The Valley Reaches New Peaks

Transcription

1 Research & Forecast Report SAN JOSE SILICON VALLEY The Valley Reaches New Peaks > > Gross absorption soared to 8.9 million square feet. > > Available space rate remained steady despite an increase of inventory. > > Rents increased across all product types. Market Indicators - Santa Clara County Santa Clara County Median Household Income Population Growth Santa Clara County Unemployment Rate The first half of has come to a close and the Silicon Valley economy is firing on all cylinders. According to the State of California Employment Development department, Santa Clara County s unemployment rate is now at 2.3 percent. The uptick in employment can be attributed to key technology companies strategically expanding their foothold in the Silicon Valley. The Valley s unique ecosystem, fostering a culture of progress and innovation, coupled with an unrivaled pool of tech talent, continues to drive commercial real estate demand. Despite major challenges such as lack of affordable housing, outdated infrastructure, and a potential city head tax on large employers in tech-saturated cities like Mountain View and Sunnyvale, there is no sign of slowdown from both occupiers and developers alike. Vacancy $114,600 Market Trends Relative to prior quarter 9.4% 2.3% US Unemployment Rate % Q3 * Silicon Valley s commercial property market saw unprecedented volumes of leasing activity in the second quarter, with gross absorption reaching 8.94 million square feet, up 69.5 percent from the previous quarter and up 17.6 percent from. Furthermore, the Valley experienced a positive 3.75 million square feet of net absorption, up percent from the previous quarter and up 38.9 percent from the same period last year. Roughly half of the activity came in June, boosted by Facebook s 750,000-square-foot deal at Ardenwood Corporate Park in Fremont, which also happened to be the largest deal of the quarter. The total availability across all product types sits at 30.2 million square feet while vacant space is at 18.3 million square feet, translating to an overall availability rate of 8.5 percent, and vacancy rate of 5.2 percent. Vacancy vs. Availability Rates Silicon Valley All Products 8% 6% 4% 2% Net Absorption Under Construction Office Rental Rate R&D Rental Rate Industrial/Warehouse Rental Rate *Projected Summary Statistics Silicon Valley All Products Previous Quarter Current Quarter Overall Vacancy Rate 5.71% 5.17% Net Absorption 1,643,505 3,752,738 Construction Completed 514,415 2,767,171 Under Construction 6,084,539 5,795,481 Office Asking Rents* $4.25 FS $4.33 FS R&D Asking Rents* $2.21 NNN $2.25 NNN Industrial Asking Rents* $1.29 NNN $1.31 NNN Warehouse Asking Rents* $0.96 NNN $1.03 NNN *Asking Rents Reported Monthly 0% 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Availability Rate Vacancy Rate

2 Office > > Gross absorption recorded 5.1 million square feet. > > Net absorption measured 2.6 million square feet. > > Weighted asking rents reached $4.33 full-service. Silicon Valley Office Rent vs. Vacancy 25% 20% 15% $5.00 $4.00 $3.00 Office product is king of Silicon Valley. The market was particularly busy in the second quarter, with gross absorption reaching 5.1 million square feet. One reason for the percent spike quarter over quarter is due to a number of massive deals taking longer to close, and spilling over from a flat first quarter. 10% 5% 0% Total Vacancy Rate Asking Rents (FS) $2.00 $1.00 $0.00 The most notable office deal of the quarter came from Micron Technology leasing 603,666 square feet in North San Jose. Micron secured three times more space than it currently occupies in the Valley, with plans to sublease one of the buildings. The market for large blocks of office space is dwindling, and large users are thinking ahead and securing space in advance while they still can. Roughly 70 percent of office space under construction is preleased in the Silicon Valley, and with competition from the big four, (Google, Apple, Facebook, and Amazon), users are strategically planning ahead. Office activity from the big four remained active. Amazon secured an additional 385,000 square feet in Sunnyvale at Jay Paul s Moffett Towers I development, bringing Amazon s total footprint in the Moffett area to 1.7 million square feet, an unofficial H perhaps. Verb Surgical, a joint venture between Google and Johnson & Johnson, leased 234,096 square feet at the Stadium Tech Center on the border of North San Jose and Santa Clara. The aforementioned top three deals of the quarter, while geographically lie in three different cities, are within five miles of each other along the 237 freeway corridor at the base of the San Francisco Bay, a strategic location on the light rail halfway between the CalTrain and the Milpitas BART, which is expected to start operation next year. Undoubtedly, accessibility and proximity to public transit is a must-have when it comes to office location. More than 2.3 million square feet of new office space came online in the second quarter, most of which was absorbed by the big four. The largest property to come online was Apple s 777,170-square-foot build-to-suit campus in Sunnyvale followed by the 245,738-squarefoot property at 1625 Plymouth Street in Mountain View, fully preleased to Google. At the end of the second quarter 4.7 million square feet of office space remained under construction. Office Availability Rates Select Silicon Valley Cities Morgan Hill Mountain View Palo Alto San Jose Santa Clara Sunnyvale West Valley 3.1% 5.0% 7.2% 8.2% 10.2% 16.5% 18.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Silicon Valley Office Net Absorption vs. Gross Absorption Millions () Despite the surge of new construction hitting the market, both the availability and vacancy rates compressed in the second quarter. The availability space rate dropped 18 basis points to percent while vacancy rate fell 91 basis points to 7.08 percent. As expected, weighted asking rents inversely rose to $4.33 full-service, up $0.08 from the prior quarter Gross Absorption (Qtr) Net Absorption (Qtr) 2 Silicon Valley Research & Forecast Report Second Quarter Colliers International

