Over 1.2 Million Square Feet Absorbed as the Industrial Market s Strong Pace Continues

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1 AUGUST 2015 INDUSTRIAL MINNEAPOLIS-ST. PAUL INDUSTRIAL MARKET REPORT Over 1.2 Million Square Feet Absorbed as the Industrial Market s Strong Pace Continues MARKET INDICATORS Q VACANCY NET ABSORPTION VACANCY Percent Vacant 20% 15% % 5% 0 RENTAL RATE.4% 8.6% 13.1% 12.5% 11.5%.5% 9.4% 8.6% 8.4% Q2 NET ABSORPTION VACANCY AND ABSORPTION TRENDS The vacancy rate in the - Industrial market was down slightly to 8.4 percent in the Second Quarter of Absorption was 626,624 square feet bringing the year-to-date total to 1,238,812 square feet. During the Second Quarter, over 1.4 million square feet of new industrial space was added to the market. 635,064 square feet of this space was in single-tenant developments for Room & Board and Blu Dot at Gateway Business Center in Otsego. The rest of the space added was in the following speculative developments: NAME CITY SUBMARKET DEVELOPER SF Red Rock Building Maple Grove West/west United Properties 319,062 Dayton Distribution Center I Dayton West/west Liberty Property Trust 247,004 Highcrest Distribution Center Roseville Meritex 130,000 Shakopee Industrial Center II Shakopee Southwest Capp Industries 121,000 Bunzl Distribution absorbed 155,000 square feet at Red Rock Industrial Building in June, while the rest of the 817,066 square feet of multi-tenant space came on to the market vacant. The addition of this space to the market kept the vacancy rate from decreasing more than slightly, in spite of steady absorption. There are few large users in the market for 0,000 square feet or more and landlords at the multiple new bulk developments are competing heavily for those tenants. Polaris signed a lease for 850,000 square feet of space at Canterbury Distribution Center in Shakopee, which was formerly a Kmart distribution center. Other large tenants have chosen to build their own facilities; forgoing the process of customizing an existing building to meet specific corporate goals. These trends may result in longer-than-expected leasing time at new bulk multi-tenant buildings. SF Absorbed 3,000,000 2,000,000 1,000,000 0 (1,000,000) (2,000,000) (3,000,000) 1,4,063 (928,872) (2,430,461) 2,011,292 1,369,692 1,677,707 1,261,325 1,238, , YTD In some submarkets, including the Southwest, we have seen a slight decrease in the probability of a tenant renewing in their current space. This is likely due to an overall improvement in the economy, allowing tenant s to re-engage their growth plans, causing the need for larger leased premises, as opposed to trying the leverage a better deal in their existing spaces. We are seeing strong activity among office showroom space users, especially in the southern submarkets. Concessions are decreasing for this property type, especially at well-located, functional properties. Also in demand across all submarkets are owner-user buildings where there is low supply and strong demand.

