Buffalo/Niagara Falls Office market

The CoStar
Office Report
M i d - Y e a r
2 0 1 5
Buffalo/Niagara Falls
Office Market
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Table of Contents
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B
Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C
Market Highlights & Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CoStar Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Inventory & Development Analysis
Select Top Under Construction Properties
Select Top Deliveries
Figures at a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Figures at a Glance by Class & Market
Historical Figures at a Glance
Leasing Activity Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Select Top Lease Transactions
Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Buffalo CBD Market
East Market
Greater Buffalo Market
Niagara Falls Market
North Market
South Market
©2015 CoStar Group, Inc.
The CoStar Office Report
A
Buffalo/Niagara Falls – Mid-Year 2015
Buffalo/Niagara Falls Office Market
Methodology
The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar
Group’s entire database of existing and under construction office buildings in each metropolitan
area. Included are office, office condominium, office loft, office medical, all classes and all sizes,
and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar
Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million
properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service
equivalent rental rate.
For information on subscribing to CoStar’s other products and services, please
contact us at 1-877-7COSTAR, or visit our web site at www.costar.com
© Copyright 2015 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the
information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or
completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or
warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CoStar Group, Inc.
1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP
B
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Terms & Definitions
Availability Rate: The ratio of available space to total rentable
space, calculated by dividing the total available square feet by the total
rentable square feet.
cate of occupancy must have been issued for the property.
Available Space: The total amount of space that is currently
being marketed as available for lease in a given time period. It includes
any space that is available, regardless of whether the space is vacant,
occupied, available for sublease, or available at a future date.
Developer: The company, entity or individual that transforms raw
land to improved property by use of labor, capital and entrepreneurial
efforts.
Build-to-Suit: A term describing a particular property, developed
specifically for a certain tenant to occupy, with structural features,
systems, or improvement work designed specifically for the needs of
that tenant. A build-to-suit can be leased or owned by the tenant. In
a leased build-to-suit, a tenant will usually have a long term lease on
the space.
Buyer: The individual, group, company, or entity that has purchased
a commercial real estate asset.
Cap Rate: Short for capitalization rate.The Cap Rate is a calculation
that reflects the relationship between one year’s net operating income
and the current market value of a particular property. The Cap Rate
is calculated by dividing the annual net operating income by the sales
price (or asking sales price).
CBD: Abbreviation for Central Business District. (See also: Central
Business District)
Central Business District: The designations of Central Business
District (CBD) and Suburban refer to a particular geographic area
within a metropolitan statistical area (MSA) describing the level of real
estate development found there. The CBD is characterized by a high
density, well organized core within the largest city of a given MSA.
Class A: A classification used to describe buildings that generally
qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in
the same market. Such buildings are well located and provide efficient
tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark
designed by prominent architects. These buildings contain a modern
mechanical system, and have above-average maintenance and
management as well as the best quality materials and workmanship
in their trim and interior fittings. They are generally the most attractive
and eagerly sought by investors willing to pay a premium for quality.
Class B: A classification used to describe buildings that generally
qualify as a more speculative investment, and as such, command
lower rents or sale prices compared to Class A properties. Such
buildings offer utilitarian space without special attractions, and have
ordinary design, if new or fairly new; good to excellent design if an older
non-landmark building.These buildings typically have average to good
maintenance, management and tenants. They are less appealing to
tenants than Class A properties, and may be deficient in a number
of respects including floor plans, condition and facilities. They lack
prestige and must depend chiefly on a lower price to attract tenants
and investors.
Class C: A classification used to describe buildings that generally
qualify as no-frills,older buildings that offer basic space and command
lower rents or sale prices compared to other buildings in the same
market. Such buildings typically have below-average maintenance
and management, and could have mixed or low tenant prestige,
inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract
tenants and investors.
Construction Starts: Buildings that began construction during
a specific period of time. (See also: Deliveries)
Contiguous Blocks of Space: Space within a building that is,or
is able to be joined together into a single contiguous space.
Deliveries: Buildings that complete construction during a specified
period of time. In order for space to be considered delivered, a certifi©2015 CoStar Group, Inc.
Delivery Date: The date a building completes construction and
receives a certificate of occupancy.
Direct Space: Space that is being offered for lease directly from the
landlord or owner of a building, as opposed to space being offered in
a building by another tenant (or broker of a tenant) trying to sublet a
space that has already been leased.
Existing Inventory: The square footage of buildings that have
received a certificate of occupancy and are able to be occupied by
tenants. It does not include space in buildings that are either planned,
under construction or under renovation.
Flex Building: A type of building designed to be versatile, which
may be used in combination with office (corporate headquarters),
research and development, quasi-retail sales, and including but not
limited to industrial, warehouse, and distribution uses. A typical flex
building will be one or two stories with at least half of the rentable area
being used as office space, have ceiling heights of 16 feet or less, and
have some type of drive-in door,even though the door may be glassed
in or sealed off.
Full Service Rental Rate: Rental rates that include all operating
expenses such as utilities, electricity, janitorial services, taxes and insurance.
Gross Absorption: The total change in occupied space over a
given period of time, counting space that is occupied but not space
that is vacated by tenants. Gross absorption differs from leasing
Activity, which is the sum of all space leased over a certain period of
time. Unless otherwise noted Gross Absorption includes direct and
sublease space.
Growth in Inventory: The change in size of the existing square
footage in a given area over a given period of time,generally due to the
construction of new buildings.
Industrial Building: A type of building adapted for such uses as
the assemblage, processing, and/or manufacturing of products from
raw materials or fabricated parts. Additional uses include warehousing,distribution,and maintenance facilities.The primary purpose of the
space is for storing, producing, assembling, or distributing product.
Landlord Rep: (Landlord Representative) In a typical lease
transaction between an owner/landlord and tenant, the broker that
represents the interests of the owner/landlord is referred to as the
Landlord Rep.
Leased Space: All the space that has a financial lease obligation.
It includes all leased space, regardless of whether the space is currently
occupied by a tenant. Leased space also includes space being offered
for sublease.
Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or
market in a given period of time. It includes direct leases, subleases and
renewals of existing leases. It also includes any pre-leasing activity in
planned, under construction, or under renovation buildings.
