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

Transcription

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

2 Third Quarter 2014 Los Angeles Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets & Submarkets Inventory & Development Analysis Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters Antelope Valley Market Carson/Rancho Domingz Market Central LA Market Commerce Area Market Conejo Valley Market Eastern SGV Market El Segundo/Hawthorne Market Gardena/110 Corridor Market Long Beach Area Market Lower SGV Market Lynwood/Paramount Market Mid Counties-LA Market Northwest SGV Market SCV/Lancaster/Palmdale Market SFV East Market SFV West Market Southwest SGV Market Torrance/Beach Cities Market Upper SGV Market Ventura County Market Vernon Area Market Westside Market 2014 CoStar Group, Inc. The CoStar Industrial Report A

3 Los Angeles Third Quarter 2014 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 COSTAR, or visit our web site at Copyright 2012 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 L ST NW Washington, DC (800) NASDAQ: CSGP B The CoStar Industrial Report 2014 CoStar Group, Inc.

4 Third Quarter 2014 Los Angeles 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 2014 CoStar Group, Inc. The CoStar Industrial Report C

5 Los Angeles Third Quarter 2014 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. Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. 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 2014 CoStar Group, Inc.

6 Overview Third Quarter 2014 Los Angeles Los Angeles s Decreases to 3.7% Net Absorption Positive 3,048,453 SF in the Quarter The Los Angeles Industrial market ended the third quarter 2014 with a vacancy rate of 3.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 3,048,453 square feet in the third quarter. Vacant sublease space increased slightly by 17,137 square feet to 1,514,500 square feet at the end of the third quarter, but was still down from four quarters ago. Rental rates ended the third quarter at $8.11, an increase over the previous quarter. A total of five buildings delivered to the market in the quarter totaling 868,091 square feet, with 1,842,072 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Los Angeles Industrial market was positive 3,048,453 square feet in the third quarter That compares to positive 4,199,557 square feet in the second quarter 2014, positive 3,114,605 square feet in the first quarter 2014, and positive 3,849,038 square feet in the fourth quarter Tenants moving out of large blocks of space in 2014 include: Pacer Global Logistics moving out of (323,374) square feet at Century Freeway Distribution Center, ViewSonic Corporation moving out of (298,050) square feet at 381 Brea Canyon Rd, and FARO Logistics Solutions, Inc. moving out of (210,300) square feet at Cerritos Distribution Ctr - Bldg 10. Tenants moving into large blocks of space in 2014 include: Huffy Bicycle Company moving into 338,899 square feet at 300 Westmont Ave, Forever 21 moving into 323,374 square feet at Century Freeway Distribution Center, and Phoenix Warehouse moving into 305,422 square feet at 9306 Sorensen Ave. The Flex building market recorded net absorption of positive 463,196 square feet in the third quarter 2014, compared to positive 220,005 square feet in the second quarter 2014, positive 324,905 in the first quarter 2014, and negative (72,733) in the fourth quarter The Warehouse building market recorded net absorption of positive 2,585,257 square feet in the third quarter 2014 compared to positive 3,979,552 square feet in the second quarter 2014, positive 2,789,700 in the first quarter 2014, and positive 3,921,771 in the fourth quarter The overall Industrial market, as well as the individual Flex and Warehouse sectors, have shown a steady decrease in vacancy rate over the past four quarters. The Industrial vacancy rate in the Los Angeles market area decreased to 3.7% at the end of the third quarter The vacancy rate was 3.9% at the end of the second quarter 2014, 4.3% at the end of the first quarter 2014, and 4.6% at the end of the fourth quarter Flex projects reported a vacancy rate of 6.9% at the end of the third quarter 2014, 7.6% at the end of the second quarter 2014, 7.9% at the end of the first quarter 2014, and 8.4% at the end of the fourth quarter Warehouse projects reported a vacancy rate of 3.5% at the end of the third quarter 2014, 3.6% at the end of second Rates by Building Type % Flex Warehouse Total Market 8% 7% 6% Rate 5% 4% 3% 2% 1% 0% q q q q q q q q q q q q q q q q q 2014 CoStar Group, Inc. The CoStar Industrial Report 1

7 Los Angeles Third Quarter 2014 Overview quarter 2014, 4.1% at the end of the first quarter 2014, and 4.4% at the end of the fourth quarter Largest Lease Signings The largest lease signings occurring in 2014 included: the 620,000-square-foot lease signed by 99 Cents Only at 6100 Garfield Ave in the Commerce Area market; the 521,856- square-foot deal signed by Sony Corporation of America at 2201 E Carson St in the Carson/Rancho Domingz market; and the 418,344-square-foot lease signed by St. George Warehouse, Inc. at 1650 S Central Ave in the Carson/Rancho Domingz market. Sublease The amount of vacant sublease space in the Los Angeles market increased to 1,514,500 square feet by the end of the third quarter 2014, from 1,497,363 square feet at the end of the second quarter There was 1,601,652 square feet vacant at the end of the first quarter 2014 and 1,750,456 square feet at the end of the fourth quarter Los Angeles s Flex projects reported vacant sublease space of 144,864 square feet at the end of third quarter 2014, up from the 136,069 square feet reported at the end of the second quarter There were 120,556 square feet of sublease space vacant at the end of the first quarter 2014, and 125,369 square feet at the end of the fourth quarter Warehouse projects reported increased vacant sublease space from the second quarter 2014 to the third quarter Sublease vacancy went from 1,361,294 square feet to 1,369,636 square feet during that time. There were 1,481,096 square feet at the end of the first quarter 2014, and 1,625,087 square feet at the end of the fourth quarter Rental Rates The average quoted asking rental rate for available Industrial space was $8.11 per square foot per year at the end U.S. Comparison Past 9 Quarters Rate 1 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 1.0% Los Angeles United States q q q q q of the third quarter 2014 in the Los Angeles market area. This represented a 1.9% increase in quoted rental rates from the end of the second quarter 2014, when rents were reported at $7.96 per square foot. It represents an 8.5% increase from four quarters ago, when rents were reported at $7.46 per square foot at the end of the third quarter The average quoted rate within the Flex sector was $16.59 per square foot at the end of the third quarter 2014, while Warehouse rates stood at $7.49. At the end of the second quarter 2014, Flex rates were $16.26 per square foot, and Warehouse rates were $7.36. Deliveries and Construction During the third quarter 2014, five buildings totaling 868,091 square feet were completed in the Los Angeles market area. This compares to nine buildings totaling 292,023 square feet that were completed in the second quarter 2014, nine buildings totaling 309,508 square feet completed in the first quarter 2014, and 1,081,300 square feet in nine buildings completed in the fourth quarter There were 1,842,072 square feet of Industrial space under construction at the end of the third quarter Some of the notable 2014 deliveries include: 6100 Garfield Ave, a 620,000-square-foot facility that delivered in third quarter 2014 and is now 100% occupied, and Mission 71 Business Park - Bldg N, a 119,856-square-foot building that delivered in third quarter 2014 and is now 100% occupied. The largest projects underway at the end of third quarter 2014 were Valley-71 Business Park - Bldg 5, a 279,424-squarefoot building with 0% of its space pre-leased, and Clean Tech Manufacturing Center - Bldg A, a 235,000-square-foot facility that is 0% pre-leased. Inventory Total Industrial inventory in the Los Angeles market area amounted to 986,525,966 square feet in 36,963 buildings as of the end of the third quarter The Flex sector consisted of 62,465,086 square feet in 2,826 projects. The Warehouse sector consisted of 924,060,880 square feet in 34,137 buildings. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Los Angeles industrial sales figures fell during the second quarter 2014 in terms of dollar volume compared to the first quarter of In the second quarter, 101 industrial transactions closed with a total volume of $526,343,784. The 101 buildings totaled 5,033,480 square feet and the average price per square foot equated to $ per square foot. That compares to 93 transactions totaling $526,748,897 in the first quarter. The total square footage was 4,795,122 for an average price per square foot of $ The CoStar Industrial Report 2014 CoStar Group, Inc.

