OFFICE REPORT WINTER 2017

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1 A Global Division of Cressy Commercial Real Estate OFFICE REPORT WINTER 217

2 OFFICE BUILDING CLASSIFICATIONS Office buildings are loosely classified based on the quality of their construction, their features and the prominence of their location according to guidelines from BOMA. CLASS A Prestigious buildings competing for premier office users with rents above average for the area. Buildings w i t h high quality standard finishes, state-of-the-art systems, exceptional accessibility and a definite market presence. CLASS B Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building cannot compete with Class A at the same price.

3 SOUTH BEND/MISHAWAKA 3Q17 OFFICE MARKET A Global Division of Cressy Commercial Real Estate MARKET AT A GLANCE 3.95M 12.5% -51,34 $ % Inventory Vacancy Rate Quarterly Absorption Average Lease Rate Unemployment Rate BUSTLING MARKET The historic Jefferson Centre Building located at the corner of Jefferson Blvd and Michigan Street in downtown will soon complete significant renovation. Planned improvements include new canopies and elevators, lobby renovation, upgraded heating and cooling along with ADA accessible restrooms. Upon completion, Jefferson Centre, currently considered a class B and C office building will be transformed into class A space. Ownership is anticipating that the investment will make the half-occupied building more appealing to tenants in efforts of reaching maximum occupancy. The financial sector of the office market is growing steadily as more institutions seek to broaden their reach and expand their footprint in the Midwest. Centier Bank is growing. The bank, a new anchor tenant in the JMS Building, recently celebrated their grand opening. In addition, they recently opened a branch location in the Heritage Square shopping center. Centier has also announced other planned expansions with business banking centers planned in Goshen and Elkhart, as well as a branch inside the Meijer store. The Goshen branch will celebrate their grand opening in early fourth quarter, the Elkhart location is expected to be open before the end of the year. Similarly, United Federal Credit Union is scheduled to break ground on the south side of at the beginning of the fourth quarter. This groundbreaking comes on the heels of the recent announcement of a new branch location at Main Street and Edison Lakes Parkway in. UFCU has announced plans to purchase as many as four more properties within and over the next three years. AVERAGE LEASE RATE & VACANCY $2 $17 $14 $11 Vacancy (%) $8 8% 3Q1 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 MARKET PERFORMANCE Inventory (Local Profile) 3Q17 3Q16 3Q M 3.9M 4.1M Vacancy Rate 12.5% 11.4% 1.3% Quarterly Absorption -51,34-18,98 1,326 Average Lease Rate $16.73 $17.4 $18.15 Under Construction 13,74 Completed Construction Average Lease Rate (Price/) 2% 17% 14% 11% 4Q17 Forecast

4 SOUTH BEND/MISHAWAKA 3Q17 OFFICE MARKET MARKET IN MOTION $38 Million VA Clinic Complete in The new Veterans Affairs Clinic in has officially replaced the location. The 2-year, 9, square foot construction project is completed and many of the services now available were previously only offered in Fort Wayne. Local veterans are now able to receive services such as mental health, audiology and cardiology in. The addition of these services will quadruple the offerings for veterans in the region. VA Clinic - Courtesy of Tribune Urban Storage & Office Space Coming to Downtown Cressy Commercial Real Estate is in the final stages of acquiring the two-story former Gates Toyota building on Western Ave. Plans are underway for the redevelopment of the property which is located across from Four Winds Field and the new Ivy at Berlin Place project. The developer intends to convert the northern end of the building into urban storage units while the southern end of the building will comprise of approximately 18, square feet of office space. We feel like there s an emerging trend with all the new residential apartments and condos for some urban storage units, said Bradley, senior vice president of Cressy Commercial Real Estate. These are storage units designed to serve residents in high-density areas. The units will provide space for downtown residents, including young professionals and empty-nesters, to store furniture and other items that don t fit in their downtown living spaces. A Global Division of Cressy Commercial Real Estate Renovation to Produce Class A Office Space The former Jefferson Medical Arts Building has been purchased by Cressy Commercial Real Estate and will be renovated in 218. The building offers 28, on 4 floors and will be transformed into class A office space. Private parking is available.

