Sony Pictures Entertainment Inc. Studio Lot Office Building Project – Request for Proposal April 2014 Sony Pictures Entertainment Inc. Confidential and proprietary RE: Request for Proposal Sony Pictures Entertainment Inc. Studio Lot Office Building Project Dear Investor: JLL has been retained as the exclusive real estate advisor to Sony Pictures Entertainment Inc. (the “Tenant” or “SPE”). Currently, as the exclusive representative for the Tenant, we are interested in establishing a working relationship with an investor who is qualified to own SPE’s new build-to-suit office building in Culver City, California (“Project”). For your consideration JLL has assembled this Request for Proposal (“RFP”) to develop and/or take ownership of the Project on a ground lease basis. We are requesting that you submit your response by Friday, May 2, 2014: Project: Sony Pictures Entertainment Inc. Studio Lot Office Building Project Potential Address: Culver City, California Please provide your proposal in accordance with the specifications as outlined in this RFP document and send it back to the attention of Bruce Westwood-Booth via email at [email protected]. This is a highly confidential project and is subject to the Confidentiality Agreement previously signed by you and Tenant. Any disclosure both within and outside your firm may be made only in strict accordance with the terms of that Confidentiality Agreement. The Project must remain confidential until further notice and may then be disclosed only to the extent set forth in such notice. JLL will be available to answer any questions and address investor comments relative to this project up until Friday, May 2, 2014. Respondent interviews with SPE will be held between May 12 and May 16, 2014. Best and final bids will be due on May 30, 2014. Final presentations to JLL and SPE will be held from May 26 through May 30, 2014 and the developer and ownership team will be selected by June 6, 2014. We have been asked to inform you that you should not contact our client regarding this letter or any matters related to the Project; only JLL should be contacted. Questions regarding the RFP process, timeline and inquiries should be submitted to any of the Jones Lang LaSalle representatives listed below. We look forward to working with you and are available to address any questions or comments. RFP & Transaction Structure Local Market & Entertainment Industry Bruce Westwood-Booth Robert Dmytryk Rob Bickel Carl Muhlstein Managing Director Managing Director Managing Director Managing Director +1 312 228 2966 +1 858 410 1211 +1 213 239 6141 +1 213 239 6055 [email protected] [email protected] [email protected] [email protected] Sony Pictures Entertainment Inc. Confidential and proprietary 1 RE: Request for Proposal (cont.) Scope and the Objectives of the RFP Sony Pictures Entertainment is headquartered in Culver City, California on a Studio Lot that encompasses 46 acres of land, approximately 1.1 million square feet of office and support space, and features 22 sound stages. SPE is seeking a partner to develop, finance, own, and lease to SPE, a new 223,540 square foot office building to be located on a portion of land on the western edge of the Studio Lot that currently functions as a surface parking lot. SPE will enter into a ground lease for the land, and SPE will act as the construction agent for the Project. Total Project Costs are more fully broken down in the Project Budget, attached hereto. These costs are based on the supplied specifications where the estimated total costs of development are $129.1 million. It is expected that SPE will additionally invest $17.0 million into this Project in the form of FF&E: furniture, technology and equipment. A high level break down of the development timing is as follows: Description Timing Predevelopment Activities & Procurement of Materials Q2, 2014 through Q4, 2014 Construction Commencement & Demolition Q4, 2014 Site Improvements Q4, 2014 through Q1, 2016 Core & Shell Construction Q4, 2014 through Q3, 2015 Interior Build Out Q3, 2015 through Q2, 2016 Punch List Items & Completion Q2, 2016 through Q3, 2016 Occupancy Q3 2016 The RFP is intended to identify the firm that can: 1) Assume responsibility for the development of the Project; 2) Guarantee pricing and completion; and 3) Be the Landlord to SPE under a long term absolute triple net lease which will have an initial lease term of 15 to 20 years. The objective of the RFP process is to identify a developer and/or owner that: . Has a proven track record of success handling a project of this type and scope; . Has the financial wherewithal to fund the Project; . Is willing and able to work within the intended timelines; and . Is willing and able to work to insure that the lease will