Sony Pictures Entertainment Inc. · Sony Pictures Entertainment Inc. Confidential and proprietary 2 Sony Pictures Entertainment is headquartered in Culver City, California on a Studio

Confidential and proprietary Sony Pictures Entertainment Inc.

Studio Lot Office Building Project – Request for Proposal

April 2014

Sony Pictures Entertainment Inc.

Confidential and proprietary Sony Pictures Entertainment Inc. 1

Dear Investor:

JLL has been retained as the exclusive real estate advisor to Sony Pictures Entertainment Inc. (the “Tenant” or “SPE”). Currently, as the exclusive representative for the Tenant, we are

interested in establishing a working relationship with an investor who is qualified to own SPE’s new build-to-suit office building in Culver City, California (“Project”).

For your consideration JLL has assembled this Request for Proposal (“RFP”) to develop and/or take ownership of the Project on a ground lease basis. We are requesting that you submit

your response by Friday, May 2, 2014:

Project: Sony Pictures Entertainment Inc. Studio Lot Office Building Project

Potential Address: Culver City, California

Please provide your proposal in accordance with the specifications as outlined in this RFP document and send it back to the attention of Bruce Westwood-Booth via email at

[email protected].

This is a highly confidential project and is subject to the Confidentiality Agreement previously signed by you and Tenant. Any disclosure both within and outside your firm may be made

only in strict accordance with the terms of that Confidentiality Agreement. The Project must remain confidential until further notice and may then be disclosed only to the extent set forth in

such notice.

JLL will be available to answer any questions and address investor comments relative to this project up until Friday, May 2, 2014. Respondent interviews with SPE will be held between

May 12 and May 16, 2014. Best and final bids will be due on May 30, 2014. Final presentations to JLL and SPE will be held from May 26 through May 30, 2014 and the developer and

ownership team will be selected by June 6, 2014.

We have been asked to inform you that you should not contact our client regarding this letter or any matters related to the Project; only JLL should be contacted. Questions regarding the

RFP process, timeline and inquiries should be submitted to any of the Jones Lang LaSalle representatives listed below. We look forward to working with you and are available to address

any questions or comments.

Sony Pictures Entertainment Inc. Studio Lot Office Building Project

RE: Request for Proposal

RFP & Transaction Structure Local Market & Entertainment Industry

Bruce Westwood-Booth

Managing Director

+1 312 228 2966

[email protected]

Robert Dmytryk

Managing Director

+1 858 410 1211

[email protected]

Rob Bickel

Managing Director

+1 213 239 6141

[email protected]

Carl Muhlstein

Managing Director

+1 213 239 6055

[email protected]

mailto:[email protected]










Sony Pictures Entertainment is headquartered in Culver City, California on a Studio Lot that encompasses 46 acres of land, approximately 1.1 million square feet of office and support space, and features 22

sound stages. SPE is seeking a partner to develop, finance, own, and lease to SPE, a new 223,540 square foot office building to be located on a portion of land on the western edge of the Studio Lot that

currently functions as a surface parking lot. SPE will enter into a ground lease for the land, and SPE will act as the construction agent for the Project.

Total Project Costs are more fully broken down in the Project Budget, attached hereto. These costs are based on the supplied specifications where the estimated total costs of development are $129.1

million. It is expected that SPE will additionally invest $17.0 million into this Project in the form of FF&E: furniture, technology and equipment. A high level break down of the development timing is as follows:

The RFP is intended to identify the firm that can: 1) Assume responsibility for the development of the Project; 2) Guarantee pricing and completion; and 3) Be the Landlord to SPE under a long term absolute

triple net lease which will have an initial lease term of 15 to 20 years.

The objective of the RFP process is to identify a developer and/or owner that:

Has a proven track record of success handling a project of this type and scope;

Has the financial wherewithal to fund the Project;

Is willing and able to work within the intended timelines; and

Is willing and able to work to insure that the lease will conform to Operating Lease guidelines as currently defined under GAAP.

The RFP is divided into three (3) sections related to:

Overview of the bidder,

Development process for the Project, and

Long term ownership of the property.

Please respond to the specific requests stated in the RFP and provide any additional input that you think would be beneficial.

