C&W Sublease Strategy and Services

SUBLEASE SERVICES & STRATEGY OVERVIEW OF CUSHMAN & WAKEFIELD

FROM EMERGING TECH TO PUBLICLY TRADED

Cushman & Wakefield’s Tenant Advisory Group brings together exceptional advisors from markets across the globe to serve the dynamic needs of companies of all sizes. Our integrated, global team is uniquely situated to offer a true partnership and a full suite of bespoke services.

Our team at Cushman & Wakefield will work tirelessly for an opportunity to earn your trust and partnership.

2 | TENANT ADVISORY GROUP

SUBLEASING: AN OVERVIEW

There are times in a company’s evolution where subleasing becomes an important tactic in their real estate strategy. When making this decision, there are several considerations worth discussing. Our team is here to help you navigate each of these topics and work towards the best possible outcome. Legal Considerations & Alternate Courses of Action One of the first steps you should take when considering a sublease are the unique terms of your master lease and the potential interest of the landlord to engage in a formal Termination. For the later, absent a pre-negotiated termination right, there are likely to be sizeable fees associated with an early termination, provided the landlord is amendable. That said, a formal termination does offer tangible benefits if achievable and should often be weighed with a formal subleasing strategy. Should a sublease strategy be undertaken, one must pay careful attention to the restrictions imposed by the landlord with regards to consent. To elaborate, some leases prohibit a master tenant from subleasing to tenants that already exist within the project, or whom have corporate financials inferior to that of the maser tenant. Identifying the entities which could present a barrier to landlord approval should be handled proactively. One should also carefully consider the landlord’s right to capture, particularly if your team plans to maintain a presence within the project. Review your sublease language carefully with your team to avoid any surprises. The Economics of Subleasing Developing the right pricing strategy is critical to a successful subleasing effort given the finite period of time in which financial relief can be realized. We must be conscious of competition within the marketplace and therefore a survey of comparable availabilities is critical to planning conservatively. In addition, sublease must consider all-inclusive transactional costs. For example, as a sublessor, will you be absorbing operational costs such as utility or janitorial fees, or will such expenses be passed off directly to the subtenant? What leasing concessions will support the marketability of your sublease, whether that is rental abatement periods or modest tenant Improvements? If tenant improvements are being performed, who is responsible for reinstatement, if required, at the end of the term? The manner by which sublease profits are distributed, if realized, is often documented in the lease. In many markets, the master landlord and master tenant will share in such profits and therefore should be modeled appropriately. Finally, there are administrative steps and processing fees associated to sublease consent, and while these are likely to be minor costs when compared to the overall value of sublease Income received, they should not be forgotten. Further Responsibilities of a Sublessor When transitioning from the role of a tenant to sublessor, you will now become an intermediary between your subtenant and the master landlord. You may be required to field and route building maintenance issues that are the responsibility of building ownership. You will need to develop account receivable protocols and track critical dates. Additional considerations include the security and provisioning of your IT network, use and ownership of in-place furniture, and obligations of all parties to return the premises into an acceptable condition at the end of term. Our team can help you navigate each of these topics.

CUSHMAN & WAKEFIELD | 3

SUBLEASING IN THE TIME OF COVID-19

Considerations for Subleasing in Unprecedented Times

As we battle COVID-19 globally, there are some unique circumstances that we need to anticipate and plan for. In transitioning from Tenant to Sublandlord, you may also need to assume some new roles and responsibilities to meet building operations and maintenance requirements.

SHELTER IN PLACE AND IMPACT TO TOURING While Shelter in Place (SIP) ordinances continue, feasibility of touring commercial real estate will be strained. For the latest on the Shelter in Place restrictions, USA Today maintains an excellent, interactive map. In most cases, commercial estate is not an approved exclusion to these orders. Furthermore, SIP restrictions will have a compounding impact on permitting and construction timelines. Therefore, any sublease negotiations which contemplate construction should set timeline expectations conservatively. To facilitate Virtual Touring, we can turn to some innovative solutions like Matterport and Drone Base. With virtual 3D tours, like those produced by Matterport, we can create immersive experiences for potential subtenants from the comfort of their own home. especially in instances where a suite may be shared, you need to work in partnership with your master landlord and subtenant to develop policies and a clear matrix of responsibilities with regards to topics such as: Preparing the Space for occupancy, Cleaning Guidelines, and Communication protocols. While developed for a more traditional landlord and tenant relationship, our COVID-19 Recovery Readiness manual provides a number of relevant checklists and best practices with regards to prepping the workplace for re-entry. ROLES OF A SUBLANDLORD In assuming the role of a sublandlord,

