Publication Design - Stevens Creek OM by lettisiascarlett

SAN JOSE, CALIFORNIA

Stevens Creek Executive Park OFFICE/RETAIL PROJECT ON 9.23 ACRES WITH POTENTIAL TO BUILD A LARGE SCALE MIXED USED DEVELOPMENT

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INVESTMENT CONTACTS Bob Gilley Executive Managing Director +1 415 677 0468 bob.gilley@cushwake.com Lic. # 01084869

Steve Hermann Executive Managing Director +1 415 677 0465 steve.hermann@cushwake.com Lic. # 01352679

Eric Fox Executive Managing Director +1 408 615 3469 eric.h.fox@cushwake.com Lic. # 01209035

RETAIL INVESTMENT SPECIALISTS Dan Wald Executive Managing Director +1 415 677 0461 dan.wald@cushwake.com Lic. # 01173211

LOCAL MARKET ADVISORY Bob Simpson Senior Vice President +1 408 615 3421 bob.simpson@cushwake.com Lic. # 01240540

Eric Kathrein Associate Vice President +1 415 677 0449 eric.kathrein@cushwake.com Lic. # 01896107

DEBT & EQUITY FINANCE CONTACT Kurt Scheidt Managing Director +1 415 677 0479 kurt.scheidt@cushwake.com Lic. # 01014206

Stevens Creek Executive Park SAN JOSE, CALIFORNIA EXECUTIVE SUMMARY

PROPERTY SUMMARY

REDEVELOPMENT OPPORTUNITY

AREA OVERVIEW

MARKET OVERVIEW

FINANCIAL ANALYSIS

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY THE OPPORTUNITY

Stevens Creek Executive Park

Cushman & Wakefield, as exclusive advisor, is pleased to present the unique opportunity to acquire Stevens Creek Executive Park, a five building, 165,416 square foot office/retail project located in the heart of Silicon Valleyâ&#x20AC;&#x2122;s West Valley market. The project is situated on three parcels totaling 9.23 acres along Stevens Creek Boulevard in San Jose, CA. The project is currently 88% leased to more than 100 tenants and features upgraded common areas, conference facilities, ample parking, Stevens Creek identity, proximity to retail amenities, and easy access to Highway 280. This expansive site falls within the Stevens Creek Urban Village area established by the Envision San Jose 2040 General Plan. The Urban Village designation allows for medium to high-density mixed uses creating an exceptional redevelopment opportunity.

The West Valley is comprised of the highly soughtafter submarkets of Cupertino, Los Gatos, Saratoga, Campbell, and western San Jose. These communities are characterized by high-income executive housing, outstanding public schools, historically low commercial vacancy, excellent transportation access, and high barriers to entry for new development. Fueled by the extraordinary growth of Cupertino-based Apple, the West Valley is one of the tightest office markets areas in the region with a vacancy rate of just 5.3%.

Stevens Creek Executive Parkâ&#x20AC;&#x2122;s strategic West Valley location, strong in-place cash flow with upside potential, and outstanding redevelopment potential create one of the most compelling investment opportunities in the Bay Area. The fee simple interest in the property is being offered for sale without an asking price and on an all-cash basis.

165,416

88%

5 BUILDINGS

SQUARE FEET

LEASED

ON 9.23 ACRES

Address

4300-4400 Stevens Creek Blvd. San Jose, CA 95129

Number of Buildings

Five

Net Rentable Area

Office: 137,528 SF Retail: 27,888 SF Total: 165,416 SF

Occupancy

88%

Year Built

1974

Site Area

9.23 acres

Parking Ratio

3.75 per 1,000 square feet

Current FAR

0.41

Current Zoning

CG (Commerical General), San Jose

General Plan Land Use Designation

Urban Village

Executive Summary

PROJECT SUMMARY

4360 Stevens Creek Blvd

Property Type

Office

Rentable Area (SF)

59,196 75%

4320 Stevens Creek Blvd Property Type Rentable Area (SF) % Leased

Office 38,700 99%

4300 Stevens Creek Blvd Property Type Rentable Area (SF) % Leased

Office 39,632 97%

Retail

Rentable Area (SF)

17,635

% Leased

4340 Stevens Creek Blvd

% Leased

Property Type

81%

INVESTMENT HIGHLIGHTS PREMIER WEST VALLEY LOCATION • Home to technology giant Apple and other prominent corporate users including: eBay, TrendMicro, Seagate and Affymax 4400 Stevens Creek Blvd Property Type

Retail

Rentable Area (SF)

10,253

% Leased

100%

• Close proximity to numerous retail amenities including Santana Row, Westfield Valley Fair, and Vallco Shopping Mall, and more than 50 restaurants within a one mile radius • Nearby executive communities of Cupertino, Los Altos, Los Gatos and Saratoga provide a high caliber talent pool and keep office space in consistent demand

PROMINENT IDENTITY ALONG STEVENS CREEK BOULEVARD • Approximately 700 feet of frontage along Stevens Creek Boulevard, a high traffic arterial with prime visibility

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• High visibility buildings in core Silicon Valley submarkets typically command premium rents • Large monument sign at retail entrance would be difficult to replicate today

HIGHLY COMPETITIVE OFFICE BUILDINGS • The office buildings serve a niche of smaller professional services businesses and start-ups • Suites range from 300 to 10,000 sf enabling tenants to expand without leaving the park • The project has been under the same ownership since 2006 and has been maintained at the highest standard • Major capital upgrades include modernized lobbies, corridors, and common areas, and new exterior paint

Executive Summary

rd va e l

• One of the most traveled thoroughfares in Silicon Valley extending through San Jose, Santa Clara and Cupertino with 32,000 cars per day

HISTORICALLY STRONG OCCUPANCY LEVELS AND STABLE INCOME STREAM • Diverse rent roll of more than 100 tenants insulates the project from market downturns • No single tenant accounts for more than 10% of the project providing a smooth expiration schedule • The project has maintained an occupancy level greater than 85% for the past 8-years • Several tenants have leased space in the project for more than a decade

ESCALATING MARKET RENTS PROVIDE STRONG UPSIDE • In-place office rents are approximately 18% below market • More than 50% of the project is due to expire in the next three years • Silicon Valley office rents continue to rise—20% in the past 12-months • Diminishing vacancy continues to place upward pressure on rents

HIGHLY DESIRABLE RETAIL LOCATION • Retail center is 88% leased to four tenants including Round Table Pizza, Satellite Health Care and DaVita • One remaining vacancy with outdoor seating ideal for a café or small restaurant

• This densely populated and affluent trade area has more than 260,000 residents within a 3-mile radius and a median household income exceeding $115,000.

ACCESS TO TRANSPORTATION • Subject property is located only one mile from Interstate 280 with links to Highways 85, 880, 101, 680, 237 and 87 • Immediate access to Stevens Creek Boulevard, Lawrence and San Tomas Expressways • Within minutes of Mineta San Jose International Airport

Executive Summary

• The property occupies a coveted position along Stevens Creek Boulevard which accommodates more than 32,000 vehicles/day

The Hills at Vallco Mixed Use Redevelopment

REDEVELOPMENT OPPORTUNITY

CUPERTINO

PRIME POSITIONING FOR REDEVELOPMENT • The site’s large size, flat topography and rectangular shape is ideal for a large scale mixed use development • Preliminary feasibility studies estimate as many as 900 multi-family units could be built • Three distinct parcels provide a flexible development strategy • More than 85% of the in-place leases allow for termination in the event of a redevelopment • More than half of the existing leases expire within the next 36-months

Stevens Creek Executive Park

SUPPORT FROM THE CITY

• Designated as an Urban Village by the Envision San Jose 2040 General Plan • The Stevens Creek corridor is considered a high priority for Urban Village development due to: - Proximity to Interstate 280 - Access to three major regional expressways: San Tomas, Lawrence, and Foothill - VTA’s Bus Rapid Transit project planned to run along Stevens Creek

Main Street Cupertino 275,000 SF of Class A Office 100% Leased to Apple

STRONG MULTI-FAMILY FUNDAMENTALS Stanford University

PALO ALTO MOUNTAIN VIEW

Apple Campus II 2.8M SF R&D Building 13,000 Employees

• Bay Area employment and income per capita are at record levels driving demand for housing • Housing costs in supply constrained markets such as the West Valley are surging • Average rents for new construction are $3,800 per unit per month

MULTI-FAMILY DEVELOPMENT SUMMARY (3-MILE RADIUS) Recently Completed (2014/2015)

734 units

Under Construction

490 units

Proposed Developments Total Average Rent Range (per unit)

1,582 units 2,806 units $3,236 - $4,203

CUPERTINO SCHOOL DISTRICT DRIVES PREMIUM RENTS • Project falls within the Cupertino public school district boundaries • Cupertino public schools consistently achieve the highest API scores in Santa Clara County

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• Cupertino’s superior school district has made it one of the most desirable places to live in the Bay Area and creates a premium on home prices and rents

INFILL LOCATION • Several large-scale developments along the Stevens Creek Corridor are expected to transform the immediate area • Apple’s Campus 2 (two miles from the subject property) will serve more than 13,000 employees placing additional pressure on demand for housing and retail

Stevens Creek Executive Park

• Other nearby developments include: Main Street Cupertino (under construction) and Vallco Shopping Mall (redevelopment planned)

Executive Summary

Stev ens

MARKET HIGHLIGHTS Office West Valley

Silicon Valley

Sunnyvale/Cupertino

Silicon Valley

5.3%

8.5%

3.4%

5.3%

$3.80 Full Service*

$3.65 Full Service*

$3.14 NNN

$2.36 NNN

Overall Vacancy Avg. Asking Rent (SF/Month)

Retail

*Class A and B space only

GLOBAL CENTER FOR TECHNOLOGY • Unparalleled stream of VC investment - 50% of the national total • One of the most educated workforces in the nation • Highest GDP per capita in the US and ahead of global peers such as London and Singapore • Home to 22 Fortune 500 companies including Google, Oracle, Facebook, Hewlett-Packard, Intel, Cisco Systems, Apple, Applied Materials and eBay

OFFICE VACANCY BY MARKET AREA 14%

12%

11.9% 10%

WEST VALLEY OFFICE MARKET

Stevens Creek Executive Park

Sought-after Market Area with Outstanding Fundamentals

8.8%

• One of Silicon Valley’s top performing office markets • Vacancy rate below the regional average for the past 15+ years

• Current vacancy rate of 5.3% - well below the regional vacancy rate of 8.5% • 30% increase in average asking rates for Class A and B space over the past two years • Large users such as Apple have absorbed nearly every large block of office space available

5.3% 4%

4.0% 2%

• Proximity to high-income hillside communities • The West Valley’s desirable location, strong corporate presence and limited inventory will ensure it remains one of the strongest market areas in Silicon Valley

0% 101 Tech. Corridor

West Valley

Central Silicon Valley

South I-880 Corridor

SUNNYVALE/CUPERTINO RETAIL MARKET The property’s location along Stevens Creek Boulevard, a mile from the Cupertino border, makes it most competitive with other Cupertino retail centers that fall within the Sunnyvale/Cupertino submarket:

Premier Retail Market Area with Affluent Demographics • One of Silicon Valley’s densest accumulations of retail with continued strong momentum • Current vacancy rate of 3.4% - a dramatic decrease from 6.2% at mid-year 2014 • Current average asking rent of $3.14 NNN - a 22% increase over mid-year 2014 • With virtually no developable land, high barriers to entry will prevent future competition

RETAIL VACANCY BY MARKET AREA 10.0%

8.0%

7.9%

6.0%

4.4%

4.0%

3.6%

3.4% 2.0%

0.0% San Jose/ Sunnyvale/ Campbell/ Cupertino Los Gatos

Santa Clara

Palo Alto/ Milpitas/ Morgan Hill/ Mtn View N. San Jose Gilroy

Executive Summary

5.4%

PROPERTY SUMMARY

PROPERTY SUMMARY Stevens Creek Executive Park is a five building, 165,416 square foot office/retail project situated on 9.23 acres along Stevens Creek Boulevard in San Jose, CA. The project is currently 88% leased to more than 100 tenants and features upgraded common areas, conference facilities, ample parking, Stevens Creek identity, proximity to retail amenities, and easy access to Highway 280. With suite sizes from 300 to 10,000 square feet, the project is ideally positioned to accommodate a range of tenant space requirements. The current ownership has maintained the project to the highest professional standard investing more than $2.4 million over the past ten years in capital repairs and upgrades. Recent upgrades include modernized lobbies, corridors, and common areas, and new exterior paint.

PROJECT SUMMARY Address

4300-4400 Stevens Creek Blvd. San Jose, CA 95129

Number of Buildings

Five

Stevens Creek Executive Park

Net Rentable Area

Office: 137,528 SF Retail: 27,888 SF Total: 165,416 SF

Occupancy

88%

Year Built

1974

Site Area

9.23 acres

Parking Ratio

3.75 per 1,000 square feet

Current FAR

0.41

Current Zoning

CG (Commerical General), San Jose

General Plan Land Use Designation

Urban Village

BUILDING SUMMARY Address

Type

RSF

% Leased

Stories

APN

Site Area

4300 Stevens Creek Blvd

Office

39,632

97%

296-40-009

3.79

4320 Stevens Creek Blvd

Office

38,700

99%

4340 Stevens Creek Blvd

Office

59,196

75%

296-38-014

2.83

4360 Stevens Creek Blvd

Retail

17,635

81%

296-38-013

2.62

4400 Stevens Creek Blvd

Retail

10,253

100%

Total

165,416

88%

9.23

CONSTRUCTION DETAIL

Foundations:

Superstructure:

The interior and perimeter wood stud bearing walls are founded on shallow continuous reinforced concrete footings, and interior posts are founded on isolated, shallow concrete pad footings. The ground floor level of each building is a concrete slab-on-grade.

Office Buildings: The roof structures are constructed with plywood sheathing spanning between manufactured open-web wood trusses. The 2nd floor level of each building is constructed with plywood sheathing over manufactured I-shaped or open-web wood truss joists typically spaced at 24” on-center. The floor joists frame between wood stud bearing walls set at the building perimeter and along the central corridors. Retail Buildings: The roof structures are panelized systems constructed with plywood sheathing spanning over sawn 2x wood sub-purlins spaced at 24” on-center and sawn 4x wood purlins spaced at 8’-0” on-

Exterior:

Office Buildings: The exterior wall construction consists of wood stud walls with wood siding. Retail Buildings: The exterior wall construction consists of wood stud walls with an exterior plaster finish. Doors consist of glass aluminum framed doors that are part of a storefront system. Fixed windows are located on the building exteriors.

Property Summary

center. The roof purlins frame between glulam girders that are supported by steel pipe columns.

Roof:

The roofing systems consist of multiply built-up roofing membrane with a faced mineral capsheet. Drainage is accomplished using interior roof drains with overflow scuppers.

Stevens Creek Executive Park

BUILDING SYSTEMS

HVAC:

Each of the four central HVAC equipment areas on the roofs has a central air-handling unit with DX cooling coils for space cooling needs. The manufacturer could not be determined. Cooled air is supplied to a looped main duct on each floor with branches to VAV boxes.

Electric:

Electrical service is provided to the building by PG&E via on-site utility pad mounted transformers which serve each of the main switchboards. Voltage at the three office building is 480/277V, 3-phase, 4-wire power while the voltage supplied to the two retail buildings is 208/120 V, 3-phase, 4-wire. Metered services are located in dedicated electrical rooms.

Emergency Power:

Emergency lighting is provided battery backup ballasts in fluorescent fixtures or from battery operated “bug-eye” fixtures. Exit light fixtures have internal battery backup.

Water Service:

Domestic water service is provided to the building by the City of San Jose via meters located in the public sidewalks along Stevens Creek Boulevard, Lopina Drive, and Albany Drive. The water services are 2-inch copper with backflow devices and shut off valves located in the lawn area adjacent to the meters. A separate 1-inch irrigation system with backflow devices is also located in the general area.

Elevator:

Each of the office buildings is equipped with one two-stop hydraulic elevator rated for 2,000 pounds. Office Buildings: n/a – not required at the time of construction

Sprinklers:

Retail Buildings: 4360 Stevens Creek has a 6-inch fire sprinkler riser and all tenant spaces have sprinkler heads. 4400 Stevens Creek is provided with a 6-inch fire sprinkler riser. Fire hydrants are provided adjacent to the site along Stevens Creek Boulevard, Lapina Drive, and Albany Drive and around the buildings.