Scope and the Objectives of the RFP

RE: Request for Proposal (cont.)

Description Timing

Predevelopment Activities & Procurement of Materials Q2, 2014 through Q4, 2014

Construction Commencement & Demolition Q4, 2014

Site Improvements Q4, 2014 through Q1, 2016

Core & Shell Construction Q4, 2014 through Q3, 2015

Interior Build Out Q3, 2015 through Q2, 2016

Punch List Items & Completion Q2, 2016 through Q3, 2016

Occupancy Q3 2016

Confidential and proprietary Sony Pictures Entertainment Inc. Confidential and proprietary

Project Overview 4

Tenant Overview 12

Location Highlights 14

Project Budget 22

Timeline 24

Bid Request 26

Formal Request for Proposal 29

Table of Contents

Sony Pictures Entertainment and JLL would like to stress the

extreme confidential nature of this bid package. The Project is

highly confidential and bidders are reminded that they are under a

Confidentiality and Non-Disclosure Agreement.


Project Overview


BACKGROUND

SPE is headquartered in Culver City, California on a Studio lot encompassing 46 acres of land,

approximately 1.1 million square feet of office and support space and features 22 sound

stages. SPE leases an additional 750,000 square feet in and around Culver City for office and

support requirements.

The Studio Lot accommodates approximately 1,600 employees while an additional 1,800

employees are located in leased facilities around Culver City.

OPPORTUNITY

SPE is seeking a partner to develop, finance, own, and lease to SPE, a new 223,540 square

foot office building to be located on a portion of land on the western edge of the Studio Lot.

SPE will enter into a ground lease for their land.

The landlord will also receive a long-term easement agreement to the Overland Garage for

sufficient market parking rights. 720 parking spaces (3.5/1,000) are required, however up to

950 spaces could be provided.

Construction of the new building is anticipated to commence 4th Quarter 2014. Completion of

the Project and occupancy is estimated to be no later than 3rd Quarter 2016.

Background and Opportunity JLL is pleased to have the opportunity to represent Sony Pictures Entertainment Inc. (the “Tenant” or “SPE”). SPE is a subsidiary of Sony

Entertainment Inc., a subsidiary of Tokyo-based Sony Corporation. SPE's global operations encompass motion picture production,

acquisition and distribution, television production, acquisition and distribution, television networks, digital content creation and

distribution, operation of studio facilities, and development of new entertainment products, services and technologies.


View from B Street towards the West

Conceptual Project Renderings


View from Overland Avenue towards the North

Conceptual Project Renderings (cont.)


View from B Street and 9th Avenue towards the North

Conceptual Project Renderings (cont.)


Location & Aerial

PROPOSED:

New, 8-Story Building

223,540 SF


Site Plan

New 8-Story Building

Acquired parking

rights and access

through long-term

Easement

Agreement


Architect

Legal Counsel Legal Counsel

Development Consultant

MEP Engineers Project Management

Traffic Consultant

Civil Engineers Structural Engineers

Project Team Consultants

THE GEORGETOWN

COMPANY

Note:

- CW Driver and Matt Construction have been shortlisted by SPE to be the General Contractor for Pre-construction Services


Tenant Overview


Company Overview

Sony Pictures Entertainment

Sony Pictures Entertainment Inc. (“SPE”) is a subsidiary of Sony Entertainment Inc., a subsidiary of Tokyo-based Sony Corporation. SPE's global operations encompass motion picture

production, acquisition and distribution; television production, acquisition and distribution; television networks; digital content creation and distribution; operation of studio facilities; and

development of new entertainment products, services and technologies. Additional information is available at www.sonypictures.com.

SPE is headquartered in Culver City, California and serves as Sony’s main global film production and distribution company. SPE’s rich history can be traced back to 1918 when brothers Harry

and Jack Cohn formed a partnership with their associate, Joe Brandt, to form CBC Film Sales, to produce low-budget short films and featurettes. By 1920, the film industry was attracting

audiences of 35 million a week. Meanwhile, Columbia Pictures got its start, bringing pictures like It Happened One Night and Lawrence of Arabia to life. The Studio Lot originally served as

MGM’s studio lot, with Columbia Pictures moving onto the Studio Lot in 1990 after its acquisition by Sony Corporation. Throughout the years, SPE has produced, distributed, or co-distributed

successful franchises such as Spider-Man and Men in Black.

