Metropolitan Chicago. NAI Hiffman Industrial Market Report Mid-Year Committed to Chicago. Connected to the World.

Transcription

1 Metropolitan Chicago NAI Hiffman Industrial Market Report Mid-Year 29 Committed to Chicago. Connected to the World.

2 Geneva Beloit Wisconsin Illinois Westosha Airport 2 Pleasant Prairie 9 Waukegan Regional Airport Rockford Grayslake 1 94 Waukegan Belvidere Cherry Valley 9 Crystal Lake Lake Zurich Vernon Hills Buffalo Grove Lake Forest Highland Park Northbrook helle 39 DeKalb 3 6 Elgin St Charles Dupage Airport 9 West Chicago 4 Schaumburg Carol Stream 7 Addison 355 Chicago Executive Airport Arlington Heights Elk Grove Village Wood Dale 29 Des Plaines Ohare Int'l Airport 8 Elmhurst 294 Franklin Park Niles Skokie Evanston 9 94 Chicago North Aurora Aurora Montgomery 1 88 Naperville Downers Grove Woodridge La Grange Burr Ridge Willow Springs Bedford Park 55 Chicago Midway Airport 39 La Salle 8 12 Minooka Plainfield 55 Bolingbrook Romeoville Joliet Elwood New Lenox Mokena Palos Heights Tinley Park 57 Monee 57 Matteson Park Forest 94 9 Munster Illinois Indiana Hammond Gary/Chicago Airpo 8 94 Schererville M 55

3 Metropolitan Chicago NAI Hiffman Industrial Market Report Mid-Year 29 Table of Contents Local Economy Industrial Market Statistics Industrial Market Summary Industrial Submarket Overviews Lake County Southeast Wisconsin I-9/Northwest Northwest Cook North Cook Fox Valley Central DuPage O Hare West Cook I-88 Corridor I-55 Corridor I-8/Joliet Corridor Submarket Map Methodology / Definitions NAI Hiffman / NAI Global NAI Hiffman understands that our success is the direct result of creating successful outcomes for our clients. We build lasting relationships with our clients and partners, engaging our individual initiative joined with collaboration and teamwork. Our unrelenting commitment to excellence and integrity forms the foundation of our guiding principles and shapes our strategies. Committed to Chicago. Connected to the World. Build on the power of our network. NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 3

4 Local Economy POPULATION (28 EST.) 9,84,475 POPULATION CHANGE (2-28 EST.) +7.8% NUMBER OF HOUSEHOLDS (28) 3,516,729 MEDIAN HOUSEHOLD INCOME (28 EST.) $67,234 GROSS METRO PRODUCT (27) $56 BILLION LABOR FORCE 4,999,179 JOBS GAINED (6/8-6/9) -186,411 CHICAGO AREA UNEMPLOYMENT RATE 11.3% Local and National Unemployment Metro Chicago Illinois U.S. 12% 1% 8% 6% ILLINOIS UNEMPLOYMENT RATE 1.1% 4% U.S. UNEMPLOMENT RATE 9.5% % Chicago, the third largest metropolitan area in the U.S. after New York and Los Angeles, is the most influential economic region between the East and West Coasts. Situated at the geographical heart of the nation, Chicago s locational advantages have fostered its development into an international center for banking, securities, high technology, air transportation, business services, wholesale and retail trade, and manufacturing. In addition, Chicago is one of the principal trading centers for commodities, financial, and derivative futures products. In 28, Site Selection magazine once again named Chicago the number one destination for new or expanded corporate facilities projects in the nation, a position the city has held for six of the last seven years. Chicago has a higher rate of employment in management, business & finance and office & administrative job growth than the nation. Likewise it also has higher rates of production and transportation & material moving occupations. This indicates both an office economy as well as a production and distribution economy. With one of the most diversified economies of any region in the country, Chicago is less vulnerable to fluctuations in individual industries than most other large urban areas. The Chicago region s considerable economic diversity is reflected in the ten largest publicly traded companies headquartered here ranked by market capitalization: Abbott Laboratories, McDonald s Corp., Kraft Foods, Exelon Corp., Baxter International, Walgreen Co., Boeing, Caterpillar, Archer Daniels Midland Co., and CME Group Inc. Over the past twelve months ending in June 29, the Chicago- Naperville-Joliet metropolitan area lost a total of 184,3 jobs. The unemployment rate soared to 11.3% in June, a dramatic 63% increase since last June when the unemployment rate was 6.9%. Nationally, at the end of the second quarter, unemployment stood at 9.4%, the highest it has been since While it continues to climb month after month, there are some signs that the rate at which it is climbing should slow over the next few months as we approach a peak of unemployed individuals. In Illinois, the manufacturing industry lost 2,8 jobs in June. While still a loss, the past six months have consecutively posted 5,+ jobs lost in the industry, with March alone posting a 14,3 job loss. Since last June, employment in the sector has dropped by 8,3 jobs, almost fourteen percent of its total workforce. While manufacturing still defines much of the Midwest, Chicago benefits from its diversified base. The area is not dependent on the auto industry, whose contraction has dragged down the economies of neighboring states. Steel, however, remains a focus for the region. Demand for steel is starting to recover as industry specialists insist the worst is over, but the strength of the recovery is still unclear. According to preliminary numbers for June, employment in the professional and business services sector has posted its first month of job growth since December 27. Down 66,3 jobs since June 28, a slowdown or perhaps reversal of job loss in the industry is a promising trend. The forecast for the remainder of 29 calls for stagnation in employment as the economy continues its struggle. Unemployment should continue to climb, but eventually level off as the recession winds down. Statistical data as of June 29 unless noted otherwise. Data from Bureau of Labor Statistics, Bureau of Economic Nalaysis, ESRI, Illinois Department of Employment Security

5 Industrial Market Statistics NAI Hiffman Industrial Market Report Mid-Year 29 Submarket # Bldgs. Total RBA Vacant Vacancy 2Q9 Net YTD Net New Supply Under Constr. (SF) (SF) Rate (%) Absorption (SF) Absorption(SF) (SF) (SF) Local Economy / Industrial Market Statistics Chicago North 1,137 66,816,96 5,33,83 8.% -9, ,83 Chicago South 1, ,239,77 14,783, % -1,79,572-3,5, ,22 North Cook ,76,58 3,46,94 6.5% -88, ,862 West Cook 743 6,538,35 7,18, % -35,28-1,37,58 Southwest Cook ,733,483 2,784, % -76, , ,168 South Cook 1,125 85,431,58 1,785, % -31,154-1,82,198 12,6 I-57/Will Corridor 8 12,351,467 2,36, % -28,53-788,973 Lake County ,652,43 6,784, % -63, ,124 15, ,543 Northwest Cook ,787,11 3,57, % 6, , ,457 O Hare 1,735 11,236,619 12,89, % -72,495-62,587 Central DuPage 1,97 66,946,799 6,413,65 9.6% 329,379 2,242 I-55 Corridor ,974,13 11,415, % 39, ,54 264,183 McHenry County ,52,283 3,78, % -8,42-192,28 I-9/Northwest ,45,233 2,83, % -124, ,598 37,269 Fox Valley ,75,871 3,588, % -366,64-219,884 31,439 I-88 Corridor ,356,357 7,436, % -65, , , I-8/Joliet Corridor ,369,997 12,13, % 1,523,4 1,4, , 38,4 DeKalb County 57 6,97, , % 14,82 161,21 I-39 Corridor ,981,891 4,487,6 18.7% -145,36-364,87 72, Southeast Wisconsin 52 43,114,814 6,12, % -282,2-9, , 2,8, Northwest Indiana 43 35,694,97 4,187, % -191,5-114,25 Flex Space Summary Total Flex Space 1,529 72,34,978 8,333, % -444, ,57 3, 62,916 Total Market Summary 16,478 1,197,343, ,78, % -3,88,291-13,59,814 1,27,631 4,717,756 The data compiled in the Chicago Industrial Market Report is the legal property of NAI Hiffman. Reproduction or dissemination of the information contained herein is strictly prohibited without the expressed written consent of NAI Hiffman. This report contains information, including information available to the public, which has been relied upon by NAI Hiffman on the assumption that it is accurate and complete without independent verification by NAI Hiffman. NAI Hiffman accepts no responsibility if this should prove to be inaccurate or incomplete. No warranty or representation, express or implied, is made by NAI Hiffman as to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, and changes in market conditions. NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 5

