Chicago, Market Facts 5.% As of January 01, metropolitan area unemployment dropped 0 basis points (bps) year-over-year to 5.%. 10,300 jobs Over the same period, the largest bumps in job growth can be attributed to the construction, financial services, and manufacturing industries adding a collective 10,300 jobs year-over-year. 9% There are currently 33 properties under construction with a total of 9.9 msf. A 9% decrease year-over-year. 7.5 MSF There were 73 recorded lease transactions totaling 7.5 msf. This correlates 3.% jump when compared to last quarter. Economic Overview Chicago s economic climate continued to trend upward throughout the first quarter of 01. As of January 01, metropolitan area unemployment dropped 0 basis points (bps) year-over-year to 5.%. However, this is higher than the United States unemployment rate which is.5%. The largest decreases in unemployment were recorded within Lake County, Indiana and Kenosha County, Wisconsin, seeing drops of 130 and 10 bps respectively. Over the same period, the construction, financial services, and manufacturing industries saw the most job growth. These sectors added a collective 10,300 jobs year-over-year, accounting for % of the total jobs added. Air cargo tonnage at both of Chicago s major airports has increased dramatically over the last year. As of January 01, the tonnage increased.9% year-over-year up from 13,097 tons in January 017 to 15,97 tons. This is expected to increase as Chicago s O Hare International Airport is slated for a major $.5 billion renovation. Chicago Industrial Market The Chicago industrial Market, comprised of over 1.1 billion square feet (bsf ), continued to witness a declining vacancy rate across most major submarkets during the first quarter. Construction activity began to slow after a record breaking number of deliveries hit the market throughout 017. Leasing velocity improved 3.% from last quarter. Most of the space absorbed took place within the I-55 Corridor, US- Corridor and O Hare submarkets. Investment activity slowed when compared to previous quarters. Transactional volume recorded a 13% dip in value from the fourth quarter 017. Private capital was by far the largest investor in industrial product, comprising 7% of total funds invested. avisonyoung.com page 1
ILLINOIS INDIANA Chicago JEFFERSON WAUKESHA MILWAUKEE Looking Ahead Infill development is picking up across the Market, predominantly within the O Hare submarket. This is due to increased demand as well as a lack of land sites available. Leading the charge are CenterPoint Properties and Bridge Development which have a combined 1msf of product currently under construction. Brennan Investment Group recently acquired an 5-acre land site in Elk Grove Village. The firm is proposing 1. million square feet (msf ) across nine buildings, ranging from 73,000 to 0,000 square feet (sf ). The first phase of the project is expected to break ground by mid-01. Elk Grove Village is the largest community within the submarket, home to several thousand businesses and provides direct access to all major roadways as well as O Hare International Airport. WINNEBAGO OGLE LEE 17 ROCK BOONE DEKALB WALWORTH WISCONSIN ILLINOIS 10 MC HENRY 9 KANE KENDALL 1 1 RACINE DUPAGE KENOSHA 1 LAKE 11 1 7 3 COOK 13 Lake Michigan 5 CHICAGO 19 Construction within the O Hare submarket increased 5% year-over-year LA SALLE GRUNDY 1 WILL 15 KANKAKEE LAKE NEWTON LIVINGSTON Industrial Submarkets by the Numbers Map Key Submarket Inventory (sf) Vacancy (sf) Vacancy (%) Net Absorption Under Construction Avg Asking Rent Overall Market 1,10,575,517 5,,0 5.9% 3,,735 9,91,57 $.3 1 Lake County 70,9,1 3,10,3.5% 33,30 59,07 $5.7 Southern Wisconsin 31,1, 1,0,979 3.% 177,909 0 $. 