1200 4TH AVE CREATIVE OFFICE INVESTMENT OPPORTUNITY FOR SALE DOWNTOWN SAN DIEGO

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1 FOR SALE TH AVE DOWNTOWN SAN DIEGO CREATIVE OFFICE INVESTMENT OPPORTUNITY PAUL LAFRENZ Senior Vice President O: M: Lic. No TIM COWDEN Senior Vice President O: M: Lic. No TH AVE DOWNTOWN SAN DIEGO 1

2 MUST SEE HIGH-TECH COLLABORATIVE BUILDING THE OFFERING Colliers International is pleased to offer for sale th Ave, a two-story, single-tenant office building located in the heart of San Diego, California. The building is being extensively renovated to a cutting edge open floor plan creative office space that is highly desirable to today s high-tech oriented companies. INVESTMENT SUMMARY Price: $17,686,000 CAP Rate: 5.5% NOI $972,744 NNN (2019 ) Building Size: ± 22,486 SF Land Size: 9,519 SF Year Renovated 2018 Lease Expiration: April 30, 2030 Zoning: CCBD-CORE TH AVE DOWNTOWN SAN DIEGO 2

3 SAN DIEGO BAY N. HARBOR DRIVE C HWY. HWY. RD W. IVY STREET PACIFIC HWY. IVY ST DOWNTOWN SAN DIEGO STREET MAP SAN DIEGO BAY WATERFRONT PARK N. HARBOR DRIVE W. HAWTHORN STREET W. HAWTHORN ST ASH STREET PACIFIC GATEWAY PROJECT PACIFIC HWY. GRAPE STREET GRAPE STREET FIR STREET FIR STREET LITTLE ITALY KETTNER BOULEVARD KETTNER BOULEVARD INDIA STREET INDIA STREET COLUMBIA STREET COLUMBIA STREET BROADWAY STATE STREET STATE STREET UNION STREET UNION STREET STATE COURT FRONT STREET BROADWAY LEGAL CORRIDOR STATE COURT FED. COURT FRONT STREET FED. BLDG. 1ST AVE 2ND AVE CITY HALL COMPLEX 5 B STREET C STREET BROADWAY E STREET HORTON PLAZA F STREET G STREET 3RD AVE 4TH AVE 5TH AVE B STREET C STREET E STREET F STREET G STREET 6TH AVE CORTEZ HILL ASH STREET th Ave B Steet Financial Corridor 9TH AVE A STREET 10TH AVE 11TH AVE PARK BLVD SAN DIEGO CITY COLLEGE SAN DIEGO CITY COLLEGE EAST VILLAGE BALBOA PARK 16TH STREET 16TH ST 17TH STREET 17TH ST 5 BALBO PARK 19TH STREET 19TH ST 20TH STREET 20TH ST 1 mile MARKET STREET E HARBOR DRIVE SAN DIEGO CONVENTION CENTER MARKET STREET ISLAND AVE GASLAMP DISTRICT PETCO PARK TH AVE DOWNTOWN SAN DIEGO 3

4 DOWNTOWN FROM SOUTHWEST TH TH AVE DOWNTOWN SAN DIEGO 4

5 PLENTIFUL PARKING IN NEARBY GARAGES HORTON PLAZA GARAGE CITY GARAGE TH AVE 6TH & ASH GARAGE TH AVE DOWNTOWN SAN DIEGO 5

