850 Battery Street | San Francisco, CA

For Sale - North Waterfront Opportunity850 Battery Street | San Francisco, CAExclusively represented byMorgan Thomas415.229.8981mthomas@kiddermathews.comLIC #01327365Michael Gschwend415.229.8908michaelg@kiddermathews.comLIC #01406626• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

850 Battery Street, San Francisco, CAMemorandum DisclaimerKidder Mathews has been retained exclusively on behalf ofthe Seller to explore a possible transaction (“Transaction”)between the Seller and Prospective Buyer (“Buyer”) relatingto the sale of the Seller’s property known as 850 BatteryStreet San Francisco, California (“Property”). This disclosurestatement is for the benefit and protection of both theSeller and Kidder Mathews. All information in this OfferingMemorandum is provided pursuant to the terms of theCONFIDENTIALITY AND NON-DISCLOSURE AGREEMENTsigned by you as a condition to your access to thisinformation. Without limiting the foregoing:No Warranties of Accuracy or Completeness. Althoughthe Seller has endeavored, in their sole discretion, toinclude in the Evaluation Material information known tothem which they believe appropriate to disclose andrelevant for the purpose of your investigation of a possibleTransaction, you understand and agree that none of theSeller, Kidder Mathews nor any of their affiliates, officers,employees, attorneys, agents or representatives makes anyrepresentation or warranty, either express or implied, as tothe accuracy, sufficiency or completeness of the EvaluationMaterial. You agree that none of Kidder Mathews, the Seller,nor any of their affiliates, officers, employees, attorneys,agents or representatives shall have any liability to youor any of your Agents or Investors (or any of your or theirsuccessors or assigns) with respect to or resulting from theuse of or reliance on the Evaluation Material or the accuracy,sufficiency or completeness of the Evaluation Material. Youagree to defend, indemnify and hold Kidder Mathews, theSeller, and their affiliates, officers, employees, attorneys,agents and representatives harmless from and againstany and all claims, losses and damages arising from your,or any of your Agents’ or Investors’ or any of your or theirsuccessors’ or assigns’ use of or reliance on the EvaluationMaterials.Non-Exclusivity. You acknowledge and agree that untilsuch time you and the Seller have executed a definitiveagreement with respect to a Transaction (and even thereafterto the extent such definitive agreement so allows), theSeller may without prior notice or liability to you: (a) marketthe Property, (b) disclose Evaluation Material and otherinformation to and negotiate with any other person orentity and enter into a preliminary or definitive agreementwith respect to a Transaction with any such person orentity, (c) change the procedures or terms relating to itsconsideration of a Transaction and (d) terminate discussionsand negotiations with respect to a Transaction and ceasemaking Evaluation Material available to you or your Agentsor Investors at any time and for any reason or no reason.kiddermathews.com

850 Battery Street, San Francisco, CATable of Contents1. Executive SummaryBattery Street• The Opportunity• Investment Highlights• Offering Summary2. Property SummaryFront Street850 BATTERY STREET• Rent Roll• Floorplans3. Location Overview• Bay Area OverviewVallejo Street4. The Market• San Francisco Office Market• Comparable SalesSkiddermathews.com

850 Battery Street, San Francisco, CAExecutive SummaryTHE OPPORTUNITYThe property represents a rare opportunity for an investor,owner/user, or developer to acquire an office building inthe historic North Waterfront District.The parcel is ±4,468 square feet and the total building areais ±8,894 square feet. The property occupies a prominentlocation in the North Waterfront with ±46 feet of frontageon Battery Street and ±98 feet on Vallejo StreetINVESTMENT HIGHLIGHTS• The building is strategically located in the NorthWaterfront District surrounded by Jackson Square, theFinancial District and North Beach.• The North Waterfront District is beautifullylandscaped, easily accessible from the FinancialDistrict and nearby residential areas; parking is ample,accessible by public transit• The North Waterfront’s access to restaurants and retailservices and other amenities lend itself to a broadrange and size of tenants that further assures strongtenant demand• Tenant types in the area include: architects, attorneys,advertising agencies, graphic designers, andtechnology firms.OFFERING SUMMARYPurchase PriceAddressNegotiable850 Battery Street,San FranciscoAPN 0141-008Site AreaBuilding AreaZoning C-2±4,468 SF±8,894 SFYear Built 1941kiddermathews.com

Property Summarykiddermathews.com

850 Battery Street, San Francisco, CAPROPERTY SUMMARYLocation850 Battery Street,San FranciscoAPN 0141-008LandFrontageBattery StreetFrontageVallejo StreetProperty Type±4,468 square feet±46 feet±98 Feet2-story officeSan FranciscoNorth WaterfrontColumbus StreetGreen StreetVallejo StreetBroadwayPacific AvenueJackson StreetWashington Street850 BATTERY STREETThe EmbarcaderoFront StreetBattery StreetSansome StreetMontgomery StreetPermitted UsesZoningConstructionTypeOffice, retail, restaurant, residentC-2, Community BusinessTwo-story reinforced concreteConcrete (construction & foundation)Roof Tar and gravel , new (2003)ParkingStreet parkingkiddermathews.com

