CoStar Retail Statistics. F i r s t Q u a r t e r Seattle/Puget Sound Retail Market

Transcription

1 CoStar Retail Statistics F i r s t Q u a r t e r Seattle/Puget Sound Retail Market

2 First Quarter 2017 Seattle/Puget Sound Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets & Submarkets Inventory & Development Analysis Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters Downtown Seattle Market Eastside Market Northend Market Southend Market Tacoma Market 2017 CoStar Group, Inc. CoStar Retail Statistics A

3 Seattle/Puget Sound First Quarter 2017 Methodology The CoStar Retail Statistics calculates Retail statistics using CoStar Group's base of existing, under construction and under renovation Retail buildings in each given metropolitan area. All Retail building types are included, including Community Center, Freestanding Retail, Neighborhood Center, Power Center, Regional Mall, Specialty Center and Unanchored Strip Center, in both single-tenant and multi-tenant buildings, including owner-occupied buildings. CoStar Group's global database includes approximately 95.6 billion square feet of coverage in 4.4 million properties. All rental rates reported in the CoStar Retail Report are calculated using Triple Net (NNN) rental rates. For information on subscribing to CoStar s other products and services, please contact us at COSTAR, or visit our web site at Copyright 2017 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc L ST NW Washington, DC (800) NASDAQ: CSGP B CoStar Retail Statistics 2017 CoStar Group, Inc.

4 First Quarter 2017 Seattle/Puget Sound Terms & Definitions Anchor Tenant: A large national or regional retailer that serves as a primary draw for a shopping center; a store strategically located in a retail property in order to enhance, bring attention to, or increase traffic at the property. Sometimes called a destination tenant, usually these tenants lease at least 25,000 SF. Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). Community Center: A shopping center development that has a total square footage between 100, ,000 SF. Generally will have 2-3 large anchored tenants, but not department store anchors. Community Center typically offers a wider range of apparel and other soft goods than the Neighborhood Center. Among the more common anchors are supermarkets and super drugstores. Community Center tenants sometime contain retailers selling such items as apparel, home improvement/furnishings, toys, electronics or sporting goods. The center is usually configured as a strip, in a straight line, or an L or U shape. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. : The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Freestanding Retail: Single tenant building with a retail tenant. Examples include video stores, fast food restaurant, etc. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. General Retail: Typically are single tenant freestanding generalpurpose commercial buildings with parking. Many single retail buildings fall into this use code, especially when they don t meet any of the more detailed use code descriptions. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Lifestyle Center: An upscale, specialty retail, main street concept shopping center. An open center, usually without anchors, about 300,000 SF GLA or larger, located near affluent neighborhoods, includes upscale retail, trendy restaurants and entertainment retail. Nicely landscaped with convenient parking located close to the stores. Mall: The combined retail center types of Lifestyle Center, Regional Mall and Super Regional Mall. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different tenant needs. (See also: Tenancy). Neighborhood Center: Provides for the sales of convenience goods (food, drugs, etc.) and personal services (laundry, dry cleaning, etc.) for day-to-day living needs of the immediate neighborhood with a supermarket being the principal tenant. In theory, the typical GLA is 50,000 square feet. In practice, the GLA may range from 30,000 to 100,000 square feet. Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Outlet Center: Usually located in a rural or occasionally in a tourist location, an Outlet Center consists of manufacturer s outlet stores selling their own brands at a discount. 50, ,000 SF. An Outlet Center does not have to be anchored. A strip configuration is most common, although some are enclosed malls and others can be arranged in a village cluster. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Power Center: The center typically consists of several freestanding (unconnected) anchors and only a minimum amount of small specialty tenants. 250, ,000 SF. A Power Center is dominated by several large anchors, including discount department stores, offprice stores, warehouse clubs, or "category killers," i.e., stores that offer tremendous selection in a particular merchandise category at low prices. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate 2017 CoStar Group, Inc. CoStar Retail Statistics C

5 Seattle/Puget Sound First Quarter 2017 of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Regional Mall: Provides shopping goods, general merchandise, apparel, and furniture, and home furnishings in full depth and variety. It is built around the full-line department store with a minimum GLA of 100,000 square feet, as the major drawing power. For even greater comparative shopping, two, three, or more department stores may be included. In theory a regional center has a GLA of 400,000 square feet, and may range from 300,000 to more than 1,000,000 square feet. Regional centers in excess of 750,000 square feet GLA with three or more department stores are considered Super Regional. (See also: Super Regional Mall). Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Shopping Center: The combined retail center types of Community Center, Neighborhood Center and Strip Center. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Specialty Center: The combined retail center types of Airport Retail, Outlet Center and Theme/Festival Center. Sports & Entertainment: A facility suited for recreational activities, including: Amusement Facility, Aquatic Facility/Swimming Pool, Bowling Alley, Casino/Gaming Facility, Equestrian Center/Stable, Fitness, Court and Spa Facility, Golf Related, Racetrack, Skating Rink, Ski Resort, Sports Arena/Stadium, and Theatre/Performing Art Facility. Strip Center: A strip center is an attached row of stores or service outlets managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the storefronts, but a strip center does not have enclosed walkways linking the stores. A strip center may be configured in a straight line, or have an "L" or "U" shape. Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Super Regional Mall: Similar to a regional mall, but because of its larger size, a super regional mall has more anchors, a deeper selection of merchandise, and draws from a larger population base. As with regional malls, the typical configuration is as an enclosed mall, frequently with multiple levels (See also: Regional Mall). Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Theme/Festival Center: These centers typically employ a unifying theme that is carried out by the individual shops in their architectural design and, to an extent, in their merchandise. Sometimes the biggest appeal of these centers is to tourists; they can be anchored by restaurants and entertainment facilities. These centers, generally located in urban areas, tend to be adapted from older, sometimes historic, buildings, and can be part of mixed-use projects. 80, ,000 SF. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D CoStar Retail Statistics 2017 CoStar Group, Inc.