6 PROPERTY DESCRIPTION Building Address: Site/Location: Net Rentable Area: th Ave The property is located at the prime corner of 4th Avenue and B Street at the intersection of the B Street Financial corridor, the city of San Diego Government complex, and near the Gaslamp Entertainment District. ±22,486 SF (2nd Floor: 9,072 SF, 1st Floor: 8,700 SF, Basement: 4,714 SF) Land Area: ±9,519 Square Feet Stories: 2 stories plus basement % Leased: 100% Leased to a single Tenant for 12 years Assessor s Parcel No.: Construction Type: Ceiling Heights: Elevators/Stairway Access: HVAC: Restrooms: Utilities: Steel frame, steel reinforced masonry, light weight concrete floors 1st floor approx. 15 feet, 2nd floor, approx. 12 feet, Basement approx 10 feet Two (2) hydraulic passenger elevators, one (1) freight elevator connecting sidewalk to basement, two (2) internal stairwells. All new HVAC units supply heating and cooling throughout the building Total of 4 restrooms, new construction Men s and Women s restrooms on both 1st and 2nd floors Electricity/Gas: San Diego Gas & Electric Water: City of San Diego Police & Fire: City of San Diego TH AVE DOWNTOWN SAN DIEGO 6

7 LEASE SUMMARY Tenant Size The property has been leased to the website division of Recovery Brands, a subsidiary of American Addiction Centers, Inc. (NYSE: AAC ) The lease is guaranteed by the parent company American Addiction Centers. Approximately 22,486 Square Feet Lease Term 12 years, expiring April 30, 2030 Lease Term Extension Options Two (2), 5 year options to renew at market rental rates 2019 Net Operating Income (NOI) $972,744 NNN Annual Increases Expenses 3% per year on each May 1st Completely net, including tenant maintenance of roof Lease Years Monthly Annual Rent Per SF Rent Per SF 5/1/18 to 4/30/19 $78,701 $3.50 $944,412 $ /1/19 to 4/30/20 $81,062 $3.61 $972,744 $ /1/20 to 4/30/21 $83,494 $3.71 $1,001,927 $ /1/21 to 4/30/22 $85,999 $3.82 $1,031,984 $ /1/22 to 4/30/23 $88,579 $3.94 $1,062,944 $ /1/23 to 4/30/24 $91,236 $4.06 $1,094,832 $ /1/24 to 4/30/25 $93,973 $4.18 $1,127,677 $ /1/25 to 4/30/26 $96,792 $4.30 $1,161,508 $ /1/26 to 4/30/27 $99,696 $4.43 $1,196,353 $ /1/27 to 4/30/28 $102,687 $4.57 $1,232,243 $ /1/28 to 4/30/29 $105,768 $4.70 $1,269,211 $ /1/29 to 4/30/30 $108,941 $4.84 $1,307,287 $ TH AVE DOWNTOWN SAN DIEGO 7

8 FLOORPLAN 1ST FLOOR pantry open staff lounge copy/print vault (e) 40' x 7' men's women's elev equip room elevator white board white board elevator bike storage elec room conference 2 15' x 10' white board pod [2] x 6 wkstns pods [3] x 4 wkstns sales mngr 13' x 11' executive 4 13' x 12' 4th Avenue conference 1 16' x 23' meeting 1 10' x 12' open collaborative 2 wkstns feature wall reception executive 1 11' x 13' executive 2 11' x 13' executive 3 11' x 13' coffee bar B Street TH AVE DOWNTOWN SAN DIEGO 8

9 FLOORPLAN 2ND FLOOR white board all-hands flex space 29' x 35' copy/print coffee bar janitor (e) wh existing exterior patio elevator elevator white board women's men's white board pods [6] x 6 wkstns white board 4th Avenue meeting 2 12' x 10' executive 8 (e) 12' x 21' meeting 3 12' x 10' conference 3 15' x 13' executive 5 (e) 14' x 13' executive 6 (e) 17' x 13' executive 7 (e) 17' x 13' B Street TH AVE DOWNTOWN SAN DIEGO 9

10 FLOORPLAN BASEMENT elevator elev equip room 4th Avenue equipment room (e) server (e) 10' x 11' elevator elev equip room B Street TH AVE DOWNTOWN SAN DIEGO 10

