Colliers Office Beat May 2016

COLLIERS

OFFICE BEAT OFFICE SERVICES EMPLOYEE NEWSLETTER

“IT’S ALL ABOUT OFFICE” MAY 2016

Spring Has Sprung!

Welcome to the second quarterly edition of Office Beat, the Colliers Office Services internal newsletter.

Office markets across the country continue to have strong performances. A recent article in the Wall Street Journal [READ ARTICLE] indicated that “With the labor picture continuing to improve, four-plus years of incremental growth is adding up to a relatively healthy office market, giving landlords newfound optimism.”

Colliers’ in-depth Major Office Outlook research report echoes this sentiment, noting that “The U.S. Office Market remains strong and is steadily growing, and we anticipate further declines in vacancy and an uptick in asking rents for the next several quarters.” This is just one of our great research reports that should be shared with your key clients.

Given the market strength, it is no wonder Colliers’ Office Services produced $245 million in revenue last year, an impressive 15% year-overyear increase.

Colliers’ office professionals continue to execute transactions with marquis clients throughout the country. On the tenant rep side, highlights include: 50,000 sf for McDermott Will & Emery in Chicago; 456,000 sf for LinkedIn in San Francisco, and 259,000 sf for Quintiles in Raleigh-Durham.

Office Services also executed several large sales including 95 Berkeley Street on behalf of The Community Builders in Boston, and Pointe South Mountain Corporate Center in Tempe, AZ on behalf of Equity Office. We continue to dominate leasing agencies in Seattle with recent deals for UBS Realty, Callahan Capital and Ivanhoe Cambridge.

Last year, NYC became our new U.S. headquarters, and since then, New York has executed many impressive transactions, including 80,000 sf for Facebook, 109,000 sf for WeWork, a company with a $17 billion valuation; and Elizabeth Arden’s headquarters at 200 Park Avenue South.

This Office Beat will cover new tools, developed to improve our opportunities to win new business – and we hope you are using them! Be sure to read “The Competitive Edge: New Tools for New Business” section, which features our latest research, the Sizzle Reel [VIEW SIZZLE REEL] and the Hedge Fund Website [VISIT SITE]. Have you used the Sizzle Reel in pitches? What was the response? I’ve gotten terrific feedback from clients, and I would love to hear your feedback as well.

An important case study is featured in “The Winning Edge” column, which also highlights how resource-rich Colliers is. One of my many roles as President of Office Services is to connect all of you, our incredible brokerage and financial professionals with our internal resources. Please

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The Competitive Edge

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The Winning Edge/Upcoming Events

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Market Highlight

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take a look at the three “Resources to Leverage,” including our Law Firm Services Group, Healthcare Marketplace Research Report, and a contact to help you develop a portfolio strategy for regional banks.

Increasingly, diversity is becoming a powerful differentiator for commercial real estate services firms when dealing with procurement departments.

Our “Make Sure You Know Before You Go” column covers how to tap into our minority and women-owned businesses experts in the U.S. In addition to sharing resources, it is also critical to leverage our pockets of strength and each other’s track records. For example, after reading “Office Spotlight” on our Dallas office, you will find that they are strong with tech and telecomm tenants.

Our people are our greatest resource. We added more than 50 office professionals in 2015, and we continue to add to our lineup in most major markets. Have you read the announcements? Maybe you met them at AmCon, the amazing 3-day conference in Washington, DC? A big shout out to our entire Marketing department for their great work! From the inspiration of our leaders, Jay Hennick and Dylan Taylor, to the motivation provided by keynote speaker, Colin Powell, the energy and enthusiasm were contagious. It’s all about Office! In addition to participating in many Office sessions at AmCon, and leading a two-hour Office session that drew more than 200 professionals, we were lucky to have Jay Hennick interview the real estate legend, Mike Fascitelli, for the “Up Close and Personal” segment. We also organized a “Tech Panel,” where Dan Spiegel moderated four tech company CEOs who addressed how office brokers can benefit from new technologies. Thank you Joe Cabrera, Scott Daugherty, Evan Djikas, and Jim Damiani for your very valuable time and expertise.

