Central Coast Office Report Q1-2015_

Offi ce ReportCentral Coast | First Quarter 2015

Building Avg. Asking

Base Direct Sublease Total Q1-15 Q1-14 Rate (FS)

Scotts Valley 2,070,573 455,792 30,900 486,692 23.5% 25.7% $1.87

Santa Cruz 3,326,856 317,701 37,871 355,572 10.7% 11.0% $1.89

Mid County 836,920 48,534 7,813 56,347 6.7% 7.0% $1.94

Watsonville 1,942,346 110,906 2,000 112,906 5.8% 6.5% $1.21

Santa Cruz County 8,176,695 932,933 78,584 1,011,517 12.4% 13.2% $1.81

Carmel / Pacific Grove 459,006 51,264 0 51,264 11.2% 11.7% $1.84

Monterey 3,583,796 428,841 8,089 436,930 12.2% 10.6% $1.86

Sand City / Seaside / Marina 366,819 41,955 0 41,955 11.4% 12.4% $1.36

Salinas / Castroville 3,247,332 320,513 4,930 325,443 10.0% 19.0% $1.56

Monterey Coutny 7,656,953 842,573 13,019 855,592 11.2% 14.3% $1.72

Central Coast Totals 15,833,648 1,775,506 91,603 1,867,109 11.8% 13.7% $1.77

Vacancy by Area

Average Asking Rate (FS) by Area

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SubmarketAvailable Space

Market SummaryVacancy

$1.87 $1.89 $1.94

$1.21

$1.84 $1.86

$1.36

$1.56$1.68

$1.94$1.83

$1.21

$1.89 $1.90

$1.47$1.60

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

Scotts Valley Santa Cruz Mid County Watsonville CarmelPacific Grove

Monterey Sand City / SeasideMarina

Salinas /Castroville

Q1-15 Q1-14

23.5%

10.7%

6.7%5.8%

11.2%12.2% 11.4%

10.0%

25.7%

11.0%

7.0% 6.5%

11.7%10.6%

12.4%

19.0%

0%

5%

10%

15%

20%

25%

30%

35%

Scotts Valley Santa Cruz Mid County Watsonville CarmelPacific Grove

Monterey Sand City / SeasideMarina

Salinas /Castroville

Q1-15 Q1-14

Office Market ReportCentral Coast • First Quarter 2015

Historical Summary2011 2012 2013 2014 QTD-2015

Vacancy Rate 15.9% 15.1% 14.0% 12.5% 12.4%

Avg. Asking Rate (FS) $1.74 $1.70 $1.79 $1.80 $1.81

Gross Absorption 385,368 413,058 386,304 383,984 100,935

Net Absorption -135,587 71,970 87,180 125,979 10,881

New Construction 0 0 0 5,021 0

Vacancy Rate 9.3% 13.5% 15.1% 9.3% 11.2%



Net Absorption -32,362 -323,857 -126,340 297,875 5,208

New Construction 15,000 0 0 0 0

Vacancy Rate 12.7% 14.3% 14.5% 11.9% 11.8%



Net Absorption -167,949 -251,887 -39,160 423,854 16,089

New Construction 15,000 0 0 5,021 0

Vacancy & Average Asking Rate Trend

Historical Absorption & New Construction Trend

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Total Central Coast

Monterey County

Santa Cruz County

11.2% 11.6%

12.7%14.3%

14.5%

11.9%

$1.70

$1.71

$1.72

$1.73

$1.74

$1.75

$1.76

$1.77

$1.78

0%

2%

4%

6%

8%

10%

12%

14%

16%

2009 2010 2011 2012 2013 2014

Vacancy Avg. Asking Rate

-0.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

2011 2012 2013 2014 QTD-2015

Square

Feet in

Millions

Gross Absorption Net Absorption New Construction


Total MarketQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015

Total Building Base 15,828,627 15,833,648 15,833,648 15,833,648 15,833,648

Direct Availablities: 1,805,923 1,840,627 1,784,259 1,785,937 1,775,506

Sublease Availablities: 369,307 363,376 352,513 97,261 91,603

All Types 2,175,230 2,204,003 2,136,772 1,883,198 1,867,109

Growth Rate: 0.8% -0.2% 0.4% 1.6% 0.1%

Vacancy: 13.7% 13.9% 13.5% 11.9% 11.8%

Gross Absorption: 192,322 192,640 161,380 384,508 131,242

Net Absorption: 126,801 -23,752 67,231 253,574 16,089


Completed New Construction: 0 5,021 0 0 0

Availabilities by Size:

