Tier Reit (TIER) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Supplemental Operating and Financial Data

For the Quarter Ended June 30, 2015

About the Company

TIER REIT, Inc. is a self-managed, Dallas, Texas-based real estate investment trust whose goal is to maximize total return to stockholders through the combination of stock appreciation and income derived from a sustainable distribution. TIER’s investment strategy is to acquire, develop, and operate a portfolio of best-in-class office properties in select markets across the U.S. that consistently lead the nation in population and office-using employment growth. As of June 30, 2015, we owned interests in 31 operating office properties, one recently developed non-operating office property and one retail property, located in 16 markets throughout the United States with a total of 12.4 million rentable square feet.

Senior Management

Scott W. Fordham	Chief Executive Officer and President
Dallas E. Lucas	Chief Financial Officer and Treasurer
William J. Reister	Chief Investment Officer and Executive Vice President
Telisa Webb Schelin	Chief Legal Officer, Executive Vice President and Secretary
James E. Sharp	Chief Accounting Officer and Executive Vice President
R. Heath Johnson	Managing Director - Asset Management
Dean R. Hook	Senior Vice President - Information Systems

Where to Get More Information:

Kelly Sargent Vice President - Investor Relations

By Phone:

(972) 483-2400

By Email:

ir@tierreit.com

By Mail:

17300 Dallas Parkway, Suite 1010

Dallas, Texas 75248

as of September 14, 2015, please contact us at our new address:

5950 Sherry Lane, Suite 700

Dallas, Texas 75225

Website:

www.tierreit.com

Supplemental Operating and Financial Data

For the Quarter Ended June 30, 2015

Table of Contents:

Overview and Highlights
Overview	1
Financial Highlights	2-3
Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statements of Discontinued Operations	6
Calculation of FFO and FAD	7
Calculation of EBITDA	8
Joint Venture Financial Summary	9
Same Store Analysis	10
Schedule of Properties Owned	11
Net Operating Income by Market	12
Components of Net Asset Value	13
Selected Non-Stabilized Properties	14
Significant Tenants	15
Industry Diversification	16
Leasing
Leasing Activity	17-18
Lease Expirations	19-20
Occupancy Trends	21
Capital Expenditures
Leasing Cost Analysis	22
Leasing Cost Trend Analysis	23
Development, Leasing, and Capital Expenditures Summary	24
Other Information
Potential Future Development Sites	25
Acquisition and Disposition Activities	26
Summary of Financing	27
Principal Payments by Year	28
Definitions of Non-GAAP Financial Measures	29-30

Forward Looking Statements

This supplemental operating and financial data report contains forward-looking statements relating to the business and financial outlook of TIER REIT, Inc. that are based on current expectations, estimates, forecasts, and projections and are not guarantees of future performance. Statements contained herein may be impacted by a number of risks and uncertainties, including the company’s ability to rent space on favorable terms, its ability to address debt maturities and fund its capital requirements, the value of its assets, its anticipated capital expenditures, and other matters. Actual results may differ materially from those expressed in these forward-looking statements, and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from the forward-looking statements contained in this document, as well as other factors described in the Risk Factors section of TIER REIT, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014, and subsequent Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. Forward-looking statements in this document speak only as of the date on which such statements were made, and we undertake no obligation to update any such statements that may become untrue because of subsequent events.

Overview

For the Quarter Ended June 30, 2015

Quarterly Highlights and Financial Results

• FFO attributable to common stockholders, excluding certain items for the second quarter of 2015 was $17.2 million, as compared to $17.4 million for the first quarter of 2015, a decrease of $0.2 million, or 1.1%

• Same Store GAAP NOI for the second quarter of 2015 was $31.5 million, as compared to $29.4 million for the second quarter of 2014, an increase of $2.1 million, or 7.1%

• Same Store Cash NOI for the second quarter of 2015 and 2014 were each $27.6 million.

Property Results

• Occupancy at June 30, 2015, was 89.0%, an increase of 60 basis points from March 31, 2015

• Leased 857,000 square feet - 622,000 square feet of renewals, 91,000 square feet of expansion space, and 144,000 square feet of new leasing

Real Estate Activities

• Sold Fifth Third Center (Cleveland, Ohio) for $52.8 million, resulting in a $6.1 million gain

• Sold 1650 Arch Street and United Plaza (Philadelphia, Pennsylvania) for $190.8 million, resulting in a combined gain on sale of $27.5 million

• Sold Colorado Building and 1325 G Street (Washington, D.C.) for $202.0 million, to two separate entities in which we maintain a 10% ownership interest resulting in a combined gain on sale of $17.1 million

• Acquired a 95% interest in a land development project in the central business district of Austin,Texas, for $7.5 million

• Acquired a 95% interest in a land development project in the Legacy Town Center submarket of Plano (Dallas),Texas, for $6.2 million

Capital Market Activities

• Paid off $496.0 million of CMBS debt secured by six properties

• Amended credit facility adding a seven-year $275.0 million term loan that matures in June 2022, with an initial swapped-to-fixed interest rate of 3.67%

• Reduced our 2015 and 2016 debt maturities to $47.5 million and $237.4 million, respectively    

• On July 23, 2015, we listed our common stock on the NYSE under the ticker symbol “TIER”

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 1

Financial Highlights
(in thousands, except per share data, effective rent data, and number of properties)
	30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Portfolio Summary:
(at our ownership %, unless otherwise noted)
Total operating office properties	31			38			31			34			37			37			38
Rentable square feet (100%) (operating properties)	11,946			15,501			11,946			13,624			14,304			15,291			15,501
Rentable square feet (own %) (operating properties)	10,418			14,364			10,418			12,487			13,167			14,154			14,364
Occupancy %	89		%	86		%	89		%	88		%	88		%	87		%	86		%
Executed % SF leased	89		%	87		%	89		%	90		%	89		%	89		%	87		%
Economic % SF leased	82		%	81		%	82		%	82		%	82		%	82		%	81		%
Average effective rent/square feet	$	24.94		$	25.79		$	24.94		$	25.95		$	26.02		$	26.13		$	25.79
	Six Months Ended						Three Months Ended
	30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Financial Results:
Revenue	$	145,857		$	141,294		$	70,038		$	75,819		$	74,616		$	72,157		$	71,234
Base rent	$	108,259		$	104,343		$	51,336		$	56,923		$	54,771		$	53,141		$	52,305
Free rent	$	(10,538	)	$	(5,085	)	$	(5,365	)	$	(5,173	)	$	(3,717	)	$	(2,284	)	$	(2,518	)
NOI	$	73,522		$	68,153		$	36,858		$	36,664		$	38,116		$	36,192		$	35,547
Net income (loss) attributable to common stockholders (2)	$	(7,043	)	$	(46,893	)	$	(1,151	)	$	(5,892	)	$	45,806		$	(16,355	)	$	(17,279	)
Diluted earnings (loss) per common share (1) (2)	$	(0.14	)	$	(0.94	)	$	(0.02	)	$	(0.12	)	$	0.92		$	(0.33	)	$	(0.35	)
FFO attributable to common stockholders	$	(1,147	)	$	33,536		$	(18,051	)	$	16,904		$	3,107		$	17,071		$	19,066
Diluted FFO per common share (2)	$	(0.02	)	$	0.67		$	(0.36	)	$	0.34		$	0.06		$	0.34		$	0.38
FFO attributable to common stockholders, excluding certain items	$	34,625		$	33,536		$	17,181		$	17,444		$	17,889		$	18,020		$	19,066
Diluted FFO, excluding certain items per common share (2)	$	0.69		$	0.67		$	0.34		$	0.35		$	0.36		$	0.36		$	0.38
FAD attributable to common stockholders	$	380		$	(3,992	)	$	(1,176	)	$	1,556		$	(2,656	)	$	1,958		$	1,505
FAD per common share (2)	$	0.01		$	(0.08	)	$	(0.02	)	$	0.03		$	(0.05	)	$	0.04		$	0.03
Normalized EBITDA	$	70,511		$	77,449		$	33,439		$	37,072		$	41,294		$	40,094		$	41,090
Weighted average common shares outstanding - basic (2)	49,892			49,874			49,893			49,891			49,877			49,877			49,877
Weighted average common shares outstanding - diluted (2)	50,076			50,001			50,085			50,066			49,996			49,996			49,937
Selected Additional Trend Information:
Renewal % based on square feet	81		%	58		%	83		%	74		%	89		%	75		%	49		%
Distributions declared on common shares	$	9,011		$	—		$	9,011		$	—		$	—		$	—		$	—
Annualized distribution yield (3)	1.3		%	0.0		%	2.7		%	0.0		%	0.0		%	0.0		%	0.0		%

(1) In periods of net loss from continuing operations or negative FFO attributable to common stockholders there are no dilutive securities and diluted earnings (loss) per common share or diluted FFO per common share is calculated using weighted average common shares outstanding - basic as the denominator.

(2) All periods presented have been adjusted to reflect the one-for-six reverse stock split that occurred on June 2, 2015.

(3) Based on the October 30, 2014, estimated per share value of our common stock.

Occupancy % represents the total square footage subject to commenced leases as of the reporting date as a percentage of the total rentable square feet (at our ownership interest).

Executed % SF leased represents the total square footage subject to commenced leases plus the square footage for currently vacant space that is subject to executed leases that have not commenced as of the reporting date as a percentage of the total rentable square feet (at our ownership interest).

Economic % SF leased represents the total square footage subject to commenced leases as of the reporting date adjusted to exclude the square footage associated with leases receiving rental abatements as a percentage of the total rentable square feet (at our ownership interest).

Average effective rent represents 12 times the sum of the monthly contractual amounts for base rent and the pro rata budgeted operating expense reimbursements, as of period end, related to leases in place as of period end, as reduced for free rent and excluding any scheduled future rent increases, as adjusted for our ownership interest.

This section includes non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 7-8. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations can be found on pages 29-30.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 2

Financial Highlights (continued)
(in thousands)
	30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Selected Balance Sheet Items:
Total book value of real estate (1)	$	1,488,373		$	2,029,715		$	1,488,373		$	1,609,953		$	1,768,766		$	2,008,569		$	2,029,715
Cash and cash equivalents	$	153,158		$	1,183		$	153,158		$	5,764		$	31,442		$	923		$	1,183
Unconsolidated cash and cash equivalents (at ownership %)	$	3,368		$	3,127		$	3,368		$	2,480		$	3,355		$	3,621		$	3,127
Restricted cash	$	29,620		$	47,404		$	29,620		$	32,761		$	35,324		$	49,654		$	47,404
Total assets	$	1,919,743		$	2,363,565		$	1,919,743		$	2,116,165		$	2,211,183		$	2,340,502		$	2,363,565
Mortgage notes payable (1)	$	505,224		$	1,470,951		$	505,224		$	903,475		$	1,069,085		$	1,445,017		$	1,470,951
Revolving credit facility and term loan	$	525,000		$	—		$	525,000		$	221,000		$	125,000		$	20,000		$	—
Notes payable classified as held for sale	$	—		$	—		$	—		$	96,824		$	97,257		$	—		$	—
Unconsolidated debt (at ownership %)	$	72,392		$	60,988		$	72,392		$	59,870		$	60,253		$	60,625		$	60,988
Total liabilities	$	1,144,786		$	1,606,773		$	1,144,786		$	1,338,198		$	1,423,023		$	1,599,724		$	1,606,773
Common stock outstanding (5)	49,872			49,877			49,872			49,901			49,877			49,877			49,877
OP units and vested restricted stock units outstanding (5)	76			72			76			78			78			78			72
Restricted stock outstanding (5)	192			119			192			192			119			119			119
Capitalization:
Market capitalization (2)	$	1,342,602		$	1,258,726		$	1,342,602		$	1,343,444		$	1,342,808		$	1,258,883		$	1,258,726
Total debt (3)	$	1,102,616		$	1,531,939		$	1,102,616		$	1,281,169		$	1,351,595		$	1,525,642		$	1,531,939
Net debt (4)	$	946,090		$	1,527,629		$	946,090		$	1,272,925		$	1,316,798		$	1,521,098		$	1,527,629
Total capitalization	$	2,445,218		$	2,790,665		$	2,445,218		$	2,624,613		$	2,694,403		$	2,784,525		$	2,790,665
Net debt/total capitalization	39		%	55		%	39		%	48		%	49		%	55		%	55		%
	Six Months Ended						Three Months Ended
	30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Ratios:
NOI margin %	50.4		%	48.2		%	52.6		%	48.4		%	51.1		%	50.2		%	49.9		%
Normalized fixed charge coverage	1.77			1.42			1.78			1.76			1.54			1.46			1.51
Normalized interest coverage	2.06			1.74			2.05			2.06			1.90			1.79			1.83
Net debt/normalized annualized estimated full period EBITDA from properties owned at period end	N/A			N/A			7.75x			8.94x			8.43x			9.56x			9.30x
(1) Excludes book value of real estate and notes payable classified as held for sale.
(2) Market capitalization is equal to outstanding shares (common stock, OP units, and vested restricted stock units, as if converted) times our estimated stock value of $25.20 per share through October 2014 or $26.88 per share beginning in November 2014, as reported in Quarterly Reports on Form 10-Q filed on November 5, 2013, and November 3, 2014, respectively and reflect the one-for-six reverse stock split that occurred on June 2, 2015.
(3) Includes book value of mortgage notes payable, the revolving credit facility and term loan, notes payable classified as held for sale, and TIER REIT’s ownership share of unconsolidated debt.
(4) Total debt less cash and cash equivalents.
(5) All periods presented have been adjusted to reflect the one-for-six reverse stock split that occurred on June 2, 2015.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 3

