D a t a C e n t e r M a r k e t O v e r v i e w produced by

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1 Data Center Market Overview produced by

2 Understanding the ecosystem and language of the core infrastructure driving our digital economy has thus become a unique and strategic advantage. Sean Patrick Tario, CEO, OSI 2

3 Ta Incentives *source: Lenio, John and Lynch, Patrick, Impact of Taes & Incentives on Data Center Incentives, CBRE, July Sales and use taes, property taes, and real estate taes all play a role in the total operating costs of data centers. Some states, however, offer incentives that lower the operating cost, or Total Cost of Occupancy (TCO) for both data center developers and clients installing infrastructure within these facilities. Illinois currently DOES NOT offer sales ta incentives that affect data center owner/operators or their clients installing hardware and related infrastructure. 3

4 National Industry Trends *source: IDC trends, ,940,000: Number of data centers in the USA* Epected to DECREASE year over year 2,500: Number of commercial data center facilities within the USA Epected to INCREASE year over year 611,400,000: Total data center sq. ft. within the USA* Epected to INCREASE year over year 90%: Amount of data generated within the past two years as a % of whole Epected to INCREASE year over year 4

5 National Industry Trends C h i c a g o Q 1 : *source: Akamai s State Of The Internet, Q Report, V7, #1. As worldwide internet access increases, IPv6 traffic percentage, top network providers by volume the number of total data centers in the US decreases, but square footage of data centers increases. Cost of energy varies wildly across the nation. Country Network Provider Q1 14 ipv6 traffic % United States Comcast Cable 13% United States Verizon Wireless 45% United States AT&T 11% United States Time Warner Cable 4.7% France Proad/Free 19% Q1 14 Unique ipv4 Addresses Germany Deutsche Telekom 9.2% Q1 14 Unique Q over Q Y Over Y Change Romania RCS & RDS 17% ipv4 Addresses Change Germany Kabel Deutschland 30% Global 795,443, % 7.8% 1 United States 162,676,451 (1.4%) 8.6% 2 China 123,526, % 11% 3 Brazil 41,298,964 12% 50% 4 Japan 40,042,679 (0.8%) (3.3%) 5 Germany 37,176,442 (0.1%) (2.4%) 6 United Kingdom 28,509,857 (0.6%) (1.2%) 7 France 28,451, % 5.7% 8 South Korea 20,987,274 3% (1.6%) 9 Italy 20,021,068 1% (2.4%) 10 Russia 18,752, % 3.3% Belgium Telenet 24% Peru Telefonica Del Peru 7.4% Switzerland Swisscom 20% Japan KDDI Corporation 12% Germany Unitymedia KabelBW 19% United States Hughes Network Systems (DISH Network) 22% Belgium Brutele 24% United States T-Mobile 6.2% Belgium Belgacom 5.9% Malaysia Telekom Malaysia 1.2% Czech Republic o2 (Telefonica) 6.3% Norway Get AS 16% 5

6 National Industry Trends *source: Telegeography, copyright 2014 PriMetrica, Inc. Retail Operators with Largest Amount of New Colocation Site Capacity, (million sq ft) **A number of notable providers are missing from these graphs, such as: QTS = 1M+ sq. ft. NEW and 3M+ sq. ft. GROSS Digital Realty Trust = 1M+ sq. ft. NEW and 24.5M sq. ft. GROSS SABEY = 500K+ sq. ft. NEW and 3M sq. ft. GROSS Coresite Realty Corp = 556K sq. ft. NEW and 3.2M sq. ft. GROSS 6 Largest Colocation Providers by Gross Floor Space 2014

7 National Industry Trends *source: source: CBRE Data Center Solutions Group, Q4 2014, and Akamai s State Of The Internet, Q Report, V7, #1. Q primary wholesale colocation "metered power" market snapshot Market Northern Virginia Phoeni Atlanta Inventory 402 MW 213 MW 127 MW Vacancy 27 MW / 6.7% 4.1 MW / 1.9% 26.2 MW / 20.7% Average Cost By Location AVE COST/kW HOUR North Bay Area, CA $0.12 South Bay Area, CA $0.10 $135-$150 Sacramento, CA $0.10 $145-$165 Los Angeles, CA $0.13 Seattle, WA $0.06 Quincy, WA $0.03 Portland, OR $0.07 Las Vegas, NV $0.08 Rental Rates (kw/mo) $120-$150 Silicon Valley 116 MW 15.9 MW / 13.7% $140-$150 NYC/NJ 122 MW 20.4 MW / 16.7% $145-$160** 115 MW 3.6 MW / 3.2% $145-$165 Phoeni, AZ $0.06 $140-$150 Salt Lake City, UT $0.05 Denver, CO $0.07 Dallas, TX $0.07 Austin, TX $0.06 Dallas/Fort Worth 113 MW 12.1 MW / 10.7% **Quoted rates are outside of NYC proper. NYC (Manhattan) wholesale rates average $225-$300/kW/mo., IL $0.08 Philadelphia, PA $0.10 Miami, FL $0.08 Atlanta, GA $0.06 Richmond, VA $0.06 NYC, NY Secaucus, NJ 7 $ $0.18 $0.13

