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TECHNOLOGY PRACTICE GROUP YOUR PARTNER FOR ENTREPRENEURIAL GROWTH

Cushman & Wakefield’s Technology Practice Group brings together exceptional advisors from entrepreneurial clusters across the FROM EMERGING TECH TO PUBLICLY TRADED

globe to serve the dynamic needs of technology companies from early stage to mature. Our integrated, global team is uniquely situated to offer emerging industries a true partnership and a full suite of bespoke services as they evolve.

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

2 | TECHNOLOGY PRACTICE GROUP

YOUR GLOBAL PARTNER As a large global firm with more the 50,000 employees in 60 countries, we offer a full suite of services, vast international connectivity and expertise. As a tech-focused practice, we share the creative and entrepreneurial spirit of our clients, and in doing so develop unique and nimble solutions for our clients’ real estate portfolios.

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WE HELP YOU SCALE WITH A BESPOKE MENU OF SERVICES. 2 We are with you every step of the way. Whether its securing your first coworking space for 10 employees or expanding regionally or nationally into talent hot spots, we will help you meet your unique financial and operational goals. 1-10 Employees 10-100 Employees COWORKING / SHARED FIRST OFFICE

500-3K SF Space

3K-20K SF Space

Challenges • Distraction • Security • Cost

Challenges

• Timing the scale • Higher rent obligation vs. funding/revenue

Cushman & Wakefield Services Solution

• Brokerage Advisory • Lease Review & Negotiation • Financial Decision Analysis & Support Cushman & Wakefield Services Solution

• Coworking Evaluation & Placement • Brokerage Advisory

HEADQUARTERS

NATIONAL/INTERNATIONAL

100-500 Employees

500+ Employees

20K-100K SF Space

100K+ SF Space

Challenges • Lease Term • Scalability

Challenges

• Significant real estate expense • Lost start-up mentality • Synthesizing data across platforms

• Brokerage Advisory • Lease Review & Negotiation • Financial Decision Analysis & Support • Business Incentives Negotiation • Labor Analytics & Business Consulting • Project & Development Services • Global Market Intelligence • Vendor Assessment & Selection • Portfolio and Lease Administration • Change Management Consulting Cushman & Wakefield Services Solution

4 | TECHNOLOGY PRACTICE GROUP

SERVICES SPOTLIGHT

GLOBAL SITE SELECTION & LOCATION STRATEGY

Our Strategic Consulting practice offers a wide range of services, from helping you identify strong talent markets to designing a workplace that aligns with corporate culture. Our team also provides Change Management services, helping companies successfully adopt and communicate change in order to drive organizational success and outcomes.

LOCATION DRIVERS

Talent Markets with talent that align with growth needs, culture & cost

Taxes & Incentives Implications of state and local taxes & government incentives

Real Estate Availability & cost of suitable real estate

Implementation TI scope & timing, zoning & permitting, utilities

Logistics Proximity to key transit; parking & shuttle needs

Customers Access to customer & partner networks & industry clusters

Government Government regulations, currency stability

Risk Natural disaster, employee safety, IP protection

Cultural/Personal Cultural fit, housing, higher education, COL

As you grow, we respond.

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SERVICES SPOTLIGHT

PORTFOLIO ADMINISTRATION

Our Portfolio Administration team will abstract your lease documents and service agreements into a robust technology platform that provides Critical Date notification as well as financial reporting capabilities to ensure bills are paid on time for the correct amounts. Through this service you will have complete transparency into your real estate portfolio data and be able to efficiently locate legal documents and English-abstractions of critical lease terms.

CUSHMAN & WAKEFIELD PORTFOLIO ADMINISTRATION BY THE NUMBERS 66 Languages 1.4B SF Managed $10M Client Savings / Year 350 Global Resources 28 Platforms

Lease Data Management • Primary Database Maintenance • Lease Term Abstraction • Critical Dates Monitoring

Financial Management • Landlord Invoice Review • Rent Escalations Confirmation • Database Maintenance • Monthly Payee Reporting

Lease Accounting • Client-Managed Lease Accounting Module • Data Gap Analysis • Customized Ledger Accounts

6 | TECHNOLOGY PRACTICE GROUP

SERVICES SPOTLIGHT

PROJECT & DEVELOPMENT SERVICES

Our Project Development Services (PDS) team ensures your construction projects are completed on-schedule and on-budget. With field professionals around the world, we provide local oversight to landlord and tenant-led build outs. Our PDS practice offers incredible purchasing power to our clients that can be used to obtain preferred pricing on furniture, fixtures, equipment and building finish materials.

