The CoStar Industrial Report F i r s t Q u a r t e r 2 0 1 6
First Quarter 2016 Chicago Table of Contents Table of Contents................................................................. A Methodology...................................................................... B Terms & Definitions................................................................ C Market Highlights & Overview........................................................ 1 CoStar Markets & Submarkets........................................................ 4 Inventory & Development Analysis..................................................... 5 Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance................................................................. 9 Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis............................................................ 13 Select Top Lease Transactions Sales Activity Analysis.............................................................. 15 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters........................................ 17 Indiana Market Kenosha County Market Lake County Market McHenry County Market North Chicago Market North Cook Market Northwest Market OHare Market South Chicago Market South Suburban Market SW/I-55 Corridor Market West Cook Market West Suburban Market 2016 CoStar Group, Inc. The CoStar Industrial Report A
Chicago First Quarter 2016 Methodology The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing, under construction and under renovation Industrial buildings in each given metropolitan area. All Industrial building types are included, including warehouse, flex / research & development, distribution, manufacturing, industrial showroom, and service buildings, in both single-tenant and multitenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental rates reported in the CoStar Industrial Report are calculated using the quoted rental rate for each property. The quoted rental rate is exclusive of the expense pass through associated with the rent. For information on subscribing to CoStar s other products and services, please contact us at 1-877-7COSTAR, or visit our web site at www.costar.com Copyright 2016 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc. 1331 L ST NW Washington, DC 20005 (800) 204-5960 www.costar.com NASDAQ: CSGP B The CoStar Industrial Report 2016 CoStar Group, Inc.
First Quarter 2016 Chicago Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-ofa-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. : The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different 2016 CoStar Group, Inc. The CoStar Industrial Report C
Chicago First Quarter 2016 tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D The CoStar Industrial Report 2016 CoStar Group, Inc.
Overview First Quarter 2016 Chicago Chicago s Decreases to 7.0% Net Absorption Positive 3,425,531 SF in the Quarter The Chicago Industrial market ended the first quarter 2016 with a vacancy rate of 7.0%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 3,425,531 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 1,951,158 square feet. Rental rates ended the first quarter at $5.69, an increase over the previous quarter. A total of 12 buildings delivered to the market in the quarter totaling 3,294,040 square feet, with 14,036,591 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Chicago Industrial market was positive 3,425,531 square feet in the first quarter 2016. That compares to positive 5,819,675 square feet in the fourth quarter 2015, positive 7,781,209 square feet in the third quarter 2015, and positive 6,127,175 square feet in the second quarter 2015. Tenants moving out of large blocks of space in 2016 include: Saddle Creek Logistics Services moving out of (590,000) square feet at 21051 W. Walter Strawn Dr. in the Joliet Area Industrial submarket, George Menlo Logistics moving out of (252,356) square feet at 4000 Rock Creek Blvd, also in the Joliet Area Industrial submarket, and Ingram Micro moving out of (167,089) square feet at 135-195 E. Elk Trl, the Carol Point Business Center, in the North DuPage Industrial submarket. This last move was the result of a short-term sublease. Tenants moving into large blocks of space in 2016 include: D&W Fine Pack moving into 227,800 square feet at 777 Mark St in the O Hare Industrial submarket, West Liberty Foods moving into 160,000 square feet at 1310 Remington Blvd in the South I-55 Corridor Industrial submarket, and Affordable Office Interiors moving into 154,126 square feet at 501 S Gary Ave in the North DuPage Industrial submarket. The Flex building market recorded net absorption of negative (229,118) square feet in the first quarter 2016, compared to positive 241,627 square feet in the fourth quarter 2015, positive 359,370 in the third quarter 2015, and positive 46,794 in the second quarter 2015. The Warehouse building market recorded net absorption of positive 3,654,649 square feet in the first quarter 2016 compared to positive 5,578,048 square feet in the fourth quarter 2015, positive 7,421,839 in the third quarter 2015, and positive 6,080,381 in the second quarter 2015. The Industrial vacancy rate in the Chicago market area decreased to 7.0% at the end of the first quarter 2016. The vacancy rate was 7.1% at the end of the fourth and third quarters of 2015 and 7.5% at the end of the second quarter 2015. Flex projects reported a vacancy rate of 10.5% at the end of the first quarter 2016, 10.1% at the end of the fourth quarter 2015, 10.5% at the end of the third quarter 2015, and 10.8% at the end of the second quarter 2015. Rates by Building Type 1996-2016 16% Flex Warehouse Total Market 14% 12% Rate 10% 8% 6% 4% 2% 0% 2000 4q 2001 4q 2002 4q 2003 4q 2004 4q 2005 4q 2006 4q 2007 4q 2008 4q 2009 4q 2010 4q 2011 4q 2012 4q 2013 4q 2014 4q 2015 4q 2016 CoStar Group, Inc. The CoStar Industrial Report 1
