BOSTON INDUSTRIAL MARKET

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1 BOSTON INDUSTRIAL MARKET FIRST QUARTER 217 INDSTATUS WAREHOUSE SPACE Inside... Manufacturing market posts largest absorption in more than a year Warehouse rents reach highest price since 24 Six consecutive quarters of positive absorption for the Flex market Manufacturing market remains strong along Route 128 Limited availability for warehouse space in The Boroughs Heavy warehouse absorption in Route 128 North *Unless otherwise noted, all data is as of or for the quarter ended March 31, 217.

2 BOSTON INDUSTRIAL MARKET FIRST QUARTER 217 Conservative Start to 217 for the Industrial Market Market activity spearheaded by Route 128 North The Greater Boston industrial market opened up 217 modestly. Despite overall negative absorption of 54, square feet this quarter, the industrial market, consisting of manufacturing and warehouse space, has positively absorbed over 1. million square feet over the last twelve months. Experiencing positive absorption for the fourth consecutive quarter, the manufacturing market saw 13, square feet positively absorbed in the first quarter of 217. This activity brought down the vacancy rate by.7 percentage points to 11.3 percent, while the average asking rent increased slightly to a current price of $8.38 per sf. Route 128 North led the charge in the manufacturing market, with many tenant moveins driving the absorption figure to positive 8, square feet, including UPS for 77, square feet at 4 Fordham Road in Wilmington. The warehouse market saw its eighteen quarter positive absorption streak come to an end, this quarter experiencing 157, square feet of negative absorption. That being said, there were certainly some bright spots in the market. Route 128 North also thrived in the warehouse market, with 222, square feet of positive absorption as well as a drop in the vacancy rate of a full percentage point to 5.8 percent. Interstate 495 West also performed well, positively absorbing 14, square feet while extending its streak to four quarters straight. The flex market continues to function robustly, as flex space in the Greater Boston area has now been positive for six consecutive quarters. In the first quarter of the year, there were 9, square feet of positive absorption, while the vacancy rate and average asking rent remained steady at 11.4 percent and $1.36 per sf, respectively. While the I495 submarkets saw 25, square feet positively absorbed this quarter, the Boroughs (Northborough, Westborough, Southborough, and Marlborough) were the front runners, collectively absorbing 71, square feet, while vacancy dropped to an alltime low of 1.5 percent. ECONOMY In midmarch, The Federal Reserve raised the interest rate for the second time in three months, to 1 percent. As the economy remains strong and confident, the forecast calls for more subtle hikes throughout 217 and into 218. Leaning on its sturdy foundation of education and health care, Greater Boston continues to flourish, adding more jobs to the market while achieving lower than average national unemployment rates. As the overall Boston economy continues to strengthen, the industrial and flex markets have remained very consistent and strong over the last several years. With strong leasing activity expected to continue throughout the year, expect more of the same to come. INDUSTRIAL TRENDLINES 5YEAR TREND VACANCY RATES RBA DELIVERED CAP RATE SALE PRICE JOB GROWTH *pp = percentage points CURRENT QUARTER 9.8% Vacancy Rates increased slightly 54k SF Absorption decreased in Q1 $6.7 PSF Asking rents rose slightly +.2k SF New Inventory delivered in 495 South 6.9% Cap rates were unchanged in Q1 $83 PSF Sale prices averaged $83 per sf in Q1 +1,146 jobs Job growth increased in Q1 ** = Trendlines stats exclude Flex 2 REAL ESTATE OUTLOOK BOSTON INDUSTRIAL MARKET Q1 217

