>> Massive Absorption As Buildings Are Completed

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1 Research & Forecast Report South Bay INDUSTRIAL Q Accelerating success. >> Massive Absorption As Buildings Are Completed Key Takeaways > There were 1,314,500 of construction completions this quarter as the much anticipated Brickyard project finished completion. > Much of the industrial space that was completed this quarter was pre-leased, leading to a massive 1,356,400 of positive net absorption this quarter. This is the largest net absorption in a single quarter since > Sales and leasing activity totaled 3,310,500, broken out into 9 sales (246,500 ) and 55 leases (3,064,000 ). > Average asking lease rates increased by $0.01 P NNN over the quarter to end at $0.75 P NNN, a new record rate. > There is 1,177,000 of new space currently under construction which will finish in the next 12 months. Market Indicators Relative to prior period Q Forecast Vacancy Net Absorption Construction Rental Rate Summary Statistics South Bay, Q Vacancy Rate 1.0% Change from Q2 16 (Basis Points) -10 BPS Net Absorption 1,356,400 Construction Completions 1,314,500 South Bay remains the premier market for distribution companies and sea and air cargo centered industrial users. It is nearly fully developed so land is incredibly scarce. Tight market conditions and a lack of larger modern space continue to be deterrents that drive tenants to neighboring markets, primarily to the east. Asking Rents South Bay, Q Average Asking Rent Change from Q4 15 $0.75 P NNN +$0.08 P NNN Y.O.Y. Change (%) +11.9% Labor Force South Bay, Q mo Employment Growth (%) 12-mo Actual Employment Change Construction Manufacturing Transportation, Trade & Utilities -3.4% -1.2% 0.6% -4,400-4,200 +4,700

2 Vacancy Historical Vacancy v. Rents South Bay Q > Despite the addition of 1,314,500 of newly constructed industrial space, the vacancy rate actually declined this quarter by 10 basis points to 1.0%. The vacancy rate is currently at its lowest level ever recorded. > Vacancy is tightest in the Gardena / Harbor Freeway submarket at 0.5% followed by Long Beach / Harbor Cities at 0.8%. > Forecast: New supply may bring some relief in vacancy rates, but with only 1.2 M of supply on the horizon we may be see sub 1% vacancy in the South Bay for much of $P PER MONTH (NNN) $0.75 $0.70 $0.65 $0.60 $0.55 $0.50 RENTS VACANCY 5% 4% 3% 2% 1% % VACANT (TOTAL) Absorption and Leasing Activity $0.45 0% > Industrial demand reported 1,356,400 of positive net absorption this quarter, accounding for nearly 60% of the 2,365,800 absorbed over all of > Sales and leasing activity totaled 3,310,500 this quarter. This was broken out into 9 sales (246,500 ) and 55 leases (3,064,000 ). > Forecast: Absorption is likely to be flat for 2017 as there is little new supply hitting the market and further gains will be hard to achieve. Rental Rates > Average asking rents increased $0.01 P NNN over the quarter to end at $0.75 P NNN. Asking rents are at their highest levels ever and will continue to rise. > Even marginal space in the South Bay is getting multiple offers and tenants are having to expand their search criteria in order to find suitable space. > Forecast: Rents will continue to rise in future quarters and tenants can expect to pay a premium for all types of industrial space. Tenants who signed leases 5 years ago can expect to their rent to increase roughly 45% upon renewal. Net Absorption by Submarket South Bay Q4 16 1,000, , , , , , , , , , ,000 LAX/ES/HAWTHORNE 64,300 GARDENA/HARBOR FWY 109,300 Historical Leasing Activity South Bay Q ,000,000 4,000,000 TORRANCE 224,500 LB/HARBOR CITIES 918,300 CARSON/COMPTON/RD 3,000,000 2,000,000 1,000,

