1239 S Glendale Ave

OFFERING MEMORANDUM 1239 S GLENDALE AVE

RARE BLOCK—TO—BLOCK SITE | “GLENDALE STUDIOS” This is a confidential Offering Memorandum intended solely for your limited use and benefit in determining whether you desire to express any further interest in the purchase of 1239 S Glendale Ave, Glendale, CA (“the Property”).

This Offering Memorandum was prepared by Cushman & Wakefield of California, Inc. (“Cushman & Wakefield”) and has been reviewed by representatives of the owners of The Property (“the Ownership”). It contains selected information pertaining to the Property and does not purport to be all-inclusive or to contain all of the information that prospective purchasers may desire. It should be noted that all information provided is for general reference purposes only in that such information is based on assumptions relating to the general economy, competition, and other factors beyond the control of Ownership and, therefore, is subject to material variation. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. Neither Ownership nor Cushman & Wakefield nor any of their respective officers have made any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum, any of its contents, or any other materials provided as a courtesy to facilitate prospective purchaser’s own investigations of the Property, and no legal commitments or obligations shall arise by reason of this Offering Memorandum, its contents or any further information provided by Cushman & Wakefield regarding the Property.

It is essential that all parties to real estate transactions be aware of the health, liability and economic impact of environmental factors on real estate. Cushman & Wakefield does not conduct investigations or analyses of environmental matters and, accordingly, urges its clients to retain qualified environmental professionals to determine whether hazardous or toxic wastes or substances (such as asbestos, PCB’s and other contaminants or petro-chemical products stored in underground tanks) or other undesirable materials or conditions are present at the Property and, if so, whether any health danger or other liability exists. Such substances may have been used in the construction or operation of buildings or may be present as a result of previous activities at the Property.

Various laws and regulations have been enacted at the federal, state and local levels dealing with the use, storage, handling, removal, transport and disposal of toxic or hazardous wastes and substances. Depending upon past, current and proposed uses of the Property, it may be prudent to retain an environmental expert to conduct a site investigation and/or building inspection. If such substances exist or are contemplated to be used at the Property, special governmental approvals or permits may be required. In addition, the cost of removal and disposal of such materials may be substantial. Consequently, legal counsel and technical experts should be consulted where these substances are or may be present.

Ownership and Cushman & Wakefield expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice. Ownership shall have no legal commitment or obligation to any entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written commitment to purchase the Property has been fully executed, delivered and approved by Ownership and any conditions to Ownership’s obligations thereunder have been satisfied or waived. Except for representations and warranties expressly set forth in such definitive, executed purchase and sale agreement, Ownership makes and will make no representations and warranties regarding the Property and any prospective purchaser must rely entirely on its own investigations and those of its agents and consultants.

By receipt of this Offering Memorandum, you agree that this Offering Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence, and that you will notdisclose this Offering Memorandum or any of its contents to any other entity without the prior written authorization of Ownership nor will you use this Offering Memorandum or any of its contents in any fashion or manner detrimental to the interest of Ownership or Cushman & Wakefield.

The terms and conditions stated in this section will relate to all of the sections of the Offering Memorandum as if stated independently therein. If, after reviewing this Offering Memorandum, you have no further interest in purchasing the Property at this time, kindly return this Offering Memorandum to Cushman & Wakefield at your earliest possible convenience. Photocopying or other duplication is not authorized.

2 • 1239 S GLENDALE AVENUE TABLE OF CONTENTS

Executive Summary 04 Property Information 10 Location Overview 18

1239 S GLENDALE AVE 4 • 1239 S GLENDALE AVENUE SECTION 1 EXECUTIVE SUMMARY

OFFERING MEMORANDUM • 5

LOCATION ZONING 1239 S. Glendale Avenue, Glendale, CA 91205 According to the City of Glendale the subject site is currently zoned as C3 Commercial Service Height District 1 and R2250 Medium Density Residential. LAND AREA The subject site consists of ±96,396 SF of land area. ACCESS Property has Ingress and Egress access points from Glendale Ave. The orange highlighted parcel 5640-015-028, is also available for sale. Please contact Brrokfield Partners for OM. TOPOGRAPHY Property sits at grade level along Glendale Ave. between E Palmer Ave. and E. IMPROVEMENTS Cypress St.. Studio compound (4 film stages and multiple office buildings) consisting of 55,388 SF with the ability to add an additional 16,000 SF to the site.” CITY OF GLENDALE PLANNING WEBSITE http://www.ci.glendale.ca.us/planning/default.asp FRONTAGE & ACCESS Glendale Studios benefits from approximately 363 linear feet of frontage on CITY OF GLENDALE CEQA GUIDELINES Glendale Ave. http://www.ci.glendale.ca.us/planning/pdf_files/EnvironmentalReview/City%20 CEQA%20 PARCELS The assessor parcel numbers are 5640-015-037, 5640-015-033, 5640-015- 009, 5640-015-010, 5640-015-030, 5640-015-036, 5640-015-029

