Chicago Industrial. Submarket Report

Transcription

1 Chicago Industrial Submarket Report 1Q 2017

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3 Table of Contents I-55 Corridor...4 I-57 Corridor...6 I-80 Corridor...8 I- Corridor...10 Lake County...12 North Cook County...14 North DuPage...16 North Kane County...18 O Hare...20 South Suburbs...22 Southeast Wisconsin...24 West Cook County...26 Industrial Statistics...28 Development Dashboard...30

4 Chicago Industrial Submarket Report I-55 Corridor Key Market Indicators Supply Demand Pricing inventory 83,641,497 Ý vacancy (%) 8.5% Þ availability (%) 11.1% Þ net 765,075 Ý net 765,075 Þ Average rental rate ($ psf) $4.66 Þ 12-mo. dollar change -$0.37 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity The largest lease in the I-55 market during quarter one was D&H Distributing Company s 253,810-square-foot short-term renewal with Liberty Property Trust at 1455 Remington Boulevard in Bolingbrook. In Romeoville, Molto Properties secured a full-building user in their recently completed 226,000-square-foot building at 11 Normantown Road. The tenant, Lasco Fittings, signed a long-term lease. Conor Commercial and LaSalle Investment Management also secured a full-building user in their 109,000-square-foot warehouse/distribution facility at 680 Remington Blvd in the Fountain Square Business Park in Bolingbrook. Black Horse Trucking signed a long-term lease and will be able to add 15 additional new docks and secure the truck court as part of their tenant improvement package. Sale St. Louis-based Koch Development sold a 46,289-square-foot building at 580 Crossroads Parkway in Bolingbrook to a Chinese hydraulics manufacturer, Hengli, for $82 per square foot. In Burr Ridge, Dave Mitidero/CR Realty Advisors sold a 30,000-square-foot Class B asset to Donnan Real Estate for $2.16 million. In Woodridge, Principal Investors has a three-building, 146,868-square-foot complex at Woodridge Commerce Center on the market. The complex, built in 2006, is leased to small-format local businesses. Development New development continues to thrive in the I-55 Corridor near pre-recessionary volume. The most recent delivery was Panattoni Development Company s 185,600-square-foot speculative building in Darien. Robust leasing velocity in the 100,000 to 400,000 square foot range has resulted in a number of speculative deliveries within this size segment over the past 18 months. The largest space on the market in the I-55 Corridor is Panattoni Development Company s 787,000-square-foot cross dock building at 1101 Airport Road, Romeoville. This is currently the largest standing speculative vacancy in the market. There are ten speculative projects underway that will add another 2.6 million square feet to I-55 Corridor s vacant supply. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Lexington Realty Trust WBS Equities Airport Road Romeoville 1,166 1/2017 $ Hengli America Koch Development 580 W Crossroads Parkway Railhead Thor-Shackel Horseradish Bolingbrook 46,289 1/2017 $ W224 Shore Court Burr Ridge 29,0 2/2017 $72.14 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size D & H Distributing Renewal 1455 Remington Blvd Bolingbrook 253,810 Lasco Fittings New Lease 11 Normantown Road Romeoville 226,0 Menasha Packaging New Lease th Street Bolingbrook 125,000 4

5 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution 3rd Party Logistics Consumer Products Food E-Commerce Submarket Statistics Property type inventory vacancy availability Q1 Q4 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 71,342, % 11.6% 4,873 4,873 $4.55 1,605, ,600 Manufacturing 12,245, % 8.1% -1,798-1,798 $ Special Purpose 54, % 26.2% 0 0 $ s 83,641, % 11.1% 765, ,075 $4.66 1,605, ,600 5

6 Chicago Industrial Submarket Report I-57 Corridor Key Market Indicators Supply Demand Pricing inventory 30,602,7 Ý vacancy (%) 6.0% Þ availability (%) 8.9% Þ net 112,500 Þ net 112,500 Þ Average rental rate ($ psf) $3.43 Þ 12-mo. dollar change -$0.31 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Lease activity Three sizeable renewals were signed this quarter. Mars Candy extended their lease in 570,028 square feet in Manteno, and XPO Logistics signed two leases with Exeter Property Group at S. Ridgeland Avenue, Monee, totaling 153,350 square feet and 100,000 square feet, respectively. One new lease was signed this quarter, measuring 40,000 square feet. Ironically, only one new lease was procured last quarter, totaling 42,000 square feet. Despite the light activity, I-57 Corridor s vacancy rate dropped 37 basis points to 6.0 percent. I-57 Corridor asking rents have steadily declined from the first quarter 2016 rate of $3.74 per square foot net to $3.43 per square foot net. Limited demand in the market has kept rents from spiking. Sale Due to its smaller industrial base, the I-57 Corridor does not experience the institutional trade volume that occurs in other Chicago area markets. This quarter, no institutional trades took place. One sale, however noted as a 19,848-square-foot facility at Joshua Drive, Sauk Village traded for a little over $28.00 per square foot. Development Average Rental Rate The I-57 Corridor has experienced a flourish of build-to-suit activity. Last year, three build-to-suit projects were completed, delivering 205,000 square feet in addition to two new projects currently underway that will add another 1.9 million square feet by the end of This compares favorably to the four projects completed from 2011 to The increased build-to-suit activity has attracted developer interest to consider speculative development. Northern Builders Inc. has drawn up plans for a 220,440-square-foot facility in the Monee Corporate Center on Cleveland Avenue. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Warehouse Specialists Inc. GLP Mark Collins Drive Sauk Village 776,515 1/2017 $31.81 Gateway Classic Cars The Capital Companies, LLC 1329 Commerce Dr Crete 41,250 3/2017 $48.48 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Mars Candy Renewal 1125 W Sycamore Road Manteno 570,028 Undisclosed New Lease 70 North Street Park Forest 40,000 6

7 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 I-57 Corridor Northwest Indiana Submarket drivers Manufacturing Regional Distribution Packaging 3rd Party Logistics Food E-Commerce Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 20,687, % 11.4% -1,369-1,369 $3. 2,205,165 0 Manufacturing 9,6, % 2.2% 113, ,869 $ Special Purpose 275,5 55.3% 55.3% 0 0 $ s 30,602,7 6.0% 8.9% 112, ,500 $3.43 2,205,