2 OFFICE SPACE WORKPLACE DESIGN TRENDS LEAKING INTO INDUSTRIAL MARKET On the horizon for industrial space use are features that follow trends seen in the office market, many of which allow for flexibility in the future use of the space to reduce the potential for obsolescence. Higher parking counts, more windows for natural light and sustainable designs are key. All types of business owners are evaluating the need for collaborative spaces that include functionality and provide amenities for workers. FUTURE TRENDS This spring it was announced that Amazon.com plans to invest $220M in Shakopee to build an 820,000 square foot distribution center. The undeveloped site is on the southwest corner of Shenandoah Drive and Highway 1, about a half-mile north of Canterbury. Amazon acquired the site from United Properties and is scheduled to open the facility in the fall of Amazon also plans to lease a separate building in Shakopee, the 162,000-square-foot Minnesota Valley Distribution Center I, for use as a sorting center. The presence of Amazon in Shakopee continues the transition from a city mostly known for its theme park and race track, into one of the state s biggest clusters of technology companies. Construction costs will continue to be a challenge as demand for materials and workers for other regional projects including the new Vikings stadium lengthens timelines and increases costs. While this is challenging for developers and builders, it makes for high replacement costs which helps keep sale prices up at existing buildings. We expect vacancy to remain flat over coming quarters as additional speculative space is delivered to the market. While the new space may not lease as quickly as expected, the long-term viability of the industrial market remains strong and the appeal of this area as a Midwestern distribution hub will continue to attract new tenants and prompt expansion of existing industrial businesses. Submarket Highlights Q2 ABSORPTION Q2 VACANCY SF Absorbed 400, ,000 0 (200,000) 75,473 1, ,197 (19,874) 258,379 % Vacant % 7.1% % 7.0% 8.9% (400,000) Airport/ South of the River Southwest East West/ west 0 Airport/ South of the River Southwest East West/ west AIRPORT/SOUTH OF THE RIVER The vacancy rate in the Airport/South of the River submarket is 8.6 percent, down from 9.2 percent at Quarter One. Activity was steady as absorption was 75,473 square feet for the quarter bringing the year-todate total to 124,704. The submarket absorbed 377,258 square feet in all of The Airport/South of the River Submarket is the smallest of the submarkets we track and construction is not as active as in the West/ west or Southwest submarkets, but demand has remained steady and development is occurring. Scannell Properties is planning South Logistics on 176 acres in ville. The site has easy access to I-35 and is located next to several buildings Setzer Properties is building for FedEx Freight. Uponor America began construction on an expansion to their existing manufacturing facility in Apple Valley. The project will include a total of 88,000 square feet of both renovation and expansion space to accommodate both manufacturing and office space.

3 SOUTHWEST The vacancy rate in the Southwest submarket is.0 percent, down from 11 percent at Quarter One. Absorption was 211,197 square feet, bringing the year-to-date total to 406,265 square feet. Generally, the lease market in the Southwest has become more favorable to landlords compared to this time last year. Our submarket experts note today s average lease being executed for bulk warehouse space are for terms between five to years, versus three to seven year deals that were most common in Also, the spread between asking rents and actual rents has narrowed in the last 12 months, with most contract rates landing at 90+ percent of quoted asking rates. Tenant improvement allowances on existing buildings are averaging $2-$5 PSF on warehouse space, and $20 PSF for associated office space. For new construction buildings, the tenant improvement allowance on the warehouse space averages $5 PSF and $50-$75 PSF for associated office space. The renewal lease market has also improved in the Southwest over the last several quarters. The practice of rolling back a tenant s rent upon renewal to a lower base rent has abated, and today, the most common renewal structure includes a first year rent equal to the existing rent, with 2.5%-3.0% annual escalations. Additionally, we are seeing showroom space in the 25,000 SF range capture most of the leasing activity in this submarket, while the bulk distribution assets in the submarket are lagging. The Southwest is currently the most active industrial submarket in the Twin Cities. In addition to Amazon s Shakopee plans, several of the projects that were under construction during the last half of 2014 have been completed; including Ryan Companies 135,000 square foot, $12.0M innovation center for Bayer CropScience in Shakopee. Bayer has been a tenant in the Shakopee area since 2000 and considered other places to build the center, but ultimately chose to stay in the area due to its skilled workforce, and because is a convenient transportation hub for the company s expanding international market. Also in Shakopee, Kin Properties has found a tenant for the former K-Mart distribution center, which it acquired vacant in 2013 and renovated to add cross docking capabilities. Polaris Industries announced they will lease about 850,000 square feet of the 1.1 million square foot facility, consolidating operations and moving employees from existing distribution centers in. Polaris Industries is leasing 850,000 square feet at the 1.1 million square foot Canterbury Distribution Center in Shakopee. Planned construction projects in the submarket are highlighted by Opus announcement that they plan to construct a 216,000 square foot (expandable to 362,000 SF) office and warehouse build-to-suit for AmerisourceBergen. Construction of the new facility is expected to start later this summer, and will take 18 to 24 months to complete. The project is planned for an undeveloped 20-acre parcel in the Valley Business Center in Shakopee. If approved, the new facility will be next to the Emerson Process Management factory that opened last year in the former ADC Telecommunications Inc. building. Ryan Companies developed a 135,000 square foot innovation center in Shakopee for Bayer CropScience. Opus is planning to construct a 216,000 square foot office and warehouse facility for AmerisourceBergin at Valley Business Center.

