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

Transcription

1 Office Report City, State Year Sacramento Valley Second Quarter 2014 Offices in Burlingame, Los Altos, Monterey, Oakland, Palo Alto, Pleasanton, Sacramento, Salinas, San Francisco, San Jose, San Rafael, Santa Rosa, Walnut Creek Broker Lic #

2 SACRAMENTO Office Market Snapshot Second Quarter 2014 SACRAMENTO OFFICE Economics Indicators Q2 13 Q2 14 Sacramento Employment 963, ,300 Sacramento Unemployment 8.4% 6.6% U.S. Unemployment 6.7% 6.3% Market Indicators Q2 13 Q2 14 Overall 15.9% 14.9% Net Absorption SF -69K 238K Under Construction SF 0 0 Average Asking Rent (FS) $1.64 $1.65 Net Absorption/Asking Rent (Full Service) 4Q TRAILING AVERAGE Overall 18% 17% 16% 15% 14% 13% 12% 11% 4Q Trailing Net Abs.(MSF) Avg Asking (FS) Historical Average = 16.5% 12-Month Forecast 12-Month Forecast $1.90 $1.80 $1.70 $1.50 Leasing Momentum Leads to Strong Q2 The Sacramento office market continued to perform well during the second quarter of 2014, with regional vacancy falling to 14.9%, which is the lowest, post-recession vacancy rate the area has seen and the first time vacancy has fallen under 15% in nearly five years. Q2 also recorded 238,000 square feet of occupancy growth, marking the fourth consecutive quarter of occupancy growth in excess of square feet. Year to date net absorption figures currently stand at 385,000 square feet. While the private sector has been and continues to be the dominant driver of growth in the area, interestingly enough, the public sector appears to be making a quiet but noticeable reappearance. One of the largest leases of the quarter was signed by CalPers for 77,500 square feet in West Sacramento. Sacramento County also signed a lease for 54,000 square feet in Natomas. In fact, some of the largest leases of the year have been signed by public sector tenants. While it may not be a comeback per se, as many government agencies are still in contraction mode, the reappearance of public sector tenants is definitely encouraging news for the region. At the submarket level, roughly half of the region s submarkets recorded positive growth in Q2, but the majority of those that posted occupancy declines saw negligible levels of negative net absorption. Of the nine submarkets that recorded positive numbers, five of these submarkets had growth in excess of 30,000 square feet. The biggest winner of the quarter was the Point West submarket, which recorded 168,000 square feet of occupancy growth, which is the largest amount of post-recession growth this submarket has seen. The majority of this growth is attributable to Covered California taking occupancy of the 132,000 square feet that they signed for in Q1. in this trade area currently stands at 20.8%, which is the lowest recorded vacancy rate Point West has seen since Q Point West was particularly hard-hit by the recession and has since struggled to recover the vacancy rate here peaked at 32.2% at the beginning of 2012 and has consistently hovered between 27 and 3 since. Other submarkets

3 SACRAMENTO Office Market Snapshot Second Quarter 2014 that recorded over 30,000 square feet of growth include Roseville/Rocklin, Auburn/Lincoln and Highway 50/Rancho Cordova. Average Asking Rate by Submarket (Full Service) DOWNTOWN STILL THE HIGHEST RENT IN TOWN $2.25 $2.09 Rental rates continue to remain stagnant, despite strong activity and decreased vacancy. Rental rate growth is not expected until vacancy edges closer to the threshold. The good news for local landlords, however, is that the market is definitely trending this way though we think it will be at least another 18 to 24 months before vacancy levels become a possibility. So far, 2014 has experienced a good momentum of leasing activity and $1.75 Full Service $1.50 $1.25 $1.00 $1.84 $1.75 $1.74 $1.73 $1.71 $1.69 $1.66 $1.66 $1.65 $1.58 $1.53 $1.53 $1.47 $1.46 $1.40 $1.39 $1.35 $1.22 DT ES CC FOL MID NAT DW PW WTT RR RLNH H50 HF AL EDH CHO WS SS CFO We are seeing a slight uptick in larger requirements as well... Availabilities by Size Segment 5-10K SPACES INCREASE IN DEMAND notably, a few of the leases inked this year were made in buildings that have been close to or fully vacant since the recession, otherwise known as zombie buildings. Many of these zombie buildings were delivered and put onto the market right as the recession started, just as the tenant base that could possibly fill them began to contract. And though the majority of demand that we are tracking has been primarily for smaller (20,000 square feet or less) spaces, we are seeing a slight uptick in larger requirements as well. If these requirements translate into actual deals (and many, if not most of them, will), expect vacancy to fall further, at least into the low 14% or possibly even into the higher 13% range by the end of the year. Average Asking Rate by Class (Full Service) RENTAL RATES REMAIN STAGNANT $ , ,245 Listings 1, K 5-10K 10-20K 20K+ Outlook $2.40 $1.90 falls to 14.9% - the first time vacancy has fallen under 15% in five years $2.30 $1.80 The private sector continues to drive demand, but the public sector is making a reappearance Class A $2.20 $2.10 $1.70 Class B Rental rates remain stagnant. Leasing activity is strong, larger blocks of space are beginning to see an increase in demand. will continue to fall, possibly hitting the low 14% range by the end of the year $ $1.50 Class A Class B 2

