The CoStar Industrial Report. T h i r d Q u a r t e r San Francisco Industrial Market

The CoStar Industrial Report T h i r d Q u a r t e r 2 0 1 5

Third 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 Third 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.

Third 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 Third 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 Third Quarter 2015 San Francisco San Francisco s Increases to 3.6% Net Absorption Negative (517,362) SF in the Quarter The San Francisco Industrial market ended the third quarter 2015 with a vacancy rate of 3.6%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (517,362) square feet in the third quarter. Vacant sublease space decreased in the quarter, ending the quarter at 337,738 square feet. Rental rates ended the third quarter at $17.82, an increase over the previous quarter. There was 293,100 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall San Francisco Industrial market was negative (517,362) square feet in the third quarter 2015. That compares to positive 89,907 square feet in the second quarter 2015, positive 111,275 square feet in the first quarter 2015, and positive 255,214 square feet in the fourth quarter 2014. Tenants moving out of large blocks of space in 2015 include: Nippon Express U.S.A. moving out of (188,000) square feet at 250 Utah Ave, Tyco Electronics moving out of (184,462) square feet at 300 Constitution Dr, and Hajoca Corporation moving out of (40,000) square feet at 1111 Connecticut St. Tenants moving into large blocks of space in 2015 include: Green Leaf moving into 105,600 square feet at 455 Valley Dr, Invitae Corporation moving into 103,213 square feet at 1400 16th St, and Flying Food Group moving into 69,500 square feet at 240 Littlefield Ave. The Flex building market recorded net absorption of positive 26,642 square feet in the third quarter 2015, compared to positive 203,145 square feet in the second quarter 2015, positive 104,924 in the first quarter 2015, and positive 114,780 in the fourth quarter 2014. The Warehouse building market recorded net absorption of negative (544,004) square feet in the third quarter 2015 compared to negative (113,238) square feet in the second quarter 2015, positive 6,351 in the first quarter 2015, and positive 140,434 in the fourth quarter 2014. The Industrial vacancy rate in the San Francisco market area increased to 3.6% at the end of the third quarter 2015. The vacancy rate was 3.2% at the end of the second quarter 2015, and remained at 3.7% at the end of the first quarter 2015 compared to the previous quarter. Flex projects reported a vacancy rate of 3.9% at the end of the third quarter 2015, 4.0% at the end of the second quarter 2015, 5.0% at the end of the first quarter 2015, and 5.4% at the end of the fourth quarter 2014. Warehouse projects reported a vacancy rate of 3.5% at the end of the third quarter 2015, 3.0% at the end of second quarter 2015, 3.3% at the end of the first quarter 2015, and 3.1% at the end of the fourth quarter 2014. Largest Lease Signings The largest lease signings occurring in 2015 included: the 180,000-square-foot lease signed by Pacific Biosciences at 1315 O Brien Dr in the San Mateo South County market; the 103,213- square-foot deal signed by Invitae Corporation at 1400 16th St in the SF Downtown South market; and the 87,262-square-foot Rates by Building Type 1997-2015 20% Flex Warehouse Total Market 18% 16% 14% Rate 12% 10% 8% 6% 4% 2% 0% 1999 4q 2000 4q 2001 4q 2002 4q 2003 4q 2004 4q 2005 4q 2006 4q 2007 4q 2008 4q 2009 4q 2010 4q 2011 4q 2012 4q 2013 4q 2014 4q 2015 CoStar Group, Inc. The CoStar Industrial Report 1