11 DOWNTOWN FROM NORTHEAST TH TH AVE DOWNTOWN SAN DIEGO 11

12 TENANT OVERVIEW Location: th Avenue is the home for the national website support team for Recovery Brands, LLC. The employees at this location are internet software and code writers. The tenant improvements are built to a very high standard to attract today s highly sought-after internet website designers. The company located this team in downtown San Diego to enhance their ability to attract the kind of staff that are prevalent in the west coast enclaves of San Diego, San Francisco and Silicon Valley. Mission: Recovery Brands, LLC mission is to provide individuals and their loved ones with comprehensive online third-party resources so they can identify the best treatment options for substance use, behavioral addictions, and mental health disorders. The occupants of this building create and manage the third party online website to facilitate matching patients with suitable treatment facilities around the country. What We Do: Recovery Brands, LLC s business is twofold, aiming to reach both those in need of treatment and those who can help. They provide resources to millions of consumers searching for addiction treatment online while simultaneously offering digital tools to help treatment providers showcase their brands to foster transparent, ethical connections. Consumers: Recovery Brands, LLC s portfolio of authority websites, including Rehabs.com, Recovery.org, DrugAbuse.com, and ProjectKnow.com, have supported countless families in pursuing the life-saving path of recovery. Treatment Directories: They work with treatment providers to update their directories with the current facility-specific details and information. When looking for treatment options, you can easily compare and select facilities that meet your recovery needs. Our Story: In July 2015, Recovery Brands, LLC, was acquired as a subsidiary by American Addiction Centers, Inc. ( AAC ). Since joining the AAC family, Recovery Brands sites continue to provide robust, meaningful resources which support their mission TH AVE DOWNTOWN SAN DIEGO 12

13 MARKET OVERVIEW DOWNTOWN SAN DIEGO OFFICE INVENTORY Total speculative inventory 10.5 million square feet in 59 buildings, with another 3.7 million square feet of government owned buildings. TENANT MIX The CBD s tenant base encompasses a diverse range of industries, including many prominent financial services and law firms, city, county, state and federal government entities, and a wide array of service sector companies. Numerous internet services companies are located in and expanding rapidly, adding a significant energetic dynamic to. Examples of these companies are Mitek Systems, Underground Elephant, Jacob Tyler, Red Door Interactive, Zeeto Media, 3Q Digital, AAC, WeWork and Redhorse. HEALTHY OFFICE MARKET The downtown San Diego Office market is healthy with an effective vacancy of 10% and rental rates that have spiked 25% over the last two years. Effective Vacancy is calculated by removing blocks of space that are effectively not available to occupy within the next 12 months. Possible reasons are: (a) space that has been committed to tenants but is not yet occupied, (b) buildings that are under heavy renovation and thereby undeliverable, and (c) buildings that have problematic ownership that makes them all but impossible to lease. Despite recent rental rate increases office space in downtown San Diego is still inexpensive when compared to the top tier San Diego suburban markets and high quality markets in other west coast cities. This relative affordability when combined with the ability to live, work, and play within walking distance has made downtown San Diego a preferred office destination for rapidly expanding internet-related tenants. These companies are in an arms race to attract the best talent among coders and software writers. These companies can afford to pay much higher rents than other tenants if that is what it takes to obtain the right kind of creative office space that attracts this talent. NO NEW SPECULATIVE OFFICE CONSTRUCTION There is only one office building slated for construction in the foreseeable future, 150,000 square feet as a portion of the Ritz Carlton mixed-use project at 7th and Market, with a planned completion of rental rates need to rise by over 40% to justify additional new construction. For these reasons the inventory of office space is essentially fixed for the next 2-4+ years. CREATIVE OFFICE SPACE Creative office space, generally defined as open ceilings and open floor plans, often incorporating design elements such as exposed beams, brick walls and high ceilings, is in very short supply and tenants are paying a premium for it. There are a number of class B and class C buildings that have signed leases with rental rates that are higher than some of the class A buildings. Many of the creative tenants would rather be in a shorter creative building than a highrise building and they are willing to pay a premium to get it. Creative space has become so popular that many conventional, non-tech, firms now desire it as well. This property with its central location at 4th Avenue and B Street is in the middle of downtown and no more than a 15 minute walk to all the amenities San Diego has to offer. This location enables its occupants live, work and play within walking distance TH AVE DOWNTOWN SAN DIEGO 13