Project Management • Design Management • Project Planning & Budgeting • Procurement Management • Cost Consultancy

Design & Build • Project Management • Full Procurement Services • Construction Management • Development Management • Post Project Manual Management

Construction Management • Construction Scheduling • Procurement Management • Contract Administration • Construction Monitoring • Health Safety • Environment

Supplementary Services • Feasibility Study • Due Diligence • Sustainability • Workplace Strategy • Change Management • Relocation / Move Management

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Cushman & Wakefield offers award-winning technology solutions that are changing the way in which occupiers transact and manage their portfolios. TECH (FOR TECH)

SECURELY MONITOR GLOBAL LEASE ACTIVITY Consider our collaborative, customizable and secure online portal. It provides full transparency into global account activity and seamless access to account resources, playbooks and templates.

GROW WITHOUT PAINS As companies scale, they undoubtedly encounter many parallel workstreams. Our transactions portal keeps our integrated team informed 24/7 on project status and action items.

DIAGNOSE BEST MARKETS FOR ENTRY Our interactive and intuitive mapping platforms arm you with intelligence on labor trends, demographics, and customer/ vendor hot spots, provoking informed location decisions.

8 | TECHNOLOGY PRACTICE GROUP

ENJOY EXECUTIVE- FRIENDLY REPORTING Integrated with our client’s technology, we provide interactive, executive-friendly reports that inform new portfolio opportunities and alert critical dates and potential red flags. Global teams can stay abreast of portfolio dynamics and monitor ongoing performance in real time.

IDENTIFY OPPORTUNITIES AT A GLANCE Integrated dashboard reporting allows our clients to synthesize data across traditionally disparate technology solutions. Visualizing portfolio intelligence allows our teams to spot opportunities and push proactive strategies.

BE HEARD Client satisfaction and ongoing improvement are paramount. Our web-based client surveys provide real-time feedback to project teams managing the partnership.

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THOUGHT LEADERSHIP & INDUSTRY INTELLIGENCE View a complete list at cushwaketech.com or click on individual thumbnails below.

MARKET TRENDS & OVERVIEW Common Local Market Practice

OVERVIEW OF MARKET NORMS AND TRENDS – COMMON LOCAL PRACTICES There are several key concepts causing curiosity among today’s tenants. This is a Montreal-based example of today’s Market Norms and Trends. Cushman & Wakefield can provide similar perspectives on any global market your team is interested in.

Lease Term

In Quebec, most office lease terms for new transactions or renewals range from 3 to 10 years, with the most common term commitment being 5 years. Considering that Montreal is currently exhibiting a Tenant’s market & that ACME Company has high standards for their leasehold improvements, a longer term (such as 10 years) would undoubtedly uncover opportunities such as new constructions, build-to- suit projects as well as conversion of industrial buildings, all while keeping the costs relatively low. A longer term also increases negotiating leverage to build in flexibility into the lease agreement including the rights to expand & contract the space, rights of first refusal, termination options along with rights to assign and\or sublease and so on.

Rent Structure

A common practice in the market, when considering either institutionally or privately owned office buildings, is to have leases that are net-net to the landlord. This means the parties establish a minimum rent (Net Rent) and the Tenant shall pay all costs and expenses relating to the operation and maintenance of the building, the leased premises and/or the business carried on by the Tenant (known as “Additional Rent”). Landlords remain responsible for all structural elements of the building.

Rent Escalations

NET RENT The escalations of the Net Rent shall be negotiated and agreed upon by both parties in the Lease. For long-term leases, there are generally predetermined Net Rent increases, i.e. $15.00 Net (years 1-5) &

$16.00 (years 6-10) ADDITIONAL RENT

Tenants generally pay their proportionate share of the Property Taxes & Building Operating Expenses according to the Landlords’ audited financial statements. On average, the Additional Rent increases by 2 to 3 percent annually. Some landlords accept for a cap to be imposed on such augmentations, limiting the building operational expense increases to a max out percentage (generally 3-4%).

Security Deposits

A common practice of Landlords is to require a minimum deposit or prepaid rent equivalent to the first and last months’ Net Rent and Additional Rent plus taxes or more depending on the solvency of the Tenant. In the case of some large and reputable organizations like ACME Company, however, we have been successful in having such deposits excluded from lease agreements.

AUTHOR: Erik Langburt Senior Vice President, Investment Sales & Leasing +1 514 841-3818 erik.langburt@cushwake.com

cushwaketech.com cushmanwakefield.com

An Emerging Technology Advisory Group Publication

CRE TECH FOR DESK ALLOCATION, HOTELING & MEETING ROOM BOOKING This overview of several innovative CRE technologies is appropriate for occupiers of flexible workplace solutions and a mobile workforce. Now you can identify the right technology solutions for managing hot desking and conference room booking.