0 - 2,499 SF 349 336 323 315 343

2,500 - 4,999 SF 112 114 112 105 96

5,000 - 7,499 SF 40 36 38 40 41

7,500 & Up 60 58 53 59 58

Total Availabilities: 561 544 526 519 538


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12.6%

13.0%

15.1%

14.3%14.1%

15.1%14.8%

14.5%

13.7%13.9%

13.5%

11.9% 11.8%

$1.66

$1.68

$1.70

$1.72

$1.74

$1.76

$1.78

6%

8%

10%

12%

14%

16%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15

Vacancy Avg. Asking Rate (FS)


Santa Cruz CountyQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015


Direct Availablities: 1,017,474 975,118 979,105 938,156 932,933


All Types 1,079,760 1,032,263 1,029,034 1,022,398 1,011,517

Growth Rate: 0.8% 0.6% 0.0% 0.1% 0.1%

Vacancy: 13.2% 12.6% 12.6% 12.5% 12.4%


Net Absorption: 63,596 52,518 3,229 6,636 10,881




0 - 2,499 SF 146 134 132 125 130

2,500 - 4,999 SF 46 42 50 45 41

5,000 - 7,499 SF 20 16 22 21 25

7,500 & Up 38 34 34 33 34



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15.2%

16.1%16.3%

15.1%

14.2%

15.8%

14.1% 14.0%

13.2%

12.6% 12.6% 12.5% 12.4%

$1.62

$1.64

$1.66

$1.68

$1.70

$1.72

$1.74

$1.76

$1.78

$1.80

$1.82

6%

8%

10%

12%

14%

16%

18%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Scotts ValleyQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015


Direct Availablities: 525,387 515,644 507,626 492,038 455,792


All Types 530,287 520,544 517,840 528,252 486,692

Growth Rate: 1.3% 0.7% 0.1% -0.5% 2.0%

Vacancy: 25.7% 25.1% 25.0% 25.5% 23.5%


Net Absorption: 27,505 14,764 2,704 -10,412 41,560




0 - 2,499 SF 21 19 18 17 20

2,500 - 4,999 SF 21 20 19 14 12

5,000 - 7,499 SF 8 7 8 5 5

7,500 & Up 22 19 21 19 18



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30.6%

32.6%

33.4%

30.1%

28.0%

30.6%

26.5%27.0%

25.7%25.1% 25.0%

25.5%

23.5%

$1.50

$1.55

$1.60

$1.65

$1.70

$1.75

$1.80

$1.85

$1.90

15%

20%

25%

30%

35%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Santa CruzQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015




All Types 364,950 347,176 355,114 335,306 355,572

Growth Rate: 0.4% 0.5% -0.2% 0.6% -0.6%

Vacancy: 11.0% 10.4% 10.7% 10.1% 10.7%


Net Absorption: 12,089 17,774 -7,938 19,808 -20,266


Completed New Construction: 0 0 0 0 0


0 - 2,499 SF 55 51 48 46 48

2,500 - 4,999 SF 12 11 19 18 16

5,000 - 7,499 SF 8 6 8 10 13

7,500 & Up 12 11 11 11 11



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10.8%

11.4%11.6%

11.0%

10.6%

12.9%

11.3% 11.3%

11.0%

10.4%10.7%

10.1%

10.7%

$1.70

$1.75

$1.80

$1.85

$1.90

$1.95

$2.00

$2.05

$2.10

6%

8%

10%

12%

14%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Mid County (Aptos, Capitola, Live Oak, Soquel)QUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015

