q2/2013 costar market report - seattle office space

Seattle/Puget Sound Office Market

M I D - Y E A R 2 0 1 3

The CoStarOffice Report


©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT A

MID-YEAR 2013 – SEATTLE/PUGET SOUND

Table of ContentsTable of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B

Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C

Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CoStar Markets & Submarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Inventory & Development AnalysisSelect Top DeliveriesSelect Top Under Construction Properties

Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Figures at a Glance by Class & MarketFigures at a Glance by Class & SubmarketFigures at a Glance Grouped by CBD vs SuburbanHistorical Figures at a Glance

Leasing Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Select Top Lease Transactions

Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Sales Activity AnalysisSelect Top Sales Transactions

Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Downtown Seattle MarketEastside MarketNorthend MarketSouthend MarketTacoma Market


B THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.

SEATTLE/PUGET SOUND – MID-YEAR 2013


©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C


Methodology

The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group’s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.

© Copyright 2013 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

CoStar Group, Inc.

1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP

For information on subscribing to CoStar’s other products and services, please contact us at

1-877-7COSTAR, or visit our web site at www.costar.com


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©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C


Terms & DefinitionsAvailability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet.

Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date.

Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the ten-ant. In a leased build-to-suit, a tenant will usually have a long term lease on the space.

Buyer: The individual, group, company, or entity that has pur-chased a commercial real estate asset.

Cap Rate: Short for capitalization rate. The Cap Rate is a calcula-tion that reflects the relationship between one year’s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price).

CBD: Abbreviation for Central Business District. (See also: Central Business District)

Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA.

Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-of-a-kind floor plans. They can be an archi-tectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fit-tings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality.

Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typical-ly have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors.

Class C: A classification used to describe buildings that gener-ally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors.

Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries)

Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space.

Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property.

Delivery Date: The date a building completes construction and receives a certificate of occupancy.

Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepre-neurial efforts.

Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased.

Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation.

Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typi-cal flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off.

Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance.

Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space.

Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings.

Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The pri-mary purpose of the space is for storing, producing, assembling, or distributing product.

Landlord Rep: (Landlord Representative) In a typical lease trans-action between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep.

Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease.

Leasing Activity: The volume of square footage that is commit-ted to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings.

Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundar-ies of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets)


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©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 1

Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different tenant needs. (See also: Tenancy).

Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space.

Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs.

New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant.

Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant.

Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufactur-ing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor.

Owner: The company, entity, or individual that holds title on a given building or property.

Planned/Proposed: The status of a building that has been announced for future development but not yet started construction.

Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date.

Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA).

Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the vari-ous systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly.

Quoted Rental Rate: The asking rate per square foot for a par-ticular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease.

RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area)

Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of eco-nomic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets)

Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant.

Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant’s rental obligation. Generally RBA includes a percentage of common areas including all hall-ways, main lobbies, bathrooms, and telephone closets.

Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis.

Sales Price: The total dollar amount paid for a particular property at a particular point in time.

Sales Volume: The sum of sales prices for a given group of build-ings in a given time period.

Seller: The individual, group, company, or entity that sells a par-ticular commercial real estate asset.

SF: Abbreviation for Square Feet.

Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy)

Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space.

Submarkets: Specific geographic boundaries that serve to delin-eate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market).

Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metro-politan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD)

Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant)

Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep.

Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied.

Under Construction: The status of a building that is in the process of being developed, assembled, built or constructed. A building is considered to be under construction after it has begun construc-tion and until it receives a certificate of occupancy.

Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations.

Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not avail-able. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be con-sidered vacant space.

Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces.

Year Built: The year in which a building completed construction and was issued a certificate of occupancy.

YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through what-ever time period is being studied.


D THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.

SEATTLE/PUGET SOUND – MID-YEAR 2013 MID-YEAR 2013 – SEATTLE/PUGET SOUND



OVERVIEW

Seattle/Puget Sound’s Vacancy Stays at 10.4% Net Absorption Positive 517,585 SF in the Quarter

Investor sentiment that Seattle is an improving office mar-ket is ringing true. Following a series of high prices paid in Downtown Seattle, Lake Union and Bellevue, occupier

demand is strengthening and rents are beginning to rise. The influence of amazon.com cannot be understated. They continue to lease up and acquire space at a frenetic pace. By the time ama-zon’s 3.3 MSF South Lake Union campus is completed in 2017 it is estimated that the dot.com giant will occupy 7.3 MSF across the Seattle office market.

The Seattle/Puget Sound Office market ended the second quarter 2013 with a vacancy rate of 10.4%. The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 517,585 square feet in the second quarter. Vacant sublease space decreased in the quarter, ending the quar-ter at 970,854 square feet. Rental rates ended the second quarter at $26.38, an increase over the previous quarter. A total of five buildings delivered to the market in the quarter totaling 516,313 square feet, with 411,872 square feet still under construction at the end of the quarter.

AbsorptionNet absorption for the overall Seattle/Puget Sound office

market was positive 517,585 square feet in the second quarter 2013. That compares to positive 466,746 square feet in the first quarter 2013, positive 1,044,652 square feet in the fourth quar-ter 2012, and positive 131,213 square feet in the third quarter 2012.

Tenants moving out of large blocks of space in 2013 include: Federal Home Loan Bank of Seattle moving out of 106,646 square feet at Century Square; Concur Technologies, Inc. moving

out of 99,945 square feet at Millennium Corporate Park – Bldg. C; and Spacelabs Healthcare, Inc. moving out of 95,600 square feet at Sammamish Park Place.

Tenants moving into large blocks of space in 2013 include; UW School of Medicine moving into 197,616 square feet at UW Medicine Research; Davita moving into 186,612 square feet at North Building 1; and Amazon.com moving into 150,186 square feet at 1800 Ninth.

The Class-A office market recorded net absorption of posi-tive 342,854 square feet in the second quarter 2013, compared to positive 218,572 square feet in the first quarter 2013, positive 834,525 in the fourth quarter 2012, and positive 81,786 in the third quarter 2012.

The Class-B office market recorded net absorption of posi-tive 100,573 square feet in the second quarter 2013, compared to positive 208,945 square feet in the first quarter 2013, positive 89,980 in the fourth quarter 2012, and positive 35,774 in the third quarter 2012.

The Class-C office market recorded net absorption of posi-tive 74,158 square feet in the second quarter 2013 compared to positive 39,229 square feet in the first quarter 2013, positive 120,147 in the fourth quarter 2012, and positive 13,653 in the third quarter 2012.

Net absorption for Seattle/Puget Sound’s Central Business District (CBD) was negative (90,714) square feet in the second quarter 2013. That compares to negative (45,961) square feet in the first quarter 2013, positive 81,679 in the fourth quarter 2012, and negative (43,760) in the third quarter 2012.

Net absorption for the suburban markets was positive

Vacancy Rates by Class 2000-2013

Source: CoStar Property®

Absorption & Deliveries U.S. Vacancy ComparisonPast 8 Quarters Past 8 Quarters

Source: CoStar Property• Source: CoStar Property•

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Seattle/Puget Sound United States

2 THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.


Seattle/Puget Sound Office MarketMID-YEAR 2013 – SEATTLE/PUGET SOUND



OVERVIEW

608,299 square feet in the second quarter 2013. That compares to positive 512,707 square feet in first quarter 2013, positive 962,973 in the fourth quarter 2012, and positive 174,973 in the third quarter 2012.

VacancyThe office vacancy rate in the Seattle/Puget Sound market

area remained at 10.4% at the end of the second quarter 2013. The vacancy rate was 10.6% at the end of the fourth quarter 2012, and 10.9% at the end of the third quarter 2012.

Class-A projects reported a vacancy rate of 12.7% at the end of the second quarter 2013, 12.5% at the end of the first quarter 2013, 12.7% at the end of the fourth quarter 2012, and 13.3% at the end of the third quarter 2012.

Class-B projects reported a vacancy rate of 10.3% at the end of the second quarter 2013, 10.4% at the end of the first quarter 2013, 10.6% at the end of the fourth quarter 2012, and 10.7% at the end of the third quarter 2012.

