RESEARCH & FORECAST REPORT

Q4 OFFICE ALAMEDA COUNTY, CALIFORNIA RESEARCH & FORECAST REPORT MARKET INDICATORS NET CONSTRUCTION RENTAL Q4-14 SELECTED MARKET STATS Projected Q1-15 > Tri-Valley total vacancy rate started the year at 11.9 percent and finished at 14.2 percent > Net Absorption for all classes of Tri-Valley space on the year was negative 669,609 square feet > Tri-Valley Weighted Average Asking Rents opened the year at $1.93 Full Service Gross and closed at $2.31 > California Unemployment Rate as of December : 5.6 percent QUIET CLOSE TO A HEALTHY 2015 kicks off to global uncertainty with significant topics that will surely weigh in over the next twelve months on the national economy (in no particular order): Russia in the Ukraine; Oil below $46.00 a barrel; continuing worldwide acts of terror; potential unravelling of the European Union; cyber-attacks by North Korea; continuing nuclear threats in Iran; the Chinese economy; ISIS and Al- Qaeda, to name a few. How will these topics play out and what impact may they bring our local real estate market? Those answers or any speculation about those topics will not be addressed in this report but we will look back at the Tri-Valley commercial real estate campaign, the fourth quarter numbers and wrap-up what was a healthy year for this Bay Area submarket as well as look ahead to the 2015 real estate market. The Dow Jones opened at 16,441 and closed the year at 17,823. Tri-Valley weighted average asking rents opened the year at $1.93 full service gross and closed at $2.31 a ten year high. Percentage wise it would have been better to be long Tri-Valley weighted average asking rents than the Dow in your retirement accounts. Rent growth across all sectors of space, Class A Office, Class B Office and office/flex put the healthy in. Tri-Valley total vacancy rate started the year at 11.9 percent and finished at 14.2 percent. This is largely due to Bishop Ranch s marketing of 953,532 square feet at 2600 (2600 Camino Ramon, San Ramon) vacated by the former owner of the building AT&T. Net absorption for all classes of Tri-Valley space this year was negative 669,609 square feet, again, due largely to the marketed footage at 2600. Tri-Valley Class A office saw rents increase from a year-end weighted average asking rent of $2.34 to close at $2.63 full service gross. Vacancy in the sector was at 14.8 percent down from the prior quarters 16.0 percent but up from year-end when vacancy was at 9.9 percent. Absorption for was negative 803,958 square feet. TRI-VALLEY CLASS A HISTORICAL AND AVERAGE ASKING S 18% 16% 14% 12% 10% $2.70 $2.60 $2.50 $2.40 $2.30 Tri-Valley weighted average asking rents opened the year at $1.93 Full Service Gross and closed at $2.31 a ten year high. Rent growth across all sectors of space, Class A Office, Class B Office and Office/Flex put the healthy in. 8% $2.20 *SOURCE: CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT 6% 4% $2.10 $2.00 Vacancy Rate Asking Rate www.colliers.com/pleasanton

RESEARCH & FORECAST REPORT Q4 OFFICE 20 miles to Walnut Creek 40 miles to San Francisco Tri-Valley Class B office fared well in ending the year with weighted average asking rents at $1.84 up $0.18 from year-end. Vacancy was at 10.5 percent, down four full percentage points year to year; while net absorption for was positive 212,436 square feet. Tri-Valley office/flex delivered a mixed bag of statistics with weighted average asking rents (adjusted to full service gross) closing the year at $1.78 up from year-end when the average was $1.57. Vacancy went backwards year to year with vacancy at 15.5 percent versus year-end at 14.3 percent. Absorption this year was negative 78,087 square feet. 30 miles to San Jose Despite global uncertainties, expectations for 2015 are for continued healthy Tri-Valley office market. Pleasanton Class A office enjoyed a good year with weighted average asking rents moving up from $2.27 full service gross in the fourth quarter to