Six Consecutive Quarters Of Positive Absorption As Asking Rents Increase

OFFICE GREATER LOS ANGELES BASIN MARKET REPORT Six Consecutive Quarters Of Positive Absorption As Asking Rents Increase EXECUTIVE SUMMARY MARKET INDICATORS - VACANCY 15.3% NET ABSORPTION +789,2 CONSTRUCTION 4,35, RENTAL RATE $2.62 P UNEMPLOYMENT 6.4% In third quarter 215, the Greater Los Angeles Basin office market recorded positive net absorption of 789,2 square feet (). The total vacancy rate decreased to 15.3% from 15.5% last quarter. Weighted average asking rental rates increased to $2.62 per square foot (P), per month Full Service Gross (FSG). Leasing activity recorded at 5,95,. There is currently 4,35, of office space currently under construction/ renovation, the majority of which is in LA County. LOS ANGELES COUNTY SUMMARY August 215 figures for nonfarm employment in Los Angeles County showed a recovering job market. Over the past 12 months, Los Angeles County has gained 76,3 jobs for an increase of 1.8%. This gain in employment led to the unemployment lowering to 6.9% compared to 8.1% one year ago. In third quarter 215, the Los Angeles County office market recorded flat activity, recording just -9,8 of net absorption, resulting in vacancy remaining unchanged at 16.3%. Weighted average asking rental rates increased to $2.82 P FSG. BASIN WIDE MARKET TRENDS - >> Total vacancy rate decreases to 15.3% >> Weighted average asking rental rate increases to $2.62 P >> Leasing activity at 5,95,1 >> There was positive absorption of 789,2 $ P PER MONTH (WEIGHTED) HISTORICAL VACANCY VS RENTS Q3 211 - RENTS VACANCY $2.7 $2.6 $2.5 $2.4 $2.3 $2.2 $2.1 25.% 2.% 15.% 1.% 5.% HISTORICAL NET ABSORPTION & CONSTRUCTION COMPLETIONS - Q3 211-2,5, 2,, 1,5, 1,, 5, (5,) NET ABSORPTION CONSTRUCTION COMPLETIONS >> Construction activity at 4,35, $2. 3Q11 3Q12 3Q13 3Q14 3Q15.% (1,,) 3Q11 3Q12 3Q13 3Q14 3Q15 1 Colliers International continuously refines its database. As a result, data reflected in this report may not be consistent with data reported in previous quarters. www.colliers.com/losangeles

MARKET REPORT OFFICE GREATER LOS ANGELES BASIN VENTURA Simi Valley Thousand Oaks Oxnard N 5 11 45 1 Santa Monica LOS ANGELES BASIN DEMOGRAPHICS >> POPULATION: 18,577,818 (215 Estimate) 19,348,242 (22 Projection) 4.15% (Growth 215-22) >> HOUSEHOLD INCOME: $8,493 (Average) $57,862 (Median) >> JOB GROWTH: 3.3% (past 12 months) >> UNEMPLOYMENT RATE: 6.4% (as of August 215) 5 LOS ANGELES COUNTY Burbank Lancaster Palmdale Wrightwood Pomona 1 1 Whittier 15 Los Angeles 5 Anaheim 395 Riv 45 Santa Ana Long Beach ORANGE 1 COUNTY Newport Beach Mission Viejo Laguna Beach Dana Point The Central Los Angeles office market saw decreased demand through the third quarter 215 with net absorption recording at -112,3 from 2, the previous quarter. The total vacancy rate subsequently increased 9 basis points to 19.8% from 18.9% one quarter ago. Hollywood s development pipeline currently has 1.2 million of office space under construction, which is approximately 29% of all new construction in Los Angeles Basin. The Downtown Los Angeles market continued the year in third quarter 215 with its highest leasing activity in recent memory with 856,2 on the strength of major renewals within the market. The leasing highlights included Capital Group renewing 16,4 at 4 S. Hope St., GSA renewing 94,4 at 725 S. Figueroa St., and Pillsbury Winthrop renewing 61, at 725 S. Figueroa St. Total overall vacancy rate decreased to 18.1% from 18.3% in the previous quarter. Rental rates slightly