Consolidated Balance Sheets
(in thousands, except share and per share data)
		30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Assets
	Real estate
	Land	$	167,231		$	249,030		$	286,430		$	318,058		$	316,897
	Land held for development	6,377			—			—			—			—
	Buildings and improvements, net	1,314,765			1,360,923			1,482,336			1,690,511			1,644,088
	Real estate under development	—			—			—			—			68,730
	Total real estate	1,488,373			1,609,953			1,768,766			2,008,569			2,029,715
	Cash and cash equivalents	153,158			5,764			31,442			923			1,183
	Restricted cash	29,620			32,761			35,324			49,654			47,404
	Accounts receivable, net	71,877			75,466			83,380			100,601			99,272
	Prepaid expenses and other assets	31,890			7,222			7,129			8,033			7,234
	Investments in unconsolidated entities	44,780			39,422			39,885			41,420			41,443
	Deferred financing fees, net	13,292			10,690			10,783			7,130			8,101
	Acquired above-market leases, net	1,619			163			2,019			4,442			5,229
	Other lease intangibles, net	74,850			77,480			92,671			117,556			121,781
	Other intangible assets, net	10,284			2,114			2,144			2,174			2,203
	Assets associated with real estate held for sale	—			255,130			137,640			—			—
Total assets		$	1,919,743		$	2,116,165		$	2,211,183		$	2,340,502		$	2,363,565
Liabilities and equity
Liabilities:
	Notes payable	$	505,196		$	903,688		$	1,069,323		$	1,445,018		$	1,470,974
	Term loan	525,000			125,000			125,000			—			—
	Revolving credit facility	—			96,000			—			20,000			—
	Unamortized mark to market premium (discount)	28			(213		)	(238		)	(1		)	(23		)
	Total notes payable	1,030,224			1,124,475			1,194,085			1,465,017			1,470,951
	Accounts payable	2,192			1,118			2,790			5,543			6,549
	Payables to related parties	794			2,257			2,041			1,820			1,650
	Accrued liabilities	64,794			65,713			77,375			86,174			84,696
	Acquired below-market leases, net	12,773			14,381			16,984			19,618			21,318
	Deferred tax liabilities	2,507			2,551			2,880			760			923
	Other liabilities	22,474			23,246			18,525			20,792			20,686
	Distributions payable	9,028			—			—			—			—
	Obligations associated with real estate held for sale	—			104,457			108,343			—			—
Total liabilities		1,144,786			1,338,198			1,423,023			1,599,724			1,606,773
Commitments and contingencies
Series A Convertible Preferred Stock		4,626			4,626			4,626			2,700			2,700
Equity:
	Preferred stock	—			—			—			—			—
	Convertible stock	—			—			—			—			—
	Common stock, $.0001 par value per share, 382,499,000 shares authorized (1)	5			5			5			5			5
	Additional paid-in capital (1)	2,645,825			2,646,147			2,645,927			2,647,535			2,647,215
	Cumulative distributions and net loss attributable to common stockholders	(1,878,611		)	(1,868,447		)	(1,862,555		)	(1,910,287		)	(1,893,932		)
	Accumulated other comprehensive income (loss)	799			(5,336		)	(788		)	—			—
	Stockholders’ equity	768,018			772,369			782,589			737,253			753,288
	Noncontrolling interests	2,313			972			945			825			804
Total equity		770,331			773,341			783,534			738,078			754,092
Total liabilities and equity		$	1,919,743		$	2,116,165		$	2,211,183		$	2,340,502		$	2,363,565
Common stock, number of shares issued and outstanding (1)		49,871,776			49,901,013			49,877,350			49,877,350			49,877,350
(1) All periods have been adjusted to reflect the one-for-six reverse stock split that occurred on June 2, 2015.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 4

	Consolidated Statements of Operations
	(in thousands, except share and per share amounts)
		Six Months Ended						Three Months Ended
		30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Revenue
	Rental income	$	135,557		$	135,653		$	63,953		$	71,604		$	69,973		$	69,857		$	68,308
	Straight-line rent revenue adjustment	6,630			2,940			4,339			2,291			2,618			772			1,312
	Lease incentives	478			189			286			192			528			77			151
	Above- and below-market rent amortization	2,522			1,816			1,335			1,187			955			532			887
	Lease termination fees	670			696			125			545			542			919			576
	Total revenue	145,857			141,294			70,038			75,819			74,616			72,157			71,234
Expenses
	Property related expenses	46,056			48,634			20,877			25,179			24,358			22,464			23,283
	Real estate taxes	21,842			20,256			10,198			11,644			9,944			11,272			10,276
	Property management fees	4,437			4,251			2,105			2,332			2,198			2,229			2,128
	Total property operating expenses	72,335			73,141			33,180			39,155			36,500			35,965			35,687
	Interest expense	30,232			32,240			14,591			15,641			16,390			16,033			16,133
	Amortization of deferred financing costs	1,807			1,136			899			908			782			654			666
	Amortization of mark to market	(57		)	38			(30		)	(27		)	82			19			19
	Total interest expense	31,982			33,414			15,460			16,522			17,254			16,706			16,818
	General and administrative	10,793			8,646			5,412			5,381			4,695			4,147			4,300
	BHT Advisors termination fee and HPT Management buyout fee	10,200			—			10,200			—			—			—			—
	Listing costs	2,991			—			2,488			503			104			—			—
	Amortization of restricted shares and units	1,099			665			564			535			363			369			311
	Straight-line rent expense adjustment	(14		)	(10		)	(7		)	(7		)	(6		)	(5		)	(5		)
	Acquisition expense	815			—			813			2			86			4			—
	Asset impairment losses	132			8,225			—			132			4,940			—			—
	Real estate depreciation and amortization	61,103			58,103			31,081			30,022			31,682			29,885			29,182
	Total expenses	191,436			182,184			99,191			92,245			95,618			87,071			86,293
	Interest and other income	286			344			141			145			81			88			96
	Loss on early extinguishment of debt	(21,448		)	—			(21,412		)	(36		)	(426		)	—			—
Loss from continuing operations before income taxes, equity
	in operations of investments, and gain on sale of assets	(66,741		)	(40,546		)	(50,424		)	(16,317		)	(21,347		)	(14,826		)	(14,963		)
	Benefit (provision) for income taxes	(1,262		)	(9		)	(1,338		)	76			73			(36		)	59
	Equity in operations of investments	312			883			69			243			522			431			795
Loss from continuing operations before gain on sale of assets		(67,691		)	(39,672		)	(51,693		)	(15,998		)	(20,752		)	(14,431		)	(14,109		)
Discontinued operations:
	Income (loss) from discontinued operations	1,369			(7,285		)	(121		)	1,490			(17,634		)	(5,975		)	(3,191		)
	Gain on sale of discontinued operations	14,683			—			6,077			8,606			86,195			4,026			—
Income (loss) from discontinued operations		16,052			(7,285		)	5,956			10,096			68,561			(1,949		)	(3,191		)
Gain on sale of assets		44,564			—			44,564			—			—			—			—
Net income (loss)		(7,075		)	(46,957		)	(1,173		)	(5,902		)	47,809			(16,380		)	(17,300		)
	Noncontrolling interests - continuing operations	60			57			33			27			41			34			20
	Noncontrolling interests - discontinued operations	(28		)	7			(11		)	(17		)	(118		)	(9		)	1
	Accretion of Series A Convertible Preferred Stock	—			—			—			—			(1,926		)	—			—
Net income (loss) attributable to common stockholders		$	(7,043	)	$	(46,893	)	$	(1,151	)	$	(5,892	)	$	45,806		$	(16,355	)	$	(17,279	)
Basic and diluted weighted average common shares outstanding (1)		49,892,390			49,874,423			49,893,330			49,891,436			49,877,350			49,877,350			49,877,350
Basic and diluted earnings (loss) per common share:
	Continuing operations (1)	$	(0.46	)	$	(0.79	)	$	(0.14	)	$	(0.32	)	$	(0.45	)	$	(0.29	)	$	(0.28	)
	Discontinued operations (1)	0.32			(0.15		)	0.12			0.20			1.37			(0.04		)	(0.07		)
Basic and diluted earnings (loss) per common share (1)		$	(0.14	)	$	(0.94	)	$	(0.02	)	$	(0.12	)	$	0.92		$	(0.33	)	$	(0.35	)
Net income (loss) attributable to common stockholders:
	Continuing operations	$	(23,067	)	$	(39,615	)	$	(7,096	)	$	(15,971	)	$	(22,637	)	$	(14,397	)	$	(14,089	)
	Discontinued operations	16,024			(7,278		)	5,945			10,079			68,443			(1,958		)	(3,190		)
Net income (loss) attributable to common stockholders		$	(7,043	)	$	(46,893	)	$	(1,151	)	$	(5,892	)	$	45,806		$	(16,355	)	$	(17,279	)
(1) All periods presented have been adjusted to reflect the one-for-six reverse stock split that occurred on June 2, 2015.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 5

Consolidated Statements of Discontinued Operations
(in thousands)
		Six Months Ended						Three Months Ended
		30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Revenue
	Rental income	$	4,111		$	26,936		$	(92	)	$	4,203		$	11,358		$	12,946		$	13,451
	Straight-line rent revenue adjustment	455			(11		)	(32		)	487			454			(406		)	55
	Lease incentives	—			(207		)	—			—			(102		)	(109		)	(102		)
	Above- and below-market rent amortization	—			447			—			—			188			195			222
	Lease termination fees	—			239			—			—			149			116			164
	Total revenue	4,566			27,404			(124		)	4,690			12,047			12,742			13,790
Expenses
	Property related expenses	1,723			8,359			22			1,701			3,909			4,295			3,833
	Real estate taxes	633			4,869			(83		)	716			2,334			2,171			2,293
	Property management fees	121			816			14			107			309			374			398
	Total property operating expenses	2,477			14,044			(47		)	2,524			6,552			6,840			6,524
	Interest expense	707			8,814			44			663			3,362			4,455			4,423
	Amortization of deferred financing costs	14			187			—			14			75			113			93
	Amortization of mark to market	(1		)	1			—			(1		)	—			1			1
	Total interest expense	720			9,002			44			676			3,437			4,569			4,517
	Real estate depreciation and amortization	—			11,639			—			—			5,499			6,360			5,938
Total expenses		3,197			34,685			(3		)	3,200			15,488			17,769			16,979
	Interest and other income (expense)	—			(4		)	—			—			(3		)	(2		)	(2		)
	Loss on early extinguishment of debt	—			—			—			—			(14,190		)	(946		)	—
Income (loss) before gain on sale
	of discontinued operations	1,369			(7,285		)	(121		)	1,490			(17,634		)	(5,975		)	(3,191		)
	Gain on sale of discontinued operations	14,683			—			6,077			8,606			86,195			4,026			—
Income (loss) from discontinued operations		$	16,052		$	(7,285	)	$	5,956		$	10,096		$	68,561		$	(1,949	)	$	(3,191	)

