Tier Reit 8K Results of Operations and Financial Condition | TIER 13 Feb 17

Exhibit 99.1

Supplemental Operating and Financial Data

For the Quarter Ended December 31, 2016

About the Company

TIER REIT, Inc. is a self-managed, Dallas-based real estate investment trust focused on delivering outsized stockholder return through stock price appreciation and dividend growth while offering unparalleled tenant service. TIER REIT’s investment strategy is to acquire, develop, and operate a portfolio of best-in-class properties in select U.S. markets that consistently lead the nation in both population and office-using employment growth. Within these markets, we target TIER1 submarkets, which are primarily urban and amenity-rich locations.

As of December 31, 2016, we owned interests in 29 operating office properties with approximately 10.1 million rentable square feet, one non-operating property with approximately 331,000 rentable square feet, and one development property that will consist of approximately 291,000 rentable square feet. As of December 31, 2016, our properties are located in 13 markets throughout the United States.



Board of Directors		Executive Officers and Senior Management
Richard I. Gilchrist		Scott W. Fordham
Chairman of the Board and Independent Director		Chief Executive Officer, President, and Director

Charles G. Dannis		Dallas E. Lucas
Independent Director		Chief Financial Officer and Treasurer

Scott W. Fordham		William J. Reister
Chief Executive Officer, President, and Director		Chief Investment Officer and Executive Vice President

R. Kent Griffin, Jr.		Telisa Webb Schelin
Independent Director		Chief Legal Officer, Executive Vice President, and Secretary

Thomas M. Herzog		James E. Sharp
Independent Director		Chief Accounting Officer and Executive Vice President

Dennis J. Martin		R. Heath Johnson
Independent Director		Managing Director - Asset Management

G. Ronald Witten		Dean R. Hook
Independent Director		Senior Vice President - Information Technology and Property Management

		Anubhav Raj
		Senior Vice President - Capital Markets



Company Information
Corporate Headquarters	Website	Trading Information	Investor inquiries should be directed to:
5950 Sherry Lane, Suite 700	www.tierreit.com	Trading Symbol: TIER	Scott McLaughlin
Dallas, Texas 75225		New York Stock Exchange	Senior Vice President - Investor Relations
			at 972.483.2400 or
			ir@tierreit.com


Research Coverage
BMO Capital	Janney Montgomery Scott LLC	JMP Securities	J.P. Morgan Securities
John Kim	Robert Stevenson	Mitch Germain	Anthony Paolone
212.885.4115	640.840.3217	212.906.3546	212.622.6682

Supplemental Operating and Financial Data

For the Quarter Ended December 31, 2016

Table of Contents



Overview and Highlights
Overview	1
Financial Highlights	2-3
Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Calculations of FFO and Additional Information	6
Calculations of EBITDA	7
Unconsolidated Entities Financial Summary	8
Same Store Analysis	9
Schedule of Properties Owned	10
Portfolio Analysis	11
Components of Net Asset Value	12
Significant Tenants	13
Industry Diversification	14

Leasing
Leasing Activity	15-16
Lease Expirations	17-18
Occupancy Trends	19

Capital Expenditures
Leasing Cost Summary	20
Leasing Cost Trend Analysis	21
Development, Leasing, and Capital Expenditures Summary	22

Other Information
Potential Future Development Sites	23
Summary of Development Activity	24
Properties Under Development	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 within the meaning of the federal securities laws 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, its intentions to sell certain properties, its intentions with respect to development activity, the value of its assets, its anticipated capital expenditures, and other matters. Words such as “may,” "will," “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “opportunities,” “objectives,” “strategies,” “goals,” and variations of these words and similar expressions are intended to identify forward-looking statements. 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, 2016. 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 and the Year Ended December 31, 2016

Property Results


•	Occupancy at December 31, 2016, was 90.7%, an increase of 90 basis points from September 30, 2016.


•	261,000 square feet leased - 140,000 square feet of renewals, 48,000 square feet of expansion space, and 73,000 square feet of new leasing.

Real Estate Activities


•	801 Thompson was sold for a contract sales price of approximately $4.9 million. 801 Thompson is an approximately 51,000 square feet office building located in Rockville, Maryland.


•	As of December 31, 2016, four of our properties (One Oxmoor Place, Steeplechase Place, Lakeview, and Hunnington) were held for sale.

Capital Market Activities


•	We repaid (without penalty) the $70.0 million loan secured by our One & Two Eldridge Place property that was scheduled to mature in January 2017. This loan had an effective interest rate of 5.49%.


•	We authorized a distribution of $0.18 per share of common stock for the fourth quarter of 2016, which was paid on January 6, 2017.

Subsequent Events


•	On January 4, 2017, we acquired the remaining 50.16% interest in our Domain 2 and Domain 7 properties for a combined contract purchase price of $51.2 million and assumed additional debt of $40.1 million. At acquisition, these properties were consolidated.


•	On January 17, 2017, we sold substantially all of our noncontrolling interest in the entity that indirectly owns the Wanamaker Building for a contract sales price of $114.3 million, including the buyer’s assumption of $41.8 million in debt.


•	On January 18, 2017, we sold our Buena Vista Plaza property for a contract sales price of $52.5 million.


•	On February 1, 2017, we repaid (without penalty) the $58.8 million loan secured by 500 E. Pratt. This loan was scheduled to mature in May 2017.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 1



Financial Highlights
(in thousands, except per share data, effective rent data, percentages, and number of properties)

	31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Portfolio Summary:

Total operating office properties	29			34			29			30			32			33			34
Rentable square feet (100%) (operating properties)	10,104			11,971			10,104			10,155			10,494			11,535			11,971
Rentable square feet (own %) (operating properties)	8,988			10,855			8,988			9,039			9,378			10,419			10,855
Occupancy %	90.7		%	89.7		%	90.7		%	89.8		%	90.4		%	88.9		%	89.7		%
Executed % SF leased	91.0		%	89.8		%	91.0		%	90.2		%	90.7		%	89.7		%	89.8		%
Economic % SF leased	87.1		%	84.1		%	87.1		%	85.6		%	86.9		%	84.6		%	84.1		%
Average effective rent/square foot	$	27.19		$	25.69		$	27.19		$	26.73		$	26.42		$	26.62		$	25.69

	Twelve Months Ended						Three Months Ended
	31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Financial Results:
Revenue	$	242,818		$	282,365		$	54,075		$	55,998		$	64,267		$	68,478		$	67,085
Property related expenses	(72,603		)	(89,158		)	(15,998		)	(16,315		)	(19,805		)	(20,485		)	(21,812		)
Real estate taxes	(36,297		)	(40,134		)	(7,454		)	(8,350		)	(9,429		)	(11,064		)	(8,622		)
Property management fees	(917		)	(5,028		)	(197		)	(210		)	(226		)	(284		)	(249		)
NOI	$	133,001		$	148,045		$	30,426		$	31,123		$	34,807		$	36,645		$	36,402
Base rent	$	175,766		$	203,104		$	40,887		$	42,393		$	45,579		$	46,907		$	47,494
Free rent	$	(9,571	)	$	(17,813	)	$	(2,204	)	$	(1,975	)	$	(2,133	)	$	(3,259	)	$	(3,557	)
Net loss attributable to common stockholders	$	(29,417	)	$	(32,108	)	$	(6,333	)	$	(1,025	)	$	(9,352	)	$	(12,707	)	$	(11,216	)
Diluted loss per common share (1)	$	(0.62	)	$	(0.66	)	$	(0.13	)	$	(0.02	)	$	(0.20	)	$	(0.27	)	$	(0.24	)
FFO attributable to common stockholders	$	76,532		$	35,099		$	18,917		$	19,239		$	18,144		$	20,232		$	17,363
Diluted FFO per common share	$	1.60		$	0.71		$	0.40		$	0.40		$	0.38		$	0.42		$	0.37
FFO attributable to common stockholders, excluding certain items	$	79,451		$	73,379		$	19,086		$	18,324		$	20,700		$	21,341		$	18,017
Diluted FFO, excluding certain items, per common share	$	1.66		$	1.49		$	0.40		$	0.38		$	0.43		$	0.45		$	0.38
Normalized EBITDA	$	126,106		$	141,052		$	29,099		$	30,036		$	32,957		$	34,014		$	34,789
Weighted average common shares outstanding - basic	47,406			48,960			47,414			47,413			47,406			47,390			47,244
Weighted average common shares outstanding - diluted	47,819			49,148			47,888			47,846			47,826			47,715			47,436

Selected Additional Trend Information:
Renewal % based on square feet	59		%	78		%	82		%	41		%	45		%	66		%	79		%
Distributions declared on common shares	$	34,377		$	26,126		$	8,594		$	8,595		$	8,594		$	8,594		$	8,576
Annualized distribution yield (2)	4.1		%	N/A			4.1		%	4.7		%	4.7		%	5.4		%	4.9		%

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

(2) Based on the closing price of our common stock as of the last day of the associated period.

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 accounting principles generally accepted in the United States (“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 6-7. 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 30-31.



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



Financial Highlights (continued)
(in thousands, except stock prices, percentages, and ratios)

	31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Selected Balance Sheet Items:

Total book value of real estate	$	1,250,198		$	1,573,248		$	1,250,198		$	1,248,491		$	1,320,775		$	1,503,088		$	1,573,248

Cash and cash equivalents	$	14,884		$	12,248		$	14,884		$	51,466		$	78,599		$	5,532		$	12,248

Unconsolidated cash and cash equivalents (at ownership %)	$	5,348		$	4,086		$	5,348		$	5,479		$	4,874		$	4,175		$	4,086

Restricted cash	$	7,509		$	10,712		$	7,509		$	8,586		$	10,778		$	12,756		$	10,712

Total assets	$	1,552,540		$	1,873,745		$	1,552,540		$	1,570,685		$	1,640,666		$	1,787,304		$	1,873,745

Mortgage debt	$	200,131		$	415,425		$	200,131		$	270,758		$	334,605		$	358,717		$	415,425

Revolving credit facility and term loans	$	634,000		$	665,000		$	634,000		$	575,000		$	575,000		$	683,000		$	665,000

Unconsolidated debt (at ownership %)	$	109,790		$	80,189		$	109,790		$	103,350		$	98,384		$	82,747		$	80,189

Total liabilities	$	932,024		$	1,195,926		$	932,024		$	951,701		$	1,015,748		$	1,142,948		$	1,195,926

Capitalization:

Shares of common stock outstanding	47,473			47,362			47,473			47,413			47,413			47,405			47,362

Restricted stock units outstanding	150			29			150			150			150			141			29

Shares of restricted stock outstanding	247			282			247			333			333			333			282

	47,870			47,673			47,870			47,896			47,896			47,879			47,673

High stock price (1)	$	17.81		$	19.50		$	17.44		$	17.81		$	16.66		$	15.60		$	16.82

