The CoStar Industrial Report. T h i r d Q u a r t e r National Industrial Market

Transcription

1 The CoStar Industrial Report T h i r d Q u a r t e r

2 Third Quarter 2016 National Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview Inventory & Development Analysis Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions 2016 CoStar Group, Inc. The CoStar Industrial Report A

3 National Third Quarter 2016 Methodology The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing, under construction and under renovation Industrial buildings in each given metropolitan area. All Industrial building types are included, including warehouse, flex / research & development, distribution, manufacturing, industrial showroom, and service buildings, in both single-tenant and multi-tenant buildings, including owner-occupied buildings. CoStar Group's global database includes approximately 95.6 billion square feet of coverage in 4.4 million properties. All rental rates reported in the CoStar Industrial Report are calculated using the quoted rental rate for each property. CoStar regularly opens new markets to expand its geographic coverage which results in varying start dates for historical data. Due to differences in market start dates and a desire to show as long a historical timeframe as possible, only the following markets are included in the historical charts within this report: Atlanta, Austin, Baltimore, Boston, Broward County, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas/Ft Worth, Dayton, Denver, Detroit, East Bay/Oakland, Houston, Indianapolis, Inland Empire (California), Jacksonville (Florida), Kansas City, Long Island (New York), Los Angeles, Memphis, Miami-Dade County, Nashville, Northern New Jersey, Orange (California), Orlando, Palm Beach County, Philadelphia, Phoenix, Pittsburgh, Raleigh/Durham, Sacramento, San Diego, San Francisco, Seattle/Puget Sound, South Bay/San Jose, St. Louis, Tampa/ St Petersburg, Washington, and Westchester/So Connecticut. When ever possible all markets are included to provide as broad as possible national coverage. The Market Highlights and Overview narrative includes all markets. For information on subscribing to CoStar s other products and services, please contact us at COSTAR, or visit our web site at Copyright 2016 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc L ST NW Washington, DC (800) NASDAQ: CSGP B The CoStar Industrial Report 2016 CoStar Group, Inc.

4 Third Quarter 2016 National Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different 2016 CoStar Group, Inc. The CoStar Industrial Report C

5 National Third Quarter 2016 tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D The CoStar Industrial Report 2016 CoStar Group, Inc.

6 Overview Third Quarter 2016 National U.S. s Vacancy Decreases to 5.6% Net Absorption Positive 112,145,442 SF in the Quarter The U.S. Industrial market ended the third quarter 2016 with a vacancy rate of 5.6%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 112,145,442 square feet in the third quarter. Vacant sublease space increased in the quarter, ending the quarter at 43,331,355 square feet. Rental rates ended the third quarter at $6.01, an increase over the previous quarter. A total of 475 buildings delivered to the market in the quarter totaling 81,565,685 square feet, with 234,403,350 square feet still under Absorption Net absorption for the overall U.S. Industrial market was positive 112,145,442 square feet in the third quarter That compares to positive 81,804,068 square feet in the second quarter 2016, positive 70,187,169 square feet in the first quarter 2016, and positive 109,789,421 square feet in the fourth quarter Tenants moving out of large blocks of space in 2016 include: Innotrac Corporation moving out of 646,468 square feet at 2305 Litton Ln in the Cincinnati market; General Mills moving out of 633,953 square feet at Mulberry Ave in the Inland Empire (California) market; and Smuckers moving out of 556,800 square feet at 1525 Oakley Industrial Blvd in the Atlanta market. Tenants moving into large blocks of space in 2016 include: NFI Industries, Inc. moving into 1,546,815 square feet at 300 Penry Rd in the Greensboro/Winston Salem market; Lego Systems moving into 1,440,000 square feet at 5600 Mark Iv Pky in the Dallas/Ft Worth market; and QVC moving into 1,061,735 square feet at 853 N Del Rio St in the Inland Empire (California) market. The Flex building market recorded net absorption of positive 7,795,031 square feet in the third quarter 2016, compared to positive 7,564,453 square feet in the second quarter 2016, positive 5,198,234 in the first quarter 2016, and positive 15,284,885 in the fourth quarter The Warehouse building market recorded net absorption of positive 104,350,411 square feet in the third quarter 2016 compared to positive 74,239,615 square feet in the second quarter 2016, positive 64,988,935 in the first quarter 2016, and positive 94,504,536 in the fourth quarter Vacancy The Industrial vacancy rate in the U.S. market area decreased to 5.6% at the end of the third quarter The vacancy rate was 5.8% at the end of the second quarter 2016, 6.0% at the end of the first quarter 2016, and 6.0% at the end of the fourth quarter Flex projects reported a vacancy rate of 7.3% at the end of the third quarter 2016, 7.6% at the end of the second quarter 2016, 8.0% at the end of the first quarter 2016, and 8.1% at the end of the fourth quarter Warehouse projects reported a vacancy rate of 5.4% at the end of the third quarter 2016, 5.6% at the end of second quarter 2016, 5.7% at the end of the first quarter 2016, and 5.8% at the end of the fourth quarter Vacancy Rates by Building Type* % Flex Warehouse Total Market 14% 12% Vacancy Rate 10% 8% 6% 4% 2% 0% q q q q q q q q q q q q q q q q Source: CoStar Property * Select markets included in this historical chart - see Methodology page CoStar Group, Inc. The CoStar Industrial Report 1

7 National Third Quarter 2016 Overview Largest Lease Signings The largest lease signings occurring in 2016 included: the 1,400,000-square-foot lease signed by Variety Wholesalers at 60 Herring Rd in the Atlanta market; the 856,605-square-foot deal signed by Amazon.com, Inc. at 6521 W Monee Manhattan Rd in the Chicago market; and the 1,128,227-square-foot lease signed by NFI at 501 W Danieldale Rd in the Dallas/Ft Worth market. Sublease Vacancy The amount of vacant sublease space in the U.S. market increased to 43,331,355 square feet by the end of the third quarter 2016, from 40,311,524 square feet at the end of the second quarter There was 39,329,152 square feet vacant at the end of the first quarter 2016 and 37,623,556 square feet at the end of the fourth quarter U.S. s Flex projects reported vacant sublease space of 6,067,468 square feet at the end of third quarter 2016, up from the 5,631,097 square feet reported at the end of the second quarter There were 5,353,712 square feet of sublease space vacant at the end of the first quarter 2016, and 5,237,785 square feet at the end of the fourth quarter Warehouse projects reported increased vacant sublease space from the second quarter 2016 to the third quarter Sublease vacancy went from 34,680,427 square feet to 37,263,887 square feet during that time. There was 33,975,440 square feet at the end of the first quarter 2016, and 32,385,771 square feet at the end of the fourth quarter Rental Rates The average quoted asking rental rate for available Industrial space was $6.01 per square foot per year at the end of the third quarter 2016 in the U.S. market area. This represented a 1.3% increase in quoted rental rates from the end of the second quarter 2016, when rents were reported at $5.93 per square foot. The average quoted rate within the Flex sector was $11.72 per square foot at the end of the third quarter 2016, while Warehouse rates stood at $5.30. At the end of the second quarter 2016, Flex rates were $11.59 per square foot, and Warehouse rates were $5.22. Deliveries and Construction During the third quarter 2016, 475 buildings totaling 81,565,685 square feet were completed in the U.S. market area. This compares to 399 buildings totaling 54,947,302 square feet that were completed in the second quarter 2016, 528 buildings totaling 62,792,567 square feet completed in the first quarter 2016, and 67,069,711 square feet in 545 buildings completed in the fourth quarter There were 234,403,350 square feet of Industrial space under construction at the end of the third quarter Some of the notable 2016 deliveries include: Hobby Lobby Building 6, a 2,000,000-square-foot building that delivered in first quarter 2016 and is now 100% occupied in the Oklahoma City market and Medline, a 1,170,880-square-foot building that delivered third quarter 2016 and is now 100% occupied in the Inland Empire (California) market. The largest projects underway at the end of third quarter 2016 were Volvo North American Manufacturing, a 2,300,000- square-foot facility that is 100% pre-leased in the Charleston/ N Charleston market, and TPCO America, a 1,600,000-squarefoot building that is 100% pre-leased in the Corpus Christi market. Inventory Total Industrial inventory in the U.S. market area amounted to 21,853,456,371 square feet in 636,601 buildings as of the end of the third quarter The Flex sector consisted of 2,316,201,358 square feet in 91,609 projects. The Warehouse sector consisted of 19,537,255,013 square feet in 544,992 buildings. Within the Industrial market there were 71,771 owneroccupied buildings accounting for 4,416,417,814 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, U.S. industrial sales figures rose during the second quarter 2016 in terms of dollar volume compared to the first quarter of In the second quarter, 1,571 industrial transactions closed with a total volume of $8,953,971,693. The 1,571 buildings totaled 125,877,876 square feet and the average price per square foot equated to $71.13 per square foot. That compares to 1,406 transactions totaling $6,667,916,993 in the first quarter. The total square footage was 102,461,690 for an average price per square foot of $ Total year-to-date industrial building sales activity in 2016 is up compared to the previous year. In the first six months of 2016, the market saw 2,977 industrial sales transactions with a total volume of $15,621,888,686. The price per square foot has averaged $68.42 this year. In the first six months of 2015, the market posted 3,011 transactions with a total volume of $15,160,279,254. The price per square foot averaged $ Cap rates have been lower in 2016, averaging 7.46%, compared to the first six months of last year when they averaged 7.61%. One of the largest transactions that has occurred within the last 4 quarters in the U.S. market is the sale of 101 Possumtown Rd in the Northern New Jersey market. This 360,000 square foot industrial building sold for $125,000,000, or $ per square foot. The property sold on 6/6/2016, at a 4.76% cap rate. 2 The CoStar Industrial Report 2016 CoStar Group, Inc.

8 Overview Third Quarter 2016 National Albany/Schenectady/Troy market, and positive 222,806 square feet of net absorption, Albany/Schenectady/Troy s vacancy rate went from 5.8% to 5.6% in the quarter. Rental rates went from $4.96 to $4.93 during that time. At the end of the quarter, there was 1,167,796 square feet underway for future delivery. Albuquerque With no space currently under construction, Albuquerque absorbed (101,045) square feet of space and delivered 42,510 square feet of space, resulting in a vacancy rate that went from 3.6% to 3.9% over the course of the quarter. Rental rates went from $6.18 to $6.35 per square foot. Anchorage The Anchorage industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (6,215) square feet caused the vacancy rate to unchanged from 2.1% to 2.1% in the quarter. Rental rates stood at $ Asheville The Asheville industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 2.4%, from 3.2% in the previous quarter. Rental rates ended the quarter at $4.37 per square foot, from $4.53 in the previous quarter. There was a total of 10,000 square feet that delivered in the quarter, with 708,000 square feet still under construction Atlanta The Atlanta industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 7.3%, from 7.2% in the previous quarter. Rental rates ended the quarter at $4.52 per square foot, from $4.35 in the previous quarter. There was a total of 3,231,047 square feet that delivered in the quarter, with 15,272,904 square feet still under Augusta/Richmond County The Augusta/Richmond County industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.5%, from 8.9% in the previous quarter. Rental rates ended the quarter at $3.42 per square foot, from $3.32 in the previous quarter. There was a total of 20,800 square feet that delivered in the quarter, with 668,135 square feet still under Austin The Austin industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.6%, from 5.3% in the previous quarter. Rental rates ended the quarter at $9.31 per square foot, from $9.02 in the previous quarter. There was a total of 1,213,436 square feet that delivered in the quarter, with 1,914,746 square feet still under construction at the end of the quarter. Bakersfield The Bakersfield industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.5%, from 3.7% in the previous quarter. Rental rates ended the quarter at $7.98 per square foot, from $7.81 in the previous quarter. There was a total of 197,420 square feet that delivered in the quarter, with 68,756 square feet still under construction Baltimore The vacancy rate remained unchanged in Baltimore in the third quarter. With 322,800 square feet in deliveries, and positive 451,795 square feet in net absorption, the vacancy rate held at 8.8%, the same rate reported in the previous quarter. The market had 2,546,076 square feet under construction at the end of the quarter, and rental rates stood at $5.97 per square foot. Baton Rouge The Baton Rouge industrial market saw vacancies fall and rental rates change from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.8%, from 7.0% in the previous quarter. Rental rates ended the quarter at $6.08 per square foot, from $6.08 in the previous quarter. There was a total of 80,200 square feet that delivered in the quarter, with 1,267,000 square feet still under construction Beaumont/Port Arthur The Beaumont/Port Arthur industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 6.8%, from 7.0% in the previous quarter. Rental rates ended the quarter at $6.40 per square foot, from $6.37 in the previous quarter. There was a total of 23,250 square feet that delivered in the quarter, with 20,000 square feet still under construction Birmingham The Birmingham industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third 2016 CoStar Group, Inc. The CoStar Industrial Report 3