Chicago First Quarter 2016 Overview Warehouse projects reported a vacancy rate of 6.8% at the end of the first quarter 2016, 6.9% at the end of fourth and third quarters of 2015, and 7.3% at the end of the second quarter 2015. Largest Lease Signings The largest lease signings occurring in 2016 included: the 718,761-square-foot lease signed by Reviva Logistics at Michelin Distribution Center in the South Suburban market; the 507,187- square-foot deal signed by Jacobson Companies at Heartland Corporate Center - Bldg I in the SW/I-55 Corridor market; and the 427,991-square-foot lease signed by GFX Corporation at White Oak Center II in the West Suburban market. Sublease The amount of vacant sublease space in the Chicago market increased to 1,951,158 square feet by the end of the first quarter 2016, from 1,560,235 square feet at the end of the fourth quarter 2015. There was 1,635,871 square feet vacant at the end of the third quarter 2015 and 1,582,376 square feet at the end of the second quarter 2015. Chicago s Flex projects reported vacant sublease space of 99,324 square feet at the end of first quarter 2016, down from the 104,544 square feet reported at the end of the fourth quarter 2015. There were 96,567 square feet of sublease space vacant at the end of the third quarter 2015, and 74,066 square feet at the end of the second quarter 2015. Warehouse projects reported increased vacant sublease space from the fourth quarter 2015 to the first quarter 2016. Sublease vacancy went from 1,455,691 square feet to 1,851,834 square feet during that time. There was 1,539,304 square feet at the end of the third quarter 2015, and 1,508,310 square feet at the end of the second quarter 2015. U.S. Comparison Past 7 Quarters Rate 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Chicago United States 2014 3q Rental Rates The average quoted asking rental rate for available Industrial space was $5.69 per square foot per year at the end of the first quarter 2016 in the Chicago market area. This represented a 2.0% increase in quoted rental rates from the end of the fourth quarter 2015, when rents were reported at $5.58 per square foot. The average quoted rate within the Flex sector was $10.82 per square foot at the end of the first quarter 2016, while Warehouse rates stood at $5.35. At the end of the fourth quarter 2015, Flex rates were $10.83 per square foot, and Warehouse rates were $5.24. Deliveries and Construction During the first quarter 2016, 12 buildings totaling 3,294,040 square feet were completed in the Chicago market area. This compares to 26 buildings totaling 6,503,344 square feet that were completed in the fourth quarter 2015, 11 buildings totaling 4,183,107 square feet completed in the third quarter 2015, and 4,904,188 square feet in 12 buildings completed in the second quarter 2015. There were 14,036,591 square feet of Industrial space under construction at the end of the first quarter 2016. Some of the notable 2016 deliveries include: Saddle Creek Logistics, a 1,114,575-square-foot facility that delivered in first quarter 2016 and is now 100% occupied, and 10 Falcon Ct, a 423,726-square-foot building that delivered in first quarter 2016 and is currently vacant. The largest projects underway at the end of first quarter 2016 were Mars/Wrigley, a 1,388,000-square-foot building with 100% of its space pre-leased, and Majestic Corporate Center- BTS, a 1,300,000-square-foot facility that is currently still available for pre-lease. Inventory Total Industrial inventory in the Chicago market area amounted to 1,169,879,849 square feet in 22,731 buildings as of the end of the first quarter 2016. The Flex sector consisted of 71,868,937 square feet in 2,228 projects. The Warehouse sector consisted of 1,098,010,912 square feet in 20,503 buildings. Within the Industrial market there were 4,015 owner-occupied buildings accounting for 282,295,793 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Chicago industrial sales figures rose during the fourth quarter 2015 in terms of dollar volume compared to the third quarter of 2015. In the fourth quarter, 141 industrial transactions closed with a total volume of $936,833,585. The 141 buildings totaled 16,492,873 square feet and the average price per square foot equated to $56.80 per square foot. That compares to 105 2 The CoStar Industrial Report 2016 CoStar Group, Inc.
Overview First Quarter 2016 Chicago transactions totaling $430,196,224 in the third quarter. The total square footage was 9,978,093 for an average price per square foot of $43.11. Total year-to-date industrial building sales activity in 2015 is down compared to the previous year. In the twelve months of 2015, the market saw 484 industrial sales transactions with a total volume of $2,126,255,974. The price per square foot has averaged $48.65 this year. In the twelve months of 2014, the market posted 474 transactions with a total volume of $2,528,138,208. The price per square foot averaged $48.49. Cap rates have been lower in 2015, averaging 7.75%, compared to the twelve months of last year when they averaged 7.83%. One of the largest transactions that has occurred within the last four quarters in the Chicago market is the sale of White Oak Center II in Aurora. This 428,000-square-foot industrial building sold on 3/31/2016 for $130,000,000, or $303.74 per square foot. This transaction was the result of a sale leaseback with GFX Corporation executing a 15-year lease with CyrusOne. Absorption & Deliveries Past 7 Quarters 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 4.4 1.4 6.4 Net Absorption 5.3 0.6 Reports compiled by: Charlotte Cloutier & Warren Zentz, CoStar Group Research Managers. 1.9 6.1 4.9 7.8 4.2 Deliveries 5.8 6.5 3.4 3.3 2014 3q 2016 CoStar Group, Inc. The CoStar Industrial Report 3
Chicago First Quarter 2016 Markets CoStar Submarket Clusters & Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters Indiana Ind Kenosha County Ind Lake County Ind McHenry County Ind North Chicago Ind North Cook Ind Northwest Ind OHare Ind South Chicago Ind South Suburban Ind SW/I-55 Corridor Ind West Cook Ind West Suburban Ind Submarkets Indiana Ind Porter County Ind Kenosha East Ind Kenosha West Ind North Lake County Ind South Lake County Ind McHenry County Ind North Chicago Ind North Cook Ind North Kane/I-90 Ind Northwest Cook Ind OHare Ind South Chicago Ind Central Will Ind Far South Cook Ind Near South Cook Ind Joliet Area Ind Near SW Suburbs Ind North I-55 Corridor Ind South I-55 Corridor Ind West Cook North Ind West Cook South Ind Central Kane / DuPage Ind I-88 West Ind North DuPage Ind West Suburbs Ind 4 The CoStar Industrial Report 2016 CoStar Group, Inc.
