Chicago's Industrial Market Sets Absorption Record in 2016

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Research & Forecast Report CHICAGO | INDUSTRIAL Fourth Quarter 2016

Chicago’s Industrial Market Sets Absorption Record in 2016

Craig Hurvitz Vice President | Chicago

Chicago’s industrial market posted an impressive fourth quarter, bringing the net absorption total for 2016 to 26.6 million square Market Indicators CHICAGO METRO 2016 2015 2014 feet, the greatest annual absorption tally the market has recorded. Over the course of the year, the vacancy rate dropped 62 basis VACANCY RATE 6.70% 7.32% 7.73% points to 6.7 percent, the lowest rate witnessed since the third NET ABSORPTION (SF) 26,645,843 13,927,451 17,494,986 quarter of 2001. A total of 85 new construction projects were completed in 2016 totaling 22.3 million square feet, the greatest ASKING RENTAL RATE $4.72 $4.56 $4.41 amount of new industrial product since 2005. At the end of the NEW SUPPLY (SF) 19,381,041 12,881,850 7,471,108 year, 58 buildings were under construction, amounting to an additional 21.9 million square feet to be added to the market’s UNDER CONSTRUCTION (SF) 21,850,854 15,228,338 12,608,925 inventory once completed. Asking rental rates continued to increase throughout the year to an average rate of $4.72 per square foot on a net basis during the fourth quarter. Vacancy Rate & Net Absorption Chicago Metro Vacancy and Supply Chicago Metro Elgin I 55 Northwest Suburbs 30 16% 2.0 15% 5 18% 1.0 14%

The industrial vacancy rate decreased to 6.7 percent during the 20 14% 1.5 12% 4 16% 0.5 12% te

fourth quarter, an improvement of five basis points over the third 3 14% te 10 12% te te 1.0 9% 0.0 10% quarter. This rate is 62 basis points below the 7.3 percent rate Chicago Metro Elgin I 55 Northwest Suburbs 0 10% 2 12% 2.0 15% 1.0 14% recorded one year ago and 561 basis points below the peak 12.3 30 16% 0.5 6% 5 18% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% percent rate recorded during the first quarter of 2010. A total of 20 20 14% 1.5 12% 4 16% 0.5 12% 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) te

speculative construction projects were completed during the fourth 3 14% te 10 12% te te 1.0 9% 0.0 10% quarter totaling 4.9 million square feet. These projects were only -30 4% -0.5 0% -1 6% -1.5 4% 0 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2.1 percent pre-leased, and added nearly 4.8 million square feet 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 4 1 10% of new vacant space to the market. This resulted in just a slight 80 8 1.6 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF)

3 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) improvement in the vacancy rate despite significant net absorption New60NetAbsorption (millions ofSF) Lease & User Sale Volume 6 1.2 -30 4% -0.5 0% -1 6% -1.5 4% of 7.1 million square feet for the quarter. 2009 2010 2011 2012 2013 2014 2015 2016 Chicago40 Metro2009 2010 2011 2012 2013 2014 2015 2016 2 4 2009 2010 2011 2012 2013 2014 2015 2016 0.8 2009 2010 2011 2012 2013 2014 2015 2016

80 4 8 1.6 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF

60 3 6 1.2 0 0 0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 40 2 4 0.8 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF Central DuPage Fox Valley I 80 O'Hare 0 0 0 0.0 1.2 16% 6 21% 3 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 5 18% 3 14% New Leasing Volume User Sale Volume 0.8 New Leasing Volume User Sale Volume 14% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2 12% 4 15% 2 12% 0.4 12% te te te te 1 10% Central1 DuPage 10% Fox Valley I 803 12% O'Hare 0.0 10% 0 8% 3 14% 1.2 16% 2 6 9% 21% 4 16% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 0.8 14% 1 5 6% 18% 3 14% 2 12% -2 4% -1 6% 2 12% -0.8 6% 0 4 3% 15% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2%

NetAbsorption (millions ofSF) 0.4 12% te te te te 1 10% 1 10% -2 4% -1.2 4% -1 3 0%12% -4 0% 0.0 10% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 2.0 6 6 1 6% 8 -2 4% -1 6% 5 5 -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

1.5 NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 6 4 4 -2 4% -1.2 4% -1 0% -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 3 2009 2010 2011 2012 2013 2014 2015 2016 1.0 3 4 2009 2010 2011 2012 2013 2014 2015 2016 2 2 6 2.0 6 8 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 5 5 1.5 6 0.0 0 0 4 4 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 3 1.0 3 4 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2 2 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 Chicago North I 290 North Lake County South Suburbs 0 0.0 0 0 2 2009 2010 2011 2012 2013 2014 2015 2016 10% 2 2009 2010 2011 2012 2013 2014 2015 2016 14% 2 2009 2010 2011 2012 2013 2014 2015 2016 16% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 8% 1 12% 1 12% 1 12% te te te te Chicago0 North 6% I 2900 North 10% Lake County South Suburbs 0 8% 0 8% 2 10% 2 14% 2 16% 2 16% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa 1 8% 1 12% -1 4% -1 4% -2 2% -2 6% 1 12% 1 12% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) te te te 0 6% te 0 10% -3 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 0 2009 2010 2011 2012 2013 2014 2015 2016 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa 2.5 VacancyRa 4 5 5 -1 4% -1 4% -2 2% -2 6% 2.0 4 4 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 3

1.5 -3 0% -3 4% 3 -2 0% 3 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1.0 2 2 2.5 4 5 5 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 4 4 2.0 3 0.0 0 0 0 3 3 1.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 1.0 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2 New Leasing Volume User Sale Volume 2 New Leasing Volume User Sale Volume 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 Chicago South I 290 South North Suburbs Southeast Wisconsin 0.0 0 0 0 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 2 2009 2010 2011 2012 2013 2014 2015 201612% 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 3 2009 2010 2011 2012 2013 2014 2015 2016 16%

3 New Leasing Volume User Sale Volume 14% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 10% 2 12% 1 10% 2 12% te te te 1 10% te Chicago South I 290 South North0 Suburbs 8% Southeast Wisconsin 0 8% 0 8% 1 8% 2 12% 2 12% 3 16% 4 16% -1 6% -1 6% VacancyRa VacancyRa VacancyRa 3 14%VacancyRa -2 4% -1 6% 1 10% 0 4% 2 12% 1 10% -2 4% 2 12% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% te te te 1 10% te 0 8% -4 0% -2 4% -3 2% -1 0% 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa 4 VacancyRa 3 3.0 4 -2 4% -1 6% 0 4% 2.5-2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 3 NetAbsorption (millions ofSF) -3 2% 3 2 2.0 -4 0% -2 4% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 1.5 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 1 4 3 1.0 3.0 4 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2.5 3 3 0 0 2 0.0 2.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 1.5 2 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 I 88 0 0 0.0 0 3 2009 2010 2011 2012 2013 2014 2015 201620% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2 16% te I 881 12%

3 20% 0 8% VacancyRa 2 16% -1 4% NetAbsorption (millions ofSF) 1 12% te -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 8%

5 VacancyRa -1 4% 4 NetAbsorption (millions ofSF)

3 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 5

Millionsof SF 1 4 0 3 2009 2010 2011 2012 2013 2014 2015 2016

2 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume The popular O’Hare submarket remains one of the tightest in and represented the largest new lease signed during the fourth Chicago’s industrial market. Several new leases and user sales quarter. The largest leases of the year were both build-to-suit resulted in a 144 basis point drop in vacancy rate during 2016 projects. A national consumer products company signed a lease for a to 3.8 percent, the lowest in the area’s history. Year-over-year 1.5-million-square-foot facility beginning construction in Wilmington’s vacancy rate improvement exceeded 100 basis points in seven Ridgeport Logistics Center and Georgia Pacific signed a lease for additional submarkets, with the I-290 South standing out with an a 1.0-million-square-foot building under construction in University impressive 278-basis-point improvement. This was largely due Park’s Gateway 57 Corporate Park. to several significant transactions being completed in suburban McCook. User sales volume totaled 10.8 million square feet in 2016. This activity was strongest during the fourth quarter, during which 76 New vacancies due to speculative construction completions and user sales were completed totaling 4.0 million square feet. The vacated second-generation space totaled 36.0 million square largest user sale of the quarter involved valve and dispensing system feet in 2016, the lowest amount of vacant space to be introduced manufacturer Flocon, Inc. purchasing the 532,500-square-foot to the market in a calendar year since records have been kept. building at 11595 McConnell Road in Woodstock, previously owned This suggests spaces have quickly leased when tenants move out and occupied by Quad Graphics. and demand is keeping up with the delivery of new speculative development.

Absorption Construction Activity

Continued demand for industrial space resulted in net absorption of A total of 85 construction projects were completed in Chicago’s 7.1 million square feet during the fourth quarter, bringing the total industrial market in 2016, adding 22.3 million square feet of new for 2016 to 26.6 million square feet, the highest tally recorded for product to the overall industrial inventory. Among these, 49 projects any calendar year or four quarter period in the market’s history. totaling 13.0 million square feet were built on a speculative basis. The speculative facilities completed in 2016 remain 66.5 percent The very active I-80/Joliet Corridor and I-55 Corridor submarkets vacant. Since 2013, the 118 speculative projects totaling 30.7 million accounted for 35.7 percent of this activity, recording 5.0 million square feet that have been completed remain 40.1 percent vacant. square feet and 4.5 million square feet of net absorption During the fourth quarter alone, 31 projects were completed totaling respectively in 2016. Seven additional submarkets posted annual 7.2 million square feet. The largest fourth quarter completion was a net absorption tallies greater than 1.0 million square feet, including 787,499-square-foot speculative project at 1101 W. Airport Road in the I-88 Corridor (2.3 million square feet), O’Hare (1.9 million Romeoville’s Southcreek Corporate Center. square feet), Southeastern Wisconsin (1.6 million square feet), Lake County (1.6 million square feet), I-290 South (1.5 million square An impressive 27 new construction projects totaling 9.6 million feet), South Suburbs (1.4 million square feet), and the Elgin I-90 square feet were started during the fourth quarter, bringing the total Corridor (1.2 million square feet). The only submarket to record for active industrial development to 21.9 million square feet, a new negative net absorption during the year was I-290 North (-864,962 record. Speculative development accounts for 11.3 million square feet, square feet), partly due to the demolition of multiple large buildings. or 51.6 percent of the 57 projects underway, with build-to-suit and building expansions making up the remainder of the activity. Leasing and Sale Activity

New leasing activity, which includes new leases and lease expansions, totaled 27.5 million square feet in 2016. The fourth quarter alone witnessed 103 new leases and expansions signed totaling 6.6 million square feet, a 13.5 percent increase compared to the 5.8 million square feet of new leasing activity recorded during the third quarter.

Five of the ten largest new leases of 2016 were signed by Amazon.com, which leased 4.0 million square feet of new space in Chicago’s industrial market. Amazon.com’s lease of the 954,720-square-foot speculative facility under construction in Aurora’s Butterfield Corporate Park is the largest of these leases,

Note: Colliers International adjusted some market boundaries during the first quarter of 2016 and added the “I-88 Corridor” market to account for the changing industrial landscape. Historical statistics follow the new market boundaries.

2 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International Chicago Industrial Market Map East Milton Troy 90 JOHN H BATTEN MEMORIAL AIRPORT Rochester Racine 1 Chicago North 43 Mount SYLVANIA BURLINGTON AIRPORT94 Pleasant 2 Chicago South MUNICIPAL Union Grove Janesville AIRPORT Burlington 94 3 O’Hare 94

94 Delavan 4 North Suburbs

Kenosha Regional 5 Lake County Airport 43 Kenosha 6 Central DuPage

Beloit 19 7 Northwest Suburbs Westosha Pleasant Prairie Airport 8 I-290 North WISCONSINCO ILLINOISN 9 I-290 South Zion 10 South Suburbs Waukegan 90 Regional Airport 11 Elgin I-90 Fox Lake 12 McHenry County Waukegan McHenry Grayslake 13 Fox Valley 22 12 94 14 I-88 Corridor Rockford 5 15 I-55 Corridor Belvidere Mundelein 16 DeKalb County Crystal Lake Lake Forest Cherry Vernon Hills Valley 17 Far South Suburbs Lake Zurich 18 Northwest Indiana Buffalo Highland Park Grove 19 Southeast Wisconsin 90 Glencoe Northbrook 20 I-80/Joliet Corridor Hampshire Palatine Dundee Chicago Executive Airport 94 21 I-39 Corridor Arlington Heights 294 Morton 22 Rockford Area 7 Evanston 11 Des Grove Elgin Schaumburg 4 39 Plaines Niles Skokie Streamwood Elk Grove Sycamore South Elgin Village Ohare 290 Int'l Airport Wood Dale3 DeKalb Bloomingdale Bensenville Rochelle Dupage Franklin Airport 901 St Charles Addison Park 88 Carol 6 Elmhurst 94 Geneva Stream 355 Melrose West Chicago Park 8Oak Park 16 13 290 Chicago Batavia WestchesterCicero 294 55 North Aurora 9 21 88 DownersHinsdaleLa Grange Grove Chicago Midway Sugar Grove Naperville Burr Airport Aurora Ridge Bedford 14 Woodridge Park 2 Montgomery Willow Springs Oak Lawn Oswego Bolingbrook 294 57 90 Yorkville 55 15 Palos 10Blue Island 94 Romeoville Heights 355 East Chicago Porter Plainfield Gary/Chicago AirportGary 39 Lockport 94 Crest Hazel Crest Hammond Hill Tinley Park 94 80 90 80 Munster Joliet Mokena Matteson 65 New Lenox 18 Park Forest Schererville Merrillville

S Valparaiso Minooka 20 University A Park 80 Channahon Monee Elwood

17 NDIAN I 80 Ottawa Morris 57 ILLINOIS La Salle 55 Peotone Seneca Submarket Overviews

Central DuPage 4 I-290 South 14 North Suburbs 24 Chicago 6 I-55 Corridor 16 Northwest Suburbs 26 Elgin I-90 Corridor 8 I-80 Joliet Corridor 18 O’Hare 28 Fox Valley 10 I-88 Corridor 20 South Suburbs 30 I-290 North 12 Lake County 22 Southeast Wisconsin 32

3 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International Central DuPage

Vacancy and Supply Market Indicators The Central DuPage vacancy rate fluctuated during the course of CENTRAL DUPAGE 2016 2015 2014 2016, ending the year at 6.19 percent, 12 basis points below the 6.31 VACANCY 6.19% 6.31% 7.54% percent rate recorded at the end of 2015. This represents one of the lowest vacancy rates recorded in the submarket’s history, and NET ABSORPTION 739,668 797,126 134,655 is 700 basis points below the 13.19 percent peak recorded during ASKING RENTAL RATE $5.43 $5.57 $5.54 the third quarter of 2011. The vacancy rate improved during the third and fourth quarters of 2016, decreasing by five basis points between October and December. Arlington Vacant industrial supply totaled 4.6 million square feet at the end Heights 294 of 2016, the lowest total in the submarket since 2000. Although Des ove 2.6 million square feet of vacant space was introduced to the Schaumburg Plaines submarket during the course of 2016, new leasing and user Elk Grove sale activity combined with the completion of three build-to-suit Streamwood Village Ohare construction projects to push net absorption positive and result in 290 Int'l Airport an overall decline in the submarket’s vacancy rate. Wood Dale Bloomingdale Bensenville Construction Activity Dupage Franklin Airport Addison Park Seven Central DuPage construction projects were completed in Carol Elmhurst 2016 totaling 917,002 square feet. The three-building Bloomingdale Stream 355 Melrose West Chicago Park Oak Park Corporate Center, a speculative project in west suburban Bloomingdale, was completed by developer IDI Gazeley in the fourth quarter. Only one additional speculative project was completed in 2016, a 186,680-square-foot facility developed by Prologis at 601 294 Regency Drive in Glendale Heights. The building has since been 88 Downers fully leased by tenants One-Stop Mailing and Ferguson Enterprises, Grove Inc. Three build-to-suit facilities were completed during 2016 Naperville Burr Aur Ridge ord including a 350,000-square-foot building for CoreCentric Solutions Woodridge Park in Carol Stream, an 89,000-square-foot building for LaVezzi Precision, Inc. in Bloomingdale, and a 15,072-square-foot facility for Kosmek (USA) in Lombard.

Only one construction project is currently underway, a 381,600-square-foot speculative facility being developed by Dermody Partners at 365 E North Avenue in Carol Stream. Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Leasing and Sale Activity Vacancy60 Rate & Net Absorption 3 6 1.2 Central DuPage New leasing activity totaled 1.7 million square feet in 2016 in the Central DuPage40 Fox Valley2 I 80 4 O'Hare 0.8 3 14% 1.2 16% 6 21% 4 16% Central DuPage submarket, only 54 percent of the 3.2 million square 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% feet of new leasing activity recorded in 2015. This reduction in 2 12% 2 12% 0 0 4 0 15% 0.0 0.4 12% te new leases and lease expansions being signed is largely due to the te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 201610% 1 10% 3 12% low vacancy rate, currently the lowest of the past 16 years. The 0.0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% largest new lease of the year involved home goods and furniture 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% e-commerce company Wayfair leasing a 188,142-square-foot space at Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 815 Kimberly Drive in Carol Stream. NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -2 4% -1.2 4% -1 0% -4 0% 5 18% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Several large Central DuPage buildings were sold in 2016, many as 2 12% 4 15% 2 12% 2.0 0.4 12% 6 te

te 8

6 te part of multi-property portfolio investment sales. Singapore-based te 1 10% 1 10% 3 12% 5 0.0 10% 5 Global Logistic Properties purchased a 17-property national portfolio 1.5 0 8% 2 9% 6 4 0 8% 4 -1 6% VacancyRa from Dallas-based Hillwood Investment Properties in December VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4 -2 4% that included three Hanover Park buildings totaling 747,291 square -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) 2 NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2%

New2 NetAbsorption (millions ofSF) Lease & User Sale Volume feet. User sale activity totaled 638,303 square feet in 2016, a 25.9 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -1.2 4% Central1 -2 DuPage 4% 1 -1 0% -4 0% percent decrease when compared to 2015. The largest user sale of 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 the year occurred when Universal Beauty Products purchased the 0 0.0 0 0 6 2009 2010 2011 2012 2013 2014 2015 2016 2.0 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 94,682-square-foot building at 221 Covington Drive in Bloomingdale 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume in September. 1.5 6 4 4 Chicago North I 290 North1.0 Lake County3 South Suburbs4 Absorption and Forecast 3 2 2 10% 2 14% 2 2 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 Net absorption totaled 739,668 square feet during 2016, the fourth 1 8% 1 12% 0 0.0 1 0 12% 1 0 12% te te te consecutive year the Central DuPage submarket has recorded te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 6% 0 10% 2009 2010 2011 2012 2013 2014 2015 2016 positive net absorption. New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa The positive trend witnessed over the past several years is expected -1 4% -1 4% Chicago-2 North 2% I 290-2 North 6% Lake County South Suburbs NetAbsorption (millions ofSF) to continue into 2017, as newly-constructed speculative space NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% is absorbed and demand remains consistent for the well-located -3 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 8% 1 12% Central DuPage submarket. 1 12% 1 12% 4 5 5 2.5 te te te 0 6% te 0 10% 4 4 2.0 3 0 8% 0 8% Significant Lease and Sale Activity -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 2 -1 4% -1 4% 1.0 -2 2% -2 6% 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Central DuPage | Top 2016 Transactions 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 -3 0% -3 4% 1 -2 0% 1 -2 0% TENANT/BUYER SIZE (SF) ADDRESS 2009 2010 2011 2012TYPE2013 2014 2015 2016 QTR 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 Venture One Real Estate, LLC 736,275 Yorkbrook Business Park, Lombard 2.5 200918-building2010 2011 investment2012 portfolio2013 2014sale 2015 2016 Q1 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

Exeter Property Group 487,437 200 N Gary Avenue, Roselle Part ofNew a 28-propertyLeasing Volume investmentUser Sale Volume portfolio sale Q1 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3

Cabot Properties, Inc. 458,882 890 S Rohlwing Road, Addison 1.5 Investment sale Q3 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin Office Depot 385,344 505-585 Kehoe Boulevard, Carol Stream 1.0 Lease renewal Q3 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Global Logistic Properties 321,378 850 Central Avenue, Hanover Park 3Millionsof SF 0.5 Part of a 17-property investment portfolio sale 14%Q4 1 1 1 10% 1 10% Global Logistic Properties 320,622 1200-1220 Central Avenue, Hanover Park 2 0.0 Part of a 17-property investment portfolio sale 12%Q4 0 0 2 0 12% te te te 1 2009 2010 2011 2012 2013 2014 2015 201610% te 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016 AEW Capital Management, LP 319,885 440 Medinah Road, Roselle Part of a 6-property investment portfolio sale Q4 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% Gramercy Property Trust 238,423 1600 Hunter Road, Hanover Park -1 Investment sale 6%Q3 VacancyRa VacancyRa VacancyRa VacancyRa -2 4% -1 6% 0 4% Dermody Properties 229,903 345-365 E North Avenue, Carol Stream Chicago SouthInvestment sale/redevelopment Q2 I 290 South North-2 Suburbs 4% Southeast Wisconsin NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 2 12% Niven Marketing Group 218,464 815 Kimberly Drive, Carol Stream 4 Lease renewal Q416% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% Wayfair 188,142 815 Kimberly Drive, Carol Stream 2 New lease Q112% 1 10% 2 12% 3

te 3.0 4

4 te te 1 10% te 0 8% 2.5 0 8% 0 8% 1 8% 3 3 2 -1 6% -1 6% 2.0 VacancyRa VacancyRa VacancyRa VacancyRa 2 -2 4% -1 6% 1.5 2 0 4% -2 4%

1 NetAbsorption (millions ofSF) 1.0NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 1

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 2 2.0 5 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International I 88 2 1.5 2

3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

te 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 201612% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa

I 88-1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 16% 5 1 12% te 4 0 8%

3 VacancyRa

2 -1 4% NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Chicago

Vacancy and Supply Market Indicators The overall Chicago industrial vacancy rate improved by 46 CHICAGO NORTH 2016 2015 2014 basis points to 7.09 percent during the course of 2016. While the VACANCY 4.98% 5.23% 6.86% Chicago South submarket vacancy rate decreased dramatically, dropping by 69 basis points during 2016 to 9.33 percent, it NET ABSORPTION 243,292 715,342 -449,188 remains well above the 4.98 percent vacancy rate in the Chicago ASKING RENTAL RATE $8.39 $8.50 $8.37 North submarket, which decreased by 25 basis points in 2016. Both the Chicago North and Chicago South vacancy rates have CHICAGO SOUTH 2016 2015 2014 dropped to the lowest levels witnessed since 2001. VACANCY 9.33% 10.02% 10.40%

Vacant supply decreased during 2016 as well, with a total of NET ABSORPTION 417,494 -10,108 359,395 12.3 million square feet of vacant space between the Chicago North and Chicago South submarkets at the end of the year, a ASKING RENTAL RATE $4.28 $4.25 $4.33 6.23 percent decrease from the 13.1 million square feet of vacant space recorded at the end of 2015. Although the submarkets are Des similar in size, nearly two-thirds of the vacant space was located in the Chicago South submarket, where the vacant industrial Elk Gr supply totaled 7.8 million square feet at the end of 2016. Only 4.5Vil Ohare Int'l Airport million square feet of vacant space resides in the Chicago NorthW submarket.

