mb real estate's 2012 1st quarter chicago market overview

F I R S TQ U A R T E R

2012 CHICAGOMARKET OVERVIEW

The Chicago Market Overv iew is publ ished quar ter ly by MB Real Estate.

To obta in addi t iona l copies or for fur ther in format ion, p lease contact :

JACK GAVINSenior Research Coord inator

181 West Madison Street , Su i te 4700 Chicago, I l l ino is 60602

(312) 726-1700

w w w . m b r e s . c o m

CHICAGO

FIRST QUARTER

2012MARKET OVERVIEW SECTION TWO

CHICAGO CENTRAL BUSINESS DISTRICT

02 Chicago CBD Executive Summary

SUPPLY

03 New Developments04 Sublease Space05 Large Blocks of Direct Availability

DEMAND

06 Vacancy Rates07 Large Deals08 Absorption

FEATURES

09 Lease Comparables10 Investment Sales11 Forecast12 Submarket Map13 Market Statistics

TABLE OF CONTENTS

SECTION THREE

SUBURBAN CHICAGO

14 Suburban Chicago Executive Summary

SUPPLY

15 New Developments16 Sublease Space17 Large Blocks of Direct Availability

DEMAND

18 Vacancy Rates19 Large Deals20 Absorption

FEATURES

21 Gross Asking Rents22 Investment Sales23 Forecast24 Submarket Map25 Market Statistics

SECTION FOUR

ADDITIONAL INFORMATION

SECTION ONE

CHICAGO ECONOMY

01 Economic Analysis

26 Glossary27 About MB Real Estate

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SECTION ONE

CHICAGO ECONOMYECONOMIC ANALYSIS

Chicago’s Central Business District (CBD) office market showed signs of improvement and outperformed expectations in 2011.Despite this, the 2012 outlook is unclear. While the national economic recovery is slowly starting to gain traction, the local economicrecovery lags the rest of the nation. The Chicago MSA unemployment rate stayed at 9.6 percent in January, well above the nationalrate of 8.3 percent. Moody’s Economy.com, which tracks the recovery status of all the nation's metropolitan areas, maintains thatChicago’s economic outlook is “at risk.” Despite these facts, Chicago is still the business and financial hub of the Midwest andbenefits from having a strong labor pool. The city has also been dubbed “Silicon Prairie” due to a recent flurry in expansions bytech companies that supported the office market. However, Chicago is still largely dependent on its slow growing and matureindustries, and has comparatively poor state and local fiscal health. While stable, the area is unlikely to experience stellar growth.

While most economists feel we will not slip into another recession, growth has been revised down from previous estimates. TheFederal Reserve now predicts just 2.5 percent GDP growth in 2012, increasing to 2.8 percent in 2013. These figures are wellbelow historical average GDP and reiterates that the national economy is poised for slow growth.

Like the national economy, Chicago is recovering slowly but continues to face risksAs the labor market continues to make strides nationally, the Chicago hiring outlook is gradually improving. Total employment isup 3.3 percent year-over-year for professional and business services in the Chicago MSA. According to a recent Manpower survey,19 percent of respondents plan to increase staff levels in the second quarter, while 8 percent planning to cut staff. Manufacturinghas led the labor recovery, which does not necessarily translate into increased demand for office space.

In an effort to boost the local economy, Mayor Rahm Emanuel along with World Business Chicago and several local business leadersannounced Chicago’s new “Plan for Economic Growth and Jobs”. The plan has 10 over-arching strategies that should help aid thedowntown office market. Total employment in the Chicago MSA fell 7.4 percent peak-to-trough and has only rebounded 2.1 percentsince its low point in December 2009. Compared to the 2001 recession, total employment fell much further and has been noticeablyslower to recover. Despite strengthening office fundamentals in the CBD last year, Chicago has yet to create enough jobs to sustaina significant recovery.

While the slow-growing, uncertain economy remains the largest risk to the office market, several other factors are working againsta recovery. Underutilized space, often termed “shadow vacancy,” continues to be a risk as evidenced by many tenants’ plans tolessen their footprints upon renewal. Additionally, high tax rates in Illinois will influence corporate location decisions, with the stateneeding to offer major incentives for companies like Sears and the Chicago Mercantile Exchange to stay in Chicago and others torelocate to Chicago.

MB Real Estate’s baseline office forecast expects intermittent quarters of positive and negative absorption, resulting in little changeto the vacancy rate during the next two years.

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CHICAGO EMPLOYMENT WELL BELOW PEAK AND RECOVERING SLOWLY

Sources: MBRE Research, BLS, Chicago Sun-Times, Crain’s Chicago Business, World Business Chicago, Moody’s Economy.com

F I R S T Q U A R T E R 2 0 1 2 | C H I C A G O M A R K E T O V E R V I E W

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SECTION TWO

CENTRAL BUSINESS DISTRICTEXECUTIVE SUMMARY

CBD VACANCY AND YEAR-TO-DATE ABSORPTION SUMMARY

Direct Vacancy1Q2012

AChange from

4Q2011B

Change from 4Q2011

CChange from

4Q2011Total

Change from 4Q2011

Central Loop 10.2% 0.6% 15.9% -0.1% 18.0% 1.1% 14.2% 0.4%East Loop 18.5% -1.9% 23.3% -0.5% 15.0% 1.6% 19.4% 0.1%N. Michigan Ave. 22.1% 0.9% 26.7% 2.8% 14.9% 1.5% 21.3% 1.8%River North 12.7% -3.1% 9.8% 2.1% 10.6% -0.7% 11.1% -0.6%South Loop 20.4% -0.3% 24.7% -0.3% 22.8% -0.2%West Loop 14.7% 0.9% 12.7% -1.1% 16.8% 0.2% 14.6% 0.4%CBD Chicago Total 14.4% 0.4% 17.6% 0.1% 15.7% 0.8% 15.8% 0.4%

Net Absorption1Q2012

A B C Total

Central Loop (70,476) 35,064 (92,394) ((127,805)

East Loop 85,634 81,540 (100,173) 667,001

N. Michigan Ave. (36,161) (117,249) (84,606) ((238,016)

River North 118,716 (52,267) 19,518 885,967

South Loop 2,681 (11,552) ((8,871)

West Loop (129,167) 108,231 (33,839) ((54,775)

CBD Chicago Total (28,773) 55,319 (303,045) (276,499)

Numbers in parentheses are negative

After three consecutive quarters of positive demand, the CBD experienced a loss of 276,000 square feet of occupancy. Several largeleases were signed, but collectively will not significantly impact the overall market.

Key Indicators:• Direct vacancy increased 40 basis points to 15.8 percent. This was due to large negative absorption in the Class C segment.

Jobs are slowly returning, but prior employment losses have not fully materialized and may still weigh down the market.

• The largest leases of the quarter will result in a loss of occupancy. Foley & Lardner signed a 169,000 square foot renewal at321 North Clark reducing its current footprint by 42,000 square feet. Latham & Watkins signed the largest new transaction ofthe quarter by leasing 137,000 square feet at the AMA Building. However, it is also cutting space and will vacate 167,000 squarefeet at Willis Tower.

• After falling drastically since 2009, sublease availability edged up to just over 3 million square feet.

• The East Loop and River North were the only submarkets to see net positive demand this quarter. The West Loop Class Asegment, which outperformed the market throughout 2011, saw occupancy fall and its direct vacancy rate rise 90 basis points.

• Risks to the market include: fear of another recession; shrinking space requirement per employee; reduced storage needs dueto digital archiving; reduced server space needs due to cloud computing; increased use of telecommunication; and increasedcorporate tax rates in Illinois. Underutilized space remains the biggest concern to the outlook of the market.

• Potential upsides to the outlook include: businesses relocating to the CBD; rapidly expanding tech firms; no new construction;and increased corporate confidence.

Despite demand drivers that led the CBD to outperform the forecast in 2011, slow job growth and tenants who will eliminateunderutilized space are expected to mute a recovery.


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LYNEW DEVELOPMENTSNo new construction on the horizon, but developers courting potential anchor tenants

• While several large tenants explored potential newdevelopments this quarter, none made commitments.

• Developer John O’Donnell purchased a riverside site at400 West Randolph for $12.5 million and plans to builda large office tower. These plans have reportedly beenshared with some of the largest tenants in the market.

• One factor that could accelerate a new development isthe constraint on large, contiguous space. There are onlyfour contiguous blocks of Class A space greater than200,000 square feet available, compared to six tenantswho are actively evaluating the CBD for at least 200,000square feet.

• MB Real Estate has identified 11 proposed newdevelopment sites ranging from 350,000 to 1.3 millionsquare feet. While 60 percent preleasing is a typicalbenchmark, the developer of 625 West Adams believesit can pursue financing with 40 percent preleasing. Thisimplies that a tenant as small as 140,000 square feetcould potentially anchor a smaller, new development.

• OUTLOOK: New developments will be more possible aslarge blocks of Class A space are removed from themarket. The smaller of the proposed developments aremore likely to break ground first because they requiresignificantly less preleasing. Regardless, even thesmallest developments would not to be delivered until atleast 2014, with larger developments not beingexpected until at least 2017.