6 • 1239 S GLENDALE AVENUE SITE DESCRIPTION

PRICE Undisclosed

PARCEL AREA 2.21 AC (96,396 SF)

NO. OF FILM STUDIOS 4 Film studios

PARCEL NUMBERS 5640-015-037 5640-015-033 5640-015-009 5640-015-010 5640-015-030 5640-015-036 5640-015-029

TAX RATE 1.075%

TENANCY Studio/Creative/Media

PHYSICAL DESCRIPTION

FOUNDATION Concrete

HIGHWAY ACCESS 5, 134 and 2 Freeways

TOPOGRAPHY Flat

STREET FRONTAGE 363 Feet on Glendale Boulevard

TRAFFIC COUNT ±36,281 cars/day

OFFERING MEMORANDUM • 7 Cushman & Wakefield and Hudson Partners as exclusive advisors are pleased to present this unique opportunity to acquire 1239 S. Glendale Avenue (Glendale Studio’s Site), a +/- 2.21- acre Block-to- Block piece of land currently operating as a working studio operation. The property consists of 7 contiguous lots with an aggregate size of approximately 96,396 SF of land with tremendous street frontage and visibility along S. Glendale Avenue and S. Maryland Avenue. The adjacent parcels located at 1238 S Maryland Avenue +/- 10,000 SF can also be assembled as part of the acquisition (offering memorandum for 1238 S Maryland Avenue available upon request)

The site is nestled between the Glendale Downtown Specific plan (DSP) and the South Glendale market. This site is well positioned in both size and location. In addition, the property benefits from exceptional visibility and frontage of approximately 310 linear feet on S. Glendale Avenue and 298 linear Feet on S. Maryland Avenue. Glendale Avenue is a major north/ south thoroughfare in the trade area- traffic counts exceeds 34,000 cars per day passing the site.

The site is currently zoned as C3 Commercial Services and R2250 Medium Density Residential. The neighborhood consists of numerous smaller privately owned parcels making this assemblage an extremely rare opportunity for large-scale operation. This represents a rare opportunity to own and operate a full scale studio site with minimal to no work or capital.

The acquisition of Glendale Studios presents an investor/ developer with a once in a generation opportunity to acquire a large, prime mixed-use site and dense infill location, with excellent access to three major freeways including the 5, 2 and 134 freeways. Seldom do these opportunities present themselves to investors.

8 • 1239 S GLENDALE AVENUE PROPERTY HIGHLIGHTS

++ The acquisition of Glendale Studios presents an investor with a once in a generation opportunity to purchase a 2.2 acre studio campus in an dense infill location in the city of Glendale CA - seldom do these opportunities present themselves to investors.

++ The property benefits from an urban infill location that is proximate to both residential, retail and commercial uses – this is among the most densely populated trade areas.

++ Over 310 linear feet of frontage along Glendale Avenue with traffic counts at this block exceed 34,000 cars per day passing the site.

++ Dense, infill location in an established community will limit future competition from new or redevelopment; there is NO commercial land left in the trade area.

++ Extremely strong market dynamics with strong forecasted growth.

++ Current zoning is C3 and R2250 which allows for a multitude of uses.

++ Located on an oversized parcel with potential to accommodate sizable development and a variety of uses for the site.

++ Variety of uses would be supported by the market and City of Glendale.

OFFERING MEMORANDUM • 9 SURROUNDING PRODUCTION COMPANIES

2018 2014

++ Central Productions ++ Woodrin Productions ++ M3 Creative ++ Window Seal Pictures ++ Cherries Productions ++ Trifecta Production Group ++ Revry TV ++ The Shop Productions ++ Alive & Kicking Inc. ++ Pilgrims 7 Corp ++ Cedar Park Entertainment ++ Strand Creative ++ Southern Sky Films 2017-2015 ++ NCredible Entertainment ++ Inner City Productions LLC ++ Joe Blasco Cosmetics Inc. ++ Lincolnwood Drive Inc. ++ Morning Star Entertainment ++ Triage Entertainment LLC ++ Copper Hill Entertainment ++ Yellow Light Live Inc. ++ BBC Worldwide Reality Production ++ Triple Threat Productions Inc. 2013 ++ Under the LL Sea ++ Good Faith Productions ++ Funny or Die Inc. ++ Ficus Tree Productions ++ High Street TV Group ++ Comedy Bang Bang Production ++ Web Therapy ++ DWTS Productions LLC ++ 454 Dream Entertainment Group ++ 44 Blue Productions ++ D2 Production ++ The Smiley Group ++ Collins Avenue Productions ++ GSN ++ 51 Minds Never Nominated Production ++ MTV/Palm Tree Pictures ++ Fly Girls LLC ++ Mess Media ++ Mad Cow Productions ++ JHF Productions ++ Cheri Sundae Productions ++ Bunim Murray ++ 495 Productions ++ ABS Productions ++ Media Gold

