RESEARCH & FORECAST REPORT

Transcription

1 Q INDUSTRIAL OAKLAND CALIFORNIA RESEARCH & FORECAST REPORT Industrial Market Review I-80/I-880 Corridor Closes Out with Strongest th Quarter on Record The I-80/I-880 Corridor Industrial Market capped an extremely solid year with a flurry of larger transactions in the fourth quarter. Overall vacancy decreased across all product lines, from.8 percent to.9 percent. This decrease in vacancy marked the eleventh time in the last twelve quarters that overall vacancy has trended downward. With a scarcity of product available on the market for users and tenants to secure, the final quarter of the year saw multiple investment purchases as investors looked to increase their Area footprint by adding quality leased product to their portfolios. MARKET INDICATORS VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE Q- SELECTED MARKET STATISTICS > > Year-to-date gross absorption is 6,6,9 square feet > > Vacancy this quarter was.9 percent compared to.8 percent last quarter > > Year to date net absorption is,,089 square feet Projected Q- One of the most notable investor sale transactions was the purchase of Central Plaza in by Terreno Realty. The seller, Westcore Properties, purchased the property in 0 with a fair amount of existing vacancy in the 7,000 square foot multi-tenant industrial and retail business park. Two years were spent repositioning and re-tenanting the asset, and they seized the opportunity to sell into a very hot investment market. What made the purchase even more noteworthy was the inclusion of the neighboring Central Pacific Industrial Development, also owned by Westcore, on a forward commitment. The former Chronicle site is being redeveloped by Westcore and is currently under construction. Construction is scheduled for completion for the second quarter 0, and will be comprised of four warehouse/light industrial buildings totaling approximately 0,000 square feet. Terreno Realty is in contract to purchase at the completion of construction. Another larger investment transaction was the purchase of the, square foot multi-tenant warehouse building at West Cutting Boulevard in Richmond. The project was sold by Baird Investment to Industrial Income Trust, and is predominantly leased out to two tenants, both of whom have recently inked long term lease extensions. Activity during the fourth quarter was not all investment related as there were also multiple significant user purchases and leases. For the past couple of years there has been a trend of Peninsula based companies coming to the East as prices continue to grow on the Peninsula and quality available I-80/I-880 CORRIDOR OVERALL INDUSTRIAL MARKET Vacancy has decreased throughout for the twelfth consecutive quarter. We expect moderate but steady rental rate growth to continue into 0.

2 RESEARCH & FORECAST REPORT Q INDUSTRIAL product remains very limited. This trend continued in the fourth quarter as two previously Peninsula based companies purchased warehouse facilities along the I-880 Corridor. Shamrock Moving and Storage purchased an 8,0 square foot warehouse/distribution building located at 0 7th Street in and Belmont Wines closed on a,07 square foot facility at 8 Clawiter Road. As we progress into 0 it is widely thought that Peninsula companies will continue to look in the East market for more affordable and modern product. On the leasing front there was a high level of mid-sized activity in the final quarter, but there were not any notable large blocks of space leased other than Tesla Motors lease with Westcore Properties in Fremont. However, looking back at the year as a whole there were a total of nineteen long term new lease transactions greater than 00,000 square feet from Oakland to Fremont. These deals have directly contributed to higher asking rates across all products types and classes as demand increases and supply along the I-80 and I-880 Corridor declines. Asking rates for Class A warehouse facilities are commonly in the $0.7 - $0.69 NNN range and leases are being executed with starting rents very close to these asking rates. The strong close to the year in the above mentioned transactions along with the current tenants and buyers circling the market with 0 requirements