scala - loopnet · tenancy at scala will be sticky as it will be difficult for companies to...

JLL | 1

ScalaConfidential offering memorandum

5889 Greenwood Plaza

Greenwood Village, CO 80111

September 2018

2 | SCALA – Greenwood Village, Colorado

This Offering Memorandum is provided for the sole purpose of allowing a potential investor to evaluate whether there is interest in proceeding with further discussions regarding a possible purchase of or investment in Scala, the (“Property”).

The potential investor is urged to perform its own examination and inspection of the Property and information relating to same, and shall rely solely on such examination and investigation and not on this offering memorandum or any materials, statements or information contained herein or otherwise provided.

Neither Jones Lang LaSalle Americas, Inc. nor the Owner, nor any of their respective partners, directors, officers, employees, shareholders and agents (collectively, “Agents”), make any representations or warranties, whether express or implied, by operation of law or otherwise, with respect to this Offering Memorandum or the Property or any materials, statements (including financial statements and projections) or information contained herein or relating thereto, or as to the accuracy or completeness of such materials, statements or information, or as to the condition, quality or fitness of the Property, or assumes any responsibility with respect thereto. Such materials, statements and information have in many circumstances been obtained from outside sources, and have not been tested or verified. Projections, in particular, are based on various assumptions and subjective determinations as to which no guaranty or assurance can be given.

Without limiting the foregoing, in the event this Offering Memorandum contains information relating to asbestos or any other hazardous, toxic or dangerous chemical, item, waste or substance (“Hazardous Materials”) in relation to the Property, such information shall in no way be construed as creating any warranties or representations, expressed or implied, by operation of law or otherwise, by Agents or the Owner, as to the existence or non-existence or nature of Hazardous Materials in, under, on or around the Property.

This Offering Memorandum is provided subject to errors, omissions, change of price or terms and other changes to the materials, statements and information contained herein or relating to the Property, and is subject to withdrawal, all without notice. The contents hereof are confidential and are not to be reproduced or distributed to any person or entity without the prior written consent of Agents or used for any purpose other than initial evaluation as indicated above.

Owner may, in its sole discretion, reject any offer to purchase the Property and may terminate negotiations at any time without written notice. Until a written sale agreement that is mutually acceptable to Owner and any investor has been executed by both parties, Owner shall have no binding obligations to any potential investor.

JASON SCHMIDT Executive Vice President +1 303 217 7953 [email protected]

RACHEL VOGEL Associate +1 303 542 [email protected]

BAXTER FAIN Managing Director +1 303 260 6538 [email protected]

Leasing Contact:Finance Contact:

PATRICK DEVEREAUX Executive Vice President +1 303 217 7977 [email protected]

Disclaimer

Exclusively offered by JLL Capital Markets:

NATE BRADLEY Senior Director | Cushman & Wakefield +1 303 813 6444 [email protected]

JLL | 3

ContentsExecutive summary 05

Property overview 15

Location overview 21

Market overview 29

Financial overview 41

Tenant overview 53


Executive Housing

E. Orchard Rd.

DTC Blvd.

S. Quebec St.ORCHARD STATION

BELLEVIEWSTATION

DENVER TECH CENTER

DENVER CBD

DTC Pkwy.

N

Orchard Light Rail Station

to I-25

9-min walk

1/2 mile

E. Orchard Access To Western Executive

Housing Base Landmark amenities

Executive Housing

E. Orchard Rd.

Direct Access to C-470 via Quebec Street

SCALA5889 Greenwood Plaza

SummaryExecutive summary

DTC Pkwy.


Executive summary

JLL | 7

Scala | Greenwood Village, CO

The OfferingJLL (“Broker”), as exclusive advisor, is pleased to present the opportunity to acquire the fee simple interest in Scala, a 95,230 square foot, 92% leased, Class A office asset located in Denver’s Southeast Suburban (SES) submarket. The asset is located within the covenant-controlled Greenwood Plaza Business Park and benefits from walkable access to the Orchard Light Rail Station and The Village Shops at the Landmark restaurants/retail amenities. The current ownership has completely redeveloped the interior of the asset including all common areas, spec suite tenant spaces, added one of the markets largest fitness centers and collaboration lounges, and updated the property’s outdoor decks. Scala’s recent upgrades, outdoor deck space, and walkable access make it one of the best under 100,000 square foot assets in suburban Denver.

Scala is a unique opportunity to acquire a best of class repositioned Class A office asset with secure and increasing cash flows. Scala will transact at a significant discount to replacement cost. Scala is conveniently located within walking distance of the Orchard Light Rail Station. The asset also has tremendous access to I-25 and C-470 via E. Orchard Rd. and Quebec Street. The building is flanked by Denver’s strongest executive housing base in nearby Cherry Hills, Greenwood Village, Lone Tree and Highlands Ranch. Executives that live in these exclusive neighborhoods have access to Scala without having to utilize Interstate-25 which has become highly congested with Denver’s recent population increases.

Additionally, Scala is within walking distance to The Village Shops at the Landmark, which offers close to 10 restaurants and retail amenities. Less than 5% of the office assets in Denver’s SES submarket have walkable access to such a strong amenity base.

With unobstructed scenic western views of the Rocky Mountains and a 3.70 / 1,000 SF parking ratio, Scala is well positioned to take advantage of the strong fundamentals and corporate growth in the SES submarket. Due to the recently completed spec suites, fitness center, collaborative lounge, outdoor deck space, and walkable access…the asset will continue to outperform the market in terms of lease rates and occupancy.

Offered at a significant discount to replacement cost, Scala represents an exciting opportunity to acquire a best in class property with sticky tenancy, and durable cash flow at an attractive going in yield with upside potential.

ASSET SUMMARY

Address: 5889 Greenwood Plaza Blvd Greenwood Village, CO 80111

Year Built / Renovated: 1974 / 2016

Size (sf): 95,230

Site (acres): 7.70 acres

Purchase Price ($PSF): $14,650,000 ($153)

Cap Rate: 7.00%

Occupancy: 92%

Number of tenants: 13

In-Place rental rates ($ psf FSG) $23.14

Market rental rates ($ psf FSG): $25.00

Parking Ratio: 3.70 / 1,000 sf (327 surface spaces)

Weighted Average Lease Term (WALT): 5.9 Years

In-place NOI: $1,026,781


Executive summary

Investment Highlights

Class A Office Asset in Ideal Location with Amenity Rich DesignThere has been a lack of quality Class A office assets of this quality, condition and size available to investors. The majority of Denver’s office stock under 100,000 SF is functionally obsolete due to a lack of on-site amenities and walkable access restaurants and retail services. Scala benefits from the distinct advantage of being located in the heart of the exclusive Greenwood Plaza Business Park, its walkable access to Light Rail and the Landmark Shops, and its recent repositioning which includes a new fitness center and collaborative lounge. The asset’s deck space offers unparalleled panoramic mountain views and outdoor collaborative space. The Property is at the epicenter of suburban office activity in Denver with strong tenant demand. Scala is proximate to Denver’s premier executive housing neighborhoods, the Greenwood Athletic Club, numerous premier restaurants, hotels and much more. Combining this premier location, the quality of the recent $1.1 million renovation, and strong market fundamentals creates the ideal formula for an investment that will continue to out-perform the market.

Best Amenity Package in Southeast Market Current Ownership has invested $1.1 million of capital to create an on-site amenity package that exceeds any under 100,000 building in the Southeast submarket. This includes a state-of-the-art fitness center with lockers and showers, a new conference center, outdoor and indoor collaborative environments, a coffee bar and game room, and multiple infrastructure upgrades. The recent investment into this amenity package will guarantee above market tenant retention and employee recruitment moving forward. Highlights of this capital infusion include:• Modern state of the art common areas and furniture• State-of-the-art fitness center / showers and lockers• Outdoor decks with panoramic mountain views• Indoor collaborative lounge & game room• Best of class training / conference rooms & technology • Coffee bar

CAPITAL EXPENDITURE AMOUNT SPENT

Basement through 4th Floor Renovations / SPEC Suites $478,597.00

Exterior Renovation $164,904.00

Fitness Center $215,421.00

Signage $36,053.32

Furniture $57,000.00

Cabling / Lights / Architect / Environmental $134,135.73

Parking $21,000.00

Total Capital Expenditures $1,107,111.05

Executive summary

JLL | 9


Wealth of Amenities within Walking DistanceScala is conveniently located less than a 1/2 mile from The Village Shops at The Landmark, which provides tenants with easy, walkable access to a variety of amenities. Restaurants at The Landmark include: Hapa Sushi, Jing, Bad Daddy’s Burger Bar, Lucy Restaurant, Pizza Republica, Slattery’s Irish Pub, Ted’s Montana Grill, Yanni’s Greek Tavern, The Palate Food & Wine and Early Bird Restaurant. Additionally, The Landmark has a number of retailers and shops including: Landmark Theaters, Comedy Works, Cyclebar, Upstairs Circus and Scissors & Scotch. Less than 5% of suburban office assets enjoy this level of walkable amenities in Denver.