NEW DEVELOPMENT HALTED AS NO NEW BUILDINGS ARE ON THE HORIZON

2000 - 2011 INVENTORY ADDITIONS % Leased (Avg)

2000 - 5 Properties 2,870,576 sf 95.8%2001 - 2 Properties 904,436 sf 86.9%2002 - 2 Properties 2,236,364 sf 94.6%2003 - 0 Properties 0 sf 0.0%2004 - 1 Property 1,300,000 sf 100.0%2005 - 2 Properties 2,500,143 sf 97.4%2006 - 2 Properties 1,320,498 sf 96.9%2007 - 0 Properties 0 sf 0.0%2008 - 2 Properties 728,254 sf 70.6%2009 - 3 Properties 3,652,913 sf 81.4%2010 - 1 Expansion 933,710 sf 92.9%2011 - 0 Properties 0 sf 0.0%

Total - 20 Properties 16,446,894 sf

UNDER CONSTRUCTION % Leased

N/A

Total 0 sf

2000-2012 INVENTORY ADDITIONS

Delivered (2000-2011) 16,446,894 sfDelivered (2012) 0 sf

Total 16,446,894 sfUnder Construction 0 sfProposed Inventory 5,822,564 sf

Total 5,822,564 sf


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LYSUBLEASE SPACESublease availability increases, Playboy HQ lands subtenant

• Total available sublease space increased by 3.8 percent and is now just over 3 million square feet.

• Children’s Memorial Hospital will sublease Playboy Enterprises’ former headquarters. The existing lease on the 96,000 square footblock on the 15th and 16th floors of 680 North Lake Shore Drive runs through August 2022.

• The largest new sublease block on the market is 129,000 square feet leased by Citadel on the 7th and 8th floors at 131 South Dearborn.Citadel is now marketing a total of three floors for sublease through October 2017.

• Hostway Corporation is seeking a subtenant for 53,000 square feet of office and colocation space at 100 North Riverside.

• OUTLOOK: Despite the slight increase, available sublease space is still well below its historical average of 3.6 million square feet. Ascompanies continue to reconsider employee headcount and space efficiency, sublease availability could rise in the near term.

SUBLEASE AVAILABILTY TICKS UP DURING THE FIRST QUARTER

LARGE BLOCKS (MORE THAN 50,000 SQUARE FEET) OF SUBLEASE SPACE CURRENTLY AVAILABLE

CLASS ABuilding Address Size (sf) Occupancy Expiration Floor(s) Sublandlord

131 S Dearborn St 128,622 Vacant October 2017 7-8 Citadel131 S Dearborn St 64,125 Vacant October 2017 10 Citadel1 N Wacker Dr 55,437 Vacant March 2015 19-20 Merrill Lynch / Bank of America100 N Riverside 52,660 90 Days May 2023 7-8 Hostway Corporation

Total - 4 Spaces 300,844

CLASS BBuilding Address Size (sf) Occupancy Expiration Floor(s) Sublandlord

225 W Randolph St 238,778 Vacant December 2022 22-30 AT&T350 W Mart Ctr 138,225 Vacant January 2016 3-5 AT&T600 W Chicago Ave 117,101 Vacant November 2015 2 Level 3 Communications222 N LaSalle St 78,974 Vacant May 2014 17-18 Merrill Lynch / Bank of America180 N LaSalle St 61,011 Vacant July 2015 5-7 Accenture


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Italicized addresses indicate space is new on the market


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LYLARGE BLOCKS OF DIRECT AVAILABILITYNumber of large blocks decreases, but average block size rises

• Compared to last quarter, five fewer blocks greater than 50,000square feet are available. However, the average size per largeblock increased by 13,000 to 108,000 square feet.

• The largest block removed this quarter was 106,000 square feetat 500 West Monroe, due to the recent extension and expansionof GE Capital. The building still has 392,000 square feet ofcontiguous, premier high-rise space available, which is the largestblock in the CBD.

• The largest new block this quarter is 374,000 square feet at 515North State Street. The former American Medical Associationheadquarters space is not vacant until late 2013, however, it isbeing marketed to the largest tenants in the market.

• MB Real Estate has identified 32 tenants actively seeking 50,000square feet or more in the CBD. However, with 68 blocksavailable, a glut of space exists in the market. When consideringblocks of 200,000 square feet or more, there are only eightspaces compared to six tenants of such size. While these tenantsusually have the option to renew, this segment of the marketremains the most constrained.

CLASS BBuilding Address Size (sf) Submarket

222 N LaSalle St * 278,040 Central Loop

303 E Wacker Dr * 241,206 East Loop

130 E Randolph St * 188,777 East Loop

55 E Monroe St 175,263 East Loop

300 S Riverside Plz * 161,708 West Loop

333 S Wabash Ave 147,500 East Loop


410 N Michigan Ave * 125,817 North Michigan Avenue

205|225 N Michigan Ave 120,446 East Loop

350 W Mart Ctr * 106,168 River North

401 N Michigan Ave * 104,726 North Michigan Avenue

330 N Wabash Ave 98,489 North Michigan Avenue

200 N LaSalle St 97,833 Central Loop

1 N Dearborn St 97,261 Central Loop

120 S LaSalle St 94,995 Central Loop

350 W Mart Ctr 85,000 River North

1 & 2 Prudential Plz 73,644 East Loop

175 W Jackson Blvd ** 68,539 Central Loop

175 W Jackson Blvd ** 67,725 Central Loop

233 N Michigan Ave * 67,028 East Loop


222 Merchandise Mart Plz 63,193 River North


55 W Monroe St 55,064 Central Loop

33 W Monroe St 54,073 Central Loop


401 N Michigan Ave 51,870 North Michigan Avenue

222 Merchandise Mart Plz 50,000 River North

28 Blocks 2,894,516

CLASS ABuilding Address Size (sf) Submarket

500 W Monroe St 392,063 West Loop

515 N State St * 373,608 North Michigan Avenue

200 E Randolph St 340,959 East Loop

233 S Wacker Dr 291,440 West Loop

111 W Illinois St 141,503 River North

10 S Dearborn St * 139,165 Central Loop

161 N Clark St * 116,964 Central Loop

500 W Madison St 92,924 West Loop


455 N Cityfront Plaza Dr 87,700 North Michigan Avenue



333 W Wacker Dr 80,736 West Loop

227 W Monroe St * 75,850 West Loop

500 W Madison St 74,925 West Loop

77 W W k D 67 342 C t l L77 W Wacker Dr 67,342 Central Loop

227 W Monroe St 64,033 West Loop

980 N Michigan Ave 62,384 North Michigan Avenue

321 N Clark St 61,431 River North


222 W Adams St 59,436 West Loop


181 W Madison St 56,199 Central Loop

200 E Randolph St 54,708 East Loop

190 S LaSalle St 54 225 Central Loop190 S LaSalle St 54,225 Central Loop


525 W Van Buren St * 51,538 West Loop

227 Blocks 3,172,774

CLASS CBuilding Address Size (sf) Submarket

309-311 W Monroe St * 214,484 West Loop

401-465 E Illinois St 210,000 North Michigan Avenue

11 S LaSalle St 150,166 Central Loop

435-445 N Michigan Ave 129,947 North Michigan Avenue

401 S State St 110,898 East Loop

730-740 N Rush St 101,505 North Michigan Avenue

111 W Jackson Blvd 97,426 Central Loop

619 S LaSalle St 89,000 South Loop

360 N Michigan Ave 76,855 East Loop

33 S State St 70,107 East Loop

104 S Michigan Ave 63,006 East Loop

111 N Canal St 57,800 West Loop

104 S Michigan Ave ** 56,532 East Loop

13 Blocks 1,250,388

Italicized addresses indicate space is new on the market* Block of space is for future occupancy**Block of space will be vacated in the upcoming quarter


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VACANCY RATESVacancy rates rise, erasing much of last year’s decline

• The direct vacancy rate in the CBD rose 0.4 percent during the quarter to 15.8 percent. The total vacancy rate (which includes subleasespace) increased by 0.5 percent to 18.1 percent.

• While Class A vacancy fell throughout 2011, its direct vacancy rate increased 40 basis points to 14.4 percent this quarter. Class Bdirect vacancy saw a slight increase. The direct vacancy rate of Class C buildings jumped 80 basis points amidst 303,000 square feetof negative absorption.

• This quarter ends three consecutive quarters of falling vacancy rates. Many tenants are cutting their space requirements upon leaseexpiration, and those who are expanding have not generated enough demand to compensate.

• OUTLOOK: MB Real Estate expects direct vacancy to be volatile through the intermediate term, oscillating between slightly positive andnegative changes.

HISTORIC YEAR-END VACANCY MARKET STATISTICS BY BUILDING CLASS: CLASS C NEARS 16 PERCENT

HISTORIC DIRECT VACANCY: VACANCY RISES DURING THE FIRST QUARTER DE

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LARGE DEALSNumber of transactions increase, but largest deals result in contractions

• Law Firm Foley & Lardner signed the largest transaction by renewing 169,000 square feet at 321 North Clark. However, the new leaserepresents a 42,000 square foot reduction from its current occupancy.

• Latham & Watkins became the third 100,000 square foot-plus tenant to sign at the renovated AMA Building (formerly the IBM Building)by leasing 137,000 square feet. It will vacate approximately 167,000 square feet at Willis Tower, representing another large law firmcontraction.

• 30 transactions greater than 20,000 square feet were tracked, compared to 26 one quarter ago. Technology firms continue to bring themost new demand to the CBD, evidenced by the new leases signed by GrubHub and the Chicagoland Entrepreneurial Center’s “1871”tech incubator.

