Chicago Industrial Submarket Narratives 1Q 2015

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1 Chicago Industrial Submarket Narratives 1Q 2015

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3 Table of Contents Submarket Page Overall Chicago Market 2 I-55 Corridor 4 I-80 Corridor 6 I-88 Corridor 8 Lake County 10 North Cook 12 North DuPage County 14 Northwest Cook 16 O'Hare 18 Southeast Wisconsin 20 West Cook County 22 Fox Valley 24 I-39 Corridor 26 I-57 Corridor 28 McHenry County 30 North Chicago 32 North Kane County 34 Northwest Indiana 36 Rockford 38 South Chicago 40 South Suburbs 42 1

4 Chicago Market News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 1,172,036,988 direct vacancy 7.50% vacancy 7.90% net 2,497,192 YTD net 2,497,192 Average rental rate (nnn) $ month percent change 1.7% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 19,000, % 14,000, % 9,000, % 4,000, % -1,000, % -6,000,000-11,000, % -16,000, % -21,000, % Q15 AVERAGE RENTAL RATE $5.00 $4.50 $4.44 $4.13 $4.12 $4.12 $4.27 $4.35 $4.31 $4.00 $3.50 $3.00 $2.50 $ Q15 LEASE ACTIVITY Leasing activity by 3PL and food and beverage users has driven vacancy to a new low in the current market cycle. Chicagoland posted its 18th consecutive quarter of positive net leaving leverage firmly in the landlord s favor. The most significant lease of the new years was Pacific Architects and Engineers agreement to take 723,291 square-feet at 1070 Windham Parkway in Romeoville. This was the largest second generation space on the market and was a former Home Depot facility owned by Liberty Property Trust. In Aurora, Midwest Warehouse, servicing the Nestle account committed to leasing all of OPUS and USAA s newly delivered 604,000 square-foot spec building. North of the border, ULINE preleased CenterPoint s 520,000 square-foot spec building underway in the Lakeview Corporate Park. CenterPoint is also rumored to be in negotiations with a buyer for their 409,000 square-foot spec building going up right next door. Also of note, Maines Paper and Food Service renewed a 241,000 square-foot lease for 63 months with Prologis at Muirfield Drive in Hanover Park. RENTS Rental rates now stand at $4.31 per square-foot, which is a gain of 1.7 percent year-overyear. In the big box space, investors are pushing rents and it is not uncommon for multiple requirements to be competing for the same space. As the pool of active tenants grows, expect to see continued upward pressure on pricing. SALES AND CONSTRUCTION As part of GIC and Global Logistics Properties purchase of IndCor, 18 Chicagoland properties totaling 3.7 million square feet traded hands. In Monee, Venture One acquired a 718,000 square-foot Michelin Distribution center for $27.55 per square-foot. However, Michelin will be vacating within the next year as their new 1.7 million square-foot build-to-suit in Wilmington comes online. The melting snow signals the start of Chicago s construction season and developers are busy building 8.3 million square-feet of new product. ECONOMIC OUTLOOK After making remarkable gains in 2014, the local unemployment rate experienced a spike in January, as it historically takes a breather after the holidays but did retreat 20 basis points recently over the prior post-holiday high of 6.8 percent. The trade, transportation, and utilities sector, accounting for 20 percent of all metropolitan employment has gained nearly 12,000 new positions in the past 12 months. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. GIC/Global Logistics Properties IndCor 18 properties Metro Chicago 3,700,000 2/27/15 TBD VentureOne High Street S Ridgeland Avenue Monee 728,044 2/13/15 $27.55 KTR Capital Panattoni/CalPERS th Avenue Pleasant Prairie 271,057 2/5/15 $43.53 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Saddle Creek Build to suit Millsdale Road Joliet 750,000 Pacific Architects and Engineers New lease 1070 Windham Parkway Romeoville 723,291 Midwest Warehouse/Nestle New lease 1200 Orchard Gateway Aurora 604,565 2

5 Chicago I Market News MARKET MAP 90 WA LW O R T H SOUTHWEST WISCONSIN SOUTHEAST WISCONSIN ROCKFORD 90 MCHENRY LAKE COUNTY NORTHWEST COOK 90 NORTH K ANE 39 NORTH COOK O HAR E I-39 / DEK ALB NORTH CHICAGO 88 N O R T H D U PAG E F O X VA L L E Y 290 WEST COOK 88 I-88 CORRIDOR 294 S O U T H C H I C AG O 355 SOUTH SUBURBS I-55 CORRIDOR 39 I-80 WEST NORTHWEST INDIANA I- 80 CORRIDOR 65 I- 57 CORRIDOR 55 SUBMARKET CHARACTERISTICS Robust capital markets provide liquidity for institutional investors Chicago is an industrial gateway city with global connectivity Chicago s inland port; The convergence of six Class I railroads and heavy and advanced manufacturing make it a premier U.S. market Population: 9.7M; annual employment gains in seven of ten employment sectors SUBMARKET STATISTICS inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Warehouse / Distribution 634,145, % 13.2% 1,064,491 1,064,491 2,177,546 2,177,546 Manufacturing 305,959, % 10.3% 398, , ,196 Flex / R&D 69,071, % 14.6% 221, , ,071 1,172,036, % 11.3% 1,483,424 1,239,463 2,497,192 Property type Industrial Average direct Under YTD asking rent construction completions ($ p.s.f.) $4.86 8,048,457 2,984, ,196 $ , , ,071 $ ,497,192 $4.31 8,692,457 3,711, Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 3 be placed on the information contained in this document.

6 I-55 Corridor I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 83,220,198 direct vacancy 10.1% vacancy 9.7% net 516,591 YTD net 516,591 Average rental rate (nnn) $ month percent change -0.6% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 6,000,000 Net new supply Net vacancy 19% 5,000,000 17% 4,000,000 15% 3,000,000 13% 11% 2,000,000 9% 1,000,000 7% 0 5% AVERAGE RENTAL RATE $5.00 $4.50 $4.17 $4.45 $4.46 $4.07 $4.10 $4.00 $3.50 $3.54 $3.50 $3.45 $3.51 $3.00 $2.50 $2.00 LEASING ACTIVITY The most notable lease transaction of the first quarter in the I-55 submarket was Pacific Architects & Engineers commitment to take down 723,000 square feet at 1070 Windham Parkway. The facility will handle mail transport equipment for the US Posta Service. With this property off the market, there is no second generation space over 500,000 square feet available in I-55. Three new speculative buildings from Pizutti, IDI, and ML Realty are available in shell condition and are well positioned to secure the next large requirement in the I-55 Corridor. In Bolingbrook, Sony agreed to renew 434,000 square feet with JP Morgan at 351 International Parkway for three years. Also of note, Suburban Accessories pre-leased 74,000 square feet in Prologis new spec building at 969 Veterans Parkway. RENTS The delivery of new speculative product has caused vacancy to climb slightly from 2013 but tenant demand remains strong across Chicago s prime distribution corridor. Dwindling availabilities are most evident in the big box market segment and investors are capitalizing on a the competitive leasing environment by pushing rents. SALES AND CONSTRUCTION The largest property to trade hands in the first quarter was LaSalle Investment Management s purchase of 551 Saint James Gate in a sale-leaseback at a 5.35% cap rate. In Woodridge, Met Life took out Conor Commercial at 9020 Murphy Road as the 257,000 square-foot building in the Union Pointe business park nears completion. Nearly 2.0 million square feet of new product is being built in I-55 which surpasses all other suburban Chicago submarkets. Of note, the average size of the new product is 224,000 square feet as few large parcels remain as this corridor is increasingly land constrained. ECONOMIC OUTLOOK Prospects for the I-55 corridor remain strong due to the quality of the building stock and labor force. For some users, price is an issue and they are expanding their search parameters for lower cost space in I-80 or I-57. As new product continues to come online, the vacancy rate could tick up but should remain in a healthy balance between 8.0 and 10.0 percent. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. LaSalle Investment Management LaGrou Distribution 551 Saint James Gate Bolingbrook 289,357 3/10/15 $62.06 MetLife Conor Commercial 9020 Murphy Road Woodridge 256,880 3/30/15 TBD GIC/Global Logistic Properties IndCor 3 Territorial Court Bolingbrook 125,448 2/27/15 TBD GIC/Global Logistic Properties IndCor 161 Tower Drive Burr Ridge 117,356 2/27/15 TBD RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Pacific Architects & Engineers/USPS New lease 1070 Windham Parkway Romeoville 723,291 Sony Renewal 351 International Parkway Bolingbrook 434,992 Carolina Logistics Services New lease 1801 Normantown Road Romeoville 64,952 Suburban Accessories Pre-lease 969 Veterans Parkway Bolingbrook 73,952 4

7 I-55 Corridor I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS High velocity market for both lease and sale activity Big box class A bulk distribution Close proximity to Joliet intermodals Large, available and skilled local workers SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 66,482, % 13.9% -175, , , ,646 $5.14 1,938, ,605 Manufacturing 11,658, % 20.6% -53,272-53,272-53,272-53,272 $ Flex / R&D 3,577, % 8.8% 29,363 29,363 29,363 29,363 $ Industrial 83,220, % 15.0% -124, , , ,591 $5.13 1,938, , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 5 be placed on the information contained in this document.