San Francisco Third Quarter 2015 Overview lease signed by Carbon3D, Inc. at 1086 Mills Way in the San Mateo South County market. Sublease The amount of vacant sublease space in the San Francisco market decreased to 337,738 square feet by the end of the third quarter 2015, from 339,249 square feet at the end of the second quarter 2015. There was 333,754 square feet vacant at the end of the first quarter 2015 and 285,144 square feet at the end of the fourth quarter 2014. San Francisco s Flex projects reported vacant sublease space of 159,239 square feet at the end of third quarter 2015, down from the 164,850 square feet reported at the end of the second quarter 2015. There were 186,108 square feet of sublease space vacant at the end of the first quarter 2015, and 208,699 square feet at the end of the fourth quarter 2014. Warehouse projects reported increased vacant sublease space from the second quarter 2015 to the third quarter 2015. Sublease vacancy went from 174,399 square feet to 178,499 square feet during that time. There was 147,646 square feet at the end of the first quarter 2015, and 76,445 square feet at the end of the fourth quarter 2014. Rental Rates The average quoted asking rental rate for available Industrial space was $17.82 per square foot per year at the end of the third quarter 2015 in the San Francisco market area. This represented a 1.7% increase in quoted rental rates from the end of the second quarter 2015, when rents were reported at $17.52 per square foot. The average quoted rate within the Flex sector was $28.42 per square foot at the end of the third quarter 2015, while Warehouse rates stood at $13.76. At the end of the second quarter 2015, Flex rates were $28.53 per square foot, and Warehouse rates were $13.03. U.S. Comparison Past 8 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 third quarter 2015, no new space was completed in the San Francisco market area. This compares to 0 buildings completed in the second quarter 2015, three buildings totaling 118,080 square feet completed in the first quarter 2015, and nothing completed in the fourth quarter 2014. There were 293,100 square feet of Industrial space under construction at the end of the third 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, and 1 Kelly Ct, a 25,600- square-foot building that delivered in first quarter 2015 and is now 100% occupied. The largest projects underway at the end of third quarter 2015 were The Cove - Building 3, a 153,047-square-foot building with 0% of its space pre-leased, and The Cove - Building 4, a 140,053-square-foot facility that is 0% pre-leased. Inventory Total Industrial inventory in the San Francisco market area amounted to 94,065,666 square feet in 4,812 buildings as of the end of the third quarter 2015. The Flex sector consisted of 23,919,746 square feet in 791 projects. The Warehouse sector consisted of 70,145,920 square feet in 4,021 buildings. Within the Industrial market there were 520 owner-occupied buildings accounting for 12,959,398 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 second quarter 2015 in terms of dollar volume compared to the first quarter of 2015. In the second quarter, 11 industrial transactions closed with a total volume of $88,245,000. The 11 buildings totaled 423,420 square feet and the average price per square foot equated to $208.41 per square foot. That compares to 17 transactions totaling $180,790,000 in the first quarter. The total square footage was 870,221 for an average price per square foot of $207.75. Total year-to-date industrial building sales activity in 2015 is down compared to the previous year. In the first six months of 2015, the market saw 28 industrial sales transactions with a total volume of $269,035,000. The price per square foot has averaged $207.97 this year. In the first six months of 2014, the market posted 30 transactions with a total volume of $275,279,100. The price per square foot averaged $211.04. Cap rates have been lower in 2015, averaging 4.34%, compared to the first six months of last year when they averaged 6.58%. 1.0% % 2013 2q 2013 4q 2014 2q 2014 4q 2 The CoStar Industrial Report 2015 CoStar Group, Inc.

Overview Third 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 industrial building sold for $42,000,000, or $463.39 per square foot. The property sold on 2/13/2015, at a 2.55% cap rate. Absorption & Deliveries Past 9 Quarters Net Absorption Deliveries 1.2 1.0 1.0 0.8 Reports compiled by: Espie Tuthill, Research Manager; and Noel Bigay, Research Associate. 0.6 0.4 0.2 (0.2) 0.1 0.5 0.3 0.1 () 0.1 0.1 0.1 (0.4) (0.6) (0.5) 2013 3q 2015 CoStar Group, Inc. The CoStar Industrial Report 3

San Francisco Third 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 Third Quarter 2015 San Francisco Historical Deliveries 1982-2015 1.8 1.6 Deliveries Average Delivered SF 1.6 1.4 1.4 Millions of SF 1.2 1.0 0.8 0.6 0.4 0.2 1.0 1.0 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 2 293,100 0 % 30,654 146,550 San Mateo West County 0 0 0 % 5,599 0 San Mateo Central County 0 0 0 % 16,455 0 San Mateo South County 0 0 0 % 16,991 0 SF Downtown Core 0 0 0 % 10,219 0 SF Downtown North 0 0 0 % 67,629 0 SF Downtown South 0 0 0 % 14,221 0 SF Downtown West 0 0 0 % 8,437 0 SF Outer Areas 0 0 0 % 11,230 0 SF Southeast 0 0 0 % 21,445 0 Totals 2 293,100 0 % 19,548 146,550 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 Third Quarter 2015 Inventory & development Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.4 Construction Starts Deliveries 0.3 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 2 35,600 35,600 10% $0 25,600 10,000 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 8% 0% 75% 25% 44% 56% 92% 100% Multi Single Multi Single Flex Warehouse Multi Single 6 The CoStar Industrial Report 2015 CoStar Group, Inc.