8 Overview Third Quarter 2014 Los Angeles Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the first six months of 2014, the market saw 194 industrial sales transactions with a total volume of $1,053,092,681. The price per square foot has averaged $ this year. In the first six months of 2013, the market posted 183 transactions with a total volume of $847,982,024. The price per square foot averaged $ Cap rates have been lower in 2014, averaging 6.26%, compared to the first six months of last year when they averaged 6.88%. One of the largest transactions that has occurred within the last four quarters in the Los Angeles market is the sale of Broadway Trade Center in Los Angeles. This 1,080,000-squarefoot industrial building sold for $125,000,000, or $ per square foot. The property sold on 8/21/2014. Reports compiled by: Paula Bonner, David Blake, and Adam Jarrett, Absorption & Deliveries Past 9 Quarters Net Absorption Deliveries (1.0) (0.6) (2.0) (2.3) (3.0) q q q q q CoStar Research Managers CoStar Group, Inc. The CoStar Industrial Report 3

9 Los Angeles Third Quarter 2014 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 Antelope Valley Ind Submarkets Antelope Valley Ind Carson/Rancho Domingz Ind Carson Central Ind Carson North Ind Carson South Ind Compton East Ind Compton West Ind Rancho Dominguez Ind Central LA Ind Central Los Angeles Ind Commerce Area Ind Commerce Ind Montebello/Whittier Ind Conejo Valley Ind Agoura/Wlake V/T Oaks Ind Moorpark/Simi Val Ind Eastern SGV Ind Claremont Ind Diamond Bar Ind La Verne Ind Pomona North Ind Pomona SE Ind Pomona SW Ind San Dimas Ind El Segundo/Hawthorne Ind El Segundo Ind Hawthorne Ind Inglewood Ind Lawndale Ind Gardena/110 Corridor Ind Gardena Central Ind Gardena East Ind Gardena NE Ind Gardena North Central Ind Gardena North Ind Gardena NW Ind Gardena South Ind Long Beach Area Ind Lakewood Ind Long Beach North Ind Long Beach SE Ind Long Beach SW Ind San Pedro Ind Signal Hill Ind Wilmington Ind Lower SGV Ind City of Industry Cent Ind City of Industry East Ind City of Industry West Ind Industry/Hacienda Blv Ind Industry/La Puente Ind Industry/Rowland St Ind West Covina/Walnut Ind Lynwood/Paramount Ind Lynwood Ind Paramount North Ind Paramount South Ind Mid Counties-LA Ind Cerritos Ind Downey Ind La Mirada Ind Norwalk/Bellflower Ind Santa Fe Springs Ind Northwest SGV Ind Alhambra Ind Arcadia/Sierra Madre Ind El Monte Ind Monrovia Ind Rosemead Ind San Gabriel Ind Temple City Ind SCV/Lancaster/Palmdale Ind Santa Clarita/Lancstr Ind SFV East Ind Burbank Ind East San Ferndo Vlly Ind Glendale Ind North Hollywood Ind Pasadena Ind SFV West Ind Canoga Park Ind Chatsworth Ind Encino Ind Northridge Ind Tarzana Ind Woodland Hills Ind Southwest SGV Ind South El Monte NE Ind South El Monte NW Ind South El Monte SE Ind Torrance/Beach Cities Ind Beach Cities Ind Torrance Central Ind Torrance NE Ind Torrance NW Ind Torrance South Ind Upper SGV Ind Azusa Ind Baldwin Park Ind Covina Ind Duarte Ind Glendora Ind Irwindale Ind Ventura County Ind Central Ventura Ind Oxnard/Pt Hueneme Ind Ventura Ind Vernon Area Ind Vernon Ind Westside Ind Topanga/Malibu Ind Westside Ind 4 The CoStar Industrial Report 2014 CoStar Group, Inc.

10 Inventory & development Third Quarter 2014 Los Angeles Historical Deliveries Deliveries Average Delivered SF Millions of SF * 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 Vernon Area Ind 4 583,036 55, % 36, ,759 Commerce Area Ind 2 289,719 71, % 44, ,859 Lower SGV Ind 2 288, , % 53, ,248 Eastern SGV Ind 1 279, , ,424 Carson/Rancho Domingz Ind 1 221, , ,050 SFV East Ind 2 134, , ,783 67,000 Mid Counties-LA Ind 2 28,295 24, % 35,065 14,147 Southwest SGV Ind 1 7, ,107 7,500 Northwest SGV Ind 1 7, ,379 7,027 El Segundo/Hawthorne Ind 1 3,525 3, ,871 3,525 All Other ,369 0 Totals 17 1,842, , % 26, ,357 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2010 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 3.5 Leased Un-Leased 1,200 Preleased Un-Leased 3.0 1,000 Millions of SF Thousands of SF T q q 2014 CoStar Group, Inc. The CoStar Industrial Report 5

11 Los Angeles Third Quarter 2014 Inventory & development Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 3.0 Construction Starts Deliveries Millions of SF q q q q 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 , , % $ , ,697 50,000 SF - 99,999 SF 5 360, , % $ , ,000 SF - 249,999 SF 1 119, , $ , ,000 SF - 499,999 SF $ >= 500,000 SF 1 620, , $ ,000 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2014 Deliveries Currently Under Construction By Building Type By Tenancy Type 47% 13% 6% 44% 56% 53% 87% 94% Multi Single Multi Single Flex Warehouse Multi Single 6 The CoStar Industrial Report 2014 CoStar Group, Inc.