SITE PLAN N

ALBANY DRIVE

4340 STEVENS CREEK BOULEVARD

4360 STEVENS CREEK BOULEVARD

4320 STEVENS CREEK BOULEVARD

STEVENS CREEK BOULEVARD

4400 STEVENS CREEK BOULEVARD

Property Summary

LOPINA DRIVE

4320 STEVENS CREEK BOULEVARD

4300 STEVENS CREEK EXECUTIVE PARK Second Floor

Stevens Creek Executive Park

Leasing Office Suite 170 367 SF Decicon Suite 175 745 SF

Evolko Systems Suite190 1,136 SF

Mgmt Office Suite 180 995 SF

Avipas Suite 227 488 SF

Swit Elect Suite 230 859 SF

James Wee Suite 250 790 SF

All Spectrum Insurance Brokers Suite 100 2,093 SF

John Eaves (subtenant: State Farm) Suite 130 1,870 SF Secote Suite 125 427SF

Vacant Suite 179 925 SF

MRTK Seunghoon Upaya Realty Han Suite 218 Suite 220 Suite 225 790 SF 391 SF 930 SF

Payactiv Suite 185 2,041 SF

Kiwi & Co. Suite 275 6,797 SF

Larry Threebond Intâ&#x20AC;&#x2122;l Walker Suite 260 Suite 223 530 SF 1,073 SF

Miwan Mckoon Suite 222 2,151 SF

Unish Corp. Suite 126 557 SF

Global Upside Suite 270 3,509 SF

Aichi Steel Suite 203 826 SF

George Heridis Suite 200 406 SF

Lyhn Hospitality Suite 201 685 SF

NF Wealth Management Suite117 2,641 SF

Sunil Nelabhotla Suite 140 842 SF

Acrowit Suite 135 1,382 SF

First Floor

Vacant Suite183 4,62SF Suite187 Santa Clara Grp 617 SF

Lobel Financial Suite189 2,256 SF

2015

2016

2017

2018

2019+

Vacant MGMT

4320 STEVENS CREEK EXECUTIVE PARK

True Arrow Capital Mgmt Suite 295 1,018 SF

C. Zatkins Suite 283 517 SF

First Floor

RGIS Suite 168 698 SF

Lelo* Suite 202 415 SF

Shashank Shekhar Suite 172 1,071 SF

Jin Wan Park Suite 268 689 SF

Kyle Chuang Suite 206 507 SF

Seoung Your Netkiller Ryong Asian Suite 211 Jee Conn 635 SF Suite 225 Suite 209 618 SF 618 SF

Michelle Yiu Suite 210 769 SF

San Jose Counseling Suite 220 1,369 SF

Astir Services (Sysnet Tech) Suite 229 1,157 SF

Acionyx Suite 230 1,196 SF

* Tenant to vacate suite

Numbers Only Suite 100 811 SF

ProPower Suite 101 886 SF

IPEX USA Suite 120 1,810 SF

Vanessa Calderon Suite 123 460 SF

Dowa Intâ&#x20AC;&#x2122;l Suite 125 685 SF

Jianye Han Suite 124 1,264 SF

Mark Lee Suite 129 655 SF

Property Summary

Shilpa Tangi & Usha Johnson Suite 165 1,336 SF

Evertz Suite 275 2,066 SF

Kao Wealth Mgmt Suite 126 463 SF Nicholas Honda Suite 127 358 SF

Jack Shaw Suite 171 596 SF

Pivot Systems Suite 174 656 SF

Lelo Lelo Suite 205 Suite 207 663 SF 709 SF

Professional Nurses Suite 128 666 SF

ATA Travel Suite 173 372 SF

Second Floor

Conf Room Suite 280 762 SF

Fine Line (Amuura) Suite 271 399 SF

Xinghe Suite 175 735 SF

Elite Wealth Group Suite 282 696 SF

John Paul Pak Suite 121 504 SF

Bay Area Breast Suite 185 766 SF

MAP Suite 161 336 SF

Ehealth Plans Suite 191 430 SF

EasyThru Learning Suite 190 1,183 SF

Conf Room/ Lounge Suite 163 731 SF

Ellis Chi Suite 195 939 SF

Metro Capital Suite 279 544 SF

Sagacent Technologies Suite 290 2,204 SF

E-Litecom Suite 227 477 SF

Arthur Romero Suite 285 470 SF

Quantum Semi Suite 212 403 SF

Young Kim Suite 287 490 SF

Transpacific Suite 130 856 SF

2015

2016

2017

2018

2019+

Vacant MGMT

4340 STEVENS CREEK EXECUTIVE PARK

MKTG, Inc. Suite 220 1,557 SF

Conf Room Suite 195 781 SF

4x Engineering Suite 172 396 SF

Daniel Chun Suite 170 1,560 SF

Sangick Eng Suite 199 415 SF

Integrated Operations Suite 181 688 SF

JF Duncan Operations Suite 183 642 SF

RevSoftware Suite 190 2,281 SF

IT Mgmt Corp Suite 225 2,189 SF

Homesafe Suite 200 2,062 SF

RYDOG27* Suite 191 739 SF

Vacant Suite 231 4,380 SF

Desheng Liu Suite 185 655 SF

4340 First Floor

4340 Second Floor

Jimmy Wu Suite 176 1,638 SF

* Tenant to vacate

GS Prop Mgmt Suite 167 1,000 SF

Vacant Suite 240 2,219 SF

Yvonne Mei Suite 244 919 SF

Vacant Suite 250 4,996 SF

Campus Insurance Suite 165 3,365 SF

Kanrad Technologies Suite 162 742 SF Joski Suite 161 687 SF

Bayfinity Suite 160 1,238 SF

Vacant Suite 270 1,102 SF

RHUB Comm SFO Tech Suite 282 Suite 284 916 SF

766 SF

TIS International Suite 275 2,630 SF

Aumkaara Suite 286 1,008 SF

Qion Wang Suite 287 379 SF

Stevens Creek Executive Park 19

JK Accountancy Suite 166 371 SF Jean Cha Suite 164 683 SF Yubo Cao Suite 163 484 SF

Kaverisoft Suite 245 1,440 SF

Jatoft-Foti Suite 280 2,140 SF

Access Five Suite 169 682 SF

Slingshot Conn Suite 288 1,203 SF

Stephanie Young Suite 114 812 SF

M Haines Suite 107 834 SF

Vacant Suite 112 1,162 SF

Paul Tom Suite 108 1,172 SF

2015

2016

LiveWorld Suite 101 2,564 SF

Midtech Software Suite 106 2,793 SF

2017

2018

2019+

Vacant MGMT

4360 & 4400 STEVENS CREEK EXECUTIVE PARK

4360

4400

Vacant Suite 103 1,940 SF Vacant Suite 102 1,360 SF

Total Renal Care Davita 3,398 SF

Round Table 6,855 SF

Satellite Healthcare Suite 101 14,335 SF

2016

2017

2018

2019+

Vacant MGMT

Property Summary

2015

REDEVELOPMENT OPPORTUNITY

Stevens Creek Executive Park

REDEVELOPMENT OPPORTUNITY

ENVISION SAN JOSE 2040 GENERAL PLAN

STEVENS CREEK BOULEVARD URBAN VILLAGE AREA

In November 2011, the San Jose City Council adopted the Envision San Jose 2040 General Plan which seeks to create great places throughout the city and enhance job growth. The development of Urban Villages is the fifth of 12 major strategies embodied within the General Plan. Urban Villages are walkable, bicycle-friendly, transit-oriented, mixed use settings that provide both housing and jobs, thus supporting the General Plan’s environmental goals. The Urban Villages strategy fosters:

The Stevens Creek Urban Village area runs along the south side of Stevens Creek Boulevard generally between Lawrence Expressway and Winchester Boulevard. The 2.5 mile commercial corridor is characterized by large car dealerships and medium sized commercial buildings, interspersed with smaller one- and twostory retail shops. Three Expressways cross through this corridor that can also be accessed from Interstate 280 at three separate locations. Additionally, the Valley Transportation Authority’s (VTA) Bus Rapid Transit (BRT) project is planned to run along Stevens Creek Boulevard with a planned stop at three intersections within the Stevens Creek Urban Village area. The General Plan calls for a total of 3,860 dwelling units along with 720,000 square feet of supporting commercial use (office or retail) within the Stevens Creek Urban Village area. The Stevens Creek Urban Village Plan is targeted for approval in late 2017/early 2018.

• Engagement of village area residents in the Urban Village planning process • Mixed residential and employment activities that are attractive to an innovative workforce • Revitalization of underutilized properties that have access to existing infrastructure • Densities that support transit use, bicycling, and walking • High-quality urban design The General Plan identifies 68 sites throughout San Jose as Urban Village including the Stevens Creek Corridor where the property is located.

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Development Summary

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STEVENS CREEK VILLAGE MAP

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Riddle Rd

SIGNATURE PROJECTS Prior to a property within the Plan’s boundary obtaining entitlements, the General Plan requires preparation of an Urban Village Plan. However, “Signature Projects” may proceed in advance of an Urban Village Plan’s adoption. A project is considered a Signature Project when it clearly advances an Urban Village Plan’s goals. A Signature Project must meet to following requirements:

• Conform to the approved land use/transportation diagram • Incorporate job growth and housing at above-average densities • Prominent location so as to serve as an example for other project • A minimum of one acre of public open space • Community involvement • High quality design EXPECTED TIMELINE Once an acceptable conceptual plan is submitted to the city, the approval process is expected to take 6-9 months. With more than half of the existing leases expiring within the next 36-months, landlord termination rights on more than 85% of the in-place leases, and the ability to develop in phases, the property is well positioned to accommodate a near term redevelopment.

Stevens Creek Executive Park

ACHIEVABLE PRICING

Real estate advisory firm Robert Charles, Lessor and Co. (RCLCO) prepared a pricing study in August 2015. The study resulted in the following recommendation from RCLCO: The proposed apartments should be positioned as a value alternative to the nearby communities of Cupertino, River Oaks (North San Jose), and Santana Row. The proposed apartments should achieve position above all generally older apartment projects in the surrounding area. While these projects are for the most part well maintained, the “newness” factor and expected superior execution of the Subject Site apartments should enable a pricing premium. Based on RCLCO’s recommended positioning, achievable monthly rent is estimated in the $2,500 to $3,500 per unit range.

Development Summary

RCLCO SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS BUILDING A Recommended Program, 363-Unit-Program AVERAGE PRICE 1 UNIT TYPE

AVERAGE PRICE WITH VIEWS 2

TOTAL UNITS

PCT. MIX

SIZE (SF)

TOTAL

PSF

TOTAL

PSF

ONE-BEDROOM

247

68%

675

$2,540

$3.76

$2,546

$3.77

TWO-BEDROOM

26%

1,000

$3,240

$3.24

$3,253

$3.25

TWO-BEDROOM TOWNHOME

1,100

$3,480

$3.16

$3,480

$3.16

363

100%

785

$2,780

$3.54

$2,790

$3.55

TOTAL/WTD. AVG.

BUILDING B Recommended Program, 330-Unit-Program AVERAGE PRICE1 UNIT TYPE

TOTAL UNITS

PCT. MIX

SIZE (SF)

TOTAL

PSF

TOTAL

PSF

ONE-BEDROOM

225

68%

675

$2,540

$3.76

$2,546

$3.77

TWO-BEDROOM

28%

1,000

$3,240

$3.24

$3,253

$3.25

TWO-BEDROOM TOWNHOME

1,100

$3,480

$3.16

$3,480

$3.16

330

100%

783

$2,780

$3.54

$2,780

$3.55

Stevens Creek Executive Park

TOTAL/WTD. AVG.

AVERAGE PRICE WITH VIEWS2

BUILDING C Recommended Program, 224-Unit-Program AVERAGE PRICE1 UNIT TYPE

AVERAGE PRICE WITH VIEWS2

TOTAL UNITS

PCT. MIX

SIZE (SF)

TOTAL

PSF

TOTAL

PSF

ONE-BEDROOM

162

72%

675

$2,540

$3.76

$2,546

$3.77

TWO-BEDROOM

23%

1,000

$3,240

$3.24

$3,253

$3.25

TWO-BEDROOM TOWNHOME

1,100

$3,480

$3.16

$3,480

$3.16

224

100%

770

$2,750

$3.57

$2,750

$3.57

TOTAL/WTD. AVG.

1. Average effective assuming no premium for views. 2. Average rents with view premiums assumes one-third of fourth floor units and one-half of fifth floor units will have the following view premiums: One-bedrooms, $20 for fourth floor, $50 for fifth floor, Two-bedrooms, $40 for fourth floor, $100 for fifth floor. Assumes that townhomes are on lower floors and would not achieve view premiums.

APPLE CAMPUS II

Stev ens C

reek B

Stevens Creek Executive Park

Development Summary

oule vard

AREA OVERVIEW

REGIONAL OVERVIEW SAN FRANCISCO BAY AREA Encompassing three major metropolitan areas and nine counties, the San Francisco Bay Area is one of the nationâ&#x20AC;&#x2122;s most prominent geographies and home to 7.56 million people. The region operates as an interconnected network of both urban and suburban enclaves with San Francisco at its focal point. The Bay Area is Californiaâ&#x20AC;&#x2122;s second largest urban area in terms of geography and has an economy that produces a GDP of $535 billion, a number that ranks 19th among the top countries in the world. Renowned for its temperate climate, exceptional quality of life, well educated work force and dynamic economy, the Bay Area continues to be regarded as one of the most exciting and innovative regions in the world.

A key component of the Bay Area economy, Silicon Valley is the world’s undisputed high-tech capital, blazing the trail for innovation in today’s global marketplace. Industry leaders in semiconductor design and manufacturing, network equipment, high tech manufacturing equipment, software design, information systems, life sciences, clean tech, and digital media call Silicon Valley home. The region draws its vitality not only from innovative new businesses but also from the intense competition among its diverse array of existing companies.

The Silicon Valley metro area ranks #3 in the world and #1 in the United States for GDP per capita. The region has one of the highest percentages of college educated adults in the country, and continues to be a magnet for leading researchers and entrepreneurs. The combination of the world’s leading research and educational institutions, San Francisco’s worldclass financial base, the region’s well established business creation infrastructure, and a geographic position which fosters fluid interaction with China and other Pacific Rim economies all ensure that Silicon Valley remains a leader in economic growth for decades to come.

GDP PER CAPITA Rank

Metro

Region

GDP per Capita

Zurich

Western Europe

$82,410

Oslo

Western Europe

$82,040

Silicon Valley

North America

$77,440

Hartford

North America

$76,510

Geneva

Western Europe

$74,580

Paris

Western Europe

$70,760

Boston

North America

$70,390

Bridgeport

North America

$68,570

Washington DC

North America

$68,530

Seattle

North America

$67,830

Macau

Developed Asia-Pacific

$67,780

San Francisco

North America

$66,790

Perth

Developed Asia-Pacific

$65,500

Calgary

North America

$64,640

New York

North America

$64,460

Portland

North America

$64,370

Munich

Western Europe

$64,180

Houston

North America

$63,730

Dublin

Western Europe

$63,600

Luxembourg-Trier

Western Europe

$63,350

Area Overview

SILICON VALLEY

WALL STREET LEADER Silicon Valley technology firms have become increasingly attuned to the demands of Wall Street, churning out profits at a record pace and sending cash back to investors. The 2014 Silicon Valley 150 rankings of the largest companies headquartered in the region illustrates that Wall Street depends on Silicon Valley tech companies like never before. In 1985, only six Silicon Valley companies were included in Standard & Poorâ&#x20AC;&#x2122;s 500 index; now there are thirty companies on the index and information technology is the S&Pâ&#x20AC;&#x2122;s biggest sector. Overall, the SV150 produced a profit margin of 16.4% amid record sales and profits, but the $134.4 billion that companies pushed back to investors through dividends and stock repurchases was even greater than the profits of nearly $128 billion. Apple ended 2014 just short of becoming the first Silicon Valley firm to hit $200 billion in sales in a year.