3 North Cook 1,71,31,0,5.9% -,15 3,17 $5.9 O Hare 11,5,370 5,015,9.5% 519,31 1,37,99 $5.59 5 South Chicago Industrial 10,05,11 5,37,577 5.3% -7,957 0 $. North Chicago Industrial 5,9,,93,593 5.% 11,577 0 $9.9 7 West Cook 9,3,0,9,95 5.1% -330,09 33,33 $.51 I-90 East Corridor 1,,5,33,1 11.3% 15,0 0 $.5 9 I-90 West/Elgin Corridor 3,55,079,39,00 7.% 39,319 0 $5.01 10 McHenry County 3,1,513 1,7,35.0% -97,31 0 $.53 11 East DuPage 33,350,71 1,97,9.5% -130,703 53,000 $5.51 1 US- Corridor 9,15,70,1,77.% 0,55 300,000 $3.7 13 South Cook 7,99,7,35,05 3.7% -303,7 0 $3.75 1 I-55 Corridor 9,9,577 11,009,131 11.% 1,300,5 1,90,9 $.5 15 I-57 Corridor 0,35,3,17.% 10,9 0 $.50 1 I-0 Corridor 1,13,10,0, 7.% -39,713,59,019 $.07 17 I-39 Corridor 50,99,9 3,91,750.5% 5,51 7,51 $.7 1 I- Corridor 5,50,137 3,15,10 5.% -1,393 0 $5.91 19 Northwestern Indiana,5,0,117,179.% 1,900 3,000 $.03 avisonyoung.com page
Vacancy & Availability Average Asking Rental Rate ($) Due to increased demand, Chicago s vacancy rate dropped 0 bps from year-end 017 to 5.9%. Most major submarkets witnessed a decrease in vacancy, while only six of the nineteen submarkets recorded an increased vacancy rate. Submarkets which posted the largest decreases were Southern Wisconsin, I-90 West/Elgin Corridor, and the I-55 Corridor down 0 bps to 3.%, down 10 bps to 7.%, down 10 bps to 11.% respectively. There has been record- $.75 $.70 $.5 $.0 $.55 $.50 $.5 $.0 $.35 015 Q1 01 Q1 017 Q1 01 Q1 breaking construction activity within the I-0 Corridor..1 msf has been added to the submarket over the last 1-months and has increased vacancy by 70 bps to 7.% from year-end 017. Absorption & Demand Leasing activity across the market saw an uptick during the first quarter of 01. There were 73 recorded lease transactions totaling 7.5 msf. This correlates to a 3.% jump when compared to last quarter. The average deal size rose Vacancy Rate (%) 7.75 7.50 7.5 7.00.75.50.5.00 5.75 015 Q1 01 Q1 017 Q1 01 Q1 3.% to 3,35 sf. Submarkets which saw the most activity were the I-55 Corridor, I-0 Corridor, and O Hare submarket Net Absorption (MSF) recording 1.3 msf, 1. msf, and 7,70 sf respectively. Of the leases signed this quarter, manufacturing-related businesses accounted for 50.%, while transportation-related business accounted for.0%. The largest lease transaction during first quarter was thirdparty logistics provider Kenco s lease of 599,317 sf at 500 W Industrial Dr in Monee. Other notable lease transactions include Uline s lease of 17,3 sf at 11559 0th Ave in 9 7 5 3 1 015 Q1 01 Q1 017 Q1 01 Q1 Southern Wisconsin s Pleasant Prairie. The building was built on a speculative basis in 017. This marks the third building that the tenant will occupy within CenterPoint s Lakeview Corporate Park. RJW Transport has leased 35,1 sf at 01 Internationale Pkwy in Woodridge. Royal Box has leased 33,33 sf at 1531 S 5th Ave in Cicero. Overall, asking rental rates dipped slightly during the first quarter of 01 down 1.7% from last quarter to $.3 per square foot (psf ). Submarkets with the highest recorded average rates were North and South Chicago as well as the SF LEASED Leasing Activity 9 7 5 3 1 0 015 Q1 015 Q 015 Q3 015 Q 01 Q1 01 Q 01 Q3 01 Q 017 Q1 017 Q 017 Q3 017 Q 01 Q1 1 1 1 1 10 0 NUMBER OF DEALS I-57 Corridor collectively averaging $7.37 psf. Leased SF Number of Deals avisonyoung.com page 3