Total Building Base 836,920 836,920 836,920 836,920 836,920



All Types 58,872 55,122 56,237 57,875 56,347

Growth Rate: 0.4% 0.4% -0.1% -0.2% 0.2%

Vacancy: 7.0% 6.6% 6.7% 6.9% 6.7%


Net Absorption: 3,350 3,750 -1,115 -1,638 1,528




0 - 2,499 SF 38 36 36 33 34

2,500 - 4,999 SF 2 1 1 2 2

5,000 - 7,499 SF 1 1 1 1 2

7,500 & Up 0 0 0 0 0



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9.6%

10.6%

11.3%

9.8%

9.3%

7.4%

7.7%

7.4%

7.0%

6.6%6.7%

6.9%6.7%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

6%

8%

10%

12%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



WatsonvilleQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015




All Types 125,651 109,421 99,843 100,965 112,906

Growth Rate: 1.1% 0.8% 0.5% -0.1% -0.6%

Vacancy: 6.5% 5.6% 5.1% 5.2% 5.8%


Net Absorption: 20,652 16,230 9,578 -1,122 -11,941




0 - 2,499 SF 32 28 30 29 26

2,500 - 4,999 SF 11 10 11 11 9

5,000 - 7,499 SF 3 2 5 5 5

7,500 & Up 4 4 2 3 3



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8.7% 8.8%

8.3% 8.3%

7.9%

8.6%8.5%

7.5%

6.5%

5.6%

5.1% 5.2%

5.8%

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

$1.20

$1.30

$1.40

0%

2%

4%

6%

8%

10%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Monterey CountyQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015




All Types 1,095,470 1,171,740 1,107,738 860,800 855,592

Growth Rate: 0.8% -1.0% 0.8% 3.2% 0.1%

Vacancy: 14.3% 15.3% 14.5% 11.2% 11.2%


Net Absorption: 63,205 -76,270 64,002 246,938 5,208




0 - 2,499 SF 203 202 191 190 213

2,500 - 4,999 SF 66 72 62 60 55

5,000 - 7,499 SF 20 20 16 19 16

7,500 & Up 22 24 19 26 24



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9.9% 9.8%

13.8%13.5%

14.0%

14.4%

15.7%

15.1%

14.3%

15.3%

14.5%

11.2% 11.2%

$1.66

$1.68

$1.70

$1.72

$1.74

$1.76

$1.78

$1.80

$1.82

6%

8%

10%

12%

14%

16%

18%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Carmel / Pacific GroveQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015



Sublease Availablities: 0 0 0 0 0

All Types 53,763 55,023 54,042 51,624 51,264

Growth Rate: -1.2% -0.3% 0.2% 0.5% 0.1%

Vacancy: 11.7% 12.0% 11.8% 11.2% 11.2%

Gross Absorption: 940 7,225 3,771 4,828 5,029

Net Absorption: -5,577 -1,260 981 2,418 360




0 - 2,499 SF 35 36 32 28 38

2,500 - 4,999 SF 7 7 7 6 5

5,000 - 7,499 SF 0 0 0 0 0

7,500 & Up 0 0 0 0 0



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19.9%

21.4%

19.5%

16.7%

14.4%

13.6%

12.0%

10.5%

11.7%12.0%

11.8%

11.2% 11.2%

$1.70

$1.75

$1.80

$1.85

$1.90

$1.95

$2.00

$2.05

$2.10

8%

10%

12%

14%

16%

18%

20%

22%

24%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



MontereyQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015




All Types 378,248 437,636 405,347 453,333 436,930

Growth Rate: 1.8% -1.7% 0.9% -1.3% 0.5%

Vacancy: 10.6% 12.2% 11.3% 12.6% 12.2%


Net Absorption: 66,293 -59,388 32,289 -47,986 16,403




0 - 2,499 SF 90 92 87 80 84

2,500 - 4,999 SF 32 37 33 36 35

5,000 - 7,499 SF 6 6 5 5 5

7,500 & Up 8 12 10 13 14



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10.1%9.9%

10.8%

10.1%

9.5%

10.4%

13.3%

12.4%

10.6%

12.2%

11.3%

12.6%

12.2%

$1.80

$1.85

$1.90

$1.95

$2.00

6%

8%

10%

12%

14%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Sand City / Del Rey Oaks / Seaside / MarinaQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015