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

San Francisco Third Quarter 2015 Figures at a Glance Flex Market Statistics Third 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 2,617,945 53,214 64,048 2.4% 26,193 0 0 $21.27 San Mateo North County 98 4,183,791 25,195 119,782 2.9% 110,485 0 293,100 $24.31 San Mateo South County 231 7,479,550 278,033 287,255 3.8% 330,464 25,600 0 $22.09 San Mateo West County 5 26,600 0 0 % 0 0 0 $0 SF Downtown Core 7 85,988 0 0 % 0 0 0 $0 SF Downtown North 4 428,572 0 26,600 6.2% 0 0 0 $48.00 SF Downtown South 201 4,246,456 241,519 251,265 5.9% (27,827) 0 0 $46.65 SF Downtown West 43 415,869 43,189 43,189 10.4% (19,956) 0 0 $49 SF Outer Areas 24 432,078 9,100 9,100 2.1% (9,100) 0 0 $28.29 SF Southeast 75 4,002,897 122,936 131,186 3.3% (75,548) 0 0 $32.69 Totals 791 23,919,746 773,186 932,425 3.9% 334,711 25,600 293,100 $28.42 Warehouse Market Statistics Third 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 389 5,477,784 149,813 149,813 2.7% 34,539 0 0 $13.91 San Mateo North County 776 22,607,871 929,452 1,041,235 4.6% (518,062) 0 0 $10.86 San Mateo South County 1,003 13,487,137 371,862 371,862 2.8% (106,668) 10,000 0 $15.02 San Mateo West County 69 387,742 0 0 % 7,560 0 0 $12.48 SF Downtown Core 4 26,426 0 0 % 0 0 0 $0 SF Downtown North 15 856,372 0 0 % 0 0 0 $12.00 SF Downtown South 474 5,352,529 99,105 99,105 1.9% (122,767) 0 0 $30.83 SF Downtown West 117 934,106 3,500 5,076 0.5% (3,500) 0 0 $32.34 SF Outer Areas 157 1,600,611 47,973 47,973 3.0% 39,417 0 0 $21.67 SF Southeast 1,017 19,415,342 649,529 714,669 3.7% 18,590 82,480 0 $15.64 Totals 4,021 70,145,920 2,251,234 2,429,733 3.5% (650,891) 92,480 0 $13.76 Total Industrial Market Statistics Third 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 492 8,095,729 203,027 213,861 2.6% 60,732 0 0 $15.49 San Mateo North County 874 26,791,662 954,647 1,161,017 4.3% (407,577) 0 293,100 $13.23 San Mateo South County 1,234 20,966,687 649,895 659,117 3.1% 223,796 35,600 0 $18.85 San Mateo West County 74 414,342 0 0 % 7,560 0 0 $12.48 SF Downtown Core 11 112,414 0 0 % 0 0 0 $0 SF Downtown North 19 1,284,944 0 26,600 2.1% 0 0 0 $19.58 SF Downtown South 675 9,598,985 340,624 350,370 3.7% (150,594) 0 0 $40.12 SF Downtown West 160 1,349,975 46,689 48,265 3.6% (23,456) 0 0 $36.98 SF Outer Areas 181 2,032,689 57,073 57,073 2.8% 30,317 0 0 $22.91 SF Southeast 1,092 23,418,239 772,465 845,855 3.6% (56,958) 82,480 0 $17.24 Totals 4,812 94,065,666 3,024,420 3,362,158 3.6% (316,180) 118,080 293,100 $17.82 8 The CoStar Industrial Report 2015 CoStar Group, Inc.