10 • 1239 S GLENDALE AVENUE SHOWS/MOVIES

++ Judge Faith ++ Cupcake Wars ++ Blockers ++ Halloween Ways ++ Tax Collector ++ Christmas Cupcake Wars ++ Marvel ++ Blizzard ++ Divorce Court ++ Gold Rush ++ Bad Girls Club ++ Tavis Smiley Talk Show ++ Dance Moms Reunion ++ Little Yellow ++ Abby’s Ultimate Dance Competition ++ Jersey Boys Commercial ++ American Beauty Star ++ Web Therapy ++ Ryan Hansen Solves Crimes ++ Lil Duval ++ Mr. Neighbors House ++ Bloopers: Snooki and Jwow ++ MTV The Challenge Reunion ++ Ridiculous ++ T.D. Jakes Talk Show ++ Linkage ++ Purge 1 and 2 ++ Super Shopping Mark ++ Outside Hollywood ++ Zuma Gold ++ Drake: Music Video ++ Bet you Know ++ Celebrity Name Game ++ Toasty TV ++ Comedy Bang Bang ++ Reinas ++ Michael Bolton Valentines Special ++ React To That ++ Top Chef ++ Rachel Ray Promo

OFFERING MEMORANDUM • 11 12 • 1239 S GLENDALE AVENUE SECTION 2 PROPERTY INFORMATION

OFFERING MEMORANDUM • 13 PLAT MAP

14 • 1239 S GLENDALE AVENUE ZONING FOR PARCELS

OFFERING MEMORANDUM • 15 ZONING

Parcel can be assembled as part of the sale

Height limit is 35’ feet

Height limit 50’ feet

16 • 1239 S GLENDALE AVENUE PRELIMINARY SITE PLAN

FUTURE STUDIO EXPANSION APPROX. 23,000 SF PARCEL

STAGE 1 & 2 41,404 SF STAGE 3 1,125 SF

2,148 SF 2,150 SF 1,758 SF STAGE 4 5,040 SF 3,000 SF PROPOSED STAGE 10,000 SF

OFFERING MEMORANDUM • 17 AERIAL MAP

SUBJECT PROPERTY

1239 S Glendale Avenue, Glendale, CA 91205 18 • 1239 S GLENDALE AVENUE OFFERING MEMORANDUM • 19 20 • 1239 S GLENDALE AVENUE SECTION 3 LOCATION OVERVIEW

OFFERING MEMORANDUM • 21 LOCATION OVERIVIEW

The City of Glendale was incorporated on February 16,1906 and spans office markets featuring a wide range of properties and amenities. The City has approximately 30.6 square miles with a current population of approximately over six million square feet of office space and is home to such recognized firms 194,478 people (US Census). Located minutes away from downtown Los as Walt Disney Imagineering, Nestle USA, IHOP / Applebees, DreamWorks, Angeles, Pasadena, Burbank, Hollywood, and Universal City, Glendale is LegalZoom, and Public Storage. the fourth largest city in Los Angeles County and is surrounded by Southern California’s leading commercial districts. Glendale prides itself on the quality of services it provides to the community. It is a full-service City, which includes a water and electrical department. The City As one of its core functions, Glendale provides well-maintained streets and operates its own power plant capable of serving the electrical needs of the entire a variety of transportation services. The City’s historic success at attracting city, although the majority of power is currently imported from other areas for employers is partially attributed to the result of its location at the center of four cost savings. Water comes primarily from the Metropolitan Water District, along major freeways including the I-5 Golden State Freeway, SR-2 Glendale Freeway, with a small portion from local wells. ST-134 Ventura Freeway, and the 210 Foothill Freeway; all provide easy access for residents, workers, and customers from around the region. Glendale also HISTORY offers its own bus services, the Beeline, with 13 routes connecting customers to Jet Propulsion Laboratory (JPL), the City of Burbank, and the Metrolink Stations The area was long inhabited by the Tongva people (or “People of the Earth”), in both Burbank and Glendale. The Bob Hope Airport in Burbank serves the Los who were later renamed the Gabrieleños by the Spanish missionaries, after the Angeles area including Glendale, Pasadena and the San Fernando Valley. It nearby Mission San Gabriel Arcángel. is the only airport in the greater Los Angeles area with a direct rail connection to downtown Los Angeles. The City of Glendale is located about 30 minutes In 1798, José María Verdugo, a corporal in the Spanish army from Baja California, from Los Angeles International Airport (LAX) which is a commerce leader and received the Rancho San Rafael from Governor Diego de Borica, formalizing his designated as a world-class airport for its convenient location, modern facilities, possession and use of land on which he had been grazing livestock and farming and superior sea/air/land connections. since 1784. Rancho San Rafael was a Spanish concession, of which 25 were made in California. Unlike the later Mexican land grants, the concessions were Businesses and residents alike have taken advantage of Glendale’s central similar to grazing permits, with the title remaining with the Spanish crown. location, reputation for safety, excellent business environment, outstanding schools, state-of- the-art healthcare facilities, and growing restaurant and In 1860, his grandson Teodoro Verdugo built the Verdugo Adobe, which is the entertainment options. Glendale is also one of Southern California’s leading oldest building in Glendale. The property is the location of the Oak of Peace