Low stock price (1)	$	12.52		$	13.60		$	14.06		$	15.07		$	13.29		$	12.52		$	14.07

Average closing stock price (1)	$	15.25		$	15.51		$	15.58		$	16.37		$	14.90		$	14.10		$	15.14

Closing stock price	$	17.39		$	14.75		$	17.39		$	15.44		$	15.33		$	13.44		$	14.75

Market capitalization (2)	$	832,459		$	703,177		$	832,459		$	739,514		$	734,246		$	643,494		$	703,177

Total debt (3)	$	943,921		$	1,160,614		$	943,921		$	949,108		$	1,007,989		$	1,124,464		$	1,160,614

Net debt (4)	$	923,689		$	1,144,280		$	923,689		$	892,163		$	924,516		$	1,114,757		$	1,144,280

Total capitalization	$	1,776,380		$	1,863,791		$	1,776,380		$	1,688,622		$	1,742,235		$	1,767,958		$	1,863,791


	Twelve Months Ended						Three Months Ended
	31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Ratios:

NOI margin % (5)	54.8		%	52.4		%	56.3		%	55.6		%	54.2		%	53.5		%	54.3		%

Normalized fixed charge coverage (6)	2.50			2.02			2.68			2.42			2.48			2.46			2.35

Normalized interest coverage (6)	2.78			2.33			2.91			2.74			2.76			2.72			2.67

Net debt/normalized annualized estimated full period EBITDA from properties owned at period end (6)	N/A			N/A			8.04x			7.63x			7.57x			8.40x			8.22x

(1) Annual 2015 prices reflect the period beginning on July 23, 2015 (the date our shares were listed on stock on the NYSE).
(2) Market capitalization is equal to outstanding shares (common stock, restricted stock, and restricted stock units, as if converted) times the closing price of our common stock as of the the last day of the associated period.
(3) Includes book value of mortgage debt, the revolving credit facility and term loans, and unconsolidated debt (at ownership %).
(4) Total debt less cash and cash equivalents and unconsolidated cash and cash equivalents (at ownership %).
(5) NOI margin % is equal to NOI divided by revenue.
(6) See page 7 for more detailed information.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 3



Consolidated Balance Sheets
(in thousands, except share and per share data)


		31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Assets
	Real estate
	Land	$	143,537		$	143,581		$	159,736		$	176,309		$	179,989
	Land held for development	45,059			45,059			45,059			45,059			45,059
	Buildings and improvements, net	1,043,641			1,048,194			1,108,255			1,276,519			1,348,200
	Real estate under development	17,961			11,657			7,725			5,201			—
	Total real estate	1,250,198			1,248,491			1,320,775			1,503,088			1,573,248

	Cash and cash equivalents	14,884			51,466			78,599			5,532			12,248
	Restricted cash	7,509			8,586			10,778			12,756			10,712
	Accounts receivable, net	71,459			67,100			66,328			78,562			76,228
	Prepaid expenses and other assets	25,305			5,540			5,356			6,025			6,712
	Investments in unconsolidated entities	76,813			76,954			77,606			90,000			88,998
	Deferred financing fees, net	2,395			2,698			2,999			3,310			3,111
	Acquired above-market leases, net	898			1,017			1,136			1,258			1,388
	Other lease intangibles, net	60,946			61,919			67,202			76,787			82,160
	Other intangible assets, net	9,787			9,888			9,887			9,986			10,086
	Assets associated with real estate held for sale	32,346			37,026			—			—			—
Total assets		$	1,552,540		$	1,570,685		$	1,640,666		$	1,787,304		$	1,864,891

Liabilities and equity

Liabilities:
	Mortgage debt	$	200,131		$	270,758		$	334,605		$	358,717		$	415,425
	Unsecured term loans	575,000			575,000			575,000			575,000			525,000
	Unsecured revolving credit facility	59,000			—			—			108,000			140,000
	Unamortized debt issuance costs	(7,348		)	(7,838		)	(8,310		)	(8,744		)	(8,854		)
	Total notes payable, net	826,783			837,920			901,295			1,032,973			1,071,571

	Accounts payable and accrued liabilities	74,458			65,924			61,721			56,681			71,597
	Payables to related parties	—			—			—			294			292
	Acquired below-market leases, net	6,886			7,856			8,961			10,456			11,934
	Distributions payable	8,601			8,602			8,601			8,600			8,596
	Other liabilities	14,353			30,005			35,170			33,944			23,082
	Obligations associated with real estate held for sale	943			1,394			—			—			—
Total liabilities		932,024			951,701			1,015,748			1,142,948			1,187,072
Commitments and contingencies
Series A Convertible Preferred Stock		—			—			—			—			2,700
Equity:
	Preferred stock	—			—			—			—			—
	Convertible stock	—			—			—			—			—
	Common stock, $.0001 par value per share, 382,499,000 shares authorized	5			5			5			5			5
	Additional paid-in capital	2,606,098			2,605,569			2,604,614			2,603,564			2,600,193
	Cumulative distributions and net loss attributable to common stockholders	(1,986,515		)	(1,971,588		)	(1,961,968		)	(1,944,022		)	(1,922,721		)
	Accumulated other comprehensive loss	(1,042		)	(16,662		)	(19,262		)	(16,732		)	(3,860		)
	Stockholders’ equity	618,546			617,324			623,389			642,815			673,617
	Noncontrolling interests	1,970			1,660			1,529			1,541			1,502
Total equity		620,516			618,984			624,918			644,356			675,119
Total liabilities and equity		$	1,552,540		$	1,570,685		$	1,640,666		$	1,787,304		$	1,864,891

Common stock, number of shares issued and outstanding		47,473,218			47,412,705			47,412,705			47,404,980			47,362,372



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 4



	Consolidated Statements of Operations
	(in thousands, except share and per share amounts)


		Twelve Months Ended						Three Months Ended
		31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Revenue
	Rental income	$	229,467		$	260,087		$	51,613		$	53,975		$	60,588		$	63,291		$	61,736
	Straight-line rent and lease incentive revenue	7,403			12,965			1,500			756			1,897			3,250			3,310
	Above- and below-market rent amortization	4,255			5,842			856			936			1,115			1,348			1,256
	Lease termination fees	1,693			3,471			106			331			667			589			783
	Total revenue	242,818			282,365			54,075			55,998			64,267			68,478			67,085
Expenses
	Property related expenses	72,603			89,158			15,998			16,315			19,805			20,485			21,812
	Real estate taxes	36,297			40,134			7,454			8,350			9,429			11,064			8,622
	Property management fees	917			5,028			197			210			226			284			249
	Total property operating expenses	109,817			134,320			23,649			24,875			29,460			31,833			30,683
	Interest expense	40,723			53,784			8,746			9,754			10,722			11,501			11,668
	Interest rate hedge ineffectiveness expense (income)	(572		)	—			(979		)	(1,534		)	1,941			—			—
	Amortization of deferred financing costs	3,106			3,769			798			785			784			739			1,048
	Amortization of mark to market	—			(99		)	—			—			—			—			(9		)
	Total interest expense	43,257			57,454			8,565			9,005			13,447			12,240			12,707
	General and administrative	19,490			22,740			4,755			4,460			4,765			5,510			5,569
	BHT Advisors termination fee and HPT Management buyout fee	—			10,301			—			—			—			—			—
	Tender offer and listing costs	—			5,526			—			—			—			—			(27		)
	Amortization of restricted shares and units	4,159			4,975			1,041			1,069			1,055			994			3,371
	Straight-line rent expense adjustment	—			(81		)	—			—			—			—			—
	Acquisition expense	—			1,480			—			—			—			—			21
	Asset impairment losses	8,977			132			—			4,151			—			4,826			—
	Real estate depreciation and amortization	111,122			122,230			23,771			25,062			30,519			31,770			29,910
	Depreciation and amortization - non-real estate assets	708			501			85			71			278			274			272
	Total expenses	297,530			359,578			61,866			68,693			79,524			87,447			82,506
	Interest and other income	1,169			810			303			248			344			274			257
	Loss on early extinguishment of debt	—			(21,502		)	—			—			—			—			(24		)
Loss from continuing operations before income taxes, equity
	in operations of investments, and gain (loss) on sale of assets	(53,543		)	(97,905		)	(7,488		)	(12,447		)	(14,913		)	(18,695		)	(15,188		)
	Provision for income taxes	(655		)	(1,507		)	(188		)	(4		)	(281		)	(182		)	(209		)
	Equity in operations of investments	2,569			3,982			685			646			823			415			3,829
Loss from continuing operations before gain (loss) on sale of assets		(51,629		)	(95,430		)	(6,991		)	(11,805		)	(14,371		)	(18,462		)	(11,568		)
Discontinued operations:
	Income from discontinued operations	—			1,407			—			—			—			—			17
	Gain on sale of discontinued operations	—			15,383			—			—			—			—			297
Discontinued operations		—			16,790			—			—			—			—			314
Gain (loss) on sale of assets		22,176			44,477			650			10,777			5,010			5,739			(2		)
Net loss		(29,453		)	(34,163		)	(6,341		)	(1,028		)	(9,361		)	(12,723		)	(11,256		)
	Noncontrolling interests - continuing operations	36			159			8			3			9			16			41
	Noncontrolling interests - discontinued operations	—			(30		)	—			—			—			—			(1		)
	Dilution of Series A Convertible Preferred Stock	—			1,926			—			—			—			—			—
Net loss attributable to common stockholders		$	(29,417	)	$	(32,108	)	$	(6,333	)	$	(1,025	)	$	(9,352	)	$	(12,707	)	$	(11,216	)

Basic and diluted weighted average common shares outstanding		47,405,564			48,960,393			47,414,021			47,412,705			47,405,767			47,389,591			47,244,471
Basic and diluted earnings (loss) per common share:
	Continuing operations	$	(0.62	)	$	(1.00	)	$	(0.13	)	$	(0.02	)	$	(0.20	)	$	(0.27	)	$	(0.24	)
	Discontinued operations	—			0.34			—			—			—			—			—
Basic and diluted loss per common share		$	(0.62	)	$	(0.66	)	$	(0.13	)	$	(0.02	)	$	(0.20	)	$	(0.27	)	$	(0.24	)

Distributions declared per common share		$	0.72		$	0.54		$	0.18		$	0.18		$	0.18		$	0.18		$	0.18

Net income (loss) attributable to common stockholders:
	Continuing operations	$	(29,417	)	$	(48,868	)	$	(6,333	)	$	(1,025	)	$	(9,352	)	$	(12,707	)	$	(11,529	)
	Discontinued operations	—			16,760			—			—			—			—			313
Net loss attributable to common stockholders		$	(29,417	)	$	(32,108	)	$	(6,333	)	$	(1,025	)	$	(9,352	)	$	(12,707	)	$	(11,216	)



