>> Rents Rise To Highest Point Ever

Research & Forecast Report SAN FERNANDO VALLEY & VENTURA COUNTY INDUSTRIAL Accelerating success. >> Rents Rise To Highest Point Ever Key Takeaways > Asking rental rates rose $.2 P NNN to $.69 P NNN. Rents have surpassed the previous peak of $.68 P NNN in 27. > Despite vacancy increasing 1 basis points to 1.9% on vacant construction completions, vacancy remains near historic lows. > Sales and leasing activity totaled 2,123,4, broken out into 15 sales (554,2 ) and 43 leases (1,569,2 ). Market Indicators Relative to prior period Forecast Rental Rate Vacancy Net Absorption Summary Statistics V & Ventura County, Vacancy Rate 1.9% > Net absorption totaled 569,7 for the quarter and 1,535,9 for the year. Change from Q2 17 (Basis Points) Net Absorption 569,7 > activity remained strong at 917,3. Completions 834,2 Under 917,3 San Fernando Valley and Ventura County Industrial Market Asking Rents V & Ventura County, V & Ventura County Industrial Market Average Asking Rent $.69 P NNN Change from Q3 17 The San Fernando Valley is the most populous region of Los Angeles and home to the major motion picture, music recording and television production companies. Much of the industrial infrastructure is devoted to ancillary services for the entertainment industry and population serving industrial warehouses. The San Fernando Valley has recently seen an influx of value-add investors continuing to purchase properties in the region. +1 BPS $.2 P NNN Y.O.Y. Change (%) 4.5% Labor Force Los Angeles County, 12-mo Employment Growth (%) 12-mo Actual Employment Change Manufacturing Transportation, Trade & Utilities 8.1% -.8% -.7% +11, -2,8-6,2

San Fernando Valley & Ventura County INDUSTRIAL Vacancy > Vacancy increased 1 basis points to 1.9%. > Vacancy remains tightest in the Simi Valley / Moorpark area at.1% and highest in the Santa Clarita Valley at 4.1%. > Forecast: There remains 917,3 of space under construction, which will likely increase the vacancy rate in future quarters. Absorption and Leasing Activity > Industrial demand was positive 569,7 for the quarter. > Sales and leasing activity totaled 2,123,4 this quarter. This was broken out into 15 sales (554,2 ) and 43 leases (1,569,2 ). > Forecast: Future quarters will likely see more net absorption as new, larger buildings under construction come to market. Rental Rates > Average asking rents increased $.2 P NNN to $.69 P NNN. Asking rents have surpassed their peak of $.68 P NNN which was seen in late 27. > Asking rents were highest in the Conejo Valley at $.85 and lowest in West Ventura County at $.6 P NNN. > Forecast: Rents will continue to rise in future quarters but increases will not be uniform. The discrepancy between rents in Los Angeles and Ventura Counties will likely increase in future quarters as asking rents are rising faster in Los Angeles County compared to Ventura County. Historical Vacancy v. Rents V & Ventura County, $ P PER MONTH (NNN) Net Absorption by Submarket V & Ventura County, $.75 $.7 $.65 $.6 $.55 $.5 $.45 $.4 5, 4, 3, 2, 1, (1,) (2,) (161,7) WEST VALLEY (11,4) CONEJO VALLEY RENTS CENTRAL VALLEY VACANCY 9,8 EAST VALLEY 72,1 WEST VENTURA COUNTY 256,2 SANTA CLARITA VALLEY 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% % % VACANT (TOTAL) 44,7 Historical Sales & Leasing Activity V & Ventura County, Q3 213-217 SIMI VALLEY/MOORPARK 3,, 2,5, 2,, 1,5, 1,, 5, 2