Construction Activity Franklin 90 Park Two build-to-suit construction projects were completed in Melrose 94 the Chicago South submarket in 2016, the largest being a Park Oak Park 219,858-square-foot facility for worldwide shipping provider 290 Chicago FedEx at 3000 S Damen Avenue. Additionally, a 37,000-square- Cicero foot building was completed for meat and cheese provider Amigos 294 55 Foods at 5115 S Millard Avenue. Both projects were delivered during the first quarter of the year. Chicago Midway Bu Airport Five construction projects are currently underway in Chicago, Bedford the largest of which is a 227,043-square-foot build-to-suit Park Willow facility being developed by Clarius Partners for cold storage Oak Lawn warehouse provider Preferred Freezer at 2302 S Paulina Springs Street. Three speculative projects are also underway including a 166,370-square-foot building being developed by DCT Industrial 294 57 90 at 1400 W 44th Street, a 162,000-square-foot building at 2302 Palos Blue Island 94 S Paulina Street being developed by a joint venture between Heights Clarius Partners and Wanxiang America Real Estate, and a Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

4 Chicago80 Metro Elgin I 55 8 Northwest1.6 Suburbs

30 16% 2.0 15% 5 18% 1.0 14% 60 3 6 1.2

20 14% 1.5 12% 4 16% 0.5 12% Chicago40 Metro Elgin2 I 554 Northwest0.8 Suburbs te

3 14% te 10 12% te te 30 16% 1.0 2.0 9% 15% 5 18% 0.0 1.0 10%14% 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0 10% 2 12% 20 14% 0.5 1.5 6% 12% 4 16% -0.5 0.5 8% 12%

0 VacancyRa VacancyRa 0 VacancyRa 0.0 -100 8% VacancyRa 1 10% te

3 14% te 10 12% 2009 2010 2011 2012 2013 2014 2015 2016 te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 1.0 3% 9% -1.0 0.0 6% 10% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

New Leasing Volume User Sale Volume NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 0 New Leasing Volume User Sale Volume 10% 2 New Leasing Volume User Sale Volume 12% New Leasing Volume User Sale Volume -30 4% -0.5 0.5 0% 6% -1 6% -1.5-0.5 4% 8% VacancyRa VacancyRa VacancyRa -10 2009 2010 2011 2012 2013 2014 2015 2016 8% VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 Central DuPage Fox Valley I 80 O'Hare 0.0 3% -1.0 6% -20 6% 4 8 0 8% 1.6

80 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 3 NetAbsorption (millions ofSF) 14% 1.2 16% 6 21% 4 16% -0.5 0% -1 6% -1.5 4% -30 4% 3 5 18% 3 14% 60 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 6 1.2 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te 4 te 2 te Chicago40 80 Metro te Elgin I 554 8 Northwest0.81 1.6 Suburbs 10% 1 10% 3 12% 0.0 10% 30 16% 2.0 15% 5 18% 0 1.0 8% 14% 60 1 3 2 6 9% 0.4 1.2 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa 20 14%VacancyRa 1.5 12% 1 4 6% 16% 2 0.5 12% 0 40 0 0 4 -20.0 0.8 4% -1 6% -0.8 6% te

0 3 3% 14% te 10 12% 2009 2010 2011 2012 2013 2014 2015 2016 te te NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 1.0 9% 0.0 10% 1 0.4 20 Millionsof SF 2 Millionsof SF -1.2 New Leasing Volume User Sale Volume 4% -1 Millionsof SF 0% -2Millionsof SF 0 New Leasing Volume User Sale Volume 4% 10% 2 New Leasing Volume User Sale Volume 12% -4 New Leasing Volume User Sale Volume 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.5 6% -0.5 8%

0 VacancyRa VacancyRa 0 VacancyRa 0.0 -100 8% VacancyRa 1 10% 2.0 Central6 DuPage Fox Valley 2009 2010 2011 2012 2013 2014 2015 2016 I 80 6 2009 2010 2011 2012 2013 2014 2015 2016 O'Hare8 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 3% -1.0 6% -20 6% 0 8%

NetAbsorption (millions ofSF) 5 NetAbsorption (millions ofSF) 5 New Leasing Volume User Sale Volume NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume 1.2 16% 6 New Leasing Volume User Sale Volume 21% 4 New Leasing Volume User Sale Volume 16% 3 14% 1.5 6 4 -30 4% -0.5 0% 4 -1 6% -1.5 4% 0.8 14% 5 18% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 1.0 3 Central3 DuPage Fox Valley I 804 15% O'Hare42 12% 0.4 12% te 4 te te 80 te 2 8 1 1.6 10% 21 3 10%14% 1.2 16% 6 21% 4 16% 0.5 3 12% 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.0 10% 1 1 0 3 8% 14% 60 30.8 14% 2 65 9% 18% 1.2 0 2 8% 12% -1 6% VacancyRa 0.0 0 VacancyRa -0.4 8% 0 2 12%VacancyRa 0 VacancyRa 4 15% 0.4 12% 1 6% te te

2 2009 2010 2011 2012 2013 2014 2015 2016 te 402009 2010 2011 2012 2013 2014 2015 2016 te 4 2009 2010 2011 2012 2013 2014 2015 2016 -2 0.81 2009 2010 2011 2012 2013 2014 2015 2016 4% 10% -1 1 6% 10% -0.8 6% 0 3 3% 12% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

New Leasing Volume User Sale Volume NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume 0.0 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 1 2 9% 0.4 20 Millionsof SF 2 Millionsof SF -1.2 4% -1 Millionsof SF 0% -2Millionsof SF 0 4% 8% -4 -1 0% 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 6% 2009 2010 2011 2012 2013 2014 2015 2016 Chicago North0 I 290 North0 Lake County0 South Suburbs-20.0 4% -1 6% -0.8 6% 6 2.0 2009 2010 2011 2012 2013 2014 2015 2016 6 0 3% 8 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) -3 2% 2 NetAbsorption (millions ofSF) 10% 2 14% 2 16% 2 16% 5 -1.2 New Leasing Volume User Sale Volume 4% 5 -1 0% -4 New Leasing Volume User Sale Volume 0% -2 New Leasing Volume User Sale Volume 4% 1.5 New Leasing Volume User Sale Volume 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 12% 4 4 1 12% 1 12%

2.0 te

6 te te Central3 6 DuPage te Fox1.0 Valley I 803 O'Hare4 8 0 6% 0 10% 2 5 2 53 14% 1.2 16% 0 6 8% 21% 0 4 8% 16% 0.5 1.5 2 6 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -1 4% -1 8% 1 4 1 4 3 14%

VacancyRa 5 18% VacancyRa VacancyRa VacancyRa 0.8 14% 2 12% 0.0 1.0 0-1 3 4% -1 42 4% 12% 0 3 -2 6% 4 15% 0 -2 2% 0.4 12% te te

2009 2010 2011 2012 2013 2014 2015 2016 te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF)

2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 1 10% 21 10% 0.5 3 12% 2 Millionsof SF Millionsof SF Millionsof SF -3Millionsof SF 0% -3 0.0 New Leasing Volume User Sale Volume 4%10% -2 New Leasing Volume User Sale Volume 0% -2 New Leasing Volume User Sale Volume 0% 1 New Leasing Volume User Sale Volume 1 0 8% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 9% 2009 2010 2011 2012 2013 2014 2015 2016 Vacancy0 Rate & Net Absorption 8% -1 6% VacancyRa 0.0 0 VacancyRa 40,700-square-foot facility on the north side being developed by -0.4 8% 0 VacancyRa 0 VacancyRa 1 6% ChicagoChicago2.5 North North2009 2010 2011 2012 2013 2014 2015 2016 I 290 North4 2009 2010 2011 2012 2013 2014 2015 2016 Lake County5 2009 2010 2011 2012 2013 2014 2015 2016 South5 Suburbs-2 2009 2010 2011 2012 2013 2014 2015 2016 4% Dayton Street Partners and WBS Equities, LLC at 4150 N Knox -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

New Leasing Volume User Sale Volume NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume 2 14% 42 New Leasing Volume User Sale Volume 16% 42 New Leasing Volume User Sale Volume 16% Avenue. Finally, DCT Industrial is constructing a 140,000-square- 2.02 10% 3 -2 4% -1.2 4% -1 0% -4 0% foot build-to-suit facility for Whole Foods at 10700 S Doty Avenue. 1.5 2009 2010 2011 2012 2013 2014 2015 2016 3 2009 2010 2011 2012 2013 2014 2015 2016 3 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 12% 2009 2010 2011 2012 2013 2014 2015 2016 Chicago North I 2902 North Lake1 County 12% South1 Suburbs 12% 2 2

1.0 2.0 te 6 te te 6 te 8 0 2 6% 10% 0 2 10%14% 2 16% 2 16% Leasing and Sale Activity 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 5 10 5 8% 10 8% 1.5 6 -1 1 8% 12% -1 41 4% 8% 4 VacancyRa

0 1 12%VacancyRa 1 12%VacancyRa New leasing volume between the two Chicago industrial 0.0 VacancyRa 0 0 te te te 3 2009 2010 2011 2012 2013 2014 2015 2016 te 1.02009 2010 2011 2012 2013 2014 2015 2016 -1 3 2009 2010 2011 2012 2013 2014 2015 2016 4% -1 4 2009 2010 2011 2012 2013 2014 2015 2016 4% submarkets totaled 1.5 million square feet during 2016, however -2 0 2% 6% -2 0 6% 10% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 20 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% 0.5 2 Millionsof SF

70.3 percent of this activity took place in the Chicago South Millionsof SF Millionsof SF -3Millionsof SF -1 0% 4% -3 -1 4% 8% -2 0% -2 0% 1 1 VacancyRa VacancyRa VacancyRa submarket where new leases and lease expansions totaled 1.0 2009 2010 2011 2012 2013 2014 2015 2016 VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Chicago South I 290 South0.0 North Suburbs0-1 4% Southeast0-1 Wisconsin 4% Chicago-20 South 2% -2 6% million square feet. The largest new lease of 2016 involved printing, 2.5 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF)

2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 4 NetAbsorption (millions ofSF) 16% 2 12% 2 12% 3 16% envelope, and label provider Conveo, Inc. selling its two-building -3 New Leasing Volume User Sale Volume 0% -3 New Leasing Volume User Sale Volume 4% 4 -2 New Leasing Volume User Sale Volume 0% 4 -2 New Leasing Volume User Sale Volume 0% 2.03 14% 3 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 195,765-square-foot north side campus at 3001 N Rockwell Street 1 10% 1.52 12% 3 32 12% te

4 te te 2.5 te 2 5 5 and 2950 N Campbell Avenue and leasing it back. The building was Chicago1 North 10% I 290 North Lake0 County 8% South Suburbs 1.0 2 2 purchased by Los Angeles-based Hackman Capital Partners for 0 2.02 8% 10% 0 2 8% 14% 42 16% 1 42 8% 16% 1 3 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -1 6% 0.5-1 6% 1 1 VacancyRa

$8.25 million, or $42.22 per square foot. VacancyRa VacancyRa 1.5 VacancyRa 3 3 1 8% 1 12% -2 4% 0-1 2 6% 0 1 12% 00 1 4% 12% 0.0 -2 4% 1.0 2 2 te te te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2016 sale activity was highlighted by significant user sales and NetAbsorption (millions ofSF) -3 0 2% 6% 0 10% 1 Millionsof SF Millionsof SF Millionsof SF several portfolio investment sales. User sales volume totaled -4Millionsof SF 0.5 New Leasing Volume User Sale Volume 0% -2 New Leasing Volume User Sale Volume 4% -3 10 New Leasing Volume User Sale Volume 2% 8% -1 10 New Leasing Volume User Sale Volume 0% 8% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 -1 2009 2010 2011 2012 2013 2014 2015 2016 4% -1 8% VacancyRa

0 VacancyRa VacancyRa 638,303 square feet, a 25.93 percent decline compared to the 0.0 VacancyRa 0 0 Chicago4 South 2009 2010 2011 2012 2013 2014 2015 2016 I 290 South3 2009 2010 2011 2012 2013 2014 2015 2016 North3.0 Suburbs-1 2009 2010 2011 2012 2013 2014 2015 2016 4% Southeast4 -1 Wisconsin2009 2010 2011 2012 2013 2014 2015 2016 4% 2015 user sales volume. Significant user sales for 2016 involved -2 2% -2 6% NetAbsorption (millions ofSF)

2.5NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 4 NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume 16% 2 New Leasing Volume User Sale Volume 12% 2 New Leasing Volume User Sale Volume 12% 3 New Leasing Volume User Sale Volume 16% J&J Properties Group, LLC’s $3.4 million purchase of the New3 Lease & User Sale Volume 3 2 -3 4% -2 0% -2 0% 3 -3 14%0% 2.0 179,312-square-foot building at 5950 W 51st Street in March for Chicago North2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 Chicago22 South 12% I 2901 South 10% North1.5 Suburbs Southeast22 Wisconsin 12%

its trucking business. Additionally, Parking Company of America te

4 te te 2.5 te 1 5 5 1 4 10%16% 2 12% 1.00 2 8% 12% 3 16% 1

1 Millionsof SF

purchased the two-building, 1.3-million-square-foot facility known Millionsof SF Millionsof SF Millionsof SF 0 8% 0 8% 4 1 4 8% 2.03 14% 3 0.5 -1 1 6% 10% as Midway Business Park from Flying Food Group for $50 million in -1 6% 0 1 10%VacancyRa 0.0 VacancyRa 0 2 12%VacancyRa 0 1.52 12%VacancyRa 3 3 te

-1 6% te te March. The buyer plans to demolish the buildings, and will convert -2 2009 2010 2011 2012 2013 2014 2015 2016 4% te 2 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 4% 1 10% -2 0 4% 8% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) the property into airport parking. NetAbsorption (millions ofSF) -3 0 New Leasing Volume User Sale Volume 2% 8% 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -2 4% -3 -1 2% 6% -1 0% -4 0.5-1 0% 6% 1 1 VacancyRa VacancyRa VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 I 88 -2 4% 0-1 6% 0 4% Absorption and Forecast 0.0 -20 4% 0 4 3 2009 2010 2011 2012 2013 2014 2015 2016 3.0 4 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 3 NetAbsorption (millions ofSF) -3 20%2% Net absorption totaled 660,786 square feet between the Chicago -4 New Leasing Volume User Sale Volume 0% -2 New Leasing Volume User Sale Volume 4% 2.5 -3 New Leasing Volume User Sale Volume 2% -1 New Leasing Volume User Sale Volume 0% 3 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 3 2009 2010 2011 2012 2013 2014 2015 2016 North and Chicago South submarkets during 2016. The Chicago Chicago2 South 16% 2 2.0 3 Chicago2 4 South te I 290 South North1.5 3.0 Suburbs Southeast2 4 Wisconsin South submarket recorded nearly two-thirds of that annual 1 12% 1 2.5 4 16% 2 12% 1.0 2 12% 3 16% absorption tally, totaling 417,494 square feet. 3 1 3

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0 8% 2 3 14% 0.5 2.0 VacancyRa 1 10% 22 12% 0 1 10% 0.0 1.5 0 22 12% The Chicago vacancy rate is expected to slightly increase 0-1 4% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 throughout 2017, as speculative construction activity is delivered to NetAbsorption (millions ofSF) 1 10% 1 1.00 8% 1

1 Millionsof SF Millionsof SF Millionsof SF

Millionsof SF New Leasing Volume User Sale Volume the market and obsolete buildings are demolished. -2 0 New Leasing Volume User Sale Volume 0% 8% 0 8% 0.5 New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% 2009 2010 2011 2012 2013 2014 2015 2016 -1 6% -1 6% 0 VacancyRa 0.0 VacancyRa 0 VacancyRa 0 VacancyRa I 88 5 -2 2009 2010 2011 2012 2013 2014 2015 2016 4% -1 2009 2010 2011 2012 2013 2014 2015 2016 6% 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Significant Lease and Sale Activity 43 NetAbsorption (millions ofSF) -3 New Leasing Volume User Sale Volume 20%2% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume -4 0% -2 4% -3 2% -1 0% 3 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 16% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 I 88 Chicago | Top 2016 Transactions 2 3 4 te 3.0 4 1 3 12%20%

TENANT/BUYER SIZE (SF) ADDRESS Millionsof SF 1 TYPE QTR 2.5 3 3 Parking Company of America 941,782 5370-5585 S Archer Avenue, Chicago 0 2 2-property portfolio sale, redevelopment 8%Q116% 2 2.0

0 VacancyRa

2 2009 2010 2011 2012 2013 2014 2015 2016 te 1.5 2 Best Food Service 391,483 6400 & 6500 W 51st Street, Chicago -1 1 2-property user portfolio sale 4%Q112%

NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume 1 1.0 1

Parking Company of America 347,681 5333 S Laramie Avenue, Chicago 1 2-property portfolio sale, redevelopment Q1 Millionsof SF Millionsof SF Millionsof SF -2Millionsof SF 0 0% 8% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 VacancyRa Cenveo, Inc./Hackman Capital Partners 195,765 3001 N Rockwell Street & 2950 N Campbell Avenue, Chicago 2-property sale-leaseback Q3 0 0.0 0 0-1 4% 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 LBP Packaging 180,437 1401 N Cicero Avenue, Chicago NetAbsorption (millions ofSF) Lease renewal Q4 4 -2 New Leasing Volume User Sale Volume 0% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume J&J Properties Group, LLC 179,312 5950 W 51st Street, Chicago 2009 2010 User2011 sale 2012 2013 2014 2015 2016 Q1 3 Ardaugh Metal Packaging USA Inc 146,153 1101 W 43rd Street, Chicago I 88 5 Part of a 5-property investment portfolio Q3 2 Edsal Sandusky Corporation 128,426 4300-4330 S Racine Avenue, Chicago 43 Sublease Q320%

Millionsof SF 1 3 The Lock Up 126,000 4000 W Diversey Avenue, Chicago 2 User sale Q116% 0 2 123 Remodeling 125,221 5610 W Bloomingdale Avenue, Chicago 2009 2010 Investment2011 2012 sale2013 2014 2015 2016 Q2 te 1 12%

Millionsof SF 1 New Leasing Volume User Sale Volume 0 8%

0 VacancyRa 2009 2010 2011 2012 2013 2014 2015 2016 7 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial -1| Colliers International 4%

