3Q15 DOWNTOWN CALGARYMARKET OVERVIEW

Office Vacancy Rates (%)Calgary CBD & by Class for 3Q15

18.1%

11.6%

7.7%

12.8%

Class B

Class A

Class AA

Calgary CBD

Downtown OfficeClass AA, A, B & C Overview

Total Buildings: 147

Class AA: 17

Class A: 30

Class B: 21

Class C: 79

18.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Class C

Office Vacancy Rates (%)Calgary CBD & by CBD Submarkets for 3Q15

12.8%Calgary CBDClass C: 79

Total Rentable Space: 41.02 M SF

Under Construction: 3,827,500 SF

Headlease Vacancy: 7.0%Sublease Vacancy: 5.8%

Total Vacancy: 12.8%

3Q15 Absorption: -548,700 SF

YTD Absorption: -1 846 200 SFHistorical Net AbsorptionDowntown Calgary and year-to-date at 3Q-15

16.3%

11.3%

16.5%

11.6%

0.0% 5.0% 10.0% 15.0% 20.0%

West End Core

East End Core

Mid-West Core

Central Core

YTD Absorption: -1,846,200 SF

12.8%, Up from11.4% in 2Q15

Vacancy

-1,846,100 SFDown from -1,297,500 SF in 2Q15

Absorption

2Q15 3Q15Lease Rates0

1,000,000

2,000,000

3,000,000

4,000,000

re F

eet

Downtown Calgary and year-to-date at 3Q-15

2Q15 3Q15Class AA: $28.35 $28.35Class A: $23.30 $21.60Class B: $20.20 $18.80Class C: $15.90 $14.80

Largest Tenants

Shell

Chevron

Shaw Communications

Enbridge Inc

-3,000,000

-2,000,000

-1,000,000 1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

YTD

-15

Sq

ua

Large Blocks

Cenovus

Encana

Syncrude

AMEC

CNRL

Devon

Talisman Energy

Conoco Philips

Imperial Oil

g

Total

BP

Telus

MEG Energy

ERCB

StatOil

Pengrowth Energy

Enerplus

Husky OilScotia Centre BP Centre Bow Valley Square - II Devon Tower

Market Overview Contact:Michael Gigliuk, BComm (Fin.)Vice President, AssociateDir: 403-444-5662Mob: 403-464-7576mike@nkfdcalgary.com

Source: Newmark Knight Frank Devencore -Calgary

700 – 2nd Street SW99,106SF, Flrs 25-31$40.00 - $42.00 GrossHeadlease

240 – 4th Avenue SW95,477 SF, Flrs 25-28$38.00 - $40.00 GrossSublease

205 – 5th Avenue SW92,111 SF, Flrs 8 - 15$40.00 - $42.00 GrossHeadlease

400 – 3rd Avenue SW58,557 SF, Flrs 11, 12, 14$40.00 - $42.00 GrossSublease

736 – 6th Avenue SW, Suite 2020Calgary, AB T2P 3T7

Newmark Knight Frank Devencorewww.devencorenkf.com

NKFD CORPORATE OVERVIEW

3Q 2015 Do nto n Calgar Market O er ie3Q-2015 Downtown Calgary Market OverviewAfter only three quarters, the year-to-date negative absorption has already far surpassed the previous annual record which occurred in 2009.

The third quarter 2015 survey recorded negative absorption of 548,700 square feet. The pace of additional space coming on the market picked-up when compared to the second quarter of this year. A few large energy and energy services firms; announced or initiated sizable layoffs or shed surplus space during the third quarter. This translated to just over 400,000 square feet of sublease space coming on the market. Sublease space recently put on the market by; Total E&P, Crescent Point, Conoco Philips and Worley Parsons contributed to the majority of the most recently available sublease offerings. Year-to-date absorption is now negative 1,846,100 square feet. Thereby, at only the third quarter, the downtown office market has s rpassed the pre io s orst absorption ear on record hich occ rred in 2009 The 2009

Who We Are

Newmark Knight Frank Devencore (NKFD) isCanada’s largest corporate real estate advisorexclusively representing office industrial and market has surpassed the previous worst absorption year on record, which occurred in 2009. The 2009

annual negative absorption totalled1,625,000 square feet. Total vacant square footage is now 5,234,700 square feet, the equivalent of over 2.5 Bow Towers.

The overall downtown office market vacancy rate is now 12.8%, up from the 11.4 % recorded at the end of the second quarter of 2015 and 4.5% higher than the vacancy rate, recorded at the end of 2014. The third quarter vacancy rate is still 2.9% below the near term peak vacancy rate recorded at the end of 2009, which was 15.7%, at the time. Landlords owning the best quality Class AA and A buildings, which accounts for 63% of the downtown inventory, only saw a slight increase in the headlease vacancy rate for their buildings at 0.2% each, moving up to 1.8% and 5.5% respectively and a combined rate of 3.5%. Thereby, rent is being paid on the combined percentage of 96.5% of their inventory. However, when sublease availability is included in the Class AA and A vacant inventory the overall average vacancy rate

exclusively representing office, industrial andretail space users.

INDUSTRY SPECIALISTS

• Leading global corporate real estate consulting services

sublease availability is included in the Class AA and A vacant inventory, the overall average vacancy rate for the best quality buildings almost triples moving up to 9.5%. Class B and C landlords are sitting on headlease vacancy rates of 12.0% and 14.4% respectively. When sublease offerings are factored in, the combined Class B and C vacancy rate increases to just over 18%. Landlords for all building classes are inclined to settle on lease rates below the posted asking rates. However, the discount varies widely based on a number of variables unique to each suite or block of space and how readily the Landlord is willing to provided sizable Tenant improvement allowances and longer free rent periods. Landlords with the highest quality Class AA kept their asking rates virtually unchanged while the remaining Class A, B and C buildings had similar third quarter asking rate drops of 7%.

Class AA building average asking rental rates remained the same at $28.35 per square foot, during the third quarter, after experiencing a sizable drop over the previous six months. Class A, B and C building

• Offices across Canada and in 370 cities around the world

• Global team of over 12,800 professionals

Newmark Knight Frank DevencoreCanadian Office Coverage

class asking rates moved down to $21.60, $18.80 and $14.80 respectively during the third quarter.

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