Inventory & development First Quarter 2016 Chicago Historical Deliveries 1982-2016 30.0 Deliveries Average Delivered SF Millions of SF 25.0 20.0 15.0 10.0 9.0 8.6 7.8 14.5 12.3 15.2 19.0 20.1 23.3 11.4 11.5 8.7 9.8 15.3 15.9 24.323.0 22.4 24.1 13.413.6 14.1 16.8 17.4 21.6 17.8 20.6 7.6 17.5 14.6 10.2 7.0 5.0 2.5 3.5 2.3 0.0 1982 1986 1990 1994 1998 2002 2006 2010 2014 * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction RBA Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C SW/I-55 Corridor Ind 14 5,242,039 1,939,224 37.0% 76,463 374,431 West Suburban Ind 11 3,965,874 2,549,141 64.3% 52,327 360,534 Kenosha County Ind 2 1,901,491 0 0.0% 78,551 950,745 Lake County Ind 3 687,013 60,165 8.8% 49,666 229,004 North Chicago Ind 2 686,000 148,080 21.6% 33,260 343,000 OHare Ind 2 651,862 651,862 100.0% 45,874 325,931 West Cook Ind 2 550,312 0 0.0% 48,341 275,156 Northwest Ind 2 292,000 133,000 45.5% 45,513 146,000 Indiana Ind 2 60,000 20,000 33.3% 43,635 30,000 North Cook Ind 0 0 0 0.0% 45,000 0 All Other 0 0 0 0.0% 53,771 0 Totals 40 14,036,591 5,501,472 39.2% 51,466 350,915 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2012 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 20.0 Leased Un-Leased 6,000 Preleased Un-Leased 18.0 16.0 5,000 Millions of SF 14.0 12.0 10.0 8.0 6.0 Thousands of SF 4,000 3,000 2,000 4.0 2.0 1,000 0.0 2012 2014 2016 0 2016 2q 2016 4q 2016 CoStar Group, Inc. The CoStar Industrial Report 5
Chicago First Quarter 2016 Inventory & development Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 9.0 Construction Starts Deliveries 8.0 7.8 7.0 6.5 6.5 Millions of SF 6.0 5.0 4.0 3.0 2.0 1.0 1.5 0.9 1.9 1.6 3.2 2.2 2.2 2.2 4.8 1.8 1.8 1.2 1.4 3.0 5.3 0.7 1.9 4.1 4.9 5.8 4.2 4.4 3.3 0.0 2013 1q 2014 1q 2015 1q 2016 1q Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF 1 19,000 19,000 100.0% $0.00 19,000 0 50,000 SF - 99,999 SF 2 171,922 171,922 100.0% $9.25 89,000 82,922 100,000 SF - 249,999 SF 5 991,657 379,281 38.2% $7.10 0 991,657 250,000 SF - 499,999 SF 3 996,886 299,520 30.0% $0.00 723,246 273,640 >= 500,000 SF 1 1,114,575 1,114,575 100.0% $0.00 0 1,114,575 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2016 Deliveries Currently Under Construction By Building Type By Tenancy Type 25% 29% 6% 52% 48% 75% 71% 94% Multi Single Multi Single Flex Warehouse Multi Single 6 The CoStar Industrial Report 2016 CoStar Group, Inc.
Inventory & development First Quarter 2016 Chicago 2016 CoStar Group, Inc. The CoStar Industrial Report 7
Chicago First Quarter 2016 Inventory & development 8 The CoStar Industrial Report 2016 CoStar Group, Inc.
