INLAND EMPIRE Industrial Market Report 2021

Q1 LEE & ASSOCIATES - ONTARIO

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3535 INLAND EMPIRE BOULEVARD ONTARIO, CALIFORNIA 91764 CORPORATE ID #00976995 909-989-7771 Q1 MARKET REVIEW 1 INLAND EMPIRE INDUSTRIAL MARKET TO HIGH DESERT AREA The Inland Empire Industrial Market started 2021 with its 35th straight quarter of positive net absorption and an impressive 13.37% spike from 1st quarter 2020 in effective lease rates in buildings over 100,000 square feet. The Inland Empire is the center of warehouse and distribution demand for all of the Southern California region. The market continues to become more competitive with high demands from SAN BERNARDINO

e-commerce and third-party logistics companies absorbing all distribution and RANCHO CUCAMONGA warehousing requirements, making the Inland Empire a vital logistics hub for the RIALTO HIGHLAND nation. Leasing activity has grown immensely through the pandemic with gross COLTON MENTONE ONTARIO FONTANA absorption standing at over ±19.2 million square feet, on pace with 1st quarter 2020 LOMA REDLANDS LINDA of ±21.9 million square feet. With the economy beginning to recover, construction CHINO JURUPA YUCAIPA EASTVALE VALLEY GRAND TERRACE activity has picked up the pace with over ±4.2 million square feet of class “A” BEAUMONT BANNING industrial product completed and another ±20.8 million square feet are currently NORCO RIVERSIDE MORENO under construction. Net absorption for the quarter stood at ±6.8 million square feet, VALLEY ahead of 1st quarter 2020 of ±6.7 million square feet. CORONA TO COACHELLA VALLEY Gross activity remained consistent with 1st quarter 2020, standing at ±19.2 million AREA square feet transacted. Some notable Inland Empire lease deals include: Walmart

with ±757,976 square feet at 13550 Valley Boulevard in Fontana; LG Electronics with TO I-15 SOUTH AREA ±745,394 square feet at Sierra Pacific Center in Fontana; Amazon with ±517,903 square feet at Space Center - Building 2 in Jurupa Valley; Bloomsung with ±453,020 Inland Empire West square feet at Goodman Logistics Center Fontana – Building 4 in Fontana; 4PX Worldwide Express with ±441,970 square feet at 8369 Milliken Avenue in Rancho Inland Empire East Cucamonga. These five deals total over ±2.9 million square feet of activity in the 1st quarter 2021.

The Inland Empire industrial market continues with limited supply and vacancy levels at 1.29%, a historic low for the market. The overall availability rate in the Inland Empire remained consistent and competitive at 5.67%.

MARKET SNAPSHOT 616,915,623 SF 34,997,177 SF 7,934,986 SF 6,790,921 SF 19,212,144 SF $0.924 NNN 4,218,296 SF BASE (5.67%) (1.29%) 2021 YTD 2021 YTD ASKING LEASE 2021 YTD INVENTORY AVAILABLE VACANT NET ABSORPTION* GROSS ACTIVITY** RATES CONSTRUCTION COMPLETED

*Net absorption can be calculated as the increase/decrease in vacant space in addition to Construction Completions INLAND EMPIRE WEST SUBMARKET **Gross activity includes new and renewal leases, subleases, and both user and investment sales The Inland Empire West’s (IEW) availability became more competitive from the previous quarter’s 5.68% to 4.73% this quarter. Vacancy levels continue to drop from last quarter’s 0.96% to 0.69% due to continue demand from e-commerce and limited supply. This elevated activity has not only fueled leasing demand in large warehouses and CONSTRUCTION COMPLETIONS – BY YEAR distribution facilities but also driven actual lease rates in properties under 100,000 square feet now standing at $0.903 MG, an increase of 4.4% from 4th quarter 2020. IEW 20,000,000 started the year with positive net absorption standing at ±3.4 million square feet. With a strong amount of activity, the IEW led the way with gross activity this quarter at over 18,000,000 ±11.9 million square feet from several notable deals from tenants such as: Walmart, LG 16,000,000 Electronics, Amazon, Bloomsung and 4PX Worldwide Express. The West submarket had ±2,612,963 square feet of class “A” completed construction this quarter. Another 65 14,000,000 buildings totaling ±8,534,952 square feet are currently under construction. 12,000,000