Congratulations to David Kahnweiler (Chicago) who won the Referral Award for ‘Market with a population over 3 million’ and Andre Walewski (San Jose) who won it for the ‘Market with a population less than 3 million’.

[VIDEOS WILL BE AVAILABLE SHORTLY.]

Office Services continues to build and gain market share in key markets throughout the country. Here’s to our continued success. “There is no best, only better.” Please share your pitches, wins and progress. HAPPY SPRING!

Cynthia Foster President, National Office Services, USA

Colliers Facts/ Colliers Speaks

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Office Spotlight

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Select Wins/ Office in the News

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Make Sure You Know/Resources to Leverage

COLLIERS

OFFICE BEAT MAY 2016

The Competitive Edge: New Tools for New Business Have you sent our latest Office Reports to your clients?

SIZZLE REEL: IN-PERSON PITCHES

OFFICE MARKET OUTLOOK An Office research and economic report covering 80 markets, for you to share with your clients.  CLICK HERE TO VIEW REPORT

The Sizzle Reel is the perfect tool at your next client meeting. It demonstrates Colliers’ strength and breadth in Tenant Rep throughout the U.S. in a variety of industries.

The reel takes the place of all those pages that make up the “Why Colliers” section in pitches. CLICK HERE TO VIEW VIDEO

HEDGE FUND WEBSITE

TOP OFFICE METROS This report serves as a quarterly summary of the 10 largest U.S. Office metros. Great for Landlords!  CLICK HERE TO VIEW REPORT

COLLIERS INTERNATIONAL |

nycfundspaces.com is a prototype tenantfacing microsite offering quick access for hedge funds, private equity and venture capital firms seeking high-end space in the premier office neighborhoods of Midtown Manhattan. CLICK HERE TO VIEW WEBSITE

For more information, please contact: connor.sullivan@colliers.com timothy.pond@colliers.com jp.krahmer@colliers.com

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The Winning Edge In each Office Beat newsletter, we will cover important transactions and assignments. We want to share the inside scoop of how we won the assignment – what services were brought to the table, what was the tipping point for the client pulling the trigger, and how we portray the Colliers’ difference.

Based in North Sydney, Australia, WorleyParsons (WP) is a global engineering and construction firm with a vast real estate footprint in the U.S. With locations ranging from Anchorage to Sacramento, they were in need of superior handling of a full range of real estate services.

Interested in Colliers’ ability to provide lease administration and lease audit capabilities, they asked the Houston team of Jay Kyle and Bob Parsely to prepare a Metro study for locations in Houston and Los Angeles, two of WP’s larger offices in North America. With the portfolio strategy, footprint optimization and operations consulting expertise of Chris Zlocki and the Corporate Solutions team, Jay and Kyle pitched a complete array of real estate services.

The team highlighted Colliers 360, Corporate Solutions best practices, and the ability of the Occupier Advisors Group to deliver top of the market professionals in all of the client’s major locations.

KEY FACTS

The client’s values include Leadership, Agility, Relationships and Performance. Undoubtedly, these characteristics demonstrated by the Colliers team were part of winning the assignment to handle all of WorleyParsons real estate business in the United States. To date, Jay and Bob have completed 15+ deals including a recent 280,000 sf sublet in Houston.

CLIENT

WorleyParsons LOCATION 30 U.S. Locations

“This is an example of a local relationship and a broker led account that leveraged Corporate Services... and strong platform to win the business.” – Jay Kyle.

COMPANY FACTS 37,800 Employees ASSIGNMENT Integrated Client Services LEAD BROKERS Jay Kyle Bob Parsley

CLICK TO LEARN MORE ABOUT WORLEYPARSONS >

TAKE AWAYS • Learn what your client needs to improve their business operations • Understand Colliers’ expansive service lines (lease administration, lease audit, etc.)

EVENTS ANNUAL WOMEN’S FORUM

May 11 Congratulations to Christel Engel, Executive Managing Director, based in the New York City office of Colliers, for doing a great job of promoting our brand and insights at the Real Estate Weekly Women’s Office Leasing panel on May 11!

She joined several other esteemed women including Congresswoman Carolyn Maloney, Alisa Mall, Director of Investments at Carnegie Corporation, and Laura Yablon, Senior Vice President at L&L Holding Company, among others.