8 I-80 Corridor I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 60,672,790 direct vacancy 12.3% vacancy 13.6% net 162,637 YTD net 162,637 Average rental rate (nnn) $ month percent change -0.8% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 6,000, % 5,000, % 4,000,000 3,000, % 2,000, % 1,000, % AVERAGE RENTAL RATE $3.60 $3.38 $3.41 $3.36 $3.41 $3.38 $3.40 $3.25 $3.17 $3.18 $3.20 $3.11 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 RECENT SALES COMPARABLES (sorted by square feet) LEASING ACTIVITY Starting off 2015, Saddle Creek has engaged CenterPoint to develop a 750,000 square-foot facility next to the Home Depot regional distribution center on Millsdale Road. Saddle Creek is a current CenterPoint tenant in Elwood and has outgrown their current space. Also in Joliet, Mars/Wrigley Candy is in lease negotiations for a 1.3 million square-foot multi-temperature build-to-suit to be developed by CenterPoint properties. At RidgePort Logistics Center in Wilmington, Consolidated Distribution inked a build-to-suit lease for 286,867 square feet in part of a 574,867 square-foot building. This will leave 288,000 square feet available for lease upon completion. Also, Consolidated committed to separate 111,000 square-foot climate controlled build-to-suit facility at RidgePort which they will use to supply Chicagoland fast food restaurants. RENTS The I-80 leasing market has benefitted from spillover demand in the white-hot I-55 and I-88 submarkets and rental rates currently stand at $3.38 per square-foot. Users in the 250,000 to 500,000 square-foot size segment have limited options for Class A space within close proximity to the intermodals. SALES AND CONSTRUCTION There has been limited investment sales activity in the I-80 corridor in the last six months with the exception of two portfolios which recently traded. In fall 2014, Hillwood acquired six buildings in Chicago from Northern Builders including the 441,000 square-foot W Haven Avenue. As part of the GIC/GLP acquisition of IndCor, 401 Laraway Road has a new owner. Currently there is a short-term tenant occupying a portion of the space but a lease is pending with an Ecommerce user which could bring over 500 new jobs. Ridge Development is making progress on the1.7 million squarefoot build-to-suit campus underway in Wilmington for Michelin which is set to deliver in summer IKEA announced that they will move forward with construction of a 1.4 million square-foot distribution center on Laraway Road in Joliet. The company leased 850,000 square-feet in Minooka in 2014 for a three year term while they build. In Minooka, WW Grainger is proposing a 1.0 to 1.3 million square-foot facility on 52 acres of land that they acquired from Liberty Property Trust in summer The wholesaler is nearing capacity of their existing 1.0 million square-foot facility and is requesting a tax break in exchange for adding 130 new employees. ECONOMIC OUTLOOK Wolfe Research found that in the second half of 2014, shippers were switching to truck transport at a higher rate than to rail for the first time since Although I-80 is home to both the BNSF and Union Pacific intermodal terminals, we do not expect to see any decline in containerized cargo coming though the nation s transportation nexus. However, the town of Elwood is locked in a legal dispute with CenterPoint over TIF payments and has closed off the Walter Strawn Drive railroad crossing serving the BNSF terminal in retaliation. This shutdown forces truckers to take an alternate route to I-80 angering drivers and adding to drayage costs. Buyer Seller Location City Size Date Price / s.f. GIC/Global Logistic Properties IndCor 401 E Laraway Rd (Part of Portfolio) Joliet 475,104 2/27/15 TBD GIC/Global Logistic Properties IndCor 251 Laraway Rd (Part of Portfolio) Joliet 374,460 2/27/15 TBD Hillwood Northern Builders W Haven Avenue New Lenox 441,552 9/1/14 $51.84 DCT Industrial TCB Development 3401 S Chicago Street Joliet 184,090 3/13/14 $42.10 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Saddle Creek Logistics Build-to-suit Millsdale Road Joliet 750,000 Consolidated Distribution Build-to-suit Lorenzo Road/RidgePort Wilmington 286,867 Prime Woodcraft/ Supplyside New lease 2301 Ellis Court New Lenox 124,840 Consolidated Distribution Build-to-suit Lorenzo Road/RidgePort Wilmington 111,000 6

9 I-80 Corridor I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Big box class A bulk distribution Large workforce Inland port and logistics hub Multi-state regional distribution SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 44,351, % 19.5% 119, , , ,840 $3.58 1,700, ,996 Manufacturing 9,030, % 10.1% $ Flex / R&D 842, % 12.5% 6,550 6,550 6,550 6,550 $ Industrial 60,672, % 16.6% 162, , , ,637 $3.38 1,700, , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 7 be placed on the information contained in this document.

10 I-88 Corridor I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 57,404,647 direct vacancy 6.2% vacancy 7.3% net 29,753 YTD net 29,753 Average rental rate (nnn) $ month percent change 5.0 % Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 2,500,000 2,000,000 14% 12% 1,500,000 11% 1,000,000 9% 500, % -500,000 6% -1,000,000 5% AVERAGE RENTAL RATE $5.00 $4.50 $4.47 $4.36 $4.41 $4.07 $4.12 $3.96 $3.94 $4.01 $3.97 $4.00 $3.50 $3.00 $2.50 $2.00 LEASE ACTIVITY In early January, Midwest Warehouse servicing the Nestle account, leased 604,000 square feet of OPUS & USAA s new spec building at 1200 Orchard Gateway in Aurora. This newly delivered facility will see additional above standard tenant improvements to accommodate Midwest Warehouse for 84 months. Two significant build-to-suit transactions were inked in the first quarter in I-88 as vacancy has slipped to 7.3 percent. Conor Commercial committed to building a new 305,000 square-foot facility for PPG within the Deer Path Commerce Center in North Aurora. Also in Aurora, Duke Realty will construct a 243,000 square-foot build to suit on Orchard Gateway Boulevard for Shorr Packaging. RENTS The I-88 Corridor remains one of the premier institutional investment centers within the Chicago metropolitan market as key players are attracted to the modern Class A product within easy reach of full interstate interchanges. Rents have seen a healthy growth trajectory from the depth of the economic contraction. They currently stand at $4.41 per square-foot and are poised to climb as availabilities decrease. SALES AND CONSTRUCTION The most notable sale was DCT Industrial s acquisition of a 320,000 square-foot vacant building at 2413 Prospect Drive in Aurora. The new ownership plans to make minor cosmetic improvements and compete aggressively to secure a full building user. There is only one building currently under way in I-88. Liberty Property Trust has fully enclosed their 429,000 square-foot building speculative building at 300 Mitchell Road. UTI preleased 201,000 square feet of the building which will be ready for occupancy in the second quarter. ECONOMIC OUTLOOK The majority of the core Class A industrial buildings in the I-88 submarket are located in Naperville, Aurora and North Aurora. As the second largest city in Illinois, Aurora is home to a deep workforce and five accessible tollway exchanges. Over 200,000 people reside in Aurora, along with over 6,000 businesses. 320 acres of downtown landscape and 17 firstclass business parks have attracted new businesses. Institutional investors, including Duke Realty and Liberty Property Trust, control a significant portion of the modern, high bay, bulk product in the area and possess substantial land holdings. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Cabot Properties, Inc. James Campbell 1980 High Grove Lane Naperville 330,734 12/16/14 $47.62 DCT Industrial Everwest 2413 Prospect Drive Aurora 320,047 12/30/14 $52.50 GIC/Global Logistic Properties IndCor 2300 N Raddant Rd (Part of Portfolio) Aurora 120,200 2/27/15 TBD GIC/Global Logistic Properties IndCor 3950 Sussex Ct (Part of Portfolio) Aurora 43,276 2/27/15 TBD RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Midwest Warehouse/Nestle New lease 1200 Orchard Gateway Aurora 604,565 PPG Architectural Finishes Build to suit Orchard Gateway Boulevard Aurora 304,560 Shorr Packaging Build to suit One Ferry Road Aurora 242,732 UTI New lease 300 Mitchell Road North Aurora 201,309 8

11 I-88 Corridor Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of Flex, R&D industrial product when compared to other Chicago suburban industrial submarkets As a result, the I-88 submarket affords a more corporate image A alternative industrial submarket to that of the I-55 Corridor but at a price premium SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 33,697, % 15.8% 182, ,419 86,419 86,419 $ , ,471 Manufacturing 17,121, % 8.6% -43,322-43,322-43,322-43,322 $ Flex / R&D 3,066, % 12.7% 27,872 27,872 27,872 27,872 $ Industrial 57,404, % 12.1% 125, ,753 29,753 29,753 $ , , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 9 be placed on the information contained in this document.

12 Lake County I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 70,970,181 direct vacancy 8.20% vacancy 7.80% net 68,687 YTD net 68,687 Average rental rate (nnn) $ month percent change -1.8% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000-2,000,000-2,500,000 AVERAGE RENTAL RATE $7.00 $6.50 $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $6.56 Net new supply Net vacancy $6.37 $5.61 $5.21 $5.02 $ % 12.0% 10.3% 8.5% 6.8% 5.0% $5.27 $5.44 $5.34 LEASE ACTIVITY In March, Actavis Pharmaceuticals committed to preleasing 213,746 square feet in IDI Gazeley s 1243 Gregory Drive. This space will be fully air conditioned and the tenant improvement allowance will be allocated to fully secure the truck court on the Actavis portion of the 454,000 square-foot 36 clear speculative building. Focus Foodservice signed a new lease for 75,000 square feet with Panattoni at 451 Trumpet Drive in Zion. Also of significance, in Libertyville, Qualanex expanded by just under 40,000 square feet in a Class A building owned by the Silverman Group a 1400 Harris Road. An undisclosed user is rumored to be leasing a portion of H.S.A s 218,000 square-foot spec building in Waukegan which delivered in 2014 for short term overflow storage. RENTS Lake County is a high rent district in the Chicago market due to land constraints, a smaller base of product and affluent demographics. Current asking rates stand at $5.34 per square-foot and are expected to climb further as demand remains strong. While a large portion of Lake County is owneroccupied, lease velocity has been increasing due to growing business needs amongst mid-sized users and a general uptick in the overall economy throughout Chicago s northern suburbs. SALES AND CONSTRUCTION In Lake Forest, Brennan Investments and Goldman Sachs acquired a 70,000 square-foot building at W Laurel Drive from the Janko Group for $51.64 per square-foot. In Buffalo Grove, Molto Properties acquired Hastings Drive which is the first existing asset acquisition for its newly launched Molto Properties Fund II. The 68,000 square-foot building traded for nearly $62 per square-foot. In Libertyville, Bridge Development is set to deliver two speculative buildings on Park Avenue in June. The larger building will be 220,500 square feet and will be adjacent to their second facility of 185,670 square feet. An undisclosed user is negotiating to take one of the buildings but the deal is dependent upon Bridge receiving permission from the municipality to expand parking. ECONOMIC OUTLOOK The Lake County industrial market benefits from the pharmaceutical and health related companies which call the region home. The area has a unique advantage due to the affluent population dynamics and the readily accessible, skilled labor force. Lake County exceeds the nation and Illinois education attainment at the high school, bachelor s degree, and graduate degree levels. By raw number, its manufacturing sector employs the most workers than any other sector. The area is not considered a high throughput distribution market as much as the modern big box space is across the border in Wisconsin. The typical user in Lake County occupies between 25,000 to 60,000 square feet and thrives in the second generation space which comprises the bulk of the submarket. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Brennan Investment Group Janko Group W Laurel Drive Lake Forest 70,196 3/2/15 $51.64 Molto Capital, LLC Debra Wolf Investment Trust Hastings Drive Buffalo Grove 68,735 2/25/15 $61.98 Mark Smith Performance Process Inc Reidel Drive Mundelein 30,000 1/26/15 $33.33 SRY Electric Inc Shull Plumbing Inc N Ellis Drive Volo 24,200 1/29/15 $65.15 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Actavis Pre lease 1243 Gregory Drive Antioch 213,746 Focus Foodservice New lease 451 Trumpet Drive Zion 75,096 Qualanex Expansion 1400 Harris Road Libertyville 39,802 Tru Spec New lease 3075 Oak Grove Waukegan 37,037 10

13 Lake County Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of specialized manufacturing Strong concentration of healthcare, medical device and life sciences companies Dated, less energy efficient and design constrained product. Land constrained SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 35,250, % 15.3% -16,340-16, , ,660 $ ,488 0 Manufacturing 24,447, % 8.9% -191, , , ,821 $ Flex / R&D 6,471, % 19.7% -24,197-24,197-24,197-24,197 $ Industrial 70,970, % 11.2% -277, ,832 68,687 68,687 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 11 be placed on the information contained in this document.

