The CoStar Industrial Report. F i r s t Q u a r t e r San Francisco Industrial Market

The CoStar Industrial Report F i r s t Q u a r t e r 2 0 1 5

First Quarter 2015 San Francisco Table of Contents Table of Contents................................................................. A Methodology...................................................................... B Terms & Definitions................................................................ C Market Highlights & Overview........................................................ 1 CoStar Markets & Submarkets........................................................ 4 Inventory & Development Analysis..................................................... 5 Inventory & Development Analysis Select Top Under Construction Properties Select Top Deliveries Figures at a Glance................................................................. 8 Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis............................................................ 13 Select Top Lease Transactions Sales Activity Analysis.............................................................. 15 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters........................................ 17 San Mateo Central County Market San Mateo North County Market San Mateo South County Market San Mateo West County Market SF Downtown Core Market SF Downtown North Market SF Downtown South Market SF Downtown West Market SF Outer Areas Market SF Southeast Market 2015 CoStar Group, Inc. The CoStar Industrial Report A

San Francisco First Quarter 2015 Methodology The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing, under construction and under renovation Industrial buildings in each given metropolitan area. All Industrial building types are included, including warehouse, flex / research & development, distribution, manufacturing, industrial showroom, and service buildings, in both single-tenant and multitenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental rates reported in the CoStar Industrial Report are calculated using the quoted rental rate for each property. The quoted rental rate is exclusive of the expense pass through associated with the rent. For information on subscribing to CoStar s other products and services, please contact us at 1-877-7COSTAR, or visit our web site at www.costar.com Copyright 2015 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc. 1331 L ST NW Washington, DC 20005 (800) 204-5960 www.costar.com NASDAQ: CSGP B The CoStar Industrial Report 2015 CoStar Group, Inc.

First Quarter 2015 San Francisco Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. : The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different 2015 CoStar Group, Inc. The CoStar Industrial Report C

San Francisco First Quarter 2015 tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D The CoStar Industrial Report 2015 CoStar Group, Inc.

Overview First Quarter 2015 San Francisco San Francisco s Decreases to 3.6% Net Absorption Positive 218,378 SF in the Quarter The San Francisco Industrial market ended the first quarter 2015 with a vacancy rate of 3.6%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 218,378 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 413,869 square feet. Rental rates ended the first quarter at $16.40, an increase over the previous quarter. A total of two buildings delivered to the market in the quarter totaling 108,080 square feet, with 252,593 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall San Francisco Industrial market was positive 218,378 square feet in the first quarter 2015. That compares to positive 265,569 square feet in the fourth quarter 2014, negative (20,730) square feet in the third quarter 2014, and positive 958,846 square feet in the second quarter 2014. Tenants moving out of large blocks of space in 2015 included U-Save Equipment & Tool Rental moving out of (21,000) square feet at 1258 Bayshore Blvd. Tenants moving into large blocks of space in 2015 include: Green Leaf moving into 105,600 square feet at 455 Valley Dr, Myokardia moving into 45,404 square feet at 333 Allerton Ave, and CloudFlare moving into 43,519 square feet at 101 Townsend St. The Flex building market recorded net absorption of positive 3,656 square feet in the first quarter 2015, compared to positive 129,751 square feet in the fourth quarter 2014, positive 140,779 in the third quarter 2014, and positive 276,608 in the second quarter 2014. The Warehouse building market recorded net absorption of positive 214,722 square feet in the first quarter 2015 compared to positive 135,818 square feet in the fourth quarter 2014, negative (161,509) in the third quarter 2014, and positive 682,238 in the second quarter 2014. The Industrial vacancy rate in the San Francisco market area decreased to 3.6% at the end of the first quarter 2015. The vacancy rate was 3.8% at the end of the fourth quarter 2014, 4.0% at the end of the third quarter 2014, and 4.1% at the end of the second quarter 2014. Flex projects remained at a vacancy rate of 5.3% at the end of the first quarter 2015 compared to the previous quarter, 5.8% at the end of the third quarter 2014, and 6.4% at the end of the second quarter 2014. Warehouse projects reported a vacancy rate of 3.1% at the end of the first quarter 2015, 3.3% at the end of fourth quarter 2014, 3.4% at the end of the third quarter 2014, and 3.3% at the end of the second quarter 2014. Largest Lease Signings The largest lease signings occurring in 2015 included: the 48,817-square-foot lease signed by Guardant Health, Inc. at 505-595 Penobscot Dr in the San Mateo South County market; the 31,745-square-foot deal signed by Vieux Vin, Inc. at 280 Valley Dr in the San Mateo North County market; and the 31,280-square-foot lease signed by Personalis, Inc. at Menlo Rates by Building Type 1997-2015 20% Flex Warehouse Total Market 18% 16% 14% Rate 12% 10% 8% 6% 4% 2% 0% 1997 1q 1998 1q 1999 1q2000 1q 2001 1q 2002 1q 2003 1q 2004 1q 2005 1q 2006 1q 2007 1q 2008 1q 2009 1q 2010 1q 2011 1q 2012 1q 2013 1q 2014 1q 20151 2015 CoStar Group, Inc. The CoStar Industrial Report 1

