Office Report. Sacramento Valley Third Quarter City, State Year.

Transcription

1 Office Report City, State Year Sacramento Valley Offices in Burlingame, Los Altos, Monterey, Oakland, Palo Alto, Pleasanton, Sacramento, Salinas, San Francisco, San Jose, San Rafael, Santa Cruz, Santa Rosa, Walnut Creek Broker Lic #

2 Office Market Snapshot Sacramento Valley Market Tracker *Arrows = Current Qtr Trend 15.2% Net Absorption 472,155 SF Deliveries 0 SF Asking Rent $1.63 FS Office Market Maintains Momentum SACRAMENTO VALLEY OFFICE Economic Indicators Sacramento Valley Employment Sacramento Valley Unemployment Net Absorption Square Feet (000s) 3,000 2,500 2,000 1,500 1, ,000-1,500 Q3 13 Q , , % 9.71% U.S. Unemployment 7.4% 8. U.S. CCI YTD-13 The Sacramento office market closed Q with an overall vacancy rate of 15.2%. This marks a reduction from the 15.7% rate that was in place last quarter and the tenth consecutive quarter in which vacancy has either remained stable or declined. This also marks the seventh consecutive quarter of occupancy growth in excess of 100,000 square feet. One year ago local vacancy stood at 16.9%. In the intervening twelve months, the region s occupancy base has increased by over 1.7 million square feet. This total includes Q3 s gains, which came in at a respectable 472,000 square feet of space. Private sector deals continue to be the main driver of momentum in the office market. Though we have seen a few public sector deals recently the California Department of Housing and Community Development recently took space in Natomas, and both Placer County and Sacramento County have signed deals as well. Local and state government continue to be in low-to-no growth mode. While the healthcare sector dominated demand during the first half of the year, with large leases inked by companies like Sutter Health and Dignity Health, this quarter s activity was dominated by a mix of business types, including space users from the financial services, insurance, telecommunications and tech sectors. Though we saw a number of large deals in excess of 100,000 square feet signed over the first half of 2013, the majority of this quarter s activity was limited to smaller to medium space users generally active in the 10,000 to 30,000 square foot range. The current average asking rate for office space in the Sacramento region is $1.63 per square foot (on a monthly full service basis). This number is actually down slightly from the $1.64 rate that had been firmly in place for most of the past year. While we have seen some rental rate growth for Class A properties in the region s strongest submarkets, the overall average has yet to rebound. This metric has consistently hovered in the $1.63 and $1.69 range for the last two years. The local average asking rate had peaked just prior to the recession (Q2 2008) at $2.03 per square foot. The good news for local landlords is that continued decreases in the local vacancy rate will pave the way for rebounding rents. The bad news is that we don t anticipate overall averages to begin to rebound in any meaningful way until local vacancy is approaching the 11. mark and even at the current healthy pace of occupancy growth that is still a couple of years away. The current average asking rate for Class A space remains at $2.05 per square foot. 2 18% 10-Year Average 16% 14% Highlights: falls to 15.2%, the lowest rate the market has posted since Q Q3 was the seventh consecutive quarter of moderate to strong occupancy growth with the market recording over 472,000 square feet of positive net absorption. Private sector demand is still the main driver of activity in the area. Healthcare is still in demand, but momentum slowed in Q3. Financial services, insurance, telecommunications and tech users all remain active. The average asking rental rate for all classes of product currently stands at $1.63 per square foot. Overall rental rate growth is not anticipated any time soon, though Downtown Class A rents will be ahead of the overall trend..

3 Office Market Snapshot Sacramento Valley SACRAMENTO VALLEY OFFICE Office Sales $250 $200 $150 $100 $50 $ YTD-13 Sales Volume, $Mil # Bldgs Sold Average Asking Rate $1.90 $1.80 $1.70 $ Growth totals for the majority of the region s submarkets were positive in Q3. Four local submarkets posted occupancy gains in excess of 50,000 square feet. The Highway 50/Rancho Cordova submarket recorded the region s strongest performance, posting 213,000 square feet of positive net absorption the largest single-quarter occupancy gain that this trade area has seen since the recession. here fell from 16. to 14.7% over the past three months, While vacancy remains elevated and leasing conditions still largely favor tenants, this is the lowest vacancy rate this submarket has seen in the last three years. A number of major deals contributed to this quarter s vacancy decline; the California Health Benefit Exchange took occupancy of 66,000 square feet on White Rock Road, Sacramento County moved into 40,000 square feet on Goethe Road and University Enterprises occupied 30,000 square feet on Folsom Boulevard. The Roseville/Rocklin submarket also posted respectable growth totals, recording 114,000 square feet of positive net absorption as local vacancy fell from 20.6% to 19.9%. The 19.9% rate recorded this quarter marks the first time vacancy here has fallen under 2 since Q A victim of overbuilding during the last real estate cycle, the Roseville/Rocklin submarket was already struggling with vacancy rates in excess of 2 when the recession hit. By Q vacancy levels here reached as high as 30.6%. However, vacancy has consistently been on the mend since Q With private sector demand continuing to outpace public sector activity in the region, Roseville/Rocklin ranks among the most improved of the region s suburban submarkets. That being said, even with recent improvement vacancy levels remain just below the 20. threshold. We are still likely a few years away before anything approaching market equilibrium here. Other submarkets that posted notable growth include Midtown, which recorded 79,000 square feet of growth and South Sacramento, which logged 74,000 square feet of positive net absorption. Meanwhile, the submarket that experienced any noteworthy loss was Downtown. Downtown saw 73,000 square feet of space returned to the marketplace as its vacancy rate climbed from 11.5% to 11.9%. The California Department of Housing and Community Development vacated their 136,000 square foot space at rd Street this quarter. This single consolidation offset minor occupancy gains elsewhere in the Downtown marketplace. The Sacramento office market has been steadily improving over the last two years, and we anticipate that this improvement will continue heading into In fact, over the last two years, the occupancy base has expanded by just over 2.5 million square feet. Assuming this trend continues (barring any unforeseen vacancies or economic fallout from the government shutdown), vacancy should fall into the 14% range by the end of the year. Availabilities by Size (SF) Key Lease Transactions PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET 1000 Sunset Blvd 31,653 Placer County New Lease Roseville/Rocklin 1740 Creekside Oaks Dr 23,019 Centene Corporation New Lease Natomas/Northgate 1180 Iron Point Rd 14,822 Aerojet New Lease Folsom 1530 Drew Ave 12,919 Marrone Bio Innovations New Lease Davis/Woodland 0-10K 10-25K 25-50K 50K st Street 6,500 Lyon Real Estate New Lease South Sacramento 2999 Douglas Blvd 6,475 Data Information Management New Lease Roseville/Rocklin