8 Chicago Industrial Submarket Report I-80 Corridor Lease activity Key Market Indicators Supply Demand Pricing inventory 80,2,473 Ý vacancy (%) 5.7% Ý availability (%) 5.8% Ý net 2,412,616 Ý net 2,412,616 Þ Average rental rate ($ psf) $3.87 Þ 12-mo. dollar change -$0.38 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Three large renewals by corporate occupiers in the I-80 submarket marked the largest transactions in the Chicago market in first quarter. DSC Logistics committed to a 1,022,554-square-foot renewal at W. Mississippi Street in Elwood with Liberty Property Trust. The 3PL handles multiple accounts at this rail-served location. On the far western edge of the I-80 market, IKEA extended in 849,700 square feet at 501 International Parkway, Minooka, while Mondelez renewed in 806,400 square feet with Exeter Property Group at 100 Prologis Parkway, Morris. In Joliet, CenterPoint Properties secured a partial building lease with CTDI for 501,313 square feet in their recently completed 750,000-square-foot speculative building at 30 Brandon Road. CTDI, 3PL partner for Comcast, will utilize the inland port facility to import and distribute cable boxes, modems and other electronics for the telecommunications industry. Sale Class A big-box trades in the I-80 Corridor have been limited due to the fact that a large portion of the buildings are owner-occupied or developed by CenterPoint Properties, who has historically sold very few of their assets in the Joliet and Elwood intermodal parks. The largest transaction of the first quarter was Empyreal Properties selling a 32,800-square-foot building at Burl Court in Joliet to Jun Wei Lin for approximately $.00 per square foot. Industrial Outdoor Ventures acquired a container yard and small repair facility at S. Youngs Road in Channahon from Cavalea Container. The sale price was $4.1 million, and the site was fully paved and fenced with a 5,000-square-foot office and a 3,600-squarefoot maintenance shop. In Minooka, Molto Properties acquired a 79-acre unimproved development site on McLinden Road from Rockefeller Group for approximately $2.5 million. Molto Properties has plans to get the site pad ready which can accommodate up to a 1.3 million-square-foot facility. Development Recent Sales Comparables (sorted by square feet) On the construction front, 3.2 million square feet (1.7 m.s.f. build-to-suit and 1.5 m.s.f. speculative) was delivered to the market this quarter, which resulted in 2.4 million square feet of net the largest volume of any Chicago market this quarter. The construction pipeline is more robust going forward, as 8.3 million square feet is slated for completion by the end of Of this, 3.1 million square feet is speculative in nature, which would lead one to think the market is becoming over-heated. At present, JLL is tracking four large tenant requirements looking in the I-80 market that would make this a moot point. Additionally, there are five large leases expiring within the next 24 months in spaces over 700,000 square feet that could opt to relocate to one of these facilities. Buyer Seller Location City Size Date Price PSF Duke Realty Panattoni & John Lane Lockport 502,330 3/2017 $ Jun Wei Lin Chicago Blind Company Burl Court Joliet 32,800 2/2017 $38.57 AGM Transport, Inc. Empyreal Properties LLC 2409 McDonough Street Joliet 32,000 1/2017 $60. Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size DSC Logistics Renewal W Mississippi Avenue Elwood 1,022,554 IKEA Renewal 501 International Parkway Minooka 849,691 Kraft Renewal 100 Prologis Parkway Morris 806,400 8

9 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West Northwest Indiana I-80 Corridor I-57 Corridor Submarket drivers Retail Regional Distribution Consumer Products Food E-Commerce Submarket Statistics Property Property type type Q1 Q4 total net net total net Average direct inventory vacancy availability direct asking asking rent rent (PSF) Under construction completions Warehouse & distribution 64,221, % 5.0% 2,171,164 2,171,164 $3.81 8,057,799 3,033,083 Manufacturing 16,024, % 9.2% 229, ,952 $ , ,812 Special Purpose 146, % 0.0% 11,500 11,500 $ ,500 s 80,2, % 5.8% 2,412,616 2,412,616 $3.87 8,313,795 3,247,5 9

10 Chicago Industrial Submarket Report I- Corridor Lease activity Key Market Indicators Supply Demand Pricing inventory 61,563,298 Ý vacancy (%) 5.8% Þ availability (%) 6.6% Þ net 303,787 Þ net 303,787 Þ Average rental rate ($ psf) $4.48 Ý 12-mo. dollar change -$0.02 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Two leases signed in spaces over 100,000 square feet drove I- Corridor s volume to a stout 526,823 square feet, contributing to the 49-basis point decline in I- Corridor s vacancy of 5.85 percent. Crate & Barrel leased 306,073 square feet at 175 Ambassador Drive, Naperville, expanding their footprint in the market, while Dart Container Corporation took 100,000 square feet at 2580 Prospect Court, Aurora. First quarter activity, however, was eclipsed by the fourth quarter volume of 1,517,164 square feet greatly influenced by a 954,720 square-foot build-to-suit signed by Amazon. Two sizeable renewals were completed this quarter, as XPO Logistics is staying in 182,736 square feet with Liberty Property Trust as the landlord at 2759 Eola Road, Aurora, and MXD Group extended in 110,355 square feet from International Realty Corporation at 2350 Prospect Drive, also in Aurora. Asking rents trended upward this quarter, climbing $0.13 from the previous quarter to $4.48 per square foot net. First quarter rent was similar to one year ago when $4.50 per square foot net was reported. Sale Several institutional-grade trades occurred this quarter. The largest was part of the Cabot Properties, Inc. portfolio sale to DRA Advisors, which included two buildings in the I- Corridor at 1670 and 1674 Frontenac Road totaling 144,556 square feet. The assets were sold at $42.74 and $63.33 per square foot, respectively. Also, Gramercy purchased the Party City distribution center along I- from Brennan Investment Group, LLC at 2727 Diehl Road, Naperville for $74.78 per square foot trading at a 6.4 percent cap rate. Three user-sale transactions were captured this quarter, totaling 57,260 square feet. The most noteworthy was completed by Illinois Auto Electric Company who purchased a 24,000-square-foot manufacturing plant from Microdynamics Group at 2115 Diehl Road, Naperville. The property exchanged at $ per square foot. Development There were no deliveries during the quarter; the last occurred in the third quarter of Interest to build speculative product has waned due to the amount of Class A space that remains vacant. There is one build-tosuit project underway, as Duke Realty is building a 954,720-square-foot facility for Amazon. Diminishing supply of fully improved industrial sites available in the I- Corridor will limit future deliveries. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Gramercy Brennan Investment Group LLC 2727 W Diehl Road Naperville 449,330 1/2017 $74.78 DRA Advisors Cabot Properties, Inc & 1674 Frontenac Road Naperville 144,556 2/2017 $54.16 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Crate & Barrel New Lease 175 Ambassador Drive Naperville 306,073 XPO Logistics Renewal 2759 N Eola Road Aurora 182,736 Dart Container Corporation Renewal 2580 Prospect Court Aurora 100,000 10

