Research & Forecast Report FAIRFIELD OFFICE Q4 Vacancy Edges Lower in Fourth Quarter > > Office Inventory: 5,067,112 > > Current Vacancy: 14.2% > > Net Absorption: 63,610 The vacancy rate for office space in Solano and Napa counties edged lower in the fourth quarter of from 15.5 percent to 14.2 percent. Net absorption in the quarter was positive 63,610 square feet. The combined average asking rate across all classes of office in the fourth quarter increased from $1.79 to $1.82 per square foot per month full service (FS). Fairfield Fairfield s vacancy rate declined from 22.4 percent to 20.7 percent in the fourth quarter, the largest decline of any city covered in this report. This decline was mostly a result of Kaiser s purchase of the vacant 520 Chadbourne Road in the Busch Corporate Center as a user transaction. The 34,848 square foot Class B office building sits on 5.27 acres and was purchased for $4,739,794, or $136.01 per square foot. Construction is nearing completion on Partnership Health Plan s 101,000 square foot Class A office building on Business Center Drive. Market Indicators Market Trends Relative to prior period Q4 Q1 2018* Vacancy Rental Rate Net Absorption Construction *Projected Unemployment Rate 3.9% 3.3% Solano County Napa County 10-Year Nominal Interest Rate 2.40 Consumer Confidence 122.1 ear Nominal Solano & Napa Counties All Classes Vacancy rates and asking rates trended upwards. Summary Statistics Q4 Solano & Napa Counties Office Market Previous Quarter Current Quarter Overall 15.5% 14.2% Net Absorption -32,373 63,610 Construction Completed 0 0 Under Construction 101,000 101,000 Overall Asking Rents* $1.79 $1.82 Class A Asking Rents $2.18 $2.18 Class B Asking Rents $1.84 $1.88 Class C/Flex Asking Rents $1.32 $1.33 *Asking Rents Reported Monthly
Napa Napa s vacancy rate declined from 9.2 percent to 7.7 percent in the fourth quarter. Two significant lease renewals took place in Napa in the quarter, both in Class B offices. At 211 Gateway Road West in the Napa Valley Gateway Business Park, Chadhury Associates leased 7,200 square feet of space. Also in the Napa Valley Gateway Business Park, C. Mondavi & Sons leased 5,293 square feet at 572 Gateway Drive. Summary The healthcare sector continued to have the greatest demand for space in Solano County, as evidenced by Kaiser s purchase of 520 Chadbourne and Partnership Heath Plan s office construction detailed earlier in this report. Government and wine/wine-related business are also showing demand. As the greater San Francisco Bay Area s powerful economic engine continues to drive expansion and ever escalating real estate activity, Napa and Solano counties are becoming a more attractive and affordable alternative for both businesses and residents to relocate. Solano & Napa Counties Class A 3 27% 21% 1 15% 9% 6% 3% 1 1 1 6% 2% Solano & Napa Counties Class B $2.50 $2.40 $2.30 $2.20 $2.10 $2.00 $2.00 $1.20 $1.10 $1.00 Solano & Napa Counties Office/Flex 36% 32% 2 $1.20 $1.10 $1.00 The largest sale transaction took place at 520 Chadbourne Road in Fairfield where Kaiser Foundation Hospitals & Health Plan purchased the 34,848 square foot office building. 2 Fairfield Research & Forecast Report Q4 Office Colliers International
505 80 Significant Lease Activity Danielle & Michael Shahan 3333 Vaca Valley Parkway, Vacaville DIXON 10/ 6,425 - Office/Flex 29 VACAVILLE Educational Records Evaluation 2480 Hilborn Road, Fairfield 10/ 1,116 - Class A Office NAPA 12 FAIRFIELD C. Mondavi & Sons 572 Gateway Drive, Napa 11/ 5,293 - Class B Office AMERICAN CANYON VALLEJO Chadhury Associates, Inc. 211 Gateway Road West, Napa 11/ 7,200 - Class B Office BENICIA 80 680 Significant Sale Activity PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE 520 Chadbourne Road, Fairfield 10/ 34,848 Kaiser Foundation Hospitals & Health Plan Class B Office 1313 Travis Bouelvard, Fairfield 10/ 5,548 Bradford G. Beck Trust Class B Office 3 Fairfield Research & Forecast Report Q4 Office Colliers International