4 Cassidy Turley Office Market Snapshot Sacramento Valley INVENTORY SUBLET VACANT DIRECT VACANT VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION UNDER CONSTRUC- TION AVERAGE ASKING RENT (ALL Classes) AVERAGE ASKING RENT (CLASS A) Submarket Downtown Sacramento 18,676,045 34,728 2,189, % (72,600) (328,224) 0 $1.94 $2.63 Auburn/Lincoln 1,338, , % (2,827) (21,125) 0 $1.63 N/A Campus Commons 1,242, , % 4,075 29,907 0 $1.74 N/A Carmichael/Fair Oaks 1,030, , % 10,444 20,401 0 $1.28 N/A Citrus Heights/Orangevale 1,421, , ,431 1,107 0 $1.61 N/A Davis/Woodland 1,928,484 2, , ,095 0 $1.76 $2.10 East Sacramento 1,840, , % (4,965) (6,148) 0 $1.80 N/A El Dorado Hills 1,645,705 12, , % 4,365 3,858 0 $1.55 $1.58 Folsom 4,760,134 20, , % 2,868 56,327 0 $1.76 $1.90 Highway 50 Corridor 17,240,928 89,106 2,453, % 213, ,991 0 $1.53 $1.82 Howe Ave/Fulton Ave 2,493,949 4, , % 14,600 12,986 0 $1.55 $1.85 Midtown 3,629, , % 78,707 48,938 0 $1.80 $2.25 Natomas/Northgate 6,086,799 2,219 1,344, % 18, ,090 0 $1.71 $1.91 Point West 2,749, , % (4,631) 67,653 0 $1.59 $1.85 Rio Linda/North Highlands 1,009, , % 0 10,126 0 $1.41 N/A Roseville/Rocklin 10,425,276 8,841 2,063, % 114, ,102 0 $1.60 $1.71 South Sacramento 4,284, , % 73, ,022 0 $1.45 $1.88 Watt Ave 2,435,917 1, , % 6,136 32,427 0 $1.31 N/A West Sacramento 1,983,136 9, , % 0 28,676 0 $1.68 $1.70 Class Breakdown Class A 26,230, ,021 3,427, % 276, $2.05 Class B 39,274,541 65,517 6,441, % 173, ,448 0 $1.63 SUBMARKET TOTALS 86,222, ,429 12,919, % 472,155 1,089,209 0 $1.63 $2.05 *Office asking rates converted to Full Service Key Office Sale Transactions PROPERTY SF BUYER CITY SALE PRICE 770 L Street 169,078 AMP Capital Sacramento $29,400, E Bidwell Street 36,235 Azusa Housing Partners Folsom $4,600, Folsom Boulevard 28,879 Goodwill Industries Sacramento $2,887, L Street 12,000 California New Car Dealers Association Sacramento $2,800, Prairie City Road 14,461 Pro-Led Company Folsom $2,100,000 About Cassidy Turley Cassidy Turley is a leading commercial real estate services provider with more than 3,800 professionals in more than 60 offices nationwide. Based in Washington, DC, the company represents a wide range of clients from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $22 billion in 2012, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 23,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate services including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit for more information about Cassidy Turley. Abby Friedman Research Analyst 520 Capitol Mall Fifth Floor Sacramento, CA Tel: Fax: Managing Editor: Garrick Brown Director of Research gbrown@ctbt.com The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Copyright 2013 Cassidy Turley. All rights reserved.

5 Market Summary Submarket Building Vacant Space Rate Sq.Ft. Direct Sublease Total Q3-13 Q3-12 Downtown Sacramento 18,676,045 2,189,929 34,728 2,224, % 10.3% $1.94 Auburn / Lincoln 1,338, , , % 15.6% $1.39 Campus Commons 1,242, , , % 23.1% $1.73 Carmichael / Fair Oaks 1,030, , , % 12.5% $1.11 Citrus Heights / Orangevale 1,421, , , % $1.36 Davis / Woodland 1,928, ,640 2, , % $1.76 East Sacramento 1,840, , , % 10.3% $1.80 El Dorado Hills 1,645, ,719 12, , % 22.7% $1.55 Folsom 4,760, ,580 20, , % 11.9% $1.76 Highway 50 / Rancho Cordova 17,240,928 2,453,252 89,106 2,542, % 17.4% $1.53 Howe Ave / Fulton Ave 2,493, ,749 4, , % 22.6% $1.55 Midtown Sacramento 3,629, , , % 8.3% $1.80 Natomas / Northgate 6,086,799 1,344,804 2,219 1,347, % 24.8% $1.71 Point West 2,749, , , % 28.7% $1.59 Rio Linda / North Highlands 1,009, , , % 40.8% $1.23 Roseville / Rocklin 10,425,276 2,063,555 8,841 2,072, % 26.1% $1.60 South Sacramento 4,284, , , % 15.1% $1.45 Watt Ave 2,435, ,443 1, , % 14.2% $1.31 West Sacramento 1,983, ,055 9, , % 10.2% $1.68 Totals 86,222,376 12,919, ,429 13,105, % 16.9% $1.63 by Area 45% 4 35% 3 25% 2 15% 1 5% Avg. Asking Rate (FS) Average Asking Rate Full Service by Area Q3-13 Q3-12