Click Here to Read our How to Guide on Workplace Re-Entry

4 | TENANT ADVISORY GROUP

CUSHMAN & WAKEFIELD | 5

SAMPLE MARKETING COLLATERAL

SUITE 101 8,487SF

1515ArapahoeSt. |Tower 1,Suite100 Denver,Colorado 80202 T: 303.824.2000 |F: 303.824.2001

PanelTypes -Compose

info@pearwork.com | www.pearwork.com

PanelType 'D'

Side 'A'

Side 'B'

PanelType 'A'

Side 'A'

Side 'B'

ZUFS-1927-LNFJS

T

,33-0CT VZTI-40XX-FNN

,33-0CT VZTI-40XX-FNN

OFFICE

,33-0CT VZTI-32XX-FNN

,33-0CT VZTI-40XX-FNN

122

49.5" [1,257.3mm]

49.1" [1,246.9mm]

49.1" [1,246.9mm]

41.5" [1,054.1mm]

41.1" [1,043.7mm]

41.1" [1,043.7mm]

T T

T

PanelType 'F'

TRANS

Side 'A'

Side 'B'

LG.CONF

PanelType 'H'

Side 'A'

Side 'B'

BREAKROOM 108

123

,33-0CT VZTI-48XX-FNC

,33-0CT VZTI-48XX-FNC

,33-0CT VZTI-40XX-FNN

,33-0CT VZTI-40XX-FNN

OPENOFFICE

120

49.5" [1,257.3mm]

49.1" [1,246.9mm]

49.1" [1,246.9mm]

ZZBT-1900

41.5" [1,054.1mm]

41.1" [1,043.7mm]

41.1" [1,043.7mm]

T

PanelType 'J'

Side 'A'

Side 'B'

PanelType 'I'

Side 'A'

Side 'B'

109 ABOUTTHE BUILDING BIKES

,33-0CT VZTI-40XX-FNN

,33-0CT VZTI-32XX-FNN

,33-0CT VZTI-48XX-FNC

,33-0CT VZTI-40XX-FNN

121 OFFICE

49.5" [1,257.3mm]

49.1" [1,246.9mm]

49.1" [1,246.9mm]

41.5" [1,054.1mm]

41.1" [1,043.7mm]

41.1" [1,043.7mm]

ADDRESS 258055thStreet Boulder,CO80301 SIZE Suite 101:8,487SF 55TH STREET RAREBOULDERSUBLEASE 2580 Boulder,CO8030

ZZBT-1900

T

T

THE LOCATION 116 104 OFFICE 117 OFFICE 118 T T T T T T T T T T T ZUFS-1927-LNFJS ZZBT-1900 ZBT-1900

ZUFS-1927-LNFJS

OUTDOOR INDUSTRIES 2580 55THSTREET BOULDER,CO

AccountTeam

-KEVINMCCARTHY/REBECCAHUMMEL

ProposalNumber Area/Location -FLOORFURNISHINGS -101661

PlanType -FURNITURE

Scale Date -1.10.17

-NOTTOSCALE

THISDOCUMENT,ANDTHE IDEASANDDESIGNS INCORPORATED HEREIN,ASAN INSTRUMENTOF PROFESSIONALSERVICE,CANNOTBEUSED, IN WHOLEOR INPART,FORTHISORANYOTHER PROJECT,WITHOUTTHEWRITTENCONSENTOF PEARWORKPLACESOLUTIONS.

FOCUS

CONF 111

XX DateBy

Issue XXXX XXXX XXXX XXXX XXXX XXXX XXXX

XXXX XXXX XXXX XXXX XXXX XXXX

FOCUS

XX XX XX XX XX XX

XXXX

F1 Sheet

43,374SF is availableon adirectbasis for a totalpotentialof51,861SF contiguous

TERM September30, 2024

PARKING 3.00 : 1,000SF

FURNITURE Negotiable

FlatironsGolf Course

RATE Negotiable

55TH STREET

55thSt. CLICKHERE for virtual tour

2580

PearlPkwy.

