South Bay Leasing Activity Reaches 4-Year High as El Segundo Stays Hot

office SOUTH BAY market report South Bay Leasing Activity Reaches 4-Year High as El Segundo Stays Hot Market overview MARKET indicators - VACANCY 21.3% NET ABSORPTION 192,700 The South Bay office market saw total vacancy decrease during the second quarter of 2015 by 60 basis points to 21.3% from 21.9% last quarter. Direct weighted average asking rents increased to $2.20 per square foot (P), per month Full Service Gross (FSG) from $2.16 P FSG last quarter. Demand for space was positive with 192,700 of net absorption, a major swing from last quarter s negative absorption due to owner/user conversions to investment properties. Leasing activity reached a 4-year high recording 645,613. The El Segundo submarket had 374,738 of leasing activity, more than half of the market s total. CONSTRUCTION 482,488 RENTAL RATE $2.20 FSG UNEMPLOYMENT 7.6% The two largest sales transactions recorded were Stream Realty Partners acquiring 21250 Hawthorne Blvd. in Torrance (302,628 ) from Bixby Land Company for $68.5M ($226 P) and The Muller Company acquiring the 6 building Del Amo Financial Center (353,012) in Torrance from Jamison Services Inc. for $62.4M ($177 P). In addition, 2201 E. El Segundo Blvd. in El Segundo sold for $31.1M, trading from Montana Avenue Capital to AGI Properties, Inc. Montana bought the property in March of 2014 for $11.3M and immediately started renovations, while also signing L Oreal Cosmetics as the lone tenant for the 53,788 building. MARKET trends - >> Total vacancy rate drops to 21.3% from 21.9% HISTORICAL VACANCY VS RENTS Q2 2011 - HISTORICAL net absorption & Construction COMPLETIONS Q2 2011 - >> Weighted average asking rental rate increases to $2.20 FSG >> Leasing activity increases to 55645,613 >> There was positive absorption of 192,700 $ P FSG PER MONTH (WEIGHTED) $2.40 $2.30 $2.20 $2.10 $2.00 $1.90 $1.80 $1.70 RENTS VACANCY 24% 22% 20% 18% 16% 14% 12% % VACANT (TOTAL) 400,000 0 () () () (400,000) NET ABSORPTION CONSTRUCTION COMPLETIONS >> Construction activity at 482,488 $1.60 2Q11 2Q12 2Q13 2Q14 2Q15 10% (500,000) 2Q11 2Q12 2Q13 2Q14 2Q15 1 Colliers International continuously refines its database. As a result, data reflected in this report may not be consistent with data reported in previous quarters. www.colliers.com/losangeles

market Report OFFICE SOUTH BAY VACANCY The total vacancy rate decreased to 21.3%, down 60 basis points from 21.9% reported last quarter. A longer historical perspective of the total vacancy rate shows the rate a year ago being 21.2%, as the market has gone through some fluctuations in the past year with major move-ins as well as previous owner-user properties being added to the market. Major move-ins for the quarter included: WPromote and Cherryman Industries moving into Campus 2100 for 33,492 and 17,223 respectively. Mullen Advertising relocated from 999 Sepulveda Blvd. to 28,000 at 2121 E Park Pl. in the Apollo at Rosecrans campus. In the Downtown Long Beach submarket, ATB Law completed their move into 100 W Broadway for 13,166. los angeles DEMOGRAPHICS >> Population: 10,136,509 (2015 Estimate) 10,510,281 (2020 Projection) 3.69% (Growth 2015-2020) >> Household income: $78,309 (Average) $54,514 (Median) >> Job growth: 2.4% (past 12 months) >> Unemployment rate: 7.6% (as of May 2015) Total vacancy rates continued to be highest in the LAX/Los Angeles/Westchester submarket at 39.0%. Central Torrance recorded the lowest at a rate of 13.5%. rates were highest for Class B space (25.6%) and