CRE TECH FOR DESK ALLOCATION, HOTELING & MEETING ROOM BOOKING An overview of the latest SaaS solutions which help clients allocate, & monitor, desk allocations (permanent and hoteling) & meeting room booking

SUZANNE MEHTA Building a Vision for Employee Engagement suzanne.mehta@cushwake.com

Suzanne leads the design and operationalization of the firm’s Employee Experience Program. The program helps our occupier clients establish a vision and strategy for enhancing user experience and service quality delivery in support of employee engagement, retention, and productivity.

Robin

Condeco

Teem

Essensys

• Robin software allows clients to schedule rooms and desks with integration across Google & Outlook calendars while provided real-time office maps and workplace analytics. • Robin integrates with digital meeting room signage via tablets and televisions and is scalable across enterprise- grade deployments

• Condeco helps clients manage meeting rooms, visitors, hospitality, services and video conferences across multiple locations and time zones. • Condeco Digitial Conference Room allows uses to instantly start a conference, schedule or release a room using PIN or RFID • Screens gather real-time information about how conference rooms are reserved and used and have auto-bumps for no shows.

• Teem provides space scheduling & management, visitor management, building wayfinding and workplace analytics. • Book conference rooms or desks through a mobile app, digital tablet display or voice activation • Integration with real-time occupancy sensors to support workplace analytics

• Software tailored for the coworking/flexible office industry, includes features specific to a flexible office manager such as move scheduler, WiFi manager/ stats, and support hub. • The software’s Space Publisher feature allows users to publish meetings rooms to online data aggregators and a space management tool to reserve and allocate desks and rooms on the fly

SEAN BUCKLEY Understanding & Implementing Tech Solutions sean.buckley@cushwake.com

At Cushman & Wakefield Sean advises clients on the Space & Workplace technology market landscape and trends. New products are analyzed and scored so that differentiators can be clearly communicated to interested clients. The level of engagement varies per client but can range from a simple phone call to confirm a client is on the right track in their own search to a full technology software selection project.

SaaS Solutions:

ELISA KONIK Managing Director, Brokerage & Strategic Services Chair, Emerging Tech Advisory Group elisa.konik@cushwake.com

Elisa Konik leads C&W’s Emerging Technology practice group, advising startups and high growth technology occupiers on their global real estate strategy. With a broad network across the globe, C&W’s Emerging Tech team has exceptional experience working with innovative tenants to find, negotiate and build cutting edge workplaces.

cushwaketech.com cushmanwakefield.com An Emerging Technology Advisory Group & Tenant Advisory Group Publication

Copyright © 2019 Cushman & Wakefield. All rights reserved. No warranty or representation, express or implied, is made to the accuracy or completeness of the information about the services contained herein, as Cushman & Wakefield does not own these services.

FLEXIBLE

DIRECT LEASE

FLEXIBLE WORKPLACE TO DIRECT LEASE ANALYSIS With our partnership you can formally evaluate a transition from a coworking or serviced office to a direct lease. This framework helps to qualify the quantitative and qualitative impact of long term traditional leases to help you identify the right inflection point for your portfolio’s growth.

Market Profile: Hong Kong, HK The accompanying analysis provides an estimated economic and qualitative comparative between our existing Flexible Workplace agreement (Managed or Serviced office) and a traditional Direct Office Lease. A direct lease alternative was chosen (10 min walk from current office) for representative pricing; however all terms are subject to negotiation and are estimates in nature.

Existing Office Obligation Address

Address XXX, XX Floor

Provider / Landlord

WeWork

Lease Expiry

8/31/20

RSF

1,000

The Workplace Team recommends evaluating Direct Lease alternatives in the range of 4K SF for a 3-5 year term commencing Sept 2020, in line with our current expiration.

Desks

Current Monthly Office Service Fees $USD

$XXX

Headcount – Current and Future Growth Projections:

2019 2020 2021 2022

36 Employees 40 Employees 44 Employees 38 Employees

18 Desks 20 Desks 22 Desks 24 Desks

2023

53 Employees

27 Desks

Note: 36 employees in market today at ratio of 2 Employees:Desk and a 10% per annum growth rate.

10 | TECHNOLOGY PRACTICE GROUP

We put industry-leading tools with real-life application in the hands of our emerging tech clients.