Class-C projects reported a vacancy rate of 6.3% at the end of the second quarter 2013, 6.6% at the end of first quarter 2013, 6.8% at the end of the fourth quarter 2012, and 7.2% at the end of the third quarter 2012.

The overall vacancy rate in Seattle/Puget Sound’s CBD at the end of the second quarter 2013 increased to 12.9%. The vacancy rate was 12.4% at the end of the first quarter 2013, 12.3% at the end of the fourth quarter 2012, and 12.5% at the end of the third quarter 2012.

The vacancy rate in the suburban markets decreased to 9.6% in the second quarter 2013. The vacancy rate was 9.8% at the end of the first quarter 2013, 10.0% at the end of the fourth quarter 2012, and 10.4% at the end of the third quarter 2012.

Largest Lease SigningsThe largest lease signings occurring in 2013 included: the

218,900-square-foot lease signed by State Farm Insurance at The Russell Bldg. in the Tacoma market; the 126,199-square-foot deal

signed by Zulily at 2601 Elliott (Seattle Trade & Technology Ctr.) in the Downtown Seattle market; and the 95,600-square-foot lease signed by Costco at Sammamish Park Place in the Eastside market.

Sublease VacancyThe amount of vacant sublease space in the Seattle/Puget

Sound market decreased to 970,854 square feet by the end of the second quarter 2013, from 1,086,905 square feet at the end of the first quarter 2013. There was 1,157,097 square feet vacant at the end of the fourth quarter 2012 and 1,220,575 square feet at the end of the third quarter 2012.

Seattle/Puget Sound’s Class-A projects reported vacant sub-lease space of 542,098 square feet at the end of second quarter 2013, up from the 526,151 square feet reported at the end of the first quarter 2013. There were 585,830 square feet of sublease space vacant at the end of the fourth quarter 2012, and 649,649 square feet at the end of the third quarter 2012.

Class-B projects reported vacant sublease space of 398,145 square feet at the end of the second quarter 2013, down from the 534,369 square feet reported at the end of the first quarter 2013. At the end of the fourth quarter 2012 there were 538,878 square feet, and at the end of the third quarter 2012 there were 542,546 square feet vacant.

Class-C projects reported increased vacant sublease space from the first quarter 2013 to the second quarter 2013. Sublease vacancy went from 26,385 square feet to 30,611 square feet dur-ing that time. There were 32,389 square feet at the end of the fourth quarter 2012, and 28,380 square feet at the end of the third quarter 2012.

Sublease vacancy in Seattle/Puget Sound’s CBD stood at 500,418 square feet at the end of the second quarter 2013. It was 530,531 square feet at the end of the first quarter 2013, 589,520 square feet at the end of the fourth quarter 2012, and 624,197 square feet at the end of the third quarter 2012.

Sublease vacancy in the suburban markets ended the sec-ond quarter 2013 at 470,436 square feet. At the end of the first quarter 2013 sublease vacancy was 556,374 square feet, was 567,577 square feet at the end of the fourth quarter 2012, and was 596,378 square feet at the end of the third quarter 2012.

Rental RatesThe average quoted asking rental rate for available office

space, all classes, was $26.38 per square foot per year at the end of the second quarter 2013 in the Seattle/Puget Sound market area. This represented a 2.7% increase in quoted rental rates from the end of the first quarter 2013, when rents were reported at $25.68 per square foot.

The average quoted rate within the Class-A sector was $31.92 at the end of the second quarter 2013, while Class-B rates stood at $24.49, and Class-C rates at $19.08. At the end of the





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OVERVIEW

first quarter 2013, Class-A rates were $31.68 per square foot, Class-B rates were $23.58, and Class-C rates were $18.36.

The average quoted asking rental rate in Seattle/Puget Sound’s CBD was $29.08 at the end of the second quarter 2013, and $25.43 in the suburban markets. In the first quarter 2013, quoted rates were $28.74 in the CBD and $24.57 in the sub-urbs.

Deliveries and ConstructionDuring the second quarter 2013, five buildings totaling

516,313 square feet were completed in the Seattle/Puget Sound market area. This compares to two buildings totaling 127,000 square feet that were completed in the first quarter 2013, four buildings totaling 620,252 square feet completed in the fourth quarter 2012, and 228,983 square feet in five buildings completed in the third quarter 2012.

There were 411,872 square feet of office space under con-struction at the end of the second quarter 2013.

Some of the notable 2013 deliveries include: Boeing Everett Delivery Center, a 180,000-square-foot facility that delivered in second quarter 2013 and is now 100% occupied, and UW Medicine Research, a 173,899-square-foot building that delivered in second quarter 2013 and is now 100% occupied.

The largest projects underway at the end of second quarter 2013 were Home Plate Center - South Bldg., a 189,602-square-foot building with 0% of its space pre-leased, and 202 Westlake Ave N, a 130,710-square-foot facility that is 98% pre-leased.

InventoryTotal office inventory in the Seattle/Puget Sound market

area amounted to 183,030,605 square feet in 7,472 buildings as of the end of the second quarter 2013. The Class-A office sector consisted of 56,417,165 square feet in 254 projects. There were 2,929 Class-B buildings totaling 96,518,772 square feet, and the Class-C sector consisted of 30,094,668 square feet in 4,289 build-ings. Within the Office market there were 407 owner-occupied buildings accounting for 25,546,012 square feet of office space.

Sales ActivityTallying office building sales of 15,000 square feet or larger,

Seattle/Puget Sound office sales figures fell during the first quarter 2013 in terms of dollar volume compared to the fourth quarter of 2012.

In the first quarter, 15 office transactions closed with a total volume of $549,974,436. The 15 buildings totaled 2,091,862 square feet and the average price per square foot equated to $262.91 per square foot. That compares to 23 transactions total-ing $2,597,351,466 in the fourth quarter 2012. The total square footage in the fourth quarter was 5,318,149 square feet for an average price per square foot of $488.39.

Total office building sales activity in 2013 was up compared to 2012. In the first three months of 2013, the market saw 15 office sales transactions with a total volume of $549,974,436. The price per square foot averaged $262.91. In the same first three months of 2012, the market posted 12 transactions with a total volume of $323,870,908. The price per square foot averaged $239.31.

Cap rates have been lower in 2013, averaging 5.79% com-pared to the same period in 2012 when they averaged 5.81%.

One of the largest transactions that occurred within the last four quarters in the Seattle/Puget Sound market was the sale of Amazon Corporate Offices in Seattle. This 1,859,838-square-foot office building sold for $1,154,269,838 or $620.63 per square foot. The property sold on 12/21/2012.

Reports compiled by: Research Manager, Michael LaPointe and Researcher, Drew Peters.





0%

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20001q

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20101q

20103q

20111q

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20131q

Vac

ancy

Rat

e

A B C Total Market

0.29

0.81

0.22

1.23

0.13

1.04

0.470.52

0.190.15

0.01

0.170.23

0.62

0.13

0.52

0.0

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0.4

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0.8

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2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

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6.0%

8.0%

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12.0%

14.0%

2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Vac

ancy

Rat

e







CoStar Submarket Clusters & Submarkets

In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.

MARKETS

Submarket Clusters Submarkets

Downtown Seattle Ballard/U Dist Belltown/Denny Regrade Capitol Hill/Central Dist Lake UnionPioneer Sq/Waterfront Queen Anne/Magnolia S Seattle Seattle CBD*

Eastside 520 Corridor Bellevue CBD* Coal Creek/Issaquah E King CountyI-90 Corridor Kirkland Mercer Island RedmondSuburban Bellevue

Northend Bothell/Kenmore Edmonds/Lynnwood Everett CBD* Mill Creek/WoodinvilleN Snohomish County Northgate/N Seattle S Everett/Harbor Point S Snohomish County

Southend Federal Way/Auburn Kent Valley Renton/Tukwila Seatac/Burien

Tacoma Dupont E Pierce County Fort Lewis Gig Harbor/W Pierce CoPuyallup Spanaway Tacoma CBD* Tacoma SuburbanUniv. Place/Lakewood

* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.






