Demand for Industrial Increases Once Again Chicago Industrial Market Update & Forecast – Q2 2019 Prepared for

Chicago is the second largest industrial market in the US Greater Los Angeles 1.6 Billion SF New York City Metro 810 Million SF Dallas-Fort Worth 800 Million SF Detroit 723 Million SF Atlanta 690 Million SF Houston 550 Million SF Philadelphia- Lehigh Valley 448 Million SF Cleveland 397 Million SF Chicago 1.4 Billion SF San Francisco Bay Area 384 Million SF

Net absorption on pace for another strong year

Net absorption keeping pace with new development Compare to 2016 when Amazon leased 4.4 million SF in the market. This year was actually stronger even without the Amazon effect.

I-55 Corridor leads absorption through first half of 2019 Compare to 2016 when Amazon leased 4.4 million SF in the market. This year was actually stronger even without the Amazon effect.

Build-to-suit completions recently playing minor role BTS completions positively impact net absorption Only 4.1 million SF of BTS completions in 2018, compared to 11.4 million SF in 2017 Smaller percentage of net absorption recorded were BTS completions The remainder was the net of everything else – new leases, lease expansions, new vacancies, etc.

Overall vacancy rate declines for 7th consecutive quarter 19 BPS year-over-year Bumped up in 2017 due to spec completions. Has since resumed its decline. We’re well below where we were during the last “good market” cycle. While we’ve seen a little less in terms of spec construction, demand has actually be stronger than in 2005-2007.

Infill submarket vacancy rates near all-time lows 7.8% I-290 North 4.3% North Suburbs 3.7% Central DuPage 3.6% O'Hare Bumped up in 2017 due to spec completions. Has since resumed its decline. We’re well below where we were during the last “good market” cycle. While we’ve seen a little less in terms of spec construction, demand has actually be stronger than in 2005-2007.

Vacancy rates starting to recover in submarkets with significant spec development 11.2% I-80 Joliet Corridor 8.3% I-55 Corridor 7.4% Southeast Wisconsin Bumped up in 2017 due to spec completions. Has since resumed its decline. We’re well below where we were during the last “good market” cycle. While we’ve seen a little less in terms of spec construction, demand has actually be stronger than in 2005-2007.

Vacancy rates vary by product type 6.3% Overall Chicago market vacancy rate “Big box” vacancy rate 200,000+ SF | 28+ clear | precast 8.6% “Big box” vacancy rate – removing I-80 product 200,000+ SF | 28+ clear | precast 6.3% If you remove recently-completed spec product in I-55, it drops even further to 5.8%.

New leasing activity increases for third quarter in a row Compare to 2016 when Amazon leased 4.4 million SF in the market. This year was actually stronger even without the Amazon effect.

2 in second-generation space 1 in second-generation space Where Did Chicago’s Giant Industrial Deals Go? Industrial deals greater than 500,000 square feet since 2016 2016 2017 2018 2019 YTD 14 new deals 500k+ SF 5 new deals 500k+ SF 8 new deals 500k+ SF 4 new deals 500k+ SF 5 in new spec 1 in new spec 2 in new spec 7 build-to-suit 2 build-to-suit 1 build-to-suit 2 in second-generation space 1 in second-generation space If you remove recently-completed spec product in I-55, it drops even further to 5.8%.

2019 YTD – largest new leases signed UNIS Logistics 826,755 SF Joliet, IL New lease Fresenius Kabi 590,525 SF Pleasant Prairie, WI Build-to-suit lease Wholesale Interiors 549,588 SF Aurora, IL Sublease Silgan Containers 524,339 SF Kenosha, WI New lease FedEx Corporation 469,920 SF Romeoville, IL New lease Lennox International Inc. 384,768 SF Romeoville, IL New lease Bed Bath & Beyond 361,176 SF Bolingbrook, IL New lease First Logistics 331,059 SF Chicago, IL New lease Whirlpool was actually a renewal in 750,000 SF and an expansion of 250,000 SF, but we included due to the sheer size of the transaction. 3 new leases greater than 600,000 SF in 2018, but they were all BTS deals. The largest new lease in a spec building was Home Depot’s lease in Northlake.

2018 – largest new leases signed Whirlpool Corporation 1,001,184 SF Joliet, IL Lease expansion/renewal S&S Activewear 750,314 SF Lockport, IL Build-to-suit lease Kellogg’s 705,661 SF Minooka, IL Build-to-suit lease Berner Food & Beverage 675,840 SF Rockford, IL Build-to-suit lease The Home Depot 588,233 SF Northlake, IL New lease Glanbia 452,153 SF North Aurora, IL New lease Dart Warehouse 429,756 SF North Aurora, IL New lease Expeditors 423,726 SF Streamwood, IL New lease Whirlpool was actually a renewal in 750,000 SF and an expansion of 250,000 SF, but we included due to the sheer size of the transaction. 3 new leases greater than 600,000 SF in 2018, but they were all BTS deals. The largest new lease in a spec building was Home Depot’s lease in Northlake.

2017 – largest new leases signed Kenco Logistics Services, LLC 599,317 SF Monee, IL New lease CTDI, Inc. 501,313 SF Joliet, IL New lease Central American Group, Ltd. 500,160 SF Romeoville, IL New lease Amazon.com 438,150 SF Crest Hill, IL New lease Richwill Enterprises, Inc. Richwill Enterprises, Inc. 388,262 SF Alsip, IL Sublease Samsung 352,338 SF Bolingbrook, IL New lease Expeditors International 310,458 SF Franklin Park, IL New lease Madden Communications 301,174 SF Somers, WI New lease No leases over 600,000 SF in 2017

2016 – largest new leases signed General Mills 1,507,545 SF Wilmington, IL BTS lease Georgia-Pacific 1,000,560 SF University Park, IL BTS lease Amazon.com 954,720 SF Aurora, IL BTS lease Amazon.com 856,605 SF Monee, IL BTS lease Amazon.com 767,161 SF Romeoville, IL New lease Reviva Logistics Amazon.com 746,772 SF Joliet, IL New lease Reviva Logistics 728,044 SF Monee, IL New lease MOM Brands 719,542 SF Wilmington, IL New lease Amazon.com 626,848 SF Waukegan, IL New lease Best Buy 615,160 SF Bolingbrook, IL BTS lease The top 10 leases in 2016 were all over 600,000 SF, 5 of which were BTS deals. Recall that leasing activity was stronger in 2018 than 2016, which tells you that a significant amount of smaller new leases were signed.

2019 deliveries outpacing last year, especially spec *Year-to-date The top 10 leases in 2016 were all over 600,000 SF, 5 of which were BTS deals. Recall that leasing activity was stronger in 2018 than 2016, which tells you that a significant amount of smaller new leases were signed.

The most recently-completed spec projects are largely vacant The top 10 leases in 2016 were all over 600,000 SF, 5 of which were BTS deals. Recall that leasing activity was stronger in 2018 than 2016, which tells you that a significant amount of smaller new leases were signed.

New spec vacancy rate dropping despite new supply The top 10 leases in 2016 were all over 600,000 SF, 5 of which were BTS deals. Recall that leasing activity was stronger in 2018 than 2016, which tells you that a significant amount of smaller new leases were signed.

Rain and precast delays push many deliveries to next quarter The top 10 leases in 2016 were all over 600,000 SF, 5 of which were BTS deals. Recall that leasing activity was stronger in 2018 than 2016, which tells you that a significant amount of smaller new leases were signed.

Spec development during the current cycle