14 North Cook I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 44,652,639 direct vacancy 6.1% vacancy 6.1% net -103,717 YTD net -103,717 Average rental rate (nnn) $ month percent change 1.8% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 600, ,000 Net new supply Net vacancy 200, , , , ,000 AVERAGE RENTAL RATE 8.6% 7.4% 6.2% 5.0% LEASE ACTIVITY In Skokie, Cabot and Seefried Properties secured a prelease commitment from Thermal Care for 135,277 square feet within their new 217,064 square-foot building. This project will deliver in March of Generation Brands agreed to take nearly 250,000 square feet with ML Realty at 7300 Linder in Skokie. This space became available following Woodward s relocation into 350,000 square feet of new space on Howard Street in Niles. Across the street from Woodward s new facility, MV Transportation agreed to a long term lease renewal for 40,500 square feet of space at 6230 West Gross Point Road in a building owned by Howard Lehigh Corp. RENTS Strong demand and limited available product has pushed vacancy downward to 6.1 percent. As a result, rental rates currently stand at $5.39 as tenant demand and improving economic conditions have tightened available supply. Landlords and investors will look to rent growth to generate income and drive value as legacy rents from the recession are restructured in light of improved market conditions. Demand will focus on upgraded, modern buildings in close proximity to the Edens and Tristate expressways as tenants look to service their customers throughout the greater Chicago metro area. SALES AND CONSTRUCTION The largest building to trade hands in the first quarter of 2015 was Fred Jung s purchase of an 85,000 square-foot building at 2020 Greenwood Street in Evanston for just over $41 per square-foot. Scannell has enclosed their 306,000 square-foot build to suit for Fedex at 5959 W Howard Street in Niles. This facility will join the 15 existing FedEx facilities serving Chicagoland. In Wheeling, HandiFoil has requested municipal approval to expand their facility at 135 E Hintz Road. $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $5.29 $5.35 $5.39 $5.05 $5.09 $5.17 $5.21 $5.29 $4.92 ECONOMIC OUTLOOK The large number of healthcare and life sciences firms in North Cook County as well as in the surrounding northern suburbs continues to drive a considerable amount of real estate demand. High tech manufacturing for electronics also remains a key aspect of the industrial market buoyed by the excellent demographics and highly educated workforce. In 2013, the Chicago region was the nation s fourth largest exporter with $65 billion worth of exported goods. Although higher Cook County tax rates factor into leasing decisions, the North Cook submarket has accessibility via multiple modes of public transit to bring skilled labor out of the city. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Address City Size Date Price / s.f. Fred R Jung S D & S Properties Inc 2020 Greenwood St Evanston 85,295 2/2/15 $41.03 Suburban Machine Corporation American Enterprise Bank 512 Northgate Pky Wheeling 26,760 1/26/15 $48.95 Wright-way Rescue Georgia Nut Company 5915 Lincoln Ave Morton Grove 10,000 1/23/15 TBD RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Generation Brands New lease 7300 N Linder Avenue Niles 249,434 Thermal Care Pre lease 5600 Jarvis Avenue Skokie 135,277 Eco Brite Linens New lease 3712 Jarvis Avenue Skokie 44,288 MV Transportation Renewal 6230 Gross Point Road Niles 40,650 12

15 North Cook I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of manufacturing Few bulk distribution spaces Higher ratio of flex Highly educated workforce SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 22,489, % 13.0% -214, , , ,355 $ ,448 0 Manufacturing 13,342, % 8.8% 80,787 80,787 80,787 80,787 $ Flex / R&D 6,345, % 13.0% -19,188-19,188-19,063-19,063 $ Industrial 44,652, % 10.7% -103, , , ,717 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 13 be placed on the information contained in this document.

16 North DuPage I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 77,450,073 direct vacancy 4.6% vacancy 4.4% net 661,122 YTD net 661,122 Average rental rate (nnn) $ month percent change 1.4% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000-2,000,000 AVERAGE RENTAL RATE $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $5.12 $5.02 Net new supply Net vacancy $ $4.27 $4.25 $ % 11.2% 10.0% 8.7% 7.5% 6.2% 5.0% $4.36 $4.30 $4.36 RECENT SALES COMPARABLES (sorted by square feet) LEASING ACTIVITY DCT Industrial acquired a 210,000 square-foot building at 191 North Avenue in Carol Stream with plans to demolish the building and construct a new 350,000 square-foot facility for CoreCentric. This will be a consolidation for CoreCentric which is a 3PL providing return management and reverse logistics services. In Hanover Park, Maines Paper and Foodservice agreed to renew their 241,000 square-foot lease at Muirfield Drive. In Bloomingdale, Prologis signed a new lease with Houston Wire and Cable for just under 90,000 square feet at 280 Madsen Drive. RENTS Annualized rents stand at $4.36 per square-foot and are forecasted to rise as vacancy across the submarket hovers in historically low territory just below five percent. Within the North DuPage submarket there is only one Class A Big Box space over 250,000 square feet currently available. 135 Elk Trail in Carol Stream at 334,000 square feet, owned by Liberty Property Trust is well positioned with limited competition from Class B product to secure the next large tenant requirement to enter the market. SALES AND CONSTRUCTION Despite relatively little investment sale activity in Central DuPage in the past six months there have been several notable user sales. In the fourth quarter, Panattoni sold 700 Kimberly Drive to StandFast Packaging for $46 per square-foot. More recently, Bradford Equities acquired a 77,000 square-foot manufacturing building at 120 N Schmale Drive in Carol Stream from Metals Technology Corporation. Panattoni and LaSalle Investment Management have plans for a new speculative building on Gary Avenue in Roselle of approximately 140,000 square feet. Following the successful lease up of their 139,781 square-foot building developed in first quarter 2014 at 201 Gary Avenue, the developer is bullish on the prospects of the fourth building in a five-building development. ECONOMIC OUTLOOK DuPage County continues to see a dwindling unemployment rate and industrial vacancy rate, boasting the lowest unemployment rate among Cook County and the collar counties. The area relies on machinery, computers and electronics, and chemical production as primary exports. DuPage County supported several initiatives to create new jobs including the launch of the Rev3 Innovation Center, a digital manufacturing incubator in Naperville. The manufacturing sector has been growing according to Choose DuPage, who reports that 33 manufacturing focused projects commenced in Buyer Seller Location City Size Date Price / s.f. Atlantic Packaging /StandFast Panattoni Kimberly Drive Carol Stream 378,443 12/19/14 $7.92 (land) DCT Industrial Invensys Appliance Controls 191 E North Avenue Carol Stream 209,699 3/6/15 $34.81 Colony Capital Cobalt Industrial REIT II 1688 Glen Ellyn Road (Part of Portfolio) Glendale Heights 84,804 12/18/14 $63.44 Bradford Equities Management Metals Technology Corp 120 N Schmale Road Carol Stream 76,620 3/3/15 $52.21 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Core Centric Build-to-suit 191 E North Avenue Carol Stream 350,000 Maines Paper and Food Service Extension Muirfield Drive Hanover Park 241,455 Coca-Cola Renewal 1920 Internationale Boulevard Glendale Heights 95,000 Houston Cable New lease 280 Madsen Drive Bloomingdale 89,262 14

17 North DuPage I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Tight market overall with mainly mid-sized users Some tenant migration out of O Hare / Cook County Smaller footprints Strong labor pool SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 50,896, % 11.0% 467, , , ,099 $ Manufacturing 13,978, % 10.0% -7,951-7,951-7,951-7,951 $ Flex / R&D 3,799, % 12.6% -1,590-1,590-1,590-1,590 $ Industrial 77,450, % 9.5% 661, , , ,122 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 15 be placed on the information contained in this document.

18 Northwest Cook I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 26,076,087 direct vacancy 6.1% vacancy 6.2% net -101,425 YTD net -101,425 Average rental rate (nnn) $ month percent change 0% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 500, , , , , , , , , ,000 AVERAGE RENTAL RATE 13.4% 12.0% 10.6% 9.2% 7.8% 6.4% 5.0% LEASE ACTIVITY The largest lease of the first quarter in the Northwest Cook submarket was Unified Solution s 30,030 square-foot lease at 3456 N Ridge Avenue in Arlington Heights. The packaging product and service provider will occupy the American Landmark Properties owned warehouse over a 51 month term. Another notable transaction involved a 63 month deal with Prism Healthcare for 19,811 square feet of industrial flex space at N Basswood Road in Schaumburg. With a strong portion of the 26 million square-foot market being owner-occupied, slightly lower leasing velocity is typical of the Northwest suburbs of Chicago. RENTS Asking rents in Northwest Cook have stabilized at $5.04 per square foot in the first quarter. The submarket has continued to display a pattern of considerable improvement since 2010, when rents fell to $4.00 per square-foot. This growth is driven by firms willing to pay a premium to be near the expressways servicing the northern and western suburbs of the Chicago market. Firms looking for high image corporate headquarters are active in the area with visibility along the Jane Addams Tollway a major selling point to certain users. SALES AND CONSTRUCTION The most notable acquisition of quarter one was Tru Grind s purchase of 3803 Ventura Drive from Z Automation Corp for $62 per square-foot. In December 2014, Venture One acquired a fully leased 31,931 SF USDA food production facility at 2095 Hammond Road in Schaumburg. Sunstar, a Japanese maker of health & beauty products as well as mechanical products is working on a 302,000 square-foot build-to-suit. This facility will serve as Sunstar s North American headquarters and is expected to bring 400 new jobs to Schaumburg. $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $5.36 $5.13 $5.05 $5.05 $5.04 $4.81 $4.24 $4.02 $4.11 ECONOMIC OUTLOOK The Northwest Cook County market continues to benefit from a large, skilled labor pool of machinery and electronics manufacturers and metal fabricators throughout the communities of Palatine, Hoffman Estates, and Schaumburg from which to draw. A strong portion of the activity in the area is from logistics users migrating out of the O Hare submarket due to the higher costs of that urban submarket - although remaining here in Northwest Cook County still has its challenge of the higher tax rates being located in Chicago s home county. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Venture One Phillip Pinello Estes Avenue Schaumburg 59,500 3/2/15 $26.89 Tru Grind Inc. Z Automation Company, Inc N Ventura Drive Arlington Heights 52,343 3/5/15 $61.52 F.H. Paschen, S.N. Nielsen, Inc. Binzel Industries, Inc Tollview Drive Rolling Meadows 47,428 2/6/15 $11.60 Kinsella Elizabeth Kaye Daniel & Lynn Lunt Avenue Schaumburg 10,000 3/12/15 $40.00 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Nimlock New lease 111 Rawls Arlington Heights 35,000 Unified Solutions New lease 3456 N Ridge Avenue Arlington Heights 30,030 Prism Healthcare New lease N Basswood Road Schaumburg 19,811 Encore Event New lease S Vermont Street Palatine 8,000 16

