2. HOUSTON OFFICE MARKET STATISTICS FOR ALL CLASS
198M SF
3.2M SF YTD Net Absorption
14.2% Vacancy Rate
$23.61/SF Average Rental Rate
4.1M SF Under Construction
8.6 M SF Proposed
Class A Submarket Statistics Economic Indicators
• 93M SF of Inventory Job Growth & Unemployment
(Not Seasonally Adjusted)
• 2.8M SF YTD Net Absorption
• 11.6% Vacancy Rate
UNEMPLOYMENT 10/11 10/12
• $29.96/SF Average Rental Rate
Houston 7.7% 6.2%
• 4.1M SF Under Construction
Texas 7.6% 6.3%
• 4.1M SF Proposed
U.S. 8.5% 7.5%
ANNUAL # OF JOBS
Class B Submarket Statistics JOB GROWTH CHANGE ADDED
Houston led
• 85M SF of Inventory Houston 3.6% 96K the state in annual
• 363,000 SF YTD Net Absorption Texas 2.6% 276K job growth adding
96,000 jobs between
• 16.7% Vacancy Rate U.S. 1.4% 1.9M
October 2011 and
• $19.29/SF Average Rental Rate October 2012!
4. CBD OFFICE SUBMARKET - 8M SF ALLEN CENTER COMPLEX
• Hess relocated to Discovery Green
Class A Submarket Statistics Class B Submarket Statistics • Kinder Morgan acquired El Paso
• 26M SF of Inventory • 9.8M SF of Inventory • Continental merger with United
• 617,000 SF YTD Net Absorption • 85,800 SF YTD Net Absorption
• 10.9% Vacancy Rate • 18.0% Vacancy Rate
• Devon moving to OKC
• $36.85/SF Average Rental Rate • $24.00/SF Average Rental Rate Over 1M SF available for lease
• 0 SF Under Construction • 0 SF Under Construction
• 0 SF Proposed • 0 SF Proposed Opportunity or Concern?
HIGHLIGHTS
• DEVON ENERGY CORPORATION - 880k sf originally in 1999; 550k sf now. Some subleased to ENI and Copano, but 425k sf will be
vacated in 1Q2013, the majority of which is in 2 Allen Center (1200 Smith).
• HESS CORPORATION - Hess Corp leased all of the 845k sf newly constructed (2011) office tower at 1501 McKinney St.
• KBR/HALLIBURTON - Occupies 900,000 SF in the 1M SF KBR Tower which was just purchased for $174.6M (or $167/
SF) by a non traded REIT affiliate of New York based W.P. Carey Inc. The seller was a joint venture between KBR and Brookfield.
KBR’s lease doesn’t expire until 2030.
• UNITED AIRLINES - Merged/Acquired Continental Airlines 4Q2011. 141,990 SF of vacant space currently available in 1600 Smith
• BG GROUP - Leased floors 22-34 in the newest CBD tower (972k sf) built by Hines in 2011. Eight full floors (216k sf) of the
46-story tower are still available for lease.
Major Tenants
• BG Group • El Paso Corporation • PricewaterhouseCoopers
• Calpine Corporation • Enterprise Products Partners • Reliant Energy, NRG
• CenterPoint Energy • Ernst & Young • Shell Oil Company
• Chase Bank • ExxonMobil Corporation • United Airlines
• Chevron Corporation • Hess Corporation • Waste Management, Inc.
• Deloitte • KBR • Wells Fargo
• Devon Energy Corporation • KPMG
• Dynegy • LyondellBasell Industries
6. GALLERIA OFFICE SUBMARKET
38M SF
Class A Submarket Statistics Class B Submarket Statistics Major Tenants
• 15M SF of Inventory • 7.3M SF of Inventory • Air Liquide
• 146,000 SF YTD Net Absorption • 88,000 SF YTD Net Absorption • Aon International Energy
• 10.7% Vacancy Rate • 16.9% Vacancy Rate • Apache Corporation
• $30.13/SF Average Rental Rate • $23.47/SF Average Rental Rate • BBVA Compass
• 609,000 SF Under Construction • 0 SF Under Construction
• Bechtel Corporation
• 420,900 to (?, Apache) SF Proposed • 0 SF Proposed
• BHP
Highlights • Blue Cross Blue Shield of Texas
• Apache Corporation - Purchased 6.4 acres of the 20-acre mixed-use Blvd Place • Cameron International Corporation
development for a 33-story office tower, approx. 497,000 SF, with enough dirt • Christus Health
left over for an addition office building for future growth. Currently in planning • Clear Channel Communications
stage. • Colliers International
• BBVA Compass - 306,000 SF under construction delivering 4/2013 and 59% • GE Energy
pre-leased to BBVA Compass. A development or Redstone and Stream Realty. • GDF SUEZ Energy North America
• Landry’s Restaurants, Inc.