conform to Operating Lease guidelines as currently defined under GAAP. The RFP is divided into three (3) sections related to: . Overview of the bidder, . Development process for the Project, and . Long term ownership of the property. Please respond to the specific requests stated in the RFP and provide any additional input that you think would be beneficial. Sony Pictures Entertainment Inc. Confidential and proprietary 2 Table of Contents Project Overview 4 Tenant Overview 12 Location Highlights 14 Project Budget 22 Timeline 24 Bid Request 26 Formal Request for Proposal 29 Sony Pictures Entertainment and JLL would like to stress the extreme confidential nature of this bid package. The Project is highly confidential and bidders are reminded that they are under a Confidentiality and Non-Disclosure Agreement. Sony Pictures Entertainment Inc. Confidential and proprietary Confidential and proprietary Project Overview Sony Pictures Entertainment Inc. Confidential and proprietary Confidential and proprietary Background and Opportunity JLL is pleased to have the opportunity to represent Sony Pictures Entertainment Inc. (the “Tenant” or “SPE”). SPE is a subsidiary of Sony Entertainment Inc., a subsidiary of Tokyo-based Sony Corporation. SPE's global operations encompass motion picture production, acquisition and distribution, television production, acquisition and distribution, television networks, digital content creation and distribution, operation of studio facilities, and development of new entertainment products, services and technologies. BACKGROUND . SPE is headquartered in Culver City, California on a Studio lot encompassing 46 acres of land, approximately 1.1 million square feet of office and support space and features 22 sound stages. SPE leases an additional 750,000 square feet in and around Culver City for office and support requirements. The Studio Lot accommodates approximately 1,600 employees while an additional 1,800 employees are located in leased facilities around Culver City. OPPORTUNITY . SPE is seeking a partner to develop, finance, own, and lease to SPE, a new 223,540 square foot office building to be located on a portion of land on the western edge of the Studio Lot. SPE will enter into a ground lease for their land. The landlord will also receive a long-term easement agreement to the Overland Garage for sufficient market parking rights. 720 parking spaces (3.5/1,000) are required, however up to 950 spaces could be provided. Construction of the new building is anticipated to commence 4th Quarter 2014. Completion of the Project and occupancy is estimated to be no later than 3rd Quarter 2016. Sony Pictures Entertainment Inc. Confidential and proprietary 5 Conceptual Project Renderings View from B Street towards the West Sony Pictures Entertainment Inc. Confidential and proprietary 6 Conceptual Project Renderings (cont.) View from Overland Avenue towards the North Sony Pictures Entertainment Inc. Confidential and proprietary 7 Conceptual Project Renderings (cont.) View from B Street and 9th Avenue towards the North Sony Pictures Entertainment Inc. Confidential and proprietary 8 Location & Aerial PROPOSED: New, 8-Story Building 223,540 SF Sony Pictures Entertainment Inc. Confidential and proprietary 9 Site Plan New 8-Story Building Acquired parking rights and access through long-term Easement Agreement Sony Pictures Entertainment Inc. Confidential and proprietary 10 Project Team Consultants Architect Legal Counsel Legal Counsel Development Consultant MEP Engineers Project Management THE GEORGETOWN COMPANY Traffic Consultant Civil Engineers Structural Engineers Note: - CW Driver and Matt Construction have been shortlisted by SPE to be the General Contractor for Pre-construction Services Sony Pictures Entertainment Inc. Confidential and proprietary 11 Tenant Overview Sony Pictures Entertainment Inc. Confidential and proprietary Confidential and proprietary Sony Pictures Entertainment Company Overview Sony Pictures Entertainment Inc. (“SPE”) is a subsidiary of Sony Entertainment Inc., a subsidiary of Tokyo-based Sony Corporation. SPE's global operations encompass motion picture production, acquisition and distribution; television production, acquisition and distribution; television networks; digital content creation and distribution; operation of studio facilities; and development of new entertainment products, services and technologies. Additional information is available at www.sonypictures.com. SPE is headquartered in Culver City, California and serves as Sony’s main global film production and distribution company. SPE’s rich history can be traced back to 1918 when brothers Harry and Jack Cohn formed a partnership with their associate, Joe Brandt, to form CBC Film Sales, to produce