Retail Market Report 3rd Quarter 2013 Los Angeles County

Charles Dunn Company 800 West 6th Street, 5th Fl Los Angeles, CA 90017 Direct 213.481.1800 Fax 213.481.0758 Lic. # 01201641

Retail Market Report Company Profile

Mission Statement Real estate service excellence through knowledge, dedication and teamwork.

Charles Dunn Company is one of the largest full-service regional real estate firms in the Western United States. Established in 1921 and headquartered in Los Angeles, the firm continues to be a frontrunner in the growing middle market and distressed assets business for brokerage and management services delivery. A privately held company with a deep-rooted culture of entrepreneurialism, we also offer comprehensive commercial real estate solutions through core business lines which support our brokerage and management services:

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Tenant Representation

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Construction Management

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Landlord Representation

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Receivership Services

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Investment Sales

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Accounting Services

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Development Advisory

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Capital Markets

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Property Management

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Special Assets Services

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Facilities Management

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Tax Appeal Consulting

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Asset Management

Charles Dunn Company has a significant international client base investing in U.S. properties complemented by a culturally diverse team of professionals speaking more than 15 languages. With more than 260 team members in 9 offices and a strategic partnership with The CORE Network that expands our footprint to 49 markets around the U.S., Charles Dunn Company’s reach extends far beyond its physical locations, as our experienced professionals leverage their market knowledge, relationships and expertise to achieve and exceed client expectations.

VALUES Integrity – We deliver on our commitments while maintaining the highest moral and professional standards Teamwork – We align personal and departmental agendas to achieve overall company success Dedication – We make it our personal responsibility to carry out our Mission Accountability – We are committed to performance, results, and achievement of our measurable goals Healthy Debate – We raise concerns, offer solutions, and value people who support the final decision

3rd Quarter 2013 – Los Angeles County

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Retail Market Report

Vacancy Rate: Los Angeles’s retail vacancy rate slightly increased in the 3rd quarter 2013, ending the quarter at 5.2% compared to the previous

Market Overview

quarter of 5.1% and the vacancy rate remain unchanged from four quarters ago. The amount of vacant sublease space in the Los Angeles market has trended down over the past four quarters. At the end of the 4th quarter 2012, there were 913,047 square feet of vacant sublease space.

Los Angeles County Demographics Population 9,889,056 Household Income $55,476

Currently, there are 863,319 square feet vacant in the market. Rental Rate: Rental rates in the Los Angeles retail market are down compared to previous quarter levels, and up from their levels four quarters ago. Rents ended the 3rd quarter 2013 at $2.02/SF/mo. NNN compared to $2.04/SF/mo. NNN in the 2nd quarter 2013 and $2.00/SF/mo. NNN four quarters ago. Reis forecasts average asking and effective rents to post gains of 1.8% and 2.0%, respectively, in 2013 for

Job Growth 1.6% (12 Months)

the Los Angeles retail market, after which more substantial gains will

Unemployment 10.2% (August 2013)

3.0%.

follow. By 2016, Reis expects both rental categories to increase over Los Angeles County – Vacancy Rate

Los Angeles County – Rental Rate (NNN)

3rd Quarter 2013 – Los Angeles County

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Retail Market Report Market Overview

Sales Transactions Property Address 1901-1919 Sepulveda Blvd. Los Angeles 20657 Golden Springs Dr. Diamond Bar 3081 E. Slauson Ave. Huntington Park 1301 Manhattan Ave. Hermosa Beach 2709-2735 S. Towne Ave. Pomona

SF

Sale Price

97,600

$33,250,000

52,826

$13,500,000

30,334

$8,850,000

15,105 107,910

Buyer

Seller

Public Storage Inc.

TVP Asset, Inc.

Apex Capital Investment, Corp. Kids From The Valley X, LLC

Golden Springs Plaza, LLC Bertz Development

$8,712,500

David McGovern

JR Rant, LLC

$8,000,000

PMP Business Plaza, LLC

Farshad Matian

Tenant

Owner

Lease Transactions Property Address 3150 San Fernando Rd. Glendale 1005 W. Arrow Highway San Dimas 6599 Fallbrook Ave. West Hills 26767 Agoura Rd. Bldg. A Agoura Hills 123-125 E. Lomita Blvd. Carson

SF

Year Built

102,249

1972

Goodwill

46,395

1986

Smart & Final

41,243

1985

ULTA

GGP, Inc.