3 SAN FRANCISCO BAY FREMONT 680 Top Office Lease Transactions MILPITAS Micron Technology Center Holger Way, San Jose 280 PALO ALTO MTN. VIEW ,666 Amazon, Moffett Towers Enterprise Way, Sunnyvale SUNNYVALE LOS ALTOS SANTA CLARA 385, CUPERTINO/ SARATOGA SAN JOSE 87 Verb Surgical, Stadium Tech Center 5490 Great America Pkwy, Santa Clara 234,096 CAMPBELL/ LOS GATOS Facebook, The Village at San Antonio 401 San Antonio Road, Mountain View Sublease 225,000 MORGAN HILL/ GILROY Nutanix 1740 Technology Drive San Jose /Expansion 176,004 Top Office Sale Transactions = Colliers International Deal PROPERTY ADDRESS SIZE SELLER BUYER 160 W Santa Clara Street San Jose 214,118 PNC Realty Investors Beacon Capital Partners 152 N 3rd Street, San Jose 138,100 RPRO 152N3, LLC Urban Community 601 California Avenue, Palo Alto 111,653 The Blackstone Group Morgan Stanley 5150 El Camino Real, Los Altos 76,525 TA Associates Dutchints Development, LLC 2900 Lakeside Drive Santa Clara 36,287 Princeton Investment Group CS Lakeside Santa Clara Silicon Valley Research & Forecast Report Second Quarter Colliers International 3

4 R&D > > Gross absorption recorded 2.77 million square feet. > > Net absorption measured positive 731,000 square feet. > > Weighted asking rents reached $2.25 NNN. Silicon Valley R&D Rent vs. Vacancy 25% 20% 15% $2.50 $2.00 $1.50 Momentum for research development (R&D) product rolled over into the second quarter of the year with leasing activity reaching 2.77 million square feet, up 38.6 percent from the previous quarter. For the first time since, net absorption was in the positive at 730,692 square feet. 10% 5% 0% Total Vacancy Rate Asking Rents (NNN) $1.00 $0.50 $0.00 The most significant deal of the quarter came from Facebook with the signing of 750,000-square-foot Ardenwood Corporate Park in Fremont, which happened to be the largest deal of the quarter across all product types. The deal is a calculated move for the social media giant, expanding directly across the bay from its Menlo Park headquarters, and creating a sister campus accessible to workforce living in the East Bay. Facebook is said to also be exploring passenger rail infrastructure over the Dumbarton Bridge, a move to connect their growing Fremont/Newark operations base to their Menlo Park headquarters. R&D Availability Rates Select Silicon Valley Cities Fremont Milpitas 8.7% 16.6% Morgan Hill 3.9% Mountain View 6.4% San Jose 16.5% Santa Clara 8.0% Sunnyvale 4.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Facebook signs 750,000 in Ardenwood, Fremont No new R&D projects have completed thus far in, and for the fourth consecutive quarter inventory for R&D product shrank. The Silicon Valley has only two R&D projects under construction - the 36,120-square-foot project 2747 Park Boulevard, Palo Alto preleased to Tencent and the still available 119,700-square-foot development at 3223 Hanover Street, Palo Alto. Silicon Valley R&D Net Absorption vs. Gross Absorption Millions () The base for R&D product contracted for the fourth consecutive quarter, and as expected, availability and vacancy rates followed suit. Mid-way through the availability space rate stood at percent, down 33 basis points from the previous quarter, while vacancy stood at 6.65 percent, down 68 basis points for the same time period. The average weighed asking rent reached a new record peak at $2.25 NNN, up $0.04 from the previous quarter Gross Absorption (Qtr) Net Absorption (Qtr) 4 Silicon Valley Research & Forecast Report Second Quarter Colliers International

