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Palm Beach County Office Market

T H I R D Q U A R T E R 2 0 1 3

The CoStarOffice Report


©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT A

THIRD QUARTER 2013 – PALM BEACH COUNTY

Table of ContentsTable of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B

Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C

Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CoStar Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Inventory & Development AnalysisSelect Top Under Construction PropertiesSelect Top Deliveries

Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Figures at a Glance by Class & MarketFigures at a Glance Grouped by CBD vs SuburbanHistorical Figures at a Glance

Leasing Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Select Top Lease Transactions

Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Sales Activity AnalysisSelect Top Sales Transactions

Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Boca Raton MarketBoynton/Lantana MarketDelray Beach MarketJupiter MarketNorth Palm Beach MarketPalm Beach MarketPalm Springs/Lake Worth MarketRoyal Palm Bch/Wellington MarketWest Palm Beach Market


B THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.

PALM BEACH COUNTY – THIRD QUARTER 2013


©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C


Methodology

The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group’s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.

© Copyright 2013 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

CoStar Group, Inc.

1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP

For information on subscribing to CoStar’s other products and services, please contact us at

1-877-7COSTAR, or visit our web site at www.costar.com


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©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C


Terms & DefinitionsAvailability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet.

Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date.

Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the ten-ant. In a leased build-to-suit, a tenant will usually have a long term lease on the space.

Buyer: The individual, group, company, or entity that has pur-chased a commercial real estate asset.

Cap Rate: Short for capitalization rate. The Cap Rate is a calcula-tion that reflects the relationship between one year’s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price).

CBD: Abbreviation for Central Business District. (See also: Central Business District)

Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA.

Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-of-a-kind floor plans. They can be an archi-tectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fit-tings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality.

Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typical-ly have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors.

Class C: A classification used to describe buildings that gener-ally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors.

Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries)

Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space.

Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property.

Delivery Date: The date a building completes construction and receives a certificate of occupancy.

Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepre-neurial efforts.

Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased.

Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation.

Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typi-cal flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off.

Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance.

Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space.

Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings.

Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The pri-mary purpose of the space is for storing, producing, assembling, or distributing product.

Landlord Rep: (Landlord Representative) In a typical lease trans-action between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep.

Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease.

Leasing Activity: The volume of square footage that is commit-ted to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings.

Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundar-ies of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets)


D THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.

PALM BEACH COUNTY – THIRD QUARTER 2013 THIRD QUARTER 2013 – PALM BEACH COUNTY


©2013 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 1

Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different tenant needs. (See also: Tenancy).

Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space.

Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs.

New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant.

Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant.

Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufactur-ing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor.

Owner: The company, entity, or individual that holds title on a given building or property.

Planned/Proposed: The status of a building that has been announced for future development but not yet started construction.

Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date.

Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA).

Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the vari-ous systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly.

Quoted Rental Rate: The asking rate per square foot for a par-ticular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease.

RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area)

Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of eco-nomic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets)

Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant.

Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant’s rental obligation. Generally RBA includes a percentage of common areas including all hall-ways, main lobbies, bathrooms, and telephone closets.

Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis.

Sales Price: The total dollar amount paid for a particular property at a particular point in time.

Sales Volume: The sum of sales prices for a given group of build-ings in a given time period.

Seller: The individual, group, company, or entity that sells a par-ticular commercial real estate asset.

SF: Abbreviation for Square Feet.

Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy)

Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space.

Submarkets: Specific geographic boundaries that serve to delin-eate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market).

Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metro-politan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD)

Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant)

Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep.

Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied.

Under Construction: The status of a building that is in the process of being developed, assembled, built or constructed. A building is considered to be under construction after it has begun construc-tion and until it receives a certificate of occupancy.

Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations.

Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not avail-able. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be con-sidered vacant space.

Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces.

Year Built: The year in which a building completed construction and was issued a certificate of occupancy.

YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through what-ever time period is being studied.


D THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.

PALM BEACH COUNTY – THIRD QUARTER 2013 THIRD QUARTER 2013 – PALM BEACH COUNTY



OVERVIEW

Palm Beach County’s Vacancy Falls to 15.6% Net Absorption Positive 153,942 SF in the Quarter

The Palm Beach County Office market ended the third quarter 2013 with a vacancy rate of 15.6%. The vacancy rate was down over the previous quarter, with

net absorption totaling positive 153,942 square feet in the third quarter. Vacant sublease space decreased in the quarter, ending the quarter at 161,071 square feet. Rental rates ended the third quarter at $25.58, an increase over the previous quarter. There was 194,120 square feet still under construction at the end of the quarter.

AbsorptionNet absorption for the overall Palm Beach County office

market was positive 153,942 square feet in the third quarter 2013. That compares to positive 87,083 square feet in the second quarter 2013, negative (10,172) square feet in the first quarter 2013, and positive 414,225 square feet in the fourth quarter 2012.

Tenants moving out of large blocks of space in 2013 include: Ob/Gyn Specialists of the Palm Beaches, P.A. moving out of 28,604 square feet at Flagler Waterview; S & H Solutions moving out of 20,351 square feet at 1625 S Congress Ave; and Kubicki Draper moving out of 19,074 square feet at 1645Palm Beach Lakes Blvd.

Tenants moving into large blocks of space in 2013 include: Aldridge Connors LLP moving into 39,788 square feet at 1615 S Congress; BMI Elite moving into 20,150 square feet at The Siena at Broken Sound; and TherapeuticsMD moving into 17,686 square feet at 6800 Broken Sound Pky NW.

The Class-A office market recorded net absorption of posi-tive 107,771 square feet in the third quarter 2013, compared to

negative (246) square feet in the second quarter 2013, negative (766) in the first quarter 2013, and positive 139,220 in the fourth quarter 2012.

The Class-B office market recorded net absorption of posi-tive 93,368 square feet in the third quarter 2013, compared to positive 97,991 square feet in the second quarter 2013, negative (5,283) in the first quarter 2013, and positive 215,322 in the fourth quarter 2012.

The Class-C office market recorded net absorption of nega-tive (47,197) square feet in the third quarter 2013 compared to negative (10,662) square feet in the second quarter 2013, negative (4,123) in the first quarter 2013, and positive 59,683 in the fourth quarter 2012.

Net absorption for Palm Beach County’s central business district was positive 50,446 square feet in the third quarter 2013. That compares to negative (24,122) square feet in the second quarter 2013, negative (30,571) in the first quarter 2013, and positive 99,576 in the fourth quarter 2012.

Net absorption for the suburban markets was positive 103,496 square feet in the third quarter 2013. That compares to positive 111,205 square feet in second quarter 2013, positive 20,399 in the first quarter 2013, and positive 314,649 in the fourth quarter 2012.

VacancyThe office vacancy rate in the Palm Beach County market

area decreased to 15.6% at the end of the third quarter 2013. The vacancy rate was 15.8% at the end of the second quarter 2013, 16.0% at the end of the first quarter 2013, and 15.9% at the end of the fourth quarter 2012.

