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TWIN LAKES, Roseville, Minnesota Market Assessment & Demand Analysis Office Market Assessment INTRODUCTION GVA Marquette Advisors was asked to assess the current and proj ected office market situation and measure demand for additional office space in the market area over a five-year period. We begin by summarizing the proposed office development program for Twin Lakes. We the present an overview of current market conditions through an analysis of occupancy, absorption and market rentals rates. We conclude with our office market demand analysis. PROPOSED DEVELOPMENT The proposed office developmentprogram at Twin Lakes will be constructed over approximately a five-year period. Office development will consist of: � Corporate Office: Ryan Companies plans to construct a 150,000 to 175,000 square foot multi-story office building on a 10-acre parcel in the northwestem portion of the project area, at the comer of County Road C2 and Cleveland. Construction timing will be market-driven and is likely to be a built-to-suit facility, rather than a rnu�ti- tenant building. * Multi-Tenan� Office above Retail: Welsh Companies and Roseville Properties plan to construct 45,000 to 50,000 square feet of multi-tenant office space above street- level retail in two buildings fronting Twin Lakes Parkway near the entrance to Twin Lakes at Cleveland Avenue. These buildings will target small businesses seeking small, but new high-quality office space. Twin Lakes is particularly well located to attract small service-oriented businesses such as consultants, lawyers and accountants. The location provides good access to maj or business centers throughout the metro area, notably both downtown markets, and provides an attractive rr�ixed- use, high-energy neighborhood environment with convenient access to goods and services and restaurants. OFFICE MARKET UPDATE The following are key points regarding the Twin Cities office market environment, based on our review of information on the surrounding market area according to the recent United Properties Market Outlook report for 2004 {�`h Qtr.) and a sample office building survey in the market area cities of Roseville, New Brighton, Arden Hills, Shoreview and St. Anthony. Summary tables and graphs are provided at the end of this section. • Twin Lakes is located within the region's Northeast Sector, as defined by the United Properties Market Outlook report. The Northeast Sector includes all non-CBD office space north and east 1-94 in the Twin Cities metro area. The Northeast Sector is comprised of 6,906,111 square feet of net rentable office space, accounting for about GVA Marquette Advisors Page 48