Best Value Practices: Leasing

PREPARED BY:

STEPHEN CUGIER Vice President Dir +1 206 382 8553 Mob +1 206 851 9865

COLLIERS INTERNATIONAL 601 Union Street · Suite 5300 · Seattle, WA 98101 · +1 206 223 0866 · www.colliers.com [email protected]

COLLIERS INTERNATIONAL

| 601 Union Street, Suite 5300 | Seattle, WA 98101

Tenant Representation Process

Tenant Representation Process

1. Preliminary Analysis > Hire Colliers International - Appoint the Colliers team - Start saving time & money > Evaluate Business Market - Industry changes - Competitors - Business goals > Review Existing Real Estate Portfolio - Lease rate - Square footage - Lease expiration - Renewal notification dates - Rights to renew/expand - Management decision-making process > Needs Analysis - Square footage: short-term & future - Location - Occupancy date, lease term - Budget - Layout & work flow - Image: class, age, architecture, quality, amenities, access, security, parking

2. Selecting Alternatives > Strategy - Wait and review - Renew - Relocate > Market Overview - Trends, supply & demand, vacancy, absorption, rents, recent deals, concessions > Market Survey - Colliers International to prepare preliminary options list - Select buildings to tour > Tour & Inspect - Tour buildings - Compare/alternatives - Determine short list > Request for Proposal (RFP) - Colliers International to prepare RFP(s) for Tenant’s review - Send RFP(s) to select buildings

COLLIERS INTERNATIONAL 601 Union Street · Suite 5300 · Seattle, WA 98101 · +1 206 223 0866 · www.colliers.com

3. Evaluation & Comparison

4. Negotiation

5. Construction & Move In

> Select Vendors - Architect - Moving company - IT provider/cabling - Phone company - Furniture company - Interior designer

> Review Landlords’ Responses to LOI - Qualitative - Quantitative - Refine short list

> Architect Prepares Working Drawings; Obtains Necessary Permits

> Receive Landlords’ Proposals

> Negotiate LOI

> Review Landlords’ Proposals - Qualitative - Quantitative - Define short list

> Select Finalist - Sign LOI

> Move-In - Furniture, equipment, accessories - Follow up “punch” list

> Finalize Space Plan

> Office Opens

> Space Plan - Ask Landlord to pay for space plan - Review space plans for efficiency, work flow - Refine short list

> Review Lease; Negotiate Legal Terms

> Letter of Intent (LOI) - A non-binding list of business terms - Colliers International to prepare LOI’s for client review - Send to short-listed properties

> Construction Estimates - Value engineering

> Lease Execution

> Furniture, Telephone, Equipment Ordered > Construction - Tenant and architect monitor build-out

Puget Sound Office Market Overview

PUGET SOUND MARKET INDICATORS Q4 2013

Y-O-Y

VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATES SALES VOLUME SALE PRICE

2.0

18%

1.5

16%

1.0

14% 12%

.5

10%

0

8%

-.5

Net Absorption

4%

Vacancy

-1.5 -2.0

6%

LEGEND

-1.0

2006

2007

SEATTLE

MARKET SNAPSHOT

2008

2009

2010

SEATTLE MARKET TOTAL VACANCY Q4 2013

2011

2012

Vacancy

Net absorption (millions)

PUGET SOUND ABSORPTION AND VACANCY RATES

2% 2013

SEATTLE CBD TOTAL VACANCY Q4 2013

0

SEATTLE CBD CLASS A RENTAL RATE Q4 2013

11.35% 13.71% $34.52

COLLIERS INTERNATIONAL 601 Union Street · Suite 5300 · Seattle, WA 98101 · +1 206 223 0866 · www.colliers.com

/ SF

CHANGE IN SEATTLE CBD CLASS A RENTAL RATE Q4 2012-Q4 2013

SEATTLE OVERALL ABSORPTION 2012

SEATTLE OVERALL ABSORPTION 2013

12.9% 1,376,918 828,330

Tenants in the Market

Professional Services 9.1% Non-Profit 1.5% Government 1% Healthcare 2.9% Legal 4.3%

Life Sciences 6.5 Arch/Engr 6.5%

Active tenants in the market: 3,224,269 SF

Other 28.1%

COLLIERS INTERNATIONAL 601 Union Street · Suite 5300 · Seattle, WA 98101 · +1 206 223 0866 · www.colliers.com

Tech 40.1%

Large Block Summary

100K+ SF Blocks

‘09‘10 MET PARK NORTH

Class A Vacancy

20.1% 605 UNION

705 UNION

505 FIRST

83 KING

RUSSELL INVESTMENTS

WEST 8TH

1918 8TH

1800 9TH

7TH & MADISON

2201 WESTLAKE

1100 EASTLAKE

2601 ELLIOTT

1600 7TH

1260 MERCER

PIKE PLAZA

645 ELLIOTT

SIXTH & WALL

COLUMBIA CENTER

1111 THIRD

635 ELLIOTT

100K+ SF Blocks

Class A Vacancy

12.09%

‘14

635 ELLIOTT

1111 THIRD

1201 THIRD

EXCHANGE BUILDING

2200 1ST

WEST LAKE UNION CENTER

5TH & BELL

Lake Union Class A Vacancy

New Construction DEXTER STATION

COLLIERS INTERNATIONAL 601 Union Street · Suite 5300 · Seattle, WA 98101 · +1 206 223 0866 · www.colliers.com

400 FAIRVIEW

HILL7

TROY BLOCK

HOMEPLATE CENTER SOUTH

1.3%

THE

MOVE TO

PUYALLUP

DESIGN PROCESS

Strategic Information •

Project Information • Design • Documentation • Bid • Construction

Programming • Planning

Facility Information

• •

Facility Management Real Estate & Move Management

where we

BEGAN

W H AT W E D E L I V E R E D New workplace solution that consolidated facilities to gain efficiency and better engage employees.

lobby

open office

kitchen

GMP DEVELOPMENT

I N T E G R I T Y l L E A D E R S H I P l PA S S I O N l E X C E L L E N C E

INTEGRATED APPROACH

I N T E G R I T Y l L E A D E R S H I P l PA S S I O N l E X C E L L E N C E

CONTINUOUS COLLABORATION

Baseline Schedule



Procurement Plan

Site Survey

Good Working Documents

Constructability Review

Timely Sub Release Good Bid List

Final Permit Inspection/ QA/QC Sign Off

Best-in-Class Collaborative Management

I N T E G R I T Y l L E A D E R S H I P l PA S S I O N l E X C E L L E N C E