Columbia Tristar

Motion Picture Group

Encompasses Columbia Pictures, TriStar Pictures, Sony Pictures Classics and Screen Gems in addition

to releasing groups, Sony Pictures Releasing and Sony Pictures Releasing International. Internationally,

motion picture operations include Columbia Pictures Film Production Asia (Hong Kong), Columbia Films

Producciones Espanolas (Madrid), Columbia Pictures Producciones Mexico (Mexico City) and additional

operations in the United Kingdom, Brazil and Japan. The company's total motion picture library, with

more than 3,500 titles includes 12 Best Picture Academy Award® winners.

Sony Pictures

Television

Produces and distributes programs worldwide, spanning all formats and genres, for a multitude of platforms.

In addition to its U.S. production business, the company has 18 wholly-owned or joint venture production

companies in 13 countries. Its worldwide television networks portfolio includes 126 channel feeds in 168

countries, reaching more than 980 million households worldwide. The division also creates original content for

and manages SPE’s premium website, Crackle.

Sony Pictures

Home Entertainment

Distributes Sony Pictures produced and third-party acquired theatrical television and other product on digital

media, Blu-ray disc, DVD, UMD and other media globally.

Sony Picture

Digital Productions

Comprised of Sony Pictures Animation, Sony Pictures Imageworks and Sony Pictures Interactive, the

division produces stories, characters, images, visual effects and animation.

Sony Pictures

Studios

The studio lot in Culver City features 22 sound stages ranging in size from more than 7,600 SF to the world’s

second-largest stage at roughly 43,000 SF. The company’s studio lot provides integrated digital capabilities to

create and deliver content across existing and emerging media and markets.

Sony Corporation highlights include: SPE’s five main business segments:

Ticker Symbol NYSE: SNE

12/31/2013 T-12

Annual Revenue $96.7 billion

12/31/2013 T-12

Operating Profit $15.5 billion

Market Cap $18.1 billion

Fortune 2013

Global 500 Ranking 94

# of Countries 43

S&P Credit Rating BBB- / Negative

Moody’s Credit Rating Ba1 / Stable

http://www.sonypictures.com/






Location Highlights


Culver City

Overview

Culver City is undergoing an economic and cultural renaissance. Originally recognized as a center for motion picture and television

production, Culver City is a progressive community that combines a unique shopping environment, a rich entertainment history and a

rapidly expanding multimedia hub. Downtown Culver City has been praised for its new art scene due to the influx of art galleries, trendy

stores, and numerous restaurants, compelling The New York Times to coin the area as a “nascent Chelsea”. Downtown Culver City’s

revival has been instrumental in the introduction of several mixed-use projects, as well as a host of other residential, retail, live/work, and

office developments leading to more companies to choose to live and do business in Culver City.

Thriving High-Tech Sector

Culver City’s central location and proximity to Silicon Beach, a rapidly growing high-tech hub comprised of the coastal areas, stretching

from Santa Monica down through the South Bay, including Playa Vista, Santa Monica, Venice, and Marina del Rey. Silicon Beach’s

desirable coastal lifestyle, world-class beaches and amenities have facilitated the area’s growth in high-technology industries. The

desirability of the area has attracted some of the most innovative, cutting-edge companies in the world including Facebook, Microsoft,

and YouTube in Playa Vista, Yahoo! in Santa Monica, and Google and SnapChat in Venice. The synergistic clustering effect of the

technology industry is expected to continue the pattern of growth within the area in both high-tech online companies as well as other

related industries such as entertainment and media, and advertising. Neighboring markets, including Culver City, will ultimately benefit

from this growth as a choice location for smaller companies and start-ups desiring to be close to their peers without paying the higher

rents in the coastal communities.