8 National Industry Trends C h i c a g o Q 1 : *source: Data Center Journal, Volume 32, June, Demand is now booming for the core storage and compute resources required to run the digital economy, with elastic compute IaaS providers making it easier for any programmer with an internet connection and a credit card to start and manage a business online. This has meant great things for those working directly in, or indirectly supporting, the IT industry. Sean Patrick Tario Data Center Journal s Top 5 DC Trends of 2014: 1. Virtualization 2. Smart device mobility 3. Software-defined networks 1% 4. Eponential increase in data to be stored 5. Consumers still think there s a cloud 8

9 Industry Trends C h i c a g o Q 1 : *source: **source: ***source: QTS Enters Market with Former Sun-Times Plant Acquisition QTS said the building can accommodate about 130,000 square feet of raised floor and 24 megawatts of power. The company s redevelopment plans include epanding its size to accommodate about 215,000 square feet of raised floor and 37 megawatts. * Carter Validus Buys Ascent s Data Center for $212M Carter Validus is focused on two sectors, data center and healthcare, citing trends in society it believes will boost demand for data storage and outpatient healthcare. The company acquired acquired $593.2 million in real estate assets in 2013, bringing its total portfolio to $988 million. Of that 2013 total, $589 million was data center assets, compared to $399 million of healthcare facilities. ** CenterPoint Plans 12-Story Data Center Net to Data Hub A number of developers are pursuing new data center projects in downtown, including Ascent Corp. and perhaps QTS Realty. Eisting providers include Digital Capital (725 S. Wells) and Server Farm Realty. *** 9

10 Industry Trends *source: batchgeo.com/ and maps.google.com 41 commercial data centers house 28 different providers in the region 10

11 Network IXP s *source: peeringdb.com. Accessed August 12, List of Major Peering Echanges in and around 11 Echange Name Long Name City/Region Participants Equini Equini Echange 247 ChIX Internet Echange 30 CoreSite - Any2 CoreSite - Any2 15

12 Network IXP s *source: peeringdb.com. Accessed April 4, List of Major Peering Echanges in and around 12 Echange Name Long Name City/Region Participants Equini Equini Echange 298 ChIX United IX - 16 CoreSite - Any2 CoreSite - Any2 18 GCIIX Greater International Internet Echange 4 AMS-IX AMS-IX 2

13 26 26 Austin Houston Denver Charlotte 103 London, UK Honolulu 57 Seattle Portland 55 San Diego San Francisco Las Vegas 51 Los Angeles 45 Phoeni 37 Miami New Orleans Orlando 23 Manhattan Atlanta Cincinnati Dallas Minneapolis 20 Ashburn - POP Washington DC Shanghai, China South Africa Brisbane, AU Hong Kong, China Amazon, Japan Aterdam, Netherlands Kansas City Network Latency *source: twtelecom.com on 6/30/2014. International data from dotcom-monitor.com, accessed 7/18/2014. Latency in milliseconds, from

14 DC Directory Name Retail Wholesale Hosting Location(s) TYPE (TICKER: EXCHANGE) Address City 360TCS Local Private 360 E. 22nd St. Lombard 365 Data Centers National PE Backed 427 S. La Salle St. AlteredScale Local PE Backed 601 W. Polk St. Regional Private 717 S. Desplaines Regional Private 4267 Meridian Pkwy. Aurora National Private REIT 505 N. Railroad Ave. Northlake Ascent - CH3 ByteGrid - CHI1 Carter Validus CenturyLink - CH2 Global Public (CTL: NYSE) 2425 Busse Road Elk Grove Village CenturyLink - CH3 Global Public (CTL: NYSE) 10 S. La Salle St. CenturyLink - CH4 Global Public (CTL: NYSE) 350 E. Cermak Rd. Colo@ National Private 725 S. Wells St. Continuum Data Centers Local Private 603 Discovery Dr. West CoreSite - CH1 National Public REIT (COR: NYSE) 427 S. La Salle St. CyrusOne National Public REIT (CONE: NASDAQ) 1850 Springer Dr. Lombard Digital Capital Partners, LLC Local 725 S. Wells St. Digital Realty Trust 1% Global Private Public REIT (DLR: NYSE) 350 E. Cermak Rd. Digital Realty Trust Global Public REIT (DLR: NYSE) 600 S. Federal St. Digital Realty Trust Global Public REIT (DLR: NYSE) 9333 Grand Ave. Franklin Park 14 Equini - CH1, CH2, CH4 Global Public (EQIX: NASDAQ) 350 E. Cermak Rd. Equini - CH3 Global Public (EQIX: NASDAQ) 1905 Lunt Ave. Elk Grove Village