decreased to $3.14 P. Net absorption recorded at -349,9 in the third quarter, a turnaround from last quarter s 637,4 and the first time demand has been negative since fourth quarter 212. Santa Monica bore the brunt of negative demand with -447,8. Total vacancy rate increased to 12.9%, and direct weighted average gross asking rents jumped to $4. P FSG. The market registered the highest P price for an office building in the Greater Los Angeles region as Cain Hoy Enterprises acquired 1 N. Crescent Dr. in Beverly Hills from Clarion Partners for $13M, or $1,98 P. The 118,4 building was 97% leased at time of sale. V & VENTURA COUNTY The San Fernando Valley and Ventura County office market saw total vacancy increase to 15.6% from 15.2% recorded one quarter ago. This is first quarter to record an increase in vacancy after nine consecutive quarters of decreasing rates. Direct weighted average asking rents stayed the same at $2.18 P FSG. New leasing activity recorded at 479,1 compared to 631,1 in second quarter 215. VACANCY BY MARKET NET ABSORPTION BY MARKET % VACANT 26% 24% 22% 2% 18% 16% 14% 12% 1% 8% 6% 4% 2% % SUBLEASE VACANCY DIRECT VACANCY.2%.2%.%.5%.7%.7%.9% 17.9% 14.8% 16.1% 14.5% 14.9% 11.8% 12.%.1% 19.7%.2% 21.3% 8, 6, 4, 2, (2,) (4,) (349,9) (124,) (112,3) (7,9) 11,2 68,4 254,6 261,3 688,8 V & VENTURA CO. (6,) V & VENTURA CO P. 2 COLLIERS INTERNATIONAL

MARKET REPORT OFFICE GREATER LOS ANGELES BASIN OFFICE OVERVIEW EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION CONSTRUCTION RENTS Submarket/ Class Bldgs Total Inventory Direct Sublease Total Total 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 A 86 159,628,961 14.%.8% 14.7% 14.9% 3,459,8 11,178,1 1,1 1,478,1 9,2 3,291,2 $3.15 B 1,837 124,41,95 15.7%.3% 16.% 16.6% 2,243, 7,88,7 634,3 961,6 141,2 1,14, $2.6 C 44 18,183,81 15.6%.4% 16.% 16.9% 247,2 1,453,8 144,7 263,7 $1.57 SUBTOTAL 16 13,384,3 19.7%.1% 19.8% 18.9% 476,6 759,1 (112,3) (68,1) 1,242,6 $2.17 SUBTOTAL 72 32,258,5 17.9%.2% 18.1% 18.3% 856,2 2,521,2 68,4 165,4 1,42,9 $3.14 SUBTOTAL 429 55,992,5 12.%.9% 12.9% 12.3% 1,124,1 3,71,6 (349,9) 372,3 36,4 972,7 $4. SUBTOTAL 199 23,649,2 14.5%.5% 14.9% 16.1% 479,5 1,98,4 254,6 827,66 141,2 113,8 $2.79 SAN FERNANDO VALLEY & VENTURA COUNTY SUBTOTAL 422 33,616,614 14.9%.7% 15.6% 15.2% 479,1 1,738,7 (124,) 85,1 12,933 $2.18 SUBTOTAL 275 3,552,7 21.3%.2% 21.4% 22.2% 461,4 1,521,3 261,3 (9,8) 53,8 314,7 $2.26 SUBTOTAL 158 1,342,1 14.8%.% 14.8% 14.5% 8,9 363, (7,9) 98,5 $2.11 LOS ANGELES COUNTY SUBTOTAL 1,661 199,795,914 15.8%.5% 16.3% 16.3% 3,957,8 12,513,3 (9,8) 1,471,6 231,4 3,87,633 $2.82 SUBTOTAL 1,16 81,637,47 11.8%.7% 12.6% 13.5% 1,752,5 6,457,5 688,8 1,85,6 497,387 $2.26 SUBTOTAL 423 2,421,424 16.1%.2% 16.3% 16.8% 239,7 749,8 11,2 145,4 $1.69 GREATER LOS ANGELES BASIN MARKET TOTAL TOTAL 3,1 31,854,385 14.8%.5% 15.3% 15.5% 5,95, 19,72,6 789,2 2,72,6 231,4 4,35,2 $2.62 COLLIERS INTERNATIONAL P. 3

MARKET REPORT OFFICE GREATER LOS ANGELES BASIN >> Orange County dominated absorption recording +688,8 for the quarter >> Construction activity remains strong at 4,35,2 >> The direct weighted average asking rental rate increased to $2.62; rents have been rising for the past 13 quarters. The South Bay office market saw total vacancy decrease during the third quarter by 8 basis points to 2.5% from 21.3% last quarter. Direct weighted average asking rents increased to $2.24 P, per month FSG from $2.2 P FSG last quarter. Demand for space was positive with 295, of net absorption, while leasing activity dropped from last quarter s 