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

2. 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

3. Net absorption on pace for another strong year

4. 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.

5. 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.

6. 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.

7. 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

8. 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

9. 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

10. 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%.

11. 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.

12. 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%.

13. 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.

14. 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.

15. 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

16. 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. Spec development during the current cycle