Industrial Outlook. Exceeding (and nearing) last cycle. United States Q4 2014

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1 Industrial United States Q Exceeding (and nearing) last cycle Steadily rising tenant demand in the wake of generally measured construction deliveries caused U.S. to dip 80 basis points lower than 2007 s rate, while warehouse asking rents are nearing last cycle s high. Landlords are enjoying rent growth based on intensifying market fundamentals. Further rent increases are expected in 2015.

2 Although construction deliveries increased in 2014, they were still below last cycle s annual average.

3 In this report This report provides an overview of supply and demand conditions, as well as detailed and brief analyses of major industrial markets in the United States. Our professional research department is dedicated to producing information and insights that help our clients understand dynamic real estate market trends and guide critical decision making for investors and occupiers. Overview of Jones Lang LaSalle s logistics and industrial services 4 United States 6 United States industrial market 7 United States industrial property clock 9 United States industrial weather map 10 United States industrial rankings 11 Atlanta 13 Baltimore 14 Boston 15 Broward County / Ft. Lauderdale 16 Central New Jersey 17 Central Valley, California 18 Charlotte 19 Chicago 20 Cincinnati 21 Cleveland 22 Columbus 23 Dallas / Fort Worth 24 Denver 25 Detroit 26 East Bay / Oakland 27 Greensboro / Winston-Salem 28 Hampton Roads 29 Houston 30 Indianapolis 31 Inland Empire 32 Jacksonville 33 Kansas City 34 Las Vegas 35 Long Island 36 Los Angeles 37 Memphis 38 Miami-Dade 39 Milwaukee 40 Minneapolis / St. Paul 41 Nashville 42 North Bay, California 43 Northern New Jersey 44 Orange County 45 Orlando 46 Palm Beach 47 Philadelphia / Harrisburg 48 Phoenix 49 Pittsburgh 50 Portland 51 Reno / Sparks 52 Richmond 53 Sacramento 54 Salt Lake City 55 San Antonio 56 San Diego 57 Seattle-Bellevue 58 South Bay / Silicon Valley 59 St. Louis 60 Tampa 61 Washington, DC 62 About JLL 64 3 JLL United States Industrial Q4 2014

4 Overview of Jones Lang LaSalle s logistics and industrial services From manufacturing plants to around-the-clock distribution centers, industrial real estate is the backbone of the global economy. Today s financial and competitive pressures demand that your industrial property whether leased or owned delivers maximum flexibility and efficiency. Our logistics and industrial professionals understand the current business environment and offer innovative, profitable strategies for supply chain optimization, site selection, sales, leasing, acquisition, financing, construction, project management, and property and facility management of industrial properties and portfolios. Our experts know all of the issues that impact your industrial real estate decisions and apply proven best practices to address such challenges as skyrocketing energy, transportation, and labor costs; heightened security needs; tough new environmental requirements; and profound s in global supply chains. Because of our depth of in-house talent, we can quickly assemble just the right team for your particular need. Regardless of the size and scope of the assignment, you ll have a single point of contact who manages all service delivery and is responsible for producing the measurable results that are agreed to up front. More than 271 JLL professionals cover the top 50 industrial markets in the United States and 410 more are at work in major industrial markets around the globe. In 2013, JLL logistics and industrial services completed more than 2,724 transactions comprising over 177 million square feet of space at a value of more than $5.0 billion. San Francisco Bay Area Sacramento Los Angeles Orange County Portland Stockton San Diego Seattle Reno Las Vegas Inland Empire Phoenix Salt Lake City Denver Kansas City Dallas/Forth Worth Austin San Antonio Minneapolis Des Moines Houston St. Louis Milwaukee Chicago Indianapolis Memphis Cincinnati Detroit Nashville Columbus Cleveland Atlanta Tampa Pittsburgh Charleston Jacksonville Orlando Miami Boston Philadelphia New Jersey Baltimore/DC Tysons Richmond Hampton Roads Raleigh Charlotte West Palm Beach Hartford Stamford Long Island 4 JLL United States Industrial Q4 2014

5 United States 5 JLL United States Industrial Q4 2014

6 United States United States Fourth quarter s rate was 6.9 percent, down 100 basis points from one ago, while net was positive for the 19th consecutive quarter with 61.2 million square feet. net for the year was million square feet, up 30.0 percent from 2013; an increase stemming from active leasing across all size segments, design-build projects coming on line and new speculative facilities finding tenants. Speculative construction remains widespread across markets, and new groundbreakings are not showing any signs of letting up when surveying the country. Speculative reached 92.3 million square feet by the end of the fourth quarter, up 12.3 percent from three months ago, and, as whole, remains generally paced this cycle. Although a handful of markets run the risk of over-delivering in some size segments, most of the United States is retaining a balance. The Southeast, which previously lagged the country in its recovery, had a big year with annual net of 47.9 million square feet, up a resounding 85.0 percent from Much of this can be traced to Atlanta where annual figures were more than double 2013 s total, is at a rate reminiscent of the late 1990s and construction activity is only second to the Inland Empire. Average rents still have room to grow, and gains are expected in the year ahead. Key takeaways stock availability Q net Q avg. rent Vacancy is now in the high 6s, and is expected to tighten another basis points in net totaled million square feet, up 30.0 percent from of 50 U.S. markets had positive annual net gains. Forty-two of them experienced year-over-year asking rent growth. Construction activity totaled million square feet by year-end; 39.9 percent of it is preleased. Atlanta is now second in the nation in construction activity. Industrial 12,003,018, % 10.1% 61,220,325 $ % 4.8% Leased Industrial 8,069,934, % 12.7% 55,500,766 $ % 4.7% Warehouse & Distribution 6,200,104, % 13.0% 51,669,000 $ % 4.5% Manufacturing 1,701,744, % 13.1% 5,166,518 $ % 2.3% 6 JLL United States Industrial Q4 2014

7 United States industrial market Absorption hits a 5-year high Industrial markets nationwide have been tightening for nearly five years, demonstrated by 19 consecutive quarters of positive net. This year marked a five-year high, with million square feet, up 30.0 percent from last year. Steadily rising tenant demand, in the wake of generally measured construction deliveries, caused the U.S. rate to dip to 6.9 percent, while warehouse rents increased in most markets. Exceeding (and nearing) last cycle s numbers JLL originally estimated net to finish the year with million square feet, or a conservative 9.8 percent annual uptick. However, many of industrial s real estate drivers namely, strengthening cargo volumes, GDP gains, increasing retail sales and a gradually improving housing market drove the segment to another hallmark year of this current cycle. The rate was 80 basis points lower than last cycle s 2007 low, while rents continue to follow suit. Average asking rents were up 4.5 percent year-over-year, while the current average ($4.62 NNN) is just 1.7 percent off from 2007 s high point. Many of the nation s logistics corridors such as Dallas/Fort Worth, Philadelphia and Atlanta report warehouse leasing volume is now exceeding (if not nearing) peak volumes, which is good news for landlords. More rent growth is expected in 2015, based on increasing tenant demand and developers generally pacing new supply additions with active space requirements. However, construction is ever-increasing: New deliveries totaled million square feet in 2014, up 56.5 percent from Vacancy is 80 bps lower than 2007 s rate 2013, and may reach million square feet in These totals are still below last cycle s annual average of million square feet, however. Too much, too soon? Hit the pause button. Some markets are beginning to show signs of speculative overbuilding, yet the supply-demand imbalance varies case-by-case. In the Inland Empire, for instance which led the nation in construction activity with 16.9 million square feet (11.9 million square feet is spec) the 600,000- to 900,000-square-foot size segment has seen tenant activity slow a bit and new supply deliver without tenants in place. Dallas / Fort Worth third in the U.S. with 15.9 million square feet (12.7 million is spec) has a similar scenario in spaces in excess of 500,000 square feet. The consensus among our market experts, however, is developers are more disciplined this cycle. If a project delivers vacant, then there will be a pullback in future groundbreakings until demand catches up. This was the case in New Jersey by year-end. Overall deliveries are below prior peak levels but they are catching up millions of square feet m.s.f. was last cycle s annual average 142 m.s.f. 171 m.s.f. millions of square feet Net Vacancy rate (126.4) % 10% 8% 6% 4% 2% 0% f Source: JLL Research More demand is good for future net gains Tenant requirements for space in excess of 100,000 square feet totaled million square feet across the nation, up 22.4 percent from one year ago. Retail and 3PL & transport companies lead all active industries, which is in line with today s climate of increasing retail sales and higher transportation costs. Source: JLL Research 7 JLL United States Industrial Q4 2014

8 Fifty-five percent of demand was for spaces over 500,000 square feet, or the big box segment, which outpaces existing and under construction supply in the following markets: St. Louis, Kanas City, Boston, Northern California, Phoenix, Atlanta, Chicago, Philadelphia / Harrisburg and New Jersey. Expect activity whether from design-builds or new spec product to increase in these markets (or to spillover) into nearby secondary corridors. Pronounced gains will eventually follow as demand is satisfied and tenants take occupancy. The mega box category, or space in excess of 1.0 million square feet is also highly active with 60 requirements versus 22 available spaces; a nearly 3:1 margin that is influencing construction trends. Leasing market conditions were very heatlhy in 2014, and, for, another basis points of tightening is expected in There remains a window between now and then for demand to continue to outstrip new supply, and this will benefit rental rates, which may have annual growth of 3.0 percent. Additional trends to watch include: How speculative is received, developers and investors focus on rail-served markets, tightening fundaments in secondary markets, rent growth (especially in the Southeast) and a demand push for smaller e-commercerelated delivery centers to support same-day package delivery. Some highlights from around the country: Atlanta: Vacancy declined to its lowest rate in nearly 14 years, while annual net hit a level not seen since Chicago: Vacancy is near an all-time low, and big box users are very specific on their site requirements expect more build-to-suit activity. Dallas / Fort Worth: New completions outpaced demand in the quarter, causing the rate to move up slightly from its historic low. Inland Empire: Demand continues to keep pace with supply despite high levels of new construction. Indianapolis: Look for developers to curtail future speculative groundbreakings, giving the market time to absorb what has been delivered over the last two years. New Jersey: Annual net was the strongest in over a decade. Oakland / East Bay: Developers are ramping up on new projects at the fastest pace in nearly 20 years. Philadelphia / Harrisburg: Speculative construction is finally picking up pace as the market constricts to levels not seen since Markets with the... lowest total Los Angeles 3.0% Denver 3.2% Long Island 3.7% Orange County 4.3% Seattle 4.4% Portland 4.8% Markets with the... highest total Boston 12.1% Phoenix 11.5% Memphis 11.1% Charlotte 10.8% Sacramento 9.8% Jacksonville 9.6% Markets with the... highest 2014 net Inland Empire 21.5M Atlanta 16.3M Los Angeles 15.1M Dallas / Fort Worth 12.9M Chicago 11.3M Houston 8.8M 8 JLL United States Industrial Q4 2014

9 United States industrial property clock Dallas / Fort Worth, Oakland / East Bay Inland Empire, Los Angeles, Silicon Valley / South Bay Peaking market Falling market Central New Jersey, Central Valley (CA), Chicago, Denver, Philadelphia / Harrisburg, Sacramento, Salt Lake City Atlanta, Baltimore, Houston, Indianapolis, Long Island, Minneapolis / St. Paul, North Bay (CA), Northern New Jersey, Orange County(CA), Reno, San Diego, Seattle, St. Louis, United States Charlotte, Kansas City, Memphis, Nashville, Portland, Richmond, Washington DC Boston, Cincinnati, Cleveland, Columbus, Greensboro / Winston-Salem, Hampton Roads, Las Vegas, Miami-Dade, Milwaukee, Orlando, Phoenix, Pittsburgh, Tampa Bay Broward County / Fort Lauderdale, Detroit, San Antonio Rising market Bottoming market Jacksonville, Palm Beach Moving clockwise Holding steady Moving counter-clockwise Reading the clock The JLL industrial property clock illustrates where each market sits within its real estate cycle. Markets generally move clockwise around the dial, with those markets on the left side generally facing more landlord-favorable characteristics, whereas those on the right experience generally tenant-favorable conditions. At the end of the fourth quarter of 2014, the U.S. aggregate position on the ascended rose to the 8:30 mark, in the rising market quadrant. All markets are rising, meaning landlords are increasingly gaining leverage across the country. Rent growth is prevalent and speculative construction is becoming more widespread in terms of both geography and size segments. Rents in the Class A sector have firmed and are on the rise in nearly all U.S. markets, while B product is recording gains, notably in the nation s core logistics hubs. As the big box logistics sector in primary and secondary markets continues to tighten, we continue to see some spillover into demand and pricing for quality Class B product as long as speculative completions remain measured we expect this dynamic to increase. Expect most markets to continue their progressive clockwise moves while the overall U.S. position gradually climbs. It is feasible the U.S. will enter the peaking market quadrant in the second half of JLL United States Industrial Q4 2014

10 United States industrial weather map Rental conditions North Bay Seattle Los Angeles Reno / Sparks Sacramento Oakland / East Bay Central Valley Silicon Valley / South Bay Orange County Portland Inland Empire San Diego Las Vegas Phoenix Salt Lake City Denver San Antonio Boston Milwaukee New York Long Island Northern New Jersey Philadelphia/ Minneapolis / St. Paul Detroit Harrisburg Central New Jersey Cleveland Baltimore Pittsburgh Chicago Columbus Washington, DC Hampton Roads Kansas City Dallas / Fort Worth Houston St. Louis Memphis Indianapolis Nashville Cincinnati / Dayton Richmond Greensboro / Winston-Salem Atlanta Tampa Bay Charlotte Jacksonville Orlando Palm Beach Broward County Miami-Dade 0 0 Rents growing (greater than 1.5% growth during quarter) Rents stagnant (between -0.5% and 1.5% during quarter) Rents falling (greater than 0.5% decline during quarter) Average rental % year over year* Average rental % quarter over quarter Please note: weather imagery indicates only the direction of movement of rental prices in a particular market and is not designed to indicate favorable or non-favorable conditions for a specific leasing perspective Source: JLL Research 10 JLL United States Industrial Q4 2014

11 United States industrial rankings inventory (millions of s.f.) Chicago Philadelphia / Harrisburg Los Angeles Dallas / Fort Worth Atlanta Inland Empire Detroit Houston Northern New Jersey Cleveland Kansas City Seattle Orange County (California) Indianapolis Phoenix Central New Jersey Cincinnati / Dayton Memphis Charlotte St. Louis Columbus Greensboro / Winston-Salem Nashville Denver Minneapolis / St. Paul Salt Lake City Milwaukee Portland Baltimore Boston Sacramento Tampa Bay Pittsburgh San Diego Long Island Miami-Dade Oakland / East Bay Central Valley (California) Orlando Washington DC San Antonio Las Vegas Jacksonville Richmond Reno / Sparks Silicon Valley / South Bay Broward County Hampton Roads North Bay (California) Palm Beach ,000 1,200 rates Boston Phoenix Memphis Charlotte Sacramento Jacksonville Baltimore Las Vegas Orlando Washington DC Tampa Bay Atlanta Broward County Philadelphia / Harrisburg Silicon Valley / South Bay Chicago Reno / Sparks Detroit Central New Jersey Pittsburgh Minneapolis / St. Paul Richmond Northern New Jersey North Bay (California) Hampton Roads Nashville Miami-Dade Greensboro / Winston-Salem Central Valley (California) Cleveland San Antonio Indianapolis Milwaukee Kansas City Columbus San Diego Dallas / Fort Worth Palm Beach Oakland / East Bay Cincinnati / Dayton Inland Empire Houston St. Louis Salt Lake City Portland Seattle Orange County (California) Long Island Denver Los Angeles 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 11 JLL United States Industrial Q4 2014

12 Y-O-Y rent s 2014 net (millions of s.f.) Seattle Denver Indianapolis Los Angeles Inland Empire Long Island Reno / Sparks Palm Beach Dallas / Fort Worth San Antonio Portland Central Valley (California) Central New Jersey Boston Oakland / East Bay Northern New Jersey Broward County Orlando Houston Columbus Las Vegas Cincinnati / Dayton Orange County (California) Atlanta Salt Lake City Richmond Nashville Detroit Silicon Valley / South Bay Minneapolis / St. Paul Charlotte Memphis Phoenix Cleveland San Diego Baltimore Pittsburgh Chicago Milwaukee St. Louis Washington DC Kansas City Greensboro / Winston-Salem Jacksonville Philadelphia / Harrisburg Miami-Dade Tampa Bay Sacramento Hampton Roads North Bay (California) -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Inland Empire Atlanta Los Angeles Dallas / Fort Worth Chicago Houston Philadelphia / Harrisburg Phoenix Memphis Tampa Bay Greensboro / Winston-Salem Detroit Central New Jersey Seattle Charlotte Columbus Central Valley (California) Cincinnati / Dayton Oakland / East Bay Kansas City Denver Indianapolis Sacramento St. Louis Baltimore Minneapolis / St. Paul Nashville Cleveland Northern New Jersey Orange County (California) Portland San Diego Reno / Sparks Milwaukee Orlando Broward County Jacksonville Las Vegas Richmond Boston Miami-Dade Silicon Valley / South Bay Washington DC North Bay (California) Long Island Hampton Roads Pittsburgh Palm Beach San Antonio Salt Lake City (3.0) JLL United States Industrial Q4 2014

13 Atlanta Fluctuation in commodity prices Intermodal transportation links e-commerce distribution and air cargo Relatively business-friendly environment New developer influx Availability of entitled land The fourth quarter proved a strong end to Vacancy declined to 8.7 percent, the lowest rate in nearly 14 years. Year-to-date net reached 16.3 million square feet, unseen since 2000, which is equivalent to the new supply currently under construction. Much of the movement seen in the market was in the non big box spaces, sized smaller than 250,000 square feet, because there is a lack of Class A supply in the big box range. In turn, these larger sized tenants are controlling the direction of much of the new supply, planned and under construction, because of the increasing lack of options. Since the beginning of this cycle, rates have dropped by 41.2 percent, compared to the 18.9 percent drop of the previous cycle, and have reached the levels of the late 1990s and early 2000s. The market is moving quickly. For instance, not only did Menlo Logistics sign a lease for 560,000 square feet, the space delivered, and they moved in all in the fourth quarter. This illustrates the fast pace starting to drive the market, especially considering that this was a speculative project. By the end of 2014, quarterly deliveries reached pre-recession levels. The projects currently under construction in the pipeline are proving to meet those same standards, especially those slated for late Of the deliveries to come, 9.6 square feet, or 18 projects, are speculative, representing 58.8 percent of the total. Oversupply does not seem to be a concern as demand appears ahead of deliveries. In the 1990s, new supply each year almost equaled or even surpassed demand; post-recession construction has not yet picked up to demand levels. However, the amount of square footage under construction is now equivalent to 2014 s demand, which bodes well for 2015 s new supply catching up with demand. Tenant requirements and the square footages of the projects in the pipeline are generally of the larger sizes, 250,000 square feet and larger. This trend lends itself toward these larger tenants continuing to inform developers build projects that can accommodate such large requirements. S Fulton Stonewall Tell Rd New lease: 1,200,000 s.f. Tenant: Walmart 2960 Pacific Drive Buyer: Hartz Mountain Industries Seller: Clarion Partners $11.5 M 308,963 s.f. $37 p.s.f. in jobs 5.5 m 0.1% 12.1% 7.2 m.s.f. 6.8 m.s.f. 757 Douglas Hill Road New lease: 913,000 s.f. Tenant: Quaker Sales & Distribution 1600 Distribution Court Buyer: W.A.C. Lighting Seller: Deutsche Bank $7.9 M 258,034 s.f. $31 p.s.f. 201 King Mill Court New lease: 570,586 s.f. Tenant: Goodyear 2800 Vista Ridge Drive Buyer: Publisher Services Seller: Duke Realty $10.5 M 252,092 s.f. $42 p.s.f. stock (%) net construction industrial 511,644, % 11.8% 16,326,200 $ % 5.2% 16,341,200 2,839,387 Leased industrial 346,837, % 15.8% 13,838,502 $ % 4.9% 4,644,700 2,278,762 Warehouse & distribution 321,299, % 15.6% 12,549,373 $ % 4.4% 4,644,700 2,278,762 Manufacturing 25,538, % 18.5% 1,289,129 $ % -0.4% JLL United States Industrial Q4 2014

