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Office Market-Vacancy and Absorption-2nd Quarter 2016
<br /> Absorption
<br /> Total#of Sublease Percent Percent Vacant w/ 2nd Half 1st Half
<br /> Submarket Buildings NRA Vacant Space Space Vacant Sublease 2015 2016
<br /> Northwest
<br /> Class A 12 739,704 99,656 0 13.50% 13.50% (644) 5,501
<br /> Class B 16 1,102,734 263,563 1,386 23.90% 24.00% 27,286 33,131
<br /> Class C 7 399,273 123,057 0 30.80% 30.80% (11,801) (31,869)
<br /> Total Northwest 35 2,241,711 486,276 1,386 21.70% 21.80% 14,841 6,763
<br /> Office Market-Vacancy and Absorption- Quarter 2016
<br /> Absorption
<br /> Total#of Sublease Percent Percent Vacant w/ 2nd Half 1st Half
<br /> Submarket Buildings NRA Vacant Space Space Vacant Sublease 2015 2016
<br /> Total Market
<br /> Class A 158 33,688,668 4,412,599 507,362 13.10% 14.60% 64,214 (77,442)
<br /> Class B 350 31,449,970 5,826,262 438,611 18.50% 19.90% 357,326 132,181
<br /> Class C 116 6,211,457 905,146 32,339 14.60% 15.10% 92,551 96,856
<br /> TOTAL MARKET 624 71,350,095 11,144,007 978,312 15.60% 17.00% 514,091 151,595
<br /> Retail Vacancy and Absorption-Ist Half 2016
<br /> Absorption
<br /> Total#Of Sublease Percent Percent Vacant w/ 1st Half 2nd Half 1st Half
<br /> Submarket Buildings NRA Vacant Space Space Vacant Sublease 2015 2015 2016
<br /> Community 124 31,669,481 1,774,602 195,272 5.60% 6.20% 3,563 100,193 167,044
<br /> Minneapolis CBD 18 1,319,301 186,848 0 14.20% 14.20% 12,431 7,857 85,094
<br /> Neighborhood 309 20,194,375 1,726,324 67,930 8.50% 8.90% 111,018 271,635 (22,923)
<br /> Outlet Mall 4 1,197,440 74,350 0 6.20% 6.20% 0 0 (4,000)
<br /> Regional 8 10,981,097 475,012 0 4.30% 4.30% 69,630 242,669 68,205
<br /> Specialty 22 2,342,341 321,375 0 13.70% 13.70% (4,929) 74,292 (30,127)
<br /> St.Paul CBD 9 368,737 12,596 0 3.40% 3.40% 0 (2,304) 0
<br /> TOTAL MARKET
<br /> We have included an 7.00% vacancy rate and a 2.00% collection loss for the subject property,
<br /> based primarily on the reported local/neighborhood vacancy in conjunction with the subject's
<br /> historic owner-occupancy. Deducting vacancy and collection loss from potential gross income,
<br /> we arrive at effective gross income.
<br /> Total Effective Gross Income (EGI)
<br /> By adding the Potential Gross Rent and Expense Reimbursements, and then deducting for
<br /> vacancy/collection loss, the resulting subject's EGI is projected to be $156,589 for the 12-month
<br /> period following the effective date of the appraisal.
<br /> Operating Expense Analysis
<br /> Typical terms of leases in the subject's submarket are on a net basis which means that the tenant
<br /> is responsible for most operating expenses. Projected expenses are for the 12-month period
<br /> following the effective date of the appraisal.
<br /> We present the following table from the NorthMarq Compass report that shows average net rent
<br /> and expense data relevant to the subject:
<br /> 99
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