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1 2017 LOCAL EXPERTISE. INTERNATIONAL REACH. WORLD CLASS. lee-associates.com

3 Another Strong Quarter For Commercial Real Estate The fundaments of The Central Los Angeles, Mid-Cities, and San Gabriel market have never been stronger, and each respective market is performing at the highest levels. Collectively, the region posted 5,173,372 million square feet of leasing activity up 8% from a year ago. LOS ANGELES - CENTRAL Los Angeles-Central vacancy rate tightened even further in the fi rst quarter to 2%. Naturally, given the tight market, there has been signifi cant upward pressure on rental rates, and asking rents have consistently trended up since they bottomed out in 20, increasing at an annual rate of 6%. Although leasing velocity remained relatively healthy in the fi rst quarter and totaled 2 M, on a year-over-year basis, leasing was down 3%. The reduction in leasing activity is a consequence of the severe shortage in available product, and not a reduction in demand. In fact, demand for industrial product has never been greater, but options, alas, are limited and there is insufficient supply to meet tenant demand. Overall vacancy for the Commerce/Vernon submarket remained at 1.9%, virtually unchanged from year end For perspective, a year ago, the vacancy rate was 2.8%. Due to lack of available product, leasing activity slowed and totaled 1.6M, down 4% from this time last year. However, because demand for Class A product is very strong, development activity is relatively healthy. Economic Indicators DOW JONES IND. AVERAGE ,5 MID-COUNTIES After two strong years of posting occupancy gains in 2014 and 15, there was a slowdown in net growth in 2016, with the Mid-Cities ending the year at -560,000 of net absorption. The tight market is putting additional upward pressure on rents, and at $.66 psf/mo, the average overall rent increased by 4% in the last year. Although the number of transactions decreased year-over-year, leasing activity increased in the fi rst quarter of 2017, with 1.1 M of space leased, compared to 1 M this time last year. CRUDE OIL PRICES (USD/ BBL) , , , , , SAN GABRIEL VALLEY With -56,666 of net absorption in the fi rst quarter, the dynamism of the SGV market continues uninterrupted. It is now entering its eight year of positive growth. Vacancy is now at 1.87%. The tight market is inhibiting companies from expanding and is thus limiting leasing activity. Totaling 4.8 M in the fi rst quarter, overall leasing activity was down 5% from a year ago. 1.7 million square feet remained under construction at the end of Q Although this is but a fraction of the total inventory, it will add much needed supply to this highly constrained market. U.S. YEAR TREASURY RATES U.S. UNEMPLOYMENT RATE

UPLAND 30 AVAILABILITY 257,005,155 BASE () 112,372,359 2.00 VACANCY (%) 1.85 5.59 AVAILABILITY (%) 5.

MID COUNTIES NORWALK FULLERTON ANAHEIM CITY OF INDUSTRY 57 71 BREA DIAMOND BAR 91 SAN BERNARDINO COUNTY ORANGE COUNTY CHINO 60 C O CHINO AIRPO C 1,077,952 LEASE ACTIVITY () 1,131,1 SOUTHBAY 405 LONG

13 Vernon Area 2.78 2.52 2.81 2.77 Mid-Counties 1.77 1.64 1.43 1.85 Q2-16 Q3-16 Q4-16 Q1-17 Downtown LA 0.72 0.68 0.71 0.71 Commerce Area 0.68 0.63 0.62 0.67 Vernon Area 0.59 0.60 0.65 0.