22 • 1239 S GLENDALE AVENUE where early California leaders including Pio Pico met in 1847 and decided INDUSTRY AND DEVELOPMENT surrender to Lieutenant Colonel John C. Frémont. 801 North Brand, one of Glendale’s many modern skyscrapers. Companies like Verdugo’s descendants sold the ranch in various parcels, some of which Nestle, Great West Life, Citi, Unum, and Cigna have offices downtown. Grand are included in present-day Atwater Village, Eagle Rock, and Highland Park Central Airport was a municipal airport developed from 1923 which became the neighborhoods of Los Angeles. largest employer in Glendale for many years, and contributed to the development of aviation in the United States in many important ways. The main terminal GLENDALE, 1910 building still stands and includes both art deco and Spanish style architectural elements. The facility was the first official terminal for the Los Angeles area as In 1884, residents gathered to form a town and chose the name “Glendale”. well as the departure point for the first commercial west to east transcontinental Residents to the southwest formed “Tropico” in 1887. The Pacific Electric flight flown by Charles Lindbergh. During World War II, the Grand Central Air Railway brought streetcar service in 1904. Terminal building was camouflaged to protect it from enemy targeting. It was closed down in 1959, and made way for the Grand Central Business Centre, an Glendale incorporated in 1906, and annexed Tropico 12 years later. Brand loved industrial park. to fly, and built a private airstrip in 1919 and hosted “fly-in” parties, providing a direct link to the soon-to-be-built nearby Grand Central Airport. The grounds of El Forest Lawn Memorial Park started in Tropico (later annexed to Glendale) in Miradero are now city-owned Brand Park and the mansion is the Brand Library, 1906 and is famous for its art collection and the burial of many celebrities as well according to the terms of his will. Brand partnered with Henry E. Huntington to as for the 1933 opening of the first funeral home on cemetery grounds anywhere bring the Pacific Electric Railway, or the “Red Cars,” to the area. Today, he is in the United States. The Bob’s Big Boy chain of hamburger restaurants started memorialized by one of the city’s main thoroughfares, Brand Boulevard. in Glendale on East Colorado in August 1936, and the Baskin-Robbins, “31 Flavors” chain of ice cream parlors started in Adams Square in 1945. The Glendale Public Library on Harvard Street houses its “Special Collections” GEOGRAPHY department which contains original documents and records on much of the history of Glendale. It also contains one of the largest collections of books on Glendale from Griffith Park in the southwest, with the San Gabriel Mountains in cats in the world, over 20,000 volumes.[20] It was donated to the library in the the background and the Verdugo Hills on the extreme left. Glendale is located 1950s by the Jewel City Cat Fanciers Club, with the understanding that it would at the juncture of two large valleys, the San Fernando and the San Gabriel. be made into a special collection and kept permanently for club members to use According to the United States Census Bureau, the city has a total area of and enjoy. 79.212 km2 (30.6 sq mi). 30.5 square miles (79 km2) of it is land and 0.13 square miles (0.34 km2) of it (0.43%) is water. It is bordered to the north by the foothill communities of La Cañada Flintridge, La Crescenta, and Tujunga; The city experienced significant development in the 1970s, with the completion to the south by the Atwater Village community incorporated by the city of Los of the Glendale Freeway (Highway 2) and the Ventura Freeway (Highway 134). Angeles; to the east by Pasadena and Eagle Rock (also incorporated within Los This included redevelopment of Brand Boulevard, renovation of the 1925 Alex Angeles); and to the west by the city of Burbank. Glendale is located 10 miles Theatre, and construction of the Glendale Galleria shopping mall which opened (16 km) north of Downtown Los Angeles. in 1976, and was further expanded in 1982.

