MARKET HIGHLIGHTS

4Q 2012

S T U D L E Y O F F I C E M A R K E T A N D S PA C E D ATA R E P O R TReportReport

SOUTH FLORIDA

Up Down Unchanged

One Qtr One Qtr One Qtr One Qtr One Qtr One Qtr

CBD Change Suburban Change CBD Change Suburban Change CBD Change Suburban Change

10 yrs 7 yrs 7 yrs 5 yrs Average Term: 7 yrs 5 yrs

Concessions: Concessions: Concessions:

Free Rent 6-12 months 6 months Free Rent 8 months 5 months Free Rent 12 months 7 months Tenant Improvements $50.00/sf $35.00/sf Tenant Improvements $40.00/sf $25.00/sf Tenant Improvements $40.00/sf $30.00/sf Parking 1.5 spaces/1,000 sf 3.5 spaces/1,000 sf Parking 2 spaces/1,000 sf 4 spaces/1,000 sf Parking 2 spaces/1,000 sf 4 spaces/1,000 sf

Average Term: Average Term:

Outlook: Demand remains lackluster, though some properties with relatively high occupancy levels and modest near-term rollovers are holding the line on concessions.

Outlook: Job creation remains slow and supply exceeds demand. Competition continues to be intense.

Outlook: Leasing activity remains steady throughout this submarket.

MIAMI-DADE TRANSACTION BAROMETER BROWARD TRANSACTION BAROMETER PALM BEACH TRANSACTION BAROMETER

LITTLE CHANGE IN AVAILABILITY RATES

South Florida’s overall availability rate, 22.2%, inched up by 0.1 pp for the quarter. The Class A rate, 23.4%, dropped by 0.5 pp.

RENTS DECREASE

Overall rent ($26.92) fell by 0.7% quarter-on-quarter. Class A rent ($30.87) declined by 1.0%. LEASING STABLE

Overall leasing totaled 1.4 msf, an increase of 1.5% from the previous quarter. Trailing four-quarter volume reached 5.7 msf, down by 6.0%.

MORE LARGE BLOCKS

In Miami-Dade County, the number of large contiguous blocks of space (50,000 sf or more) rose from 21 last quarter to 22. In Broward County, the number of blocks increased from 14 to 18. The number of blocks in Palm Beach County stood at 8, even with last quarter.

South Florida’s economy and office market witnessed some signs of improvement in 2012. Key sectors such as tourism, retail and hospitality have bounced back. The region’s housing market is still a bit shaky but seems to be finally stabilizing as sales and prices have picked up somewhat. More critically to the office market, companies in Latin America and the Caribbean are once again expanding or setting up operations in South Florida – a trend that continued in the fourth quarter.

Coral Gables’ highest-caliber properties are capturing the attention of many of these businesses. Roughly one year after delivering, 396 Alhambra Circle is nearly two-thirds leased. Wine and spirits distributor Diageo signed for 32,527 sf in the fourth quarter, relocating from 5301 Waterford in the Miami Airport submarket. Earlier in the year, Swedish cellular provider Millicom International Services leased 22,000 sf at the new building. Existing properties in Coral Gables have also seen a burst of leasing. Singer Xenos inked a 7,001-sf lease at 800 S. Douglas Road and MBF Healthcare renewed for 6,144 sf at 121 Alhambra Place. Despite this activity, demand in Coral Gables has not been strong enough to absorb the new product that has delivered – the Class A availability rate ended 2012 at 22.6%, a 3.4 pp jump from year-end 2011.

As has been the case for about two years now, the new buildings in Coral Gables, Downtown Miami and Brickell create a disadvantage for landlords trying to lease space in older Class A and B properties. On the other hand, movement within the market from these older properties to new construction creates vacancies – and opportunities for other tenants. Landlords have to be very competitive when trying to capture businesses that are new to the region or that are interested in upgrading their space. Southeast Financial Center, which comprises about 20% of Downtown Miami’s Class A inventory, has had an availability rate of roughly 30% since midyear 2011. This rate is on par with the submarket’s average even though the building has secured several new tenants over the last year. For example, Banco de Crédito e Inversiones, Chile’s fourth-largest bank, completed a 22,567-sf lease at the property in late September.

