West Los Angeles Marks Ten Consecutive Quarters Of Positive Market Activity

office market report West Los Angeles Marks Ten Consecutive Quarters Of Positive Market Activity Market overview MARKET indicators - VACANCY 12.9% NET ABSORPTION 84,900 CONSTRUCTION 549,665 RENTAL RATE $3.76 P FSG UNEMPLOYMENT 7.8% The West Los Angeles office market recorded positive absorption of 84,900 square feet () in the first quarter of 2015. Total vacancy decreased 20 basis points to 12.9% from 13.1% in the previous quarter. Direct weighted average gross asking rents continued upward as rents jumped to $3.76 per square foot (P), per month full service gross (FSG). Leasing activity totaled 1,267,543 relative to 1,264,658 in fourth quarter of 2014. Lease transactions continue to be dominated by the tech, media and law firm industries throughout the market. Investment sales activity in the first quarter included the following transactions as investors continue to take advantage of low interest rates and current market conditions: Invesco Real Estate acquired The Reserve at 13031 W. Jefferson Blvd in Playa Vista for $791 P from Shorenstein Properties, IDS Real Estate Group acquired the three building Beats by Dre portfolio in Culver City totaling 127,447 for $847 P from Hackman Capital Partners, Tishman Speyer acquired 520 Broadway in Santa Monica for $805 P from Vornado Realty Trust, Mani Brothers RE Group acquired 12555 Jefferson Blvd. in Playa Vista for $542 P from Ocean West Capital Partners and Westbrook Partners acquired the Ocean Park Plaza at 2701 Ocean Park Blvd. in Santa Monica for $722 P from Broadreach Capital Partners. MARKET trends - >> Total vacancy decreases to 12.9% HISTORICAL VACANCY VS RENTS Q1 2011 - HISTORICAL net absorption & Construction COMPLETIONS - Q1 2011 - >> Weighted average asking rental rate jumped from $3.70 P FSG to $3.76 P FSG >> New leasing activity at 1,267,543 >> There was positive demand with 84,900 net absorption >> Construction activity at 549,665 $ P FSG PER MONTH (WEIGHTED) $4.00 $3.90 $3.80 $3.70 $3.60 $3.50 $3.40 $3.30 $3.20 $3.10 $3.00 RENTS VACANCY 1Q11 1Q12 1Q13 1Q14 1Q15 18% 16% 14% 12% 10% 8% 6% 4% % VACANT (TOTAL) 800,000 600,000 400,000 200,000 0 (200,000) (400,000) (600,000) (800,000) (1,000,000) (1,200,000) NET ABSORPTION CONSTRUCTION COMPLETIONS 1Q11 1Q12 1Q13 1Q14 1Q15 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 los angeles DEMOGRAPHICS >> Population: 10,136,509 (2015 Estimate) 10,510,281 (2020 Projection) 3.69% (Growth 2015-2020) >> Household income: $78,309 (Average) $54,514 (Median >> Job growth: 2.4% (past 12 months) >> Unemployment rate: 7.8% (as of February 2015) vacancy The total vacancy rate decreased to 12.9%. This is a 20 basis point decrease relative to last quarter. Total vacancy rates were the highest in the Marina Del Rey/Venice submarket (23.6%) and lowest in the Olympic Corridor submarket, at a rate of 4.5%. rates were highest for Class A space (13.5%) and lowest for Class C space (5.9%) with Class B space in-between at 10.5%. Compared to the surrounding Los Angeles County submarkets, the West Los Angeles market continues to see tightening market conditions due to the high demand of creative office space from technology, media and entertainment users. net absorption Net absorption recorded at 84,900 in the first quarter, which is relatively flat compared to past quarters. West Los Angeles has recorded positive net absorption every quarter since fourth quarter 2012. The best performing submarkets in fourth quarter were as follows: Beverly Hills (151,500 ), Olympic Corridor (79,600 ), Brentwood (62,900 ), West Hollywood (21,000 ), Miracle Mile (17,500 ) and Culver City (16,200 ). Five submarkets recorded negative absorption: Century City (-128,000 ), Marina Del Rey/ Venice (-92,700 ), Santa Monica (-22,800 ), Westwood (-16.500) and West Los Angeles (-3,900 ). The tenants that occupied space in the first quarter are as follows: Cox, Castel & Nicholson moved into 44,395 at 2029 Century Park East in Century City, True Car, Inc. moved into 33,700 at 1401 Ocean Ave. in Santa Monica, SnapChat moved into 24,815 at 701 Ocean Front Walk in Venice. unemployment February 2015 figures for nonfarm employment in Los Angeles County showed a recovering job market. Over the past 12 months, Los Angeles County has gained 101,100 jobs for an increase of 2.4 percent. This gain in employment led to the unemployment lowering to 7.8% compared to 8.7% one year ago. Year-over-year job gains were most significant in Educational and Health Services (+27,400) Trade, Transportation, and Utilities (+19,600). VACANCY BY submarket West Los Angeles Market NET ABSORPTION BY SUBMARKET West Los Angeles Market 25% 200,000 SUBLEASE VACANCY DIRECT VACANCY 151,500 0.4% 2.7% 150,000 % VACANT 20% 15% 10% 5% 0% 0.6% 0.7% 21.5% 0.1% 0.2% 0.0% 20.9% 0.2% 14.1% 13.2% 13.5% 13.1% 13.7% 0.9% 11.5% 0.7% 7.2% 0.3% 4.2% 6.9% 100,000 50,000 0 (50,000) (100,000) (150,000) 79,600 62,900 21,100 17,500 16,200 (3,900) (16,500) (22,800) (92,700) (128,000) p. 2 Colliers International