SILICON VALLEY 150 2014 RANKINGS (1-19) S&P 500 Companies SALES (millions)

PROFIT (millions)

PROFIT MARGIN

MARKET CAP (millions)

End QT

Last 4 QTs

Amount

RANK BY SALES

Stevens Creek Executive Park

Rank Company

Business

1 Apple

Consumer electronics

DEC

$199,800

$44,462

22%

$744,100

2 Hewlett-Packard

IT services, equipment

JAN

$110,139

$4,954

$59,507

3 Google

Web search, advertising

DEC

$66,001

$14,444

22%

$381,785

4 Intel

Semiconductors

DEC

$55,870

$11,704

21%

$145,869

5 Cisco Systems

IT networking services

JAN

$48,083

$8,653

18%

$144,781

6 Oracle

IT services, equipment

FEB

$38,841

$10,827

28%

$193,879

7 Gilead Sciences

Therapeutic viral medicines

DEC

$24,890

$12,101

49%

$150,972

8 eBay

Online trading community

DEC

$17,902

($41)

$70,340

9 Synnex

IT supply chain services

FEB

$14,015

$188

$3,107

10 Facebook

Social networking website

DEC

$12,466

$2,925

23%

$232,637

11 Applied Materials

Chip-making equipment

JAN

$9,241

$1,201

13%

$29,599

12 SanDisk

Data storage devices

DEC

$6,628

$1,007

15%

$17,966

13 Symantec

Computer security

DEC

$6,615

$919

14%

$16,377

14 Sanmina-SCI

IT manufacturing services

DEC

$6,439

$197

$2,031

15 Agilent Technologies

Electronic measurement tools

JAN

$6,328

$374

$14,128

16 NetApp

IT storage, management

JAN

$6,232

$622

10%

$11,454

17 VMware

Virtualization software

DEC

$6,035

$886

15%

$35,120

18 Advanced Micro Devices

Semiconductors

DEC

$5,506

($403)

-7%

$2,150

19 Netflix

Entertainment distributor

DEC

$5,505

$267

$25,786

RANK BY SALES Rank Company 20 Salesforce.com

Business

End QT

SALES (millions)

PROFIT (millions)

PROFIT MARGIN

MARKET CAP (millions)

Last 4 QTs

Amount

CRM software

JAN

$5,374

($263)

-5%

$44,599

21 Lam Research

Chip-making equipment

DEC

$4,861

$716

15%

$12,543

22 Nvidia

Graphics semiconductors

JAN

$4,682

$631

13%

$12,778

23 Juniper Networks

Networking tools

DEC

$4,627

($334)

-7%

$9,650

24 Yahoo

Web media company

DEC

$4,618

$7,522

163%

$42,182

25 Intuit

Financial software

JAN

$4,582

$795

17%

$27,722

26 Electronic Arts

Entertainment software

DEC

$4,453

$847

19%

$17,397

27 Adobe Systems

Publishing software

FEB

$4,256

$291

$38,374

28 Tesla Motors

Electric cars, battery powertrains

DEC

$3,198

($294)

-9%

$24,827

29 Varian Medical Systems

Cancer-fighting equipment

DEC

$3,076

$399

13%

$9,440

30 SunPower

Solar energy products

DEC

$3,027

$246

$4,361

31 KLA-Tencor

Chip-making equipment

DEC

$2,885

$425

15%

$10,145

32 Equinix

IT data centers

DEC

$2,444

($260)

-11%

$13,331

33 Xilinx

Semiconductors

DEC

$2,428

$670

28%

$10,857

34 Trimble Navigation

Global-positioning tools

DEC

$2,396

$214

$6,516

35 Maxim Integrated Products

Semiconductors

DEC

$2,395

$235

10%

$10,167

36 Brocade Communications

Storage area networking tools

JAN

$2,223

$244

11%

$5,132

37 LinkedIn

Professional networking site

DEC

$2,219

($16)

-1%

$32,392

38 Bio-Rad Laboratories

Life science research tools

DEC

$2,175

$89

$3,969

39 Intuitive Surgical

Surgical systems

DEC

$2,132

$419

20%

$18,784

40 Synopsys

Chip-design software

JAN

$2,121

$257

12%

$7,180

41 Altera

Semiconductors

DEC

$1,932

$473

24%

$10,998

42 VeriFone Systems

Payment transaction technology

JAN

$1,919

($8)

$4,048

43 Super Micro Computer

IT hardware

DEC

$1,748

$85

$1,709

44 JDS Uniphase

Optical telecommunications

DEC

$1,737

($62)

-4%

$3,213

45 Cadence Design Systems

Chip-design software

DEC

$1,581

$159

10%

$5,434

46 Linear Technology

Semiconductors

DEC

$1,437

$500

35%

$11,402

47 Fairchild Semiconductor

Semiconductors

DEC

$1,433

($35)

-2%

$2,198

48 Omnivision Technologies

Semiconductor imaging devices

JAN

$1,424

$102

$1,503

49 Atmel

Semiconductors

DEC

$1,413

$32

$3,634

50 Twitter

Multimedia messaging

DEC

$1,403

($578)

-41%

$31,148

Area Overview

SILICON VALLEY 150 2014 RANKINGS (1-19) S&P 500 Companies

A REMARKABLE

DOMINANT VENTURE CAPITAL FLOW

50%

OF THE NATION'S VENTURE

The Bay Area has the highest density of venture capital firms in the world including Kleiner Perkins Caufield & Byers, Sequoia Capital, Menlo Ventures, Draper Fisher Jurvetson and Accel Partners. Venture capitalists invested $49.5 billion in the United States in 2014, a 65% increase over 2013. Venture capital placement totaled $31 billion in the first half of 2015, putting the year on pace to reach its highest level since 2000 when venture capital investments reached $105 billion. A remarkable 50% of the nation’s venture capital dollars have been placed in the Bay Area over the past 18-months. Funds have flowed to a variety of industries with software capturing the lion’s share.

CAPITAL DOLLARS WERE PLACED IN THE BAY AREA

Stevens Creek Executive Park

VENTURE CAPITAL INVESTMENT TREND

$32

55.0%

$28

50.0%

$24

45.0%

$20

40.0%

$16

35.0%

$12

30.0%

25.0%

20.0%

15.0%

• Total U.S. VC Investment (billions)

• Bay Area VC Investment & of Total (rolling 12-month average)

ABUNDANT IPO ACTIVITY After several strong years of venture capital activity, there has been an explosion of IPOs providing newly public companies with substantial cash reserves to support innovation and growth. Over the last year, the US IPO market set a 14- year record against a mostly low-volatility backdrop. With 273 IPOs, 2014 was the most active period of issuance since 406 companies went public in 2000. It was the second year of uninterrupted IPO activity, up 23% over 2013, with proceeds of $85 billion. All this sets us up for a solid 2015 IPO market, as a healthy pipeline and still-positive US economic backdrop should support another year with more than 200 IPOs.

Company

Bay Area Location

IPO Date

IPO Value

San Francisco

Expected

TBD (company valued at $41 billion)

San Francisco

Expected

TBD (company valued at $24 billion)

Palo Alto

Expected

TBD (company valued at $15 billion)

San Francisco

Expected

TBD (company valued at $6 billion)

San Mateo (U.S. HQ)

September 2014

$25 billion

San Francisco

December 2014

$1 billion

San Francisco

June 2015

$732 million

Los Altos

January 2015

$175 million

Berkeley

April 2015

$119 million

San Mateo

July 2014

$86 million

Area Overview

BAY AREA RECENT AND EXPECTED IPOs

BILLION DOLLAR (â&#x20AC;&#x153;UNICORNâ&#x20AC;?) VALUATIONS Backed by a bullish market and a new generation of disruptive technology, there are approximately 120 private companies valued at over $1 billion globally. Taking lessons from the dotcom bust of the early 2000s, investors are basing valuations on sound business models, experienced management teams, real revenue streams, and established growth plans. As a result, growth in the technology sector is much more sustainable than it was 15 years ago. There are 57 private companies headquartered in the Bay Area worth more than $1 billion, accounting for almost half of the global list.

Stevens Creek Executive Park

$1+BILLION PRIVATE COMPANIES (BY REGION)

Bay Area

United Kingdom

China

Boston

India

Europe - Other

New York

Asia - Other

S. California

N. America - Other

THE TOTAL NUMBER OF EMPLOYEES IN SANTA CLARA COUNTY

995,000 ,

NOW STANDS ABOVE

ITS HIGHEST LEVEL IN HISTORY.

STRONG EMPLOYMENT GROWTH The Bay Area added 113,500 jobs in 2014 driving unemployment rates down to their lowest levels in seven years. This marks five straight years of Bay Area job expansion, the longest stretch of employment growth since the dot-com era. Job growth is driven by the region’s booming technology sector; however, other sectors are also experiencing robust growth including restaurants and hotels, real estate, and retail. The Santa Clara County unemployment rate now stands at 4.3% which is equal to the previous cycle’s low in 2007. The total number of employees in Santa Clara County now exceeds 995,000, its highest level in history; surpassing the dotcom boom high (December 1999) by more than 50,000. Santa Clara County and the greater Bay Area are projected to continue to outpace the state and the nation in future job growth driven by its large concentration and continuing competitive advantage in many areas of technology and its position as a Pacific Rim trade and finance center.

1,000,000

12.0%

900,000

10.0%

800,000

8.0%

700,000

6.0%

600,000

4.0%

500,000

2.0%

400,000

0.0%

15 20

14 20

13 20

Unemployment Rate

12 20

11 20

10 20

0 20

8 0 20

0 20

5 0

4 0

0 20

1 0

0 0

9 19

Total Employment

Area Overview

SANTA CLARA COUNTY—EMPLOYMENT TREND (1997-2015)

Stevens Creek Executive Park

RENOWNED EDUCATION SYSTEM

The Bay Area is home to one of the most highly educated populaces in the nation. With some of the most prestigious universities in the country, the region’s graduates go on to drive many of the cutting edge companies fueling the areas innovative economy. • Two of the top 10 rated universities in the world: Stanford University and University of California Berkeley • More than 80 institutions of higher education • Nation’s largest concentration of national laboratories, corporate and independent research laboratories • Highest number of top 10 rated business, law, medicine and engineering graduate programs in the nation • 41% of residents (25 & over) have a bachelor’s degree or higher ~ #3 in the nation

Just 15 miles from the property, Stanford University is renowned as one of the most prestigious universities in the world. With approximately 7,000 undergraduate and 8,900 graduate students, Stanford is organized into seven academic schools including Engineering, Medicine, Law, Education, and Business. Santa Clara University, California’s oldest institution of higher learning, offers its more than 8,000 enrolled students rigorous undergraduate curricula in arts and sciences, business, and engineering, plus masters, Ph.D., and law credentials. Both universities are major contributors to the managerial employment base in Silicon Valley. Other premier Bay Area universities within close proximity include UC Berkeley and University of San Francisco.

ABOVE AVERAGE INCOME LEVELS

COMPELLING POPULATION GROWTH

The Bay Areaâ&#x20AC;&#x2122;s knowledge based economy has spurred one of the wealthiest regions in the country. Approximately half of the households in the Bay Area earn more than $75,000 compared to the national median of 30%. Santa Clara County has the highest median household income in the nation at $95,800 with more than half of the households in the county earning more than $75,000 per year.

The Bay Area is the only region in California where more people are moving in from elsewhere in the United States than moving out, which is another strong indicator of an areaâ&#x20AC;&#x2122;s economic health. According to employment forecasts from the Bay Area Association of Governments (ABAG), the Bay Area is expected to gain 1.1 million jobs and 2.1 million residents between 2010 and 2040. These projections point towards excellent fundamentals underlying long term regional economic growth.

LOCAL MARKET DEMOGRAPHICS Population Profile

1-Mile

2-Mile

3-Mile

Santa Clara County

Population 2015

32,806

117,586

260,586

1,867,405

Population 2010

31,794

112,495

249,755

1,781,642

Population 2020 Est.

34,347

124,091

274,470

1,975,087

Estimated Population Growth 2010-2020

4.70%

5.53%

5.33%

5.77%

Total Daytime Employee Population

9,566

37,723

93,860

957,894

37.0

37.6

37.5

37.1

12,842

44,827

96,552

632,877

Average Household Income 2015

$107,321

$114,117

$115,197

$124,407

Median Household Income 2015

$86,608

$92,071

$90,278

$95,787

$688,739

$712,416

$720,904

$725,966

Median Age

Housing Profile Number of Households 2015

Average Home Value

Stevens Creek Executive Park

GLOBAL TRADE GATEWAY

The Port of Oakland, which was established in 1927, is a world class international cargo and transportation hub and the fifth-largest container shipping port in the United States. Its access to the San Francisco Bay, one of the world’s great natural harbors, allowed the port to specialize in intermodal container operations which revolutionized international trade. This deep water access and proximity to a high density population base have combined to make the Port of Oakland one the West Coast’s premier trade gateways. The port boasted more than 2.4 million container units in 2014, a 2% increase over 2013. This industrial base adds an excellent complement to the region’s innovation based economy providing the Bay Area with an exceptional level of economic diversity.

TRANSPORTATION Highways / Expressways The property is ideally situated approximately one mile from the Lawrence Expressway exit off Interstate 280 providing a direct route to San Francisco and access to all of the region’s major highways including 101, 237, 280, 880, 680, 85, and 87. Lawrence and San Tomas Expressways are major traffic arterials which intersect with Stevens Creek Boulevard and link the region’s key trade areas to its residential communities.

Rail Service Caltrain provides commuter service along the Peninsula from San Francisco to Gilroy and has a station stop in downtown Sunnyvale. Additionally Amtrak national passenger rail service and Union Pacific freight rail service provide access beyond the Bay Area.

Stevens Creek Executive Park

Air Travel Stevens Creek Executive Park lies within minutes of three major international airports: San Jose International Airport (15 minutes), San Francisco International Airport (35 minutes), and Oakland International Airport (45 minutes).

Area Overview

VTA Service Santa Clara Valley Transportation Authority (VTA) provides public bus and light rail service throughout Santa Clara County. The Stevens Creek corridor is served by VTA’s second highest ridership line, the 23 along with the Limited Stop 323 line which provides faster and more direct service. The 323 operates weekdays and is a first step towards building an effective Bus Rapid Transit (BRT) line on Stevens Creek. The Stevens Creek BRT line will provide faster, more frequent service, with limited stops, and enhanced amenities for passengers. BTR service is expected to commence in 2017 and will include a stop within a five minute walk of Stevens Creek Executive Park at Kiely Boulevard.

CITY OF SAN JOSE

San Jose International Airport

Stevens Creek Executive Park

Long deemed the “Capital of Silicon Valley”, San Jose is the largest city in the Bay Area. With a population of nearly one million people, the city is now the third largest city in California, and the tenth largest in the United States. Residents enjoy a world-renowned quality of life, with a wide variety of exciting cultural, recreational and entertainment opportunities. In addition, the city has the nation’s best public safety record of any metropolitan area, marvelous ethnic diversity and a temperate climate. After more than 100 years as a small farming town, San Jose has experienced tremendous growth during the past few decades. San Jose is a strategic regional location for many businesses with convenient access to freeways, airports, railroads, expressways, light rail and other public transportation. Major employers in San Jose include technology giants Cisco Systems, IBM, Brocade, eBay, Hitachi and Adobe.

rd va e l

43 s

en ev t S

ee Cr

Downtown San Jose

d ar v le

n ve e St

ee Cr

Stevens Creek Executive Park

RICH AMENITY BASE Shopping & Restaurants An endless number of shopping opportunities can be found along Stevens Creek Boulevard including: • Villa Shopping Center / Safeway – 0.9 miles • Westfield Valley Fair – 1.8 miles • Santana Row – 1.8 miles • Main Street Cupertino (under construction) – 1.5 miles • The Marketplace – 2.1 miles • Westgate Center / Target – 2.5 miles • Vallco Shopping Center (planned redevelopment) – 2.6 miles There are more than fifty restaurants within a mile radius of Stevens Creek Executive Park.

Hotels The West Valley’s strong corporate base is well served by several brand name and boutique hotels including Hilton, Sheraton, Marriott, Cypress Hotel (Kimpton), Hotel Valencia (Valencia Group) and Aloft (Starwood).

Stevens Creek Executive Park

Professional Sports

San Jose offers an exciting array of professional sports teams including the aforementioned Sharks and SaberCats along with the Major League Soccer Earthquakes. Additionally, neighboring Santa Clara is home to the headquarters and practice fields of the National Football League’s 49ers. The new, 60,000 person, Levi’s Stadium opened for the 2014- 2015 football season in Santa Clara and is less than 20 minutes from Stevens Creek Executive Park.

TOP RANKING PUBLIC SCHOOL SYSTEM Stevens Creek Executive Park falls within the Cupertino school district boundaries. Cupertino is known for its superior school district which has made it one of the most desirable places to live in the Bay Area. The city’s high schools and elementary schools have consistently achieved the highest Academic Performance Index (API) scores in the region placing it in the top 10% in the State of California. The below table compares Cupertino’s API scores to other affluent Silicon Valley communities: Elementary Schools API

High Schools API

Cupertino

962

950

Palo Alto

932

910

Los Altos

961

895

Mt View

863

861

Los Gatos

921

885

Saratoga

959

938

Top 10% in California:

907

868

Meridian Ave

Tantau Ave

Wolfe Rd

Blaney Ave

Scott Blvd

Kiely Blvd

Monroe St

Av e ga to ra Sa

Kiely Blvd

San Carlos St

$ $ SANTANA ROW

Strawberry Park

r Rd

San Jose WESTGATE MALL

Quito Rd

ar at og

Av e

McCoy Ave

Winchester

VT A LI ut G hw HT es R t E AI xp L w y So

Leigh Ave

Meridian Ave Area Overview

m Av e

Downtown Campbell

Cox Ave

sc o

ve Campbell A

Hamilton Ave Hamilton

Union Ave

Hamilton Ave

Willo Glen

Bascom

San Tomas Aquino Rd

ct Rd

Bascom Ave

Winchester Blvd

Av e a og ra t

Country Lane

San Tomas Expwy

Prospe

Payne Ave

Rainbow

L a wrence Expwy

Miller Ave

Fruitdale

Doyle Rd

Joh

y Blaney Ave

Lynnhaven

Blackford

Lynbrook

Rainbow Dr

San Jose City College Santa Clara Valley Medical Center

Williams Rd

e n Av

nso

Alderbrook

Race

Moorpark Ave

Bollinge

De Anza Blvd

le al tV es W Stelling Rd

O'Connor Hospital

VILLA SHOPPING CENTER

rce

l ag

McClellan Rd

Pie

a ed

The Marketplace

am Al

De Anza College

e Th

COLLEG PARK

e Av

ra F

i dd

itz

Pruneridge Ave

Stevens Creek Blvd

WESTFIELD VALLEY FAIR

rk Pa

Ju nip er oS er

Av e

Santa Clara University

i d g e Ave

SANTA CLARA COUNTY

oR ea l

Kaiser Permanente Santa Clara Medical Center

t ing

Stevens Creek Blvd

Winchester Blvd

Wolfe Rd

Pomero y Ave

Lawrence Expwy

Sunnyvale-Saratoga Rd

Hollenbeck Ave

t tS t rke S Ma omy ll Be

Homestead Rd

Pr un

m Ca

Stevens Creek Executive Park

d tea

International Airport lem

SANTA CLARA

sh Wa

Homestead Rd

St nton Be

VALLCO SHOPPING MALL

t te S yet

El Camino Real

e nro Mo

AMENITIES MAP

a Laf

Fremont Ave

San Tomas Expwy

RA IN

46 Dry Creek

er rtn Cu

e Av

MARKET OVERVIEW

OFFICE MARKET OVERVIEW SILICON VALLEY OFFICE MARKET Silicon Valley is consistently ranked as one of the top performing commercial property markets in the nation. The market is made up of more than 72.5 million square feet of office space spread across 17 submarkets. Fueled by demand generated from both well established and burgeoning technology companies, Silicon Valleyâ&#x20AC;&#x2122;s office market has more than rebounded from the 2009 recession, surpassing records set during the dotcom era. At mid-year 2015, the market recorded a vacancy rate of 8.5% and a Class A & B average asking rate of $3.65 per square foot per month on a Full Service (FS) basis.