Construction The Chicago market witnessed an increase in delivered product during the first quarter of 01 up 5.% to.7 msf. The average building size was 19,17 sf. Nine of the 1 delivered properties were speculative, totaling. msf. 5% of all space delivered was in the I-0 and I-55 corridors. The largest building delivered to the market this quarter was 300 Graaskamp Blvd in Wilmington. The 10,000-sf speculative building is located within the I-0 Corridor and was developed by Ridge Development. The property remains vacant. There are currently 33 properties under construction for a total of 9.9 msf, a 9% decrease year-over-year. Most construction is located within the I-0 and I-55 corridors, representing % of total construction. The largest project to have broken ground during the first quarter was within I-55 Corridor, CT Realty Advisor s Interchange 55 Logistics Park in Romeoville is a 11-acre site that will be home to two new speculative buildings adding 1.3 msf to the submarket. The O Hare submarket saw an % increase in construction year-over-year. Much of the development is infill. Investment Investment within industrial product dipped slightly during the first quarter of 01. There were 90 properties that traded with a transactional volume of $1. billion. This represents a 13% drop from the fourth quarter of 017. The average psf was $7. The largest investment sales transaction during the first quarter was 15 N Throop St in Chicago. The 10,000-sf property was fully vacant at the time of sale and traded for $10,700,000 or $55 psf. The purchaser, Sterling Bay, plans to redevelop the site into a mixed-use project which will predominately focus on office and multi-family. The site was owned by the City of Chicago, which recently changed the zoning allowing for redevelopment of the site. Other notable transactions include Canadian-based Onni Group s purchase of 901-1101 N Halsted St in Chicago for $50 million or $333 psf. The 15,91-sf property was previously owned by Greyhound Lines. Onni Group plans to redevelop the site into a multi-family development. Both properties are located within the North Chicago submarket. 300 Graaskamp Blvd in Wilmington was the largest property delivered during the first quarter. The 10,000-sf speculative building is located within the I-0 corridor and remains vacant. Interchange 55 Logistics Park broke ground in Romeoville. Once complete the park will house two buildings that total a combined 1.3 msf. Notable Leases Tenant Address Submarket Size (SF) Type Kenco 500 W Industrial Dr I-0 Corridor 599,317 New Uline Inc 11559 0th Ave Southern WI 17,3 New RJW Transport 01 Internationale Pkwy I-55 Corridor 35,1 New Royal Group 1531 S 5th Ave West Cook 33,33 New WestRock 35 Crossing Rd I-55 Corridor 59,7 Renewal Home Depot 3900 Brandon Rd I-0 Corridor 50,5 New Notable Sales Address Size (SF) Buyer Seller Sales Price 15 N Throop St, Chicago 10,000 Sterling Bay City of Chicago $10,700,000 901-1101 N Halsted St, Chicago 15,91 Onni Group Greyhound Bus Lines $50,000,000 500 Enterprise Cir, West Chicago 550,000 DS Containers CenterPoint Properties $3,77,500 70 Northgate Pky, Wheeling 11,09 Cabot Properties Hamilton Partners $17,035,000 avisonyoung.com page
CHICAGOLAND Construction & Deliveries Notable Q1 Construction [00,000+ SF Projects] Market Building NRA Type Delivery Date Developer Major Tenants % Leased** I-0 Corridor 50 Emerald Ave 1,50,000 BTS Q- 01 Gray Construction Co IKEA 100% I-0 Corridor 300 Channahon Rd 1,0,10 Speculative Q-01 The Opus Group None 0% I-0 Corridor 101 S Frontage Rd 1,000,110 Speculative Q-01 USAA Real Estate Company None 0% I-55 Corridor Bluff Rd - Interchange 55 Logistics Park,30 Speculative Q-01 CT Realty Advisors None 0% I-55 Corridor Bluff Rd - Interchange 55 Logistics Park 57,50 Speculative Q-01 CT Realty Advisors None 0% Lake County Gregory Dr 55,500 BTS Q3-01 IDI Logistics Undisclosed 100% O'Hare 1101 Copenhagen Ct 00,19 Speculative Q-01 Panattoni Development Co None 0% I-0 Corridor Route & Houbolt Rd 355,199 Speculative Q-01 First Industrial None 0% O'Hare 10701 Seymour Ave 333,9 Speculative Q-01 CenterPoint Properties None 0% West Cook 1531 S 5th Ave 33,33 Speculative Q-01 Bridge Development Royal Group 100% US- Corridor 1370 Brewster