6 Total Market Class A 25,942,264 26,047,375 26,177,375 26,177,375 26,230,375 Class B 39,255,916 39,255,916 39,274,541 39,274,541 39,274,541 Class C 20,717,460 20,717,460 20,717,460 20,717,460 20,717,460 Total Building Base 85,915,640 86,020,751 86,169,376 86,169,376 86,222,376 Class A 4,107,682 3,997,569 3,740,642 3,611,408 3,427,181 Class B 6,804,808 6,534,544 6,693,155 6,619,898 6,441,542 Class C 3,394,029 3,202,410 3,179,477 3,058,008 3,050,916 Total Building Base 14,306,519 13,734,523 13,613,274 13,289,314 12,919,639 Class A 142, , , , ,021 Class B 101,394 97,635 90,224 74,677 65,517 Class C 4,184 4,022 5,455 2,903 1,891 Total Building Base 248, , , , ,429 Class A 4,250,145 4,154,041 3,915,259 3,768,737 3,545,202 Class B 6,906,202 6,632,179 6,783,379 6,694,575 6,507,059 Class C 3,398,213 3,206,432 3,184,932 3,060,911 3,052,807 All Types 14,554,560 13,992,652 13,883,570 13,524,223 13,105,068 Total Occupied SF 71,361,080 72,028,099 72,285,806 72,645,153 73,117,308 Growth Rate (%) 0.4% 0.7% 0.1% 0.4% 0.5% : Class A 16.4% 15.9% % 13.5% Class B 17.6% 16.9% 17.3% % Class C 16.4% 15.5% 15.4% 14.8% 14.7% All Types 16.9% 16.3% 16.1% 15.7% 15.2% (FS/Month) Class A $1.99 $1.98 $2.05 $2.05 $2.05 Class B $1.67 $1.65 $1.64 $1.63 $1.63 Class C $1.15 $1.16 $1.17 $1.16 $1.16 All Types $1.64 $1.64 $1.64 $1.64 $1.63 Class A 0 105, , ,000 Class B 21, , Total A & B 21, , , ,000 Gross Absorption 1,035,411 1,286,123 1,257,027 1,122,297 1,192,917 Net Absorption 499, , , , ,155 YTD Net Absorption 742,295 1,409, , ,054 1,089,209 & Asking Rate Trend 2 16% 16.9% 17.3% 17.7% 17.7% 17.7% 17.6% 17.5% 17.4% 16.9% 16.3% 16.1% 15.7% 15.2% 8% 4%

7 Downtown Sacramento Class A 9,062,614 9,062,614 9,062,614 9,062,614 9,062,614 Class B 5,797,295 5,797,295 5,797,295 5,797,295 5,797,295 Class C 3,816,136 3,816,136 3,816,136 3,816,136 3,816,136 All Types 18,676,045 18,676,045 18,676,045 18,676,045 18,676,045 Class A 753, , ,218 1,024, ,948 Class B 711, , , , ,926 Class C 395, , , , ,055 All Types 1,861,562 1,832,228 2,119,638 2,100,358 2,189,929 Class A 45,844 44,853 47,319 32,347 15,376 Class B 19,352 19,352 19,352 19,352 19,352 All Types 65,196 64,205 66,671 51,699 34,728 Class A 799, ,220 1,035,537 1,056, ,324 Class B 731, , , , ,278 Class C 395, , , , ,055 All Types 1,926,758 1,896,433 2,186,309 2,152,057 2,224,657 Total Occupied SF 16,749,287 16,779,612 16,489,736 16,523,988 16,451,388 Growth Rate (%) % -1.6% 0.2% -0.4% : Class A 8.8% 8.6% 11.4% 11.7% 11. Class B 12.6% 12.5% 12.7% 12.1% 14.3% Class C 10.4% 10.3% 10.9% 10.4% 10.5% All Types 10.3% 10.2% 11.7% 11.5% 11.9% (FS/Month) Class A $2.63 $2.62 $2.64 $2.62 $2.63 Class B $1.80 $1.81 $1.77 $1.79 $1.80 Class C $1.37 $1.39 $1.38 $1.37 $1.38 All Types $1.93 $1.94 $1.93 $1.93 $1.94 Gross Absorption 172, ,178 68, , ,424 Net Absorption , ,876 34,252-72,600 YTD Net Absorption 89, , , , ,224 & Asking Rate Trend 14% 1 8% 6% 4% 2% 9.6% 10.2% 10.5% 10.7% 11.2% 10.8% 10.5% 10.3% 10.3% 10.2% 11.7% 11.5% 11.9% $3.00

8 Auburn / Lincoln Class B 646, , , , ,470 Class C 691, , , , ,710 All Types 1,338,180 1,338,180 1,338,180 1,338,180 1,338,180 Class B 131, , , , ,663 Class C 73,706 78,678 89, ,120 98,852 All Types 205, , , , ,515 Class C 4,184 4,022 2, All Types 4,184 4,022 2, Class B 131, , , , ,663 Class C 77,890 82,700 91, ,120 98,852 All Types 209, , , , ,515 Total Occupied SF 1,128,936 1,130,790 1,118,748 1,112,492 1,109,665 Growth Rate (%) -2.2% 0.1% -0.9% -0.5% -0.2% : Class A Class B 20.3% 19.3% 19.7% 19.4% 20.1% Class C 11.3% % 14.5% 14.3% All Types 15.6% 15.5% 16.4% 16.9% 17.1% (FS/Month) Class A Class B $1.58 $1.62 $1.63 $1.63 $1.63 Class C $1.21 $1.16 $1.09 $1.08 $1.08 All Types $1.44 $1.44 $1.40 $1.39 $1.39 Class B 21, Total A & B 21, Gross Absorption 8,882 12,184 6,470 14,966 1,268 Net Absorption -8,738 1,854-12,042-6,256-2,827 YTD Net Absorption -18,668-16,814-12,042-18,298-21,125 & Asking Rate Trend 18% 15% 9% 6% 3% 11.2% 11.6% 12.5% % 12.9% 12.6% 13.6% 15.6% 15.5% 16.4% 16.9% 17.1%