LEASE SECURITIZATION FOR A “START-UP” Technology companies often experience rapid growth through investment but may not have the longstanding balance sheet a landlord is accustomed to underwriting with a Fortune 500 company. How to securitize a lease is especially important when the landlord is spending tens of thousands, if not hundreds of thousands, of dollars to build your company’s new dream space. As a result, landlords expect some financial protections from the tenant as security. Securitization can come in several different forms, including a cash security deposit, a letter of credit, and a personal guaranty.

What’s New in Lease Securitization?

LEASE SECURITIZATION FOR A “START-UP” Technology companies often experience rapid growth through investment but may not have the long-standing balance sheet a landlord is accustomed to underwriting with a Fortune 500 company. This will guide you through your Security Deposit options.

WHAT IS SECURITI? A surety bond used to meet security deposit requirements in a commercial lease, replacing the need for cash or a letter of credit. Securiti acts like a more traditional insurance vehicle for tenants, but functions like a letter of credit for Landlords.

Cash Security Deposit This is the most common form of securitization in a lease. A ‘best-case’ security deposit is typically equal to one month of rent and is paid upfront at Lease Execution. The landlord holds the security deposit throughout the lease term and returns it back to the tenant shortly after expiration, provided the tenant adheres to its obligations in the lease. The size of the security deposit may increase depending on the amount of money a landlord invests on Tenant Improvements and a tenant’s own credit worthiness. In some cases, a landlord will ask for up to 6 to 12 months of rent (or more) as a security deposit. This is challenging for any company, especially a startup, who may be strapped for cash. For larger security deposits, both Cash and other formats noted below, a Burn Down may be negotiated which allows the deposit amount to be reduced over time. Provided you remain in good standing, and are not in lease default, Burn Downs may be negotiated against milestones such as: Time Elapsed, Closing of Future Funding Rounds, Profitability or other measures. Letter of Credit Provided the Landlord is amendable, some companies may opt to secure a Letter of Credit (LOC), in lieu of cash. In some instances, a Landlord may require a Letter of Credit. Typically, a Letter of Credit is best secured from the bank where the company does the majority of its banking business. An LOC is typically cash collateralized, meaning that the company will not be able to access the equivalent cash funds while the LOC is active. With an LOC, the tenant typically pays the bank a fee, fees vary by bank. While this can vary by legal jurisdiction, an LOC may be perceived as providing better bankruptcy protection to a landlord because a cash security deposit is typically considered property of the debtor’s bankruptcy estate and may be subject to other claims made against the estate.

HOW DOES IT WORK?

Pay a Small Annual Premium Rates are determined by the results of Securiti’s underwriting

Replaces Your Security Deposit Your landlord is issued a surety bond backed by Chubb Insurance and other A-rated carriers Keep Your Cash

Spend your money the way you want

POTENTIAL ADVANTAGES Securiti allows you to keep your cash & maximize operational flexibility • No collateral required • Off balance sheet financing with no impact on leverage metrics • No impact on credit capacity so your business can borrow as needed

Personal Guaranty A Personal Guaranty is a more uncommon solution though it may come into play for early stage businesses. Essentially, the owner of a company puts up their personal assets as collateral should there be a lease default. This is typically a ‘Plan C’ option, and not a desirable position if other security vehicles can be achieved. If signing a Personal Guaranty, negotiating a Burn Down schedule will be especially important.

cushwaketech.com cushmanwakefield.com An Emerging Technology Advisory Group & Tenant Advisory Group Publication

Real Estate Business Case

Market

Project Type

Oakland, CA

REAL ESTATE BUSINESS CASE Gaining consensus and approvals for multi- year projects can be a challenge for rapidly growing businesses. Our intuitive Business Case Approval forms illustrate the thoughtful process we undertake on behalf of clients from inception to execution, providing transparency into local trends and comps, labor markets and financial impacts that speak to executives.

New Lease

Purchase

Renewal

Sublease

Project Drivers (Highlight All That Apply)

Market Expansion

Exit or Downsizing

New Market

Consolidation

Key Objectives (Select Top Three)

Reduce Operating Costs in Market Upgrade Workplace Culture Support Business Unit Growth Improve Operational Efficiencies

Attract and Retain Top Talent

✔

Reduce Underutilized/Surplus Space Create Long Term Stability in Market

✔

Office Proximity to Customers

✔

Notes/Other: Text Goes Here

Head Count Forecasting & Space Planning

Design Standards: X RSF Per Employee Est. RSF Need: X to X RSF

50 2018

50 2019

50 2020

50 2021

50 2022

50 Beyond

Notes: Text Goes Here

Existing Obligations Across Metro Area Address

Lease Expiry 1/1/18 0/0/00

RSF

Head Count

Seat Count

Current Annual Base Rent

555 12 th Street, Oakland, CA 12345 Street, City, State

10,000

30 00 00

20 00 00

$1.1M

00 00

12345 Street, City, State

0/0/00

While each market and deal is unique, most commercial real estate leases fall into one of the formats noted below. It is critical to understand how your rent is structured to avoid hidden fees when budgeting for your total annual real estate obligation.

