aquila austin market report q4 2015

2

4Q AUSTINMARKET REPORT

2015

AQUILAKNOWSAUSTIN

KEEPING YOU INFORMED

AQUILA Commercial is dedicated to

providing quality service to our clients. We

understand that real time market data helps

our clients make smart, informed real estate

decisions. This report is produced and

distributed quarterly. To receive our

updates, opt in at aquilacommercial.com.

DISCLAIMER This report utilizes various

real estate and economic data sources. The

information contained herein is confidential

and proprietary in nature. No warranties or

guarantees are made as to the accuracy of

the information contained herein.

4

Welcome to 2016, Austin! 2015 was a year of strong commercial real estate growth in the state’s capital. A number of records across individual sub-markets and micromarkets were broken over the course of the year with regard to vacancy rates and asking full service rental rates. In 2015, Austin as a whole absorbed 2,806,508 sf of space in both direct and subleasable space. This year also had 2,671,968 sf of office space delivered as new prod-uct. At the end of 2014, the citywide vacancy rate was 10.56% and now it is at 9.64%. Those two sets of numbers illustrate the continuous strength of the office market in Austin. More space was absorbed than delivered and the vacancy rate went down even with an extraordinary amount of new product coming online. Asking full service rental rates also increased by $1.03/sf from $34.78/sf in 4Q 2014 to $35.81/sf.

There is more to come, too. Oracle announced that it will be breaking ground on a three building 560,000 sf campus just outside of downtown while increasing their already large Austin workforce by more than 50% over the next couple of years. Multiple buildings are currently under construction downtown that will deliver within the next two years that have already been 40% pre-leased.

VIEW FROM THEEAGLE'S NEST

Ryan Parzick Market Research Director

AQUILA [email protected]

5

Forbes recently tabbed Austin as the No. 1 Boom-town in the U.S., which ranks the cities most likely to prosper in the next ten years.¹ They used eight metrics, equally weighted: the percentage of chil-dren in the population aged 5 to 14 (families with younger children often move when school looms or more space is need-ed); the birth rate from 2010-14; net domestic migra-tion from 2010-14; the percentage of the population aged 25-44 with a bachelor’s degree; income growth from 2010-15; the unemployment rate; and population growth from 2010-14. Austin came out on top “in terms of population growth, up 13.2% between 2010 and 2014, in large part driven by the strongest rate of net domestic in-migration of the 53 largest metro-politan areas over the same span: 16.4 per 1,000 residents. The educated proportion of its population between 25 and 44 is 43.7%, well ahead of the national average of 33.6%.” Forbes wasn’t the only publication to pay attention to Austin. Throughout 2015, Austin was ranked highly on a number of publications’ lists for top cities.

The addition of the soon-to-be completed University of Texas Dell Medical School should increase the presence of the biotech and medtech industries due to 600,000 sf of education, care, and research space opening in 2016. The area around the new medical school has been designated as an Innova-tion District with the intent of attracting research fa-cilities, startups, and other innovators in the life sci-ences field to not only work with the medical school, but with the University of Texas’s other world-class

¹ Kotkin, Joel. “America's Next Boom Towns.” Forbes, 14 January 2016. Web. 14 January 2016.

academic departments. In addition to the creation of the Innovation District, the University Medical Center Brackenridge, Austin’s primary trauma hos-pital, will be decommissioned and have its func-tions absorbed into the new teaching hospital. After the transition is complete, UMC Brackenridge is to

be torn down and redeveloped into a health-focused mixed use project incorporating hous-ing, offices, hospi-tality, and retail.

With all of this grandiose informa-tion regarding the

vibrancy of the Austin market, there are some mark-ers to keep an eye on. In the Special Report section of this quarter’s Market Report (see pages 7 – 10), we are focusing on the role property taxes play in the operating expenses of Austin’s office buildings. Changes in the way Travis County has conducted its tax assessments on commercial properties has led to higher valuations and therefore higher operating expenses. In 2015, our sample data showed prop-erty taxes comprised 45.81% (up from 31.36% in 2011) of the overall operating expense value. Large jumps in operating expenses have the potential to depress some of the office growth Austin has seen recently (two buildings in the CBD have operating expenses of $21.75 for 2016). Additionally, the perennial issues of traffic/mobility and affordability for housing have the ability to undermine the strong economic growth of the city. Again, the positive in-dicators are very strong for Austin as we head into 2016, so we are continuing to anticipate more up-beat news in future Market Reports.

2015 WAS A YEAR OF STRONG COMMERCIAL REAL

ESTATE GROWTH IN THE STATE'S CAPITAL.

6

AUSTIN TOPS THE CHARTS

In 2015, Austin came out on top of a number of lists ranking quality of life, education, jobs and housing. Here is a sampling of Austin’s notable accolades:

RANKED NO. 1 IN:• Best Large City to Live In (WalletHub)

• Best Place for Startup Activity (Kauffman Foundation)

• Top Cities for Tech Businesses (Savills World Research)

• Highest Job Creation Index Score (Gallup)

• Tech Job Leaders (Business Facilities)

• Top Cities for Startups (Business Facilities)

• Startup Activity (Ewing Marion Kauffman Foundation)

• Cities Building the Most Housing (Forbes)

• Cities with the Largest Net Migration Growth (Forbes)

• U.S. Markets to Watch: Development (Urban Land Institute)

• Best Public University - University of Texas - Austin (Niche)

• Healthiest Housing Markets for Cities Over 300,000 Residents (WalletHub)

RANKED NO. 2 IN:• Top Cities with Economic Growth Potential (Business Facilities)

• Multi-Indicator Market Index Score (Top Cities for Stable Housing Market) (Freddie Mac)

• U.S. Markets to Watch: Overall Real Estate Prospects (Urban Land Institute)

• U.S. Markets to Watch: Homebuilding (Urban Land Institute)

OTHER TOP TEN RANKINGS:

3rd Best Cities to Start a Career (WalletHub)

4th Most Competitive Cities for the Electronic Industry (Site Selection Magazine)

4th Top Best-Performing Large Cities (Milken Institute)

4th U.S. Markets to Watch: Investment (Urban Land Institute)

5th Most Competitive Cities for the Energy Industry (Site Selection Magazine)

6th Best Cities for Job Seekers (nerdwallet)

1

2

7

"In this worldnothing can be

said to becertain, except

death and[op/ex]."

-Ben Franklin

8

WHAT’S THE DEAL WITH ALL THE OP/EX?

SPECIAL REPORT

The beginning of the calendar year generally is the time landlords adjust their properties’ budgets. Operating expenses (op/ex) are a key component of this fine-tuning, which includes variables such as property taxes, utility costs, janitorial costs, etc. When looking at the appendix of this report (pages 46 – 62), you will notice an almost universal increase in each building’s operating expenses when compared to their previous quarters’ values (84 up arrows, 7 down arrows), which makes sense because utility rates have been raised over the years, labor rates have increased for maintenance and services, and inflation, in general, makes things cost more.

What’s staggering, however, is the amount by which these operating expenses have increased. When analyzing all of our competitive set buildings¹ since 2007, the average operating expenses per building increased more this year than any other by a long-shot: an astounding $1.18 more than their 2015 values.

So, why is there this suddenly drastic spike in operating expenses? For this quarter’s special report, we delve deeper into one of the primary underlying components of operating expenses: property taxes.

The Travis County Appraisal District (TCAD) has been under some scrutiny lately in regards to its appraisal methods of commercial properties. The City of Austin filed a lawsuit against the appraisal district in the Fall of 2015 stating that they value commercial and vacant land properties well below market values, thereby placing the majority of the tax burden on homeowners². In a 2015 study done by The University of Texas at Austin, it was found in a sample of 417 transactions done between 2012 and 2014 that the average undervaluation by TCAD of the commercial properties sold was 47% of their fair market value³. One of the primary causes of this discrepancy is the fact that Texas is one of only five states to not mandate the disclosure of sales price data for commercial properties. This has undoubtedly caused some eyebrows to raise—including our own—to observe how TCAD sought to alleviate this problem in 2015 and 2016, and the effects it has on property owners as well as tenants.

-$0.25

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

-$5.00

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Ave

rage

YO

Y C

hang

e in

OpE

x

Ave

rage

Ope

ratin

g Ex

pens

es

Changes in Operating Expenses

Average Year Over Year Change in Op/Ex per Building Average Op/Ex

Ben Franklin Statue; Photo by Mara Buchi

9

SPECIAL REPORT

METHODOLOGY:

For our study, we took a random sample of thirty buildings across the three primary Austin submarkets (CBD, Northwest and Southwest) whose op/ex numbers we track each quarter, and whose op/ex values changed from the previous quarter, to ensure that the op/ex values are updated and currently reflective of their 2016 values. For these thirty buildings, we then found their appraised values and tax rate for each year from 2011-2015 (TCAD only lists appraisals going back five years, and has not yet released 2016 appraised values). From these values, we were able to calculate the percentage of operating expenses that is comprised of property taxes for that year using the following formula:

Where “Op/Ex” is the value charged by landlords for operating expenses per square foot of rentable area. We then averaged the following values for each year across all thirty buildings: Op/Ex ($/sf), Assessed Value ($/sf), and Taxes as % of Op/Ex. We were left with the following summary (see Table 1).

To compare these values against one another, we plotted them as percent changes over time with 2011 being the reference point (see Graph 1).

0%

20%

40%

60%

80%

2011 2012 2013 2014 2015 2016

Percent Changes - Since 2011

Average Op/Ex Average Assessed Value $/SF Average Taxes as % of Op/Ex

RESULTS:

From Graph 1 the most notable takeaways are:

• Dramatic increases in both the Average Assessed Value and Average Taxes as % of Op/Ex from 2014 to 2015 relative to previous years, despite the fact that the actual tax rates decreased over this same time period

• Dramatic increase in Average Op/Ex from 2015 to 2016 rela-tive to previous years

What does this mean? Primarily, it shows that TCAD has indeed stepped up their appraisal values of commercial properties drasti-cally since coming under pressure by the city of Austin, as seen in the

Year Average Op/Ex

Average Assessed Value ($/SF)

Average Tax Rate

Average Taxes as % of Op/Ex

2011 $11.79 $158.45 2.36% 31.36%

2012 $11.78 $180.41 2.39% 36.34%

2013 $12.15 $193.54 2.45% 38.74%

2014 $12.88 $219.65 2.36% 40.11%

2015 $13.89 $278.26 2.30% 45.81%

2016 $15.71 N/A N/A N/A

Taxes as % of Op/Ex

Appraised Value × Tax RateNet Rentable Area

Op/Ex=

Table 1

Graph 1

10

SPECIAL REPORT

WHAT DOES THIS MEAN FOR YOU?

Landlords: While we do not expect 2016 appraisal values to decrease from their 2015 values by any means, we believe that the spike experienced in 2015 will help curb the increases in 2016 values as TCAD’s appraisal methods bring commercial properties’ appraisal values nearer to actual fair market values. However, you might drive prospective tenants away with too high of operating expenses in the future if nothing is done to lower the non-tax portion of your op/ex. If money is invested now in equipment that require less maintenance and consume less energy, you will be able to dampen the rate of increase for your operating expenses, thereby making your properties more competitive and attractive to prospective tenants.

Tenants: Don’t let the sticker shock of drastically higher 2016 operating expenses scare you! This spike likely repre-sents a very short-term trend, and while operating expenses will probably not get any cheaper in the near future, they should not continue to grow at the rate they did this year as TCAD’s commercial property appraisals approach true fair market values. Therefore, it would behoove you to factor in these increases into your 2017 budget. Furthermore, if you are a tenant out in the market looking for new space, you can use this year’s high operating expenses as a tool to negoti-ate for a lower base rental rate. For example, being that operating expenses jumped several dollars per square foot for buildings downtown, that submarket may be an unviable option now. Point to this spike in operating expenses as what has made the space out of your budget, and negotiate the base rental rate down to an affordable level.

¹Competitive set buildings are considered Class A office buildings located in, or near the core of downtown, and newer suburban office buildings that typically have structured parking and amenities such as conference rooms, workout facilities and/or delis.

