Second Quarter 2011 Tri-Valley General Industrial Warehouse R&D

Second Quarter 2011 Tri-Valley General Industrial Warehouse R&D PLEASANTON OFFICE 4305 Hacienda Drive, Suite 300 Pleasanton, CA 94588 Tel: 925.467.0900 Fax: 925.467.0911 www.ccareynkf.com

TABLE OF CONTENTS Coverage Map 1 Market Overview 2 Market Statistics By City 3 By Product Type 4 Graphical Data 5 Market Highlights 6 Agent Roster 7 Definitions and Methods for Calculation General Industrial: Warehouse: R&D: Buildings with a combination of limited dock high loading, grade level doors, less than ±20 clear height, and/or a mixed use of manufacturing, warehousing and distribution. Buildings with a combination of multiple dock high loading positions, limited or no grade level doors, minimum ±20 clear height, and a primary or historical use of warehousing and distribution of product. Higher image buildings with a combination of greater than 3 per 1,000 SF parking, more extensive glass lines to accommodate higher office area build out, and a primary or historical use of production, lab, and/or office areas. Our method for calculating statistical figures: 1. Absorption and vacancy are reflected once the space or building is actively marketed as available, not when the tenant physically moves out. This removes any confusion when a company may have a phased move or if they only stay in a portion of a space or building. 2. All asking rates are quoted on a Triple Net (NNN) basis for ease of comparison. The rates are the average asking rents, as given by the respective landlords in each market. The Cornish & Carey Commercial Newmark Knight Frank Pleasanton Quarterly Report is based on a quarterly survey of competitive Warehouse, General Industrial and R&D buildings. The data included in this report incorporates not only space presently available on the market, but also space that we have been led to believe will come onto the market in the next ninety days. Information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but make no guarantee, warranty or representation about it. All information should be verified prior to lease or purchase.

COVERAGE MAP 1

TRI-VALLEY MARKET OVERVIEW T he Tri-Valley Industrial market experienced a relatively flat Second Quarter with 30,088 square feet of positive net absorption. While this may not seem like a notable event, it s important to realize that since January 1, 2010, we have experienced a total of 855,962 SF positive net absorption and our overall vacancy rate has decreased from 21.08% to 17.53%. However, during that time, average rental rates for all product types have decreased from $0.62 per SF NNN to $0.59 per SF NNN and sales prices have dropped 20% to 30% depending on the asset class. Significant Leasing Activity While the overall net absorption was nominal, there were some significant statistical changes this quarter: Dublin experienced 93,213 SF of positive net absorption which was attributed to Sky River RV leasing ±99,427 SF of warehouse space from AMB Property Company. Pleasanton R&D had 67,972 SF of negative net absorption which was a combination of several events. 24 Hour Fitness vacated ±17,061 SF at their previous Pleasanton location as a result of opening their new Super Sport facility up the street. Advantage Sales and Marketing vacated ±26,027 SF in Pleasanton and relocated to a Class A office building (also in Pleasanton). Crossmark also relocated to a Class A office building which put an additional ±17,391 SF on the market. In Livermore, Pool Corp. expanded into a larger ±30,541 SF warehouse space. Pool Corp. is the largest wholesale distributor of swimming pool and related backyard products, with over 290 sale locations around the world. FormFactor, a semiconductor test technology company, renewed their lease in Livermore earlier this year for an additional eleven years. The three buildings serve as FormFactor s corporate headquarters. Significant Sales Activity Sale activity remained active this quarter compared to 2010. However, almost all of the activity was limited to bank-owned and shortsales. Bank of America sold an ±11,011 SF industrial condo in Pleasanton to a local user who plans to occupy half the building and lease out the balance. California Bank & Trust sold a ±6,352 SF industrial building in Livermore to a local investor who plans to use the building for storage until the market improves. Another local buyer, Sanjay Singh, purchased a ±9,019 SF condo from Fremont Bank in Livermore which his company plans on occupying. Vision West Commercial Centre, a four building, ±70,610 SF light industrial condo project sold three units totaling ±8,232 SF. Two of the units were sold to Pacific Infrastructure, a local Pleasanton company. The other unit was sold to a small business owner relocating from San Jose. Looking Forward While the Tri-Valley Industrial market has seen a slow, steady improvement since January 2010, lease rates and sales prices have continued to decrease. Our market still needs a few more quarters of substantial improvement before there will be any significant increase in real estate values, but we seem to be headed in the right direction. 2