close at $2.53; while fourth quarter rents were up just $0.01 from the third quarter. The total vacancy rate closed the year at 13.9 percent down from 16.4 percent at the end of and down from the third quarter s 14.2 percent. The vacancy number drops to 3.07 percent if the marketed vacant footage at Rosewood Commons (approximately 690,000 square feet) is removed from the equation thus highlighting how tight vacancy is in our multitenant Class A product catering to smaller users. Absorption this quarter was positive 20,816 square feet bringing the annual total to a positive 125,741 square feet. Year-to-date net absorption at the close of the second quarter was reported negative 154,069 square feet, demonstrating great progress was made in the second half of. Of note on the leasing front, Workday Inc. expanded their footprint at Pleasanton Corporate Commons to 225,473 square feet in backfilling the Callidus Software Inc. footage (45,799 square feet) in the 6200 Stoneridge Mall building. Callidus Software Inc. departed Pleasanton Corporate Commons for their own expansion in the Oracle sublease at Dublin Corporate Center in Dublin. Class B Pleasanton office finished the year strong posting a quarterly gain in weighted average rents of $0.06 and up year to year $0.34 to close at $2.25. The rent delta between Class A and Class B weighted average asking rents at year-end was $0.36 and that delta today is $0.28 highlighting a continued flight to value two year trend in Class B product, at year-end 2012 that delta was $0.42. The total vacancy rate in the sector closed the fourth quarter at 8.0 percent, up from the prior quarter s 6.3 percent and down from year-end s 10.9 percent. Absorption this quarter was a negative 47,391 square feet due to new vacancy in the market at 4125 Hopyard Road (Britannia Business Center I) which represents ADP s downsizing in the building leaving 32,719 square feet on the market for lease. That said absorption was a positive 80,856 square feet for the year. CLASS A HISTORICAL AND AVERAGE ASKING S 20% 18% 16% 14% 12% $2.60 $2.50 $2.40 $2.30 $2.20 Pleasanton Class A office enjoyed a good year with weighted average asking rents moving up from $2.27 full service gross in the fourth quarter to close at $2.53; while fourth quarter rents were up just $0.01 from the third quarter. 10% $2.10 8% $2.00 Vacancy Rate Asking Rate Pleasanton office/flex weighted average asking rents closed the year at $1.92 (adjusted to full service gross) up $0.03 the prior quarter and up $0.23 year to year. Vacancy at year-end was at 14.0 percent down from 15.3 percent in the third quarter and down on the year 2.3 percent. Absorption this quarter was positive 46,195 square feet due largely to Shaklee Corporation s leasing 16,194 square feet at 6920 P. 2 COLLIERS INTERNATIONAL -

RESEARCH & FORECAST REPORT Q4 OFFICE Koll Center Parkway (North Creek II) and TriReme Medical Inc. s lease at 7060 Koll Center Parkway (North Creek I) for 15,511 square feet. Pleasanton office/flex net absorption this year was positive 88,070 square feet. The office/flex sector posted two fourth quarter sales transactions. On the investment front, PSAI Realty Partners purchased the two building portfolio Britannia Business Center II (5700 and 5720 Stoneridge Drive) comprised of a total of 135,210 square feet of leased office/flex space in this CAP rate driven deal from MIG Real Estate. Tenants in the two building project include IntegenX Inc., Robert Half, Pacific Office Automation, OMRON and PureRED. On the user front, ACG Certified Public Accountants purchased 5020 Franklin Drive from Chabot Las Positas Community College District. ACG Group will occupy 17,732 square feet in the 25,071 square foot building with the balance 7,339 square feet on the market for lease. The former Clorox site on Johnson Drive in Pleasanton is currently transforming as Nearon Enterprises is selectively demolishing buildings. The Pleasanton office/flex (R&D) inventory