²City of Austin v. Travis Central Appraisal District Et Al. 126th Judicial District Court of Travis County, Texas. 18 Sept. 2015.

³Gau, George W., Ph.D. An Analysis of TCAD's Commercial Valuations For City of Austin. 11 Mar. 2015.

nearly 80% increase in appraised value per square foot over four years, with nearly half of that increase occurring in the last year. Secondly, Average Taxes as % of Op/Ex increased drastically in 2015, whereas Average Op/Ex remained on a relatively steady incline over the same. This shows that landlords were not quite prepared to pass the cost of the higher property taxes onto their tenants. They seem to have made up for this discrepancy in the new op/ex figures, though, as the dramatic spike in Average Op/Ex occurs in 2016.

University Park

Inside 7700 Parmer; Photo by: Third Eye Photography

AUSTIN CITYWIDE4Q UPDATE

1,070,732 SFNet Absorption

9.64% Direct & Sublease Vacancy Rate

$35.81Avg. Class A Full Service Rental Rate

4Q 2015 was another great quarter for the Austin market, building on a very healthy 2015. 4Q 2015 added another 581,073 sf of new office space, bringing 2015’s total of new product to 2,671,968 sf. Outpacing the new deliveries was absorption, as this metric cracked the 1 million sf mark this quarter, with 1,070,732 sf of space absorbed. For the year, a hefty 2,806,508 sf was absorbed, bringing down the overall vacancy rate to 9.64% from 4Q 2014’s 10.56%. The overall Class A full service asking rate did decline this quarter to $35.81/sf, but is still $1.03/sf higher than it was at the close of 2014.

13

SNAPSHOT:CAPITAL MARKETS

MAJOR SALES TRANSACTIONS

Market North

Class B

Size (SF) 64,155

Buyer OPRE

Seller Farahani Family

Price $5,950,000

Price/SF $92.74

SOLDSOLD

Market SW

Class A

Size (SF) 320,000

Buyer Brandywine Realty Trust and DRA Advisors

Seller Brandywine Realty Trust

Price $91,300,000

Price/SF $285.31

Notes Brandywine retained 50% interest in the deal

Market NW

Class A

Size (SF) 1,023,000

Buyer Accesso Partners

Seller Spear Street Capital

Price N/A

Price/SF N/A

SOLD

Market South

Class B

Size (SF) 68,058

Buyer OakPoint Real Estate

Seller Braun Enterprises

Price $7,705,000

Price/SF $113.21

SOLD301 CONGRESS

Market CBD

Class A

Size (SF) 428,419

Buyer Prudential Real Estate

Seller Commonwealth Partners

Price N/A

Price/SF N/A

SOLD

301 Congress

7700 PARMER LANE

PARK PLACEI & II

ENCINO TRACEI & II

ENTERPRISEPLAZA

14

MAJOR LEASES SIGNED Leases signed this quarter over 20,000 sf:

CBD• Main Street Hub increased their office space by moving to 46,960 sf in One Congress Plaza.

They are currently subleasing their previous space in the Perry Brooks Tower.

• Outbound Engine signed a 40,207 sf lease in San Jacinto Center.

CENTRAL• WeWork continued their expansion into Austin by signing a lease for a whole floor at University Park,

occupying 24,747 sf.

• Kendra Scott expanded their recently signed lease at Lamar Central for another 20,000 sf of office space.

NORTHWEST• LDR Spine renewed and expanded their lease at Aspen Lake One to occupy a total of 88,000 sf.

• BancVue renewed their lease at Lakeview Plaza for 62,193 sf.

• Planview was the first tenant to sign at the newly delivered Research Park Plaza V by leasing 51,624 sf of space.

AUSTINSUBMARKETMAP

CBD

Central

East/Northeast

North

Northwest

Round Rock

South/Southeast

Southwest

15

AUSTIN OFFICE DEVELOPMENT PIPELINE

1Q

500 W 2nd 489,404 SF CBD

1Q

5th + Colorado 179,000 SF CBD

Domain 1 124,571 SF Northwest

Eastside Village 94,500 SF East

Lakes at TechRidge - Building C

39,400 SF East

NorthShore 23,592 SF CBD

2Q

905 & 906 Broadmoor* 345,000 SF Northwest

La Frontera Plaza 97,941 SF Round Rock


4Q


3Q

Braker Point III† 195,230 SF Northwest

Pioneer Bank Building 46,000 SF Central

The Diamond Building at Mueller

35,015 SF East

This timeline shows office projects over 30,000 SF that have either broken ground or will be breaking ground soon and the

estimated year and quarter of delivery.

3Q

Shoal Creek Walk 218,432 SF CBD

2Q

801 Barton Springs 90,500 South

2016 2017

*Already existing-coming to market 2Q 2016

†Already existing-coming to market 3Q 2016

16

Future Developments

10721 Domain Dr. 308,000 SF Northwest

310 Comal 37,500 SF East

405 Colorado TBD SF CBD

604 W 6th Street 31,035 SF CBD

Amber Oaks Phase I 90,300 SF Northwest

Amber Oaks Phase II 90,300 SF Northwest

Amber Oaks Phase III 45,000 SF Northwest

Aspen Lake Three 128,700 SF Northwest

Austin American Statesman TBD SF CBD

Cityline at MLK 150,000 SF East

Four Points Centre Building 3 250,000 SF Northwest

Four Points Centre Building 4 80,000 SF Northwest

Frontera Ridge 400,000 SF Round Rock

Lantana Ridge I 87,500 SF Southwest

Lantana Ridge II 87,500 SF Southwest

Mueller Market District 2,000,000 SF East

Novare/Post Office TBD SF CBD

Paloma Ridge C 112,500 SF Northwest

Plaza Saltillo 125,000 SF East

Rainey Gateway 355,000 SF CBD

Regency Park 90,000 SF Southwest

Rollingwood Center III 107,000 SF Southwest

St. Elmo 225,000 SF South

Future Developments

The Backyard - Buildings B, J, & H

171,450 SF Southwest

The Lakes at TechRidge - Building A

48,800 SF East

The Lakes at TechRidge - Building B

48,800 SF East

The Park @ Mueller 116,000 SF East

The Terrace 3 203,130 SF Southwest



The Waterfront 625,000 SF South

Third + Shoal 338,279 SF CBD

Waller Creek Center 325,000 SF CBD

PLANNED

Interior of 301 Congress; Photo by: Scott Mason Photography

CENTRAL BUSINESSDISTRICT 4Q UPDATE

3,066 SFNet Absorption



Another quarter of vacancy rate decline occurred this quarter across the CBD for all office building classes. The rate dropped 76 basis points from an already low 7.83% to 7.07% for all direct and subleasable space. Our competitive set of downtown office buildings (the list of Class A buildings located in, or near, the core of downtown can be found on page 50), moved to a shockingly low 4.53%. Next quarter, the competitive set of buildings will grow larger with the delivery of the NorthShore office building (23,592 sf) and 5th + Colorado (179,000 sf).

19

As of the end of 4Q 2015, NorthShore is 100% pre-leased and 5th + Colorado is 31% pre-leased with some other deals reportedly in the works. There will not be another new office building delivered until 1Q 2017, when the already 42% pre-leased 500 W 2nd will bring 489,404 sf to the downtown skyline. With that being noted, vacancy rates should remain low for the foreseeable future. For the year, vacancy

CBD UPDATE

rates in the competitive set of buildings dropped almost three whole percentage points from 7.52% in 1Q 2015 to 4.53% in 4Q 2015. This drop occurred even with the addition of 143,151 sf of office space that came with the delivery of the Seaholm Power Plant redevelopment. Even more impressive was the lowering of the vacancy rate across all class types during 2015, plummeting from 12.81% to the 7.07% of this quarter.

Hartland Plaza Lobby; Photo by: Scott Mason Photography

20

Class A asking full service rental rates are showing a decline for the overall CBD market this quarter, falling from $44.17/sf last quarter to $43.64/sf in 4Q 2015. Conversely, the competitive set has spiked upward by $3.33/sf this quarter, surging from a previous record of $48.70/sf to a new all-time high of $52.03/sf. The competitive set of buildings include the new operating expense values for the upcoming year, whereas it appears this is not the case for the CBRE dataset (please see the Special Report found on pages 7 – 10 of this report to see why operating expenses have climbed so quickly for 2016). The large upswing in operating expenses plays a major role in the large jump in full service rates for the CBD.

There were not any new deliveries this quarter in the CBD, but there are four buildings currently under construction. The previously mentioned buildings under construction (NorthShore, 5th + Colorado, and 500 W 2nd St) are joined by Shoal Creek Walk, which will deliver 218,432 sf of leasable office space in 3Q 2017 and is already 39% preleased to Cirrus Logic.

Like last quarter, only two existing buildings have blocks of available space above 20,000 sf this quarter. The low vacancy rates and limited large blocks are continuing to limit companies looking to grow downtown or move into the CBD.

21

CBD BY THE NUMBERS

VACANCY RATES VS. RENTAL RATES

0%

4%

8%

12%

16%

20%

$40

$41

$42

$43

$44

$45

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate

Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate

NET ABSORPTION

81%

83%

85%

87%

89%

91%

93%

95%

(50)

0

50

100

150

200

250

300

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)

Net Absorption* Direct & Sublease Occupancy Rate

AVAILABLE SF VS. VACANCY RATE

0%

3%

6%

9%

12%

15%

0

300

600

900

1,200

1,500

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)

Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate

Quarter Net Rentable Area Direct Available SF Net Absorption* Direct & Sublease Vacancy Rate

Average Class A Full Service Rental Rate

2014 Q1 9,084,414 1,032,112 17,164 11.81% $41.45

2014 Q2 9,084,414 1,021,461 (13,728) 11.96% $40.88

2014 Q3 9,252,285 1,041,014 153,098 11.90% $41.39

2014 Q4 9,252,285 802,517 227,661 9.44% $43.13

2015 Q1 9,768,770 1,135,835 139,236 12.81% $43.83

2015 Q2 9,809,755 870,240 291,638 10.20% $41.90

2015 Q3 9,809,755 672,222 232,375 7.83% $44.17

2015 Q4 9,732,884 631,228 3,066 7.07% $43.64

CBD SUBMARKET

Numbers based on CBRE statistics. *Absorption includes sublease space

22

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

0%

5%

10%

15%

20%

25%

30%

35%

Mar

ket S

ize

(Mill

ions

of S

F)

Tota

l Vac

ancy

Rat

e (%

)

Market Size Historic Vacancy Rate AQUILA Model 3% Job Growth 1% Job Growth

5th + ColoradoNorthShore

Shoal Creek Walk

500 W 2nd

1% Job Growth

3% Job Growth

$15

$20

$25

$30

$35

$40

$45

$50

$55

Full

Serv

ice

Rent

al R

ates

($)

Historic Rental Rate AQUILA Model 3% Job Growth 1% Job Growth

1% Job Growth

3% Job Growth

AUSTIN CBD OFFICE RENTAL RATE PROJECTIONS

AUSTIN CBD OFFICE VACANCY RATE PROJECTIONS

23

CBD DEVELOPMENT& LARGE AVAILABILITY

OFFICE UNDER CONSTRUCTIONHOTEL/RESIDENTIAL UNDER CONSTRUCTIONFUTURE DEVELOPMENTSEXISTING AVAILABILITIES

6th Street

5th Street

Barton Springs Rd.

N. L

amar

Blvd

.

Cong

ress

Ave

.

11th Street

S. 1

st St

reet

Cesar Chavez St.

6th Street6th Street6th Street


Barton Springs Rd.

Barton Springs Rd.

Barton Springs Rd.

N. L

amar

Blvd

.

N. L

amar

Blvd

.

N. L

amar

Blvd

.

Cong

ress

Ave

.

Cong

ress

Ave

.

Cong

ress

Ave

.


S. 1

st St

reet

S. 1

st St

reet

S. 1

st St

reet

Cesar Chavez St.

Cesar Chavez St.

Cesar Chavez St.

