>> Industrial Rents Continue Upward

Research & Forecast Report South Bay INDUSTRIAL Q1 2017 Accelerating success. >> Industrial Rents Continue Upward Key Takeaways > Industrial rents increased $0.03 P NNN over the quarter to $0.78 P NNN. Rents have increased 13% over the last 12 months and are at their highest ever point. > Net absorption was 457,500 this quarter as the seond portion of the recently completed Brickyard project was leased. > Sales and leasing activity totaled 3,038,200 broken out into 10 sales (312,400 ) and 53 leases (2,725,800 ). > There is 1,505,400 of new space currently under construction which will finish in the next 12 months. > Vacancy has decreased 20 basis points to 0.8% the lowest recorded vacancy rate ever for the region. Market Indicators Relative to prior period Q1 2017 Forecast Vacancy Net Absorption Construction Rental Rate Summary Statistics South Bay, Q1 2017 Vacancy Rate 0.8% Change from Q2 16 (Basis Points) -20 BPS Net Absorption 457,500 Construction Completions 15,200 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, Q1 2017 Average Asking Rent Change from Q1 16 $0.78 P NNN +$0.09 P NNN Y.O.Y. Change (%) +13.0% Labor Force South Bay, Q1 2017 12-mo Employment Growth (%) 12-mo Actual Employment Change Construction Manufacturing Transportation, Trade & Utilities 0.9% -2.4% 1.1% +1,200-8,700 +8,700

Vacancy > The vacancy rate declined this quarter by 20 basis points to 0.8%. The vacancy rate is currently at its lowest level ever recorded. > Vacancy is tightest in the LAX / ES / Hawthorne submarket at 0.5% followed by the Torrance submarket at 0.6%. > Forecast: New supply may bring some relief in vacancy rates, but with only 1.5 million of supply on the horizon we may be see sub 1% vacancy in the South Bay for much of 2017. Absorption and Leasing Activity > Industrial demand reported 457,500 of positive net absorption this quarter. > Sales and leasing activity totaled 3,038,200 this quarter. This was broken out into 10 sales (312,400 ) and 53 leases (2,725,800 ). > 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 $0.03 P NNN over the quarter to end at $0.78 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. Historical Vacancy v. Rents South Bay Q1 13-17 $P PER MONTH (NNN) 0.8 0.75 0.7 0.65 0.6 0.55 0.5 0.45 RENTS VACANCY Net Absorption by Submarket South Bay Q1 17 600,000 500,000 400,000 300,000 200,000 100,000 0 (100,000) (200,000) (300,000) (189,300) GARDENA/HARBOR FWY (23,600) 46,000 Historical Leasing Activity South Bay Q1 13-17 5000000 LB/HARBOR CITIES LAX/ES/HAWTHORNE 95,400 TORRANCE 5% 4% 3% 2% 1% 0% % VACANT (TOTAL) 529,000 CARSON/COMPTON/RD 4000000 3000000 2000000 1000000 0 2

Construction > There was 15,200 of new supply in a single project. > There remains 1,505,400 of space currently under construction; an incredibly small amount for a 213.3 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 2017. Development will remain limited to build to suit projects or creative rehabilitation of under performing space. Historical Net Absorption & Construction Completions South Bay Q1 13-17 3000000 2500000 2000000 1500000 1000000 500000 NET ABSORPTION CONSTRUCTION COMPLETIONS Investment Trends 0 > Cap rates continue to remain tight in Los Angeles County, averaging 5.9% in Q1 2017. > 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 > 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. > 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. Investment Trends Chart Los Angeles County Q1 13-17 Unemployment Rate Los Angeles County February 2017 5.1% 4.9% 4.9% 4.8% 4.8% 4.7% 4.7% 4.6% 4.6% 8.0% 7.0% 6.0% 4.0% 3.0% 2.0% 1.0% 0.0% 4.7% Average Price Per sf Average Cap Rate 4.8% $180 $160 $140 $120 $100 $80 $60 $40 $20 United States California Los Angeles County $0 3

