Owner/User Investment Opportunity > 601 VALLEY STREET SEATTLE, 98109

GREG INGLIN CHARLIE FARRA Senior Vice President Vice President 206 515 4490 206 515 4495 greg.inglin@.com [email protected] DISCLAIMER

This property is offered on an as-is basis. Seller will consider offers on an all cash or cash-to-new-loan basis only. Legal documents and reports summarized in this Offering Memorandum are not intended to be comprehensive statements of the terms or contents of such documents and reports. Although the Seller and Colliers International believe the information to be accurate, no warranty or representation is made as to its accuracy or completeness. Interested parties should conduct independent investigations and reach conclusions without reliance on materials contained herein.

The Seller reserves the right, for any or no reason, to withdraw any property from the market. The Seller has no obligation expressed or implied, to accept any offer. Further, the Seller has no obligation to sell any property unless and until the Seller executes and delivers a signed contract of sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, the offeror will be deemed to have acknowledged the foregoing and agreed to release the Seller from any liability with respect thereto.

The material contained in this Offering Memorandum is confidential, furnished solely for the purpose of considering the purchase of the property described herein and is not to be copied and/or used for any other purpose, or made available to any other person without the express written consent of Colliers International or the Seller.

Please deliver offers to the office of the Exclusive Listing Broker, Colliers International attention Greg Inglin and Charlie Farra facilitate analysis of offers. Offerors are encouraged to provide information relative to funding sources, experience in owning and operating similar properties, familiarity with the market and any other information which is likely to favorably reflect on the offeror’s ability to close this proposed transaction in a timely manner.

Please schedule tours of the property through Greg Inglin and Charlie Farra at the address and phone number listed below.

GREG INGLIN CHARLIE FARRA COLLIERS INTERNATIONAL Senior Vice President Vice President 601 Union St., Ste. 5300 206 515 4490 206 515 4495 Seattle, WA 98101 [email protected] [email protected] www.colliers.com

P. 2 COLLIERS INTERNATIONAL 3rd Floor Board Room TABLE OF CONTENTS

EXECUTIVE SUMMARY PROPERTY OVERVIEW Summary 4 Overview 10 Investment Highlights 4 Site Plan 11 Floor Plans 12 MAPS Corporate Neighbors 6 MARKET ANALYSIS Aerial Map 7 Seattle Overview 17 Greater Seattle Map 8 Sale Comps 20 EXECUTIVE SUMMARY & INVESTMENT HIGHLIGHTS

601 Valley Street offers an opportunity for an investor or owner/user to purchase a piece of Seattle’s vibrant commercial real estate market. Located in the popular lower Queen Anne neighborhood, 601 Valley Street provides approximately 17,295 square feet of office space with ample parking. With corporate neighbors such as the Bill & Melinda Gates Foundation, Facebook, Amazon, Google, and UW Medicine, this office building allows a future owner or tenant to operate amongst some of the biggest names in the world. With easy access to Mercer Street and the future North Portal tunnel entrance, the property allows for direct access to I-5 and Highway 99.

THE OFFERING OFFICE VACANCY (SEATTLE: 8.3%) »» 17,295 Square feet over 3 floors of office space Submarkets: Queen Anne: 6.6% FLOOR SQUARE FEET Lake Union: 10.7% 1st 5,770 Denny Regrade: 4.7% 2nd 5,767 3rd 5,758 PRICE Total 17,295 SF $7,000,000

»» 15,840 SF land (two parcel parcels) »» 25 on-site parking spaces »» Built in 1969, renovated in 1990 »» Masonry construction »» Parcel Numbers: 224900-0210/0230 »» Zoning: NC3-40

LOCATION »» Premier, close-in Seattle location »» Easy access to South Lake Union, Queen Anne, Fremont, and the CBD »» Direct access to Hwy 99 and I-5 access via Mercer Street »» Walking distance to the Seattle Center and lower Queen Anne retailers

P. 4 COLLIERS INTERNATIONAL MAPS

Lake Union

99

601 Valley Street

Mercer Street MAPS > CORPORATE NEIGHBORS

Seattle Tech Tenant in South Lake Union

MERCER STREET PHASE-IN TO BEGIN IN 2019

99

601 Valley Street

P. 6 COLLIERS INTERNATIONAL MAPS > QUEEN ANNE AERIAL & PROPERTY VIEWS

CAPITOL HILL DOWNTOWN SEATTLE

SOUTH LAKE UNION

MERCER STREET

MERCER STREET DEXTER AVENUE NORTH

LAKE UNION 99

601 Valley Street QUEEN ANNE

SOUTH VIEW NORTH VIEW

P. 7 COLLIERS INTERNATIONAL MAPS > GREATER SEATTLE AREA

I-90

I-5

Hwy 99

SR 520

99 Aurora Bridge Aurora

QUEEN ANNE

Lake Union

West Mercer Place Turner Way East East Madison Street 19th Avenue East West Roy Street North Avenue Dexter Valley Street

