Metropolitan Chicago. NAI Hiffman Industrial Market Report First Quarter Committed to Chicago. Connected to the World.

Transcription

1 Metropolitan Chicago NAI Hiffman Industrial Market Report First Quarter 21 Committed to Chicago. Connected to the World.

2 To our valued clients... On April 1, 21, NAI Hiffman celebrated our 1 year anniversary and a couple of major achievements: being named as NAI Global s Company of the Year and being listed as the Largest Property Management Firm in Chicago by Crain s Chicago Business. Our plan over the past decade has never been about becoming the biggest. Our goal has been to continuously perform with passion and excellence in order to gain the trust of our current and future clients. Yet, here we are, 1 years strong and thrilled to have the long term business relationships that put us at the top of the game in Chicago, now leasing and managing over 53 million square feet of third-party assets. For that honor, we thank our exceptional clients, partners and real estate community who continue to entrust their assets to our care. Representing the Partners of our company, I cannot express how proud we are of the NAI Hiffman team. Our supporting staff, property management team, and transaction and investment brokers are truly exceptional and dedicated to providing the best commercial real estate services and solutions available. This first quarter 21 market report is indicative of that dedication and I hope you find it informative and useful in your business activities. We update this data quarterly and would be pleased to provide this information to you at anytime upon request. As always, we appreciate your support and look forward to working with you in 21 and beyond. We remain truly grateful for your business. Warm Regards, David A. Petersen, RPA COO NAI Hiffman CEO, NAI Hiffman Asset Management

3 Metropolitan Chicago NAI Hiffman Industrial Market Report First Quarter 21 Table of Contents Local Economy Industrial Market Statistics Industrial Market Summary Industrial Submarket Overviews Lake County Southeast Wisconsin I-9/Northwest Northwest Cook North Cook Fox Valley Central DuPage O Hare West Cook I-88 Corridor I-55 Corridor South Cook I-8/Joliet Corridor NAI Hiffman understands that our success is the direct result of creating successful outcomes for our clients. We build lasting relationships with our clients and partners, engaging our individual initiative joined with collaboration and teamwork. Our unrelenting commitment to excellence and integrity forms the foundation of our guiding principles and shapes our strategies. Submarket Map Methodology / Definitions NAI Hiffman / NAI Global Committed to Chicago. Connected to the World. Build on the power of our network. NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 3

4 Local Economy POPULATION (28 EST.) 9,84,475 POPULATION CHANGE (2-28 EST.) +7.8% NUMBER OF HOUSEHOLDS (28) 3,516,729 MEDIAN HOUSEHOLD INCOME (28 EST.) $67,234 GROSS METRO PRODUCT (28) $521 BILLION LABOR FORCE 4,843,699 TOTAL JOBS GAINED (2/9-2/1) -137,5 CHICAGO AREA UNEMPLOYMENT RATE 11.3% ILLINOIS UNEMPLOYMENT RATE 11.4% U.S. UNEMPLOMENT RATE 9.7% Local and National Unemployment 2 Case-Shiller Home Price Indices 1987 Chicago Case-Shiller Index U.S. National Case-Shiller Index Source: Standard & Poor s Metro Chicago Illinois U.S Source: Bureau of Labor Statistics Year Treasury Note Source: Commodity Systems, Inc. (CSI) % 1% 8% 6% 4% 2% 5 1-Year Treasury Note Local Economy Review Chicago, the third largest metropolitan area in the U.S. after New York and Los Angeles, is the most influential economic region between the East and West Coasts. Situated at the geographical heart of the nation, Chicago s locational advantages have fostered its development into an international center for banking, securities, high technology, air transportation, business services, wholesale and retail trade, and manufacturing. In addition, Chicago is one of the principal trading centers for commodities, financial, and derivative futures products. Quarter in Review The recovery is undoubtedly underway following one of the most significant recessions since the Great Depression. Sometime around June of 29 (the National Bureau of Economic Research hasn t picked a date yet) the recession reached its bottom, and we turned onto the long road to recovery. Real GDP went positive during the third quarter of 29 and improved to 5.6% growth during the fourth quarter. The economically dismal year of 29 finished with an annual growth rate of -2.4% compared to 28, the first year of negative growth in 18 years. Nationally, job losses have slowed considerably from the heart of the recession, when more than 5, jobs were lost monthly. For the first time since late 27, notable job growth was witnessed in March, when nonfarm employment increased by 162, jobs. Similarly, the number of unemployment claims has begun to decrease again. An obvious signal of corporate health, after-tax corporate profits have risen 15% this quarter since they bottomed out during the fourth quarter of 29. Industrial production has increased, single-family and multi-family housing starts have turned around, and new manufacturing orders and vendor deliveries are up as well, all suggesting the doom and gloom of the past two years has started to fade.

5 Looking Forward It can be a long, winding road to recovery and the pace at which the economy recovers remains uncertain. Nearly 9 million jobs were lost nationwide during the recent recession, and considering job growth typically lags the evolution of the general economy by about 18 months, there is a long way to go. Some of the jobs lost in relatively healthy industries, including healthcare and pharmaceutical drugs, will come back quickly, but jobs lost in the severely-wounded housing and auto industries will take longer. In a typical year, the number of jobs increases by about 1.8 million jobs. Assuming we eventually replace the jobs lost during the recession and experience a higher-than-normal job Consumer Price Indices (CPI) 6% 4% 2% % -2% -4% 2 CPI 12-Month Percent Change Core CPI 12-Month Percent Change (excludes volatile food and energy prices) Source: Bureau of Labor Statistics Crude Oil Prices 5% 3% Crude Oil Price Monthly Percent Change $15 $12 Local Economy Review Real Estate Investment Trust (REIT) Index 1% 8% 12-Month Percent Change in Dow Jones REIT Index 1% -1% $9 $6 6% -3% $3 4% 2% -5% $ % -2% Source: WTRG Economics -4% -6% 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 U.S. Gross Domestic Product 6% $16 T Source: Down Jones growth rate of around 2.5 to 3 million jobs per year (2, to 25, jobs per month), it will still take between 3 and 3.6 years to reach the same number of jobs that existed nationally before the downturn began. With a growing population and labor force, this still will leave us with a higher unemployment rate than before the recession. With average job growth, this job replacement process will take even longer. 3% % -3% -6% Adjusted GDP Growth (based on 25 dollar) (%) GDP Value (Trillions of $) Source: Bureau of Economic Analysis $14 T $12 T $1 T $8 T The path the recovery eventually follows is also largely dependent on the public s perception of the economic situation and the government s involvement in the process. If the widespread sense of fear and panic that has been prevalent since fall of 28 is replaced with a sense of optimism and success, the recovery will be far more robust. Historically, this has been the case and the U.S. economy has rebounded in ways unimaginable at the time. Fears of a double-dip recession are fading as more signs of a recovery take hold. Only time will tell the shape the recovery takes and where our economy ends up. U.S. Imports & Exports - Trade Balance Jan 7 U.S. Imports U.S. Exports Apr 7 Jul 7 Oct 7 Source: U.S. Census Bureau January 21 Trade Deficit -$37.3 B Jan 8 Apr 8 Jul 8 Oct 8 Jan 9 Apr 9 Jul 9 Trade Deficit Oct 9 Jan 1 $25 B $2 B $15 B $1 B NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 5

6 Geneva Beloit 1 2 Westosha Airport Wisconsin Industrial Submarket Overviews Illinois Pleasant Prairie Lake County Southeast Wisconsin I-9/Northwest Northwest Cook kford 5 Rockford North Cook Fox Valley Central DuPage O Hare West Cook I-88 Corridor Crystal Lake Lake Forest Lake Zurich Highland Park Buffalo Grove Northbrook Chicago Executive Airport 3 I-55 Corridor Arlington Heights 4 9 Elgin Schaumburg Des Plaines Evanston Niles Elk Grove Village Int'lOhare Airport Skokie Wood Dale8 I-8/Joliet Corridor DeKalb alb helle 94 Vernon Hills South Cook Waukegan Grayslake C y Cherry Valleyy 7 11 Waukegan Regional Airport 7 Addison 29 Dupage Airport 6 St Charles Carol Stream West Chicago North Aurora 1 9 Elmhurst Chicago 55 La Grange Downers Grove Burr Bedford Ridge Woodridge Park Willow Springs 88 Naperville Aurora Franklin Park Montgomery Bolingbrook Chicago Midway Airport 294 Romeoville 12 Plainfield Palos Heights 94 Gary/Chicago Airpo Hammond Tinley Park Monee Elwood Schererville Park Forest Minooka La Salle 8 94 Matteson New Lenox Indiana Joliet Munster 8 Illinois Mokena M

7 Industrial Market Statistics NAI Hiffman Industrial Market Report First Quarter 21 Industrial Market Statistics Submarket # Bldgs. Total RBA Vacant Vacancy 1Q1 NET New Supply Under Constr. (SF) (SF) Rate (%) Absorption (SF) (SF) (SF) Chicago North 1,134 66,684,451 5,61, % -8,336 Chicago South 1, ,287,289 15,666, % -211,675 91, North Cook ,76,58 3,655, % -413,79 West Cook 742 6,428,35 7,96, % 79,925 Southwest Cook 49 39,226,488 3,727, % -278,789 South Cook 1,125 85,391,116 1,382, % 256,417 23,4 651,78 I-57/Will Corridor 8 12,351,467 2,696, % -352,332 Lake County 93 66,75,778 7,25, % 187,416 15, Northwest Cook ,662,27 3,71, % 144,991 O Hare 1,73 1,884,88 12,698, % -762,898 Central DuPage 1,98 67,28,163 6,84, % 6,544 I-55 Corridor 655 8,357,318 11,52, % -155,698 53, McHenry County ,5262,283 3,37, % -62,735 42, I-9/Northwest 43 25,62,633 3,3, % -181,958 Fox Valley ,89,494 3,839, % -94,767 I-88 Corridor ,834,957 8,276, % 482,723 I-8/Joliet Corridor ,48,397 1,99, % 411,923 38,4 DeKalb County 57 6,97, ,52 4.2% I-39 Corridor ,53,891 4,463, % -134,58 Southeast Wisconsin ,614,814 5,725, % 53,473 5, 1,58, Northwest Indiana ,72,37 3,646,15 1.2% 579,265 Flex Space Summary Total Flex Space 1,529 72,373,894 9,753, % -47,714 3, Total Market Summary 16,468 1,198,44,59 143,627,1 12.% -492, ,8 2,597,78 The data compiled in the Chicago Industrial Market Report is the legal property of NAI Hiffman. Reproduction or dissemination of the information contained herein is strictly prohibited without the expressed written consent of NAI Hiffman. This report contains information, including information available to the public, which has been relied upon by NAI Hiffman on the assumption that it is accurate and complete without independent verification by NAI Hiffman. NAI Hiffman accepts no responsibility if this should prove to be inaccurate or incomplete. No warranty or representation, express or implied, is made by NAI Hiffman as to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, and changes in market conditions. NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 7

