THE TECHNOLOGY INDUSTRY is a key driver of San Francisco Bay Areas economy, fueling substantial job growth as well

as demand for all property types. The Cushman & Wakeeld Tech Index closely analyzes the trends impacting the ofce market, specically buildings that cater to the technology industry.

Q4 2013

TECH INDEX

San Francisco

TENANT DEMAND

62.7% PRIVATELY OWNED

in San Francisco

TODAYS TECH PROVES MORE STABLE THAN PREVIOUS CYCLES

37.3% PUBLICLY TRADED
91% of current tech demand is from companies that have been around for more than three years -- providing more stability to the economy than in the past. These firms are more diverse than the B2B and B2C ventures of the last cycle, and are now also comprised of social media, cloud computing, mobile, and gaming technology. Venture Capital is also taking note: Two-thirds of all VC funding in the first three quarters of 2013 targeted expansion and later stage companies and not just early stage and start-up firms.

91.0% ESTABLISHED PRE 2011

9.0% ESTABLISHED POST 2011

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PRIME CREATIVE TECH

Inventory # of Buildings Overall Vacancy Rate Direct Rental Rate*

Historic and/or brick & timber construction that has undergone a major retrot.
5,572,697 SF 44 10.7% $56.56

+63.7% +26.9% +33.3%

TENANT TYPE

rental rate increase from the bottom of the market

CLASS A TECH
Inventory # of Buildings Overall Vacancy Rate Direct Rental Rate*

Traditional Class A oce space modied to accommodate technology and creative users.
9,117,732 SF 30 8.5% $53.80

rental rate increase from the bottom of the market

OVERALL TECH INDEX

Inventory # of Buildings Overall Vacancy Rate Direct Rental Rate*
*Rental rates reect asking $psf/year

14,690,429 SF 74 9.4% $54.00

rental rate increase from the bottom of the market

TECH INDEX

San Francisco

TOP 10 LEASES OF THE QUARTER

ADDRESS SUBMARKET SQUARE FEET

22 Fourth Street 505 Howard Street 1355 Market Street 500 Terry Francois Boulevard 2300 Harrison Street 405 Howard Street 50 Hawthorne Street 500 Terry Francois Boulevard Two Harrison Street 799 Market Street * Renewal/Expansion

Yerba Buena South Financial District Civic Center/Mid-Market Mission Bay Showplace Square/Potrero Hill South Financial District South Financial District Mission Bay South Financial District Yerba Buena

Demandforce* Neustar Twitter Cengage Learning Lyft FitBit Athena Health Wix.com GoGrid* Prism Skylabs

Class A Tech Class A Tech Prime Creative Class A Tech Class A Tech Class A Tech Class A Tech Class A Tech Prime Creative Class A Tech

202,355 136,527 76,388 67,366 65,493 56,349 55,756 34,459 22,596 14,749

SIGNIFICANT PROJECTS UNDER CONSTRUCTION/RENOVATION

ADDRESS SUBMARKET EST. COMPLETION DATE PROPETY TYPE BUILDING SF

680 Folsom Street* 505 Howard Street / Foundry Square III 460 Bryant Street* 50 Hawthorne Street* 155 Fifth Street* 333 Brannan *Renovation

South Financial District SOMA Financial District East SOMA SOMA Financial District Yerba Buena East SOMA

Q4 2013 Q1 2014 Q1 2014 Q1 2014 Q1 2014 Q1 2015

Class A Tech Class A Tech Prime Creative Class A Tech Class A Tech Class A Tech

476,000 275,902 60,185 55,756 351,858 180,000

The market terms and denitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2014 Cushman & Wakeeld, Inc. All rights reserved.

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