lowest for Class A space (16.2%) with Class C space in-between at 18.5%. All classes saw a decrease in vacancy rates for the quarter. NET ABSORPTION Net absorption was 192,700 in second quarter 2015, with all submarkets recording positive absorption numbers except Central Torrance, which was relatively flat at -3,400. UNEMPLOYMENT May 2015 figures for nonfarm employment in Los Angeles County showed a recovering job market. Over the past 12 months, Los Angeles County has gained 100,500 jobs for an increase of 2.4%. This gain in employment led to the unemployment lowering to 7.6% compared to 8.0% one year ago. Nine out of the eleven industries tracked by the EDD posted year-overyear gains. Educational and Health Services (+30,100), Trade, Transportation, and Utilities (+20,800) and Leisure and Hospitality (+15,900) posted the largest gains. Manufacturing (-2,100) and Mining/Logging (-200) posted losses yearover-year. VACANCY BY SUBMARKET NET ABSORPTION BY SUBMARKET 45% 40% 0.0% DIRECT VACANCY SUBLEASE VACANCY 250,000 % VACANT 35% 30% 25% 20% 15% 10% 39.0% 0.0% 20.3% 0.2% 22.1% 0.7% 0.3% 18.9% 15.9% 0.5% 13.0% 150,000 50,000 15,000 98,000 31,700 20,800 30,600 5% 0 0% (50,000) (3,400) p. 2 Colliers International

market Report OFFICE SOUTH BAY office OVERVIEW EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION CONSTRUCTION RENTS Submarket/ Class Bldgs Total Inventory Direct Sublease Total Total Prior Qtr Leasing Activity Current Qtr Leasing Activity YTD Net Absorption Current Qtr Net Absorption YTD Completions Current Qtr Under Construction Weighted Avg Asking Lease Rate BUILDING CLASS/SIZE A 10,000-24,999 - - - - - - - - - - - - - 25,000 + 59 12,456,362 15.7% 0.5% 16.2% 17.3% 135,834 307,748 135,800 (40,100) 0 0 $2.52 Subtotal 59 12,456,362 15.7% 0.5% 16.2% 17.3% 135,834 307,748 135,800 (40,100) 0 0 $2.52 B 10,000-24,999 86 1,378,673 12.5% 0.2% 12.7% 11.9% 31,943 39,079 (11,000) (12,800) 0 0 $2.06 25,000 + 177 15,523,450 26.4% 0.4% 26.7% 27.0% 431,702 681,978 47,600 (259,000) 0 482,488 $2.03 Subtotal 263 16,902,123 25.2% 0.4% 25.6% 25.8% 463,645 721,057 36,600 (271,800) 0 482,488 $2.03 c 10,000-24,999 75 1,184,880 9.3% 0.0% 9.3% 10.2% 17,985 35,556 10,100 14,000 0 0 $1.84 25,000 + 37 2,309,686 23.3% 0.0% 23.3% 23.7% 28,149 69,899 10,100 28,600 0 0 $1.80 Subtotal 112 3,494,566 18.5% 0.0% 18.5% 19.1% 46,134 105,455 20,200 42,600 0 0 $1.81 SUBMARKET/BUILDING SIZE 10,000-24,999 10 162,457 20.4% 0.0% 20.4% 25.0% 5,475 6,021 7,400 1,700 0 0 $1.91 25,000 + 25 4,192,326 39.7% 0.0% 39.7% 41.9% 21,276 61,684 90,600 37,900 0 0 $1.57 Subtotal 35 4,354,783 39.0% 0.0% 39.0% 41.3% 26,751 67,705 98,000 39,600 0 0 $1.58 10,000-24,999 39 555,745 5.4% 0.3% 5.7% 6.2% 23,069 25,970 2,600 3,900 0 0 $2.59 25,000 + 77 10,458,979 19.6% 0.8% 20.3% 20.6% 351,669 608,728 28,000 (396,000) 0 482,488 $2.84 Subtotal 116 11,014,724 18.9% 0.7% 19.6% 19.9% 374,738 634,698 30,600 (392,100) 0 482,488 $2.84 10,000-24,999 60 1,030,419 11.0% 0.0% 11.0% 10.1% 15,424 23,449 (9,100) 600 0 0 $1.97 25,000 + 52 3,231,592 13.7% 0.6% 14.3% 14.4% 78,150 111,018 5,700 1,400 0 0 $2.48 Subtotal 112 4,262,011 13.0% 0.5% 13.5% 13.4% 93,574 134,467 (3,400) 2,000 0 0 $2.38 10,000-24,999 12 177,982 12.0% 0.0% 12.0% 7.0% 1,620 1,620 (8,800) (10,100) 0 0 $1.66 25,000 + 35 3,373,878 22.7% 0.2% 22.9% 24.1% 41,422 76,281 40,500 31,500 0 0 $1.92 Subtotal 47 3,551,860 22.1% 0.2% 22.3% 23.2% 43,042 77,901 31,700 21,400 0 0 $1.91 10,000-24,999 24 387,300 15.1% 0.3% 15.4% 15.3% 1,666 2,121 (600) (1,900) 0 0 $1.31 25,000 + 52 4,339,632 16.0% 0.3% 16.3% 16.7% 48,450 86,862 15,600 31,800 0 0 $1.96 Subtotal 76 4,726,932 15.9% 0.3% 16.3% 16.6% 50,116 88,983 15,000 29,900 0 0 $1.91 10,000-24,999 16 249,650 10.3% 0.0% 10.3% 13.4% 2,674 15,454 7,600 7,600 0 0 $1.85 25,000 + 32 4,693,091 20.8% 0.0% 20.8% 21.1% 54,718 115,052 13,200 22,400 0 0 $2.30 Subtotal 48 4,942,741 20.3% 0.0% 20.3% 20.7% 57,392 130,506 20,800 30,000 0 0 $2.29 MARKET TOTAL Total 434 32,853,051 20.9% 0.4% 21.3% 21.9% 645,613 1,134,260 192,700 (269,200) 0 482,488 $2.20 Colliers International p. 3

