Raintree Corporate Center Building I

INVESTMENT OPPORTUNITY RAINTREE CORPORATE CENTER BUILDING I 8980 East Raintree Drive Scottsdale, AZ A premier multi-tenant office investment situated within the in the Scottsdale Airpark, the second largest employment center in Arizona INVESTMENT CONTACTS

CAPITAL MARKETS

ERIC WICHTERMAN Executive Managing Director +1 602 224 4471 [email protected]

MIKE COOVER Managing Director +1 602 224 4473 [email protected]

2 / 8980 East Raintree TABLE OF CONTENTS

01 OFFERING SUMMARY 04

02 EXECUTIVE SUMMARY 8

03 PROPERTY OVERVIEW 18

04 AREA OVERVIEW 26

05 MARKET INFORMATION 42

06 FINANCIAL ANALYSIS 50

/ 3 01 OFFERING SUMMARY

4 / 8980 East Raintree / 5 THE OFFERING

PROPERTY OVERVIEW

Raintree Corporate Center Single-story freestanding office building in north Scottsdale.

Building I Prominently situated along 90th Street, just north of Raintree Drive. 8980 East Raintree Drive in Scottsdale Arizona 85260 Parking is provided at a ratio of ±4 spaces per 1,000 square feet. NET RENTABLE AREA YEAR BUILT Attractive modern curb appeal. ±7,561 1999 Constructed in 1999 using decorative masonry block with steel accents. SQUARE FEET Ideally designed to accommodate small sized tenants that dominate the

PARKING RATIO OCCUPANCY market. WITHIN COMPLEX 100%

±4:1,000 JOMAX ROAD DEER VALLEY HAPPY VALLEY ROAD HAPPY VALLEY ROAD

PHOENIX DEER VALLEY MUNICIPAL AIRPORT PINNACLE PEAK ROAD PINNACLE PEAK ROAD PEORIA DEER VALLEY ROAD DESERT RIDGE

M AY UNION HILLS DRIVE O B OULEVARD

BELL ROAD 32ND STREET 32ND 40TH STREET CAVE CREEK ROAD CAVE SCOTTSDALE AIRPORT GREENWAY ROAD GREENWAY ROAD FRA N K

LL TATUM BOULEVARD TATUM O Y D THUNDERBIRD ROAD WRIG THUNDERBIRD ROAD HT BO U L E V PHOENIX A RD CACTUS ROAD CACTUS ROAD SCOTTSDALE

PEORIA AVENUE SHEA BOULEVARD 56TH STREET

OLIVE AVENUE DOUBLETREE RANCH ROAD PARADISE NORTHERN AVENUE VIA DE VENTURA VALLEY INDIAN BEND ROAD SALT RIVER PIMA LINCOLN DRIVE MARICOPA INDIAN 43RD AVENUE 43RD COMMUNITY GLENDALE CAMELBACK ROAD CHAPARRAL ROAD 7TH AVENUE AVENUE CENTRAL 7TH STREET DOWNTOWN

27TH AVENUE INDIAN SCHOOL ROAD MIDTOWN SCOTTSDALE PIMA ROAD PHOENIX THOMAS ROAD 16TH STREET 51ST AVENUE 51ST MCDOWELL ROAD 44TH STREET 48TH STREET SCOTTSDALE ROAD SCOTTSDALE 68TH STREET

DOWNTOWN ROAD HAYDEN PHOENIX SKY HARBOR 6 / 8980 East RaintreePHOENIX INTERNATIONAL AIRPORT

RIO SALADO PARKWAY LOCATION AND AMENITIES

Located within north Scottsdale’s prestigious Scottsdale Airpark submarket, PRICE the second largest employment center in Arizona. $1,600,000 Thriving upscale nearby retail amenities with Kierland Commons, Scottsdale Quarter, Scottsdale Promenade and Scottsdale Towne Center all located within a five minute drive.

IN-PLACE CAP RATE Immediate trade area houses many of the Valley’s finest apartment and condominium properties, as well as affluent residential neighborhoods such ±7% as Silverleaf, DC Ranch, McDowell Mountain Ranch, Troon and Estancia. Excellent freeway access provided by the Loop 101, approximately one-half mile west of the Property. Scottsdale Municipal Airport lies approximately one mile west and is the highest profile private airport in the Valley for private and corporate Situated in clientele. the Scottsdale Airpark, which INVESTMENT HIGHLIGHTS Rare opportunity to acquire a superbly constructed and highly attractive ranks third out multi-tenant office building located in the heart of one of the foremost office locations in Arizona. of 22 Valley The combination of this prime location, with a close proximity substantial submarkets with nearby retail amenities; and coupled with its first class status as a business address, provide long term investment viability. respect to office Situated in the Scottsdale Airpark, which ranks third out of 22 Valley submarkets with respect to office net absorption since 2013. net absorption Superb access to a high-quality Scottsdale labor pool, nationally known for since 2013. its dense, upscale and highly-educated population.

/ 7 02 EXECUTIVE SUMMARY

8 / 8980 East Raintree / 9 EXECUTIVE SUMMARY

INVESTMENT HIGHLIGHTS

THE PROPERTY

• 100% occupied Multi-tenant office property located within the Raintree Corporate Center, in north Scottsdale.

• Modern architecture and curb appeal.

• Configured for multi-tenant use, functional and efficient floor plans accommodate small tenants.

• ±7,561 SF constructed in 1999. THE SITE • Masonry construction. • Prime location within the prestigious Scottsdale Airpark.

• Located along 90th Street just north of Raintree Drive.

• Breathtaking views of adjacent McDowell Mountain Park and Preserve. • A total of eight (8) covered reserved parking spaces, P185 -P192 are allocated to the Property. Surface parking is first come first served with a total advertised complex ratio of 4:1,000 square feet.

• Excellent freeway access with the Loop 101 Freeway lying approximately one-half mile to the west.