9 National Third Quarter 2016 Overview quarter The overall vacancy rate currently sits at 4.8%, from 5.6% in the previous quarter. Rental rates ended the quarter at $3.60 per square foot, from $3.58 in the previous quarter. There was a total of 152,000 square feet that delivered in the quarter, with 1,803,000 square feet still under construction Boise City/Nampa The Boise City/Nampa industrial market saw vacancies rise and rental rates change from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.0%, from 3.8% in the previous quarter. Rental rates ended the quarter at $5.81 per square foot, from $5.81 in the previous quarter. There was a total of 134,440 square feet that delivered in the quarter, with 220,940 square feet still under construction Boston The Boston industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 6.3%, from 6.6% in the previous quarter. Rental rates ended the quarter at $6.73 per square foot, from $6.66 in the previous quarter. There was a total of 1,681,642 square feet that delivered in the quarter, with 1,382,295 square feet still under construction at the end of the quarter. Bremerton/Silverdale The Bremerton/Silverdale industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (1,271) square feet caused the vacancy rate to unchanged from 2.3% to 2.3% in the quarter. Rental rates stood at $9.47. Broward County The Broward County industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 4.7%, from 5.3% in the previous quarter. Rental rates ended the quarter at $9.32 per square foot, from $9.13 in the previous quarter. There was a total of 29,952 square feet that delivered in the quarter, with 1,229,554 square feet still under construction Brownsville/Harlingen The Brownsville/Harlingen industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 48,884 square feet caused the vacancy rate to decrease from 10.8% to 10.3% in the quarter. Rental rates stood at $4.89. Buffalo/Niagara Falls market, and positive 157,959 square feet of net absorption, Buffalo/Niagara Falls s vacancy rate went from 8.1% to 7.6% in the quarter. Rental rates went from $4.68 to $5.11 during that time. At the end of the quarter, there was 1,200,000 square feet underway for future delivery. Charleston WV market, and negative (93,348) square feet of net absorption, Charleston WV s vacancy rate went from 3.4% to 4.0% in the quarter. Rental rates went from $5.63 to $5.56 during that time. At the end of the quarter, there was 38,000 square feet underway for future delivery. Charleston/N Charleston The Charleston/N Charleston industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.9%, from 7.6% in the previous quarter. Rental rates ended the quarter at $5.37 per square foot, from $5.33 in the previous quarter. There was a total of 287,681 square feet that delivered in the quarter, with 3,544,512 square feet still under Charlotte The Charlotte industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.0%, from 6.6% in the previous quarter. Rental rates ended the quarter at $4.29 per square foot, from $4.19 in the previous quarter. There was a total of 1,366,249 square feet that delivered in the quarter, with 1,366,620 square feet still under Chattanooga The Chattanooga industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 8.5%, from 10.2% in the previous quarter. Rental rates ended the quarter at $3.13 per square foot, from $3.18 in the previous quarter. There was a total of 239,555 square feet that delivered in the quarter, with 494,813 square feet still under construction Chicago The Chicago industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.6%, from 6.8% in the previous quarter. Rental rates ended the quarter at $5.74 per square foot, from $5.71 in the previous quarter. There was a total of 6,205,757 square feet that 4 The CoStar Industrial Report 2016 CoStar Group, Inc.

10 Overview Third Quarter 2016 National delivered in the quarter, with 18,184,882 square feet still under Cincinnati The vacancy rate remained unchanged in Cincinnati in the third quarter. With 1,664,013 square feet in deliveries, and positive 1,459,842 square feet in net absorption, the vacancy rate held at 5.8%, the same rate reported in the previous quarter. The market had 1,893,138 square feet under construction at the end of the quarter, and rental rates stood at $3.68 per square foot. Cleveland The vacancy rate remained unchanged in Cleveland in the third quarter. With 60,973 square feet in deliveries, and positive 379,896 square feet in net absorption, the vacancy rate held at 4.8%, the same rate reported in the previous quarter. The market had 977,248 square feet under construction at the end of the quarter, and rental rates stood at $4.00 per square foot. Colorado Springs The Colorado Springs industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 9.3%, from 8.9% in the previous quarter. Rental rates ended the quarter at $6.40 per square foot, from $6.27 in the previous quarter. There was a total of 20,000 square feet that delivered in the quarter, with 56,000 square feet still under construction Columbia The Columbia industrial market saw vacancies fall and rental rates change from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.6%, from 8.1% in the previous quarter. Rental rates ended the quarter at $4.01 per square foot, from $4.01 in the previous quarter. There was a total of 60,000 square feet that delivered in the quarter, with 20,000 square feet still under construction Columbus The Columbus industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 5.7%, from 6.3% in the previous quarter. Rental rates ended the quarter at $3.55 per square foot, from $3.48 in the previous quarter. There was a total of 2,397,630 square feet that delivered in the quarter, with 1,327,350 square feet still under Columbus GA The Columbus GA industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 9.8%, from 8.5% in the previous quarter. Rental rates ended the quarter at $2.96 per square foot, from $2.80 in the previous quarter. There was a total of 535,000 square feet that delivered in the quarter, with 165,000 square feet still under Corpus Christi The vacancy rate remained unchanged in Corpus Christi in the third quarter. With 40,000 square feet in deliveries, and positive 33,266 square feet in net absorption, the vacancy rate held at 4.3%, the same rate reported in the previous quarter. The market had 1,629,136 square feet under construction at the end of the quarter, and rental rates stood at $6.84 per square foot. Dallas/Ft Worth The Dallas/Ft Worth industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.1%, from 6.6% in the previous quarter. Rental rates ended the quarter at $5.36 per square foot, from $5.33 in the previous quarter. There was a total of 5,725,213 square feet that delivered in the quarter, with 22,347,583 square feet still under Davenport/Moline/Rock Island With no space currently under construction, Davenport/ Moline/Rock Island absorbed 50,798 square feet of space and delivered 30,000 square feet of space, resulting in a vacancy rate that went from 4.1% to 3.9% over the course of the quarter. Rental rates went from $4.05 to $4.03 per square foot. Dayton With no space currently under construction, Dayton absorbed 263,364 square feet of space and delivered 70,400 square feet of space, resulting in a vacancy rate that went from 10.7% to 10.5% over the course of the quarter. Rental rates went from $3.42 to $3.51 per square foot. Deltona/Daytona Beach market, and positive 183,102 square feet of net absorption, Deltona/Daytona Beach s vacancy rate went from 4.3% to 3.4% in the quarter. Rental rates went from $5.52 to $5.67 during that time. At the end of the quarter, there was 18,000 square feet underway for future delivery. Denver The vacancy rate remained unchanged in Denver in the third quarter. With 616,142 square feet in deliveries, and positive 269,773 square feet in net absorption, the vacancy rate held at 4.5%, the same rate reported in the previous quarter. The market had 4,559,050 square feet under construction at the end of the quarter, and rental rates stood at $8.25 per square foot CoStar Group, Inc. The CoStar Industrial Report 5

11 National Third Quarter 2016 Overview Des Moines The Des Moines industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.7%, from 4.0% in the previous quarter. Rental rates ended the quarter at $4.97 per square foot, from $4.75 in the previous quarter. There was a total of 814,290 square feet that delivered in the quarter, with 1,147,271 square feet still under construction Detroit The Detroit industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.0%, from 4.2% in the previous quarter. Rental rates ended the quarter at $5.25 per square foot, from $5.13 in the previous quarter. There was a total of 470,588 square feet that delivered in the quarter, with 2,568,424 square feet still under construction at the end of the quarter. Duluth The Duluth industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (24,126) square feet caused the vacancy rate to increase from 2.8% to 3.0% in the quarter. Rental rates stood at $5.67. East Bay/Oakland The East Bay/Oakland industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.0%, from 4.9% in the previous quarter. Rental rates ended the quarter at $10.29 per square foot, from $10.07 in the previous quarter. There was a total of 989,849 square feet that delivered in the quarter, with 1,440,374 square feet still under El Paso The El Paso industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 288,393 square feet caused the vacancy rate to decrease from 10.1% to 9.6% in the quarter. Rental rates stood at $3.80. Erie The Erie industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (85,059) square feet caused the vacancy rate to increase from 3.5% to 4.0% in the quarter. Rental rates stood at $3.55. Evansville market, and positive 156,204 square feet of net absorption, Evansville s vacancy rate went from 9.3% to 8.8% in the quarter. Rental rates went from $3.05 to $2.93 during that time. At the end of the quarter, there was 56,000 square feet underway for future delivery. Fayetteville market, and positive 90,169 square feet of net absorption, Fayetteville s vacancy rate went from 15.6% to 15.0% in the quarter. Rental rates went from $4.00 to $4.04 during that time. At the end of the quarter, there was 36,000 square feet underway for future delivery. Fayetteville/Springdale/Rogers market, and positive 103,981 square feet of net absorption, Fayetteville/Springdale/Rogers s vacancy rate went from 4.8% to 4.4% in the quarter. Rental rates went from $3.90 to $4.04 during that time. At the end of the quarter, there was 98,078 square feet underway for future delivery. Fort Smith The Fort Smith industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 301,044 square feet caused the vacancy rate to decrease from 12.4% to 11.0% in the quarter. Rental rates stood at $3.01. Fort Wayne The Fort Wayne industrial market saw vacancies rise and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.4%, from 4.5% in the previous quarter. Rental rates ended the quarter at $3.69 per square foot, from $3.73 in the previous quarter. There was a total of 76,440 square feet that delivered in the quarter, with 60,000 square feet still under construction Fresno market, and negative (89,661) square feet of net absorption, Fresno s vacancy rate went from 4.6% to 4.7% in the quarter. Rental rates went from $4.26 to $4.22 during that time. At the end of the quarter, there was 7,500 square feet underway for future delivery. Green Bay With no space currently under construction, Green Bay absorbed 201,627 square feet of space and delivered 8,000 6 The CoStar Industrial Report 2016 CoStar Group, Inc.

12 Overview Third Quarter 2016 National square feet of space, resulting in a vacancy rate that went from 3.0% to 2.7% over the course of the quarter. Rental rates went from $3.82 to $3.82 per square foot. Greensboro/Winston-Salem The Greensboro/Winston-Salem industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.9%, from 4.8% in the previous quarter. Rental rates ended the quarter at $3.33 per square foot, from $3.28 in the previous quarter. There was a total of 530,000 square feet that delivered in the quarter, with 1,105,069 square feet still under Greenville/Spartanburg The Greenville/Spartanburg industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.0%, from 6.7% in the previous quarter. Rental rates ended the quarter at $3.67 per square foot, from $3.64 in the previous quarter. There was a total of 2,873,000 square feet that delivered in the quarter, with 2,017,956 square feet still under Hampton Roads The vacancy rate remained unchanged in Hampton Roads in the third quarter. With 31,000 square feet in deliveries, and positive 29,904 square feet in net absorption, the vacancy rate held at 6.8%, the same rate reported in the previous quarter. The market had 538,645 square feet under construction at the end of the quarter, and rental rates stood at $6.11 per square foot. Hartford The Hartford industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.1%, from 6.5% in the previous quarter. Rental rates ended the quarter at $4.44 per square foot, from $4.26 in the previous quarter. There was a total of 52,059 square feet that delivered in the quarter, with 694,700 square feet still under construction Hawaii The Hawaii industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 1.7%, from 1.8% in the previous quarter. Rental rates ended the quarter at $13.73 per square foot, from $13.85 in the previous quarter. There was a total of 6,752 square feet that delivered in the quarter, with 117,481 square feet still under construction at the end of the quarter. Houston The Houston industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 5.5%, from 5.8% in the previous quarter. Rental rates ended the quarter at $6.63 per square foot, from $6.58 in the previous quarter. There was a total of 6,593,114 square feet that delivered in the quarter, with 7,465,046 square feet still under Huntington/Ashland market, and positive 133,330 square feet of net absorption, Huntington/Ashland s vacancy rate went from 4.4% to 3.8% in the quarter. Rental rates went from $3.39 to $3.35 during that time. At the end of the quarter, there was 35,000 square feet underway for future delivery. Huntsville The Huntsville industrial market saw vacancies rise and rental rates decrease from the second quarter 2016 to the 8.9%, from 8.7% in the previous quarter. Rental rates ended the quarter at $5.75 per square foot, from $5.79 in the previous quarter. There was a total of 100,000 square feet that delivered in the quarter, with 805,000 square feet still under Indianapolis The Indianapolis industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 5.9%, from 6.1% in the previous quarter. Rental rates ended the quarter at $4.09 per square foot, from $4.10 in the previous quarter. There was a total of 1,101,200 square feet that delivered in the quarter, with 4,017,716 square feet still under Inland Empire (California) The Inland Empire (California) industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.3%, from 4.9% in the previous quarter. Rental rates ended the quarter at $6.26 per square foot, from $6.10 in the previous quarter. There was a total of 10,896,057 square feet that delivered in the quarter, with 15,355,342 square feet still under Jackson The Jackson industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 366,135 square feet caused the vacancy rate to 2016 CoStar Group, Inc. The CoStar Industrial Report 7

