Is Cushman & Wakefield Is Cushman & Wakefield Prepared for the Next Prepared for the Next Generation of Client Generation of Client

Solutions?Solutions?

U.S. $4.99 C

anada $5.99

May 2008

TABLE OF CONTENTSFeatures

MAY 2008On the Cover Cushman & Wakefield manages one of the trophy assets in San Francisco and many major international markets, but are they geared for the next generation of client needs?

Also in This Issue…

5 Letter from the Editors

32 San Francisco Marketbeat

35 Comic Relief

53 Editorials

6What is Property Management?An inside look at one property manager that is helping employees get the most out of their work day. 11Letters from the Readers:Property Management Accounting and FinancialsMany of you have written in with questions regarding how we administer our “Property Management”financial accounting. We here at Building Times felt that we received enough of these queries to finally write an article with the answers to all of your questions.14Plastic Bag BanPaper or plastic? If you live in San Francisco- the first city in the country to outlaw plastic- the decision just got easier. The new greed trend.15Interview with Bob Beedle: Group Financial Manager

16Service Contract ManagementIn light of the economic downturn, will C&W re-negotiate new service agreements and how will this affect their vendor relationship?21The CenterfoldIs the internal building system at the Transamerica Pyramid operating at its most effective level?23One Hat, One MissionTrisha Sanyal is probably looking at your resume, and yes, she’s judging you.26Streamlining and Consolidating Lease & Management Forms

TABLE OF CONTENTSFeatures

29Building Structures555 Mission: A New San Francisco Landmark30Tenant ImprovementsWhat goes into the TI process?31Market AnalysisThe process of understanding the real estate market.34Effectively Marketing BuildingsGetting the listing is only half the battle. In order to make the transaction go through, it is vitally important to market your buildings. 36Tenant Retention & RelationsIt is far more cost-effective to retain a tenant than to replace a tenant.46Interview with Anne StephensClient Solutions Branch Manager

48Excerpt from Cushman & Wakefield's Landscape MagazineTowering Success: If anyone can weather a global financial storm it is Donald Trump who, having seen both sides of the boom and bust coin, remains one of the most successful names in international real estate. He talks exclusively to Landscape about staying on top.

53EditorialsNOI TonicDeath, Taxes and Tenant TurnoverBirds of PreyWide Open SpacesGreen: The Way of the FutureBuilding Amenities and ServiceTechnology and Its Implications

Advertiser Index2 The Cotai Strip in Macao Cushman & Wakefield Retial 7 300 & 400 Wind River Way, Alameda, CA Cushman & Wakefield Office 10 500 Sansome Street Cushman & Wakefield Office 17 The Transamerica Pyramid Center Cushman & Wakefield Office 20 505 Sansome Street Cushman & Wakefield Office 25 3121, 3129, 3137 Swetzer Road, Loomis, CA Cushman & Wakefield Industrial 28 555 Mission Tishman & Speyer Office 40 The Crocker Galleria Cushman & Wakefield Retail 47 2401 Merced Street Cushman & Wakefield Life Sciences 52 99 Rhode Island Cushman & Wakefield Office 55 The Vineyard Cushman & Wakefield Retail/Office

Letter from the Editors

We posed a question on the cover that the articles and interviews intend to answer. Is Cushman & Wakefield prepared for the next generation of clients solutions? The query is an important one to address as they dynamics of the commercial real estate landscape continue to transform. We feel that C&W is prepared, but there is definitely room for improvement. The green movement, new technologies, and the globalization of real estate; all buzz-terms that C&W could address as a market-leader rather than a market follower.

Throughout the publication you will see local advertisements, relevant articles and interesting blurbs. While the flow of the magazine is intended to mimic that of a TIME or a Newsweek, the free-form writing reads more like an editorial on par with the New Yorker or Business Week.

We are excited to present you with our inaugural issue of Building Times. A lot of thought has gone into the format and presentation of the first issue, we really hope you enjoy it!

Best Regards,

Team A.W.E.S.O.M.E.

What Is Property Management? A member of Team AWESOME examines the role of

property management and how they keep One Capitol Mall up and running. His interview with

Katie Sweetenham, on-site property manager with AKT Properties, spent an afternoon with Sean and

brought the ins and outs of this challenging profession to light.

TA: Greetings….first I would just like to say how much I appreciate you sharing some time with me this afternoon. I have always been interested in the role of about day-to-day tasks and challenges you face from tenants and landlords alike. So, thanks again. Katie Sweetenham: Property Manager, AKT Properties: You are most welcome. I hope I am able to answer all of your questions. TA: Well then. Let’s get started. If you could, tell me a little bit about the components that comprise property management, including property organization, personnel, and job descriptions for key positions. KS: Well, one of the biggest challenges of PM is making the owner and the tenant happy. The owner obviously wants the highest rate of return and the tenant wants the best value for their money. The line in between can get a little tricky. Keeping both satisfied takes a lot of time from not only the PM but the engineers, leasing agents, vendors, basically anyone working on or for the property. We want to make sure the tenant is satisfied with the

performance of the leasing agents, contractors and subs doing tenant improvements and then eventually the PMs hoping to retain the tenants. Tenant retention, tenant relations, leasing, service requests, tenant requests, correspondence, rent collection, billing, knowledge of each lease, knowledge of the property the market, bidding out contracts, reviewing contracts, proposal to owner with suggestions, cost management, cost saving measures, getting involved with organizations such BOMA – these are all components of PM. TA: Very interesting. I have seen one guy cruising around with a tool belt and an AKT shirt on. Is that your building engineer? KS: Yep, that is Ernie. He is the on-site building engineer that oversees all R&M items and is aware of all issues in the building ranging from clogged toilets to HVAC repairs. Decisions are made whether we have to get an outside vendor to provide service for building. We have an onsite day-porter who maintains the common area including lobby’s, restrooms, stairwells, cleaning of elevators etc. TAaller issues get directed to the dayporter and the larger ones are taken care of either by Ernie or an outside vendor. We have 24/7 security, with 3 shifts, day-shift, swing shift, and graveyard shift. Each shift has its own set of post orders, duties, rounds. We have a parking manager with 4 valet attendants who are here all day. Parking Manger is in charge of increases rates as needed depending on prices for surrounding areas. Parking financial reports are given once a month. Parking manager keeps track of everyone who parks in the building. Each person at the building plays a key role in running and managing the building. Without communications amongst all of us, things would not run TAoothly. I would not be able to do my job without them. TA: Interesting. Now, I’m not sure that this applies but just thought I would ask. Do you have any responsibility to develop new business, i.e. tenants, with AKT or does another arm of your company handle that?

300 & 400 WIND RIVER WAY, ALAMEDA, CACLASS A CAMPUS ±125,000 RSF AVAILABLE

CUSHMAN & WAKEFIELD OF CALIFORNIA, INC.ONE MARITIME PLAZA SUITE 900

SAN FRANCISCO, CA 94111

No warranty or representation, expressed or implied, is made to the accuracy of the information contained herein, the same is submitted subject to errors, omission, change of price, rental or other conditions, without notice, and to any special listing conditions imposed by our principles.

FOR FURTHER INFORMATION, PLEASE CONTACT:

EDWARD GRAMMENSEXECUTIVE DIRECTOR 415.773.3552edward.grammens@cushwake.com

JAY SEIDENDIRECTOR 415.773.3565jay.seiden@cushwake.com

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300 & 400 WIND RIVER WAY

KS: We do not do the leasing nor do we really get involved in it until they are a tenant. Our Brokers and our Asset Manager handle this…NO COMMISSIONS FOR US!

TA: Can you break down emergency procedures, budgets, and any other unique property deliverables?

KS: Each new tenant will receive a welcome package which goes over the rules and regs of the property, hours of operation, Emergency action plan, tenant request procedures, access card procedures, parking information etc. The Emergency Action plan lets tenants know how and where to vacate the building in case of an emergency. There are staging areas with each tenant’s location listed on the action plan. There should be a main emergency contact person for each tenant who will assist others in the event of an emergency. Every year we hold a meeting with all the tenants and go over the procedures in case of an emergency.

In terms of budgets, we do not normally give out budgets. Budgets should be started in about September. I, fortunately, did not do the budget for One Capitol Mall because I was not the manager last year, but I did have to do one for my retail center and the TAall office building in Lodi I managed. Budgets are a projection of the upcoming year. All large R&M items should be included as well as all the contracts. Budgets help calculate what the tenants monthly CAMs (common area maintenance fees) will be for the upcoming year. Reconciliations are performed monthly, quarterly or annually. My retail recons were performed quarterly, OCM is done annually.

TA: Review the components of a Standard tenant lease at One Capitol Mall, emphasizing fee structure, escalition formulas, building responsibilities, rules and regulations, lease abstract, Work letter, administration, etc.

KS: We have our basic boiler plate lease and the following are the terms that are usually changing per tenant etc:

a. Rent – Depending on the space, size, location, and market

b. Term c. Commencement date d. Base Year e. Tenant Improvement allowance f. Parking – usually 3/1000 pending

availability preferably rates at prevailing market

g. Option to Renew h. Right of first refusal i. Option to expand j. Commissions to Broker k. After hours HVAC l. Late Fees m. Exclusive use

TA: What are your standard procedures for rent collection?

KS: We have procedures for rent collection. On the 10th of every month a receivable report is run, any tenant who has not paid by the 10th should either get a written letter, or a phone call which normally results in a late charge. Rent rolls are reviewed on the 15th of the month, all increases should be input into our software and should be included on the rent roll along with what type of increase either stipulated at 5% or CPI etc. Letters are sent to tenants informing them of their increase usually a month before just as a courtesy. Statements are sent out on the 20th of the month.

TA: How about the account procedures for purchasing? KS: Depending on the amount of the item we are purchasing, or the R&M item we are planning on repairing we would have to get numerous proposals and make sure the scope of work is the same on all of them. We like to use vendors/contractors we have used before, but it is nice to use the low bidder as well. After we receive all the proposals we have to make a recommendation with a summary to the owner as to which vendor/contractor we feel we should go with and why. The owner reviews and either approves, denies, or requests more information. It is nice to have pictures or diagrams attached to make it easier for the owner to approve.

TA: Let’s review accounting tenant lease issues, such as rent configuration, escalation rent, tenant extra charges, after hour charges, etc.

KS: Building hours are M-F 7am-6pm and Saturday 8:00am -1:00pm. If a tenant wants to work after hours (rates are in the lease) we would bill them for every hour they are here usually $45/hour. The PM’s do the billing. I have a calendar of all after hours usage, it should be requested 24 hours prior to working after hours.

Rent configuration is negotiated before lease execution as you know. Normally we have a rent schedule indicating rent escalation – our standard is normally $.05/year sometimes a percentage increase or CPI Increase. We charge for tenants use of the conference room per hour, we have a free shuttle service that the tenants can utilize [ this must be included in the lease]. Any R&M item that is not covered by the LL in the lease will be billed back to tenant if they have our Engineer do the work or if we set up a vendor for the tenant.

TA: What is the difference between Capital expenses vs. Operating Expenses

KS: Capital Improvements are improvements that essentially enhance the properties overall value or increase its useful life. It is anything that you can depreciate, new roof, new HVAC, as opposed to an expense which is a cost of doing business, such as Electricity or insurance. Cap Improvements are not passed through to the tenants as a “camable” expense. Operating Expenses can be passed through to the tenant; Opex’s are a category of expenses a business/property incurs as a result of performing the normal operation of the business or property. An op-ex can be considered a repair and maintenance item. Utilities, Property taxes, insurance can all be considered Op-exs. Some, depending on which type of lease structure you are using, may not be passed through to the tenants.