16,250

2010

Erewhon Natural Foods Market

Dollinger Lost Hills Associates

16,243

2011

Planet Fitness

Properties, LLC

San Gabriel Valley Square Ralph’s Grocery Company

Investment: Tallying retail building sales of 10,000 square feet or larger, Los Angeles County experienced a decrease in sales volume for the 3rd quarter 2013 compared to the previous quarter. The market witnessed 26 transactions that closed for the quarter with a total transaction volume of approximately $136.5 million and the average price per square feet equated to $173.20. The cap rates increased from 6.0 percent four quarters ago to 6.2 percent for the 3rd quarter 2013.

Development/Construction: The Los Angeles retail market witnessed 16 buildings that were completed totaling 410,028 square feet during the 3rd quarter 2013. Over the past four quarters, a total of 955,700 square feet of retail space has been built in Los Angeles County. In addition to the current quarter, 13 buildings with 133,235 square feet were completed in the 2nd quarter 2013.

3rd Quarter 2013 – Los Angeles County

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Retail Market Report Retail Overview

General Retail

Total Inventory SF

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

Downtown Los Angeles

17,122,931

1,019,405

6.0%

(200,114)

11,653

$1.89

Mid-Cities

20,045,912

1,099,434

5.5%

161,424

16,807

$1.33

Mid-Wilshire

21,714,785

860,804

4.0%

107,976

17,305

$3.24

San Fernando Valley

22,623,624

1,053,667

4.7%

47,304

54,911

$1.76

San Gabriel Valley

24,794,803

1,177,130

4.7%

358,659

8,500

$1.53

Santa Clarita Valley

3,739,778

173,566

4.6%

(62,715)

4,500

$1.65

South Bay

29,211,338

1,474,072

5.0%

(63,097)

64,359

$1.70

Southeast Los Angeles

7,460,268

425,881

5.7%

24,825

18,531

$1.78

Tri-Cities

32,006,046

1,235,368

3.9%

32,523

10,500

$2.44

West Los Angeles

23,034,542

1,304,503

5.7%

169,990

9,185

$3.66

201,754,027

9,823,830

4.9%

576,775

216,251

$2.17

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

824,879

9,389

1.1%

0

0

$2.75

Mid-Cities

4,728,813

123,393

2.6%

18,989

0

$2.64

Mid-Wilshire

2,783,244

-

-

-

-

-

San Fernando Valley

6,318,365

237,707

3.8%

79,255

0

$1.50

San Gabriel Valley

4,036,315

58,494

1.4%

26,875

0

$3.42

Santa Clarita Valley

1,030,603

-

-

-

-

-

South Bay

6,721,329

198,353

3.0%

1,933

0

$3.32

Southeast Los Angeles

2,005,104

21,188

1.1%

16,048

13,472

-

Tri-Cities

7,376,091

650,596

8.8%

9,199

135,000

$1.79

West Los Angeles

5,822,695

59,427

1.0%

73,132

200,000

$5.67

41,647,438

1,358,547

3.3%

225,431

348,472

$2.98

TOTAL

Mall Market Downtown Los Angeles

TOTAL

Total Inventory SF

3rd Quarter 2013 – Los Angeles County

Retail Market Report Retail Overview

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

-

-

-

-

-

-

2,268,807

105,255

4.6%

2,629

0

$1.67

703,363

19,457

2.8%

159,790

0

$4.50

-

-

-

-

-

-

San Gabriel Valley

2,546,091

152,453

6.0%

(24,177)

0

$2.50

Santa Clarita Valley

1,494,873

108,718

7.3%

(10,638)

0

$2.22

South Bay

6,108,568

85,898

1.4%

23,161

0

$2.60

Southeast Los Angeles

-

-

-

-

-

-

Tri-Cities

-

-

-

-

-

-

293,742

47,687

16.2%

-

0

$2.50

13,415,444

519,468

3.9%

150,765

0

$2.48

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

Power Center Market Downtown Los Angeles Mid-Cities Mid-Wilshire San Fernando Valley

West Los Angeles TOTAL

Shopping Center Market

Total Inventory SF

Total Inventory SF

Downtown Los Angeles

2,948,553

218,673

7.4%

24,115

0

$2.18

Mid-Cities

17,755,829

1,296,963

7.3%

98,974

113,216

$1.74

Mid-Wilshire

6,878,203

470,096

6.8%

24,054

0

$2.43

San Fernando Valley

18,232,471

1,287,126

7.1%

21,421

0

$1.93

San Gabriel Valley

28,490,240

2,277,672

8.0%

94,062

38,000

$1.62

Santa Clarita Valley

6,270,367

562,286

9.0%

48,230

0

$1.80

South Bay

22,819,886

1,247,701

5.5%

(22,856)