Market: Geographic boundaries that serve to delineate core areas
that are competitive with each other and constitute a generally
accepted primary competitive set of areas. Markets are building-type
specific, and are non-overlapping contiguous geographic designations
having a cumulative sum that matches the boundaries of the entire
Region (See also: Region). Markets can be further subdivided into
Submarkets. (See also: Submarkets)
Multi-Tenant: Buildings that house more than one tenant at a
given time. Usually, multi-tenant buildings were designed and built to
accommodate many different floor plans and designs for different
The CoStar Office Report
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Buffalo/Niagara Falls – Mid-Year 2015
Buffalo/Niagara Falls Office Market
tenant needs. (See also: Tenancy).
Net Absorption: The net change in occupied space over a given
period of time. Unless otherwise noted Net Absorption includes direct
and sublease space.
Net Rental Rate: A rental rate that excludes certain expenses
that a tenant could incur in occupying office space. Such expenses are
expected to be paid directly by the tenant and may include janitorial
costs, electricity, utilities, taxes, insurance and other related costs.
New Space: Sometimes called first generation space, refers to
space that has never been occupied and/or leased by a tenant.
Occupied Space: Space that is physically occupied by a tenant.
It does not include leased space that is not currently occupied by a
tenant.
Office Building: A type of commercial building used exclusively
or primarily for office use (business), as opposed to manufacturing,
warehousing, or other uses. Office buildings may sometimes have
other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor.
Owner: The company, entity, or individual that holds title on a given
building or property.
Planned/Proposed: The status of a building that has been
announced for future development but not yet started construction.
Preleased Space: The amount of space in a building that has
been leased prior to its construction completion date, or certificate of
occupancy date.
Price/SF: Calculated by dividing the price of a building (either sales
price or asking sales price) by the Rentable Building Area (RBA).
Property Manager: The company and/or person responsible
for the day-to-day operations of a building, such as cleaning, trash
removal, etc. The property manager also makes sure that the various
systems within the building, such as the elevators, HVAC, and electrical
systems, are functioning properly.
Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted
rental rates may differ from the actual rates paid by tenants following
the negotiation of all terms and conditions in a specific lease.
RBA: Abbreviation for Rentable Building Area. (See also: Rentable
Building Area)
Region: Core areas containing a large population nucleus, that
together with adjacent communities have a high degree of economic
and social integration. Regions are further divided into market areas,
called Markets. (See also: Markets)
Relet Space: Sometimes called second generation or direct space,
refers to existing space that has previously been occupied by another
tenant.
Rentable Building Area: (RBA) The total square footage of
a building that can be occupied by, or assigned to a tenant for the
purpose of determining a tenant’s rental obligation. Generally RBA
includes a percentage of common areas including all hallways, main
lobbies, bathrooms, and telephone closets.
Rental Rates: The annual costs of occupancy for a particular
space quoted on a per square foot basis.
Sales Price: The total dollar amount paid for a particular property
at a particular point in time.
Sublease Space: Space that has been leased by a tenant and is
being offered for lease back to the market by the tenant with the lease
obligation. Sublease space is sometimes referred to as sublet space.
Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other
and constitute a generally accepted primary competitive set, or peer
group. Submarkets are building type specific (office, industrial, retail,
etc.), with distinct boundaries dependent on different factors relevant
to each building type. Submarkets are non-overlapping, contiguous
geographic designations having a cumulative sum that matches the
boundaries of the Market they are located within (See also: Market).
Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan
statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD)
Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant.
(See also: Single-tenant)
Tenant Rep: Tenant Rep stands for Tenant Representative. In a
typical lease transaction between an owner/landlord and tenant,
the broker that represents the interests of the tenant is referred to as
a Tenant Rep.
Time On Market: A measure of how long a currently available
space has been marketed for lease, regardless of whether it is vacant
or occupied.
Under Construction: Buildings in a state of construction, up
until they receive their certificate of occupancy. In order for CoStar to
consider a building under construction, the site must have a concrete
foundation in place. Abbreviated UC.
Vacancy Rate: A measurement expressed as a percentage of
the total amount of physically vacant space divided by the total
amount of existing inventory. Under construction space generally is
not included in vacancy calculations.
Vacant Space: Space that is not currently occupied by a tenant,
regardless of any lease obligation that may be on the space. Vacant
space could be space that is either available or not available. For
example, sublease space that is currently being paid for by a tenant
but not occupied by that tenant, would be considered vacant space.
Likewise, space that has been leased but not yet occupied because of
finish work being done, would also be considered vacant space.
Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated
with each particular rental rate. This has the effect of causing rental
rates on larger spaces to affect the average more than that of smaller
spaces. The weighted average rental rate is calculated by taking the
ratio of the square footage associated with the rental rate on each
individual available space to the square footage associated with rental
rates on all available spaces, multiplying the rental rate by that ratio,
and then adding together all the resulting numbers. Unless specifically
specified otherwise,rental rate averages include both Direct and Sublet
available spaces.
Year Built: The year in which a building completed construction
and was issued a certificate of occupancy.
YTD: Abbreviation for Year-to-Date. Describes statistics that are
cumulative from the beginning of a calendar year through whatever
time period is being studied.
Sales Volume: The sum of sales prices for a given group of buildings
in a given time period.
Seller: The individual, group, company, or entity that sells a particular
commercial real estate asset.
SF: Abbreviation for Square Feet.
Single-Tenant: Buildings that are occupied, or intended to be
occupied by a single tenant. (See also: Build-to-suit and Tenancy)
D
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Overview
Buffalo/Niagara Falls’s Vacancy Decreases to 9.8%
Net Absorption Positive 290,132 SF in the Quarter
T
he Buffalo/Niagara Falls Office market ended the
second quarter 2015 with a vacancy rate of 9.8%. The
vacancy rate was down over the previous quarter, with
net absorption totaling positive 290,132 square feet in the second quarter. Vacant sublease space increased in the quarter,
ending the quarter at 84,003 square feet. Rental rates ended
the second quarter at $14.89, a decrease over the previous
quarter. One building delivered to the market in the quarter
totaling 335,000 square feet, with 536,650 square feet still
under construction at the end of the quarter.