4-year high to a still-robust 493,1. The El Segundo submarket led all submarkets in both demand and leasing activity as tenants continue to flock to the increasingly tech-rich area in search of Silicon Beach-comparable space at a discount. The total vacancy rate for the San Gabriel Valley office market increased 3 basis points to 14.8% in third quarter 215. Absorption recorded at -7,9 as move-ins resulting from four strong quarters of leasing activity failed to offset moveouts in the market. Despite negative office demand, the average asking rental rate for the region still rose to $2.11 P FSG from $2.9 P FSG a quarter ago. This surpasses last quarter s 5-year high rate, but still lags significantly behind the market s peak of $2.37 P FSG in 27. The Tri-Cities office market recorded 254,6 of positive absorption as the total vacancy rate decreased to 14.9% compared to 16.1% one quarter ago. Pasadena recorded 181,4 of positive demand, accounting for the majority of absorption this quarter. Direct weighted average asking rents increased slightly to $2.79 per P, FSG compared to $2.78 P FSG last quarter. New leasing activity included Worley Parsons renewing for 63, at 125 W. Huntington Dr. in Arcadia, Point.36 subleasing 37,9 at 23 Empire Ave in Burbank and Mt. Sierra College agreeing to relocate to 27, at 8 E Royal Oaks Dr. in Monrovia. The OC office market continued a positive stride into third quarter. Total vacancy decreased 9 basis points to 12.6% from the previous quarter s rate of 13.5%. Total net absorption remained positive for the sixth consecutive quarter recording at 688,8. As market conditions continue to strive forward and vacancy rates decline, overall direct weighted average asking rental rates increased to $2.26 P FSG marking a 15% increase from the start of 214. OC witnessed a flurry of sales activity as investors continue to take advantage of low interest rates. WEIGHTED AVERAGE ASKING LEASE RATES BY MARKET LEASING ACTIVITY BY MARKET $4.5 $ P PER MONTH (FSG) $4. $3.5 $3. $2.5 $2. $1.5 $1.69 $2.17 $2.26 $2.26 $2.11 $2.16 $2.63 $3.14 $4. 2,, 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 461,4 479,1 479,5 759,1 856,2 749,8 1,124,1 1,752,5 $1. 4, 363, V & VENTURA COUNTY 2, V & VENTURA CO. INLAND EMPRIRE CENTRAL LOS ANGELES DOWNTOWN LOS ANGELES P. 4 COLLIERS INTERNATIONAL

MARKET REPORT OFFICE GREATER LOS ANGELES BASIN Total vacancy rate for the Inland Empire office market decreased 5 basis points from 16.8% last quarter to 16.3%. This is down 21 basis points from vacancy rates reported a year ago. Net absorption for the third quarter was 11,2 compared to -175,2 one quarter ago. Leasing activity continues to record above the three year historical average (23, ) recording at 239,7 for third quarter. The average asking rental rate in the Inland Empire office market has been relatively flat over the past two years, fluctuating only $.2 up or down over each quarter recording at $1.69 P FSG. MARKET DESCRIPTION The Los Angeles Basin office market is comprised of 31.9 million of multi-tenant office space in buildings 25, or larger. It ranks as the third largest office market in the nation, following New York City and the Greater Washington DC area. Most of its space, 55%, was built in or after 1985, making it a relatively young market. It is also relatively decentralized, with only 11% of the space located within Downtown Los Angeles and 89% dispersed throughout the region. 