and the progress in speculative development has led to a high level of optimism in the brokerage community as we look forward to the New Year. The market is very favorable to ownership as most quality product is fully leased or user-owned and occupied, and the demand for the available quality product continues to be very competitive. I-80/I-880 CORRIDOR WAREHOUSE/DISTRIBUTION $0. I-80/I-880 CORRIDOR R&D/FLEX MARKET I-80/I-880 CORRIDOR LIGHT INDUSTRIAL $.00 9% $0.6 7% $0.80 % % % $0. Vacancy Rate Average Asking Rent $ ALVARADO NILES ROAD, UNION CITY Terreno Realty Corporation purchased Central Plaza, a prominent three-building, 70,9 square foot Class A industrial complex in from Westcore Properties. P. COLLIERS INTERNATIONAL - OAKLAND

3 RESEARCH & FORECAST REPORT Q INDUSTRIAL RICHMOND Fourth quarter vacancy rates in the Richmond industrial market declined from year-end totals, with overall rates down to. percent from 6.8 percent, and positive net absorption in warehouse/distribution and the R&D/flex sectors. Light industrial posted a minimal amount of negative net absorption for the year. The majority of the drop in vacancy is attributed to the warehouse market in Richmond. Warehouse/distribution vacancy is presently down to.6 percent, compared to 6. percent at the close of the fourth quarter in. Light industrial vacancy is now at 6.9 percent, up from 6.6 percent a year ago, R&D/flex vacancy fell 70 basis points to 6.9 percent and year-to-date absorption is 9,86 square feet. We predict vacancy rates to trend downward for warehouse space in Richmond as the year progresses and leasing activity continues to flourish. There is still quality warehouse product available and new Class A space being built at Pinole Business Park. Investors, Developers and Users are drawn to Richmond because of its close proximity to Marin County and the Port of Oakland. Projects are fueled by a healthy regional economy and an increased demand for Class A space by tenants from Berkeley, Emeryville, and Marin County. The most significant Investment sale this quarter was the sale of a, square foot warehouse/distribution building at - West Cutting Boulevard for $8,000,000. Scannell Properties purchased a,000 square foot industrial building on 7.0 acres, with plans to add 70,000 square feet for a total of,000 square feet. Asking rental rates for all product types have fluctuated over the year, light industrial rates are down to $0. from $0. NNN psf/mo, warehouse/distribution up to $0. from NNN psf/mo, and R&D/flex average asking rates presently $0.7, up from $0.7 NNN psf/mo at the end of. Rents are projected to increase into 0 as more and more developers look to break ground on new Class A warehouse projects. The notable increase in warehouse rental rates is a direct result of the tightening of the market as more and more warehouse space has been absorbed, boosting landlord confidence to hold tight on asking rents. New Class A warehouse projects include the acre LDK redevelopment at the former Steelscapes site at 00 Atlas Avenue, where LDK will construct a new 700,000 square foot cross-dock facility. KTR Partners is under construction on 00,000 square feet of speculative development at Pinole Point Business Park with completion planned for June of 0. Other development sales include the 0 acre Navistar D.C. site at 80 Marina Way, sold to a residential developer. The light industrial and R&D/flex sectors will continue to lag behind warehouse/distribution. There is less of a demand for R&D/flex space in the Richmond submarket and the light industrial market is comprised of older, dysfunctional space that has been on the market for longer periods of time. Leandro Leandro, Lorenzo 6 Newark Newark 6 00 Ohio Avenue, Richmond December 8,000 Edward Scott Electric Light Industrial 80-8 Wright Avenue, Richmond October 7,00 Golden Gate Meat Company Light Industrial SALES ACTIVITY PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE - West Cutting Boulevard, Richmond October, I PT Richmond DC LP Warehouse/Distribution 00 Central Avenue, Richmond October 9,000 Mark Howe Light Industrial RICHMOND WAREHOUSE/DISTRIBUTION RICHMOND LIGHT INDUSTRIAL RICHMOND R&D/FLEX $.0 $.00 $0.80 $0. COLLIERS INTERNATIONAL - OAKLAND P.

