NXT 50_RFP_BHFS_5.29.19_Link

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CONFIDENTIAL MARKET DISCUSSION PREPARED FOR

MS. BARBARA A. MICA Chief Operating Officer MS. TINA DIETZMANN Director of Office Operations

PREPARED BY

LEGAL SECTOR ADVISORY GROUP

MAY 2019

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

“perhaps she won’t lean left or right but only move forward”

INTRODUCTION

Business,

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

To our friends at Brownstein Hyatt Farber Schreck, LLP (Brownstein), Cushman & Wakefield (C&W) is thrilled to have this opportunity to offer our professional commercial real estate services platform to Brownstein. Our firms have a long history of work together, including C&W completing transactions for Brownstein offices in Albuquerque, Denver, Las Vegas, Los Angeles, Phoenix, Sacramento, San Diego and Santa Barbara. This relationship between our firms provides enhanced understanding and cultural alignment ensuring the success of a more formal arrangement now. Brownstein competes on a national scale with over 50 years of extraordinary success and influence in all aspects of the business, legal and political communities in which they practice. Brownstein can look back with tremendous pride and appreciation - but only for a moment, as the future is upon us. Our firm, and our team of professionals, aim to assist Brownstein in managing the present with precision and efficiency while providing Brownstein with a perspective for the future shaped by constant evaluation, observation and assessment of what comes next in legal services real estate utilization. Collectively, we are focused on your firm’s next 50 years – a mission called NXT50.

A.1. A.2. A.3. A.4. A.5. A.6. A.7. A.8. A.9.

Cushman & Wakefield Overview

Legal Sector Philosophy

Market Presence and Coverage for Brownstein Cushman & Wakefield Commitment to Diversity

Law Firm References

Business Referrals to Brownstein Conflicts – Identify, Disclose & Mitigate

Distinguished Culture

Extraordinary Services make Extraordinary Deals

B.1.

About the Cushman & Wakefield Team

B.2. B.3.

Team Leadership Details Team Specialists Details

CONTENTS C.1.

Denver HQ Timeline – The Most Important Vision for NXT50 Portfolio – Assessment, Management and Reporting Facility Plan Development & Financial Assessment

C.2. C.3. C.4. C.5.

Thank you for your consideration of our responses to the Brownstein Request for Proposal contained herein.

The Project Management Process

Negotiations Strategy

Best Regards,

D.1.

Subleasing, Exit Strategy and Mark-to-Market

D.2. D.3. D.4.

Sublease Negotiations and Revenue

Agreement Preparation

Compensation

E.1.

Fee Proposal

E.2. E.3. E.4. E.5.

Travel and Expenses Scope of Services

Todd M. Wheeler Vice Chairman

Performance Measurement

Brownstein Engagement and Resources

This is a comprehensive and confidential market dicussion guide prepared for Brownstein Hyatt Farber Schreck

law and politics for the next 50 years.

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

RESPONSE TO SECT ION A

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for A.1.

Background Information Cushman & Wakefield (C&W) is a 101-year-old leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Our 51,000 employees in approximately 400 offices help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $8.2 billion across core services of Tenant Representation, Agency Leasing, Asset Services, Capital Markets, Facility services, global occupier services, investment & asset management, project & Development Services and Valuation & Advisory.

Ownership Structure In September of 2018, Cushman & Wakefield became publicly listed on the New York Stock Exchange under the ticker CWK and is currently over 50% owned by a group of principal shareholders that include TPG, OTPP, and PAG. Over the past several

years Cushman & Wakefield has evolved through a series of strategic mergers and acquisitions, but this is not growth for the sake of growth. Every move Cushman & Wakefield has made is with an eye to our clients, strategically selecting the talent and resources that will make our partnerships even better. Simply stated, our clients come first and everything we do focuses on providing the best possible advisory services. The recent IPO was integral to expanding Cushman & Wakefield’s footprint, creating efficiencies, growth, and additional resources for our clients. In a business climate that demands specialization, C&W’s Industry and Specialty Advisory Groups (a total of twenty groups) are a key differentiator from our competition. Please note the above chart and the extensive number of Specialty Advisory Groups that C&W has strategically built to provide expert advisors to our clients in every major industry type. Our Legal Sector Advisory Group (LSAG) is one of our strongest advisory groups-- having been ranked #1 by the National Law Journal for the past five years in Tenant Representation , a true testament to our success in representing law firms throughout the U.S. and around the world.

3.6B SF MANAGED

51,000 EMPLOYEES

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

OUR PHILOSOPHY FOR SERVING LAW FIRM CLIENTS?

Response for A.2.

C&W created and invested heavily in the best Legal Sector Advisory Group in the industry. Constantly studying, asking questions, listening and organizing the information for our clients to consider in their business.

LEGAL SECTOR PHILOSOPHY

Relevant Experience In the last five (5) years, members of C&W’s LSAG have provided strategic real estate advisory services to over 60% of the AM Law 100 firms on one-off transactions, preferred vendor, or on a national/global account basis. Additionally, this table outlines C&W’s active law firm clients for global and national portfolios including the total rentable square feet of transactions or portfolio size as well as the type of service that C&W provides to these clients.

Firm

Rentable Square Feet (RSF) Service

Squire Patton Boggs

1,200,000

Global Account (50 Offices)

King & Spalding

1,100,000

Global Account (23 Offices)

Clyde & Co

800,000

Global Account (48 Offices)

Borden Ladner Gervais LLP

750,000

Canada - National Account (8 Offices)

Vinson & Elkins LLP

700,000

Preferred Provider (4 Transactions completed)

Eversheds

685,000

Global Account (24 Offices)

Kilpatrick Townsend & Stockton LLP

650,000

Global Account (14 Offices)

Ballard Spahr LLP

600,000

National Account (16 Offices)

Pepper Hamilton LLP

600,000

National Account (13 Offices)

Freshfields

530,000

Global Preferred Provider (10 Transactions completed)

DLA Piper

500,000+

Global Preferred Provider (8 Transactions completed)

Kelley Drye & Warren LLP

500,000

National Account (9 Offices)

Milbank, Tweed, Hadley & McCloy LLP

500,000

Global Account (12 Offices)

Saul Ewing Arnstein & Lehr LLP

415,000

National Account (15 Offices)

Stoel Rives LLP

360,000

National Account (12 Offices)

Bracewell LLP

300,000

National Account (8 Offices)

Alston & Bird LLP

250,000

National Preferred Provider (3 Offices)

BROWNSTEIN BENEFIT We know firms your size and those you intend to outgrow

Dinsmore & Shohl LLP

165,000

National Account (3 Transactions completed)

Best, Best, & Krieger LLP

153,000

National Account (12 Offices)

Hanson Bridgett LLP

150,000

National Preferred Provider (4 Transactions completed)

Wolf Greenfield & Sacks P.C.

115,000

National Account (3 Offices)

Merchant & Gould P.C.

100,000

National Account (9 Offices)

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

Response for A.2.

LEGAL SECTOR PHILOSOPHY

WHY THEY CAME

WHY THEY STAYED

Percentage of gross revenues spent on real estate last year

Cushman & Wakefield’s Legal Sector Advisory Group C&W’s Legal Sector Advisory Group, led by Brownstein Core Team member and Executive Managing Director, Sherry Cushman, is composed of over 350 tenant real estate advisors from across the globe that specialize in creating and implementing real estate solutions for one-off, regional, national and global law firms. In fact, over the past five (5) years, C&W has represented transactions for over 60%

RECRUITING

of AM Law 100 firms. In today’s competitive marketplace, by bringing together real estate advisors that understand the unique characteristics of the legal sector, C&W is able to provide Brownstein with creative, forward-thinking strategies to achieve the most flexible, operationally efficient, and cost-effective real estate solutions for its real estate portfolio – including attorney consensus building which is a tremendous “add-value” service to our law firm clients wanting to affect long-term change. LSAG has developed several proprietary processes specifically for the legal sector, including the National Legal Sector Benchmark Survey, National Associate Survey, and a customized Vision Session. The results of the National Legal Sector Benchmark Survey and National Associate Survey, combined with confidential partner and associate surveys that will be conducted for Brownstein and will provide the firm with cutting-edge statistics and insights that are not only specific to the firm, but also benchmarked against Brownstein’s competition and the industry as a whole. Our exclusive Vision Session, which integrates C&W’s proprietary metrics and thought leadership will also help build consensus among key firm decision makers and will support Brownstein in achieving both its short- and long-term business, financial, and operational goals.

Current issues related to business competition Respondents chose multiple options

For the first time, recruitment and retention took the #1 spot

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

Key

Response for A.3.