Great work Christel for helping to build our Office presence in New York City.

June 27 Coconut Grove, FL COLLIERS SPEAKER: KEN KRASNOW

COLLIERS

OFFICE BEAT MAY 2016

Market Highlight San Francisco In each issue of Office Beat, we will profile a major market in the U.S. In this issue, we are focusing on one of the hottest markets in the world, at the epicenter of the Technology economy, San Francisco.

San Francisco

Local Economy

The 5

Largest Office Buildings in San Francisco 1) 555 California Street

1.50 msf

2) 101 California Street

1.24 msf

1) Salesforce.com

5,870

3) Four Embarcadero Ctr 1.04 msf

2) Twitter Inc.

2,000

4) 525 Market Street

1.08 msf

3) Uber Technologies

1,980

5) 1455 Market Street

1.01 msf

4) Yelp Inc.

1,717

5) Google Inc.

1,500

•S an Francisco’s unemployment rate is effectively zero.

source: San Francisco Business Times

•S an Francisco remains one of the strongest office markets in the country.

Class A Rents within 3% of Record High

•T ech accounts for 33% of tenants in the market.

•W ith 34 programs, San Francisco has the most “accelerators” in the U.S., offering space and VC funding. source: Citylab.com

San Francisco

Investment Market •O ne of the most sought after investment markets internationally •3 6 Office Sale transactions in 2015 totaled $3.7 billion •T he highest price per square foot was for a Class B office building, 1355 Market Street at $878 psf

source: San Francisco Business Times

• Overall Class A rents hit a high of $75.90, higher than Manhattan’s $71.50 for the first time ever.

• The Class “B” sector, which is dominated by high-ceilinged, historical space, favored by tech firms, has seen rents jump over 53 percent during the past two years.

San Francisco’s cable cars are the only rolling National Historic Landmark, part of what attracts 18 million visitors annually.

• In 2015, there was nearly 6.3 msf of gross leasing volume, with 13 leases signed over 100,000 sf.

• San Francisco has had a recordbreaking 23 consecutive quarters of positive net absorption.

• With vacancies at historic lows in some San Francisco submarkets, some companies are purchasing land in order to build expansion space.

CLICK FOR LATEST SAN FRANCISCO INTELLIGENCE > COLLIERS INTERNATIONAL |

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San Francisco’s Largest tech firms ranked by number of employees

San Francisco’s Largest Non-Government Occupiers 1) Salesforce.com

2.25 msf

2) Wells Fargo & Co.

2.30 msf

3) PG&E 1.55 msf 4) Uber Technologies

1.19 msf

5) The Gap Inc.

986 ksf

In 2015, the technology sector continued to dominate the leasing activity in the City accounting for 38 percent of square footage leased. The FIRE (financial service, insurance and real estate) sector accounted for 19 percent of the leasing activity and Business Services represented 18 percent of the square footage leased.

Colliers Facts

Office Services Revenue Grew 15% to Over $245 Million in the U.S. in 2015

Colliers Speaks

14% Retail

28% Industrial

58% Office

OFFICE SERVICES STRATEGIC INITIATIVES

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Build the Colliers Office Brand

External Brand Building – Extensive outreach to clients and media Internal Brand Building – Promotion of Office Services milestones (transactions and recruits) on all available platforms

2.

Increase Regional Brokerage Revenue

Establish Targets; Provide tools for client-facing professionals; Recruit top talent in key markets.

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37th Annual Trends in the Real Estate Market - Boston – January 14

Over 1,000 real estate professionals gathered at the Boston Convention and Exhibition Center to hear Tom Hynes, James Elcock, Kevin Phelan and Doug Jacoby address the state of Boston’s commercial real estate market. The keynote speaker was Governor Charlie Baker. READ FULL ARTICLE VIEW COLLIERS PLACEMAKING VIDEO VIEW SPEAKER DECK

14th Annual Commercial Real Estate Forecast - Chicago – January 20

Leverage New York City

Develop a calling plan of the NYC-based multimarket corporations; Pursue NYC-based landlords for non-NY agency business.