11 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 South Chicago I- Corridor 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Packaging Food Auto Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 38,587, % 7.1% 381, ,759 $ ,720 0 Manufacturing 22,851, % 5.8% -77,972-77,972 $ Special Purpose 124, % 0.0% 0 0 $ s 61,563, % 6.6% 303, ,787 $ ,

12 Chicago Industrial Submarket Report Lake County Lease activity Key Market Indicators Supply Demand Pricing inventory 67,432,685 Ý vacancy (%) 7.8% Ý availability (%) 9.0% Þ net 1,984 Þ net 1,984 Þ Average rental rate ($ psf) $5.99 Ý 12-mo. dollar change $0.37 Ý Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate The largest lease of the first quarter was signed by Acacia Spice Company with CenterPoint Properties on a 202,177-square-foot manufacturing building at 3600 Sunset Avenue in Waukegan. In Gurnee, Ark Logistics signed a lease for 92,330 square feet with Westmount Realty Capital LLC at N. Delany Road. These transactions alone were not enough to keep Lake County s vacancy rate from rising, up 5 basis points from the fourth quarter mark to 7.76 percent. Additionally, John Hancock secured an early renewal with AptarGroup Inc. in two buildings at 801 and 1 Technology Way in Libertyville. Both Class A buildings are approximately 69,000 square feet and share a truck court. Sale In Libertyville, Dermody Properties acquired a fully leased 185,670-squarefoot building at Park Avenue and a 75 percent vacant 220,542-squarefoot speculative building at 1-9 Park Avenue within the BridgePoint redevelopment. The total pricing was nearly $31 million, which works out to $76 per square foot. Also, in Lake County, Venture One Real Estate acquired the 363,027-square-foot former corporate headquarters of WMS Gaming for $23.75 million. The facility formerly manufactured casino gaming equipment until 2015 when production was shifted to Las Vegas. Venture One Real Estate also acquired a 110,000-square-foot vacant facility, the former headquarters of Kenall Manufacturing at 1020 Lakeside Drive in Gurnee, located in the Grand Tri-State Business Park for $27 per square foot. In 2014, Kenall moved to a 354,000-square-foot build-to-suit in Kenosha. Unfortunately, these vacant facilities both represent examples of companies leaving the state of Illinois; however, they present opportunities for value-add investors like Venture One Real Estate to acquire industrial assets far below replacement cost. Development Despite slower leasing velocity, Lake County investors often achieve a premium over product in neighboring markets to the south and west due to the affluent nature of the submarket. With that being said, some of the newer product has taken longer than expected to stabalize placing tenants in a favorable position. As of quarter end, there are four standing first-generation spaces that have yet to fully stabilize. In Libertyville, Dermody Properties has leased 25 percent of their recently acquired 220,542-square-foot building, which was delivered in Where as in Waukegan, H.S.A. Commercial has 98,500 square feet remaining of a 218,500-square-foot facility which delivered in 2014, and IDI Gazeley has 118,082 left of a 454,300-square-foot facility at the Antioch Corporate Center, which also delivered in Additionally, Ridgeline Development, in a joint venture with USAA, completed (in fourth quarter of 2016) a 157,500-square-foot speculative building at 850 Asbury in Buffalo Grove which still remains vacant. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Dermody Properties Bridge Development & 1-9 Park Libertyville 406,212 1/2017 $76.00 Venture One Real Estate WMS Gaming, Inc. 800 S Northpoint Blvd Waukegan 365,366 1/2017 $27.16 Venture One Real Estate Kenall Manufacturing 1020 Lakeside Drive Gurnee 117,272 1/2017 $25.58 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Acacia Spice Company New Lease 3600 Sunset Avenue Waukegan 202,177 Aptargroup, Inc. Renewal 801/1 Technology Way Libertyville 137,650 Ark Logistics New Lease Delany Road Gurnee 92,330 12

13 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Healthcare Pharmaceutical Medical Instruments Food Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 36,044, % 12.1% 1,403 1,403 $ ,758 0 Manufacturing 31,274, % 5.4% $6. 118,591 40,000 Special Purpose 113, % 0.0% 0 0 $ s 67,432, % 9.0% 1,984 1,984 $ ,349 40,000 13

14 Chicago Industrial Submarket Report North Cook County Key Market Indicators Supply Demand Pricing inventory 48,287,063 vacancy (%) 5.0% Þ availability (%) 5.6% Þ net 300,6 Ý net 300,6 Ý Average rental rate (nnn) $5.87 Ý 12-mo. dollar change $0.32 Ý Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity In Northbrook, Nichols Display Group subleased 56,255 square feet at Huehl Road in the Sky Harbor Business Park. Further north, in Wheeling, Production Materials Inc. committed to a 22,121-square-foot lease with Korman Lederer at 201 Messner Drive. The most significant lease of the quarter was by Segerdahl Corporation, which completed a sale-leaseback of its 245,038-square-foot manufacturing plant at 1351 Wheeling Road, Wheeling. The new owner, Angelo, Gordon & Company, purchased it for $35.35 per square foot. Sale As part of a 19.8 million-square-foot, $1.07 billion-dollar national portfolio, two Niles assets traded between Cabot Properties, Inc. and DRA Advisors. The 311,000-square-foot Howard Commons complex at 6201 W. Howard and a 45,000-square-foot building down the street at 6151 W. Howard represent two of the 16 Chicagoland properties in the portfolio. Strong first quarter user sales during the quarter drove North Cook s vacancy rate down to 5.0 percent, a remarkable 35 basis-point decline from that of the prior quarter. One to note was by LSL Industries, Inc., which acquired a 176,9-square-foot manufacturing plant from M & R Printing Equipment at W. Howard Street, Niles. Development In Niles, Molto Properties has delivered a 135,650-square-foot speculative project at 7720 Lehigh Avenue. Moreover, three other developers have speculative projects in the pipeline which will bring nearly 500,000 square feet of new product to the North Cook submarket over the next months. The largest project is being developed by Hillwood for 236,912 square feet at 3601 Howard Avenue in Skokie. In Wheeling, Hamilton Partners will commence construction on a 181,046-squarefoot speculative warehouse this spring at 800 Northgate Parkway, while Sitex will build an 83,755-square-foot speculative facility that could accommodate up to three tenants at 1075 Chaddick Drive. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF DRA Advisors Cabot Properties, Inc W Howard Street Niles 310,655 2/2017 $40.22 Angelo, Gordon & Company Segerdahl Corporation 1351 Wheeling Road Wheeling 245,038 2/2017 $60.71 ROC, Inc. Special Assets 3500 Oakton Street Skokie 186,730 1/2017 $35.35 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Segerdahal Corporation Sale/Leaseback 1351 Wheeling Road Wheeling 245,038 Nichols Display Group New Lease Huehl Road Northbrook 56,255 Undisclosed New Lease N. Croname Road Niles 27,676 14