Market Comparisons Fairfield OFFICE MARKET EXISTING PROPERTIES ABSORPTION CONSTRUCTION RENTS CLASS BLDGS TOTAL INVENTORY DIRECT DIRECT SUBLEASE SUBLEASE TOTAL CURRENT QUARTER PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETIONS CURRENT QTR UNDER CONSTRUCTION AVG ASKING BENICIA A 6 85,403 1,400 1.6% - 0. 1,400 1.6% 0. (1,400) (1,400) - - $- B - - - - - - - - - - - $- Total 7 115,403 1,400 1.2% - 0. 1,400 1.2% 0. (1,400) (1,400) - - $- FAIRFIELD A 25 917,921 189,686 20.7% - 0. 189,686 20.7% 19. (15,304) (18,765) - 101,000 $2.28 B 28 635,575 53,580 8. - 0. 53,580 8. 13.5% 32,143 36,389 - - $1.71 Flex 10 487,419 179,684 36.9% - 0. 179,684 36.9% 40.5% 17,828 3,320 - - $1.35 Total 63 2,040,915 422,950 20.7% - 0. 422,950 20.7% 22. 34,667 20,944-101,000 $1.81 NAPA A 16 660,127 21,569 3.3% - 0. 21,569 3.3% 4.9% 10,533 27,396 - - $2.35 B 30 637,692 70,933 11.1% - 0. 70,933 11.1% 13.9% 17,416 2,237 - - $2.11 Flex 14 408,187 38,429 9. - 0. 38,429 9. 9. (1,781) 4,105 - - $1.45 Total 60 1,706,006 130,931 7.7% - 0. 130,931 7.7% 9.2% 26,168 33,738 - - $1.96 VACAVILLE A 9 335,636 72,631 21.6% - 0. 72,631 21.6% 21.6% - (3,341) - - $1.87 B 12 205,986 6,574 3.2% - 0. 6,574 3.2% 3.2% - 3,382 - - $1.75 Flex 1 52,491 15,377 29.3% - 0. 15,377 29.3% 37.2% 4,175 4,175 - $1.20 Total 22 594,113 94,582 15.9% - 0. 94,582 15.9% 16.6% 4,175 4,216 - - $1.75 VALLEJO A 2 70,286 29,489 42. - 0. 29,489 42. 42. - (16,345) - - $2.35 B 7 244,085 18,622 7.6% - 0. 18,622 7.6% 7.6% - (1,694) - - $1.71 Flex 9 296,304 24,000 8.1% - 0. 24,000 8.1% 8.1% - 16,000 - - $1.10 Total 18 610,675 72,111 11. - 0. 72,111 11. 11. - (2,039) - - $1.77 MARKET TOTAL A 53 2,013,970 313,375 15.6% - 0. 313,375 15.6% 15.3% (4,771) (11,055) - 101,000 $2.18 B 83 1,808,741 151,109 8. - 0. 151,109 8. 11. 48,159 38,914 - - $1.88 Flex 34 1,244,401 257,490 20.7% - 0. 257,490 20.7% 22.3% 20,222 27,600 - - $1.33 Market Total 170 5,067,112 721,974 14.2% - 0. 721,974 14.2% 15.5% 63,610 55,459-101,000 $1.82 QUARTERLY COMPARISON AND TOTALS Q4-17 170 5,067,112 721,974 14.2% - 0. 721,974 14.2% 15.5% 63,610 55,459-101,000 $1.82 Q3-17 170 5,067,112 762,323 15. 23,261 0.5% 785,584 15.5% 14.9% (32,373) (8,151) - 101,000 $1.79 Q2-17 170 5,067,112 729,950 14. 23,261 0.5% 753,211 14.9% 15.1% 12,209 24,222-101,000 $1.76 Q1-17 170 5,067,112 742,159 14.6% 23,261 0.5% 765,420 15.1% 15.3% 12,013 12,013-101,000 $1.79 Q4-16 170 5,067,112 777,433 15.3% - 0. 777,433 15.3% 15.6% 14,801 54,496-101,000 $1.79 The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. 4 Fairfield Research & Forecast Report Q4 Office Colliers International
FOR MORE INFORMATION INDUSTRIAL/OFFICE: Phil Garrett, SIOR Executive Managing Director +1 707 863 8357 phil.garrett@colliers.com Jon Quick +1 707 863 8359 jon.quick@colliers.com Bill Kampton +1 707 863 8377 bill.kampton@colliers.com Steve Crocker +1 707 863 8361 steve.crocker@colliers.com Bret DeMartini +1 707 863 8397 bret.demartini@colliers.com Chris Petrini +1 707 863 8387 chris.petrini@colliers.com COMMERCIAL MORTGAGE BROKER: Robert Kincheloe +1 925 279 5564 robert.kincheloe@colliers.com PROPERTY MANAGEMENT: Tom Ohlson Managing Director, REMS +1 415 288 7894 tom.ohlson@colliers.com ADMINISTRATIVE: Brenda Rodrigues Operations Manager +1 707 863 0188 brenda.rodrigues@colliers.com RESEARCH: Rob Gerard Research Analyst II +1 707 863 8362 rob.gerard@colliers.com 396 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 79 EMEA: 111 $2.6 billion in annual revenue* 2.0 billion square feet under management 15,000 professionals and staff COLLIERS INTERNATIONAL 360 Campus Lane, Suite 101 Fairfield, CA 94534 USA +1 707 863 0188 www.colliers.com/fairfield About Colliers International Group Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry leading global real estate services company with 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. MARKET CONTACTS: Phil Garrett, SIOR Executive Managing Director +1 707 863 8357 phil.garrett@colliers.com Rob Gerard Research Analyst II +1 707 863 8362 rob.gerard@colliers.com Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that helps clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 12 consecutive years, more than any other real estate services firm. Colliers also has been ranked the top property manager in the world by Commercial Property Executive for two years in a row. For the latest news from Colliers, visit Colliers.com or follow us on Twitter: @Colliers and LinkedIn. Copyright 2018 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. *All statistics are for and include affiliates 5