Tri-Cities Sees Increased Leasing Activity and Climbing Rents

OFFICE TRI-CITIES MARKET REPORT Tri-Cities Sees Increased Leasing Activity and Climbing Rents MARKET OVERVIEW MARKET INDICATORS - The Tri-Cities office market recorded 165, square feet () of positive absorption for first quarter 215 and a 9 basis point decrease in total vacancy rate. The total vacancy rate decreased to 16.% from 16.9% one quarter ago. Direct weighted average asking rents increased to $2.72 per square foot (P), per month full service gross (FSG) compared to $2.66 P FSG last quarter. VACANCY 16.% NET ABSORPTION 165, CONSTRUCTION 1,29,265 RENTAL RATE $2.72 P UNEMPLOYMENT 7.8% New leasing activity was 875,615 in first quarter, of which a majority was the sale leaseback of the Dreamworks Campus. This also doubled as biggest sale deal of the quarter, with SunTrust Equity Funding picking up the property, consisting of 396,544 over 5 buildings, for $185M ($467 P) from the struggling studio. Laurus Corporation acquired 199 S Los Robles Ave. in Pasadena, a 163,234 Class A office building, for $322 P from Heitman, LLC. In Burbank, 3D Capital, LLC acquired 33 W Riverside Dr, a 55,55 Class B office building from Centurion Real Estate Partners. The property is fully occupied by New York Fim Academy on a 14 year modified gross (MG) lease. MARKET TRENDS - HISTORICAL VACANCY VS RENTS Tri-Cities County Office Market HISTORICAL NET ABSORPTION & CONSTRUCTION COMPLETIONS Q1 211 - Tri-Cities Office Market - Q1 211 - >> Total vacancy rate decreases 9 nnnbasis points nnn $3. RENTS VACANCY 25% 5, NET ABSORPTION CONSTRUCTION COMPLETIONS >> Weighted average asking rental rate increased to $2.72 P >> New leasing activity at 875,615 >> Net absorption was positive at 165, $ P PER MONTH (WEIGHTED) $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 1Q11 1Q12 1Q13 1Q14 1Q15 2% 15% 1% 5% % % VACANT (TOTAL) 4, 3, 2, () (2,) (3,) (4,) (5,) 1Q11 1Q12 1Q13 1Q14 1Q15 1 Colliers International continuously refines its database. As a result, data reflected in this report may not be consistent with data reported in previous quarters. www.colliers.com/losangeles

MARKET REPORT OFFICE TRI CITIES VACANCY The total vacancy rate, including sublet space decreased to 16.%, down 9 basis points from 16.9% reported last quarter. A longer historical perspective of the total vacancy rate shows that the vacancy rate year ago stood at 19.4%, its highest point in the last 4 years, and has decreased every quarter thereafter. move-ins were as follows: Art Center College of Design moved into 89,74 at 1111 S Arroyo Parkway in Pasadena and Imagine Communications Corp. moved into 17,928 at 34 W Olive Ave in Burbank. Monrovia, Burbank, and Arcadia posted neutral or negative figures for the first quarter, with 5,5, -17,9 and -23,2 respectively. LOS ANGELES DEMOGRAPHICS >> POPULATION: 1,136,59 (215 Estimate) 1,51,281 (22 Projection) 3.69% (Growth 215-22) >> HOUSEHOLD INCOME: $78,39 (Average) $54,514 (Median) >> JOB GROWTH: 2.4% (past 12 months) >> UNEMPLOYMENT RATE: 7.8% (as of February 215) The Monrovia submarket continued to register the the highest vacancy rate in the market (22.9%) which is a residual effect from City of Hope moving to Irwindale last quarter. The submarket with the lowest vacancy in first quarter was Pasadena at 14.8%. A comparison by class illustrates that vacancy rates were highest for Class C space (17.7%) and lowest for Class B space (14.8%) with Class A space in-between at 16.3%. NET ABSORPTION Net absorption was positive recording at 165, in the first quarter of 215. The two submarkets that significantly contributed to the positive absorption were Pasadena (153, ) and Glendale (47,6 ). The largest tenant UNEMPLOYMENT February 215 figures for nonfarm employment in Los Angeles County showed a recovering job market. Over the past 12 months, Los Angeles County has gained 11,1 jobs for an increase of 2.4%. This gain in employment led to the unemployment lowering to 7.8% compared to 8.7% one year ago. Year-over-year job gains were most significant in Educational and Health Services (+27,4) and Trade, Transportation, and Utilities (+19,6). VACANCY BY SUBMARKET Tri-Cities Office Market NET ABSORPTION BY SUBMARKET Tri-Cities County Office Market DIRECT VACANCY SUBLEASE VACANCY 18, 25% 16, 14, 153, % VACANT 2% 15% 1% 5% 16.4% 19.1%.1% 15.2% 1.9% 14.9%.% 14.8% 12, 8, 6, 4, 2, 5,5 47,6 % Arcadia Monrovia Pasadena Burbank Glendale (2,) (4,) (23,2) (17,9) Monrovia Arcadia Glendale Pasadena Burbank P. 2 COLLIERS INTERNATIONAL