Market Description The South Bay industrial market includes 213.3 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 1980. 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 Q1 2017 SALES ACTIVITY PROPERTY ADDRESS SIZE SALE PRICE PRICE P BUYER SELLER 18554 Susana, Rancho Dominguez 104,300 $12 Million $115 P IPT South Bay Ahmadinia MT Trust 1920 Acacia, Compton 45,300 $7.1 Million $157 P Terreno Acacia, LLC Appliance Recycling Centers 21640 Wilmington, Carson 50,000 $7.0 Million $140 P Progressive Realty Partners Artemis Pet Food, Inc. 245 157th, Gardena 70,600 $6.6 Million $94 P 157th RE Management, LLC Alcoa Vernon, LLC LEASING ACTIVITY PROPERTY ADDRESS LEASED LEASE TYPE BLDG TYPE LESSEE LESSOR 1701 Central, Compton 479,300 Direct-New Distribution Best Bey Clarion 2211 Carson, Carson 270,800 Direct-New Distribution Yusen Logistics ProLogis 20943 Maciel, Carson 176,000 Direct-New Distribution Capitol Logistics Robert Curry 2626 Vista Industrial, Compton 163,500 Direct-New Distribution CNR International ProLogis MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SUBMARKET STATUS ESTIMATED COMPLETION 20333 Normandie, Torrance Bridge Development 512,500 Torrance Under Construction Q2 2018 4800 Conant, Long Beach Sares Regis 219,300 Long Beach Under Construction Q2 2017 4350 Conant, Long Beach Sares Regis 140,400 Long Beach Under Construction Q2 2017 4