OPERATING EXPENSES: What’s Included in Your Base Rent?

Typical Rent Structures

OPERATING EXPENSES: WHAT’S INCLUDED IN YOUR BASE RENT? While each market is unique, most commercial real estate leases fall into one of four typical rent structures. It is critical to understand how your rent is structured to avoid hidden fees when budgeting for your total annual real estate obligation.

Full Service Gross

Industrial Gross

Modified Gross

Triple Net

Most common structure for U.S. office leases. Base rent includes tax, insurance, utilities, in-suite janitorial,

Base rent excludes utilities and in-suite janitorial. While this varies by market, $0.40/SF per month is a reasonable estimate to convert IG leases to a FSG equivalent.

Structure can vary but typically excludes utilities, in-suite janitorial, and CAM.

Base rent only; tenant responsible for tax, insurance, utilities, in-suite janitorial, and CAM.

and Common Area Maintenance (CAM).

Internet/Phone and related cabling are typically a tenant expense and excluded in rent structures, with the exception of most co-working facilities and executive suites.

Operating Expenses & Base Year Explained Full Service Lease

Base Year: • Established in first year of occupancy • No additional Operating Expense (OpEx)/ additional Rent due

Example: Tenant is responsible for cost delta from current year over Base Year. Total Building OpEx in Base Year $1M

YEAR 1

Total Building OpEx in Current Year

$1.1M

Year Two: • Tenant assumes pro-rata share of total building OpEx increase over Base Year • Owner protected from excessive annual OpEx increases • No additional OpEx rent due in the event of second year OpEx reduction

YEAR 2

Delta from Current Year over Base Year

$100K

Your Pro-rata Share of Building OpEx (Premises SF/Building RSF)

3.55%

Your Additional Rent in Current Year: $3,550 annually or $296/mo

$3,550

Annual Base Rent Escalation

Your rent will likely escalate each year. How it escalates should be negotiated and then specified in your lease.

3% In many U.S. markets, office rents increase by

per year or are CPI-based.

cushwaketech.com An Emerging Technology Advisory Group Publication

CUSHMAN & WAKEFIELD | 11

12 | TECHNOLOGY PRACTICE GROUP

Richardson, TX 42,362 Square Feet Tenant Representation and Project Management

CHALLENGE • Consolidate three separate buildings into one Class A, 100% HVAC flex space • Upgrade image • Address lack of options in a tight market with a creative solution SOLUTIONS APPROACH • Develop a forward-thinking real estate strategy that enhanced the customer’s experience and increased employee engagement • Recommended a build-to-suit lease due to lack of market options and flexibility

RESULTS • Rent savings

• Increased tenant improvement allowance • No deferred maintenance of old mechanical systems • Ability to terminate lease early • Improved footprint and increased efficiency • Varidesk furniture solutions and open plan design

$3.2M in total value-add savings

Global Tech Company

Mountain View, CA 70+ Global Offices

Global Tenant Representation, Strategy Consulting and Flexible Office Execution CHALLENGE • Conduct and execute a global search for secondary Center of Excellence outside of headquarters. • Client’s portfolio is nimble and widely distributed across the globe. • A highly mobile salesforce and quickly evolving industry demands mandated strong portfolio flexibility and sensitivity to globally diverse market and cultural standards. SOLUTIONS APPROACH • Evaluated technical talent pool (depth, cost, skills), language compatibility, tax implications, country-wide legal trends, and key regional and economic differentiators. • Proactively identified opportunities to right- size the portfolio over time, guided by density

standards and occupancy rates, market rent assessments, critical dates and a robust communication channel of in-market field intelligence. RESULTS • Given a large concentration of Flexible Workplace locations, team has overseen the acquisition, evaluation, and renewal of over 50 distinct office agreements in the first year of partnership. • Developed best-in-class processes, including global standards for new office acquisition, flexible-workplace-to-traditional-leasing inflection points, and global MSAs with third- party flexible workplace providers.

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About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and approximately 60 countries. In 2021, the firm had revenue of $9.4 billion across core services of property, facilities and project management, leasing, capital markets, and valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Elisa Konik Chair Technology Practice Group +1 510 891 5851 elisa.konik@cushwake.com

cushmanwakefield.com

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