4 RESEARCH & FORECAST REPORT Q INDUSTRIAL Leandro Leandro, Lorenzo OAKLAND The Oakland industrial market topped off the year with a strong finish. Warehouse vacancy went from 6.7 percent to.9 percent quarter over quarter. Industrial vacancy followed suit moving downward from. percent to.7 percent. Overall vacancy finished the year at.8 percent as compared to. percent the previous quarter. Overall rental rates stayed flat from quarter to quarter at $0. NNN per square foot. Warehouse asking rates rose from NNN asking to NNN asking in the fourth quarter, while industrial rates slid from $0.6 NNN to $0. NNN quarter to quarter. Presently, we expect rates to stabilize due to the low amount of inventory. Users remained active renewing and expanding existing leases throughout the marketplace. Premier Organics renewed and expanded in 66,7 square feet with Ellis Partners in East Oakland. Several deals were inked at Elmhurst Business Park located at 7 8th Avenue. CFS renewed in 6,70 square feet, Quik Pick Express renewed and expanded into 66,768 square feet and On The Move leased,60 square feet. Speculative warehouse development has had mixed success with Goodman Logistics Center only 8 percent leased after twelve months on the market although it is rumored that Coaster s Furniture will be moving into the remaining,000 square feet. Other development activity includes recent activity at the former Oakland Army Base in West Oakland. Lead developer Prologis has started demolition and infrastructure work at the site. Phase one will deliver 0,000 square feet of Class A warehouse in early 06. In-fill projects continue to push forward in Downtown and West Oakland. In-fill projects include the.68 acre industrial project at Filbert and West Grand has been demolished to make way for housing. Development activity will be a highlight of the 0 market in Oakland. Gross absorption activity was over 879,88 square feet for. The next four quarters look bright with similar activity as experienced in the third and fourth quarters of, Oakland will continue to move forward with low vacancy and rising rental rates due to its prime location and increasing rates in surrounding markets. 7 8th Avenue, Oakland October 6,70 CFS Warehouse/Distribution 7 8th Avenue, Oakland November 66,798 Quik Pick Express Warehouse/Distribution 7 8th Avenue, Oakland November,60 On The Move Warehouse/Distribution 60 Coliseum Way, Oakland December 6,0 Royal Coffee Warehouse/Distribution 80 8st Avenue, Oakland December 66,7 Premier Organics Industrial SALES ACTIVITY PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE 8 Adeline, Oakland October,00 Maria s Coffee Roasting Industrial VACANCY VS. ASKING FULL SERVICE RENTAL RATES VACANCY VS. ASKING FULL SERVICE RENTAL RATES OAKLAND WAREHOUSE/DISTRIBUTION OAKLAND AIRPORT LIGHT INDUSTRIAL $0. 7% $0.8 $0. $0.8 $0.6 $0. $0. % % $0.6 $0. $0.8 $0.8 % $0. $0.6 P. COLLIERS INTERNATIONAL - OAKLAND

5 RESEARCH & FORECAST REPORT Q INDUSTRIAL SAN LEANDRO Vacancy in the Leandro industrial submarket has decreased over the course of, dropping from. percent overall at the end of last year to.8 percent presently. The light industrial sector is now. percent vacant and the R&D/flex sector is 6.0 percent vacant, dropping 0 and 0 basis points respectively since year end. Warehouse/ distribution product followed suit with a 0 basis point drop since last year and positive 9,6 square feet of net absorption year to date. Leasing activity shows no sign of slowing down as demand among users and investors continues to outpace the supply available in neighboring markets; pushing users south along the I-880 Corridor into Leandro. We expect to see a further decline in vacancy rates over the next few months. Overall asking rental rates have increased significantly throughout, presently at $0.6 NNN psf/mo year over year. Warehouse/ distribution asking rates are presently compared to $0. NNN psf/mo just one year ago. Light industrial asking rates have increased to $0.66 NNN psf/mo compared to $0. NNN psf/mo at the beginning of the year. Heavy leasing activity in both markets has forced upward pressure on rates. We expect rental rates to increase an additional 0 percent by the end of 0. Landlords will benefit from historically low vacancy. The market will continue to lack available, functional space over the next several months as the I-880 Corridor continues to experience increased demand from tenants looking to expand, relocate, or renew. The trend towards a landlord favorable market will continue until more speculative development introduces new, functional space. The recent completion of the 0,000 square foot Class A, Industrial Preferred Freezer Facility at 00 Polar Way prompts us to believe that other developers will follow suit and take advantage of the flourishing industrial market in Leandro. Rental rates in the R&D/flex sector have decreased to $0.8 from $0.87 NNN psf/mo due to the lack of demand for this product type in Leandro. Overall gross absorption totaled 98, square feet in, the majority of spaces absorbed were larger blocks of warehouse/distribution space. In the fourth quarter, the New Haven Moving Equipment Company renewed 6,87 square feet of warehouse/distribution space at 0 Doolittle Drive, Reliable Liquidator signed a lease for 9,9 square feet of warehouse/ distribution space at 7 rd Avenue, RSC Roofing renewed 0,0 square feet at 88 Doolittle Drive, and Le Tote signed a,6 square foot warehouse lease at Leandro Business Park. Sales included Crosslantic s purchase of a,897 square foot multi-tenant leased investment at 8-9 Washington Avenue. Significant leasing activity this year and an increase in tour activity points to strong net absorption going into 0, as there are several large tenants looking for space in the I-880 Corridor. Investment transactions remained steady in, characterized by a combination of owner/ user, re-development, and asset acquisitions. Comstock Realty Partners, formed a joint venture to acquire a,8 square foot Leandro Leandro, Lorenzo industrial Class B building at 77 Doolittle which features office, manufacturing and distribution space, along with ample truck door positions. In addition, Terreno Realty Corporation purchased a 9,69 square foot warehouse/distribution building at 070 Burroughs. We expect this trend to continue in 0 as the Leandro market continues to retain low vacancies and experience rental rate growth. 0 Doolittle Drive, Leandro November 6,87 New Haven Moving Equipment Company Warehouse/Distribution 7 rd Avenue, Leandro November 9,9 Reliable Liquidator Warehouse/Distribution 88 Doolittle Drive, Leandro October 0,0 RSC Roofing Company Warehouse/Distribution 7 Alvarado Street, Leandro November,6 Le Tote Warehouse/Distribution SALES ACTIVITY PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE 8-9 Washington Avenue, Leandro November,897 Crosslantic LLC Light Industrial SAN LEANDRO WAREHOUSE/DISTRIBUTION SAN LEANDRO LIGHT INDUSTRIAL SAN LEANDRO R&D/FLEX 7% $.0 % $0.6 $.00 $0.9 % $0.8 $0.80 % $0.7 $0.6 $0. COLLIERS INTERNATIONAL - OAKLAND P.

6 RESEARCH & FORECAST REPORT Q INDUSTRIAL Leandro Leandro, Lorenzo HAYWARD Overall vacancy decreased significantly in. There were remarkable improvements in fundamentals across all product types. Current warehouse/ distribution rates are. percent compared to 6.8 percent a year ago, and R&D/flex vacancy is. percent compared to 7.0 percent at year-end. Light industrial vacancy decreased to. percent from.7 percent a year ago. Vacancy rates are now near or below historic lows across all product types. As industrial users continue to spill over from the Peninsula, presents itself as an ideal location for local, national, and international companies due to its easy access to Highway 9 and the I-880 Corridor. We expect vacancy rates to