Check out our presentation from recent market survey breakfast. Lots of interesting projections for 2012!

2. STUART BARRON
National Director ResearchNational Director Research

3. Canada stands strong

4. Canada stands strong
Key national observations
T ’ l i d ffi h d i h hToronto’s explosive downtown office growth made it the hottest
market in North America
Canada is at a remarkable launching point, looking to ang p , g
expansionary cycle from 2013 to 2015
Both global and domestic factors are driving demand – key to
sustained growthsustained growth
Suburban market rebound remains fragile – may find a “new
normal” in the years to come
Record level of new building announcements inVancouver, Calgary,
Montreal andToronto

5. Canada’s stellar performance
Well-positioned for expansion
New Supply
(millions of sf)
Vacancy
Rate
Vacancy rate vs. new supply (all classes)
17.3%
16
18
20
16%
18%
20%
8.2%
6 6%
11.5%
8.8% 10
12
14
10%
12%
14%
6.6%
6.1% 7.5%
4
6
8
4%
6%
8%
0
2
0%
2%
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 3Q
11
New Supply Overall Vacancy RateNew Supply Overall Vacancy Rate
Updated Q3 2011

6. Check out Canada
Low vacancy: Our springboard to growth
Vacancy
Rate
Q3 2011 central area vacancy
10 largest US markets, 5 largest Canadian markets (all classes)
28.9%
25%
30%
35%
Rate
11.6% 12.0%
13.8% 14.4%
16.8%
18.3%
15%
20%
25%
3.7%
5.1% 5.1%
6.4% 6.5%
9.9% 10.0% 10.2%
11.6%
0%
5%
10%
0%
Updated Q3 2011

7. Our suburbs: surprising comparison
Low supply in Canada sets the stage for faster recovery
30%
Vacancy
Rate
Q3 2011 Suburban area vacancy
10 largest US markets, 5 largest Canadian markets (all classes)
20.4% 20.6%
21.9%
22.4%
25.3%
25%
30%
9 8%
12.1%
13.4%
15.3% 15.6% 16.1%
17.0%
17.8%
15%
20%
8.2% 8.7%
9.8%
5%
10%
0%
Updated Q3 2011

8. Outperforming expectations
Vancouver, Calgary, Montreal

9. Good-bye ocean views
Vancouver’s premium space all but gone
Vacancy
(000 f)
Vancouver downtown vacancy vs. average absorption (all classes)
12.7%
9.0%
12.0%
15.0%
150
200
250
Rate(000s sf)
5.9%
2.4%
5.6%
3.5%
0 0%
3.0%
6.0%
%
0
50
100
-6.0%
-3.0%
0.0%
-100
-50
0
Q4
99
Q2
00
Q4
00
Q2
01
Q4
01
Q2
02
Q4
02
Q2
03
Q4
03
Q2
04
Q4
04
Q2
05
Q4
05
Q2
06
Q4
06
Q2
07
Q4
07
Q2
08
Q4
08
Q2
09
Q4
09
Q2
10
Q4
10
Q2
11
-15.0%
-12.0%
-9.0%
-250
-200
-150
Absorption Vacancy Rate

10. Boom times again
Calgary soaks up office space
(000s sf)
Vacancy
Rate
Calgary downtown vacancy vs. rolling average absorption (all classes)
11.7% 11.8%
9.0%
12.0%
600
800
(000s sf) Rate
6.9%
0.3%
5.5%
0 0%
3.0%
6.0%
0
200
400
-6.0%
-3.0%
0.0%
(400)
(200)
0
-9.0%
6.0%
(600)
(400)
Q1
01
Q3
01
Q1
02
Q3
02
Q1
03
Q3
03
Q1
04
Q3
04
Q1
05
Q3
05
Q1
06
Q3
06
Q1
07
Q3
07
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Absorption Vacancy RateAbsorption Vacancy Rate

11. Strong rebound
Montreal central area gathers steam
(000s sf)
Vacancy
Rate
Montreal central area vacancy vs. rolling average absorption (all classes)
12.3%
9 3%
8.1%
6 5%
9.0%
12.0%
15.0%
200
300
400
7.7%
9.3%
5.5%
6.5%
0.0%
3.0%
6.0%
0
100
200
-9.0%
-6.0%
-3.0%
(200)
(100)
-15.0%
-12.0%
(400)
(300)
Q1
01
Q3
01
Q1
02
Q3
02
Q1
03
Q3
03
Q1
04
Q3
04
Q1
05
Q3
05
Q1
06
Q3
06
Q1
07
Q3
07
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Absorption Vacancy Rate

12. GTA suburban growthGTA suburban growth
Aerocentre
BMO Meadowvale building
Hazel
General Mississaugag
1919 Minnesota court

13. Recovery takes hold
Suburban demand gains traction
Rolling absorption vs. vacancy (all classes)
25.0%1000
(000s sf)
Vacancy
Rate
19.4%
15 0%
20.0%
600
800
12.0%
9.5%
8.2%
10.0%
15.0%
400
600
7.7%
6.6%
0.0%
5.0%
0
200
-10.0%
-5.0%
-400
-200
92
92
93
94
95
95
96
97
98
98
99
00
01
01
02
03
04
04
05
06
07
07
08
09
0
0
1
Rolling Average Absorption Vacancy Rate
Q19
Q49
Q39
Q29
Q19
Q49
Q39
Q29
Q19
Q49
Q39
Q20
Q10
Q40
Q30
Q20
Q10
Q40
Q30
Q20
Q10
Q40
Q30
Q20
Q11
Q41
Q31