12 Inventory & development Third Quarter 2014 Los Angeles 2014 CoStar Group, Inc. The CoStar Industrial Report 7

13 Los Angeles Third Quarter 2014 Inventory & development 8 The CoStar Industrial Report 2014 CoStar Group, Inc.

14 Figures at a Glance Third Quarter 2014 Los Angeles Flex Market Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Antelope Valley Ind ,988 49,387 49, % 32, $7.61 Carson/Rancho Domingz Ind 42 1,386, , , % 10, $16.83 Central LA Ind 313 5,215, , , % 8, $20.88 Commerce Area Ind 64 1,200,896 67,716 67, % 42, $12.47 Conejo Valley Ind 176 6,023, , , % 215, $13.31 Eastern SGV Ind , , , % (70,414) 0 0 $15.47 El Segundo/Hawthorne Ind 64 2,252,678 28,697 28, % 89,696 4,400 0 $18.59 Gardena/110 Corridor Ind ,791 49,470 49, % (21,972) 0 0 $10.28 Long Beach Area Ind 100 1,688, , , % 1, $11.14 Lower SGV Ind 44 1,278,597 15,562 15, % 17, $12.78 Lynwood/Paramount Ind ,406 3,482 3, % 7, $8.16 Mid Counties-LA Ind 186 4,145, , , % 97, $10.77 Northwest SGV Ind 116 2,402,834 66,568 79, % 159, $15.34 SCV/Lancaster/Palmdale Ind 124 3,353, , , % 86,609 32,232 0 $13.55 SFV East Ind 345 5,749, , , % 13, $17.01 SFV West Ind 364 8,884, , , % 44, $13.55 Southwest SGV Ind ,059 8,112 8, % 1, $12.42 Torrance/Beach Cities Ind 190 4,690, , , % (51,355) 0 0 $13.75 Upper SGV Ind 109 2,128,212 76,162 76, % 18, $12.05 Ventura County Ind 79 2,542, , , % 90, $12.23 Vernon Area Ind ,451 24,820 24, % 1, $14.28 Westside Ind 308 5,991, , , % 213, $31.40 Totals 2,826 62,465,086 4,143,855 4,288, % 1,008,106 36,632 0 $16.59 Warehouse Market Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Antelope Valley Ind 333 9,263, , , % 100, $6.36 Carson/Rancho Domingz Ind 1,195 73,305,843 2,349,728 2,481, % 1,452, ,050 $6.71 Central LA Ind 4,620 90,394,172 2,409,908 2,504, % (209,866) 24,950 0 $9.26 Commerce Area Ind 1,610 73,879,223 3,123,825 3,174, % 265, , ,719 $6.32 Conejo Valley Ind ,268, , , % 413, $7.71 Eastern SGV Ind 1,044 25,003, , , % 275, , ,424 $6.44 El Segundo/Hawthorne Ind ,462, , , % 192, ,525 $9.51 Gardena/110 Corridor Ind 1,635 35,256,376 1,104,127 1,199, % 274,961 41,311 0 $6.79 Long Beach Area Ind 1,544 27,347, , , % 1,354,705 4,000 0 $8.03 Lower SGV Ind 1,486 81,152,189 2,272,903 2,398, % 372,342 79, ,496 $6.65 Lynwood/Paramount Ind ,726, , , % (16,794) 0 0 $6.85 Mid Counties-LA Ind 2,531 91,125,185 3,507,917 3,617, % 1,685,288 95,464 28,295 $6.59 Northwest SGV Ind 1,211 20,658,557 1,173,701 1,183, % 78,321 28,000 7,027 $6.86 SCV/Lancaster/Palmdale Ind ,676, ,949 1,094, % 169, $7.21 SFV East Ind 4,610 77,411,041 1,886,668 2,176, % 639,194 5, ,000 $9.34 SFV West Ind 1,608 37,737, , , % 426, $7.85 Southwest SGV Ind ,956, , , % 64,013 25,200 7,500 $7.72 Torrance/Beach Cities Ind ,802,876 2,027,930 2,047, % 547, $7.65 Upper SGV Ind 1,144 23,788, , , % 212, $7.29 Ventura County Ind 2,085 47,069,809 2,494,752 2,514, % 433, $7.31 Vernon Area Ind 2,167 80,690,900 1,783,357 1,888, % 398, , ,036 $6.87 Westside Ind ,084, , , % 223, $15.19 Totals 34, ,060,880 30,534,209 31,903, % 9,354,509 1,432,990 1,842,072 $ CoStar Group, Inc. The CoStar Industrial Report 9

15 Los Angeles Third Quarter 2014 Figures at a Glance Total Industrial Market Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Antelope Valley Ind ,208, , , % 133, $6.45 Carson/Rancho Domingz Ind 1,237 74,691,874 2,514,989 2,646, % 1,463, ,050 $6.97 Central LA Ind 4,933 95,609,516 2,778,422 2,872, % (201,148) 24,950 0 $10.21 Commerce Area Ind 1,674 75,080,119 3,191,541 3,242, % 307, , ,719 $6.41 Conejo Valley Ind ,291,346 1,757,285 1,771, % 629, $9.07 Eastern SGV Ind 1,088 25,971, , , % 205, , ,424 $7.28 El Segundo/Hawthorne Ind ,715, , , % 282,258 4,400 3,525 $10.01 Gardena/110 Corridor Ind 1,670 36,049,167 1,153,597 1,249, % 252,989 41,311 0 $6.99 Long Beach Area Ind 1,644 29,035, ,320 1,035, % 1,355,714 4,000 0 $8.25 Lower SGV Ind 1,530 82,430,786 2,288,465 2,414, % 389,898 79, ,496 $6.70 Lynwood/Paramount Ind ,863, , , % (9,076) 0 0 $6.86 Mid Counties-LA Ind 2,717 95,270,584 3,651,589 3,771, % 1,782,595 95,464 28,295 $6.70 Northwest SGV Ind 1,327 23,061,391 1,240,269 1,262, % 237,702 28,000 7,027 $7.66 SCV/Lancaster/Palmdale Ind ,029,874 1,178,744 1,314, % 256,188 32,232 0 $7.74 SFV East Ind 4,955 83,161,029 2,242,662 2,600, % 652,611 5, ,000 $10.24 SFV West Ind 1,972 46,621,498 1,267,269 1,341, % 470, $8.76 Southwest SGV Ind 1,008 11,195, , , % 65,451 25,200 7,500 $7.77 Torrance/Beach Cities Ind 1,054 36,493,579 2,283,524 2,302, % 496, $8.11 Upper SGV Ind 1,253 25,916, , , % 230, $7.43 Ventura County Ind 2,164 49,612,167 2,887,747 2,907, % 523, $7.65 Vernon Area Ind 2,194 81,141,351 1,808,177 1,913, % 399, , ,036 $6.91 Westside Ind 1,140 19,075, , , % 437, $21.12 Totals 36, ,525,966 34,678,064 36,192, % 10,362,615 1,469,622 1,842,072 $ The CoStar Industrial Report 2014 CoStar Group, Inc.