500 W. 2NDNORTHSHORE

THEINDEPENDENT

SHOALCREEKWALK

604 W.SIXTH

NOVARE/POST OFFICE

ONECONGRESSPLAZA

FAIRMONTHOTELWALLERCREEKCENTERRAINEYGATEWAY

AUSTINAMERICANSTATESMAN801 BARTONSPRINGS

PERRY BROOKSTOWER

HOTEL ZAZA/GABLES5TH +COLORADO

5TH &WEST

THIRD +SHOAL

ALOFT & ELEMENT

HOLIDAY INN& HOTEL INDIGO

HYATTHOUSE HOTEL

405COLORADO

70RAINEY

THE AUSTIN PROPERGREEN WATERRESIDENTIAL TOWER

24

OFFICE UNDER CONSTRUCTIONHOTEL/RESIDENTIAL UNDER CONSTRUCTIONFUTURE DEVELOPMENTSEXISTING AVAILABILITIES

6th Street

5th Street

Barton Springs Rd.

N. L

amar

Blvd

.

Cong

ress

Ave

.

11th Street

S. 1

st St

reet

Cesar Chavez St.



Barton Springs Rd.

Barton Springs Rd.

Barton Springs Rd.

N. L

amar

Blvd

.

N. L

amar

Blvd

.

N. L

amar

Blvd

.

Cong

ress

Ave

.

Cong

ress

Ave

.

Cong

ress

Ave

.


S. 1

st St

reet

S. 1

st St

reet

S. 1

st St

reet

Cesar Chavez St.

Cesar Chavez St.

Cesar Chavez St.

500 W. 2NDNORTHSHORE

THEINDEPENDENT

SHOALCREEKWALK

604 W.SIXTH

NOVARE/POST OFFICE

ONECONGRESSPLAZA

FAIRMONTHOTELWALLERCREEKCENTERRAINEYGATEWAY

AUSTINAMERICANSTATESMAN801 BARTONSPRINGS

PERRY BROOKSTOWER

HOTEL ZAZA/GABLES5TH +COLORADO

5TH &WEST

THIRD +SHOAL

ALOFT & ELEMENT

HOLIDAY INN& HOTEL INDIGO

HYATTHOUSE HOTEL

405COLORADO

70RAINEY

THE AUSTIN PROPERGREEN WATERRESIDENTIAL TOWER

Building Available SF Max. Contiguous

One Congress Plaza 44,055 SF 31,037 SF

Perry Brooks Tower 1,409 (direct) + 28,000 SF (sublease)

22,400 SF (sublease)

LARGE BLOCKS OF CONTIGUOUS AVAILABILITY

20,000 SF + of available space

Building % Preleased Total SF Est. Delivery

500 W 2nd 42% 489,404 SF 1Q 2017

5th + Colorado 28% 179,000 SF 1Q 2016

NorthShore 100% 23,592 SF 1Q 2016

801 Barton Springs 0% 90,500 SF 2Q 2017

Shoal Creek Walk 42% 218,432 SF 3Q 2017

OFFICE PROJECTS UNDER CONSTRUCTION

Units/Rooms Est. Delivery Max. Contiguous

5th & West 154 Units 4Q 2017

Aloft & Element 422 Rooms 3Q 2017

Fairmont 1,066 Rooms 3Q 2017

Hotel Indigo/Holiday Inn Express 300 Rooms 2Q 2016

Hyatt House Hotel 190 Rooms 4Q 2016

NorthShore 436 Units 1Q 2017

The Austin Proper 250 Rooms, 120 Units 2Q 2017

The Independent 370 Units 3Q 2018

OTHER PROJECTS UNDER CONSTRUCTION

Units/Rooms Est. Delivery Max. Contiguous

405 Colorado TBD Office

604 W 6th Street 31,035 SF Office

Austin American Statesman TBD Office

Novare/Post Office TBD Office

Rainey Gateway 355,000 SF Office

Third + Shoal 338,279 SF Office

Waller Creek Center 325,000 SF Office

70 Rainey 164 Units Multifamily

Green Water Residential Tower TBD Multifamily

Hotel Zaza/Gables 226 Units, 160 Rooms Hotel/Multifamily

FUTURE/PLANNED DEVELOPMENTS

25

Central Business District AUSTIN, TXQ4 2015 CLASS A AVAILABILITY SUMMARY

SUBLEASE SPACE

AVAILABLE SPACE

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,421 SF

300 W 6th 300 W 6th St.

454,225 SF23 Floors

99% Leased$36.00 NNN$21.75 Op/Ex$57.75 Gross

33

32

31

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Frost Bank Tower 401 Congress Ave.

535,078 SF33 Floors


13

12

11

10

9

8

7

6

5

4

3

2

1

4,900 SF

IBC Bank Plaza500 W 5th St.

194,749 SF13 Floors


30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,761 SF

23,142 SF

5,818 SF

2,118 SF

11,216 SF

3,113 SF

One Congress Plaza111 Congress Ave.

518,385 SF30 Floors

92% Leased$38.00 - $40.00 NNN

$17.77 Op/Ex$55.77 - $57.77 Gross

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

San Jacinto Center 98 San Jacinto Blvd.

406,279 SF21 Floors

100% Leased$38.00 - $40.00 NNN

$18.75 Op/Ex$56.75 - $58.75 Gross

21,218 SF

21,218 SF

21,218 SF

21,218 SF

21,218 SF

21,218 SF

Shoal Creek Walk835 W 6th St.

218,432 SF14 Floors

42% Pre-Leased$31.00 - $35.00 NNN

$16.50 Op/Ex$47.50 - $51.50 Gross

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Colorado Tower303 Colorado St.

373,334 SF30 Floors


21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

16,711

Chase Tower221 W 6th St.

389,503 SF21 Floors


16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

7,332 SF

5,638 SF

3,715 SF

1,881 SF

693 SF 3,520 SF

850 SF 1,716 SF

Austin Centre701 Brazos St.

326,335 SF16 Floors


20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

8,022 SF

5,275 SF

10,821 SF

816 Congress 816 Congress Ave.

434,081 SF20 Floors

94% Leased$27.00 - $29.00 NNN

$17.59 Op/Ex$44.59 - 46.59 Gross

32

31

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

782 SF

12,405 SF


503,951 SF32 Floors


18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

19,000 SF

19,000 SF

19,000 SF

6,500 SF

19,000 SF

19,000 SF

19,000 SF

3,000 SF

5th + Colorado 201 W 5th St.

179,000 SF18 Floors

31% Pre-Leased$34.00 - $35.00 NNN

$15.20 Op/Ex$49.20 - $50.20 Gross

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,414 SF

1,455 SF

2,960 SF

2,018 SF

4,136 SF

515 Congress515 Congress Ave.

258,176 SF26 Floors


5

4

3

2

118,922 SF


122,747 SF5 Floors

85% Leased$20.00 - $32.00 NNN

$21.27 Op/Ex$41.27 - $53.27 Gross

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

31,051 SF

32,603 SF

32,603 SF

33,931 SF

33,931 SF

31,822 SF

31,822 SF

31,530 SF

23,798 SF

500 W 2nd 500 W 2nd St.

489,404 SF29 Floors

42% Pre-Leased$36.50 NNN$15.50 Op/Ex$52.00 Gross

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,648 SF

17,218 SF

6,432 SF 2,358 SF

2,195 SF

400 W 15th400 W 15th St.

281,196 SF17 Floors


22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

2,177 SF

2,809 SF

2,893 SF

6,593 SF

7,887 SF


411,536 SF22 Floors

95% Leased$36.50 - $37.00 NNN

20.84 Op/Ex$57.34 - $57.84 Gross

7,165 SF

2,502 SF

7,254 SF

1,620 SF

4,669 SF


418,338 SF22 Floors

96% Leased$33.00 - $35.00 NNN

$17.95 Op/Ex$50.95 - $52.95 Gross

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

AVAILABILITY SUMMARYCBD CLASS A

26

Central Business District AUSTIN, TXQ4 2015 CLASS A AVAILABILITY SUMMARY

SUBLEASE SPACE

AVAILABLE SPACE

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,421 SF

300 W 6th 300 W 6th St.

454,225 SF23 Floors


33

32

31

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Frost Bank Tower 401 Congress Ave.

535,078 SF33 Floors


13

12

11

10

9

8

7

6

5

4

3

2

1

4,900 SF

IBC Bank Plaza500 W 5th St.

194,749 SF13 Floors


30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,761 SF

23,142 SF

5,818 SF

2,118 SF

11,216 SF

3,113 SF

One Congress Plaza111 Congress Ave.

518,385 SF30 Floors

92% Leased$38.00 - $40.00 NNN

$17.77 Op/Ex$55.77 - $57.77 Gross

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

San Jacinto Center 98 San Jacinto Blvd.

406,279 SF21 Floors

100% Leased$38.00 - $40.00 NNN

$18.75 Op/Ex$56.75 - $58.75 Gross

21,218 SF

21,218 SF

21,218 SF

21,218 SF

21,218 SF

21,218 SF

Shoal Creek Walk835 W 6th St.

218,432 SF14 Floors

42% Pre-Leased$31.00 - $35.00 NNN

$16.50 Op/Ex$47.50 - $51.50 Gross

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Colorado Tower303 Colorado St.

373,334 SF30 Floors


21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

16,711

Chase Tower221 W 6th St.

389,503 SF21 Floors


16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

7,332 SF

5,638 SF

3,715 SF

1,881 SF

693 SF 3,520 SF

850 SF 1,716 SF

Austin Centre701 Brazos St.

326,335 SF16 Floors


20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

8,022 SF

5,275 SF

10,821 SF


434,081 SF20 Floors

94% Leased$27.00 - $29.00 NNN

$17.59 Op/Ex$44.59 - 46.59 Gross

32

31

30

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

782 SF

12,405 SF


503,951 SF32 Floors


18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

19,000 SF

19,000 SF

19,000 SF

6,500 SF

19,000 SF

19,000 SF

19,000 SF

3,000 SF

5th + Colorado 201 W 5th St.

179,000 SF18 Floors

31% Pre-Leased$34.00 - $35.00 NNN

$15.20 Op/Ex$49.20 - $50.20 Gross

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,414 SF

1,455 SF

2,960 SF

2,018 SF

4,136 SF


258,176 SF26 Floors


5

4

3

2

118,922 SF


122,747 SF5 Floors

85% Leased$20.00 - $32.00 NNN

$21.27 Op/Ex$41.27 - $53.27 Gross

29

28

27

26

25

24

23

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

31,051 SF

32,603 SF

32,603 SF

33,931 SF

33,931 SF

31,822 SF

31,822 SF

31,530 SF

23,798 SF

500 W 2nd 500 W 2nd St.

489,404 SF29 Floors

42% Pre-Leased$36.50 NNN$15.50 Op/Ex$52.00 Gross

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

1,648 SF

17,218 SF

6,432 SF 2,358 SF

2,195 SF

400 W 15th400 W 15th St.

281,196 SF17 Floors


22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

2,177 SF

2,809 SF

2,893 SF

6,593 SF

7,887 SF


411,536 SF22 Floors

95% Leased$36.50 - $37.00 NNN

20.84 Op/Ex$57.34 - $57.84 Gross

7,165 SF

2,502 SF

7,254 SF

1,620 SF

4,669 SF


418,338 SF22 Floors

96% Leased$33.00 - $35.00 NNN

$17.95 Op/Ex$50.95 - $52.95 Gross

22

21

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Photo Name; Photo Courtesy of: NameUFCU Plaza; Photo by Scott Mason Photography

28

NORTHWEST SUBMARKET

4Q UPDATE




The vacancy rate for all classes of build-ings in the Northwest (NW) submarket fell from 9.96% to 8.99%. The competitive set of buildings (the list of newer suburban of-fice buildings that typically have structured parking, amenities such as conference rooms, workout facilities and/or delis can be found on page 55) also saw a drop in the vacancy rate, dipping down to 9.91% from last quarter’s 10.64%.