14. Positioned for growth
Low supply supports recovery
GTA West new supply vs. Q4 vacancy class A
160000.0%
180000.0%
200000.0%
160000.0%
180000.0%
200000.0%16.8%
14 0%
16.0%
18.0%
1600
1800
2000
(000s sf)
100000.0%
120000.0%
140000.0%
100000.0%
120000.0%
140000.0%
10.3%
10.1%
8 0%
10.0%
12.0%
14.0%
1000
1200
1400
20000 0%
40000.0%
60000.0%
80000.0%
20000 0%
40000.0%
60000.0%
80000.0%
6.9%
5.2%
2 0%
4.0%
6.0%
8.0%
200
400
600
800
0.0%
20000.0%
0.0%
20000.0%
0.0%
2.0%
0
200
2000 2001 2002 2003 2008 2009 2010 2011 YTD
New Supply Vacancy Rate

15. Moving in the right direction
Absorption pushes towards expansionary demand
GTAWest average absorption (all classes) 2008 recession
(000s sf)
400
375
450
(000s sf)
250
150
225
300
11
81
0
75
-87
-150
-75
Year 1 Year 2 Year 3 Expansion
Demand
Hot
Demand

16. Recessionary impact
Different experiences for GTA West submarkets
(000s sf)
GTA West - total absorption (class A)
400
600
800
0
200
400
(400)
(200)
(600)
Airport 427 Corridor Oakville Hurontario Meadowvale Mississauga
Corporate Centre
1st 9 quarters of recession:
Q4 2008 to Q4 2010
Past 3 quarters
Q4 2008 to Q4 2010

17. Slow but sure
GTA suburban markets recovery rates
16%
Vacancy
Rate
Vacancy all classes
14.5%
12.0%
10.7%10.6%
10.3%10 0%
10%
12%
14%
6.8%
10.0%
8.3%
6%
8%
10%
3.7%
0%
2%
4%
-2%
0%
West East North
2003 D t P k 2008 R i P k C t
Q1 11Q1 03 Q3 11 Q1 03 Q2 10 Q3 11 Q1 04 Q4 09 Q3 11
2003 Downturn Peak 2008 Recession Peak Current

18. Suburban demand drivers
Key observations
Demand will likely slow by mid-2012 and pick up again in 2013Demand will likely slow by mid 2012 and pick up again in 2013
“New normal” demand may emerge; lower than historical averages
Sl d US dSlower recovery due to greater exposure to US economy and
stimulus measures
Tighter than after past recessions because of the low new supply,g p pp y,
which will support faster recovery

19. And now for DowntownAnd, now for Downtown
Toronto

20. Who would’ve guessed?
Demand reached record highs through the Great Recession
Downtown vacancy vs. average absorption (all classes)
(000s sf)
Vacancy
Rate
19.1%
11.9%
5.0%
15.0%
20.0%
450
600
750
Rate
3 1%
3.6%
6.8%
5.0%
10.0%
150
300
450
3.1%
-5.0%
0.0%
-300
-150
0
-15.0%
-10.0%
-600
-450
3Q91
3Q92
3Q93
3Q94
3Q95
3Q96
3Q97
3Q98
3Q99
3Q00
3Q01
3Q02
3Q03
3Q04
3Q05
3Q06
Q307
3Q08
3Q09
3Q10
3Q11

21. Ignited demand
Telling the tale of new supply success
Cumulative absorption – downtown premium space
(000s sf)
2,000
3,000
(000s sf)
0
1,000
-1,000
-3,000
-2,000
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Class A &AAA 2001 Downturn Class A&AAA 2008 Recession

22. Staggering success of new buildings
Corus
Bay Adelaide
1,027,937
occupied
RBC Centre
1,223,479
occupied
Corus
Building
482,000
occupied
UPIEDAREATOTALOCCU
25 York Street25 York Street
Maple Leaf
S
18 York Street
Updated Sept. 9, 2011
780,000
occupied
780,000
occupied
Square
223,020
occupied
671,786
occupied

23. Sectors leading expansion
DowntownToronto Q4 2009 – Q4 2011
Banks
40 4%
Information &
Communications
5.1%
Real Estate
0.9%
Government
0.1%
40.4%
Other
16.1%
Technology,
Research &
Professional
Services
22 6%22.6%
Other Finance &
Insurance
14.8%

24. Looking for ardLooking forward
•The shape of demand 2013 to 2015The shape of demand 2013 to 2015

25. Factors strengthening downtown demand
Toronto increasingly seen as a prime location for global business
Educated multicultural talent pool
Following the talent: Business migration to downtowng g
Canada’s strong banking sector -- poised for future expansion
Flight to sustainable buildings & efficient high density workplacesFlight to sustainable buildings & efficient high-density workplaces
Condos support growing downtown population
Urban revitalization marches on – Waterfront, Union Station, new retail
formats & more

26. Factors weakening downtown demand
Uncertainty about impact of global economic upheaval on short- term
business confidence
Slowing of global stimulus as governments show greater fiscal restraintSlowing of global stimulus as governments show greater fiscal restraint
Banking sector demand a hard read
W k l i d i i i i d i dWork place strategies and cost saving strategies increasing density and
driving down need for space

27. DowntownToronto vacancy projections
Premium space (includes large blocks returning to market)
Vacancy
Rate
(000s sf)
10 5%
12%
14%
16%
1,500
1,750
2,000
Annual Absorption (000s)
Low 225
Medium 450
High 675
6.9%
8.7%
5.6%
10.5%
6%
8%
10%
750
1,000
1,250
2.3%
3.9%
2%
4%
6%
250
500
750
0%0
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
Existing Class A Buildings - Large Blocks Existing Class AAA Buildings - Large Blocks
Updated Q3 2011
New Developments Vacancy Downtown Class A & AAA Vacancy Rate - High Demand
Downtown Class A & AAA Vacancy Rate - Medium Demand Downtown Class A & AAA Vacancy Rate - Low Demand