Current Market Trends in Commercial Real Estate on the Westside Tanasbourne & Sunset Corridor Sub-Market

1. Current Market Trends in CommercialReal Estate on the WestsideTanasbourne & Sunset Corridor Sub-Market Presented by: Tim Parker Vice President Melvin Mark Brokerage Company

2. 1999 – 2001 • Prior to the “Tech Wreck” • Speculative developers add up to 1,000,000 sf of combined flex office space in one year • Historical absorbtion rates had been in the 300,000 sf range annually • Major tenant types include call centers, telco switches and other back office financial centers BRIEF HISTORY OF THE SUB-MARKET

3. 2002 - 2006 • Vacancy grow to record highs over 35% • Vacancy reasons include: • Telco switch industry consolidates downward • High tech moves light manufacturing off-shore • New speculative space isn’t leased • Vacancy grows in existing flex office space • Most speculative development comes to a stand still • Tenant representation brokers use these factors for leverage to obtain better close-in lease rates • Core developers sell to speculative value-added investors waiting for recovery BRIEF HISTORY OF THE SUB-MARKET

4. 2007 • Absorbtion begins to take place as other core submarkets’ vacancy rates decline BRIEF HISTORY OF THE SUB-MARKET

5. Flex Office Space Total RBA Vacancy Absorbtion Rents Sunset/Hillsboro 6.3 million 20.80% 106,207 sf $10.39 Total Market Area 19.0 million 12.10% (2007) 485,353 sf $10.57 14.90% (2006) 24.10% (2003) SNAP SHOT OF THE CURRENT MARKET

6. Industrial Warehouse Total RBA Vacancy Absorbtion Rents Sunset/Hillsboro 10.8 million 3.40% 726,018 sf $5.40 Total Market Area 124.0 million 6.10% (2007) 2,602,681 sf $5.41 8.90% (2006) 14.70% (2003) SNAP SHOT OF THE CURRENT MARKET

7. Office Total RBA Vacancy Absorbtion Rents Sunset/Hillsboro Class A 4.9 million 4.90% 30,941 sf $19.38 Class B 3.4 million 24.90% -99,598 sf $17.69 Total Market Area 73.0 million 10.10% (2007) 1,017,684 sf $19.39 10.70% (2006) 14.30% (2003) Major Leases: Farmers Insurance Call Center lease former GM On-Star Center 104,000 sf Yahoo! Renews and expands current location 95,000 sf SNAP SHOT OF THE CURRENT MARKET

8. Average Sale Cost Per Square Foot: Low $57/sf High $134/sf Office Cost/SF Total SF Sale Price SolarWorld $ 95.00/sf 419,158 sf $40 million E-Tech $ 57.98/sf 176,800 sf $10.25 million AmberGlen Equastone $126.90/sf 535,238 sf $67.92 million AmberGlen $134.60/sf 210,625 sf $28.35 million Ronler Corp. Center $120.28/sf 157,138 sf $18.9 million BUILDING SALES

9. Industrial land price range is $6.00/sf to $8.00/sf • Average industrial land price is $6.50/sf • Intel land banks the balance of the major land in area • There are less than 5 sites in the 40 to 50 acre range left • Genetech’s 75 acre purchase is the most recent major sale AVAILABLE LAND & LAND PRICES

10. Lows • When close-in markets have high vacancy rates the Sunset Corridor is the first to empty and last to fill up • Driving distance and traffic delays • Available land for additional major corporations to locate or expand is extremely limited SUMMARY

11. Highs • When the market is tight it’s a great place to be if you are already in the market • Washington County and Hillsboro are possibility the most “pro-business” and make the process for expansion as reasonable as possible • Typically rates are less expensive for leasing or buying space as compared to the core market SUMMARY

12. Current Market Trends in CommercialReal Estate on the WestsideTanasbourne & Sunset Corridor Sub-Market Presented by: Tim Parker Vice President Melvin Mark Brokerage Company