Absorption
Net absorption for the overall Buffalo/Niagara Falls office
market was positive 290,132 square feet in the second quarter
2015. That compares to negative (8,456) square feet in the first
quarter 2015, negative (27,405) square feet in the fourth quarter 2014, and positive 169,988 square feet in the third quarter
2014.
Tenants moving out of large blocks of space in 2015
include: Wendel Duschscherer moving out of 31,806 square
feet at 140 John James Audubon Pky; and TDCC Development
moving out of 15,682 square feet at 424 Main St.
Tenants moving into large blocks of space in 2015 include:
Albany Molecular Research Inc moving into 46,000 square
feet at 1001 Main St; Wendel Duschscherer moving into 31,806
square feet at 375 Essjay Rd; and Capstone Financial Group,
Inc. moving into 17,335 square feet at 8600 Transit Rd.
The Class-A office market recorded net absorption of positive 280,428 square feet in the second quarter 2015, compared
to positive 21,799 square feet in the first quarter 2015, negative
Vacancy Rates by Class
(6,711) in the fourth quarter 2014, and positive 138,686 in the
third quarter 2014.
The Class-B office market recorded net absorption of positive 5,415 square feet in the second quarter 2015, compared to
negative (10,933) square feet in the first quarter 2015, negative
(4,233) in the fourth quarter 2014, and positive 42,952 in the
third quarter 2014.
The Class-C office market recorded net absorption of
positive 4,289 square feet in the second quarter 2015 compared to negative (19,322) square feet in the first quarter 2015,
negative (16,461) in the fourth quarter 2014, and negative
(11,650) in the third quarter 2014.
Vacancy
The office vacancy rate in the Buffalo/Niagara Falls market area decreased to 9.8% at the end of the second quarter
2015. The vacancy rate was 9.9% at the end of the first quarter
2015, and 10.0% at the end of the third and fourth quarters of
2014.
Class-A projects reported a vacancy rate of 13.5% at the
end of the second quarter 2015, 13.4% at the end of the first
quarter 2015, and 13.6% at the end of the third and fourth
quarters of 2014.
Class-B projects reported a vacancy rate of 8.1% at the
end of the second quarter 2015, and 8.4% at the end of the
third quarter 2014 through the end of the first quarter 2015.
Class-C projects reported a vacancy rate of 9.2% at the
end of the second quarter 2015, 9.5% at the end of first quarter
2015, 9.2% at the end of the fourth quarter 2014, and 9.7% at
the end of the third quarter 2014.
2007-2015
A
B
C
Total Market
16%
14%
Vacancy Rate
12%
10%
8%
6%
4%
2%
0%
2007 1q
2008 1q
2009 1q
2010 1q
2011 1q
2012 1q
2013 1q
2014 1q
2015 1q
Source: CoStar Property®
Absorption & Deliveries
©2015 CoStar Group, Inc.
Past 8 Quarters
U.S. Vacancy Comparison
The CoStar Office Report
Past 8 Quarters
1
Buffalo/Niagara Falls � Mid-Year 2015
Buffalo/Niagara Falls Office Market
Overview
Largest Lease Signings
The largest lease signings occurring in 2015 included: the
50,218-square-foot lease signed by Department of Homeland
Security at 250 Delaware Ave in the Buffalo CBD market; the
34,000-square-foot deal signed by Goldberg Segalla LLP at
665 Main St in the Buffalo CBD market; and the 17,000-squarefoot lease signed by Kaleida Health at 705 Maple Rd in the
North market.
C
Sublease Vacancy
The amount of vacant sublease space in the Buffalo/
Niagara Falls market increased to 84,003 square feet by the
end of the second quarter 2015, from 81,339 square feet at
the end of the first quarter 2015. There was 81,339 square feet
vacant at the end of the third and fourth quarters of 2014.
Buffalo/Niagara Falls’s Class-A projects reported vacant
sublease space of 14,083 square feet during the reporting
period.
Class-B projects reported vacant sublease space of
Total Market
69,420
square feet at the end of the second quarter 2015, up
from the 67,256 square feet reported at the end of the third
quarter 2014 through the end of the first quarter 2015.
Class-C projects reported increased vacant sublease
space from the first quarter 2015 to the second quarter 2015.
Sublease vacancy went from no space available to 500 square
feet during that time.
Rental Rates
The average quoted asking rental rate for available office
space, all classes, was $14.89 per square foot per year at the
end of the second quarter 2015 in the Buffalo/Niagara Falls
market area. This represented a 0.5% decrease in quoted
rental rates from the end of the first quarter 2015, when rents
foot.
2011 1q were reported
2012 1q at $14.96
2013per
1q square2014
1q
2015 1q
The average quoted rate within the Class-A sector was
$17.87 at the end of the second quarter 2015, while Class-B
U.S. Vacancy Comparison
Past 8 Quarters
Buffalo/Niagara Falls
United States
14.0%
12.0%
Vacancy Rate
10.0%
8.0%
6.0%
4.0%
rates stood at $13.93, and Class-C rates at $10.39. At the end of
the first quarter 2015, Class-A rates were $18.16 per square foot,
Class-B rates were $13.94, and Class-C rates were $10.98.
Deliveries and Construction
During the second quarter 2015, one building totaling
335,000 square feet was completed in the Buffalo/Niagara
Falls market area. This compares to one building totaling
31,000 square feet that was completed in the first quarter
2015, and 177,870 square feet in three buildings completed in
the third quarter 2014.
There were 536,650 square feet of office space under construction at the end of the second quarter 2015.
Some of the notable 2015 deliveries include: 1001 Main st,
a 335,000-square-foot facility that delivered in second quarter
2015 and is now 71% occupied, and 590 Duke Rd, a 31,000square-foot building that delivered in first quarter 2015 and is
now 100% occupied.
The largest projects underway at the end of second
quarter 2015 were 250 Delaware Ave, a 211,000-square-foot
building with 98% of its space pre-leased, and 500 Seneca, a
180,000-square-foot facility that is 50% pre-leased.