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Develop Office Investor Services Platform

Identify national office investor targets; determine centralized point of contact; leverage Colliers’ other service lines and geographies to improve investor coverage; provide comprehensive client coverage, including research and market data.

Colliers Chicago chairman and chief executive officer, David Kahnweiler, conducted a one-on-one interview with Illinois Governor, Bruce Rauner, discussing the issues of the state’s economy and the impact on commercial real estate. READ FULL ARTICLE

COLLIERS

OFFICE BEAT MAY 2016

Office Spotlight Dallas-Ft. Worth

ELEVATING OUR PRACTICE IN DALLAS-FT. WORTH Colliers’ presence in Dallas dates back to 1993, when The Baldwin Company became an affiliate and we acquired them soon thereafter.

Today there are 36 Office professionals in Dallas and Fort Worth and over the past year, Colliers acquired Case CRE Partners (a smaller brokerage firm), recruited a senior leader and recently executed one of the most significant office sales in the Dallas market.

“With more focus on internal team communication and the client, we will become a major presence in this part of the country,” according to Steve Everbach, a recent recruit from Cushman & Wakefield, who is based in and runs our Dallas office and leads the entire Central Region.

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In Dallas/Ft. Worth, which ranked as the #4 metropolitan area and #2 for tech jobs in the U.S.*, the opportunity to grow our presence is tremendous. Our strength in this market lies in tenant representation and investment sales, 2 and there are big plans to build on those strengths. The Dallas team is also focused on building its agency business and a ‘grass roots’ branding campaign that promotes our people through memberships with industry organizations and speaking opportunities.

Of note, some recent client success stories include: a headquarters lease for One Source Virtual for 217,000 sf (David Wetherington), a 28,000 sf lease for BT Global Services (Noel Hutcheson) and the sale of what some call ‘the most

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1. Steve Everbach President Central Region / Dallas Market Leader COLLIERS INTERNATIONAL |

2. D avid Wetherington EVP, Office Tenant Representation P. 6

unexpected sale in Dallas’ – the 550,000 sf Occidental Tower (Creighton Stark, Patrick Duffy and John Parsley). This sale really put Colliers on the map here.

Building on these types of transactions bodes well for the DFW team. Everbach has already started to execute his strategic plan. While Dallas is a complicated market and spans other cities such as Fort Worth, Plano and Frisco, we are focused on increasing our presence. After just four months of visiting clients, his plan is well underway and has all the ingredients of great success, including a structured 5 pursuit plan of the top 100 companies in Dallas; refined marketing tools; and circling our services around clients.

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According to Steve, “The people in our market are great and very entrepreneurial. What we need to do is to harness that attribute and build on our communication and collaboration efforts and sharing of best practices across teams and service lines.”

Building our presence as a highly respected, full-service platform in Dallas will be our key focus in 2016. This requires some very strategic recruiting, which Steve and his leadership team are working on together. In addition to significant 2015 Office hires including Ryan Hoopes and Chelsea Story, there will be much more to tell in the coming months.

Exciting times ahead in Dallas and in the Central Region! * Source: Dallas Regional Chamber Economic Development Guide

3. C reighton Stark EVP, Capital Markets Office Investment Sales

4. Chelsea Story Associate, Tenant Representation

5. R yan Hoopes Associate Corporate Solutions

Select Wins – Office OFFICE SERVICES

Elizabeth Arden | Tenant Representation New York City, NY

Kilroy Realty | Landlord Representation

Colliers represented Elizabeth Arden in the 36,000 sf lease extension for its corporate headquarters at 200 Park Avenue South in New York City. The client will occupy the entire 6th and 7th floors.

Seattle, WA

Appointed Colliers to be the leasing agent of Westlake Terry, a two-building, Class A office complex totaling 316,664 square feet in Seattle’s South Lake Union submarket.

Contact: Joseph Cabrera, Michael Gordon and David Glassman

Contact: David Abbott, Greg Inglin & Laura Ford

Duke Realty | Property Management Various Locations

Duke Realty awarded Colliers the contract to provide maintenance services across 64 million square feet of industrial, office, and medical office buildings in Atlanta, Chicago, Dallas, Denver, Houston, Milwaukee, Minneapolis, Nashville, Phoenix, Savannah, Seattle and St Louis.