Having all of these amenities within walking distance give tenants a variety of options without having to drive or use public transportation. Driving is necessary to reach these amenities from 95% of the Southeast Submarket’s other office assets; making Scala a rare investment opportunity. Scala’s rare access to this strong concentration of amenities in conjunction with the building’s on-site amenities will enable the ownership to push rental rates and always outperform the market in terms of occupancy and tenant retention. Tenancy at Scala will be sticky as it will be difficult for companies to relocate and forgo all that Scala has to offer to their employee base.

Excellent Access to Executive Housing and VisibilityScala is located a mile from the intersection of two major highways (I-25 and C-470) making it one of the best locations in Denver’s SES Submarket. This asset has tremendous access to the executive housing bases that surround the property. Scala is situated a ¼ mile west of the I-25 and Orchard exit; and a mile from the Quebec Street and C-470 exit. The property’s proximity to C-470 allows the executive housing bases of Highlands Ranch and Lone Tree the opportunity to access the asset without having to drive on Interstate 25. Executives from Greenwood Village, Cherry Hills and the Preserve can access the Property from Orchard Street or Belleview Avenue and also not need to utilize I-25. There are few assets in Denver’s SES submarket that have these access/locational attributes.


Executive summary

Rare Walkable Light Rail AccessScala has walkable access to the Orchard Light Rail Station; less than 5% of suburban Denver properties enjoy this benefit. Office assets with walkable access to light rail stations experience increased occupancy levels, stronger retention ratios, and the ability to increase rents. Orchard Station operates as part of the E, F and R lines and is one of the most popular stops in Denver. The station features a public art installation of stamped concrete illustrating magnified apple leaves and stainless steel birds entitled Orchard Memory. As light rail ridership continues to grow; so will the value of being next to an active light rail stop and the accessibility it provides for tenants and their employees. It can’t be over-emphasized how walkable access to the Orchard Light Rail Station will increase Scala’s leasing activity, tenant retention, occupancy levels, and ability to increase lease rates.


Executive summary

Demographics

83

470

85

225

25

Evans Ave.

Broa

dway

Yose

mite

St.

Univ

ersit

yBl

vd.

Col

orad

o B

lvd.

Jewell

Tow

er

Rd

Hav

ana

Dayt

on

DTC

Blw

d.

St.

Arapahoe Rd.

Dry Creek Rd.

Jordan

Smoky Hill Rd.

Rd.

Belleview Ave.

Ave.

Mineral

Littleton Blvd

Orchard Rd. Orchard Rd.Ave

Mineral Ave.

Hampden Hampden Ave

Quincy Ave. Quincy Ave.

Hampden Ave Colo

rado

Blvd

.

Centennial Airport

Littleton

Englewood

Parker

AuroraParker Rd.

Highlands Ranch

Centennial

County Line Rd.

5 Mile

3 Mile1 M

ile


DENVER TECH CENTER

JLL | 11

Demographics

8,948

4,5072017 Number of

Households

2017 totalpopulation$112,541

Avg. HH income

2017-2022population

growth

8.6%

HH incomemore than $100K

41.1% 9,792

1 M

ile

5 M

ile

95,399

41,3742017 Number of

Households

2017 totalpopulation

2017-2022population

growth

7.0%


46% 102,664

3 M

ile

$128,908Avg. HH income 266,713

115,5392017 Number of

Households


2017-2022population

growth

7.8%


38.3% 286,136

$110,181Avg. HH income

8,948

4,5072017 Number of

Households


Avg. HH income

2017-2022population

growth

8.6%


41.1% 9,792

1 M

ile

5 M

ile

95,399


Households


2017-2022population

growth

7.0%


46% 102,664

3 M

ile

$128,908Avg. HH income 266,713

115,5392017 Number of

Households


2017-2022population

growth

7.8%


38.3% 286,136


8,948

4,5072017 Number of

Households


Avg. HH income

2017-2022population

growth

8.6%


41.1% 9,792

1 M

ile

5 M

ile

95,399


Households


2017-2022population

growth

7.0%


46% 102,664

3 M

ile

$128,908Avg. HH income 266,713

115,5392017 Number of

Households


2017-2022population

growth

7.8%


38.3% 286,136



DEMOGRAPHICS

Located in the heart of Denver’s Southeast Suburban submarket, Scala benefits from its central and convenient location. Immediately west of the Property sit some of Denver’s most sought after neighborhoods including Greenwood Village and Cherry Hills. In addition to this premier executive housing, an abundance of employee housing is nearby, providing a broad and conveniently located labor pool. The demographics are extremely strong, showcased by an average household income of nearly $130,000 within three miles; one of the strongest averages in Denver.

1 Mile2017-2022

Projected Growth

8.6%

3 Mile2017-2022

Projected Growth

7.0%

5 Mile2017-2022

Projected Growth

7.8%


Executive summary


Significant Upside Potential Due to Below Market RentsThe lack of small/medium size tenant Class A space and new construction in the SES submarket is applying dramatic upward pressure on rental rates of repositioned properties. New construction rents are approaching $40 PSF Gross. Repositioned Class A SES assets that cater to tenants under 20,000 SF are leasing at $24-$28 PSF Gross; a significant spread. There is a lack of repositioned SES assets that tenants can consider to occupy if they want state of the art space with on-site amenities; hence Scala is unique. The current weighted average in-place lease rate at Scala is $23.14 per square foot Gross, significantly below the Q2 2018 average asking rent within the Southeast market of $26.77 per square foot or the most recent executed leases at Scala at $25 per square foot. This lease rate gap, combined with the upward pressure on lease rates and the positive trends for repositioned assets in the Southeast submarket have Scala poised to experience continued upward pressure in rents. The asset is well positioned for upside potential and durable cash flows.

Discount to Replacement CostScala has been recently renovated and will trade at a significant discount to replacement cost. The cost to replace this asset would exceed $300 per square foot. The rising construction cost environment makes for an extremely difficult market for new development. Two Belleview is under construction at an estimated cost of $385 per square foot with average rates of $26.00-$28.00 triple net or $38.00-$40.00 full service gross. Scala is a tremendous opportunity to acquire a renovated class A asset at a deep discount to the cost of new development, and offers tenants a Class A office environment at a 35% discount in lease rates.

JLL | 13


Offering Terms

Scala is being offered at $14,650,000 ($153 PSF) and free and clear of debt. All

prospective buyers are encouraged to present their best offer based on the “as-

is, where–is” condition of the property. In addition to this offering memorandum,

detailed financial analysis, including ARGUS®, is available upon request.



Greenwood Plaza BlvdE Orchard Rd

S Quebec St

Greenwood Plaza Blvd

To Orchard StationLight Rail

To ExecutiveHousingTo C-470

To I-25

To Landmark Amenities

PropertyProperty Overview

To Landmark Amenities


Property overview

JLL | 17


The PropertyBuilding Systems

Pneumatics VAV boxes230 tons centrifugal chiller2 natural gas boilers

ElectricalTwo main disconnect switches of 800 amps EA 480 v/2774 wires (3 phase)

Elevator Two hydraulic elevators (2,500 lbs each) accessible via the main lobby

Life/Safety4020 fire alarm control panel (simplex)Wet pipe sprinkler system

BUILDING SYSTEMS

Originally built in 1974, current Ownership has used the time since acquiring the Property to implement upgrades to both the interior and exterior of the building.

Exterior Walls / Structure

Steel frameCement board panels on exterior walls

RoofTop roof; modified, 4th floor patio EPDM membrane / ballasted 3rd floor patio pre-cast concrete

Windows Double pane tinted

Common Area Finishes

Commercial grade tile and commercial grade carpeting over concrete. Walls are textured and painted sheetrock. Standard fluorescent and recessed incandescent lighting

CONSTRUCTION

Electricity Xcel Energy

Natural Gas Xcel Energy

Water / Sewer Southgate District

UTILITIES


Property overview

Common Floor Plans

1ST FLOOR 2ND FLOOR

3RD FLOOR 4TH FLOOR

Vacant 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Bright HorizonsSuite 100 | 21,510 SF Exp. 2027

Nexus TechnologiesSuite 210 | 16,325 SFExp. 2024

Avid CenterSuite 210 | 5,149 SF Exp. 2023

Raymond James Suite 225 | 3,388 SF Exp. 2024

Denver Tech DermatologySuite 250 | 2,796 SFExp. 2028

It's Never 2 LateSuite 320 | 8,361 SF Exp. 2023

VacantSuite 310 | 7,959 SF

Hearing CareSuite 300 | 8,702 SF Exp. 2024

320 SycamoreSuite 305 | 1,631 SFExp. 2023

Financially SpeakingSuite 400 | 3,491 SFExp. 2021

iSqFtSuite 422 | 4,909 SFExp. 2023

Epilepsy FoundationSuite 404 | 2,913 SFExp. 2023

True RealtySuite 402 | 2,141 SFExp. 2023

Software GlobalSuite 401 | 1,817 SFExp. 2020

JLL | 19


iSqFtSuite 422 | 4,909 SFExp. 2023

Epilepsy FoundationSuite 404 | 2,913 SFExp. 2023

Site Plan


E Orchard Rd

Greenwood Plaza Blvd


Property overview

Stacking Plan

Vacant

FLOOR 1

FLOOR 2

FLOOR 3

FLOOR 4

2019 2020 2021 2022 2023 2024 2025 2026 2027

EXP.