Vacancy Rates by Class 1999-2013

Source: CoStar Property®

Absorption & Deliveries U.S. Vacancy ComparisonPast 9 Quarters Past 9 Quarters

Source: CoStar Property• Source: CoStar Property•

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2 THE COSTAR OFFICE REPORT ©2013 COSTAR GROUP, INC.


Palm Beach County Office MarketTHIRD QUARTER 2013 – PALM BEACH COUNTY



OVERVIEW

Class-A projects reported a vacancy rate of 17.7% at the end of the third quarter 2013, 18.4% at the end of the second quarter 2013, 18.4% at the end of the first quarter 2013, and 18.4% at the end of the fourth quarter 2012.

Class-B projects reported a vacancy rate of 17.6% at the end of the third quarter 2013, 17.8% at the end of the second quarter 2013, 18.1% at the end of the first quarter 2013, and 18.0% at the end of the fourth quarter 2012.

Class-C projects reported a vacancy rate of 8.5% at the end of the third quarter 2013, 8.1% at the end of second quarter 2013, 8.0% at the end of the first quarter 2013, and 7.9% at the end of the fourth quarter 2012.

The overall vacancy rate in Palm Beach County’s central business district at the end of the third quarter 2013 decreased to 14.8%. The vacancy rate was 15.1% at the end of the second quarter 2013, 14.9% at the end of the first quarter 2013, and 14.7% at the end of the fourth quarter 2012.

The vacancy rate in the suburban markets decreased to 15.9% in the third quarter 2013. The vacancy rate was 16.1% at the end of the second quarter 2013, 16.4% at the end of the first quarter 2013, and 16.3% at the end of the fourth quarter 2012.

Largest Lease SigningsThe largest lease signings occurring in 2013 included: the

72,047-square-foot lease signed by Tyco Integrated Security at 4700 T Rex Ave in the Boca Raton market; the 40,000-square-foot deal signed by Akerman Senterfitt LLC at Phillips Point in the West Palm Beach market; and the 39,788-square-foot lease signed by Aldridge Connors LLP at 1615 S Congress in the Delray Beach market.

Sublease VacancyThe amount of vacant sublease space in the Palm Beach

County market decreased to 161,071 square feet by the end of the third quarter 2013, from 183,705 square feet at the end of the second quarter 2013. There was 140,692 square feet vacant

at the end of the first quarter 2013 and 125,660 square feet at the end of the fourth quarter 2012.

Palm Beach County’s Class-A projects reported vacant sublease space of 58,181 square feet at the end of third quarter 2013, down from the 80,395 square feet reported at the end of the second quarter 2013. There were 41,899 square feet of sub-lease space vacant at the end of the first quarter 2013, and 34,041 square feet at the end of the fourth quarter 2012.

Class-B projects reported vacant sublease space of 76,544 square feet at the end of the third quarter 2013, down from the 84,226 square feet reported at the end of the second quarter 2013. At the end of the first quarter 2013 there were 80,389 square feet, and at the end of the fourth quarter 2012 there were 83,097 square feet vacant.

Class-C projects reported increased vacant sublease space from the second quarter 2013 to the third quarter 2013. Sublease vacancy went from 19,084 square feet to 26,346 square feet dur-ing that time. There was 18,404 square feet at the end of the first quarter 2013, and 8,522 square feet at the end of the fourth quarter 2012.

Sublease vacancy in Palm Beach County’s central business district stood at 51,869 square feet at the end of the third quarter 2013. It was 38,569 square feet at the end of the second quarter 2013, 32,437 square feet at the end of the first quarter 2013, and 32,437 square feet at the end of the fourth quarter 2012.

Sublease vacancy in the suburban markets ended the third quarter 2013 at 109,202 square feet. At the end of the second quarter 2013 sublease vacancy was 145,136 square feet, was 108,255 square feet at the end of the first quarter 2013, and was 93,223 square feet at the end of the fourth quarter 2012.

Rental RatesThe average quoted asking rental rate for available office

space, all classes, was $25.58 per square foot per year at the end of the third quarter 2013 in the Palm Beach County market area. This represented a 0.1% increase in quoted rental rates from the end of the second quarter 2013, when rents were reported at $25.55 per square foot.

The average quoted rate within the Class-A sector was $32.17 at the end of the third quarter 2013, while Class-B rates stood at $23.50, and Class-C rates at $20.26. At the end of the second quarter 2013, Class-A rates were $32.19 per square foot, Class-B rates were $23.38, and Class-C rates were $19.77.

The average quoted asking rental rate in Palm Beach County’s CBD was $27.48 at the end of the third quarter 2013, and $24.99 in the suburban markets. In the second quarter 2013, quoted rates were $27.40 in the CBD and $24.97 in the suburbs.

Deliveries and ConstructionDuring the third quarter 2013, no new space was completed

in the Palm Beach County market area. This compares to no new space completed in the second quarter 2013, three buildings





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OVERVIEW

totaling 42,200 square feet completed in the first quarter 2013, and 27,490 square feet in one building completed in the fourth quarter 2012.

There were 194,120 square feet of office space under con-struction at the end of the third quarter 2013.

Some of the notable 2013 deliveries include: University Centre II, a 30,000-square-foot facility that delivered in first quarter 2013 and is now 100% occupied, and 1600 N Dixie Hwy, a 6,200-square-foot building that delivered in first quarter 2013 and is now 0% occupied.

The largest projects underway at the end of third quarter 2013 were Harbourside Place - Building #5, a 38,430-square-foot building with 7% of its space pre-leased, and Hagen Ranch Medical Center, a 36,000-square-foot facility that is 30% pre-leased.

InventoryTotal office inventory in the Palm Beach County market

area amounted to 54,297,318 square feet in 2,746 buildings as of the end of the third quarter 2013. The Class-A office sector consisted of 13,195,439 square feet in 119 projects. There were 1,076 Class-B buildings totaling 29,275,823 square feet, and the Class-C sector consisted of 11,826,056 square feet in 1,551 build-ings. Within the Office market there were 101 owner-occupied buildings accounting for 2,600,202 square feet of office space.

Sales ActivityTallying office building sales of 15,000 square feet or larger,

Palm Beach County office sales figures fell during the second quarter 2013 in terms of dollar volume compared to the first quarter of 2013.

In the second quarter, two office transactions closed with a total volume of $19,450,000. The two buildings totaled 171,565 square feet and the average price per square foot equated to $113.37 per square foot. That compares to six transactions total-ing $26,411,178 in the first quarter 2013. The total square foot-age in the first quarter was 200,962 square feet for an average

price per square foot of $131.42.Total office building sales activity in 2013 was down com-

pared to 2012. In the first six months of 2013, the market saw eight office sales transactions with a total volume of $45,861,178. The price per square foot averaged $123.11. In the same first six months of 2012, the market posted 15 transactions with a total volume of $78,194,852. The price per square foot averaged $87.58.

Cap rates have been higher in 2013, averaging 8.62% com-pared to the same period in 2012 when they averaged 6.21%.