10 / 8980 East Raintree UNPARALLELED RETAIL AMENITIES SURROUND THE PROPERTY

• With respect to premier retail destinations, Kierland Commons, The Scottsdale Quarter, The Promenade, Sonora Village and Scottsdale Towne Center comprise the bulk of surrounding retail amenities.

• Dozens of popular restaurant concepts surround the Scottsdale Airpark Corporate Center including: True Food, Zinburger, Mastro’s Ocean Club, Dominick’s Steakhouse, P.F. Chang’s, Cheesecake Factory, Sol Mexican Cocina, O.H.S.O., Wildflower, Panera Bread, Pei-Wei and Shake Shack.

• Large scale retailers such as Best Buy, Target, Kohl’s, Costco, Ross, T.J. Maxx, Home Depot, Staples and Walmart Supercenter are in the immediate vicinity.

• Kierland Commons is a true destination location for retail amenities, housing upscale retailers such as Victoria’s Secret, Crate & Barrel, Anthropology, Sur La Table and Michael Kors.

• Notable tenants of Scottsdale Quarter include: an Apple Store, Nike, Restoration Hardware, West Elm, Pottery Barn, True Food and H&M.

/ 11 EXECUTIVE SUMMARY

SCOTTSDALE AIRPORT SCOTTSDALE AIRPARK SUBMARKET

• Scottsdale Municipal Airport lies less • The Scottsdale Airpark is one of the • Major employers include ST than one-mile east of the Property and is premier office submarkets in the Valley Microelectronics, Eide Bailly, PayPal, undergoing a $27M renovation. with respect to affluence, amenities and Prudential Insurance, Vanguard, Mass

• One of the busiest single-runway employment. Mutual, Pulte Homes and Thompson facilities in the country with more than • With over 17.4 million SF of office and Reuters, GoDaddy, Allied Waste, Liberty 615 general aviation flights a day. industrial space the Scottsdale Airpark is Mutual, Taser International and Discount Tire Company. • Approximately 450 private aircraft are the second largest employment pool in based at Scottsdale Airport. the greater Phoenix area. • The average office asking rates in the Scottsdale Airpark submarket grew by • Scottsdale Airport is considered the • North Scottsdale businesses range over 6% over the past three years—a premier airport in the Valley in terms of from Fortune 500 companies to sole firm indication of the intense demand prestige amongst private and corporate proprietors and represent over 80 office users have for the area. clientele. different business categories.

Scottsdale Airport is considered the premier airport in the Valley in terms of prestige amongst private and corporate clientele.

12 / 8980 East Raintree Major corporations are located in the Scottsdale Airpark include: Pay Pal, Prudential Insurance, Vanguard, Mass Mutual, Pulte Homes and Thompson Reuters, Go-Daddy, Allied Waste, Liberty Mutual, Taser International and Discount Tire Company.

SCOTTSDALE’S UPSCALE DEMOGRAPHICS AND RESIDENTIAL NEIGHBORHOODS $11.5 M $8.0 M $7.3 M 3.0 M $9.5 M $4.8 M $4.9 M $4.0 M $8.0 M $7.4 M • The City of Scottsdale’s annual $1.8 M $1.6 M $3.7 M $3.0 M $5.5 M $2.7 M $1.4 M $3.9 M $1.0 M $1.6 M $1.7 M $1.7 M household income of $109,302 is $2.5 M $3.4 M $1.9 M $3.5 M $1.1 M $2.5 M $2.4 M $1.9 M $10.0 M $5.8 M amongst the highest in the country. $1.8 M $2.0 M $1.6 M $1.8 M $1.5 M $2.1 M $1.2 M $1.4 M • Several of north Scottsdale’s premier TPC SCOTTSDALE $1.8 M CHAMPIONS $1.1 M $1.5 M GOLF COURSE $1.0 M high-end residential communities $1.2 M $1.4 M $1.5 M $1.0 M $1.1 M $1.1 M are directly north and east of the Property, offering immediate access to tremendous density and wealth.

• These include: DC Ranch, Silverleaf,

90TH STREET McDowell Mountain Ranch, Grayhawk, Estancia and Troon.

• Homes in these neighborhoods range in pricing from $650,000 to over $10,000,000.

RAINTREE DRIVE

/ 13 03 PROPERTY OVERVIEW

14 / 8980 East Raintree / 15 PROPERTY OVERVIEW LAND SITE SUMMARY

8980 East Raintree Drive ADDRESS Scottsdale, AZ

Two (2) points of access both along ACCESS Raintree Circle Drive

LAND TO BE N/A Condo Plat CONVEYED

PARCEL 217-15-953

ZONING I-1, City of Scottsdale.

A total of eight (8) covered reserved parking spaces, P185 -P192 are allocated to the Property. Surface PARKING parking is first come first served with a total advertised complex ratio of 4:1,000 square feet.

16 / 8980 East Raintree BUILDING SPECS

PROPERTY SIZE ±7,561 square feet.

COMPLETION 1999

Foam roof. Includes 15-year limited silicone ROOF warranty.

MECHANICAL 12 heat pumps.

CEILING HEIGHT 9’ from the floor to the grid ceiling.

Electrical service is provided by multiple ELECTRICAL service panels with 110/220/440 service.

Sprinklers are throughout the office FIRE PROTECTION building and serviced/radio monitored by Safe Guard Fire monitoring group.

Common area restrooms located inside REST ROOMS the building.