19 Northwest Cook Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS High ratio of flex, R&D when compared to the other Cook County industrial submarkets Proximity to Chicago affords industrial users a more corporate image Strong white collar workforce SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 17,054, % 10.4% -75,220-75, , ,765 $ Manufacturing 5,786, % 7.4% 28,929 28,929 28,929 28,929 $ ,000 0 Flex / R&D 8,185, % 23.9% -367, , , ,556 $ Industrial 26,076, % 12.1% -60,591-60, , ,425 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 17 be placed on the information contained in this document.

20 O Hare I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 99,808,535 direct vacancy 6.9% vacancy 7.9% net 213,375 YTD net 213,375 Average rental rate (nnn) $ month percent change 5.6% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000-2,000,000-2,500,000 AVERAGE RENTAL RATE $7.00 $6.50 $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $6.61 $6.11 Net new supply Net vacancy $5.25 $5.27 $5.17 $5.37 $5.28 $ % 13.5% 11.8% 10.1% 8.4% 6.7% 5.0% $5.51 LEASING ACTIVITY Bridge Development secured NNR Global Logistics in 120,000 square-feet of their spec building at 2201 Lunt Avenue. This 150,000 square-foot Class A building, delivered in 2014, has 30,000 square-feet remaining at the south end of the building. SP Richards, a business products wholesaler came to terms on two renewals totaling 168,000 square feet in the O Hare submarket. The company occupies 112,395 square feet with Hamilton Partners at 2650 Lively Boulevard in Elk Grove and 55,708 square feet owned by Prologis at 2700 Lively Boulevard. RENTS Asking rents in the O Hare submarket are among the strongest in the Chicago metro area at $5.51 per square-foot. Demand remains strong from a deep and diverse pool of users from air freight and logistics users, food distributors, and manufacturing and assembly operations. SALES AND CONSTRUCTION Atlas Toyota Material Handling acquired a 246,000 square-foot building at 1850 Touhy for $31 per square-foot. The company intends to use the building as a forklift and construction equipment dealership. Also of note, both Prologis and Sitex thinned their portfolio of noncore class B assets through a series of strategic user sales in the first quarter. Prologis sold the 41,000 square-foot 801 Lunt Avenue for $55 per square-foot and Sitex sold Devon Avenue for $63 per square-foot. Liberty Property Trust has the walls and roof completed on their 233,000 square-foot speculative warehouse in Des Plaines. This facility is unique in that it offers toll way visibility and significantly more parking than other new buildings in the O Hare submarket where land is at a premium. Also in Des Plaines, IAC is developing an $11 million build-to-suit project at 200 E Touhy Avenue for SkyChefs. DCT is on track for a summer completion of their 112,000 square-foot speculative building at 2200 Arthur Avenue in Elk Grove. ECONOMIC OUTLOOK The O Hare submarket area benefits from its proximity to rail, road, and air transportation connections. Having been in the doldrums for the past several years, the air cargo sector may be staging a moderate comeback. Although shippers prefer cheaper modes of transportation, perishables, food, and direct-to-consumer products are driving demand for air cargo particularly in peak seasons. RECENT SALES COMPARABLES Buyer Seller Location City Size Date Price / s.f. Atlas Toyota BK Equities, LLC 1850 Touhy Avenue Elk Grove Village 169,000 1/15/15 $31.20 Peter and Myrna Yau Sitex Group Devon Avenue Bensenville 73,594 2/19/15 $62.51 Horizon Logistics Inc Prologis 801 Lunt Avenue Elk Grove Village 41,600 2/19/15 $54.42 Astronics Corporation Armstrong Aerospace, Inc Industrial Drive Itasca 23,000 1/14/15 $50.87 RECENT LEASE COMPARABLES Tenant Type Address City Size NNR Global Logistics New lease 2201 Lunt Avenue Elk Grove Village 119,752 S.P. Richards Renewal 2650 Lively Boulevard Elk Grove Village 112,395 S.P. Richards Renewal 3700 Lively Boulevard Elk Grove Village 55,708 Lansing Building Products New lease 2501 Allan Drive Elk Grove Village 32,983 18

21 O Hare I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of heavy and advanced manufacturing Fewer available bulk distribution spaces Elk Grove Village is home to the largest industrial park in North America SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 64,519, % 14.3% 520, , , ,963 $ ,682 0 Manufacturing 23,534, % 12.0% 74,668 74,668 74,668 74,668 $ Flex / R&D 6,695, % 13.0% -7,513-7,513-6,583-6,583 $ Industrial 99,808, % 12.8% 561, , , ,375 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 19 be placed on the information contained in this document.

22 Southeast Wisconsin I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 51,921,730 direct vacancy 8.4% vacancy 8.7% net 149,869 YTD net 149,869 Average rental rate (nnn) $ month percent change 2.6% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000 AVERAGE RENTAL RATE $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $4.03 Net new supply Net vacancy $3.90 $3.95 $3.96 $4.05 $ % 11.0% 9.5% 8.0% 6.5% 5.0% $3.56 $3.58 $3.49 LEASE ACTIVITY The largest lease signed in recent months was Uline s 520,000 square-foot prelease commitment for CenterPoint s newest development in the Lakeview Business Park. Uline continues to expand their footprint, purchasing 200 acres from Bridge Development. The shipping and packaging products firm plans to construct a 1.0 million square-foot distribution facility in addition to a separate 50,000 square-foot office and call center. Hospira signed an early renewal and lease restructuring at their 302,5000 square-foot facility at th Avenue which they have occupied since Manufacturer FNA Group Inc. will create more than 100 jobs in Pleasant Prairie early next year when it relocates operations from Arkansas to Zilber s new 176,000 square-foot spec building which delivered in late RENTS Competition remains strong among 50,000 to 100,000 square-foot standalone buildings ideal for local or regional users and also for big box space suited for multi-state distribution. A significant portion of the submarket s industrial product is either owner occupied or secured under long term build-to-suit lease arrangements. That being said, large corporate occupiers willing to commit to seven to ten year credit leases tend to seek out space in Southeast Wisconsin. SALES AND CONSTRUCTION The maturing Southeast Wisconsin market continues to observe relatively little investment sale activity with only one transaction recorded in the first quarter. In February, KTR acquired th Avenue in Pleasant Prairie from Panattoni and CalSTRS for $43.63 per square-foot. The 271,000 square-foot Class A building is leased to Midwest Refrigerated Services and ZF Electronics. In development news, CenterPoint is making progress on a 410,000 square-foot speculative building at Lakeview which is set to deliver in Spring of An existing user in the Lakeview park is rumored to have an offer to purchase the building upon completion. Just north in Racine County, Ashley Capital is on the verge of launching a 374,400-square-foot speculative industrial building on Durand Avenue in the coming months. ECONOMIC OUTLOOK The advanced industries in the packaging, manufacturing, and food & beverage sector continue to drive the bulk of the leasing and sale activity across Kenosha and Racine Counties. Comparatively low land costs and a business-friendly policy climate draw firms north of the Illinois border. After the recent establishment of Wisconsin as a right-to-work state, business migration is anticipated to escalate. In 2014, the Southeast Wisconsin market created over 1,500 jobs on top of 3,500 jobs in RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Plymouth REIT VentureOne th Avenue Kenosha 160,300 9/1/14 $63.68 KTR Capital Partners Panattoni/CalSTRS th Ave Pleasant Prairie 144,281 2/5/15 $43.63 STAG Industrial Joseph & Cynthia Kaplan S Grandview Parkway Sturtevant 98,151 10/22/14 $63.12 Quest Products Varin Pleasant Prairie th Street Pleasant Prairie /4/14 $64.19 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Uline Build to Suit Lot 88th & 116 th Pleasant Prairie 520,000 Hospira Early renewal th Avenue Pleasant Prairie 302,500 OHL Renewal th Street Pleasant Prairie 239,376 FNA Group New lease nd Avenue Pleasant Prairie 176,433 20

23 Southeast Wisconsin Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Newer big box industrial ideal for supply chains Comparatively lower land costs and pro-business climate Attracting national attention for firms looking to have a presence in Chicago metro area SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 28,873, % 10.7% 162, , , ,491 $ , ,000 Manufacturing 23,534, % 9.5% 32,844 32,844 32,844 32,844 $ ,000 Flex / R&D 1,607, % 12.3% -1,030-1,030-1,030-1,030 $ Industrial 51,921, % 11.3% 149, , , ,869 $ , , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 21 be placed on the information contained in this document.