Figures at a Glance Third Quarter 2015 San Francisco Flex Submarket Statistics Third 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 71,838 71,838 8.5% (57,920) 0 0 $17.37 Belmont 20 642,286 1,210 1,210 0.2% 25,375 0 0 $18.84 Brisbane/Daly City 7 253,963 0 0 % 1,680 0 0 $16.20 Burlingame-Airport B. 6 127,771 25,000 25,000 19.6% 0 0 0 $21.00 Burlingame-Old Baysh. 22 436,331 14,169 25,003 5.7% 7,590 0 0 $20.59 Burlingame-West of 1. 17 536,665 5,267 5,267 1.0% 0 0 0 $0 Chinatown/Nob Hill 3 30,755 10,800 10,800 35.1% (10,800) 0 0 $36.00 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 1,314,799 778 778 0.1% 21,153 0 0 $24.00 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. 52 917,304 33,771 38,117 4.2% (39,760) 0 0 $54.65 Menlo Park-Atherton 3 67,955 0 0 % 0 0 0 $0 Menlo Park-East/EPA 65 3,365,518 125,771 134,993 4.0% 105,779 25,600 0 $21.36 MidMarket 12 339,618 15,048 15,048 4.4% (15,048) 0 0 $55.00 Mission Bay/China Ba. 13 1,632,187 2,550 10,800 0.7% (10,800) 0 0 $28.10 Pacifica 0 0 0 0 % 0 0 0 $0 Potrero East of 101. 14 349,717 11,857 11,857 3.4% (5) 0 0 $25 Potrero West of 101. 26 955,422 36,691 36,691 3.8% (12,463) 0 0 $53.29 Redwood City-N of 84. 18 175,551 1,885 1,885 1.1% 60,984 0 0 $31.02 Redwood City-Port 35 1,222,105 54,680 54,680 4.5% 87,721 0 0 $26.76 Redwood City-S of 84. 40 724,763 8,100 8,100 1.1% 20,000 0 0 $17.40 Rincon/South Beach 28 1,120,328 116,623 116,623 10.4% 48,874 0 0 $47.00 San Bruno/Millbrae 8 161,259 0 0 % 0 0 0 $11.88 San Carlos 50 1,281,372 86,387 86,387 6.7% 30,605 0 0 $19.00 San Mateo-Corridor/H. 3 44,820 0 0 % 0 0 0 $0 San Mateo-Downtown N. 12 107,559 8,000 8,000 7.4% (2,550) 0 0 $18.00 San Mateo-Downtown S. 1 50,000 0 0 % 0 0 0 $0 Showplace Square 25 988,452 13,948 13,948 1.4% 3,884 0 0 $44.37 South Financial Dist. 7 85,988 0 0 % 0 0 0 $0 South of Market 84 880,754 62,129 67,529 7.7% (25,777) 0 0 $40.25 South SF East of 101. 62 3,327,957 12,136 106,723 3.2% 90,488 0 293,100 $27.21 South SF West of 101. 21 440,612 13,059 13,059 3.0% 18,317 0 0 $14.16 Southern City 12 265,395 5,400 5,400 2.0% (5,400) 0 0 $28.29 Van Ness Corridor 4 65,700 0 0 % 0 0 0 $0 Waterfront/North Bea. 4 428,572 0 26,600 6.2% 0 0 0 $48.00 West of Van Ness 12 166,683 3,700 3,700 2.2% (3,700) 0 0 $0 Yerba Buena 36 319,414 32,389 32,389 10.1% (9,156) 0 0 $41.70 Totals 791 23,919,746 773,186 932,425 3.9% 334,711 25,600 293,100 $28.42 2015 CoStar Group, Inc. The CoStar Industrial Report 9