14 MARKET OVERVIEW DOWNTOWN SAN DIEGO REPOSITIONING OF TH AVENUE The building, originally built as a high-security bank facility, has been extensively renovated during 2018 into a highly desirable creative office building. The renovations included adding ground floor windows, a new side walk, new ground floor glass entryways, new HVAC units and ducting, new restrooms and elevator renovations. The office space with its high exposed beam and ducting ceilings, open airy floorplans and exposed masonry and steel structure reflect the type workspace that every creative firm craves when competing for today s highest quality tech personnel TH AVE DOWNTOWN SAN DIEGO 14

15 Q DOWNTOWN OFFICE SATISTICS BY CLASS Building Class # of Bldgs. Total Rentable Size Lease Rate Per Month Class A 20 7,350,475 $2.45-$4.75 Class B 29 2,777,933 $2.20-$4.00 Class C ,498 $1.80-$3.25 TOTALS 59 10,524,906 $3.02 Lease rates are quoted as per square foot per month on a full service basis. VIEW OF DOWNTOWN FROM NORTH TH TH AVE DOWNTOWN SAN DIEGO 15

16 Q DOWNTOWN PROJECTIONS Building Class Starting Rents Annual Increases Effective Rents Concessions Effective Vacancy Class A Up by 8%-10% 3.5% Moderate Increase Class B Up by 10%-12% 3.5% Moderate Increase Free Rent Going Away Free Rent Going Away Decrease to 8% Decrease to 10% TH AVE DOWNTOWN SAN DIEGO 16

17 NEIGHBORHOOD DEVELOPMENT PROJECTS Hanover Development 4th Ave 450 B Street Development th Ave B St Edith Sanyo Tower Development Overture Development 3rd Ave C St TH AVE DOWNTOWN SAN DIEGO 17

18 NEIGHBORHOOD DEVELOPMENT PROJECTS Overture Residential 40-story tower with 282 apartments, 11,000 square feet of retail and a 325 space garage occupying the southern half of the block bordered by B and C Streets and 3rd and 4th Avenues. Being developed by Sloan Capital Partners. Estimated to begin construction in early B Pavilion Three-story 48,500 square foot Class A office building to replace the existing Bank of America bank branch and mezzanine. The project will incorporate a street-level patio with coffee carts and other amenities between the 450 B Street Tower and the Pavilion. Estimated to begin construction in late Overture Tower th Ave 4th Ave C St B St Edith Sanyo Tower Edith Sanyo, the largest single home builder in Japan, has purchased the 15,000 square foot parcel of land at the southwest corner of 4th Avenue and B Street. They are planning to build a 19-story, 245 room hotel above a 3-story, 45,000 square foot office building to accommodate their North American headquarters. Construction date to be determined th Ave Edith Sanyo Tower Hanover Development 17 story, 230 unit apartment tower, estimated construction TH AVE DOWNTOWN SAN DIEGO 18

19 DOWNTOWN SALE COMPARABLES RD AVE Date of sale: 11/2/2017 Size: 2,632 SF Price: $1,650,000 Price/SF: $626/SF Parking: 3.8/1000 SF CAP Rate: N/A TH AVE Date of sale: 4/30/2018 Size: 3,176 SF Price: $1,900,000 Price/SF: $598/SF Parking: 2.96/1000 SF CAP Rate: N/A TH AVE Date of sale: 2/1/2018 Size: 6,624 SF Price: $3,075,000 Price/SF: $464/SF Parking: 2 surface spaces CAP Rate: 4.89% TH ST Date of sale: 7/6/2017 Size: 26,443 SF Price: $11,400,000 Price/SF: $431/SF Parking: 300 free covered spaces CAP Rate: 6.00% 406 9TH AVE Date of sale: 3/6/2017 Size: 22,500 SF Price: $13,300,000 Price/SF: $591/SF Parking: 10.0/1000 SF CAP Rate: 4.56% TH AVE Date of sale: 9/1/2017 Size: 313,103 SF Price: $207,000,000 Price/SF: $661/SF Parking: 4.0/1000 SF CAP Rate: N/A TH AVE DOWNTOWN SAN DIEGO 19