4 MARKET REPORT AUGUST 2015 INDUSTRIAL MINNEAPOLIS-ST. PAUL WEST/NORTHWEST In Otsego, Blu Dot and Room & Board, both furniture retailers, began occupancy at distribution buildings at Duke s Gateway Distribution Center. This follows on the heels of Ruan Transportation Management Systems, which moved into a 300,000 square foot distribution facility there during the Fourth Quarter of Room & Board is leasing a 485,000 square foot building and Blu Dot is leasing 150,000 square feet. Both projects feature 24 or 32 ceiling heights and 45 x 50 column spacing, as well as state-of-the-art building mechanical and fire/safety systems. The vacancy rate in the West/west submarket as of Quarter Two of 2015 is 8.9 percent, up from 8.5 percent in Quarter One. Absorption totaled 258,379 square feet, bringing the year-to-date total to 325,746. In spite of positive absorption, the vacancy rate increased due to over 400,000 square feet of new vacant space delivered to the market. Vacancy is highest among Bulk Warehouse properties where the vacancy rate is 13.5 percent. In fact, of the more than four million square feet of vacant industrial space in the market, 45 percent of it is concentrated in the West/west submarket. When the 1.3 million square feet of space under construction is considered, the amount of available industrial space in the northwest is very significant (see map). There is expected to be strong competition among landlords for any large users looking in the market and increasing concessions are expected. AVAILABLE BULK SPACE IN NORTHWEST OVER 125,000 SF AND PLANNED BTS DEVELOPMENTS BULK SPACE IN THE NORTHWEST SUBMARKET OF MORE THAN 125,000 SF MinnesotaAVAILABLE Industrial Market Otsego 169 Ramsey 65 1 INTERSTATE 94 St. Michael Ham Andover Launch Rogers DC 14xxx Highway 1 - Rogers Building Size: 168,000 SF Space Available: 143,000 SF Diamond Industrial II Diamond Road South - Rogers Building Size: 259,000 SF Space Available: 258,787 SF Rogers Industrial Star Distribution Center Wilfred Lane - Rogers Building Size: 335,400 SF Space Available: 335,400 SF Brockton Lane - Rogers Building Size: 271,000 SF Space Available: 271,0 SF Dayton 47 Kinghorn Logistics Hub Rogers Brockton Lane - Rogers Building Size: 221,000 SF Space Available: 221,000 SF 66 Acres Site Coon Rapids Champlin Blaine Dayton Distribution Center I 1 Holly Lane - Dayton Building Size: 247,000 SF Space Available: 247,000 SF Business Center XIII 169 9th Avenue & Highway Brooklyn 227 Acres Clear Height: INTERSTATE rd Avenue - Brooklyn Building Size: 200,000 SF Space Available: 150,000 SF Clear Height: 24 6 Red Rock Business Corcoran 6 Commerce Center 94 Maple Grove th Avenue - Maple Grove Building Size: 319,000 SF Space Available: 164,000 SF Osseo Setzler way - Brooklyn Building Size: 120,000 SF Space Available: 120,000 SF Clear Height: Zachary 8775 Zachary Lane - Maple Grove Building Size: 192,000 SF Space Available: 140,000 SF Clear Height: Setzler way Brooklyn 7300 land Drive 7300 land Drive - Brooklyn 94 SF Building Size: 185,500 Space Available: 185,500 SF Clear Height: 24 Spring Mounds View BC 85th Avenue & Wyoming - Brooklyn Building Size: 150,000 SF Space Available: 150,000 SF Clear Height: 24 INTERSTATE 65 Winnetka Corporate Center 71 Winnetka Avenue - Brooklyn Building Size: 233,682 SF Space Available: 233,682 SF Clear Height: New Brighton INTERSTATE Brooklyn Center 55 INTERSTATE 494 ern Stacks 4800 East Eiver Road - Fridley 122 Acre Site Clear Height: INTERSTATE 694 Existing Plymouth Medina Under Construction Build to Suit New Hope Crystal 0 47 Columbia Heights Robbinsdale 65 St. Anthony