3 WAREHOUSE The Greater Boston warehouse market, comprised of 57 MSF of inventory, experienced its first quarter of negative absorption in eighteen quarters, with 157, sf negatively absorbed. & VACANCY Total Market, Class A & B, Warehouse Thousands SF Absorption Qtrly Vacancy Rate 1, Since 213, tenants have positively absorbed over 6.4 million sf of warehouse space. 25.% 8 2.% 6 Absorption has been positive in Route 128 North for the last five quarters, with 222, sf this quarter, the most since Q % % While the overall vacancy rate rose slightly to 9.4 percent, both Route 128 North and I495 West saw vacancy decrease, to 5.8 percent and 6. percent, respectively. 5.% (2) (4) 212 Q1 213 Q1 214 Q1 215 Q1.% 217 Q1 216 Q1 The average asking rent for warehouse space in Greater Boston is currently $6.5 per sf, with the low being $5.79 per sf in I495 South and the high being $6.78 per sf in Route 128 North. While 5 Fifth Street in Peabody is still under construction, Cabot Business Park (6 West Street) in Mansfield was completed and delivered to the market, adding,2 sf to the 495 South market. Total Market, Class A & B, Warehouse Per Sq. Ft. Total Market Route 128 I495 $6.5 $6.3 Stavis Seafoods moved into 45, sf at 1 Technology Park in Peabody, while S.G. Torrice Company moved into 34, sf at 7 Lopez Drive in Wilmington, both contributing to the positive absorption in Route 128 North. $6.1 $5.9 $5.7 $5.5 $5.3 $5.1 $4.9 Clarion Partners sold 4 Manley Street in West Bridgewater to Turtle Bay Partners for $13,1, (216,4 sf, $6.54 per sf). $4.7 $ Q1 213 Q1 214 Q1 215 Q1 216 Q1 217 Q1 Boston Warehouse Market Indicators by Submarket SUBMARKET Route 128 North INVENTORY DELIVERIES (SF) QUARTER NET LTM* NET GROWTH** DIRECT SUBLET VACANCY AVERAGE RATE PSF 9, % 8.1%.6% 5.8% $ 154.%.%.%.% Route 128 South 12,585 (42) % 18.4% 2.8% 8.6% $ 6.1 Route 128 Submarkets 22, % 13.7% 1.8% 7.3% $ % 8,1 (26) 61.8% 9.3% 5.5% 8.9% $ % Route 128 West I495 North I495 North High Bay I495 West I495 West High Bay I495 South I495 South High Bay I495 Submarkets I495 High Bay Route 128 & I495 Combined Central Areas QTR*** CHANGE NA 7.3% 2.3% 3, % 5.5% 4.6% 3.1% $ % 5, % 1.%.% 6.% $ % % 9.1%.% (597) 3.9% 17.3%.4% 1,787 17,894 (326) 9.1% 14.6% $ NA % 8,44 (157) (325) 4.7% 2.6%.% 14.6% $ % 31,264 (337) (166).6% 14.% 1.7% 11.7% $ % 13,139 (157) (97).8% 15.2% 1.2% 1.9% $ % 53,3 (158) % 13.9% 1.7% 9.8% $ 6.2.4% 3,48 56,96 1 (157) % 4.% 3.5% 1.9% $ % % 13.4% 1.8% 9.4% $ 6.5.2% ALL AMOUNTS, EXCEPT PERCENTAGES AND DOLLAR FIGURES IN THOUSANDS. High Bay denotes 28'+ ceiling height *LTM = Last Twelve Months // **LTM absorption as a percentage of occupancy levels twelve months ago // ***Twelve months change in asking lease rate R E A L E STATE OU TL OOK B OSTON I NDU STR I AL M A R KE T Q

4 BOSTON INDUSTRIAL MARKET FIRST QUARTER 217 MANUFACTURING & VACANCY Thousands SF Total Market, Class A & B, Manufacturing (1) Absorption Qtrly Vacancy Rate 2.% 18.% 16.% 14.% 12.% 1.% (2).% 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217 Q1 8.% 6.% 4.% 2.% Manufacturing space in the Greater Boston area experienced positive absorption for the fourth straight quarter as 13, sf was positively absorbed, bringing the twelve month total to 233, sf. For the first time in two years, all six Route 128 and I495 submarkets saw manufacturing space positively absorbed, accounting for 99, sf of absorption. Overall vacancy of manufacturing space in the Greater Boston area dropped.7 percentage points from last quarter to a current rate of 11.3 percent. The Route 128 North market led the market, contributing 8, sf of positive absorption, while experiencing a drop in vacancy from 7.9 percent to 5.5 percent, and an increase in the average asking rent to $11.94 per sf. While there is only 628, sf of manufacturing inventory in Route 128 West exists, the vacancy rate is currently 1. percent. Per Sq. Ft. Total Market, Class A & B, Manufacturing $9.5 $9. $8.5 $8. $7.5 $7. $6.5 $6. $5.5 $5. Total Market Route 128 I495 Approximately 66 percent of overall vacancy belongs to three buildings, which if removed from the inventory, would drop vacancy to 4.2 percent. Route 128 North saw the largest move in, as UPS occupied 77, sf at 4 Fordham Road in Wilmington. RandWhitney sold 125 Fisher Street in Westborough to Neo Technologies for $1,, (198, sf, $5.51 per sf). $ Q1 213 Q1 214 Q1 215 Q1 216 Q1 217 Q1 Boston Manufacturing Market Indicators by Submarket SUBMARKET INVENTORY DELIVERIES (SF) QUARTER NET LTM* NET GROWTH** DIRECT SUBLET Route 128 North 3, % 8.5%.7% 5.5% $ % Route 128 West % 3.1%.% 1.% $ 9.5 Route 128 South 2, % 16.4%.% 11.6% $ % Route 128 Submarkets 6, % 1.6%.4% 7.1% $ % I495 North 3,27 5 (15) 4.6% 32.6% 1.9% 28.6% $ % I495 West 1, % 6.9%.% 4.4% $ % I495 South 1, % 18.2%.6% 7.% $ % I495 Submarkets 6,517 8 (52) 1.% 22.5% 1.1% 17.% $ % Route 128 & I495 Combined 12, % 16.8%.7% 12.3% $ % Central Areas 1, % 7.7%.% 2.5% $ % 14, % 15.9%.7% 11.3% $ % ALL AMOUNTS, EXCEPT PERCENTAGES AND DOLLAR FIGURES IN THOUSANDS *LTM = Last Twelve Months // **LTM absorption as a percentage of occupancy levels twelve months ago // ***Twelve months change in asking lease rate VACANCY AVERAGE RATE PSF 4QTR*** CHANGE 4 REAL ESTATE OUTLOOK BOSTON INDUSTRIAL MARKET Q1 217