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 6

Calculation of FFO and FAD
(in thousands, except per share data)
		Six Months Ended						Three Months Ended
Funds from operations (FFO)		30-Jun-15			30-Jun-14			30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Net income (loss)		$	(7,075	)	$	(46,957	)	$	(1,173	)	$	(5,902	)	$	47,809		$	(16,380	)	$	(17,300	)
Net (income) loss attributable to noncontrolling interests		32			64			22			10			(77		)	25			21
Accretion of Series A Convertible Preferred Stock		—			—			—			—			(1,926		)	—			—
Adjustments (1):
	Real estate depreciation and amortization - consolidated	61,103			69,742			31,081			30,022			37,181			36,245			35,120
	Real estate depreciation and amortization - unconsolidated joint ventures	2,654			2,579			1,367			1,287			1,307			1,275			1,278
	Impairment of depreciable real estate assets	132			8,225			—			132			4,940			—			—
	Gain on sale of depreciable real estate	(59,247		)	—			(50,641		)	(8,606		)	(86,195		)	(4,026		)	—
	Taxes associated with sale of depreciable assets	1,264			—			1,264			—			—			—			—
	Noncontrolling interests (OP units & vested restricted stock units) share of above adjustments	(10		)	(117		)	29			(39		)	68			(68		)	(53		)
FFO attributable to common stockholders		$	(1,147	)	$	33,536		$	(18,051	)	$	16,904		$	3,107		$	17,071		$	19,066
FFO, excluding certain items
FFO attributable to common stockholders		$	(1,147	)	$	33,536		$	(18,051	)	$	16,904		$	3,107		$	17,071		$	19,066
Adjustments (1):
	Acquisition expenses	1,195			—			1,193			2			86			4			—
	Listing costs	2,991			—			2,488			503			104			—			—
	Loss on early extinguishment of debt	21,448			—			21,412			36			14,616			946			—
	BHT Advisors termination fee and HPT Management buyout fee	10,200			—			10,200			—			—			—			—
	Noncontrolling interests (OP units & vested restricted stock units) share of above adjustments	(62		)	—			(61		)	(1		)	(24		)	(1		)	—
FFO attributable to common stock holders, excluding certain items		$	34,625		$	33,536		$	17,181		$	17,444		$	17,889		$	18,020		$	19,066
Funds available for distribution (FAD)
FFO attributable to common stock holders		$	(1,147	)	$	33,536		$	(18,051	)	$	16,904		$	3,107		$	17,071		$	19,066
Adjustments (1):
	Recurring capital expenditures	(27,314		)	(33,827		)	(14,067		)	(13,247		)	(19,468		)	(16,056		)	(15,864		)
	Straight-line rent adjustments	(7,219		)	(3,411		)	(4,369		)	(2,850		)	(3,141		)	(411		)	(1,646		)
	Above- and below-market rent amortization	(2,722		)	(2,460		)	(1,433		)	(1,289		)	(1,244		)	(827		)	(1,210		)
	Amortization of deferred financing fees and mark to market	1,834			1,451			898			936			982			831			823
	Amortization of restricted shares and units	1,099			665			564			535			363			369			311
	Acquisition expenses	1,195			—			1,193			2			86			4			—
	Listing costs	2,991			—			2,488			503			104			—			—
	Loss on early extinguishment of debt	21,448			—			21,412			36			14,616			946			—
	BHT Advisors termination fee and HPT Management buyout fee	10,200			—			10,200			—			—			—			—
	Noncontrolling interests (OP units & vested restricted stock units) share of above adjustments	15			54			(11		)	26			13			31			25
	Accretion of Series A Convertible Preferred Stock	—			—			—			—			1,926			—			—
FAD attributable to common stockholders		$	380		$	(3,992	)	$	(1,176	)	$	1,556		$	(2,656	)	$	1,958		$	1,505
Weighted average common shares outstanding - basic (2)		49,892			49,874			49,893			49,891			49,877			49,877			49,877
Weighted average common shares outstanding - diluted (2)		50,076			50,001			50,085			50,066			49,996			49,996			49,937
Diluted FFO per common share (2) (3)		$	(0.02	)	$	0.67		$	(0.36	)	$	0.34		$	0.06		$	0.34		$	0.38
Diluted FFO, excluding certain items per common share (2) (3)		$	0.69		$	0.67		$	0.34		$	0.35		$	0.36		$	0.36		$	0.38
Diluted FAD per common share (2) (3)		$	0.01		$	(0.08	)	$	(0.02	)	$	0.03		$	(0.05	)	$	0.04		$	0.03

(1) Adjustments represent our pro rata share of consolidated and unconsolidated amounts, including discontinued operations.

(2) All periods presented have been adjusted to reflect the one-for-six reverse stock split that occurred on June 2, 2015.

(3) There are no dilutive securities for purposes of calculating diluted FFO per common share and diluted FAD per common share when FFO attributable to common stockholders or FAD attributable to common stockholders are negative.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 7

Calculation of EBITDA
(in thousands, except fixed charge coverage)
		Three Months Ended
		30-Jun-15			31-Mar-15			31-Dec-14			30-Sep-14			30-Jun-14
Net income (loss) attributable to common stockholders		$	(1,151	)	$	(5,892	)	$	45,806		$	(16,355	)	$	(17,279	)
Adjustments:
	Noncontrolling interests (OP units & vested restricted stock units)	(1		)	(10		)	77			(36		)	(25		)
	Accretion of Series A Convertible Preferred Stock	—			—			1,926			—			—
	Interest expense - consolidated (including discontinued operations)	14,635			16,304			19,752			20,488			20,933
	Interest expense - unconsolidated joint ventures	617			615			631			635			633
	Amortization of deferred financing costs - consolidated (including discontinued operations)	899			922			857			767			382
	Amortization of deferred financing costs - unconsolidated joint ventures	13			13			13			13			12
	Mark to market - consolidated (including discontinued operations)	(30		)	(28		)	82			20			20
	Mark to market - unconsolidated joint ventures	16			17			18			19			20
	Total interest expense	16,150			17,843			21,353			21,942			22,000
	Tax (benefit) provision - consolidated (including discontinued operations)	1,338			(76		)	(73		)	36			(59		)
	Tax (benefit) provision - unconsolidated joint ventures	1			2			3			(1		)	1
	Depreciation and amortization - consolidated (including discontinued operations)	31,081			30,022			37,181			36,245			35,120
	Depreciation and amortization - unconsolidated joint ventures	1,367			1,287			1,307			1,275			1,278
	Impairment losses	—			132			4,940			—			—
	Gain on sale of real estate	(50,641		)	(8,606		)	(86,195		)	(4,026		)	—
	Loss on early extinguishment of debt	21,412			36			14,616			946			—
EBITDA		19,556			34,738			40,941			40,026			41,036
Adjustments:
	Costs incurred in connection with listing activities	2,488			503			104			—			—
	Acquisition expenses	1,193			2			86			4			—
	Non-cash write-off of tenant receivables	2			1,829			163			64			54
	BHT Advisors termination fee and HPT Management buyout fee	10,200			—			—			—			—
Normalized EBITDA		33,439			37,072			41,294			40,094			41,090
Adjustments:
	EBITDA from properties disposed before period end	(2,933		)	(1,488		)	(2,974		)	(336		)	(16		)
	Full quarter adjustment for acquired properties	—			—			723			—			—
Normalized estimated full period EBITDA from properties owned at period end		$	30,506		$	35,584		$	39,043		$	39,758		$	41,074
Fixed charges
	Interest expense	$	16,150		$	17,843		$	21,353		$	21,942		$	22,000
	Capitalized interest incurred (1)	132			176			338			428			427
	Interest expense	16,282			18,019			21,691			22,370			22,427
	Principal payments (excludes debt payoff)	2,498			3,059			5,038			5,026			4,867
Fixed charges		$	18,780		$	21,078		$	26,729		$	27,396		$	27,294
Normalized Interest coverage		2.05			2.06			1.9			1.79			1.83
Normalized Fixed charge coverage		1.78			1.76			1.54			1.46			1.51

______________________

(1) Excludes capitalized interest funded from Two BriarLake Plaza construction loan.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 8

Joint Venture Financial Summary
As of and for the Quarter Ended June 30, 2015
(dollars in thousands)
		Unconsolidated Joint Ventures at															Consolidated Joint Ventures at
		TIER REIT Ownership Share															TIER REIT Ownership Share
		Paces West			Wanamaker Building			1325 G Street			Colorado Building						Legacy Land			208 Nueces Street
Ownership % during the period		10.00%			60.00%			10.00%			10.00%						95%			95%
Ownership % at period end		10.00%			60.00%			10.00%			10.00%			Total			95%			95%			Total
Results of Operations
Rental income		$	296		$	3,821		$	2		$	1		$	4,120		—			—			—
Straight-line rent revenue adjustment		21			34			—			—			55			—			—			—
Above- and below-market rent amortization		(3		)	101			—			—			98			—			—			—
Lease termination fees		—			—			36			—			36			—			—			—
Other income		1			41			—			—			42			—			—			—
	Total revenue	315			3,997			38			1			4,351			—			—			—
Property related expenses		100			1,351			1			1			1,453			—			13			13
Real estate taxes		25			377			—			—			402			1			5			6
Property management fees		9			114			—			—			123			—			5			5
	NOI	181			2,155			37			—			2,373			(1		)	(23		)	(24		)
											—
Interest expense		89			527			1			—			617			—			—			—
Amortization of deferred financing costs		3			21			—			—			24			—			—			—
Amortization of mark to market		—			16			—			—			16			—			—			—
Real estate depreciation and amortization		168			1,199			—			—			1,367			—			—			—
Interest income and other expense		—			7			—			—			7			—			—			—
Acquisition expenses		—			—			297			102			399			—			361			361
Provision for income taxes		—			1			—			—			1			—			—			—
	Net income (loss)	(79		)	384			(261		)	(102		)	(58		)	(1		)	(384		)	(385		)
								—			—
Intercompany eliminations
Eliminate amortization of deferred financing costs		—			11			—			—			11			—			—			—
Eliminate property management fees		1			114			—			—			115			—			—			—
	Adjusted net income (loss)	(78		)	509			(261		)	(102		)	68			(1		)	(384		)	(385		)
Adjustments:								—			—
	Real estate depreciation and amortization	168			1,199			—			—			1,367			—			—			—
Funds from operations		90			1,708			(261		)	(102		)	1,435			(1		)	(384		)	(385		)
Balance Sheet Information
Real estate book value		$	6,641		$	100,914		$	15,004		$	4,763		$	127,322		6,058			8,232			14,290
Accumulated depreciation		(670		)	(22,637		)	—			—			(23,307		)	—			—			—
Real estate book value after depreciation		$	5,971		$	78,277		$	15,004		$	4,763		$	104,015		$	6,058		$	8,232		$	14,290
Cash and cash equivalents		$	48		$	2,290		$	463		$	567		$	3,368		$	178		$	1,078		$	1,256
Assets		$	8,085		$	99,284		$	15,599		$	5,373		$	128,341		$	6,237		$	10,289		$	16,526
Debt (1)		$	6,500		$	51,763		$	9,500		$	3,400		$	71,163		$	—		$	—		$	—
Equity (2)		$	1,161		$	37,978		$	4,612		$	1,029		$	44,780		$	6,174		$	10,065		$	16,239
______________________________
(1)	All joint venture debt is non-recourse. Debt is shown net of mark to market adjustments.
(2)	Equity for 1325 G Street and Colorado Building have been reduced by $1.2 million and $0.6 million of deferred gain, respectively.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 9