OFFERING MEMORANDUM • 23 Market Overview – Glendale’s Transformation

GLENDALE’S TRANSFORMATION Significant Tenant Migration • Over 770,000 sf of positive net absorption including many new tenants from surrounding markets

Now! (2018)

• Glendale’s 774,000 sf of absorption since 2012 represents 55% of Tri-City absorption • More firms headquartered in Glendale than in DTLA

New Destination Retail Proactive City • • Glendale Americana with its high-end retail and residential New City Leadership has been very proactive in pushing development has transformed Glendale’s retail experience new developments • • Americana is now the 15th highest grossing retail center in the country with Glendale’sAnnual budget is second sales over $1,100/sf largest in the LA county outside of City of LA • Glendale Galleria has completed a $60M renovation and is competing • head-to-head with Americana Space 134 project is a 24-acre cap project on the 134 Freeway which will tie north and south CBD together. • Five new hotels/330 Keys coming into Glendale

The Great Recession Hip New Restaurants New Residential Explosion / Gentrification (2008-2011) Along with the emergence of the high-end retail and new residential has • 4,300 new residential units added since 2012, over 90% been the explosion of cool new restaurants and coffee houses • 11 straight quarters of negative net leased at $3.50 rents absorption • Changing demographics of areas like Silverlake, Los Feliz, • Market vacancy peaks at 26.5% Atwater Village, Frogtown, etc. have attracted millennials • 46 full floors available to live and work in Glendale

24 • 1239 S GLENDALE AVENUE Market Overview – Glendale’s Transformation

Significant Tenant Migration • Over 770,000 sf of positive net absorption including many new tenants from surrounding markets

Now! (2018)

• Glendale’s 774,000 sf of absorption since 2012 represents 55% of Tri-City absorption • More firms headquartered in Glendale than in DTLA

OFFERING MEMORANDUM • 25 Market Overview – Tenant Migration

TENANT MIGRATION

KEY NEW TENANTS

1 Christie Parker Hale 2 Front Porch 3 Union Bank 4 Children’s Hospital 5 Legal Zoom 6 Avery Dennison 7 Whole Foods 8 New York Life 9 Cannon 10 Cotton On 11 PSI 12 Equinox 13 Beyond Limits EXPANSIONS

14 Dine Equity 15 Age of Learning 19 20 16 Mobileforming 5 15 17 YP 24 22 1 18 Service Titan 23 17 EXPANSIONS 10 16 9 14 7 19 Disney 12 11 18 20 DreamWorks 6 18 21 13 4 CIGNA 21 8 22 Vulcan 3 23 AJ Gallagher 2 24 State Comp Insurance

26 • 1239 S GLENDALE AVENUE Market Overview – Tenant Migration

19 20 5 15 24 22 1 23 17 10 16 9 14 7 12 18 11 6 13 18 4 21 3 8 2

OFFERING MEMORANDUM • 27 THE MOST DYNAMIC MARKET IN THE TRI-CITIES

BEYOND LIMITS 15,000 SF PSI ALTADENA 25,000 SF BANK OF AMERICA BURBANK 100,000 SF NICKELODEON 50,000 SF WHOLE FOODS YELLOW PAGES 45,000 SF DREAM WORKS AVERY INTERNATIONAL 100,000 SF 1O0,000 SF HEADQUARTERS MONROVIA SHERMAN OAKS 55,000 SF PASADENA STUDIO CITY CBRE GLENDALE CHRISTY PARKER 30,000 SF AND HALE ARCADIA 40,000 SF NEW YORK LIFE UNIVERSAL CITY EAGLE ROCK 50,000 SF SOUTH PASADENA LEGAL ZOOM VULCAN MATERIALS HEADQUARTERS 40,000 SF DIGNITY HEALTH 50,000 SF CHILDREN’S HOSPITAL 27,000 SF ENDOWMENT HOLLYWOOD 80,000 SF

CANON UNION BANK 15,000 SF 50,000 SF BEVERLY HILLS EL MONTE MONTEREY PARK UNION BANK 25,000 SF COTTON ON LOS ANGELES 20,000 SF INDUSTRY BREAKDOWN

Technology and Media SANTA MONICA Finance

Healthcare

The last decade has ushered in a radical transformation of Glendale into a leading Los Angeles office market Professional Services with premiere urban housing options, regional-leading amenities, strong transit accessibility, exceptional Entertainment demographics and high quality corporate, entertainment and creative tenants. Food Service

Tenants from Pasadena, Burbank, Hollywood, the San Fernando Valley and DTLA have been increasingly Manufacturing migrating to Glendale as their desired location, drawn by the city’s amenities, urban housing, demographics, accessibility, lifestyle, and the city’s low cost of doing business. Construction

Fashion

EL SEGUNDO 28 • 1239 S GLENDALE AVENUE A DYNAMIC URBAN ENVIRONMENT

URBAN HOUSING

Glendale has experienced a surge in urban housing development, with over 4,500 units delivered, under construction or approved since 2013.

