>> Demand Remains Strong As Vacancy Falls

Research & Forecast Report ORANGE COUNTY INDUSTRIAL Q2 2017 Accelerating success. >> Demand Remains Strong As Vacancy Falls Key Takeaways > The vacancy rate decreased by 20 basis points to 2.5% this quarter. Vacancy stood at 2.8% one year ago. > Due to decreasing vacancy rates, asking rents increased to $0.84 PSF NNN, a 13.5% increase from one year ago. > Industrial demand was positive, recording 305,100 square feet (SF) of net absorption. > One project completed construction with only 195,500 SF remaining under construction. > As market conditions remain tight and quality industrial space remains scarce, asking rental rates are expected to rise by another 10% to 15% by the end of 2018. Market Indicators Relative to prior period Q2 2017 Forecast Vacancy Net Absorption Construction Rental Rate Summary Statistics Orange County, Q2 2017 Vacancy Rate 2.5% Change from Q1 17 (Basis Points) Net Absorption Construction Completions Under Construction -20 BPS 305,100SF 181,100 SF 232,600 SF Orange County Industrial Market The Orange County industrial market closed mid-year on a positive note as net absorption recorded positive 305,100 SF. There is a strong demand for new industrial buildings as developers are challenged with finding available infill sites. Industrial product is expected to continue depleting due to many properties being sold as land for multifamily redevelopment or converted to creative office space. Asking Rents Orange County, Q2 2017 Orange County Industrial Market Average Asking Rent $0.84 NNN Change from Q1 17 $0.04 Y.O.Y. Change (%) 13.5% Orange County Labor Force Orange County, Q2 2017 The industrial market has evolved to handle niche technology hub industries and specialty retail. The market is focused on smaller value-add manufacturing buildings that have a large R&D component. As such, rents for industrial space tend to be higher in Orange County compared to neighboring markets. 12-mo Employment Growth (%) 12-mo Actual Employment Change Construction Manufacturing Transportation, Trade & Utilities 3.8% -2.2% -1.1% +3,700-3,400-3,000

Vacancy > In second quarter, total vacancy rate decreased 20 basis points from last quarter to 2.5%. > Space remains scarce in Orange County, with the availability rate hovering at 3.8%. > Vacancy is tightest for buildings ranging between 1-9,999 SF at 1.5% and buildings 70,000-99,999 SF have the highest vacancy rate at 3.2%. > FORECAST: With only 195,500 SF of space remaining under construction and strong industrial demand remains, vacancy rates are expected to remain at historic low levels. Historical Vacancy v. Rents O.C. Market Q2 13-17 $ PSF PER MONTH (NNN) $0.90 Rents Vacancy 6% $0.85 5% $0.80 4% $0.75 3% $0.70 2% $0.65 $0.60 1% % VACANT Absorption and Leasing Activity > The Orange County industrial market recorded positive net absorption of 305,100 SF. $0.55 2Q13 2Q14 2Q15 2Q16 2Q17 0% > North County recorded the largest amount of positive net absorption at 313,000 SF while the West County reported the lowest amount at negative -269,300 SF of space this quarter. The negative absorption stems from ilad, Inc. moving from Cypress and relocating their operations to Fontana. Net Absorption by Submarket O.C. Market Q2 13-17 400,000 313,000 300,000 > Among the direct new leases signed this quarter were Amazon taking another 238,270 SF at 6400 Valley View in Buena Park and Primary Color Systems signing 187,500 SF at 11130 Holder St in Cypress. > FORECAST: Net absorption is expected to flatten as new inventory remains scarce. SQUARE FEET 200,000 100,000 0 (100,000) 48,600 212,800 (200,000) Rental Rates > The weighted average asking rental rate for Orange County recorded at $0.84 per square foot (PSF) NNN, up 13.5% from the $0.74 PSF NNN reported one year ago. > Rents have steadily risen over the past three years as industrial tenant supply options remain limited. > Average asking rates were highest in the South County submarket at $0.99 PSF NNN and lowest in the West County submarket at $0.79 PSF NNN. > FORECAST: Tenant demand for industrial space is strong and supply is limited. Asking rental rates will continue to trend upward by 10% to 15% by the end of 2018. (300,000) (269,300) WEST AIRPORT SOUTH NORTH Historical Sales & Leasing Activity O.C. Market Q2 13-17 SQUARE FEET 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 2Q13 2Q14 2Q15 2Q16 2Q17 2