13 National Third Quarter 2016 Overview decrease from 8.1% to 6.5% in the quarter. Rental rates stood at $4.21. Jacksonville (Florida) The Jacksonville (Florida) industrial market saw vacancies rise and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.3%, from 5.2% in the previous quarter. Rental rates ended the quarter at $4.27 per square foot, from $4.66 in the previous quarter. There was a total of 52,850 square feet that delivered in the quarter, with 23,201 square feet still under construction Kansas City The Kansas City industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 5.7%, from 5.8% in the previous quarter. Rental rates ended the quarter at $4.44 per square foot, from $4.36 in the previous quarter. There was a total of 3,664,192 square feet that delivered in the quarter, with 8,662,463 square feet still under Killeen/Temple/Fort Hood The Killeen/Temple/Fort Hood industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 10,560 square feet caused the vacancy rate to decrease from 6.9% to 6.7% in the quarter. Rental rates stood at $4.55. Kingsport/Bristol/Bristol The Kingsport/Bristol/Bristol industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 194,247 square feet caused the vacancy rate to decrease from 4.4% to 3.5% in the quarter. Rental rates stood at $3.11. Knoxville The Knoxville industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.2%, from 4.3% in the previous quarter. Rental rates ended the quarter at $3.90 per square foot, from $3.83 in the previous quarter. There was a total of 35,900 square feet that delivered in the quarter, with 340,960 square feet still under construction Lafayette market, and positive 799,781 square feet of net absorption, Lafayette s vacancy rate went from 17.7% to 8.2% in the quarter. Rental rates went from $5.03 to $5.92 during that time. At the end of the quarter, there was 41,000 square feet underway for future delivery. Las Vegas The Las Vegas industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.3%, from 6.4% in the previous quarter. Rental rates ended the quarter at $7.06 per square foot, from $6.82 in the previous quarter. There was a total of 452,046 square feet that delivered in the quarter, with 3,763,925 square feet still under Lexington/Fayette market, and negative (177,340) square feet of net absorption, Lexington/Fayette s vacancy rate went from 3.5% to 3.8% in the quarter. Rental rates went from $5.00 to $4.87 during that time. At the end of the quarter, there was 12,661 square feet underway for future delivery. Lincoln The Lincoln industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.8%, from 3.4% in the previous quarter. Rental rates ended the quarter at $4.74 per square foot, from $4.59 in the previous quarter. There was a total of 22,800 square feet that delivered in the quarter, with 54,470 square feet still under construction Little Rock/N Little Rock The Little Rock/N Little Rock industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (194,074) square feet caused the vacancy rate to increase from 7.0% to 7.3% in the quarter. Rental rates stood at $3.23. Long Island (New York) The vacancy rate remained unchanged in Long Island (New York) in the third quarter. With 48,350 square feet in deliveries, and positive 22,062 square feet in net absorption, the vacancy rate held at 3.5%, the same rate reported in the previous quarter. The market had 508,842 square feet under construction at the end of the quarter, and rental rates stood at $14.80 per square foot. Los Angeles The vacancy rate remained unchanged in Los Angeles in the third quarter. With 580,673 square feet in deliveries, and positive 880,154 square feet in net absorption, the vacancy rate held at 2.3%, the same rate reported in the previous quarter. The market had 5,769,837 square feet under construction at the end of the quarter, and rental rates stood at $9.46 per square foot. 8 The CoStar Industrial Report 2016 CoStar Group, Inc.

14 Overview Third Quarter 2016 National Louisville The Louisville industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 5.1%, from 4.8% in the previous quarter. Rental rates ended the quarter at $3.81 per square foot, from $3.75 in the previous quarter. There was a total of 1,146,140 square feet that delivered in the quarter, with 4,933,577 square feet still under Lubbock The Lubbock industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of negative (29,711) square feet caused the vacancy rate to increase from 2.7% to 2.8% in the quarter. Rental rates stood at $3.59. Madison The Madison industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.9%, from 4.1% in the previous quarter. Rental rates ended the quarter at $4.50 per square foot, from $4.20 in the previous quarter. There was a total of 12,000 square feet that delivered in the quarter, with 1,804,000 square feet still under construction McAllen/Edinburg/Pharr With no space currently under construction, McAllen/ Edinburg/Pharr absorbed 79,696 square feet of space and delivered 62,553 square feet of space, resulting in a vacancy rate that went from 10.5% to 10.4% over the course of the quarter. Rental rates went from $5.46 to $5.61 per square foot. Memphis The Memphis industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.7%, from 7.9% in the previous quarter. Rental rates ended the quarter at $4.42 per square foot, from $4.31 in the previous quarter. There was a total of 30,200 square feet that delivered in the quarter, with 1,915,136 square feet still under construction Miami-Dade County The Miami-Dade County industrial market saw vacancies fall and rental rates change from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.9%, from 4.2% in the previous quarter. Rental rates ended the quarter at $9.41 per square foot, from $9.41 in the previous quarter. There was a total of 241,212 square feet that delivered in the quarter, with 4,359,280 square feet still under construction Milwaukee The Milwaukee industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.0%, from 5.3% in the previous quarter. Rental rates ended the quarter at $4.44 per square foot, from $4.47 in the previous quarter. There was a total of 335,679 square feet that delivered in the quarter, with 387,586 square feet still under construction Minneapolis The vacancy rate remained unchanged in Minneapolis in the third quarter. With 1,543,900 square feet in deliveries, and positive 1,526,067 square feet in net absorption, the vacancy rate held at 4.6%, the same rate reported in the previous quarter. The market had 804,527 square feet under construction at the end of the quarter, and rental rates stood at $6.53 per square foot. Mobile market, and positive 595 square feet of net absorption, Mobile s vacancy rate went from 10.2% to 10.2% in the quarter. Rental rates went from $4.31 to $4.29 during that time. At the end of the quarter, there was 8,000 square feet underway for future delivery. Montgomery The Montgomery industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 10.0%, from 10.4% in the previous quarter. Rental rates ended the quarter at $3.37 per square foot, from $3.33 in the previous quarter. There was a total of 167,400 square feet that delivered in the quarter, with 4,982 square feet still under construction at the end of the quarter. Myrtle Beach/Conway The Myrtle Beach/Conway industrial market saw vacancies rise and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 6.0%, from 5.4% in the previous quarter. Rental rates ended the quarter at $5.19 per square foot, from $5.23 in the previous quarter. There was a total of 25,000 square feet that delivered in the quarter, with 9,756 square feet still under Nashville The Nashville industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.3%, from 3.6% in the previous quarter. Rental rates ended the quarter at $4.72 per square foot, from $4.59 in the previous quarter. There was a total of 58,300 square feet that delivered in the quarter, with 4,636,590 square feet still under construc CoStar Group, Inc. The CoStar Industrial Report 9

15 National Third Quarter 2016 Overview tion New Orleans/Metairie/Kenner The New Orleans/Metairie/Kenner industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.8%, from 4.6% in the previous quarter. Rental rates ended the quarter at $5.98 per square foot, from $5.84 in the previous quarter. There was a total of 7,747 square feet that delivered in the quarter, with 15,000 square feet still under North Bay/Santa Rosa The North Bay/Santa Rosa industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.6%, from 5.9% in the previous quarter. Rental rates ended the quarter at $8.94 per square foot, from $8.75 in the previous quarter. There was a total of 314,032 square feet that delivered in the quarter, with 1,673,825 square feet still under Northern New Jersey The Northern New Jersey industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 6.0%, from 6.5% in the previous quarter. Rental rates ended the quarter at $6.66 per square foot, from $6.46 in the previous quarter. There was a total of 1,174,149 square feet that delivered in the quarter, with 7,369,588 square feet still under Ocala The Ocala industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 23,452 square feet caused the vacancy rate to decrease from 4.7% to 4.5% in the quarter. Rental rates stood at $4.12. Oklahoma City The Oklahoma City industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 3.9%, from 3.7% in the previous quarter. Rental rates ended the quarter at $5.25 per square foot, from $5.14 in the previous quarter. There was a total of 442,339 square feet that delivered in the quarter, with 371,812 square feet still under construction Olympia market, and negative (33,936) square feet of net absorption, Olympia s vacancy rate went from 2.2% to 2.5% in the quarter. Rental rates went from $5.45 to $5.25 during that time. At the end of the quarter, there was 775,064 square feet underway for future delivery. Omaha/Council Bluffs The Omaha/Council Bluffs industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 2.6%, from 3.0% in the previous quarter. Rental rates ended the quarter at $5.37 per square foot, from $5.30 in the previous quarter. There was a total of 122,700 square feet that delivered in the quarter, with 282,356 square feet still under construction Orange County (California) market, and positive 785,928 square feet of net absorption, Orange County (California) s vacancy rate went from 2.6% to 2.4% in the quarter. Rental rates went from $10.13 to $10.24 during that time. At the end of the quarter, there was 311,766 square feet underway for future delivery. Orlando The Orlando industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 5.9%, from 6.2% in the previous quarter. Rental rates ended the quarter at $6.29 per square foot, from $6.19 in the previous quarter. There was a total of 304,475 square feet that delivered in the quarter, with 1,405,716 square feet still under Palm Beach County The Palm Beach County industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.1%, from 4.4% in the previous quarter. Rental rates ended the quarter at $9.72 per square foot, from $9.61 in the previous quarter. There was a total of 232,651 square feet that delivered in the quarter, with 756,206 square feet still under construction Pensacola With no space currently under construction, Pensacola absorbed 45,436 square feet of space and delivered 6,400 square feet of space, resulting in a vacancy rate that went from 3.7% to 3.5% over the course of the quarter. Rental rates went from $4.94 to $4.88 per square foot. Peoria The Peoria industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 29,559 square feet caused the vacancy rate to decrease from 8.4% to 8.2% in the quarter. Rental rates stood at $ The CoStar Industrial Report 2016 CoStar Group, Inc.

16 Overview Third Quarter 2016 National Philadelphia The Philadelphia industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.6%, from 7.0% in the previous quarter. Rental rates ended the quarter at $4.81 per square foot, from $4.77 in the previous quarter. There was a total of 2,842,809 square feet that delivered in the quarter, with 20,247,759 square feet still under Phoenix The Phoenix industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 10.3%, from 10.4% in the previous quarter. Rental rates ended the quarter at $6.91 per square foot, from $6.82 in the previous quarter. There was a total of 1,541,332 square feet that delivered in the quarter, with 2,340,076 square feet still under Pittsburgh The Pittsburgh industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.8%, from 5.4% in the previous quarter. Rental rates ended the quarter at $5.70 per square foot, from $5.69 in the previous quarter. There was a total of 691,479 square feet that delivered in the quarter, with 473,497 square feet still under construction Port St Lucie/Fort Pierce The Port St Lucie/Fort Pierce industrial market reported no new deliveries and no space under construction at the end of the third quarter With this limited construction activity, net absorption of positive 58 square feet caused the vacancy rate to unchanged from 4.6% to 4.6% in the quarter. Rental rates stood at $7.10. Portland The Portland industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 4.2%, from 4.0% in the previous quarter. Rental rates ended the quarter at $7.75 per square foot, from $7.50 in the previous quarter. There was a total of 708,600 square feet that delivered in the quarter, with 1,999,289 square feet still under Portland/South Portland The Portland/South Portland industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 2.6%, from 3.5% in the previous quarter. Rental rates ended the quarter at $5.27 per square foot, from $5.45 in the previous quarter. There was a total of 6,000 square feet that delivered in the quarter, with 31,595 square feet still under construction Providence The Providence industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.0%, from 5.5% in the previous quarter. Rental rates ended the quarter at $4.90 per square foot, from $4.99 in the previous quarter. There was a total of 46,600 square feet that delivered in the quarter, with 70,288 square feet still under construction Raleigh/Durham The Raleigh/Durham industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 5.5%, from 5.3% in the previous quarter. Rental rates ended the quarter at $6.72 per square foot, from $6.54 in the previous quarter. There was a total of 211,787 square feet that delivered in the quarter, with 1,031,964 square feet still under construction Reno/Sparks The Reno/Sparks industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 11.2%, from 11.3% in the previous quarter. Rental rates ended the quarter at $4.30 per square foot, from $4.50 in the previous quarter. There was a total of 3,132,854 square feet that delivered in the quarter, with 7,757,342 square feet still under Richmond VA market, and positive 320,420 square feet of net absorption, Richmond VA s vacancy rate went from 7.4% to 7.2% in the quarter. Rental rates went from $4.20 to $4.20 during that time. At the end of the quarter, there was 216,000 square feet underway for future delivery. Roanoke market, and positive 302,588 square feet of net absorption, Roanoke s vacancy rate went from 7.2% to 6.3% in the quarter. Rental rates went from $3.62 to $3.67 during that time. At the end of the quarter, there was 250,000 square feet underway for future delivery. Rochester The Rochester industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 7.9%, 2016 CoStar Group, Inc. The CoStar Industrial Report 11