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 5



Calculations of FFO and Additional Information
(in thousands, except per share data)


		Twelve Months Ended						Three Months Ended
		31-Dec-16			31-Dec-15			31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15

Net loss		$	(29,453	)	$	(34,163	)	$	(6,341	)	$	(1,028	)	$	(9,361	)	$	(12,723	)	$	(11,256	)
Net loss attributable to noncontrolling interests		36			129			8			3			9			16			40
Dilution of Series A Convertible Preferred Stock		—			1,926			—			—			—			—			—
Net loss attributable to common stockholders		(29,417		)	(32,108		)	(6,333		)	(1,025		)	(9,352		)	(12,707		)	(11,216		)
Adjustments (1):
	Real estate depreciation and amortization - consolidated	111,122			122,230			23,771			25,062			30,519			31,770			29,910
	Real estate depreciation and amortization - unconsolidated joint ventures	8,258			6,985			2,150			2,058			2,005			2,045			2,427
	Real estate depreciation and amortization - noncontrolling interest	(6		)	(20		)	—			—			—			(6		)	(10		)
	Impairment of depreciable real estate assets	8,977			132			—			4,151			—			4,826			—
	Gain on sale of depreciable real estate	(22,236		)	(63,263		)	(650		)	(10,837		)	(5,010		)	(5,739		)	(3,698		)
	Taxes associated with sale of depreciable real estate	(88		)	1,259			—			(152		)	—			64			—
	Noncontrolling interests	(78		)	(116		)	(21		)	(18		)	(18		)	(21		)	(50		)
FFO attributable to common stockholders		76,532			35,099			18,917			19,239			18,144			20,232			17,363


Adjustments (1):
	Acquisition expenses	—			1,863			—			—			—			—			26
	Severance charges	1,025			—			532			—			—			493			—
	Tender offer and listing costs	—			5,526			—			—			—			—			(27		)
	Interest rate hedge ineffectiveness expense (income) (2)	(572		)	—			(979		)	(1,534		)	1,941			—			—
	Loss on early extinguishment of debt	—			21,606			—			—			—			—			31
	Default interest (3)	2,468			980			616			619			616			617			625
	BHT Advisors termination fee and HPT Management buyout fee	—			10,301			—			—			—			—			—
	Noncontrolling interests	(2		)	(70		)	—			—			(1		)	(1		)	(1		)
	Dilution of Series A Convertible Preferred Stock	—			(1,926		)	—			—			—			—			—
FFO attributable to common stockholders, excluding certain items		$	79,451		$	73,379		$	19,086		$	18,324		$	20,700		$	21,341		$	18,017


Additional Information (1)
Recurring capital expenditures		(36,886		)	(52,222		)	(10,902		)	(5,256		)	(11,375		)	(9,353		)	(11,113		)
Straight-line rent adjustments		(9,753		)	(12,406		)	(1,998		)	(1,247		)	(2,551		)	(3,957		)	(2,662		)
Above- and below-market rent amortization		(4,551		)	(6,191		)	(922		)	(1,014		)	(1,192		)	(1,423		)	(1,330		)
Amortization of deferred financing fees and mark to market		3,345			3,859			844			828			880			793			1,095
Amortization of restricted shares and units		4,159			4,975			1,041			1,069			1,055			994			3,371
Depreciation and amortization - non-real estate assets		708			501			85			71			278			274			272

Weighted average common shares outstanding - basic		47,406			48,960			47,414			47,413			47,406			47,390			47,244
Weighted average common shares outstanding - diluted		47,819			49,148			47,888			47,846			47,826			47,715			47,436

Diluted FFO per common share		$	1.60		$	0.71		$	0.40		$	0.40		$	0.38		$	0.42		$	0.37
Diluted FFO, excluding certain items, per common share		$	1.66		$	1.49		$	0.40		$	0.38		$	0.43		$	0.45		$	0.38

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

(2) Interest rate swaps are adjusted to fair value through other comprehensive income (loss). However, because our interest rate swaps do not have a LIBOR floor while the hedged debt is subject to a LIBOR floor, the portion of the change in fair value of our interest rate swaps attributable to this mismatch is reclassified to interest rate hedge ineffectiveness expense (income) within “interest expense” on our consolidated statements of operations.

(3) We have a non-recourse loan in default which subjects us to incur default interest at a rate that is 500 basis points higher than the stated interest rate. Although there can be no assurance, we anticipate that when this property is sold or when ownership of this property is conveyed to the lender, this default interest will be forgiven.

For additional information regarding the non-GAAP measures, see pages 30-31.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 6



Calculations of EBITDA
(in thousands, except ratios)

		Three Months Ended
		31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15

Net loss attributable to common stockholders		$	(6,333	)	$	(1,025	)	$	(9,352	)	$	(12,707	)	$	(11,216	)

Adjustments:

	Noncontrolling interests	(5		)	(2		)	(6		)	(8		)	(20		)

	Interest expense:
	Interest expense - consolidated	8,746			9,754			10,722			11,501			11,668
	Interest expense - unconsolidated entities	723			725			702			641			727
	Interest rate hedge ineffectiveness expense (income) (1)	(979		)	(1,534		)	1,941			—			—
	Amortization of deferred financing costs - consolidated	798			785			784			739			1,048
	Amortization of deferred financing costs - unconsolidated entities	46			43			96			54			56
	Mark to market - consolidated	—			—			—			—			(9		)
	Total interest expense	9,334			9,773			14,245			12,935			13,490

	Tax provision - consolidated	188			4			281			182			209
	Tax provision - unconsolidated entities	49			4			8			2			1
	Depreciation and amortization - consolidated	23,856			25,133			30,797			32,044			30,182
	Depreciation and amortization - unconsolidated entities	2,150			2,058			2,005			2,045			2,427
	Depreciation and amortization - noncontrolling interests	—			—			—			(6		)	(10		)
	Impairment losses	—			4,151			—			4,826			—
	Gain on sale of real estate	(650		)	(10,837		)	(5,010		)	(5,739		)	(3,698		)
	Loss on early extinguishment of debt	—			—			—			—			31
EBITDA		28,589			29,259			32,968			33,574			31,396

Adjustments:
	Costs incurred in connection with listing activities	—			—			—			—			(27		)
	Acquisition expenses	—			—			—			—			26
	Non-cash write-off (recoveries) of tenant receivables	(22		)	777			(11		)	(53		)	557
	Severance charges	532			—			—			493			—
	Transition-related stock-based compensation expense (2)	—			—			—			—			2,837
Normalized EBITDA		29,099			30,036			32,957			34,014			34,789

Adjustments:
	EBITDA from properties disposed before period end	(385		)	(811		)	(2,418		)	(832		)	25
Normalized estimated full period EBITDA from properties owned at period end		$	28,714		$	29,225		$	30,539		$	33,182		$	34,814

Fixed charges
	Interest expense	$	9,334		$	9,773		$	14,245		$	12,935		$	13,490
	Interest rate hedge ineffectiveness expense (income) (1)	979			1,534			(1,941		)	—			—
	Default interest (3)	(616		)	(619		)	(616		)	(617		)	(625		)
	Interest expense related to participating mortgage (4)	—			—			—			—			(53		)
	Capitalized interest incurred (5)	289			267			249			198			199
	Normalized interest expense	9,986			10,955			11,937			12,516			13,011
	Principal payments (excludes debt payoff)	854			1,436			1,369			1,318			1,776
Normalized fixed charges		$	10,840		$	12,391		$	13,306		$	13,834		$	14,787

Normalized interest coverage (6)		2.91			2.74			2.76			2.72			2.67
Normalized fixed charge coverage (6)		2.68			2.42			2.48			2.46			2.35

______________________

(1) Interest rate swaps are adjusted to fair value through other comprehensive income (loss). However, because our interest rate swaps do not have a LIBOR floor while the hedged debt is subject to a LIBOR floor, the portion of the change in fair value of our interest rate swaps attributable to this mismatch is reclassified to interest rate hedge ineffectiveness expense (income).


(2)	During the fourth quarter of 2015, we incurred a charge from the acceleration of stock grants related to our transition from an arrears-based equity incentive program to a new, forward-looking, multi-year, long-term equity incentive program.

(4) Represents the portion of the Paces West B note that was repaid based on achievement of certain investment return thresholds which is included in “interest expense-unconsolidated entities” above. Paces West was sold in November 2015.

(5) Excludes capitalized interest funded from construction loans.

(6) Normalized interest coverage is equal to normalized EBITDA divided by normalized interest expense. Normalized fixed charge coverage is equal to normalized EBITDA divided by normalized fixed charges.

For additional information regarding the non-GAAP measures, see pages 30-31.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 7



Unconsolidated Entities Financial Summary
As of and for the Quarter Ended December 31, 2016
(dollars in thousands)

		Unconsolidated Entities at
		TIER REIT Ownership Share
		Wanamaker Building			1325 G Street			Colorado Building			Domain 2 & 7			Domain 8
Ownership % during the period		60.00%			10.00%			10.00%			49.84%			50.00%
Ownership % at period end		60.00%			10.00%			10.00%			49.84%			50.00%			Total
Results of Operations
Rental income		$	4,034		$	304		$	127		$	1,877		$	—		$	6,342
Straight-line rent and lease incentive revenue		(2		)	14			45			10			—			67
Above- and below-market rent amortization		102			(35		)	(7		)	—			—			60
Lease termination fees		22			2			—			—			—			24
Other income		37			44			—			—			1			82
	Total revenue	4,193			329			165			1,887			1			6,575

Property related expenses		1,367			89			41			335			13			1,845
Real estate taxes		688			69			26			247			—			1,030
Property management fees		129			9			4			46			—			188
	NOI	2,009			162			94			1,259			(12		)	3,512

Interest expense		418			59			21			225			—			723
Amortization of deferred financing costs		20			6			2			29			—			57
Asset management fees		—			3			2			—			—			5
Real estate depreciation and amortization		1,265			240			54			448			—			2,007
Interest income and other expense		4			1			1			—			—			6
Provision for income taxes		19			6			(3		)	27			—			49
	Net income (loss)	283			(153		)	17			530			(12		)	665

Adjustments:
Depreciation of basis adjustments		—			—			—			(145		)	—			(145		)
Above- and below-market rent amortization of basis adjustment		—			—			—			6			—			6
Eliminate amortization of deferred financing costs		11			—			—			—			—			11
Eliminate amortization of deferred lease commission		—			—			2			—			—			2
Eliminate construction management fees		6			—			—			—			—			6
Eliminate property management fees		129			8			3			—			—			140
	Adjusted net income (loss)	429			(145		)	22			391			(12		)	685
Adjustments:
	Real estate depreciation and amortization	1,265			240			52			593			—			2,150
Funds from operations		$	1,694		$	95		$	74		$	984		$	(12	)	$	2,835