5 SAN FRANCISCO BAY FREMONT 680 Top R&D Lease Transactions Facebook, Ardenwood Corporate Park Dumbarton Circle, Fremont MILPITAS 754, PALO ALTO MTN. VIEW 237 ALOM Technology, Warm Springs Business Park Warm Springs Blvd, Fremont 106,100 SUNNYVALE Miasole LOS ALTOS SANTA CLARA 2590 Walsh Avenue, Santa Clara ,778 CUPERTINO/ SARATOGA SAN JOSE 87 Cepheid, Caribbean Corporate Center 1315 Chesapeake Terrace Sunnyvale CAMPBELL/ LOS GATOS 110,217 Stanford Medical Property 1701 Page Mill Road, Palo Alto Sublease 116,172 MORGAN HILL/ GILROY Top R&D Sale Transactions = Colliers International Deal PROPERTY ADDRESS SIZE SELLER BUYER 2700 Zanker Road, San Jose 464,636 MWest Properties Lincoln Properties N 1st Street, San Jose 249,832 Lincoln Property Company Ocean/West JV Hana 5200 Great America Parkway, Santa Clara 224,522 Aslan Newcastle Great America Nixon Peabody, LLC 450 Holger Way, San Jose 98,423 KBS Realty Advisors Microchip Technology Silicon Valley Research & Forecast Report Second Quarter Colliers International 5

6 Industrial Silicon Valley Industrial Rent vs. Vacancy > > Gross absorption recorded 592,000 square feet. > > Net absorption measured positive 184,600 square feet. > > Weighted asking rents reached $1.31 NNN. 15% 12% 9% $1.50 $1.20 $0.90 Leasing activity for industrial product in the second quarter registered at 592,000 square feet, down percent from the previous quarter. The drop is in part due to an inflated first quarter, when Google purchased three industrial buildings totaling 564,000 square feet at Compared to the same period last year, leasing activity is up 2.24 percent. For the third consecutive quarter net absorption was positive with 184,600 square feet. 6% 3% 0% Vacancy Rate Asking Rents (NNN) $0.60 $0.30 $0.00 The market remains extremely tight and it is not surprising that, with the availability rate at 3.00 percent, four of the five top deals in the quarter were renewals. With no new industrial product coming online in the first half of the year, and only two industrial projects under construction, meeting industrial space requirements in the Valley will remain challenging. Industrial Availability Rates Select Silicon Valley Cities Fremont 7.4% The largest deal of the quarter, and the only one registering over 50,000 square feet, was ALOM Technology renewing their 120,433-square-foot space at Warm Springs Boulevard, Fremont. In fact, three of the top five industrial deals were based in Fremont, a city that bridges Silicon Valley and the East Bay, and is an attractive lower cost alternative to Santa Clara County. The much anticipated Pacific Commons Industrial Center in Fremont is currently under construction and will add 815,000 square feet of high-demand industrial product to Silicon Valley, but not until At the end of, the vacancy rate stood at an all-time low of 0.98 percent, down 45 basis points from the previous quarter. The average weighed asking rent reached a high of $1.31 NNN, up $0.02 from the previous quarter. Gilroy 1.3% Milpitas 2.1% Morgan Hill 4.4% San Jose 2.4% Santa Clara 1.2% Sunnyvale 0.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Silicon Valley Industrial Net Absorption vs. Gross Absorption Millions () Gross Absorption (Qtr) Net Absorption (Qtr) 6 Silicon Valley Research & Forecast Report Second Quarter Colliers International