8 Metropolitan Chicago NAI Hiffman Industrial Market Report First Quarter 21 # INDUSTRIAL BUILDINGS 16,468 MARKET SIZE (SF) 1,198,44,59 VACANCY 143,627,1 SF (12.%) 1Q1 NET ABSORPTION -492,362 NEW SUPPLY (SF) 561,8 UNDER CONSTRUCTION (SF) 2,597,78 12,, 8,, 4,, -4,, -8,, -12,, 1Q7 2Q7 3Q7 4Q7 1Q8 Vacancy Rate (%) Historical Deliveries 3 MM 25 MM 2 MM 15 MM 1 MM 5 MM 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Total Sale Transactions and Price PSF * total through 1Q1 $1,,+ Transactions 2 Total Sales Total Sales (Annualized) Average Price PSF 21 * total through 1Q * 1Q1 Total Deliveries (SF) Average (SF) 12% 1% 8% 6% 4% 2% % Source: CoStar 21* Source: CoStar $6. $5. $4. $3. $2. Market Summary Chicago is the second largest industrial market in the U.S. with over 1.15 billion SF of inventory. The Chicago industrial market remains the most influential in the Midwest, due to its growing prominence as an inland port and its diverse, comparatively low-cost labor force. It has the second largest workforce in the country and is the largest manufacturing market. Chicago s strategic location and transportation infrastructure make it the most important transportation center in the country. Located in the path of three of the nation s busiest transcontinental expressways (I-8, I-9 and I-94), Chicago also claims 7 percent of the nation s rail and intermodal activity. The metropolitan area sits at the convergence of all six class-one railways and within a day s drive of one-third of the country s population. Quarter in Review Following the pattern in place since the beginning of the economic recession in December 27, industrial vacancy continued to rise during the first quarter of the new decade, reaching 12% at the end of March. In that two year period, overall vacancy among industrial facilities throughout the Chicago Metropolitan Area climbed more than 2 basis points from less than 1%. Net absorption, a measure of demand in the market, was negative for the seventh consecutive quarter, though not as severely negative as during the heart of the recession. Net absorption totaled negative 492,362 SF for the quarter, compared to more than 8 million SF of negative net absorption witnessed during the first quarter of last year. Following a boom period between 2 and 28, new industrial development dropped off precipitously during 29. Development will remain minimal for several quarters to come until the nearly 3, jobs lost in the Chicago-Joliet-Naperville area since the start of the recession begin to be replaced, and sustained demand returns. While leasing activity has been on the rise for the past few quarters, Pictured Above: 23 White Oak Circle in Aurora, where Peerless Industries, Inc. consolidated their two Melrose Park campuses into 37,813 SF, representing the largest new lease of the year

9 Industrial Market Trends Vacancy Rate Net Absorption Asking Rents Suburban Submarkets by Size I-8/Joliet Corridor I-88 Corridor West Cook 62,48,397 SF 61,834,957 SF 6,538,35 SF Industrial Market Summary North Cook 46,76,58 SF Southeast Wisconsin 43,114,814 SF many of the new leases that have been signed are lateral moves or companies relocating to smaller spaces. Companies will continue to take advantage of the competitive rental rates and leasing incentives being offered by area landlords, but the increased activity won t have an appreciable effect on vacancy and absorption until many of the jobs lost over the past two years are replaced, and above normal job growth is realized. O Hare South Cook I-55 Corridor Central DuPage Lake County 11,22,28 SF 85,367,716 SF 8,357,318 SF 67,28,163 SF 66,75,778 SF Southwest Cook Northwest Indiana Fox Valley Northwest Cook McHenry County I-9/Northwest I-39 Corridor I-57/Will Corridor DeKalb County 39,226,488 SF 35,72,37 SF 32,89,494 SF 28,662,27 SF 25,52,283 SF 25,62,633 SF 24,53,891 SF 12,351,467 SF 6,97,869 SF After climbing for several years consecutively through 27, industrial sales volume experienced a precipitous 74 percent decline in 28 and 29, and a correlating drop in average sale price per square foot. Sales activity will likely remain limited through 21, but hopefully begin to increase towards the end of the year as lending becomes more active and the economy improves. Capitalization Rate and Properties Sold Cap Rate (%) # of Properties Sold 12% 11% 1% 9% 8% 7% Looking Forward Positive signals that the market is slowly turning the corner are on the rise. The industrial capacity index is now rising from recent low historical levels. Industrial production, retail sales and port activity has increased during recent months as well, all contributing factors to an expanding industrial real estate sector Total Industrial Base 1.3 Billion 1.2 Billion 1.1 Billion Total Industrial Base (SF) % The Chicago region is projected to add 2.5 million people over the next 4 years, approximately 6, people per decade. Regardless of the current economic situation, over time the regional economy and population will continue to grow and, subsequently, drive real estate development. 1. Billion.9 Billion.8 Billion.7 Billion Significant New Industrial Lease Transactions 1st Qtr. 21 Property Address Submarket City Leased (SF) Tenant Comments 23 White Oak Cir. I-88 Corridor Aurora 37,813 Peerless Industries, Inc. New lease 265 Marquette Dr. I-55 Corridor Bolingbrook 228,178 Dynamic Warehouse Sublease from Dal-Tile 2171 Mark Collins Dr. South Cook Sauk Village 22,237 BEHR Paints New lease CenterPoint Intermodal Center-Joliet I-8/Joliet Corridor Joliet 217,712 Stepan Company Build-to-suit lease 115 W. 115th St. I-55 Corridor Bolingbrook 183,5 OHL New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 9

10 Lake County POPULATION 712,453 (est.) 2 28 POPULATION CHANGE +1.6% (est.) # INDUSTRIAL BUILDINGS 93 MARKET SIZE (SF) 66,75,778 VACANCY 7,25,642 SF (1.8%) 1Q1 NET ABSORPTION 187,416 YTD NET ABSORPTION 187,416 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 15, chenry Fox Lake Wisconsin Illinois 45 Grayslake Gurnee Waukegan Regional Airport 12 Zion Waukegan North Chicago Submarket Trends Vacancy Rate Net Absorption Asking Rents ake Lake Zurich 12 Libertyville Mundelein 6 Vernon Hills Buffalo Grove 176 Lake Forest 41 Highland Park Plti 294 4, 2, -2, -4, -6, -8, 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Inventory By City Vacancy Rate (%) Net Absorption (SF) 12% 1% 8% 6% 4% 2% % 7% 7% Waukegan Libertyville 33% 9% Gurnee 1% Buffalo Grove Lake Zurich 11% 23% North Chicago Other Lake County Suburbs Under Construction & Recent Deliveries 1,, 8, 6, 4, 2, Deliveries (SF) Under Construction (SF) 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Lake County Overview The Lake County industrial submarket is notable for its roster of corporate headquarters and heavy concentration of owner occupied real estate, all located within close proximity to the I-94 Tri-State Tollway. Entrepreneurial owners and corporate managers residing along the lakefront and northwest Lake County make this area attractive for investment. Corporate neighbors including Abbott, Baxter, Caremark, Takeda, Walgreens and WMS join privately held companies such as CDW, Medline and ULINE to form a vibrant base of employment. Lake County s relatively low property tax rates attract companies from Cook County, although infrastructure demands have begun to slightly even the playing field. After two years of climbing vacancy rates and five consecutive quarters of negative demand in the Lake County submarket, conditions improved slightly during the first quarter of the new year. Climbing to more than 11% by the end of 29 from 7.3% during the fourth quarter of 27, the overall vacancy rate dropped a bit between January and March to 1.8%. Increased demand and fewer new vacancies coming to the market resulted in positive net absorption for the first time since the middle of 28, totaling 187,416 SF for the quarter. Increased demand and fewer new vacancies resulted in positive net absorption for the fi rst time since the middle of 28. Pictured Above: 61 Corporate Woods Parkway, where coffee roaster manufacturer Probat, Inc. leased 47,8 SF during the first quarter

11 Construction New construction is at a standstill throughout the submarket until demand picks up again. The few ongoing projects include building additions underway for MNJ Direct in Buffalo Grove, Echo in Lake Zurich and ZF North America in Vernon Hills. Transaction Activity Several notable industrial lease transactions occurred in Lake County during the first quarter. Coffee-roasting machine manufacturer Probat Inc. signed a 1-year lease for the entire 47,8 SF warehouse located at 61 Corporate Woods Parkway in Vernon Hills. Available Space Profile 1. MM 2.4 MM 1.1 MM 2.1 MM 2.3 MM , 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ # of Buildings Lake County Overview Similarly, sound control system manufacturer Noise Barriers LLC leased the full 46,612 SF building at 21 W. Kelley Court in Libertyville , 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Distribution and integrated supply chain solution provider Brightstar expanded into an additional 45, SF at Technology Way in the Libertyvlle Business Park, where it has leased space since 24. Looking Forward Vacancy rates should remain elevated in Lake County until job growth and demand return in earnest, resulting in a sustained period of absorption. The worst is apparently over, but the time frame of the eventual recovery is still uncertain. Competitive rental rates and leasing incentives should only help this situation, as tenants look to take advantage of today s market. Lake County Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller Skokie Valley Rd. Highland Park 35, $2,653, $76. Semersky-Enterprises, Inc. Forest Management Co. Inc W. Concrete Dr. Ingleside 14,35 $95, $ Lake Ct LLC Private Trust 7 Armstrong Dr. Buffalo Grove 11,25 $825, $73. Buffalo Grove Martial Arts Rude Enterprises Lake County Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 61 Corporate Woods Pky. Vernon Hills 47,8 Probat, Inc. New lease 21 W. Kelley Ct. Libertyville 46,612 Noise Barriers, LLC New lease Technology Way Libertyville 45, Brightstar Lease expansion 333 W. Washington Blvd. Mundelein 32,783 Fortune Plastics Lease renewal High St. Mundelein 19,959 Pharmalogistics Lease renewal 196 Swanson Ct. Gurnee 19, Ludlow & Associates New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 11