6 Metropolitan Chicago NAI Hiffman Industrial Market Report Mid-Year 29 # INDUSTRIAL BUILDINGS 16,478 MARKET SIZE (SF) 1,197,373,372 VACANCY 138,78,929 SF (11.6%) 2Q9 NET ABSORPTION -3,88,291 YTD NET ABSORPTION -13,59,814 NEW SUPPLY (SF) 1,27,631 UNDER CONSTRUCTION (SF) 4,717,756 Market Summary Chicago is the second largest industrial market in the U.S. with over one billion SF of inventory. The Chicago industrial market remains the most influential in the Midwest, due to its growing prominence as an inland port and its diverse labor pool. It has the second largest workforce in the country and is the largest manufacturing market. Vacancy and Absorption 12,, 8,, 4,, -4,, -8,, -12,, 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy Rate (%) Net Absorption (SF) 2Q9 12% 1% 8% 6% 4% 2% % Chicago s strategic location and transportation infrastructure make it the most important transportation center in the country. Located in the path of three of the nation s busiest transcontinental expressways (I-8, I-9 and I-94), Chicago also claims 7 percent of the nation s rail and intermodal activity. Furthermore, O Hare International Airport remains one of the world s busiest airports, while the Great Lakes canal system accommodates vital barge and shipping traffic. Construction Starts and Deliveries 1 MM 8 MM 6 MM 4 MM 2 MM Construction Starts (SF) Deliveries (SF) Source: CoStar 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Industrial Base Growth by Quarter 1.2 Billion Total Industrial Base (SF) Quarter in Review. The credit crisis and subsequent recession continue to make a mark on the Chicago industrial real estate market. Manufacturers and distributors have been moving less product due to the economy, resulting in five consecutive quarters of rising vacancies since 27 and depressed demand. The most challenging real estate market in decades has seen millions of SF of negative net absorption, minimal investment, and few property sales. New construction starts are virtually nonexistent and many ongoing development projects have lost their financing as investors have pulled out. The commercial real estate market generally lags the economy by about 12 months, so even if the general economy turns the corner sooner than expected, Chicago s industrial market will not be as quick to respond. 1.1 Billion 1. Billion.9 Billion The overall vacancy rate at the end of June reached 11.6% for the industrial market, up from 11.29% in March, resulting in net absorption totaling roughly negative 3.9 million SF. While not as severe as first quarter s net absorption total of negative 9.2 million SF, it has had the effect of pushing the vacancy rate to its highest level since 1991.

7 Industrial Market Trends Vacancy Rate Net Absorption Asking Rents Suburban Submarkets by Size I-8/Joliet Corridor I-88 Corridor 62,369,997 SF 61,356,357 SF Industrial Market Summary West Cook 6,538,35 SF North Cook 46,76,58 SF The news is not all negative, however, as leasing activity continues to accelerate market-wide. The majority of these deals are lease renewals, as landlords look to secure their tenants well in advance of the expiration dates on their leases by offering significant rent reductions, flexible terms and free rent. Pent-up demand, due to the unpredictable economy, is resulting in developers seeing more requests for proposals from brokers, a sign that companies may be getting more serious about their real estate decisions. O Hare South Cook I-55 Corridor Central DuPage Lake County 11,236,619 SF 85,431,58 SF 79,974,13 SF 66,946,799 SF 66,652,46 SF Southeast Wisconsin 43,114,814 SF Southwest Cook 38,733,483 SF Northwest Indiana 35,694,97 SF Fox Valley 32,75,871 SF Northwest Cook 28,787,11 SF McHenry County 25,52,283 SF I-9/Northwest 25,45,233 SF I-39 Corridor 23,981,891 SF I-57/Will Corridor 12,351,467 SF DeKalb County 6,97,869 SF Looking Forward. The future of Chicago s industrial market is highly dependent on the resiliency of the global and national economies. Just as a positive economic outlook leads to individuals increasing their personal spending, a recovering economy will lead to companies feeling more confident investing in real estate. Although many proposed and planned development projects remain in the pipeline, new construction will remain limited until the abundance of vacant space in the market begins to be absorbed. Leasing will remain active as tenants look to take advantage of the market by saving money on their rent through renegotiating their lease terms or signing a new lease. Capitalization Rate and Properties Sold Cap Rate (%) # of Properties Sold % 11% 1% 9% 8% 7% 6% The evolving Chicago industrial market is critical to the nation s manufacturing, distribution and transportation industries and is centrally located. These significant advantages will allow the market to maintain its value and recover more quickly than other industrial markets throughout the country. Significant Industrial Lease Transactions 2nd Qtr. 29 Property Address Submarket City Leased (SF) Tenant Comments 17 & 171 Leider Ln. Lake County Buffalo Grove 196,85 Hyper Microsystems New lease 815 Kimberly Dr. Central DuPage Carol Stream 25,92 Hart & Cooley New, long-term lease Golf Ln. Bensenville O Hare 352,119 The Bradford Exchange Lease renewal River Rd. West Cook Franklin Park 195,71 R&M Trucking Company New lease 171 Remington Blvd. I-55 Corridor Bolingbrook 8, Home Depot Lease renewal NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 7

8 Lake County POPULATION 712,453 (est.) 2 28 POPULATION CHANGE +1.6% (est.) # INDUSTRIAL BUILDINGS 929 MARKET SIZE (SF) 66,652,43 VACANCY 6,784,542 SF (1.18%) 2Q9 NET ABSORPTION -63,319 YTD NET ABSORPTION -985,124 NEW SUPPLY (SF) 15,192 UNDER CONSTRUCTION (SF) 568,543 chenry Fox Lake Wisconsin Illinois 45 Grayslake Gurnee Waukegan Regional Airport 12 Zion Waukegan North Chicago Submarket Trends Vacancy Rate Net Absorption Asking Rents ake Lake Zurich 12 Libertyville Mundelein 6 Vernon Hills Buffalo Grove 176 Lake Forest 41 Highland Park Plti 294 Vacancy and Absorption 4, 2, -2, -4, -6, -8, 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Inventory By City Vacancy Rate (%) Net Absorption (SF) 12% 1% 8% 6% 4% 2% % 7% 7% Waukegan Libertyville 33% 9% Gurnee 1% Buffalo Grove Lake Zurich 11% 23% North Chicago Other Lake County Suburbs Under Construction & Recent Deliveries Deliveries (SF) 1,, Under Construction (SF) 8, 6, Lake County Overview The Lake County industrial submarket is notable for its roster of corporate headquarters and heavy concentration of owner occupied real estate, all located within close proximity to the I-94 Tri-State Tollway. Entrepreneurial owners and corporate managers residing along the lakefront and northwest Lake County make this area attractive for investment. Corporate neighbors including Abbott, Baxter, Caremark, Takeda, Walgreens and WMS join privately held companies such as CDW, Medline and ULINE to form a vibrant base of employment. Lake County s relatively low property tax rates attract companies from Cook County, although infrastructure demands have begun to slightly even the playing field. Lake County s population has grown as development pushes father north and west. Vacancy and Absorption. At the end of June, the Lake County overall vacancy stood at 1.18%, up from 9.3% in March, resulting in net absorption totaling negative 985,124 SF for the first half of the year. Lake County has rarely seen vacancy in the double-digits in its history. Several of the recently constructed speculative developments in the submarket remain at least partially vacant, a trend seen among recent speculative development throughout the market. 4, 2, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Several of the recently constructed speculative developments in the submarket remain at least partially vacant. Pictured Above: 17 Leider Ln., where Hyper Microsystems leased a total of 196,85 SF between two buildings

9 Construction. Construction continues on a 47, SF facility located in IDI s Antioch Corporate Center, a new 2-acre park underway in Antioch. Panattoni delivered a 15,192 SF speculative building over the past quarter, located in the new Trumpet Corporate Park in Zion. Lake County Submarket Sublease Vacancy Rate 2% Sublease Vacancy (%) Available Space Profile.8 MM 2.3 MM 1.3 MM 1.9 MM 2.1 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Lake County Overview 1 # of Buildings 1% % Transaction Activity. The most significant transaction in the second quarter involved computer storage device manufacturer and distributor Hyper Microsystems expanding from their current location to the nearby Aptakisic Creek Corporate Park in Buffalo Grove, where they leased a total of 196,85 SF. Leasing activity is on the rise in Lake County due to aggressive leasing incentives being extended by institutional ownership. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. As the ongoing recession continues to unfold, vacancy will rise in the near-term, resulting in consecutive quarters of negative net absorption. Tenants will benefit from from low rental rates and incentives being offered in today s tenants market. Lake County Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller Albrecht Dr. Lake Bluff 256,298 $13,175, $51.41 Globe Corporation Investment trust Lake County Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 17 & 171 Leider Ln. Buffalo Grove 196,85 Hyper Microsystems New lease Sunset Ave. Waukegan 18, Cornfields, Inc. Lease renewal 61 Schelter Rd. Lincolnshire 98,735 Star Creations Build-to-suit lease 1883 Circuit Dr. Round Lake Beach 17,168 Midwest Printed Circuits New lease S. Lakeside Dr. Waukegan 16,461 Veridian Healthcare, LLC New lease 1353 Armour Blvd. Mundelein 11,216 Air Flow Company New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 9