14 Baltimore Large national users have driven the bulk of activity Strong labor demographics Lack of large blocks of available existing space on the market and limited developable land Strong demand from big box users over the past 18 months helped to drive nearly 3.9 million square feet of positive net over the course of 2014 and over four million square feet of new construction. Demand for flex product across the region remained tepid in the fourth quarter. New construction in the Baltimore/Washington Corridor grabbed the largest two leases of the quarter. An auto parts supplier new to the market took down 126,000 square feet at recently delivered 7462 New Ridge Road and Lindenmyer Munroe preleased 102,000 square feet in Preston Gateway North. Limited existing blocks of Class A space over 100,000 square feet has led users to look toward new product to satisfy their requirements. In the Baltimore/Washington Corridor, the warehouse/distribution market recovered from several large move-outs earlier in the year as the submarket absorbed 95,483 square feet in the fourth quarter, which helped drive down overall to 12.8 percent. Demand from investors remained strong with the sale of 8235 Patuxent Range Road closing during the quarter. The 241,457-square-foot newly constructed Class A building was 79.5 percent leased to Feld Entertainment. Leasing activity dropped significantly in the second half of the year across the Baltimore market, which will likely lead to relatively modest occupancy gains at the beginning of Unlike the past wave of new construction that delivered in 2014, the current construction pipeline is 31.9 preleased, which will give tenants in the market existing opportunities. As for the total industrial market has fallen below 10.0 percent, asking rental rate growth should continue at a healthy pace as dynamics continue to shift in favor of landlords New Ridge Road New lease: 126,000 s.f. Tenant: Confidential 8235 Patuxent Range Road Buyer: Principal Real Estate Investors Seller: Chesapeake RE & Atapco $26.7 M 241,457 s.f. $111 p.s.f. in jobs 2.7 m 2.1% 11.0% 1.7 m.s.f. 1.8 m.s.f. Preston Gateway North New lease: 102,000 s.f. Tenant: Lindenmyer Munroe 9020 Junction Drive Buyer: Terreno Realty Seller: Emory Hill $13.8 M 96,666 s.f. $143 p.s.f Oakland Mills Road New lease: 45,606 s.f. Tenant: Event EQ 6740 Dorsey Road Buyer: DCT Industrial Trust Seller: Finmarc Management $12.5 M 120,186 s.f. $104 p.s.f. stock (%) net construction industrial 153,108, % 14.2% 3,177,532 $ % 2.0% 1,905,185 4,031,307 Leased industrial 109,723, % 17.3% 3,863,019 $ % 1.3% 1,905,185 4,031,307 Warehouse & distribution 95,427, % 16.7% 4,135,059 $ % 2.6% 1,905,185 4,031,307 Manufacturing 9,228, % 24.6% -8,870 $ % -7.7% JLL United States Industrial Q4 2014

15 Boston Warehousing High-tech manufacturing Cold storage e-commerce Consumer products 3PL The resurgence of the Greater Boston industrial market continues as the market tightened considerably across all submarkets in 2014, especially for high-bay warehouse/distribution properties. The fourth quarter was the 16th consecutive quarter of positive net for warehouse/distribution properties, totaling 1,698,275 square feet in The Greater Boston industrial market experienced its strongest leasing quarter of the year, posting 258,008 square feet of positive net. The North submarket continues to be the tightest suburban submarket, with a total of 10.1 percent and asking rents averaging $6.64 NNN per square foot. Investment sale activity increased dramatically in 2014 and the return of institutional investors resulted in historically high pricing for industrial assets. Class A large block availabilities greater than 300,000 square feet are reaching a record low, with less than three availabilities. The strong market conditions along with the region s dwindling supply has increased activity. Build-to-suits have been the primary type; however, the first speculative (+/- 200,000 s.f.) is expected to break ground in the first quarter of 2015 in the Myles Standish Industrial Park. Greater Boston is experiencing the start of a new industrial cycle. With market conditions not seen since the early 2000 s, we expect to see continued investor activity and more build-to-suit and speculative deals in the near future. The only major challenge is the lack of good developable land Technology Center Drive New lease: 332,676 s.f. Tenant: Amazon, Inc. Cabot Business Park Portfolio Buyer: Prudential / Spaulding & Slye Seller: Prologis $113.0 M 1,781,580 s.f. $63 p.s.f. in jobs 6.6 m 1.8% 14.4% 0.2 m.s.f. 0.6 m.s.f. 109 Constitution Boulevard Renewal: 192,000 s.f. Tenant: EMC 55 Lyman Street / 20 Freedom Way Buyer: New York Life Seller: TA Associates Realty $50.5 M 495,424 s.f. $102 p.s.f. 480 Sprague Street New lease: 118,000 s.f. Tenant: Restoration Hardware 30 Innerbelt Road Buyer: AEW Capital Management Seller: Prologis $26.1 M 197,400 s.f. $132 p.s.f. stock (%) net construction industrial 143,902, % 13.5% 1,416,650 $ % 7.3% 0 200,000 Leased industrial 105,538, % 16.4% 1,265,331 $ % 6.8% 0 0 Warehouse & distribution 74,349, % 16.4% 1,698,275 $ % 8.2% 0 0 Manufacturing 29,665, % 16.3% -220,810 $ % 0.6% JLL United States Industrial Q4 2014

16 Broward County / Ft. Lauderdale International trade growth Rebound in housing market New developer influx Active owner-user market Business assistance / incentives The year ended with 552,400 square feet of new completions and nearly 1.8 million square feet of total net, of which 84.0 percent occurred in the fourth quarter. Unlike nearby markets, Broward County had a higher year-to-date total net in manufacturing than in the warehouse and distribution market. This accounts for 2.6 percent of total stock, the highest rate of since before the recession. Overall declined 190 basis points to 8.5 percent compared with one year ago. This decline is the largest year-over-year decrease since This is attributed an influx of more new-to-market tenants in Broward County. Investors took note of the market s recovery, which resulted in $309 million in asset trades this year, the highest level since In addition, given the lack of quality product in the market, developers are beginning to ramp up speculative projects. We estimate strong growth in Southeast, Southwest, and Northeast Broward, as most of the new s are located in these submarkets. Two significant projects in the pipeline will expand the market inventory by 245,000 square feet. The Miramar Park of Commerce in Southwest Broward and Pompano Distribution Center II in Northeast Broward. Currently 68.0 percent of the space is already leased. With the completion of improvements at Port Everglades, in addition to the robust construction in the area, we expect tenant demand to increase, especially as more quality spaces becomes available Meridian Parkway New lease: 116,000 s.f. Tenant: Gold Coast Freightways 2650 Southwest 36 th Street Buyer: MSG Dania Beach Seller: Bridgeport 95 $26.7 M 229,600 s.f. $116 p.s.f. in jobs 1.8 m 2.7% 8.4% 1.3 m.s.f. 1.0 m.s.f. 740 South Powerline Road New lease: 32,000 s.f. Tenant: Syntak 3620 Northeast 3 rd Street Buyer: Jackson Land Development Seller: Mackey Properties $7.8 M 44,000 s.f. $54 p.s.f. stock (%) net construction industrial 67,255, % 11.9% 1,772,361 $ % 6.5% 245, ,374 Leased industrial 51,566, % 14.1% 1,859,878 $ % 6.0% 167, ,374 Warehouse & distribution 46,279, % 13.7% 166,168 $ % 4.4% 245, ,374 Manufacturing 5,286, % 17.4% 195,710 $ % 21.7% JLL United States Industrial Q4 2014

17 Central New Jersey State incentive programs Shrinking supply of big box Class A space e-commerce distribution Cheaper operating expenses compared to Northern New Jersey Speculative construction activity Central New Jersey added to its momentum in the fourth quarter logging an additional 1.0 million square feet of net and reducing by 20 basis points to 8.1 percent. Rental rates had a healthy gain over the past 12 months driven in part by bullish developers looking for all time high rental rates on their newly constructed facilities. Even with positive demand fundamentals in place, the recent wave of new Class A construction remains a major concern for the market. The Exit 12 Class A rate stayed over 25.0 percent as several large blocks of space remain vacant. Of the 2.1 million square feet of vacant space in the market, 1.8 million square feet is located in two buildings: KTR s 8003 Industrial Avenue and Prologis 1005 W Middlesex Avenue in Carteret. Both sites have been vacant for the past six months, and logged some activity, yet none of the activity has converted into signed leases. Leases on either of these assets could drastically improve market fundamentals. Farther down the Turnpike, Exit 8A remained one of the most stable markets absorbing nearing all of its Class A vacancies. The Class A rate remains well below 6.0 percent going into 2015, and net has stayed relatively strong. A major factor in Exit 8A s ability to lease its Class A space has been pricing. Unlike Exit 12 where developers are looking for high water mark pricing, Exit 8A asking rates has remained in line with their historical averages. Strong growth in the United States, New York City, and Port Newark/Elizabeth will continue to be the foundation of organic growth in Central New Jersey. Further of space in the market will be created by tenants with size requirements between 100,000 and 400,000 square feet. The Central New Jersey industrial market witnessed inflated market fundamentals throughout 2014 due to a wave of both speculative and build to suit construction. As construction activity normalizes throughout the state, so will net which is expected to return closer to its historical averages. 10 Knox Drive, Piscataway New lease: 305,000 s.f. Tenant: Undisclosed in jobs 9.2 m 0.0% 9.3% 2.2 m.s.f. 3.1 m.s.f. 200 Docks Corner Road, South Brunswick New lease: 172,000 s.f. Tenant: Moulton Logistics 571 Jersey Ave, New Brunswick & 6C & 7C Terminal Way, Avenel 1000 Corporate Rd, North Brunswick Buyer: Terreno Realty Buyer: Principal Real Estate Investors Seller: Spieco LLC Seller: TA Associates $7.4 M 182,000 s.f. $92 p.s.f. $27.5 M 457,700 s.f. $60 p.s.f. 11 Nicholas Court, South Brunswick New lease: 134,000 s.f. Tenant: PSS Distribution 900 Hart Street, Rahway Buyer: Terreno Realty Corporation Seller: A & E Realty Associates, Inc. 7.2 M 84,000 s.f. $84 p.s.f stock (%) net construction industrial 246,667, % 12.8% 5,347,784 $ % 7.4% 1,463, ,000 Leased industrial 197,566, % 14.8% 3,859,129 $ % 9.5% 1,463, ,000 Warehouse & distribution 180,680, % 16.0% 917,177 $ % 4.4% 0 0 Manufacturing 65,987, % 16.3% 579,371 $ % 1.1% JLL United States Industrial Q4 2014

18 Central Valley, California Declining blocks of bulk distribution space Intermodal transportation links Transnational distribution network Relatively business-friendly environment Proximity to the Port of Oakland Availability of entitled land Overall declined for the ninth consecutive quarter to 6.7 percent, the lowest recorded in over eight years. The market averaged 1.1 million square feet of positive for each quarter in 2014, bringing year-to-date totals to 4.6 million square feet. Continued demand and declining availability of bulk-distribution space contributed to over 8.6 percent year-over-year increase in average asking rents for high-cube distribution space. Tenant demand is holding at sustainable levels, despite the declining availability of existing alternatives. Market fundamentals in the Bay Area are pushing an increased amount of requirements to the Central Valley were lease rates are significantly more affordable and creating demand within the 75,000- to 200,000-square-foot segment of the market. The positive momentum is driving increased investor interest in well-positioned, institutional quality leased assets in the Stockton, Lathrop and Tracy submarkets. Increased competition and pricing in the primary coastal markets is pushing capital out to emerging secondary markets like the Central Valley where there is still perceived upside potential for return on investment. As a result, transactions that closed in 2014 set a new precedent on pricing and return on investment, likely shaping the landscape for more assets to trade over the coming months North Chrisman Road Renewal: s.f. Tenant: Kellogg s Company in jobs 1.2 m 2.6% 12.3% 2.7 m.s.f. 2.2 m.s.f. *s based on data compiled since Q North MacArthur Drive Direct: 173,262 s.f. Tenant: Mannington Flooring 2109 Arch Airport Road Direct: 22,458 s.f. Tenant: Red Bull New supply is on the horizon for tenants seeking modern bulk distribution and warehouse space. A number of developers are actively constructing and/or grading sites for. The current pipeline could yield as much as 3.1 million square feet of new product over the next 18 months. Prologis and Buzz Oates are leading the way, each with a speculative project currently under construction. As these projects deliver, we expect to see lease rates hike to meet underwriting assumptions for these modern distribution facilities and bring rates back in line with pre-recession peak pricing West Schulte Road Buyer: LBA Realty Seller: Owens-Illinois $12.2 M 299,000 s.f. $41 p.s.f. 606 Zephyr Street Buyer: Tap Plastics Seller: Oates Industrial Core $4.3 M 749,840 s.f. $61 p.s.f Giannecchini Lane Buyer: Shepard Brothers Seller: Imperial Sales $1.9 M 30,000 s.f. $63 p.s.f. stock (%) net construction industrial 106,230, % 7.5% 4,634,404 $ % 8.6% 2,758,378 0 Leased industrial 69,363, % 10.3% 3,449,076 $ % 9.0% 2,758,378 0 Warehouse & distribution 57,544, % 9.5% 2,930,569 $ % 10.3% 2,758,378 0 Manufacturing 7,849, % 16.2% 437,178 $ % -5.8% JLL United States Industrial Q4 2014

19 Charlotte Growing population is driving up demand Development under way Intermodal driving logistics growth Consumer products With another quarter of significant demand, rates continued to decline in the most established submarkets. As tightens, tenants are finding themselves in a landlord-favorable market in most of the premier industrial submarkets. Vacancy has fallen to 8.4 percent in leased warehouse / distribution assets, the lowest number since the recession. As the warehouse / distribution class continues to see high demand, the manufacturing sector has yet to bounce back. Much of the vacant manufacturing space is functionally obsolete and has remained on the market for long periods of time. Demand among investors has grown to a level not previously seen for Charlotte s industrial market. Multiple large block warehouse / distribution spaces sold in the range of $70.00 per square foot during the past couple quarters. Development has picked up steam in 2014, as over 2.0 million square feet of speculative projects are under way. This reveals confidence among investors regarding the long term health of Charlotte s market. After a glut of activity came on-line during the first through third quarter, this quarter didn t yield any new speculative. Interest in newly developed space is continuing to grow as several speculative projects are under way. This will give new and existing tenants that value the highest quality warehouse / distribution space an opportunity to prelease. Rental rates should continue to increase as metrowide rates shrink and new construction starts to lease. With a limited number of viable 100,000+ square-foot availabilities, the market is left waiting for new to deliver in order to renew a pipeline of available blocks for lease. 773 Lincoln County Parkway New lease: 420,000 s.f. Tenant: American Tire 2730 Queen City Drive Buyer: New York Life Seller: Seaman Development Corp. $23.8 M 445,000 s.f. in jobs 2.3 m 1.2% 12.0% 1.0 m.s.f. 1.2 m.s.f Long Creek Park Drive Renewal: 165,000 s.f. Tenant: Eaton / Cooper Wiring 1092 Wilson Business Parkway Buyer: Beacon Partners Seller: Aegon USA Realty Advisors $ M 255,000 s.f Distribution Center Drive New lease: 124,670 s.f. Tenant: Ashley Furniture stock (%) net construction industrial 223,460, % 13.3% 4,823,658 $ % 3.2% 2,234,134 0 Leased industrial 147,557, % 14.7% 4,247,018 $ % 1.9% 2,234,134 0 Warehouse & distribution 108,076, % 10.5% 4,373,355 $ % 3.6% 2,234,134 0 Manufacturing 39,480, % 26.4% -126,345 $ % 3.6% JLL United States Industrial Q4 2014

20 Chicago Inland port, rail line convergence E-commerce distribution and air cargo 3PL expansion Availability of entitled land Uptick in speculative The rising tide is lifting all boats and infill areas within close proximity to the CBD are seeing more momentum. This trend is highlighted strong activity on Dermody s new spec building in McCook. Vacancy has tightened noticeably in Northwest Indiana and North Cook and spec s are planned by Becknell and Seefried/Cabot in both Hobart and Niles. Bob s Discount Furniture made an entry into the Midwest with a 751,000-square-foot lease with Clarion on a new spec building for regional distribution. KTR s general contractor Clayco will be wrapping up the interior mezzanine and material handling infrastructure build out for Amazon s 1.0-million-square-foot Kenosha facility over the winter. National portfolios trading hands between Deutsche and Greenfield as well as Cobalt and Colony have included multiple Chicago properties. Investors view the Chicago assets as a strong component of the geographically diverse packages. The AEW s purchase of 1925 Busse from Panattoni which was recently leased to CEVA for seven years at a 5 cap shows that developers in O Hare can achieve strong pricing on the exit. Preleasing commitments will help proactive users secure their optimal space in new buildings and allow s to move forward by Northern Builders, Conor, and Seefried in I-55. The growing number of active requirements in the market will propel speculative and attract build-to-suit proposals for large format occupiers. Big box availabilities have tightened considerably in the second half of the year in the I-55, I-80, and I- 88 corridor. As there are few large blocks expected to come on the market, conditions are ripe for new spec s on the 500,000- to 750,000-square-foot sector SW Frontage Road Shorewood, IL New lease: 751,966 s.f. Tenant: Bob s Discount Furniture Chicago MIRVAC Portfolio Buyer: Brennan/Goldman Sachs Seller: MIRVAC $170 M 4,700,000 s.f. 7.7% Cap in jobs 9.7 m 0.6% 9.8% 9.2 m.s.f 10.7 m.s.f Prospect Court Aurora, IL Renewal: 281,464 s.f. Tenant: Nippon 790 Taylor Road Romeoville, IL Buyer: Florida Board of Admin. Seller: Pizutti Companies $43.8 M 672,080 s.f. $49 p.s.f Munger Road Bartlett, IL New lease: 400,000 s.f. Tenant: Creative Werks 1980 High Grove Lane Naperville, IL Buyer: Cabot Seller: James Campbell $15.7 M 327,000 s.f. $48 p.s.f stock (%) net construction industrial 1,130,171, % 11.5% 11,285,822 $ % 1.8% 10,230,728 4,378,542 Leased industrial 712,606, % 14.3% 10,962,885 $ % 4.6% 10,059,633 3,924,542 Warehouse & distribution 461,709, % 15.3% 8,720,492 $ % 4.7% 9,895,633 3,924,542 Manufacturing 185,925, % 13.7% 2,470,288 $ % -9.2% 164, JLL United States Industrial Q4 2014

