NORTHERN VIRGINIA OFFICE EconomyThe Washington, DC Metropolitan Regions economy continues to thrive. Second-quarter 2015 data reflects positive job gains and falling unemployment. As of May 2015, the unemployment rate registered 4.6%, a 0.4 percentage point decline from May 2014. Northern Virginias (NoVA) economy has been equally impressive so far in 2015. Through May of this year, NoVAs economy has created 14,900 nonfarm payroll jobs, eclipsing its 2014 total of 12,100 nonfarm jobs. Since the end of the recession, employment gains have largely been concentrated in the surging leisure and hospitality services sector and thus have had no significant impact on office leasing demand. In 2015 though, nearly half of the jobs added year to date have been office-using jobs. The NoVA economy relies heavily both directly and indirectly on the federal government to bolster its economy. The size of the NoVA federal workforce has been contracting since 2011, but there are signs of increasing stability. In the second quarter of 2015, NoVA added 431 positions to federal payrolls. With increased budget authority for fiscal year 2015, federal government spending will increase for major NoVA demand drivers such as the Department of Defense, the National Science Foundation and the Defense Advanced Research Projects Agency. This spending will lead to increased contracting opportunities in the private sector, resulting in increased hiring and demand for office space.

Market OverviewAfter shedding 197,500 square feet (sf) during the first quarter of 2015, the Northern Virginia (NoVA) office market returned to growth during the second quarter of the year. The region registered 370,100 sf of absorption over the quarter, driven primarily by private sector demand. Unlike in the first quarter of the year, demand in NoVA submarkets located outside of the Capital Beltway outpaced that in the interior markets, absorbing 440,300 sf during the second quarter. The largest lease signed during the second quarter of 2015 in all of NoVA was that of Capital One which signed for 136,000 sf at 1750 Tysons Boulevard in Tysons Corner. The Fortune 200 firms expansion in Tysons backfilled space that was vacated by Deloitte in its move to Tysons Tower last year. Other notable leases included that for MC Dean which renewed its lease for 69,000 sf at 22980 Indian Creek Drive, and that for BDO which signed for 53,400 sf at 8401 Greensboro Drive as it relocated in Tysons. Federal contractor downsizing was evident again across the NoVA submarkets during the second quarter. Most notably, Unisys vacated 179,200 sf at 11493 Sunset Hills Road in Reston in a consolidation. Still, increased demand from the financial services and technology sectors offset space reductions from the contracting community.

As of the end of the second quarter of 2015, year-to-date absorption in NoVA registered 172,600 sf. With positive demand, the overall vacancy rate in NoVA dropped 0.2 percentage points from the previous quarter to 18.8%. NoVA still has over 30.5 msf of vacant space which is limiting rent growth in the market. At the end of the second quarter of 2015, average asking rents were $31.63 per square foot (psf) on a full-service basis, an increase of just $0.08 from a year ago. No major construction projects are scheduled to deliver in 2015; consequently vacancy could tighten as existing product captures demand and drives rents upward.

Overall Vacancy

Net Absorption/Asking Rent 4Q TRAILING AVERAGE

Market IndicatorsQ2 14 Q2 15 12-Month Forecast

Overall Vacancy 18.1% 18.8%

Net Absorption 130K 370K

Under Construction 1.5M 1.9M

Average Asking Rent $31.66 $31.63

Economic IndicatorsQ2 14 Q2 15 12-Month Forecast

DC Metro Employment 3.11M 3.17M

DC Metro Unemployment 5.0% 4.6%

U.S. Unemployment 6.1% 5.3%

$26

$28

$30

$32

$34

-3

-2

-1

0

1

2

2010 2011 2012 2013 2014 2015

Net Absorption, MSF Asking Rent, $ PSF

10%

12%

14%

16%

18%

20%

2010 2011 2012 2013 2014 2015

Historical Average = 16.2%

NORTHERN VIRGINIA

Office Market SnapshotSecond Quarter 2015

www.dtz.com | 2

About DTZDTZ is a global leader in commercial real estate services providing occupiers, tenants and investors around the world with a full spectrum of property solutions. The companys core capabilities include agency leasing, tenant representation, corporate and global occupier services, property management, facilities management, facility services, capital markets, investment and asset management, valuation, research, consulting, and project and development management. DTZ provides property management for 1.9 billion square feet, or 171 million square meters, and facilities management for 1.3 billion square feet, or 124 million square meters. The company completed $63 billion in transaction volume globally in 2014 on behalf of institutional, corporate, government and private clients. Headquartered in Chicago, DTZ has more than 28,000 employees who operate across more than 260 offices in 50 countries and represent the companys culture of excellence, client advocacy, integrity and collaboration.

DTZ announced an agreement to merge with Cushman & Wakefield in a May 11 press release. The new company, which will operate under the Cushman & Wakefield brand, will have revenues over $5.5 billion, over 43,000 employees and will manage more than 4 billion square feet globally on behalf of institutional, corporate and private clients. The agreement is subject to customary closing conditions and is expected to close before the end of 2015. For further information, visit: www.dtz.com or follow us on Twitter @DTZ.