//upload.wikimedia.org/wikipedia/commons/0/06/Facebook.svg

//upload.wikimedia.org/wikipedia/commons/2/24/Yahoo!_logo.svg

//upload.wikimedia.org/wikipedia/en/5/5e/Snapchat_logo.png

//upload.wikimedia.org/wikipedia/commons/0/06/YouTube_logo_2013.svg

//upload.wikimedia.org/wikipedia/commons/f/f5/Microsoft_logo_and_wordmark.svg


The Creative Office Trend

Westside Office Market While growth of the professional service, real estate and finance industries has been slow since 2008, the rapid growth of the entertainment, media and technology sectors has

fueled a surge in demand for creative office space that outweighs the supply within the highly desirable Westside office market. Culver City’s Hayden Tract, the Blackwelder Project

and Playa Vista have drawn several large users including Google, Facebook, Microsoft, 72 and Sunny, Earthbound Media, TMZ, Belkin, The Mill, Vevo, Syska Hennesy and USC

who have chosen to relocate to the Lower Westside.

The Culver City office market is part of the greater Westside which is steadily improving with decreasing vacancy and little relief of new construction. Annual asking rents are up

nearly 10% compared to 3% county-wide. Tenant demand continues to be driven by entertainment, media, ad agencies, and consumer brands. The Culver City and Lower Westside

submarkets only have 4 blocks of 100,000 SF or greater, currently available through 2016. Only one additional project, Tishman Speyer’s Campus at Playa Vista Phase 2, is poised

to start construction. Analyst reports on public REIT developers and owners indicate very low 5% Cap Rate valuations and 5.0% to 10.0% annual rent growth over the next three

years. Very few viable adaptive reuse candidates remain with Element LA, The Reserve, 8550 Higuera / 8600 Hayden, and 3401 Exposition achieving no vacancy at or shortly after

completion.

Westside Office Market Highlights as of 4th Quarter 2013:

51.9 million square feet of space

Direct vacancy rate of 13.6%

900,000 square feet of direct net absorption through the fourth quarter 2013

Creative Office Outperforms Creative office is a subset of the overall office market and has demonstrated its ability to outperform traditional office over the last 10 years. Creative office space has consistently

had lower vacancies than the rest of the office market in the Westside, with fourth quarter 2013 reaching 7.7% versus the Westside’s 13.6%. With vacancies continuing to tighten

due to increasing demand for creative office on the Lower Westside and a lack of new developable sites and redevelopment opportunities, rents are poised to achieve $3.75 - $4.50

FSG by 2015.


Creative Tenants Prefer the Westside

Century City Beverly Hills West Hollywood

Jefferson Corridor Hayden Tract

Ipsos/OTX

Magento

Q-Tech Corporation

Kovel/Fuller

NPR West

Pretty Bird Creative

HOK

M-E Engineers Inc.

Industrial Color LA

Paige Jeans

Lodis Accessories

The Rose Group

Junk Food Clothing

Blur Studio

Woo Agency

Omelet Hell’s Kitchen Studios

NBCU

Beats by Dre

Blind Decker Productions

Smashbox Studios

Red Bull

Quixote Studios

Tennis Channel

Ogilvy & Mather

Anonymous Content

Nike

Lunchbox Studios

Maker Studios

Zoic Studios

Media Temple

Herman Miller

Spin Master Studios

Chinese Laundry

NFL Network Studios

Studio Lambert

Culver Studios

Blur Studio


SPE is located in the heart of the global entertainment industry and is surrounded by major and independent motion picture, television, new media and

transmedia production.

Entitling in-fill sites can average three or more years, making it very difficult to project market rental rates, increasing construction costs, market conditions,

and interest rates. As such, office buildings located on or about studio lots are synergistic and typically outperform the rental market.

Entertainment Industry Impact on Real Estate


Studio Market Landscape


Studio Market Landscape – Major

Sony Pictures Studios Warner Brothers Studios Universal Studios CBS Studio Center

Owner Sony Warner Brothers Comcast / NBCUniversal CBS, Inc.