• OUTLOOK: Tenants have shown an increased confidence in real estate decision-making as economic fears are starting to ease. Largedeal activity should continue to be robust, but several companies evaluating the market are expected to shed space from their currentfootprints.

NEW

Tenant Type Submarket Building Address Size (sf)

Latham & Watkins New North Michigan Ave 330 N Wabash 137,000Chicago Title and Trust Relo Central Loop 10 S LaSalle 83,000Dotomi New West Loop 101 N Wacker 80,000Razorfish Relo River North 222 Merchandise Mart 65,000GrubHub New Central Loop 111 W Washington 59,463Chicagoland Entrepreneurial Center (1871) New River North 222 Merchandise Mart 50,000Johnson Publishing New East Loop 200 S Michigan 40,051PLS Financial New West Loop 1 S Wacker 30,000Ghafari Relo East Loop 122 S Michigan 26,495EMC Corporation New River North 353 N Clark 23,000Prophet New West Loop 564 W Randolph 22,198Caherciveen Partners New West Loop 500 W Madison 21,403Total - 12 Deals 637,610

RENEWAL/EXPANSION/SUBLEASE


Foley & Lardner Ren/Cont River North 321 N Clark 169,000TTX Ren West Loop 101 N Wacker 103,000Children's Memorial Hospital Sub North Michigan Ave 680 N Lake Shore 96,000Medicus International Ren River North 222 Merchandise Mart 70,000Schawk Ren Central Loop 1 N Dearborn 68,146Burke, Warren, MacKay, and Serritella, P.C. Ren/Exp North Michigan Ave 330 N Wabash 54,882Levenfeld Pearlstein Ren Central Loop 2 N LaSalle 53,175McDermott, Will & Emory Sub East Loop 130 E Randolph 50,000Segal Company Ren West Loop 101 N Wacker 49,898Walgreens e-Commerce Institute Exp East Loop 33 S State 47,100Initiate Systems Ren West Loop 200 W Madison 46,787Parsons Corporation Ren West Loop 10 S Riverside 36,812University of Chicago Sub East Loop 130 E Randolph 23,199Prescott Medical Ren East Loop 205 N Michigan 22,222DiMeo, Schenider & Associates Ren/Exp West Loop 500 W Madison 22,182Balyasny Asset Management Ren Central Loop 181 W Madison 21,207Quantitative Risk Management Exp Central Loop 181 W Madison 20,805Emmi Solutions Ren/Exp West Loop 300 W Adams 20,455Total - 18 Deals 974,870

LARGE LEASE TRANSACTIONS

Abbreviations: Cont - Contraction Exp - Expansion Relo - Relocation Ren - Renewal Sub - Sublease


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ABSORPTIONChange in occupancy minimal in Class A and B, but Class C sees significant losses

• After three consecutive quarters of positive demand, the CBD experienced negative absorption. The negative net change in occupiedspace totaled 276,000 square feet.

• Absorption was slightly negative in the Class A segment and slightly positive in Class B. However, Class C buildings experienced significantnegative absorption of over 303,000 square feet.

• Only the East Loop and River North submarkets experienced positive absorption. Class A buildings in the West Loop, which experiencedthe greatest demand of any segment throughout 2011, experienced 129,000 square feet of negative absorption.

• OUTLOOK: The negative absorption experienced this quarter suggests that slow job growth and tenant contractions could not be offsetby new demand as they were for most of 2011. We expect intermittent quarters of positive and negative absorption throughout 2012.

HISTORIC ABSORPTION: OCCUPANCY FALLS AFTER THREE QUARTERS OF POSITIVE DEMAND

HISTORIC ABSORPTION BY SUBMARKET: RIVER NORTH, EAST LOOP EXPERIENCE POSITIVE ABSORPTION


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SLEASE COMPARABLESMore signs of stabilization as concession packages decrease

NEW DEALSA B C A B C A B C A B C

2Q2011 - 1Q2012 $19.29 $14.73 $13.35 $43.23 $31.10 $23.13 6.9 6.9 5.5 8.1 7.0 5.9

2Q2010 - 1Q2011 $20.04 $15.11 $10.98 $45.31 $25.31 $21.61 8.8 6.7 7.8 8.2 6.6 6.7

2Q2009 - 1Q2010 $19.79 $15.29 $11.97 $39.52 $26.87 $17.74 8.2 6.2 4.4 7.9 6.4 5.6

2Q2008 - 1Q2009 $22.26 $17.04 $13.85 $43.52 $38.87 $32.74 5.2 4.5 4.4 8.5 7.2 7.6

2Q2007 - 1Q2008 $19.40 $15.73 $12.25 $40.56 $38.87 $24.66 4.8 4.4 4.1 7.3 6.7 6.5

2Q2006 - 1Q2007 $18.12 $13.93 $15.39 $49.24 $38.58 $15.19 6.2 5.1 1.9 9.0 7.4 4.8

2Q2005 - 1Q2006 $18.09 $12.67 $10.25 $49.16 $38.58 $26.99 7.2 5.7 4.9 8.9 7.6 7.1

2Q2004 - 1Q2005 $16.67 $12.92 $10.05 $43.12 $42.82 $23.24 7.0 7.2 3.8 10.1 8.7 6.2

2Q2003 - 1Q2004 $17.22 $12.63 $9.43 $40.92 $36.90 $15.89 4.4 5.6 3.1 8.6 8.2 6.2

2Q2002 - 1Q2003 $22.02 $15.34 $11.84 $36.32 $33.66 $27.95 1.6 3.4 1.4 8.1 9.1 6.0

2Q2001 - 1Q2002 $22.65 $16.47 $16.61 $26.88 $27.08 $24.72 1.0 0.3 1.1 7.2 8.4 7.8

2Q2000 - 1Q2001 $21.85 $15.95 $15.42 $26.89 $24.01 $31.82 0.5 0.1 0.1 7.8 6.7 6.1

2Q1999 - 1Q2000 $20.60 $15.89 $12.26 $27.28 $27.03 $22.19 0.2 0.3 0.1 8.2 7.5 7.4

RENEWAL DEALSA B C A B C A B C A B C

2Q2011 - 1Q2012 $19.08 $13.91 $13.24 $15.05 $9.29 $11.37 4.4 3.9 3.7 5.4 4.0 4.1

2Q2010 - 1Q2011 $19.79 $15.18 $10.15 $17.83 $10.43 $6.79 5.8 4.2 4.2 6.1 4.6 4.9

2Q2009 - 1Q2010 $17.91 $15.71 $11.56 $13.87 $10.45 $6.79 4.4 3.3 4.3 5.5 5.0 5.0

2Q2008 - 1Q2009 $21.72 $16.64 $15.36 $23.52 $15.27 $16.40 3.0 2.9 3.1 6.3 5.5 7.3

2Q2007 - 1Q2008 $20.16 $15.58 $13.57 $16.26 $16.88 $17.70 3.6 2.7 2.6 6.6 5.6 7.4

2Q2006 - 1Q2007 $16.07 $13.07 $16.68 $21.70 $17.72 $7.13 4.5 3.6 0.8 6.7 7.5 4.5

2Q2005 - 1Q2006 $16.12 $12.60 $14.39 $23.42 $15.16 $9.02 5.2 2.0 0.0 7.6 6.1 5.9

2Q2004 - 1Q2005 $16.44 $13.07 $10.12 $21.49 $23.76 $10.03 3.5 3.8 0.5 8.1 8.0 6.5

2Q2003 - 1Q2004 $18.54 $13.59 $10.27 $22.29 $17.23 $9.09 2.0 3.1 1.5 8.3 7.0 6.3

2Q2002 - 1Q2003 $22.24 $14.64 $14.50 $15.91 $15.12 $10.15 0.9 1.5 0.4 7.1 7.0 3.9

2Q2001 - 1Q2002 $22.53 $16.54 $12.16 $9.94 $9.25 $5.55 0.2 0.1 0.0 5.7 6.9 4.5

2Q2000 - 1Q2001 $22.43 $16.71 $15.82 $9.65 $10.98 $6.33 0.0 0.0 0.0 4.9 6.4 4.1

2Q1999 - 1Q2000 $20.77 $14.43 $14.36 $15.09 $14.00 $10.79 0.1 0.0 0.0 6.5 6.6 5.6

AVERAGE NET INITIAL RATE

AVERAGE NET INITIAL RATE

AVERAGE ABATEMENT(MONTHS)

AVERAGE TERM(YEARS)

AVERAGE ABATEMENT(MONTHS)

AVERAGE TERM(YEARS)

AVERAGE TENANT IMPROVEMENT

AVERAGE TENANT IMPROVEMENT

• Lease metrics are compared on a four-quarter basis instead of calendar year, allowing full years of data comparison.

• Average rental rates for Class A buildings fell 3.8 percent for new transactions and 3.6 percent for renewals from the previous year.However, gross rent abatement has fallen from 1.1 months per lease year to 0.9 months for new deals and from 1.0 months to 0.8months for renewals. This signals that net effective rents may grow in the near term as concessions peter out.

• Class B initial rates for new transactions are down 2.5 percent and down 8.4 percent for renewals. Average abatement and tenantimprovement allowances have held relatively steady.

• Initial rates for Class C increased greatly for both new and renewal transactions, which is at odds with its occupancy losses this quarter.Average abatement also increased.

