T RIAD M ARKET F ORECAST 2015 RETAIL W ILLIAM M. K OTIS III

R ETAIL T RENDS Supremacy of Top Tier Markets: Rents increasing and vacancy low in Top Tier markets Midtown, Wendover, Hanes Mall, Deep River Rents stagnant and vacancy higher in secondary sub-markets High Point Road, Peters Creek Parkway Downsizing of Retail Footprints: Office Supply Companies (Office Depot, Staples) Locals looking to be more efficient with space Supremacy of Top Tier Markets: Rents increasing and vacancy low in Top Tier markets Midtown, Wendover, Hanes Mall, Deep River Rents stagnant and vacancy higher in secondary sub-markets High Point Road, Peters Creek Parkway Downsizing of Retail Footprints: Office Supply Companies (Office Depot, Staples) Locals looking to be more efficient with space Expansion of Restaurants: Make up a large portion of new deals Increasingly seen as anchors to projects Micro-Breweries anchoring many projects Redevelopment Work: High Point Road Streetscape Work Downtown Greensboro Winston-Salem Innovation Quarter Expansion of Restaurants: Make up a large portion of new deals Increasingly seen as anchors to projects Micro-Breweries anchoring many projects Redevelopment Work: High Point Road Streetscape Work Downtown Greensboro Winston-Salem Innovation Quarter

M ARKET R ATES Lease Rates NNN Top Tier Small Shop – New Construction:$28-35 psf Top Tier Small Shops$20-28 psf Secondary Markets – Small Shop:$8-15 psf Top Tier Big Box – New Construction:$8-12 psf Top Tier Big Box$8-10 psf Secondary Markets –Big Box$4-8 psf Land Pricing (Pad Sites) Top Tier Site:$800,000-1,000,000/acre Secondary Markets:$400,000-$600,000/acre Lease Rates NNN Top Tier Small Shop – New Construction:$28-35 psf Top Tier Small Shops$20-28 psf Secondary Markets – Small Shop:$8-15 psf Top Tier Big Box – New Construction:$8-12 psf Top Tier Big Box$8-10 psf Secondary Markets –Big Box$4-8 psf Land Pricing (Pad Sites) Top Tier Site:$800,000-1,000,000/acre Secondary Markets:$400,000-$600,000/acre

M AJOR N EW T RIAD P ROJECTS P ROJECTS Hanes Towne VillageWinston-Salem Deep River Belk and Surrounding ShopsHigh Point Alamance Crossing ExpansionBurlington Unnamed Big Box Project on Wendover AvenueGreensboro Hanes Towne VillageWinston-Salem Deep River Belk and Surrounding ShopsHigh Point Alamance Crossing ExpansionBurlington Unnamed Big Box Project on Wendover AvenueGreensboro

2015 – R ETAIL F ORECAST Lease Rates: Will continue to be strong in Top Tier sub- markets and struggle in secondary markets. Cap Rates: Will stay historically low through 2015, but the reversal could be quite damaging when it finally occurs. Construction: Construction of new Class A product will accelerate, but in Top Tier sub-markets. Lease Rates: Will continue to be strong in Top Tier sub- markets and struggle in secondary markets. Cap Rates: Will stay historically low through 2015, but the reversal could be quite damaging when it finally occurs. Construction: Construction of new Class A product will accelerate, but in Top Tier sub-markets.