SoDo Market Conditions October 6 2017 SoDo Market Conditions PREPARED FOR Appraisal Institute Fall Real Estate Conference PREPARED BY Jim Kidder, SIOR Senior Vice President 206.248.7328 jkidder@kiddermathews.com

SoDo Market Conditions SoDo Aerial

South Seattle Vacancy SoDo Market Conditions End of 3rd Quarter 1.79% Projection -Gradual increase in vacancy -Stable rental rates -Tenants will need to adjust to new rents End of 2nd Quarter 1.55%

SoDo Market Conditions Industrial Lease Rates

Associated Grocers SoDo Market Conditions 3301 S. Norfolk Street, Seattle Sale Date: November 23, 2016 Building SF: 963,000 Land SF: 63.22 AC Sale Price: $138,488,000 Price PSF Bldg: $143.81 Price PSF Land: $50.29 Cap Rate: 5% At a 5% Cap Rate Rent: $0.60 PSF/month blended

Color Graphics SoDo Market Conditions 1421 S. Dean Street, Seattle Sale Date: August 31, 2017 Building SF: 35,997 Land SF: 52,316 Sale Price: $9,000,000 Price PSF Building: $250.02 Price PSF Land: $172.03 Cap Rate: 5% At a 5% Cap Rate Rent: $1.04 PSF/month blended *Note: Sold for $5,950,000 on 4/28/16, IC-Zoning

Morel Foundary SoDo Market Conditions 637 S. Lucile Street, Seattle Sale Date: February 3, 2017 Building SF: 45,320 Land SF: 63,001 Sale Price: $7,750,000 Price PSF Building: $171.01 Price PSF Land: $123.01 Cap Rate: 7.7%

Gary’s Westside Towing SoDo Market Conditions Gary’s Westside Towing 5939 4th Avenue South, Seattle Sale Date: January 27, 2017 Building SF: 6,512 Land SF: 32,714 Sale Price: $2,470,000 Price PSF Building: $379.30 Price PSF Land: $75,50 Cap Rate: 5% At a 6% Cap Rate Rent: $1.58 PSF/month blended Note: Land deal

Ambiente Tile SoDo Market Conditions 6321 7th Avenue South, Seattle Sale Date: June 30, 2017 Building SF: 15,960 Land SF: 18,295 Sale Price: $4,198,000 Price PSF Building: $263.03 Price PSF Land: $229.46 Cap Rate: 5% At a 6% Cap Rate Rent: $1.10 PSF/month blended

Holgate Square SoDo Market Conditions 1770 Airport Way South, Seattle Sale Date: February 14, 2017 Building SF: 3,140 Land SF: Condo Sale Price: $1,500,000 Price PSF Building: $477.71 Price PSF Land: Condo Cap Rate: 5% At a 6% Cap Rate Rent: $2.00 PSF/month blended Note: Seller financing 10% down

Georgetown Restaurant SoDo Market Conditions Georgetown Restaurant 6932 Carleton Avenue, Seattle Sale Date: April 4, 2017 Building SF: 3,245 Land SF: 15,503 Sale Price: $1,300,000 Price PSF Building: $400.62 Price PSF Land: $83.85 Cap Rate: 5% At a 6% Cap Rate Rent: $1.67 PSF/month blended Note: Sold $600,000 on 7/15/16

SoDo Market Conditions 4th Quarter 2016 Property Address Sale Date Bldg SF Land Area SF Sale Price Price PSF Bldg Price PSF Land 12218 51st Pl 09/26/2016 2,040 22,690 $950,000 $465.69 $41.87 7240 E Marginal Way 09/29/2016 6,524 29,585 $1,890,000 $289.70 $63.88 1518 1st Ave S (2 Properties) 10/19/2016 69,248 17,424 $25,000,000 $361.02 $1,434.80 8601 8th Ave S 10/25/2016 5,600 9,496 $1,025,000 $183.04 $107.94 1201 S Bailey St 11/04/2016 12,400 9,626 $2,600,000 $209.68 $270.10 150 S Horton St 11/08/2016 16,839 120,225 $8,300,000 $492.90 $69.04 3301 S Norfolk St (8 Properties) 11/23/2016 963,000 2,753,863 $136,000,000 $141.23 $49.39 132 S Spokane St 11/30/2016 14,488 18,486 $3,325,000 $229.50 $179.87 4800 Airport Way S 4,440 3,249 $650,000 $146.40 $200.06 8531 E Marginal Way S 12/01/2016 288,835 896,499 $9,913,600 $34.32 $11.06 9525 14th Ave S (2 Properties) 12/15/2016 2,208 88,862 $3,750,000 $1,698.37 $42.20 8611-8613 14th Ave (4 Properties) 12/21/2016 14,903 40,075 $2,000,000 $134.20 $49.91 12674-12698 Gateway Dr (8 Properties) 12/27/2016 371,163 1,000,137 $78,000,000 $210.15 $77.99

SoDo Market Conditions 1st Quarter 2017 Property Address Sale Date Bldg SF Land Area SF Sale Price Price PSF Bldg Price PSF Land 5939 4th Ave. S. 01/27/2017 6,512 32,713 $2,470,000.00 $379.30 $75.51 637 S. Lucile St. 02/03/2017 45,320 63,000 $7,750,000.00 $171.01 $123.02 1770 Airport Way S. 02/14/2017 3,140 2,613 $1,500,000.00 $477.71 $574.05 4130 1st Ave. S. 02/28/2017 31,211 30,718 $6,671,215.00 $213.75 $217.18 Land Only 2918 1st Ave S. 02/10/2017 N/A 9,016 $948,250.00 $105.17

