Pleasanton, California

Retail Market Report

4th Quarter 2010

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

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Activity is Up, Vacancy Declines

Pleasanton Continues to See Healthy GrowthThroughout the year an obvious trend emerged: slow and steady growth. Another quarter of positive absorption brought the Pleasanton market back to around pre-recession levels. Lease rates continue to be depressed but we expect that to be the new “normal”. Further signs of improvement include the development of Gateway Pleasanton on Bernal Road at I-680.

Main Street continued to be the center of activity. 234 Main Street was sold to the group of developers behind the Tully’s and Stacey’s redevelopment. Construction will begin on the dilapidated building in early February. Fleet Feet Sports has signed a lease to occupy half of the 5,000 square foot building upon the completion of construction. The Domus building continues to sit vacant with no serious suitors but a whirlwind of rumors continues. A sushi restaurant has signed a lease for the very hidden space on Division Street across from Downtown Yoga and next to Yolatea.

Pleasanton Gateway will be anchored by a flagship Safeway store. In total the new project will offer about 130,000 square feet of prime retail space. This project is about the same size as Waterford shopping center in Dublin. Neighboring this develop-ment site will be an office plaza consisting of 600,000 square feet of new space.

With Dublin moving forward on the Fallon Gateway project and Livermore sched-uled to break ground at the Prime Outlet site as of April 1, 2011, what about Staples Ranch? Hendrick’s has no plans to start construction until the Auto Industry levels out. Stoneridge Creek, a retirement community consisting of 637 units, will break ground before summer.

The activity barometer suggests a continued resurge of the market. With a couple large vacancies still awaiting tenants, chances are we will see further improvement in overall vacancy through Q1 and Q2 of 2011.

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.

Retail Strip Center: 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 Main 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.

10.86%

6.90%

Retail Strip Center

Downtown

Vancancy Rate by Product Type

11.75%

10.86%

6.90%

Grocery Anchored

Retail Strip Center

Downtown

Vancancy Rate by Product Type

Tenant/Buyer Location Square FeetPet Food Express 1737 Santa Rita Rd. 5,500Fleet Feet Sports 234 Main Street 2,400Parrot Cellular 4555 Hopyard Rd. 1,800Maui Wowi 4833 Hopyard Rd. 1,400

Grocery Anchored Inventory: 1,295,686Grocery Anchored Availability: 152,301Grocery Anchored Vacancy Rate: 11.75%

Retail Strip Inventory: 585,821Retail Strip Availability: 63,649Retail Strip Vacancy Rate: 10.86%

Downtown Retail Inventory: 402,860Downtown Retail Availability: 27,786Downtown Retail Vacancy Rate: 6.90%

Pleasanton Retail Inventory: 2,284,367Pleasanton Retail Availability: 243,736Pleasanton Retail Absorption: + 13,984Pleasanton Retail Vacancy Rate: 10.67%

Lee & Associates Pleasanton Retail Market Report

QUARTER IN REVIEW

Pleasanton Retail Vacancy and Rental Rates

Exclusive Lee Listings

2

4th Quarter 2010

Lee & Associates - Your Commercial Real Estate Connection

Tri-Valley Vacancy ReportVacancy Rate vs. Average Asking Rate

Available For Lease2,240± Square Feet

511 Main Street

Available For Lease13,516± Square FeetBernal Retail Center

Available For Lease3,000± Square Feet3724 Stanley Blvd.

12.20%

11.28%

10.67%

10.50%

11.00%

11.50%

12.00%

12.50%

$1.00

$1.50

$2.00

$2.50

$3.00

Vacancy

Average Asking Rate (NNN)

12.20%

11.28%

10.67%

9.50%

10.00%

10.50%

11.00%

11.50%

12.00%

12.50%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2Q10 3Q10

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

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.

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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.