• OUTLOOK: The Class A segment experienced significant positive absorption in 2011. Also, concession packages have begun to trenddownward in this segment. Thus, Class A net effective rents should slowly increase throughout the year. Class B and C net effective rentsmay take longer to grow since vacancy is higher in such buildings.

AVERAGE LEASE TERMS ON NEW AND RENEWAL DEALS

All rates are shown as net and do not include tax and operating costs for building. Numbers will be revised as new data are reported in subsequent quarters


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SINVESTMENT SALESWider range of assets trading hands compared to recent quarters

• Eight buildings sold and two were placed under contract during an active first quarter. Investor appetite has now expanded to all classes,compared to mainly core asset transactions seen over the past two years.

• The largest transaction on a per-square-foot basis was Irvine Company’s purchase of a 50 percent stake in 1 North Wacker for $444per square foot. The trophy building was 95 percent leased at the time of the sale.

• After securing new large tenants in 2010 to long-term leases, Vornado Realty Trust sold the 1.2 million square foot building at 350 WestMart Center to Shorenstein Properties for $189 per square foot.

• Multiple Canadian investors entered the Chicago market. Elad Canada purchased a 30 percent stake in 33 South State. 200 NorthLaSalle is under contract to be sold to Vancouver-based Onni Group for over $95 million. 141 West Jackson is under contract to be soldto an undisclosed Canadian pension fund.

• Bentley Forbes is seeking to sell a partial stake in Prudential Plaza (130 East Randolph and 180 North Stetson), while GE Pension Trustis offering 200 & 230 West Monroe for sale.

INVESTMENT SALES: APPETITE EXPANDS TO ALL ASSET CLASSES

Building Address Sale Date Size (sf) PricePrice per sf * Class Seller Status (Buyer or Listing Agent)

130 E Randolph 1,192,357 B180 N Stetson(Partial Stake)

976,137 A

150 N Michigan New On Market 661,477 - - B SEB Asset Management Marketing (Jones Lang LaSalle)

230 W Monroe 623,524 B

200 W Monroe 538,890 B

311 W Monroe New On Market 385,000 $40,000,000 $104 B AREA Partners Marketing (Eastdil Secured)

32 W Randolph On Market 226,666 $13,300,000 $59 C David & Barbara Kalish Marketing (CB Richard Ellis)

141 W Jackson Under Contract 1,400,000 $175,000,000 $125 B CME GroupUndisclosed Pension Fund /Jones Lang LaSalle & Holly Duran

200 N LaSalle Under Contract 645,170 $95,000,000 $147 A Younan Properties Onni Group / Eastdil Secured

1 N Wacker(50% Stake)

1st Qtr 2012 1,400,000 $298,000,000 $444 AHines Real Estate Investment Trust

Irvine Co. / Eastdil Secured

350 W Mart 1st Qtr 2012 1,208,000 $228,000,000 $189 B Vornado Realty TrustShorenstein Properties / Eastdil Secured

111 E Wacker 1st Qtr 2012 1,002,950 $150,600,000 $150 B Parkway Properties CommonWealth REIT

33 S State (60% Stake)

1st Qtr 2012 943,283 $128,500,000 $227 CJoseph Freed & Associates

Winthrop Realty Trust JV Elad Canada

20 N Wacker 1st Qtr 2012 915,000 $125,800,000 $137 C Tishman Speyer Berkley Properties / HFF

55 W Monroe 1st Qtr 2012 803,046 $136,000,000 $169 A LaSalle Investment Hearn Co. / Jones Lang LaSalle

500 N Michigan 1st Qtr 2012 322,443 $70,900,000 $220 B Zeller Realty Group Macerich Co. / Eastdil Secured

209 W Jackson 1st Qtr 2012 144,465 $12,000,000 $83 C M&J Wilkow Farbman Group

New On Market $210,000,000 $181 GE Pension Trust Marketing (Holliday Fenoglio Fowler)

New On Market $500,000,000 $231 BentleyForbes Marketing (CBRE)

*Price per square foot - based off estimated selling price for new to market buildings


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SFORECASTJob growth not robust enough yet to sustain a significant recovery

Despite this quarter’s negative absorption, the vacancyrate is expected to remain virtually unchanged over theyear, with alternating quarters of positive and negativeabsorption ending with a rate just 0.1 percent higher than2011. With few exceptions, many tenants are looking toreduce their space requirements to achieve greaterefficiency.

Occupancy is currently 0.6 percent below its 2007 peak,while employment is 5.5 percent below peak. During pastrecessions, there was a strong correlation between thetwo metrics. Thus, MB Real Estate forecasts a slowrebound.

The CBD has strong demand drivers, which have attractedcompanies such as GrubHub to take advantage of publictransportation and the growing pool of young talent. Techcompanies have and will continue to expand theirpresence. Google is in the market to expand by as muchas 200,000 square feet, while SalesForce.com is seekingto open a new 100,000 square foot Chicago sales office.

However, the CBD faces multiple obstacles that are likelyto mute the recovery. There is a growing sentiment thatcompanies currently occupy more space than they actuallyneed. Many firms have adopted alternative workplacestrategies such as hotelling. Also, archives are goingdigital, and server rooms are being replaced by cloud

HISTORIC & PROJECTED VACANCY: OCCUPANCY WILL FLATTEN OVER THE NEXT TWO YEARS

YearTotal Historic and

Forecasted Inventory (sf)

Total Historic & Forecasted

Occupancy (sf)

Direct Vacancy %

1996 120,244,884 101,285,488 15.8%1997 120,434,748 104,939,294 12.9%1998 119,972,770 106,058,995 11.6%1999 118,691,577 106,744,585 10.1%2000 121,440,276 109,533,759 9.8%2001 122,776,164 108,743,284 11.4%2002 124,713,268 107,598,500 13.7%2003 125,037,423 106,754,119 14.6%2004 126,452,643 106,568,104 15.7%2005 128,385,650 105,737,728 17.6%2006 126,478,575 108,402,912 14.3%2007 125,626,639 110,969,808 11.7%2008 125,269,078 110,833,045 11.5%2009 130,038,076 110,112,891 15.3%2010 130,539,796 109,602,891 16.0%2011 130,649,210 110,516,410 15.4%2012 130,992,007 110,746,857 15.5%2013 130,992,007 110,862,080 15.4%

624,814

(276,499)

1996-2011 Absorption Avg:

YTD 2012 Absorption:

Total projected inventory based on addition of projects currently under construction

Occupancy is forecast based on proprietary assumptions regarding the Chicago MSA’s total employment

change and the office industry’s historical performance which trails the overall economy.

technology. Most notably, job creation has lagged as the Chicago metro unemployment rate was at 9.6 percent as of January, well abovethe United States and Midwest averages. Collectively, these factors will hinder demand.


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SSUBMARKET MAP


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SMARKET STATISTICS

CENTRAL LOOPRBA(sf)

YTDAbsorption (sf)

1st QuarterAbsorption (sf)

Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)

Total Vacancy Rate (Direct + Sublease) %

Class A 13,566,827 (70,476) (70,476) 1,378,542 10.2% 12,188,285 448,470 13.5%

Class B 14,147,852 35,064 35,064 2,245,687 15.9% 11,902,165 326,457 18.2%

Class C 8,624,259 (92,394) (92,394) 1,549,968 18.0% 7,074,291 108,355 19.2%

TTotal 36,338,937 (127,805) (127,805) 5,174,196 14.2% 31,164,741 883,282 16.7%

EAST LOOPRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 4,040,431 85,634 85,634 748,847 18.5% 3,291,584 127,658 21.7%

Class B 10,370,547 81,540 81,540 2,413,867 23.3% 7,956,680 139,275 24.6%

Class C 8,479,720 (100,173) (100,173) 1,275,622 15.0% 7,204,098 57,546 15.7%

Total 22,890,698 67,001 67,001 4,438,336 19.4% 18,452,362 324,479 20.8%

N. MICHIGAN AVE.RBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 3,952,669 (36,161) (36,161) 872,670 22.1% 3,079,999 123,375 25.2%

Class B 4,661,752 (117,249) (117,249) 1,242,955 26.7% 3,418,797 46,634 27.7%

Class C 4,382,679 (84,606) (84,606) 654,657 14.9% 3,728,023 29,676 15.6%

Total 12,997,101 (238,016) (238,016) 2,770,282 21.3% 10,226,819 199,685 22.9%

RIVER NORTHRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 4,004,961 118,716 118,716 510,281 12.7% 3,494,680 72,926 14.6%

Class B 3,626,997 (52,267) (52,267) 356,085 9.8% 3,270,912 390,968 20.6%

Class C 5,666,059 19,518 19,518 603,314 10.6% 5,062,744 248,537 15.0%

Total 13,298,017 85,967 85,967 1,469,680 11.1% 11,828,337 712,431 16.4%

SOUTH LOOPRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 1,019,325 2,681 2,681 208,231 20.4% 811,094 23,639 22.7%

Class C 1,232,239 (11,552) (11,552) 304,225 24.7% 928,014 6,711 25.2%

Total 2,251,564 (8,871) (8,871) 512,456 22.8% 1,739,108 30,350 24.1%

WEST LOOPRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 27,066,432 (129,167) (129,167) 3,981,285 14.7% 23,085,147 644,975 17.1%

Class B 9,726,080 108,231 108,231 1,237,235 12.7% 8,488,845 88,392 13.6%

Class C 6,423,179 (33,839) (33,839) 1,080,714 16.8% 5,342,465 123,896 18.8%

Total 43,215,691 (54,775) (54,775) 6,299,233 14.6% 36,916,457 857,263 16.6%

TOTALSRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Class A 53,650,644 (28,773) (28,773) 7,699,856 14.4% 45,950,789 1,441,043 17.0%

Class B 42,533,228 55,319 55,319 7,495,828 17.6% 35,037,400 991,726 20.0%

Class C 34,808,135 (303,045) (303,045) 5,468,500 15.7% 29,339,635 574,721 17.4%

Total CBD 130,992,007 (276,499) (276,499) 20,664,184 15.8% 110,327,824 3,007,490 18.1%

*Numbers in parentheses are negative


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SECTION THREE

SUBURBAN CHICAGOEXECUTIVE SUMMARY

The Suburban Chicago market experienced at least 1 million square feet of negative absorption annually from 2008 to 2011. Occupancylosses have surpassed total employment losses on a percentage basis. While demand was slightly positive this quarter, Suburban Chicagomay see negative absorption again in 2012 as numerous factors weigh against its recovery.