% OF PORTFOLIO

BROWNSTEIN OFFICE DATA

CUSHMAN &WAKEFIELD OFFICE DATA

MARKET PRESENCE AND COVERAGE FOR BROWNSTEIN

0.4% PORTFOLIO

CARSON CITY Number of Attorneys Session Only Size 1,030 RSF

1.2% PORTFOLIO

RENO Number of Attorneys 7

54.5% PORTFOLIO

DENVER Number of Attorneys 141

Size 2,801 RSF

Best Market Field Broker

Size 130,059 RSF

11.4% PORTFOLIO

LAS VEGAS Number of Attorneys 34

C&W Employees 165

Years 45

Strength 10

2.0% PORTFOLIO

SACRAMENTO Number of Attorneys 3

Size 27,162 RSF

C&W Employees 55

Years 35

Strength 9

Size 4,773 RSF

C&W Employees 40

Years 25

Strength 10

5.7% PORTFOLIO

SANTA BARBARA Number of Attorneys 16 Size 13,508 RSF

1.3% PORTFOLIO

ATLANTIC CITY Number of Attorneys 3 Size 3,030 RSF

Best Market Field Broker

2.1% PORTFOLIO

ALBUQUERQUE Number of Attorneys 5 Size 4,907 RSF

C&W Employees 21

Years 60

Strength 8

6.3% PORTFOLIO

LOS ANGELES Number of Attorneys 8

Best Market Field Broker

13.0% PORTFOLIO

WASHINGTON, D.C. Number of Attorneys 43 Size 31,018 RSF

Size 11,152 RSF

C&W Employees 450

Years 50

Strength 10

1.8% PORTFOLIO

SAN DIEGO Number of Attorneys 2

C&W Employees 380

Years 70

Strength 10

Size 4,350 RSF

0.4% PORTFOLIO

ORANGE COUNTY Number of Attorneys 1 Size 884 RSF

C&W Employees 55

Years 30

Strength 9

C&W Employees 30

Years 30

Strength 9

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Responses for A.4. A.5. CUSHMAN & WAKEFIELD COMMITMENT TO DIVERSITY

At C&W, we are committed to fostering, cultivating, and preserving a culture of diversity and inclusion. C&W attracts, develops, and retains a diverse, talented, creative, and innovative workforce by fostering an environment that is inclusive at all levels and where each individual feels welcomed, valued, respected, and inspired to contribute to the success of our firm, its business partners, and the global community. Inclusion is a business philosophy and a way of managing and behaving that is embedded in everything we do. In fact, C&Wwas just recently named one of America’s Best Employers for Diversity 2019 by Forbes. As a people and ideas company, our people are at the very heart of our business strategy—and diversity is critical to attracting and retaining the best people. At C&Wwe believe diverse teams and diverse perspectives lead to better outcomes and breakthrough thinking, which are differentiators in any services business, and clearly fundamental to our long-term success. C&W embraces and encourages its employees’ differences in age, color, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique because we know that our human capital is the most valuable asset we have. WIN (Women’s Integrated Network) C&W created our Women’s Integrated Network (or “WIN”) to help develop and support the talents of our female team members, so they continue to have a meaningful impact on the firm’s performance. With over 2,400 members across 40 cities worldwide, C&W is committed to expanding opportunities for women in the field of commercial real estate. Sherry Cushman, Brownstein Core Team member, served as a member of WIN’s first Advisory Board which developed the initiative’s foundation, including its mission. In addition, Sherry served as Co-Chair of the Recruitment Initiative which developed a program at the high school / college, mid-career, and senior levels for women who are considering real estate as a profession and how C&W can attract talent to the industry and the company.

For the past three years, WIN has partnered with LSAG to host C&W’s premier event, Women in Law, that brings together a panel of highly successful law firm and in-house counsel leaders to share their experiences and insights on taking charge and succeeding in the legal industry. Now in its third year, Women in Law has proven to be a great success in New York City, Chicago, Washington, D.C. and plans are in place to expand the program to San Francisco and Boston in 2019. The event draws in crowds of over 150 attendees and proves to be a great networking opportunity that results in lasting relationships for both panelists and attendees. CLICK HERE FOR WOMEN IN LAW VIDEO .

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

Response for A.5.

LAW FIRM REFERENCES

Members of the Brownstein Core Team have had the honor of representing many national and global law firms either as an Exclusive or Preferred Provider. The below references represent select references represented by members of the Brownstein Core Team that can speak directly to the level and quality of services delivered by the Core Team members.

REFERENCES

PORTFOLIO-WIDE REPRESENTATION

LOCAL REPRESENTATION

Jennifer K. Peterson Executive Partner & COO Centre Square West 1500 Market Street, 38th Floor Philadelphia, PA 19102-2186 215-972-7070 jennifer.peterson@saul.com Lynn Pierce Chief of Real Estate and Firmwide Office Operations/Facilities

Gary Dacey Chief Operating Officer 1100 Peachtree Street NE, Suite 2800 Atlanta, GA 30309 404-815-6279 gdacey@kilpatricktownsend.com Cole Finegan, Regional Managing Partner 303-454-2583 cole.finegan@hoganlovells.com Craig Umbaugh, Partner 303-899-7379 craig.umbaugh@hoganlovells.com

1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 215-864-8288 piercel@ballardspahr.com Susan Zaffiro Director of Real Estate 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 215-981-4662 zaffiros@pepperlaw.com

Jim Johnson, Shareholder 303-575-7596 jjohnson@ottenjohnson.com Chris Toll, Shareholder 303-575-7528 ctoll@ottenjohnson.com

Tom Ragonetti, Shareholder 303-575-7509 tjr@ottenjohnson.com

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for A.6. BUSINESS REFERRALS TO BROWNSTEIN

“For decades – C&W has referred Brownstein business opportunities because YOU ARE GREAT LAWYERS . We have never and will NEVER make referral of business a condition of return business. That’s how we roll.”

REFERENCES

REAL ESTATE

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

Response for A.7.

CONFLICTS – IDENTIFY, DISCLOSE & MITIGATE

Conflicts, or the appearance of conflicts, are critical components of any business relationship, particularly in the professional services space. In commercial real estate advisory, conflicts arise in two areas – Landlords and Tenants. By virtue of our dominating market share advising both Landlords and Tenants, C&W must be extremely diligent in Identifying, Disclosing and Mitigating all potential conflicts to the satisfaction of the parties involved which makes C&W highly disciplined and practiced in protecting all our client’s interests.

IDENTIFY DISCLOSE MITIGATE

Landlord

Tenant

–– C&W will Identify, Disclose and the work to Mitigate any potential conflict between the interests of Brownstein and any other Tenant. These Tenants will be active in the Denver CBD Market.

250,000 RSF

80,000 RSF

120,000 RSF

–– Client for C&W and

70,000 RSF

80,000 RSF

100,000 RSF

110,000 RSF

Brownstein. A possible option for Brownstein.

160,000 RSF

150,000 RSF

75,000 RSF

150,000 RSF

110,000 RSF

300,000 RSF

70,000 RSF

100,000 RSF

140,000 RSF

165,000 RSF

70,000 RSF

170,000 RSF

100,000 RSF

70,000 RSF

2020

2021

2022

2023

2024

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for A.8. DISTINGUISHED CULTURE

The Cushman & Wakefield culture of disciplined practice groups led by experienced and creative deal makers allows us to achieve the greatest value possible from our client’s real estate spend. Additionally, we strive to deliver value and thought leadership to positively impact our client’s business well beyond great transaction and diligent management of portfolios. Our firm, and our team, is further aligned with the Brownstein culture because of the extensive experience and familiarity we have of the Brownstein culture and portfolio. Todd Wheeler has personally negotiated leases for Brownstein in the following markets: Albuquerque, Denver, Las Vegas, Los Angeles, Phoenix, Sacramento, San Diego and Santa Barbara. C&W has a culture of success!

RANKING TENANT

SIZE TENANT REP LANDLORD REP

Anadarko

295,000 SF

VF Corporation

285,333 SF

C&W DOMINATED THE BIG DEALS IN 2018

Vail Resorts Inc.

164,363 SF

Newmont Mining

142,464 SF

EXPERIENCED LEADERSHIP FOR CLIENTS

129,000 RSF

320,000 RSF

150,000 RSF

177,000 RSF

180,000 RSF

65,000 RSF

300,000 RSF

50,000 RSF

165,000 RSF

85,000 RSF

240,000 RSF

700,000 RSF

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

PROUD HISTORY OF ACCOMPLISHMENTS

Response for A.9.

Cushman & Wakefield is uniquely positioned to deliver all the commercial real estate services that Brownstein will ever need. As our review of the Brownstein portfolio commences in depth, we may discover any number of valuable services our firm can provide to enhance Brownstein’s portfolio value. We have organized a number of the services we know Brownstein will benefit from below performed on an Annual, Quarterly and Transactional basis. A scope of services and associated fees is itemized in Response E.3.

EXTRAORDINARY SERVICES

ANNUAL SERVICES

QUARTERLY SERVICES

TRANSACTIONAL SERVICES

• Lease Abstract/Administration Updates • Mark-to-Market Study • Real Estate Dashboard • Custom Metrics • Simple to Sophisticated Software • Office Utilization • Market Conditions Review

• Visioning Sessions • Needs Assessment • Consensus Building • Budgeting / Projections • Market Evaluations • Negotiations • Financial Analysis • Project Management • Standards Implementation • Ongoing Lease Audits

• Strategic Portfolio Review • Private Symposium for Brownstein • Five Year Capital Plan • Portfolio Lease Audits

SAMPLE 5 - YEAR CAPITAL EXPENSE PROJECTION

Lease Exp.