remain static or dip slightly over the next several quarters. There are currently five blocks of warehouse/light industrial space available in greater than 00,000 square feet. With adjacent submarkets lacking similar large blocks of space, we are expecting an extremely robust 0 for the submarket. Overall asking rental rates have increased. Presently $0.6 compared to $0.6 NNN psf/mo at the close of ; with significant increases among all product lines. Light industrial asking rates are $0.66 NNN psf/mo compared to $0. NNN psf/mo, warehouse/ distribution asking rates are $0. NNN psf/mo compared to $0.9 NNN psf/mo, and R&D/flex asking rates are back up to optimum levels at $0.7 NNN psf/ mo from NNN psf/mo. We expect both asking rates and completed lease rates to trend upward on functional space with fewer concessions given by landlords throughout 0. fared well in, boasting one of the most active fourth quarters in the I-80/I-880 Corridor industrial market second only to Oakland. Net absorption for the quarter was 8,0 square feet, the majority being large warehouse spaces. Most notably, MS International leased,7 square feet at 00 Hathaway Avenue and star Transit leased 60,80 square feet at West Winton Business Center. Other notable leases include Ke Lanf Cabinet Company leasing 6,000 square feet at 80 Lincoln Avenue, Atosa Catering Equipment leasing 0, square feet at Gateway Center, and Casa chez leasing 8,000 square feet at Winton Industrial Center. There were several notable user sales that took place during the fourth quarter. New Horizon Enterprises sold their 7,7 square foot warehouse/distribution building at 7 West Industrial Parkway to Arctic Express. M. & Joyce Hart Trust sold their light industrial building located at 86 Investment Boulevard to Invesco dba Terminix. There were also several off-market transactions that took place during the fourth quarter. Belmont Wines purchased a,07 square foot warehouse/distribution building at 8-87 Clawiter Road from Longdo Trucking. Longdo Trucking then proceeded to purchase a,600 square foot warehouse/distribution building at Alpine Way. Both were off-market transactions. In another off-market transaction, E-Recycling purchased a,9 square foot industrial building on. acres located at 70 Hayman Street from Univar. We expect investment activity to increase throughout 0 as rents continue to rise and demand expands across all tenant size ranges. Development activity this quarter includes the Weber Site on Baumberg Avenue, a planned development of six industrial buildings on. acres that will be available in the third quarter of 0. In addition, KTR plans to deliver an approximately 78,70 square foot warehouse/distribution facility in the fourth quarter of Hathaway Avenue, October,7 MS International, Inc Warehouse/Distribution 0 Alexander Court, December 60,80 star Transit Warehouse/Distribution 80 Lincoln Avenue, November 6,000 Ke Lang Cabinet Company Warehouse/Distribution 6 Danti Court, December 0, Atosa Catering Equipment Inc Warehouse/Distribution 898 West Winton Avenue, November 8,000 Casa chez Warehouse/Distribution SALES ACTIVITY PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE 8-87 Clawiter Road, December,07 Belmont Wines Warehouse/Distribution Alpine Way, December,600 Longdo Trucking Warehouse/Distribution HAYWARD WAREHOUSE/DISTRIBUTION HAYWARD LIGHT INDUSTRIAL HAYWARD R&D/FLEX $0.68 $0.6 $0.80 $0.6 $0. $0.8 P. 6 COLLIERS INTERNATIONAL - OAKLAND