Balance Sheet Information
Real estate book value		$	102,970		$	12,975		$	3,977		$	36,443		$	28,845		$	185,210
Accumulated depreciation		(28,167		)	(396		)	(88		)	(2,712		)	—			(31,363		)
Real estate book value after depreciation		$	74,803		$	12,579		$	3,889		$	33,731		$	28,845		$	153,847

Cash and cash equivalents		$	3,094		$	494		$	110		$	1,096		$	554		$	5,348
Assets		$	95,077		$	15,825		$	5,220		$	40,394		$	30,996		$	187,512
Mortgage debt		$	42,623		$	10,283		$	3,661		$	39,872		$	13,351		$	109,790
Company’s equity interest in investment		$	49,963		$	5,008		$	1,394		$	(824	)	$	14,078		$	69,619
Basis differences		(5,443		)	(1,289		)	(683		)	10,594			4,015			7,194
Carrying value of the Company’s investment		$	44,520		$	3,719		$	711		$	9,770		$	18,093		$	76,813
________________________________
Note: Investments in unconsolidated entities consist of our noncontrolling interest in certain properties. Multiplying each financial statement line item by the associated ownership percentage and adding those amounts to consolidated totals may not accurately depict the legal and economic implications of holding a noncontrolling interest in an investee entity.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 8



Same Store Analysis
(in thousands, except property count and percentages)

	Three Months Ended											Twelve Months Ended
Same Store NOI:	31-Dec-16			31-Dec-15			Favorable/ (Unfavorable)					31-Dec-16			31-Dec-15			Favorable/ (Unfavorable)
Revenues:
Total revenue	$	50,999		$	50,665		$	334				$	188,228		$	190,059		$	(1,831	)
Less: Lease termination fees	(106		)	(783		)	677					(1,443		)	(3,471		)	2,028
	50,893			49,882			1,011			2.0	%	186,785			186,588			197			—
Expenses:
Property operating expenses (less tenant improvement demolition costs)	14,633			14,810			177			1.2	%	53,337			52,782			(555		)	(1.1	)%
Real estate taxes	7,344			5,826			(1,518		)	(26.1	)%	27,786			25,069			(2,717		)	(10.8	)%
Property management fees	161			170			9			5.3	%	517			3,208			2,691			83.9	%
Property expenses	22,138			20,806			(1,332		)	(6.4	)%	81,640			81,059			(581		)	(0.7	)%
Same Store NOI - consolidated properties	28,755			29,076			(321		)	(1.1	)%	105,145			105,529			(384		)	(0.4	)%
Same Store NOI - unconsolidated properties (at ownership %)	3,657			3,550			107			3.0	%	10,273			9,736			537			5.5	%
Same Store NOI	$	32,412		$	32,626		$	(214	)	(0.7	)%	$	115,418		$	115,265		$	153		0.1	%

Same Store Cash NOI:
Same Store NOI - consolidated properties	$	28,755		$	29,076		$	(321	)			$	105,145		$	105,529		$	(384	)
Less:
Straight-line rent revenue adjustment	(1,529		)	(2,973		)	1,444					(4,951		)	(6,187		)	1,236
Above- and below-market rent amortization	(960		)	(1,292		)	332					(3,357		)	(5,486		)	2,129
Same Store Cash NOI - consolidated properties	26,266			24,811			1,455			5.9	%	96,837			93,856			2,981			3.2	%
Same Store Cash NOI - unconsolidated properties (at ownership %)	3,523			3,115			408			13.1	%	9,264			8,787			477			5.4	%
Same Store Cash NOI	$	29,789		$	27,926		$	1,863		6.7	%	$	106,101		$	102,643		$	3,458		3.4	%

Occupancy % at period end (% owned)	90.8		%	91.3		%						91.2		%	91.9		%

Operating properties (1)	25											20
Rentable square feet (% owned)	8,638											7,805

Reconciliation of net loss to Same Store NOI and Same Store Cash NOI:
Net loss	$	(6,341	)	$	(11,256	)						$	(29,453	)	$	(34,163	)
Adjustments:
Interest expense	8,565			12,707								43,257			57,454
Asset impairment losses	—			—								8,977			132
Tenant improvement demolition costs	277			45								722			358
General and administrative	4,755			5,569								19,490			22,740
BHT Advisors termination fee and HPT Management buyout fee	—			—								—			10,301
Tender offer and listing costs	—			(27		)						—			5,526
Amortization of restricted shares and units	1,041			3,371								4,159			4,975
Straight-line rent expense adjustment	—			—								—			(81		)
Acquisition expense	—			21								—			1,480
Real estate depreciation and amortization	23,771			29,910								111,122			122,230
Depreciation and amortization of non-real estate assets	85			272								708			501
Interest and other income	(303		)	(257		)						(1,169		)	(810		)
Loss on early extinguishment of debt	—			24								—			21,502
Provision for income taxes	188			209								655			1,507
Equity in operations of investments	(685		)	(3,829		)						(2,569		)	(3,982		)
Income from discontinued operations	—			(17		)						—			(1,407		)
Gain on sale of discontinued operations	—			(297		)						—			(15,383		)
Gain (loss) on sale of assets	(650		)	2								(22,176		)	(44,477		)
Net operating income of non-same store properties	(1,842		)	(6,588		)						(27,135		)	(39,403		)
Lease termination fees	(106		)	(783		)						(1,443		)	(3,471		)
Same Store NOI of unconsolidated properties (at ownership %)	3,657			3,550								10,273			9,736
Same Store NOI	32,412			32,626								115,418			115,265
Straight-line rent revenue adjustment	(1,529		)	(2,973		)						(4,951		)	(6,187		)
Above- and below-market rent amortization	(960		)	(1,292		)						(3,357		)	(5,486		)
Cash NOI adjustments for unconsolidated properties (at ownership %)	(134		)	(435		)						(1,009		)	(949		)
Same Store Cash NOI	$	29,789		$	27,926							$	106,101		$	102,643

(1) Excludes properties held for sale and certain operating properties that were not owned or not fully operational during the entirety of the comparable periods.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 9



Schedule of Properties Owned
as of December 31, 2016
(in thousands, except average effective and estimated market rent $/RSF and percentages)

		Rentable SF (100%)	Rentable SF (own %)			Average Effective Rent (own %)		Average Effective Rent $/RSF (own %)		Estimated Market Rent $/RSF (own %)				% Average Effective Rent (own %)
				Occupancy % (own%)								% of NRA (own %)
Property (% owned, if not 100%)	Location			Occupancy % (own%)								% of NRA (own %)
Terrace Office Park	Austin, TX	619	619	93.7	%	$	20,988	$	36.19	$	43.71	6.9	%	9.5	%
Domain 3	Austin, TX	179	179	100.0	%	5,508		$	30.77	$	38.30	2.0	%	2.5	%
Domain 4	Austin, TX	153	153	100.0	%	4,716		$	30.82	$	38.30	1.7	%	2.1	%
Domain 7 (49.84%) (1)	Austin, TX	222	111	100.0	%	4,504		$	40.70	$	42.50	1.2	%	2.0	%
Domain 2 (49.84%) (1)	Austin, TX	115	57	100.0	%	2,410		$	42.05	$	46.90	0.6	%	1.1	%
Austin		1,288	1,119	96.5	%	38,126		$	35.30	$	42.09	12.4	%	17.2	%

5950 Sherry Lane	Dallas, TX	197	197	87.8	%	6,468		$	37.39	$	38.50	2.2	%	2.9	%
Burnett Plaza	Fort Worth, TX	1,025	1,025	86.0	%	16,152		$	18.33	$	23.50	11.4	%	7.3	%
Centreport Office Center	Fort Worth, TX	133	133	100.0	%	2,820		$	21.20	$	22.15	1.5	%	1.3	%
Dallas/Fort Worth		1,355	1,355	87.6	%	25,440		$	21.43	$	25.53	15.1	%	11.5	%

Loop Central	Houston, TX	575	575	83.3	%	11,832		$	24.70	$	26.00	6.4	%	5.3	%
One & Two Eldridge Place	Houston, TX	519	519	92.7	%	15,624		$	32.48	$	36.25	5.8	%	7.0	%
One BriarLake Plaza	Houston, TX	502	502	94.6	%	19,008		$	40.02	$	42.75	5.6	%	8.6	%
Two BriarLake Plaza	Houston, TX	333	333	67.9	%	9,624		$	42.58	$	44.42	3.7	%	4.3	%
Three Eldridge Place	Houston, TX	305	305	80.3	%	9,924		$	40.51	$	40.51	3.4	%	4.5	%
Houston		2,234	2,234	85.3	%	66,012		$	34.63	$	36.81	24.9	%	29.8	%

Bank of America Plaza	Charlotte, NC	891	891	91.8	%	20,520		$	25.09	$	32.50	9.9	%	9.3	%
Charlotte		891	891	91.8	%	20,520		$	25.09	$	32.50	9.9	%	9.3	%

Buena Vista Plaza (2)	Burbank, CA	115	115	100.0	%	4,340		$	37.74	$	42.12	1.3	%	1.9	%
Los Angeles		115	115	100.0	%	4,340		$	37.74	$	42.12	1.3	%	1.9	%

Forum Office Park	Louisville, KY	328	328	97.6	%	5,784		$	18.08	$	18.00	3.6	%	2.6	%
One Oxmoor Place (3)	Louisville, KY	135	135	99.3	%	3,036		$	22.66	$	22.00	1.5	%	1.4	%
Steeplechase Place (3)	Louisville, KY	77	77	80.5	%	1,080		$	17.42	$	17.50	0.9	%	0.5	%
Lakeview (3)	Louisville, KY	76	76	82.9	%	1,272		$	20.19	$	19.25	0.8	%	0.6	%
Hunnington (3)	Louisville, KY	62	62	85.5	%	1,020		$	19.25	$	17.50	0.7	%	0.5	%
Louisville		678	678	93.2	%	12,192		$	19.29	$	18.88	7.5	%	5.5	%

Plaza at MetroCenter	Nashville, TN	361	361	90.9	%	5,712		$	17.41	$	18.75	4.0	%	2.6	%
Nashville		361	361	90.9	%	5,712		$	17.41	$	18.75	4.0	%	2.6	%

Eisenhower I	Tampa, FL	130	130	100.0	%	3,552		$	27.32	$	28.00	1.4	%	1.6	%
Tampa		130	130	100.0	%	3,552		$	27.32	$	28.00	1.4	%	1.6	%

500 East Pratt	Baltimore, MD	280	280	92.9	%	8,016		$	30.83	$	32.50	3.1	%	3.6	%
Woodcrest Corporate Center	Cherry Hill, NJ	333	333	99.1	%	8,304		$	25.16	$	21.50	3.7	%	3.7	%
111 Woodcrest	Cherry Hill, NJ	53	53	84.9	%	984		$	21.87	$	16.00	0.6	%	0.4	%
Wanamaker Building (60%) (4)	Philadelphia, PA	1,390	834	97.4	%	14,652		$	18.05	$	20.24	9.3	%	6.6	%
Three Parkway	Philadelphia, PA	561	561	84.8	%	12,000		$	25.21	$	25.50	6.2	%	5.4	%
1325 G Street (10%)	Washington, D.C.	307	31	74.2	%	1,303		$	55.93	$	52.00	0.3	%	0.6	%
Colorado Building (10%)	Washington, D.C.	128	13	84.6	%	511		$	45.24	$	54.00	0.1	%	0.2	%
Other operating office properties		3,052	2,105	93.0	%	45,770		$	23.39	$	23.83	23.5	%	20.6	%
Total operating office properties		10,104	8,988	90.7	%	$	221,664	$	27.19	$	30.14	100.0	%	100.0	%

Non-operating property
Fifth Third Center (5)	Columbus, OH	331	331	55.4	%
Total Properties		10,435	9,319

Development Property
Domain 8 (50%)	Austin, TX	291	146	95.1	%

(1) Subsequent to December 31, 2016, we acquired the remaining 50.16% interest in these properties.
(2) This property was sold subsequent to December 31, 2016.
(3) This property is held for sale as of December 31, 2016.
(4) Subsequent to December 31, 2016, we sold substantially all of our investment in this property.
(5) The non-recourse loan on Fifth Third Center is currently in default and we are working with the lender to dispose of this property on their behalf.

