Santa Rosa Office1355 North Dutton Avenue

Santa Rosa, CA 95401(707) 528-1400

Info@keegancoppin.com

Petaluma Office1201 N. McDowell Blvd.

Petaluma, CA 94954(707) 664-1400

KCPet@keegancoppin.com

Napa Office135 Camino Dorado, Ste 16

Napa, CA 94558(707) 252-1400

KCNapa@keegancoppin.com

Larkspur Office101 Larkspur Landing, Suite 112

Larkspur, CA 94939(415) 461-1010

KCMarin@keegancoppin.com

KEEGAN & COPPIN COMPANY, INC. O N C O R I N T E R N A T I O N A L

Commercial Real Estate Services

O N C O R I N T E R N A T I O N A L

2019

COMMERCIAL

REAL ESTATE

FORECAST

2019 will be much the same as 2018. While the GDP grew at 3.5% the last quarter of 2018 here in the North Bay, the economic engine continues to slow due to the fires of 2017. Also, the increasing risks of a national economic downturn will have a dampening effect on decision making.

Just as in residential, commercial property investment inventory – office, industrial, retail buildings – is probably the lowest it’s been in a decade.

Build-to-suit commercial/industrial buildings are being developed in Sonoma County, albeit at a very slow rate.

The market can absorb 1,000,000 sf a year of flex and industrial space in Sonoma County and less than one quarter of that is being built.

Office space development is at a standstill in Marin and Sonoma Counties with again a potential of 150,000 sf projected absorption for Sonoma and 100,000 sf for Marin in 2019.

The majority of leasing activity is from local government, the influx of contractors and post Firestorm services, healthcare and some winery related, and other professional sectors.

Industrial and flex will be the most in demand in 2019. Shortages of industrial space will show up in increased rents and more build-to-suits going forward. While industrial build-to-suits are still feasible in Sonoma County but not so with Marin’s lack of land and pricing.

Office and retail absorption will continue to moderate in 2019 as it did in 2018 in Sonoma County as many professionals have been affected by the October 2017 firestorms. Restaurants and retail sales have been affected as well and are slow to bounce back.

The activity in commercial real estate investment will also moderate in 2019, as we are at our lowest supply of commercial investments in a decade, and as interest rates continue to inch upward with the fixed Fed rates increasing for the balance of 2019, cap rates will increase along with interest rates, bringing down prices and discouraging sales.

NORTHBAY OVERVIEW - 2019 By: Al Coppin

NORTHBAY OVERVIEW (cont.)

Communities in the North Bay must begin to plan for job and economic growth.

The spark we need is for less regulation and more encouragement of industrial development in Sonoma County and office development in Marin County. The economy won’t continue to grow without developing and planning for future business centers and parks.

And business growth and job growth should be the mantra of the entire North Bay. Cities and Counties should lead the way in reducing regulation and spearheading lobbyists to fight the overwrought and unrealistic regulation in major areas of Santa Rosa for Wetlands and Tiger Salamander. The outrageous 2:1 land mitigation for Tiger Salamander requirement makes industrial and residential land infeasible to develop and hence will reduce the allure to locate in Sonoma County in the future.

Promoting one industry at the cost of others is another blunder by local Sonoma County municipalities. We should have an open forum on the kind of companies we want in all of the communities of the North Bay and what to do to provide the land for planned business centers. Otherwise the companies will not locate here and others will eventually locate elsewhere.

We need long term innovative planning and well thought out economic development strategies considering all of the ramifications, not short term decisions by municipal politicians without a full public forum.

The cultural and design trends of commercial buildings in the greater Bay Area tend to hit the North Bay last, but they are coming. Customized workplaces with collaborative areas and clustered common area amenities both within and outside of space will be in increasing demand. Co-working is another one of the fastest growing commercial disrupters combining design, services and collaboration to facilitate innovation and growth.

NORTH CORRIDOR/WINDSOR OVERVIEW

By: Shawn Johnson

The Santa Rosa North Corridor real estate office market showed an increase in vacancy over the past 12 months which resulted in a negative absorption of approximately 30,992 sq. ft. Office vacancy rates have risen with rates at 9% in the fourth quarter of 2018, up from 7.7% in the fourth quarter of 2017. As a consequence, office rental rates are declining due to the slower activity with Class A rates ranging from $1.85 to $2.05 per square foot full service, and Class B rates held with rates ranging from $1.45 to $1.65 per square foot full service. Office rental activity is modest but with no office development planned vacancy rates are holding at competitive levels as compared to other areas in the county.