San Francisco First Quarter 2015 Overview Business Park Bldgs 5 & 6 in the San Mateo South County market. Sublease The amount of vacant sublease space in the San Francisco market increased to 413,869 square feet by the end of the first quarter 2015, from 285,144 square feet at the end of the fourth quarter 2014. There was 290,380 square feet vacant at the end of the third quarter 2014 and 314,753 square feet at the end of the second quarter 2014. San Francisco s Flex projects reported vacant sublease space of 186,108 square feet at the end of first quarter 2015, down from the 208,699 square feet reported at the end of the fourth quarter 2014. There were 91,366 square feet of sublease space vacant at the end of the third quarter 2014, and 129,748 square feet at the end of the second quarter 2014. Warehouse projects reported increased vacant sublease space from the fourth quarter 2014 to the first quarter 2015. Sublease vacancy went from 76,445 square feet to 227,761 square feet during that time. There was 199,014 square feet at the end of the third quarter 2014, and 185,005 square feet at the end of the second quarter 2014. Rental Rates The average quoted asking rental rate for available Industrial space was $16.40 per square foot per year at the end of the first quarter 2015 in the San Francisco market area. This represented a 4.1% increase in quoted rental rates from the end of the fourth quarter 2014, when rents were reported at $15.75 per square foot. The average quoted rate within the Flex sector was $26.61 per square foot at the end of the first quarter 2015, while Warehouse rates stood at $12.23. At the end of the fourth quarter 2014, Flex rates were $25.23 per square foot, and Warehouse rates were $11.94. U.S. Comparison Past 7 Quarters Rate 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% San Francisco United States Deliveries and Construction During the first quarter 2015, two buildings totaling 108,080 square feet were completed in the San Francisco market area. This compares to 0 buildings completed in the previous three quarters. There were 252,593 square feet of Industrial space under construction at the end of the first quarter 2015. Some of the notable 2015 deliveries include: 901 Rankin St, an 82,480-square-foot facility that delivered in first quarter 2015 and is now 100% occupied by Goodeggs and Mollie Stone s Markets, and 1 Kelly Ct, a 25,600-square-foot building that delivered in first quarter 2015 and is now 100% occupied by CS Bio Company, Inc. The largest projects underway at the end of first quarter 2015 were The Cove - Building 3, a 132,034-square-foot building with 0% of its space pre-leased, and The Cove - Building 4, a 120,559-square-foot facility that is 0% pre-leased. Inventory Total Industrial inventory in the San Francisco market area amounted to 94,507,020 square feet in 4,841 buildings as of the end of the first quarter 2015. The Flex sector consisted of 23,955,743 square feet in 789 projects. The Warehouse sector consisted of 70,551,277 square feet in 4,052 buildings. Within the Industrial market there were 516 owner-occupied buildings accounting for 12,428,802 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, San Francisco industrial sales figures fell during the fourth quarter 2014 in terms of dollar volume compared to the third quarter of 2014. In the fourth quarter, nine industrial transactions closed with a total volume of $58,055,000. The nine buildings totaled 430,025 square feet and the average price per square foot equated to $135.00 per square foot. That compares to eight transactions totaling $80,684,000 in the third quarter. The total square footage was 349,762 for an average price per square foot of $230.68. Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the twelve months of 2014, the market saw 46 industrial sales transactions with a total volume of $410,518,100. The price per square foot has averaged $199.10 this year. In the twelve months of 2013, the market posted 31 transactions with a total volume of $191,567,100. The price per square foot averaged $176.40. Cap rates have been higher in 2014, averaging 6.35%, compared to the twelve months of last year when they averaged 6.19%. 1.0% % 2013 3q 2 The CoStar Industrial Report 2015 CoStar Group, Inc.

Overview First Quarter 2015 San Francisco One of the largest transactions that occurred within the last four quarters in the San Francisco market is the sale of The Design Pavilion located at 200 Kansas St in San Francisco. This 90,637-square-foot flex building sold for $42,000,000, or $463.39 per square foot. The property sold on 2/13/2015. Absorption & Deliveries Past 7 Quarters Net Absorption Deliveries 1.2 1.0 1.0 Reports compiled by: Espie Tuthill, Research Manager; and Noel Bigay, Research Associate. 0.8 0.6 0.4 0.5 0.3 0.2 0.2 0.1 0.1 0.1 () (0.2) 2013 3q 2015 CoStar Group, Inc. The CoStar Industrial Report 3

San Francisco First Quarter 2015 Markets CoStar Submarket Clusters & Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters Submarkets San Mateo Central County Burlingame-Airport Blvd Burlingame-Old Bayshore Burlingame-West of 101 Foster City/Redwood Shrs San Mateo-Corridor/Hwy 92 San Mateo-Downtown North San Mateo-Downtown South San Mateo North County Brisbane/Daly City Pacifica San Bruno/Millbrae South SF East of 101 Fwy South SF West of 101 Fwy San Mateo South County Belmont Menlo Park-Atherton Menlo Park-East/EPA Redwood City-N of 84 Fwy Redwood City-Port Redwood City-S of 84 Fwy San Carlos San Mateo West County El Granada/Montara Half Moon Bay SF Downtown Core SF Downtown North South Financial District Waterfront/North Beach SF Downtown South Lower South of Market MidMarket Rincon/South Beach Showplace Square South of Market SF Downtown West Chinatown/Nob Hill Civic Center Van Ness Corridor Yerba Buena SF Outer Areas Southern City West of Van Ness SF Southeast Bayview/Hunters Point India Basin Mission Bay/China Basin Potrero East of 101 Fwy Potrero West of 101 Fwy 4 The CoStar Industrial Report 2015 CoStar Group, Inc.

