YEAR-END 2012 | RETAIL

YEAR-END 2011 | SUBURBAN OFFICE

RETAILCHICAGO MARKET OVERVIEW OFFICE MARKET OVERVIEW

Change is on the horizon PainfullyIn the face of Slow a struggling Recovery economy, the Continues Chicago retail market reported VACANCY Thelackluster overall vacancy year-end rate in the Chicago results. suburban office market decreased slightly in 2011, down to 22.3Chicago-area percent from 22.4retail percent vacancy at year-endrates decreased 2010. slightly by 0.2 percent in 2012 to 8.3 percent. Net Theabsorption Lisle-Naperville remained market positive showed inthe the lowest fourth overall quarter, vacancy but rate was of significantlyall the markets, lower ending than 2011 2011at at 873,622 17.1 squarepercent, feet, while bringing the Northwest the year-end market ended total to2011 446,554 with the square highest feet. overall Asking vacancy rents at 26.9 were percent. reduced by $0.46 Theper overall square sublease foot tovacancy $15.65 rate per also square decreased foot, toindicative 1.5 percent, of adown tenant-favorable from 2.1 percent market. at the end of 2010.The Chicago market has undergone significant changes this year with major stores such as Borders and Best Buy closing locations while new retailers such as Mariano’s Fresh Market and Ross Dress MARKET INDICATORS LEASE AND SALE ACTIVITY For Less emerged in the Chicago area. A shift in consumer mentality became evident during the year OverallMARKET Chicago INDICATORS Significant 2011 lease transactions include CVS Caremark’s 266,000-square-foot renewal at in response to the economic instability experienced across the nation. Concerns surrounding the Suburban Office Caremark Towers in Northbrook; ACCO Brands’ 189,000-square-foot lease at Kemper Lakes Business Q4 2011 Q4 2012 Centerfuture in Long economic Grove; andoutlook Sysmex’s have 163,000-square-footresulted in a push forlease quality at 555 merchandise Aptakisic Road at in a Lincolnshire. more economical price. Year-end Year-end 2010 2011 BlackstoneStores Groupthat have LP, the endured world’s andlargest survived private-equity the economic firm, purchased crisis haveDuke begunRealty Corp.’sto transform suburban the way they VACANCY 8.5% 8.3% VACANCY 22.4% 22.3% officeoperate holdings in order in to U.S. appeal cities to customer including preference Chicago, Dallasthat not and only Atlanta must inmeet the quality fourth guidelines quarter. The but also 79-propertyfinancial purchase expectations included as Riverway, well. Embracing a 858,711-square-foot, E-commerce three is buildinga prime propertyexample in ofRosemont; this adaptation on the RENTS $16.11 $15.65 ABSORPTION 866,345 sf -173,897 sf O’Harepart International of retailers Office who now Center, offer a 516,779-square-foot, consumers price-matching two-building onlineproperty and in Rosemont;brought technology Atrium to their INVENTORY 494,678,173 507,719,111 II, a stores100,952-square-foot for a more interactive property in shoppingArlington Heights; experience. and Executive Other stores Towers such West, as a 653,727-square- Target and Wal-Mart began GROSS ASKING $ 2 0 . 5 4 p s f $20.42 psf RENTS foot,targeting three-building urban asset shoppers, in Downers building Grove. stores in downtown Chicago, marketing produce and other foods 500to Park help Boulevard, off-set the a 450,614-square-foot increased cost of rentalproperty obligations. and One Pierce Place, a 578,737-square-foot INVENTORY 105,886,979 sf 105,605,209 sf property, both in Itasca, were recently purchased both by Long Wharf Real Estate Partners, LLC for $73.8 million ($71.65 per square foot). NetNET Absorption ABSORPTION & Vacancy & VACANCY CHICAGO OVERALL The NorthwestOverall Chicago market Retail also Market witnessed numerous non-traditional sales in 2011, while the Lisle- 10.0% 9,000,000 Naperville market 8,226,220witnessed various user sales. 9.0% 8,000,000 8.8% 8.4% 8.4% 8.4% ABSORPTION8.0% 7.9% 7,000,000 Overall net absorption in 2011 totaled 7.0% 7.0% 6,000,000 negative 173,897 square 5,124,956 feet, 6.0% 5,000,000 compared to positive 866,345 square feet at the5.0% end of 2010. While overall 4,000,000 year-end4.0% absorption was negative, 3,000,000 1,868,112 1,795,931 quarterly3.0% absorption was positive, 2,000,000

ending the2.0% fourth quarter with 137,174 446,554 1,000,000

square feet.1.0% 0 (54,974) Class A properties0.0% ended the year on -1,000,000 2007 2008 2009 2010 2011 2012 YTD a positive note with year-to-date absorptionSource: of Costar; 374,697 Colliers square Research feet. Absorption Vacancy

