The third quarter saw the delivery of the downtown streetcar and the GE Global Operations Center at the banks, both projects were two of Cincinnati’s most highly anticipated deliveries in years. Developers continued to cautiously move forward with planned projects as they look to land large users for preleasing before they begin construction.

1. CBD vacancy rate vs. asking rate
Source: JLL Research
NKY Riverfront vacancy rate projection
Source: JLL Research, Excludes government buildings*
Major planned office projects
Source: JLL Research
Property Developer Bldg s.f.
Blue Ash Airport Al Neyer 600,000
Northpointe Scott Street 260,000
Greens at Kenwood Neyer Properties 250,500
Oakley Station Vandercar 180,000
3%
13%
23%
33%
43%
2011 2012 2013 2014 2015 2016 2017
Without new HQ With new HQ
$22.00
$22.20
$22.40
$22.60
$22.80
$23.00
2012 2013 2014 2015 2016
10.0%
15.0%
20.0%
25.0%
Vacancy Asking Rate
GE Building, streetcar deliver in Q3 as CBD momentum continues
Of the numerous high-profile projects that have taken place in Cincinnati’s
reinvigorated urban core of the last five years perhaps none have been more
highly anticipated than the Streetcar and GE Global operations center at the
Banks. The third quarter saw the delivery of both projects, which were
accompanied with declining vacancy and significant absorption. While GE
provided the big splash, leasing activity within the CBD remained positive and
market fundamentals continued to tighten. In addition, the $106 million Fourth
and Race mixed-use project commenced. These projects further solidify the
CBD as a live-work-play environment and are driving downtown leasing activity.
Third quarter provides bittersweet announcements for NKY Riverfront
CTI Clinical Trial and Consulting Services announced it would relocate from it’s
Blue Ash Headquarters to RiverCenter II, a big win Covington. The company will
relocate 250 employees in the first quarter of 2017 with 500 additional
employees added over the next 12 years. Unfortunately the announcement was
followed by the news that the IRS will end it’s submission processing operation in
Covington after the 2019 filing season. The mixed-bag of headlines creates a
great opportunity for Covington, which contains the majority of office supply in
the NKY Riverfront submarket. In the coming years landlords will have quality
blocks of space available accompanied with an educated work force.
Market strengthens, developers still await commitments from large users
With the recent success of newly delivered speculative buildings and large build-
to-suit projects, as well as organic growth within the market, vacancy rates
across Cincinnati are decreasing as the market tightens. User demand within the
market has remained high leading to increases in rental rates. This activity has
caused for a favorable environment for developers to operate in. While
developers are confident in the market due to the recent activity, they are
cautiously waiting to build speculative space until large users commit to prelease
their projects. As the speculative space in the current pipeline is filled and the
market tightens further, look for developers to become more motivated to break
ground on their ambitious projects.
Large absorption gains lead to big third quarter
2,257
Office Insight
Cincinnati | Q3 2016
35,264,038
Total inventory (s.f.)
623,599
Q3 2016 net absorption (s.f.)
$19.41
Direct average asking rent
260,000
Total under construction (s.f.)
16.1%
Total vacancy
1,254,696
YTD net absorption (s.f.)
0.9%
12-month rent growth
11.0%
Total preleased

2. Current conditions – submarket Historical leasing activity (s.f.)
Source: JLL Research Source: JLL Research
Total net absorption (s.f.)
Source: JLL Research
Total vacancy rate (%)
Source: JLL Research
Direct average asking rent ($ p.s.f.)
Source: JLL Research
953,267
815,426
-123,487
-38,624
79,469 143,641
290,120
562,970
763,222
1,254,696
-500,000
0
500,000
1,000,000
1,500,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
$19.16 $19.25
$18.45
$17.39
$17.94
$18.41
$19.68
$19.15 $19.24
$19.41
$16.00
$17.00
$18.00
$19.00
$20.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
17.3% 18.1%
19.4%
22.7% 22.6% 22.5%
21.3%
19.8%
18.1%
16.1%
5.0%
10.0%
15.0%
20.0%
25.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
1,700,000 1,800,000
2,200,000
1,891,000 1,794,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2012 2013 2014 2015 YTD 2016
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Ross Bratcher | ross.bratcher@am.jll.com
Landlordleverage
Tenantleverage
Peaking
market
Falling
market
Rising
market
Blue Ash / Montgomery,
Midtown, Fields Ertel /
Mason, West Chester
CBD Peripheral,
NKY Riverfront
East, West
Kenwood
Bottoming
market
Northern Kentucky