15 DC Directory Name Retail Wholesale Hosting Location(s) Forsythe Data Centers 15 TYPE (TICKER: EXCHANGE) Address City Local Private Sub of Forsythe Technology 1240 Busse Rd. Elk Grove Village National PE Backed 1808 Swift Dr. Oak Brook Latisys NaviSite Global Subsidiary of TW Cable (TWC: NYSE) 800 Jorie Blvd. Oak Brook NetSource Local Private 2368 Corporate Ln. Naperville Peerless Network Local PE Backed 840 S. Canal St. QTS Realty Trust National Public REIT (QTS: NYSE) 2800 S. Ashland Ave Server Farm Realty National Private 840 S. Canal St. ServerCentral Local Private 2200 Busse Rd. Elk Grove Village ServerCentral Local Private 350 E. Cermak Rd. Steadfast Networks Regional Private 350 E. Cermak Rd. Steadfast Networks Regional Private 725 S. Wells St. Sungard AS - CHI-341 National Private 341 Haynes Drive Wood Dale Sungard AS - CHI-711 National Private 711 North Edgewood Ave. Wood Dale Tel - CHI1 National PE Backed 350 E. Cermak Rd. Tel - CHI2 National PE Backed 600 S. Federal St. Terremark 111 Plaza Dr. Westmont XO National Private 1808 Swift Dr. Oak Brook XO National Private 140 S. Dearborn St. zcolo Zayo Global PE Backed (division of Zayo) 600 S. Federal St. zcolo Zayo Global PE Backed (division of Zayo) 800 E. Business Center Dr. Mount Prospect Global 1% Sub of Verizon Public (VZ: NYSE)

16 continues to serve as the largest interconnction hub in the Midwest. As such, there is a seemingly never ending epansion of mega data center buildouts occuring both downtown within the surrounding suburbs. This reality, coupled with a resurgence of startups in the region, has caused demand for data center and hosting services to boom over the past few years here... and these metrics are showing no signs of slowing any time soon. 16

17 Local Geological Factors *source: Matthew Erickson, Joe Burgess, and Bill Marsh of The New York Times, April 30, Accessed online, nationalatlas.gov data range = No hurricane risk Moderate precipitation Hurricane Risk Average Annual Precipitation (in inches)

18 Local Weather Factors *source: FEMA Earthquake Hazard Maps, Accessed July 11, Low earthquake risk SDC EARTHQUAKE HAZARD A Very small probability of eperiencing damaging earthquake effects. B Could eperience shaking of moderate intensity. C Could eperience strong shaking. D0 D1 Could eperience very strong shaking (the darker the color, the stronger the shaking). D2 E 18 Near major active faults capable of producing the most intense shaking.

19 Local Geological Factors *source: nationalatlas.gov data range = and nationalatlas.gov data range = Moderate thunderstorm risk Thunderstor Number of damage-causing events 11 or Greater Low wildfire risk Wildfires Number of events that resulted in damage 11 or Greater

20 Local Geological Factors *source: nationalatlas.gov data range = and Matthew Erickson, Joe Burgess, and Bill Marsh of The New York Times, April 30, Accessed online High lightning risk Moderate tornado risk Tornado Risk Lightning Number of events that resulted in damage 45 or Greater No Events 20

21 Utility Service Territories C h i c a g o Q 1 : *source: accessed August 13, ComEd Energy Service Area Map 1% 21

22 Energy Fuel Mi C h i c a g o Q 1 : *source: Commonwealth Edison Company, Environmental Disclosure Information: Twelve Months Ending December, 31, Commonwealth Edison Nuclear Natural Gas-Fired Power 26% Power 14% Hydro Power 7% Wind Power 15% Coal-Fired Power Other 7% 31% 22

23 Power Rates *source: eia.gov, Electric Power Monthly. Accessed August 12, 2014 : Average Retail Price of Electricity to Ultimate Consumers by End-Use Sector Residential Commercial 0 1 Cents per Kilowatthour

24 National Power Connections *source: Accessed June 30,

25 National Energy Projections *source: AEO2014 Early Release Rollout Presentation Paul J. Nitze School of Advanced International Studies, Johns Hopkins University December 16, 2013, Washington, DC, by Adam Sieminsky, December 16, 2013 Non-hydro renewable generation more than doubles between 2012 and 2040 Non-hydro renewable generation, billion kilowatt-hours per year Historical Projections

26 National Energy Projections *source: U.S. EIA, Annual Energy Outlook 2014 Early Release Overview Delivery Energy Consumption By Sector (quadrillion Btu) History Projections U.S. Primary Energy Consumption by Fuel By Sector (quadrillion Btu) 120 History 2012 Projections

27 National Economic Trends *source: CBRE Research and Bureau of Labor Statistics. *Job growth vs and rent growth Q vs. Q Office Rental Growth Overall Market -10% 27 0% 10% 20% 30% 40% 50% Tech Services Job and Office Rent Growth

28 Leading Businesses C h i c a g o Q 1 : *source: Fortune 500 Companies in Illinois Abbott Laboratories McDonald's Allstate Mondelez International Aniter International Motorola Solutions Archer Daniels Midland Navistar International Bater International OfficeMa Boeing R.R. Donnelley & Sons Caterpillar Sara Lee CDW Sears Holdings CF Industries Holdings State Farm Insurance Deere Telephone & Data Systems Discover Financial Services Tenneco Dover Eelon Hillshire Brands 1% United Continental Holdings United Stationers W.W. Grainger Illinois Tool Works Walgreen Kraft Foods 28

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