2028

Bright HorizonsSuite 100 | 21,510 SF

Exp. 2027

Nexus Technologies Suite 210 | 16,325 SF

Exp. 2024

Avid CenterSuite 210 | 5,149 SF

Exp. 2021

Raymond JamesSuite 225 | 3,388 SF

Exp. 2024

Denver TechDermatology

Suite 250 | 2,796 SFExp. 2028

It's Never 2 LateSuite 320 | 8,361 SF

Exp. 2023

VacantSuite 310 | 7,959 SF

Hearing CareSuite 300 | 8,702 SF

Exp. 2024

320 SycamoreSuite 305 1,631 SF

Exp. 2023

Financially SpeakingSuite 400 | 3,491 SF

Exp. 2021

Q Software GlobalSuite 401 | 1,817 SF

Exp. 2020

True RealtySuite 402 | 2,141 SF

Exp. 2023

Epilepsy FoundationSuite 404 | 2,913 SF

Exp. 2023

iSqFtSuite 422 | 4,909 SF

Exp. 2023

FitnessSuite: FIT | 4,138 SF

LocationLocation Overview


Location overview

Executive Housing

E. Orchard Rd.

DTC Blvd.

S. Quebec St.

DENVER TECH CENTER

DTC Pkwy.

N

Executive Housing

E. Orchard Rd.

One Belleview Belleview Promenade

Village Plaza

ORCHARD STATION

BELLEVIEWSTATION

Grand Cru

The Village Shops At The Landmark


JLL | 23


The LocationScala is located in the City of Greenwood Village in Denver’s Southeast region. The Southeast Suburban market, Denver’s largest office market, contains more than 32.1 million SF of office space. The SES submarket is home to the largest concentration of corporate headquarters, including seven Fortune 500 headquarters. With a highly educated workforce, the SES submarket rivals Denver’s CBD as the region’s foremost employment center. Over the last several years, Denver’s southeast region has seen significant growth primarily due to its access to public transportation and Denver’s largest executive housing bases including Cherry Hills, Highlands Ranch, Lone Tree, Castle Pines and RidgeGate. The Southeast Suburban market is home to Denver’s premier office parks including Greenwood Village, the Denver Technological Center (DTC), Meridian International Business Center, and Inverness/Panorama Business Park.

Greenwood PlazaThe Greenwood Plaza Business Park is bordered by East Belleview Avenue to the north, South Quebec Street to the west, East Arapahoe Road to the south, and Interstate 25 (I-25) to the east. This premier business park is situated in the City of Greenwood Village and is home to over 7.9 million square feet of office space. Over the past 10 years, Greenwood Plaza has become the premier office park location within the Southeast Suburban market. The development of the Landmark Residential and Shops transformed Greenwood Plaza by offering an amenity base that does not exist in other

Denver suburban office markets. Greenwood Plaza is conveniently situated in less than 10 minutes walk to the Orchard Light Rail Station. Numerous office developments have been completed in the immediate area surrounding the light rail stations, including hotel, office, and retail. Lastly, due to the increased congestion of Interstate 25, the direct access to Denver’s strongest executive housing base to the west via Belleview and Orchard Roads make this the most desirable business parks in Denver.

Nearby amenities include the 1.5 million SF Park Meadows Mall anchored by Nordstrom’s, Macy’s, and Dillard’s. In addition, Fiddler’s Green Amphitheatre sits at the center of this submarket, a premier outdoor concert and event venue. The surrounding area has abundant executive housing, significant hotel and office developments, golf courses and other recreational amenities. Furthermore, the area is home to Centennial Airport, the nation’s third busiest general aviation executive airport, located just to the east in the Inverness Business Park. The nearby light rail stations allow for convenient access to not only these surrounding amenities, but to the amenities throughout the entire metro area including Denver’s CBD and Denver International Airport.

61%of population with a bachelor’s degree or higher within 3 miles

7 Fortune 500 Companies within 3 miles

#1 Largest Submarket in

Metro Denver

$129,000 Average Household

income within 3 miles

Denver’s Southeast Suburban Submarket

DTC Pkwy.


Location overview

Denver’s Southeast Suburban SubmarketDenver Technological CenterThe Denver Technological Center (DTC) features 14 million square feet of development including 9.4 million square feet of office space and 4 hotels spread across 900 acres and is home to international corporations such as Re/Max, Invesco, Great-West Life & Annuity, URS and Jackson National Life. With a myriad of retail amenities including Marina Square and the Belleview Promenade as well as hotels by Hyatt, Marriott, Hilton and AmeriSuites, the Denver Tech Center is among the most successful office park developments in the nation.

Served by two light rail stations, Belleview Station and Orchard Station, and located at the confluence of Interstates 25 and 225, the Denver Tech Center is accessible to 60% of metro Denver’s labor force. Below lists some of the notable companies in the DTC, 20 of which are Fortune 500 companies.

Village Shops at The LandmarkThe Village Shops at The Landmark is a $500 million mixed-use development located at South Quebec Street and Berry Avenue next to I-25, within walking distance to Scala. The Landmark, fully completed in 2009, consists of 175,000 SF of luxury retail space, and 250 residential condos in two 15-story towers. The Landmark offers the best in specialty retail shopping, fine dining, fitness, beauty and entertainment including a 14 screen theatre. Restaurants at The Landmark include: Hapa Sushi, Jing, Bad Daddy’s Burger Bar, Lucy Restaurant, Pizza Republica, Slattery’s Irish Pub, Ted’s Montana Grill, Yanni’s Greek Tavern, The Palate Food & Wine and Early Bird Restaurant. Additionally, The Landmark has a number of retailers and shops including: Landmark Theaters, Comedy Works, Cyclebar, Upstairs Circus and Scissors & Scotch.

Denver Technological Center

JLL | 25

Denver’s Southeast Suburban SubmarketBelleview Promenade Shopping CenterScala is within 2 miles of the Belleview Promenade Shopping Center. The shopping center offers multiple restaurants and retailers including: Starbucks, Chipotle, Bar Louie, Il Fornaio, Larkburger, Bara Sushi, Noodles & Company, Firehouse Subs and the Original Pancake House. A few of the retailers include Homer Reed Ltd, Key Bank, Refresh Beauty Bar, TD Ameritrade and Jos. A. Bank.

Greenwood Athletic ClubLocated half a mile from Scala, Greenwood Athletic and Tennis Club provides a truly unique fitness experience. This expansive 153,000 square foot athletic and tennis club is Denver’s premiere full service health club offering over 125 group exercise classes per week including Spinning, BodyPump and BodyStep, Pilates mat, Thermal Yoga and many other classes. With gorgeous mountain views and a friendly, caring staff, Greenwood Athletic and Tennis Club is a great addition to the amenities located around Scala.

Colorado Athletic ClubColorado Athletic Club is one of the most prestigious health facilities in the metro Denver area. The club is known for a membership base of business executives coming before, during and after the work day. With eight locations throughout Denver, Colorado Athletic Club attracts a plethora of people from all over Colorado. They offer the latest in group fitness programming with an array of time schedules so everyone has the chance to make their favorite classes. Colorado Athletic Club-DTC also hosts many networking events and social opportunities, making it one of the most popular locations.

Westlands ParkWestlands Park has been featured in Landscape Architecture Magazine, Denver Post, and was most recently honored with the “Top of the Rocky Top Playground,” awarded by the Rocky Mountain News for the third year in a row. Located just across the street from Scala the 25 acre park features a playground, ball fields, an in-line hockey rink, trails & a pavilion. There are two large climbing structures which satisfy both the technical climber as well as the inexperienced child. In addition to the main play area, there are three multi-use playing fields, an in-line hockey rink, a natural water sculpture, a pond and a hike / bike trail.