Conditions are improving in the broader economy, but hiring in South Florida remains subpar and demand for office space is unstable. The very highest-caliber properties are slowly reeling in the region’s most creditworthy companies and a good percentage of businesses that want to make a statement with their first South Florida location. The rest of the market is still losing a bit of ground. New buildings actually still have quite a bit more space to lease – the eight buildings in Miami-

Bouncing Along the Bottom

Tenant Sq Feet Address Market AreaHolland & Knight 98,000 701 Brickell Avenue BrickellFoley & Lardner LLP 36,531 2 South Biscayne Boulevard Downtown MiamiDiageo 32,527 396 Alhambra Circle Coral Gables/GroveBoies, Schiller & Flexner 22,632 401 East Las Olas Boulevard Downtown Fort LauderdaleBanco de Crédito e Inversiones 22,567 200 South Biscayne Boulevard Downtown MiamiFerraro Law Firm 21,363 600 Brickell Avenue BrickellApotex Corp. 20,043 2400 North Commerce Parkway SW BrowardAplifi 14,621 500 West Cypress Creek Road Cypress Creek/Fort LauderdaleRegus 11,760 2200 North Commerce Parkway SW BrowardLydecker Lee Berga Dezayas LLC 8,853 1221 Brickell Avenue BrickellEdiets, Inc. 8,577 555 South Andrews Avenue North BrowardTodo 1 8,073 10451 NW 117th Avenue West Miami/AirportSinger Xenos 7,001 800 South Douglas Road Coral Gables/GroveSpectrum Programs, Inc. 6,425 790 East Broward Boulevard Downtown Fort LauderdaleExfuse 6,410 4200 Northcorp Parkway North Palm BeachSum of Top 15 Leases 325,383 Sum of 4th Quarter Leasing Activity 1.4 MSF

Major TransactionsMAJOR TRANSACTIONS

$30.87$31.46

$23.48$25.70

$0

$5

$10

$15

$20

$25

$30

$35

$40

2012 4Q2011 4Q2010 4Q2009 4Q2008 4Q2007 4Q

($/sf) Rental Rate Trends

Class A Class B & C

19

22

15

1817

8

0

5

10

15

20

25

2010 4Q 2011 2Q 2011 4Q 2012 2Q 2012 4Q

Overall Large Block Trends*

Miami-Dade Broward Palm Beach

*Contiguous spaces >=50,000 sf

23.4%

16.5% 21.2%

12.8%

0%

5%

10%

15%

20%

25%

30%

2012 4Q2011 4Q2010 4Q2009 4Q2008 4Q2007 4Q

(%) Availability Rate Trends

Class A Class B & C

2.9

2.0

2.82.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2012 4Q2011 4Q2010 4Q2009 4Q2008 4Q2007 4Q

(msf)Four-Quarter Trailing Leasing Activity*

Class A Class B & C

*Sum of leasing activity in prior four quarters

Dade County that have delivered since 2008 total 3.2 msf and still had 1.2 msf available at year’s end.

Consequently, although the office market found a floor in 2012, it was still for the most part bouncing along the bottom as the year came to a close. Leasing activity was quite stable, remaining at 1.4 msf for the second quarter in a row. Deal volume in 2012 (5.7 msf) declined by 6.0% from the 6.1 msf recorded in 2011. Although leasing fell from a year ago, it still exceeded the market’s long-term average of 3.4 msf by 37.6%. Despite the steady leasing, at the end of 2012 South Florida had 24.7 msf being marketed for lease – a 6.7% increase from a year ago. On an annual comparison, Class A space broke even with 11.9 msf being marketed, an increase of 0.4% from the fourth quarter of 2011. A couple of submarkets stand out as having made some inroads in terms of reducing excess Class A space. These include Brickell (with a 17.2% year-on-year decline to 1.0 msf) and Downtown Fort Lauderdale (an 8.6% decline to 1.1 msf). Even so, Class A availability availability rates in Brickell (25.4%) and Downtown Fort Lauderdale (23.8%) were very high as 2012 ended.

South Florida’s office market is still suffering from lethargic labor markets and widespread business caution. The region’s strongest employment growth has been in industries such as healthcare, retail and leisure/hospitality – sectors that typically do not lease traditional office space. Employment numbers underscore the extent to which South Florida lags the nation and other Florida metro areas in terms of job creation, and office-using employment in particular. As of November, South Florida had only recouped 29.1% of the office-using jobs it lost during the recession, well below the U.S. recovery rate of 64.9%. Office-using employment in the region increased by 1.0% in 2012, well below the growth rates for the nation as a whole (+1.9%) and for Tampa Bay (+3.4%) during the same period.