Key Indicators: • The North and Northwest submarkets posted positive demand. The East-West, which outperformed the other submarkets in 2011, saw

little change in occupancy. Occupancy increased in Class A buildings in the O’Hare submarket, but decreased in Class B and C.

• The flight-to-quality trend continues to be evidenced in the suburbs. Vacancy rates dipped 0.2 percent in Class A buildings and 0.1 percentin Class B buildings. Class C buildings, however, saw vacancy increase 0.3 percent.

• AT&T continues to bog down the sublease market with its 1.2 million square foot corporate campus and a 239,000 square foot buildinglisted as available. With United Airlines and Sara Lee relocating to the CBD and AT&T and Motorola shedding space, the potential fornumerous vacant corporate campuses is high.

• Leasing activity increased slightly, but most large transactions are not generating new demand. This “musical chairs” trend is evidencedby companies leasing blocks in their current submarkets, but creating new vacant blocks by leaving behind their former spaces.

• Asking rents have held fairly steady in Class A buildings, but have declined further in Class B and C buildings. Landlords must increaseconcessions to entice tenants to stay or relocate within the suburbs.

• While the CBD earns enough demand from its labor pool to counteract an increased tax burden, Suburban Chicago lacks similar drivers.

• Outdated product weighs on the suburbs and fuels the glut of vacant space. Because of this, Allstate is seeking to tear down its formerheadquarters building in South Barrington. However, other obsolete buildings are still listing space and driving down market economics.

• Speculative construction is, and will remain, at a standstill. The only project underway is the build-to-suit headquarters for AstellasPharma US in Glenview, which has created a large block of sublease availability at its former location in Deerfield.

Occupancy is 7.2 percent below peak in Suburban Chicago compared to a 5.5 percent peak-to-current total employment loss. Corporatedefections, as well as underutilized space, remain the biggest risks to the market; companies have leased more space than they need andwill reduce square footage upon lease expirations.

SUBURBAN VACANCY AND YEAR-TO-DATE ABSORPTION SUMMARY

Direct Vacancy1Q2012

AChange from

4Q2011B

Change from 4Q2011

CChange from

4Q2011Total

Change from 4Q2011

East-West 19.7% 0.3% 24.1% -0.2% 22.6% 0.1% 21.6% 0.0%North 19.7% -0.7% 20.2% -0.2% 23.3% 0.6% 20.1% -0.5%Northwest 23.3% -0.1% 34.6% -0.5% 31.3% -0.1% 27.5% -0.2%O'Hare 19.7% -0.4% 31.3% 0.9% 37.3% 1.0% 26.2% 0.2%Suburban Chicago Total 20.7% -0.2% 27.0% -0.1% 27.4% 0.3% 23.5% -0.1%

Net Absorption1Q2012

A B C Total

East-West (61,311) 35,868 (5,935) ((31,378)

North 122,762 16,657 (21,657) 1117,761

Northwest 15,759 44,931 4,725 65,415

O'Hare 36,074 (46,689) (27,807) ((38,422)

Suburban Chicago Total 113,283 50,766 (50,674) 113,376



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LYNEW DEVELOPMENTSOversupply to suppress speculative construction for years to come

• Of the over 112 million square feet of inventory that MB Real Estate tracks, over 26 million square feet is currently vacant. This doesnot include former corporate headquarter facilities, such as Allstate’s 516,000 square foot office building in South Barrington, which layvacant. In this case, Allstate wishes to demolish the campus after failing to sell the property during the past five years.

• With so much available space, speculative construction is not feasible. Even the largest tenants in the Suburban market have multipleoptions to choose from in each submarket. It is extremely unlikely that any lender would fund a speculative development until millionsof square feet are absorbed.

• The only office construction underway is limited to noncompetitive medical office developments and the build-to-suit North Americanheadquarters for Astellas Pharma US in Glenview, for which MB Real Estate manages the construction.

• OUTLOOK: Suburban Chicago has an overabundance of vacant space. Numerous proposed developments are ready to break groundonce demand warrants it, which will always keep rent growth to inflationary levels. Between shrinking occupancy and constrainedfinancing, speculative development is unlikely for several years.

2011 DeliveriesBuilding Address Size (sf) % Leased Submarket Comments

Total - 0 Properties

Under ConstructionBuilding Address Size (sf) % Pre-leased Due Date Comments

1 Astellas Pky, Glenview 440,000 100.0% Fall 2012 Broke ground April 2010. Build-to-suit North American Headquarters for Astellas Pharma US. Construction

managed by MB Real Estate.

Total - 1 Property 440,000

ProposedBuilding Address Size (sf) % Pre-leased Due Date Comments

Total - 0 Properties

NEW DEVELOPMENT PIPELINE


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LYSUBLEASE SPACESublease availability increases as new large blocks hit the market

• The amount of available sublease space increased by 5.7 percent and is now more than 3.5 million square feet. Class A buildings aredriving this increase, as sublease availability is up 10.4 percent since last quarter. Sublease availability increased in each submarketexcept for O’Hare. The availability increase is detrimental to markets that are already dealing with severely high direct vacancy.

• There are 13 available sublease blocks greater than 50,000 square feet, an increase of two from the end of 2011. Most notably, NationalLewis University is seeking to sublet space at two locations: a 102,000 square foot block at 5202 Old Orchard Road in Skokie and an86,000 square foot block at 850-950 Warrenville Road in Lisle.

• OUTLOOK: The amount of available sublease space is now above its historical average of 3.4 million square feet. This figure is expectedto decline in the third quarter when Telecordia Technologies’ 360,000 square foot lease at 5200 South Route 53 in Lisle will expire. Asa result, a large influx of space will hit the direct market.

HISTORIC YEAR-END SUBLEASE AVAILABILITY: CLASS A SPACE SPIKES AGAIN

Class ABuilding Address Size (sf) Occupancy Expiration Submarket Sublandlord

2000 W AT&T Dr, Hoffman Estates 1,207,245 Vacant August 2016 Northwest AT&T3 Overlook Pt, Lincolnshire 290,143 Vacant February 2017 North Hewitt Associates4201 Winfield Rd, Warrenville 249,996 Vacant January 2016 East-West Navistar3 Parkway Blvd N, Deerfield 232,836 June 2012 December 2014 North Astellas Pharma US1000 Milwaukee Ave, Glenview 130,403 Vacant April 2017 North AON Warranty Group5202 Old Orchard Rd, Skokie 101,532 Negotiable June 2021 North National Lewis University1450 American Ln, Schaumburg 65,259 Negotiable October 2016 Northwest Zurich American Insurance Company410 Warrenville Rd, Lisle 60,434 Vacant May 2013 East-West IKON Office Solutions9500 W Bryn Mawr Ave, Rosemont 56,554 Vacant August 2014 O'Hare Matria Healthcare701 E 22nd St, Lombard 52,079 Vacant June 2013 East-West The Marketing Store

TTotal - 10 Sppaces 2,446,481

Class BBuilding Address Size (sf) Occupancy Expiration Submarket Sublandlord

6200 S Route 53, Lisle 360,000 Vacant July 2012 East-West Telcordia Technologies2001 Lakewood Blvd, Hoffman Estates 239,250 Negotiable August 2016 Northwest AT&T850-950 Warrenville Rd, Lisle 85,532 Negotiable January 2019 East-West National Lewis University


LARGE BLOCKS (MORE THAN 50,000 SQUARE FEET) OF SUBLEASE SPACE CURRENTLY AVAILABLE

Italicized addresses indicate space is new on the market


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LYLARGE BLOCKS OF DIRECT AVAILABILITYLarge blocks decrease, but a glut still remains

• The total number of large blocks decreased by six to 78, whiletotal square footage within large blocks was reduced by 6.4percent, or 583,000 square feet.

• The largest block removed during the quarter was a 133,000square foot contiguous space leased to Acco Brands at 4Corporate Drive in Long Grove, as the company increases itsfootprint in the North submarket.

• The largest new block is a 132,000 square foot contiguous spaceat 3500 Lacey Road in Downers Grove. Sara Lee is the currenttenant and the space will become available June 2014 when thecompany completes its relocation to downtown Chicago. Theblock could have been even larger, but HAVI Global Solutionssigned a lease this quarter to backfill roughly 140,000 squarefeet Sara Lee’s former space.