Denver Technological Center

Westlands Park


Location overview

Southeast Suburban Major Employers

Fortune 500 & 1,000 Companies

4,540 Employees

2,210 Employees 1,300 Employees

3,830 Employees

1,930 Employees

3,500 Employees 2,830 Employees

1,650 Employees

2,680 Employees

1,510 Employees

Quincy Ave

S Un

ivers

ity B

lvd

Arapahoe Rd

Dry Creek Rd

County Line Rd

Lincoln Ave

S Parker Rd

Orchard Rd

Smoky Hill Rd

470

225

25

478

Liberty Interac�ve 65,000 SF

Western Union Company246,600 SF*

Arrow Electronics 172,000 SF*

Newmont Mining353,000 SF*

Dish Network731,000 SF*

*These companies have multiple locations in Colorado

Liberty Media65,000 SF

118

186

269

328

478

Envision Healthcare Holdings157,000 SF

538

CH2M Hill447,000 SF*

494

491

Echo Star65,000 SF*

719

MDC Holdings144,000 SF*

857

Fortune Ranking

Centennial Airport

491

719

857

186

269

494

118

328538


JLL | 27

RTD FastracksAverage weekday ridership projections

Year 2018 Projection

Year 2020 Projection

Total Ridership

35,000

38,000

13,218,500

Best in Nation Mass Transit System


New Development:

© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

Recently completed1,826,660 s.f.89% leased

Under construction235,000 s.f.21% leased

2

35

6

7

8

Map # Building Address Size (SF) Completion date

Percent leased

Granite Place at Village Center 6165 S. Willow Dr. 299,568 2017 100%

86 Inverness 86 Inverness Pl. N. 36,390 2017 100%

One Belleview Station 7001 E. Belleview Ave. 318,000 2017 100%

Arrow Building 9151 E. Panorama Cir. 227,000 2017 100%

INOVA Dry Creek 1 7250 S. Havana St. 211,675 2017 100%

169 Inverness 169 Inverness Dr. W. 115,859 2017 0%

INOVA Dry Creek 2 10825 E. Geddes Ave. 222,070 2018 64%

Village Center Station II 6370 S. Fiddlers Green Cir. 324,098 2018 100%

One DTC West 4949 Niagara St. 72,000 2018 95%

50 FIFTY DTC 5050 S. Syracuse St. 185,000 2018 0%

Encompass, Building 6 6 S. Blackhawk St. 50,000 2018 100%

23456789

12

114

10

9

10

1211

225

25

25

470470

13 Two Belleview 6900 Layton Ave 381,742 2019 39%

13

1 Co-Bank 274,287 2015 100%6340 S Fiddlers Green Cir

1

Location overview


DENVER TECH CENTER

MarketMarket Summary


Market overview

JLL | 31


The MarketDenver Metro Market Within hours of many mountain destinations such as Aspen, Vail, and Breckenridge, the Denver metropolitan area’s central geography has played as much a role in its success as an international resort destination as it has the metro area’s economic success. Denver’s mild climate (over 300 days per year of sunshine), excellent schools, highly educated population, and limitless outdoor activities have all helped this major metropolitan area rank among the best places to live and best places for business in America. Located within a two-hour flight of more than two thirds of U.S. cities, and a four-hour flight of every city in North America with a population of one million or more, Denver has become an international transportation and commercial hub.

The Denver metropolitan area’s strong underlying fundamentals and diverse economy are attractive to the strongest and fastest growing industries: IT/software, aerospace, bioscience, telecommunications, financial services and health care. Metro Denver’s population surpassed 3 million in 2015 and is continually ranked as one of the fastest growing areas in the nation.

Historically, major infrastructure projects including the $7.8B light rail expansion at Denver International Airport (DIA), Coors Field, Invesco Field at Mile High, Pepsi Center, and the Union Station redevelopment have helped Denver remain a top tier market for investment. Notable pushes into the Denver market by companies such as Charter Communications, CoBank, Charles Schwab, Kaiser Permanente, Comcast, Arrow Electronics, Nationwide Insurance, Lockheed Martin, and Ardent Mills are evidence of corporate America’s confidence in the Denver metropolitan area’s ability to attract a diverse, highly educated employment base.

City for job seekers Best places to live

Best city for business and careers City for young entrepreneurs

City for up & coming tech jobs

#2 #2#4 #5#4

- Nerdwallet, 2017 - US News & World Report, 2017

- Forbes, 2017 - Forbes, 2017 - Glassdoor, 2017

#1 Best economy states - USA Today, 2018


Market overview

SOURCE: JLL RESEARCH, 2Q 2018

Southeast Suburban Submarket Overview

Class Inventory (s.f.)Total net

absorption (s.f.)

YTD total net absorption

(s.f.)

YTD total net absorption (%

of stock)Direct vacancy

(%)Total vacancy

(%)Average direct asking rent ($

p.s.f.)

YTD completions

(s.f.)

Under construction

(s.f.)

Meridian Totals 2,242,549 146,030 173,771 7.7% 7.3% 15.1% $24.49 0 0

Parkridge / Lone Tree Totals 1,180,885 1,341 -31,577 -2.7% 4.6% 4.6% $27.77 0 0

Inverness Totals 3,923,461 160,693 192,118 4.9% 24.7% 25.7% $27.14 222,083 0

Panorama, Highlands, Southgate Totals 2,940,083 -75,643 -79,975 -2.7% 5.4% 7.4% $25.35 0 0

Rampart Totals 1,340,967 -47,509 -34,203 -2.6% 26.1% 26.1% $20.46 0 0

South Tech Center Totals 4,442,135 -16,855 -39,417 -0.9% 13.3% 14.4% $25.80 0 0

North Tech Center Totals 5,382,659 104,354 28,784 0.5% 19.3% 22.2% $27.85 0 257,000

Greenwood Plaza Totals 7,921,564 294,180 297,481 3.8% 10.9% 12.4% $28.29 306,000 0

Arapahoe Road Totals 282,891 -10,064 -26,547 -9.4% 14.8% 15.5% $24.33 0 0

Highlands Ranch Totals 1,458,020 -7,113 -2,152 -0.1% 5.4% 10.2% $31.11 0 0

Centennial Totals 1,042,133 8,070 12,397 1.2% 3.1% 3.1% $17.97 0 50,000

Southeast Suburban Totals Totals 32,157,347 557,484 490,680 1.5% 13.5% 15.6% $26.77 528,083 307,000

Orchard Station Light Rail Village Shops at the Landmark

JLL | 33

SUBMARKET Invetory (SF)Total net

absorption (SF)


(SF)


of stock)Direct Vacancy Total vacancy

(%)Average direct

asking rent ($PSF)

YTD Completions

Under Development

(SF)

LoDo 6,025,271 64,776 -28,994 -0.5% 7.9% 9.6% $45.60 0 523,219

Midtown CBD 10,833,107 -53,515 -27,692 -0.3% 15.3% 16.1% $32.20 0 601,752

Uptown / East Side 5,009,794 84,392 114,782 2.3% 13.7% 14.0% $31.71 0 0

West CBD 7,854,579 92,793 263,842 3.4% 18.0% 20.1% $39.19 670,000 111,416

CBD 29,722,751 188,446 321,938 1.1% 14.2% 15.5% $36.82 670,000 1,236,387

Boulder 6,275,112 -31,176 14,106 0.2% 10.1% 12.0% $34.61 83,000 49,293

Midtown Suburbs 4,602,111 111,302 206,925 4.5% 21.2% 22.0% $40.54 814,934 512,803

North I-25 2,452,294 -106,989 -22,976 -0.9% 22.8% 23.2% $19.98 0 0

Northeast 1,300,674 -12,148 34,739 2.7% 14.7% 15.3% $20.25 0 0

Northwest 8,374,374 -1,047 61,597 0.7% 12.5% 14.0% $27.67 176,588 100,000

SE 17,072,284 117,053 101,629 0.6% 11.4% 11.9% $25.40 111,844 145,000

Southeast Suburban 32,157,347 557,484 490,680 1.5% 13.5% 15.6% $26.77 528,083 307,000

Southwest Suburban 3,779,659 -31,610 56,146 1.5% 14.8% 15.1% $17.55 0 0

West Suburbs 7,466,449 51,718 -13,597 -0.6% 15.5% 16.1% $22.83 0 0

Suburbs 83,480,304 654,587 929,249 1.1% 13.7% 15.0% $27.03 1,714,449 1,114,096

Denver 113,203,055 843,033 1,251,187 1.1% 13.8% 15.1% $29.63 2,384,449 2,350,483

SOURCE: JLL RESEARCH, 2Q 2018

Denver Metro Market Overview

Class Inventory (s.f.)Total net

absorption (s.f.)


(s.f.)


of stock)Direct vacancy

(%)Total vacancy

(%)Average direct asking rent ($

p.s.f.)

YTD completions

(s.f.)

Under construction

(s.f.)

