Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

Education BA Economics – University of Virginia Masters City Planning + MS Engineering – UC Berkeley Work Contra Costa Transit (Concord, CA) - 4 years Service Planner Finance Manager City of Redmond – 5 years Long Range Planning Manager Microsoft – 15 years Campus planner Real estate account manager Director of Operations Director of Campus Development General Manager

Client requirements Market analysis Workplace strategy Portfolio strategy Design Construct - Lease - Integrate Employee services Facility operations Environmental mgmt Capital renewal

 Employee Satisfaction & Productivity  Cost per Housed Head, per Sq Meter  Square Meters per Housed Head  Customer-Partner Engagement (CPE)  Carbon Reduction  Process & Policy compliance  Cost management – New Normal  Generational & technological change  Globalization of R&D  Emerging market emphasis  Vendor maturation  Business HC changes PERFORMANCE MEASURES BUSINESS DRIVERS SCOPE METRICS (GLOBAL) FY11 ORGANIZATIONAL COMMITMENTS Susan Wagner TBH Mike DeMuro Jay Pittenger Gina Dyer Bob Kaplan Center of Excellence Workplace strategy Environmental Capital planning PER Governance Vendor management Communications IT systems Data governance Controls & compliance Government relations ROB management EMEAAmericasAsiaPuget Sound ORG STRUCTURE Typical sub-structure  Portfolio optimization  Drive Workplace Advantage globally  Vendor model upgrade & GTM  Grow collaboration with IT & HR  Global customer satisfaction measures  Strengthen Center of Excellence Area Manager Area Manager Area Manager Facility Manager Facility Manager Facility Manager Execution Regional Directors Brian Collins

Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

You’ve got to adapt to…. Client subcultures Vendor capability Standards of business conduct Teaming and collaboration challenges

Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

Microsoft Corp Real Estate (CRE) Overview Real estate as competitive differentiator Managing globally The New World of Work Leveraging buyer value creation Working in CRE (MSFT-style) Career Tips

46 Silicon Valley Campus – Lease/Vacant Comparison Pricing: $115,600,000 - $119,100,000 $463 - $476 p.s.f. Occupancy:  MSFT lease, 10 year term  Rent: $31.20 p.s.f.  Annual escalation: 3.0% Capital:  Tenant improv. allow: $45.00 p.s.f.  Leasing comm. Y1-5: 6% / Y6-10: 3%  Capital reserve: $0.20 p.s.f. / 3% escl Valuation assumptions:  Going-in cap rate: %  Un-levered return : %  Levered return: %  Residual value: 7.50%  Debt: 65% LTV / 5.5% rate/ 25Y Amort STABILIZED Key investor assumptions  Investor hold period for stabilized valuation is 10 years VACANT Pricing: $25,000,000 - $37,500,000 $100 - $150 p.s.f. This range is estimated for an average sub-market (Santa Clara) and building of average vintage (10-15 years) Pricing: $62,500,000 $250 p.s.f. This range is estimated for an above- average sub-market (Mountainview) and building of recent vintage (less than 10 years)

47 Central US - Campus lease renewal comparison Key investor assumptions  Valuation derived as of 1/1/2011, early lease renewal commencement date  Investor hold period for renewal valuation is 5 years Limited investor market for the property Pricing: $8,600,000 $71 p.s.f. Occupancy:  MSFT renews for 5 years  Market rent Y1-5: $13.00 PSF  Annual escalation: 2.0% Capital:  Capital reserve: $0.20 PSF / annum  Annual escalation 3.0% Valuation assumptions:  Going-in cap rate: 18.40%  Un-levered return : 6.00%  Levered return: n/a  Residual value: $20.00 p.s.f. RENEW Pricing: $2,500,000 $20 p.s.f. Occupancy:  MSFT vacates Capital:  Capital reserve: $0.20 PSF / annum Valuation assumptions:  Going-in cap rate: n/a  Un-levered return: n/a  Levered return: n/a  Residual rate: n/a VACATE Comparison to CBRE $11,000,000 value approach Upon lease expiration (8/13), CBRE assumed 50% probability that MSFT would sign an additional 5 year renewal (JLL assumed 0%) CBRE assumed $15.36 NNN p.s.f. rent through to 8/13 expiration (JLL assumed $13.00 NNN p.s.f.)

Why it’s GREAT Directly affects 125,000+ workers productivity - daily End-to-end business function BIG budget/asset responsibilities Tons of exposure to senior leaders Positive environmental impact And How it’s Hard Long term category in short term industry Everyone is a real estate expert Skills you’ll need in Microsoft CRE Financial acumen Program management Project manage Client relationship mgmt Vendor management Self-confidence & autonomy

Establish your working capital Deliver consistent strong results Make others better Demonstrate leadership at all levels Know yourself, define your futures Seek feedback from multiple sources Be self-aware on your needs, passions & capabilities Maintain a plan, and execute on it The more you know, the farther you’ll go Passion for technology Your profession The world around you – think exogenously! And…..have a networking strategy - be known

© 2010 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.