7 SAN FRANCISCO BAY FREMONT 680 Top Industrial Lease Transactions ALOM Technology, Warm Springs Business Park MILPITAS Warm Springs Boulevard, Fremont 120,433 PALO ALTO 280 MTN. VIEW 237 FM Industries, Inc Hotchkiss Street, Fremont LOS ALTOS SUNNYVALE SANTA CLARA 40, CUPERTINO/ SARATOGA SAN JOSE 87 Celestica Corporation Milmont Drive, Fremont 38,558 CAMPBELL/ LOS GATOS KB Entertainment 495 E Brokaw Road, San Jose 25,572 MORGAN HILL/ GILROY Stouss Brothers Construction Comstock Street, Santa Clara 19,920 Top Industrial Sale Transactions = Colliers International Deal PROPERTY ADDRESS SIZE SELLER BUYER 105 Leavesley Road, Gilroy 169,980 Santacroce Family Trust Jacob O Sullivan 260 Phelan Avenue, San Jose 27,000 Charles and Pamela Pitts Industrial Metals Recycling 538 Trimble Road, San Jose 11,723 Richard Hanson Lo-Jo, Inc 1244 Birchwood Drive, Sunnyvale 10,000 Dirk and Julie Rohloff Warner Swirshy Worldwide, LLC 1080 Oakland Road, San Jose 4,000 Perry Trust Meza, LLC Silicon Valley Research & Forecast Report Second Quarter Colliers International 7

8 Warehouse Silicon Valley Warehouse Rent vs. Vacancy > > Gross absorption recorded 470,000 square feet. 15% $1.50 > > Net absorption measured positive 220,000 square feet. 12% $1.20 > > Weighted asking rents reached $1.03 NNN. 9% $0.90 Warehouse leasing activity climbed to 470,000 square feet, up percent from the previous quarter and up 70.5 percent from the same period last year. Net absorption was positive 220,000 square feet, a result of a strong quarter. 6% 3% 0% Vacancy Rate Asking Rents (NNN) $0.60 $0.30 $0.00 Much like the industrial sector, warehouse space is extremely limited. As a result, many companies choose to renew rather than explore relocation. The most significant warehouse transaction, which accounted for nearly half of the quarter s leasing volume, was CEVA Logistics renewing their 212,840 square feet at 1710 Little Orchard Street in San Jose. Available warehouse space is in short supply, and users often face two options: stay put or leave the Valley. Warehouse Availability Rates Select Silicon Valley Cities Fremont 2.6% Gilroy 0.4% Milpitas 16.8% Morgan Hill 0.0% San Jose 1.9% Santa Clara 7.1% Sunnyvale 0.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Source: Colliers International The much awaited McCarthy Creekside development in Milpitas was completed in the second quarter and infused the market with 450,610 square feet of warehouse product, partially preleased to Motors in the first quarter. As a result of new product coming online, the availability rate rose to 4.15 percent from 2.97 percent and vacancy rate increased to 1.50 percent from 0.95 percent quarter over quarter. The average weighted asking rent reached a high of $1.03 NNN, up $0.07 from the previous quarter. Silicon Valley Warehouse Net Absorption vs. Gross Absorption Millions () Gross Absorption (Qtr) Net Absorption (Qtr) 8 Silicon Valley Research & Forecast Report Second Quarter Colliers International

9 SAN FRANCISCO BAY FREMONT 680 Top Warehouse Lease Transactions San Jose Trading Co, Lundy Business Complex MILPITAS Lundy Avenue, San Jose 40,647 PALO ALTO 280 MTN. VIEW 237 Porcelanosa USA Zanker Road, San Jose SUNNYVALE 65,384 LOS ALTOS SANTA CLARA Lockheed Martin Corporation CUPERTINO/ SARATOGA 85 SAN JOSE Charcot Avenue, San Jose 51,175 CAMPBELL/ LOS GATOS CEVA Logistics, Little Orchard Business Park 1710 Little Orchard Street, San Jose 212,840 MORGAN HILL/ GILROY K1 Speed 2925 Mead Avenue, Santa Clara 63,061 Top Warehouse Sale Transactions = Colliers International Deal PROPERTY ADDRESS SIZE SELLER BUYER Butterfield Boulevard, Morgan Hill 113,256 MWest Properties Golden State Assembly Silicon Valley Research & Forecast Report Second Quarter Colliers International 9