Inventory & development First Quarter 2015 San Francisco Historical Deliveries 1982-2015 Millions of SF 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 Deliveries Average Delivered SF 1.6 1.4 1.2 0.9 0.9 0.9 0.9 1.0 0.6 0.6 0.5 0.5 0.4 0.5 0.4 0.3 0.4 0.4 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1982 1986 1990 1994 1998 2002 2006 2010 2014 * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction RBA Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C San Mateo North County 2 252,593 0 % 30,548 126,296 San Mateo West County 0 0 0 % 5,599 0 San Mateo Central County 0 0 0 % 16,585 0 San Mateo South County 0 0 0 % 17,260 0 SF Downtown Core 0 0 0 % 9,574 0 SF Downtown North 0 0 0 % 67,629 0 SF Downtown South 0 0 0 % 14,342 0 SF Downtown West 0 0 0 % 8,564 0 SF Outer Areas 0 0 0 % 11,199 0 SF Southeast 0 0 0 % 20,978 0 Totals 2 252,593 0 % 19,522 126,296 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2011 0.3 Leased Un-Leased 0.2 Millions of SF 0.2 0.1 0.1 2011 2013 2015 2015 CoStar Group, Inc. The CoStar Industrial Report 5

San Francisco First Quarter 2015 Inventory & development Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.3 Construction Starts Deliveries 0.3 0.3 Millions of SF 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 2012 1q 2013 1q 2014 1q 2015 1q Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF 1 25,600 25,600 10% $0 25,600 0 50,000 SF - 99,999 SF 1 82,480 82,480 10% $12.44 82,480 0 100,000 SF - 249,999 SF 0 0 0 % $0 0 0 250,000 SF - 499,999 SF 0 0 0 % $0 0 0 >= 500,000 SF 0 0 0 % $0 0 0 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2015 Deliveries Currently Under Construction By Building Type By Tenancy Type 0% 0% 75% 25% 44% 56% 100% 100% Multi Single Multi Single Flex Warehouse Multi Single 6 The CoStar Industrial Report 2015 CoStar Group, Inc.

Inventory & development First Quarter 2015 San Francisco 2015 CoStar Group, Inc. The CoStar Industrial Report 7

San Francisco First Quarter 2015 Figures at a Glance Flex Market Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates San Mateo Central County 103 2,617,853 92,264 103,098 3.9% (12,857) 0 0 $21.07 San Mateo North County 100 4,270,504 95,449 213,394 5.0% 30,033 0 252,593 $25.66 San Mateo South County 232 7,617,947 548,344 557,744 7.3% 59,975 25,600 0 $20.96 San Mateo West County 5 26,600 0 0 % 0 0 0 $0 SF Downtown Core 7 85,988 0 4,888 5.7% (4,888) 0 0 $0 SF Downtown North 4 428,572 2,939 29,539 6.9% (2,939) 0 0 $48.00 SF Downtown South 197 4,084,628 268,838 285,279 7.0% (58,866) 0 0 $41.83 SF Downtown West 43 410,934 38,889 38,889 9.5% (15,656) 0 0 $44.15 SF Outer Areas 24 432,078 5,400 5,400 1.2% (5,400) 0 0 $30.48 SF Southeast 74 3,980,639 41,384 41,384 1.0% 14,254 0 0 $28.61 Totals 789 23,955,743 1,093,507 1,279,615 5.3% 3,656 25,600 252,593 $26.61 Warehouse Market Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates San Mateo Central County 392 5,591,896 178,917 259,032 4.6% (73,880) 0 0 $11.98 San Mateo North County 781 22,641,945 534,109 645,879 2.9% 63,116 0 0 $9.97 San Mateo South County 1,005 13,733,130 445,733 445,733 3.2% (2,261) 0 0 $11.27 San Mateo West County 69 387,742 5,190 5,190 1.3% 2,370 0 0 $12.48 SF Downtown Core 5 28,900 0 0 % 0 0 0 $0 SF Downtown North 15 856,372 0 0 % 0 0 0 $12.00 SF Downtown South 487 5,725,508 115,906 115,906 2.0% 15,732 0 0 $24.69 SF Downtown West 118 967,794 2,443 4,019 0.4% (1,943) 0 0 $20.73 SF Outer Areas 158 1,606,231 87,390 87,390 5.4% 0 0 0 $18.19 SF Southeast 1,022 19,011,759 563,371 597,671 3.1% 211,588 82,480 0 $14.91 Totals 4,052 70,551,277 1,933,059 2,160,820 3.1% 214,722 82,480 0 $12.23 Total Industrial Market Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates San Mateo Central County 495 8,209,749 271,181 362,130 4.4% (86,737) 0 0 $14.11 San Mateo North County 881 26,912,449 629,558 859,273 3.2% 93,149 0 252,593 $12.96 San Mateo South County 1,237 21,351,077 994,077 1,003,477 4.7% 57,714 25,600 0 $16.20 San Mateo West County 74 414,342 5,190 5,190 1.3% 2,370 0 0 $12.48 SF Downtown Core 12 114,888 0 4,888 4.3% (4,888) 0 0 $0 SF Downtown North 19 1,284,944 2,939 29,539 2.3% (2,939) 0 0 $19.58 SF Downtown South 684 9,810,136 384,744 401,185 4.1% (43,134) 0 0 $34.91 SF Downtown West 161 1,378,728 41,332 42,908 3.1% (17,599) 0 0 $30.21 SF Outer Areas 182 2,038,309 92,790 92,790 4.6% (5,400) 0 0 $20.71 SF Southeast 1,096 22,992,398 604,755 639,055 2.8% 225,842 82,480 0 $16.13 Totals 4,841 94,507,020 3,026,566 3,440,435 3.6% 218,378 108,080 252,593 $16.40 8 The CoStar Industrial Report 2015 CoStar Group, Inc.