market Report OFFICE SOUTH BAY >> The South Bay market continues to experience positive investment sale activity. >> Currently 210,000 of office space under construction and 272,488 under renovation >> The average asking rates in El Segundo were $2.52 P in Q4 2013 and reached $2.84 P in CONSTRUCTION No new projects were delivered to the market in second quarter 2015. There is currently 482,488 of office space under construction. The largest project is Elevon at Campus El Segundo, a fifteen building office campus totaling 210,000 complemented by high-end retail shops and restaurants. The campus is expected to by completed by next quarter. Renovation activity in South Bay remains strong, as 2201 E El Segundo Blvd, 2040 E Mariposa Ave and 2175 E Park Place in El Segundo are all slated to complete their renovations in 2015. These three properties total 272,488. ACTIVITY New leasing activity during the second quarter totaled 645,613 compared to 488,647 in the first quarter of 2015, an increase of 32%. This is also the high-water mark in the last 4 years. The El Segundo/Beach Cities submarket continues to lead the South Bay market in leasing activity, recording 58% of the total activity. Leasing activity this quarter included: DaVita Healthcare Partners leasing approximately 184,000 at Apollo at Rosecrans. Their new HQ will span both 2175 E. Park Pl. (130,000 ) and 2120 E. Park Pl. (54,000 ). In the LAX/ Los Angeles/Westchester submarket, DirecTV subleased 53,000 from Raytheon at 2200 E. Imperial Hwy. Rounding out the major leases signed were Fresh and Easy signing for 33,819 at 20101 Hamilton Ave. in Torrance and Regus Executive Suites signing for 12,590 at 2447 Pacific Coast Highway in Hermosa Beach. RENTAL RATES The weighted average asking rent for direct space increased to $2.20 P from $2.16 P last quarter. This represents the 7th consecutive quarter of rate increases for the market. Average asking rents remained highest in the El Segundo/Beach Cities submarket ($2.84 P), and lowest in the LAX/Los Angeles/Westchester submarket ($1.58 P). In some top-tier buildings, particularly in El Segundo, asking rates have pushed well past the $3.00 P mark. Central Torrance saw the biggest jump in asking rents as the new ownership at 21250 Hawthorne Blvd increased rents by at least $0.35 for all 60,000 of available space. This caused a $0.16 increase for all of Central Torrance as the market already had the lowest amount of available square footage. WEIGHTED AVERAGE ASKING LEASE RATES BY SUBMARKET LEASING ACTIVITY BY SUBMARKET $ P PER MONTH (FSG) $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 $1.58 $1.91 $1.91 $2.38 $2.29 $2.84 400,000 350,000 250,000 150,000 50,000 0 50,116 57,392 26,751 93,574 43,042 374,738 p. 4 Colliers International

