Business Retention and Development Committee Agenda and Packet 2013 01 07

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12/13 Hat off the Press: 3rd Quarter 2012 NW Overview upcoming vacancy, but space that is not currently vacant and 2) sublease space. There are currently multiple blocks of space that are being marketed as available as tenants prepare to downsize or relocate (examples include 329 Interlocken, Westmoor Building 4, 555 Eldorado, blocks of space at 390 tnterlocken, etc.). The direct vacancy and the overall availability were only slightly affected by the -22,000 SF of negative absorption; increases were primarily attributed to the delivery of EOS, the 186,000 SF Hines speculative office development which delivered in July as 100o/0 available. !Rates: Average rental rates rose during the 3rd quarter by a significant margin of $1.12/SF to an average of $22.89/SF full service gross (FSG). Asking rates were also greatly affected by the delivery of the Class A EOS building (which tops the market with an asking rate of $21.00- $25.00/SF NNN). Not surprisingly, Class A rates led the overall increases in the quarter, averaging $28,62/SF FSG. Class. B rates also rose by $.27/SF to rest at $21,49/SF FSG. Despite the Northwest's increased vacancy rate in comparison to Metro Denver, the Northwest's rental rates continue to significantly outperform the Metro average, which rests at $20.08/SF FSG. Rental rates have risen over the last several quarters due to the high level of activity, rental rates and overflow activity from Boulder and LADo submarkets, which make Northwest rates look competitive. Due to increased rental rates, the delta between average asking rates and comparables rose to $1.741SF (vs. $1.41/SF 2nd quarter);; however, comparables are expected to rise to meet increased rates over the coming quarters — a trend that has been occurring over the last 2 years as the market has rebounded. we nant A ctiivt ity During the 3rd Quarter, the pipeline of active tenants was minimally decreased over the volume from 3rd quarter of 2011, at 992,200 SF (vs. 1,042,500 SF), a 4.8% dip. Despite the decrease in volume, the current list of active tenants represents a healthy number of tenants that are at lease, currently in the RFP process, or actively touring the market, which is predictive of near -term activity and positive absorption. Please do not hesitate to reach out with questions as you read through the full Overview, which can be accessed by clicking on the link below. Have a great week. Best, Frank, Austin and Blake ,sack `sere to dove.to breernail. cam Iry /ff 0030798c4cc6839ba645a4004780a502b2e973 2