3Q 2017 - Miami Occupier and Pricing Trends

CORAL GABLES DIRECT VACANCY (%) 2007-3Q 2017

CORAL GABLES SUPPLY HIGHLIGHTS

Third quarter’s direct Class A vacancy made a dramatic descent from year-end’s near 13.0% to the current 8.7%. This was due to the capture of half of the entire metro area’s positive absorption during 2017. In a reverse trend, vacancy among Class B assets rose as negative absorption levels totaled 61,000 SF between 2016 to the present. At 5.4 million SF, Coral Gables was third quarter’s second-largest Suburban submarket. It is considered a premier location with two-thirds of its office stock comprised of Class A assets. Known for its upscale shopping, dining and luxury residential neighborhoods, the area is undergoing a significant streetscape revitalization. Located at the center of its urban core (on and surrounding the famed Miracle Mile corridor), the improvements also include new outdoor dining options. Third quarter had three existing Class A properties with large (20,000+ SF) contiguous blocks of space: 121 Alhambra, Douglas Entrance and 2525 Ponce. The largest contiguous office at the Class A Two Alhambra building was 7,000 SF while the adjacent Class B 95 Merrick building had 5,700 SF as its largest space. At the beginning of 2017, a noteworthy sublet hit the market: Bacardi’s three floors (9-11) at the Bacardi Building totaling nearly 83,000 SF. This 2009 project was a build-to-suit development for the Bacardi Headquarters and was not among the direct competitive set. At 355 Alhambra, the largest contiguous direct space was on the 11th floor (13,826 SF). The building remained at 85.0% leased. Also, an 11th floor, 5,300 SF sublet was available with term through 2022. Sold in December 2015, the 224,000+ SF acquisition was The Prudential Insurance Company of America’s most recent purchase in Coral Gables. An upcoming 22,000 SF office (first quarter 2018) was being marketed as the largest contiguous office at the Class A 2525 Ponce building. The space was located on the eighth floor of the 96.0% leased building. Also part of the complex is the 2555 Ponce building, a 108,000 SF Class B asset. Although fully leased, a new 18,000 SF office on the fourth floor will be available by fourth quarter 2018.

Percent Percent

CORAL GABLES Direct Vacancy (%), 2007-3Q 2017

10.0 15.0 20.0 25.0 30.0

0.0 5.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Class A Class B

Class A

Class B

CORAL GABLES TOTAL NET ABSORPTION, 2007-3Q 2017

SF

CORAL GABLES Total Net Absorption, 2007-3Q 2017

SF

300,000

200,000

100,000

0

-100,000

-200,000

-300,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Class A Class B

Class A

Class B

CORAL GABLES AVERAGE DIRECT RENTAL RATES, 2007-3Q 2017

OFFICE MARKET STATISTICS | 3Q 2017

Quoted Rate PSF Quot Rate PSF

Existing Inventory SF

Direct Vacancy %

Total Vacancy %

Average Direct RR PSF Quoted

CORAL GABLES Average Direct Rental Rates, 2007-3Q 2017

YTD Completions

Under Construction

YTD Net

$10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00

Coral Gables Class A

0

132,381

3,584,140 8.7% 8.9% 143,486

$40.54

Coral Gables Class B

0

0

1,880,786 12.8% 12.8% -52,133

$35.73

Totals

0

132,381

5,464,926 10.1% 10.3%

91,353

$38.66

$0.00 $5.00

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Class A Class B

Class A

Class B

Cushman & Wakefield of Florida, Inc. / 36