4 SACRAMENTO Office Market Snapshot Second Quarter 2014 Cassidy Turley Office Market Snapshot Sacramento Second Quarter 2014 TOTAL BLDGS INVENTORY SUBLET VACANT DIRECT VACANT VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION UNDER CONSTRUCTION AVERAGE ASKING RENT (ALL Classes) AVERAGE ASKING RENT (CLASS A) Submarket Downtown Sacramento ,880,893 30,606 2,181, % (59,983) (20,834) 0 $2.09 $2.61 Auburn / Lincoln 66 1,358, , % 37,627 42,402 0 $1.47 N/A Campus Commons 41 1,221, , % 9,206 (3,861) 0 $1.75 N/A Carmichael / Fair Oaks , , % 3,710 (13,998) 0 $1.22 N/A Citrus Heights / Orangevale 52 1,437, , % (5,472) (14,297) 0 $1.40 N/A Davis / Woodland 78 1,975, , % (14,983) (3,783) 0 $1.69 $2.10 East Sacramento 32 1,840, , % 7,215 9,724 0 $1.84 N/A El Dorado Hills 71 1,646,430 12, , % 8,535 26,638 0 $1.46 Folsom 102 4,777,945 28, , % (11,225) 1,350 0 $1.74 $1.92 Highway 50 / Rancho Cordova ,219,679 72,789 2,435, % 37,389 64,029 0 $1.53 $1.80 Howe Ave / Fulton Ave 78 2,459, , % (4,173) (48,642) 0 $1.53 $1.85 Midtown Sacramento 101 3,705, , % 30,914 15,601 0 $1.73 $2.75 Natomas / Northgate 110 6,406, ,401, % (33,549) (41,696) 0 $1.71 $1.91 Point West 50 2,706,640 3, , % 168, ,885 0 $1.66 $1.84 Rio Linda / North Highlands 29 1,009, , (1,258) 0 $1.58 N/A Roseville / Rocklin ,348,117 3,896 1,861, , ,979 0 $1.65 $1.82 South Sacramento 97 3,033, , % (2,238) 9,344 0 $1.35 N/A Watt Ave 49 2,323,453 1, , % (2,150) (5,721) 0 $1.39 N/A West Sacramento 36 1,983,136 21, , % (51,513) (51,192) 0 $1.67 $1.72 Office Class Breakdown Class A ,974, ,715 3,331, % 35, ,817 0 $2.06 Class B ,188,395 49,488 6,254, % 175, ,492 0 $1.65 TOTAL 1,812 85,312, ,094 12,530, % 237, ,670 0 $1.65 $2.06 Key Lease Transactions Q2 14 PROPERTY SF TENANT LANDLORD TRANSACTION TYPE SUBMARKET 710 Riverpoint Cir 77,490 CalPers Buzz Oates New Lease West Sacramento 2101 Arena Blvd 54,234 Sacramento County Realty Advisors, Inc. New Lease Natomas/Northgate 1104 Investment Blvd 37,352 Blue Cross & Blue Shield LBA Realty New Lease El Dorado Key Investment Sale Transactions Q2 14 PROPERTY SF BUYER SELLER SALE PRICE SUBMARKET 2480 Natomas Park Dr 52, Natomas Park Dr, LLC 42 Natomas Park Dr, LLC $4,200,000 Natomas/Northgate 1900 Point West Way 56,686 Dan Caputo Company Vertical Equity Partners $4,036,818 Point West 1700 Prairie City Rd 12,149 Yang Family Revocable Trust Folsom Corners, LLC $3,700,000 Folsom 3

5 SACRAMENTO Office Market Snapshot Second Quarter 2014 Office Submarkets Sacramento About Cassidy Turley Cassidy Turley is a leading commercial real estate services provider with more than 4,000 professionals in more than 60 offices nationwide. With headquarters 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 $25.8 billion in 2013, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 24,000 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 5th Floor Sacramento, CA Tel: Fax: Managing Editor: Garrick Brown Director of Research Garrick.Brown@cassidyturley.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 2014 Cassidy Turley. All rights reserved. 4

6 Market Summary Submarket Building Vacant Space Rate Avg. Asking Sq.Ft. Direct Sublease Total Q2-14 Q2-13 (FS) Downtown Sacramento 18,880,893 2,181,788 30,606 2,212, % 11.5% $2.09 Auburn / Lincoln 1,358, , , % 16.6% $1.47 Campus Commons 1,221, , , % 21.2% $1.75 Carmichael / Fair Oaks 979,245 91, , % 12. $1.22 Citrus Heights / Orangevale 1,437, , , % 14.1% $1.40 Davis / Woodland 1,975, , , % 8.6% $1.69 East Sacramento 1,840, , , % 13.1% $1.84 El Dorado Hills 1,646, ,152 12, , % 23. $1.46 Folsom 4,777, ,573 28, , % 10.8% $1.74 Highway 50 / Rancho Cordova 17,219,679 2,435,860 72,789 2,508, % 15.7% $1.53 Howe Ave / Fulton Ave 2,459, , , % 23.9% $1.53 Midtown Sacramento 3,705, , , % 8.9% $1.73 Natomas / Northgate 6,406,363 1,401, ,401, % 21.3% $1.71 Point West 2,706, ,083 3, , % 26.4% $1.66 Rio Linda / North Highlands 1,009, , , % $1.58 Roseville / Rocklin 10,348,117 1,861,439 3,896 1,865, % $1.65 South Sacramento 3,033, , , % 17.3% $1.35 Watt Ave 2,323, ,781 1, , % 13.6% $1.39 West Sacramento 1,983, ,491 21, , % 10.7% $1.67 Totals 85,312,023 12,530, ,094 12,704, % 15.9% $1.65 Rate by Area 45% 4 35% 3 25% 15% 5% Q2-14 Q2-13 Average Asking Rate by Area (FS) $2.50 $1.50 $1.00 $0.50

