FALL

200

9

Executive Corner.....................................2 `

Colliers Market Watch...........................2 `

David Pinsel Promoted...........................3 `

Retail Investors to Proceed with `

Caution.......................................................3

Top OC Transactions...............................4 `

(See Beltmann Leases Space on page 3)

Colliers International

OCPERSPECTIVE

Colliers International directed the lease of 132,423 square feet of distribution space in Santa Fe Springs, Calif. to Beltmann Group, Inc., a Roseville, Minn.-based moving company, for $4.67 million.

The warehouse space, at 13021 Leffingwell, is located within Golden Springs Business Center, a 265-acre, master-planned business park.

In addition to the Beltmann lease, Southern Wines & Spirits is expanding their existing facility of 617,364 square feet in Golden Springs by approximately 200,000 square feet for a total of 817,364 square feet, making it one of the largest buildings in Los Angeles County. The construction of the new warehouse addition is scheduled to be completed by July of 2010.

“Golden Springs Development Company has been our client since 2001. Since that time we have directed the leases of more

5 13021 Leff ngwell, Santa Fe Springs

(See RealShare 2009 on page 2) (See Senior Vice President Recruited on page 4)

Orange County Quarterly Newsletter

RealShare Orange County, held on August 27, 2009 at the Hyatt Regency in Irvine, brought together more than 200 executives in the Orange County commercial real estate industry for a half-day event focused on where the market is heading at the end of 2009 and where to find the opportunities in 2010. There to address the realities of today’s market and the uncertainties of tomorrow, was Colliers’ Martin Pupil, executive managing director for the Greater Los Angeles area.

Pupil took part in a Town Hall Meeting that kicked off the event. The expert panelists included Brandon Birtcher, president and CEO of Birtcher Development & Investments, Guy Johnson, president of Johnson Capital,

Mark Zehner has joined FirstService Real Estate Advisors as senior vice president in the Greater Los Angeles market. In his new role, Zehner will develop the company’s asset and property management platform throughout Los Angeles County, Orange County and the Inland Empire.

Zehner is the newest member of the U.S. Asset and Property Management division, headed by 25-year veteran Mike Kent, who was appointed president of asset and property management in September 2009. Brought on to oversee the division on a national level, Kent focuses his efforts on institutional property owners and investors who require more specialized and integrated real estate services.

Colliers Headlines RealShare OC

FirstService Recruits Senior Vice President Inside This Issue

Beltmann Group Moves in at Golden Springs Business Center

Retail Sale - Santa Ana

26,411 sq. ft. `

$2.82 million `

Robert Hoyt & ` Jereme Snyder

Retail Sale - Garden Grove

25,740 sq. ft. `

$2.7 million `

Robert Hoyt, ` Jereme Snyder, Maurice Nieman & Ian Schroeder

CongratulationsCongratulations

and Tom Sherlock, senior managing director of Buchanan Street Partners, along with moderator Jeff Moore, senior managing director of CB Richard Ellis.

There was a general consensus among the speakers that the commercial real estate market is near, but has not yet reached the bottom. According to the experts, more Orange County properties will enter into default throughout the remainder of the year and into 2010, providing some good opportunities for investors going forward. The significant problem remains enemployment, which will slow the recovery.

While 2009 presented obvious struggles, it also evoked new opportunities and successes at Colliers International, including the addition of several seasoned brokers to our Irvine office.

Jereme Snyder, Mehran Foroughi, Pat Swanson, Ian Devries, Ian Schroeder and Maurice Nieman have joined our growing investment sales team, expanding our already-established market presence throughout Orange County. I commend our team of hardworking professionals who have stuck through the long and treacherous downturn, and all of our clients who have held on through the difficult times. You are the ones who will eventually reap the benefits of the industry when the market fully recovers. I also want to recognize Clyde Stauff on once again being our top producing broker.

As the year comes to a close I have to admit that I feel a certain sense of relief. But with that relief comes a new feeling of excitement as we approach a new year. Like most in our industry, much of 2009 was spent sticking to the sidelines, tightening the reins and grinding out each day.

With a new year comes a new outlook. We’ve seen a closing in on the gap between buyer and seller expectations and the beginnings of a market shift.

Colliers International is poised for a productive 2010 and I look forward to working with each of you throughout the promising new year.

Colliers OCPerspective, Fall 2009

Corner

Exec

utiv

e Leaving the 2009 Market Woes Behind(continued from page 1)

RealShare 2009

Martin PupilSenior Managing Director

OFFICEThe total vacancy rate, including sublet space, increased to 20.6%, up 40 basis points from 20.2% reported in Q2 and up `

190 basis points from 18.7% reported one year ago. Vacancy rates remained highest for Class A space (22.6%) and in the Airport submarket (22.0%).

The weighted average asking rental rate at the end of the quarter was $2.31 PSF per month FSG down from $2.37 PSF (-2.5%) ` reported in Q2 and from $2.62 PSF reported one year ago (-11.8%).

Leasing activity for Q3 totaled 1.96 million SF, up 11% from the 1.77 million SF of leasing activity reported in Q2 and up 17% ` from 1.67 million SF of leasing activity reported one year ago.

INDUSTRIALSales and leasing activity during Q3 totaled 2.59 million SF, down 1.7% from the 2.63 million SF reported in Q2. `The total vacancy rate, including sublet space, increased 20 basis points from 5.6% reported in Q2 to 5.8% in Q3. `The weighted average asking rental rate remained flat at $0.68 PSF per month, Triple Net (NNN). While this ended a streak of `

three consecutive quarters of declining asking rents, it is widely acknowledged that contract rents are much lower than quoted asking rents as landlords offer low teaser rates and significant concessions to attract and retain tenants.