One of the largest transactions that has occurred within the last four quarters in the Palm Beach County market is the sale of Bethesda Health City in Boynton Beach. This 133,348-square-foot office building sold for $49,500,000, or $371.21 per square foot. The property sold on 9/13/2013.

Reports compiled by: Jeff Miles & John Kneisly, CoStar Research Managers and the South Florida Research Staff.





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A B C Total Market

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CoStar Submarkets

In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.

MARKETS

Submarket Clusters

Boca Raton

Boynton/Lantana

Delray Beach

Jupiter

North Palm Beach*

Palm Beach*

Palm Springs/Lake Worth

Royal Palm Bch/Wellington

West Palm Beach**

* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.






Historical Deliveries 1982 - 2013

Source: CoStar Property® * Future deliveries based on current under construction buildings.

Construction Activity Markets Ranked by Under Construction Square Footage

# Bldgs Preleased SF Preleased % All Existing U/C

Jupiter 4 14,543 14.3% 15,907 25,449

Boynton/Lantana 1 10,800 30.0% 12,484 36,000

West Palm Beach 1 28,015 100.0% 16,360 28,015

Palm Beach 1 0 0.0% 19,410 22,000

Delray Beach 1 3,281 52.0% 11,182 6,310

North Palm Beach 0 0 0.0% 22,076 0

Boca Raton 0 0 0.0% 37,609 0

Palm Springs/Lake Worth 0 0 0.0% 8,873 0

Royal Palm Bch/Wellington 0 0 0.0% 21,602 0

Totals 8 56,639 29.2% 19,773 24,265


Recent Deliveries Future Deliveries Leased & Un-Leased SF in Deliveries Since 2009 Preleased & Un-Leased SF in Properties Scheduled to Deliver

Source: CoStar Property® Source: CoStar Property®

101,795

194,120

36,000

28,015

22,000

6,310

0

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Under Construction Inventory Average Bldg Size

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INVENTORY & DEVELOPMENT






Historical Construction Starts & DeliveriesSquare Footage Per Quarter Starting and Completing Construction


Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project

Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant

< 50,000 SF 5 51,032 42,582 83.4% $28.13 38,832 12,200

50,000 SF - 99,999 SF 0 0 0 0.0% $0.00 0 0

100,000 SF - 249,999 SF 0 0 0 0.0% $0.00 0 0

250,000 SF - 499,999 SF 0 0 0 0.0% $0.00 0 0

>= 500,000 SF 0 0 0 0.0% $0.00 0 0


Recent Development by Tenancy Existing Inventory ComparisonBased on RBA Developed for Single & Multi Tenant Use Based on Total RBA

2013 Deliveries


Currently Under Construction By Class By Space Type

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100%

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71%29%

Multi Single

22%

24%

54%

Class A Class B Class C

13%

87%

Multi Single







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Class A Market Statistics Third Quarter 2013

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Boca Raton 59 6,891,004 1,218,198 1,236,255 17.9% 51,585 0 0 $30.86 Boynton/Lantana 3 262,204 76,847 76,847 29.3% 13,801 0 0 $22.11 Delray Beach 1 30,845 0 0 0.0% 1,344 0 0 $33.27 Jupiter 6 465,798 0 0 0.0% 0 0 69,690 $42.57 North Palm Beach 20 1,450,813 274,211 274,510 18.9% 20,307 0 0 $28.96 Palm Beach 6 517,014 40,296 40,296 7.8% 6,493 0 0 $46.58 Palm Springs/Lake Worth 1 50,577 26,000 26,000 51.4% 24,577 0 0 $28.07 Royal Palm Bch/Wellington 2 88,000 7,245 7,245 8.2% 0 0 0 $23.00 West Palm Beach 21 3,439,184 631,267 671,092 19.5% (11,348) 0 0 $35.94

Totals 119 13,195,439 2,274,064 2,332,245 17.7% 106,759 0 69,690 $32.17


Class B Market Statistics Third Quarter 2013



Boca Raton 224 8,584,138 1,655,785 1,708,785 19.9% (1,898) 0 0 $24.17 Boynton/Lantana 68 1,550,900 258,051 261,828 16.9% 12,912 0 36,000 $24.11 Delray Beach 111 2,555,960 904,176 904,176 35.4% 44,489 6,000 6,310 $21.48 Jupiter 108 2,131,911 216,988 219,169 10.3% 49,858 0 32,105 $23.25 North Palm Beach 172 5,479,648 730,659 740,601 13.5% 42,333 0 0 $22.70 Palm Beach 89 1,892,388 223,407 231,051 12.2% (33,204) 0 22,000 $33.80 Palm Springs/Lake Worth 32 559,503 25,825 25,825 4.6% 4,442 0 0 $23.65 Royal Palm Bch/Wellington 45 1,128,250 203,128 203,128 18.0% 27,367 30,000 0 $26.45 West Palm Beach 227 5,393,125 857,198 857,198 15.9% 39,777 6,200 28,015 $20.86

Totals 1,076 29,275,823 5,075,217 5,151,761 17.6% 186,076 42,200 124,430 $23.50


Class C Market Statistics Third Quarter 2013



Boca Raton 180 1,937,858 187,746 194,185 10.0% (17,240) 0 0 $20.62 Boynton/Lantana 126 646,231 27,179 27,179 4.2% 2,067 0 0 $19.21 Delray Beach 253 1,494,680 106,108 111,952 7.5% (41,672) 0 0 $23.51 Jupiter 88 615,546 57,564 58,564 9.5% 939 0 0 $17.75 North Palm Beach 201 1,745,235 124,902 133,565 7.7% (16,177) 0 0 $18.89 Palm Beach 62 637,918 64,358 64,358 10.1% 3,081 0 0 $25.22 Palm Springs/Lake Worth 79 383,727 35,336 35,336 9.2% (2,189) 0 0 $19.21 Royal Palm Bch/Wellington 28 403,874 21,157 21,157 5.2% 13,137 0 0 $22.67 West Palm Beach 534 3,960,987 351,685 356,085 9.0% (3,928) 0 0 $19.20

Totals 1,551 11,826,056 976,035 1,002,381 8.5% (61,982) 0 0 $20.26


Total Office Market Statistics Third Quarter 2013



Boca Raton 463 17,413,000 3,061,729 3,139,225 18.0% 32,447 0 0 $26.75 Boynton/Lantana 197 2,459,335 362,077 365,854 14.9% 28,780 0 36,000 $23.29 Delray Beach 365 4,081,485 1,010,284 1,016,128 24.9% 4,161 6,000 6,310 $21.81 Jupiter 202 3,213,255 274,552 277,733 8.6% 50,797 0 101,795 $24.11 North Palm Beach 393 8,675,696 1,129,772 1,148,676 13.2% 46,463 0 0 $23.90 Palm Beach 157 3,047,320 328,061 335,705 11.0% (23,630) 0 22,000 $34.71 Palm Springs/Lake Worth 112 993,807 87,161 87,161 8.8% 26,830 0 0 $23.30 Royal Palm Bch/Wellington 75 1,620,124 231,530 231,530 14.3% 40,504 30,000 0 $25.77 West Palm Beach 782 12,793,296 1,840,150 1,884,375 14.7% 24,501 6,200 28,015 $25.50

