LOS ANGELES OFFICE 4-QTR TRAILING AVERAGE. cushmanwakefield.com I 1

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1 LOS ANGELES OFFICE Q1 17 Q1 18 Los Angeles Employment 4.41M 4.47M Los Angeles Unemployment 4.9% 4. U.S. Unemployment 4.7% 4.1% *Average of first two months of Q Month Forecast The U.S. economy added 313,000 jobs in February, the most since July 2016 and the unemployment rate remained unchanged at 4.1%, a 17-year low. Locally, Los Angeles County s unemployment rate was 4.5 % in February, down from 4.9% one year ago. The unemployment rate is expected to decline slowly over the next two years, falling to 4.3% in 2018 and reaching 4.1% in 2019 as the county, similar to the state, starts to tick above full employment. In the last twelve months, nonfarm employment grew by 61,500, for a 1.4% annual growth. Job growth will decline with only 47,800 jobs expected to be added in 2018 and 34,300 in 2019, according to a recent forecast by the LAEDC. Q1 17 Q1 18 Vacancy 14.4% 15.4% YTD Net Absorption (sf) -23,619 21,096 Under Construction (sf) 2.4M 2.1M Average Asking Rent* $3.13 $3.32 *Rental rates reflect gross asking $psf/mo 4-QTR TRAILING AVERAGE 1,500,000 1,000, Month Forecast $4 $3 After ending 2017 with the highest annual rent growth since 2008, a 9.3% increase in the overall asking rental rate to $3.29 per square foot per month (psf/mo), rents across the region have begun to stabilize. In the first quarter, there was a marginal increase in average rent rate to $3.32 psf/mo, indicating a healthy market and marks a 6.1% increase year-over-year. This quarter s leasing activity totaled 3.3 million square feet (msf), only slightly lower than the first quarter 2017 s level by 1.8%, but exceeded the 3.0 msf quarterly average in Both the LA Central (Downtown CBD, Non-CBD and Mid-Wilshire) and LA West submarkets posted above 700,000 sf of leasing activity with LA South slightly less at 650,000 sf. Bank of America s 218,000-sf renewal /expansion deal at 333 South Hope Street in the Downtown CBD (Financial District) was the largest lease of the quarter. In the South Bay, a new direct lease of 200,000 sf was signed for the NFL Media HQ at 1050 South Prairie Street in Inglewood while two large leases in San Dimas accounted for 178,000 sf of leasing activity in the San Gabriel Valley market.. 500,000 $ ,000 $1-1,000,000 $ New speculative construction deliveries in LA West and the CBD played a role in asking rental increases last year due to new high-end spaces with higher asking rental rates. In the first quarter, only 60,000 sf was delivered, taking back seat to the 930,000 sf of renovation completions. LA South considered a more affordable and viable option to tenants accounted for 8 or almost 800,000 sf of the projects delivered, with just over half of that being vacant square feet. 2 2 Net Absorption Asking Rent, $psf/mo Greater Los Angeles saw minimal occupancy gains recording 21,096 sf of positive overall net absorption. Overall vacancy rose in the first quarter 2018 to 15.4%, a 30-basis-point (bp) increase from the fourth quarter 2017 and a 100-bp increase from a year ago. The delivery of several renovation projects in the first quarter attributed to the uptick in vacancy. Positive absorption in LA West (284,000 sf) and LA Central (243,000 sf) was offset by negative net absorption in LA North (-206,000 sf), Tri-Cities (-182,000 sf) and the LA South (-115,000 sf) neutralizing the market. 1 Previous 5-Year Average = 15.9% Despite investor activity volume (sf) coming in under the 4.8 msf per quarter average in 2017 at 2.9 msf in the first quarter 2018, four key sales transactions above $100 million were recorded. The Connexion Burbank Campus portfolio sale at $123.5 million and the purchase of 888 Walnut by ACCO Engineered Systems for $112 million in Pasadena show a strong investment market in Tri-Cities. The largest sale was positioned in the CBD s Financial District with 1000 Wilshire Blvd (The Wedbush Center) trading hands for $196 million. cushmanwakefield.com I 1