Industrial real estate saw continued historic low vacancy rates which continue to spur increased values on land purchases. Industrial vacancy rates have dropped to all time lows reaching 1% in the fourth quarter 2018 down from 2% in the fourth quarter of 2017. Smaller industrial lot sales have been selling between $12.00 to $18.00 per square foot as compared to larger parcel sales in recent history that were priced $10.00 to $12.00 per square foot in recent years.

Industrial leasing has slowed drastically mostly due to a lack of available space. Rates range from $.80 to $1.15 per square foot NNN, depending on many factors such as size, age of building and product type. Industrial Build to Suits continued to be options for larger tenants looking for facilities but increased pricing in construction costs continues to negatively impact the negotiations between the developer and the tenant prospect. One project under construction is Billa Landing which has just completed the second of two 48,100 sq. ft. buildings with one of the two buildings leased to a single tenant and the other building in negotiations with a tenant for two thirds of the second building.

In 2018 there were some significant transactions completed in the area. PG&E sold a 3.25 acre parcel to a local winery for approx. $15.00 psf on Mitchell Lane in Windsor. The owner of the Westwind Business Park carved off a lot at the corner of Airport Blvd and Laughlin Blvd and sold 3.5 acres to a hotel developer. Conde and Associates started construction on a new 56,000 sq. ft. office warehouse facility for Encore Event Rentals in the Conde Business Park at Conde Lane and American Way. All American Containers leased 48,100 sq. ft. at Billa Landing. Golden State Cider lease 26,200 sq. ft. at 1451 Grove Street in Healdsburg. Russian River Brewery opened their new production and events facility off Conde Lane in Windsor.

NORTH CORRIDOR/WINDSOR OVERVIEW

(Cont.)

It is clear that the fires from October 2017 continue to create uncertainty with regard to available labor and pricing for construction. This has impacted the market significantly and nothing appears to be changing in the immediate future. The County’s newly adopted cannabis ordinance seems to have had little impact on the region mostly due to the fact industrial vacancy is very low and the timeline for obtaining the various cannabis use permits is longer than other jurisdictions. The expanding Sonoma County Airport continues to be a bright spot with increased flights and destinations, which is having a positive impact.

SANTA ROSA OVERVIEW By: Dave Peterson

Industrial Market Overview

The Sonoma County industrial market is the strongest we have seen in many years and currently is the tightest market of all property types. This is a result of years of low rents that did not justify new construction. We are seeing more companies considering build to suit opportunities as the inventory of existing buildings does not meet the needs of tenants. The approval to legalize cannabis by voters in November 2016 and the acceptance and encouragement of the use by the Santa Rosa City Council has compounded the inventory problem throughout Sonoma County. Properties located in the cannabis permitted Light Industrial zoning areas in Santa Rosa are often commanding prices that are higher than office buildings. Over the past few years, we have seen prices increase from roughly $80psf to over $250psf in some instances. Given the lack of supply and cannabis demand pressure, it is currently the norm to see industrial properties outside of cannabis approved areas priced in the $180-$200psf range. These prices are virtually equivalent to the prices of office buildings which are much more expensive to construct.

The industrial vacancy rate in the North Corridor (Airport/Windsor) area at the end of the 4th Quarter 2018 was 1.0%. This is the lowest vacancy for industrial buildings in any Sonoma County submarket. It’s closest and main competition is Santa Rosa which had a vacancy of 5.4% at the end of the 4th Quarter. It should be noted that industrial users will typically also consider other jurisdictions throughout the County. However, those markets are just as tight with Rohnert Park at 5.2%, Petaluma at 7.3%. The County overall is at a 4.7% vacancy and a typical market vacancy in equilibrium is around 10%. The low inventory is leading to multiple lease offers on good quality industrial spaces. This demand is also pushing rents up by 20%-25% above 2017 levels in most instances. Rental rates are currently ranging from $.95-$.1.30 per square foot gross (equivalent to $.85-$1.15psf NNN). However, those properties located in the IL zones with owners will to accept cannabis uses are able to achieve rents of $1.50-$3.00+ per square foot gross.

