3Q 2017 - Miami Occupier and Pricing Trends

COCONUT GROVE SUPPLY HIGHLIGHTS (CONTINUED)

Planned office construction will provide tenants and Coconut Grove prospects new options. At midyear 2017, 300,000 SF were proposed; by third quarter, the figure grew to 716,000 SF including one project that broke ground. Several of the projects have 2018/2019 completions. All of the projects will offer retail amenities. Under construction as of third quarter, the Mary Street development is a 95,000 SF building, of which 75,000 SF will be office with the remaining comprised of retail space. Completion is scheduled by year-end 2018. The One and Two Cocowalk development will result from a revitalization of the existing 200,000 SF Cocowalk retail/destination complex into a new and rebranded mixed- use project. Phase I (One Cocowalk) will include a 7,200 SF stand-alone office with completion set for first quarter 2018; demolition for Phase II will then commence. Two Cocowalk will be a newly constructed five-story, 79,000 SF office building with completion scheduled by third quarter 2019. Of note, will be ample parking at 3.5/1,000 SF and floor plates of 18,000-20,000 SF. The project will have ground floor retail and a rooftop deck available for events.

Class A leasing included the Ritz-Carlton Yacht Collection’s new 14,000 SF headquarters at SBS Biscayne Bank Tower while Housing Trust Group renewed and expanded their office for 8,400 SF at Bayview Executive Center. With its first new tenants, transactional activity was executed at the recently completed GL Tower for Max Strang Architecture (2,800 SF) and Carmardo Law Firm (1,100 SF).

At the Class B Mayfair in the Grove, a new bookstore operator executed a 7,800 SF lease.

3% COCONUT GROVE Executed Leases, 3Q 2017 % of Total by Employment Industry

EXECUTED LEASES 3Q 2017 % Of Total By Employment Industry

3%

23%

Leisure &

LointerHome closed in 2017 on a site for the construction of 27@Lincoln, a 68,000 SF office and retail building. Construction is anticipated to start in the first quarter of 2018.

23%

Real Estate

Announced at midyear 2017, was another planned five-story office building. Located at 3480 Main Highway in the heart of the Grove’s commercial district, the building will offer 44,000 SF of office space and 6,500 SF of rooftop restaurant space. In the third quarter, the existing building had been demolished although no construction dates had yet to be confirmed.

41%

Business S

Law Firm

COCONUT GROVE DEMAND HIGHLIGHTS

The Grove’s existing office tenants were characteristically smaller (under 10,000 SF) and primarily made up of business support users, followed by finance and law firms. There were, however, a handful of large users whose movement can have a disproportionate impact on a small and shifting inventory. This had contributed to some of the wider swings in vacancy and absorption such as Sapient, a new to market user in late 2012 who executed a 54,000 SF lease at Mayfair in the Grove. Third quarter saw the highest levels of positive absorption in almost four years. This was true for both classes of space where 13,000 SF–14,000 SF of new occupancy was gained for each class of space. Less than 43,000 SF in total remained vacant at quarter’s end. Despite limited choices due to extremely low levels of supply, several noted transactions were executed this quarter.

41%

33%

33%

Leisure & Hospitality

Real Estate

Business Services

Law Firm

Cushman & Wakefield of Florida, Inc. / 32