Bay Area Suburban Office/R&D Market Overview

1. Bay Area Suburban Office/R&D Market Overview C. Michael Kamm, CEOCassidy Turley | Northern California

2. Bay Area Market Recovery vs. Stagnation? Where Are We? • Recovery? Yes…for some a boom… • Stagnation? Yes…for some…but probably not for long… • Commercial real estate demand stillcomes down to job growth

3. Change in employment From 2010 to 2011 (Thousands) Source; BLS Source: Bureau of Labor Statistics

4. Market Momentum in 2012 Job Growth, 3 month moving average, % change 1.0% Denver Oakland Houston Dallas Phoenix San Jose Columbus NY City Baltimore Strong Momentum Indianapolis Raleigh Boston Atlanta Northern NJ 0.5% Central NJ San Francisco DC Metro San Diego Cincinnati Moderate Chicago Sacramento Nashville Minneapolis Kansas City 0.0% St. Louis, Charlotte, Milwaukee Tampa Dayton Weak/Declining -1.0% Source: Bureau of Labor Statistics

5. Marin East Bay North I-680 San Francisco Tri-Valley San Mateo Silicon Valley

6. Bay Area Office/R&D Vacancy Rate Trend Source: Cassidy Turley Research

7. Bay Area Office/R&D Net Absorption Trend Combined (MM Sq. Ft.) +34.0MM -59.6MM +33.9MM -16.1MM +15.6MM Source: Cassidy Turley Research

8. Bay Area Office/R&D Annual Change in Avg. Asking Rate OFFC: -71%R&D: -119% OFFC: +41%R&D: +51% OFFC: +80%R&D: +244% OFFC: -18%R&D: -23% OFFC: +8%R&D: +10% Source: Cassidy Turley Research

9. Office Rent Snapshot Q1 2012 vs. Q1 2011, Y/Y % Change San Francisco Phoenix Sacramento San Mateo New York Northern NJ San Jose San Diego Cincinnati Nashville Strong Growth Greater than 4% Large DeclinesWorse than -2% Houston St. Louis Suburban VA Baltimore Chicago Kansas City Moderate1 to 4% Denver Small declines0.5% to -2% Louisville Tampa Oakland-East Bay Dallas Flat Suburban MD Columbus Charlotte Atlanta Long Island Raleigh Boston Dayton Indianapolis Milwaukee Central NJ Minneapolis DC Source: Cassidy Turley Research Source: Cassidy Turley Research

10. Novato18.4% | $2.18 San Rafael12.8% | $2.44 Green./Larkspur7.3% | $3.79 Corte Madera9.9% | $3.00 Mill Valley22.5% | $3.60 Saus./Tiburon10.9% | $2.76 Source: Cassidy Turley Research

11. Daly City19.3% | $2.22 Brisbane38.5% | $2.88 S. San Francisco30.6% | $3.53 San Bruno/ Millbrae4.7% | $2.23 Burlingame12.6% | $2.15 Foster City9.3% | $3.07 San Mateo14.2% | $2.65 Redwood Shores7.4% | $3.25 Belmont/San Carlos26.4% | $2.56 Redwood City10.7% | $3.32 Menlo Park10.3% | $7.24 Source: Cassidy Turley Research

12. San Mateo County Office Historical & Forecast Vacancy & Rents (Class A) F O R E C A S TAnnual Growth Net 640K Rent 10% Net 850K Rent 20% Net 700K Rent 10% Source: Cassidy Turley Research

13. Fremont13.3% | $2.02 Palo Alto4.5% | $5.50 Milpitas13.7% | $1.69 Mt. View5.7% | $3.71 SJ-Airport22.6% | $2.21 N. San Jose18.8% | $2.31 Sunnyvale13.8% | $3.32 Civic Center11.1% | $1.62 Santa Clara19.9% | $2.04 San Jose-DT23.0% | $2.31 Cupertino3.3% | $3.05 W. San Jose9.2% | $1.94 S. San Jose13.9% | $1.71 Campbell 13.1% | $2.48 Los Gatos-Saratoga10.9% | $2.95 Source: Cassidy Turley Research

14. Silicon Valley Office/R&D Historical & Forecast Vacancy & Rents F O R E C A S TAnnual Growth Net 6.0M Rent 10% Net 7.5M Rent 20% Net 6.0M Rent 15% Source: Cassidy Turley Research

15. Silicon Valley Office/R&D Silicon Valley Requirements – Historical Volume Tracking Requirements Volume SF Square Feet (Millions) Requirements • Demand near a 10-year high • Average size of requirements has grown significantly Source: Cassidy Turley Research

16. Silicon Valley Market Drivers • Apple… • controls close to 7MMSF in Cupertino, over 80% of that market, pushing tenants east • has leased 1.15MSF in Sunnyvale over the last year. • Is negotiating an another ±1M square feet in Sunnyvale. • Sunnyvale’s vacancy is declining fast and rents are rising forcing tenants to move east Source: Cassidy Turley Research Office/R&D Vacancy as of March 16, 2012Average Rates Q4 2010 & 2011

17. Richmond25.2% | $2.17 West Berkeley 10.5% | $2.37 Berkeley CBD10.5% | $2.42 Emeryville 18.1% | $2.49 City Center13.8% | $2.27 Lake Merritt15.1% | $2.38 Coliseum-Airport28.0% | $1.74 Jack London Sq.12.5% | $1.50 N. Alameda36.3% | $2.10 S. Alameda26.8% | $1.74 Source: Cassidy Turley Research

18. Pleasant Hill 7.2% | $2.19 Concord15.7% | $1.78 WC-Shadelands23.5% | $1.63 WC-PH BART20.9% | $2.40 WC-BART Area16.5% | $2.54 Lamorinda9.4% | $2.98 WC-Downtown11.5% | $2.36 Source: Cassidy Turley Research

19. San Ramon14.3%% | $1.80 Dublin15.9% | $1.73 Livermore27.7% | $1.41 Pleasanton19.8% | $1.77 Source: Cassidy Turley Research

20. Greater East Bay Office Historical & Forecast Vacancy & Rents F O R E C A S TAnnual Growth Net 1.6M Rent 5% Net 300K Rent 10% Net 700K Rent 10% Source: Cassidy Turley Research Includes Alameda & Contra Costa Counties

21. Bay Area Industrial Market Vacancy Rate Trend Source: Cassidy Turley Research

22. Bay Area Market Changes Ahead

23. Bay Area Market Changes Ahead • Recovery? Absolutely… • Tech growth remains aggressive with office and R&D the beneficiariesGeography remains limited to 101 Corridor, but is expanding in South Bay • Stagnation? Yes, for some, but probably not for long… • Both warehouse and manufacturing remain in flat to near-flat growth mode- East Bay industrial still struggling to compete with Stockton price points • Office and R&D product away from tech influence remains mostly flat- Outlying markets generally weakest for job growth and office demand