6 Overview First Quarter 2017 Seattle/Puget Sound Seattle/Puget Sound s Decreases to 3.6% Net Absorption Positive 415,168 SF in the Quarter The Seattle/Puget Sound retail market did not experience much change in market conditions in the first quarter The vacancy rate went from 3.7% in the previous quarter to 3.6% in the current quarter. Net absorption was positive 415,168 square feet, and vacant sublease space increased by 34,082 square feet. Quoted rental rates increased from fourth quarter 2016 levels, ending at $18.89 per square foot per year. A total of 3 retail buildings with 414,952 square feet of retail space were delivered to the market in the quarter, with 248,198 square feet still under construction at the end of the quarter. Net Absorption Retail net absorption was moderate in Seattle/Puget Sound first quarter 2017, with positive 415,168 square feet absorbed in the quarter. In fourth quarter 2016, net absorption was positive 484,402 square feet, while in third quarter 2016, absorption came in at negative (185,141) square feet. In second quarter 2016, positive 265,068 square feet was absorbed in the market. Tenants moving out of large blocks of space in 2017 include: Sports Authority moving out of 42,334 square feet at 505 SE Everett Mall Way; Saar s Market Place Foods moving out of 41,796 square feet at 6111 Lakewood Towne Center Blvd SW; and Staples moving out of 24,082 square feet at 628 Front St N- Staples. Tenants moving into large blocks of space in 2017 include: El Campeon Grocery moving into 57,000 square feet at Pacific Hwy S; Sportsman s Warehouse moving into 41,728 square feet at 505 SE Everett Mall Way; and PETCO moving into 25,000 square feet at th Ave NE. Seattle/Puget Sound s retail vacancy rate decreased in the first quarter 2017, ending the quarter at 3.6%. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, with the rate going from 3.7% in the second quarter 2016, to 3.9% at the end of the third quarter 2016, 3.7% at the end of the fourth quarter 2016, to 3.6% in the current quarter. The amount of vacant sublease space in the Seattle/ Puget Sound market has trended up over the past four quarters. At the end of the second quarter 2016, there were 330,913 square feet of vacant sublease space. Currently, there are 345,724 square feet vacant in the market. Largest Lease Signings The largest lease signings occurring in 2017 included: the 53,545-square-foot-lease signed by Dick s Sporting Goods at Southcenter Pky; the 42,449-square-foot-deal signed by Hobby Lobby at 1065 NW Gilman Blvd; and the 23,800-squarefoot-lease signed by Discount Direct at Orillia Station Shopping Center. Rental Rates Average quoted asking rental rates in the Seattle/Puget Sound retail market are up over previous quarter levels, and up from their levels four quarters ago. Quoted rents ended the first quarter 2017 at $18.89 per square foot per year. That compares to $18.74 per square foot in the fourth quarter 2016, and $18.09 per square foot at the end of the second quarter This represents a 0.8% increase in rental rates in the current quarter, and a 4.24% increase from four quarters ago. Rates by Building Type % Power Center Specialty Center General Retail Shopping Center Mall Total Market 11% 9% 7% 5% 3% 1% q q q q q q q q q q q 20171q 2017 CoStar Group, Inc. CoStar Retail Statistics 1