17 National Third Quarter 2016 Overview from 8.0% in the previous quarter. Rental rates ended the quarter at $4.72 per square foot, from $4.67 in the previous quarter. There was a total of 150,000 square feet that delivered in the quarter, with 12,000 square feet still under construction Sacramento The Sacramento industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.6%, from 9.2% in the previous quarter. Rental rates ended the quarter at $5.51 per square foot, from $5.37 in the previous quarter. There was a total of 8,282 square feet that delivered in the quarter, with 318,054 square feet still under construction Salinas The Salinas industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 4.0%, from 4.5% in the previous quarter. Rental rates ended the quarter at $6.46 per square foot, from $6.23 in the previous quarter. There was a total of 9,895 square feet that delivered in the quarter, with 20,600 square feet still under construction at the end of the quarter. Salt Lake City The Salt Lake City industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 4.9%, from 4.2% in the previous quarter. Rental rates ended the quarter at $5.32 per square foot, from $5.25 in the previous quarter. There was a total of 1,532,752 square feet that delivered in the quarter, with 2,761,287 square feet still under San Antonio The San Antonio industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 6.0%, from 5.8% in the previous quarter. Rental rates ended the quarter at $6.10 per square foot, from $6.01 in the previous quarter. There was a total of 1,286,682 square feet that delivered in the quarter, with 961,695 square feet still under San Diego market, and positive 848,662 square feet of net absorption, San Diego s vacancy rate went from 5.7% to 5.2% in the quarter. Rental rates went from $11.96 to $12.21 during that time. At the end of the quarter, there was 1,579,455 square feet underway for future delivery. San Francisco The San Francisco industrial market saw vacancies rise and rental rates increase from the second quarter 2016 to the 2.8%, from 2.6% in the previous quarter. Rental rates ended the quarter at $19.97 per square foot, from $19.27 in the previous quarter. There was a total of 153,047 square feet that delivered in the quarter, with 303,053 square feet still under San Luis Obispo/Paso Robles The vacancy rate remained unchanged in San Luis Obispo/Paso Robles in the third quarter. With 6,451 square feet in deliveries, and positive 6,544 square feet in net absorption, the vacancy rate held at 6.1%, the same rate reported in the previous quarter. The market had 15,756 square feet under construction at the end of the quarter, and rental rates stood at $9.15 per square foot. Santa Barbara/Sta Maria/Goleta market, and positive 19,476 square feet of net absorption, Santa Barbara/Sta Maria/Goleta s vacancy rate went from 2.7% to 2.6% in the quarter. Rental rates went from $10.80 to $10.81 during that time. At the end of the quarter, there was 20,000 square feet underway for future delivery. Santa Cruz/Watsonville market, and negative (33,105) square feet of net absorption, Santa Cruz/Watsonville s vacancy rate went from 1.7% to 2.0% in the quarter. Rental rates went from $12.12 to $11.96 during that time. At the end of the quarter, there was 194,151 square feet underway for future delivery. Savannah The Savannah industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 2.5%, from 3.5% in the previous quarter. Rental rates ended the quarter at $4.36 per square foot, from $4.24 in the previous quarter. There was a total of 585,250 square feet that delivered in the quarter, with 1,924,121 square feet still under Seattle/Puget Sound market, and positive 1,503,059 square feet of net absorption, Seattle/Puget Sound s vacancy rate went from 4.0% to 3.5% in the quarter. Rental rates went from $7.42 to $7.84 during that time. At the end of the quarter, there was 2,866,081 square feet underway for future delivery. 12 The CoStar Industrial Report 2016 CoStar Group, Inc.

18 Overview Third Quarter 2016 National Shreveport/Bossier City With no space currently under construction, Shreveport/ Bossier City absorbed (1,084,366) square feet of space and delivered 10,500 square feet of space, resulting in a vacancy rate that went from 10.7% to 14.6% over the course of the quarter. Rental rates went from $3.91 to $3.08 per square foot. South Bay/San Jose market, and negative (43,539) square feet of net absorption, South Bay/San Jose s vacancy rate went from 5.8% to 5.7% in the quarter. Rental rates went from $19.17 to $19.58 during that time. At the end of the quarter, there was 1,449,339 square feet underway for future delivery. South Bend/Mishawaka market, and positive 12,139 square feet of net absorption, South Bend/Mishawaka s vacancy rate went from 4.8% to 4.8% in the quarter. Rental rates went from $3.29 to $3.24 during that time. At the end of the quarter, there was 375,480 square feet underway for future delivery. Southwest Florida The Southwest Florida industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 3.1%, from 3.5% in the previous quarter. Rental rates ended the quarter at $6.97 per square foot, from $6.82 in the previous quarter. There was a total of 92,235 square feet that delivered in the quarter, with 234,879 square feet still under Spokane market, and negative (642) square feet of net absorption, Spokane s vacancy rate went from 2.7% to 2.7% in the quarter. Rental rates went from $5.51 to $5.66 during that time. At the end of the quarter, there was 81,150 square feet underway for future delivery. Springfield With no space currently under construction, Springfield absorbed 109,185 square feet of space and delivered 70,000 square feet of space, resulting in a vacancy rate that went from 6.1% to 5.9% over the course of the quarter. Rental rates went from $4.12 to $3.96 per square foot. St. Louis The St. Louis industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 6.0%, from 6.4% in the previous quarter. Rental rates ended the quarter at $4.27 per square foot, from $4.23 in the previous quarter. There was a total of 168,000 square feet that delivered in the quarter, with 4,339,283 square feet still under Stockton/Modesto The Stockton/Modesto industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.2%, from 5.3% in the previous quarter. Rental rates ended the quarter at $4.28 per square foot, from $4.14 in the previous quarter. There was a total of 973,580 square feet that delivered in the quarter, with 986,527 square feet still under Syracuse The Syracuse industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 8.1%, from 8.3% in the previous quarter. Rental rates ended the quarter at $3.96 per square foot, from $4.09 in the previous quarter. There was a total of 197,499 square feet that delivered in the quarter, with 106,000 square feet still under Tallahassee The Tallahassee industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 5.9%, from 6.1% in the previous quarter. Rental rates ended the quarter at $4.83 per square foot, from $4.90 in the previous quarter. There was a total of 48,030 square feet that delivered in the quarter, with 38,379 square feet still under Tampa/St Petersburg The Tampa/St Petersburg industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 5.9%, from 6.3% in the previous quarter. Rental rates ended the quarter at $5.61 per square foot, from $5.47 in the previous quarter. There was a total of 2,255,776 square feet that delivered in the quarter, with 1,808,733 square feet still under Toledo The Toledo industrial market saw vacancies fall and rental rates decrease from the second quarter 2016 to the 4.8%, from 5.1% in the previous quarter. Rental rates ended the quarter at $3.30 per square foot, from $3.34 in the previ CoStar Group, Inc. The CoStar Industrial Report 13

19 National Third Quarter 2016 Overview ous quarter. There was a total of 58,796 square feet that delivered in the quarter, with 193,215 square feet still under Tucson The Tucson industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 8.0%, from 8.5% in the previous quarter. Rental rates ended the quarter at $6.86 per square foot, from $6.84 in the previous quarter. There was a total of 858,288 square feet that delivered in the quarter, with 159,971 square feet still under Tulsa The vacancy rate remained unchanged in Tulsa in the third quarter. With 256,651 square feet in deliveries, and positive 256,527 square feet in net absorption, the vacancy rate held at 3.9%, the same rate reported in the previous quarter. The market had 172,041 square feet under construction at the end of the quarter, and rental rates stood at $4.63 per square foot. Utica/Rome market, and positive 15,693 square feet of net absorption, Utica/Rome s vacancy rate went from 8.7% to 8.7% in the quarter. Rental rates went from $3.00 to $3.24 during that time. At the end of the quarter, there was 13,170 square feet underway for future delivery. Visalia/Porterville market, and negative (292,863) square feet of net absorption, Visalia/Porterville s vacancy rate went from 2.3% to 3.3% in the quarter. Rental rates went from $4.31 to $4.54 during that time. At the end of the quarter, there was 64,500 square feet underway for future delivery. Washington The Washington industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 8.1%, from 8.9% in the previous quarter. Rental rates ended the quarter at $10.09 per square foot, from $9.94 in the previous quarter. There was a total of 404,351 square feet that delivered in the quarter, with 1,537,748 square feet still under West Michigan The West Michigan industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the 3.3%, from 3.6% in the previous quarter. Rental rates ended the quarter at $3.79 per square foot, from $3.63 in the previous quarter. There was a total of 751,836 square feet that delivered in the quarter, with 1,418,426 square feet still under Westchester/So Connecticut The Westchester/So Connecticut industrial market saw vacancies fall and rental rates increase from the second quarter 2016 to the third quarter The overall vacancy rate currently sits at 8.0%, from 8.1% in the previous quarter. Rental rates ended the quarter at $8.41 per square foot, from $8.31 in the previous quarter. There was a total of 129,676 square feet that delivered in the quarter, with 846,584 square feet still under Wichita The vacancy rate remained unchanged in Wichita in the third quarter. With 292,500 square feet in deliveries, and positive 246,923 square feet in net absorption, the vacancy rate held at 4.7%, the same rate reported in the previous quarter. The market had 136,000 square feet under construction at the end of the quarter, and rental rates stood at $4.31 per square foot. Wilmington market, and positive 94,776 square feet of net absorption, Wilmington s vacancy rate went from 13.0% to 12.6% in the quarter. Rental rates went from $3.49 to $3.59 during that time. At the end of the quarter, there was 65,600 square feet underway for future delivery. Yakima market, and positive 6,400 square feet of net absorption, Yakima s vacancy rate went from 1.5% to 1.4% in the quarter. Rental rates went from $4.82 to $5.08 during that time. At the end of the quarter, there was 312,000 square feet underway for future delivery. Youngstown/Warren/Boardman market, and negative (78,857) square feet of net absorption, Youngstown/Warren/Boardman s vacancy rate went from 11.5% to 11.6% in the quarter. Rental rates went from $2.86 to $2.92 during that time. At the end of the quarter, there was 12,000 square feet underway for future delivery. 14 The CoStar Industrial Report 2016 CoStar Group, Inc.