3 Construction > There was 1,314,500 of new supply, much of which was already pre-leased prior to completion. > There remains 1,177,000 of space currently under construction, an incredibly small amount for a million industrial market. > Development is exceedingly difficult in the South Bay as raw land, if available, will sell for a premium. > Forecast: We are on the tail end of a construction boom and new supply will trickle in for the rest of Development will remain limited to build to suit projects or creative rehabilitation of under performing space. Historical Net Absorption & Construction Completions South Bay Q ,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 NET ABSORPTION CONSTRUCTION COMPLETIONS Investment Trends 0 > Cap rates continue to remain tight in Los Angeles County, averaging 5.4% in Q Investment Trends Chart Los Angeles County Q Average Price Per sf Average Cap Rate > Forecast: There has been increased investor focus on fully leased industrial assets in prime infill locations. Consequently, we expect more investment sales to occur in future quarters, driving up sales prices and further compressing cap rates. Outlook 8.0% 7.0% 6.0% 4.0% 3.0% 2.0% $180 $160 $140 $120 $100 $80 $60 $40 > Tight market conditions are expected to persist in the South Bay industrial marketplace with vacancy rates below single digits expected in future quarters. Rents are at their highest ever levels, prompting many users to consider buying their properties, however the available inventory is insufficient to meet demand. 1.0% $20 0.0% $0 Unemployment Rate Los Angeles County November 2016 > Land is incredibly scarce and many industrial users are having to get creative or face paying a premium to secure land for truck, car or trailer storage. 5.1% 5.1% 5.1% 4.9% 4.9% 4.9% 4.8% United States California Los Angeles County 3

4 Market Description The South Bay industrial market includes million square feet, representing 16 percent of the total space in the Los Angeles Basin for buildings 10,000 square feet and greater. The market has a high concentration of firms oriented toward international trade at the Ports of Los Angeles and Long Beach, respectively, and/or with LAX airport. The South Bay is a relatively mature market, with 63 percent of its space built prior to There is a good mix of product types, with nearly half of the space (45%) in big-box space (100,000 +) and the balance (55%) in small and medium sized buildings. Submarket Map RECENT TRANSACTIONS & MAJOR DEVELOPMENTS Q SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 3401 Del Amo, Torrance 79,700 $15.5 Million $195 P Dimensions Company Kubota Tractor Corp Via Ardo, Rancho Dominguez 84,500 $10 Million $118 P Uhaul The Nervii, LLC 3144 Maria, Rancho Dominguez 35,000 $4.8 Million $139 P Orient Express, LLC Michael Leung 211 w 140th, Los Angeles 37,000 $4.6 Million $125 P Young & Y Properties, LLC Rader Properties Group VIII LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 1430 McKinley, Compton 528,000 Direct - New Distribution UPS Clarion Partners 2910 Pacific Commerce Drive, Rancho Dominguez 150,000 Direct - New Distribution Trademango Solutions US, Inc. CalStrs Maple, Gardena 131,900 Direct - New Manufacturing FNS. Inc. Nygard, Inc. 220 Victoria, Compton 111,000 Renewal Distribution Universal Mail Delivery Services Prudential MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION 1430 S McKinley, Compton Trammell Crow 528,000 Compton / Carson / RD Completed Q Central, Compton Trammell Crow 479,300 Compton / Carson / RD Completed Q Pier B Baker Cold Storage 244,000 Long Beach / Harbor Completed Q