15 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Cook North Kane Northwest Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Pharmaceutical Air Freight 3rd Party Logistics Food Medical Instruments Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 15,628, % 7.9% 305, ,026 $ ,650 Manufacturing 32,585, % 4.6% -4,387-4,387 $ Special Purpose 73, % 0.0% 0 0 $ s 48,287, % 5.6% 300,6 300,6 $ ,650 15

16 Chicago Industrial Submarket Report North DuPage Key Market Indicators Supply Demand Pricing inventory 80,602,105 Ý vacancy (%) 5.6% Þ availability (%) 7.3% Þ net 295,198 Ý net 295,198 Ý Average rental rate ($ psf) $5.12 Þ 12-mo. dollar change -$0.12 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity In Addison, Parts Town committed to a new lease with LaSalle Investment Management at 1200 N. Greenbriar Drive for 263,4 square feet. This cross-docked building has approximately 23.5-percent office buildout. The aforementioned transaction had a positive impact in the first quarter vacancy rate of 5.63 percent, falling 29 basis points from the previous quarter. In Glendale Heights, two notable transactions occurred within the Glen Pointe Business Park. Specialty Moving Systems extended their 80,000-square-foot lease with Prologis at Internationale Boulevard, while at 111 Internationale Boulevard, Switchboard Apparatus, Inc. committed to a new lease with High Street Realty Company for 61,000 square feet. Sale Upon completion of the three speculative buildings totalling 276,250 square feet located in the Bloomingdale Corporate Center, IDI Gazeley transferred ownership to Barings Real Estate as a forward presale. The assets are located at 255 Madsen, 260 Madsen and 270 Madsen, encompassing 51,600 square feet, 70,650 square feet and 154,000 square feet, respectively. The $1.07 billion national portfolio sale between Cabot Properties, Inc. and the DRA Advisors portfolio included three Class B assets in North DuPage, which totalled just under 515,000 square feet. The largest of the three was a 259,200-square-foot warehouse/ distribution facility at Brewster Creek, Bartlett. The largest user sale during the quarter was completed by Larry Roesch Family Automotive Group, which purchased 51,600 square feet from State Farm Insurance at 160 Industrial Drive, Elmhurst. Additionally, Russian Ferro Alloys has purchased 41,050 square feet of space at 2700 Wisconsin Avenue in Downers Grove. Having outgrown its warehouse in Westmont, the deal reflects the continued growth of the Indiana supplier of ferroalloys, the iron used in steelmaking. The industrial facility sits on 2.31 acres, with immediate access to major thoroughfares I-355 and I-. With 6,000 square feet of office space and additional land for outside storage space, the facility will be instrumental in supporting the company s operations in Chicago. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF DRA Advisors Cabot Properties, Inc. 3 building portfolio Addison & Bartlett 513,638 2/2017 $54.16 Barings Real Estate IDI Gazeley 3 building portfolio Bloomingdale 276,250 1/2017 $85.50 DCT Industrial Trust Porteous Fastener Company Fullerton Avenue Carol Stream,173 1/2017 $83.89 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Parts Town New Lease 1200 N Greenbriar Drive Addison 263,4 Specialty Moving Systems Renewal Internationale Blvd Glendale Heights 79,722 Switchboard Apparatus, Inc. New Lease 111 Internationale Blvd Glendale Heights 60,984 16

17 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare I- / Dekalb Fox Valley North Dupage West Cook North Chicago 2 I- Corridor 2 South Chicago I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Medical Food Consumer Products Submarket Statistics Property Property type type inventory vacancy availability Q1 Q4 total total net net total net net Average direct Under direct asking asking rent construction rent (PSF) completions Warehouse & distribution 47,470,7 7.3% 8.7% 221, ,427 $4.98 1,033,003 0 Manufacturing 33,118, % 5.2% 73,771 73,771 $ ,080 Special Purpose 12,6 0.0% 0.0% 0 0 $ s 80,602, % 7.3% 295, ,198 $5.12 1,033,003 67,080 17

18 Chicago Industrial Submarket Report North Kane County Key Market Indicators Supply Demand Pricing inventory 31,413,615 Ý vacancy (%) 10.4% Ý availability (%) 10.5% Þ net 2,910 Þ net 2,910 Þ Average rental rate ($ psf) $4.97 Þ 12-mo. dollar change $0.05 Ý Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Lease activity One large speculative space was filled this quarter when Sub Zero, Inc. leased from Interstate Partners 226,440 square feet of warehouse/ distribution space at Burnet Drive, Gilberts. This transaction accounted for 67 percent of all North Kane County leasing volume. Occupier demand was down slightly as new leasing activity measured in at 338,759 square feet from 387,648 square feet leased in the fourth quarter. The weaker volume contributed to the rise in North Kane County s vacancy rate, which climbed 11 basis points from the fourth quarter level of percent to percent. The vacancy rate was also hampered by two speculative deliveries in the quarter with limited preleasing activity. Asking rental rates have backed off the fourth quarter 2016 high of $5.07 per square foot net to the first quarter rate of $4.97 per square foot net this was more closely aligned with the rate posted one year ago of $4.92 per square foot net. Sale Average Rental Rate All first quarter sale activity was driven by users, as three buildings sold measuring 107,133 square feet. The most prominent sale occurred in Elgin when Radicon USA purchased from Elgin Property Development LLC a 56,540-square-foot warehouse/distribution facility at 2475 Alft Lane. The property traded hands for $72.00 per square foot. Development Four buildings (two speculative and two build-to-suit) were delivered in the first quarter, adding 482,244 square feet to North Kane County s inventory base. The largest project was Northern Builders Inc. s 308,553-square-foot speculative facility, completed at 2801 Alft Lane, Elgin. The building offers 32-foot clear ceilings and 30 exterior docks. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Radicon USA Elgin Property Development LLC 2475 Alft Lane Elgin 56,540 1/2017 $72.00 Nova Trans Services Elgin Beverage Company 1685 Fleetwood Drive Elgin 30,593 2/2017 $34.32 TKMS LLC DHS Partnership 1695 Cambridge Drive Elgin 20,000 2/2017 $66.50 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Sub Zero, Inc. New Lease Burnet Drive Gilberts 226,440 Convenience Concepts, Inc. New Lease Galvin Drive Elgin 71,150 Convenience Concepts, Inc. Renewal Galvin Drive Elgin 50,056 18