21 Cincinnati Manufacturing Healthcare and pharmaceuticals e-commerce distribution and air cargo Business-friendly municipalities Educated labor force Presence of Fortune 500 companies The Cincinnati industrial real estate closed 2014 on a high note, marked by continued rising demand and falling vacancies. currently sits at 5.3 percent, a decline of 1.4 percentage points, yearover-year. Newly delivered speculative construction has been well received across Q4, and has sparked the of over 800,000 square feet of additional speculative space. Cincinnati s industrial sector enjoyed strong growth as seen in the latest data from the BLS, posting an annual net gain of 11,100 jobs. The manufacturing super sector fared best, adding 4,100 jobs annually its best performance since the end of the recession. Continually tightening market conditions has led to an increase in build-to-suit activity, particularly for those tenants in the 50,000- to 100,000-square-foot range. Nearly 2.0 million square feet of space has delivered since the beginning of the year, two-thirds of which is leased. Cap rates will continue to compress as a number of investors, both local and national, return to the Cincinnati market. Over the course 2014, 29 industrial properties with transaction values greater than $2.5 million were transferred, with a combined square footage of 5.0 million square feet. The total transaction value for these properties was $199.5 million, while the average sales price sat at $40 per square foot an increase of 4.3 percentage points, year-over-year. Tenant requirements will remain strong thanks to Cincinnati s booming industrial sector which continues to enjoy strong year-over-year employment gains. Development will likely remain active in hot locations throughout the Cincinnati market, particularly in the Florence/Richwood, Airport, Tri-County and Monroe/Middletown submarkets, which boast 1.3 percent, 4.2 percent, 6.0 percent and 6.6 percent, respectively Aviation Boulevard New lease: 274,000 s.f. Tenant: UPS Logistics 2940 Highland Avenue Buyer: Imbus Group Seller: First Industrial Realty Trust $7.3 M 502,000 s.f. $15 p.s.f. in jobs 2.1 m 1.8% 8.1% 0.3 m.s.f. 0.4 m.s.f Global Way New lease: 225,000 s.f. Tenant: Pratt Corrugated Mosteller Road Buyer: Plymouth Industrial REIT Seller: Trident Capital Group $12.3 M 358,000 s.f. $34 p.s.f Paddock Road New lease: 178,000 s.f. Tenant: ISC Cargo Clean 4520 LeSaint Court Buyer: Exeter Property Group Seller: CPT Interstate Commerce $12.6 M 300,000 s.f. $42 p.s.f. stock (%) net construction industrial 234,769, % 7.0% 4,537,384 $ % 5.4% 2,178,914 1,897,366 Leased industrial 192,536, % 8.0% 4,514,373 $ % 8.6% 2,059,914 1,897,366 Warehouse & distribution 146,632, % 9.8% 3,706,719 $ % 11.4% 1,636,914 1,784,164 Manufacturing 45,903, % 2.2% 807,654 $ % 7.1% 367, , JLL United States Industrial Q4 2014

22 Cleveland Limited pipeline Dwindling stock of leasable space Quality manufacturing infrastructure Low cost of doing business Energy exploration attracting investment Biomedical industry According to the most recent estimates from the BLS, total nonfarm employment in Cleveland stood at ~1.0 million payrolls, representing an annualized increase of 13,700 jobs or 1.3 percent. Meanwhile, unemployment decreased 1.8 percentage points year-over-year to 5.4 percent. Jobs growth among industrial employment sectors in Cleveland has been trending up in recent months, recording an annualized net gain of 5,700 jobs across the metro. The Cleveland industrial market is comprised of million square feet of warehouse, distribution and manufacturing space. Roughly 60.0 percent of which is leased property, while the remaining 40.0 percent is owner-occupied. There is an additional 21.1 million square feet of flex space spread across the market. Industrial in Cleveland at the end of 2014 was 6.5 percent, representing a decrease of 70 basis points year-over-year. Meanwhile, the average asking rent for industrial space across the Cleveland market was recorded at $3.56 per square foot at the end of 2014, representing an increase of $0.09 per square foot or 2.6 percent year-over-year During 2014, 29 industrial properties and portfolios were transferred with values greater than $2.5 million. The total transaction value was $143.2 million and the average sales price was $42 per square foot. Approximately 1.2 million square feet of warehouse, distribution and manufacturing product is currently under construction. Roughly 83.0 percent of the planned space will be owner-occupied, while the remaining 17.0 percent is being constructed as speculative space Snow Road Renewal: 538,000 s.f. Tenant: North Coast Logistics in jobs 2.1 m 0.7% 8.8% 1.8 m.s.f. 1.1 m.s.f Enterprise Parkway New lease: 306,000 s.f. Tenant: Fannie May Confections Jenkins Boulevard New lease: 79,000 s.f. Tenant: HD Supply Power Solutions Rents have been steadily rising, albeit marginally. While this might signal a slight shift in leverage toward the landlord s favor, only modest gains in rents are forecasted over the coming year. Demand for modern warehouse space is forecasted to increase distinctly over the coming year as employers look to add capacity. Developers are still wary of speculative construction, so look for most of this new stock to come online as build-to-suit projects Philipp Parkway Buyer: Cole Income NAV Seller: Weston $5.3 M 78,000 s.f. $68 p.s.f Enterprise Parkway Buyer: Plymouth Industrial REIT Seller: Thackeray Partners $15.0 M 255,000 s.f. $59 p.s.f Aurora-Hudson Road Buyer: The Technology House Seller: Harbor Group International $1.8 M 50,000 s.f. $35 p.s.f. stock (%) net construction industrial 330,259, % 10.2% 2,662,686 $ % 2.6% 1,218, ,000 Leased industrial 197,131, % 14.4% 2,342,811 $ % 3.2% 207, ,000 Warehouse & distribution 125,470, % 15.2% 1,334,603 $ % 4.8% 207, ,000 Manufacturing 71,661, % 13.1% 1,008,208 $ % -1.8% JLL United States Industrial Q4 2014

23 Columbus Strategic location within 10 hours of nearly half of U.S. population Excellent transportation network Skilled workforce and pro-business environment Relatively low lease rates The Columbus industrial real estate market closed the year on a strong note with nearly 900,000 square feet of net across the fourth quarter, bringing total year-to-date net to roughly 4.7 million square feet. Multiple construction projects totaling 3.2 million square feet were delivered at year s end, roughly 80.0 percent of which is speculative space. The industrial employment sector continues its drive of modest, steady growth, posting an annual net gain of 2,700 jobs according to the latest data from the BLS. Employment gains were largely spurred by trade, transportation and utilities, which posted an annual gain of 3,700 jobs. Meanwhile, unemployment in the Columbus metro sits at a lean 3.7 percent. in jobs 1.8 m 0.5% 9.3% 0.7 m.s.f. 3.2 m.s.f. Additional speculative construction may be reduced in the near future as developers await tenant activity in existing, newly delivered space. Columbus continues to cement its reputation as an e-commerce and distribution hotspot, exemplified by Pier 1 Import s recent 1.2 million square foot lease in the region. Columbus remains an attractive market to local and national investors over the course of 2014, 38 industrial properties with transaction values greater than $2.5 million were transferred, with a combined square footage of 12.5 million square feet. The total transaction value for these properties was $433.1 million, while the average sales price sat at $35 per square foot, an increase of 18.9 percent yearover-year. Although increased slightly over the fourth quarter due to several construction deliveries, the scheduled completion of additional s across 2015 will largely leave unaffected as roughly 84.0 percent of current construction activity is build-to-suit Westpoint Drive New lease: 1,166,000 s.f. Tenant: Pier 1 Imports 3500 Southwest Boulevard Buyer: Plymouth Industrial REIT Seller: Sun Life Assurance $20.0 M 527,000 s.f. $38 p.s.f 6000 Pontius Road New lease: 530,000 s.f. Tenant: Faro Logistics 1450 Commodity Boulevard Buyer: Exeter Property Group Seller: DCT Industrial Trust $16.6 M 500,000 s.f. $33 p.s.f Heritage Drive Renewal: 524,000 s.f. Tenant: Coty, Inc Commodity Boulevard Buyer: Exeter Property Group Seller: DCT Industrial Trust $16.0 M 500,000 s.f. $32 p.s.f stock (%) net construction industrial 216,237, % 9.7% 4,704,445 $ % 5.8% 1,996,800 5,292,100 Leased industrial 167,149, % 12.5% 4,043,184 $ % 3.4% 1,649,800 4,854,100 Warehouse & distribution 147,425, % 12.4% 3,544,250 $ % 5.9% 1,649,800 4,754,100 Manufacturing 19,724, % 13.2% 498,934 $ % 7.9% 50, , JLL United States Industrial Q4 2014

24 Dallas / Fort Worth Surge in construction activity Strong population and job growth Residential home construction Low Healthy demand Abundance of land for future In the fourth quarter of 2014, Dallas recorded 3.9 million square feet of net, bringing the total for the year to a healthy 12.9 million square feet. Though above the historic norm, this level of did not keep pace with new construction deliveries and the total rate rose slightly from an alltime historic low up to 5.9 percent. Still, overall market fundamentals remain landlord favorable and upward pressure on rents is expected to continue for at least the next year. Over the past year, sales volume of investment grade product has decreased by about 5.0 percent. This largely attributed to a shortage of product on the market and not a decrease in demand. The average price per square foot currently stands at $48, while the average cap rate is 6.5 percent. In addition to strong rent increases, most new leases and renewals are now including 2.0 to 3.0 percent escalations as part of their standard leasing agreements. This were not common in the past.. With roughly 15.3 million square feet currently under construction, the rate is expected to increase slightly in early in 2015 and then decrease slightly in the later half of the year, as new construction is absorbed. Of the current construction projects underway, about 22.0 percent consists of build-to-suit projects. This split between BTS and spec is inline with the historic norms for the DFW market. Until the rate rises into the 8.0 to 10.0 percent range, upward pressure on rates is expected to continue. Given the current construction pipeline and recent demand levels, this is not likely to occur in South Dallas is a submarket to watch as 44.0 percent of the construction pipeline is concentrated in this submarket. The remainder is largely spread across North Fort Worth, DFW Airport and GSW/Arlington. East Cleveland Road BTS:1,608,588 s.f. Tenant: Georgia Pacific 3550 Roy Orr Boulevard Buyer: Industrial Property Trust Seller: Oakmont $19.1 M 520,326 s.f. $56 p.s.f. in jobs 6.6 m 3.4% 9.1% 9.8 m.s.f. 8.4 m.s.f Rock Quarry Renewal: 360,000 s.f. Tenant: Navistar 1700 Lakeside Buyer: Industrial Property Trust Seller: Oakmont $27.9 M 462,779 s.f. $60 p.s.f North Royal Lane Renewal: 260,700 s.f. Tenant: KPG Telecommunications Trinity Boulevard Buyer: Industrial Property Trust Seller: Brookfield $16.7 M 310,000 s.f. $54 p.s.f.. stock (%) net construction industrial 522,951, % 9.7% 12,920,577 $ % 9.1% 15,331,136 14,864,604 Leased industrial 345,269, % 14.6% 12,806,872 $ % 7.7% 14,769,536 13,922,825 Warehouse & distribution 310,629, % 14.0% 11,960,340 $ % 7.6% 14,769,536 13,922,825 Manufacturing 19,153, % 26.6% -97,075 $ % 1.4% JLL United States Industrial Q4 2014

25 Denver Larger deals (250,000 s.f.+) Intermodal transportation links Food and beverage industry Business-friendly environment Speculative construction boom The green rush, aka marijuana industry Demand from tenants in the 10,000- to 40,000-square-foot range continues to dominate market activity, spurring demand for smaller, divisible speculative projects up to 200,000 square feet. Numerous tenants have opted for build-to-suit facilities; though, this trend is slowing in favor of speculative construction. As landlords seek to retain existing tenants and attract new ones, they continue to offer concession packages. However, with leverage rooted on their side, free rent and tenant improvement allowances have decreased in the past few quarters. Rates continue to tick upward with a 16.3 percent increase over the past year. There have been very few Class A buildings available to purchase for the past several years; therefore, when these opportunities arise, sales are quick and high prices are paid due to very strong interest. Class B and C buildings attract interest from value-add buyers, who must purchase at conservative prices and spend substantial money on re-tenanting the building. In addition, they are faced with older, less efficient construction and tenants with local credit, as opposed to national credit W 53 rd Place Central Renewal: 101,000 & 100,486 s.f. Tenant: Appliance Factory Outlet / A&A Quality Appliance in jobs 2.7 m 2.6% 6.6% 2.6 m.s.f. 1.6 m.s.f E 55 th Avenue I-70/East New lease: 112,000 s.f. Tenant: Rexel W 120 th Avenue NW New lease: 150,186 s.f. Tenant: Frictionless World Leasing volume ended the fourth quarter with nearly 1.5 million square feet leased, bringing the year-todate total to over 8.7 million square feet. Activity is expected to continue to surge. Increased rental rates and fewer landlord concessions are expected, and many submarkets have grown more landlord-favorable, which will likely spur additional construction in the near future. Several buildings have delivered year-to-date, providing some relief to tenants who seek large block availabilities, especially in high-demand submarkets like the I-70/East. Flex pricing has remained relatively flat over the past few quarters, but positive throughout the market this year will help push rates up in the coming quarters E 36 th Drive I-70/East Buyer: Exeter Property Group Seller: LNR Property Corporation $12.0 M 262,500 s.f. $46 p.s.f Lafayette Street Central Buyer: Industry Denver Seller: Exdo Properties $10.0 M 78,344 s.f. $128 p.s.f Upland Drive SE Buyer: Hendricks Commercial Prop Seller: The Opus Group $7.6 M 64,676 s.f. $118 p.s.f. stock (%) net construction industrial 197,333, % 5.4% 4,388,078 $ % 16.3% 1,472, ,682 Leased industrial 128,572, % 7.3% 3,985,925 $ % 15.5% 1,472, ,331 Warehouse & distribution 105,051, % 6.8% 3,211,622 $ % 19.0% 1,472, ,331 Manufacturing 22,784, % 12.8% 770,733 $ % 0.7% 0 283, JLL United States Industrial Q4 2014

26 Detroit Concentration of automotive industry Growth as an international transportation hub Demand shifting to big box product Growth in green and advanced manufacturing Minimal supply in pipeline Market fundamentals slowly tightening According to the most recent estimates from the BLS, total non farm employment in Detroit stood at ~1.9 million payrolls, representing an annualized increase of 12,500 jobs or 66 basis points. Meanwhile, unemployment decreased 1.2 percentage points year-over-year to 7.0 percent. Jobs growth among industrial sectors in Detroit has been trending up in recent months, recording an annualized net gain of 17,400 jobs across the metro. The Detroit industrial market is comprised of million square feet of warehouse, distribution and manufacturing space. Roughly 68.0 percent of which is leased property, while the remaining 32.0 percent is owner-occupied. There is an additional 47.9 million square feet of flex space spread across the market. Industrial in Detroit at the end of the fourth quarter was 7.9 percent, representing a decrease of 1.1 percentage points year-over-year. Meanwhile, the average asking rent for industrial space across the Detroit market was recorded at $4.19 per square foot at the end of fourth quarter, representing an increase of $0.18 per square foot or 4.5 percent year-over-year. Approximately 1.6 million square feet of warehouse, distribution and manufacturing product is currently under construction. Roughly 60.0 percent of the planned space will be leased, while the remaining 40.0 percent will be owner-occupied. Six industrial buildings were delivered during the course of the year, totaling approximately 1.0 million square feet W Huron River Drive New lease: 347,000 s.f. Tenant: W.F. Whelan Company in jobs 4.3 m -0.2% 12.0% 1.9 m.s.f. 1.4 m.s.f E. Maple Road Renewal: 183,000 s.f. Tenant: QEK Global Solutions Grand River Avenue New lease: 133,000 s.f. Tenant: Hirata Corporation Demand growth will continue to favor large, modern product, and when met with fewer move-outs, the result will be a continued firming of market fundamentals. With a minimal supply pipeline, marginal improvements in demand will result in a tightening of vacancies. Despite a firming of the market, vacant space is still abundant. As a result, landlords have yet to truly regain the upper hand. While rents have finally ended their declines and are expected to grow over the coming quarters, growth will be modest Frenchtown Center Drive Buyer: Gladstone Companies Seller: Spirit Realty Capital $30.8 M 535,500 s.f. $57 p.s.f Metro Parkway Buyer: American Realty Capital Seller: Delta Management $14.9 M 200,000 s.f. $75 p.s.f Pacific Drive Buyer: RDB Industries Seller: Mound Investment LP $9.2 M 177,000 s.f. $52 p.s.f. stock (%) net construction industrial 448,852, % 11.5% 5,366,371 $ % 4.5% 1,569,000 1,006,000 Leased industrial 306,442, % 14.1% 4,204,762 $ % 4.8% 949, ,000 Warehouse & distribution 186,408, % 13.9% 2,532,164 $ % 4.9% 702,000 0 Manufacturing 120,034, % 14.3% 1,672,598 $ % 4.3% 247, , JLL United States Industrial Q4 2014

27 East Bay / Oakland Food and beverage distributors Growing trade through Port of Oakland e-commerce distribution and air cargo Re-emergence of housing demand Lack of large blocks and growing regional demand from bulk distributors Leasing activity remained robust in the fourth quarter while was down. Availability increased slightly due to new speculative construction. This available space was not enough to lessen the competitive leasing environment, and rents are returning to levels last seen during the dot-com era. Traffic through the Port of Oakland is trending 2.0 percent year-to-date, and up 3.4 percent in the fourth quarter bolstered by increased volume during the holidays and spillover from shippers diverting inbound cargo from other West Coast ports affected by prolonged longshoremen strikes/labor negotiations. This activity has increased pressure on an already supply-constrained market surrounding the Port and led to continued rental rate increases on remaining blocks of available space. net for 2014 reached the second highest level in the last 17 years. Developers are capitalizing on the surge in demand by breaking ground on a number of speculative projects that are expected to deliver over the next six to 12 months. In addition, developers have an additional 2.2 million square feet of speculative and build-to-suit projects in the pipeline that are expected to break ground over the next two years. Although new construction may lessen the speed of rental rate increases, users can expect to pay a premium for new. The new construction will come as a relief to higher-end manufacturing, e-commerce, and retail distributors intent on staying proximate to the Bay Area consumer as opposed to moving to inland markets for rental relief. This also presents opportunities for investors to creatively reconfigure Class C product to better suit tenants needs. Vacancy rates are approaching historically low levels set in the late 1990s during the dot-com boom. Despite the low levels, rates are expected to continue to decline while existing municipalities in the immediate Bay Area run out of developable land. New will primarily be focused toward users in the 50,000- to 150,000 square-foot range as available land dwindles. Larger distributors may be forced to look outside of the immediate Bay Area to markets in Solano and San Joaquin counties where available options and rental rates are more favorable Kato Road Direct: 302,400 s.f. Tenant: Confidential 6538 & 6474 Patterson Pass Road Buyer: MKD Investments Seller: Lowenberg Corporation $14.0 M 181,554 s.f. $77 p.s.f. in jobs 2.6 m 2.8% 8.6% 682,943 s.f. 349,703 s.f. Dixon I-880, Bldg 1 Direct: 102,919 s.f. Tenant: Apple, Inc Alvarado Niles Road Buyer: Terreno Realty Corporation Seller: Westcore Properties $23.8 M 170,000 s.f. $139 p.s.f Doolittle Drive Direct: 61,827 s.f. Tenant: New Haven Moving Equipment Corporation 2041 Factory Street Buyer: Highridge Provender Seller: Asp & Rwm Properties $15 M 109,594 s.f. $136 p.s.f. stock (%) net construction industrial 110,324, % 10.2% 4,424,478 $ % 7.1% 4,094, ,000 Leased industrial 86,080, % 12.2% 3,484,963 $ % 10.3% 3,894, ,000 Warehouse & distribution 55,495, % 13.6% 2,576,067 $ % 9.1% 3,670,100 0 Manufacturing 24,189, % 10.5% 631,175 $ % 8.0% 224, , JLL United States Industrial Q4 2014