10 Southeast Wisconsin POPULATION 251,319 (est.) 2 28 POPULATION CHANGE +5.6% (est.) # INDUSTRIAL BUILDINGS 52 Burlington 142 Racine Sturtevant MARKET SIZE (SF) 43,114,814 VACANCY 6,12,565 SF (14.15%) 1Q9 NET ABSORPTION -282,2 YTD NET ABSORPTION -9,879 NEW SUPPLY (SF) 125, UNDER CONSTRUCTION (SF) 2,8, 83 Westosha Airport 5 45 Wisconsin Illinois Kenosha Regional Airport Pleasant Prairie Kenosha 32 Zi Submarket Trends Vacancy Rate Net Absorption Asking Rents Vacancy and Absorption 1,5, 1,, 5, -5, -1,, Inventory By City 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy Rate (%) Net Absorption (SF) 7% Racine 16% 36% Pleasant Prairie Sturtevant 18% Kenosha Burlington 23% Under Construction & Recent Deliveries 3,, Deliveries (SF) 2,5, Under Construction (SF) 2,, 15% 12% 9% 6% 3% % Southeast Wisconsin Overview The Lakeview Corporate Park in Pleasant Prairie, Wisconsin accounts for the lion s share of our statistical tracking in the Southeast Wisconsin industrial submarket. This 1,5-acre business park was developed in the late 198 s by Wispark, the development subsidiary of Wisconsin Energy Corporation. Owned by both Wispark and CenterPoint Properties, the park boasts 25 million SF and is home to an international roster of companies including S.C. Johnson, IRIS, Yamaha and Jelly Belly. The primary advantages of the Southeast Wisconsin submarket are the availability of affordable land for big box development as well as lower utility costs, property taxes and workers compensation when compared to submarkets in Illinois. Vacancy and Absorption. While vacancy has been on the rise since 28, the area is subject to sudden adjustments due to the large size of many of the transactions that take place. Southeast Wisconsin ended the second quarter with 14.15% vacancy, resulting in net absorption totaling negative 9,879 SF for the first half of 29. Many of the area s large big-box spaces that can accommodate users from 1,-6, SF remain on the market. 1,5, 1,, 5, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 While vacancy has been on the rise since 28, the area is subject to sudden adjustments due to the large size of transactions that take place. Pictured Above: Artist rendering of ULINE s new corporate headquarters under construction in Pleasant Prairie

11 Construction. Construction continues on the new ULINE facility in Pleasant Prairie where the rapidly growing packaging supply company plans to move its corporate headquarters from Waukegan when construction is completed. The 196 acre site, located at the southeast corner of I-94 and Highway 65, will feature a 2, SF corporate office building and a 1 million SF distribution center. Gordon Food Service s 587, SF distribution center on 134 acres is still under construction, expecting to deliver in January of 21. Available Space Profile 3.8 MM.3 MM.6 MM 1.5 MM 3.8 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ # of Buildings Southeast Wisconsin Overview Transaction Activity. During the second quarter, GBC renewed its lease for 56,5 SF at 115 8th Avenue in Pleasant Prairie. Unified Solutions leased 277,454 SF at 981 8th Avenue in Pleasant Prairie. 2 1 Looking Forward. Southeast Wisconsin will continue to draw companies from south of the border looking to escape Illinois perceived tax burden. CenterPoint Properties will remain a strong presence in the submarket delivering proven results. The large number of available high cube, big-box properties will cause continued downward pressure on Lake County, Illinois rental rates. Most of Southeast Wisconsin s industrial inventory features 28 3 clear heights and exterior truck loading, an advantage compared to the second generation competition in Lake County, Illinois. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Southeast Wisconsin Projects Under Construction 2nd Qtr. 29 Property Location City Size (SF) Comments Southwest of I-94 and County Hwy. Q Pleasant Prairie 1,2, Part of new ULINE campus including a 2, SF corporate headquarters Southwest of Hwy. 2 and County Hwy. V Mt. Pleasant 6, HSA Commercial, Inc. to build up to 1 buildings on 9-acre land site th St. Kenosha 587, New distribution facility for Gordon Food Service on 134-acre land site Southeast Wisconsin Recent Deliveries 2nd Qtr. 29 Property Address City Size (SF) Comments 81 6th St. Kenosha 731, Build-to-suit distribution center for Affiliated Foods Midwest Cooperative Inc. 88th State Route 158 Kenosha 6, New Rust-Oleum Corp. warehouse and distribution center, room for up to 25, SF expansion th St. Pleasant Prairie 452,769 Vacant 1251 Globe Dr. Racine 321,6 Vacant NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 11

12 I-9/Northwest POPULATION 28,728 (est.) 2 28 POPULATION CHANGE % (est.) # INDUSTRIAL BUILDINGS 429 MARKET SIZE (SF) 25,45,233 VACANCY 2,83,758 SF (11.2%) 2Q9 NET ABSORPTION -124,277 YTD NET ABSORPTION 192,598 NEW SUPPLY (SF) 1 UNDER CONSTRUCTION (SF) 37,269 Hampshire Carpentersville East Dundee Elgin Submarket Trends 31 Vacancy Rate Net Absorption Asking Rents South Elgin Vacancy and Absorption 8, 6, 4, 2, -2, -4, Inventory By City 9% 1,2, 1,, 2Q6 3Q6 3% 5% 7% 4Q6 1Q7 2Q7 Vacancy Rate (%) 76% 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Elgin Carpentersville South Elgin East Dundee 2Q9 Dundee, Genoa, Marengo, Hampshire, etc. Under Construction & Recent Deliveries Deliveries (SF) 12% 1% 8% 6% 4% 2% % Under Construction (SF) I-9/Northwest Overview The I-9/Northwest industrial submarket is attractive to companies looking for excellent interstate access, relatively low taxes, potential incentives and a strong labor pool. Most of the industrial inventory base in the submarket is located within minutes of a 4-way intersection with I-9. This serves to make the I-9/Northwest submarket a good distribution point for companies that are serving the I-9/upper-midwest supply chain. Relatively low taxes are a benefit throughout the submarket, and TIF incentives are available in some areas. Additionally, the Elgin area provides an abundant, educated labor pool. Population along and near the Fox River has increased dramatically over the past decade. Vacancy and Absorption. Following two quarters of declining vacancy rates and positive net absorption, the I-9/Northwest submarket resumed the trend of increasing vacancies and negative net absorption this quarter, posting a vacancy rate of 11.2% in June, up from 1.5% in March, resulting in net absorption totaling negative 124,277 SF. As demand and transaction volume remain low, we expect these trends to continue in the near-term. 8, 6, 4, 2, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Leasing activity remains elevated, likely due to aggressive rental rates and leasing incentives from institutional ownership. Pictured Above: Corporate Dr. in Elgin, where Art Supply signed a lease for 125, SF during the second quarter

13 Construction. Following the push for new construction in the I-9/Northwest submarket in 26-27, developers reacted to the difference between supply and demand, reducing the amount of new development since. Several proposed buildings remain in the pipeline, a sign that development should pick up again when the market turns around. I-9/Northwest Sublease Vacancy Rate Available Space Profile.3 MM.9 MM.5 MM.7 MM.7 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-9/Northwest Overview 1.% Sublease Vacancy (%) 5 # of Buildings 4.5% % 1, 19,999 2, 49,999 5, 99,999 2,+ Transaction Activity. Leasing activity remains elevated, likely due to aggressive rental rates and leasing incentives from institutional ownership. The 431,318 SF speculative building located at Corporate Drive in Elgin s Fox River Business Center signed its first lease during the second quarter, as tenant Art Supply took 125, SF. 1, 199,999 Looking Forward. The I-9/Northwest submarket will remain an attractive location for businesses due to the lower tax base, strong labor pool and interstate access. Tenants will continue to find leasing opportunities such as incentives and aggressive rates. I-9/Northwest Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 2755 Alft Ln. (Building 2) Elgin 1,294 $6,5, $64.81 Seigle Investments LLC Ryan Companies US, Inc Bowes Rd. Elgin 34,4 $1,825,5 $53.7 Quality Craft Inc. The Missner Group Company I-9/Northwest Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments Corporate Dr. Elgin 125, Art Supply New lease Corporate Dr. Elgin 34,449 Exhibit Fabrications New lease 1155 Bowes Rd. Elgin 34,4 Quality Craft, Inc. New lease 3 Brook St. Elgin 33, Midnight Slumber New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 13