• Blvd Place - Under construction - Largest new mixed-use project in the area
with over 1.8M SF. 205,000 SF of Retail; 1.4M SF of office; 275 luxury hotel • Marathon Oil Corporation
room; 1,000 high-rise residential units. • NetIQ Corporation
• Panhandle Energy
• Spectra Energy Corporation
• Stewart Title Company
• Symantec Corporation
• Weatherford International Ltd.
• Williams
8. Major Tenants
KATY FREEWAY OFFICE SUBMARKET - 20M SF
• Alliance Engineering • Northern Offshore Ltd.
• BP North America • Paradigm
Class A Submarket Statistics Class B Submarket Statistics • Cobalt International Energy, Inc. • Pegasus International
• ConocoPhillips Company
• 10.2M SF of Inventory • 7.8M SF of Inventory • Det Norske Veritas
• Petroleum Geo-Services
• Phillips 66 Company
• 595,000 SF YTD Net Absorption • 114,000 SF YTD Net Absorption • Diamond Offshore
• Schlumberger
• Expro Americas
• 4.2% Vacancy Rate • 17.3% Vacancy Rate • Shell Exploration
• ExxonMobil Chemical
• $28.14/SF Average Rental Rate • $19.53/SF Average Rental Rate • Foster Wheeler • Sysco Corporation
• The Shaw Group
• 1.5M SF Under Construction • 0 SF Under Construction • Gulf Interstate Engineering
• Transocean Ltd.
• J. Ray McDermott, Inc.
• 1.7M SF Proposed • 0 SF Proposed • KBR • Union Carbide Corporation
• Mustang Engineering/Wood Group • WorleyParsons
• Nexen, Inc.
HIGHLIGHTS
• MASON CREEK - Myers Crow & Saviers, Ltd. and Moody Rambin Interests are currently developing a two-story, 136,000 SF office
building. The building is currently 0% pre-leased and will deliver 5/2013.
• GREENHOUSE - Stream Realty Partners has proposed building a 200,000 SF office building.
• WESTGATE - Transwestern has the first of three planned buildings under construction. 182,000 SF under construction, 70% pre-
leased to Subsea 7 and Wood Group Mustang. Delivery is scheduled for 12/2013. The two proposed buildings are 242,000 SF
each.
• ENERGY CROSSING - Lincoln Property company has Energy Crossing II under construction. The 322,000 SF building is 63% pre-
leased to Modec International and Atwood Oceanics. The building is scheduled for completion 8/2013.
• ENERGY CENTER THREE - CBRE plans to break ground 12/2012 on a 551,000 SF Class A, 20-story office tower. The building is 0%
pre-leased.
• WOODBRANCH - PM Realty Group plans to break ground 1/2013 on a 168,000 SF Class A, 7-story office tower. The building is 0%
pre-leased.
• ENERGY TOWER - Mac Haik Realty LLC currently has the third Energy Tower building under construction. The 429,000 SF Class A,
17-story office tower is 0% pre-leased and scheduled to deliver 1/2014.
• 8 WEST CENTRE - CBRE has a 228,000 SF 4-story office building under construction. The building is 53% pre-leased by Helix
Energy Solutions and is scheduled to deliver 7/2013.
• MURPHY OIL - Metro National’s 332,000 SF Class A office tower is currently under construction. Murphy Exploration has pre-
leased 120,000 SF and plan to move in when completed in Q3 2013.