market Report OFFICE SOUTH BAY outlook The South Bay market continues to do well as tenants seek more favorable rates than they ll find in West Los Angeles, Playa Vista and Santa Monica in particular. As leasing activity has reached a four year high, we can expect to see larger blocks of space get absorbed in the next year or so. Rental rates continue to rise on the strength of El Segundo s tightening market. Value-add properties and strong tenant demand for creative space are creating profitable opportunities for those willing to take on renovation projects. The outlook for the overall South Bay market remains positive. market description The South Bay office market is comprised of 32.4 million, representing 9% of the total office space in buildings 30,000 square feet and greater in the Los Angeles Basin. Most of the space (64%) was built in the 1980s, and only 8% was built 1990 current. Nearly half (49%) of its space is contained within mid-rise buildings (5 13 stories), followed by 32 percent in lowrise buildings and 19% in high-rise. It has a large concentration of firms in aerospace (although much less than in the 1980s), automotive, telecommunications, information technology, healthcare, and business services, and is served by a highly educated labor force. HISTORICAL leasing ACTIVITY - UNEMPLOYMENT RATE United States, California & Los Angeles County May 2015 1, 8.0% 7.6% 1,000,000 900,000 800,000 700,000 7.0% 6.0% 5.0% 5.3% 6.2% 600,000 4.0% 500,000 3.0% 400,000 2.0% 1.0% 2Q11 2Q12 2Q13 2Q14 2Q15 0.0% United States California Los Angeles County RECENT TRANSACTIONS & MAJOR DEVELOPMENTS SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 21250 Hawthorne Blvd, Torrance 302,628 $68,500,000 $226 P Stream Realty Partners, LP Bixby Land Company Del Amo Financial Center, Torrance 353,012 $62,400,000 $177 P The Muller Company Jamison Services, Inc. 2201 E El Segundo Blvd, El Segundo 53.788 $31,127,500 $579 P AGI Properties, Inc Montana Avenue Capital LLC 680 Knox St, Torrance 106,551 $17,150,000 $161 P The Ruth Group Brookfield Asset Management 1655 W Redondo Beach Blvd, Gardena 44,812 $5,800,000 $129 P BBCN Bank Zions Management Services LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 2175 Park Place, El Segundo 130,000 Direct B DaVita HealthCare Partners Invesco 2120 Park Place, El Segundo 54,000 Direct B DaVita HealthCare Partners Invesco 2200 E Imperial Hwy, El Segundo 53,000 Sublease A DirecTV Raytheon 20101 Hamilton Ave, Torrance 33,819 Direct A Fresh & Easy Neighborhood Market, Inc. Omninet Capital 2447 Pacific Coast Highway, Hermosa Beach 12,590 Direct B Regus Executive Suites 2447 Pacific Coast Highway LLC MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION Elevon At Campus, El Segundo Continental Development 210,000 El Segundo/Beach Under Construction Q3 2015 2175 E Park Place, El Segundo Invesco 130,000 El Segundo/Beach Under Renovation Q4 2015 2040 E Mariposa Ave, El Segundo Overton Moore Properties 88,700 El Segundo/Beach Under Renovation Q3 2015 2201 E El Segundo Blvd, El Segundo AGI Properties, Inc 53,788 El Segundo/Beach Under Renovation Q3 2015 123 Nevada St, El Segundo Smoky Hollow LLC 10,000 El Segundo/Beach Proposed TBD Colliers International p. 5

market Report OFFICE SOUTH BAY DEFINITIONS OF KEY TERMS USED IN THIS REPORT Total Rentable Square Feet: Office space in buildings with 10,000 or more of speculative office space. Includes competitive space in Class A, B and C single-tenant and multi-tenant buildings. Excludes noncompetitive owner-occupied buildings, buildings that include 30% or greater of medical or retail space, and space that is under-construction, under-renovation or off-market. Net Absorption: Net change in occupied square feet from one period to the next (includes the impact of change in vacant space available for sublease). Leasing Activity: Square feet leased from all known transactions completed during the quarter. Excludes lease renewals. 