19 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Packaging Assembly Consumer Products Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 16,3, % 16.5% 268, ,986 $ ,403 Manufacturing 15,007, % 4.0% 21,924 21,924 $ ,400 Special Purpose 13, % 0.0% 0 0 $ s 31,413, % 10.5% 2,910 2,910 $ ,803 19

20 Chicago Industrial Submarket Report O Hare Key Market Indicators Supply Demand Pricing inventory 93,818,261 Ý vacancy (%) 5.9% Ý availability (%) 7.2% Ý net -344,559 Þ net -344,559 Þ Average rental rate (nnn) $5.95 Ý 12-mo. dollar change $0.14 Ý Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity Overall leasing activity was limited in the first quarter, with 575,304 square feet of new, an almost 6-percent decline over fourth quarter volume. Diminished volume led to a 73-basis point increase in vacancy from the prior quarter to 5.93 percent. Yet, O Hare s vacancy rate continues to significantly outperform the Chicago Metropolitan rate of 7.12 percent. The largest lease of the first quarter was PGL s 93,380-square-foot new commitment at 1201 Kirk Street in Elk Grove Village with Prologis. In Itasca, IRSG signed a short-term lease for 55,484 square feet at Hamilton Parkway with James Campbell Company. Morgan Stanley secured two separate lease commitments with the Hudson Group in Elk Grove Village for a total of 72,000 square feet. The larger of the two leases was for 47,652 square feet at 2447 E. Higgins Road, and the second facility at 2445 E. Higgins Road is just under 24,000 square feet. Sale No notable large Class A single-asset trades occurred in the O Hare market in the first quarter; however, as part of a 184-building national transaction, DRA Advisors acquired, from Cabot Properties Inc., three were O Hare assets: Gerry Drive, Wood Dale (totaling 61,000 square feet), 2500 E. Devon Avenue, Elk Grove Village (totaling 68,0 square feet) and 800 W. Thorndale Avenue, Itasca (totaling 64,800 square feet). Fanmar Incorporated acquired a 55,000-square-foot masonry building at 1-1 Greenleaf Avenue in Elk Grove Village for $2.35 million from MS International. Fanmar will be relocating from Bedford Park. Brennan Investment Group LLC negotiated a sale/leaseback with National Metal Fabricators. The building measured 60,600 square feet and sold for $1,500,000. Development Seefried Industrial Properties Inc., in partnership with Crow Holdings, acquired two buildings for redevelopment from ML Realty Partners at 2080 and Lunt Avenue in Elk Grove Village. They intend to redevelop the two existing structures totaling 221,120 square feet with a new 107,000-square-foot rear load facility slated to deliver in late In the Northwest Point Business Park, right off the Jane Addams highway in Elk Grove Village, the 175,982-square-foot headquarters for Mitsubishi MC Machinery is scheduled to deliver in the second quarter. At 350 York Road in Bensenville, Liberty Property Trust is currently making site improvements with plans to go vertical on a 95,962-square-foot speculative building this spring. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Seefried Industrial Properties Inc./Crow Holdings ML Realty Partners 2080 & Lunt Avenue DRA Advisors Cabot Properties, Inc. 3 building Portfolio Elk Grove Village, Itasca & Wood Dale Elk Grove Village 221,120 1/2017 $ ,619 2/2017 $54.16 Brennan Investment Group LLC National Metal Fabricators 25 Greenleaf Avenue Elk Grove Village 60,600 2/2017 $24.75 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size PGL New Lease 1201 Kirk Street Elk Grove Village 93,380 IRSG New Lease Hamilton Parkway Itasca 55,484 The Hudson Group New Lease 2445 E Higgins Road Elk Grove Village 47,652 20

21 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Packaging Food Air Freight Submarket Statistics Property Property type type Q1 Q4 total total net net total net net Average direct Under inventory vacancy availability direct asking asking rent construction completions rent (PSF) Warehouse & distribution 56,004, % 7.9% -9,389-9,389 $ ,4 428,000 Manufacturing 37,784, % 6.1% 54,830 54,830 $ Special Purpose 29, % 0.0% 0 0 $ s 93,818, % 7.2% -344, ,559 $ ,4 428,000 21

22 Chicago Industrial Submarket Report South Suburbs Key Market Indicators Supply Demand Pricing inventory 84,668,564 Ý vacancy (%) 6.4% Ý availability (%) 7.4% Þ net -335,4 Þ net -335,4 Þ Average rental rate ($ psf) $3.64 Þ 12-mo. dollar change -$1.08 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity Manufacturing users drove demand this quarter, accounting for 53 percent of the 344,6 square feet of new leasing activity a modest improvement from the 328,495 square feet leased in quarter four of last year. Despite the uptick in leasing activity, a number of second-generation spaces returned to the market, resulting in a figure of negative 355,4 square feet net the South Suburbs second consecutive quarter in negative territory. The largest lease signed during the quarter was a renewal of 193,915 square feet by Kuehne + Nagel, Inc. at S. Pulaski Road in Alsip. The largest new lease procured was by Helm Group, which signed a long-term lease with ML Realty Partners on an 86,268-square-foot manufacturing facility at 7400 W. 100th Place, Bridgeview. Asking rents continue to decline, falling to $3.64 per square foot net, a drop of 12 cents from the previous quarter. South Suburbs vacancy rates also trended upward by 40 basis points to 6.44 percent. Although vacancy rates rose, it is still significantly better than one year ago when 7.65 percent was reported vacant a dramatic year-over-year decline of 121 basis points. Sale Manufacturing buildings also attracted the greatest investor interest this quarter, as 306,557 square feet of the 525,513 square feet sold during the first quarter was in manufacturing facilities. Chicago Pallet Service acquired a 116,531-square-foot manufacturing plant at 5133 W. 66th Street, Bedford Park for $22.00 per square foot. The South Suburbs also attracted investment sale activity. The Cabot Properties, Inc. large portfolio sale to DRA Advisors included S. Central Avenue, Alsip. The 263,840-square-foot facility traded at $44.53 per square foot. Development There were no new industrial deliveries for the third consecutive quarter. Development activity is limited in the South Suburbs, with the majority of deliveries being of a build-to-suit nature. With that said, one build-to-suit project is nearing completion: Valley View Industries is wrapping up work on a 70,000-square-foot manufacturing plant in Crestwood. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF DRA Advisors Cabot Properties, Inc S Central Avenue Alsip 263,840 2/2017 $54.16 Chicago Pallet Service, Inc. Lackey LLC 5133 W 66th Street Bedford Park 116,531 1/2017 $22.00 PBE Jobbers TAMKO Roofing Products, Inc W 60th Place Summit 62,000 3/2017 $17.74 Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Kuehne + Nagel, Inc. Renewal S Pulaski Road Alsip 193,915 Helm Group New Lease 7400 W 100th Place Bridgeview 86,268 Innovative Logistics Group LLC New Lease 480 E Lincoln Highway Chicago Heights 72,712 22