5 MINNEAPOLIS NORTH The vacancy rate in the submarket is 7.1 percent, up from 6.7 percent in Quarter One. There was 1,449 square feet of absorption. Meritex completed a 130,000 square foot speculative distribution building in Roseville, which come on to the market 0 percent vacant. Smith Medical moved out of 169,502 square feet at Arden Hills to move to 6000 Nathan Lane in Plymouth in the West/ west submarket. Roberts Manage Group is under construction on two office warehouse buildings totaling 93,300 square feet in Arden Hills. These properties are scheduled to be completed during the Fourth Quarter of 2015 and will have clear heights. ST. PAUL EAST The vacancy rate in the East submarket is 7.0 percent, up slightly from Quarter One s rate of 6.9 percent. There was negative absorption of 19,874 square feet. 3M is building a $150 million research facility at its corporate campus in Maplewood. This state-of-the-art facility is a significant investment locally and will be completed by the end of The project will total 400,000 square feet and be dedicated to technology research. Also under construction is Bridgepoint Business Center III in South St. Paul. Interstate Partners is constructing the 7,498 square foot flex property on a speculative basis. Hoyt Properties is the managing investor of a group that purchased River Road Business Center I and II in Fridley for $6.3 million. The properties total 149,915 square feet and were approximately 60 percent leased at the time of the sale. Hoyt plans to invest to upgrade the properties and increase occupancy. Interstate Partners is constructing a 7,498 square foot flex property at Bridgepoint Business Center in South. Highcrest Distribution Center in Roseville totaled 130,000 square feet and was completed on a speculative basis.

6 Ramsey 94 Andover Ham 97 Albertville St. Michael Hanover Greenfield Maple Plain Minnetrista Mound Spring Rogers 55 Medina Orono Shorewood Excelsior Victoria Otsego Independence Corcoran Loretto Tonka Bay 12 Elk River West/west Wayzata Minnetonka Deephaven Greenwood 5 Chaska Chanhassen Maple Grove Plymouth Dayton Southwest INDUSTRIAL UNDER CONSTRUCTION Eden Prairie Champlin 6 Osseo 694 Hopkins Anoka New Hope Edina Crystal Golden Valley St. Louis Brooklyn 0 Bloomington Brooklyn Center Coon Rapids Robbinsdale 35W 94 Richfield Spring Fridley 65 Blaine Mounds View New Brighton Columbia Heights Saint Anthony 55 Airport/ South of the River Circle Pines Lexington Shoreview Arden Hills Lauderdale 35E Roseville 94 Eagan Columbus Lino s Vadnais Heights West Mendota Heights 35W Centerville Oaks Little Canada 35E Maplewood South Inver Grove Heights Gem Grant White Bear Willernie Stillwater 694 Pine Springs 36 Woodbury Forest Hugo Dellwood Elmo Oakdale 94 East Afton Cottage Grove Scandia 5 61 OVERALL MARKET 2,165,598 SF UNDER CONSTRUCTION 735,598 SF SPECULATIVE 1,430,000 BUILD-TO-SUIT MINNEAPOLIS NORTH 93,000 SF 2 PROJECTS WEST/NORTHWEST 1,341,800 SF 7 PROJECTS SOUTHWEST 135,000 SF 1 PROJECTS ST. PAUL EAST 507,498 SF 2 PROJECTS AIRPORT/SOUTH OF THE RIVER 88,000 SF 1 PROJECTS Shakopee Apple 3 Valley 35E 77 Rosemount INDUSTRIAL UNDER CONSTRUCTION PROPERTY NAME ADDRESS/INTERSECTION CITY SUBMARKET SF DEVELOPER Uponor Expansion 150th St W & Johnny Cake Ridge Rd Apple Valley Airport/South of the River 88,000 Uponor Red