Danville, California

Retail Market Report

4th Quarter 2010

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

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“Can’t Touch This”

Danville Remain Unscathed Through 2010 Positive absorption was the trend in 2010. Downtown remained stable with a few businesses closing their doors and new shops quickly scooping up on empty space. Grocery anchored shopping centers remain virtually fully occupied. The big story of the year is the success at Blackhawk Plaza, Rose Garden, and The Livery. Overall, Danville retail vacancy rate is dramatically lower than San Ramon, Pleasanton, Livermore, and Dublin (see graph on reverse).

Activity along Hartz Avenue brought a couple welcomed additions. That Bar opened in November, filling the vacancy left behind by Vinoteca. Sweet Street took over the former candy store at 301 Hartz in December. La Boulange Bakery opened on Railroad Avenue next to Lunardi’s back in August. Other new businesses in 2010 include Dandelions, The Savvy Shopaholic, Akira Bistro, Los Ponchos, Miglet’s, and Koko Fit club. Despite strong lease activity we did not see a substantial amount of sales through 2010.

The Livery was able to find a flock of new tenants. The year was kicked-off by just about every residential real estate company in town moving to the Livery. In addition, Chase Bank grew into a larger space and the addition of Jules Thin Crust and Stork’s Nest soaked up space. The Rose Garden is looking to continue the leasing momentum created by The Studio taking over the large day spa space left behind by Burke Williams. Blackhawk Plaza also saw an uptick with the addition of Prickly Pear Cantina in the former Coa space and the addition of retailers such as Babycoo, Pink Stripes, and My Backyard.

Recent Transactions

Market Snapshot

Vacancy Rate by Product Type

Key Terms & DefinitionsInventory: Total square footage of retail space in the market

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

Absorption: The change in availability from the previous quarter.

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

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

Retail Strip Center: Shopping centers, strip retail centers, and buildings over 10,000± square feet that do not have a grocery anchor.

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

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

Tenant/Buyer Location Square FeetThe Studio/Club Sport The Rose Garden 17,000Prickly Pear Cantina Blackhawk Plaza 3,700Koko Fit Club 499 San Ramon Valley Blvd. 1,500Sweet Street 301 Hartz Ave. 1,200

** - Building purchase

Grocery Anchored Inventory: 332,109Grocery Anchored Availability: 12,988Grocery Anchored Vacancy Rate: 3.91%

Retail Strip Inventory: 688,340Retail Stripl Availability: 52,274Retail Strip Vacancy Rate: 7.45%

Downtown Retail Inventory: 312,404Downtown Retail Availability: 7,266Downtown Retail Vacancy Rate: 2.33%

Danville Retail Inventory: 1,332,853Danville Retail Availability: 72,528Danville Retail Absorption: - 1,876Danville Retail Vacancy Rate: 5.44%

Lee & Associates Danville Retail Market Report

QUARTER IN REVIEW

Danville Retail Vacancy and Rental Rates

4th Quarter Completed Lee & Associates Deals

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4th Quarter 2010

Lee & Associates - Your Commercial Real Estate Connection

Tri-Valley Vacancy ReportVacancy Rate vs. Average Asking Rate

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

LEASED6,700± Square Feet

4500 Tassajara Rd., Dublin

SOLD20,000± Square Feet

7099 Amador Valley Plaza Rd., Dublin

LEASED1,500± Square Feet

499 San Ramon Valley Blvd., Danville

6.12%

5.21%

5.44%

5.00%

5.20%

5.40%

5.60%

5.80%

6.00%

6.20%

$1.00

$1.50

$2.00

$2.50

$3.00

Vacancy

Average Asking Rate (NNN)

6.12%

5.21%

5.44%

4.60%

4.80%

5.00%

5.20%

5.40%

5.60%

5.80%

6.00%

6.20%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2Q10 3Q10 4Q10

Vacancy

Average Asking Rate (NNN)

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

Services Offered:

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RETAIL OFFICE INDUSTRIAL

Coco Cabana Restaurant & Lounge REI Coming Late 2011 Koko Fitclub

Jessica Stewart Retail Specialist

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

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