NetAbsorption (millions ofSF) New Leasing Volume User Sale Volume -2 0% 2009 2010 2011 2012 2013 2014 2015 2016

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Elgin I-90 Corridor

Vacancy and Supply Market Indicators The Elgin I-90 Corridor vacancy rate fluctuated during 2016, ELGIN I-90 CORRIDOR 2016 2015 2014 ending the year at 10.63 percent, a year-over-year increase VACANCY 10.63% 10.60% 11.75% of only three basis points. Despite this rate increasing during the final two quarters of the year, the rate remains below the NET ABSORPTION 1,237,961 1,642,348 753,238 peak rate of 14.62 percent recorded during the first quarter of ASKING RENTAL RATE $4.85 $5.02 $5.14 2014. Among the 22 submarkets tracked, the Elgin I-90 Corridor submarket has the second-highest vacancy rate. Crystal Lake More than 1.5 million square feet of vacant space was introduced to the submarket during 2016, with more than 1.0 million square feet introduced during the fourth quarter alone. This brought the total vacant supply to 3.5 million square feet, a 4.79 percent increase when compared to the 3.3 million square feet vacant at the end of 2015. The increase in vacant space and the vacancy rate was largely due to the completion of four speculative 90 construction projects in Elgin totaling 1.1 million square feet, all Hampshire which remain vacant. Dundee

Construction Activity

Seven construction projects were completed in the Elgin I-90 Elgin Corridor in 2016. Four buildings totaling 1.1 million square feet ood were built on a speculative basis and were all delivered duringSycamore South Elgin the fourth quarter. The largest construction delivery of the year was the 385,372-square-foot speculative facility at 2601 Galvin Drive in Elgin’s Northwest Corporate Park, a Conor Commercial development. Dupage St Charles Airport Two build-to-suit projects totaling 48,400 square feet remain under construction. Walls are going up on a 23,400-square- Geneva foot facility for Oelheld USA at 1002 Wesemann Drive in West West Chicago Dundee. Construction started during the fourth quarter on a 25,000-square-foot building for Fabric & Manufacturing Association International at 2135 Point Boulevard in Elgin. The Elgin I-90 Corridor witnessed significant development over the past few years. Now that most of that construction activity has been completed, developers are expected to gauge interest in the recently completed speculative buildings before starting additional projects. Leasing and Sale Activity Vacancy Rate & Net Absorption Elgin I-90 Corridor New leases and leaseChicago expansions Metro totaled 954,910 square feet Elgin I 55 Northwest Suburbs in 2016, a total 7.78 percent30 below the 1.0 million square feet of 16% 2.0 15% 5 18% 1.0 14% new leasing activity recorded20 in 2015, and well below the 2.3 14% 1.5 12% 4 16% 0.5 12%

million square feet recorded in 2014. The largest new lease of the te

3 14% te 10 12% te te 1.0 9% year was a sale-leaseback transaction involving The Packaging 0.0 10% 0 10% 2 12% Wholesalers. The previous owner sold the building to Brennan 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Investment Group inChicago June Metro for $15.0 million and leased it back long- Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) term. The largest newNetAbsorption (millions ofSF) lease30 of the fourth quarter involved Sub- 16% 2.0 15% 5 18% 1.0 14% Zero Group Midwest, -30LLC leasing 226,438 square feet at 200-290 4% -0.5 0% -1 6% -1.5 4% 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 2009 2010 2011 2012 2013 2014 2015 2016 12% 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 2009 2010 2011 2012 2013 2014 2015 2016 Burnet Drive in Gilberts. 0.5 12%

4 te

3 14% te 10 12% te 1.6 80 te 8 1.0 9% 0.0 10% User sale volume totaled0 279,205 square feet in 2016, a 34.77 10% 2 12% 60 3 6 1.2 0.5 6% -0.5 8% VacancyRa VacancyRa percent decrease compared to the user sale volume of 428,048 in VacancyRa -10 8% VacancyRa 1 10% 2 4 0.8 2015. The largest user40 sale of the year involved dumpster lids and 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Lease & User Sale Volume parts manufacturer Impact Plastics purchasing the 132,219-square- 1 0.4 20 Millionsof SF 2 Millionsof SF

-0.5 0% Millionsof SF Millionsof SF -30 4% Elgin I-90 Corridor -1 6% -1.5 4% foot building at 950 Tollgate2009 Road2010 in Elgin2011 for2012 $5.2 2013million2014 in 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 October. 4 80 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 1.6 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Absorption and Forecast60 3 6 1.2

2 0.8 Net absorption totaledCentral 40DuPage1.2 million square feet in 2016, a 24.62 Fox Valley I 80 4 O'Hare 3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF 2

percent decrease compared to the 1.6 million square feet of Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% net absorption recorded2 in 2015. Over the past three years, net 12% 0 0 4 0 15% 20.0 12% 0.4 12% te te

2009 2010 2011 2012 2013 2014 2015 2016 te absorption has totaled more2009 than2010 3.6 million2011 square2012 2013 feet, 2014the 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% strongest demand the submarket hasNew witnessedLeasing Volume sinceUser Sale 2007. Volume 0.0 New Leasing Volume User Sale Volume 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% The Elgin I-90 CorridorCentral DuPagevacancy has remained elevated due to Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) the recent completion of several speculative facilities. Demand NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -1.2 4% -1 0% -4 0% for space in the submarket-2 is expected to continue into 2017 and 4% 5 18% 3 14% 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% eventually some of these new construction facilities will be leased 4 15% 2 12% 0.4 12% te 2.0 te

6 te 6 te 8 1 10% resulting in a decrease 1in the vacancy rate. 10% 3 12% 5 0.0 10% 5 0 8% 1.5 2 9% 6 4 0 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4 -2 4% Significant Lease -1and Sale Activity 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2NetAbsorption (millions ofSF) 2 0.5 2 Millionsof SF Millionsof SF

-1.2 4% Millionsof SF Millionsof SF -1 0% -4 0% Elgin I-90 Corridor1 -2 | Top 2016 Transactions 4% 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 TENANT/BUYER0 SIZE (SF) ADDRESS TYPE QTR 0 0 2.0 6 6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 The Packaging Wholesalers/ 443,103 1717 Gifford Road, Elgin Sale-leaseback Q2 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Brennan Investment Group 1.5 6 4 4

Sub-Zero Group Midwest,Chicago3 NorthLLC 226,438 200-290 Burnet Drive, GilbertsI 290 North1.0 New lease Q4 Lake County3 South Suburbs4

Stamar Packaging 22 186,052 1600 Fleetwood 10%Drive, Elgin 2 New lease 14%Q1 22 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 Global Logistic Properties1 176,799 300 Airport Road,8% Elgin 1 Part of a 17-property investment portfolio sale 12%Q4 0 0.0 10 12% 10 12% te te te Medela, Inc. 2009 2010 2011 154,5232012 2013 20142760-27802015 Spectrum2016 te Drive, Elgin 2009Lease2010 renewal2011 2012 2013 2014 2015 2016 Q3 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 6% 0 10% New Leasing Volume User Sale Volume Heritage Travelware, Inc. New Leasing Volume151,346User Sale Volume2500 Northwest Parkway, Elgin New lease Q4 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa NTN Bearing 140,970 350-390 River Ridge Drive,VacancyRa Elgin New lease Q1 Chicago North I 290 North Lake-1 County 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Impact Plastics NetAbsorption (millions ofSF) 2 132,219 950 Tollgate Road,10% Elgin 2 User sale 14%Q4 2 16% 2 16% -3 0% -3 4% -2 0% -2 0% Thyssenkrupp 125,000 305-325 Corporate Drive, Elgin 2009 Lease2010 renewal2011 2012 2013 2014 2015 2016 Q3 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% 1 12% te te te SureWerx 2.5 102,843 300-330 Corporate Drive,te Elgin 4 New lease Q4 5 5 0 6% 0 10% 4 0 8% 4 0 8% 2.0 3 -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 2 -1 4% -1 4% -2 2% -2 6% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1 -2 0% 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3 9 Research & Forecast1.5 Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin 1.0 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 3 14% 1 10% 20.0 12% 1 0 10% 0 2 0 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 0 8% 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 4 2%16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 1 10% 2 12% te

3 te te 4 te 3.0 4 1 10% 0 8% 0 8% 0 8% 2.5 1 8% 3 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa VacancyRa 2 -2 4% -1 6% 1.5 2 0 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF

Millionsof SF -2 4% -4 0% 0.5-3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 3 4 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 3.0 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 2 2.0

I 88 2 1.5 2

3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa I 88 -1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

5 te 1 12% 4 0 8%

3 VacancyRa -1 4% 2 NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Fox Valley

Vacancy and Supply Market Indicators The vacancy rate in the Fox Valley submarket increased by 64 basis FOX VALLEY 2016 2015 2014 points to 5.90 percent during the fourth quarter due to several VACANCY 5.90% 5.85% 7.02% tenants vacating space. Despite this increase, the vacancy rate has only witnessed a 5-basis-point rise compared to the 5.85 percent NET ABSORPTION 433,208 197,047 414,714 rate recorded at the end of 2015. The Fox Valley submarket has ASKING RENTAL RATE $4.37 $4.26 $4.40 witnessed a strong recovery from the peak 14.61 percent vacancy rate recorded in the second quarter of 2009.

A total of 517,152 square feet of vacant space was introduced Dundee to the submarket during 2016, with 357,856 square feet of that introduced during the fourth quarter alone. At the end of the year, the submarket recorded 1.9 million square feet of vacant space. For Elgin users seeking more than 100,000 square feet of space, there were g four vacant and immediately available options in the Fox Valley submarket. South Elgin Construction Activity

Two construction projects were completed in 2016. CenterPoint Dupage Properties developed a 299,520-square-foot build-to-suit facility St Charles Airport for aerosol packaging manufacturer DS Containers at 2500 ol Geneva Enterprise Circle in West Chicago’s DuPage National Technology West Chicago Park. The building was completed during the first quarter. Additionally, Venture One Real Estate delivered 180,121-square-foot Batavia build-to-suit project for AJR Filtration at the East Kirk Commerce Center in Saint Charles during the fourth quarter. The filter bag North Aurora and cartridge manufacturer is expanding and this new location 88 allows the manufacturer to increase its production levels and bring Sugar Grove Naperville approximately 150 new jobs to Saint Charles. Aurora Three projects are currently underway in Batavia and West Montgomery Chicago. A 308,900-square-foot expansion to Suncast Corporation’s existing facility at 1801 Suncast Lane in Batavia is nearing completion. Similarly, a 250,575-square-foot expansion to DS Containers’ building at 2500 Enterprise Circle in West Chicago is being constructed by CenterPoint Properties. Finally, a 137,573-square-foot speculative facility broke ground during the fourth quarter at 1200-1250 Douglas Road in Batavia. The building is being developed by HSA Commercial Real Estate and is expected to deliver in the spring of 2017. Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 12% 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 0.5 12%

4 te

3 14% 1.6 te 10 12% 8 te 80 te 1.0 9% 0.0 10% 0 10% 2 12% 60 3 6 1.2 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 40 2 4 0.8 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 4 80 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 1.6 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Leasing and Sale Activity60 Vacancy3 Rate & Net Absorption 6 1.2 Fox Valley New leasing activityCentral totaled DuPage40 307,133 square feet in 2016, less than Fox Valley2 I 80 4 O'Hare 0.8 3 14% 1.2 16% 6 21% 4 16% half of the new leasing volume of 702,031 square feet recorded 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF in 2015. The largest newMillionsof SF lease of the year took place in the third 0.8 14% 5 18% 3 14% 2 12% 0 0 4 0 15% 2 0.0 12% quarter when plastic packaging solutions manufacturer Graham 0.4 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% Packaging Company leased1 the entire 212,256-square-foot building 10% 3 12% New Leasing Volume User Sale Volume 0.0 New Leasing Volume User Sale Volume 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% located at 1445 Northwest0 Avenue in West Chicago. The largest 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa lease signed during the fourth quarter of 2016 involved commercial VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

vehicle components manufacturer Accuride Corporation renewing NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -2 4% -1.2 4% -1 0% -4 0% its lease for 170,462 square feet at 950 N Raddant Road in Batavia. 5 18% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 4 15% 2 12% 0.4 12% 2.0 te 6 te

8 te Several investment and6 user sales took place in 2016 in the Fox te 1 10% 1 10% 3 12% Valley submarket. The5 largest investment sale involved Cabot 0.0 10% 5 1.5 0 8% 2 9% 6 Properties purchasing4 a0 four-property portfolio totaling 829,198 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% square feet during the3 second quarter. The fully-leased buildings 1.0 3 4 -2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) New Lease & User Sale Volume NetAbsorption (millions ofSF) 2 NetAbsorption (millions ofSF) -3 2% were all located in West2 NetAbsorption (millions ofSF) Chicago and were sold by DCT Industrial 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF Fox Valley-1.2 4% -1 0% 1 -2 4% 1 -4 0% Trust for $33 million or $39.802009 per2010 square2011 foot.2012 User2013 sale2014 activity2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 totaled 143,931 square0 feet in 2016, the lowest user sale volume 0.0 0 0 2.0 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 8 since 2009. The largest6 user2009 sale2010 of the2011 year2012 involved2013 packaging2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume solutions provider PackSmart, Inc. purchasing the 43,356-square- 1.5 6 4 4 foot building at 1000 Atlantic Drive in West Chicago. Chicago 3North I 290 North1.0 Lake County3 South Suburbs4

2 2 10% 2 14% 2 2 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF Absorption and ForecastMillionsof SF 1 1 1 8% 1 12% 0.0 1 12% 1 12% Net absorption totaled 433,2080 square feet in the Fox Valley 0 0 te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 submarket in 2016. The0 majority of this absorption took place 6% 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% during the first quarter-1 of the year, when net absorption measured 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa 413,694 square feet.Chicago North I 290 North Lake-1 County 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% The Fox Valley vacancy-3 rate is expected to remain relatively stable 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 8% 1 12% throughout 2017. New vacancies will be offset by continued 1 12% 1 12%

4 te

5 te 5 te demand for space by 2.5users looking to relocate to the submarket. te 0 6% 0 10% 4 0 8% 4 0 8% 2.0 3 -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 2 -1 4% -1 4% -2 6% 1.0-2 2% 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1 -2 0% 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Significant Lease0.0 and Sale Activity 0 0 0 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume Fox Valley | Top 20162.0 Transactions 3 TENANT/BUYER1.5 SIZE (SF) ADDRESS TYPE QTR 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin Cabot Properties, Inc. 1.0 829,198 4 buildings, West Chicago 4-property investment portfolio sale Q2 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 Dermody Properties 3 0.5 636,128 4 buildings, Batavia 14% 4-property investment portfolio sale Q3 1 10% 2 12% 1 10% 2 12% STAG Industrial Management0.0 LLC 249,470 1726-1850 Blackhawk Street, West Chicago 0 Investment sale Q2 0 0 te te te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 0 8% Graham Packaging Company0 New212,256 Leasing Volume1415-1499User Sale Volume Northwest Avenue, 8%West Chicago 0 New lease New Leasing Volume User Sale Volume 8%Q3 New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa Accuride Corporation 170,462 950 N Raddant Road, Batavia VacancyRa Lease renewal Q4 Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% -2 4% NetAbsorption (millions ofSF)

Midwest Industrial Funds 158,775 825-845 W Hawthorne Lane, West Chicago Investment sale Q3 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 4 16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 14% PDS Transportation 107,800 1050-1074 Swanson Drive, Batavia 2009New lease2010 2011 2012 2013 2014 2015 2016 Q1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 2 12% 1 10% 2 12%

3 te

AGCO Parts 91,391 1160 Powis Court, West Chicago Lease renewal Q3 3.0 te 4 te

4 te 1 10% 0 8% 2.5 0 8% 0 8% 1 8% High Street Realty Company,3 LLC 89,690 1011 Olympic Drive, Batavia Investment sale Q3 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa AIC Ventures 59,719 1310 Kingsland Drive, Batavia VacancyRa Investment sale Q3 2 -2 4% -1 6% 1.5 2 0 4% -2 4% NetAbsorption (millions ofSF)

1 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Packsmart NetAbsorption (millions ofSF) -3 43,356 1000 Atlantic Drive, West Chicago2% User sale Q2 1.0 1

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 11 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial 2 | Colliers International 2.0 I 88 2 1.5 2

3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa I 88 -1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 16%

5 te 1 12% 4 0 8%

3 VacancyRa

2 -1 4% NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume I-290 North

Vacancy and Supply Market Indicators The vacancy rate in the I-290 North submarket increased by 135 I-290 NORTH 2016 2015 2014 basis points in 2016 to 9.77 percent. The rate increased every VACANCY 9.77% 8.42% 8.07% quarter of the year due to the completion of four speculative construction projects totaling 1.3 million square feet, tenants NET ABSORPTION -864,962 -1,729,205 1,521,890 vacating previously occupied space, and several sizable buildings ASKING RENTAL RATE $5.17 $4.36 $4.21 being demolished. Despite the increase, the vacancy rate remains well below the peak rate of 14.12 percent recorded in the first quarter of 2010.

A total of 7.3 million square feet was vacant in the I-290 North Morton submarket at the end of 2016. This represents a 3.56 percent Grove Evanston increase when compared to the 7.0 million square feet of vacant Des Plaines space recorded at the end of 2015. Currently, there are ten options Niles Skokie Elk Grove available for tenants seeking 200,000 square feet or larger in the Village Ohare submarket. 290 Int'l Airport Wood Dale Construction Activity Bensenville Franklin Five development projects were completed during 2016 totaling Addison 90 1.4 million square feet, four of which were constructed on a Park Car Elmhurst 94 speculative basis with no tenant in place. The largest project wasStr 355 Melrose Park Oak Park the 588,233-square-foot speculative facility developed by Bridge 290 Development Partners in Northlake on the former site of Dominick’s distribution center. The building was delivered during the first Cicero quarter of the year. 294 55 Downers Ongoing construction includes three speculative projects totaling Chicago Midway Grove Airport 648,614 square feet, with the largest being developed by Panattoni Burr at 3400 Wolf Road in Franklin Park. The project is in its final stages Ridge Bedford Woodridge Park and will be completed during the first quarter of 2017. Bridge Willow Development Partners has two facilities underway in Schiller Park Oak Lawn at 9555 and 9655 Soreng Avenue. Both buildings, sized at 72,825 Springs Bolingbr square feet and 84,700 square feet respectively, will offer 32-foot 57 clear heights and Cook County 6B tax reductions. The buildings are55 scheduled to deliver in the third quarter of 2017. Heights Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% Chicago Metro Elgin I 55 Northwest-0.5 Suburbs 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 2.0 15% 30 16% 0.0 3% 5 18% -1.01.0 14%6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 20 14% 1.5 12% 4 16% 0.5 12% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te

3 14% te 10 12% te te 1.0 9% 0.0 10% 4 8 1.6 800 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa 60-10 8% VacancyRa 3 61 10% 1.2 0.0 3% -1.0 6% -20 6% 0 8%

NetAbsorption (millions ofSF) 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 0.8 NetAbsorption (millions ofSF) 40 4 -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.4 2009 2010 2011 2012 2013 2014 2015 2016 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF

80 4 8 1.6 0 0 0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 60 3 6 1.2 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 40 2 4 0.8