TRI-VALLEY INDUSTRIAL MARKET STATISTICS By City City/Use No of Bldgs Total Rentable SF Vacancy % Availability (SF) Overall Direct Sublease Overall Direct Sublease Net Absorption Q2 11 Net Absorption YTD Avg Asking Rate (NNN) San Ramon R&D 1 96,882 50.58% 50.58% 0.00% 49,000 49,000 0 0 0 $0.85 General Industrial 33 843,815 9.55% 9.55% 0.00% 80,571 80,571 0 4,241 1,004 $0.80 Warehouse 2 406,052 0.00% 0.00% 0.00% 0 0 0 0 0 - TOTAL 36 1,346,749 9.62% 9.62% 0.00% 129,571 129,571 0 4,241 1,004 $0.83 Dublin R&D 2 125,000 44.00% 44.00% 0.00% 55,000 55,000 0 0 0 $0.85 General Industrial 40 809,578 17.36% 17.36% 0.00% 140,514 140,514 0 9,529 (11,801) $0.72 Warehouse 11 1,241,247 5.23% 5.23% 0.00% 64,907 64,907 0 83,684 97,549 $0.45 TOTAL 53 2,175,825 11.97% 11.97% 0.00% 260,421 260,421 0 93,213 85,748 $0.67 Pleasanton R&D 71 2,905,310 21.29% 19.91% 1.38% 618,503 578,449 40,054 (67,972) (8,429) $1.00 General Industrial 126 2,174,685 13.69% 13.19% 0.50% 297,708 286,808 10,900 7,259 20,839 $0.80 Warehouse 2 491,385 0.00% 0.00% 0.00% 0 0 0 0 0 - TOTAL 199 5,571,380 16.44% 15.53% 0.91% 916,211 865,257 50,954 (60,713) 12,410 $0.90 Livermore R&D 28 1,195,005 19.07% 16.22% 2.85% 227,929 193,819 34,110 771 (2,924) $0.83 General Industrial 316 5,947,406 18.99% 17.04% 1.95% 1,129,138 1,013,266 115,872 (16,933) 55,576 $0.52 Warehouse 87 8,812,344 19.61% 16.77% 2.84% 1,727,740 1,477,459 250,281 9,509 61,154 $0.40 TOTAL 431 15,954,755 19.33% 16.83% 2.51% 3,084,807 2,684,544 400,263 (6,653) 113,806 $0.58 Total Market R&D 102 4,322,197 21.99% 20.27% 1.72% 950,432 876,268 74,164 (67,201) (11,353) $0.95 General Industrial 514 9,775,484 16.86% 15.56% 1.30% 1,647,931 1,521,159 126,772 4,096 65,618 $0.62 Warehouse 100 10,951,028 16.37% 14.08% 2.29% 1,792,647 1,542,366 250,281 93,193 158,703 $0.41 TOTAL 716 25,048,709 17.53% 15.73% 1.80% 4,391,010 3,939,793 451,217 30,088 212,968 $0.59 Availability Breakdown (by Square feet and Percent of Availability) San Ramon Dublin Pleasanton Livermore 49,000 38% 80,571 62% 64,907 25% 55,000 21% 140,514 54% 618,503 68% 297,708 32% 1,727,740 56% 227,929 7% 1,129,138 37% General Industrial Warehouse R&D 3