5 FLEX Greater Boston flex space saw 9, sf positively absorbed in the first quarter of 217, extending its streak to six consecutive quarters, with 989, sf absorbed over that time. & VACANCY Total Market, Class A & B, Flex Thousands SF Absorption Qtrly Both the vacancy and average asking rent remained steady from last quarter, as vacancy nudged.1 percentage points to 11.4 percent and the average asking rent increased ever so slightly to $1.36 per sf. Vacancy Rate 4 2.% 18.% 3 16.% 14.% 2 12.% 1.% 1 Route 128 North experienced the largest level of absorption, positively absorbing 76, sf while increasing the positive streak to five quarters in a row. 8.% 6.% 4.% (1) 2.% (2) 212 Q1 213 Q1 214 Q1 215 Q1.% 217 Q1 216 Q1 The Boroughs (Northborough, Westborough, Southborough, and Marlborough) saw 71, sf positively absorbed this quarter, the most in over a year. Vacancy is the Central Areas, which consists of all markets except Route 128 and I495, is currently 4.8 percent, more than 1 percentage points below the five year average of 15. percent. Total Market, Class A & B, Flex Per Sq. Ft. Total Market Route 128 I495 Notable moveins included Mintra at 417 South Street in Marlborough for 22, sf, and Fresenius at 2 Dan Road who have taken 48, sf and awaiting a move in shortly. $14. $13. $12. $11. $1. Three new leases were signed at 565 University Avenue in Norwood totaling 85, sf with DalTile, Hirsch Glass Corporation, and Boston Mutual Life Insurance. $9. $8. $7. $6. $5. $ Q1 213 Q1 214 Q1 215 Q1 216 Q1 Grander Capital Partners sold 11 Shawmut Road in Canton to The Seyon Group and Wheelock Street Capital for $116 per sf ($8,628,8, 74,38 sf). 217 Q1 Boston Flex Market Indicators by Submarket SUBMARKET INVENTORY DELIVERIES (SF) QUARTER NET LTM* NET GROWTH** DIRECT SUBLET VACANCY AVERAGE RATE PSF 4QTR*** CHANGE Route 128 North 8, % 11.5% 2.2% 5.9% $ % Route 128 West 1,186 (74) (58) 5.7% 22.% 2.6% 14.2% $ % Route 128 South 3,533 (23) % 12.%.8% 7.4% $ % 13,167 (21) % 12.6% 1.9% 7.% $ % I495 North 6,88 9 (13).3% 29.2% 4.6% 24.8% $ % I495 West 4, % 12.9% 2.4% 11.% $ 9.1.5% I495 South 3,253 (1) % 13.5%.% 6.5% $ % I495 Submarkets 13, % 2.2% 2.8% 16.% $ % Route 128 & I495 Combined 27, % 16.5% 2.3% 11.6% $ % % 7.5%.% 4.8% $ 3. 27, % 16.2% 2.3% 11.4% $ % Route 128 Submarkets Central Areas ALL AMOUNTS, EXCEPT PERCENTAGES AND DOLLAR FIGURES IN THOUSANDS *LTM = Last Twelve Months // **LTM absorption as a percentage of occupancy levels twelve months ago // ***Twelve months change in asking lease rate R E A L E STATE OU TL OOK B OSTON I NDU STR I AL M A R KE T Q

6 METHODOLOGY The information in this report is the result of a compilation of information on industrial properties located in the Boston metropolitan area. This report includes singletenant, multitenant industrial properties 2, SF and larger, excluding industrial warehouse, flex, and manufacturing properties owned and occupied by a user or government agency. CONTACT Chase Bourdelaise Director of Research, Northeast Region Chase.Bourdelaise@transwestern.com Tom Hovey Research Analyst Thomas.Hovey@transwestern.com 99 High Street, 3th Floor Boston, MA 211 T F Copyright 217 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.