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TWIN LAKES, Roseville, Minnesota Market Assessment & Demand Analysis Office Market Assessment Summary: Development Pipeline To summarize, roughly 18,000 square feet of office space could come to market in the coming one to two year period in two projects in Shoreview. Meanwhile, land-use planning in New Brighton, Shoreview and Arden Hills calls for potential long-term office development as part of mixed-use development projects. These master plans are still being refined at the city level. The NW Quadrant in New Brighton could bring an office project of about 200,000 square feet to market within about three years, but the timing of that project, like Twin Lakes, will be market driven. OFFICE DEMAND FORECAST GV A Marquette Advisors developed a forecast of demand for office space in the Twin Cities Northeast Sector based upon regional employment projections for 2005-2010. Our calculations are presented on the table on the following page and are summarized in the bullet points starting below. . We reviewed data on current employment by industry sector, as well as data on employment growth forecasts by occupation & industry sector by the Minnesota Department of Economic Security. Based on this analysis, we conservatively estimate that about 30% to 35% of job growth will be office-related. This includes jobs in the following employment sectors: Finance, Insurance and Real Estate, Business and Professional Services, Healthcare, Education, Government, as well a portion of jobs in other sectors of the economy. ( . We estimate 5-year job growth of 25,000 jobs per year throughout the metro area, with an estimated 30% to 35% ofthese new jobs being "office" jobs. This equates to projected 5-year office employment growth of 37,500 to 43,750 jobs. . Multiplying the projected office job growth figures by the industry standard of 200 square feet per employee results in total regional demand (total absorption) for between 7.5 and 8.75 million square feet over the coming 5-year period, or about 750,000 to 875,000 square feet per year. . As noted in our analysis, the Northeast Sector currently accounts for about 10% of the Twin Cities office universe. Since 1995, this submarket has accounted for more than 18% of regional office space absorption. In 2004, its share of regional absorption was 20%. In fact, Class A and B office buildings in the cities of Roseville, Arden Hills, New Brighton and St. Anthony captured more than 270,000 square feet of positive absorption in 2004. This equates to more than 70% of regional absorption for the year. On this basis, we conclude that the Roseville area is currently competing very well as a location within the metro area for new office tenants. ( GV A Marquette Advisors Page 54