Our Panelists SPEAKERS MODERATOR

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2 SPEAKERS Our Panelists Jennifer Aument, Transurban Gary Garczynski, Commonwealth Transportation Board Russ Gestl, Buchanan Partners, LLC Robert Shue, JLL MODERATOR David Birtwistle, Northern Virginia Transportation Alliance

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4 The I-66 Story (76 miles from D.C. to 1-81) first proposed 1958 to 1964 Various segments west of the Beltway completed 1963 to lane divided freeway from the Beltway to Centreville constructed 1963 to 1964 Regional Metrorail system plan adopted 1986 VDOT recommends widening for 21 miles from Beltway to Gainesville at a cost of $600 million 1986 Orange line service from Ballston to Vienna initiated 1993 Additional lane and HOV lane open from Beltway to Route Began construction of additional general purpose lane and HOV lane west of Route 50

5 The I-66 Story 1995 Widened segment between Route 50 and Centreville opens 1996 Widened segment between Centreville and Manassas opens 1997 Initiated design for widening between Route 234 and Gainesville 1999 I-66 Major Investment Study final recommendations adopted 2010 Widening between Manassas and Gainesville with one general purpose lane and one HOV lane in each direction, including a reconstructed interchange at I-66/US 29 constructed as a series of projects Current VDOT improving 2.6-mile section of I-66 between US 29 in Gainesville and US 15 near Haymarket (scheduled completion 2015)

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7 Project Briefing June 11, 2015 Gary Garczynski Commonwealth Transportation Board Member

8 I-66 Outside the Beltway Improvement Area

9 Project Scope Elements Two Express Lanes (convert existing HOV lane & add one lane) HOV-3 and buses travel free Non-HOV tolled Congestion-based tolls (similar to other Express Lanes in region) Converting HOV-2 to HOV-3 by 2020, consistent with the region s Constrained Long Range Plan Three regular lanes Open to all traffic No tolls Ramp-to-ramp connections (auxiliary lanes) Rapid bus service and other multimodal improvements High frequency of service during peak hours and new service available beyond peak hours Travel in express lanes for predictable travel times Park-and-Ride lots, Transportation Demand Management

10 Typical Section Alternatives 290 Alt. 1 Concrete Barrier with Full Shoulders and Median for Future Center Transit (with auxiliary lanes, if needed) 246 Alt. 2A Flexible Barrier with Buffer and Median for Future Center Transit (with auxiliary lanes, if needed) 206 Alt. 2B Flexible Barrier with Buffer and No Median (with auxiliary lanes, if needed) 10

11 Express Lanes Access Alternatives

12 Path to Preferred Alternative Transit, Park and Ride Lots, and TDM Mainline Alternatives Access Alternatives Interchange Alternatives Universe of Alternatives for Roadways and Interchanges Environmental Draft Alternative 2A Public Input Environmental Draft Alternative 2B Preferred Alternative (combination of best elements from each alternative)

13 Northern Virginia Express Lanes Update June 2015

14 EXPRESS LANES BY THE NUMBERS ECONOMIC BENEFITS 1 TIME SAVINGS 2 $5.3 billion generated in economic activity 28,000 jobs supported $765 million in DBE/SWaM contracts BENEFITS FOR TRANSIT/HOV 33 minutes average time savings per trip on I-95 Express Lanes 2.5 hours maximum time savings for one trip (Springfield to Stafford) 17.5 minutes average time savings per trip on I-95 general purpose lanes DELIVERY 20,000+ HOV trips per weekday in March 33% of weekday trips on I-95 Express Lanes 540 bus trips per weekday trips on I-95 Express Lanes 1 George Mason University, 2008 & Tranffic Analysis Feb 2015 Completed on time and under budget both construction of 495 and 95 Express Lanes 4.1 million man hours without a lost time incident 14

