U N I T S A B S O R B E D

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 U N I T S A B S O R B E D O F F I C E A B S O R P T I O N ( 0 0 0 s S F ) 2,000 4,500 1,500 3,500 1,000 2,500 500 1,500 0-500 500-500 -1,500-1,000-2,500 C L A S S A A P A R T M E N T S O F F I C E S P A C E Source: REIS, Delta Associates; April 2015.

Source: RCA, Moody s Investors Service, Delta Associates; April 2015.

S A L E S V O L U M E ( $ B I L L I O N S ) $2.5 Pgh Phil Balt $2.0 $1.5 $1.0 $0.5 $0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Real Capital Analytics, Delta Associates; April 2015.

A V E R A G E S A L E P R I C E P E R U N I T $130,000 $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 2010 2011 2012 2013 2014 Source: Real Capital Analytics, Delta Associates; April 2015.

U N E M P L O Y M E N T R A T E A N D A N N U A L I Z E D G D P C H A N G E 15% 51 months: Recession + Recovery 32 months: Recession + Recovery 32 months: Recession + Recovery 81 months: Recession + Recovery 10% 5% 0% 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14-5% -10% Percent Change in GDP Recession Unemployment Rate Recovery Source: BLS, BEA, Center for Regional Analysis, Global Insight, Delta Associates; April 2015.

C O N S U M E R S E N T I M E N T I N D E X 100 90 80 70 60 50 40 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Source: University of Michigan, Delta Associates; April 2015.

T H O U S A N D S O F I N F L A T I O N A D J U S T E D D O L L A R S $53 $51 $49 $47 $45 $43 $41 $39 $37 $35 2010 2011 2012 2013 2014 Source: BLS, Delta Associates; April 2015.

Jan-2010 Apr-2010 Jul-2010 Oct-2010 Jan-2011 Apr-2011 Jul-2011 Oct-2011 Jan-2012 Apr-2012 Jul-2012 Oct-2012 Jan-2013 Apr-2013 Jul-2013 Oct-2013 Jan-2014 Apr-2014 Jul-2014 Oct-2014 Jan-2015 AVERAGE PRICE PER GALLON FOR REGULAR GASOLINE $4.50 $4.00 Peak = $3.96 Consumers Save $192 Billion Per Year Current = $2.55 $3.50 $3.00 $2.50 $2.00 $1.50 2010 2011 2012 2013 2014 Source: U.S. Energy Information Administration, Delta Associates; April 2015.

CONSUMER CREDIT IN TRILLIONS $3.4 $3.2 $3.0 Jan. 2015 = $3.33 trillion $2.8 $2.6 $2.4 $2.2 $2.0 Post-Recession Low = $2.5 trillion Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2010 2011 2012 2013 2014 2015 Source: Federal Reserve, Delta Associates; April 2015.

V A L U E O F R E F I N A N C I N G M O R T G A G E O R I G I N A T I O N S I N T R I L L I O N S $1.5 $1.1 $1.0 $0.7 $0.5 $0.0 2013 2014 Source: Mortgage Bankers Association, Delta Associates; April 2015.

I N B I L L I O N S $100 $98 $96 $94 $92 $90 $88 $86 $84 $82 $80 2007 2008 2009 2010 2011 2012 2013 2014 Source: Woods & Poole, Delta Associates; April 2015.

T H O U S A N D S O F N E W P AY R O L L J O B S 80 70 60 50 53.6 40 30 20 10 0 Chicago Philadelphia Washington Baltimore Cleveland Pittsburgh St. Louis Source: U.S. Bureau of Labor Statistics, Delta Associates; April 2015.

T H O U S A N D S O F N E W P AY R O L L J O B S 100 80 60 20-Year Annual Average = 16,200/Year 40 20 0-20 -40-60 -80-100 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15* Source: U.S. Bureau of Labor Statistics, Delta Associates; April 2015. *12 months ending in February 2015.

Education/Health Construction/Mining Transportation/Utilities Leisure/Hospitality Professional/Business Services Retail Trade Other Services Financial Services Wholesale Trade Manufacturing Federal Government Information State and Local Government -3,800 +62,900-6,000-1,000 4,000 9,000 14,000 19,000 J O B C H A N G E Source: U.S. Bureau of Labor Statistics, Delta Associates; April 2015.

Education/Health Construction/Mining Transportation/Utilities Leisure/Hospitality Professional/Business Services Retail Trade Other Services Financial Services Wholesale Trade Manufacturing Federal Government Information State and Local Government -3,800 +62,900-6,000-1,000 4,000 9,000 14,000 19,000 J O B C H A N G E Source: U.S. Bureau of Labor Statistics, Delta Associates; April 2015.

PAY R O L L J O B S ( 0 0 0 S ) 50 40 30 20-Year Annual Average = 16,800/Year 3-Year Projected Average = 35,000/Year 20 10 0 2010 2011 2012 2013 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics, Delta Associates; April 2015.