10 Market Comparisons Silicon Valley OFFICE MARKET CLASS TOTAL INVENTORY DIRECT VACANT SUBLEASE VACANT DIRECT OCCUPIED SUBLEASE OCCUPIED TOTAL AVAILABLE AVAILABILITY RATE CURR QTR AVAILABILITY RATE PREV QTR NET ABSORPTION CURR QTR YTD COMPLETED IN CURR QTR UNDER CONST. FS WTD AVG ASKING CAMPBELL / LOS GATOS A 1,920, ,999 33, ,699 32, , % 25.7% 27,050 11, $4.27 B 2,310,399 96, ,150 29, , % 8.2% (9,310) (11,335) - - $3.45 C 235,576 4,778 4,051 1,950-10, % 3.7% - 1, $- Total 4,466, ,587 37, ,799 61, , % 15.5% 20,084 1, $4.04 CUPERTINO / SARATOGA A 4,303,562 32,824 36,111 60,218 6, , % 3.2% - (1,469) - - $4.98 B 2,991,430 46,988 38,892 34,912 3, , % 4.4% 7,260 1, $3.84 C 178,010 9, , % 5.4% (384) (2,477) - - $3.21 Total 7,473,002 89,498 75,003 95,130 9, , % 3.7% 6,876 (2,429) - - $4.50 FREMONT / MILPITAS A 884, ,537-38,274 38, , % 21.2% (626) (2,295) - - $2.37 B 1,705,421 76,885 1,825 17,384 5,087, % 7.8% 5,965 5, $2.73 C 581,654 9,080-21,542-30, % 2.0% (3,570) 1, $1.56 Total 3,171, ,502 1,825 77,200 43, , % 10.5% 1,769 4, $2.42 GILROY / MORGAN HILL A 418,491 7, , % 1.8% - 3, $2.40 B 434,506 5, , % 1.3% $1.75 C 266,251 21,250-6,785 2,746 30, % 9.7% $2.10 Total 1,119,248 34,447-6,785 2,746 43, % 3.6% - 3, $2.10 LOS ALTOS A 295,515 9,493 7,322-11,924 28, % 5.7% (39) (6,380) - - $6.88 B 507,803 26,005-13,294-39, % 7.2% , $5.47 C 382,918 8,380 1,732 3,372 3,471 16, % 3.9% (4,090) (1,720) - - $5.68 Total 1,186,236 43,878 9,054 16,666 15,395 84, % 5.8% (3,675) 7, $5.99 MOUNTAIN VIEW A 4,741, ,701 11, ,317 72, , % 12.1% 257, , , ,918 $7.37 B 1,326,168 17,043 8,258 54,493 18,444 98, % 6.0% 7,787 53, $5.36 C 512,873 1,991-8,180-10, % 4.4% 2,500 5, $7.54 Total 6,580, ,735 19, ,990 90, , % 10.2% 267, , , ,918 $7.13 PALO ALTO A 5,504,740 65,574 6, , , , % 6.1% 324, , ,718 29,989 $8.03 B 4,456,932 43,361 11, , , , % 4.6% 20,739 35, $5.45 C 1,834,251 12,979 9,960 47,823 66, , % 2.7% (7,050) (1,904) - - $7.58 Total 11,795, ,914 28, , , , % 5.1% 337, , ,718 29,989 $6.80 SAN JOSE A 15,750, 2,037, , , ,992 3,474, % 21.1% 163, , , ,351 $3.94 B 9,802, ,557 45, ,104 95, , % 10.7% 35,878 45,849-96,000 $3.20 C 4,051, ,437 2, ,233 11, , % 9.6% 7,185 6, $2.88 Total 29,604,629 2,934, ,080 1,181, ,985 4,888, % 16.1% 206, , , ,351 $3.70 SANTA CLARA A 10,657, , , , ,511 2,200, % 23.6% 387, , , ,000 $3.91 B 5,153, ,970 21, ,703 45, , % 13.8% (49,798) (88,034) - - $3.20 C 431,892 38, , % 10.2% 3,867 11, $2.88 Total 16,242,329 1,184,100 1,021, , ,200 3,061, % 20.4% 342, , , ,000 $3.75 SUNNYVALE A 13,517, ,369 19, , , , % 3.5% 1,443,105 1,437,840 1,443,105 2,731,642 $5.67 B 1,496,180 55,163 7,795 6,958 12,743 82, % 5.3% (1,223) 14, $3.65 C 458,185 3,960-1,440-5, % 0.5% (1,400) (2,520) - - $2.95 Total 15,472, ,492 27, , , , % 3.6% 1,440,482 1,450,272 1,443,105 2,731,642 $5.47 SILICON VALLEY TOTALS A 57,995,118 3,509,766 1,353,351 1,645,138 1,224,094 7,732, % 14.3% 2,602,762 3,723,548 2,316,561 4,572,900 $4.58 B 30,184,507 1,481, , , ,458 2,828, % 8.5% 17,752 73,551-96,000 $3.66 C 8,932, ,286 18, ,325 84, , % 6.7% (2,942) 16, $3.56 Total 97,112,430 5,372,494 1,507,737 2,727,726 1,679,054 11,287, % 11.8% 2,617,572 3,814,059 2,316,561 4,668,900 $4.33 QUARTERLY COMPARISON AND TOTALS 2Q-18 97,112,430 5,372,494 1,507,737 2,727,726 1,679,054 11,287, % 11.8% 2,617,572 3,814,059 2,316,561 4,668,900 $4.33 1Q-18 92,629,441 5,810,230 1,591,325 2,416,968 1,109,508 10,928, % 12.1% 1,198,407 1,198, ,415 5,321,200 $4.25 4Q-17 91,834,042 6,433,489 1,817,975 1,990, ,923 11,068, % 12.2% 1,473,550 5,772,461 1,728,351 3,639,873 $4.27 3Q-17 89,909,440 5,853,504 2,203,083 1,781,618 1,106,564 10,944, % 11.7% 1,468,728 4,298,911 2,236,017 5,131,403 $4.33 2Q-17 87,580,374 5,633,294 1,789,215 1,577,070 1,218,946 10,218, % 11.7% 2,666,093 2,830,183 3,447,606 6,661,318 $ Silicon Valley Research & Forecast Report Second Quarter Colliers International