28 Greensboro / Winston-Salem Growing population Textiles, tobacco and furniture Growing technology sector Consumer products The Triad region has traditionally been defined by large textile, tobacco and furniture manufacturers. In recent years, these industries have struggled as competition has driven production overseas. In response, the Triad has made an effort to diversify from their traditional manufacturing economy and has broadened the industries in which it recruits. Even with a growing number of warehouse / distribution users in the region, Greensboro / Winston-Salem is still on the radar of many manufacturing companies due to the talent pool in the area. Currently, Dunlop Aircraft Tires has identified this region as a prime location for their first U.S. retreading facility. Ashley Furniture and Ralph Lauren are underway with 1.5 million and 400,000-square-foot, respectively, expansions of their current footprints. Ashley Furniture s manufacturing location is nearby its other facilities in Davie County, while Ralph Lauren s distribution facility is located in I-74 Corporate Park. These expansions will result in the hiring of over 1,000 new employees in the region. Leasing is expected to continue to increase throughout the year as the local economy continues its recovery. Furthermore, the growing diversification of the Triad industrial market should help stir interest from out-of-market tenants. Rental rates should start to increase as has fallen to its lowest rate since the recession. With rising rents, speculative construction should become possible. Due to the present demand for quality space, premier 100,000-square-foot and greater warehouse / distribution availabilities should not stay vacant long. 205 Enterprise Way New lease: 108,480 s.f. Tenant: Dunlop Aircraft Tyre 6550 Judge Adams Road Buyer: Beacon Partners Seller: GE Commercial Finance $21.6 M 520,000 s.f. in jobs 1.6 m 1.1% 8.6% 0.5 m.s.f. 0.8 m.s.f Progress Lane Renewal: 158,400 s.f. Tenant: Rock Tenn Converting Co 2655 Annapolis Drive Buyer: STAG Industrial Seller: Beacon Partners $14.9 M 385,000 s.f. stock (%) net construction industrial 200,498, % 10.5% 5,445,706 $ % -0.4% 2,450,000 0 Leased industrial 113,550, % 14.3% 4,243,589 $ % 0.8% 0 0 Warehouse & distribution 71,769, % 14.2% 2,830,613 $ % 0.0% 300,000 0 Manufacturing 41,780, % 14.5% 1,412,976 $ % 2.9% JLL United States Industrial Q4 2014

29 Hampton Roads Improving retail and wholesale sales Third largest port on the East Coast Low business costs Shipbuilding hub Developing distribution hub Large defense presence Construction has returned to the Hampton Roads market with four significant projects under way. Oceaneering International, Friant and Associates, Green Flash Brewery and FedEx have 256,839 square feet of warehouse / manufacturing product and a 154,000-square-foot flex building under construction. Additionally, a 357,000-square-foot distribution facility broke ground in the fourth quarter. All activity continued to be fueled by build to suits, with speculative still in planning stages. Expansions within market and new deal activity boosted leasing volume in the fourth quarter, with Pacorini Global Services, California Cartage, VT Milicom and Continental Terminals leasing a combined 468,184 square feet. This created a 22.2 percent increase in leasing volume compared to the fourth quarter of Overall Class A has fluctuated slight over the past four quarters, reaching 4.1 percent in the fourth quarter this year. Due to space constraints, Class A asking rates have increased by 4.9 percent over the past 12 months to reach $4.72 per square foot in the fourth quarter of Increased container volume at the Port of Virginia has created capacity constraints on the terminals intermodal yards and dock-based 3PLs. The port authority may have to reclaim some port-owned warehouses leased to 3PLs to help alleviate constraints, effectively pushing former tenants into the leasable inventory. Lumber Liquidators delayed exit of the Hampton Roads market offset negative net for the 2014 year, but will impact first quarter 2015 fundamentals. Class A is expected to be nearly double of the fourth quarter Class A rate (4.1 percent), but numerous large requirements should absorb the majority of this space in the next six to 12 months. 103 Industrial Drive New lease: 150,000 s.f. Tenant: Pacorini Global Services Trant Avenue Buyer: Office Space Solutions Seller: Shippers Service Company $4.6 M 122,577 s.f. $37 p.s.f. in jobs 1.7 m 1.0% 7.9% 0.5 m.s.f. 0.8 m.s.f Military Highway Expansion: 130,860 s.f. Tenant: California Cartage 2505 International Parkway Buyer: Mancon Seller: Gear World $4.5 M 89,445 s.f. $50 p.s.f Cavalier Boulevard Expansion: 97,879 s.f. Tenant: Continental Terminals 800 Seaboard Drive Buyer: Tecnico Corporation Seller: Private individual $3.1 M 59,042 s.f. $52 p.s.f. stock (%) net construction industrial 66,292, % 10.4% 394,033 $ % -3.1% 613,839 0 Leased industrial 41,740, % 11.0% 394,033 $ % -3.7% 613,839 0 Warehouse & distribution 31,422, % 13.4% 339,800 $ % 0.4% 555,839 0 Manufacturing 10,318, % 3.5% 54,543 $ % 1.7% 58, JLL United States Industrial Q4 2014

30 Houston Nondurable goods providers Port of Houston distribution New retail distributor influx Relatively business-friendly environment New developer influx Availability of entitled land Much of the industrial growth occurred in the North and Northwest submarkets, reflecting tenants needs to be close to major highways and thoroughfares. With the plunge of oil prices, there has been more sublease activity as companies move toward consolidation rather than expansion. Houston remains a landlord-favorable market with rents steadily increasing in all submarkets, with the Northwest submarket asking the highest rental rates at $7.12 per square foot. in jobs 2.2 m 3.9% 6.0% 4.1 m.s.f. 5.0 m.s.f. While Houston has somewhat slowed due to oil prices, it is still expected to add 62,900 total jobs in ,300 jobs have been created in the 12 months ending in November The energy companies will continue to be the major drivers for the industrial market with their need for storage, distribution and manufacturing space. Investments made in new chemical plants along the Houston Ship Channel and the current activity in the Eagle Ford and Permian Basin will help to maintain the current growth Houston is experiencing. The Norwegian Cruise Line has returned to the Bayport Cruise Terminal and began departures at the beginning of the 2014 Fall Cruise Season. According to the Port of Houston, one cruise season brings $50 million in economic impact and benefits local businesses in surrounding areas such as fuel, food & beverage vendors, hotels, restaurants and entertainment City Park Loop New lease: 103,950 s.f. Tenant: Atlantic Clothing 2000 Afton Rd. Renewal: 87,000 s.f. Tenant: Veritrust Cedar Crossing Business Park New lease: 118,000 s.f. Tenant: National Oilwell Varco Cash Rd. Buyer: Undisclosed Seller: Melanie Stafford Ventures $11.95 M 145,120 s.f. $79 p.s.f Vantage Pkwy Buyer: Satake Seller: Global Diving & Storage $2.0 M 21,500 s.f. $93 p.s.f Rankin Rd. Buyer: STAG Houston Seller: Texas Land Best $7.0 M 183,250 s.f. $38.20 p.s.f. stock (%) net construction industrial 438,050, % 7.5% 8,353,260 $ % 4.9% 8,438,994 1,272,061 Leased industrial 249,219, % 10.1% 7,543,777 $ % 1.8% 47,778 1,111,561 Warehouse & distribution 221,013, % 10.4% 7,120,663 $ % 0.7% 47,778 1,058,561 Manufacturing 30,852, % 8.4% 437,105 $ % 2.7% 0 120, JLL United States Industrial Q4 2014

31 Indianapolis Fluctuation in commodity prices Location, location, location e-commerce, air cargo and food distribution Business-friendly environment New developer influx Availability of entitled land Indianapolis industrial sectors continue to perform well, accounting for 40.0 percent of the 12-month total employment growth. The trade, transportation and utilities sector reached a historical high for the second consecutive quarter with 210,700 jobs reported. The industrial market achieved 4.2 million square feet of net in The majority of this activity has occurred in the Northwest and West/Southwest submarkets. Construction activity continues at a historically high rate as 6.4 million square feet was delivered in 2014 with an additional 5.0 million square feet still under construction. The majority of the construction deliveries in 2014 were of the build-to-suit variety as 4.2 million square feet of build-to-suit product was delivered for companies such as Walmart, Subaru, Tempurpedic and FedEx to name a few. The majority of under way construction is speculative in nature. The market for modern bulk product has shifted from landlord-favorable to tenant-favorable as current speculative construction projects have brought numerous options to the market. This is especially true in the 300,000- to 600,000-square-foot range. Look for developers to curtail speculative construction once this current round of construction is finished in order to allow the market time to absorb what has been delivered over the last two years. Tenant demand remains solid with just over 10.0 million square feet of bulk requirements currently in the market. The average tenant requirement for bulk space is approximately 278,000 square feet. Requirements in the e-commerce and food distribution sectors are the most active. Capital markets activity should remain strong in 2015 as plenty of attractive offerings remain on or will be coming to the market soon. 760 Commerce Parkway E. Drive Renewal: 200,000 s.f. Tenant: Cat Logistics 9999 East 121 st Street Buyer: Jarden Corporation Seller: C-III Asset Management $9.6 M 638,000 s.f. $15 p.s.f in jobs 1.8 m 2.3% 8.7% 4.7 m.s.f. 4.0 m.s.f. 221 South Franklin Road Expansion: 128,000 s.f. Tenant: ERS 8001 Woodland Drive Buyer: Australian Gold Seller: KIN Properties, Inc. $6.1 M 227,000 s.f. $27 p.s.f 381 Airtech Parkway Expansion: 125,000 s.f. Tenant: RR Donnelley 9760 Mayflower Park Drive Buyer: Moriden America, Inc. Seller: Glennco Realty, LLC. $4.8 M 130,000 s.f. $37 p.s.f. stock (%) net construction industrial 259,531, % 12.0% 4,201,499 $ % 11.7% 4,953,873 2,450,830 Leased industrial 172,854, % 14.5% 2,125,956 $ % 9.7% 4,953,873 2,450,830 Warehouse & distribution 134,071, % 14.1% 2,372,067 $ % 8.9% 4,953,873 2,450,830 Manufacturing 36,110, % 16.1% -105,839 $ % 8.8% JLL United States Industrial Q4 2014

32 Inland Empire e-commerce distribution and air cargo Fluctuation in commodity prices Intermodal transportation links Relatively business-friendly environment Development on the rise Availability of entitled land The Inland Empire is doing very well, but the market continues to vary across size segments. The under 200,000-square-foot segment is seeing strong activity and rising rents and sales prices. Institutional capital, which has historically focused on Class A product, is now looking at Class B product. Properties between 600,000 and 800,000 square feet are seeing activity slow a bit with supply currently outpacing demand. Product above 1.0 million square feet is seeing increased activity and balanced conditions thanks to recent projects. Despite port congestion and protracted labor negotiations, the migration of tenants from Los Angeles and Orange Counties (as well as growth from IE tenants) is continuing. Tenant demand is still led by 3PLs, but large e-commerce companies and smaller, privately held have increasing requirements. Significant new leases in the Inland Empire East submarket illustrate how the East is steadily catching up with the established West in terms of inventory and leasing activity. Construction volumes are high. But with 82.0 percent of under construction projects being speculative, there is concern of over-heating; the 400,000- to 600,000-square-foot and the 900,000-square-feet and above segments remain the most vulnerable Flight Avenue New lease: 600,140 s.f. Tenant: UMA Enterprises, Inc. in jobs 4.2 m 2.4% 7.6% 12.3 m.s.f m.s.f Sierra Ridge New lease: 464,055 s.f. Tenant: Coupang 800 North Barrington New lease: 427,047 s.f. Tenant: Allen Distribution The 50,000- to 200,000-square-foot segment is seeing rent and sales growth; the 150,000- to 300,000- square-foot segment is anticipated to remain level moving into 2015; the 600,000- to 800,000-squarefoot segment is posting limited rent growth; acceleration is forecasted in the 900,000-square-foot-andgreater size range. Because of the increase in land values, some tenants are being priced out and looking ahead to 2015, the labor market may begin to expose a weakness. Neighboring markets will continue to absorb overflow demand in coming quarters where it is possible & 5125 Schaefer Buyer: New York Investment Management LLC Seller: LBA Realty $52.7 M 636,130 s.f. $83 p.s.f Innovation Buyer: Scuderia West Motorcycles Seller: Sun Life Assurance Company of Canada $43.8 M 600,000 s.f. $73 p.s.f Hamner Buyer: TIAA-CREF Seller: TA Associates Realty $36.7 M 600,000 s.f. $50 p.s.f. stock (%) net construction industrial 475,525, % 7.2% 21,510,700 $ % 10.8% 16,963,351 4, Leased industrial 372,433, % 8.5% 21,920,181 $ % 10.6% 16,963,351 4, Warehouse & distribution 326,394, % 8.7% 21,406,059 $ % 8.3% 16,949,191 4, Manufacturing 46,038, % 7.2% 539,303 $ % 18.2% 14, JLL United States Industrial Q4 2014

33 Jacksonville Improving trade volume Low real estate prices Port of Jacksonville Improving business environment Growth of neighboring industrial markets Intermodal connectivity Jacksonville s industrial market gained significant ground to finish the year following a stagnant third quarter. Overall, annual net reached nearly 1.7 million square feet, of which 56.0 percent occurred during the fourth quarter. In total, 1.9 percent of the total stock was taken off the market, which represented a 63.0 percent increase from Overall gains continued to be driven by demand for warehouse/distribution space, which posted gains of 917,000 square feet during the quarter, bringing the year-end total to roughly 1.6 million square feet or 3.2 percent of its total stock. On the other hand, demand fell for manufacturing space, despite positive gains this quarter. This is due in part to a limited supply of quality product; out of the 56 leased manufacturing buildings larger than 30,000 square feet, only five were built after the year With that, the overall total rate ended the year in single digit territory for the first time since the end of the recession, dropping 110 basis points over the quarter to 9.6 percent or 20 points below its historic (10-year) average of 9.8 percent. However, the market has yet to see significant rent growth that typically coincides with strong demand and depressed levels East Distribution Avenue Renewal: 15,200 s.f. Tenant: Sanders Elite Training Performance, Inc. in jobs 1.84 m 2.9% 9.8% 1.1 m.s.f. 1.5 m.s.f Commonwealth Avenue New lease: 12,500 s.f. Tenant: Guardian Fueling Technologies 7780 Westside Industrial New lease: 10,000 s.f. Tenant: Del Monte Foods, Inc. Looking ahead into 2015, we expect to see more speculative and built-to-suit s come out of the ground in Jacksonville. This will be driven by tighter market conditions and users preference for more efficient buildings, as well as improving economic conditions. For example, GE Oil & Gas recently signed a built-to-suit lease in the Westside submarket, where overall vacancies stood at 4.5 percent. They are planning on building a 510,000-square-foot advanced manufacturing facility Dames Point Road Buyer: Wespac Seller: CertainTeed Gypsum, Inc. $11.8 M 293,600 s.f. $40 p.s.f. 924 North Lane Avenue Buyer: GBM Globe Florida LLC Seller: Hubbell Incorporated $ 750,000 56,000 s.f. $13 p.s.f Agricultural Center Drive Buyer: Advanced Integration Tech Seller: Helmut Makosch $1.6 M 31,000 s.f. $52 p.s.f. stock (%) net construction industrial 87,440, % 15.4% 1,679, % -0.8% 367,546 0 Leased industrial 53,873, % 22.3% 1,425, % -1.9% 367,546 0 Warehouse & distribution 48,733, % 22.0% 1,570, % -2.2% 367,546 0 Manufacturing 5,140, % 25.3% -144, % 0.6% JLL United States Industrial Q4 2014

34 Kansas City Automotive manufacturing industry BNSF intermodal yard e-commerce distribution Availability of new, Class A distribution space The year ended with continued positive net, bringing the year-to-date total to over 4.4 million square feet. Speculative continues to be prevalent throughout the market with nearly 3.0 million square feet in the construction pipeline. New requirements to the Kansas City area in 2014 totaled over 1.7 million square feet, evidenced by the recent lease at Logistics Park Kansas City to Kubota Tractor for 437,000 square feet. Investors are shifting their perception of Kansas City as a local market to a major inland port market with fundamental strength as rates are lower than the national average. Kansas City unemployment rates continue to drop as well as out paced the overall U.S. employment rate. The future capital spending index for the Kansas City region, as tracked by the Federal Reserve Bank, experienced a jump in December Kansas City continues to see steady economic growth but, at a slower pace than coastal metropolitan areas. The steady pace is a key attribute to the market compared to the volatility of other U.S. markets. The ability for investors to place capital at discounts (25-45 bps) compared to peer markets like Indianapolis and Columbus is projected to draw more attention to the Kansas City market. Net is anticipated to slow as several large speculative distribution center projects will deliver during first quarter However, by year-end 2015, demand is anticipated to outpace deliveries. Lease rates are anticipated to remain stable, specifically for bulk distribution space. Landlords will continue to offer concessions for the procurement of larger new leases. Logistics Park Kansas City New lease: 437,000 s.f. Tenant: Kubota Tractor LPKC Inland I Buyer: FlexSteel Industries, Inc. Seller: NorthPoint Development $24.1 M 500,150 s.f. $48 p.s.f. in jobs 2.3 m 1.0% 7.1% 1.9 m.s.f. 1.6 m.s.f. Skyport Industrial Park New lease: 158,000 s.f. Tenant: Bunzl Marshall Drive Buyer: STAG Seller: Realty Income $13.3 M 276,219 s.f. $48 p.s.f. Riverside Horizons New lease: 119,000 s.f. Tenant: M&M Quality Solutions 7503 NW 106 th Terrace Buyer: Monmouth Seller: CBC Real Estate $9.6 M 157,000 s.f. $61 p.s.f. stock (%) net construction industrial 281,710, % 9.1% 4,420,474 $ % 0.5% 3,147,000 1, Leased industrial 169,421, % 12.8% 3,644,261 $ % 0.5% 2,906, ,200 Warehouse & distribution 139,851, % 12.1% 3,429,184 $ % 0.5% 1,190, ,200 Manufacturing 24,216, % 17.8% 56,521 $ % 1.9% JLL United States Industrial Q4 2014