will reduce in size as a result. There is a rumored signed LOI from Costco for the bulk of the site. Weighted Class A average asking rents closed the year at $2.50 full service gross up $0.08 year to year and up $0.14 on the quarter. The total vacancy rate was 9.6 percent in the fourth quarter versus 15.2 percent in the prior quarter. This downward spike in the total vacancy rate was due to Callidus Software s relocation from Pleasanton Corporate Commons. Callidus Software took two floor plates of the Oracle sublease at Dublin Corporate Center (74,964 square feet) at 4140 Dublin Boulevard. The total vacancy rate is inclusive of marketed sublease footage and the 9.2 percent reflects the absorption of the Callidus Software deal. Oracle just has the first floor sublease footage remaining (33,680 square feet) on the market in the building to complete their sublet of 108,000 total square feet. Total absorption this quarter was a positive 82,656 square feet inching out positive absorption gains for the year of 925 square feet. Class B Dublin weighted average asking rents closed the year at $1.84 full service gross up $0.06 on the quarter and $0.27 on the year. The total vacancy rate stands at 24.9 percent and absorption on the year 66,766 square feet. This absorption represents nearly 22 percent of the total inventory (304,664 square feet) of this product type in Dublin. Dublin Class B is benefitting from a tight and relatively expensive Pleasanton Class B marketplace. The Dublin office/flex sector weighted average asking rents at the end of the fourth quarter were $1.93 (adjusted to full service gross) up on the year $0.47 and up $0.27 from the third quarter s $1.98. The total vacancy rate stands at 19.1 percent up from 16.9 percent in the third quarter and up from year-end s 11.8 percent total vacancy rate. Absorption for the quarter was negative 18,570 square feet and negative 63,432 square feet, thus the upswing in the vacancy numbers. The Livermore office and flex market was relatively quiet in the fourth quarter of, with a total net positive absorption of 16,468 square feet. Livermore s vacancy rate drifted down to 16.9 percent, which is still the highest vacancy in the Tri-Valley region for office and flex product. Approximately one-half of the vacant office space (172,280 square feet) is located in the Vineyard Office Park, which is a converted factory outlet mall at the southwest corner of Greenville Road and Southfront Road in east Livermore. The floor plates there are relatively large and deep, given their original purpose design. Sunset Office Park on Holmes Avenue in west Livermore continues to process their application to convert to residential, which is absorbing any small office space less than 1,500 square feet throughout the city. While there are applications to develop residential, industrial, and retail in the city, there are none for office or flex. One of the most active office users headquartered in Livermore currently is ProctorU, an online testing proctor company, which leased an additional 8,612 square feet in North Canyons Business Center in the Tri-Valley Tech Park. They now occupy their entire building, consisting of approximately 20,000 square feet. SIGNIFICANT DEALS SALE ACTIVITY PROPERTY ADDRESS SALE DATE SQUARE FEET BUYER TYPE 5700-5720 Stoneridge Drive Oct-14 135,210 F BBC LLC Office/Flex 5020 Franklin Drive Dec-14 25,071 Chabot Las Positas Community College District Office/Flex LEASE ACTIVITY PROPERTY ADDRESS LEASE DATE SQUARE FEET TENANT TYPE 6200-6230 Stoneridge Mall Road Oct-14 225,473 Workday Inc*¹ Class A 4140 Dublin Boulevard Oct-15 74,964 Callidus Software Inc Class A 2633 Camino Ramon Nov-14 45,351 GE Software Class A 6920 Koll Center Parkway Oct-14 16,194 Shaklee Corporation Office/Flex 7060 Koll Center Parkway Oct-14 15,511 TriReme Medical Inc Office/Flex 3130 Crow Canyon Place Dec-14 14,695 BWC Mortgage Services Class A 5601 Arnold Drive Oct-14 13,455 Therapeutic Pathways Inc Class A 5050 Hopyard Road Oct-15 12,825 MRC Smart Technology Solutions Class A 2301 Armstrong Street Dec-14 10,065 Exclusive Fabrics Furniture LLC Class B * Renewal ¹ Expansion COLLIERS INTERNATIONAL - P. 3