/ 17 PROPERTY OVERVIEW

Site Plan Overview - The Subject is 8980 East Raintree Drive

8980 1 Story East O ce Raintree Bldg K

1 Story 1 Story O ce O ce Bldg H Bldg L

ARIZONA STATE ROUTE 101 1 Story O ce

Bldg G N 90TH ST 90TH N

1 Story O ce Bldg F N PIMA RD

N PIMA RD

1 Story O ce Bldg E

PIMA FWY 1 Story O ce 1 Story Bldg A 1 Story O ce 1 Story O ce Bldg B O ce Bldg C

Bldg D RAINTREE CIR DR CIR RAINTREE

E RAINTREE DR E REDFIELD RD

NORTH

18 / 8980 East Raintree Floor Plan

130

100

Restrooms Kitchen

Restrooms Kitchen 120 110

/ 19 04 AREA OVERVIEW Nearby SCOTTSDALE QUARTER and KIERLAND COMMONS AREA OVERVIEW

NORTH SCOTTSDALE

UPSCALE RESIDENTIAL Quarter—both massive, award-winning open- The Promenade: With more than 75 stores air lifestyle centers. spread over 569,000 SF, The Promenade The northern portion of the City of is one of the most popular shopping Scottsdale contains the most affluent Kierland Commons: Kierland Commons destinations in north Scottsdale. The open housing in Scottsdale. The McDowell was introduced in the early -2000s, and air center, conveniently located at Frank Mountains provide the only mountainous at the time, was a pioneering model for Lloyd Wright Blvd. and Scottsdale Road, backdrop in Scottsdale and have served as the modern-era successful retail shopping features shopping, dining and retail including a canvas for what has evolved into one of center. This award-winning 38-acre mixed- Nordstrom Rack, Saks Off 5th, Pier 1 Imports, the most upscale and high-profile residential use development combines over 70 shops Maggiano’s, Capital Grille, The Original Chop areas in Arizona. and restaurants with residential and office Shop and Modern Market. space in an outdoor, walkable environment. The numerous and prestigious master- Tenants in Kierland Commons include: Sur MECCA FOR LUXURY HOTELS & planned communities that lie in north La Table, Crate & Barrel, P.F. Chang’s China RESORTS Scottsdale include: Silverleaf, DC Ranch, Bistro, Victoria’s Secret, Anthropology, Desert Mountain, Troon, McDowell Mountain Some of the finest hotels and resorts are Maestro’s Ocean Club, Shake Shack and Ranch, Estancia and Grayhawk. Many located in north Scottsdale, providing a Michael Kors. of these communities contain signature- mecca of hospitality options for vacationers designed golf courses that golfers travel Scottsdale Quarter: Drafting off of Kierland and business travelers. The most noteworthy from all over the country to enjoy. Commons’ vast success, Scottsdale Quarter of these are: the Fairmont Scottsdale was developed directly across Scottsdale Princess Resort, the Four Seasons, The Road. This 370,000 SF mixed-use Westin Kierland Resort & Spa and the FIRST-CLASS RETAIL AMENITIES development combines retail, entertainment Scottsdale Marriott at McDowell Mountain. North Scottsdale is home to some of the office, and multi-family residential. highest-profile and upscale retail shopping Esteemed tenants of the project include: centers in the State. The most notable of NIKE, Apple Store, Dominick’s Steakhouse, which are Kierland Commons and Scottsdale Restoration Hardware, Express, Pottery Barn, and True Food.

22 / 8980 East Raintree 90TH STREET

/ 23 SCOTTSDALE AIRPORT AREA North Scottsdale is home to one of the OVERVIEW busiest single-runway airports in the nation. Given its location, Scottsdale Airport is the highest-profile municipal airport in the greater Phoenix area. Over 400 private and/or corporate aircraft are based at Scottsdale Airport and approximately 200,000 takeoffs and landing operations occur at the airport annually. Several state- of-the-art FBO terminals lie within the airport to accommodate its intense demand. The airport is also renovating several facilities at present.

SCOTTSDALE AIRPARK IS ARIZONA’S SECOND LARGEST EMPLOYMENT CENTER

The tremendous locational qualities of North Scottsdale helped spur tremendous population and employment growth in recent decades. As a result, the Scottsdale Airpark ballooned into the second largest employment center in Arizona. Approximately 17 million SF of office and industrial space is located within the submarket. Further, several million square feet of retail and additional property types are lie within the airpark. It is estimated that 2,900 businesses are located in the Scottsdale Airpark, employing 51,000 people.

24 / 8980 East Raintree DOWNTOWN DOWNTOWN CAMELBACK TEMPE SCOTTSDALE MOUNTAIN TALKING STICK

RAINTREE DRIVE

90TH STREET

NORTH SCOTTSDALE’S SUPERB The Scottsdale Airpark is one of the largest FREEWAY ACCESS employment center in the State of Arizona with more than 2,900 businesses and The Loop 101 Freeway wraps around 51,000 employees in over 17 million square North Scottsdale providing excellent, feet of commercial space. Strategically multi-directional freeway access to the located along the Loop 101 corridor, it Scottsdale Airpark submarket. Through its has access to a workforce of nearly half a eight interchanges, the Loop 101 Freeway million within a 30-minute commute and provides easy access to most all labor pools transportation links include a world-class in the Valley, including: South Scottsdale, municipal general aviation airport. Some of Tempe, the Southeast Valley and Northwest the most prestigious business headquarters Phoenix. Within a 10 minute drive a locations in the western United States can population of over 95,000 is accessed. be found here, including PayPal, Prudential When increasing the drive time to 20 Insurance, Vanguard, Mass Mutual, Pulte minutes the accessible population reaches Homes, Go-Daddy, Allied Waste, and Taser 585,000. International.

/ 25 AREA CITY OF SCOTTSDALE Gen Xers make up the highest OVERVIEW AGE BREAKDOWN percentage of Scottsdale's population.41.5%

<4 3.8%

5-19 14.7% CITY OF 20-34 16.9% 35-64 41.5%

SCOTTSDALE 65-84 20.0%

85+ 3.2% Located in the beautiful Sonoran Desert, Scottsdale is bordered by CITY OF SCOTTSDALE Phoenix to the west and the POPULATION GROWTH Scottsdale is slated to increase by 16,904 people in the next 5 years. 7.0% McDowell Mountains to the east. 260,000 Scottsdale is a premier 250,000 240,000 community known for a high 230,000 quality of life with attractive 220,000 210,000 residential, business and 200,000 shopping areas. One of the most 190,000 180,000 livable cities in the country, 2011 2017 2012 2013 2018 2015 2019 2016 2014 2010 2001 2007 2020 2002 2003 2005 2008 2009 2006 2004 Scottsdale is a place to live, learn, 2000 work, play and raise a family. DEMOGRAPHICS

Ranked in TIME’s “Best 50 • Stretching 31 miles from north • A key characteristic of the local Places to Live 2016” – to south, the Scottsdale area population is the concentration of Scottsdale is the only Arizona encompasses 184.5 square miles. As middle aged residents, with a median one of Arizona’s ten largest cities, the age of 47. The population boasts city to capture the recognition. City of Scottsdale holds a population comparatively high-earnings, with of more than 231,000. an average household income of $113,000.