4 LOS ANGELES CO CENTRAL LOS ANGELES ABSORPTION VACANCY MID-COUNTIES N NUYS ENCINO STUDIO CITY BEVERLY HILLS GLENDALE 5 CENTRAL MARKET DOWNTOWN LOS ANGELES 2 VALLEY BALDWIN PARK GLENDORA POMONA UPLAND 30 AVAILABILITY 257,005,155 BASE () 112,372, VACANCY (%) AVAILABILITY (%) ,037,918 SALE ACTIVITY () 1,271,572 SANTA MONICA 1 90 MARINA DEL REY LAX EL SEGUNDO MANHATTAN BEACH 1 HERMOSA BEACH CULVER CITY TORRANCE 1 LOS ANGELES SANTA FE SPRINGS SOUTH EAST MARKET 5 MID COUNTIES NORWALK FULLERTON ANAHEIM CITY OF INDUSTRY BREA DIAMOND BAR 91 SAN BERNARDINO COUNTY ORANGE COUNTY CHINO 60 C O CHINO AIRPO C 1,077,952 LEASE ACTIVITY () 1,131,1 SOUTHBAY 405 LONG BEACH AIRPORT PALOS VERDES GARDEN GROVE ORANGE ORANGE COUNTY Vacancy Rates Average Lease Rates Q2-16 Q3-16 Q4-16 Q1-17 Downtown LA Commerce Area Vernon Area Mid-Counties Q2-16 Q3-16 Q4-16 Q1-17 Downtown LA Commerce Area Vernon Area Mid-Counties Vacancy Rates BASE AVAILABILITY RATE (%) VACANCY RATE (%) BASE AVAILABILITY RATE (%) VACANCY RATE (%) Commerce 48,121, Los Angeles 1,772, Montebello,052, Pico Rivera 9,563, Vernon 52,781, Buena Park 12,578, Cerritos 12,863, La Mirada 13,058, Norwalk 4,017, Santa Fe Springs 53,475, SELECT STATS (K AND UP) AVAILABILITY RATE THE PERCENTAGE OF ALL SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. VACANCY RATE THE PERCENTAGE OF ALL UNOCCUPIED SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. GROSS LEASE (GRS) A LEASE AGREEMENT IN WHICH THE STATED RENT BEING PAID TO THE LANDLORD INCLUDES PROPERTY TAXES AND PROPERTY INSURANCE. GROSS ABSORPTION TOTAL NUMBER OF PROPERTIES LEASED OR SOLD FOR OCCUPANCY AT A PERIOD OF TIME IN A GIVEN AREA. TRIPLE NET LEASE (NNN) A LEASE AGREEMENT WHEREBY THE TENANT IS OBLIGATED TO PAY FOR ALL THE OPERATING EXPENSES, I.E. PROPERTY TAXES, PROPERTY INSURANCE, AND FACILITY MAINTENANCE. BASE SQUARE FOOTAGE OF EXISTING AND UNDER CONSTRUCTION INDUSTRIAL BUILDINGS.

Lease & Sales Activity Downtown LA Commerce Area 2,256,501 1,693,714 3,081,885

803,464 1,118,864 1,860,395 951,484 116,661 Vernon Area Mid-Counties 1,489,263

7,611,587 5,168,908 2,034,713 2,957,049 3,858,021 6,090,648 1,461,612 Notable

REDA I LOS ANGELES in this Sale 2726 Fruitland Ave.

Double Y, LLC, a CA Corp. and the Lessee: F. Gavina & Sons, Inc.

Los Angeles, CA 90013 Mike Smith and Jim Kinetz represented the Seller: 813

this Sale SOLD 64,318 LEASED 39,384 SOLD 30,945 16205 Distribution Way.

LEASED 27,600 SOLD 23,080 LEASED 18,252 1421 240th St.