11 Market Comparisons Silicon Valley R&D, INDUSTRIAL & WAREHOUSE MARKETS TYPE TOTAL INVENTORY DIRECT VACANT SUBLEASE VACANT DIRECT OCCUPIED SUBLEASE OCCUPIED TOTAL AVAILABLE AVAILABILITY RATE CURR QTR AVAILABILITY RATE PREV QTR NET ABSORPTION CURR QTR YTD COMPLETED CURR QTR UNDER CONSTR. NNN WTD AVG ASKING CAMPBELL R&D 1,378,087 69,923-45,386 2, , % 11.4% (1,600) (1,600) - - $2.37 IND 995,329 6,825-4,910-11, % 1.0% - (10) - - $2.60 TOTAL 2,373,416 76,748-50,296 2, , % 7.0% (1,600) (1,610) - - $2.38 CUPERTINO R&D 3,098,845-16, , % 0.9% $3.15 TOTAL 3,098,845-16, , % 0.9% $3.15 FREMONT R&D 20,613, , , , ,392 1,798, % 11.8% 757, , $1.40 IND 10,247, , , , , % 5.9% 74,422 18, ,852 $1.23 WSE 8,631, , , % 1.5% $0.79 TOTAL 39,492,833 1,037, ,683 1,298, ,792 2,788, % 8.0% 831, , ,852 $1.36 GILROY R&D 372,117 27,042-49,080-76, % 31.2% $0.87 IND 1,813,262 23, , % 1.3% - 4, $- WSE 3,812,905-14, , % 0.4% - (14,909) - - $0.95 TOTAL 5,998,284 50,675 14,909 49, , % 2.6% - (10,523) - - $0.88 LOS GATOS R&D 342, % 0.0% (967) (967) - - $2.70 TOTAL 342, % 0.0% (967) (967) - - $2.70 MILPITAS R&D 13,826,788 1,328,473 53, , ,120 2,299, % 18.5% 52, , $1.89 IND 2,943, ,088 12,858 62, % 2.7% 1,078 11, $1.10 WSE 5,165, , , , , % 11.1% 136, , ,610 - $0.99 TOTAL 21,936,340 1,724,630 53,636 1,106, ,669 3,232, % 14.7% 189, , ,610 - $1.68 MORGAN HILL R&D 2,874,866 67,044-23,932 21, , % 3.3% 9,764 23, $0.91 IND 2,474,361 38,231-12,590 57, , % 3.5% 15,320 13, $1.05 WSE 482, % 0.0% $- TOTAL 5,831, ,275-36,522 78, , % 3.1% 25,084 36, $0.96 MOUNTAIN VIEW R&D 14,041, , , , , , % 5.4% 11,080 (117,771) - - $3.46 IND 1,588,183 64,792-46, , % 7.2% 14,666 (2,933) - - $3.36 TOTAL 15,629, , , , ,483 1,014, % 5.6% 25,746 (120,704) - - $3.45 PALO ALTO R&D 13,679,328 43, , , , , % 3.8% (50,277) 27, ,820 $6.42 TOTAL 13,679,328 43, , , , , % 3.8% (50,277) 27, ,820 $6.42 SAN JOSE R&D 42,478,355 4,489, ,311 1,082, ,694 7,009, % 15.3% (113,947) (815,349) - - $2.11 IND 24,883, ,583 74, ,114 38, , % 2.1% 47, , ,909 $0.93 WSE 17,080, ,985-93,331 82, , % 2.6% 107,236 93, $0.87 TOTAL 84,442,613 4,831, ,164 1,465, ,160 7,930, % 8.9% 40,655 (68,108) - 155,909 $1.99 SANTA CLARA R&D 18,981,351 1,044, , , ,288 1,510, % 9.3% 120, , $2.14 IND 11,486,745 43,126-76,514 19, , % 1.8% 20,836 10, $1.27 WSE 3,355,255 48, ,355 6, , % 1.8% (24,000) (29,200) - - $1.31 TOTAL 33,823,351 1,136, , , ,788 