Mercer Street Mercer Street East Roy Street 5th Avenue North SOUTH LAKE 601 VALLEY STSEATTLE CENTER UNION CAPITOL HILL

DOWNTOWN SEATTLE 7th Avenue Puget CENTRAL Lake Sound DISTRICT Washiongton

Century Link Field

Safeco Field

Southwest Florida Street

6th Avenue South 6th Avenue South College Street East Marginal Way South Way Marginal East

WEST SEATTLE BRIDGE BEACON HILL

99 East Marginal Way South Way East Marginal

P. 8 COLLIERS INTERNATIONAL PROPERTY OVERVIEW

Main Lobby PROPERTY OVERVIEW > OVERVIEW

PROPERTY DESCRIPTION ELEVATOR Address: 601 Valley Street, Seattle, WA 98109 There is one passenger elevator that services all Parcel Numbers: 224900-0210/0230 floors and is adjacent to the main lobby. The 1996 Schindler Elevator has a 2,100-pound capacity, and Lot Size: 0.36 acres (15,840 square feet) has protective curtains that can be utilized for tenant Gross Building Size: ±17,295 SF moves. Office Space: Approximately ±17,295 SF Year Built: 1969, renovated in 1990 POWER Zoning: NC3-40 The property has a service input of 600 amps, and Construction Type: Masonry each floor has an electrical room where the sub- panels and circuit breakers for that floor are located. Parking: 25 stalls Access: Located at the corner of Valley Street and 6th Avenue North, the property is just two blocks North of HVAC Mercer Street, which provides direct ingress/egress There are six Trane roof top HVAC units totaling 27 to I-5 Northbound and Southbound. Dexter Avenue tons of heating and cooling capacity, installed in 2002. North is three blocks away (via 6th Ave North and Mercer Street), providing access to Lake Union and the CBD to the South, and Fremont to the North. SECURITY SYSTEM The property features a monitored security system monitored by Guardian Security. STAIRS AND EXITS The main entrance to the building is from the parking lot, which drivers access via 6th Avenue North. A ROOF staircase to the main entrance provides access to Installed in 2002, the flat roof material is a black, PVC the building lobby, where the main reception area membrane. can be found. ADA access is provided via a ramp at this same entrance. There are fire staircases in the Northwest corner and the Southeast corner of the DATA AND PHONE SERVICE building, providing tenant access to all floors. Comcast, Level 3, and Century Link

P. 10 COLLIERS INTERNATIONAL PROPERTY OVERVIEW > SITE PLAN

Valley Street 5th Avenue North 5th Avenue Taylor Avenue North Avenue Taylor Dexter Avenue North Avenue Dexter

99

601 Valley Street

Roy Street

P. 11 COLLIERS INTERNATIONAL PROPERTY OVERVIEW > FLOOR PLANS

Valley Street 6th Avenue North 6th Avenue

FILING/WORK ROOM FILING/WORK ROOM FILING/WORK ROOM FILING/WORK ROOM

FLOOR 1

Valley Street 6th Avenue North 6th Avenue

FLOOR 2

P. 12 COLLIERS INTERNATIONAL PROPERTY OVERVIEW > FLOOR PLANS

Valley Street 6th Avenue North 6th Avenue

FLOOR 3

FLOOR SQUARE FEET 1st 5,770 2nd 5,767 3rd 5,758 Total 17,295 SF

P. 13 COLLIERS INTERNATIONAL 19 Private Offices

3rd Floor Kitchen 2nd Floor Training Room

Private Office MARKET ANALYSIS MARKET ANALYSIS > SEATTLE OVERVIEW RESEARCH & FORECAST REPORT PUGET SOUND REGION | Q1 2016 | OFFICE

