HARBOR CORPORATE PARK ORANGE COUNTY, CA AN EXCEPTIONAL REPOSITIONING OPPORTUNITY

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1 HARBOR CORPORATE PARK ORANGE COUNTY, CA AN EXCEPTIONAL REPOSITIONING OPPORTUNITY 1

2 Harbor Corporate Park HFF, as exclusive advisor, is pleased to present the exceptional opportunity to acquire Harbor Corporate Park (the Property ), a four-building institutionally owned and maintained office campus totaling 150,189 SF. The Property is located in the evolving SOCO micro-market, and benefits from access to over 5.5 million SF of retail and service amenities, close proximity to John Wayne International Airport, and exceptional regional access to three of Southern California s most important arterials, the San Diego (I-405), Newport Beach (SR-55) and Santa Ana (I-5) Freeways S. HARBOR 2 Harbor Corporate Park is currently 84% leased to a diverse tenant rent roll made up of credit and noncredit tenants from various industries including financial, insurance, government and professional service firms. The Property provides stable in-place cash flow highlighted by a strong rent roll with a weighted average lease term remaining of 2.9 years. The buildings have benefited from substantial recent capital investments including renovated lobbies and move-in ready spec suites minimizing future capital. Situated on 8.93 acres, in the most pro-development city within Orange County, the Property s design and layout provides opportunity to further implement a repositioning strategy to create a progressive high utility office campus environment, thereby capturing higher potential rents and creating additional value S. HARBOR

3 PROPERTY OVERVIEW ADDRESS 3601, 3611, 3621, 3631 South Harbor Blvd. Santa Ana, CA S. HARBOR NET RENTABLE AREA 3601 S. HARBOR 36,873 SF 3611 S. HARBOR 44,398 SF 3621 S. HARBOR 44,936 SF 3601 S. HARBOR 3631 S. HARBOR 23,982 SF COMBINED NET RENTABLE AREA 150,189 SF TOTAL LEASED % (AS OF 1/1/2018) 84% TYPICAL FLOOR PLATES 3601 S. HARBOR 19,187 SF 3611 S. HARBOR 27,642 SF 3621 S. HARBOR 28,473 SF 3631 S. HARBOR 12,992 SF YEAR BUILT SITE AREA PARKING RATIO 8.93 Acres 3.8 : 1,000 SF TOTAL BUILDINGS 4 TOTAL FLOORS WEIGHTED AVERAGE REMAINING LEASE TERM IN-PLACE VS. MARKET RENT 2 (Per building) 2.9 Years 11.6% Below Market Rent LEASE EXPIRATIONS 59% 3

4 NEWPORT BEACH HOAG HOSPITAL NEWPORT BEACH REDEFINING THE SOCO MARKET ORANGE COAST COLLEGE SOCO s emerging growth presents an exceptional opportunity to capitalize on the growing tenant demands for a high utility work environment and experiential retail amenities. With over 5,000 residential units under construction and 7.9 million SF of existing retail within a 5 mile radius, Harbor Corporate Park is poised to experience significant increases in demand as the micro-market continues to develop and grow. NOTABLE NEARBY ATTRACTION INCLUDE: SOCO Collection: 70 unique restaurants, showrooms and stores, weekly community events including cooking classes, tasting events, food truck events, and the famed SOCO Farmers Market. South Coast Plaza: Over 250 upscale-luxury goods retailers and 30 restaurants. Boasts over 24 million visitors annually with sales in excess of $1.5 billion annually (the highest in the U.S). The Press: 25 acres mixed-use renovation of the former LA Times printing facility. Los Angeles Chargers Headquarters (The Hive): Headquarters and training facilities with 2 acres practice field. Vans World Headquarters: 15 acre corporate campus with action sport influenced amenities. FUTURE DEVELOPMENT SITE (Segerstrom Family) LOS ANGELES CHARGER HEADQUARTERS & TRAINING FACILITY FUTURE DEVELOPMENT SITE (Segerstrom Family) 4

5 NEWPORT BEACH COSTA MESA COSTA MESA GOLF COURSE HUNTINGTON BEACH SANTA ANA RIVER VANS SHOES WORLD HQ ARC FOOD AND LIBATIONS EGGSLICE OF WINE PORTOLA COFFEE SOCO FARMERS MARKET SUSIECAKES TACO MARIA THE CHEESE SHOP THE ART INSTITUTE OF CALIFORNIA SYSTEMS CORPORATE OFFICE PROPOSED MIXED USE DEVELOPMENT THE OBSERVATORY (850 Seat Music Venue) 5