Totals 2,746 54,297,318 8,325,316 8,486,387 15.6% 230,853 42,200 194,120 $25.58


Existing Inventory Vacancy

Vacancy



Existing Inventory

FIGURES AT A GLANCE






FIGURES AT A GLANCE




CBD 23 3,507,590 661,598 701,423 20.0% (17,848) 0 0 $37.01

Suburban 96 9,687,849 1,612,466 1,630,822 16.8% 124,607 0 69,690 $30.40

Totals 119 13,195,439 2,274,064 2,332,245 17.7% 106,759 0 69,690 $32.17





CBD 254 5,966,728 958,069 965,713 16.2% 22,219 6,200 28,015 $24.11

Suburban 822 23,309,095 4,117,148 4,186,048 18.0% 163,857 36,000 96,415 $23.35

Totals 1,076 29,275,823 5,075,217 5,151,761 17.6% 186,076 42,200 124,430 $23.50


Class C Market Statistics Third Quarter 2013



CBD 561 4,303,916 362,895 367,295 8.5% (8,618) 0 0 $19.84

Suburban 990 7,522,140 613,140 635,086 8.4% (53,364) 0 0 $20.51

Totals 1,551 11,826,056 976,035 1,002,381 8.5% (61,982) 0 0 $20.26


Class A & B Market Statistics Third Quarter 2013



CBD 277 9,474,318 1,619,667 1,667,136 17.6% 4,371 6,200 28,015 $29.07

Suburban 918 32,996,944 5,729,614 5,816,870 17.6% 288,464 36,000 166,105 $25.47

Totals 1,195 42,471,262 7,349,281 7,484,006 17.6% 292,835 42,200 194,120 $26.27





CBD 838 13,778,234 1,982,562 2,034,431 14.8% (4,247) 6,200 28,015 $27.48

Suburban 1,908 40,519,084 6,342,754 6,451,956 15.9% 235,100 36,000 166,105 $24.99

Totals 2,746 54,297,318 8,325,316 8,486,387 15.6% 230,853 42,200 194,120 $25.58












FIGURES AT A GLANCE


Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2013 3q 119 13,195,439 2,274,064 2,332,245 17.7% 107,771 0 0 2 69,690 $32.17 2013 2q 120 13,239,820 2,359,621 2,440,016 18.4% (246) 0 0 2 69,690 $32.19 2013 1q 120 13,239,820 2,397,871 2,439,770 18.4% (766) 0 0 2 69,690 $31.35 2012 4q 120 13,239,820 2,404,963 2,439,004 18.4% 139,220 0 0 0 0 $32.04 2012 3q 120 13,239,820 2,537,179 2,578,224 19.5% 50,883 1 50,577 0 0 $32.36 2012 2q 119 13,189,243 2,534,258 2,578,530 19.6% 19,488 0 0 1 50,577 $32.35 2012 1q 119 13,189,243 2,542,630 2,598,018 19.7% 58,727 0 0 1 50,577 $32.29

2011 119 13,189,243 2,581,681 2,656,745 20.1% 170,514 3 136,840 1 50,577 $32.48 2010 116 13,052,403 2,571,197 2,690,419 20.6% 107,227 1 30,845 3 136,840 $31.93 2009 115 13,021,558 2,553,903 2,766,801 21.2% 458,511 6 690,556 2 62,845 $33.37 2008 109 12,331,002 2,278,231 2,534,756 20.6% 930,954 11 1,802,081 6 690,556 $34.12 2007 98 10,528,921 1,522,674 1,663,629 15.8% 40,664 10 577,428 13 2,276,984 $34.67 2006 88 9,951,493 1,141,802 1,171,246 11.8% 322,958 4 423,846 15 2,011,965 $32.94 2005 84 9,527,647 984,772 1,070,358 11.2% 255,147 0 0 7 673,108 $28.69 2004 84 9,527,647 1,228,896 1,325,505 13.9% 252,583 0 0 2 365,721 $26.39 2003 84 9,527,647 1,469,624 1,578,088 16.6% 224,033 4 239,165 0 0 $25.90



Net Quoted


2013 3q 1,076 29,275,823 5,075,217 5,151,761 17.6% 93,368 0 0 6 124,430 $23.50 2013 2q 1,075 29,393,952 5,152,071 5,236,297 17.8% 97,991 0 0 8 133,262 $23.38 2013 1q 1,075 29,393,952 5,253,899 5,334,288 18.1% (5,283) 3 42,200 8 133,262 $22.15 2012 4q 1,072 29,351,752 5,203,708 5,286,805 18.0% 215,322 1 27,490 5 70,782 $23.14 2012 3q 1,072 29,371,470 5,496,115 5,521,845 18.8% 51,614 2 49,324 5 76,272 $23.09 2012 2q 1,070 29,322,146 5,463,431 5,524,135 18.8% 70,486 0 0 6 119,014 $23.29 2012 1q 1,070 29,322,146 5,526,290 5,594,621 19.1% 53,900 0 0 4 106,814 $23.26

2011 1,071 29,357,551 5,605,195 5,683,926 19.4% 283,579 2 38,319 2 49,324 $23.59 2010 1,069 29,319,232 5,851,140 5,929,186 20.2% 185,189 7 138,874 1 30,000 $24.06 2009 1,062 29,180,358 5,791,510 5,975,501 20.5% (725,284) 12 280,228 5 66,874 $24.18 2008 1,050 28,900,130 4,796,133 4,969,989 17.2% (150,695) 35 761,349 13 320,228 $25.92 2007 1,014 28,132,842 3,886,662 4,052,006 14.4% (876,191) 37 846,847 30 639,783 $26.00 2006 977 27,285,995 2,267,171 2,326,828 8.5% 718,905 53 985,784 39 952,841 $23.99 2005 924 26,300,211 1,933,758 2,048,587 7.8% 828,805 42 665,907 51 1,011,045 $21.99 2004 882 25,634,304 2,170,157 2,211,485 8.6% 1,723,308 53 953,829 51 821,370 $21.41 2003 829 24,806,141 2,958,710 3,106,630 12.5% 711,684 42 869,954 47 802,470 $21.22



Net Quoted


2013 3q 2,746 54,297,318 8,325,316 8,486,387 15.6% 153,942 0 0 8 194,120 $25.58 2013 2q 2,747 54,496,500 8,447,792 8,631,497 15.8% 87,083 0 0 10 202,952 $25.55 2013 1q 2,747 54,496,500 8,577,888 8,718,580 16.0% (10,172) 3 42,200 10 202,952 $24.49 2012 4q 2,744 54,454,300 8,540,548 8,666,208 15.9% 414,225 1 27,490 5 70,782 $25.50 2012 3q 2,744 54,474,018 9,024,854 9,100,151 16.7% 84,870 3 99,901 5 76,272 $25.55 2012 2q 2,741 54,374,117 8,962,056 9,085,120 16.7% 107,634 0 0 7 169,591 $25.67 2012 1q 2,741 54,374,117 9,050,947 9,192,754 16.9% 149,291 0 0 5 157,391 $25.54