Current Size

Projected Size

Numberof Attorneys

Currentor ProjectedStatus

“All-in”LawFirm TransactionCosts

Providedby Landlord $175.00 /RSF ($7,087,500) $150.00 /RSF ($4,837,500)

TotalPotential Exposure

Location

2019

2020

2021

2022 2023

$225.00 /RSF ($9,112,500) $225.00 /RSF ($7,256,250) $5.00 /RSF ($198,750) $15.00 /RSF ($438,750) $225.00 /RSF ($6,750,000) $15.00 /RSF ($382,500) $225.00 /RSF ($11,283,750) $225.00 /RSF ($5,906,250) $275.00 /RSF ($8,868,750) $15.00 /RSF ($585,000) $15.00 /RSF ($551,250) $225.00 /RSF ($8,606,250) $15.00 /RSF ($438,750)

BocaRaton

54,670 40,500

Nov-2020

InProcess

$2,025,000

LeaseAbstract andCover Document

Washington, DC Jan-2020

47,054 32,250

InProcess

$2,418,750

$1,209,375 $1,209,375

MolaskyCorporateCenter

$5.00 /RSF ($198,750) $5.00 /RSF ($438,750)

Boston

52,432 39,750

Mar-2020

InProcess

BuildingDescription:

The Molasky Corporate Center is the first building in Las Vegas to be designed to achieve LEED Gold certification from the U.S. Green Building Council. This 17 story office tower sits atop a multi-level structured parking facility and is across the street from Union Park, a 61 acre, mixed use development currently in the planning stages. BHFS shares this property with the Southern Nevada Water Authority, Ballard Spahr Ingersoll Andrews, The Molasky Group of

Wilmington

41,317 29,250

Sep-2020

ProjectedRenewal

$175.00 /RSF ($5,250,000) $15.00 /RSF ($382,500) $175.00 /RSF ($7,743,750) $175.00 /RSF ($4,593,750) $175.00 /RSF ($5,643,750) $15.00 /RSF ($585,000) $15.00 /RSF ($551,250) $175.00 /RSF ($6,693,750) $15.00 /RSF ($438,750)

Chesterbrook*

42,704 30,000

Feb-2021

PossibleRelocation

Princeton*

63,750 25,500

Jun-2021

Monitor

(1)

Tenant:

BrownsteinHyatt Farber.

Landlord:

ParkwayCenter, LLC

Schreck, PC

ToddM.Wheeler 303-813-6441 303-223-1107 SpazioDesign 702-407-0974 AaronHyatt

Broker:

Keith Bassett 702-688-6930 Mark Fine, EOP 312-466-3803

Broker:

LeaseAbstract andCover Document

SaltLake City*

53,809 44,250

Jun-2022

(1)

$3,540,000

Attorney:

Architect:

Same

BuildingDescription:

Albuquerque Plaza

Pittsburgh*

27,036 26,250

Sep-2022

PossibleRelocation

$1,309,500

Unknown

Contractor:

Suzanne Sanders MolaskyGroup 702-735-0155

Contractor:

MeridianPlaza is strategically located in theheartofSacramento'sCentralBusiness District,withinwalkingdistance to theStateCapitolBuilding.Thispremieroffice building rises twelve stories from thegroundandprovides sweepingpanoramic viewsof theSierras,Sacramento's skylineand theCapitolDome. Amenities includingon-sitepropertymanagement,24-hour security, stateof the art fitness centerwith showerand locker facilities, cable readyaccess, legislative audioaccess,overnightexpress center, restaurant,on-siteparking. MeridianPlaza is located twoblocks from theStateCapitol LeaseAbstract andCover Document

New York*(3)

43,569 32,250

Mar-2023

PossibleRelocation

$3,225,000

BuildingDescription:

CriticalDates andNotices

Albuquerque Plaza is considered one of the premier projects in the state.This346,918 sfClassAOffice Tower that is part of a mixed-use project located in theDowntown core features aHyatt Hotel.This 89-percent-occupied project has a Tenants In Common ownership structure,which includes several local business families andmanaging partner andpropertymanager American PropertyManagement.American Property Management’sprimary focus is in the ownership and operations of hotels throughout the southwestern andWestCoast regions of

WestPalm Beach*

53,083 39,000

Apr-2023

Monitor/Renewal

ExecutionDate:

February7,2007; September29,2008 –3 rd

Amendment CommencementDate:

April1,2008;October1, 2008 –3 rd Amendment

ExpirationDate: CancellationDate:

March31,2018

410 17 th Street,Denver,Colorado 80202

Newark*

50,102 36,750

Jun-2023

Monitor/Renewal

N/A

ValleyView Investors

NoticeDate:

N/A

Landlord:

(916)388-2300

Tenant:

RenewalCommencementDate:

April1,2018

Greg Levi

BrownsteinHyatt Farber.

BuildingDescription:

Broker:

(916)447-6300

BrownsteinHyatt Farber

Chicago

48,862 38,250

Schreck, PC

Jan-2024

PossibleRelocation

$1,912,500

Broker:

Landlord:

TBD

Shreck, PC

ToddM.Wheeler 303-813-6441

Tenant:

Albuquerque PlazaOffice Investment, LLC

BHFS isheadquartered at41017th Street in downtown Denver, Colorado. The419,345 SF class B building offers average amenities in a downtown location.The propertywas developed byMarvinDavis in 1978.The current owner is CallahanCapital Partners ofChicago. Callahanwas foundedbyTimCallahan formerCEO of Trizec Properties, Inc. and owns2.8million sf of class B andAA office properties in theDenverCBD.The410 Building offersClass B+ office space in the high-rise portion of the building at a very good, uptown location. Tenants includeAdecco, Selero Energy,Volt Information

Attorney:

ToddM.Wheeler 303-813-6441

Attorney:

Broker:

Stafford Space Planning (916)652-3400

AaronHyatt

Broker:

AllegianceRealtyCorporation JeffWitak –704-927-7000

Architect:

AaronHyatt

Philadelphia

303-223-1107

40,654 29,250

Architect:

Sep-2024

Monitor/Renewal

Attorney:

TBD

303-223-1107

Unknown

Attorney:

Unknown

Contractor:

TBD

Contractor:

Architect:

Unknown

Architect:

Unknown

TBD

TOTALS:

619,042 443,250

591

$60,378,750

$44,440,000 $14,430,750 $1,209,375 $4,636,845 $3,540,000 $1,309,500$1,912,500

Contractor:

Unknown

CriticalDates andNotices

ExecutionDate:

LegalSectorAdvisoryGroup | ADVISING FOREXCELLENCE NOTES: *Basedon ratioof1attorneyper750 square feet,orbasedupon firm comments. (1)Potentialearly relocationdue to terminationoption. (2)Estimatesbasedon typicalmarketdeals. (3)Potentialgrowth/extension .

CommencementDate:

ExpirationDate:

March14,2005

April19,2011 July1,2011

CancellationOptionDate:

May1,2005 May31,2011

CriticalDates andNotices ExecutionDate:

NoticeDate:

September30,2016

RenewalOptionCommencementDate:

Waived in1 st Amendment

BrownsteinHyatt Farber

Landlord:

CallahanCapital Partners

Tenant:

CommencementDate:

N/A

NoticeDate:

ExpansionOptionDates:

(312)798-6010

Schreck, PC

ExpirationDate:

June1, 2011

ToddM.Wheeler 303-813-6441

Broker:

Kevin Foley

Broker:

May1,2010 –August31,2010

NoticeDate:

ContractionOptionDates:

(303)628-1700

None

Attorney:

AaronHyatt

Attorney:

TBD

N/A None

303-223-1107

TBD

Architect:

TBD

Architect:

TBD

Contractor:

TBD

Contractor:

CriticalDates andNotices

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for A.9. EXTRAORDINARY SERVICES

KEY SERVICES THAT DRIVETHENEEDLE FORBROWNSTEIN

Visioning

Market Evaluation

Best in Market Negotiators

4-TIME NAIOP TOP BROKER

WHAT DOES IT COST? V.2.0 1/22/18

BROWNSTEIN BASECASE and POTENTIAL OCCUPANCY ALTERNATIVES - Denver

Baseline /Basecase:May'18 -May'23 (61months)

LongTermOccupancyAlternatives:May'18 -Apr'33 (180months)

ANALYSIS OVERVIEW ($ IN MILLIONS)

BASECASE -Current+Expand 18th

ALT2:Relocate toBlock 162at Expiration (May'23)

ALT3:Terminate410 17th, Relocate (WFC)

BASELINE -Current

ALT 1:ExpandandStay at410 17th

PremisesSize (SF)

111,307SF

130,163SF

105,000SF

120,000SF

#ofAttorneys SF /Attorney

145 768

160 814

160 656

160 750

$ inMillions

TotalCostMetrics

NetPresentValue

$14.5

$17.4

$48.0

$55.7

$52.8

AnnuityEquivalent 1

$3.3

$3.9

$4.9

$5.7

$5.4

Capital and 1-TimeSpend 2

TotalRequiredBuildout andMove

$0.0

$0.8

$4.3

$18.5

$20.4

$0.0

$0.8

$4.3

$9.1

$11.4

Less: LandlordProvidedTenant Improvements

N/A

$3.7

Plus: TerminationFee

TotalCapital / 1-TimeOutOfPocket

$0.0

$9.5

$12.7

126mos term* <-132mos term* -> 165KSF

BROWNSTEINBASECASEandPOTENTIALOCCUPANCYALTERNATIVES -Denver $ inMillions ($'s inmillions)

[1]TotalNPVenables comparisonofequivalent length investments.Annuityequivalent converts totalNPV intoa seriesofannual cash flows therebyprovidingaway to compareprojects / scenarios ofunequal life.