35 Las Vegas Service-related users (Las Vegas Strip) Low freight costs Pro-business environment and tax structure Favorable regional SW location Low natural disaster risk Right-to-work employment environment Vacancy continued its downward decline to 9.1 percent during the fourth quarter. Base rates have increased a solid percent in larger blocks of space as diminishing supply concerns fuels developer interest in speculative building. Now more than 3.0 million square feet of speculative is currently planned or under construction for 2015 and early 2016 delivery. This includes two buildings over 400,000 square feet and a majority of the currently planned projects continue to be big box warehouse projects. Only now are we beginning to hear discussions about mid-bay and light industrial speculative. The 464,000-square-foot, Class A facility under construction by Prologis leased, confirming that an appetite for 36 clear product in Las Vegas is real. It will be late 2015 before any new 36 clear product comes on-line, namely the speculative 445,000-square-foot flow-through facility being developed by Pauls Corporation. Despite recent activity and the challenges with identifying blocks of space over 40,000 square feet, deal velocity continues to be low Bay Lake Trail Direct lease: 464,203 s.f. Tenant: Global Industrial Distribution in jobs 2.0 m 2.5% 12.0% 1.1 m.s.f. 1.5 m.s.f Marion Drive Direct lease: 116,160 s.f. Tenant: Yusen Logistics 4390 Flossmoor Street Renewal: 75,000 s.f. Tenant: Liquidity Services, Inc will see continued tightening of available inventory and upward pressure on lease rates, especially in blocks of space over 40,000 square feet. We feel it is likely Las Vegas will reach base rates of over $0.40 per square foot per month and will motivate additional speculative. Land pricing will also continue to increase throughout the rest of That, and the lack of available ready to develop land, will somewhat restrain new. Increases in lease rates and land and building pricing may lead to a loss of competitiveness regionally Still, domestic demand for space also continues to increase and we will see expansion and new players coming into the market from gaming, convention services and retail. Cheyenne Technology Center Buyer: BKM Capital Partners Seller: Cheyenne Tech Center, LLC $18.4 M 172,329 s.f. $107 p.s.f. Windriver Industrial Complex Buyer: BKM Capital Partners Seller: Terra Grandis/Tiberti Co. $9.1 M 147,903 s.f. $62 p.s.f Montessouri Street Buyer: Westwood Dev Corp Seller: KTR $8.0 M 72,048 s.f. $111 p.s.f. stock (%) net construction industrial 87,524, % 9.7% 1,615,284 $ % 5.4% 1,103,300 0 Leased industrial 71,127, % 10.7% 1,498,439 $ % 5.4% 515,300 0 Warehouse & distribution 63,481, % 11.1% 1,518,962 $ % 5.7% 515,300 0 Manufacturing 5,291, % 8.3% 21,813 $ % 1.3% JLL United States Industrial Q4 2014

36 Long Island Healthcare and pharmaceuticals e-commerce North Shore LIJ Health System Private sector job count International air cargo at JFK Suffolk County Overall, Long Island leasing activity decreased by approximately 40.0 percent in 2014 to 3,344,045 square feet, which is attributed to declining inventory and lack of supply. Suffolk County attracted the most leasing activity at 1,888,000 square feet in Ruby Has LLC, an e-commerce center, signed a 75,000 square foot lease in Bay Shore, Suffolk, in the third quarter. North Shore LIJ, the state s largest private employer, is rapidly expanding in the industrial and office market in Nassau County. North Shore LIJ signed a 105,882 square foot lease in Bethpage, and more lease signings are anticipated in On Long Island, only five blocks of Class B space larger than 100,000 square feet are available. The overall warehouse and distribution rate should continue to decline in In Queens, JFK airport is undergoing a $1.4 billion re that will be completed in the first quarter of JFK Airport s domestic passenger traffic continues to set new passenger records and stands at 20.9 million, increasing 4.1 percent year-to-date in October International traffic increased 7.1 percent to 44.8 million and international air cargo increased 3.5 percent year-to-date in October Developers are reducing industrial product in Queens by converting facilities to residential use. Consequently, leasing activity may decline and pricing may rise in Queens in Approximately $918.0 million worth of sales took place in Queens in 2014, and sales volume doubled year-over-year. The average sales price increased approximately 20.0 percent to $119 per square foot year-to-date in Queens. The investment sales outlook in Queens, Nassau County and Suffolk County is positive due to low interest rates in the first half In Suffolk County, 314,000 square feet of groundbreaking is expected in the first half of 2015, compared to 439,759 square feet delivered on Long Island in Healthcare and pharmaceutical industry expansion should continue throughout Overall warehouse and manufacturing average asking rental growth should exceed 3.0 percent in 2015, reaching more than $11.00 triple net per square foot, surpassing previous peaks. 300 Michael Drive, Syosset New lease: 120,550 s.f. Tenant: Sub Zero th Avenue, Long Island City Buyer: Invesco RE (49.0% interest) Seller: Atlas Capital Group $245.0 M 1,024,908 s.f. $239 p.s.f. in jobs 5.1 m 0.7% 5.0% 88,808 s.f. 91,110 s.f South Oyster Bay Road, Bethpage New lease: 105,882 s.f. Tenant: North Shore LIJ 100 Orville Drive, Bohemia Buyer: American Realty Capital Seller: SunCap $29.9 M 158,520 s.f. $189 p.s.f. 5 Inez Drive, Bay Shore New lease: 75,000 s.f. Tenant: Ruby Has LLC 1101 Stewart Avenue, Garden City Buyer: GTJ REIT Inc. Seller: Newport Partners Realty $9.2 M 90,000 s.f. $102 p.s.f. stock (%) net construction industrial 117,758, % 7.8% 728,257 $ % 10.7% 100,000 0 Leased industrial 76,731, % 8.8% 1,067,466 $ % 1.6% 0 0 Warehouse & distribution 33,085, % 10.0% 61,121 $ % 0.1% 0 0 Manufacturing 43,645, % 7.9% 1,006,345 $ % 0.1% JLL United States Industrial Q4 2014

37 Los Angeles Intermodal transportation links Third-party logistics providers Strong warehouse/distribution fundamentals Mature logistics market with trade linkages Dominant U.S. cargo port network Due to strong demand on a lease and purchase basis throughout 2014, the rate continued to drop ending fourth quarter at 3.0 percent, down 50 basis points from last quarter. Healthy tenant activity has created a lack of available product, which, in turn, resulted in an uptick in new. In the third quarter, approximately 1.2 million square feet of new projects were added to the overall construction in the Los Angeles industrial market. Current market fundamentals are in the landlords favor, and buyer leverage is minimal at best. Buyers face extreme sticker shock and restrictive terms and conditions once under contract. Although quarterly leasing activity was down nearly 50.0 percent compared to this time last year, the quarter ended with positive net due to increases in activity during 2014 and tenant move-ins. Minimal available product is the primary contributor to leasing activity decreasing year-over-year. Class A alternatives are decreasing; pricing from South Bay to the Southeast, Central and East is closer in spread. No near-term catalyst is expected to the positive dynamics across all submarkets in the Los Angeles basin. Rental rates and sale prices are rising and expectation is to exceed peak pricing in the near future. Rents are expected to grow percent in the next 12 months. Development constrained by lack of land sites and scarcity of obsolete manufacturing facilities are being shuttered which could be positioned for reuse or new. Low fuel costs and global economic strength, apart from Europe, are setting the stage for stronger fundamentals moving into Greenstone Avenue Direct lease: 327,934 s.f. Tenant: FedEx 7900 Nelson Road Buyer: Rexford Industrial Seller: Delphi Business Properties $24.3 M 203,082 s.f. $119 p.s.f. in jobs 9.8 m 2.2% 5.2% 3.4 m.s.f. 3.9 m.s.f Western Unit #B Direct lease: 315,150 s.f. Tenant: Syncron Shoemaker Avenue Buyer: American Realty Advisors Seller: Lincoln Property Company $21.6 M 174,342 s.f. $124 p.s.f East Dominguez Renewal: 261,550 s.f. Tenant: Price Transfer Inc West Via Plata Street Buyer: Golden Star Trading, Inc. Seller: Via Plata Associates LP $17.8 M 137,699 s.f. $129 p.s.f. stock (%) net construction industrial 780,456, % 5.4% 15,131,393 $ % 10.9% 3,238, ,345 Leased industrial 558,577, % 6.3% 14,103,442 $ % 9.5% 3,238, ,345 Warehouse & distribution 412,451, % 6.5% 10,247,178 $ % 9.6% 3,238, ,345 Manufacturing 140,870, % 5.7% 3,856,254 $ % 17.6% JLL United States Industrial Q4 2014

38 Memphis Busiest cargo airport in North America Five Class I rail lines $1.2 billion spent on rail infrastructure Third busiest trucking corridor in U.S. Fourth largest inland port in U.S. Home to FedEx WorldHub Absorption in fourth quarter totaled 2.1 million square feet, closing out 2014 with a very strong finish. Memphis had over 2.6 million square feet delivered in 2014 and has approximately 3.0 million square feet currently under construction. Of 2014 s deliveries, 39.0 percent was built on a speculative basis. Fifty-six percent of current construction is being built as spec, signifying developer and investor confidence in the Memphis market for Class A modern product. Supply of Class A space is at minimum with tenant demand as high as Memphis has experienced in several years. Consequently, rental rates are increasing in that segment. Mid-sized space and Class B demand increased throughout 2014, and rents, while lagging behind Class A, are going up. During the quarter, Panattoni delivered a 1.0-million-square-foot design build for Volvo Trucks. Nike is expanding its newly constructed 1.1-million-square-foot facility by another 1.3 million square feet. Currently IDI Gazeley, Hillwood and Prologis are the active speculative developers in Memphis. Hillwood is the most recent developer to re-enter the spec arena with 1.1 million square feet planned to deliver in two buildings in the third quarter of Exeter remains the most active buyer in the Memphis market but new to market investors, Select Income REIT and WPT REIT show the depth of capital pursuing quality investment opportunities.. Rents will continue to increase in both Class A and B assets throughout Leasing volumes will continue to accelerate in 2014 as corporate confidence continues to strengthen. The gap between asking and effective rates has tightened over the past 12 months, will get tighter in the first half of 2015 and likely throughout The overall market shifted to landlord-favorable over the past 18 months after being tenant-favorable for a number of years. There continues to be more investor demand for Class A product than supply. Investor demand for Class B will increase during 2015 due to tenant activity increasing significantly as well as rents rising Davidson Road New lease: 900,000 s.f. Tenant: Target (fulfillment center) 4155 East Holmes Road Buyer: Exeter Seller: Aegon $34.0 M 970,400 s.f. $35 p.s.f. in jobs 1.3 m 0.4% 12.6% 3.1 m.s.f. 3.1 m.s.f S Crossroads Drive Expansion: 701,706 s.f. Tenant: GENCO 4836 Hickory Hill Road Buyer: Select Income REIT Seller: Crown Realty & Development $14.4 M 640,640 s.f. $23 p.s.f Holmes Road New lease: 220,635 s.f. Tenant: FedEx Supply Chain 4406 & 4430 Malone Road Buyer: Colony Capital Seller: Cobalt Capital $14.5 M 783,500 s.f. $19 p.s.f. stock (%) net construction industrial 226,497, % 13.9% 5,742,698 $ % 2.9% 3,040,760 1,245,400 Leased industrial 133,408, % 17.5% 1,750,308 $ % 2.9% 1,740, ,400 Warehouse & distribution 129,683, % 17.6% 1,378,621 $ % 3.3% 1,740, ,400 Manufacturing 3,770, % 13.7% 371,687 $ % 2.2% JLL United States Industrial Q4 2014

39 Miami-Dade Tourism and hospitality Increased residential construction International trade / local consumption Foreign capital New developer influx growth Strong tenant demand continued in the fourth quarter, particularly for spaces in the 10,000- to 30,000- square-foot range. Despite Miami s trade levels decreasing 8.9 percent this year, demand has been driven by increases in consumer consumption and construction activity. In addition, while tenant demand for high quality blocks of space remained strong, the supply of industrial land continues to shrink, keeping activity on progress. Also, an increase in industrial conversions to multifamily or mixed-use continued in order to keep pace with the strong population growth. Hialeah Gardens and North Central Dade, traditionally second-tier markets, have seen increased s due to the lack of land in more desired submarkets. In the long term, Medley will likely see robust new construction. Because of the proximity to the ports, we project new and current tenants will demand this area for higher quality, Class A space. Along with the infrastructure upgrades at PortMiami, government programs supporting perishable trade for perishable goods coming from Central and South America should precipitate the need for additional cold storage warehouse space over the next five years. Overall economic conditions in South Florida continue to improve with roughly an 11.0 percent increase in construction jobs. There are currently 7,800 permitted units in Miami-Dade County along with major mixed-use projects, such as Brickell City Centre. This will have a positive impact on industrial demands as building supply companies, retailers and logistics and distribution firms will experience greater space needs Northwest 125 th Street Month-to-month: 76,000 s.f. Tenant: Century Tire 7300 Corporate Center Drive Buyer: CBRE Global Investors Seller: Hines REIT $132.5 M 1,018,400 s.f. $130 p.s.f. in jobs 2.6 m 3.3% 7.3% 1.8 m.s.f. 1.2 m.s.f Northwest 74 th Street Relocation: 72,000 s.f. Tenant: Furniture Mart , NW 70 th Ave Buyer: DCT Boggy Creek Seller: Cabot Industrial Venture $26.5 M 307,300 s.f. $86.0 p.s.f Northwest 27 th Street Relocation: 50,000 s.f. Tenant: Goodman Distribution stock (%) net construction industrial 113,316, % 10.4% 1,142,156 $ % -1.0% 410,000 0 Leased industrial 86,288, % 12.8% 837,034 $ % 9.5% 410,000 0 Warehouse & distribution 78,992, % 12.4% 1,009,009 $ % 6.9% 410,000 0 Manufacturing 7,295, % 17.1% -171,975 $ % 4.4% JLL United States Industrial Q4 2014

40 Milwaukee Consumer products and household goods Manufacturing Business-friendly environment New developers entering market Milwaukee s unemployment rate declined for the fifth consecutive month and is down 150 basis points over that period. More than 2,200 jobs were added in the most recent monthly data from the BLS. The Milwaukee metro area has added more than 25,000 jobs year-over-year, a growth rate of 2.5 percent. The pipeline is deepening as an increasing number of build-to-suit, speculative and expansion projects have been spurred by strengthening demand for manufacturing and distribution space. A number of owner-users have purchased industrial properties to accommodate expansion needs. Capital markets has stabilized and top-performing products are beginning to sell investor interest is driven largely by quality and availability. in jobs 1.6 m 2.5% 10.0% 168,000 s.f. 44,000 s.f. Build-to-suit projects remain the likely scenario for manufacturers with specialized space requirements. The water technology industry continues to make great strides across the Milwaukee market and will likely become a driver of industrial activity in the near future. According to Choose Milwaukee, there are more than 120 water-related companies with local operations and the sector is a $10.5 billion market in the Milwaukee region, accounting for 4.0 percent of the total worldwide water business. Both the state and local levels have offered favorable incentives such as tax increment financing districts which have enabled Milwaukee manufacturers to re-shore and build expanding workforce sectors. Developers are becoming increasingly active in the region in order to address the low rate and rising demand. As momentum for new constructions picks up within certain submarkets, developers are seeking more land to keep up with the demand. Success in recapitalization by investors could lead to more opportunities for selling off investment properties as interest increases Ace Industrial Drive Renewal: 84,564 s.f. Tenant: Ace Worldwide Moving & Storage 4505, 4609, 4801 Woolworth Buyer: Phoenix Investors Seller: Van Brothers $2.8 M 270,213 s.f. $10 p.s.f North Third Street New lease: 78,082 s.f. Tenant: Boelter Cos. Inc North River Lane Buyer: STAG Industrial Inc. Seller: Icahn Enterprises $9.3 M 202,500 s.f. $45 p.s.f West Lincoln Avenue New lease: 41,000 s.f. Tenant: StorX South Grandview Parkway Buyer: STAG Industrial Inc. Seller: Joseph & Cynthia Kaplan $6.2 M 98,151 s.f. $63 p.s.f. stock (%) net construction industrial 173,159, % 8.6% 1,886,619 $ % 1.5% 937, ,000 Leased industrial 77,171, % 14.0% 1,134,403 $ % 2.3% 937, ,000 Warehouse & distribution 67,183, % 13.9% 1,574,057 $ % 2.3% 869, ,000 Manufacturing 9,988, % 13.9% 60,346 $ % 5.8% 68, JLL United States Industrial Q4 2014

41 Minneapolis / St. Paul Substantial increase in construction activity Limited modern bulk space Strong medical technology community Home to 18 Fortune 500 companies Educated and skilled workforce Active Agricultural and related companies In the most recent data from the BLS, the Minneapolis-St. Paul MSA hit a record level of area jobs for the second month in a row and saw its unemployment decrease 20 basis points to 3.0 percent. This continues to be the lowest unemployment rate among U.S. metro areas with at least one million residents. Nearly 10,000 industrial-using jobs were added in the first 11 months of 2014, led by an increase of more than 8,000 jobs in the manufacturing sector. The resurgence in manufacturing has lifted employment in this sector to its highest levels since Tenant demand remains strong and an active construction cycle is creating new options for industrial occupiers. More than 600,000 square feet of new speculative bulk product was delivered in the fourth quarter, 18.0 percent of which is leased. An additional 900,000 square feet is expected to deliver in the first quarter of 2015, 21.0 percent of which is preleased. in jobs 3.3 m 2.1% 11.3% 1.4 m.s.f. 1.4 m.s.f. Consistent, ongoing job gains in the industrial-using sectors will be important moving forward as an abundance of new space is coming to the market in Strong speculative activity, particularly in the Northwest submarket, is creating a number of new options for users. There is more than 2.0 million square feet of speculative product currently under construction in the metro area, much of it not yet leased. The data center supply in Minneapolis-St. Paul has reached an all-time high. At least 75,000-square-feet of raised-floor data center space (equivalent to 10 MW, or megawatts) in new, Tier III, purpose-built facilities has come online since the beginning of Additionally, there is a combined 36,200-squarefeet of capacity (5.45 MW) under construction in both new facilities and expansions. Locally, demand is increasing as companies now have options for both retail and wholesale co-location. Recently passed data center tax incentives allow tenants of qualifying co-location facilities a sales tax abatement on all power costs and a sales tax rebate on all hardware and software purchases. This is one of the most aggressive incentives in the country and has begun to put Minneapolis/St. Paul on the map for out-ofstate companies looking for co-location space Powers Boulevard New lease: 96,000 s.f. Tenant: Federal Package 935 Aldrin Drive Buyer: First Industrial Realty Trust Seller: Dart Advantage Warehouse $12.0 M 200,000 s.f. $60 p.s.f West 217 th Street Expansion: 119,328 s.f. Tenant: PAE Applied Technologies th Avenue North Buyer: Artis Seller: Onward Investors $15.7 M 106,519 s.f. $147 p.s.f 601 Lakeview Point Renewal: 72,430 s.f. Tenant: WESCO Distribution Sycamore Buyer: Vascular Solutions Seller: IRET Properties $7.2 M 79,297 s.f. $90 p.s.f.. stock (%) net construction industrial 188,588, % 10.1% 3,142,584 $ % 3.9% 3,793, ,847 Leased industrial 114,606, % 13.0% 4,369,597 $ % 4.6% 3,626, ,847 Warehouse & distribution 67,885, % 12.9% 3,425,291 $ % 3.7% 3,434, ,847 Manufacturing 46,721, % 13.2% 944,306 $ % 6.5% 192, JLL United States Industrial Q4 2014