MARKET REPORT OFFICE TRI CITIES OFFICE OVERVIEW EXISTING PROPERTIES VACANCY ACTIVITY ABSORPTION CONSTRUCTION RENTS Submarket/ Class Bldgs Total Inventory Direct Sublease Total Total Prior Qtr Leasing Activity Current Qtr Leasing Activity YTD Net Absorption Current Qtr Net Absorption YTD Completions Current Qtr Under Construction Weighted Avg Asking Lease Rate BURBANK A 34 6,21,25 15.7% 2.1% 17.8% 17.3% 235,164 235,164 (33,5) (33,5) 884,265 $3.13 B 15 676,912 5.6%.% 5.6% 7.8% 16,141 16,141 14,6 14,6 $2.47 C 3 131,9 23.9%.% 23.9% 24.6% 2,98 2,98 1, 1, $1.89 SUBTOTAL 52 6,83,17 14.9% 1.9% 16.7% 16.5% 254,213 254,213 (17,9) (17,9) $3.7 GLENDALE A 29 5,72,988 14.3%.% 14.4% 16.5% 44,231 44,231 118,2 118,2 $2.49 B 15 86,216 13.2%.% 13.2% 12.5% 3,496 3,496 (6,) (6,) $2.27 C 1 44,278 1.%.% 1.% 1.% $2.25 SUBTOTAL 45 6,571,482 14.8%.% 14.8% 16.6% 443,727 443,727 112,2 112,2 $2.45 PASADENA A 26 4,69,765 14.%.1% 14.% 16.% 87,225 87,225 92,4 92,4 155, $2.97 B 4 3,331,265 17.6%.2% 17.8% 19.7% 14,52 14,52 63,1 63,1 $2.49 C 9 376,445 8.2%.% 8.2% 7.5% 7,824 7,824 (2,5) (2,5) $2.29 SUBTOTAL 75 8,317,475 15.2%.1% 15.3% 17.1% 19,11 19,11 153, 153, 155, $2.67 ARCADIA A 2 12,3 13.7%.% 13.7% 13.7% $2.25 B 4 188,776 2.3%.% 2.3% 8.% 6,45 6,45 (23,2) (23,2) $2.18 C 1 25,.%.%.%.% $1.85 SUBTOTAL 7 334,76 16.4%.% 16.4% 8.8% 6,45 6,45 (23,2) (23,2) $2.2 MONROVIA A 4 46,5 46.9%.% 46.9% 49.8% 38,529 38,529 11,9 11,9 $2.42 B 1 714,93 3.9% 6.1% 1.% 9.1% 24, 24, (6,4) (6,4) $2.18 C 1 25,.%.%.%.% $1.65 SUBTOTAL 15 1,145,593 19.1% 3.8% 22.9% 22.6% 62,529 62,529 5,5 5,5 $2.39 MARKET TOTAL A 95 16,878,758 15.5%.8% 16.3% 17.4% 81,149 81,149 189, 189, 1,39,265 $2.83 B 83 5,717,262 13.9%.9% 14.8% 15.2% 63,734 63,734 42,1 42,1 $2.43 C 15 62,623 17.7%.% 17.7% 17.9% 1,732 1,732 (1,5) (1,5) $2.16 TOTAL 193 23,198,643 15.2%.8% 16.% 16.9% 875,615 875,615 229,6 229,6 1,39,265 $2.72 COLLIERS INTERNATIONAL P. 3

MARKET REPORT OFFICE TRI CITIES >>Glendale led the Tri-Cities office market in terms of new leasing activity recording at 443,727 >>In terms of under construction projects, there is an office development at 68 E Colorado Blvd in Pasadena, as well as two renovation projects in Burbank >>Sales activity in Tri-Cities remained active with three investment sales in Q1. Sales are expected to hold steady going into 215 CONSTRUCTION No new construction or renovation projects were delivered to the market in the first quarter of 215, however three projects are imminent. The Playhouse Plaza, a Class A office development at 68 E. Colorado Blvd. in Pasadena, is expected to deliver 155, of space in April of 215. Worthe Real Estate is also expected to complete its renovation of 486,972 at 39 W. Alameda Ave. in second quarter of 215. Also due to complete is Worthe s second project, Burbank Studios. This 397,293 project consists primarily of the California, Alameda, and Fairway Buildings on the former NBC Studios Campus. ACTIVITY New leasing activity during fourth quarter totaled 875,615 compared to 259,553 one quarter ago. New leasing activity in first quarter involved: Dreamworks entered a 2 year deal to leaseback 396,544 at 1 Flower St, Nickelodeon agreed to 113,76 at 3 W. Alameda Ave. in Burbank, Yahoo! renewed and downsized to at 333 W. Empire Ave. in Burbank and ADP, LLC agreed to relocate from San Dimas to the tune of 53,56 at 55 S. Lake Ave. in Pasadena. Glendale led the Tri-Cities office market in new leasing activity recording 443,727, with Burbank recording