502 offices in 67 countries on 6 continents United States: 140 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 108 >> $2.3 billion in annual revenue >> 1.7 billion square feet under management >> Over 16,200 professionals Class A Space: Space that an image-conscious company would lease for its headquarters. Typically, this space has a very high level of finish and an excellent location, and commands the highest rents in the market. Class B Space: Highly functional, attractive space, but less prestigious than Class A Space, and commanding lower rental rates. Class C Space: Functional, competitive space, but with a lower level of finish and/or a less desirable location than with Class B Space, and commanding lower rental rates. Low-Rise: Buildings with a total of 4 floors or less. Mid-Rise: Buildings with a total of 5 to 13 floors. High-Rise: Buildings with 14 or more floors. Direct : Space in existing buildings that is vacant and immediately available during the quarter for direct lease, plus space that is vacant but not available for direct lease or sublease (for example, that is being held for a future commitment). Total : Space in existing buildings that is vacant and immediately available during the quarter for direct lease or for sublease, plus space that is vacant but not available for direct lease or sublease. Weighted Average Asking Rental Rates: Weighted by the total square feet available for direct lease. Data is based on Full Service Gross rents, and includes all costs associated with occupying the space, including taxes, insurance, maintenance, janitorial service and utilities. Reported on a monthly, per basis. Space Added (Net): Total square feet added during the quarter via construction completions, including renovated space returned to market, less total square feet taken off-market due to demolitions or conversions. Under-Construction/Renovation: Includes buildings that are in some phase of construction, beginning with foundation work and ending with the issuance of a Certificate of Occupancy. Also includes buildings that are under going substantial renovation. Technical Note Colliers International is continuously refining its database. The data shown in the historical tables and graphics in this report have been adjusted to take into account these changes in the database. This report has been prepared by Colliers International for general information only. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers International does not guarantee, warrant or represent that the information contained in this document is correct. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This report and other research materials may be found on our website at www.colliers.com/greaterlosangeles. united states: South Bay Office License No. 01908231 2121 Rosecrans Ave, Suite 3301 El Segundo, CA. 90245 tel +1 310 787 1000 FAX +1 310 381 2500 BRAWN, DOUGLAS Vice President CRAMER, STEVE Senior Vice President GOODWIN, THACHER Associate HOLLINGSWORTH, JOHN Executive Managing Director LASTITION, ERIC Senior Executive Vice President LUDWIG, GEOFFREY Senior Executive Vice President MATTESON, CAITLIN Research Director Research Services PUTNAM, RICHARD Managing Director Western Region Capital Markets WALSH, GREGORY T. Senior Fice President WONG, CHRISTOPHER Research Analyst Research Services Accelerating success. p. 6 Colliers International www.colliers.com/marketname