WASHINGTON DC REGIONAL MARKET:

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WASHINGTON DC REGIONAL MARKET Presented
by Spencer Stouffer Managing Director
www.cassidypinkard.com
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WASHINGTON DC OFFICE MARKET Deliveries - Net
Absorption - Vacancy
Average Annual Net Absorption 1.8M SF
Average Annual Deliveries 2.3M SF
Total Inv 90.3M 91.6 95.7
98.6 99.7 102.0 105.2
107.9 112.3 112.5 114.6
119.0
Projections by CPC as of December 31, 2007
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NORTHERN VIRGINIA OFFICE MARKET
Deliveries - Net Absorption Vacancy
1996 2008
Average Annual Deliveries 4.2M SF
Average Annual Net Absorption 3.2M SF

• Projected deliveries based on square feet under
  construction as of 12/30/2007.

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SUBURBAN MARYLAND OFFICE MARKET
Deliveries - Net Absorption Vacancy
1998 2008
Average Absorption
Average Deliveries

• Projected deliveries based on square feet under
  construction as of 12/30/2007.

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OFFICE SALES DOLLAR VOLUME METRO AREA
Billions
Second highest on record
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AVERAGE PRICE PER SQUARE FOOT
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QUESTION 1

• What is the forecast for demand
• and absorption in 2008?

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RECENT PRIVATE SECTOR ACTIVITY DC MARKET
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TENANTS IN THE MARKET NOVA MARKET
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QUESTION 2

• Are we overbuilt? Is there too
• much supply?

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DOWNTOWN DC DEVELOPMENT PIPELINE
Fourth Quarter 2007
97.2
44.4
74.5
45.1
48.1
80.5
Vacancy rates based off of prelease activity
and development projections
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NORTHERN VIRGINIA OFFICE MARKET
Projects Under Construction by Submarket Fourth
Quarter 2007
23.0
61.5
22.9
28.6
11.9
10.1
0.0
0.0
Percentages shown are based on leased space as
of 12/31/2007
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SUBURBAN MARYLAND OFFICE MARKET
Projects Under Construction by Submarket Fourth
Quarter 2007
16.4
0.0
0.0
100
40.8
0.0
54.4
0.0
0.0
Percentages shown are based on leased space as
of 12/31/2007.
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QUESTION 3

• Why are there less tenants in
• the market?

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10,000 SF USER CONSTRUCTION COSTS
Corporate Office Space - 50 Open Plan
TOTAL 52-57
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FURNITURE, FIXTURES EQUIPMENT
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QUESTION 4

• What impact will/has lack of liquidity
• in financial markets have on DC area investment
  sales market?

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ANSWER TO QUESTION 4

• Cap rates are up 5-15
• Sales volume will be down at least 30
• Equity requirements increase
• Harder to finance acquisitions
• Less/none vacant building sales and speculative
  development starts
• Yet there is no less capital in the market. In
  fact,
• the DC area is becoming more attractive relative
• to other markets.

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FORECAST 2008 VS. 2007

• Inside Outside
• Beltway Beltway
• Trophy Rents
• Commodity Rents
• Absorption (vs. historical)
• Concessions
• OPEX