TA: Do you have a standard building inspection checklist that you use?

KS: Yes, here is one for your review. I have attached a building inspection checklist for your review. For engineering purposes the inspection checklist will be for the integrity of the HVAC, lighting, inventory control, basically everything pertaining to the operations of the building.

TA: Katie, I think that about covers it. Your time is much appreciated.

KS: You are welcome. Should you need any other information, please let me know.

500 SANSOME STREET500 SANSOME STREETSAN FRANCISCO, CASAN FRANCISCO, CA

WE’RE BACK ANDWE’RE BACK AND READY TO LEASE!READY TO LEASE!

COMMISSION BONUS $1.00 PER RSFCOMMISSION BONUS $1.00 PER RSF (MINIMUM 3 YEAR DEAL)(MINIMUM 3 YEAR DEAL)

Letters from readers: Property Management Accounting and Financials Many of you have written in with questions regarding how we administer our “Property Management” financial accounting. We here at Building Times felt that we received enough of these queries to finally write an article with the answers to all of your questions.

I don’t really understand the concept of a property accountant; could you give me some general information? -- Nathan Zoucha A Property Accountant will be assigned to supervise accounting staff by providing appropriate sourcing, orientation, performance management competencies, and development accountability. In addition, the accountant will rely on past experience to

provide all accounting and financial functions associated with assigned projects. Responsibilities will include: • Prepare and record journal entries related to accrual-based, GAAP accounting. • Monitor all billing aspects of lease administration including annual CAM, RET, OPEX billings. • Maintain control of postings to the balance sheet, prepare annual income and expense budgets. • Prepare bank reconciliations for approval by Manager. • Review and approve any lease abstracts on new leases. • Approve and post all accounts payable and accounts receivable batches, including all sundry and other non-recurring charge batches. • Prepare and distribute management report and financial statement package to property management personnel and client's financial group. • Explain budget variance per expense line item. • Assist team in creating the annual operating budget. What is the accounting requirement per the management agreement? -- Lisa Cracknell The accounting requirement per agreement varies with each tenant. There are various ways in which funds are accounted for. Some tenants require their

accounts on a cash basis, some on accrual, and some like the modified system. No matter which way the funds are accounted for, property accountants take care of rent rolls, P&L loss statements, balance sheet activities, and all of the CAM (Common Area Maintenance) charges. Furthermore, each building is treated like a separate entity, making it easier to keep track of and simpler to find problems with the numbers if there are any. What is the purchase order process for tenants to have work done? -- Jay Seiden Property managers are in charge of the PO process. They go through a procedure that requires multiple signatures from managers up the chain to have any work done. Once the PO has been approved, the orders are posted to a register and the accountants write checks from the proper accounts. How is the rent collected? -- Nathan Zoucha Checks are sent to a lockbox directly. Cambridge (a third party accountant services firm) enters receipts into a register. Accountants get a copy of the register in a daily details report. The accountant then opens the unposted register and ensures that the information is correct. Any changes or modifications then take place before the account is reconciled.

How does the accounting year end work? --JD Lumpkin The property manager has a budget for his or her building for operating expenses and dues from the tenants. During the year, the expenses that are due from the tenant are estimated and billed in 12 installments. At the year end, the accountant goes through the payments received and the credits due and reconciles the two parts. The tenant is either billed or credited funds based on this register. What is a Rent Roll? -- Ed Grammens A rent roll is the registry of all the tenants in a building. Included in the roll is the breakdown of monthly charges, the square footage, the lease term, the monthly cost recovery, the percentage leased and the total security deposit of each tenant. What is a monthly leasing report? -- Peter Conte This is a report generated by Cushman & Wakefield research that details all of the information on lease transactions that have taken place in the last month. It is a good source of raw data, and to the experienced eye can give an indication of where the market is. Additionally over a period of time, it can give insight into where the market is going.

What is a stacking plan and why do brokers use it? -- Josh Gladding A stacking plan is a visual representation of the tenants in a building. Typically the plan includes the floor that they are on, the size of space that they have, and their lease expiration are included. The stacking plan serves as an easy way to quickly look at a building and see what is happening, who are the tenants and also serves as a good marketing device. What happens when a tenant moves into a building and gets a tenant improvement package? -- Grant Guidenger Cushman & Wakefield has a special division of project managers that monitor and keep track of what tenants are doing to their space. They keep track of how much the tenant has on budget, what they are spending, and what is actually being charged. If the tenant goes over their allotted amount of capital, the PM is responsible to bill the tenant for the extra costs.

How are taxes and utilities accounted for? -- Nathan Zoucha Taxes and utilities are accounted for under the

umbrella of operating expenses. In a NNN lease (triple net), the tenant is responsible for paying for them on their own. What is a capital vs. an Operating expense? -- Nathan Zoucha A capital expense is money used to purchase or upgrade physical assets. This is a long term, one time expense. Operating expenses are funds used for the general upkeep and maintenance of a building. They tend to be recurring everyday expenditures. Utilities, janitorial, and CAM charges are all operating expenses. Pass through charges are expenses that are passed through to the tenant. Upkeep for the building, utilities, and common area maintenance are all pass through charges. An example of a non pass through expense would be if there was a legal proceeding over a slip and fall, the building owner would not be abe to pass through the lawyer fees. I have several questions about the process of having a contract signed. What are tenant qualifications, commission summaries, lease abstracts, acceptance letters, riders, and certification of occupancy documents all about? -- Lisa Cracknell A tenant qualification letter is a document that shows to a landlord that the tenant they are considering to let into their

space has the financial solvency to occupy and afford the space. A commission summary is a document that shows a breakdown of the percentages and portions of the commission and who gets each respective piece. A lease abstract is the solvent points of a lease, or a quick look at the key information without all of the legal jargon. A lease abstract is like “cliff notes” for the lease. A space acceptance letter is a document indicating the acceptance of a particular space, the term of the acceptance and the agreed upon price of the lease. A TI Rider is an additional document attached to the lease that hashes out the tenant improvement package. A certification of occupancy is a document issued by the local building authority giving permission for a building to be occupied. This is a safety measure to ensure that building codes and regulations are being met. Thank you all for your questions. Keep them coming!

Interview with Bob Beedle: Group Financial Manager Interviewer: Steve Monahan Q: So Bob, what do you do here at Cushman? A: I ensure that all of the accounting requirements for the buildings we manage are accounted for. Every building is unique in its method of accounting, some are on the accrual basis, some are on a cash basis, some on the Yardi system, some are on a fiscal year basis and some are on the calendar year basis. I make sure that my accountants are properly accounting for their specific buildings; I am a hybrid of a manager of people and a reviewer of the books. Q: What’s your storey Bob? A: I grew up locally, in Marin. I attended Marin Catholic High School and then moved down south, where I went to University of Southern California. I graduated with a Real Estate Finance Emphasis and went into the Aerospace industry as a real estate manager. After a few years, aerospace was not as happening as it was, the soviets were not that great a threat anymore, and I joined PM realty group. I did real estate financials there. Then I was with Wells Fargo Real Estate, here in San Francisco. After a few years up in the Bay Area, I moved back down south and worked for some time with C&W in LA. I was there for several years, and then I worked for a private owner doing property

management related work. I recently moved back up to Northern California, and am working with Cushman & Wakefield again. Q: What is the hardest part of your job? A: Due to the different in accounting standards for each building, cash vs. accrual, calendar year vs. fiscal year, it is very difficult to go back and forth when looking at multiple reports. The various methods each have intricacies and specific nuances that are unique to their particular style. When I am reviewing, I have to switch my way of thinking for each method. I have to make sure that I am “on the ball” and paying attention. Q: What is the best part of your job? A: I really like real estate. As the financial manager I get to go into buildings and check them out. Not only am I able to explore the physical aspects of the buildings, but I get to look at the financials for these buildings and in doing so understand their impact on the economy, and the economy’s impact on them. My job is constantly changing, and so I have to adapt to meet the needs of my buildings. It keeps life interesting. Q: How large is your department? A: I have twelve accountants here in the San Francisco

Office. Additionally there are half a dozen more at “on site” locations, in the buildings that they are responsible for. Q: Does C&W provide any financing options or assistance to their tenants? A: No. Q: What is C&W’s recourse for delinquent tenants? A: If a tenant is delinquent in their payments, they receive a three day notice to pay the delinquent amount. After that they receive a warning. If their delinquency continues, C&W lawyers are assigned to the case and they determine if it is worth going after the company for breach of contract damages, or if they are simply evicted. Q: Any interesting stories? A: In 2002 we had a building that Global crossing had just moved into in Beverly Hills. They spent $300 a square foot on TI’s and subsequently the business folded. The next tenant that moved in was not able to use the existing configuration, and they tore all of the improvements out. It was all marble and Mahogany. It was all very painful to watch. Thanks Bob!!!

Service Contract Management

In light of the economic downturn, will

C&W re-negotiate new service

agreements and how will this affect their

vendor relationship?

Primary Architect – FME General Contractor – Skyline, Dinwiddie, RN Fields

Although the economic downturn has influenced many building owners to renegotiate certain budget conditions, the Pyramid has maintained a very good relationship with its vendors and will continue to do so in the future.

All service agreements will remain the same because many companies have been able to provide green products and services, thereby diminishing the need to look for alternative agreements. Furthermore, the cost has significantly decreased allowing many building

owners to benefit from the overall green movement.

Incident Reports

The Transamerica Pyramid is one of the most recognized icons in San Francisco. This places it at the top of the list for a terrorist attack. The Pyramid Center does not take this light heartedly and allocates greater than $2 million per year in the budget for security. At all times there are a minimum of 32 Security Guards both inside and circling the premises along with numerous strategically placed cameras. Outdoor security guards carry cameras to capture license plate numbers and faces of suspicious activity. Security logs are recorded on a daily basis and anything unusual is reported to the General Manager. Occasionally there are events such as war protests and the SF passing of the Olympic Torch which force them to beef up security even more.

No individual is allowed inside the Pyramid unless they are a Tenant with an access card or they have been granted preapproved access from a Tenant within the building. Still security checks identification and takes a picture of each individual who is not a Tenant. While a normal security outfit has a 200-300% turnover rate, the Pyramid has an 18% turnover rate. This is attributed to the higher compensation and the prestige of working at the Pyramid. The Pyramid prides itself on being the most secure building in San Francisco.

Parking

Since the terrorist attacks on September 11th, the Transamerica Pyramid has been

Dick Robinsondick.robinson@cushwake.com

415-773-3563

Margaret Duskinmduskin@cushwake.com

415-773-3538

TRANSAMERICA PYRAMID

For Further Information Contact:

Cushman & Wakefield of California, Inc.One Maritime Plaza, Suite 900

San Francisco, CA 94111

Floor

RentableSquareFootage

AskingRentalRate

DateAvailable

Term(yrs.) Notes

39th 4,478 $79/sf/yr 2/1/07 Flex Stunning views with high end existing build out in place. 7 offices, and conference room plus kitchen.

38th 4,792 $78/sf/yr Now Flex Full floor opportunity with spectacular 360 degree views. 4 offices, conference room, kitchen and work area.

36th 5,468 $77/sf/yr AfterBuild Out

7-10 Shell condition. Full floor opportunity. Great views!

21st 12,311 $65/sf/yr Now 5-10 Large conference room, heavy private offices. Excellent full floor views.