555 APTAKISIC ROAD LINCOLNSHIRE, IL

www.colliers.com/chicago

www.colliers.com/chicago RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

O’HARE The O’Hare submarket displayed substantial improvement by ending the fourth quarter with a 7.3 percent vacancy rate compared to 9.1 percent at the end of 2011. The reduction can be mostly attributed to shopping centers where a 3.0 percent decline in vacancy was reported over the last year. Despite reporting negative 6,782 square feet of net absorption in the fourth quarter, the submarket ended the year with positive 873,622 square feet of absorption. Weighted average asking rates were reported this quarter at $13.52 per square foot down $2.00 per square foot from the prior year. Super regional/regional malls had the largest spike in asking rents increasing from $29.42 per square foot last year to $35.50 per square foot at year end. One of the most discussed retail projects this year in the O’Hare submarket was the development of The Park at Rosemont which opened in the spring of 2012. The Park at Rosemont is a 200,000 square foot entertainment complex, directly off interstate 294, comprised of restaurants, bars, a THE PARK AT ROSEMONT comedy club, skating rink and bowling venue which are all strategically placed next to the Muvico 18 ROSEMONT, IL movie theatre. The development has already helped generate more business and tourism. Another new project, Fashion Outlets of Chicago will be located just east of interstate 294 and is a 550,000- -square foot discount luxury shopping center set to open in the spring of 2013. As of September 2012 the mall executives already had 80% of the complex leased including four anchor tenants: Saks Off 5th, Neiman Marcus, Bloomingdale’s and Forever 21.

AskingASKINGAsking Net Gross RentalNET Rental RENTALRates Rates RATES CHICAGO OVERALL OverallOverall Chicago Chicago Retail Retail Market Market 18.5018.50 18.1518.15 18.0018.00 17.5417.54 17.3217.32 17.5017.50

17.0017.00 16.58 16.5016.50 16.2116.21 15.84 15.84 16.0016.00

15.50 15.50

15.00 15.00

14.50 2007 2008 2009 2010 2011 2012 YTD 14.50 2007 2008 2009 2010 2011 2012 YTD Source: Costar; Colliers Research Source: Costar; Colliers Research

NORTHWEST The Northwest submarket looked optimistic in the fourth quarter of 2012 with positive absorption of 127,935 square feet. The vacancy rate remained stagnant at 10.7 percent during the year while asking rates decreased by $0.75 per square foot to $14.50 per square foot. A notable fourth quarter lease transaction was TJ Maxx/Homegoods’ 50,000-square-foot lease at Deer Grove Center in Palatine. The retailer will take occupancy in May of 2013. During the fourth quarter, CalPERS paid more than $500 million for a 50 percent stake in the Woodfield mall leaving them with full ownership, valuing the shopping center at more than $1 billion. The sale brought about discussions across the industry, mostly in a volatile time for malls, helping to increase retailer’s confidence. A month after the purchase CalPERS formed a joint venture with Institutional Mall Investors (IMI) releasing half of its stake to IMI. The property currently carries a $425 million mortgage. NORTH The North submarket showed improvement in 2012 with vacancy rates decreasing from 8.4 percent at year-end 2011 to 8.2 percent at the end of 2012. Specialty centers produced lackluster results with vacancy increasing by 2.7 percent. Absorption remained positive in the fourth quarter with 91,060 square feet, resulting in a positive year-end absorption of 68,771 square feet. Despite vacancy decreasing and absorption remaining positive, weighted average asking rates declined over the last year by $0.11 per square foot to $16.23 per square foot. The North submarket had some notable fourth transactions on both the leasing and acquisitions side. Hawthorn Hills Square, a 193,000-square-foot property in Vernon Hills, sold for $37.5 million in October of 2012 to Kimco Realty Corp. Kimco assumed a $21.6 million mortgage with the property that has PetSmart and Dick’s Sporting Goods as