Meridian Totals 2,242,549 146,030 173,771 7.7% 7.3% 15.1% $24.49 0 0

Parkridge / Lone Tree Totals 1,180,885 1,341 -31,577 -2.7% 4.6% 4.6% $27.77 0 0

Inverness Totals 3,923,461 160,693 192,118 4.9% 24.7% 25.7% $27.14 222,083 0

Panorama, Highlands, Southgate Totals 2,940,083 -75,643 -79,975 -2.7% 5.4% 7.4% $25.35 0 0

Rampart Totals 1,340,967 -47,509 -34,203 -2.6% 26.1% 26.1% $20.46 0 0

South Tech Center Totals 4,442,135 -16,855 -39,417 -0.9% 13.3% 14.4% $25.80 0 0

North Tech Center Totals 5,382,659 104,354 28,784 0.5% 19.3% 22.2% $27.85 0 257,000

Greenwood Plaza Totals 7,921,564 294,180 297,481 3.8% 10.9% 12.4% $28.29 306,000 0

Arapahoe Road Totals 282,891 -10,064 -26,547 -9.4% 14.8% 15.5% $24.33 0 0

Highlands Ranch Totals 1,458,020 -7,113 -2,152 -0.1% 5.4% 10.2% $31.11 0 0

Centennial Totals 1,042,133 8,070 12,397 1.2% 3.1% 3.1% $17.97 0 50,000

Southeast Suburban Totals Totals 32,157,347 557,484 490,680 1.5% 13.5% 15.6% $26.77 528,083 307,000

113,203,055 SF TOTAL INVENTORY

1,251,187 SF YTD NET ABSORPTION

$29.63DIRECT AVERAGE

ASKING RENT (PSF)

13.8%DIRECT VACANCY


Market overview

Denver Metro Economy

CORPORATE EXPANSIONS AND RELOCATIONS TO DENVER METRO

Additional Denver relocations, expansions, and new offices: Dish Network HomeAdvisor Transamerica Corp. Libery Global Charles Schwab MicroStar Logistics Prologis Zayo Group

DOWNTOWN DENVER IS ATTRACTING CORPORATE EXPANSIONS AND RELOCATIONS

Significant expansions have also beenannounced by existing Denvercompanies, including: Comcast DaVita KPMG TIAA

Layer3 TVUK

Spencer Ogden WorldRemit

x2

Five StarsGranicusGustoJobAdder.comPensco Trust Co.PipelineRxSunrun

x7

Kirpatrick Bank

Poetic Systems

Microgird Energy World Wide Technology Inc.

Remote-Learner

United Wind Warren Resources

x2

x2

Total investment in downtown Denver through developments under

construction and planned

$2.5 BILLION Companies relocated to / expanded in downtown Denver over past 24 months 24

Employment growth in downtown Denver since 201013.2%

JLL | 35

OUTPACING NATIONAL RECOVERY JOB GROWTH IN KEY INDUSTRIES

2.8%Metro Denver unemployment rate

2.4%Metro Denver 12 - month job growth

3.0%Colorado unemployment rate

2.4%Colorado 12-month job growth

3.9%U.S. unemployment rate

1.6%U.S. 12-month job growth

May 2018

WHO IS CREATING JOBS IN DENVER | APRIL 2018

SOURCE: JLL RESEARCH EMPLOYMENT UPDATE - MAY 2018

SOURCE: JLL RESEARCH | UPDATE - FEBRUARY 2018 | EMPLOYMENT GROWTH 2016-2017

Number of jobs: 1,538 Number of jobs: 986Number of jobs: 1,470

Number of jobs: 835

Number of jobs: 1,555

Number of jobs: 908

Number of jobs: 1,607

Number of jobs: 818


EDUCATION & HEALTH SERVICES

2.07%GOVERNMENT

-0.41%FINANCIAL SERVICES

0.84%2.02%PROFESSIONAL &

BUSINESS SERVICESLEISURE &

HOSPITALITY

5.76%MINING, LOGGING &

CONSTRUCTION

4.37%TRADE &

TRANSPORTATION

1.72%

EDUCATION & HEALTH SERVICES

2.07%GOVERNMENT

-0.41%FINANCIAL SERVICES

0.84%2.02%PROFESSIONAL &

BUSINESS SERVICESLEISURE &

HOSPITALITY

5.76%MINING, LOGGING &

CONSTRUCTION

4.37%TRADE &

TRANSPORTATION

1.72%

SOURCE: DENVER BUSINESS JOURNAL

Number of jobs: 640Number of jobs: 730


Market overview


DIVERSIFIED ECONOMY

TELECOMMUNICATIONS

As of January 2018

NREL / U.S. Government, GE Energy, Anadarko Petroleum, Encana, Vestas, Noble Energy, Halliburton, Schlumberger and MarkWest Energy

50,000Over employed in

Metro Denver

ENERGY

Davita, Centura Health, Healthgrades, Kaiser Permanente, Catholic Health Initiatives, Mckesson and Exempla Healthcare

180,00018,000+

Over

employed

companies

HEALTHCARE

Oracle, IBM, AVNET, CIBER Inc., Rally Software & Zayo Group

2 in the Nationnd

TECH/IT

Wells Fargo, Charles Schwab, Keybank, Visa, US Bank, CoBank, First Data, Western Union, Morgan Stanley, Janus Capital, TIAA-CREF, CNA

90,20013,500+

Over employed

companies FINANCE The 5th busiest airport in the

country and the 10th worldwide

170,000Nearly

employed

AVIATION

DISH Network, DIRECTV, Comcast, CenturyLink, Clear Channel Communications and Liberty Media

real-time connections to six of seven continents

20,000400+

Over

employed

companies

AEROSPACEBall Aerospace, Boeing, ITT Exelis, Lockheed Martin, Northrop Grumman, Sierra Nevada Corporation, Raytheon and United Launch Alliance

BIOSCIENCE

15,000570

Over

employed

bioscience companies Pryor Medical Devices, ClearSight, Arca Biopharma, MBC Pharma, Compass Biotechnology, ArcherDx, Lohocla Research

$

JLL | 37


HOUSING MARKETDenver was recently declared the hottest home-buying market in the country. The median price of a home nationwide is $195,700 wher eas the median price of a home in metro Denver is $389,900 as of January 2018. Denver home values have gone up 6.3% over the past year and Zillow predicts they will rise 3.2% within the next year. Much of the housing recovery has been fueled by Denver’s healthy net migration of Millennials: the central business district’s resident population has exploded by 86% since 2000. Fueled by an expanding and well educated workforce the Denver housing market is thriving and creating upward pressure in the city’s epicenter, the central business district’s LoDo.

INVESTMENT IN MAJOR INFRASTRUCTUREDenver’s history of, and commitment to, major infrastructure investment is a major reason there is a mandate to place capital in Denver for higher yields than gateway markets. Over the past few decades improvements include, but are not limited to the development of Denver International Airport (DIA) in 1992, three major sports venues, the redevelopment of Interstate 25 (I-25), FasTracks (Colorado’s $7.8B light rail), and the redevelopment of Union Station, which was the largest multi-model development in the world during 2014. Union Station has become a bustling destination due to its $1.5B of public and private investment in 1.5M square feet of office space, 250K square feet of retail, and 7,000 apartment units.

CIVIC CENTER STATION

DENVER INTERNATIONAL AIRPORT

UNION STATION

ANSCHUTZ MEDICAL CAMPUS

Anschutz Medical Campus 2008 $236M

Children’s Hospital 2007 $300M

Convention Center Expansion 2004 $340M

PUBLIC

ENTERTAINMENT

Dick’s Sporting Goods Park 2007 $131M Sports Authority Field At Mile High 2001 $401MPepsi Center 1999 $187M Coors Field 1995 $215M

Union Station / Fastracks Ongoing $7.8BTransportation Expansion 2006 $1.7BDenver International Airport 1994 $4.8BCivic Center Station Ongoing $17M

TRANSPORTATION

MAJOR CIVIC INVESTMENTS IN METRO DENVER


Market overview

22.4%682,545

Employment growth since 2010

Population in 2016

Total miles of rail connected to downtown Denver

88

$2.5 billionTotal investment in downtown Denver through developments under construction and planned

24 Companies relocated to or expanded in Denver over past 24 months

DENVERColorado

JLL | 39

Recent Sales Comparables

SALE DATE BUILDING ADDRESS SALE PRICE PRICE PSF OCCUPANCY CAP RATE SIZE (SF) SELLER/BUYER

Mar-15 High Pointe Tower I

6430 Fiddlers Green Circle $22,200,000 $185 87% 5.85% 120,014 Morrison Street Capital

Granite Properties

Feb-16 Landmark Centre Landmark Centre $13,600,000 $178 100% 7.35% 76,084Velocis Partners KDI Investments

Mar-16 Syracuse Hill I Syracuse Hill I $10,050,000 $122 97% 7.75% 82,365Triton Properties

Melcor Developments

Apr-16 61 Inverness 61 Inverness $10,900,000 $125 100% 7.50% 87,199United Properties KDI Investments

Sep-16 Greenwood Place Greenwood Place $11,150,000 $154 100% 7.50% 72,043Ogilvie Properties

Paradigm Capital Ventures

Oct-16 Lincoln Station 9360 & 9400 Station Street $13,525,000 $232 92% 6.35% 53,993 Westfield Company

Wells Fargo Wealth Management

Feb-18 Orchard Pointe Orchard Pointe $16,550,000 $147 91% 7.50% 113,000TA Associates Realty

Cress Capital

Mar-18 One Lincoln Station 9390 Station Street $43,750,000 $297 100% 6.20% 147,184 Spectrum Properties

Bradbury Properties Company

May-18Quebec

Corporate PlazaQuebec Corporate

Plaza$18,000,000 $110 95% 7.00% 162,372

Griffis Blessing Miller Real Estate Investments

May-18 Greenwood Plaza Greenwood Plaza $10,000,000 $143 90% 7.90% 70,000The Dana Group

Focus Property Group


Recent Lease Comparables

HARLEQUIN PLAZA TRIAD ATORCHARD STATION

7100 BELLEVIEW DENVER CORPORATE CENTER II & III

Size (SF): 65,972

Year Built: 1981

Asking Rent (FSG): $23.50 - $24.50

Occupancy: 94%

Major Tenant: Dex One Corporation

Size (SF): 136,009

Year Built: 1971

Asking Rent (FSG): $24.00 - $25.50

Occupancy: 87%

Major Tenant: Ameriteach-UCI, Inc.

