>> Industrial Starts Off 2016 With Positive Momentum

Research & Forecast Report ORANGE COUNTY INDUSTRIAL Q1 2016 Accelerating success. >> Industrial Starts Off 2016 With Positive Momentum Key Takeaways > Orange County Industrial continued on a positive path with net absorption recording at 199,400 square feet (SF) in first quarter. > Overall vacancy rate dropped by 10 basis points from last quarter to 2.8%. This is the same vacancy rate recorded one year ago. > 172,700 SF of new construction delivered to the West County submarket. > Buildings under 100,000 SF have a vacancy rate of 2.5%, well below the overall vacancy for the Orange County region. > As market conditions remain tight and quality industrial space remains scarce, it is expected that asking rental rates will rise by another 3% to 5% by year-end 2016. Market Indicators Relative to prior period Q1 2016 Forecast Vacancy Net Absorption Construction Rental Rate Summary Statistics Orange County, Q1 2016 Vacancy Rate 2.8% Change from Q4 15 (Basis Points) 10 BPS Net Absorption 199,400 Construction Completions 172,700 Under Construction 379,300 Orange County Industrial Market Orange County industrial market conditions remain tight with limited available space options. Although there is a strong demand for new industrial buildings in Orange County, developers are challenged with finding available infill sites and rising development costs. As a result, many industrial properties are being sold as land for multi-family residential redevelopment or converted creative office projects. Asking Rents Orange County, Q1 2016 Average Asking Rent Change from Q4 15 ($) Orange County Industrial Market $0.71 NNN $0.02 Y.O.Y. Change (%) 7.4% Orange County Labor Force Orange County, Q1 2016 Limited available industrial space in the Orange County market forces tenants to make fast real estate decisions due to the competitive pressure. 12-mo Employment Growth (%) 12-mo Actual Employment Change Construction Manufacturing Transportation, Trade & Utilities 14.7% -1.3% 1.2% 12,500-2,000 3,000

Vacancy > In first quarter, total vacancy for Orange County industrial decreased 10 basis points from last quarter to 2.8%. > Over the past 24 months, the vacancy rate has decreased 140 basis points as industrial demand continues to outpace any gains in supply. > In terms of building sizes, market conditions remain tight for smaller buildings under 40,000 SF which have a vacancy rate of 1.4% and under. > FORECAST: With minimal increase in new supply and industrial properties being sold for their land value for multi-family residential redevelopment and creative office projects, vacancy will continue to trend downward. Absorption and Leasing Activity > The Orange County industrial market recorded positive net absorption of 199,400 SF. > North County recorded the largest amount of net absorption at 192,300 SF. Most of this space stems from L&L Foods Holdings, LLC moving into the Anaheim Concourse. > Among the leases signed this quarter were C&D Zodia Inc taking 280,500 SF at 5701 Skylab Rd in Huntington Beach, L&L Foods Holdings, LLC taking 207,100 SF at the Anaheim Concourse and Premier Packaging subleasing 158,000 SF at 12131 Western Ave in Garden Grove. > FORECAST: Net absorption is expected to remain flat to positive as available tenant supply is limited. Rental Rates > The weighted average asking rental rate for Orange County recorded at $0.71 per square foot (PSF) NNN, up from $0.69 recorded one quarter 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 $0.96 PSF NNN and lowest in the North County submarket at $0.64 PSF NNN. > FORECAST: Tenant demand for industrial space is strong and supply is limited. Asking rental rates will continue to trend upward by 3% to 5% by year-end 2016. Historical Vacancy v. Rents O.C. Office Market Q1 12-16 $ PSF PER MONTH (NNN) $0.75 Rents Vacancy 6% $0.70 5% $0.65 4% $0.60 3% $0.55 2% 1Q12 1Q13 1Q14 1Q15 1Q16 Net Absorption by Submarket O.C. Office Market Q1 16 SQUARE FEET 250,000 200,000 192,300 150,000 100,000 89,900 48,400 50,000 0 (50,000) (100,000) (150,000) (131,200) AIRPORT SOUTH WEST NORTH Historical Leasing Activity O.C. Office Market Q1 12-16 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 % VACANT 1,500,000 1,000,000 1Q12 1Q13 1Q14 1Q15 1Q16 2

