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2

The Objective

The objective of our Fairfield County analysis is to provide insight to this market’s direction over the next 7 – 10 years.

We will explore the factors affecting the office market’s supply & demand via a demand analysis.

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Demand Analysis- Ingredients

Supply Vacancy Job Growth Space Additions

4

History

Fundamental Transformation Corporate HQ Small-Midsize Office

Reflecting New Employment Patterns Driven by: Globalization Technology

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Fairfield County- Historically

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Squ

are F

ootage A

dd

ed

<1950s 1950s 1960s 1970s 1980s 1990s 2000s

Decade

> 40k25k - 40k15k - 25k5k - 15k

Square Footage Additions

6

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Squa

re F

eet

Dev

elop

ed

West of Route 7 East of Route 7 I-84 Corridor

Region

1990s

1980s

1970s

Fairfield County- HistoricallyGeographic Square Footage Additions

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Fairfield County- HistoricallyVacancy Rates

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Fairfield County- TodayVacancy Rates

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

17.00%

19.00%

21.00%

West of Rt. 7 East of Rt. 7 I-84 Corridor

=

1,360,117

SqFt.

=

1,216,077

SqFt.

=

540,408

SqFt.

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Fairfield County- Today

2002 Vacancy

2002 Rent

Today’s Vacancy

Today’s Rent

1 Year Vacancy Change

1 Year Rent

Change

West: 15.01% $35.56 16.10% $32.62 +1.08% -8.72%

East: 18.02% $27.05 16.13% $26.01 -1.90% -3.84%

I-84 18.61% $24.19 19.90% $22.71 +1.29% -6.12%

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Institutional Investment Fundamentals

Limited product to satisfy institutional

underwriting criteria caused by: Fierce Acquisition Competition High Prices Poor Market Fundamentals

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Non-Institutional Investment Fundamentals

• Players Abound

• Largely Undeterred by Poor Fundamentals

• Looking for Control

• Often Limited Backgrounds

• Leverage- Key element in winning deals

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Overall Real Estate Fundamentals

• Generally Positive for All Forms of Real Estate

• Economy Showing Signs of Sustained Growth

• Corporate Profits and Household Incomes Continue to Improve

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Projected County Employment Growth

2002-2005 2006-2010

Construction 3.1% 2.5%

Telephone, Transportation & Utilities 2.0% 2.0%

Information 3.1% 3.1%

Financial Activities 5.3% 4.2%

Professional - Includes Business Services 4.8% 3.6%

Education & Health 6.7% 6.5%

Leisure and Hospitality 6.1% 6.3%

Other Service Jobs 5.2% 4.3%

Government 6.3% 3.2%

Source: The Connecticut Center for Economic Analysis

Rate by Period

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Periodic County Employment Growth

=

5,000 Jobs

=

5,000 Jobs

10,000 Jobs27,650 Total New Jobs

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Fairfield County Pipeline

• Approximately 5.3 million square feet of office space have a reasonable expectation of coming online over the next 7 years.

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0

400,000

800,000

1,200,000

1,600,000

Sta

mfo

rd

Sh

elt

on

No

rwa

lk

Sta

tfo

rd

Wil

ton

Tru

mb

ull

Fa

irfi

eld

Da

nb

ury

Ne

wto

wn

Be

the

l

Bro

ok

fie

ld

SqFt to be Developed

Fairfield County Pipeline

West . East . . North .

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Forecasted County Vacancy Rates

Vacancy Rates with no space additions to the market

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Forecasted County Vacancy Rates

Now add the proposed space additions in:Norwalk

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Forecasted County Vacancy Rates

Now add the proposed space additions in:Norwalk & Fairfield

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Forecasted County Vacancy Rates

Now add the proposed space additions in:Norwalk, Fairfield & Stamford

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Forecasted County Vacancy Rates

Now add the proposed space additions in:Norwalk, Fairfield, Stamford & Danbury

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Forecasted County Vacancy Rates

Now add the proposed space additions in:Norwalk, Fairfield, Stamford, Danbury & Shelton

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Forecasted County Vacancy Rates

Now add the proposed space additions in:All of Fairfield County

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Challenges

• Be Aware of What is Happening Next Door• Establish Market Controls• Risk of Overextended Infrastructure

• Positive note – we’re only human

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Conclusions & Opportunities

• In All Change Comes Opportunities• Follow the herd - Continued Eastward Movement • Ride the Wave - Flexible offices catering to both

the larger and smaller office user• Long Term - Emerging Outer beltway Around

Manhattan Rt 8 to I-84 to I-87 to I-287

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