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	4th Quarter Page 10



Portfolio Analysis
For the Three Months Ended and
as of December 31, 2016


	Number of	Number of	Net Rentable	Commenced		% of		NOI			% of
Metro Area	Properties	Buildings	Area (000's)	% SF Leased		NRA		($000’s)			NOI

Austin, TX	5	8	1,119	96.5	%	12.4	%	$	5,922		18.0	%
Dallas/Fort Worth, TX	3	4	1,355	87.6	%	15.1	%	3,629			11.1	%
Houston, TX	5	8	2,234	85.3	%	24.9	%	9,109			27.7	%
Charlotte, NC	1	1	891	91.8	%	9.9	%	3,626			11.0	%
Los Angeles, CA	1	1	115	100.0	%	1.3	%	833			2.5	%
Louisville, KY	5	8	678	93.2	%	7.5	%	1,676			5.1	%
Nashville, TN	1	3	361	90.9	%	4.0	%	775			2.4	%
Tampa, FL	1	1	130	100.0	%	1.4	%	687			2.1	%
Other Markets	7	7	2,105	93.0	%	23.5	%	6,609			20.1	%

Total	29	41	8,988	90.7	%	100.0	%	32,866			100.0	%

Reconciliation to NOI (Consolidated):
Less NOI from Unconsolidated Operating Properties								(3,530		)
Plus NOI from Consolidated Non-Operating Properties (includes all properties sold prior to December 31, 2016)								1,090
NOI (Consolidated) (3)								$	30,426

Notes:
(1) Analysis relates to operating properties owned at the end of the most recent period only.
(2) Amounts reflect TIER REIT’s ownership %.
(3) NOI is a non-GAAP performance measure. A calculation of NOI is presented on page 2.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 11



Components of Net Asset Value
(in thousands, except percentages)

		Annualized Three Months Ended
		31-Dec-16
Consolidated total revenue		$	216,300
	Less:
	GAAP rent adjustments	(9,424		)
	Lease termination fees	(424		)
		206,452
Consolidated total property operating expenses		(94,596		)
Adjusted cash NOI (1)		111,856
	Adjustments:
	Adjusted cash NOI from unconsolidated real estate assets, at ownership share	14,004
	Adjusted cash NOI from sold properties, at ownership share	(1,543		)
	Adjusted cash NOI from land and development properties, at ownership share (2)	204
Total adjusted cash NOI at ownership share (3)		$	124,521

		31-Dec-16
Other real estate properties
	Cost basis of land and development properties, at ownership share (2)	$	103,666

Other tangible assets
	Cash and cash equivalents	$	14,884
	Restricted cash	7,509
	Accounts receivable, net (excluding $67,436 of straight-line rent receivable)	4,023
	Prepaid expenses and other assets	25,305
Total other tangible assets		$	51,721

Liabilities
	Mortgage debt	$	200,131
	Unsecured term loans and revolving credit facility	634,000
	Accrued and other liabilities	98,355
	Ownership share of unconsolidated mortgage debt	109,790
Total liabilities		$	1,042,276

Total common shares, restricted stock, and restricted stock units outstanding		47,870


(1)	Includes approximately $9.6 million of adjusted cash NOI related to two non-stabilized properties (Burnett Plaza and Two BriarLake Plaza). At stabilization these properties are expected to generate adjusted cash NOI of approximately $21.0 million.
(2)	Includes Third + Shoal, Legacy Land, Domain Blocks B, C, D, & G, and Domain 8 development, at ownership share.
(3)	Comprised of adjusted cash NOI from the following markets: Austin – 16%, Dallas – 7%, Houston – 29%, Charlotte – 11%, Los Angeles – 3%, Louisville – 6%, Nashville – 2%, Tampa – 2%, Washington, D.C. – 1%, Baltimore – 4%, Cherry Hill – 5%, Philadelphia – 11%, Columbus - 3%



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 12



Significant Tenants
December 31, 2016
(In thousands, except percentages and years)

	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					Square Feet Leased				Moody’s / S&P Credit Rating
Amoco	$	12,871	6	%	329	4	%	1.6	A2 / A-
Bank of America	9,123		4	%	409	5	%	2.4	Baa1 / BBB+
GSA	8,897		4	%	400	5	%	4.5	U.S. Government
Apache Corporation	8,346		4	%	210	3	%	7.8	Baa3 / BBB
GM Financial	7,364		3	%	319	4	%	9.1	Ba1 / BBB-
Samsung Engineering America Inc.	7,105		3	%	161	2	%	9.9	NR
Universal Pegasus International	5,481		2	%	218	3	%	3.3	NR
McDermott, Inc.	5,263		2	%	169	2	%	4.1	B1 / B+
Drexel University	4,903		2	%	191	2	%	6.1	NR
Blackbaud, Inc.	4,492		2	%	133	1	%	6.8	NR
Disney Enterprises, Inc.	4,154		2	%	114	1	%	9.2	A2 / A
Xerox Corporation	3,780		2	%	151	2	%	3.7	Baa3 / BBB-
E.R. Squibb and Sons, LLC	3,553		2	%	130	2	%	7.5	A2 / A+
Vinson & Elkins LLP	3,541		1	%	88	1	%	5.0	NR
SCOR Global Life	3,467		1	%	140	2	%	11.6	NR / AA-
Total of largest 15 tenants	$	92,340	40	%	3,162	39	%	5.6
Total all tenants	$	230,464			8,153			5.7

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	4th Quarter Page 13

Industry Diversification (by square foot)

As of December 31, 2016



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 %.
“Other” includes ten industry classifications.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 14



Leasing Activity Summary
For the Three Months Ended
December 31, 2016

		Occupancy								Occupancy			Cash						Straight-lined
	Rentable SF (000’s)	%		SF (000’s)	Activity for the Quarter (SF 000’s)					SF (000’s)	%		Net Rent /SF				% Increase of Cash Net Rent		Net Rent /SF				% Increase of SL Net Rent
Market	Rentable SF (000’s)	30-Sep-16		30-Sep-16	Expiring		Renewals	Expansions	New	31-Dec-16	31-Dec-16		Expiring		Activity		% Increase of Cash Net Rent		Expiring		Activity		% Increase of SL Net Rent
Austin	1,119	96.1	%	1,075	(59	)	19	25	20	1,080	96.5	%	$	20.07	$	23.88	19	%	$	19.21	$	24.55	28	%
Dallas/Fort Worth	1,355	87.1	%	1,180	(49	)	28	15	13	1,187	87.6	%	$	13.63	$	15.58	14	%	$	13.44	$	15.24	13	%
Houston	2,234	84.9	%	1,896	(11	)	7	—	14	1,906	85.3	%	$	28.29	$	25.02	(12	)%	$	25.66	$	24.18	(6	)%
Charlotte	891	91.2	%	813	(3	)	3	—	5	818	91.8	%	$	17.40	$	25.60	47	%	$	17.21	$	27.33	59	%
Los Angeles	115	99.1	%	114	—		—	1	—	115	100.0	%	$	30.40	$	22.97	(24	)%	$	26.80	$	28.44	6	%
Louisville	678	92.5	%	627	(24	)	23	—	6	632	93.2	%	$	14.39	$	11.89	(17	)%	$	13.21	$	12.46	(6	)%
Nashville	361	89.2	%	322	(33	)	33	3	3	328	90.9	%	$	10.33	$	9.48	(8	)%	$	9.26	$	10.20	10	%
Tampa	130	100.0	%	130	—		—	—	—	130	100.0	%	$	—	$	—	—	%	$	—	$	—	—	%
Other operating office properties	2,105	93.3	%	1,964	(50	)	27	4	12	1,957	93.0	%	$	19.81	$	18.05	(9	)%	$	18.45	$	19.93	8	%
Total	8,988	90.4	%	8,121	(229	)	140	48	73	8,153	90.7	%	$	17.01	$	17.68	4	%	$	16.03	$	18.29	14	%

	End of Period												Cash						Straight-lined
	End of Period	Occupancy								Occupancy			Net Rent /SF				% Increase of Cash Net Rent		Net Rent /SF				% Increase of SL Net Rent
Year-To-Date Summary	NRA (000's)	%		SF (000's)	Expiring		Renewals	Expansions	New	SF (000's)	%		Expiring		Activity		% Increase of Cash Net Rent		Expiring		Activity		% Increase of SL Net Rent
Q1 Activity	10,419	89.4	%	9,313	(513	)	271	70	121	9,262	88.9	%	$	14.94	$	15.90	6	%	$	13.66	$	15.12	11	%
Q2 Activity	9,378	90.6	%	8,501	(212	)	61	35	97	8,482	90.4	%	$	17.26	$	18.10	5	%	$	15.90	$	18.15	14	%
Q3 Activity	9,039	90.7	%	8,200	(342	)	82	58	123	8,121	89.8	%	$	15.68	$	16.85	7	%	$	14.88	$	17.87	20	%
Q4 Activity	8,988	90.4	%	8,121	(229	)	140	48	73	8,153	90.7	%	$	17.01	$	17.68	4	%	$	16.03	$	18.29	14	%
					(1,296	)	554	211	414				$	15.94	$	16.87	6	%	$	14.82	$	16.93	14	%



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 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	4th Quarter Page 15