NORTHERN VIRGINIA

Office Market SnapshotSecond Quarter 2015

TOTAL BLDG INVENTORY

SUBLET VACANT

TOTAL VACANT

VACANCY RATE

AVAILABILITY RATE

CURRENT ABSORPTION

YTD ABSORP-

TIONUNDER CON-STRUCTION

AVERAGE ASKING RENT

SUBMARKETRosslyn 38 8,817,402 63,272 2,646,551 30.0% 36.0% 18,288 58,474 552,781 $40.26 Clarendon/Courthouse 37 4,862,816 69,764 980,889 20.2% 24.9% (42,144) (40,714) - $42.38 Virginia Square 16 1,120,831 53,899 293,407 26.2% 37.3% (1,726) (583) - $38.13 Ballston 33 7,332,378 49,892 1,321,963 18.0% 32.5% 54,352 67,939 - $41.07 Crystal City 39 11,036,748 34,446 2,475,904 22.4% 24.8% 68,730 55,987 - $38.17 Pentagon City 6 1,781,463 0 281,756 15.8% 49.5% (24,907) (24,907) - -Arlington County 169 34,951,638 271,273 8,000,470 22.9% 30.8% 72,593 116,196 552,781 $39.76 R/B Corridor** 124 22,133,427 236,827 5,242,810 23.7% 32.5% 28,770 85,116 552,781 $40.79 Old Town 163 8,109,935 86,979 884,086 10.9% 17.2% 41,286 21,175 - $32.06 Eisenhower 28 4,883,598 10,803 495,943 10.2% 11.5% 19,343 768 720,000 $38.95 I-395 60 7,914,855 227,601 3,137,116 39.6% 39.8% (203,437) (239,171) - $29.21 Alexandria 251 20,908,388 325,383 4,517,145 21.6% 25.1% (142,808) (217,228) 720,000 $30.92 Inside the Beltway* 420 55,860,026 596,656 12,517,615 22.4% 28.7% (70,215) (101,032) 1,272,781 $36.78 Tysons Corner 170 25,884,383 400,136 4,679,160 18.1% 24.7% 91,037 73,020 476,913 $31.19 Reston 177 18,308,262 265,126 2,667,736 14.6% 18.8% 11,948 (29,258) - $29.16 Herndon 133 11,737,088 146,880 1,346,561 11.5% 23.3% 103,512 144,476 - $26.22 Merrifield 92 7,878,879 47,150 1,424,018 18.1% 20.5% 68,851 (137,079) - $32.11 Vienna 26 1,170,945 0 84,790 7.2% 11.6% (99) (4,743) - $26.77 Oakton 14 1,010,261 3,209 236,090 23.4% 27.4% (2,775) (3,575) - $25.70 Fairfax Center 64 6,538,055 52,625 966,511 14.8% 28.6% 12,228 (1,214) - $27.90 Fairfax City 89 3,352,765 10,188 448,741 13.4% 20.0% 11,249 16,771 - $23.32 28 South 148 13,585,173 125,200 2,701,225 19.9% 28.1% 37,960 (25,082) 161,030 $24.75 Springfield/Newington 64 5,551,040 125,694 1,463,452 26.4% 40.6% 24,120 66,547 - $31.31 Fairfax County 977 95,016,851 1,176,208 16,018,284 16.9% 23.4% 358,031 99,863 637,943 $28.52 50/66*** 285 19,950,905 113,172 3,160,150 15.8% 22.8% 89,454 (129,840) - $28.69 28 North 88 6,160,982 79,963 853,250 13.8% 15.9% 19,589 66,183 - $23.90 Route 7 83 4,290,607 1,538 950,445 22.2% 22.9% 43,631 96,030 - $22.86 Leesburg 31 1,048,948 5,410 124,195 11.8% 12.8% 19,042 11,561 20,500 $23.97 Loudoun County 202 11,500,537 86,911 1,927,890 16.8% 17.5% 82,262 173,774 20,500 $23.41 Outside the Beltway* 1,179 106,517,388 1,263,119 17,946,174 16.8% 23.5% 440,293 273,637 658,443 $28.13

NOVA MARKET TOTALSTOTAL 1,599 162,377,414 1,859,775 30,463,789 18.8% 25.3% 370,078 172,605 1,931,224 $31.63

Key Lease Transactions 2Q 15PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET

1750 Tysons Boulevard 136,000 Capital One Relet Tysons Corner22980 Indian Creek Drive 69,000 MC Dean Relet Route 28 North8401 Greensboro Drive 53,400 BDO USA, LLP Relet Tysons Corner901 North Glebe Road 45,000 Nixon & Vanderhye Renewal Ballston3100 Clarendon Boulevard 43,300 Uber New Clarendon/Courthouse

*Inside the Beltway is comprised of Arlington County and Alexandria/Outside the Beltway is comprised of Fairfax and Loudoun Counties.**The Rosslyn/Ballston (R/B) corridor is comprised of Rosslyn, Clarendon/Courthouse, Virginia Square, and Ballston submarkets.***The 50/66 corridor is comprised of Merrifield, Vienna, Oakton, Fairfax Center, and Fairfax City submarkets.p - preliminary

CJ Hardy Research Analyst

2101 L Street, NW Suite 700 Washington, DC 20037 Tel: +1 202 463 2100 Fax: +1 202 223 2989 Email: cj.hardy@dtz.com

The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

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