COLLIERS INTERNATIONAL | P. 2 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

tenants. Another noteworthy transaction involved Party Fantasy leasing 30,000 square feet in part of the largest retail corridor in Mundelein. New development is also in talks for the coming year with Wal-Mart targeting to build a new 151,000-square-foot store in Northbrook and Dave & Buster’s aiming to renovate Hawthorn Mall in Vernon Hills. Their plans currently consist of opening a 4,000- square-foot facility that would be attached to the mall. WESTERN EAST/WEST CORRIDOR The Western East/West corridor picked up momentum during the fourth quarter, ending the year with a 10.0 percent vacancy rate compared to 11.3 percent in 2011. Power centers helped to fuel the drop in vacancy by producing a 4.0 percent decline over last year. Net absorption remained positive with 263,845 square feet and weighted average lease rates reside at $15.49 per square foot - down $0.80 per square foot from 2011. JP Morgan Chase Bank purchased a 4,468-square-foot building in Yorkville from LM Properties II 1 LLC for $818.15 per square foot, making it one of the largest acquisitions in the fourth quarter. Another notable fourth quarter transaction occurred when Art Van Furniture, a Michigan-based retailer, was introduced to the Western East/West Corridor by leasing 56,638 square feet in Aurora. Plans were first announced in the second quarter of 2012 to enter the Chicago market and expand over the next five years. Leading into the new year, downtown Naperville is a topic of discussion with plans to develop a hotel with a rooftop restaurant, 62 apartments, plus additional retail and office spaces along with a parking deck. City officials are concerned over the impact it will create in Naperville’s historic downtown area, mostly regarding parking complications and traffic flow. Those opposed to the development are fearful it will change the appearance of downtown which is known for its charismatic retail environment while those in favor of it are arguing

HAWTHORN MALL it will help to bring in new tourism and set the standard for the next generation. Batavia is also VERNON HIIS, IL anticipating Wal-Mart, located on the corner of Fabyan Parkway and Randall Road, to expand in 2013 to include a full-service grocery store. The 35,911-square-foot expansion will bring the store to a total size of 189,343 square feet.

Net Absorption By Market CHICAGO OVERALL OverallNET ChicagoABSORPTION Retail Market BY MARKET Q4 2012

364,903 400,000

300,000

200,000 152,316 91,060 91,863 100,000 47,281 24,290 26,575 0 (6,782)

(73,587) (100,000) (124,353) (200,000) O'Hare Northwest North Near West East/West Metro North South Indiana Kenosha Corridor Chicago Chicago Chicago County

Source: Costar; Colliers Research

EASTERN EAST/WEST CORRIDOR The Eastern East/West corridor remained steady in the fourth quarter with 8.5 percent vacancy, marking only a 0.4 percent decline over last year. Weighted average lease rates increased to $16.77 per square foot in the fourth quarter from $16.36 per square foot last year, while net absorption was positive 101,058 square feet. One of the largest fourth quarter leasing transactions involved Wal-Mart expanding its Darien store to a Super Wal-Mart. The 35,984-square-foot expansion helped Wal-Mart to obtain a $4 million tax rebate from the city of Darien. The big box retailer decided to expand the store in order to become a one-stop shop for customers. Elmhurst is looking forward to 2013 when a Mariano’s Fresh Market is expected to build a 70,000- to 80,000-square-foot store at 678 N. York Road. The store is expected to bring consumers back to an area that was plagued by vacancy in recent years.