Central DuPage Fox Valley I 80 O'Hare 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 3 14% 1.2 16% 6 21% 4 16% 0 0 0.8 14% 05 18% 0.03 14% 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te te te New Leasing Volume User Sale Volume te New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 10% 1 10% 3 12% 0.0 10% 0 8% 2 9% Central0 DuPage 8% Fox Valley I 80 O'Hare-1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 1.2 16% 6 21% -24 16%4% -13 14%6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 0.8 14% 5 18% 3 14% -22 12%4% -1.2 4% -1 0% -4 0% 4 15% 2 12% 2009 2010 2011 2012 2013 2014 2015 2016 0.4 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te te 1 10% 1 10% 3 12% 2.0 6 6 0.0 10% 80 8% 2 9% 50 8% 5 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1.5 1 6% 6 4 4 -2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) 1.0 NetAbsorption (millions ofSF) 3 NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 4 -1.2 4% -1 0% -22 4% 2 -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 6 2.0 6 8 0 0.0 0 0 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1.5 6 Leasing and Sale 4Activity New Leasing Volume User Sale Volume Vacancy Rate New& LeasingNet Volume AbsorptionUser Sale Volume 4 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.0 3 4 3 I-290 North Chicago2 North I 290 North Lake County2 South Suburbs New leasing volume totaled 297,089 square feet in 2016, a 17.63 0.5 2 Millionsof SF Millionsof SF Millionsof SF percent increase comparedMillionsof SF 12 to the 252,560 square feet of new 10% 2 14% 12 16% 2 16% 0 0.0 0 0 leasing activity recorded in 2015. The largest new lease of the year 1 12% 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 occurred when fitness equipment company LifeFitness committed 1 12% 1 12% te te te New Leasing Volume User Sale Volume te New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume to the 141,205-square-foot0 building at 10701 W Belmont Avenue 6% 0 10% 0 8% 0 8% -1 8% in Franklin Park. LifeFitnessChicago-1 North also renewed its lease in the nearby 4% I 290 North Lake County South Suburbs VacancyRa VacancyRa VacancyRa VacancyRa 206,400-square-foot building at 10600 W Belmont Avenue during 2 14% -1 4% -1 4% -22 10%2% -2 6% 2 16% 2 16% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) the third quarter. NetAbsorption (millions ofSF) 1 8% 1 12% -3 0% -3 4% -21 12%0% -21 12%0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te Several investment and user sales were completed during 2016. te 0 6% 0 10% The largest investment2.5 sale of the year involved New Jersey- 4 50 8% 50 8% -1 4% -1 8% based PGIM Real Estate2.0 acquiring the recently-completed 4 4 VacancyRa VacancyRa VacancyRa VacancyRa 3 -1 4% -1 4% 588,233-square-foot speculative-21.5 building in January. Bridge 2% -2 6% 3 3 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Development PartnersNetAbsorption (millions ofSF) sold the building for $48.75 million in New2 Lease & User Sale Volume 1.0 2 2 -3 0% I-290-3 North 4% -2 0% -2 0% January. User sale volume2009 totaled2010 663,5332011 square2012 2013 feet in2014 2016,2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Millionsof SF Millionsof SF Millionsof SF well below the 2015 totalMillionsof SF 0.5 of 1.6 million square feet. The largest 1 1 2.5 4 5 5 user sale of the year involved0.0 German drug maker Fresenius Kabi 0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 USA LLC purchasing the2.0 108,464-square-foot building at 2085 N 3 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 3 3 Hawthorne Avenue in Melrose Park for $2.7 million. The company, 2 1.0 2 2 which occupied theChicago neighboring South building, plans to develop the I 290 South North Suburbs Southeast Wisconsin 1 Millionsof SF Millionsof SF Millionsof SF property into a manufacturingMillionsof SF 0.5 campus. 1 1 4 16% 2 12% 2 12% 3 16% 0.03 14% 0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 1 10% Absorption and Forecast2 2009 2010 2011 2012 2013 2014 2015 2016 12% 1 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% te te te te New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 10% 0 8% The I-290 North submarket0 was the only submarket to record 8% 0 8% 1 8% -1 6% negative net absorptionChicago-1 duringSouth 2016. The net absorption total of 6% I 290 South North Suburbs Southeast Wisconsin VacancyRa VacancyRa VacancyRa VacancyRa negative 864,962 square-2 feet was largely due to the demolition 4% -12 12%6% 0 4% 4 16% -22 12%4% 3 16% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) of several large propertiesNetAbsorption (millions ofSF) -33 in the submarket and tenants vacating 14%2% -2 4% -31 10%2% 0% previously occupied space.-42 12%0% 1 10% -12 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te 1 10% te 0 8% 3 3.0 4 The future of the vacancy40 rate in the I-290 North submarket 8% 0 8% 1 8% -1 6% -1 6% 2.5 VacancyRa VacancyRa VacancyRa depends largely on tenant3 demand, as three speculative facilities VacancyRa 3 -2 4% 2-1 6% 2.0 0 4% will be completed in early 2017. -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -32 2% 1.5 2 -4 0% -21 4% -31.0 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 4 3 3.0 4 Significant Lease 0and Sale Activity 0 0.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 3 3 New Leasing Volume User Sale Volume 2 New Leasing Volume User Sale Volume 2.0 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume I-290 North | Top 22016 Transactions 1.5 2 TENANT/BUYERI 88 SIZE (SF) ADDRESS 1 TYPE QTR 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Prudential Investment Management,Millionsof SF 3 Inc. 588,233 525 Northwest Avenue, Northlake20% Investment sale Q1 0.5 0 0 0.0 0 RCB Equities LLC 534,000 5 properties, Melrose Park Investment portfolio sale/redevelopment Q2 2 2009 2010 2011 2012 2013 2014 2015 2016 16% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

te New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Digital Realty 1 New Leasing487,700 Volume User2721-2727 Sale Volume Edgington Street,12% Franklin Park Investment portfolio sale/redevelopment Q3 AEW Capital Management, L.P. 325,045 3708 N River Road, Franklin Park Part of a 6-property investment portfolio sale Q4 I 88 0 8% Bridge Development Partners 218,255 9555 & 9601-9657 Soreng Avenue,VacancyRa Schiller Park Investment portfolio sale/redevelopment Q2 -13 20%4%

Life Fitness Inc NetAbsorption (millions ofSF) 206,400 10600 W Belmont Avenue, Franklin Park Lease renewal Q3 -22 16%0% Life Fitness Inc 2009 2010 2011141,2052012 107012013 W2014 Belmont2015 Avenue,2016 Franklin Park New lease Q3 1 12% te Pilot Air Freight Corporation5 138,086 11600 Grand Avenue, Northlake New lease Q3 0 8% Fresenius Kabi USA LLC 4 108,464 2085 N Hawthorne Avenue, Melrose Park User sale Q3 VacancyRa

Just Manufacturing Inc 3-1 100,000 9301 King Street, Franklin Park4% User sale Q2 NetAbsorption (millions ofSF) 2 Viking Materials Inc -2 98,600 11305 Franklin Avenue, Franklin0% Park New lease Q2 2009 2010 2011 2012 2013 2014 2015 2016 Skyline Properties LLC Millionsof SF 1 89,546 9500 River Street, Schiller Park Investment sale Q1 5 0 4 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume 3

13 Research & Forecast2 Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume I-290 South

Vacancy and Supply Market Indicators Vacancy improved in the I-290 South market each quarter of 2016, I-290 SOUTH 2016 2015 2014 decreasing by an impressive 278 basis points over the course of VACANCY 6.49% 9.27% 6.78% the year to 6.49 percent. The I-290 South submarket witnessed its vacancy high point in the fourth quarter of 2015 when the NET ABSORPTION 1,540,870 -1,217,835 1,285,280 rate stood at 9.27 percent due to the completion of several large ASKING RENTAL RATE $5.34 $4.82 $4.50 speculative construction projects. The vacancy rate has now returned to its lowest level since the third quarter of 2014.

Despite the addition of 533,232 square feet of vacant space to the submarket due to new vacancies and the completion of a speculative construction project during the fourth quarter, total Morton vacant space in the I-290 South submarket decreased by 1.3 million Evanston Des Grove square feet during 2016 to 3.0 million square feet by the end of Plaines Niles Skokie December. Elk Grove Village Ohare Construction Activity 290 Int'l Airport Wood Dale The 282,933-square-foot speculative industrial warehouse at 7225 Bensenville Santa Fe Drive in Hodgkins was delivered during the fourth quarter, Franklin 90 the only I-290 South construction completion of 2016. The project Addison Park was developed by a joint venture between Cabot Properties and Car Elmhurst 94 Str 355 Melrose Seefried Properties and included 32’ clear heights, T-5 fluorescent Park Oak Park lighting, BNSF rail, and a 6B tax abatement. The only ongoing 290 development project is a 172,000-square-foot build-to-suit facility Westchester for shipping company FedEx. The project, located at 4800 S Central 294 Cicero Avenue in Forest View, is being developed by DCT Industrial and is 55 scheduled to be completed during the second quarter of 2017. Downers La Grange Chicago Midway Grove Airport Leasing and Sale Activity Burr Ridge Bedford Woodridge Park New leasing volume totaled 1.4 million square feet in 2016, a 123 Willow percent increase from the 2015 total of 608,000 square feet. This Springs Oak Lawn represents the greatest annual leasing tally recorded in the I-290Bolingbr South submarket’s recorded history. The largest new lease of the 57 year involved private assembly and contract packaging company 55 Assemblers, Inc. leasing the entire 353,322-square-foot building at Heights 8601 W 47th Street in McCook on a long-term basis. Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 2.0 15% 0 8% 1.0 14% 30 16% NetAbsorption (millions ofSF) 5 18% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -30 4% -0.5 0% -1 6% -1.5 4% 20 14% 1.5 12% 4 16% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12% te

3 14% te 10 12% te 80 te 4 1.0 9% 8 1.60.0 10% 0 10% 2 12% 60 3 0.5 6% 6 1.2-0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10%

40 2 0.0 3% 4 0.8-1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 -0.5 0% -1 6% 0.4-1.5 4% 20-30 4% Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

0 0 0 0.0 80 4 8 1.6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

60 New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume 6 New Leasing Volume User Sale Volume 1.2 New Leasing Volume User Sale Volume

40 2 4 0.8 Central DuPage Fox Valley I 80 O'Hare

3 14% 1.21 16% 6 21% 4 0.4 16% 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 0 12% 0 0 0.0 4 15% 2 12% 0.4 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te te 1 10% 1 10% 3 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0.0 10% 0 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa Central DuPage VacancyRa Fox Valley I 80 1 6% O'Hare -2 4% -1 6% -0.8 6% 1.2 16% 0 6 3%21% 4 16% NetAbsorption (millions ofSF)

3 14% NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF)

-2 4% -1.20.8 4%14% -1 5 0%18% -4 3 0%14% 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te te te te 2.0 6 1 10% 6 1 10% 3 12% 8 0.0 10% 0 8% 5 5 1.5 2 9% 0 8% 6 -1 6% VacancyRa VacancyRa

-0.4 8% 4 VacancyRa 4 VacancyRa 1 6% -2 4% 3 -1 6% 1.0 3 4 -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2 NetAbsorption (millions ofSF) 2 -2 4% 0.5-1.2 4% -1 0% 2 -4 0% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

0 0.0 0 0 6 2.0 6 8 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume 1.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 6 New Leasing Volume User Sale Volume 4 4

3 1.0 3 4 Chicago North I 290 North Lake County South Suburbs 2 2 2 10% 2 0.5 14% 2 16% 2 2 16% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 8% 10.0 12% 0 0 0 1 12% 1 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te 0 6% te 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% 0 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North I 290 North Lake County South Suburbs -1 4% -1 4% -2 2% -2 6% 2 10% 2 14% 2 16% 2 16% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 0% -3 4% -2 0% -2 0% 1 8% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% te te te 2.50 6% te 4 0 10% 5 5 0 8% 0 8% 2.0 4 4 -1 4% 3 -1 8% VacancyRa VacancyRa VacancyRa VacancyRa 1.5 3 -1 4% 3 -1 4% -2 2% 2 -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1.0NetAbsorption (millions ofSF) 2 2 -3 0% 1 -3 4% -2 0% -2 0% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

0.0 0 0 0 2.5 4 5 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2.0 4 4 Sale activity consisted of several multi-propertyNew Leasing Volume portfolioUser Sale Volume sales, Vacancy3 RateNew & Leasing Net Volume AbsorptionUser Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume investment sales, and user1.5 sales. The largest sale transaction of 3 3 I-290 2South the year involved ChicagoHeitman 1.0South purchasing two recently-constructed I 290 South North Suburbs2 Southeast2 Wisconsin 4 16% 2 1 12% 2 12% 3 16% Millionsof SF Millionsof SF Millionsof SF buildings in McCook. DermodyMillionsof SF 0.5 Properties sold the portfolio that 1 1 included the 353,322-square-foot3 building at 8601 W 47th Street 14% 0.0 0 1 0 10% 0 2 12% 1 10% 2 12% and the 312,289-square-foot2009 building2010 at 20118701 2012W 47th2013 Street2014 for2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te te 1 10% te 0 8% $59.9 million in April. The buildings Newwere Leasing vacant Volume atUser the Sale time Volume of the New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% 0 8% 1 8% -1 6% sale. -1 6% VacancyRa VacancyRa VacancyRa Chicago South VacancyRa I 290 South North Suburbs Southeast Wisconsin -2 4% -1 6% 0 4% -2 4% User sale volume totaled 884,185 square feet in 2016, more than 2 12% 2 12% 3 16%

4 16% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% double the user sale volume-4 3 of 325,854 square feet recorded 0%14% -2 4% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 in 2015. Best Food Services,2 2009 Inc.2010 was2011 the buyer2012 in2013 the largest2014 2015 2016 12% 1 10% 2 12% te te te user sale of the year,4 a 1two-property portfolio sale purchased 10% te 3 3.00 8% 4 0 8% from Venture One Real 0Estate in January. The sale included the 8% 2.5 1 8% -1 6% 3 3 -1 6% VacancyRa

2 VacancyRa VacancyRa 208,713-square-foot building at 6400-6480 W 51st Street and the VacancyRa 2.0 -2 4% -1 6% 0 4% 185,198-square-foot building2 at 6500 W 51st Street in Forest View. 1.5-2 4% 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% New1 Lease & User Sale Volume 1.0 -4 0% -2 4% -3 2% 1 -1 0%

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF I-290 South Absorption and Forecast2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 4 3 3.0 4 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Net absorption totaled 1.5 million square feet in 2016, a significant 2.5 3 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume turnaround from the net absorption total of negative 1.2 million 2 2.0 square feet in 2015. This2 represents the second greatest absorption 1.5 2 I 88 tally in the I-290 South submarket since 2000, and the greatest 1 1.0 3 20% 1

1 Millionsof SF Millionsof SF Millionsof SF since 2012. Millionsof SF 0.5

2 0 16% 0 0.0 0 The I-290 South vacancy rate2009 is 2010expected2011 to 2012continue2013 to 2014decline2015 in 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% te 2017 as demand for modern space resultsNew Leasing Volumein additionalUser Sale Volumeabsorption New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume among the submarket’s0 recently completed speculative facilities. 8% VacancyRa I 88 -1 4% 3 20% NetAbsorption (millions ofSF) Significant Lease-2 and Sale Activity 0% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

I-290 South | Top5 20161 Transactions 12% te

TENANT/BUYER4 SIZE (SF) ADDRESS TYPE QTR 0 8% VacancyRa Heitman 3 665,611 8601-8701 W 47th Street, McCook 2-property investment portfolio sale Q2 -1 4%

Assemblers, Inc. 2 NetAbsorption (millions ofSF) 353,322 8601 W 47th Street, McCook New lease Q3 -2 0% Morgan Stanley Realty Millionsof SF Advisors1 2009 Inc 2010 226,1962011 2012 2013Elk Grove2014 Village,2015 McCook2016 3-property investment portfolio sale Q4 0 Best Food Services, Inc. 5 208,713 6400-6480 W 51st Street, Forest View User sale Q1 2009 2010 2011 2012 2013 2014 2015 2016 4 Best Food Services, Inc. New Leasing185,198 Volume User6500 Sale Volume W 51st Street, Forest View User sale Q1 John Kurpiel 3 179,312 5950 W 51st Street, Forest View User sale Q1 Gramercy Property Trust 2 152,670 8901 W 47th Street, McCook Investment sale Q3

Undisclosed Millionsof SF 1 156,621 825 E 26th Street, La Grange Park Investment sale Q4 GPA Specialty Substrate Solutions0 156,214 8701 W 47th Street, McCook New lease Q2 2009 2010 2011 2012 2013 2014 2015 2016

Graymills New119,817 Leasing Volume User2601 Sale S Volume 25th Avenue, Broadview User sale Q2 GFH Capital Ltd 119,538 2000 S 25th Avenue, Broadview Part of a 15-property investment portfolio sale Q4 Power Stop LLC 125,515 7950 Joliet Road, McCook New lease Q4

15 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International I-55 Corridor

Vacancy and Supply Market Indicators Despite improving during the first three quarters of 2016, the I-55 CORRIDOR 2016 2015 2014 I-55 Corridor vacancy rate increased by 236 basis points during VACANCY 9.42% 9.38% 10.88% the fourth quarter to 9.42 percent, a rate four basis points above the 9.38 percent rate recorded at the end of 2015. The significant NET ABSORPTION 4,482,121 3,839,410 1,637,879 increase recorded during the fourth quarter was due to the ASKING RENTAL RATE $5.80 $5.07 $4.69 completion of seven speculative construction projects, all of which were at least partially vacant when delivered. Also affecting the rate were multiple new vacancies, the largest of which involved Melrose Reviva Logistics, LLC moving out of its 405,844-square-foot facility at 1000 S Veterans Parkway in Bolingbrook for its new facility in Monee’s Bailly Ridge Corporate Center. The I-55 Corridor vacancy rate is subject to swings due to the large average size 294 of transactions in the submarket and the amount of speculative 88 construction underway. Downers Grove Naperville Burr Vacant supply increased during the fourth quarter by 2.2 million A Ridge square feet to 8.3 million square feet, a 6.56 percent increase over Woodridge the 7.7 million square feet vacant in the I-55 Corridor at the end of 2015. The largest swing in vacant space occurred in Romeoville, Bolingbrook where 1.6 million square feet of new vacant space was introducedOsw ego during the fourth quarter due to vacant speculative construction completions. As a result, the vacancy rate in Romeoville increased 55 Palos dramatically from 3.98 percent to 9.50 percent in one quarter. Romeoville Users looking for vacant spaces 300,000 square feet and larger 355 currently have five options in the I-55 Corridor, as two speculative Plaineld Lockport facilities that can accommodate tenants that size were completed Crest during the fourth quarter. Hill Park Construction Activity Joliet Mokena A total of 22 industrial construction projects were completed in the New Lenox I-55 Corridor during 2016 totaling 5.1 million square feet. Among these deliveries, 19 were developed on a speculative basis with no tenant commitment in place, accounting for 89.7 percent of the space completed in 2016. These new speculative facilities remained 76.7 percent vacant at the end of the year. The largest delivery was the 787,499-square-foot speculative facility developed by Panattoni in Romeoville’s Southcreek Corporate Center that was completed during the fourth quarter.

At the end of 2016, 10 development projects totaling 3.0 million square feet remained under construction, eight of which started construction during the fourth quarter. The largest active construction project is a 615,160-square-foot build-to-suit facility Vacancy Rate & Net Absorption for electronics and appliance retailer Best Buy at 1500 Remington I-55 Corridor Chicago Metro Drive in Bolingbrook’sElgin Carlow Corporate Center being developed by I 55 Northwest Suburbs 2.0 15% 30 Northern16% Builders. The developer also started construction during 5 18% 1.0 14% 20 the fourth14% quarter on a1.5 302,354-square-foot speculative project in 12% 4 16% 0.5 12% te

3 14% te 10 12% te

the same businesste park. 1.0 9% 0.0 10% 0 10% 2 12% Leasing and Sale0.5 Activity 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8%

New leasing activity NetAbsorption (millions ofSF) for 2016 totaled 5.6 million square feet in the NetAbsorption (millions ofSF) 2.0 15% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 5 18% 1.0 14% -30 I-55 Corridor,4% a 9.57 percent-0.5 decrease compared to the 6.2 million- 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 4 16% 20 2009 2010 2011 2012 2013 2014 2015 square-foot2016 14% new leasing1.5 volume recorded in 2015. 76.5 percent 12% 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12% te

3 14% te 10 12% 4 te 80 te 8 1.6 of this activity occurred1.0 during the first two quarters of the year, 9% 0.0 10% 0 10% 2 12% when new leasing activity3 totaled 4.3 million square feet. During the 6 1.2 60 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 fourth quarter,8% VacancyRa the new leasing volume totaled only 369,815 square 1 10% 2 0.8 40 0.0 3% 4 -1.0 6% -20 feet. The6% largest new lease of the year involved e-commerce giant 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Lease & User Sale Volume Amazon.com leasing the1 767,161-square-foot building at 1100 115th 0.4 20 Millionsof SF 2

-0.5 0% Millionsof SF Millionsof SF Millionsof SF -30 4% I-55 Corridor-1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 Street2016 in Romeoville’s Windham2009 Lakes2010 Business2011 2012 Park.2013 Several2014 2015large 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 lease renewals were signed4 during 2016 as well, including Sears 8 1.6 80 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Logistic Services and Diageo NorthNew America, Leasing Volume Inc.User both Sale Volume renewing New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 leases for more than 800,000 square feet. 6 1.2

Central 40DuPage Fox Valley2 I 80 4 O'Hare 0.8 Several investment and user sales were completed in 2016. The user 3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF sale volume totaled 580,561 square feet for the year, a 32.79 percent 0.8 14% 5 18% 3 14% 2 decrease12% when compared0 to the 2015 user sale volume of 863,864 0 40 15% 20.0 12% 0.4 12% te te

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015square2016 feet.te The largest user sale of the year involved VPET USA, 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% New Leasing Volume User Sale Volume Inc. purchasing the 133,705-square-foot0.0 New Leasing building Volume atUser 61 Sale Paragon Volume Road 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa in Romeoville during the third quarter. VacancyRa -0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 Absorption14% and Forecast1.2 16% 6 21% 4 16% -1.2 4% -1 0% -2 4% 5 18% -4 3 0%14% 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 Significant new leasing activity during the first half of the year and 4 15% 2 12% 0.4 12% te te