20 DOWNTOWN SALE COMPARABLES TH ST Date of sale: 11/6/2017 Size: 1,350 SF Price: $850,000 Price/SF: $629/SF Parking: 2.22/1000 SF CAP Rate: N/A TH ST Date of sale: 9/28/2017 Size: 9,000 SF Price: $3,500,000 Price/SF: $388/SF Parking: 10 free surface spaces CAP Rate: 5.00% TH ST Date of sale: 3/26/2018 Size: 1,340 SF Price: $815,000 Price/SF: $608/SF Parking: 2.0/1000 SF CAP Rate: 3.10% B ST Date of sale: 8/23/2017 Size: 250,181 SF Price: $57,700,000 Price/SF: $230/SF Parking: 0.67/1000 SF CAP Rate: 5.80% 600 B ST Date of sale: 8/30/2017 Size: 359,278 SF Price: $109,500,000 Price/SF: $304/SF Parking: 1.0/1000 SF CAP Rate: 5.60% 230 W CEDAR ST Date of sale: 10/4/2017 Size: 2,816 SF Price: $1,800,000 Price/SF: $639/SF Parking: 0.71/1000 CAP Rate: N/A TH AVE DOWNTOWN SAN DIEGO 20

21 DOWNTOWN SALE COMPARABLES COLUMBIA ST Date of sale: 2/12/2018 Size: 2,400 SF Price: $1,700,000 Price/SF: $708/SF Parking: 8 free surface spaces CAP Rate: N/A INDIA ST Date of sale: 1/26/2018 Size: 5,000 SF Price: $4,150,000 Price/SF: $830/SF Parking: No parking CAP Rate: N/A 447 9TH AVE & 923 ISLAND AVE Date of sale: 5/9/2017 Size: 6,500 SF & 1,263 SF Price: $4,400,000 Price/SF: $566/SF Parking: 2 free surface spaces CAP Rate: 2.66% STATE ST Date of sale: 6/29/2018 Size: 29,100 SF Price: $15,000,000 Price/SF: $515/SF Parking: 1.72/1000 SF CAP Rate: N/A UNIVERSITY AVE Date of sale: 2/15/2017 Size: 5,240 SF Price: $2,200,000 Price/SF: $419/SF Parking: No parking CAP Rate: 5.50% W WASHINGTON ST Date of sale: 3/22/2018 Size: 2,772 SF Price: $2,100,000 Price/SF: $757/SF Parking: 3 free surface spaces CAP Rate: N/A TH AVE DOWNTOWN SAN DIEGO 21

22 COMPS STATISTICS Low Average Median High Count OFFICE Sale Price $815,000 $40,951,500 $7,600,000 $207,000, RBA 1,340 SF 98,548 SF 12,838 SF 359,278 SF 10 Price per SF $ $ $ $ Actual Cap Rate 3.10% 4.77% 5.08% 5.80% 4 GENERAL RETAIL Sale Price $1,700,000 $4,065,625 $3,287,500 $11,400,000 8 Center Size 2,400 SF 8,155 SF 5,932 SF 26,443 SF 8 Price per SF $ $ $ $ Actual Cap Rate 2.66% 4.81% 5.00% 6.00% TH AVE DOWNTOWN SAN DIEGO 22