26 / 8980 East Raintree ECONOMY/EMPLOYMENT • The “Cure Corridor” located along • Downtown Scottsdale is home to a Shea Boulevard and Scottsdale Road number of corporate users, including • Scottsdale is one of the state’s leading boasts the city’s health care and biotech YELP, McKesson and Weebly. Technology job centers with a diverse economy industry clusters. These medical leaders companies and young professionals are built on medical research, high-tech attracted to the area because it provides innovation, tourism and corporate Companies in high-growth sectors a mix of specialty retail, art galleries, headquarters. Scottsdale is home to have elected to locate significant dining to suit every taste, legendary nearly 18,000 businesses, supplying facilities in the Metro Phoenix nightlife, and public art and cultural over 150,000 jobs and more than 20% area, most notably in high-tech, attractions with broad appeal. of Arizona corporate headquarters is earning the designation of the located in the area. In 2016, Forbes • Only a five minute drive from Downtown Silicon Desert. ranked Scottsdale No. 3 in the country Scottsdale is SkySong, the ASU for growth in information economy. Scottsdale Innovation Center, which is are working cooperatively on innovative home to a global business community • The Scottsdale Airpark is one of the research and treatments that are placing linking technology, research, education largest employment centers in the Scottsdale at the forefront of a number and entrepreneurship. This half built State of Arizona with more than 2,900 of medical breakthroughs. Thirteen 42-acre mixed use development will businesses and 51,000 employees in percent of all Metro area bio-life sciences eventually house 1.2 million square over 2 million square feet of commercial employment is located in the City of feet of commercial space with on-site space. Strategically located along the Scottsdale, at facilities such as Mayo luxury residential apartments and retail/ Loop 101 corridor, it has access to a Clinic and Honor Health. restaurant offerings. workforce of nearly half a million within a 30-minute commute and transportation links include a world-class municipal general aviation airport. Some of the most prestigious business headquarters locations in the western United States can be found here, including GoDaddy, Taser, JDA Software, Magellan Health, Nautilus Insurance, Quicken Loans, as well as regional operations for CVS Health and Vanguard.

/ 27 AREA OVERVIEW

TOP SCOTTSDALE EMPLOYERS

6,300 5,383 3,800 3,000 2,700 Employees Employees Employees Employees Employees

2,500 1,884 1,800 1,350 1,000 Employees Employees Employees Employees Employees

OCCUPATIONAL COMPOSITION

51.1% 15.0% 3.2% (62,105) (18,201) (3,942) Management, 27.1% Service Industry 3.6% Natural business, science (32,897) (4,315) resources, and arts construction and Sales and office Production, maintenance transportation and material moving 28 / 8980 East Raintree SCOTTSDALE BUSINESS DIFFERENTIATORS

SCOTTSDALE BUSINESS DIFFERENTIATORS Los San Scottsdale vs Angeles Francisco

$89K AVERAGE TECH SALARIES $105K $118K

$89K X 300 60,000 SF @ 200 SF/PERSON $105K X 300 $118K X 300 EQUALS 300 PEOPLE $26.7MM AVG SALARY X HEADCOUNT = TOTAL ANNUAL SALARY COST $31.5MM $35.4MM

60,000 SF 60,000 SF 60,000 SF @ $35 PSF Gross REAL ESTATE COSTS @ $40 PSF Gross @ $70 PSF Gross CLASS A RENTS - PER YEAR $2.1MM $2.4MM $4.2MM

$267MM + $21MM $315MM + $24MM $354MM + $42MM TOTAL 10 YEAR SALARY COST $288M + REAL ESTATE COST $339MM $396MM

CHOOSING SCOTTSDALE WILL SAVE $51M - $108M in combined labor and real estate costs over a 10-year period

/ 29 AREA

OVERVIEW 20 Minutes 2018 Population: 594,573 ·r SUN COMMUTE/TRANSPORTATION DESERT CITY DEER VALLEY RIDGE

PEORIA 10 Minutes 8980 EAST • Scottsdale’s location makes it one of RAINTREE DRIVE SURPRISE 2018 Population: the Valley’s most desirable addresses. 130,430 ·r Accessible by two freeways, Loop 101 carries SCOTTSDALE commuters to and from the north and south PHOENIX CENTRAL SCOTTSDALE and Loop 202 crosses the southern part PARADISE

LIGHT RAIL VALLEY of the city giving easy access to Phoenix,·r ·r Tempe and Mesa. Other north-south CAMELBACK CORRIDOR corridors through the city’s greenbelts GLENDALE I-17 DOWNTOWN

CORRIDOR SCOTTSDALE provide access to the Scottsdale’s PHOENIX GOODYEAR MIDTOWN ·r employment, shopping and entertainment TOLLESON DOWNTOWN PHOENIX ·r centers. ·r DOWNTOWN ·r TEMPE MESA 30 Minutes LIGHT RAIL TEMPE • Valley Metro operates three express bus 2018 Population: 1,885,749 routes (510, 511 and 512) to and from downtown Phoenix during peak hours, as well as local bus routes. A downtown trolley GILBERT also serves the Scottsdale community. CHANDLER ·r ·r

• Scottsdale is near the heart of the Greater ·r

Phoenix metropolitan area and minutes from CORRIDOR PRICE ROAD Sky Harbor International Airport, offering easy access to more than 80 domestic Scottsdale’s centralized location in the locations and 21 international destinations. Close to California, Texas and Mexico, metropolitan area provides tremendous ease of Scottsdale’s strategic location offers face- to-face connectivity to a massive customer access to over 1M drivers within 30 minutes. base within a few hours of travel.

