Metro Milwaukee Industrial Market Report 2017 Q2

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1 RETAIL OFFICE INDUSTRIAL LAND INVESTMENT NAI MLG COMMERCIAL N BROADWAY, SUITE 700, MILWAUKEE, WI MLGCOMMERCIAL.COM

2 Market intelligence is an essential component to NAI MLG Commercial s full-service platform. Our research team monitors trends and statistics on a local, regional and national level to provide valuable insights and projections for our clients. In addition to quarterly research reports for Milwaukee and Madison s office, industrial, and retail markets we can provide custom analysis for your specific asset or business utilizing proprietary data and analysis tools. -Nathan Winkel Director of Marketing and Research NET ABSORPTION 2Q16 vs. 2Q17 AVAILABILITY Year-over-Year Changes VACANCY ASKING S Quarter-over-Quarter Changes 1Q17 vs. 2Q17 Submarket Inventory Available Industrial Submarket Statistics Availablity Vacant Vacancy Quarterly Net Absoprtion Milwaukee 94,925,044 8,747, % 5,078, % 264,584 Flex 12,105, , % 644, % 13,148 Manufacturing 53,805,219 3,696, % 2,106, % (44,985) Whse/Distribution 29,014,526 4,181, % 2,326, % 296,421 Waukesha 72,203,747 3,723, % 2,165, % 67,805 Flex 16,796, , % 632, % (61,339) Manufacturing 38,080,371 1,657, % 862, % 155,522 Whse/Distribution 17,327,037 1,080, % 670, % (26,378) Racine 29,114,998 2,121, % 1,441, % (106,862) Flex 1,589, , % 136, % (2,029) Manufacturing 22,241,575 1,218, % 598, % (106,128) Whse/Distribution 5,283, , % 706, % 1,295 Kenosha 28,682,567 2,428, % 1,567, % 1,280,998 Flex 2,195, , % 50, % 20,324 Manufacturing 11,535,538 1,138, % 565, % 79,500 Whse/Distribution 14,951,205 1,052, % 951, % 1,181,174 Washington 19,743,277 1,603, % 646, % 4,140 Flex 6,685, , % 130, % 20,140 Manufacturing 9,399, , % 76, % (16,000) Whse/Distribution 3,658, , % 440, % 0 Sheboygan 14,747, , % 408, % 0 Flex 2,656,199 59, % 59, % 0 Manufacturing 9,613, , % 348, % 0 Whse/Distribution 2,478,006 28, % - 0.0% 0 Ozaukee 11,907, , % 786, % 201,959 Flex 2,565, , % 307, % 201,959 Manufacturing 8,073, , % 479, % 0 Whse/Distribution 1,268, % - 0.0% 0 Walworth 8,703, , % 236, % 136,000 Flex 857, % - 0.0% 0 Manufacturing 6,329, , % 160, % 0 Whse/Distribution 1,516, , % 75, % 136,000 Grand Total 280,028,338 20,441, % 12,330, % 1,848,624 NET ABSORPTION AVAILABILITY VACANCY ASKING S Milwaukee, Wisconsin Page 2 Some information contained herein has been obtained from third party sources deemed reliable but has not been independently verified by NAI MLG Commercial. NAI MLG Commercial makes no warranties or representations as to the completeness or accuracy thereof. NAI MLG Commercial makes no guarantee about projections, opinions, assumptions or estimates. Occasionally corrected or updated information becomes available for both current and historical data thereby invalidating specfic comparison to previously issued reports. Milwaukee, Wisconsin Page 3