Leasing Rate Activity Summary
For the Three Months Ended
December 31, 2016

	Renewals											Expansions											New
		Cash					Straight-lined						Cash					Straight-lined						Cash					Straight-lined
	SF (000’s)	Net Rent /SF					Net Rent /SF					SF (000’s)	Net Rent /SF					Net Rent /SF					SF (000’s)	Net Rent /SF					Net Rent /SF
Markets	SF (000’s)	Expiring		Activity			Expiring		Activity			SF (000’s)	Expiring		Activity			Expiring		Activity			SF (000’s)	Expiring		Activity			Expiring		Activity
Austin	19	$	20.36	$	23.42		$	18.23	$	24.35		25	$	18.27	$	20.92		$	18.27	$	22.08		20	$	22.12	$	28.07		$	21.42	$	27.89
Dallas/Fort Worth	28	$	17.23	$	17.51		$	17.09	$	17.63		15	$	—	$	8.35		$	—	$	7.62		13	$	21.96	$	19.83		$	21.43	$	18.98
Houston	7	$	28.00	$	24.00		$	27.68	$	24.00		—	$	—	$	—		$	—	$	—		14	$	20.36	$	18.39		$	17.31	$	17.36
Charlotte	3	$	28.14	$	28.00		$	27.05	$	30.60		—	$	—	$	—		$	—	$	—		5	$	10.64	$	24.09		$	11.01	$	25.11
Los Angeles	—	$	—	$	—		$	—	$	—		1	$	30.40	$	22.97		$	26.80	$	28.44		—	$	—	$	—		$	—	$	—
Louisville	23	$	15.72	$	12.01		$	14.28	$	12.77		—	$	—	$	—		$	—	$	—		6	$	9.28	$	11.40		$	9.14	$	11.16
Nashville	33	$	10.29	$	9.43		$	9.02	$	10.17		3	$	9.99	$	9.35		$	9.99	$	9.98		3	$	11.03	$	10.10		$	11.03	$	10.60
Tampa	—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—		—	$	—	$	—		$	—	$	—
Other operating office properties	27	$	21.59	$	17.27		$	19.61	$	19.48		4	$	15.14	$	15.80		$	16.56	$	16.27		12	$	16.93	$	20.47		$	16.07	$	22.03
Total	140	$	17.38	$	16.01		$	16.11	$	16.94		48	$	12.04	$	15.88		$	12.08	$	16.46		73	$	18.60	$	21.11		$	17.61	$	21.04
Percentage increase (decrease)				(8		)%			5		%				32		%			36		%				13		%			19		%

Year-To-Date Summary:
Q1 Activity	271	$	12.65	$	14.30		$	11.75	$	13.34		70	$	15.22	$	13.55		$	12.56	$	12.96		121	$	19.91	$	20.87		$	18.56	$	20.23
Q2 Activity	61	$	16.45	$	15.01		$	15.37	$	15.62		35	$	20.03	$	19.66		$	17.59	$	17.96		97	$	16.87	$	19.48		$	15.69	$	19.83
Q3 Activity	82	$	14.51	$	15.30		$	14.08	$	16.25		58	$	15.06	$	14.25		$	12.16	$	13.90		123	$	16.69	$	19.14		$	16.63	$	20.82
Q4 Activity	140	$	17.38	$	16.01		$	16.11	$	16.94		48	$	12.04	$	15.88		$	12.08	$	16.46		73	$	18.60	$	21.11		$	17.61	$	21.04
	554	$	14.54	$	14.96		$	13.60	$	14.93		211	$	15.25	$	15.29		$	13.17	$	14.84		414	$	18.01	$	20.07		$	17.15	$	20.46
Percentage increase (decrease)				3		%			10		%				—		%			13		%				11		%			19		%


Notes:
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 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	4th Quarter Page 16



Lease Expirations
For Four Quarters From January 1, 2017
(In thousands, except per SF data)

	Market	Month to Month		1Q'17			2Q'17		3Q'17		4Q'17		Grand Total

	By Square Foot
	Austin	—		3			36		51		—		90
	Dallas/Fort Worth	1		—			25		111		3		140
	Houston	—		29			147		25		11		212
	Charlotte	—		—			18		2		1		21
	Los Angeles	—		—			—		—		—		—
	Louisville	2		14			20		10		—		46
	Nashville	1		9			—		8		2		20
	Tampa	—		—			—		—		—		—
	Other operating office properties	3		6			6		34		20		69
	Total	7		61			252		241		37		598

	By Annualized Expiring Rentals
	Austin	$	—	$	—		$	1,346	$	1,805	$	—	$	3,151
	Dallas/Fort Worth	12		—			720		2,579		112		3,423
	Houston	1		999			5,618		627		278		7,523
	Charlotte	4		28			587		64		26		709
	Los Angeles	13		—			—		—		—		13
	Louisville	49		292			352		220		—		913
	Nashville	14		149			—		148		40		351
	Tampa	—		—			—		—		—		—
	Other operating office properties	18		165			204		795		817		1,999
	Total	$	111	$	1,633	��	$	8,827	$	6,238	$	1,273	$	18,082

	By Expiring Rent Per SF
	Austin	$	—	$	—		$	37.76	$	34.89	$	—	$	34.77
	Dallas/Fort Worth	$	9.71	$	—		$	28.40	$	23.55	$	37.34	$	24.60
	Houston	$	—	$	35.11		$	38.40	$	24.53	$	24.34	$	35.53
	Charlotte	$	—	$	63.79		$	33.31	$	29.46	$	32.40	$	33.71
	Los Angeles	$	—	$	—		$	—	$	—	$	—	$	—
	Louisville	$	21.93	$	20.93		$	17.35	$	21.15	$	—	$	19.48
	Nashville	$	22.32	$	15.86		$	—	$	19.89	$	19.00	$	17.94
	Tampa	$	—	$	—		$	—	$	—	$	—	$	—
	Other operating office properties	$	5.01	$	28.39		$	34.91	$	22.80	$	41.46	$	28.60
	Total	$	15.86	$	26.77		$	35.03	$	25.88	$	34.41	$	30.24


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.
2Q’17 excludes $1.1 million of annualized expiring rent related to Wanamaker Building parking management agreement (0 SF leased)



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 17



Lease Expirations
Annually From January 1, 2017
(In thousands, except percentage and per SF data)


	Market	2017			2018			2019			2020			2021			2022			2023			2024			2025			2026			2027+			Grand Total
	By Square Foot
	Austin	90			111			101			116			64			171			211			116			3			89			6			1,080
	Dallas/Fort Worth	140			194			105			79			74			36			144			15			—			369			33			1,187
	Houston	212			39			315			287			255			123			68			272			55			252			29			1,906
	Charlotte	21			12			405			15			36			8			81			37			8			4			191			818
	Los Angeles	—			—			4			—			—			—			—			—			—			111			—			115
	Louisville	46			20			117			87			10			150			—			14			169			15			5			632
	Nashville	20			4			3			2			59			14			—			4			22			—			200			328
	Tampa	—			—			—			—			—			—			—			130			—			—			—			130
	Other operating office properties	69			26			136			417			162			158			295			55			61			68			507			1,957
	Total	598			406			1,186			1,003			660			660			799			643			318			908			971			8,153
	As a % of Occupied SF	7		%	5		%	15		%	12		%	8		%	8		%	10		%	8		%	4		%	11		%	12		%	100		%
	As a % of Total NRA	7		%	5		%	13		%	11		%	7		%	7		%	9		%	7		%	4		%	10		%	11		%	91		%

	By Annualized Expiring Rentals
	Austin	$	3,151		$	3,825		$	4,190		$	4,706		$	2,831		$	7,309		$	8,313		$	4,963		$	149		$	4,309		$	115		$	43,861
	Dallas/Fort Worth	3,423			4,857			2,681			2,979			2,849			938			4,268			409			—			10,376			872			33,652
	Houston	7,523			1,548			12,755			9,468			9,060			4,135			2,761			11,906			1,834			10,752			748			72,490
	Charlotte	709			472			9,432			492			1,354			272			2,958			551			423			199			6,440			23,302
	Los Angeles	13			—			192			—			—			—			—			—			—			5,371			—			5,576
	Louisville	913			387			2,451			1,706			225			3,127			—			316			3,419			383			133			13,060
	Nashville	351			66			67			40			1,193			295			—			87			534			—			4,627			7,260
	Tampa	—			—			—			—			—			—			—			4,469			—			—			—			4,469
	Other operating office properties	1,999			507			3,653			11,780			4,330			4,937			8,859			1,432			2,127			2,357			9,126			51,107
	Total	$	18,082		$	11,662		$	35,421		$	31,171		$	21,842		$	21,013		$	27,159		$	24,133		$	8,486		$	33,747		$	22,061		$	254,777
	As a % of Total Annualized Expiring Rentals	7		%	5		%	14		%	12		%	9		%	8		%	11		%	9		%	3		%	13		%	9		%	100		%

	By Expiring Rent Per SF
	Austin	$	34.77		$	34.39		$	41.50		$	40.46		$	44.58		$	42.86		$	39.34		$	42.78		$	45.04		$	48.09		$	17.99		$	40.62
	Dallas/Fort Worth	$	24.60		$	25.04		$	25.52		$	37.51		$	38.60		$	25.91		$	29.70		$	27.71		$	—		$	28.14		$	26.81		$	28.34
	Houston	$	35.53		$	39.25		$	40.40		$	32.97		$	35.52		$	33.55		$	40.58		$	43.84		$	33.94		$	42.66		$	26.51		$	38.03
	Charlotte	$	33.71		$	38.91		$	23.28		$	33.78		$	36.74		$	36.77		$	36.47		$	15.01		$	51.80		$	52.84		$	33.80		$	28.51
	Los Angeles	$	—		$	—		$	44.64		$	—		$	—		$	—		$	—		$	—		$	—		$	48.47		$	—		$	48.43
	Louisville	$	19.48		$	20.39		$	21.06		$	19.79		$	21.24		$	20.78		$	—		$	22.88		$	20.06		$	26.34		$	28.34		$	20.63
	Nashville	$	17.94		$	18.00		$	20.50		$	20.36		$	20.53		$	21.37		$	—		$	21.04		$	23.81		$	—		$	23.14		$	22.20
	Tampa	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	34.35		$	—		$	—		$	—		$	34.35
	Other operating office properties	$	—		$	19.07		$	26.71		$	28.16		$	26.79		$	31.16		$	29.96		$	25.87		$	35.07		$	35.28		$	17.98		$	26.11
	Total	$	30.24		$	28.72		$	29.87		$	31.08		$	33.09		$	31.84		$	33.99		$	37.53		$	26.69		$	37.17		$	22.72		$	31.25

	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.
	2017 excludes $1.1 million of annualized expiring rent related to Wanamaker Building parking management agreement (0 SF leased)



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 18



Occupancy Trends



	Rentable SF (000’s)
	Rentable SF (000’s)	Occupancy %
Market	31-Dec-16	31-Dec-16		30-Sep-16		30-Jun-16		31-Mar-16		31-Dec-15