Inventory
Total office inventory in the Buffalo/Niagara Falls market
area amounted to 37,325,185 square feet in 1,708 buildings as
of the end of the second quarter 2015. The Class-A office sector
consisted of 10,294,026 square feet in 66 projects. There were
790 Class-B buildings totaling 19,718,990 square feet, and the
Class-C sector consisted of 7,312,169 square feet in 852 buildings. Within the Office market there were 78 owner-occupied
buildings accounting for 1,038,303 square feet of office space.
Sales Activity
Tallying office building sales of 10,000 square feet or larger, Buffalo office sales figures remained about the same during
the second quarter 2015 in terms of dollar volume compared to
the first quarter 2015.
In the first quarter, eight office properties sold with a total
volume of $12,710,000. The properties sold with a total sales
volume of $12,170,000. 243,460 square feet were traded with
a price per square foot of $63.76.
In the first six months of 2015, Buffalo office building sales
have grossed $52,310,000 in 12 deals. There have been 661,790
square feet traded for an average price per square foot of
$52.00. The average cap rate for the year is 7.5%.
Total year-to-date 2014 office buildings traded with a total
volume of $74,010,000 in 20 market deals. The price per square
foot averaged $74 with 959,902 square feet of space sold.
2.0%
0.0%
2013 3q
2014 1q
2014 3q
2015 1q
Source: CoStar Property®
2
The CoStar Office Report
©2015 CoStar Group, Inc.
4%
2%
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
0%
2007 1q
The largest confirmed transactions of 2015 include: 1001
Main St in Buffalo, the 47,000 square foot condo that sold for
$9,325,924 or $198.42 per square foot on 1/28/2015; 20-40 East
Ave. 50 Main St and 111 Main St in Lockport, a 133,358 square
foot portfolio that sold on 4/20/2015 for $3,780,000 or $28.34
per square foot; and 891 Delaware Ave, a 19,794 square foot
property in Buffalo that traded for $1,325,000 or $66.94 per
square foot on 1/27/2015.
Reports compiled by: Jeannine Dudzinski
2008 1q
2009 1q
2010 1q
201
Source: CoStar Property®
Absorption & Deliveries
Past 8 Quarters
Net Absorption
Deliveries
0.4
0.34
0.29
0.3
0.18
0.16 0.17
0.2
0.1
Millions SF
Overview
0.00
0.00
0.01
0.00
0.03
0.0
(0.1)
(0.01)
(0.02)
(0.03)
(0.01)
(0.09)
(0.2)
(0.3)
(0.4)
(0.5)
(0.6)
(0.56)
(0.7)
2013 3q
2014 1q
2014 3q
2015 1q
Source: CoStar Property®
©2015 CoStar Group, Inc.
The CoStar Office Report
3
Buffalo/Niagara Falls � Mid-Year 2015
Buffalo/Niagara Falls Office Market
Markets
CoStar Submarkets
In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called
Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large
population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets
are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive
with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called
Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally
accepted competitive set, or peer group.
Submarket Clusters
Buffalo CBD
East
Greater Buffalo
Niagara Falls
North
South
4
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Inventory & development
Historical Deliveries
1982 - 2015
Deliveries
1.4
Average Delivered SF
1.3
1.2
1.0
Millions of SF
1.0
0.9
0.8
0.8
0.8
0.7
0.6
0.5
0.5
0.4 0.4
0.4
0.4
0.4
0.6
0.6
0.6
0.2
0.8
0.3
0.3
0.4
0.3
0.4
0.2
0.2
0.1
0.1
0.1
0.4
0.3 0.3
0.2
0.0 0.0 0.0 0.0
0.0
1982
1986
Source: CoStar Property®
1990
1994
1998
2002
2006
2010
2014
* Future deliveries based on current under construction buildings.
Construction Activity
Markets Ranked by Under Construction Square Footage
Under Construction Inventory
# Bldgs
Market
Total RBA
Average Bldg Size
Preleased SF
Preleased %
All Existing
U/C
Buffalo CBD
1
211,000
206,780
98.0%
45,358
211,000
Greater Buffalo
1
180,000
90,000
50.0%
25,623
180,000
East
1
97,000
97,000
100.0%
16,494
97,000
North
1
36,650
36,650
100.0%
16,246
36,650
Niagara Falls
1
22,000
22,000
100.0%
18,669
22,000
South
0
Totals
5
0
0
546,650
452,430
0.0%
82.8%
10,607
21,853
0
109,330
Source: CoStar Property®
Recent Deliveries
Future Deliveries
Leased & Un-Leased SF in Deliveries Since 2011
Preleased & Un-Leased SF in Properties Scheduled to Deliver
Leased
Un-Leased
Preleased
0.4
Un-Leased
300
0.4
250
Thousands of SF
0.3
0.2
0.2
200
T
Millions of SF
0.3
150
100
0.1
50
0.1
0.0
0
2011
Source: CoStar Property®
©2015 CoStar Group, Inc.
2013
2015
2015 3q
Source: CoStar Property®
The CoStar Office Report
5
Buffalo/Niagara Falls � Mid-Year 2015
Buffalo/Niagara Falls Office Market
Inventory & development
Historical Construction Starts & Deliveries
Square Footage Per Quarter Starting and Completing Construction
Construction Starts
0.6
0.49
0.5
Millions of SF
Deliveries
0.4
0.34
0.3
0.24
0.18
0.2
0.14
0.12
0.1
0.03
0.00
0.000.00
0.000.00
0.00
0.18
0.16
0.00
0.010.02
0.05
0.00
0.01
0.00
0.00
0.04
0.03
0.00
0.02
0.00
0.0
2012 1q
2013 1q
2014 1q
2015 1q
Source: CoStar Property®
Recent Deliveries by Project Size
Building Size
# Bldgs
RBA
Breakdown of Year-to-Date Development Based on RBA of Project
SF Leased
31,000
Avg Rate
31,000
0
50,000 SF - 99,999 SF
0
0
0
0.0%
$0.00
0
0
100,000 SF - 249,999 SF
0
0
0
0.0%
$0.00
0
0
250,000 SF - 499,999 SF
1
71.0%
$0.00
0
>= 500,000 SF
0
0.0%
$0.00
0
0
0
$0.00
Multi-Tenant
1
237,850
100.0%
Single-Tenant
< 50,000 SF
335,000
31,000
% Leased
335,000
0
Source: CoStar Property®
Recent Development by Tenancy
Existing Inventory Comparison
Based on RBA Developed for Single & Multi Tenant Use
Based on Total RBA
2015 Deliveries
8%
Currently Under Construction
By Class
By Space Type
20%
22%
22%
28%
Multi
52%
78%
92%
Single
Multi
Class A
Single
Source: CoStar Property®
6
78%
Class B
Class C
Multi
Single
Source: CoStar Property®
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Inventory & development
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©2015 CoStar Group, Inc.
