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CBRE <br />Minneapolis/St. Paul Office, Q1 2020 <br />Diverse economy drives Q1 2020 <br />leasing and absorption <br />Vacancy Rate <br />18.7% <br />NNN Asking Rate <br />$15.67 PSF <br />ONet Absorption <br />78,661 SF <br />O <br />Under Construction <br />847,280 sq. ft. <br />Figure 1: Historic Annual NNN Asking Rate <br />S Per Sq. Ft. NNN <br />20.00 <br />18.00 <br />16.00 <br />14.00 <br />12.00 <br />10.00 <br />8.00 <br />6.00 <br />4.00 <br />2.00 <br />0.00 <br />"Arrows indicate change from previous quarter. <br />2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020YTD <br />Class A NNN Asking Rent Class B NNN Asking Rent Class C NNN Asking Rent i0verall Net Asking Rate <br />Source: CBRE Research, 01 2020. <br />• The year started strong with positive <br />absorption of 78,661 sq. ft. in Q1 2020 <br />• A total of 38 leases for nearly 1.2 million sq. <br />ft. in Q1 2020 were among the strongest <br />results in the past two years <br />• Net asking rates rose to $15.67 per sq. ft. a <br />2.4% year -over -year increase <br />• Investment sales included the $130 million <br />sale of the recently -renovated West End <br />Office Park <br />MARKET OVERVIEW <br />The diverse Minneapolis/St. Paul economy was <br />reflected with Health Care, Insurance and Tech <br />driving nearly 1.2 million sq. ft. of leasing in Q1 <br />2020. Tenants and investors continued to favor high - <br />amenity, well -located office. <br />Overall net asking rates rose to $15.67 per sq. ft. for <br />the Minneapolis/St. Paul market. Class A net asking <br />rates in the 394 Corridor reached $19.92 per sq. ft., <br />increased to $19.16 in the Minneapolis CBD and are <br />$18.10 overall. <br />Q1 2020 CBRE Research © 2020 CBRE, Inc. I 1 <br />