4% of the space is in low-rise buildings, followed by 31% in mid-rise buildings and 29% in high-rise structures. HISTORICAL LEASING ACTIVITY Q3 211 - UNEMPLOYMENT RATE United States, California & Los Angeles Basin August 215 7,, 6,, 7.% 6.% 5.% 5.2% 6.1% 6.4% 5,, 4.% 4,, 3.% 3,, 2.% 2,, 1.% 1,, 3Q11 3Q12 3Q13 3Q14 3Q15.% United States California Los Angeles Basin RECENT TRANSACTIONS & MAJOR DEVELOPMENTS SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 523 W. 6th St., Los Angeles 446, $2,, $448 P Ivanhoe Cambridge/Callahan Capital Rising Realty Parnters 1 N Crescent Dr., Beverly Hills 118,4 $13,, $1,98 P Cain Hoy Enterprises Clarion Partners Quintana Portfolio, Irvine 427,746 $121,5, $284/P Hines Menlo Equities 1 World Trade Ctr., Long Beach 575, $15,85, $184 P Greenlaw Part./Walton Street Cap. SteelWave, Inc. 123-4 Rosecrans Ave., Manhattan Beach (2 Bldgs.) 311,5 $91,5, $294 P Onni Group CW Capital Asset Management LLC LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR Alton Corporate Center/Irvine Oaks, Irvine 435, Renewal B Blizzard Entertainment Irvine Company/Olen Properties 588 W. Sunset Blvd., Hollywood 2,5 Direct-New A NetFlix Hudson Pacific Properties 4 S. Hope St., Los Angeles 16,4 Renewal A The Capital Group CBRE Global Investors 725 S. Figueroa St., Los Angeles 94,4 Renewal A GSA Brookfield Office Properties 555 W. 5th St., Los Angeles 92,4 New A WeWork Brookfield Office Properties MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE MARKET STATUS ESTIMATED COMPLETION The Brickyard (2 bldgs) Tishman Speyer 494,4 Marina Del Rey/Venice Under Construction Q4 216 Columbia Square (5 bldgs) Kilroy Realty 461,14 Hollywood Under Construction Q4 215 2 Spectrum Center, Irvine The Irvine Company 425,44 South County Under Construction 2Q 216 Icon at Sunset Bronson Studios (2 bldgs) Hudson Pacific Properties, Inc 45, Hollywood Under Construction Q4 216 COLLIERS INTERNATIONAL P. 5

MARKET REPORT OFFICE GREATER LOS ANGELES BASIN DEFINITIONS OF KEY TERMS USED IN THIS REPORT Total Rentable Square Feet: Office space in buildings with 25, or more of speculative office space. Includes competitive space in Class A, B and C singletenant and multi-tenant buildings. Excludes non-competitive owner-occupied buildings, buildings that include 3% or greater of medical or retail space, and space that is underconstruction, under-renovation or off-market. 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. 52 offices in 67 countries on 6 continents United States: 14 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 18 >> $2.3 billion in annual revenue >> 1.7 billion square feet under management >> Over 16,2 professionals 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. 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): 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. 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. UNITED STATES: Los Angeles Headquarters Office License No. 198231 865 S. Figueroa Street, Suite 35 Los Angeles, CA 917 TEL +1 213 627 1214 FAX +1 213 327 32 CAUDILL, ROBERT Regional Director/Orange County PUPIL, MARTIN President, West Region HOLLINGSWORTH, JOHN Executive Managing Director MUMPER, HANS Executive Managing Director RESEARCH ANALYSTS MATTESON, CAITLIN Research Director Research Services GALVIN, THOMAS R. Regional Analyst Research Services WONG, CHRISTOPHER Regional Analyst Research Services 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). Total : 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. 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/losangeles. Accelerating success. P. 6 COLLIERS INTERNATIONAL www.colliers.com/marketname