5 SOUTH BEND/MISHAWAKA SOUTH BEND/MISHAWAKA 2Q17 3Q17 OFFICE OFFICE MARKET MARKET NOTABLE LEASE TRANSACTIONS SUBMARKET STATISTICS A Global Division of Cressy Commercial Real Estate Address Submarket Size () 393 Edison Lakes Parkway Edison Lakes 42,592 $551, East Jefferson Boulevard 13 South Main Street, Suite 2 NOTABLE SALE TRANSACTIONS CBD 14,987 $224,85 CBD 7,571 $169,818 Consideration ($) Submarket Area CBD CBD Inventory () Under Construction () Vacancy Rate (%) Quarter Absorption () YTD Absorption () Class A Lease Rates (Price/) Class B Lease Rates (Price/) Average Lease Rates (Price/) 62, ,825-5,825 $18. $16. $17. 1,743, ,85-72,465 $19.49 $16.97 $18.23 Address Submarket Size () 42 Edison Lakes Parkway Consideration ($) 16,66 $1,325, 21 Farnsworth Drive Other 7,946 $3, CBD 1,85, ,91-49,91 $18.74 $16.48 $17.61 ** 1,89, ,738 22,782 $2. $14.33 $ East Jefferson Boulevard Other 4,225 $135, * 1,57, ,132-74,37 $16.62 $12.51 $14.56 *Blackthorn and Other submarkets are included in the submarket. **Edison Lakes, Granger and Other submarkets are included in the submarket. Cressy Commercial Real Estate quarterly market reports are a compilation of data from multiple sources. The data is reviewed quarterly and adjusted due to circumstances in the market, such as new construction and demolition. The vacancy square footage is compiled from a combination of online data from multiple major listing services, broker provided listing information and industry knowledge. NGCE has created this report to provide the most accurate information possible. We do not assume responsibility, however, for errors, omissions, prior sale, lease or withdrawal from the market. / 2,146, ,394-51,255 $18.31 $13.42 $15.86 TOTALS 3,952, % -51,34-11,165 $18.52 $14.95 $16.73

6 BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) OFFICE REPORT IN INDIANA NORTHERN MARKET OVERVIEW OFFICE MARKET OVERVIEW ADDRESS PROPERTY SUBTYPE YEAR BUILT BUILDING SIZE () AVAILABLE VACANCY RATE OCCUPIED RENTAL RATE/ LIST PRICE CALENDAR YEAR ABSORPTION () BLACKTHORN 3575 Moreau Court Class A ,743 78,921 (Sublease Space; 73,242) 14.6% 73,242 $11. - $15.5 FSG 357 Blackthorn Court Class A ,128.% 8,128 N/A 577 Nimtz Parkway Class A ,814 9,814 1.% $1. NNN / $1,5, 58 Nimtz Parkway Class A 23 11,18 11,18 1.% $1. NNN / $1,14, EDISON LAKES 4215 Edison Lakes Parkway 425 Park Place 435 Park Place 515 Park Place 527 Park Place Class A ,86 13, % 27,28 $22.5 MGS Class A 199 6,24 1, % 4,327 $21. MGS Class A ,24 2, % 3,388 $21. MGS Class A ,89 7, % 1,49 $21. MGS Class A 199 6,24 6,24 1.% $21. MGS Copyright 217. Reproduction in whole or part is permitted only with the written consent of Newmark Grubb Knight Frank Company. Some of the data in this report has been gathered from third party sources and has not been independently verified by Newmark Grubb Knight Frank, which therefore makes no warranties or representations as to the completeness or accuracy of any information contained in this report. You are advised to investigate all such information, and to verify its completeness and accuracy, before making any use thereof or any reliance thereon.