10,000,000 INLAND EMPIRE EAST SUBMARKET The Inland Empire East’s (IEE) availability remained consistent to the previous quarter 8,000,000 6.40% to 6.77% this quarter. Vacancy levels dropped from last quarter’s 2.62% to 6,000,000 1.98%, a historic low for the submarket, an astonishing activity considering vacancy levels in the East submarket have historically been significantly higher than the West 4,000,000 submarket. Asking lease rates continue the growing trend by 18.78% to $0.898 NNN, 2,000,000 compared to 4th quarter 2020 at $0.756 NNN. The IEE started the year with a competitive ±3.3 million square feet of net absorption this quarter. The East submarket 0 had a healthy amount of gross activity this quarter at over ±7.2 million square feet from several notable deals from tenants such as: Kenco Logistics, Nautilus, All-Ways Pacific, YTD -

2016 2017 2018 2019 2020 Amtex Supply Holdings and US Display Corporation. With record low vacancies in the Inland Empire, developers continue to expand construction to the IEE with 1,605,333

IEW IEE 2021 square feet completed construction this quarter. Another 75 buildings totaling 12,335,893 square feet are currently under construction.

Inland Empire Industrial Market Report Q1 GRAPH REVIEW 2

IE WEST AVAILABILITY & VACANCY IE EAST AVAILABILITY & VACANCY 7.0% 2.3% 13.0% 6.0% 5.5% 2.1% 12.0% 6.5% 1.9% 5.0% 11.0% 1.7% 4.5% 6.0% 1.5% 10.0% 4.0%

1.3% 9.0% 3.5% 5.5% 1.1% 3.0% 8.0% 5.0% 0.9% 2.5% 7.0% 0.7% 2.0%

4.5% 0.5% 6.0% 1.5% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 Availability Rate Vacancy Rate Avail: 4.73% Availability Rate Vacancy Rate Avail: 6.77% Vac: 0.69% Vac: 1.98%

USER SALES PRICE PER SF INVESTMENT SALES PRICE PER SF $200.00 $180.00 $190.00 $170.00 $180.00 $160.00 $170.00 $150.00 $160.00 $140.00 $150.00 $130.00 $140.00 $120.00 $130.00 $120.00 $110.00 $110.00 $100.00 $100.00 $90.00 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

IEW $192.25/ SF IEE $172.91/ SF IEW $175.08/ SF IEE $157.40/ SF

ACTUAL LEASE RATE PRICE PER SF – 100K+ SF ACTUAL LEASE RATE PRICE PER SF – UNDER 100K SF $0.720 $0.920

$0.680 $0.880

$0.640 $0.840 $0.600 $0.800 $0.560 $0.760 $0.520 $0.720 $0.480

$0.440 $0.680

$0.400 $0.640 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

IEW $0.707 NNN IEE $0.572 NNN IEW $0.903 G IEE $0.823 G

VACANCY: Unoccupied space (not including U/C or planned) AVAILABILITY: All space being marketed (existing & U/C) *INCLUDES ALL CLASSES OF BUILDILNGS

GROSS ACTIVITY NET ABSORPTION 8,000,000 21,000,000 19,000,000 7,000,000 17,000,000 6,000,000 15,000,000 5,000,000 13,000,000 11,000,000 4,000,000

9,000,000 3,000,000 7,000,000 2,000,000 5,000,000 1,000,000 3,000,000 1,000,000 0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

IEW Gross Activity IEE Gross Activity IEW Net Absorption IEE Net Absorption

IE WEST - TOTAL ACTIVITY IE EAST - TOTAL ACTIVITY 60,000,000 60,000,000

50,000,000 50,000,000

40,000,000 40,000,000

30,000,000 30,000,000

20,000,000 20,000,000

10,000,000 10,000,000

0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

New Leases User Sales Inv Sales Renewals/Exp Subleases New Leases User Sales Inv Sales Renewals/Exp Subleases 2021-YTD 2021-YTD

ASKING LEASE RATES TOTAL ACTIVITY INLAND EMPIRE AVERAGE $0.924 NNN $1.100 1Q21 Total IEW IEE TOTAL $1.000 New Leases 6,810,387 2,592,277 9,402,664 Renewals/Exp 2,898,378 367,051 3,265,429 $0.900 Subleases 477,471 409,443 886,914 User Sales 963,559 1,137,610 2,101,169 $0.800 Investment Sales 793,751 2,762,217 3,555,968 $0.700 1Q21 Total 11,943,546 7,268,598 19,212,144

$0.600

$0.500

$0.400 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 IEW Asking Lease Rates IEE Asking Lease Rates $1.039 NNN $0.898 NNN

Net absorption can be calculated as the increase/decrease in vacant space in addition to Construction Completions, Gross activity includes new and renewal leases, subleases, and both user and investment sales