BUILDING DESCRIPTIONBuilding AreaFirst FloorGround Floor:2nd Floor:Total Building Area±4,447 SF±4,447 SF±8,894 SFMen’sWomen’sElectricalClosetClosetConstructionTwo-story reinforced concreteHeight Limit65 FeetClosetBattery StreetCeiling HeightGround Floor:2nd Floor:Year Built8 feet9 feetVallejo Street1941FAR5:1Second FloorDwelling Density1 unit per 800 SFHVACWMRoof mounted HVACUtilitiesBattery StreetSingle meter gas and electricLife SafetyFire detectorsVallejo Streetkiddermathews.com

850 Battery Street, San Francisco, CARENT ROLLUnit Tenant SQ. FT. Rent Expiration1 Vacant ±1,2042 Vacant3 Vacant4 Bleemer Chiropractic ±720 $1,864 MTM5 Vacant6 Vacant ±35911 Jessen Production ±196 $675 MTM12 Randy Bradner ±163 $550 MTM13 V. Patrick±163 $450 MTMNational Print Group14 Vacant ±16315 Richard David ±353 $300 MTM17 Vacant ±11218 Jacob Friedman ±137 $350 5/31/20111619Colorhythm LLC ±1,252 $1,860 6/30/20112021 DGL Land Holding ±270 $500 MTMroof Sprint PCS 0 $3,013 1/30/2013TOTAL ±6,081 $12,256kiddermathews.com

Location Overviewkiddermathews.com

850 Battery Street, San Francisco, CALocation OverviewBAY AREA OVERVIEWThe San Francisco Bay Area has the unique distinction ofbeing the most innovative place in America. The Bay Areais one of the most inventive, competitive economies in theworld based on a productive and educated workforce, deepventure capital pool, concentration of research organizations,culture of innovation and receptivity to new ideas. Some ofthe highlights of the Bay Area include:• Over 7.2 million residents and the highest percentage ofgraduate and professional degrees in the nation• Home to 29 Fortune 500 companies and 40 of Inc. 500’sfastest growing private companies• Highest concentration of venture capital firms in theworld which have invested an average of $10 billionannually to 1,100 local area firmsKNOWLEDGE-BASED ECONOMYWith its reputation for cutting-edge innovation, the BayArea requires one of the most specialized and educatedworkforce in the country. The Bay Area has the highestpopulation with a bachelor’s degree and the largest numberof top 10 graduate programs. Recent literature by acclaimedauthor, Dr. Richard Florida, credits the knowledge workers ofthe Bay Area as the main catalyst for economic growth in hispublication, Who’s Your City? He cites the Bay Area as thepremier location for this “creative class”, with its establisheddemographic talent, diversity and tolerant community,and the advanced technology infrastructure necessary tofuel an entrepreneurial culture. Those, he claims, who can“create outcomes in new ideas” will bring any region to greateconomic power and growth.• Proximity to outstanding education and researchinstitutions at Stanford University, University ofCalifornia at Berkeley, University of California SanFrancisco, University of California at Davis, Santa ClaraUniversity and San Jose State UniversityView from Pacifi c Heights.© Justin Lagacekiddermathews.com

The Marketkiddermathews.com

The MarketSAN FRANCISCO OFFICE MARKETNet absorption for San Francisco’s office market finishedthe fourth quarter in positive territory at 371,389 squarefeet. This result marks the second straight quarter leasingactivity has outpaced vacated space, a promising signthat market conditions are on a path to stabilization.Though overall economic uncertainty is still holding SanFrancisco County’s unemployment rate high at 9.3%, theBay Area’s technology sector is driving growth in demandfor office space. The vacancy rate remained relativelyunchanged over 2010, in spite of 382,280 square feetof sublease space being absorbed. In fact, the totalavailability rate dropped only 170 basis points for theentire year.The office market ended the year with a vacancy rate of13.8%. This slight quarter-over-quarter improvement of20 basis points marks the second consecutive declinein vacant space, signaling vacancies may have finallyended their upward climb. The Lower South of Marketand Rincon/South Beach submarkets have the lowestvacancy levels, with rates of 4% and 8.7% respectively.Activity South of Market is expected to again outpaceall other submarkets in the coming quarters, with nontraditional,creative space in high demand from fastgrowthtechnology firms.Total gross absorption over in the fourth quarter totaled1,915,161 square feet, which is the market’s fourthconsecutive quarterly increase, in part, due to mosttraditional major office users ceasing to layoff employeesand now beginning to hire. On the negative side, shadowspace continues to slow demand, as many firms who areresuming growth already have excess space. The NorthFinancial District had 5,161,637 available square feet atthe close of the quarter, and until most of the prime officespace is occupied south of Market, market conditions inthe central business district will remain relatively flat.The average asking rate in the South of Market districtcontinues to rise, with a fourth quarter average of $31.48/s.f.,(full service gross), $.38 higher than the close of last year.Though San Francisco remains landlord competitive, othersubmarkets are beginning to see resurgence in rental ratesas well, as low construction levels rebalance supply anddemand market fundamentals. The majority of activity is inClass A and creative space, but demand is expected to spillover to lower image product towards the end of next year.Investment demand for San Francisco’s core assetsremained very strong over the last three months, with debtmarkets opening up and the economic recovery gainingtraction. Valuations appear to already be on a sharp risefrom early 2010, pointing to investors’ positive forecastson the Bay Area economy. In December, 655 MontgomerySt sold for $303/s.f. to Principal Real Estate Investors. Alsonotably, Kilroy Realty Corporation purchased 100 First St for$421/s.f. While some investors are waiting to take advantageof distressed assets coming to market in 2011-2012, buyersentiment has turned San Francisco into a “seller’s market.”kiddermathews.com