7 Seattle/Puget Sound First Quarter 2017 Overview Inventory & Construction During the first quarter 2017, three buildings totaling 414,952 square feet were completed in the Seattle/Puget Sound retail market. Over the past four quarters, a total of 765,637 square feet of retail space has been built in Seattle/ Puget Sound. In addition to the current quarter, nine buildings with 164,257 square feet were completed in fourth quarter 2016, four buildings totaling 91,162 square feet completed in third quarter 2016, and 95,266 square feet in seven buildings completed in second quarter There were 248,198 square feet of retail space under construction at the end of the first quarter Some of the notable 2017 deliveries include: New Ikea 2017, a 406,000-square-foot facility that delivered in first quarter 2017 and is now 100% occupied, and 1604 S 336th St - Advance Auto Parts, a 6,912-square-foot building that delivered in first quarter 2017 and is now 100% occupied. Total retail inventory in the Seattle/Puget Sound market area amounted to 174,372,001 square feet in 15,045 buildings and 1417 centers as of the end of the first quarter Shopping Center The Shopping Center market in Seattle/Puget Sound currently consists of 1373 projects with 57,807,163 square feet of retail space in 3,044 buildings. In this report the Shopping Center market is comprised of all Community Center, Neighborhood Center, and Strip Centers. After absorbing (82,189) square feet and delivering no new space in the current quarter, the Shopping Center sector saw the vacancy rate go from 7.1% at the end of the fourth quarter 2016 to 7.3% this quarter. Over the past four quarters, the Shopping Center vacancy rate has gone from 7.1% at the end of the second quarter 2016, to 7.5% at the end of the third quarter 2016, to 7.1% at the end of the fourth quarter 2016, and finally to 7.3% at the end of the current quarter. & Rent Past 7 Quarters Price in Dollars per Unit $19 $19 $18 $18 $17 $17 Average Rental Rate Rate q q q q 4.3% 4.2% 4.1% 4.0% 3.9% 3.8% 3.7% 3.6% 3.5% 3.4% 3.3% Rate Percentage Rental rates ended the first quarter 2017 at $18.08 per square foot, up from the $18.05 they were at the end of fourth quarter Rental rates have trended up over the past year, going from $17.36 per square foot a year ago to their current levels. Net absorption in the Shopping Center sector has totaled (31,171) square feet over the past four quarters. In addition to the negative (82,189) square feet absorbed this quarter, positive 216,386 square feet was absorbed in the fourth quarter 2016, negative (140,469) square feet was absorbed in the third quarter 2016, and negative (24,899) square feet was absorbed in the second quarter Power Centers The Power Center average vacancy rate was 3.4% in the first quarter With positive 15,721 square feet of net absorption and no new deliveries, the vacancy rate went from 3.6% at the end of last quarter to 3.4% at the end of the first quarter. In the fourth quarter 2016, Power Centers absorbed positive 7,959 square feet, delivered no new space, and the vacancy rate went from 3.7% to 3.6% over the course of the quarter. Rental started the quarter at $26.16 per square foot and ended the quarter at $23.74 per square foot. A year ago, in first quarter 2016, the vacancy rate was 3.1%. Over the past four quarters, Power Centers have absorbed a cumulative (19,335) square feet of space and delivered cumulative 12,067 square feet of space. There was no sublease space over that same period, and rental rates have gone from $26.24 to $ At the end of the first quarter 2017, there was no space under construction in the Seattle/Puget Sound market. The total stock of Power Center space in Seattle/Puget Sound currently sits at 9,048,387 square feet in 21 centers comprised of 210 buildings. No space was under construction at the end of the first quarter General Retail Properties The General Retail sector of the market, which includes all freestanding retail buildings, except those contained within a center, reported a vacancy rate of 1.8% at the end of first quarter There was a total of 1,619,875 square feet vacant at that time. The General Retail sector in Seattle/Puget Sound currently has average rental rates of $19.47 per square foot per year. There are 102,267 square feet of space under construction in this sector, with 414,952 square feet having been completed in the first quarter. In all, there are a total of 11,557 buildings with 92,114,058 square feet of General Retail space in Seattle/Puget Sound. Specialty Centers There are currently 5 Specialty Centers in the Seattle/ 2 CoStar Retail Statistics 2017 CoStar Group, Inc.

8 Overview First Quarter 2017 Seattle/Puget Sound Puget Sound market, making up 1,135,072 square feet of retail space. In this report the Specialty Center market is comprised of Outlet Center, Airport Retail and Theme/Festival Centers. Specialty Centers in the Seattle/Puget Sound market have experienced no net absorption in The vacancy rate currently stands at 1.0%, and rental rates average $15.97 per square foot. Malls Malls recorded net absorption of positive 6,746 square feet in the first quarter This net absorption number, combined with no new space that was built in the quarter, caused the vacancy rate to go from 1.5% a quarter ago to 1.5% at the end of the first quarter Rental rates went from $30.79 per square foot to $30.03 per square foot during that time. In this report the Mall market is comprised of 18 Lifestyle Center, Regional Mall and Super Regional Malls. Sales Activity Tallying retail building sales of 15,000 square feet or larger, Seattle/Puget Sound retail sales figures rose during the fourth quarter 2016 in terms of dollar volume compared to the third quarter of In the fourth quarter, 17 retail transactions closed with a total volume of $169,921,500. The 17 buildings totaled 648,319 square feet and the average price per square foot equated to $ per square foot. That compares to 13 transactions totaling $128,286,100 in the third quarter The total square footage in the third quarter was 601,755 square feet for an average price per square foot of $ Total retail center sales activity in 2016 was up compared to In the twelve months of 2016, the market saw 69 retail sales transactions with a total volume of $862,676,532. Absorption & Deliveries Past 7 Quarters Millions SF (0.1) (0.2) (0.3) Net Absorption The price per square foot averaged $ In the same twelve months of 2015, the market posted 87 transactions with a total volume of $844,017,749. The price per square foot averaged $ Cap rates have been lower in 2016, averaging 6.05% compared to the same period in 2015 when they averaged 6.57%. One of the largest transactions that has occurred within the last four quarters in the Seattle/Puget Sound market is the sale of Alderwood Plaza in Lynnwood, WA. This 175,387- square-foot retail center sold for $40,500,000, or about $231 per square foot. The property sold on 5/11/16. Reports compiled by: Jordan Sisson, CoStar Research Manager and Elizabeth Davis, Research Associate II (0.19) Deliveries q q q q 2017 CoStar Group, Inc. CoStar Retail Statistics 3

9 Seattle/Puget Sound First Quarter 2017 Markets CoStar Submarket Clusters & Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters Submarkets Downtown Seattle Ballard/U Dist Belltown/Denny Regrade Capitol Hill/Central Dist Lake Union Pioneer Sq/Waterfront Queen Anne/Magnolia S Seattle Seattle CBD Eastside 520 Corridor Bellevue CBD Coal Creek/Issaquah E King County I-90 Corridor Kirkland Mercer Island Redmond Suburban Bellevue Northend Bothell/Kenmore Edmonds/Lynnwood Everett CBD Mill Creek/Woodinville N Snohomish County Northgate/N Seattle S Everett/Harbor Point S Snohomish County Southend Federal Way/Auburn Kent Valley Renton/Tukwila Seatac/Burien Tacoma Dupont E Pierce County Fort Lewis Gig Harbor/W Pierce Co Puyallup Spanaway Tacoma CBD Tacoma Suburban Univ. Place/Lakewood 4 CoStar Retail Statistics 2017 CoStar Group, Inc.