RESEARCH & FORECAST REPORT Q4 OFFICE MARKET COMPARISONS OFFICE MARKET TYPE BLDGS INVENTORY DIRECT VACANT DIRECT SUBLEASE VACANT SUBLEASE VACANT PRIOR QUARTER CURRENT OCCUPIED SPACE NET CURRENT QTR NET YTD GROSS YTD COMPLETIONS CURRENT QTR UNDER CONST WEIGHTED AVG ASKING FSG A 9 1,488,260 109,932 7.4% 33,680 2.3% 143,612 9.6% 15.2% 1,344,648 82,656 925 97,978 - - $ 2.50 B 11 304,664 67,510 22.2% 3,518 1.2% 71,028 23.3% 24.9% 233,636 4,971 66,766 54,003 - - $ 1.84 Flex 24 869,016 108,460 12.5% 57,232 6.6% 165,692 19.1% 16.9% 703,324 (18,570) (63,432) 55,150 - - $ 1.93 Total 44 2,661,940 285,902 10.7% 94,430 3.5% 380,332 14.3% 16.9% 2,281,608 69,057 4,259 207,131 - - $ 2.13 B 23 833,964 177,105 21.2% - 0.0% 177,105 21.2% 22.4% 656,859 10,065 37,836 41,743 - - $ 1.31 Flex 70 2,043,065 196,806 9.6% 112,000 5.5% 308,806 15.1% 15.4% 1,734,259 6,403 (43,409) 125,769 - - $ 1.35 Total 93 2,877,029 373,911 13.0% 112,000 3.9% 485,911 16.9% 17.5% 2,391,118 16,468 (5,573) 167,512 - - $ 1.33 A 49 6,373,742 886,768 13.9% - 0.0% 886,768 13.9% 14.2% 5,486,974 20,816 125,741 381,586 - - $ 2.53 B 69 2,848,223 223,357 7.8% 3,457 0.1% 226,814 8.0% 6.3% 2,621,409 (47,391) 80,856 414,181 - - $ 2.25 Flex 97 3,502,196 484,254 13.8% 5,740 0.2% 489,994 14.0% 15.3% 3,012,202 46,195 88,070 254,182 - - $ 1.92 Total 215 12,724,161 1,594,379 12.5% 9,197 0.1% 1,603,576 12.6% 12.8% 11,120,585 19,620 294,667 1,049,949 - - $ 2.31 A 31 7,664,037 1,260,601 16.4% 6,714 0.1% 1,267,315 16.5% 17.6% 6,396,722 81,218 (930,624) 299,148 - - $ 2.72 B 26 1,011,228 50,509 5.0% 680 0.1% 51,189 5.1% 6.4% 960,039 13,992 26,978 57,595 - - $ 1.84 Flex 9 705,668 136,702 19.4% - 0.0% 136,702 19.4% 19.4% 568,966 70 (59,316) 2,320 - - $ 1.77 Total 66 9,380,933 1,447,812 15.4% 7,394 0.1% 1,455,206 15.5% 16.5% 7,925,727 95,280 (962,962) 359,063 - - $ 2.60 MARKET A 89 15,526,039 2,257,301 14.5% 40,394 0.3% 2,297,695 14.8% 16.0% 13,228,344 184,690 (803,958) 778,712 - - $ 2.63 B 129 4,998,079 518,481 10.4% 7,655 0.2% 526,136 10.5% 10.2% 4,471,943 (18,363) 212,436 567,522 - - $ 1.84 Flex 200 7,119,945 926,222 13.0% 174,972 2.5% 1,101,194 15.5% 15.9% 6,018,751 34,098 (78,087) 437,421 - - $ 1.78 Total 418 27,644,063 3,702,004 13.4% 223,021 0.8% 3,925,025 14.2% 14.9% 23,719,038 200,425 (669,609) 1,783,655 - - $ 2.31 QUARTERLY COMPARISON AND S Q4-14 418 27,644,063 3,702,004 13.4% 223,021 0.8% 3,925,025 14.2% 14.9% 23,719,038 200,425 (669,609) 1,783,655 - - $ 2.31 Q3-14 418 27,644,063 3,819,921 13.8% 305,529 1.1% 4,125,450 14.9% 12.5% 23,518,613 (661,197) (870,034) 1,320,213 - - $ 2.29 Q2-14 422 27,748,942 3,268,458 11.8% 195,795 0.7% 3,464,253 12.5% 12.8% 24,284,689 90,516 (208,837) 694,306 - - $ 2.06 Q1-14 422 27,748,942 3,376,682 12.2% 178,087 0.6% 3,554,769 12.8% 11.8% 24,194,173 (299,353) (299,353) 196,439 - - $ 1.97 Q4-13 422 27,503,121 3,084,899 11.2% 170,517 0.6% 3,255,416 11.8% 10.5% 24,247,705 (287,024) (153,649) 1,340,261 - - $ 1.92 Q3-13 422 27,421,359 2,691,130 9.8% 195,500 0.7% 2,886,630 10.5% 10.7% 24,534,729 40,697 133,375 1,038,135 - - $ 1.87 *Note: The weighted average asking rates for office/flex is converted to a full service equivalent CORPO COMMONS Workday Inc. expanded their footprint to 225,473 square feet, backfilling Callidus Software Inc. s 45,799 square feet space at 6200 Stoneridge Mall Road. P. 4 COLLIERS INTERNATIONAL -