24 West Cook I Submarket News First Quarter 2015 HIGHLIGHTS KEY MARKET INDICATORS Supply Demand Pricing inventory 72,122,157 direct vacancy 7.1% vacancy 7.1% net -243,961 YTD net -243,961 Average rental rate (nnn) $ month percent change 0% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 3,000, % 2,500, % 2,000, % 1,500, % 1,000, % 500, % -500, % -1,000, % AVERAGE RENTAL RATE $6.50 $6.00 $5.89 $5.83 $5.81 $5.50 $5.25 $5.00 $4.62 $4.71 $4.48 $4.39 $4.50 $4.33 $4.00 $3.50 $3.00 $2.50 $2.00 LEASE ACTIVITY In the first quarter of 2015, the most notable new lease in the West Cook submarket was printing company Ryder Dickson s 80,000 square-foot renewal at th Avenue in Maywood. KTR Capital signed a new lease with Excegistics at 3710 River Road in Franklin Park for 50,000 square-feet of Class A space. With this property being only 3.5 miles from O Hare s South Cargo ramp, the five year lease came at a premium with a rate well above the submarket average of $5.81. RENTS Although high Cook County taxes remain an issue in site selection and lease negotiations, supply/demand fundamentals have shown improvement over the past two years which have driven vacancy to 7.1 percent. Vacancy should tick up slightly over the summer months as 888,896 square feet of Class A speculative space is currently under construction in McCook is delivered. SALES AND CONSTRUCTION In Melrose Park, SJS Realty acquired an 84,600 square-foot multi-tenant building at 5109 W Lake Street for just over $50 per square-foot. Also of note in investment sales, Bridge Development acquired a vacant building at 4800 S Vernon Avenue in McCook for $46.51 per square-foot in the second half of Dermody Properties in partnership with AEW is developing two speculative buildings on 47 th Street right off the First Avenue ramp to the Stevenson Expressway. The neighboring buildings are 312,000 and 351,900 square feet respectively. Also in McCook, Bridge Development s 226,196 square-foot project at 8401 West 47th Street is fully enclosed and crews are starting interior work. At the former Dominick s grocery distribution site in Northlake, Bridge has completed demolition and is finalizing horizontal work in preparation for the construction of a 588,284 square-foot speculative building. ECONOMIC OUTLOOK While McCook is comprised of largely modern Class A facilities, many municipalities inside the I-294 ring face a shortage of 50,000-75,000 square-foot space. Demand across the infill markets continues to grow as firms seek access to the deep and diverse Cook County labor shed as the ability to retain a skilled and reliable workforce moves to the forefront of the site selection decision making process. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Address City Size Date Price / s.f. SJS Realty and Development Gardner Place Management 5109 W Lake Street Melrose Park 84,600 3/30/15 $50.24 Central Steel Fabricators, Inc Contemporary Management Co W 16th Street Broadview 82,519 1/7/15 $30.60 Otak International Economic Plastic Coating 2080 N 15th Avenue Melrose Park 46,807 1/5/15 $10.68 Top Quality Hardwood Flooring Rent Com, Inc River Road Schiller Park 46,600 3/1/15 $20.39 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Address City Size Ryder Dickerson Renewal h Avenue Bellwood 80,292 Grayhill Corp New lease 4800 S Vernon Avenue McCook 67,888 Exegistics New lease 3710 River Road Franklin Park 50,000 Chicago Records Management New lease W Waveland Avenue Franklin Park 32,893 22

25 West Cook I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS SUBMARKET STATISTICS Higher ratio of heavy manufacturing Due to land constraints, fewer bulk distribution spaces than other Chicago industrial submarkets West Cook home to the BNSF Corwith and Union Pacific Global II intermodals and UPS Chicago Area Consolidation Hub (CACH) Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 35,818, % 12.6% -148, , , ,359 $ ,896 0 Manufacturing 21,420, % 13.4% -120, , , ,602 $ Flex / R&D 2,810, % 5.7% 20,500 20,500 20,500 20,500 $ Industrial 72,122, % 11.2% -243, , , ,961 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 23 be placed on the information contained in this document.

26 Fox Valley I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 34,258,400 direct vacancy 2.7% vacancy 2.8% net 163,862 YTD net 163,862 Average rental rate (nnn) $ month percent change 3.2% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 1,000, , , , , , , , ,000 AVERAGE RENTAL RATE 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% LEASE ACTIVITY Throughout 2014 and into the new year, the downward trend in Fox Valley vacancy was evident as healthy leasing activity consumed existing supply. Strong to the tune of nearly 800,000 square feet in 2014 signaled that leverage has firmly shifted in favor of investors. The largest lease transaction in recent months was Honeywell s agreement to renew 158,000 square feet at 3825 Ohio Avenue in St. Charles. Also of significance Wise Plastics Technologies leased 102,000 square feet at 1601 Hawthorne Lane from DCT Industrial Trust. RENTS Rental rates were sluggish from 2012 through 2014 as the Fox Valley region remerged from the recession. As users compete for space in Central DuPage and I-88, expect overflow demand to extend to the Fox Valley. As accelerated demand increases, investors will have an opportunity to drive asking rents. SALES AND CONSTRUCTION In late 2014, Several Fox Valley properties traded hands as part of Colony Capital s purchase of the Cobalt Industrial REIT II. This portfolio consisted of 256 assets across 30 markets valued at approximately $1.6 billion. Cobalt held a significant stake in 1980s vintage Class B product which comprises the bulk of the submarket stock. Typically the greater part of Fox Valley sale activity is driven by local users as the submarket is not a primary target for institutional investors. Currently there are no projects under construction within the Fox Valley submarket and there have been no new deliveries since $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $4.49 $4.47 $4.26 $4.25 $3.87 $3.58 $3.58 $3.36 $3.29 ECONOMIC OUTLOOK The Fox Valley area is expected to continually absorb spillover demand from the North DuPage and I-88 submarkets which historically perform well. Submarket lease activity has its ebbs and flows from quarter to quarter within the Fox Valley as the bulk of the building stock is owner occupied. Although interest rates have jumped up as of late, they are expected to stabilize, allowing business owners the ability to tap bank loans in order to become their own landlords. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Colony Capital Cobalt Industrial REIT II Northwest Avenue West Chicago 212,256 12/18/14 $47.19 Colony Capital Cobalt Industrial REIT II 1111 Harvester Road West Chicago 202,991 12/18/14 $47.19 Cabot Properties, Inc. Murphy O'Brien 3825 Ohio Avenue Saint Charles 158,400 1/8/15 $64.84 Beth Fowler School of Dance DGJR Records Inc Illinois Avenue Saint Charles 81,609 3/25/15 $64.38 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Honeywell International Renewal 3825 Ohio Avenue Saint Charles 158,400 Wise Plastics New lease 1601 W Hawthorne Batavia 102,500 AGS Technology New lease 900 Douglas Road Batavia 76,638 Vanco International Renewal 506 Kingsland Drive Batavia 43,690 24

27 Fox Valley I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS SUBMARKET STATISTICS Velocity tends to lag the overall Chicago industrial market High ratio of heavy and advanced manufacturers Limited Class A bulk distribution product when compared to the I-88 and North DuPage submarkets Access to large, available and skilled local workforce Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 19,066, % 7.3% 166, , , ,826 $ Manufacturing 9,283, % 5.2% 37,036 37,036 37,036 37,036 $ Flex / R&D 1,634, % 19.6% 4,136 4,136 4,136 4,136 $ Industrial 34,258, % 5.5% 203, , , ,862 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 25 be placed on the information contained in this document.

28 I-39 DeKalb I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 22,760,349 direct vacancy 11.4% vacancy 11.4% net -193,139 YTD net -193,139 Average rental rate (nnn) $ month percent change -2.1% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000 AVERAGE RENTAL RATE 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% LEASE ACTIVITY The largest lease signed in recent months in the I-39 DeKalb submarket was Del Monte s renewal of 313,000 square feet in Rochelle. While Rochelle is a fairly tight market, there is very limited activity and the I-39 corridor is an area that exports a huge volume of agricultural and unprocessed and processed food products, much of which are shipped via the nearby Union Pacific Global III Intermodal Facility. Other large corporate occupiers in DeKalb include Nestle, 3M, and Target and various automotive and aerospace manufacturers. RENTS The average rental rate for I-39 DeKalb stands just under $2.91 per square foot which is at the lower end of the range for industrial property throughout the Chicago market. As one of the smaller submarkets in terms of square footage,i-39 benefits from being more affordable than more mature segments of the tri-state industrial market. SALES AND CONSTRUCTION American Realty Capital s purchase of the 1.0 million square-foot facility at 3095 Corporate Drive in DeKalb from Cardinal Industrial was one of the largest single tenant transactions in Chicago in recent years. This building was constructed in 1999 and is fully leased to Goodyear Tire until Also of note in investment sales, SparrowHawk purchased 711 Fairview Drive in DeKalb for $6.0 million. The facility is occupied by Nestle and serves as a regional distribution center. Since there is limited Class A product and conditions have not justified speculative development, new users in the area will look to engage a build-to-suit. The last new project to come online was CenterPoint s 327,000 square-foot build-to-suit for Nippon Sharyo; this facility will serve as additional production space for the Japanese railcar manufacturer which is seeing more business building passenger railcars for transit agencies across the country. $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $3.95 $3.56 $3.48 $3.35 $3.22 $3.23 $2.79 $2.97 $2.91 ECONOMIC OUTLOOK I-39 s exceptional intermodal assets have positioned the submarket favorably to accommodate transportation heavy users. The City of Rochelle, has accumulated a number of rail oriented users by offering switching service between UP and BNSF lines through a 12 mile municipally owned railroad. In anticipation of increasing demand for rail, the city completed a number of infrastructure projects in 2014 aimed at intermodal growth. This included $1.2 million worth of improvements to the municipal railway increasing capacity by 300 percent. As well as a $1 million investment extending waste water reach and capacity, in an initiative that will open up 2,500 acres to future industrial development. Strong rail infrastructure and large land availabilities position the region competitively to address intermodal dependent build-to-suit requirements. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. American Realty Capital Cardinal Industrial 3095 Corporate Drive DeKalb 1,005,767 1/31/14 $46.00 SparrowHawk Marquette Companies 711 Fairview Drive DeKalb 161,452 7/1/13 $37.16 STAG Industrial Venture One 1085 Peace Road DeKalb 159,508 3/1/13 $40.00 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Del Monte* 1Q13 Expansion 501 Steward Road Rochelle 312,750 Private Packaging Firm* 4Q13 New lease 421 California Street Sycamore 30,000 26

29 I-39 DeKalb I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Historically auto and aerospace manufacturing Lower land costs make build-to-suit options make the area an attractive industrial alternative More moderate lease velocity than other Chicago industrial submarkets More traditional industrial users SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction Warehouse / Distribution 14,248, % 24.4% -198, , , ,771 $ Manufacturing 4,794, % 17.1% $ Flex / R&D N/A N/A N/A N/A N/A N/A N/A N/A 0 0 Industrial 22,760, % 20.0% -193, , , ,139 $ YTD completions 2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 27 be placed on the information contained in this document.