INDUSTRIAL OVERVIEW Q1 2017 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 10,000-19,999 385 5,280,400 0 0 1.0% 0.8% 1.5% 0 0 0 0 0 0-12,600-12,600 $1.20 20,000-39,999 283 7,815,000 0 0 1.5% 1.3% 3.2% 0 0 93,900 4 93,900 93,900-11,600-11,600 $1.12 40,000-69,999 93 4,824,300 0 0 0.0% 0.4% 2.3% 0 0 20,100 1 20,100 20,100 20,100 20,100 $0.99 70,000-99,999 38 3,032,200 0 0 0.7% 0.0% 2.8% 0 0 0 0 0 0-21,100-21,100 $1.09 100,000-249,999 37 5,542,800 0 149,000 0.0% 0.0% 0.0% 0 0 61,300 2 61,300 61,300 0 0 N/A 250,000-499,999 8 2,664,000 0 0 0.0% 2.7% 0.0% 0 0 71,200 1 71,200 71,200 71,200 71,200 N/A 500,000+ 7 7,048,600 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Subtotal 851 36,207,300 0 149,000 0.5% 0.6% 1.4% 0 0 246,500 8 246,500 246,500 46,000 46,000 $1.11 GARDENA/HARBOR FWY 10,000-19,999 511 7,115,900 0 0 0.2% 0.5% 1.2% 14,800 1 61,400 4 76,200 76,200 18,000 18,000 $0.76 20,000-39,999 310 8,247,800 0 0 0.8% 0.8% 1.7% 0 0 0 0 0 0 0 0 $0.80 40,000-69,999 169 8,582,900 0 0 1.5% 0.6% 2.4% 0 0 10,000 1 10,000 10,000-77,800-77,800 $0.82 70,000-99,999 47 3,860,100 0 41,100 0.0% 0.0% 0.0% 0 0 29,900 2 29,900 29,900 0 0 N/A 100,000-249,999 41 5,397,720 0 100,600 2.7% 0.3% 2.7% 0 0 0 0 0 0-129,500-129,500 $0.59 250,000-499,999 1 256,000 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A 500,000+ 0 0 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Subtotal 1079 33,460,420 0 141,700 1.1% 0.5% 1.7% 14,800 1 101,300 7 116,100 116,100-189,300-189,300 $0.70 TORRANCE 10,000-19,999 202 2,739,000 0 0 0.4% 0.0% 1.2% 0 0 0 0 0 0-11,200-11,200 $0.85 20,000-39,999 175 4,890,000 0 30,500 2.9% 3.6% 5.9% 0 0 73,800 3 73,800 73,800 36,700 36,700 $0.69 40,000-69,999 77 3,883,900 0 0 0.6% 0.6% 0.6% 0 0 0 0 0 0 0 0 $0.72 70,000-99,999 34 2,778,000 0 0 0.0% 1.1% 1.0% 0 0 36,300 2 36,300 36,300 31,500 31,500 $0.84 100,000-249,999 47 6,420,400 0 0 0.0% 0.6% 1.7% 0 0 161,700 3 161,700 161,700 38,400 38,400 $0.85 250,000-499,999 13 4,454,300 0 0 0.0% 0.0% 3.5% 0 0 0 0 0 0 0 0 $0.63 500,000+ 5 2,599,100 0 512,500 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Subtotal 553 27,764,700 0 543,000 0.6% 1.0% 2.6% 0 0 271,800 8 271,800 271,800 95,400 95,400 $0.76 CARSON/COMPTON/RD 10,000-19,999 256 3,585,200 15,200 0 0.4% 0.4% 0.4% 15,200 1 37,000 2 52,200 52,200 0 0 $0.83 20,000-39,999 331 9,372,100 0 0 0.3% 0.8% 1.7% 153,400 5 78,200 2 231,600 231,600 48,000 48,000 $0.78 40,000-69,999 235 12,245,300 0 0 0.7% 0.9% 2.5% 96,000 2 231,700 6 327,700 327,700 25,400 25,400 $0.69 70,000-99,999 133 10,960,900 0 0 1.0% 1.4% 3.1% 0 0 168,800 5 168,800 168,800 40,900 40,900 $0.74 100,000-249,999 223 33,747,500 0 201,000 1.0% 0.8% 3.7% 0 0 747,000 6 747,000 747,000-49,600-49,600 $0.75 250,000-499,999 33 10,455,400 0 0 1.2% 5.7% 1.2% 0 0 750,100 2 750,100 750,100 464,300 464,300 $0.82 500,000+ 2 1,047,300 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Subtotal 1213 81,413,700 15,200 201,000 0.9% 1.5% 2.7% 264,600 8 2,012,800 23 2,277,400 2,277,400 529,000 529,000 $0.79 LB/HARBOR CITIES 10,000-19,999 567 7,822,100 0 0 1.2% 0.8% 2.0% 0 0 40,500 3 40,500 40,500-26,100-26,100 $0.76 20,000-39,999 317 8,362,900 0 0 0.6% 0.4% 2.5% 33,000 1 32,900 3 65,900 65,900-17,400-17,400 $0.82 40,000-69,999 93 4,609,100 0 0 0.0% 0.4% 1.0% 0 0 20,000 1 20,000 20,000 20,000 20,000 $0.66 70,000-99,999 28 2,287,300 0 0 4.7% 4.7% 11.4% 0 0 0 0 0 0-100 -100 $0.65 100,000-249,999 37 4,995,700 0 470,700 0.9% 0.9% 0.9% 0 0 0 0 0 0 0 0 $0.85 250,000-499,999 8 2,460,400 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A 500,000+ 5 3,905,800 0 0 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Subtotal 1055 34,443,300 0 470,700 0.8% 0.8% 2.1% 33,000 1 93,400 7 126,400 126,400-23,600-23,600 $0.81 MARKET TOTAL 10,000-19,999 1921 26,542,600 15,200 0 0.7% 0.6% 1.4% 30,000 2 138,900 9 168,900 168,900-31,900-31,900 $0.95 20,000-39,999 1416 38,687,800 0 30,500 1.0% 1.2% 2.7% 186,400 6 278,800 12 465,200 465,200 55,700 55,700 $0.90 40,000-69,999 667 34,145,500 0 0 0.7% 0.7% 2.0% 96,000 2 281,800 9 377,800 377,800-12,300-12,300 $0.79 70,000-99,999 280 22,918,500 0 41,100 1.1% 1.3% 3.1% 0 0 235,000 9 235,000 235,000 51,200 51,200 $0.79 100,000-249,999 385 56,104,120 0 921,300 0.9% 0.7% 2.8% 0 0 970,000 11 970,000 970,000-140,700-140,700 $0.79 250,000-499,999 63 20,290,100 0 0 0.6% 3.3% 1.4% 0 0 821,300 3 821,300 821,300 535,500 535,500 $0.78 500,000+ 19 14,600,800 0 512,500 0.0% 0.0% 0.0% 0 0 0 0 0 0 0 0 N/A Total 4751 213,289,400 15,200 1,505,400 0.8% 1.0% 2.2% 312,400 10 2,725,800 53 3,038,200 3,038,200 457,500 457,500 $0.78 5

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. 396 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 79 EMEA: 111 UNITED STATES: South Bay Office License No. 01908231 2121 Rosecrans Ave, Suite 3301 El Segundo, CA 90245 > $2.6 billion in annual revenue > 2.0 billion square feet under management > Over 15,000 professionals TEL: +1 310 787 1000 FAX: +1 310 381 2500 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