14 Northwest Cook POPULATION 514,784 (est.) 2 28 POPULATION CHANGE -.1% (est.) # INDUSTRIAL BUILDINGS 527 MARKET SIZE (SF) 28,787,11 VACANCY 3,57,636 SF (12.18%) 2Q9 NET ABSORPTION 6,482 YTD NET ABSORPTION -125,923 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 121,457 Submarket Trends Vacancy Rate Net Absorption Asking Rents East Dundee gin gin 2 19 Bartlett Streamwood Hoffman Estates Lake Zurich Barrington Palatine Arlington Heights Elk Grove Village Chicago Executive Airport Schaumburg Des Plaines Bloomingdale Wood Dale Buffalo Grove Mt. Prospect Ohare Int'l Airport F kli Vacancy and Absorption 75, 5, 25, -25, -5, 2Q6 3Q6 4Q6 Inventory By City 7% 7% 1% 14% 15% 1Q7 2Q7 Vacancy Rate (%) 28% 19% 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Schaumburg Northlake Mt. Prospect Palatine Barrington Streamwood 2Q9 Bartlett, Hoffman Estates, Roling Meadows, etc Northwest Cook Overview The Northwest Cook submarket remains a desirable location for entrepreneurial owners and corporate managers who reside in the area s suburban communities. The submarket is conveniently located within close proximity of Chicago s O Hare International Airport with excellent access to Chicago and the western suburbs using I-9, I-29 and Route 53. The user base generally consists of specialized manufacturing and service companies. Many international companies, particularly Asian and European, have located their North American headquarters here due to the proximity to the airport. Few distribution facilities exist relative to neighboring submarkets. Many users come from the comparatively cramped O Hare submarket looking for more space or a location closer to their residences, but don t want to move all the way west to Elgin or beyond. While high Cook County taxes may be prohibitive to some users, landlords continue to offer lower net rents to attract tenants. Under Construction & Recent Deliveries 1,2, Deliveries (SF) 1,, Under Construction (SF) 8, Vacancy and Absorption. Vacancy rates have been generally rising over the past few years and ended the second quarter at 12.18%. Net absorption was slightly positive to end the quarter. 6, 4, 2, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Vacancy rates will remain elevated or climb as companies in the area consolidate and restructure. Pictured Above: 142 Brewster Creek Blvd. in Bartlett, where Auto Truck Group purchased the 13, SF building on May 18th, 29 for $127.3 PSF

15 Construction. There are few vacant land sites for new construction in the Northwest Cook submarket, thus it is commonly referred to as an infill market. The majority of construction projects are building additions, but these have been few and far between due to the current economic situation. Northwest Cook Sublease Vacancy Rate Available Space Profile.5 MM.7 MM 2. MM.9 MM 1.2 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Northwest Cook Overview 1.% Sublease Vacancy (%) 75 # of Buildings.5% % , 19,999 2,+ Transaction Activity. Leasing activity remains limited to smaller-sized deals and lease renewals in the Northwest Cook submarket. One of the reasons for this lack of activity is potential tenants looking elsewhere to avoid the tax burdens of Cook County. Similar to other submarkets, sales transactions are few due to difficulty financing major purchases. 2, 49,999 5, 99,999 1, 199,999 Looking Forward. Net rental rates will continue to contract as owners offer significant incentives for tenants to renew or sign new leases to stave off vacancy. Vacancy rates will remain elevated or climb as companies in the area consolidate and restructure. Northwest Cook Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 142 Brewster Creek Blvd. Bartlett 13, $13,111,583 $127.3 Auto Truck Group Abbott Land & Investment Corp. 12 Lunt Ave. Schaumburg 16,65 $75, $46.69 Private trust Lunt 12 LLC Northwest Cook Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments Hammond Dr. Schaumburg 38,5 NexGen Building Supply Lease renewal Hicks Rd. Palatine 31,6 BCI Acrylic Bath Systems New lease Estes Ave. Schaumburg 8,16 Buraq Wholesale New lease 2246 N. Palmer Dr. Schaumburg 5,5 D.R. Fiddick & Sons Inc. New lease Payne Rd. Schaumburg 4,5 Woodfield Chevrolet New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 15

16 North Cook POPULATION 416,471 (est.) 2 28 POPULATION CHANGE +2.3% (est.) # INDUSTRIAL BUILDINGS 717 Grove MARKET SIZE (SF) 46,76,58 VACANCY 3,46,94 SF (6.52%) 2Q9 NET ABSORPTION -88,286 YTD NET ABSORPTION -365,862 Wheeling 21 ago Executive Airport Northbrook Glencoe NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) n s Morton Grove 94 Evanston Submarket Trends Vacancy Rate Net Absorption Asking Rents e Des Plaines Ohare Int'l Airport 14 Niles Park Ridge 9 41 Skokie Lincolnwood Chicago Vacancy and Absorption 8, 54, 28, 2, -24, -5, 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Inventory By City Vacancy Rate (%) 8% 13% 28% 14% 2% 17% 1Q8 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Wheeling Niles Skokie Northbrook Morton Grove 2Q9 1% 8% 6% 4% 2% % Evanston, Glenview, Lincolnwood, Northfield, etc. North Cook Overview The North Cook submarket remains a desirable location for users seeking quick access to Chicago, major area expressways and Chicago s northern suburbs. It is also attractive to long-term Chicagobased users looking to stay close to the city, while escaping Chicago politics. The area has the advantage of an inventory of buildings with better specifications than many of the antiquated buildings found in the city of Chicago. Additionally, it tends to be a comparatively user/buyer market, with limited leasing opportunities. The user base generally consists of service providers and machine shops who tend to remain in their locations for extended periods of time, resulting in limited transaction velocity in the submarket. The inventory base is mostly comprised of 196 s 197 s-era buildings with lower ceilings and low parking ratios. High taxes may be a deterrent for some users, while others are willing to pay the price for the location. Vacancy and Absorption. An historically stable submarket, vacancy has wavered between 5% and 8% for the past several years. While vacancy rates have been climbing since the third quarter of 28, no major jumps have occurred and are not expected. The second quarter ended with a 6.52% vacancy rate and net absorption of negative 88,286 SF. There are few leasing opportunities in the North Cook submarket as it is historically a user/buyer market. Pictured Above: 625 W. Howard St. in Niles, purchased by Speciality Print Communications on June 16th, 29 for $46.16 PSF

17 Construction. The North Cook submarket has experienced very little new development in recent years due to its status as a mature market. The most recent project was the re-development of the Niles Distribution Center by Duke Realty Corp. in 28. North Cook Sublease Vacancy Rate 1.% Sublease Vacancy (%) Available Space Profile.7 MM 1.4 MM.7 MM.7 MM 1.1 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ North Cook Overview.5% 1 8 # of Buildings 6 % Transaction Activity. The most significant transaction of the recent quarter involved the sale of 625 W. Howard in Niles to direct-mail resource Speciality Print Communications. While a few leases have occurred over the past few quarters, there remain few leasing opportunities in the submarket as it is historically a user/buyer market. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. Vacancy levels in the North Cook submarket are generally lower than the rest of the Chicago Metropolitan market. While vacancy may continue to edge up over the coming quarters, it will remain well below the market average. Net rental rates should continue to fall until demand and transaction activity pick up again. North Cook Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 625 W. Howard St. Niles 72,58 $3,35, $46.16 Speciality Print Communications Woodward Control North Cook Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 747 Glenn Ave. Wheeling 7,671 Corpak Med Systems New lease 822 N. Austin Ave. Morton Grove 55, GHP New lease S. Glenn Ave. Wheeling 14,3 MMA Enterprises New lease W. Gross Point Rd. Niles 1,7 Saranda s Furniture, Inc. New lease W. Touhy Ave. Skokie 7,393 Korean Store Lease renewal NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 17