• NEXEN - Metro National completed this 332,000 SF Class A, 14-story office tower 10/2012. The building is 79% pre-leased by
Nexen Inc.
• CITYCENTRE - The fourth building in the Midway Companies new complex is currently under construction and is 53% pre-leased.
The 120,000 SF building delivers 6/2013.
9. WESTCHASE OFFICE SUBMARKET
Major Tenants
13.2M SF
• ABB
Class A Submarket Statistics • Affiliated Computer Services
• 6.8M SF of Inventory • Aker Solutions
• 383,000 SF YTD Net Absorption • Apache Oil Corporation
• 7.8% Vacancy Rate • BMC Software
• $29.98/SF Average Rental Rate • Brown & Gay
• 300,000 SF Under Construction • Cal Dive International
• 2.6 SF Proposed • Cameron International
• Chevron
• Dresser-Rand
Highlights • Halliburton
• Honeywell
• Two BriarLake - 332,000 rentable square feet in 12 stories of office space, • Jacobs Engineering
with half recently pre-leased to Samsung Engineering as North American • Landmark Graphics
headquarters. Construction to begin 4Q 2012 and delivering 1Q 2014. • National Oilwell Varco
• Phillips 66 - Purchased a 14.2 acre tract on the west side of Beltway 8, just • Phillips 66
north of Westheimer to build future global headquarters after split with Conoco. • United Recovery Systems
• Samsung Engineering America, Inc.
• Granite Briarpark Green - 300,000 SF spec office building under construction • Schlumberger
delivering 7/2013. • United Recovery Systems
• Western Geco
• Two Oak Park - 300,000 SF Oak Park complex features 2 6-story Class A • Wood Group Pressure Control
buildings. One Oak Park is completed and the entire building is available. Two
Oak Park is proposed.
• CityWestPlace - 30 acre site with four existing buildings and an additional 1.5
million square feet of first-class office space will be developed at CityWestPlace,
including a 640,000 square foot, 22-level office tower; a 465,000 square
foot, 16-level office tower; a 387,000 square foot, 16-level office tower; and
a 307,000 square foot, 12-level office tower. Each building will have its own
structured parking and will offer CityWestPlace-Class amenities and services.
• Westchase Park - Two (2) “Class A” office buildings totaling approximately
540,000 rentable square feet. Bldg 1 is existing and Bldg 2 is proposed.
11. WOODLANDS OFFICE SUBMARKET Woodlands Major Tenants
7M SF • Anadarko Petroleum
• Aon Hewitt
Class A Submarket Statistics • Baker Hughes
• 3.2M SF of Inventory • Chevron Phillips Chemical Co., LLP
• 62,000 SF YTD Net Absorption • CB&I
• 2.1% Vacancy Rate • Energy Alloys, LLC
• $34.82/SF Average Rental Rate • Entergy Services
• Fox Networks Group
• 1.1M SF Under Construction
• Halliburton
• 3.4M SF Proposed • Huntsman International
• Lexicon Genetics
• Maersk Sealand
Woodlands Highlights • Newfield Exploration Company
• Nexeo Solutions
• 3 Waterway Square Place - 234,000 SF under construction, 90% pre-leased • Praxair Technology, Inc.
delivering 6/2013 • Repsol Service Company
• Anadarko Tower 2 - 550,000 SF under construction delivering 4/2014 • Rigaku Corp.
• Talisman Energy USA Inc.
• Research Forest Lakeside - Planned, ten-building development on 77-acres. • TETRA Technologies, Inc.
1 bldg completed (Talisman); 1 under construction (Talisman pre-leased 150K • US Oncology
SF). • Waste Connections
• One Hughes Landing - 8-story, 197,000 SF spec office building under
construction.
Greenspoint/North Belt Highlights
• ExxonMobil Campus - 385-acre campus, 10k employees moving by 2015
• Southwest Energy - Developing 10-story office building in Springwoods Village near
ExxonMobil campus.
• Halliburton North Belt Campus - 100,000 SF office building on Milner Rd delivering
4Q2012
• Greenspoint Plaza - ExxonMobil will move out of 1.6M SF between 2014 and 2015