Creek Blvd 300,000 BTS Q3-01 Rana USA Rana USA 100% I-0 Corridor 1700 S Ridgeland Ave 9,10 Speculative Q3-01 Hillwood None 0% I-55 Corridor 501 Internationale Pky 3,3 Speculative Q-01 Prologis None 0% O'Hare 1001 Franklin Ave 77,7 Speculative Q3-01 Bridge Development None 0% East DuPage 390 Curtiss St 53,000 BTS Q3-01 Rexnord Corp Rexnord Corp 100% North Cook 301 Howard St 3,91 Speculative Q3-01 Hillwood None 0% O'Hare 1001 Seymour Ave 5,91 Speculative Q3-01 CenterPoint None 0% Totalm,5,1 Notable Q1 Deliveries Market Building NRA Type Developer Major Tenants % Leased** I-0 Corridor 300 Graaskamp Blvd 10,000 Speculative Ridge Development None 0% I-55 Corridor 100 W 13rd St 30,9 Speculative Exeter Property Group LLC None 0% I-55 Corridor 100 W 13rd St 30,5 Speculative Exeter Property Group LLC None 0% US- Corridor 135-1395 Brewster Creek Blvd 1,000 Speculative Ridge Development None 0% Northwest Indiana 00 Mississippi St 1,000 Speculative Becknell Industrial None 0% I- Corridor 17 W Jefferson Ave 19,50 Speculative Northern Builders None 0% South Chicago Ind 10700 S Doty Ave E 10,000 BTS Chicago Neighborhood Initiatives, Inc Whole Foods 100% Lake County 1000-110 E Peterson Rd 133,951 BTS Okabe Co, Inc Okabe Co 100% I-55 Corridor 109 Lily Cache Ln 115,0 Speculative Prologis Alta Industrial % O'Hare 1500 N Michael Dr 101,50 Speculative Distribution Realty Group, LLC None 0% US- Corridor 131 Schiferl Rd 100,91 BTS Camcraft Camcraft 100% O'Hare 9300 King St 99,07 Speculative Clarius Partners, LLC None 0% I-90 West/Elgin Corridor 370 Joseph Dr 5,750 BTS Haumiller Engineering Haumiller Engineering 100% I-90 East Corridor 01 Commerce St 0,000 BTS Northern Builders, Inc Sodick, Inc 100% Construction Completed Total,7,0 avisonyoung.com page 5
Contiguous Blocks [Available Class A Space 00,000+ SF] Building Address Submarket Name City State Year Built Rentable Building Area Max Building Contiguous Space Percent Leased Owner Name 300 Channahon Rd I-0 Corridor Joliet IL 01 1,0,10 1,0,10 0% AEW Capital Management 103 E Laraway Rd I-0 Corridor Joliet IL 017 1,0,000 1,0,000 0% Core5 Industrial Partners 100 E Millsdale Rd I-0 Corridor Joliet IL 017 99,0 99,0 0% Hillwood 300 Graaskamp Blvd I-0 Corridor Wilmington IL 01 10,000 10,000 0% Ridge Property Trust 1101 W Airport Rd I-55 Corridor Romeoville IL 01 77,99 77,99 0% DCT Industrial Trust Inc 1700 Mark Collins Dr South Cook Sauk Village IL 00 77,515 77,515 100% Warehouse Specialists Inc 3700 W Bluff Rd I-0 Corridor Channahon IL 017 79,55 79,55 0% IDI Logistics Bluff Road I-55 Corridor Romeoville IL 01,30,30 0% CT Realty Investors 175 Southcreek Pky I-55 Corridor Romeoville IL 017 7,0 7,0 0% Pizzuti Companies Bluff Road I-55 Corridor Romeoville IL 01 57,50 57,50 0% CT Realty Investors 001 N Division St McHenry County Harvard IL 1997 19,590 19,590 0% Edward Gong 55 Northwest Ave West Cook Northlake IL 015 5,33 5,33 0% Prudential Financial, Inc 333 Gibraltar Dr I-55 Corridor Bolingbrook IL 199 579,900 597,900 100% Exeter Property Group 700 Ellis Rd I-0 Corridor Joliet IL 00 9,5 55,7 100% CBRE Global Investors Ltd 1190 0th Ave Southern WI Pleasant Prairie WI 007 50,033 50,033 100% UBS Real Estate Investments Inc 15 Pinnacle Dr I-55 Corridor Romeoville IL 007 9,9 9,9 0% DCT Industrial Trust Inc 3901 Rock Creek Blvd I-0 Corridor Joliet IL 199,00,00 100% CBRE Global Investors Ltd 1100 Orchard Gtwy I- Corridor North Aurora IL 01 5,153 5,153 0% AEW Capital Management 701 W 7th St West Cook McCook IL 01 31,1 51,79 % Heitman LLC 300 Mitchell Rd I- Corridor North Aurora IL 015 9,75 9,75 7% Liberty Property Trust 10 Falcon Ct I-90 East Corridor Streamwood IL 01 3,7 3,7 0% The Opus Group 50 Southcreek Pky I-55 Corridor Romeoville IL 017 1,50 1,50 0% Pizzuti Companies 1000 Veterans Pky I-55 Corridor