% $ Market Report NEW JERSEY OFFICE 4Q Leasing Activity MSF. Net Absorption

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1 Market Report NEW JERSEY OFFICE 4Q 2016 Accelerating success. ± % $ MSF Absorption SF 4Q 2016 Quarter-to- Quarter Change Year-to- Year Change YTD ,560, % -12.5% 12,806,676 (636,072) (2,116,921) (685,772) 1,291,280 Availability Rate 20.2% 0.2pp 0.2pp N/A Average Asking Rent ($/SF/YR) $ % 1.7% N/A Note: pp (percentage points) New Jersey ended 2016 with generally positive momentum as continuing economic strength drove most of the office market forward. Large blocks of space returned in the Hudson Waterfront and Somerset/Route 78 submarkets cast something of a shadow over encouraging results in the other submarkets, however, and led to negative absorption totaling 636,072 million SF statewide in the fourth quarter. Availability increased slightly quarter-over-quarter to 20.2%, though that number remained lower than December 2015 s 20.4%. Leasing activity slowed to 2.6 million SF as tenants both postponed major decisions and delayed the closings of transactions in process. Despite the setback, at 1.3 million SF, full-year net absorption surpassed the 1 dd million SF mark for the third consecutive year. This growth can be attributed to the increase in the number of large transactions completed in In total, there were 22 transactions over 100,000 SF, compared to 21 transactions last year, and 12 in INCREASED USER-SALE ACTIVITY DRIVES ABSORPTION IN BERGEN COUNTY Bergen County submarkets recorded 336,522 SF of positive net absorption this quarter, dropping its availability rate by 140 basis points to 17.6%. This improvement was driven by a rise in user-sale activity, indicating that tenants are taking advantage of pricing opportunities in the marketplace. A number of companies were driven to ownership in assets that met their use requirements. Sales underscoring this trend include: the sale of 75 Chestnut Ridge Road in Montvale to KPMG, Cuttone & Company s acquisition of 69 Spring Street in Ramsey, and Park Avenue Motors acquiring 216 Route 17 North in Rochelle Park. UNEMPLOYMENT RATE IMPROVES FOR ONLY THE SECOND TIME AMID AN UNEVEN 2016 High expectations were anticipated in 2016 as New Jersey was coming off its best year for job growth in more than a decade. More than 80,000 jobs were created in New Jersey in 2015, but 2016 started with two straight months of job losses, and after an early dip in February, the State's unemployment rate rose steadily over the next several months, before improving in November. The unemployment rate dropped 30 basis points quarter-over-quarter to 5.0% as New Jersey employers created 4,700 jobs in November. Despite the erratic pattern of job creation this year, office-using industries, such as financial and professional services, grew by 14,000 jobs this year, which helped drive positive absorption in the office market in New Jersey Overall Availability Rate vs. Average Asking Rent New Jersey Overall Leasing vs. 25% % Available Asking Rent (+TE) $27 6,000,000 20% $26 5,000,000 4,000,000 15% 10% $25 3,000,000 2,000,000 5% $24 1,000, % $23 (1,000,000) 1 New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

2 New Jersey Office Market Report 4Q 2016 NORTHERN NEW JERSEY Nine out of the 13 Northern New Jersey submarkets recorded positive absorption in the fourth quarter and the overall availability remained unchanged at 21.0% despite challenging events in the Hudson Waterfront. Large block returned at Harborside Plaza I and Plaza V resulted in 612,823 SF of negative absorption in that submarket by the end of December, and contributed to 156,347 SF of negative absorption for the overall market. Leasing activity during the fourth quarter totaled 1.2 million SF, bringing the full-year total to 7.9 million SF the highest level of activity recorded since This robust activity was driven by a surge in large transactions. In total, there were 13 transactions over 100,000 SF in 2016, which accounted for 31% or 2.4 million SF of Northern New Jersey s total activity. Activity this quarter was primarily driven by the Parsippany submarket, which accounted for 23% of all activity in the northern portion of the State. The submarket was also home to the largest lease this quarter: T-Mobile s renewal of 105,135 SF at 4 Sylvan Way in Parsippany. The Parsippany submarket, in particular, has benefited from an increase in tenant activity and the ongoing adaptive re-use trend. At 28.4% the submarkets availability rate has reached its lowest point since 1Q One driver for this improvement is the removal of 1515 Route 10 from the inventory. The property, which will be renamed The District at 1515, is slated to be redeveloped into a vibrant mixed-use retail/residential town center. Furthermore, the average asking rent in the submarket increased 3.4% quarter-over-quarter to $26.58/SF. The removal of lower priced space from the market, such as 1515 Route 10, contributed to this increase. Net absorption turned negative this quarter as large blocks of space on the Hudson Waterfront returned to the market. Notable new availabilities include: 215,430 SF at Harborside Plaza V which will be vacated by Allergan, and Deutsche Bank returning 144,375 SF to the market at Harborside Plaza I. Despite these new blocks, year-to-date net absorption remained positive for the third consecutive year at 951,036 SF. In retrospect, Northern New Jersey has achieved significant improvement since its recovery began in Over the last three years, net absorption totaled over 4.5 million SF, dropping the availability rate from a high of 24.3%, to 21.0%. Looking ahead, positive momentum is expected to continue into 2017, driven by a number of large requirements scheduled to close in the coming months. After achieving substantial rent growth in 2015, the average asking rent experienced minimal movement in 2016, increasing $0.18/SF yearover-year to $26.74/SF. An increase in tenant demand helped justify increasing rents in some areas. The Hudson Waterfront and Parsippany submarkets led Northern New Jersey in year-over-year rental rate growth, as landlords commanded higher rents due to accelerated leasing momentum. At $35.28/SF the Hudson Waterfront s asking rent is up 12.4% from the prior year, while Parsippany is up 10.2% to $26.58/SF. Northern New Jersey Availability Rate vs. Average Asking Rent 25% 20% 15% 10% 5% 0% % Available Asking Rent (+TE) 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q 2016 $29.00 $28.00 $27.00 $26.00 $25.00 $24.00 $23.00 Northern New Jersey vs. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 (500,000) Leasing 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