Size 46-acre lot in Culver City 142-acre main lot, plus 30-acre Ranch

lot in Burbank

390-acre lot in Universal City 40-acre lot in Studio City

Sound Stages 22 (7,600 – 43,000 SF) 25 (10,655 – 32,130 SF) + 14 backlots 30 (6,831 – 29,452 SF) + 16 backlots 18 (7,000 – 25,000 SF) + 3 warehouses

Screening Rooms 14 7 8 1

Features • Full-service facility

• Post production & digital services

• Full-service facility





• Post-production services

• New home to CBS News regional offices

Walt Disney Studios Fox Studios Paramount Studios The Burbank Studios (former NBCU Burbank)

Owner The Walt Disney Company News Corp Fox / Viacom Worthe Real Estate Group

Size 44-acre main lot in Burbank 53-acre lot in Century City 56-acre lot in Hollywood 35-acre lot in Burbank

Sound Stages 7 (11,000 – 31,200 SF) + 1 backlot 15 (14,076 – 28,274 SF) + 3 backlots 29 (5,587 – 18,879 SF) + 9 backlots 8 (2,907 – 18,079 SF)

Screening Rooms 8 7 7 1

Features • Four-wall service facility

• Post-production and digital services





• Over 800,000 SF of office space

• Full-service TV facility

• Digital services/Audience rated/HD-ready

• Frank Gehry designed concept for

additional production offices and

soundstages


Studio Market Landscape – Minor

MBS Media Campus (former Manhattan Beach Studios) Hollywood Center Studios (former Zoetrope Studios) The Lot (formerly Warner Brothers)

Owner Carlyle Group Singer Family CIM Group

Size 22.6-acre lot in Manhattan Beach 18 acres 11.2 acres

Sound Stages 14 (10,058 – 25,350 SF) 11 (4,399 – 18,915 SF) 7 (8,120 – 13,335 SF)

Screening Rooms 2 N/A 2

Features • Full-service and four wall service facility

• One post-production room, the “Blue Room”

• Full service facility

• New parking structure

• Bungalow production office space

• Four-wall service facility

• New 95,000 SF office building delivered 1Q

2014 – 100% leased

• Phase II planned including 100,000 new office building

Sunset Gower Studios Sunset Bronson Studios Los Angeles Center Studios

Owner Hudson Pacific Properties Hudson Pacific Properties Bristol Group

Size 15.6 acres 10.56 acres 20-acre lot in Downtown L.A.

Sound Stages 12 (4,990 – 17,559 SF) 11 (5,600 – 20,189 SF) 6 (18,000 SF) + backlot locations

Screening Rooms 1 N/A 2

Features • Four-wall service facility

• Technicolor’s worldwide Headquarters

– 114,000 SF post facility built in 2009


• Home of KTLA (Channel 5 – Los Angeles)

• Expansion planned including over 400,000 SF of creative

and production office buildings and a new parking garage


• No post-production services

• 450,000 SF of additional production space in 12-story

tower (former UNOCAL HQ)


Project Budget


223,540 SF build-to-suit, 8-story office building

Conceptual Project Cost

Cost Estimates

8-Story

Office Building

(223,540 SF)

Per

Square Foot

Soft Costs $13,881,509 $62

Hard Costs $78,605,990 $352

Contingency $10,883,122 $49

Development Advisory Fee $4,788,574 $21

Consideration for Long

Term Parking Rights (1) $20,929,481 $94

Total $129,088,676 $577

Notes:

(1) The $20.9 million in the construction budget provides the owner with parking rights to the adjacent Overland Parking Garage during SPE’s initial lease term plus option

periods. Please note the long-term Parking Rights Agreement/Easement will run coterminous with the full term of the ground lease.

(2) It is expected that SPE will additionally invest $17.0 million into this Project in the form of FF&E: furniture, technology and equipment.

(3) Total Project Cost includes Tenant Improvements.


Timeline


Construction of the new building is anticipated to commence 1st Quarter 2015. Completion of the Project and occupancy is estimated to

be no later than 3rd Quarter 2016.