9 Campus Commons Class B 1,052,570 1,052,570 1,052,570 1,052,570 1,052,570 Class C 190, , , , ,269 All Types 1,242,839 1,242,839 1,242,839 1,242,839 1,242,839 Class B 266, , , , ,254 Class C 21,138 27,538 28,019 26,346 25,995 All Types 287, , , , ,249 All Types Class B 266, , , , ,254 Class C 21,138 27,538 28,019 26,346 25,995 All Types 287, , , , ,249 Total Occupied SF 955, , , , ,590 Growth Rate (%) 1.2% 0.2% % 0.3% : Class A Class B 25.3% 24.5% 24.4% 22.1% 21.8% Class C 11.1% 14.5% 14.7% 13.8% 13.7% All Types 23.1% 22.9% % 20.5% (FS/Month) Class A Class B $1.74 $1.73 $1.72 $1.73 $1.74 Class C $1.62 $1.86 $1.61 $1.63 $1.63 All Types $1.73 $1.74 $1.71 $1.72 $1.73 Gross Absorption 24,027 24,626 5,815 35,725 11,599 Net Absorption 15,171 2, ,946 4,075 YTD Net Absorption -1, ,832 29,907 & Asking Rate Trend 3 25% 2 15% 1 5% 20.8% 20.8% 21.9% 23.4% % 24.3% 23.1% 22.9% % 20.5% $3.00

10 Carmichael / Fair Oaks Class B 437, , , , ,190 Class C 593, , , , ,612 All Types 1,030,802 1,030,802 1,030,802 1,030,802 1,030,802 Class B 44,038 42,744 40,628 40,628 36,656 Class C 85,130 87,773 73,100 79,932 73,460 All Types 129, , , , ,116 All Types Class B 44,038 42,744 40,628 40,628 36,656 Class C 85,130 87,773 73,100 79,932 73,460 All Types 129, , , , ,116 Total Occupied SF 901, , , , ,686 Growth Rate (%) -0.2% -0.1% 1.6% -0.7% 1. : Class A Class B 10.1% 9.8% 9.3% 9.3% 8.4% Class C 14.3% 14.8% 12.3% 13.5% 12.4% All Types 12.5% 12.7% % 10.7% (FS/Month) Class A Class B $1.29 $1.29 $1.04 $1.28 $1.28 Class C $1.26 $1.21 $1.06 $1.03 $1.02 All Types $1.27 $1.24 $1.05 $1.11 $1.11 Gross Absorption 22,792 16,524 37,050 10,818 15,787 Net Absorption -2,361-1,349 16,789-6,832 10,444 YTD Net Absorption 12,207 10,858 16,789 9,957 20,401 & Asking Rate Trend 2 16% 8% 4% 13.1% 12.4% 11.5% 12.1% % 12.6% 12.3% 12.5% 12.7% % 10.7%

11 Citrus Heights / Orangevale Class A 79,163 79,163 79,163 79,163 79,163 Class B 543, , , , ,867 Class C 798, , , , ,357 All Types 1,421,387 1,421,387 1,421,387 1,421,387 1,421,387 Class B 122, , , , ,678 Class C 89,957 98, , ,445 94,052 All Types 212, , , , ,730 All Types Class B 122, , , , ,678 Class C 89,957 98, , ,445 94,052 All Types 212, , , , ,730 Total Occupied SF 1,208,949 1,221,550 1,209,448 1,207,226 1,222,657 Growth Rate (%) 0.4% 0.9% -0.9% -0.2% 1.1% : Class A Class B 22.5% 18.6% 19.2% 20.4% 19.2% Class C 11.3% 12.4% 13.5% % All Types 14.9% 14.1% 14.9% 15.1% 14. (FS/Month) Class A Class B $1.51 $1.57 $1.60 $1.62 $1.61 Class C $1.15 $1.10 $1.05 $1.11 $1.09 All Types $1.36 $1.34 $1.32 $1.37 $1.36 Gross Absorption 19,261 41,133 20,482 10,706 16,813 Net Absorption 5,876 12,601-12,102-2,222 15,431 YTD Net Absorption 44,886 57,487-12,102-14,324 1,107 & Asking Rate Trend 24% 2 16% 8% 4% 18.4% 18.4% 18.1% 18.5% 19.3% 18.1% 16.1% 15.4% 14.9% 14.1% 14.9% 15.1% 14.

12 Davis / Woodland Class A 98,000 98,000 98,000 98,000 98,000 Class B 954, , , , ,158 Class C 876, , , , ,326 All Types 1,928,484 1,928,484 1,928,484 1,928,484 1,928,484 Class A 22,574 22,574 22,574 22,574 22,574 Class B 137, , , , ,469 Class C 61,541 57,145 55,872 42,697 47,597 All Types 222, , , , ,640 Class B 250 2,528 2,278 2,278 2,278 All Types 250 2,528 2,278 2,278 2,278 Class A 22,574 22,574 22,574 22,574 22,574 Class B 138, , , , ,747 Class C 61,541 57,145 55,872 42,697 47,597 All Types 222, , , , ,918 Total Occupied SF 1,706,184 1,713,471 1,730,169 1,754,964 1,755,566 Growth Rate (%) 1.2% 0.4% 0.9% 1.3% 0. : Class A Class B 14.5% 14.2% 12.6% 11.3% 10.8% Class C % 6.4% 4.9% 5.4% All Types 11.5% 11.1% 10.3% (FS/Month) Class A $2.10 $2.10 $2.10 $2.10 $2.10 Class B $1.68 $1.71 $1.69 $1.69 $1.69 Class C $1.51 $1.52 $1.51 All Types $1.76 $1.78 $1.77 $1.76 $1.76 Gross Absorption 24,429 11,048 30,106 41,952 7,060 Net Absorption 22,391 7,287 16,698 24, YTD Net Absorption -7, ,698 41,493 42,095 & Asking Rate Trend 15% 9% 6% 3% 11.7% % 12.5% 11.2% 11.1% 12.3% 12.7% 11.5% 11.1% 10.3% 9. 9.