16 Figures at a Glance Third Quarter 2014 Los Angeles Flex Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Agoura/Wlake V/ ,216, , , % 162, $13.26 Alhambra Ind ,234 28,444 28, % 23, $14.21 Antelope Valley ,988 49,387 49, % 32, $7.61 Arcadia/Sierra ,462 7,650 7, % 8, $17.17 Azusa Ind 35 1,067,536 7,120 7, % (4,120) 0 0 $10.62 Baldwin Park In ,611 52,223 52, % (4,103) 0 0 $11.68 Beach Cities In ,883 86,265 86, % (59,839) 0 0 $14.76 Burbank Ind 91 1,443,527 57,286 57, % (2,813) 0 0 $16.30 Canoga Park Ind ,075 43,438 43, % 9, $12.24 Carson Central ,462 83,096 83, % 1, $20.63 Carson North In. 2 62, $9.00 Carson South In ,152 54,180 54, % (15,703) 0 0 $12.57 Central Los Ang ,215, , , % 8, $20.88 Central Ventura , , , % 5, $11.14 Cerritos Ind ,241 33,136 33, % 14, $11.19 Chatsworth Ind 162 4,423, , , % (7,459) 0 0 $10.33 City of Industr , , $12.00 City of Industr ,629 1,962 1, % 3, $11.73 City of Industr , , $8.88 Claremont Ind 4 55,733 3,696 3, % (3,696) 0 0 $12.96 Commerce Ind ,037 63,588 63, % 40, $12.10 Compton East In. 2 5, $0.00 Compton West In. 3 62, $0.00 Covina Ind ,659 12,900 12, % 8, $13.20 Diamond Bar Ind $0.00 Downey Ind , $10.97 Duarte Ind 3 32, $0.00 East San Ferndo. 83 1,746,623 45,009 45, % 36, $9.66 El Monte Ind ,305 13,609 26, % 118, $11.66 El Segundo Ind 34 1,545,064 13,387 13, % 63,885 4,400 0 $22.52 Encino Ind $0.00 Gardena Central ,213 10,518 10, % (7,118) 0 0 $9.40 Gardena East In. 1 8, $0.00 Gardena NE Ind $0.00 Gardena North C. 5 83, , $0.00 Gardena North I , $0.00 Gardena NW Ind 1 25, $0.00 Gardena South I ,671 38,952 38, % (28,854) 0 0 $10.35 Glendale Ind ,915 16,261 16, % 2, $14.92 Glendora Ind ,637 2,403 2, % (2,403) 0 0 $23.40 Hawthorne Ind , , $0.00 Industry/Hacien , $15.36 Industry/La Pue. 2 46, $0.00 Industry/Rowlan , $0.00 Inglewood Ind ,973 5,030 5,030 24, $14.20 Irwindale Ind 4 171,159 1,516 1, % 20, $ CoStar Group, Inc. The CoStar Industrial Report 11

17 Los Angeles Third Quarter 2014 Figures at a Glance Flex Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates La Mirada Ind ,635 22,140 27, % (8,369) 0 0 $13.11 La Verne Ind 5 95,624 27,000 27, % (22,968) 0 0 $0.00 Lakewood Ind 1 3, $0.00 Lawndale Ind 4 32,555 10,280 10, % $9.60 Long Beach Nort ,114 81,645 81, % 2, $12.15 Long Beach SE I ,135 20,750 20, % 3, $10.16 Long Beach SW I. 7 72,944 7,524 7, % (7,524) 0 0 $8.95 Lynwood Ind 1 3, $0.00 Monrovia Ind ,058 16,865 16, % 9, $21.49 Montebello/Whit ,859 4,128 4, % 1, $13.79 Moorpark/Simi V ,677 65,459 65, % 53, $14.00 North Hollywood ,454 5,877 5, % (5,877) 0 0 $15.89 Northridge Ind 135 3,178,719 84,319 84, % 67, $12.55 Norwalk/Bellflo ,777 11,559 11, % 1, $10.55 Oxnard/Pt Huene ,819 30,769 30, % 76, $15.23 Paramount North. 4 51, $0.00 Paramount South. 5 80,828 3,482 3, % 7, $8.16 Pasadena Ind 95 1,446, , , % (16,785) 0 0 $20.45 Pomona North In ,876 66,776 66, % $0.00 Pomona SE Ind 7 55, $0.00 Pomona SW Ind 3 114,830 62,036 62, % (45,000) 0 0 $15.47 Rancho Domingue 9 498,821 27,985 27, % 24, $15.00 Rosemead Ind 1 180, $0.00 San Dimas Ind ,537 16,208 16, % 1, $15.63 San Gabriel Ind 5 39, $21.00 San Pedro Ind 5 29,435 6,800 6, % (6,800) 0 0 $10.20 Santa Clarita/L ,353, , , % 86,609 32,232 0 $13.55 Santa Fe Spring ,618,019 76,837 81, % 89, $10.32 Signal Hill Ind ,180 12,833 16, % 9, $11.56 South El Monte , $0.00 South El Monte. 2 12, $0.00 South El Monte ,710 8,112 8, % 1, $12.42 Tarzana Ind 2 35,246 12,700 12, % $9.00 Temple City Ind 3 24, $0.00 Topanga/Malibu $0.00 Torrance Centra ,564 8,085 8, % 9, $12.16 Torrance NE Ind 43 1,511,248 6,987 6, % 21, $15.06 Torrance NW Ind 81 1,813, , , % (21,600) 0 0 $13.96 Torrance South ,906 28,460 28, % (399) 0 0 $10.63 Ventura Ind ,308 44,393 44, % 7, $12.00 Vernon Ind ,451 24,820 24, % 1, $14.28 West Covina/Wal ,990 13,600 13, % 3, $17.00 Westside Ind 308 5,991, , , % 213, $31.40 Wilmington Ind 7 57, $0.00 Woodland Hills ,341 63,392 63, % (24,956) 0 0 $20.03 Totals 2,826 62,465,086 4,143,855 4,288, % 1,008,106 36,632 0 $ The CoStar Industrial Report 2014 CoStar Group, Inc.