10 Inventory & development First Quarter 2017 Seattle/Puget Sound Historical Deliveries Deliveries Average Delivered SF Millions of SF * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction Square Footage Under Construction Inventory Average Bldg Size Market # Bldgs Total GLA Preleased SF Preleased % All Existing U/C Tacoma 7 122,518 91, % 10,008 17,503 Downtown Seattle 4 68,597 66, % 8,409 17,149 Eastside 8 48,403 18, % 16,169 6,050 Northend 2 8,200 8, % 12,544 4,100 Southend % 13, Totals , , % 11,590 11,282 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2013 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 1.2 Leased Un-Leased 90 Preleased Un-Leased Millions of SF Thousands of SF T q q 2017 CoStar Group, Inc. CoStar Retail Statistics 5

11 Seattle/Puget Sound First Quarter 2017 Inventory & development Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.6 Construction Starts Deliveries Millions of SF (0.00) (0.1) (0.06) q q q q q q q q q q q q q Recent Deliveries by Project Size of Year-to-Date Development Building Size # Bldgs GLA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF 2 8,952 6, % $0.00 6,912 2,040 50,000 SF - 99,999 SF % $ ,000 SF - 249,999 SF % $ ,000 SF - 499,999 SF 1 406, , % $ ,000 >= 500,000 SF % $ Recent Development by Tenancy Based on GLA Developed for Single & Multi Tenant Use 2017 Deliveries Currently Under Construction Comparison Based on Total GLA General Retail 2% 5% Shopping Center Mall 98% 95% Power Center Specialty Center Multi Single Multi Single Millions of SF CoStar Retail Statistics 2017 CoStar Group, Inc.

12 Inventory & development First Quarter 2017 Seattle/Puget Sound 2017 CoStar Group, Inc. CoStar Retail Statistics 7

13 Seattle/Puget Sound First Quarter 2017 Inventory & development 8 CoStar Retail Statistics 2017 CoStar Group, Inc.

14 Figures at a Glance First Quarter 2017 Seattle/Puget Sound General Retail Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Blds Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 2,953 22,304, , , % (108,616) 0 68,597 $26.80 Eastside 1,101 11,143, , , % 4,404 2,040 25,648 $25.25 Northend 2,801 23,522, , , % 18, ,400 $16.23 Southend 1,637 14,555, , , % 470, , $15.13 Tacoma 3,065 20,587, , , % 90, ,142 $16.13 Totals 11,557 92,114,058 1,573,008 1,619, % 474, , ,267 $19.47 Mall Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 2 592,681 27,571 27, % 1, $44.68 Eastside 5 3,444,312 84,700 84, % 2, $0.00 Northend 4 3,614,518 11,086 11, % $19.84 Southend 4 4,062,387 76,122 76, % $19.56 Tacoma 3 2,553,423 9,309 9, % 2, $29.48 Totals 18 14,267, , , % 6, $30.03 Power Center Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 1 409,905 23,124 23, % (10,842) 0 0 $30.05 Eastside 4 1,546,633 52,037 52, % 3, $19.15 Northend 9 3,451,246 15,891 15, % $23.93 Southend 4 1,919, , , % 38, $29.05 Tacoma 3 1,720, , , % (15,191) 0 0 $25.14 Totals 21 9,048, , , % 15, $24.01 Shopping Center Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 114 2,926,273 62,380 93, % (25,582) 0 0 $20.76 Eastside ,448, , , % (48,078) 0 22,755 $27.23 Northend ,162,929 1,258,322 1,369, % 16, ,800 $18.62 Southend ,068, , , % (23,247) 0 0 $17.24 Tacoma ,201,471 1,284,770 1,405, % (1,692) 0 118,376 $15.73 Totals 1,373 57,807,163 3,909,263 4,208, % (82,189) 0 145,931 $18.08 Specialty Center Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 1 43, % $0.00 Eastside 1 389, % $0.00 Northend 1 400, % $0.00 Southend % $0.00 Tacoma 2 300,618 11,414 11, % $15.97 Totals 5 1,135,072 11,414 11, % $ CoStar Group, Inc. CoStar Retail Statistics 9

15 Seattle/Puget Sound First Quarter 2017 Figures at a Glance Total Retail Market Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Blds Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Downtown Seattle 3,125 26,277, , , % (143,209) 0 68,597 $26.65 Eastside 1,730 27,972, , , % (38,217) 2,040 48,403 $25.68 Northend 3,759 47,152,211 1,673,034 1,794, % 34, ,200 $18.01 Southend 2,298 31,606,576 1,258,551 1,288, % 485, , $17.21 Tacoma 4,133 41,364,106 1,811,807 1,932, % 76, ,518 $16.10 Totals 15, ,372,001 6,012,659 6,358, % 415, , ,198 $ CoStar Retail Statistics 2017 CoStar Group, Inc.