Construction > In first quarter, 172,700 SF of space was delivered to the market, which included 11310 Slater Ave and 11488 Slater Ave in Fountain Valley. Both properties are fully leased. > The largest project currently under development is 1225 W Imperial Hwy in Brea, consisting of 367,200 SF. There is currently 379,300 SF of industrial space under construction, which is expected to be delivered by mid-2016. > FORECAST: There is under 1 million SF of proposed industrial space expected to come online within the next few years. Investment Trends > Investment activity for industrial properties slowed during first quarter. Sales volume recorded $234.3 million compared to $288.3 million recorded one year ago. > Investors are expected to remain bullish in the Orange County market as available tenant supply remains limited. > Since 2014, the price per square foot for industrial product has average an annual increase of 17%. > FORECAST: Time will tell if industrial investors will see the same type of investment climate seen in Orange County during the past three years. Outlook The Orange County industrial market activity remains to move forward with positive momentum. There is currently 379,300 SF of industrial space under construction that will be completed by mid-2016. With minimal increase in supply, asking rental rates are expected to trend upward. As small to mid-sized local distributors and manufactures continue to expand and available supply remains low, vacancy rates will remain at historically low levels through 2016. Historical Net Absorption & Construction Completions O.C. Office Market Q1 12-16 SQUARE FEET 1,000,000 750,000 500,000 250,000 - (250,000) (500,000) (750,000) (1,000,000) Investment Trends Chart O.C. Office Market Q1 12-16 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 Net Absorption Completions 1Q12 1Q13 1Q14 1Q15 1Q16 2010 2011 2012 2013 2014 2015 2016 $/PSF Cap Rate Unemployment Rate U.S., C.A. & O.C. Feb. 2016 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 6.0% 4.9% 5.5% 4.0% 4.0% 2.0% 0.0% UNITED STATES CALIFORNIA ORANGE COUNTY 3

Market Description Orange County industrial market is a large market comprised of 192 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 Q1 2016 SALES ACTIVITY PROPERTY ADDRESS SIZE SF SALE PRICE PRICE PSF BUYER SELLER 2001-2005 E Dyer Rd, Santa Ana 366,600 SF $55,000,000 $150/PSF Heritage Village OC LLC Dyer 18 LLC 17311 Nichols Ln, Huntington Beach 114,900 SF $17,100,000 $148/PSF Rexford Industrial Realty, LP CT Realty Investors 17353 Drian Ave, Irvine 78,700 SF $11,801,000 $149/PSF Group Effort 6 LLC MDD Partners, LP 3560 Cadillac Ave, Costa Mesa 42,400 SF $7,210,000 $170/PSF Cadillac Properties, LLC Fulton Properties 12311-12321 Industry St, Garden Grove 45,000 SF $6,050,000 $167/PSF Twomey Holdings, LLC LBA Realty LEASING ACTIVITY PROPERTY ADDRESS LEASED SF LEASE TYPE BLDG TYPE LESSEE LESSOR 5701 Skylab Rd, Huntington Beach 280,500 SF Direct - New Distribution C&D Zodia Inc. Prologis 1151-1153 N Ocean Cir, Anaheim 207,100 SF Direct - New Distribution L&L Foods Holdings, LLC La Palma/Miller Phase III, LLC 12131 Western Ave, Garden Grove 158,000 SF Sublease Distribution Premier Packaging CT Realty Investors 701 Burning Tree Rd, Fullerton 156,100 SF Direct - New Distribution Brentwood Home, LLC SFERS Real Estate Corp. 1505 E Warner Ave, Santa Ana 144,800 SF Renewal R&D/Flex County of Orange Leed Warner LLC MAJOR DEVELOPMENTS PROJECT DEVELOPER SIZE SF