Same Store Analysis
(in thousands, except property count)
	Three Months Ended											Six Months Ended
Same Store GAAP NOI:	30-Jun-15			30-Jun-14			Favorable/ (Unfavorable)					30-Jun-15			30-Jun-14			Favorable/ (Unfavorable)
Revenues:
Total revenue	$	60,706		$	59,102		$	1,604				$	120,968		$	117,189		$	3,779
Less: Lease termination fees	125			576			(451		)			670			696			(26		)
	60,581			58,526			2,055			3.5	%	120,298			116,493			3,805			3.3	%
Expenses:
Property operating expenses (less tenant improvement demolition costs)	18,063			18,731			668			3.6	%	37,503			37,608			105			0.3	%
Real estate taxes	9,164			8,634			(530		)	-6.1	%	18,382			17,351			(1,031		)	-5.9	%
Property management fees	1,891			1,788			(103		)	-5.8	%	3,825			3,578			(247		)	-6.9	%
Property expenses	29,118			29,153			35			0.1	%	59,710			58,537			(1,173		)	-2.0	%
Same Store GAAP NOI	$	31,463		$	29,373		$	2,090		7.1	%	$	60,588		$	57,956		$	2,632		4.5	%
Same Store Cash NOI:
Less:
Straight-line rent adjustments	2,673			875			1,798					2,969			2,067			902
Above- and below-market rent amortization	1,192			926			266					2,275			1,895			380
Same Store Cash NOI	$	27,598		$	27,572		$	26		0.1	%	$	55,344		$	53,994		$	1,350		2.5	%
Occupancy % at period end (% owned)	88.7		%	85.8		%						88.7		%	85.8		%
Consolidated operating properties	26											26
Rentable square feet (% owned)	9,278											9,278
Same Store GAAP NOI and Same Store Cash NOI reconciliation:
Net loss	$	(1,173	)	$	(17,300	)						$	(7,075	)	$	(46,957	)
Adjustments:
Interest expense	15,460			16,818								31,982			33,414
Asset impairment losses	—			—								132			8,225
Tenant improvement demolition costs	—			245								52			989
General and administrative	15,612			4,300								20,993			8,646
Listing costs	2,488			—								2,991			—
Amortization of restricted shares and units	564			311								1,099			665
Straight-line rent expense adjustment	(7		)	(5		)						(14		)	(10		)
Acquisition expense	813			—								815			—
Real estate depreciation and amortization	31,081			29,182								61,103			58,103
Interest and other income	(141		)	(96		)						(286		)	(344		)
Loss on early extinguishment of debt	21,412			—								21,448			—
Provision (benefit) for income taxes	1,338			(59		)						1,262			9
Equity in operations of investments	(69		)	(795		)						(312		)	(883		)
(Income) loss from discontinued operations	121			3,191								(1,369		)	7,285
Gain on sale of discontinued operations	(6,077		)	—								(14,683		)	—
Gain on sale of assets	(44,564		)	—								(44,564		)	—
Net operating income of non-same store properties	(5,270		)	(5,843		)						(12,316		)	(10,490		)
Lease termination fees	(125		)	(576		)						(670		)	(696		)
Same Store GAAP NOI	31,463			29,373								60,588			57,956
Straight-line rent revenue adjustment	(2,673		)	(875		)						(2,969		)	(2,067		)
Above- and below-market rent amortization	(1,192		)	(926		)						(2,275		)	(1,895		)
Same Store Cash NOI	$	27,598		$	27,572							$	55,344		$	53,994

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 10

Schedule of Properties Owned
as of June 30, 2015
(in thousands, except average effective rent $/RSF)
		Rentable SF  (100%)	Rentable SF  (own %)			Average Effective Rent		Average Effective Rent $/RSF				% Average Effective Rent (own %)
				Occupancy %						% of NRA (own %)
Property (% owned, if not 100%)	Location
Terrace Office Park	Austin, TX	619	619	93.2	%	$	20,886	$	36.18	5.9	%	9.0	%
Austin		619	619	93.2	%	20,886		$	36.18	5.9	%	9.0	%
5950 Sherry Lane	Dallas, TX	197	197	72.6	%	4,903		$	34.32	1.9	%	2.1	%
Burnett Plaza	Fort Worth, TX	1,025	1,025	85.4	%	17,460		$	19.95	9.8	%	7.6	%
Centreport Office Center	Fort Worth, TX	133	133	100.0	%	2,503		$	18.78	1.3	%	1.1	%
Dallas/Fort Worth		1,355	1,355	84.9	%	24,866		$	21.60	13.0	%	10.8	%
Loop Central	Houston, TX	575	575	94.3	%	9,392		$	17.32	5.5	%	4.1	%
One & Two Eldridge Place	Houston, TX	519	519	99.2	%	17,082		$	33.14	5.0	%	7.4	%
One BriarLake Plaza	Houston, TX	502	502	97.2	%	20,760		$	42.58	4.8	%	9.0	%
Three Eldridge Place	Houston, TX	305	305	80.3	%	9,985		$	40.72	2.9	%	4.3	%
Houston		1,901	1,901	94.2	%	57,219		$	31.96	18.2	%	24.8	%
Paces West (10%)	Atlanta, GA	646	65	83.1	%	1,142		$	21.21	0.6	%	0.5	%
Atlanta		646	65	83.1	%	1,142		$	21.21	0.6	%	0.5	%
Bank of America Plaza	Charlotte, NC	891	891	89.2	%	18,002		$	22.66	8.6	%	7.8	%
Charlotte		891	891	89.2	%	18,002		$	22.66	8.6	%	7.8	%
Buena Vista Plaza	Burbank, CA	115	115	100.0	%	211		$	1.83	1.1	%	0.1	%
Los Angeles		115	115	100.0	%	211		$	1.83	1.1	%	0.1	%
Forum Office Park	Louisville, KY	328	328	98.2	%	5,813		$	18.06	3.1	%	2.5	%
Hurstbourne Place	Louisville, KY	235	235	81.7	%	3,626		$	18.90	2.3	%	1.6	%
One Oxmoor Place	Louisville, KY	135	135	97.0	%	2,904		$	22.09	1.3	%	1.3	%
Hurstbourne Park	Louisville, KY	104	104	99.0	%	2,181		$	21.21	1.00	%	0.9	%
Steeplechase Place	Louisville, KY	77	77	90.9	%	1,173		$	16.77	0.7	%	0.5	%
Lakeview	Louisville, KY	76	76	93.4	%	1,399		$	19.71	0.7	%	0.6	%
Hunnington	Louisville, KY	62	62	85.5	%	604		$	11.40	0.6	%	0.3	%
Louisville		1,017	1,017	92.6	%	17,700		$	18.79	9.8	%	7.7	%
Plaza at MetroCenter	Nashville, TN	361	361	92.8	%	5,567		$	16.62	3.5	%	2.4	%
Nashville		361	361	92.8	%	5,567		$	16.62	3.5	%	2.4	%
5104 Eisenhower Blvd.	Tampa, FL	130	130	100.0	%	2,776		$	21.34	1.2	%	1.2	%
Tampa		130	130	100.0	%	2,776		$	21.34	1.2	%	1.2	%
801 Thompson	Rockville, MD	51	51	100.0	%	1,656		$	32.52	0.5	%	0.7	%
1325 G Street (10%)	Washington, D.C.	307	31	83.9	%	1,022		$	39.30	0.3	%	0.4	%
Colorado Building (10%)	Washington, D.C.	128	13	92.3	%	437		$	38.03	0.1	%	0.2	%
Washington, D.C.		486	95	93.7	%	3,115		$	35.24	0.9	%	1.3	%
Operating office properties in strategic markets		7,521	6,549	91.3	%	151,484		$	25.76	62.9	%	65.5	%
500 East Pratt	Baltimore, MD	280	280	98.2	%	9,165		$	33.32	2.7	%	4.0	%
Woodcrest Corporate Center	Cherry Hill, NJ	333	333	90.4	%	6,933		$	23.07	3.2	%	3.0	%
111 Woodcrest	Cherry Hill, NJ	53	53	84.9	%	937		$	20.82	0.5	%	0.4	%
FOUR40	Chicago, IL	1,041	1,041	69.2	%	21,088		$	29.27	10.0	%	9.1	%
Fifth Third Center	Columbus, OH	331	331	69.2	%	6,962		$	30.37	3.2	%	3.0	%
Wanamaker Building (60%)	Philadelphia, PA	1,390	834	96.4	%	13,657		$	16.98	8.0	%	5.9	%
Three Parkway	Philadelphia, PA	561	561	93.8	%	10,892		$	20.71	5.4	%	4.7	%
Lawson Commons	St. Paul, MN	436	436	89.2	%	10,001		$	25.70	4.2	%	4.3	%
Other operating office properties		4,425	3,869	85.0	%	79,635		$	24.21	37.1	%	34.5	%
Total operating office properties		11,946	10,418	89.0	%	$	231,119	$	24.94	100.0	%	100.0	%
Non-operating retail property
Hurstbourne Plaza (1)	Louisville, KY	79	79	52.0	%
Office development property (2)
Two BriarLake Plaza	Houston, TX	334	334	60.0	%
Total Properties		12,359	10,831
(1) Hurstbourne Plaza is a retail property planned for redevelopment within the Hurstbourne Business Park.
(2) Development properties are classified as operating upon the sooner to occur of 90% commenced leasing or one year after major construction is completed.
Average effective rent represents 12 times the sum of the monthly contractual amounts for base rent and the pro rata budgeted operating expense reimbursements, as of period end, related to leases in place as of period end, as reduced for free rent and excluding any scheduled future rent increases, as adjusted for our ownership interest.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 11

Net Operating Income by Market

Represents TIER REIT’s % ownership of NOI during the current quarter from operating properties owned at period end by market as a % of TIER REIT’s % ownership of total NOI during the current quarter from operating properties owned at period end.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 12

Components of Net Asset Value
(in thousands)
				Annualized Three Months Ended
				30-Jun-15
Revenue (1)				$	279,656
		Less:
		GAAP rent adjustments		(23,712		)
		Lease termination fees		(500		)
				255,444
Property operating expenses (1)				(132,532		)
		Add:
		Costs attributable to tenant improvement demolition		319
		Property management fees (2)		6,926
Adjusted cash NOI				130,157
		Less:
		Adjusted cash NOI from properties sold during the period		(13,329		)
		Adjusted cash NOI from non-stabilized properties (3)		(23,743		)
		Add: Adjusted cash NOI from unconsolidated real estate at ownership share		8,763
Total adjusted cash NOI at ownership share (4)				$	101,848
				30-Jun-15
Non-stabilized real estate properties and land development sites acquired (3)
		Value of non-stabilized properties as determined by third-party on 10/30/14		567,400
		Purchase price of 5950 Sherry Lane and land development sites acquired		76,676
Total other real estate properties				$	644,076
Other tangible assets
		Cash and cash equivalents		$	153,158
		Restricted cash		29,620
		Accounts receivable (excluding $65.1 million of straight-line rent receivable and deferred lease incentives)		6,723
		Prepaid expenses		31,890
		Ownership share of other tangible assets in unconsolidated joint ventures		9,603
Total other tangible assets				$	230,994
Liabilities
		Notes payable		$	505,196
		Credit facility		525,000
		Other liabilities		101,789
		Ownership share of other liabilities in unconsolidated joint ventures		3,371
		Ownership share of unconsolidated debt		71,163
Total liabilities				$	1,206,519
Total common shares, OP units, and vested restricted stock units outstanding (5)				49,948
(1	)	Includes consolidated operations
(2	)	Represents adjustment made for third-party property management services which was internalized 7/1/2015.
(3	)	Non-stabilized properties include:	Economic % SF Leased
			30-Jun-15
		1325 G Street	68%
		Colorado Building	46%
		Hurstbourne Plaza	43%
		5104 Eisenhower Blvd (a)	83%
		5950 Sherry Lane	71%
		Two Briarlake Plaza	42%
		FOUR40	59%
		Burnett Plaza	76%
		Buena Vista Plaza	3%
		_______________________
		(a) Free rent period on 17% of space at 5104 Eisenhower Blvd. expires in August 2015
(4	)	Includes adjusted cash NOI of Plaza at MetroCenter, which is currently stabilized but will become economically non-stabilized in 2015 due to large lease renewals with associated rent abatements.
(5	)	Reflects the one-for-six reverse stock split that occurred on June 2, 2015