TRI-VALLEY INDUSTRIAL MARKET HIGHLIGHTS By Product Type City/Use No of Bldgs Total Rentable SF Vacancy % Availability (SF) Overall Direct Sublease Overall Direct Sublease Net Absorption Q2 11 Net Absorption YTD Avg Asking Rate (NNN) General Industrial San Ramon 33 843,815 9.55% 9.55% 0.00% 80,571 80,571 0 4,241 1,004 $0.80 Dublin 40 809,578 17.36% 17.36% 0.00% 140,514 140,514 0 9,529 (11,801) $0.72 Pleasanton 126 2,174,685 13.69% 13.19% 0.50% 297,708 286,808 10,900 7,259 20,839 $0.80 Livermore 316 5,947,406 18.99% 17.04% 1.95% 1,129,138 1,013,266 115,872 (16,933) 55,576 $0.52 TOTAL 515 9,775,484 16.86% 15.56% 1.30% 1,647,931 1,521,159 126,772 4,096 65,618 $0.62 Warehouse San Ramon 2 406,052 0.00% 0.00% 0.00% 0 0 0 0 0 N/A Dublin 11 1,241,247 5.23% 5.23% 0.00% 64,907 64,907 0 83,684 97,549 $0.45 Pleasanton 2 491,385 0.00% 0.00% 0.00% 0 0 0 0 0 N/A Livermore 87 8,812,344 19.61% 16.77% 2.84% 1,727,740 1,477,459 250,281 9,509 61,154 $0.40 TOTAL 102 10,951,028 16.37% 14.08% 2.29% 1,792,647 1,542,366 250,281 93,193 158,703 $0.41 R&D San Ramon 1 96,882 50.58% 50.58% 0.00% 49,000 49,000 0 0 0 $0.85 Dublin 2 125,000 44.00% 44.00% 0.00% 55,000 55,000 0 0 0 $0.85 Pleasanton 71 2,905,310 21.29% 19.91% 1.38% 618,503 578,449 40,054 (67,972) (8,429) $1.00 Livermore 28 1,195,005 19.07% 16.22% 2.85% 227,929 193,819 34,110 771 (2,924) $0.83 TOTAL 102 4,322,197 21.99% 20.27% 1.72% 950,432 876,268 74,164 (67,201) (11,353) $0.95 General Industrial Market 1,647,931 SF Available Warehouse Market 1,792,647 SF Available R&D Market 950,432 SF Available 4.89% 8.53% 18.07% 3.62% 23.98% 5.16% 5.79% 68.52% 96.38% 65.08% Livermore San Ramon Dublin Pleasanton 4

TRI-VALLEY INDUSTRIAL MARKET STATISTICS GRAPHS Tri-Valley Total Vacancy Rates vs. Asking Rates 25.00% 20.00% 15.00% $0.80 $0.70 $0.60 $0.50 $0.40 10.00% 5.00% 0.00% Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 $0.30 $0.20 $0.10 $0.00 Total Vacancy Rates Total Asking Rates Historical Absorption for Industrial, Warehouse and R&D Markets 600,000 400,000 200,000 0 (200,000) (400,000) (600,000) (800,000) (665,570) (89,918) (216,669) (298,792) 386,315 (58,078) 296,454 18,303 182,800 30,088 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 5