30 / 8980 East Raintree

·r ·r ·r

·r EDUCATION

• More than 54.6% of the population holds a Bachelor’s degree or higher, making this one of the most highly educated areas in Arizona. Within the community there are five colleges that offer Associates Degrees or Certificates and three universities in the community that offer Bachelor’s Degree or higher.

• Scottsdale students are served by six different school districts that overlap municipal boundaries. The Scottsdale Unified School District is home to 16 elementary schools, two early childhood learning centers, three traditional (K- 8) schools, six middle schools and six high schools. Depending on location in Scottsdale, children may enroll in other school districts. There are also preschools, charter schools, private schools, religious schools and college SCOTTSDALE EDUCATION ATTAINMENT prep schools for students of various ages. Scottsdale’s population Scottsdale’s centralized location in the is highly educated, metropolitan area provides tremendous ease of 11.8% 7.3% 21.8% with 54.6% holding a access to over 1M drivers within 30 minutes. High School Associates Graduate Degree Bachelor’s degree or Graduate 21.0% Degree 32.8% higher. Some College Bachelor’s Degree / 31 AREA CITY OF PHOENIX Gen Xers make up the highest percentage of Phoenix's population. 36.2% OVERVIEW AGE BREAKDOWN <4 7.0%

5-19 20.3% PHOENIX 20-34 21.6% 35-64 36.2%

Metro Phoenix is the fifth largest 65-84 13.1% city in the United States and 85+ 1.8% anchors the nation’s 12th largest metropolitan area, with 4.7 million CITY OF PHOENIX Phoenix is slated to increase by 365,599 people in the next 5 years. 7.7% residents. Greater Phoenix POPULATION GROWTH 5,200,000 encompasses 2,000 square miles 5,000,000 4,800,000 and more than 20 incorporated 4,600,000 4,400,000 cities, including Glendale, 4,200,000 4,000,000 Scottsdale, Tempe and Mesa, and 3,800,000 3,600,000 is the financial, commercial, 3,400,000 3,200,000 1 1 1 7 2 7 3 5 3 8 6 9 4 4 0 0 0 cultural, entertainment and 1 20 1 2 0 20 2 2012 20 1 2015 2018 2019 2016 20 1 20 0 20 1 20 0 20 2 20 0 20 0 20 0 20 0 20 0 20 0 20 0 government center of Arizona. 20 0

Forbes Named Arizona #1 DEMOGRAPHICS in Best States for Future • The population of Greater Phoenix is • The population boasts comparatively Job Growth 4.7 million and is expected to grow high-earnings, with an average to nearly 6.4 million in the next 20 household income of over $77,596. years. A relatively young region, This is well above the national Greater Phoenix has a median age median average household income, of 35.8 – two years younger than the which stands at $55,775. average age nationwide.

32 / 8980 East Raintree ECONOMY/EMPLOYMENT Greater Phoenix’s telecommunications employers such as Yelp, GoDaddy, infrastructure. Phoenix has a predictable PayPal, Zenefits, Infusionsoft, Weebly and • The Metro Phoenix employment base climate and low catastrophic risk – no Clearlink. has grown rapidly in the past 20 years earthquakes, tornadoes or coastal and currently boasts more than 2 million • Phoenix is ranked among the top in flooding. workers. Projected employment by the country for its solar and renewable occupation shows continued strength Companies in high-growth sectors energy sector, and has a rapidly growing in the area’s professional and technical have elected to locate significant healthcare and biomedical industry. With work force, with service employment facilities in the Metro Phoenix $1.3 billion in strategic investments over increasing as well. Arizona is nationally area, most notably in high-tech, the past 10 years added into its emerging ranked #2 as a top state for workforce earning the designation of the healthcare enterprise and research quality and availability, and #1 in higher Silicon Desert. capabilities, Greater Phoenix is the place education degree opportunities. A for healthcare opportunities. Arizona is steady influx of new workers and high • Intel, Freescale, Microchip Technology among national leaders with more than graduation levels from the state’s largest and ON Semiconductor have given 1,400 active clinical trials and is expected university, Arizona State University, Arizona the distinction of being to add 43,000 healthcare jobs in the enrich the quality of labor. Thanks to the fourth largest semiconductor next decade – more than Minneapolis, the variety of universities and technical manufacturing exporter in the nation. Philadelphia, San Francisco and Seattle. schools in the area, the pipeline of skilled In addition, Metro Phoenix also attracts workers continues to grow. major software development and internet

• Metro Phoenix has a diversified base of industries, led by aerospace, high-tech manufacturing, distribution and logistics, financial services and corporate/regional headquarters. Phoenix has recently seen many companies move or expand from California including Google-Waymo, McKesson, Dexcom, DoubleDutch, Entertainment Partners, Uber, and ZipRecruiter. Major data processing, credit card and customer service companies are also attracted to

/ 33 AREA OVERVIEW

TOP PHOENIX EMPLOYERS

27,320 24,670 17,270 13,340 12,960 12,740 Employees Employees Employees Employees Employees Employees

10,550 9,800 9,502 5,235 11,080 10,940 Employees Employees Employees Employees Employees Employees

OCCUPATIONAL COMPOSITION

21.4% 26.6% 11.1% (353,160) (439,690) (184,150) Business, 16.7 Government, 24.2% Consumer Services Financial (275,540) Healthcare, (399,720) Education Hospitality, Manufacturing, Retail, Transportation Entertainment 34 / 8980 East Raintree PHOENIX BUSINESS DIFFERENTIATORS

Los San Phoenix vs Angeles Francisco

$85K AVERAGE TECH SALARIES $105K $118K

$85K X 300 60,000 SF @ 200 SF/PERSON $105K X 300 $118K X 300 EQUALS 300 PEOPLE $25.5MM AVG SALARY X HEADCOUNT = TOTAL ANNUAL SALARY COST $31.5MM $35.4MM