23 DOWNTOWN LEASE COMPARABLES Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF NBC Tower 225 Broadway, Ste 420 Class A Office 346,000 SF Bask Digital Media The Irvine Company 4, months 6/1/2017 8/1/2019 2/28/2024 $2.73 $2.96 $683,760 $ % per Annum 2 Professional & Bus Services Comments: Rent increases 4.55 per year. # Portico India St Retail 6,878 SF Choicebox, LLC Penhun Limited Partnership & Lyda Cohen months 4/10/2018 8/10/2018 8/9/2023 $3.75 $3.94 Triple Net $215,833 $ % per Annum 7.27 Food & Beverage Manufacturing Comments: Street Level Retail - Little Italy Neighborhood # Brunswig Building 363 5th Ave., Ste 205 Class B Office 40,000 SF Roesling Nakamura Terada Architecture Shickry Properties 9, months 8/1/2018 8/1/2018 4/30/2024 $3.17 $ Utilites Renewal $2,281,769 $ % per Annum Professional & Bus Services Comments: Renewal. # The Brunswig Bldg 363 5th Ave, Ste 106 Class B Office 40,000 SF Socks Shickry Properties, LLC 2, months 9/1/2017 7/1/2018 6/30/2023 $4.78 $5.17 Triple Net Renewal $618,885 $0.00 4% per annum Professional & Bus Services Comments: 1,715 SF of retail space and 712 SF of storage space. NNN's $0.47/SF/Mo. # Brunswig Building 363 5th Avenue, Ste 104 Class B Office 40,000 SF Wine Bank Shickry Properties 5, months 1/11/2018 7/1/2018 6/30/2023 $4.78 $5.17 Triple Net Renewal $651,029 $0.00 4% per annum Retail Comments: Renewal and expansion into 1,667 SF of ground floor retail space and 4,074 SF of basement space. Ground floor rate $4.78 NNN, basement starting rate at $0.50/SF/MO with the same 4% escalator. # TH AVE DOWNTOWN SAN DIEGO 23

24 DOWNTOWN LEASE COMPARABLES Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF 501 West Broadway 501 W Broadway, Ste 1610 San Diego, CA Class A Office 394,031 SF Cozen and O'Connor The Irvine Company LLC 10, months 10/23/2017 7/1/2018 6/30/2023 $2.90 $3.13 $1,935,467 $ month free 4.5% per Annum Legal Services Comments: # Market Street Retail 9,650 SF Handel's Ice Cream Kim Family Trust 1, months 11/10/2017 5/10/2018 5/9/2023 $6.50 $6.74 Triple Net $611,857 $ months free 0% yr 2; 3% yrs 3-5 Comments: Street Level Retail - Gaslamp Neighborhood # II Palazzo 2021 India St Storefront 6,532 SF Mikkeller Brewery Arvanni Properties, LLC months 10/24/2017 4/1/2018 3/31/2028 $4.00 $4.59 Triple Net $480,298 $ months free 3% per annum Brewery Comments: Street Level Retail - Little Italy Neighborhood. # First Allied Plaza 655 Broadway W, Ste 1650 Class A Office 376,703 SF The Canter Group Metlife Real Estate Investors 6, months 7/1/2017 1/1/2018 4/30/2023 $3.40 $3.50 $1,480,864 $ months free 4% per Annum 2.03 Financial, Real Estate & Insurance Comments: # One America Plaza 600 Broadway W, Ste 1150 Class A Office 623,000 SF Asec, Inc. The Irvine Company 3, months 9/11/2017 1/1/ /31/2018 $3.20 $3.20 $134,362 $0.00 0% per Annum 2 Comments: # TH AVE DOWNTOWN SAN DIEGO 24