2 $2.65 $2.59 $2.87 $2.87 $2.99 $2.98 $3.43 $3.61 $3.94 $4.29 $4.60 $4.64 $2.99 $3.18 $3.22 $3.38 $3.53 $3.52 The first quarter 2018 started off strong with 450,870 sf of leasing activity in the Central Business District (CBD), 19% higher than the quarterly average in 2017 of 378,648 sf. Leasing volume by the number of transactions was down 4 compared to the quarterly average in 2017, however an uptick in 50,000 sf or larger sized deals occurred this quarter, already matching the entirety of last years deals at this size range. With the addition of 88,000 sf, Bank of America s renewal and expansion was the largest deal signed for 218,000 sf at Bank of America Plaza. Seyfarth Shaw signed a new lease at 601 South Figueroa for 57,000 sf, an intra-market move within the CBD from Bunker Hill to the Financial District. Kirkland & Ellis signed for 52,772 sf in the Financial District at the City National Bank Tower. Tenants migrating into the CBD sustained positive direct net absorption with 67,666 sf this quarter. TubeScience, Jerde Partnership, and HyreCar all occupied their new spaces in the first quarter Overall asking rates remain healthy at $3.52 psf/mo, while vacancy decreased 130 bps from this time last year to 21.2%. CENTRAL BUSINESS DISTRICT Occupancy gains in the LA West office market continued on a positive trend for the fourth consecutive quarter and continues to be driven by entertainment, tech and media tenants. Paradigm Talent Agency, Starz, Operam and Gotham Group are a few of these tenants that contributed to the 284,070 sf of net absorption in first quarter This reduced the overall vacancy rate by 30 bps to 12.7%. Average asking rental rates for Class A product, which makes up nearly 80. of LA West office inventory, reached a new high of $4.74 psf/mo. This represents a year-over-year increase of 3. and surpassed the previous cycle s peak by 11.3%. There are approximately 1.1 msf of speculative projects under construction, with 560,000 sf occurring in Culver City. Culver City has become a new hot spot for tech and entertainment, with average asking rental rates increasing by 25.4% year-over-year to $4.25 psf/mo. Tech giant Amazon signed a 75,000 sf lease, taking down the entirety of the Culver Steps project. This comes on the heels of Amazon s deal at the historic Culver Studios complex, bringing the footprint of their production division to over 350,000 sf. Job growth in the tech and entertainment industries should result in strong demand for Westside creative office product. With only 471,000 sf of construction projects set to deliver in 2018, the vacancy rate in LA West is expected to decline further throughout the year. LOS ANGELES WEST $5.00 TRI-CITIES At the close of 2017 the outlook had vacancy rates rising and negative net absorption. 2 With few large move-ins expected, the small to mid-range tenants that did occupy could not offset large move-outs. At 800 N Brand Blvd in Glendale, more of Nestlé's 1 former headquarter space came online with another 90,000 sf of sublease availability. An additional 93,000 sf of vacant space from Glendale closed the first quarter 2018 with negative 182,000 sf of overall net absorption. Overall vacancy rose 50 bps to %, returning to higher vacancy rates recorded at 13.8% in the first quarter Average asking rental rates have stabilized with marginal increases since 2016, posting at $2.98 psf/mo at the end of the first quarter Leasing activity was healthy at 298,437 sf, the highest recorded since the close of the fourth quarter Eikon signed for 20,000 sf at 2777 N Ontario St in Burbank and Stalwart Films signed for 19,000 sf at the Tower Burbank. Almost 50,000 sf of lease renewals were signed at 101 N Brand Blvd with Health Net and Centene Corporation recommitting to their space. Two of the top four sale transactions in Greater Los Angeles recorded in Tri- Cities. The single building sale of 888 E Walnut to ACCO Engineering for $112 million ($486 psf) shows that both user and investment sales in Tri-Cities are in demand. cushmanwakefield.com I 2