6 STRONG IN-PLACE CASH FLOW WITH FUTURE POTENTIAL UPSIDE MAJOR TENANT OVERVIEW TENANT LEASE SF % OF NRA LEASE EXP. TERM REMAINING CREDIT RATING The Property is 84% leased to a strong mix of diverse corporate users highlighted by Kaiser, Optima Tax Relief, and Farmers Insurance providing investors with a stable near-term cash flow. Furthermore, with in-place rents currently 11.6% below market and strong continued market fundamentals for the SOCO market, the opportunity provides investors with the ability to drive additional income growth as 59% of the NRA expires over the next three years. KAISER FOUNDATION HEALTH PLAN OPTIMA TAX RELIEF FARMERS INSURANCE 18,528 SF 12.3% Apr Years AA- 18,345 SF 12.2% Mar Years N/A 9,372 SF 6.2% Mar Years A 6

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8 INSTITUTIONAL QUALITY OFFICE CAMPUS WITH FUTURE ENHANCEMENT OPPORTUNITIES Harbor Corporate Park is regarded as a high quality office property in the emerging SOCO micro-market area. The institutionally maintained, four building campus provides highly efficient floor plates offering maximum flexibility to corporate users from 1,000 SF to 45,000 SF. In addition, new ownership can benefit from solidifying the campus experience through a strategic enhancement of the collaborative office atmosphere. Existing Building Exterior ENHANCEMENT OPPORTUNITIES: Ground floor high utility tenant suite buildouts including private patios and roll-up doors promoting an indoor/outdoor work environment Shared outside common areas with outdoor lounge environment, covered patios & WIFI, and connective walkways throughout the campus Modernize and enrich Property s exterior facade Enhanced Property amenities such as bike rentals on-site (promoting easy access to the nearby amenities), & electric car charging stations Upgraded Building Exterior 8

9 Existing Exterior Office Space Existing Inner Office Space Private Patios & Roll-Up Doors Example High Utility Tenant Suite 9

10 STRONG JOB GROWTH AND INCREASING ECONOMIC DIVERSITY +1.6% (YOY JUNE 2017) NATIONAL JOB GROWTH 2 nd LARGEST STATE FOR EMPLOYMENT GROWTH IN USA With an unemployment rate of only 3.3%, Orange County s labor market is burgeoning and is outperforming both the state (4.8%) and nation (4.3%). Orange County job growth has reached its highest level since 2000 with health and tech related services acting as the largest driver of job creation. The significant growth of this highly educated, diversified employment pool will further increase demand for Orange County office space and support continued increases in market rents. SURGING SOCO OFFICE MICRO-MARKET The SOCO micro-market has reached new heights with current occupancy at 93.6%. Market rents are experiencing exceptional growth with a nearly 13% increase in office asking rents year-over-year. The SOCO micro-market has seen a significant increase in demand as vacancy levels have dropped nearly 60% since 2010, while at the same time achieving rental increases in excess of 40%. With the lack of available office space, coupled with no new office supply projected to deliver in the next 18 months, the SOCO micromarket office rents are expected to continue to increase. 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% +2.0% (YOY JUNE 2017) STATE JOB GROWTH +2.3% (YOY JUNE 2017) ORANGE COUNTY JOB GROWTH +242,000 (YOY THROUGH 2017) ADDITIONAL JOBS CURRENT UNEMPLOYMENT RATES 3.3% TOP 5 COUNTIES IN THE USA FOR RESIDENTS WITH BACHELOR S DEGREE OR HIGHER 4.8% 4.3% ORANGE COUNTY STATE OF CALIFORNIA NATIONAL Source: CA Employment Development Dept. (July 2017) U.S. Bureau of Labor Statistics, LAEDC 10

11 CENTRAL LOCATION SERVED BY MAJOR TRANSPORTATION CORRIDORS Located in the heart of Orange County within the SOCO micro-market, Harbor Corporate Park straddles the border of Costa Mesa to the east and Santa Ana to the west. The central location provides the ease of access to key freeways, providing tenants with the coveted ability to attract talent throughout Southern California. Convenient freeway access to the I-405 Freeway located a half mile south of the Property (380,000 vehicles/day) Located four miles west from the SR-55 Freeway and two miles northwest of the SR-73 Freeway Central to the four regions of Orange County, Los Angeles County, Riverside County and San Bernardino County providing immediate accessibility to all major employment pools in Southern California Located five miles from John Wayne International Airport John Wayne Airport 11

12 INVESTMENT SALES ADVISORS: FINANCING ADVISORS: RYAN GALLAGHER Senior Managing Director CA Lic. # DERRECK BARKER Director CA Lic. # CLARK CASHION Analyst CA Lic. # ccashion@hfflp.com KEVIN MACKENZIE Senior Managing Director CA Lic. # kmackenzie@hfflp.com BRIAN TORP Senior Director CA Lic. # btorp@hfflp.com ATLANTA AUSTIN BOSTON CAROLINAS CHICAGO DALLAS DENVER HOUSTON INDIANAPOLIS LOS ANGELES MIAMI NEW JERSEY NEW YORK CITY ORANGE COUNTY ORLANDO PHILADELPHIA PHOENIX PITTSBURGH PORTLAND SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON D.C. LONDON Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number ( HFF ). 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 neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference 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 purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on