Fox Business Center Bldg I 1235 Red Fox Road Arden Hills 50,000 Red Fox Business Center Bldg I 1235 Red Fox Road Arden Hills 43,300 Roberts Management Group Roberts Management Group Bayer CropScience Highway 169 & Cnty Rd 83 Shakopee Southwest 135,000 Ryan Companies 3M Research Facility McKnight Rd & Conway Ave Maplewood East 400,000 3M - Kraus Anderson Bridgepoint Business Center III 201 Armour Avenue South East 7,498 Interstate Partners Fedex Distribution Center Brockton Ln N Rogers West/west 350,000 Scannell Properties Kinghorn Logistics Hub David Koch Ave & Brockton Lane Rogers West/west 221,000 Scannell Properties Cross Business Highway 6 & Highway 169 Brooklyn West/west 182,000 United Properties Wurth Adams Facility Highway 6 & Highway 169 Brooklyn West/west 170,000 United Properties Launch Rogers dale Blvd Rogers West/west 168,000 Launch Properties 169 Business Center 85th Ave & Wyoming Ave Brooklyn West/west 145,800 Opus/Founders Properties Capstone Business Center 9325 Winnetka Ave N Brooklyn West/west 5,000 Capstone Quadrangle Launch Rogers State Hwy 1 & 147th Ave N Rogers West/west 168,000 Launch Properties Launch Rogers State Hwy 1 & 147th Ave N Rogers West/west 30,000 Launch Properties

7 SIGNIFICANT LEASE AND SALES ACTIVITY LEASE ACTIVITY TENANT BUILDING NAME ADDRESS CITY SUBMARKET SF LEASED Polaris Canterbury Distribution Center 901 Canterbury Rd Shakopee Southwest 870,128 New Amazon.com 5825 E 11th Ave 5825 E 11th Ave Shakopee Southwest 162,000 Expansion The Bernard Group Southwest Corporate Center Dr E Chanhassen Southwest 156,333 Expansion Koch Logistics MSP Midway Industrial # Prior Ave N Saint Paul East 77,063 New Best Warehousing and Transportation Inc MSP Midway Industrial #9 807 Hampden Ave Saint Paul East 68,051 New CHS Inc Southeast Tech Center 3020 Denmark Ave Eagan Airport/South of the River TYPE 58,645 Expansion Scholastic Book Fairs 6 Commerce Center 9301 N Louisiana Ave Brooklyn West/west 48,449 New Streamworks LLC Saint Paul Industrial Properties # Dunlap St N Arden Hills 41,600 New Braun Interec Hampshire Technology Center 900 Hampshire Ave S Bloomington Southwest 37,951 Expansion Streamworks LLC Saint Paul Industrial Properties # Dunlap St N Arden Hills 31,600 New Allegiance Fitness Mounds View Business -Building J Woodale Dr Mounds View 31,370 New TC Moulding Inc Maplewood Business Center I Hwy 36 E Maplewood 29,705 New Bailiwick Inc Prairieview II 9901 W 74th St Eden Prairie Southwest 28,750 New Rhino Technology Group West St Paul School District Edenvale Crossing Business Center II Anagram Dr Eden Prairie Southwest 27,919 New Lafayette Business Center 1970 Christensen Ave West Saint Paul East 27,000 New DL Die-Cutting Williston Business Center Williston Rd Minnetonka Southwest 25,005 Renewal Output Technology Boone Ave Business Center II 7150 Boone Ave Brooklyn West/west 22,975 Expansion Industrial Custom Products Saint Paul Industrial Properties 23/ Terrace Dr Roseville East 20,340 New Fluke Thermography Plymouth Business Center V 3550 N Annapolis Ln Plymouth West/west 20,086 New Elliott Contracting Corporation Osborne Commerce Center II 1 Osborne Rd Fridley 19,568 New Nortech Systems Meridian Business Center 7550 Meridian Cir Maple Grove West/west 19,154 New CSP Delivery Osborne Commerce Center I Osborne Rd Fridley 18,812 New Koch Logistics leased 77,063 square feet and Best Warehousing and Transportation Inc. leased 68,051 square feet at MSP Midway Industrial in Saint Paul.