STEVEBILLIGMEIER ExecutiveManagingDirector +13038136413 steve.billigmeier@cushwake.com

ROBBAIN Director +13038136452 rob.bain@cushwake.com

©2020Cushman&Wakefield. All rights reserved. The information contained in this communication is strictly confidential. This informationhasbeenobtained from sourcesbe- lieved tobe reliablebuthasnotbeen verified. NOWARRANTYORREPRESENTATION,EXPRESSOR IMPLIED, ISMADEASTOTHECONDITIONOFTHEPROPERTY (ORPROP- ERTIES)REFERENCEDHEREINORASTOTHEACCURACYORCOMPLETENESSOFTHE INFORMATIONCONTAINEDHEREIN,ANDSAME ISSUBMITTEDSUBJECTTOERRORS, OMISSIONS,CHANGEOFPRICE,RENTALOROTHERCONDITIONS,WITHDRAWALWITHOUTNOTICE,ANDTOANYSPECIALLISTINGCONDITIONS IMPOSEDBYTHEPROPERTY OWNER(S). ANYPROJECTIONS,OPINIONSORESTIMATESARESUBJECTTOUNCERTAINTYANDDONOTSIGNIFYCURRENTORFUTUREPROPERTYPERFORMANCE.

1755 B L A K E

LODO’S MOST CREATIVE SUBLEASE

1755 B L A K E

PROPERTYFEATURES

PROPERTYHIGHLIGHTS

Address: 1755BlakeStreet

• Internal stairwell

Size: 36,931SF

• 4-Minutewalk toUnionStation

DateAvailable: 11/1/2019

• Move-in ready condition

LeaseTerm: 12/31/2022

• 12Conference rooms

LeaseRate: Negotiable

• 4PrivateOffices

Furniture: Negotiable

• 274Bench seats

Parking: 40GarageSpaces

• Largeopen kitchen

ParkingCost: $250/space

• Multiplehuddle rooms

TOPTWOFLOORSWITHWATERVIEWS 33,072SFPLUG-AND-PLAYSUBLEASE

6 | TENANT ADVISORY GROUP

TECHNOLOGY TOOLKIT

Innovative Tools to Differentiate Your Sublease

In today’s competitive environment we can leverage some of the most cutting edge technology solutions to make a sublease opportunity stand out amongst the crowd. A select sampling of such tools is profiled below.

DRONE BASE

MATTERPORT

An industry leader in Virtual 3D tours, Matterport allows interested parties to tour a space remotely. Using high definition videography and an intuitive navigation, prospects can immerse themselves within a suite and get a hyper-realistic experience not as easily captured in still photography. View Example 

A network of tens of thousands of professional drone pilots, we can provide aerial imagery for signature projects that may benefit from a broader storyline around community attributes and amenities.

SALTMINE

REALTY ADS

A complimentary offering to Cushman & Wakefield clients, through Saltmine we can develop rapid 3D interactive test fits. We can proactively model traditional or modern use cases so potential prospects can more quickly envision how their team can most efficiently use or reconfigure the space.

Leveraging AI and tailored to the CRE sector, RealtyAds can dynamically place a Sublease Advertisement in front of targeted prospects on a myriad of online platforms, including: Facebook, Google Search, Instagram, Twitter and LinkedIn.

CUSHMAN & WAKEFIELD | 7

SUBLEASE MARKETING PLATFORMS

Platforms for Advertising Short-Term and Traditional Subleases

BROKERAGE NETWORK

LIQUIDSPACE

Leveraging our extensive local, regional and national relationships we promote our listings through formal and informal networking channels.

Provides an intuitive platform for tenants seeking short term or shared subleases. Popular aggregator for flex provider availability as well.

COSTAR

PIVOTDESK

Arguably the most extensive listing database in the US, CoStar tracks history and availabilities on over 5M commercial real estate properties.