2.0 te 6 te 6 8 1 10% 1 build-to-suit10% construction completions resulted in a net absorption 3 12% 5 0.0 10% 5 0 8% total of 4.5 million square1.5 feet for the year, a 16.74 percent increase 2 9% 6 4 0 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa over 2015’s netVacancyRa absorption total of 3.8 million square feet. 1 6% 3 1.0 3 4 -2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2NetAbsorption (millions ofSF) 2 The vacancy rate is expected0.5 to decline in 2017 as demand for 2 Millionsof SF Millionsof SF

-1.2 4% -1 0% Millionsof SF Millionsof SF -2 4% -4 0% 1 1 2009 2010 2011 2012 2013 2014 2015 recently2016 completed speculative2009 buildings2010 2011 remains2012 swift,2013 despite2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 additional ongoing speculative2.0 development. 6 8 6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 6 4 Significant Lease and Sale Activity 4 1.0 Chicago3 North I-55 Corridor I| 290 Top North 2016 Transactions Lake County3 South Suburbs4 2 22 10% 2 14% 2 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF

Millionsof SF TENANT/BUYER SIZE (SF) ADDRESS TYPE QTR 1 1 1 8% 1 12% 0 Sears Logistic Services 0.0 814,848 1701 W Normantown Road, Romeoville 10 Lease renewal Q312% 10 12% te

2009 2010 2011 2012 2013 2014 2015 2016 te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 Diageo 6%North America, Inc.0 800,000 1701 Remington Boulevard, Bolingbrook10% Lease renewal Q2 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% Amazon.com 767,161 1125 Remington Boulevard, Romeoville New lease Q2 -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North Best Buy I 290 North 615,160 1500 Remington Drive, Bolingbrook Lake-1 CountyBuild-to-suit lease Q24% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 KeHE Distributors10% Holdings/2 546,453 900 N Schmidt Road, Romeoville14% 2 Sale-leaseback Q216% 2 16% -3 Gramercy0% Property Trust-3 4% -2 0% -2 0% 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Industrial Property Trust 541,123 1101-1105 W Taylor Road, Romeoville 1 Investment sale Q212% 1 12% te te te 2.5 te 4 5 5 0 RJW Transport,6% Inc. 0 512,265 14908 Gougar Road, Lockport 10% New lease Q1 4 0 8% 4 0 8% 2.0 3 -1 The Room4% Place -1 453,568 1120-1140 Remington Boulevard,8% Romeoville New lease Q2 VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 Industrial Property Trust2 443,620 1075 W Taylor Road, Romeoville -1 Part of a 7-property investment portfolio sale Q24% -1 4% -2 2% -2 6% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) Central American 1 419,317 555 St. James Gate, Bolingbrook New lease Q2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1 -2 0% 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 Ghirardelli2016 Chocolate Company2009 2010382,2282011 2012 7002013 S Weber2014 Road,2015 Bolingbrook2016 New2009 lease2010 2011 2012 2013 2014 2015 2016 Q1 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 4 2.5 2009 2010 2011 2012 2013 2014 2015 LG2016 Electronics 2009 2010 363,2242011 2012 147462013 S2014 Gougar2015 Road, 2016Lockport 5 2009New lease2010 2011 2012 2013 2014 2015 2016 Q1 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3 1.5 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial 3 | Colliers International 3 Chicago South 17 I 290 South2 North Suburbs Southeast Wisconsin 1.0 2 2 2 12% 2 12% 3 16% 4 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 3 14% 1 10% 20.0 12% 10 10% 0 20 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 0 8% 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 4 2%16% 2 12% 2 12% 3 16% -2 4% -4 3 0%14% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 1 10% 2 12% te te te 4 te 3 3.0 4 1 10% 0 8% 0 8% 0 8% 2.5 1 8% 3 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa VacancyRa -2 4% -1 6% 1.5 2 0 4% 2 -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1 1.0 1

1 Millionsof SF

-2 4% Millionsof SF Millionsof SF Millionsof SF -3 2% -1 0% -4 0% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 3 3.0 4 4 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 2 2.0

I 88 2 1.5 2 1 3 20% 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

NetAbsorption (millions ofSF) 3 20% -2 0% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

5 te 1 12% 4 0 8%

3 VacancyRa -1 4% 2 NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume I-80 Joliet Corridor

Vacancy and Supply Market Indicators The I-80 Joliet Corridor vacancy rate improved by 152 basis I-80 JOLIET CORRIDOR 2016 2015 2014 points over the course of 2016 to 4.75 percent, the lowest rate VACANCY 4.75% 6.27% 9.21% ever recorded in the submarket, and the first time the vacancy rate has dropped below the 5.0 percent threshold. Just over six years NET ABSORPTION 5,036,293 4,224,353 2,836,632 ago, the vacancy rate peaked at 20.52 percent, representing an ASKING RENTAL RATE $4.32 $4.21 $3.47 improvement of 15.77 percent. Prior to the recession, the lowest vacancy rate recorded in the I-80 Joliet Corridor was 7.08 percent during the second quarter of 2004.

Total vacant supply decreased to 3.7 million square feet during the fourth quarter of 2016, a total 14.42 percent below the 4.6 million Joliet ena square feet of vacant space available at the end of 2015. The last time so little vacant space was available was during the third quarter of 2004, when vacant supply totaled 3.2 million square feet. Despite the completion of several speculative construction projects over the past few years, the amount of vacant space in the I-80 Minooka Joliet Corridor has decreased, indicating that demand for space has 80 Channahon kept up with new supply. Elwood

Construction Activity Morris Seven new buildings were completed in the I-80 Joliet Corridor during 2016 totaling 3.9 million square feet. The largest delivery 55 was a 1.1-million-square-foot build-to-suit facility for Saddle Creek Logistics in Elwood’s CenterPoint Intermodal Center. Two speculative projects were delivered in 2016, including a 746,772-square-foot building developed by Hillwood Development Company in Joliet’s Laraway Crossings Business Park that was leased by Amazon.com during the second quarter. A 318,562-square-foot building developed by Clarion Partners in Shorewood’s Heartland Corporate Center remains vacant.

Twelve development projects are currently under construction totaling 9.3 million square feet. Six buildings started construction during the fourth quarter of 2016 alone. The largest project is a 1.5-million-square-foot build-to-suit facility for food company General Mills Operations in Wilmington’s Ridgeport Logistics Center. Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin0.0 3% I 55 Northwest-1.0 Suburbs 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 12% 4 16% 0.5 12% 4 te 8 1.6 3 14% te 80 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 60 3 6 1.2 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 40 2 4 0.8 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 80 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 1.6 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume Six speculative projects are underwayNew Leasing totaling Volume 4.6User million Sale Volume square New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 Vacancy6 Rate & Net Absorption 1.2 feet, five of which will be greater than 700,000 square feet when I-80 Joliet Corridor Central DuPage40 completed in 2017.Fox Unless Valley2 promptly leased, this will add a large I 80 4 O'Hare 0.8 3 14% 1.2 16% 6 21% 4 16% amount of new vacant 1space to the market, likely resulting in an 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 increase12% in the submarket’s vacancy rate. 2 12% 0 0 4 0 15% 0.0 0.4 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% Leasing and Sale0.0 Activity 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa New leasingVacancyRa activity totaled 2.1 million square feet in 2016, less 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% than half of the 4.3 million-0.8 square feet of new leasing recorded in 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -2 2015. While4% fewer new-1.2 leases are typically signed in the I-80/Joliet 4% -1 0% -4 0% 5 18% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 Corridor 12%than the neighboring I-55 Corridor each year, the average 4 15% 2 12% 2.0 0.4 12% 6 te

te 8

6 te lease size tendste to be large, resulting in periods of significant new 1 10% 1 10% 3 12% 5 0.0 10% 5 leasing activity followed1.5 by periods of lower totals. The largest 0 8% 2 9% 6 4 0 8% 4 -1 6%

new lease of the year involved Amazon.com taking the recently- VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4 -2 4% -1 constructed6% speculative facility at 201 Emerald Drive in Joliet’s -0.8 6% New0 Lease & User Sale Volume 3% NetAbsorption (millions ofSF) 2 NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2%

2 NetAbsorption (millions ofSF) Laraway Crossings Business0.5 Park. 2 Millionsof SF Millionsof SF

I-80 Joliet Corridor Millionsof SF Millionsof SF -1.2 4% -1 0% 1 -2 4% 1 -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 The I-80/Joliet Corridor0.0 was home to many significant investment 0 0 6 2009 2010 2011 2012 2013 2014 2015 sales2016 in 2016. The largest2.0 2009 involved2010 Hillwood2011 2012 Development2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Corporation purchasing1.5 three fully-leased buildings and a land site 6 4 in April totaling 1.2 million square feet from CBRE Global Investors 4 1.0 Chicago3 North for $63 million. I 290 North Lake County3 South Suburbs4 2 2 10% 2 14% 2 2 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 Absorption8% and Forecast1 12% 0 0.0 1 0 12% 1 0 12% te te te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015Net2016 absorption6% totaled0 5.0 million square in 2016, a 19.22 percent 10% 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 increase4% from the 2015-1 net absorption tally of 4.2 million square 8% VacancyRa VacancyRa VacancyRa VacancyRa feet. Despite a decrease in new leasing volume, five build-to-suit -1 4% -1 4% Chicago-2 North 2% I 290-2 North 6% Lake County South Suburbs

projects totaling 2.8 NetAbsorption (millions ofSF) million square feet were completed, adding to NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% -3 the positive0% net absorption-3 total. 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 8% 1 12% 1 12% 1 12% 4 5 5 2.5 te te te

The I-80 Joliette vacancy rate is expected to increase in 2017 when 0 6% 0 10% several large speculative construction projects are completed, 4 4 2.0 3 0 8% 0 8% -1 adding a 4%significant amount-1 of new vacant space to the submarket 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 and providing users with2 multiple additional options for 300,000 -1 4% -1 4% 1.0-2 2% -2 6% 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) square feet or more. 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1 -2 0% 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2.5 2009 2010 2011 2012 2013 2014 2015 Significant2016 Lease 4and2009 Sale2010 Activity2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 I-80 Joliet Corridor3 | Top 2016 Transactions 1.5 3 3 Chicago South TENANT/BUYERI 290 South2 SIZE (SF) ADDRESS North Suburbs TYPE QTR Southeast Wisconsin 1.0 2 2 4 16% 2 12% 2 12% 3 16% Hillwood Developement Corporation1 1,231,950 3 buildings, Tinley Park 3-property investment portfolio sale Q2 Millionsof SF Millionsof SF Millionsof SF 3Millionsof SF 0.5 14% 1 1 Amazon.com 746,772 201 Emerald Drive, Joliet 1 New lease 10%Q2 1 10% 2 0.0 12% 0 0 2 0 12% te te te Global Logisticte Properties 746,772 201 Emerald Drive, Joliet Part of a 17-property investment portfolio sale Q4 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016 0 New Leasing Volume User Sale Volume MOM Brands/Post8% Holdings0 New Leasing Volume719,542User Sale Volume29700 S Graaskamp8% Boulevard, Wilmington New Newlease Leasing Volume User Sale Volume Q2 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa Batory FoodsVacancyRa 678,000 24827 W Lorenzo Road, Wilmington Build-to-suit sale Q2 -2 4% -1 6% 0 4% Chicago South I 290 South North-2 Suburbs 4% Southeast Wisconsin NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 Midwest2% Warehouse & Distribution System, Inc. 575,024 3451 S Chicago Street, Joliet User sale Q1 4 16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 Jacobson2016 Companies 2009 2010 2011 2012507,1872013 2014212282015 Frontage2016 Road, Shorewood 2009 2010Lease renewal2011 2012 2013 2014 2015 2016 Q1 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 2 12% 1 10% 2 12% IKEA 3 415,800 20901-21151 W Walter Strawn Drive, Elwood New lease Q2 te 3.0 4

4 te te 1 10% te 0 8% 2.5 0 Global Logistic8% Properties 0 411,840 2510-2520 W Haven 8%Avenue, Joliet Part of a 17-property investment portfolio sale Q4 1 8% 3 3 2 -1 6% -1 6% 2.0 VacancyRa VacancyRa VacancyRa Samsung ElectronicsVacancyRa 383,494 20901-21151 W Walter Strawn Drive, Elwood New lease Q2 2 -2 4% -1 6% 1.5 2 0 4% Cypress Medical Products 383,206 20901-21151 W Walter Strawn Drive, -2Elwood Lease renewal Q24%

1 NetAbsorption (millions ofSF) 1.0NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -4 Petco Animal0% Supplies -2 309,840 3801 Rock Creek Boulevard,4% Joliet 0.5-3 Lease renewal Q42% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 4 2009 2010 2011 2012 2013 2014 2015 2016 3 2009 2010 2011 2012 2013 2014 2015 2016 3.0 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 19 Research & Forecast2 Report | Fourth Quarter 2016 | Chicago / Industrial 2.0 | Colliers International I 88 2 1.5 2

3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

te 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa

I 88-1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 16% 5 1 12% te 4 0 8%

3 VacancyRa

2 -1 4% NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume I-88 Corridor

Vacancy and Supply Market Indicators The I-88 Corridor vacancy rate fluctuated during 2016, dipping as I-88 CORRIDOR 2016 2015 2014 low as 6.70 percent during the second quarter, before increasing VACANCY 7.33% 7.04% 6.61% significantly during the third quarter to 8.08 percent due to the completion of two large speculative construction projects. At the NET ABSORPTION 2,299,529 459,572 957,681 end of 2016, the vacancy rate stood at 7.33 percent, 29 basis points ASKING RENTAL RATE $4.45 $4.34 $4.21 above the 7.04 percent rate recorded at the end of 2015. Despite the increase, the vacancy rate remains 848 basis points below the peak 15.81 percent rate recorded at the end of 2009.

Total vacant supply increased to 5.4 million square feet during 2016, an 8.04 percent increase over the 5.0 million square feet le Dupage vacant in the I-88 Corridor at the end of 2015. For users looking St Charles Airport Addison for spaces 100,000 square feet or larger, there are currently only Carol 12 vacant options, while users looking for 250,000 square feet or Geneva 355 West ChicagoStream more have only four vacant spaces to choose from. Batavia Construction Activity estchester Eight new buildings totaling 2.7 million square feet were completed North Aurora 88 in the I-88 Corridor during 2016. Five of these projects were Downers Grove build-to-suit facilities completed during the first half of theSugar year, Gr ov Naperville Aurora the largest being a 499,140-square-foot building developed by Duke Woodridge Realty Corporation for office product manufacturer Fellowes Inc. at Montgomery 2850 Duke Parkway in Aurora’s Butterfield Corporate Park. Three speculative projects totaling 1.2 million square feet were delivered, Bolingbrook only one of which has since been leased. Amazon.com committed Oswego to a 402,860-square-foot building developed by Duke Realty 55 Corporation at 4200 Ferry Road in Aurora. Yorkville Romeoville 355 Duke has additional speculative projects underway in the Butterfield park as well, including a 954,720-square-foot facility that was pre- Lockport leased to the very active Amazon.com during the fourth quarter. Crest Additionally, Planes & Sabatalo Enterprises, Ltd. is expanding its Hill existing facility at 1100 Bilter Road in Aurora by 40,000 square feet. ena Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10%

Chicago Metro Elgin0.0 3% I 55 Northwest-1.0 Suburbs 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 20 14% 1.5 12% 4 16% 0.5 12% 80 4 8 1.6 te

3 14% te 10 12% te te 1.0 9% 0.0 10% 60 0 10% 3 6 2 12% 1.2 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 40 2 4 0.8 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 80 2009 2010 2011 2012 2013 2014 2015 2016 4 8 1.6 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 6 1.2

Central DuPage Fox Valley I 80 O'Hare 40 2 4 0.8 3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF 3 Millionsof SF 0.8 14% 5 18% 14% 2 12% 2 12% 0 4 15% 0 0.4 12% 0 0.0 te te te te 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 3 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 0.0 10% New Leasing Volume User Sale Volume 0 8% New Leasing Volume User Sale Volume 2 New Leasing Volume User Sale Volume 9% New Leasing Volume User Sale Volume 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% -2 4% Central-1 DuPage 6% Fox Valley I 80 O'Hare -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -2 4% -1.2 4% -1 0% -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.8 14% 5 2009 2010 2011 2012 2013 2014 2015 2016 18% 3 2009 2010 2011 2012 2013 2014 2015 2016 14% 2 12% 4 15% 2 12% 6 2.00.4 12% 6 8 te te te te 1 10% 1 10% 5 5 3 12% 1.50.0 10% 6 0 8% 4 4 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1.0 3 1 6% 4 3 -2 4% -1 6% -0.8 6% 2 2 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 -2 4% -1.2 4% 1 -1 0% -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 2.0 6 8 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume 1.5 6 4 4 Chicago North I 290 North Lake County South Suburbs 3 1.0 3 4 2 14% 2 16% 2 16% 2 2 10% 2 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 8% 1 12% 1 12% 1 12% 0 0.0 0 0 te te te te 0 2009 2010 2011 2012 2013 2014 2015 2016 6% 0 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 8% 0 8% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa -1 4% -1 4% Chicago-2 North 2% I 290-2 North 6% Lake County South Suburbs NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% -3 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 8% 1 12% 1 12% 1 12% 2.5 4 5 5 te te te 0 6% te 0 10% 4 4 2.0 3 0 8% 0 8% -1 8% 1.5-1 4% 3 3 VacancyRa VacancyRa VacancyRa VacancyRa 2 -1 4% -1 4% 1.0-2 2% -2 6% 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 -3 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 4 2.0 3

1.5 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin 1.0 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 3 0.5 14% 1 1 1 10% 2 12% 1 10% 2 12% 0.0 0 0 0 te te te 1 2009 2010 2011 2012 2013 2014 2015 2016 10% te 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016 0 8% 0 8% 1 8% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa -2 4% -1 6% 0 4% Chicago South I 290 South North-2 Suburbs 4% Southeast Wisconsin NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 4 16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 2 12% 1 10% 2 12% 4 3 3.0 4 te te te 1 10% te 0 8% 2.5 3 0 8% 0 8% 3 1 8% 2 2.0-1 6% -1 6% VacancyRa VacancyRa VacancyRa 2 VacancyRa 1.5 2 -2 4% -1 6% 0 4% -2 4% 1 1.0 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -4 0% -2 4% 0.5-3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 3 3.0 4 New Leasing Volume User Sale Volume Leasing and Sale Activity Vacancy RateNew & Leasing Net Volume AbsorptionUser Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 I-88 Corridor 2 2.0 I 88 New leasing activity totaled 2.4 million square feet in the I-88 2 1.5 2 Corridor during 2016, slightly below the 2015 tally of 2.6 million 3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF square feet. The fourth quarter of 2016 witnessed 64.02 percent Millionsof SF 0.5 2 16% of this volume, as 1.5 million square feet of new leases were 0 0 0.0 0 te signed between October and December. This was primarily due to 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Amazon.com signing the submarket’s two largest leases (mentioned 0 8% above) in Aurora’s Butterfield Business Park. VacancyRa I 88-1 4% NetAbsorption (millions ofSF) 3 20% User sale volume totaled 400,987 square feet in 2016, a 38.53 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 percent increase over 2015’s user sale activity. The largest user 2 16% sale involved auto retailer The Napleton Group purchasing the 5 1 12% te 157,200-square-foot building at 220 Brookshire Court in Naperville. 4

3 0 8% Absorption and Forecast VacancyRa New2 -1 Lease & User Sale Volume 4% NetAbsorption (millions ofSF)

I-88Millionsof SF 1 Corridor Net absorption totaled 2.3 million square feet in 2016, more than -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 quadruple the 459,572-square-foot net absorption total for 2015. 0 This was due to significant new leasing activity and the completion 5 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume of five build-to-suit facilities totaling 1.5 million square feet. 4

The vacancy rate is expected to decrease throughout 2017, as 3 demand for space will result in continued absorption of vacant 2 space. Additionally, no speculative development projects are Millionsof SF 1 currently under construction. 0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Significant Lease and Sale Activity I-88 Corridor | Top 2016 Transactions

TENANT/BUYER SIZE (SF) ADDRESS TYPE QTR Amazon.com 954,720 1 Duke Parkway, Aurora New lease Q4 Amazon.com 402,860 4200 Ferry Road, Aurora New lease Q4 JLL Income Property Trust, Inc. 304,560 2570 Orchard Gateway Road, Aurora Investment sale Q2 Rockpoint Logistics 291,552 901-997 Bilter Road, Aurora Lease renewal Q1 Clarion Partners 275,422 1405 Sequoia Drive, Aurora Investment sale Q1 CyrusOne, Inc./GFX Corporation 260,428 2905 Diehl Road, Aurora Sale-leaseback Q2 IPT High grove DC Holdco LLC 203,500 140 Ambassador Drive, Naperville Investment sale Q4 GEA Farm Technologies, Inc. 163,915 1880 Country Farm Drive, Naperville Lease renewal Q2 Cabot Properties, Inc. 163,915 1880 Country Farm Drive, Naperville Investment sale Q3 Cherryman Industries 160,047 2413 Prospect Drive, Aurora New lease Q1 Thriftbooks 160,000 2413 Prospect Drive, Aurora New lease Q2 Nexeo Solutions, LLC 157,680 Aucutt Road, Montgomery Build-to-suit lease Q3 The Napleton Group 157,200 220 Brookshire Court, Naperville User sale Q2

21 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International Lake County

Vacancy and Supply Market Indicators The Lake County vacancy rate decreased by 159 basis points to LAKE COUNTY 2016 2015 2014 8.74 percent over the course of 2016. This represents the lowest VACANCY 8.74% 10.33% 10.00% vacancy rate in the submarket since the second quarter of 2007 when it dipped to 8.31 percent during the second quarter of 2007, NET ABSORPTION 1,572,707 568,915 -72,140 and is now 624 basis points below the peak rate of 14.98 percent ASKING RENTAL RATE $6.00 $5.39 $5.19 recorded during the second quarter of 2010. Despite this significant improvement, the Lake County vacancy rate remains the sixth highest among the 22 submarkets tracked.