Austin	1,119	96.5	%	96.1	%	95.9	%	94.1	%	94.5	%
Dallas/Fort Worth	1,355	87.6	%	87.1	%	86.9	%	84.1	%	86.4	%
Houston	2,234	85.3	%	84.9	%	87.4	%	86.5	%	87.9	%
Charlotte	891	91.8	%	91.2	%	89.7	%	89.5	%	87.8	%
Los Angeles	115	100.0	%	99.1	%	99.1	%	99.1	%	99.1	%
Louisville	678	93.2	%	92.5	%	93.5	%	94.0	%	95.4	%
Nashville	361	90.9	%	89.2	%	93.1	%	92.0	%	92.8	%
Tampa	130	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Other operating office properties	2,105	93.0	%	93.3	%	94.3	%	96.6	%	95.6	%
Total	8,988	90.7	%	90.4	%	91.2	%	90.9	%	91.4	%




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	4th Quarter Page 19



Leasing Cost Summary
For the Three Months Ended
December 31, 2016


			Weighted Average Leasing Costs
	SF (000’s)	Wtd Avg Term (Yrs)	Per Square Foot						Per Square Foot / Year
Renewal	SF (000’s)	Wtd Avg Term (Yrs)	Comms		TI & Other		Total		Comms		TI & Other		Total
Market
Austin	19	4.7	$	11.05	$	13.20	$	24.25	$	2.35	$	2.81	$	5.16
Dallas/Fort Worth	28	3.1	$	7.30	$	6.36	$	13.66	$	2.00	$	1.83	$	3.83
Houston	7	1.0	$	—	$	—	$	—	$	—	$	—	$	—
Charlotte	3	10.0	$	—	$	5.00	$	5.00	$	—	$	0.50	$	0.50
Los Angeles	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Louisville	23	5.1	$	4.22	$	13.46	$	17.68	$	0.82	$	2.59	$	3.41
Nashville	33	7.6	$	1.99	$	13.53	$	15.52	$	0.26	$	1.78	$	2.04
Tampa	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Other operating office properties	27	6.5	$	10.98	$	37.01	$	47.99	$	1.68	$	5.67	$	7.35
Total	140	5.4	$	6.24	$	15.71	$	21.95	$	1.15	$	2.90	$	4.05

Expansion
Market
Austin	25	6.7	$	9.68	$	23.41	$	33.09	$	1.49	$	3.61	$	5.10
Dallas/Fort Worth	15	9.8	$	14.21	$	16.13	$	30.34	$	1.45	$	1.65	$	3.10
Houston	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Charlotte	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Los Angeles	1	9.3	$	7.62	$	40.00	$	47.62	$	0.82	$	4.30	$	5.12
Louisville	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Nashville	3	5.0	$	1.92	$	11.75	$	13.67	$	0.38	$	2.35	$	2.73
Tampa	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Other operating office properties	4	6.7	$	9.58	$	29.56	$	39.14	$	1.44	$	4.45	$	5.89
Total	48	7.6	$	10.56	$	21.26	$	31.82	$	1.39	$	2.80	$	4.19

New
Market
Austin	20	4.9	$	9.12	$	34.03	$	43.15	$	1.86	$	6.94	$	8.81
Dallas/Fort Worth	13	3.9	$	8.05	$	12.32	$	20.37	$	2.02	$	3.43	$	5.45
Houston	14	8.2	$	18.98	$	39.95	$	58.93	$	1.65	$	3.47	$	5.12
Charlotte	5	7.5	$	15.99	$	57.12	$	73.11	$	2.13	$	7.62	$	9.75
Los Angeles	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Louisville	6	7.5	$	1.05	$	5.67	$	6.72	$	0.44	$	0.78	$	1.22
Nashville	3	3.0	$	3.60	$	11.00	$	14.60	$	1.20	$	3.67	$	4.87
Tampa	—	—	$	—	$	—	$	—	$	—	$	—	$	—
Other operating office properties	12	9.5	$	14.79	$	56.57	$	71.36	$	1.57	$	5.99	$	7.55
Total	73	6.4	$	11.33	$	33.31	$	44.64	$	1.77	$	5.20	$	6.97
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	4th Quarter Page 20



Leasing Cost Trend Analysis


	Three Months Ended		Three Months Ended		Three Months Ended		Three Months Ended		Year to Date		Year Ended		Year Ended
	31-Dec-16		30-Sep-16		30-Jun-16		31-Mar-16		31-Dec-16		31-Dec-15		31-Dec-14
Renewal Leasing
Square Feet (in thousands)	140		82		61		271		554		1,052		1,298
Weighted Average Term (in years)	5.4		5.0		4.5		2.9		4.0		6.8		5.7
Commissions per SF	$	6.24	$	3.80	$	5.97	$	3.48	$	4.50	$	7.13	$	4.68
TI and Other Leasing Cost per SF	15.71		6.94		13.11		6.76		9.74		18.72		4.62
Total Leasing Cost per SF	$	21.95	$	10.74	$	19.08	$	10.24	$	14.24	$	25.85	$	9.30

Commissions per SF per Year	$	1.15	$	0.76	$	1.31	$	1.18	$	1.12	$	1.07	$	0.93
TI and Other Leasing Cost per SF per Year	2.90		1.40		2.89		2.31		2.39		2.70		0.74
Total Leasing Cost per SF per Year	$	4.05	$	2.16	$	4.20	$	3.49	$	3.51	$	3.77	$	1.67

Expansion Leasing
Square Feet (in thousands)	48		58		35		70		211		246		264
Weighted Average Term (in years)	7.6		9.4		3.5		8.2		7.6		6.3		6.6
Commissions per SF	$	10.56	$	14.04	$	6.72	$	12.87	$	11.65	$	8.73	$	9.41
TI and Other Leasing Cost per SF	21.26		19.64		10.36		7.39		14.40		24.07		21.39
Total Leasing Cost per SF	$	31.82	$	33.68	$	17.08	$	20.26	$	26.05	$	32.80	$	30.80

Commissions per SF per Year	$	1.39	$	1.49	$	1.94	$	1.56	$	1.57	$	1.41	$	1.41
TI and Other Leasing Cost per SF per Year	2.80		2.08		3.00		0.90		2.00		3.91		3.11
Total Leasing Cost per SF per Year	$	4.19	$	3.57	$	4.94	$	2.46	$	3.57	$	5.32	$	4.52

New Leasing
Square Feet (in thousands)	73		123		97		121		414		480		927
Weighted Average Term (in years)	6.4		7.0		6.3		7.3		6.8		8.0		8.4
Commissions per SF	$	11.33	$	13.95	$	12.42	$	10.90	$	12.24	$	12.91	$	12.15
TI and Other Leasing Cost per SF	33.31		27.97		25.63		26.74		28.00		40.55		36.28
Total Leasing Cost per SF	$	44.64	$	41.92	$	38.05	$	37.64	$	40.24	$	53.46	$	48.43

Commissions per SF per Year	$	1.77	$	2.00	$	1.97	$	1.50	$	1.81	$	1.60	$	1.45
TI and Other Leasing Cost per SF per Year	5.20		4.00		4.06		3.68		4.13		5.05		4.34
Total Leasing Cost per SF per Year	$	6.97	$	6.00	$	6.03	$	5.18	$	5.94	$	6.65	$	5.79

Total Leasing
Square Feet (in thousands)	261		263		193		462		1,179		1,778		2,489
Weighted Average Term (in years)	6.1		6.9		5.2		4.9		5.6		7.1		6.8
Commissions per SF	$	8.46	$	10.80	$	9.35	$	6.85	$	8.50	$	8.92	$	7.96
TI and Other Leasing Cost per SF	21.65		19.58		18.90		12.09		16.99		25.35		18.19
Total Leasing Cost per SF	$	30.11	$	30.38	$	28.25	$	18.94	$	25.49	$	34.27	$	26.15

Commissions per SF per Year	$	1.39	$	1.56	$	1.79	$	1.41	$	1.50	$	1.26	$	1.18
TI and Other Leasing Cost per SF per Year	3.55		2.84		3.61		2.48		3.01		3.50		2.33
Total Leasing Cost per SF per Year	$	4.94	$	4.40	$	5.40	$	3.89	$	4.51	$	4.76	$	3.51

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	4th Quarter Page 21



	Development, Leasing, and
	Capital Expenditures Summary
	(in thousands)


		For the Three Months Ended
		31-Dec-16		30-Sep-16		30-Jun-16		31-Mar-16		31-Dec-15

	Recurring capital expenditures
	Leasing costs	$	7,369	$	4,636	$	8,119	$	7,168	$	8,297
	Building improvements	3,533		620		3,256		2,185		2,816
	Subtotal recurring capital expenditures	10,902		5,256		11,375		9,353		11,113

	Non-recurring capital expenditures
	Building improvements (1)	465		152		596		600		1,185
	Leasing costs (2)	2,167		1,268		3,240		3,547		3,258
	Development (3)	11,703		11,425		17,180		1,409		1,790
	Redevelopment (4)	4,565		5,940		4,424		1,028		298
	Subtotal non-recurring capital expenditures	18,900		18,785		25,440		6,584		6,531

	Total capital expenditures	$	29,802	$	24,041	$	36,815	$	15,937	$	17,644

Notes:
All amounts represent TIER REIT’s ownership %.
Beginning in 2016, leasing costs reimbursed to us by tenants when tenant improvement allowances have been exceeded are excluded from the above amounts.

(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 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 were as follows:
		$	—	$	632	$	1,814	$	992	$	455
(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	4th Quarter Page 22

Potential Future Development Sites

December 31, 2016

Approximate

Rentable

Square Feet

Month of

Acquisition

Cost Basis

(in millions)

Project

Market (submarket)

Acres

Comments

Burnett Plaza

Fort Worth
(CBD)

1.4

N/A

Jan-07

3.3

Planned mixed-use development and garage for use at Burnett Plaza

Eisenhower II

Tampa

5.2

130,000

Dec-07

1.7

Office building

��

Third + Shoal (95%) (1)

Austin
(CBD)

0.8

325,000

Jun-15

21.9

Office building

Legacy Land (95%) (1)

Dallas
(Plano - Legacy)

4.0

570,000

Jun-15

7.5

Office building(s)

Domain B (Domain 9 & Domain 10)

Austin
(Domain)

6.2

300,000-400,000

Jul-15

12.7

Office building(s)

Domain C (Domain 11 & Domain 12)

Austin
(Domain)

6.3

400,000-500,000

Jul-15

19.1

Office building(s)

Domain D & G

Austin
(Domain)

5.6

300,000-400,000

Jul-15

9.5

Office building

(1) We own 95% of this project, and the cost basis above represents 100%.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 23

Summary Development Activity

December 31, 2016

Start Date

Estimated Cost per SF

Square feet

(in thousands)

Shell Completion Date

Estimated Total Cost (in millions) (1)

Cost to Date (in millions) (1)

Project

Market

% Leased

Domain 8 (2)

Austin

291

95.1%

3Q’15

1Q’17

306

89.1

60.9

(1) Excludes basis adjustment of $4.0 million to date and $4.9 million estimated in total.