at 254,213 and Pasadena recording at 19,11. The majority of new leasing activity was in Class A office space. The breakdown on a percentage basis shows that Class A space accounted for the vast majority of leasing activity with 91%, while Class B accounted for 7% of the leasing activity. Class C held a 1% share of total leasing activity. RENTAL RATES The weighted average asking rent for direct space increased at $2.72 P. Market-wide rental rates will continue to climb in the near future, given increased demand and the lack of new construction compared to other markets. All submarkets saw at least a 2.5% jump in asking rents from last quarter. Average asking rents remained highest in Burbank ($3.7 P) and lowest in Arcadia ($2.2 P). Class A asking rents were $2.83 P compared to Class B at $2.43 P and Class C at $2.16 P. WEIGHTED AVERAGE ASKING LEASE RATES BY SUBMARKET LEASING ACTIVITY BY SUBMARKET Tri Cities Valley Office Market $ P PER MONTH (FSG) $3.5 $3. $2.5 $2. $1.5 $1. $2.2 $2.39 $2.45 $2.67 $3.7 3, 25, 2, 15, 62,529 254,213 5,993 19,11 $.5 5, 6,45 $. Arcadia Monrovia Glendale Pasadena Burbank Arcadia Monrovia Burbank Glendale Pasadena P. 4 COLLIERS INTERNATIONAL

MARKET REPORT OFFICE TRI CITIES OUTLOOK This quarter saw substantial gains in asking rates as landlords anticipate increased demand in the Tri-Cities market, evidenced by leasing activity rising 86% from last quarter. Pasadena, Burbank and Glendale will continue to show strong fundamentals going forward, and the market stands to benefit from exisitng tenant renewals and relocations from outside the market. Investment sales activity remained steady this quarter in the Tri-Cities submarket and figures to remain so through year end as interest rates remain low. MARKET DESCRIPTION The Tri-Cities office market is a relatively small market, comprised of 23.1 million and represents just 8.5% of the total office space in buildings 25, and greater within the Los Angeles Basin. It is one of the premier locations for firms in the entertainment (primarily in Burbank), insurance (primarily in Glendale), high tech/engineering (primarily in Pasadena stretching through Arcadia and into Monrovia), finance, and professional services sectors. Much of the space is relatively new with 46% built in 1985 or later. In contrast to most office markets in the region, a relatively large percentage of the space is in mid-rise (5%) and highrise (2%) buildings. HISTORICAL LEASING ACTIVITY Q1 211 - UNEMPLOYMENT RATE United States, California & Los Angeles County February 215 9, 9, 8, 8, 9% 8% 7.8% 7, 7, 7% 6.8% 6, 6, 6% 5.8% 5, 4, 3, 2, 2, 5% 4% 3% 2% 1% 3Q9 3Q1 3Q11 3Q12 3Q13 1Q11 1Q12 1Q13 1Q14 1Q15 % UNITED STATES CALIFORNIA LOS ANGELES COUNTY RECENT TRANSACTIONS & MAJOR DEVELOPMENTS SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 1 Flower St, Glendale 396,544 $185,, $467 P SunTrust Equity Funding LLC DreamWorks Animation SKG, Inc. 199 S Los Robles Ave, Pasadena 163,234 $52,5, $322 P Laurus Corporation Heitman, LLC 33 W Riverside Dr, Burbank 55,55 $3,, $54 P 3D Capital, LLC Centurion Real Estate Partners LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 1 Flower St, Glendale 396,544 Prev Occ A Dreamworks Animation SunTrust Equity Funding LLC 3 W Alameda Ave, Burbank 113,76 Direct-New B Nickelodeon Studios Worthe Real Estate Group 3333 West Empire Avenue, Burbank Renewal/Downsize A Yahoo Worthe Real Estate Group 55 South Lake Avenue, Pasadena 53,56 Direct-New A ADP, LLC Beacon Capital Partners 29 W Alameda Ave, Burbank 35,863 Direct-New A CBS Interactive Worthe Real Estate Group MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION 68 E Colorado Blvd, Pasadena IDS Real Estate Group 155, Pasadena Under Construction Q2 215 39 W Alameda Ave, Burbank Worthe Real Estate Group 486,972 Burbank Under Renovation Q2 215 3 W Alameda Ave, Burbank Worthe Real Estate Group 397,293 Burbank Under Renovation Q2 215 COLLIERS INTERNATIONAL P. 5