23 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Assembly Auto Plastics Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 40,186, % 9.1% -495, ,740 $ Manufacturing 43,314, % 6.1% 160, ,346 $ ,000 0 Special Purpose 1,167, % 0.0% 0 0 $ s 84,668, % 7.4% -335,4-335,4 $ ,

24 Chicago Industrial Submarket Report Southeast Wisconsin Key Market Indicators Supply Demand Pricing inventory 53,915,540 Ý vacancy (%) 5.5% Ý availability (%) 5.6% Ý net -341,925 Þ net -341,925 Þ Average rental rate ($ psf) $4.18 Þ 12-mo. dollar change -$0.23 Þ Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Lease activity The largest lease announcement in the first quarter in Southeast Wisconsin was Johnson-Diversey s agreement to renew 551,806 square feet with CenterPoint Properties at 1 Renaissance Boulevard in Racine. The cleaning and hygiene products firm has occupied the building since it was built in In Pleasant Prairie, CenterPoint Properties also secured Gold Standard Baking, a maker of frozen laminated dough products in a long-term lease for a recently completed 200,696-squarefoot speculative building at 104 th Avenue. The Chicago-based Gold Standard s facility will represent a $42 million investment. In Mount Pleasant, Goodwill announced plans to occupy a 132,000-square-foot speculative building at 100 Land & Lakes Drive, where they intend to expand up to 247,600 square feet. Zilber will purchase the building from the original developer, Land & Lakes, and construct 116,000 square feet of expansion space this spring. Sale In the Park Business Park, Mount Pleasant InSinkErator purchased an 11.6-acre site for $2.7 million with the intention to develop an 85,000-square-foot headquarters facility. Average Rental Rate The largest sale posted in the first quarter was LiftPro s purchase of a 25,689-square-foot building at th Street in Kenosha. The service and lift truck rental firm was the prior tenant in the building. In Sturtevant, Robert Gleason acquired from Wayne Fuller a 15,000-squarefoot building at S. Sylvania Avenue for $1.05 million. Development First Industrial Realty Trust s second 602,000-square-foot speculative project, which commenced construction in fall 2016, successfully leased out 300,000 square feet to Madden. The 3PL will take possession of the building located at th Street, Somers in June. CenterPoint Properties announced plans that it will build a 417,400-square-foot speculative project at th Avenue, Pleasant Prairie. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Liftpro Aerial Lift Rental Undisclosed th Street Kenosha 25,689 2/2017 N/A Private Individual Private Individual S Sylvania Avenue Recent Lease Comparables (sorted by square feet) Sturtevant 14,800 3/20107 $70.98 Tenant Type Location City Size Diversey, Inc. Renewal 1 Renaissance Blvd Sturtevant 551,806 Gold Standard Baking New Lease 104 th Avenue Pleasant Prairie 200,696 Cree, Inc. New Lease th Street Pleasant Prairie 148,146 24

25 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage West Cook 2 I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Consumer Products Food Packaging E-Commerce Submarket Statistics Property type inventory vacancy availability Q1 total net total net Average direct asking rent (PSF) Under construction completions Warehouse & distribution 29,325,6 7.7% 7.7% -62,255-62,255 $4.55 1,702, ,607 Manufacturing 24,546, % 3.2% -279, ,670 $ ,000 0 Special Purpose 43, % 0.0% 0 0 $ s 53,915, % 5.6% -341, ,925 $4.18 1,772, ,607 25

26 Chicago Industrial Submarket Report West Cook County Key Market Indicators Supply Demand Pricing inventory 93,440,007 Ý vacancy (%) 9.9% Þ availability (%) 11.2% Þ net 376,911 Ý net 376,911 Ý Average rental rate ($ psf) $5.49 Ý 12-mo. dollar change $0.20 Ý Arrows represent change from prior quarter Net New Supply, Net Absorption, Vacancy Average Rental Rate Lease activity Two renewals signed in the first quarter marked the most significant leasing activity in West Cook County. CenterPoint Properties was successful in renewing Inventory Liquidators Corporation for their full 531,000-squarefoot building at 8999 Palmer Street in River Grove, while in Melrose Park, Neil Cartage renewed 95,413 square feet with Transwestern Investment Group at 5300 Proviso Drive. This building is immediately adjacent to the UP Global II Terminal. The largest new lease signed during the quarter was Metro Air Service s commitment for 72,000 square feet with Hamilton Partners at Irving Park Road in Franklin Park. Additionally, International Airport Centers secured a lease for 65,609 square feet with pharmaceutical company Amerisource Bergen at the 6800 Santa Fe Drive campus in Hodgkins. Sale The largest building to trade in the first quarter in the West Cook market was a manufacturing sale-leaseback between Segerdahl Corporation and Angelo Gordon & Company. The 192,500-square-foot building at 10 S. 25th Avenue traded for $10.1 million. As part of this transaction, Angelo Gordon & Company also acquired Segerdahl Corporation s 245,000-square-foot building in Wheeling. In Melrose Park, GLP acquired a Class A 1,331-square-foot multi-tenant building from Principal Investors for $10.7 million. The tenants range from 22,000 to 53,000 square feet, and the cap rate was 6.48 percent. In Franklin Park, Clarius Partners acquired a 154,000-square-foot obsolete manufacturing building at 9300 King Street for redevelopment. The seller was Brunner & Lay, and the price was $1.35 million, which equates to $4.93 per land foot. The site can accommodate up to a 100,000-square-foot facility. Development Seefried Industrial Properties, in a joint venture with Cabot Properties, Inc., delivered a 283,100-square-foot speculative facility this quarter at 7225 Santa Fe Drive, Hodgkins. The facility boasts 32 clearance, with 36 dock doors and 35 trailer spots. Furthermore, Bridge Development Partners broke ground on two speculative buildings in Schiller Park of 75,800 square feet and 84,700 square feet, respectively, which should come online by the end of the third quarter. Looking forward, the former U.S. Smokeless Tobacco Company plant will be coming to market for redevelopment as Altria decommissions the facility. Located just west of the I-2 Tollway, the 523,000-square-foot, 1970s vintage plant at Copenhagen Court in Franklin Park is a acre site served by CP Rail. West Cook County s first quarter vacancy rate measured 9.87 percent, a 13-basis point improvement from the previous quarter. This was partially attributed to the Dr. Pepper space totaling 559,100 square feet and located at 400 Wolf Road, Northlake being withdrawn from the market. Owner CenterPoint Properties has decided to demolish a portion of the building with plans for future development on the site. Recent Sales Comparables (sorted by square feet) Buyer Seller Location City Size Date Price PSF Angelo, Gordon & Company Segerdahl Corporation 10 S 25th Avenue Broadview 192,495 2/2017 $52.59 Union Pacific Railroad M Holland Company 21 W Lake Street Northlake 166,000 1/2017 $.76 YPV Distribution First Industrial Realty Trust, Inc th Street LaGrange Park 156,621 1/2017 $ Recent Lease Comparables (sorted by square feet) Tenant Type Location City Size Inventory Liquidators Corporation Renewal 8999 Palmer Street River Grove 531,227 Segerdahl Corporation Sale/Leaseback 10 S 25th Avenue Broadview 192,495 Neil Cartage Renewal 5300 Proviso Drive Melrose Park 95,413