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 13

Selected Non-Stabilized Properties
	Property Name Market Sub-Market	Property Type	Rentable Square feet	Occupancy %	Estimated Cash NOI at Stabilization (in thousands)	Estimated Stabilization date	Description
	5950 Sherry Lane	Office	197,000	73%	$4,106	2016	Acquired in December 2014, following the move out of an approximate 40,000 square foot tenant. Budgeted $1.6 million in capital improvements and repair and maintenance projects.
	Dallas
	Preston Center
	Two BriarLake Plaza	Office Development	334,000	60%	$8,246	2016	Property operates as a multi-campus facility with our One BriarLake Plaza property. Major construction was completed in the third quarter of 2014.
	Houston
	Westchase
	FOUR40	Office	1,041,000	69%	$16,271	2017	Completed $5.8 million lobby renovation in the third quarter of 2014. Construction of a $10.6 million tenant amenity floor including wi-fi lounge, conference center, and café was completed in June 2015.
	Chicago
	Central Loop
	Burnett Plaza	Office	1,025,000	85%	$13,506	2017	Two tenants moved out due to relocation to an owned facility (approximately 80,000 square feet in Q3 2013) and downsizing (approximately 80,000 square feet in Q2 2014). The property received BOMA’s 2014 International Building of the Year (TOBY) for properties in excess of one million square feet. Budgeted $2.2 million in strategic capital improvements.
	Dallas/Fort Worth
	Fort Worth CBD
	Plaza at MetroCenter	Office	361,000	93%	$3,032	2017	15 year renewal of 100,000 square feet (43,000 square feet downsizing to occur) by the major tenant was completed in second quarter 2015. Upon completion of tenant renovations in late 2016, tenant will receive six months of free rent.
	Nashville
	MetroCenter
	Buena Vista Plaza	Office	115,000	100%	$3,056	2016	Completed ten year renewal of 113,000 square feet by the major tenant in the second quarter of 2015 with free rent for eleven months, beginning in April 2015, before returning to stabilized economic occupancy.
	Burbank
	Burbank media district

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 14

Significant Tenants
June 30, 2015
(In thousands)
Properties in Strategic Markets
	Annualized Gross Rental Revenues		Percentage of Annualized Gross Rental Revenues			Percentage of Square Feet Leased		Weighted Average Remaining Term (Years)
					Square Feet Leased				Moody’s / S&P Credit Rating
Tenant
Oil & Gas	$	12,979	8	%	329	6	%	3.1	A2 / A
Financial Services	10,229		6	%	455	8	%	3.6	Baa1 / A-
Oil & Gas	8,347		5	%	210	4	%	9.3	Baa1 / BBB+
GSA	7,645		5	%	295	5	%	3.0	U.S. Government
McDermott, Inc.	6,051		4	%	190	3	%	5.6	Ba3 / B+
Oil & Gas	5,334		3	%	218	4	%	4.8	NR
Disney Enterprises Inc	3,899		2	%	113	2	%	10.7	A2 / A
Law Firm	3,636		2	%	93	2	%	6.5	NR
Financial Services	3,432		2	%	204	3	%	9.9	NR
E. R. Squibb and Sons, LLC	3,350		2	%	130	2	%	9.0	A2 / A+
Insurance	3,273		2	%	140	2	%	13.1	NR / A+
Law Firm	3,194		2	%	111	2	%	7.3	NR
Oil & Gas	2,872		2	%	117	2	%	7.1	NR
Oil & Gas	2,760		2	%	63	1	%	1.9	NR
Healthcare	2,759		2	%	148	2	%	9.8	Baa3 / BBB+
Total of largest 15 tenants at properties in strategic markets	$	79,760	49	%	2,816	47	%	6.3
Total all tenants at properties in strategic markets	$	163,087			5,978			5.1
Total Portfolio
	Annualized Gross Rental Revenues		Percentage of Annualized Gross Rental Revenues			Percentage of Square Feet Leased		Weighted Average Remaining Term (Years)
					Square Feet Leased				Moody’s / S&P Credit Rating
Tenant
Oil & Gas	$	12,979	5	%	329	4	%	3.1	A2 / A
GSA	12,490		5	%	510	6	%	4.1	U.S. Government
Financial Services	10,229		4	%	455	5	%	3.6	Baa1 / A-
Oil & Gas	8,347		3	%	210	2	%	9.3	Baa1 / BBB+
Software	6,347		3	%	240	3	%	4.5	B3 / B
McDermott, Inc.	6,051		2	%	190	2	%	5.6	Ba3 / B+
Oil & Gas	5,334		2	%	218	2	%	4.8	NR
Education	4,519		2	%	184	2	%	7.6	NR
Financial Services	4,167		2	%	118	1	%	3.4	Aa3 / A-
Disney Enterprises Inc	3,899		2	%	113	1	%	10.7	A2 / A
Law Firm	3,636		1	%	93	1	%	6.5	NR
Technology	3,626		1	%	151	2	%	5.2	Baa2 / BBB
Financial Services	3,432		1	%	204	2	%	9.9	NR
Financial Services	3,376		1	%	87	1	%	6.7	NR
E. R. Squibb and Sons, LLC	3,350		1	%	130	1	%	9.0	A2 / A+
Total of largest 15 tenants	$	91,782	37	%	3,232	35	%	5.6
Total all tenants	$	247,400			9,267			5.4

Notes:

The above tables set forth the company’s 15 largest tenants including subsidiaries for the operating properties as of the date noted above, based upon annualized gross rents plus estimated operating cost recoveries in place at the end of the above noted period.

As annualized rental revenue is not derived from the historical GAAP results, historical results may differ from those set forth above.

Amounts reflect TIER REIT’s ownership %.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 15

Industry Diversification (by square foot)

As of June 30, 2015

Notes:

The Company’s tenants are classified according to the U.S. Government’s North American Industrial Classification System (NAICS).

Amounts reflect TIER REIT’s ownership %.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 16

Leasing Activity Summary
For the Three Months Ended
June 30, 2015
		Occupancy							��		Occupancy			Cash						Straight-lined
	Rentable SF (000’s)	%		SF	Activity for the Quarter (SF 000’s)						SF	%		Net Rent /SF				% Increase of Cash Net Rent		Net Rent /SF				% Increase of SL Net Rent
Market		3/31/2015		3/31/2015	Expirations		Renewals	Expansions		New	6/30/2015	6/30/2015		Expiring		Activity				Expiring		Activity
Austin	619	92.9	%	575	(13	)	11	4		—	577	93.2	%	$	21.95	$	24.09	10	%	$	19.63	$	24.59	25	%
Dallas/Fort Worth	1,355	83.3	%	1,129	(174	)	148	48		—	1,151	84.9	%	$	15.17	$	12.40	-18	%	$	14.61	$	12.94	-11	%
Houston	1,901	97.2	%	1,847	(88	)	27	—		4	1,790	94.2	%	$	23.86	$	23.90	—	%	$	21.88	$	26.77	22	%
Atlanta	65	83.1	%	54	(2	)	2	—		—	54	83.1	%	$	15.85	$	17.01	7	%	$	15.37	$	17.01	11	%
Charlotte	891	88.6	%	789	(36	)	8	2		32	795	89.2	%	$	15.36	$	19.27	25	%	$	15.25	$	21.69	42	%
Los Angeles	115	100.0	%	115	(113	)	113	—		—	115	100.0	%	$	27.95	$	23.16	-17	%	$	28.64	$	25.89	-10	%
Louisville	1,017	90.6	%	921	(55	)	36	3		37	942	92.6	%	$	11.27	$	10.82	-4	%	$	10.02	$	11.15	11	%
Nashville	361	91.4	%	330	—		—	2		3	335	92.8	%	$	10.13	$	8.36	-17	%	$	9.54	$	7.81	-18	%
Tampa	130	100.0	%	130	—		—	—		—	130	100.0	%	$	—	$	—	—		$	—	$	—	—
Washington, D.C.	95	90.5	%	86	—		—	—		3	89	93.7	%	$	38.68	$	29.09	-25	%	$	34.18	$	29.71	-13	%
Operating office properties in strategic markets	6,549	91.3	%	5,976	(481	)	345	59		79	5,978	91.3	%	$	18.43	$	16.45	-11	%	$	17.92	$	17.77	-1	%
Other operating office properties	3,869	85.2	%	3,296	(381	)	277	32		65	3,289	85.0	%	$	17.96	$	15.34	-15	%	$	16.95	$	15.78	-7	%
Total	10,418	89.0	%	9,272	(862	)	622	91		144	9,267	89.0	%	$	18.22	$	15.97	-12	%	$	17.50	$	16.90	-3	%
	End of Period													Cash						Straight-lined
														Net Rent /SF				% Increase of Cash Net Rent		Net Rent /SF				% Increase of SL Net Rent
Year-To-Date Summary	NRA (000's)	% Leased		Leased SF (000's)	Expirations		Renewals	Expansions		New	Leased SF (000's)	% Leased		Expiring		Activity				Expiring		Activity
Operating office properties in strategic markets
Q1 Activity	6,940	89.2	%	6,189	(109	)	55	44		106	6,285	90.6	%	$	22.00	$	21.14	-4	%	$	20.91	$	21.95	5	%
Q2 Activity	6,549	91.3	%	5,976	(481	)	345	59		79	5,978	91.3	%	$	18.43	$	16.45	-11	%	$	17.92	$	17.77	-1	%
					(590	)	400	103		185				$	19.49	$	17.85	-8	%	$	18.81	$	19.01	1	%
Total Portfolio
Q1 Activity	12,487	88.1	%	10,996	(278	)	137	68		111	11,034	88.4	%	$	20.86	$	19.19	-8	%	$	19.72	$	19.74	—
Q2 Activity	10,418	89.0	%	9,272	(862	)	622	91		144	9,267	89.0	%	$	18.22	$	15.97	-12	%	$	17.50	$	16.90	-3	%
					(1,140	)	759	159		255				$	18.93	$	16.83	-11	%	$	18.10	$	17.66	-2	%

Notes:

Analysis relates to operating properties owned at the end of the period and reflects TIER REIT’s ownership %.

Occupancy includes all leases for tenants under legal lease contracts that have commenced during the period.

Rates for expiring leases relate to the lease previously occupying the specific space for which positive absorption was shown or the current lease rate if it is a first generation lease.

Net Rent is equal to the fixed base rental amount paid under the terms of the lease less any portion used to offset real estate taxes, utility charges, and other operating expenses incurred in connection with the leased space.

Cash Net Rent disregards any free rent periods. Therefore, the rate shown is first full monthly cash rent paid.

The impact of short term temporary leasing activity is excluded from the analysis of % increase of cash net rent and % increase of SL net rent.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 17