Figures at a Glance First Quarter 2016 Chicago Flex Market Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Indiana Ind 187 3,352,961 143,547 143,547 4.3% 7,900 0 0 $8.02 Kenosha County Ind 25 907,930 69,402 83,402 9.2% (6,204) 0 0 $10.12 Lake County Ind 201 6,963,993 721,536 721,536 10.4% 20,635 0 0 $9.37 McHenry County Ind 75 2,241,890 92,044 92,044 4.1% 15,263 0 0 $7.28 North Chicago Ind 184 5,640,316 661,304 661,304 11.7% (56,955) 0 0 $15.91 North Cook Ind 199 6,386,038 694,123 715,602 11.2% (40,915) 0 0 $11.10 Northwest Ind 271 11,480,936 1,788,662 1,818,393 15.8% (27,690) 0 133,000 $9.74 OHare Ind 173 7,207,525 574,223 583,887 8.1% 76,988 0 0 $8.99 South Chicago Ind 109 5,192,068 791,379 791,379 15.2% (219,404) 0 0 $14.81 South Suburban Ind 129 2,377,358 275,511 275,511 11.6% 39,135 0 0 $9.33 SW/I-55 Corridor Ind 196 5,493,864 370,159 387,409 7.1% (3,177) 0 0 $14.67 West Cook Ind 108 2,865,256 80,644 80,644 2.8% 3,150 0 0 $10.88 West Suburban Ind 371 11,758,802 1,158,656 1,165,856 9.9% (37,844) 0 0 $10.31 Totals 2,228 71,868,937 7,421,190 7,520,514 10.5% (229,118) 0 133,000 $10.82 Warehouse Market Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Indiana Ind 994 48,180,066 2,741,503 2,745,503 5.7% 28,789 159,813 60,000 $4.24 Kenosha County Ind 355 28,941,300 1,991,514 2,036,770 7.0% (6,315) 0 1,901,491 $4.33 Lake County Ind 1,442 74,636,984 6,025,312 6,129,820 8.2% 278,935 19,000 687,013 $5.47 McHenry County Ind 782 29,824,026 3,031,223 3,136,298 10.5% 201,690 0 0 $4.55 North Chicago Ind 2,110 70,658,684 5,677,374 5,824,964 8.2% (120,534) 0 686,000 $7.23 North Cook Ind 961 45,813,572 2,539,192 2,729,795 6.0% (236,782) 217,064 0 $6.69 Northwest Ind 1,295 59,791,761 5,187,821 5,349,003 8.9% (78,680) 506,648 159,000 $6.13 OHare Ind 2,127 98,302,927 4,187,680 4,510,244 4.6% 969,665 0 651,862 $6.15 South Chicago Ind 1,660 109,115,932 8,688,176 8,899,267 8.2% 428,236 0 0 $5.09 South Suburban Ind 1,381 73,643,945 4,985,409 4,992,609 6.8% 98,590 0 0 $4.76 SW/I-55 Corridor Ind 2,433 195,526,755 14,119,356 14,412,578 7.4% 1,460,631 2,002,995 5,242,039 $5.13 West Cook Ind 1,539 76,753,147 5,286,499 5,340,980 7.0% 188,944 0 550,312 $5.05 West Suburban Ind 3,424 186,821,813 8,487,906 8,692,968 4.7% 441,480 388,520 3,965,874 $5.02 Totals 20,503 1,098,010,912 72,948,965 74,800,799 6.8% 3,654,649 3,294,040 13,903,591 $5.35 Total Industrial Market Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Indiana Ind 1,181 51,533,027 2,885,050 2,889,050 5.6% 36,689 159,813 60,000 $4.43 Kenosha County Ind 380 29,849,230 2,060,916 2,120,172 7.1% (12,519) 0 1,901,491 $4.42 Lake County Ind 1,643 81,600,977 6,746,848 6,851,356 8.4% 299,570 19,000 687,013 $5.79 McHenry County Ind 857 32,065,916 3,123,267 3,228,342 10.1% 216,953 0 0 $4.61 North Chicago Ind 2,294 76,299,000 6,338,678 6,486,268 8.5% (177,489) 0 686,000 $7.99 North Cook Ind 1,160 52,199,610 3,233,315 3,445,397 6.6% (277,697) 217,064 0 $7.19 Northwest Ind 1,566 71,272,697 6,976,483 7,167,396 10.1% (106,370) 506,648 292,000 $6.88 OHare Ind 2,300 105,510,452 4,761,903 5,094,131 4.8% 1,046,653 0 651,862 $6.36 South Chicago Ind 1,769 114,308,000 9,479,555 9,690,646 8.5% 208,832 0 0 $5.44 South Suburban Ind 1,510 76,021,303 5,260,920 5,268,120 6.9% 137,725 0 0 $4.93 SW/I-55 Corridor Ind 2,629 201,020,619 14,489,515 14,799,987 7.4% 1,457,454 2,002,995 5,242,039 $5.38 West Cook Ind 1,647 79,618,403 5,367,143 5,421,624 6.8% 192,094 0 550,312 $5.07 West Suburban Ind 3,795 198,580,615 9,646,562 9,858,824 5.0% 403,636 388,520 3,965,874 $5.38 Totals 22,731 1,169,879,849 80,370,155 82,321,313 7.0% 3,425,531 3,294,040 14,036,591 $5.69 2016 CoStar Group, Inc. The CoStar Industrial Report 9