Glendale is increasingly embracing an urban, pedestrian-oriented civic identity – “Space 134,” a 24-acre freeway cap park recently unveiled by the city, will connect Downtown Glendale and surrounding neighborhoods with open space and plentiful amenities.

PROXIMITY TO THE COVETED CREATIVE CLASS OF MILLENIALS

Glendale’s proximity to the neighborhoods most desirable to LA’s young creative class – Highland Park, Eagle Rock, Atwater Village, Silver Lake and Glassell Park – provides access to some of the region’s best demographics.

ONE OF THE MORE TRANSIT ACCESSIBLE MARKETS IN LOS ANGELES

Glendale is connected to the entire Southern California region by Amtrak and Metrolink, with the municipal Glendale Beeline bus system linking the city’s transit corridors and major employment, entertainment, and shopping centers.

FLOURISHING URBAN AMENITIES

Within walking distance is over 2 million square feet of lifestyle retail offerings, including Caruso’s upscale Americana and Glendale Galleria, featuring shopping destinations Nordstroms and Bloomingdale’s, and eateries such as Shake Shack, Philz Coffee, Eggslut and Porto’s Bakery.

THE GLENDALE EDGE

Glendale is positioning itself as a pro-business city, with advantages including: no gross receipts tax, low utility costs, and the second largest annual budget of any city within the Los Angeles area, outside the city of LA. There is also the Glendale Economic Development Corporation--a nonprofit corporation focused on obtaining and utilizing funding opportunities in order to carry out Glendale’s economic goals, specifically:

++ Establish 18-Hour City

++ Develop and Implement Tech Cluster Strategic Plan

OFFERING MEMORANDUM • 29 GLENDALE AMENITIES

30 • 1239 S GLENDALE AVENUE UNSURPASSED TENANT MIX & ACCESS TO LA’S CREATIVE CLASS

Glendale serves as the headquarters or regional office to some of the most notable tenants in Los Angeles.

Entertainment is Glendale’s largest employer led by Disney and DreamWorks, and the industry continues to expand in Glendale as tech’s voracious appetite for content grows.

With its rapidly urbanizing downtown and proximity to other desirable neighborhoods, Glendale enjoys abundant access to a creative and highly educated work force.

The city likewise benefits from its proximity to four of the premier educational and research institutions in Southern California – California Institute of Technology (“Caltech”), the Jet Propulsion laboratory, Occidental College, and Art Center College of Design. Combined, these institutions are recipients of billions of dollars in federal funding and are responsible for hundreds of new companies, many of them housed in the Tri-Cities market.

OFFERING MEMORANDUM • 31 MULTI-MODAL REGIONAL TRANSIT HUB

++ Glendale’s central location within the Los Angeles Basin allows easy access to a number of the region’s most popular neighborhoods, including Downtown, Los Feliz, La Cañada, Pasadena, San Marino, Eagle Rock, Atwater Village, Highland Park, and Silver Lake.

++ Served by the I-5 Freeway, along with the 2 and 134, Glendale is further connected to the region by the Amtrak Rail system, which directly links the city from Oakland to Ventura County, Orange County and San Diego.

++ With buses arriving every twenty minutes, the Glendale Beeline bus transportation system operates nine fixed routes and functions as circular system that complements the regional transit service provided by Metro routes.

++ In March 2016, Metro announced the NoHo to Pasadena Metro Express Bus, connecting the North Hollywood Metro Red Line Rail station to Pasadena’s Gold Line stations, with two stops on Brand Blvd. in Glendale. This bus may serve as the forerunner to an eventual east– west Glendale– Pasadena rail connector that would link to the Metro Gold Line in Pasadena.

++ The Property is located 9.2 miles southeast of the Burbank Bob Hope Airport, which handled approximately 4 million passengers in 2016 and is the preferred commuter airport from the Bay Area.