CLASS CBuilding Address City Size (sf) Submarket

3501 Algonquin Rd Rolling Meadows 206,770 Northwest1299 Algonquin Rd Schaumburg 195,393 Northwest2-4-6 Genesee St Waukegan 75,996 North1950 S Batavia Ave Geneva 51,845 East-West4 Blocks of Space 530,004

CLASS BBuilding Address City Size (sf) Submarket

2400 Cabot Dr Lisle 217,718 East-West28100 Torch Pky Warrenville 203,842 East-West3800 Golf Rd Rolling Meadows 154,595 Northwest1 Salem Lake Dr Long Grove 150,000 Northwest544 Lakeview Pky Vernon Hills 144,999 North2350-2360 E Devon Ave Des Plaines 142,596 O'Hare700 N Wood Dale Rd Wood Dale 125,328 Northwest2850 W Golf Rd Rolling Meadows 110,941 Northwest703-709 W Algonquin Rd Arlington Heights 96,213 Northwest4242 N Harlem Ave Norridge 93,155 O'Hare500 Joliet Rd * Willowbrook 78,400 East-West2000 S Finley Rd * Lombard 78,300 East-West814 Commerce Dr Oak Brook 66,882 East-West1245 Corporate Blvd Aurora 64,960 East-West27545 Diehl Rd Warrenville 62,440 East-West999 E Touhy Ave Des Plaines 59,710 O'Hare1000 Lakeside Dr Bannockburn 56,745 North2211 Butterfield Rd Downers Grove 53,212 East-West1000 E Woodfield Rd Schaumburg 51,410 Northwest2400 E Devon Ave Des Plaines 51,000 O'Hare20 Blocks of Space 2,062,446

Italicized addresses indicate space is new on the market* Block of space is for future occupancy** Block of space will be vacated during the upcoming quarter

CLASS ABuilding Address City Size (sf) Submarket

21440 Lake Cook Rd Deer Park 351,425 Northwest1600 McConnor Pky Schaumburg 300,686 Northwest700 Oakmont Ln Westmont 256,767 East-West1701 Golf Rd Rolling Meadows 234,164 Northwest3075 Highland Pky * Downers Grove 228,764 East-West200 N Martingale Rd * Schaumburg 228,568 Northwest75 N Fairway Dr Vernon Hills 200,344 North5550 Prairie Stone Pky * Hoffman Estates 193,601 Northwest150 NW Point Blvd Elk Grove Village 176,844 Northwest425 N Martingale Rd Schaumburg 156,560 Northwest1 Overlook Pt Lincolnshire 148,686 North3500 Lacey Rd * Downers Grove 132,045 East-West3333 Beverly Rd Hoffman Estates 129,000 Northwest2895 Greenspoint Pky Hoffman Estates 127,941 Northwest9525 W Bryn Mawr Ave Rosemont 123,668 O'Hare1707 N Randall Rd Elgin 109,076 Northwest1707 N Randall Rd Elgin 109,076 Northwest2355 Waukegan Rd Bannockburn 106,495 North1 Corporate Dr Long Grove 104,637 North8420 W Bryn Mawr Ave Chicago 99,395 O'Hare1333 Butterfield Rd Downers Grove 98,520 East-West1 Pierce Pl Itasca 97,517 Northwest6 Parkway Blvd N * Deerfield 95,854 North8700 W Bryn Mawr Ave Chicago 86,825 O'Hare75 Tri State International * Lincolnshire 82,344 North2550 W Golf Rd Rolling Meadows 81,222 Northwest850-860 Technology Way Libertyville 78,000 Central North1 Corporate Dr Long Grove 77,628 North2655 Warrenville Rd Downers Grove 76,691 East-West8700 W Bryn Mawr Ave Chicago 76,469 O'Hare333 Knightsbridge Pky Lincolnshire 74,728 North2100 Sanders Rd Northbrook 72,565 North1000 Royce Blvd Oakbrook Terrace 70,000 East-West2333 Waukegan Rd Bannockburn 70,000 North9500 W Bryn Mawr Ave Rosemont 69,701 O'Hare10255 W Higgins Rd Rosemont 69,695 O'Hare3800 N Wilke Rd ** Arlington Heights 68,755 Northwest535 E Diehl Rd Naperville 67,731 East-West300 Park Blvd Itasca 67,307 Northwest701 Warrenville Rd Lisle 67,233 East-West4201 Lake Cook Rd Northbrook 66,000 North2 Corporate Dr Long Grove 64,871 North1200 Lakeside Dr Bannockburn 63,737 North540 Lake Cook Rd * Deerfield 63,298 North2800 W Higgins Rd Hoffman Estates 61,048 Northwest2 Pierce Pl Itasca 60,904 Northwest18W140 Butterfield Rd Oakbrook Terrace 60,401 East-West1 Tower Ln Oakbrook Terrace 57,203 East-West1701 Golf Rd Rolling Meadows 55,504 Northwest25 Tri State International * Lincolnshire 54,974 North7400 N Caldwell Ave Niles 54,000 North3000 Lakeside Dr Bannockburn 53,316 North3500 Lacey Rd Downers Grove 51,601 East-West1001 Warrenville Rd Lisle 50,933 East-West54 Blocks of Space 5,884,317


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VACANCY RATESVacancy edges down slightly, but not enough to significantly impact the market

• For the second consecutive quarter, the direct vacancy rate fell 0.1 percent and currently sits at 23.5 percent. Including sublease space,the total vacancy rate remained at 26.6 percent. Class A direct vacancy fell by 0.2 percent, while Class B saw a 0.1 percent decreaseand Class C experienced a 0.3 percent vacancy increase.

• After experiencing large vacancy increases last quarter, the North submarket’s Class A segment experienced a 0.7 percent drop indirect vacancy. Class A buildings in the O’Hare submarkets posted a 0.4 percent direct vacancy rate decline.

• Despite a slight quarterly decrease, the 27.5 percent direct vacancy rate in the Northwest submarket is the highest of all submarkets.O’Hare’s Class C segment is suffering from an extreme 37.3 percent direct vacancy rate.

• OUTLOOK: Despite the slight vacancy decrease, pervasive weakness continues in Suburban Chicago. Major corporate relocations anddownsizing continue to threaten a recovery, as vacancy rates continue to be near historically high levels.

HISTORIC YEAR-END VACANCY RATES BY SUBMARKET: NORTHWEST AND O’HARE LAG

HISTORIC YEAR-END VACANCY RATES BY CLASS: B AND C PROPERTIES MORE THAN 1/4 VACANT


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LARGE DEALSLarge transactions continue to be few and far between

• The number of large deals recorded increased to 13. However, the total amount of square feet contained in these transactions was170,000 square feet fewer than a quarter ago.

• Acco Brands signed the largest new transaction vacating 170,000 square feet at 300 Tower Parkway in Lincolnshire and moving into189,000 square feet at 4 Corporate Drive in Long Grove. Since both buildings are in the North submarket, the net result is only 19,000square feet of positive absorption.

• HAVI Global Solutions signed a 140,000 square foot lease at 3500 Lacey Road in Downers Grove and will relocate from the nearbybuilding at 3075 Highland Parkway. The company is backfilling a portion of the 441,000 square feet of space that Sara Lee will vacateover the next four years, which provides relief to the East-West submarket after such a signficant move-out.

• Barilla signed the largest renewal of the quarter, extending its lease of 70,000 square feet at 1200 Lakeside Drive in Bannockburn.

• PLS Financial services signed a lease for a new call center requirement at 800 Jorie Boulevard in Oak Brook, which will provide 47,000square feet of positive absorption.

• OUTLOOK: For the market to recover, large deal activity must pick up in order to offset companies like Sara Lee who are exiting the market.Unfortunately, the market has not displayed the necessary tenant activity.

NEW


Acco Brands Relo North 4 Corporate Dr, Long Grove 189,092HAVI Global Solutions Relo East-West 3500 Lacey Rd, Downers Grove 140,375PLS Financial Services New East-West 800 Jorie Blvd, Oak Brook 47,000Walgreens New North 1000 Lakeside Dr, Bannockburn 47,000U.S. Cellular Corp. New Northwest 100 Mittel Rd, Wood Dale 40,000Cambium Networks New Northwest 3800 Golf Rd, Rolling Meadows 34,000Bimbo Bakeries USA New O'Hare 8550 W Bryn Mawr, Chicago 27,484Interactive Health Solutions Relo Northwest 1700 E Golf Rd, Schaumburg 26,582TTotal - 8 Deals 551,533

RENEWAL/EXPANSION/SUBLEASE


Barilla Ren North 1200 Lakeside Dr, Bannockburn 70,000Founders Insurance Co. Ren/Exp O'Hare 1111 E Touhy, Des Plaines 31,809National Insurance Crime Bureau Ren O'Hare 1111 E Touhy, Des Plaines 31,572Kemper Corporation Ren East-West 1 Tower Ln, Oakbrook Terrace 31,000Hitachi High Technologies America Ren Northwest 10 N Martingale Rd, Schaumburg 26,595Total - 5 Deals 190,976

LARGE LEASE TRANSACTIONS: NUMBER OF DEALS STEADY

Abbreviations: Cont - Contraction Exp - Expansion Relo - Relocation Ren - Renewal


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ABSORPTIONTwo consecutive quarters of slight positive absorption

• The suburban market saw 113,000 square feet of net positive absorption, marking the second consecutive quarter. However, negativeabsorption totaled more than 7.8 million square feet since the downturn.

