OAKLAND FIRST QUARTER 2007 COLLIERS INTERNATIONAL OAKLAND OVERVIEW FIRST QUARTER East Bay s Growing Appeal

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1 OAKLAND FIRST QUARTER 2007 COLLIERS INTERNATIONAL OAKLAND Market Research OVERVIEW FIRST QUARTER 2007 East Bay s Growing Appeal MARKET INDICATORS The San Francisco Bay Area is one of the most dynamic regions in the country. It is no surprise that many companies who specialize in technology, fi nancial services and professional services are expanding and consequently have generated quite a demand for space in San Francisco. But as average asking rental rates for offi ce space in San Francisco continue to rise, we believe that more of these companies will be migrating to the quality spaces in the Oakland Metropolitan Area, as well as the rest of the Bay Area. OFFICE VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE Q1 Q Import/export trade through the area has been rising steadily, due to the area s convenient location. The area is home to the Port of Oakland and the Oakland International Airport, as well as an effi cient network of highways. This has made the Oakland Metropolitan Area a magnet for logistics and trucking companies. Because of these factors, the leasing and sale activity for warehouse/distribution space has been strong. The warehouse/distribution vacancy rate ended the first quarter at 3.6%, a six-year low. Lastly, with venture capitalists now investing much of their funds to life science and biotech research, we believe that many new emerging companies will lease R&D/Flex space around the Bay Area. Though most of these companies are based in the Silicon Valley and the San Francisco Peninsula, we believe that submarkets in the Oakland Metropolitan Area that have a sizable inventory of fl ex space will also benefi t. These markets include Alameda s Marina Village and Harbor Bay Business Parks, as well as Hayward and Richmond. INDUSTRIAL Q1 Q Oakland Metro Area - Office All Classes Overall Vacancy vs. Full Service Asking Rental Rates I-80/880 Corridor Overall Industrial Market Vacancy vs. Asking NNN Rental Rates VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL 1

2 OAKLAND OFFICE FIRST QUARTER 2007 Offi ce Class A The most telling sign of a thriving commercial real estate market lies in its rising asking rental rates, and this has been particularly pertinent for the Class A buildings in the Oakland Metropolitan Area. The average asking rental rate for Class A product has climbed to $2.45 Full Service per square foot per month (psf/mo) since year-end While most fi rms in the market (Colliers included) have historically based statistical data on a building set that excluded owner occupied properties, we have begun to include those assets in our base inventory. With the inclusion of these assets, the overall base of Class A buildings has increased to over 13 million square feet, with a total vacancy in the Class A market of 7.2%. It is important to note that even with the exclusion of owner occupied buildings, the overall Class A vacancy rate would still be at 8.3%, which is clearly still a tight market. Office Classes B/C/Flex The Class B/C and Flex market also had a very slight decrease to 16.6%. Some flex intensive submarkets like Marina Village and Harbor Bay still had a diffi cult time shedding available space, as vacancy rates surpassed 24% in both markets. However, we believe these submarkets will improve throughout the course of the year, as biotech companies continue to receive more government and venture capital funding for research in the life sciences. LEASING ACTIVITY PROPERTY ADDRESS SIZE SQ. FT. LEASE RATE TYPE 850 Marina Village Pkwy 23,770 $1.10 NNN Offi ce/flex 1111 Broadway 23,869 $3.00 FS Offi ce OFFICE MARKET VACANCY VS. ASKING NNN RENTAL RATES CLASS A, CLASS B&C 2 COLLIERS INTERNATIONAL