13 East Sacramento Class B 1,500,061 1,500,061 1,500,061 1,500,061 1,500,061 Class C 340, , , , ,435 All Types 1,840,496 1,840,496 1,840,496 1,840,496 1,840,496 Class B 156, , , , ,145 Class C 32,635 55,431 55,463 55,463 56,561 All Types 189, , , , ,706 All Types Class B 156, , , , ,145 Class C 32,635 55,431 55,463 55,463 56,561 All Types 189, , , , ,706 Total Occupancy SF 1,651,204 1,620,938 1,619,755 1,619,755 1,614,790 Growth Rate (%) -0.1% -1.6% -0.1% % : Class A Class B 10.4% 10.9% % Class C 9.6% 16.3% 16.3% 16.3% 16.6% All Types 10.3% 11.9% % (FS/Month) Class A Class B $1.73 $2.02 $2.01 $2.01 $2.01 Class C $1.10 $1.15 $1.19 $1.17 $1.17 All Types $1.62 $1.80 $1.80 $1.80 $1.80 Gross Absorption 1,504 8,330 2, ,102 Net Absorption -1,281-30,266-1, ,965 YTD Net Absorption 62,821 32,555-1,183-1,183-6,148 & Asking Rate Trend 18% 15% 9% 6% % 14.9% 14.6% 13.8% 13.7% % 10.3% 11.9% % 3%

14 El Dorado Hills Class A 136, , , , ,566 Class B 993, , , , ,138 Class C 516, , , , ,001 All Types 1,645,705 1,645,705 1,645,705 1,645,705 1,645,705 Class A 10,176 10,176 11,384 10,211 10,174 Class B 272, , , , ,557 Class C 78,190 71,280 72,108 69,183 74,988 All Types 360, , , , ,719 Class B 12,207 12,207 12,207 12,207 12,207 All Types 12,207 12,207 12,207 12,207 12,207 Class A 10,176 10,176 11,384 10,211 10,174 Class B 284, , , , ,764 Class C 78,190 71,280 72,108 69,183 74,988 All Types 372, , , , ,926 Total Occupancy SF 1,272,922 1,265,921 1,252,065 1,265,414 1,269,779 Growth Rate (%) -0.9% -0.4% -0.8% 0.8% 0.3% : Class A 7.5% 7.5% 8.3% 7.5% 7.4% Class B 28.6% % 30.3% 29.3% Class C 15.2% 13.8% % 14.5% All Types 22.7% 23.1% 23.9% 23.1% 22.8% (FS/Month) Class A $1.63 $1.63 $1.63 $1.59 $1.58 Class B $1.67 $1.64 $1.57 $1.61 $1.60 Class C $1.47 $1.46 $1.46 $1.36 $1.36 All Types $1.63 $1.61 $1.55 $1.56 $1.55 Gross Absorption 33,224 17,695 7,650 24,228 16,720 Net Absorption -15,048-7,001-13,856 13,349 4,365 YTD Net Absorption -14,660-21,661-13, ,858 & Asking Rate Trend 3 25% 2 15% 1 5% 20.8% 21.9% 20.9% 20.3% 20.1% 21.8% 21.7% 21.7% 22.7% 23.1% 23.9% 23.1% 22.8%

15 Folsom Class A 2,051,065 2,051,065 2,051,065 2,051,065 2,051,065 Class B 2,171,415 2,171,415 2,171,415 2,171,415 2,171,415 Class C 537, , , , ,654 All Types 4,760,134 4,760,134 4,760,134 4,760,134 4,760,134 Class A 221, , , , ,546 Class B 276, , , , ,649 Class C 24,301 23,568 25,936 25,385 25,385 All Types 522, , , , ,580 Class A 12,520 12,520 12, Class B 32,834 32,834 34,627 20,008 20,008 All Types 45,354 45,354 47,147 20,008 20,008 Class A 234, , , , ,546 Class B 309, , , , ,657 Class C 24,301 23,568 25,936 25,385 25,385 All Types 567, , , , ,588 Total Occupancy SF 4,192,271 4,205,219 4,233,794 4,258,678 4,261,546 Growth Rate (%) 0.9% 0.3% 0.6% 0.5% 0.1% : Class A 11.4% 12.1% 11.7% 10.4% 10.3% Class B 14.2% % 12.1% Class C 4.5% 4.4% 4.8% 4.7% 4.7% All Types 11.9% 11.7% 11.1% 10.5% 10.5% (FS/Month) Class A $1.99 $1.97 $1.90 $1.90 Class B $1.74 $1.73 $1.66 $1.66 $1.67 Class C $1.56 $1.58 $1.37 $1.47 $1.46 All Types $1.84 $1.84 $1.79 $1.75 $1.76 Gross Absorption 63,338 36,775 56,617 81,905 15,074 Net Absorption 44,957 12,948 28,575 24,884 2,868 YTD Net Absorption 145, ,037 28,575 53,459 56,327 & Asking Rate Trend 2 $ % 8% 4% % 14.4% 15.8% 14.9% 13.7% 13.6% 12.9% 11.9% 11.7% 11.1% 10.5% 10.5%

16 Highway 50 / Rancho Cordova Class A 5,161,761 5,161,761 5,161,761 5,161,761 5,161,761 Class B 9,539,144 9,539,144 9,539,144 9,539,144 9,539,144 Class C 2,540,023 2,540,023 2,540,023 2,540,023 2,540,023 All Types 17,240,928 17,240,928 17,240,928 17,240,928 17,240,928 Class A 648, , , , ,390 Class B 1,704,441 1,684,030 1,684,899 1,687,835 1,581,346 Class C 578, , , , ,516 All Types 2,931,514 2,765,933 2,651,482 2,647,780 2,453,252 Class A 75,416 90,416 90, ,615 87,789 Class B 0 0 1,145 1,317 1,317 All Types 75,416 90,416 91, ,932 89,106 Class A 723, , , , ,179 Class B 1,704,441 1,684,030 1,686,044 1,689,152 1,582,663 Class C 578, , , , ,516 All Types 3,006,930 2,856,349 2,743,043 2,755,712 2,542,358 Total Occupancy SF 14,233,998 14,384,579 14,497,885 14,485,216 14,698,570 Growth Rate (%) 0.5% 0.9% 0.7% -0.1% 1.2% : Class A % 11.5% 11.8% 9.6% Class B 17.9% 17.7% 17.7% 17.7% 16.6% Class C 22.8% 18.5% 18.2% % All Types 17.4% 16.6% 15.9% % (FS/Month) Class A $1.81 $1.77 $1.82 $1.82 $1.82 Class B $1.58 $1.57 $1.55 $1.55 $1.54 Class C $1.24 $1.20 $1.20 $1.20 $1.20 All Types $1.57 $1.56 $1.55 $1.55 $1.53 Gross Absorption 163, , , , ,621 Net Absorption 175, , ,306-12, ,354 YTD Net Absorption 53, , , , ,991 & Asking Rate Trend 24% 2 16% 8% 14.7% 16.1% % 15.8% 17.3% 17.8% % 16.6% 15.9% % 4%