REGIONAL SUMMARY

The good times kept right on rolling into 2016 across the Seattle/Puget Sound office market. The regional vacancy rate declined to 8.9% and posted 812k SF of positive net absorption. In Seattle, the vacancy rate declined to 8.3% and absorption totaled 157k SF, as large, previously-signed, leases commenced including Avvo, Groupon, Tommy Bahama and Uber. Office developers continued to make headlines this quarter as Amazon pre-leased all of Schnitzer West’s Urban Union, Google pre-leased 600k SF at Vulcan’s Lakefront Blocks, and Saltchuk pre-leased 90k SF at Hudson Pacific’s 450 Alaskan. On the Eastside, the vacancy rate declined to 7.7% and absorption totaled 473k SF as Google and Microsoft each completed campus expansions in Kirkland and Redmond, respectively. Wright Runstad’s Spring District redevelopment in Suburban Bellevue enticed REI to build a new HQ campus there, joining the Global Innovation Exchange which also pre-leased 96k SF at this project. In the suburban submarket of Kirkland, Tableau pre-leased 115k SF and Wave pre-leased 87k SF at Talon’s Kirkland Urban development. Office developers in Bellevue’s CBD have not been as fortunate; pre-leasing at Kemper’s 400 Lincoln and Schnitzer West’s Centre 425 amount to just 5%, and as delivery schedules wind down, the vacancy rate in Bellevue CBD is very likely to rise significantly at the end of 2016 as a result. Looking forward, notable tenants in the market for new space include; Avalara, Big Fish Games, F5, Precor, , Valve, Verizon and WeWork. REGIONAL VACANCY ECONOMIC DRIVERS » Seattle vacancy rate is 8.3%; 10 basis points below last quarter, and 1.3% lower than Q1 2015. » Eastside vacancy rate is 7.7%; 10 basis points below last quarter, but 20 basis MARKET INDICATORS Q1 2016 YoY points higher than Q1 2015.

REGIONAL ABSORPTION VACANCY » Seattle submarkets recorded 156k SF of positive net absorption, all of it concentrated in Class A buildings. » Eastside submarkets recorded 472k SF of positive net absorption as Google and RENTAL RATES Microsoft expand their campus in Kirkland and Redmond, respectively. REGIONAL CONSTRUCTION ACTIVITY NET ABSORPTION » 24 office buildings are under construction across the region totaling 7.7 million SF. » Seattle has 5.5 million SF under construction with 4.2 million SF being built speculatively – nearly 45% of spec space is preleased. CONSTRUCTION » Bellevue CBD has 1.1 million SF of speculative office under construction, 5% is preleased. The Spring District and Kirkland Urban have not broken ground yet. REGIONAL SALES ACTIVITY SALES VOLUME » Sales volume totaled $1.2 billion during Q1 2016 at an average of $396 per SF, per Real Capital Analytics. » The West 8th office building in Seattle, which is leased to Amazon, was the highest SALE PRICE priced trade of the quarter at $715 per SF or $370 million.

RENTAL RATE QUARTERLY COMPARISON Quarter over Quarter Year over Year

Market Q1 2016 Q4 2015 QoQ % Change Q1 2016 Q1 2015 YoY % Change

Seattle CBD: Class A $40.37 $40.17 0.5% $40.37 $36.87 9.5%

Seattle CBD: Class B $28.99 $29.75 -2.6% $28.99 $29.93 -3.1%

Bellevue CBD: Class A $39.89 $38.81 2.8% $39.89 $37.80 5.5%

Bellevue CBD: Class B $36.45 $36.03 1.2% $36.45 $31.73 14.9%

*Rates represent full service asking rents for available space.