A V E R A G E A N N U A L C H A N G E 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 25-34 35-44 45-54 55+ ( M i l l e n n i a l s ) ( B a b y B o o m e r s ) A G E R A N G E Source: U.S. Census Bureau, ACS, Delta Associates; April 2015.

P E R C E N T O F G E N E R A T I O N 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 54% Rent Millennials 20% Rent Baby Boomers Source : 2013 ULI/BRS National Survey, Delta Associates; April 2015.

P E R C E N T O F P O P U L A T I O N 2 5 T O 3 4 Y E A R S O L D 18% 16% 14% 12% 10% 8% 6% 4% 2% 16.8% United States: 13.5% 0% Philadelphia Camden Mercer Delaware Montgomery Balance of Metro Source: U.S. Census Bureau, Delta Associates; April 2015.

P O P U L A T I O N I N T H O U S A N D S 1,600 1,550 1,500 1,450 1,400 1,350 1,300 2005 2010 2014 Source: U.S. Census, Delta Associates; April 2015.

Source: Delta Associates; April 2015.

Source: 2012 U.S. Census Bureau, Delta Associates; April 2015. *Manhattan: 47%

A V E R A G E U N I T S I Z E ( S Q U A R E F E E T ) 1,200 1,100 1,062 1,000 942 900 800 796 700 642 600 500 400 300 1999-2004 2005-2010 2011-2013 2014 Source: Delta Associates; April 2015.

Clockwise from top right: Icon, 3737 Chestnut, Southstar Lofts

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 T H O U S A N D S O F U N I T S 2,400 Change in Owner-Occupied Units Change in Renter-Occupied Units 2,000 1,600 1,200 800 400 0-400 -800 Source: U.S. Census Bureau, Delta Associates, April 2015.

R E N T E R S A S % O F T O TA L H O U S E H O L D S 37% 36% 35% 34% 33% 32% 31% 30% 29% 28% 27% 26% U.S. Philadelphia Metro 2006 2007 2008 2009 2010 2011 2012 2013 Source: U.S. Census Bureau, Delta Associates; April 2015.

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 P E R C E N T O F P E O P L E M I L L I O N S O F P E O P L E 15.0% 14.5% Percent Millions 6.0 14.0% 13.5% 13.0% 12.5% 12.0% 11.5% 11.0% 10.5% 5.5 5.0 4.5 4.0 10.0% 3.5 Source: U.S. Census Bureau, John Burns Real Estate Consulting, WSJ, Delta Associates, April 2015.

Source: U.S. Census Bureau, Fannie Mae, Delta Associates; April 2015.

Source: Federal Reserve Bank of New York Consumer Credit Panel, Equifax, Delta Associates; April 2015.

U N I T S ( 0 0 0 s ) 800 700 600 500 400 300 200 205 100 0 LA DFW Was Hou Chi Atl Phx Phil Source: REIS, Delta Associates; April 2015. Note: Excludes NY metro to conserve scale

L O N G T E R M A N N U A L A B S O R P T I O N O F A L L C L A S S E S O F U N I T S 10,000 9,000 8,000 7,000 6,000 5,000 4,000 Class A Absorption in City of Philadelphia Over Past 12 Months = 961 3,000 2,000 1,000 0 896 DFW Hou Atl Was LA Phx Balt Phil Chi Pgh Source: REIS, Delta Associates; April 2015. Note: Excludes NY metro to conserve scale

V A C A N C Y R A T E ( A L L C L A S S E S ) 7.0% 6.0% Class A: 5.5% 6.5% 5.0% National Rate: 4.2% 4.0% 3.0% 2.0% 1.0% 0.0% Pgh LA NY Chi Wash DFW Phx Atl Hou Phi Balt Source: REIS, Delta Associates; April 2015.

E F F E C T I V E R E N T G R O W T H 10% Long-Term Average = 2.5% 8% Center City: 5.3% 6% 4% 3.6% U.S. 2% 0% -2% -4% 2009 2010 2011 2012 2013 2014 2015 1 2 M O N T H S E N D I N G F I R S T Q U A R T E R 2014 1 Source: Delta Associates, April 2015. 1 Source: REIS

M A R K E T R A T E U N I T S 14,000 12,000 10,000 8,000 6,000 4,000 Demand Net Absorption: 3,400/Year = 10,200 units Supply Under construction and planned and may deliver by 3/18: 12,625 units 2,000 0 P H I L A D E L P H I A M E T R O Source: Delta Associates; April 2015.

% E F F E C T I V E R E N T G R O W T H 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Long-Term Average = 2.5% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016 2017 2018 Source: Delta Associates; April 2015. *Annual rent change at 1 st quarter 2015 is 3.6%

Repurpose obsolete office assets that appeal to Millennials Build new units that appeal to empty-nesters/baby Boomers Accommodate work-at-home tenants