3 OAKLAND OFFICE FIRST QUARTER 2007 OFFICE MARKET EXISTING PROPERTIES NET ABSORPTION GROSS ABSORPTION RENT Market Bldg Total Direct Direct Sublease Sublease Total Vacant Vacancy Vacancy Current Year-to-Date Current Year-to-Date Avg Asking Inventory Vacant Vacancy Vacant Vacancy SF Rate Rate Qtr SF SF Qtr SF SF FS SF SF Rate SF Rate 4Q06 Last Qtr Rental Rate CBD SECTION Oakland DT A 28 9,627, , % 157, % 559, % 5.9% 6,817 6,817 84,878 84,878 $ 2.45 B/C & Flex 114 5,407, , % 26, % 856, % 16.0% 7,053 7,053 78,310 78,310 $ 1.86 Total 15,035,374 1,230, % 184, % 1,415, % 9.5% 13,870 13, , ,188 $ 2.24 Oakland JLS B/C & Flex 44 1,662, , % - 0.0% 233, % 8.6% (89,888) (89,888) 5,681 5,681 $ 1.86 Total 44 1,662, , % - 0.0% 233, % 12.7% (89,888) (89,888) 5,681 5,681 $ 1.86 CBD TOTAL A 28 9,627, , % 157, % 559, % 5.9% 6,817 6,817 84,878 84,878 $ 2.45 B/C & Flex 158 7,069,978 1,062, % 26, % 1,089, % 14.2% (82,835) (82,835) 83,991 83,991 $ 1.86 Total ,697,623 1,464, % 184, % 1,648, % 12.7% (76,018) (76,018) 168, ,869 $ 2.05 SUBURBAN SECTION Richmond B/C & Flex 97 3,436, , % - 0.0% 461, % 14.7% 42,393 42,393 58,124 58,124 $ 1.45 Total 97 3,436, , % - 0.0% 461, % 14.7% 42,393 42,393 58,124 58,124 $ 1.45 Berkeley DT A 9 599,882 91, % 9, % 101, % 19.7% 17,418 17,418 20,650 20,650 $ 2.62 B/C & Flex ,538 93, % - 0.0% 93, % 13.7% 18,400 18,400 16,597 16,597 $ 1.85 Total 37 1,418, , % 9, % 194, % 16.3% 35,818 35,818 37,247 37,247 $ 2.42 Berkeley West B/C & Flex 40 1,219, , % 1, % 120, % 11.1% 15,530 15,530 43,359 43,359 $ 1.85 Total 40 1,219, , % 1, % 120, % 11.1% 15,530 15,530 43,359 43,359 $ 1.85 Emeryville A 13 2,320, , % 45, % 177, % 10.4% 64,526 64,526 66,142 66,142 $ 2.52 B/C & Flex 44 1,683, , % 2, % 235, % 17.8% 64,444 64,444 83,009 83,009 $ 2.03 Total 57 4,003, , % 48, % 412, % 13.5% 128, , , ,151 $ 2.31 Alameda - Marina Village B/C & Flex 53 1,545, , % 59, % 450, % 27.8% (21,439) (21,439) 62,945 62,945 $ 1.97 Total 53 1,545, , % 59, % 450, % 27.8% (21,439) (21,439) 62,945 62,945 $ 1.97 Alameda - Harbor Bay B/C & Flex 28 1,684, , % 94, % 400, % 23.3% (6,868) (6,868) 25,996 25,996 $ 1.98 Total 28 1,684, , % 94, % 400, % 23.3% (6,868) (6,868) 25,996 25,996 $ 1.98 Oakland Airport A 3 453,697 83, % 12, % 95, % 22.2% 4,994 4,994 14,274 14,274 $ 1.94 B/C & Flex 32 1,349, , % 3, % 267, % 20.1% 4,304 4,304 7,102 7,102 $ 1.60 Total 35 1,803, , % 15, % 363, % 20.6% 9,298 9,298 21,376 21,376 $ 1.69 SUBURBAN TOTAL A 25 3,374, , % 67, % 374, % 13.7% 86,938 86, , ,066 $ 2.36 B/C & Flex ,738,381 1,866, % 162, % 2,029, % 18.3% 116, , , ,132 $ 1.82 Total ,112,608 2,173, % 230, % 2,403, % 17.3% 203, , , ,198 $ 1.95 MARKET TOTAL A 53 13,001, , % 225, % 933, % 7.9% 93,755 93, , ,944 $ 2.45 B/C & Flex ,808,359 2,929, % 188, % 3,118, % 16.8% 33,929 33, , ,123 $ 1.82 TOTAL ,810,231 3,637, % 414, % 4,052, % 13.1% 127, , , ,067 $ 2.08 QUARTERLY COMPARISON AND TOTALS Q ,810,231 3,637, % 414, % 4,052, % 13.1% 127, , , ,067 $ 2.08 Q ,281,483 3,704, % 475, % 4,179, % 14.9% 25,054 85, ,059 2,397,669 $ 2.01 Q ,217,008 3,668, % 361, % 4,212, % 15.3% 34,767 53, ,697 1,760,610 $ 1.95 Q ,982,087 3,671, % 452, % 4,330, % 15.6% 106,700 (39,401) 760,676 1,067,635 $ 1.89 Q ,982,087 3,615, % 548, % 4,348, % 15.3% 31,368 (31,704) 360, ,455 $ 1.82 Q ,981,404 3,611, % 500, % 4,112, % 16.2% 184, , ,120 2,157,210 $ 1.80 COLLIERS INTERNATIONAL 3