Most local companies remain reluctant to commit to capital expenditures unless they know such outlays will pay near-term dividends. These expenditures include investment in office space or payroll expansion. Companies have kept their spending in check with good reason. Economic growth in South Florida has been lackluster and the broader national economy provides ample causes for concern heading into 2013 – including a standoff on the debt ceiling, federal spending cuts and further tax hikes. Many tenants are renewing or in some cases signing short-term extensions. The largest lease renewal of the quarter was Holland & Knight’s deal for 98,000 sf at 701 Brickell Avenue.

South Florida’s office market still relies principally on demand from corporate space users such as banks and law firms, which are shedding space where and when they can. These core space users are seeking both quality and optimal efficiency. Expansions remain few and far between and most entail the filling out or addition of a floor. Foley & Lardner, for example, added 11,051 of space in its renewal and expansion lease at One Biscayne Tower. In Downtown Fort Lauderdale, Boies, Schiller & Flexner completed a 22,632-lease at 401 East Las Olas Boulevard.

Although availability actually increased slightly in 2012, landlords have pulled back somewhat on concession packages in many Class A properties. Most landlords have

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OFFICE-USING EMPLOYMENT TRENDS

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0.2

0.3

0.4

0.5

0.6

0.7

Millions South Florida

Total Empl. % Ann. Change

Source: Bureau of Labor Statistics

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-6.0%-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%

23

24

25

26

27

28

29

30

Millions National

Total Empl.% Ann. Change

$38.53$32.28$31.78

$30.16$29.62

$28.65$28.02

$27.21$27.03$26.92

$26.15$25.69

$24.49$24.45$24.26$24.22$23.84$23.49

$22.95$22.60$22.10

$21.08

$34.21$25.68

$24.09

$0 $10 $20 $30 $40

BrickellCoral Gables/Grove

Downtown MiamiUS Index

Miami-Dade CountyNE Dade

SW BrowardSouth Dade

Downtown Frt LdrdleSouth FloridaPalm BeachBoca Raton

Broward CountySunrise/Plantation

Hollywood/HallandalePalm Beach County

N Palm BeachWest Miami/Airport

Cypress Cr/Ft LdrdleMiami Lakes/Hialeah

North BrowardBoynton/Delray

NewRelet

Sublet

($/sf)

Overall Rental Rate Comparison

Type

Market

Submarket

14.3%14.4%

16.8%17.1%17.4%18.2%18.9%19.3%19.5%20.2%20.2%

21.7%22.2%22.3%22.9%23.1%

24.3%25.8%26.3%26.9%

31.4%45.4%

0% 10% 20% 30% 40% 50%

South Dade

Hollywood/Hallandale

Coral Gables/Grove

Miami Lakes/Hialeah

US Index

SW Broward

NE Dade

N Palm Beach

West Miami/Airport

Brickell

Miami-Dade County

Sunrise/Plantation

South Florida

Broward County

Downtown Frt Ldrdle

Palm Beach

North Broward

Palm Beach County

Cypress Cr/Ft Ldrdle

Boca Raton

Downtown Miami

Boynton/Delray

(%)

Availability Rate Comparison

Market

Submarket

little ability to increase rents, though. Overall asking rent slipped by 0.7% from $27.12 to $26.92, while Class A rent dipped by 1.0% from $31.18 to $30.87. Even submarkets with a significant amount of new product have seen rents stagnate. Class A rents decreased by 1.4% to $35.02 in Coral Gables and by 2.7% to $34.87 in Downtown Miami. Class A rent in Brickell ticked up by 0.1% to $41.35 but were down by 0.3% from a year ago.

Smaller and mid-sized tenants still have ample options to consider. Creditworthy tenants willing to make long-term commitments can command very generous terms, particularly in areas such as Boca Raton, which ended 2012 with an overall availability rate of 26.9% For instance, The John Hancock Financial Network/The Partners Network signed a 10-year and 10-month, 15,000-sf lease at the Fountains Center in Boca Raton. The property is just a couple of blocks from the financial advisors’ current space at 7000 W. Palmetto Park Road. The company will receive signage on top of the building as part of the lease. In Miami-Dade County, properties in peripheral submarkets such as West Kendall and South Dade offer very strong bargains to tenants with geographical flexibility. Availability in those submarkets exceeds 30%.