7 Total Market Class A 25,923,228 25,974,397 25,974,397 25,974,397 25,974,397 Class B 39,087,449 39,129,449 39,104,449 39,166,445 39,188,395 Class C 20,164,231 20,164,231 20,164,231 20,149,231 20,149,231 Total Building Base 85,174,908 85,268,077 85,243,077 85,290,073 85,312,023 Class A 3,641,582 3,483,581 3,420,932 3,353,470 3,331,911 Class B 6,607,321 6,465,416 6,411,210 6,382,737 6,254,235 Class C 3,025,832 3,081,197 2,985,994 2,980,890 2,944,640 Total Building Base 13,274,735 13,030,194 12,818,136 12,717,097 12,530,786 Class A 168, , , , ,715 Class B 74,677 79,214 72,149 74,729 49,488 Class C 2,903 1,891 1,891 1,891 1,891 Total Building Base 246, , , , ,094 Class A 3,810,234 3,612,925 3,549,360 3,480,307 3,454,626 Class B 6,681,998 6,544,630 6,483,359 6,457,466 6,303,723 Class C 3,028,735 3,083,088 2,987,885 2,982,781 2,946,531 All Types 13,520,967 13,240,643 13,020,604 12,920,554 12,704,880 Total Occupancy SF 71,653,941 72,027,434 72,222,473 72,369,519 72,607,143 Growth Rate (%) % 0.3% 0.1% 0.3% Class A 14.7% 13.9% 13.7% 13.4% 13.3% Class B 17.1% 16.7% 16.6% 16.5% 16.1% Class C % 14.8% 14.8% 14.6% All Types 15.9% 15.5% 15.3% 15.1% 14.9% Class A $2.05 $2.05 $2.04 $2.04 $2.06 Class B $1.63 $1.63 $1.63 $1.63 $1.65 Class C $1.14 $1.16 $1.16 $1.17 $1.17 All Types $1.64 $1.63 $1.64 $1.63 $1.65 Class A 0 51, Class B 0 42, ,916 21,860 Total A & B 0 93, ,916 21,860 Gross Absorption 1,087,577 1,258, , ,826 1,027,680 Net Absorption -69, , , , ,624 YTD Net Absorption 18, , , , ,670 16% 17.5% 17.4% 17.5% 17.6% 17.4% % 15.9% 15.5% 15.3% 15.1% 14.9% 12%

8 Downtown Sacramento Class A 9,091,300 9,091,300 9,091,300 9,091,300 9,091,300 Class B 5,677,462 5,677,462 5,677,462 5,677,462 5,677,462 Class C 4,112,131 4,112,131 4,112,131 4,112,131 4,112,131 All Types 18,880,893 18,880,893 18,880,893 18,880,893 18,880,893 Class A 1,015,322 1,020, , , ,255 Class B 710, , , , ,775 Class C 398, , , , ,758 All Types 2,123,956 2,264,915 2,160,186 2,123,268 2,181,788 Class A 32,347 15,376 15,376 15,376 16,839 Class B 19,352 19,352 15,998 13,767 13,767 All Types 51,699 34,728 31,374 29,143 30,606 Class A 1,047,669 1,036, , , ,094 Class B 729, , , , ,542 Class C 398, , , , ,758 All Types 2,175,655 2,299,643 2,191,560 2,152,411 2,212,394 Total Occupancy SF 16,705,238 16,581,250 16,689,333 16,728,482 16,668,499 Growth Rate (%) 0.2% -0.7% 0.6% 0.2% -0.3% Class A 11.5% 11.4% 10.2% % Class B 12.8% 15.1% 15.5% % Class C 9.7% 9.8% 9.3% 9.5% 9.2% All Types 11.5% 12.2% 11.6% 11.4% 11.7% Class A $2.62 $2.63 $2.62 $2.59 $2.61 Class B $1.79 $1.80 $1.82 $1.82 $1.85 Class C $1.38 $1.38 $1.39 $1.38 $1.39 All Types $2.11 $2.10 $2.08 $2.07 $2.09 Gross Absorption 123, , , ,141 68,197 Net Absorption 34, , ,083 39,149-59,983 YTD Net Absorption -255, , ,529 39,149-20,834 13% 12% 12% 11% 11% 9% 12.2% 11.7% 11.5% 11.6% 11.7% 11.4% 11.1% 10.7% 10.7% 10.5% 10.3% 10.3% 10.2% $2.50 $1.50 $1.00 $0.50

9 Auburn / Lincoln Class B 627, , , , ,026 Class C 731, , , , ,710 All Types 1,358,736 1,358,736 1,358,736 1,358,736 1,358,736 Class B 125, , , , ,203 Class C 100,120 98,852 81,679 80,720 72,069 All Types 225, , , , ,272 All Types Class B 125, , , , ,203 Class C 100,120 98,852 81,679 80,720 72,069 All Types 225, , , , ,272 Total Occupancy SF 1,133,048 1,130,221 1,142,062 1,146,837 1,184,464 Growth Rate (%) -0.5% -0.2% 0.9% 0.4% 2.8% Class A Class B % 21.5% 20.9% 16.3% Class C 13.7% 13.5% 11.2% % All Types 16.6% 16.8% 15.9% 15.6% 12.8% Class A Class B $1.64 $1.63 $1.64 $1.64 $1.74 Class C $1.08 $1.08 $1.09 $1.08 $1.09 All Types $1.39 $1.39 $1.43 $1.43 $1.47 Gross Absorption 14,966 1,268 25,217 13,801 42,683 Net Absorption -6,256-2,827 11,841 4,775 37,627 YTD Net Absorption -18,298-21,125-9,284 4,775 42,402 16% 12% 11.9% 12.5% 12.7% 12.4% 13.4% 15.7% 15.3% 16.1% 16.6% 16.8% 15.9% 15.6% 12.8% 8% 4%