We anticipate the vacancy rate to be reduced slightly over 2019. With rents increasing and the extremely tight supply, we were at a point in 2018 where speculative construction started to make sense. We anticipate continued increase in demand, but these new properties being added to the inventory in the North Corridor are likely to negate much of the positive vacancy absorption we would have had without the new buildings coming to market.

SANTA ROSA OVERVIEW (cont.)

The first speculative industrial project built in +/-15 years is Billa Landing consisting of two 48,100sf buildings adjacent to the Airport Museum on North Laughlin Road. The first building was completed in December 2018 and the second building should be complete in early February 2019. The first building was leased prior to completion to Veritiv/All American Container in September 2018. The 2nd building has a lease pending for approx. 30,000sf. There are several 18,000sf tenants vying for the remainder of the second building. The developer plans to pull permits in early February for its next building, a 70,000sf warehouse with expected completion in the 1st Quarter 2020.

In addition to the Billa Landing project, Denbeste is in the planning stages to build two buildings consisting of approx. 25,000sf and 30,000sf. These buildings are located on Skylane Blvd and Kittyhawk Drive. They anticipate 1st Quarter 2020 completion with asking rents in the $1.20-$1.30 gross range. In addition, the Calletti land consisting of roughly 45 acres fronting Hwy 101 and Shiloh Road is on the market for sale. It was recently in escrow and fell through, so it isn’t likely that we will see anything new being built there for 2-3 years.

Office Market Overview

The Santa Rosa office market has continued to hold steady after strengthening throughout 2017 and 2018. Tenant demand in the office sector has slowed slightly, but we currently don’t see signs of companies retrenching. Vacancies are down slightly, and rental rates have held on lower quality properties and increased slightly on the highest quality buildings as available inventory is lacking.

We believe the reasoning for the flattening is related to the labor market. Most transactions in the marketplace have been lateral moves without much growth in square footage. The unemployment rate in Sonoma County was 2.6% in December 2018 and we hear that companies are struggling to find employees they need to grow their businesses.

The vacancy rate for Santa Rosa office space stood at 10.9% at the end of the 4th Quarter of 2018 down from 11.7% at the end of the 4th Quarter 2017. This decrease in vacancy represents approximately 60,000 square feet of positive absorption. Based on current tour activity, we anticipate 1st Quarter 2018 vacancies to remain relatively flat and a similar reduction of approx. .5% to 1% in vacancy by the end of 2019.

We are currently seeing Class A office properties in the best locations commanding rents above $2.25-$2.50 per square foot fully serviced. The lack in inventory of these buildings provides the owners the ability to hold firm on their pricing and offer less in terms of lease incentives.

SANTA ROSA OVERVIEW (cont.)

Office rents in lower quality properties are in the $1.80-$1.95 per square foot full service levels as property owners find themselves on much stronger footing than previous years. It should be noted that many of these lower tier properties are simply obsolete and don’t meet the quality expectations of tenants. That is leading to some tenants circling the market waiting for the right opportunity, especially in the smaller segment of the market of 500-1,500sf.

Tenant inducements such as free rent can still be negotiated albeit on much lower levels than previously obtained by tenants over the past few years. The free rent is being used by landlords to help bridge the gap between expectations and provide lower “effective rents” to tenants while keeping the higher lease contract rates. While in the past up to six plus months of free rent could be negotiated, we are seeing free rent being reduced to one or possibly two months at the maximum.

In addition, turn-key tenant improvement packages are still prevalent in office lease transactions as many landlords can obtain better contractor pricing than tenants based on relationships. However, we are witnessing tremendous upward pressure on subcontractor pricing resulting from the lack of labor attributed to the reconstruction of residential properties impacted by the 2017 fires. These increases are likely to have an impact on rental rates in the near future as well as require tenants to fund some of the improvement costs. This is especially true on shorter term leases that do not provide a long enough amortization period of the costs over the lease term.

The purchase market for owner/user office buildings has slowed slightly resulting more from a lack of supply than that of lower buyer demand, which remains strong. Interest rates have risen slightly over the past 12 months but continue to be at levels that encourage companies to own their real estate. This low cost of funds continues to provide companies the ability to purchase and secure long-term financing that often results in a lower cost to own a building than leasing it on a monthly cash basis and even more so when the tax advantages of ownership (depreciation) are considered. The lack of supply and continued demand often leads to vacant properties being valued higher on a per square foot basis than leased properties at current capitalization rates of roughly 6.25%-7%.