18 Fox Valley POPULATION 115,79 (est.) 2 28 POPULATION CHANGE +37.3% (est.) # INDUSTRIAL BUILDINGS 494 Elgin MARKET SIZE (SF) 32,75,871 VACANCY 3,588,278 SF (11.19%) South Elgin Streamwoo 2Q9 NET ABSORPTION -366,64 YTD NET ABSORPTION -219,884 NEW SUPPLY (SF) 31,439 UNDER CONSTRUCTION (SF) Dupage 59 Airport St Charles 64 Geneva West Chicago Ca Submarket Trends Batavia 38 Vacancy Rate Net Absorption Asking Rents Sugar 3 Grove North Aurora Aurora 88 Naperville Vacancy and Absorption 4, 2, -2, -4, -6, -8, 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Inventory By City Vacancy Rate (%) Net Absorption (SF) 11% 35% West Chicago 25% St. Charles Batavia Geneva 28% Under Construction & Recent Deliveries 12% 1% 8% 6% 4% 2% % 5, Deliveries (SF) 4, Under Construction (SF) 3, Fox Valley Overview The Fox Valley submarket lies between the I-9/Northwest submarket to the north and the I-88 Corridor submarket to the south and has limited access to major expressways. It is primarily an owner/user market with leasing opportunities in the smaller to mid-size range. The user base generally consists of manufacturing companies that serve the area and are within close proximity to users homes. Much of the inventory is composed of mid-198 s buildings in contrast to the modern big-box distribution warehouses of neighboring submarkets. Many users choose to be in the Fox Valley submarket because they need to be there and remain in the submarket long-term, resulting in limited transaction velocity. Vacancy and Absorption. Vacancy jumped during the second quarter, finishing June with a rate of 11.19%, up from 1% in March. Behind the jump in vacancy was a significant amount of negative net absorption totaling negative 366,64 SF for the quarter, due to companies downsizing production, consolidating multiple locations or letting their leases expire. Historically a consistent submarket in terms of vacancy due to long-term users and an owner/user reputation, the Fox Valley submarket is experiencing the highest vacancy rates of its history. 2, 1, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Signifi cant adjustments in absorption are not anticipated due to the relatively low transaction velocity in the submarket. Pictured Above: 1155 Harvester Ln. in West Chicago, where tenant Liquid Container renewed their lease during the second quarter

19 Construction. The newest building to the submarket, a 31,439 SF industrial condominium building located at St. Charles in West Chicago was delivered during the past quarter. Little ongoing development remains. Recent development has seen little interest or activity due to the limited access to the area and the ongoing economic situation. When vacant space in the submarket is eventually absorbed, development should pick up again west of the Fox River, as little industrial-zoned land is left in the communities near the river. Fox Valley Sublease Vacancy Rate Available Space Profile.5 MM 1.5 MM.7 MM.8 MM 1.3 MM 5 4 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ # of Buildings Fox Valley Overview Sublease Vacancy (%) 2% 3 2 1% 1 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ % Transaction Activity. Largely a user/buyer market, a few significant lease transactions occurred during the past quarter. Sales activity remains limited, due to the long-term nature of many area users and the tight credit market for prospective buyers. Looking Forward. Vacancy rates will continue to slowly climb over the coming quarters, but significant adjustments in absorption are not anticipated due to the relatively low transaction velocity in the submarket. Fox Valley Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller None to report Fox Valley Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 1155 Harvester Ln. West Chicago 16,461 Liquid Container Lease renewal 18 W. Hawthorne Ln. West Chicago 56,266 Norix Group, Inc. New lease Nagel Blvd. Batavia 42,543 Hobi International Inc. New lease 11 Commerce Dr. West Chicago 12,464 QuestMark Flooring New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 19

20 Central DuPage POPULATION 393,294 (est.) 2 28 POPULATION CHANGE +1.% (est.) # INDUSTRIAL BUILDINGS 1,97 Schaumburg MARKET SIZE (SF) 66,946,799 VACANCY 6,413,65 SF (9.58%) 2Q9 NET ABSORPTION 329,379 YTD NET ABSORPTION 2,242 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 2 19 Bloomingdale Glendale Heights Addison Elk Grove Village Ohare Int'l Airport 294 Submarket Trends est Chicago 64 Carol Stream 355 Elmhurst 83 Vacancy Rate Net Absorption Asking Rents Glen Ellyn Lombard 88 W Vacancy and Absorption 1,2, 7, 2, -3, -8, Inventory By City 1% 9% 18% 2Q6 7% 3Q6 4Q6 1Q7 2Q7 Vacancy Rate (%) 27% 29% 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Addison Carol Stream Glendale Heights Elmhurst Hanover Park 2Q9 12% 9% 6% 3% % Bloomingdale, Lombard, Roselle, Vill Park, Wheaton Under Construction & Recent Deliveries Central DuPage Overview The well-positioned Central DuPage industrial submarket benefits from advantages including relatively low taxes, newer building inventory and an educated workforce. The recent completion of the I-355 extension, Chicago s newest expressway, has improved access to the area and spurred interest in the mature market. Users in the Central DuPage submarket vary by type and are not limited to primarily distribution like other nearby submarkets. Vacancy and Absorption. The Central DuPage submarket was one of the only to report positive absorption and a lower vacancy rate at the end of the second quarter, thanks to a recent spur of leasing and sales activity that has negated the first quarter s negative net absorption tallies. At the end of June, the vacancy rate was 9.58%, down from 1.1% in March. Relative to neighboring submarkets, sublease listings are more common in Central DuPage, accounting for more than 1% of vacancy, but still remain much lower than the record amount of sublease space on the market during the early 2s. 6, 5, Deliveries (SF) Under Construction (SF) Construction. New speculative construction has declined throughout 4, the submarket due to general market conditions, absorption concerns 3, 2, 1, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Leasing activity should continue to accelerate as landlord concessions encourage tenants to take advantage of low rates and attractive terms. Pictured Above: 815 Kimberly Dr. in Carol Stream, where tenant Hart & Cooley signed a longer-term lease during the second quarter

21 and increased vacancy. This trend will likely continue until existing vacant space is eventually absorbed. Rental rates have contracted, making new speculative or build-to-suit projects unlikely unless a specialty building is required. Central DuPage Sublease Vacancy Rate 3% Sublease Vacancy (%) Available Space Profile.9 MM.9 MM 2.9 MM 1.5 MM 1.7 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Central DuPage Overview 2% 1 # of Buildings 1% 8 6 % Transaction Activity. The first half of 29 has seen a relatively active transactional period in the Central DuPage submarket, especially compared to neighboring submarkets. Demand was largely influenced by larger tenants during the first quarter, while the second quarter featured primarily smaller-sized leases. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. Leasing activity should continue to accelerate during the coming quarters as landlord concessions encourage tenants to take advantage of attractive terms and low lease rates being extended by area landlords. Low taxes, excellent access and newer product will help the Central DuPage submarket be a leader as the real estate market eventually starts to turn around. Central DuPage Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 111 S. Rohlwing Rd. Addison 1, $3,5, $35. Venus Laboratories, Inc. Minuteman International Inc. 33 W. North Ave. Addison 53,389 $2,6, $ W. North Avenue LLC Private trust 2 Wrightwood Ave. Elmhurst 48, $2,625, $ Wrightwood, LLC John Morrell & Co. Central DuPage Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 815 Kimberly Dr. Carol Stream 25,92 Hart & Cooley New, long-term lease 99 Internationale Blvd. Glendale Heights 48,311 K&K Screw New lease 91 Mitchell Ct. Addison 45, Simplexgrinnell Lease renewal 596 Lamont Rd. Elmhurst 41,356 Stenograph, LLC New lease 775 W. Belden Ave. Addison 32,92 Cosmo Films New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 21