Westosha A total of 2.1 million square feet of vacant space was introduced Airport Pleasant Prairie to the submarket in 2016 through tenants vacating space and WISCONSIN speculative construction completions. However, enough new leases, lease expansions, and user sales were completed during the year to ILLINOIS result in a reduction in the vacant supply to 6.3 million square feet Zion from 7.4 million square feet at the end of 2015. There are currently Waukegan only five vacant spaces 200,000 square feet or larger available in Regional Airport the submarket. The largest is the 363,027-square-foot building at Fox Lake 800 S. Northpoint Boulevard in Waukegan’s Northpoint Business Park purchased in December by Venture One Real Estate. Waukegan McHenry Grayslake Construction Activity 94 Two construction projects were completed during 2016 in Lake County. The largest was a 626,848-square-foot speculative facility developed at 1750 Bridge Drive in Waukegan’s Bridge Point Mundelein North business park. The building was completed during the first Vernon Hills Lake Forest quarter and leased by Amazon.com during the fourth quarter. A 20,000-square-foot build-to-suit facility was also delivered for bread, cake, and cookie distributor Bimbo Bakeries at 845 Telser Lake Zurich Highland Park Road in Lake Zurich. Bualo Grove Three projects are currently under construction. The largest is the second building in Waukegan’s Bridge Point North business park, a 400,734-square-foot speculative facility that is expected to be completed in early 2017. A 157,500-square-foot speculative building is being developed by Ridgeline Property Group in Buffalo Grove’s Corporate Grove Business Park. Finally, a 42,537-square-foot build- to-suit facility for distribution company Reinders, Inc. is nearing completion at 913 Tower Road in Mundelein. Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 12% 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12%

4 te

3 14% te 10 12% 8 te 1.6 80 te 1.0 9% 0.0 10% 0 10% 2 12% 60 3 6 1.2 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 40 2 4 0.8 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF 2 Millionsof SF -0.5 0% Millionsof SF Millionsof SF -30 4% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 4 80 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 1.6 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 6 1.2

Central DuPage40 Fox Valley2 I 80 4 O'Hare 0.8

3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% 0 0 4 0 15% 2 0.0 12% 0.4 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% New Leasing Volume User Sale Volume 0.0 New Leasing Volume User Sale Volume 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -1.2 4% -1 0% -4 0% -2 4% 5 18% 3 14% 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 4 15% 2 12% 0.4 12% te 2.0 6 te 8 te 6 te 1 10% 1 10% 3 12% 5 0.0 10% 5 0 8% 1.5 2 9% 6 4 0 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4 -2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2 NetAbsorption (millions ofSF) 2 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -1.2 4% -1 0% -4 0% 1 -2 4% 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 2.0 6 6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Leasing and Sale Activity1.5 Vacancy Rate & Net Absorption 6 4 4 Lake County Chicago3 North New leasing volumeI 290 Northin 1.0Lake County totaled 2.3 million square Lake County3 South Suburbs4 2 2 10% 2 14% 2 2 16% 2 16% feet in 2016, a 17.19 percent0.5 increase compared to the new 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 leasing8% volume of 2.0 1million square feet recorded in 2015. 12% 0.0 1 0 12% 1 12% 0 Nearly 78 percent of this activity occurred during the first and 0 te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 fourth quarters6% of the0 year, primarily due to the completion of 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 significant4% leases including-1 Amazon.com leasing the recently- 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North completed 626,848-square-footI 290 North speculative facility at 1750 Bridge Lake-1 County 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 Drive in 10%Waukegan and 2Handi-Foil Corporation leasing the entire 14% 2 16% 2 16% -3 213,141-square-foot0% building-3 at 5650 CenterPoint Court in Gurnee. 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% 1 12% te

4 te te 2.5 te 5 5 0 The most6% significant sale0 transactions in Lake County during 2016 10% 4 0 8% 4 0 8% 2.0 were investment sales,3 the largest of which involved Venture One -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 Real Estate purchasingVacancyRa the 365,366-square-foot vacant building at 3 3 2 -1 4% -1 4% -2 800 S. Northpoint2% Boulevard-2 in Waukegan’s Northpoint Business 6% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Lease & User Sale Volume Park. User sale activity1 for the year totaled 460,708 square feet, Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% Lake1 County-2 0% 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 only2016 44.5 percent of the 1.02009 million2010 square2011 feet2012 of user2013 sales2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 recorded in 2015. The0 largest user sale of the year involved AB 0 0 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 Specialty Silcones purchasing the 71,156-square-foot building at 2.0 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 3733-3737 Hawthorne3 Court in Waukegan. 1.5 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin 1.0 Absorption and Forecast 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 3 14% The Lake County submarket recorded 1.6 million square feet of 1 10% 2 0.0 12% 1 0 10% 0 2 0 12% te te te 2009 2010 2011 2012 2013 2014 2015positive2016 nette absorption in 2016,2009 the2010 greatest2011 net2012 absorption2013 2014 tally2015 in 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 0 8% 0 New Leasing Volume User Sale Volume the submarket8% since 2011.0 The majorityNew Leasing of thisVolume positiveUser Sale absorption Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% -1 took place6% during the first and fourth quarters of the year due to VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% significant leasing activity. -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 4 2%16% 2 12% 2 12% 3 16% -4 The vacancy0% rate is expected-2 to remain relatively stable in Lake 4% -3 2% -1 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 County throughout12% 2017.1 While demand for space is expected to 10% 2 12%

3 te 3.0 te 4 te 4 te 1 continue,10% the completion of two speculative construction projects 0 8% 0 8% 0 8% 2.5 1 8% 3 may counteract the impact of continued new leasing and user sale 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa activity. VacancyRa 2 -2 4% -1 6% 1.5 2 0 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF

Millionsof SF -2 4% -4 Significant0% Lease and Sale Activity 0.5-3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 3 4 2009 2010 2011 2012 2013 2014 2015 Lake2016 County | Top 20162009 Transactions2010 2011 2012 2013 2014 2015 2016 3.0 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume TENANT/BUYER New Leasing Volume UserSIZE Sale (SF) Volume ADDRESS 2.5 New Leasing Volume UserTYPE Sale Volume QTR New Leasing Volume User Sale Volume 3 3 Amazon.com 2 626,848 1750 Bridge Drive, Waukegan 2.0 New lease Q4 I 88 2 1.5 2 ULINE 395,000 30120 Skokie Highway, North Chicago Lease renewal Q2 3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF Venture One Real Estate 365,366 800 S Northpoint Boulevard, Waukegan0.5 Investment sale Q4 2 16% 0 Westmount Realty Capital,0 LLC 350,831 1947-2005 Delany Road, Gurnee 0.0 Part of a 19 property investment portfolio sale Q2 0

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% New Leasing Volume User Sale Volume Transwestern Investment Group New Leasing Volume208,800User Sale Volume3800-3898 Sunset Avenue, Waukegan Part ofNew a Leasing5-property Volume investmentUser Sale Volume portfolio sale Q2 New Leasing Volume User Sale Volume 0 8%

Handi-Foil CorporationVacancyRa 213,141 5650 CenterPoint Court, Gurnee New lease Q1 I 88 -1 Visual 4%Pak Company 207,523 3601 Skokie Highway, North Chicago New lease Q1

NetAbsorption (millions ofSF) 3 20% -2 Homewerks0% Worldwide, LLC 190,925 45-85 Albrecht Drive, Lake Bluff New lease Q1 2 2009 2010 2011 2012 2013 2014 2015 2016 16% Acorn, Inc. 161,200 5605 CenterPoint Court, Gurnee Lease expansion/renewal Q3

5 te 1 12% Focus Foodservice, LLC 150,192 451 Trumpet Drive, Zion New lease/expansion in building Q2 4 0 Founders8% Properties, LLC/Laser Precision 129,039 2400 Commerce Drive, Libertyville Sale-leaseback Q2 3 VacancyRa -1 4% 2 Trifinity Partners 120,249 2431 N Delany Road, Waukegan New lease Q2 NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume 3 23 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International 2

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume North Suburbs

Vacancy and Supply Market Indicators The North Suburbs vacancy rate ended 2016 at 5.07 percent, a NORTH SUBURBS 2016 2015 2014 decrease of 134 basis points since the end of 2015, and a rate VACANCY 5.07% 6.41% 5.36% now less than half the peak 10.38 percent rate recorded during the first quarter of 2011. The vacancy rate has not been this low in the NET ABSORPTION 944,295 -531,566 -202,347 North Suburbs since the third quarter of 2001, when it measured ASKING RENTAL RATE $5.42 $5.18 $4.71 4.87 percent.

At the end of 2016, a total of 2.9 million square feet were vacant V in the submarket, the first time this figure has dropped below 3.0 million square feet since 2001. Despite 1.2 million square feet of new vacant space being introduced through tenants vacating space, Bualo Highland Park new leasing and user sale activity outweighed the impact of these Grove new vacancies, resulting in an overall decrease in the amount of vacant space available in the submarket. For users looking Glencoe for 100,000 square feet or more, only seven vacant options are Northbrook currently available. Chicago Executive Airport 94 Construction Activity 294 Morton Grove Evanston The North Suburbs submarket is considered an “infill” Des construction market, meaning any new development projects Plaines Niles Skokie would involve the demolition or renovation of an existing building. Ohare Only one construction project was completed during 2016, a Int'l Airport 217,280-square-foot speculative building developed by Seefried W Industrial Properties, Inc. at 5600-5750 W. Jarvis Avenue in Niles. The building was completed during the first quarter of the year and Franklin 90 Ad Park Melrose 94 Park Oak Park 290 Chicago Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8%

NetAbsorption (millions ofSF) 2.0 15% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 5 18% 1.0 14% NetAbsorption (millions ofSF) 30 16% -30 4% -0.5 0% -1 6% -1.5 4% 4 16% 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12% te

3 14% te 10 12% te te 4 80 1.0 9% 8 1.60.0 10% 0 10% 2 12% 3 60 0.5 6% 6 1.2-0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 2 40 0.0 3% 4 0.8-1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 -0.5 0% 0.4 20 Millionsof SF 2 -1.5 4% -1 6% Millionsof SF -30 4% Millionsof SF Millionsof SF 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 80 4 8 1.6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 New Leasing Volume User Sale Volume 3 6 1.2

2 0.8 Central DuPage40 Fox Valley I 80 4 O'Hare

1.2 16% 6 21% 3 14% 1 4 0.4 16% 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% 0 0 0.0 0 4 15% 2 12% 0.4 2009 2010 2011 2012 2013 2014 2015 2016 12% te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 te 1 10% 1 10% 3 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0.0 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) 1.2 16% NetAbsorption (millions ofSF) 6 21% NetAbsorption (millions ofSF) -3 4 2%16% NetAbsorption (millions ofSF) 3 14% -1.2 4% -1 0% -4 0% -2 4% 0.8 14% 5 18% 3 14% 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te te te 6 te 2.0 6 8 1 10% 1 10% 3 12% 5 0.0 10% 5 0 8% 1.5 2 9% 6 0 8% 4 -1 6% VacancyRa VacancyRa

4 -0.4 8% VacancyRa VacancyRa 1 6% 1.0 3 -2 4% 3 -1 6% 4 -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2 NetAbsorption (millions ofSF) 2 0.5-1.2 4% 2 Millionsof SF -1 0% Millionsof SF -4 0% -2 4% Millionsof SF Millionsof SF 1 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 6 2.0 6 8 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 6 New Leasing Volume User Sale Volume 4 4 1.0 3 4 Chicago3 North I 290 North Lake County South Suburbs 2 2 2 14% 2 10% 0.5 2 16% 2 2 16% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 8% 1 12% 0 0.0 1 0 12% 1 0 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

te 2009 2010 2011 2012 2013 2014 2015 2016 te te

2009 2010 2011 2012 2013 2014 2015 2016 te 0 6% 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North I 290 North Lake-1 County 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF)

2 14% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 16% 2 16% -3 0% -3 4% -2 0% -2 0% 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% 1 12% te te te te 4 5 5 2.50 6% 0 10% 4 0 8% 4 0 8% 2.0 3 -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 -1 4% -1 4% -2 2% 2 -2 6% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 -3 4% Millionsof SF -2 0% -2 0% -3 0% Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2.5 4 5 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2.0 4 4 New Leasing Volume User Sale Volume has since been fully-leased3 by threeNew tenants.Leasing Volume MoltoUser SaleCapital Volume started Vacancy RateNew & Leasing Net Volume AbsorptionUser Sale Volume New Leasing Volume User Sale Volume 1.5 3 3 construction during the2 fourth quarter on a 135,650-square-foot North Suburbs Chicago South I 290 South North Suburbs Southeast Wisconsin 1.0 speculative facility at 7720 N Lehigh Avenue in Niles. 2 2 4 16% 2 1 12% 2 12% 3 16% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 3 14% Leasing and Sale Activity 1 10% 2 0.0 12% 1 0 10% 0 2 0 12%

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te te 1 10% te 0 8% New leasing activity totaled 877,062New square Leasing Volume feet inUser 2016, Sale Volume a slight New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 8% 1 8% decrease from the 917,536 square feet of new leasing activity -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South recorded4% in 2015. TheI 290-1 Southlargest new lease of the year involved 6% North Suburbs Southeast0 Wisconsin 4% -2 4%

NetAbsorption (millions ofSF) 2 12% manufacturer Dynomax, Inc. leasing the entire 172,779-square- NetAbsorption (millions ofSF) 2 12% NetAbsorption (millions ofSF) 3 16% NetAbsorption (millions ofSF) -3 4 2%16% -4 3 foot building0%14% at 230 W-2 Palatine Road in Wheeling, consolidating its 4% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 operations12% from locations1 in Buffalo Grove, Lincolnshire, Mundelein, 10% 2 12% te te te te 3 4 1 and Wheeling.10% 3.0 0 8% 4 0 8% 0 8% 2.5 1 8% 3 -1 6% 3 -1 6% 2

VacancyRa 2.0 VacancyRa VacancyRa

User sale activityVacancyRa increased to 225,729 square feet in 2016, a 13.5 -2 4% -1 6% 0 4% 2 percent increase over the user sale volume of 198,824 square 1.5-2 4% 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 feet recorded2% in 2015.1 The largest user sale of 2016 involved New1.0 Lease & User Sale Volume -2 4% 1 1 Millionsof SF -3 2% -1 0% -4 0% Millionsof SF Millionsof SF Millionsof SF 2009 2010 2011 2012 2013 2014 2015 turned2016 and precision-ground2009 rod 2010manufacturer2011 2012 Atlas2013 Fibre2014 2015 2016 North0.5 Suburbs2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 4 Company purchasing the3 previously vacant 117,000-square-foot 3.0 4 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 facility located at 3411 Woodhead Drive in Northbrook for $4.6 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume 3 million. Dayton Street Partners2 acquired the 206,150-square-foot 2.0

warehouse at 6123-6227 Monroe Court in Morton Grove in October 1.5 2 I 88 2 in the largest investment1 sale of 2016. 1.0 3 20% 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 Absorption and Forecast0 0.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016 te 1 12% New Leasing Volume User Sale Volume Following three consecutive years ofNew negative Leasing Volume net Userabsorption, Sale Volume the New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 trend turned8% positive in 2016, recording 944,295 square feet of net VacancyRa I 88 absorption, the greatest total since 2012. -1 4%

NetAbsorption (millions ofSF) 3 20% -2 The North0% Suburbs vacancy rate is expected to gradually improve 2 2009 2010 2011 2012 2013 2014 2015 throughout2016 16% 2017, as vacant space is absorbed through additional

5 1 new leases12% beingte signed and user sales being completed.

4 0 8%

3 VacancyRa -1 4% 2 NetAbsorption (millions ofSF) -2 Significant0% Lease and Sale Activity Millionsof SF 1 2009 2010 2011 2012 2013 2014 2015 2016 0 5 North Suburbs | Top 2016 Transactions 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume TENANT/BUYER SIZE (SF) ADDRESS TYPE QTR

3 Dayton Street Partners 206,150 6123-6227 Monroe Court, Morton Grove Investment sale Q4

2 Dynomax, Inc. 172,779 230 W Palatine Road, Wheeling New lease Q2

Millionsof SF 1 Molto Properties, LLC 130,000 7720 N Lehigh Avenue, Niles Investment sale/redevelopment Q2 0 M. Rogers Design, Inc. 121,225 3400-3450 W Lake Avenue, Glenview Lease renewal Q3 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Atlas Fibre Company 117,000 3411 Woodhead Drive, Northbrook User sale Q1 Matrix Financial Partnership LLC 116,800 3411 Woodhead Drive, Northbrook User sale Q1 Richelieu Foods, Inc. 115,000 120 W Palatine Road, Wheeling New lease Q1 Johnson & Quinn 105,000 7460 N Lehigh Avenue, Niles Lease renewal Q2 Segerdahl Corporation (SG360) 100,047 311 W Gilman Avenue, Wheeling New lease Q4 Ghaben Auto Group LLC 92,265 1806-1850 Holste Road, Northbrook User sale Q2 Prinz USA 84,087 515-555 N Huehl Road, Northbrook Lease renewal Q1 Partners Group AG 82,000 747-797 S Glenn Avenue, Wheeling Part of a 19-property investment portfolio sale Q2 Georgia Nut 78,101 7515-7555 N Linder Avenue, Skokie User sale Q2

25 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International Northwest Suburbs

Vacancy and Supply Market Indicators The Northwest Suburbs’ vacancy rate improved in each quarter NORTHWEST SUBURBS 2016 2015 2014 of 2016, decreasing by 91 basis points over the course of the year VACANCY 8.04% 8.95% 8.44% to 8.04 percent. This rate is now 335 basis points below the peak vacancy rate of 11.39 percent recorded in the fourth quarter of 2011. NET ABSORPTION 732,975 409,692 -466,869 ASKING RENTAL RATE $5.12 $5.22 $5.13 Total vacant supply decreased throughout the year as well, despite 1.2 million square feet of new vacancies being introduced through tenants moving out and completed speculative developments. At orest the end of 2016, the market held 2.8 million square feet of vacant Vernon Hills space, compared to 3.1 million square feet of vacant space at the end of 2015. There are four options available for prospects seeking Lake Zurich space of 100,000 square feet or larger. Bualo Grove Construction Activity Four construction projects were completed during 2016 totaling Palatine ook Chicago Executive 452,472 square feet. Two were speculative developments, including Airport a 271,200-square-foot building developed by Ridge Development Arlington at 1331 Schiferl Road in Bartlett’s Brewster Creek Business Park Heights 294 that has been partially leased by Winhere Brake Parts. Additionally, Elgin Des a 64,192-square-foot building was developed by Greco & Sons Schaumburg Plaines at 1580 Hecht in Bartlett’s Brewster Creek Business Park. The Streamwood Elk Grove building is fully leased by Ixmation Cox Systems. Two build-to- 290 Village Ohare suit facilities were also completed in Bartlett, a 67,080-square- Int'l Airport foot building for Traffic Control and Protection in the Blue Heron Wood Dale Business Park and a 50,000-square-foot building for Ace Bloomingdale Bensenville Relocation Systems in Brewster Creek Business Park. Dupage Airport Addison Four construction projects are underway, the largest being Exeter Carol 355 Elmhurst Property Group’s 421,403-square-foot speculative facility at 1323 West ChicagoStream Brewster Creek Boulevard in Bartlett. The remaining ongoing projects include a 167,550-square-foot speculative building being developed by Greco & Sons in Bartlett’s Brewster Creek Business Park, an 80,000-square-foot build-to-suit facility for Elgin Beverage Company in Bartlett’s Blue Heron Business Park, and a 56,297-square-foot build-to-suit project for TRUMPF in Hoffman Estates’ Huntington 90 Business Park. Leasing and Sale Activity Vacancy Rate & Net Absorption Northwest Suburbs Chicago Metro Elgin New leasing activityI 55 totaled 292,777 square feet for 2016, the Northwest Suburbs 30 16% 2.0 lowest 15%tally since 20115 and a 22.15 percent decline from 2015. 18% 1.0 14%