Chicago First Quarter 2016 Figures at a Glance Flex Submarket Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Kane / DuPage Ind 82 2,193,864 244,328 244,328 11.1% (35,395) 0 0 $8.55 Central Will Ind 9 116,672 4,800 4,800 4.1% 0 0 0 $8.97 Far South Cook Ind 12 265,222 28,028 28,028 10.6% 0 0 0 $10.68 I-88 West Ind 120 3,855,617 258,197 265,397 6.9% 16,451 0 0 $10.78 Indiana Ind 149 2,747,157 123,724 123,724 4.5% 7,900 0 0 $6.71 Joliet Area Ind 61 1,454,969 116,276 116,276 8.0% (23,757) 0 0 $12.01 Kenosha East Ind 21 881,113 66,206 80,206 9.1% (3,008) 0 0 $10.12 Kenosha West Ind 4 26,817 3,196 3,196 11.9% (3,196) 0 0 $0.00 McHenry County Ind 75 2,241,890 92,044 92,044 4.1% 15,263 0 0 $7.28 Near South Cook Ind 108 1,995,464 242,683 242,683 12.2% 39,135 0 0 $9.23 Near SW Suburbs Ind 19 321,536 1,650 1,650 0.5% 0 0 0 $10.02 North Chicago Ind 184 5,640,316 661,304 661,304 11.7% (56,955) 0 0 $15.91 North Cook Ind 199 6,386,038 694,123 715,602 11.2% (40,915) 0 0 $11.10 North DuPage Ind 43 998,523 98,257 98,257 9.8% (262) 0 0 $9.12 North I-55 Corridor Ind 28 472,546 23,794 23,794 5.0% (4,000) 0 0 $9.65 North Kane/I-90 Ind 48 3,298,507 216,770 216,770 6.6% (28,280) 0 133,000 $9.35 North Lake County Ind 55 1,859,313 146,754 146,754 7.9% (9,676) 0 0 $7.91 Northwest Cook Ind 223 8,182,429 1,571,892 1,601,623 19.6% 590 0 0 $9.80 OHare Ind 173 7,207,525 574,223 583,887 8.1% 76,988 0 0 $8.99 Porter County Ind 38 605,804 19,823 19,823 3.3% 0 0 0 $9.92 South Chicago Ind 109 5,192,068 791,379 791,379 15.2% (219,404) 0 0 $14.81 South I-55 Corridor Ind 88 3,244,813 228,439 245,689 7.6% 24,580 0 0 $16.29 South Lake County Ind 146 5,104,680 574,782 574,782 11.3% 30,311 0 0 $9.47 West Cook North Ind 79 2,393,259 69,103 69,103 2.9% (4,100) 0 0 $5.45 West Cook South Ind 29 471,997 11,541 11,541 2.4% 7,250 0 0 $14.07 West Suburbs Ind 126 4,710,798 557,874 557,874 11.8% (18,638) 0 0 $11.06 Totals 2,228 71,868,937 7,421,190 7,520,514 10.5% (229,118) 0 133,000 $10.82 Warehouse Submarket Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Kane / DuPage Ind 852 49,942,494 2,401,026 2,401,026 4.8% 377,042 299,520 1,619,274 $4.27 Central Will Ind 72 4,041,417 993,131 993,131 24.6% 26,900 0 0 $3.81 Far South Cook Ind 312 25,350,935 1,422,921 1,422,921 5.6% 10,783 0 0 $3.83 I-88 West Ind 1,095 63,163,159 2,805,416 2,811,266 4.5% 90,664 0 1,794,848 $4.82 Indiana Ind 732 34,923,034 1,992,213 1,996,213 5.7% 35,989 159,813 60,000 $4.24 Joliet Area Ind 912 61,132,690 5,455,584 5,477,584 9.0% 711,706 1,616,905 4,004,262 $4.64 Kenosha East Ind 335 28,324,385 1,988,514 2,033,770 7.2% (3,315) 0 1,901,491 $4.33 Kenosha West Ind 20 616,915 3,000 3,000 0.5% (3,000) 0 0 $0.00 McHenry County Ind 782 29,824,026 3,031,223 3,136,298 10.5% 201,690 0 0 $4.55 Near South Cook Ind 997 44,251,593 2,569,357 2,576,557 5.8% 60,907 0 0 $5.65 Near SW Suburbs Ind 307 23,507,969 1,111,577 1,111,577 4.7% (46,772) 0 0 $4.90 North Chicago Ind 2,110 70,658,684 5,677,374 5,824,964 8.2% (120,534) 0 686,000 $7.23 North Cook Ind 961 45,813,572 2,539,192 2,729,795 6.0% (236,782) 217,064 0 $6.69 North DuPage Ind 520 39,216,030 1,796,118 1,963,207 5.0% (21,958) 89,000 536,680 $5.24 North I-55 Corridor Ind 485 29,813,770 2,444,732 2,444,732 8.2% (17,170) 0 0 $5.74 North Kane/I-90 Ind 597 31,264,662 2,726,591 2,881,611 9.2% (220,173) 82,922 159,000 $5.66 North Lake County Ind 642 36,881,127 3,700,685 3,759,575 10.2% 66,845 0 626,848 $4.94 Northwest Cook Ind 698 28,527,099 2,461,230 2,467,392 8.6% 141,493 423,726 0 $6.51 OHare Ind 2,127 98,302,927 4,187,680 4,510,244 4.6% 969,665 0 651,862 $6.15 Porter County Ind 262 13,257,032 749,290 749,290 5.7% (7,200) 0 0 $4.25 South Chicago Ind 1,660 109,115,932 8,688,176 8,899,267 8.2% 428,236 0 0 $5.09 South I-55 Corridor Ind 729 81,072,326 5,107,463 5,378,685 6.6% 812,867 386,090 1,237,777 $5.22 South Lake County Ind 800 37,755,857 2,324,627 2,370,245 6.3% 212,090 19,000 60,165 $6.05 West Cook North Ind 1,134 58,773,405 4,065,532 4,120,013 7.0% 44,907 0 550,312 $5.02 West Cook South Ind 405 17,979,742 1,220,967 1,220,967 6.8% 144,037 0 0 $5.15 West Suburbs Ind 957 34,500,130 1,485,346 1,517,469 4.4% (4,268) 0 15,072 $6.16 Totals 20,503 1,098,010,912 72,948,965 74,800,799 6.8% 3,654,649 3,294,040 13,903,591 $5.35 10 The CoStar Industrial Report 2016 CoStar Group, Inc.