San Francisco Third Quarter 2015 Figures at a Glance Warehouse Submarket Statistics Third Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Bayview/Hunters Poin. 395 5,760,598 138,568 138,568 2.4% 198,704 82,480 0 $12.73 Belmont 123 1,403,497 26,831 26,831 1.9% 37,517 10,000 0 $11.65 Brisbane/Daly City 163 5,595,300 49,299 49,299 0.9% 106,986 0 0 $9.18 Burlingame-Airport B. 8 150,774 7,942 7,942 5.3% (4,808) 0 0 $15.71 Burlingame-Old Baysh. 47 866,692 31,200 31,200 3.6% 69,165 0 0 $13.36 Burlingame-West of 1. 125 2,883,991 70,566 70,566 2.4% (18,455) 0 0 $14.22 Chinatown/Nob Hill 18 251,080 0 0 % 0 0 0 $0 Civic Center 6 30,367 0 0 % 0 0 0 $36.84 El Granada/Montara 60 285,785 0 0 % 2,370 0 0 $0 Foster City/Redwood. 10 238,791 15,254 15,254 6.4% (12,574) 0 0 $18.00 Half Moon Bay 9 101,957 0 0 % 5,190 0 0 $12.48 India Basin 34 1,284,645 2,900 2,900 0.2% 26,175 0 0 $14.40 Lower South of Marke. 121 1,299,006 28,100 28,100 2.2% (19,800) 0 0 $35.37 Menlo Park-Atherton 3 16,333 0 0 % 0 0 0 $0 Menlo Park-East/EPA 117 2,653,493 106,662 106,662 4.0% (162,062) 0 0 $16.27 MidMarket 16 170,794 0 0 % 8,500 0 0 $21.00 Mission Bay/China Ba. 146 3,485,996 237,119 269,389 7.7% (192,189) 0 0 $19.56 Pacifica 20 134,713 0 0 % 1,120 0 0 $0 Potrero East of 101. 245 5,647,172 217,890 250,760 4.4% (18,135) 0 0 $13.14 Potrero West of 101. 197 3,236,931 53,052 53,052 1.6% 4,035 0 0 $23.56 Redwood City-N of 84. 97 1,129,417 2,000 2,000 0.2% 29,750 0 0 $14.56 Redwood City-Port 32 601,645 0 0 % 0 0 0 $10 Redwood City-S of 84. 321 3,010,150 103,032 103,032 3.4% 32,166 0 0 $13.15 Rincon/South Beach 23 307,462 12,000 12,000 3.9% (7,245) 0 0 $0 San Bruno/Millbrae 105 755,474 3,700 3,700 0.5% (1,200) 0 0 $0 San Carlos 310 4,672,602 133,337 133,337 2.9% (44,039) 0 0 $17.85 San Mateo-Corridor/H. 37 288,659 5,675 5,675 2.0% (1,375) 0 0 $15.36 San Mateo-Downtown N. 151 983,331 19,176 19,176 2.0% 2,586 0 0 $10.81 San Mateo-Downtown S. 11 65,546 0 0 % 0 0 0 $0 Showplace Square 72 1,456,195 23,255 23,255 1.6% (82,822) 0 0 $28.87 South Financial Dist. 4 26,426 0 0 % 0 0 0 $0 South of Market 242 2,119,072 35,750 35,750 1.7% (21,400) 0 0 $32.77 South SF East of 101. 228 9,171,846 766,377 850,160 9.3% (651,483) 0 0 $11.12 South SF West of 101. 260 6,950,538 110,076 138,076 2.0% 26,515 0 0 $11.41 Southern City 101 973,877 14,024 14,024 1.4% (7,872) 0 0 $21.67 Van Ness Corridor 22 200,358 0 0 % 0 0 0 $36.00 Waterfront/North Bea. 15 856,372 0 0 % 0 0 0 $12.00 West of Van Ness 56 626,734 33,949 33,949 5.4% 47,289 0 0 $0 Yerba Buena 71 452,301 3,500 5,076 1.1% (3,500) 0 0 $12.00 Totals 4,021 70,145,920 2,251,234 2,429,733 3.5% (650,891) 92,480 0 $13.76 10 The CoStar Industrial Report 2015 CoStar Group, Inc.