ROHNERT PARK/COTATIOVERVIEW

By: Kevin Doran

We are well on our way to a positive start in 2019. Most sectors in the commercial real estate market in the Rohnert Park/Cotati areas are showing growth and increased demand.The market continues to show positive momentum for retail as well as industrial facilities. Leasing activity and occupancy levels continue to modestly improve as they did in 2018. Occupancy increased in 2018 and the trend of occupants acquiring their own buildings continues.

Rohnert Park/Cotati sales and rental prices, like many other Sonoma County cities, have been firming and landlord concessions remain steady. 2019 remains a competitive year for investors for commercial property investments. The quality of low inventory allows key sellers to have advantage to sell their property in a hot market over many properties. The top property types are multi-tenant industrial or strong retail properties. These will continue to be in low supply and high demand. Multi-family apartments and other housing related properties are still strong, stable investments with low return on investments.

A notable development in 2019 is the prior State Farm Headquarters site. The site will be developed into a large mix use project called Station Avenue/Rohnert Park. This site will continue to be redeveloped into 5.4 acres of parks and gardens and a mix of 140,000 sf of cafes, restaurants, and specialty retail shop. Station Avenue will be offering 460 apartments on site, a 156 key hotel and 130,000 sft of office space.

After the horrific fires in the fourth quarter of 2017, Keysight Technology partially vacated their office campus in Fountaingrove, Santa Rosa. They temporarily leased over 100,000± sf in SOMO Village, the former Hewlett Packard Campus. The majority of the temporary office tenants that were leasing short term office space at SOMO Village (100,000± sf) and at 5789 State Farm Drive have since vacated their office space. Hence the vacancy rate for the office submarket spiked to 26.1%.

Rents continue to be flat. The market for office rents are still in the range of $1.35 - $1.80 psf for full service. The rents for industrial space have increased approximately 20% from $.68 - $.75 to $.90 - $1.05 per square foot. It’s a great time for sellers to take advantage of the interest and potential to sell at an all time high.

Retail submarket vacancy increased during the fourth quarter of 2018. It rose 1% to 7.4%. Office property vacancy still remains high at approximately 26.1%; industrial property vacancy remains healthy at 5.2%.

ROHNERT PARK/COTATIOVERVIEW

(cont.)

The lending market is competitive, but interest rates are increasing slowly for owner users and investors. This will help continue to increase the sale activity and volume of buildings sold.

It appears the demand is still high for smaller industrial incubator units, industrial space ranging between 3,000 and 10,000 feet, and smaller retail space. Vacancy rates in industrial and retail are firming and continue to decline. There continue to be no spec office, industrial, or retail buildings being developed. There will continue to be demand for industrial space for the near and foreseeable future.

The office market has remained relatively flat and is experiencing minimal positive absorption; the office market will continue to underperform the industrial and retail market due to lack of new jobs coming into this submarket. We will continue to see tenants test the market or exercise other landlords for a flight to new space with more favorable terms.

With the array of options and positive outlook for the future, Rohnert Park/Cotati is an excellent location to consider for your commercial real estate needs.

NAPA COUNTY OVERVIEW By: Mike Miller

Like much of the North Bay, 2019 looks to be a continuing growth orientated year for the commercial real estate market in Napa County. Generally speaking, the market has maintained a dramatic pace over the last few years. Strong tenant demand, historically low interest rates and a level of discipline by lenders and developers have kept the investment engine running and supply and demand factors in balance. There are several encouraging signs that the market should continue to grow in 2019, even if at a somewhat slower pace. Although some new industries have built in the South Napa County area over the last decade, historically the driving force for commercial real estate and growing tourism industry has been and remains wine industry related.

Many commercial real estate projects begun over the last few years have been completed and have acquired good tenants which keep their vacancy rates relatively low. Projects recently completed and now adding additional phases include Orchard Partners lease of their 646,000 square foot, first of five buildings (2.9Msf), to Ikea in its 218 acre Napa Logistics Park, Napa Junction, a mixed use development and super Wal-Mart store in American Canyon and in the City of Napa the Oxbow Public Market.