8-07

a closed building. There is no determined parking ratio and parking is only open to Tenants in the building. The prestige and rents in the Pyramid attracts high end Tenants and the parking lot tends to look like a showroom. Metal walls block both entrances to the parking structure prohibiting any unwanted guests. Janitorial/ Landscaping

Janitorial is the second largest item on the budget at $1 million per year. The Redwood Park which exists between the Transamerica Pyramid, 505 Sansome and 545 Sansome is not easy to upkeep and it serves as a soothing break from the office. The landscaping budget is approximately $100,000 per year. Mechanical Systems Due to the peaked shape of the Pyramid there is a limited amount of space for such utilities as the mechanical system. To combat this problem, three floors have been dedicated to the use of mechanical systems; 5, 19 and 49. The systems are technically the same on each floor, however function for the specific

purpose of ventilating 100% of the building. Each unit includes a supply fence featuring coils, motors and fans to facilitate the flow of outside air into the building. Typically the temperature is kept at a range of 55 to 68 degrees mixed with return air. These units will last approximately 10-15 years, most will be replaced as tenants vacate and new leases are signed. Overall the BMS has become much more efficient where degree changes can be monitored with as little fluctuation as .5%. Historically, the Pyramid used 31 million pounds of steam to heat/cool the building where as now only 16 million pounds of steam is necessary. This is a 50% reduction. In conclusion, the Pyramid is operating at a very efficient level and will continue to do so in the future. Electrical Systems In a recent effort to conserve electricity, the Pyramid has implemented a motion detector to curb high energy costs. This will allow lights to come on when needed as opposed to continuous 24 hours a day operation. A generator has been installed to run emergency lights in the stairwell at a 95% reduction. This generator has a two hour supply and is determined to be a safe amount of time in any emergency situation. Budget Security $2,000,000 Janitorial $1,000,000 Landscaping $100,000 Metal Maintenance $85,000 Parking $20,000 Engineering/C&W $50,000 Window Cleaning $14,000

Tenant Relations Program The Pyramid is very dedicated to servicing tenants. By hosting several events during the year they hope to provide a sense of building morale and appreciation for investing in the Pyramid. Such programs and events include: Annual Christmas Celebration , Earth Day Reception, Cinco de Mayo Party , 4th of July BBQ, Monthly Newsletter, Personal gift to each CEO within in the Pyramid Given the low volume of tenant complaints, the Pyramid has been very successful at keeping their tenants satisfied.

ADA As turnover takes place the Pyramid is able to upgrade to higher standards of ADA compliancy. This process is gradual over time however a major priority to all renovation and building construction going forward. The Pyramid at this time is NOT 100% ADA compliant. Do they continually monitor new advances and voluntarily improve their ADA systems? No. However given the chance to remodel a space of course they will implement new ADA standards.

Recycling

Recycling has become a target for many building owners to improve their green status and help diminish the landfill problem. The Pyramid has two 4 yard bins which exist for all trash compost. The Pyramid is challenged by Golden Gate Trash to reduce their diversion rate quarterly. Twice a year they host a computer recycle day involving Green Citizen. An incentive program has been created to help tenants participate in the recycle movement. Each company will elect a Tenant Rep to facilitate all recycle initiatives. This program has proved very successful and can only continue to grow as more companies become involved and are alerted to the importance of recycling. Summary In speaking with the property managers at the Pyramid it is evident they have implemented the top resources to operate at the highest efficiency possible. Combined with the green movement, technology improvements and sustained energy the Pyramid has truly set an industry standard. C&W contributed to the success of the building by maintaining a solid relationship with ownership and continually being a part of the major decision making process.

For further information please contact:

Matt SheweyAssociate

matt.shewey@cushwake.com415-773-3539

Margaret DuskinSenior Director

mduskin@cushwake.com415-773-3538

505 Sansome

September, 2007 Availabilities

9/07

LEASED!------------5,24120th/2050

15 offices, 2 conference rooms & kitchen, small server room with package unit. Good views to the north and east. Ready to go, after new paint and carpet.

5-10Now!Low $40’s

9,97611th /

1100

PENDING!------------2,94215th /

1550

Spec suite. Heavy private offices. Partial top floor of the building. Good, east and west views.

3-51/08$50 - $534,82420th /

2025

NotesTerm

(Years)Date

Available

AskingRentalRate

RentableSquareFootage

Floor/Suite

Building Maintenance Floor

Floor: 5, 19,49

Elevator Shafts: 18

Parking: 280 spaces

Height: 853 Feet48 Stories

Windows: 3,678

175 Foot-Wide Base

6,000 Watt Beacon

ONE HAT, ONE MISSION

Trisha Sanyal is probably looking at your resume, and yes, she’s judging you.

As an undergrad at The College of Wooster, 50 miles southeast of Cleveland, Ohio, Trisha Sanyal never would have thought her Psychology major would have landed her a role as the Senior Client Solutions Coordinator for all of Northern California. “It was sort of a leap of faith.” Trisha grew up in Deli, India but moved to the United States at a young age with her family. After graduating from Wooster, Trisha moved to a studio in Manhattan, what she referred to as a “closet”, to begin a career in Human Relations at a small securities firm. After several years, she transitioned out to San Francisco in 1998 where she landed on the team that she is with to this day. We interviewed her to get an idea as to what Client Solutions is all about and how they are addressing the changing landscape of the commercial real estate market. TA: Thanks for taking the time out of your day to interview with us, can we ask, how swamped are you right now?

TS: It’s not too bad. The day-to-day here is pretty busy thought, but that makes it go by fast. I like to stay busy. TA: So what’s a typical day in the life of Senior Client Solutions Manager like? TS: I’d say that I’m spending 80% of my day on the phone dealing with property and facility employee issues. These folks come from such a vast array of backgrounds and there’s a lot of variables that go into dealing with the legalities of human resource issues. TA: Would you say you are wearing two hats due to the fact that you straddle the fence, half human resources, and half client solutions? TS: I would say it’s more like one giant hat! The two concepts are so inter-related that the lines get blurred. You want the facilities that your clients lease or own to have the highest quality of human capital; these two ideas go hand in hand. TA: What do you think it is about C&W that separates us from the competition? TS: I could easily say that it’s the people. I left C&W for a short while many years back for 6 months to work at a law firm, but the main reason I returned was the people. Jim Arce, Anne Stephens, Fred White, and everyone are all such dynamic personalities and working on projects with them has always been so easy and everything is always out in the open. Also there is a big push for people in the Client Solutions group to further their careers, take it to the next level, whether that be by attending more schooling, achieving certification in certain areas or whatever, it feels like

everyone wants everyone to get better. Encouragement is a big part of our group and I think that makes it fun to work here. TA: What would you say is one of your major challenges in the Client Solutions world? TS: There are so many variables when you are working with people. I’d say the hardest part is that everyone is off-site. I can’t visit these people because that wouldn’t be a great allocation of time, so not being able to have a face-to-face every once in a while is a challenge. TA: Is there an area that you think Cushman & Wakefield could improve on as we address the next generation of Client Solutions challenges? TS: I think that C&W is very far ahead but we are definitely lacking as far as technology is concerned internally and for our clients and also we should be market leaders as far as green initiatives are concerned rather than market followers. TA: How do you think young brokers could leverage Client Solutions to further their careers? TS: One idea I had was the quarterly managers meetings. These are presentations that are put on for property managers by engineers, developers, and all sorts of folks who are involved in commercial management. The younger brokers could benefit from this because you really come away with a ton of information. TA: Well thank you so much for your time today this has been very helpful.

We are sure that the JET’ers will find this very informative.

3121, 3129, 3137

FOR FURTHER INFORMATION, PLEASE CONTACT:

Cushman & Wakefi eld of California, Inc.Sacramento - Central Valley Offi ce

One Capitol Mall, Suite 670Sacramento, CA 95814

No warranty or representation, expressed or implied, is made to the accuracy of the information contained herein, the same is submitted subject to errors, omission, change of price, rental or other conditions, without notice, and to any special listing conditions imposed by our principles.

3137 SWETZER ROAD, UNIT A: ±3,000 sf (2,570 sf office and 430 sf of warehouse) Reception area Seven private offices Break room 1 grade level door Sprinklered

3137 SWETZER ROAD, UNIT B: ±4,500 sf (314 sf office and 4,186 sf warehouse) 19’ -21’ Clear height Two private offices Sprinklered Skylights 200 amps, 3 phase power 1 grade level door

3129 SWETZER ROAD, UNIT D: ±2,100 sf Great contractor space Could be used for dead storage 100 amps, 240 volts power Three small offices/workstations One grade level door

SEAN MEROLD916.288.4816

sean.merold@cushwake.com

ALI SHARIFI916.288.4805

ali.sharifi @cushwake.com

3121, 3129, 3137 SWETZER ROAD

SWETZER ROAD, LOOMIS, CA

FOR LEASE

THREE BUILDING COMPLEX WITH VARIOUS SUITES AVAILABLE FOR LEASE

Streamlining and Consolidating Lease & Management Forms

Unfortunately, the nature of the commercial real estate industry requires a substantial amount of paper work and formal documents as well as deadlines. The documents can range from tools used for lead generation and qualifying prospects, to legally binding lease documents and purchase and sale agreements. This is without mentioning the countless paperwork it takes to get to these final agreements. While this most likely will not change anytime soon, the way these documents and deadlines are managed and the way they are disseminated to other parties can and should be changed. A streamlining of this process can substantially change productivity and allow brokers to focus on growing their respective business.

In this day and age, computers and the internet are accessible from almost anywhere. This is obvious by the necessity of Blackberry phones and internet Wi-Fi locations in every coffee shop. This access to the internet allows for the free flow information between brokers and clients at all times. With

this in mind, the amount of time needed to review important documents can be drastically reduced. No longer does a broker or a client need to be in their office to receive or execute a document. Now approvals and reviews can take place almost anywhere. While email has proved to be an effective way of transmitting documents quickly, retrieving the emails is not always the easiest process. An essential way to streamline this process is an online application used by all parties involved in a transaction that has allows for each party to view and modify all pertinent documents. While similar applications have been implemented, their use by all parties has been minimal. This can be attributed to several reasons.

One such reason if lack of user friendliness. Despite the roll of computers in the daily lives of business men and women, there are still a substantial number of people who are still not as computer literate as their colleagues. Due to this, many people are intimidated by such online platforms and never use them. In order for these platforms to be efficient, they need to easy enough for all parties involved to use and understand.

Secondly, this application needs to interface with everyone’s calendar/schedule program. Once a deadline or date is input into any document, these should appear in everyone’s calendar. This is particularly true for the brokerage and property management. These dates allow for future planning and retention of clients. Simply notifying a client that their rent is about to increase or the date they must notify the landlord of a renewal is all

critical information clients do not always keep track of. Notifying clients of these dates would help to keep the relationship active. Finally these applications need to be made available to all departments of C&W. If a client has hired C&W as their leasing broker as well as property management, this tool would be worthless if all departments do not have the ability to access it. This seamless integration between departments allows everyone to view the most current information regarding the transaction. Transactions in this business are under constant change until they are finalized. They can only get to a final point through the passing of documents and adherence to deadlines. Having the ability to better manage this process would allow C&W to keep on in constant communication with clients and ensure deals are not lost due to mismanagement. Such a system is necessary for the next generation of C&W brokers to thrive.

Building Structures 555 Mission: A New San Francisco Landmark

555 Mission is a new development by Tishman Speyer. The thirty three storey building is located on Mission Street between Second and First streets

in the SOMA area of San Francisco..

The building was originally approved in 2001, but due to the then recent bust of the dot com bubble, Tishman decided to delay their ground breaking.

Construction began on the building in 2007 and is

projected to take 22 months to complete. The building is 548 feet (140 M) tall and will consist of 625,534 square feet of internal space. There will be 4000 square feet of retail on the ground floor of the

building, 20,700 per floor for the first twelve stories, 18,000 square feet per floor for level 14 through twenty two, and 16,000 square feet for

floors twenty three through thirty three.