market Report OFFICE 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 229 44,921,543 12.8% 0.7% 13.5% 14.1% 1,006,295 1,006,295 253,900 253,900 0 269,322 $3.84 B 174 10,567,141 9.8% 0.7% 10.5% 9.5% 200,706 200,706 (106,200) (106,200) 0 280,343 $3.58 C 19 735,120 5.9% 0.0% 5.9% 4.2% 18,611 18,611 (12,300) (12,300) 0 0 $2.75 Subtotal 20 10,593,420 13.1% 0.2% 13.3% 12.1% 201,556 201,556 (128,000) (128,000) 0 0 $4.30 Subtotal 102 9,210,195 7.2% 0.9% 8.0% 7.8% 134,902 134,902 (22,800) (22,800) 0 0 $4.41 Subtotal 71 6,750,724 6.9% 0.7% 7.6% 9.8% 144,939 144,939 144,800 144,800 0 64,900 $4.83 Subtotal 25 5,272,006 13.2% 0.1% 13.3% 13.6% 180,259 180,259 17,500 17,500 0 0 $3.08 Subtotal 27 4,743,127 13.7% 0.6% 14.4% 14.0% 73,565 73,565 (16,500) (16,500) 0 0 $3.88 Subtotal 46 3,633,860 14.1% 0.7% 14.7% 15.2% 30,670 30,670 16,200 16,200 0 0 $2.56 Subtotal 48 5,959,402 20.9% 2.7% 23.6% 22.0% 260,138 260,138 (92,700) (92,700) 0 204,422 $3.17 Subtotal 20 3,363,353 11.5% 0.2% 11.7% 13.6% 112,565 112,565 62,900 62,900 0 0 $3.55 Subtotal 22 3,020,709 4.2% 0.3% 4.5% 7.2% 51,531 51,531 79,600 79,600 0 280,343 $3.50 Subtotal 31 2,824,045 21.5% 0.4% 21.9% 22.7% 73,270 73,270 21,100 21,100 0 0 $4.30 Subtotal 10 849,600 13.5% 0.0% 13.5% 13.1% 4,148 4,148 (3,900) (3,900) 0 0 $2.64 MARKET TOTAL Total 422 56,220,441 12.2% 0.7% 12.9% 13.1% 1,267,543 1,267,543 78,200 78,200 0 549,665 $3.76 Colliers International p. 3

market Report OFFICE >> Average rental rates have been increasing at a measured pace since fourth quarter 2011; this trend is expected to continue >> The tech, media and entertainment sectors continue to dominate the West Los Angeles market leasing activity >> Strong leasing activity is expected to provide the West Los Angeles market with momentum continuing a positive absorption trend CONSTRUCTION There were no new buildings delivered to the market in first quarter. The West Los Angeles office market recorded 549,665 of space under construction and renovation. The projects are as follows: Hundson Pacific Properties is renovating the Element LA campus in the Olympic Corridor consisting of five buildings totalling 280,343. Tishman Speyer currently has 204,422 under construction at The Collective at Playa Vista and Kennedy-Wilson Properties is renovating 150 S. El Camino Dr. totaling 64,937 in Beverly Hills, which all are expected to be completed second quarter of 2015. ACTIVITY New leasing activity during first quarter was 1,267,543 square feet, a 0.2% increase compared to last quarter. The tech, media and entertainment sectors continue to dominate the West Los Angeles market with large lease signings. The tenants that signed leases in first quarter are as follows: Irell & Manella LLP signed a renewal for 125,250 at 1800 Avenue of the Stars in Century City, Omnicon leased 60,000 at 12777-12731 W. Jefferson Blvd. in Marina Del Rey, Kinetic connect leased 55,700 at 11755 & 12100 Wilshire Blvd. in Brentwood, Group M renewed 44,344 at 6300 Wilshire Blvd. in Miracle Mile and WhaleRock Industries, Inc. leased 30,000 at 750 San Vicente Blvd. in West Hollywood. rental rates The overall weighted average asking rent for direct space increased 1.6% to $3.76 P from $3.70 P last quarter. Average asking rental rates were last historically recorded in the current range at the end of 2008. The following submarkets all had significant asking rental rate increases: Santa Monica, Beverly Hills, Brentwood and the Olympic Corridor. Average rental rates have been increasing since Q4 2011. This trend is expected to continue throughout 2015 as the market tightens. Average asking rents remained highest in Beverly Hills ($4.83 P) and lowest in Culver City ($2.56 P). Class A asking rents were $3.84 P compared to Class B at $3.58 P and Class C at $2.75 P. WEIGHTED AVERAGE ASKING LEASE RATES BY SUBMARKET LEASING ACTIVITY BY SUBMARKET $ P PER MONTH (FSG) $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $4.83 $4.30 $4.30 $4.41 $3.88 $3.55 $3.50 $3.08 $3.17 $2.56 $2.64 280,000 260,000 240,000 220,000 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 4,148 30,670 51,531 73,270 73,565 144,939 134,902 112,565 260,138 201,556 180,259 p. 4 Colliers International

