Global Supply Chain Trends and the Impact on North American Distribution Markets

2 Our Global Platform ProLogis associates around the globe serve more than 4,000 customers in 18 countries Asia  10.5 msf  2 countries  6 markets North America  msf  3 countries  51 markets Europe  msf  13 countries  53 markets 2

World Trade Overview

4 Driving Demand – Global Trade Growth World Trade World GDP Sources: Haver Analytics, ProLogis Growth in World Trade and World GDP,

5 U.S. Imports From China China Admitted to WTO Source: U.S. Census Bureau $US in billions

6 Driving Demand – Seaports vs. Airports Sources: UN Review of Maritime Transport 2006, ACI Traffic Data for 2006, ProLogis analysis *Estimate based on reported cargo volume for Top 30 global airports Seaports handle more than 97% of world cargo by volume Total Cargo Volume billion metric tons.072 billion metric tons* Seaports Airports

Port Growth

8 TEU Growth at Top 15 Container Ports Number of TEUs ,000,000+ 5,000,000+ 2,000,000+ Total TEU 68,300,000

9 Total TEU 211,000,000 Number of TEUs ,000,000+ 5,000, ,000, ,000,000+ TEU Growth at Top 15 Container Ports

10 Top 15 Container Ports Worldwide Port Name Country 1996 RankingTEU (MM) Hong KongChina113.5 Singapore Los Angeles/Long BeachUS35.7 KaohsiungTaiwan45.1 RotterdamThe Netherlands54.9 BusanKorea64.7 HamburgGermany7 3.1 AntwerpBelgium82.7 YokohamaJapan92.3 KeelungTaiwan102.3 TokyoJapan112.3 NY/NJUS DubaiUAE KobeJapan FelixstoweUK152.0 Totals68.3

11 Top 15 Container Ports Worldwide Port Name Country Average % Change RankingTEU (MM)RankingTEU (MM) Singapore % ShanghaiChina % Hong KongChina % ShenzenChina % Los Angeles/Long BeachUS % BusanKorea % RotterdamThe Netherlands % DubaiUAE % KaohsiungTaiwan % HamburgGermany % QingdaoChina % NingboChina % GuangzhouChina % AntwerpBelgium % TianjinChina % Totals %

Container Movement from E. Asia

13 Transit Times 25 SavannahCharleston Atlanta Norfolk Lazaro Cardenas Shanghai 13 Vancouver Oakland 12 Prince Rupert Houston 6 6 Dallas New York 7 7 Toronto 5 5 Chicago LA/ Long Beach Long Beach 13 Tacoma/Seattle

14 North America Port Activity Containers Handled 2006 TEUs (000’s) 2007 TEUs (000’s) Growth Los Angeles / Long Beach15,75915,667-.6% New York/NJ5,1285,2993.3% Seattle / Tacoma4,0543, % Oakland2,3902,388-.1% Vancouver2,2072,3074.5% Savannah2,1602, % Norfolk2,0462,1284.0% Charleston1,8841, % Houston1,6061, % Lazaro Cardenas % Source: Containerization International, port websites

15 North America Container Market Share Source: Containerization International *Some 2007 data estimated

16 Share N.E. Asia – U.S. East Coast Route Source: Panama Canal Authority

Panama Canal Update

18 Panama Canal - Update Photo: Sealand Meteor at the Panama Canal (3,800 TEUs) 48-mile canal built in early 1900s 14,000 ships/year Maximum capacity-container ships ~ 5,000 TEUs Largest container ships being built today carry 10,000+ TEUs US$5 billion expansion approved by Panamanian voters in 2006 Adds new, wider locks Expected to double capacity when completed in 2014 Secondary ports on Gulf Coast and East Coast anticipate surge in traffic following project completion

19 Panama Canal Current Canal lock dimensions: 1000’ x 110’ x 41’ Future Canal lock dimensions: 1400’ x 180’ x 60’

World Trade Impact on NA Distribution Markets

21 Logistics Cost Breakdown Source: Herbert W. Davis and Company, 2006 database 4.4% 1.5% 0.7% 0.2% 1.9% 8.8% 21 *Rent/building cost is 25% of this number.

22 Regional Distribution: Percentage of U.S. Population Within 500 Miles

23                                                                         Population Based Network Model The 10 Best Warehouse Networks Networks with the Lowest Possible “Time-to-Market” Source: Chicago Consulting

24 Major retailers - Import DCs

25 Metrics Driving Industrial Real Estate Demand Key metrics in evaluating top markets for future distribution centers: Proximity to large local population base Physical port capacity for growth in TEUs handled Good road infrastructure from the port Inland ports – intermodal rail connections For export markets, proximity to diverse manufacturing centers Availability and cost of labor, degree of union activity, and risk of labor strikes Frequency and availability of dedicated liner service

26 Future trends as we see it Warehousing moving closer to inland ports/Intermodal Terminals Drayage costs Railroad Service Increasing flexibility in supply chains Diversified Port Strategies- Increase activity for East Coast ports Continually changing sources of supply Distribution Network Adjustments New network rationalization Deconsolidation centers as additions to network

27 Gregory J. Arnold One Capital Drive, Suite 103 Cranbury, NJ Phone: