Analytics, January 2019. Total Employment (Non-Farm) Unemployment Rate Figure 4: Historical Construction and Deliveries MSF 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Under Construction Delivered Construction Figure 5: Significant Leases / Sales of Q1 2019 Figure 6: Q1 2019 Signed Leases by Industry Lease (Tenant) Property Total SF Office Depot, Inc Amber Oaks H 77,789 Spredfast, Inc Ladera Bend 70,000 Microchip Technologies Park Centre 53,455 Sale (Building) Address Total SF Travis Oaks 5113 Southwest Pkwy 123,434 Anderson Tower 400 Anderson Lane 72,224 Source: CBRE Research, Real Capital Analytics, Q1 2019. 31% 34% 9% 15% 8% 14% Technology Business Services Engineering Financial Health Other Q1 2019 CBRE Research 2019 CBRE, Inc. 3
Figure 7: Historical Market Statistics CBD NORTHWEST FAR NORTHWEST * NORTHEAST ** NORTH CENTRAL*** NORTH** CENTRAL** ROUND ROCK EAST SOUTH SOUTHEAST** SOUTHWEST AUSTIN TOTAL 2012 2013 2014 2015 2016 2017 2018 2019 Absorption (Net SF) 177,023 64,099 369,822 649,300 97,639 564,236 558,794 61,799 Asking Rent, Avg. Annual 36.08 38.15 40.1 41.33 47.67 44.95 47.88 49.78 Delivered Construction (SF) - - 167,871 557,470 195,863 745,936 122,667 347,637 Vacancy Rate (%) 12 12 9.4 7.1 7.8 7.9 6.3 5.8 Absorption (Net SF) 677,714 179,614 224,246 669,701 286,950 471,598 445,607 146,237 Asking Rent, Avg. Annual 25.83 26.28 29.48 31.96 32.8 33.84 36.72 37.50 Delivered Construction (SF) - - 143,331 591,973 372,235 386,921 308,000 315,862 Vacancy Rate (%) 15.3 10.4 9.4 8.8 8.8 8.6 9.1 8.7 Absorption (Net SF) N/A 366,763 79,360 198,389 336,470 230,820 77,807 12,504 Asking Rent, Avg. Annual N/A 27.85 28.95 30.95 30.62 31.79 32.76 32.73 Delivered Construction (SF) N/A - - 128,700 - - - 396,329 Vacancy Rate (%) N/A 12.2 13.8 9.5 9.4 6.3 6.6 8.8 Absorption (Net SF) N/A N/A N/A N/A N/A 64,819 (35,900) 41,907 Asking Rent, Avg. Annual N/A N/A N/A N/A N/A 24.05 28.00 28.04 Delivered Construction (SF) N/A N/A N/A N/A N/A 0 115,000 - Vacancy Rate (%) N/A N/A N/A N/A N/A 9.6 16.4 15.6 Absorption (Net SF) (109,170) 90,741 222,683 90,066 251,093 N/A N/A N/A Asking Rent, Avg. Annual 21.63 23.14 22.89 27.29 25.95 N/A N/A N/A Delivered Construction (SF) - - - 214,962 46,000 N/A N/A N/A Vacancy Rate (%) 23 23.8 15.4 13.1 10.2 N/A N/A N/A Absorption (Net SF) N/A N/A N/A N/A N/A (18,159) 45,653 (3,464) Asking Rent, Avg. Annual N/A N/A N/A N/A N/A 23.81 27.80 29.24 Delivered Construction (SF) N/A N/A N/A N/A N/A - - - Vacancy Rate (%) N/A N/A N/A N/A N/A 15.5 13.6 14.1 Absorption (Net SF) N/A N/A N/A N/A N/A 52,348 (1,941) 28,237 Asking Rent, Avg. Annual N/A N/A N/A N/A N/A 31.39 33.14 34.08 Delivered Construction (SF) N/A N/A N/A N/A N/A - - 26,391 Vacancy Rate (%) N/A N/A N/A N/A N/A 6.2 10.2 10.2 Absorption (Net SF) 8,592 26,097 41,367 19,892 18,801 (9,845) 899 1,725 Asking Rent, Avg. Annual 21.17 22.67 23.77 24.99 22.91 21.11 27.88 25.87 Delivered Construction (SF) - - - - 59,043 22,500 164,486 59,476 Vacancy Rate (%) 19.3 15.1 9.8 6.6 7 8.3 21.0 17.6 Absorption (Net SF) 387,386 1,722 49,392 58,736 428,135 49,398 (24,059) 97,528 Asking Rent, Avg. Annual 16.38 17.2 16.71 19.55 20.13 34.67 43.82 43.00 Delivered Construction (SF) - 30,451-191,990 199,408 59,655 246,711 464,982 Vacancy Rate (%) 12.7 16.7 14.9 17.9 6.6 7.5 17.0 11.5 Absorption (Net SF) 83,355 25,359 70,143 33,337 158,472 23,598 102,221 1,375 Asking Rent, Avg. Annual 15.38 15.13 14.73 15.02 24.68 31.90 31.00 32.19 Delivered Construction (SF) - - - - - 57,500 115,246 64,284 Vacancy Rate (%) 21 19.9 16.3 14.4 16 12.1 4.4 9.3 Absorption (Net SF) N/A N/A N/A N/A N/A 71,123 49,905 9,179 Asking Rent, Avg. Annual N/A N/A N/A N/A N/A 23.55 26.47 26.84 Delivered Construction (SF) N/A N/A N/A N/A N/A 29,205 - - Vacancy Rate (%) N/A N/A N/A N/A N/A 20.2 16.1 15.3 Absorption (Net SF) 205,677 149,911 101,327 419,723 159,982 154,081 161,187 151,324 Asking Rent, Avg. Annual 26.8 29.83 31.78 34.34 35.99 34.31 36.64 37.17 Delivered Construction (SF) - 92,008 76,500 1,062,477-410,295 135,500 - Vacancy Rate (%) 9.9 8.4 8.4 10.3 9.7 10.7 11.4 10.6 Absorption (Net SF) 1,430,577 904,306 1,158,340 2,139,144 1,737,542 1,654,017 1,380,173 548,351 Asking Rent, Avg. Annual 26.24 28.15 29.56 31.81 34.83 34.39 36.64 37.62 Delivered Construction (SF) - 122,459 387,702 2,747,572 872,549 1,712,012 1,207,610 1,674,961 Vacancy Rate (%) 14.2 12.1 10.6 9.6 9.2 8.8 9.6 9.3 *Submarket created in 2013 **Submarket created in 2017 ***Submarket removed in 2017 Q1 2019 CBRE Research 2019 CBRE, Inc. 4
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