29

NORTHWESTSUBMARKET UPDATEOne item of note that was mentioned in last quar-ter’s report, the overall market net rentable area tracked by CBRE for both 3Q 2015 and 4Q 2015 does not include Paloma Ridge A & B, two Class A buildings combining for 212,400 sf that deliv-ered in 3Q 2015. These two buildings are 100% vacant and their exclusion from the overall office vacancy rate significantly deflates its value. The Paloma Ridge buildings are included in the com-petitive set, though. Impressively, the competitive set vacancy rate still dropped even with the deliv-ery of three new buildings (Research Park Plaza V, Quarry Oaks III, and Aspen Lake Two). As 2015 came to a close, all-time records were set across each of the three micromarkets.

Records were broken in the NW submarket’s full service asking rental rates in 4Q 2015, as well. Across all Class A buildings, full service asking rental rates increased for the eighth straight quar-

ter, jumping from $33.26/sf to $34.14/sf. The competitive set rates also increased this quarter, climbing to $34.30/sf from $33.55/sf. In our competitive set, 36% of the buildings we track raised their base asking rates, whereas only 1.5% lowered their rate.

As mentioned previously, there were three deliv-eries this quarter in the NW submarket. Both Re-search Park Plaza V (172,854 sf – 30% pre-leased to Planview) and Aspen Lake Two (129,000 sf – 100% pre-leased to Q2) are located in the Far Northwest micromarket and Quarry Oaks III (137,615 sf – 100% pre-leased to Bazaarvoice) is located in the Arboretum/Domain micromarket. As 2015 closes, there are only three projects cur-rently under construction in the NW submarket, all located in the Domain and 0% pre-leased (Domain 1 – 1Q 2016 delivery – 124,571 sf, Domain 5 – 2Q 2016 delivery – 74,787 sf, and Domain 8 – 4Q 2016 delivery – 255,000 sf).

Aspen Lake Rendering

30

The Arboretum/Domain micromarket’s vacancy rate went down and asking rental rate went up from last quarter, rebounding from a quarter that saw oppo-site movement for each metric. Both the 5.99% vacancy rate and the $34.82/sf average asking full service rental rate are all-time records for this micromarket. The three Domain projects will be entering the market at a time when new product is warranted.

The Shepherd Mountain micromarket continues to strengthen as it decreased vacancy rates for the fourth straight quarter (now at 9.42%) and increased asking full service rental rates for a staggering fifteenth straight quarter. Just like the Arboretum/Domain micromarket, both of these measurements are all-time records. Additionally, the

$35.16/sf asking rental rate is the highest value of the three NW micro-markets.

The Far Northwest saw a large net absorption this quarter, yet still had vacancy rates increase to 16.70% from last

quarter’s 15.48%. Palo-ma Ridge A & B still sits vacant and the newly delivered Research Park Plaza V added 121,229 sf of vacant space to the micromarket. The 100% pre-leased Aspen Lake Two delivery helped miti-gate the vacancy rate increase, though. The asking full service rental rate did rise, though, to a record $32.77 for this micromarket. Prior to last quarter’s decline in asking rental rates, the Far Northwest micromarket had fourteen straight quarters of in-creasing rental rates.

NORTHWESTMICROMARKETS

Arboretum/Domain

Far Northwest

Shepherd Mountain

AS 2015 CAME TO A CLOSE, ALL-TIME RECORDS WERE SET ACROSS EACH OF THE THREE MICROMARKETS.

31

NORTHWEST BY THE NUMBERS


4%

7%

10%

13%

16%

$28

$30

$32

$34

$36

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate


NET ABSORPTION

85%

87%

89%

91%

93%

95%

(150)

0

150

300

450

600

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)



0%

3%

6%

9%

12%

15%

0

500

1,000

1,500

2,000

2,500

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)




2014 Q1 16,747,039 1,635,834 102,128 10.21% $29.20

2014 Q2 16,697,337 1,493,813 (12,658) 10.02% $29.89

2014 Q3 16,697,337 1,566,544 (103,939) 10.64% $30.65

2014 Q4 16,817,337 1,540,054 137,486 10.46% $30.83

2015 Q1 17,154,310 1,879,975 98,887 11.65% $32.06

2015 Q2 17,269,310 1,819,734 116,457 11.56% $32.74

2015 Q3 17,269,310 1,665,124 276,295 9.96% $33.26

2015 Q4 17,535,625 1,283,335 410,012 8.99% $34.14

NORTHWEST OVERALL SUBMARKET PERFORMANCE


32

NORTHWEST SUBMARKET OFFICE RENTAL RATE PROJECTIONS

NORTHWEST SUBMARKET OFFICE VACANCY RATE PROJECTIONS

$15

$20

$25

$30

$35

$40

Full

Serv

ice

Rent

al R

ates

($)


1% Job Growth

3% Job Growth

10.0

11.7

13.3

15.0

16.7

18.3

20.0

0%

5%

10%

15%

20%

25%

30%

Mar

ket S

ize

(Mill

ions

of S

F)

Tota

l Vac

ancy

Rat

e (%

)


Domain 1

905 & 906 BroadmoorDomain 5

Braker Pointe III Domain 8

1% Job Growth

3% Job Growth

33

NORTHWEST AUSTINLARGE OFFICE AVAILABILITY

6

5

DOMAIN

ARBORETUM

PFLUGERVILLE

CEDAR PARK ROUND ROCK

LAKE TRAVIS

1718

1

8

13

11

7

19

14

SHEPHERD MOUNTAIN

2

3

9

12

4

22

21

1516

20

10

4

13

10

89

3

7

12

51211

6

DOMAIN

ARBORETUM

PFLUGERVILLE


LAKE TRAVIS

SHEPHERD MOUNTAIN

Building Direct Available SF Sublease Available SF Total Available SF

1 7700 Parmer - Bldg B 31,500 - 31,500

2 7700 Parmer - Bldg C 23,693 - 23,693

3 Amber Oaks F 79,732 - 79,732

4 Amber Oaks J 6,245 33,147 39,392

5 Atrium Office Centre 20,340 - 20,340

6 Domain 3 - 20,816 20,816

7 Lakewood Center I - 45,020 45,020

8 Paloma Ridge A 106,200 - 106,200

9 Paloma Ridge B 106,200 - 106,200

10 Park Central I 15,375 23,326 38,701

11 Park Centre Bldg. 3 57,562 - 57,562

12 Prominent Pointe I 28,979 - 28,979

13 Research Park Number Five 39,237 - 39,237

14 Research Park Place 8 33,518 - 33,518

15 Research Park Plaza V 121,229 121,229

16 Research Tech Center Bldg 2 22,295 22,295

17 Riata Corporate Park Bldg 4 93,737 - 93,737

18 Riata Corporate Park Bldg 5 23,783 - 23,783

19 River Place Corp Park Bldg VII - 21,477 21,477

20 The Park at 8300 N. MoPac 6,911 31,958 38,869

21 Travesia Corporate Park 1-3 33,555 33,945 67,500

22 UFCU Plaza 28,695 - 28,695


34

4

13

10

89

3

7

12

51211

6

DOMAIN

ARBORETUM

PFLUGERVILLE


LAKE TRAVIS

SHEPHERD MOUNTAIN

NORTHWEST AUSTINOFFICE DEVELOPMENT

Building Total SF Percent Preleased Estimated Delivery Status

1 Domain 1 124,571 0% 1Q 2016 Under Construction


3 905 & 906 Broadmoor* 345,000 0% 2Q 2016 Coming to Market

4 Braker Point III† 195,230 0% 3Q 2016 Coming to Market


6 10721 Domain Dr. 308,000 0% Planned Planned

7 Amber Oaks Phase I 90,300 0% Planned Planned

8 Amber Oaks Phase II 90,300 0% Planned Planned

9 Amber Oaks Phase III 45,000 0% Planned Planned

10 Aspen Lake Three 128,700 0% Planned Planned

11 Four Points Centre Bldg 3 250,000 0% Planned Planned

12 Four Points Centre Bldg 4 80,000 0% Planned Planned

13 Paloma Ridge C 112,500 0% Planned Planned

*Already existing - Coming to market 2Q 2016†Already existing - Coming to market 3Q 2016

Under Construction Planned

SOUTHWESTSUBMARKET

4Q UPDATE




Across all classes of buildings, the Southwest (SW) submarket had a vacancy rate drop of 349 basis points from last quarter to 9.80%. Juxtaposing that large drop with the rise in competitive set vacancy rates (moving from 7.77% to 10.80%) can be somewhat confusing. This can be explained by the methodology CBRE employs when collecting vacancy data. They count leased space that has not been moved into as vacant, hence “available.” Since we use CBRE’s data for the overall market, this contradicts the dataset for the competitive set buildings (the list of newer suburban office buildings that typically have structured parking, amenities such as conference rooms, workout facilities and/or delis can be found on page 61).

37

SOUTHWESTSUBMARKET UPDATE

SOUTHWESTMICROMARKETS

Far Southwest

Near Southwest

In 2Q 2015, three buildings delivered, bringing a total of 680,968 sf to the SW submarket. As the tenants have been moving into these buildings, the CBRE availabilities are going down. In the competitive set, we had already counted those leases, so we had a drop in vacancy last quarter. This quarter, Encino Trace II has delivered with only 17.8% of the 158,137 sf leased, while

Bazaarvoice has moved out of 3900 San Clemente building to go into their new space in Quarry Oaks III in the NW submarket. These two events have brought 265,436 sf to the market and has pushed the competitive set vacancy rate upwards, to be more in line with the CBRE value for this quarter (9.80% vs 10.80%).

38

Last quarter, the asking full service rental rates for all Class A buildings in the SW submarket climbed to a record high $35.03/sf. This quarter pushed the record even higher to $35.85/sf. The competitive set moved even higher to $38.15/sf, escalating $0.54/sf over the course of the last quarter. This was the sixteenth consecutive quarter that the competitive set grew in asking rental rates.

With Encino Trace II delivering this quarter, no additional major projects are currently under construction in SW Austin. Last quarter, we predicted a bump up in the competitive set’s vacancy rate with Encino Trace II’s delivery and the Bazaarvoice departure, but also noted that we felt vacancy rates would start to drop again. We are not budging from that stance as the SW submarket remains a big draw for tenants due to its unique views, access and proximity to downtown, desirable neighborhoods and a rich talent pool.

The Near Southwest micromarket saw its overall vacancy rate climb again from 9.61% to 10.76%, after last quarter’s 235 basis point increase. Both The Park on Barton Creek 2 and Barton Skyway II had over 20,000 sf come available. The Near

Southwest micromarket has continued the trend of increasing asking rental rates every quarter for 19 consecutive quarters. The 4Q 2015 full service asking rate is another record for this micromarket, crossing over the $40/sf threshold for the first time at $40.59/sf.

After last quarter’s large drop in vacancy rates for the Far Southwest micromarket, this quarter swung the other way with an increase in 410 basis points in the total vacancy rate. The 10.81% vacancy rate is the highest this micromarket has seen since 2Q 2012. The two primary causes for this rapid increase are the Bazaarvoice departure from the submarket to the NW submarket and the delivery of the partially leased Encino Trace II. Otherwise, there has been normal movement of tenants within this micromarket that should not be cause for much alarm. Landlords continue to take advantage of the strong market by increasing the asking full service rental rates, as illustrated by the increase to $36.75/sf from last quarter’s $36.31/sf.