Beginning a few years ago, several new businesses begin moving into the downtown area of Napa and the languishing Napa Town Center was leveled for new construction. Opened in the spring of 2018, the First Street Napa project has creating a shopping, office and lodging complex with 325,000sf of space with 45 stores, restaurants and the recently opened 5 story 183 room four-star luxury Archer Hotel. The 98,000sf downtown COPIA site has been purchased by the Culinary Institute of America and is already becoming a significant addition to the many new downtown tourist attractions. Downtown Napa has become a major tourist destination that has changed the character of the entire Napa Valley with its new hotels, restaurants, retail shops and over 30 wine tasting venues.

Napa County sales and rental prices, like many other North Bay counties, have been firming and landlord concessions leveling off. Fortunately, there are currently several pending projects that could add upwards of 2 million square feet of new large warehouse space by the end of 2019. The vacancy rate for Napa County industrial and office space is between 6 to 7% with retail vacancy around 3%.

In summary, if U.S. and California state economic activity continues to grow and job growth remains firm, Napa County commercial real estate and in particular industrial land and buildings, should be well positioned to continue the current growth trend and offers investors some interesting opportunities. With low returns on bonds and other fixed interest investments, increased tourism and a stable economy, Napa commercial real estate should remain a good investment opportunity for the next several years.

PETALUMA OVERVIEWBy: James Manley

Petaluma is active for all sectors of commercial real estate. In some, the demand is far greater than supply.

Since the beginning of the second quarter of 2018 and continuing to March 1, 2019 63 leases were signed for Petaluma commercial properties totaling +/- 450,000 SF, of which 135,000+/- sf have taken occupancy since the beginning of 2019. Petaluma’s entire commercial base (Office, Retail, Industrial, and Flex space) is estimated at just over 12,100,000 SF. This shows a turnover of 3.7% of the entire base.

Sales have been active. New York Life’s 1490 and 1470 Cader Lane, totaling 174,000 +/- square feet of class A Industrial both sold over the summer for $201/psf and $168/psf respectively. All told, there were ten Industrial sales, eight land sales, and 14 office sales. While the land and industrial sales included some impressive transactions, the office sales were primarily in the incubator or small user/investor range with a strong performance by office condominiums.

Petaluma’s Office availabilities outpace demand. At the end of 2018 our office vacancy stood at 11.6%. This number, along with higher end offices generating $2.25 per square foot full service, is virtually unchanged from the end of 2017. The deals happening are not altering the office market. Spaces are refreshed to serve specific tenant requirements, particularly for the higher end users. Current strike points for office sales seems to have leveled out around $238/psf. There are currently in excess of 75 office spaces available for lease in Petaluma. There is only one space openly marketed for sale, but it is located in a flood prone area.

As of this writing there are 13 industrial vacancies in Petaluma for lease and/or sale. Three of them are at Southpoint Business Park and account for 225,000 +/- square feet out of 330,000 +/- square feet available. Approximately 43,000 SF on Southpoint is closing escrow. Out of the remaining 105,000 SF, two buildings almost equally account for 47,000 SF (one of them on the flood-prone part of Industrial Avenue). Another 11,700 +/- SF is in escrow. Users looking for 5-6k sf have two choices. Users looking for 1500 to 3000 have three choices. Virtually all are above $1.10 psf. A bargain compared to Marin.

Construction is expensive with skilled labor in high demand. This should level out once the area’s residential projects near completion. People want to come to Petaluma and Petaluma wants to house them. Many residential projects are in various stages of construction while some continue to navigate the entitlement and feasibility waters. Some projects are fully stalled as developers want to see what happens with the current residential inventory.

Going forward, and subject to the standard crystal ball disclaimer, I expect office demand to remain flat and industrial demand greater than supply. The days of the drafty, dark warehouse are long behind us. Nice warehouses are bright, comfortable, productive, and in demand. Once they’re up, they’re leased.

Dear Petaluma Developers and CommDev: Feed your market; get some Industrial space built.

MARIN COUNTY OVERVIEWBy: Jeffrey Wilmore

Let the good times roll or are we on the home stretch? There has been a lot of mileage put on this economic engine since August of 2009 and the emergence of the recession, but consumer confidence still has good traction and that momentum will drive consumer spending and business investments through 2019. However, some of the factors that have contributed to the steady economic growth such as government spending, the fiscal stimulus income lifting effects of the tax cuts will dissipate in 2019 rendering a potentially less robust expansion than 2018. While the stalemate in Washington with congressional gridlock, the wild oscillations in the stock market, escalating trade tensions along with natural disasters that have occurred in the North Bay, these negative impacts have not generated the economic disruption that one would expect to the commercial real estate market. It was feared that it could create uncertainty that could hinder consumer confidence, but the local economy has remained resilient and economically competitive.