16 Figures at a Glance First Quarter 2017 Seattle/Puget Sound General Retail Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Blds Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor 72 1,163, % 0 0 6,000 $29.12 Ballard/U Dist 1,251 7,335, , , % (16,264) 0 66,122 $27.12 Bellevue CBD ,926 28,116 28, % (19,000) 0 0 $41.63 Belltown/Denny Regra ,275, , , % (58,505) 0 0 $26.27 Bothell/Kenmore 270 2,079,775 19,436 19, % (6,872) 0 0 $22.41 Capitol Hill/Central ,739,413 40,588 40, % (12,762) 0 0 $31.27 Coal Creek/Issaquah ,180 8,600 8, % 5,700 2,040 1,942 $28.98 Dupont 12 75,443 5,729 5, % $29.00 E King County 324 2,829,310 78,332 78, % (12,276) 0 0 $15.97 E Pierce County 181 1,146,470 15,519 15, % ,142 $20.32 Edmonds/Lynnwood 429 4,063,049 66,064 66, % 25, $17.46 Everett CBD 502 3,287,248 53,010 53, % 19, $12.87 Federal Way/Auburn 464 3,765,473 72,125 72, % 76,902 6, $15.21 Fort Lewis 18 66, % $0.00 Gig Harbor/W Pierce ,893 3,880 3, % (2,783) 0 0 $20.58 I-90 Corridor ,596 6,565 6, % ,306 $35.78 Kent Valley 293 2,110,649 35,558 35, % (423) 0 0 $12.40 Kirkland 168 1,770,226 4,454 4, % (4,454) 0 6,400 $28.03 Lake Union 101 1,096,140 16,321 16, % (1,225) 0 0 $28.30 Mercer Island ,199 2,051 2, % 2, $26.11 Mill Creek/Woodinvil ,476,816 4,737 4, % $22.71 N Snohomish County 449 4,181, , , % (9,065) 0 3,400 $13.90 Northgate/N Seattle 463 3,563,162 21,673 21, % (1,314) 0 0 $23.20 Pioneer Sq/Waterfron. 83 1,278,372 29,150 29, % 5, $28.56 Puyallup 293 1,881,505 19,485 19, % 1, $15.97 Queen Anne/Magnolia 277 1,773,084 19,815 33, % (7,960) 0 2,475 $27.08 Redmond 127 1,353,350 13,059 13, % 25, $24.00 Renton/Tukwila 409 5,560,517 62,846 62, % 417, ,000 0 $18.60 S Everett/Harbor Poi ,592,747 52,703 52, % (6,408) 0 0 $13.99 S Seattle 685 4,770,100 50,565 50, % (15,837) 0 0 $23.23 S Snohomish County 257 2,278,289 38,242 38, % (3,249) 0 0 $20.75 Seatac/Burien 471 3,119,127 68,562 68, % (23,146) 0 0 $12.54 Seattle CBD 57 2,036,044 21,467 41, % (1,762) 0 0 $0.00 Spanaway 383 2,773,155 37,865 37, % 21, $17.33 Suburban Bellevue 160 1,867,345 16,732 16, % 6, $26.30 Tacoma CBD 188 1,953,923 91,854 91, % 67, $13.55 Tacoma Suburban 1,332 8,197, , , % 4, $15.92 Univ. Place/Lakewood 494 3,761,981 45,505 45, % (2,534) 0 0 $13.34 Totals 11,557 92,114,058 1,573,008 1,619, % 474, , ,267 $ CoStar Group, Inc. CoStar Retail Statistics 11

17 Seattle/Puget Sound First Quarter 2017 Figures at a Glance Mall Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor % $0.00 Ballard/U Dist 1 365, % $0.00 Bellevue CBD 2 1,886,889 29,465 29, % 2, $0.00 Belltown/Denny Regra % $0.00 Bothell/Kenmore % $0.00 Capitol Hill/Central % $0.00 Coal Creek/Issaquah % $0.00 Dupont % $0.00 E King County 1 313, % $0.00 E Pierce County % $0.00 Edmonds/Lynnwood 1 1,724, % $0.00 Everett CBD % $0.00 Federal Way/Auburn 2 2,000,013 54,494 54, % $20.83 Fort Lewis % $0.00 Gig Harbor/W Pierce ,341 9,309 9, % 2, $29.48 I-90 Corridor 1 531,388 24,518 24, % $0.00 Kent Valley 1 219,082 21,628 21, % $9.20 Kirkland % $0.00 Lake Union % $0.00 Mercer Island % $0.00 Mill Creek/Woodinvil ,409 1,541 1, % $32.27 N Snohomish County % $0.00 Northgate/N Seattle 1 1,021, % $0.00 Pioneer Sq/Waterfron % $0.00 Puyallup 1 973, % $0.00 Queen Anne/Magnolia % $0.00 Redmond 1 712,291 30,717 30, % $0.00 Renton/Tukwila 1 1,843, % $0.00 S Everett/Harbor Poi ,791 8,761 8, % $13.50 S Seattle % $0.00 S Snohomish County % $0.00 Seatac/Burien % $0.00 Seattle CBD 1 227,356 27,571 27, % 1, $44.68 Spanaway % $0.00 Suburban Bellevue % $0.00 Tacoma CBD % $0.00 Tacoma Suburban 1 1,401, % $0.00 Univ. Place/Lakewood % $0.00 Totals 18 14,267, , , % 6, $ CoStar Retail Statistics 2017 CoStar Group, Inc.

