Livermore, California

Retail Market Report

4th Quarter 2010

Grocery Anchored Inventory: 1,232,658Grocery Anchored Availability: 202,564Grocery Anchored Vacancy Rate: 16.43%

Non-Grocery Retail Inventory: 681,664Non-Grocery Retail Availability: 84,267Non-Grocery Vacancy Rate: 12.36%

Downtown Retail Inventory: 432,758Downtown Retail Availability: 54,646Downtown Retail Vacancy Rate: 12.63%

Livermore Retail Inventory: 2,347,080Livermore Retail Availability: 341,477Livermore Retail Absorption: + 15,691Livermore Retail Vacancy Rate: 14.55%

Lee & Associates maintains an up-to-date database of all available properties and sold/leased properties.

For more local commercial real estate news, insight, and gossip visit me at www.thestorefront.wordpress.com

Treading Water or Moving Forward?

Livermore’s Retail Market Shows Mixed SignalsThe fourth quarter marked another period of positive absorption, albeit minimal. Despite a few new leases signed, there seems to be little to no activity for space over three thousand square feet. The lack of any large retailers having interest, despite dis-counted lease rates is concerning. Livermore has yet to gain the momentum that our neighboring cities have. In spite of this, Livermore continues to slowly chug along.

Is this stale pattern going to continue? The optimistic side of me says no. Developers are back out in the market, drawing plans, and pushing forward with stalled projects. The Prime Outlet was supposed to break ground April of last year. The 550,000 square foot high-end outlet center is once again scheduled for an April ground breaking. The city of Livermore began looking for a developer for the high density residential project to accompany the Regional Theater project. As for the 2,000-seat performing arts theater, financing options have come available and the group behind the project is proactively looking for donors.

As predicted, the fourth quarter vacancy rates did show slight improvement. That said, there are no hard indicators pointing towards an upswing of activity in the near future. In order to capture the retailers to back-fill the large spaces left open (i.e. the former Mervyn’s, PW Market, and Prestige Furniture) and to push continued develop-ment (i.e. Groth Bros. site), Livermore will need to attract additional large employers. Without local jobs and local consumers spending money at the local level, the confi-dence for larger retailers to open shop will not exist. I remain optimistic, the summer of 2011 could be the turning point. Perhaps the construction scheduled to begin early this year will cause a domino effect in retail development and leasing.

Recent Transactions

MARKET SNAPSHOT

VACANCY RATE BY PRODUCT TYPE

KEY TERMS & DEFINITIONSInventory: Total square footage of retail space in the market

Availability: Square footage that is marketed for lease which is available within 90 days. This also includes sublease space.

Absorption: The change in availability from the previous quarter.

Vacancy: The percent of available space based on the total inventory.

Grocery Anchored: Shopping centers characterized by a grocery anchor such as Safeway, Trader Joe’s, Lucky, or Nob Hill. These centers are often more sought after and fetch a higher lease rate.

Non-Grocery Anchored: Shopping centers, strip retail centers, and buildings over 10,000 square feet that do not have a grocery anchor.

Downtown Retail: Storefront buildings & centers located along 1st Street and the downtown core.

Triple Net Expenses (NNN): A lease agreement where the Tenant is responsible for their proportionate share of taxes, insurance, maintenance and building repairs. Triple Net Expenses are in addition to base rent.

12.36%

12.63%

Retail Strip Center

Downtown

Vacancy Rate by Product Type

16.34%

12.36%

12.63%

Grocery Anchored

Retail Strip Center

Downtown

Vacancy Rate by Product Type

Tenant Location Square FeetDenny’s Cafe 2259 Las Positas Road 3,600Downtown Dental 2300 1st Street 1,500Casbah Cafe* 1717 1st Street 1,400OrgHipChick 2075 1st Street 600* - Jessica Stewart of Lee & Associates represented Lessee in transaction

Lee & Associates Livermore Retail Market Report

QUARTER IN REVIEW

Livermore Retail Vacancy and Rental Rates

Exclusive Lee Listings

2

4th Quarter 2010

Lee & Associates - Your Retail Connection

Tri-Valley Vacancy ReportVacancy Rate vs. Average Asking Rate

Since 1979, our seasoned, motivated shareholders and professionals have been offering comprehensive quality service nationally and locally in a pro-active manner. We develop customized solutions for all of your real estates needs through our market-to-market knowledge in all property types. Our unique business model and extensive experience has helped us become one of the largest commercial real estate providers in the United States.

Services Offered:

Market Value Analysis Building Optimization Investment Sales Site Search Landlord Representatio n Tenant Representation

Retail - Office - Industrial

FOR SALE3,000± Square Feet Available

260 N. “L” Street

FOR LEASE2,290± Square Feet Available

39 S. Livermore Avenue

FOR LEASE600± Square Feet Available

2074 1st Street

15.00%

15.22%

14.55% 14.60%

14.80%

15.00%

15.20%

15.40%

$1.00

$1.50

$2.00

$2.50

$3.00

Vacancy

Average Asking Rate (NNN)

15.00%

15.22%

14.55%

14.20%

14.40%

14.60%

14.80%

15.00%

15.20%

15.40%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2Q10 3Q10 4Q10

Vacancy

Average Asking Rate (NNN)

5 00%7.00%9.00%11.00%13.00%15.00%17.00%19.00%21.00%

4Q10

3Q10

2Q105.00%7.00%9.00%11.00%13.00%15.00%17.00%19.00%21.00%

4Q10

3Q10

2Q10

RETAIL OFFICE INDUSTRIAL

Jessica Stewart Retail Specialist

* The property information/detail contained herein has been provided by the seller/lessor or has been obtained from other sources believed to be reliable, and Lee & Associates - East Bay, Inc. has not independently verified such information’s accuracy. Lee & Associates - East Bay, Inc. makes no representations, guarantees, or express or implied warranties of any kind regarding the accuracy or completeness of the information provided herein nor the condition of the property and expressly disclaims all such warranties, including but not limited to the implied warranty of suitability and fitness for a particular purpose. Buyer/Lessee should perform its own due diligence regarding the accuracy of the information upon which buyer/lessee relies when entering into any transaction with seller/lessor herein. Further, the information provided herein, including any sale/lease terms, are being provided subject to errors, omissions, changes of price or conditions, prior sale or lease, and withdrawal without notice.* CoStar sourced for portion of market data

5890 Stoneridge Drive, Suite 210Pleasanton, CA 94588(925) 460-6200(925) 460-6210www.lee-associates.com

Jessica is experienced in both Tenant and Landlord representation and has been active in the Easy Bay commercial real estate market since 2006. Prior to joining Lee & Associates in 2009, Jessica worked for Aegis Realty Partners in Oakland. As a retail specialist, she has worked with a number or local restaurants, retailers, and landlords in sales and leasing of shopping centers and storefronts.For the most up to date market information follow Jessica on her blog www.TheStrorefront.wordpress.com.

LEASEd!