Figures at a Glance Third Quarter 2015 San Francisco Total Industrial Submarket Statistics Third Quarter 2015 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Bayview/Hunters Poin. 412 6,605,427 210,406 210,406 3.2% 140,784 82,480 0 $13.28 Belmont 143 2,045,783 28,041 28,041 1.4% 62,892 10,000 0 $14.97 Brisbane/Daly City 170 5,849,263 49,299 49,299 0.8% 108,666 0 0 $10.38 Burlingame-Airport B. 14 278,545 32,942 32,942 11.8% (4,808) 0 0 $18.89 Burlingame-Old Baysh. 69 1,303,023 45,369 56,203 4.3% 76,755 0 0 $14.47 Burlingame-West of 1. 142 3,420,656 75,833 75,833 2.2% (18,455) 0 0 $14.22 Chinatown/Nob Hill 21 281,835 10,800 10,800 3.8% (10,800) 0 0 $36.00 Civic Center 6 30,367 0 0 % 0 0 0 $36.84 El Granada/Montara 64 307,705 0 0 % 2,370 0 0 $0 Foster City/Redwood. 52 1,553,590 16,032 16,032 1.0% 8,579 0 0 $21.05 Half Moon Bay 10 106,637 0 0 % 5,190 0 0 $12.48 India Basin 39 1,505,387 2,900 2,900 0.2% 31,815 0 0 $14.95 Lower South of Marke. 173 2,216,310 61,871 66,217 3.0% (59,560) 0 0 $48.33 Menlo Park-Atherton 6 84,288 0 0 % 0 0 0 $0 Menlo Park-East/EPA 182 6,019,011 232,433 241,655 4.0% (56,283) 25,600 0 $19.41 MidMarket 28 510,412 15,048 15,048 2.9% (6,548) 0 0 $42.73 Mission Bay/China Ba. 159 5,118,183 239,669 280,189 5.5% (202,989) 0 0 $19.89 Pacifica 20 134,713 0 0 % 1,120 0 0 $0 Potrero East of 101. 259 5,996,889 229,747 262,617 4.4% (18,140) 0 0 $13.51 Potrero West of 101. 223 4,192,353 89,743 89,743 2.1% (8,428) 0 0 $29.77 Redwood City-N of 84. 115 1,304,968 3,885 3,885 0.3% 90,734 0 0 $22.89 Redwood City-Port 67 1,823,750 54,680 54,680 3.0% 87,721 0 0 $22.95 Redwood City-S of 84. 361 3,734,913 111,132 111,132 3.0% 52,166 0 0 $14.61 Rincon/South Beach 51 1,427,790 128,623 128,623 9.0% 41,629 0 0 $47.00 San Bruno/Millbrae 113 916,733 3,700 3,700 0.4% (1,200) 0 0 $11.88 San Carlos 360 5,953,974 219,724 219,724 3.7% (13,434) 0 0 $18.36 San Mateo-Corridor/H. 40 333,479 5,675 5,675 1.7% (1,375) 0 0 $15.36 San Mateo-Downtown N. 163 1,090,890 27,176 27,176 2.5% 36 0 0 $13.12 San Mateo-Downtown S. 12 115,546 0 0 % 0 0 0 $0 Showplace Square 97 2,444,647 37,203 37,203 1.5% (78,938) 0 0 $31.14 South Financial Dist. 11 112,414 0 0 % 0 0 0 $0 South of Market 326 2,999,826 97,879 103,279 3.4% (47,177) 0 0 $37.67 South SF East of 101. 290 12,499,803 778,513 956,883 7.7% (560,995) 0 293,100 $14.39 South SF West of 101. 281 7,391,150 123,135 151,135 2.0% 44,832 0 0 $11.57 Southern City 113 1,239,272 19,424 19,424 1.6% (13,272) 0 0 $22.91 Van Ness Corridor 26 266,058 0 0 % 0 0 0 $36.00 Waterfront/North Bea. 19 1,284,944 0 26,600 2.1% 0 0 0 $19.58 West of Van Ness 68 793,417 37,649 37,649 4.7% 43,589 0 0 $0 Yerba Buena 107 771,715 35,889 37,465 4.9% (12,656) 0 0 $37.92 Totals 4,812 94,065,666 3,024,420 3,362,158 3.6% (316,180) 118,080 293,100 $17.82 2015 CoStar Group, Inc. The CoStar Industrial Report 11

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

Leasing Activity Third Quarter 2015 San Francisco Historical Rental Rates Based on Quoted Rental Rates $50 Flex Warehouse Total Market $45.00 $40 Dollars/SF/Year $35.00 $30 $25.00 $20 $15.00 $10 $5.00 $0 1999 4q 2001 4q 2003 4q 2005 4q 2007 4q 2009 4q 2011 4q 2013 4q 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 10% 6% 72% 28% 17% 83% 90% 94% 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* $20 $18.00 San Francisco United States 0.9 0.8 0.8 $16.00 0.7 Dollars/SF/Year $14.00 $12.00 $10 $8.00 $6.00 $4.00 Millions 0.6 0.5 0.4 0.3 0.2 0.2 0.1 $2.00 $0 2013 2q 2013 4q 2014 2q 2014 4q 0.1 0.1 0.1 2015 4q 2016 2q 2016 4q * Includes Under Construction Space 2015 CoStar Group, Inc. The CoStar Industrial Report 13