20 Inventory & development Third Quarter 2016 National Historical Deliveries Deliveries Average Delivered SF Source: CoStar Property * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction Square Footage Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C Dallas/Ft Worth ,347,583 5,108, % 40, ,263 Philadelphia 40 20,247,759 8,136, % 50, ,194 Chicago 60 18,184,882 8,069, % 51, ,081 Inland Empire (California) 80 15,355,342 3,131, % 44, ,942 Atlanta 62 15,272,904 4,780, % 41, ,337 Kansas City 25 8,662,463 3,448, % 41, ,499 Reno/Sparks 10 7,757,342 6,686, % 47, ,734 Houston 89 7,465,046 4,644, % 30,804 83,877 Northern New Jerse y 38 7,369,588 3,321, % 45, ,937 Los Angeles 45 5,769,837 1,914, % 26, ,219 Louisville 16 4,933,577 1,529, % 43, ,349 Nashville 21 4,636,590 2,086, % 47, ,790 Denver 51 4,559,050 2,186, % 28,361 89,393 Miami-Dade County 28 4,359, , % 26, ,689 St. Louis 10 4,339,283 2,400, % 43, ,928 Indianapolis 15 4,017,716 2,295, % 48, ,848 Las Vegas 20 3,763, , % 29, ,196 Charleston/N Charleston 13 3,544,512 3,024, % 25, ,655 Seattle/Puget Sound 18 2,866, , % 37, ,227 Salt Lake City 39 2,761, , % 29,993 70,802 Detroit 28 2,568,424 1,233, % 33,511 91,729 Baltimore 11 2,546, , % 50, ,461 Phoenix 22 2,340, , % 31, ,367 Greenville/Spartanbur g 14 2,017,956 1,968, % 42, ,140 Portland 16 1,999,289 1,368, % 33, ,956 Savannah 5 1,924,121 1,607, % 40, ,824 Memphis 7 1,915,136 12, % 64, ,591 Austin 43 1,914, , % 24,641 44,529 Cincinnati 6 1,893, , % 45, ,523 Tampa/St Petersbur g 21 1,808, , % 23,036 86,130 Madison 7 1,804,000 1,575, % 40, ,714 Birmingham 5 1,803,000 1,803, % 32, ,600 North Bay/Santa Rosa 9 1,673, , % 26, ,981 Corpus Christi 4 1,629,136 1,600, % 14, ,284 San Diego 18 1,579,455 1,169, % 22,282 87,747 Washington 15 1,537, , % 36, ,517 South Bay/San Jose 12 1,449, , % 32, ,778 East Bay/Oakland 6 1,440,374 1,297, % 32, ,062 West Michi gan 6 1,418,426 1,326, % 36, ,404 Orlando 13 1,405, , % 25, ,132 Boston 24 1,382, , % 40,478 57,596 Charlotte 21 1,366, , % 40,878 65,077 Columbus 4 1,327, , % 51, ,837 Totals 1, ,403, ,273, % 34, ,689 Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 15

21 National Third Quarter 2016 Inventory & development Historical Construction Starts & Deliveries* Square Footage Per Quarter Starting and Completing Construction Millions SF Construction Starts Deliveries q q q q q Source: CoStar Property * Select markets included in this historical chart - see Methodology page. Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single Tenant Multi-Tenant < 50,000 SF ,890,402 8,558, % $9.44 5,745,973 6,144,429 50,000 SF - 99,999 SF ,838,571 8,583, % $7.95 5,636,420 7,202, ,000 SF - 249,999 SF ,968,517 29,078, % $ ,691,306 28,277, ,000 SF - 499,999 SF ,481,455 31,892, % $ ,227,108 26,254,347 >= 500,000 SF 93 79,126,609 64,146, % $ ,120,990 32,005,619 Source: CoStar Property Recent Deliveries Leased & Un-Leased SF in Deliveries Last 5 Years Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver Leased Un-Leased Preleased Un-Leased Millions SF Millions SF q q 16 The CoStar Industrial Report 2016 CoStar Group, Inc.

22 Inventory & development Third Quarter 2016 National 2016 CoStar Group, Inc. The CoStar Industrial Report 17

23 National Third Quarter 2016 Inventory & development 18 The CoStar Industrial Report 2016 CoStar Group, Inc.

24 Figures at a Glance Third Quarter 2016 National Flex Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect ,019, , , % 39,716 30,000 0 $10.21 Albuquerque 146 3,541, , , % 57, $9.37 Anchorage 141 2,714,509 69,523 74, % (13,512) 0 0 $17.44 Asheville 255 3,906, , , % 59, $9.01 Atlanta 4,166 68,682,231 5,904,431 6,011, % 379,910 10, ,355 $8.85 Augusta/Richmon 421 3,409, , , % (89,816) 20,800 6,817 $6.39 Austin ,193,757 1,552,237 1,628, % (35,316) 257, ,501 $12.70 Bakersfield 215 2,311, , , % 11, $10.62 Baltimore 1,344 49,047,854 3,823,316 4,101, % 476,862 71, ,520 $11.54 Baton Rouge 207 2,559, , , % 54,719 12,000 0 $10.02 Beaumont/Port A ,620, , , % (206) 0 0 $9.37 Birmingham ,256, , , % (442) 2,400 0 $8.33 Boise City/Namp ,349, , , % 154,007 10,785 10,989 $8.61 Boston 2, ,168,634 10,763,053 11,075, % 646, , ,700 $10.10 Bremerton/Silve ,190 20,825 20, % (7,174) 0 0 $11.97 Broward County 1,063 19,565, , , % 359, ,890 $12.59 Brownsville/Har ,939 3,906 3, % (3,906) 0 0 $0.00 Buffalo/Niagara ,937, , , % 55, $12.04 Charleston WV ,344 58,733 58, % 27, $5.00 Charleston/N Ch ,731, , , % (41,591) 62,858 82,502 $12.91 Charlotte 1,169 29,888,015 1,692,261 1,708, % 772, , ,829 $8.60 Chattanooga 253 4,062, , , % 27, $8.44 Chicago 2,219 71,640,238 6,392,524 6,550, % 341, ,635 $10.94 Cincinnati 314 9,609, ,683 1,003, % 43, $8.14 Cleveland ,155,038 1,372,848 1,390, % 286,859 3,022 54,871 $9.45 Colorado Spring ,245,607 1,048,407 1,118, % 45, $7.52 Columbia 731 6,600, , , % 149,985 9,980 0 $8.32 Columbus ,780, , , % 61, ,244 0 $7.58 Columbus GA 281 3,960, , , % 9, $6.06 Corpus Christi 61 1,076,011 64,965 64, % 42, $12.75 Dallas/Ft Worth 6, ,068,795 9,532,065 9,630, % 881, ,780 1,448,181 $9.40 Davenport/Molin ,913 63,539 63, % (1,520) 30,000 0 $7.02 Dayton 202 3,894, , , % 70,405 60,000 0 $9.96 Deltona/Daytona ,646, , , % 47, $9.84 Denver 1,759 50,102,629 4,454,621 4,606, % 351, , ,171 $10.34 Des Moines 223 8,854, , , % 14,978 62, ,580 $7.36 Detroit 1,353 51,597,114 3,953,269 3,975, % 926, ,493 $8.99 Duluth ,299 2,400 2, % 5, $12.68 East Bay/Oaklan. 1,519 54,528,869 3,903,009 4,155, % 1,131,377 50,000 0 $15.01 El Paso 349 6,216, , , % 98, $9.17 Erie , % 2, $7.02 Evansville 82 4,069,435 76,990 76, % 163, ,000 0 $6.52 Fayetteville 105 1,043,269 70,045 70, % 30, ,000 $10.28 Fayetteville/Sp ,192,694 32,440 32, % 35, $7.18 Fort Smith ,212 60,390 60, % 9, $7.77 Fort Wayne 163 3,976, , , % 6, $6.73 Fresno 113 1,871,287 95,514 95, % 125, $8.23 Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 19

25 National Third Quarter 2016 Figures at a Glance Flex Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Green Bay 309 8,615, , , % 87, $6.74 Greensboro/Wins ,193, , , % 397, $7.03 Greenville/Spar ,366, , , % 251, ,000 21,500 $7.55 Hampton Roads ,915,680 1,704,499 1,728, % (173,962) 5,500 74,600 $9.83 Hartford 1,187 25,626,803 1,620,090 1,825, % 362, ,000 $8.01 Hawaii 82 1,754,179 53,338 53, % 11, $19.62 Houston 2,003 50,577,225 3,248,439 3,447, % 38, , ,290 $9.96 Huntington/Ashl ,331,985 76,334 76, % 15, $8.71 Huntsville 160 6,428, , , % 51,517 15,500 0 $9.59 Indianapolis 1,028 23,993,533 1,486,490 1,541, % 306,587 18,500 15,000 $8.84 Inland Empire ( ,311, , , % 82, $11.72 Jackson 123 2,163,463 90,690 90, % 69, $9.79 Jacksonville (F ,623, , , % 102, $9.81 Kansas City ,688, , , % 164, ,000 $8.96 Killeen/Temple/ ,642 7,875 7, % 4,500 4,875 0 $8.09 Kingsport/Brist. 32 1,027,516 29,360 29, % 3, $7.66 Knoxville ,236, , , % 51, ,000 $7.55 Lafayette ,763 62,053 62, % (18,408) 0 0 $8.26 Las Vegas ,539,686 1,411,341 1,423, % 116, $9.95 Lexington/Fayet ,437, , , % (181,881) 0 0 $7.82 Lincoln 180 2,386,241 47,277 47, % (11,764) 0 0 $7.64 Little Rock/N L ,921, , , % 54, $5.93 Long Island (Ne ,147,319 1,151,380 1,418, % (171,881) 0 43,800 $16.68 Los Angeles 2,860 62,532,467 2,453,134 2,689, % 62,175 35, ,000 $18.61 Louisville ,038, , , % 51, $7.78 Lubbock 24 1,065,674 19,268 19, % 16, $6.39 Madison 275 8,409, , , % (224,522) 12,000 57,000 $7.40 McAllen/Edinbur ,731 95,701 95, % (8,217) 0 0 $12.99 Memphis 507 9,494,901 1,342,870 1,349, % 173,528 2,700 0 $6.84 Miami-Dade Coun ,016, , , % 161,358 3,500 0 $17.92 Milwaukee 1,329 45,488,356 1,875,985 1,877, % 603, ,500 0 $7.67 Minneapolis 1,824 76,404,473 5,125,172 5,314, % 750,214 10, ,800 $8.38 Mobile 244 2,437, , , % 13, $8.03 Montgomery 207 3,083, , , % 37, $8.40 Myrtle Beach/Co ,241,836 32,474 32, % 33,581 25,000 4,756 $7.72 Nashville ,973, , , % 135, ,564 $10.16 New Orleans/Met ,413, , , % 58,425 22,882 0 $8.62 North Bay/Santa ,034, , , % 109, $14.93 Northern New Je. 1,556 62,339,403 5,342,387 5,809, % 1,607,677 20, ,650 $11.49 Ocala , , , % (19,911) 0 0 $10.45 Oklahoma City ,156,314 1,000,080 1,000, % (36,399) 30,000 0 $6.73 Olympia ,065 9,535 9, % $7.20 Omaha/Council B ,740, , , % 197, ,000 $7.27 Orange County (. 3,259 69,351,888 1,683,992 1,781, % 497,638 43,920 0 $14.24 Orlando 1,383 28,782,203 2,783,223 2,834, % 557, ,569 16,330 $9.55 Palm Beach Coun ,187, , , % 160, $12.48 Pensacola 149 1,744,548 35,060 35, % 41, $10.11 Source: CoStar Property Existing Inventory Vacancy 20 The CoStar Industrial Report 2016 CoStar Group, Inc.

26 Figures at a Glance Third Quarter 2016 National Flex Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Peoria 90 1,182,354 24,007 24, % (6,743) 0 0 $6.60 Philadelphia 3,408 86,890,235 6,338,835 6,423, % 1,251, , ,000 $9.18 Phoenix 1,142 33,019,535 4,303,499 4,571, % (35,642) 425, ,634 $12.52 Pittsburgh ,198,755 2,032,822 2,048, % 262,288 82, ,133 $11.59 Port St Lucie/F ,634, , , % (76,688) 0 0 $8.47 Portland ,083,461 1,417,134 1,457, % 417,336 62,000 0 $12.82 Portland/South ,817, , , % 77,258 8,720 0 $6.59 Providence 178 4,816, , , % (22,034) 0 0 $8.92 Raleigh/Durham 1,593 31,877,039 2,310,726 2,342, % (118,127) 154,657 89,978 $12.14 Reno/Sparks 367 8,726, , , % (47,890) 9,000 0 $8.79 Richmond VA ,558,690 1,118,782 1,134, % 251,800 37,600 0 $8.86 Roanoke 164 2,192, , , % (21,678) 0 0 $6.77 Rochester ,671,876 1,659,782 1,683, % 170, $7.64 Sacramento ,388,310 2,878,121 2,932, % 251, ,800 $9.74 Salinas ,405 37,903 37, % 11, ,600 $14.06 Salt Lake City 1,260 26,058,438 1,159,800 1,213, % 192, ,325 $8.64 San Antonio ,546, , , % 34,251 38,400 0 $10.44 San Diego 1,844 45,236,344 3,159,775 3,620, % 552,812 65,500 1,159,657 $17.73 San Francisco ,337, ,236 1,007, % (97,651) 155, ,053 $31.66 San Luis Obispo , , , % (10,341) 0 0 $14.08 Santa Barbara/S ,045, , , % (62,859) 0 0 $13.92 Santa Cruz/Wats. 91 2,328,268 53,170 61, % 14, $13.85 Savannah 152 1,665, , , % 47,337 44,800 0 $9.31 Seattle/Puget S. 1,024 30,821,200 1,611,096 1,699, % 557, $16.28 Shreveport/Boss ,528, , , % 44, $8.15 South Bay/San J. 2, ,249,210 8,555,290 9,217, % 259, , ,512 $22.38 South Bend/Mish. 83 2,605, , , % 25, $6.04 Southwest Flori ,311, , , % 127,949 12,600 0 $8.38 Spokane 264 4,203, , , % (10,082) 0 0 $7.34 Springfield ,505 2,400 2, % 32, $6.02 St. Louis ,104,903 1,348,730 1,348, % 130, , ,000 $9.09 Stockton/Modest ,260, , , % 18, $9.08 Syracuse 699 9,374, , , % 26, ,000 $7.53 Tallahassee 122 2,805, , , % 114,967 48,030 0 $6.36 Tampa/St Peters. 1,447 29,297,307 2,726,603 2,821, % 450, ,170 0 $9.17 Toledo 397 6,946, , , % 54, $7.73 Tucson 471 9,598, , , % 164, $8.76 Tulsa 316 7,033, , , % (35,327) 0 0 $7.14 Utica/Rome 169 2,397,438 70,890 70, % 4, $7.17 Visalia/Porterv ,790 15,283 15, % 5, $3.36 Washington 1,611 70,256,844 6,999,114 7,146, % 934, , ,540 $13.02 West Michigan ,213, , , % 140,550 50,000 0 $8.07 Westchester/So ,427,165 2,539,812 2,625, % (19,543) 0 9,600 $13.03 Wichita 63 1,511, , , % 39, ,000 $8.32 Wilmington 500 5,466, , , % 62,168 18,000 35,000 $8.08 Yakima , % $11.00 Youngstown/Warr ,365 76,235 76, % (18,935) 0 0 $4.92 Totals 91,609 2,316,201, ,026, ,093, % 20,557,718 5,061,978 11,271,156 $11.72 Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 21

