>> Orange County Rents Increase to Start 2017

Research & Forecast Report ORANGE COUNTY OFFICE Accelerating success. >> Orange County Rents Increase to Start 2017 Key Takeaways > The Orange County office market saw positive demand for the first part of the year. For the quarter, absorption totaled positive 154,200 square feet (). > Asking rental rates rose by 9.1% year-over-year to start 2017 at $2.62 per square foot (P) full service gross (FSG). > Due to an increase in absorption, overall vacancy fell to 11.9%. The market still exhibited momentum, as vacancy decreased by 120 basis points from one year ago. > Leasing activity jumped from fourth quarter recording 2.2 million. This level of leasing activity was last seen at the end of 2014. > The overall economy continued to see solid growth in fourth quarter. The Orange County unemployment rate has declined from 4.1% to 3.7% year-over-year. Orange County Office Market The Orange County office market stared 2017 on a positive note as net absorption recorded positive 154,200. decreased to 11.9% dropping 10 basis points from last quarter. The additional new inventory planning to come online in 2017, provides opportunities for tenants seeking large blocks of Class A traditional and creative office space. As overall space options have become limited with vacancy declining and new construction coming online, asking rental rates have increased by 9.1% from one year ago. The Orange County office market will continue to be a target area for professional service tenants who are looking for space alternatives outside of Los Angeles and San Diego counties. Market Indicators Relative to prior period Class A Class B All Classes Average Asking Rent $3.06 $2.37 $2.62 Change from Q4 16 ($) $0.12 $0.07 $0.09 Y.O.Y. Change (%) 10.9% 6.8% 9.1% 12-mo Employment Growth (%) 12-mo Actual Employment Change Nonfarm Prof. & Business Services Forecast Net Absorption Construction Rental Rate Summary Statistics Orange County, Asking Rents Orange County, Orange County Labor Force Class A Class B All Classes Rate 13.1% 11.2% 11.9% Change from Q4 16 (Basis Points) +30-20 -10 Net Absorption* 111.5-11.6 154.2 Construction Completions* 211.2 0 211.2 Under Construction* 1,402.2 0 1,402.2 *, Thousands Financial Activities 1.1% 2.6% -0.78% 17,000 7,700 900

> Overall vacancy continued a downward trend recording at 11.9%. This was a 10 point basis decrease from one quarter ago, due mainly to new deals signed in the 20,000-60,000 range. > Tenants looking for spaces greater than 100,000 have more options given the new office space that will be delivering in 2017. > South County supplanted West County with the tightest vacancy of all the Orange County submarkets at 8.7%, a 50 basis point decrease from last quarter. > FORECAST: Orange County office market vacancy is expected to trend downward until it levels in mid-2017 as new supply is delivered. Absorption and Leasing Activity > Net absorption remained positive for the 12th consecutive quarter recording 154,200 during first quarter. The Airport submarket recorded the highest negative demand (-125,200 ), followed by West County (-5,800 ). South County recorded the highest positive absorption at 250,000. > Large tenant move-ins during the first quarter include Nationastar Mortgage Holdings to 1600 E Saint Andrew Pl. (152,800 ), Blizzard Entertainment at 15253 Bake Pky. (65,000 ) and Crown Castle USA, Inc. at 200 Spectrum Center Dr. (44,200 ). These move-ins helped the South and Central County submarkets offset negative absorption in the rest of Orange County. > Leasing activity volume started 2017 on a high note recording 2.2 million, which was last recorded at this level end of 2014. > FORECAST: Absorption is expected to flatten in mid-2017 as new inventory will be delivered to the market and tenants continue to rightsize their existing space. Historical v. Rents O.C. Office Market Q1 13-17 $ P PER MONTH (FSG) RENTS VACANCY $2.70 18% $2.60 16% $2.50 14% $2.40 12% $2.30 10% $2.20 8% $2.10 6% $2.00 4% $1.90 2% $1.80 0% 1Q13 1Q14 1Q15 1Q16 1Q17 Net Absorption by Submarket O.C. Office Market Q1 17 SQUARE FEET 300,000 200,000 100,000 0 (100,000) (200,000) 250,600 34,100 500 (5,800) (125,200) AIRPORT WEST NORTH CENTRAL SOUTH Historical Leasing Activity O.C. Office Market Q1 13-17 % VACANT (TOTAL) Rental Rates > The direct weighted average asking rental rate in Orange County continued to increase due to new construction coming online along with decreasing vacancy rates. Overall asking rental rates recorded at $2.63 P FSG, a 9.1% increase from one year ago. > Class B rental rates were the driving force behind the increase, recording a $0.07 increase to end at $2.37 P FSG. > FORECAST: Rental rates are expected to increase through 2017 as demand for both Class A & B product remains tight. 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 1Q13 1Q14 1Q15 1Q16 1Q17 2