18 Figures at a Glance Third Quarter 2014 Los Angeles Warehouse Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Agoura/Wlake V/ ,643, , , % 3, $9.93 Alhambra Ind 254 3,849,850 82,818 82, % 41, $8.62 Antelope Valley ,263, , , % 100, $6.36 Arcadia/Sierra ,370,899 55,177 55, % (24,179) 0 7,027 $9.24 Azusa Ind 309 7,164,032 92, , % 26, $6.35 Baldwin Park In ,002,795 43,556 43, % 103, $8.24 Beach Cities In. 68 2,121,592 16,586 16, % 65, $14.24 Burbank Ind 1,014 13,770, , , % (42,455) 5,000 59,000 $11.11 Canoga Park Ind 322 5,413,621 92,411 92, % 110, $8.26 Carson Central ,088, , , % 513, $7.29 Carson North In ,267, , , % (4,644) 0 0 $7.12 Carson South In ,466, , , % 16, ,050 $7.18 Central Los Ang. 4,620 90,394,172 2,409,908 2,504, % (209,866) 24,950 0 $9.26 Central Ventura ,179, , , % (24,365) 0 0 $7.78 Cerritos Ind ,477, , , % 200, $6.51 Chatsworth Ind ,699, , , % 172, $7.45 City of Industr ,945, , , % 171, $6.05 City of Industr ,007,975 1,035,142 1,056, % (762,461) 0 0 $6.81 City of Industr. 68 5,056,654 37,145 37, % 559, $6.31 Claremont Ind ,766 3,140 3, % 9, $9.00 Commerce Ind ,652,678 2,177,296 2,192, % 314, , ,719 $6.21 Compton East In ,670,645 16,269 16, % (1,800) 0 0 $8.08 Compton West In ,061, , , % 332, $6.28 Covina Ind 195 2,273,384 46,728 46, % 85, $8.19 Diamond Bar Ind 2 32, $0.00 Downey Ind 289 7,230, , , % (37,183) 0 0 $6.43 Duarte Ind 65 1,104,728 36,161 47, % 3, $7.46 East San Ferndo. 2,375 45,453,392 1,051,844 1,224, % 810, ,000 $8.20 El Monte Ind 389 9,013, , , % 96,710 28,000 0 $6.13 El Segundo Ind ,539, , , % 38, $14.07 Encino Ind 1 2, $0.00 Gardena Central ,395, , , % 168, $6.68 Gardena East In ,169,940 87,155 87, % (38,423) 0 0 $7.18 Gardena NE Ind 248 6,385, , , % 30,468 41,311 0 $6.43 Gardena North C ,850, , , % 60, $6.67 Gardena North I ,807,786 73,329 73, % 68, $7.59 Gardena NW Ind 10 99, $0.00 Gardena South I ,548, , , % (13,669) 0 0 $7.05 Glendale Ind 613 9,058, , , % (12,396) 0 0 $10.79 Glendora Ind , , , % 12, $6.31 Hawthorne Ind 280 7,883, , , % 250, $6.37 Industry/Hacien ,310, , , % 438,576 79,543 0 $7.16 Industry/La Pue ,970,672 75,724 75, % (100,056) 0 288,496 $5.42 Industry/Rowlan ,855, , , % 65, $7.69 Inglewood Ind 297 4,618, , , % (98,950) 0 3,525 $10.78 Irwindale Ind 236 8,393,543 33,432 37, % (19,573) 0 0 $ CoStar Group, Inc. The CoStar Industrial Report 13

19 Los Angeles Third Quarter 2014 Figures at a Glance Warehouse Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates La Mirada Ind ,370, , , % (49,918) 0 0 $6.30 La Verne Ind 141 2,896,840 83,434 83, % (6,955) 0 0 $6.33 Lakewood Ind , % $7.80 Lawndale Ind , , $13.42 Long Beach Nort ,198, , , % (13,048) 0 0 $7.29 Long Beach SE I ,001, , , % 1,179, $8.03 Long Beach SW I ,783, , , % 84,805 4,000 0 $6.95 Lynwood Ind 183 5,532,523 83,076 83, % (32,971) 0 0 $6.34 Monrovia Ind 257 3,472,574 95,433 95, % (63,583) 0 0 $8.16 Montebello/Whit ,226, , , % (48,619) 0 0 $6.47 Moorpark/Simi V ,625, , , % 410, $7.26 North Hollywood ,904,212 89, ,404 (38,970) 0 0 $8.98 Northridge Ind ,962, , , % 140, $8.54 Norwalk/Bellflo ,115, , , % 183, ,295 $6.94 Oxnard/Pt Huene ,834,049 1,261,015 1,276, % 366, $6.84 Paramount North. 95 2,500,709 83,534 83, % (24,170) 0 0 $6.54 Paramount South ,693,558 77,072 77, % 40, $8.35 Pasadena Ind 168 2,224, , , % (77,461) 0 0 $16.45 Pomona North In ,706,584 33,252 33, % 23, $7.30 Pomona SE Ind ,219, , , % 378, ,287 0 $5.71 Pomona SW Ind 164 4,667, , , % (226,851) 0 279,424 $6.65 Rancho Domingue ,751, ,691 1,050, % 595, $6.21 Rosemead Ind 76 1,389,570 5,193 5, % 2, $4.36 San Dimas Ind 143 2,922,930 91,706 91, % 98,536 33,428 0 $8.09 San Gabriel Ind 89 1,265,800 3,800 3, % 27, $9.50 San Pedro Ind 37 1,531,051 2,422 50, % 1, $9.34 Santa Clarita/L ,676, ,949 1,094, % 169, $7.21 Santa Fe Spring. 1,501 49,932,104 1,471,374 1,551, % 1,388,656 95,464 0 $6.79 Signal Hill Ind 289 4,423, , , % (2,246) 0 0 $9.87 South El Monte ,197,174 58,670 58, % 89, ,500 $7.99 South El Monte ,611,410 41,264 41, % (15,594) 11,700 0 $7.67 South El Monte ,147,867 38,469 38, % (9,899) 13,500 0 $7.29 Tarzana Ind ,895 6,421 6, % 2, $14.74 Temple City Ind ,595 21,706 21, % (2,150) 0 0 $7.84 Topanga/Malibu. 1 2, $0.00 Torrance Centra ,649,778 12,705 12, % 54, $7.59 Torrance NE Ind ,537,411 1,429,667 1,449, % (37,601) 0 0 $7.31 Torrance NW Ind 135 6,365, , , % 167, $7.44 Torrance South ,128, , , % 297, $7.93 Ventura Ind ,055, , , % 91, $8.12 Vernon Ind 2,167 80,690,900 1,783,357 1,888, % 398, , ,036 $6.87 West Covina/Wal ,005,652 40,097 40, % (711) 0 0 $10.26 Westside Ind ,081, , , % 223, $15.19 Wilmington Ind 179 3,052,559 32,932 32, % 104, $6.67 Woodland Hills. 21 1,166,837 15,923 15, % (323) 0 0 $18.00 Totals 34, ,060,880 30,534,209 31,903, % 9,354,509 1,432,990 1,842,072 $ The CoStar Industrial Report 2014 CoStar Group, Inc.