Figures at a Glance First Quarter 2015 San Francisco Flex Submarket Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Bayview/Hunters Poin. 17 844,829 18,204 18,204 2.2% (4,286) 0 0 $17.57 Belmont 20 642,286 0 0 % 26,585 0 0 $17.48 Brisbane/Daly City 7 253,963 1,680 1,680 0.7% 0 0 0 $16.18 Burlingame-Airport B. 6 127,771 25,000 25,000 19.6% 0 0 0 $21.00 Burlingame-Old Baysh. 22 436,331 27,836 38,670 8.9% (6,077) 0 0 $21 Burlingame-West of 1. 17 536,573 5,267 5,267 1.0% 0 0 0 $17.18 Chinatown/Nob Hill 3 30,955 10,480 10,480 33.9% (10,480) 0 0 $39.00 Civic Center 0 0 0 0 % 0 0 0 $0 El Granada/Montara 4 21,920 0 0 % 0 0 0 $0 Foster City/Redwood. 42 1,314,799 13,951 13,951 1.1% 7,980 0 0 $23.39 Half Moon Bay 1 4,680 0 0 % 0 0 0 $0 India Basin 5 220,742 0 0 % 5,640 0 0 $19.80 Lower South of Marke. 51 919,574 11,953 23,394 2.5% (1,362) 0 0 $47.37 Menlo Park-Atherton 3 67,955 0 0 % 0 0 0 $0 Menlo Park-East/EPA 66 3,518,354 211,441 211,441 6.0% 29,331 25,600 0 $19.68 MidMarket 11 301,570 0 0 % 0 0 0 $0 Mission Bay/China Ba. 13 1,629,637 0 0 % 0 0 0 $30.67 Pacifica 0 0 0 0 % 0 0 0 $0 Potrero East of 101. 14 349,717 10,680 10,680 3.1% 1,172 0 0 $21.02 Potrero West of 101. 25 935,714 12,500 12,500 1.3% 11,728 0 0 $39.82 Redwood City-N of 84. 18 175,551 63,669 63,669 36.3% (800) 0 0 $27.70 Redwood City-Port 35 1,221,452 141,355 150,755 12.3% (8,354) 0 0 $26.24 Redwood City-S of 84. 40 725,263 13,836 13,836 1.9% 14,264 0 0 $16.56 Rincon/South Beach 27 1,057,198 90,871 90,871 8.6% 65,426 0 0 $44.59 San Bruno/Millbrae 8 161,259 0 0 % 0 0 0 $16.20 San Carlos 50 1,267,086 118,043 118,043 9.3% (1,051) 0 0 $18.18 San Mateo-Corridor/H. 3 44,820 0 0 % 0 0 0 $0 San Mateo-Downtown N. 12 107,559 20,210 20,210 18.8% (14,760) 0 0 $18.00 San Mateo-Downtown S. 1 50,000 0 0 % 0 0 0 $0 Showplace Square 24 924,321 129,932 129,932 14.1% (112,100) 0 0 $36.56 South Financial Dist. 7 85,988 0 4,888 5.7% (4,888) 0 0 $0 South of Market 84 881,965 36,082 41,082 4.7% (10,830) 0 0 $39.09 South SF East of 101. 64 3,414,670 64,289 178,499 5.2% 31,872 0 252,593 $29.30 South SF West of 101. 21 440,612 29,480 33,215 7.5% (1,839) 0 0 $13.03 Southern City 12 265,395 5,400 5,400 2.0% (5,400) 0 0 $30.48 Van Ness Corridor 4 65,700 0 0 % 0 0 0 $0 Waterfront/North Bea. 4 428,572 2,939 29,539 6.9% (2,939) 0 0 $48.00 West of Van Ness 12 166,683 0 0 % 0 0 0 $0 Yerba Buena 36 314,279 28,409 28,409 9.0% (5,176) 0 0 $48.56 Totals 789 23,955,743 1,093,507 1,279,615 5.3% 3,656 25,600 252,593 $26.61 2015 CoStar Group, Inc. The CoStar Industrial Report 9