COLLIERS INTERNATIONAL | P. 3 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

CENTRAL LOOP The Central Loop submarket looked sluggish in the fourth quarter with vacancy rates increasing to 9.9 percent, resulting in a 1.2 percent rise over fourth quarter of 2011. Despite the fact that vacancy increased, asking rents rose by $0.02 per square foot at the end of 2012 to $38.43 per square foot. Net absorption fell to -19,726 square feet resulting in a year end total of -20,900 square feet. Despite lackluster fourth quarter results, the Central Loop did have some significant activity. In November, Old Navy relocated its store one block north on to the former Borders store. The new store size was not disclosed but is smaller than their previous location in order to help with rebranding efforts. Gap is expected to open at the former Old Navy location selling its full line. The Central Loop

CITY TARGET submarket saw some changes in 2012, most notably when the Loop’s new City Target opened in July CHICAGO, IL in the , formerly Carson Pirie Scott. The space, which is located on State Street, is 124,000 square feet on the first and second floors and is conveniently located near public transit. The infamous Block 37 mall experienced some changes in 2012 when CIM Group bought the embattled shopping center with plans to add hotel rooms and apartment units atop the building. The complex was plagued in 2012 with tenants vacating while citing low foot traffic as the reason to relocate.

RIVER NORTH Vacancy in the River North submarket declined to 3.5 percent during 2012 as compared to 4.2 percent in 2011. Net absorption was -18,071 square feet with weighted average asking rents escalating to $21.78 per square foot, compared to $20.46 per square foot last year. The River North submarket didn’t experience any significant transactions in the fourth quarter, but there were some notable store openings. Minotti, who partnered with Orange Skin, opened a 2,300-square-foot showroom for its Italian furniture line in November; Revive Hydration Clinic opened a 2,500-square-foot treatment center to help keep consumers hydrated year-round; and Trunk Club opened its 30,000-square-foot office headquarters, offering online male shoppers a genuine personal shopper.

WEST LOOP The West Loop submarket gained momentum in the fourth quarter of 2012 with a 0.9 percent decline in vacancy over last year, resulting in a 3.5 percent vacancy rate. Net absorption was -4,800 square feet and weighted average asking rates were $23.75 per square foot, up slightly from the $22.10 per square foot rate posted in 2011. Fourth quarter discussions surrounded the development site that was originally intended to house a 44-unit condominium tower at 375 N. Morgan Street. Developer Fred Latsko purchased the property in September 2012 from American Chartered for $1.4 million, a significant discount from the bank, which was holding a $3.4 million note on the property. Latsko has been in discussions with Akira and an un-named Midwest-based craft brewer about opening outlets in the location. Retail development could be a challenge since the location would require consumers to cross the train tracks.

WeightedNET Average ABSORPTION Asking Lease BYRates PROPERTY By Property TYPEType CHICAGO OVERALL Overall Chicago Retail Market Q4 2012

$25.00

$20.77 $20.77 $20.00 $16.18 $15.34 $15.18 $15.00

$10.00

$5.00

$0.00 SUPER POWER CENTERS SHOPPING CENTERS SPECIALTY CENTERS GENERAL RETAIL REGIONAL/REGIONAL MALLS Source: Costar; Colliers Research

COLLIERS INTERNATIONAL | P. 4 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

EAST LOOP Vacancy in the East Loop submarket decreased by 0.7 percent in the fourth quarter to 2.2 percent over 2011, with general retail being the result of the decline. All other retail types remained stagnant in the fourth quarter. Net absorption fell to -9,721 square feet, ending the year at a negative 36,856 square feet. General retail was the result of the decrease in vacancy this quarter, all other retail types remained stagnant. Weighted average asking lease rates increased by $1.55 per square foot to $50.77 per square foot. There were no significant fourth quarter acquisitions or leasing transactions to report in the East Loop.

BLOCK 37 NORTH MICHIGAN AVENUE CHICAGO, IL The North Michigan Avenue submarket produced troubling fourth quarter results. Vacancy rates increased to 8.3 percent, representing a 1.2 percent increase over 2011. Vacancy in shopping centers increased by 20.7 percent fromn 2011. Net absorption totaled positive 38,592 square feet and weighted average asking rents decreased by $3.54 per square foot over last year to $45.42 per square foot. Despite discouraging results, North Michigan Avenue did yield some noteworthy lease and sale transactions in the fourth quarter. Eataly, an Italian food market, signed a 10-year lease for 60,000 square feet at 32 E. Ohio, in the former ESPN Zone space. Eataly is expected to open in September of 2013. Another significant transaction was the acquisition of retail space at 919 N. Michigan Avenue, commonly known as the . TIAA-CREF purchased the 51,000- square-foot retail space from Ross Hilton Kemper for $1,762.75 per square foot, making it one of the largest transactions of the year. Current retailers in the space include Louis Vuitton at 7,400 square feet and St. John Clothing at 9,380 square feet.