10 Campus Commons Class B 1,052,570 1,052,570 1,052,570 1,052,570 1,052,570 Class C 168, , , , ,577 All Types 1,221,147 1,221,147 1,221,147 1,221,147 1,221,147 Class B 232, , , , ,858 Class C 26,346 25,995 27,905 27,905 27,905 All Types 259, , , , ,763 All Types Class B 232, , , , ,858 Class C 26,346 25,995 27,905 27,905 27,905 All Types 259, , , , ,763 Total Occupancy SF 961, , , , ,384 Growth Rate (%) 2.1% 0.3% 0.3% -1.1% 0.8% Class A Class B 22.1% 21.8% 21.3% 22.5% 21.6% Class C 15.6% 15.4% 16.6% 16.6% 16.6% All Types 21.2% 20.9% 20.6% 21.7% 20.9% Class A Class B $1.73 $1.74 $1.74 $1.77 $1.76 Class C $1.62 $1.64 $1.64 $1.68 $1.67 All Types $1.72 $1.73 $1.73 $1.76 $1.75 Gross Absorption 35,725 11,599 13,585 2,251 11,156 Net Absorption 25,946 4,075 3,347-13,067 9,206 YTD Net Absorption 25,832 29,907 33,254-13,067-3, % 15% 5% 23.8% 23.4% 23.4% 23.9% 24.8% 23.5% 23.4% 23.4% 21.2% 20.9% 20.6% 21.7% 20.9% $1.80 $1.40 $1.00 $0.60 $0.20

11 Carmichael / Fair Oaks Class B 437, , , , ,190 Class C 567, , , , ,055 All Types 1,004,245 1,004, , , ,245 Class B 40,628 61,656 17,371 26,229 26,699 Class C 79,932 73,460 60,119 68,969 64,789 All Types 120, ,116 77,490 95,198 91,488 All Types Class B 40,628 61,656 17,371 26,229 26,699 Class C 79,932 73,460 60,119 68,969 64,789 All Types 120, ,116 77,490 95,198 91,488 Total Occupancy SF 883, , , , ,757 Growth Rate (%) -0.7% -1.4% 5.9% -1.8% 0.4% Class A Class B 9.3% 14.1% 4.2% 6.4% 6.5% Class C 14.1% % 12.2% 11.4% All Types % 7.9% 9.7% 9.3% Class A Class B $1.28 $1.35 $1.28 $1.30 $1.29 Class C $1.03 $1.02 $1.08 $1.19 $1.19 All Types $1.11 $1.17 $1.12 $1.22 $1.22 Gross Absorption 10,818 15,787 37, ,840 Net Absorption -6,832-14,556 32,626-17,708 3,710 YTD Net Absorption 9,957-4,599 28,027-17,708-13,998 16% 12% 8% 12.4% 13.3% 15.3% 15.1% 14.9% % % 7.9% 9.7% 9.3% 4%

12 Citrus Heights / Orangevale Class A 79,163 79,163 79,163 79,163 79,163 Class B 557, , , , ,430 Class C 800, , , , ,682 All Types 1,437,185 1,437,185 1,437,185 1,437,185 1,437,275 Class B 105,991 99,953 89,661 95,450 96,768 Class C 96,230 86,837 91,336 94,372 98,616 All Types 202, , , , ,384 All Types Class B 105,991 99,953 89,661 95,450 96,768 Class C 96,230 86,837 91,336 94,372 98,616 All Types 202, , , , ,384 Total Occupancy SF 1,234,964 1,250,395 1,256,188 1,247,363 1,241,891 Growth Rate (%) -0.2% 1.1% 0.4% -0.6% -0.4% Class A Class B % 16.1% 17.1% 17.4% Class C % 11.4% 11.8% 12.3% All Types 14.1% % 13.2% 13.6% Class A Class B $1.62 $1.61 $1.73 $1.73 $1.72 Class C $1.13 $1.11 $1.10 $1.06 $1.09 All Types $1.39 $1.38 $1.41 $1.40 $1.40 Gross Absorption 10,478 16,813 21,154 6,425 4,302 Net Absorption -2,450 15,431 5,793-8,825-5,472 YTD Net Absorption -9,827 5,604 11,397-8,825-14, % 18.9% 17.7% 16% 15.7% % 13.4% 13.9% 14.1% % 13.2% 13.6% 12% 8% 4%

13 Davis / Woodland Class A 98,000 98,000 98,000 98,000 98,000 Class B 970,981 1,012,981 1,012,981 1,012,981 1,012,981 Class C 864, , , , ,119 All Types 1,933,100 1,975,100 1,975,100 1,975,100 1,975,100 Class A 22,574 22,574 22,574 23,438 23,438 Class B 99,971 94, ,263 89,884 97,294 Class C 41,317 46,217 33,196 31,511 40,187 All Types 163, , , , ,919 Class B 2,278 2,278 1,103 1,103 0 All Types 2,278 2,278 1,103 1,103 0 Class A 22,574 22,574 22,574 23,438 23,438 Class B 102,249 96, ,366 90,987 97,294 Class C 41,317 46,217 33,196 31,511 40,187 All Types 166, , , , ,919 Total Occupancy SF 1,766,960 1,809,762 1,817,964 1,829,164 1,814,181 Growth Rate (%) 1.3% % 0.6% -0.8% Class A % 23.9% Class B 10.5% 9.5% % Class C 4.8% 5.3% 3.8% 3.6% 4.7% All Types 8.6% 8.4% % 8.1% Class A $2.10 $2.10 $2.10 $2.10 $2.10 Class B $1.72 $1.72 $1.69 $1.66 $1.69 Class C $1.49 $1.43 $1.53 $1.51 $1.46 All Types $1.71 $1.69 $1.72 $1.70 $1.69 Class B 0 42, Total A & B 0 42, Gross Absorption 41,952 49,060 23,647 23,591 30,500 Net Absorption 25,745 42,802 8,202 11,200-14,983 YTD Net Absorption 42,643 85,445 93,647 11,200-3,783 14% 12.1% 11.9% 12.4% 12% 10.8% 10.8% 11.2% 10.8% 9.9% 8.6% 8.4% 8% % 8.1% 6% 4% 2% $1.95 $1.90 $1.85 $1.80 $1.75 $1.70 $1.65 $1.55