555 Mission is a LEED certified building. Designed by Heller Manus & Kohn Petersen Fox

Associates architectural firms, the building features full glass sides, with glass and metal fins as

architectural details. Additionally there will be 11,000 square feet of outdoor public space. 150

parking spaces will be situated on two sub-grade basement levels.

The building will be at the center of the rapidly expanding Mission Street corridor, which is within easy walking distance of the city's prominent restaurants, hotels and cultural destinations. In addition to stunning views of the city and San Francisco Bay, the building will feature an 11,000 square foot plaza at street level. The design also includes two levels of below grade parking, highly efficient floor plates and the most current telecommunications capabilities. The building's exceptional design is the result of a close collaboration between award-winning firms Kohn Pedersen Fox and Heller Manus Architects. The building exterior will predominantly consist of glass curtain walls which incorporate a distinctive glass and metal fin into the vertical mullion. Its unique form will be an outstanding addition to the San Francisco skyline.

Tenant Improvements

What goes into the TI process?

The management

and pricing of tenant improvements can make or break a real estate deal. Luckily, the client solutions professionals at Cushman & Wakefield can walk their clients through each step of the process.

TI’s are important to plan effectively in order to increase the efficiency of the space, the image that it represents, and the ease of the deal transaction. A sophisticated tenant will know these things and make sure that each is considered properly when entering a transaction,

renegotiation, or personal investment in the improvement of their space.

One of the biggest issues in the TI process is the amortization of improvement costs into the rental structure. Some companies such as JP Morgan Chase will do a complete space plan on CAD for each location and estimate all the costs for improving each plan. This will help them think like a landlord so that they can determine how much flexibility there may be in the rent. The more knowledge a tenant can have in this regard the better. On the following pages you can see an example of such a space and pricing plan that JP Morgan Chase used to analyze a location prior to entering any kind of negotiations. They spend more time going over the TI’s than any other part of the deal, and it is part of the process that can be often overlooked by tenants and brokers.

Every tenant improvement process is different, but the basic process includes all of the following:

• Standard work letter

• Pricing Plan

• Construction Documents

• Bid Process/ Award

• AIA Construction Agreement

• Certificate of Occupancy

• Contractor Payments

• Punch List

• Certificate of Acceptance

Once the importance of the process is understood, as well as each step, a client can make a much better strategic decision about their lease negotiation or self improvement plan.

Market A n a l y s i s

The Process of Understanding the Real Estate Market

Before making any

kind of real estate decisions, a thorough market analysis must be conducted. This includes:

Building Analysis

What are the key features of the building that make it similar or different from other buildings? This includes location, amenities, appearance outside and inside of the building, vacancy, image, proximity to transportation or retail, etc… All of these factors must be considered when determining what type of product is being analyzed.

Commercial Comparison Grid

The comparison Grid is a basic tool used to view the differences between buildings being considered. It lays out the important features of each building (asking price, parking ratio, etc…) side by side so that the differences could be easily understood. This is a very client-friendly way to explain the pluses and minuses of each property.

Marketing Activity Report

This report is helpful in anticipating what type of deal would be done. The marketing activity report will show recent absorption and vacancy figures, which would give a tenant an idea of how aggressive landlords should be when seeking out the deal.

Recent Comparables

Comps are the most helpful tool of all when searching for space. A strong recent comparable will show what type of deal has been done for similar situations. This will show you exactly where the market is at, and should give you a great idea of where your deal should be as well. Prior to negotiation, it is helpful to have as many comps as you can gather. TB

Trent Barmby is a writer for Building Times and his opinions are those of his alone and do not necessarily reflect the overall opinions of the Building Times community as a whole.

SAN FRANCISCO OFFICE REPORT 1Q08 1

ECONOMY The Manhattan office market continued to tighten during the first half of 2007, extending strengths exhibited during the second half of 2006. Steady employment growth contributed to positive absorption of available space and rapidly escalating asking rents.

The New York City economy expanded at a healthy pace during the first six months of the year, led by strong gains in office-using employment. Data available through the end of May show that the City has added nearly 16,800 jobs in industries that are key to the commercial office market, with financial services and professional business services adding 7,400 and 5,500 jobs, respectively. This resulted in increased demand for office space in a market that was already the tightest it had been since the first quarter of 2001.

The year began with 26.1 million square feet) available throughout Manhattan. By the end of June, available space had fallen precipitously to 20.8 a decline of 20.5%. This diminishing availability of space has been the story of the market; April 2007 was the only month in the past year that did not record a month-to-month decline of at least 122,000 square. As a result, Manhattan’s overall vacancy rate has tumbled to a six-year low, closing the mid-year at 5.3%. For the third consecutive quarter, the vacancy rate closed below equilibrium, defined as a vacancy rate range of 7.0% - 9.0%.

OVERVIEW In this environment, it is no surprise that asking rates have skyrocketed. Up 36.2% from a year ago, Manhattan’s overall total average asking rent closed the first half of 2007 at another record-high: $59.17 per square foot. Thus far this year, rents have increased by an average of $1.44 each month since January, breaking the old record set back during the second and third quarters of 2000. The rapid pace of rental rate growth has extended throughout Manhattan. In every submarket but one, overall rents have registered double-digit percentage increases from a year ago. Chelsea, up 4.2%, was the only exception.

On a cautionary note, however, leasing activity throughout Manhattan was slower during the first two quarters, partially attributable to both significantly higher rents and lack of available space. With 11.8 leased year-to-date, 2007 activity trails last year’s total through June by 5.4%, with Midtown trailing by nearly 20.0%. This suggests that tenants are possibly beginning to search for lower-priced space in response to landlords hiking up rents throughout the market.

OUTLOOK This year’s leasing has been dominated by Manhattan’s leading industries. Financial services firms (36.4%) and legal services firms (11.7%) accounted for nearly one of every two square feet leased from January through June. In April, Lehman Brothers Holdings, Inc. signed Manhattan’s largest new lease in 2007, a 414,575-sf sublease at 1271 Avenue of the Americas. The frequency of transactions with taking rents starting at or above $125.00 continued to climb: 18 such transactions year-to-date versus 21 signed in the four previous years combined.

SAN FRANCISCO OFFICE REPORT

1Q08

BEAT ON THE STREET “With both the economy and national financial markets in flux, landlords concerned with cash flow (not face rates) are aggressively pursuing tenants in the market and renewals. Tenants are more tentative in their planning and relocations as they watch sublease opportunities increase and softening of some CBD rents. Only SOMA/creative spaces are still a hot commodity, with tech firms still fueled by venture capital funding.” –Margaret Duskin, Senior Director

ECONOMIC INDICATORS National 2006 2007 2008F GDP Growth 2.9% 2.2% 1.5%

CPI Growth 3.2% 2.8% 3.0% Regional Unemployment 3.9% 4.0% 4.4%

Employment Growth

2.0% 1.9% 0.2%

Source: Moody’s | Economy.com

ENTERENT

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

1Q05 1Q06 1Q07 1Q08

psf/y

r

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

CBD-Rent Non-CBD-Rent

CBD-Vacancy Non-CBD-Vacancy

ECONOMY The contraction of jobs in the Bay Area continues to weigh on the regional outlook. As of February 2008, San Francisco County’s year-over-year unemployment rate grew from 4.2% to 4.4%. Technology, life science, healthcare and energy sectors remain strong and are generating demand for new space. Conversely, banking and financial institutions are experiencing a dearth of growth while fostering little new demand. Current real estate decisions are driven by the unpredictability of the economy and financial outlook over the next few years. Tenants are signing short-term renewals to garner more time to wait out the market and plan accordingly for the future. Few long term decisions are being made as companies avoid locking into long-term real estate obligations during this unstable and weakening market.

OVERVIEW Consumer and business confidence began to weaken by mid-year 2007 and, at the start of 2008, confidence remained depressed. Office leasing and sales activity slowed as market fundamentals weakened this quarter. Some landlords have yet to lower asking rents while some tenants are stalling, opting for short-term commitments or waiting to see what the market will bear. As sublease space grows, landlords may be forced to lower direct asking rents on their competing spaces. There is also the threat of shadow sublease space or underutilized space not yet on the market coming online, which will increase vacancy and possibly open the door for price-sensitive tenants to enter the San Francisco market or relocate for the short term.

Investment activity slowed significantly during the second half of 2007. After the booming office investment market in San Francisco during 2005, 2006 and early 2007, the current number of class A buildings for sale remains low. Owners of premium buildings began pulling their buildings off the market as sale offers did not meet expected asking prices. Investor and owner/occupier demand for new product is declining due to higher financing costs, reduced capital availability and increasing vacancy rates. With investment capital shrinking in the market, the gap between buyer and seller perception will need to close to facilitate more deals. Sellers are still influenced by the rampant sale environment of the past five years while buyers have become more cautious and conservative. Both remain at opposite ends of the spectrum regarding pricing. This, coupled with the lack of available credit, is creating the slowdown in the real estate investment market.

FORECAST Corporate growth will be limited in 2008 as businesses are reluctant to expand. With activity slowing and tour volume decreasing, the office market is caught in the middle of minimal positive and mounting negative outlooks. This market could well be defined by flattening asking rental rates, major adjustments in office building values, higher vacancies and tightening credit. Unemployment is growing, further emphasizing corporate America’s contraction and streamlining of business practices. The only offset to this is the technology demand fueled by venture capital funding. When confidence grows, so will the push for hiring and expansion. Until then, we can expect weaker leasing and sale numbers for the better part of 2008.

MARKET FORECAST LEASING ACTIVITY dipped slightly, and may ramain depressed, as tenants review real estate decisions in the near term.

OVERALL ABSORPTION was positive during the quarter but the growing number of subleases will dilute this number in upcoming quarters.

SUBLEASE SPACE: CBD class A sublease space grew 51.1% this quarter, a trend expected to continue as tenants review their current space usage.

OVERALL RENTAL VS. VACANCY RATES

*Market terms & definitions based on BOMA and NAIOP standards. This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. 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. ©2008 Cushman & Wakefield, Inc. All rights reserved.