Weighted Average Asking Lease Rates By Market CHICAGO OVERALL OverallWEIGHTED Chicago AVERAGERetail Market ASKING LEASE RATES BY MARKET Q4 2012

$40.00 $33.95 $35.00

$30.00

$25.00 $20.34 $20.00 $16.23 $16.21 $15.92 $16.88 $14.50 $15.08 $13.52 $15.00 $10.63 $10.00

$5.00

$0.00 O'Hare Northwest North Near West East/West Metro North South Indiana Kenosha Corridor Chicago Chicago Chicago County

Source: Costar; Colliers Research

WEIGHTEDWeighted Average AVERAGE Asking ASKING Lease LEASERates By RATES Property BY TypePROPERTY TYPE CHICAGO OVERALL Overall Chicago Retail Market Q4 2012

$25.00

$20.77 $20.77 $20.00 $16.18 $15.34 $15.18 $15.00

$10.00

$5.00

$0.00 SUPER POWER CENTERS SHOPPING CENTERS SPECIALTY CENTERS GENERAL RETAIL REGIONAL/REGIONAL MALLS Source: Costar; Colliers Research

COLLIERS INTERNATIONAL | P. 5 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

A LOOK BACK 2012 validated initial economists’ predictions of a rebounding economy, albeit slowly. Unemployment rates decreased in the U.S. to 7.8 percent, a four-year low; while the economy began to recover with consumer spending up 11.8 percent from the previous year. 2012 provided both challenges and optimism surrounding topics such as the presidential election, Hurricane Sandy, the fiscal cliff and the impending health care plan implemented by President Obama, to name a few. However, the U.S. housing market was another topic of discussion which is providing optimism for the forthcoming year. With home prices on the rise and housing inventory decreasing economists are predicting a steady increase in real estate activity over the next few years. The most upsetting news for retailers in 2012 resulted from lackluster retail sales in the 2012 holiday season. Initial indicators were projecting a potential 4 percent increase over previous year’s sales, while actual figures are showing only a 0.7 percent increase. Many attribute this to both Hurricane Sandy as well as the looming decision on the fiscal cliff. The decline in sales is worrisome for retailers, but the abundance of inventory is the largest concern. Retailers are now forced to discount merchandise, in some cases more than they typically would, to help with inventory management. Holiday shopping typically accounts for roughly 20 percent of annual retail sales, in some cases more. Stalled sales could result in many retailers halting growth plans for their businesses which in turn will affect commercial real estate.

BEYOND THE NUMBERS Trends that were beginning to take place in 2012 will continue through 2013. E-Commerce will continue to change the way retailers think and conduct their businesses. We have already seen this adaption made by numerous stores, and those who have yet to introduce this trend will be left behind. Retail also began taking a turn this past year towards redefining shopping centers by introducing more entertainment and restaurants. It is projected that this will be an ongoing trend and will reshape the way developers are thinking of shopping centers. New retail development is also anticipated to be a focal point in 2013, mostly occurring in urban areas. In the past, retail development has been slow in these areas, but with young consumers shying away from purchasing homes and migrating to city living it is becoming increasingly popular to grocers, specialty stores and discount chain stores. Chicago has seen a shift with this by introducing grocers within the Loop area such as Mariano’s Fresh Market and Target. Burlington Coat Factory also introduced its State Street store this past year. Most notably is the evolution of Chicago’s iconic . High-end retail is now starting to be mixed with lower end retailers such as Forever 21 and Ann Taylor Loft. Retailers and developers alike will continue to move with this trend so long as consumer demand is there. According to a survey by Deloitte Consulting LLP, 50 percent of respondents felt as though the economy will improve in 2013 with most believing their personal financial situation is improving over the prior year. Regardless of this optimism, the first quarter of 2013 is not anticipated to yield positive results for retailers due to consumers recovering from holiday spending; more precisely credit card debt, as well as the impending payroll tax increase placed on a percentage of workers. The effects of the election and fiscal cliff have yet to show in the numbers but will likely impact the first quarter negatively.