• OUTLOOK: Despite another slightly positive quarter, there are few significant demand drivers in Suburban Chicago. Companies havemulled relocation to other states to avoid increased corporate income taxes; others, like Sara Lee, are relocating to the CBD. Withoutsignificant job creation, the future of the market is weak.

SUBURBAN CHICAGO ABSORPTION BY CLASS: NEGATIVE ACROSS CLASSES

EAST-WEST 2004 2005 2006 2007 2008 2009 2010 2011 YTTD 2012

Class A 1,080,332 102,299 366,688 542,281 (259,973) (595,372) (219,164) 299,247 (61,311)

Class B (25,541) 389,014 484,869 (203,072) (2,062) (259,196) 67,827 (152,069) 35,868

Class C 76,936 85,269 (125,850) (108,813) (87,441) (179,177) 7,017 55,114 (5,935)

Total 1,131,727 576,582 725,707 230,396 (349,476) (1,033,744) (144,319) 202,292 (31,378)

NORTH 2004 2005 2006 2007 2008 2009 2010 2011 YYTD 2012

Class A (10,452) 196,403 (100,049) 615,115 (240,617) (207,914) (312,238) (261,008) 122,762

Class B 62,026 164,357 316,207 355,510 (60,982) (38,575) (319,078) 33,814 16,657

Class C (39,173) 12,697 (39,440) 26,935 (2,048) (104,195) (40,044) (90,151) (21,657)

Total 12,401 373,457 176,718 997,560 (303,647) (350,684) (671,360) (317,345) 117,761

NORTHWEST 2004 2005 2006 2007 2008 2009 2010 2011 YYTD 2012

Class A 902,901 225,865 (488,651) 10,333 (302,930) (388,945) (21,262) (632,282) 15,759

Class B 233,613 (234,681) 12,266 (164,112) (261,498) (310,263) (295,928) (383,730) 44,931

Class C (13,282) (216,898) (15,371) (51,429) (28,362) (35,167) (192,091) (48,617) 4,725

Total 1,123,232 (225,714) (491,756) (205,208) (592,790) (734,375) (509,280) (1,064,629) 65,415

O'HARE 2004 2005 2006 2007 2008 2009 2010 2011 YYTD 2012

Class A 402,561 (55,786) 189,235 11,636 (256,325) (134,526) 209,180 40,666 36,074

Class B (306,424) 53,945 7,915 (81,167) (51,601) (80,925) 70,376 14,041 (46,689)

Class C (15,002) (204,597) 90,170 (50,022) (35,696) 62,815 (10,855) (14,567) (27,807)

Total 81,135 (206,438) 287,320 (119,553) (343,622) (152,637) 268,701 40,140 (38,422)

TOTALS 2004 2005 2006 2007 2008 2009 2010 2011 YYTD 2012

Class A 2,375,342 468,781 (32,777) 1,179,365 (1,059,845) (1,326,757) (343,484) (553,378) 113,283

Class B (36,326) 372,635 821,257 (92,841) (376,143) (688,960) (476,802) (487,944) 50,766

Class C 9,479 (323,529) (90,491) (183,329) (153,547) (255,724) (235,972) (98,221) (50,674)

Total 2,348,495 517,887 697,989 903,195 (1,589,535) (2,271,441) (1,056,259) (1,139,542) 113,376



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SGROSS ASKING RENTSRental rates continue to decline to combat lack of demand

• Over the last four quarters, gross asking rents have fallen across all building classes. Class A rents are down 0.9 percent, Class B rentsare down 2.3 percent, and Class C rents are down 2.8 percent on a year-over-year basis.

• Class A buildings in the O’Hare submarket were the best performing segment, posting 3.2 percent growth in asking rents over the past12 months.

• Asking rental rates in the North submarket’s Class A buildings have fallen 5 percent on a year-over-year basis. In turn, direct vacancyfell 0.7 percent this quarter.

• O’Hare is the lone submarket to post growth in asking rental rates. However at 0.6 percent, the change is too slight to signal a recovery.

• Class C gross asking rental rates are at their lowest historical levels in the East-West and Northwest submarkets.

• Compared to peak levels, overall gross asking rents have fallen 13.9 percent.

• OUTLOOK: The relative stability of asking rents in Suburban Chicago shows that landlords are unable or unwilling to make more significantreductions despite falling occupancy. To compensate, concession packages must increase to entice tenants.

Average Direct Gross Asking Rent

AChange over

last yearB

Change over last year

CChange over

last yearTotal

Change over last year

East-West $22.79 0.3% $18.59 -2.9% $15.55 -2.2% $20.38 -0.9%North $21.43 -5.0% $19.78 -0.9% $16.21 -2.0% $20.49 -3.9%Northwest $22.66 -0.3% $16.98 -2.0% $13.55 -4.1% $20.17 -0.9%O'Hare $22.61 3.2% $20.53 -3.8% $15.14 -1.0% $20.72 0.6%Suburban Chicago Total $22.37 -0.9% $18.86 -2.3% $15.21 -2.8% $20.40 -1.4%

AVERAGE GROSS ASKING RATES BY CLASS AND SUBMARKET

ASKING RATES REMAIN DOWN FROM ONE YEAR AGO


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SINVESTMENT SALESPortfolio sales, listings, highlight the investment market

On the Market/Under Contract: 1st Quarter 2012Building Address Submarket Size (sf) Price PSF * Class Seller Status (Buyer or Listing Agent)

500-540 Lake Cook Rd, Deerfield, 1 Parkway Blvd N, Deerfield, 9550 W Higgins Rd, Rosemont (6 Properties)

North / Northwest

1,214,470 - - AGeneral Electric Capital Corporation

New on Market (JLL)

9811-9977 Woods Dr, Skokie (8 Properties) North 356,958 - - BDevelopment Resources, Inc.

New on Market (Colliers)

6250 N River Rd, Rosemont O'Hare 380,360 - - A GLL Real Estate Partners New on Market (Colliers)

Central Park of Lisle II, 3333 Warrenville Rd, Lisle East-West 311,912 - - A White Oak Realty Partners New on Market (CBRE)

Central Park of Lisle I, 4225 Naperville Rd, Lisle East-West 310,375 - - A White Oak Realty Partners New on Market (CBRE)

747 E 22nd St, Lombard East-West 209,557 $12,000,000 $57 A Vectren Utility HoldingsOn Market (Jones Lang LaSalle)

150 NW Point Blvd, Elk Grove Village Northwest 176,844 $22,000,000 $124 A Kingsway Financial Services On Market (CB Richard Ellis)

701 E 22nd St, Lombard East-West 173,105 - - A GID Investment LLCOn Market (Jones Lang LaSalle)

4343 Commerce Ct, Lisle East-West 167,756 - - A Prime Group Realty TrustOn Market (Holiday Fowler Fenoglio)

555 Aptakisic Rd, Lincolnshire North 162,739 $50,000,000 $307 ABridge Development Partners LLC

Under Contract (Cole Capital)

Investment Sales: 1st Quarter 2012Building Address Submarket Size (sf) Price PSF * Class Seller Buyer

2450-2500 Westfield Drive, Elgin (4 Properties) Northwest 515,313 $26,500,000 $51 ABrookfield Asset Management

Adventus Realty Partners

Continental Executive Parke, Vernon Hills (4 Properties)

North 296,312 $36,500,000 $123 A/B PacTrust PWA Real Estate, LLC

2100 E Lake Cook Rd, Buffalo Grove (undisclosed % of JV stake)

North 259,000 $9,400,000 - A Hamilton Partners JSQ Commercial

1821 Walden Office Sq, 1827 Walden Office Sq, 1834 Walden Office Sq (3 Properties), Schaumburg

Northwest 227,760 $7,300,000 $32 A Wells Fargo & Co Marc Realty

2000 Clearwater Dr, Oak Brook East-West 198,250 $10,000,000 $50 B Reed Elsevier Inc Hub Group, Inc.

Caremark I, 2215 Sanders Rd, Northbrook North 171,301 $22,000,000 $128 AFulcrum Asset Advisors / Angelo Gordon & Co.

White Oak Realty Partners / Syndicated Equities Group

* Price per square foot - based off estimated selling price for new to market buildings

• The largest sale on a per-square-foot basis was White Oak Realty Partners’ purchase of the Class A, 90 percent-occupied 2215 SandersRoad in Northbrook for $128 per square foot.

• PWA Real Estate purchased the four-building Continental Executive Parke from PacTrust for $36.5 million or $123 per square foot at a9.5 percent capitalization rate.

• Two major portfolios were placed on the market: an eight-building, 1.2 million square foot portfolio owned by General Electric CapitalCorporation, and an eight-building, 357,000 square foot portfolio owned by Development Resources Inc.

• OUTLOOK: Suburban Chicago has not generated the premier investor interest that characterizes the CBD. However, certain core assetshave generated investor attention in previous quarters.