1st QUARTER NOTABLE DEALS LEASED PROPERTY LESSEE LESSOR SIZE DEAL TYPE 13550 Valley Boulevard, Fontana Walmart Prologis 757,976 Renewal Sierra Pacific Center, Fontana LG Electronics Northwestern Mutual 745,394 Renewal Space Center - Building 2, Jurupa Valley Amazon Link Industrial 517,903 New Lease Goodman Logistics Center Fontana – Building 4, Fontana Bloomsung Goodman 453,020 New Lease 8369 Milliken Avenue, Rancho Cucamonga 4PX Worldwide Express Prologis 441,970 New Lease Fontana Commerce Center – Building 2, Fontana Living US Elogistics Services Intex Properties 400,580 New Lease Vintage Industrial Park, Ontario Comptree JP Morgan 400,012 New Lease Perris Gateway Commerce Center, Perris Kenco Logistics AEW Capital Management 397,351 New Lease Watson Commerce Center – Building 801, Fontana Smart & Final Watson Land Company 349,552 Renewal Slover Distribution Center, Bloomington Undisclosed Tenant Crow Holdings 344,360 New Lease Prologis Chino Industrial Center 2, Chino Linemark Prologis 278,365 New Lease Centerpointe Business Center, Moreno Valley Centerpointe Business Center Alere Property Group 256,795 New Lease

SOLD PROPERTY BUYER SELLER SIZE DEAL TYPE Agua Mansa Commerce Center – Building 1, Colton Heitman Properties Black Creek Group 447,190 Investment Harvill Business Center, Perris Black Creek Group Core5 Industrial 423,665 Investment Waterman South, San Bernardino Principal Global Crow Holdings 393,704 Investment Rockefeller Distribution Center, Fontana Haralambos Leasing Company Rockefeller Group 297,161 Owner User

2021 1st QUARTER CONSTRUCTION COMPLETIONS (+100,000 SF) QUARTERLY CONSTRUCTION COMPLETIONS PROPERTY SIZE 9,000,000 5170 Archibald Ave, Ontario (Leased) 1,000,930 8,000,000 19416-19640 Cajon Blvd, San Bernardino (Leased) 321,496 10965 Banana Ave, Fontana (Occupied) 297,161 7,000,000 2600 Cajon Blvd, San Bernardino 277,822 6,000,000 12197 Davis St, Moreno Valley (Leased) 212,680 1855 Renaissance Pkwy, Rialto (Leased) 202,260 5,000,000 16477 Slover Ave, Fontana (Leased) 190,554 4,000,000 2335 Walnut Ave, Rialto 186,977 5150 Archibald Ave, Ontario (Leased) 141,940 3,000,000 5100 Archibald Ave, Ontario (Leased) 133,320 2,000,000 12075 Davis St, Moreno Valley (Leased) 122,693 5050 Archibald Ave, Ontario (Leased) 109,598 1,000,000 2644 Baseline Rd, Rialto (Occupied) 100,000 0 TOTAL 3,297,431 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 IEW IEE

UNDER CONSTRUCTION

20,000,000

15,000,000

10,000,000

5,000,000

0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 IEW IEE

Lee & Associates maintains an up-to-date database of all properties. Reported figures are subject to change at any time. The data, information, and charts contained herein have been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No warranty or responsibility is assumed for any inaccuracies or errors. Readers are encouraged to consult their own professional advisors prior to acting upon any of the material contained within this report. ©2016 Lee & Associates Inland Empire Industrial Market Report Q1 STATISTICS 5 Inland Empire WEST - 5,000 SF and Greater SF AVAILABILITY SF VACANCY NET CONSTRUCTION UNDER CITY BASE AVAILABLE RATE VACANT RATE ABSORPTION COMPLETIONS CONSTRUCTION Chino 55,724,043 1,981,796 3.56% 42,878 0.08% 14,965 0 1,002,678 Eastvale 13,619,252 2,169,457 15.93% 63,281 0.46% 240,803 0 1,057,419 Fontana 68,357,176 3,214,291 4.70% 142,564 0.21% 582,856 487,715 2,711,715 Jurupa Valley 31,326,313 1,621,206 5.18% 63,226 0.20% 617,185 131,255 1,336,760 Ontario 120,407,693 3,927,014 3.26% 354,933 0.29% 1,865,305 1,823,465 1,870,376 Rancho Cucamonga 42,605,968 2,801,386 6.58% 1,638,717 3.85% 153,534 170,528 556,004 TOTAL 332,040,445 15,715,150 4.73% 2,305,599 0.69% 3,474,648 2,612,963 8,534,952