Size (SF): 164,071

Year Built: 1981

Asking Rent (FSG): $19.00 - $25.50

Occupancy: 88%

Major Tenants:Comtech Telecommuications Corp

Size (SF): 380,523

Year Built: 1982

Asking Rent (SF): $26.00 - $28.00

Occupancy: 64%

Major Tenants: Reynolds, Smith & Hills, Inc.

Market overview

FinancialsFinancial Overview

JLL | 43

The FinancialsASSET SUMMARY

Property Name Scala

Property Address 5889 Greenwood Plaza Blvd, Greenwood Village , CO

Year Built / Renovated: 1974 / 2016

Size (sf): 95,230

Site (acres): 7.70 acres

Purchase Price ($PSF): $14,650,000 ($153)

Cap Rate: 7.00%

Occupancy: 92%

Number of tenants: 13

In-Place rental rates ($ psf FSG) $23.14

Market rental rates ($ psf FSG): $25.00

Parking Ratio: 3.70 / 1,000 sf (327 surface spaces)

Weighted Average Lease Term (WALT): 5.9 Years

In-place NOI: $1,026,781


Financial overview

Assumptions

Project: Scala

Property Size: 95,230 sf

Reporting Start Date: 1/1/2019

Analysis Period: 11 Years

Lease Type (speculative): Office - Base Stop

Lease Terms (speculative): 5 Years

Capital Reserves: $0.15 PSF

Tenant Retention Ratio: 75% Renew, 25% Vacate

Lag Vacancy: 6 Months

General Vacancy: 5.0%, less absorption & lag vacancy

Management Fee: 3.5% of EGR

Rent Abatement: 3 Months New3 Months Renewal

Rent Increases: $0.50 annual increases

Growth Rates: CPI: 3.0%Expenses: 3.0%Other Income: 3.0%

Inflation: Inflation and reimbursements are calculated on a calendar year basis

Additional Notes: Free rent is not included in the analysis, buyers will be credited on executed leases at closing Analysis assumes UPS Drop Box continues throughout the analysis at a flat rate

JLL | 45


AssumptionsVACANT SPACE LEASE UPSUITE SIZE LEASE DATE TERM RENTAL RATE TI ALLOWANCE LC ALLOWANCE 310 7,959 5/1/2019 5 Years $25.00 $30.00 $7.50

Total / Avg 7,959 $25.00 $30.00 $7.50

YEAR NEW LEASE RENEWAL LEASE BLENDEDYear 1 $30.00 $15.00 $18.75

Year 2 $30.00 $15.00 $18.75

Year 3 $30.00 $15.00 $18.75

Thereafter Held Flat Held Flat Held Flat

TENANT IMPROVEMENTSYEAR NEW LEASE RENEWAL LEASE BLENDEDYear 1 $7.50 $5.00 $5.63

Year 2 $7.50 $5.00 $5.63

Year 3 $7.50 $5.00 $5.63

Thereafter Held Flat Held Flat Held Flat

LEASING COMMISSIONS

YEAR OFFICE (GROSS) ANNUAL INFLATIONYear 1 $25.00 0.00%

Year 2 $25.75 3.00%

Year 3 $26.52 3.00%

Year 4 $27.32 3.00%

Year 5 $28.14 3.00%

Year 6 $28.98 3.00%

Year 7 $29.85 3.00%

Rents are inflated at 3.0% annually after Year 7

MARKET RENTAL RATES


Financial overview

TAX YEAR ANNUAL VALUE ASSESSED VALUE MILL LEVY TAXES PAID2017 Taxes Paid 2018$ PSF

$8,750,000$91.88 PSF

$2,537,500$26.65 PSF

91.061 $231,067$2.43 PSF

2018 Taxes Paid 2019$ PSF

$8,750,000$91.88 PSF

$2,537,500$26.65 PSF

92.882 $235,689$2.47 PSF

2019 Taxes Paid 2020$ PSF

$12,376,000$129.96 PSF

$3,589,040$37.69 PSF

94.740 $340,025$3.57 PSF

Assumes 2.0% Mill Levy Growth annually

Assumes actual value of $12,376,000 for 2019 taxes paid 2020

Property Tax AnalysisArapahoe County Colorado reassesses in odd numbered years with the actual payment reflected the following year. The appraiser then applies an assessment rate of 29% and that number is then multiplied by the millage rate (currently 91.061) to determine the final tax bill. The sale of an asset does not mandate an immediate reassessment. Please consult a tax professional. Please note that due to tenants having base stops; the majority of any future tax increase will be assumed by the tenants and have minimal impact on future asset NOI.

JLL | 47


Historical Operating Expenses

2015 Actuals 2016 Actuals 2017 Actuals 2018 Assumptions

Utilities $166,150 $1.74 psf $160,173 $1.68 psf $168,704 $1.77 psf $184,859 $1.94 psf

Exterior Building $8,494 $0.09 psf $8,176 $0.09 psf $17,362 $0.18 psf $27,738 $0.29 psf

General R&M $239,761 $2.52 psf $272,367 $2.86 psf $272,063 $2.86 psf $291,819 $3.06 psf

Parking Lot $51,145 $0.54 psf $57,084 $0.60 psf $44,604 $0.47 psf $37,188 $0.39 psf

Landscaping & Grounds $44,069 $0.46 psf $64,540 $0.68 psf $70,008 $0.74 psf $59,605 $0.63 psf

Safety Services $17,172 $0.18 psf $17,929 $0.19 psf $20,766 $0.22 psf $13,113 $0.14 psf

Administrative $15,605 $0.16 psf $26,168 $0.27 psf $28,689 $0.30 psf $24,067 $0.25 psf

Management Fee $50,134 $0.53 psf $53,069 $0.56 psf $47,308 $0.50 psf $65,896 $0.75 psf

Taxes $178,686 $1.88 psf $206,212 $2.17 psf $246,872 $2.59 psf $235,689 $2.47 psf

Insurance $15,062 $0.16 psf $12,053 $0.13 psf $12,642 $0.13 psf $15,072 $0.16 psf

Total $786,277 $8.26 psf $877,771 $9.22 psf $929,017 $9.76 psf $955,046 $10.08 psf

*2015, 2016, 2017 Actuals are based on owners records *2018 Expenses have been projected from Ownership's internal budget information


Financial overview

10 Year Cash Flow

Fiscal Year Ending In-PlaceIncome

Yr. 1 PSF Year 1 Dec-2019

Year 2 Dec-2020

Year 3 Dec-2021

Year 4 Dec-2022

Year 5 Dec-2023

Year 6 Dec-2024

Year 7 Dec-2025

Year 8 Dec-2026

Year 9 Dec-2027

Year 10 Dec-2028

Year 11 Dec-2029

Income:

Base Rental Revenue $1,923,859 $22.29 psf $2,122,834 $2,167,908 $2,216,057 $2,267,061 $2,333,546 $2,433,295 $2,552,736 $2,618,463 $2,754,506 $2,923,350 $3,013,272

Absorption & Turnover Vacancy $0 ($0.70) psf ($66,325) ($7,798) ($38,193) $0 ($82,071) ($145,520) ($52,334) ($13,193) ($145,549) ($97,000) ($182,443)

Base Rent Abatements $0 ($0.52) psf ($49,744) ($7,798) ($15,279) ($46,603) ($99,010) ($203,468) ($104,369) ($13,967) ($238,706) ($121,744) ($161,009)

Total Minimum Rent $1,923,859 $21.07 psf $2,006,765 $2,152,312 $2,162,585 $2,220,458 $2,152,465 $2,084,307 $2,396,033 $2,591,303 $2,370,251 $2,704,606 $2,669,820