2011 2,742 54,409,522 9,205,567 9,377,450 17.2% 477,199 5 175,159 3 99,901 $25.80 2010 2,737 54,234,363 9,461,394 9,679,490 17.8% 303,401 8 169,719 4 166,840 $26.08 2009 2,729 54,064,644 9,397,526 9,813,172 18.2% (397,486) 19 999,584 7 129,719 $26.52 2008 2,710 53,065,060 7,964,114 8,416,102 15.9% 671,502 49 2,575,258 20 1,039,584 $28.18 2007 2,660 50,483,863 6,183,272 6,506,407 12.9% (999,069) 49 1,429,214 46 2,928,595 $28.47 2006 2,612 49,056,749 4,030,160 4,122,465 8.4% 890,321 61 1,443,603 55 2,966,095 $27.10 2005 2,553 47,772,746 3,513,193 3,717,421 7.8% 849,649 50 731,085 62 1,718,126 $24.19 2004 2,504 47,049,966 3,701,927 3,844,290 8.2% 2,149,852 62 1,010,702 60 1,246,317 $23.11 2003 2,442 46,164,930 4,838,572 5,109,106 11.1% 1,061,443 58 1,167,582 56 859,343 $22.86


Existing Inventory Vacancy Deliveries UC Inventory








Historical Rental RatesBased on Full-Service Equivalent Rental Rates


Vacancy by Available Space Type Vacancy by ClassPercent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Class


U.S. Rental Rate Comparison Future Space AvailableBased on Full-Service Equivalent Rental Rates Space Scheduled to be Available for Occupancy*

Source: CoStar Property® * Includes Under Construction Spaces Source: CoStar Property®

Palm Beach County United States Palm Beach County United States

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LEASING ACTIVITY






LEASING ACTIVITY


* Renewal

Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company

1 4700 T Rex Ave Boca Raton North 72,047 2nd Tyco Integrated Security CBRE CBRE

2 Phillips Point West Palm Beach 40,000 3rd Akerman Senterfitt LLC Cresa Taylor & Mathis of Florida, LLC

3 1615 S Congress Delray Beach 39,788 1st Aldridge Connors LLP CBRE CBRE

4 The Pointe Jupiter 23,642 1st Ventex N/A CBRE

5 4100 Okeechobee Blvd West Palm Beach 20,251 2nd N/A N/A In-Rel Properties

6 Lynn Financial Center - Building A, Phase II* Boca Raton West 19,544 2nd MDVIP, Inc. N/A Avison Young

7 Broken Sound Corporate Center Boca Raton North 17,686 2nd TherapeuticsMD, Inc. Stoltz Realty Co. of Florida, Inc. CBRE

8 Phillips Point (West Tower) West Palm Beach 16,602 3rd N/A N/A Taylor & Mathis of Florida, LLC

9 Fountain Square* Boca Raton West 14,844 2nd Stifel, Nicolaus & Co., Inc. Cushman & Wakefield, Inc. NAI/Merin Hunter Codman, Inc.

10 Lynn Financial Center - Building B, Phase II Boca Raton West 12,944 1st Polen Capital Management Inc CBRE Avison Young

11 One Town Center Boca Raton West 12,647 2nd Kayne Real Estate Advisors CBRE CBRE

12 Innovation Centre 6 Boca Raton East 12,644 1st EPS-Global Direct Deal Avison Young

13 Wellington Medical Arts Pavilion Royal Palm Bch/Wellington 12,244 3rd N/A N/A Management Services Group of Health

14 2101 Centrepark West Dr West Palm Beach 10,944 2nd N/A N/A NAI/Merin Hunter Codman Inc.

15 3420 Fairlane Farms Rd Palm Bch Cty Outlying 10,847 1st Wells Pharmacy, Inc Direct Deal Adams Commercial Real Estate

16 Bosco Corporate Center Delray Beach 10,653 3rd N/A N/A Rubin Group Real Estate

17 Mizner Park Office Tower* Boca Raton East 10,644 1st Crocker Center Associates III, Ltd N/A Cushman & Wakefield, Inc.

18 Northbridge Pavilion West Palm Beach 10,447 2nd N/A N/A Gaedeke Group LLC

19 Yamato Office Center: Bldg II Boca Raton North 10,342 2nd Accountable Healthcare Staffing Inc Direct Deal CBRE

20 Northbridge Tower West Palm Beach 10,244 1st Kubicki Draper CBRE Gaedeke Group LLC

21 Centrepark 1475 West Palm Beach 9,644 2nd N/A N/A NAI/Merin Hunter Codman Inc.

22 Innovation Centre 3 Boca Raton East 9,644 1st FARDA N/A Avison Young

23 Yamato Office Center: Bldg II* Boca Raton North 9,642 2nd Xacti LLC Direct Deal CBRE

24 1400 Centrepark West Palm Beach 9,544 2nd N/A N/A NAI/Merin Hunter Codman Inc.

25 1675 Palm Beach Lakes Blvd West Palm Beach 9,437 2nd N/A N/A Pointe Group Advisors

26 One Boca Place Boca Raton West 9,347 2nd Reservage Organic Whelchel Partners CBRE

27 Lynn Financial Center - Building A, Phase II Boca Raton West 9,325 2nd MDVIP, Inc N/A Avison Young

28 Mizner Park Office Tower Boca Raton East 9,299 3rd GrayRobinson Direct Deal Cushman & Wakefield, Inc.

29 7000 Palmetto Plaza Boca Raton West 9,247 3rd Premedical, LLC N/A CBRE

30 Hagen Ranch Medical Center Boynton/Lantana 9,044 2nd N/A Direct Deal Butters Realty & Management

31 Flagler Center I West Palm Beach 9,008 3rd AMI N/A Cushman & Wakefield, Inc.

32 The Arbors Office Park - 1625 Delray Beach 8,947 1st N/A N/A CBRE

33 RailAmerica Bldg* Boca Raton North 8,837 2nd ILS Technology LLC N/A Atlantic Commercial Group

34 Fairway Office Center - Phase I North Palm Beach 8,544 3rd N/A N/A NAI/Merin Hunter Codman Inc.

35 Fairway Office Center - Phase I North Palm Beach 8,544 2nd N/A N/A NAI/Merin Hunter Codman Inc.

36 Sabre II Centre Boca Raton North 8,542 2nd 2Knome LLC Direct Deal CBRE

37 1800 Boca Center Boca Raton West 8,447 3rd N/A N/A CBRE

38 Sabre Centre I Boca Raton North 8,251 1st N/A N/A Cushman & Wakefield, Inc.

39 One City Centre Boca Raton East 8,152 1st Dawson James Securities, Inc. DTZ Penn-Florida Realty Corporation

40 Yamato Office Center - Building 1* Boca Raton North 7,842 2nd BCN Telecom Colliers International, South Flori CBRE

Select Top Office Leases Based on Leased Square Footage For Deals Signed in 2013






SALES ACTIVITY

The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter

Source: CoStar COMPS®

Sales Volume & Price Sales Analysis by Building SizeBased on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales From July 2012 - June 2013