12 Southeast Wisconsin POPULATION 251,319 (est.) 2 28 POPULATION CHANGE +5.6% (est.) # INDUSTRIAL BUILDINGS 521 Burlington 142 Racine Sturtevant MARKET SIZE (SF) 43,614,814 VACANCY 5,725,467 SF (13.1%) 1Q1 NET ABSORPTION 53,473 YTD NET ABSORPTION 53,473 NEW SUPPLY (SF) 5, UNDER CONSTRUCTION (SF) 1,58, 83 Westosha Airport 5 45 Wisconsin Illinois Kenosha Regional Airport Pleasant Prairie Kenosha 32 Zi Submarket Trends Vacancy Rate Net Absorption Asking Rents 1,5, 1,, 5, -5, -1,, Inventory By City 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Vacancy Rate (%) Net Absorption (SF) 15% 12% 9% 6% 3% % Southeast Wisconsin Overview The primary advantages of the Southeast Wisconsin submarket are the availability of affordable land for big box development as well as lower utility costs, property taxes and workers compensation when compared to submarkets in Illinois. The Lakeview Corporate Park in Pleasant Prairie, Wisconsin accounts for the lion s share of our statistical tracking in the Southeast Wisconsin industrial submarket. This 1,5-acre business park boasts 25 million SF of industrial space and is home to an international roster of companies including S.C. Johnson, IRIS, Yamaha and Jelly Belly. 16% 18% 7% 23% 36% Racine Pleasant Prairie Sturtevant Kenosha Burlington Bucking the trend, the lower costs associated with doing business in Southeast Wisconsin has led to increased transaction velocity and three consecutive quarters of declining vacancy rates while many other submarkets have witnessed skyrocketing vacancies and little in the way of demand. The overall vacancy rate dipped to 13.1% in March, Under Construction & Recent Deliveries 3,, Deliveries (SF) 2,5, Under Construction (SF) down from its peak of 14.2% mid-29. The submarket experienced positive absorption to the tune of more than 5, SF, largely affected by the completion of Gordon Food s new 587, SF build-to-suit 2,, facility in Kenosha and C&H Distributors moving into the 316,81 SF 1,5, 1,, space they leased last quarter. 5,, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 Bucking the trend, Southeast Wisconsin has witnessed three consecutive quarters of declining vacancy rates and solid demand. Pictured Above: 151 8th Ave. in Kenosha, where pharmaceutical and medication delivery company Hospira, Inc. renewed their lease for 32,5 SF this quarter

13 Construction The most significant ongoing construction project in Southeast Wisconsin continues to be packaging supply company ULINE s new headquarters facility at the intersection of I-94 and Highway 65 in Pleasant Prairie. The distribution center, to be completed this year, will be around 1 million SF in size, with the additional new construction of a 2, SF office headquarters facility. Transaction Activity EMCO Chemical Distributors acquired the 259,58 SF LakeView Corporate Park East building located at th St. in Pleasant Prarie. Hexion Specialty Chemicals sold the facility that sits on 29.2 acres for around $4.3 million. Venture One Real Estate LLC has purchased a 59,558 SF building on 1.88 acres at 499 7th Avenue near the Kenosha Region Airport. The building is fully leased to compressed air engineering company Pneumatech. Available Space Profile MM.6 MM.3 MM 1.9 MM 1, 19, MM 2, 49,999 5, 99,999 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ 1, 199,999 # of Buildings 2,+ Southeast Wisconsin Overview Looking Forward Lower taxes, utility costs, rental rates and land values found in Southeast Wisconsin will continue to draw companies from south of the border looking to escape the high costs of doing business in Lake County and Chicago. Much of the industrial inventory in the submarket is modern, with high clear heights and excellent loading specifications being commonplace, compared to the second generation competition to the south. The large number of high cube big-box properties will continue to make Southeast Wisconsin attractive to large distributors. Southeast Wisconsin Sale Transactions 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller th St. Pleasant Prairie 259,58 $4,3, $17. EMCO Chemical Distributors Hexion Specialty Chemicals 499 7th Ave. Kenosha 59,588 $Undisclosed $Undisclosed Venture One Real Estate LLC PT Enterprises Southeast Wisconsin Lease Transactions 21 Property Address City Leased (SF) Tenant Comments 151 8th Ave. Kenosha 32,5 Hospira, Inc. Lease renewal th St. Pleasant Prairie 252,825 Honeywell International, Inc. Lease renewal st St. Racine 3,86 Gabe s Construction Co. Inc. New lease 1251 Mound Ave. Racine 3,723 Majestic New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 13

14 I-9/Northwest POPULATION 28,728 (est.) 2 28 POPULATION CHANGE % (est.) # INDUSTRIAL BUILDINGS 43 MARKET SIZE (SF) 25,62,633 VACANCY 2,852,535 SF (11.7%) 1Q1 NET ABSORPTION -181,958 YTD NET ABSORPTION -181,958 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Hampshire Carpentersville East Dundee Elgin Submarket Trends 31 Vacancy Rate Net Absorption Asking Rents South Elgin 4, 2, -2, -4, Inventory By City 9% 1,2, 1,, 8, 6, 4, 2, 1Q7 2Q7 3% 5% 7% 1Q7 3Q7 4Q7 1Q8 Vacancy Rate (%) 2Q7 76% 3Q7 4Q7 2Q8 1Q8 3Q8 2Q8 4Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Elgin Carpentersville South Elgin East Dundee 3Q8 4Q8 1Q9 2Q9 3Q9 1Q1 Dundee, Genoa, Marengo, Hampshire, etc. Under Construction & Recent Deliveries Deliveries (SF) 4Q9 12% 9% 6% 3% % Under Construction (SF) 1Q1 I-9/Northwest Overview The I-9/Northwest industrial submarket is attractive to companies looking for excellent interstate access, relatively low taxes, potential incentives and a strong labor pool. Most of the industrial inventory base in the submarket is located within minutes of a 4-way intersection with I-9. This serves to make the I-9/Northwest submarket a good distribution point for companies that are serving the I-9/upper-midwest supply chain. Relatively low taxes are a benefit throughout the submarket, and TIF incentives are available in some areas. Additionally, the Elgin area provides an abundant, educated labor pool. Population along and near the Fox River has increased dramatically over the past decade. Overall vacancy increased during the first quarter to 11.7% from 11.% at the end of 29. Rates have held between 1% and 12% vacant for the past two years as the economic recession unfolded and the commercial real estate industry responded. Net absorption totaled negative 181,958 SF for the quarter, a sign that demand remains limited and new vacancies continue to come online. Smaller spaces, between 1, and 5, SF, account for the majority (about 76%) of all available spaces in the market. Vacancy has held between 1% and 12% for the past two years as the economic recession unfolded and real estate responded. Pictured Above: 2545 Millennium Drive in Elgin, where NAI Hiffman assisted Intercorp in leasing 19,662 SF during the first quarter

15 Construction New development is at a standstill throughout the submarket and will likely remain limited until the recession is far behind us and demand returns in earnest. Several proposed projects remain in the pipeline and should begin construction when the market improves and developers begin to see the absorption of vacant space. I-9/Northwest Sublease Vacancy Rate Available Space Profile.4 MM 1. MM.5 MM.8 MM.9 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-9/Northwest Overview 1.% Sublease Vacancy (%) 5 # of Buildings 4.5% % 1, 19,999 2, 49,999 5, 99,999 2,+ Transaction Activity Screw and fastener manufacturer Intercorp signed a lease for nearly 2, SF during the first quarter, reducing their operating expenses by moving to the submarket from the O Hare area. Wholesale auto wheels distributor Prestige Autotech Corporation leased 23,86 SF at 1925 Holmes Drive in Elgin. 1, 199,999 Looking Forward The I-9/Northwest submarket will remain an attractive location for businesses due to the lower tax base, strong labor pool and interstate access. Tenants will continue to find leasing opportunities such as incentives and aggressive rates. I-9/Northwest Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 86 Commerce Dr. South Elgin 1, $725, $73. McBride Burt Property Investments LLC Hakansson Industries, Inc. I-9/Northwest Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 1925 Holmes Rd. Elgin 23,86 Prestige Autotech Corporation New lease 2545 Millennium Dr. Elgin 19,662 Intercorp New lease N. State St. Elgin 6,852 LenTeq Lease renewal Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 15

