Market Indicators Class A Class B

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

NEW SUPPLY

GalvestonBay

225Bellaire

The Woodlands

Humble

Pasadena

IAH

EFD

HOU

Cypress

Tomball

KatyBrookshire

LakeHouston

La Porte146

League City

Kingwood

Atascocita

Spring

Pearland

35

35

Richmond

WallerHockley

2421488

1488

Conroe

Magnolia

WillisLake

Conroe

Crosby

CBD

Ship Channel

Clear Lake

Baytown

Mont Belvieu

Dayton

149

149

Cleveland105

105

105

321

330

Alvin

Hitchcock

TexasCity

Sugar Land

The Woodlands office market not isolated from Houston’s current market conditions

Research Snapshot

THE WOODLANDS | OFFICEQ3 2016

Statistical Summary

1488

2920249

1314

242

Huffsmith-Kohrville

WoodlandsParkway

ResearchForest

Needham Rd.

Grogan’s Mill Rd.

Spring Stuebner

Gosling Rd.Kuykendahl

To Houston CBD

WOODLANDS SUBMARKET MAP

VACANCYRENTAL

RATE

Class # of Bldgs. Total (SF) (SF) Rate (%) (SF) Rate (%) Total (SF) Q3-2016 Q2-2016 Q3-2016 Q2-2016 AVG ($/SF)

The Woodlands

A 39 10,926,590 1,319,578 12.1% 75,480 0.7% 1,395,058 12.8% 11.5% 36,452 10,798 $37.05B 70 4,399,318 431,420 9.8% 69,346 1.6% 500,766 11.4% 11.1% -14,328 -29,786 $24.45C 4 308,161 25,119 8.2% 0 0.0% 25,119 8.2% 8.2% 0 0 $19.80Total 113 15,634,069 1,776,117 11.4% 144,826 0.9% 1,920,943 12.3% 11.3% 22,124 -18,988 $32.57

INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY RATE (%)NET ABSORPTION

(SF)

The Woodlands’ office market continues to feel the effects of Houston’s office market woes. The Woodlands is not isolated from Houston’s current market conditions, but does fare better than most of Houston’s other office submarkets. The Woodlands’ Q3 2016 office market vacancy rate increased 100 basis points over the quarter, but even with this increase its vacancy rate is still lower than that of the other major Houston office submarkets.

Leasing activity increased 30.4% over the quarter and 46.3% over the year. Webber, LLC signed a lease in 1725 Hughes Landing for 46,600 SF. The company will be moving in April 2017 from its current location at 9303 New Trails Dr where it occupies nearly 25,000 square feet.

Lisa Bridges Director of Market Research | Houston

HOUSTONTHE WOODLANDS

2 The Woodlands Research Snapshot | Q3 2016 | Office | Colliers International2

The average quoted rental rates are a mix of direct and sublet rates and are based on a blend of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph.

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

$18.00

$19.00

$20.00

$21.00

$22.00

$23.00

$24.00

$25.00

$26.00

$27.00

$28.00

Class B Rental Rate and Vacancy Percentage The Woodlands, TX Class B Rents Class B Vacancy

*Vacancy percentage includes direct and sublease space.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Available Sublease Space - The Woodlands

Class A Class B

Available Sublease SpaceQ3 2016

Class A: 277,680 SF or 2.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

$25.00

$27.00

$29.00

$31.00

$33.00

$35.00

$37.00

$39.00

Class A Rental Rate and Vacancy Percentage The Woodlands, TX

Class A Rents Class A Vacancy

*Vacancy percentage includes direct and sublease space.

3 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>

FOR MORE INFORMATIONLisa BridgesDirector of Market Research | Houston+1 713 830 2125lisa.bridges@colliers.com

3 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>

3 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International

Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International | The Woodlands1790 Hughes Landing Blvd., Suite 250The Woodlands, TX 77380+1 713 830 4011colliers.com/thewoodlands

Absorption and New SupplyWoodlands Class A Office

Woodlands Class B Office

-200,0000

200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,0001,800,0002,000,000

Net Absorption New Supply

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

Net Absorption New Supply