OFFICE MARKET SUMMARY Cities

Direct

Sublease

Vacancy Rate Total

Q2-15

Q2-14

Avg. Asking Rate (FS)*

4,504,344

163,061

46,189

209,250

4.6%

8.6%

$8.06

Palo Alto

9,308,439

311,571

106,264

417,835

4.5%

3.4%

$7.16

Los Altos

1,096,613

52,429

3,880

56,309

5.1%

4.1%

$4.73

4,859,259

72,080

30,693

102,773

2.1%

7.5%

$5.33

19,768,655

599,141

187,026

786,167

4.0%

5.4%

$7.11

Cupertino

4,374,739

82,129

2,639

84,768

1.9%

2.5%

$4.52

Campbell

2,327,849

194,344

18,680

213,024

9.2%

11.9%

$3.64

2,006,669

96,646

4.8%

6.1%

$3.50

3,778,762

265,424

4,358

269,782

7.1%

6.1%

$3.67

12,488,019

638,543

25,677

664,220

5.3%

6.0%

$3.80

Sunnyvale

8,784,613

290,736

59,442

350,178

4.0%

4.5%

$4.46

Santa Clara

8,126,642

665,444

105,438

770,882

9.5%

16.7%

$3.82

San Jose Airport

3,730,710

450,085

78,695

528,780

14.2%

15.4%

$2.88

North San Jose

3,844,041

890,067

88,088

978,155

25.4%

29.5%

$2.87

Alameda / Civic Center

2,249,215

130,968

5.8%

9.3%

$2.81

South San Jose

1,603,680

230,823

7,199

238,022

14.8%

19.5%

$2.26

Downtown San Jose

8,474,453

1,260,747

123,837

1,384,584

16.3%

17.1%

$2.74

Central Silicon Valley

36,813,354

3,918,870

462,699

4,381,569

11.9%

15.2%

$3.11

955,137

80,334

2,599

82,933

8.7%

6.9%

$1.96

Fremont

2,504,718

210,214

10,702

220,916

8.8%

9.6%

$2.09

South I-880 Corridor

3,459,855

290,548

13,301

303,849

8.8%

8.9%

$2.05

72,529,883

5,447,102

688,703

6,135,805

8.5%

10.7%

$3.65

101 Tech. Corridor

Los Gatos / Saratoga West San Jose West Valley

Stevens Creek Executive Park

Available Space

Menlo Park

Mountain View

Building Base

Milpitas

SILICON VALLEY TOTALS *Class A and B space only

THE SILICON VALLEY OFFICE MARKET POSTED A STAGGERING 4.4 MILLION SQUARE FEET OF POSITIVE NET ABSORPTION IN THE FIRST HALF OF 2015 ALONE SPEC DEVELOPMENT ACCOMODATES HISTORIC DEMAND

VACANCY REACHES PRE-RECESSION LEVELS

This trend of falling vacancy has continued even with the return of development to the region; 9.4 million square feet of new product has been built since 2011 with speculative projects accounting for nearly two-thirds. The Silicon Valley office market posted a staggering 4.4 million square feet of positive net absorption in the first half of 2015 alone, already surpassing the 2014 full year total of 2.2 million square feet and more than backfilling the 3.8 million square feet of new development delivered this year. The rapid lease up of speculative development in the region includes Palo Alto Network’s lease of Menlo Equities’ 751,000 square foot project in Santa Clara (one existing and two planned) and LinkedIn’s lease of two planned buildings totaling 456,000 square feet in Mountain View.

Since 2010, the Silicon Valley office market has recorded 16.0 million square feet of positive net absorption causing the market vacancy rate to drop from 19.3% in the beginning of 2010 to 8.5% at mid-year 2015. Current vacancy levels have now dipped below the previous cycle’s low of 9.7% in 2007.

SILICON VALLEY OFFICE - OVERALL VACANCY 18%

16%

14%

12%

Historical Average: 12.1%

Market Overview

10%

6% 2011 PALO ALTO NETWORKS

2012

2013

2014

2015

RENTAL RATES SURPASS PREVIOUS CYCLE HIGHS WITH ROOM TO GROW Silicon Valley’s robust leasing velocity has been matched with corresponding increases in rental rates. The average full service asking rate for Class A and B space increased to $3.65 per square foot per month in Q2 2015. This represents a $0.30/sf increase over the $3.35 average recorded one year prior. The 101 Tech Corridor cities command the highest rents (currently averaging $7.11) followed by the West Valley ($3.80), Central Silicon Valley ($3.11), and I-880 Corridor ($2.05). The current average asking rate now stands above the previous cycle’s high of $3.48 per square foot recorded in 2008, but remains well below the record high of $6.84 recorded in 2000.

Stevens Creek Executive Park

NET ABSORPTION (TRAILING AVERAGE) / AVG. ASKING RENT

1,500,000

$3.80

1,250,000

$3.60

1,000,000

$3.40

750,000

$3.20

500,000

$3.00

250,000

$2.80

$2.60 2011

2012 Net Absorption

2013

2014

2015

Class A/B Avg. Asking Rent (FS)

CONTINUED TENANT DEMAND Demand remains extremely strong and there are several large tenants in the market looking for space. We are currently tracking more than 12 million square feet of active office/ R&D requirements. The demand comes from a variety of industries; with software/ internet (48%), hardware (14%), and life science (10%) companies accounting for the majority of the requirements. With continued strong demand, we expect remaining second generation vacancies and speculative developments to be leased up at a fairly brisk pace.

CORPORATE EXPANSIONS Rapid growth in the technology sector has driven a wave of corporate expansions throughout Silicon Valley by some of the regionâ&#x20AC;&#x2122;s largest employers including Apple, Google, Samsung, LinkedIn, Nvidia, Juniper Networks, and Amazon.com.

Software/Internet

Government/Education

Hardware/Tech

Prof. Services

Unspecified

Consumer Products

Life Science

Construction/Ind. Services

Communication/Media

Non-Profit

Medical/Health Care

Market Overview

TENANT DEMAND (BY INDUSTRY)

WEST VALLEY OFFICE MARKET The West Valley market area contains approximately 12.5 million square feet of office inventory in the submarkets of Campbell, Cupertino, Los Gatos, Saratoga and western San Jose. These communities are characterized by high-income housing for executives, historically low commercial vacancy, limited inventory, and excellent transportation access. The West Valley office vacancy rate currently stands at 5.3%, well below the Silicon Valley average of 8.5%. The market area has maintained a vacancy rate below 8% for the past 14 consecutive quarters and an average vacancy rate below 10% for the past 20+ years. Tightening office market conditions have a substantial impact on asking rents in the West Valley. The full service asking rate for Class A and B office space currently stands at $3.80 per square foot per month, a 17% increase over the $3.25 average recorded at mid-year 2014.

Stevens Creek Executive Park

WEST VALLEY OFFICE - OVERALL VACANCY / AVG. ASKING RENT

14%

$4.00

12%

$3.75

10%

$3.50

$3.25

$3.00

$2.75

$2.50

$2.25 2011

2012

2013 Vacancy

2014

Class A/B Avg. Asking Rent (FS)

2015

THE APPLE EFFECT The West Valleyâ&#x20AC;&#x2122;s most significant tenant, Apple, controls more than 7 million square feet of office and R&D space in Cupertino. With virtually no large blocks of available space left in Cupertino, Apple has been forced to look outside of its home town to neighboring cities to accommodate its continued rapid growth. Other Cupertino tenants are now looking to surrounding West Valley submarkets such as Campbell to accommodate new space requirements. Appleâ&#x20AC;&#x2122;s growth has created extremely tight market conditions throughout the West Valley.

APPLE CAMPUS II SEPTEMBER 2015

APPLE HQ

WEST VALLEY OFFICE LEASE COMPS Address 1

Stevens Creek Executive Park

Cupertino Financial Center 10050 North Wolfe Road Heritage Village Plaza 51 E Campbell Ave

Size (SF)

Start Rent / Mo. (FS)

Eff. Rent / Mo. (FS)

Lease Date

Term (months)

Tls/SF

Rancher Labs

2,070

$5.40

$5.48

Sept-15

23.5

As Is

Campbell

Square 1 Bank

4,066

$3.35

$3.56

Aug-15

$10.00

1,754

$4.20

$4.32

Aug-15

63.0

$10.00

921

$4.15

$4.12

Jul-15

31.0

As Is

City

Tenant

Cupertino

The Pruneyard 1999 South Bascom Avenue

Campbell

Santa Cruz Skilled Nursing

The Pruneyard 1901 South Bascom Avenue

Campbell

Clouldbolt Software

Cupertino Financial Center 10050 North Wolfe Road

Cupertino

Ricoh Innovations

14,053

$5.15

$5.90

Jul-15

120

$17.50

910 Campisi Way

Campbell

Stock & Option Solutions

2,382

$3.50

$3.61

Jul-15

As Is

Tisch Tower 3031 Tisch Way

San Jose

Tech21

4,941

$3.95

$4.07

Jul-15

$9.00

Tisch Tower 3031 Tisch Way

San Jose

PlayChat

1,420

$3.98

Jul-15

As Is

Tisch Tower 3031 Tisch Way

San Jose

TapClicks

2,924

$3.50

$3.66

Mar-15

As Is

790 E Campbell Ave

Campbell

First Bank

3,644

$2.92

$2.96

May-15

As Is

Water Tower Plaza 307 Orchard City Drive

Campbell

Neoglyphic Entertainment

2,469

$2.50

$2.52

Feb-15

As Is

Tisch Tower 3031 Tisch Way

San Jose

Pfeiffer Ranch Investors

2,307

$3.45

$3.75

Jan-15

As Is

S. Levy Building 3425 S Bascom Ave

Campbell

Robinson, Alberto, Englehardt, Baldwin

1,105

$2.70

$2.78

Dec-14

$5.00

Tisch Tower 3031 Tisch Way

San Jose

Cane Companies Management

2,444

$3.45

$3.61

Dec-14

As Is

WEST VALLEY OFFICE LEASE COMPS MAP

Walsh Ave.

Virginia

Scott Blvd.

Monroe St.

. Av e om sc

Los Gatos

Av e

. Ave

ham

Bran

Ln.

Market Overview

Meridian Ave.

lvd . rB ste he

Wi nc

Quito Rd.

Leigh Ave.

San Tomas Aquino Rd.

. Av e ga to ra Sa

Fruitvale Ave.

Av e

Saratoga Sunnyvale Rd.

p wy

RA T

LI G H

Bubb Rd.

Los Gatos Creek Park

West Valley College

Mile

n Av

Hacienda Ave.

dale

Hills

y Av

orth

w Fox

idia

0.5

ga to ra a S

Winchester

McCoy Ave.

Mer

Saratoga

Campbell

Union Ave.

ce er

Downtown Campbell

ve. er A

n urt

y. Almaden Ex p w

S A N TA C R U Z M O U N TA I N S

Campbell Ave.

e Av

Cox Ave.

Hamilton

ve eA

Saratoga Country Club

Hamilton Ave.

Lin

Stevens Creek County Park

Westgate Mall

V TA

Bascom

TAMIEN

Alm a

San Tomas Expwy.

Av e ga to ra Sa

Lawrence Expwy.

Bowers Ave.

Sunnyvale-Saratoga Rd.

Hollenbeck Ave.

Wolfe Rd.

Payne Ave.

Prospect Rd.

w llo Wi

St.

IN RA IL LT RA CA HT LIG

Rd.

Tamien

Fruitdale

A VT

Rainbow Dr.

. St

San Jose City College

Williams Rd.

yle

St.

Santana Row

. St

th 10

San Carlos St.

SAN JOSE Stevens Creek Executive Park

Bollinger Rd.

th 17 N.

th 13 N.

Foothill Blvd.

Rd.

San Jose State University

Race

Deep Cliff Golf Course

lia

SAP Center

Stevens Creek Blvd.

Japantown/ Ayer Station

SAN JOSE DIRIDON

12 Westfield Valley Fair

Fw y

IL RA wy HT e F p LIG

Pruneridge Ave.

De Anza College

itz

al u

Se rra

e Av

Stevens Creek Blvd.

pe ro

SANTA CLARA COUNTY

COLLEGE PARK

Cupertino

Ju ni

Vallco Shopping Mall

S ket

LT RA IN

SANTA CLARA

Homestead Rd.

Santa Clara University

t. rS ylo a T

Civic Center

Central Park

SANTA CLARA

El Camino Real

Homestead Rd.

Gish

A VT

Ortega Park

. St

Bayshore B Fwy

Benton

tS 1s N.

SUNNY VALE

Metro/ Airport

Sunken Gardens Golf Course

S yette Lafa

lvd. as B baz Cala

a Re

Fremont Ave.

San Jose International Airport

San Jose Mun. Golf Course

. Rd

er ry es d. sa

LAWRENCE

Monroe St.

o in m Ca

reek Fwy ns C Steve

Remington Dr.

F Ex oot pw hil y. l

E velyn A ve.

Mountain View

Los Altos

CAL TRA IN

Downtown Sunnyvale

nd Oakla

San Francisco Intl. Airport 25 miles

RETAIL MARKET OVERVIEW SILICON VALLEY RETAIL MARKET The Silicon Valley retail market is home to approximately 39 million square feet of shopping center inventory. With just under 2.1 million square feet currently available, the Silicon Valley retail market continues to thrive below historical average vacancy levels. At mid-year 2015, shopping center vacancy stood at 5.3% down from the 5.5% recorded on year prior. The majority of existing retail vacancy is classified as B or C space with the primary demand in the region seeking high-quality space with tenants willing to pay the difference. RETAIL MARKET SUMMARY TABLE

Vacancy Rate

Available Space

Building Base

Direct

Sublease

Total

Q2-15

Avg. Asking Rate (NNN)

San Jose (DT/South)/Campbell/Los Gatos

18,640,577

964,011

49,091

1,013,102

5.4%

$2.52

Sunnyvale/Cupertino

4,622,497

151,049

6,246

157,295

3.4%

$3.14

Santa Clara

2,550,252

78,386

33,350

111,736

4.4%

$2.79

Palo Alto/Mountain View/Los Altos

2,705,823

98,590

3.6%

$2.94

Milpitas/North San Jose

4,876,107

265,715

5.4%

$2.41

Morgan Hill/Gilroy

4,718,147

372,791

7.9%

$1.55

39,009,636

1,970,926

88,687

2,059,613

5.3%

$2.36

Submarket

SILICON VALLEY TOTALS

Stevens Creek Executive Park

SILICON VALLEY RETAIL - OVERALL VACANCY

10% 9% 8% 7% 6%

Historical Average: 6.3%

5% 4% 3% 2% 2011

2012

2013

2014

2015

INCREASING ASKING RENTS The mid-year 2015 average NNN asking rent for the region is $2.36 per square foot per month, an increase from $2.33 posted a year earlier. An important note with average asking rent in the Silicon Valley is that it only takes into account available product which is primarily B and C space. This number is far from the $4.00 per square foot or more that is regularly seen for small shop space and even further from premium shop space in brand new centers lease at $5.75 per square foot or more.

SILICON VALLEY RETAIL NET ABSORPTION (TRAILING AVERAGE) / AVG. ASKING RENT 300,000

$2.50

250,000

$2.40

200,000

$2.30

150,000

$2.20

100,000

$2.10

50,000

$1.90 2011

2012 Net Absorption

2013

2014

2015

Class A/B Avg. Asking Rent (FS)

THE HIGH-TECH IMPACT Silicon Valleyâ&#x20AC;&#x2122;s fast-paced, competitive, lucrative and innovative environment coupled with a high-quality of life attracts top employment talent to the region. High-income demographics translate to a competitive retail environment where a broad spectrum of tenants from every-day-needs to specialty and lifestyle retailers aggressively compete for the best located and new spaces.

Market Overview

$2.00

CUPERTINO/SUNNYVALE RETAIL MARKET The property’s location along Stevens Creek Boulevard, a mile from the Cupertino border, makes it most competitive with other Cupertino retail centers that fall within the Sunnyvale/Cupertino submarket. This premier submarket represents one of the Silicon Valley’s densest accumulations of retail positioned within and infill location creating high barriers to entry from future competition. The Sunnyvale/Cupertino retail market continues to experience strong momentum in both vacancy and rents. Over the past 12 months, average vacancy has decreased from 6.2% to 3.4% as of mid-year 2015. The Cupertino/Sunnyvale retail market boasts an average asking rent of $3.14 per square foot, almost $0.80 higher than the region’s average of $2.36. The YTD absorption has been positive at 93,524 square feet. New class A product is expected to remain in high demand as retailers compete to enter or expand their presence in this desired market-area.