16 Northwest Cook POPULATION 514,784 (est.) 2 28 POPULATION CHANGE -.1% (est.) # INDUSTRIAL BUILDINGS 526 MARKET SIZE (SF) 28,662,27 VACANCY 3,71,687 SF (12.9%) 1Q1 NET ABSORPTION 144,991 YTD NET ABSORPTION 144,991 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Submarket Trends Vacancy Rate Net Absorption Asking Rents East Dundee gin gin 2 19 Bartlett Streamwood Hoffman Estates Lake Zurich Barrington Palatine Arlington Heights Elk Grove Village Chicago Executive Airport Schaumburg Des Plaines Bloomingdale Wood Dale Buffalo Grove Mt. Prospect Ohare Int'l Airport F kli 75, 5, 25, -25, -5, -75, 1Q7 2Q7 Inventory By City 7% 7% 1% 14% 5, 4, 3, 2, 15% 3Q7 4Q7 1Q8 Vacancy Rate (%) 28% 19% 2Q8 3Q8 4Q8 1Q8 2Q9 3Q9 4Q9 Net Absorption (SF) Schaumburg Northlake Mt. Prospect Palatine Barrington Streamwood 1Q1 Bartlett, Hoffman Estates, Roling Meadows, etc. Under Construction & Recent Deliveries Deliveries (SF) 15% 12% 9% 6% 3% % Under Construction (SF) Northwest Cook Overview The Northwest Cook submarket is a desirable business location for entrepreneurial owners and corporate managers who reside in the area s suburban communities. The submarket is conveniently located close to Chicago s O Hare International Airport and has excellent access to Chicago and the western suburbs using I-9, I-29 and Route 53. The user base generally consists of specialized manufacturing and service companies. Many international companies, particularly Asian and European, have located their North American headquarters here due to the proximity to the airport. Few distribution facilities exist relative to neighboring submarkets. Many users come from the comparatively cramped O Hare submarket looking for more space or a location closer to their residences, but don t want to move all the way west to Elgin or beyond. While high Cook County taxes may be prohibitive to some users, landlords continue to offer lower net rents to attract tenants. Overall vacancy in the submarket has declined for two consecutive quarters, and finished March at 12.9%, nearly a full percentage point lower than two quarters ago, but still higher than the 12.3% vacant reported a year ago, and 9.6% vacant at the beginning of the 28. Increased demand and transactional activity helped push net 1, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 A recovery in the market is dependent upon steady job growth and increased industrial production pushing demand. Pictured Above: The sprawling 527,661 SF, 28-acre Claire s Stores, Inc. headquarters and distribution facility, acquired by Angelo, Gordon & Co. during the first quarter and leased back to Claire s for 2 years

17 absorption positive for the quarter, totaling 144,991 SF between January and March. Construction Largely a developed infill market, the majority of construction projects are building additions, but these have been few and far between due to the current economic situation. Available Space Profile.5 MM 1.5 MM 1. MM 1. MM 1.4 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Northwest Cook Overview Transaction Activity Owning the building since 1996, jewelry and accessories company Claire s Stores, Inc. completed a 2-year sale leaseback with an annual rent valued at $2.1 million per year at its headquarters facility in Hoffman Estates. New York investment firm Angelo Gordon & Co. purchased the 527,661 SF property located on 28 acres for a little over $18 million # of Buildings Shorewood Properties, LLC acquired a 4, SF warehouse building located at 2324 Palmer Drive in Schaumburg. Though the building was vacant prior to the investment sale, a 1-year lease was signed with machining and parts company Amada Wasino America, Inc. as part of the transaction. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Vacancy rates will remain elevated throughout the submarket as the economy rebounds. When steady job growth is realized and as industrial production continues to build, companies will reevaluate their real estate needs and in some cases decide to expand. This expansion and increased industrial production will provide the demand needed to fuel a market recovery. Northwest Cook Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 24 W. Central Rd. Hoffman Estates 527,661 $18,55, $34. Angelo, Gordon & Co. Claire s Stores, Inc Palmer Dr. Schaumburg 4, $1,49, $37. Shorewood Properties, LLC TekservePOS Northwest Cook Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 14 Algonquin Rd. Mt. Prospect 8,739 Happ Controls New lease 2324 Palmer Dr. Schaumburg 4, Amada Wasino America, Inc. New lease 365 Industrial Ave. Rolling Meadows 3,127 Olsen Brothers, Inc. Lease renewal 2246 N. Palmer Dr. Schaumburg 17,15 Cost Management, Inc. New lease 1261 Wiley Rd. Schaumburg 6, Nobu Nutritional Bakery New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 17

18 North Cook POPULATION 416,471 (est.) 2 28 POPULATION CHANGE +2.3% (est.) # INDUSTRIAL BUILDINGS 717 Grove MARKET SIZE (SF) 46,76,58 VACANCY 3,655,173 SF (7.8%) 1Q1 NET ABSORPTION -413,79 YTD NET ABSORPTION -413,79 Wheeling 21 ago Executive Airport Northbrook Glencoe NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) n s Morton Grove 94 Evanston Submarket Trends Vacancy Rate Net Absorption Asking Rents e Des Plaines Ohare Int'l Airport 14 Niles Park Ridge 9 41 Skokie Lincolnwood Chicago 5, 25, -25, -5, 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Inventory By City Vacancy Rate (%) 8% 13% 28% 14% 2% 17% 4Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Wheeling Niles Skokie Northbrook Morton Grove 1Q1 8% 6% 4% 2% % Evanston, Glenview, Lincolnwood, Northfield, etc. North Cook Overview Desirable for users seeking quick access to Chicago, major area expressways and Chicago s northern suburbs, the North Cook Submarket is also attractive to long-term Chicago-based users looking to stay close to the city, while escaping Chicago congestion. The area has the advantage of an inventory of buildings with better specifications than many of the antiquated buildings found in the city of Chicago. It tends to be a primarily user/buyer market, with limited leasing opportunities. The user base generally consists of service providers and light manufacturers who tend to remain in their locations for extended periods of time, resulting in limited transaction velocity in the submarket. The inventory base is mostly comprised of 196s 197s-era buildings with lower ceilings and low parking ratios. Higher taxes may be a deterrent for some users, while others are willing to pay the price for the location. Historically a stable submarket due to the prevalence of long-term owner/user buildings, vacancy jumped nearly a full percentage point to 7.8% during the first quarter. Several ill-timed vacancies, including Owens & Minor leaving 64,156 SF at 31 Holbrook Drive in Wheeling, combined to push up vacancy rates and absorption negative. Historically stable, overall vacancy jumped nearly a full percentage point during the fi rst quarter. Pictured Above: W. Oakton Street in Morton Grove, purchased by Lakeshore Waste Services in a distressed sale during the first quarter

19 Construction The North Cook submarket has experienced very little new development in recent years due to its status as a mature market. North Cook Sublease Vacancy Rate 1.% Sublease Vacancy (%) Available Space Profile.7 MM 1.7 MM.8 MM.9 MM 1.1 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ North Cook Overview.5% 1 # of Buildings 8.% Transaction Activity Garbage company Lakeshore Waste Services purchased a 11, SF property located at W. Oakton Street in Morton Grove as part of a distressed sale for $2,2,. The 3,5 SF building located at Greenwood Street in Evanston sold in February for $1,48,. Valued at a lower price, the seller s equipment was included in the sale, raising the sale price. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Although the submarket experiences lower vacancy levels than neighboring submarkets, six consecutive quarters of negative absorption and soft demand have narrowed that gap. Vacancy rates should remain elevated throughout 21. North Cook Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller W. Oakton St. Morton Grove 11, $2,2, $2. Lakeshore Waste Services Not listed Greenwood St. Evanston 3,5 $1,48, $34. Adas/Spatz Properties Milos Orlic North Cook Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 71 Central Park Ave. Lincolnwood 72,874 Goggin Warehousing New lease Abbott Dr. Wheeling 23,184 International Toner Corporation New lease 6245 W. Howard St. Niles 21,988 Nightengale-Conant Lease renewal 728 Anthony Trail Northbrook 8, AMIC Global, Inc. New lease 6 Northgate Parkway Wheeling 3, MedWell RX New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 19

20 Fox Valley POPULATION 115,79 (est.) 2 28 POPULATION CHANGE +37.3% (est.) # INDUSTRIAL BUILDINGS 495 Elgin MARKET SIZE (SF) 32,89,494 VACANCY 3,839,215 SF (12.%) South Elgin Streamwoo 1Q1 NET ABSORPTION -94,767 YTD NET ABSORPTION -94,767 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Dupage 59 Airport St Charles 64 Geneva West Chicago Ca Submarket Trends Batavia 38 Vacancy Rate Net Absorption Asking Rents Sugar 3 Grove North Aurora Aurora 88 Naperville 4, 2, -2, -4, -6, -8, 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Inventory By City Vacancy Rate (%) Net Absorption (SF) 11% 35% West Chicago 25% St. Charles Batavia Geneva 28% Under Construction & Recent Deliveries 12% 1% 8% 6% 4% 2% % 5, Deliveries (SF) 4, Under Construction (SF) Fox Valley Overview The Fox Valley submarket lies between the I-9/Northwest submarket to the north and the I-88 Corridor submarket to the south and has limited access to major expressways. It is primarily an owner/user market with leasing opportunities in the small to mid-size range. The user base generally consists of manufacturing companies that serve the area within close proximity to users homes. Much of the inventory is composed of mid-198s buildings in contrast to the modern bigbox distribution warehouses of neighboring submarkets. Many users choose to be in the Fox Valley submarket due to need and remain in the submarket long-term, resulting in limited transaction velocity. Overall vacancy reached 12% in March, and has been on the rise for the past year, up from 9.9% vacant last March. Net absorption was negative for the quarter, totaling negative 94,767 SF. This figure was most affected by new vacant spaces being listed on the market and limited demand to offset them. The majority, more than 77%, of available spaces in the market are less than 5, SF in size. 3, 2, 1, 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 Negative absorption resulted from new vacant spaces being listed on the market and limited demand to offset their effects. Pictured Above: 84 Equity Drive in St. Charles, build on speculation in 28, purchased by Shars Tool Company during the first quarter

21 Construction Due to the relatively large amount of vacant space on the market, negative absorption trends and limited access to the area, new development projects have been nonexistent. As the market begins to turn around and vacant space is gradually absorbed, construction activity will eventually pick up in and around communities west of the Fox River, as few industrial-zoned land sites remain near the river. Available Space Profile.5 MM 1.4 MM.8 MM 1.1 MM 1.3 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Fox Valley Overview Fox Valley Sublease Vacancy Rate Sublease Vacancy (%) 2% # of Buildings 3 1% 2 1 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ % Transaction Activity Tool distributor and supplier Shars Tool Company purchased a 22,78 SF speculative building located at 84 Equity Drive in St. Charles. The company will use the space and its 2,378 SF office space for the distribution and warehouse of its products. Looking Forward Vacancy rates should remain high throughout 21, as transaction velocity is typically low in the Fox Valley submarket. Eventually, increased demand should reverse recent trends of rising vacancy and negative absorption in the submarket. Fox Valley Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 2725 Norton Creek Dr. West Chicago 24, $1,87, $78. Polaris Laser Laminations Triad Real Estate Corporation 84 Equity Dr. St. Charles 22,78 $1,825, $8. Shars Tool Company Paul Hemmer Companies 41 Industrial Dr. West Chicago 17,172 $975, $57. Buck Services Incorporated Garry Dedick Fox Valley Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 3825 Ohio Ave. St. Charles 146, System Sensor Lease renewal 7 Kingsland Dr. Batavia 28, Green Tee Lawn Care, Inc. New lease Pierson Dr. Batavia 9,12 Frontline Communications Inc. New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 21

