Premier Innovative Campus Located in the Heart of Santa Monica

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1 Premier Innovative Campus Located in the Heart of Santa Monica 2017 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF)

2 EXECUTIVE SUMMARY Holliday Fenoglio Fowler, L.P. ( HFF ) and MB Real Estate ( MB ), as the exclusive advisors, are pleased to present to qualified investors and users the outstanding opportunity to purchase the leasehold interest in 1800 Stewart Street (the Property ), a rare state-of-the-art, LEED Silver institutionalquality Class A campus centrally located in Santa Monica, CA. The Property was completed in 2013 as a best in class build to suit for Agensys and their Life Science needs. Agensys will be vacating the buildings and the Property will be delivered vacant upon sale. The buildings consist of one 3-story building and one 1-story retail and amenity building that total 159,470 SF. They consist of office space, a conference center, fitness center, cafe, R&D, GMP and CMC space. This unprecedented opportunity is being offered as a vacant non- commodity campus with permitted uses for biotechnology and R&D, entertainment production and creative arts. Strategically situated at the Metro Expo Line Bergamot Station, the Property benefits from immediate access to the consumer and talent pools in Downtown Santa Monica to the west and Downtown Los Angeles to the east. This supreme location lies in the heart of one of the nation s highest barrier-toentry markets, surrounded by a hub of technology, media, and entertainment. With its superb landscaping, stunning interior facilities, unmatched location, and self-contained amenity base (cafe, fitness center and conference center on campus), 1800 Stewart presents a truly unique opportunity to own a leasehold interest (the land is owned by the City of Santa Monica) in a cutting edge trophy asset in the flourishing submarket of Santa Monica.

3 PROPERTY SUMMARY 1800 STEWART OVERVIEW Address 1800 Stewart Street Santa Monica, CA Rentable Square Feet 159,470 Leased Percent 0.0% Number of Buildings 2 Slab-to-Slab Heights 14 Feet (Avg.) Year Built 2013 Stories 3 and 1 Site Area Parking Stalls 4.0 Acres 174 Stalls Owned at Property 75 Stalls Leased at Bergamot Station GROUND LEASE OVERVIEW Owner City of Santa Monica Expiration Date December 31, 2032 Term Remaining 15 Years Option to Extend January 1, December 31, 2042 Term Remaining with Option 1 Current Rent 25 Years $81,000/ month* 1 A longer-term extension would likely be negotiated as part of the sale process. * 3-7% CPI Increases Every 30 Months 3

4 INVESTMENT HIGHLIGHTS INNOVATIVE IDENTITY The opportunity to attract a life science or creative tenant to the Property offers a rare prospect and unique identity to the project. The bioscience cluster in Los Angeles is a robust and bourgeoning sector with tremendous potential moving forward. Supported by world-class academic institutions, Los Angeles is building a foundation as a major biotech hub. Creative and life science space is at a premium in the area, and 1800 Stewart features cutting edge facilities and unparalleled upside to create an innovative identity in the heart of Santa Monica. Additionally, the Santa Monica Media district is the heart of Silicon Beach that is home to numerous technology and entrainment/media tenants that represent the largest growth sector of the West side market.

5 UNPARALLELED TRANSIT-ORIENTED LOCATION 1800 Stewart is strategically located along the Metro Line featuring the Bergamot Station on its front doorstep. The Metro Expo Line runs from downtown Santa Monica, just four blocks from the Pacific Ocean, to the 7th Street terminus in Downtown Los Angeles. The greater Metro network services an extensive region ranging from Long Beach to the San Fernando and San Gabriel Valleys. The Property lies within 2 blocks from the I-10 freeway which transports over 193,000 cars per day. The Big Blue Bus, which transports over 65,000 people per day, operates within a block of the Property. Spurred by the recently awarded 2028 Olympics hosted in Los Angeles, the city is continually investing more into public transit. For example, the recently passed Measure M will pour $120 billion into public transit systems over the next 40 years. Recent and future initiatives to expand public transport will solidify 1800 Stewart as a focal transit-oriented destination. 5

6 MALIBU METRO STOP: Downtown Santa Monica METRO STOP: 17th St. / SMC BERGAMOT STATION METRO STOP: 26th St. / Bergamot OLYMPIC BLVD.

7 SANTA MONICA SUBMARKET MOMENTUM NOI GROWTH CHART As one of the strongest submarkets in the nation, Santa Monica Class A office is currently 88% leased and has maintained an average occupancy of 92% over the past 15 years. $9.50 $8.50 $ % G R O W T H POTENTIAL $ % BACHELOR DEGREE OR HIGHER 3.5% UNEMPLOMENT RATE $119,008 AVERAGE HOUSEHOLD INCOME $6.50 $5.50 $4.50 $3.50 $2.82 $3.62 $3.19 $3.04 $2.76 $4.38 $6.09 $3.53 $3.36 $4.43 $ % AVERAGE CLASS A OFFICE OCCUPANCY LAST 15 YEARS $1.4 MILLION MEDIAN HOME VALUE A WALK SCORE OF 79 WALKERS PARADISE $2.50 $1.50 $ West L.A Q16 Santa Monica 28% OF SANTA MONICA S EMPLOYMENT BASE IS 2,676 TECHNOLOGY JOBS COMPANIES 8.3 MILLION TOTAL ANNUAL VISITORS IN VENTURE CAPITAL INVESTMENT SINCE 2014 $7.0 BILLION TOTAL ANNUAL VISITOR SPENDING: $1.84 BILLION 24,797 EMPLOYEES 2.9 BILLION ANNUAL PAYROLL (41% OF CITY S TOTAL) 479 VENTURE CAPITAL DEALS WERE COMPLETED IN 2015, THE LARGEST AMOUNT OF ACQUISITION ACTIVITY TO DATE These increases will further position the Santa Monica submarket atop the West Los Angeles office market while commanding the highest rents and most in demand space in the county. 7