17 Howe Ave / Fulton Ave Class A 186, , , , ,306 Class B 1,209,625 1,209,625 1,228,250 1,228,250 1,228,250 Class C 1,079,393 1,079,393 1,079,393 1,079,393 1,079,393 All Types 2,475,324 2,475,324 2,493,949 2,493,949 2,493,949 Class A 50,046 50,046 50,046 43,898 43,898 Class B 328, , , , ,820 Class C 176, , , , ,031 All Types 554, , , , ,749 Class B 4,202 4,202 4,202 4,202 4,202 All Types 4,202 4,202 4,202 4,202 4,202 Class A 50,046 50,046 50,046 43,898 43,898 Class B 332, , , , ,022 Class C 176, , , , ,031 All Types 559, , , , ,951 Total Occupancy SF 1,916,197 1,905,012 1,894,102 1,903,398 1,917,998 Growth Rate (%) 0.1% -0.5% -1.2% 0.4% 0.6% : Class A 26.9% 26.9% 26.9% 23.6% 23.6% Class B 27.5% 26.9% 27.5% % Class C 16.3% % 18.8% 17.6% All Types 22.6% % 23.7% 23.1% (FS/Month) Class A $1.75 $1.75 $1.85 $1.85 $1.85 Class B $1.51 $1.54 $1.52 $1.49 $1.51 Class C $1.47 $1.47 $1.54 $1.56 $1.54 All Types $1.52 $1.53 $1.55 $1.54 $1.55 Class B , Total A & B , Gross Absorption 39,178 33,352 39,026 42,273 37,126 Net Absorption 1,855-11,185-10,910 9,296 14,600 YTD Net Absorption 33,384 22,199-10,910-1,614 12,986 & Asking Rate Trend 3 25% 2 15% 1 5% 19.1% 18.8% 22.1% 21.6% 22.2% 23.9% 23.2% 22.7% 22.6% % 23.7% 23.1%

18 Midtown Sacramento Class A 571, , , , ,819 Class B 1,798,167 1,798,167 1,798,167 1,798,167 1,798,167 Class C 1,259,545 1,259,545 1,259,545 1,259,545 1,259,545 All Types 3,629,531 3,629,531 3,629,531 3,629,531 3,629,531 Class A 7,620 11,245 11,245 16,688 3,625 Class B 160, , , ,419 92,436 Class C 129, , , , ,233 All Types 297, , , , ,294 Class B 3, All Types 3, Class A 7,620 11,245 11,245 16,688 3,625 Class B 164, , , ,419 92,436 Class C 129, , , , ,233 All Types 301, , , , ,294 Total Occupancy SF 3,327,748 3,330,299 3,313,906 3,300,530 3,379,237 Growth Rate (%) -0.1% 0.1% -0.5% -0.4% 2.2% : Class A 1.3% % 0.6% Class B 9.2% 9.3% 9.7% 9.5% 5.1% Class C 10.3% 9.5% 10.4% 11.3% 12.2% All Types 8.3% 8.2% 8.7% 9.1% 6.9% (FS/Month) Class A $2.25 $2.25 $2.25 $2.25 $2.25 Class B $2.01 $2.01 $2.03 $2.01 $2.01 Class C $1.67 $1.67 $1.68 $1.68 $1.66 All Types $1.87 $1.88 $1.89 $1.88 $1.80 Gross Absorption 11,160 14,267 9,280 6, ,188 Net Absorption -4,157 2,551-16,393-13,376 78,707 YTD Net Absorption -13,488-10,937-16,393-29,769 48,938 & Asking Rate Trend 1 8% 6% 4% 2% 7.9% 7.5% 8.7% 8.6% 8.7% 7.9% 8.3% 8.2% 8.3% 8.2% 8.7% 9.1% 6.9%

19 Natomas / Northgate Class A 3,622,022 3,622,022 3,622,022 3,622,022 3,622,022 Class B 1,815,156 1,815,156 1,815,156 1,815,156 1,815,156 Class C 649, , , , ,621 All Types 6,086,799 6,086,799 6,086,799 6,086,799 6,086,799 Class A 896, , , , ,910 Class B 435, , , , ,808 Class C 167, , , , ,086 All Types 1,499,584 1,524,107 1,425,655 1,363,010 1,344,804 Class A 0 0 2,219 2,219 2,219 Class B 8,072 6, All Types 8,072 6,006 2,219 2,219 2,219 Class A 896, , , , ,129 Class B 443, , , , ,808 Class C 167, , , , ,086 All Types 1,507,656 1,530,113 1,427,874 1,365,229 1,347,023 Total Occupancy SF 4,579,143 4,556,686 4,658,925 4,721,570 4,739,776 Growth Rate (%) 0.6% -0.4% 1.7% % : Class A 24.7% 24.8% 23.1% 20.8% 20.9% Class B 24.5% 24.2% 21.9% 24.3% 23.1% Class C 25.8% 29.6% 29.7% 26.5% 26.5% All Types 24.8% 25.1% 23.5% 22.4% 22.1% (FS/Month) Class A $1.88 $1.88 $1.90 $1.92 $1.91 Class B $1.55 $1.56 $1.58 $1.61 $1.59 Class C $1.18 $1.11 $1.12 $1.11 $1.13 All Types $1.70 $1.69 $1.71 $1.72 $1.71 Gross Absorption 82,160 50, , ,864 64,866 Net Absorption 35,184-22, ,239 62,645 18,206 YTD Net Absorption -23,558-46, , , ,090 & Asking Rate Trend 3 24% 24.8% 26.2% 25.5% % 24.4% 25.5% 25.3% 24.8% 25.1% 23.5% 22.4% 22.1% $ % 6%