FINANCIAL METRICS CHART

[2]Capitaland1-Time Items=Tenant ImprovementBuildoutPLUSMoveCostsPLUSTerminationFee (ifapplicable) LESSany LandlordProvidedTenant ImprovementAllowance

$60.0

$55.7

$52.8

$48.0

$45.0

TotalScenarioPre-TaxNPVCost

ScenarioCapitaland 1-TimeExpense- NetofTI(1)

$30.0

AnnuityEquivalent (2)

$17.4

$14.5

$15.0

$12.7

$9.5

[1]Capitaland 1-Time Items=Tenant ImprovementBuild-out PLUSMoveCostsPLUSTerminationFee (ifapplicable)LESS anyLandlordProvidedTenant ImprovementAllowance [2]TotalNPVenablescomparisonofequivalent length investments.Annuityequivalentconverts totalNPV into a seriesofannualcashflows therebyprovidingaway to compareprojects / scenarios ofunequal life.

$5.7

$5.4

$4.9

BROWNSTEIN BENEFIT Helping Brownstein Decide

$3.9

$3.3

$0.0

BASELINE -Current

BASECASE -Current+Expand 18th

ALT 1:Expand andStay at410 17th ALT 2:Relocate toBlock 162 atExpiration (May'23)

ALT 3:Terminate410 17th,Relocate (WFC)

<-------------------------------~5YearPeriod (May'18-May'23)----------------------------------->

<-----------------------------------------------------------15YearPeriod (May'18-Apr'33)------------------------------------------------------>

V1.0_1-18-18

BrownsteinHyattFarberSchreck | Cushman&Wakefield 12

If aplan toextend for 5-10 years,whatwould be the anticipated scope ofworkneeded?

Future Square Footage

Estimated Costof Work (PSF/ Total)

Estimatedout-of- pocket cost (without free rent credit)

Lease Expiration

SquareFeet (Total)

Subleased SF

Ageof Asset

Renovation condition and anyplan to vacate?

Landlord Provided Concessions

City

DRAFT _AlternativeComparison_ 1/25/2018 Page1

BocaRaton,FL 11/14/201 8

2,163

2,000 5 years Plan to vacate later this year

No extension

$10/$20,000 $0

BROWNSTEIN BENEFIT Helping Brownstein Act & Execute

Completebuild-out 13 years ago -willmost likely vacate Completebuild-out 10 years ago -opportunity todemise& surrender space (someCAPEX req’d) Completebuild-out 12 years ago -willmost likely vacate (CAPEX req’d) Completebuild-out 10 years ago Completebuild-out 13 years ago - renovation for densificationpurposesor possible vacate (CAPEX req’d) Oldbuilding –not conducive to lawfirmpractice,possible vacate (CAPEX req’d) Inplace renovation for densification (CAPEX req’d)

Extensionnot likely –plan tomove for locationpurposes

LINK TO FULL SAMPLE

$40-$50TI and6-12months free rent (relocation)

2 NewHaven,CT 2/28/2018 9,481

3,947

6,000 12 years

$100/$600,000

$330,000

Possible extension -needs cosmeticupgrade (paint, carpet)

$15TI and0-3months free rent (renewal)

$40/$328,000

$205,000

3 WestHartford,CT 2/28/2018 11,239

8,200 10 years

Capital Projections OperatingExpense Comparison Building

Extensionnot likely –plan tomove for locationpurposes

$180/ $4,500,000

$60-65TI and 10-12months free rent (relocation)

$2.94Million

4 Stamford,CT

3/31/2019 33,735

25,000 13 years

Brownstein Denver - 21 st Floor

$70TI and 7months free rent (10 year renewal);$35TI and3 months free rent (5 year renewal) $20-30TI and 2-3months free rent (5 year renewal);$40-50TI with5-7 freemonths rent (10 year renewal)

Possible extension -needs cosmeticupgrade (paint, carpet)

5 Washington,DC 4/30/2019 5,820

5,620 10 years

$10/$56,200

ExcessFunds

Possible extension - renovation for densificationpurposes

$200/ $4,000,000

$4million

6 NewYork,NY 7/31/2019 58,709

22,279

20,000 13 years

Renew/extension likely -needs cosmeticupgrade (bathrooms, paint, carpet) Likely extension - renovation for densification Extensionnot likely -$200/ SF asumption for relocationon densification Possible extension (5 year renewal) -needs cosmeticupgrade (paint, carpet)

7 DelrayBeach,FL 2/29/2020 4,137

4,137

15 years

$10/$41,370 $10TIminimum

$30-35TI and 1-2months free rent (renewal) $5-$15TIon a5 year;$15-$25TI on 10 year and0-4months free rent (renewal); $45-$60TI and 6-18months free rent (relocation)

8 Boston,MA

8/31/2020 41,609

9,467

32,133 12 years

$100/$3,213,300

$2.17million

Completebuild-out 11 years ago

$200/ $12,000,000

9 Hartford,CT

10/31/2023 80,399

600

60,000 11 years

$8.85million

Enhanced Reporting

2018 Total Expenses (psf) RE Taxes (psf)

OpEx net ofRE Taxes (psf)

Moved in - substantial renovation4 years ago

$25-35TI and6-7months free rent (renewal)

555 17 th Street 1401 Lawrence 1670 Broadway 1801 California CO StateBank Republic Plaza 1401 17 th Street 1331 17 th Street TABOR CENTER

10 Greenwich,CT 11/30/2023 7,900

7,900 4 years

$20/$158,000

ExcessFunds

$13.91 $17.86 $12.73 $14.20 $11.59 $16.79 $17.69 $16.71 $17.14

$5.71

$8.20 $7.74

65,000 (renewal); 60,000 (relocate)

Possible extensionormove - renovation fordensification purposes

Potentialout-of-pocket capital by2020 Potentialout-of-pocket capital between 2021-2023 Totalpotentialout-of-pocket capitalbetween 1997-2023 $20TI and6months free rent (renewal); $45TI and 12months free rent (relocation)

$10.12

Completebuild-out 7 years ago

$200/ $13,000,000

11 Parsippany,NJ 8/31/2025 100,010

17,742

7 years

$9.3million

$5.65 $6.66 $4.66 $6.58 $9.17 $8.50 $6.71

355,202 54,044 $7.08

$12,758,870

$9,645,000 $18,150,000

TotalRSF

$25,158,000

$7.54 $6.93

$37,916,870

$27,795,000

$10.21

$8.52 $8.21

$10.43

Detailed Comparison 1401,555 and Tabor OperatingExpense Categories 1401 Lawrence

BROWNSTEIN BENEFIT Making Sure Brownstein Gets Value

555 17 th Street Tabor Center

PSF 1.17 1.25 0.29 0.19 1.13 0.44 1.10 1.76 10.12 0.40

PSF

Utilities Cleaning Elevator

1.94 1.28 0.35 0.20 1.30 1.20 0.66 1.21 5.71 0.06

1.71 0.88

SeeR&M SeeR&M

HVAC

Repair & Maint Lot & Landscape

1.83

3.46*

Security

0.51 1.67 6.71 0.37

Admin & PM Fee

RE Taxes Insurance

TOTALS

$17.86

$13.91

$17.41

Alternative Vision

• AtTabor thisamount reflectsRETaxesandparking costs that cannotbebilledbackasOpEx.

Tenacious Audit & Reporting

LegalSectorAdvisoryGroup | ADVISING FOREXCELLENCE

C&W Saltmine Platform - Building Consensus

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

cushmanwakefield.com |1

RESPONSE TO SECT ION B

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for B.1. ABOUT THE CUSHMAN & WAKEFIELD TEAM

Portfolio Leadership

Sherry Cushman Sherry Cushman is an Executive Managing Director and Leader of C&W’s Legal Sector Advisory Group. Her role for Brownstein will be to lead the visioning and macro strategy development for how Brownstein might consider evolving their real estate portfolio to maximize its value for NXT50.

Todd Wheeler Todd Wheeler is a Vice Chairman and long- time member of both C&W’s Legal Sector Advisory Group and Tenant Advisory Group. Todd’s role for Brownstein will be overall account leadership and personal accountability to ensure the entire team of professionals are delivering extraordinary results for Brownstein.