27 National Third Quarter 2016 Figures at a Glance Warehouse Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 2,394 91,995,153 5,141,247 5,141, % 753, ,000 1,167,796 $4.55 Albuquerque 2,431 47,417,693 1,736,479 1,744, % 307,775 52,510 0 $6.04 Anchorage ,890, , , % (4,928) 0 0 $12.07 Asheville ,550, , , % 373, , ,000 $4.00 Atlanta 12, ,975,339 40,993,014 43,834, % 10,505,472 13,588,816 14,464,549 $4.03 Augusta/Richmon ,488,941 3,026,469 3,026, % (881,063) 72, ,318 $3.15 Austin 3,368 75,506,540 2,654,217 2,833, % 1,973,174 1,473,792 1,212,245 $7.84 Bakersfield 1,379 23,510, ,843 1,018, % (89,543) 271,403 68,756 $7.85 Baltimore 3, ,437,769 16,379,934 16,812, % 2,734,660 1,270,200 2,378,556 $4.96 Baton Rouge 1,443 25,331,148 1,499,851 1,499, % 724, ,306 1,267,000 $5.81 Beaumont/Port A ,992, , , % 273, ,300 20,000 $5.91 Birmingham 3, ,343,496 5,985,032 6,024, % 1,595, ,500 1,803,000 $3.32 Boise City/Namp. 1,706 37,730,750 1,355,835 1,491, % 484, , ,951 $5.48 Boston 10, ,692,550 20,401,391 21,418, % 3,784,604 2,001,334 1,248,595 $5.74 Bremerton/Silve ,196,241 43,567 43, % 35, $9.01 Broward County 5, ,680,881 5,089,435 5,203, % 1,487, ,195 1,158,664 $8.88 Brownsville/Har ,357,171 1,082,183 1,082, % 287, $4.89 Buffalo/Niagara. 1,456 68,551,153 5,366,288 5,366, % 671, ,450 1,200,000 $4.64 Charleston WV ,276, , , % (73,398) 0 38,000 $5.57 Charleston/N Ch. 2,233 64,686,627 4,780,291 5,332, % 1,293,358 1,541,607 3,462,010 $5.00 Charlotte 6, ,865,111 17,319,496 17,769, % 4,139,203 2,412, ,791 $3.88 Chattanooga ,683,268 3,597,978 3,597, % 1,251, , ,813 $2.97 Chicago 20,665 1,105,392,816 69,566,236 71,514, % 13,307,126 12,172,945 17,908,247 $5.37 Cincinnati 6, ,593,810 15,883,158 16,755, % 2,517,265 3,389,293 1,893,138 $3.51 Cleveland 11, ,488,168 21,083,656 22,052, % 1,565,330 1,326, ,377 $3.66 Colorado Spring. 1,612 27,213,076 1,998,900 2,001, % (63,560) 20,000 56,000 $6.14 Columbia 1,345 53,956,842 4,175,368 4,187, % 757, ,547 20,000 $3.68 Columbus 4, ,979,685 14,004,363 14,538, % 5,783,433 4,378,666 1,327,350 $3.37 Columbus GA ,303,358 4,245,431 4,245, % 605, , ,000 $2.85 Corpus Christi 1,412 20,201, , , % (118,068) 50,000 1,629,136 $6.36 Dallas/Ft Worth 13, ,666,046 40,330,128 41,608, % 18,252,950 15,130,589 20,899,402 $4.47 Davenport/Molin ,661, , , % 191, $3.83 Dayton 3, ,111,428 11,678,041 11,914, % 499,558 29,400 0 $3.26 Deltona/Daytona. 1,317 18,904, , , % 404, ,000 $5.22 Denver 8, ,667,619 7,797,749 8,632, % 1,873,377 3,143,910 4,174,879 $7.28 Des Moines 1,485 56,397,227 1,991,159 2,040, % 1,682,361 1,574, ,691 $4.71 Detroit 15, ,733,962 18,394,588 18,544, % 4,234,800 1,072,074 2,427,931 $4.73 Duluth ,688, , , % 20, $5.34 East Bay/Oaklan. 6, ,165,411 8,126,935 8,938, % 1,195,844 2,095,089 1,440,374 $8.23 El Paso 1,743 56,482,133 5,700,715 5,760, % 204,945 50,720 0 $3.55 Erie ,267, , , % 321, $3.50 Evansville ,534,599 2,606,040 2,787, % 661, ,000 $2.79 Fayetteville ,350,806 1,819,961 1,932, % (275,430) 38,000 0 $3.72 Fayetteville/Sp ,210,836 1,221,548 1,221, % 617, ,078 $3.92 Fort Smith ,164,940 2,291,777 2,291, % 843,859 31,500 0 $2.99 Fort Wayne 1,170 53,437,725 2,797,248 2,802, % (586,357) 76,440 60,000 $3.60 Fresno 3,423 89,608,743 4,205,950 4,222, % 1,375, ,812 7,500 $4.10 Source: CoStar Property 22 The CoStar Industrial Report 2016 CoStar Group, Inc.

28 Figures at a Glance Third Quarter 2016 National Warehouse Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Green Bay 1,584 58,903,701 1,545,668 1,545, % 722, ,265 0 $3.62 Greensboro/Wins. 5, ,727,983 12,308,315 12,613, % 3,474,250 1,095,540 1,105,069 $3.22 Greenville/Spar. 4, ,666,688 13,775,446 13,780, % 6,144,805 6,728,805 1,996,456 $3.50 Hampton Roads 2,908 97,473,990 5,550,637 5,888, % 381,089 62, ,045 $5.33 Hartford 5, ,856,211 14,252,749 14,375, % (47,756) 378, ,700 $4.12 Hawaii 2,569 50,990, , , % 21,827 23, ,481 $13.38 Houston 16, ,392,446 26,468,656 27,875, % 6,809,230 11,092,283 7,231,756 $6.27 Huntington/Ashl ,694, , , % 179, ,000 $3.31 Huntsville ,972,980 2,009,682 2,009, % 570, , ,000 $4.54 Indianapolis 5, ,144,490 16,165,692 17,338, % 7,120,152 3,003,698 4,002,716 $3.72 Inland Empire (. 11, ,412,814 27,590,334 29,216, % 16,465,095 18,135,296 15,355,342 $6.05 Jackson ,744,700 1,392,884 1,392, % 95,474 4,000 0 $3.91 Jacksonville (F. 3, ,858,688 6,032,350 6,078, % 2,033, ,278 23,201 $3.94 Kansas City 6, ,461,477 14,883,232 15,226, % 4,190,635 6,440,038 8,629,463 $4.25 Killeen/Temple/ ,995, , , % 21, $4.47 Kingsport/Brist ,413, , , % 293, $3.01 Knoxville 1,844 62,204,563 2,133,002 2,133, % 1,223,605 60, ,960 $3.66 Lafayette 430 7,924, , , % 868, ,000 $5.86 Las Vegas 3, ,233,041 6,043,229 6,262, % 1,199,816 1,842,633 3,763,925 $6.62 Lexington/Fayet. 1,264 47,312,299 1,521,992 1,521, % 133, ,673 12,661 $4.55 Lincoln ,154,187 1,005,964 1,005, % 153, ,325 54,470 $4.58 Little Rock/N L. 1,965 59,031,892 4,516,236 4,516, % 465, ,455 0 $3.03 Long Island (Ne. 14, ,202,157 10,561,593 10,949, % (249,128) 191, ,042 $14.67 Los Angeles 34, ,212,293 18,489,199 19,713, % 752,491 1,705,718 5,369,837 $8.78 Louisville 4, ,195,935 9,989,254 10,071, % 2,507,023 3,149,156 4,933,577 $3.69 Lubbock 2,038 32,726, , , % (141,778) 0 0 $3.31 Madison 2,025 85,089,660 3,074,226 3,074, % 1,542, ,957 1,747,000 $4.27 McAllen/Edinbur ,693,969 1,790,290 1,790, % 692, ,054 0 $5.40 Memphis 3, ,012,878 16,562,118 17,854, % 4,147,611 1,886,013 1,915,136 $4.30 Miami-Dade Coun 8, ,495,115 8,139,430 8,352, % 2,141,437 1,395,267 4,359,280 $9.05 Milwaukee 6, ,496,191 13,985,858 14,033, % 1,584, , ,586 $4.13 Minneapolis 8, ,686,976 11,702,443 12,332, % 3,402,059 2,325, ,727 $5.97 Mobile 1,092 26,413,729 2,812,753 2,824, % 138, ,000 $4.19 Montgomery ,903,494 2,675,336 2,675, % 184, ,400 4,982 $2.87 Myrtle Beach/Co ,771, , , % (28,803) 0 5,000 $4.99 Nashville 3, ,098,328 6,088,301 6,249, % 5,126,656 1,516,120 4,611,026 $4.29 New Orleans/Met. 3,549 63,656,711 2,309,773 2,358, % 1,125,948 84,571 15,000 $5.83 North Bay/Santa. 3,094 86,162,883 3,632,407 3,657, % 1,938,343 1,201,287 1,673,825 $7.60 Northern New Je. 16, ,375,502 40,597,811 42,819, % 8,941,418 3,683,831 7,226,938 $6.29 Ocala ,117, , , % 136, $3.92 Oklahoma City 5, ,578,137 3,549,520 3,649, % 3,405,621 3,228, ,812 $5.01 Olympia ,362, , , % 366, ,064 $5.21 Omaha/Council B. 2,743 78,858,277 1,683,938 1,683, % 224, , ,356 $5.06 Orange County (. 9, ,511,650 5,094,068 5,395, % 712, , ,766 $9.01 Orlando 5, ,101,723 7,746,089 8,004, % 2,744, ,505 1,389,386 $5.66 Palm Beach Coun. 2,632 48,740,745 2,034,043 2,034, % 822, , ,206 $9.29 Pensacola ,887, , , % 326,242 17,779 0 $4.71 Source: CoStar Property Existing Inventory Vacancy 2016 CoStar Group, Inc. The CoStar Industrial Report 23