For further information, please contact our Research Department: Cushman & Wakefield, Inc. One Maritime Plaza, Suite 900 San Francisco, CA 94111 (415) 397-1700 www.cushmanwakefield.com

MARKET/SUBMARKET STATISTICS

* Rental rates reflect $psf/year MARKET HIGHLIGHTS

SAN FRANCISCO OFFICE REPORT 1Q08

OVERALL DIRECT YTD YTD YTD DIRECT WTD. AVG.NO. OF VACANCY VACANCY LEASING UNDER CONSTRUCTION OVERALL CLASS A GROSS

MARKET/ SUBMARKET INVENTORY BLDGS. RATE RATE ACTIVITY CONSTRUCTION COMPLETIONS ABSORPTION RENTAL RATE*

NOMA Financial District 26,051,324 113 8.6% 7.4% 353,444 0 0 (135,573) $51.66SOMA Financial District 21,470,542 97 7.4% 6.3% 756,662 547,000 321,545 417,234 $48.90CBD Total 47,521,866 210 8.0% 6.9% 1,110,106 547,000 321,545 281,661 $50.34

Jackson Square 1,369,168 24 4.2% 3.7% 11,584 0 0 (7,105) $37.63North Waterfront 2,394,975 31 5.6% 5.2% 63,331 0 0 65,417 $40.00South Beach/Rincon Hill 2,387,582 29 12.5% 8.1% 54,980 0 0 (34,563) $38.49San Francisco S. of Market 4,855,126 43 15.0% 13.6% 71,854 0 0 (172,492) $39.79West of Kearny 703,735 9 0.5% 0.5% 7,655 0 0 4,669 $38.00The Presidio 995,955 7 4.5% 4.5% 0 0 0 0 N/AUnion Square 4,035,868 58 9.3% 9.0% 88,957 0 0 23,833 $41.39Van Ness Corridor 4,379,522 34 9.6% 8.9% 41,274 0 0 33,238 $34.99Potrero Hill/Inner Mission 1,766,140 21 19.1% 15.5% 42,456 0 0 3,419 $30.66Mission Bay 283,000 1 0.0% 0.0% 0 718,000 0 0 N/ANon-CBD Total 23,171,071 257 10.4% 9.1% 382,091 718,000 0 (83,584) $38.33

San Francisco Total 70,692,937 467 8.8% 7.6% 1,492,197 1,265,000 321,545 198,077 $47.31

BUILDING SUBMARKET TENANT SQUARE FEET BLDG CLASS

633 Folsom Street SOMA Financial District California Pacific Medical Center 175,000 A555 Mission Street SOMA Financial District Gibson Dunn 60,400 A303 Second Street SOMA Financial District Avenue A/Razorfish 42,659 B100 First Street SOMA Financial District WTAS 38,866 A250 Brannan Street South Beach/Rincon Hill Omniture 35,419 B799 Market Street Union Square Monster.com 34,232 B50 Francisco Street North Waterfront Comcast 33,310 A135 Main Street SOMA Financial District Sedgwick, Detert, Moran & Arnold 26,410 A

BUILDING SUBMARKET Buyer SQUARE FEET PURCHASE PRICE

CSAA Headquarters Van Ness Corridor Vornado & Patson Van Ness Holdings 549,392 $120,000,000 199 Fremont Street SOMA Financial District PNC Realty Investors 397,300 $260,000,000

BUILDING SUBMARKET MAJOR TENANT SQUARE FEET COMPLETION DATE

400 Howard Street SOMA Financial District Barclays Global Investors 321,545 1/08185 Berry Street (two-floor addition) San Francisco South of Market N/A 175,000 1/08

BUILDING SUBMARKET MAJOR TENANT SQUARE FEET COMPLETION DATE

555 Mission Street SOMA Financial District Gibson Dunn 547,000 10/08500 Terry Francois Boulevard Mission Bay N/A 268,000 4/08

SIGNIFICANT 1Q08 NEW LEASE TRANSACTIONS

SIGNIFICANT 1Q08 SALE TRANSACTIONS

SIGNIFICANT 1Q08 CONSTRUCTION COMPLETIONS

SIGNIFICANT PROJECTS UNDER CONSTRUCTION/RENOVATION

Effectively Marketing Buildings Getting the listing is only half the battle. In order to make the transaction go through, it is vitally important to market your buildings.

Let’s say that you have a really great deal on imported alpaca wool. You know a guy who has a massive herd in the Chilean mountains and using economies of scale can undersell any other vendor out there. Without marketing, that alpaca wool will sit in a warehouse and you won’t make any money. The same concept applies to buildings. You can have all the space in the world, but if no one knows about it, you are never going to fill it up. Fortunately for us, there are multiple avenues for brokers to advertise their space, and it is usually easier to find a tenant than it is to move 3000 tons of alpaca wool. There are several websites that are widely used by brokers all over the United States. CoStar and LoopNet are websites that are MLS (Multiple Listing Service) based and are essentially a massive database

of available space. A broker trying to find space for a tenant can search by any specific requirement that they need. Another tool used by listing brokers is to send out email “blasts.” They are basically digital fliers for the space that they represent. “Blasts” feature pictures, notes on the space, and any special incentives that the listing broker is associating with the space to move it quickly. Intra office marketing is also prevalent in the brokerage community. Because there are often many brokers in a single office, on both sides of the landlord/ tenant representation equation, simply talking to each other is a great way to discover leads and put information about available space out into the world. Many brokerage houses have weekly or monthly meetings in which all the brokers come together and share information about the market and any noteworthy happenings. Here at Cushman & Wakefield, our research department keeps an active list of tenants in the market and has them compiled into one easy to read worksheet. Listing brokers use this to call tenant representation brokers and try to see if a deal can come together. Marketing is the key to a successful brokerage career. Understanding how it works and the strategic options that it provides are the difference between a mediocre broker and a top seller.

Comic Relief

Tenant Retention and Relations

“IT IS FAR MORE COST-EFFECTIVE TO RETAIN A TENANT THAN TO REPLACE A TENANT.” Since Cushman & Wakefield’s founding in 1917, tenant retention and satisfaction have been and continue to be the #1 priority of our management and leasing philosophy. We provide First-Class Service and Team Dedication to our tenants, resulting in a mutual commitment to lasting business relationships. Our goal is to provide the finest, custom-tailored amenities and services, regardless of size or type of building, or number of tenants. ♦ Foster An Environment Of Specialized

Customer Service We provide personalized service to our tenants by adhering to the concepts of Availability, Communication, Accommodation and Flexibility. By becoming familiar with each tenant’s business, decision makers, and building representatives, we are better able to partner with our tenants to enhance their tenancy. With open lines of communication - encouraging tenants to call us even for the little things, C&W ensures specialized tenant services that are second to none. • Availability • Communication • Accommodation • Personalized service (i.e., introduction

of services & amenities to enhance the tenants’ business and bottom line)

• Flexibility (guidelines vs. rules) • Know customer’s business, decision

makers and building contacts • Know customer’s building contacts

• Ask them to call you for the “little things”

• Ask the hard questions, i.e., How are we doing? What can we do better?

♦ Follow Up And Follow Through

The most effective way to retain tenants is by knowing their issues and concerns. We then follow up to assure them of our attention and follow through to ensure resolution. This two-part focus ensures that tenant needs are being met and that outstanding issues are being addressed. • Respond quickly and personally to

tenant concerns. • Ask how we can assist them to make

them successful • Know tenants’ concerns and address

them • Communicate the programs/initiatives

in place or in progress to enhance customer satisfaction

• Return calls “15 minute” rule • Pay them a personal visit vs. a phone

call follow-up and don’t hide behind e-mails

• Have team members report to you when they have completed a follow-up task, and check back with the tenant – are they satisfied?

• Pass on building update information – quick emails

• Know and respond to tenants’ “soft issues” as well as “hard concerns.”

• Communicate frequently and effectively.

♦ Provide a comfortable, safe and healthy

work environment

C&W strives to ensure that tenants are provided with all the “comforts of home”, and that the building and surrounding work environment are safe and healthy.

• Provide Luxury, Excellence, Communication and Availability

• Proactively address matters concerning comfort and safety.

♦ Create a sense of community – inside and

outside the building

We provide opportunities for tenants to contribute to the building’s “neighborhood”, and encourage tenants to network with each other. C&W creates a pride of ownership in the building and a sense for its tenants that they are connected to each other, and to the community and events outside the building. • Encourage the customers’ “pride of

ownership” in the building • BOMA membership/activities • Local Chamber of Commerce • Awareness of Community Events

Calendar • Build a community within the building

and clients • Inform Clients of community events

that may affect their business • Pride of ownership for both the building

and clients • Consistently friendly and willing • Provide opportunities for tenants to

contribute to the community. ♦ Empower the management team

No mission statement or tenant-retention philosophy is achievable without the complete and enthusiastic participation of the management team. C&W’s building management staffs are first trained in the mechanics of “running the plant”, then empowered to use that knowledge to extend first-class customer service to tenants. Every individual on the team is assured of his/her importance, knows and understands C&W’s Tenant Retention Mission and Philosophy and is rewarded for excellent performance.

• Constantly and consistently train your

team • Empowerment • Promote passion – encourage perfection • Guidelines vs. Rules • Communication – team knowledge of

the “whole picture” • Post customer survey results so all can

strive toward correction of weaknesses • Reward/recognize entire staff upon

lease renewals • Knowledge and understanding of the

mission and philosophy • Build ownership pride • Convey the importance of their position • Reward excellent performance

SAMPLE BUILDING PROGRAM

BP Plaza 333 South Hope Street

Los Angeles, CA 90071

TENANT RETENTION INITIATIVES

Submitted by Mark Hazan, General Manager

Client Steering Committee - A group of client representatives meet regularly to review client programs. This group assists with the identification and critique of events that may be adopted, changed or deleted from the building calendar. The committee ensures that we are delivering the programs that clients want and support. Through this committee it became clear that the clients wanted an opportunity to contribute to the community. Therefore, many of our events now have a charitable beneficiary. Quarterly Client Meetings - We host frequent meetings of our client representatives. In these meetings we discuss building improvements

and upcoming events. We also invite guests to present new products and services to our tenants. Client Networking Luncheons - The building and one client company host a luncheon that includes a tour of their space. This provides office managers an opportunity to tour another tenant's floor while they get to network with their counterparts at other firms. The building provides the coordination and a box lunch. Representatives from nearly every tenant attended our first event, and the response has been overwhelmingly favorable. The cost was less than $300 to entertain over 30 clients. Hope for Firefighters - Our largest event of the year is Hope for Firefighters. Now in it 6th year the event has become the largest firefighter appreciation event in the country. This year we raised nearly $90,000 for the Los Angeles Orphans and Disabled Firefighter's Fund. Building management founded and organized the event, which featured a "Taste of the Firehouse," fireman's "Muster Games," and entertainment. After three years the event outgrew the building and in now a major Bunker Hill event supported by the 6 Hope Street Bunker Hill high-rises. This event provides our tenants with an opportunity to develop relationships with the Fire Department, give back to the community, build teams and have fun. For more information please visit the Web site at www.hopeforfirefighters.org Field Trip and Lunch - This year we hosted a client event in which we took approximately 20 of our tenant representatives on a tour of the Los Angeles Museum of Contemporary Art, located just a block from the building, and lunch afterwards. Many had never been to the museum and found it an enlightening experience. The museum was free and lunch cost less than $500. Future trips will include a tour of the new Cathedral, Disney Concert Hall, Staples Center, etc. Welcome Bag - When a new client moves in, we place a nice cloth bag with our building

logo (cost $4 each) filled with building and area information and gifts. The bags are placed late Sunday night to welcome the tenants on their first day. The welcome bag typically includes downtown maps; public transportation and the garage directions; coupons from retail tenants in the building and neighborhood; the building newsletter; a calendar of events and amenity information; and coffee cups and water bottles from building retailers. Welcome Breakfast - Once a new tenant settles in, the building hosts a catered welcome breakfast in the tenant’s new suite. Building management representatives are on had to meet and welcome everyone to the building. A gift is provided to the firm; usually we give the tenant an engraved coffee and water serving set for their conference room. Building Tours - Semi-annually and for each new client company, clients are invited to tour the behind-the-scenes areas of the building. Tours include the roof, fan rooms, fire pump room, emergency generators and fire life safety control room. Clients come away with an added respect for the quality of maintenance and complexity of the building operations. In-N-Out Burger - A favorite client event is In-N-Out Burger. This popular fast-food restaurant brings out two trucks and sells hamburgers, chips and a drink in front of the building. The building staff assists in the set up and sale of tickets, which are sold to our tenants at cost. The meal is sold for $5. Our cost is $4.50 and $0.50 per meal is contributed to the Building Charity Fund. This is a well- received, no-cost tenant event that we coordinate three times each year. Pumpkin Carving and Easter Egg Decorating Contests - Creative tenants are invited to participate in these contests. At Easter time, Styrofoam eggs are delivered. At Halloween, pumpkins are delivered to each floor. Individuals or teams at the client offices decorate the holiday symbols. The creations are judged and prizes awarded. Usually they

are judged and displayed in an event that includes In-N- Out Burger. Bring Your Child to Work Day - Many tenants participate in this nationally recognized event. The Building hosts an Ice Cream Social for the children and we take them on a tour of the building. In addition, movies are shown during the day in the auditorium. Food on Foot - Krispy Kreme Donuts are sold by this organization in the building lobby to support their efforts to ease the plight of the homeless in our community. Clients enjoy the treat, and 50% of the proceeds are donated to this worthwhile cause. Girl Scout Cookie Sale - Each year we invite Girl Scout Troops from disadvantaged areas to sell cookies in the lobby of the building. Family Gatherings - The building hosts Spring and Winter family gatherings on a Saturday each year. This is an opportunity for clients to bring their children to the building. We provide arts and crafts as well as refreshments and photographs with Santa or the Easter Bunny. The cost of the event is approximately $2,500. Newsletters - The building produces a tenant newsletter quarterly utilizing the Adobe In-Design program. Articles are of general interest to tenants including building events, improvements, amenities, featured tenants and building associates of the quarter. The newsletters are left on each desk by the janitorial crew and distributed in the building lobbies. Web site - The building Web site is 333southhope.com and features information about the building, amenities, leasing availabilities, photographs. Tenants use the site frequently to review and download building forms. The site is updated frequently as required.