20 14% 1.5 The largest12% lease of the4 year involved Winhere Brake Parts leasing 16% 0.5 12% te

3 14% te 10 12% 135,600 square feet in the recently completed speculative facility at te te 1.0 9% 0.0 10% 0 10% 1331 Schiferl Road in 2Bartlett’s Brewster Creek Business Park. 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa The 271,200-square-foot1 building at 1331 Schiferl Road in Bartlett 10% Chicago Metro Elgin0.0 3% I 55 Northwest-1.0 Suburbs 6% -20 6% 0 8%

NetAbsorption (millions ofSF) was also the largest building to sell in the Northwest Suburbs NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 submarket.0% Cornerstone-1 Real Estate Advisors LLC purchased the 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 20 14% 1.5 building 12%for $19.35 million4 from Ridge Development in December. 16% 0.5 12% 4 80 te 8 1.6 3 14% te 10 12% te te User sale activity totaled 251,140 square feet in 2016, highlighted 1.0 9% 0.0 10% by the most significant2 user sale involving American Gasket 12% 60 0 10% 3 6 1.2 0.5 6% -0.5 8%

TechnologiesVacancyRa purchasing the 88,737-square-foot building at 802 E VacancyRa VacancyRa -10 8% VacancyRa 1 10% 40 2 4 0.8 0.0 Devon Avenue3% in Bartlett for $920,000, or $10.37 per square foot. -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Lease & User Sale Volume 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF -30 4% -0.5 0% -1 6% Northwest-1.5 Suburbs 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 Absorption2016 and Forecast2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 80 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 Net2016 absorption totaled 8732,9752009 2010square2011 feet 2012in 2016,2013 an increase2014 2015 of 2016 1.6 2009 2010 2011 2012 2013 2014 2015 2016 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 78.91 percent year-over-year.6 This activity was relatively evenly 1.2 distributed among the four quarters of the year. The last time net Central DuPage Fox Valley2 I 80 O'Hare 40 absorption was higher4 in the submarket was in 2006, when it 0.8 3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF totaled 1.0 million square2 feet. Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% 2 12% 0 40 15% 0.0 0 0.4 12% The vacancyte rate in the Northwest Suburbs submarket is expected te te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 3 12% 0.0 to remain10% relatively stable in 2017. While continued demand will New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 2 9% 0 8% likely result in positive net absorption, two additional speculative -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% facilities will be delivered, adding new vacant space to the -2 4% Central-1 DuPage 6% Fox Valley I 80 O'Hare -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) submarket. 3 14% 1.2 16% 6 21% 4 16% -2 4% -1.2 4% -1 0% -4 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 2016 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 5 2009 2010 2011 2012 2013 2014 2015 2016 18% 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 4 15% 2 12% 2.00.4 12% 6

te 8 6 te te te 1 10% 1 10% 5 3 12% 5 0.0 10% 1.5 Significant Lease and Sale Activity 6 0 8% 4 2 9% 4 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4-2 4% -1 6% Northwest Suburbs | Top 2016 Transactions -0.8 6% 0 3%

NetAbsorption (millions ofSF) 2 NetAbsorption (millions ofSF)

2 NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 0.5 TENANT/BUYER SIZE (SF) ADDRESS 2 TYPE QTR Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1-2 4% -1.2 4% 1-1 0% -4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 Cornerstone2016 Real Estate Advisers2009 2010 2011 271,2002012 2013 13312014 Schiferl2015 Road,2016 Bartlett 2009 Investment2010 2011 sale 2012 2013 2014 2015 2016 Q4 0 0.0 0 0 2.0 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 Winhere Brake Parts 135,600 1331 Schiferl Road, Bartlett 8 2009 New2010 lease2011 2012 2013 2014 2015 2016 Q2 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 YAHEE Technologies Corporation 104,000 425 Algonquin Road, Arlington Heights 6 New lease Q3 4 4 Chicago3 North I 290 North1.0 American Gasket TechnologiesLake County3 88,737 802 E Devon Avenue, Arlington HeightsSouth Suburbs4 User sale Q3 22 10% 2 14% 22 16% 2 16% 0.5 2 Millionsof SF Millionsof SF

Urban Commercial Property Group Inc 72,623 Hoffman Estates Millionsof SF 3-property investment portfolio sale Q4 Millionsof SF 1 1 1 8% 1 12% 1 12% 1 12% 0 0.0 The Capital Companies, LLC0 68,207 1201 E Wiley Road, Schaumburg 0 Part of a 2-property investment portfolio sale Q1 te te te te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 6% 0 10% 2009 2010 2011 2012 2013 2014 2015 2016 Ixmation COX Systems 64,192 1580 Hecht Drive, Bartlett New lease Q1 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa S D & S Properties Inc 63,509 302-318 Roma Jean Parkway, Streamwood Investment sale Q4 -1 4% -1 4% Chicago-2 North 2% I 290-2 North 6% Lake County South Suburbs

NetAbsorption (millions ofSF) Founders Properties LLC 59,500 901 Phoenix Lake Avenue, Streamwood 6-property investment portfolio sale Q4 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% -3 0% -3 4% -2 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 8% 1 12% 1 12% 1 12% 2.5 4 5 5 te te te 0 6% te 0 10% 4 4 2.0 3 0 8% 0 8% -1 4% -1 8% VacancyRa

3 VacancyRa 3 VacancyRa 1.5 VacancyRa 2 -1 4% -1 4% 1.0-2 2% -2 6% 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1-2 0% 1-2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3 1.5 Research & Forecast3 Report | Fourth Quarter 2016 | Chicago / Industrial 3 | Colliers International Chicago South I 290 South2 27 North Suburbs Southeast Wisconsin 1.0 2 2 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 30.5 14% 1 1 1 10% 1 10% 2 12% 20.0 12% 0 0 0 te te te 1 2009 2010 2011 2012 2013 2014 2015 2016 10% te 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 8% 2009 2010 2011 2012 2013 2014 2015 2016

0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% New Leasing Volume User Sale Volume 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa -2 4% -1 6% 0 4% Chicago South I 290 South North-2 Suburbs 4% Southeast Wisconsin NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 4 16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 2 12% 1 10% 2 12% 3 3.0 4 4 te te te 1 10% te 0 8% 2.5 0 8% 1 8% 3 0 8% 3 2 2.0-1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa 2-2 4% -1 6% 1.5 2 0 4% -2 4% 1 NetAbsorption (millions ofSF) 1.0 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 1

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 2 2.0

I 88 2 1.5 2 3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0 te 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa

I 88 -1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2 16% 5 1 12% te 4 0 8%

3 VacancyRa

2 -1 4% NetAbsorption (millions ofSF)

Millionsof SF 1-2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume O’Hare

Vacancy and Supply Market Indicators At the end of 2016, the O’Hare submarket vacancy rate stood at O’HARE 2016 2015 2014 3.76 percent, an all-time low. This represents a decline of 144 VACANCY 3.76% 5.20% 5.98% basis points since the end of 2015, when the vacancy rate was 5.20 percent. This is the second lowest vacancy rate among the NET ABSORPTION 1,940,703 1,049,941 3,253,708 22 submarket tracked in Chicago’s industrial market and is an ASKING RENTAL RATE $5.50 $5.25 $5.14 astounding turnaround since the second quarter of 2011, when the rate peaked at 13.17 percent.

A total of 3.3 million square feet of vacant space was introduced to the submarket in 2016 through tenants moving out, but significant leasing and user sale activity resulted in a reduction of the overall vacant space in the submarket to 5.3 million square feet, 2.0 million square feet below the 7.3 million square feet of Palatine vacant space recorded at the end of 2015. Chicago Executive Airport 94 Arlington Construction Activity Heights 294 Morton Des Grove One project is under construction in the O’Hare submarket. MC Plaines Machinery’s 175,982-square-foot build-to-suit facility is underway Niles Elk Grove at 85 Northwest Point Boulevard in Elk Grove Village. ThisStr neweamw Village Ohare building will be an expansion from the company’s current location 290 Int'l Airport in Wood Dale and is due to deliver in the first quarter of 2017. Wood Dale Three new construction projects totaling 323,731 square feet are Bensenville expected to break ground in early 2017. No construction projects Franklin 90 were completed in 2016. Addison Park Elmhurst 94 Demolition activity has been prevalent in the O’Hare submarket 355 Melrose Park Oak Park at the southern edge of O’Hare International Airport to make way 290 for future expansions to Illinois Tollway’s Elgin O’Hare Western Access project. The 81,322-square-foot, former Royal Die & Stamping facility located at 949 E Green Street in Bensenville was 55 leveled during the fourth quarter. 88

Airport Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 2.0 15% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 12% 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12%

4 te

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 Leasing and Sale Activity6 Vacancy1.2 Rate & Net Absorption O’Hare 2 Central 40DuPage Fox Valley New leasing volumeI 80 totaled4 2.9 million square feet in 2016, a 24.25 O'Hare 0.8 3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF percent decline compared2 to the 3.9 million square feet of new Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% leasing activity recorded in 2015. Learjet, Inc. signed the largest 0 0 4 0 15% 20.0 12% 0.4 12% te te

lease of the year, renewing its lease for 95,796 square feet and te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% New Leasing Volume User Sale Volume 0.0 New Leasing Volume User Sale Volume expanding10% into an additional 238,192New square Leasing Volume feet atUser 251 Sale VolumeWille Road 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% in Des Plaines. -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) User sale activity increasedNetAbsorption (millions ofSF) for the third consecutive quarter NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -2 4% -1.2 4% -1 0% -4 0% climbing to 575,457 square5 feet in the fourth quarter, a 44.9 18% 3 14% 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% percent improvement from the previous quarter. The most 4 15% 2 12% 0.4 12% 2.0 te 6 te

8 te 6 te significant user sale witnessed during the fourth quarter, and the 1 10% 1 10% 3 12% 5 0.0 overall largest10% for the 5year, involved Tigerflex Corporation. The 0 8% 1.5 2 9% 6 4 0 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa rubber products manufacturer purchased the building for $9.3 1 6% 3 1.0 3 4 -2 4% -1 6% million, or $61.22 per square foot. The largest investment sale -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

2 NetAbsorption (millions ofSF) -3 2% 2NetAbsorption (millions ofSF) New Lease & User Sale Volume 0.5 of the year involved Westmount Realty Capital, LLC purchasing a 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -1.2 4% -1 0% 1 -2 4% 1 O’Hare-4 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 19-property2016 investment portfolio2009 2010sale which2011 included2012 2013 12 O’Hare2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 2.0 buildings. 6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 6 2009 2010 2011 2012 2013 2014 2015 2016 8 2009 2010 2011 2012 2013 2014 2015 2016

5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 6 4 Absorption and Forecast4

Chicago3 North I 290 North1.0 Lake County3 South Suburbs4 Net absorption in the O’Hare submarket totaled 1.9 million square 22 10% 2 14% 22 16% 2 16% 0.5 2 Millionsof SF Millionsof SF

feet in 2016, an 84.8 percent increase over 2015’s net absorption Millionsof SF Millionsof SF 1 1 1 8% 1 tally of 12%1.0 million square feet. Net absorption has now been 0 0.0 10 12% 10 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015positive2016 for the past six consecutive2009 2010 years,2011 totaling2012 201311.0 million2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 6% 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume square feet. 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North I 290 North The new year is expectedLake-1 County to bring additional positive net 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 absorption,14% but at a slower2 pace as few spaces remain vacant 16% 2 16% -3 0% -3 in the submarket.4% The-2 vacancy rate may increase slightly when 0% -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 12% anticipated speculative construction1 projects are completed. 12% 1 12%

4 te 5 te 5 te 2.5 te 0 6% 0 10% 4 0 8% 4 0 8% 2.0 3 -1 4% -1 Significant8% Lease and Sale Activity VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 2 -1 4% -1 4% -2 6% 1.0-2 2% O’Hare | Top 20162 Transactions 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4%TENANT/BUYER 1 -2 SIZE (SF) ADDRESS 0% 1 -2 TYPE 0%QTR 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 Westmount Realty Capital,0 LLC 612,306 12 O’Hare buildings (Elk Grove Village, Itasca, Wood0 Dale) Part of a 19-property investment portfolio sale Q2 2.5 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 Learjet Inc. 333,988 251 Wille Road, Des Plaines Lease expansion/renewal Q3 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3 STORE Capital 281,000 2300 Pratt Boulevard, Elk Grove Village Investment sale Q1 1.5 3 3 Chicago South I 290 South2 North Suburbs Southeast Wisconsin 1.0 Hackman Capital Partners 2 252,000 1010-1050 Sesame Street, Bensenville 2 Part of a 6-property investment portfolio sale Q1 4 16% 2 12% 2 12% 3 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 30.5 14% HD Supply 231,679 855 N Wood Dale Road, Wood Dale New lease Q2 1 10% 20.0 12% 10 D&W Fine10% Pack 0 227,800 777 W Mark Street, Wood Dale 2 0 New lease 12%Q1 te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 0 8% 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume T5 Data 8%Centers 221,000New Leasing Volume1441 TouhyUser Sale Avenue, Volume Elk Grove Village 1 InvestmentNew Leasing sale Volume User Sale Volume 8%Q4 -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa Amalgamated Sugar Company 201,395 591 Supreme Drive, Bensenville New lease Q3 Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% CLT Global -2 171,548 2881 S Busse Road, Elk Grove Village4% Sublease Q3 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 4 16% 2 12% 2 12% 3 16% -4 0% -2 4% -3 2% -1 0% 3 14% 2009 2010 2011 2012 2013 2014 2015 Marketplace2016 Brands 154,633 1501 Nicholas Boulevard, Elk Grove Village New lease Q3 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 2 12% 2 12% Kuehne & Nagel 152,815 1001 Busse Road, Elk Grove Village Lease renewal Q3

3 te

3.0 te 4 te

4 te 1 10% 0 8% 0 8% 0 Tigerflex 8%Corporation 2.5 151,900 1501-1551 Pratt Boulevard, Elk Grove Village 1 User sale 8%Q4 3 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa VacancyRa 2 -2 4% -1 6% 1.5 2 0 4% -2 4% NetAbsorption (millions ofSF)

1 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF -2 4% -4 0% 0.5-3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0.0 0 4 2009 2010 2011 2012 2013 2014 2015 2016 3 2009 2010 2011 2012 2013 2014 2015 2016 3.0 2009 2010 2011 2012 2013 2014 2015 2016 4 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 3 2 2.0 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International I 88 2 29 1.5 2

3 20% 1 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% 0 0 0.0 0

NetAbsorption (millions ofSF) 3 20% -2 0% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

5 te 1 12% 4 0 8%

3 VacancyRa

2 -1 4% NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume South Suburbs

Vacancy and Supply Market Indicators The vacancy rate improved during every quarter of 2016, SOUTH SUBURBS 2016 2015 2014 decreasing by 141 basis points to 6.16 percent, the lowest rate the VACANCY 6.16% 7.57% 7.86% submarket has recorded since 2001. This rate is less than half of the 12.91 percent peak rate reached in the first quarter of 2010. NET ABSORPTION 1,370,539 283,772 1,160,760 ASKING RENTAL RATE $4.31 $3.82 $3.73 Despite the introduction of 1.6 million square feet of vacant space during 2016, the total vacant space in the submarket decreased by 1.4 million square feet to 6.3 million square feet due to new leasing and user sale activity. For users looking for 300,000 square feet or more, there are currently six vacant options in the submarket. 294 55 Construction Activity Downer Grove Chicago Midway No new development projects were completed in the South Burr Airport Suburbs during 2016 and one building was demolished during the Ridge Bedford fourth quarter. The 69,900-square-foot building at 10800 S WCentral Park Willow Avenue in Chicago Ridge was purchased by Landis Enterprise in Oak Lawn September and leveled to make way for a new specialty building. Springs Two build-to-suit projects totaling 418,000 square feet are 294 57 90 underway. Winpak Portion Packaging, a manufacturer of packaging Palos Blue Island 94 material for food, beverage, and healthcare products, will soon be Heights expanding into its new, 348,000-square-foot building addition at 355 the LogistiCenter in Sauk Village. The second build-to-suit project is being constructed by DSI for lawn and garden edging productsLockport Hazel Crest mond manufacturer Valley View Industries. The 70,000-square-foot Tinley Park building will be located on Kostner Avenue in Crestwood. 80 Leasing and Sale Activity Matteson New leases and lease expansions totaled 1.2 million square feet for erville 2016, a decline of 19.8 percent compared to the 1.5 million square Park Forest feet of new leasing activity recorded in 2015. One of the largest new leases of the year involved integrated logistics and supply chain solutions provider Warehouse Specialists Inc leasing 212,055 square feet at 21700 Mark Collins Drive in Sauk Village, expanding from a neighboring space in the building. ILL Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8%

NetAbsorption (millions ofSF) 2.0 15% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1.0 14% NetAbsorption (millions ofSF) 30 16% 5 18% -30 4% -0.5 0% -1 6% -1.5 4% 4 16% 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12% te

3 14% te 10 12% te te 4 1.6 80 1.0 9% 8 0.0 10% 0 10% 2 12% 3 60 0.5 6% 6 1.2-0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 2 40 0.0 3% 4 0.8-1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF -0.5 0% 2

Millionsof SF -1.5 4% Millionsof SF -1 6%

Millionsof SF -30 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 80 4 8 1.6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 New Leasing Volume User Sale Volume 3 6 1.2

2 Central 40DuPage Fox Valley I 80 4 O'Hare 0.8

1.2 16% 6 21% 3 14% 1 40.4 16% 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% 0 0 0.0 0 4 15% 2 12% 0.4 12% 2009 2010 2011 2012 2013 2014 2015 2016 te te

2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 te 1 10% 1 10% 3 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0.0 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) 1.2 16% NetAbsorption (millions ofSF) 6 21% NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 4 16% -1.2 4% -1 0% -4 0% -2 4% 0.8 14% 5 18% 3 14% 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te te te 6 te 2.0 6 8 1 10% 1 10% 3 12% 5 0.0 10% 5 0 8% 1.5 2 9% 6 0 8% 4 -1 6% VacancyRa 4 VacancyRa -0.4 8% VacancyRa VacancyRa 1 6% 1.0 3 4 -2 4% 3 -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2NetAbsorption (millions ofSF) 2 0.5 2

Millionsof SF -1.2 4%

Millionsof SF -1 0%

Millionsof SF -4 0% Millionsof SF -2 4% 1 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 6 2.0 6 8 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 Boston-based investment firm Cabot Properties, Inc. acquired the Vacancy6 Rate New& LeasingNet Volume AbsorptionUser Sale Volume 4 4 three-property portfolio in Alsip known as Park 294 in November South Suburbs 3 1.0 3 4 Chicago North I 290 North for $63 million. TheLake portfolio County consisted of the 457,701-square- South Suburbs 2 2 2 14% 2 10% 0.5 2 16% 22 16% Millionsof SF Millionsof SF Millionsof SF

Millionsof SF foot building at 11614 S Austin Avenue, the 238,000-square-foot 1 1 1 8% 1 building12% at 11740 S Austin Avenue, and the 161,942-square-foot 0 0.0 10 12% 10 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te

te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 te building at 11800 S Austin Avenue. The transaction was the largest 0 6% 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume South Suburbs sale of0 the year. The largest user sale of 2016 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 involved8% Welch Packaging Inc. purchasing the 215,205-square- VacancyRa VacancyRa VacancyRa VacancyRa Chicago North I 290 North foot building formerlyLake -1owned County and occupied by Chicago Metallic 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 Corporation14% at 9900 Industrial2 Drive in Bridgeview. 16% 2 16% -3 0% -3 4% -2 0% -2 0% 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Absorption and Forecast1 12% 1 12% te te te 2.5 te 4 5 5 0 6% 0 10% 4 0 8% 4 0 8% 2.0 3 Net absorption totaled 1.4 million square feet in the South Suburbs -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa submarket in 2016, nearly3 five times the net absorption tally of 3 2 -1 4% -1 4% -2 2% -2 283,772 6%square feet recorded in 2015. The last time net absorption 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) New Lease & User Sale Volume 1 was so significant in the submarket was in 2012 when it totaled 1.5

Millionsof SF -3 4% Millionsof SF -2 0% Millionsof SF -2 0% Millionsof SF 0.5-3 0% 1 South1 Suburbs 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 million2016 square feet. 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 2.5 4 5 5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 Positive2016 net absorption and2009 decreasing2010 2011 vacancy2012 is2013 expected2014 in2015 20172016 2009 2010 2011 2012 2013 2014 2015 2016 4 4 2.0 New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume as ongoing build-to-suit projects areNew Leasingdelivered Volume andUser tenants Sale Volume continue New Leasing Volume User Sale Volume 1.5 3 3 2 to locate in the submarket. Chicago South I 290 South North Suburbs Southeast Wisconsin 1.0 2 2 2 12% 4 16% 1 2 12% 3 16% Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 1 1 3 14% 1 10% 20.0 12% 10 10% 0 2 0 12%