RESEARCH & FORECAST REPORT Q4 OFFICE Class A weighted average asking rents are $2.72 compared to $2.53 at year-end and up minimally $0.01 quarter to quarter. The total vacancy rate closed the year at 16.5 percent versus year-end when the total vacancy rate was a paltry 4.7 percent. Chalk this large move up to the release of 953,532 square feet of newly marketed Class A square footage at 2600 Camino Ramon that hit the market late summer of. That space was vacated by AT&T at their former user owned regional headquarters building. Sunset Development will look for larger users from 200,000 square feet and up to erode that vacancy in 2015 and beyond. Net absorption this quarter was 81,218 square feet but remained negative for the year at 930,624 square feet as a result of the new vacancy at 2600. GE Software took another 45,351 square feet at 2633 Camino Ramon (Bishop Ranch 3) in the fourth quarter of increasing their footprint in that project to 279,025 square feet. Class B weighted average asking rents wrapped up the year at $1.84 full service gross flat from the third quarter but up this year $0.07. The total vacancy rate is 5.1 percent, down from the third quarters 6.4 percent and down on the year 2.4 percentage points. Absorption this quarter was positive 13,992 square feet comprising over half of the years total positive absorption of 26,978 square feet. The San Ramon office/flex sector finished with weighted average asking rents (adjusted to full service gross) at $1.77 flat from the prior quarter but up from a $1.45 year to year. Absorption for the year was a negative 59,316 square feet in a sumarket totaling 705,668 square feet. LOOKING FORWARD The robust rent growth we have seen over that last forty-eight months in weighted average rents would not seem sustainable in 2015 without migration of a large user or users into the Tri-Valley. Those hopeful Tri-Valley Class A office settlers seeking large blocks of space will consider 626,999 square feet available at Rosewood Commons in Pleasanton or 953,532 square feet at 2600 in Bishop Ranch (San Ramon). Hypothetical comps from a potential deal could see rents of $3.00 full service gross and be the impetus to continue to drive rents in the market. Our current tenant base continues to erode available footage within the market. GE Software continues to expand at Bishop Ranch 3 and Workday Inc. is out in Pleasanton for 50,000 to 150,000 square feet of near term expansion space. Additionally, Safeway Inc. could depart all or some of their 800,000 plus square feet in the coming months/years, which would certainly weigh-in negatively. Current rumors suggest that their plans are to significantly reduce their footprint in the market. Despite global uncertainties, expectations for 2015 are for a continued healthy Tri-Valley office market. Large users entering the market could bring further growth but without their presence we could predict a flatting curve of the weighted average asking rents. With the low vacancy in multi-tenant office and office/flex projects we could also see many investment sales and profit taking from savvy investors who purchased in the last down cycle. 485 offices in 63 countries on 6 continents United States: 146 Canada: 44 Latin America: 25 Asia Pacific: 186 EMEA: 84 > $2.1 billion in annual revenue > $1.46 billion square feet under management > Over 15,800 professionals OFFICE: 3825 Hopyard Rd. Suite 195 Pleasanton, CA 94588 United States TEL +1 925 463 2300 FAX +1 925 463 0747 EXECUTIVE MANAGING DIRECTOR: Marshall Snover TEL +1 925 227 6205 marshall.snover@colliers.com CA License No.00882591 RESEARCH: Lisa Kohler Research Analyst II TEL +1 925 227 6236 lisa.kohler@colliers.com CONTRIBUTING AUTHOR Jason Chandler, VP TEL +1 925 227 6224 jason.chandler@colliers.com CA License No. 01394441 CONTRIBUTING AUTHOR (Livermore) Mark Triska, SIOR, SVP TEL +1 925 227 6210 mark.triska@colliers.com CA License No. 01012779 This report and other research materials may be found on our website at www.colliers.com. This quarterly report is a research document of Colliers International - Pleasanton, CA. Questions related to information herein should be directed to the Research Department at +1 925 227 6236. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers International. Accelerating success. www.colliers.com/pleasanton COLLIERS INTERNATIONAL - - STOCKTON P. 5