Historical Deliveries 1982 - 2013

Source: CoStar Property® * Future deliveries based on current under construction buildings.

Construction Activity Markets Ranked by Under Construction Square Footage

# Bldgs Preleased SF Preleased % All Existing U/C

Downtown Seattle 3 141,056 41.7% 43,814 112,771

Tacoma 1 57,350 100.0% 10,666 57,350

Northend 3 12,210 75.3% 14,419 5,403

Eastside 0 0 0.0% 34,043 0

Southend 0 0 0.0% 19,481 0

Totals 7 210,616 51.1% 24,496 58,839


Recent Deliveries Future Deliveries Leased & Un-Leased SF in Deliveries Since 2009 Preleased & Un-Leased SF in Properties Scheduled to Deliver

Source: CoStar Property® Source: CoStar Property®

338,312

411,872

57,350

16,210

0

0

Market

Under Construction Inventory Average Bldg Size

Total RBA

3.2

4.7

4.0

5.0

7.7

4.1

6.5

4.44.9

2.3

1.72.3

1.5

2.9

1.82.3

3.4

5.2

8.8

5.6

4.6

0.91.4

1.72.0

2.8

4.6

5.3

2.2 2.2

1.0 0.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

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8.0

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1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Deliveries Average Delivered SF

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INVENTORY & DEVELOPMENT






Historical Construction Starts & DeliveriesSquare Footage Per Quarter Starting and Completing Construction


Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project

Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant

< 50,000 SF 2 42,414 19,595 46.2% $27.37 0 42,414

50,000 SF - 99,999 SF 2 127,000 112,000 88.2% $36.55 0 127,000

100,000 SF - 249,999 SF 3 473,899 473,899 100.0% $0.00 353,899 120,000

250,000 SF - 499,999 SF 0 0 0 0.0% $0.00 0 0

>= 500,000 SF 0 0 0 0.0% $0.00 0 0


Recent Development by Tenancy Existing Inventory ComparisonBased on RBA Developed for Single & Multi Tenant Use Based on Total RBA

2013 Deliveries


Currently Under Construction By Class By Space Type

0.34

0.58

0.210.14

0.36

0.130.22

0.410.48

0.02 0.04 0.060.00 0.01

0.30

1.35

0.35

0.18

1.21

0.66

0.190.15

0.01

0.170.23

0.62

0.13

0.52

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2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

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Construction Starts Deliveries

100%

0%

Multi Single

55%

45%

Multi Single

16%

31%53%

Class A Class B Class C

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Class A Market Statistics Mid-Year 2013

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Downtown Seattle 112 33,861,347 4,603,355 4,840,315 14.3% 364,453 300,899 320,312 $32.18

Eastside 107 18,009,769 1,471,542 1,550,311 8.6% (89,956) 0 0 $33.10

Northend 17 1,917,529 201,795 209,264 10.9% 182,069 180,000 0 $25.89

Southend 8 1,164,414 194,277 194,277 16.7% (7,795) 0 0 $26.16

Tacoma 10 1,464,106 125,996 344,896 23.6% 112,655 120,000 0 $27.82

Totals 254 56,417,165 6,596,965 7,139,063 12.7% 561,426 600,899 320,312 $31.92


Class B Market Statistics Mid-Year 2013



Downtown Seattle 576 30,042,621 2,615,877 2,685,577 8.9% 39,227 0 18,000 $27.98

Eastside 739 25,858,885 2,394,933 2,496,084 9.7% (19,338) 18,414 0 $26.59

Northend 566 14,089,522 1,599,765 1,638,349 11.6% (3,590) 24,000 16,210 $22.81

Southend 431 14,896,879 1,770,880 1,931,160 13.0% 258,509 0 0 $20.04

Tacoma 617 11,630,865 1,206,399 1,234,829 10.6% 34,710 0 57,350 $21.23

Totals 2,929 96,518,772 9,587,854 9,985,999 10.3% 309,518 42,414 91,560 $24.49


Class C Market Statistics Mid-Year 2013



Downtown Seattle 996 9,878,952 408,813 429,355 4.3% 10,301 0 0 $20.41

Eastside 560 3,996,013 253,929 259,145 6.5% (36,935) 0 0 $22.40

Northend 886 5,174,310 372,986 373,466 7.2% 30,739 0 0 $18.29

Southend 597 4,120,974 260,360 260,360 6.3% 34,976 0 0 $17.26

Tacoma 1,250 6,924,419 573,955 578,328 8.4% 74,306 0 0 $17.23

Totals 4,289 30,094,668 1,870,043 1,900,654 6.3% 113,387 0 0 $19.08


Total Office Market Statistics Mid-Year 2013



Downtown Seattle 1,684 73,782,920 7,628,045 7,955,247 10.8% 413,981 300,899 338,312 $29.59

Eastside 1,406 47,864,667 4,120,404 4,305,540 9.0% (146,229) 18,414 0 $28.73

Northend 1,469 21,181,361 2,174,546 2,221,079 10.5% 209,218 204,000 16,210 $22.47

Southend 1,036 20,182,267 2,225,517 2,385,797 11.8% 285,690 0 0 $19.87

Tacoma 1,877 20,019,390 1,906,350 2,158,053 10.8% 221,671 120,000 57,350 $21.53

Totals 7,472 183,030,605 18,054,862 19,025,716 10.4% 984,331 643,313 411,872 $26.38