The CoStar Office Report
7
Buffalo/Niagara Falls � Mid-Year 2015
Buffalo/Niagara Falls Office Market
Figures at a Glance
Class A Market Statistics
Mid-Year 2015
Existing Inventory
Market
# Blds
Buffalo CBD
26
East
Total RBA
Vacancy
YTD Net
YTD
Under
Const SF
Direct SF
Total SF
Vac %
Absorption
Deliveries
6,057,393
1,189,448
1,192,626
19.7%
245,855
335,000
Quoted
Rates
211,000
$17.80
$20.90
21
1,902,392
61,556
61,556
3.2%
37,000
0
97,000
Greater Buffalo
4
1,045,402
41,128
52,033
5.0%
19,372
0
180,000
$16.73
Niagara Falls
1
6,458
6,458
6.8%
0
22,000
$15.00
1,027,847
48,013
48,013
4.7%
0
0
36,650
166,692
28,291
28,291
17.0%
0
0
North
11
South
3
Totals
66
94,300
10,294,026
1,374,894
1,388,977
13.5%
0
302,227
335,000
0
546,650
$15.35
$16.76
$17.87
Source: CoStar Property®
Class B Market Statistics
Mid-Year 2015
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
Buffalo CBD
171
6,857,357
470,666
476,905
7.0%
(89,366)
East
197
3,889,632
184,696
186,860
4.8%
68,389
Greater Buffalo
59
1,807,107
164,573
164,573
9.1%
42,000
Niagara Falls
24
925,797
96,394
96,394
10.4%
North
227
4,570,527
469,481
521,998
11.4%
4,675
South
112
1,668,570
134,081
142,581
8.5%
(31,216)
Totals
790
19,718,990
1,519,891
1,589,311
8.1%
(5,518)
0
31,000
0
0
$14.62
0
$13.36
0
0
$9.47
0
0
$14.47
0
0
$14.37
0
0
$15.33
31,000
0
$13.93
Source: CoStar Property®
Class C Market Statistics
Mid-Year 2015
Existing Inventory
Market
# Blds
Total RBA
Buffalo CBD
125
1,690,594
East
Vacancy
Direct SF
213,676
Total SF
213,676
Vac %
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
Quoted
Rates
12.6%
(21,850)
0
0
$13.13
$11.19
239
1,745,666
74,711
75,211
4.3%
3,941
0
0
Greater Buffalo
76
709,026
125,060
125,060
17.6%
905
0
0
$9.23
Niagara Falls
56
492,066
97,721
97,721
19.9%
11,933
0
0
$3.35
North
221
1,858,452
102,725
102,725
5.5%
(3,938)
0
0
$11.63
South
135
816,365
55,421
55,421
6.8%
(6,024)
0
0
$12.80
Totals
852
7,312,169
669,314
669,814
9.2%
(15,033)
0
0
$10.39
Source: CoStar Property®
Total Office Market Statistics
Mid-Year 2015
Existing Inventory
Market
# Blds
Vacancy
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
Total RBA
Direct SF
Total SF
Vac %
12.9%
134,639
335,000
4.3%
109,330
31,000
Buffalo CBD
322
14,605,344
1,873,790
1,883,207
East
457
7,537,690
320,963
323,627
Greater Buffalo
139
3,561,535
330,761
341,666
9.6%
62,277
0
180,000
$11.50
81
1,512,163
200,573
200,573
13.3%
11,933
0
22,000
$12.55
620,219
672,736
9.0%
0
36,650
$14.10
Niagara Falls
North
459
7,456,826
South
250
2,651,627
Totals
1,708
37,325,185
737
217,793
226,293
8.5%
(37,240)
3,564,099
3,648,102
9.8%
281,676
0
366,000
211,000
$16.72
97,000
$14.43
0
546,650
$14.57
$14.89
Source: CoStar Property®
8
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Figures at a Glance
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©2015 CoStar Group, Inc.
The CoStar Office Report
9
Buffalo/Niagara Falls � Mid-Year 2015
Buffalo/Niagara Falls Office Market
Leasing Activity
Historical Rental Rates
Based on Full-Service Equivalent Rental Rates
A
B
C
Total Market
$25.00
         
$20.00
$15.00
$10.00
$5.00
1q
20
14
20
15
1q
1q
20
13
20
12
20
10
1q
20
11
1q
1q
1q
20
09
20
08
20
07
1q
1q
$0.00
Source: CoStar Property®
Vacancy by Available Space Type
Vacancy by Class
Percent of All Vacant Space in Direct vs. Sublet
Percent of All Vacant Space by Class
Buffalo/Niagara Falls
2%
United States
Buffalo/Niagara Falls
18%
4%
44%
98%
Direct
United States
16%
35%
49%
38%
96%
Sublet
Direct
Class A
Sublet
Source: CoStar Property®
Class B
Class C
Class A
Class B
Class C
Source: CoStar Property®
U.S. Rental Rate Comparison
Future Space Available
Based on Full-Service Equivalent Rental Rates
Space Scheduled to be Available for Occupancy*
Buffalo/Niagara Falls
United States
$25.00
0.3
0.28
0.3
          
$20.00
0.2
$15.00
0.2
$10.00
0.1
$5.00
0.1
$0.00
0.0
0.04
0.00
2013 3q
Source: CoStar Property®
10
2015 3q
2014 3q
* Includes Under Construction Spaces
The CoStar Office Report
0.00
2016 1q
0.00
0.00
2016 3q
Source: CoStar Property®
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
Leasing Activity
Select Top O�ce Leases
Based on Leased Square Footage For Deals Signed in 2015
Building
Submarket
SF
Qtr
Tenant Name
Tenant Rep Company
Landlord Rep Company
1
250 Delaware Ave
Bu�alo CBD
50,218
1st
Department of Homeland Security
N/A
Uniland Development Co.