Construction > Irvine Company completed the Sand Canyon Business Center development, delivering 211,200 to the market. > Currently, there are three office projects under construction totaling 1.4 million. Trammell Crow s development The Boardwalk in Irvine and Irvine Company s 400 Spectrum Center in Irvine Spectrum are both expected to be completed by third quarter 2017. The Broadcom Campus is expected to be completed in 2018. > FORECAST: New construction inventory is expected to grow throughout 2017. Irvine Company s The Quad at Discovery Business Center is expected to break ground soon which includes 4 office buildings totaling 317,000. As creative office space demand continues, the former LA Times facility in Costa Mesa is expected redeveloped into creative space. Investment Trends > Investment activity for properties over 25,000 started 2017 slow as sales volume recorded $131.0 million, a 65% drop from one year ago. > Investors are expected to remain stable in the Orange County market, targeting not only Class A trophy buildings, but also value-add creative space redevelopment opportunities. > Office building sales averaged $290 P with the two largest transactions being: Pinnacle Asset Management Group purchasing the Towne Centre Plaza for $267 P and Pendulum purchasing 5 Peters Canyon Rd. in Irvine for $266 P. > FORECAST: Investment activity is expected to remain stable moving into 2017. Outlook The Orange County office market should continue to see positive returns through 2017 as vacancy continues to decrease and absorption remains positive, albeit at a more measured pace than 2016. Along with the new Class A trophy building construction and creative office redevelopment the market supply will continue to grow. Asking rental rates are expected to increase from upward pressure of new construction delivering in 2017. Historical Net Absorption & Construction Completions O.C. Office Market Q1 13-17 SQUARE FEET 1,500,000 1,000,000 500,000 0 (500,000) (1,000,000) NET ABSORPTION 1Q13 1Q14 1Q15 1Q16 1Q17 Investment Trends Chart O.C. Office Market 2010-2017 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00 CONSTRUCTION COMPLETIONS Unemployment Rate U.S., C.A. & O.C. February 2017 6% 4% 2010 2011 2012 2013 2014 2015 2016 2017 4.9% $/P 5.2% Cap Rate 3.7% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2% 0% UNITED STATES CALIFORNIA ORANGE COUNTY 3

Market Description Orange County is a moderately large suburban office market comprised of 83 million square feet and represents 29% of the total inventory in office buildings 25,000 square feet and greater in the Los Angeles basin. Orange County is a relatively new and moderate-density market with 41% of the space in Class A buildings. Orange County is home to a broad mix of firms, including significant representation from the finance, insurance, telecommunications, high-tech, real estate, engineering and professional-service sectors. Submarket Map RECENT TRANSACTIONS & MAJOR DEVELOPMENTS Orange County Office Market SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 26632 Towne Centre Dr, Foothill Ranch (3 Bldgs) 67,900 $40,000,000 $195 P Pinnacle Asset Management Group Blackstone 5 Peters Canyon Rd, Irvine 156,500 $41,675,000 $266 P Pendulum TA Realty 4 Polaris Way, Aliso Viejo 90,600 $34,750,000 $383 P Invesco Real Estate Quest Software Inc. 19762 MacArthur Blvd, Irvine (4 Bldgs) 105,295 $27,000,000 $256 P Kelemen Caamano Investments CIP Real Estate Property 14725 Alton Pky, Irvine 59,000 $15,300,000 $260 P Chapman University Greenlaw Partners LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG CLASS LESSEE LESSOR 3333 Susan St, Costa Mesa 101,800 Direct A The Los Angeles Chargers Steelwave 5241/5231 California Ave, Irvine 92,100 Direct B Toshiba America The Irvine Company 15253 Bake Pky, Irvine 65,000 Direct B Blizzard Entertainment CTA, LP 3100 Lake Center Dr, Santa Ana 60,500 Direct A Orange County Transportation CJ Sergerstrom & Son 2600 Michelson Dr, Irvine 60,000 Direct A Jacobs Engineering Dune Real Estate Partners, LP MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION The Boardwalk, Irvine Trammell Crow 537,200 Airport Area Under Construction 3Q 2017 Broadcom Corporate Campus DPR Construction, 440,000 South County Under Construction 1Q 2018 400 Spectrum Center, Irvine The Irvine Company 425,000 South County Under Construction 3Q 2017 4