Existing Inventory Vacancy

Vacancy



Existing Inventory

FIGURES AT A GLANCE






FIGURES AT A GLANCE

Class A Submarket Statistics Mid-Year 2013



520 Corridor 23 3,301,625 54,183 54,183 1.6% 36,542 0 0 $25.56

Ballard/U Dist 3 211,108 17,296 17,296 8.2% 2,470 0 0 $35.37

Bellevue CBD 25 7,513,123 539,869 552,763 7.4% (12,094) 0 0 $35.69

Belltown/Denny Regrade 13 2,782,267 385,277 385,277 13.8% 86,395 77,000 0 $26.93

Bothell/Kenmore 4 346,297 0 0 0.0% 0 0 0 $0.00

Capitol Hill/Central Dist 3 307,648 52,394 57,594 18.7% 29,927 50,000 0 $36.20

Coal Creek/Issaquah 6 917,381 0 30,000 3.3% 0 0 0 $28.31

Dupont 1 48,000 3,400 3,400 7.1% 0 0 0 $28.00

E King County 0 0 0 0 0.0% 0 0 0 $0.00

E Pierce County 0 0 0 0 0.0% 0 0 0 $0.00

Edmonds/Lynnwood 8 833,356 192,672 200,141 24.0% 2,069 0 0 $25.88

Everett CBD 1 88,000 0 0 0.0% 0 0 0 $0.00

Federal Way/Auburn 1 88,000 15,000 15,000 17.0% 0 0 0 $33.05

Fort Lewis 0 0 0 0 0.0% 0 0 0 $0.00

Gig Harbor/W Pierce Co 1 85,903 28,773 28,773 33.5% 0 0 0 $32.63

I-90 Corridor 19 2,727,659 418,681 418,681 15.3% (91,512) 0 0 $29.81

Kent Valley 1 57,768 0 0 0.0% 0 0 0 $0.00

Kirkland 12 1,033,583 69,254 82,688 8.0% 2,268 0 0 $35.40

Lake Union 26 5,459,358 205,961 205,961 3.8% 120,596 173,899 130,710 $33.33

Mercer Island 1 105,796 22,583 22,583 21.3% (229) 0 0 $34.39

Mill Creek/Woodinville 0 0 0 0 0.0% 0 0 0 $0.00

N Snohomish County 0 0 0 0 0.0% 0 0 0 $0.00

Northgate/N Seattle 2 205,361 9,123 9,123 4.4% 0 0 0 $26.00

Pioneer Sq/Waterfront 9 1,793,709 150,314 150,314 8.4% 179,956 0 0 $30.22

Puyallup 1 83,268 17,720 17,720 21.3% 0 0 0 $42.50

Queen Anne/Magnolia 11 1,748,325 352,618 359,333 20.6% 1,387 0 0 $33.92

Redmond 19 2,176,602 148,375 170,816 7.8% (23,874) 0 0 $29.44

Renton/Tukwila 4 590,992 0 0 0.0% 0 0 0 $0.00

S Everett/Harbor Point 2 444,515 0 0 0.0% 180,000 180,000 0 $0.00

S Seattle 5 959,872 457,068 457,068 47.6% 224 0 189,602 $37.40

S Snohomish County 0 0 0 0 0.0% 0 0 0 $0.00

Seatac/Burien 2 427,654 179,277 179,277 41.9% (7,795) 0 0 $24.50

Seattle CBD 42 20,599,060 2,982,427 3,207,472 15.6% (56,502) 0 0 $31.68

Spanaway 0 0 0 0 0.0% 0 0 0 $0.00

Suburban Bellevue 2 234,000 218,597 218,597 93.4% (1,057) 0 0 $46.51

Tacoma CBD 6 1,204,935 69,813 288,713 24.0% 118,945 120,000 0 $26.65

Tacoma Suburban 0 0 0 0 0.0% 0 0 0 $0.00

Univ. Place/Lakewood 1 42,000 6,290 6,290 15.0% (6,290) 0 0 $33.37

Totals 254 56,417,165 6,596,965 7,139,063 12.7% 561,426 600,899 320,312 $31.92








FIGURES AT A GLANCE

Class B Submarket Statistics Mid-Year 2013



520 Corridor 98 5,026,741 145,849 150,847 3.0% 17,939 0 0 $24.25

Ballard/U Dist 106 3,454,133 109,182 109,402 3.2% 29,771 0 18,000 $24.59

Bellevue CBD 30 1,407,305 223,822 223,822 15.9% 1,699 0 0 $30.86

Belltown/Denny Regrade 43 2,900,381 256,619 271,919 9.4% 111,816 0 0 $29.95

Bothell/Kenmore 97 4,503,757 540,863 578,364 12.8% 76,729 0 4,000 $24.36

Capitol Hill/Central Dist 84 3,993,992 297,075 302,709 7.6% (21,520) 0 0 $39.35

Coal Creek/Issaquah 57 1,367,902 105,147 107,383 7.9% 27,462 0 0 $27.55

Dupont 6 1,065,501 1,280 1,280 0.1% 0 0 0 $0.00

E King County 62 897,104 125,598 125,598 14.0% (35,734) 0 0 $23.41

E Pierce County 29 382,950 57,284 59,284 15.5% 3,872 0 0 $22.21

Edmonds/Lynnwood 131 2,848,694 338,644 339,727 11.9% 44,730 0 12,210 $21.49

Everett CBD 81 1,902,174 258,198 258,198 13.6% (125,414) 0 0 $20.83

Federal Way/Auburn 134 3,583,032 591,982 741,947 20.7% 181,397 0 0 $18.63

Fort Lewis 0 0 0 0 0.0% 0 0 0 $0.00

Gig Harbor/W Pierce Co 71 1,084,339 150,745 152,497 14.1% (25,672) 0 0 $21.85

I-90 Corridor 44 3,201,192 371,729 452,882 14.1% (168,216) 0 0 $28.68

Kent Valley 69 2,349,113 444,202 454,517 19.3% 34,060 0 0 $21.45

Kirkland 137 3,563,627 401,099 413,294 11.6% 58,587 0 0 $25.88

Lake Union 89 5,387,279 351,847 381,492 7.1% 30,278 0 0 $26.83

Mercer Island 16 398,295 5,521 6,090 1.5% 1,739 0 0 $29.27

Mill Creek/Woodinville 43 808,955 92,927 92,927 11.5% 11,655 24,000 0 $27.00

N Snohomish County 58 576,588 68,681 68,681 11.9% 4,173 0 0 $16.32

Northgate/N Seattle 56 1,343,714 136,332 136,332 10.1% (11,349) 0 0 $23.37

Pioneer Sq/Waterfront 56 3,524,301 498,563 498,563 14.1% (59,665) 0 0 $25.32

Puyallup 60 1,150,815 308,105 308,105 26.8% 10,079 0 0 $23.21

Queen Anne/Magnolia 63 2,585,514 195,611 195,611 7.6% (24,741) 0 0 $22.32

Redmond 101 5,062,755 421,917 421,917 8.3% 89,626 0 0 $22.98

Renton/Tukwila 168 7,676,006 582,073 582,073 7.6% 24,943 0 0 $21.16

S Everett/Harbor Point 79 1,850,267 124,387 124,387 6.7% 11,329 0 0 $23.32

S Seattle 81 2,222,360 190,154 190,154 8.6% 51,079 0 0 $21.72

S Snohomish County 21 255,373 39,733 39,733 15.6% (15,443) 0 0 $22.54

Seatac/Burien 60 1,288,728 152,623 152,623 11.8% 18,109 0 0 $19.44

Seattle CBD 54 5,974,661 716,826 735,727 12.3% (77,791) 0 0 $28.05

Spanaway 54 583,041 90,833 90,833 15.6% 14,725 0 0 $19.37

Suburban Bellevue 194 4,933,964 594,251 594,251 12.0% (12,440) 18,414 0 $27.30

Tacoma CBD 85 3,078,359 284,452 309,130 10.0% (2,621) 0 57,350 $20.22

Tacoma Suburban 223 3,180,883 226,903 226,903 7.1% 30,827 0 0 $20.94

Univ. Place/Lakewood 89 1,104,977 86,797 86,797 7.9% 3,500 0 0 $20.06

Totals 2,929 96,518,772 9,587,854 9,985,999 10.3% 309,518 42,414 91,560 $24.49








FIGURES AT A GLANCE

Class C Submarket Statistics Mid-Year 2013



520 Corridor 19 306,433 34,175 34,175 11.2% (2,109) 0 0 $18.50

Ballard/U Dist 304 1,427,200 26,745 26,745 1.9% 342 0 0 $20.58

Bellevue CBD 32 281,645 15,582 15,582 5.5% (3,837) 0 0 $22.06

Belltown/Denny Regrade 54 763,003 49,019 49,019 6.4% (8,670) 0 0 $20.08

Bothell/Kenmore 99 382,856 12,227 12,227 3.2% (114) 0 0 $21.81

Capitol Hill/Central Dist 139 1,759,685 37,036 43,811 2.5% (20,627) 0 0 $24.80

Coal Creek/Issaquah 39 193,185 6,300 6,550 3.4% 4,100 0 0 $25.52

Dupont 0 0 0 0 0.0% 0 0 0 $0.00

E King County 85 406,605 11,998 11,998 3.0% 754 0 0 $20.21

E Pierce County 41 121,693 2,776 2,776 2.3% 4,082 0 0 $17.77