Office property sales in South Florida have not registered the comeback seen in top markets such as New York City, Washington, DC and Boston. Few owners of properties with steady cash flow are willing to part with these assets. Buildings with significant vacancies are generally selling at a steep discount from their last purchase price. For example, Sawgrass International Corporate Park, a four office building portfolio, sold for $51.5 million ($148.60 psf) last summer. At time of sale, vacancy was more than 30%. During 2012, South Florida registered only one sale exceeding $100 million (Miami Center at 201 S. Biscayne Boulevard) and just a handful of sales surpassing $50 million. The more widespread availability of commercial loans has helped some owners avoid having to sell at such a steep loss. On the other hand, certain properties are headed to special servicing, a painful reminder that some buildings are still working their way through the fallout from the recession.

Looking ForwardLittle change is expected in either the national or local economies during 2013. Assuming a major shock is avoided and Washington works through its standoff regarding federal spending, most economists expect hiring to pick up a bit in the second half of 2013. The improving housing market supports state and local revenue growth in Florida and boosts related sectors such as construction and mortgage brokers. Tenants still have a deep pool of diverse types of space to consider and should generally remain in the driver’s seat, particularly if they are creditworthy tenants willing to commit to space. The market is also ideal for companies eager to consolidate multiple operations.

Miami Lakes/Hialeah 3,539 99 95 606 1.2% 529 206 17.1% 0.2% 15.0% 6.6% $22.60 0.5% $23.68 $22.79

Miami Lakes/Hialeah - Class A 885 15 29 254 -4.4% 284 46 28.7% -1.3% 32.1% 9.5% $24.45 1.2% $25.43 $23.70

West Miami/Airport 12,035 863 772 2,351 -2.5% 2,227 1,272 19.5% -0.5% 20.3% 12.1% $23.49 -0.6% $23.26 $23.80

West Miami/Airport - Class A 5,355 599 499 882 -0.8% 854 469 16.5% -0.1% 16.5% 10.2% $25.84 0.3% $25.42 $24.21

Downtown Miami 7,988 279 301 2,508 5.7% 2,122 627 31.4% 1.7% 30.3% 9.9% $31.78 -2.1% $33.46 $30.56

Downtown Miami - Class A 5,027 170 225 1,435 2.2% 1,419 298 28.5% 0.6% 28.2% 7.7% $34.87 -2.7% $39.41 $34.93

Brickell 6,967 758 477 1,409 -2.0% 1,753 783 20.2% -0.4% 25.2% 13.6% $38.53 0.2% $37.65 $39.29

Brickell - Class A 4,100 538 316 1,042 -5.7% 1,259 276 25.4% -1.5% 30.7% 8.4% $41.35 0.1% $41.48 $42.55

Coral Gables/Grove 8,557 505 435 1,433 -1.9% 1,412 687 16.8% -0.3% 16.8% 9.0% $32.28 -0.3% $31.05 $35.25

Coral Gables/Grove - Class A 4,180 273 256 943 5.3% 801 389 22.6% 1.1% 19.2% 10.5% $35.02 -1.4% $34.41 $38.74

North Broward 4,255 195 164 1,033 7.4% 919 502 24.3% 1.7% 21.9% 11.8% $22.10 -0.6% $22.59 $22.65

North Broward - Class A 928 0 52 384 11.9% 351 134 41.4% 4.4% 37.8% 14.6% $24.12 -2.1% $25.89 $24.37

Cypress Creek/Fort Lauderdale 8,610 446 416 2,262 4.1% 2,051 1,146 26.3% 1.0% 24.0% 13.5% $22.95 -0.3% $22.58 $22.37

Cypress Creek/Fort Lauderdale - Class A 2,992 172 137 518 -3.9% 636 310 17.3% -0.7% 21.3% 11.2% $24.97 0.2% $25.57 $25.22

Sunrise/Plantation 7,288 212 436 1,583 1.6% 1,454 1,065 21.7% 0.3% 21.0% 17.3% $24.45 -0.4% $24.59 $26.34

Sunrise/Plantation - Class A 4,579 123 326 1,132 1.3% 1,062 737 24.7% 0.3% 23.6% 19.5% $26.67 -1.0% $27.50 $27.88

Downtown Fort Lauderdale 6,090 307 337 1,393 1.7% 1,461 1,325 22.9% 0.4% 24.2% 22.1% $27.03 -0.5% $27.76 $29.96

Downtown Fort Lauderdale - Class A 4,479 239 277 1,065 1.0% 1,165 1,088 23.8% 0.2% 26.0% 23.8% $28.06 -0.1% $28.51 $30.47

Southwest Broward 3,715 200 183 677 7.5% 532 357 18.2% 1.3% 15.6% 10.1% $28.02 -0.9% $28.23 $28.77