ECONOMYThe unemployment rate rose to 9.6% in August 2009, up 4.3 % over the previous 12 months. ` Although there have been reports that the national economy has been through the worst of the recession, economic conditions in `

Orange County remain weak, as the market is still correcting from the construction and consumer-led boom of the past several years.

Colliers Market Watch

David Pinsel has been promoted to Managing Director for Colliers’ Greater Los Angeles operations. In his new role as managing director for the multi-office region, David’s focus will be on developing and overseeing the company’s investment services platform, including continuing robust recruitment efforts for this specialization.

“David has played an integral role in our growth efforts in the Greater Los Angeles area,” says Martin Pupil, senior managing director for Colliers GLA. “So far this year, he has successfully recruited 18 seasoned professionals to our local operations.”

Under David’s direction, several established investment professionals have joined Colliers’ Irvine office including Jereme Snyder, Mehran Foroughi, Pat Swanson, Ian Schroeder and Maurice Nieman.

Pinsel was recruited to Colliers as a director in May 2008.

Colliers OCPerspective, Fall 2009

Broker Column Retail Investors to Proceed with Caution

Like all areas of commercial real estate, the retail sector has encountered its share of turbulence in 2009. Vacancies are up, financing has tightened and the general sense among retail investors is a lingering feeling of caution. Overall retail vacancies in Orange County have climbed from 3.5 percent to 5.7 percent since the fourth quarter of 2008. But all things considered, this increase is not as drastic as one might expect.

Anchored shopping centers have experienced a modest climb in vacancies, from 4.4 percent this time last year to 6.1 percent today. That said, when big box anchors vacate, the entire center takes a big hit. A neighborhood center with two anchors can easily go from 100 percent occupancy to 60 percent occupancy if a big-box tenant goes dark. In today’s market, strong demographics are the fundamental key to keeping shopping centers afloat.

Vacancies aren’t the only inhibitors when it comes to retail investments. With financing becoming increasingly difficult to come by, the majority of the movement within the sector has been in properties under $10 million. Many investors are choosing to purchase multiple, smaller retail sites rather than over-leverage into a one larger property. Since January 2009, 41 retail shopping centers priced between $1 million and $10 million have traded hands in Orange County, compared to only two transactions that have closed at a price of more than $10 million.

The outlook for 2010 remains unsettled. In 2008, many experts were predicting that 2009 would bring a glut of bank owned properties to the market, providing great opportunity for investors. That time has come and those predictions were never realized due to the vast number of modified loans. Now, predictions are the same for mid-2010. My hope is that the new wave of loans coming due will impact the quality and quantity of available properties. That being said, I cautiously reserve judgment until the motion is started.

My advice to both sellers and buyers is to proceed with caution. Properties will enter the market that may fit nicely into investors’ portfolios; however, the ability to move forward with a transaction will be dependent on their risk tolerance and liquidity concerns. I advise both buyers and seller to underwrite properties thoughtfully and realistically.

(Source: Loopnet, The CoStar Retail Report Third Quarter 2009; Orange County Retail Market)

(continued from page 1)

RealShare 2009 than 5.3 million square feet on their behalf,” said Clyde Stauff, senior vice president of Colliers International’s Irvine office, who represented the lessor, along with Steve Calhoun, senior vice president in Colliers’ Commerce office.

Golden Springs is the largest business park in the centrally located “Mid Counties” market, ideally positioned to service both Los Angeles and Orange County residents. The park is owned and managed

by Golden Springs Development Company, which is headquartered at the project site and is directly involved in all phases of development and management of the project.

Stauff added that the vision behind the business center is to provide the highest quality of construction and functionality to compliment the business activities of the tenants, which is what attracted the Beltmann Group to the property.

(continued from page 1)

Beltmann Leases Space

David Pinsel Promoted to Managing Director

Mehran Foroughi, senior vice president, specializes in retail investments at Colliers International in Irvine, Calif.

Colliers OCPerspective, Fall 2009

Colliers International - Orange County3 Park Plaza, Suite 1200

Irvine, CA 92614(P) 949.474.0707 (F) 949.724.5600www.colliers.com/orangecounty

“Colliers is perfectly positioned to provide the entire spectrum of services needed by today’s property owners – whether they are corporations, partnerships, families or institutional investors,” said Kent. “With Mark’s 20 years of experience in asset and property management, and his deeply rooted industry relationships within the Greater Los Angeles region, he is a valuable addition to our growing U.S. property management division.”

(continued from page 1)

Senior Vice President Recruited

Industrial Lease - Orange

48,906 sq. ft. `

$5.08 million `

Brad Christian `

Retail Sale - Santa Ana

26,411 sq. ft. `

$2.82 million `

Robert Hoyt & ` Jereme Snyder

Retail Sale - Ontario

17,192 sq. ft. `

$2.75 million `

Robert Hoyt & ` Jereme Snyder

Retail Sale - Garden Grove

25,740 sq. ft. `

$2.7 million `

Robert Hoyt, ` Jereme Snyder, Maurice Nieman & Ian Schroeder

Top

This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.

CongratulationsCongratulations

2525to Clyde Stauff, senior vice president of Colliers’ Irvine office, on being a top producer for

years running!