MULTI-FAMILY OVERVIEW SILICON VALLEY MULTI-FAMILY MARKET

Stevens Creek Executive Park

The Silicon Valley multi-family market is comprised of the fifteen cities within Santa Clara County, the tenth most populous county in the United States. The county is comprised of 143,120 multi-family units spread across 1,526 properties (communities of 16 units or greater). Historical employment levels and in-migration have put significant pressure on demand for housing. While robust development activity has alleviated some of this demand, the region continues to face a housing shortage.

NEW DEVELOPMENT TO HAVE A SHORT LIVED IMPACT ON VACANCY At mid-year 2015, Silicon Valley’s multi-family vacancy rate stood at just 4.3%. A year ago, vacancy stood at 4.0% and then inched up the following two quarters to 4.3%. What happened next describes the dynamic forces in hand in Santa Clara County. As the market added more the 5,000 new units, vacancy dipped to 3.3% in the first quarter and then settled back at 4.3% by mid-year. Nearly 3,000 new rental units were completed in 2014, and 2015 is on pace to surpass this total. In the first six months of the year, developers added nearly 2,400 new multi-family units and approximately 6,000 units are currently under construction with delivery dates through 2017. While we expect to see vacancy levels climb in late 2015/early 2016, it will be short-lived. As aggressive as new development levels currently are, it is critical to note that since 2010 the area has added more than 340,000 new residents and just over 40,000 new housing units. That equates to roughly one housing unit for every 8.5 new residents resulting in a substantial housing shortage.

WEST VALLEY MULTI-FAMILY MARKET With excellent access to transportation, exceptional retail amenities and high barriers to entry, housing located in the West Valley is in high demand. Appleâ&#x20AC;&#x2122;s Campus II will add another 13,000 employees to the immediate area and place further pressure on the need for housing in the immediate area. There are several development projects recently completed, planned, or under construction within a 3-mile radius of the subject property. These highly sought-after developments command premium rents and are expected to lease-up quickly.

CONTINUED GROWTH IN RENTAL RATES EXPECTED The Silicon Valley multi-family market has seen consistent rental rate growth since 2010. The current average asking rent of $2,584 per month is up 11.3% from where it stood one year ago. Over the past four years this metric has increased by 44.3%. Rent growth is expected to continue but at a slower pace in the near term as new deliveries surge.

MULTI-FAMILY DEVELOPMENT ACTIVITY (3 MILE RADIUS)

Recently Completed (2014/2015) Project

City

Developer

Units

Rent Range

Tuscany Apartments

Santa Clara Citation Homes Central

133

$2,452 - $2,918

Hearth Apartments

Santa Clara Prometheus Real Estate Group

289

$3,118 - $3,774

Nineteen 800

Cupertino

Evershine Group

204

$4,277 - $5,811

Pinnacle

108

$2,550 - $3,895

734

$3,236 - $4,203

Alvin's Corner on Penny Lane Campbell

Total / Average:

Project

City

Alexis

Developer

Units

Status

Santa Clara SiliconSage Builders

Under Construction

Villas On The Boulevard

Santa Clara SummerHill Homes

186

Under Construction

Cobalt Apartments

Santa Clara Prometheus Real Estate Group

244

Under Construction

Downtown Gateway

Santa Clara SiliconSage Builders

Proposed

The Hamptons - Phase II

Cupertino

The Irvine Company

942

Proposed

Lofts at Main Street

Cupertino

Sand Hill Property Company

120

Proposed

Gateway Village

Santa Clara Essex Property Trust

476

Proposed

Total: 2,072

Market Overview

Under Construction / Proposed

DEVELOPMENT ACTIVITY Exceptional and enduring market fundamentals along with the incredible growth of Apple have spurred strong development activity in the West Valley. There are several high-profile commercial, residential and mixed used projects that are expected to transform the area into a premier live-work-play environment. Select projects are highlighted below:

1) APPLE CAMPUS II

2) MAIN STREET CUPERTINO

The 2.8 million square foot office/R&D campus will

The

include a 1,000 seat corporate auditorium, a state of the

currently

17-acre,

$330

project

Developer Sand Hill Property Company recently

vibrant

unveiled plans to create a 30-acre elevated park

art fitness center, a café that seats 3,000 people, and

mixed-use town center complete with retail, office

above a 15-block, mixed-use street grid filled with

extensive landscaping. The campus will accommodate

and residential. The project consists of 120 apartment

625,000 square feet of retail, 2 million square feet of

13,000 employees and is regarded as one of the most

units, a 180-room hotel, 130,500 square feet of retail,

office and 800 residential units. This $3 billion project

innovative real estate projects in the history of Silicon

275,000 square feet of office and a town square area.

would be the world’s largest green roof featuring an

Valley. The project will cost an estimated $5 billion and

Apple will occupy all of the office space.

orchard, a vineyard, and 3.8 miles of trails.

under

million

construction

development

3) THE HILLS AT VALLCO

includes

Stevens Creek Executive Park

is projected to be completed by 2017.

4) THE OFFICES @ SANTANA ROW

5) THE GROVE

6) MULTI FAMILY DEVELOPMENTS

500 Santana Row is a 233,000 square foot Class A

The Grove is located at Winchester Boulevard and

Strong employment growth has driven renewed demand

office building currently under construction in San

Highway 85 in Los Gatos and is entitled for 550,000

for housing. Within a 3-mile radius of Stevens Creek

Jose at Winchester Boulevard and Interstate 280. The

square feet of Class A Office. Currently, two buildings

Executive Park there are three noteworthy multifamily

building is the newest addition to Federal Realty’s

totaling 242,500 square feet are under construction

projects under construction with a total of 490 units and

premier retail/mixed use center, Santana Row. With an

and pre-leased to Netflix. Completion is scheduled for

four additional projects planned totaling 1,582 units.

estimated completion in Fall 2016, the building is the

Q4-2015. The balance of the project is planned.

first of three planned office buildings at Santana Row totaling 735,000 square feet. Software company Splunk recently signed a 10-year lease on the building.

DEVELOPMENT ACTIVITY MAP

Walsh Ave.

Scott Blvd.

San Tomas Expwy.

Bowers Ave.

Monroe St.

Av e

ga to ra Sa

p wy

Meridian Ave.

Winchester

vd Bl ter he s

Wi nc

Hacienda Ave.

Los Gatos Creek Park

5) The Grove

Los Gatos

Av e

West Valley College

dale

Hills

y Av

orth

w Fox

McCoy Ave.

. Ave

ham

Bran

Ln.

Market Overview

RA T

LI G H

V TA

Campbell

Quito Rd.

Leigh Ave.

San Tomas Aquino Rd.

Bubb Rd.

Av e ga to ra

Alm a

Lawrence Expwy.

Sunnyvale-Saratoga Rd.

Hollenbeck Ave.

Wolfe Rd.

Fruitvale Ave.

Av e

y. Almaden Ex p w

Saratoga Sunnyvale Rd.

IN RA IL LT RA CA HT LIG

e Av

. St

Foothill Blvd.

th 17 N.

ve. rA

ne urt

. Ave

Mile

ve eA

n idia

Downtown Campbell

TAMIEN

Mer

0.5

Hamilton

Campbell Ave.

w llo Wi

St.

Hamilton Ave.

Tamien

Fruitdale

Lin

Westgate Mall

Union Ave.

Virginia

A VT

Rd.

Alvinâ&#x20AC;&#x2122;s Corner onBascom Penny Lane

Saratoga

St.

yle

Payne Ave.

Cox Ave.

ga to ra a S

San Jose City College

Williams Rd.

Prospect Rd.

ce er

San Carlos St.

4) The Offices @ Santana Row

Santana Row

SAN JOSE Stevens Creek Executive Park

Rainbow Dr.

th 13 N.

Stevens Creek Blvd.

S A N TA C R U Z M O U N TA I N S

SAN JOSE DIRIDON

Race

2) Main Street Cupertino

Saratoga Country Club

th 10

e Av

Fw y

Bollinger Rd.

Stevens Creek County Park

San Jose State University

SAP Center

Westfield Valley Fair

Nineteen 800

Deep Cliff Golf Course

lia

Heath Apartments

Japantown/ Ayer Station

at Main Street

Rd.

itz

IL RA wy HT e F p LIG

COLLEGE PARK

t. rS ylo Ta

Civic Center

al u

S ket

SANTA CLARA

Pruneridge Ave. Cobalt Apartments

Se rra

A VT

LT RA IN

Santa Clara University

pe ro

DowntownCAGateway

Stevens Creek Blvd.

De Anza Lofts College

Ju ni

Vallco Shopping Mall

SANTA CLARA

El Camino Real

SANTA CLARA COUNTY

Gish

3) The Hills at Vallco

Homestead Rd.

Central Park

Bayshore B Fwy

1) Apple Campus

The Hamptons

Cupertino

. St

Alexis

tS 1s N.

Benton

Villas on the Blvd

Metro/ Airport

SUNNY VALE

S yette Lafa

Sunken Gardens

Gateway Golf Village Course

Ortega Park

Homestead Rd.

lvd. as B baz Cala

Tuscany Apartments

a Re

Fremont Ave.

San Jose International Airport

San Jose Mun. Golf Course

. Rd

er ry es d. sa

LAWRENCE

Monroe St.

o in m Ca

reek Fwy ns C Steve

Remington Dr.

F Ex oot pw hil y. l

E velyn A ve.

Mountain View

Los Altos

CAL TRA IN

Downtown Sunnyvale

nd Oakla

San Francisco Intl. Airport 25 miles

FINANCIAL ANALYSIS

ANALYSIS ASSUMPTIONS GLOBAL

SECOND GENERATION LEASING

Analysis Period Commencement Date End Date Term

January 1, 2016

Office >3K

Retail

75%

Renewal Probability

120 months

Area Measures

Financial Terms

$10.44 PSF

Management Fee Capital Reserves

Rent Escalations

$2.75 PSF

$3.50 PSF

3.0%

3 years

5 years

10 years

New BY

Net

$0.20 PSF

OCCUPANCY

39,632

Lease Term

4320 Stevens Creek Blvd

38,700

Expense Reimbursement

4340 Stevens Creek Blvd

59,196

4360 Stevens Creek Blvd

17,635

Leasing Costs

Current direct available SF

4400 Stevens Creek Blvd

10,253

Tenant Improvements ($/SF)

Lease up period from Jan 01, 2016

165,416

Growth / Vacancy Rates

$8.00 PSF

$8.00 PSF $10.00 PSF

Renewal

$2.50 PSF

$0.00 PSF

$3.88 PSF

$2.50 PSF

0 Months

New

6.00%

Retail

Renewal

3.00%

Schedule2

3.75%

Weighted Average

General Inflation Rate

3.0%

Base Rent Abatement

Property Taxes

2.0%

New / Renewal Leasing Commissions (%)

Market Rent Growth FY ending Dec 31, 2016

starting rent

FY ending Dec 31, 2017

5.0%

FY ending Dec 31, 2018

5.0%

Weighted Average

FY ending Dec 31, 2019

3.0%

Downtime

FY ending Dec 31, 2020

3.0%

New

6 Months

FY ending Dec 31, 2021

3.0%

Renewal

0 Months

1.5 Months

General Vacancy Rate

5.0%

Occupancy at Sale % Leased at sale # Tenants (direct)

New

Weighted Average

3.0% EGR 1.2009%

4300 Stevens Creek Blvd

TOTAL RSF

Stevens Creek Executive Park

Year 1 Expenses3 Millage Rate

December 31, 2025 Monthly Market Rent

ANNUAL OPERATING EXPENSES

Office <3K

88% 108 19,700 10 Months

ANALYSIS ASSUMPTIONS CURRENT AVAILABILITY LEASE-UP Suite

Space Type

RSF

Lease-up Period

Lease Start Date

Abatement TIs ($/SF)

LC (%)

Lease Term Starting Monthly Rent Annual Increase

4300 - 179

Office

925

2 months

March 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4300 - 183

Office

462

2 months

March 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4320 - 202

Office

415

4 months

May 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4340 - 112

Office

1,162

4 months

May 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4340 - 191

Office

739

6 months

July 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4340 - 231

Office

4,380

6 months

July 1, 2016

none

$8.00

6.00%

5 Years

$2.75 FS

3.0%

4340 - 240

Office

2,219

8 months

September 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4340 - 250

Office

4,996

8 months

September 1, 2016

none

$8.00

6.00%

5 Years

$2.75 FS

3.0%

4340 - 270

Office

1,102

10 months

November 1, 2016

none

$8.00

6.00%

3 Years

$2.75 FS

3.0%

4360 - 102

Retail

1,360

6 months

July 1, 2016

none

$10.00

Retail Sched.

5 Years

$3.50 NNN

3.0%

4360 - 103

Retail

1,940

9 months

September 1, 2016

none

$10.00

Retail Sched.

5 Years

$3.50 NNN

3.0%

NOTES 1. Expense reimbursement for the majority of current office tenants is based on a fixed schedule: Lse Yr 1: $0.00/sf/mo, Lse Yr 2: $0.03/sf/mo, Lse Yr 3: $0.06/sf/mo, etc. 2. Retail commission schedule: Lse Yr 1-3 = 6%, Lse Yr 4-3 = 5%, Lse Yr 5 = 4%, Lse Yr 5-10 = 2.5%. 3. Operating expenses are generally based on the 2015 Budget plus a 3% inflation factor. 4. Property tax expense shown in the cash flow is based on the 2015 Budget (plus 2%) and needs to be adjusted to reflect a reassessment per CA Prop 13. The electronic Argus file includes the estimated 2015/16 millage rate and special assessments. 5. Specific renewal assumptions were made for tenants expiring prior to the Analysis Start Date (see Rent Roll for details). 6. RSF for specific suites adjusted to reflect current load factors at expiration (see Rent Roll for details).

Financial Analysis

Buyer must enter their Property Purchase Price in the Argus file to calculate the full estimated property tax.

PRO FORMA CASH FLOW Year 1

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

$ PSF

Dec-2016

Dec-2017

Dec-2018

Dec-2019

Dec-2020

Dec-2021

Dec-2022

Dec-2023

Dec-2024

Dec-2025

Dec-2026

Potential Rental Revenue

$30.60

5,061,482

5,299,662

5,594,994

5,927,710

6,221,602

6,419,419

6,671,282

6,860,982

7,159,752

7,475,253

7,701,302

Absorption & Turnover Vacancy

($3.37)

-556,913

-144,302

-194,107

-294,080

-213,068

-330,078

-341,259

-212,055

-416,292

-300,750

-331,190

Scheduled Base Rental Revenue

$27.23

4,504,569

5,155,360

5,400,887

5,633,630

6,008,534

6,089,341

6,330,023

6,648,927

6,743,460

7,174,503

7,370,112

$2.11

349,175

392,045

393,833

389,155

399,170

403,705

392,793

415,797

388,649

437,806

439,434

$29.34

4,853,744

5,547,405

5,794,720

6,022,785

6,407,704

6,493,046

6,722,816

7,064,724

7,132,109

7,612,309

7,809,546

For the Years Ending INCOME

Expense Reimbursement Revenue Total Gross Revenue General Vacancy

$0.00

-140,283

-105,335

-61,332

-117,971

-51,536

-22,227

-151,784

-6,452

-95,682

-98,476

Effective Gross Revenue

$29.34

4,853,744

5,407,122

5,689,385

5,961,453

6,289,733

6,441,510

6,700,589

6,912,940

7,125,657

7,516,627

7,711,070

Property Taxes

$2.49

412,000

420,240

428,645

437,217

445,962

454,881

463,980

473,258

482,723

492,379

502,226

Insurance

$0.54

89,000

91,670

94,421

97,253

100,171

103,175

106,271

109,459

112,743

116,125

119,609

OPERATING EXPENSES

CAM

$6.53

1,080,000

1,112,400

1,145,772

1,180,145

1,215,550

1,252,016

1,289,576

1,328,263

1,368,112

1,409,155

1,451,430

Mgmt Fee

$0.88

145,613

162,213

170,682

178,843

188,692

193,245

201,018

207,388

213,769

225,499

231,332

Total Operating Expenses

$10.44

1,726,613

1,786,523

1,893,520

1,893,458

1,950,375

2,003,317

2,060,845

2,118,368

2,117,347

2,243,158

2,304,597

Net Operating Income

$18.90

$3,127,131

$3,620,599 $3,849,865 $4,067,995 $4,339,358 $4,438,193 $4,639,744 $4,794,572 $4,948,310 $5,273,469 $5,406,473