Construction > During second quarter there was one project totaling 181,100 SF delivered to the market at 4150 N Palm St in Fullerton. > There are two buildings currently under construction totaling 232,600 SF. The projects are expected to be completed by the second half of 2017. > FORECAST: Industrial development is a challenge in Orange County as many industrial properties and development sites are converted to residential and other commercial uses. Investment Trends > Investment volume for industrial properties decreased by 3.8% compared to midyear 2016. Sales volume recorded at $143.5 million compared to $286.4 million last quarter. > Investors are expected to remain bullish in the Orange County market as available supply remains limited. > Investment sales prices have increased by 26% compared to this time last year currently averaging $184 PSF. > FORECAST: With minimal federal interest rate (1.16%) increases and investors looking for development opportunities, investment activity is expected to remain steady through 2017. Outlook The Orange County industrial market continues to move forward with positive momentum. With minimal increase in available supply, asking rental rates have climbed above 2008 peak values of $0.78-$0.80 PSF NNN. Despite positive market fundamentals, tenants are struggling to find future space options to meet their needs given the lack of available inventory. Historical Net Absorption & Construction Completions Q2 13-17 SQUARE FEET 1,000,000 750,000 500,000 250,000 - (250,000) (500,000) (750,000) (1,000,000) Investment Trends Chart 2010-2017 $200.00 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 Net Absorption Completions 2Q13 2Q14 2Q15 2Q16 2Q17 2010 2011 2012 2013 2014 2015 2016 2017 $/PSF Cap Rate Unemployment Rate U.S., C.A. & O.C. May 2017 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 6.0% 4.0% 4.1% 4.2% 3.2% 2.0% 0.0% UNITED STATES CALIFORNIA ORANGE COUNTY 3

Market Description The Orange County industrial market is a large market comprised of 192.5 million SF representing 17% of the total industrial space in the greater Los Angeles Basin. Most of the space (68%) is in small to medium sized buildings, with the balance in big box space (100,00+ SF). The market includes many mid-sized manufacturers and distributors from a wide array of industries, including information, technology, electronics, food, apparel and communications. These firms pay a premium to be in the midst of Orange County's highly educated labor force and concentration of high-end firms and distributors. Submarket Map RECENT TRANSACTIONS & MAJOR DEVELOPMENTS Orange County Industrial Market Q2 2017 SALES ACTIVITY PROPERTY ADDRESS SIZE SF SALE PRICE PRICE PSF BUYER SELLER 1650 Sunflower Ave, Costa Mesa 112,000 SF $33.4 Million $298 PSF BLT Enterprises Sovereign Capital 5455 E La Palma Ave, Anaheim 127,100 SF $15.9 Million $125 PSF Calton Corporation Clarion Partners 6388-6400 Artesia Blvd, Buena Park 103,400 SF $15.0 Million $145 PSF Brumleu Investments Henry Cohen 1654-1700 S Lewis St, Anaheim 135,600 SF $24.7 Million $182 PSF Zuma Forest Place Associates 1311 Orangethorpe, Fullerton 15,200 SF $2.4 Million $159 PSF Mojave Capital Management Gallrado LLC LEASING ACTIVITY PROPERTY ADDRESS LEASED SF LEASE TYPE BLDG TYPE LESSEE LESSOR 6400 Valley View, Buena Park 238,270 SF Direct - New Distribution Amazon Catellus Development Group 11130 Holder St, Cypress 187,500 SF Direct - New Distribution Primary Color Systems Stockbridge 25892-25902 Towne Centre Dr, Foothill Ranch 130,700 SF Direct - New Distribution SeneGence International LBA Realty 2100 E Valencia Dr, Fullerton 112,700 SF Direct - New Distribution California Hi-Lites MetLife 6201-6221 Knott Ave, Buena Park 102,400 SF Direct - New Distribution Flexport MCDC MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SF SUBMARKET STATUS ESTIMATED COMPLETION 1710 S Anaheim Blvd, Anaheim Panattoni Development 144,000 SF Airport Area Under Construction 4Q 2017 1675 Deere Ave, Irvine West Wing Corporation 51,450 SF Airport Area Under Construction 3Q 2017 4