3 $2.02 $2.13 $2.17 $2.29 $2.48 $2.66 $2.13 $2.21 $2.26 $2.40 $2.46 $2.48 $1.99 $2.05 $2.14 $2.15 $2.18 San Gabriel Valley (SGV) fundamentals started the year strong with leasing activity increasing 52.4% year-over-year to 298,700 sf in the first quarter 2018, the highest leasing activity since the first quarter The two largest leases, Leidos (98,505 sf) at 924 Overland Court and UTAS (79,036 sf) at Overland Court, contributed to 59.4% of the total leasing activity. Another notable lease, USC expanded an additional 30,116 sf at The Alhambra Campus and is currently set to occupy in the second quarter With fewer move-outs, the overall vacancy rate decreased an impressive 170 bps from 16. to 14.8% year-over-year. Direct asking rental rates increased $0.03 from this time last year to $2.18 psf/mo. Net absorption levels of negative 3,674 sf in the first quarter 2018 closed flat, which is an improvement compared with the negative 134,005 sf occupancy loss a year ago. Supply constraints coupled with an increase in demand will likely keep vacancy low and allow asking rates to remain competitive. SAN GABRIEL VALLEY HealthNet (89,000 sf) and Bank of America (42,000 sf) vacated a total of 131,000 sf, accounting for 67.6% of the negative 193,716 sf net absorption. Occupancy losses in the market and a prior renovation completion spiked direct vacancy of 180 bps year-over-year to 12.4%. LA North had a significant increase in leasing activity of 579,606 sf, up 9.7% year-over-year. Central Valley led leasing activity at 208,056 sf and West Valley posted 185,157 sf. Genesis Capital exemplified tenant growth as the company will expand to 20,575 sf, doubling their initial footprint. The private mortgage lending corporation will migrate their headquarters from Woodland Hills to the Comerica Bank office building in Sherman Oaks next quarter. Also, the Child Care Resource Center inked an expansion for an additional 17,645 sf in Chatsworth. Healthy leasing activity shows demand in the LA North market despite the large move-outs. Direct rental rates increased 3.3% year-over-year to $2.49 psf/mo. With major tenants, Facebook and Pharmavite set to occupy their spaces in the second half of the year, occupancy losses should be offset by year-end. LOS ANGELES NORTH After posting 534,027 sf of occupancy gains in 2017, the South Bay market started the year with negative net absorption of 114,592 sf. Molina Healthcare continues its right-sizing and moved workers out of their offices at 1 World Trade Center into its nearby headquarters on Ocean Boulevard in Downtown Long Beach. With this huge loss, Downtown Long Beach recorded net occupancy loss of 93,254 sf. This net loss in demand, coupled with the addition of newly renovated projects in El Segundo, pushed the South Bay s overall vacancy to 17.9%. However, even with this 130-bp quarterly increase, first quarter s vacancy was still 240 bps lower than the market s historical average from Also on a positive note, first quarter s leasing activity of 648,805 sf was 22.6% higher than the two-year quarterly average ( ) of 529,279 sf and a whopping 75.7% higher than the previous quarter s total 369,330 sf. Accounting for this huge increase in leasing and the largest deal of the quarter in the South Bay and the second largest in the Greater Los Angeles market, NFL Media leased 200,000 sf to move its headquarters from Culver City to the Hollywood Park development at the future stadium of the LA Chargers and LA Rams in Inglewood. With strong tenant demand, there has been significant upward pressure on rents. In the last year, South Bay s average rental rate of $2.66 psf/mo has increased by 13.2%. Direct asking rents for Class A space were up 11.2% while Class B rents inched up to $2.41psf/mo for a 12.1% annual growth. LOS ANGELES SOUTH cushmanwakefield.com I 3

4 SUBMARKET INVENTORY SUBLET VACANT DIRECT VACANT VACANCY RATE CURRENT QTR NET ABSORPTION YTD NET ABSORPTION YTD LEASING ACTIVITY ** UNDER CONSTRUCTION AVERAGE ASKING RENT (ALL CLASSES)* AVERAGE ASKING RENT (CLASS A)* Los Angeles Downtown CBD 27,574, ,761 5,639, % 102, , ,870 0 $3.52 $3.61 Los Angeles Downtown (Non-CBD) 8,639,116 18,106 1,882, ,999 9, , ,596 $3.68 $4.33 Mid-Wilshire 11,634,043 24,233 1,692, % 130, , , ,500 $2.65 $2.92 Los Angeles West 53,176, ,732 6,209, % 284, , ,434 1,074,317 $4.64 $4.74 Los Angeles North 31,418,737 85,306 3,886, % -206, , , ,000 $2.48 $2.58 Los Angeles South 31,114, ,331 5,134, % -114, , , ,998 $2.66 $2.93 Tri-Cities 24,303, ,658 2,769, % -181, , , ,267 $2.98 $3.07 San Gabriel Valley 12,535,067 16,423 