Stevens Creek Executive Park

LEASING & CAPITAL COSTS

Tenant Improvements

$1.68

277,750

89,239

141,285

171,195

151,036

201,476

199,811

167,238

232,637

200,377

216,670

Leasing Commissions

$1.83

302,974

89,798

144,931

175,617

229,671

301,164

352,891

171,547

564,562

218,608

239,051

Capital Reserves

$0.25

41,354

42,594

43,873

45,188

46,544

47,940

49,379

50,861

52,386

53,958

55,577

622,078

221,631

330,089

392,000

602,081

389,646

849,585

472,943

511,298

Total Leasing & Capital Costs

$3.76

Cash Flow Before Debt Service

$15.14

$2,505,053 $3,398,968 $3,519,776 $3,675,995

427,251

550,580

$3,912,107

$3,887,613

$4,037,663 $4,404,926 $4,098,725 $4,800,526 $4,895,175

Avg Contract Rent ($ psf/mth)

$2.53

$2.55

$2.67

$2.82

$2.97

$3.06

$3.20

$3.27

$3.39

$3.56

$3.67

Wtd Avg Market Rent ($ psf/mth)

$2.88

$3.02

$3.03

$3.12

$3.22

$3.31

$3.41

$3.52

$3.62

$3.73

$3.84

% Over/(Under) Market

-12.0%

-15.5%

-12.0%

-9.7%

-7.7%

-7.6%

-6.3%

-7.0%

-6.3%

-4.5%

-4.3%

EXISTING LEASE EXPIRATIONS Fiscal Year Ending

Net Rentable Square Feet Expiring

Percentage Square Feet Expiring

Cumulative Square Feet Expiring

Weighted Average Contract Rent

Projected Market Rent

Over Market / (Under Market) $/SF Variance

Over Market / (Under Market) % Variance

Currently Vacant

19,700

11.9%

Dec-16

34,005

20.6%

32.5%

$2.53

$2.88

($0.34)

-11.97%

Dec-17

30,967

18.7%

51.2%

$2.55

$3.02

($0.47)

-15.50%

Dec-18

31,168

18.8%

70.0%

$2.67

$3.03

($0.36)

-12.00%

Dec-19

12,402

7.5%

77.5%

$2.82

$3.12

($0.30)

-9.70%

Dec-20

7,988

4.8%

82.4%

$2.97

$3.22

($0.25)

-7.68%

Dec-21

3,365

2.0%

84.4%

$3.06

$3.31

($0.25)

-7.60%

Dec-22

0.0%

84.4%

$3.20

$3.41

($0.22)

-6.33%

Dec-23

0.0%

84.4%

$3.27

$3.52

($0.25)

-7.04%

Dec-24

21,132

12.8%

97.2%

$3.39

$3.62

($0.23)

-6.33%

Dec-25

0.0%

97.2%

$3.56

$3.73

($0.17)

-4.48%

45.0%

$4.00

40.0%

$3.75

35.0%

$3.50

30.0%

$3.25

25.0%

$3.00

20.0%

$2.75

15.0%

$2.50

10.0%

$2.25

5.0%

$2.00

0.0%

$1.75 Currently Vacant

Dec-16

Dec-17

Dec-18

Dec-19

% SqFt Expiring

Dec-20

Dec-21

Contract Rent

Dec-22 Market Rent

Dec-23

Dec-24

Dec-25

Financial Analysis

MARKET RENT VS. WEIGHTED AVERAGE CONTRACT RENT

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Mail Room Office, Suite: 4300

Rental Rates Changes on

Monthly

PSF

Annually

PSF

Current

$0.00

50 0.0%

All Spectrum Insurance Broker

Current

Office, Suite: 4300-100

2,093

Sep-2011 to Aug-2016

1.3%

$4,814

$2.30

$57,768

$27.60

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Reimbursements

Amount

for this tenant

Full Service:

Market

Pays no expense

See assumption:

reimbursement.

Office <3K

See method: 2011

Market

See assumption:

Clause (Y/N) Notes -

No One 5-yr option to extend @ 95% FMR with 4-6 mos notice.

Office <3K

60 Months NF Wealth Management Office, Suite: 4300-117

2,641

Aug-2010 to Aug-2020

1.6%

121 Months

Secote Office, Suite: 4300-125

427

Jul-2014 to Jun-2016

0.3%

Current

$6,999

$2.65

$83,988

$31.80

See method: 2015

Market

Sep-16

$7,131

$2.70

$85,572

$32.40

BY (est)

See assumption:

Sep-17

$7,263

$2.75

$87,156

$33.00

Sep-18

$7,395

$2.80

$88,740

$33.60

Sep-19

$7,527

$2.85

$90,324

$34.20

Current

$982

$2.30

$11,784

$27.60

Yes

Office <3K

See method: 7/15

Market

-0.03

See assumption:

Yes

Office <3K

24 Months Current

$1,398

$2.51

$16,776

$30.06

See method: 9/16

Market

Office, Suite: 4300-126

Unish Corporation 558

Sep-16

$1,423

$2.55

$17,076

$30.60

-0.03

See assumption:

Sep-2015 to Aug-2018

0.3%

Sep-17

$1,451

$2.60

$17,412

$31.20

Current

$4,077

$2.18

$48,924

$26.16

See method: 3/14

Market

Jun-16

$4,171

$2.23

$50,052

$26.77

-0.03

See assumption:

Yes

Office <3K

36 Months

Stevens Creek Executive Park

John Eaves

Office, Suite: 4300-130

1,870

Mar-2013 to May-2017

1.1%

Yes

Office <3K

51 Months Acrowit Office, Suite: 4300-135

1,382

Feb-2015 to Mar-2017

0.8%

Current

$3,179

$2.30

$38,148

$27.60

See method: 3/16

Market

Apr-16

$3,248

$2.35

$38,976

$28.20

-0.03

See assumption:

Yes

Office <3K

26 Months Sunil Kumar Nelabhotla Office, Suite: 4300-140

842

Aug-2009 to Aug-2017

0.5%

Current

$1,936

$2.30

$23,232

$27.59

See method: 1/15

Market

Sep-16

$1,979

$2.35

$23,748

$28.20

-0.03

See assumption:

Yes

Office <3K

97 Months Decicion

Current

Office, Suite: 4300-175

745

Jun-2014 to May-2016

0.5%

24 Months

$1,714

$2.30

$20,568

$27.61

See method: 6/15

Market

-0.03

See assumption: Office <3K

Yes

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Leasing Office Office, Suite: 4300-177

Changes on

Monthly

PSF

Annually

PSF

Current

$0.00

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Reimbursements

Amount

for this tenant

Full Service:

Market

367

Pays no expense

See assumption:

0.2%

reimbursement.

Office <3K

**VACANT** Office, Suite: 4300-179

925

Mar-2016 to Feb-2019

0.6%

36 Months Property Management Office Office, Suite: 4300-180

Rental Rates

Current

$0.00

See method: New

Mar-16

$2,544

$2.75

$30,528

$33.00

Mar-17

$2,620

$2.83

$31,440

$33.99

Mar-18

$2,699

$2.92

$32,388

$35.01

Current

$0.00

$8.00 $7,400

$6.12

Market

6.00%

See assumption:

$5,661

Office <3K

Full Service:

Market

995

Pays no expense

See assumption:

0.6%

reimbursement.

Office <3K

**VACANT** Office, Suite: 4300-183

462

Mar-2016 to Feb-2019

0.3%

36 Months Payactiv Office, Suite: 4300-185

2,041

Nov-2014 to Oct-2017

1.2%

Current

$0.00

See method: New

Mar-16

$1,271

$2.75

$15,252

$33.01

$8.00 $3,696

$6.12

Market

6.00%

See assumption:

$2,827

Office <3K

Mar-17

$1,309

$2.83

$15,708

$34.00

Mar-18

$1,348

$2.92

$16,176

$35.01

Current

$5,409

$2.65

$64,908

$31.80

See method: 1/14

Market

Nov-16

$5,510

$2.70

$66,120

$32.40

-0.03

See assumption:

Clause (Y/N) Notes -

Yes

Office <3K

36 Months Current

$1,543

$2.50

$18,516

$30.01

See method: 1/16

Market

Office, Suite: 4300-187

Santa Clara Group 617

May-16

$1,574

$2.55

$18,888

$30.61

-0.03

See assumption:

Mar-2010 to Apr-2018

0.4%

May-17

$1,604

$2.60

$19,248

$31.20

Current

$4,625

$2.05

$55,500

$24.60

See method: 2013

Market

Sep-16

$4,738

$2.10

$56,856

$25.20

See assumption:

Yes

Office <3K

98 Months

2,256

Aug-2013 to Aug-2019

1.4%

73 Months Evolko Systems Office, Suite: 4300-190

1,136

May-2015 to May-2017

0.7%

Sep-17

$4,850

$2.15

$58,200

$25.80

Sep-18

$4,963

$2.20

$59,556

$26.40

Current

$2,726

$2.40

$32,712

$28.80

Yes

Office <3K

See method: 5/16

Market

-0.03

See assumption:

Yes

Office <3K

25 Months George Heridis

Current

Office, Suite: 4300-200

406

Oct-2014 to Oct-2016

0.2%

$995

$2.45

$11,940

$29.41

See method: 11/15

Market

-0.03

See assumption:

Yes

Office <3K

25 Months Lyhn Hospitality Management Office, Suite: 4300-201

685

Jan-2015 to Dec-2017

0.4%

36 Months

Current

$1,678

$2.45

$20,136

$29.40

See method: 1/16

Market

Jan-17

$1,712

$2.50

$20,544

$29.99

-0.03

See assumption: Office <3K

Financial Analysis

Lobel Finacial Corporation Office, Suite: 4300-189

Yes

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Aichi Steel Corporation

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$2,065

$2.50

$24,780

$30.00

See method: 5/16

Market

Office, Suite: 4300-203

826

May-16

$2,106

$2.55

$25,272

$30.60

-0.03

See assumption:

May-2015 to Apr-2018

0.5%

May-17

$2,148

$2.60

$25,776

$31.21

Current

$1,778

$2.25

$21,336

$27.01

Clause (Y/N) Notes Yes

Office <3K

36 Months Upaya - The Solution Office, Suite: 4300-218

790

Apr-2012 to Jun-2016

0.5%

See method: 1/15

Market

-0.03

See assumption:

Yes

Office <3K

51 Months MRTK Realty Investment

Current

$958

$2.45

$11,496

$29.40

See method: 5/16

Market

-0.03

See assumption:

Office, Suite: 4300-220

391

May-16

$978

$2.50

$11,736

$30.02

May-2015 to Oct-2017

0.2%

May-17

$997

$2.55

$11,964

$30.60

Yes

Office <3K

30 Months Current

$5,055

$2.35

$60,660

$28.20

See method: 1/11

Market

Office, Suite: 4300-222

Miwan McKoon 2,151

Aug-16

$5,162

$2.40

$61,944

$28.80

-0.03

See assumption:

Jun-2006 to Jul-2018

1.3%

Aug-17

$5,270

$2.45

$63,240

$29.40

Yes

Office <3K

146 Months Current

$2,629

$2.45

$31,548

$29.40

See method: 8/14

Market

Office, Suite: 4300-223

Threebond International 1,073

Aug-16

$2,682

$2.50

$32,184

$29.99

-0.03

See assumption:

Sep-2012 to Jul-2018

0.6%

Aug-17

$2,736

$2.55

$32,832

$30.60

Yes

Office <3K

71 Months

Stevens Creek Executive Park

Seunghoon Han

Office, Suite: 4300-225

930

Sep-2010 to Oct-2017

0.6%

Current

$2,279

$2.45

$27,348

$29.41

See method: 11/15

Market

Nov-16

$2,325

$2.50

$27,900

$30.00

-0.03

See assumption:

Yes

Office <3K

86 Months Avipas

Current

Office, Suite: 4300-227

488

Apr-2014 to Apr-2016

0.3%

$1,122

$2.30

$13,464

$27.59

See method: 4/15

Market

-0.03

See assumption:

Yes

Office <3K

25 Months Swit Electronics (renew)

Current

Office, Suite: 4300-230

859

May-2007 to Nov-2016

0.5%

$2,362

$2.75

$28,344

$33.00

See method: 1/14

Market

-0.03

See assumption:

Yes Lease expires 11/30/2015, 1-year renewal at market rent assumed.

Office <3K

115 Months Current

$1,659

$2.10

$19,908

$25.20

See method: 5/14

Market

Office, Suite: 4300-250

James Wee Accountancy 790

Jun-16

$1,699

$2.15

$20,388

$25.81

-0.03

See assumption:

May-2013 to May-2018

0.5%

Jun-17

$1,738

$2.20

$20,856

$26.40

61 Months

Office <3K

Yes

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Larry Walker Associates Office, Suite: 4300-260

530

Feb-2009 to Mar-2016

0.3%

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$1,007

$1.90

$12,084

$22.80

See method: 2/10

Market

-0.03

See assumption:

Clause (Y/N) Notes No

Office <3K

86 Months Current

$8,422

$2.40

$101,064

$28.80

See method: 2014

Market

Office, Suite: 4300-270

Global Upside 3,509

Aug-16

$8,597

$2.45

$103,164

$29.40

See assumption:

Jun-2014 to Jul-2020

2.1%

Aug-17

$8,773

$2.50

$105,276

$30.00

Aug-18

$8,948

$2.55

$107,376

$30.60

Aug-19

$9,123

$2.60

$109,476

$31.20

Current

$16,313

$2.40

$195,756

$28.80

See method: 2013

Market

Feb-16

$16,653

$2.45

$199,836

$29.40

See assumption:

74 Months

Kiwi & Co (dba Stonecrest) Office, Suite: 4300-275

6,797

Jan-2014 to Jan-2024

4.1%

121 Months

Numbers Only Office, Suite: 4320-100

811

Apr-2014 to Apr-2016

0.5%

Feb-17

$16,993

$2.50

$203,916

$30.00

Feb-18

$17,332

$2.55

$207,984

$30.60

Feb-19

$17,672

$2.60

$212,064

$31.20

Feb-20

$18,012

$2.65

$216,144

$31.80

Feb-21

$18,352

$2.70

$220,224

$32.40

Feb-22

$18,692

$2.75

$224,304

$33.00

Feb-23

$19,032

$2.80

$228,384

$33.60

Current

$1,865

$2.30

$22,380

$27.60

Yes

Office >3K

Yes One 5-yr option to extend @ 100% FMR with 12-18 mos notice.

Office >3K

See method: 4/15

Market

-0.03

See assumption:

Yes

Office <3K

25 Months Pro Power

Current

Office, Suite: 4320-101

886

Jul-2009 to Sep-2016

0.5%

$2,038

$2.30

$24,456

$27.60

See method: 10/14

Market

-0.03

See assumption:

Yes

Office <3K

87 Months

1,810

Apr-2014 to Apr-2019

1.1%

61 Months John Paul Pak

Current

$4,525

$2.50

$54,300

$30.00

See method: 4/15

Market

May-16

$4,615

$2.55

$55,380

$30.60

-0.03

See assumption:

May-17

$4,706

$2.60

$56,472

$31.20

May-18

$4,797

$2.65

$57,564

$31.80

Yes

Office <3K

Current

$1,260

$2.50

$15,120

$30.00

See method: 5/13

Market

Office, Suite: 4320-121

504

May-16

$1,285

$2.55

$15,420

$30.60

-0.03

See assumption:

May-2012 to Apr-2018

0.3%

May-17

$1,310

$2.60

$15,720

$31.19

Yes

Office <3K

72 Months Current

$1,150

$2.50

$13,800

$30.00

See method: 7/16

Market

Office, Suite: 4320-123

Vanessa Calderon 460

Aug-16

$1,173

$2.55

$14,076

$30.60

-0.03

See assumption:

Jul-2015 to Jul-2018

0.3%

Aug-17

$1,196

$2.60

$14,352

$31.20

37 Months

Office <3K

Yes

Financial Analysis

IPEX USA Office, Suite: 4320-120

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Jianye Han Office, Suite: 4320-124

1,264

Aug-2014 to Aug-2016

0.8%

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$3,034

$2.40

$36,408

$28.80

See method: 8/15

Market

-0.03

See assumption:

Clause (Y/N) Notes Yes

Office <3K

25 Months Current

$1,712

$2.50

$20,544

$29.99

See method: 9/16

Market

Office, Suite: 4320-125

Dowa International 685

Sep-16

$1,747

$2.55

$20,964

$30.60

-0.03

See assumption:

Sep-2015 to Aug-2018

0.4%

Sep-17

$1,781

$2.60

$21,372

$31.20

Current

$1,273

$2.75

$15,276

$32.99

Yes

Office <3K

36 Months Kao Wealth Mgmt (renew) Office, Suite: 4320-126

463

Dec-2013 to Nov-2016

0.3%

See method: 12/14

Market

-0.03

See assumption:

Yes Lease expires 11/30/2015, 1-year renewal at market rent assumed.

Office <3K

36 Months Nicholas Honda Office, Suite: 4320-127

358

Dec-2014 to Nov-2017

0.2%

Current

$877

$2.45

$10,524

$29.40

See method: 12/15

Market

Dec-16

$895

$2.50

$10,740

$30.00

-0.03

See assumption:

Yes

Office <3K

36 Months Prof. Resources For Nurses

Current

Office, Suite: 4320-128

666

Jan-2004 to Jan-2016

0.4%

$1,365

$2.05

$16,380

$24.59

See method: 2004

Market

See assumption:

No RSF adjusted to 696 SF at expiration to reflect current load factor.