Focused on shared office spaces where tenants can explore ‘space by the desk’, similar to LiquidSpace acting as flex provider aggregator.

LOOPNET

REALTYADS

Owned by CoStar, LoopNet provides additional exposure to a wide public audience, tracking over 12M visits per month

AI Powered Advertising Platform which dynamically places listing on Facebook, LinkedIn, Instagram and Google Search results.

CRAIGSLIST

CITYFEET

Tried and True Craigslist is still a listing source for small businesses and startups, albeit the search features and data management is constrained.

Owned by Costar, Cityfeet offers a more intuitive search interface but has less coverage outside core markets.

8 | TENANT ADVISORY GROUP

TARGETED TENANT PROSPECTING

A key element to a Sublease Marketing Campaign is identifying thoughtful targets and ensuring the opportunity is promptly and clearly brought to their attention. We can accomplish this by developing a comprehensive list of Target Subtenant Prospects and sharing the Sublease opportunity with those teams through tailored campaigns.

IDENTIFY SUBTENANT TARGETS • Active tenants in the market in target size range • Existing tenants in subject building/project • Tenants in nearby buildings with near term critical dates

1 2 3 4

ORGANIZE LIST OF KEY DECISION MAKERS • Identify Key Decision Maker(s) and/or Brokerage Partners at Target Companies • Understand Position of Company in Market and Key Pain Points

PERFORM OUTREACH • Conduct campaign through personalized emails, phone calls and e-blasts • Canvas regional brokerage community through direct contact, social media and open houses

TRACK MARKET ENGAGEMENT • Monitor activity from market and issue weekly updates • Perform proactive follow-up with interested parties

CUSHMAN & WAKEFIELD | 9

SUBLEASING PROJECT TIMELINE

While the timeline may evolve depending on market demand, these are key milestones to manage against and develop strategies for.

WEEK 1-3

Transition

• Confirm team goals & objectives • Establish timing & financial expectations • Review master lease and legal obligations • Evaluate vendor contracts, if any • Execute listing agreement

WEEK 2-3

Analysis

• Review/prepare floor & furniture plans • Identify space deficiencies for correction • Reduce unnecessary operating expenses • Analyze market economics and competition Identify tenants in market and prospect candidates

WEEK 3-4

Marketing

• Finalize subleasing strategy • Estimate market value and pricing strategy • Develop marketing program & tactics • Initiate communications programs • Advertise opportunity through applicable platforms • Directly canvass key prospects & network (ongoing) • Report on tenant inquiries and progress (ongoing)

MARKET DEPENDENT

Execution

• Qualify prospects and identify potential risks • Negotiate offer economic and operational terms • Finalize negotiations, terms and conditions • Coordinate landlord consent process and execute • Turn over space

PROJECT CLOSE

Close Out & Follow Up

• Finalize sublease abstracts & key dates • Summarize critical information & obligations • Coordinate necessary vendors, if appropriate

10 | TENANT ADVISORY GROUP

DAY ONE STRATEGY

ENGAGE THE MARKET We will engage the following groups to ensure the space is front and center in the market: • Major tenants in nearby buildings • Active tenants in the market seeking over 50K SF • Brokerage community

DEVELOP MARKETING MATERIALS The marketing program should begin immediately as larger subtenants typically begin their search 1-2 years prior to LXD: • Advertising campaign • Sublease fact pack • Email blasts • Broker events • Direct outreach

DISCUSSION WITH OWNERSHIP • Continue discussions with landlord, including potential for termination or blend and extend expectations for full campus strategy • Identify interest in cafeteria/ fitness center photography for cross marketing • Inform ownership of marketing plan and listing • Confirm direct rent

CUSHMAN & WAKEFIELD | 11

STEVE BILLIGMEIER Executive Managing Director +1 303 813 6413 steve.billigmeier@cushwake.com

ROB BAIN Director +1 303 813 6452 rob.bain@cushwake.com

SID DIXON Director +1 303 312 4273 sidney.dixon@cushwake.com

RYAN STEINBACH Business and Marketing Director +1 303 312 4213 ryan.steinbach@cushwake.com

cushmanwakefield.com

Copyright © 2020 Cushman & Wakefield. All rights reserved.