8 SALES ACTIVITY BUILDING ADDRESS CITY BUYER SELLER SUBMARKET SF PRICE th Ave NE th Ave NE Sara Investment Hillcrest Development 1620 Taylor St NE 1620 Taylor St NE Sara Investment Hillcrest Development 1361 Tyler St NE 1361 Tyler St NE Sara Investment Hillcrest Development 1515 Central Ave NE 1515 Central Ave NE Sara Investment Hillcrest Development 8800 Queen Ave S 8800 Queen Ave S Bloomington Lone Star Funds Southtech Plaza 9555 James Ave S Bloomington Southtech Ridge LLC Equity Commonwealth PRICE PSF DATE 13,050 $740,000 $57 Jun-15 40,968 $3,165,000 $77 Jun ,064 $16,295,000 $90 Jun-15 0,000 $5,400,000 $54 Jun-15 Southwest 172,887 $20,098,991 $116 Jun-15 Belgarde Enterprises Southwest 230,099 $19,200,000 $83 Apr Nathan Lane 35 Nathan Ln N Plymouth CPA :18 Geneva Organization West/west 208,900 $17,000,000 $81 May-15 Sportech th Ave NW Elk River Sportech Tyler St NW Elk River Sportech th St Elk River Five Star Commerce Center Five Star Commerce Center I th Ave N Hemlock Ln N Osseo Osseo th Ave S th Ave S AM Castle 30 82nd Ln NE Saint Paul 2160 Mustang Drive 2160 Mustang Dr Saint Paul Egan Co River Road Business Center I & II Dupont Ave S DataBank SE MSP Business Blvd N 5301 E River Rd Fridley Dupont Ave S 3255 Neil Armstrong Blvd Broadstone Real Estate Broadstone Real Estate Broadstone Real Estate Interstate Partners Interstate Partners Shamrock Development Camelot Metals Inc Saia Motor Freight Line LLC Envision Co LLC Envision Co LLC Envision Co LLC 92,830 $6,412,440 $69 Apr-15 50,079 Apr-15 56,000 $3,338,600 $60 Apr-15 Lone Star Funds West/west 163,012 $6,490,596 $40 May-15 Lone Star Funds West/west 47,150 $2,579,395 $55 May-15 Ameriprise A.M. Castle & Co. 121,783 $8,300,000 $68 May-15 65,888 $7,700,000 $117 Apr-15 Coldwell Banker East 65,258 $7,300,000 $112 Jun-15 Champlin Egan Co WP Carey (REIT) West/west 182,168 $7,000,000 $38 May-15 Burnsville Eagan 9000 th Ave N 9000 th Ave N Hoyt Properties OBO Forum Equities LLC JV MLG Private Equity Biynah Industrial Partners Carter Validus Mission Critical REIT Luther Automotive Group Cornerstone RE Advisers The O'meara Family Liberty Property Trust Airport/South of the River Airport/South of the River 139,645 $6,314,000 $45 May ,807 $6,200,000 $35 Jul ,346 $5,800,000 $33 Jul-15 Guy St Marie West/west 88,675 $5,800,000 $65 May-15 Sierra Corporation W 47th St Hopkins AIC Ventures Sierra Corporation West/west 1,057 $5,000,000 $45 May Hamburg Ave 1801 Old Hwy 8 NW 6875 Shady Oak Road Hamburg Ave 1801 Old Hwy 8 NW 6875 Shady Oak Rd ville New Brighton Lisa Capp Biynah Industrial Partners 2745 W Service Rd 2745 Service Rd W Eagan