22 O Hare POPULATION 136,821 (est.) 2 28 POPULATION CHANGE -2.4% (est.) # INDUSTRIAL BUILDINGS 1,735 MARKET SIZE (SF) 11,236,619 VACANCY 12,89,74 SF (11.94%) 2Q9 NET ABSORPTION -72,495 mburg 72 Heights 9 Des Plaines Morto Grov N YTD NET ABSORPTION -62,587 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Itasca Elk Grove Village Ohare Int'l Airport Park Ridge Submarket Trends Vacancy Rate Net Absorption Asking Rents ngdale dale ghts Bensenville Addison Wood Dale Franklin Park Elmhurst Melrose Vacancy and Absorption 2,, 1,3, 6, -1, -8, -1,5, Inventory By City 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy Rate (%) Net Absorption (SF) 15% 12% 9% 6% 3% % O Hare Overview The O Hare submarket is unique due to its close proximity to O Hare International Airport and its central location at the crossroads of Chicago s expressway system. The O Hare submarket holds the most industrial inventory of all of the Chicagoland submarkets. Elk Grove Village alone is the nation s largest industrial park, boasting more than 4 million SF of industrial and flex space. Many of the buildings in the submarket are older and functionally obsolete. Redevelopment and construction has slowed dramatically. 1% 9% Elk Grove Village 11% Des Plaines 43% Bensenville Itasca 18% Wood Dale Rosemont 18% Under Construction & Recent Deliveries 8, 6, 4, 2, Deliveries (SF) Under Construction (SF) 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy and Absorption. O Hare land values were near record highs around $25 PSF in 27. Industrial land values have dropped precipitously over the past several quarters since the redevelopment bubble burst. This is attributed to the ailing economy, increased vacancy and negative absorption. Vacancy continued to climb through the first half of 29, ending the second quarter at nearly 12%, up from 1.1% a year ago. After slightly positive net absorption during the first quarter, significant vacancies turned the year-to-date absorption strongly negative for the submarket during the second quarter, due to net absorption totaling negative 72,495 SF from March through June. More than 17 million SF is available. Despite respectable amounts of leasing activity relative to other submarkets, it has not been enough to stave off rising vacancies and negative net absorption. Pictured Above: 777 Mark St. in Wood Dale, where CNA International Inc. signed a 234, SF lease during the second quarter

23 Construction. New construction in the O Hare submarket has nearly ground to a halt as planned projects are few and far between. A majority of the recent speculative construction projects in the O Hare submarket are currently sitting vacant. Available Space Profile 1.6 MM 5.1 MM 2.8 MM 1, 19,999 2, 49,999 O Hare Overview O Hare Sublease Vacancy Rate Sublease Vacancy (%) 2% 3.6 MM 4.2 MM 5, 99,999 1, 199,999 2,+ 1% 2 # of Buildings % 5 Transaction Activity. Despite respectable amounts of leasing activity relative to other submarkets, it has not been enough to stave off the ongoing trends of rising vacancies and negative net absorption. While spaces large and small are changing hands, companies continue to downsize or allow their leases to expire due to the ongoing economic recession. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. Vacancy rates will continue to increase slowly, but eventually stabilize when vacant space is absorbed as pentup activity accelerates. Significant incentives and concessions being extended by landlords should facilitate this process when the capital markets permit substantial lending. O Hare Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller Thomas Dr. Bensenville 119, $5,75, $48.32 Central States Trucking Co. ProLogis 88 Industrial Dr. Bensenville 24,15 $1,45, $6.4 Loftus Holdings LLC Keith Madelung 88 Busse Rd. Elk Grove Village 2, $1,4, $7. Advanced Valve Technology Arthur Machinery, Inc. O Hare Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments Golf Ln. Bensenville 352,119 The Bradford Exchange Lease renewal 777 Mark St. Wood Dale 234, CNA International Inc. New lease 26 Elmhurst Rd. Elk Grove Village 15, Moss, Inc. New lease Kirk St. Elk Grove Village 87,6 Universal Beauty Products New lease Allan Dr. Elk Grove Village 5,56 Kamino International Transport New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 23

24 West Cook POPULATION 241,764 (est.) 2 28 POPULATION CHANGE -5.4% (est.) # INDUSTRIAL BUILDINGS 743 MARKET SIZE (SF) 6,538,35 VACANCY 7,18,642 SF (11.74%) 2Q9 NET ABSORPTION -35,28 YTD NET ABSORPTION -1,37,58 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) Submarket Trends Vacancy Rate Net Absorption Asking Rents k Grove Village Bensenville 29 Elmhurst Ohare Int'l Airport Franklin Park Melrose Park Bellwood Schiller Park Niles 43 Oak Park Skokie 9 94 Chicago Vacancy and Absorption 1,5, 1,, 5, -5, -1,, -1,5, Inventory By City 1,2, 1,, 2Q6 3Q6 5% 8% 9% 12% 8, 6, 29% 4Q6 1Q7 2Q7 Vacancy Rate (%) 37% 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Franklin Park Melrose Park Bellwood Schiller Park Berkeley 2Q9 12% 1% 8% 6% 4% 2% % Harwood Heights, Hillside, Maywood, Norridge, River Grove Under Construction & Recent Deliveries Deliveries (SF) Under Construction (SF) West Cook Overview The West Cook submarket draws companies from the city of Chicago looking for a more functional building and additional amenities compared to the aging, often obsolete inventory of properties in Chicago. Additionally, companies migrate to the area from the nearby O Hare submarket where interstate and airport access is similar, but rental rates tend to be higher. The West Cook submarket benefits from good access to the city of Chicago, close proximity to area interstates and rail providers and relatively low rental rates. It is primarily an owner/ user market, but leasing opportunities have increased as institutional and private owners have entered this market. Vacancy and Absorption. Similar to the O Hare submarket, industrial land values were driven to near record high levels during 26-27, as interested investors purchased land for development. Much of this recent development is now sitting vacant due to the current economic situation and the high asking rates associated with the vacant space. The vacancy rate has been on a steady climb since the beginning of 28, approaching 12% at end of the first half of 29. Net absorption has closely followed this trend, totalling negative 35,28 SF for the first quarter and a substantial negative 1,37,58 SF year-to-date. 4, 2, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Tenants with upcoming expirations are increasingly taking advantage of the low rents and leasing incentives being offered. Pictured Above: A rendering of River Rd. in Franklin Park, where R&M Trucking Company leased a total of 195,71 SF during the second quarter

25 Construction. Following the recent development boom of 26-28, the number of new construction projects has ground to a halt, due to absorption concerns and climbing vacancy rates. West Cook Sublease Vacancy Rate 2% Sublease Vacancy (%) Available Space Profile 2.2 MM.4 MM 1.3 MM 3.2 MM 3.4 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ West Cook Overview 1% 5 # of Buildings 4 % Transaction Activity. The most significant activity in the West Cook submarket during the second quarter was air and ocean freight forwarding firm R&M Trucking Company s lease of 195,71 SF. As asking rents continue to contract, the recently constructed vacant space in the West Cook submarket will eventually be absorbed, allowing vacancy rates to stabilize. Sales activity remains very limited as financing is difficult to obtain for potential buyers, and asking prices remain elevated relative to market conditions. 1 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. As market conditions continue to force landlords to lower asking rates, leasing activity will increase as tenants with upcoming expirations are taking advantage of leasing incentives. Eventually, this trend will result in absorption of vacant space throughout the submarket. West Cook Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 3434 Runge St. Franklin Park 51,666 $2,95, $57.1 Grant Park Packing Sitex Realty Group, LLC 2575 W. LeMoyne St. Melrose Park 2,176 $84,5 $39.87 Dynamic Fastener Sitex Realty Group, LLC West Cook Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments River Rd. Franklin Park 195,71 R&M Trucking Company New lease 1 W. Whitehall Dr. Northlake 89,837 Farmers Brothers Coffee Co. New lease 15 N. 25th Ave. Melrose Park 76,79 Smart Box Chicago, Inc. New lease 251 W. Grant Ave. Bellwood 39,583 Dynamic Manufacturing, Inc. New lease 94 W. King St. Franklin Park 33,79 American Metalcraft New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 25

26 3 59 I-88 Corridor POPULATION 556,685 (est.) 2 28 POPULATION CHANGE +21.% (est.) # INDUSTRIAL BUILDINGS 772 MARKET SIZE (SF) 61,356,357 VACANCY 7,436,25 SF (12.12%) 1Q9 NET ABSORPTION -65,372 YTD NET ABSORPTION -995,279 NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 525, St Charles 29 Dupage Carol Stream Airport Elmhurst West Chicago 355 Batavia Oak Brook North Aurora Lisle Downers Naperville Grove Sugar Grove 53 Aurora 34 Woodridge Montgomery 55 3 Bolingbrook Submarket Trends Vacancy Rate Net Absorption Asking Rents Vacancy and Absorption 1,, 6, 2, -2, -6, -1,, Inventory By City 2Q9 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy Rate (%) Net Absorption (SF) 15% 12% 9% 6% 3% % I-88 Corridor Overview The I-88 Corridor industrial submarket has seen increased demand and speculative development during the past few years, due to the lack of land for development in feeder markets such as Central DuPage and West Cook. Developers were drawn to the large available land sites and easy access to major expressways that the I-88 submarket has to offer. This rapid pace of development has slowed over the past few quarters as obtaining project financing has become difficult, vacancy has increased and activity has been limited. 15% 17% 7% 18% 43% Aurora Naperville Montgomery Downers Grove Oswego, Westmont, North Aurora, Hinsdale, Lisle, etc. Vacancy and Absorption. Over the past year, vacancy rates in the I-88 Corridor have climbed from 8.2% to 12.12%, the highest level seen in the submarket s history. Significant negative net absorption has been the result, and the second quarter was no exception, posting net absorption numbers totaling negative 65,372 SF. Available supply has eclipsed 1 million SF (16.9%) for the first time. Under Construction & Recent Deliveries 1,5, Deliveries (SF) Under Construction (SF) 1,25, 1,, 75, Construction. Much of the speculative development that has been so prevalent throughout the area has been put on hold due to the current economic climate, change in demand and difficulty financing new projects. Construction during the foreseeable future will likely be limited 5, 25, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Over the long-term, the plethora of quality product will help the I-88 Corridor continue to attract tenants. Pictured Above: A rendering of Park Buterfield, where tenant InnerWorkings, Inc. signed a lease for 55,55 SF during the second quarter