22 Central DuPage POPULATION 393,294 (est.) 2 28 POPULATION CHANGE +1.% (est.) # INDUSTRIAL BUILDINGS 1,98 Schaumburg MARKET SIZE (SF) 67,28,163 VACANCY 6,84,562 SF (1.2%) 1Q1 NET ABSORPTION 6,544 YTD NET ABSORPTION 6,544 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 2 19 Bloomingdale Glendale Heights Addison Elk Grove Village Ohare Int'l Airport 294 Submarket Trends est Chicago 64 Carol Stream 355 Elmhurst 83 Vacancy Rate Net Absorption Asking Rents Glen Ellyn Lombard 88 W 1,2, 8, 4, -4, -8, Inventory By City 1% 9% 18% 1Q7 2Q7 7% 3Q7 4Q7 1Q8 Vacancy Rate (%) 27% 29% 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Addison Carol Stream Glendale Heights Elmhurst Hanover Park 1Q1 12% 9% 6% 3% % Bloomingdale, Lombard, Roselle, Vill Park, Wheaton Central DuPage Overview The well-positioned Central DuPage industrial submarket benefits from advantages including relatively low taxes, newer building inventory and an educated workforce. The recent completion of the I-355 extension, Chicago s newest expressway, has improved access to the area and spurred interest in the mature market. Users in the Central DuPage submarket vary by type and are not limited to primarily distribution like other nearby submarkets. Despite less leasing activity during the first quarter compared to the final quarter of 29, the overall vacancy rate dipped a bit and net absorption was slightly positive this quarter, due in large part to tenants occupying spaces leased during previous quarters. Overall vacancy was 1.2% in March, similar to a year ago, but nearly 15 basis point higher than in March of 28. Under Construction & Recent Deliveries 6, Deliveries (SF) 5, Under Construction (SF) 4, 3, Construction New development will be limited as very little land remains for new speculative construciton in the submarket. Construction projects are limited to building renovations and expansions. 2, 1, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 As demand picks up, continued positive absorption is expected in the Central DuPage submarket over coming quarters. Pictured Above: 235 Tubeway Drive in Carol Stream, an investment acquisition by AAG Management, Inc. during the first quarter for $6,575,355, or $43 PSF

23 Transaction Activity Real estate investment firm AAG Management, Inc. acquired a 153,7 SF building on 13.9 acres of land from Cardinal Capital Partners this February, paying $43 PSF for the investment property which is fully leased to TW Metals. An owner/user sale, torque calibration equipment manufacturer Sturtevant Richmont purchased 555 Kimberly Drive in Carol Stream, a 35,644 SF building for $2,325, or $65 PSF. Available Space Profile 1. MM 1.1 MM 3.2 MM 1.7 MM 1.7 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Central DuPage Overview The most significant leasing activity involved lease renewals, as packaging, erosion and foam supply manufacturer American Excelsior Company renewed their lease for 44,726 SF during the first quarter. Similarly, Swedish door lock manufacturer Assa Abloy A.B. renewed their lease for 44,647 SF at 235 Lies Road in Carol Stream # of Buildings Looking Forward Despite vacancy concerns and a difficult real estate market during the past two years, the Central DuPage submarket will be one of the first segments of the Chicago industrial real estate market to rebound as demand increases and transactional activity continues to pick up. An eventual recovery is inevitable, but the timing depends on the pace of job growth over the coming years, the level of consumer confidence and an increase of industrial production. The advantageous location of the Central DuPage submarket, combined with its variety of industrial product, ensure the submarket will be quick respond to improving economic conditions and industry expansion, and one of the first to recover. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Central DuPage Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 235 Tubeway Dr. Carol Stream 153,7 $6,575,355 $43. AAG Management, Inc. Cardinal Capital Partners, Inc. 555 Kimberly Dr. Carol Stream 35,644 $2,325, $65. Sturtevant Richmont Kirit Kamdar 32 Eisenhower Ln. N. Lombard 2, $1,565, $78. United States Brass & Copper Binder Realty Consultants Central DuPage Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments N. Dupage Ave. Lombard 44,726 American Excelsior Company Lease renewal 235 Lies Rd. Carol Stream 44,647 Assa Abloy A.B. Lease renewal 857 N. Larch Ave. Elmhurst 37,33 DAK Equipment & Engineering New lease 817 N. Church Rd. Elmhurst 27, AR Industries New lease Carol St. Carol Stream 19,7 Direct Route Services Lease renewal Oak creek Dr. Lombard 9,471 Stanley Security Solutions New lease -flex property Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 23

24 O Hare POPULATION 136,821 (est.) 2 28 POPULATION CHANGE -2.4% (est.) # INDUSTRIAL BUILDINGS 1,73 MARKET SIZE (SF) 1,884,88 VACANCY 12,698,374 SF (12.6%) 1Q1 NET ABSORPTION -762,898 mburg 72 Heights 9 Des Plaines Morto Grov N YTD NET ABSORPTION -762,898 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Itasca Elk Grove Village Ohare Int'l Airport Park Ridge Submarket Trends Vacancy Rate Net Absorption Asking Rents ngdale dale ghts Bensenville Addison Wood Dale Franklin Park Elmhurst Melrose 2,, 1,3, 6, -1, -8, -1,5, Inventory By City 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Vacancy Rate (%) Net Absorption (SF) 15% 12% 9% 6% 3% % O Hare Overview The O Hare submarket is unique due to its close proximity to O Hare International Airport and its central location at the crossroads of Chicago s expressway system. The O Hare submarket holds the most industrial inventory of all of the Chicagoland submarkets. Elk Grove Village alone is the nation s largest industrial park, boasting more than 4 million SF of industrial and flex space. Many of the buildings in the submarket are older and functionally obsolete. Redevelopment and construction has slowed dramatically. 1% 9% Elk Grove Village 11% Des Plaines 43% Bensenville Itasca 18% Wood Dale Rosemont 18% Under Construction & Recent Deliveries 8, Deliveries (SF) Under Construction (SF) 6, 4, Overall vacancy continued to rise through the first quarter of 21, reaching 12.6% at the end of the period. Net absorption totaled negative 762,898 SF, largely influenced by the introduction of significant new vacancies to the market, such as Expeditors International, Inc. vacating their space of more than 26, SF at Surpreme Drive in Bensenville. While transactional activity has picked up during recent quarters, it wasn t enough over the first quarter to offset these large vacancies. Negative absorption was also impacted by the demolition of a 137,4 SF distribution building previously located at 515 E. Touhy Avenue in Des Plaines. 2, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q9 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 Transactional activity has increased, but vacancy will remain high until demand picks up. Pictured Above: 131 Estes Avenue in Elk Grove Village, purchased by Greek cuisine manufacturer Grecian Delight, Inc. who will use the 123,316 SF building as a food processing center

25 Construction Development activity, so prevalent a few years ago, has come to standstill in the submarket. Many of the projects completed during recent years were speculative facilities, and they still sit vacant today due to limited demand and low rental rates. Available Space Profile 2. MM 5. MM 2.7 MM 1, 19,999 2, 49,999 5, 99,999 O Hare Overview O Hare Sublease Vacancy Rate Sublease Vacancy (%) 2% 3.5 MM 4.6 MM 1, 199,999 2,+ 25 # of Buildings 1% % Transaction Activity Freight forwarding and logistics company Kuehne & Nagel Inc. signed an 8-year lease for 152,25 SF in the ProLogis Park O Hare during the first quarter. The company is moving to the facility this spring, and had leased slightly less space elsewhere in Elk Grove Village, thus their move won t affect absorption much in the submarket. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Despite an increase in transactional activity and construction and redevelopment remaining minimal, vacancy will remain elevated in the O Hare submarket until demand picks up, industrial production increases, and consumer spending returns in earnest. O Hare Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 131 Estes Ave. Elk Grove Village 123,316 $4,599,5 $37. Grecian Delight, Inc. Ridge Property Trust 1397 W. Glenlake Ave. Itasca 21, $1,315,979 $63. Terrace Supply Co. Iron Mountain Information Management, Inc. 36 Bonnie Ln. Elk Grove Village 12,2 $844,5 $69. SSV Partners LLC Bonnie Lane Properties Corp. O Hare Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 11 Busse Rd. Elk Grove Village 152,25 Kuehne & Nagel New lease 11 Kirk St. Elk Grove Village 126,722 Quality Color Graphics, Inc. New lease Ardmore Ave. Itasca 116,88 4C Logistics Lease renewal 25 S. Mount Prospect Rd. Des Plaines 97,64 Flying Cargo Logistics Service, Inc. Lease renewal Ellis St. Bensenville 91, PODS New lease 155 W. Bryn Mawr Ave. Itasca 62,97 Cycle Logistics New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 25