Project Timeline

Predevelopment Activities & Procurement of Materials Q2, 2014 through Q4, 2014

Construction Commencement & Demolition Q4, 2014

Site Improvements Q4, 2014 through Q1, 2016

Core & Shell Construction Q4, 2014 through Q3, 2015

Interior Build Out Q3, 2015 through Q2, 2016

Punch List Items & Completion Q2, 2016 through Q3, 2016

Occupancy Q3 2016


Bid Request


Bid Request

1. Please respond to the information requests detailed in the Formal Request For Proposal on Page 29

2. Areas of particular interest include:

Interest as Developer

― At Risk Completion Guarantee (Guaranteed Maximum Price)

― Fee Development (Open Book)

― Flexibility to partner with SPE in the design process to ensure SPE gets the building it

wants

Ability to be a Long-term Owner on a ground lease basis

Ability to set a lease constant and rental rate upon Project award

Understanding your access to Equity

Describe how you plan to use Debt

Understand your investment approval process

This Request for Proposal is not intended as, and does not constitute, a binding agreement, but is merely intended to specify some of the proposed terms and conditions of the

transaction contemplated herein. Neither party may claim any legal right against the other party by reason of signing this Request for Proposal nor by taking any action in reliance

thereon. Each party hereto fully understands that no party shall have any legal obligations to the other, or with respect to the proposed transaction, unless or until all of the terms and

conditions of the proposed transaction have been negotiated, agreed to by all parties and set forth in the lease which has been signed and delivered to both parties. It is expected that

each party will conduct their own independent due diligence, projections and conclusions concerning the proposed transaction.


Bid Request Timeline

Distribute NDA to Market Monday, April 14, 2014

Distribute Offering to Market Monday, April 21, 2014

Responses Due Friday, May 2, 2014

SPE Decision on Capital Approach Monday, May 5 – Friday, May 9, 2014

Conduct Developer / Landlord Interviews Monday, May 12 – Friday, May 16, 2014

Best & Final Offers Monday, May 19 – Friday, May 30, 2014

Select Development Approach / Capital Monday, June 2 – Friday, June 6, 2014

Negotiate Transaction Documents Monday, June 9 – Friday, June 27, 2014


Formal Request For Proposal


Section I: Bidder Overview

Request for Proposal Questions

Company Name:

Entity Type: Examples would include: developer, general contractor, short-term ownership, or long-term take out owner

Company History: Brief overview of the bidder’s experience with similar projects in terms of scale, size, Tenant type, etc.

State of Incorporation: State and country within which you and your ultimate parent company are registered

Primary Contact: Project leader, their length of service at the company and related experience in the industry

Contact Address: Include for bidder’s headquarters, local office and project leader

Contact Phone #: Include for bidder’s headquarters, local office and project leader

Key Company Officers: Directors and key officers of bidder’s company, their length of service at the company and related experience in the industry.

Significant Shareholders: List of significant equity owners (50% or more if privately held; 5% or more if publicly listed)

Organizational Structure: Description of bidder’s organizational structure, focusing specifically on those who would interface with SPE, including the team members’ résumés.

Corporate Structure: Description of bidder’s corporate structure, focusing specifically on contractual entities that would be responsible for any aspect of the work in this

Project and how those entities contractually interface with each other.

Current Projects: Identify any current or pending projects within the Los Angeles metropolitan area that could conflict or compete with this Project

Conflicts of Interest: List any known actual or potential conflicts of interest your company could have if it is chosen for the Project and associated matters contemplated in

this RFP. Please include a detailed proposal how you would manage the specific known conflicts, and a general proposal for the management of

currently unidentified conflicts as they might arise.

References: Provide contact information for two (2) references for this service, who JLL and SPE may contact, including the Company Name, Contact Name,

Contact Phone #, and Contact Address for each of the two (2) contacts.

Please provide the following bidder information:


Section II: Proposal to Develop the Project

Request for Proposal Questions (cont.)

Development Role: Define precisely the role that the bidder anticipates taking in the overall scope of the Project. Please list any significant partnerships, joint ventures, 3rd

party dependencies, outsourcing or subcontracting which may be involved in bidder’s solution relative to this specific request or the transaction

contemplated hereunder.

Additionally, please indicate whether or not you anticipate owning and leasing the facility to SPE at the end of the construction period. If so, please

respond to the questions in Section III.

Project Size: Provide evidence of the company’s ability to take on a project of this size and scope.

Development Process: Please describe the development process and best practices you follow when implementing a project of this scale and complexity.