39

SOUTHWEST BY THE NUMBERS


0%

4%

8%

12%

16%

$30

$32

$34

$36

$38

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate


NET ABSORPTION

86%

88%

90%

92%

94%

(200)

0

200

400

600

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)



0%

3%

6%

9%

12%

15%

0

300

600

900

1,200

1,500

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)




2014 Q1 9,382,293 703,789 (22,457) 8.66% $31.19

2014 Q2 9,382,293 853,812 (150,296) 10.26% $30.72

2014 Q3 9,458,793 653,880 164,619 9.24% $31.38

2014 Q4 9,418,793 640,998 42,081 8.41% $34.87

2015 Q1 9,446,430 589,875 66,172 7.98% $34.35

2015 Q2 10,109,725 1,070,609 182,561 12.21% $33.76

2015 Q3 10,257,625 1,192,565 121,673 12.29% $35.03

2015 Q4 10,484,922 769,552 460,460 9.80% $35.85

SOUTHWEST OVERALL SUBMARKET PERFORMANCE


40

SOUTHWEST SUBMARKET OFFICE RENTAL RATE PROJECTIONS

SOUTHWEST SUBMARKET OFFICE VACANCY RATE PROJECTIONS

5.0

6.4

7.8

9.2

10.6

12.0

0%

5%

10%

15%

20%

25%M

arke

t Siz

e (M

illio

ns o

f SF)

Tota

l Vac

ancy

Rat

e (%

)


1% Job Growth

3% Job Growth

$15

$20

$25

$30

$35

$40

Full

Serv

ice

Rent

al R

ates

($)