Office <3K

145 Months

Stevens Creek Executive Park

Mark J Lee

Office, Suite: 4320-129

655

Aug-2007 to Jul-2020

0.4%

156 Months

Transpacific Financial (renew) Office, Suite: 4320-130

856

Sep-2013 to Dec-2016

0.5%

Current

$1,638

$2.50

$19,656

$30.01

See method: 1/16

Market

Aug-16

$1,670

$2.55

$20,040

$30.60

-0.03

See assumption:

Aug-17

$1,703

$2.60

$20,436

$31.20

Aug-18

$1,735

$2.65

$20,820

$31.79

Aug-19

$1,768

$2.70

$21,216

$32.39

Current

$2,354

$2.75

$28,248

$33.00

Yes

Office <3K

See method: 10/14

Market

-0.03

See assumption:

Yes Lease expires 12/31/2015, 1-year renewal at market rent assumed.

Office <3K

40 Months Map Communications

Current

Office, Suite: 4320-161

336

Apr-2007 to Sep-2016

0.2%

$823

$2.45

$9,876

$29.39

See method: 4/08

Market

-0.03

See assumption:

Yes

Office <3K

114 Months CONFERENCE/LOUNGE Office, Suite: 4320-163

Current 731 0.4%

$0.00

Full Service:

Market

Pays no expense

See assumption:

reimbursement.

Office <3K

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Shilpa Tangi & Usha Johnson

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$3,340

$2.50

$40,080

$30.00

See method: 7/16

Market

Office, Suite: 4320-165

1,336

Jul-16

$3,407

$2.55

$40,884

$30.60

-0.03

See assumption:

Jul-2015 to Jun-2018

0.8%

Jul-17

$3,474

$2.60

$41,688

$31.20

Current

$1,605

$2.30

$19,260

$27.59

See method: 7/15

Market

Jul-16

$1,640

$2.35

$19,680

$28.19

-0.03

See assumption:

Clause (Y/N) Notes Yes

Office <3K

36 Months RGIS Office, Suite: 4320-168

698

Jul-2014 to Jun-2017

0.4%

Yes

Office <3K

36 Months Jack Shaw

Current

$1,103

$1.85

$13,236

$22.21

See method: 2/14

Market

Office, Suite: 4320-171

596

Apr-16

$1,132

$1.90

$13,584

$22.79

-0.03

See assumption:

Feb-2013 to Mar-2018

0.4%

Apr-17

$1,162

$1.95

$13,944

$23.40

Current

$2,570

$2.40

$30,840

$28.80

See method: 2/16

Market

Feb-16

$2,624

$2.45

$31,488

$29.40

-0.03

See assumption:

Office <3K

62 Months Shashank Shekhar Office, Suite: 4320-172

1,071

Feb-2015 to Jan-2017

0.6%

Yes

Office <3K

24 Months Current

$930

$2.50

$11,160

$30.00

See method: 4/16

Market

Office, Suite: 4320-173

ATA Travel Consortium 372

May-16

$949

$2.55

$11,388

$30.61

-0.03

See assumption:

Apr-2015 to Apr-2018

0.2%

May-17

$967

$2.60

$11,604

$31.19

Yes

Office <3K

37 Months Current

$1,640

$2.50

$19,680

$30.00

See method: 7/16

Market

Office, Suite: 4320-174

Pivot Systems 656

Aug-16

$1,673

$2.55

$20,076

$30.60

-0.03

See assumption:

Jul-2015 to Jul-2018

0.4%

Aug-17

$1,705

$2.60

$20,460

$31.19

Yes

Office <3K

37 Months Current

$1,800

$2.45

$21,600

$29.39

See method: 1/15

Market

Office, Suite: 4320-175

735

Nov-16

$1,834

$2.50

$22,008

$29.94

-0.03

See assumption:

Nov-2009 to Oct-2018

0.4%

Nov-17

$1,874

$2.55

$22,488

$30.60

Current

$1,762

$2.30

$21,144

$27.60

See method: 1/15

Market

Feb-16

$1,800

$2.35

$21,600

$28.20

-0.03

See assumption:

Yes

Office <3K

108 Months Bay Area Breast Cancer Network Office, Suite: 4320-185

766

Jan-2008 to Jan-2017

0.5%

Yes

Office <3K

109 Months Easy Thru Learning

Current

$2,812

$2.38

$33,744

$28.52

See method: 7/16

Market

-0.03

See assumption:

Office, Suite: 4320-190

1,183

Oct-16

$2,958

$2.50

$35,496

$30.01

Jul-2015 to Sep-2020

0.7%

Oct-17

$3,018

$2.55

$36,216

$30.61

Oct-18

$3,076

$2.60

$36,912

$31.20

Oct-19

$3,135

$2.65

$37,620

$31.80

63 Months

Office <3K

Yes

Financial Analysis

Xinghe International

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Ehealth-Plans

Rental Rates Changes on

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Monthly

PSF

Annually

PSF

Reimbursements

Current

$1,075

$2.50

$12,900

$30.00

See method: 8/14

Market

Office, Suite: 4320-191

430

Aug-16

$1,096

$2.55

$13,152

$30.59

-0.03

See assumption:

Aug-2013 to Jul-2018

0.3%

Aug-17

$1,118

$2.60

$13,416

$31.20

Clause (Y/N) Notes Yes

Office <3K

60 Months Ellis Chi Office, Suite: 4320-195

939

Jun-2014 to Nov-2017

0.6%

Current

$2,113

$2.25

$25,356

$27.00

See method: 6/15

Market

Jun-16

$2,160

$2.30

$25,920

$27.60

-0.03

See assumption:

Yes

Office <3K

42 Months Current

$0.00

See method: New

Office, Suite: 4320-202

**VACANT** 415

May-16

$1,141

$2.75

$13,692

$32.99

May-2016 to Apr-2019

0.3%

May-17

$1,175

$2.83

$14,100

$33.98

May-18

$1,211

$2.92

$14,532

$35.02

36 Months Lelo

$8.00 $3,320

$6.12

Market

6.00%

See assumption:

$2,540

Office <3K

Current

$1,658

$2.50

$19,896

$30.01

See method: 3/10

Market

Office, Suite: 4320-205

663

Sep-16

$1,690

$2.55

$20,280

$30.59

-0.03

See assumption:

Mar-2008 to Aug-2018

0.4%

Sep-17

$1,724

$2.60

$20,688

$31.20

Current

$1,115

$2.20

$13,380

$26.39

Office <3K

126 Months Kyle Chuang Office, Suite: 4320-206

507

May-2010 to Jun-2016

0.3%

See method: 1/14

Market

-0.03

See assumption:

Yes

Office <3K

74 Months

Stevens Creek Executive Park

Lelo (renew)

Current

Office, Suite: 4320-207

709

Jul-2011 to Dec-2016

0.4%

$1,950

$2.75

$23,400

$33.00

See method: 7/12

Market

-0.03

See assumption:

Yes Lease expires 12/31/2015, 1-year renewal at market rent assumed.

Office <3K

66 Months Your Asian Connection (renew)

Current

Office, Suite: 4320-209

618

Dec-2006 to Nov-2016

0.4%

$1,700

$2.75

$20,400

$33.01

See method: 12/13

Market

-0.03

See assumption: Office <3K

120 Months Michelle Yiu

Current

Office, Suite: 4320-210

769

Mar-2013 to Mar-2016

0.5%

$1,461

$1.90

$17,532

$22.80

See method: 3/14

Market

-0.03

See assumption:

No Lease expires 11/30/2015, 1-year renewal at market rent assumed. RSF adjusted to 630 SF at expiration to reflect current load factor. Yes

Office <3K

37 Months Netkiller

Current

$1,588

$2.50

$19,056

$30.01

See method: 7/16

Market

-0.03

See assumption:

Office, Suite: 4320-211

635

Sep-16

$1,619

$2.55

$19,428

$30.60

Aug-2015 to Jul-2018

0.4%

Sep-17

$1,651

$2.60

$19,812

$31.20

36 Months

Office <3K

Yes

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Quantum Semiconductor (renew) Office, Suite: 4320-212

403

Jul-2012 to Dec-2016

0.2%

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$1,108

$2.75

$13,296

$32.99

See method: 7/13

Market

-0.03

See assumption:

Clause (Y/N) Notes Yes Lease expires 12/31/2015, 1-year renewal at market rent assumed.

Office <3K

54 Months San Jose Counseling Office, Suite: 4320-220

1,369

Jul-2008 to Dec-2017

0.8%

Current

$3,091

$2.26

$37,092

$27.09

See method: 2008

Market

Jan-17

$3,160

$2.31

$37,920

$27.70

See assumption:

Office <3K

114 Months Seoung Ryong Jee

Current

Office, Suite: 4320-225

618

Jun-2014 to May-2016

0.4%

$1,421

$2.30

$17,052

$27.59

See method: 6/15

Market

-0.03

See assumption:

Yes

Office <3K

24 Months E-Litecom International

Current

Office, Suite: 4320-227

477

Apr-2013 to Apr-2016

0.3%

$930

$1.95

$11,160

$23.40

See method: 4/14

Market

-0.03

See assumption:

Yes

Office <3K

37 Months Astir Services (Sysnet Tech)

Current

Office, Suite: 4320-229

1,157

Feb-2014 to Jan-2016

0.7%

$2,661

$2.30

$31,932

$27.60

See method: 2/15

Market

-0.03

See assumption:

Yes

Office <3K

24 Months Acionyx

Current

Office, Suite: 4320-230

1,196

Feb-2013 to Apr-2016

0.7%

$2,033

$1.70

$24,396

$20.40

See method: 2/14

Market

-0.03

See assumption:

Yes

Office <3K

39 Months Current

$1,688

$2.45

$20,256

$29.40

See method: 5/13

Market

Office, Suite: 4320-268

689

Jun-16

$1,722

$2.50

$20,664

$29.99

-0.03

See assumption:

May-2012 to May-2018

0.4%

Jun-17

$1,757

$2.55

$21,084

$30.60

Yes

Office <3K

73 Months Current

$998

$2.50

$11,976

$30.02

See method: 9/16

Market

Office, Suite: 4320-271

Fine Line Circuits 399

Sep-16

$1,017

$2.55

$12,204

$30.59

-0.03

See assumption:

Sep-2015 to Aug-2018

0.2%

Sep-17

$1,037

$2.60

$12,444

$31.19

Current

$3,822

$1.85

$45,864

$22.20

Yes

Office <3K

36 Months Evertz USA Office, Suite: 4320-275

2,066

Jan-2013 to Mar-2016

1.2%

39 Months

See method: 1/14

Market

-0.03

See assumption: Office <3K

Financial Analysis

Jin Wan Park

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Metro Capital Mortgage Office, Suite: 4320-279

544

Apr-2014 to Mar-2017

0.3%

Rental Rates Changes on

Monthly

PSF

Current

$1,251

Apr-16

$1,278

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Annually

PSF

Reimbursements

$2.30

$15,012

$27.60

See method: 4/15

Market

$2.35

$15,336

$28.19

-0.03

See assumption:

Clause (Y/N) Notes Yes

Office <3K

36 Months CONFERENCE ROOM Office, Suite: 4320-280

Current

Full Service:

Market

762

Pays no expense

See assumption:

0.5%

reimbursement.

Office <3K

Elite Wealth Group

$0.00

Current

$1,740

$2.50

$20,880

$30.00

See method: 10/14

Market

Office, Suite: 4320-282

696

Oct-16

$1,775

$2.55

$21,300

$30.60

-0.03

See assumption:

Oct-2013 to Sep-2018

0.4%

Oct-17

$1,810

$2.60

$21,720

$31.21

Current

$1,267

$2.45

$15,204

$29.41

Yes

Office <3K

60 Months Cheryl Zankin-Seres Office, Suite: 4320-283

517

Dec-2004 to Dec-2016

0.3%

See method: 1/14

Market

-0.03

See assumption:

Yes

Office <3K

145 Months Sagacent Technologies Office, Suite: 4320-284/290

2,204

Jul-2007 to Aug-2017

1.3%

Current

$4,628

$2.10

$55,536

$25.20

See method: 1/11

Market

Sep-16

$4,739

$2.15

$56,868

$25.80

-0.03

See assumption:

Yes

Office <3K

122 Months

Stevens Creek Executive Park

Arthur Romero

Current

$1,175

$2.50

$14,100

$30.00

See method: 1/10

Market

Office, Suite: 4320-285

470

Sep-16

$1,198

$2.55

$14,376

$30.59

-0.03

See assumption:

Jan-2009 to Aug-2018

0.3%

Sep-17

$1,222

$2.60

$14,664

$31.20

Current

$1,127

$2.30

$13,524

$27.60

Yes

Office <3K

116 Months Young D. Kim Office, Suite: 4320-287

490

Feb-2014 to Feb-2016

0.3%

See method: 2/15

Market

-0.03

See assumption:

Yes

Office <3K

25 Months True Arrow Capital Mgmt Office, Suite: 4320-295

1,018

Mar-2012 to Apr-2017

0.6%

Current

$2,240

$2.20

$26,880

$26.40

See method: 3/13

Market

May-16

$2,290

$2.25

$27,480

$26.99

-0.03

See assumption:

Yes

Office <3K

62 Months Current

$6,154

$2.40

$73,848

$28.80

See method: 9/07

Market

Office, Suite: 4340-101

LiveWorld 2,564

Feb-16

$6,282

$2.45

$75,384

$29.40

-0.03

See assumption:

Nov-2006 to Jan-2018

1.6%

Feb-17

$6,410

$2.50

$76,920

$30.00

135 Months

Office <3K

Yes RSF adjusted to 2,702 SF at expiration to reflect current load factor.

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Midtech Software Solution Office, Suite: 4340-106

2,793

May-2010 to Jul-2016

1.7%

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$5,586

$2.00

$67,032

$24.00

See method: 5/11

Market

-0.03

See assumption:

Clause (Y/N) Notes Yes

Office <3K

75 Months Haines & Berwald

Current

Office, Suite: 4340-107

834

Jun-2013 to May-2016

0.5%

$1,835

$2.20

$22,020

$26.40

See method: 6/14

Market

-0.03

See assumption:

Yes

Office <3K

36 Months Current

$2,813

$2.40

$33,756

$28.80

See method: 1/13

Market

Office, Suite: 4340-108

Paul Tom 1,172

Mar-16

$2,871

$2.45

$34,452

$29.40

-0.03

See assumption:

Feb-2010 to Feb-2018

0.7%

Mar-17

$2,930

$2.50

$35,160

$30.00

Current

$0.00

See method: New

May-16

$3,196

$2.75

$38,352

$33.01

Yes

Office <3K

97 Months **VACANT** Office, Suite: 4340-112

1,162

May-2016 to Apr-2019

0.7%

36 Months Stephanie Young Consultants Office, Suite: 4340-114

812

Jul-2008 to Jul-2016

0.5%

May-17

$3,291

$2.83

$39,492

$33.99

May-18

$3,390

$2.92

$40,680

$35.01

Current

$1,868

$2.30

$22,416

$27.61

$8.00 $9,296

$6.12

Market

6.00%

See assumption:

$7,111

Office <3K

See method: 8/12

Market

-0.03

See assumption:

Yes

Office <3K

97 Months Bayfinity Office, Suite: 4340-160

1,238

May-2011 to May-2017

0.7%

Current

$2,724

$2.20

$32,688

$26.40

See method: 1/15

Market

Jun-16

$2,786

$2.25

$33,432

$27.00

-0.03

See assumption:

Yes

Office <3K

73 Months

687

Sep-2010 to Mar-2019

0.4%

103 Months Kanrad Technologies Office, Suite: 4340-162

742

Jun-2008 to Jul-2016

0.4%

Current

$1,511

$2.20

$18,132

$26.39

See method: 9/11

Market

Apr-16

$1,546

$2.25

$18,552

$27.00

-0.03

See assumption:

Apr-17

$1,580

$2.30

$18,960

$27.60

Apr-18

$1,615

$2.35

$19,380

$28.21

Current

$1,781

$2.40

$21,372

$28.80

Yes

Office <3K

See method: 6/09

Market

-0.03

See assumption:

Yes

Office <3K

98 Months Current

$1,162

$2.40

$13,944

$28.81

See method: 1/14

Market

Office, Suite: 4340-163

Yubo Cao 484

Apr-16

$1,186

$2.45

$14,232

$29.40

-0.03

See assumption:

Apr-2009 to Mar-2018

0.3%

Apr-17

$1,210

$2.50

$14,520

$30.00

108 Months

Office <3K

Yes

Financial Analysis

Joski International Enterprise Office, Suite: 4340-161

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Jean Cha Office, Suite: 4340-164

683

Feb-2013 to Feb-2016

0.4%

Rental Rates

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Amount

for this tenant

Changes on

Monthly

PSF

Annually

PSF

Reimbursements

Current

$1,298

$1.90

$15,576

$22.81

See method: 2/14

Market

-0.03

See assumption:

Clause (Y/N) Notes No

Office <3K

37 Months Campus Insurance Services

Current

$7,449

$2.21

$89,388

$26.56

See method: 2012

Market

See assumption:

Office, Suite: 4340-165

3,365

Jan-17

$7,626

$2.27

$91,512

$27.20

Jan-2012 to Dec-2021

2.0%

Jan-18

$7,803

$2.32

$93,636

$27.83

Jan-19

$7,981

$2.37

$95,772

$28.46

120 Months

JK Accountancy Corp Office, Suite: 4340-166

371

Jul-2014 to Jun-2016

0.2%

Jan-20

$8,158

$2.42

$97,896

$29.09

Jan-21

$8,335

$2.48

$100,020

$29.72

Current

$890

$2.40

$10,680

$28.79

No RSF adjusted to 3,547 SF at expiration to reflect current load factor.