7 RESEARCH & FORECAST REPORT Q INDUSTRIAL UNION CITY Rents in the industrial market have increased slightly as vacancy continues to decline; remaining vacancy in continues to be one of the lowest submarkets in the region, presently. percent, down from.9 percent at this time in. There has been a steady decrease in vacancy across light industrial and warehouse product lines while R&D product has registered a slight uptick; in the light industrial sector vacancy is currently.7 percent, warehouse/distribution at.8 percent, and R&D/flex vacancy increased to 0.. There is a continued demand for Class A space in. was a solid year for positive absorption and occupancy gains, coupled with improvements in the economy, we have seen a decline in large blocks of space for tenants. We expect vacancy and leasing activity to remain relatively stable over the next few months until all larger, functional supply has been leased. This deficiency of quality product will slow the rate of lease transactions thereafter until new construction or more viable space options come available on the market. Overall asking rental rates have increased.7 percent throughout the year, attributed to low vacancy rates. Rates are presently $0.8 compared to $0. NNN psf/mo at the end of. Both light industrial and warehouse/ distribution rates have increased over the course of the year. Light industrial average asking rates are presently NNN psf/mo up from $0.7 NNN psf/mo and warehouse/ distribution $0. NNN psf/mo, up from $0. NNN psf/mo in. R&D/flex rates have remained flat at $0.8 NNN psf/mo. This increase in rental rates is attributed to a larger demand for light industrial, warehouse/ distribution space and R&D/flex space yet in a market with very low available supply to offer. We expect to see gradual improvements in rates over the remainder of 0 as vacancy remains low and activity levels remain steady. Larger lease transactions this quarter include,000 square feet leased by Rapid Displays at Central Avenue Industrial Park and 0,0 square feet leased by Best Price Mattress at Alvarado Business Park. The most notable sale was an 8,0 square foot warehouse/ distribution facility purchased by Shamrock Moving & Storage. We expect these activity levels to persist in but will not see a high volume of sale and lease transactions due to the lack of available product in the market. When quality product is made available landlords are seeing instant activity and interest from multiple parties which leads to a very competitive leasing environment. The majority of tenants relocating to are coming from the I-880 market with a new flush of tenants and buyers relocating from the Peninsula to take advantage of cheaper rents/ sale prices as well as the close proximity to the Mateo and Dumbarton Bridges as booming economies in and the Silicon Valley drive rental rates up. Leandro Leandro, Lorenzo 6 Central Avenue, December,000 Rapid Displays Warehouse/Distribution 00 Whipple Road, October 0,0 Best Price Mattress Warehouse/Distribution SALES ACTIVITY PROPERTY ADDRESS SALE DATE SIZE BUYER TYPE 0 7th Street, October 8,0 Shamrock Moving & Storage Warehouse/Distribution UNION CITY WAREHOUSE/DISTRIBUTION UNION CITY LIGHT INDUSTRIAL UNION CITY R&D/FLEX $.00 $0.9 $0.8 $0.80 $0.7 COLLIERS INTERNATIONAL - OAKLAND P. 7

8 RESEARCH & FORECAST REPORT Q INDUSTRIAL Leandro Leandro, Lorenzo NEWARK Leasing activity increased significantly in the Newark market throughout as several large blocks of space, specifically in the light industrial and warehouse markets, were leased. Overall vacancy is 6.9 percent, down from. percent at the end of. Light industrial vacancy dropped to. percent from 0. percent and warehouse/distribution to.9 percent from 0.7 percent. This dramatic difference over the course of the year is credited to the amplified demand from Peninsula and South users in search of more affordable rental rates. Leasing activity has remained steady but users and investors eager to purchase are met with a challenge, Newark is a smaller submarket relative to its neighbors with very limited supply. R&D/flex vacancy increased to 8. percent from 7.0 percent at year-end but is expected to decrease in 0 as the overall industrial market tightens, and the regional economic growth of the and Silicon Valley economies continues to push determined tenants and users into