Annie Bigos Annie Bigos is a client services coordinator with C&W. Annie’s role for Brownstein will be to maintain the documents, work flow and all software applications engaged on the account, including our Saltmine application. Further, Annie will monitor all activity within the portfolio and ensure we meet all deadlines and reporting protocols established by Brownstein.

Denver

Market Experts

Washington, D.C. Malcom Marshall Field broker with Brownstein experience.

Los Angeles Eric Duncanson

Sacramento Chris Strain

San Diego Darren Morgan

Albuquerque Tom Jenkins Long standing field broker relationship for Brownstein. Atlantic City Kirk Miller Field Broker for Atlantic City.

Doug Wulf Doug will lead the Denver HQ project with the full complement of resources and thought leadership from LSAG and portfolio leadership. Doug has extensive law firm representation experience in Denver.

Field broker with Brownstein experience.

Las Vegas Michael Dunn

Orange County Ali Anderson

Santa Barbara Greg Bartholomew Field broker with Brownstein experience.

Reno/Carson City Brian Armon Field broker with Brownstein experience.

Field broker with Brownstein experience.

Field broker for Orange County.

Special Forces

LSAG Team

Financial Analysis

Project Management

Lease Audit

Research

Global Resource

Hannah Diehl

Noel Kane

Olan Young

Erik Petersen

Machel Roller

Mike Coppola

Martin Woodrow

Working directly with Sherry Cushman, Hannah and Noel help perform the Brownstein survey and assessment process and assist in developing and delivering strategic visioning and comparison data to Brownstein.

One of C&W’s top financial analysts, Olan has completed multiple analysis projects for Brownstein and is very familiar with the firm and the preferences for analysis.

Leading our PM team Erik will oversee all PM work, building assessment, construction and inspections. This is a critically important service we focus on for clients.

Known for tenacious advocacy and accounting pedigree, Machel will perform all the Operating Expense and Tax audits for Brownstein.

Mike will coordinate all research activity for Brownstein including Mark-to-Market, Market Conditions monitoring and other market monitoring techniques designed to alert our professionals and clients to potential opportunities.

Martin leads C&W’s EOS group and just happens to be located in Denver. Martin is a tremendous asset for portfolio leaders to deliver “best practices” from major occupiers to Brownstein.

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

Response for B.2.

TEAM LEADERSHIP DETAILS

Doug Wulf has been one of the Denver Metro market’s top office brokers for 35 years. A principal with Fuller and Company, Doug was the top producer for most of his years under the Fuller flag and was a leader in the merger with Cassidy Turley, then DTZ and then Cushman & Wakefield. Doug has continued his excellent performance with Cushman & Wakefield completing several of the firm’s largest transactions including Whiting Petroleum in 2018. Partnering with several other teams, Doug has been a leader in bringing individuals from all the various firms together to further expand our market share in Denver. Doug will act as the Denver transaction lead for Brownstein and work closely with portfolio leadership to ensure this critically important decision for NXT50 is executed well.

Todd Wheeler is a Vice Chairman and long-time member of both C&W’s Legal Sector Advisory Group and Tenant Advisory Group. Todd remains one of the most active advocates for the occupiers of commercial properties in the U.S., conducting negotiations for many of the most significant real estate transactions in the Rocky Mountain West, coastal U.S. markets, and other markets around the world. Transaction specialties include lease negotiations, build-to- suit contracts, structured finance, lease and sale dispositions, and fee simple acquisitions. He has handled corporate headquarters relocations for numerous corporations. Denver Metropolitan Commercial Association of Realtors has awarded Todd their “#1 Commercial Producer”, “Deal of the Year”, and “Broker of the Year” Awards in addition to ranking him in the top 10 commercial real estate professionals list 16 times. Todd has also been awarded the Colorado chapter of NAIOP “Office Leasing Broker of the Year” Award twice and has been a finalist for that award 10 times. The Denver Business Journal has named him the Top Office Broker in Denver, consistently in their top 10 for many years, and in 1997 named him to their inaugural “Forty Under 40” list of young influential business leaders, as well as their ongoing “Who’s Who in Commercial Real Estate” list. Some of Todd’s law firm clients during his career have included Ballard Spahr, Brownstein Hyatt Farber & Schreck, Kilpatrick Townsend & Stockton, King & Spalding, and Lindquist & Vennum.

Sherry Cushman Executive Managing Director Legal Sector Advisory Group

Annie Bigos Client Services Coordinator

Annie Bigos joined the Wheeler/Billigmeier Team in the summer of 2016 bringing a wide variety of skills and experience from Account Portfolio management for clients like Office Evolution, Sierra Nevada Corporation and Vail Resorts to preparing reporting and compliance documents and presentations. Annie graduated from the University of Colorado at Boulder’s Architecture School in 2014 adding a high level understanding of the Project Management, Design and Implementation process making her uniquely equipped to coordinate and manage multiple disciplines required for our client’s portfolios and projects to run smoothly and accurately.

Doug Wulf Managing Director

Sherry Cushman is an Executive Managing Director and Leader of C&W’s Legal Sector Advisory Group. She brings over 33 years of real estate experience to the team and is a recognized national law firm expert, bringing extensive thought leadership, consensus building, and value to Brownstein. She has represented law firms in more than 12 million square feet of real estate transactions, with a special emphasis on law firm headquarter locations and experience with back office space evaluation/moves to satellite locations. Some of Sherry’s clients over her career include DLA Piper, Morgan Lewis, Baker & Hostetler, Greenberg Traurig, Bracewell, Clifford Chance, Dechert,Ballard Spahr, Morrison Foerster, Alston & Bird, and Kelley Drye to name a few. Throughout her career, Sherry has also worked with numerous premier law firms in the evaluation of firms’ headquarter location and developing real estate solutions that support the firm’s goals and objectives. Some of Sherry’s law firm headquarters experience includes Vinson & Elkins, King & Spalding, Kilpatrick Townsend & Stockton, Rutan & Tucker, Shook Hardy & Bacon,Foley Hoag, Briggs & Morgan, Dinsmore & Shohl, and Winthrop & Weinstine.

Todd Wheeler - Vice Chairman

Brownstein Hyatt Farber Schreck | Cushman & Wakefield

50 Response for B.3. TEAM SPECIALISTS DETAILS

SPECIAL FORCES MAKESADIFFERENCE

Hannah Diehl

DenverCBD,Colorado OfficeQ12019 MARKETBEAT

Project Management

Research

Vacancy andRentalRates Denver’s Central Business District (CBD) recorded a 10 basis-point (bps)decrease indirectvacancy to start theyear,down to 16.2% at the endof thefirstquarter2019.Overallvacancy followed suit, recording a 20 bps decrease quarter-over-quarter, to 18.0%. This decrease in vacancy is largelydue to theuptownmicro-market recordinga 120bps decrease in overall vacancy from the fourth quarter 2018 to the first quarter2019, to 16.3%, largely impactedbyWeWorkoccupying 117,000 square feet (sf) atWellsFargoCenter. Direct average gross rental rates increased 2.9% quarter-over-quarter, closing out the first quarter 2019 at $36.79 per square foot (psf). This increasewas largely attributed to the delivery of the PrismBuilding as well as the increase in operating expenses and taxes that continues to driveupoccupancy costs.Overallgross rental rates alsogrewquarter- over-quarter, increasing2.3% to$36.71psfat theendof thefirstquarter 2019. Class A and B product both recorded increases in overall gross rental rates, increasing 1.7% ($40.39 psf) and 3.6% ($31.49 psf), respectively, from the fourthquarter2018 to thefirstquarter2019. The Lower Downtown (LoDo)/Central Platte Valley (CPV) micro-market continues to command the highest rates in the CBD andmetro-wide, ending the first quarter 2019 at $46.01 psf on a direct basis. This is largely due to the lack of available space throughout the LoDo/CPV micro-marketwith a 7.8% direct availability rate at the end of the first quarter 2019. LeasingActivity The CBD recorded just shy of 536,000 square feet (sf) of leasing activity during the first quarter 2019, down from the approximately 674,000 sf leasedduring the fourthquarter 2018.The largest lease for the quarterwas Sunrun’s roughly 95,000 sf lease, as theymove from ParkCentral toManvillePlaza.WeWork continues to lease largeblocks of space, leasing another 61,000 sf inCivicCenter Plaza,whichmarks their seventh location in theCBD.Net absorption remainedpositive for theninthconsecutivequarter,withover 166,000sfabsorbedduring the firstquarter 2019. Construction Onebuilding,ThePrism,deliveredapproximately95,000 sfof rentable officeproduct to theMidtownmicro-market,whichwas 25%preleased atdelivery.Currently, theCBDhas justover 1.0million square feet (msf) of speculative office development under construction and is currently 0%preleased.Thispreleasingpercentage is expected to rise,with86% of the product currently under construction expected to deliver after 2019. These buildings should continue to provide strong preleasing at delivery, if thesuccessofnewconstructionduring thisexpansionperiod continues. Outlook 2019 is set to be another strong year for Denver’s CBD. Absorption should remainpositive throughout the remainderof 2019 aspreviously leased space is occupied.As these occupiersmove-in, vacancy should continue to decrease. Rental rate growth will continue to bemodest with growing occupancy costs and the addition of new product, the catalysts behind these increases. The CBD’s lack of large available blocks of space will continue to hinder the market, with only two 100,000 sfblocksavailable inexistingproductcurrentlyon themarket. Withpotential changing regulationswithin theoil andgas industry and Initiative 300, the CBD’s office growth could be halted. All eyes will continue to be on these legislative topics andwhat comes to fruition, but thosepotentialheadwindscould impact the futureofDenver’sCBD officemarket. DENVEROFFICE OverallNetAbsortion/OverallAskingRent 4-QTRTRAILINGAVERAGE Market Indicators (Overall,AllClasses) Q118 Q119 OverallVacancy 16.3% 15.4% NtAbsorption 108k 600k UnderConstruction 2.2M 1.8M AverageOverallAskingRen $27.41 $28.49 Economic Indicators Q118 DenverEmployment 1.49M DenverUnemployment 2.9% U.S.Unemployment 4.1%