San Fernando Valley & Ventura County INDUSTRIAL > There was 834,2 added to the base this quarter while 917,3 of space remains under construction. > One major development completed this quarter is the Sun Valley Business Center, which consists of two buildings totaling 361,. This will be one of the few modern distribution buildings in the San Fernando Valley and features 32 foot clearance, ER sprinklers, cross dock loading and wide truck courts. > Forecast: Many of the existing buildings in the San Fernando Valley are ill-suited for modern distribution or E-commerce tenants. This will start to change as new development begins addressing the needs of modern industrial tenants. The next few years will bring an increased supply of competitive space to the San Fernando Valley. Historical Net Absorption & Completions V & Ventura County, Q3 213-217 1,, 8, 6, 4, 2, (2,) (4,) (6,) NET ABSORPTION CONSTRUCTION COMPLETIONS Investment Trends Investment Trends Chart Los Angeles County Q3 13-17 > Cap rates continue to remain tight in Los Angeles County, averaging 5.% in. 7.% Average Price Per sf Average Cap Rate $18 > Forecast: There has been increased investor focus on fully leased industrial assets in prime infill locations. Consequently, we expect further demand to drive up sales prices, further compressing cap rates. 6.% 5.% 4.% 3.% $16 $14 $12 $1 $8 Outlook 2.% 1.% $6 $4 $2 > The San Fernando Valley is on the tail end of a building boom. Tight market conditions and rising rents are leading to a much needed increase in supply. As these newly completed buildings are leased up, we expect to see increased investor activity on these newly leased buildings..% $ Unemployment Rate Los Angeles County August 217 > For industrial users looking to find the ideal space to meet their needs, they will likely have to expand their industrial footprint by taking additional space in soon to be constructed speculative buildings or in build to suit projects, as quality space remains hard to find in this market. > Other alternatives for industrial space include the Tejon Commerce Center which is less then one hour north of the San Fernando Valley. 4.8% 4.7% 4.6% 4.5% 4.4% 4.3% 4.2% 4.1% 4.% 3.9% 3.8% 4.7% 4.4% 4.1% United States California Los Angeles County 3

San Fernando Valley & Ventura County INDUSTRIAL Market Description The San Fernando Valley and Ventura County industrial market includes 169.7 million of standard industrial space, and represents 15 percent of the total industrial space in buildings 1, square feet and greater in the Los Angeles Basin. It is a moderately mature market, with 68 percent of its space built more than 2 years ago. The market is oriented toward small- to medium-sized manufacturers and distributors, with only 29 percent of its space contained in big box buildings (1,+ ). Submarket Map RECENT TRANSACTIONS & MAJOR DEVELOPMENTS San Fernando Valley & Ventura County Industrial SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 45 Science, Moorpark 15,3 $7 Million $64 P 238 South Mariposa Street LLC XP Systems Corp 841 Telfair, Sun Valley 48,5 $12 Million $247 P Epicenter Landcorp 2 Quixote 37 Cohasset, Burbank 49,7 $1.6 Million $212 P Storage Etc. Duke Realty Corp. 12222 Sherman Way, North Hollywood 48,2 $1.1 Million $21 P ESH Properties Penwood LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 28545 Livingston, Valencia 173,1 Direct - New Distribution Consolidated Solar 28545 Livingston Avenue West 32 Golf Course, Ventura 48,6 Direct - New Light Keystone Automotive 183rd La Palma Investors 845 Woodley, Van Nuys 41,7 Renewal Light Aviall VNAIC 121 Rice, Oxnard 27,9 Sublease Light American Alupack Industries Record Xpress of California MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION Conejo Spectrum Sares Regis Group 55,378 Conejo Valley Under Q4 217 Tejon Ranch Commerce Center, Tejon Ranch Tejon Ranch Company / Majestic Realty 48,48 Tejon Under Q4 217 IAC Commerce Center, Phase I, Valencia International Airport Centers 398,2 Santa Clarita Valley Completed Q3-217 4