25 DOWNTOWN LEASE COMPARABLES Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF 610 W Ash 610 W Ash St, Ste 1100 Class B Office 177,692 SF Citizens Business Bank West Ash Operating, LLC 3, months 12/1/ /1/2017 2/28/2023 $3.10 $3.16 $615,157 $ months free 3% per annum 2 Financial, Real Estate & Insurance Comments: # Westgate Hotel 200 Broadway Ave Retail 3,100 SF Verizon Wireless Westgate Hotel Company 3, months 12/1/ /1/ /30/2022 $4.75 $4.99 Modified Gross $928,140 $ months free 2.5% per annum Retail Comments: Street Level Retail - Core Business District Neighborhood # th Ave Storefront 2,496 SF Birkenstock Guy Gabriele 2, months 12/1/ /1/ /30/2022 $6.40 $6.68 Triple Net $969,354 $7.20 3% per annum Retail Comments: Street Level Retail - Gaslamp. Shoe store. Discounted rent in months 1-3 in lieu of tenant improvements. # th Ave Class C Office 3,000 SF Ike's Place 542 Fifth Ave, LLC 1, months 11/1/ /1/2017 3/31/2023 $7.41 $7.87 Triple Net $637,096 $ months free 3% per annum Restaurant Comments: Street Level Restaurant - Gaslamp. Fast casual sandwich restaurant. # Gaslamp Square th Ave, Ste 112P2 Storefront 54,773 SF Quiksilver HPC Gaslamp Square, LLC 3, months 10/1/ /1/2017 8/31/2022 $4.57 Triple Net - $ Retail Comments: Street Level Retail - Gaslamp. Relocation within building. Incomplete comp. # TH AVE DOWNTOWN SAN DIEGO 25

26 DOWNTOWN LEASE COMPARABLES Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF 701 Island 701 Island Ave Retail 20,000 SF Anytime Fitness JSW Pack Loft LP 3, months 8/23/2017 8/23/2017 8/22/2027 $3.33 $3.82 $1,619,527 $0.00 3% per annum Other Services Comments: Street Level Retail - Ballpark. # Corporate Center 550 W C St, Ste 2000 Class A Office 357,477 SF GH Investments LLC 550 Corporate Center Investments Group, Inc. 7, months 8/24/2017 8/21/ /14/2018 $3.25 $3.25 $322,595 $0.00 0% per Annum 2 Professional & Bus Services Comments: Expansion Lease. # Columbia Place 401 W A St, Ste 1500 Class A Office 553,715 SF iprospect Emmes Group of Companies 19, months 4/5/2017 7/4/2017 7/3/2025 $3.00 $3.24 $6,068,079 $ months free 3% per annum 1 Marketing Comments: Panoramic Bay Views. Shell space prior to TI's. Tenant relocating from 16,737 SF at La Jolla Centre II (UTC). Option to extend - One (1) Five (5) year term. Westgate Hotel Broadway Storefront Retail/Office 60,000 SF Zeglio Custom Clothiers Westgate Hotel Company months 7/1/2017 7/1/2017 6/30/2022 $4.25 $4.51 Modified Gross Sublease $189,420 $ % pre annum Retail # Comments: Street Level Retail/Core. # Westgate Hotel 220 E Broadway Restaurant 1,418 SF TGS Enterprise, LLC Grand American Hotel 1, months 2/17/2017 6/17/2017 6/17/2025 $4.75 $5.18 $646,608 $0.00 Fixed increases in year 4 and 6 Restaurant Comments: Street Level Restaurant/Core. Escalations: Year $4.75, Year 4 & 5 - $5.18, Year $5.49 # TH AVE DOWNTOWN SAN DIEGO 26