COLLIERS INTERNATIONAL | P. 6 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

SIGNIFICANT LEASING TRANSACTIONS | Q4 2012

TENANT ADDRESS SUBMARKET SIZE (SF) Eataly 32 E. Ohio, Chicago North Michigan Avenue 60,000 Art Van Furniture 301 S. Route 59, Aurora East/West Corridor 56,638 TJ Maxx Homegoods 605-715 E. Dundee Road, Palatine Northwest 50,000 Whole Foods 15080 S. LaGrange Road, Orland Park South Suburbs 49,219 Nordstrom Rack 1551 N. Sheffield Avenue, Chicago North Chicago 40,000 Walmart* 2189 75th Street, Darien East/West Corridor 35,984 Party Fantasy 340 Townline Road, Mundelein North 30,000 *Expansion

SIGNIFICANT SALE TRANSACTIONS | Q4 2012

BUYER / SELLER ADDRESS SUBMARKET SIZE (SF) TOTAL PRICE PRICE/SF TIAA-CREF / Ross Hilton Kemper 919 N. Michigan Avenue, Chicago North Michigan Avenue 51,000 $89,900,000 $1,762.75 Newcastle Ltd / Private Investor* 1510 N. Damen Avenue, Chicago North Chicago 16,400 $13,200,000 $804.88 Walgreen Co / KF Dempster LLC 3939 W. Dempster, Skokie North 13,125 $11,259,862 $857.89 811 LLC / Private Investor 811 Madison Street, Oak Park Near West 13,000 $13,605,949 $1,046.61 Newcastle Ltd / First Development Corporation 3300 N. Street, Chicago North Chicago 12,500 $7,000,000 $560.00 L3 Capital LLC / First Development Corporation* 3430 N. Southport Avenue, Chicago North Chicago 12,239 $7,450,000 $608.71 STORE Capital / Private Investor** 2936 N. Sheffield Avenue, Chicago North Chicago 5,412 $4,028,500 $744.36 DRW Trading / Private Investor 1003 N. , Chicago North Chicago 4,968 $12,350,000 $2,485.91 JP Morgan Chase Bank NA / LM Properties II 1 LLC 110 E. Veterans Parkway, Yorkville East/West Corridor 4,468 $3,655,500 $818.15 STORE Capital / Private Investor** 1510 N. , Chicago North Chicago 2,300 $5,371,500 $2,335.43

*Multi-Building Sale **Sale-Leaseback

COLLIERS INTERNATIONAL | P. 7 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