1% Job Growth

3% Job Growth

41

SOUTHWEST AUSTINLARGE OFFICE AVAILABILITY

Building Direct Available SF Sublease Available SF Total Available SF

1 3900 San Clemente 135,366 135,366

2 Encino Trace II 130,070 - 130,070

3 Rollingwood Center I & II 7,878 110,108 117,986

4 The Summit 1-5 52,939 - 52,939

5 3700 San Clemente 51,934 51,934

6 The Park on Barton Creek 1 - 42,527 42,527

7 The Park on Barton Creek 2 38,900 38,900

8 Rialto II 1,588 36,421 38,009

9 CityView Center - 24,478 24,478

10 Parkway at Oak Hill 1 & II 23,644 23,644

11 The Terrace 6 22,771 - 22,771

12 Barton Skyway II 21,435 - 21,435

WEST LAKE HILLS

BEE CAVE

BARTON CREEK

SOU

THW

EST PKWY

9

62

4

3

5

7

11

1

8

10

12


42

SOUTHWEST AUSTINOFFICE DEVELOPMENT

Building Total SF Percent Preleased Estimated Delivery Status

1 The Backyard - Buildings B, J, & H 171,450 0% Planned Planned

2 Lantana Ridge I 87,500 0% Planned Planned

3 Lantana Ridge II 87,500 0% Planned Planned

4 Regency Park 90,000 0% Planned Planned

5 Rollingwood Center III 107,000 0% Planned Planned

6 The Terrace 3 203,130 0% Planned Planned



SOU

THW

EST PKWY

1

6782

4

3

5

WEST LAKE HILLS

BEE CAVE

BARTON CREEK

Planned

43

AVAILABILITY SUMMARY SOUTHWEST CLASS A

Southwest Submarket AUSTIN, TXQ4 2015 CLASS A AVAILABILITY SUMMARY

FSW

Dimensional Place 1 6304 Bee Caves Rd

7 Floors 220,000 SF100% Leased$24.00 NNN$12.42 Op/Ex$36.42 Gross

FSW

Capital Ridge 320 Capital of Tx Hwy

7 floors216,511 SF 100% Leased

$27.00 - $30.00 NNN$10.56 Op/Ex

$37.56 - $40.56 Gross

7

6

5

4

3

2

1

FSW

Dimensional Place 26300 Bee Caves Rd


NSW

Four Barton Skyway1301 S Mopac Expy

5 Floors222,580 SF100% Leased

$25.50 - $26.00 NNN$12.86 Op/Ex

$38.36 - $38.86 Gross

2,429 SF

4,901 SF

NSW

Three Barton Skyway1221 S Mopac Expy


$25.50 - $26.00 NNN$13.70 Op/Ex

$39.20 - $39.70 Gross

15,796 SF

5,639 SF

NSW

Two Barton Skyway1601 S Mopac Expy


$25.50 - $26.00 NNN$13.79 Op/Ex

$39.29 - $39.79 Gross

3,596 SF

NSW

One Barton Skyway1501 S Mopac Expy


$25.50 - $26.00 NNN$13.40 Op/Ex

$38.90 - $39.40 Gross

6,026 SF

NSW

Barton Oaks Plaza V901 S Mopac Expy


$26.00 NNN$14.47 Op/Ex$40.47 Gross

NSW

Barton Oaks Plaza IV901 S Mopac Expy


$41.00 Gross

7,237 SF

NSW

Barton Oaks Plaza III901 S Mopac Expy


$26.50 NNN$14.59 Op/Ex$41.09 Gross

11,073 SF

NSW

Barton Oaks Plaza II901 S Mopac Expy


$26.50 NNN$15.56 Op/Ex$42.06 Gross

4,901 SF

NSW

Barton Oaks Plaza I901 S Mopac Expy


$27.00 NNN$15.98 Op/Ex$42.98 Gross

5

4

3

2

1

5

4

3

2

1

4

3

2

1

4

3

2

1

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

FSW

Encino Trace I5707 Southwest Pkwy

4 floors161,606 SF100% Leased$23.50 NNN$11.00 Op/Ex$34.50 Gross

42,671 SF

42,369 SF

12,782 SF

33,214 SF

FSW

Encino Trace II5707 Southwest Pkwy

4 floors158,137 SF18% Leased

$23.50 NNN$11.00 Op/Ex$34.50 Gross

FSW

Las Cimas II807 Las Cimas Pkwy

4 Floors156,069 SF100% Leased$26.00 NNN$13.83 Op/Ex$39.83 Gross

7,048 SF

FSW

Las Cimas III805 Las Cimas Pkwy


$26.00 NNN$13.93 Op/Ex$39.93 Gross

1,590 SF

FSW

Las Cimas IV900 S Capital of Tx Hwy


6,726 SF

FSW

Las Cimas I804 Las Cimas Pkwy


$24.50 NNN$14.29 Op/Ex$38.79 Gross

NSW

Mira Vista2705 Bee Caves Rd


21,265 SF

21,262 SF

NSW

The Park on Barton Creek One

3711 S Mopac Expy5 floors

102,608 SF100% Leased$24.50 NNN$13.33 Op/Ex$37.83 Gross

20,228 SF

18,762 SF

NSW

The Park on Barton Creek Two


102,587 SF62% Leased

$24.50 NNN$13.33 Op/Ex$37.83 Gross

9,980 SF

3,406 SF

FSW

5000 Plaza on the Lake5000 Plaza on the

Lake Dr.3 Floors


8,936 SF

FSW

Plaza on the Lake I 5001 Plaza on the

Lake Dr.3 Floors


$26.50 NNN$15.35 Op/Ex$41.85 Gross

FSW

Plaza on the Lake II4801 Plaza on the

Lake Dr.3 Floors


4

3

2

1

5

4

3

2

1

FSW

3600 San Clemente B3600 N Capital of

Tx Hwy3 Floors

90,267 Sf100% Leased$26.50 NNN$15.63 Op/Ex$42.13 Gross

51,534 SF

FSW

3700 San Clemente3700 N Capital of

Tx Hwy5 Floors


$29.50 NNN$13.27 Op/Ex$42.77 Gross

11,874 SF

50,798 SF

50,798 SF

21,896 SF

FSW


Tx Hwy5 Floors


$25.00 NNN$13.81 Op/Ex$38.81 Gross

52,939 SF

FSW

The Summit at Lantana - Bldg 300

7171 Southwest Pkwy4 Floors


$24.00 NNN$13.06 Op/Ex$37.06 Gross

FSW




6,354 SF

2,559 SF

2,042 SF

NSW

The Terrace I2600 Via Fortuna


$24.50 NNN$15.99 Op/Ex$40.49 Gross

NSW

The Terrace II2700 Via Fortuna


5,725 SF

9,716 SF

2,974 SF

4,356 SF

NSW

The Terrace VI2901 Via Fortuna


$27.50 - $28.00 NNN$15.92 Op/Ex

$43.42 - $43.92 Gross

2,052 SF

NSW

The Terrace VII2801 Via Fortuna


$27.50 - $28.00 NNN$15.99 Op/Ex

$43.49 - $43.99 Gross

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

4

3

2

1

5

4

3

2

1

6

5

4

3

2

1

6

5

4

3

2

1

7,704 SF

7,878 SF

NSW

Rollingwood Center II2500 Bee Caves Rd


$29.00 NNN$12.00 Op/Ex$41.00 Gross

3

2

1

4

3

2

1

NSW

Rollingwood Center I2500 Bee Caves Rd


37,883 SF

37,883 SF

27,276 SF

SUBLEASE SPACE

AVAILABLESPACE

4

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

5

4

3

2

1

5

4

3

2

1

44Southwest Submarket AUSTIN, TXQ4 2015 CLASS A AVAILABILITY SUMMARY

FSW

Dimensional Place 1 6304 Bee Caves Rd


FSW

Capital Ridge 320 Capital of Tx Hwy

7 floors216,511 SF 100% Leased

$27.00 - $30.00 NNN$10.56 Op/Ex

$37.56 - $40.56 Gross

7

6

5

4

3

2

1

FSW

Dimensional Place 26300 Bee Caves Rd


NSW

Four Barton Skyway1301 S Mopac Expy


$25.50 - $26.00 NNN$12.86 Op/Ex

$38.36 - $38.86 Gross

2,429 SF

4,901 SF

NSW

Three Barton Skyway1221 S Mopac Expy


$25.50 - $26.00 NNN$13.70 Op/Ex

$39.20 - $39.70 Gross

15,796 SF

5,639 SF

NSW

Two Barton Skyway1601 S Mopac Expy


$25.50 - $26.00 NNN$13.79 Op/Ex

$39.29 - $39.79 Gross

3,596 SF

NSW

One Barton Skyway1501 S Mopac Expy


$25.50 - $26.00 NNN$13.40 Op/Ex

$38.90 - $39.40 Gross

6,026 SF

NSW

Barton Oaks Plaza V901 S Mopac Expy


$26.00 NNN$14.47 Op/Ex$40.47 Gross

NSW

Barton Oaks Plaza IV901 S Mopac Expy


$41.00 Gross

7,237 SF

NSW

Barton Oaks Plaza III901 S Mopac Expy


$26.50 NNN$14.59 Op/Ex$41.09 Gross

11,073 SF

NSW

Barton Oaks Plaza II901 S Mopac Expy


$26.50 NNN$15.56 Op/Ex$42.06 Gross

4,901 SF

NSW

Barton Oaks Plaza I901 S Mopac Expy


$27.00 NNN$15.98 Op/Ex$42.98 Gross

5

4

3

2

1

5

4

3

2

1

4

3

2

1

4

3

2

1

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

FSW

Encino Trace I5707 Southwest Pkwy

4 floors161,606 SF100% Leased$23.50 NNN$11.00 Op/Ex$34.50 Gross

42,671 SF

42,369 SF

12,782 SF

33,214 SF

FSW

Encino Trace II5707 Southwest Pkwy

4 floors158,137 SF18% Leased

$23.50 NNN$11.00 Op/Ex$34.50 Gross

FSW

Las Cimas II807 Las Cimas Pkwy


7,048 SF

FSW

Las Cimas III805 Las Cimas Pkwy


$26.00 NNN$13.93 Op/Ex$39.93 Gross

1,590 SF

FSW

Las Cimas IV900 S Capital of Tx Hwy


6,726 SF

FSW

Las Cimas I804 Las Cimas Pkwy


$24.50 NNN$14.29 Op/Ex$38.79 Gross

NSW

Mira Vista2705 Bee Caves Rd


21,265 SF

21,262 SF

NSW

The Park on Barton Creek One



20,228 SF

18,762 SF

NSW

The Park on Barton Creek Two



$24.50 NNN$13.33 Op/Ex$37.83 Gross

9,980 SF

3,406 SF

FSW

5000 Plaza on the Lake5000 Plaza on the

Lake Dr.3 Floors


8,936 SF

FSW

Plaza on the Lake I 5001 Plaza on the

Lake Dr.3 Floors


$26.50 NNN$15.35 Op/Ex$41.85 Gross

FSW

Plaza on the Lake II4801 Plaza on the

Lake Dr.3 Floors


4

3

2

1

5

4

3

2

1

FSW

3600 San Clemente B3600 N Capital of

Tx Hwy3 Floors

90,267 Sf100% Leased$26.50 NNN$15.63 Op/Ex$42.13 Gross

51,534 SF

FSW


Tx Hwy5 Floors


$29.50 NNN$13.27 Op/Ex$42.77 Gross

11,874 SF

50,798 SF

50,798 SF

21,896 SF

FSW


Tx Hwy5 Floors


$25.00 NNN$13.81 Op/Ex$38.81 Gross

52,939 SF

FSW




$24.00 NNN$13.06 Op/Ex$37.06 Gross

FSW




6,354 SF

2,559 SF

2,042 SF

NSW

The Terrace I2600 Via Fortuna


$24.50 NNN$15.99 Op/Ex$40.49 Gross

NSW

The Terrace II2700 Via Fortuna


5,725 SF

9,716 SF

2,974 SF

4,356 SF

NSW

The Terrace VI2901 Via Fortuna


$27.50 - $28.00 NNN$15.92 Op/Ex

$43.42 - $43.92 Gross

2,052 SF

NSW

The Terrace VII2801 Via Fortuna


$27.50 - $28.00 NNN$15.99 Op/Ex

$43.49 - $43.99 Gross

3

2

1

5

4

3

2

1

5

4

3

2

1

5

4

3

2

1

4

3

2

1

5

4

3

2

1

6

5

4

3

2

1

6

5

4

3

2

1

7,704 SF

7,878 SF

NSW

Rollingwood Center II2500 Bee Caves Rd


$29.00 NNN$12.00 Op/Ex$41.00 Gross

3

2

1

4

3

2

1

NSW

Rollingwood Center I2500 Bee Caves Rd


37,883 SF

37,883 SF

27,276 SF

SUBLEASE SPACE

AVAILABLESPACE

4

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

3

2

1

5

4

3

2

1

5

4

3

2

1

Long Term Performance of Submarkets 47

Long Term Performance: CBD vs. Suburban 48

Central Business District

Competitive Set Performance 49

Competitive Set Buildings 50

Northwest Submarket


Micromarket Performance 52

Competitive Set Buildings by Micromarket 55

Southwest Submarket


Micromarket Performance 59

Competitive Set Buildings by Micromarket 61

TheAppendix

University Park Conference Room; Photo by Third Eye Photography

47

CITYWIDE AVAILABLE SF VS. VACANCY RATE CBD AVAILABLE SF VS. VACANCY RATE

NORTHWEST AVAILABLE SF VS. VACANCY RATE SOUTHWEST AVAILABLE SF VS. VACANCY RATE

LONG TERM PERFORMANCEOF SUBMARKETS

CITYWIDE AVERAGE CLASS A ASKING RATES ABSORPTION & OCCUPANCY RATE*Absorption includes sublease space.

Numbers based on CBRE statistics.

$20

$25

$30

$35

$40

$45

$50

Full

Serv

ice

Rent

al R

ate

CBD Northwest Southwest Citywide

0%

5%

10%

15%

20%

25%

30%

0

2

4

6

8

10

12

Dire

ct &

Sub

leas

e Va

canc

y Ra

te

Ava

ilabi

lity

(Mill

ions

of S

F)

Citywide Direct Availability Citywide Sublease Availability Citywide Vacancy Rate

65%

70%

75%

80%

85%

90%

95%

-2

-1

0

1

2

3

4

Dire

ct &

Sub

leas

e O

ccup

ancy

Rat

e

Year

Ove

r Yea

r Dire

ct &

Sub

leas

e A

bsor

ptio

n (M

illio

ns o

f SF)

CBD Northwest Southwest Citywide Occupancy Rate

0%

6%

12%

18%

24%

30%

0

500

1,000

1,500

2,000

2,500

Dire

ct &

Sub

leas

e Va

canc

y Ra

te

Ava

ilabi

lity

(Tho

usan

ds o

f SF)

CBD Direct Availability CBD Sublease AvailabilityCBD Vacancy Rate Citywide Vacancy Rate

0%

8%

16%

24%

32%

40%

0

1

2

3

4

5

Dire

ct &

Sub

leas

e Va

canc

y Ra

te

Ava

ilabi

lity

(Mill

ions

of S

F)

Northwest Direct Availability Northwest Sublease AvailabilityNorthwest Vacancy Rate Citywide Vacancy Rate

0%

6%

12%

18%

24%

30%

0

500

1,000

1,500

2,000

2,500

Dire

ct &

Sub

leas

e Va

canc

y Ra

te

Ava

ilabi

lity

(Tho

usan

ds o

f SF)

Southwest Direct Availability Southwest Sublease AvailabilitySouthwest Vacancy Rate Citywide Vacancy Rate

48

AVERAGE CLASS A ASKING RATES DIRECT & SUBLEASE VACANCY RATES

DIRECT & SUBLEASE AVAILABILITY SF UNDER CONSTRUCTION

LONG TERM PERFORMANCECBD VS. SUBURBANNumbers based on CBRE statistics.

0%

5%

10%

15%

20%

25%

30%

Vaca

ncy

Rate

CBD Vacancy Rate Suburban Vacancy Rate Citywide Vacancy Rate

0

1

2

3

4

Are

a U

nder

Con

struc

tion

(Mill

ions

of S

F)

CBD Northwest Southwest

$0

$10

$20

$30

$40

$50

Full

Serv

ice

Rent

al R

ate

CBD Suburban Citywide

0%

5%

10%

15%

20%

25%

30%

0

2

4

6

8

10

12

Dire

ct &

Sub

leas

e Va

canc

y Ra

te

Dire

ct &

Sub

leas

e A

vaila

bilit

y (M

illio

ns o

f SF)

CBD Suburban Citywide Vacancy Rate

49

CENTRAL BUSINESS DISTRICTCOMPETITIVE SET PERFORMANCE

AVAILABLE SF VS. VACANCY RATE NET ABSORPTION

VACANCY VS. RENTAL RATES

0%

4%

8%

12%

16%

0

200

400

600

800

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)

Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate88%

89%

90%

91%

92%

93%

94%

95%

96%

(100)

0

100

200

300

400

500

600

700

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


4%

6%

8%

10%

12%

14%

$43

$45

$47

$49

$51

$53

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate


Quarter Net Rentable Area

Direct Available SF

Sublease Available SF Net Absorption* Direct & Sublease

Vacancy RateAverage Class A Full Service Rental Rate

2014 Q1 5,637,136 618,961 4,210 86,100 11.05% $44.03

2014 Q2 5,637,136 576,465 25,189 21,517 10.67% $44.81

2014 Q3 5,827,916 483,868 81,356 227,210 9.70% $45.13

2014 Q4 5,827,916 503,540 69,160 (7,476) 9.83% $46.49

2015 Q1 6,344,401 421,858 55,200 612,127 7.52% $47.28

2015 Q2 6,466,952 479,092 40,409 80,108 8.03% $47.74

2015 Q3 6,466,952 370,193 38,822 110,486 6.32% $48.70

2015 Q4 6,471,834 237,718 55,748 120,431 4.53% $52.03

CBD COMPETITIVE SET

*Absorption includes sublease space

50

Building Name Net Rentable Area Direct Available SF

Sublease Available SF

Asking Rental Rate

Estimated OpEx

100 Congress 411,536 20,182 ↓ 2,177 ↑ $37.00 $20.84 ↑

300 West 6th 454,225 1,421 0 ↓ $36.00 $21.75 ↑

301 Congress 418,338 17,934 ↓ 0 $35.00 ↑ $17.95

400 West 15th 281,196 8,627 21,224 ↑ $24.50 $15.92

501 Congress 122,551 18,922 0 $32.00 $21.27 ↑

515 Congress 263,058 7,568 ↓ 4,415 ↑ $32.00 $18.05 ↑

600 Congress Ave. 503,951 13,187 ↓ 0 $33.00 $15.80

816 Congress 434,081 24,118 ↑ 0 $29.00 $17.59 ↑

Austin Centre 326,335 14,471 ↓ 10,874 ↑ $28.00 $17.65 ↑

Capitol Center 164,044 7,920 ↓ 7,245 ↑ $28.00 $19.51 ↑

Capitol Tower 172,837 0 0 $29.00 $16.52 ↑

Chase Tower 389,503 16,711 0 $31.00 $19.84 ↑

Colorado Tower 373,334 0 0 $34.00 $16.83 ↑

Frost Bank Tower 535,078 0 ↓ 0 $38.00 $21.75 ↑

IBC Bank Plaza 194,749 0 4,900 ↑ $30.00 $21.00 ↑

Lavaca Plaza 118,635 0 0 $32.50 ↑ $21.74 ↑

Littlefield Building 109,779 30,424 1,800 ↑ $29.00 $15.96 ↑

One Congress Plaza 518,385 44,055 ↓ 3,113 ↑ $40.00 ↑ $17.77 ↑

San Jacinto Center 406,279 0 ↓ 0 $40.00 ↑ $18.75 ↑

Scarbrough Building 130,789 12,178 0 $32.00 ↑ $17.96 ↑

Seaholm 143,151 0 0 $28.00 $12.00

CBD COMPETITIVE SET BUILDINGS


Direct Available SF



2014 Q1 5,637,136 618,961 4,210 86,100 11.05% $44.03

2014 Q2 5,637,136 576,465 25,189 21,517 10.67% $44.81

2014 Q3 5,827,916 483,868 81,356 227,210 9.70% $45.13

2014 Q4 5,827,916 503,540 69,160 (7,476) 9.83% $46.49

2015 Q1 6,344,401 421,858 55,200 612,127 7.52% $47.28

2015 Q2 6,466,952 479,092 40,409 80,108 8.03% $47.74

2015 Q3 6,466,952 370,193 38,822 110,486 6.32% $48.70

2015 Q4 6,471,834 237,718 55,748 120,431 4.53% $52.03

51

NORTHWEST SUBMARKETCOMPETITIVE SET PERFORMANCE



0%

4%

8%

12%

16%

0

400

800

1,200

1,600

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


87%

88%

89%

90%

91%

92%

(200)

0

200

400

600

800

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


5%

7%

9%

11%

13%

15%

$30

$31

$32

$33

$34

$35

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 12,293,184 1,050,027 135,810 56,257 9.65% $31.21

2014 Q2 12,242,690 1,030,332 246,257 (141,246) 10.43% $31.61

2014 Q3 12,389,252 911,833 321,739 189,579 9.96% $32.12

2014 Q4 12,845,611 1,197,426 320,587 171,918 11.82% $32.93

2015 Q1 12,931,909 992,203 292,334 319,774 9.93% $33.39

2015 Q2 13,120,924 897,208 284,035 292,309 9.00% $33.83

2015 Q3 13,310,232 1,129,335 287,248 (46,032) 10.64% $33.55

2015 Q4 13,831,583 1,135,749 235,206 566,979 9.91% $34.30

NORTHWEST COMPETITIVE SET


52


Direct Available SF



2014 Q1 12,293,184 1,050,027 135,810 56,257 9.65% $31.21

2014 Q2 12,242,690 1,030,332 246,257 (141,246) 10.43% $31.61

2014 Q3 12,389,252 911,833 321,739 189,579 9.96% $32.12

2014 Q4 12,845,611 1,197,426 320,587 171,918 11.82% $32.93

2015 Q1 12,931,909 992,203 292,334 319,774 9.93% $33.39

2015 Q2 13,120,924 897,208 284,035 292,309 9.00% $33.83

2015 Q3 13,310,232 1,129,335 287,248 (46,032) 10.64% $33.55

2015 Q4 13,831,583 1,135,749 235,206 566,979 9.91% $34.30

ARBORETUM/DOMAINMICROMARKET PERFORMANCE



0%

3%

6%

9%

12%

0

200

400

600

800

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


85%

87%

89%

91%

93%

95%

(100)

0

100

200

300

400

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


3%

5%

7%

9%

11%

$32

$33

$34

$35

$36

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 6,106,452 433,079 55,206 (18,356) 8.00% $32.55

2014 Q2 6,106,452 476,360 109,332 (97,407) 9.59% $33.04

2014 Q3 6,253,014 401,651 157,535 173,068 8.94% $33.66

2014 Q4 6,474,987 445,544 121,157 214,458 8.75% $34.38

2015 Q1 6,553,774 447,850 71,595 126,043 7.93% $34.46

2015 Q2 6,742,789 389,248 63,891 255,321 6.72% $34.77

2015 Q3 6,719,697 407,169 76,078 (53,200) 7.19% $34.38

2015 Q4 6,938,611 322,314 93,200 286,647 5.99% $34.82

ARBORETUM/DOMAIN COMPETITIVE SET


53

SHEPHERD MOUNTAIN/2222MICROMARKET PERFORMANCE



0%

6%

12%

18%

24%

0

175

350

525

700

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


75%

79%

83%

87%

91%

95%

(40)