20 Figures at a Glance Third Quarter 2014 Los Angeles Total Industrial Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Agoura/Wlake V/ ,859, , , % 165, $12.05 Alhambra Ind 288 4,605, , , % 64, $10.34 Antelope Valley ,208, , , % 133, $6.45 Arcadia/Sierra ,614,361 62,827 62, % (16,057) 0 7,027 $9.75 Azusa Ind 344 8,231,568 99, , % 22, $6.46 Baldwin Park In ,357,406 95,779 95, % 98, $8.47 Beach Cities In. 92 2,803, , , % 5, $14.41 Burbank Ind 1,105 15,214, , , % (45,268) 5,000 59,000 $11.78 Canoga Park Ind 374 6,054, , , % 120, $8.73 Carson Central ,318, , , % 515, $7.94 Carson North In ,329, , , % (4,644) 0 0 $7.24 Carson South In ,992, , , % ,050 $7.34 Central Los Ang. 4,933 95,609,516 2,778,422 2,872, % (201,148) 24,950 0 $10.21 Central Ventura ,978,019 1,233,928 1,237, % (18,488) 0 0 $8.12 Cerritos Ind ,269, , , % 214, $6.70 Chatsworth Ind ,123, , , % 165, $7.74 City of Industr ,053, , , % 176, $6.07 City of Industr ,141,604 1,037,104 1,058, % (758,869) 0 0 $6.83 City of Industr. 70 5,204,412 37,145 37, % 564, $6.48 Claremont Ind ,499 6,836 6, % 5, $10.67 Commerce Ind ,436,715 2,240,884 2,256, % 354, , ,719 $6.33 Compton East In ,676,565 16,269 16, % (1,800) 0 0 $8.08 Compton West In ,124, , , % 332, $6.28 Covina Ind 224 2,593,043 59,628 59, % 94, $8.29 Diamond Bar Ind 2 32, $0.00 Downey Ind 299 7,497, , ,654 (37,183) 0 0 $6.49 Duarte Ind 68 1,137,338 36,161 47, % 3, $7.46 East San Ferndo. 2,458 47,200,015 1,096,853 1,269, % 847, ,000 $8.26 El Monte Ind 412 9,766, , , % 215,670 28,000 0 $6.33 El Segundo Ind ,084, , , % 102,726 4,400 0 $15.33 Encino Ind 1 2, $0.00 Gardena Central ,593, , , % 161, $6.73 Gardena East In ,178,663 87,155 87, % (38,423) 0 0 $7.18 Gardena NE Ind 248 6,385, , , % 30,468 41,311 0 $6.43 Gardena North C ,933, , , % 74, $6.67 Gardena North I ,948,947 73,329 73, % 68, $7.59 Gardena NW Ind , $0.00 Gardena South I ,883, , , % (42,523) 0 0 $7.92 Glendale Ind 671 9,933, , , % (10,179) 0 0 $11.23 Glendora Ind 68 1,032, , , , $6.74 Hawthorne Ind 290 8,307, , , , $6.37 Industry/Hacien ,760, , , % 438,576 79,543 0 $7.16 Industry/La Pue ,017,288 75,724 75, % (100,056) 0 288,496 $5.42 Industry/Rowlan ,051, , , % 65, $7.69 Inglewood Ind 313 4,869, , , % (74,559) 0 3,525 $10.96 Irwindale Ind 240 8,564,702 34,948 39, % 1, $ CoStar Group, Inc. The CoStar Industrial Report 15