15 PUBLIC OPINION 78% customer satisfaction 50% of weekly Express Lanes users make less than $100K 74% of non-users agree Express Lanes are good for the region 2/3 of carpoolers rate the Express Lanes positively These new 95 Express lanes are the closest thing to a time machine we re ever gonna have. via Twitter 70% of users use both I-495 and I-95 Express Lanes

16 VALUE OF PUBLIC-PRIVATE PARTNERSHIP Virginia/Global Experience: P3 projects cost 15% to 40% less Cost of Capital Revenue Depoliticize to maximize revenue & travel flow Debt Capacity Protect AAA credit rating & preserve debt capacity Risk Shift long-term financial risk away from taxpayers Source: Colorado DOT Value for Money Report Dec Lifecycle Reduce operations and maintenance costs New Revenue Inject new revenue to free up funding for other projects Delivery Avoid delays and cost overruns; 3x more likely without P3s 16

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19 Arlington Fairfax Loudoun Prince William Stafford Fauquier Number of working residents 139, , , ,782 67,040 33,428 % that commute to jobs outside of their home jurisdiction 67.6% 48.5% 53.6% 64.4% 66.2% 58.5% # that commute to jobs outside their home jurisdiction 94, ,500 88, ,300 44,300 19,500 Information from 2011 US Census, American Community Survey

20 Population Fairfax County 454, , , ,000 1,056,400 1,147,200 1,232,200 1,281,300 Loudoun County 37,200 57,400 86, , , , , ,500 Prince William County 95, , , , , , , ,500 Employment Fairfax County 173, , , , , , , ,600 Loudoun County 10,000 17,500 39,300 90, , , , ,400 Prince William County 32,800 37,000 68,800 94, , , , ,800

21 Follow and support VDOT s I-66 Project Support and join the Alliance (Northern Virginia Transportation Alliance) NVTA.org

22 Finding the right fix from the tenant s perspective June 11, 2015

23 Our 2015 market forecast. 1. The pullback in new construction will stabilize the market and skew large vacancies into mostly inferior, second-generation buildings. 2. Demand from traditional segments of the regional tenant base will remain subdued, as cost-cutting measures and improved efficiency allows law firms, federal agencies and contractors to reduce their footprints. 3. Growth within non-traditional sectors of the economy will boost tenant demand. Unparalleled workforce demographics and pro-business governance will help the region capture inbound tenant demand. Continued gains will be realized in healthcare, education, consumer technology and cyber security. 4. Walkable, mixed-use, transit-oriented submarkets will drastically outperform one-dimensional outlying markets over the next decade. Changing demographics and workforce preferences for walkable communities will shift demand from traditional suburban office parks on the side of a highway, to more vibrant, transit-accessible submarkets in the urban core. Generally speaking, this shift will create new inbound demand for submarkets inside the Beltway at the expense of submarkets outside the Beltway. 5. Investor interest in Washington, DC assets will remain high. Low interest rates and a relative lack of investment alternatives will continue to drive the DC investment sales market. Prices will remain high and cap rates will remain low as large pools of cash compete over finite buying opportunities. Source: JLL Research 24

24 Leasing activity has been flat in the submarkets along I ,000 Net absorption by submarket 200, , , , ,000-1,000,000-1,200, ,400, ,600,000 Tysons Springfield Merrifield Fairfax Center Route 28 South Reston Herndon Crystal City RB Corridor Alexandria Loudoun County Prince William County Source: JLL Research 25

25 Submarkets along I-66 offer a cheaper alternative to the rest of Northern Virginia Average Rent $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Source: JLL Research 26

26 Total vacancy in Fairfax Corner has consistently been under the overall submarket vacancy Fairfax Corner Fairfax Center 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Source: JLL Research 27

27 Fairfax Corner continues to have a 22.6 percent rent premium over the rest of Fairfax Center $40 $35 $30 Average asking rent ($ p.s.f.) $25 $20 $15 Fairfax Corner Fairfax Center $10 Source: JLL Research

28 Summary Price Easy Access Walkable / Close By Amenities Modern Facility With Efficient Floor Plan 29

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