27 Chicago Submarket Map Southwest Wisconsin Walworth Southeast Wisconsin 43 Rockford McHenry Lake County North Kane Northwest Cook North Cook O Hare North Chicago I- / Dekalb Fox Valley North Dupage 2 West Cook I- Corridor South Chicago 2 I-55 Corridor 355 South Suburbs I-80 West I-80 Corridor 57 Northwest Indiana I-57 Corridor Submarket drivers Manufacturing Local Distribution Printers Air Freight Food Submarket Statistics Property Property type type inventory vacancy availability Q1 Q4 total total net net total net net Average direct Under direct asking asking rent construction rent (PSF) completions Warehouse & distribution 43,524, % 17.1% 323, ,180 $ , ,123 Manufacturing 49,8, % 6.0% 53,731 53,731 $ Special Purpose 24, % 0.0% 0 0 $ s 93,440, % 11.2% 376, ,911 $ , ,123 27

28 Chicago Q Industrial Statistics Inventory (s.f.) Quarterly total net (s.f.) total net (s.f.) total net (% of stock) vacancy (%) availability (%) Average total asking rent ($ p.s.f.) Quarterly completions (s.f.) completions (s.f.) Under construction (s.f.) Chicago s Warehouse & Distribution 610,107,208 4,020,983 4,020, % 8.2% 9.5% $4.80 5,415,677 5,415,677 17,566,485 Manufacturing 533,099, ,9 819,9 0.2% 5.9% 7.0% $ , ,292 1,112,431 Special Purpose 2,322,157 11,500 11, % 7.2% 7.2% $ ,500 11,500 0 s 1,145,528,992 4,852,2 4,852,2 0.4% 7.12% 8.30% $4.83 5,760,469 5,760,469 18,678,916 Submarkets Fox Valley Warehouse & Distribution 18,357,921-5,165-5, % 10.7% 10.8% $ ,0 308,0 137,500 Manufacturing 17,877,467 74,092 74, % 2.7% 7.6% $ Special Purpose % 0.0% 0.0% $ s 36,235,3 68,927 68, % 6.8% 9.2% $ ,0 308,0 137,500 I- Corridor Warehouse & Distribution 14,6,619-15,500-15, % 4.0% 6.8% $ Manufacturing 18,166, , , % 5.5% 5.5% $ Special Purpose 34, % 0.0% 0.0% $ s 32,895, , , % 4.8% 6.1% $ I-55 Corridor Warehouse & Distribution 71,342,275 4,873 4, % 9.1% 11.6% $ , ,600 1,605,055 Manufacturing 12,245,022-1,798-1, % 4.8% 8.1% $ Special Purpose 54, % 26.2% 26.2% $ s 83,641, , , % 8.5% 11.1% $ , ,600 1,605,055 I-57 Corridor Warehouse & Distribution 20,687,475-1,369-1, % 7.1% 11.4% $ ,205,165 Manufacturing 9,6, , , % 2.2% 2.2% $ Special Purpose 275, % 55.3% 55.3% $ s 30,602,7 112, , % 6.0% 8.9% $ ,205,165 I-80 Corridor Warehouse & Distribution 64,221,816 2,171,164 2,171, % 4.9% 5.0% $3.81 3,033,083 3,033,083 8,057,799 Manufacturing 16,024, , , % 9.2% 9.2% $ , , ,996 Special Purpose 146,570 11,500 11, % 0.0% 0.0% $ ,500 11,500 0 s 80,2,473 2,412,616 2,412, % 5.7% 5.8% $3.87 3,247,5 3,247,5 8,313,795 I- Corridor Warehouse & Distribution 38,587, , , % 6.4% 7.1% $ ,720 Manufacturing 22,851,861-77,972-77, % 4.9% 5.8% $ Special Purpose 124, % 0.0% 0.0% $ s 61,563, , , % 5.8% 6.6% $ ,720 Lake County Warehouse & Distribution 36,044,741 1,403 1, % 10.4% 12.1% $ ,758 Manufacturing 31,274, % 4.7% 5.4% $6. 40,000 40, ,591 Special Purpose 113, % 0.0% 0.0% $ s 67,432,685 1,984 1, % 7.8% 9.0% $ ,000 40, ,349 McHenry County Warehouse & Distribution 10,748, , , % 1.1% 1.1% $ , ,441 0 Manufacturing 18,858, , , % 15.7% 15.7% $ Special Purpose % 0.0% 0.0% $ s 29,607,004 1,007,959 1,007, % 10.4% 10.4% $ , ,441 0