Bldg Size # RBA $ Volume Price/SF Cap Rate

< 50,000 SF 78 874,815 145,218,795$ 166.00$ 7.39%

50K-249K SF 11 802,056 97,810,500$ 121.95$ 7.69%

250K-499K SF - - - -$ -

>500K SF - - - -$ -

Source: CoStar COMPS® Source: CoStar COMPS®

U.S. Price/SF Comparison U.S. Cap Rate ComparisonBased on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales of 15,000 SF and Larger

Source: CoStar COMPS® Source: CoStar COMPS®

$20

$70

$120

$170

$220

$270

20101q

20102q

20103q

20104q

20111q

20112q

20113q

20114q

20121q

20122q

20123q

20124q

20131q

20132q

Dollar

s per

SF

Palm Beach County US

$0

$50

$100

$150

$200

$250

2010 1q 2010 3q 2011 1q 2011 3q 2012 1q 2012 3q 2013 1q

Millio

ns

of

Sal

es V

olu

me

Do

llar

s

$0

$50

$100

$150

$200

$250

Price

/SF

Sales Volume Price/SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2010 3q 2010 4q 2011 1q 2011 2q 2011 3q 2011 4q 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q

Cap

Rat

e P

erc

enta

ge

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Dollars/S

F

Cap Rate Price/SF

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

20101q

20102q

20103q

20104q

20111q

20112q

20113q

20114q

20121q

20122q

20123q

20124q

20131q

20132q

Cap

Rat

e P

erc

enta

ge

Palm Beach County US






Palm Beach County Office MarketMARKET HIGHLIGHTS – CLASS “A, B & C”

SALES ACTIVITY

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B O C A R A T O N M A R K E T

Deliveries, Absorption & Vacancy Historical Analysis, All Classes


Vacant Space Quoted Rental RatesHistorical Analysis, All Classes Historical Analysis, All Classes


Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 463 17,413,000 3,139,225 18.0% 35,214 0 0 0 0 $26.75

2013 2q 464 17,539,961 3,174,439 18.1% 11,544 0 0 0 0 $26.81

2013 1q 464 17,539,961 3,185,983 18.2% (14,311) 0 0 0 0 $25.79

2012 4q 464 17,539,961 3,171,672 18.1% 149,240 0 0 0 0 $26.39

2012 3q 465 17,587,169 3,368,120 19.2% (7,325) 0 0 0 0 $26.41

2012 2q 465 17,587,169 3,360,795 19.1% 33,265 0 0 0 0 $26.38

2012 1q 465 17,587,169 3,394,060 19.3% 116,561 0 0 0 0 $26.31

2011 4q 466 17,622,574 3,546,026 20.1% (145,626) 1 8,319 0 0 $26.97

2011 3q 465 17,614,255 3,392,081 19.3% 93,096 0 0 1 8,319 $26.63

2011 2q 465 17,614,255 3,485,177 19.8% 179,706 1 32,000 1 8,319 $26.65

2011 1q 464 17,582,255 3,632,883 20.7% (24,601) 0 0 2 40,319 $26.67

2010 4q 464 17,582,255 3,608,282 20.5% 133,500 0 0 1 32,000 $26.48

2010 3q 464 17,582,255 3,741,782 21.3% 26,526 0 0 1 32,000 $26.98

2010 2q 464 17,582,255 3,768,308 21.4% (81,275) 0 0 1 32,000 $27.26

2010 1q 464 17,582,255 3,687,033 21.0% 18,390 0 0 1 32,000 $27.49

2009 4q 464 17,582,255 3,705,423 21.1% 62,135 0 0 1 32,000 $27.03


UC InventoryDelivered InventoryExisting Inventory Vacancy

(0.200)

(0.150)

(0.100)

(0.050)

0.000

0.050

0.100

0.150

0.200


Millio

ns

SF

16.0%

17.0%

18.0%

19.0%

20.0%

21.0%

22.0%

Perce

nt V

acant

Delivered SF Absorption SF Vacancy

$25.20

$25.40

$25.60

$25.80

$26.00

$26.20

$26.40

$26.60

$26.80

$27.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

2.80

2.90

3.00

3.10

3.20

3.30

3.40

3.50

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







B O Y N T O N / L A N T A N A M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 197 2,459,335 365,854 14.9% 6,220 0 0 1 36,000 $23.29

2013 2q 195 2,450,503 363,242 14.8% 12,834 0 0 3 44,832 $23.77

2013 1q 195 2,450,503 376,076 15.3% 9,726 0 0 3 44,832 $24.03

2012 4q 195 2,450,503 385,802 15.7% 38,184 1 27,490 1 6,582 $23.25

2012 3q 194 2,423,013 396,496 16.4% 38,631 0 0 2 34,072 $23.54

2012 2q 194 2,423,013 435,127 18.0% (8,157) 0 0 1 27,490 $23.74

2012 1q 194 2,423,013 426,970 17.6% (88,342) 0 0 1 27,490 $25.82

2011 4q 194 2,423,013 338,628 14.0% (26,566) 0 0 0 0 $24.35

2011 3q 194 2,423,013 312,062 12.9% (5,214) 0 0 0 0 $23.69

2011 2q 194 2,423,013 306,848 12.7% 13,159 0 0 0 0 $23.72

2011 1q 194 2,423,013 320,007 13.2% 23,337 0 0 0 0 $23.84

2010 4q 194 2,423,013 343,344 14.2% (595) 0 0 0 0 $23.74

2010 3q 194 2,423,013 342,749 14.1% (35,719) 0 0 0 0 $24.20

2010 2q 194 2,423,013 307,030 12.7% 22,222 1 10,769 0 0 $24.84

2010 1q 193 2,412,244 318,483 13.2% (61,157) 0 0 1 10,769 $24.77

2009 4q 193 2,412,244 257,326 10.7% 24,779 0 0 1 10,769 $22.16



(0.100)

(0.080)

(0.060)

(0.040)

(0.020)

0.000

0.020

0.040

0.060


Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Perce

nt V

acant


$21.50

$22.00

$22.50

$23.00

$23.50

$24.00

$24.50

$25.00

$25.50

$26.00

$26.50

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







D E L R A Y B E A C H M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 365 4,081,485 1,016,128 24.9% 30,934 0 0 1 6,310 $21.81