27 to build-to-suit and highly customized projects, such as the new 525, SF FHP facility currently under construction by IDI in Aurora s Prairie Point West Industrial Park. The most recently completed project was a 463,636 SF speculative distribution building located in the Liberty Business Center Aurora. I-88 Corridor Sublease Vacancy Rate 2% Sublease Vacancy (%) Available Space Profile.8 MM 1.5 MM 4.7 MM 1.7 MM 1.8 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-88 Corridor Overview 1 # of Buildings 1% % Transaction Activity. Significant transactions are few and far between in the submarket; instead activity remains limited to smaller-sized deals and lease renewals. The current tenants market should translate to increased activity if the economy begins to turn the corner and demand grows. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. Over the near-term, the ongoing trends throughout the market and economy will continue to negatively impact the I-88 Corridor submarket, leading to rising vacancy, negative net absorption, additional available supply on the market and contracting rental rates. Over the long-term, the plethora of quality product will help the I-88 Corridor continue to attract tenants. I-88 Corridor Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 1555 & 1567 Frontenac Rd. Naperville 48,5 $3,285,5 $67.74 R&J Commercial Properties Frontenac Road Partnership I-88 Corridor Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 3553 Butterfield Rd. Aurora 55,55 InnerWorkings, Inc. New lease 173 Eastwood Dr. Aurora 35,695 Tracker Industries, Inc. Lease renewal 3565 Butterfield Rd. Aurora 32,541 Cano Container New lease 1936 University Ln. Lisle 15,4 Ames Supply Co. Lease renewal Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 27

28 I-55 Corridor POPULATION 238,889 (est.) 2 28 POPULATION CHANGE +34.5% (est.) # INDUSTRIAL BUILDINGS 653 MARKET SIZE (SF) 79,974,13 VACANCY 11,415,653 SF (14.27%) 2Q9 NET ABSORPTION 39,859 YTD NET ABSORPTION -421,54 a Naperville 53 Downers Grove Woodridge Hinsdale Burr Ridge 294 Wi Spr NEW SUPPLY (SF) UNDER CONSTRUCTION (SF) 264, Bolingbrook Submarket Trends 3 55 Romeoville Vacancy Rate Net Absorption Asking Rents Plainfield Vacancy and Absorption 4,, 3,, 2,, 1,, -1,, 1Q9 4Q8 3Q8 2Q8 1Q8 4Q7 3Q7 2Q7 1Q7 4Q6 3Q6 2Q6 Vacancy Rate (%) Net Absorption (SF) 2Q9 2% 16% 12% 8% 4% % I-55 Corridor Overview Of all of the Chicago area industrial submarkets, the I-55 Corridor submarket has seen the most activity and development interest over the past several years. As a result, much of the available land parcels have been developed or are controlled by developers, rendering the I-55 Corridor submarket an infill market with little additional land for significant new development. Inventory By City 1% 5% 5% 9% 34% 37% Bolingbrook Romeoville Woodridge Lemont Plainfield Burr Ridge, Forest View, Willowbrook Under Construction & Recent Deliveries 4,5, 3,75, 3,, 2,25, Deliveries (SF) Under Construction (SF) Vacancy and Absorption. The I-55 Corridor was one of only a few submarkets to record a drop in vacancy and positive net absorption during the second quarter. While area companies continue to contract in today s economy, releasing additional vacant space into the market, a rash of large lease transactions occurred during the first half of 29 enough to slightly lower vacancy rates and result in a period of positive absorption. At the end of June, 14.27% of the submarket s industrial base sat vacant, compared to 14.7% last quarter. The corridor posted net absorption totaling 578,946 SF for the first half of 29. Construction. A hot spot for recent development, new construction starts have been few, as construction is limited to ongoing projects that began before the credit crisis and subsequent recession hit. 1,5, 75, 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 Following a period of limited leasing activity in the second half of 28, a surge of transactions has taken place during the fi rst half of 29. Pictured Above: 171 Remington Blvd., in Bolingbrook, where Home Depot renewed their lease for 8, SF of distribution space during the second quarter

29 The widening of Weber Road and the rebuilding of the Weber Road/I-55 interchange will pave the way for future development when some of the more than 11 million SF sitting vacant in the corridor is absorbed. I-55 Corridor Sublease Vacancy Rate 2% Sublease Vacancy (%) Available Space Profile.5 MM 2.2 MM 1.1 MM 1.3 MM 8.4 MM 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ I-55 Corridor Overview 1% 5 # of Buildings 4 3 % Transaction Activity. Following a period of limited leasing activity in the second half of 28, a surge of transactions has taken place during the first half of 29. Typical of the area, many of the recent leases have been for large distribution spaces to be occupied by international companies such as Home Depot, Sanyo Logistics, and Canon USA. While sales activity remains limited, leasing will continue as tenants look to take advantage of low asking rates, significant leasing incentives, and flexible landlords. 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ Looking Forward. Benefitting from a diverse industrial base, a large and educated labor pool and excellent access via I-55 and I-355, the I-55 Corridor submarket will see consistent interest and activity over coming quarters, and will be a leader when the real estate market starts to turn the corner. I-55 Corridor Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller N. Weber Rd. Romeoville 658,6 $21,8, $33.13 Molto Capital LLC RREEF I-55 Corridor Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 171 Remington Blvd. Bolingbrook 8, Home Depot Lease renewal 86 W. Crossroads Pky. Romeoville 214,932 Sanyo Logistics Corporation New lease 86 W. Crossroads Pky. Romeoville 217,592 LeSaint Logistics New lease 135 N. Beaudin Blvd. Woodridge 174,8 Canon USA, Inc. New lease 76 Crossroads Pky. Bolingbrook 165, Kumho Tire USA, Inc. New lease 2 Gateway Ct. Bolingbrook 163,47 OHL New lease 11 E. Crossroads Pky. Bolingbrook 118,86 Honeywell New lease NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 29

30 59 I-8/Joliet Corridor POPULATION 426,928 (est.) 2 28 POPULATION CHANGE +38.9% (est.) # INDUSTRIAL BUILDINGS 613 MARKET SIZE (SF) 62,369,997 VACANCY 12,13,879 SF (19.45%) 1Q9 NET ABSORPTION 1,523,4 YTD NET ABSORPTION 1,4,818 NEW SUPPLY (SF) 934, UNDER CONSTRUCTION (SF) 38,4 Submarket Trends Vacancy Rate Net Absorption Asking Rents le Ottawa Seneca 47 North Aurora 113 Aurora Plainfield Tinley Park 3 6 Shorewood Joliet Mokena 3 New Lenox 53 Minooka Channahon Elwood Downers 55 Grove Bolingbrook A Kankakee Vacancy and Absorption 5,, 3,8, 2,6, 1,4, 2, -1,, Inventory By City 6,, 5,, 4,, 3,, 2,, 1,, 2Q6 3Q6 5% 1% 4Q6 1Q7 2Q7 Vacancy Rate (%) 16% 44% 25% 2Q6 3Q6 4Q6 1Q7 3Q7 2Q7 4Q7 3Q7 1Q8 4Q7 2Q8 3Q8 4Q8 1Q9 Net Absorption (SF) Joliet Elwood Minooka Ottawa Under Construction & Recent Deliveries 1Q8 Deliveries (SF) 2Q8 3Q8 4Q8 2Q9 1Q9 2Q9 22% 19% 16% 13% 1% 7% Mokena, New Lenox, Shorewood, Frankfort, etc. Under Construction (SF) I-8/Joliet Corridor Overview The I-8/Joliet Corridor submarket has historically catered to multistate big box distribution. Its access to I-8 and I-55 position the corridor well for distribution operations. In addition, the nation s largest inland port is located in Elwood. This intermodal development, also known as Logistics Park Chicago, has remained a bright spot not only in the corridor, but for the entire Chicago market. The reason for its continued success is the development s ability to offer tremendous transportation savings to importing operations as well as being a pre-approved Foreign Trade Zone. This intermodal development has fueled the region s growth, while the developments located outside of the intermodal campus are positioned to cater to heavy distribution prospects whose supply chains are not designed to bring their international containers inland. Vacancy and Absorption. The I-8/Joliet corridor experienced a drop in vacancy during the second quarter for the first time since 27. At the end of June, vacancy in the corridor was 19.45%, down from 2.7% in March, resulting in net absorption totaling positive 1,523,4 SF. A large part of this absorption was due to the delivery of grocery wholesaler Centrella s new distribution center totaling 934, SF at 26 New Lenox Rd. in Joliet. It has become a very opportune time for corporations to consider renegotiating lease terms or moving into the area. Pictured Above: 251 Laraway Rd. in Joliet where California Cartage Company leased 374,46 SF