29 National Third Quarter 2016 Figures at a Glance Warehouse Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Peoria ,272,390 1,415,551 1,415, % (413,876) 0 0 $3.72 Philadelphia 17, ,297,035 62,221,348 63,600, % 11,987,376 9,649,943 20,120,759 $4.36 Phoenix 8, ,972,326 26,827,316 27,974, % 3,075,280 4,250,683 2,064,442 $6.06 Pittsburgh 4, ,297,875 8,355,835 8,378, % 1,740, , ,364 $5.03 Port St Lucie/F. 1,077 18,240, , , % 315,343 10,599 0 $6.87 Portland 5, ,610,166 6,805,568 7,023, % 1,526,061 1,017,120 1,999,289 $6.76 Portland/South ,526, , , % 676,127 16,560 31,595 $5.08 Providence 2,628 77,770,546 3,409,941 3,425, % 911, ,625 70,288 $4.73 Raleigh/Durham 2,350 92,198,324 4,149,229 4,522, % 871, , ,986 $5.05 Reno/Sparks 1,611 85,885,437 7,941,216 10,020, % 2,971,662 4,117,514 7,757,342 $4.12 Richmond VA 2, ,373,097 7,323,545 7,601, % 861, , ,000 $3.60 Roanoke ,935,037 1,873,006 1,902, % 319, ,000 $3.52 Rochester 1,991 86,001,703 5,335,658 6,117, % 538, ,700 12,000 $4.45 Sacramento 5, ,519,890 12,314,723 12,591, % 2,484, , ,254 $4.71 Salinas ,637, , , % 243,202 9,895 0 $6.20 Salt Lake City 6, ,810,659 9,208,644 9,943, % 522,469 2,955,816 2,494,962 $4.97 San Antonio 3, ,501,580 6,150,889 6,298, % 1,931,676 2,314, ,695 $5.57 San Diego 6, ,958,516 5,994,412 6,290, % 91, , ,798 $10.13 San Francisco 3,977 69,348,867 1,460,638 1,583, % 335, $15.23 San Luis Obispo ,988, , , % (45,089) 186,715 15,756 $8.59 Santa Barbara/S. 1,048 11,962, , , % 548, ,318 20,000 $9.12 Santa Cruz/Wats ,229, , , % (175,564) 0 194,151 $11.23 Savannah 1,142 50,688,418 1,068,702 1,192, % 980, ,125 1,924,121 $4.25 Seattle/Puget S. 7, ,518,784 9,154,442 9,403, % 4,032,965 2,244,174 2,866,081 $6.64 Shreveport/Boss ,906,326 3,974,495 4,021, % (730,388) 15,500 0 $3.02 South Bay/San J. 3,647 91,935,394 1,923,674 2,001, % 982, ,827 $11.79 South Bend/Mish ,246,488 1,335,659 1,471, % 135, ,480 $3.13 Southwest Flori. 3,270 42,099,401 1,031,521 1,111, % 774, , ,879 $6.63 Spokane 1,771 40,297, , , % 368, ,150 $5.41 Springfield ,727,418 1,393,769 1,393, % 242, ,000 0 $3.93 St. Louis 5, ,190,828 14,341,095 14,628, % 3,856,289 2,822,338 3,734,283 $3.97 Stockton/Modest. 3, ,599,272 7,680,666 7,910, % 3,573,187 2,744, ,527 $4.26 Syracuse 1,719 83,863,546 7,317,129 7,361, % 70, ,499 54,000 $3.78 Tallahassee ,225, , , % 190, ,379 $4.78 Tampa/St Peters. 10, ,557,665 13,722,504 13,946, % 5,381,535 3,907,544 1,808,733 $5.17 Toledo 2, ,532,028 6,235,579 6,580, % 726, , ,215 $3.11 Tucson 2,056 32,155,387 2,546,970 2,585, % 1,043, , ,971 $6.21 Tulsa 3,809 94,354,814 3,604,566 3,604, % 702, , ,041 $4.38 Utica/Rome ,100,532 2,225,132 2,225, % 306, ,170 $3.11 Visalia/Porterv. 1,012 30,454, , , % (177,758) 4,901 64,500 $4.56 Washington 4, ,495,869 10,666,853 10,874, % 3,377,778 2,778, ,208 $8.68 West Michigan 8, ,664,131 9,993,000 10,293, % 2,091,455 1,143,136 1,418,426 $3.50 Westchester/So. 6, ,883,673 14,314,479 14,410, % 1,509, , ,984 $7.72 Wichita 1,826 47,630,459 2,181,274 2,190, % 347, , ,000 $4.17 Wilmington ,864,159 2,298,049 2,334, % 115,046 10,086 30,600 $3.06 Yakima ,029, , , % 33, ,000 $4.92 Youngstown/Warr 1,499 57,628,074 6,706,682 6,706, % (236,097) 0 12,000 $2.86 Totals 544,992 19,537,255,013 1,018,131,272 1,055,395, % 243,578, ,243, ,132,194 $5.30 Source: CoStar Property 24 The CoStar Industrial Report 2016 CoStar Group, Inc.

30 Figures at a Glance Third Quarter 2016 National Total Industrial Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Albany/Schenect. 2, ,014,865 5,664,831 5,664, % 793, ,000 1,167,796 $4.93 Albuquerque 2,577 50,958,897 1,977,646 2,000, % 365,027 52,510 0 $6.35 Anchorage ,604, , , % (18,440) 0 0 $12.69 Asheville ,457, , , % 433, , ,000 $4.37 Atlanta 16, ,657,570 46,897,445 49,846, % 10,885,382 13,598,816 15,272,904 $4.52 Augusta/Richmon 1,116 39,898,266 3,388,777 3,388, % (970,879) 93, ,135 $3.42 Austin 3,965 97,700,297 4,206,454 4,462, % 1,937,858 1,731,668 1,914,746 $9.31 Bakersfield 1,594 25,822,622 1,112,609 1,159, % (77,566) 271,403 68,756 $7.98 Baltimore 4, ,485,623 20,203,250 20,914, % 3,211,522 1,342,078 2,546,076 $5.97 Baton Rouge 1,650 27,890,888 1,622,389 1,622, % 779, ,306 1,267,000 $6.08 Beaumont/Port A ,612, , , % 272, ,300 20,000 $6.40 Birmingham 4, ,599,891 6,517,035 6,556, % 1,595, ,900 1,803,000 $3.60 Boise City/Namp. 1,959 42,080,362 1,543,899 1,689, % 638, , ,940 $5.81 Boston 12, ,861,184 31,164,444 32,494, % 4,430,779 2,157,045 1,382,295 $6.73 Bremerton/Silve ,762,431 64,392 64, % 28, $9.47 Broward County 6, ,246,489 5,854,245 6,054, % 1,847, ,195 1,229,554 $9.32 Brownsville/Har ,506,110 1,086,089 1,086, % 283, $4.89 Buffalo/Niagara. 1,597 74,488,436 5,660,076 5,660, % 726, ,450 1,200,000 $5.11 Charleston WV ,797, , , % (46,398) 0 38,000 $5.56 Charleston/N Ch. 2,775 71,417,653 5,110,933 5,662, % 1,251,767 1,604,465 3,544,512 $5.37 Charlotte 7, ,753,126 19,011,757 19,478, % 4,911,453 2,550,154 1,366,620 $4.29 Chattanooga ,745,396 3,737,369 3,737, % 1,279, , ,813 $3.13 Chicago 22,884 1,177,033,054 75,958,760 78,065, % 13,648,960 12,172,945 18,184,882 $5.74 Cincinnati 6, ,203,182 16,860,841 17,758, % 2,560,597 3,389,293 1,893,138 $3.68 Cleveland 12, ,643,206 22,456,504 23,442, % 1,852,189 1,329, ,248 $4.00 Colorado Spring. 1,877 33,458,683 3,047,307 3,119, % (17,932) 20,000 56,000 $6.40 Columbia 2,076 60,557,244 4,606,851 4,628, % 906, ,527 20,000 $4.01 Columbus 5, ,760,121 14,668,534 15,222, % 5,844,627 4,537,910 1,327,350 $3.55 Columbus GA 1,034 44,263,945 4,346,771 4,346, % 614, , ,000 $2.96 Corpus Christi 1,473 21,277, , , % (75,829) 50,000 1,629,136 $6.84 Dallas/Ft Worth 20, ,734,841 49,862,193 51,239, % 19,134,880 15,313,369 22,347,583 $5.36 Davenport/Molin ,283, , , % 189,562 30,000 0 $4.03 Dayton 3, ,006,223 12,105,803 12,342, % 569,963 89,400 0 $3.51 Deltona/Daytona. 1,436 20,551, , , % 452, ,000 $5.67 Denver 10, ,770,248 12,252,370 13,239, % 2,225,326 3,297,569 4,559,050 $8.25 Des Moines 1,708 65,251,537 2,390,542 2,439, % 1,697,339 1,637,390 1,147,271 $4.97 Detroit 16, ,331,076 22,347,857 22,520, % 5,161,113 1,072,074 2,568,424 $5.25 Duluth ,053, , , % 26, $5.67 East Bay/Oaklan. 8, ,694,280 12,029,944 13,093, % 2,327,221 2,145,089 1,440,374 $10.29 El Paso 2,092 62,698,689 5,979,029 6,042, % 303,426 50,720 0 $3.80 Erie ,702, , , % 324, $3.55 Evansville ,604,034 2,683,030 2,864, % 824, ,000 56,000 $2.93 Fayetteville ,394,075 1,890,006 2,002, % (245,275) 38,000 36,000 $4.04 Fayetteville/Sp ,403,530 1,253,988 1,253, % 652, ,078 $4.04 Fort Smith ,366,152 2,352,167 2,352, % 853,059 31,500 0 $3.01 Fort Wayne 1,333 57,414,522 3,109,069 3,113, % (579,832) 76,440 60,000 $3.69 Fresno 3,536 91,480,030 4,301,464 4,318, % 1,501, ,812 7,500 $4.22 Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 25

31 National Third Quarter 2016 Figures at a Glance Total Industrial Market Statistics Third Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Green Bay 1,893 67,518,931 1,797,980 1,797, % 810, ,265 0 $3.82 Greensboro/Wins. 6, ,921,715 12,857,704 13,166, % 3,871,749 1,095,540 1,105,069 $3.33 Greenville/Spar. 4, ,032,927 14,365,841 14,372, % 6,396,280 6,892,805 2,017,956 $3.67 Hampton Roads 3, ,389,670 7,255,136 7,616, % 207,127 68, ,645 $6.11 Hartford 6, ,483,014 15,872,839 16,201, % 315, , ,700 $4.44 Hawaii 2,651 52,744, , , % 33,619 23, ,481 $13.73 Houston 18, ,969,671 29,717,095 31,323, % 6,848,219 11,478,640 7,465,046 $6.63 Huntington/Ashl ,026, , , % 195, ,000 $3.35 Huntsville ,401,345 2,683,184 2,703, % 622, , ,000 $5.75 Indianapolis 6, ,138,023 17,652,182 18,880, % 7,426,739 3,022,198 4,017,716 $4.09 Inland Empire (. 12, ,724,377 28,564,927 30,196, % 16,547,726 18,135,296 15,355,342 $6.26 Jackson ,908,163 1,483,574 1,483, % 165,118 4,000 0 $4.21 Jacksonville (F. 3, ,482,360 6,676,649 6,722, % 2,136, ,278 23,201 $4.27 Kansas City 6, ,149,994 15,760,067 16,117, % 4,355,478 6,440,038 8,662,463 $4.44 Killeen/Temple/ ,120, , , % 26,068 4,875 0 $4.55 Kingsport/Brist ,441, , , % 296, $3.11 Knoxville 2,819 74,441,391 2,312,603 2,353, % 1,275,441 60, ,960 $3.90 Lafayette 454 8,441, , , % 850, ,000 $5.92 Las Vegas 4, ,772,727 7,454,570 7,685, % 1,316,129 1,842,633 3,763,925 $7.06 Lexington/Fayet. 1,441 50,749,824 1,929,632 1,932, % (48,518) 492,673 12,661 $4.87 Lincoln 1,060 27,540,428 1,053,241 1,053, % 141, ,325 54,470 $4.74 Little Rock/N L. 2,540 67,953,149 4,944,449 4,944, % 520, ,455 0 $3.23 Long Island (Ne. 15, ,349,476 11,712,973 12,367, % (421,009) 191, ,842 $14.80 Los Angeles 37, ,744,760 20,942,333 22,402, % 814,666 1,741,663 5,769,837 $9.46 Louisville 4, ,234,668 10,352,698 10,435, % 2,558,964 3,149,156 4,933,577 $3.81 Lubbock 2,062 33,792, , , % (124,918) 0 0 $3.59 Madison 2,300 93,499,197 3,645,584 3,645, % 1,317, ,957 1,804,000 $4.50 McAllen/Edinbur ,132,700 1,885,991 1,885, % 684, ,054 0 $5.61 Memphis 3, ,507,779 17,904,988 19,204, % 4,321,139 1,888,713 1,915,136 $4.42 Miami-Dade Coun 8, ,511,543 8,944,992 9,160, % 2,302,795 1,398,767 4,359,280 $9.41 Milwaukee 7, ,984,547 15,861,843 15,910, % 2,188, , ,586 $4.44 Minneapolis 9, ,091,449 16,827,615 17,647, % 4,152,273 2,335, ,527 $6.53 Mobile 1,336 28,850,794 2,942,651 2,954, % 151, ,000 $4.29 Montgomery ,987,463 2,894,678 2,894, % 221, ,400 4,982 $3.37 Myrtle Beach/Co ,013, , , % 4,778 25,000 9,756 $5.19 Nashville 4, ,071,446 6,589,058 6,769, % 5,262,549 1,516,120 4,636,590 $4.72 New Orleans/Met. 3,804 67,070,475 2,489,607 2,538, % 1,184, ,453 15,000 $5.98 North Bay/Santa. 3, ,197,371 4,620,478 4,653, % 2,047,990 1,201,287 1,673,825 $8.94 Northern New Je. 17, ,714,905 45,940,198 48,629, % 10,549,095 3,704,731 7,369,588 $6.66 Ocala ,692, , , % 117, $4.12 Oklahoma City 6, ,734,451 4,549,600 4,649, % 3,369,222 3,258, ,812 $5.25 Olympia ,881, , , % 366, ,064 $5.25 Omaha/Council B. 3,088 86,599,012 2,219,117 2,219, % 422, , ,356 $5.37 Orange County (. 12, ,863,538 6,778,060 7,176, % 1,209, , ,766 $10.24 Orlando 7, ,883,926 10,529,312 10,838, % 3,302,823 1,032,074 1,405,716 $6.29 Palm Beach Coun. 3,228 59,928,553 2,428,094 2,441, % 983, , ,206 $9.72 Pensacola 1,121 17,631, , , % 368,008 17,779 0 $4.88 Source: CoStar Property Existing Inventory Vacancy 26 The CoStar Industrial Report 2016 CoStar Group, Inc.