20 Point West Class A 858, , , , ,620 Class B 1,173,924 1,173,924 1,173,924 1,173,924 1,173,924 Class C 716, , , , ,785 All Types 2,749,329 2,749,329 2,749,329 2,749,329 2,749,329 Class A 317, , , , ,283 Class B 361, , , , ,741 Class C 91,475 91,186 84,307 89, ,936 All Types 770, , , , ,960 Class B 17,540 17,540 13,697 13,697 0 All Types 17,540 17,540 13,697 13,697 0 Class A 317, , , , ,283 Class B 379, , , , ,741 Class C 91,475 91,186 84,307 89, ,936 All Types 788, , , , ,960 Total Occupancy SF 1,961,145 1,970,716 2,044,695 2,043,000 2,038,369 Growth Rate (%) 1.8% 0.3% 2.7% -0.1% -0.2% : Class A 36.9% % 28.8% 24. Class B 32.3% % 31.5% 30. Class C 12.8% 12.7% 11.8% 12.5% 21.2% All Types 28.7% 28.3% 25.6% 25.7% 25.9% (FS/Month) Class A $1.91 $1.91 $1.85 $1.85 $1.85 Class B $1.66 $1.64 $1.66 $1.67 $1.66 Class C $1.02 $0.99 $1.05 $1.06 $1.06 All Types $1.69 $1.67 $1.65 $1.66 $1.59 Gross Absorption 59,622 30,460 93,953 9,741 57,637 Net Absorption 48,988 9,571 73,979-1,695-4,631 YTD Net Absorption 27,513 37,084 73,979 72,284 67,653 & Asking Rate Trend 36% 3 24% 18% 6% % 26.4% % 31.3% 30.5% 28.7% 28.3% 25.6% 25.7% 25.9%

21 Rio Linda / North Highlands Class B 249, , , , ,982 Class C 759, , , , ,098 All Types 1,009,080 1,009,080 1,009,080 1,009,080 1,009,080 Class B 29,766 29,766 29,766 29,766 29,766 Class C 381, , , , ,927 All Types 411, , , , ,693 All Types Class B 29,766 29,766 29,766 29,766 29,766 Class C 381, , , , ,927 All Types 411, , , , ,693 Total Occupancy SF 597, , , , ,387 Growth Rate (%) 0.7% 8.7% : Class A Class B 11.9% 11.9% 11.9% 11.9% 11.9% Class C 50.3% 38.7% 37.4% 37.4% 37.4% All Types 40.8% 32.1% 31.1% 31.1% 31.1% (FS/Month) Class A Class B $1.53 $1.53 $1.29 $1.41 $1.41 Class C $1.61 $1.61 $1.21 $1.21 $1.21 All Types $1.60 $1.60 $1.22 $1.23 $1.23 Gross Absorption 2,002 87,543 10, Net Absorption 6,602 87,543 10, YTD Net Absorption -5,612 81,931 10,126 10,126 10,126 & Asking Rate Trend % 43.3% 39.4% 39.4% % 40.5% 41.4% 40.8% 32.1% 31.1% 31.1% 31.1%

22 Roseville / Rocklin Class A 3,232,428 3,232,428 3,232,428 3,232,428 3,285,428 Class B 5,632,446 5,632,446 5,632,446 5,632,446 5,632,446 Class C 1,507,402 1,507,402 1,507,402 1,507,402 1,507,402 All Types 10,372,276 10,372,276 10,372,276 10,372,276 10,425,276 Class A 1,161,516 1,086, , , ,049 Class B 1,175, ,461 1,185,210 1,153,236 1,088,001 Class C 354, , , , ,505 All Types 2,691,818 2,348,849 2,213,580 2,125,975 2,063,555 Class A 8,683 8,683 12,194 6,199 2,688 Class B 2,966 2,966 2,716 1,616 6,153 All Types 11,649 11,649 14,910 7,815 8,841 Class A 1,170,199 1,095, , , ,737 Class B 1,178, ,427 1,187,926 1,154,852 1,094,154 Class C 354, , , , ,505 All Types 2,703,467 2,360,498 2,228,490 2,133,790 2,072,396 Total Occupancy SF 7,668,809 8,011,778 8,143,786 8,238,486 8,352,880 Growth Rate (%) 0.6% 3.3% 1.3% 0.9% 0.6% : Class A 36.2% 33.9% 25.1% 23.6% 23.4% Class B 20.9% 17.3% 21.1% 20.5% 19.4% Class C 23.5% 19.3% 15.1% 14.2% 13.8% All Types 26.1% 22.8% 21.5% 20.6% 19.9% (FS/Month) Class A $1.77 $1.76 $1.75 $1.73 $1.71 Class B $1.76 $1.63 $1.63 $1.60 $1.60 Class C $1.26 $1.26 $1.28 $1.22 $1.22 All Types $1.70 $1.64 $1.64 $1.61 $1.60 Class A ,000 Total A & B ,000 Gross Absorption 155, , , , ,069 Net Absorption 61, , ,008 94, ,394 YTD Net Absorption 164, , , , ,102 & Asking Rate Trend 36% 3 24% 18% 6% 29.8% 29.1% 30.4% 29.6% 29.2% 27.6% 26.8% 26.7% 26.1% 22.8% 21.5% 20.6% 19.9%

23 South Sacramento Class A 48, , , , ,219 Class B 2,020,449 2,020,449 2,020,449 2,020,449 2,020,449 Class C 1,980,691 1,980,691 1,980,691 1,980,691 1,980,691 All Types 4,049,248 4,154,359 4,284,359 4,284,359 4,284,359 Class A 18,385 16,040 16, Class B 257, , , , ,336 Class C 335, , , , ,314 All Types 611, , , , ,650 All Types Class A 18,385 16,040 16, Class B 257, , , , ,336 Class C 335, , , , ,314 All Types 611, , , , ,650 Total Occupancy SF 3,437,777 3,542,687 3,681,206 3,720,713 3,794,709 Growth Rate (%) 2.6% % 0.9% 1.7% : Class A 38.2% 10.5% 5.7% Class B 12.7% 12.6% % 11.9% Class C % 17.4% % All Types 15.1% 14.7% 14.1% 13.2% 11.4% (FS/Month) Class A $1.73 $1.73 $1.73 $1.89 $1.88 Class B $1.79 $1.72 $1.70 $1.68 $1.68 Class C $1.24 $1.24 $1.23 $1.24 $1.23 All Types $1.49 $1.45 $1.43 $1.43 $1.45 Class A 0 105, , Total A & B 0 105, , Gross Absorption 128, ,621 33,641 49, ,066 Net Absorption 106, , ,519 39,507 73,996 YTD Net Absorption 201, , , , ,022 & Asking Rate Trend 25% 2 15% 1 5% 17.7% 17.6% 16.8% 17.9% 19.4% 20.1% 18.7% 17.7% 15.1% 14.7% 14.1% 13.2% 11.4%