P. 17 COLLIERS INTERNATIONAL MARKET ANALYSIS > SEATTLE OVERVIEW

MARKET OVERVIEW

EXISTING PROPERTIES ABSORPTION Total Direct Sublease Total Vacancy Rate Absorption Absorption Stock Inventory Vacant Vacant Vacant Current Period Current Quarter YTD (SF) (SF) (SF) (SF) (%) (SF) (SF) Seattle Office: Class A 114 35,685,732 2,736,168 84,443 2,820,611 7.9% 414,787 414,787 Class B 301 20,257,332 1,796,178 73,762 1,869,940 9.2% (239,198) (239,198) Class C 131 3,068,991 196,711 4,230 200,941 6.5% (18,594) (18,594) Total 546 59,012,055 4,729,057 162,435 4,891,492 8.3% 156,995 156,995 Eastside Office: Class A 117 19,150,332 1,427,779 79,770 1,507,549 7.9% 487,157 487,157 Class B 391 17,502,645 1,181,718 208,460 1,390,178 7.9% (16,955) (16,955) Class C 74 1,418,614 28,714 - 28,714 2.0% 2,383 2,383 Total 582 38,071,591 2,638,211 288,230 2,926,441 7.7% 472,585 472,585 Northend Office: Class A 13 1,461,153 239,226 10,661 249,887 17.1% 977 977 Class B 209 8,376,093 738,024 9,570 747,594 8.9% (14,301) (14,301) Class C 59 1,069,512 99,071 - 99,071 9.3% 8,748 8,748 Total 281 10,906,758 1,076,321 20,231 1,096,552 10.1% (4,576) (4,576) Pierce County Office: Class A 5 1,008,465 56,020 - 56,020 5.6% 29,070 29,070 Class B 169 5,596,820 740,667 22,394 763,061 13.6% 43,041 43,041 Class C 96 2,033,784 121,870 - 121,870 6.0% 39,972 39,972 Total 270 8,639,069 918,557 22,394 940,951 10.9% 112,083 112,083 South King County Office: Class A 74 6,859,972 1,039,294 68,293 1,107,587 16.1% 82,649 82,649 Class B 221 8,437,362 832,126 50,600 882,726 10.5% 798 798 Class C 77 1,695,985 75,638 - 75,638 4.5% (8,437) (8,437) Total 372 16,993,319 1,947,058 118,893 2,065,951 12.2% 75,010 75,010 Seattle Region Class A 323 64,165,654 5,498,487 243,167 5,741,654 8.9% 1,014,640 1,014,640 Class B 1,291 60,170,252 5,288,713 364,786 5,653,499 9.4% (226,615) (226,615) Class C 437 9,286,886 522,004 4,230 526,234 5.7% 24,072 24,072 MSA Total 2,051 133,622,792 11,309,204 612,183 11,921,387 8.9% 812,097 812,097

REGIONAL ABSORPTION & VACANCY RATES 4,460,074 2,202,200,0000,000 17.0%17.0% 1,701,700,0000,000 16.0%16.0% 1,201,200,0000,000 15.0%15.0% 14.0%14.0% 700,000700,000 13.0%13.0% 200,000200,000 12.0%12.0% -300,0-300,00000 11.0%11.0% -800,0-800,00000 10.0%10.0% -1,300,0-1,300,00000 9.0%9.0% -1,800,0-1,800,00000 8.0%8.0% 22006006 20072007 20082008 20092009 20102010 20112011 20122012 20132013 20142014 22015015 22016016 Net AbsorptionNet Absorption NNewew Deliv eDeliveriesries Vacancy Vacancy

P. 18 3 COLLIERSResearch INTERNATIONAL & Forecast Report | Q1 2016 | Office | Colliers International MARKET ANALYSIS > SEATTLE OVERVIEW

