Manulife US REIT - Annual Report 2021

ANNUAL REPORT 2021 59 Leasing Activity (Fairfax Center And Fairfax City) Tenant Address Class Lease type Size (s.f) Zeta Associates WillowWood III-IV A Renewal 210,190 Fairfax County Board of Supervisors 10777 Main Street C Blend and extend 61,563 Fairfax County EDA 10306 Eaton Place B Renewal 22,063 Tiber Creek 12015 Lee Highway B Blend and extend 19,926 Fairfax County 12015 Lee Highway B Renewal 17,075 Rummel Klepper & Kahl 12600 Fair Lakes Circle B Renewal 15,666 Office Sales (Fairfax Center And Fairfax City) Building RBA (s.f) Sales Price (US$) Price ($ p.s.f.) Buyer Seller Willow Oaks Corporate Center 597,363 106,000,000 $177 Bridge KBS CGI Building 263,900 55,300,000 $210 Opal Prudential WillowWood III-IV 278,979 46,300,000 $166 Turnbridge Twenty Lake 10777 Main Street 74,087 19,300,000 $260 Boyd Watterson Stephen Goldberg Northern Virginia Market Data As a result of these deals and limited outflows and consolidations, net absorption, while still negative, slowed sharply in 2021, keeping vacancy from hitting 24%. This is moderately above the Northern Virginia average, but impressive given a lack of Metro access or new construction. Sales activity was similarly impressive given headwinds, with US$226.9 million in transactions being finalised over the past six months. Bridge’s acquisition of the three- building Willow Oaks Corporate Center comprised nearly half of this volume. Amenable per-square-foot pricing between US$170 and US$220 per square foot has worked in investors’ favour as prices become out of reach in more traditional submarkets. Outlook Fairfax Center and Fairfax City will benefit from continued investment inmany of Northern Virginia’s key private-sector industries such as aerospace and engineering as well as its status as the seat of the county government. However, functional obsolescence and a lack of Metro access will keep the submarkets from being as competitive as those along the Silver and Orange Lines and the Toll Road.