29 Inventory (s.f.) Quarterly total net (s.f.) total net (s.f.) total net (% of stock) vacancy (%) availability (%) Average total asking rent ($ p.s.f.) Quarterly completions (s.f.) completions (s.f.) Under construction (s.f.) North Chicago Warehouse & Distribution 18,742, , , % 6.7% 6.8% $ ,700 40,700 0 Manufacturing 41,012, , , % 6.5% 7.4% $ Special Purpose 25, % 0.0% 0.0% $ s 59,780,523-20,743-20, % 6.5% 7.2% $7. 40,700 40,700 0 North Cook County Warehouse & Distribution 15,628, , , % 6.4% 7.9% $ , ,650 0 Manufacturing 32,585,433-4,387-4, % 4.3% 4.6% $ Special Purpose 73, % 0.0% 0.0% $ s 48,287, ,6 300,6 0.6% 5.0% 5.6% $ , ,650 0 North DuPage County Warehouse & Distribution 47,470,7 221, , % 7.3% 8.7% $ ,033,003 Manufacturing 33,118,621 73,771 73, % 3.2% 5.2% $ ,080 67,080 0 Special Purpose 12, % 0.0% 0.0% $ s 80,602, , , % 5.6% 7.3% $ ,080 67,080 1,033,003 North Kane County Warehouse & Distribution 16,3, , , % 16.3% 16.5% $ , ,403 0 Manufacturing 15,007,353 21,924 21, % 4.0% 4.0% $ ,400 23,400 0 Special Purpose 13, % 0.0% 0.0% $ s 31,413,615 2,910 2, % 10.4% 10.5% $ , ,803 0 Northwest Cook County Warehouse & Distribution 13,244, , , % 8.9% 9.3% $ ,297 Manufacturing 13,134, , , % 8.1% 16.5% $ ,000 Special Purpose 80, % 0.0% 0.0% $ s 26,459, , , % 8.4% 12.8% $ ,297 Northwest Indiana Warehouse & Distribution 9,707,5-102, , % 13.4% 14.5% $ , ,800 49,600 Manufacturing 21,269, , , % 7.5% 7.5% $ Special Purpose % 0.0% 0.0% $ s 30,977, , , % 9.4% 9.7% $ , ,800 49,600 O'Hare Warehouse & Distribution 56,004,444-9,389-9, % 6.3% 7.9% $ , , ,4 Manufacturing 37,784,802 54,830 54, % 5.3% 6.1% $ Special Purpose 29, % 0.0% 0.0% $ s 93,818, , , % 5.9% 7.2% $ , , ,4 Rockford Warehouse & Distribution 10,320, , , % 12.5% 12.5% $ Manufacturing 13,617,911-40,6-40,6-0.3% 11.6% 11.6% $ ,844 Special Purpose % 0.0% 0.0% $ s 23,938, ,6-175,6-0.7% 12.0% 12.0% $ ,844 South Chicago Warehouse & Distribution 34,873, , , % 7.0% 7.9% $ , , ,043 Manufacturing 60,879, ,3-423,3-0.7% 7.1% 8.5% $ Special Purpose 103, % 0.0% 0.0% $ s 95,857, , , % 7.1% 8.3% $ , , ,043 South Suburbs Warehouse & Distribution 40,186, , , % 7.7% 9.1% $ Manufacturing 43,314, , , % 5.5% 6.1% $ ,000 Special Purpose 1,167, % 0.0% 0.0% $ s 84,668, ,4-335,4-0.4% 6.4% 7.4% $ ,000 Southeast Wisconsin Warehouse & Distribution 29,325,6-62,255-62, % 7.7% 7.7% $ , ,607 1,702,348 Manufacturing 24,546, , , % 2.9% 3.2% $ ,000 Special Purpose 43, % 0.0% 0.0% $ s 53,915, , , % 5.5% 5.6% $ , ,607 1,772,348 West Cook County Warehouse & Distribution 43,524, , , % 15.4% 17.1% $ , , ,253 Manufacturing 49,8,864 53,731 53, % 5.1% 6.0% $ Special Purpose 24, % 0.0% 0.0% $ s 93,440, , , % 9.9% 11.2% $ , , ,253 George Cutro Research Director Chad Buch Senior Research Analyst Paul Marsh Research Analyst tel tel tel George.Cutro@am.jll.com Chad.Buch@am.jll.com Paul.Marsh@am.jll.com 2017 Jones Lang LaSalle IP, Inc. All rights reserved W Higgins Rd Suite 750 Chicago, IL 60631

30 Chicago Q Development Industrial development Dashboard This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f. 5,760,469 delivered (s.f.) Completions in-depth leased at delivery (%) 62.9% speculative at delivery (s.f.) 3,282,776 BTS at delivery (s.f.) 2,477,693 Owner-User at delivery (s.f.) 757,733 # of properties delivered 22 Average rental rate - 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 New deliveries Historical deliveries Top 5 projects delivered to date Building Submarket Owner/developer RBA (s.f.) Spec or BTS Delivery date Leased at delivery (%) Mars/Wrigley I-80 Corridor CenterPoint Properties 1,3,200 BTS Q % CIC 752 I-80 Corridor CenterPoint Properties 751,769 Speculative Q % Channahon Corporate Center Bldg A I-80 Corridor IDI Gazeley 749,554 Speculative Q % Aeroterm ORD Spec Phase 1 O'Hare Aeroterm 428,000 Speculative Q % Suncast Expansion Fox Valley Suncast 308,0 BTS Q % Under construction 17,295,283 18,000,000 16,000,000 BTS Speculative Under construction (s.f.) 14,000,000 12,000,000 Under construction in-depth pre-leased (%) 56.4% speculative under construction (s.f.) 6,558,993 BTS under construction (s.f.) 10,736,2 Owner-user under construction (s.f.) - # of properties UC 46 Average rental rate - 10,000,000 8,000,000 6,000,000 4,000,000 2,000, Upcoming deliveries by year (s.f., excludes completions) Top 5 projects currently under construction Building Submarket Owner/developer RBA (s.f.) Spec or BTS Delivery date Pre-leased (%) General Mills I-80 Corridor General Mills 1,500,000 BTS Q % IKEA 2 I-80 Corridor IKEA 1,250,000 BTS % Uline BTS 1 Southeast Wisconsin Uline, Inc. 1,100,000 BTS % Core5 DHL I-80 Corridor DHL/Core5 1,026,000 Speculative Q % Georgia Pacific BTS I-57 Corridor Venture One Real Estate 1,000,560 BTS Q % Source: JLL Research Jones Lang LaSalle IP, Inc. All rights reserved.

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