21 Los Angeles Third Quarter 2014 Figures at a Glance Total Industrial Submarket Statistics Third Quarter 2014 YTD Net YTD Under Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates La Mirada Ind ,686, , , % (58,287) 0 0 $6.35 La Verne Ind 146 2,992, , , % (29,923) 0 0 $6.33 Lakewood Ind , % $7.80 Lawndale Ind ,167 10,280 10, % 2, $10.87 Long Beach Nort ,792, , , % (11,018) 0 0 $7.96 Long Beach SE I ,338, , , % 1,182, $8.12 Long Beach SW I ,856, , , % 77,281 4,000 0 $7.04 Lynwood Ind 184 5,536,390 83,076 83, % (32,971) 0 0 $6.34 Monrovia Ind 286 3,879, , , % (54,331) 0 0 $11.49 Montebello/Whit ,643, , , % (47,143) 0 0 $6.54 Moorpark/Simi V ,431, , , % 464, $7.45 North Hollywood ,142,666 95, ,281 (44,847) 0 0 $9.22 Northridge Ind ,140, , , % 207, $9.24 Norwalk/Bellflo ,267, , , % 184, ,295 $6.96 Oxnard/Pt Huene ,740,868 1,291,784 1,307, % 442, $7.07 Paramount North. 99 2,552,420 83,534 83, % (24,170) 0 0 $6.54 Paramount South ,774,386 80,554 80, % 48, $8.34 Pasadena Ind 263 3,670, , , % (94,246) 0 0 $18.88 Pomona North In ,911, , , % 23, $7.30 Pomona SE Ind ,274, , , % 378, ,287 0 $5.71 Pomona SW Ind 167 4,781, , , % (271,851) 0 279,424 $9.99 Rancho Domingue ,250,243 1,001,676 1,078, % 620, $6.32 Rosemead Ind 77 1,569,570 5,193 5, % 2, $4.36 San Dimas Ind 165 3,364, , , % 99,786 33,428 0 $9.17 San Gabriel Ind 94 1,305,559 3,800 3, % 27, $10.00 San Pedro Ind 42 1,560,486 9,222 57, % (5,000) 0 0 $9.42 Santa Clarita/L ,029,874 1,178,744 1,314, % 256,188 32,232 0 $7.74 Santa Fe Spring. 1,628 52,550,123 1,548,211 1,633, % 1,478,586 95,464 0 $6.94 Signal Hill Ind 325 5,016, , , % 7, $10.09 South El Monte ,292,908 58,670 58, % 89, ,500 $7.99 South El Monte ,624,025 41,264 41, % (15,594) 11,700 0 $7.67 South El Monte ,278,577 46,581 46,581 (8,461) 13,500 0 $7.47 Tarzana Ind ,141 19,121 19, % 2, $12.28 Temple City Ind ,611 21,706 21, % (2,150) 0 0 $7.84 Topanga/Malibu. 1 2, $0.00 Torrance Centra ,849,342 20,790 20, % 63, $8.28 Torrance NE Ind ,048,659 1,436,654 1,456, % (16,523) 0 0 $7.41 Torrance NW Ind 216 8,178, , , % 146, $8.90 Torrance South ,613, , , % 297, $8.04 Ventura Ind ,893, , , % 99, $8.66 Vernon Ind 2,194 81,141,351 1,808,177 1,913, % 399, , ,036 $6.91 West Covina/Wal ,202,642 53,697 53, % 2, $11.36 Westside Ind 1,139 19,073, , , % 437, $21.12 Wilmington Ind 186 3,110,208 32,932 32, % 104, $6.67 Woodland Hills. 34 1,772,178 79,315 79, % (25,279) 0 0 $19.95 Totals 36, ,525,966 34,678,064 36,192, % 10,362,615 1,469,622 1,842,072 $ The CoStar Industrial Report 2014 CoStar Group, Inc.

22 Figures at a Glance Third Quarter 2014 Los Angeles Flex Market Statistics Third Quarter 2014 Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q 2,826 62,465,086 4,143,855 4,288, % 463, , $ q 2,825 62,460,686 4,611,446 4,747, % 220, , ,400 $ q 2,824 62,428,454 4,814,732 4,935, % 324, ,632 $ q 2,824 62,428,454 5,134,824 5,260, % (72,733) 2 30, ,400 $ q 2,823 62,427,547 5,087,506 5,186, % 60, ,291 $ q 2,823 62,427,547 4,936,476 5,247, % (93,840) 1 3, ,291 $ q 2,822 62,423,947 4,978,368 5,149, % 190, , ,000 $ ,821 62,263,947 4,974,501 5,179, % (612,777) 3 73, ,000 $ ,821 62,262,154 4,504,974 4,565, % 349, , ,262 $ ,820 62,382,485 4,940,469 5,034, % (515,798) 5 123, ,997 $ ,816 62,270,994 4,071,017 4,407, % (891,331) , ,860 $ ,808 62,679,137 3,563,403 3,924, % (461,329) , ,725 $ ,796 62,762,980 3,202,648 3,546, % (125,021) , ,677 $ ,767 62,422,654 2,694,254 3,081, % 334, , ,564 $ ,759 62,091,357 2,866,808 3,084, % 2,055, , ,394 $ ,735 61,720,072 4,460,880 4,769, % 85, , ,357 $13.13 Warehouse Market Statistics Third Quarter 2014 Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q 34, ,060,880 30,534,209 31,903, % 2,585, , ,842,072 $ q 34, ,197,189 32,264,117 33,625, % 3,979, , ,351,339 $ q 34, ,216,145 36,142,823 37,623, % 2,789, , ,123,396 $ q 34, ,099,020 38,671,407 40,296, % 3,921, ,050, ,334,050 $ q 34, ,144,977 41,722,429 43,264, % 2,196, , ,044,512 $ q 34, ,604,484 43,036,710 44,919, % (484,876) 9 889, ,601,922 $ q 34, ,858,972 41,653,835 43,689, % 261, , ,308,800 $ , ,770,340 41,966,280 43,862, % 4,312, ,939, ,351 $ , ,869,839 45,085,399 47,274, % 1,472, ,913, ,754,080 $ , ,229,762 44,929,866 48,106, % (2,694,462) , ,533,378 $ , ,427,901 42,578,073 45,610, % (7,474,239) 90 3,444, ,961 $ , ,007,855 33,757,869 36,715, % (8,348,034) 121 4,160, ,707,163 $ , ,220,968 23,567,994 25,580, % 1,487, ,601, ,996,791 $ , ,707,823 23,031,997 24,555, % 12,933, ,844, ,744,067 $ , ,980,933 29,594,835 30,762, % 12,144, ,269, ,813,218 $ , ,637,774 32,714,357 34,564, % 12,274, ,157, ,196,756 $6.72 Total Industrial Market Statistics Third Quarter 2014 Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates q 36, ,525,966 34,678,064 36,192, % 3,048, , ,842,072 $ q 36, ,657,875 36,875,563 38,372, % 4,199, , ,355,739 $ q 36, ,644,599 40,957,555 42,559, % 3,114, , ,160,028 $ q 36, ,527,474 43,806,231 45,556, % 3,849, ,081, ,338,450 $ q 36, ,572,524 46,809,935 48,450, % 2,256, , ,079,803 $ q 36, ,032,031 47,973,186 50,166, % (578,716) , ,637,213 $ q 36, ,282,919 46,632,203 48,838, % 451, , ,316,800 $ , ,034,287 46,940,781 49,041, % 3,699, ,013, ,107,351 $ , ,131,993 49,590,373 51,839, % 1,821, ,972, ,959,342 $ , ,612,247 49,870,335 53,141, % (3,210,260) , ,558,375 $ , ,698,895 46,649,090 50,017, % (8,365,570) 101 3,684, ,821 $ , ,686,992 37,321,272 40,640, % (8,809,363) 134 4,292, ,939,888 $ , ,983,948 26,770,642 29,127, % 1,362, ,077, ,092,468 $ , ,130,477 25,726,251 27,636, % 13,268, ,185, ,187,631 $ , ,072,290 32,461,643 33,847, % 14,200, ,680, ,094,612 $ , ,357,846 37,175,237 39,333, % 12,359, ,354, ,580,113 $ CoStar Group, Inc. The CoStar Industrial Report 17

23 Los Angeles Third Quarter 2014 Leasing Activity Historical Rental Rates Based on Rental Rates $18.00 Flex Warehouse Total Market $16.00 $14.00 Dollars/SF/Year $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $ q q q q q by Available Space Type by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Los Angeles United States Los Angeles United States 4% 2% 12% 15% 88% 85% 96% 98% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $9.00 $8.00 $7.00 Los Angeles United States Dollars/SF/Year $6.00 $5.00 $4.00 $3.00 Millions $ $1.00 $ q q q q q q q q * Includes Under Construction Space 18 The CoStar Industrial Report 2014 CoStar Group, Inc.