2013 2q 365 4,081,485 1,047,062 25.7% 1,222 0 0 1 6,310 $21.88

2013 1q 365 4,081,485 1,048,284 25.7% (27,995) 1 6,000 1 6,310 $20.05

2012 4q 364 4,075,485 1,014,289 24.9% 32,120 0 0 1 6,000 $21.59

2012 3q 364 4,075,485 1,046,409 25.7% 12,464 0 0 1 6,000 $21.39

2012 2q 364 4,075,485 1,058,873 26.0% 1,262 0 0 1 6,000 $21.43

2012 1q 364 4,075,485 1,060,135 26.0% 2,196 0 0 0 0 $21.39

2011 4q 364 4,075,485 1,062,331 26.1% (16,717) 0 0 0 0 $21.71

2011 3q 364 4,075,485 1,045,614 25.7% 40,389 0 0 0 0 $21.38

2011 2q 364 4,075,485 1,086,003 26.6% 35,027 0 0 0 0 $21.55

2011 1q 364 4,075,485 1,121,030 27.5% (14,587) 0 0 0 0 $21.43

2010 4q 364 4,075,485 1,106,443 27.1% (20,124) 0 0 0 0 $21.48

2010 3q 364 4,075,485 1,086,319 26.7% (13,174) 1 4,805 0 0 $22.88

2010 2q 363 4,070,680 1,068,340 26.2% 75,537 0 0 1 4,805 $23.25

2010 1q 363 4,070,680 1,143,877 28.1% 82,093 1 30,845 1 4,805 $23.28

2009 4q 362 4,039,835 1,195,125 29.6% (25,186) 0 0 2 35,650 $23.29



(0.040)

(0.020)

0.000

0.020

0.040

0.060

0.080

0.100


Millio

ns

SF

23.0%

24.0%

25.0%

26.0%

27.0%

28.0%

29.0%

Perce

nt V

acant


$19.00

$19.50

$20.00

$20.50

$21.00

$21.50

$22.00

$22.50

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.98

0.99

1.00

1.01

1.02

1.03

1.04

1.05

1.06

1.07

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







J U P I T E R M A R K E TMARKET HIGHLIGHTS – CLASS “A, B & C”





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 202 3,213,255 277,733 8.6% 3,148 0 0 4 101,795 $24.11

2013 2q 202 3,213,255 280,881 8.7% 23,951 0 0 4 101,795 $24.39

2013 1q 202 3,213,255 304,832 9.5% 23,698 0 0 4 101,795 $24.01

2012 4q 202 3,213,255 328,530 10.2% 26,271 0 0 0 0 $21.94

2012 3q 202 3,213,255 354,801 11.0% 20,224 0 0 0 0 $22.67

2012 2q 202 3,213,255 375,025 11.7% 19,700 0 0 0 0 $22.73

2012 1q 202 3,213,255 394,725 12.3% 63,117 0 0 0 0 $23.12

2011 4q 202 3,213,255 457,842 14.2% 10,289 0 0 0 0 $23.37

2011 3q 202 3,213,255 468,131 14.6% 6,883 0 0 0 0 $24.29

2011 2q 202 3,213,255 475,014 14.8% 7,572 2 61,365 0 0 $25.01

2011 1q 200 3,151,890 421,221 13.4% 3,452 0 0 2 61,365 $25.92

2010 4q 200 3,151,890 424,673 13.5% 115,534 1 63,000 2 61,365 $25.39

2010 3q 199 3,088,890 477,207 15.4% (14,428) 0 0 3 124,365 $24.87

2010 2q 199 3,088,890 462,779 15.0% (41,309) 0 0 3 124,365 $24.94

2010 1q 199 3,088,890 421,470 13.6% (14,504) 1 7,300 1 63,000 $24.44

2009 4q 198 3,081,590 399,666 13.0% (21,491) 0 0 1 7,300 $24.78



(0.060)

(0.040)

(0.020)

0.000

0.020

0.040

0.060

0.080

0.100

0.120

0.140


Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Perce

nt V

acant


$20.50

$21.00

$21.50

$22.00

$22.50

$23.00

$23.50

$24.00

$24.50

$25.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







N O R T H P A L M B E A C H M A R K E TMARKET HIGHLIGHTS – CLASS “A, B & C”





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 393 8,675,696 1,148,676 13.2% 31,094 0 0 0 0 $23.90

2013 2q 394 8,720,077 1,179,770 13.5% 42,524 0 0 0 0 $23.58

2013 1q 394 8,720,077 1,222,294 14.0% (27,155) 0 0 0 0 $22.09

2012 4q 394 8,720,077 1,195,139 13.7% 67,440 0 0 0 0 $24.17

2012 3q 394 8,720,077 1,262,579 14.5% 12,682 2 49,324 0 0 $23.92

2012 2q 392 8,670,753 1,225,937 14.1% 28,439 0 0 2 49,324 $24.44

2012 1q 392 8,670,753 1,254,376 14.5% 18,405 0 0 2 49,324 $24.07

2011 4q 392 8,670,753 1,272,781 14.7% 31,852 0 0 2 49,324 $23.92

2011 3q 392 8,670,753 1,304,633 15.0% (41,362) 0 0 1 38,000 $24.42

2011 2q 392 8,670,753 1,263,271 14.6% (4,078) 0 0 0 0 $24.58

2011 1q 392 8,670,753 1,259,193 14.5% 24,678 1 73,475 0 0 $24.81

2010 4q 391 8,597,278 1,210,396 14.1% 12,709 0 0 1 73,475 $25.74

2010 3q 391 8,597,278 1,223,105 14.2% 3,644 0 0 1 73,475 $25.29

2010 2q 391 8,597,278 1,226,749 14.3% 13,588 0 0 1 73,475 $25.08

2010 1q 391 8,597,278 1,240,337 14.4% 46,695 0 0 0 0 $25.38

2009 4q 391 8,597,278 1,287,032 15.0% 32,075 0 0 0 0 $25.21



(0.060)

(0.040)

(0.020)

0.000

0.020

0.040

0.060

0.080


Millio

ns

SF

12.0%

12.5%

13.0%

13.5%

14.0%

14.5%

15.0%

15.5%

Perce

nt V

acant


$20.50

$21.00

$21.50

$22.00

$22.50

$23.00

$23.50

$24.00

$24.50

$25.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

1.05

1.10

1.15

1.20

1.25

1.30

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







P A L M B E A C H M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 157 3,047,320 335,705 11.0% (3,580) 0 0 1 22,000 $34.71

2013 2q 157 3,047,320 332,125 10.9% 663 0 0 1 22,000 $34.88

2013 1q 157 3,047,320 332,788 10.9% (20,713) 0 0 1 22,000 $35.60

2012 4q 157 3,047,320 312,075 10.2% 36,005 0 0 1 22,000 $35.14

2012 3q 157 3,047,320 348,080 11.4% (25,783) 0 0 0 0 $35.60

2012 2q 157 3,047,320 322,297 10.6% (1,904) 0 0 0 0 $36.56

2012 1q 157 3,047,320 320,393 10.5% 34,500 0 0 0 0 $37.76

2011 4q 157 3,047,320 354,893 11.6% (2,361) 0 0 0 0 $39.19

2011 3q 157 3,047,320 352,532 11.6% (14,434) 0 0 0 0 $35.65

2011 2q 157 3,047,320 338,098 11.1% (25) 0 0 0 0 $35.81

2011 1q 157 3,047,320 338,073 11.1% (32,720) 0 0 0 0 $33.77

2010 4q 157 3,047,320 305,353 10.0% 40,176 0 0 0 0 $33.28

2010 3q 157 3,047,320 345,529 11.3% (636) 0 0 0 0 $33.67

2010 2q 157 3,047,320 344,893 11.3% 4,498 1 4,000 0 0 $32.24

2010 1q 156 3,043,320 345,391 11.3% 1,714 0 0 1 4,000 $33.86

2009 4q 156 3,043,320 347,105 11.4% 715 0 0 1 4,000 $35.19



(0.040)