Southwest Broward - Class A 2,329 140 142 484 0.3% 389 284 20.8% 0.1% 17.2% 13.1% $29.24 -0.3% $29.41 $30.02

North Palm Beach 4,875 173 163 942 -5.6% 931 668 19.3% -1.1% 19.9% 15.2% $23.84 4.5% $23.10 $27.33

North Palm Beach - Class A 1,775 91 71 419 1.8% 442 243 23.6% 0.4% 24.9% 16.5% $25.11 1.2% $25.69 $33.59

Palm Beach 7,543 379 354 1,739 1.8% 1,724 1,369 23.1% 0.4% 23.7% 19.4% $26.15 -3.3% $27.11 $32.42

Palm Beach - Class A 3,151 117 164 607 -2.5% 573 665 19.3% -0.5% 18.6% 25.4% $32.16 -0.3% $32.51 $35.51

Boynton/Delray 2,047 86 99 929 -0.5% 556 378 45.4% -0.3% 28.5% 22.3% $21.08 -0.3% $21.44 $22.53

Boynton/Delray - Class A 304 1 26 78 13.5% 46 54 25.5% 3.0% 15.0% 25.7% $19.15 1.9% $18.82 $23.49

Boca Raton 11,784 600 760 3,172 -6.6% 3,068 2,699 26.9% -1.9% 27.5% 25.4% $25.69 -0.6% $26.20 $28.64

Boca Raton - Class A 6,706 342 480 1,927 -9.7% 1,897 1,884 28.7% -3.1% 28.7% 29.7% $26.68 -1.0% $27.28 $29.20

MIAMI-DADE TOTAL 52,094 2,995 2,473 10,533 1.6% 9,964 4,693 20.2% 0.3% 20.1% 10.4% $29.62 -0.7% $29.64 $30.29

MIAMI-DADE TOTAL - Class A 23,298 1,704 1,458 5,257 -1.6% 5,262 1,872 22.6% -0.4% 23.1% 9.9% $34.01 -0.8% $35.06 $33.79

BROWARD COUNTY TOTAL 33,290 1,506 1,687 7,427 3.4% 6,938 4,618 22.3% 0.7% 21.3% 14.9% $24.49 -0.5% $24.68 $26.05

BROWARD COUNTY TOTAL - Class A 15,786 683 962 3,628 0.9% 3,645 2,587 23.0% 0.2% 23.3% 17.6% $26.96 -0.6% $27.55 $28.75

PALM BEACH COUNTY TOTAL 26,249 1,237 1,376 6,782 -3.6% 6,279 5,114 25.8% -1.0% 24.7% 21.5% $24.22 -0.6% $24.96 $29.30

PALM BEACH COUNTY TOTAL -Class A 11,936 551 741 3,030 -6.4% 2,957 2,846 25.4% -1.7% 25.1% 26.8% $28.53 -0.3% $29.08 $34.34

SOUTH FLORIDA TOTAL 111,633 5,739 5,535 24,742 0.7% 23,181 14,425 22.2% 0.1% 21.6% 14.4% $26.92 -0.7% $27.17 $28.40

SOUTH FLORIDA TOTAL - Class A 51,020 2,938 3,161 11,915 -2.1% 11,864 7,305 23.4% -0.5% 23.6% 16.5% $30.87 -1.0% $31.67 $31.46

MARKET SNAPSHOT: 4Q 2012

The information in this report is obtained from sources deemed

reliable, but no representation is made as to the accuracy thereof. Statistics compiled with the support of The CoStar Group.

Copyright © 2013 Studley

SOUTH FLORIDA CONTACTS

200 S. Biscayne Blvd.Suite 1830Miami, FL 33131(305) 423-1919

STUDLEY OFFICE MARKET AND SPACEDATA REPORT

(1) Percentage point change for availability rates. Unless otherwise noted, all rents quoted throughout this report are average asking

gross (full service) rents psf. Statistics are calculated using both direct and sublease information.

SUBMARKET TOTAL LEASING ACTIVITY VACANT AVAILABLE ASKING RENTS PER SFAVAILABILITY RATE

Inventory SF

(1,000’s)

Last12

Mos

5Yr

Average

5 Yrs

AgoThis Qtr

% Change

fromLast Qtr

YrAgo

5 Yrs

AgoThis Qtr

ppChange

from Last Qtr

YrAgo

This Qtr

% Change

fromLast Qtr

YrAgo

5 Yrs

Ago(1)

Corporate Research ContactSteve Coutts - SVP, National Researchscoutts@studley.com(212) 326-8610