26 West Cook POPULATION 241,764 (est.) 2 28 POPULATION CHANGE -5.4% (est.) # INDUSTRIAL BUILDINGS 742 MARKET SIZE (SF) 6,428,35 VACANCY 7,96,556 SF (11.7%) 1Q1 NET ABSORPTION 79,925 YTD NET ABSORPTION 79,925 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Submarket Trends Vacancy Rate Net Absorption Asking Rents k Grove Village Bensenville 29 Elmhurst Ohare Int'l Airport Franklin Park Melrose Park Bellwood Schiller Park Niles 43 Oak Park Skokie 9 94 Chicago 1,, 5, -5, -1,, -1,5, Inventory By City 1,2, 1,, 1Q7 2Q7 5% 8% 9% 12% 8, 6, 29% 3Q7 4Q7 1Q8 Vacancy Rate (%) 37% 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Franklin Park Melrose Park Bellwood Schiller Park Berkeley 1Q1 15% 12% 9% 6% 3% % Harwood Heights, Hillside, Maywood, Norridge, River Grove Under Construction & Recent Deliveries Deliveries (SF) Under Construction (SF) West Cook Overview The West Cook submarket draws companies from the city of Chicago looking for a more functional building and additional amenities compared to the aging, often obsolete inventory of properties in Chicago. Additionally, companies migrate to the area from the nearby O Hare submarket where interstate and airport access is similar, but rental rates tend to be higher. The West Cook submarket benefits from good access to the city of Chicago, close proximity to area interstates and rail providers and relatively low rental rates. It is primarily an owner/ user market, but leasing opportunities have increased as institutional and private owners have entered this market. Leasing activity was limited during the first quarter, but the overall vacancy rate in the West Cook submarket managed to fall slightly to 11.7% by March due to tenants who signed leases in past quarters occupying their new spaces during the quarter. Down a bit from 12% at the end of 29, vacancy still remains particularly high in the submarket, up nearly four percentage points from 7.84% reported two years ago. Net absorption for the first quarter was slightly positive, totaling 79,925 SF between January and March. 4, 2, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 The West Cook submarket s vacancy rate is up to 11.7%, nearly four percentage points above where it was two years ago. Pictured Above: 165 W. Lake Steet in Northlake, purchased by Go To Logistics during the first quarter, who will raze the building and build a new 1, SF facility

27 Construction CenterPoint Properties has announced plans to build a nearly 69, SF distribution center in Franklin Park located on a site owned and previously used by Central Grocers Inc. Work on the project is expected to begin this summer if a tenant is found and CenterPoint, currently under contract, purchases the property. Available Space Profile.5 MM 1.4 MM 3.1 MM 2.4 MM 3.1 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ West Cook Overview Transaction Activity Go To Logistics purchased a 13-acre site in Northlake formerly occupied by Olmarc Packaging Co. for $6 PSF during the first quarter. Less than two years ago, land values in the area were between $15 and $18 PSF. The logistics firm will raze the 231, SF building currently on the site and replace it with a 1, SF build-to-suit facility to suit their freight requirements # of Buildings Alcan Packaging Food Americas was purchased by a division of Bemis Company Inc. on March 1st, 21 for $1.2 billion. The 76,219 SF building located at 533 St. Charles Road in Bellwood was part of the purchase. DeNovo Properties, a company that acquires distressed and environmentally troubled properties to restore them, purchased Newell Rubbermaid, Inc. s former Bellwood facility during the first quarter. Newell hadn t used the site since 24, which was experiencing minor soil contamination. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Plagued by high vacancy, the West Cook and O Hare submarkets will continue to experience the same vacancy concerns until demand picks up and institutional owners respond to the market by leasing spaces in their buildings at a discount. West Cook Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 165 W. Lake St. Northlake 13 acres $3,75, $6. Go To Logistics 165 W. Lake Street LLC 533 St. Charles Rd. Bellwood 76,219 $2,21, $29. Bemis Company Inc. Alcan Packaging Food & Tobacco 265 Washington Blvd. Bellwood 6, $1,5, $25. DeNovo Properties Newell Rubbermaid, Inc. West Cook Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 379 N. 25th St. Schiller Park 7,57 Sodexo America New lease Pearl St. Schiller Park 3,912 MR Maintenance New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 27

28 3 59 I-88 Corridor POPULATION 556,685 (est.) 2 28 POPULATION CHANGE +21.% (est.) # INDUSTRIAL BUILDINGS 771 MARKET SIZE (SF) 61,834,957 VACANCY 8,276,423 SF (13.4%) 1Q1 NET ABSORPTION 482,723 YTD NET ABSORPTION 482,723 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) St Charles 29 Dupage Carol Stream Airport Elmhurst West Chicago 355 Batavia Oak Brook North Aurora Lisle Downers Naperville Grove Sugar Grove 53 Aurora 34 Woodridge Montgomery 55 3 Bolingbrook Submarket Trends Vacancy Rate Net Absorption Asking Rents 1,, 6, 2, -2, -6, -1,, Inventory By City 1Q1 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Vacancy Rate (%) Net Absorption (SF) 15% 12% 9% 6% 3% % I-88 Corridor Overview The I-88 Corridor industrial submarket has seen increased demand and speculative development during the past few years, due to the lack of land for development in feeder markets such as Central DuPage and West Cook. Developers were drawn to the large available land sites and easy access to major expressways that the I-88 submarket has to offer. This rapid pace of development has slowed over the past few quarters as obtaining project financing has become difficult, vacancy has increased and demand has been limited. 15% 17% 1,5, 1,25, 1,, 75, 5, 7% 18% 43% Deliveries (SF) Aurora Naperville Montgomery Downers Grove Oswego, Westmont, North Aurora, Hinsdale, Lisle, etc. Under Construction & Recent Deliveries Under Construction (SF) Vacancy improved during the first quarter, with the overall rate dropping to 13.4% from 14.2% vacant last quarter. Rates had climbed consistently for nearly two years from less than 9% in mid-28, to more than 14% in 29. Following five quarters of negative net absorption, positive absorption was reported for the first quarter of 21, totaling 482,723 SF. Significant transactional activity has been behind the positive number, with tenants leasing large spaces such as Peerless Industries short-term lease of 37,813 SF in Aurora. Construction New development is on hold in the submarket until market conditions 25, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 Absorption was positive during the fi rst quarter, a result of increased leasing activity. Pictured Above: A view of the truck docks at 23 White Oak Circle in Aurora, where NAI Hiffman assisted Peerless Industries, Inc. with leasing 37,813 SF during the first quarter

29 improve and steady absorption of some of the more than 8 million SF of vacant space is realized. Transaction Activity Several large lease renewals occurred during the period between January and March, including third-party logistics provider UTi Integrated Logistics renewing its lease for 593, SF and Midwest Warehouse renewing 35, SF, both in Aurora. However, these renewal deals will have no impact on absorption in the submarket. The most significant new lease involved Peerless Industries, Inc. deciding to consolidate their two Melrose Park campuses into a 37,613 SF facility at 23 White Oak Circle in Aurora. The audiovisual mounting solutions manufacturer plans to lease the facility for 12 months, then buy it in December, bringing nearly 5 jobs to the area. Available Space Profile.7 MM 1, 19, MM 3.7 MM 2, 49,999 5, 99, MM 1, 199,999 2,+ 2.4 MM 1 # of Buildings I-88 Corridor Overview In a distressed sale, PrimaVesta, LLC purchased the 85,68 SF facility located at 156 Frontenac Road in Naperville for $3,15,, or about $37 PSF. The property was paid for in cash at the time of closing. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Activity and interest in the I-88 Corridor submarket will continue as companies look to take advantage of the current market by addressing their real estate discussions that had been shelved over the last couple of years. Excellent expressway access, augmented by the recently opened Eola Road interchange at I-88, combined with a plethora of quality product will help the I-88 Corridor continue to attract tenants and rebound. I-88 Corridor Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 156 Frontenac Rd. Naperville 85,68 $3,15, $37. PrimaVesta, LLC Anchor Bolt & Screw Company 52 Thatcher Rd. Downers Grove 43,856 $3,83, $ Thatcher, LLC Private trust I-88 Corridor Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 8 Bilter Rd. Aurora 593, UTi Integrated Logistics Lease renewal 285 Duke Pky. Aurora 35, Midwest Warehouse Lease renewal 198 High Grove Ln. Naperville 332, DaimlerChrysler Lease renewal 23 White Oak Cir. Aurora 37,813 Peerless Industries, Inc. New lease 252 Diehl Rd. Aurora 13, Control Solutions New lease 3553 Butterfield Rd. Aurora 32,83 SCP Distribution New lease 88 N. Enterprise St. Aurora 22,1 ACM Technologies, Inc. New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 29

30 I-55 Corridor POPULATION 238,889 (est.) 2 28 POPULATION CHANGE +34.5% (est.) # INDUSTRIAL BUILDINGS 655 MARKET SIZE (SF) 8,357,318 VACANCY 11,52,771 SF (13.8%) 1Q1 NET ABSORPTION -155,698 YTD NET ABSORPTION -155,698 a Naperville 53 Downers Grove Woodridge Hinsdale Burr Ridge 294 Wi Spr NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 53, 59 Bolingbrook Submarket Trends 3 55 Romeoville Vacancy Rate Net Absorption Asking Rents Plainfield ,, 3,, 2,, 1,,, -1,, 4Q9 3Q9 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 Vacancy Rate (%) Net Absorption (SF) 1Q1 2% 16% 12% 8% 4% % I-55 Corridor Overview Of all of the Chicago area industrial submarkets, the I-55 Corridor submarket has seen the most activity and development interest over the past several years. As a result, the majority of the available land parcels have been developed or are controlled by developers, rendering the I-55 Corridor submarket an infill market with little additional land for significant new development. Inventory By City 1% 5% 5% 9% 34% 37% Bolingbrook Romeoville Woodridge Lemont Plainfield Burr Ridge, Forest View, Willowbrook Under Construction & Recent Deliveries 4,5, 3,75, 3,, 2,25, 1,5, 75, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 Deliveries (SF) Under Construction (SF) 1Q9 2Q9 3Q9 4Q9 1Q1 Bucking the trend of the general market, the I-55 Corridor has seen comparatively steady vacancy rates over the past several quarters, even a slight improvement in some cases. Overall vacancy was unchanged during the first quarter at 13.8%, roughly the same rate as a year ago, but up from the 11.6% reported during the same period in 28. The relative stability of the vacancy rate, despite both positive and negative net absorption over recent quarters, is due to the large overall size of the submarket at 8 million SF. Net absorption for the first quarter totaled negative 155,698 SF. Although several significant vacancies were added to the market and several large tenants absorbed space, the overall change was not particularly significant. Sublease vacancy remains elevated, accounting for 1.4% of total inventory. Benefi tting from a diverse industrial base, an educated labor pool, excellent access and competitive rates, the I-55 submarket will see consistent activity. Pictured Above: 115 W. 115th Street in Bolingbrook, where NAI Hiffman assisted landlord IDI with leasing 183,5 SF to OHL during the first quarter