14 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 165, , , , ,916 Class C 76,463 77,561 76,009 72,792 69,650 All Types 241, , , , ,566 All Types Class B 165, , , , ,916 Class C 76,463 77,561 76,009 72,792 69,650 All Types 241, , , , ,566 Total Occupancy SF 1,598,755 1,593,790 1,596,206 1,598,715 1,605,930 Growth Rate (%) % 0.1% 0.1% 0.4% Class A Class B % 11.2% 11.3% 11. Class C 22.5% 22.8% 22.3% 21.4% 20.5% All Types 13.1% 13.4% 13.3% 13.1% 12.7% Class A Class B $2.01 $2.01 $2.01 $2.23 $2.23 Class C $1.17 $0.94 $0.94 $0.89 $0.90 All Types $1.74 $1.67 $1.68 $1.83 $1.84 Gross Absorption 0 2,102 9,143 5,867 7,215 Net Absorption 0-4,965 2,416 2,509 7,215 YTD Net Absorption -1,183-6,148-3,732 2,509 9,724 16% 14.6% 13.8% 13.7% 13.1% 13.1% 13.1% 13.4% 13.3% 13.1% 12.7% 12% % 10.3% 8% 4% $1.80 $1.40 $1.00 $0.60 $0.20

15 El Dorado Hills Class A 136, , , , ,566 Class B 993, , , , ,863 Class C 516, , , , ,001 All Types 1,646,430 1,646,430 1,646,430 1,646,430 1,646,430 Class A 10,211 10,174 10,174 10,174 10,174 Class B 286, , , , ,648 Class C 69,183 74,988 67,725 67,240 66,330 All Types 366, , , , ,152 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 10,211 10,174 10,174 10,174 10,174 Class B 298, , , , ,855 Class C 69,183 74,988 67,725 67,240 66,330 All Types 378, , , , ,359 Total Occupancy SF 1,268,124 1,272,489 1,295,433 1,313,536 1,322,071 Growth Rate (%) 0.9% 0.3% 1.4% 1.1% 0.5% Class A 7.5% 7.4% 7.4% 7.4% 7.4% Class B 30.1% 29.1% 27.5% 25.7% 24.9% Class C 13.4% 14.5% 13.1% % All Types % 21.3% 20.2% 19.7% Class A $1.59 $1.54 $1.62 $1.62 Class B $1.61 $1.54 $1.51 $1.50 $1.50 Class C $1.36 $1.32 $1.31 $1.27 $1.31 All Types $1.56 $1.50 $1.47 $1.46 $1.46 Gross Absorption 28,852 8,641 33,716 15,520 59,744 Net Absorption 15,334 4,365 22,944 18,103 8,535 YTD Net Absorption 1,478 5,843 28,787 18,103 26, % 15% 20.3% 20.1% 21.8% 21.7% 21.7% 22.6% 23.1% 23.9% % 21.3% 20.2% 19.7% 5%

16 Folsom Class A 2,051,065 2,051,065 2,051,065 2,051,065 2,051,065 Class B 2,167,366 2,167,366 2,167,366 2,167,366 2,189,226 Class C 537, , , , ,654 All Types 4,756,085 4,756,085 4,756,085 4,756,085 4,777,945 Class A 213, , , , ,048 Class B 254, , , , ,789 Class C 25,385 78,385 78,787 77, ,736 All Types 493, , , , ,573 Class A ,815 Class B 20,008 20,008 18,215 19,618 19,618 All Types 20,008 20,008 18,215 19,618 28,433 Class A 213, , , , ,863 Class B 274, , , , ,407 Class C 25,385 78,385 78,787 77, ,736 All Types 513, , , , ,006 Total Occupancy SF 4,242,105 4,191,973 4,219,589 4,232,164 4,220,939 Growth Rate (%) 0.5% -1.1% 0.6% 0.3% -0.7% Class A 10.4% 10.3% 9.2% % Class B 12.7% 12.7% 12.4% % Class C 4.7% 14.6% 14.7% 14.3% 20.6% All Types 10.8% 11.9% 11.3% % Class A $1.90 $1.90 $1.90 $1.93 $1.92 Class B $1.66 $1.69 $1.70 $1.75 $1.76 Class C $1.47 $1.46 $1.46 $1.46 $1.46 All Types $1.75 $1.74 $1.73 $1.76 $1.74 Class B ,860 Total A & B ,860 Gross Absorption 69,385 15,074 46,688 47,656 56,719 Net Absorption 24,884-50,132 27,616 12,575-11,225 YTD Net Absorption 48,976-1,156 26,460 12,575 1,350 18% 16% 14% 12% 8% 6% 4% 2% 15.8% 14.9% 13.7% 13.9% 13.1% 12.2% 11.8% 11.3% 10.8% 11.9% 11.3% % $1.80 $1.40 $1.00 $0.60 $0.20