Leasing Rate Activity Summary
For the Three Months Ended
June 30, 2015
	Renewals											Expansions											New
		Cash					Straight-lined						Cash					Straight-lined						Cash					Straight-lined
		Net Rent /SF					Net Rent /SF						Net Rent /SF					Net Rent /SF						Net Rent /SF					Net Rent /SF
Markets	SF	Expiring		Activity			Expiring		Activity			SF	Expiring		Activity			Expiring		Activity			SF	Expiring		Activity			Expiring		Activity
Austin	11	$	21.29	$	23.30		$	18.00	$	23.22		4	$	23.55	$	26.00		$	23.55	$	27.89		—	$	—	$	—		$	—	$	—
Dallas/Fort Worth	148	$	15.84	$	12.31		$	15.49	$	13.32		48	$	13.10	$	12.68		$	11.91	$	11.76		—	$	—	$	—		$	—	$	—
Houston	27	$	25.65	$	25.68		$	23.39	$	28.63		—	$	—	$	—		$	—	$	—		4	$	12.08	$	12.05		$	12.08	$	14.55
Atlanta	2	$	15.85	$	17.01		$	15.37	$	17.01		—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—
Charlotte	8	$	21.73	$	20.70		$	21.73	$	21.24		2	$	19.12	$	19.37		$	18.24	$	19.37		32	$	13.56	$	18.92		$	13.48	$	21.95
Los Angeles	113	$	27.95	$	23.16		$	28.64	$	25.89		—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—
Louisville	36	$	12.02	$	11.88		$	9.70	$	12.50		3	$	9.64	$	10.64		$	9.64	$	10.94		37	$	10.65	$	9.77		$	10.38	$	9.84
Nashville	—	$	—	$	—		$	—	$	—		2	$	11.08	$	8.21		$	11.08	$	8.32		3	$	9.48	$	8.46		$	8.48	$	7.46
Tampa	—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—
Washington, D.C.	—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—		3	$	38.68	$	29.09		$	34.18	$	29.71
Operating office properties in strategic markets	345	$	20.49	$	17.44		$	20.03	$	19.07		59	$	13.77	$	13.55		$	12.77	$	12.95		79	$	12.92	$	14.28		$	12.55	$	15.65
Percentage increase (decrease)				(15		)%			(5		)%				(2		)%			1		%				11		%			25		%
Other operating office properties	277	$	17.94	$	15.55		$	17.09	$	16.24		32	$	16.75	$	13.19		$	16.19	$	12.43		65	$	18.60	$	15.47		$	16.68	$	15.43
Total	622	$	19.35	$	16.6		$	18.72	$	17.81		91	$	14.81	$	13.43		$	13.97	$	12.77		144	$	15.48	$	14.82		$	14.42	$	15.55
Percentage increase (decrease)				(14		)%			(5		)%				(9		)%			(9		)%				(4		)%			8		%
Year-To-Date Summary:
Operating office properties in strategic markets
Q1 2015	55	$	18.06	$	18.88		$	16.61	$	19.80		44	$	18.96	$	23.46		$	18.53	$	24.51		106	$	25.28	$	21.37		$	24.10	$	22.01
Q2 2015	345	$	20.49	$	17.44		$	20.03	$	19.07		59	$	13.77	$	13.55		$	12.77	$	12.95		79	$	12.92	$	14.28		$	12.55	$	15.65
	400	$	20.15	$	17.63		$	19.56	$	19.17		103	$	15.99	$	17.79		$	15.23	$	17.89		185	$	20.00	$	18.34		$	19.17	$	19.29
Percentage increase (decrease)				(12		)%			(2		)%				11		%			17		%				(8		)%			1		%
Total Portfolio
Q1 2015	137	$	19.41	$	17.36		$	17.91	$	17.58		68	$	16.99	$	19.82		$	16.70	$	20.99		111	$	25.00	$	21.07		$	23.77	$	21.66
Q2 2015	622	$	19.35	$	16.60		$	18.72	$	17.81		91	$	14.81	$	13.43		$	13.97	$	12.77		144	$	15.48	$	14.82		$	14.42	$	15.55
	759	$	19.36	$	16.73		$	18.58	$	17.77		159	$	15.75	$	16.16		$	15.14	$	16.28		255	$	19.63	$	17.54		$	18.49	$	18.21
Percentage increase (decrease)				(14		)%			(4		)%				3		%			8%						(11		)%			(2		)%
Analysis relates to operating properties owned at the end of the period and reflects TIER REIT’s ownership %.
SF includes all leases for tenants under legal lease contracts that have commenced during the period.
Rates for expiring leases relate to the lease previously occupying the specific space for which positive absorption was shown or the current lease rate if it is a first generation lease.
Net Rent is equal to the fixed base rental amount paid under the terms of the lease less any portion used to offset real estate taxes, utility charges, and other operating expenses incurred in connection with the leased space.
Cash Net Rent disregards any free rent periods. Therefore, the rate shown is first full monthly cash rent paid.
The impact of short term temporary leasing activity is excluded from the analysis of % increase of cash net rent and % increase of SL net rent.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 18

Lease Expirations
For Four Quarters From July 1, 2015
(In thousands)
	Market	Q3 2015		Q4 2015		Q1 2016		Q2 2016		Grand Total
	By Square Foot
	Austin	5		6		29		7		47
	Dallas/Fort Worth	29		3		3		41		76
	Houston	37		35		6		4		82
	Atlanta	1		2		1		1		5
	Charlotte	3		3		9		—		15
	Los Angeles	—		—		1		—		1
	Louisville	6		11		106		9		132
	Nashville	160		—		18		2		180
	Tampa	—		—		—		—		—
	Washington, D.C.	—		—		6		2		8
	Operating office properties in strategic markets	241		60		179		66		546
	Other operating office properties	70		34		17		46		167
	Total	311		94		196		112		713
	By Annualized Expiring Rentals
	Austin	$	155	$	202	$	1,026	$	262	$	1,645
	Dallas/Fort Worth	781		80		109		1,141		2,111
	Houston	1,293		984		108		142		2,527
	Atlanta	11		46		13		18		88
	Charlotte	—		91		284		—		375
	Los Angeles	13		—		25		—		38
	Louisville	105		201		2,291		176		2,773
	Nashville	2,611		—		373		41		3,025
	Tampa	—		—		—		—		—
	Washington, D.C.	—		—		285		118		403
	Operating office properties in strategic markets	4,969		1,604		4,514		1,898		12,985
	Other operating office properties	1,470		209		475		1,390		3,544
	Total	$	6,439	$	1,813	$	4,989	$	3,288	$	16,529
	By Expiring Rent Per SF
	Austin	$	31.00	$	33.67	$	35.38	$	37.43	$	35.00
	Dallas/Fort Worth	$	26.93	$	26.67	$	36.33	$	27.83	$	27.78
	Houston	$	34.95	$	28.11	$	—	$	35.50	$	30.82
	Atlanta	$	—	$	—	$	13.00	$	18.00	$	17.60
	Charlotte	$	—	$	—	$	31.56	$	—	$	25.00
	Los Angeles	$	—	$	—	$	—	$	—	$	38.00
	Louisville	$	17.50	$	18.27	$	21.61	$	19.56	$	21.01
	Nashville	$	16.32	$	—	$	—	$	20.50	$	16.81
	Tampa	$	—	$	—	$	—	$	—	$	—
	Washington, D.C.	$	—	$	—	$	—	$	59.00	$	50.38
	Operating office properties in strategic markets	$	20.62	$	26.73	$	25.22	$	28.76	$	23.78
	Other operating office properties	$	21.00	$	6.15	$	27.94	$	30.22	$	21.22
	Total	$	20.70	$	19.29	$	25.45	$	29.36	$	23.18
Notes:
Leases with an expiration on the last day of the period are considered leased at the last day of the period (i.e., expiring on the fist day of the following period).
Reflects TIER REIT’s ownership %.
Rentals shown above are the contractually obligated annualized base rent charged in the final month prior to lease termination grossed up to include current operating cost recoveries.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 19

Lease Expirations
Annually From July 1, 2015
(In thousands)
	Market	2015			2016			2017			2018			2019			2020			2021			2022			2023			2024			2025+			Grand Total
	By Square Foot
	Austin	11			80			46			61			101			103			42			96			36			—			—			576
	Dallas/Fort Worth	32			64			186			197			100			38			42			117			144			—			231			1,151
	Houston	72			51			358			57			341			304			215			13			25			272			85			1,793
	Atlanta	2			2			1			2			7			5			3			4			—			3			25			54
	Charlotte	6			13			8			12			439			10			7			—			81			32			189			797
	Los Angeles	—			1			—			—			4			—			—			—			—			—			110			115
	Louisville	17			157			257			28			150			72			3			15			35			14			194			942
	Nashville	160			36			7			3			—			2			21			14			—			4			87			334
	Tampa	—			—			—			—			—			—			—			—			—			130			—			130
	Washington, D.C.	—			60			3			2			1			3			1			2			2			—			12			86
	Operating office properties in strategic markets	300			464			866			362			1,143			537			334			261			323			455			933			5,978
	As a % of Occupied SF	5		%	8		%	14		%	6		%	19		%	9		%	6		%	4		%	5		%	8		%	16		%	100		%
	As a % of Total NRA	5		%	7		%	13		%	6		%	17		%	8		%	5		%	4		%	5		%	7		%	14		%	91		%
	Other operating office properties	105			116			316			355			184			512			333			464			298			39			567			3,289
	Total	405			580			1,182			717			1,327			1,049			667			725			621			494			1,500			9,267
	As a % of Occupied SF	4		%	6		%	13		%	8		%	14		%	11		%	7		%	8		%	8		%	5		%	16		%	100		%
	As a % of Total NRA	4		%	6		%	11		%	7		%	13		%	10		%	6		%	7		%	6		%	5		%	14		%	89		%
	By Annualized Expiring Rentals
	Austin	$	357		$	2,899		$	1,663		$	2,132		$	3,955		$	4,077		$	1,801		$	3,794		$	1,511		$	—		$	—		$	22,189
	Dallas/Fort Worth	861			1,950			4,345			4,929			2,451			1,344			1,356			2,975			4,044			—			6,115			30,370
	Houston	2,277			1,258			11,760			2,387			13,959			9,716			7,256			643			1,203			12,079			2,280			64,818
	Atlanta	57			51			16			39			177			126			49			115			—			91			669			1,390
	Charlotte	91			398			277			465			10,155			317			250			—			2,903			360			6,064			21,280
	Los Angeles	13			25			—			—			197			—			—			—			—			—			5,223			5,458
	Louisville	307			3,231			4,858			524			3,116			1,345			69			289			840			307			4,035			18,921
	Nashville	2,611			701			142			54			—			38			483			283			—			114			2,002			6,428
	Tampa	—			—			—			—			—			—			—			—			—			4,371			—			4,371
	Washington, D.C.	—			2,087			175			123			78			211			54			291			120			30			768			3,937
	Operating office properties in strategic markets	6,574			12,600			23,236			10,653			34,088			17,174			11,318			8,390			10,621			17,352			27,156			179,162
	As a % of Total Annualized Expiring Rentals	4		%	7		%	13		%	6		%	19		%	10		%	6		%	5		%	6		%	10		%	15		%	100		%
	Other operating office properties	1,678			3,311			10,549			12,050			5,106			13,137			8,692			14,872			9,858			770			10,753			90,776
	Total	$	8,252		$	15,911		$	33,785		$	22,703		$	39,194		$	30,311		$	20,010		$	23,262		$	20,479		$	18,122		$	37,909		$	269,938
	As a % of Total Annualized Expiring Rentals	3		%	6		%	13		%	8		%	15		%	11		%	7		%	9		%	8		%	7		%	14		%	100		%
	By Expiring Rent Per SF
	Austin	$	32.45		$	36.24		$	36.15		$	34.95		$	39.16		$	39.58		$	42.88		$	39.52		$	41.97		$	—		$	—		$	38.52
	Dallas/Fort Worth	$	26.91		$	30.47		$	23.36		$	25.02		$	24.51		$	35.37		$	32.29		$	25.43		$	28.08		$	—		$	26.47		$	26.39
	Houston	$	31.63		$	24.67		$	32.85		$	41.88		$	40.94		$	31.96		$	33.75		$	49.46		$	48.12		$	44.41		$	26.95		$	36.16
	Atlanta	$	28.50		$	25.50		$	16.00		$	19.50		$	25.29		$	25.20		$	16.33		$	28.75		$	—		$	30.33		$	26.76		$	25.74
	Charlotte	$	15.17		$	30.62		$	34.63		$	38.75		$	23.13		$	31.70		$	35.71		$	—		$	35.84		$	11.25		$	32.08		$	26.70
	Los Angeles	$	—		$	25.00		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	47.46
	Louisville	$	18.06		$	20.58		$	18.90		$	18.71		$	20.77		$	18.68		$	23.00		$	19.27		$	24.00		$	21.93		$	20.80		$	20.09
	Nashville	$	16.32		$	19.47		$	20.29		$	—		$	—		$	—		$	23.00		$	—		$	—		$	28.50		$	23.01		$	19.25
	Tampa	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	33.62		$	—		$	—
	Washington, D.C.	$	—		$	34.78		$	58.33		$	61.50		$	78.00		$	70.33		$	54.00		$	119.26		$	60.00		$	—		$	64.00		$	45.55
	Operating office properties in strategic markets	$	21.91		$	27.16		$	26.83		$	29.43		$	29.82		$	31.98		$	33.89		$	32.09		$	32.88		$	38.14		$	29.12		$	29.97
	Other operating office properties	$	15.98		$	28.54		$	33.38		$	33.94		$	27.75		$	25.66		$	26.10		$	32.05		$	33.08		$	19.74		$	18.96		$	27.60
	Total	$	20.38		$	27.43		$	28.58		$	31.66		$	29.54		$	28.90		$	30.00		$	32.07		$	32.98		$	36.68		$	25.28		$	29.13
	Notes:
	Leases with an expiration on the last day of the period are considered leased at the last day of the period (i.e., expiring on the first day of the following period).
	Reflects TIER REIT’s ownership %.
	Rentals shown above are the contractually obligated annualized base rent charged in the final month prior to lease termination grossed up to include current operating cost recoveries.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 20