San Francisco Third 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 1315 O Brien Dr Menlo Park-East/EPA 180,000 3rd Paci c Biosciences Newmark Cornish & Carey Kidder Mathews 2 1400 16th St Showplace Square 103,213 3rd Invitae Corporation Newmark Cornish & Carey Colliers International 3 1089 Mills Way Redwood City-S of 84 Fwy 87,262 3rd Carbon3D, Inc. T3 Advisors Colliers International 4 395 Wisconsin St Potrero East of 101 Fwy 54,000 2nd Endurant Systems, Inc. TRI Commercial / CORFAC Int l TRI Commercial / CORFAC Int l 5 1392-1394 Willow Rd* Menlo Park-East/EPA 51,638 3rd Paci c Biosciences of California, Inc. Direct Deal Direct Deal 6 169 Harbor Way South SF East of 101 Fwy 48,972 3rd N/A N/A Kidder Mathews 7 505-595 Penobscot Dr Redwood City-Port 48,817 1st Guardant Health, Inc. JLL Newmark Cornish & Carey 8 340 Bryant St Rincon/South Beach 48,229 3rd N/A N/A CBRE 9 1111 Connecticut St Potrero East of 101 Fwy 44,000 3rd Consolidated Electrical Distributors, Inc. HC&M Commercial Properties, Inc. HC&M Commercial Properties, Inc. 10 240 E Grand Ave South SF East of 101 Fwy 41,631 3rd N/A N/A Kidder Mathews 11 400 Little eld Ave South SF East of 101 Fwy 41,280 2nd Torani N/A Cushman & Wake eld 12 2650 18th St Potrero West of 101 Fwy 34,500 3rd N/A N/A TRI Commercial / CORFAC Int l 13 1815 Rollins Rd Burlingame-West of 101 34,400 2nd Proterra Cushman & Wake eld CBRE 14 333 Hatch Dr Foster City/Redwood Shrs 33,228 1st Norse Corporation Colliers International Coldwell Banker Cmcl/West Bay 15 888 Tennessee St Mission Bay/China Basin 32,270 3rd N/A N/A Cresa 16 280 Valley Dr Brisbane/Daly City 31,745 1st Vieux Vin, Inc. CBRE CBRE 17 1330-1360 O Brien Dr Menlo Park-East/EPA 31,280 1st Personalis, Inc. N/A Kidder Mathews 18 1409 Industrial Rd* San Carlos 30,000 1st Habitat for Humanity Direct Deal Direct Deal 19 229 Little eld Ave South SF East of 101 Fwy 30,000 2nd N/A Cushman & Wake eld CBRE 20 170 Harbor Way* South SF East of 101 Fwy 25,110 3rd Nodality, Inc. Direct Deal Direct Deal 21 826 Burlway Rd Burlingame-Old Bayshore 24,630 1st San Francisco Opera CBRE SC Properties 22 125 Shoreway Rd San Carlos 24,000 1st N/A N/A JLL 23 468 Little eld Ave South SF East of 101 Fwy 23,607 2nd Counsyl N/A Cresa 24 1100-1190 Hamilton Ct Menlo Park-East/EPA 22,351 1st Stanford Health Care N/A Cushman & Wake eld 25 75 Industrial St Potrero East of 101 Fwy 22,000 1st American Leasing Direct Deal Calco Commercial, Inc. 26 75 Boardman Pl Lower South of Market 21,600 3rd N/A N/A HC&M Commercial Properties, Inc. 27 245 Utah Ave* South SF East of 101 Fwy 20,400 3rd CAV Distributing Corporation Direct Deal Calco Commercial, Inc. 28 826 Burlway Rd Burlingame-Old Bayshore 20,265 1st Crane & Canopy SC Properties SC Properties 29 3700 Haven Ct Menlo Park-East/EPA 19,890 2nd N/A N/A Newmark Cornish & Carey 30 425 Brannan St Lower South of Market 19,600 2nd Capgemini JLL Wolfe & Associates 31 505-595 Penobscot Dr Redwood City-Port 18,512 2nd Bavarian Nordic N/A Newmark Cornish & Carey 32 301 Toland St Potrero East of 101 Fwy 18,240 1st Discount Builders Calco Commercial, Inc. Calco Commercial, Inc. 33 1040 Bryant St South of Market 18,189 3rd N/A N/A HC&M Commercial Properties, Inc. 34 267 8th St South of Market 17,042 3rd Webpass N/A HC&M Commercial Properties, Inc. 35 229 Little eld Ave South SF East of 101 Fwy 16,865 2nd N/A N/A CBRE 36 826 Burlway Rd Burlingame-Old Bayshore 15,970 1st Allegro CBRE SC Properties 37 1525 Cortland Ave Southern City 15,820 2nd Barebottle Brewing Company TRI Commercial / CORFAC Int l TRI Commercial / CORFAC Int l 38 270 Little eld Ave South SF East of 101 Fwy 15,500 1st N/A N/A CBRE 39 500-520 3rd St Lower South of Market 15,259 1st N/A N/A Cushman & Wake eld 40 1360 O Brien Dr Menlo Park-East/EPA 14,710 3rd CardioKinetix JLL Kidder Mathews * Renewal 14 The CoStar Industrial Report 2015 CoStar Group, Inc.