31 Construction New construction in the submarket remains limited to expansions such as 53, SF being added to the partially completed building at 51 Woodcreek Drive in Bolingbrook. Transaction Activity A sign of the current market and economic climate, third-party Available Space Profile.5 MM 1. MM 1.5 MM 7.9 MM 3. MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-55 Corridor Overview logistics provider Dynamic Warehouse subleased 227,178 SF from Dal-Tile during the first quarter. Growing logistics solutions provider OHL leased 183,5 SF at 115 W. 115th Street in Bolingbrook to support the expansion of its business in the I # of Buildings submarket. The company will have the opportunity to expand 3 into a 269,59 SF space within the building. 2 CenterPoint Properties purchased a 5,157 SF office and warehouse distribution building at 71 Madison Street in Willowbrook this past February. The property, fully leased to Trane Company, sold for $4.3 million, or $86 PSF. Completed in 1998 as a build-to-suit for the heating and cooling company, Trane also renewed their lease this quarter. Hand sanitizer and surgical scrub distributor AVA, Inc. purchased the 2,385 SF property located at 751 S. Adams Street in Willowbrook to accommodate it growing business. 1 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward Benefitting from a diverse industrial base, an educated labor pool and excellent access via I-55 and I-355, the I-55 Corridor submarket will see consistent interest and activity through 21, and will be a leader when the real estate market starts to improve. I-55 Corridor Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 71 Madison St. Willowbrook 5,157 $4,3, $86. CenterPoint Properties Prime Group Realty Trust 751 S. Adams St. Willowbrook 2,385 $1,5, $74. AVA, Inc. 8- Real Estate, LLC I-55 Corridor Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 265 Marquette Dr. Bolingbrook 228,178 Dynamic Warehouse Sublease from Dal-Tile 115 W. 115th St. Bolingbrook 183,5 OHL New lease 1551 W. Normantown Rd. Romeoville 123,84 Comcast New lease 65 Territorial Dr. Bolingbrook 94,118 Jet Lithocolor, Inc. New lease 1165 Crossroads Pky. Romeoville 73,862 Exel Logistics Lease expansion 71 Madison St. Willowbrook 5,157 Trane Company Lease renewal 492 S. Central Ave. Forest View 2, Dakar Candles New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 31

32 South Cook POPULATION 698,541 (est.) 2 28 POPULATION CHANGE -2.% (est.) # INDUSTRIAL BUILDINGS 1,125 MARKET SIZE (SF) 85,391,116 VACANCY 1,382,628 SF (12.2%) 1Q1 NET ABSORPTION 256,417 YTD NET ABSORPTION 256,417 NEW SUPPLY (SF) 23,4 UNDER CONSTRUCTION (SF) 651,78 Submarket Trends Vacancy Rate Net Absorption Asking Rents Woodridge le Tinley Park Mokena Bedford Park Bridgeview Alsip Palos Heights Chicago Midway Airport 5 Matteson 57 Blue Island 1 1 Park Forest 83 South Holland Sauk Village Gary/Chi Hammond 8 94 Schererville Monee is n a 1,, 4, -2, -8, -1,4, -2,, Inventory By City 11% 14% 1Q7 2Q7 5% 8% 3Q7 26% 4Q7 1Q8 Vacancy Rate (%) 35% 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 Net Absorption (SF) 9% 6% 3% % Bedford Park Alsip Chicago Heights Bridgeview South Holland Other Southern Cook Communities Under Construction & Recent Deliveries 1,5, 1,2, 9, 4Q9 Deliveries (SF) 1Q1 15% 12% Under Construction (SF) South Cook Overview The South Cook submarket is one of the Chicago metropolitan area s largest in terms of geographic size, and total square footage. The area benefits from a good mix of manufacturing and distribution facilities due to an abundance of skilled, educated labor, and excellent access to several major expressways, train lines and public transportation. The submarket consists of primarily older product with scattered modern infill developments of around 2 million SF in Bedford Park and additional projects in Alsip and Sauk Village. Ownership is mixed, including institutional, owner/user and both national and local private owners. While its location close to Chicago is key, Cook County taxes can be a financial burden. The overall vacancy rate decreased slightly to 12.2% during the first quarter. Vacancy peaked a year ago at 13.6% and has remained elevated at slightly lower levels since. Net absorption for the period between January and March was positive, totaling 256,417 SF. Companies taking over occupancy of recently-leased large spaces pushed absorption positive for the quarter and will likely continue to do so as leasing activity remains elevated. 6, 3, 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 Companies occupying recently-leased large spaces pushed absorption positive for the quarter and will likely continue to do so. Pictured Above: 2171 Mark Collins Drive, part of the Sauk Village Distribution Center, where BEHR Paints leased 22,237 SF during the first quarter

33 Construction Delivering next quarter, construction continues on a new 137,78 SF industrial building to be located at th Avenue in Bridgeview. Other ongoing projects include building expansions, such as the doubling of 161 Lathrop Ave. in Harvey to about 1 million SF to accommodate tenants Allied Tube & Conduit Corp. and Tyco Electrical & Metal Products. Available Space Profile 1. MM 1.5 MM 5.2 MM 1.9 MM 2.7 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ South Cook Overview Transaction Activity Architectural paint, stain and varnish manufacturer BEHR leased more than 22, SF in the Sauk Village Distribution Center II during the first quarter to accommodate their expanding business. Brake products maker Power Stop, LLC leased 7,39 SF in the 233,282 SF facility located at 6112 W. 73rd Street in Bedford Park. Other significant leasing activity during the quarter was limited to lease renewals, including Plastipak Packaging, Inc. and Northstar Aerospace renewing their leases for nearly 25, SF each , 19,999 2, 49,999 5, 99,999 1, 199,999 # of Buildings 2,+ Records storage company GRM Information Management Services purchased a 296,147 SF building at 7123 W. 65th Street in Bedford Park for $8.15 million this past March. The company plans to fully occupy the building in addition to their 496, SF facility on the southwest side of Chicago. Looking Forward The coming year will likely bring more of the same for the South Cook submarket, including elevated vacancy levels, increasing transaction velocity, low net rental rates and leasing incentives. South Cook Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 7123 W. 65th St. Bedford Park 296,147 $8,15, $28. GRM Information Management Services MEPT/New Tower Trust Co Pulaski Rd. Alsip 37, $2,, $54. Arkema The Dow Chemical Company 1671 Chicago Ave. Lansing 26,235 $8, $3. Edan Land Management LLC Private trust South Cook Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 2171 Mark Collins Dr. Sauk Village 22,237 BEHR Paints New lease S. Laramie Ave. Alsip 24,586 Plastipak Packaging, Inc. Lease renewal 66 W. 73rd St. Bedford Park 24, Northstar Aerospace Lease renewal 6112 W. 73rd St. Bedford Park 7,39 Power Stop LLC New lease La Salle St. South Holland 53, Wilson Supply Lease renewal W. 123rd St. Alsip 47,32 Kranson Industries Inc. Lease renewal Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 33

34 59 I-8/Joliet Corridor POPULATION 426,928 (est.) 2 28 POPULATION CHANGE +38.9% (est.) # INDUSTRIAL BUILDINGS 614 MARKET SIZE (SF) 62,48,397 VACANCY 1,99,558 SF (17.5%) 1Q1 NET ABSORPTION 411,923 YTD NET ABSORPTION 411,923 NEW SUPPLY (SF) 38,4 UNDER CONSTRUCTION (SF) Submarket Trends Vacancy Rate Net Absorption Asking Rents le Ottawa Seneca 47 North Aurora 113 Aurora Plainfield Tinley Park 3 6 Shorewood Joliet Mokena 3 New Lenox 53 Minooka Channahon Elwood Downers 55 Grove Bolingbrook A Kankakee 2,, 1,5, 1,, 5,, -5, Inventory By City 6,, 5,, 4,, 3,, 2,, 1,, 1Q7 2Q7 5% 1% 3Q7 4Q7 1Q8 Vacancy Rate (%) 16% 44% 25% 1Q7 2Q7 3Q7 4Q7 2Q8 1Q8 3Q8 2Q8 4Q8 3Q8 1Q9 2Q9 3Q9 4Q9 Net Absorption (SF) Joliet Elwood Minooka Ottawa Under Construction & Recent Deliveries 4Q8 Deliveries (SF) 1Q9 2Q9 3Q9 1Q1 4Q9 1Q1 22% 19% 16% 13% 1% 7% Mokena, New Lenox, Shorewood, Frankfort, etc. Under Construction (SF) I-8/Joliet Corridor Overview The I-8/Joliet Corridor submarket has historically catered to multistate big box distribution. Its access to I-8 and I-55 position the corridor well for distribution operations. In addition, the nation s largest inland port is located in Elwood. This intermodal development, also known as CenterPoint Intermodal Center, has remained a bright spot not only in the corridor, but for the entire Chicago market. The reason for its continued success is the development s ability to offer tremendous transportation savings to importing operations as well as being a pre-approved Foreign Trade Zone. This intermodal development has fueled the region s growth, while the developments located outside of the intermodal campus are positioned to cater to heavy distribution prospects whose supply chains do not have intermodal traffic. Overall vacancy continued to slide through the first quarter, dropping to 17.5% at the end of March, down from 18.1% last quarter and down from over 2% a year ago. The submarket is subject to significant swings in vacancy and absorption due to the large size of the transactions that typically take place. The I-8/Joliet Corridor is subject to signifi cant swings in vacancy and absorption due to the large size of typical transactions that typically take place. Pictured Above: Division Street in Crest Hill, purchased by California-based Aaron Thomas Company, Inc. for $6.72 million last quarter