San Francisco First Quarter 2015 Figures at a Glance Warehouse Submarket Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Bayview/Hunters Poin. 394 5,465,998 234,906 234,906 4.3% 102,366 82,480 0 $12.07 Belmont 122 1,393,497 61,235 61,235 4.4% (3,071) 0 0 $9.61 Brisbane/Daly City 163 5,600,029 49,245 49,245 0.9% 107,040 0 0 $9.03 Burlingame-Airport B. 8 150,774 7,230 7,230 4.8% (4,096) 0 0 $15.00 Burlingame-Old Baysh. 47 866,692 99,465 99,465 11.5% 900 0 0 $11.81 Burlingame-West of 1. 127 2,987,245 46,746 126,861 4.2% (73,950) 0 0 $11.77 Chinatown/Nob Hill 18 251,080 0 0 % 0 0 0 $11.40 Civic Center 6 29,697 2,443 2,443 8.2% (2,443) 0 0 $36.84 El Granada/Montara 60 285,785 0 0 % 2,370 0 0 $0 Foster City/Redwood. 11 249,687 0 0 % 2,680 0 0 $9.16 Half Moon Bay 9 101,957 5,190 5,190 5.1% 0 0 0 $12.48 India Basin 33 929,604 7,912 7,912 0.9% 21,163 0 0 $14.42 Lower South of Marke. 124 1,338,391 8,300 8,300 0.6% 0 0 0 $25.72 Menlo Park-Atherton 3 16,333 0 0 % 0 0 0 $0 Menlo Park-East/EPA 119 2,857,955 149,013 149,013 5.2% (19,951) 0 0 $8.12 MidMarket 19 271,994 0 0 % 16,000 0 0 $21.00 Mission Bay/China Ba. 151 3,679,076 152,500 152,500 4.1% 700 0 0 $16.25 Pacifica 20 134,713 1,120 1,120 0.8% 0 0 0 $0 Potrero East of 101. 246 5,670,031 117,640 138,640 2.4% 93,985 0 0 $12.89 Potrero West of 101. 198 3,267,050 50,413 63,713 2.0% (6,626) 0 0 $21.80 Redwood City-N of 84. 97 1,129,417 18,533 18,533 1.6% 13,217 0 0 $13.10 Redwood City-Port 32 637,245 0 0 % 0 0 0 $8.12 Redwood City-S of 84. 320 3,000,352 121,385 121,385 4.0% 13,813 0 0 $13.74 Rincon/South Beach 25 326,599 15,500 15,500 4.7% (10,745) 0 0 $80 San Bruno/Millbrae 104 751,774 2,500 2,500 0.3% 0 0 0 $12.00 San Carlos 312 4,698,331 95,567 95,567 2.0% (6,269) 0 0 $14.58 San Mateo-Corridor/H. 37 288,659 4,300 4,300 1.5% 0 0 0 $20.97 San Mateo-Downtown N. 151 983,293 21,176 21,176 2.2% 586 0 0 $10.90 San Mateo-Downtown S. 11 65,546 0 0 % 0 0 0 $11.88 Showplace Square 74 1,631,615 47,381 47,381 2.9% 18,052 0 0 $18.59 South Financial Dist. 5 28,900 0 0 % 0 0 0 $0 South of Market 245 2,156,909 44,725 44,725 2.1% (7,575) 0 0 $30.68 South SF East of 101. 234 9,206,161 305,237 352,198 3.8% 32,301 0 0 $9.93 South SF West of 101. 260 6,949,268 176,007 240,816 3.5% (76,225) 0 0 $11.30 Southern City 102 979,497 6,152 6,152 0.6% 0 0 0 $18.19 Van Ness Corridor 21 196,966 0 0 % 0 0 0 $13.66 Waterfront/North Bea. 15 856,372 0 0 % 0 0 0 $12.00 West of Van Ness 56 626,734 81,238 81,238 13.0% 0 0 0 $0 Yerba Buena 73 490,051 0 1,576 0.3% 500 0 0 $29.42 Totals 4,052 70,551,277 1,933,059 2,160,820 3.1% 214,722 82,480 0 $12.23 10 The CoStar Industrial Report 2015 CoStar Group, Inc.

