Suburban Office Market Report - By Bryan Cole

2012 - 3rd Qtr. Update

Reading, Berks County Pennsylvania

Suburban Office Market Report

Committed to Greater Reading. Connected to the World.

Suburban Office Market Report - By Bryan Cole

From the Authors Desk
2012
This report provides an overview of the current office market conditions in Suburban Berks County Pennsylvania. Bryan Cole of NAI Keystone maintains a comprehensive list of all available properties within the Berks County marketplace, including but not limited to; available space, number of facilities in the market, asking rents, incentives, extra costs, etc The information that NAI Keystone has assembled is separated by Class A and Class B facilities and consists of market data such as, absorption rates, vacancy rates, asking rents, etc

Bryan E. Cole
Broker/Sr. Associate Bcole@naikeystone.com 610.370.8502 (direct) 610.370.8503 (e-fax)

This market report and data is assembled in house by Bryan Cole. All rights are reserved as this information has not been obtained by Public Sources. The report will be available on a quarterly basis by emailing us at marketing@bryanecole.com and asking to subscribe to our mailing list.

www.Bryan-Cole.com

Bryan E. Cole Resume

Bryan joined NAI Keystone in July of 2004, but before joining NAI, Bryan Cole spent 4 years active duty in the U.S. Marine Corp, including a 6 month deployment in Afghanistan, a 4 month deployment in Kuwait/Iraq, and a 7 month deployment in Japan. Prior to joining the military Bryan was involved in the construction of commercial and multi-unit properties in the Philadelphia suburbs. Bryan has experience working with a diverse group of individuals in numerous countries throughout the world. During Bryans time at NAI, he has sold in the excess of $250 Million Dollars worth of Commercial Real Estate, and leased hundreds of thousands of square feet of industrial and office/medical space. Because of this, Bryan earned NAI gold club status his first year in the business which is presented to approximately 75 - 100 brokers within the NAI Global network, which is comprised of over 8,000 Brokers. Bryan is currently working on earning both his CCIM designation and SIOR designation. Bryan has been NAI Keystone's Top Performer from 2006 - 2011.

Dont forget to check: www.Bryan-Cole.com Now Optimized for the IPad and IPhone

Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

NAI Keystone - By Bryan Cole

Suburban Office Market Report 3rd Qtr. 2012
3rd Qtr. Trends
Vacancy Rates
Class A Class B

Suburban Office Market Overview:

The Greater Reading Suburban Office Market ended the third quarter 2012 with a vacancy rate for Class A Office buildings at 18.48%. This is an Increase in vacancy from 2nd quarter 2012 and an Increase in vacancy from same period 2011. The average rental rates remained unchanged for the most part at $15.00 - $21.00 per square foot Modified Gross which is similar to that of rates from the same period 2011. The main deals of focus within Class A buildings were: The Sublease of Teleflex's facility at 1 Meriden Blvd. which added 66,000 sf. to the market along with newly built facilities at 1030 Reed Ave. which were recently leased by two medical groups occupying approximately 30,000 sf The Class B Suburban office market ended the third quarter of 2012 with a vacancy rate of 20.57%. This is an Increase in vacancy from 2nd quarter 2012 and an sharp increase from the same period 2011. The average rental rates remained unchanged from 2nd quarter 2012 to $11.00 $15.00 per square foot modified gross opposed to that of rates from the same period 2011 which was $13.50 - $18.00 per square foot. The main deals of focus within Class B buildings were the new vacancies at 965 Berkshire Blvd which consists of 11,014 sf., and the vacancies opened up by the medical users moving to Reed Ave. And the Class C Suburban office market ended the third quarter of 2012 with a vacancy rate of 8.42%. Our Outlook for the office market at the closing of 2012 is very optimistic with activity levels at new highs within the market place and owners offering additional incentives and concessions to assist in getting deals done. New Construction remained unchanged for the third quarter of 2012, with approximately 329,000 sf. of proposed product still available. The 4th Quarter 2012 into the 1st Quarter 2013 will see an increase in new construction with the newly proposed National Penn Facility in Spring Township consisting of approximately 48,000 sf. And the 30,000 sf. Spec building at the Wyomissing Corporate Campus.