MARKET REPORT OFFICE TRI CITIES DEFINITIONS OF KEY TERMS USED IN THIS REPORT Total Rentable Square Feet: Office space in buildings with 25, or more of speculative office space. Includes competitive space in Class A, B and C singletenant and multi-tenant buildings. Excludes non-competitive owner-occupied buildings, buildings that include 3% or greater of medical or retail space, and space that is underconstruction, under-renovation or off-market. Net Absorption: Net change in occupied square feet from one period to the next (includes the impact of change in vacant space available for sublease). Leasing Activity: Square feet leased from all known transactions completed during the quarter. Excludes lease renewals. 52 offices in 67 countries on 6 continents United States: 14 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 18 >> $2.3 billion in annual revenue >> 1.7 billion square feet under management >> Over 16,2 professionals Class A Space: Space that an image-conscious company would lease for its headquarters. Typically, this space has a very high level of finish and an excellent location, and commands the highest rents in the market. Class B Space: Highly functional, attractive space, but less prestigious than Class A Space, and commanding lower rental rates. Class C Space: Functional, competitive space, but with a lower level of finish and/or a less desirable location than with Class B Space, and commanding lower rental rates. Low-Rise: Buildings with a total of 4 floors or less. Mid-Rise: Buildings with a total of 5 to 13 floors. High-Rise: Buildings with 14 or more floors. Direct : Space in existing buildings that is vacant and immediately available during the quarter for direct lease, plus space that is vacant but not available for direct lease or sublease (for example, that is being held for a future commitment). Total : Space in existing buildings that is vacant and immediately available during the quarter for direct lease or for sublease, plus space that is vacant but not available for direct lease or sublease. Weighted Average Asking Rental Rates: Weighted by the total square feet available for direct lease. Data is based on Full Service Gross rents, and includes all costs associated with occupying the space, including taxes, insurance, maintenance, janitorial service and utilities. Reported on a monthly, per basis. Space Added (Net): Total square feet added during the quarter via construction completions, including renovated space returned to market, less total square feet taken off-market due to demolitions or conversions. Under Construction: Includes buildings that are in some phase of construction, beginning with foundation work and ending with the issuance of a Certificate of Occupancy. Technical Note Colliers International is continuously refining its database. The data shown in the historical tables and graphics in this report have been adjusted to take into account these changes in the database. This report has been prepared by Colliers International for general information only. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers International does not guarantee, warrant or represent that the information contained in this document is correct. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This report and other research materials may be found on our website at www.colliers.com/losangeles. UNITED STATES: Downtown Los Angeles Office License No. 198231 865 S. Figueroa Street, Suite 35 Los Angeles, CA 917 TEL +1 213 627 1214 FAX +1 213 327 32 BAER, CHRIS R. Executive Vice President FENENBOCK, KEVIN HENNESSEY, BRIAN KIRK, TERENCE Vice President LONDON, GREGORY Associate MATTESON, CAITLIN Research Director Research Services MUMPER, HANS Executive Managing Director SALIMIAN, SHAWN Senior Associate SCHNELL, RICHARD C. PUTNAM, RICK Managing Director Western Region Capital Markets VILGIATE, NICO Executive Vice President WALKER, SHADD G. WONG, CHRISTOPHER Regional Analyst Research Services Accelerating success. P. 6 COLLIERS INTERNATIONAL www.colliers.com/marketname