3 New Jersey Office Market Report 4Q 2016 CENTRAL NEW JERSEY Relatively strong leasing and stability in available space allowed for fairly wide ranging improvement in the Central office market. Six of eight submarkets recorded positive net absorption, with the 287 Corridor submarket seeing the most at 220,053 SF. Only the Somerset/Route 78 and Princeton submarkets recorded negative results 1.1 million SF of total negative absorption concealing what would have otherwise been sustained improvement in Central New Jersey s market fundamentals. Most of the 479,725 SF of negative net absorption was driven by two corporate relocations. In Princeton, Tyco put 150,000 SF on the sublease market as they prepare to relocate to Milwaukee, due to their merger with Johnson Controls. Also becoming available this quarter is Chubb Insurance s 535,000 SF headquarters space at 15 Mountainview Road in Warren. Chubb, which was acquired by ACE, will vacate the property by 3Q 2017 and consolidate operations in Whitehouse Station and Philadelphia. Leasing activity remained robust closing the fourth quarter at 1.3 million SF, up 46% from 910,915 SF recorded in 1Q Despite the influx of large blocks this quarter, The Somerset/Route 78 and Princeton submarkets drove demand during the quarter, accounting for half of Central New Jersey s total leasing activity. Both submarkets continue to attract users due to their ideal location, educated workforce and desirable transportation and amenities. Major transactions in these submarkets include; Mathematica Policy Research s 141,176 SF renewal at 600 Alexander Park in Princeton, and Synchronoss Technologies 118,691 SF expansion and renewal at 200 Crossings Boulevard in Bridgewater. The average asking rent in Central New Jersey increased for the sixth consecutive quarter to $25.45/SF an increase of $0.85/SF yearover-year. This increase can be attributed to upward repricing at 379, 399 and 499 Thornall Street in Edison to $35.00/SF. As a result, the Metropark submarket posted the highest growth in rental rates year-over-year, up 5.7% to close the fourth quarter at $30.22/SF. This also impacted Central New Jersey s Class A average asking rent which increased 5% from the prior year to $28.14/SF, with the Metropark and Princeton submarkets continuing to command the highest Class A asking rates at $32.39/SF and $28.98/SF, respectively. Central New Jersey Availability Rate vs. Average Asking Rent 25% % Available Asking Rent (+TE) $ % $ % $ % $ % $ % $22.00 Central New Jersey vs. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 (500,000) (1,000,000) Leasing 3 New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

4 New Jersey Office Market Report 4Q 2016 CAPITAL MARKETS Record-setting headquarters office sales drove quarterly sales volume to its highest total in over a year at $877 million. The most notable headquarter sale occurred in Newark, where Matrix Development Group sold 2 Riverfront Plaza to a Kuwaiti-based fund named KFH Capital for $165,000,000 or $488.83/SF. The 337,543 SF property was developed in 2013 and is home to Panasonic s North American headquarters. Also trading this quarter was MetLife Investment s newly completed headquarters at 67 Whippany Road in Whippany. Vision Real Estate and Rubenstein Partners sold the property for $98,450,000 or $532.28/SF to SALUS Government Properties. Stable growth in average asking rates coupled with a lack of attractive opportunities in other property types will draw more investors to office properties, particularly for single tenant, triple net product. Cap rates in New Jersey s office market remained relatively stable this year, indicating they may have reached a cyclical low in Cap rates increased modestly by 10 basis points to 6.8% over the last 12 months and have seen little movement dating back to 2013, typically moving in a narrow range between 6.8% and 7.2%. Investor demand for high quality, institutional-grade office product continues to keep cap rates at historic lows. New Jersey Quarterly Investment Volume $1,400 $1,200 $1,000 Millions $800 $600 $400 $200 $- 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Based on sales of $2.5 million and greater ECONOMIC INDICATORS GDP Gross Domestic Product CCI Consumer Confidence Index NJ Unemployment Rate $18,675 (3Q 2016) [in billions] Increase from 2Q (Dec. 2016) Increase from Sept % (Nov. 2016) Increase from Aug Source: U.S. Department of Commerce, The Conference Board Bureau of Labor Statistics 4 New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