OFFICE OVERVIEW Orange County Office Market EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION CONSTRUCTION RENTS Submarket/ Class Bldgs Inventory Direct Sublease 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 AIRPORT A 106 22,310,200 12.8% 0.8% 13.6% 13.5% 727,800 727,800 (34,900) (34,900) 0 537,200 $3.26 B 244 14,624,200 12.1% 0.5% 12.6% 11.9% 536,700 536,700 (102,800) (102,800) 0 0 $2.56 C 59 2,703,000 6.6% 0.0% 6.6% 7.1% 63,400 63,400 12,500 12,500 0 0 $2.09 SUBTOTAL 409 39,637,400 12.1% 0.6% 12.8% 12.4% 1,327,900 1,327,900 (125,200) (125,200) 0 537,200 $2.96 CENTRAL A 29 5,620,900 12.7% 0.5% 13.2% 11.4% 75,300 75,300 (97,500) (97,500) 0 0 $2.32 B 79 6,090,400 16.0% 0.5% 16.5% 18.2% 77,300 77,300 103,100 103,100 0 0 $2.12 C 58 2,281,500 14.5% 0.0% 14.5% 15.8% 33,400 33,400 28,500 28,500 0 0 $1.49 SUBTOTAL 166 13,992,800 14.4% 0.4% 14.8% 15.1% 186,000 186,000 34,100 34,100 0 0 $2.09 NORTH A 14 1,633,700 11.0% 3.9% 14.9% 15.3% 83,400 83,400 6,700 6,700 0 0 $2.23 B 56 4,984,400 10.2% 0.5% 10.7% 10.6% 85,600 85,600 (6,200) (6,200) 0 0 $1.99 C 22 958,500 7.0% 0.0% 7.0% 7.0% 6,600 6,600 0 0 0 0 $1.63 SUBTOTAL 92 7,576,600 10.0% 1.2% 11.1% 11.1% 175,600 175,600 500 500 0 0 $2.01 SOUTH A 23 4,081,091 10.2% 0.2% 10.4% 11.3% 137,600 137,600 224,400 224,400 211,200 865,000 $3.34 B 215 11,728,800 6.6% 0.9% 7.5% 7.6% 328,500 328,500 7,900 7,900 0 0 $2.60 C 15 638,616 21.1% 0.0% 21.1% 24.0% 14,000 14,000 18,300 18,300 0 0 $1.98 SUBTOTAL 253 16,448,507 8.1% 0.7% 8.7% 9.2% 480,100 480,100 250,600 250,600 211,200 865,000 $2.77 WEST A 8 1,029,700 6.3% 0.9% 7.3% 8.5% 13,800 13,800 12,800 12,800 0 0 $2.61 B 54 2,999,300 8.8% 0.0% 8.8% 8.3% 40,000 40,000 (13,600) (13,600) 0 0 $2.07 C 32 1,274,200 11.0% 0.0% 11.0% 10.6% 19,600 19,600 (5,000) (5,000) 0 0 $1.80 SUBTOTAL 94 5,303,200 8.8% 0.2% 9.0% 8.9% 73,400 73,400 (5,800) (5,800) 0 0 $2.06 MARKET TOTAL A 180 34,675,591 12.2% 0.8% 13.1% 12.8% 1,037,900 2,346,200 111,500 111,500 211,200 1,402,200 $3.06 B 648 40,427,100 10.6% 0.6% 11.2% 11.2% 1,068,100 2,452,000 (11,600) (11,600) 0 0 $2.37 C 186 7,855,816 10.8% 0.0% 10.8% 11.7% 137,000 466,400 54,300 54,300 0 0 $1.76 TOTAL 1,014 82,958,507 11.3% 0.6% 11.9% 12.0% 2,243,000 5,264,600 154,200 154,200 211,200 1,402,200 $2.62 Note: revisions to the inventory base were made effective, historical data reported here reflect these revisions and may not match data reported in previous quarters. 5

Definitions of key terms in this report Rentable Square Feet: Office space in buildings with 25,000 square feet or more of speculative office space. Includes competitive space in Class A, B and C single-tenant and multi-tenant buildings. Excludes non-competitive owner-occupied buildings, buildings that include 30 percent or greater of medical or retail space, and space that is under-construction, underrenovation or off-market. 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). : 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. 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. 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): 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: Includes buildings that are in some phase of construction, beginning with foundation work and ending with the issuance of a Certificate of Occupancy 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: Orange County Office License No. 00813140 3 Park Plaza, 12th Floor Irvine, CA 92614 CAITLIN MATTESON Research Director Research Services > $2.6 billion in annual revenue > 2.0 billion square feet under management > Over 15,000 professionals TEL: +1 949 474 0707 FAX: +1 949 724 5600 ROBERT CAUDILL Regional Director/O.C. 6