DENVEROFFICE

Economic Indicators

12-Month Forecast

Q1 18

Q1 19

DenverEmployment

1.49M

1.51M

DenverUnemployment

2.9%

3.6%

U.S.Unemployment

4.1%

3.8%

Market Indicators (CBD,AllClasses)

Erik Petersen

12-Month Forecast

Q1 18

Q1 19

OverallVacancy

17.6%

18.0%

Mike Coppola Mike will coordinate all research activity for Brownstein including Mark-to-Market, Market Conditions monitoring and other market monitoring techniques designed to alert our professionals and clients to potential opportunities.

OverallNetAbsorption

197k

166k

UnderConstruction

872k

1.0M

$34.42

$36.71

OverallAverageAskingRent

CherryCreek,Colorado OfficeQ12019 MARKETBEAT

Denver, Colorado OfficeQ12019 MARKETBEAT

DIRECTRENTALRATESVS.VACANCYRATES

$28.00 $29.00 $30.00 $31.00 $32.00 $33.00 $34.00 $35.00 $36.00 $37.00 $38.00 Vacancy andRentalRates TheCherryCreekmicro-marketdirect vacancy rate continued to contract for the fourth consecutivequarter,decreasing60basis-points (bps) to 12.5%on adirectbasis at the endof thefirstquarter 2019. This decrease is largelydue toClassAproduct,whichdecreased 130bps quarter-over-quarter to 12.9%. Overall vacancy closedout thefirst quarter 2019 at 13.6%, representing a50bpsdecrease from anoverall vacancyof 14.1%,onequarter ago. Directgross rental ratesdecreasedquarter-over-quarter,down 2.9% to $35.26per square foot (psf). Thisdecrease is largely attributed to the lackofhigh-quality space that is available throughout themicro-market. Evenwith thisquarter-over-quarterdecrease, rental rategrowthhas beenmoderate year-over-year, increasing 2.8% fromwhendirectgross rental rateswere$34.29psf. This year-over-yeargrowthhasbeen largely impactedbyClassAproduct,whichhas increased approximately 4.9%, to$37.70psf at the endof thefirstquarter 2019. LeasingActivity SESDenv r,Colorado OfficeQ12019 MARKETBEAT Leasing activitywas less robust from theover 102,000 square feet (sf) leasedduring the fourthquarter 2018,with just shyof65,000 sf leased during thefirstquarter 2019.Averagedeal sizewasdown compared to allof 2018,withfirstquarter 2019new leases averaging3,100 sf,

18.0%

Leading our PM team Erik will oversee all PM work, building assessment, construction and inspections.

16.0%

12-Month Forecast

Q1 19

DENVEROFFICE

14.0%

Q1 18

1.51M

12.0%

Economic Indicators

1.49M

3.6%

10.0%

2.9%

3.8%

DenverEmployment

8.0%

EconomicOverview Denver’s unemployment rate recorded a 70 basis-point (bps) increase quarter-over-quarter, up to 3.6% at the end of the firstquarter2019.Evenwith thisuptick, theDenvermetro area remains 20 bps below the national average of 3.8%. Industry diversificationcontinues todriveDenver’s robusteconomyand fuel the impressive growth that is displayed throughout the Denver metro area. Potential headwinds could arise, as new legislativemeasurescouldslowdowntheregion’srobustgrowth. For now, the Denver economy will build off its momentum exhibited in2018,which should lead toanother impressiveyear in2019. MarketOverview Overall vacancy recorded a slight uptick during the first quarter 2019, increasing 20bps to 15.4%.Evenwith this uptick quarter-over-quarter, overall vacancy has decreased 90 bps year-over-year from 16.3% at the end of the first quarter 2018. Directvacancyalso recordedamarginal increase from theend of the fourth quarter 2018 to the end of the first quarter 2019, increasing 10bps to 14.0%.Thisslight increase indirectvacancy is partially attributed to the addition of new construction, as well as the contraction of companies around themetro-area. Vacancyshouldcontract throughout the restof2019,as tenants continue to occupy previously leased space,with the Central BusinessDistrict (CBD)being thedriving forceas itcontinues to be theepicenterofactivityaround themetroarea.

4.1%

DenverUnemployment

6.0%

12-Month Forecast

Q119

Q12015

Q12016

Q12017

Q12018

Q12019

U.S.Unemployment

12-Month Forecast

Q1 19

DirectGrossRentalRate

DirectVacancy

1.51M

Q1 18

13.6%

Market Indicators (CherryCreek,AllClasses)

3.6%

12.5%

87k

OVERALLLEASINGACTIVITYANDNETABSORPTION

3.8%

-10k

55k

Vacancy

124k

- 100 200 300 400 500 600 700 800

$36.41

699

NetAbsorption (sf)

698

$35.45

UnderConstruction (sf)

Noel Kane

526 compared to the3,700 sf average throughout 2018. Evenwith the slow leasingquarter,net absorptionbouncedbackquarter-over-quarterwith justnorthof+87,000 sf absorbedduring thefirstquarter 2019, representing a large increase from the approximately -5,000 sf absorbed during the fourthquarter 2018. The increase in absorption canbe attributed to thedeliveryofFinancialHouseduring thefirstquarter 2019,whichdelivered 100%preleased. Construction Onebuildingdelivered to theCherryCreekmicro-marketduring thefirst quarter 2019.The aforementionedFinancialHouse, located at 205 DetroitStreet,delivered approximately69,000 sfofofficeproduct to the vibrantCherryCreekNorthneighborhood.Financialhousehas leases signedwithUBS,BowRiverCapital andOceansideTenHoldings. It alsohappens to containoneof thefirstWeWork locationsoutsideof theurban core. Currently, the loneofficedevelopmentunder construction is the66,000 sf at 260North JosephineStreet. This development is slated todeliver justunder55,000 sfofofficeproduct, and 11,000 sfofgroundfloor retail,during the thirdquarter 2019 and is currently 70%preleased. Outlook Q1 18 Q1 19 12-Month Forecast 17.1% 16.7% -1k -177k 552k 363k Q1 18 Q1 19 12-Month Forecast 1.49M 1.51M 2.9% 3.6% 4.1% 3.8% 111 Q12015 SquareFeet (Thousands)

536

AverageAskingRent*

157 Vacancy andRentalRates TheSoutheastSuburban (SES) submarket recorded a 100basis-point (bps) increase in vacancy during the first quarter 2019, to 14.9% on a directbasis.Likedirect,overallvacancyalso recordeda large increase, increasing 150 bps to 16.7% at the end of the first quarter 2019. Vacancy continues tobedrivenby theMeridianmicro-market.At the end of the first quarter 2019, overall vacancy within the Meridian micro-market was 26.2%, the highest overall vacancy rate for any micro-market across theDenvermetro area.Another indicatorworth noting is the availability rate. This rate,which excludes leased vacant space, bt includes all vacant and occupied space that is being marketed for lease, recordeda60bpsdecrease to20.4%onanoverall basisduringfirstquarter 2019 for theSES submarket. Direct average gross rental rates grew moderately, increasing approximately 1.6% quarter-over-quarter to $26.06 per square foot (psf)during th firstquarter 2019.Directgross rental rates continued to stabilize,growing 1.5%year-over-year fromwhendirectgross rental rateswere $25.67 psf, one year ago. This is a significantly slower, but more sustaiable, pace compared to the 4.8% average growth exhibited inthe prior three years.Overall gross rental rates followed suit, growing roughly 1.8% quarter-over-quarter to $25.78 psf at the endof thefi stquarter 2019 . LeasingActivity Leasing activity bounced back from a slow fourth quarter 2018,with approximatly579,000 square feet (sf) leasedduring thefirstquarter 2019. The largest lease for the quarter was Cochlear’s 161,000 sf sublease at ParkRidge Six, backfilling the fully vacant building. Two other notabl leases for the quarterwere: SierraNevada’s 41,000 sf renewal at9800S.MeridianBoulevard andYesCommunities’32,000 sfnew lease at50FiftyDTC,whichwill relocate from 1900 16th in the Central Business District. Coming off one of the strongest years for absorption ever in 2018, net absorption started out 2019 with approximately -177,000 sf of net absorption. This decrease is largely attributed toClassB product,which accounted for -125,000 sf (71%) ofnet absorption,during thefirstquarter 2019. Construction No new buildings delivered in the SES submarket during the first quarter 2019 and there is only one project under construction. The roughly 382,000 sf 6900 Layton is set to deliver mid-2020 and is currently49%preleased toNewmontMining.Momentumat thenewly constructed 5050 S. Syracuse project has ramped up, as 75,000 sf was leased during the first quarter 2019 after delivering fully vacant during the fourthquarter 2018. Outlook The SES submarket should bounce back from a slow start, with strengthening fundamentals as the year progresses. Absorption should increase,as tenantsoccupypreviously leased space,whichwill in turn contract vacancy rates.Rental rate growthwill continue to be moderate,withgrowingoccupancycostscontinuing tobe thecatalyst behind gross rate growth. The flight from Class B to A product will continue, as occupiers view their real estate as a key driver in the recruitment and retentionof employeeswithin theSES submarket. 378 73 197 166 Q12016 Q12017 Q12018 Q12019 LeasingActivity NetAbsorption