42 Nashville Located at the crossroads of three interstates Major freight hub for CSX Transportation Automotive industry on the rise Business costs below the national average Land for Access to the South s population Absorption increased in the second half of the year and tenant activity is sharply up over this timeline. Supply of Class A bulk space is at minimum and rental rates are increasing in that product type. Midsized space and Class B demand is increasing and rents are going up. Nashville is starting to see spec in both bulk and mid-sized space. Panattoni began construction on a 1.0-million-square-foot build-to-suit in Beckwith Farms for Armour during the quarter. They also began construction on a 597,000-square-foot spec building in CentrePointe with expansion capabilities of up to 1,254,000 square feet. in jobs 1.7 m 2.7% 8.8% 2.1 m.s.f. 2.3 m.s.f.. Rents will continue to increase in both Class A and B assets into Leasing volumes will continue to accelerate in 2015 as corporate confidence continues to strengthen. The gap between asking and effective rates tightened throughout 2014 and will get tighter into The market has shifted to landlords favor after being tenant-favorable for several years. There continues to be more investor demand for Class A product than supply. Investor demand for Class B will increase throughout into 2015 due to tenant activity increasing significantly. Beckwith Farms New lease: 1,000,000 s.f. Tenant: Armour 538 Myatt Drive Renewal: 418,406 s.f. Tenant: DuPont 3815 Logistics Way Renewal: 319,345 s.f. Tenant: Genco 1550 Heil Quaker Boulevard Buyer: MDH Partners Seller: Prologis $7.45 M 238,996 s.f. $31 p.s.f Eastgate Boulevard Buyer: Patillo Seller: GE $15.55 M 410,700 s.f. $38 p.s.f. 540 New Salem Buyer: Stagg Industrial Seller: ECG New Salem $4.7 M 103,375 s.f. $45 p.s.f. stock (%) net construction industrial 200,239, % 10.3% 3,117,236 $ % 4.5% 1,145,541 0 Leased industrial 142,047, % 13.8% 2,447,671 $ % 5.1% 145,541 0 Warehouse & distribution 106,011, % 13.9% 1,763,399 $ % 5.9% 0 0 Manufacturing 30,946, % 15.0% 659,695 $ % 4.7% 145, JLL United States Industrial Q4 2014

43 North Bay, California Food and beverage distributors High capacity water supply & sewer systems Re-emergence of housing demand Lack of large blocks and growing regional demand from bulk distributors The rapid recovery of the wine industry and organic growth of other industries in the region have been key drivers for the Napa and Solano counties industrial market in recent quarters. Overall sits at 7.5 percent, down from 8.4 percent during the fourth quarter of There s a disparity in asking rental rates between the North Bay submarkets. The Napa/American Canyon submarket benefits from a strong concentration of wine-related distribution and storage companies that demand conditioned space and are willing to pay a premium for it. The Solano County submarkets east of Benicia attract a different user group that tend to require more traditional dry warehousing and dead-storage space at a significant discount from conditioned space. Year-to-date leasing activity totaled 1.3 million square feet, down nearly 45.0 percent from 2013; however, tenants are much more supply constrained today than they were months ago, leaving few options for tenants needing to expand or relocate their businesses. The market absorbed over 840,000 square feet; the demand was largely attributed to large distributors including Saxco International, Encore Glass and ICON Aircraft who expanded their warehousing and distribution footprint in the Solano market. Developers are responding to growing demand with over 4.7 million square feet of industrial s in the pipeline. The new construction will come as a relief to tenants who are having trouble finding suitable existing space to meet their needs. Panattoni Development Co. has a 270,000- square-foot rail-served warehouse building in the planning stages, expected to break ground this summer in American Canyon. Dennis Paulley s 531 Technology Way is nearly complete, a 103,000- square-foot warehouse building still available for lease. Greenwood Business Park in Napa has began construction on phase I of the 226,044-square-foot warehouse with intent to start phase II, a 78,731- square-foot separate component, in the coming quarters located on the corner of Devlin Road and Airport Boulevard. Cessna & Beechcraft Direct: 600,000 s.f. Tenant: Pacific Cycle 755 Southpoint Blvd Buyer: Sistema Plastics Seller: Stephens & Stephens LLC $7.3 M 88,466 s.f. $82 p.s.f. in jobs 0.5 m 1.4% 12.5% 744,312 s.f. 604,038 s.f. *population and employment figures based on Solano County only 4601 Park Road Direct: 27,000 s.f. Tenant: Benjamin Moore & Company 2400 Cordelia Road Buyer: AANW Seller: Adobe Lumber Undisclosed Price 130,000 s.f Cypress Drive Direct: 30,601 s.f. Tenant: Revive Brands 310 Sutton Pl Buyer: New England Land Co. Seller: Davenport Family Trust $5 M 73,000 s.f. $68 p.s.f. stock (%) net construction industrial 42,530, % 10.7% 842,919 $ % -8.7% 1,113,244 0 Leased industrial 32,343, % 12.1% 883,719 $ % -9.4% 1,113,244 0 Warehouse & distribution 26,502, % 11.8% 778,297 $ % -7.5% 1,113,244 0 Manufacturing 5,617, % 13.4% 105,422 $ % -19.2% JLL United States Industrial Q4 2014

44 Northern New Jersey State incentive programs Limited available Class A stock Low supply of big box space Class A deliveries in the Port submarket Port re projects Northern New Jersey witnessed a strong end to the year with just over 700,00 square feet of net and 1.7 million square feet of space leased during the quarter, the majority of which will not take occupancy until s for net reached more than 2.6 million square feet thanks in large part to several build-to-suit projects. Rental rates continue to climb upward, gaining 6.8 percent over the course of the year, but still remain 13.4 percent off their pre-recession highs. However, many Class A assets have reached all time high asking rental rates. The Meadowlands remained one of most attractive submarkets in the state recording more than 480,000 square feet of net for the quarter. The Meadowlands continues to benefit from demand by midsize and small entrepreneurial users. Nearly 65.0 percent of the in the quarter came from leases between 20,000 and 85,000 square feet. Class A in the submarket appears elevated. However, this is only temporary as one large block of space is being renovated and will be occupied as of first quarter of 2015, the effect of which should normalize below 8.0 percent. The fourth quarter concluded the year with strong growth in key submarkets; however, year-to-date fundamentals continue to be inflated by build-to-suit deliveries which accounted for approximately 57.0 percent of the year s net. With no similar completions scheduled for 2015, net is expected to normalize and return closer to its historical averages as fundamentals will once again be driven by current supply and demand levels, as opposed to older deals which had not yet taken effect. Many of the newly constructed speculative buildings still remain untenanted. These large blocks of available space weigh on the Class A rates in numerous key submarkets. That said, tenants with large space requirements continue to actively tour these sites. If this activity converts over the next six months, landlords and developers may become more bullish and increase rental rates even further. 125 Pennsylvania Avenue, Kearny Expansion: 278,100 s.f. Tenant: Arka Sarcona Management 300 Fairfield Road, Fairfield Buyer: Stolz Real Estate Seller: Fairfield Bab Group LLC $51.6 M 418,000 s.f. $123 p.s.f. in jobs 8.9 m 0.0% 7.2% 0.4 m.s.f. 0.7 m.s.f. 201 Bay Avenue, Elizabeth New lease: 202,000 s.f. Tenant: P.Judge & Sons 680 Bellville Turnpike, Kearny Buyer: TIAA- CREF Seller: Russo Development $32.0 M 135,000 s.f. $237 p.s.f. 75 Amor Avenue, Carlstadt Renewed: 79,670 s.f. Tenant: Atlantic Plywood 526 US Highway 46, Teterboro Buyer: TIAA-CREF Seller: Ancorp Realty $10.0 M 74,500 s.f. $ p.s.f. stock (%) net construction industrial 351,608, % 10.8% 2,659,092 $ % 6.8% 322,000 0 Leased industrial 252,589, % 13.5% 1,687,543 $ % 5.4% 322,000 0 Warehouse & distribution 184,281, % 13.9% 760,571 $ % 4.6% 322,000 0 Manufacturing 43,244, % 15.4% -397,961 $ % -1.9.% JLL United States Industrial Q4 2014

45 Orange County Lack of available blocks over 200,000 s.f. Well-educated, local workforce High demand for modern industrial space Port of Long Beach distribution Dissipating uncertainty Increasing competition for large blocks Orange County added 33,500 jobs in The main contributor to these gains was increases in the education and health services sector, which increased its total labor force by 15.3 percent. Demand in industrial-linked sectors like TTU (Trade, Transportation and Utilities) also posted gains of 900 jobs. In the fourth quarter, O.C. recorded a minor loss of occupancy for the first time since the fourth quarter of However, the market ended 2014 with a year-to-date total of 2.5 million square feet of positive net, despite the addition of 625,000 square feet. A low level of new supply, coupled with a rise in demand, is putting upward pressure on rental rates and leading the market to experience its lowest rate since Orange County is clearly experiencing a lack of supply for blocks over 200,000 square feet. Currently, there are only six spaces available in this size range. Based on an evaluation of current tenants in the market, deals under negotiation and space availability, the 40,000- to 80,000-square-foot size segment will see most of the market s activity in As the rate dips lower, and rental rates rise in existing properties, the price of developable land in Orange County will continue to rise in lockstep. The front page story in 2015 is anticipated to be rent growth in the 8.0 percent range. Market leverage is clearly landlord-favorable but opportunities do exist for tenants who are looking for smaller spaces and are willing to take down lower quality buildings, of which some options still remain. Newly constructed buildings will command an approximate 20.0 percent rental premium compared to similar buildings in size and quality. Tenants will oblige in paying the rate. Given current demand levels, Orange County market could add 2.0 million square feet of new construction and still experience no adverse affects on rental or rates. Aerospace and consumer goods will continue to expand and drive demand for space South Placentia Avenue Fullerton New lease: 127,375 s.f. Tenant: Engineered Floors in jobs 3.0 m 1.2% 5.5% 0.5 m.s.f. 0.6 m.s.f South Page Court Anaheim New lease: 98,058 s.f. Tenant: Eleganza Tiles East Lambert Road 1261 South Lyon Street Fullerton Santa Ana Buyer: BlackRock, Inc. Buyer: Newport Asset Management Seller: Clarion Partners Seller: Olen Properties Corp. $55.0 M 406,261 s.f. $ p.s.f. $30.7 M 184,750 s.f. $ p.s.f Graham Street Huntington Beach Renewal: 76,180 s.f. Tenant: Freddie Georges Production 6545 Caballero Buena Park Buyer: Prologis Seller: BP Westport Properties $18.4 M 167,200 s.f. $ p.s.f. stock (%) net construction industrial 260,253, % 6.6% 2,510,623 $ % 5.3% 266, ,950 Leased industrial 198,267, % 0.8% 1,808,487 $ % 6.4% 0 0 Warehouse & distribution 129,650, % 6.5% 15,785,789 $ % 7.6% 266, ,950 Manufacturing 68,617, % 6.8% 229,898 $ % 4.2% JLL United States Industrial Q4 2014

46 Orlando Tourism & Hospitality Defense manufacturing and research Pharmaceutical manufacturing and distribution Homebuilders and construction e-commerce and air cargo Availability of entitled land The industrial market in Orlando continued to tighten during the final quarter of Overall demand captured roughly 0.4 percent of the total stock as a net total of 463,000 square feet of space was removed from the market, marking the fifth consecutive quarter of positive net. On an annual basis, approximately 1.8 million square feet or 1.8 percent of the total stock was removed from the market in 2014, a 12.0 percent increase from As a result of consistent demand growth, the overall total rate ended the year at 8.9 percent, down 20 basis points from the third quarter and down 130 points from a year ago. Furthermore, the rate came in well below its historic (10-year) average of 9.9 percent. The strong performance has caught the attention of developers and investors, as 2.2 million square feet has been developed or is currently under construction. Robust demand and diminishing available supply continues to support increasingly higher rental rates. Average asking rates for the overall market are up 6.3 percent from a year ago, marking the eighth consecutive quarter of annual rent growth. Over the last eight quarters, annual rent growth averaged 4.4 percent. Conditions are ripe for new in Orlando s industrial market, particularly in the south Orlando submarkets, due in part to the close proximity to Orlando International Airport s Air Cargo facilities and the CSX rail hub. A combination of functionally obsolete industrial product, increasing demand and rising rental rates will likely be key drivers of new industrial heading into Already there is 2.6 million square feet proposed in the market. While we expect to see a pickup in activity, a competitive leasing environment will keep leverage skewed toward landlords in the upcoming year. 3675/6217 Emperor Drive Renewal: 169,000 s.f. Tenant: The SYGMA Network, Inc South Division Drive Buyer: Maudlin Int l Trucks Seller: FL Baking Co of Orlando $3.3 M 152,500 s.f. $22 p.s.f. in jobs 2.3 m 3.4% 9.9% 1.5 m.s.f. 1.6 m.s.f All American Boulevard Renewal: 102,300 s.f. Tenant: Manning Building Supplies 1815 Cypress Lake Drive Buyer: Anastasia Confections Seller: LDL Holdings Florida $6.0 M 80,400 s.f. $74 p.s.f Commerce Center Drive New lease: 40,000 s.f. Tenant: Univar USA, Inc General Drive Buyer: Mac-ofl Properties Seller: Josan Property Ex $1.8 M 40,000 s.f. $45 p.s.f. stock (%) net construction industrial 103,449, % 12.4% 1,830,277 $ % 6.3% 926,502 1,315,804 Leased industrial 68,387, % 16.2% 1,156,839 $ % 6.9% 443,422 1,315,804 Warehouse & distribution 57,467, % 15.2% 873,100 $ % 9.4% 443,422 1,315,804 Manufacturing 10,920, % 21.4% 283,739 $ % -0.6% JLL United States Industrial Q4 2014

47 Palm Beach Tourism and hospitality Agriculture Intermodal transportation links Cheaper real estate Relatively business-friendly environment Build-to-suit opportunities In the fourth quarter, decreased by about 291,000 square feet from the year. Nearly 150,000 square feet of negative is attributed to Boston Paper and Medline Industries which mitigated demand from the broader tenant base. Local economic recovery continues and tenant confidence proves strong with overall rates decreasing. It is reaching a lowest record since 2009, when rates peaked at 13.1 percent. ALDI, the global discount supermarket, will deliver 650,000 square feet for their South Florida distribution center. This is the largest delivery in recent quarters and will complete in the first quarter of In addition, two new s west of the turnpike will add an additional 100,000 square feet to the market, making this region one of the fastest growing submarkets within Palm Beach. in jobs 1.3 m 4.5% 8.2% 584 k.s.f. 0.3 m.s.f. The Palm Beach County Inland port project, which is expected to deliver in 2015, combined with the All Aboard Florida high-speed rail service proposed in South Florida, will increase tenant demand in Palm Beach, particularly from building supply companies. A demand for higher quality industrial space will increase opportunity for more build-to-suit projects and speculative s in West Palm Beach. Investment activity has been particularly strong this year as investors see opportunity in the market s recovery. In 2014, $94.7 million in property trades occurred up from $51.7 million last year the highest level since This, coupled with lack of new deliveries, bodes well for the market going forward in terms of rent growth Dr. Martin Luther King Jr Boulevard New lease: 24,000 s.f. Tenant: Extreme Speed Motorsports 3301 Electronics Way Buyer: La Boheme Properties Inc. Seller: Fortress Investment Group $5.0 M 141, 000 s.f. $35 p.s.f North 10 th Avenue New lease: 13,000 s.f. Tenant: True Green Corporation rd Avenue Buyer: Exeter Property Group Seller: Exeter Florida $16.1 M 152,400 s.f. $106 p.s.f. stock (%) net construction industrial 26,539, % 9.4% 542,236 $ % 9.08% 750,000 0 Leased industrial 17,993, % 12.1% 445,206 $ % 4.33% 100,000 0 Warehouse & distribution 14,226, % 12.3% 328,925 $ % 3.40% 100,000 0 Manufacturing 3,767, % 11.4% 116,281 $ % 1.97% JLL United States Industrial Q4 2014

48 Philadelphia / Harrisburg Declining availabilities of quality space Heavy construction activity Proximity to population Channel shifts from retail to e-commerce Transportation system (rail, parcel hubs and highways) Philadelphia/Harrisburg posted strong market activity and as a result declined to 8.4 percent. Construction deliveries were up considerably from the previous quarter to nearly 4.6 million square feet of which 95.0 percent was preleased. Meanwhile an additional 4.3 million square feet of construction started throughout the fourth quarter to bring current construction levels to 12.3 million square feet. Nearly 60.0 percent of all fourth quarter starts were speculative, indicating growing confidence in the market as available space dwindles and fundamentals remain strong. Several major leases were signed during the fourth quarter including a 624,000-square-foot lease to Target at 325 South Salem Church Road in York, a 677,088-square-foot lease to Primark at 2485 Commerce Center Boulevard in Bethlehem, and two 550,000-square-foot renewals for Bridgestone Tires and Unisource, at 2689 Route 22 in Fredericksburg and 4501 Westport Drive in Mechanicsburg, respectively. There were six investment sales during the fourth quarter inclusive of three portfolios, 13 buildings and nearly 2.7 million square feet. Such limited opportunities have investors focused on as a means acquisition within the market. This continues to put greater pressure on well-located sites in the region Commerce Center Boulevard New lease: 677,088 s.f. Tenant: Primark in jobs 9.7 m 1.2% 9.1% 8.8 m.s.f. 8.8 m.s.f. 325 South Salem Church Road New lease: 624,000 s.f. Tenant: Target 2689 Route 22 Renewal: 550,000 s.f. Tenant: Bridgestone Tires Speculative construction is expected to increase as a result of dwindling existing availabilities and strong demand. Due to robust construction over the past several years, decreasing numbers of quality entitled sites are forcing developers to compete for control of sites once overlooked during a time when the pipeline had healthy inventories. Additionally, expect developers to focus on controllable land sites with infrastructure or location advantages at the edges or outside historically core locations. Development site prices should continue to rise, which in turn will convert to higher rental rates across the market as developers chase their required yield. 550 Oak Ridge Road Buyer: Chambers Street Properties Seller: KBS REIT II 615,600 s.f. $66.11 p.s.f. 8 Lee Boulevard Buyer: Exeter Property Group Seller: Americold 169,773 s.f. $55.78 p.s.f. 36 East Main Street Buyer: Industrial Property Group Seller: Seagis Property Group 146,590 s.f. $57.13 p.s.f. stock (%) net construction industrial 826,004, % 12.6% 7,937,296 $ % -1.0% 12,327,552 4,581,264 Leased industrial 525,723, % 16.0% 6,282,358 $ % -1.7% 8,520,855 4,221,264 Warehouse & distribution 386,773, % 17.1% 4,829,745 $ % -2.2% 8,702,435 4,130,900 Manufacturing 111,702, % 14.9% 884,092 $ % -1.0% 0 90, JLL United States Industrial Q4 2014