Retail leasing opportunitiesin the heart of downtown San Francisco –

the ideal location to reach the Financial Districtworkforce and Union Square shopper.

RETAIL LEASING

JENNIFER HATCHjennifer.hatch@cushwake.com415-658-3649

KAZUKO MORGANkazuko.morgan@cushwake.com415-773-3546

NICOLE DUBEEndubee@cwpmc.com415-393-1506

CROCKER GALLERIAIn the Heart of the Financial District

50 Post at Montgomery • San Francisco • 415-393-1505FREE Wi-Fi • ShopAtGalleria.com

Located in the heart of the Financial District at 50Post and Montgomery, Crocker Galleria appeals to the Financial District workforce and the UnionSquare shopper for its convenience and specialtyretail offerings.

A San Francisco landmark since opening in 1982,Crocker Galleria features a spectacular glass pavilionsoaring above three levels of service stores, uniquespecialty shops and a diverse selection of foodsranging from burritos to sushi.

More than a specialty retail center, Crocker Galleriais a convenient downtown neighborhood away fromhome. See for yourself why leasing at CrockerGalleria will be great for your business!

Concierge - We have a contracted Concierge Service on-site in the building lobby each Friday to assist clients with entertainment, event coordination and purchase of concert, sporting event and theater tickets. Floor Watch program - The building employs a Floor Watch program similar to the Neighborhood Watch program. Designated "Floor Watchers" accept the responsibility to "Observe and Report" any unusual activity in and around their premises. The program encourages building occupants to be alert and question when someone does not seem to belong in their suite. School tree trimming program - Annually, children from disadvantaged neighboring schools are invited to decorate the buildings Christmas trees. The children are given a theme and hand-make their unique decorations. Clients vote and the winning school wins a trip to Disneyland for 35 students. Boutiques - We have three boutiques each year, a Valentines Day Boutique and an alternating Mother's Day or Father's Day boutique. Vendors are invited in the sell their goods and make gift shopping convenient for our tenants. Books are Fun is also on hand to sell gift books and other items, with a portion of the proceeds going to the Building Charity Fund. Finally, we have an unusual Holiday Boutique geared towards handcrafted items made by building tenants. Tenants work all year making crafts that are sold at this boutique. A fee of $35 for each table is charged with the proceeds going to the Building Charity Fund. Emergency Hotline - The building maintains an emergency, toll-free hotline, which provides updated information in the event of an earthquake fire, or civil unrest for clients, their employees and building staff members. Building management employees update the message on a regular basis to disseminate current information on the status of the building.

Tuesday Trivia - The parking operator hosts this weekly game for parking customers. Each Tuesday a trivia question is posted above the card readers. Tenants fax in their answers to the parking office. A winner is pulled from the correct answers. The winner, who receives a free car wash, movie tickets or restaurant gift certificate, has his/her name posted at the garage entrances on Wednesday. Car service equipment - The parking office has available a battery jump starter, air compressor to fill tires and tire changing equipment. When a parker is stuck we can get him/her going in minutes. Books on Tape - A library of books on tape and CD is maintained in the parking offices. Monthly parkers may check our books at no charges. Weight Watchers at Work and Yoga Class - Meetings are held each week in a vacant suite at lunchtime for Weight Watchers and Yoga. Participating tenants pay a fee for the class. Tenant Focus Groups – Periodically, tenants are given the opportunity to get together in small “Focus Groups” where they can network, learn about each other and their various businesses, and perhaps find ways to be mutually beneficial to one another.

SAMPLE BUILDING PLAN 777 Tower

“FirstClassService” Menu Items Quarterly Service Excellence Award Presented by ownership on a quarterly basis, this award honors and recognizes the exceptional performance and innovative contributions of the recipient. The first award was presented to the entire Swing Shift Security Staff in appreciation of their commitment to the building during a bomb scare on March 31, 2003. In addition to the award, the entire team received a catered dinner from Morton’s compliments of ownership. Future awards will include an Ownership and Management lunch with the recipients for a “Day at the Races.” Executive Parking Privilege Programs “Tuesday Car Wash” – Executives parkers leave their car with a representative of Aztec Auto Detail upon entering the Executive

Garage. As a service to our executives, their vehicles will be washed and returned to their spaces in the garage at a discount. Executive Tuesday Car Wash Rates are $11 for standard vehicles and $15 for SUV’s. “Newspaper/Coffee Service” – As a unique benefit to the executives who park below the building, newspapers are stocked in the Executive Elevator Lobby located on the ground floor. In addition, free coffee coupons are offered to the executive parkers when they arrive at the security check-in. “Dine with our Dignitaries” – As part of the Leasing and Management Team’s outreach program, a monthly invitation will be issued to the executives (one tenant per month) to join us for lunch. The “Dine with our Dignitaries” lunch will allow us to gain feedback regarding the services that we have implemented, and to foster a better relationship with our tenants. Show your Building Card and Save An exclusive benefit to the tenants of 777 Tower, retailer discounts are provided when the 777 Tower Access Card is show. Retailers are offered an opportunity to market their services to the tenants of 777 Tower in exchange for an exclusive discount to out tenants. 777 Tower Dollars (Employee Recognition Program) To encourage “FirstClassService,” our Client Contacts will each receive two 777 Tower Dollars. The dollars are to be used to recognize the outstanding service they received from one of the 777 Tower staff. Redemption of the dollars entitles the recipient to a $20 instant cash bonus. Suite Service Janitorial and Engineering staff will carry with them candy tins to leave with tenants after completing a service call. The candy will contain our trademark “FirstClassService”

tagline, as well as the contact information for the Office of the Building. Career Development Program 777 Tower is committed to create a working environment where its building employees can dream, achieve and grow. As such, a Career Development Program has been created to allow an opportunity for receipts of the Service Excellence Award to receive a $1,000 grant towards their goals. The program is coordinated by the General Manager. Weblink Our Web-based work-order system links to our current MP2 work-order system. This implementation allows our tenants to instantly input their work orders via the Web, and allows them the ability to receive e-mailed updates regarding their work-order status. Passage Point By installing a visitor badging system, visitors now can access the building more quickly. In addition, Passage Point was installed on our Web server, allowing tenants to pre-register their guests. This makes the process more streamlined. 777 Tower Website The building web site at www.777Tower.com includes information about the building, amenities, leasing availabilities, and links to our Web-based services. In addition, registered users can access the complete Building Handbook and tenant forms. Quarterly Client Meetings To keep our clients informed of building projects and life safety information, we host quarterly client meetings. These events normally include a continental breakfast, and are attended by our client contacts.

Ernst & Young Plaza Annual Tree Lighting Annually, 777 Tower and Trizec Properties host the Official Christmas of Downtown Los Angeles. The event is a fundraiser for local charities and is sponsored by local media. The program is a family event that normally draws about 2,500 attendees. “Books are Fun” Book Fair In conjunction with Reader’s Digest, the building hosts a Book Fair. Books and toys are sold at a discount to the tenants of the building. The proceeds of the event are donated to local charities.

SAMPLE BUILDING PLAN

MCI Center / Macy’s Plaza 700 S. Flower Street

Los Angeles, CA 90017

Tenant Retention Program

1. Annual Tenant Surveys

♦ Staff reviews surveys. Specific problems or complaints are addressed with the individual tenant. Common complaints or problems are reviewed and corrective measures determined by department heads.

♦ Currently developing a program to reduce tenant complaints and promote customer service (Winning) habits. • Goal - Top 2 complaints will be

reduced by 50% in the next survey. • Goal – Winning habits will be

encouraged and rewarded through a quarterly employee recognition award.

2. Service Requests Reviewed Weekly

♦ All services requests are reviewed weekly to determine if appropriate service was provided. Reoccurring requests are reviewed and the tenant is followed up with via telephone.

♦ General Manager and Chief Engineer will review and respond to habitual problems. Outside consultants or C&W corporate personnel will be brought in if the problem warrants.

3. Tenant Newsletter

♦ Newsletter promotes the building and C&W. Newsletter includes discounts for the retail stores in Macy’s Plaza and food court.

♦ The newsletter is written and produced by the marketing director. Primary distribution is via email; however approximately 100 hard copies are printed in house, which helps to reduce the expense.

4. Tenant Appreciation Breakfasts

♦ Quarterly tenant breakfasts are held for the office tower tenants. Building staff (including the GM) serves the food to promote tenant/staff interaction.

♦ Food for the event is purchased from the tenants of Macy’s Plaza.

5. Concierge Services

♦ The building utilizes an outside Concierge Service to come to the building on Fridays to offer discount tickets to the movies, the theater, sporting events and theme parks. This is at no cost to the building.

6. Tenant Lunches

♦ GM and PM take tenants (focus is on decision-makers) to lunch. This builds stronger relationships between the management and the tenants. Gives management the opportunity to better understand the tenant’s business and how we can partner with them.

7. Tenant Welcome Packages

♦ Building information package – important information about the building including, security procedures, parking, retail mall, hotel and other amenities.

♦ Tenant newsletter. ♦ Welcome basket (assorted muffins and

coffees). 8. Emergency Hotline

♦ The building has set-up an emergency hotline to provide information about the property in the event of an emergency. Callers can get up-to-date information about the status of the building. Building management can update the information from a remote location if necessary. This is a great tool for disseminating information to the tenants of the building. The toll-free telephone number is printed in the building information packages and included in our newsletter.

Interview with Anne Stephens:

Client Solutions Branch Manager

Steve Monahan: Hi Anne, Thank you for taking the time to meet with me.

Anne Stephens: No problem!

SM: What do you do as a Client Solutions Branch Manager?

AS: I am in charge of the investor services side of the business. Or in other words, when a building owner is in the business of investing in buildings, but not managing them, they hire me to look after the building and ensure that it is running efficiently.

This includes every aspect of keeping the building running: keeping track of the tenants, ensuring that they pay on time, delegating individual property managers to the buildings, tracking capital improvements and keeping an operating budget.

SM: How large of a geographic area do you work with?

AS: I work only in the Bay Area. I manage eighteen million square feet of office, industrial and retail.

SM: How is C&W poised to compete with other brokerage firms that have Client Solutions operations?

AS: All of the major players out there in the market place have similar property management operations. Jones Lange LaSalle and CBRE both have very active operations in the Bay Area. Additionally the CAC Group and Colliers are my competitors.

C&W competes very well with these other firms. Although we are a large firm, we have a great entrepreneurial feel to us, and people like our ability to adapt to the market and provide first class service in dynamic situations.

SM: What are some challenges with your position?

