rote WAKEFIELD. Penne essai “Overall vacancy decreased only slightly ECONOMY during the third quarter. With unemployment forecast to remain above 11%, job growth has become the key driver for any recovery. 11.6% by the end of 2010. Due to ongoing economic concerns, employers Without sustained Job growth’we are rt tkaly The Silicon Valley unemployment eate of 11.1% at the end of 2009 is forecasted to tse continue to hold off on hiring until there see stronger indications of an improving to experience any posive changes in leasing economy although this does not include star-ups that may of may not be included in activity or absorption hese numbers) Richare Hardy, Senior Director Venture Capital Funding for the quarter was led by the Santa Clara based online textbook rental company Chegg, fae. with $75 million, followed by the Santa Clara Eero) based life sciences company, Biopharm Relyspsa with $70 million. Emerging “Cloud” Nationa 2009 2010F20F computing companies attracted significant interest from investors as tis sectot ‘GOP Growth 20% 27% 31% generated §102.2 million for the quater. CPI Growth 03% 16% 1.6% oxinal OVERVIEW Unemployment 11.1% 11.6% 11.7% Silicon Vale's over industri vacancy has decreased slighty to 13.2% compared to Employmant 64% 12% 08% 13.6% at year-end 2009 as a result of strong new leasing activity over the prior quarter. Growin The 3.1 millon square feet (sf) of new leasing activity during the third quarter is the Source Moody's |Eenny som highest since the fourth quarter of 2009, Watchouse/ distribution spaces recorded four expansion lease transactions; NeoVista, Inc. expanded into 48,278 squace feet (8) [la LANE in Newark, Delverex expanded into 44,275 sf, in San Jose, Manufacturing & LEASING ACTIVITY is up 13.4% from Engineering Excellence expanded into 37,238 sf in Milpitas and Kudo Express, {he previous quarter but wil ikly begin a ‘downward trend during the fourth quarter g (0f 2010 as unemployment levels Continue to remain high expanded into 27,642 sf in Fremont Additional new warchouse/ distribution leasing activity for the quarter inchude Cisco Systeme leasing, 107,350 sin Mipitas, Extron Logstes LLC leasing 102,407 sin DIRECT ABSORPTION is ai negative Milpitas and Southwest Offset Printing leasing 68,502 sf in San Jose. ‘The largest new 41,114,983 sf and is expected to high-technology lease recorded for quarter was NuvoSun, Inc. easing 102,240 sFin remain negative during 2010, butwit ‘ot reach the level it cid in 2009 whieh Milpitas and the largest new manufacturing lease was recorded by Walmart leasing See Te a Computers purchase of two high-tec 00 sf in Sunnyvale. User sales highlights for the quarter include Super Micro 9,927 sf in San Jose CONSTRUCTION: Two speculative ata center projects totaling 280,000 st fare under construction and scheduled for Lease renewal activity for the quarter represented 28.4% of the total leasing activity For Gelveryn 2011. There are no other speculative projects under construction lor scheduled for 2011, ology buildings toxaling 13 and Bay Spec, Inc. purchase of a 47,077-sf manufacturing building in San J the period and included CS's renewal of 47,918 sf of high-technology space in San Jose, Nor Cal Moving’s renewal of 47,800 sf of warehouse/ distribution space in Sar Jose and Meru Networks’s renewal of 44,484 sf of high-technology space in Sunnyvale Crease ‘Two speculative data center projects are scheduled for delivery in 2011 and currently there are no other speculative constructions scheduled to break ground in 201, fee es FORECAST Despite the emergence of clean technology and cloud compating companies, they iS foo have yet to generate significant job growth that subsequently drives the demand for ee ee space. Without job growth, the industrial market will see minimal changes in leasing une tL sctvity and absorption forthe reminder of the year. son wo SILICON VALLEY INDUSTRIAL REPORT 3010 1MARKET/SUBMARKET STATISTICS “Rota rates retectSptimontn 2a0esTe 109% 100.715 0 0 0 ea et $116 $115 NA $000 492029 46% 46,197 o o 0 R70 ROI) $171 $900 NA HO ‘naqge00 121% 1353478416437 ogp00 0 (13410) 13.228) SOT MEI NA Sas TRB2 93% 08 0 ° ° 19) G10) $129 sm NA som 76004 48% 969,405 91700 ° 0 MS sara $075 $58 NA S048 15657905 104% GRBIS — 25816 ° 0 132400565 $139 S101 NA $105 10387316 223% 257.480 41400 o 0 (276.705) sT.62) SR MEI NA S45 TrOWI84 150% 2124000 557,018 ° 35000 (775462) (798,468) $100 $065 NA SO5t ‘7088107 14% 1.195400 177763 «28000 soo 177.578 3812 $105 9&2 NA $048 SozrOsed 113% 1141687287585 o 0 (169.250) aa647) $125 65 NA $59 POTD TP TRATES SETS 6000 ‘35000 (1.114955) @50448) $100 GGT NA SAT ‘Fico Sern verry nl WaRRed nts Ta) WD = WarehouseiDeBunoN 745.755 Sycavore Dre Mitas (cco Systems 107.350 Werehouse/Dtbuon 1450.96 South Abbot Avenue Mipitas Exton Logics LLC 102,407 WerehouseiDtrbuton 1565 BarberLane Mitas NuvoSun, re. 102.240 High-Techndogy 587 Charcot Avenue San Jose Southwest OFset Printing 68,502 Warehousetisrbuton 46700-46048 Lakoviow Boulevard CNET Leyden Ene 53.056 5853 5963 Rue Fea Dhidend Capital Group 786,330 $22,801,000, 48950 Fremont Boulverd HT Acauistors LLC 246,500 s2052850 801.881 Foxtane SuperMicro Computers See {7422 Kalo Road Fremont Solynera (tS) 09,000 ‘ont 2872 Sader Way (Data Contr) Santa Gara NA 100,000 arom 5355 Reed Siret (Osta Center) Santa Gara NA 180,000 rot CUSHMAN& Srdtvenets decors goto Gases & Watched WAKEFIELD. rawlecge Carter at ‘pony Cushman & Wah on aba att ace cog. ‘rorcoeomtl comtronedpe Sanowe, ca ast2e (aon) sono