5 Lease & Sales Activity Downtown LA Commerce Area 2,256,501 1,693,714 3,081, ,457 2,415,770 1,744,846 4,505, ,128 4,506,968 3,249,084 5,038, ,464 1,118,864 1,860, , ,661 Vernon Area Mid-Counties 1,489,263 2,092,388 4,025, , ,994 1,747,342 1,619,561 66,688 5,776,962 7,611,587 5,168,908 2,034,713 2,957,049 3,858,021 6,090,648 1,461,612 Notable Transactions LEASE SALE * YTD SOLD 565,124 LEASED 4,1 SOLD 68, Union Pacific St. Los Angele, CA Doug Cline and Jack Cline represented the Seller: CHR-VII REDA I LOS ANGELES in this Sale 2726 Fruitland Ave. Vernon, CA Jim Halferty and Hovik Mirzoyan represented the Lessor: Double Y, LLC, a CA Corp. and the Lessee: F. Gavina & Sons, Inc. in this Lease 801 E. 5th St. Los Angeles, CA Mike Smith and Jim Kinetz represented the Seller: 813 East 5th Street, LLC and Jim Halferty represented the Buyer: LJ 801, LLC in this Sale SOLD 64,318 LEASED 39,384 SOLD 30, Distribution Way. Cerritos, CA Tim Cronin represented the Seller: Q Trade in this Sale 9935 Beverly Blvd. Bldg 1, Pico Rivera, CA Peter Bacci represented the Lessor in this Lease 2851 Lynwood Rd. Lynwood, CA Tony Naples represented the Seller: MRAT, LLC in this Sale LEASED 27,600 SOLD 23,080 LEASED 18, th St. Harbor City, CA 907 Craig Phillips represented the Lessor: Sara Liberman & Marcelo Liberman Trusts and the Lessee: Muntaha Dahdah in this Lease 400 W. Roosevelt Ave. Montebello, CA Tom O Loughlin represented the Seller: Cod 4 Investment Corp. and the Buyer: Harry Kortenian in this Sale 5041 S. Santa Fe Ave. Vernon, CA David Brandt and Jake Poxon represented the Lessor in this Lease

LOS ANGELES CO. 2017 ABSORPTION VACANCY SAN GABRIEL VALLEY DALE 2 SAN GABRIEL VALLEY GLENDORA UPLAND 30 AVAILABILITY BASE () 171,017,167 BALDWIN EAST MARKET PARK POMONA VACANCY (%) 1.

31 SALE ACTIVITY () 1,246,533 S 60 CITY OF INDUSTRY DIAMOND BAR CHINO 60 LEASE ACTIVITY () 4,851,045 LOS ANGELES SANTA FE SPRINGS MID COUNTIES 57 71 BREA SAN BER C AI Vacancy Rates

72 0.69 0.73 0.73 Fwy Corridor 0.61 0.64 0.65 0.65 West SGV 0.63 0.6 0.65 0.66 Vacancy Rates BASE AVAILABILITY RATE (%) VACANCY RATE (%) Azusa 8,027,497 7.87 3.

22 BASE AVAILABILITY RATE (%) VACANCY RATE (%) Industry 76,642,459 5.98 1.69 Irwindale 13,064,511 15.33 0.57 Monrovia 3,380,457 3.98 1.86 Pomona 18,422,385 6.63 1.

29 SELECT STATS (K AND UP) AVAILABILITY RATE THE PERCENTAGE OF ALL SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA.

6 LOS ANGELES CO ABSORPTION VACANCY SAN GABRIEL VALLEY DALE 2 SAN GABRIEL VALLEY GLENDORA UPLAND 30 AVAILABILITY BASE () 171,017,167 BALDWIN EAST MARKET PARK POMONA VACANCY (%) 1.87 AVAILABILITY (%) 6.31 SALE ACTIVITY () 1,246,533 S 60 CITY OF INDUSTRY DIAMOND BAR CHINO 60 LEASE ACTIVITY () 4,851,045 LOS ANGELES SANTA FE SPRINGS MID COUNTIES BREA SAN BER C AI Vacancy Rates Average Lease Rates Q2-16 Q3-16 Q4-16 Q Fwy Corridor Fwy Corridor West SGV Q2-16 Q3-16 Q4-16 Q Fwy Corridor Fwy Corridor West SGV Vacancy Rates BASE AVAILABILITY RATE (%) VACANCY RATE (%) Azusa 8,027, Baldwin Park 4,845, Covina 2,383, Diamond Bar 590, Duarte 1,268, El Monte 8,804, BASE AVAILABILITY RATE (%) VACANCY RATE (%) Industry 76,642, Irwindale 13,064, Monrovia 3,380, Pomona 18,422, South El Monte 7,675, Walnut 3,789, SELECT STATS (K AND UP) AVAILABILITY RATE THE PERCENTAGE OF ALL SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. VACANCY RATE THE PERCENTAGE OF ALL UNOCCUPIED SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. GROSS LEASE (GRS) A LEASE AGREEMENT IN WHICH THE STATED RENT BEING PAID TO THE LANDLORD INCLUDES PROPERTY TAXES AND PROPERTY INSURANCE. GROSS ABSORPTION TOTAL NUMBER OF PROPERTIES LEASED OR SOLD FOR OCCUPANCY AT A PERIOD OF TIME IN A GIVEN AREA. TRIPLE NET LEASE (NNN) A LEASE AGREEMENT WHEREBY THE TENANT IS OBLIGATED TO PAY FOR ALL THE OPERATING EXPENSES, I.E. PROPERTY TAXES, PROPERTY INSURANCE, AND FACILITY MAINTENANCE. BASE SQUARE FOOTAGE OF EXISTING AND UNDER CONSTRUCTION INDUSTRIAL BUILDINGS.