Sublease Availablities: 2,094 2,094 0 0 0

All Types 45,594 52,156 41,417 42,690 41,955

Growth Rate: -1.4% -1.8% 2.9% -0.3% 0.2%

Vacancy: 12.4% 14.2% 11.3% 11.6% 11.4%

Gross Absorption: 650 12,846 10,749 0 735

Net Absorption: -5,255 -6,562 10,739 -1,273 735




0 - 2,499 SF 20 18 18 18 24

2,500 - 4,999 SF 8 7 4 3 3

5,000 - 7,499 SF 3 3 1 2 2

7,500 & Up 1 1 0 1 1



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7.8%

8.7%

11.7%

9.9%

10.4%10.6%

9.5%

11.0%

12.4%

14.2%

11.3%

11.6%11.4%

$1.15

$1.20

$1.25

$1.30

$1.35

$1.40

$1.45

$1.50

$1.55

6%

8%

10%

12%

14%

16%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Salinas / CastrovilleQUARTER Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015




All Types 617,865 626,925 606,932 313,153 325,443

Growth Rate: 0.2% -0.3% 0.6% 9.0% -0.4%

Vacancy: 19.0% 19.3% 18.7% 9.6% 10.0%


Net Absorption: 7,744 -9,060 19,993 293,779 -12,290




0 - 2,499 SF 58 56 54 64 67

2,500 - 4,999 SF 19 21 18 15 12

5,000 - 7,499 SF 11 11 10 12 9

7,500 & Up 13 11 9 12 9



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8.5%8.1%

16.6%

17.2%

19.3% 19.4% 19.4% 19.3%19.0%

19.3%

18.7%

9.6%10.0%

$1.54

$1.56

$1.58

$1.60

$1.62

$1.64

$1.66

$1.68

6%

8%

10%

12%

14%

16%

18%

20%

22%

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15



Disclaimer: The information contained herein while not guaranteed has been secured by sources we deem reliable. All information should be verified prior to lease or sale.

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Office Report

Central Coast

DefinitionsClass A ProductSteel and concrete construction, built after 1980, quality tenants, excellent amenities & premium rents.

Class B ProductBuilt after 1960, fair to good finishes & wide range of tenants.

Total Building BaseTotal of all Class A, Class B and Office Flex buildings.

Direct AvailabilitiesTotal square footage being marketed for lease by landlord available within 90 days. This may include availabilities with pending leases.

Sublease Availabilities Total square footage being marketed for lease by sublessor.

VacancyTotal available square footage (direct & sublease) divided by Total Building Base.

BTS (Build-to-Suit)A method of leasing property whereby the landlord builds to suit the tenant (according to tenant’s specifications). The cost of construction is figured into the rental amount of the lease, which is usually for a long term.

New Spec (Speculative)A building constructed for lease or sale but without having a tenant or buyer before construction begins.

Gross AbsorptionTotal leasing and user sale activity in the marketplace in a given time period.

Net AbsorptionChange in occupied building square footage in a given time period.

Avg. Asking RateWeighted Average Full Service Rate (by available square footage) of available spaces with NNN rates converted to Full Service rates.

Avg. Time on MarketWeighted Average Time on market (by available square footage) of available spaces reflected in months.

Availables by SizeNumber of current available spaces for lease in the given size.

Historical ContinuityDTZ maintains a building by building historical record. Comparing previous reports to this report may show different building size numbers and statistics. Changes are caused by reclassification of buildings and revised building sizes. Historical comparisons should be made from this report only as DTZ adjusts the historical record accordingly.

SANTA CRUZ COUNTY

= Office Locations

1

1

101681

183

156

Monterey Bay

Pacific Grove

Reservation

Old S

tage

Monterey Rd

PACIFICGROVE

MONTEREY COUNTY

SALINASSALINAS

CASTROVILLECASTROVILLE

MARINAMARINA

SAND CITYSAND CITY

SEASIDESEASIDEMONTEREYMONTEREY

CARMELCARMEL

Empire Grade

1

SCOTTS VALLEYSCOTTS VALLEY

SOQUELSOQUEL

CAPITOLACAPITOLA

APTOSAPTOS

SANTA CRUZSANTA CRUZ

179

Main St

152

WATSONVILLEWATSONVILLE

Rd

Sum

mit

Rd

Rd

Rd

Report Published By:

DTZ Salinas328-B Main StreetSalinas, CA 93901Tel 831-449-8000Fax 831-769-0314

Central Coast Office Report Q1-2015_

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