State of the Industry 280 Plaza, Columbus, Ohio CBRE BOMA: Better by Association

Welcome International attendees! We have 24 countries in attendance! Representative please stand.

Uneven Recovery in Search of Momentum Vacancy Rates Dipped to 15.3% (CBRE) Just 49 Million sf Absorbed in 2012, Less than Half of 2005 (Mueller) Q2 Still Flat – RER Sentiment Index – 69 Stock Market, Housing, and Auto Sales Up The Federal Reserve Vacancy rates dipped to 15.3% (CBRE) Just 49 million sf absorbed in 2012, less than half of 2005 (Mueller) Q2 still flat – RER Sentiment Index Unemployment down to 7.5% S&P up 20% in past year GDP stubborn at 2% Housing up 9% Gateway Cities are passé – watch out for Denver, Des Moines, OK City Still Living Large in Texas

Global Market Conditions Global Capital Office Value up 2.5% in Past Year (CBRE) Global Rent Up 0.8% in Past Year (CBRE) Emerging Markets account for more than half of world GDP Regulations Taxes Sustainability Voluntary Marketplace Global Capital Office Value Up 2.5% in past year. -Regional performance helped push America’s higher by 1.5% in last quarter. Secondary markets on the rise -Asia Pacific up .7% quarter-over-quarter – biggest increases in China and New Zealand -EMEA saw quarterly strengthening thanks to prime markets such as London and Paris Global Rents Up 0.8% in past year. Despite weak occupier demand, global office rents held steady thanks to tight availabilities of highly preferred space. GDP – in 2013 emerging markets account for more than half of world GDP – first time in 2 centuries! Majority of global growth rest of this decade will happen in developing world, with China and India making up almost half of it. The EU accounts for less than 6% of the global growth during this period. (Financial Times)

Recognition of Best Practices TOBY Awards Performance Benchmarking Lower Operating Expenses Best Practices are helping BOMA members become asset management experts: -TOBY Awards recognizing excellence in building management for nearly 30 years. -BOMA’s 6th ENERGY STAR Award – many members organizations received the ES Award as well (let me know if you want the list of 13 companies) -All of this shows that the Voluntary Marketplace is working, especially clear with the success of the 7-Point Challenge… Industry mantra is to drive down operating expenses: Total Operating Expenses: -3.9% Utilities: -9.0%

Participant in DOE’s Better Buildings Challenge -Shorenstein Efficient Buildings Training for Engineers -Parmenter Decreased Energy Usage by 64% -Glenborough, LLC Check out the 7-Point Challenge Case Studies in the May/June BOMA Magazine, available in the publication bins on the tradeshow floor. Terrific cases studies on the companies that met all 7 Points of the 7-Point Challenge -Training & Education. Parmenter’s efficient building training for engineers -Working with Tenants. Liberty helped tenant’s benchmark energy use -Public/private Partnership. Shorenstein and other groups participated in private/public partnership like the DOE’s Better Buildings Challenge; TIAA-CREF distributed more than 300K CFL bulbs through EPA’s Change the World Campaign. Collaboration is key to success. -Energy Reduction– Munich Reinsurance improved their energy star rating from 10 to 63; Glenborough reduced energy use by 64% ENERGY STAR Award 11 Years in a Row -USAA Real Estate Company Helped Tenants Benchmark Energy Use -Liberty Property Trust Participant in DOE’s Better Buildings Challenge -Shorenstein Moved Dial from 10 to 63 ENERGY STAR Rating -Munich Reinsurance Distributed 312,000 CFL Bulbs through EPA’s Change the World Campaign -TIAA-CREF

Technology & Adaptability It’s time to take the Plunge! Mobile & “Sensor Revolution” “Connected” Buildings “Big Data” - Management Dashboards The Cloud Time to Innovate Big Data “Big Data” – (Harvard Business Review, 10/12) – Research shows data driven companies perform better and are more profitable. Better measurement = better knowledge, helping you make better predictions and smarter decisions. Data trumps intuition. A “pedabyte” of information = 20 million filing cabinets and an “extabyte” is 1,000 times greater. “Senor Revolution” or the “Programmable World” (Wired magazine, 6/13) things talk to each other wirelessly, effortlessly and everywhere. Your building know it’s time to turn the air off once 80% of the occupants have left the building. And it knows exactly when that happens. 360 – More than 600 buildings have received the designation. EER Stats to come…

Future Space Requirements Space Utilization More Density for Some More Space for Others New Configurations for Many Culture Shaping Workspace Space Utilization BOMA International 2013 Global Tenant Survey More density for some More Space for others New configurations for many Source: BOMA International 2013 Global Tenant Survey

Global Tenant Preferences BOMA International’s Global Tenant Survey shows how the importance of certain criteria in difference countries: New Zealand – being downtown and having amenities a priority Canada – TI Allowance & Public Transit score high South Africa & U.S. – TI allowances and Image/Prestige Source: BOMA International 2013 Global Tenant Survey

Global Space Preferences No Co-working Space Some Co-working Space China, India, Russia, Morocco France, Spain, Italy Culture shapes the Office Steelcase study shows different dimensions of workplace culture. China, India, Russia and Morocco – higher tolerance for density and hierarchy. France, Spain and Italy – space allocation more egalitarian – looking into co-working facilities and satellite offices U.S., UK, Germany, Netherlands – more shared space, hoteling and telecommuting. Workers Executives Managers Executives Managers Employees Off-Site Co-Working U.S., UK, Germany, Netherlands Alternative Workspaces Source: Steelcase Workplace Culture Study

Millennial Makeover Set the Stage for Collaboration Shared Workspace Team Space Tear Down those Walls! Let in the Light Be Green, Be Connected “High Tech is High Touch” “BYOT” Millennial Makeover Shared work space Team space Tear down those walls! Let in the light Be Green, Be Connected “High Tech is High Touch” Expect to negotiate Want it “my way, the right way, why pay?” Freedom of choice, take intelligent risk, be part of something greater Ping Pong anyone?

Leadership The Tools and Ideas You Need to Be Effective in All of This Leadership Track: Maximizing Employee Performance through Involved Leadership Lead, Follow or Get Out of the Way Creating Value in the Workplace Leading the Way! Women, Success & CRE Employment Trends and Tips for Both Employer & Employee Leadership Track: Maximizing Employee Performance through Involved Leadership Lead, Follow or Get Out of the Way Creating Value in the Workplace Leading the Way! Women, Success & CRE Employment Trends and Tips for Both Employer & Employee Seth Kahan Deepen your understanding of current circumstances Identify emerging trends and innovations Set your own agenda

Collective Wisdom This is where the collective wisdom comes together. 280 Plaza, Columbus, Ohio CBRE BOMA: Better by Association