Inland Empire EAST - 5,000 SF and Greater SF AVAILABILITY SF VACANCY NET CONSTRUCTION UNDER CITY BASE AVAILABLE RATE VACANT RATE ABSORPTION COMPLETIONS CONSTRUCTION Banning/Beaumont 4,691,878 76,750 1.64% 0 0.00% 0 0 0 Bloomington 2,627,056 174,780 6.65% 0 0.00% 344,360 0 174,780 Colton 10,040,322 676,651 6.74% 179,312 1.79% 0 0 471,247 Corona/Norco 36,205,292 2,899,823 8.01% 506,537 1.40% 198,906 0 1,698,308 Grand Terrace 469,316 8,250 1.76% 0 0.00% 0 0 0 Highland/Mentone/Yucaipa 1,262,202 176,246 13.96% 0 0.00% 0 0 121,294 Moreno Valley 31,475,599 1,255,195 3.99% 242,752 0.77% 739,548 424,791 1,203,376 Perris 31,599,119 4,499,300 14.24% 629,810 1.99% 674,883 0 4,031,740 Redlands/Loma Linda 31,107,105 2,598,546 8.35% 1,347,906 4.33% 212,744 0 2,089,894 Rialto 37,937,307 1,517,539 4.00% 523,082 1.38% 404,965 489,237 536,881 Riverside 55,053,230 3,489,374 6.34% 1,602,565 2.91% 325,283 91,987 733,333 San Bernardino 42,406,752 1,909,573 4.50% 597,423 1.41% 415,584 599,318 1,275,040 TOTAL 284,875,178 19,282,027 6.77% 5,629,387 1.98% 3,316,273 1,605,333 12,335,893

Inland Empire WEST - 100,000 SF and Greater SF AVAILABILITY SF VACANCY NET CONSTRUCTION UNDER CITY BASE AVAILABLE RATE VACANT RATE ABSORPTION COMPLETIONS CONSTRUCTION Chino 39,021,494 1,222,435 3.13% 0 0.00% 0 0 399,865 Eastvale 11,682,612 1,860,643 15.93% 0 0.00% 0 0 860,661 Fontana 55,755,752 2,613,462 4.69% 0 0.00% 487,715 487,715 2,659,813 Jurupa Valley 26,686,723 1,475,760 5.53% 0 0.00% 517,903 0 1,336,760 Ontario 87,640,678 2,773,885 3.17% 0 0.00% 1,490,666 1,385,788 1,624,041 Rancho Cucamonga 26,537,118 2,087,682 7.87% 1,431,000 5.39% 0 0 345,267 TOTAL 247,324,377 12,033,867 4.87% 1,431,000 0.58% 2,496,284 1,873,503 7,226,407

Inland Empire EAST - 100,000 SF and Greater SF AVAILABILITY SF VACANCY NET CONSTRUCTION UNDER CITY BASE AVAILABLE RATE VACANT RATE ABSORPTION COMPLETIONS CONSTRUCTION Banning/Beaumont 3,753,702 0 0.00% 0 0.00% 0 0 0 Bloomington 2,081,370 174,780 8.40% 0 0.00% 344,360 0 174,780 Colton 6,370,605 577,126 9.06% 169,143 2.66% 0 0 407,983 Corona/Norco 14,241,005 1,586,513 11.14% 281,115 0.02% 0 0 1,077,718 Grand Terrace 210,560 0 0.00% 0 0.00% 0 0 0 Highland/Mentone 963,897 121,294 12.58% 0 0.00% 0 0 121,294 Moreno Valley 30,046,789 955,700 3.18% 106,470 0.35% 689,642 335,373 1,070,551 Perris 28,802,183 4,245,035 14.74% 464,810 1.61% 597,283 0 4,031,740 Redlands 26,934,661 2,466,840 9.16% 1,304,698 4.84% 0 0 2,089,894 Rialto 33,629,819 1,101,972 3.28% 445,714 1.33% 302,260 489,237 255,152 Riverside 33,728,471 1,964,329 5.82% 1,278,466 3.79% 106,000 0 123,500 San Bernardino 32,835,724 1,574,331 4.79% 588,623 1.79% 321,496 599,318 1,275,040 TOTAL 213,598,786 14,767,920 6.91% 4,639,039 2.17% 2,361,041 1,423,928 10,627,652

Inland Empire - 500,000 SF and Greater SF AVAILABILITY SF VACANCY NET CONSTRUCTION UNDER CITY BASE AVAILABLE RATE VACANT RATE ABSORPTION COMPLETIONS CONSTRUCTION Inland Empire West 90,697,06 5,451,221 6.01% 1,431,000 1.58% 1,518,833 1,000,930 2,583,849 Inland Empire East 124,749,707 5,041,013 4.04% 1,408,431 1.13% 0 0 4,711,818 TOTAL 215,446,783 10,492,234 4.87% 2,89,431 1.32% 1,518,833 1,000,930 7,295,667

Inland Empire Industrial Market Report