California’s GDP is out pacing the national rate fueled by the technology sector and Marin County is outperforming California with its low unemployment due to its economic diversity. Healthcare, construction, financial services and consumer goods bolster employment and economic growth in Marin County. This diversification is paramount if there is another fallout in the technology sector.

San Francisco has 7.7 million square feet of office space currently under construction throughout the metropolitan area and 78% is already preleased. The cost of new construction has become astronomical, and class A office rents have surpassed peak rents established at the end of the dot-com boom of 2000 to $7.11 per square foot on a monthly basis. Marin County in comparison has a total inventory of approximately 7.5 million square feet with class A office rents averaging in the $3.50 per square foot range, with exceptions in Greenbrae, Larkspur, Mill Valley and Sausalito where asking rents have increased to as high as $6.00 per square foot at one business park. This should be a draw to San Francisco’s businesses, but until Marin can complete their transit system from the ferry building in San Francisco to the North we have not seen much migration from businesses across the Bay. To the transit’s credit, SMART has surpassed the one million passenger mark since its inception in June 2017.

Another aspect of potential future growth that 30 other states have endorsed and benefited from is the increase in tax revenue from the cannabis industry. Reports show that this industry could generate an additional $105 billion in revenues between 2019 and 2025 and add 654,000 jobs and 1 million by 2025 nationally. Medical marijuana is still banned in Marin County’s cities but some, like San Rafael and Larkspur, are gradually adopting local marijuana regulation. Though in Sonoma County, one year after the legalization of Marijuana, the thought that legalized marijuana would fill the tax coffers and tamp down the illegal black-market trade, this has not materialized. This is mostly due to the high taxes on sales and unclear rules and regulation and risk of federal shutdown. Marin County is many years away from the tax benefits of this growing industry. A study in Colorado has found that legalization of marijuana led to 6% increase in property values.

MARIN COUNTY OVERVIEW Office (cont.)

Leasing activity was light but steady in the fourth quarter and there is no indication that this activity will change in the coming months. The county-wide vacancy rate for office buildings is up this year at approximately 16% from 10.5%, after an adjustment for a couple large blocks of vacant office space. The largest is the vacant former Firemen’s Fund campus in Novato. The site is designed for business and office use, but Marin has little need for more office. American Assets Trust, owner of the 710,000 square foot three building campus have indicated that a redevelopment plan for the property was a possibility. They have had discussions with the City of Novato about applying for rezoning for residential, hotel and restaurant projects. The only positive aspect of these large blocks of vacant office space is that they are available for corporate expansion and could draw business to Marin and basically win by default. Unfortunately, the lack of available housing will create difficulties in the attraction of a substantial work force occupant.

Commercial real estate professionals all too often are afflicted by a belief that trends and patterns today will con-tinue, even though these patterns of recovery and expansion are prone to disruption. However, it’s unquestionable that the expansion is carrying steady momentum into its tenth year, with few signs of trouble on the horizon. 2019 is starting on a note of steady growth and favorable business conditions.

MARKET TRENDSSonoma County

SUBMARKET BUILDINGS PLANNED (Sq. Ft.) VACANCY RATE

Bldg. Base Direct Vacancy Sublease Vacancy Total Vacancy 4th Qtr. 2018Santa Rosa 10,337,727 503,585 65,557 569,142 0 5.5%North Corridor(Airport Area, Windsor, Healdsburg) 5,881,383 56,296 0 56,296 0 1.0%Rohnert Park 3,170,491 157,014 8,000 165,014 0 5.2%Petaluma 5,523,338 326,214 76,500 402,714 0 7.3%SONOMA COUNTY TOTALS 24,912,939 1,043,109 150,057 1,193,166 0 4.8%

AVAILABLE SPACE-INDUSTRIAL

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Bldg. Base Direct Vacancy SubleaseVacancy

Total Vacancy

Santa Rosa

North Corridor(Airport Area, Windsor,Healdsburg)