0

40

80

120

160

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


0%

8%

16%

24%

$30

$32

$34

$36

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 2,453,857 276,447 29,559 8,688 12.47% $31.43

2014 Q2 2,453,857 241,923 46,956 17,127 11.77% $31.95

2014 Q3 2,453,857 211,437 92,007 (14,565) 12.37% $32.28

2014 Q4 2,688,442 389,788 127,233 21,008 19.23% $33.10

2015 Q1 2,690,750 207,238 179,538 132,553 14.37% $34.17

2015 Q2 2,690,750 181,807 152,245 52,724 12.41% $34.45

2015 Q3 2,690,750 193,874 135,899 4,279 12.26% $34.55

2015 Q4 2,690,835 173,907 79,703 76,248 9.42% $35.16

SHEPHERD MOUNTAIN/2222 COMPETITIVE SET


54


Direct Available SF



2014 Q1 2,453,857 276,447 29,559 8,688 12.47% $31.43

2014 Q2 2,453,857 241,923 46,956 17,127 11.77% $31.95

2014 Q3 2,453,857 211,437 92,007 (14,565) 12.37% $32.28

2014 Q4 2,688,442 389,788 127,233 21,008 19.23% $33.10

2015 Q1 2,690,750 207,238 179,538 132,553 14.37% $34.17

2015 Q2 2,690,750 181,807 152,245 52,724 12.41% $34.45

2015 Q3 2,690,750 193,874 135,899 4,279 12.26% $34.55

2015 Q4 2,690,835 173,907 79,703 76,248 9.42% $35.16

FAR NORTHWESTMICROMARKET PERFORMANCE



0%

6%

12%

18%

24%

0

200

400

600

800

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


80%

84%

88%

92%

96%

(100)

0

100

200

300

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


0%

6%

12%

18%

24%

$26

$28

$30

$32

$34

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 3,732,875 340,501 51,045 65,925 10.49% $28.88