1,888, % 6.0% 117, , $2.03 SUNNYVALE R&D 21,700, , , , ,631 1,045, % 5.1% (53,334) 35, $2.50 IND 5,906,557 33,872-17,538-51, % 1.0% 10,918 18, $1.75 WSE 1,687, % 0.0% $- TOTAL 29,295, , , , ,631 1,096, % 4.0% (42,416) 53, $2.49 SILICON VALLEY TOTALS R&D 153,388,565 8,537,437 1,667,158 3,226,677 1,927,124 15,358, % 10.4% 730, , ,820 $2.25 IND 63,548, ,714 82,353 1,006, ,662 1,904, % 2.8% 184, , ,761 $1.31 WSE 40,396, ,842 14, , ,409 1,675, % 3.0% 219, , ,610 - $1.03 TOTAL 257,333,770 9,669,993 1,764,420 5,017,355 2,487,195 18,938, % 7.4% 1,135,166 1,582, ,610 1,126,581 $2.12 QUARTERLY COMPARISON AND TOTALS 2Q ,333,770 9,669,993 1,764,420 5,017,355 2,487,195 18,938, % 7.4% 1,135,166 1,582, ,610 1,126,581 $2.12 1Q ,119,272 10,869,927 1,694,970 4,217,647 2,197,331 18,979, % 7.6% 447, , ,339 $2.08 4Q ,470,315 11,868,163 1,612,940 4,283,652 1,909,358 19,674, % 8.0% (173,516) (681,905) - 642,639 $1.96 3Q ,478,522 12,379,628 1,646,586 4,492,318 2,066,994 20,585, % 7.4% (622,479) (508,389), ,730 $1.92 2Q ,983,032 11,999,386 1,512,372 3,407,995 1,981,581 18,901, % 7.1% 35, , ,104 $1.86 Silicon Valley Research & Forecast Report Second Quarter Colliers International 11

12 69 countries $2.7 billion in annual revenue 2.0 billion square feet under management 15,400 professionals and staff FOR MORE INFORMATION: Reed Payne Executive Managing Director CA License No RESEARCH DEPARTMENT: Lena Tutko Research Manager COLLIERS INTERNATIONAL SILICON VALLEY 450 West Santa Clara Street San Jose, CA USA colliers.com/siliconvalley $116 billion in total transaction value *All statistics are for, are in U.S. dollars and include affiliates. About Colliers International Group Inc. Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 12,000 professionals. Colliers is the fastestgrowing publicly listed global real estate services and investment management company, with corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $20 billion of assets under management from the world s most respected institutional real estate investors. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row. Colliers is led by an experienced leadership team with a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years. For the latest news from Colliers, visit Colliers.com or follow us on and LinkedIn. colliers.com/siliconvalley Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.