Significant First Half 2011 Lease Transactions (Including Renewals) Tenant Lessor Address Submarket Use Size (SF) FormFactor, Inc. Pacific Union Homes 7005 Southfront Road Livermore R&D (R) 118,894 Sky River RV AMB Property Company 6700 Golden Gate Drive Dublin WHS 99,427 The Well Dynasty Growth Group 2333 Nissen Drive Livermore IND 82,855 Clarity Medical Systems Nehmet Meleksalehi 5775 W Las Positas Boulevard Pleasanton R&D (R) 39,306 Pool Corp. Pell Development Company 4671 Las Positas Road Livermore WHS 30,541 AT&T Corporation Olympic Investments 4480 Willow Road Pleasanton R&D (R) 29,113 ADT Security Services, Inc. Triple Net Properties 4511 Willow Road Pleasanton R&D (R) 25,560 Stanford University Donald J. Bruzzone 4754 Bennett Drive Livermore WHS 24,398 Puronics Incorporated Harsch Investment Properties 5775 Las Positas Road Livermore WHS (R) 24,150 River City Building Supply Meld Properties 1375 Rutan Drive Livermore IND 21,672 Rockin Jump Glenborough Realty Trust 5875 Arnold Drive Dublin WHS 19,426 Ryerson Donald J. Bruzzone 5874 Brisa Street Livermore WHS 18,000 Omron Network Products Ellis Partners, LLC 5700 Stoneridge Drive Pleasanton R&D 17,725 i-gate Reynolds & Brown 7691 & 7693 Longard Road Livermore IND 14,288 IntegenX Inc. Ellis Partners, LLC 5720 Stoneridge Drive Pleasanton R&D (E) 13,680 Blazona Concrete Construction Three Sisters Ranch 7432 Las Positas Road Livermore IND 12,000 SMD Inc. Michael R. Polito 76 Wright Brothers Avenue Livermore IND 10,780 Edge Gymnastics B/G Dev Co. 6780 Sierra Court Dublin IND 10,272 (R) = Renewal (E) = Expansion Significant First Half 2011 Sale Transactions Buyer Seller Address Submarket Use Size (SF) BA Bottom Line LLC Michael Szulborski 7079 Commerce Circle Pleasanton IND 21,642 Shiner Properties LLC Bank of America North America 6620-6626 Owens Drive Pleasanton CONDO 11,011 Sanjay Singh Fremont Bank 4777 Bennet Drive, Unit A Livermore CONDO 9,019 Greg Alameda California Bank & Trust 6641 Brisa Street Livermore IND 6,352 Pacific Infrastructure Boulder Court Development 435 Boulder Court, Unit 200 Pleasanton CONDO 5,445 Jerry Quinnell Boulder Court Development 425 Boulder Court, Unit 600 Pleasanton CONDO 2,787 Rockin Jump leased ±19,426 SF at 5875 Arnold Drive in Dublin. Cornish & Carey Commercial Newmark Knight Frank represented the landlord. ADT Security Services renewed their ±25,560 SF lease at 4511 Willow Road in Pleasanton. Cornish & Carey Commercial Newmark Knight Frank represented the landlord. Cornish & Carey Commercial Newmark Knight Frank represented California Bank & Trust in selling their ±6,352 SF light industrial building at 6641 Brisa Street in Livermore. 6

AGENT ROSTER INDUSTRIAL DIVISION INDUSTRIAL DIVISION PLEASANTON OFFICE 4305 Hacienda Drive, Suite 300 Pleasanton, CA 94588 Tel: 925.467.0900 Fax: 925.467.0911 www.ccareynkf.com TRI-VALLEY Andrew Zink Lic #01767586 925.467.0907 azink@ccareynkf.com Dave Bruzzone Lic #01360224 925.467.0910 dbruzzone@ccareynkf.com CONTRA COSTA/NAPA/SOLANO Graden Travis Lic #00871716 925.974.0104 gtravis@ccareynkf.com Tyler Epting Lic #01317533 925.974.0238 tepting@ccareynkf.com Jeff Fritch Lic #01857956 925.974.0118 jfritch@ccareynkf.com OAKLAND/EMERYVILLE/RICHMOND Jim Clark Lic #00926308 510.923.6247 jclark@ccareynkf.com Jeff Lahr Lic #01296493 510.923.6208 jlahr@ccareynkf.com Andrew Schmieder Lic #01828740 510.923.6206 aschmieder@ccareynkf.com Thomas Southern Lic #01808807 510.923.9158 tsouthern@ccareynkf.com I-880 CORRIDOR Joe Fabian Lic #01013902 510.300.0211 jfabian@ccareynkf.com Steve Kapp, SIOR Lic #01069911 510.300.0213 skapp@ccareynkf.com Shawn Klein Lic #01426551 510.300.0217 sklein@ccareynkf.com Paul Mueller Lic #00896726 510.300.0216 pmueller@ccareynkf.com Pat Patterson Lic #01809074 510.300.0218 ppatterson@ccareynkf.com Sam Remcho Lic #01804645 510.300.0204 sremcho@ccareynkf.com David Scarpinato Lic #01809074 510.300.0203 dscarpinato@ccareynkf.com Ryan Sitov Lic #01874541 510.300.0215 rsitov@ccareynkf.com Michael Spiro Lic #01433395 510.300.0212 mspiro@ccareynkf.com Zachary Smith Lic #01860469 510.300.0210 zsmith@ccareynkf.com NORTH BAY Brian Gleason Lic #00825795 415.526.7651 bgleason@ccareynkf.com Denis Plehn Lic #00799202 707.583.8426 dplehn@ccareynkf.com 7