3 Current Vacancy Rate Heat Map High Vacancy Low Vacancy Washington Co. Inventory SF: 19,743,277 Availability: 8.1% Vacancy: 3.3% Waukesha Co. Inventory SF: 72,203,747 Availability: 5.2% Vacancy: 3.0% Sheboygan Co. Inventory SF: 14,747,237 Availablity: 3.00% Vacancy: 2.80% Ozaukee Co Inventory SF: 11,907,957 Availability: 7.3% Vacancy: 6.6% Milwaukee Co Inventory SF: 94,925,044 Availability: 9.2% Vacancy: 5.3% View our Interactive Market Report Map at MLGCommercial.com Transactional Sale Volume ($) Heat Map High Vacancy Low Vacancy Washington Co. Sale Transactions:$23,495,100 Sold SF: 766,030 Leased SF: 543,858 Sheboygan Co. Sale Transactions: $10,114,259 Sold SF: 575,129 Leased SF: 56,445 Ozaukee Co. Sale Transactions:$39,267,500 Sold SF: 1,984,806 Leased SF: 168,010 Waukesha Co. Sale Transactions:$377,371,363 Sold SF 8,983,465 Leased SF: 5,324,244 Milwaukee Co Sales Transactions:$513,207,518 Sold SF: 15,899,774 Leased SF: 7,318,093 4,000,000 3,500,000 Inventory Available Availability Vacant Industrial Snapshot Vacancy Quarterly Net Absorption Average Rental Rate (NNN) Manufacturing 159,077,294 9,438, % 5,199, % 67,909 $4.79 Whse/Distribution 75,499,010 7,793, % 5,170, % 1,588,512 $4.16 Flex 45,452,034 3,208, % 1,961, % 192,203 $ ,028,338 20,441, % 12,330, % 1,848,624 $ Q1 277,964,584 20,124, % 12,279, % 440,759 $ Q4 277,054,696 19,042, % 11,932, % 269,272 $ Q3 276,455,971 18,805, % 11,552, % 911,513 $ Q1 275,283,784 20,072, % 11,747, % 2,477,937 $4.44 Significant Lease Transactions Property City Tenant Size Bldg Type st St Pleasant Prairie Madden Communications 301,174 Whse/Distribution 4107 W Orchard St Milwaukee ,000 Mfg th Ave Pleasant Prairie Gold Standard Banking 200,696 Whse/Distribution Significant Sale Transactions Property City Buyer Size Price Gehl Foods Portfolio Multiple Locations Angelo, Gordon & Co 719,599 $39,850, International Dr Cudahy 5201 International DEV LLC 147,212 $11,300, International Dr Sturtevant Zilber 132,000 $8,585,000 Quarterly Abosrption, Absorption %*, Vacancy Rate 9.00% 8.00% 3,000, % Walworth Co Inventory: 8,703,511 Availability: 5.9% Vacancy: 2.7% Racine Co Inventory SF: 29,114,998 Availability: 7.3% Vacancy: 4.9% Kenosha Co. Inventory SF: 28,682,567 Availability: 8.5% Vacancy: 5.5% Walworth Co Sale Transactions:$11,145,500 Sold SF: 434,482 Leased SF: 85,822 Racine Co Sale Transactions:$53,550,379 Sold SF: 1,949,817 Leased SF: 2,278,399 Kenosha Co. Sale Transactions:$223,500,788 Sold SF: 5,320,373 Leased SF: 2,995,581 2,500,000 2,000,000 1,500,000 1,000, , % 5.00% 4.00% 3.00% 2.00% 1.00% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Quarterly Absorption Vacancy 1 Year Trailing Absorption % Average* 0.00% Milwaukee, Wisconsin Page 4 *The sum of the past four quarters net absorption divided by the current inventory. Milwaukee, Wisconsin Page 5

