Copyright 2011 CoStar Group, Inc. All Rights Reserved.

Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, the following information includes projections that are based on various assumptions by CoStar concerning future events and circumstances, as well as historical and current data maintained in CoStars database. Actual results may vary from the projections presented. The information in this presentation is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of merchantability and fitness for a particular purpose.

Webinar Presenters

Anthony Guma, LEED-AP Director CoStar Group, Inc.

Chris Pyke, Ph.D. Vice President of Research U.S. Green Building Council

Charles Leitner III CEO, Greenprint Foundation Chairman, RREEF

Copyright 2011 CoStar Group, Inc.

What We Will Present Today

Chuck Leitner Greenprint Foundation Chris Pyke Market Update: Energy Efficiency & Existing Buildings Anthony Guma CoStar Update Your Questions

Copyright 2011 CoStar Group, Inc.

Chuck Leitner

Copyright 2011 CoStar Group, Inc.

REDUCING CARBON. BUILDING VALUE.

Greenprint Foundation is a is a worldwide alliance of leading real estate owners, investors and financial institutions committed to reducing carbon emissions across the global property industry.

What is Greenprint Foundation?

A catalyst for change, taking meaningful, immediate and measurable actions to generate solutions that improve energy efficiency and create value in property portfolios. Greenprints mission is to lead the global real estate community toward value-enhancing carbon reduction strategies that support the Intergovernmental Panel on Climate Change (IPCC) goals for global greenhouse gas stabilization by 2030.

WWW.GREENPRINTFOUNDATION.ORG

Benefits of Leadership Participation The Greenprint Index

provides a consolidated view of its members participating portfolios, detailing their current carbon footprint and providing an important benchmark with which to measure progress in reducing carbon emissions. Already one of the largest global measurements of real estates carbon footprint with Volume 1 spanning 36 countries and representing 176 million square feet (16 million square meters) of office, industrial, retail, multi-family and hotel properties containing 35,000 tenants.

REDUCING CARBON. BUILDING VALUE.

The following map illustrates the absolute carbon emissions (Scope 1, 2 and 3), in thousand metric tonnes

Participation in pilot programs Access to innovative technologies and best operating practices Increased portfolio values
WWW.GREENPRINTFOUNDATION.ORG

Energy Intensity Benchmarking

REDUCING CARBON. BUILDING VALUE.

Energy use intensity focuses on energy efficiency and, in most instances, decreasing energy. intensity reduces greenhouse gas emissions. Increasing energy efficiency in design, renovation and operations is the most accessible and potent tool in property owners toolbox to reduce emissions

WWW.GREENPRINTFOUNDATION.ORG

The Greenprint Foundation Contribution

Verdantix Review of Greenprint Index
November 3, 2010

REDUCING CARBON. BUILDING VALUE.

"Greenprint Foundations greatest innovation lies with the pragmatic and collaborative approach adopted by its member pool." Greenprint Announces Blackstone, Equity Office Properties and TIAA-CREF As Members
February 7, 2011

Our growing membership further strengthens Greenprints goal of bringing together the worlds leading real estate owners and managers to share best practices and investigate emerging technologies. Greenprint and NRDC Announce Alliance
May 2, 2011

Greenprint Foundation and the NRDCs Center for Market Innovation (CMI) announce the formation of a strategic alliance to work together towards their shared goal of promoting meaningful, immediate, measurable and scalable actions by the global real estate community to create value for real estate assets by increasing energy efficiency and reducing carbon emissions.
WWW.GREENPRINTFOUNDATION.ORG

Chris Pyke

Copyright 2011 CoStar Group, Inc.

Market Update: Energy Efficiency & Existing Buildings

Copyright 2011 CoStar Group, Inc.

Overview Understanding energy efficiency programs Patterns and trends in energy efficiency over time and between markets Correlations with Energy Star certification Correlations between benchmark performance and supporting energy efficiency strategies Future considerations for energy efficiency in commercial real estate

Energy Efficiency
JCI/IFMA/ULI 5th Annual Global Energy Efficiency Survey of 4,000 building owners (released 6/17): Energy management is important: 70% of managers Primary motivation: energy cost savings Average energy reduction target: 12% >10% energy price increase: expected by 80% of owners 39% of building owners: plan to pursue green certifications for existing buildings in the next year

Green Building & Energy Efficiency Energy efficiency is central to the two most widely-used labels in commercial real estate
US EPAs Energy Star Program
Focus on energy efficiency

LEED-EB:O&M
Focus on six performance areas, including Sustainable Sites, Energy & Atmosphere, Water Efficiency, Materials & Resources, Indoor Environmental Quality, and Innovation

Energy & LEED LEED addresses energy performance differently across the building life cycle: Building Design & Construction
Reduction in cost compared to a code-compliant baseline