3. 2,257
Office Statistics
Cincinnati | Q3 2016
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%
of stock)
Direct vacancy
(%)
Total vacancy
(%)
Average direct
asking rent ($
p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 12,266,866 340,171 443,245 3.6% 15.5% 16.5% $20.27 338,000 0
CBD Peripheral Totals 1,622,161 10,306 -72,364 -4.5% 30.4% 30.4% $18.97 0 0
Midtown Totals 2,376,193 57,477 386,122 16.2% 7.8% 8.5% $21.67 365,000 0
Urban Totals 16,265,220 407,954 757,003 4.7% 15.9% 16.7% $20.12 703,000 0
Blue Ash/Montgomery Totals 4,889,330 26,908 42,358 0.9% 9.7% 9.8% $17.62 0 143,000
East Totals 1,128,534 1,576 13,959 1.2% 9.5% 9.5% $16.60 0 0
Fields Ertel/Mason Totals 2,604,432 89,446 154,408 5.9% 13.2% 13.5% $19.65 83,000 60,000
Kenwood Totals 1,451,516 12,168 101,777 7.0% 8.8% 9.1% $25.46 0 0
Northern Kentucky Totals 2,657,389 69,654 123,281 4.6% 14.1% 14.7% $18.08 0 57,000
Northern Kentucky Riverfront Totals 1,435,604 -1,749 4,102 0.3% 34.1% 34.1% $21.72 0 0
Tri-County Totals 3,133,895 -772 116,479 3.7% 23.3% 24.5% $15.87 0 0
West Totals 156,329 0 9,945 6.4% 14.0% 14.0% $16.93 0 0
West Chester Totals 1,541,789 18,414 -68,616 -4.5% 15.0% 15.0% $21.33 0 0
Suburbs Totals 18,998,818 215,645 497,693 2.6% 15.3% 15.6% $18.77 83,000 260,000
Cincinnati Totals 35,264,038 623,599 1,254,696 3.6% 15.5% 16.1% $19.41 786,000 260,000
CBD A 7,478,198 363,966 451,703 6.0% 14.8% 15.8% $22.78 338,000 0
CBD Peripheral A 789,967 7,135 -86,952 -11.0% 40.1% 40.1% $21.41 0 0
Midtown A 1,723,546 39,786 381,953 22.2% 8.4% 9.0% $22.71 365,000 0
Urban A 9,991,711 410,887 746,704 7.5% 15.7% 16.5% $22.50 703,000 0
Blue Ash/Montgomery A 2,906,394 7,479 21,827 0.8% 6.1% 6.1% $20.44 0 143,000
East A 741,078 0 11,786 1.6% 2.1% 2.1% $17.93 0 0
Fields Ertel/Mason A 2,063,777 87,181 150,103 7.3% 12.2% 12.4% $21.00 83,000 60,000
Kenwood A 1,031,123 5,381 96,943 9.4% 8.6% 9.1% $27.51 0 0
Northern Kentucky A 1,368,910 16,407 26,044 1.9% 12.7% 13.7% $19.48 0 57,000
Northern Kentucky Riverfront A 1,320,104 -503 3,068 0.2% 35.6% 35.6% $21.91 0 0
Tri-County A 1,141,529 995 13,837 1.2% 11.5% 12.6% $19.89 0 0
West A 22,472 0 5,382 23.9% 28.9% 28.9% $18.95 0 0
West Chester A 1,329,626 13,570 -67,100 -5.0% 14.5% 14.5% $22.20 0 0
Suburbs A 11,925,013 130,510 261,890 2.2% 12.6% 12.9% $21.44 83,000 260,000
Cincinnati A 21,916,724 541,397 1,008,594 4.6% 14.0% 14.6% $21.98 786,000 260,000
CBD B 4,788,668 -23,795 -8,458 -0.2% 16.5% 17.6% $16.76 0 0
CBD Peripheral B 832,194 3,171 14,588 1.8% 21.2% 21.2% $14.59 0 0
Midtown B 652,647 17,691 4,169 0.6% 6.2% 7.0% $17.96 0 0
Urban B 6,273,509 -2,933 10,299 0.2% 16.1% 17.0% $16.43 0 0
Blue Ash/Montgomery B 1,982,936 19,429 20,531 1.0% 15.1% 15.1% $15.96 0 0
East B 387,456 1,576 2,173 0.6% 23.8% 23.8% $16.38 0 0
Fields Ertel/Mason B 540,655 2,265 4,305 0.8% 17.2% 17.6% $15.98 0 0
Kenwood B 420,393 6,787 4,834 1.1% 9.1% 9.1% $20.71 0 0
Northern Kentucky B 1,288,479 53,247 97,237 7.5% 15.7% 15.7% $16.89 0 0
Northern Kentucky Riverfront B 115,500 -1,246 1,034 0.9% 17.3% 17.3% $17.15 0 0
Tri-County B 1,992,366 -1,767 102,642 5.2% 30.1% 31.4% $14.99 0 0
West B 133,857 0 4,563 3.4% 11.5% 11.5% $16.08 0 0
West Chester B 212,163 4,844 -1,516 -0.7% 18.2% 18.2% $17.03 0 0
Suburbs B 7,073,805 85,135 235,803 3.3% 19.8% 20.2% $15.89 0 0
Cincinnati B 13,347,314 82,202 246,102 1.8% 18.0% 18.6% $16.11 0 0
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Ross Bratcher | ross.bratcher@am.jll.com