12-Month Forecast

DENVEROFFICE

25.0%

*Submarketboundarieswere re-assessedbeforeQ1 2018

Economic Inicators

20.0%

OVERALLRENTALRATESVS.VACANCYRATES

15.0%

$29.00

$28.50

10.0%

DenverEmployment

$28.00

DenverUnemployment

5.0%

$27.50

$27.00

U.S.Unemployment

0.0%

$26.50

Q12019

$26.00

Q12018

2.0

(we did notbreak out theNWC from theNW until2015) Q12017

Market Indicators(SES,AllClasses)

$25.50

OverallVacancy

Q12016

$25.00

Q12015

1.5

OverallGrossRentalRate

1.0

OverallVacancy

194

205

LEASINGACTIVITYANDABSORPTIONBYCLASS 271

0.5

NetAbsorption

300

UnderConstruction

250

0.0 SF (Millions)

103

200

TheCherryCreekmicro-market continues toprovide someof the strongestoffice fundamentalsmetro-wide. Vacancywill remain stable, asmove-outsoccur,butwillbehelped from the strengthofnew construction,which continues to leaseupquickly. Rental rateswill continue to climbover thenext threequarters, asnew construction delivers, andoccupancy costs continue to increasemarketwide.Tenants haveproved awillingness topay apremium tobe located in the affluent NorthCherryCreekneighborhood, allowing for landlords to increase rates across all classes,due to thehighdemand exhibited from occupiers. With thispent-updemand forhigh-endClassAoffice products, itwould come asno surprise to seemoreproposedprojects come to fruition, as the appetite fornewproduct is clearbasedon the highpreleasing stats seen innewdevelopments. Overall, theCherry Creekmicro-market should continue to remainhealthy, albeitgrowthwill bemoremoderate than the rapidgrowth exhibited inprior years. $25.36 $25.78 10.0% 12.0% 14.0% 16.0% 18.0%

OverallAverageAskingRent

150

Coming off of a strong 2018, net absorption remainedpositive for theeighthconsecutivequarter,withapproximately600,000 square feet (sf) absorbed through the first quarter 2019. This represented a large increase over the 301,000 sf absorbed during the fourth quarter 2018. This healthy absorption is largely due to the addition of new inventory, that delivered collectively 75% preleased, as well asWeWork continuing to occupy previously leased space. Absorption should continue to trend positively throughout the rest of 2019, as companies like Cochlear, Slack Technologies, Amazon andWeWork take occupancy of previously leased large blocks of space.With the influence of tech growth throughout the Denver metro area,netabsorption should remain strong,albeitata less torrid pacewhen compared to the robust absorption that occurred throughout2018.

-0.5

(55)

100

(100) (50) - 50

LSAG Team

-1.0

(12)

-93

(142)

2014

Q12019

2015

PreliminaryProjectSchedule AnadarkoGraniteBuilding

Q12018

2016

OverallAbsorption

Q12017

DIRECTRENTALRATESVS.VACANCYRATES

2017

(150)

Q12016

2018 OverallAskingRent,$PSF

NetAbsorption

(200) SquareFeet (Thousands) Q12015

2019

OverallVacancy

LeasingActivity

$27.00

ID TaskName

Duration Start

2019

2020

2021

2022

30.0%

25.0%

$26.00

17.0%

20.0%

SUBMARKETSTATSCOMPARISON

1 LargeBuilding,CLIENTAProject -Approximately295,000SF,5Phasesbasedonapproximately63,000ofSwingSpace 2 GeneralContractor -SelectAppropriateShortListofGCs,PrepareRFP -RequestingCostPlus /GMPProposal, InterviewandSelect 4wks

870days Mon1/28/19

15.0%

16.0%

$25.00

5.0% 10.0%

$40.00 $45.00

Mon1/28/19

15.0%

$24.00

$30.00 $35.00

0.0%

Programing,Stacking andBlockingPlans

30days Mon1/28/19

14.0%

$20.00 $25.00

8.0%

$23.00

HistoricalAverage:13.83%

13.0%

$10.00 $15.00

4 CLIENTAFloors1 - 14ProgrammingandTestFitReview,SpacePlanningEntireProjectAll14Floors295,000SF,BldgDepartment Mtg 6wks

Mon1/28/19

6.0%

$22.00

$5.00

4.0%

12.0%

$0.00

$21.00

5 6 7 8 9

SwingSpace

50days Mon1/28/19

2.0%

11.0%

Leasing activity recorded a slight increase over the 2.0million square feet (msf) leasedduring the fourthquarter2018with2.1 msf of new leasing activity throughout theDenvermetro area. Themost notable lease that occurred during the first quarter 2019,wasCochlear’s 161,000sfsubleaseatParkRidgeSix,which will backfill the entire building and grow Cochlear’s footprint.

DirectVacancy

$20.00

0.0%

SwingSpace -ConfirmTemporaryRequirements -AV,Cabling,Security,MiscellaneousFurniture

4wks 6wks

Mon1/28/19 Mon2/25/19

10.0%

DirectAskingRate

Q12015

Q12016

Q12017

Q12018

Q12019

2014

2015

DirectGrossRentalRate

DirectVacancy

Install/Provide/ModifyAnyDeterminedSwingSpaceNeeds

2016

2017

DesignDevelopment,ConstructionDrawing,Permit,Construction PHASEONEFloorsA,B,andC -Design andConstruction

841days Fri3/8/19 225days Fri3/8/19

2018

OVERALLLEASINGACTIVITYANDNETABSORPTION

2019

1,000

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

798

SchematicDesignPhaseOne -FloorsA,B andC;CostEstimating andClientReview DesignDevelopmentPhaseOne -FloorsA,BandC;CostEstimating andClientReview ConstructionDrawingsPhaseOne -FloorsA,B, andC;CostEstimating andClientReview

3wks 5wks 5wks 8wks 4wks 4wks

Fri3/8/19 Fri3/29/19 Fri5/3/19 Fri6/7/19 Fri6/7/19 Fri7/5/19 Fri8/2/19 Fri1/3/20 Fri6/7/19 Fri7/19/19 Fri9/27/19 Fri12/20/19 Fri1/17/20 Fri2/14/20 Fri3/13/20 Fri8/14/20

800

725

643

605

579

600

484

cushmanwakefield.com I 1

400

PermitPhase 1Drawings

200

RelocateEmployeesOff ofFloorsA,B,andC to theSwingSpace Demolition, newwall layout,HVAC layout, framing, drywall one side,etc.

(200)

-177

SquareFeet (Thousands)

-220

ConstructionPhase 1, includes data cabling, security,AV, soundmasking, furniture installedand tested RelocateEmployeesFromSwingSpaceBack toNewlyConstructedFloorsA,B,andC DESIGNofPHASETWO (D,EandF),PHASETHREE (G,H,and I) andPHASEFOUR (J,K,andL) SchematicDesign -PhasesTwo,Three,andFour;CostEstimatingandClientReview DesignDevelopment -PhasesTwo,Three,andFour;CostEstimating andClientReview ConstructionDrawings -PhasesTwo,ThreeandFour;CostEstimatingandClientReview

22wks

(400)

Q12015

Q12016

Q12017

Q12018

Q22018 1 9

LeasingActivity

NetAbsorption

2wks

cushmanwakefield.com | 1

776days Fri6/7/19

6wks

10wks 12wks

PHASETWOConstructionFloorsD,E, andF

180days Fri12/20/19

PermitPhase 2FloorsD,EandF

12wks

RelocateEmployeesOff ofFloorsD,E,andF to theSwingSpace

4wks 4wks

DemolitionPermit,newwall layout,HVAC layout, framing,drywallone side, etc.

