Equity Commonwealth (EQC) Risk Analysis

Under various federal, state and local laws and regulations, as the former owner or operator of real estate, we may be liable for costs and damages resulting from the presence or release of hazardous substances, including waste or petroleum products, at, on, in, under or from such property, including costs for investigation, removal or remediation of such contamination and for natural resource damages arising from such contamination. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such contamination, and the liability may be joint and several. In addition, the presence of contamination or the failure to remediate contamination at our property may expose us to third-party liability for costs of remediation and/or personal injury or property damage, adversely affect our ability to lease or sell such property, or adversely affect our ability to borrow using such property as collateral. Environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. If contamination is discovered on our former properties, we may remain responsible for costs and liabilities arising from environmental issues related to representations and warranties we made in sales agreements for sold properties. We also may be liable for the costs of removal or remediation of hazardous substances or waste at disposal or treatment facilities if we arranged for disposal or treatment of hazardous substances at such facilities, whether or not we own or operate such facilities. In addition, future environmental investigation and remediation costs, including capital expenditures for environmental projects, may increase because of new laws and regulations, changing interpretations and stricter enforcement of current laws and regulations by regulatory authorities, expanding groundwater and other testing requirements, and new information on emerging contaminants such as per- and polyfluoroalkyl substances ("PFAS"), as well as uncertainty regarding remediation methods for such emerging contaminants. Some of our sold properties have been or may in the future be impacted by releases of hazardous substances or petroleum products. Such contamination may arise from a variety of sources, including historic uses of our properties for commercial or industrial purposes, spills of such materials at adjacent properties, or releases from tanks used on our or nearby properties to store petroleum or hazardous substances. Additionally, current and former operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties, may have affected or may in the future affect the environmental condition of our property. We and our former properties are subject to various federal, state and local regulatory requirements related to environmental, health and safety matters, such as environmental laws, state and local fire and safety requirements, building codes and land use regulations. Failure to comply with these requirements could subject us to governmental fines or private litigant damage awards, which could reduce the amount of liquidating distributions we pay to our shareholders. In addition, compliance with these requirements, including new requirements or stricter interpretation of existing requirements, may require significant expenditures. We do not know whether existing requirements will change or whether future requirements, including any requirements that may emerge from pending or future climate change laws or regulations, will develop. Our reputation could be negatively affected if we violate environmental, health or safety laws or regulations. Buildings and other structures on the properties that we formerly owned or operated contain, may contain, or may have contained, asbestos-containing material ("ACM"). Environmental, health and safety laws require that ACM be properly managed and maintained, and include requirements to undertake special precautions, such as removal or abatement, if ACM would be disturbed during maintenance, renovation, or demolition of a building, potentially resulting in substantial costs. Moreover, laws regarding ACM may impose fines and penalties on owners, employers and operators, and we may be subject to liability for releases of ACM into the air in sold buildings and third parties may seek recovery from former owners or operators of real property for personal injury associated with ACM. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues also can stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. The presence of mold or other airborne contaminants in our sold buildings could expose us to costs and liabilities to address these issues, including from third parties if property damage or personal injury occurs.

We rely on information technology ("IT") networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including financial transactions and maintenance of records, which may include personal identifying information of former tenants and lease data. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential tenant information, such as individually identifiable information relating to financial accounts. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced to third party service providers. In addition, information security risks have generally increased in recent years due to the rise in new technologies, including artificial intelligence, and the increased sophistication and activities of perpetrators of cyber attacks. Although we have taken steps to protect the security of the data maintained in our information systems, it is possible that our security measures will not be able to prevent the systems' improper functioning, or the improper disclosure of personally identifiable information such as in the event of cyber attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers, including ransom attacks, and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. The costs related to cyber attacks or other security threats or disruptions may not be fully insured or otherwise indemnified. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could materially and adversely affect us and our ability to pay liquidating distributions.

Before making the final liquidating distribution, we will need to pay or arrange for the payment of all of our transaction costs in the Plan of Sale and all other costs and all valid claims of our creditors and claimants. Our Board may also decide to establish a reserve fund to pay contingent claims. To the extent that we have underestimated these costs in calculating our estimated liquidating distributions, our actual liquidating distributions may be lower than our estimated liquidating distributions. Further, if a reserve fund is established, payment of liquidating distributions to our shareholders may be delayed or reduced.

As with other publicly traded equity securities, our common share price depends on various market conditions that may change from time to time. Among the market conditions that may affect the value of our common shares are the following: - the extent of investor interest in our securities;- the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;- the delisting of our common shares in connection with the Plan of Sale;- national and global economic conditions;- interest rates;- changes in tax laws;- our financial performance; and - general stock and bond market conditions. Changes in one or more of these market conditions could cause the market price of our common shares to decline, which would reduce the amount of liquidating distributions we pay to our shareholders.