Other Trends
Tour Activity

Net Absorption
Class A Class B

Concessions

Sales Volume

Asking Rents
Class A Class B

Construction
Class A Class B

# of Properties for Sale

For Full Article visit http://bryan-cole.com/MarketIntel.html

Non Classified buildings include Hospital and Large Governmental institutions. Although we track these facilities, it is our opinion that we cannot accurately display vacancy rates when these facilities are used in the overall numbers.
Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

NAI Keystone - By Bryan Cole

Suburban Office Market Report 3rd Qtr. 2012

Tenant perspective: (As a Tenant Representative) The Greater Reading market has experienced a high level of vacancy in its Class A and B product and increased incentives/ concessions which have allowed Tenants to capitalize on the current market conditions. Within the past 18 months Tenants have been able to lock in favorable rates, while obtaining leases with early out clauses in the event their long term commitments do not pan out. Tenants should begin to negotiate any leases that are within 18 months of expiration. This allows for enough room to negotiate and capitalize on the current conditions. The market will continue to be a Tenants Market into the late stages of 2013 based on current vacancies and leasing activity.

Landlord perspective: (As a Landlord Representative) Greater Readings recent activity has brought numerous tenants to the market place allowing landlords to get aggressive, now that tenants are starting to commit rather then Kick Tires. Landlords understand the value of maintaining their tenant base even in the event of reducing their base rents and offering additional TI dollars. Overall the market has seen the majority of the activity surrounding Medical and Large Operations centers. Most recently National Penn Bank announced they will be constructing a 48,000 sf. facility in Spring Twp. Although the market will most likely be a Tenants Market through 2013. Increased activity and deals being consummated are encouraging.

Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

Suburban Office Market Report - By Bryan Cole

3rd Quarter 2012 Deals Completed
Completed Lease Transactions in the Marketplace
Tenant Address Submarket SF Type

The Reading Hospital & Medical Center Digestive Disease Associates Berks County Digestive Health Holcomb Behavioral Health Pennside Partners

2101 State Hill Road 1030 Reed Ave 1030 Reed Ave 1030 Reed Ave 1220 Broadcasting Road

Wyomissing Boro 16,364 Wyomissing Boro 19,445 Wyomissing Boro 12,135 Wyomissing Boro 3,708 Spring Township 5,200

Renewal Relocation w/ Expansion Relocation w/ Expansion Relocation w/ Expansion Relocation

Completed Sale Transactions in the Marketplace

Address Submarket Buyer/Seller SF $ psf

210 George Street 1234 Penn Ave. 850 N. Park Road 2620 Westview Drive 400 Spring Ridge Drive

Muhlenberg Twp. Wyomissing Boro. Wyomissing Boro. Spring Township Spring Township

Muhlenberg Township / Beneficial Bank of PA 42,500 Greater Reading Mental Health / Girard M. Maryniak Baldwin Gottschalk Prop Inc / Jjc Capital Ptshp Llc (Loomis Company) Broadcasting Pointe Lp / Centre Avenue, LLC Daniel E. Wozniak / RPA Properties I Llc 3,984 47,608 9,850 12,000

$27.06 $149.35 $34.45 $182.74 $116.67

Dont forget to check: www.WyomissingOfficeSpace.com for more properties for Lease in Spring Township and Wyomissing Borough.

Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

NAI Keystone - By Bryan Cole

Proposed Office Projects
Status
Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed

Property Name
Spring Corporate Campus - Building A Spring Corporate Campus - Building B Spring Corporate Campus - Building C Spring Corporate Campus - Building D Spring Corporate Campus - Building E Spring Corporate Campus - Building F 1001 James Drive Wyomissing Corporate Campus - Building C Wyomissing Corporate Campus - Building E 520 Van Reed Road White Pines Professional Center Hearthstone Court Spring Commons Wyomissing Professional Center Spring Ridge Corporate Campus Berkshire Court Meridian Blvd. - Building A Meridian Blvd. - Building B Meridian Blvd. - Building C Meridian Blvd. - Building D 20 Total Sites w/16 Available

City
Spring Twp. Spring Twp. Spring Twp. Spring Twp. Spring Twp. Spring Twp. Leesport Wyomissing Wyomissing Wyomissing Flying Hills Exeter Sinking Spring Wyomissing Spring Twp. Wyomissing Spring Twp. Spring Twp. Spring Twp. Spring Twp.

Zip
19609 19609 19609 19609 19609 19609 19533 19610 19610 19610 19607 19606 19608 19610 19610 19610 19610 19610 19610 19610

Gross Bldg. SF Vacant SF

53,000 8,000 6,000 35,000 35,000 35,000 12,300 43,000 30,000 40,000 5,400 9,000 14,000 30,000 48,000 30,000 23,250 23,800 18,550 13,300 512,600 sf. 53,000 8,000 6,000 35,000 35,000 35,000 12,300 43,000 30,000 40,000 5,400 9,000 14,000 30,000 0 30,000 0 0 0 13,300 399,000 sf.

Exp. Delivery Date

2013 2013 2013 2013 2013 2013 TBD TBD 2012 TBD TBD TBD TBD TBD 2013 TBD 2013 2013 2013 TBD

Large Scale Developments

Meridian Condos 67,692 +/- sf of Single Story Office Condos. Located in Spring Twp. PA Total of 4 Buildings Proposed For Sale or Lease

Wyomissing Corporate Campus 169,000 Total Square Feet Located in Wyomissing PA 19610 3 Buildings Existing with 2 additional buildings proposed For Lease

Spring Corporate Campus 167,000 Total Square Feet Located in Spring Twp. PA 19609 6 buildings proposed with the smallest calculated at 6,000 sf. For Lease or Sale

Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

NAI Keystone - By Bryan Cole

Methodology/Definitions/Sub Market Map
Absorption (Net) The change in occupied space in a given time period. Available Square Footage Net rentable area considered available for lease; excludes sublease space. Average Asking Rental Rate Rental rate as quoted from each buildings owner/ management company, For office space, a full service rate was requested; for retail, a triple net rate requested; for industrial, a NN basis. Building Class Class A Product is office Space of steel and concrete construction, built after 1980, quality tenants, excellent amenities & premium rates. Class B product is office Space built after 1980, fair to good finishes & wide range of tenants. Direct Vacancy Space currently available for lease directly with the landlord or building owner. Market Size Includes all existing and under construction office buildings (office, office condo, office loft, office medical, all classes and all sizes, both multi-tenant and single-tenant, including owner-occupied buildings) within each market. Overall Vacancy All unoccupied lease space, either direct or sublease.

SF/PSF Square foot/per square foot, used as a unit of measurement. Sublease Arrangement in which a tenant leases rental property to another, and the tenant becomes the landlord to the subtenant. Sublease Space Total square footage being marketed for lease by the tenant. Sublease space is not considered in the overall occupancy or absorption numbers - only direct leases are included. Sublease Vacancy Space currently available in the market for sublease with an existing tenant within a building acting as the landlord.

Bryan E. Cole | Office & Medical Specialist 610.370.8502 (d) | www.Bryan-Cole.com | Bcole@naikeystone.com Check Bryan

Contact info:
Bryan Cole Office & Medical Specialist 610.370.8502 (direct) Bcole@naikeystone.com

Look for our marketing material

Newsletters Quarterly Monthly Weekly Specific Industry

www.Bryan-Cole.com

Emails E-Brochures E-News

Brochures & Market Reports Flyers Office Report

Check Us Out on:

One of the many ways we Market Real Estate

Bryan Cole
NAI Keystone Commercial & Industrial, LLC Exeter Ridge Corporate Center 3970 Perkiomen Avenue Suite 200 Reading, PA 19606 www.Bryan-Cole.com www.NAIKeystone.com