Occupancy Trends
	Rentable SF (in thousands)
		Occupancy %
Market	30-Jun-15	30-Jun-15		31-Mar-15		31-Dec-14		30-Sep-14		30-Jun-14
Austin	619	93	%	93	%	92	%	92	%	89	%
Dallas/Fort Worth	1,355	85	%	83	%	82	%	81	%	81	%
Houston	1,901	94	%	97	%	96	%	98	%	94	%
Atlanta	65	83	%	83	%	80	%	77	%	78	%
Charlotte	891	89	%	89	%	88	%	88	%	88	%
Los Angeles	115	100	%	100	%	100	%	100	%	100	%
Louisville	1,017	93	%	91	%	89	%	89	%	86	%
Nashville	361	93	%	91	%	88	%	83	%	83	%
Tampa	130	100	%	100	%	100	%	57	%	57	%
Washington, D.C.	95	94	%	90	%	88	%	87	%	86	%
Operating office properties in strategic markets	6,549	91	%	91	%	90	%	89	%	87	%
Other operating office properties	3,869	85	%	85	%	86	%	85	%	86	%
Total	10,418	89	%	89	%	89	%	88	%	87	%
Notes:
Analysis relates to operating properties owned at the end of the most recent period and reflects TIER REIT’s ownership %.
Occupancy % is as of the last day of the indicated period.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 21

Leasing Cost Summary
For the Three Months Ended
June 30, 2015
			Weighted Average Leasing Costs
	SF (000’s)	Wtd Avg Term (Yrs)	Per Square Foot						Per Square Foot / Year
Renewal			Comms		TI & Other		Total		Comms		TI & Other		Total
Market
Austin	11	2.2	$	4.87	$	4.12	$	8.99	$	2.21	$	1.87	$	4.08
Dallas/Fort Worth	148	11.0	$	12.45	$	32.47	$	44.92	$	1.14	$	2.96	$	4.10
Houston	27	2.6	$	6.74	$	4.63	$	11.37	$	2.58	$	1.78	$	4.36
Atlanta	2	0.5	$	0.69	$	—	$	0.69	$	1.38	$	—	$	1.38
Charlotte	8	3.4	$	5.78	$	12.50	$	18.28	$	1.70	$	3.68	$	5.38
Los Angeles	113	10.9	$	5.95	$	40.55	$	46.50	$	0.55	$	3.71	$	4.26
Louisville	36	5.8	$	4.64	$	1.03	$	5.67	$	0.81	$	0.18	$	0.99
Nashville	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Tampa	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Washington, D.C.	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Operating office properties in strategic markets	345	9.2	$	8.60	$	28.10	$	36.70	$	0.93	$	3.05	$	3.98
Other operating office properties	277	4.8	$	5.45	$	13.11	$	18.56	$	1.13	$	2.72	$	3.85
Total	622	7.3	$	7.20	$	21.41	$	28.61	$	0.99	$	2.95	$	3.94
Expansion
Market
Austin	4	6.4	$	16.03	$	35.18	$	51.21	$	2.50	$	5.48	$	7.98
Dallas/Fort Worth	48	11.0	$	12.49	$	32.64	$	45.13	$	1.14	$	2.97	$	4.11
Houston	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Atlanta	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Charlotte	2	5.0	$	—	$	66.61	$	66.61	$	—	$	13.32	$	13.32
Los Angeles	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Louisville	3	3.4	$	1.38	$	4.15	$	5.53	$	0.40	$	1.20	$	1.60
Nashville	2	5.3	$	5.29	$	7.99	$	13.28	$	1.00	$	1.51	$	2.51
Tampa	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Washington, D.C.	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Operating office properties in strategic markets	59	9.9	$	11.50	$	31.68	$	43.18	$	1.16	$	3.20	$	4.36
Other operating office properties	32	4.3	$	5.36	$	7.50	$	12.86	$	1.24	$	1.73	$	2.97
Total	91	7.9	$	9.34	$	23.18	$	32.52	$	1.17	$	2.92	$	4.09
New
Market
Austin	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Dallas/Fort Worth	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Houston	4	12.0	$	17.08	$	42.84	$	59.92	$	1.42	$	3.57	$	4.99
Atlanta	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Charlotte	32	11.7	$	20.24	$	70.34	$	90.58	$	1.73	$	6.01	$	7.74
Los Angeles	—	—	—		—		—		$	—	$	—	$	—
Louisville	37	6.2	$	6.50	$	20.70	$	27.20	$	1.05	$	3.33	$	4.38
Nashville	3	3.3	$	3.29	$	3.00	$	6.29	$	1.01	$	0.92	$	1.93
Tampa	—	—	—		—		—		$	—	$	—	$	—
Washington, D.C.	3	10.5	$	15.83	$	75.12	$	90.95	$	1.51	$	7.15	$	8.66
Operating office properties in strategic markets	79	8.8	$	12.83	$	43.32	$	56.15	$	1.46	$	4.94	$	6.40
Other operating office properties	65	7.0	$	9.00	$	41.37	$	50.37	$	1.29	$	5.93	$	7.22
Total	144	8.0	$	11.11	$	42.44	$	53.55	$	1.39	$	5.33	$	6.72
Notes:
Analysis relates to operating properties owned at the end of the period and reflects TIER REIT’s ownership %.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 22

Leasing Cost Trend Analysis
	Three Months Ended		Three Months Ended		Year to Date		Year Ended		Year Ended
	30-Jun-15		31-Mar-15		30-Jun-15		31-Dec-14		31-Dec-13
Renewal Leasing
Square Feet (in thousands)	622		137		759		1,298		1,504
Weighted Average Term (in years)	7.3		4.4		6.7		5.7		4.3
Commissions per SF	$	7.20	$	6.63	$	7.09	$	4.68	$	4.55
TI and Other Leasing Cost per SF	21.41		7.43		18.89		4.62		7.68
Total Leasing Cost per SF	$	28.61	$	14.06	$	25.98	$	9.30	$	12.23
Commissions per SF per Year	$	0.99	$	1.52	$	1.09	$	0.93	$	1.06
TI and Other Leasing Cost per SF per Year	2.95		1.70		2.72		0.74		1.68
Total Leasing Cost per SF per Year	$	3.94	$	3.22	$	3.81	$	1.67	$	2.74
Expansion Leasing
Square Feet (in thousands)	91		68		159		264		389
Weighted Average Term (in years)	7.9		6.5		7.3		6.6		6.1
Commissions per SF	$	9.34	$	11.35	$	10.2	$	9.41	$	8.10
TI and Other Leasing Cost per SF	23.18		29.53		25.89		21.39		19.17
Total Leasing Cost per SF	$	32.52	$	40.88	$	36.09	$	30.80	$	27.27
Commissions per SF per Year	$	1.17	$	1.73	$	1.41	$	1.41	$	1.37
TI and Other Leasing Cost per SF per Year	2.92		4.51		3.6		3.11		3.14
Total Leasing Cost per SF per Year	$	4.09	$	6.24	$	5.01	$	4.52	$	4.51
New Leasing
Square Feet (in thousands)	144		111		255		927		754
Weighted Average Term (in years)	8.0		8.0		8		8.4		7.4
Commissions per SF	$	11.11	$	16.31	$	13.37	$	12.15	$	10.51
TI and Other Leasing Cost per SF	42.44		43.27		42.8		36.28		28.27
Total Leasing Cost per SF	$	53.55	$	59.58	$	56.17	$	48.43	$	38.78
Commissions per SF per Year	$	1.39	$	2.04	$	1.68	$	1.45	$	1.42
TI and Other Leasing Cost per SF per Year	5.33		5.41		5.36		4.34		3.82
Total Leasing Cost per SF per Year	$	6.72	$	7.45	$	7.04	$	5.79	$	5.24
Total Leasing
Square Feet (in thousands)	857		316		1,173		2,489		2,647
Weighted Average Term (in years)	7.5		6.1		7.1		6.8		5.4
Commissions per SF	$	8.08	$	11.05	$	8.88	$	7.96	$	6.77
TI and Other Leasing Cost per SF	25.13		24.78		25.04		18.19		15.23
Total Leasing Cost per SF	$	33.21	$	35.83	$	33.92	$	26.15	$	22.00
Commissions per SF per Year	$	1.08	$	1.81	$	1.26	$	1.18	$	1.24
TI and Other Leasing Cost per SF per Year	3.37		4.05		3.42		2.33		2.80
Total Leasing Cost per SF per Year	$	4.45	$	5.86	$	4.68	$	3.51	$	4.04
Notes:
Analysis relates to operating properties owned at the end of the indicated period and reflects TIER REIT’s ownership %.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 23

	Development, Leasing, and
	Capital Expenditures Summary
	(in thousands)
		For the Three Months Ended
		30-Jun-15		31-Mar-15		31-Dec-14		30-Sep-14		30-Jun-14
	Recurring Capital Expenditures
	Leasing costs	$	10,105	$	10,253	$	16,513	$	10,148	$	11,443
	Building improvements	3,962		2,994		2,955		5,908		4,421
	Subtotal recurring capital expenditures	14,067		13,247		19,468		16,056		15,864
	Non-recurring capital expenditures
	Building improvements (1)	—		125		—		—		—
	Leasing costs (2)	4,093		5,454		9,868		6,621		6,488
	Development (3)	3,307		2,286		8,962		3,310		8,378
	Redevelopment (4)	4,375		4,506		1,532		391		1,591
	Subtotal non-recurring capital expenditures	11,775		12,371		20,362		10,322		16,457
	Total capital expenditures	$	25,842	$	25,618	$	39,830	$	26,378	$	32,321
Notes:
All amounts represent TIER REIT’s ownership %.
(1)	Non-recurring building improvements include costs identified as deferred capital needs at the acquisition of a property.
(2)	Non-recurring leasing costs include costs incurred within 12 months of acquisition to lease space that was vacant at acquisition and costs incurred to lease space that has been vacant for at least 12 months. Cost incurred within 12 months of acquisition to lease space that was vacant at acquisition were as follows:
		$	662	$	674	$	203	$	—	$	—
(3)	Development includes all new construction costs related to base building and all costs associated with leasing development projects.
(4)	Redevelopment costs are for capital projects where substantial improvements are made to the property that change the character of the asset and are expected to result in development type returns on capital.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 24

Potential Future Development Sites
June 30, 2015
			Approximate Rentable Square Feet
				Month of Acquisition	Cost Basis (in millions)
Project	Market	Acres					Comments
Hurstbourne Plaza	Louisville	6.1	350,000	Dec-07	n/a		Planned mixed-use redevelopment of the Hurstbourne Business Center
Burnett Plaza	Fort Worth - CBD	1.4	N/A	Jan-07	$	2.9	Planned mixed-use development and garage for use at Burnett Plaza
5104 Eisenhower Blvd.	Tampa	5.2	130,000	Dec-07	$	1.5	Office building
208 Nueces (95%) (1)	Austin - CBD	0.8	325,000	Jun-15	$	7.5	Office building
Legacy Land (95%) (1)	Dallas (Plano - Legacy)	4.0	570,000	Jun-15	$	6.2	Office building(s)
(1) Cost basis represents our investment in this project.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 25

Acquisition and Disposition Activities
For the Twelve Months Ended June 30, 2015
		Number of Properties	Square Feet (in thousands)	Transaction Date	Price (in thousands)
Acquisitions (1)	Location
5950 Sherry Lane	Dallas, TX	1	197	12/19/2014	$	62,578
Dispositions (2)
City Hall Plaza	Manchester, NH	1	210	9/16/2014	$	19,750
222 South Riverside Plaza	Chicago, IL	1	1,184	12/19/2014	(Note 3)
One & Two Chestnut Place	Worcester, MA	1	218	3/6/2015	$	14,000
250 West Pratt	Baltimore, MD	1	368	3/19/2015	$	63,500
Fifth Third Center	Cleveland, OH	1	508	4/7/2015	$	52,750
United Plaza	Philadelphia, PA	1	617	4/23/2015	$	114,554
1650 Arch Street	Philadelphia, PA	1	553	4/23/2015	$	76,290
		7	3,658
(1) In June 2015 we acquired 95% interests in two separate land development projects, one located in Austin, Texas, and the other in Plano, Texas.
(2) In June 2015 we sold our 1325 G Street and Colorado Building properties (each located in Washington, D.C.) to two separate joint ventures in which we own a 10% noncontrolling interest.
(3) The contract sales price for the 222 South Riverside Plaza property was approximately $247.0 million in cash, excluding transaction costs, credits, prorations, and adjustments plus the conveyance of the 5950 Sherry Lane property.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 26