Figures at a Glance First Quarter 2015 San Francisco Total Industrial Submarket Statistics First Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Bayview/Hunters Poin. 411 6,310,827 253,110 253,110 4.0% 98,080 82,480 0 $12.65 Belmont 142 2,035,783 61,235 61,235 3.0% 23,514 0 0 $14.91 Brisbane/Daly City 170 5,853,992 50,925 50,925 0.9% 107,040 0 0 $9.87 Burlingame-Airport B. 14 278,545 32,230 32,230 11.6% (4,096) 0 0 $19.65 Burlingame-Old Baysh. 69 1,303,023 127,301 138,135 10.6% (5,177) 0 0 $13.61 Burlingame-West of 1. 144 3,523,818 52,013 132,128 3.7% (73,950) 0 0 $11.92 Chinatown/Nob Hill 21 282,035 10,480 10,480 3.7% (10,480) 0 0 $25.91 Civic Center 6 29,697 2,443 2,443 8.2% (2,443) 0 0 $36.84 El Granada/Montara 64 307,705 0 0 % 2,370 0 0 $0 Foster City/Redwood. 53 1,564,486 13,951 13,951 0.9% 10,660 0 0 $19.55 Half Moon Bay 10 106,637 5,190 5,190 4.9% 0 0 0 $12.48 India Basin 38 1,150,346 7,912 7,912 0.7% 26,803 0 0 $14.90 Lower South of Marke. 175 2,257,965 20,253 31,694 1.4% (1,362) 0 0 $37.71 Menlo Park-Atherton 6 84,288 0 0 % 0 0 0 $0 Menlo Park-East/EPA 185 6,376,309 360,454 360,454 5.7% 9,380 25,600 0 $13.50 MidMarket 30 573,564 0 0 % 16,000 0 0 $21.00 Mission Bay/China Ba. 164 5,308,713 152,500 152,500 2.9% 700 0 0 $16.64 Pacifica 20 134,713 1,120 1,120 0.8% 0 0 0 $0 Potrero East of 101. 260 6,019,748 128,320 149,320 2.5% 95,157 0 0 $13.31 Potrero West of 101. 223 4,202,764 62,913 76,213 1.8% 5,102 0 0 $25.49 Redwood City-N of 84. 115 1,304,968 82,202 82,202 6.3% 12,417 0 0 $18.45 Redwood City-Port 67 1,858,697 141,355 150,755 8.1% (8,354) 0 0 $23.71 Redwood City-S of 84. 360 3,725,615 135,221 135,221 3.6% 28,077 0 0 $14.35 Rincon/South Beach 52 1,383,797 106,371 106,371 7.7% 54,681 0 0 $45.48 San Bruno/Millbrae 112 913,033 2,500 2,500 0.3% 0 0 0 $14.47 San Carlos 362 5,965,417 213,610 213,610 3.6% (7,320) 0 0 $16.61 San Mateo-Corridor/H. 40 333,479 4,300 4,300 1.3% 0 0 0 $20.97 San Mateo-Downtown N. 163 1,090,852 41,386 41,386 3.8% (14,174) 0 0 $12.84 San Mateo-Downtown S. 12 115,546 0 0 % 0 0 0 $11.88 Showplace Square 98 2,555,936 177,313 177,313 6.9% (94,048) 0 0 $23.18 South Financial Dist. 12 114,888 0 4,888 4.3% (4,888) 0 0 $0 South of Market 329 3,038,874 80,807 85,807 2.8% (18,405) 0 0 $36.38 South SF East of 101. 298 12,620,831 369,526 530,697 4.2% 64,173 0 252,593 $15.19 South SF West of 101. 281 7,389,880 205,487 274,031 3.7% (78,064) 0 0 $11.41 Southern City 114 1,244,892 11,552 11,552 0.9% (5,400) 0 0 $20.71 Van Ness Corridor 25 262,666 0 0 % 0 0 0 $13.66 Waterfront/North Bea. 19 1,284,944 2,939 29,539 2.3% (2,939) 0 0 $19.58 West of Van Ness 68 793,417 81,238 81,238 10.2% 0 0 0 $0 Yerba Buena 109 804,330 28,409 29,985 3.7% (4,676) 0 0 $38.79 Totals 4,841 94,507,020 3,026,566 3,440,435 3.6% 218,378 108,080 252,593 $16.40 2015 CoStar Group, Inc. The CoStar Industrial Report 11

San Francisco First Quarter 2015 Figures at a Glance 12 The CoStar Industrial Report 2015 CoStar Group, Inc.

Leasing Activity First Quarter 2015 San Francisco Historical Rental Rates Based on Quoted Rental Rates $30 Flex Warehouse Total Market $25.00 Dollars/SF/Year $20 $15.00 $10 $5.00 $0 2013 3q 2014 1q 2014 3q 2015 1q by Available Space Type by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type San Francisco United States San Francisco United States 12% 3% 63% 15% 37% 85% 88% 97% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Quoted Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $18.00 San Francisco United States 1.2 1.1 $16.00 1.0 $14.00 Dollars/SF/Year $12.00 $10 $8.00 $6.00 Millions 0.8 0.6 0.4 $4.00 $2.00 $0 2013 3q 0.2 2015 2q 2015 4q 2016 2q * Includes Under Construction Space 2015 CoStar Group, Inc. The CoStar Industrial Report 13