Figures at a Glance First Quarter 2016 Chicago Total Industrial Submarket Statistics First Quarter 2016 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Kane / DuPage Ind 934 52,136,358 2,645,354 2,645,354 5.1% 341,647 299,520 1,619,274 $4.50 Central Will Ind 81 4,158,089 997,931 997,931 24.0% 26,900 0 0 $3.87 Far South Cook Ind 324 25,616,157 1,450,949 1,450,949 5.7% 10,783 0 0 $3.91 I-88 West Ind 1,215 67,018,776 3,063,613 3,076,663 4.6% 107,115 0 1,794,848 $5.15 Indiana Ind 881 37,670,191 2,115,937 2,119,937 5.6% 43,889 159,813 60,000 $4.33 Joliet Area Ind 973 62,587,659 5,571,860 5,593,860 8.9% 687,949 1,616,905 4,004,262 $4.83 Kenosha East Ind 356 29,205,498 2,054,720 2,113,976 7.2% (6,323) 0 1,901,491 $4.42 Kenosha West Ind 24 643,732 6,196 6,196 1.0% (6,196) 0 0 $0.00 McHenry County Ind 857 32,065,916 3,123,267 3,228,342 10.1% 216,953 0 0 $4.61 Near South Cook Ind 1,105 46,247,057 2,812,040 2,819,240 6.1% 100,042 0 0 $5.85 Near SW Suburbs Ind 326 23,829,505 1,113,227 1,113,227 4.7% (46,772) 0 0 $4.93 North Chicago Ind 2,294 76,299,000 6,338,678 6,486,268 8.5% (177,489) 0 686,000 $7.99 North Cook Ind 1,160 52,199,610 3,233,315 3,445,397 6.6% (277,697) 217,064 0 $7.19 North DuPage Ind 563 40,214,553 1,894,375 2,061,464 5.1% (22,220) 89,000 536,680 $5.32 North I-55 Corridor Ind 513 30,286,316 2,468,526 2,468,526 8.2% (21,170) 0 0 $5.76 North Kane/I-90 Ind 645 34,563,169 2,943,361 3,098,381 9.0% (248,453) 82,922 292,000 $5.93 North Lake County Ind 697 38,740,440 3,847,439 3,906,329 10.1% 57,169 0 626,848 $4.97 Northwest Cook Ind 921 36,709,528 4,033,122 4,069,015 11.1% 142,083 423,726 0 $7.46 OHare Ind 2,300 105,510,452 4,761,903 5,094,131 4.8% 1,046,653 0 651,862 $6.36 Porter County Ind 300 13,862,836 769,113 769,113 5.5% (7,200) 0 0 $4.88 South Chicago Ind 1,769 114,308,000 9,479,555 9,690,646 8.5% 208,832 0 0 $5.44 South I-55 Corridor Ind 817 84,317,139 5,335,902 5,624,374 6.7% 837,447 386,090 1,237,777 $5.67 South Lake County Ind 946 42,860,537 2,899,409 2,945,027 6.9% 242,401 19,000 60,165 $6.55 West Cook North Ind 1,213 61,166,664 4,134,635 4,189,116 6.8% 40,807 0 550,312 $5.02 West Cook South Ind 434 18,451,739 1,232,508 1,232,508 6.7% 151,287 0 0 $5.26 West Suburbs Ind 1,083 39,210,928 2,043,220 2,075,343 5.3% (22,906) 0 15,072 $7.02 Totals 22,731 1,169,879,849 80,370,155 82,321,313 7.0% 3,425,531 3,294,040 14,036,591 $5.69 2016 CoStar Group, Inc. The CoStar Industrial Report 11
Chicago First Quarter 2016 Figures at a Glance 12 The CoStar Industrial Report 2016 CoStar Group, Inc.