18 Figures at a Glance First Quarter 2017 Seattle/Puget Sound Power Center Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor % $0.00 Ballard/U Dist % $0.00 Bellevue CBD % $0.00 Belltown/Denny Regra % $0.00 Bothell/Kenmore % $0.00 Capitol Hill/Central % $0.00 Coal Creek/Issaquah 2 838,274 3,380 3, % 5, $0.00 Dupont % $0.00 E King County % $0.00 E Pierce County % $0.00 Edmonds/Lynnwood 3 1,120,924 12,790 12, % $21.63 Everett CBD % $0.00 Federal Way/Auburn 2 761,059 40,066 40, % $27.25 Fort Lewis % $0.00 Gig Harbor/W Pierce % $0.00 I-90 Corridor % $0.00 Kent Valley % $0.00 Kirkland % $0.00 Lake Union % $0.00 Mercer Island % $0.00 Mill Creek/Woodinvil , % $35.79 N Snohomish County 3 1,013,184 3,101 3, % $20.35 Northgate/N Seattle 1 469, % $29.00 Pioneer Sq/Waterfron % $0.00 Puyallup 1 467, % $0.00 Queen Anne/Magnolia % $0.00 Redmond 1 202,915 5,400 5, % (2,000) 0 0 $29.53 Renton/Tukwila 2 1,158,909 63,929 63, % 38, $35.00 S Everett/Harbor Poi % $0.00 S Seattle 1 409,905 23,124 23, % (10,842) 0 0 $30.05 S Snohomish County 1 454, % $24.82 Seatac/Burien % $0.00 Seattle CBD % $0.00 Spanaway 1 382,335 40,068 40, % $28.00 Suburban Bellevue 1 505,444 43,257 43, % $18.00 Tacoma CBD % $0.00 Tacoma Suburban % $0.00 Univ. Place/Lakewood 1 870,749 75,071 75, % (15,191) 0 0 $21.77 Totals 21 9,048, , , % 15, $ CoStar Group, Inc. CoStar Retail Statistics 13

19 Seattle/Puget Sound First Quarter 2017 Figures at a Glance Shopping Center Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor ,766 5,213 5, % $22.01 Ballard/U Dist ,363 30,286 30, % (750) 0 0 $29.51 Bellevue CBD 21 1,042, , , % 4, $43.84 Belltown/Denny Regra , % $0.00 Bothell/Kenmore 43 2,205,153 51,622 68, % 10, $22.33 Capitol Hill/Central ,526 2,254 2, % $26.07 Coal Creek/Issaquah 27 1,816,368 88,608 89, % (41,630) 0 22,755 $22.81 Dupont 4 57, % $26.31 E King County 67 3,886, , , % 6, $22.41 E Pierce County 34 2,508, , , % (5,841) 0 0 $14.67 Edmonds/Lynnwood 99 3,913, , , % 20, $19.96 Everett CBD ,907 19,212 20, % (342) 0 0 $17.45 Federal Way/Auburn 91 4,013, , , % (4,269) 0 0 $14.91 Fort Lewis 3 17, % $0.00 Gig Harbor/W Pierce. 19 1,367,353 70,016 73, % 4, ,376 $23.26 I-90 Corridor 6 346,017 1,276 1, % $39.15 Kent Valley 35 1,397, , , % (15,142) 0 0 $18.43 Kirkland 33 1,017,191 27,043 27, % (4,482) 0 0 $23.29 Lake Union 5 151, % $21.28 Mercer Island 6 222,587 4,955 4, % (868) 0 0 $27.29 Mill Creek/Woodinvil. 38 1,918, , , % 15, $26.13 N Snohomish County 46 2,578, , , % (12,537) 0 4,800 $13.20 Northgate/N Seattle 29 1,268,219 41,801 41, % 2, $20.69 Pioneer Sq/Waterfron. 2 30, % $0.00 Puyallup , , , % $10.67 Queen Anne/Magnolia , % $26.00 Redmond ,101 25,920 25, % (4,203) 0 0 $30.17 Renton/Tukwila 64 3,309, , , % 2, $20.31 S Everett/Harbor Poi. 62 2,952, , , % (21,311) 0 0 $18.75 S Seattle ,988 25,430 56, % (25,399) 0 0 $16.18 S Snohomish County ,513 61, , % 1, $19.17 Seatac/Burien 77 2,348, , , % (6,295) 0 0 $18.23 Seattle CBD 3 449,763 4,410 4, % $25.00 Spanaway 92 3,548, , , % 7, $17.22 Suburban Bellevue 25 1,378,615 21,245 27, % (8,116) 0 0 $28.21 Tacoma CBD 6 73, % $13.80 Tacoma Suburban 133 5,049, , , % 17, $16.50 Univ. Place/Lakewood 93 2,598, , , % (24,694) 0 0 $15.47 Totals 1,373 57,807,163 3,909,263 4,208, % (82,189) 0 145,931 $ CoStar Retail Statistics 2017 CoStar Group, Inc.

20 Figures at a Glance First Quarter 2017 Seattle/Puget Sound Specialty Center Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Ctrs Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor % $0.00 Ballard/U Dist % $0.00 Bellevue CBD % $0.00 Belltown/Denny Regra % $0.00 Bothell/Kenmore % $0.00 Capitol Hill/Central % $0.00 Coal Creek/Issaquah % $0.00 Dupont % $0.00 E King County 1 389, % $0.00 E Pierce County % $0.00 Edmonds/Lynnwood % $0.00 Everett CBD % $0.00 Federal Way/Auburn % $0.00 Fort Lewis % $0.00 Gig Harbor/W Pierce % $0.00 I-90 Corridor % $0.00 Kent Valley % $0.00 Kirkland % $0.00 Lake Union % $0.00 Mercer Island % $0.00 Mill Creek/Woodinvil % $0.00 N Snohomish County 1 400, % $0.00 Northgate/N Seattle % $0.00 Pioneer Sq/Waterfron. 1 43, % $0.00 Puyallup % $0.00 Queen Anne/Magnolia % $0.00 Redmond % $0.00 Renton/Tukwila % $0.00 S Everett/Harbor Poi % $0.00 S Seattle % $0.00 S Snohomish County % $0.00 Seatac/Burien % $0.00 Seattle CBD % $0.00 Spanaway % $0.00 Suburban Bellevue % $0.00 Tacoma CBD % $0.00 Tacoma Suburban 1 78, % $0.00 Univ. Place/Lakewood 1 222,275 11,414 11, % $15.97 Totals 5 1,135,072 11,414 11, % $ CoStar Group, Inc. CoStar Retail Statistics 15