AS: Like all types of brokerage, this is a relationship business. At one point or another you will run into almost every player out there. It is really important to generate good relationships and keep them going. Additionally it is hard to find god people to work with. Because it is such a relationship business, the people that you have interacting with clients on your behalf have to represent you well. And of course there is then the economy to deal with. I have to adjust my management fees to stay competitive, and in a tight economy, it becomes increasingly difficult to stay competitive and still get a paycheck.

SM: What is your favorite thing about working with C&W?

AS: Like I mentioned before, Cushman & Wakefield has a very entrepreneurial spirit to it. The corporate mandates that we receive have a great feel to them, and are done in the best interest of our employees and customers. We also have a great team of people working here, who do their work well and are fun to interact with. Coming to work is fun, not a hassle.

SM: Finally, how does Anne Stephens unwind?

AS: Ha ha. Well I like to go to the gym after work, and take my dog for walks around the neighborhood. But I must confess that my true calling is gardening. I love to work outside on the weekends, and then relax with a nice glass of wine and enjoy my handiwork.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ED GRAMMENSedward.grammens@cushwake.com

415.773.3552

Cushman & Wakefi eld of California, Inc.

San Francisco Offi ce

One Maritime Plaza, Suite 900

San Francisco, CA 94111

BUILDING FEATURES:

First Floor – 6,388 Square Feet

– Lab and R&D space

– Tile floor

– 1,500 square feet of Class 100K clean room

– Venting for hoods

Second Floor – 8,487 Square Feet

– Private offices and open area

– Divisible

– Suites of 2,125 sf, 2,125 sf and 4,237 sf

– Kitchen area in each suite

Sublease through February 28, 2012

Ideal for startup

Excellent freeway access

Amenities nearby

LIFE SCIENCE SUBLEASE OPPORTUNITY

14,875 SF

2401SAN LEANDRO, CALIFORNIA

MERCED STREET

BONUS COMMISSION: $1.50 PSF / YEAR

FOR FURTHER INFORMATION, PLEASE CONTACT:

BOB KRAYNAKSENIOR DIRECTOR

415.658.3689bob.kraynak@cushwake.com

LISA CRACKNELLSENIOR DIRECTOR

415.773.3569lisa.cracknell@cushwake.com

DIVISIBLE TO 20,000 RSF

PLUG & PLAY WITH FURNISHINGS

$23/RSF FULL SERVICE!

READY TO OCCUPY

EXTREMELY EFFICIENT LAYOUT

HIGH CEILINGS

ABUNDANT NATURAL LIGHT

POTENTIAL BUILDING SIGNAGE

CREDIT SUBLESSOR

SHUTTLE SERVICE TO BART AND CALTRAIN AVAILABLE

UP TO 60 ,000 SQUARE FEET AVAILABLE

99 RHODE ISLAND

Editorials Section The members of Team AWESOME give their

opinions on relevant Client Solutions related topics.

NOI Tonic

How to effectively make proactive concessions, bolster retention and preserve the bottom line in a soft Multi-Family market

By Sean Merold The recent downturn in a number of markets has landlords looking for proactive, creative approaches to shoring up net operating income. The multifamily market has been hit also (excess vacancy, competition among residents, sluggish job numbers). Net income repairs requires assertive, creative and proactive strategies. Holding onto current residents are the cornerstone of rebuilding net operating expenses. One should make it a point to check in with them regularly to make sure they are happy. Consistently providing extra attention to tenants has a substantial effect on retention and net income. Soft markets encourage concessions to be competitive. One popular concession is free rent, though this can have substantial consequences on the tenant’s lease risk. Other value-added items to “sell” are convenience services (auto detailing services, discounts for local residents, short-term stays for guests). Emphasizing customer service and

strategically marketing concessions will help shore up NOI during trying market downturns and speed recovery when the market improves. If there are periods during which it is particularly hard to rent, keep up on lease renewals. With attention to renewing leases at the best times, seasonal exposure can be substantially managed. If you know someone is not going to stay, use early pre-emptive marketing to get units shown to potential renters- get a head start in exposing the unit to the market.

Death, Taxes, and Tenant Turnover A look at the importance of developers and landlords accepting and planning for tenant turnover.

By Walt Stephenson

It has been said that you can count on two

events happening in a lifetime: Death & Taxes. As a landlord, I would like to throw another event into the mix – Tenant Turnover. As an owner of multi-tenant properties, one of the last things I want is a tenant to vacate my building. While in some cases, it seems there are tenants who look for ways to make my life miserable with their constant nagging and ridiculous requests; but in the end, they still have to send me a check every month, and it is hard to let that go. In addition to this loss of income, when a tenant vacates, there is an inherent down-time from when they vacate the building until I can even tour a prospective tenant through it. At a minimum, I’m faced with the time and cost of repainting and recarpeting the suite once they vacate. This down-time creates a longer gap until I can once again generate rental revenue.

With these factors in mind, I have begun looking at my buildings with a new mindset. I have come to realize that like death and taxes, tenant turnover is an issue I cannot escape. But rather than sweep this problem under the rug, I have taken a new proactive approach in the development, management and marketing of my properties. I was recently approached by several brokers from Cushman & Wakefield who claimed they had a profound new way of looking at managing and marketing my properties. Despite my initial thoughts that this was

a typical pitch to get the listing, I decided to meet with this team.

Rather than bore you with the details of lunch, I’ll cut directly to chase. The C&W group was fantastic. Rather than discuss their resumes and talk in industry specific jargon, they actually addressed my concerns regarding tenant turnover and the effect on me as a landlord. In addition to meeting with the brokers, a member from the property management department (PM) was present. They explained how PM keeps in constant

communication with the existing tenants in regards to their requests as well as future occupancy plans. Once a tenant communicates to the PM they plan to vacate the property, they directly communicate with the brokers to begin marketing the property. While the marketing effort is taking place, PM can take the necessary steps to prepare the suite for occupancy, thus eliminating much of the downtime and the impending headache that this process used to impose on me. They were able to add the value of planning ahead to how the building was managed. This ability was absent from the prior management strategy.

Since contracting with C&W for the leasing brokerage as well as management, there have been several tenants who have come and gone, but I certainly haven’t noticed this through a decrease in the revenue stream. Suites that used to sit vacant for 2-3 months or more are now leased within weeks. Rather than spending my time negotiating with tenants to keep them in the building at a lower rent, C&W has devised a strategy to continually look to the future and plan for new tenants that would pay a significantly higher rent then I would have received from an existing tenant.

The buildings I own have not changed; but what has changed is a substantial increase on the return of these investments. The down-time has decreased while the revenue stream has constantly increased. Such a result is one every landlord seeks achieve, but few are able to accomplish. This result has been made possible simply by implementing a team that can adequately plan for tenant turnover and aggressively capitalize on the opportunity it presents. As a landlord, this shift in thinking is one of the best things I could have done. Death, taxes and tenant turnover may all be things I can count on occurring in my lifetime, but at least now one of these issues has been turned into a financial benefit.

Bird’s of Prey

Protecting you tenants from Tuberculosis and Histoplamosis

By Matt Conti

Smart, tenacious and persistent birds pose a great nuisance to real estate managers. The potential problems range from unsightly messes, to moderately annoying behaviors, to serious health hazards. The real estate manager must protect the properties bottom line from these pests, but how? Humane methods do exist. Read further.

Birds often fly to flat areas where they can easily land, rest, find food and shelter, and breed. The roofs of commercial properties present an ideal location for all of the above. The problems often start with just a few birds landing on a building, but they quickly multiply. Clumps of feathers and nesting materials block roof drains resulting in standing water which can damage the roof and lead to costly repairs. Wherever birds travel, they leave bird droppings behind. The highly acidic droppings can damage wood, stone, concrete, marble and shingles as well as sheet metal copper and steel. Bird droppings pose the threat of slippery steps, sidewalks, and fire escapes. Even more serious, germs and parasites can be found in bird droppings and may cause illnesses like tuberculosis and histoplasmosis.

Scare Tactics

Scare devices play on a bird’s instincts to avoid natural predators like hawks or owls. Such devices are very effective, but must be moved periodically to prevent familiarization, which would render them useless. On commercial buildings with ultraviolet-reducing coated windows, highly reflective round diskettes can prevent birds from crashing into the window. Odor Tactics

When scare tactics fail, applying a non-toxic and non-lethal, offensive smelling or tasting substance to parts of a property will send birds flying south. Ultra sonic devices which use frequencies above the range of human hearing can also be effective. These devices irritate birds by replaying digital recordings of the bird’s natural distress call.

Installing a physical barrier such as landing inhibitors is another potential solution and may be the most effective. They are made of unbreakable materials, require no maintenance and can be left in place indefinitely so they continue working day and night without causing any harm to birds.

The bottom line is that a bird free property

enhances the appearance of a building, reduces the risk of health hazards and results in lower maintenance and repair costs. When applying the above methods, keep in mind that to eradicate pesty bird from your property, thoroughly clean areas before installing any control devices. Use a sanitizer to kill any germs, viruses, and bacteria. Wear a hat, goggles, mask, gloves, boots and disposable or washable clothing.

WIDE OPEN SPACES

Rethinking the modern workspace and the implications of an open-plan.

By Jon Dishotsky

The days of the mahogany board room and large cigar filled corner private offices are relics of the past. Modern office space has transformed to give way for open-air, environmentally friendly, and collaborative workstations complete with common rooms, modular furniture, and more natural light. The push away from the “Dilbert” style cubicle farms is apparent now more than ever as work-stations feature lower-paneling and the once-walled off private offices are glass covered. This may sound like a nightmare for building owners as tenants can get away with leasing less space, especially given that figures on a per employee basis have dropped from 190 square feet to between 150 and 100 square feet. However, as tenants save

cost on real estate they can incorporate a larger labor force and potentially increase productivity. According to the Journal of Property Management, the advent of wireless internet, laptop computers, and voice-over internet protocol have increased the flexibility and openness in offices. Employees now have the freedom to work wherever they want and collaboration between co-workers is readily available when corridors and closed doors are not impeding. Technological innovation has really given way to the ever-shrinking office space as well. Large monitors have been replaced by sleek flat screen panels. Bulky paper-filing cabinets have now been replaced by thumb drives and servers. And large profile wooden and metal desks have been replaced by collapsible 120-degree aluminum boomerang work benches. Architect Tom Polucci of HOK Chicago figured that every cabinet he eliminated in a clients space plan would save $1,000 on an annual basis. The 30 cabinets that were eventually removed saved the company $30,000 annually on rent. For landlords, utilizing the open plan for their tenants is a value-play. Typically, less additional work will be needed as the open plan space comes available and furthermore modern cabling and wiring allows most tenant to move in on an “as is” basis. Underfloor systems can be a great addition as well and can smooth the transition as new tenants move into a building. There are unseen costs however when jumping on the open-plan bandwagon. According to the Journal of Property Management, a landlord or tenant can run into a great deal of unforeseen costs such as HVAC issues, zoning laws and electrical complications as they attempt to gut a space.

CLASS “A” OFFICE

For Lease

The Vineyard495 N. Whisman Road, Suite 100

Mountain View

SUITE: Suite 100

AREA: Approximately 2,958 RSF(Expansion Possible)

RENTAL RATE: $2.00/NNN

POSSESSION: Immediate

TERM: 3yr. Minimum

FEATURES:

• Currently in Finished Shell Condition

• Ideal Location Within Brand New High End Office Complex

• Perfect for High Tech Start-Ups and Professional Service Firms

• Bank Use Possible

• TI Money Available

• Prime Mountain View Location –Immediate Access to Highway 85, 101, and 237

• Motivated Landlord

No warranty or representation, express or implied, is made as to the accuracy 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 specific listing conditions, imposed by our principals.