Summary of Financing
June 30, 2015
(in thousands)
				Principal			Weighted Average Stated Interest Rate	% of Total
Fixed Rate Debt
Secured mortgage debt (1)				$	451,338		5.68%	44%
Total fixed rate debt				451,338			5.68%	44%
Variable Rate Debt
Revolving credit facility (2)				—			—	—
Term loans (3)				525,000			3.46%	51%
Construction loan				53,886			3.04%	5%
Total variable rate debt				578,886			3.42%	56%
Total debt				$	1,030,224		4.47%	100%
(1) Includes unamortized premium.
(2) Additional borrowings of $66.0 million were available under the total credit facility.
(3) The borrowing rate under the term loans has been effectively fixed through the use of interest rate hedges.
	Maturities
	Secured Mortgage Debt			Revolving Credit Facility and Term Loans				Total				Annual % Maturing
	Principal		Rate (1)	Principal			Rate (1)	Principal			Rate (1)
July - December 2015	$	42,148	5.20%	$	—		—	$	42,148		5.20%	4%
2016	237,423		5.03%	—			—	237,423			5.03%	23%
2017	130,255		5.47%	—			—	130,255			5.47%	13%
2018	—		—	—			—	—			—	—
2019	—		—	250,000			3.24%	250,000			3.24%	24%
Thereafter	95,370		6.29%	275,000			3.67%	370,370			4.34%	36%
unamortized premium	28			—				28
Total debt	$	505,224		$	525,000			$	1,030,224
Weighted average maturity in years	2.1			5.8				4.0
(1) Represents weighted average stated interest rate for debt maturing in this period.
	Maturities
	Consolidated Debt			Our share of unconsolidated debt				Total				Annual % Maturing
	Principal		Rate (1)	Principal			Rate (1)	Principal			Rate (1)
July - December 2015	$	42,148	5.20%	$	5,400		5.16%	$	47,548		5.19%	4%
2016	237,423		5.03%	—			—	237,423			5.03%	22%
2017	130,255		5.47%	7,729			5.44%	137,984			5.47%	13%
2018	—		—	2,504			4.75%	2,504			4.75%	—
2019	250,000		3.24%	—			—	250,000			3.24%	23%
Thereafter	370,370		4.34%	56,857			3.40%	427,227			4.22%	38%
unamortized premium (discount)	28			(98		)		(70		)
Total debt	$	1,030,224		$	72,392			$	1,102,616
Weighted average maturity in years	4.0			5.9				4.1
(1) Represents weighted average stated interest rate for debt maturing in this period.
Hedging Details:
Type/Description	100% Notional Value		Index	Strike Rate			Effective Date	Maturity Date			Loan Designation
Interest rate swap - cash flow hedge	$	125,000	one-month LIBOR	1.6775%			31-Dec-14	31-Oct-19			Credit Facility
Interest rate swap - cash flow hedge	$	125,000	one-month LIBOR	1.6935%			30-Apr-15	31-Oct-19			Credit Facility
Interest rate swap - cash flow hedge	$	125,000	one-month LIBOR	1.7615%			30-Jun-15	31-May-22			Credit Facility
Interest rate swap - cash flow hedge	$	150,000	one-month LIBOR	1.7695%			30-Jun-15	31-May-22			Credit Facility

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 27

	Principal Payments by Year
	as of June 30, 2015
	(in thousands)
		Total			2015			2016			2017			2018		2019			Thereafter
Loop Central		$	42,148		$	42,148		$	—		$	—		$	—	$	—		$	—
Woodcrest Corporate Center		47,036			428			46,608			—			—		—			—
Fifth Third Plaza		49,238			388			48,850			—			—		—			—
Plaza at MetroCenter		23,438			185			23,253			—			—		—			—
Two BriarLake Plaza construction		53,886			—			53,886			—			—		—			—
Three Parkway		63,825			510			63,315			—			—		—			—
One & Two Eldridge		71,455			571			1,190			69,694			—		—			—
500 E. Pratt		58,800			—			—			58,800			—		—			—
Credit Facility - Revolving Line		—			—			—			—			—		—			—
Credit Facility - Term Loan		250,000			—			—			—			—		250,000			—
One BriarLake Plaza - mezzanine		14,714			44			97			110			121		134			14,208
One BriarLake Plaza		80,656			635			1,326			1,417			1,501		1,589			74,188
Credit Facility - Term Loan		275,000			—			—			—			—		—			275,000
		1,030,196			$	44,909		$	238,525		$	130,021		$	1,622	$	251,723		$	363,396
unamortized premium (discount)		28
Consolidated notes payable		$	1,030,224
Notes associated with investments in unconsolidated entities and excluded from the consolidated balance above:
Wanamaker Building - retail (60%)		$	5,400		$	5,400		$	—		$	—		$	—	$	—		$	—
Wanamaker Building - office (60%)		2,504			371			769			806			558		—			—
Wanamaker Building - office (60%)		43,957			436			897			937			974		1,013			39,700
Paces West (10%) (1)		7,729			—			—			7,729			—		—			—
1325 G Street (10%)		9,500			—			—			—			—		—			9,500
Colorado Building (10%)		3,400			—			—			—			—		—			3,400
		72,490			$	6,207		$	1,666		$	9,472		$	1,532	$	1,013		$	52,600
unamortized premium (discount)		(98		)
Total unconsolidated notes payable		$	72,392
Total notes payable (2)		$	1,102,686		$	51,116		$	240,191		$	139,493		$	3,154	$	252,736		$	415,996
% of principal payments due by year		100		%	4		%	22		%	13		%	—		23		%	38		%
(1)	Paces West debt consists of an A note of $6.5 million and a B note of $1.2 million. Payment of the B note is only required if the distributions from the joint venture achieve certain investment return thresholds.
(2)	Includes consolidated notes payable, our share of unconsolidated notes payable, and excludes unamortized premium (discount).

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 28

Definitions of Non-GAAP Financial Measures

We use non-GAAP financial measures in our public filings and other public disclosures. These non-GAAP financial measures are defined below.

Funds from Operations (“FFO”)

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient for evaluating operating performance.  FFO is a non-GAAP financial measure that is widely recognized as a measure of a REIT’s operating performance.  We use FFO as defined by the National Association of Real Estate Investment Trusts (NAREIT) in the April 2002 “White Paper on Funds From Operations” which is net income (loss), computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains (or losses) from sales of property and impairments of depreciable real estate (including impairments of investments in unconsolidated entities which resulted from measurable decreases in the fair value of the depreciable real estate held by the unconsolidated entity), plus depreciation and amortization of real estate assets, and after related adjustments for unconsolidated entities and noncontrolling interests.  The determination of whether impairment charges have been incurred is based partly on anticipated operating performance and hold periods.  Estimated undiscounted cash flows from a property, derived from estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows are taken into account in determining whether an impairment charge has been incurred.  While impairment charges for depreciable real estate are excluded from net income (loss) in the calculation of FFO as described above, impairments reflect a decline in the value of the applicable property which we may not recover.

We believe that the use of FFO, together with the required GAAP presentations, is helpful in understanding our operating performance because it excludes real estate-related depreciation and amortization, gains and losses from property dispositions, impairments of depreciable real estate assets, and extraordinary items, and as a result, when compared period to period, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, which are not immediately apparent from net income.  Factors that impact FFO include fixed costs, yields on cash held in accounts, income from portfolio properties and other portfolio assets, interest rates on debt financing, and operating expenses.

We also evaluate FFO attributable to common stockholders, excluding certain items. The items excluded relate to certain non-operating activities or certain non-recurring activities that create significant FFO volatility. We believe it is useful to evaluate FFO excluding these items because it provides useful information in analyzing comparability between reporting periods and in assessing the sustainability of our operating performance.

FFO and FFO, excluding certain items, should not be considered as alternatives to net income (loss), or indications of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions. Additionally, the exclusion of impairments limits the usefulness of FFO and FFO, excluding certain items, as historical operating performance measures since an impairment charge indicates that operating performance has been permanently affected. FFO and FFO, excluding certain items, are not useful measures in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO and FFO, excluding certain items. FFO and FFO, excluding certain items, are non-GAAP measurements and should be reviewed in connection with other GAAP measurements. Our FFO and FFO, excluding certain items, attributable to common stockholders as presented may not be comparable to amounts calculated by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret it differently.

Funds Available for Distribution (“FAD”)

FAD is a non-GAAP financial measure that we define as FFO, excluding fair value mark to market adjustments, non-real estate depreciation and amortization, non-cash stock-based compensation expense, accretion of Series A preferred stock, the amortization of financing costs, and realized gains (losses) from the early extinguishment of derivatives, acquisition fees and expenses, straight-line rent amounts, amortization of above- or below-market intangible assets and liabilities, and gains or losses on early extinguishment of debt, costs associated with our NYSE listing, other non-recurring charges, less recurring capital expenditures, each as adjusted for our pro rata share of consolidated and unconsolidated amounts. Recurring capital expenditures are those capital expenditures, tenant improvements, leasing commissions and deferred lease incentives that are incurred to maintain current in-place rents including the leasing costs incurred to replace tenants upon lease expiration. Recurring capital expenditures exclude non-recurring capital expenditures. Non-recurring capital expenditures are those capital expenditures (1) incurred to change the class or characterization of an asset, (2) identified as deferred capital needs at the acquisition of a property and were incurred within a reasonable period of time subsequent to the property’s acquisition, or (3) incurred for tenant improvements, leasing commissions, or deferred lease incentives within twelve months of acquisition to lease space that was vacant at acquisition and costs incurred to lease space that has been vacant for at least twelve months. Although our FAD may not be comparable to that of other REITs and real estate companies, we believe it provides a meaningful indicator of our ability to fund our cash needs and to make cash distributions to equity owners.

We believe that net income (loss) is the most directly comparable GAAP financial measure to FAD. FAD does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions.

Net Operating Income (“NOI”)

NOI is a non-GAAP financial measure equal to rental revenue, less property operating expenses (excluding tenant improvement demolition costs), real estate taxes, and property management expenses.   Our management uses NOI internally as a performance measure and believes NOI is useful to investors as a performance measure because NOI reflects only those income and expense items that are incurred at the property level and is therefore a useful measure for evaluating a property’s performance. Using NOI on a comparative basis allows investors to evaluate property level performance to: (a) hold management accountable for maintaining or increasing property level NOI from period to period and (b) compare the operating performance of our properties in a given market with the operating performance of other real estate companies in the same market, and consequently allocate their own investment capital accordingly.

Further, we use NOI internally as a performance measure and believe NOI is useful to investors as a performance measure because, when compared year over year, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and general and administrative expenses on an un-leveraged basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 29

Certain items such as interest expense, while included in net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. In addition, it is useful to our management and investors that depreciation and amortization are excluded from NOI because historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time, and, instead, real estate values have historically risen or fallen with market conditions.

NOI presented by us may not be comparable to NOI reported by other REITs that do not define NOI exactly as we do. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements and notes thereto. NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions.

Same Store GAAP NOI and Same Store Cash NOI

Same Store GAAP NOI is equal to rental revenue, less lease termination fee income, property operating expenses (excluding tenant improvement demolition costs), real estate taxes, and property management expenses for our same store properties and is considered a non-GAAP financial measure. Same Store Cash NOI is equal to Same Store GAAP NOI less non-cash revenue items including straight-line rent adjustments and the amortization of above- and below-market rent. The same store properties include our consolidated operating properties owned and operated for the entirety of the current and comparable periods.  We view Same Store GAAP NOI and Same Store Cash NOI as important measures of the operating performance of our properties because they allow us to compare operating results of consolidated properties owned and operated for the entirety of the current and comparable periods and therefore eliminate variations caused by acquisitions or dispositions during the periods under review. 

Same Store GAAP NOI and Same Store Cash NOI presented by us may not be comparable to Same Store GAAP NOI or Same Store Cash NOI reported by other REITs that do not define Same Store GAAP NOI or Same Store Cash NOI exactly as we do. We believe that in order to facilitate a clear understanding of our operating results, Same Store GAAP NOI and Same Store Cash NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements and notes thereto. Same Store GAAP NOI and Same Store Cash NOI should not be considered as alternatives to net income (loss) as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions.

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

EBITDA, a non-GAAP financial measure, is defined as net income (loss), plus interest expense, income tax expense, and depreciation and amortization expense, and after related adjustments for unconsolidated partnerships, joint ventures and subsidiaries, and noncontrolling interests. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP, and is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because we believe it provides useful information regarding our ability to service or incur debt.

Supplemental Operating and Financial Data TIER REIT 2nd Quarter Page 30