17 Highway 50 / Rancho Cordova Class A 5,162,347 5,162,347 5,162,347 5,162,347 5,162,347 Class B 9,500,400 9,500,400 9,500,400 9,536,480 9,536,480 Class C 2,520,852 2,520,852 2,520,852 2,520,852 2,520,852 All Types 17,183,599 17,183,599 17,183,599 17,219,679 17,219,679 Class A 501, , , , ,553 Class B 1,630,992 1,530,742 1,532,176 1,543,316 1,538,519 Class C 455, , , , ,788 All Types 2,588,181 2,417,622 2,446,526 2,458,249 2,435,860 Class A 106,615 87,789 88,755 87,789 72,789 Class B 1,317 1,317 1, All Types 107,932 89,106 90,072 87,789 72,789 Class A 608, , , , ,342 Class B 1,632,309 1,532,059 1,533,493 1,543,316 1,538,519 Class C 455, , , , ,788 All Types 2,696,113 2,506,728 2,536,598 2,546,038 2,508,649 Total Occupancy SF 14,487,486 14,676,871 14,647,001 14,673,641 14,711,030 Growth Rate (%) % -0.2% -0.1% 0.2% Class A 11.8% 9.4% 10.1% 10.2% 10.3% Class B 17.2% 16.1% 16.1% 16.2% 16.1% Class C 18.1% 19.4% 19.2% 18.8% 17.3% All Types 15.7% 14.6% 14.8% 14.8% 14.6% Class A $1.82 $1.82 $1.80 $1.78 $1.80 Class B $1.56 $1.55 $1.55 $1.52 $1.55 Class C $1.09 $1.15 $1.14 $1.14 All Types $1.54 $1.52 $1.52 $1.51 $1.53 Gross Absorption 142, , ,711 79, ,611 Net Absorption -5, ,385-29,870 26,640 37,389 YTD Net Absorption 132, , ,826 26,640 64,029 18% 16% 14% 12% 8% 6% 4% 2% % 18.1% 17.9% 17.3% 16.5% 15.7% 15.7% 14.6% 14.8% 14.8% 14.6%

18 Howe Ave / Fulton Ave Class A 186, , , , ,306 Class B 1,228,671 1,228,671 1,228,671 1,228,671 1,228,671 Class C 1,044,089 1,044,089 1,044,089 1,044,089 1,044,089 All Types 2,459,066 2,459,066 2,459,066 2,459,066 2,459,066 Class A 43,898 43,898 43,898 63,150 69,972 Class B 339, , , , ,258 Class C 201, , , , ,908 All Types 584, , , , ,138 Class B 4,202 4,202 4, All Types 4,202 4,202 4, Class A 43,898 43,898 43,898 63,150 69,972 Class B 343, , , , ,258 Class C 201, , , , ,908 All Types 588, , , , ,138 Total Occupancy SF 1,870,215 1,886,476 1,886,570 1,842,101 1,837,928 Growth Rate (%) -11.6% 0.7% % -0.2% Class A 23.6% 23.6% 23.6% 33.9% 37.6% Class B % 27.7% 27.7% 27.2% Class C 19.3% % 20.4% 20.8% All Types 23.9% 23.3% 23.3% 25.1% 25.3% Class A $1.76 $1.76 $1.76 $1.85 $1.85 Class B $1.49 $1.51 $1.49 $1.48 $1.51 Class C $1.56 $1.54 $1.53 $1.50 $1.46 All Types $1.53 $1.54 $1.52 $1.52 $1.53 Gross Absorption 34,635 38,787 16,995 16,941 18,021 Net Absorption -286,204 16, ,469-4,173 YTD Net Absorption 3,576 19,837 19,931-44,469-48, % % 24.1% 23.6% 23.1% % 23.9% 23.3% 23.3% 25.1% 25.3% 15% 12.3% 5%

19 Midtown Sacramento Class A 571, , , , ,819 Class B 1,940,640 1,940,640 1,940,640 1,940,640 1,940,640 Class C 1,192,609 1,192,609 1,192,609 1,192,609 1,192,609 All Types 3,705,068 3,705,068 3,705,068 3,705,068 3,705,068 Class A 16,688 3,625 3,625 8,229 8,229 Class B 170,419 92,436 94,475 97, ,452 Class C 141, , , , ,422 All Types 329, , , , ,103 Class B ,441 0 All Types ,441 0 Class A 16,688 3,625 3,625 8,229 8,229 Class B 170,419 92,436 94, , ,452 Class C 141, , , , ,422 All Types 329, , , , ,103 Total Occupancy SF 3,376,067 3,454,774 3,452,364 3,437,051 3,467,965 Growth Rate (%) -0.4% 2.1% -0.1% -0.4% 0.8% Class A 2.9% 0.6% 0.6% 1.4% 1.4% Class B 8.8% 4.8% 4.9% 5.6% 5.2% Class C 11.9% 12.9% % 10.7% All Types 8.9% 6.8% 6.8% 7.2% 6.4% Class A $2.25 $2.25 $2.25 $2.37 $2.75 Class B $2.01 $1.97 $1.99 $1.99 $1.96 Class C $1.68 $1.66 $1.50 $1.50 $1.49 All Types $1.88 $1.78 $1.69 $1.72 $1.73 Gross Absorption 6, ,188 6,763 18,857 53,455 Net Absorption -13,376 78,707-2,410-15,313 30,914 YTD Net Absorption -29,769 48,938 46,528-15,313 15,601 9% 8% 7% 6% 5% 4% 3% 2% 1% 8.5% 8.5% 7.8% 8.1% % 8.1% 8.5% 8.9% 6.8% 6.8% 7.2% 6.4% $2.50 $1.50 $1.00 $0.50