Expense Reimbursement Revenue $54,578 $0.62 psf $58,685 $182,864 $202,972 $209,509 $215,880 $175,563 $139,269 $170,996 $135,967 $92,536 $79,453

Parking Revenue $3,090 $0.03 psf $3,090 $3,183 $3,278 $3,377 $3,478 $3,582 $3,690 $3,800 $3,914 $4,032 $4,153

UPS Drop Box $300 $0.00 psf $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Potential Gross Income $1,981,827 $21.72 psf $2,068,840 $2,338,659 $2,369,135 $2,433,644 $2,372,123 $2,263,752 $2,539,292 $2,766,399 $2,510,432 $2,801,474 $2,753,726

General Vacancy: $0 $0.42 psf ($40,433) ($109,525) ($82,173) ($121,682) ($40,639) $0 ($77,247) ($125,787) $0 ($47,924) $0

(Total Vacancy) 0.0% -5.0% -5.0% -5.0% -5.0% -5.0% -6.0% -5.0% -5.0% -5.5% -5.0% -6.2%

Effective Gross Income $1,981,827 $21.30 psf $2,028,407 $2,229,134 $2,286,962 $2,311,962 $2,331,484 $2,263,752 $2,462,045 $2,640,612 $2,510,432 $2,753,550 $2,753,726

Operating Expenses:

Utilities ($184,859) $1.94 psf ($184,859) ($190,405) ($196,117) ($202,001) ($208,061) ($214,303) ($220,732) ($227,354) ($234,174) ($241,199) ($248,435)

Exterior Building ($27,738) $0.29 psf ($27,738) ($28,570) ($29,427) ($30,310) ($31,219) ($32,156) ($33,121) ($34,114) ($35,138) ($36,192) ($37,277)

General R&M ($291,819) $3.06 psf ($291,819) ($300,573) ($309,590) ($318,878) ($328,444) ($338,298) ($348,447) ($358,900) ($369,667) ($380,757) ($392,180)

Parking Lot ($37,188) $0.39 psf ($37,188) ($38,304) ($39,453) ($40,636) ($41,856) ($43,111) ($44,405) ($45,737) ($47,109) ($48,522) ($49,978)

Landscaping & Grounds ($59,605) $0.63 psf ($59,605) ($61,393) ($63,235) ($65,132) ($67,086) ($69,099) ($71,172) ($73,307) ($75,506) ($77,771) ($80,104)

Safety Services ($13,113) $0.14 psf ($13,113) ($13,506) ($13,912) ($14,329) ($14,759) ($15,201) ($15,658) ($16,127) ($16,611) ($17,109) ($17,623)

Administrative ($24,067) $0.25 psf ($24,067) ($24,789) ($25,533) ($26,299) ($27,088) ($27,900) ($28,737) ($29,599) ($30,487) ($31,402) ($32,344)

Management Fee ($65,896) $0.75 psf ($70,994) ($78,020) ($80,044) ($80,919) ($81,602) ($79,231) ($86,172) ($92,421) ($87,865) ($96,374) ($96,380)

Taxes ($235,689) $2.47 psf ($235,689) ($340,025) ($346,825) ($353,762) ($360,837) ($368,054) ($375,415) ($382,923) ($390,582) ($398,393) ($406,361)

Insurance ($15,072) $0.16 psf ($15,072) ($15,524) ($15,990) ($16,470) ($16,964) ($17,473) ($17,997) ($18,537) ($19,093) ($19,666) ($20,255)

Total Expenses ($955,046) $10.08 psf ($960,144) ($1,091,109) ($1,120,126) ($1,148,736) ($1,177,916) ($1,204,826) ($1,241,856) ($1,279,019) ($1,306,232) ($1,347,385) ($1,380,937)

Net Operating Income $1,026,781 $11.22 psf $1,068,263 $1,138,025 $1,166,836 $1,163,226 $1,153,568 $1,058,926 $1,220,189 $1,361,593 $1,204,200 $1,406,165 $1,372,789

Capital Expenditures:

Tenant Alterations ($238,770) ($34,069) ($96,544) ($65,456) ($282,113) ($610,894) ($163,163) ($34,069) ($565,313) ($279,919) ($359,419)

Leasing Commissions ($59,693) ($10,221) ($28,963) ($19,637) ($84,634) ($183,268) ($48,949) ($10,221) ($169,594) ($83,976) ($107,826)

Annual Capital Reserve ($0.15) psf ($14,713) ($15,154) ($15,609) ($16,077) ($16,560) ($17,056) ($17,568) ($18,095) ($18,638) ($19,197) ($19,773)

Total Capital Expenditures ($313,176) ($59,444) ($141,116) ($101,170) ($383,307) ($811,218) ($229,680) ($62,385) ($753,545) ($383,092) ($487,018)

Cash Flow Before Debt $755,087 $1,078,581 $1,025,720 $1,062,056 $770,261 $247,708 $990,509 $1,299,208 $450,655 $1,023,073 $885,771

JLL | 49


Rent Roll

TENANT NAME TYPE & SUITE NUMBER LEASE DATES & TERM

FLOOR SQFT BLDG SHARE

RATE & AMOUNT PER YEAR PER MONTH

CHANGES ON

CHANGESTO

NOTES:

Bright Horizons Children Office, Suite: 100 Aug-2003 to Jul-2027

21,51024.12%

$20.77 $446,763 $1.73 $37,230

Aug-2019 Aug-2020 Aug-2021 Aug-2022 Aug-2023 Aug-2024 Aug-2025 Aug-2026

$21.29 $21.82 $22.37 $22.93 $23.50 $23.75 $24.00 $24.25

2015 Base Year - $9.17

Nexus Technologies Office, Suite: 201 Mar-17-2017 to Aug-2024

16,32517.15%

$22.00 $359,150 $1.83 $29,929

Apr-2019 Oct-2019 Oct-2020 Oct-2021 Oct-2022 Oct-2023

$22.50 $23.00 $23.50 $24.00 $24.50 $25.00

Renewal Option: One (1) option to renew for five (5) years at FMV with notice provided no earlier than 12 months nor later than 9 months Termination Option: TT has right to termination at end of the 66th month (9/22) for a fee ROFO: space exceeding 4,000 SF Parking: 60 non-exclusive surface spaces at no cost 2017 Base Year - $9.65 6% cap on controllable OPEX on a cumulative basis 5% cap on EGR for management fee

Avid Center Office, Suite: 210 Oct-2013 to Sep-2021

5,1495.41%

$25.00 $128,725 $2.08 $10,727

Oct-2019 Oct-2020

$25.50 $26.00

Parking: One reserved space outside the front entrance for $50/mo and 18 non-exclusive surface spaces at no cost 2016 Base Year - $9.44

Raymond James Office, Suite: 225 Jan-2019 to May-2024

3,3883.56%

$25.00 $84,700 $2.08 $7,058

Apr-2020 Apr-2021 Apr-2022 Apr-2023

$25.50 $26.00 $26.50 $27.00

Analysis assumes TT moves in 1/19 for 5 years at $25 with $0.50 annual increases based on most recent LOI provided by Ownership Applicable free rent post-closing will be credited to buyer 2018 Base Year - $10.04

Denver Tech Dermatology Associ Office, Suite: 250 Mar-17-2018 to Mar-2028

2,7962.93%

$24.00 $67,104 $2.00 $5,592

Apr-2019 Apr-2020 Apr-2021 Apr-2022 Apr-2023 Apr-2024 Apr-2025 Apr-2026 Apr-2027

$24.50 $25.00 $25.50 $26.00 $26.50 $27.00 $27.50 $28.00 $28.50

Renewal Option: One (1) option to renew for five (5) years at FMV with notice provided no earlier than 12 months nor later than 9 months Exclusive Use: Medical practice of cosmetic dermatology / cosmetic plastic surgery Parking: Ten non-exclusive surface spaces at no cost 5% cap on controllable OPEX on a cumulative basis 2018 Base Year - $10.04

Hearing Care Office, Suite: 300 Aug-2017 to Dec-2024

8,7019.14%

$23.50 $204,474 $1.96 $17,039

Jan-2019 Jan-2020 Jan-2021 Jan-2022 Jan-2023 Jan-2024

$24.00 $24.50 $25.00 $25.50 $26.00 $26.50

Renewal Option: One (1) option to renew for five (5) years at FMV with notice provided no earlier than 12 months nor later than 9 months Parking: Two reserved spaces and thirty eight non-exclusive spaces at no cost 2017 Base Year - $9.65

320 Sycamore Office, Suite: 305 Dec-2017 to May-2023

1,6311.71%

$24.00 $39,144 $2.00 $3,262

Jun-2019 Jun-2020 Jun-2021 Jun-2022

$24.50 $25.00 $25.50 $26.00

Parking: Six non-exclusive spaces at no cost 2017 Base Year - $9.65


Financial overview

Rent Roll

TENANT NAME TYPE & SUITE NUMBER LEASE DATES & TERM

FLOOR SQFT BLDG SHARE

RATE & AMOUNT PER YEAR PER MONTH

CHANGES ON

CHANGESTO

NOTES:

Vacant Office, Suite: 310

7,9598.36%

It's Never 2 Late Office, Suite: 320 Sept-2018 to May-2023

8,3618.78%

$23.50 $196,484 $1.96 $16,374

Jun-2019 Jun-2020 Jun-2021 Jun-2022

$24.00 $24.50 $25.00 $25.50

Parking: Thirty non-exclusive spaces at no cost 2018 Base Year - $10.04

Financially Speaking, Inc Office, Suite: 400 Mar-2010 to Oct-2021

3,4913.67%

$24.00 $83,784 $2.00 $6,982

Nov-2018 Nov-2019 Nov-2020

$24.50 $25.00 $25.50

Renewal Option: One (1) option to renew for five (5) years at FMV with notice provided no earlier than 10 months nor later than 6 months Parking: Thirteen non-exclusive spaces at no cost 2016 Base Year - $9.44

Q Software Global Ltd. Office, Suite: 401 Jun-2017 to Aug-2020

1,8171.91%

$23.50 $42,700 $1.96 $3,558

Sep-2019 $24.00 Renewal Option: One (1) option to renew for three (3) years at FMV with notice provided no earlier than 12 months nor later than 6 months Parking: Seven non-exclusive spaces at no cost Sublease: Currently subleased to Asir Inc. for 2 years commencing 3/1/18 for $137.52/mo 8% cap on controllable OPEX on a cumulative basis 2017 Base Year - $9.65

True Realty Office, Suite: 402 Dec-28-2016 to May-2023

2,1412.25%

$24.00 $51,384 $2.00 $4,282

May-2019 May-2020 May-2021 May-2022 May-2023

$24.50 $25.00 $25.50 $26.00 $26.50

ROFO: Suite 401 Parking: One reserved space & nine non-exclusive spaces at no cost Exclusive Use: Residential real estate brokerage, applies to the 4th floor only6% cap on controllable OPEX on a cumulative basis2016 Base Year - $9.44

Epilepsy Foundation of CC Office, Suite: 404 Oct-19-2012 to Aug-2023

2,9133.27%

$23.50 $68,456 $1.96 $5,705

Sep-2019 Sep-2020 Sep-2021 Sep-2022

$24.00 $24.50 $25.00 $25.50

Buyer will be credited for any applicable free rent at time of closing Analysis assumes amendment goes into affect 12/1/18 but is subject to change based on when refurbishment completion date is Parking: One reserved space & ten non-exclusive spaces at no cost 2018 Base Year - $10.04

iSqFt Office, Suite: 422 Jul-2018 to Nov-2023

4,9095.15%

$25.00 $122,725 $2.08 $10,227

Dec-2019 Dec-2020 Dec-2021 Dec-2022

$25.50 $26.00 $26.50 $27.00

Parking: 18 non-exclusive spaces at no cost Guarantor: Roper Technologies, Inc. 5% cap on controllable OPEX on a cumulative basis2018 Base Year - $10.04

Fitness Office, Suite: FIT

4,1384.35%

JLL | 51


Lease Expiration ScheduleRent at Expiration vs Market Rent

Tenant Suite Expiration Date

Sq Ft Expiring

Percent Expiring

Cum. Percent Expiring

In Place Rent / SF

Market Rent / SF

Nominal per SF Above or Below

Market

% Above or Below Market

Q Software Global Ltd. 401 8/31/2020 1,817 1.9% 1.9% $24.00 $25.75 ($1.75) -7%

Total for Year Ending Dec-2020 1,817 1.9% 1.9% $24.00 $25.75 ($1.75) -7%

Avid Center 210 9/30/2021 5,149 5.4% 7.3% $26.00 $26.52 ($0.52) -2%

Financially Speaking, Inc 400 10/31/2021 3,491 3.7% 11.0% $25.50 $26.52 ($1.02) -4%


320 Sycamore 305 5/31/2023 1,631 1.7% 12.7% $26.00 $28.14 ($2.14) -8%

It's Never 2 Late 320 5/31/2023 8,361 8.8% 21.5% $25.50 $28.14 ($2.64) -9%

True Realty 402 5/31/2023 2,141 2.2% 23.7% $26.50 $28.14 ($1.64) -6%

Epilepsy Foundation of CC 404 5/31/2023 2,913 3.1% 26.8% $25.50 $28.14 ($2.64) -9%

iSqFt 422 11/30/2023 4,909 5.2% 31.9% $27.00 $28.14 ($1.14) -4%


Raymond James 225 3/31/2024 3,388 3.6% 28.4% $27.00 $28.98 ($1.98) -7%

Nexus Technologies 201 8/30/2024 16,325 17.1% 45.5% $25.00 $28.98 ($3.98) -14%

Hearing Care 300 12/31/2024 8,702 9.1% 54.7% $26.50 $28.98 ($2.48) -9%


Bright Horizons Children 100 7/31/2027 21,510 22.6% 84.4% $24.25 $31.67 ($7.42) -23%


Denver Tech Dermatology Association 250 3/31/2028 2,796 2.9% 87.3% $28.50 $32.62 ($4.12) -13%


Total First Term Expiration 83,133 92%

Fitness Center 4,138

Current Vacancy 7,959 8%

Building Total 95,230 100%

TenantsTenant Overview


Tenant overview

Major Tenant Overview

Type: Public

Headquartered: Watertown, MA

Size (SF): 21,510

Year Founded: 1986

Employees: 31,600 (2018)

Lease Expiration: July 2027

Provides high-quality child care and early education services to help employers and families balance work and life, with service being offered under multi-year contracts to employers that offer child care services. Bright Horizons operates more than 1,000 child care and early educations center around the world as of 2018.

Type: Private

Headquartered: Denver

Size (SF): 16,325

Year Founded: 1996

Employees: 115

Lease Expiration: August 2024

NexusTek specializes in helping more than 1200 small to midsize businesses in the western U.S. by optimizing and managing their IT systems to encourage increased employee productivity. They offer Cloud solutions, Managed IT Services, and Application Consulting by taking a customer-centric approach to understand their business needs.

Type: Nonprofit

Headquartered: San Diego, CA

Size (SF): 5,149

Year Founded: 1980

Employees: 500+

Lease Expiration: September 2021

AVID (Advanced Via Individual Determination) is a nonprofit organization that helps schools shift to a more equitable, student-centered approach. They provide professional development, resources, and on-going support to the 6,000 schools they partner with. With training to over 70,000 educators, they bridge the opportunity gap and prepare students for college, careers, and life.

JLL | 55


Major Tenant Overview

Type: Private

Headquartered: Centennial, CO

Size (SF): 8,361

Year Founded: 1999

Employees: 200

Lease Expiration: May 2023

Type: Private

Headquartered: Greenwood Village

Size (SF): 8,702

Year Founded: 2008

Employees: 23 (Estimate)

Lease Expiration: December 2024

It’s Never 2 Late ® (iN2L), founded in 1999, is dedicated to helping older adults realize the full benefits of today’s technology. iN2L integrates the hardware, software, media and various components necessary to allow virtually any person with any interest in using a computer — regardless of background, physical or intellectual abilities--to do so pleasurably, engagingly, and without frustration. The system is built on a picture-based, touch-screen interface that allows users to simply “touch” their way to find engaging, educational, spiritual and personalized content that is appropriate to their own level of ability. iN2L’s scalable systems are currently installed at more than 2000 senior living communities across the entire US and four countries.

With over 3,800 locations around the country, HCS offers many different types of hearing aids depending upon the customers desired quality of hearing aid. HCS utilizes 9 major manufacturers and on average saved patients $1,548 per hearing aid in 2017. .

Type: Private

Headquartered: Cincinnati, OH

Size (SF): 4,909

Year Founded: 1993

Employees: 500+

Lease Expiration: November 2023

iSqFt, provides on-line pre-construction management services to the commercial construction industry. iSqFt was founding in 1993 in West Chester, Ohio, a suburb of Cincinnati, by Phil Ogilby and his son, Justin. The companies, initial focus was the development of takeoff and estimating software for the commercial roofing and sheet metal industry. Now, they are the leading provider of on-line pre-construction management services.


JASON SCHMIDT Executive Vice President +1 303 217 7953 [email protected]

RACHEL VOGEL Associate +1 303 542 [email protected]

BAXTER FAIN Managing Director +1 303 260 6538 [email protected]

Leasing Contact:Finance Contact:

PATRICK DEVEREAUX Executive Vice President +1 303 217 7977 [email protected]

Exclusively offered by JLL Capital Markets:

NATE BRADLEY Senior Director | Cushman & Wakefield +1 303 813 6444 [email protected]

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