Edmonds/Lynnwood 169 1,109,106 83,597 83,597 7.5% 3,628 0 0 $18.84

Everett CBD 240 1,553,458 144,488 144,488 9.3% (401) 0 0 $16.51

Federal Way/Auburn 199 1,697,660 59,729 59,729 3.5% (7,103) 0 0 $18.75

Fort Lewis 8 28,094 0 0 0.0% 0 0 0 $0.00

Gig Harbor/W Pierce Co 86 451,531 43,519 43,519 9.6% 8,584 0 0 $18.36

I-90 Corridor 18 180,465 2,500 2,500 1.4% 1,115 0 0 $22.40

Kent Valley 119 684,841 58,987 58,987 8.6% 34,534 0 0 $14.56

Kirkland 97 620,403 24,210 24,210 3.9% 14,120 0 0 $23.78

Lake Union 99 904,204 32,377 32,377 3.6% 43,607 0 0 $16.82

Mercer Island 18 144,566 27,415 27,415 19.0% 0 0 0 $22.28

Mill Creek/Woodinville 40 240,231 29,140 29,140 12.1% 11,011 0 0 $24.06

N Snohomish County 107 460,341 31,011 31,011 6.7% 5,160 0 0 $15.23

Northgate/N Seattle 120 732,819 31,338 31,338 4.3% 2,060 0 0 $18.74

Pioneer Sq/Waterfront 46 1,140,291 66,441 66,441 5.8% (19,209) 0 0 $20.04

Puyallup 137 543,748 27,533 27,533 5.1% (1,391) 0 0 $20.99

Queen Anne/Magnolia 127 1,104,015 99,757 108,048 9.8% 11,321 0 0 $21.43

Redmond 68 283,184 33,440 33,440 11.8% (11,782) 0 0 $22.51

Renton/Tukwila 142 987,984 86,842 86,842 8.8% 4,823 0 0 $20.25

S Everett/Harbor Point 75 484,137 28,550 28,550 5.9% 4,516 0 0 $17.68

S Seattle 208 1,965,871 80,523 85,999 4.4% 1,666 0 0 $17.19

S Snohomish County 36 211,362 12,635 13,115 6.2% 4,879 0 0 $14.84

Seatac/Burien 137 750,489 54,802 54,802 7.3% 2,722 0 0 $14.35

Seattle CBD 19 814,683 16,915 16,915 2.1% 1,871 0 0 $24.02

Spanaway 138 519,540 23,317 25,595 4.9% (87) 0 0 $19.33

Suburban Bellevue 184 1,579,527 98,309 103,275 6.5% (39,296) 0 0 $23.01

Tacoma CBD 162 1,887,813 205,511 205,511 10.9% 19,470 0 0 $16.23

Tacoma Suburban 482 2,299,510 169,794 169,794 7.4% 42,705 0 0 $16.27

Univ. Place/Lakewood 196 1,072,490 101,505 103,600 9.7% 943 0 0 $17.90

Totals 4,289 30,094,668 1,870,043 1,900,654 6.3% 113,387 0 0 $19.08








FIGURES AT A GLANCE

Total Office Submarket Statistics Mid-Year 2013



520 Corridor 140 8,634,799 234,207 239,205 2.8% 52,372 0 0 $23.95

Ballard/U Dist 413 5,092,441 153,223 153,443 3.0% 32,583 0 18,000 $24.41

Bellevue CBD 87 9,202,073 779,273 792,167 8.6% (14,232) 0 0 $33.95

Belltown/Denny Regrade 110 6,445,651 690,915 706,215 11.0% 189,541 77,000 0 $28.20

Bothell/Kenmore 200 5,232,910 553,090 590,591 11.3% 76,615 0 4,000 $24.29

Capitol Hill/Central Dist 226 6,061,325 386,505 404,114 6.7% (12,220) 50,000 0 $36.58

Coal Creek/Issaquah 102 2,478,468 111,447 143,933 5.8% 31,562 0 0 $27.89

Dupont 7 1,113,501 4,680 4,680 0.4% 0 0 0 $28.00

E King County 147 1,303,709 137,596 137,596 10.6% (34,980) 0 0 $23.02

E Pierce County 70 504,643 60,060 62,060 12.3% 7,954 0 0 $21.67

Edmonds/Lynnwood 308 4,791,156 614,913 623,465 13.0% 50,427 0 12,210 $22.56

Everett CBD 322 3,543,632 402,686 402,686 11.4% (125,815) 0 0 $19.44

Federal Way/Auburn 334 5,368,692 666,711 816,676 15.2% 174,294 0 0 $18.84

Fort Lewis 8 28,094 0 0 0.0% 0 0 0 $0.00

Gig Harbor/W Pierce Co 158 1,621,773 223,037 224,789 13.9% (17,088) 0 0 $22.42

I-90 Corridor 81 6,109,316 792,910 874,063 14.3% (258,613) 0 0 $29.18

Kent Valley 189 3,091,722 503,189 513,504 16.6% 68,594 0 0 $20.08

Kirkland 246 5,217,613 494,563 520,192 10.0% 74,975 0 0 $28.01

Lake Union 214 11,750,841 590,185 619,830 5.3% 194,481 173,899 130,710 $27.69

Mercer Island 35 648,657 55,519 56,088 8.6% 1,510 0 0 $28.08

Mill Creek/Woodinville 83 1,049,186 122,067 122,067 11.6% 22,666 24,000 0 $26.20

N Snohomish County 165 1,036,929 99,692 99,692 9.6% 9,333 0 0 $16.10

Northgate/N Seattle 178 2,281,894 176,793 176,793 7.7% (9,289) 0 0 $22.83

Pioneer Sq/Waterfront 111 6,458,301 715,318 715,318 11.1% 101,082 0 0 $25.96

Puyallup 198 1,777,831 353,358 353,358 19.9% 8,688 0 0 $23.89

Queen Anne/Magnolia 201 5,437,854 647,986 662,992 12.2% (12,033) 0 0 $27.28

Redmond 188 7,522,541 603,732 626,173 8.3% 53,970 0 0 $24.79

Renton/Tukwila 314 9,254,982 668,915 668,915 7.2% 29,766 0 0 $21.05

S Everett/Harbor Point 156 2,778,919 152,937 152,937 5.5% 195,845 180,000 0 $22.79

S Seattle 294 5,148,103 727,745 733,221 14.2% 52,969 0 189,602 $30.09

S Snohomish County 57 466,735 52,368 52,848 11.3% (10,564) 0 0 $21.04

Seatac/Burien 199 2,466,871 386,702 386,702 15.7% 13,036 0 0 $19.66

Seattle CBD 115 27,388,404 3,716,168 3,960,114 14.5% (132,422) 0 0 $30.81

Spanaway 192 1,102,581 114,150 116,428 10.6% 14,638 0 0 $19.36

Suburban Bellevue 380 6,747,491 911,157 916,123 13.6% (52,793) 18,414 0 $30.23

Tacoma CBD 253 6,171,107 559,776 803,354 13.0% 135,794 120,000 57,350 $22.10

Tacoma Suburban 705 5,480,393 396,697 396,697 7.2% 73,532 0 0 $19.13

Univ. Place/Lakewood 286 2,219,467 194,592 196,687 8.9% (1,847) 0 0 $19.22

Totals 7,472 183,030,605 18,054,862 19,025,716 10.4% 984,331 643,313 411,872 $26.38








FIGURES AT A GLANCE




CBD 74 29,405,118 3,592,109 4,048,948 13.8% 50,349 120,000 0 $31.88

Suburban 180 27,012,047 3,004,856 3,090,115 11.4% 511,077 480,899 320,312 $31.97

Totals 254 56,417,165 6,596,965 7,139,063 12.7% 561,426 600,899 320,312 $31.92





CBD 250 12,362,499 1,483,298 1,526,877 12.4% (204,127) 0 57,350 $25.39

Suburban 2,679 84,156,273 8,104,556 8,459,122 10.1% 513,645 42,414 34,210 $24.35

Totals 2,929 96,518,772 9,587,854 9,985,999 10.3% 309,518 42,414 91,560 $24.49


Class C Market Statistics Mid-Year 2013



CBD 453 4,537,599 382,496 382,496 8.4% 17,103 0 0 $17.67

Suburban 3,836 25,557,069 1,487,547 1,518,158 5.9% 96,284 0 0 $19.32

Totals 4,289 30,094,668 1,870,043 1,900,654 6.3% 113,387 0 0 $19.08


Class A & B Market Statistics Mid-Year 2013



CBD 324 41,767,617 5,075,407 5,575,825 13.3% (153,778) 120,000 57,350 $29.75

Suburban 2,859 111,168,320 11,109,412 11,549,237 10.4% 1,024,722 523,313 354,522 $26.23

Totals 3,183 152,935,937 16,184,819 17,125,062 11.2% 870,944 643,313 411,872 $27.20





CBD 777 46,305,216 5,457,903 5,958,321 12.9% (136,675) 120,000 57,350 $29.08

Suburban 6,695 136,725,389 12,596,959 13,067,395 9.6% 1,121,006 523,313 354,522 $25.43