LS Capital Amerilab Technologies Norman Oberto of Imperial Plastics Inc Edwin J & Diana S Taylor Airport/South of the River 65,717 $4,500,000 $68 Jul ,900 $4,450,000 $37 May-15 Eden Prairie EdgeConneX Ocwen Financial Southwest 34,5 $3,862,500 $113 Jun-15 Provident Real Estate Ventures Airport/South of the River 2,616 $3,720,881 $18 Jul Niagara Ln N Plymouth Fred Wehling Bruce Paddock West/west 121,120 $3,300,000 $27 Apr-15 Data Source Building 5051 Hwy 7 Buhl Investors Roar Lund Southwest 52,650 $3,288,000 $62 Apr Vicksburg Ln N 9651 Newton Avenue South 2800 Vicksburg Ln N 9651 Newton Ave S Plymouth Southtech Ridge LLC Newton Properties LLC State Farm Life Insurance Co Kensington Investments I LLC West/west 150,294 $3,254,435 $22 Apr-15 72,000 $3,086,000 $43 Jun-15

9 Market Statistics SUBMARKET TOTAL SF DIRECT VACANT SF % VACANT DIRECT SUBLEASE VACANT SF % VACANT W/SUBLEASE LOW-HIGH ASKING RATE Q ABSORPTION YTD ABSORPTION AIRPORT/SOUTH OF THE RIVER Bulk Warehouse 5,365, , % 8, % $4.13-$8.68 (6,819) (5,344) Office Showroom 3,450, , % 33, % $4.84-$ ,159 67,148 Office Warehouse 9,229, , % 15, % $4.62-$9.11 6,133 62,900 Totals: 18,045,950 1,545, % 57, % $4.64-$9. 75, ,704 MINNEAPOLIS NORTH Bulk Warehouse 5,260, , %, % $4.25-$8.88 2,645 45,946 Office Showroom 4,345, , % 31, % $4.91-$ ,612 65,229 Office Warehouse 17,342,137 1,088, % 14, % $4.69-$ ,525 Totals: 26,947,891 1,906, % 56, % $4.72-$9.05 1, ,700 SOUTHWEST Bulk Warehouse 6,184, , % 25,1 14.7% $4.55-$9.15 5, ,132 Office Showroom 7,158, , % 82, % $4.95-$9.66 7, ,915 Office Warehouse 14,844,837 1,142, % 225, % $4.61-$9.04 (1,901) 58,218 Totals: 28,187,498 2,817,376.0% 332, % $4.74-$ , ,265 ST. PAUL EAST Bulk Warehouse 9,041, , % 30, % $4.19-$8.75 (189,158) (130,803) Office Showroom 2,480, ,5 7.8% 6, % $4.64-$.02 76, ,379 Office Warehouse 12,294, , % 60, % $5.02-$ , ,821 Totals: 23,816,029 1,661, % 97, % $4.80-$9.36 (19,874) 166,397 WEST/NORTHWEST Bulk Warehouse 13,974,531 1,891, % 50, % $4.50-$8.74 (54,728) (7,491) Office Showroom 5,654, , % 8,966.0% $4.93-$9.54 6,469 (26,061) Office Warehouse 21,777,400 1,246, % 83, % $4.67-$ , ,298 Totals: 41,406,522 3,695, % 142, % $4.70-$ , ,746 TOTAL ALL MARKETS Bulk Warehouse 39,826,225 4,182,152.5% 124,470.8% $4.40-$8.79 (142,416) 0,440 Office Showroom 23,089,398 2,402,844.4% 163, % $4.90-$ ,5 391,6 Office Warehouse 75,488,267 5,041, % 399, % $4.70-$ , ,762 Totals: 138,403,890 11,626, % 686, % $4.72-$9. 626,624 1,238,812 The above table is summarized data on multi-tenant industrial buildings greater than 20,000 square feet. Not included are single-tenant or owner-occupied buildings.