the Newark submarket. We expect warehouse/distribution vacancy rates to uptick slightly over the next six months due to a 68,000 square foot warehouse space coming available at Mowry Distribution Center. Asking rental rates have increased, with overall rates hovering at $0.86 NNN psf compared to $0.7 NNN psf at the end of last year. Light industrial and R&D/flex product rates have decreased slightly and warehouse/distribution rates have increased, especially for Class A product, driven by strong activity throughout. Warehouse/distribution rates are up to $0.9 NNN psf/mo from $0.9 NNN psf/mo over the course of the year. Light industrial rents are down to $0.67 NNN psf/mo compared to $0.68 NNN psf/mo, and R&D/flex rates have increased to $0.9 from $0.9 NNN psf/mo. Although we anticipate rates to trend upward as the market tightens and the economy strengthens causing vacancies to decline further, rents will remain very competitive as compared to neighboring submarkets such as North Fremont and the lower Peninsula, making Newark a more affordable and attractive option. Year to date total net absorption in Newark was higher than most other submarkets within the I-880 Corridor, with,0,9 square feet of positive absorption. The largest lease transaction for the fourth quarter was Harland Clark s 6,80 square foot early renewal at 69 Mowry Avenue. Newark also saw one of the year s most notable transactions along the I-880 Corridor, which was Amazon s full building lease for the newly constructed Class A 7,60 square foot warehouse/distribution complex at Cherry Logistics Center. Larger industrial lease transactions in also included Futuris Automotive s 60,000 square foot lease at 660 Overlake Place, and Nefab Packaging s 8,0 square foot lease at 877 Central Avenue. On the user sale front, Mission Linen Supply purchased the former Bemis plant at 690 Central Avenue for a planned redevelopment. We expect tenants in the market to continue to entertain the Newark submarket for expansion and relocation requirements, with the majority of them also considering any available purchase options. Development activity has decelerated after the recent completion of the Cherry Logistics Center, and with land costs lower than most of its neighboring submarkets, Newark has become an optimum location for institutional developers and investors; unfortunately there are minimal opportunities available for both vacant land and redevelopment sites. 69 Mowry Avenue, Newark October 6,80 Harland Clark Warehouse/Distribution NEWARK WAREHOUSE/DISTRIBUTION NEWARK LIGHT INDUSTRIAL NEWARK R&D/FLEX 6 $. $0.6 $.0 $.0 $0.7 P. 8 COLLIERS INTERNATIONAL - OAKLAND

9 RESEARCH & FORECAST REPORT Q INDUSTRIAL NET ABSORPTION GROSS ABSORPTION I-80/I-880 CORRIDOR OVERALL INDUSTRIAL MARKET I-80/I-880 CORRIDOR OVERALL INDUSTRIAL MARKET,000,000,00,000,00,000,000,000,000,000,00,000,00,000,000,000,000,000 00, ,000 (00,000) EDGEWATER DRIVE, OAKLAND This 9,680 square foot warehouse/ manufacturing/ distribution facility with close proximity to the Port of Oakland is one of the few large Class A warehouses on the I-880 Corridor available for lease. P. 9 COLLIERS INTERNATIONAL - OAKLAND

10 RESEARCH & FORECAST REPORT Q INDUSTRIAL MARKET COMPARISONS INDUSTRIAL MARKET SUBTYPE BLDGS TOTAL INVENTORY DIRECT VACANT DIRECT VACANCY RATE SUBLEASE VACANT SUBLEASE VACANCY RATE TOTAL VACANT VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETED CURRENT QTR UNDER CONSTRUCTION AVG ASKING NNN RICHMOND Industrial,8,86,87 6.9% - 0.,87 6.9% 8.7% 9, (,7) - - $0. Warehouse,8,8,9.% 9,000.%,9..% (,7) 6,8 - - $0. R&D/Flex 00,9,,9 6.9% - 0.,9 6.9% 7. 6,8 9, $0.7 Total 67,6,70 60,97.9% 9,000 0.% 679,97. 6.%,877 77, OAKLAND Industrial 8,66,9,6. 70,000 0.% 6,6.7%.% 0,86 6, $0. Warehouse 7 0,990,89,6.9% 6,00.% 6,.9% 6.7% 88,6 98,8 - - R&D/Flex Total 99,6,88 977,68.9% 96,00 0.9%,7, ,,0,6 - - $0. SAN LEANDRO Industrial 60,66,80 86,96.