49 Phoenix Transportation links to California markets Favorable business environment Low natural disaster risk Young, affordable, qualified work force Right-to-work employment environment Large developable land inventory The outlook for 2015 is bright as forecasts expect employment growth to be much more diverse. Trade will remain a strong catalyst for the industrial market spurring new growth, but construction and manufacturing are also expected to bounce back in the new year. net year-to-date is just over 7.1 million square feet, after the third quarter added 765,148 square feet of additional gains. Strong has helped fill vacant spaces, despite an active pipeline across the Valley. Phoenix has been struggling to fill its largest blocks of space for several quarters now. Currently, there are 16 available blocks over 250,000 square feet across the Valley waiting to be occupied. The last 12 months were also a period of very active as renewed confidence among developers has led to over 6.8 million square feet of new projects being delivered. Users that are currently active in the market are finding it much more difficult to find spaces that will accommodate their new requirements, such as greater clear heights. With limited options, users are simply waiting or are building their own facilities. 402 South 54th Place New lease: 248,900 s.f. Tenant: Young s Market in jobs 4.5 m 2.9% 10.4% 3.9 m.s.f. 5.3 m.s.f West Sherman Street New lease: 70,536 s.f. Tenant: AZ Partsmaster 1402 South 40th Avenue New lease: 71,903 s.f. Tenant: Revlon Phoenix s economy is firing on all cylinders with the exception of a stagnant construction sector. Employment continues to outpace national growth, population gains are returning to pre-recessionary levels, and the Valley remains attractive with cost advantages relative to regional peers. Despite this robust pipeline, healthy levels of leasing activity and demand are expected to outpace construction as seen in Phoenix is slowly transitioning to a more landlord favorable market due to tightening and owners will continue to push rates even higher South Roosevelt Street Buyer: DCT Industrial Trust Seller: Deutsche A&W Management $9.6 M 129,166 s.f. $74 p.s.f South Wilson St Buyer: DCT Industrial Trust Seller: Deutsche A&W Management $8.4 M 112,655 s.f. $74 p.s.f & 2400 W Union Hills Drive Buyer: Greenwood & McKenzie Seller: Sun State Builders LLC $9.6 M 113,880 s.f. $84 p.s.f. stock (%) net construction industrial 256,408, % 13.2% 7,156,969 $ % 2.7% 3,922,684 6,821,166 Leased industrial 158,507, % 19.0% 2,902,126 $ % 1.0% 2,399,016 2,098,945 Warehouse & distribution 133,468, % 18.9% 2,138,748 $ % 0.2% 2,399,016 1,973,977 Manufacturing 33,399, % 22.1% 430,203 $ % 14.5% 0 124, JLL United States Industrial Q4 2014

50 Pittsburgh Oil and natural gas exploration Topography presents challenges Limited large blocks of premium space Resilient healthcare & finance sectors Relative strength of metro economy Growth in value-add manufacturing According to the most recent estimates from the BLS, total nonfarm employment in Pittsburgh stood at ~1.2 million payrolls, representing an annualized increase of 9,100 jobs or 80 basis points. Meanwhile, unemployment decreased 170 basis points year-over-year to 4.3 percent. Jobs growth among industrial sectors in Pittsburgh has been in positive territory in recent months, recording an annualized net gain of 4,500 jobs across the metro. The Pittsburgh industrial market is comprised of million square feet of warehouse, distribution and manufacturing space. Roughly 67.0 percent is competitive inventory, while the remaining 33.0 percent is owner-occupied. There is an additional 21.3 million square feet of flex space spread across the market. Industrial in Pittsburgh at the end of the fourth quarter was 7.8 percent, representing a decrease of 20 basis points year-over-year. Meanwhile, the average asking rent for industrial space across the Pittsburgh market was recorded at $4.94 per square foot at the end of fourth quarter, representing an increase of $0.09 per square foot or 1.9 percent year-over-year. Approximately 630,000 square feet of warehouse, distribution and manufacturing product is currently under construction. An additional 104,000 square feet of flex space has also been identified as currently under construction. Roughly 57.0 percent of the planned space will be owner-occupied, while the remaining 43.0 percent will be leased. 555 West Park Drive New lease: 75,000 s.f. Tenant: FedEx in jobs 2.4 m -0.5% 10.8% 0.6 m.s.f. 0.5 m.s.f th Street New lease: 50,000 s.f. Tenant: Edward Marc Brands 464 Galiffa Drive New lease: 37,000 s.f. Tenant: Cactus Wellhead While the tight rate will prompt some construction over the forecast, only modest demand growth is expected, which will curb developers from adding a significant amount of new supply to the market. Asking rents are expected to continue their gradual growth within key submarkets including North, West, Westmoreland and Washington. Though, declining fundamentals in other submarkets will keep the metrowide average asking rent relatively und over the next few quarters. Tenants will continue to seek flexibility to allow them to properly navigate the uncertain global economy th Street Buyer: Wilson-McGinley Seller: Commonwealth Warehouse $9.5 M 169,000 s.f. $56 p.s.f. 367 Morganza Road Buyer: KVKS Corporation Seller: William & Carolyn Byham $3.4 M 65,700 s.f. $52 p.s.f. 134 Industrial Park Road Buyer: Owens & Minor Distribution Seller: Senior Housing Properties Trust $6.0 M 235,000 s.f. $26 p.s.f. stock (%) net construction industrial 132,804, % 12.4% 605,653 $ % 1.9% 630, ,000 Leased industrial 89,291, % 15.0% 182,019 $ % 1.3% 210,000 0 Warehouse & distribution 62,438, % 13.4% 945,709 $ % 1.2% 210,000 0 Manufacturing 26,852, % 18.6% -763,690 $ % 3.9% JLL United States Industrial Q4 2014

51 Portland Strong traded-sector economy Growing trend of regional distribution centers Dwindling supply of functional space Appetite for institutional-grade product Diverse pool of small- and mid-size users Speculative construction ramping up Portland s economy has experienced robust and diverse growth over the past year. Employment in the region has surpassed the pre-recession peak by 34,600, adding nearly 33,000 payrolls in The fourth quarter posted a strong level of demand with 406,896 square feet of net, slightly below the 10-year average of 531,411 square feet, but bringing year-to-date net to 2.5 million square feet, higher than every year since Vacancy increased 10 basis points since the third quarter, mostly due to the delivery of 500,000+ square feet of speculative space that came onto the market largely vacant, but still marking 2014 as the year in which the Portland market achieved a 20+ year historic low of 4.7 percent in the third quarter. Pricing has increased notably, up 8.5 percent year-over-year, now at a new high average asking rent of $0.51 per square foot per month. Construction activity has increased dramatically over the past year. The fourth quarter delivered 534,200 square feet of space, bringing 2014 totals to 1.2 million square feet, higher than every previous year since The construction pipeline has ramped up with speculative projects, now with over 2.0 million square feet under construction and a spate of planned set to break ground in early Nearly 500,000 square feet of predominantly speculative space is expected to hit the market in the first quarter of 2015 with the delivery of Gateway Corporate Center and Prologis PDX 20, both in the NE Columbia Corridor. Although Absorption is expected to remain at strong levels, will likely bump up slightly. Interstate Crossroads Distribution Center and Cameron Distribution Center, both speculative projects in the NE Columbia Corridor, are under construction and are expected to bring an additional 800,000+ square feet of space to the submarket by the end of A number of planned speculative projects are expected to break ground in early 2015, which would collectively bring over 3.0 million square feet of warehouse/distribution space to the market. Cascade Distribution Center New lease: 184,860 s.f. Tenant: Grocery Outlet Holman Portfolio - Clackamas Buyer: Hawthorne Investment Co. Seller: Dividend Capital $32.9 M 430,799 s.f. $67 p.s.f. in jobs 2.3 m 3.3% 8.3% 2.3 m.s.f. 2.3 m.s.f. Kelley Point Distribution Center Extension: 136,401 s.f. Tenant: Bay Valley Holman Portfolio NW Portland Buyer: Hawthorne Investment Co. Seller: Industrial Property Trust $23.7 M 346,671 s.f. $68 p.s.f. Marine Drive Distribution Center New lease: 110,000 s.f. Tenant: America s Tire 7300 NW Evergreen Pkwy Buyer: Intel Corp. Seller: Maxim Integrated Products $23.2 M 144,200 s.f. $161 p.s.f. stock (%) net construction industrial 164,980, % 6.7% 2,491,006 $ % 8.5% 2,086,329 1,184,233 Leased industrial 129,005, % 8.4% 2,295,180 $ % 7.0% 1,353,249 1,053,335 Warehouse & distribution 106,006, % 8.4% 2,401,886 $ % 8.5% 1,353, ,835 Manufacturing 22,999, % 8.5% -108,206 $ % 8.6% 0 82, JLL United States Industrial Q4 2014

52 Reno / Sparks Leverage shifting to landlords Fewer options for large block space Speculative under way Positive year-over-year job growth Segmented recovery Increasing rents Reno continues to see marked improvement in its industrial market.. There was 844,390 square feet of space absorbed in the fourth quarter of This is up from the 732,143 square feet in the third quarter. The rate continues its downward trend to 8.0 percent. TRIC decreased to 9.0 percent, while West Reno, the Reno s smallest submarket, had 0.2 percent. Landlords are pushing rental rates. Most available large block space is being quoted at an average of $3.84 per square foot, on a NNN basis. Smaller spaces from 25,000 to 100,000 square feet average $5.50 per square foot, on a NNN basis. There are four buildings under construction: The Zulily building in TRIC, and 395 Logisticenter in the North Valleys market., that was recently leased by Amazon.com, SanMar in Spanish Springs and the new PETCO building in North Valleys. Rental rates vary based upon area, building condition, power, clear height, loading and other factors. With both activity and increasing, the market continues to move to landlords favor. Some square footage ranges are virtually unavailable in some submarkets. Larger transactions include Amazon.com and PETCO; both in North Valleys. Spec projects are under consideration in several submarkets. Dermody has indicated they will start construction on 400,000- and 220,000-square-foot facilities for Amazon at Logisticenter 395. Tesla s pending purchase and new construction of the gigafactory could have a major impact on the area. Some estimates cite 6,000 new jobs and 1.0 million square feet of additional industrial space. SJS has closed on land in TRIC and is likely to break ground on a 600K DC in February. KTR is looking to construct 565K to be completed later this year. Industrial space users will see increasing rents over the next few years South Virginia, Reno New lease: 624,000 s.f. Tenant: Amazon.com Sierra Commerce Park, Sparks Buyer: LBA Seller: USAA $49.0 M 1.5 m.s.f. $32.67 p.s.f.. in jobs Historic average 0.4 m 1.6% 12.6% 1.0 m.s.f. 0.9 m.s.f Capital Boulevard, Reno New lease: 105,213 s.f. Tenant: Lawson Products 9025 Moya, Reno Buyer: Stag LLC Seller: Pancal LLC $6.45 M 87,264 s.f. $73.81 p.s.f Lear, Reno New lease: 153,013 s.f. Tenant: CEVA 4930 Energy Way, Reno Buyer: Vabadus Seller: Fremont LLC $2.95 M 38,904 s.f. $75.83 p.s.f. stock (%) net construction industrial 75,923, % 11.5% 2,015,369 $ % 10.2% 1,227, ,010 Leased industrial 56,527, % 13.5% 1,577,363 $ % 9.9% 624, ,010 Warehouse & distribution 49,187, % 13.6% 1,447,078 $ % 10.4% 624, ,010 Manufacturing 4,819, % 11.6% 125,457 $ % 1.2% JLL United States Industrial Q4 2014

53 Richmond Above-average state and local incentives Highly skilled, low cost labor force Developing high-tech manufacturing Low cost of living Proximity to Port of Virginia and DC Right-to-work state 2014 produced nearly 1.5 million square feet of positive, 27.1 percent of which was due to the delivery and move in of Medline s 404,200-square-foot distribution center in the Meadowville Technology Park. Lumber Liquidators delayed move in at their new 995,792-square-foot manufacturing and distribution center will boost net in the first quarter of Class A has contracted to 3.5 percent, a 180 basis point contraction since the fourth quarter of Class A asking rents have also appreciated by 15.8 percent over the past 12 months and 3.6 percent quarter to quarter, reaching $4.32 per square foot. A small dose (129,000 square feet) of speculative construction has been well received, but has not produced any signed leases since construction commenced in the second quarter this year. This is in part to the s asking rates of $5.25 to $5.75 per square foot, which is top of the market pricing in Richmond. Expect centered around large-scale technology and commerce parks with existing infrastructure. Speculative construction will be concentrated in smaller parks with immediate access to major interstates. Medline s consolidation to its new distribution center in the I-95/I-295/Rt-10 Corridor opened a 116,000- square-foot block in the Southwest Quadrant upon completion, but blocks over 250,000 square feet are nonexistent. Due to no Class A blocks available between 250,000 and 500,000 square feet, large requirements will be forced to new construction, eliminating Richmond as a contender for an immediate-need requirement. Overall lack of Class A and Class B space will inhibit Richmond s growth over the next 18 to 24 months Westwood Avenue Expansion: 36,765 s.f. Tenant: APS Express 5000 Commerce Way (Amazon) Buyer: Cole Capital Seller: USAA $58.9M 1,000,000 s.f. $58 p.s.f. in jobs Historic average Historic average 1.3 m 1.9% 9.7% 0.1 m.s.f. 0.5 m.s.f. 801 Liberty Way Renewal: 33,661 s.f. Tenant: Merit Medical Systems 701 Algroup Way Buyer: Realty Income Group Seller: Lawson Mardon USA $16.7 M 181,982 s.f. $92 p.s.f Magnolia Road New lease: 25,004 s.f. Tenant: R.E. Michel 1700 Ruffin Mill Road Buyer: Exeter Group Seller: DRA Advisors $18.4 M 287,318 s.f. $92 p.s.f. stock (%) net construction industrial 79,998, % 12.0% 1,489,007 $ % 4.7% 389,660 1,399,992 Leased industrial 48,935, % 13.7% 1,004,332 $ % 4.6% 129,660 0 Warehouse & distribution 38,090, % 13.5% 838,627 $ % 5.7% 129,660 0 Manufacturing 10,844, % 14.3% 165,705 $ % -0.4% JLL United States Industrial Q4 2014

54 Sacramento Sales & service-related users Availability of Class A product Big-box demand Relatively business-friendly environment Stabilized asking lease rates Improving housing sector The industrial real estate sector continued to tighten during the fourth quarter with increased tenant demand, declining blocks of space, and steady asking rental rates. Vacancy fell 2.1 percent from a year earlier to 9.8 percent, surpassing the prior cyclical low from Vacancy among Class A distribution facilities is much lower, falling to 6.9 percent, leaving tenants few existing alternatives along desirable logistics corridors. Overall asking rental rates remained largely und quarter-over-quarter and decreased by 2.0 percent in the last 12 months. This was partially due to the of Class A industrial space, which makes up the higher tier of asking rents. Limited new construction outside of West Sacramento and continued demand from distributors and multitenant occupiers will help landlords to push rates over the next months. Year-to-date topped 4.2 million square feet across all product types, including Flex/R&D, surpassing levels last seen in Demand was diverse and characterized by both build-to-suit construction, leasing and user sale activity. Activity within Sacramento s sweet spot, characterized by leases 25,000 to 75,000 square feet, increased throughout the year, a sign that local businesses are gaining confidence in the local economy and expanding their businesses. Vacancy rates declined year-over-year across the majority of Sacramento s submarkets, indicating that businesses are expanding alongside the improving regional economy. Larger occupiers face an increasingly competitive leasing environment with few existing modern distribution facilities available along desirable transportation corridors. With limited new construction in the pipeline, rates will continue to compress in both primary and secondary submarkets leading to a sustained period of rent growth in the quarters to come. Developers with shovel-ready sites will continue to see interest from larger users soliciting build-to-suit projects and will likely continue to phase in new speculative s in submarkets where supply is limited and demand warrants such construction Elder Creek Road Direct: 220,000 s.f. Tenant: Rex Moore Electrical 8301 Belvedere Avenue Buyer: LDK Investments Seller: Bernard Osher Trust $8.3 M 348,000 s.f. $24 p.s.f. in jobs 2.2 m 2.6% 11.9% 1.1 m.s.f. 0.7 m.s.f Florin Perkins Road Direct: 159,275 s.f. Tenant: Hydra Logistics 18 N Pioneer Avenue Buyer: Mendocino Forest Products Seller: Cavco Industries $4.6 M 154,000 s.f. $31 p.s.f Trade Center Drive Direct: 20,094 s.f. Tenant: Solar City 2150 Bell Avenue Buyer: McGuire and Hestor Seller: Harrison Alan Willendrup $2.4 M 32,400 s.f. $75 p.s.f. stock (%) net construction industrial 140,502, % 11.2% 3,869,599 $ % -2.1% 224,058 0 Leased industrial 100,993, % 14.5% 3,087,743 $ % -2.7% 224,058 0 Warehouse & distribution 76,306, % 13.4% 2,749,496 $ % 1.0% 224,058 0 Manufacturing 16,851, % 21.9% 218,332 $ % -19.0% JLL United States Industrial Q4 2014

55 Salt Lake City Crossroads of the West I-80, I-15, and Intermodal Hub Low power rates with manufacturing e-commerce Right-to-work employment environment Young, affordable, qualified work force The Salt Lake market continued to prove it s one of the nation s premier hubs for distribution. As a result, a number of users either made new or renewed long-term commitments to Utah. Demand is increasing, along with rental rates, in the Class A bulk distribution and flex sectors. There is minimal industrial land remaining within the Salt Lake Valley. The Great Salt Lake to the west and the Wasatch Mountains to the east limit the amount of land that can be developed. Class A space is in short supply relative to demand. Additionally, tenant requirements and distribution/retail channel shifts are demanding tailored building specifications. This has resulted in an optimistic outlook for industrial within Utah. Investor confidence is at a record high, with major developers having staked their land positions. Construction is expected to continue, leading market activity, due, in part, to comparative replacement costs, functional obsolescence and tightening Class A availabilities. More than 2.4 million square feet of will be delivered within the next 12 months, with a planned total of 6.7 million square feet. Due to more than 2.4 million square feet of new inventory that will be delivered throughout 2015, we should see rates increase two (2) basis points, while lease rates will flatten until these new speculative projects become stabilized. Strong employment growth and recovery in the housing market has been steady over the last few quarters, which will translate into increased demand for industrial product. Leasing volumes will continue to accelerate over 2015 as confidence continues to strengthen. Investment sales activity is at its peak since the recession, which will continue during The challenge is finding product to purchase. Speculative construction will drive landlords with existing product to become creative to win tenants. Growth will remain steady within manufacturing, composites, aerospace and e-commerce. 543 North Neil Armstrong Road New lease: 60,051 s.f. Tenant: Perfectly Posh 1998 South 5070 West Buyer: GI Partners Seller: IDI Gazeley $27.7 M 416,364 s.f. $66.61 p.s.f. in jobs 1.1 m 2.6% 4.9% 2.6 m.s.f. 2.7 m.s.f West California Avenue Renewal: 101,607 s.f. Tenant: Interwest Transport 3490 West 1802 South Buyer: Meniscus Group Seller: Sun Products $12.1 M 418,092 s.f. $28.94 p.s.f South 5200 West New lease: 50,213 s.f. Tenant: Patriot Supply Store 650 South 300 West Buyer: Atmosphere Seller: BH Properties $3.1 M 52,000 s.f. $59 p.s.f. stock (%) net construction industrial 181,162, % 8.5% -513,080 $ % 4.7% 2,510,815 0 Leased industrial 138,470, % 10.0% -539,165 $ % 4.3% 1,763,532 0 Warehouse & distribution 98,838, % 11.4% -629,763 $ % 4.1% 1,740,184 0 Manufacturing 31,469, % 6.6% 141,190 $ % 6.1% 100, JLL United States Industrial Q4 2014