Office >3K

See method: 7/15

Market

-0.03

See assumption:

Yes

Office <3K

24 Months GS Property Management Office, Suite: 4340-167

1,000

Aug-2014 to Jul-2017

0.6%

Current

$2,300

$2.30

$27,600

$27.60

See method: 8/15

Market

Jan-17

$2,350

$2.35

$28,200

$28.20

-0.03

See assumption:

Yes

Office <3K

36 Months Access Five Communications

Current

Office, Suite: 4340-169

682

Sep-2014 to Aug-2016

0.4%

$1,671

$2.45

$20,052

$29.40

See method: 9/15

Market

-0.03

See assumption:

Yes

Office <3K

Stevens Creek Executive Park

24 Months

Current

$3,042

$1.95

$36,504

$23.40

See method: 4/14

Market

Office, Suite: 4340-170

Daniel Chun 1,560

May-16

$3,120

$2.00

$37,440

$24.00

-0.03

See assumption:

Apr-2013 to Apr-2018

0.9%

May-17

$3,198

$2.05

$38,376

$24.60

Current

$851

$2.15

$10,212

$25.79

Yes

Office <3K

61 Months 4x Engineering Office, Suite: 4340-172

396

Jul-2013 to Jun-2016

0.2%

See method: 7/14

Market

-0.03

See assumption:

Yes

Office <3K

36 Months Current

$3,686

$2.25

$44,232

$27.00

See method: 3/13

Market

Office, Suite: 4340-176

Jimmy Wu 1,638

Jun-16

$3,800

$2.32

$45,600

$27.84

-0.03

See assumption:

Mar-2012 to May-2018

1.0%

Jun-17

$3,915

$2.39

$46,980

$28.68

Current

$1,582

$2.30

$18,984

$27.59

See method: 1/15

Market

Mar-16

$1,617

$2.35

$19,404

$28.20

-0.03

See assumption:

Yes

Office <3K

75 Months Integrated Operations Office, Suite: 4340-181

688

Feb-2008 to Feb-2017

0.4%

109 Months

Office <3K

Yes

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

J.F. Duncan Industries

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

PSF

Reimbursements

Amount

for this tenant

Rental Rates Changes on

Monthly

PSF

Annually

Current

$1,540

$2.40

$18,480

$28.79

See method: 2/16

Market

Office, Suite: 4340-183

642

Feb-16

$1,572

$2.45

$18,864

$29.38

-0.03

See assumption:

Feb-2015 to Jan-2018

0.4%

Feb-17

$1,605

$2.50

$19,260

$30.00

Current

$1,638

$2.50

$19,656

$30.01

See method: 9/16

Market

-0.03

See assumption:

Clause (Y/N) Notes Yes

Office <3K

36 Months Desheng Liu Office, Suite: 4340-185

655

Sep-16

$1,670

$2.55

$20,040

$30.60

Sep-2015 to Aug-2018

0.4%

Sep-17

$1,703

$2.60

$20,436

$31.20

Current

$5,132

$2.25

$61,584

$27.00

Yes

Office <3K

36 Months RevSoftware Office, Suite: 4340-190

2,281

Dec-2013 to Jun-2016

1.4%

See method: 7/14

Market

-0.03

See assumption:

Yes

Office <3K

31 Months **VACANT** Office, Suite: 4340-191

739

Jul-2016 to Jun-2019

0.4%

36 Months CONFERENCE ROOM Office, Suite: 4340-195

Current

$0.00

See method: New

Jul-16

$2,032

$2.75

$24,384

$33.00

Jul-17

$2,093

$2.83

$25,116

$33.99

Jul-18

$2,156

$2.92

$25,872

$35.01

Current

$0.00

781 0.5%

Sangick Engineering

$8.00 $5,912

$6.12

Market

6.00%

See assumption:

$4,523

Office <3K

Full Service:

Market

Pays no expense

See assumption:

reimbursement.

Office <3K

Current

$996

$2.40

$11,952

$28.80

See method: 8/14

Market

Office, Suite: 4340-199

415

Feb-16

$1,017

$2.45

$12,204

$29.41

-0.03

See assumption:

Aug-2013 to Jan-2018

0.3%

Feb-17

$1,037

$2.50

$12,444

$29.99

Current

$4,227

$2.05

$50,724

$24.60

See method: 2015

Market

Jul-16

$4,330

$2.10

$51,960

$25.20

BY (est)

See assumption:

- Current tenant 12/31/15 to vacate.

expiring

Office <3K

54 Months

2,062

Jul-2012 to Jun-2019

1.2%

84 Months MKTG

Jul-17

$4,433

$2.15

$53,196

$25.80

Jul-18

$4,536

$2.20

$54,432

$26.40

No RSF adjusted to 2,144 SF at expiration to reflect current load factor.

Office <3K

Current

$3,659

$2.35

$43,908

$28.20

See method: 3/16

Market

Office, Suite: 4340-220

1,557

Mar-16

$3,737

$2.40

$44,844

$28.80

-0.03

See assumption:

Mar-2015 to Aug-2017

0.9%

Mar-17

$3,815

$2.45

$45,780

$29.40

Current

$5,254

$2.40

$63,048

$28.80

See method: 11/15

Market

-0.03

See assumption:

Yes RSF adjusted to 1,619 SF at expiration to reflect current load factor.

Office <3K

30 Months IT Management Corp Office, Suite: 4340-225

2,189

Jun-16

$5,363

$2.45

$64,356

$29.40

Jun-2015 to May-2019

1.3%

Jun-17

$5,473

$2.50

$65,676

$30.00

Jun-18

$5,582

$2.55

$66,984

$30.60

48 Months

Office <3K

Yes RSF adjusted to 2,275 SF at expiration to reflect current load factor.

Financial Analysis

Homesafe Office, Suite: 4340-200

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

**VACANT** Office, Suite: 4340-231

4,380

Jul-2016 to Jun-2021

2.6%

60 Months

**VACANT** Office, Suite: 4340-240

2,219

Sep-2016 to Aug-2021

1.3%

60 Months

Yvonne Mei

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

PSF

Reimbursements

Amount

for this tenant

$8.00

Rental Rates Changes on

Monthly

PSF

Annually

Current

$0.00

See method: New

Jul-16

$12,045

$2.75

$144,540

$33.00

Jul-17

$12,406

$2.83

$148,872

$33.99

Jul-18

$12,779

$2.92

$153,348

$35.01

Jul-19

$13,162

$3.01

$157,944

$36.06

Jul-20

$13,557

$3.10

$162,684

$37.14

Current

$0.00

See method: New

Sep-16

$6,102

$2.75

$73,224

$33.00

Sep-17

$6,285

$2.83

$75,420

$33.99

Sep-18

$6,474

$2.92

$77,688

$35.01

Sep-19

$6,668

$3.00

$80,016

$36.06

Sep-20

$6,868

$3.10

$82,416

$37.14

$35,040

$8.00 $17,752

$10.51

Market

6.00%

See assumption:

$46,043

Office >3K

$10.51

Market

6.00%

See assumption:

$23,326

Office <3K

Current

$2,298

$2.50

$27,576

$30.01

See method: 10/16

Market

Office, Suite: 4340-244

919

Nov-16

$2,343

$2.55

$28,116

$30.59

-0.03

See assumption:

Oct-2015 to Oct-2018

0.6%

Nov-17

$2,389

$2.60

$28,668

$31.19

Current

$3,463

$2.50

$41,556

$30.00

See method: 1/15

Market

Aug-16

$3,532

$2.55

$42,384

$30.60

-0.03

See assumption:

Clause (Y/N) Notes -

Yes

Office <3K

37 Months Kaverisoft Office, Suite: 4340-245

1,385

Aug-2015 to Jul-2017

0.8%

Yes RSF adjusted to 1,440 SF at expiration to reflect current load factor.

Office <3K

24 Months

Stevens Creek Executive Park

**VACANT**

Office, Suite: 4340-250

4,996

Sep-2016 to Aug-2021

3.0%

60 Months

**VACANT**

Current

$0.00

See method: New

Sep-16

$13,739

$2.75

$164,868

$33.00

Sep-17

$14,151

$2.83

$169,812

$33.99

Sep-18

$14,576

$2.92

$174,912

$35.01

Sep-19

$15,013

$3.01

$180,156

$36.06

Sep-20

$15,463

$3.10

$185,556

$37.14

Current

$0.00

See method: New BY

Office, Suite: 4340-270

1,102

Nov-16

$3,031

$2.75

$36,372

$33.01

Nov-2016 to Oct-2019

0.7%

Nov-17

$3,121

$2.83

$37,452

$33.99

Nov-18

$3,215

$2.92

$38,580

$35.01

36 Months TIS International

$8.00

$10.51

Market

6.00%

See assumption:

$39,968

$52,518

Office >3K

$8.00

$6.12

Market

6.00%

See assumption:

$8,816

$6,744

Office <3K

Current

$6,575

$2.50

$78,900

$30.00

See method: 9/13

Market

Office, Suite: 4340-275

2,630

Sep-16

$6,706

$2.55

$80,472

$30.60

-0.03

See assumption:

Sep-2008 to Aug-2018

1.6%

Sep-17

$6,838

$2.60

$82,056

$31.20

120 Months

Office <3K

Yes RSF adjusted to 2,733 SF at expiration to reflect current load factor.

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

Jatoft Foti Insurance Agency

Rental Rates Changes on

Monthly

PSF

Annually

PSF

Description of

Imprvmnts

Commssns

Assumption about

Landlord

Operating Expense

Rate

subsequent terms

Termination

Reimbursements

Amount

for this tenant

Current

$4,815

$2.25

$57,780

$27.00

See method: 3/09

Market

Office, Suite: 4340-280

2,140

Jan-17

$4,922

$2.30

$59,064

$27.60

-0.03

See assumption:

Jun-2013 to Dec-2018

1.3%

Jan-18

$5,029

$2.35

$60,348

$28.20

Current

$2,107

$2.30

$25,284

$27.60

Clause (Y/N) Notes Yes RSF adjusted to 2,225 SF at expiration to reflect current load factor.

Office <3K

67 Months RHUB Communications Office, Suite: 4340-282

916

Oct-2009 to Jul-2016

0.6%

See method: 1/12

Market

-0.03

See assumption:

Yes RSF adjusted to 952 SF at expiration to reflect current load factor.

Office <3K

82 Months SFO Technologies (renew)

Current

Office, Suite: 4340-284

766

Nov-2011 to Jul-2016

0.5%

$2,107

$2.75

$25,284

$33.01

See method: 11/12

Market

-0.03

See assumption: Office <3K

57 Months Current

$2,520

$2.50

$30,240

$30.00

See method: 1/16

Market

Office, Suite: 4340-286

Aumkaara 1,008

Sep-16

$2,570

$2.55

$30,840

$30.60

-0.03

See assumption:

Jun-2011 to Aug-2018

0.6%

Sep-17

$2,621

$2.60

$31,452

$31.20

Current

$910

$2.40

$10,920

$28.81

Yes Lease expired 7/31/2015, 1-year renewal at market rent assumed. RSF adjusted to 796 SF at expiration to reflect current load factor. Yes RSF adjusted to 1,048 SF at expiration to reflect current load factor.

Office <3K

87 Months Quiong Wang Office, Suite: 4340-287

379

Aug-2014 to Aug-2016

0.2%

See method: 8/15

Market

-0.03

See assumption:

Yes RSF adjusted to 394 SF at expiration to reflect current load factor.

Office <3K

25 Months Slingshot Connections

Current

Office, Suite: 4340-288

1,203

Apr-2013 to Mar-2016

0.7%

$2,346

$1.95

$28,152

$23.40

See method: 3/13

Market

-0.03

See assumption:

No RSF adjusted to 1,250 SF at expiration to reflect current load factor.

Office <3K

36 Months

Retail, Suite: 4360-101

14,335

Sep-2014 to Aug-2024

8.7%

Current

$46,589

$3.25

$559,068

$39.00

Net: Pays a full

Market

Sep-19

$52,412

$3.66

$628,944

$43.87

pro-rata share of

See assumption:

all reimbursable

Retail

120 Months

expenses.

**VACANT** Retail, Suite: 4360-102

1,360

Jul-2016 to Jun-2021

0.8%

60 Months

No Two 5 yr options to renew @ 100% FMR with 12-15 mos notice. Mgmt fee not to exceed 3% of EGR.

Current

$0.00

Net: Pays a full

Jul-16

$4,760

$3.50

$57,120

$42.00

pro-rata share of

Jul-17

$4,903

$3.61

$58,836

$43.26

all reimbursable

Jul-18

$5,050

$3.71

$60,600

$44.56

expenses.

Jul-19

$5,201

$3.82

$62,412

$45.89

Jul-20

$5,357

$3.94

$64,284

$47.27

$10.00 $13,600

$11.98

Market

5.37%

See assumption:

$16,286

Retail

- Current tenant to vacate.

Financial Analysis

Satellite Healthcare

RENT ROLL AS OF JANUARY 1, 2016 Tenant Name Type & Suite Number

SqFt

Lease Dates & Term

Proj Share

**VACANT** Retail, Suite: 4360-103

1,940

Oct-2016 to Sep-2021

1.2%

60 Months

Round Table Pizza Retail, Suite: 4400-104

6,855

Mar-2007 to Feb-2017

4.1%

Rental Rates Changes on

Annually

PSF

Commssns

Assumption about

Landlord

Rate

subsequent terms

Termination

Reimbursements

Amount

for this tenant

$10.00

PSF

Current

$0.00

Net: Pays a full

Oct-16

$6,790

$3.50

$81,480

$42.00

pro-rata share of

Oct-17

$6,994

$3.61

$83,928

$43.26

all reimbursable

Oct-18

$7,203

$3.71

$86,436

$44.55

expenses.

$19,400

$11.97

Market

5.37%

See assumption:

$23,231

Retail

Oct-19

$7,420

$3.82

$89,040

$45.90

Oct-20

$7,642

$11.90

$91,704

$142.84

Current

$22,100

$3.22

$265,200

$38.69

Net: Pays a full

Option

Mar-16

$24,149

$3.52

$289,788

$42.27

pro-rata share of

See assumption:

all reimbursable

Retail

expenses.

Total Renal Care (DaVita) Retail, Suite: 4400-105

3,398

Dec-2007 to Nov-2019

2.1%

144 Months

Current

$11,830

$3.48

$141,960

$41.78

Net: Pays a full

Market

Dec-16

$12,184

$3.59

$146,208

$43.03

pro-rata share of

See assumption:

Dec-17

$12,550

$3.69

$150,600

$44.32

all reimbursable

Retail

Dec-18

$12,927

$3.80

$155,124

$45.65

expenses.

$351,523

$2.13

$4,218,276

$25.50

CURRENT TOTALS / AVERAGES

Stevens Creek Executive Park

Imprvmnts

Monthly

120 Months

Description of Operating Expense

TOTAL LEASED SQUARE FOOTAGE

145,716

TOTAL AVAILABLE SQUARE FOOTAGE

19,700

88% 12%

TOTAL SQUARE FOOTAGE

165,416

100%

Clause (Y/N) Notes -

No Two 5-yr options to renew with 9-12 mos notice. Option 1 rent fixed @$24,149/mo in Lse Yrs 1-2 and $26,388/mo in Lse Yrs 3-5. Option 2 rent @ 100% FMR. Analysis assumes Option 1 is exercised. Mgmt fee not to exceed 3% of EGR. No Two-5 year options to renew with 9-12 months notice @ 100% FMR. Mgmt fee not to exceed 4% of EGR.

INVESTMENT CONTACTS Bob Gilley Executive Managing Director +1 415 677 0468 bob.gilley@cushwake.com Lic. # 01084869

Steve Hermann Executive Managing Director +1 415 677 0465 steve.hermann@cushwake.com Lic. # 01352679

Eric Fox Executive Managing Director +1 408 615 3469 eric.h.fox@cushwake.com Lic. # 01209035

RETAIL INVESTMENT SPECIALISTS Dan Wald Executive Managing Director +1 415 677 0461 dan.wald@cushwake.com Lic. # 01173211

LOCAL MARKET ADVISORY Bob Simpson Senior Vice President +1 408 615 3421 bob.simpson@cushwake.com Lic. # 01240540

Eric Kathrein Associate Vice President +1 415 677 0449 eric.kathrein@cushwake.com Lic. # 01896107

DEBT & EQUITY FINANCE CONTACT Kurt Scheidt Managing Director +1 415 677 0479 kurt.scheidt@cushwake.com Lic. # 01014206

SAN JOSE, CALIFORNIA

Stevens Creek Executive Park OFFICE/RETAIL PROJECT ON 9.23 ACRES WITH POTENTIAL TO BUILD A LARGE SCALE MIXED USED DEVELOPMENT