5 New Jersey Market Overview Recent Transactions & Major Sales Top 4Q 2016 Transactions Submarket Property Address City Leased SF Tenant Lease Type Princeton 600 Alexander Park Princeton 141,176 Somerset/Route Crossing Boulevard Bridgewater 118,691 Mathematica Policy Research Synchronoss Technologies Renewal Expansion/Renewal Parsippany 4 Sylvan Way Parsippany 105,135 T-Mobile Renewal Hudson Waterfront 70 Hudson Street Jersey City 77,998 Fidessa New Lease Somerset/Route Route 22 E Bridgewater 66,555 Monmouth County Allstate Insurance Company New Lease 101 Crawfords Corner Road Holmdel 64,061 JCP&L New Lease Upper Parkway 225 Brae Boulevard Park Ridge 60,000 Hertz Sale/Leaseback Parsippany 1 Sylvan Way Parsippany 57,721 PBF Energy Expansion/Extension Monmouth County 331 Newman Springs Road, Bldg II Red Bank 54,538 Maser Consulting Expansion/Renewal Top 4Q 2016 Sales Property Address, City Building RBA 80 Park Plaza, Newark 973,000 Buyer Nightingale Properties LLC 2 Riverfront Plaza, Newark 337,543 KFH Capital 67 Whippany Road, Whippany 184,960 SALUS Government Properties, LLC 100 Plaza Drive, Secaucus 264,973 Howard Hershkovich 10 Sylvan Way, Parsippany 125, ,103,105 Eisenhower Parkway, Roseland 608,545 Griffin Capital Essential Asset REIT II, Inc. Vision Real Estate Partners LLC Seller Columbia Property Trust Matrix Development Group/SJP Properties Rubenstein Partners, L.P. Harbor Group Management Normandy Real Estate Partners Mack-Cali Realty Corporation Sale Price Price PSF Cap Rate $174,500,000 $ % $165,000,000 $ $98,450,000 $ % $62,000,000 $ % $44,000,000 $ % $42,762,999 $ % 5 New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

6 New Jersey Market Overview Existing Properties Submarket Northern NJ Stock Total Inventory Availability Rate (%) Average Asking Rent ($) (QTR.) (QTR.) Palisades 70 6,520, % $ , ,579 Upper Parkway 52 4,730, % $ ,618 71,520 North 17 Corridor 42 4,872, % $ ,209 32,335 Central Bergen 103 9,153, % $ ,270 89,088 Route 46/23/ ,384, % $ ,913 (58,322) Hudson Waterfront 71 21,726, % $ ,476 (612,823) Meadowlands 41 6,355, % $ ,987 5,867 Newark 48 15,612, % $ ,578 99,559 Route 280 Corridor 60 8,482, % $ ,650 (16,737) Parsippany ,953, % $ ,366 40,534 Morristown 94 14,389, % $ ,841 57,003 Western Morris 21 2,172, % $ ,050 5,699 Chatham/Millburn 15 1,396, % $ ,435 (13,649) Total NNJ ,750, % $ ,228,808 (156,347) Central NJ Parkway/Route 22 Corridor 45 2,860, % $ ,681 86,758 Metropark 58 7,873, % $ ,037 71,887 Somerset/Route ,041, % $ ,917 (725,432) Route 78 West 27 3,637, % $ , Corridor 81 9,858, % $ , ,053 Brunswick s 23 2,849, % $ ,844 36,522 Monmouth County ,179, % $ , ,172 Princeton ,079, % $ ,548 (339,125) Total CNJ ,377, % $ ,331,458 (479,725) NJ Overall Class A ,944, % $ ,124,353 (750,859) Class B ,164, % $ ,500 (17,808) Class C 167 7,019, % $ , ,595 Market Total 1, ,128, % $ ,560,266 (636,072) 6 New Jersey Office Market Report 4Q 2016 Colliers International 300 Interpace Parkway, Bldg. C, 3 rd Floor Parsippany, NJ

7 554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 FOR MORE INFORMATION David A. Simon, SIOR Executive Managing Director David.Simon@colliers.com John Obeid Senior Director Research John.Obeid@colliers.com $2.5 billion in annual revenue 2.0 billion square feet under management 16,000 professionals and staff COLLIERS INTERNATIONAL PARSIPPANY 300 Interpace Parkway Bldg. C 3rd Fl. Parsippany, NJ PRINCETON 500 Alexander Park Suite 202 Princeton, NJ About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 16,000 professionals operating from 554 offices in 66 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide across a broad range of property types, including: Brokerage; Global corporate solutions; Investment sales and capital markets; Project management and workplace solutions; Property and asset management; Consulting, valuation and appraisal services; and, Customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals' Global Outsourcing for 10 consecutive years, more than any other real estate services firm. colliers.com Copyright 2017 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.