Sales Activity Third Quarter 2015 San Francisco The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 7.0% Cap Rate Price/SF $590 Cap Rate Percentage 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% $540 $490 $440 $390 $340 $290 $240 $190 Dollars/SF % 2012 3q 2013 3q 2014 3q $140 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 July 2014 - June 2015 $200 Sales Volume Price/SF $250 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $180 $160 $140 $120 $100 $80 $60 $40 $200 $150 $100 $50 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 122 948,723 $263,545,400 $ 277.79 5.29% 29 1,270,984 $239,468,500 $ 188.41 4.34% 4 592,504 $114,852,500 $ 193.84 - $20 $0 2012 1q 2013 1q 2014 1q 2015 1q $0 >250K SF 0 0 $0 $ - - 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 $240 San Francisco US 8.0% San Francisco US $220 7.0% $200 $180 $160 $140 Cap Rate Percentage 6.0% 5.0% 4.0% 3.0% 2.0% $120 1.0% $100 % 2012 1q 2013 1q 2014 1q 2015 1q 2012 1q 2013 1q 2014 1q 2015 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 Third 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 & Third Quarter 2015 San Francisco 0.250 Delivered SF Absorption SF 7.0% 0.200 6.0% 0.150 0.100 50 00 5.0% 4.0% 3.0% 2.0% 1.0% Percent Vacant (50) 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 2015 2q 2015 3q % Vacant Space Quoted Rental Rates 0.35 0.30 Direct SF Sublet SF $18.00 $16.00 $14.00 0.25 0.20 0.15 0.10 Dollars/SF/Year $12.00 $10 $8.00 $6.00 $4.00 5 $2.00 0 $0 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2015 3q 492 8,095,729 213,861 2.6% 1,643 0 0 0 0 $15.49 2015 2q 492 8,095,729 215,504 2.7% 65,711 0 0 0 0 $15.12 2015 1q 492 8,095,729 281,215 3.5% (6,622) 0 0 0 0 $14.28 2014 4q 492 8,095,729 274,593 3.4% 56,709 0 0 0 0 $13.80 2014 3q 492 8,095,729 331,302 4.1% (29,139) 0 0 0 0 $13.54 2014 2q 492 8,095,729 302,163 3.7% (801) 0 0 0 0 $13.01 2014 1q 492 8,095,729 301,362 3.7% (21,055) 0 0 0 0 $12.48 2013 4q 492 8,095,729 280,307 3.5% 27,333 0 0 0 0 $12.41 2013 3q 492 8,095,729 307,640 3.8% 147,504 0 0 0 0 $12.40 2013 2q 495 8,144,029 503,444 6.2% (6,074) 1 189,000 0 0 $12.08 2013 1q 494 7,955,029 308,370 3.9% 41,705 0 0 1 189,000 $11.63 2012 4q 494 7,955,029 350,075 4.4% 10,296 0 0 1 189,000 $11.25 2012 3q 494 7,955,029 360,371 4.5% (35,887) 0 0 1 189,000 $11.93 2012 2q 495 7,991,992 361,447 4.5% (4,700) 0 0 1 189,000 $11.89 2012 1q 495 7,991,992 356,747 4.5% 43,004 0 0 0 0 $11.58 2011 4q 496 8,037,094 444,853 5.5% (20,149) 0 0 0 0 $11.38 2015 CoStar Group, Inc. The CoStar Industrial Report 17