24 Leasing Activity Third Quarter 2014 Los Angeles Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2014 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company Gareld Ave Commerce Ind 620,000 2nd 99 Cents Only CBRE JLL E Carson St* Carson Central Ind 521,856 2nd Sony Corp of America N/A Cushman & Wakeeld, Inc S Central Ave* Compton West Ind 418,344 2nd St. George Warehouse, Inc. N/A N/A S Western Ave Torrance NE Ind 369,710 3rd Ceva Logistics N/A CBRE Westmont Ave Torrance South Ind 338,899 1st Huy Bicycle Co. N/A CBRE E Imperial Hwy Lynwood Ind 323,374 3rd Forever 21 N/A Cresa S Western Ave* Torrance NE Ind 305,400 2nd CEVA Logistics N/A N/A Francisco St Torrance NE Ind 272,245 2nd Kuehne & Nagel, Inc. N/A The Klabin Company E Walnut Dr N City of Industry East Ind 260,000 3rd N/A N/A Majestic Realty Co Desman Rd La Mirada Ind 254,718 3rd Always Pacic LLC DAUM Commercial RE Service JLL E Dominguez St Carson Central Ind 254,411 1st Inland Star Distribution N/A Newmark Grubb Knight Frank Science Dr - Bldg 2 Moorpark/Simi Val Ind 253,478 2nd Community Marktplace Direct Deal CBRE Bandini Blvd Commerce Ind 245,143 3rd FAM Brands N/A CBRE S Avalon Blvd Gardena Central Ind 210,710 1st Jupiter Warehousing & Distribution, Inc. N/A DTZ; Colliers International E 23rd St Carson South Ind 204,000 3rd Atlanta Corp. CBRE/Benchmark Investments LLC Watson Land Company Industry Cir* La Mirada Ind 203,850 2nd Warehouse Specialists, Inc. JLL CBRE E San Jose Ave Industry/Rowland St Ind 200,000 1st N/A N/A Majestic Realty Co Val Verde Ct Rancho Dominguez Ind 184,000 2nd Brookvale N/A CBRE Glenn Curtiss St Carson Central Ind 182,554 3rd Mainfreight, Inc. Direct Deal Watson Land Company E Arenth Ave Industry/Rowland St Ind 181,800 2nd Quest Nutrition Corp. Commercial Realty Advisors, Inc. Cushman & Wakeeld, Inc Canary Ave La Mirada Ind 180,848 2nd Integrity Retail Distribution CBRE CBRE Shoemaker Ave Norwalk/Bellower Ind 180,000 2nd FARO Logistics Solutions, Inc. JLL Majestic Realty Co Marquardt Ave Santa Fe Springs Ind 174,047 2nd Sohnen Enterprises, Inc. Cushman & Wakeeld, Inc. Colliers International Flotilla St* Commerce Ind 171,319 2nd Enriquez Materials and Quilting Inc. N/A N/A Whittier Blvd Montebello/Whittier Ind 161,610 1st ACE World Class, Inc. CBRE Realty Advisory Group, Inc E Arenth Ave Industry/Rowland St Ind 158,500 2nd Winit America Trade Company, Ltd. CBRE Cushman & Wakeeld, Inc Valley View Ave* Santa Fe Springs Ind 155,408 1st FARO Logistics Solutions, Inc. JLL CBRE E Temple Ave Industry/La Puente Ind 150,000 1st Source Logistics N/A Lee & Associates S Bonita Ave Carson South Ind 147,500 1st Premier Transportation and Warehousing N/A Watson Land Company Valley View Ave La Mirada Ind 138,964 3rd Winco N/A Majestic Realty Co El Presidio St Carson Central Ind 135,781 1st Arms Logistics Coldwell Banker Commercial The Klabin Company Crider Ave* Montebello/Whittier Ind 134,000 3rd Bakemark USA, LLC N/A N/A Sequoia Dr Lynwood Ind 132,642 1st Pixior N/A JLL Cerise Ave Hawthorne Ind 131,678 2nd SpaceX N/A Fischer & Company 35 The Plantation - Bldg 7 City of Industry East Ind 129,600 3rd N/A N/A DAUM Commercial RE Service Guardian St Moorpark/Simi Val Ind 127,116 2nd MMD Equipment N/A CBRE Alexander Rd Commerce Ind 126,502 2nd Plastic Express Lee & Associates Cushman & Wakeeld, Inc N Soto St* Central Los Angeles Ind 126,000 2nd Forever 21 Lee & Associates Direct Deal S 7th Ave Industry/Hacienda Blv Ind 120,000 3rd Promise Logistics Corp. N/A Majestic Realty Co El Presidio St Carson Central Ind 119,400 3rd KCC Transport System N/A Colliers International * Renewal 2014 CoStar Group, Inc. The CoStar Industrial Report 19

25 Los Angeles Third Quarter 2014 Sales Activity The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 8.0% Cap Rate Price/SF $600 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% 1.0% $500 $400 $300 $200 $100 Dollars/SF q q q $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 July June 2014 $900 Sales Volume Price/SF $120 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $800 $700 $600 $500 $400 $300 $200 $100 $100 $80 $60 $40 $20 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 646 7,030,071 $971,897,704 $ % 205 9,697,024 $974,062,898 $ % 29 4,042,282 $441,217,433 $ % $ q q q q $0 >250K SF 11 3,783,165 $326,352,901 $ % 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 $120 Los Angeles US 9.0% Los Angeles US $100 $80 $60 $40 $20 Cap Rate Percentage 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 1.0% $ q q q q q q q q Source: CoStar COMPS Source: CoStar COMPS 20 The CoStar Industrial Report 2014 CoStar Group, Inc.

26 Third Quarter 2014 Los Angeles 2014 CoStar Group, Inc. The CoStar Industrial Report 21 Sales Activity