24 Watt Ave Class B 988, , , , ,608 Class C 1,447,309 1,447,309 1,447,309 1,447,309 1,447,309 All Types 2,435,917 2,435,917 2,435,917 2,435,917 2,435,917 Class B 68,364 68,364 71,828 73,214 69,759 Class C 277, , , , ,684 All Types 345, , , , ,443 Class C 0 0 2,903 2,903 1,891 All Types 0 0 2,903 2,903 1,891 Class B 68,364 68,364 71,828 73,214 69,759 Class C 277, , , , ,575 All Types 345, , , , ,334 Total Occupancy SF 2,090,152 2,091,156 2,083,049 2,117,447 2,123,583 Growth Rate (%) 0.2% % 1.4% 0.3% : Class A Class B 6.9% 6.9% 7.3% 7.4% 7.1% Class C 19.2% 19.1% 19.4% 16.9% 16.8% All Types 14.2% 14.2% 14.5% 13.1% 12.8% (FS/Month) Class A Class B $1.73 $1.76 $1.68 $1.66 $1.68 Class C $1.18 $1.18 $1.18 $1.18 $1.21 All Types $1.29 $1.30 $1.28 $1.29 $1.31 Gross Absorption 24,571 4, ,786 9,497 Net Absorption 5,519 1,004-8,107 34,398 6,136 YTD Net Absorption -2,555-1,551-8,107 26,291 32,427 & Asking Rate Trend 18% 6% 11.2% 11.4% 14.9% 15.2% 14.2% 14.1% 14.6% 14.4% 14.2% 14.2% 14.5% 13.1% 12.8%

25 West Sacramento Class A 833, , , , ,792 Class B 732, , , , ,251 Class C 417, , , , ,093 All Types 1,983,136 1,983,136 1,983,136 1,983,136 1,983,136 Class A 0 23,784 23,784 23,784 23,784 Class B 163, , , , ,532 Class C 38,439 38,439 38,439 36,739 36,739 All Types 201, , , , ,055 Class A 0 0 9,949 9,949 9,949 All Types 0 0 9,949 9,949 9,949 Class A 0 23,784 33,733 33,733 33,733 Class B 163, , , , ,532 Class C 38,439 38,439 38,439 36,739 36,739 All Types 201, , , , ,004 Total Occupancy SF 1,781,399 1,754,456 1,744,507 1,783,132 1,783,132 Growth Rate (%) % -0.5% 1.9% 0. : Class A % Class B 22.3% 22.7% 22.7% 17.7% 17.7% Class C 9.2% 9.2% 9.2% 8.8% 8.8% All Types 10.2% 11.5% % 10.1% (FS/Month) Class A $1.75 $1.70 $1.70 $1.70 Class B $1.74 $1.73 $1.73 $1.73 $1.73 Class C $1.48 $1.47 $1.47 $1.47 $1.48 All Types $1.69 $1.69 $1.68 $1.68 $1.68 Gross Absorption ,625 0 Net Absorption ,943-9,949 38,625 0 YTD Net Absorption -5,877-32,820-9,949 28,676 28,676 & Asking Rate Trend 25% 2 15% 1 5% 19.9% % 10.3% 9.9% 9.9% 9.9% 10.2% 10.2% 11.5% % 10.1%

26 Sacramento Valley Office Report Woodland Winters 80 Davis 99 Citrus Rio Linda 2 Heights Orangevale North 12 Folsom Highlands Fair Oaks 80 Arcade Carmichael Arden Rancho Cordova West Sacramento SACRAMENTO Parkway Florin 99 Laguna West Elk Grove 13 Roseville Lincoln Loomis New Castle Rocklin 50 Auburn El Dorado Hills LEGEND Davis/Woodland Natomas/Northgate West Sacramento 4 Downtown Placerville 5 East SacramentoCamino 6 South Sacramento Shingle 7 Power Inn Springs 8 Elk Grove/Laguna 9 Mather Sunrise 11 Folsom/El Dorado Hills Plymouth 12 McClellan 13 Roseville/Rocklin 14 Auburn/New Castle 88 Vacaville Definitions 5 Report Published By: Cassidy Turley Sacramento 520 Capitol Mall Suite 500 Sacramento, CA Tel Fax Class A Product Steel and concrete construction, built after 1980, quality tenants, excellent amenities & premium rents. Class B Product Built after 1960, fair to good finishes & wide range of tenants. Total Building Base Includes Class A, Class B, Class C and Suburban Garden Office buildings over 10,000 square feet. Direct Availabilities Total square footage being marketed for lease by landlord available within 90 days. This may include availabilities with pending leases. Sublease Availabilities Total square footage being marketed for lease by sublessor. Total available square footage (direct & sublease) divided by Total Building Base. BTS (Build-to-Suit) A method of leasing property whereby the landlord builds to suit the tenant (according to tenant s specifications). The cost of construction is figured into the rental amount of the lease, which is usually for a long term. New Spec (Speculative) A building constructed for lease or sale but without having a tenant or buyer before construction begins. Gross Absorption Total leasing and user sale activity in the marketplace in a given time period. Net Absorption Change in occupied building square footage in a given time period. Weighted Average Full Service Rate (by available square footage) of available spaces with NNN and Gross rates converted to Full Service rates. Avg. Time on Market Weighted Average Time on market (by available square footage) of available spaces reflected in months. Availables by Size Number of current available spaces for lease in the given size. Historical Continuity Cassidy Turley maintains a building by building historical record. Comparing previous reports to this report may show different building size numbers and statistics. Changes are caused by reclassification of buildings and revised building sizes. Historical comparisons should be made from this report only as Cassidy Turley adjusts the historical record accordingly. Source Data is tracked and tallied from information provided by The Costar Group. Disclaimer: The information contained herein while not guaranteed has been secured by sources we deem reliable. All information should be verified prior to lease or sale.