4 OAKLAND INDUSTRIAL FIRST QUARTER 2007 Industrial Vacancy and Rental Rates The start of 2007 has been very much like the end of 2006 for the Oakland Metropolitan Area s industrial market. The amount of vacant space has been rare, with the overall vacancy rate at 5.6% at the end of the fi rst quarter. Vacant space for the overall market has been falling for the past two years, so any slight increase in space was probably a welcome sight for prospective tenants. The average asking rental rate for the overall market also rose at a modest pace to $.55 NNN psf/mo. The light industrial market s vacancy rate climbed slightly to 6.0%, with much of the increases coming from the Richmond and Oakland markets. The warehouse market stayed at an ultra low 3.6%, which has prompted an increase in average asking rental rates to $.45 NNN psf/mo. The most signifi cant change occurred in the R&D/Flex sector, where the vacancy rate declined from 15.4% at the end of 2006 to 13.9% by the end of the fi rst quarter. This spells good news for this long ailing subtype, which will continue to improve as activity in the leading R&D markets such as Silicon Valley and the San Francisco Peninsula continues to accelerate. LEASING ACTIVITY PROPERTY ADDRESS SIZE SQ. FT. LEASE RATE TYPE Eigenbrodt Way 135,860 $0.41 NNN Warehouse SALES ACTIVITY PROPERTY ADDRESS SIZE SQ. FT. SALE PRICE TYPE Polvorosa Ave, Bldgs A, B, C 92,254 $12,500,000 Light Industrial INDUSTRIAL MARKET VACANCY VS. ASKING NNN RENTAL RATES LIGHT INDUSTRIAL, WAREHOUSE, FLEX 4 COLLIERS INTERNATIONAL

5 OAKLAND INDUSTRIAL FIRST QUARTER 2007 INDUSTRIAL MARKET EXISTING PROPERTIES NET ABSORPTION GROSS ABSORPTION RENT Market Bldg Total Direct Direct Sublease Sublease Total Vacant Vacancy Vacancy Current Year-to-Date Current Year-to-Date Avg Asking Inventory Vacant Vacancy Vacant Vacancy SF Rate Rate Qtr SF SF Qtr SF SF NNN SF SF Rate SF Rate 4Q06 Last Qtr Rental Rate Richmond: Industr ial 217 5,094, , % 4, % 1,003, % 20.7% 50,133 50, , ,074 $ 0.58 Warehouse 41 4,263, , % - 0.0% 158, % 3.7% (997) (997) - - $ 0.42 R&D/Flex 93 3,436, , % - 0.0% 461, % 14.7% 42,393 42,393 58,124 58,124 $ 1.45 Total ,794,840 1,619, % 4, % 1,624, % 13.4% 91,529 91, , ,198 $ 0.76 Oakla nd: Industr ial ,601,206 1,081, % 20, % 1,102, % 3.7% (272,317) (272,317) 23,423 23,423 $ 0.57 Warehouse ,616, , % 88, % 567, % 4.9% (46,867) (46,867) 54,934 54,934 $ 0.44 R&D/Flex NA NA NA NA NA NA NA NA NA NA NA NA NA NA Total ,217,310 1,560, % 108, % 1,669, % 4.1% (319,184) (319,184) 78,357 78,357 $ 0.53 San Lea ndro: Industr ial ,661, , % 28, % 516, % 3.7% (88,362) (88,362) 37,255 37,255 $ 0.56 Warehouse ,543, , % - 0.0% 325, % 2.0% (34,551) (34,551) 12,200 12,200 $ 0.45 R&D/Flex ,380 78, % - 0.0% 78, % 8.4% (7,289) (7,289) 4,951 4,951 $ 0.82 Total ,052, , % 28, % 919, % 2.9% (130,202) (130,202) 54,406 54,406 $ 0.51 Hayw ard: Industr ial ,504, , % 89, % 908, % 5.5% (755) (755) 195, ,853 $ 0.59 Warehouse ,078, , % 20, % 460, % 2.3% 19,662 19, , ,183 $ 0.46 R&D/Flex 112 4,579, , % 62, % 802, % 19.6% 95,897 95,897 18,060 18,060 $ 0.82 Total ,162,924 1,999, % 172, % 2,172, % 5.4% 114, , , ,096 $ 0.55 Union City: Industr ial 160 7,883, , % 79, % 302, % 4.7% 66,408 66,408 99,402 99,402 $ 0.56 Warehouse 81 7,187, , % 237, % 587, % 7.9% (18,135) (18,135) 118, ,470 $ 0.44 R&D/Flex ,672 9, % - 0.0% 9, % 2.5% 12,598 12,598 22,626 22,626 $ 1.08 Total ,941, , % 317, % 899, % 6.0% 60,871 60, , ,498 $ 0.53 MARKET T OTAL Industr ial ,745,307 3,610, % 222, % 3,833, % 5.6% (244,893) (244,893) 542, ,007 $ 0.57 Warehouse ,689,564 1,752, % 346, % 