30 I-57 Corridor I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 23,852,198 direct vacancy 13.6% vacancy 12.5% net 182,003 YTD net 182,003 Average rental rate (nnn) $ month percent change 0% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 1,500,000 1,000, , ,000-1,000,000-1,500,000 AVERAGE RENTAL RATE 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% LEASE ACTIVITY The most notable lease transaction in the I-57 submarket was Pratt Industries lease for 148,460 square feet with GLP/GIC at Mark Collins Drive in Sauk Village. Pratt selected the location to be in close proximity to it s Indiana facility and to utilize Canadian National rail service through LogistiCenter Sauk Village. ProTrans inked a new build-tosuit for 75,000 square feet with VentureOne for a 15-year term. The new site for the trucking and logistics company will be on Bond Street at Governors Highway in University Park. For users looking to save on drayage costs from the CN, BNSF and UP intermodals in Joliet and Elwood, the I-57 Corridor is well positioned to take advantage of the clustering of warehouses and distribution centers in the region. RENTS Rental rates in the I-57 market have trailed the overall Chicago industrial market and currently stand at $3.02 per square-foot. The area remains a viable lower cost alternative to the nearby I-55 and I-80 submarkets, through comparable interstate accessibility with the benefit of reduced rents and lower Will County property taxes. SALES AND CONSTRUCTION The most notable investment sale in the first quarter was Venture One s purchase of the 719,000 square-foot Michelin distribution center at S Ridgeland Avenue in Monee. Exeter sold the property at a 10 cap as Michelin has one year left on their lease before vacating for a 1.7 million square-foot build-to-suit in Wilmington. With three large blocks of space in excess 250,000 square feet on the market deterring investors no new speculative construction projects have been launched. $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $3.92 $4.01 $4.05 $3.48 $3.45 $3.45 $3.38 $3.04 $3.02 ECONOMIC OUTLOOK Historically, Will County has thrived as a result of a well-planned transportation system of roads, rails and rivers as well as its proximity to metropolitan Chicago. In University Park, USAA has partnered with Seefried Properties to develop three remaining pad sites in the Commerce Center Business Park. Sites range from 7 to 26 acres and other well established neighbors include Solo Cup and Georgia Pacific. Due to the slower leasing velocity in this area, it is most likely the development group will pursue build-to-suits or entertain offers to sell land to a user. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Venture One High Street S Ridgeland Avenue Monee 718,761 1/30/15 $27.62 Pac-Van, Inc. Hook's Concrete Construction S Cottage Grove Avenue Glenwood 16,728 2/18/15 $23.02 B-line Trucking Inc Flowers Foods, Inc Miller Circle Drive Matteson 12,900 2/20/15 $25.97 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Pratt Industries New lease Mark Collins Drive Sauk Village 148,460 ProTrans Build to Suit Bond Street/Governors Highway University Park 75,000 28

31 I-57 Corridor I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Lower lease velocity reflects its 30-mile distance from the urban Chicago market Area has a high ratio of manufacturers Limited Class A bulk product Located in Will County, with lower area tax rates and thriving transportation system SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 15,714, % 21.0% -59,852-59, , ,203 $ Manufacturing 4,401, % 20.6% $ Flex / R&D 408, % 15.9% $ Industrial 23,852, % 20.5% -81,052-81, , ,003 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 29 be placed on the information contained in this document.

32 McHenry County I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 28,210,910 direct vacancy 11.6% vacancy 11.8% net -142,826 YTD net -142,826 Average rental rate (nnn) $ month percent change -3.3% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. Net new supply Net vacancy 600,000 14% 400,000 12% 200, % -200,000 8% -400, ,000 6% -800,000 4% -1,000,000-1,200,000 2% AVERAGE RENTAL RATE $6.00 $5.50 $5.55 $5.29 $5.50 $4.83 $5.00 $4.37 $4.47 $4.28 $4.50 $4.30 $4.16 $4.00 $3.50 $3.00 $2.50 $2.00 LEASE ACTIVITY The largest lease transaction recorded in the last six months was Sage Product s lease with Colony Capital at 300 Exchange Drive in Crystal Lake. Also of significance was Sky High s renewal and expansion to take a total of 50,000 square feet for over ten years. While McHenry is not a high throughput distribution market and lacks access to intermodals terminals, the county features low barriers to entry due to abundant land. In addition, increased mechanization and automation of processes are boosting the fortunes of the local our industrial market a as lower energy costs give local manufacturers a competitive edge over China. RENTS Despite a 50 basis point uptick over last quarter, vacancy rates are exhibiting significant improvements over the 13.2 percent peak that took place between late 2013 and early A 975,000 square-foot manufacturing and distribution space available at the former Motorola corporate campus on 2001 N Division Street in Harvard continues to languish on the market. This property accounts for a disproportionate share of the vacancy and availability in McHenry and upon liquidation, overall submarket statistics will measure an improvement. SALES AND CONSTRUCTION The most significant investment sale in McHenry County was ARC s purchase of the Follett building at 1340 Ridgeview Drive. This sale leaseback transaction traded at a 7.23 cap rate. Three McHenry properties traded hands as part of Colony Capital s purchase of the Cobalt Industrial REIT II. This portfolio consisted of 256 assets across 30 markets and was valued at approximately $1.6 billion. There currently are no construction projects underway at this time in McHenry. ECONOMIC OUTLOOK Continuing infrastructure improvements along the I-90 corridor are opening up Chicago s northwestern submarkets to a new pool of industrial users. These projects have already resulted in a number of developments including a 750,000 square-foot build-to-suit for Weber Grills in neighboring Huntley, IL. In recent year s an increasing number of Lake County and Elgin based manufacturers have started migrating westward in pursuit of more affordable facilities capable of accommodating future growth. As more users migrate outward from O Hare and Northwest Cook County, McHenry s already established manufacturing cluster should stimulate industrial development activity. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. American Realty Capital Follett School Solutions 1340 Ridgeview Drive McHenry 486,868 12/3/14 $49.09 Colony Capital Cobalt Industrial REIT II 215 Exchange Drive (Part of Portfolio) Crystal Lake 142,128 12/18/14 $38.28 Chicago Coffee Roastery Republic Financial Corporation 7606 Industrial Court Spring Grove 45,105 1/8/15 $28.82 New Image Technologies, Inc. Adco Signs N Rose Farm R oad Woodstock 12,500 1/6/15 $51.48 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Sage Products New lease 300 Exchange Drive Crystal Lake 68,092 Sky High Renewal/expansion 215 Exchange Drive Crystal Lake 50,474 Graphic Arts Studio New lease Alexander Court Cary 44,800 Bioenergy Technology Sublease 340 Commerce Drive Crystal Lake 21,250 30

33 McHenry County I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS SUBMARKET STATISTICS Higher ratio of manufacturing with an educated, skilled workforce Much of the product is owner occupied Submarket affords a more corporate image Smaller footprints than other submarkets Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 12,499, % 12.7% 6,412 6,412-13,588-13,588 $ Manufacturing 12,386, % 14.5% -131, , , ,060 $ Flex / R&D 2,083, % 7.2% ,652 4,652 $ Industrial 28,210, % 16.0% -122, , , ,826 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 31 be placed on the information contained in this document.

34 North Chicago I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 73,484,473 direct vacancy 8.6% vacancy 8.6% net 568,031 YTD net 568,031 Average rental rate (nnn) $ month percent change 4.0% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY AVERAGE RENTAL RATE $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 s.f. Net new supply Net vacancy 2,000, % 1,500,000 1,000, , ,000-1,000,000-1,500,000 $7.44 $6.41 $5.63 $4.97 $5.51 $6.17 $6.21 $ % 7.0% 5.0% $6.44 LEASE ACTIVITY Trunk Club s lease on Goose Island represents one of North Chicago s most substantial commitments in past years. The Chicago based online clothing startup, will be tripling their current distribution space filling the remaining 170,000 square-feet next to UI Labs at 930 W Evergreen Avenue. LBP Manufacturing, maker of food packaging containers leased 180,000 square feet of warehouse space from ML Realty for short term overflow storage. The company has nearly outgrown their current Cicero location and is exploring options to for a new facility in Chicagoland. RENTS Currently the asking rental rates per square foot in the North Chicago submarket stand at $6.44 per square-foot, reflecting its close proximity to the urban core. Pricing remains high when considering that there is simply limited functional product on the city s north side. Many users struggle to find high bay product with efficient loading capabilities as well as property with adequate trailer and auto parking. For newer vintage buildings, the leverage stands in the landlords favor when courting tenants needing to be in the city in order to pull from the deep labor pool or to easily reach their suppliers or customer base. SALES AND CONSTRUCTION Madison Capital and ASB Real Estate Investments acquired a four building 83,516-square-foot portfolio from Economy Packing in the in the trendy Fulton Market/River West neighborhood. The investment group plans to eventually redevelop the site as many of the longtime food and beverage users in the area have relocated as the area gentrifies. Security Properties acquired a former Gonnella bakery at 1001 W Chicago Avenue, The 60,000 square-foot facility s $7.75 million sale price reflects a land value as the site will be redeveloped into a multi-family tower. There were no new construction deliveries in 2013 and no projects have broken ground in ECONOMIC OUTLOOK In addition to the large conglomerates with operations in Illinois, numerous smaller metal fabrication, electronics, and medical and healthcare product manufacturers operate on the north side of Chicago. While the effects of the recession rippled through the supply chain of the larger firms, it also opened up opportunities for smaller niche players. These startup firms, largely operating out of the city, are starting to show promising signs of steady growth. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Madison Capital & ASB Real Estate Economy Packing 934/939 Fulton Market, 312 Chicago 83,516 3/27/15 $ Investments Carpenter Street Security Properties, Inc. Gonnella Baking Company 1001 W Chicago Avenue Chicago 60,000 3/12/15 $ Donald M Flayton Revere Electric 2501 W Washington Boulevard Chicago 54,624 2/13/15 $ Remodeling Robert W Petrus 4257 W Drummond Place Chicago 53,000 3/6/15 $20.75 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size LBP Manufacturing Short term-overflow 1401 N Cicero Avenue Chicago 180,417 Trunk Club New lease 930 W. Evergreen Ave Chicago 170,000 UI Labs New lease 1333 N Hickory Street Chicago 94,740 TAG New lease 900 W. Bliss Street Chicago 9,383 32

35 North Chicago Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of boutique, smaller and mid-sized manufacturing Conversion and redevelopment pressure from area retailers and high-end residential multi-family and condo developers Food users, building supplies, and automotive suppliers are prominent SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 35,604, % 17.1% 440, , , ,393 $ Manufacturing 21,756, % 13.7% 69,314 69,314 70,814 70,814 $ Flex / R&D 5,875, % 12.7% 31,599 31,599 31,599 31,599 $ Industrial 73,484, % 13.3% 566, , , ,031 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 33 be placed on the information contained in this document.