20 Natomas / Northgate Class A 3,622,022 3,622,022 3,622,022 3,622,022 3,622,022 Class B 2,233,296 2,233,296 2,233,296 2,233,296 2,233,296 Class C 551, , , , ,045 All Types 6,406,363 6,406,363 6,406,363 6,406,363 6,406,363 Class A 749, , , , ,416 Class B 466, , , , ,081 Class C 147, , , , ,669 All Types 1,363,010 1,344,854 1,359,470 1,367,617 1,401,166 Class A 2,219 2, All Types 2,219 2, Class A 751, , , , ,416 Class B 466, , , , ,081 Class C 147, , , , ,669 All Types 1,365,229 1,347,073 1,359,470 1,367,617 1,401,166 Total Occupancy SF 5,041,134 5,059,290 5,046,893 5,038,746 5,005,197 Growth Rate (%) % -0.2% -0.1% -0.5% Class A 20.8% 20.9% 21.2% 21.5% 22.4% Class B 20.9% 19.9% 19.9% 19.7% 19.8% Class C 26.8% 26.8% 26.8% 26.8% 26.8% All Types 21.3% % 21.3% 21.9% Class A $1.92 $1.91 $1.87 $1.89 $1.91 Class B $1.62 $1.59 $1.57 Class C $1.01 $1.04 $1.04 $1.04 $1.04 All Types $1.72 $1.71 $1.69 $1.70 $1.71 Gross Absorption 187,864 64,866 72,256 36,421 69,946 Net Absorption 62,645 18,156-12,397-8,147-33,549 YTD Net Absorption -135, , ,357-8,147-41, % 15% 24.7% 23.5% 23.2% 24.2% 24.1% 23.5% 19.2% 22.3% 21.3% % 21.3% 21.9% 5%

21 Point West Class A 858, , , , ,620 Class B 1,173,945 1,173,945 1,173,945 1,187,285 1,187,285 Class C 660, , , , ,735 All Types 2,693,300 2,693,300 2,693,300 2,706,640 2,706,640 Class A 247, , , , ,099 Class B 361, , , , ,109 Class C 89, , , , ,875 All Types 698, , , , ,083 Class A ,000 Class B 13,697 13,697 13,697 13,697 0 All Types 13,697 13,697 13,697 13,697 3,000 Class A 247, , , , ,099 Class B 375, , , , ,109 Class C 89, , , , ,875 All Types 712, , , , ,083 Total Occupancy SF 1,981,293 1,962,965 1,959,672 1,974,147 2,142,557 Growth Rate (%) -0.1% -0.7% -0.1% % Class A 28.8% % 23.8% 19. Class B % 31.9% 32.1% 21.2% Class C 13.6% % 22.2% 22.5% All Types 26.4% 27.1% 27.2% 27.1% 20.8% Class A $1.85 $1.85 $1.85 $1.85 $1.84 Class B $1.67 $1.66 $1.67 $1.66 $1.66 Class C $1.06 $1.44 $1.44 $1.45 $1.46 All Types $1.66 $1.67 $1.68 $1.67 $1.66 Class B ,340 0 Total A & B ,340 0 Gross Absorption 9,741 57,637 15,749 40, ,073 Net Absorption -1,695-18,328-3,293 14, ,410 YTD Net Absorption 72,284 53,956 50,663 14, ,885 35% 32.2% 30.9% 30.5% 31.3% 29.5% 29.1% % 26.4% 26.4% 27.1% 27.2% 27.1% 25% 20.8% 15% 5%

22 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 31,024 31,024 Class C 283, , , , ,831 All Types 313, , , , ,855 All Types Class B 29,766 29,766 29,766 31,024 31,024 Class C 283, , , , ,831 All Types 313, , , , ,855 Total Occupancy SF 695, , , , ,225 Growth Rate (%) % -0.1% 0. Class A Class B 11.9% 11.9% 11.9% 12.4% 12.4% Class C 37.4% 37.4% 35.8% 35.8% 35.8% All Types 31.1% 31.1% 29.9% Class A Class B $1.41 $1.41 $1.34 $1.24 $1.17 Class C $1.61 $1.61 $1.61 $1.61 $1.63 All Types $1.59 $1.59 $1.58 $1.57 $1.58 Gross Absorption Net Absorption ,096-1,258 0 YTD Net Absorption 10,126 10,126 22,222-1,258-1, % % 40.5% 41.4% 40.8% 32.1% 31.1% 31.1% 31.1% 29.9%

23 Roseville / Rocklin Class A 3,232,228 3,283,397 3,283,397 3,283,397 3,283,397 Class B 5,598,851 5,598,851 5,598,851 5,598,851 5,598,851 Class C 1,465,869 1,465,869 1,465,869 1,465,869 1,465,869 All Types 10,296,948 10,348,117 10,348,117 10,348,117 10,348,117 Class A 797, , , , ,255 Class B 1,157,342 1,102,357 1,082,618 1,039,415 1,009,363 Class C 216, , , , ,821 All Types 2,171,353 2,103,143 2,094,879 1,979,943 1,861,439 Class A 6,199 2,688 3,025 2,400 0 Class B 1,616 6,153 5,410 3,896 3,896 All Types 7,815 8,841 8,435 6,296 3,896 Class A 803, , , , ,255 Class B 1,158,958 1,108,510 1,088,028 1,043,311 1,013,259 Class C 216, , , , ,821 All Types 2,179,168 2,111,984 2,103,314 1,986,239 1,865,335 Total Occupancy SF 8,117,780 8,236,133 8,244,803 8,361,878 8,482,782 Growth Rate (%) 0.5% 0.6% 0.1% 1.1% 1.2% Class A 24.9% 24.1% 24.6% 22.6% 19.6% Class B 20.7% 19.8% 19.4% 18.6% 18.1% Class C 14.8% 14.4% 14.2% 13.7% 14.2% All Types 21.2% 20.4% 20.3% 19.2% 18. Class A $1.73 $1.71 $1.80 $1.81 $1.82 Class B $1.61 $1.62 Class C $1.22 $1.22 $1.23 $1.27 $1.30 All Types $1.61 $1.65 $1.65 $1.65 Class A 0 51, Total A & B 0 51, Gross Absorption 258, , , , ,637 Net Absorption 52, ,353 8, , ,904 YTD Net Absorption 52, , , , ,979 35% 29.8% 29.4% % % 26.3% 25% % 21.2% 20.4% 20.3% 19.2% % 5%