5 INDUSTRIAL OVERVIEW Q EXISTING PROPERTIES CONSTRUCTION VACANCY AVAILABILITY ACTIVITY ABSORPTION RENTS Submarket/ Building Size Bldgs Total Inventory Completions Current Qtr Under Construction Vacancy Vacancy Prior Qtr Availability Sales Activity Number of Sales Lease Activity Number of Leases Total Gross Activity Current Qtr Total Gross Activity YTD Net Absorption Current Qtr Net Absorption YTD Weighted Avg Asking Lease Rates LAX/ES/HAWTHORNE 10,000-19, ,280, % 0.6% 1.2% ,600-10,000-56,800 $ ,000-39, ,815, % 2.8% 3.3% , , ,700 70, ,400 $ ,000-69, ,824, % 0.0% 1.4% ,600-20, ,500 $ ,000-99, ,032, % 0.0% 0.7% , , , $ , , ,542, , % 0.0% 1.1% , ,200 $ , , ,664, % 2.7% 2.7% , ,600 $ , ,048, % 0.0% 0.0% N/A Subtotal ,207, , % 0.9% 1.5% , ,800 1,258,400 40,000-20,100 $1.10 GARDENA/HARBOR FWY 10,000-19, ,116, % 0.2% 1.3% 23, , , ,500-21,100-9,200 $ ,000-39, ,285, % 0.4% 1.2% 57, , , ,200-27,500-40,300 $ ,000-69, ,372, , % 0.5% 1.1% , , ,300-10, ,100 $ ,000-99, ,930, % 0.0% 0.5% , ,200 $ , , ,397, , % 2.6% 2.7% , , , , ,400 $ , , , % 0.0% 0.0% N/A 500, % 0.0% 0.0% N/A Subtotal ,358, , % 0.7% 1.3% 80, , ,500 1,716,700 64, ,200 $0.69 TORRANCE 10,000-19, ,750, % 0.4% 1.2% , ,300 97,800 10,200-36,600 $ ,000-39, ,890, , % 4.9% 6.7% , , ,200 60,900 36,600 $ ,000-69, ,883, % 1.9% 0.6% , , ,400 50,800 32,200 $ ,000-99, ,778, % 1.1% 2.9% , , , ,500 $ , , ,420, % 0.4% 4.2% ,800-12,600-35,000 $ , , ,754, % 0.0% 3.3% $ , ,599, % 0.0% 0.0% $0.62 Subtotal ,075, , % 1.4% 3.2% , , , ,300 89,700 $0.79 CARSON/COMPTON/RD 10,000-19, ,570, , % 1.0% 0.4% , , ,300 21,100-13,300 $ ,000-39, ,372, % 1.8% 4.0% 35, , , ,900 92, ,700 $ ,000-69, ,245,300 63, % 1.0% 3.0% , , ,300 78, ,100 $ ,000-99, ,106, % 2.2% 4.8% 84, , , ,700 96,100 67,900 $ , , ,902, , % 1.2% 4.9% , ,200 2,249, , ,100 $ , , ,455, , % 1.1% 5.7% , ,000 $ , ,047, , % 0.0% 0.0% , , , , ,000 $0.64 Subtotal ,699,700 1,070, , % 1.3% 4.4% 119, ,685, ,804,600 5,507, ,300 1,526,500 $0.71 LB/HARBOR CITIES 10,000-19, ,822, % 0.6% 2.0% 27, , , ,700-22,200-15,700 $ ,000-39, ,362, % 0.4% 2.6% 20, , , ,400 1, ,700 $ ,000-69, ,609, % 0.9% 1.9% ,900 1,700 1,500 $ ,000-99, ,287, % 4.7% 9.0% , $ , , ,995, , , % 0.9% 0.9% , , , , ,000 $ , , ,460, % 0.0% 0.0% $ , ,905, % 0.0% 0.0% $0.52 Subtotal ,443, , , % 0.8% 2.1% 47, , , , , ,500 $0.81 MARKET TOTAL 10,000-19, ,538, , % 0.5% 1.3% 50, , , ,900-22, ,600 $ ,000-39, ,725, , % 1.8% 3.3% 112, , ,000 1,981, ,900 92,300 $ ,000-69, ,935,500 63, , % 0.8% 1.9% , ,300 1,903, , ,400 $ ,000-99, ,134, % 1.7% 3.7% 84, , ,700 1,309,800 96, ,600 $ , , ,259, , , % 1.1% 3.9% , ,500 3,485, ,400 1,025,700 $ , , ,590, , % 0.9% 4.0% , ,600 $ , ,600, , % 0.0% 0.0% , , , , ,000 $0.62 Total ,784,588 1,314,500 1,177, % 1.1% 2.9% 246, ,064, ,310,500 10,237,800 1,356,400 2,365,800 $0.75 5

6 Definitions of key terms in this report Total Rentable Square Feet: Industrial space in buildings with 10,000 or more of industrial space. Includes speculative as well as owner-occupied buildings. Excludes Research & Development (R&D) buildings (industrial buildings with at least 30% office build-out, 3/1000 parking ratio and a high level of finish). Excludes space that is under-construction or renovation. Vacancy: Space in existing buildings that is vacant and immediately available during the quarter for direct lease, for sublease or for sale, plus space that is vacant but not available for direct lease or sublease. Availability: All space that is being currently marketed for occupancy, includes space which may be currently occupied or which may be under construction or renovation. 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). Gross Activity: Square feet sold and leased for all known transactions completed during the quarter. Excludes lease renewals. Excludes investment sale transactions. Weighted Average Asking Rental Rates: Weighted by square feet available for direct lease. Data is based on triple net rents, and excludes expenses such as taxes, insurance, maintenance, janitorial service and utilities. Reported on a monthly, per basis. Construction Completions: 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. 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/greaterlosangeles. 554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 UNITED STATES: South Bay Office License No Rosecrans Ave, Suite 3301 El Segundo, CA > $2.5 billion in annual revenue > 2.0 billion square feet under management > Over 16,100 professionals TEL: FAX: 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. JOHN HOLLINGSWORTH Executive Managing Director THOMAS GALVIN Research Analyst Research Services 6