36 North Kane I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 31,222,494 direct vacancy 12.6% vacancy 12.7% net 64,052 YTD net 64,052 Average rental rate (nnn) $ month percent change -1.5% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY Net new supply Net vacancy s.f. 2,000,000 1,500, % 13.0% 1,000, % 500, % 0 7.0% -500, % AVERAGE RENTAL RATE $6.00 $5.58 $5.50 $5.22 $5.19 $5.15 $4.97 $4.97 $5.00 $4.83 $4.50 $4.49 $4.42 $4.00 $3.50 $3.00 $2.50 $2.00 LEASE ACTIVITY Lease activity has remained consistent in North Kane County with healthy growth from local and regional firms and big box users. The largest transaction of the first quarter was Box Partners lease for 205,648 square feet at 2501 Galvin Drive in Elgin. This lease brings Conor Commercials 343,000 square-foot speculative building delivered 2013 to full occupancy. TA Associates leased up their latest acquisition from the market at 2750 Alft Lane in Elgin. Great Lakes Technology will take the remaining 56,049 square feet. Northern Builders came to terms on a 50,346 square-foot build-to-suit in the Hampshire Woods Business Park. RENTS The North Kane submarket s average net rental rate per square-foot stands just under $ 4.50 at the start of the new year. With the four most recent speculative buildings in North Kane stabilized, expect to see rents plateau as new investors enter the market and take advantage of the upswing in the cycle. SALES AND CONSTRUCTION The most notable investment sale in North Kane thus far in 2015 was TA Associate s take out of Bridge Development and Wanxiang on their newly developed 2750 Alft Lane. This property traded for $72 per square-foot.ta acquired 2700 Alft Lane from Bridge Development just last year. Westminster Funds committed $65 million in new equity to form a joint venture with Interstate Partners for three buildings in the Prairie Business Park: Prairie Parkway, One Arrowhead Drive, and Prairie Parkway. High Street acquired 1215 Bowes Road from a trustee for $63 per square-foot. Duke Realty completed the $43 million dollar Weber Stephens 757,120-square-foot, build-to-suit industrial facility in Huntley in the first quarter which was the second largest construction project in the market. In Gilberts, Interstate Partners is working towards a summer delivery of a 276,000 square-foot speculative building in the Prairie Business Park. Also of note, OPUS is building a 42,000 square-foot manufacturing building for King Shan. ECONOMIC OUTLOOK The market between Randall Road and 8 th Street in Elgin continues to be a hotbed of activity as the bulk of the modern institutional quality assets are clustered here within close proximity to I-90. Tenant demand is driven by a healthy national GDP and rising consumer spending on durable goods. As users migrate out of the tight O Hare and Central DuPage submarkets, expect to see an uptick in leasing activity in RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. TA Associates Bridge/Wanxiang 2750 Alft Lane Elgin 225,205 1/30/15 $72.49 Plymouth Industrial REIT Venture One 1875 Holmes Road Elgin 134,415 10/28/14 $55.63 Bucher Hydraulics, Inc. Zilber Property Group Northwest Parkway Elgin 110,343 1/8/15 $61.00 High Street Trustee Bowes Road Elgin 48,187 1/27/15 $63.30 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size BOX Partners New lease 2501 Galvin Drive Elgin 205,648 Great Lake Technologies New lease 2750 Alft Lane Elgin 56,049 Precision Color Graphics New lease 2750 Alft Lane Elgin 33,487 Goodman Distribution, Inc. New lease Vantage Drive Elgin 22,493 34

37 North Kane I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS High ratio of flex, R&D due to the suburban market characteristics of the area Large number of owner-occupiers Product in close proximity to full interchanges along I-90 commands a premium SUBMARKET STATISTICS Property type inventory Vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 17,954, % 18.6% 77,829 77,829 95,949 95,949 $ , ,120 Manufacturing 6,593, % 20.5% 4,000 4,000-31,520-31,520 $ ,000 0 Flex / R&D 3,634, % 7.6% 56,568 56,568 56,568 56,568 $ Industrial 31,222, % 17.1% 81,452 81,452 64,052 64,052 $ , , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 35 be placed on the information contained in this document.

38 Northwest Indiana I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 44,081,939 direct vacancy 6.1% vacancy 6.1% net 81,934 YTD net 81,934 Average rental rate (nnn) $ month percent change -1.50% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 AVERAGE RENTAL RATE Net new supply Net vacancy 12.4% 10.5% 8.7% 6.8% 5.0% LEASE ACTIVITY Edsal Manufacturing committed to a long term lease for 200,000 square feet at 700 Chase Avenue in Gary. The shelving products manufacturer is one of several Chicagoland firms jumping the border in recent months to escape higher taxes and workman s compensation rates. In addition, as part of the State of Indiana s subsidy to lure Edsal to Gary, the firm committed to expanding by 150,000 square feet within the next two years. Also of note, Insulation Fabricators, renewed their lease for 152,000 square feet with Industrial Realty Group at 2501 W 165 th Street for a term of seven years. Economic development authorities have reported that Industrial Recycling Group is in negotiation to lease 575,000 square-feet in the Ameriplex Business Park from TCB Development. RENTS Vacancy has fallen dramatically in Northwest Indiana and at $3.20 a square foot the submarket has some of the most attractive lease rates in the Chicago tri-state area. The Northwest Indiana market has tightened considerably with limited availability in it s modern business parks for product featuring high ceilings, ESFR sprinklers and ample loading capacity. Currently Venture One s 6750 Daniel Burnham Drive is the only Class A availability over 100,000 square feet across Lake and Porter Counties. SALES AND CONSTRUCTION Venture One is under contract to purchase a 123,000 square-foot multi-tenant building at 6525 Daniel Burnham Drive from a lender who took control of the property after previous owners defaulted. In Portage, MonoSol is making progress on their new 300,000 square-foot manufacturing facility. Becknell Industrial has plans to break ground on a 159,813 squarefoot speculative building in Northwind Crossing in Hobart in Spring $4.00 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $3.77 $3.66 $3.54 $3.38 $3.38 $3.14 $3.29 $3.20 $3.02 ECONOMIC OUTLOOK Increased industrial demand from support businesses serving the metals, petrochemical, power, steel industries in Northwest Indiana is helping to drive the 81,000 square feet of positive net recorded in the first quarter. As availabilities continue to tighten, expect to see upward pressure on rents and more interest from investors who can reposition and lease up struggling buildings. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. VentureOne/DRA Advisors Lincoln National Life 6750 Daniel Burnham Drive Portage 517,000 8/14/14 $26.69 Industrial Realty Group MIRVAC S Columbia Avenue Hammond 267,000 6/25/14 $12.96 T&B Tube Company Christian & John Sterling th Avenue Gary 196,000 3/13/15 $11.22 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Edsal Manufacturing New lease 700 Chase Avenue Gary 200,000 Insulation Fabricators Renewal 2051 W 165 th Street Hammond 152,462 Lear Seating New lease 6750 Daniel Burnham Drive Portage 93,000 36

39 Northwest Indiana I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS More measured in its lease velocity compared to other Chicago area submarkets Heaviest, traditional industrial users north of I-90 Limited Class A warehouse/distribution and flex/ R&D product due to the market being traditional heavy industrial but remains cost effective SUBMARKET STATISTICS Property type inventory vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 18,060, % 14.5% 10,454 10,454 10,454 10,454 $ Manufacturing 16,628, % 8.7% 2,000 2,000 2,000 2,000 $ , ,000 Flex / R&D 2,843, % 12.3% $ Industrial 44,081, % 10.4% 85,934 85,934 81,934 81,934 $ , , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 37 be placed on the information contained in this document.

40 Rockford I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 22,876,933 direct vacancy 12.3% vacancy 12.4% net 415,420 YTD net 415,420 Average rental rate (nnn) $ month percent change 0% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 800, , , , , , , ,000-1,000,000-1,200,000 AVERAGE RENTAL RATE Net new supply Net vacancy 20% 17% 14% 11% 8% 5% LEASE ACTIVITY The most notable lease transaction was electrical component manufacturer Catching Fluid Power leasing 33,000 square feet within a new Landmark Development building at Park 90 in Caledonia. As Rockford sits on the far northwestern edge of the Chicago metro industrial market, it tends to clock less activity. As a result, leasing activity can appear muted as much of the product was developed under long term build-to-suit leases. There is a general dearth of Class A industrial space and the main core product exists in the Rock 39 and Loves Park Corporate Center areas. RENTS The Rockford region offers significantly lower real estate costs than most other submarkets in the Chicago area. Lease rates stand just under $3.00 per square-foot due to the low costs of land and the generous backing of industrial development from local government which can fast track permitting and extend utilities and infrastructure. SALES AND CONSTRUCTION Rudebusch Development is nearing completion on a 186,000 square-foot FedEx Ground facility in the Rock 39 Business Park anticipated to deliver in the second quarter. The development is in close proximity to the UPS air hub and ConWay Freight truck terminal and will generate around 150 new jobs. Ceroni Piping Co. announced plans to relocate from an existing Belvidere facility into 30,000 square feet build-to-suit in Cherry Valley. The project, which breaks ground in November of this year, will result in $5.5 million of capital investment. Hayes Beer Distributing Co. plans to construct a 40,000 square foot addition to its existing building at 1819 Elmwood Drive. Since acquiring the warehouse in 2006 Hayes has spent $6.3 million expanding from 40,000 square feet to 120,000 square feet. $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $3.53 $3.31 $3.08 $3.07 $2.93 $2.93 $2.84 $2.69 $2.75 ECONOMIC OUTLOOK As part of Foreign Trade Zone 176, the Rockford area affords manufacturers and distributors substantial financial benefits. The region retains its strong dependence on the automotive industry with a significant cluster of six major automotive plants within a 120 mile radius. AAR s 200,000-square-foot facility at Rockford International Airport, expected to open in 2016, will operate 24 hours a day, allowing for scheduled and unscheduled work on commercial and military aircraft, the company said. It could employ as many as 500 people. Illinois, which negotiated with AAR for two years, said it will make a $15 million investment in the facility and provide $600,000 in job-training grants. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. $0.97(teardown A W Bennett Enterprise Inc. Hendricks Commercial Properties, 2816 N Main Street Rockford 310,000 10/20/14 value) Colony Capital Cobalt Industrial REIT II 1222 Crosslink Parkway Belvidere 180,060 12/18/14 $67.48 Monmouth REIT Cord Construction Company 5795 Logistics Parkway Rockford 38,833 10/14/14 $ Select Income REIT Cole Corporate Income Trust, Inc American Rd (Part of Portfolio) Rockford 38,360 1/29/15 TBD RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size Swiss Colony Brands New lease (4Q13) 1515 Commerce Drive Sun Prairie, WI 427,000 EcoLab Sublease 1630 Apex Drive Beloit 244,233 GE Aviation Renewal/expansion (4Q13) 1354 Clifford Avenue Loves Park 151,921 Catching Fluid Power New lease Park 90 Caledonia 33,000 38