0

$1.95

Southeast Los Angeles

7,334,716

508,769

6.9%

(17,196)

0

$1.61

Tri-Cities

10,196,284

355,899

3.5%

6,031

0

$2.36

West Los Angeles

7,742,034

290,748

3.8%

(980)

29,754

$3.18

128,668,583

8,515,933

6.6%

275,855

180,970

$1.96

TOTAL

3rd Quarter 2013 – Los Angeles County

Retail Market Report Retail Overview

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

-

-

-

-

-

-

Mid-Cities

127,356

900

0.7%

0

0

$1.48

Mid-Wilshire

546,566

14,178

2.6%

18,535

0

$4.00

San Fernando Valley

-

-

-

-

-

-

San Gabriel Valley

-

-

-

-

-

-

Santa Clarita Valley

77,284

7,193

9.3%

(1,923)

0

$2.11

South Bay

108,565

35,474

32.7%

(4,362)

0

$3.25

Southeast Los Angeles

751,259

21,032

2.8%

2,878

0

$2.22

-

-

-

-

-

-

250,000

31,993

12.8%

-

0

-

1,861,030

110,770

6.0%

15,128

0

$2.45

Total Vacant SF

Total Vacant Rate

Total Net Absorption

RBA Under Construction

Average Rental Rate (NNN)

Specialty Downtown Los Angeles

Tri-Cities West Los Angeles TOTAL

Total Retail

Total Inventory SF

Total Inventory SF

Downtown Los Angeles

20,896,363

1,247,467

6.0%

(175,999)

11,653

$1.99

Mid-Cities

44,926,717

2,625,945

5.8%

282,016

130,023

$1.57

Mid-Wilshire

32,626,161

1,364,535

4.2%

310,355

17,305

$3.02

San Fernando Valley

47,174,460

2,578,500

5.5%

147,980

54,911

$1.85

San Gabriel Valley

59,867,449

3,665,749

6.1%

455,419

46,500

$1.57

Santa Clarita Valley

12,612,905

851,763

6.8%

(27,046)

4,500

$1.87

South Bay

64,969,686

3,041,498

4.7%

(65,221)

64,359

$1.84

Southeast Los Angeles

17,551,347

976,870

5.6%

26,555

32,003

$1.72

Tri-Cities

49,578,421

2,241,863

4.5%

47,753

145,500

$2.39

West Los Angeles

37,143,013

1,734,358

4.7%

242,142

238,939

$3.75

387,346,522

20,328,548

5.2%

1,243,954

295,052

$2.02

TOTAL

Source: Costar

3rd Quarter 2013 – Los Angeles County

Retail Market Report Company Offices

Management Services

Brokerage Services

Los Angeles Central/Headquarters 800 West Sixth Street, Sixth Floor Los Angeles, CA 90017 Phone (213) 683-0500 Fax (213) 683-1551 Contacts Property Management & Asset Services; Patrick J. Conn, President International Division; Jerry Wang, Executive Vice President Special Assets Group; Tracy Taft, Business Development Account Executive

Los Angeles Central/Headquarters 800 West Sixth Street, Fifth Floor Los Angeles, CA 90017 Phone (213) 481-1800 Fax (213) 481-0758 Contact Walter F. Conn, President

San Diego 3517 Camino Del Rio South, Suite 205 San Diego, CA 92108 Phone (619) 491-3040 Fax (619) 491-3045 Contact Bob Hitchcock, Regional Vice President San Fernando Valley 6180 Laurel Canyon Boulevard, Suite 220 North Hollywood, CA 91606 Phone (818) 760-0172 Fax (818) 760-8105 San Francisco 555 Montgomery Street, Suite 816 San Francisco, CA 94111 Phone (415) 951-0300 Fax (415) 951-0333 Contact Don Whitehead, Senior Portfolio Manager

3rd Quarter 2013 – Los Angeles County

Los Angeles West 1925 Century Park East, Suite 2350 Los Angeles, CA 90067 Phone (310) 312-1800 Fax (310) 312-1801 Contact Darrell R. Levonian, Executive Managing Director Los Angeles North 12925 Riverside Drive, Suite 201 Sherman Oaks, CA 91423 Phone (818) 358-1800 Fax (818) 304-8991 Contact Stacy Vierheilig-Fraser, Senior Managing Director Glendale 100 West Broadway, Suite 510 Glendale, CA 91210 Phone (818) 550-8200 Fax (818) 550-8221 Contact William R. Boyd, Jr., Senior Managing Director

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