ADT Building OM

ADT BUILDING | PALM BEACH OFFICE MARKET OVERVIEW The Property is located within the Palm Beach County office market, which comprises approximately 24 million SF per Cushman & Wakefield research. The County, located at the northern end of the sprawling South Florida area, is the largest county in the state of Florida and has historically been at the forefront of Florida’s rising population and growing economy. ECONOMY Palm Beach County exhibited healthy economic activity as the market added 9,900 new jobs throughout the year, ending 2016 with an unemployment rate of only 4.7%, down 20 bps from the previous month. Job diversification continued to impact the county’s economy with significant improvement in IT and health-related industries. Development of public transit is paving the way for future growth in Palm Beach County. The anticipation of opening the 60,000 SF All Aboard Florida passenger rail station in West Palm Beach was a factor in the area’s office market improvement. MARKETBEAT Palm Beach County OfficeQ4 2016

MARKET OVERVIEW Demand for office space remained positive as the market absorbed 575,276 SF of space during the the year. Quality Class A space continued to be desirable, marked by a decrease in overall vacancy of 190 bps in 12 months to 12.8%. However, the actual vacancy should be much lower, as most of the available space has already been leased with tenants not expected to move in until later in 2017. Developers have proposed approximately 546,000 SF of office and mixed-use space in the suburban submarkets of Palm Beach County, and 88,069 SF of office were under construction at year-end. The imbalance between new supply and demand continue to drive rental rates higher in major submarkets. Overall suburban rents increased to $32.98 PSF, gross, while in Class “A” space the year ended with an average ask of $40.14 PSF, gross. Leasing activity was robust in 2016, with the most active submarket being Northwest Boca Raton.

PALM BEACH COUNTY OFF I CE STAT I ST I CS - FOURTH QUARTER 20 1 6

OVERALL AVERAGE ASKING RENT (CLASS A)*

CURRENT QTR OVERALL NET ABSORPTION (SF)

YTD OVERALL NET ABSORPTION (SF)

YTD LEASING ACTIVITY (SF) 115,334 167,779 159,534

OVERALL AVERAGE ASKING RENT (ALL CLASSES)*

SUBLET VACANT (SF)

DIRECT VACANT (SF)

OVERALL VACANCY RATE

UNDER CNSTR (SF)

INVENTORY (SF)

SUBMARKET

West Palm Beach CBD Suburban West Palm Beach Suburban West Palm Beach

3,235,755 3,897,642 3,372,323

0 547,939

16.9% 32,887 17.9% 44,888 17.7% 43,666 19.4% 1,222 9.4% 22,245 9.2% 26,109 10.7% (3,864) 32.2% (24,794) 7.4% (3,629) 24.6% (11,148) 45.5% (10,017) 13.3% 26,395 15.5% 41,686 12.7% 23,312 12.5% (31,092) 9.5% (5,904) 13.9% (1,607) 15.8% 68,734 16.0% 101,621

42,809 112,240 104,657 103,497 105,061 (1,564) 33,314 12,931 10,567 283,416 184,640 37,621 7,583 9,816

0 0 0 0

$40.33 $32.33 $27.63 $58.79 $34.77 $34.44 $33.94 $29.32 $29.83 $27.75 $40.50 $36.35 $37.89 $33.65 $33.03 $33.95 $35.09 $32.98 $34.70

$51.69 $39.85 $30.92 $61.64 $40.83 $40.83 $35.54 $34.00 $37.00 $40.45 $42.03 $38.44 $35.94 $36.50 $43.75 $38.44 $38.44 $0.00 $0.00

5,769 693,108 1,996 595,049

Palm Beach

525,319

3,773

98,059

8,245

North Palm Beach

3,663,084

5,986 339,802 1,926 281,751

107,910 63,500 78,636 63,500

Palm Beach Gardens/N. Palm Beach 3,080,687

Jupiter/Tequesta/Juno South Palm Beach

582,397

4,060

58,051

29,274

0

2,507,600

4,462 804,026

49,039 24,569

Lake Worth

582,085 528,089

0

43,094

5,000

0 0

Boynton Beach Delray Beach Boca Raton Glades Road

0 129,654

15,939

1,397,426

4,462 631,278

28,100 24,569

10,539,473 37,697 1,366,053

364,866 111,921 19,534 182,455 23,847 27,109

0 0 0 0 0 0

3,018,463 1,638,899

9,449 457,700 5,828 201,929

Federal Highway Corridor Northwest Boca Raton Southwest Boca Raton Downtown Boca Raton

(854)

4,379,574 20,490 528,592

36,800 25,209

657,631 844,906

0

62,535

1,930 115,297

Suburban

20,607,799 53,914 3,202,989

532,467 689,594 88,069

575,276

804,928

88,069

PALM BEACH COUNTY TOTALS 23,843,554 53,914 3,750,928

*Rental rates reflect gross asking $psf/year

CURRENT QTR OVERALL NET ABSORPTION (SF)

YTD OVERALL NET ABSORPTION (SF)

YTD LEASING ACTIVITY (SF)

SUBLET VACANT (SF)

DIRECT VACANT (SF)

OVERALL VACANCY RATE

UNDER CNSTR (SF)

YTD CONSTR COMPLETIONS (SF)

DIRECT AVERAGE ASKING RENT*

INVENTORY (SF)

// 44

9,348,621 23,577 1,169,348 13,401,180 27,210 2,505,199

12.8% 35,214 18.9% 53,517

346,300 272,525

298,199 63,500 460,911 24,569

0 0

$38.42 $31.29

Class A Class B