41 Rockford I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Historically auto and aerospace manufacturing Little Class A product Co-located suppliers of components Lower land costs and fast-tracking permitting SUBMARKET STATISTICS Property type inventory Vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 11,397, % 15.2% 132, , , ,187 $ ,000 0 Manufacturing 6,490, % 17.1% 138, , , ,456 $ Flex / R&D 1,220, % 3.1% 2,400 2,400 2,400 2,400 $ Industrial 22,876, % 14.9% 415, , , ,420 $ , Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 39 be placed on the information contained in this document.

42 South Chicago I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 113,057,715 direct vacancy 10.3% vacancy 11.1% net -343,484 YTD net -343,484 Average rental rate (nnn) $ month percent change -1.8% Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000-2,000,000 AVERAGE RENTAL RATE $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $3.94 Net new supply Net vacancy $4.16 $4.27 $4.28 $4.00 $4.46 $4.55 $ % 8.2% 5.0% $4.31 LEASE ACTIVITY The most significant new lease was FedEx Ground selecting Scannell Properties for a 219,858 square-foot build-to-suit at 3000 South Damen Avenue. This new facility, on 41.3 acres, will feature immediate access to the Stevenson Expressway (Interstate 55). This facility will join 15 existing FedEx facilities serving Chicagoland. In late 2014 PECO Pallet s committed to 195,000 square feet from RREEF/Deutsche at 2924 E 126th Street. This building was later sold to Greenfield Partners as part of a larger portfolio. At Ashley Capital s Calumet Business Center, MWD Logistics expanded to lease a total of 115,000 square feet for three years. RENTS Rents in the South Chicago submarket stand at $4.31 per square foot marks a slight decrease from Across the submarket, figures point to increasing demand across the south side as the infill locations in the market lend themselves well to specific types of users dependent on skilled labor and access to public transit linkages. SALES AND CONSTRUCTION The most notable investment sale in South Chicago was Sitex Group s acquisition of a vacant building at 5000 S Homan Avenue for $23.42 per square-foot. This 30 clear rail served facility has abundant parking and yard space making for an excellent infill transload facility. Joe Perillo BMW acquired the former Midwest Folding Products facility at 1414 S Western Avenue for $12 per square-foot making this building a teardown candidate. The first new factory on the South Side in almost 30 years was the 150,000 square-foot Method Soaps facility in the Pullman neighborhood which is one of the few LEED Platinum factories in the US. Unilever, maker of Hellman s plans to build an 196,000 square-foot mayonnaise factory and distribution center at 28 th and Kilbourn. ECONOMIC OUTLOOK The South Chicago market is considerably stronger than the north but lags the overall market as a whole The south side of the city, traditionally an industrial stronghold, is widely know to have been plagued by years of decline. Much of the building stock is obsolete with lower ceiling heights, difficult egress, and limited land for trailer and vehicle parking. However, investors with optimally located modern assets should continue to see their properties outperform the overall submarket. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / s.f. Joe Perillo BMW Midwest Folding Products 1414 S Western Avenue Chicago 154,000 1/5/15 $12.34 R.P. Fox & Associates Mico Designs, Ltd W 21st Street Chicago 140,000 1/29/15 $23.93 Sitex Group Grand Trunk Western Railroad 5000 S Homan Avenue Chicago 128,100 1/13/15 $23.42 Balton Corporation Structured Development 1001 E 99th Street Chicago 104,158 2/25/15 $23.04 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size FedEx Ground Build-to-Suit 3000 S Damen Avenue Chicago 219,858 PECO Pallet New lease 2924 E 126 th Street Chicago 194,880 MWD Logistics Expansion/renewal E 97 th Place Chicago 115,200 Chef s Warehouse New lease 2801 S Western Avenue Chicago 108,397 40

43 South Chicago Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS SUBMARKET STATISTICS Property type inventory vacancy Higher ratio of manufacturing Limited bulk distribution spaces availability Q1 direct net YTD 2015 direct net Users in close proximity to urban core customers and suppliers Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 45,167, % 20.0% -294, , , ,327 $ Manufacturing 45,318, % 9.8% -4,607-4, , ,607 $ Flex / R&D 5,014, % 16.9% -45,585-45,585-45,585-45,585 $ Industrial 113,057, % 15.3% -215, , , ,484 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 41 be placed on the information contained in this document.

44 South Suburbs I Submarket News First Quarter 2015 KEY MARKET INDICATORS Supply Demand Pricing inventory 94,052,463 direct vacancy 8.5% vacancy 8.4% net 348,408 YTD net 348,408 Average rental rate (nnn) $ month percent change 1.0 % Arrows represent change from prior quarter NET NEW SUPPLY, NET ABSORPTION, VACANCY s.f. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , ,000-1,000,000-1,500,000 AVERAGE RENTAL RATE $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $4.55 $4.26 Net new supply Net vacancy $4.44 $4.76 $3.87 $3.98 $3.89 $ % 13.0% 11.0% 9.0% 7.0% 5.0% $3.61 LEASE ACTIVITY Transactions in Q1 concentrated on smaller footprint users. First Industrial s lease with Ole Mexican Foods for 37,120 square feet in Bedford Park represents the submarket s largest industrial lease in recent months. A limited inventory of big block space places the majority of south suburban industrial users in the sub-50,000 square-foot segment. The last transaction in excess of 100,000 sf occurred late last year after a renewal by 3PL M Block & Sons for 142,834 at 5100 W 70th Street, Bedford Park. Also of the note, M Block is negotiating with CBREI to extend their lease at Oak Park Avenue in Tinley Park. RENTS The South Suburbs posted 348,408 sf of positive net in the first quarter as a result of a series of new entrants to the market. Rents remained relatively flat with a four cent decline from last quarter. Vacancy rates showed improvement falling 40 basis points over the quarter and 70 basis points over the year. SALES AND CONSTRUCTION As a mature industrial market, land availabilities in the South Suburbs are limited. As of quarter one there was no new development activity underway. However, with three Class 1 intermodal terminals and superior highway access the submarket remains an optimal location for industrial users. As reflected in recent sales transactions, the area presents attractive opportunities for investors and owner-occupiers alike. The largest user sale in the first quarter was MVF Storage s acquisition of 76,460 sf at 4325 Frontage Rd in Oak Forest from Anderson Fittings for $27.47 per square foot. In Bedford Park, Professional Freezing Services company will relocate from it s current 44th Street location to a new 150,000 square-foot build-to-suit at 7035 W. 65th St. in Bedford Park. The company plans to demolish the existing 437,910-square-foot industrial property on the site and break ground later in the year. ECONOMIC OUTLOOK The South Suburbs remain an attractive locale for heavy industrial users as well as manufacturers dependent on an accessible, skilled and semi-skilled labor pool. Cook County accounts for half of the manufacturing base of the 10 county Northern Illinois region. As Norfolk Southern expands their yard in South Chicago, intermodal activity will increase as the alderman projects an estimated $146 million economic impact. RECENT SALES COMPARABLES (sorted by square feet) Buyer Seller Location City Size Date Price / sf MVF Storage LLC Anderson Fittings 4325 Frontage Road Oak Forest 76,460 1/12/15 $27.47 Tuffli Co Inc Michael J Maykut S Austin Avenue Alsip 50,483 1/6/15 $39.62 Cook Co Board of Education D&M Architectural Metals Duvan Drive Tinley Park 21,440 1/26/15 $34.28 Wright Properties LLC Red Hawk Fire and Security S Cicero Avenue Alsip 19,906 2/28/15 $32.65 RECENT LEASE COMPARABLES (sorted by square feet) Tenant Type Location City Size M Block Renewal 5100 W 70 th Street Bedford Park 142,834 Ole Mexican Foods New lease 6748 S Sayre Avenue Bedford Park 37,120 Emerson Process Management New lease 7650 W 185 th Street Tinley Park 25,488 Midway Windows & Doors New lease W 65 th Street Bedford Park 17,000 42

45 South Suburbs I Submarket News SUBMARKET MAP SUBMARKET CHARACTERISTICS Higher ratio of manufacturing; Chicago s five largest manufacturing sectors are fabricated metal, food, machinery, printing, and electrical equipment and component manufacturing Proximity to Chicago s deep urban core Excellent access to skilled and semi-skilled local workforce SUBMARKET STATISTICS Property type inventory Vacancy availability Q1 direct net YTD 2015 direct net Q1 total net YTD total net (s.f) Average direct asking rent ($ p.s.f.) Under construction YTD completions Warehouse / Distribution 44,998, % 13.8% 262, , , ,581 $ Manufacturing 30,975, % 12.0% -69,575-69,575-69,575-69,575 $ Flex / R&D 2,952, % 30.4% 8,633 8,633 8,633 8,633 $ Industrial 94,052, % 12.5% 214, , , ,408 $ Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 43 be placed on the information contained in this document.

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48 About JLL Jones Lang LaSalle (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying, and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisition's, and finance transactions in Its investment management business, LaSalle Investment Mangemnt, has $47 billion of real estate assets under management. For further information, visit JLL Research JLL s research team delivers intelligence, analysis, and insight through market leading reports and services that illuminate today s commercial real estate dynamics and identify tomorrow s challenges and opportunities. Our 300 professional researchers track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions. JLL JLL 8755 W Higgins Roads 200 East Randolph Street Suite 750 Suite 4700 Chicago, IL Chicago, IL Tel: Tel: Fax: Fax: Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should 46 be placed on the information contained in this document.