(0.030)

(0.020)

(0.010)

0.000

0.010

0.020

0.030

0.040

0.050


Millio

ns

SF

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

Perce

nt V

acant


$33.00

$33.50

$34.00

$34.50

$35.00

$35.50

$36.00

$36.50

$37.00

$37.50

$38.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.28

0.29

0.30

0.31

0.32

0.33

0.34

0.35

0.36

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







P A L M S P R I N G S / L A K E W O R T H M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 112 993,807 87,161 8.8% 1,603 0 0 0 0 $23.30

2013 2q 112 993,807 88,764 8.9% 1,190 0 0 0 0 $23.35

2013 1q 112 993,807 89,954 9.1% 24,037 0 0 0 0 $20.97

2012 4q 112 993,807 113,991 11.5% (8,583) 0 0 0 0 $24.03

2012 3q 112 993,807 105,408 10.6% (5,892) 1 50,577 0 0 $23.87

2012 2q 111 943,230 48,939 5.2% (8,539) 0 0 1 50,577 $23.99

2012 1q 111 943,230 40,400 4.3% 5,496 0 0 1 50,577 $25.07

2011 4q 111 943,230 45,896 4.9% 7,522 0 0 1 50,577 $24.59

2011 3q 111 943,230 53,418 5.7% 1,787 0 0 1 50,577 $24.18

2011 2q 111 943,230 55,205 5.9% 3,557 0 0 0 0 $21.51

2011 1q 111 943,230 58,762 6.2% 3,345 0 0 0 0 $20.33

2010 4q 111 943,230 62,107 6.6% (939) 0 0 0 0 $20.24

2010 3q 111 943,230 61,168 6.5% (5,276) 0 0 0 0 $20.75

2010 2q 111 943,230 55,892 5.9% 13,180 0 0 0 0 $22.10

2010 1q 111 943,230 69,072 7.3% (6,415) 0 0 0 0 $22.25

2009 4q 111 943,230 62,657 6.6% 11,489 0 0 0 0 $22.34



(0.020)

(0.010)

0.000

0.010

0.020

0.030

0.040

0.050

0.060


Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Perce

nt V

acant


$18.00

$19.00

$20.00

$21.00

$22.00

$23.00

$24.00

$25.00

$26.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.00

0.02

0.04

0.06

0.08

0.10

0.12

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







R O Y A L P A L M B C H / W E L L I N G T O N M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 75 1,620,124 231,530 14.3% (3,597) 0 0 0 0 $25.77

2013 2q 75 1,620,124 227,933 14.1% 13,352 0 0 0 0 $25.09

2013 1q 75 1,620,124 241,285 14.9% 30,749 1 30,000 0 0 $23.96

2012 4q 74 1,590,124 242,034 15.2% (1,493) 0 0 1 30,000 $25.32

2012 3q 74 1,590,124 240,541 15.1% 16,836 0 0 1 30,000 $25.46

2012 2q 74 1,590,124 257,377 16.2% 6,024 0 0 1 30,000 $25.36

2012 1q 74 1,590,124 263,401 16.6% (1,379) 0 0 1 30,000 $25.04

2011 4q 74 1,590,124 262,022 16.5% 11,372 0 0 0 0 $25.36

2011 3q 74 1,590,124 273,394 17.2% 23,083 0 0 0 0 $26.67

2011 2q 74 1,590,124 296,477 18.6% (3,393) 0 0 0 0 $26.31

2011 1q 74 1,590,124 293,084 18.4% 13,090 0 0 0 0 $26.79

2010 4q 74 1,590,124 306,174 19.3% 5,521 0 0 0 0 $27.14

2010 3q 74 1,590,124 311,695 19.6% 40,954 0 0 0 0 $25.91

2010 2q 74 1,590,124 352,649 22.2% (24,267) 0 0 0 0 $26.86

2010 1q 74 1,590,124 328,382 20.7% 19,394 1 40,000 0 0 $27.71

2009 4q 73 1,550,124 307,776 19.9% 4,032 0 0 1 40,000 $27.55



(0.030)

(0.020)

(0.010)

0.000

0.010

0.020

0.030

0.040

0.050


Millio

ns

SF

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Perce

nt V

acant


$23.00

$23.50

$24.00

$24.50

$25.00

$25.50

$26.00

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

0.21

0.22

0.23

0.24

0.25

0.26

0.27

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF







W E S T P A L M B E A C H M A R K E T





Net QuotedPeriod # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates2013 3q 782 12,793,296 1,884,375 14.7% 52,906 0 0 1 28,015 $25.50

2013 2q 783 12,829,968 1,937,281 15.1% (20,197) 0 0 1 28,015 $25.36

2013 1q 783 12,829,968 1,917,084 14.9% (8,208) 1 6,200 1 28,015 $24.38

2012 4q 782 12,823,768 1,902,676 14.8% 75,041 0 0 1 6,200 $25.74

2012 3q 782 12,823,768 1,977,717 15.4% 23,033 0 0 1 6,200 $26.07

2012 2q 782 12,823,768 2,000,750 15.6% 37,544 0 0 1 6,200 $26.23

2012 1q 782 12,823,768 2,038,294 15.9% (1,263) 0 0 0 0 $25.45

2011 4q 782 12,823,768 2,037,031 15.9% 57,111 0 0 0 0 $25.32

2011 3q 782 12,823,768 2,094,142 16.3% 170,970 0 0 0 0 $25.41

2011 2q 782 12,823,768 2,265,112 17.7% 39,346 0 0 0 0 $25.77

2011 1q 782 12,823,768 2,304,458 18.0% 8,260 0 0 0 0 $26.08

2010 4q 782 12,823,768 2,312,718 18.0% 24,539 1 9,000 0 0 $26.71

2010 3q 781 12,814,768 2,328,257 18.2% (106,387) 0 0 1 9,000 $26.62

2010 2q 781 12,814,768 2,221,870 17.3% (24,740) 0 0 1 9,000 $27.23

2010 1q 781 12,814,768 2,197,130 17.1% 53,932 0 0 0 0 $27.22

2009 4q 781 12,814,768 2,251,062 17.6% (77,592) 0 0 0 0 $27.63



(0.150)

(0.100)

(0.050)

0.000

0.050

0.100

0.150

0.200


Millio

ns

SF

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Perce

nt V

acant


$23.00

$23.50

$24.00

$24.50

$25.00

$25.50

$26.00

$26.50

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Dollar

s/SF/Y

ear

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

2.10

2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q

Millio

ns

SF

Direct SF Sublet SF

Documents

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