31 Construction. Now that Centrella s new facility has been delivered, few new development projects are underway. However, several planned and proposed projects remain in the pipeline. The Logistics Park Chicago intermodal development in Elwood is preparing to break ground on a 1.2 million SF speculative facility one of the few new speculative developments in all of Chicago. In addition, a new intermodal development has now recently broken ground in Joliet. The new intermodal is projected to begin operations in 21. Transaction Activity. The most significant transaction during the second quarter took place at developer Ryan Companies Laraway Crossings Business Park, where trucking, warehousing and freight forwarding company California Cartage signed a lease for 374,46 SF. Looking to lease vacant space and secure tenants, institutional owners are becoming increasingly flexible with lease terms and rental rates. It has become a very opportune time for corporations to consider renegotiating lease terms or moving into the area, as existing vacancy will continue to cause downward pressure on rental rates. Available Space Profile MM.4 MM.6 MM.7 MM 1, 19,999 9 MM 2, 49,999 5, 99,999 1, 19,999 2, 49,999 5, 99,999 1, 199,999 2,+ 1, 199,999 # of Buildings 2,+ I-8/Joliet Corridor Overview Looking Forward. Vacancy will remain elevated as even several significant transactions will not make an appreciable dent on the more than 12 million SF that sits vacant in the submarket. Multiple years of positive absorption (particularly of the non-intermodal developments) must occur before achieving a balance between supply and demand. With room for growth, excellent access and transportation options and a sizeable, educated labor pool, the future of the I-8/Joliet Corridor is promising. I-8/Joliet Corridor Sale Transactions 2nd Qtr. 29 Property Address City Size (SF) Sale Price Price PSF Buyer Seller 615 E. Kankakee River Dr. Wilmington 71, $4,185, $58.94 International Transload Logistics Private 223 Howell Dr. New Lenox 14,62 $3, $2.55 Private Trust Fleischhauer Klaus I-8/Joliet Corridor Lease Transactions 2nd Qtr. 29 Property Address City Leased (SF) Tenant Comments 251 Laraway Rd. Joliet 374,46 California Cartage Company New lease 7979 W 183rd St. Tinley Park 129,873 Owens and Minor New lease Italics denotes NAI Hiffman transaction NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 31

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

33 Methodology & Defi nitions Methodology The information included in this report is the result of a compilation and analysis of data from various sources on class A, class B and class C industrial properties located in the metropolitan Chicago area defined by the submarket map on the opposite page. NAI Hiffman obtained the information from property representatives, CoStar Group, RealCapital Analytics, industry periodicals and magazine, our in-house property database, and other sources. NAI Hiffman greatly appreciates the participation of each of these individuals, companies and resources, without whose help this report would not have been possible. All of the information detailed throughout this report is saved and organized in our own in-house database and is regularly updated. Utilizing this database, we can analyze, calculate and report demographic information, inventory, vacancy, availability, net absorption, and transactional information. Definitions The NAI Hiffman Industrial Market Report tracks several measures of market conditions. This information is collected for individual properties then consolidated, organized and analyzed for submarket and market totals. These terms, used throughout the report, are defined below according to NAIOP Terms & Definitions. Net Absorption. The net change in occupied space in a given market between the current measurement period and the last measurement period. Net absorption can be either positive or negative and must include decreases as well as increases in inventory levels. For the purpose of this report, sublease space is included in the calculation of net absorption. New Supply. The total inventory delivered to the market since the last measurement period. Delivered is defined as total square footage and/or number of buildings that has completed construction and received a certificate of occupancy during a stated period. Under Construction. Buildings where either: a) actually ground breaking has occurred (site excavation or foundation work) and construction is ongoing (not abandoned or discontinued) but for which a certificate of occupancy has not yet been issued; or b) properties undergoing conversion to office from another use or c) properties undergoing a major renovation where 75 percent or more of the building is not available for lease and building generally requires a certificate of occupancy to be made available for lease. Submarket Map / Methodology / Definitions Total Inventory (Market Size). The total square footage of gross rentable area in a specific market. It includes the gross rentable area in buildings that have received a certificate of occupancy. Total inventory increases when a new building is delivered and decreases when an existing building is destroyed, demolished or its use changes. Available Space. The total amount of space that is currently being marketed as available for lease in a given time period. It includes space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Available space excludes shadow space. Vacancy Rate. A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of inventory. Vacant space is inventory that is not currently occupied. Shadow Space. That portion of leased space which is vacant but not available space. Shadow space is difficult to measure. (Synonym: phantom space) NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 33

34 NAI Hiffman & NAI Global The Power of Local Knowledge. NAI Hiffman is the largest full service, privately-owned commercial real estate brokerage and management company in the Chicago region. With over 22 brokers and employees, NAI Hiffman is dedicated to providing our clients with the most comprehensive real estate services. Our clients come to us for our deep local knowledge and they build their business on the power of our global managed network. NAI Hiffman delivers world-class, results-oriented, office, industrial, retail, and investment brokerage and management services including: Acquisition & Dispositions Leasing & Subleasing Tenant Representation Property Management Sale/Leaseback Build-to-Suit Investment Services Site Selection Due Diligence Market Research Consulting & Strategic Planning Receivership & REO Disposition The Power of Global Reach. NAI Global is the premier network of independent commercial real estate fi rms and is one of the largest commercial real estate service providers worldwide. What makes us different is the way we bring together people and resources in over 325 offi ces in 55 countries around the world to deliver results for our clients. As the world s only managed network of commercial real estate fi rms, we conclude over $45 billion in business annually by working together to help our clients strategically optimize their assets. We also manage over 2 million SF of commercial space. For more information, visit In 27-28, NAI Global received top industry rankings: Ranked #2 brokerage network by Real Estate Forum Ranked #3 brokerage by Commercial Property News Ranked #4 by Lipsey s Top 25 Real Estate Brands NAI Global is based in Princeton, New Jersey. A dedicated staff, strategically positioned around the world, provides technology, marketing and corporate services support to NAI Global s network of real estate offi ces.

35 NAI Hiffman Dennis Hiffman Jeff Fischer Michael Robbins Kyle Glascott Chairman & CEO Vice President Associate Associate David Peterson, RPA Larry Goldwasser Adam Roth, CCIM Mike Tenteris COO Vice President Vice President Senior Vice President Industrial Services John Cash, SIOR Exec. V.P. /Managing Director Duke Botthof Executive Vice President Brian Colson Executive Vice President Steve Connolly Executive Vice President Benjamin Cremer Vice President Kelly Disser Associate Eric Fischer Senior Associate David Haigh Associate Daniel Leahy, SIOR Executive Vice President Jay Maher, III Associate Irvin Malik Associate Adam Marshall Senior Associate Mark Moran Executive Vice President Lawrence Much, SIOR Executive Vice President Stephen Sullivan Vice President Eric Tresslar Vice President David Troha Associate John Whitehead Associate Daniel Wilkins Associate Investment Services Chad Firsel Executive Vice President Arthur Burrows Senior Vice President William Montana Senior V.P./Managing Director Multifamily Investment Sales Brent Jacob Associate Multifamily Investment Sales Research Craig Hurvitz Director of Statistics and Market Information Marketing Julia Sutherland Marketing Director Jennifer Burke Catherine DeBoer Elsa Gaztambide Karen Kirian Alison O Connell Melody Palese Denise Racana Jonathan Skaggs Alicia Smiley NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT MID-YEAR 29 35