CHICAGO RETAIL MARKET OVERVIEW | Q4 2012 EXISTING PROPERTIES VACANCY ABSORPTION CONSTRUCTION RENTS SALES

Total Vacancy Total Vacancy Net Absorption Net Absorption Under Construction Weighted Avg. Quoted Lease Weighted Avg. Quoted Lease Weighted Average Market / Property Type Total Inventory SF Rate Current Qtr Rate 4th Qtr 2011 Current Qtr SF YTD Current Qtr SF Rates Current Qtr PSF Rates 4th Qtr 2011 PSF Sales Price PSF O’HARE Super Regional / 606,295 0.6% 0.5% 0 (717) 0 $35.50 $29.42 $373.18 Regional Mall Power Centers 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 Shopping Centers 3,757,113 11.6% 14.6% 42,112 91,550 0 $13.25 $14.69 $0.00 Specialty Centers 1,260,075 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 4,280,653 6.6% 8.0% (48,894) (29,522) 538,000 $13.63 $18.90 $0.00 Subtotal 9,904,136 7.3% 9.1% (6,782) 873,622 538,000 $13.52 $15.52 $373.18 NORTHWEST Super Regional / 8,069,121 2.2% 1.8% (2,021) 6,017 0 $6.50 $11.08 $0.00 Regional Mall Power Centers 6,519,824 9.7% 11.0% 33,347 (4,467) 0 $12.54 $14.57 $0.00 Shopping Centers 36,001,868 14.3% 14.9% 36,837 54,917 0 $14.87 $15.48 $109.92 Specialty Centers 504,712 0.7% 0.3% 0 (1,910) 0 $0.00 $0.00 $0.00 General Retail 31,561,279 9.0% 8.2% 59,772 (76,438) 47,281 $12.67 $13.19 $0.00 Subtotal 82,656,804 10.7% 10.7% 127,935 (21,881) 47,281 $14.50 $15.25 $109.92 NORTH Super Regional / 10,536,595 2.1% 2.3% 978 (50,518) 0 $23.49 $24.38 $0.00 Regional Mall Power Centers 4,100,401 4.0% 3.8% 4,212 33,269 0 $9.62 $11.27 $0.00 Shopping Centers 20,143,996 10.8% 10.6% 1,447 (40,663) 0 $16.03 $15.78 $646.91 Specialty Centers 299,538 4.5% 1.8% (2,634) (8,145) 0 $0.00 $0.00 $0.00 General Retail 16,945,177 10.1% 10.8% 87,057 134,828 100,000 $15.21 $14.47 $0.00 Subtotal 52,025,707 8.2% 8.4% 91,060 68,771 100,000 $16.23 $16.34 $646.91 NEAR WEST Super Regional / 1,111,322 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 Regional Mall Power Centers 1,905,675 2.6% 2.9% (500) 7,242 0 $15.85 $15.93 $0.00 Shopping Centers 4,664,755 10.7% 7.3% (177,502) (166,061) 0 $17.03 $18.04 $163.64 Specialty Centers 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 9,582,739 9.5% 9.3% 53,649 10,265 0 $14.68 $16.39 $1,046.61 Subtotal 17,264,491 8.5% 7.4% (124,353) (148,554) 0 $16.21 $17.25 $228.12 EAST/WEST CORRIDOR Super Regional / 6,817,476 6.9% 7.6% 8,391 34,153 0 $6.25 $5.76 $0.00 Regional Mall Power Centers 6,532,338 6.9% 9.4% (573) 52,987 0 $16.88 $18.93 $0.00 Shopping Centers 28,915,361 13.2% 13.3% 121,129 101,541 0 $16.39 $16.96 $392.05 Specialty Centers 628,245 1.0% 0.0% (6,000) (6,000) 0 $32.00 $0.00 $91.66 General Retail 28,036,274 7.1% 8.7% 241,956 427,386 30,404 $14.90 $14.64 $344.82 Subtotal 70,929,694 9.5% 10.5% 364,903 610,067 30,404 $15.92 $16.31 $174.88 METRO CHICAGO Super Regional / 1,635,052 8.1% 7.8% 0 (5,725) 0 $31.45 $31.45 $0.00 Regional Mall Power Centers 303,774 0.0% 12.3% 0 (899) 0 $31.10 $31.10 $0.00 Shopping Centers 687,573 15.7% 9.6% (1,407) (34,578) 0 $0.00 $1.04 $0.00 Specialty Centers 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 22,909,874 5.6% 5.7% 93,270 120,855 120,236 $33.55 $36.47 $1,635.82 Subtotal 25,536,273 6.0% 6.0% 91,863 79,653 120,236 $33.95 $34.52 $1,635.82

COLLIERS INTERNATIONAL | P. 8 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