21 Seattle/Puget Sound First Quarter 2017 Figures at a Glance Total Retail Submarket Statistics First Quarter 2017 YTD Net YTD Under Quoted Market # Blds Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates 520 Corridor 105 2,064,894 5,213 5, % ,000 $23.40 Ballard/U Dist 1,306 8,333, , , % (17,014) 0 66,122 $27.36 Bellevue CBD 110 3,742, , , % (12,391) 0 0 $43.15 Belltown/Denny Regra ,381, , , % (58,505) 0 0 $26.27 Bothell/Kenmore 401 4,284,928 71,058 88, % 3, $22.35 Capitol Hill/Central ,020,939 42,842 42, % (12,195) 0 0 $30.48 Coal Creek/Issaquah 212 3,474, , , % (30,657) 2,040 24,697 $24.24 Dupont ,534 5,729 5, % $27.85 E King County 552 7,418, , , % (5,790) 0 0 $20.39 E Pierce County 292 3,654, , , % (5,031) 0 4,142 $15.13 Edmonds/Lynnwood ,821, , , % 45, $19.22 Everett CBD 536 3,911,155 72,222 73, % 19, $13.43 Federal Way/Auburn ,539, , , % 72,633 6, $16.20 Fort Lewis 23 84, % $0.00 Gig Harbor/W Pierce ,276,587 83,205 86, % 4, ,376 $23.60 I-90 Corridor 60 1,159,001 32,359 32, % ,306 $36.84 Kent Valley 381 3,727, , , % (15,565) 0 0 $16.69 Kirkland 235 2,787,417 31,497 31, % (8,936) 0 6,400 $25.40 Lake Union 108 1,247,911 16,321 16, % (1,225) 0 0 $25.98 Mercer Island ,786 7,006 7, % 1, $26.55 Mill Creek/Woodinvil ,079, , , % 15, $26.27 N Snohomish County 606 8,174, , , % (21,602) 0 8,200 $13.77 Northgate/N Seattle 528 6,322,716 63,474 63, % 1, $21.98 Pioneer Sq/Waterfron. 86 1,352,804 29,150 29, % 5, $28.56 Puyallup 357 4,303, , , % 1, $11.49 Queen Anne/Magnolia 296 2,176,001 19,815 33, % (7,960) 0 2,475 $27.05 Redmond 194 3,105,657 75,096 75, % 19, $27.64 Renton/Tukwila ,871, , , % 458, ,000 0 $20.43 S Everett/Harbor Poi ,121, , , % (27,719) 0 0 $17.58 S Seattle 751 6,050,993 99, , % (52,078) 0 0 $21.11 S Snohomish County 318 3,435,589 99, , % (2,034) 0 0 $20.51 Seatac/Burien 620 5,468, , , % (29,441) 0 0 $16.55 Seattle CBD 64 2,713,163 53,448 73, % $38.03 Spanaway 629 6,704, , , % 28, $17.98 Suburban Bellevue 225 3,751,404 81,234 87, % (1,343) 0 0 $21.91 Tacoma CBD 195 2,027,335 91,854 91, % 67, $13.61 Tacoma Suburban 1,668 14,726, , , % 21, $16.34 Univ. Place/Lakewood 697 7,453, , , % (42,419) 0 0 $15.66 Totals 15, ,372,001 6,012,659 6,358, % 415, , ,198 $ CoStar Retail Statistics 2017 CoStar Group, Inc.

22 Figures at a Glance First Quarter 2017 Seattle/Puget Sound 2017 CoStar Group, Inc. CoStar Retail Statistics 17

23 Seattle/Puget Sound First Quarter 2017 Figures at a Glance 18 CoStar Retail Statistics 2017 CoStar Group, Inc.

24 Leasing Activity First Quarter 2017 Seattle/Puget Sound Historical Rental Rates Based on NNN Rental Rates Power Center Specialty Center General Retail Shopping Center Mall Total Market $50.00 Dollars/SF/Year $40.00 $30.00 $20.00 $10.00 $ q q q q q q q q q q q q by Available Space Type Percent of All Vacant Space in Direct vs. Sublet by Building Type Percent of All Vacant Space by Building Type 5% Shopping Center General Retail Power Center Mall 95% Specialty Center Direct Sublet 0% 10% 20% 30% 40% 50% 60% 70% GLA By Building Type Ratio of Total GLA by Building Type General Retail Future Space Available Space Scheduled to be Available for Occupancy* 0.3 Shopping Center Mall Millions 0.1 Power Center Specialty Center Millions of SF q q * Includes Under Construction Spaces 2017 CoStar Group, Inc. CoStar Retail Statistics 19