ConstructionPhase 2, includes data cabling, security,AV, soundmasking, furniture installedand tested RelocateEmployeesFromSwingSpaceBack toNewlyConstructedFloorsD,E, andF

22wks

2wks

PHASETHREEConstructionFloorsG,H,and I

180days Mon8/3/20

PermitPhase 3FloorsG,H and I

12wks

Mon8/3/20 Fri8/28/20 Fri9/25/20

RelocateEmployeesOff ofFloorsG,H,and I to theSwingSpace DemolitionPermit,newwall layout,HVAC layout, framing,drywallone side

4wks 4wks

ConstructionPhase 3, includes data cabling, security,AV, soundmasking, furniture installedand tested RelocateEmployeesFromSwingSpaceBack toNewlyConstructedFloorsG,H, and I

22wks

Mon10/26/20 Mon3/29/21

2wks

PHASEFOURConstructionFloors J,K, andL

180days Mon3/15/21

PermitPhase 4FloorsD,EandF

12wks

Mon3/15/21 Mon4/12/21 Mon5/10/21 Mon6/7/21 Mon11/8/21 Fri12/20/19 Fri1/17/20 Fri2/21/20 Mon11/1/21 Mon11/22/21 Mon12/20/21 Mon1/24/22 Mon5/16/22

RelocateEmployeesOff ofFloorsD,E,andF to theSwingSpace

4wks 4wks

DemolitionPermit,newwall layout,HVAC layout, framing,drywallone side, etc.

ConstructionPhase 4, includes data cabling, security,AV, soundmasking, furniture installedand tested RelocateEmployeesFromSwingSpaceBack toNewlyConstructedFloors J,K,andL

22wks

2wks

PHASEFIVEConstructionFloorsM andN

636days Fri12/20/19

Global Services

SchematicDesignFloorsMandN;CostEstimatingandClientReview DesignDevelopmentFloorsM andN;CostEstimatingandClientReview ConstructionDrawingsFloorsM andN;CostEstimatingandClientReview

4wks 5wks 6wks

PermitPhase 5FloorsM&N

12wks

RelocateEmployeesOff ofFloorsM&N

4wks 4wks

DemolitionPermit,newwall layout,HVAC layout, framing,drywallone side, etc.

ConstructionPhase 4, includes data cabling, security,AV, soundmasking, furniture installedand tested

16wks

RelocateEmployeesFromSwingSpaceBack toNewlyConstructedFloorsM&N

2wks

COSTAR

Task Milestone Summary

RolledUpTask RolledUpMilestone RolledUpProgress

Split ExternalTasks ProjectSummary

GroupBySummary InactiveTask InactiveMilestone

InactiveMilestone InactiveSummary ManualTask

Duration-only ManualSummaryRollup ManualSummary

Start-only Finish-only ExternalTasks

ExternalMilestone Progress Deadline

Cushman&Wakefield Fri 2/1/19

Fri2/1/19

Preliminary&Confidential

Cushman&Wakefield ofColorado, Inc.

FINANCIAL ANALYSIS

Martin Woodrow Martin leads C&W’s EOS group and just happens to be located in Denver. Martin is a tremendous asset for portfolio leaders to deliver “best practices” from major occupiers to Brownstein. C&W helped Akerman become as tech oriented in their portfolio as our biggest tech clients.

Financial Services Olan Young

V.2.0 1/22/18

BROWNSTEINBASECASEandPOTENTIALOCCUPANCYALTERNATIVES -Denver

Baseline /Basecase BASELINE -Current

May'18 -May'23 (61months)

111.3KSFat 41017thStreetThroughMay'23

Lease Audit Machel Roller Known for tenacious advocacy and accounting pedigree, Machel will perform all the Operating Expense and Tax audits for Brownstein.

BASECASE -Current+Expand18th LongTermOccupancyAlternatives ALT1:ExpandandStayat41017th

ExpandOnto18thFloorandStay InExistingSpace (130.2KSF)at41017thThroughExpiration -May'23

May'18 -Apr'33 (180months)

ExpandandStay LongTermat41017th (Take18thFloor,ExtendOtherSpace throughApr'33)

ALT2:Relocate toBlock162atExpiration (May'23) ALT3:Terminate41017th,Relocate (WFC)

ExpandandStayUntilExpiration (May'23)ThenRelocate toBlock162

Terminate41017thSpaceatApr'19OptionDateThenRelocate toExistingOption (WFCas sample)

AnalysisPeriod (May'18 -Apr'33)

180mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos 12mos FYE 4/30/19 4/30/20 4/30/21 4/30/22 4/30/23 4/30/24 4/30/25 4/30/26 4/30/27 4/30/28 4/30/29 4/30/30 4/30/31 4/30/32 4/30/33

$'s inMillions

Annuity Equivalent 1

TotalP-TCASHExpense

TotalNOM$

TotalNPV$

Baseline /Basecase

May'18 -May'23 (61months) 111,307SF

BASELINE -Current

$17.4 $20.8

$14.5 $17.4

$3.3 $3.9

$3.3 $3.1 $3.5 $3.6 $3.7 $0.3 $3.9 $3.8 $4.1 $4.3 $4.4 $0.4

BASECASE -Current+Expand18th

130,163SF

LongTermOccupancyAlternatives

May'18 -Apr'33 (180months)

ALT1:ExpandandStayat41017th

$80.2 $92.4 $84.0

$48.0 $55.7 $52.8

$4.9 $5.7 $5.4

$4.4 $4.5 $4.7 $4.8 $4.9 $5.1 $5.2 $5.3 $5.5 $5.6 $5.7 $5.9 $6.0 $6.2 $6.3 $3.9 $3.8 $4.1 $5.2 $6.3 $15.1 $5.4 $5.5 $5.7 $5.8 $6.0 $6.2 $6.3 $6.5 $6.7 $7.0 $9.0 $4.4 $4.6 $4.7 $4.8 $4.9 $5.1 $5.2 $5.4 $5.5 $5.6 $5.8 $6.0 $6.1

130,163SF 105,000SF 120,000SF

ALT2:Relocate toBlock162atExpiration (May'23) ALT3:Terminate41017th,Relocate (WFC)

Capital /1-TimeExpense Items: Netofany LLProvidedTI$s 2

TotalNOM$

Baseline /Basecase

May'18 -May'23 (61months) 111,307SF

BASELINE -Current

$0.0 $0.0

$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

BASECASE -Current+Expand18th

130,163SF

LongTermOccupancyAlternatives

May'18 -Apr'33 (180months)

ALT1:ExpandandStayat41017th $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $9.5 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $3.7 $9.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $12.7 [1]TotalNPVenables comparisonofequivalent length investments.Annuityequivalent converts totalNPV intoa seriesofannual cash flows therebyprovidingaway to compareprojects / scenarios ofunequal life. [2]Capitaland1-Time Items=Tenant ImprovementBuildoutPLUSMoveCostsPLUSTerminationFee (ifapplicable) LESSany LandlordProvidedTenant ImprovementAllowance $0.0 $9.5 ALT2:Relocate toBlock162atExpiration (May'23) ALT3:Terminate41017th,Relocate (WFC) 130,163SF 105,000SF 120,000SF

One of C&W’s top financial analysts, Olan has completed multiple analysis projects for Brownstein and is very familiar with the firm and your preferences for analysis.

COSTAR

FINANCIAL ANALYSIS

BrownsteinHyattFarberSchreck | Cushman&Wakefield 17

126mos term* <-132mos term* -> 165KSF

BROWNSTEINBASECASEandPOTENTIALOCCUPANCYALTERNATIVES -Denver $ inMillions ($'s inmillions)

$60.0

Cash

$55.7

TotalScenarioPre-TaxNPVCost ScenarioCapitaland1-TimeExpense -NetofTI [1]

$52.8

$48.0

AnnuityEquivalent [2]

DRAFT _AlternativeComparison_1/26/2018 Page5

$45.0

$30.0

$17.4

$14.5

$15.0

$12.7

$9.5

$5.7

$5.4

$4.9

$3.9

$3.3

$0.0

BASELINE -Current

BASECASE -Current+Expand18th

ALT1:ExpandandStayat41017th

ALT2:Relocate toBlock162atExpiration (May'23)

ALT3:Terminate41017th,Relocate (WFC)

<-------------------------------~5YearPeriod (May'18-May'23)----------------------------------->

<---------------------------------------------------------------15YearPeriod (May'18-Apr'33)--------------------------------------------------------->

V1.0_1-18-18

[1]Capitaland1-Time Items=Tenant ImprovementBuildoutPLUSMoveCostsPLUSTerminationFee (if applicable) LESSanyLandlordProvidedTenant ImprovementAllowance [2]TotalNPVenables comparisonof equivalent length investments.Annuityequivalent converts totalNPV intoa series of annual cash flows therebyproviding away to compareprojects / scenarios of unequal life.

BrownsteinHyattFarberSchreck | Cushman&Wakefield 16

Cushman & Wakefield | Brownstein Hyatt Farber Schreck

DRAFT _AlternativeComparison_1/26/2018 Page4

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