35 Construction Construction has started on a new 217,712 SF build-to-suit building at the new 8-acre intermodal facility in Joliet. This new intermodal operation is projected to receive its first train this summer, will have the ability to hold around 2 million SF, and will position CenterPoint Intermodal Center with both the BNSF & Union Pacific rail lines. When completed, the intermodal center will be bigger than CenterPoint s Elwood intermodal center. Available Space Profile.7 MM.8 MM.9 MM 2. MM 9.3 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-8/Joliet Corridor Overview Transaction Activity Chemical manufacturer Stepan Co. signed a long-term lease during the first quarter for a new 217,712 build-to-suit facility, becoming the first to stake a claim at the new CenterPoint Intermodal Center-Joliet. The company currently manufactures their product in Elwood, and will use the new facility as a warehouse. The intermodal location was chosen due to the transportation savings and advantages the facility offers. Two industrial buildings on Division Street in Crest Hill sold for around $16 PSF during the first quarter. The buildings were never occupied since their construction four years ago, and had gone back to their lender in 29. They were purchased by two separate food-related businesses for prices more than three times less than similar buildings were selling for in , 19,999 2, 49,999 5, 99,999 1, 199,999 # of Buildings 2,+ Looking Forward The submarket s intermodal developments play a key role in the future of the I-8/Joliet Corridor. Increased interest in the costsaving locational advantages of these facilities will continue to drive demand in the submarket. I-8/Joliet Corridor Sale Transactions 1st Qtr. 21 Property Address City Size (SF) Sale Price Price PSF Buyer Seller Division St. Crest Hill 42, $6,72, $16. Aaron Thomas Company, Inc. Bank of America Corporation Division St. Crest Hill 262,5 $4,25, $16. Greco PG Five Developments, LLC Bank of America Corporation 2648 W. Gaskin Dr. Lockport 18,25 $1,5, $58. Chemtech LLC Plainfield Group LLC I-8/Joliet Corridor Lease Transactions 1st Qtr. 21 Property Address City Leased (SF) Tenant Comments 381 Rock Creek Blvd. Joliet 3, Petco Animal Supplies Lease renewal CenterPoint Intermodal Center - Joliet Joliet 217,712 Stepan Company Build-to-suit lease 411 Olympic Blvd. Joliet 148,481 WEL Companies New lease 85 W. 185th St. Tinley Park 17, Hill-Rom New lease 85 W. 185th St. Tinley Park 16,75 Cypress Multigraphics Lease renewal Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 35

36 Industrial Submarket Map Beloit Westosha Airport Wisconsin Illinois 1 Chicago North Pleasant Prairie 2 Chicago South 3 North Cook Zion Fox Lake 76 4 West Cook Waukegan Regional Airport 9 5 Southwest Cook 83 6 South Cook 14 Waukegan McHenry 23 Grayslake I-57/Will Corridor Rockford 8 Lake County 94 9 Northwest Cook 23 Belvidere Cherry Valley 2 19 Mundelein O Hare 6 Crystal Lake Lake Forest Vernon Hills 6 11 Central DuPage 45 Lake Zurich I-55 Corridor Buffalo Grove 9 12 Highland Park 13 McHenry County Hampshire Northbrook Dundee South Elgin 15 Fox Valley 3 Morton Grove Des Plaines Schaumburg I-9 Northwest Arlington Heights 72 Elgin 64 Chicago Executive Airport 53 Glencoe Niles Streamwood Elk Grove Village 16 I-88 Corridor Evanston vvans nnston Skokie Park Ridge Ohare 1 Wood Dale 29 Bensenville Bloomingdale DeKalb elle Geneva West Chicago 38 Carol Stream 11 Elmhurst Sugar Grove Naperville 16 Aurora 3 Hinsdale Downers Grove Woodridge Burr Ridge Montgomery 3 Westchester 31 Bolingbrook Bedford Park Willow Springs 51 Plainfield Palos Heights 9 94 Blue Island East Chicago Gary/Chicago Airp Hammond Hazel Crest Tinley Park Chicago Midway Airport Oak Lawn 83 Romeoville 39 Chicago Cicero La Grange Northwest Indiana North Aurora 2 Southeast Wisconsin 4 Melrose Park Batavia 19 1 Franklin Park Dupage St CharlesAirport DeKalb County 19 I-39 Corridor I-8/Joliet Corridor 3 52 Joliet 3 Munster 1 8 Mokena Matteson 21 New Lenox 52 3 Park Forest Minooka La Salle 6 Ottawa NAI Hiffman Monee Elwood Seneca Indiana 52 Illinois

37 Methodology & Defi nitions Methodology The information included in this report is the result of a compilation and analysis of data from various sources on class A, class B and class C office and industrial properties located in the metropolitan Chicago area defined by the submarket map on page 36. NAI Hiffman obtained the information from property representatives, CoStar Group, RealCapital Analytics, industry periodicals and magazines, our in-house property database, and other sources. NAI Hiffman greatly appreciates the participation of each of these individuals, companies and resources, without whose help this report would not have been possible. All of the information detailed throughout this report is saved and organized in our own in-house database and is regularly updated. Utilizing this database, we can analyze, calculate and report demographic information, inventory, vacancy, availability, net absorption, and transactional information. Definitions The NAI Hiffman Industrial Market Report tracks several measures of market conditions. This information is collected for individual properties then consolidated, organized and analyzed for submarket and market totals. These terms, used throughout the report, are defined below according to NAIOP Terms & Definitions. Net Absorption. The net change in occupied space in a given market between the current measurement period and the last measurement period. Net absorption can be either positive or negative and must include decreases as well as increases in inventory levels. For the purpose of this report, sublease space is included in the calculation of net absorption. New Supply. The total inventory delivered to the market since the last measurement period. Delivered is defined as total square footage and/or number of buildings that has completed construction and received a certificate of occupancy during a stated period. Under Construction. Buildings where either: a) actual ground breaking has occurred (site excavation or foundation work) and construction is ongoing (not abandoned or discontinued) but for which a certificate of occupancy has not yet been issued; or b) properties undergoing conversion to office from another use or c) properties undergoing a major renovation where 75 percent or more of the building is not available for lease and building generally requires a certificate of occupancy to be made available for lease. Submarket Map / Methodology / Definitions Total Inventory (Market Size). The total square footage of gross rentable area in a specific market. It includes the gross rentable area in buildings that have received a certificate of occupancy. Total inventory increases when a new building is delivered and decreases when an existing building is destroyed, demolished or its use changes. Available Space. The total amount of space that is currently being marketed as available for lease in a given time period. It includes space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Available space excludes shadow space. Vacancy Rate. A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of inventory. Vacant space is inventory that is not currently occupied. Shadow Space. That portion of leased space which is vacant but not available space. Shadow space is difficult to measure. (Synonym: phantom space) NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 37

38 NAI Hiffman & NAI Global The Power of Local Knowledge. NAI Hiffman is the largest full service, privately-owned commercial real estate brokerage and management company in the Chicago region. With over 15 brokers and employees, NAI Hiffman is dedicated to providing our clients with the most comprehensive real estate services. Our clients come to us for our deep local knowledge and they build their business on the power of our global managed network. NAI Hiffman delivers world-class, results-oriented, office, industrial, retail, and investment brokerage and management services including: Acquisition & Dispositions Leasing & Subleasing Tenant Representation Property Management Sale/Leaseback Build-to-Suit Investment Services Site Selection Due Diligence Market Research Consulting & Strategic Planning Receivership & REO Disposition The Power of Global Reach. NAI Global is the premier network of independent commercial real estate firms and is one of the largest commercial real estate service providers worldwide. What makes us different is the way we bring together people and resources in over 325 offices in 55 countries around the world to deliver results for our clients. As the world s only managed network of commercial real estate firms, we conclude over $45 billion in business annually by working together to help our clients strategically optimize their assets. We also manage over 2 million SF of commercial space. For more information, visit NAI Global has received top industry rankings: Ranked #2 brokerage network by Real Estate Forum Ranked #3 brokerage by Commercial Property News Ranked #4 by Lipsey s Top 25 Real Estate Brands NAI Global is based in Princeton, New Jersey. A dedicated staff, strategically positioned around the world, provides technology, marketing and corporate services support to NAI Global s network of real estate offices.

39 NAI Hiffman Dennis Hiffman Jeff Fischer Chairman & C.E.O. Vice President Michael Robbins Associate William Montana Senior V.P./Managing Director NAI Hiffman / NAI Global dhiffman@hiffman.com jfischer@hiffman.com mrobbins@hiffman.com wmontana@hiffman.com David Peterson, RPA Larry Goldwasser Adam Roth, CCIM, SIOR Brent Jacob C.O.O. Vice President Vice President Associate dpetersen@hiffman.com lgoldwasser@hiffman.com aroth@hiffman.com bjacob@hiffman.com Industrial Services John Cash, SIOR Exec. V.P./Managing Director jcash@hiffman.com Duke Botthof Executive Vice President botthof@hiffman.com Brian Colson Executive Vice President bcolson@hiffman.com Steve Connolly, SIOR Executive Vice President sconnolly@hiffman.com Benjamin Cremer Vice President bcremer@hiffman.com Kelly Disser Associate kdisser@hiffman.com Eric Fischer Senior Associate David Haigh Associate dhaigh@hiffman.com Daniel Leahy, SIOR Executive Vice President dleahy@hiffman.com Jay Maher, III Associate jmaher@hiffman.com Irvin Malik Senior Associate imalik@hiffman.com Adam Marshall Senior Associate amarshall@hiffman.com Mark Moran Executive Vice President mmoran@hiffman.com Lawrence Much, SIOR Executive Vice President lmuch@hiffman.com Stephen Sullivan Vice President ssullivan@hiffman.com Eric Tresslar Executive Vice President etresslar@hiffman.com David Troha Associate dtroha@hiffman.com John Whitehead Associate jwhitehead@hiffman.com Daniel Wilkins Associate dwilkins@hiffman.com Investment Services Arthur Burrows Senior Vice President aburrows@hiffman.com Mike Tenteris Senior Vice President Research Craig Hurvitz Director of Statistics and Market Information churvitz@hiffman.com Marketing Julia Sutherland Marketing Director jsutherland@hiffman.com Jonathan Skaggs Art Director jskaggs@hiffman.com Jennifer Burke Catherine DeBoer Elsa Gaztambide Karen Kirian Alison O Connell Melody Palese Denise Racana efischer@hiffman.com mtenteris@hiffman.com NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT FIRST QUARTER 21 39

40 NAI Hiffman Committed to Chicago. Connected to the World. Build on the power of our network. Corporate Office One Oakbrook Terrace Suite 6 Oakbrook Terrace IL 6181 tel fax