27 DOWNTOWN LEASE COMPARABLES Office and Retail Lease Comparables Date: September 21, 2018 Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF 1953 India St India St Storefront 9,800 SF Sprout 1953 Mick Neglia 7,500 6/1/2017 6/1/ $3.18 Triple Net Comments: Comp to get. Street Level Restaurant/Little Italy. # Columbia Place 401 W A St, Ste 1900 Class A Office 553,715 SF Wilson, Elser, Moskowits, Edelman & Dicker LLP Emmes Group of Companies 11, months 1/24/2017 6/1/2017 5/31/2027 $3.15 $3.65 $4,953,780 $ months free 4% per annum 1 Financial, Real Estate & Insurance Comments: # The Lofts 789 6th Ave Restaurant 7,180 SF Coin-Op Game Room HPE 789 6th Avenue LLC 7, months 5/1/2017 5/1/2017 4/30/2027 $3.50 $3.76 Triple Net $3,241,285-3% per annum Restaurant Comments: 550 Corporate Center 550 W C St, Ste 1155 Class A Office 357,477 SF Street Level Restaurant - Gaslamp. Includes 5 month equivalent rent abatement in the 1st year. Two consecutive 5-year option terms at fair market value at a rental rate not less than 3% of the previous year. Murray M. Helm Jr. and Kathryn B. Meadows 550 Corporate Center Investments Group, Inc. 2, months 7/10/2017 5/1/2017 6/30/2018 $3.00 $3.00 $111,216 $0.00 0% per Annum 2 Legal Services # Comments: # TH AVE DOWNTOWN SAN DIEGO 27

28 DOWNTOWN LEASE COMPARABLES Office and Retail Lease Comparables Date: September 21, 2018 Property Name Lessee SF Leased Initial Rent TI Allowance (/SF) Address Lease Term Effective Rent Concessions City/State/Zip Execution Date Lease Type Escalations Submarket Lessor Commencement Date Deal Type Parking Ratio Use/Class Expiration Date Total Consideration Industry Type Bldg SF NBC Tower 225 Broadway, Ste 2220 Class A Office 346,000 SF Robert Ball The Irvine Company 4, months 3/17/2017 4/1/2017 3/31/2022 $2.95 $3.23 Renewal $721,275 $ % per annum 2 Financial, Real Estate & Insurance Comments: # Columbia Place 401 W A St, Ste 2300/2400 Class A Office 553,715 SF Psyonix Emmes Realty Services of California LLC 39, months 9/1/2016 3/1/2017 8/31/2024 $3.15 $3.35 $11,272,527 $ months free 3.5% per annum 1 Consumer Products/Services Comments: DiamondView Tower th Ave, Ste 400 Class A Office 305,255 SF Video game developer - Rocket League. Great panoramic bay views, creative/innovative space with exposed, private balcony. Multiple building conference/meeting rooms with capacity of 100+ occupants and kitchen. Locker rooms with showers and secured bicycle storage on ground level Expansive terraces amenitized with hotel-style lounge seating, dining tables, WiFi & Bean Box Terrace, coffee cart. Terraces are available for reservation upon request. Fox Sports Net, Inc. Cruzan 15, months 2/1/2017 2/15/ /30/2022 $4.50 $4.39 Renewal - $ months free 3% per annum 4 Telecommunications # Comments: DiamondView Tower th Ave, Ste 1300 Class A Office 305,255 SF TI's are turnkey. The tenant will occupy temp space for the first month at a rate of $3.50 psf. Beginning in month two, the tenant will move into permanent space at $4.50 psfabatement from 6/1/ /10/2017 (4.32 month) Classy.org Cruzan/Monroe/CIGNA 17, months 2/1/2016 1/1/2017 6/30/2025 $4.45 $4.61 $8,069,434 $ months free 3% per annum 4 Technology # Comments: $1.4 Million dollar letter of credit # TH AVE DOWNTOWN SAN DIEGO 28

29 FOR SALE TH AVE SAN DIEGO CALIFORNIA CREATIVE OFFICE INVESTMENT OPPORTUNITY EXCLUSIVE ADVISORS: PAUL LAFRENZ Senior Vice President O: M: Lic. No TIM COWDEN Senior Vice President O: M: Lic. No COLLIERS INTERNATIONAL 4350 La Jolla Village Drive Suite 500 San Diego, CA TH AVE DOWNTOWN SAN DIEGO 29