Existing Building Operations & Maintenance

Operational performance relative to an industry benchmark, Energy Star

Focus on LEED-EB:O&M Operational performance assessed during a 1-year performance period Performance scored against Energy Star benchmark, i.e., 0-100 metric normalized for climate and other factors based on a statistical sample of US building stock EAc1: Energy & Atmosphere Credit #1: Optimized Energy Efficiency Performance

Energy Star Scores for LEED-EB:O&M Certified Buildings

80 70 60 Project Count 50 40 30 20 10 0 65
Source: USGBC

67

69

71

73

75

77 79 81 83 Energy Star Score

85

87

89

91

93

95

LEED-EB: O&M Scores by Market

90 60

85 Energy Star Score

50 Project Count

40 80 30 75 20 70

10

65

Source: USGBC

EB:OM Bldgs - EStar Score

EB:OM Bldg Count

Energy Star and LEED-EB: O&M Trends

EStar Bldg Count 5000 Energy Star Bldg Count 4500 4000 3500 3000 2500 2000 1500 1000 500 0 74 72 83 81 82 LEED EB Bldg Count EB:OM Bldgs - EStar Score (avg) 500 LEED EB Project Count 450 400 350 300 250 200 150 100 50 0

Source: USGBC

Comparison of Market Activity

180 160 90 140 Energy Star Score Project Count 120 100 80 80 60 40 70 20 0 65 75 85 95

Source: USGBC

Estar Bldg Count EB:OM Bldgs - EStar Score

EB:OM Bldg Count Estar Bldgs - EStar Score

Supporting Green Building Strategies

10 strategies tracked in LEED-EB:O&M

EAc2.1: EAc2.2: EAc2.3: EAc3.1: EAc3.2: EAc4: IEQc1.3: IEQc2.2: IEQc2.3: IEQc2.4: Commissioning Investigation and Analysis Commissioning -- Implementation Commissioning Ongoing Commissioning Building Automation System System-level Metering Renewable Energy Increased Ventilation Occupant Controlled Lighting Thermal Comfort Monitoring Daylight and Views

Cumulative % Earned of Possible Points per Energy Star Score

80% 70% 60% 50% EAc3.2 40% EAc4 30% 20% 10% 0% 65
Source: USGBC

EAc2.1 EAc2.2 EAc2.3 EAc3.1

Cumulative % of Possible Points

IEQc2.2 IEQc2.3 IEQc2.4 IEQc1.3 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95

Energy Star Score

Supporting EE Strategies
Group 1 Higher Association
EAc2.1: EAc2.2: EAc3.1: IEQc2.2: Commissioning Investigation and Analysis Commissioning -- Implementation Building Automation System Occupant Controlled Lighting

Group 2 Lower Association

EAc2.3: EAc3.2: EAc4: IEQc1.3: IEQc2.3: IEQc2.4: Commissioning Ongoing Commissioning System-level Metering Renewable Energy Increased Ventilation Thermal Comfort Monitoring Daylight and Views

Conclusions & Near Future

Increasing interest in energy efficiency and operating cost reduction Increasing use of energy and emissions benchmarks Emerging policies requiring energy performance disclosure Increasing emphasis on automated data collection and analysis Increasing focus on continuous improvement and recertification

Anthony Guma

Copyright 2011 CoStar Group, Inc.

Office Vacancy
40% 35% 30% 25% 20% 15% 10% 5% 0% Vacancy Rate Office Buildings Class A and B 20,000 SF 1990+

Vacancy - LEED
Source: CoStar Group

Vacancy - All Office Vacancy 2010 Q1 - All Office

Vacancy 2010 Q1 - LEED

LEED Inventory and Absorption

25%

20%

15%

10%

5%

0%

Source: CoStar Group

LEED - % of Stock

LEED % of Total Absorption

Office Rent LEED v. non-LEED

$70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Average Rent/SF/YR (2011 Q1) Office Buildings Class A and B 20,000 SF 1990+

Source: CoStar Group

Rent - LEED

Rent - All Office

Industrial Vacancy
Vacancy Rate (2011 Q1) Industrial Buildings 50,000 SF 1990+ 35% 30% 25% 20% 15% 10% 5% 0% Atlanta Chicago Inland Empire Miami Philadelphia

Vacancy - LEED
Source: CoStar Group

Vacancy - All Industrial

Industrial Rents
Average Rent/SF/YR (2011 Q1) Industrial Buildings 50,000 SF 1990+ $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Atlanta
Source: CoStar Group

Chicago

Inland Empire

Miami

Philadelphia

Rent - LEED

Rent - All Industrial

Your Questions

Copyright 2011 CoStar Group, Inc.