2014 Q2 3,682,381 312,049 89,969 (60,966) 10.92% $29.02

2014 Q3 3,682,381 298,745 72,197 31,076 10.07% $29.40

2014 Q4 3,682,182 362,094 72,197 (63,548) 11.79% $30.26

2015 Q1 3,687,385 337,115 41,201 61,178 10.26% $30.93

2015 Q2 3,687,385 326,153 67,899 (15,736) 10.69% $31.66

2015 Q3 3,899,785 528,292 75,271 2,889 15.48% $31.42

2015 Q4 4,202,137 639,528 62,303 204,084 16.70% $32.77

FAR NORTHWEST COMPETITIVE SET


55

ARBORETUM/DOMAIN MICROMARKET COMPETITIVE SET BUILDINGS

Building Name Net Rentable Area

Direct Available SF


Asking Rental Rate

Estimated OpEx

3307 Northland 98,888 552 ↓ 0 $17.50 ↑ $11.05 ↑

9500 Arboretum 182,331 0 18,319 $22.00 $13.00

Arboretum Atrium 90,280 2,515 0 $21.00 $14.38 ↑

Arboretum Plaza One 146,347 0 0 $27.00 $15.72 ↑

Arboretum Plaza Two 98,828 0 0 $27.00 $15.72 ↑

Arboretum Point 150,033 0 0 $23.00 $13.44

Atrium Office Centre 199,858 20,340 ↓ 0 $17.50 $7.89

Austin Oaks 445,240 13,254 3,981 $18.00 $10.90

Balcones Centre 74,876 3,919 0 $24.00 $9.86

Braker Pointe I 77,454 15,370 0 $22.50 ↑ $13.16

Braker Pointe II 103,114 1,953 5,162 ↓ $22.50 ↑ $12.89

Braker Pointe III 196,380 0 0 $25.00 $12.84

Colina West 69,299 203 ↑ 1,150 ↑ $21.00 ↑ $10.71

Domain 2 143,331 0 0 $29.00 $11.00

Domain 3 179,006 0 20,816 $25.50 $10.34

Domain 4 152,012 0 0 $24.00 $11.16

Domain 7 221,973 13,000 ↓ 0 $28.00 $11.33

Domain Gateway 173,962 0 0 $21.00 $14.95

Great Hills Corporate Center I 59,228 3,601 ↑ 0 $18.50 ↑ $11.52 ↑

Great Hills Corporate Center II 60,429 3,593 ↑ 0 $18.50 ↑ $11.52 ↑

Great Hills Corporate Center III 56,422 8,164 ↓ 0 $18.50 ↑ $11.52 ↑

Great Hills Plaza 139,252 19,458 ↑ 0 $20.00 $12.93 ↑

Greystone Plaza 78,248 8,095 ↓ 0 $18.00 ↑ $12.63

Heritage Plaza 74,736 11,798 0 $28.00 $11.29

Kaleido I & II 73,149 7,522 ↓ 0 $16.50 ↑ $9.93 ↓

Lakeview Plaza 120,956 6,266 0 $20.00 $13.10 ↑

Northpoint Centre I & II 151,126 1,527 ↓ 0 $22.00 $11.22

Offices at the Domain Bldg 1 92,955 7,428 0 $26.50 $15.49 ↑

Offices at the Domain Bldg 2 75,509 0 0 $26.50 $14.75 ↑

One Far West Plaza 70,642 4,123 ↓ 0 $18.00 ↑ $12.87 ↑

Park North I & II 133,568 8,696 ↑ 0 $18.00 $11.83

Plaza 7000 155,076 17,983 ↓ 0 $26.00 ↑ $13.82 ↑

Prominent Pointe I 150,376 28,979 ↑ 0 $24.50 $13.65

Prominent Pointe II 102,567 0 0 ↓ $24.50 $14.70

Quarry Lake Business Center 117,512 5,048 0 $20.00 $13.75 ↑

Quarry Oaks I 165,435 7,155 0 $24.00 $11.82

Quarry Oaks II 126,000 0 0 $25.00 $11.48

Quarry Oaks III 137,615 0 11,814 N/A TBD

Reunion Park 118,142 15,903 ↑ 0 $19.00 ↓ $11.16

Stone Creek I 76,860 0 0 $22.00 $0.00

Stone Creek II 162,723 5,077 ↓ 0 $22.00 $12.60

Stone Creek Park 77,185 0 0 $20.00 $13.45

Stonebridge Plaza I 193,200 3,794 0 $26.00 $14.97 ↑

Stonebridge Plaza II 192,864 10,898 ↑ 0 $26.00 $15.04 ↑

Stratum Executive Center Bldg A 61,000 4,055 ↓ 0 ↓ $21.00 ↑ $14.12 ↑

Stratum Executive Center Bldg B 61,000 0 0 ↓ $21.00 ↑ $14.12 ↑

56


Direct Available SF


Asking Rental Rate

Estimated OpEx

Stratum Executive Center Bldg C 61,000 6,175 ↓ 0 $21.00 ↑ $14.12 ↑

Stratum Executive Center Bldg D 61,000 0 0 $21.00 ↑ $14.12 ↑

The Campus at Arboretum 1 60,059 2,733 ↓ 0 $23.00 ↑ $14.13 ↑

The Campus at Arboretum 2 33,135 0 ↓ 0 $23.00 ↑ $13.60 ↓

The Campus at Arboretum 3 32,765 0 0 $23.00 ↑ $14.53

The Campus at Arboretum 4 85,916 6,852 ↑ 0 $23.00 ↑ $14.17

The Campus at Arboretum 5 105,000 0 ↓ 0 $23.00 ↑ $13.94 ↓

The Park at 8300 N. MoPac 93,317 6,911 31,958 ↑ $23.00 $13.40

UFCU Plaza 246,869 28,695 ↑ 0 $20.00 $12.15

Westech 360 Bldgs 1-4 175,529 8,579 ↓ 0 $20.00 $13.60 ↑

Westpark Office 1-4 97,034 2,100 ↓ 0 $18.50 ↓ $10.89 ↑


Direct Available SF


Asking Rental Rate

Estimated OpEx

Bridgepoint Plaza I 105,333 0 0 $23.50 $12.81

Bridgepoint Plaza II 72,640 10,082 ↑ 0 $23.50 $13.54 ↑

Bridgepoint Square 1 84,692 6,636 0 $23.00 $13.54 ↑

Bridgepoint Square 2 92,459 9,359 ↓ 0 $23.75 ↑ $12.43

Bridgepoint Square 3 78,352 0 0 $23.75 ↑ $12.43



Champion Office Park I & II 230,000 0 0 $26.50 $11.00

Four Points Centre I & II 192,396 0 0 $23.50 $12.62

Ladera Bend 1 56,466 0 0 $21.50 $16.34

Ladera Bend 2 45,732 0 ↓ 0 $21.50 $13.88

Ladera Bend 3 56,196 0 0 ↓ $21.50 $13.83

Lakewood Center I 47,389 0 45,020 $22.00 $13.20

Lakewood Center II 44,611 0 13,206 $22.00 $13.20

Lakewood on the Park B 102,086 16,556 ↑ 0 $19.50 $9.60

Lakewood on the Park C 78,596 12,808 0 $19.50 $11.80

Millennium Building 125,612 0 0 $24.00 ↑ $12.58 ↑

Park Centre Bldg 1 89,822 3,970 ↓ 0 $18.00 $12.60 ↑

Park Centre Bldg 2 35,095 18,730 0 $18.00 $12.60 ↑

Park Centre Bldg 3 78,270 57,562 0 $18.00 $12.60 ↑

Reserve at Bull Creek A 43,867 6,694 ↓ 0 $18.00 $12.28

Reserve at Bull Creek B 43,713 0 0 $20.00 $10.86

Reserve at Bull Creek C 43,695 0 0 $20.00 $11.44

River Place Corporate Park I 76,529 0 0 $22.00 ↑ $12.79

River Place Corporate Park II 114,491 4,695 ↓ 0 $22.00 ↑ $12.43

River Place Corporate Park III 113,465 4,339 0 $22.00 ↑ $12.50

River Place Corporate Park IV 87,639 10,538 ↑ 0 $22.00 ↑ $13.53

River Place Corporate Park V 67,601 0 ↓ 0 $22.00 ↑ $12.01

River Place Corporate Park VI 62,037 0 0 $22.00 ↑ $13.33

River Place Corporate Park VII 69,119 0 21,477 $22.00 ↑ $14.15

Shepherd Mountain Plaza 100,937 0 0 $33.00 $12.49 ↑

Stone Cliff 66,027 11,938 0 $18.00 $12.73

SHEPHERD MOUNTAIN/2222 MICROMARKET COMPETITIVE SET BUILDINGS

57


Direct Available SF


Asking Rental Rate

Estimated OpEx

Amber Oaks A 78,164 0 0 ↓ $19.50 ↑ $10.94

Amber Oaks B 44,184 0 0 $19.50 ↑ $8.30

Amber Oaks C 44,184 0 0 $19.50 ↑ $8.60

Amber Oaks D 28,733 0 0 $19.50 ↑ $10.45

Amber Oaks E 63,111 0 0 $19.50 ↑ $8.03

Amber Oaks F 78,034 79,732 ↑ 0 $19.50 ↑ $10.09

Amber Oaks G 106,455 4,572 ↓ 0 ↓ $19.50 ↑ $10.01

Amber Oaks H 101,045 0 0 $19.50 ↑ $10.93

Amber Oaks I 50,313 10,828 0 $19.50 ↑ $11.63

Amber Oaks J 50,111 6,245 33,147 $19.50 ↑ $10.90

Aspen Lake One 204,940 0 0 $18.50 $13.26

Aspen Lake Two 129,000 0 0 $24.50 $10.00

Crossings at Lakeline I 114,726 4,078 10,445 ↑ $21.50 $10.98

Crossings at Lakeline II 118,046 10,652 ↑ 2,189 ↑ $21.50 $11.10

Paloma Ridge A 106,200 106,200 0 $18.00 $9.50

Paloma Ridge B 106,200 106,200 0 $18.00 $9.50

Parmer Business Park 7, 8, 9 123,731 0 0 $18.50 $5.60

Parmer Business Park D, E, F 107,283 0 0 $18.50 $5.60

Pecan Park I 136,444 0 0 $21.50 $10.72

Pecan Park II 136,245 0 0 $19.50 $9.45

Research Park Place 7 125,701 3,790 0 $22.00 $11.55

Research Park Place 8 125,700 33,518 0 $22.00 $11.55

Research Park Plaza I 136,068 11,747 0 $23.00 ↑ $14.98 ↑

Research Park Plaza II 135,813 0 0 $23.00 ↑ $14.98 ↑

Research Park Plaza III 173,530 0 0 $23.00 $13.08

Research Park Plaza IV 184,114 11,342 0 $23.00 $13.08

Research Park Plaza V 172,854 121,229 0 $24.00 $11.06

Riata Corporate Park Bldg 2 63,372 7,054 ↓ 0 $22.00 $13.30 ↑

Riata Corporate Park Bldg 3 63,849 0 0 $22.00 $13.30 ↑

Riata Corporate Park Bldg 4 93,737 93,737 0 $22.00 $13.30 ↑

Riata Corporate Park Bldg 5 93,828 23,783 0 $22.00 $13.30 ↑



Riata Corporate Park Bldg 8 93,718 0 16,522 $22.00 $13.30 ↑


Riata Crossing Bldg 1 81,775 0 0 N/A N/A




Tower of the Hills/Tower Point 175,802 4,821 ↓ 0 $25.00 ↑ $12.85 ↑

FAR NORTHWEST MICROMARKET COMPETITIVE SET BUILDINGS

58

SOUTHWESTCOMPETITIVE SET PERFORMANCE



0%

3%

6%

9%

12%

15%

0

200

400

600

800

1,000

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


85%

87%

89%

91%

93%

95%

(200)

0

200

400

600

800

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


4%

6%

8%

10%

12%

$32

$34

$36

$38

$40

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 7,102,874 480,177 202,095 (37,795) 9.61% $34.71

2014 Q2 7,102,874 387,913 208,978 85,381 8.40% $35.06

2014 Q3 7,102,874 294,587 169,604 132,700 6.54% $35.47

2014 Q4 7,102,547 386,333 182,477 (104,946) 8.01% $36.07

2015 Q1 7,100,750 399,919 188,613 (21,519) 8.29% $36.98

2015 Q2 7,782,464 428,605 213,812 627,829 8.25% $37.55

2015 Q3 7,949,325 353,625 264,345 191,308 7.77% $37.61

2015 Q4 8,158,872 634,326 246,492 (53,301) 10.80% $38.15

SOUTHWEST COMPETITIVE SET


59

NEAR SOUTHWESTMICROMARKET PERFORMANCE



0%

4%

8%

12%

16%

0

100

200

300

400

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


84%

88%

92%

96%

100%

(100)

0

100

200

300

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


6%

9%

12%

15%

18%

$35

$37

$39

$41

$43

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 2,712,851 209,356 143,888 (89,075) 13.02% $37.18

2014 Q2 2,712,851 191,624 165,931 (4,311) 13.18% $37.40

2014 Q3 2,712,851 174,207 126,557 56,791 11.09% $37.59

2014 Q4 2,713,137 158,703 124,248 18,099 10.43% $38.03

2015 Q1 2,711,340 143,863 125,110 12,181 9.92% $39.26

2015 Q2 2,925,937 110,815 101,710 271,045 7.26% $39.49

2015 Q3 2,925,937 105,532 175,528 (68,535) 9.61% $39.84

2015 Q4 2,925,937 149,170 165,733 (33,843) 10.76% $40.59

NEAR SOUTHWEST COMPETITIVE SET


60

FAR SOUTHWESTMICROMARKET PERFORMANCE



0%

3%

6%

9%

12%

0

150

300

450

600

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Ava

ilabi

lity

(Tho

usan

ds o

f SF)


88%

91%

94%

97%

100%

(150)

0

150

300

450

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Occ

upan

cy R

ate

Abs

orpt

ion

(Tho

usan

ds o

f SF)


0%

4%

8%

12%

16%

$30

$32

$34

$36

$38

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Vaca

ncy

Rate

Rent

al R

ate



Direct Available SF



2014 Q1 4,390,023 270,821 58,207 51,280 7.49% $33.19

2014 Q2 4,390,023 196,289 43,047 89,692 5.45% $33.62

2014 Q3 4,390,023 120,380 43,047 75,909 3.72% $34.16

2014 Q4 4,389,410 227,630 58,229 (123,045) 6.51% $34.86

2015 Q1 4,389,410 256,056 63,503 (33,700) 7.28% $35.57

2015 Q2 4,856,527 317,790 112,102 356,784 8.85% $36.39

2015 Q3 5,023,388 248,093 88,817 259,843 6.71% $36.31

2015 Q4 5,232,935 485,156 80,759 (19,458) 10.81% $36.75

FAR SOUTHWEST COMPETITIVE SET



Direct Available SF



2014 Q1 2,712,851 209,356 143,888 (89,075) 13.02% $37.18

2014 Q2 2,712,851 191,624 165,931 (4,311) 13.18% $37.40

2014 Q3 2,712,851 174,207 126,557 56,791 11.09% $37.59

2014 Q4 2,713,137 158,703 124,248 18,099 10.43% $38.03

2015 Q1 2,711,340 143,863 125,110 12,181 9.92% $39.26

2015 Q2 2,925,937 110,815 101,710 271,045 7.26% $39.49

2015 Q3 2,925,937 105,532 175,528 (68,535) 9.61% $39.84

2015 Q4 2,925,937 149,170 165,733 (33,843) 10.76% $40.59

61

NEAR SOUTHWEST MICROMARKET COMPETITIVE SET BUILDINGS



Asking Rental Rate

Estimated OpEx

Barton Creek Plaza I 72,974 9,617 ↓ 0 $23.00 ↑ $13.65 ↑

Barton Creek Plaza II 64,718 0 ↓ 0 $23.00 $11.69

Barton Creek Plaza III 64,842 0 ↓ 0 $23.00 $11.83

Barton Oaks Plaza I 99,404 4,901 ↓ 0 $27.00 $15.98 ↑

Barton Oaks Plaza II 116,368 11,073 0 $26.50 ↑ $15.56 ↑

Barton Oaks Plaza III 121,467 7,237 0 $26.50 ↑ $14.59 ↑

Barton Oaks Plaza IV 112,000 0 0 $41.00 ↑ $14.73 ↑

Barton Oaks Plaza V 119,549 6,026 ↑ 0 ↓ $26.00 $14.47 ↑

Barton Skyway I 195,324 3,596 ↑ 3,596 ↑ $26.00 ↑ $13.40

Barton Skyway II 195,639 21,435 ↑ 0 $26.00 ↑ $13.79

Barton Skyway III 173,302 7,330 ↑ 4,901 ↑ $26.00 ↑ $13.70

Barton Skyway IV 222,580 0 0 $26.00 ↑ $12.86

Centre I 39,903 0 0 $21.00 $12.50

Centre II 54,610 0 0 $19.50 $11.82

Mira Vista 121,147 0 0 $27.50 ↑ $14.02 ↓

Overlook at Gaines Ranch 50,725 0 0 $26.50 $14.17

Rollingwood Center I & II 214,587 7,878 110,108 ↑ $29.00 $12.00

Spyglass Point 58,576 0 0 $22.00 ↑ $13.45

The Park on Barton Creek 1 102,608 0 42,527 $24.50 $13.33

The Park on Barton Creek 2 102,587 38,900 ↑ 0 $24.50 $13.33

The Terrace 1 115,460 6,354 4,601 ↑ $24.50 ↑ $15.99 ↑

The Terrace 2 114,635 0 0 $24.50 ↑ $15.65 ↑

The Terrace 6 196,717 22,771 0 $28.00 ↑ $15.92 ↑

The Terrace 7 196,215 2,052 ↑ 0 ↓ $28.00 ↑ $15.99 ↑

62

FAR SOUTHWEST MICROMARKET COMPETITIVE SET BUILDINGS



Asking Rental Rate

Estimated OpEx

3600 San Clemente Bldg B 90,267 0 0 $26.50 $15.63 ↑

3700 San Clemente 249,870 51,934 0 $29.50 $13.27 ↑

3900 San Clemente 251,146 135,366 ↑ 0 $25.00 $13.81 ↓

5000 Plaza on the Lake 118,063 0 ↓ 13,388 ↑ $26.75 ↑ $15.57 ↑

7000 West at Lantana 1 & 2 136,075 0 0 DND $13.14 ↑

Canyon at Wild Basin 74,580 8,034 ↓ 0 ↓ $24.00 $11.60

Capital Ridge 216,511 0 0 $30.00 $10.56

Cielo Center 270,711 0 ↓ 1,320 ↓ $19.50 $12.55

CityView 1 46,702 0 0 $21.00 ↑ $13.55 ↑

CityView 2 47,809 922 ↑ 0 $21.00 ↑ $13.55 ↑

CityView 3 48,044 0 ↓ 2,015 ↑ $21.00 ↑ $13.55 ↑

CityView Center 137,763 0 24,478 $26.00 ↑ $11.79

Crystal Mountain 1, 2 & 3 61,762 11,322 ↑ 0 ↓ $26.00 ↑ $9.41

Dimensional Place I 220,000 0 0 $24.00 $12.42

Dimensional Place II 156,000 0 0 $24.00 $12.42

Encino Trace I 161,606 0 0 $23.50 $11.00

Encino Trace II 158,137 130,070 0 $23.50 $11.00

Escalade Bldg A 56,701 9,440 0 $19.50 $13.46 ↑

Escalade Bldg B 56,701 2,083 0 $19.50 $13.46 ↑

Lake Pointe II 42,933 5,489 ↑ 0 $24.00 $8.42

Las Cimas I 85,000 6,726 ↑ 0 $24.50 $14.29 ↑

Las Cimas II 156,069 0 ↓ 0 $26.00 $13.83

Las Cimas III 157,418 7,048 ↑ 0 ↓ $26.00 $13.93

Las Cimas IV 138,008 0 ↓ 1,590 $26.75 ↑ $14.58 ↑

Lost Creek Point 73,026 6,800 ↑ 0 $18.00 $12.29 ↓

Parkway at Oak Hill I & II 145,475 23,644 ↑ 0 $24.00 ↑ $13.07

Plaza 290 63,163 1,633 ↓ 0 ↓ $18.50 ↑ $12.50 ↑

Plaza on the Lake I 122,530 8,936 0 $26.50 $15.35 ↑

Plaza on the Lake II 111,166 0 0 $26.50 $14.96

Rialto I 77,872 2,213 ↓ 0 $23.00 $13.64 ↑

Rialto II 77,508 1,588 36,421 $23.00 $13.64 ↑

The Enclave Bldgs 1-4 44,704 0 0 $17.00 $8.37

The Summit at Lantana Bldgs 1-5 865,832 52,939 0 $24.00 ↓ $13.06 ↑

Travis Oaks 123,434 5,078 ↓ 0 ↓ $23.50 ↑ $13.30 ↑

Vista Ridge I 75,131 2,199 ↓ 0 $19.00 ↑ $11.33

Westlake Place 61,184 8,836 1,547 ↑ $20.00 ↑ $12.98 ↑

Wild Basin Atrium Bldg A & B 118,910 0 0 $17.00 $9.31

Wild Basin I 60,498 2,856 ↑ 0 $19.00 $11.81 ↑

Wild Basin II 74,626 0 0 $19.00 $10.87 ↓

63

YOURNOTES:

1 Stevie Ray Vaughn Statue; Photo by: Katie Haugland

1717 W. SIXTH STREET, SUITE 400

AUSTIN, TEXAS 78703

512.684.3800

AQUILACOMMERCIAL.COM

aquila austin market report q4 2015

Documents