2
665 Main St*
Bu�alo CBD
34,000
2nd
Goldberg Segalla LLP
N/A
McGuire Development Company
3
705 Maple Rd
North
17,000
1st
Kaleida Health
N/A
Benderson Dev Co, LLC
4
500 Seneca
Greater Bu�alo
13,000
2nd
Liberty Mutual Corp.
N/A
Savarino Companies
5
250 Delaware Ave
Bu�alo CBD
12,000
1st
KeyBank
N/A
Uniland Development Co.
6
5214 Main St
North
10,000
1st
N/A
N/A
CBRE Bu�alo
7
369 Washington St
Bu�alo CBD
7,000
2nd
M&T Bank
N/A
IS Lofts
8
90 Bryant Woods S
North
3,900
1st
Software Solutions Group Inc
N/A
RealtyUSA
9
2805 Wehrle Dr
East
2,604
1st
Lisa J Allen PLLC
N/A
North Forest O�ce Providers
10
2821 Wehrle Dr
East
2,604
1st
N/A
N/A
North Forest O�ce Providers
11
2390 N Forest Rd
North
2,556
1st
Kanoodle.com, Inc.
N/A
North Forest O�ce Providers
12
6779 Main St
East
2,500
1st
N/A
N/A
Coldwell Banker Comm Meridian
13
168-170 Franklin St
Bu�alo CBD
2,400
1st
N/A
N/A
Ellicott Development
14
500 Bu�alo Rd
South
2,300
2nd
Awakenings
N/A
N/A
15
250 Delaware Ave
Bu�alo CBD
2,000
2nd
The Cullen Foundation
N/A
Uniland Development Co.
16
2805 Wehrle Dr
East
1,953
1st
Bu�alo Computer Help
N/A
North Forest O�ce Providers
17
601 Division St
North
1,880
2nd
Andrzejewski Agency, Inc.
N/A
Coldwell Banker Comm Meridian
18
437 Franklin St
Bu�alo CBD
1,750
1st
N/A
N/A
Sinatra and Company
19
3457 Clinton St
South
1,722
2nd
N/A
N/A
Pyramid Brokerage Company
20
5762 Main St
East
1,500
2nd
Partners
N/A
Giammusso Development, Inc.
Source: CoStar Property®
* Renewal
©2015 CoStar Group, Inc.
The CoStar Office Report
11
Buffalo/Niagara Falls – Mid-Year 2015
Buffalo/Niagara Falls Office Market
B u f f a l o
C B D
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Delivered SF
0.400
Absorption SF
Vacancy
14.0%
0.200
12.0%
0.000
10.0%
(0.200)
8.0%
(0.400)
6.0%
(0.600)
4.0%
(0.800)
2.0%
(1.000)
Percent Vacant
Millions SF
Historical Analysis, All Classes
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.90
$17.10
Sublet SF
$17.00
1.88
$16.90
Dollars/SF/Year
1.86
Millions SF
1.84
1.82
1.80
1.78
$16.80
$16.70
$16.60
$16.50
1.76
$16.40
1.74
$16.30
1.72
$16.20
1.70
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
322
14,605,344
Vacancy
Vacant SF
Vacancy %
1,883,207
12.9%
Net
Absorption
253,409
Delivered Inventory
# Bldgs
Total RBA
1
335,000
UC Inventory
# Bldgs
Total RBA
1
211,000
Quoted
Rates
$16.72
2015 1q
323
14,348,671
1,879,943
13.1%
(118,770)
0
0
2
546,000
2014 4q
324
14,365,771
1,778,273
12.4%
(11,061)
0
0
2
546,000
$16.81
2014 3q
326
14,425,771
1,827,212
12.7%
141,039
2
546,000
$16.52
3
685,000
$16.53
3
502,500
$16.94
1
139,000
28,500
$17.03
2014 2q
325
14,286,771
1,829,251
12.8%
(20,002)
1
2014 1q
324
14,258,271
1,780,749
12.5%
(5,270)
0
2013 4q
324
14,258,271
1,775,479
12.5%
(770,182)
0
0
3
502,500
$16.18
2013 3q
324
14,258,271
1,005,297
7.1%
(41,701)
0
0
3
502,500
$16.44
2013 2q
324
14,258,271
963,596
6.8%
(456)
0
0
2
474,000
$16.47
2013 1q
324
14,258,271
963,140
6.8%
(3,140)
0
0
2
474,000
$16.81
2012 4q
324
14,258,271
960,000
6.7%
42,961
0
0
1
139,000
2012 3q
324
14,258,271
1,002,961
7.0%
37,560
0
0
0
2012 2q
324
14,258,271
1,040,521
7.3%
19,985
0
0
2012 1q
324
14,258,271
1,060,506
7.4%
(53,547)
0
0
2011 4q
324
14,258,271
1,006,959
7.1%
16,419
0
0
2011 3q
324
14,258,271
1,023,378
7.2%
4,555
0
0
0
$16.15
0
$16.53
0
0
$16.63
0
0
$17.23
0
0
$15.80
0
0
$16.40
Source: CoStar Property®
12
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
E a s t
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Historical Analysis, All Classes
Delivered SF
0.120
Absorption SF
Vacancy
7.0%
0.100
6.0%
0.080
Millions SF
0.040
4.0%
0.020
3.0%
0.000
(0.020)
Percent Vacant
5.0%
0.060
2.0%
(0.040)
1.0%
(0.060)
(0.080)
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.50
$16.00
Sublet SF
0.45
$15.50
Dollars/SF/Year
0.40
Millions SF
0.35
0.30
0.25
0.20
$15.00
$14.50
$14.00
0.15
0.10
$13.50
0.05
$13.00
0.00
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
457
7,537,690
Vacancy
Vacant SF
Vacancy %
323,627
4.3%
Net
Absorption
4,878
Delivered Inventory
# Bldgs
Total RBA
0
0
2015 1q
457
7,537,690
328,505
4.4%
104,452
1
2014 4q
458
7,539,690
434,957
5.8%
(58,600)
0
31,000
2014 3q
458
7,539,690
376,357
5.0%
(23,385)
0
0
2014 2q
458
7,539,690
352,972
4.7%
30,593
0
0
2014 1q
458
7,539,690
383,565
5.1%