32 • 1239 S GLENDALE AVENUE MARKETBEAT Tri-Cities Office Q3 2018 TRI-CITIES OFFICE MARKET OVERVIEW 3Q 2018

TRICITIES OFFICE EconomyECONOMY The U.S. unemployment rate remained at 3.9% in August, one of the lowest levels Economic Indicators* 12-Month in half a century and well below estimates of full employment that range from 4.5% Q3 17 Q3 18 Forecast to 5.5%.The August U.S. was theunemployment 95th straight month the rate U.S. economyremained added atjobs, 3.9% with in August, one of the lowest levels in half a century and well LA County Employment 4.45M 4.51M an averagebelow 207,000 estimates jobs a month of so fullfar this employment year, a healthy pace that that rangeindicates from 4.5% to 5.5%. August was the 95th straight month the U.S. LA County Unemployment 4.6% 4.5% companieseconomy continue to added grow and don'tjobs, anticipate with a andownturn average anytime soon.207,000 Locally, jobs a month so far this year, a healthy pace that indicates

U.S. Unemployment 4.4% 3.9% Los Angelescompanies County’s unemployment continue rate to was grow 4.5% in and August, don’t down from anticipate 4.6% a downturn anytime soon. Locally, Los Angeles County’s

*Average of first two months of Q2 2018 one yearunemployment ago. Over the last 12 months,rate was the county 4.5% added in 62,000 August, jobs for down a 1.4% from 4.6% one year ago. Over the last 12 months, the county annualadded growth. The 62,000 prolonged jobsrun in office for- using a 1.4% job growth annual continues growth.with the The prolonged run in office-using job growth continues with Market Indicators (Overall, All Classes) professionalthe professionaland business services and sector business adding 14,300 services jobs, the educational sector and adding 14,300 jobs, the educational and health services sector health services sector increasing by 15,300 jobs and the information sector gaining 12-Month increasing by 15,300 jobs and the information sector gaining 12,100 jobs. Q3 17 Q3 18 Forecast 12,100 jobs. Vacancy 13.4% 14.1% MARKET OVERVIEW Net Absorption ytd (sf) 34k -279k Market Overview

Under Construction (sf) 0 218k The third quarter 2018 continued to see more negative net absorption with another set of largeThe move third-outs quarter in Glendale. 2018 At 611 Brand,continued 94,657 sf ofto space see was more brought negative net absorption with another set of large move-outs in Average Asking Rent* $2.95 $3.04 back toGlendale. the market, formerly At 611 Disney Brand, occupied 94,657space. This sfcontributed of space to the was brought back to the market, formerly Disney occupied space.

*Rental rates reflect gross asking $psf/mo. negativeThis -140,274 contributed sf direct net absorption to the posted negative for the quarter, -140,274 while overall sf net direct net absorption posted for the quarter, while overall net absorptionabsorption year-to-date isyear-to-date now at negative -278,879 is now sf. Slightlyat negative counteracting -278,879 sf. Slightly counteracting negative absorption in Glendale, Overall Net Absorption/Overall Asking Rent negativethe absorption Children’s in Glendale, Hospital the Children’s of HospitalLos Angeles of Los Angeles (CHLA) (CHLA) took down the 10th floor with 25,384 sf of sublease space at 4-QTR TRAILING AVERAGE took down800 the North 10th floor Brandwith 25,384 Blvd sf of sublease and spaceDISQO at 800 inked18,155North Brand Blvd sf in which they set to occupy later this year. At 155 North 250 $3.50 and DISQOLake inked18,155 Avenue sf inin which Pasadena, they set to occupy Everbridge later this year. At occupied 155 North 19,634 sf. Burbank continues to post the highest positive 200 Lake Avenue in Pasadena, Everbridge occupied 19,634 sf. Burbank continues to overall net absorption with 73,984 sf year-to-date. Overall vacancy declined 10 bps to 14.1%, whereas direct 150 post the highest positive overall net absorption with 73,984 sf year-to-date. Overall $3.00 100 vacancyvacancy declined 10 increasedbps to 14.1%, whereas to 11.7%, direct vacancy a 40 increased bps increase to 11.7%, a from last quarter. Overall asking rates rose slightly by $0.03 to 50 40 bps$3.04 increase psf/mo,from last quarter. up $0.09Overall asking or 3.1% rates rose from slightly a by year $0.03 agoto where it was at $2.95 psf/mo. 0 $3.04 psf/mo, up $0.09 or 3.1% from a year ago where it was at $2.95 psf/mo. $2.50 -50 Leasing activity tapered to 239,126 sf in the third quarter, but year-to-date remains 18.2% higher than a year -100 Leasingago activity with tapered 871,696 to 239,126 sf.sf in Thethe third largest quarter, but lease year-to -wasdate remains for two floors at 3333 Empire Ave with Fox subleasing 75,100 sf. -150 $2.00 18.2%While higher than CIGNA a year ago Healthcare with 871,696 sf. Theof largestCA didlease awas direct for two floorsrenewal of 61,665 sf at 400 N Brand Blvd. In Pasadena, Kaiser 2011 2012 2013 2014 2015 2016 2017 2018 at 3333signed Empire Ave a with20,663 Fox subleasing sf deal 75,100 at sf. 199 While SCIGNA Los Healthcare Robles of CAAvenue. The Tri-Cities investment market had been flourishing Net Absorption, KSF Asking Rent, $ PSF did a directover renewal the ofpast 61,665 24 sf atmonths, 400 N Brand however Blvd. In Pasadena, that Kaisertrend signed temporarily slowed in the third quarter 2018. There were two key a 20,663 sf deal at 199 S Los Robles Avenue. The Tri-Cities investment market sales, with the largest sale transaction in the third quarter in Glendale, with the 311,143 sf Class A building at had been flourishing over the past 24 months, however that trend temporarily Overall Vacancy slowed505 in the Nthird Brand quarter 2018.Blvd There selling were two to key Goldman, sales, with the Sachs largest sale & Company for $93.5 million ($301 psf) from Principal Real Estate transactionInvestors. in the third quarter in Glendale, with the 311,143 sf Class A building at 20% 5-Year Historical Average = 15.1% 505 N Brand Blvd selling to Goldman, Sachs & Company for $93.5 million ($301 psf) fromOUTLOOK Principal Real Estate Investors. 15% OutlookThe variety of leasing activity across Tri-Cities bodes well for the market, with large renewals, new direct deals 10% The varietyand of sublease leasing activity space across Tri -beingCities bodes taken well for down the market, it represents with large a market with viable options for tenants across a diverse renewals,sector new direct of dealsindustries. and sublease The space health being taken and down mediait represents industries a led the way in the third quarter, however there are no 5% market with viable options for tenants across a diverse sector of industries. The shortage of options across a market that has health and media industries led the way in the third quarter, however there are no 0% shortage of options across a market that has a good mix of high-end multi-family 2011 2012 2013 2014 2015 2016 2017 2018 developments and ever growing amenities. cushmanwakefield.com OFFERING MEMORANDUM • 33 DEMOGRAPHICS