Lease & Sales Activity 60 Freeway Corridor Freeway Corridor 4,223,442

782,147 835,134 1,503,251 397,623 933,944 1,305,524 1,460,282 924,648 West

Notable Transactions SUBLEASED 95,493 LEASED 40,000 LEASE SALE * YTD

Industry, CA 91748 Adam Dzierzynski represented the Lessor: Delta

Industry, CA 91746 Michael Lee represented the Lessor: Joseph Sherman and

Whittier, CA 90601 Scott Kroman represented the Lessor: Coast Drive

Lessor: Gateway San Gabriel, Inc. in this Lease 5018 Lante St.

Properties LLC in this Sale 3832 Wacker Dr.

Campbell and the Lessee: CFABRICATION, LLC in this Lease SOLD,117

7 Lease & Sales Activity 60 Freeway Corridor Freeway Corridor 4,223,442 6,235,753 5,897,602 1,407,831 2,271,622 2,961,962 3,201,500 1,541, , ,134 1,503, , ,944 1,305,524 1,460, ,648 West SGV 784, , , , , , , ,477 Notable Transactions SUBLEASED 95,493 LEASED 40,000 LEASE SALE * YTD LEASED 32, S. Epperson Dr. Industry, CA Adam Dzierzynski represented the Lessor: Delta Logistics in this Sublease Bonelli St. Industry, CA Michael Lee represented the Lessor: Joseph Sherman and the Lessee: CWD, LLC. in this Lease E. Coast Dr. Whittier, CA Scott Kroman represented the Lessor: Coast Drive Partners in this Lease LEASED 28,255 SOLD 27,039 LEASED 16, S. Lawson St. Industry, CA Christopher Bonney and Marc DiGennaro represented the Lessor: Gateway San Gabriel, Inc. in this Lease 5018 Lante St. Baldwin Park, CA Steve Shatafian represented the Seller: Lante Properties LLC in this Sale 3832 Wacker Dr. Mira Loma, CA Jeff Bethel represented the Lessor: Susanna Newton Campbell and the Lessee: CFABRICATION, LLC in this Lease SOLD,117 LEASED, Yorbita Rd. La Puente, CA Kevin Ching represented the Seller: Yining Sun & Ru Ling Li. Henry Hong, Ben Fukukura and Simon Chen represented the Buyer: JJ&L Investment, LLC in this Sale transaction 4266 Puente Ave. Baldwin Park, CA Sam Fong and Kent Ebinger represented the Lessor: Robert Graham in this Lease

214,879,645 3.69 VACANCY (%) 5.64 4.51 AVAILABILITY (%) 7.