EXISTING PROPERTIES CONSTRUCTION VACANCY AVAILABILITY ACTIVITY ABSORPTION RENTS Submarket/ Building Size Bldgs Total Inventory SF Completions Current Qtr SF Under Construction Vacancy Vacancy Prior Qtr SF Availability Sales Number of Activity SF Sales Lease Activity SF Number of Leases Total Gross Activity Current Qtr SF Total Gross Activity YTD SF Net Absorption Current Qtr SF Net Absorption YTD SF Weighted Avg Asking Lease Rates AIRPORT 1-9,999 388 2,776,200 0 0 1.1% 0.7% 3.3% 11,500 3 21,125 4 32,625 85,625 (12,100) 800 $1.69 10,000-39,999 1,194 22,481,900 0 0 2.0% 2.0% 2.9% 100,200 5 295,800 15 396,000 832,400 (600) (74,400) $1.04 40,000-69,999 152 7,696,200 0 51,500 3.1% 2.3% 7.2% 0 0 55,100 1 55,100 224,900 (60,100) (134,500) $0.88 70,000-99,999 65 5,325,000 0 0 5.4% 6.2% 2.3% 0 0 51,100 1 51,100 153,000 11,400 (71,000) $0.77 100,000 + 70 11,518,000 0 0 3.8% 4.7% 6.2% 0 0 0 0 0 170,700 110,000 (50,000) $0.72 SUBTOTAL 1,869 49,797,300 0 51,500 2.9% 3.1% 4.2% 111,700 8 423,125 21 534,825 1,466,625 48,600 (329,100) $0.89 NORTH 1-9,999 520 3,691,200 0 0 1.1% 0.7% 2.0% 27,900 5 15,300 3 43,200 114,000 (13,700) (21,400) $0.87 10,000-39,999 1,800 33,233,500 0 0 2.1% 2.6% 2.4% 246,100 12 515,300 18 761,400 1,639,100 175,800 (105,000) $1.00 40,000-69,999 245 12,795,100 0 0 1.7% 1.2% 2.9% 90,000 2 72,200 2 162,200 324,800 (57,700) (85,200) $0.73 70,000-99,999 87 6,888,800 0 0 2.2% 1.4% 2.7% 0 0 12,600 1 12,600 155,100 (53,400) (53,400) $0.84 100,000 + 148 30,776,900 181,100 144,000 2.8% 3.2% 4.0% 127,100 1 0 0 127,100 180,100 262,000 734,800 $0.65 SUBTOTAL 2,800 87,385,500 181,100 144,000 2.2% 2.4% 3.0% 491,100 20 615,400 24 1,106,500 2,413,100 313,000 469,800 $0.78 SOUTH 1-9,999 226 1,458,200 0 0 2.4% 2.4% 4.4% 0 0 25,900 4 25,900 38,900 (1,500) (19,400) $1.24 10,000-39,999 392 7,529,200 0 0 3.2% 2.6% 5.0% 49,300 4 98,900 6 148,200 283,397 (57,300) (61,200) $1.23 40,000-69,999 46 2,303,900 0 0 2.8% 4.9% 7.4% 0 0 39,400 1 39,400 78,800 49,400 7,000 $0.94 70,000-99,999 18 1,483,700 0 0 5.2% 10.6% 20.0% 83,600 1 0 0 83,600 83,600 79,400 79,400 $0.77 100,000 + 43 8,389,700 0 0 1.9% 4.0% 2.1% 0 0 0 0 0 45,600 142,800 34,200 $0.80 SUBTOTAL 725 21,164,700 0 0 2.7% 3.9% 5.1% 132,900 5 164,200 11 297,100 530,297 212,800 40,000 $0.99 WEST 1-9,999 285 2,066,500 0 0 2.1% 2.1% 2.3% 34,600 8 28,800 5 63,400 189,850 1,800 3,300 $0.92 10,000-39,999 710 12,247,400 0 0 1.9% 1.6% 2.2% 106,300 8 129,500 5 235,800 647,000 (42,700) (16,200) $0.92 40,000-69,999 99 5,158,200 0 0 2.4% 2.1% 4.0% 0 0 14,200 1 14,200 18,960 (19,500) (62,700) $0.76 70,000-99,999 32 2,636,800 0 0 0.6% 0.0% 0.9% 0 0 24,000 1 24,000 112,500 (19,800) (19,800) $0.73 100,000 + 54 11,754,000 0 0 3.8% 0.4% 8.0% 103,400 1 0 0 103,400 110,132 (189,100) (230,000) $0.76 SUBTOTAL 1,180 33,862,900 0 0 2.6% 1.2% 4.4% 244,300 17 196,500 12 440,800 1,078,442 (269,300) (325,400) $0.79 MARKET TOTAL 1-9,999 1,419 9,992,100 0 0 1.5% 1.3% 2.5% 74,000 16 91,125 16 165,125 428,375 (25,500) (36,700) $1.18 10,000-39,999 4,096 75,492,000 0 0 2.2% 2.3% 2.8% 501,900 29 1,039,500 44 1,541,400 3,401,897 75,200 (256,800) $1.04 40,000-69,999 542 27,953,400 0 51,500 2.3% 2.0% 4.7% 90,000 2 180,900 5 270,900 647,460 (87,900) (275,400) $0.83 70,000-99,999 202 16,334,300 0 0 3.2% 3.6% 3.8% 83,600 1 87,700 3 171,300 504,200 17,600 (64,800) $0.79 100,000 + 315 62,438,600 181,100 144,000 3.1% 3.0% 4.9% 230,500 2 0 0 230,500 506,532 325,700 489,000 $0.71 TOTAL 6,574 192,210,400 181,100 195,500 2.5% 2.7% 3.8% 980,000 50 1,399,225 68 2,379,225 5,488,464 305,100 (144,700) $0.84 Note: revisions to the inventory base were made effective Q2 2017, historical data reported here reflect these revisions and may not match data reported in previous quarters. 5

Definitions of key terms in this report Total Rentable Square Feet: Industrial space in buildings with 1 SF 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 SF basis. 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. 396 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 79 EMEA: 111 > $2.6 billion in annual revenue > 2.0 billion square feet under management > Over 15,000 professionals 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. 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. UNITED STATES: Orange County Office License No. 00813140 3 Park Plaza, 12th Floor Irvine, CA 92614 CAITLIN MATTESON Research Director Research Services TEL: +1 949 474 0707 FAX: +1 949 724 5600 ROBERT CAUDILL Regional Director/O.C. 6