24 South Sacramento Class B 1,342,672 1,342,672 1,342,672 1,355,248 1,355,248 Class C 1,678,716 1,678,716 1,678,716 1,678,716 1,678,716 All Types 3,021,388 3,021,388 3,021,388 3,033,964 3,033,964 Class B 192, , , , ,841 Class C 331, , , , ,124 All Types 523, , , , ,965 All Types Class B 192, , , , ,841 Class C 331, , , , ,124 All Types 523, , , , ,965 Total Occupancy SF 2,497,895 2,592,513 2,585,655 2,597,237 2,594,999 Growth Rate (%) % -0.2% % Class A Class B 14.3% 13.6% 14.8% 15.1% 15.5% Class C 19.7% 14.7% 14.2% 13.8% 13.6% All Types 17.3% 14.2% 14.4% 14.4% 14.5% Class A Class B $1.52 $1.57 $1.49 $1.49 $1.44 Class C $1.24 $1.23 $1.23 $1.25 $1.27 All Types $1.34 $1.37 $1.35 $1.36 $1.35 Class B ,576 0 Total A & B ,576 0 Gross Absorption 63, ,823 41,060 21,798 40,248 Net Absorption -1,054 94,618-6,858 11,582-2,238 YTD Net Absorption -58,079 36,539 29,681 11,582 9,344 25% 15% % 19.6% 18.9% 17.8% 16.5% 17.3% 17.3% 14.2% 14.4% 14.4% 14.5% 5%

25 Watt Ave Class B 1,102,692 1,102,692 1,102,692 1,102,692 1,102,692 Class C 1,235,761 1,235,761 1,235,761 1,220,761 1,220,761 All Types 2,338,453 2,338,453 2,338,453 2,323,453 2,323,453 Class B 108, ,651 87,638 92,148 96,900 Class C 207, , , , ,881 All Types 315, , , , ,781 Class C 2,903 1,891 1,891 1,891 1,891 All Types 2,903 1,891 1,891 1,891 1,891 Class B 108, ,651 87,638 92,148 96,900 Class C 210, , , , ,772 All Types 318, , , , ,672 Total Occupancy SF 2,019,983 2,026,119 2,032,502 2,028,931 2,026,781 Growth Rate (%) 1.5% 0.3% 0.3% 0.5% -0.1% Class A Class B 9.8% 9.5% 7.9% 8.4% 8.8% Class C % 17.7% 16.6% 16.4% All Types 13.6% 13.4% 13.1% 12.7% 12.8% Class A Class B $1.43 $1.43 $1.55 $1.56 $1.53 Class C $1.24 $1.24 $1.26 $1.28 $1.32 All Types $1.30 $1.30 $1.34 $1.37 $1.39 Gross Absorption 9,786 9,497 29,518 2,688 7,158 Net Absorption -15,108 6,136 6,383-3,571-2,150 YTD Net Absorption -23,215-17,079-10,696-3,571-5,721 16% 14.5% 14.4% 11.3% 12% 14.9% 14.7% 14.5% 14.4% 14.8% 13.6% 13.4% 13.1% 12.7% 12.8% 8% 4%

26 West Sacramento Class A 833, , , , ,792 Class B 732, , , , ,441 Class C 417, , , , ,093 All Types 1,983,326 1,983,326 1,983,326 1,983,326 1,983,326 Class A 23,784 23,784 23,784 23,784 80,472 Class B 129, , , , ,738 Class C 36,739 36,739 31,684 32,366 30,281 All Types 190, , , , ,491 Class A 21,272 21,272 21,272 21,272 21,272 All Types 21,272 21,272 21,272 21,272 21,272 Class A 45,056 45,056 45,056 45, ,744 Class B 129, , , , ,738 Class C 36,739 36,739 31,684 32,366 30,281 All Types 211, , , , ,763 Total Occupancy SF 1,771,999 1,771,999 1,771,755 1,773,076 1,720,563 Growth Rate (%) 1.4% % -2.6% Class A 5.4% 5.4% 5.4% 5.4% 12.2% Class B 17.7% 17.7% 18.4% 18.1% 17.8% Class C 8.8% 8.8% 7.6% 7.8% 7.3% All Types 10.7% 10.7% 10.7% 10.6% 13.2% Class A $1.70 $1.70 $1.72 $1.72 $1.72 Class B $1.73 $1.73 $1.72 $1.68 $1.68 Class C $1.47 $1.48 $1.48 $1.46 $1.45 All Types $1.68 $1.68 $1.68 $1.65 $1.67 Gross Absorption 38, ,189 8,317 4,175 Net Absorption 27, ,321-52,513 YTD Net Absorption 17,353 17,353 17,109 1,321-51,192 14% 13.2% 11.5% % 10.3% 9.9% 9.9% 9.9% 10.2% 10.2% 10.7% 10.7% 10.7% 10.6% 8% 6% 4% 2%

27 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 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. Avg. Asking Rate 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.