7 BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) OFFICE REPORT IN INDIANA NORTHERN MARKET OVERVIEW OFFICE MARKET OVERVIEW ADDRESS PROPERTY SUBTYPE YEAR BUILT BUILDING SIZE () AVAILABLE VACANCY RATE OCCUPIED RENTAL RATE/ LIST PRICE CALENDAR YEAR ABSORPTION () EDISON LAKES (CONTINUED) 3515 Park Place Class A , 6, 1.% $21. MGS 393 Edison Lakes Parkway Class A , 43,.% 43, For Sale Only ($6,1,) 411 Edison Lakes Parkway Class A ,627 42,627 1,4 (For Lease) 3.3% 41,227 $22.5 MGS / $8,, (1,4) 355 Park Place Class A 199 6,24 6,24.% 6,24 For Sale Only ($615,) MISHAWAKA CBD 22 Lincolnway East Class B ,484 17,484 8,1 (For Lease) 46.3% 9,384 $15. FSG / $975, MISHAWAKA OTHER 23 Catalpa Drive Mishawka E Day Road 171 E Day Road Class A ,624 5, % 6,518 $12. - $13. NNN Class A 28 21,56 2,1 9.7% 19,46 $12. NNN (394) Class A ,74 11, % 1,596 $13. - $14. NNN (2,555) Copyright 217. Reproduction in whole or part is permitted only with the written consent of Newmark Grubb Knight Frank Company. Some of the data in this report has been gathered from third party sources and has not been independently verified by Newmark Grubb Knight Frank, which therefore makes no warranties or representations as to the completeness or accuracy of any information contained in this report. You are advised to investigate all such information, and to verify its completeness and accuracy, before making any use thereof or any reliance thereon.

8 BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) OFFICE REPORT IN INDIANA NORTHERN MARKET OVERVIEW OFFICE MARKET OVERVIEW ADDRESS PROPERTY SUBTYPE YEAR BUILT BUILDING SIZE () AVAILABLE VACANCY RATE OCCUPIED RENTAL RATE/ LIST PRICE CALENDAR YEAR ABSORPTION () MISHAWAKA OTHER 241 Grape Road 1415 Lincolnway West Osceola 23 Red Coach Drive 236 W Edison Road Class B ,376 7, % 15,256 $13. - $15. MGS 2,38 Class B ,5 2,5 1.5% 25, $9. MGS 1,25 Class A ,72 3, % 8,594 $1.-$13. NNN Class B ,39 1, % 9,74 $9.-$12.95 NNN 9 SOUTH BEND CBD W Edison Road 41 E. Colfax Avenue 25 W Jefferson Boulevard Class B ,788 1, % 77,57 $7.-$1. NNN (6,439) Class B ,42 35, % 55,949 $16. MGS (2,64) Class B ,77 14, % 66,647 $14.5 FSG 698 Copyright 217. Reproduction in whole or part is permitted only with the written consent of Newmark Grubb Knight Frank Company. Some of the data in this report has been gathered from third party sources and has not been independently verified by Newmark Grubb Knight Frank, which therefore makes no warranties or representations as to the completeness or accuracy of any information contained in this report. You are advised to investigate all such information, and to verify its completeness and accuracy, before making any use thereof or any reliance thereon.

9 BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) OFFICE REPORT IN INDIANA NORTHERN MARKET OVERVIEW OFFICE MARKET OVERVIEW ADDRESS PROPERTY SUBTYPE YEAR BUILT BUILDING SIZE () AVAILABLE VACANCY RATE OCCUPIED RENTAL RATE/ LIST PRICE CALENDAR YEAR ABSORPTION () SOUTH BEND CBD (CONTINUED) W Jefferson Boulevard N Main Street Class B ,532 14, % 35,898 $12. FSG 325 Class B ,862 1, % 2,933 $13.5-$15. MGS 22 S Michigan Street Class A ,928 53,54 (Sublease Space: 49,394) 42.5% 72,424 $17.75 MGS 3 S Saint Louis Boulevard 32 St. Joseph Street 1 E Wayne Street Class A , 18, % 21,27 $18. MGS 1,527 Class B ,77 1, % 13,142 $2. NNN Class A ,367 5, % 93,778 $21.5 FSG 13,44 22 W Colfax Avenue Class B ,674 7, % 21,372 $15. FSG / $1,325, 3, W Wayne Street Class B ,184 26,184.% 26,184 For Sale Only ($465,) Copyright 217. Reproduction in whole or part is permitted only with the written consent of Newmark Grubb Knight Frank Company. Some of the data in this report has been gathered from third party sources and has not been independently verified by Newmark Grubb Knight Frank, which therefore makes no warranties or representations as to the completeness or accuracy of any information contained in this report. You are advised to investigate all such information, and to verify its completeness and accuracy, before making any use thereof or any reliance thereon.