O N C O R I N T E R N A T I O N A L

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1 Keegan & Coppin Company, Inc. ONCOR International SONOMA COUNTY SUBMARKETS QUARTERLY NEWSLETTER 4th QUARTER INSIDE THIS ISSUE: Market Highlights Notable Transactions Vacancy Trends Business Parks Petaluma Rohnert Park/Cotati Santa Rosa North Corridor (Airport Area/Windsor) 1202 Apollo Way OFFICE LOCATIONS: Santa Rosa 1355 North Dutton Avenue Santa Rosa, CA (707) Petaluma 1201 N. McDowell Blvd. Petaluma, CA (707) Larkspur 101 Larkspur Landing Circle Larkspur, CA (415) Hembree Lane Napa 477 Devlin Road #104 Napa, CA (707) Sebastopol Road Check out our Website: O N C O R I N T E R N A T I O N A L The above information, while not guaranteed, has been secured from sources we believe to be reliable. Submitted subject to error, change or withdrawal. An interested party should verify the status of the property and the information herein.

2 PETALUMA 1364 North McDowell Blvd Redwood Way, 3,211 sf of Office Space to Sterling Bank dba Argent Bank 1031 North McDowell Blvd., 11,646 sf of Office Space to Symbio Research LLC 3120 Lakeville Highway, Suite B, 1,789 sf of Retail Space to FresnoLearns, LLC 1364 N. McDowell Blvd., Units 14 & 15, 3,250 sf of Industrial Space to America s Home Loans The Petaluma market has remained steady through the end of with signs of continued improvement. Expanding their storage and distribution capabilities in Petaluma, Cowgirl Creamery has leased 24,000 square feet of space at 2084 Lakeville Highway in southern Petaluma, with plans to move into the space in the middle of the first quarter of Novato-based Andalou Naturals has set up a larger operation and distribution center in Petaluma, leasing 14,300 square feet of warehouse and office space from Petaluma Business Center at 1129 Industrial Avenue. Industrial vacancy rates remained steady for the 4th quarter of at 10.4%, compared to 10.5% in the third quarter. Industrial rental rates remain steady with slight upward pressure on asking rates. Office vacancy rates were 20.7%, down from 21.2% in the third quarter. Office rental rates were all over the board. They range from approximately $.90 to $1.35 psf standard industrial gross on up to $2.35 psf for full service. The long anticipated Friedman s Home Improvement Center is due to open early-to-mid second quarter of 2014 in Deer Creek Village. The new 315,000 square foot mixed-use center covers 36.5 acres at the southwest corner of Rainier Avenue and North McDowell Blvd. Retail vacancy rates, 4.8%, up from 4.4% in the 3rd quarter PETALUMA-INDUSTRIAL 9.60% 12.30% 12.10% 10.50% 10.40% % % % PETALUMA - OFFICE 25.20% 24.90% 22.20% 21.10% 20.70% 0.10% 0.10% 0.10% 0.10% 0.10%

3 ROHNERT PARK/COTATI 600 Martin Avenue 967 Golf Course Drive, 4,352 sf of Office Space to Graton Economic Development Authority 5625 State Varm Drive, Unit 9, 1,568 sf of Industrial Space to Lifesaver of Northern CA 600 Martin Avenue, Suite 115, 4,350 sf of Industrial Space to Lluvia de Gracia Christian Church 5625 State Farm Drive, Units 17 & 35, 2,352 sf of Industrial Space to 1512 Spirits LLC The sale of the State Farm office complex in Rohnert Park to developer SunCal, has made a significant change in the office vacancy rate for the fourth quarter of. The developer has plans to turn the 320,000 square foot complex located at 6400 State Farm Drive into a transit-oriented mixeduse development, including residential and retail dispersed throughout the project. This new development effects the Office vacancy rates for Rohnert Park dropping them from 43.7% in with third quarter of to 33.2% for the last quarter of. Rent rates were approximately $1.13 psf, gross. Industrial vacancy rates remained steady at 10.5% for the fourth quarter. Rent rates were approximately $.61 to $1.05 psf, gross. Plans are moving forward for the new 33,000 square foot Wal-Mart Neighborhood Market store, set to open this fall in the former Pacific Market space in Mountain Shadows Shopping Plaza. Retail vacancy rates dropped for the fourth quarter, to 7.7%, down from 8.1% in the third quarter. Rent rates were approximately $1.00 psf, NNN.` ROHNERT PARK INDUSTRIAL ROHNERT PARK OFFICE % 9.70% 9.60% 9.60% 9.70% 0.80% 0.80% 0.80% 0.80% 0.80% % 52.30% 50.20% 41.90% 31.10% 2.20% 1.90% 1.80% 1.80% 2.10% 1st Qtr