Leasing Activity First Quarter 2016 Chicago Historical Rental Rates Based on Quoted Rental Rates $12.00 Flex Warehouse Total Market $10.00 Dollars/SF/Year $8.00 $6.00 $4.00 $2.00 $0.00 2000 4q 2002 4q 2004 4q 2006 4q 2008 4q 2010 4q 2012 4q 2014 4q by Available Space Type by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Chicago United States Chicago United States 2% 3% 9% 14% 91% 86% 98% 97% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Quoted Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $5.90 $5.80 Chicago United States 14.0 12.0 11.6 Dollars/SF/Year $5.70 $5.60 $5.50 $5.40 $5.30 $5.20 Millions 10.0 8.0 6.0 4.0 4.5 $5.10 $5.00 $4.90 2014 3q 2.0 0.0 2.2 1.6 0.0 0.0 2016 2q 2016 4q 2017 2q * Includes Under Construction Space 2016 CoStar Group, Inc. The CoStar Industrial Report 13
Chicago First Quarter 2016 Leasing Activity Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2016 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 Michelin Distribution Center Central Will Ind 718,761 1st Reviva Logistics N/A CBRE 2 Heartland Corporate Center - Bldg I* Joliet Area Ind 507,187 1st Jacobson Companies Direct Deal Colliers International 3 White Oak Center II I-88 West Ind 427,991 1st GFX Corporation N/A N/A 4 Bolingbrook Corp. Ctr West - Bldg III South I-55 Corridor Ind 382,228 1st N/A N/A NAI Himan 5 21399 Torrence Ave Far South Cook Ind 372,835 1st Nufarm NAI Himan STAG Industrial Mgmt LLC 6 Heritage Crossing Corp. Ctr - Bldg 7 Joliet Area Ind 363,224 1st LG Electronics Cushman & Wakeeld of NJ NAI Himan 7 Bolingbrook Point Corporate Ctr South I-55 Corridor Ind 317,076 1st Fresh Thyme Farmer s Market N/A CBRE 8 Fujilm Graphic Systems Division HQ* North DuPage Ind 312,251 1st Fujilm U.S.A., Inc. N/A N/A 9 9801 80th Ave Kenosha East Ind 277,454 1st Kem Krest, LLC The Barry Company JLL 10 7557 S 78th Ave* North I-55 Corridor Ind 254,443 1st HOBO Oak Creek Distribution Direct Deal NAI Himan 11 1 Innovation Dr* O Hare Ind 245,610 1st IMS/AMCO Engineered Products N/A N/A 12 Windgate Distribution Center South I-55 Corridor Ind 230,081 1st Bosch Automotive Cushman & Wakeeld N/A 13 777 Mark St O Hare Ind 227,800 1st D&W Fine Pack JLL JLL 14 5650 Centerpoint Ct North Lake County Ind 213,141 1st HandiFoil Corporation Avison Young CBRE 15 Rock Run Inventory Facility V* Joliet Area Ind 192,390 1st Unisource Worldwide, Inc. N/A Cushman & Wakeeld 16 Rock Run Bldg IX Joliet Area Ind 191,260 1st Ecolab, Inc. Korman, Lederer & Associates IDI Gazeley; CBRE 17 45 Albrecht Dr South Lake County Ind 191,000 1st Homewerks Worldwide LLC Colliers International Avison Young 18 Highland Corporate Center - Building 2 South I-55 Corridor Ind 164,355 1st Menasha Packaging Company, LLC Avison Young Cushman & Wakeeld 19 Buttereld Distribution Center II I-88 West Ind 160,047 1st Cherryman Furniture N/A CBRE 20 451 Trumpet Dr* North Lake County Ind 150,192 1st Focus Foodservice LLC Avison Young Colliers International 21 Bensenville Business Center O Hare Ind 134,514 1st Zurn Industries, Llc N/A CBRE 22 EGIP #11 O Hare Ind 128,724 1st N/A N/A Prologis; CBRE 23 EGIP #15 O Hare Ind 126,722 1st Batavia Container Cushman & Wakeeld Darwin Realty & Dev. Corp. 24 Calumet Business Center - Building 7 South Chicago Ind 121,439 1st MWD Logistics, Inc. Direct Deal NAI Himan 25 Batavia Ind Center II - Bldg A Central Kane / DuPage Ind 107,800 1st PDS Transportation Transwestern Transwestern 26 Addison Business Park 1 West Suburbs Ind 99,086 1st Conpac Group, Inc Colliers International Cushman & Wakeeld 27 205 Lies Rd North DuPage Ind 98,971 1st Assa Abloy LLC N/A Colliers International 28 Green Oaks Business Ctr - Phase 2 South Lake County Ind 87,649 1st Fidelitone Order Fulllment Newmark Grubb Knight Frank CBRE 29 1250 N Mittel Blvd O Hare Ind 82,114 1st N/A Cushman & Wakeeld Lee & Associates of IL, LLC 30 2200 S Mount Prospect Rd O Hare Ind 73,286 1st Cycle Logistics Darwin Realty & Dev. Corp. Darwin Realty & Dev. Corp. 31 Briarwood Business Center - Building B* Northwest Cook Ind 72,200 1st Fromm International Inc. N/A Colliers International 32 2021 Lunt Ave* O Hare Ind 64,157 1st Mueller Streamline Company N/A N/A 33 201 E 171st St* Near South Cook Ind 61,496 1st KW Container Direct Deal Lee & Associates of IL, LLC 34 Calumet Business Center - Building 5 South Chicago Ind 59,520 1st Grand Warehouse Logistics Corp. Direct Deal NAI Himan 35 1850 Greenleaf Ave O Hare Ind 58,627 1st N/A Darwin Realty & Dev. Corp. Colliers International 36 1360 Madeline Dr* North Kane/I-90 Ind 57,695 1st Time Denite Services Inc. Direct Deal NAI Himan 37 Glendale Commerce Center North DuPage Ind 56,850 1st Animal Supply Co. N/A Colliers International 38 3145 Central Ave North Lake County Ind 56,000 1st SRS Distribution Mohr Partners International Lee & Associates of IL, LLC 39 794 Golf Ln O Hare Ind 55,343 1st Transportation Warehousing Enterprises, Inc. N/A Colliers International 40 5025 W 73rd St Near SW Suburbs Ind 55,240 1st N/A Colliers International Cushman & Wakeeld * Renewal 14 The CoStar Industrial Report 2016 CoStar Group, Inc.