San Francisco First Quarter 2015 Leasing Activity Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2015 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 505-595 Penobscot Dr Redwood City-Port 48,817 1st Guardant Health, Inc. JLL Newmark Cornish & Carey 2 333 Hatch Dr Foster City/Redwood Shrs 33,228 1st N/A N/A Coldwell Banker Cmcl/West Bay RE Cm 3 280 Valley Dr Brisbane/Daly City 31,745 1st Vieux Vin, Inc. CBRE CBRE 4 Menlo Business Park - Bldgs 5 & 6 Menlo Park-East/EPA 31,280 1st Personalis, Inc. N/A Kidder Mathews 5 1409 Industrial Rd* San Carlos 30,000 1st Habitat for Humanity Direct Deal Direct Deal 6 826 Burlway Rd Burlingame-Old Bayshore 24,630 1st San Francisco Opera CBRE SC Properties 7 125 Shoreway Rd San Carlos 24,000 1st N/A N/A JLL 8 1100-1190 Hamilton Ct Menlo Park-East/EPA 22,351 1st N/A N/A DTZ 9 75 Industrial St Potrero East of 101 Fwy 22,000 1st American Leasing Direct Deal Calco Commercial, Inc. 10 826 Burlway Rd Burlingame-Old Bayshore 20,265 1st Crane & Canopy SC Properties SC Properties 11 826 Burlway Rd Burlingame-Old Bayshore 15,970 1st Allegro CBRE SC Properties 12 270 Little eld Ave South SF East of 101 Fwy 15,500 1st N/A N/A CBRE 13 500 3rd St Lower South of Market 15,259 1st N/A N/A Cushman & Wake eld, Inc. 14 1345 Howard St* South of Market 14,367 1st Kelly Paper Touchstone Commercial Partners Touchstone Commercial Partners 15 888 Industrial Rd* San Carlos 13,500 1st Sutro Biopharma Kidder Mathews Newmark Cornish & Carey 16 310-360 Florida St Potrero West of 101 Fwy 12,401 1st N/A N/A Starboard TCN Worldwide Real Estate 17 1250 17th St Showplace Square 12,281 1st N/A N/A Colliers International 18 1626 Rollins Rd Burlingame-West of 101 11,878 1st N/A N/A Coldwell Banker Cmcl/West Bay RE Cm 19 500 3rd St Lower South of Market 11,441 1st N/A N/A JLL 20 330 Shaw Rd South SF West of 101 Fwy 11,000 1st N/A N/A Sequoia Realty Services 21 455 Toland St Potrero East of 101 Fwy 10,500 1st N/A N/A Direct Deal 22 1098 San Mateo Ave South SF West of 101 Fwy 10,309 1st N/A N/A Kidder Mathews 23 830 2nd Ave Redwood City-S of 84 Fwy 10,100 1st AutoVino Colliers International Kidder Mathews 24 150 S Linden Ave South SF West of 101 Fwy 10,016 1st Proper Food HC&M Commercial Properties, Inc. Colliers International 25 2532 Pulgas Ave Menlo Park-East/EPA 10,000 1st N/A N/A DTZ 26 1240 Fitzgerald Ave Bayview/Hunters Point 10,000 1st Sidekick Touchstone Commercial Partners Touchstone Commercial Partners 27 375-377 Oyster Point Blvd South SF East of 101 Fwy 9,600 1st N/A N/A DTZ 28 500 3rd St Lower South of Market 8,253 1st N/A N/A Cushman & Wake eld, Inc. 29 408 N Canal St South SF West of 101 Fwy 8,250 1st N/A Colliers International Colliers International 30 863 Mitten Rd Burlingame-Old Bayshore 8,138 1st N/A N/A JLL 31 174 14th St Potrero West of 101 Fwy 8,000 1st N/A N/A DTZ 32 201-399 Mendell St India Basin 7,500 1st N/A N/A Touchstone Commercial Partners 33 81 Lafayette St South of Market 7,400 1st N/A N/A HC&M Commercial Properties, Inc. 34 438 Treat Ave Potrero West of 101 Fwy 6,800 1st N/A Kidder Mathews TRI Commercial / CORFAC Int l 35 135 10th St South of Market 6,740 1st N/A N/A DTZ 36 455 Toland St Potrero East of 101 Fwy 6,700 1st Geary Complete Line of Groceries N/A Direct Deal 37 2505 Mariposa St Potrero West of 101 Fwy 6,700 1st N/A N/A Touchstone Commercial Partners 38 1551 Bancroft Ave Bayview/Hunters Point 6,500 1st N/A N/A HC&M Commercial Properties, Inc. 39 75 Shoreway Rd San Carlos 6,351 1st N/A N/A JLL 40 1 Dorman Ave Potrero East of 101 Fwy 5,835 1st N/A N/A Calco Commercial, Inc. * Renewal 14 The CoStar Industrial Report 2015 CoStar Group, Inc.

Sales Activity First Quarter 2015 San Francisco The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 12.0% Cap Rate Price/SF $600 1% $500 Cap Rate Percentage 8.0% 6.0% 4.0% 2.0% $400 $300 $200 $100 Dollars/SF % 2012 1q 2013 1q 2014 1q $0 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From Jan. 2014 - Dec. 2014 $350 Sales Volume Price/SF $250 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $300 $250 $200 $150 $100 $50 $200 $150 $100 $50 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 114 971,441 $236,003,960 $ 242.94 6.63% 28 1,193,151 $196,938,000 $ 165.06 4.50% 1 103,680 $35,000,000 $ 337.58 - $0 2011 1q 2012 1q 2013 1q 2014 1q $0 >250K SF 1 450,469 $118,350,000 $ 262.73 6.80% Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Industrial Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Industrial Building Sales of 15,000 SF and Larger $250 San Francisco US 1% San Francisco US 9.0% $200 8.0% $150 $100 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% $50 2.0% 1.0% $0 % 2011 1q 2012 1q 2013 1q 2014 1q 2011 1q 2012 1q 2013 1q 2014 1q Source: CoStar COMPS Source: CoStar COMPS 2015 CoStar Group, Inc. The CoStar Industrial Report 15