4 SANTA ROSA 2999 Cleveland l Avenue 1202 Apollo Way, 37,048 sf of Office Investment to Airport Business Center 2770 Santa Rosa Avenue, 10,000 sf of Retail Space to Golf Mart, Inc Piner Road, 9,800 sf of Retail Investment to John Romero 1901 Russell Avenue, 16,278 sf of Industrial Investment to Josh Fiden & Tracey Fisher Construction is well under way for the new Target planned to open in July 2014 in Sonoma County s largest shopping center, Coddingtown. The new 143,000 square foot department store replaces the former Gottschalks store. A new 50,000 square foot Dick s Sporting Goods store is also planned near Coddingtown at the former Los Robles Lodge site. Office vacancy rates for Santa Rosa jumped up to 18.2% in the fourth quarter, up from 16.5% in the third quarter of. The vacancy stood at 16.8% at the end of. Monthly rental for office space ranged from $1.25 to $1.85 psf, gross. The industrial market continues a slow path to recovery, with continued slow growth and slight pressure on rents. Industrial vacancy rates improved during the fourth quarter, dropping to 12.1%, down from 12.8% in the third quarter of, and down almost 2 percent from the 14.0% rate one year ago. Rent rates for the Santa Rosa area ranged from $.60 to $.69 psf, gross. Retail vacancy rates stayed steady at 3.9% with a 1.1% improvement from the 4.8% a year ago. Rent rates ranged from $.87 to $1.90 psf, gross. SANTA ROSA INDUSTRIAL SANTA ROSA OFFICE % 12.80% 12.10% 11.90% 11.20% 1.00% 1.00% 0.90% 0.90% 0.90% % 15.50% 15.00% 15.00% 16.70% 1.50% 1.50% 1.40% 1.40% 1.40%

5 NORTH CORRIDOR (AIRPORT AREA & WINDSOR) 8911 Lakewood Drive 6450 Hembree Lane, # , Windsor, 5,835 sf Retail Space to Goodwill Industries Redwood Empire Asti Road, Cloverdale, 19,700 sf Industrial Space to Marietta Cellars, Inc Lincoln Street, Healdsburg, 2,600 sf Office Investment to Patrick & Gail Paquette 8911 Lakewood Drive, Windsor, 3,344 sf Office Space to Yoga Paradise, Inc. Several companies have chosen the North Corridor as the location for their expansion plans as draws to an end. American AgCredit s new Santa Rosa headquarters is expecting construction completion in 16 to 18 months. The 120,000 square foot office building will be located at the corner of Skylane and Aviation Boulevard. Rack & Riddle Wine Services, a custom winery located in Hopland, plans to open a 67,000 square foot winery in Healdsburg, to accommodate growing demand for sparkling wine. Making 40,000 cases a year, the company signed a longterm lease for a former Clos Du Bois barrel warehouse at 451 Moore Lane in the industrial area near City Hall. The expanded new home for Wine Country Shipping is a 31,000 square foot warehouse located at 1600 American Way in Conde Lane Business Park in Windsor. NORTH CORRIDOR INDUSTRIAL % 3.70% 8.70% 7.00% 1.70% 1.70% 5.90% 5.50% 0.10% 0.10% Office vacancy rates were 16.4% at the end of the fourth quarter, down from 17.6% at the end of last year. Rental rates were approximately $1.50 to $1.95 psf for Full Service. Industrial vacancy rates also had a significant improvement over last year s, ending at 5.5% - down from 13.4% at the end of. Rental rates were approximately $.60 to $75 psf Gross. Retail vacancy rates rose during the last year, ending at 5.9%, up from 5.1% at the end of. Rental rates were approximately $2.25 to $2.75 psf NNN. NORTH CORRIDOR OFFICE 15.60% 14.90% % 2.10% 2.40% 2.40% 2.10% 1st Qtr 1.20%