60,000 SF 60,000 SF 60,000 SF @ $30 PSF Gross REAL ESTATE COSTS @ $40 PSF Gross @ $70 PSF Gross CLASS A RENTS - PER YEAR $1.8MM $2.4MM $4.2MM

$250MM + $18MM $315MM + $24MM $354MM + $42MM TOTAL 10 YEAR SALARY COST $268M + REAL ESTATE COST $339MM $396MM

CHOOSING SOUTHEAST VALLEY WILL SAVE $71M - $128M in combined labor and real estate costs over a 10-year period

/ 35 PARADISE VALLEY MALL

KIERLAND COMMONS SCOTTSDALE 05 MARKET SCOTTSDALE PROMENADE TPC SCOTTSDALE QUARTER CHAMPIONS INFORMATION GOLF COURSE

SCOTTSDALE AIRPARK

SONORA VILLAGE

36 / 8980 East Raintree 90TH STREET RAINTREE DRIVE RAINTREE PARADISE VALLEY MALL

KIERLAND COMMONS SCOTTSDALE SCOTTSDALE PROMENADE TPC SCOTTSDALE QUARTER CHAMPIONS GOLF COURSE

SCOTTSDALE AIRPARK

SONORA VILLAGE

90TH STREET / 37 RAINTREE DRIVE RAINTREE MARKET INFORMATION

PHOENIX OFFICE MARKET 4Q 2018

ECONOMY and Class C (+12,000 sf). For the year, Class B space absorbed over +1.6 msf, followed by Class A with 12-Month The Metro Phoenix job market continues to show Q4 17 Q4 18 Forecast over +1.1 msf and Class C with over +58,000 sf, for a signs of improvement, adding over 82,400 jobs Phoenix Employment 2,054k 2,137k total of +2.8 msf of positive absorption. year-over-year through December. During the same Phoenix Unemployment 4.0% 3.9% time period, the unemployment rate remained at Out of Metro Phoenix’s 22 office submarkets, 12 U.S. Unemployment 4.1% 3.7% 3.9%. According to the Bureau of Labor Statistics, experienced positive absorption in the fourth quarter *Q2 data is based on the U.S. Bureau of Labor Statistics, All Employees: Total Nonfarm in of 2018. Tempe North submarket led with +265,200 Phoenix-Mesa-Scottsdale, AZ (MSA). the Phoenix metropolitan statistical area added 25,000 office sector jobs through the fourth sf due in large part to McKesson occupying 177,600 quarter 2018. The three sectors that make up office sf in State Farms old buildings. Scottsdale Airpark Market Indicators (Overall, All Classes) employment are: business & professional services, followed with +153,600 sf with notable move ins 12-Month 2017 2018 Forecast information/technology and financial activities. such as P.F. Chang’s (+53,000 sf) and CVS Caremark Vacancy 17.4% 15.6% (+52,000 sf). The Chandler/Gilbert/202 submarket Net Absorption (sf) 1.4m 2.8m (+135,500 sf) can be attributed to Deloitte occupying Under Construction (sf) 1,4m 2.7m MARKET OVERVIEW +102,000 sf at the newly developed Commons at Average Asking Rent* $25.13 $25.83 In the fourth quarter of 2018, vacancy in the Metro Rivulon. Ten of the 22 submarkets experienced *Rental rates reflect overall gross asking $psf/year Phoenix office market stood at 15.6%, dropping 180 negative absorption in fourth quarter 2018, led basis-points (bps) from the fourth quarter 2017 rate by the Downtown submarket (-125,800 sf). At the of 17.4%. This is the lowest vacancy rate since fourth close of 2018, 18 out of 22 submarkets experience Overall Net Absorption/Overall Asking Rent Overall Net Absorption/Overall Asking Rent quarter 2007 (14.3%). positive annual occupancy growth led by Tempe 3-QTR TRAILING AVERAGE 4-QTR TRAILING AVERAGE North (+1.0 msf), Price Corridor (+450,000 sf) and The Metro Phoenix office market continued to Chandler/Gilbert/202 (+325,000 sf) submarkets. 1,200 $26.00 experience robust demand in fourth quarter 2018, The Metrocenter (-168,000 sf) and West Phoenix $25.00 absorbing +640,000 square feet (sf). This brings 1,000 (-56,000 sf) submarkets experienced negative $24.00 the 2018 total to +2.8 million square feet (msf), more 800 absorption. $23.00 than double the square footage absorbed in 2017 600 $22.00 (+1.4 msf). This marks the seventh largest net gain 400 $21.00 for a single year going back to 1999. The largest NEW DEVELOPMENT 200 $20.00 net gain for any single year posted was +4.2 msf in Throughout 2018, developers delivered just under 0 $19.00 2005. In fourth quarter 2018, all building classes (A- 1.3 msf of new product to the Metro Phoenix office Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 C) posted positive occupancy growth led by Class market. Seven speculative projects introduced over Net Absorption, MSF Asking Rent, $ PSF B (+333,000 sf), followed by Class A (+295,000 sf) 734,000 sf and three built-to-suits (bts) delivered