Totals 7,472 183,030,605 18,054,862 19,025,716 10.4% 984,331 643,313 411,872 $26.38












FIGURES AT A GLANCE


Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2013 2q 254 56,417,165 6,596,965 7,139,063 12.7% 342,854 3 473,899 2 320,312 $31.92 2013 1q 251 55,943,266 6,481,867 7,008,018 12.5% 218,572 2 127,000 5 794,211 $31.68 2012 4q 249 55,816,266 6,513,760 7,099,590 12.7% 834,525 3 604,292 7 921,211 $31.41 2012 3q 246 55,211,974 6,680,174 7,329,823 13.3% 81,786 2 151,492 10 1,525,503 $30.96 2012 2q 244 55,060,482 6,628,121 7,260,117 13.2% 1,019,336 1 157,816 12 1,676,995 $30.45 2012 1q 243 54,902,666 7,495,839 8,121,637 14.8% 389,167 0 0 13 1,834,811 $30.07

2011 243 54,902,666 7,868,854 8,510,804 15.5% 2,337,939 8 1,818,233 10 1,350,202 $30.29 2010 235 53,084,433 8,187,626 9,030,510 17.0% 1,394,741 10 1,768,123 10 2,184,049 $30.87 2009 225 51,316,310 7,888,175 8,657,128 16.9% (156,325) 14 3,938,266 14 3,171,812 $30.26 2008 211 47,378,044 3,854,671 4,562,537 9.6% 402,974 10 1,751,725 21 5,625,561 $36.10 2007 201 45,626,319 2,713,355 3,213,786 7.0% 1,437,277 7 1,472,159 18 5,011,206 $35.93 2006 194 44,154,160 2,409,709 3,178,904 7.2% 2,011,663 2 1,084,000 13 3,484,763 $29.64 2005 192 43,070,160 2,794,892 4,106,567 9.5% 1,166,999 1 42,000 4 1,676,500 $25.81 2004 191 43,028,160 4,314,216 5,231,566 12.2% 449,285 3 444,220 4 1,666,000 $26.03 2003 188 42,583,940 3,874,897 5,236,631 12.3% 883,684 0 0 4 984,220 $25.83 2002 188 42,583,940 3,993,711 6,120,315 14.4% 888,533 10 2,301,796 1 140,605 $26.66



Net Quoted


2013 2q 2,929 96,518,772 9,587,854 9,985,999 10.3% 100,573 2 42,414 5 91,560 $24.49 2013 1q 2,927 96,476,358 9,509,789 10,044,158 10.4% 208,945 0 0 6 125,764 $23.58 2012 4q 2,927 96,476,358 9,714,225 10,253,103 10.6% 89,980 1 15,960 6 125,764 $23.91 2012 3q 2,926 96,460,398 9,784,577 10,327,123 10.7% 35,774 3 77,491 5 80,374 $23.55 2012 2q 2,923 96,382,907 9,739,392 10,285,406 10.7% 281,381 1 15,470 6 115,451 $23.33 2012 1q 2,923 96,416,052 10,114,343 10,599,932 11.0% (169,942) 2 11,529 5 108,921 $23.27

2011 2,921 96,404,523 9,902,516 10,418,461 10.8% 908,095 10 400,417 7 120,450 $23.11 2010 2,912 96,015,766 10,050,518 10,937,799 11.4% 888,081 20 414,652 9 385,631 $22.86 2009 2,892 95,601,114 10,398,889 11,411,228 11.9% (328,298) 39 1,373,991 18 318,099 $23.23 2008 2,856 94,285,118 8,940,416 9,766,934 10.4% 1,473,112 64 2,798,462 37 1,333,047 $25.37 2007 2,795 91,509,708 7,916,445 8,464,636 9.2% 1,388,426 62 1,326,365 58 3,111,040 $25.69 2006 2,743 90,549,963 8,340,220 8,893,317 9.8% 2,387,261 53 818,317 74 2,754,880 $23.30 2005 2,696 89,973,134 10,151,262 10,703,749 11.9% 2,896,895 48 1,602,270 48 793,557 $21.02 2004 2,649 88,422,864 11,288,399 12,050,374 13.6% 244,107 41 903,415 42 1,452,023 $20.26 2003 2,614 88,040,463 11,013,028 11,912,080 13.5% 586,731 37 772,538 34 998,564 $20.04 2002 2,578 87,282,451 10,007,018 11,740,799 13.5% (110,274) 54 2,215,751 35 1,001,369 $20.90



Net Quoted


2013 2q 7,472 183,030,605 18,054,862 19,025,716 10.4% 517,585 5 516,313 7 411,872 $26.38 2013 1q 7,468 182,536,505 17,962,296 19,049,201 10.4% 466,746 2 127,000 11 919,975 $25.68 2012 4q 7,466 182,409,505 18,231,850 19,388,947 10.6% 1,044,652 4 620,252 13 1,046,975 $25.99 2012 3q 7,464 181,810,302 18,613,821 19,834,396 10.9% 131,213 5 228,983 15 1,605,877 $25.51 2012 2q 7,461 181,600,767 18,533,344 19,756,074 10.9% 1,230,207 2 173,286 18 1,792,446 $25.22 2012 1q 7,460 181,476,096 19,706,986 20,861,610 11.5% 223,268 2 11,529 18 1,943,732 $24.89

2011 7,459 181,480,915 19,894,302 21,089,697 11.6% 3,382,525 18 2,218,650 17 1,470,652 $25.28 2010 7,445 179,292,702 20,518,462 22,284,009 12.4% 2,106,128 30 2,182,775 19 2,569,680 $25.62 2009 7,418 177,179,181 20,473,908 22,276,616 12.6% (1,036,358) 55 5,323,037 32 3,489,911 $25.56 2008 7,369 171,951,539 14,415,415 16,012,616 9.3% 1,714,029 81 4,611,846 60 6,969,388 $28.34 2007 7,296 167,415,216 12,076,210 13,190,322 7.9% 2,977,248 74 2,821,595 82 8,176,277 $28.51 2006 7,243 165,179,286 12,584,611 13,931,640 8.4% 4,581,105 67 2,037,177 91 6,255,816 $24.63 2005 7,193 163,490,581 14,904,435 16,824,040 10.3% 4,023,262 60 1,707,469 63 2,597,541 $22.41 2004 7,139 161,861,661 17,501,058 19,218,382 11.9% 991,318 48 1,370,367 56 3,178,356 $21.92 2003 7,105 161,077,039 17,104,760 19,425,078 12.1% 1,208,468 48 886,305 42 2,005,516 $21.87 2002 7,065 160,298,714 15,914,046 19,855,221 12.4% 486,585 82 4,615,819 45 1,233,934 $22.76


Existing Inventory Vacancy Deliveries UC Inventory








Historical Rental RatesBased on Full-Service Equivalent Rental Rates


Vacancy by Available Space Type Vacancy by ClassPercent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Class


U.S. Rental Rate Comparison Future Space AvailableBased on Full-Service Equivalent Rental Rates Space Scheduled to be Available for Occupancy*

Source: CoStar Property® * Includes Under Construction Spaces Source: CoStar Property®

Seattle/Puget Sound United States Seattle/Puget Sound United States

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LEASING ACTIVITY






LEASING ACTIVITY


* Renewal

Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company

1 The Russell Bldg Tacoma CBD 218,900 2nd State Farm Insurance Flinn Ferguson Corporate R.E. Neil Walter Company

2 Metropolitan Park North Tower Seattle CBD 133,582 2nd N/A N/A Colliers International

3 2601 Elliott (Seattle Trade & Technology Ctr) Belltown/Denny Regrade 126,199 2nd Zulily N/A Jones Lang LaSalle