25 Seattle/Puget Sound First Quarter 2017 Leasing Activity Select Top Retail Leases Based on Leased Square Footage For Deals Signed in 2017 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company Southcenter Pky Renton/Tukwila 53,545 1st Dick s Sporting Goods N/A Kimco Realty Corporation 2 Town & Country Square - Bldg B Coal Creek/Issaquah 42,449 1st Hobby Lobby N/A Kidder Mathews 3 Orillia Station Shopping Center Kent Valley 23,800 1st Discount Direct N/A Seattle Pacic Realty, Inc. 4 Lakewood Towne Center Univ. Place/Lakewood 15,564 1st Party City N/A JSH Properties, Inc. 5 Lynnwood East Business Park - Building A Edmonds/Lynnwood 14,554 1st Trader Joes N/A JSH Properties, Inc Bellevue Way NE Bellevue CBD 11,635 1st AAA Washington N/A Wallace Properties, Inc. 7 Langston Landing - Bldg B Kent Valley 9,900 1st N/A N/A Neil Walter Company Canyon Rd E Spanaway 9,300 1st Soceity of St. Vincent depaul N/A Kidder Mathews nd St SE S Everett/Harbor Point 8,502 1st N/A N/A MK Property Services 10 Monroe Plaza S Snohomish County 7,103 1st N/A N/A Beta Commercial Properties 11 Kent Station - Bldg 1 Kent Valley 6,614 1st N/A N/A Direct Deal 12 Sit and Spin Bldg Belltown/Denny Regrade 6,480 1st N/A N/A Ewing & Clark, Inc th Ave NE N Snohomish County 5,548 1st Another Castle N/A First Western Properties 14 The Meridian Seattle CBD 5,247 1st N/A N/A Real Retail 15 Crown Hill Ballard/U Dist 5,220 1st LCDC N/A ORION Commercial Partners Mt Tacoma Dr SW Univ. Place/Lakewood 5,054 1st N/A N/A Total Property Management Mt Tacoma Dr SW Univ. Place/Lakewood 5,000 1st N/A N/A Total Property Management E Main St Federal Way/Auburn 4,800 1st Crystalli, Inc. Direct Deal Llewellyn Real Estate 19 Bellevue Plaza* Bellevue CBD 4,536 1st Haystack Antiques N/A Wallace Properties, Inc. 20 Lynwood Center Edmonds/Lynnwood 4,485 1st N/A N/A Coldwell Banker Bain st Ave S Pioneer Sq/Waterfront 4,360 1st N/A N/A Real Retail 22 Canal Station Ballard/U Dist 4,200 1st Mosaic Salon Real Retail Applied Capital LLC 23 Gig Harbor North Shopping - Bldg C Gig Harbor/W Pierce Co 4,127 1st N/A N/A First Western Properties 24 Color Dynamics Capitol Hill/Central Dist 4,059 1st Momentum Behavioral Services N/A Gibraltar LLC 25 6th Avenue Business District Restaurant Tacoma Suburban 4,000 1st N/A Coldwell Commercial Danforth Coldwell Commercial Danforth 26 Pilchuck Plaza - Bldg B N Snohomish County 4,000 1st N/A N/A Ramo Realty & Construction State Ave N Snohomish County 4,000 1st Button Work Clothes Keller Williams Realty Windermere Real Estate th Ave NW Ballard/U Dist 3,950 1st Crosst Strength & Conditioning Direct Deal ORION Commercial Partners 29 Express Lube/car Wash/coee Stand N Snohomish County 3,894 1st Minnick Motors First Western Properties First Western Properties 30 Bellevue Plaza Bellevue CBD 3,675 1st BOSA Development N/A Wallace Properties, Inc. 31 Hart Center Everett CBD 3,642 1st N/A N/A Coast Real Estate Services 32 Seattle Hills Mill Creek/Woodinville 3,500 1st BECU N/A First Western Properties Redmond Way Redmond 3,484 1st N/A N/A Azose Commercial Properties SW Everett Mall Way S Everett/Harbor Point 3,436 1st N/A Direct Deal Coldwell Commercial Danforth 35 Redmond Center Redmond 3,424 1st N/A N/A Nelson Legacy Group 36 Redmond Center Redmond 3,400 1st N/A N/A Nelson Legacy Group 37 Issaquah Commons - Target Coal Creek/Issaquah 3,293 1st N/A N/A Madison Marquette th Ave NE N Snohomish County 3,250 1st N/A N/A Re/Max Elite th Ave NE Suburban Bellevue 3,200 1st N/A N/A Kidder Mathews S Meridian Spanaway 3,104 1st Lovers N/A West Coast Commercial Realty * Renewal 20 CoStar Retail Statistics 2017 CoStar Group, Inc.

26 Sales Activity First Quarter 2017 Seattle/Puget Sound The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates 8.0% Cap Rate Price/SF $1, % $960 Cap Rate Percentage 6.0% 5.0% 4.0% 3.0% $860 $760 $660 $560 Dollars/SF 2.0% $ % q q q $360 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Retail Building Sales of 15,000 SF and Larger Based on Retail Building Sales From Jan Dec $450 Sales Volume Price/SF $400 Bldg Size # RBA $ Volume Price/SF Cap Rate $400 $350 < 25,000 SF 355 2,341,189 $780,532,422 $ % Millions of Sales Volume Dollars $350 $300 $250 $200 $150 $100 $300 $250 $200 $150 $100 Price/SF 25K-99K SF 100K-249K SF 36 1,867,998 $512,385,850 $ % 6 924,463 $175,215,500 $ % $50 $50 $0 $0 >250K SF - 0 $0 $ q q q q Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Retail Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Retail Building Sales of 15,000 SF and Larger $390 Seattle/Puget Sound US 9.0% Seattle/Puget Sound US $ % Dollars per SF $290 $240 $190 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% $ % $90 1.0% q q q q q2013 3q q2014 3q q2015 3q q2016 3q Source: CoStar COMPS Source: CoStar COMPS 2017 CoStar Group, Inc. CoStar Retail Statistics 21

27 22 CoStar Retail Statistics 2017 CoStar Group, Inc. Seattle/Puget Sound First Quarter 2017 Sales Activity