CHICAGO RETAIL MARKET OVERVIEW | Q4 2012 (CONTINUED) EXISTING PROPERTIES VACANCY ABSORPTION CONSTRUCTION RENTS SALES

Total Vacancy Total Vacancy Net Absorption Net Absorption Under Construction Weighted Avg. Quoted Lease Weighted Avg. Quoted Lease Weighted Average Market / Property Type Total Inventory SF Rate Current Qtr Rate 4th Qtr 2011 Current Qtr SF YTD Current Qtr SF Rates Current Qtr PSF Rates 4th Qtr 2011 PSF Sales Price PSF NORTH CHICAGO Super Regional / 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $350.98 Regional Mall Power Centers 1,652,086 1.7% 3.2% 602 24,584 0 $18.00 $17.43 $0.00 Shopping Centers 8,521,891 9.6% 9.8% 22,653 52,786 0 $19.02 $18.43 $560.00 Specialty Centers 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 60,307,995 5.4% 5.8% 129,061 331,645 115,174 $20.63 $20.37 $574.66 Subtotal 70,481,972 5.8% 6.3% 152,316 409,015 115,174 $20.34 $20.04 $492.30 SOUTH CHICAGO Super Regional / 1,532,147 1.6% 0.0% 1,734 14,284 0 $18.46 $14.50 $0.00 Regional Mall Power Centers 487,806 7.8% 7.3% 0 0 0 $0.00 $0.00 $0.00 Shopping Centers 8,951,554 8.3% 7.7% (10,867) (107,399) 150,000 $18.73 $18.51 $112.00 Specialty Centers 80,000 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 32,993,260 5.3% 6.3% 33,423 254,091 115,299 $15.91 $17.27 $496.75 Subtotal 44,044,767 5.8% 6.4% 24,290 160,976 265,299 $16.88 $17.61 $145.18 SOUTH SUBURBAN Super Regional / 8,707,156 7.5% 8.4% 5,274 (184,992) 0 $0.00 $7.24 $335.58 Regional Mall Power Centers 9,302,581 5.6% 5.6% 14,540 (37,147) 0 $17.63 $16.21 $115.47 Shopping Centers 33,461,550 12.8% 13.0% 51,808 63,337 357,000 $15.54 $15.78 $59.96 Specialty Centers 141,168 5.7% 0.0% 0 (550) 0 $6.19 $0.00 $0.00 General Retail 32,536,260 7.8% 7.6% (8,502) (10,059) 18,079 $13.83 $13.93 $0.00 Subtotal 84,148,715 9.5% 9.7% 63,120 (169,411) 375,079 $15.08 $15.14 $109.48 INDIANA Super Regional / 2,335,864 0.1% 0.2% 2,000 2,000 0 $0.00 $17.30 $0.00 Regional Mall Power Centers 1,771,536 1.8% 1.6% (1,200) (3,447) 0 $25.00 $25.00 $0.00 Shopping Centers 13,240,477 11.0% 11.1% (29,130) (64,773) 0 $11.37 $12.05 $0.00 Specialty Centers 16,756 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 General Retail 24,796,845 6.2% 5.6% 54,905 (33,364) 3,400 $9.22 $10.59 $0.00 Subtotal 42,161,478 7.2% 6.9% 26,575 (99,584) 3,400 $10.65 $11.60 $0.00 KENOSHA COUNTY Super Regional / 0 0.0% 0.0% 0 0 0 $0.00 $0.00 $0.00 Regional Mall Power Centers 1,170,627 16.9% 9.5% (1,232) (11,374) 0 $12.32 $12.17 $0.00 Shopping Centers 1,890,930 9.3% 7.7% (51,419) (47,256) 0 $11.83 $13.48 $0.00 Specialty Centers 406,325 0.0% 0.0% 0 0 0 $0.00 $0.00 $113.31 General Retail 5,097,192 8.9% 8.2% (20,936) (18,111) 2,968 $8.18 $8.38 $0.00 Subtotal 8,565,074 9.7% 7.9% (73,587) (76,741) 2,968 $10.63 $10.90 $113.31 AREA TOTAL Super Regional / 0 4.1% 4.3% 16,356 (185,498) 0 $20.77 $21.69 $366.80 Regional Mall Power Centers 1,170,627 6.4% 7.0% 49,196 60,748 0 $15.34 $16.32 $115.47 Shopping Centers 1,890,930 12.2% 12.3% 5,661 (96,599) 507,000 $15.18 $15.68 $147.03 Specialty Centers 406,325 0.9% 0.7% (8,634) (16,605) 0 $20.77 $14.87 $98.90 General Retail 5,097,192 6.9% 7.1% 674,761 1,111,576 1,090,841 $16.18 $16.45 $956.03 TOTAL 507,719,111 8.3% 8.5% 737,340 873,622 1,597,841 $15.65 $16.11 $243.61

COLLIERS INTERNATIONAL | P. 9 RESEARCH REPORT | YEAR-END 2012 | CHICAGO | RETAIL

522 offices in 62 countries on 6 continents

United States: 147 Canada: 37 Asia: 36 Australia/New Zealand: 165 Latin Ameria: 19 EMEA: 118

> $1.8 billion in annual revenue > 1.25 billion square feet under management > Over 12,300 professionals

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RESEARCHER: Colliers | Chicago Stephanie Bujwit Financial Analyst Colliers International | Chicago 6250 N. River Road, Suite 11-100 Rosemont, IL 60018 TEL +1 847 698 8294 [email protected]

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