Project Schedule: Please provide a timeline to complete services within the estimated Project delivery date and affirm willingness and method to guarantee Project

delivery within the expected timeframe.

Cost: Please comment on the Project Budget including our cost itemization, any scope adjustments you may recommend, and any and all general contractor

and development fees.

Open Book: Please confirm your willingness to work on an open book basis. Consequently, we also request that you quote the Lease Constant which will be

applied against the capitalized cost of the Project to calculate the net rent.

Financing: Clarify financing source including ability to self-finance.

Project Team: Provide the number of people that will be assigned to this Project and what percentage of their time is dedicated to the proposed Project.

Company Strengths: Describe the strategic advantages of your company and the team members relative to this specific assignment.

Experience: Describe relevant experience with transactions similar to the Project.

Guaranteed Maximum Price: Please confirm that the Owner agrees to provide a guaranteed maximum price contract at a mutually agreeable point as project scope is defined and

construction documents are developed.

Purchase Option: SPE would like to have rights to purchase the building at a later date. Please describe what rights you would be willing to provide.

Other: Please list any and all other outstanding factors that will impact this transaction.

Please provide the following as it relates to the development of the Project:


Section III: Proposal to Purchase, Own and Lease the Project

Request for Proposal Questions (cont.)

Ownership Role: Define precisely the role that the bidder anticipates taking in the overall scope of the Project and the proposed ownership structure.

Ownership Entity: Clarify the entity that will own the building and the country of residence of the entity's principals.

Ownership Structure: Please describe the ownership structure (joint venture, other significant owner relationships) and identify any equity or preferred investors that will have

more than a 5% stake in the asset.

Financing / Lender

Relationships:

Please outline the anticipated source of investment capital, including equity, primary debt, mezzanine financing. Please provide the amount of such

debt and the order of seniority of each debt instrument. If self-financing, please provide sufficient detail regarding ability to do so.

Project Cost: JLL will provide all bidders with a model for the site work, new building(s) core and shell scope and interior tenant improvements of the buildings for the

Project. Investor/owner candidates should address these outline documents as they relate to the budget and the Tenant’s goals and objectives.

Ground Lease: Discuss your ability and interest to enter into a long-term, structural, ground lease with nominal ground rent. Rent will adjust to FMV if SPE vacates.

Closing Date / Lease

Commencement:

Closing date and lease commencement date shall be 3rd Quarter 2016. Bidder should describe in details their firm’s internal approval process through

Closing (including committee approvals, contingencies, etc.)

Absolute NNN Lease Term: Please propose 15 and 20 year lease terms. All other terms and conditions shall be absolute NNN lease.

Rental Rate: Please state the most aggressive Lease Constant that you would apply to the Project Cost and a rental schedule.

Rent Commencement: Assume rent commencement begins the earlier of (i) 3rd Quarter 2016 or (ii) upon substantial completion.

Security Deposit: Tenant will not be providing any security deposits.

Renewal Option: SPE requires three (3) or four (4) [depending on the primary term], five (5) year options to renew at a fixed rental rate immediately following the initial

lease term.

Roof & Structure: SPE, at its own expense, will be responsible for repair and replacement of roof and structure for the term of the improvement’s lease.

Sublease / Assignment: SPE shall have the right to assign or sublease the premises with Landlord’s prior written consent which consent shall not be unreasonably withheld.

Landlord will not be entitled to participation in sublease profits. SPE shall have the right, at its option and discretion, without the consent of Landlord, to

assign or sublease the premises to any of its affiliates.

Other: Please detail any and all other outstanding issues that may impact this Project.

Please provide the following as it relates to the ownership of the Project on a ground lease basis:

Confidential and proprietary Sony Pictures Entertainment Inc.

Primary Contacts

RFP & Transaction Structure Local Market & Entertainment Industry

Bruce Westwood-Booth

Managing Director

+1 312 228 2966

[email protected]

Robert Dmytryk

Managing Director

+1 858 410 1211

[email protected]

Rob Bickel

Managing Director

+1 213 239 6141

[email protected]

Carl Muhlstein

Managing Director

+1 213 239 6055

[email protected]

We are available to address any questions or concerns you may have. Please contact any JLL representative listed below at your convenience.