SUBMARKET STATUS ESTIMATED COMPLETION 1225 W Imperial Hwy, Brea Pacific Industrial 367,200 SF North County Under Construction Q2 2016 2830 S Fairview St, Santa Ana BroadStreet Real Estate 12,100 SF Airport Area Under Construction Q2 2016 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 2,773,600 0 0 1.4% 1.2% 3.2% 44,900 8 21,200 6 66,100 66,100 (3,500) (3,500) $1.16 10,000-39,999 1,199 22,599,458 0 12,100 1.6% 1.4% 2.8% 133,800 7 162,900 4 296,700 296,700 (30,800) (30,800) $0.88 40,000-69,999 154 7,732,027 0 0 1.9% 2.5% 2.1% 42,400 1 190,800 4 233,200 233,200 52,600 52,600 $0.74 70,000-99,999 68 5,546,597 0 0 4.4% 3.0% 5.9% 78,700 1 49,900 1 128,600 128,600 (79,500) (79,500) $0.66 100,000 + 73 12,356,804 0 0 7.7% 7.1% 10.1% 366,600 1 323,000 2 689,600 689,600 (70,000) (70,000) $0.64 SUBTOTAL 1,882 51,008,486 0 12,100 3.4% 3.1% 4.8% 666,400 18 747,800 17 1,414,200 1,414,200 (131,200) (131,200) $0.72 NORTH 1-9,999 520 3,697,161 0 0 1.5% 0.6% 3.6% 76,200 12 56,800 6 133,000 133,000 (31,500) (31,500) $0.86 10,000-39,999 1,799 32,997,257 0 0 0.9% 1.2% 2.1% 200,400 12 197,400 8 397,800 397,800 92,400 92,400 $0.75 40,000-69,999 246 12,726,013 0 0 1.4% 1.0% 3.7% 0 0 75,500 3 75,500 75,500 (59,700) (59,700) $0.59 70,000-99,999 89 7,027,569 0 0 1.3% 2.3% 1.3% 78,000 1 109,700 2 187,700 187,700 68,200 68,200 $0.88 100,000 + 148 30,410,474 0 367,200 4.0% 4.4% 7.0% 0 0 332,200 2 332,200 332,200 122,900 122,900 $0.59 SUBTOTAL 2,802 86,858,474 0 367,200 2.1% 2.3% 4.0% 354,600 25 771,600 21 1,126,200 1,126,200 192,300 192,300 $0.64 SOUTH 1-9,999 226 1,458,221 0 0 1.5% 1.0% 3.5% 40,000 6 8,700 2 48,700 48,700 (8,000) (8,000) $1.12 10,000-39,999 393 7,524,519 0 0 2.6% 3.1% 6.2% 95,900 5 68,800 6 164,700 164,700 38,100 38,100 $1.05 40,000-69,999 46 2,305,415 0 0 3.4% 3.3% 3.9% 0 0 40,100 1 40,100 40,100 (1,900) (1,900) $0.81 70,000-99,999 17 1,388,276 0 0 6.0% 6.0% 6.0% 0 0 0 0 0 0 0 0 $0.72 100,000 + 43 8,385,775 0 0 7.9% 8.1% 7.4% 0 0 172,800 1 172,800 172,800 20,200 20,200 $0.94 SUBTOTAL 725 21,062,206 0 0 4.9% 5.1% 6.2% 135,900 11 290,400 10 426,300 426,300 48,400 48,400 $0.96 WEST 1-9,999 285 2,036,487 0 0 0.4% 1.7% 1.8% 3,500 1 7,600 1 11,100 11,100 25,500 25,500 $0.87 10,000-39,999 711 12,259,732 38,700 0 1.6% 2.0% 2.0% 125,500 7 80,400 8 205,900 205,900 53,700 53,700 $0.83 40,000-69,999 101 5,288,928 0 0 4.4% 2.5% 6.2% 45,000 1 158,100 2 203,100 203,100 (101,200) (101,200) $0.69 70,000-99,999 31 2,530,380 0 0 0.0% 0.0% 3.4% 0 0 0 0 0 0 0 0 $0.60 100,000 + 54 11,754,010 134,000 0 3.6% 4.6% 6.9% 114,900 1 102,600 2 217,500 217,500 111,900 111,900 $0.65 SUBTOTAL 1,182 33,869,537 172,700 0 2.6% 2.8% 4.4% 288,900 10 348,700 13 637,600 637,600 89,900 89,900 $0.69 MARKET TOTAL 1-9,999 1,419 9,965,469 0 0 1.2% 1.1% 2.8% 164,600 27 94,300 15 258,900 258,900 (17,500) (17,500) $0.98 10,000-39,999 4,102 75,380,966 38,700 12,100 1.4% 1.6% 2.7% 555,600 31 509,500 26 1,065,100 1,065,100 153,400 153,400 $0.87 40,000-69,999 547 28,052,383 0 0 2.3% 1.9% 3.7% 87,400 2 464,500 10 551,900 551,900 (110,200) (110,200) $0.66 70,000-99,999 205 16,492,822 0 0 2.5% 2.5% 3.6% 156,700 2 159,600 3 316,300 316,300 (11,300) (11,300) $0.69 100,000 + 318 62,907,063 134,000 367,200 5.2% 5.5% 7.6% 481,500 2 930,600 7 1,412,100 1,412,100 185,000 185,000 $0.66 TOTAL 6,591 192,798,703 172,700 379,300 2.8% 2.9% 4.5% 1,445,800 64 2,158,500 61 3,604,300 3,604,300 199,400 199,400 $0.71 Note: revisions to the inventory base were made effective Q1 2016, 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. 554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 > $2.5 billion in annual revenue > 2.0 billion square feet under management > Over 16,100 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 MARTIN PUPIL President, Western Region TEL: +1 949 474 0707 FAX: +1 949 724 5600 ROBERT CAUDILL Regional Director/O.C. CAITLIN MATTESON Research Director Research Services 6