38 / 8980 East Raintree SCOTTSDALE AIRPARK SUBMARKET

The Scottsdale Airpark office submarket, with 10.1 million SF, is the second largest submarket in Metro Phoenix. The combination of north Scottsdale’s abundant upscale housing and its high quality demography has helped grow to a commerce park that houses over 17 million SF of office and industrial space, making it the second largest employment center in the Valley. The Scottsdale Airpark is estimated to contain approximately 2,900 businesses and 51,000 employees. The direct office vacancy rate for the Scottsdale Airpark stands at 10.3% as of the fourth quarter of 2018, 420 basis points lower than the overall Metro Phoenix vacancy rate. The submarket absorbed 259,295 during 2018 and the average asking lease rate stood at $29.60/SF FSG. Over the past three years asking lease rates have risen by over 6% and over 26% since 2013— highlighting the intense tenant demand for the submarket. The submarket ranks third out of Metro Phoenix’s 22 submarkets in terms of net absorption from 2013 to present. over 545,000 sf. Currently, Metro Phoenix has 2.7 msf under construction, with 13 speculative projects totaling 2.2 msf and four bts projects totaling BY THE NUMBERS: Scottsdale Airpark vs. Metro Phoenix 563,000 sf. The Tempe North submarket accounts Submarket Total Inventory Direct 2018 Net for six of the 17 projects under construction totaling Asking Rent 1.2 msf, followed by Price Corridor with four projects Property Type Square Feet Vacancy Absorption totaling 623,000 sf. Class A product continues to Scottsdale Airpark dominate the entire market with 14 projects under Total 10,106,532 10.3% $29.60 259,295 construction accounting for over 2.3 msf. Of the 2.3 msf of Class A product under construction, 2.1 msf is Metro Phoenix expected to deliver by the end of 2019. Total 102,920,586 14.5% $25.28 2,785,231

MARKET RENTS Scottsdale Airpark The overall rent in the Metro Phoenix office market Net Absorption, Completions & Vacancy increased in fourth quarter 2018, to $25.83 per square foot (psf) on an annual full-service basis. This $33.00 25.0% accounts for a 2.8% ($0.70 psf) increase from fourth $31.00 quarter 2017. The Price Corridor submarket led with 20.0% a 12.3% increase in overall asking rates, followed by $29.00 East-Central Phoenix (9.4%) and Deer Valley (8.7%). The Camelback Corridor and South Scottsdale $27.00 15.0% submarkets continue to lead the market in highest $25.00 Direct Average Rate rental rates. Glendale/Peoria remains the smallest Class A Direct Average Rate and least expensive office submarket. $23.00 Direct Vacancy 10.0% Class A Direct Vacancy

$21.00

$19.00 5.0%

$17.00

$15.00 0.0% 2014 2015 2016 2017 2018

/ 39 MARKET INFORMATION METRO PHOENIX OFFICE SNAPSHOT 4Q 2018

OVERALL DIRECT TOTAL SUBLET DIRECT VACANCY Q4 NET 2018 NET UNDER AVG SUBMARKET INVENTORY ASKING BLDGS VACANT VACANT RATE ABSORPTION ABSORPTION CONSTRUCTION ASKING RENT RENT

OUTLOOK Downtown 42 7,217,776 92,824 1,076,346 16.2% -125,834 129,830 328,402 $30.16 $30.87

Midtown 82 10,518,389 48,139 2,388,330 23.2% -10,891 8,592 0 $22.59 $23.15 • Absorption was positive in all quarter of 2018; and CBD Total 124 17,736,165 140,963 3,464,676 20.3% -136,725 138,422 328,402 $25.07 $25.59 in 18 of 22 submarkets for the year, with no strong winners or losers. With the bulk of development 44th Street Corridor 42 3,389,155 22,083 457,975 14.2% 89,757 145,243 0 $25.78 $26.34 concentrated in just three submarkets (Tempe North, Arrowhead 23 1,448,463 2,114 67,508 4.8% 30,320 63,915 0 $23.72 $23.69 Price Corridor and Downtown), we expect submarket Camelback Corridor 72 7,364,794 94,211 1,268,928 18.5% -79,809 -31,890 0 $33.09 $33.33 absorption to be more uneven, with higher highs and Chandler/Gilbert/202 43 2,762,651 7,000 864,668 31.6% 135,482 324,880 166,888 $25.56 $25.56 lower lows, in 2019 and 2020. Deer Valley 73 7,742,376 3,346 939,370 12.2% -5,800 142,741 150,000 $24.60 $24.63 East-Central Phoenix 44 2,020,173 0 215,116 10.6% 38,419 34,713 0 $21.59 $21.59 • Demand for coworking space increased throughout Glendale/Peoria 14 831,080 0 67,354 8.1% -4,856 9,546 0 $17.73 $17.73 2018 with firms such as WeWork, Workuity, Spaces Mesa 24 1,239,068 20,816 133,934 12.5% 14,336 61,346 0 $20.79 $20.76 and Industrious increasing their footprints in Metro Metrocenter 67 4,584,900 11,904 1,266,548 27.9% -49,850 -167,888 0 $20.38 $20.45 Phoenix. This trend is expected to continue in 2019 N Phoenix/Desert Ridge 36 2,534,993 47,085 309,369 14.1% 24,521 -18,194 0 $25.22 $25.07 as these firms expand further into large blocks of Piestewa Peak Corridor 32 1,972,910 39,534 372,814 20.9% 19,526 38,839 0 $20.76 $21.21 vacant space and new companies like Serendipity Price Corridor 59 6,332,824 3,333 487,138 7.7% 65,690 450,677 623,370 $28.07 $28.60 Labs and Novel Coworking enter the market. Scottsdale Airpark 145 10,106,532 406,512 1,042,487 14.3% 153,629 259,295 0 $28.92 $29.60

• Build-to-suit projects can move very quickly in Metro Scottsdale Central 67 5,257,817 65,009 484,129 10.4% -28,557 38,353 0 $27.21 $28.32

Phoenix. Phoenix has shorter construction periods Scottsdale South 37 4,011,416 45,653 651,168 17.4% -26,306 10,474 274,338 $31.25 $32.05

than other cities, so the current pipeline for 2020 Sky Harbor 54 4,902,235 40,098 900,954 19.2% 114,667 255,041 0 $22.99 $23.53

deliveries is too early to predict. South I-10/Ahwatukee 56 3,181,548 48,048 326,634 11.8% 53,918 13,999 0 $21.49 $21.69