32 Figures at a Glance Third Quarter 2016 National Total Industrial Market Statistics Third Quarter 2016 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Peoria ,454,744 1,439,558 1,439, % (420,619) 0 0 $3.98 Philadelphia 21,128 1,066,187,270 68,560,183 70,024, % 13,239,271 9,905,768 20,247,759 $4.81 Phoenix 10, ,991,861 31,130,815 32,546, % 3,039,638 4,676,188 2,340,076 $6.91 Pittsburgh 5, ,496,630 10,388,657 10,426, % 2,002, , ,497 $5.70 Port St Lucie/F. 1,241 20,875, , , % 238,655 10,599 0 $7.10 Portland 6, ,693,627 8,222,702 8,480, % 1,943,397 1,079,120 1,999,289 $7.75 Portland/South. 1,089 30,344, , , % 753,385 25,280 31,595 $5.27 Providence 2,806 82,586,635 4,070,724 4,094, % 889, ,625 70,288 $4.90 Raleigh/Durham 3, ,075,363 6,459,955 6,865, % 753, ,468 1,031,964 $6.72 Reno/Sparks 1,978 94,612,361 8,472,495 10,551, % 2,923,772 4,126,514 7,757,342 $4.30 Richmond VA 3, ,931,787 8,442,327 8,735, % 1,113, , ,000 $4.20 Roanoke ,127,675 2,057,431 2,086, % 297, ,000 $3.67 Rochester 2,190 98,673,579 6,995,440 7,801, % 708, ,700 12,000 $4.72 Sacramento 6, ,908,200 15,192,844 15,523, % 2,735, , ,054 $5.51 Salinas ,529, , , % 254,627 9,895 20,600 $6.46 Salt Lake City 7, ,869,097 10,368,444 11,156, % 715,190 2,955,816 2,761,287 $5.32 San Antonio 4, ,048,121 7,135,008 7,290, % 1,965,927 2,353, ,695 $6.10 San Diego 8, ,194,860 9,154,187 9,911, % 644, ,774 1,579,455 $12.21 San Francisco 4,777 93,686,101 2,390,874 2,591, % 238, , ,053 $19.97 San Luis Obispo ,708, , , % (55,430) 186,715 15,756 $9.15 Santa Barbara/S. 1,216 16,007, , , % 485, ,318 20,000 $10.81 Santa Cruz/Wats ,558, , , % (160,572) 0 194,151 $11.96 Savannah 1,294 52,353,682 1,200,017 1,323, % 1,027, ,925 1,924,121 $4.36 Seattle/Puget S. 8, ,339,984 10,765,538 11,103, % 4,590,229 2,244,174 2,866,081 $7.84 Shreveport/Boss. 1,033 28,435,253 4,095,514 4,142, % (686,101) 15,500 0 $3.08 South Bay/San J. 6, ,184,604 10,478,964 11,219, % 1,242, ,752 1,449,339 $19.58 South Bend/Mish ,851,954 1,438,465 1,573, % 161, ,480 $3.24 Southwest Flori. 3,656 48,411,124 1,407,316 1,514, % 902, , ,879 $6.97 Spokane 2,035 44,501,441 1,166,971 1,215, % 357, ,150 $5.66 Springfield ,597,923 1,396,169 1,396, % 275, ,000 0 $3.96 St. Louis 6, ,295,731 15,689,825 15,977, % 3,986,381 2,947,338 4,339,283 $4.27 Stockton/Modest. 3, ,859,580 7,847,990 8,078, % 3,591,787 2,744, ,527 $4.28 Syracuse 2,418 93,237,884 7,522,987 7,567, % 97, , ,000 $3.96 Tallahassee 1,070 16,030, , , % 305,734 48,030 38,379 $4.83 Tampa/St Peters. 12, ,854,972 16,449,107 16,767, % 5,832,289 4,038,714 1,808,733 $5.61 Toledo 3, ,478,741 6,720,300 7,065, % 781, , ,215 $3.30 Tucson 2,527 41,754,313 3,301,883 3,344, % 1,208, , ,971 $6.86 Tulsa 4, ,388,725 3,914,453 3,914, % 667, , ,041 $4.63 Utica/Rome ,497,970 2,296,022 2,296, % 310, ,170 $3.24 Visalia/Porterv. 1,072 30,782,127 1,001,745 1,001, % (172,558) 4,901 64,500 $4.54 Washington 6, ,752,713 17,665,967 18,020, % 4,312,494 3,335,178 1,537,748 $10.09 West Michigan 8, ,877,290 10,431,070 10,731, % 2,232,005 1,193,136 1,418,426 $3.79 Westchester/So. 7, ,310,838 16,854,291 17,035, % 1,489, , ,584 $8.41 Wichita 1,889 49,141,575 2,320,511 2,329, % 386, , ,000 $4.31 Wilmington 1,040 20,330,345 2,517,590 2,553, % 177,214 28,086 65,600 $3.59 Yakima ,492, , , % 33, ,000 $5.08 Youngstown/Warr 1,546 58,510,439 6,782,917 6,782, % (255,032) 0 12,000 $2.92 Totals 636,601 21,853,456,371 1,182,157,762 1,225,489, % 264,136, ,305, ,403,350 $6.01 Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 27

33 National Third Quarter 2016 Figures at a Glance 28 The CoStar Industrial Report 2016 CoStar Group, Inc.

34 Leasing Activity Third Quarter 2016 National Historical Rental Rates* $14.00 Flex Warehouse Total Market $12.00 $10.00 Dollars/SF/Year $8.00 $6.00 $4.00 $2.00 $ q q q q q q q q q q q q q q q q Source: CoStar Property * Select markets included in this historical chart - see Methodology page. Vacancy by Available Space Type Percent of All Vacant Space in Direct vs. Sublet 4% Direct Sublet Vacancy by Building Type Percent of All Vacant Space by Building Type Flex Warehouse 14% 86% 96% Source: CoStar Property Source: CoStar Property Future Space Available Space Scheduled to be Available for Occupancy in the Future* q q q q q q * includes Under Construction Spaces Source: CoStar Property 2016 CoStar Group, Inc. The CoStar Industrial Report 29

35 National Third Quarter 2016 Leasing Activity Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2016 Building Market SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company Penry Rd Greensboro/Winston-Salem 1,546,815 1st NFI Industries, Inc. CBRE Triad Colliers International 2 60 Herring Rd Atlanta 1,400,000 2nd Variety Wholesalers N/A Cushman & Wakeeld of Georgia, Inc Indian Ave Inland Empire (California) 1,244,874 2nd Wayfair JLL Duke Realty Corporation; Colliers I 4 Southeld Park 35, Building 1 Dallas/Ft Worth 1,128,227 3rd NFI Industries, Inc. CBRE JLL 5 Alliance California Gateway South - Bldg 3 Inland Empire (California) 1,102,639 1st Amazon N/A Colliers International Northport Pky Savannah 1,100,000 1st JLA Homes N/A N/A 7 Trammell Crow at 35 Eagle - Building B Dallas/Ft Worth 1,041,879 2nd Amazon N/A CBRE 8 Goodman Commerce Center Eastvale - Building B Inland Empire (California) 1,033,192 2nd Amazon Cushman & Wakeeld JLL 9 Georgia-Pacic Chicago 1,000,560 3rd Georgia Pacic Colliers International Venture One Real Estate, LLC 10 Cranbury Station Park - 1 Northern New Jersey 930,030 2nd Wayfair Transwestern RBJ Cushman & Wakeeld of New Jersey, W Monee Manhattan Rd Chicago 856,605 3rd Amazon Cushman & Wakeeld Cushman & Wakeeld Distribution Dr Atlanta 846,496 2nd Wayfair N/A CBRE 13 Inland Port XIV Kansas City 822,104 1st Amazon Cushman & Wakeeld JLL Middlesex Ave Northern New Jersey 809,762 1st Amazon N/A N/A 15 Majestic Airport Center DFW - Building 5 Dallas/Ft Worth 799,460 1st Bed Bath & Beyond N/A Majestic Realty Co. 16 Summit II* Memphis 789,291 3rd Technicolor N/A Cushman Wakefield Commercial Advi 17 Lakeview Commerce Center IV St. Louis 769,500 2nd Amazon N/A JLL Remington Blvd Chicago 767,161 2nd Amazon Cushman & Wakeeld NAI Himan 19 Livonia Corporate Center - Bldg 3 Detroit 754,744 2nd Ford Motor Company N/A Newmark Grubb Knight Frank 20 Stateline F* Memphis 740,844 3rd ScanSource, Inc. N/A Cushman Wakefield Commercial Advi Mile Rd Detroit 711,547 2nd Topvalco, Inc N/A Signature Associates 22 Summit I Memphis 708,532 1st Nike INC CBRE Colliers Management Services, LLC; 23 Gateway Business Park Philadelphia 705,000 2nd Jet.com N/A Matrix Development Group Talmadge Rd Northern New Jersey 695,072 1st FedEx N/A CBRE Springside Rd Philadelphia 682,708 3rd Camuto Group N/A Dolan Contractors, Inc. 26 Liberty Business Center II - Lot 4 Philadelphia 650,000 3rd East Penn Manufacturing Co. CBRE Liberty Property Trust 27 Renaissance South Business Park Louisville 645,840 3rd Hillsdale Furniture N/A CBRE 28 The Oaks Logistics Center - Building #1 East Bay/Oakland 635,533 2nd Tesla Motors N/A Colliers International; CBRE Vista Blvd Reno/Sparks 629,552 2nd ITS Reno Property Management Kidder Mathews Cedar Ln Philadelphia 613,920 1st Amazon N/A Liberty Property Trust 31 Greenwood Industrial Bldg 400* Atlanta 612,070 3rd The Home Depot N/A Cushman & Wakeeld of Georgia, Inc 32 Inland Port XV Kansas City 548,333 3rd Smart Warehousing N/A JLL 33 Warehouse Bldg 2200* Baltimore 532,515 3rd Henry Bath, LLC. N/A CBRE E Carson St* Los Angeles 521,856 3rd Sony Electronics Inc N/A Cushman & Wakeeld 35 Marsheld Business Park - Bldg 2* Baltimore 507,600 2nd Restoration Hardware, Inc. N/A CBRE 36 Telemundo Bldg 1 South Florida 467,000 1st Telemundo Studios N/A Cushman & Wakeeld 37 Airport Commerce Center I Louisville 459,849 1st Hillsdale Furniture N/A CBRE Global Ave* Augusta/Richmond County 449,700 2nd Kimberly Clark Corporation N/A Cushman & Wakeeld Thalhimer S Acacia Ave Orange County (California) 441,020 3rd 3PL Global LLC Cresa Orange County Savills Studley; CBRE 40 91st Avenue Property Phoenix 417,600 3rd States Logistics Cushman & Wakeeld Cushman & Wakeeld Source: CoStar Property * Renewal 30 The CoStar Industrial Report 2016 CoStar Group, Inc.

36 Sales Activity Third Quarter 2016 National The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates From Each Region 8.0% Cap Rate Price/SF $200 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% $190 $180 $170 $160 $150 $140 $130 $120 Dollars/SF 2.0% q q q $110 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From July June 2016 $12,000 Sales Volume Price/SF $80 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $10,000 $8,000 $6,000 $4,000 $2,000 $70 $60 $50 $40 $30 $20 $10 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 6,401 73,443,465 $8,768,505,840 $ % 3, ,284,223 $11,348,089,467$ % ,271,892 $8,489,702,318 $ % $ q q q q $0 >250K SF ,011,761 $10,917,874,403$ % Source: CoStar COMPS Source: CoStar COMPS Historical Price/SF Average Based on Industrial Building Sales of 15,000 SF and Larger Historical Cap Rate Average Based on Industrial Building Sales of 15,000 SF and Larger $75 8.2% $70 8.0% $65 $60 $55 $50 Cap Rate Percentage 7.8% 7.6% 7.4% $45 7.2% $40 7.0% q q q q 2016 Source: CoStar COMPS Source: CoStar COMPS 2016 CoStar Group, Inc. The CoStar Industrial Report 31

37 32 The CoStar Industrial Report 2016 CoStar Group, Inc. National Third Quarter 2016 Sales Activity