56 San Antonio Diverse, counter-cyclical business sectors Proximity to major interstate highways Corporate manufacturing activity Eagle Ford Shale activity Business-friendly environment Attractive local and state incentives For the 12 months ending November 2014, San Antonio s jobs increased by 3.2 percent, ranking it 12th among the largest 50 metros in the country. Most notably, IBEX Global accounted for approximately 1,000 of those new jobs. Unemployment in November 2014 was a mere 4.3 percent in the city, compared to a rate of 4.6 percent in Texas and 5.5 percent nationally. San Antonio s unemployment rate was the 6th lowest among the largest 50 metro areas. Vacancy across the San Antonio metro continues to decline, pushing rents even higher. A dearth of availability at reasonable rates has led to tenants seeking creative solutions to their space needs, whether it be leasing space in nontraditional submarkets, buying a property, or negotiating a build-tosuit project. Though the decline in oil prices has slowed activity in the upstream oil sector, overall activity in the Eagle Ford Shale is still strong. Due to the strength and diversity of the San Antonio market as a whole, it is unlikely the dip in oil prices will have a substantial effect on leasing activity of industrial space, though spec construction projects slated to break ground this year could be put on hold until demand is reestablished. Enterprise Industrial Park New lease: 127,756 s.f. Tenant: Keystone Automotive in jobs 2.2 m 3.2% 7.9% 1.7 m.s.f. 1.3 m.s.f. Perrin Creek Corporate Bldg 1 New lease: 70,400 s.f. Tenant: Mattress Firm Enterprise Industrial Park New lease: 52,893 s.f. Tenant: Goodman Networks Ridgewood Parkway Buyer: Cole Office & Industrial REIT Seller: Ryan Companies $12.8 M 58,000 s.f. $220 p.s.f. PanAm Distribution Ctr (6 Bldgs) Buyer: Stonelake Capital Partners Seller: BJT Properties Undisclosed 1,181,516 s.f. City Park Est (10 Bldgs) Buyer: Catellus Seller: B & C Capital Undisclosed 693,866 s.f. stock (%) net construction industrial 91,444, % 9.8% 472,700 $ % 8.6% 803, Leased industrial 70,598, % 11.4% 641,844 $ % 7.8% 803,028 0 Warehouse & distribution 48,622, % 10.5% 304,877 $ % 9.0% 803,028 0 Manufacturing 15,468, % 15.1% 371,397 $ % 4.0% JLL United States Industrial Q4 2014

57 San Diego Small-box market to cater to local tenants needs Well-educated, local workforce VC funding points toward sustained growth in biotech and life science industries Lack of affordable and developable land San Diego s economy continues its steady recovery, which has contributed to the growth in the industrial market. Annual job growth in November was the largest so far in 2014 with employment up 43,000 or 3.2 percent over the year. Unemployment remained at 5.8 percent in November. Moreover, industries closely tied to the demand of industrial product saw notable growth this past year; trade, transportation and utilities added 5,900 jobs and manufacturing was up 3,100 jobs. Year to date net far surpassed year-end 2013 net. With nearly 2.2 million square feet posted this year, annual net is double last year s level. This demand was driven mostly by warehouse and distribution space, which accounted for over 60.0 percent of the this year. As robust gains continue, across all industrial product types continues to decline. The direct rate decreased 20 basis points quarter-over-quarter and 150 basis points year-over-year. The current is lower than prerecession levels, when it averaged around 7.5 percent. There continues to be no projects in the pipeline for San Diego s industrial market. As such, tenants will have to compete for the limited and diminishing space, which will help drive rates even lower and push rents up. Market vital 8409 Kerns Street New lease: 69,301 s.f. Tenant: Master s Touch Branc, LLC Year-overyear in jobs 3.1 m 3.2% 7.7% 1.2 m.s.f. 1.6 m.s.f Danielson Street New lease: 59,591 s.f. Tenant: General Atomics 6650 Nancy Ridge Road New lease: 24,200 s.f. Tenant: Monsanto Company, Inc. Industrial rents have begun to see more substantial increases. Moving in to the new year, the supplyconstrained conditions and continued demand for space will contribute to additional rent growth with rents starting to approach pre-recession highs. Biotechnology and life sciences firms will continue to expand and drive demand for space. The ongoing growth in manufacturing and construction will also contribute to demand Towne Centre Drive Buyer: Alexandria RE Equities Seller: 9625 Towne Centre Partners LP $22.3 M 99,999 s.f. $223 p.s.f Loker Avenue Buyer: Hines Global REIT II Seller: RREEF $25.4 M 161,310 s.f. $157 p.s.f Convoy Court Buyer: Rexford Industrial REIT Seller: LBA Realty $32.3 M 187,763 s.f. $172 p.s.f. stock (%) net construction industrial 128,099, % 9.1% 2,196,436 $ % 2.5% 0 341,579 Leased industrial 91,206, % 11.3% 1,828,354 $ % 2.8% 0 0 Warehouse & distribution 50,772, % 11.9% 1,341,366 $ % 0.4% 0 115,000 Manufacturing 49,200, % 11.4% 531,663 $ % 7.6% 0 226, JLL United States Industrial Q4 2014

58 Seattle-Bellevue Construction and manufacturing job growth Port activity and TEU volumes Strong institutional investor interest Large- and medium-box users Land constraints Recent construction New was the primary theme for the past year in the Seattle-Bellevue market. Over 2.0 million square feet was delivered and an additional 2.8 million square feet broke ground. New has been slowly catching up to demand over the past year. Large-sized tenants had few options available at the beginning of 2014, but that began to throughout the course of the year. Although remains low and only a handful of large spaces remain available, tenants have been able to capitalize on new opportunities and the market is beginning to shift toward neutral conditions regarding landlord and tenant negotiations. During 2014, the Seattle-Bellevue industrial market posted over 4.9 million square feet of net positive. The majority of activity over the past 12 months involved deals in warehouse/distribution space. The Southend markets were the most active in 2014, accounting for the vast majority of leasing activity. The Eastside and Northend markets did, however, post positive for the year and have seen steadily decreasing rates and increased activity. The average rate for the region hit 4.4 percent by year-end, and all five separate submarket clusters saw drop below 7.0 percent. Most notably, the Seattle submarket cluster saw drop to 2.4 percent. Average asking rental rates have increased by nearly 20.0 percent over the past year and are expected to continue rising for the next 6-18 months. Seattle Business Center New lease: 72,000 s.f. Tenant: Polar Graphics in jobs 3.9 m 2.9% 5.7% 2.9 m.s.f. 3.0 m.s.f. Woodinville Corporate Center New lease: 71,932 s.f. Tenant: TW Metals PSM Building New lease: 67,790 s.f. Tenant: PSM Looking forward, new will continue to break ground through 2015 and tenants will continue to gain additional leverage in lease negotiations. In late 2015, will catch up to current demand. As market fundamentals begin to shift, rental rates will begin to level off. We expect landlords of premium buildings to continue to achieve high rates throughout the year and into 2016, while owners of older, mid-tier properties will begin to see increased pushback from savvy tenants that are aware of changing market conditions East Marginal Way South Buyer: CenterPoint Properties Seller: WA RE Holdings $31.9 M 461,980 s.f. $69 p.s.f. The Park at Woodinville Buyer: KBS Realty Advisors Seller: Colony Realty Partners $29.7 M 49,446 s.f. $124 p.s.f. Kent 167 Distribution Center Buyer: KTR Capital Partners Seller: K & H Sutter Company $19.3 M 361,120 s.f. $53 p.s.f. stock (%) net construction industrial 273,193, % 6.8% 4,936,285 $ % 19.5% 3,776, ,479 Leased industrial 167,000, % 8.0% 4,909,939 $ % 24.8% 3,776, ,479 Warehouse & distribution 139,258, % 7.8% 3,609,386 $ % 15.0% 3,776,661 74,479 Manufacturing 27,741, % 9.0% 702,577 $ % 9.1% 0 40, JLL United States Industrial Q4 2014

59 South Bay / Silicon Valley Rapid employment growth Growing net migration Strong business environment Strong housing market High-tech manufacturing Re toward higher & better use Robust employment growth in the technology and high-tech manufacturing sectors continue to drive the South Bay industrial market. Overall held roughly steady at 8.1 percent, down from 9.5 percent in the first quarter of No warehouse or manufacturing space is currently in the pipeline despite the limited number of large blocks available. Office and R&D projects yield higher rates of return in the Silicon Valley submarkets, drawing developers attention over traditional industrial. Re activities in the San Jose submarket are pushing some high-tech manufacturing tenants to neighboring submarkets such as Fremont. Its proximity to the burgeoning tech-hub and availability of land makes it an ideal location for developers looking to capitalize on growing demand from this segment of the market. While investment activity has slowed for warehouse and manufacturing space, some opportunistic investors are buying obsolete industrial assets with intentions to raze the existing property and redevelop the site into office, R&D or mixed-use in hopes to capitalize on the strong demand from both tech tenants and the influx of new residents in the market. Rents will continue to rise due to limited developable land available to provide relief capacity, increasing competition within the manufacturing segment, and the continued growth in the high-technology sector. Start-up activity and reshoring will drive continued demand for high-tech manufacturing, spurring new and renovation projects. However, competition for available land will likely lean in favor of higher-end office uses, leading developers to focus their industrial efforts on the Fremont submarket where a number of related projects are already under way. The technology boom will likely last at least another 18 months, continuing pressure on traditional industrial uses in the South Bay and driving them northward to Fremont and east to the Central Valley. Dixon 880 Direct: 102,919 s.f. Tenant: Apple, Inc Fremont Boulevard Buyer: Kilroy Realty Group Seller: DiNappoli $5.2 M 41,799 s.f. $125 p.s.f. in jobs 1.9 m 2.7% 7.4% 0.3 m.s.f. 0.1 m.s.f. 455 E Trimble Road Renewal: 80,125 s.f. Tenant: writers Laboratories Encyclopedia Circle Buyer: Blue Star Vending Seller: Bath Accessories Company $5.8 M 45,600 s.f. $126 p.s.f Lenfest Road Direct: 25,461 s.f. Tenant: Superior Air Handling 2305 Mission College Blvd Buyer: Prudential RE Investors Seller: Kinship Trust Company, LLC Undisclosed 358,503 s.f. stock (%) net construction industrial 74,257, % 11.2% 872,688 $ % 4.3% 405, ,020 Leased industrial 56,122, % 14.5% 605,102 $ % 3.4% 405, ,020 Warehouse & distribution 31,225, % 12.1% 599,310 $ % 8.6% 0 0 Manufacturing 24,654, % 17.9% 5,792 $ % -2.0% JLL United States Industrial Q4 2014

60 St. Louis Consumer products companies Increased manufacturing Shrinking modern bulk availability Investment in operations by local companies New construction activity 2014 was a record year for the St. Louis industrial market. With 3.8 million square feet of, the total rate fell to 4.9 percent. Absorption was the most in St. Louis since The appetite for St. Louis industrial assets remains strong as several national investors entered the market. Chambers Street and Monmouth both purchased leased assets in Metro East; it is each company s first activity in St. Louis. Investments in new manufacturing facilities by SKF, Boeing, and Anheuser-Busch InBev are a great boost to the region that has seen strong manufacturing investment over the past several years. The three projects have a total investment value of $400 million. Boeing s expansion will be 367,000 square feet and SKF s build-to-suit is 311,000 square feet. Production from the new facilities should bring increased demand to warehouse space and 3PL providers. Industrial employment posted annual gains for the ninth consecutive month, tying the longest streak since the end of the recession. Manufacturing employment has slipped the past three months. The losses have come in nondurable goods employment, which has had 12 months of year-over-year employment losses. On the other hand, durable good employment has experienced annual gains for nine consecutive months. 1 Gateway Commerce Center Drive Renewal: 812,000 s.f. Tenant: Dial in jobs 2.8 m 2.1% 7.9% 1.3 m.s.f. 1.6 m.s.f. SKF Build-To-Suit Build-to-suit: 311,000 s.f. Tenant: SKF 3100 Corporate Ex Expansion: 163,000 s.f. Tenant: Materialogic With 8.0 million square feet of tenant requirements, the market is not showing any sign of slowing down. In the fourth quarter, 3.0 million square feet of requirements came to market. The tight market conditions should bring more speculative in The first spec building since Hazelwood Commerce Center will deliver in the first quarter of 2015 when Gateway 673 is completed in Gateway Commerce Center Sauget Business Boulevard Buyer: Chambers Street Properties Seller: Covington 502,500 s.f. $42 per s.f Sauget Business Boulevard Buyer: Monmouth Real Estate Seller: Jones Development Company 198,000 s.f. $77 per s.f Page Industrial Drive Buyer: Gramercy Property Trust Seller: Big Sky Properties 211,000 s.f. $52 per s.f. stock (%) net construction industrial 221,683, % 10.8% 3,765,904 $ % 1.2% 1,187, ,500 Leased industrial 119,780, % 17.1% 3,703,021 $ % 0.6% 1,073, ,500 Warehouse & distribution 91,119, % 17.8% 2,760,519 $ % 4.0% 1,073, ,500 Manufacturing 23,195, % 17.3% 648,660 $ % -2.4% JLL United States Industrial Q4 2014

61 Tampa Increase in housing starts Hospital and medical equipment manufacturing and distribution e-commerce distribution and air cargo Intermodal transportation links Availability of entitled land In 2014, Tampa Bay saw record high total net of nearly 5.5 million square feet, which is more than the past three years combined. As a result, is down to 8.8 percent, a 190 basis point decline from last year, the lowest it has been since the fourth quarter of The sales volume picked up from the last few quarters, with the market seeing a number of large trades. Cobalt Capital sold their portfolio to Colony Capital, three of the buildings were in the Tampa Bay area. There were 20 building sales over $2.5 million dollars, totaling 3.0 million square feet of industrial space during Six of the transactions were portfolio deals for multiple buildings in the same industrial park. Tampa Bay saw 3.1 million square feet delivered over the course of the year, which is the most since This is a great sign for the market moving forward as developers are considering speculative s in the coming quarters. Class A space continues to tighten with few large quality spaces left in the market. Tenants continue to seek spaces ranging from 10,000 to 50,000 square feet, with the majority of leases over the past year occurring in that range Great Oak Drive Renewal: 113,300 s.f. Tenant: Structall Building Systems in jobs 4.2 m 1.9% 9.5% 1.53 m.s.f. 1.9 m.s.f Bryan Dairy Road Renewal: 88,000 s.f. Tenant: Think Direct Marketing Group 5905 Hampton Oaks Parkway Renewal: 39,800 s.f. Tenant: Direct General Auto Insurance Developers are optimistic heading into 2015 as demand continues to rise and quality space remains at a premium, with some speculative s expected to break ground. There are undisclosed e-commerce and distribution groups considering plots in the Polk and East Side submarkets to build facilities to expand their reach to the western part of Florida, following Amazon s lead after they built two distribution centers totaling 2.1 million square feet. Despite the recent activity, tenants continue to have leverage in negotiations over landlords given the current market conditions, but with continuing to decrease the leverage is expected to begin to shift toward the landlords, especially in Class A space North 301 st Highway Buyer: Colony Capital Partners Seller: Cobalt Capital $25.2 M 174,000 s.f. $145 p.s.f Currie Davis Drive Buyer: Colony Capital Partners Seller: Cobalt Capital $22.7 M 267,000 s.f. $85 p.s.f West Knollwood Street Buyer: Cabot Properties Seller: Cleo Corporation $12.6 M 196,800 s.f. $64 p.s.f. stock (%) net construction industrial 138,610, % 12.5% 5,451,370 $ % -1.2% 166, ,105 Leased industrial 80,649, % 18.1% 5,036,314 $ % 0.0% 166, ,334 Warehouse & distribution 63,496, % 17.3% 4,717,889 $ % 0.7% 166, ,334 Manufacturing 17,152, % 21.0% 318,425 $ % 2.9% JLL United States Industrial Q4 2014

62 Washington, DC Retail distribution and users related to the home construction industry Consolidation to more efficient space Data center demand After several soft quarters, leasing and activity picked up notably across Prince George s County in Suburban Maryland with several significant transactions closing and remaining demand in the pipeline. While remained flat along I-95 in Northern Virginia, western Prince William County and the Route 28 Corridor remained exceptionally tight as data center demand competed for limited existing and developable inventory. Eastern Prince George s County saw significant activity where In an expansion, Nordstrom leased 235,000 square feet at 1049 Prince Georges Boulevard while next door MRP Industrial and AEW Capital Management continued work on their 220,800-square-foot speculative building at Queens Court. As large blocks of availability and land sites have dwindled in the neighboring Baltimore/Washington Corridor, larger tenants have increasingly focused on opportunities in Suburban Maryland and Prince George's County. remained split in Northern Virginia with the western submarkets, which feature the majority of Class A warehouse/distribution space, outperforming Southeast Fairfax County along I-95. Tenants have gravitated toward the modern and functional product of Prince William County and the Route 28 Corridor Prince Georges Boulevard New lease: 235,000 s.f. Tenant: Nordstrom in jobs 5.6 m 0.3% 13.7% 0.3 m.s.f 0.6 m.s.f 850 Hampton Park Boulevard New lease: 101,400 s.f. Tenant: Crane Services Global Plaza Renewal: 32,087 s.f. Tenant: Facilities Development Corp. Suburban Maryland should continue to see healthy activity going into 2015 as significant tenant requirements remain active, which will help fill the pipeline which is only 20.2 percent preleased. Speculative construction will likely break ground in Western Prince William County and Route 28 North where has fallen well below five percent and data center users dominate the current construction pipeline. Ardmore Industrial Center Buyer: Terreno Realty Corporation Seller: Prologis $31.2 M 384,313 s.f. $81 p.s.f Alaking Court Buyer: Invesco Realty Advisors Seller: Atapco Properties $11.7 M 92,153 s.f. $127 p.s.f Wellingford Drive Buyer: Cenveo Seller: NVCapital Advisors $4.1 M 43,200 s.f. $95 p.s.f. stock (%) net construction industrial 93,807, % 12.0% 848,049 $ % 2.0% 1,219,328 0 Leased industrial 70,624, % 14.0% 855,023 $ % 1.3% 1,219,328 0 Warehouse & distribution 58,104, % 14.6% 682,666 $ % 2.6% 1,219,328 0 Manufacturing 3,580, % 15.5% -45,459 $ % -7.7% JLL United States Industrial Q4 2014