Demand Continues to Outpace Supply Leading to Record Low Vacancies

U.S. Research Report INDUSTRIAL MARKET OUTLOOK Q3 2017 Demand Continues to Outpace Supply Leading to Record Low Vacancies James Breeze, National Director of Industrial Research USA Featured Highlights > > The U.S. industrial sector continues to far outperform all other segments in the industry, with record levels of absorption, rent growth, construction and occupancy, all fueled by positive economic drivers and structural shifts favoring warehouse space. > > U.S. e-commerce sales grew 16% in Q2 2017 compared with the same time last year and now represent 10% of total non-auto retail sales. E-commerce will be a driving force in industrial real estate for the foreseeable future. > > The national industrial vacancy rate dropped 0.2 percentage points (pps) compared with the previous quarter to 5.2% the lowest rate on record despite more than 170 million square feet of new supply completing in the first three quarters of 2017. > > Product under construction remained high at 222 million square feet, the second-greatest quarterly level on record. Accordingly, vacancies could rise modestly in coming quarters if absorption does not keep pace. > > Tightening markets and new, higher-quality Class A industrial space hitting the market drove up asking rents to $6.32 per square foot/ per year (psf/yr) for all product types in Q3 2017, 10% higher than the same time last year and the highest asking rent on record. > > Essential indicators for industrial real estate, including loaded inbound container volumes and intermodal rail volume, continue to move in a positive direction. U.S. seaports are booming, with all major locations posting year-over-year increases in loaded inbound container volumes. Rail traffic also remains robust as year-to-date volumes are up more than 3% compared with the previous year. > > Growth in investor demand for industrial properties continues to surpass all other property types. More than $51 billion in industrial assets were purchased in the first three quarters of 2017, 23% higher than the same period a year ago. While single-asset sales dominated the first half of the year, large portfolio sales surged in third quarter, with more than $9 billion closing in the third quarter alone. Market Indicators Relative to Prior Quarter VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** * Projected ** Warehouse rents Summary Statistics Q3 2017 U.S. Industrial Market Vacancy Rate 5.2% Change From Q3 2016-0.5% Markets With Lower Vacancies Compared With Q3 2016 83.6% Q3 2017 Absorption (MSF) 68.7 Markets With Positive Absorption 82.6% Q3 2017 New Supply (MSF) 63.4 New Supply to Inventory 0.4% Under Construction (MSF) 222.8 ASKING RENTS PER SQUARE FOOT PER YEAR Q3 2017 Q4 2017* Average Warehouse/Distribution Center $5.37 Average Manufacturing Space $5.68 Average Flex Space $11.90

The U.S. industrial market rebounded from a relatively slow first half of 2017 with just under 69 million square feet absorbed, the third highest quarter on record, and the thirtieth consecutive quarter of positive net absorption. Year-to-date, continued demand from e-commerce and third-party logistics (3PL) users led to more than 183 million square feet of occupancy gains, lowering the overall vacancy rate to 5.2%, the lowest vacancy rate on record. Essential indicators for industrial real estate including loaded inbound container volumes and intermodal rail volume continue to move in a positive direction. Year-to-date loaded inbound container volumes increased in all major seaports at the end of September (according to the most recent data available). While volumes continue to grow at a brisk pace in most markets, the largest yearover-year gains were seen at the ports of Long Beach, Savannah and Houston, all increasing more than 10% compared with the same time a year ago, driving strong industrial demands. Rail traffic, too, is experiencing solid growth, with total annual volumes up 3% at the end of October. Strong traffic continues to increase demand in 2017 for industrial product in the major rail hub markets of Chicago, Kansas City, St. Louis and Atlanta. The manufacturing sector also continues to post robust fundamentals. The Institute for Supply Management s Purchasing Managers Index remained strong at 58.7 in October. The index has been in expansionary territory for 14 consecutive months. New orders, a key figure in the forecasting of manufacturing demand, finished October at a solid 63.4. With manufacturing output projected to remain strong into 2018 and the trend of reshoring continuing, look for industrial demand from manufacturers to increase in the coming quarters and push up demand in markets with robust manufacturing capabilities including Grand Rapids, Detroit and Cincinnati. A possible headwind arising in the industrial market is labor availability. With the U.S. economy near full employment and the industrial market needing more workers due to consumer shifts to e-commerce, intensifying warehouse demand, many occupiers are having difficulty finding adequate labor. This trend could have a negative effect on occupier expansion plans in the coming quarters. Despite this, import levels are strong, manufacturing is on the rise and the U.S. economy remains solid, all of which points to strong industrial fundamentals for the foreseeable future. U.S. Industrial Market Q1 2016 to Q3 2017 MSF 100 90 80 70 60 50 40 30 20 10 0 Source: Colliers International U.S. Industrial Indicators Q3 2017 INDEX Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 New Supply Absorption Vacancy Rate (%) SERIES SERIES INDEX INDEX (SEP. 2017) (OCT. 2017) PERCENTAGE POINT CHANGE DIRECTION RATE OF CHANGE TREND* (MONTHS) PMI 58.7 60.8-2.1 Growing Slower 14 New Orders 63.4 64.6-1.2 Growing Slower 14 Production 61.0 62.2-1.2 Growing Slower 14 Employment 59.8 60.3-0.5 Growing Slower 13 Supplier Deliveries Inventories 48.0 52.5-4.5 Contracting Customers' Inventories 61.4 64.4-3.0 Slowing Slower 18 From Growing 43.5 42.0 1.5 Too Low Slower 4 Prices 68.5 71.5-3.0 Increasing Slower 20 Backlog of Orders 55.0 58.0-3.0 Growing Slower 9 Exports 56.5 57.0-0.5 Growing Slower 20 Imports 54.0 54.0 0.0 Growing Same 9 Overall Economy Growing Slower 101 Manufacturing Sector Growing Slower 14 *Number of months moving in current direction Source: ISM 6.2% 6.0% 5.8% 5.6% 5.4% 5.2% 5.0% 4.8% 4.6% 1 2 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