4 Sammamish Park Place Coal Creek/Issaquah 95,600 1st Costco N/A Washington Partners Corporate Real

5 Home Plate Center - North Bldg S Seattle 85,674 2nd RealNetworks Kidder Mathews CBRE

6 Columbia Bank Center Tacoma CBD 73,004 2nd State Farm Flinn Ferguson Corporate R.E. Neil Walter Company

7 City Center Bellevue* Bellevue CBD 54,290 1st HDR Engineering N/A N/A

8 705 Union Station Pioneer Sq/Waterfront 49,724 1st Intel Jones Lang LaSalle CBRE

9 Overlake Medical Pavilion Suburban Bellevue 47,427 2nd Overlake Hospital N/A CBRE

10 Russell Investments Center Seattle CBD 45,166 2nd Zillow, Inc. Flinn Ferguson Corporate R.E. CBRE

11 One Bellevue Center Bellevue CBD 37,458 2nd EBay N/A Broderick Group, Inc.

12 Highlands Campus Tech Ctr - Bldg A Bothell/Kenmore 36,081 1st N/A N/A Broderick Group, Inc.

13 Zetron Headquarters Redmond 34,608 2nd N/A N/A Broderick Group, Inc.

14 Bellevue Technology Center - Building A-St. H Suburban Bellevue 34,324 1st Trane CBRE Jones Lang LaSalle

15 Smith Tower Seattle CBD 32,593 2nd Dolce Vita Footwear, Inc N/A CBRE

16 51 University Pioneer Sq/Waterfront 32,000 1st Synapse N/A Kidder Mathews

17 Ranch Building Kent Valley 29,750 1st Puget Sound Energy N/A Hill-Raaum-Pietromonaco

18 Kirkland 405 Corporate Center - Bldg A2* Kirkland 28,941 2nd Market Leader, Inc. Washington Partners Corporate Real N/A

19 1441 North 34th Lake Union 25,712 1st Tableau Software N/A Jones Lang LaSalle

20 Redmond Hilltop Bldg 19* Redmond 23,917 1st Microvision, Inc. Washington Partners Corporate Real Broderick Group, Inc.

21 5th & Bell Bldg Belltown/Denny Regrade 22,624 1st Institute for Health Metrics and Evaluation Kinzer Real Estate Services Broderick Group, Inc.

22 Russell Investments Center Seattle CBD 22,583 2nd N/A N/A Jones Lang LaSalle

23 Ridgewood CS/Bldg G Suburban Bellevue 22,446 2nd N/A N/A CBRE

24 Smith Tower Seattle CBD 22,056 2nd N/A N/A CBRE

25 Ridgewood CS/Bldg G Suburban Bellevue 21,301 1st CompuCom N/A CBRE

26 Metropolitan Park West Seattle CBD 20,004 1st N/A N/A Broderick Group, Inc.

27 1616 Eastlake Bldg Lake Union 19,936 1st N/A N/A C&W Commerce

28 Met Park East Seattle CBD 19,805 2nd N/A N/A CBRE

29 Symetra Financial Center Bellevue CBD 18,505 1st Symetra Financial Corporation Flinn Ferguson Corporate R.E. Broderick Group, Inc.

30 1455 Leary Ballard/U Dist 18,406 2nd N/A N/A Colliers International

31 Schnitzer North Creek - Bldg Q Bothell/Kenmore 18,388 2nd Kindering and Pediatric Associates N/A Jones Lang LaSalle

32 224 Westlake Ave N Lake Union 18,189 1st N/A N/A CBRE

33 Cypress Bldg Suburban Bellevue 17,636 2nd Griptonite, Inc. N/A CBRE

34 Northview Corporate Center Bothell/Kenmore 17,587 1st Homestreet Bank N/A Jones Lang LaSalle

35 Kingsgate Place Kirkland 17,200 1st DR Horton N/A Neil Walter Company

36 Corporate Campus East III/F 520 Corridor 16,543 2nd N/A N/A CBRE

37 413 29th St NE Puyallup 15,646 1st Grant & Weber Studley N/A

38 James Tower Life Sciences Bldg Capitol Hill/Central Dist 15,515 2nd Swedish Medical Center N/A CBRE

39 Norton Bldg Seattle CBD 14,679 2nd N/A N/A CBRE

40 Norton Bldg Seattle CBD 14,672 1st Cardno ENTRIX N/A CBRE

Select Top Office Leases Based on Leased Square Footage For Deals Signed in 2013






SALES ACTIVITY

The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter

Source: CoStar COMPS®

Sales Volume & Price Sales Analysis by Building SizeBased on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales From April 2012 - March 2013

Bldg Size # RBA $ Volume Price/SF Cap Rate

< 50,000 SF 137 1,549,165 279,400,251$ 180.36$ 6.40%

50K-249K SF 22 2,408,502 611,120,207$ 253.73$ 6.54%

250K-499K SF 9 3,311,827 1,187,371,936$ 358.52$ 5.49%

>500K SF 6 5,755,358 2,904,203,799$ 504.61$ 5.17%

Source: CoStar COMPS® Source: CoStar COMPS®

U.S. Price/SF Comparison U.S. Cap Rate ComparisonBased on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales of 15,000 SF and Larger

Source: CoStar COMPS® Source: CoStar COMPS®

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SALES ACTIVITY

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Seattle/Puget Sound Office MarketMARKET HIGHLIGHTS – CLASS “A, B & C”




D O W N T O W N S E A T T L E M A R K E T

Deliveries, Absorption & Vacancy Historical Analysis, All Classes


Vacant Space Quoted Rental RatesHistorical Analysis, All Classes Historical Analysis, All Classes


Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 2q 1,684 73,782,920 7,955,247 10.8% 88,619 1 173,899 3 338,312 $29.59

2013 1q 1,684 73,631,234 7,892,180 10.7% 325,362 2 127,000 4 512,211 $29.06

2012 4q 1,682 73,504,234 8,090,542 11.0% 467,596 3 604,292 6 639,211 $28.79

2012 3q 1,679 72,899,942 7,953,846 10.9% (136,552) 1 70,000 9 1,243,503 $27.86

2012 2q 1,680 72,849,390 7,766,742 10.7% 1,039,156 1 157,816 10 1,313,503 $27.38

2012 1q 1,680 72,740,189 8,696,697 12.0% 148,582 0 0 10 1,453,319 $26.85

2011 4q 1,680 72,740,189 8,845,279 12.2% 356,276 0 0 8 1,148,710 $27.78

2011 3q 1,681 72,743,266 9,204,632 12.7% 177,310 0 0 5 826,379 $26.98

2011 2q 1,682 72,754,926 9,393,602 12.9% 984,375 2 600,000 3 706,379 $27.10

2011 1q 1,680 72,154,926 9,777,977 13.6% 399,878 4 913,197 5 1,306,379 $26.93

2010 4q 1,677 71,253,729 9,276,658 13.0% 544,218 2 92,177 8 1,879,013 $27.64

2010 3q 1,676 71,182,312 9,749,459 13.7% 319,372 3 177,741 10 1,971,190 $27.55

2010 2q 1,674 71,039,871 9,926,390 14.0% 403,217 6 788,962 12 1,940,931 $27.52

2010 1q 1,669 70,264,103 9,553,839 13.6% 409,841 3 292,142 16 2,546,077 $27.46

2009 4q 1,666 69,971,961 9,671,538 13.8% 70,896 4 1,071,861 16 2,742,272 $27.76

2009 3q 1,662 68,900,100 8,670,573 12.6% (516,120) 6 670,014 18 3,512,533 $27.76


UC InventoryDelivered InventoryExisting Inventory Vacancy

(0.200)

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2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

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acant

Delivered SF Absorption SF Vacancy

$25.00

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2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

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Direct SF Sublet SF







E A S T S I D E M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 2q 1,406 47,864,667 4,305,540 9.0% (68,306) 1 18,414 0 0 $28.73