10 Market Statistics (EXPANDED MARKET) SUBMARKET TOTAL SF DIRECT VACANT SF % VACANT DIRECT SUBLEASE VACANT SF % VACANT W/SUBLEASE LOW-HIGH ASKING RATE Q ABSORPTION YTD ABSORPTION AIRPORT/SOUTH OF THE RIVER Bulk Warehouse 17,113, , % 54, % $5.08-$ ,453 (18,813) Office Showroom 4,679, , % 33, % $4.78-$ ,159 67,148 Office Warehouse,870, , % 15, % $5.06-$9.27 8,372 65,389 Totals: 32,662,369 1,958, % 4, % $4.99-$ , ,724 MINNEAPOLIS NORTH Bulk Warehouse 20,434, , % 21, % $5.48-$ ,896 84,937 Office Showroom 6,119, , % 31, % $5.43-$ ,829 82,046 Office Warehouse 19,636,495 1,088, % 14, % $4.68-$ ,525 Totals: 46,190,903 2,214, % 67, % $5.03-$ , ,508 SOUTHWEST Bulk Warehouse 23,621,742 2,750, % 350, % $4.35-$ , ,000 Office Showroom 8,677, , % 82,341.75% $4.96-$9.67 3, ,888 Office Warehouse 17,985,035 1,530, % 225, % $4.61-$8.94 (366,301) (301,542) Totals: 50,284,556 5,132,6.21% 657, % $4.69-$9.03 (139,424) 151,346 ST. PAUL EAST Bulk Warehouse 19,429, , % 30, % $4.27-$8.39 (207,267) (167,927) Office Showroom 4,026,5 221, % 6, % $6.74-$.90 75, ,234 Office Warehouse 20,571, , % 60, % $4.94-$ , ,396 Totals: 44,027,158 1,885, % 97, % $5.09-$9.25 (39,128) 113,703 WEST/NORTHWEST Bulk Warehouse 38,745,614 2,570, % 371, % $4.82-$ , ,817 Office Showroom 8,002, , % 8, % $4.93-$9.54 4,409 (39,827) Office Warehouse 25,914,876 1,490, % 125, % $4.88-$ ,6 352,922 Totals: 72,663,371 4,644, % 505, % $4.87-$8.70 1,172,919 1,307,912 TOTAL ALL MARKETS Bulk Warehouse 119,344,143 7,597, % 827, % $4.40-$ ,636 1,200,014 Office Showroom 31,506,229 2,544, % 163, % $4.90-$ , ,489 Office Warehouse 94,977,985 5,693, % 441, % $4.70-$ , ,690 Totals: 245,828,357 15,835, % 1,432, % $4.72-$9. 1,275,268 1,958,193 The above table is summarized data on multi- and single-tenant industrial buildings greater than,000 square feet. Owner-occupied properties are also included.

11 For further information please contact: William M. Wardwell SIOR Executive Vice President, Brokerage - DIR FAX bill.wardwell@colliers.com MINNEAPOLIS-ST. PAUL 4350 Baker Road Suite 400 Minnetonka, MN

12 502 offices in 67 countries US $2.3 billion in annual revenue 16,300 professionals and staff 1.7 billion* square feet under management $97 billion USD in total transaction value * Square footage includes office, industrial and retail property under management. Residential property is excluded from this total. All statistics are for Baker Road, Suite 400 Minnetonka, MN DIRECT Accelerating success.