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 te 1 10% te 0 8% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 8% 1 8% -1 6% -1 6% VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% -2 4% NetAbsorption (millions ofSF)

2 12% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 4 2%16% Significant Lease and2 Sale Activity 12% 3 16% -4 3 0%14% -2 4% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 1 South 10%Suburbs | Top 2016 Transactions 2 12% te te te te 3 3.0 4 4 1 10% 0 8% TENANT/BUYER SIZE (SF) ADDRESS TYPE QTR 0 8% 0 8% 2.5 1 8% 3 -1 6% 3 -1 6% 2 Cabot Properties Inc 2.0 857,643 3 buildings, Alsip 3-property investment portfolio sale Q4 VacancyRa VacancyRa VacancyRa VacancyRa -2 4% -1 6% 0 4% 2 Private Investor 1.5-2 776,515 21700 Mark Collins Drive, Sauk4% Village 2 Investment sale Q4 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1 1.0 Transwestern Investment Group 464,818 5100 W 123rd Street, Alsip 1 Part of a 5-property investment portfolio sale Q2

1 Millionsof SF -2 4%

Millionsof SF -3 2% Millionsof SF -1 0%

Millionsof SF -4 0% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Jacobson Companies 375,785 21399 Torrence Avenue, Sauk Village Lease renewal Q1 0 0 0.0 0 4 3 3.0 4 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 HOBO2016 2009 2010 254,4252011 2012 20137557-75752014 S 201578th Avenue,2016 Bridgeview 2009Lease2010 renewal2011 2012 2013 2014 2015 2016 Q1 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 New Leasing Volume User Sale Volume 3 2 AAL Organic Matters 2.0 223,517 300 E Joe Orr Road, Chicago Heights New lease Q2

I 88 2 GFH Capital Ltd 1.5 217,500 3701 W 128th Place, Alsip 2 Part of a 15-property investment portfolio sale Q4 1 1.0 3 20% Welch Packaging Group Inc 215,205 9900 S Industrial Drive, Bridgeview 1 User sale Q4

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 2 16% Warehouse Specialists Inc 212,055 21700 Mark Collins Drive, Sauk Village New lease Q3 0 0 0.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 te Gerresheimer Glass Inc 209,135 480 E Lincoln Highway, Chicago Heights Lease expansion/renewal Q3 1 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Kuehne & Nagel New193,915 Leasing Volume User13144 Sale Volume S Pulaski Road, Alsip Lease renewalNew Leasing Volume User Sale Volume Q4 0 8% VacancyRa Transwestern Investment Group 161,740 7400-7420 Richards Road, Bridgeview Part of a 5-property investment portfolio sale Q2 I 88 -1 4%

NetAbsorption (millions ofSF) 3 20% -2 0% 2 2009 2010 2011 2012 2013 2014 2015 2016 16%

5 te 1 12% 4 0 8%

3 VacancyRa -1 4% 2 NetAbsorption (millions ofSF)

Millionsof SF 1 -2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016

4 New Leasing Volume User Sale Volume 3 31 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International 2

Millionsof SF 1

0 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume Southeast Wisconsin

Vacancy and Supply Market Indicators Despite recording positive net absorption for the year, the SOUTHEAST WISCONSIN 2016 2015 2014 Southeast Wisconsin vacancy rate increased by 151 basis points VACANCY 6.06% 4.55% 3.46% in 2016 to 6.06 percent. This represents the highest vacancy rate recorded in the submarket since the fourth quarter of 2012. The NET ABSORPTION 1,606,765 2,276,143 2,018,320 vacancy rate had dropped as low as 3.20 percent in 2015, but ASKING RENTAL RATE $4.35 $4.14 $3.53 increased during much of 2016 due to the completion of several vacant speculative construction projects and new availabilities being introduced through tenants vacating.

Total vacant space increased to 3.4 million square feet in 2016, an Caledonia increase of 39.6 percent from the 2.4 million square feet of vacant space recorded at the end of 2015. More than 2.3 million square JOHN H BATTEN feet of vacant space was introduced during the course of 2016, MEMORIAL AIRPORT with 870,185 square feet of space coming online during the fourthR Racine quarter alone. Despite this increase in vacant space, for users Mount SYLVANIA looking for 200,000 square feet or more in Southeast Wisconsin, AIRPORT94 Pleasant there are only six existing vacancies. Union Grove 9494 Construction Activity 94

Six construction projects were completed during 2016 Kenosha totaling 2.6 million square feet. Four of these projects were Regional Airport built on a speculative basis with no tenant in place prior to Kenosha beginning construction. The largest speculative delivery was a 601,491-square-foot building developed by First Industrial Realty Trust, the first building in Somers’ First Park 94. The facility Westosha Pleasant Prairie was completed during the second quarter of 2016, then leased Airport by outdoor equipment manufacturer Ariens Company during the WISCONSIN third quarter. The largest construction completion of the year was a 1.1-million-square-foot expansion to packing supplier ULINE’s ILLINOIS headquarters complex in Pleasant Prairie.

Regional Airport Chicago Metro Elgin I 55 Northwest Suburbs

30 16% 2.0 15% 5 18% 1.0 14%

20 14% 1.5 12% 4 16% 0.5 12% te

3 14% te 10 12% te te 1.0 9% 0.0 10% 0 10% 2 12% 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% Chicago Metro Elgin I 55 Northwest Suburbs 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2.0 15% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 30 16% 5 18% 1.0 14% -30 4% -0.5 0% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 20 2009 2010 2011 2012 2013 2014 2015 2016 14% 1.5 12% 4 2009 2010 2011 2012 2013 2014 2015 2016 16% 0.5 2009 2010 2011 2012 2013 2014 2015 2016 12% te

4 3 14% te 10 12% te 80 te 8 1.6 1.0 9% 0.0 10% 0 10% 2 12% 3 6 1.2 60 0.5 6% -0.5 8% VacancyRa VacancyRa VacancyRa -10 8% VacancyRa 1 10% 2 4 0.8 40 0.0 3% -1.0 6% -20 6% 0 8% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 0.4 20 Millionsof SF 2

-0.5 0% Millionsof SF Millionsof SF Millionsof SF -30 4% -1 6% -1.5 4% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 0 0.0 4 8 1.6 80 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 60 3 6 1.2

Central40 DuPage Fox Valley2 I 80 4 O'Hare 0.8

3 14% 1.2 16% 6 21% 4 16% 1 0.4 20 Millionsof SF 2 Millionsof SF Millionsof SF Millionsof SF 0.8 14% 5 18% 3 14% 2 12% 0 0 40 15% 20.0 12% 0.4 12% te te

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 1 10% 3 12% New Leasing Volume User Sale Volume 0.0 New Leasing Volume User Sale Volume 10% New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 2 9% 0 8% -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% Central DuPage Fox Valley I 80 O'Hare-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% NetAbsorption (millions ofSF) 3 14% 1.2 16% 6 21% 4 16% -1.2 4% -1 0% -2 4% 5 18% -4 3 0%14% 0.8 2009 2010 2011 2012 2013 2014 2015 2016 14% 2009 2010 2011 2012 2013 2014 2015 2016 2 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 4 15% 2 12% 0.4 12% te te

2.0 6 te 6 te 8 1 10% 1 10% 3 12% 5 0.0 10% 5 0 8% 1.5 2 9% 6 4 0 8% 4 -1 6% VacancyRa VacancyRa

-0.4 8% VacancyRa VacancyRa 1 6% 3 1.0 3 4-2 4% -1 6% -0.8 6% 0 3% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF)

NetAbsorption (millions ofSF) -3 2% 2NetAbsorption (millions ofSF) 2 0.5 2 Millionsof SF Millionsof SF

-1.2 4% -1 0% Millionsof SF Millionsof SF -2 4% -4 0% 1 1 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0.0 0 0 2.0 6 8 6 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 1.5 6 4 4

Chicago3 North I 290 North1.0 Lake County3 South Suburbs4 2 22 10% 2 14% 2 16% 2 16% 0.5 2 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 1 1 1 8% 1 12% 0 0.0 10 12% 10 12% te

2009 2010 2011 2012 2013 2014 2015 2016 te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 6% 0 10% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume 8% -1 4% -1 8% VacancyRa VacancyRa VacancyRa VacancyRa Chicago North I 290 North Lake-1 County 4% South-1 Suburbs 4% -2 2% -2 6% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 2 10% 2 14% 2 16% 2 16% -3 0% -3 4% -2 0% -2 0% 1 2009 2010 2011 2012 2013 2014 2015 2016 8% 1 2009 2010 2011 2012 2013 2014 2015 2016 12% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% 1 12% te te te 2.5 te 4 5 5 0 6% 0 10% 4 0 8% 4 0 8% 2.0 3 -1 4% -1 8% VacancyRa VacancyRa VacancyRa 1.5 VacancyRa 3 3 2 -1 4% -1 4% -2 2% -2 6% 1.0 2 2 NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5-3 0% -3 4% 1-2 0% 1-2 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 0.0 0 0 0 4 2.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016 5 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 4 New Leasing Volume User Sale Volume 2.0 3 Three construction projects are currently underway, the largest Vacancy Rate & Net Absorption 1.5 being an 800,000-square-foot3 build-to-suit facility for packaging Southeast3 Wisconsin Chicago South I 290 South2 North Suburbs Southeast Wisconsin 1.0 ULINE in Kenosha that2 started construction during the third quarter. 2 4 2 12% 2 12% 3 16% 16% 1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF 0.5 Construction continues1 on the second building in Somers’ First Park 1 3 14% 94, a 602,348-square-foot1 speculative facility being developed by 10% 20.0 12% 10 10% 0 20 12% te te te 2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 First2016 Industrial Realty Trust.2009 Finally,2010 construction2011 2012 is2013 now 2014underway2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 10% 0 8% 0 New Leasing Volume User Sale Volume 8% 0 New Leasing Volume User Sale Volume on a 29,775-square-foot8% build-to-suitNew facilityLeasing Volume for BrooksUser Sale Volume Tractor in 1 New Leasing Volume User Sale Volume 8% -1 6% -1 6% Sturtevant. VacancyRa VacancyRa VacancyRa VacancyRa Chicago-2 South 4% I 290-1 South 6% North Suburbs Southeast0 Wisconsin 4% -2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -34 2%16% 2 Leasing12% and Sale Activity2 12% 3 16% -2 4% -4 3 0%14% -3 2% -1 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 2009 2010 2011 2012 2013 2014 2015 2016 10% 2009 2010 2011 2012 2013 2014 2015 2016 2 12% 1 New leasing10% volume totaled 1.0 million square feet in 2016, a 2 12% te

3 te te 4 te 3.0 4 1 10% dramatic increase from0 the 106,782-square-foot total recorded in 8% 0 8% 0 8% 2.5 1 8% 3 2015. The largest lease was signed during the third quarter, as 3 -1 6% -1 6% 2 2.0 VacancyRa VacancyRa VacancyRa VacancyRa Ariens Company leased the recently completed 601,491-square-foot -2 4% -1 6% 1.5 2 0 4% 2 speculative project in Somers.-2 4% NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) NetAbsorption (millions ofSF) -3 2% 1 1.0 New Lease & User Sale Volume 1

1 Millionsof SF

-2 4% Millionsof SF Millionsof SF Millionsof SF -3 2% -1 0% -4 0% 0.5 Southeast Wisconsin 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 Significant2016 sale activity in 20092016 2010consisted2011 of2012 both 2013investment2014 2015and 2016 2009 2010 2011 2012 2013 2014 2015 2016 0 0 user sales. The largest0.0 sale of the year involved Philadelphia-based 0 4 3 2009 2010 2011 2012 2013 2014 2015 2016 3.0 4 2009 2010 2011 2012 2013 2014 2015 2016 Exeter Property Group acquiring2009 2010 a 891,567-square-foot2011 2012 2013 2014building2015 in 2016 2009 2010 2011 2012 2013 2014 2015 2016 2.5 New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume 3 Pleasant Prairie’s LakeView Corporate Park East business park. The 3 2 2.0 building, which was fully-leased to SC Johnson, was purchased in I 88 2 1.5 2 1 July for $47.1 million. User sale volume totaled 304,679 square feet 3 20% 1.0 1

1 Millionsof SF Millionsof SF Millionsof SF Millionsof SF in 2016, only 22 percent0.5 of the 1.4 million square feet of user sales 2 16% 0 0 recorded in 2015. The 0.0largest user sale of the year involved Colbert 0

2009 2010 2011 2012 2013 2014 2015 2016 te 2009 2010 2011 2012 2013 2014 2015 Packaging2016 purchasing the 173,165-square-foot2009 2010 2011 2012 building2013 at2014 99492015 58th 2016 2009 2010 2011 2012 2013 2014 2015 2016 1 12% New Leasing Volume User Sale Volume New Leasing Volume User Sale Volume Place in the Business Park of KenoshaNew Leasing in December. Volume User Sale Volume New Leasing Volume User Sale Volume 0 8% VacancyRa I 88 -1 4% Absorption and Forecast

NetAbsorption (millions ofSF) 3 20% -2 0% Significant new leasing activity and multiple build-to-suit 2009 2010 2011 2012 2013 2014 2015 2016 2 16% construction completions pushed net absorption positive in 2016,

5 te 1 12% totaling 1.6 million square feet for the year. 4 0 8%

3 VacancyRa The vacancy rate in Southeast Wisconsin is expected to decrease -1 4% during 2017, as continued demand results in tenants leasing some of 2 NetAbsorption (millions ofSF) the recently completed vacant speculative construction projects.

Millionsof SF 1-2 0% 2009 2010 2011 2012 2013 2014 2015 2016 0 5 2009 2010 2011 2012 2013 2014 2015 2016 Significant Lease and Sale Activity

4 New Leasing Volume User Sale Volume

3 Southeast Wisconsin | Top 2016 Transactions

2 TENANT/BUYER SIZE (SF) ADDRESS TYPE QTR

Millionsof SF 1 Exeter Property Group 891,567 9800 72nd Avenue, Pleasant Prairie Investment sale Q3 0 Ariens Company 601,491 8448 38th Street, Somers New lease Q3 2009 2010 2011 2012 2013 2014 2015 2016

New Leasing Volume User Sale Volume SC Johnson 432,000 2600 Enterprise Drive, Sturtevant Lease renewal Q1 Kem Krest 277,454 9801 80th Avenue, Pleasant Prairie Lease renewal Q2 Colbert Packaging 173,165 9949 58th Place, Kenosha User sale Q4 West Logistics Inc 125,620 10601 Enterprise Drive, Sturtevant New lease Q3 Goodwill 115,823 6200 Regency West Drive, Racine New lease Q1 Founders Group 105,637 8901 102nd Street, Pleasant Prairie Investment sale Q4 Home City Ice Co. 85,630 19241 83rd Street, Bristol User sale Q3 Andis Company 83,646 10601 Enterprise Drive, Sturtevant New lease Q4 Allstates Trucking, Inc. 63,838 1400 International Drive, Mount Pleasant Lease renewal Q3

33 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International Fourth Quarter 2016 Industrial Market Statistics

AVG VACANCY VACANCY CURRENT AVERAGE CURRENT QTR CURRENT QTR YTD NET CURENT QTR CURRENT QTR UNDER ASKING TOTAL INVENTORY RATE RATE QTR NET ASKING SUBMARKET NEW SUPPLY CAME ON ABSORPTION NEW LEASING USER SALE CONSTRUCTION NET (SF) CURRENT PREVIOUS ABSORPTION SALE PRICE (SF) MARKET (SF) (SF) ACTIVITY (SF) ACTIVITY (SF) (SF) RENTAL QTR QTR (SF) PSF RATE PSF Central 74,419,957 276,250 649,991 6.19% 6.26% 314,151 739,668 384,457 282,417 381,600 $5.43 $74.92 DuPage Cty Chicago 89,345,483 79,206 484,173 4.98% 4.83% -56,896 243,292 42,300 124,065 40,700 $8.39 $48.78 North Chicago 83,697,092 -42,600 547,019 9.33% 9.18% -162,777 417,494 154,184 272,658 695,413 $4.28 $40.84 South DeKalb 21,179,427 0 0 6.29% 6.34% 11,059 886,129 0 11,059 0 $3.18 $38.95 County Elgin I-90 32,459,231 1,201,715 1,036,738 10.63% 10.55% 1,048,096 1,237,961 608,744 183,769 48,400 $4.85 $53.24 Corridor Far South 45,462,099 0 0 4.56% 4.68% 55,952 640,241 0 55,952 1,857,165 $3.32 $41.59 Suburbs Fox Valley 32,596,946 180,121 357,856 5.90% 5.26% -38,144 433,208 69,560 58,411 697,048 $4.37 $62.20

I-290 North 74,636,282 561,649 757,798 9.77% 9.51% 311,161 -864,962 297,089 98,563 648,614 $5.17 $37.17

I-290 South 46,272,833 282,933 533,232 6.49% 6.86% 435,303 1,540,870 408,082 138,000 172,000 $5.34 $39.98

I-39 Corridor 17,919,915 0 125,000 2.63% 2.35% -50,617 74,383 0 0 0 $3.75 $22.42

I-55 Corridor 87,612,247 2,251,141 3,089,088 9.42% 7.06% 23,118 4,482,121 369,815 252,602 2,955,239 $5.80 $64.62

I-88 Corridor 73,197,813 147,000 141,364 7.33% 8.08% 686,511 2,299,529 1,542,781 91,708 994,720 $4.45 $51.23

I-80 Joliet 78,013,170 1,209,700 51,400 4.75% 5.20% 1,498,870 5,036,293 172,190 80,000 9,314,335 $4.32 $50.61 Corridor Lake County 71,761,183 0 456,071 8.74% 9.72% 703,367 1,572,707 890,347 153,906 600,771 $6.00 $59.16

McHenry 30,099,848 0 11,000 13.27% 15.31% 614,257 723,432 66,917 558,340 0 $4.83 $43.77 County North 56,630,117 -16,380 214,636 5.07% 5.66% 320,544 944,295 282,005 225,729 135,650 $5.42 $52.46 Suburbs Northwest 35,236,727 67,080 46,000 8.04% 8.22% 127,368 732,975 57,236 32,929 725,250 $5.12 $64.47 Suburbs O’Hare 139,773,895 -81,322 1,271,937 3.76% 4.07% 364,969 1,940,703 515,050 575,457 175,982 $5.76 $63.45

South 101,892,965 -69,900 651,400 6.16% 6.35% 123,923 1,370,539 155,430 476,080 418,000 $4.31 $26.49 Suburbs Metro 1,192,207,230 6,046,593 10,424,703 6.81% 6.87% 6,330,215 24,450,878 6,016,187 3,671,645 19,860,887 $4.88 $48.46 Chicago Northwest 55,027,139 0 25,000 5.07% 5.24% 93,626 282,919 40,000 23,744 0 $3.88 $32.66 Indiana Rockford 52,682,503 205,000 230,000 6.56% 7.22% 543,529 305,281 497,202 30,000 557,844 $3.29 $22.92 Area Southeast 55,695,753 624,860 870,185 6.06% 5.19% 105,979 1,606,765 83,646 258,795 1,432,123 $4.35 $34.04 Wisconsin GRAND 1,355,612,625 6,876,453 11,549,888 6.70% 6.75% 7,073,349 26,645,843 6,637,035 3,984,184 21,850,854 $4.72 $45.58 TOTAL

QUARTERLY COMPARISON AND TOTALS Q4 2016 1,355,612,625 6,876,453 11,549,888 6.70% 6.75% 7,073,349 26,645,843 6,637,035 3,984,184 21,850,854 $4.72 $45.58

Q3 2016 1,348,841,172 3,336,797 7,338,001 6.75% 6.91% 5,249,366 19,572,494 5,844,607 1,982,645 19,395,926 $4.73 $46.51

Q2 2016 1,345,504,375 3,590,290 8,796,277 6.91% 7.05% 5,276,979 14,323,128 6,750,769 2,467,902 16,738,838 $4.68 $44.19

Q1 2016 1,341,914,085 5,577,501 8,295,572 7.05% 7.32% 9,046,149 9,046,149 8,292,702 2,396,577 11,138,202 $4.61 $45.75

Q4 2015 1,336,336,584 4,487,322 9,750,125 7.32% 7.26% 3,375,825 13,927,451 6,105,527 1,735,032 15,228,338 $4.56 $45.44

34 Research & Forecast Report | Fourth Quarter 2016 | Chicago / Industrial | Colliers International MARKET CONTACTS: 554 offices in Craig Hurvitz Vice President | Chicago countries on +1 847 698 8295 66 [email protected] 6 continents Jennifer Olsen Senior Research Analyst | Chicago United States: 153 +1 847 698 8217 Canada: 34 [email protected] Latin America: 24 Asia Pacific:231 EMEA: 112

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Copyright © 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.