2013 1q 1,405 47,846,253 4,218,820 8.8% (77,923) 0 0 1 18,414 $27.98

2012 4q 1,405 47,846,253 4,140,897 8.7% 214,562 1 15,960 1 18,414 $28.21

2012 3q 1,406 47,851,342 4,360,548 9.1% 47,219 1 7,607 2 34,374 $28.19

2012 2q 1,405 47,843,735 4,400,160 9.2% 170,482 0 0 2 23,567 $27.92

2012 1q 1,405 47,843,735 4,570,642 9.6% 205,149 0 0 2 23,567 $27.50

2011 4q 1,406 47,860,083 4,792,139 10.0% 313,399 0 0 2 23,567 $27.29

2011 3q 1,406 47,860,083 5,105,538 10.7% (77,794) 1 190,000 1 7,607 $26.93

2011 2q 1,405 47,670,083 4,837,744 10.1% 412,953 0 0 1 190,000 $27.05

2011 1q 1,405 47,670,083 5,250,697 11.0% 81,541 2 119,136 1 190,000 $27.34

2010 4q 1,403 47,550,947 5,213,102 11.0% 134,933 2 88,545 3 309,136 $27.48

2010 3q 1,401 47,462,402 5,259,490 11.1% 70,398 2 116,306 5 397,681 $27.16

2010 2q 1,399 47,346,096 5,213,582 11.0% 515,964 2 450,305 7 513,987 $27.31

2010 1q 1,397 46,895,791 5,279,241 11.3% (282,206) 0 0 6 640,292 $27.32

2009 4q 1,397 46,895,791 4,997,035 10.7% (195,529) 0 0 5 569,156 $27.30

2009 3q 1,398 46,908,633 4,814,348 10.3% (375,089) 0 0 4 566,611 $29.32



(0.400)

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N O R T H E N D M A R K E T






2013 1q 1,467 20,977,361 2,240,601 10.7% (14,304) 0 0 4 212,000 $22.00

2012 4q 1,467 20,977,361 2,226,297 10.6% 89,105 0 0 4 212,000 $22.10

2012 3q 1,467 20,977,361 2,315,402 11.0% 182,846 2 144,563 3 208,000 $21.93

2012 2q 1,465 20,832,798 2,353,685 11.3% (1,328) 0 0 4 328,563 $21.74

2012 1q 1,465 20,832,798 2,352,357 11.3% 4,514 2 11,529 3 324,563 $21.82

2011 4q 1,463 20,821,269 2,345,342 11.3% (121,629) 0 0 4 156,092 $21.46

2011 3q 1,463 20,821,269 2,223,713 10.7% 113,846 0 0 3 93,021 $21.97

2011 2q 1,463 20,821,269 2,337,559 11.2% 130,884 0 0 2 11,529 $21.85

2011 1q 1,463 20,821,269 2,468,443 11.9% 148,285 0 0 0 0 $22.00

2010 4q 1,463 20,821,269 2,616,728 12.6% 6,382 0 0 0 0 $22.05

2010 3q 1,463 20,821,269 2,623,110 12.6% 117,995 0 0 0 0 $22.13

2010 2q 1,463 20,821,269 2,741,105 13.2% 61,421 3 59,073 0 0 $22.26

2010 1q 1,460 20,762,196 2,743,453 13.2% 713 1 10,000 3 59,073 $22.31

2009 4q 1,459 20,752,196 2,734,166 13.2% 92,585 0 0 4 69,073 $22.56

2009 3q 1,459 20,752,196 2,826,751 13.6% (111,309) 1 67,000 4 69,073 $23.14



(0.150)

(0.100)

(0.050)

0.000

0.050

0.100

0.150

0.200

0.250

2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Perce

nt V

acant


$21.20

$21.40

$21.60

$21.80

$22.00

$22.20

$22.40

$22.60

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Dollar

s/SF/Y

ear

2.00

2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

Direct SF Sublet SF







S O U T H E N D M A R K E TMARKET HIGHLIGHTS – CLASS “A, B & C”





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 2q 1,036 20,182,267 2,385,797 11.8% 96,111 0 0 0 0 $19.87

2013 1q 1,036 20,182,267 2,481,908 12.3% 189,579 0 0 0 0 $19.29

2012 4q 1,036 20,182,267 2,671,487 13.2% 121,563 0 0 0 0 $19.76

2012 3q 1,036 20,182,267 2,793,050 13.8% 51,424 0 0 0 0 $19.55

2012 2q 1,036 20,182,267 2,844,474 14.1% 5,663 0 0 0 0 $19.54

2012 1q 1,036 20,182,267 2,850,137 14.1% (114,921) 0 0 0 0 $19.59

2011 4q 1,036 20,182,267 2,735,216 13.6% 23,498 0 0 0 0 $19.69

2011 3q 1,036 20,182,267 2,758,714 13.7% 122,012 0 0 0 0 $19.49

2011 2q 1,036 20,182,267 2,880,726 14.3% 103,946 1 57,768 0 0 $19.64

2011 1q 1,035 20,124,499 2,926,904 14.5% (191,571) 1 11,260 1 57,768 $19.73

2010 4q 1,034 20,113,239 2,724,073 13.5% (88,292) 0 0 2 69,028 $20.19

2010 3q 1,034 20,113,239 2,635,781 13.1% 152,000 1 12,052 2 69,028 $20.14

2010 2q 1,033 20,101,187 2,775,729 13.8% (11,264) 0 0 3 81,080 $20.37

2010 1q 1,033 20,101,187 2,764,465 13.8% (103,189) 0 0 2 23,312 $20.38

2009 4q 1,033 20,101,187 2,661,276 13.2% 121,995 2 130,408 2 23,312 $20.26

2009 3q 1,031 19,970,779 2,652,863 13.3% (132,233) 0 0 3 142,460 $20.40



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2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Perce

nt V

acant


$18.90

$19.00

$19.10

$19.20

$19.30

$19.40

$19.50

$19.60

$19.70

$19.80

$19.90

$20.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Dollar

s/SF/Y

ear

0.00

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1.00

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2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

Direct SF Sublet SF




T A C O M A M A R K E TMARKET HIGHLIGHTS – CLASS “A, B & C”






2013 1q 1,876 19,899,390 2,215,692 11.1% 44,032 0 0 2 177,350 $19.93

2012 4q 1,876 19,899,390 2,259,724 11.4% 151,826 0 0 2 177,350 $21.47

2012 3q 1,876 19,899,390 2,411,550 12.1% (13,724) 1 6,813 1 120,000 $21.21

2012 2q 1,875 19,892,577 2,391,013 12.0% 16,234 1 15,470 2 126,813 $21.21

2012 1q 1,874 19,877,107 2,391,777 12.0% (20,056) 0 0 3 142,283 $20.80

2011 4q 1,874 19,877,107 2,371,721 11.9% 233,777 3 154,045 3 142,283 $20.86

2011 3q 1,871 19,723,062 2,451,453 12.4% (46,753) 1 3,600 5 289,515 $19.79

2011 2q 1,870 19,719,462 2,401,100 12.2% 85,858 0 0 5 277,645 $19.85

2011 1q 1,871 19,723,162 2,490,658 12.6% 132,434 3 169,644 4 157,645 $21.07

2010 4q 1,868 19,553,518 2,453,448 12.5% (65,761) 0 0 6 312,503 $20.63

2010 3q 1,868 19,553,518 2,387,687 12.2% (84,268) 3 45,031 3 169,644 $20.70

2010 2q 1,865 19,508,487 2,258,388 11.6% 8,240 1 48,341 6 214,675 $20.99

2010 1q 1,864 19,460,146 2,218,287 11.4% (3,586) 1 2,100 6 253,088 $20.89

2009 4q 1,863 19,458,046 2,212,601 11.4% (5,993) 1 27,000 5 86,098 $21.12

2009 3q 1,862 19,431,046 2,179,608 11.2% (5,118) 3 133,939 5 90,533 $21.22



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0.000

0.050

0.100

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2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

Perce

nt V

acant


$19.00

$19.50

$20.00

$20.50

$21.00

$21.50

$22.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Dollar

s/SF/Y

ear

0.00

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1.00

1.50

2.00

2.50

3.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Millio

ns

SF

Direct SF Sublet SF

q2/2013 costar market report - seattle office space

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