SPACE AMENITIES:

• Below Market Rent

• Flexible Interior

• Two On-Site Cafes

• Neighbors companies such as Nokia, Mercury Interactive, Symantec among others

• Close to VTA Light Rail, Local Retail & Health Clubs, and the Sunnyvale Municipal Golf Course

560 S. Winchester Blvd., Suite 200San Jose, CA 95128

For More Information Please Contact Exclusive Agents:

RUDY SILVERBERGSenior Director408.572.4116Rudy.Silverberg@cushwake.com

WALT STEPHENSONAssociate408.572.4151Walt.Stephenson@cushwake.com

GREEN: THE WAY OF THE FUTURE

Green is no longer about hugging trees and not shaving your legs. By Steve Monahan In a world where consumers are increasingly informed in their personal and business lives, service providers are no longer dictating the terms of doing business with their clients. No longer reign the times where clients don’t know any better about the products they are buying. People know when their coffee is not free trade. People go online and research the car seat for their kids before they go to the store. Now, more than ever, when people find something they don’t like about a product, there are twelve other options that are slightly different enough to change their mind about the purchase. Even something a basic as milk has been “accessorized” to fit the personal tastes of each individual. Organic, fat free, soy and acidophilus each have a different twist and provide different options to today’s consumer.

The trend of increasing options, divergent demands and customer finickiness has invaded something a simple as property management. Tenants are requiring that their building owners provide new services, advanced IT solutions, and instant reactions to problems. They want it, and they want it now. If they don’t get it, they go somewhere (across the business park) to a building that will accommodate them. The latest trend in requests made by tenants to their landlords is for “green” amenities and practices in their buildings. “Green” you say? That costs more. That takes more time. That’s for hippies and tree huggers. WRONG. Landlords are realizing that “green” is the way to go. Leaseholders like to brag to their fellows across the parking lot that they have a green building. They feel better about being at work and reducing their impact on the environment. They advertise it on their website. Their customers “digg” it and recommend it to their friends. Pretty soon the parking lot is full of Priuses. Building owners tend to be on the conservative side of any argument, but especially when it comes to them doling out money for “non-essential” expenditures. If and when they capitulate and change their buildings to “green” standards, it changes their perception. It makes their buildings attractive

to other like minded occupants, is better for the environment and, for the bottom line guys out there, IT SAVES MONEY!!!!! Take the new building developer. They know that in San Francisco, (the urban center for cutting edge “green” movements, and the city where the mayor has dictated that 75% of new construction will be “green”) people want “green” buildings. The cost is 5 to 10 percent more than “non-green” construction, there are many more hoops to jump through on both the local and state level to get the building certified as “green,” and usually requires more, smaller sub-contractors to get the job done (more moving parts, more things to go wrong). But when that building comes to the market, companies are bidding up the ask rate to get space, and that is something that no landlord will say no to. Additionally when it comes to the running of the building, those extra insulated windows, those solar panels on the roof and that low power consumption lighting system that was such a hassle to install, actually saves a ton of money on operating costs. Feel good and save money too? Tell me more….. LEED or Leader in Energy and Environmental Design is the standard in the Biz. The program has been around since 1998, but only has caught on in the last five years. There are multiple classifications (Certified, Silver, Gold and

Platinum) each with various benchmarks on a 69 point scale. The Highest levels of LEED certification integrate mechanical, electrical, waste, plumbing, and environmental aspects of design and construction. In most cases, getting all of these factors to come into alignment is easier said then done; moving one duct can change the entire

design of the floor. Yet when the whole orchestra comes together, the end result is truly wonderful. And saves money in the long run. Looking to the future, “green” will the building of the future. Every day suppliers, builders and installers perfect their craft and get better at what they do. The price of green is dropping

to levels comparable with traditional construction materials. The “green” trend is becoming more and more of a mainstay every day. It is finally ok to say that: “Doing good for the environment is doing good for the bottom line,” with a straight face.

Building Amenities & Service By Trent Barmby

Because we see plenty of buildings without any tennis courts suspended from their 73rd floor in our own neighborhoods. Building amenities: some would say that they are simple methods of attracting tenants. Others agree that without them there is no point in getting up every morning to go to work. For example, workers at the Google campus are issued these things

with computers attached to the top so they can comfortably ride to the closest Google game room

without missing a single draft pick in their fantasy football league. That’s called efficiency. Of course, not every amenity has to cost an arm and a leg to be appreciated. Do you take the TV in your office for granted? Try telling that to George W Bush, who has been trying to figure out for 8 years how to mount a flat screen in an oval office with no success. He will soon be leaving the White House as a result of his frustration.

At the end of the day, most Tenants would agree that it is not the elaborate amenities that attract them, it’s the basic ones. The Death Star didn’t attract Vader and his crew because of its unobstructed views

or abundance of common conference rooms. At the end of the day, it just came down to the convenient parking facilities.

Not that the fancy amenities aren’t nice too. Trust me, after working in this Hong Kong building (winner of world’s best bathroom 2007), toilet seats that aren’t made exclusively from gold just seem tacky.

Technology and its implications

By Kelly Myers

The old ways of managing property have been thrown out the window as new web based programs become the tool of the future. Property managers have seen huge improvements in tenant satisfaction, lease renewals and a decrease in outlays all thanks to the internet and new technologies created to streamline the relationship between building owner and tenant. Some of the advances in building management include an opportunity to entice potential tenants by wowing them with high-pixel images. This advancement gives Landlords a higher advantage over less savvy competition. Project managers have implemented web based services and seen a huge increase in lease renewals while decreasing paper processing. Service requests have been streamlined via email using time of completion and alert notification to all on-site engineers. In effect the call center budgets have seen a 70% decrease. Today, most managers use web based products for 90% of building requests including janitorial and product requests. It is evident building technologies have improved the management process by cutting costs, building Landlord/Tenant relations and increasing time efficiencies.

Tenant Friendly Web Features - Credit Card Rent payment - Account Information (balance, fees, deposits) - Rent reminder - Events calendar - Listing of shops and restaurants - Maintenance requests - Lease renewal - HVAC control s - Roommate finder - Security access for guests - Emergency drill announcements - Classified listings - Common area reservations - Utility connections - Tenant coupons or discounts

GLOBAL CLIENTSOLUTIONS

Global Client Solutions, Cushman & Wakefield’s global services organization,

provides strategic real estate solutions that fully support both our investor

and corporate occupier clients. We treat real estate portfolios holistically,

delivering comprehensive, strategy-based solutions across a full range of

locations, properties, and business requirements.

Through the formation of high-level partnerships, our clients gain the ability

to focus on their value proposition, confident that real estate experts are

attending to every strategic and operational detail required to administer a

single- or multi-location property portfolio. Our services include:

CORPORATE SERVICES

Strategic Account Management

Facilities Management

Lease Administration

Project Management

Transaction Management

INVESTOR SERVICES

Strategic Account Management

Agency Leasing

Property Management

GLOBAL CLIENT SOLUTIONS

GLOBAL CLIENT SOLUTIONS

Through close working partnerships, our

professionals thoughtfully apply the most suitable

combination of real estate services needed to

support and maximize our clients’ overall

business objectives. By outsourcing major

operations such as property management and

agency leasing services to our experts, our

clients gain significant efficiencies and, just as

importantly, the ability to focus resources on

their core competitive strengths.

Our comprehensive services are delivered

seamlessly in conjunction with the limitless scope

of Cushman & Wakefield’s integrated, full-

services global platform in both established and

emerging markets around the world.

STRATEGIC ACCOUNT

MANAGEMENT

Strategic Account Managers – your single point

of contact – drive the efficient, seamless delivery

of multiple Client Solutions services. Our

professionals form close, hands-on partnerships

with our corporate and investor clients to

ensure that all services are coordinated and

focused. To help our clients align their real estate

goals with their business objectives, the Strategic

Account Manager ensures that client results are

delivered with the support of a robust, globally-

integrated platform, which in turn is backed by

advanced technology, process improvement,

continual best practices and extensive

professional development programs.

CORPORATE SERVICES

Facilities Management

Through our client partnerships with some of

the largest and most successful corporations in

the world, we provide efficient, sustainable and

cost-effective facilities management solutions.

Our services are dedicated to creating a safe and

healthy operating environment that maximizes

productivity and eliminates concerns about

building operations, which frees our clients to

focus on their core business.

1

2Lease Administration

We help our clients actively control portfolio

costs and reduce risks, while enjoying the

empowerment created by regular strategic

portfolio analysis. Our proven process of data

collection, abstraction, input, and ongoing

maintenance ensures clients comply with the

reporting and process requirements of Sarbanes-

Oxley and other accounting regulations.

Project Management

Whether you aim to establish single or multiple

operations locally, nationally or globally, you will

benefit from the expertise of our extensive team

of more than 1,300 skilled project management

professionals who have an established reputation

for delivering consistent, reliable budget-based

solutions. We implement intelligent process and

budget models refined over years of experience.

This ensures clients are kept informed

throughout the construction process and that

projects are completed according to

specifications, on budget and on time.

Transaction Management

We take a comprehensive approach to trans-

actions by working with clients to thoroughly

understand their business objectives for each and

every assignment. We then develop a

transactional Process Guide that supports the

efficient, transparent delivery of services. All

relevant business criteria affecting a portfolio

strategy is carefully analyzed and incorporated

into each transaction. As well, transactions are

carefully monitored to ensure quality, cost savings

and consistent service delivery across multiple

tactical transaction providers, resulting in powerful

key performance indicators.

GLOBAL CLIENT SOLUTIONS

INVESTOR SERVICES

Agency Leasing

We deliver superior agency leasing results to

our clients through the assembly of a team of

landlord leasing experts from our brokerage,

asset and advisory service groups. Clients benefit

from a full spectrum of commercial leasing

services, including strategic asset planning,

marketing and leasing, market intelligence, and

customized accounting and tenant retention

programs. Working in partnership with our

clients, we develop strategic solution-based plans

for each asset that are supported by superior

transaction execution, as well as timely, thorough

and accurate documentation processes. Our

professionals also develop custom research

systems and standardized reporting systems

based on the needs of each property.

Property Management

We offer our clients around the world a complete,

global property management platform, along with

a time-honored reputation for outstanding client

service. Our expert teams work hand-in-hand

with our clients to increase property values and

position an asset to align with ownerships’ short

and long term investment objectives. We uncover

hidden costs, increase efficiencies, improve the

quality of tenant service and enhance the value of

our clients’ properties. The close partnerships we

share with our clients, along with the sense of

pride and ownership we take in the solution-based

management of each property, are core values that

enable our team to minimize operating expenses

while maximizing revenues.

GLOBAL CLIENT SOLUTIONS

3

Why choose Cushman & Wakefield? We offer knowledge leadership, a full platform

of global, commercial real estate services and a proven track record for innovation

and change management. Our client-driven professionals, who offer expertise in

virtually every business sector and real estate class, will help you develop and

implement real estate solutions that fully support your organization’s objectives

and competitive position.

Our local market knowledge and best-practice global solutions are delivered by

more than 15,000 employees located in 221 key markets in 58 countries around the

world. We provide fully integrated services across our unrivaled geographical reach

and extensive service platform to ensure that each client benefits from the most

targeted solutions and intelligence needed to achieve their specific needs.

Let Cushman & Wakefield demonstrate how you can realize new efficiencies

and maximize your investment value through the customized application of our

integrated global real estate services.

CUSHMAN & WAKEFIELD:Unlocking the hidden value of real estate

www.cushmanwakefield.com

For industry-leading intelligence to support your real estate and business decisions, go to Cushman & Wakefield’s Knowledge Center at cushmanwakefield.com/knowledge