(27,969)
0
0
2013 4q
458
7,539,690
355,596
4.7%
(1,242)
0
2013 3q
458
7,539,690
354,354
4.7%
(5,494)
0
2013 2q
458
7,539,690
348,860
4.6%
(15,176)
2013 1q
458
7,539,690
333,684
4.4%
2012 4q
458
7,539,690
356,645
4.7%
2012 3q
458
7,539,690
406,611
5.4%
2012 2q
458
7,539,690
411,692
2012 1q
458
7,539,690
466,165
2011 4q
456
7,511,915
2011 3q
456
7,511,915
UC Inventory
# Bldgs
Total RBA
1
97,000
Quoted
Rates
$14.43
1
97,000
$14.11
2
128,000
$14.57
2
128,000
$14.50
2
128,000
$15.82
1
97,000
$15.50
0
1
97,000
$15.49
0
0
0
$15.73
0
0
0
0
$15.82
22,961
0
0
0
0
$15.66
49,966
0
0
0
0
$15.81
5,081
0
0
0
0
$15.94
5.5%
54,473
0
0
0
0
$15.86
6.2%
27,258
2
0
0
$15.83
465,648
6.2%
(8,980)
0
0
2
27,775
$16.62
456,668
6.1%
62,935
0
0
2
27,775
$15.93
0
27,775
Source: CoStar Property®
©2015 CoStar Group, Inc.
The CoStar Office Report
13
Buffalo/Niagara Falls – Mid-Year 2015
Buffalo/Niagara Falls Office Market
G r e a t e r
B u f f a l o
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Delivered SF
Absorption SF
Vacancy
14.0%
0.150
12.0%
0.100
10.0%
0.050
8.0%
0.000
6.0%
(0.050)
4.0%
(0.100)
2.0%
(0.150)
Percent Vacant
Millions SF
0.200
Historical Analysis, All Classes
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.50
$14.00
Sublet SF
0.45
$12.00
Dollars/SF/Year
0.40
Millions SF
0.35
0.30
0.25
0.20
$10.00
$8.00
$6.00
$4.00
0.15
0.10
$2.00
0.05
$0.00
0.00
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
139
3,561,535
Vacancy
Vacant SF
Vacancy %
341,666
9.6%
Net
Absorption
55,777
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
1
180,000
Quoted
Rates
$11.50
2015 1q
139
3,561,535
397,443
11.2%
6,500
0
0
1
180,000
$9.18
2014 4q
139
3,561,535
403,943
11.3%
(5,610)
0
0
1
180,000
$9.57
2014 3q
139
3,561,535
398,333
11.2%
(18,937)
0
0
1
180,000
$9.12
2014 2q
140
3,628,115
445,976
12.3%
(115,571)
1
1
180,000
$8.63
$8.52
135,000
2014 1q
139
3,493,115
195,405
5.6%
5,222
0
0
2
315,000
2013 4q
139
3,493,115
200,627
5.7%
167,333
0
0
1
135,000
$8.25
2013 3q
139
3,493,115
367,960
10.5%
(18,420)
0
0
1
135,000
$8.43
$8.86
2013 2q
139
3,493,115
349,540
10.0%
7,728
0
0
1
135,000
2013 1q
139
3,493,115
357,268
10.2%
(1,964)
0
0
1
135,000
2012 4q
139
3,493,115
355,304
10.2%
0
0
0
2012 3q
139
3,493,115
355,487
10.2%
0
0
2012 2q
139
3,493,115
354,036
10.1%
46,476
0
0
2012 1q
139
3,493,115
400,512
11.5%
4,069
0
0
0
2011 4q
139
3,493,115
404,581
11.6%
(6,400)
0
0
0
0
$9.19
2011 3q
139
3,493,115
398,181
11.4%
41,700
0
0
0
0
$9.22
183
(1,451)
$8.79
0
$8.87
0
0
$8.48
0
0
$8.79
0
$8.88
Source: CoStar Property®
14
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
N i a g a r a
F a l l s
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Historical Analysis, All Classes
Delivered SF
0.015
Absorption SF
Vacancy
16.0%
0.010
14.0%
0.005
12.0%
(0.005)
10.0%
(0.010)
8.0%
(0.015)
(0.020)
6.0%
(0.025)
4.0%
Percent Vacant
Millions SF
0.000
(0.030)
2.0%
(0.035)
(0.040)
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.25
$14.00
Sublet SF
$13.50
Dollars/SF/Year
Millions SF
0.20
0.15
0.10
$12.50
$12.00
0.05
$11.50
0.00
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
$13.00
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
81
1,512,163
Vacancy
Vacant SF
Vacancy %
200,573
13.3%
2015 1q
81
1,512,163
207,673
13.7%
2014 4q
81
1,512,163
212,506
14.1%
2014 3q
81
1,512,163
212,506
14.1%
2014 2q
81
1,512,163
178,633
2014 1q
81
1,512,163
2013 4q
81
1,512,163
2013 3q
81
1,512,163
2013 2q
81
2013 1q
Net
Absorption
7,100
Delivered Inventory
# Bldgs
Total RBA
0
0
4,833
UC Inventory
# Bldgs
Total RBA
1
22,000
Quoted
Rates
$12.55
0
0
1
22,000
$13.66
0
0
1
22,000
$12.26
(33,873)
0
0
0
0
$12.26
11.8%
(3,580)
0
0
0
0
$12.56
175,053
11.6%
(20,000)
0
0
0
0
$13.68
155,053
10.3%
1,000
0
0
0
0
$13.70
156,053
10.3%
600
0
0
0
0
$13.73
1,512,163
156,653
10.4%
(7,747)
0
0
0
0
$11.83
81
1,512,163
148,906
9.8%
(12,830)
0
0
0
0
$10.65
2012 4q
81
1,512,163
136,076
9.0%
3,304
0
0
0
0
$10.72
2012 3q
81
1,512,163
139,380
9.2%
(15,932)
0
0
0
0
$10.30
2012 2q
81
1,512,163
123,448
8.2%
(10,410)
0
0
0
0
$10.79
2012 1q
81
1,512,163
113,038
7.5%
9,232
0
0
0
0
$10.64
0
2011 4q
81
1,512,163
122,270
8.1%
(11,298)
0
0
0
0
$10.56
2011 3q
81
1,512,163
110,972
7.3%
15,700
0
0
0
0
$10.23
Source: CoStar Property®
©2015 CoStar Group, Inc.