market Report OFFICE OUTLOOK The West Los Angeles market began 2015 with relatively flat net absorption compared to prior quarters, however, market conditions will continue to experience strong market fundamentals. Investment sales and leasing activity will continue to intensify throughout the year. Rental rate increases and concession reductions are expected to continue as vacancy rates decline. The West Los Angeles market will continue to be the leader of the Los Angeles basin office market with driving demand from the tech, media and entertainment sectors. market description West Los Angeles is a moderately large office market comprised of 56.2 million square feet, representing 19% of the total office space in buildings 25,000 square feet and greater in the Los Angeles Basin. It is also a moderately young and dense market, with 40% of its space built in 1985 or later, and 70% of its space contained within mid-rise and high-rise buildings. It has a large concentration of high-margin firms (including those in the entertainment, digital media, software, and finance sectors), and is situated in the midst of some of the most affluent neighborhoods nationally. HISTORICAL LEASING ACTIVITY Q1 2011 - UNEMPLOYMENT RATE United States, California & West Los Angeles February 2015 1,900,000 1,700,000 1,500,000 1,300,000 1,100,000 900,000 700,000 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 5.8% 6.7% 7.8% 500,000 2.0% 300,000 1.0% 100,000 1Q11 1Q12 1Q13 1Q14 1Q15 0.0% United States California Los Angeles County RECENT TRANSACTIONS & MAJOR DEVELOPMENTS SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 13031 W. Jefferson Blvd., Los Angeles 338,695 $316,000,000 $791 P Invesco Real Estate Shorenstein Properties, LLC 3644 Eastham Dr./8600 Hayden Pl./8550 Higuera St., Culver 127,447 $108,000,000 $847 P IDS Real Estate Group Hackman Capital Partners 520 Broadway, Santa Monica 112,985 $91,000,000 $805 P Tishman Speyer Vornado Realty Trust 12555 Jefferson Blvd., Los Angeles 89,365 $48,500,000 $542 P Mani Brothers RE Group Ocean West Capital Partners 2701 Ocean Park Blvd., Santa Monia 100,983 $31,457,064 $722 P Westbrook Partners Broadreach Capital Partners LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 1800 Avenue of the Stars, Los Angeles 125,250 Renewal A Irell & Manella LLP Topa Equities 12777-12731 W. Jefferson Blvd., Los Angeles 60,000 Direct A Omnicon Vantage Property Investors 11755 & 12100 Wilshire Blvd., Los Angeles 55,700 Direct A Kinetic Connect CalSTRS 6300 Wilshire Blvd., Los Angeles 44,300 Renewal A Group M Legacy Partners 750 San Vicente Blvd., West Hollywood 30,000 Direct A WhaleRock Industries, Inc Cohen Brothers Realty Group MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION Element: LA (5 bldgs) Hudson Pacific Properties 280,343 Olympic Corridor Under Renovation Q2 2015 The Collective At Playa Vista (5 bldgs) Tishman Speyer 204,422 Marina Del Rey/Venice Under Construction Q2 2015 150 S. El Camino Dr., Beverly Hills Kennedy-Wilson Properites 64,937 Beverly Hills Under Renovation Q2 2015 Colliers International p. 5

market Report OFFICE DEFINITIONS OF KEY TERMS USED IN THIS REPORT Total Rentable Square Feet: Office space in buildings with 25,000 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 30% 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. 502 offices in 67 countries on 6 continents United States: 140 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 108 >> $2.3 billion in annual revenue >> 1.7 billion square feet under management >> Over 16,200 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: Downtown Los Angeles Office License No. 01908231 865 S. Figueroa Street, Suite 3500 Los Angeles, CA 90017 tel +1 213 627 1214 FAX +1 213 327 3200 Downtown LA ALGERMISSEN, STEPHEN Executive Vice President BISSELL, BRENT Vice President DUMONT, CHRIS Senior Vice President DWIGHT, TIM KIRK, TERENCE Vice President MATTESON, CAITLIN Research Director Research Services MUMPER, HANS Executive Managing Director PUTNAM, RICK Managing Director Western Region Capital Markets El Segundo BRAWN, DOUGLAS Vice President GOODWIN, THACHER LASTITION, ERIC Senior Executive Vice President LUDWIG, GEOFFREY Senior Executive Vice President WALSH, GREGORY T. Senior Executive President 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/greaterlosangeles. SPROWLES, MATTHEW STANICH, KYLE VILGIATE, NICO Executive Vice President Accelerating success. p. 6 Colliers International www.colliers.com/marketname