8 LOS ANGELES CO IE West ABSORPTION VACANCY AVAILABILITY IE EAST N GABRIEL VALLEY BALDWIN PARK GLENDORA UPLAND 30 RANCHO CUCAMONGA INLAND EMPIRE MARKET 15 FONTANA 215 SAN BERNARDINO ,587,243 BASE () 214,879, VACANCY (%) AVAILABILITY (%) 7.69 D COUNTIES CITY OF INDUSTRY DIAMOND BAR POMONA CHINO CHINO/ ONTARIO CHINO AIRPORT ONTARIO INT'L AIRPORT ONTARIO MIRA LOMA RIVERSIDE ,123,745 GROSS ABSORPTION () 4,982,587 BREA SAN BERNARDINO COUNTY ORANGE COUNTY 91 WALK CORONA 215 FULLERTON 91 Vacancy Rates Average Lease Rates Q2-16 Q3-16 Q4-16 Q1-17 IE West IE East Q2-16 Q3-16 Q4-16 Q1-17 IE West IE East Inland Empire West BASE AVAILABILITY VACANT SPACES RATE (%) RATE (%) Chino/Chino Hills 45,879, ,321, , Fontana 55,875, ,978, ,028, Mira Loma 31,569, , , Montclair 3,325, , , Ontario 1,879, ,178, ,311, Rancho Cucamonga 38,129, ,898, ,586, Upland 4,289, , , DATA FOR BUILDINGS 5,000 AND GREATER AVAILABILITY RATE THE PERCENTAGE OF ALL SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. VACANCY RATE THE PERCENTAGE OF ALL UNOCCUPIED SPACE BEING MARKETED FOR SALE OR LEASE AT A PERIOD OF TIME IN A GIVEN AREA. GROSS LEASE (GRS) A LEASE AGREEMENT IN WHICH THE STATED RENT BEING PAID TO THE LANDLORD INCLUDES PROPERTY TAXES AND PROPERTY INSURANCE. GROSS ABSORPTION TOTAL NUMBER OF PROPERTIES LEASED OR SOLD FOR OCCUPANCY AT A PERIOD OF TIME IN A GIVEN AREA. TRIPLE NET LEASE (NNN) A LEASE AGREEMENT WHEREBY THE TENANT IS OBLIGATED TO PAY FOR ALL THE OPERATING EXPENSES, I.E. PROPERTY TAXES, PROPERTY INSURANCE, AND FACILITY MAINTENANCE. BASE SQUARE FOOTAGE OF EXISTING AND UNDER CONSTRUCTION INDUSTRIAL BUILDINGS.

Inland Empire East BASE AVAILABILITY VACANT SPACES RATE (%) RATE (%) Banning 987,513 48 5,466.68 1,023.

99 Corona/Norco 30,789,574 960 1,884,322 6.12 1,268,530 4.12 Colton 8,459,741 160 294,399 3.48 133,664 1.

45 Redlands 22,008,795 209 3,792,115 17.23 2,836,934 12.89 Rialto 21,874,578 152 1,990,587 9.1 1,555,282 7.

22 DATA FOR BUILDINGS 5,000 AND GREATER Notable Transactions SUBLEASED 4,800 LEASED 248,460 SOLD 93,9 13479-13481 Valley Blvd.

Chino, CA 917 Steve Coulter and Patrick Bogan represented the Lessor: Pacific Industrial in this Lease 13477 Benson Ave.

this Sale SOLD 77,660 LEASED 44,582 1475 Magnolia Ave. Corona, CA 92879 1555 S. Archibald Ave.

9 Inland Empire East BASE AVAILABILITY VACANT SPACES RATE (%) RATE (%) Banning 987, , , Beaumont 2,481, , Bloomington 4,458, , , Corona/Norco 30,789, ,884, ,268, Colton 8,459, , , Moreno Valley 21,786, ,620, , Perris 16,875, , , Redlands 22,008, ,792, ,836, Rialto 21,874, ,990, ,555, Riverside 47,568, ,857, ,831, San Bernardino/Highland 34,587, ,728, ,805, DATA FOR BUILDINGS 5,000 AND GREATER Notable Transactions SUBLEASED 4,800 LEASED 248,460 SOLD 93, Valley Blvd. Fontana, CA Jeff Huberman represented the Lessor in this Sublease Yorba Ave. Chino, CA 917 Steve Coulter and Patrick Bogan represented the Lessor: Pacific Industrial in this Lease Benson Ave. Chino, CA 917 Steve Shatafian represented the Seller: Emhoff/ Giersbach Family Trust and the Buyer: Benson Ave Partners, LP in this Sale SOLD 77,660 LEASED 44, Magnolia Ave. Corona, CA S. Archibald Ave. Ontario, CA Steve Coulter and Patrick Bogan represented the Seller: RWB Ramona Investments and the Buyer: 1475 Magnolia, LLC in this Sale Jeff Bethel represented the Lessor: Tracy Industries, Inc. and the Lessee: Corporate Packaging in this Lease SOLD 40, La Palma Dr. Chino, CA 917 Scott Kroman represented the Seller: Gloria Jean Bouris Trust of 20 in this Sale