% 8, 0.% 9,68.%. 99,78 7, $0.66 Warehouse 7,,08 0,89.,.% 8,9.9%. (,86) 9,6 - - R&D/Flex 87,80 0, , % 7,97,9 - - $0.8 Total 69 7,0,98,9., ,79..% 9,69 6,0 - - $0.6 HAYWARD Industrial 786 6,8,8,77. 0,080 0.%,7.7%.9% 06,8 0, - - $0.6 Warehouse,078,,.% 9,00 0.7% 670,.. 9,60 769,96 -,000 $0. R&D/Flex 0,0,79 9,07 0.,8. 0,88.% 0. (,909) 77, - - $0.7 Total,0,6,9,,6.% 0, 0.%,6,79..7% 8,0,0,7 -,000 $0.6 UNION CITY Industrial 6 7,88,678 0,0.7% ,0.7%. 8,76 8,0 - - Warehouse 80 7,87,6 70, ,76..,0 9,86-00,8 $0. R&D/Flex 870,67 88, , % (0), $0.8 Total 6,9,876 89,77.% ,77.%.%,89,67-00,8 $0.8 NEWARK Industrial 9,9,7 8,90.% ,90.%. (,800) 90, $0.67 Warehouse 9,9,778 76,8.9% ,8.9%.7% 0,000 8, $0.9 R&D/Flex,08,6 6,90. 0,6. 67, ,76 (,69) - - $0.9 Total,, 667,9 6. 0,6 0.9% 77,80 6.9% 7. 9,76,0,9 - - $0.86 MARKET TOTAL Industrial,606 67,76,9,86,7.7% 88,0 0.%,9,0.9%. 9,,66,0 - - Warehouse 69 6,0,67,6,78.% 69,0.,0,0.%.%,866,9, - 6,8 $0. R&D/Flex,696,6,8,766 0.% 8,96.,,96..% 7, 07, $0.8 Total,69,6,80,708,97.% 88, 0.,9,97.9%.,7,,,089-6,8 $0.6 QUARTERLY COMPARISON AND TOTALS Q-,69,6,80,708,97.% 88, 0.,9,97.9%.,7,,,089-6,8 $0.6 Q-,69,6,80,906,09.% 96,8 0.7% 6,867,909..,6,697,977,6-80,8 $0.7 Q-,69,6,80 6,87,8.,6, ,98, ,9,0,860,96 7,60 - $0.6 Q-,68,989,80 8,8,69.,7,. 9,60, (,) (,) 7,7 7,60 $0. Q-,68,68,0 7,68,7.,69,88. 8,998, % 7,09,769,786-99,6 $0. Q-,68,68,0 8,,87.9%,7,9. 9,7, 6.9% 6.9% 7,66,0,69-97,0 $0. Q-,68,68,0 8,0,07 6.,67,900. 9,887,97 6.9% 7.,,9,880,0 7,00 97,0 Q-,67,0,8 9,97, ,8 0.7% 0,89, ,9 78,9 -,09, $0.8 Q-,67,0,8 0,760, ,8 0.,60, %,7,9,8-7,7 $0.9 Q-,68,78,7,,0 7.,,70 0.9%,8,0 8.7% 9. 76,8 86,8-7,7 $0.8 Q-,8,78,7,8,99 8.,8,.%,0, %,,88 -,60 $0. Q-,67,0,8 0,760, ,8 0.,60, %,7,9,8-7,7 $0.9 COLLIERS INTERNATIONAL - OAKLAND P. 0

11 RESEARCH & FORECAST REPORT Q INDUSTRIAL GLOSSARY INDUSTRIAL DEFINITIONS Incubator: Multi-tenant buildings without dock-high loading doors that have a parking ratio lower than./,000 square feet and bay sizes lower than,00 square feet. 8 offices in 6 countries on 6 continents United States: 6 Canada: Latin America: Asia Pacific: 86 EMEA: 8 > $. billion in annual revenue >.6 billion* square feet under management > Over,800 professionals *Square footage includes office, industrial, and retail property under management. Residential property is excluded from this total. All statistics are for. Light Distribution: Light Industrial: Multi- or single-tenant buildings that include dockhigh loading doors and have bay sizes of less than,000 square feet. Multi- or single-tenant buildings without dockhigh loading doors that have a parking ratio lower than./,000 square feet and, in the case of multi-tenant buildings, bay sizes of at least,00 square feet. COLLIERS INTERNATIONAL OAKLAND 999 Harrison Street Suite 70 Oakland, CA 96 TEL FAX Flex: Multi- or single-tenant buildings without dockhigh loading doors with parking ratios in excess of./,000 square feet. Warehouse/Distribution: Multi- or single-tenant buildings that include dockhigh loading doors and have bay sizes of at least,000 square feet. GENERAL DEFINITIONS Vacant : Space in a building that is unoccupied and offered for lease by the owner of the property. MANAGING PARTNER Ken Meyersieck Executive Vice President CA License No TEL RESEARCHERS Antony Prokopiou Research Analyst II TEL Derek Daniels Research Analyst II TEL Sublease : Net Absorption: Space in a building that is offered for sublease by the primary tenant. This space may or may not be occupied. Difference in occupied square footage from one period to another. This report and other research materials may be found on our website at This report is a research document of Colliers International - Oakland, California. Questions related to information herein should be directed to the Research Department at Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. 0 Colliers International. Accelerating success. COLLIERS INTERNATIONAL - OAKLAND P.