16 The CoStar Industrial Report 2015 CoStar Group, Inc. San Francisco First Quarter 2015 Sales Activity

S a n M a t e o C e n t r a l C o u n t y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse Deliveries, Absorption & First Quarter 2015 San Francisco 0.250 Delivered SF Absorption SF 7.0% 0.200 0.150 0.100 50 00 (50) (0.100) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Percent Vacant (0.150) 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q 2013 4q 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q % Vacant Space Quoted Rental Rates 0.40 Direct SF Sublet SF $14.50 0.35 $14.00 0.30 0.25 0.20 0.15 Dollars/SF/Year $13.50 $13.00 $12.50 0.10 5 $12.00 0 $11.50 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2015 1q 495 8,209,749 362,130 4.4% (86,737) 0 0 0 0 $14.11 2014 4q 495 8,209,749 275,393 3.4% 55,909 0 0 0 0 $13.65 2014 3q 495 8,209,749 331,302 4.0% (29,139) 0 0 0 0 $12.95 2014 2q 495 8,209,749 302,163 3.7% (801) 0 0 0 0 $12.95 2014 1q 495 8,209,749 301,362 3.7% (21,055) 0 0 0 0 $12.42 2013 4q 495 8,209,749 280,307 3.4% 40,792 0 0 0 0 $12.35 2013 3q 495 8,209,749 321,099 3.9% 134,045 0 0 0 0 $12.34 2013 2q 498 8,258,049 503,444 6.1% (6,074) 1 189,000 0 0 $12.03 2013 1q 497 8,069,049 308,370 3.8% 41,705 0 0 1 189,000 $11.59 2012 4q 497 8,069,049 350,075 4.3% 10,296 0 0 1 189,000 $11.25 2012 3q 497 8,069,049 360,371 4.5% (35,887) 0 0 1 189,000 $11.93 2012 2q 498 8,106,012 361,447 4.5% (1,500) 0 0 1 189,000 $11.89 2012 1q 498 8,106,012 359,947 4.4% 43,004 0 0 0 0 $11.58 2011 4q 499 8,151,114 448,053 5.5% (20,149) 0 0 0 0 $11.38 2011 3q 500 8,164,485 441,275 5.4% 98,532 0 0 0 0 $11.09 2011 2q 500 8,164,485 539,807 6.6% 19,987 0 0 0 0 $11.11 2015 CoStar Group, Inc. The CoStar Industrial Report 17

San Francisco First Quarter 2015 Deliveries, Absorption & S a n M a t e o N o r t h C o u n t y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse 0.800 Delivered SF Absorption SF 12.0% 0.600 1% 0.400 0.200 00 (0.200) (0.400) 8.0% 6.0% 4.0% 2.0% Percent Vacant (0.600) 2012 1q 2012 2q 2012 3q 2012 4q 2013 1q 2013 2q 2013 3q 2013 4q 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q % Vacant Space Quoted Rental Rates 1.60 Direct SF Sublet SF $13.20 1.40 $13.00 1.20 1.00 0.80 0.60 Dollars/SF/Year $12.80 $12.60 $12.40 $12.20 0.40 $12.00 0.20 $11.80 0 $11.60 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2015 1q 881 26,912,449 859,273 3.2% 93,149 0 0 2 252,593 $12.96 2014 4q 881 26,912,449 952,422 3.5% 31,307 0 0 0 0 $12.77 2014 3q 881 26,912,449 983,729 3.7% (122,361) 0 0 0 0 $12.39 2014 2q 881 26,912,449 861,368 3.2% 564,287 0 0 0 0 $12.34 2014 1q 881 26,912,449 1,425,655 5.3% 35,254 0 0 0 0 $12.16 2013 4q 882 26,974,559 1,523,019 5.6% 311,945 0 0 0 0 $12.21 2013 3q 883 27,012,559 1,872,964 6.9% 27,582 0 0 0 0 $11.64 2013 2q 883 27,012,559 1,900,546 7.0% 376,041 0 0 0 0 $11.44 2013 1q 883 27,012,559 2,276,587 8.4% 120,307 0 0 0 0 $11.05 2012 4q 884 27,584,472 2,968,807 10.8% (502,868) 0 0 0 0 $11.14 2012 3q 884 27,584,472 2,465,939 8.9% 106,974 0 0 0 0 $11.11 2012 2q 884 27,584,472 2,572,913 9.3% 88,562 0 0 0 0 $11.34 2012 1q 884 27,584,472 2,661,475 9.6% (55,794) 0 0 0 0 $11.38 2011 4q 884 27,584,472 2,605,681 9.4% 79,225 0 0 0 0 $11.30 2011 3q 884 27,584,472 2,684,906 9.7% (263,564) 0 0 0 0 $11.48 2011 2q 884 27,584,472 2,421,342 8.8% 79,995 0 0 0 0 $11.02 18 The CoStar Industrial Report 2015 CoStar Group, Inc.