4 NAI MLG Commercial Notable Transactions Average Asking NNN Rental Rates & Vacancy Rate Vacancy Rate by Specific Use $ % 14.0% 12.0% 12.0% $ % 10.0% $4.50 $4.00 $ % 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% 234 Hallberg Street Delavan Size: 120,000 SF Sale Price: $3,550, S. 6th Street Milwaukee Size:83,820 SF Tenant: DHL Asking Direct Lease Rate (NNN) Vacancy Sale Transaction Volume ($) and Average Price/SF Flex Whse/Dist Lt Ind $350,000,000 $300,000,000 $250,000,000 $200,000,000 $50.00 $45.00 $40.00 $150,000,000 $35.00 $100,000,000 $50,000,000 $ * Flex $45,349,850 $52,575,350 $124,316,466 $112,864,582 $96,312, $34,918, ,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 Lt Ind $126,780,654 $106,993,926 $216,025,506 $329,866,133 $185,776, $60,299, Whse/Dist $110,031,605 $70,782,100 $150,622,552 $178,624,307 $246,519, $33,666, ,000 $/SF $44.84 $33.79 $36.36 $33.61 $39.18 $29.93 Lease Transaction Volume Flex Lt Ind Whse/Dist $/SF * Flex 1,328,619 1,015,945 1,485,484 1,319,802 1,437, ,548 Lt Ind 1,772,653 2,322,515 1,901,032 2,490,019 3,172,436 1,338,481 Whse/Dist 2,110,238 3,012,409 3,265,699 3,498,664 3,245,521 1,690,470 Flex Lt Ind Whse/Dist Source: CoStar & Xceligent *Recorded Through The information contained herein has been given to us by sources we deem reliable. We have no reason to doubt its accuracy, however, we do not make any guarantees. All information should be verified before relying thereon. $30.00 $ & W. Wirth Street Wauwatosa Size: 74,776 SF Sale Price: $7,050, N. Rolling Meadows Drive Fond Du Lac Size: 28,700 SF Sale Price: $1,050,000 W142 N9078 Fountain Blvd. Menomonee Falls Size: 40,000 SF Sale Price: $1,425,000 Why NAI MLG Commercial? We are the market leading, full-service commercial real estate brokergage and property managment company providing exceptional service and expertise throughout Wisconsin for over twenty five years. Wheather you r a commercial real estate buyer, seller, owner, tenant or developer, NAI MLG Commercial is your ideal partner given our depth of local market expertise, and our exceptional access to world of opportunity though the NAI Global network. Milwaukee, Wisconsin Page 6 Milwaukee, Wisconsin Page 7

5 Methodology, Definitions & Submarket Map NAI MLG Commercial Industrial Team Methodology: The report includes all industrial properties larger than 10,000 SF within the 8 county Milwaukee metro. Excluded from the report are government owned buildings and those buildings considered special use industrial. For reporting purposes, incubator space is included within Flex; bulk warehouse, truck terminals, warehouse freezer space is included within Warehouse Distribution; light industrial is included under Manufacturing. Leasing Activity: Measured in the amount of square footage that is committed to and signed under a lease obligation for a specific building in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any preleasing of an under construction building. Sale Activity: Measured in sales price recorded to the state of Wisconsin. Excluded sales are in bank foreclosures, bank owned sales, buildings less than 10,000 SF and those considered non arm length. Inventory: The total square footage of a building that can be occupied. Available Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory. Vacancy Rate: A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of existing inventory. Net Absorption: The net change in occupied space over a given period of time. Unless noted, all net absorption figures include both direct and sublease space. Past Year Trailing Absorption %: The sum of the past four quarters net absorption divided by the current inventory. Sources used Data: Xceligent, CoStar, market knowledge. Barry Chavin, SIOR Principal t (414) m (414) bsc@mlgcommercial.com Vytau Barcas Vice President t (414) m (262) vbarcas@mlgcommercial.com Brett Garceau t (414) m (262) bgarceau@mlgcommercial.com Curt Pitzen t (414) m (262) cpitzen@mlgcommercial.com Stephen Provancher Principal t (414) m (414) sp@mlgcommercial.com Anthony Bareta t (414) m (414) tbareta@mlgcommercial.com Adam Matson, SIOR t (414) m (414) amatson@mlgcommercial.com Travis Tiede t (414) m (920) ttiede@mlgcommercial.com Some information contained herein has been obtained from third party sources deemed reliable but has not be independently verified by NAI MLG Commercial. NAI MLG Commercial makes no warranties or representation as to the completeness or accuracy thereof. NAI MLG Commercial makes no guarantee about projections, opinions, assumption or estimates. Occasionally corrected or updated information becomes available for both current and historical data thereby invalidating specific comparison to previously issued reports. Milwaukee, Wisconsin Page 8 Mitchell Starczynski Sales Associate t (414) m (262) mstarczynski@mlgcommercial.com Kris Kucharski Sales Associate t (414) m (262) kak@mlgcommercial.com Milwaukee, Wisconsin Page 9

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