Sales Activity First Quarter 2016 Chicago The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 7.0% Cap Rate Price/SF $430 6.0% $380 Cap Rate Percentage 5.0% 4.0% 3.0% 2.0% $330 $280 $230 $180 Dollars/SF 1.0% $130 0.0% 2013 1q 2014 1q 2015 1q $80 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From Jan. 2015 - Dec. 2015 $1,000 Sales Volume Price/SF $60 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $900 $800 $700 $600 $500 $400 $300 $200 $50 $40 $30 $20 $10 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 287 3,965,635 $307,994,889 $ 77.67 8.44% 257 13,132,930 $630,335,107 $ 48.00 8.52% 76 11,040,540 $475,472,536 $ 43.07 7.87% $100 $0 2012 1q 2013 1q 2014 1q 2015 1q $0 >250K SF 35 17,255,679 $887,862,389 $ 51.45 6.34% Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Industrial Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Industrial Building Sales of 15,000 SF and Larger $80 Chicago US 9.0% Chicago US $70 8.0% $60 $50 $40 Cap Rate Percentage 7.0% 6.0% 5.0% $30 4.0% $20 3.0% 2012 1q 2013 1q 2014 1q 2015 1q 2012 1q 2013 1q 2014 1q 2015 1q Source: CoStar COMPS Source: CoStar COMPS 2016 CoStar Group, Inc. The CoStar Industrial Report 15
16 The CoStar Industrial Report 2016 CoStar Group, Inc. Chicago First Quarter 2016 Sales Activity
Deliveries, Absorption & I n d i a n a M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse First Quarter 2016 Chicago 0.800 Delivered SF Absorption SF 12.0% 0.600 0.400 0.200 0.000 (0.200) (0.400) (0.600) (0.800) 2013 1q 2013 2q 2013 3q 2013 4q 2014 1q 2014 2q 2014 3q 2014 4q 2015 1q 2015 2q 2015 3q 2015 4q 2016 1q 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Percent Vacant Vacant Space Quoted Rental Rates 4.00 Direct SF Sublet SF $4.60 3.50 $4.55 3.00 2.50 2.00 1.50 Dollars/SF/Year $4.50 $4.45 $4.40 $4.35 1.00 $4.30 0.50 $4.25 0.00 $4.20 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2016 1q 1,181 51,533,027 2,889,050 5.6% 36,689 1 159,813 2 60,000 $4.43 2015 4q 1,180 51,373,214 2,765,926 5.4% 698,688 2 309,100 3 219,813 $4.41 2015 3q 1,178 51,064,114 3,155,514 6.2% 232,224 0 0 4 488,913 $4.55 2015 2q 1,178 51,064,114 3,387,738 6.6% (6,481) 0 0 2 309,100 $4.48 2015 1q 1,178 51,064,114 3,381,257 6.6% (19,069) 0 0 2 309,100 $4.32 2014 4q 1,179 51,124,114 3,422,188 6.7% 500,449 0 0 2 309,100 $4.17 2014 3q 1,179 51,124,114 3,922,637 7.7% 380,902 0 0 1 300,000 $4.22 2014 2q 1,180 51,150,114 4,329,539 8.5% 237,977 2 74,414 0 0 $4.10 2014 1q 1,179 51,087,969 4,505,371 8.8% 143,875 0 0 2 74,414 $4.06 2013 4q 1,180 51,095,269 4,656,546 9.1% 288,111 2 90,866 2 74,414 $4.09 2013 3q 1,178 51,004,403 4,853,791 9.5% 301,858 1 100,000 3 141,154 $4.08 2013 2q 1,178 50,909,203 5,060,449 9.9% 181,346 0 0 3 190,866 $3.86 2013 1q 1,179 51,088,203 5,420,795 10.6% (538,612) 0 0 2 181,866 $3.75 2012 4q 1,179 51,088,203 4,882,183 9.6% (6,748) 0 0 1 100,000 $3.73 2012 3q 1,179 51,088,203 4,875,435 9.5% (7,505) 0 0 0 0 $3.80 2012 2q 1,179 51,088,203 4,867,930 9.5% 23,874 1 12,000 0 0 $3.77 2016 CoStar Group, Inc. The CoStar Industrial Report 17