REGIONAL OVERVIEW Colliers International | Portland 502 offices in 851 SW Sixth Avenue, Suite 1200 REGIONAL SUPPLY REGIONAL DEMAND REGIONAL OUTLOOK Portland, OR | US » Space constraints will continue in Seattle as » Seattle tenants in » Seattle – demand for large block contiguous space far 1.3 million SF of spec office currently under the market for space67 countriesoutpaces available supply. We anticipateon declining vacancy +1 503 223 3123 construction will deliver in 2016 but 73% of exceed 5.7 million SF of rates and rising rental rates will continue through 2016, this is already preleased. Large tenants may demand. placing disproportionate pressure on smaller CBD tenants. find opportunity in Bellevue CBD when 1.1 6 continents » Eastside tenants in » Eastside – demand for suburban office space outpaces million SF deliver in Q4. the market for spaceUnited States:demand 140for space in the CBD. With two new CBD buildings » Limited availability of large blocks of exceed 3.7 million SF of delivering this year, the vacancy rate in Bellevue CBD is OFFICE BROKERAGE TEAM contiguous space has resulted in smaller demand. : 31very likely to rise significantly at the end of 2016, which Joe Beehler tenants being displaced as owners position Latin America:should place 24 downward pressure on rental rates. +1 503 499 0065 buildings to attract full floor users. Asia Pacific:199 [email protected] EMEA: 108 Jamaal Brown +1 503 499 0064 [email protected] Colliers International | Portland Brad Christiansen 851 SW Sixth Avenue, Suite 1200 502 offices in $2.3 +1 503 499 0054 Portland, OR | US billion in [email protected] countries on annual revenue+1 503 223 3123 67 Daren Duke +1 503 499 0056 continents [email protected] 6 1.7 United States: Greg Gonzalez 140 billion squareOFFICE feet BROKERAGE TEAM Canada: under management +1 503 499 0060 31 Joe Beehler [email protected] Latin America: 24 +1 503 499 0065 Asia Pacific:199 [email protected] Mike Holzgang +1 503 499 0055 EMEA: 108 16,300 professionalsJamaal Brown [email protected] +1 503 499 0064 and staff [email protected] Stacy A. Looney +1 503 499 0085 Brad Christiansen [email protected] $2.3ABOUT COLLIERS INTERNATIONAL About Colliers+1 503 International499 0054 [email protected] Brendan Smith billionColliers inInternational Group Inc. (: CIGI; TSX: CIG) is a globalColliers leader International in commercial Group Inc. real (NASDAQ: estate CIGI; services TSX: CIG) with is a globalmore leader than in annual16,300 professionals revenue operating from 502 offices in 67 countries.commercial With an enterprising real estate services culture with and more significant than 16,300 professionalsinsider ownership, operating +1 503 499 0087 Colliers professionals provide a full range of services to real estatefrom occupiers, 502 offices owners Darenin 67 andcountries. Duke investors With an worldwide. enterprising cultureServices and significantinclude insider [email protected] brokerage, global corporate solutions, investment sales and capitalownership, markets, Colliers project+1 professionals management503 499 provide 0056 and a full workplace range of services solutions, to real property estate and asset management, consulting, valuation and appraisal services,occupiers, and customized owners [email protected] investors research worldwide. and thought Services leadership. include brokerage, Colliers global Mike Thomas corporate solutions, investment sales and capital markets, project management +1 503 499 0059 1.7International has been ranked among the top 100 outsourcing firmsand byworkplace the International solutions, property Association and asset ofmanagement, Outsourcing consulting, Professionals’ valuation Greg Gonzalez billionGlobal Outsourcing square feet for 10 consecutive years, more than any other andreal appraisal estate servicesservices, and firm. customized research and thought leadership. Colliers [email protected] under management International has been+1 503ranked 499 among 0060 the top 100 outsourcing firms by the International [email protected] of Outsourcing Professionals’ Global Outsourcing for 10 consecutive years, more than any other real estate services firm. Mike Holzgang For the latest news from Colliers International, visit Colliers.com or follow us on SEATTLE:16,300 BELLEVUE: SEATTLE & BELLEVUE:Twitter (@ColliersIntl)+1 503and LinkedIn. 499 0055 [email protected] Bill Condon Bret Jordan Sam Wayne professionals colliers.com Managingand Director staff Managing Director Senior Research Analyst 206 624 7400 425 453 3131 206.515.4498 Stacy A. Looney [email protected] [email protected] [email protected] Copyright © 2015 Colliers+1 503 International. 499 0085 [email protected] This document/email has been prepared by Colliers International for advertising and general information only. ColliersThe International information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to P.makes 19 no guarantees,COLLIERSAbout representations INTERNATIONALColliers or warranties International of any kind, expressed or implied, regarding the information including,ensure butits accuracy,not we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiriestheir as to professionalthe advisorsBrendan prior toSmith acting on any of the material contained in this report. accuracy ofColliers the information. International Colliers International Group Inc. excludes (NASDAQ: unequivocally CIGI; TSX: all inferred CIG) is or a implied global terms, leader conditions in and warranties arising out commercialof this document real and estateexcludes services all liability with for loss more and damagesthan 16,300 arising professionals there from. operating +1 503 499 0087 from 502 offices in 67 countries. With an enterprising culture and significant insider [email protected] success. ownership, Colliers professionals provide a full range of services to real estate 4 Researchoccupiers, owners & Forecast and investors Report worldwide. | Q1 Services 2016 include | Office brokerage, | globalColliers International Mike Thomas corporate solutions, investment sales and capital markets, project management +1 503 499 0059 and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers [email protected] International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 10 consecutive years, more than any other real estate services firm.

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Copyright © 2015 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. MARKET ANALYSIS > SALE COMPS

SALE COMPS

BUILDING PHOTO BUILDING ADDRESS BUILDING SIZE SALE DATE SALE PRICE PRICE/SF

2115 5th Avenue 8,640 SF 6/20/16 $4,100,000 $475/SF Seattle, WA 98121

2121-2125 5th Avenue 12,800 SF 10/8/2015 $4,100,000 $320/SF Seattle, WA 98121

1213 Valley Street 35,351 SF 2/20/15 $20,500,000 $580/SF Seattle, WA 98109

507 Westlake Avenue North 17,107 SF 1/8/15 $9,500,000 $555/SF Seattle, WA 98109

1945 Yale Avenue North 14,000 SF 9/14/15 $6,000,000 $429/SF Seattle, WA 98102

P. 20 COLLIERS INTERNATIONAL