Superstition Corridor 45 2,425,915 13,051 326,704 14.0% -12,962 59,445 0 $20.50 $21.10 • Vacancy rates dropped considerably during 2018, Tempe North 98 11,407,422 164,674 957,125 9.8% 265,257 1,011,984 1,169,628 $27.93 $28.12 finishing at 15.6%—declining over 180 bps since fourth quarter 2017. The vacancy rate is anticipated West Phoenix 37 1,668,149 0 295,202 17.7% -20,709 -55,710 0 $18.83 $18.83 to drop in 2019. Arizona’s low unemployment rate Suburban Total 1,068 85,184,421 1,034,471 11,435,125 14.6% 776,673 2,646,809 2,384,224 $26.03 $26.18 and favorable outlook should yield considerable OVERALL DIRECT TOTAL SUBLET DIRECT VACANCY Q4 NET 2018 NET UNDER AVG growth in population and GDP, which outpaces the CLASS INVENTORY ASKING BLDGS VACANT VACANT RATE ABSORPTION ABSORPTION CONSTRUCTION ASKING RENT country as a whole. RENT Class A 266 42,520,988 689,727 5,075,625 13.6% 295,039 1,141,002 2,339,256 $30.30 $30.99

Class B 741 53,053,521 449,736 8,720,432 17.3% 333,019 1,586,059 373,370 $23.59 $23.83

Class C 185 7,346,077 35,971 1,103,744 15.5% 11,890 58,170 0 $18.69 $18.67

Grand Total 1,192 102,920,586 1,175,434 14,899,801 15.6% 639,948 2,785,231 2,712,626 $25.83 $26.05

40 / 8980 East Raintree METRO PHOENIX OFFICE SUBMARKET MAP

CAREFREE HWY WESTLAND RD DOVE VALLEY RD N 1 - 44th Street Corridor

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/ 41 06 FINANCIAL INFORMATION

42 / 8980 East Raintree / 43 FINANCIAL INFORMATION

NET OPERATING INCOME

Static In-Place Forward Looking Year 1 PSF Property Size 7,561 SF Occupancy 100.0% INCOME (1) Avg. Base Scheduled Rental Income $161,474 Rent $21.36

Reimbursement Income $0 Parking & Other Income $2,400

EFFECTIVE GROSS INCOME $163,874 $21.67

OPERATING EXPENSES (4) Repairs & Maintenance $2,700 $0.36 Utilities $19,227 $2.54 Association Fee $10,552 $1.40 Insurance $1,250 $0.17 Management 4.0% $6,459 $0.85 Real Estate Taxes $12,446 $1.65 Janitorial (common area) $2,915 $0.39 TOTAL OPERATING EXPENSES $55,548 $7.35

Net Operating Income $108,325 $14.33

Price $1,600,000 $212

Leasing Costs (TI / LC)

Capitalization Rate 6.8%

44 / 8980 East Raintree RENT ROLL

Occupied Suites:

Suite Tenant Business Lines Size Term Rent/SF Rent/Yr Increases Stop Comments:

100 Banking & Trust 2,185 See Comments $22.00 $48,070 Owner's suite. Will sign a new lease Month-to Month for up to 2 years at $22.00/SF FSG. Willing to vacate for a user buyer .

110 Law Firm 1,880 4/15/18 4/30/21 $21.50 $40,420 5/1/20 $22.00 Tenant pays own janitorial. Utilities 37 Months are included in lease rate. Lease guaranty.

120 Financial Services 1,746 1/1/17 1/31/20 $19.00 $33,174 Tenant pays own janitorial. Utilities 37 Months are included in lease rate. Three 1-year optio to renew at market with notice.

130 Mortgage Firm 1,750 6/1/18 6/30/20 $22.00 $38,500 7/1/20 $23.00 Tenant pays own janitorial. Utilities 25 Months are included in lease rate. If tenant renews lease, rate will be $23/SF

Occupied Total: 7,561 Sq. Ft. Percent Occupied: 100.00%

/ 45 FINANCIAL INFORMATION

STATIC8980 East CASH Raintree FLOW Drive IN PLACE LOOKING FORWARD 1 YEAR Scheduled Monthly Rental Income For the Calendar Year May 2019 through April 2020

2019 2020

Existing Tenants Suite Mkt Rate Sq. Ft. May June July August September October November December January February March April Total

Banking & Trust 100 $22.00 2,185 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $4,006 $48,070 Law Firm 110 $22.00 1,880 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $3,368 $40,420 Financial Services 120 $22.00 1,746 $2,765 $2,765 $2,765 $2,765 $2,765 $2,765 $2,765 $2,765 $2,765 $3,201 $3,201 $3,201 $34,484 Mortgage Firm 130 $22.00 1,750 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $3,208 $38,500

Existing Tenant Total: 7,561 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,784 $13,784 $13,784 $161,474

2019 2020

Available Suites Suite Mkt Rate Sq. Ft. May June July August September October November December January February March April Total

Available Suite $0.00 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Vacant Suite Total: 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

ESTIMATED TOTAL: 7,561 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,347 $13,784 $13,784 $13,784 $161,474

* Shaded areas indicate an expiration yielding a renewal or a releasing of the suite.

46 / 8980 East Raintree / 47

DISCLAIMER

This projection is based on assumptions reflecting a certain set of conditions. However, some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results achieved may vary from our estimates, and the variation may be material. Cushman & Wakefield extends no guarantees and makes no warranties, expressed or implied, with respect to this projection. In that regard, neither Cushman & Wakefield nor any affiliate, employee, officer, director, shareholder, or agent thereof, shall have any liability whatsoever arising from this projection or the actual results achieved.

The information and opinion contained herein are furnished as a real estate brokerage service by Cushman & Wakefield based upon comparative market data. It is not an appraisal. Cushman & Wakefield is not an MAI qualified appraiser, nor is it qualified or authorized to give legal or tax advice in regard to any proposed transaction. If you desire such advice, you are encouraged to consult with a professional appraiser, attorney and/or accountant. CAPITAL MARKETS

ERIC WICHTERMAN Executive Managing Director +1 602 224 4471 [email protected]

MIKE COOVER Managing Director +1 602 224 4473 [email protected]