San Fernando Valley & Ventura County INDUSTRIAL INDUSTRIAL OVERVIEW San Fernando Valley & Ventura County Industrial Market EXISTING PROPERTIES CONSTRUCTION VACANCY AVAILABILITY ACTIVITY ABSORPTION RENTS Submarket/ Building Size Bldgs Total Inventory Completions Current Qtr Under Vacancy Vacancy Prior Qtr Availability Sales Number of Activity Sales Lease Activity Number of Leases Total Gross Activity Current Qtr Total Gross Activity YTD Net Absorption Current Qtr Net Absorption YTD Weighted Avg Asking Lease Rates WEST VENTURA COUNTY Subtotal 1,143 41,97,2 13,5 2.5% 2.6% 4.2% 13,5 6 314,3 1 417,8 1,159,7 72,1 332,6 $.6 SIMI VALLEY/MOORPARK Subtotal 37 11,14,2 191,7.1% 3.7% 2.9% 357,6 5 75,5 4 433,1 964,9 44,7 852,9 $.62 SANTA CLARITA VALLEY Subtotal 432 18,91,2 441,8 46,8 4.1% 3.1% 7.6% 294, 4 294, 782,5 256,2 195,4 $.69 CONEJO VALLEY Subtotal 249 7,332,2 31,3 548,4 1.7% 1.2% 2.2% 81, 3 81, 122,9 (11,4) (5,2) $.85 WEST SAN FERNANDO VALLEY Subtotal 788 25,853,6 2.6% 2.% 3.5% 95,4 5 95,4 558,6 (161,7) (183,4) $.75 CENTRAL SAN FERNANDO VALLEY Subtotal 428 13,73,1.7%.7% 1.1% 69,7 2 69,7 273,8 $.89 EAST SAN FERNANDO VALLEY Subtotal 1,66 5,881,3 361,.9%.2% 2.3% 93,1 4 639,3 15 732,4 1,482,9 9,8 388,7 $.85 SAN FERNANDO VALLEY SUBTOTAL Subtotal 3,269 19,747,7 834,1 1.9% 1.2% 3.3% 93,1 4 1,54,8 25 1,147,9 3,54,2 6,7 357, $.72 VENTURA COUNTY SUBTOTAL Subtotal 1,672 59,942,5 74,9 341,6 2.% 2.7% 3.7% 461,1 11 514,4 18 975,5 2,291, 59, 1,178,9 $.61 MARKET TOTAL 1, - 19,999 2,395 33,816,.8%.5% 1.7% 96,8 7 148,9 1 245,7 739,2 (11,9) (13,4) $.85 2, - 39,999 1,491 4,175,8 31,3 278,.6%.4% 2.2% 19,9 4 278, 1 387,9 1,23,5 (7,3) 175,7 $.79 4, - 69,999 594 29,82,6 43,6 45,5.8% 1.% 2.4% 5,2 1 36,3 12 41,5 976,5 111,9 235,9 $.73 7, - 99,999 199 16,39,6 19,6 188,8 4.3% 2.5% 5.3% 147,2 4 147,2 66,9 (117,8) 224,3 $.73 1,- 249,999 238 33,426,7 34,6 4.% 5.% 7.% 297,3 3 326,8 5 624,1 1,347,1 633, 626,1 $.65 25, - 499,999 28 9,376,8 264,1 1.2%.8% 2.% 38, 2 38, 561,5 229,8 483,3 $.55 5,+ 8 6,73,5 4.3% 2.7% 4.3% 36,5 (16,) (16,) $.64 total 4,953 169,719, 834,2 917,3 1.9% 1.8% 3.5% 554,2 15 1,569,2 43 2,123,4 5,345,2 569,7 1,535,9 $.69 5

San Fernando Valley & Ventura County INDUSTRIAL Definitions of key terms in this report Total Rentable Square Feet: Industrial space in buildings with 1, or more of industrial space. Includes speculative as well as owner-occupied buildings. Excludes Research & Development (R&D) buildings (industrial buildings with at least 3% office build-out, 3/1 parking ratio and a high level of finish). Excludes space that is under-construction or renovation. Vacancy: Space in existing buildings that is vacant and immediately available during the quarter for direct lease, for sublease or for sale, plus space that is vacant but not available for direct lease or sublease. Availability: All space that is being currently marketed for occupancy, includes space which may be currently occupied or which may be under construction or renovation. 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). Gross Activity: Square feet sold and leased for all known transactions completed during the quarter. Excludes lease renewals. Excludes investment sale transactions. Weighted Average Asking Rental Rates: Weighted by square feet available for direct lease. Data is based on triple net rents, and excludes expenses such as taxes, insurance, maintenance, janitorial service and utilities. Reported on a monthly, per basis. Completions: 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. 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. 396 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 79 EMEA: 111 UNITED STATES: V & Ventura County Office License No. 198231 1683 Ventura Suite J Encino, CA 91436 > $2.6 billion in annual revenue > 2. billion square feet under management > Over 15, professionals TEL: +1 818 95 58 FAX: +1 818 325 4 Under : Includes buildings that are in some phase of construction, beginning with foundation work and ending with the issuance of a Certificate of Occupancy. HANS MUMPER Executive Managing Director Greater Los Angeles THOMAS GALVIN Research Analyst Research Services 6