INVESTMENT SALES: PORTFOLIO PURCHASEs DOMINATE LOCAL ACTIVITY


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SFORECASTDespite slight positive absorption, further occupancy declines are expected

Suburban Chicago has experienced severe occupancylosses to match the jobs lost since the economicdownturn. Since reaching its peak in 2007,occupancy is down 7.2 percent. Total employmentdeclined 7.4 percent peak-to-trough but hasrebounded to now stand at 5.5 percent from its peak.

Occupancy is still more reduced from its peak thantotal employment and slight positive absorptionoccurred for the second consecutive quarter,suggesting that 2012 may be a year of recovery.However, Suburban Chicago lacks the dynamicdemand drivers of the CBD. With a waning ability toattract top workers to the suburbs, the market isseeing long-time tenants seek relocation options.Also, large sublease blocks continue to weigh heavilyon the direct market.

For the factors mentioned above, total occupancy lossis expected to be greater than the employment losson a percentage basis. No speculative constructionand, therefore, no new inventory will help aid themarket, but the demand to sustain a recovery simplydoes not exist at this time.

MB Real Estate expects a slight decline in occupancyin 2012. The large losses from 2009 are not expectedagain, but tenants still need to shed excess spacewhen their leases expire. Positive absorption willoccur in 2013, but will be due to incremental growthwithin existing companies.

HISTORIC & PROJECTED VACANCY: OVERALL VACANCY RATE WILL PEAK JUST UNDER 24 PERCENT

YearTotal Historic and

Forecasted Inventory (sf)

Total Historic & Forecasted

Occupancy (sf)

Direct Vacancy %

1996 90,601,193 82,039,636 9.4%1997 91,989,948 85,388,879 7.2%1998 95,078,215 88,016,285 7.4%1999 98,744,696 90,321,332 8.5%2000 103,270,399 93,033,912 9.9%2001 108,254,000 92,247,968 14.8%2002 109,769,838 91,258,173 16.9%2003 110,090,266 88,104,389 20.0%2004 110,423,452 90,452,884 18.1%2005 111,030,084 90,970,771 18.1%2006 110,806,221 91,668,760 17.3%2007 111,175,875 92,571,955 16.7%2008 112,080,944 90,982,420 18.8%2009 112,218,212 87,973,132 21.6%2010 112,374,614 86,916,873 22.7%2011 112,195,575 85,875,105 23.5%2012 112,195,575 85,431,251 23.9%2013 112,195,575 85,475,636 23.8%

327,603

113,376

1997-2011 Absorption Avg:

YTD 2012 Absorption:

Total projected inventory based on addition of projects currently under construction

Occupancy is forecast based on proprietary assumptions regarding the Chicago MSA’s total employment

change and the office industry’s historical performance which trails the overall economy.


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SSUBMARKET MAP


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SMARKET STATISTICS

EAST-WESTRBA(sf)

YTDAbsorption (sf)

4th QuarterAbsorption (sf)

Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)

Total Vacancy Rate (Vacancy +

Sublease) %

Class A 20,601,484 (61,311) (61,311) 4,058,674 19.7% 16,542,810 1,007,204 24.6%

Class B 14,567,002 35,868 35,868 3,505,189 24.1% 11,061,813 523,875 27.7%

Class C 4,906,704 (5,935) (5,935) 1,106,920 22.6% 3,799,784 3,621 22.6%

TTotal 40,075,189 (31,378) (31,378) 8,670,783 21.6% 31,404,406 1,534,700 25.5%

NORTHRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Sublease) %

Class A 16,857,227 122,762 122,762 3,315,058 19.7% 13,542,169 1,152,400 26.5%

Class B 7,447,365 16,657 16,657 1,502,048 20.2% 5,945,317 93,232 21.4%

Class C 2,539,366 (21,657) (21,657) 590,657 23.3% 1,948,709 7,889 23.6%

Total 26,843,958 117,761 117,761 5,407,763 20.1% 21,436,195 1,253,521 24.8%

NORTHWESTRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Sublease) %

Class A 18,509,014 15,759 15,759 4,303,455 23.3% 14,205,559 346,636 25.1%

Class B 9,728,090 44,931 44,931 3,361,897 34.6% 6,366,193 193,200 36.5%

Class C 2,325,516 4,725 4,725 728,764 31.3% 1,596,752 20,764 32.2%

Total 30,562,620 65,415 65,415 8,394,116 27.5% 22,168,505 560,600 29.3%

O'HARERBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Sublease) %

Class A 7,844,652 36,074 36,074 1,547,268 19.7% 6,297,384 154,683 21.7%

Class B 4,330,547 (46,689) (46,689) 1,354,735 31.3% 2,975,812 55,646 32.6%

Class C 2,538,608 (27,807) (27,807) 945,805 37.3% 1,592,803 0 37.3%

Total 14,713,807 (38,422) (38,422) 3,847,808 26.2% 10,865,999 210,329 27.6%

TOTALSRBA(sf)

YTDAbsorption (sf)


Direct Vacancy(sf)

Direct Vacancy

%

Occupancy(sf)

Sublease Vacancy

(sf)


Sublease) %

Class A 63,812,377 113,283 113,283 13,224,455 20.7% 50,587,923 2,660,923 24.9%

Class B 36,073,005 50,766 50,766 9,723,869 27.0% 26,349,136 865,953 29.4%

Class C 12,310,193 (50,674) (50,674) 3,372,146 27.4% 8,938,047 32,274 27.7%

Total Suburban 112,195,575 113,376 113,376 26,320,470 23.5% 85,875,105 3,559,150 26.6%



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SECTION FOUR

ADDITIONAL INFORMATIONGLOSSARY

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

Asking Rent: The published rental rate for a space in a building, which mayvary from the rent which is negotiated upon by the tenant and landlord.

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

Class: A classification used to describe buildings, with Class A reflectingthe highest quality and Class C reflecting the lowest quality.

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

Initial Rate: The contracted starting rental rate for the first term of a lease.

Inventory: The square footage of buildings that have received a certificateof occupancy and are able to be occupied by tenants. Calculated by addingthe Rentable Building Area (RBA) of all properties in a market or submarket.

Large Block: The amount of contiguous space available in a building interms of square footage. Contiguous spaces over 50,000 square feet areconsidered large by MB Real Estate.

Lease Comparable: Comparables are properties with characteristics thatare similar in nature. Their signing lease rates and other contracted elements are aggregated to analyze contracted market conditions as opposed to asking market conditions.

Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primarycompetitive set of areas. Markets are building type specific and are non-overlapping contiguous geographic designations. Markets can be furthersubdivided into Submarkets.

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

Preleased Space: The amount of space in a building that has been leasedprior 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).

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

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

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

SF: Abbreviation for Square Feet.

Sublease Space: Space that has been leased by a tenant and is beingoffered 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 delineate a coregroup of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets arebuilding type specific (office, industrial, retail, etc.), with distinct boundariesdependent on different factors relevant to each building type. Submarketsare non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they arelocated within.

Suburban: The Suburban and Central Business District (CBD) designationsrefer to a particular geographic area within a metropolitan statistical area(MSA). Suburban is defined as including all office inventory not located inthe CBD.

Tenant Improvement: Those changes to property to accommodate specificneeds of a tenant. TIs include installation or relocation of interior walls orpartitions, carpeting or other floor covering, shelves, windows, toilets, etc.The cost of these is negotiated in the lease.

Total Vacant Space: Direct plus sublease vacant space.

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

Vacancy Rate: A measurement expressed as a percentage of the totalamount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacancy rate can be based on direct, sublease, or total vacantspace.

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

YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulativefrom the beginning of a calendar year through whatever time period is beingstudied.


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ABOUT MB REAL ESTATEOur mission is to provide clients and investors with extraordinary real estate value and unlimited support

MB REAL ESTATE HEADQUARTERS181 West Madison, Suite 4700Chicago, Illinois 60602phone: 312.726.1700fax: 312.807.3853

EAST COAST REGIONAL HEADQUARTERS335 Madison Avenue, 14th FloorNew York, New York 10017phone: 212.350.2300fax: 212.350.2301

COMPANY LEADERSHIPPETER E. RICKERChairman & CEO

JOHN T. MURPHYPresident

DEPARTMENT LEADERSHIP

PATRICIA ALUISI Senior Vice President & Managing Director of Administration

MARK A. BUTH Executive Vice President & Managing Director of Leasing Services

ANDREW J. DAVIDSON Executive Vice President & Managing Director of Corporate Services & Tenant Advisory

GARY A. DENENBERG Executive Vice President & Managing Director of Leasing Services

DAVID R. GRAFF Senior Vice President of Project Services

MAUREEN G. GROVE Vice President & Managing Director of Accounting Services

DANIEL J. NIKITAS Executive Vice President of Corporate Services & Tenant Advisory Services

KEV IN M. PURCELL Executive Vice President & Managing Director of Asset Management

PETER J. WESTMEYER Senior Vice President & Managing Director of Investment Services

At MB Real Estate, our corporate mission is to maximize the value of our clients’real estate by creating timely and innovative solutions that meet their unique needsand objectives.

We offer the highest level of real estate support with our team of committed, results-driven experts in asset and facilities management, leasing, tenant representation,development, project management, and investment services.

Supported by dedicated accounting, marketing, human resources, and informationtechnology teams, our unique full-service firm is an industry leader in local and national corporate real estate.


mb real estate's 2012 1st quarter chicago market overview

Documents

labor market

percent gdp growth

percent of respondents

percent planning

chicago msa unemployment

national economic recovery

business services

world business