(2) We own 50% of this project, and the cost above represents 100%.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 24

Properties Under Development

Domain 8

Austin, Texas

(Rendering)

Property Description

Domain 8 is currently under development as a 12-story, Class A office building located within The Domain in Austin, Texas. When completed in first quarter 2017, it will offer 291,000 square feet of single-floor and multi-tenant arrangements with dramatic views of the surrounding Domain community and Texas Hill Country. Domain 8 was designed to achieve a minimum LEED Silver and Energy Star designations.

Property Highlights

The Domain is the epitome of upscale “live, work, play,” spread across 300 acres in Northwest Austin. The community currently includes 1.7 million square feet of office space that commands the highest Class A office rents in Austin outside the city’s CBD. In addition to office space, The Domain offers up to 4,000 apartment units, 1.8 million square feet of retail and 775 hotel rooms. Nestled among a full array of amenities and hike & bike trails, Domain 8 will offer onsite showers and locker room and direct elevator access to office floors from every garage level.

Property Facts



Submarket	The Domain
Floors	9 Floors Office Space/3 Floors Parking
Approximate Rentable SF	291,000
Estimated Operating Expenses per SF	$14.85
Estimated Shell Delivery Date	1Q’17
Estimated Project Cost at Completion (1)	$89,100,000
Percentage Owned	50	%
Percentage Leased	95.1	%

(1) Excludes $4.9 million basis adjustment.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 25



Acquisition and Disposition Activities
For the Twelve Months Ended December 31, 2016




		Number of Properties	Square Feet (in thousands)	Transaction Date	Price (in thousands)
Acquisitions	Location	Number of Properties	Square Feet (in thousands)	Transaction Date	Price (in thousands)

None

Dispositions

Lawson Commons	St. Paul, MN	1	436	3/1/2016	$	68,430
FOUR40 (1)	Chicago, IL	1	1,041	6/17/2016	$	191,000
Hurstbourne Business Center	Louisville, KY	3	418	9/30/2016	$	41,000
801 Thompson	Rockville, MD	1	51	10/27/2016	$	4,900
		6	1,946



(1) The Company is entitled to an additional payment of up to $12.5 million subject to future performance of this property.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 26



Summary of Financing
December 31, 2016
(in thousands, except percentages and number of years)

					Principal			Weighted Average Effective Interest Rate	% of Total
Fixed Rate Debt
Secured mortgage debt					$	200,131		6.11%	24%
Unsecured term loans (1)					525,000			3.46%	63%
Total fixed rate debt					725,131			4.19%	87%

Variable Rate Debt
Unsecured term loan (1)					50,000			2.30%	6%
Unsecured revolving credit facility (2)					59,000			2.30%	7%
Total variable rate debt					109,000			2.30%	13%
Total debt (3)					834,131			3.94%	100%
unamortized debt issuance costs (4)					(7,348		)
Total notes payable, net					$	826,783

(1) The borrowing rate under $525.0 million of the term loans has been effectively fixed through the use of interest rate hedges. The remaining portion is variable rate.
(2) Additional borrowings of $164.5 million were available under the credit facility.
(3) We have a non-recourse loan in default which subjects us to incur default interest at a rate that is 500 basis points higher than the stated interest rate which results in an overall effective weighted average interest rate of 4.24%.
(4) Excludes $2.4 million of unamortized debt issuance costs associated with the revolving line of credit because those costs are presented as an asset on our consolidated balance sheet.

	Maturities
	Secured Mortgage Debt				Unsecured Revolving Credit Facility and Term Loans				Total				Annual % Maturing
	Principal			Rate (1)	Principal			Rate (1)	Principal			Rate (1)	Annual % Maturing
2017	$	106,977		5.87%	$	—		—	$	106,977		5.87%	13%
2018	—			—	59,000			2.30%	59,000			2.30%	7%
2019	—			—	300,000			3.08%	300,000			3.08%	36%
2020	—			—	—			—	—			—	—
2021	93,154			6.38%	—			—	93,154			6.38%	11%
Thereafter	—			—	275,000			3.67%	275,000			3.67%	33%
Total debt	$	200,131			$	634,000			834,131			3.94%
unamortized debt issuance costs									(7,348		)
Total notes payable, net									$	826,783
Weighted average maturity in years	2.2				4.0				3.6

(1) Represents weighted average effective 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)	Annual % Maturing
2017	$	106,977		5.87%	$	—		—	$	106,977		5.87%	11%
2018	59,000			2.30%	13,351			2.86%	72,351			2.40%	8%
2019	300,000			3.08%	39,872			2.46%	339,872			3.00%	36%
2020	—			—	13,944			2.40%	13,944			2.40%	1%
2021	93,154			6.38%	—			—	93,154			6.38%	10%
Thereafter	275,000			3.67%	42,623			3.88%	317,623			3.70%	34%
Total debt	834,131				109,790				943,921			3.84%
unamortized debt issuance costs	(7,348		)		(1,025		)		(8,373		)
Total notes payable, net	$	826,783			$	108,765			$	935,548
Weighted average maturity in years	3.6				3.9				3.6

(1) Represents weighted average effective interest rate for debt maturing in this period.

Hedging Details:
Type/Description	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	4th Quarter Page 27



	Principal Payments by Year
	as of December 31, 2016
	(in thousands, except percentages)
			Stated Interest Rate		Effective Interest Rate
		Maturity	Stated Interest Rate		Effective Interest Rate		Total			2017			2018			2019			2020			2021			Thereafter

Fifth Third Center		1-Jul-16	6.09	%	6.17	%	$	48,177		$	48,177		$	—		$	—		$	—		$	—		$	—
500 E. Pratt (1)		1-May-17	5.55	%	5.63	%	58,800			58,800			—			—			—			—			—
Unsecured - Revolving Line of Credit		18-Dec-18	2.27	%	2.30	%	59,000			—			59,000			—			—			—			—
Unsecured - Term Loan		18-Dec-19	3.03	%	3.08	%	300,000			—			—			300,000			—			—			—
One BriarLake Plaza - mezzanine		1-Aug-21	9.80	%	9.94	%	14,567			110			121			134			144			14,058			—
One BriarLake Plaza		1-Aug-21	5.65	%	5.72	%	78,587			1,411			1,501			1,589			1,670			72,416			—
Unsecured - Term Loan		30-Jun-22	3.62	%	3.67	%	275,000			—			—			—			—			—			275,000
Total			3.89	%	3.94	%	834,131			$	108,498		$	60,622		$	301,723		$	1,814		$	86,474		$	275,000
unamortized debt issuance costs (2)							(7,348		)
Consolidated notes payable, net							$	826,783

Notes associated with investments in unconsolidated entities and excluded from the consolidated balance above (at ownership share):
Wanamaker Building - office (60%) (3)		7-Feb-23	3.83	%	3.88	%	42,623			937			974			1,013			1,049			1,049			37,601
1325 G Street (10%)		30-Jun-20	2.37	%	2.40	%	10,283			—			—			—			10,283			—			—
Colorado Building (10%)		30-Jun-20	2.37	%	2.40	%	3,661			—			—			—			3,661			—			—
Domain 2 & 7 (49.84%) (4)		28-Apr-19	2.42	%	2.46	%	39,872			—			—			39,872			—			—			—
Domain 8 (50%)		28-Aug-18	2.82	%	2.86	%	13,351			—			13,351			—			—			—			—
Total			3.01	%	3.05	%	109,790			$	937		$	14,325		$	40,885		$	14,993		$	1,049		$	37,601
unamortized debt issuance costs							(1,025		)
Total unconsolidated notes payable, net							$	108,765

Total notes payable			3.79	%	3.84	%	943,921			$	109,435		$	74,947		$	342,608		$	16,807		$	87,523		$	312,601
unamortized debt issuance costs							(8,373		)
Total notes payable, net							$	935,548

% of principal payments due by year							100		%	12		%	8		%	36		%	2		%	9		%	33		%



(1)	This loan was repaid subsequent to quarter end.
(2)	Excludes $2.4 million of unamortized debt issuance costs associated with the revolving line of credit because those costs are presented as an asset on our consolidated balance sheet.
(3)	Subsequent to December 31, 2016, we sold substantially all of our investment in this property.
(4)	Subsequent to December 31, 2016, we acquired the remaining 50.16% interest in these properties and assumed the associated remaining outstanding debt.



Supplemental Operating and Financial Data	TIER REIT	4th 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 that 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, excluding certain items. The items excluded relate to certain non-operating activities or certain non-recurring activities that may 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 as indicators 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 non-GAAP measurements and should be reviewed in connection with other GAAP measurements. Our FFO and FFO, excluding certain items, 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 interpret it differently, or that identify and exclude different items related to non-operating activities or certain non-recurring activities.

Net Operating Income (NOI)

NOI is a non-GAAP financial measure equal to rental revenue, less property operating expenses, 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 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. 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 NOI and Same Store Cash NOI

Same Store 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 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 operating office properties not held for sale and owned and operated for the entirety of both periods being compared and include our comparable ownership percentage in each period for properties in which we own an unconsolidated interest that is accounted for using the equity method. We view Same Store 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 properties owned and operated for the entirety of both periods being compared and therefore eliminate variations caused by acquisitions or dispositions during such periods.

Same Store NOI and Same Store Cash NOI presented by us may not be comparable to Same Store NOI or Same Store Cash NOI reported by other REITs that do not define Same Store NOI or Same Store Cash NOI exactly as we do. We believe that in order to facilitate a clear understanding



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 29

of our operating results, Same Store 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 NOI and Same Store Cash NOI should not be considered as an indicator of our ability to make distributions, as alternatives to net income (loss) as an indication of our performance, or as a measure of cash flows or liquidity.

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.

We also evaluate Normalized EBITDA, which is EBITDA excluding certain revenues and operating expenses. The items excluded relate to certain non-operating activities or certain non-recurring activities that create significant EBITDA volatility. Further, we evaluate Normalized Estimated Full Period EBITDA, which is EBITDA excluding certain revenues and operating expenses and adjusted to show the pro forma impact of properties that were either acquired or disposed during the period. We believe it is useful to evaluate EBITDA excluding these items and as adjusted for property acquisitions and dispositions because it provides useful information in analyzing comparability between reporting periods and in assessing the sustainability of our operating performance.



Supplemental Operating and Financial Data	TIER REIT	4th Quarter Page 30

Tier Reit (TIER) Inactive 8-KResults of Operations and Financial Condition