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VIEWPOINT2017 COMMERCIAL REAL ESTATE TRENDS REPORTFebruary 2, 2017

Download Viewpoint & Access IRR Research @ www.irr.com/research

IRR Research Downloads

Viewpoint 2017Local Research

(Retail, Office, Multifamily, Hospitality, Industrial)

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PROGRAM

IntroductionOffice

IndustrialRetail

HospitalityMultifamily

Pittsburgh Employment & Real Estate

Speakers

Paul D. GriffithSenior Managing Director

Douglas A. HeroldManaging Director

Mickey DroneyDirector

Integra Realty Resources, Inc. irr.com 55

COMMERCIAL REAL ESTATE MARKETS

Integra Realty Resources, Inc. irr.com 66

OFFICE

Page 18

OFFICE

Pittsburgh Office Market Timeline

EXPANSION

HYPERSUPPLYRECOVERY

RECESSION

2012

2013, 2014, 2015, 2016, 2017

Class A Office – CBD Local Markets by Vacancy

Charleston, SC – 5.8%Pittsburgh, PA – 5.9%Austin, TX – 6.0%

Pittsburgh, PA 5.9%

Dallas, TX – 23.2%Phoenix, AZ – 25.4%Dayton, OH – 32.3%

TOP TH

REE

BOTTOM THRE

E

Local MarketCBD

5.9% (2nd out of 59)

Class A Office – SuburbanMetro Pittsburgh Submarkets by Vacancy

Sarasota, FL – 4.8%Portland, OR – 6.3%Salt Lake City, UT – 6.5%

Pittsburgh, PA 9.8%

Dayton, OH – 23.9%Las Vegas, NV – 24.5%Phoenix – 24.9%

TOP TH

REE

BOTTOM THRE

E

Local MarketSuburban

9.8% (14th out of 62)

Office Metro Pittsburgh Submarkets By Vacancy

TOP THREEOakland – 1.8%

Butler County – 4.6%Northeast Pittsburgh – 5.0%

BOTTOM THREESouthpointe ‐ 11.6%

West Pittsburgh – 15.3%Monroeville – 17.7%

SOURCE: CoStar

Class A Urban Office Cap Rate Trends

NationalPittsburgh

20166.83%7.25%

20176.73%7.25%

National Average Pittsburgh Average

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Class A Suburban Office Cap Rate Trends

NationalPittsburgh

20167.18%7.25%

20177.07%7.25%

National Average Pittsburgh Average

SOURCE: Integra Realty Resources – Pittsburgh, 2017

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Class A Office Cap Rates

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Class B Office Cap Rates

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Pittsburgh Class A/B OfficeCap Rate Comparison

SIGNIFICANT TRANSACTIONS

Liberty Center

CBD OfficeDecember 2016

$183 / SF NRA85.3%

6.7% on in-place income

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

Oxford Centre

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

CBD OfficeJanuary 2016

$179.051 / SF NRA82%

6.35% in-place income

1 – Sale price assumes $32,000,000 in renovations ($31.65 / SF)

Centre City Tower

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

CBD OfficeJune 2016

$75.80 / SF NRA80%

8.5%

WalgreensSpecialty Pharmacy Division Building

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

Suburban OfficeMarch 2016

$166.08 / SF NRA100% (Single tenant)

6.55%

Former Glaxo Smith Kline Building

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

Suburban OfficeSeptember 2016

$100.29 / SF NRA32%N/A

Former ANSYS Building

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

Suburban OfficeOctober 2016

$76.39 / SF NRA0%

N/A

Terminal Buildings

Property Type:Date of Sale:Unit Price:Occupancy:Cap Rate:

Urban “Shell” BuildingMay 2016

$13.63 / SF NRAN/AN/A