The CoStar Office Report
15
Buffalo/Niagara Falls – Mid-Year 2015
Buffalo/Niagara Falls Office Market
N o r t h
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Historical Analysis, All Classes
Delivered SF
0.080
Absorption SF
Vacancy
14.0%
0.060
12.0%
10.0%
0.020
0.000
8.0%
(0.020)
6.0%
(0.040)
Percent Vacant
Millions SF
0.040
4.0%
(0.060)
2.0%
(0.080)
(0.100)
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.80
$16.00
Sublet SF
0.70
$15.50
Dollars/SF/Year
Millions SF
0.60
0.50
0.40
0.30
$15.00
$14.50
$14.00
0.20
$13.50
0.10
$13.00
0.00
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
459
7,456,826
Vacancy
Vacant SF
Vacancy %
672,736
9.0%
Net
Absorption
6,940
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
1
36,650
Quoted
Rates
$14.10
2015 1q
459
7,456,826
679,676
9.1%
(6,203)
0
0
0
0
$14.20
2014 4q
459
7,456,826
673,473
9.0%
48,362
0
0
0
0
$14.26
2014 3q
459
7,456,826
721,835
9.7%
51,017
2
0
0
2014 2q
457
7,417,956
733,982
9.9%
15,478
0
2014 1q
458
7,419,246
750,750
10.1%
29,904
0
0
2
38,870
$14.59
2013 4q
458
7,419,246
780,654
10.5%
41,965
0
0
2
38,870
$14.54
1
18,870
$15.67
38,870
0
0
2
38,870
$15.41
$14.53
2013 3q
458
7,419,246
822,619
11.1%
66,028
0
2013 2q
458
7,419,246
888,647
12.0%
(14,902)
1
2013 1q
457
7,399,246
853,745
11.5%
(76,973)
0
2012 4q
457
7,399,246
776,772
10.5%
(17,281)
0
0
0
0
$14.91
2012 3q
457
7,399,246
759,491
10.3%
(5,554)
0
0
0
0
$15.36
2012 2q
457
7,399,246
753,937
10.2%
7,485
0
0
0
0
$14.60
2012 1q
457
7,399,246
761,422
10.3%
12,392
0
0
0
0
$14.68
2011 4q
457
7,399,246
773,814
10.5%
(37,605)
0
0
0
0
$14.27
2011 3q
457
7,399,246
736,209
9.9%
109,074
0
0
0
0
$14.71
20,000
0
0
1
0
20,000
$14.75
$14.92
Source: CoStar Property®
16
The CoStar Office Report
©2015 CoStar Group, Inc.
Mid-Year 2015 – Buffalo/Niagara Falls
Buffalo/Niagara Falls Office Market
S o u t h
M a r k e t
Market Highlights – Class “A, B & C”
Deliveries, Absorption & Vacancy
Delivered SF
0.060
Absorption SF
Vacancy
12.0%
0.040
10.0%
0.020
8.0%
0.000
6.0%
(0.020)
4.0%
(0.040)
2.0%
(0.060)
Percent Vacant
Millions SF
Historical Analysis, All Classes
0.0%
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
2013 4q
2014 1q
2014 2q
2014 3q
2014 4q
2015 1q
2015 2q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.30
$15.50
Sublet SF
$15.00
Dollars/SF/Year
0.25
Millions SF
0.20
0.15
0.10
$14.00
$13.50
$13.00
0.05
$12.50
0.00
2014 1q
2014 3q
2014 1q
2015 1q
Source: CoStar Property®
Period
2015 2q
$14.50
2014 3q
2015 1q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
250
2,651,627
Vacancy
Vacant SF
Vacancy %
226,293
8.5%
Net
Absorption
(37,972)
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
0
0
Quoted
Rates
$14.57
2015 1q
250
2,651,627
188,321
7.1%
732
0
0
0
0
2014 4q
251
2,657,627
195,053
7.3%
(496)
0
0
0
0
$15.10
2014 3q
251
2,657,627
194,557
7.3%
54,127
0
0
0
0
$13.97
2014 2q
251
2,657,627
248,684
9.4%
2,890
0
0
0
0
$13.64
2014 1q
251
2,657,627
251,574
9.5%
2,865
1
0
0
2013 4q
250
2,644,607
241,419
9.1%
(885)
0
13,020
0
1
13,020
$14.34
$13.42
$15.08
2013 3q
250
2,644,607
240,534
9.1%
0
0
1
13,020
$14.19
2013 2q
250
2,644,607
232,392
8.8%
30,693
0
0
1
13,020
$13.72
2013 1q
250
2,644,607
263,085
9.9%
30,796
0
0
0
0
$13.72
2012 4q
250
2,644,607
293,881
11.1%
(5,740)
0
0
0
0
$14.49
2012 3q
250
2,644,607
288,141
10.9%
2,267
0
0
0
0
$14.89
2012 2q
250
2,644,607
290,408
11.0%
8,975
0
0
0
0
$14.74
2012 1q
250
2,644,607
299,383
11.3%
9,710
0
0
0
0
$15.83
(8,142)
2011 4q
250
2,644,607
309,093
11.7%
17,177
0
0
0
0
$16.92
2011 3q
250
2,644,607
326,270
12.3%
(13,684)
0
0
0
0
$15.16
Source: CoStar Property®
©2015 CoStar Group, Inc.
The CoStar Office Report
17

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