POPULATION AGE 2016 ESTIMATED POPULATION BY AGE 2010 ESTIMATED POPULATION 191,670 0-5 YEARS 5.3% 2017 ESTIMATED POPULATION 203,054 5-17 YEARS 12.7% GROWTH 2010-2017 5.9% 18-24 YEARS 10.0%

25-34 YEARS 15.5%

RACE & ETHNICITY 35-44 YEARS 14.2% 2016 ESTIMATED POPULATION BY RACE AND ORIGIN 45-54 YEARS 14.1% WHITE 72.1% 55-59 YEARS 7.4% BLACK 1.6% 60-61 YEARS 2.7% ASIAN 16.3% 62-64 YEARS 3.8% PACIFIC ISLANDER 0.1% 65-74 YEARS 8.5% AMERICAN INDIAN & ALASKA NATIVE 0.3% 75+ YEARS 7.9% TWO OR MORE RACES 3.6% 2016 ESTIMATED MEDIAN AGE 41 HISPANIC 18.3%

WHITE NON-HISPANIC 61.0% HOUSING 2016 ESTIMATED POPULATION BY RACE AND ORIGIN

EDUCATION 2016 ESTIMATED OWNER 34.5% 2016 ESTIMATED POPULATION OVER 25 BY OCCUPIED HOUSING UNIT RATE EDUCATIONAL ATTAINMENT

HIGH SCHOOL GRADUATE OR HIGHER 85.1% INCOME BACHELOR'S DEGREE OR HIGHER 39.0% 2016 ESTIMATED AVERAGE $56,069 HOUSEHOLD INCOME

34 • 1239 S GLENDALE AVENUE Glendale

GLENDALE

OFFERING MEMORANDUM • 35

METROLINK COMMUTER RAIL SYSTEM One of the more transit accessible markets in Los Angeles

++ Glendale has experienced an explosion in urban housing development, with over 3,500 units delivered, under construction and approved since 2013, with 75% of the multifamily units constructed in the city’s increasingly vibrant downtown

++ Glendale’s proximity to the neighborhoods most desirable to LA’s young creative class - Highland Park, Eagle Rock, Atwater Village - provides some of the region’s best access to An explosion of incredible demographics urban housing ++ Glendale is connected to the entire Southern California region by Amtrak and Metrolink, with the municipal Glendale Beeline bus system linking the city’s transit corridors and major employment, entertainment, and shopping centers

36 • 1239 S GLENDALE AVENUE VIEW FROM S. MARYLAND AVE.

OFFERING MEMORANDUM • 37 38 • 1239 S GLENDALE AVENUE OFFERING MEMORANDUM • 39 1239 S GLENDALE AVE

FOR MORE INFORMATION, PLEASE CONTACT:

SHAUN STILES KATIE COWAN KELLY BETPOLICE +1 213 629 6521 +1 213 629 6549 +1 310.403.8544 [email protected] [email protected] [email protected] Lic # Lic. #01125641 Lic. #01758914 01470894