Bolingbrook IL 1999 05, 05, 0% Prologis 1101 Copenhagen Ct O'Hare Franklin Park IL 01 00,19 00,19 0% Panattoni Development Company Inc 01 Galvin Dr I-90 West/Elgin Corridor Elgin IL 01 35,37 35,37 0% McShane Development Co 35 E North Ave US- Corridor Carol Stream IL 017 31,00 31,00 0% Dermody Properties Inc 130 S 17th Ct I-55 Corridor Lockport IL 017 371,99 371,99 0% ML Realty Partners LLC 10501 Seymour Ave O'Hare Franklin Park IL 01 37,39 37,39 0% Morgan Stanley & Co Route & Houbolt Rd I-0 Corridor Joliet IL 01 355,199 355,199 0% First Industrial Realty Trust, Inc 515 Ameriplex Dr Northwest Indiana Portage IN 00 57,9 31,9 1% DRA Advisors LLC 001 N Division St McHenry County Harvard IL 1997 335,315 335,315 0% Edward Gong 10701 Seymour Ave O'Hare Franklin Park IL 01 333,9 333,9 0% CenterPoint Properties 00 Remington Blvd I-55 Corridor Bolingbrook IL 01 30,91 30,91 0% McShane Development Co 100 W 13rd St I-55 Corridor Lockport IL 01 30,9 30,9 0% Exeter Property Group LLC 100 W 13rd St I-55 Corridor Lockport IL 01 30,5 30,5 0% Exeter Property Group LLC 999 Dalton Ln I-55 Corridor Bolingbrook IL 017 30,35 30,35 0% Northern Builders 75 31st St Southern WI Somers WI 017 0,3 301,17 50% First Industrial Realty Trust Inc 133 Brewster Creek Blvd I-90 East Corridor Bartlett IL 017 1,03 99,37 53% Exeter Property Group 1700 S Ridgeland Ave I-0 Corridor Tinley Park IL 01 9,10 9,10 0% Hillwood 050 Rock Creek Blvd I-0 Corridor Joliet IL 017 91,7 91,31 1% IDI Logistics 501 Internationale Pky I-55 Corridor Woodridge IL 01 3,3 3,3 0% Prologis 75 Santa Fe Dr I-55 Corridor Hodgkins IL 01,933,933 0% Seefried Properties Inc 5139 W 73rd St South Cook Bedford Park IL 00 70,79 70,79 100% Global Logistic Properties Ltd 1150 W 115th St I-55 Corridor Bolingbrook IL 00 53,090 9,590 1% IDI Logistics 39 Bur Wood Dr Lake County Waukegan IL 017 00,75, 100% Bentall Kennedy 01 th Ave Southern WI Pleasant Prairie WI 01,1 1,5 39% Majestic Realty Co 0 Auto Mall Dr I-90 West/Elgin Corridor Elgin IL 01 57,3 57,3 0% Zilber Property Group 770 Alft Ct I-90 West/Elgin Corridor Elgin IL 015,, 0% Molto Capital LLC 01 Alft Ln I-90 West/Elgin Corridor Elgin IL 01 30,553 3,571 % Northern Builders 301 Howard St North Cook Skokie IL 01 3,91 3,91 0% Hillwood 5 Marquette Dr I-55 Corridor Bolingbrook IL 005,0,0 0% Global Logistic Properties Ltd 1001 Seymour Ave O'Hare Franklin Park IL 01 5,91 5,91 0% CenterPoint Properties 700 N Enterprise St I- Corridor Aurora IL 1990,000,000 100% High Street Realty Company LLC 900 Bilter Rd I- Corridor Aurora IL 009 3,3 1,000 100% Liberty Property Trust 33 S Pulaski Rd South Chicago Chicago IL 015 31,0 09,900 3% PGIM Real Estate 01 Bilter Rd I- Corridor Aurora IL 007 03,09 03,09 0% Liberty Property Trust 00 Wirsing Pky I-39 Corridor DeKalb IL 00 0,30 0,30 0% JPMorgan Chase & Co Trends To Watch Building Features: Due to client demand, primarily within the E-commerce industries, users are requiring higher clear heights and additional parking. Infill Development: Infill development is picking up across the market, predominantly within the O Hare and Chicago submarkets. This is due to increased demand as well as a lack of land sites available. Speculative Development: Of the 9.9 msf under construction, 7% is speculative and predominantly vacant which will have a serious impact on market vacancy once delivered. avisonyoung.com page
For more information, please contact: Kathleen Cavanaugh Research Manager 31.90. kathleen.cavanaugh@avisonyoung.com Greg Rogalla Senior Research Analyst 7.37.070 gregory.rogalla@avisonyoung.com Avison Young Chicago One South Wacker Drive, Ste. 3000 Chicago, Illinois, 00 www.avisonyoung.com avisonyoung.com 01 Avison Young - Chicago, LLC. All rights reserved. E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young.