2,098, % 3.5% (80,888) (80,888) 398, ,787 $ 0.45 R&D/Flex 273 9,734,677 1,289, % 62, % 1,352, % 17.9% 143, , , ,761 $ 1.07 TOTAL ,169,548 6,652, % 631, % 7,284, % 5.4% (182,182) (182,182) 1,044,555 1,044,555 $ 0.55 QUARTERLY COMPARISON AND TOTALS Q ,169,548 6,652, % 631, % 7,284, % 5.4% (182,182) (182,182) 1,044,555 1,044,555 $ 0.55 Q ,169,548 6,544, % 558, % 7,102, % 5.5% 211,051 1,900,988 2,117,056 8,280,588 $ 0.54 Q ,077,051 6,325, % 895, % 7,221, % 6.7% 1,311,374 1,500,931 2,333,680 6,163,532 $ 0.54 Q ,077,051 7,351, % 1,180, % 8,532, % 6.8% 361, ,557 2,446,213 3,829,852 $ 0.54 Q ,077,051 7,215, % 1,678, % 8,894, % 6.7% (171,883) (171,883) 1,383,639 1,383,639 $ 0.51 Q ,405,835 7,000, % 1,795, % 8,796, % 7.7% 1,403,386 1,754,966 2,395,813 8,118,338 $ 0.50 OAKLAND S VIBRANT DOWNTOWN Oakland is a prime location for business, with it s local Airport, The Port Of Oakland and internal transit systems, no wonder Forbes Magazine ranked Oakland in the Top 10 Best Places for business in 2001 and Forbes/Milken Institute List of Best Places for Business and Careers, Forbes, May 27, Oakland/San Francisco skyline COLLIERS INTERNATIONAL 5

6 OAKLAND FIRST QUARTER 2007FIRST QUARTER 2007 BROKERS & STAFF MANAGING PARTNER Kenneth W. Meyersieck Managing Partner/SVP (510) OFFICE Elena Cohen (510) Mike Corbett (510) Aileen Dolby (510) Ben F. Harrison (510) Trent Holsman (510) Ann Lovi (510) Kenneth W. Meyersieck (510) Al Musante (510) Anthony Stratton (510) INDUSTRIAL Chet Barney (510) James B. Bohar (510) Gabe I. Burke, SIOR (510) Norman J. Eggen, SIOR (925) remote office neggen@colliersparrish.com David Henderson (510) dhenderson@colliersparrish.com Richard P. Keely (510) rkeely@colliersparrish.com Greig F. Lagomarsino, SIOR (510) glago@colliersparrish.com James E. Morris (510) jmorris@colliersparrish.com Casey Ricksen (510) cricksen@colliersparrish.com Sean Sabarese (510) ssabarese@colliersparrish.com Todd O. Severson, SIOR (510) tseverson@colliersparrish.com Brady Thomas (510) bthomas@colliersparrish.com Joe Yamin (510) jyamin@colliersparrish.com Warren Weber (510) wweber@colliersparrish.com INVESTMENT Kevin Ebrahimi (510) kebrahimi@colliersparrish.com Gerald Kruse (510) gkruse@colliersparrish.com Anna Lee (510) alee@colliersparrish.com RETAIL Reesa Tansey (510) rtansey@colliersparrish.com Sandra Weck (510) sweck@colliersparrish.com ADMINISTRATIVE Patricia Folks Office Manager (510) pfolks@colliersparrish.com Jason Radburn Administrative Assistant (510) jradburn@colliersparrish.com Rodney Williams Receptionist (510) rwilliams@colliersparrish.com RESEARCH Glenda Cheng Research Director (510) gcheng@colliersparrish.com MARKETING Lisa Howard Graphic Designer (510) lhoward@colliersparrish.com 241 OFFICES IN 54 COUNTRIES ON 6 CONTINENTS USA 98 Canada 18 Latin America 14 Asia Pacifi c 46 EMEA 65 $54 billion in annual transaction volume million square feet under management 9,327 Professionals CONTACT INFORMATION UNITED STATES Colliers International 1999 Harrison Street 1750 Oakland, CA Tel: Fax: Ken Meyersieck Managing Partner/SVP Tel: Glenda Cheng Research Director Tel: This report and other research materials may be found on our website at com. This report is a research document of Colliers International Oakland, California. Questions related to information herein should be directed to the Research Department at Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers Parrish International is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 240 offi ces throughout more than 50 countries worldwide. COLLIERS INTERNATIONAL 6 COLLIERS INTERNATIONAL