10 Current Listings THIS IS A SAMPLING OF OUR LISTINGS, FOR A COMPLETE LIST PLEASE VISIT: /Sale Lease/ Sale Lease/ Sale

11 THIS IS A SAMPLING OF OUR LISTINGS, FOR A COMPLETE LIST PLEASE VISIT: Lease/ Sale

12 Agents COMMERCE INDUSTRY Adam Vilan Anita Artukovich Armen Kazaryan Chuck Campbell Adam Dzierzynski Ben Fukukura Chris Bonney Henry Hong Craig Phillips David Brandt Doug Cline Edward Lee Hovik Mirzoyan Jason Woods Jeff Bethel Jeff Huberman John Espinosa Justin Jack Cline Jeff Hubbard Jeffrey Rinkov Jim Halferty Jim Kinetz JP Chiang Kent Ebinger Kevin Ching Marc DiGennaro Michael Brent Gormly Leo Vusich Matt Artukovich Michael Tsaparian Mike Smith Patrick Bogan Scott Kroman Simon Chen Stacy Martin Steve Mollie Shea Dietsch Peter Bacci Ron Young Tim Cronin Tim Wetzel Coulter Steve Shatafian Tai Ngo Travis Allan Tom O Loughlin Tony Naples PASADENA Chris Johnson Christopher Larimore John Berger Rene Soto Vince Molitor Lee & Associates Locations CALIFORNIA Anaheim Antelope Valley Calabasas Carlsbad City of Industry Commerce Gardena Irvine Long Beach Los Angeles Los Olivos Murrieta Newport Beach Oakland Ontario Orange Palmdale Palm Desert Pleasanton Pasadena Riverside San Diego San Luis Obispo Santa Barbara Santa Maria Santa Monica Sherman Oaks Stockton Temecula Victorville Ventura OTHER LOCATIONS Atlanta, GA Boise, ID Charleston, SC Chesapeake Region, MD Chicago, IL Cleveland, OH Columbus, OH Dallas, TX Denver, CO E. Pennsylvania, PA Edison, NJ Elmwood Park, NJ Fort Myers, FL Greenville, SC Greenwood, IN Houston, TX Indianapolis, IN Long Island-Queens, NY Madison, WI Manhattan, NY Minneapolis, MN Orlando, FL Phoenix, AZ Reno, NV Seattle, WA Southfield, MI St. Louis, MO Vancouver, BC For more information on Lee & Associates, or to locate a commercial real estate expert to work for you, visit: CORPORATE ID# LEE & ASSOCIATES - COMMERCE 500 Citadel Drive, Suite 140 City of Commerce, CA P: F: LEE & ASSOCIATES - INDUSTRY Crossroads Pkwy North, Suite 300 City of Industry, CA P: F: The information and details contained herein have been obtained from third-party sources believed to be reliable; however, lee & associates has not independently verified its accuracy. Lee & associates makes no representations, guarantees, or express or implied warranties of any kind regarding the accuracy or completeness of the information and details provided herein, including but not limited to the implied warranty of suitability and fitness for a particular purpose. Interested parties should perform their own due diligence regarding the accuracy of the information. The information pr e. Third-party data sources: costar group, inc., S&p dow jones, globest.com, wsj real estate, bankrate.com, loopnet, los angeles port authority, georgia port authority, american associate of port authorities, mihaylo land use institute, cal state fullerton. Copyright 2017 lee & associates all rights reserved.

Q2: An Extremely Dynamic and Demand-Intense Industrial Sector

Q2: An Extremely Dynamic and Demand-Intense Industrial Sector Industrial Market Report 3 Second Quarter Central-Los Angeles Q: An Extremely Dynamic and Demand-Intense Industrial Sector Even as other sectors of the economy lagged, the industrial sector in Q can justly