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9 UNMATCHED LIVE, WORK, PLAY ENVIRONMENT Located in the heart of burgeoning Santa Monica, 1800 Stewart is located in the Bergamot quadrant of the Santa Monica Media District. The Property is located blocks from the 26th Street metro stop that provides a short ride to the Third Street Promenade which attracts over 15 million visitors per year and boasts world-class shopping at retailers that include Nike, Nordstroms, Bloomingdales, Apple, Tesla, Lululemon, and others. Santa Monica is one of the most sought after destinations in the country and home to the region s most popular and hip restaurants, parks and seaside trails, beachfront hotels, theaters, a worldclass pier and pristine beaches. Some notable tenants in the city are: Restaurants: Cassia (LA Eater s # 2 LA County Restaurant), The Misfit, Tar and Roses, Hillstone, Sugarfish, Boa, Melisse, Rustic Canyon, Valentino and others Hotels: Shutters, Viceroy, the Fairmont, JW Marriott Santa Monica Le Merigot, Shore Hotel, Casa Del Mar, Palihouse and the Loews Santa Monica Bars: The Bungalow, Barcopa, Father s Office, SHOREbar, Basement Tavern, Library Alehouse, Daily Pint, The Misfit and others Theaters: ArcLight, City Shakespeare Company, M.i. s Westside Comedy Theater, The Broad Stage Parks and Recreational: Third Street Promenade, Santa Monica Pier, Gandara Park (just south of the Property) Palisades Park, Santa Monica State Beach, Tongva Park and others HIGH DEMAND CREATIVE CAMPUS ENVIRONMENT With trends gravitating towards conservative business plans resulting in an elevated level of office commodities, 1800 Stewart provides a blank canvas to create an office environment customized to today s high utility office space demands. The Property features ground floor retail amenities including a fitness center, conference center, cafeteria with covered outdoor seating open to the public, and a dynamic courtyard with local art. The unique nature of the premises allows a prospective tenant to enjoy more than just an upscale office, but also activate a creative campus with innovative features that reward employees and attract consumers. 9

10 COVETED SILICON BEACH LOCATION Silicon Beach refers to the cities of Santa Monica, Venice, Marina del Rey, and Playa Vista, which have cumulatively experienced incredible growth in the tech-sector and startup investment in the last three years. The region is designated as the Southern California epicenter for incubating startup companies, and has seen over $7.0 billion in venture capital investment since Santa Monica is the impetus of this tech revolution due to its deep amenity base, upscale lifestyle, and iconic coastal location. Ranked as the 3rd best startup ecosystem in the United States, behind only Silicon Valley and New York. Considered the 3rd largest tech hub in the world, home to Google, Facebook, Microsoft, YouTube, Snap, Hulu, Microsoft, BuzzFeed, Uber, Electronic Arts, Apple, Sony, TMZ, TrueCar and SpaceX. SUPPLY CONSTRAINED ENVIRONMENT Due to the recent influx of the FIRE (finance, insurance, real estate) and TAMI (technology, advertising, media, information) sectors, Santa Monica benefits from tremendous momentum in leasing fundamentals as large blocks of space are now increasingly scarce. With less than 200,000 square feet of office product to be delivered in the market in the next 12 months, the area is on the verge of being completely developed. Furthermore, the recently passed Proposition U limits future development to a maximum density of 1.5 floor area ratio (FAR) and a height of the lesser of three stories or 45 feet. With the growing demand for office space, many landlords are forced to convert existing buildings into creative office uses.

11 TOURS AND BIDDING INSTRUCTIONS HFF and MB will provide investors with specific targeted tour dates that will be established as follows: Tuesday, October 3 rd Wednesday, October 4 th Tuesday, October 10 th Thursday, October 12 th Tuesday, October 17 th - Thursday, October 19 th Please contact Kyle Robbins ( or KRobbins@mbres.com) directly to schedule a tour. Additionally, Ownership has requested for investors to submit two offers: 1) based on the terms of the current ground lease and 2) based on a proposed revision of the ground lease terms with the City that would include current rent payment, escalations, market resets and terms. 11

12 INVESTMENT SALES ADVISORS - HFF ANDREW HARPER Managing Director T: aharper@hfflp.com CA Lic. # NICK PSYLLOS Senior Managing Director T: npsyllos@hfflp.com CA Lic. # MICHAEL MATCHETT Analyst T: mmatchett@hfflp.com CA Lic. # DEBT ADVISOR - HFF TODD SUGIMOTO Managing Director T: tsugimoto@hfflp.com CA Lic. # OWNERS REPRESENTATIVES - MB REAL ESTATE 2017 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses, and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. ANDREW DAVIDSON Executive Vice President T: adavidson@mbres.com DAVID BURKARDS Senior Vice President T: dburkards@mbres.com KYLE ROBBINS Senior Vice President T: krobbins@mbres.com MB REAL ESTATE 181 West Madison, Suite 4700 Chicago, IL CA Lic. #