Rohnert Park

Petaluma

SONOMA COUNTY TOTALS

SUBMARKET BUILDINGS PLANNED(Sq. Ft.) VACANCY RATE

Bldg. Base Direct Vacancy Sublease Vacancy Total Vacancy Buildings Planned 4th Qtr. 2018Santa Rosa 7,402,625 743,233 63,257 806,490 91,800 10.9%North Corridor (Airport, Windsor, Healdsburg) 2,366,521 207,690 5,021 212,711 551,396 9.0%Rohnert Park 1,462,117 353,172 28,693 381,865 0 26.1%Petaluma 3,418,801 397,071 1,168 398,239 38,904 11.6%SONOMA COUNTY TOTALS 14,650,064 1,701,166 98,139 1,799,305 682,100 12.3%

AVAILABLE SPACE-OFFICE

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Bldg. Base DirectVacancy

SubleaseVacancy

Total Vacancy

Santa Rosa

North Corridor(Airport, Windsor,Healdsburg)Rohnert Park

Petaluma

MARKET TRENDSMarin County

SUBMARKET BUILDINGS PLANNED VACANCY RATEBldg. Base Direct Vacancy Sublease Vacancy Total Vacancy 4th Qtr. 2018

Sausalito 455,000 6,925 0 6,925 0 1.5%Mill Valley 126,000 0 0 0 0 0.0%Corte Madera 295,500 0 0 0 0 0.0%Bahia de Rafael 698,000 12,662 0 12,662 0 1.8%San Rafael 3,091,188 54,581 0 54,581 0 1.8%Novato 1,778,659 53,623 0 53,623 0 3.0%MARIN COUNTY TOTALS 6,444,347 127,791 0 127,791 0 2.0%

AVAILABLE SPACE - INDUSTRIAL

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Bldg. Base Direct Vacancy SubleaseVacancy

Total Vacancy

Sausalito

Mill Valley

Corte Madera

Bahia de Rafael

San Rafael

Novato

MARIN COUNTY TOTALS

SUBMARKET BUILDINGS PLANNED VACANCY RATEBldg. Base Direct Vacancy Sublease Vacancy Total Vacancy 4th Qtr. 2018

Sausalito 527,760 45,796 51,663 97,459 0 18.5%Tiburon 17,715 1,577 0 1,577 0 8.9%Mill Valley 346,515 75,995 4,240 80,235 0 23.2%Corte Madera 411,168 19,216 0 19,216 0 4.7%Larkspur-Greenbrae 638,442 52,616 1,750 54,366 0 8.5%San Rafael 3,057,030 351,650 128,379 480,029 0 15.7%Novato 2,597,381 1,110,277 7,042 1,117,319 0 43.0%MARIN COUNTY TOTALS 7,596,011 1,657,127 193,074 1,850,201 0 24.4%

AVAILABLE SPACE-OFFICE

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Bldg. Base Direct Vacancy SubleaseVacancy

Total Vacancy

Sausalito

Tiburon

Mill Valley

Corte Madera

Larkspur-Greenbrae

San Rafael

Novato

MARIN COUNTY TOTALS

DEMOGRAPHICS

SONOMA COUNTY

POPULATION: 504,613 UNEMPLOYMENT RATE: 2.6%

MAJOR EMPLOYERS:

Kaiser Permanente St. Joseph Health

Keysight Technologies Jackson Family Wines

Sutter Santa Rosa Regional Hospital Amy’s Kitchen

Oliver’s Market Hansel Auto Group

Redwood Credit Union Exchange Bank

NAPA COUNTY

POPULATION: 141,784 UNEMPLOYMENT RATE: 3.3%

MAJOR EMPLOYERS:

Adventist Health St. Helena The Maritage Resort and Spa

Silverado Resort Boral Stone Products

G.L. Mezzetta, Inc. Meadowood Napa Valley Carneros Resort and Spa

Culinary Institute of America Kaiser Permanente – Napa

Pacific Union College

MARIN COUNTY

POPULATION: 263,262 UNEMPLOYMENT RATE: 2.2%

MAJOR EMPLOYERS:

Kaiser Permanente San Rafael Marin General Hospital

Glassdoor Marin Community Clinics

Dominican University of California Novato Community Hospital

Community Action Marin W. Bradley Electric, Inc.

Bradley Real Estate Hospice by the Bay