1,841, % -3,674-3, ,700 0 $2.18 $2.36 GREATER LOS ANGELES TOTALS 200,397,219 1,867,550 29,055, % 21,096 21,096 3,297,863 2,102,678 $3.32 $3.60 *Rental rates reflect gross asking $psf/month **Does not include Renewals Key Lease Transactions Q South Hope Street / Bank of America Plaza 218,000 Bank of America Expansion, Renewal* Financial District 1050 South Prairie Street / Hollywood Park 200,000 NFL Media HQ New Lease LAX / Century Boulevard 924 Overland Court 98,505 Leidos - QTC Management New Lease Pomona / San Dimas Overland Court 79,036 UTAS Aerospace Systems New Lease Pomona / San Dimas 9300 Culver Boulevard / Culver Steps 75,000 Amazon New Lease Culver City 601 South Figueroa Street / Figueroa at Wilshire 57,336 Seyfarth Shaw LLP New Lease Financial District 555 South Flower Street / City National Bank Tower 52,772 Kirkland & Ellis LLP New Lease Financial District 1925 Century Park East / Watt Plaza South Tower 39,762 Industrious New Lease Century City *Renewals not included in leasing statistics Key Sales Transactions Q Wilshire Boulevard / The Wedbush Center 471, & 333 North Glenoaks Boulevard 300 East Magnolia Boulevard Lincoln Property Company / Cerberus Capital Management $196,000,000 / $415 Financial District 316,927 Lincoln Property Company / Intercontinental RE $123,500,000 / $389 Burbank 5510 & 5570 Lincoln Boulevard / Water s Edge 250,000 DivcoWest / Rockwood Capital $190,000,000 / $760 Playa Vista 888 East Walnut / Crown City Center 230,000 JP Morgan Chase / ACCO Engineered Systems $111,813,575 / $486 Pasadena 2380 & 2400 Conejo Spectrum Drive / Conejo Spectrum 200,439 Cusumano Real Estate Group / Blue Vista $22,900,000 / $114 Thousand Oaks / Newbury Park 5220 Pacific Concourse Drive / Pacific Concourse 159,634 LBA Realty / Beacon Capital Partners $42,500,000 / $266 El Segundo / Beach Cities & Springfield / Opus Corporate Center 154,800 Massachusetts Mutual Life Insurance Group / Blue Vista $33,100,000 / $214 Valencia / Newhall Russell Ranch Road / Westlake Business Park 134,340 The Blackstone Group / TREA $33,350,000 / $248 Westlake Village 9460 Wilshire Boulevard / Union Bank Building 91,000 Universal Properties / CIM Group $132,000,000 / $1,450 Beverly Hills cushmanwakefield.com I 4

5 Explanation of Terms Total Inventory: The total amount of office space (in buildings of a predetermined size by market) that can be rented by a third party. Overall Vacancy Rate: The amount of unoccupied space (new, relet, and sublet) expressed as a percentage of total inventory. Direct Vacancy Rate: The amount of unoccupied space available directly through the landlord (excludes sublease space). Absorption: The net change in occupied space between two points in time. (Total occupied space in the present quarter minus total occupied space from the previous quarter, quoted on a net, not gross, basis.) Leasing Activity: The sum of all leases over a period of time. This includes pre-leasing activity as well as expansions. It does not include renewals. Under Construction: Industrial and office square footage that are being built and have not received certificates of occupancy (C of O). Projects which are beyond site preparation (concrete slab poured and construction is actively progressing). For C&W statistical purposes, these buildings will not be complete by the last day of the reporting quarter. Under renovation: Office and industrial buildings that are undergoing renovation, rehabilitation or conversion and require a certificate of occupancy to be habitable. Overall Weighted Asking Rents: Gross average asking rents weighted by the amount of available direct and sublease space in Class A, B and C properties. Class A Asking Rents: Gross average asking rents weighted by the amount of available Class A direct and sublease space. Cushman & Wakefield 900 Wilshire Blvd, 24 th Floor Los Angeles, CA cushmanwakefield.com For more information, contact: Eric Kenas, Market Director, Research Tel: eric.kenas@cushwake.com Sophia Hwang, Research Analyst Tel: sophia.hwang@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit or on Twitter. Copyright 2018 Cushman & Wakefield. All rights reserved. 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. cushmanwakefield.com I 5