SoDo Market Conditions 2nd Quarter 2017 Property Address Sale Date Bldg SF Land Area SF Sale Price Price PSF Bldg Price PSF Land 6111-6113 13th Ave S 03/31/2017 18,488 23,522 $3,205,000 $173.36 $136.26 6932 Carleton Ave 04/04/2017 3,245 15,503 $1,300,000 $400.62 $83.85 25-29 S Hanford St 04/21/2017 35,400 45,977 $5,940,000 $167.80 $129.20 9600 8th Ave S 05/18/2017 193,585 786,693 $25,640,000 $132.45 $32.59 2520 Airport Way S 05/22/2017 20,725 71,874 $5,000,000 $241.25 $69.57 2764 1st Ave S 06/15/2017 15,360 27,007 $2,700,000 $175.78 $99.97 Land Only 5601-5607 2nd Ave S 05/12/2017 N/A 16,400 $76.22

SoDo Market Conditions 3rd Quarter 2017 Property Address Sale Date Bldg SF Land Area SF Sale Price Price PSF Bldg Price PSF Land 6321 7th Ave. S. 06/30/2017 15,960 18,295 $4,198,000 $263.03 $229.46 53 S. Dawson St. 07/07/2017 13,176 60,548 $4,000,000 $303.58 $66.06 118 S. Lucile St. 1,820 5,000 $650,000 $357.14 $130.00 200 SW Michigan 82,218 237,645 $14,600,000 $177.58 $61.44 317 S. Bennett St. 07/11/2017 8,000 15,002 $1,600,000 $200.00 $106.65 1200 S. Angelo St. 08/14/2017 4,600 12,196 $1,800,000 $391.30 $147.59 801 S. Fidalgo St. (2 Properties) 08/23/2017 27,145 158,558 $5,660,000 $208.51 $35.70 1421 S. Dean 08/31/2017 35,997 52,315 $9,000,000 $250.02 $172.03 8001 7th St. S. 1,600 7,405 $315,000 $196.88 $42.54

I-502 SoDo Market Conditions Revenue from I-502 State of Washington Tax Revenue 2016: 2017 – 2019 budget cycle $730,000,000 King County Tax Revenue 2016: Marijuana Tax Revenue: $116,261,513 Purchased by Consumer’s: $660,032,302 Sale Tax Generated: $59,402,907 Uncle Ike’s Paid: $13,393,987 total tax paid

SoDo Market Conditions I-502 Retailers in Seattle Retailer Dockside SoDo 1728 Fourth Ave S Cannabis City 2733 Fourth Ave S Ganja Goddess 3207 First Ave S Diego Pellicer 2215 Fourth Ave S Seattle Cannabis Co. 3230 First Ave S Northwest Homegrown 2724 Third Ave S Herban Legends 55 Bell St. Have a Heart Belltown 115 Blanchard St. Retailer Queen Anne Cannabis Co. 312 W Republican St. Pot Shop Seattle 1628 Dexter Ave N Ruckus 1465 E Republican St. Uncle Ike’s Capitol Hill 501 15th Ave E Uncle Ike’s 2310 E Union St. Ponder 2413 E Union St. Pot Stop Recreational Cannabis 3540 Stone Way N Have a Heart Fremont 316 N 36th St. Retailer Hashtag Recreational Cannabis 3540 Stone Way N Oz. 3831 Stone Way N American Mary 321 NE 45th St. The Partakery 417 NW 65th St. Have a Heart Greenwood 300 NW 85th St. Trees Pot Shop 10532 Greenwood Ave N. Greenworks 315 N 105th St. Stash Pot Shop 4912 17th Ave NW

SoDo Market Conditions I-502 Retailers in Seattle Retailer Herbs House 716 NW 65th St Ocean Greens 9724 Aurora Ave N Stash Pot Shop 10333 Lake City Way NE Fweedom Cannabis 12001 Aurora Ave N Seattle Tonics 12059 Aurora Ave N Dockside Shoreline 15029 Aurora Ave N 365 Recreational Cannabis 17517 15th Ave NE Herb(n) Elements 11013 Lake City Way NE Retailer Greenside Recreational 9804 Lake City Way NE #1 Grass & Glass! 14343 15th Ave NE, Suite A NiMBiN Pot Shop 10861 First Ave S Clutch Cannabis 11537 Rainier Ave S A Greener Today 5209 Martin Luther King Jr. Way S Origins Recreational 4800 40th Ave SW West Seattle Marijuana Store 10825 Myers Way S Canna West Seattle 5435 California Ave SW Retailer Vela 1944 1st Ave S

Vela Building SoDo Market Conditions Investment Overview Asking Rate: $4,234,000 / 6% cap rate Location: 1944 1st Ave S Units: 1 Building Size: ±7,810 SF Land Area: ±9,000 SF Lot Dimensions: ±60’ wide x 150’ Year Built: 1965 / 1980 Occupancy: 100% Parcel #: 766620-6270 Zoning: IG2 U/85 Location: North SoDo

Appraisers Are My Friend SoDo Market Conditions Appraisers Are My Friend