INVESTOR SERVICES TA Associates has appointed Colliers as exclusive leasing agent for 200 East Broward, a 226,000 sf, Class A office building in downtown Ft. Lauderdale, FL. Contact: Ryan Kratz, Jarred Goodstein, Alfie Hamilton and Jonathan Kingsley

Contact: David Kahnweiler

Grovo | Tenant Representation New York City, NY

On behalf of the landlord, Franklin Partners, Colliers executed a 72,000 sf lease in Grand Rapids, MI.

Colliers executed a 70,000 sf office lease at 50 West 23rd Street in New York.

Contact: Duke Suwyn

Contact: Eric Ferriello; Robert Tunis; New York Consulting Group

MCS | Tenant Representation Dallas-Fort Worth, TX

Colliers represented MCS as they relocated their corporate headquarters from a 70,000 sf office property in Plano to a 120,000 sf office property in Lewisville.

OCCUPIER SERVICES CORPORATE SOLUTIONS

Contact: David Wetherington

Signature Bank | Tenant Representation New York City, NY

Colliers executed a 29,000 sf office lease at 565 Fifth Avenue in New York.

Colliers represented Ulta Beauty in a 23,000 sf lease for a new satellite office at 120 S. Riverside Plaza in downtown Chicago to offer employees workplace flexibility and to support the company’s fast-paced growth. Ulta is the largest national beauty retailer with nearly 900 store locations across the United States.

Contact: Fred Regnery, Alain LeCoque, Ryan Barr and Mark Breithaupt

Contact: Michael Cohen; Howard Kaplowitz; Andrew Roos, New York Consulting Group

COLLIERS OFFICE IN THE NEWS GLOBEST.COM NEW YORK Colliers Hires Four Office Brokers

REAL ESTATE WEEKLY ‘Google factor’ changing location equations

BISNOW Inside Google’s Impact on NYC’s Chelsea

and Meatpacking District

CONSTRUCTION DIVE The Future of Work: How Office Design is Changing

GLOBEST.COM Broad-Based Strength in US Office Market

NATIONAL REAL ESTATE INVESTOR 10 Most Wanted Office Amenities Five US Office Markets with High Rent Growth

S Office Fundamentals Remain Strong, U Moderate Growth Expected

Make Sure You Know Before You Go...

What happens when government and publicly held entities ask about Colliers’ policy regarding diversity? Colliers is committed to advancing diversity within the real estate industry. We believe that complex projects are best served by a team with multiple perspectives, so we actively bring together diverse people to serve our clients and support our teams.

To this end, a number of Colliers offices around the United States include minority or women-owned businesses. Additionally, Colliers has aligned itself with a broad array of diverse strategic partners with expertise ranging from brokerage, project management, and facilities management to corporate services providing a seamless end-to-end solution. To learn more about Colliers’ Minority Procurement Real Estate Initiative, contact leader: eric.yarbro@colliers.com. [READ ABOUT A RECENT TRANSACTION.] On an internal level, Colliers’ Women’s Diversity Program kicked off at AmCon. It was developed to provide networking to help women within our business grow their careers and leadership skills.

Resources to Leverage Colliers’ Law Firm Services Group is a global team of enterprising and experienced professionals – including practicing attorneys – who partner with law firm clients to provide strategic expertise tailored to the goals and culture that make each law firm unique.

Contact: dan.arends@colliers.com Demand for Medical Office Buildings continues to be strong across the country. Find out more: [READ THE 2016 HEALTHCARE MARKETPLACE RESEARCH REPORT]

Contact: marybeth.kuzmanovich@colliers.com Looking for insight on corporate finance specific to regional banks to develop a portfolio strategy?

Contact: scott.daughery@colliers.com

SUBMIT A WIN OR GIVE FEEDBACK HAVE A COMMENT? WANT TO BE FEATURED IN THE NEXT ISSUE? We are always on the lookout for stories that illustrate the great things our people do... whether it is a significant transaction or key hire; or an important charitable activity or event that you or your team or branch has been involved in... we want to hear about it.

To submit comments or suggestions, please contact:

celine.clarke@colliers.com

john.mynott@colliers.com

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