Moderate Economic Expansion Continues Economic growth remains moderate, with a mix of stronger and weaker indicators, but no policy changes out of Washington or other economic drivers have materialized to fundamentally alter the course of recent trends. The only change has been the weather, as Hurricanes Harvey (Texas) and Irma (Florida) caused meaningful but temporary hits to employment, industrial output and consumption. All exhibited sharp declines in the affected zones in the immediate aftermath of the storms, followed by strong bounce backs in the following month. But the net impact on the economy in the long term will be slight. Impacts from Hurricane Maria (Puerto Rico) will be longer lasting though minor in scale given the region s relatively small economic output. U.S. Economic Indicators GDP Q3 2017 +3.0% Q2 2017 +3.1% ISM October 2017 PMI Total Railcar Traffic +3.3% since October 2016 Intermodal Traffic +3.6% since October 2016 Sources: BEA, ISM, AAR Overall, growth during the rest of the year should be a bit faster than in the first half of 2017, but down from the surge we saw in the second quarter. GDP jumped to a revised 3.1% in Q2, up from just 1.2% in Q1, for an average of 2.2%. The government s first estimate for third-quarter GDP came in at 3%, somewhat above consensus, as consumer spending and inventories were modestly higher than expected, but offset by declines in residential investment and business investment in structures. The expectation for all of 2017 is 2.2%, rising slightly to 2.3% next year. Significantly, this forecast is virtually identical to the survey results from a year ago, before the last election, largely due to many economists strongly questioning Washington s ability to execute on its policy promises, notwithstanding the election of more a business-friendly Congress and administration. One positive change, however, is that global GDP continues to strengthen. The International Monetary Fund (IMF) again raised its outlook, this time to 3.6% in 2017, up from 3.2% last year and the fastest since the recession as the world finally experiences synchronized growth in both developing and advanced nations. Global growth is forecast to rise to 3.7% in 2018. These trends bode well for the U.S. economy and for the industrial market, which gains from improving international trade, investment and manufacturing. U.S. job growth seems to have peaked and continues to slow as we near full employment. No doubt the job losses sustained in the September employment report were a one-off consequence of the hurricanes. Employment fell last month for the first time since September 2010, after 84 consecutive monthly job gains. Still, the longer-term trend has been falling. Since job growth peaked in early 2014, job gains have dropped in nine of the past 13 quarters. 3 58.7, up 6.8 pctg. pts from October 2016 RAIL TIME INDICATORS U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

Top 30 Markets: Absorption in Q3 2017 Stockton, CA 3.82M Los Angeles, CA 3.17M Tacoma, WA 2.06M Sacramento, CA 3.51M Denver, CO 2.76M Las Vegas, NV 5.63M Inland Empire, CA 14.83M Phoenix, AZ 6.34M Kansas City, MO-KS 6.60M Dallas-Fort Worth, TX 13.62M Minneapolis-St. Paul, MN 2.33M St. Louis, MO 3.46M Memphis, TN 2.47M Chicago, IL 13.46M Indianapolis, IN 4.24M Atlanta, GA 17.12M Northern New Jersey 3.09M Grand Rapids, MI 2.24M Lehigh Valley 2.31M Cincinnati, OH 4.46M Charlotte, NC 3.07M Boston, MA 2.49M Hartford, CT 3.10M Philadelphia, PA 8.64M Central New Jersey 5.17M Baltimore, MD 4.85M YTD 2017 Absorption (SF) 2.06M 17.12M 2.06M 5.00M Houston, TX 6.53M Savannah, GA 4.10M Tampa Bay, FL 1.95M Greenville-Spartanburg-Anderson, SC 2.54M South Florida 2.33M 10.00M 17.12M Vacancy Drops to Record Low Despite Robust Development U.S. e-commerce sales rose an impressive 16% in Q2 2017 compared with the same time last year and now represent 10% of total non-auto retail sales. The continued surge in online sales and the need to get products to consumers quickly while minimizing supply chain costs are forcing retailers and wholesalers into modern facilities and rapidly changing supply chain strategy. These changes will be a major contributor to industrial real estate demand for the foreseeable future. The overall industrial vacancy rate declined 0.2 pps from the previous quarter to 5.2%, the lowest vacancy rate on record. Vacancies fell in 67% of the markets we track compared with the previous quarter. Net absorption was positive for the thirtieth consecutive quarter at nearly 69 million square feet, the third highest quarterly net absorption on record. The increase in absorption can be attributed to multiple factors including a resurgence in big box demand, strong interest in smaller product and a plethora of pre-leased buildings completing construction. Significant demand, record low vacancy rates and additional class A space on the market from new construction increased asking rental rates in the U.S. to $6.32 psf/yr in the third quarter, 10% higher than this time last year and the highest asking rate on record. In previous cycles, higher asking rates ultimately reduced demand. However, in this cycle the importance of securing well-placed, modern distribution centers because of e-commerce, coupled with higher transportation costs, have rendered rising asking rates less pertinent. Eventually, asking rents will increase to a level where demand will be impacted, but the market has yet to reach this point. Development remains strong in core industrial markets, with Dallas-Fort Worth leading the way at nearly 20 million square feet completed in 2017. The Inland Empire, which continues to post robust fundamentals, has the most product under construction at a record 26 million square feet. Nearly 172 million square feet of new construction has been completed in 2017, 8% lower than this time last year. However, development appears set to pick up pace in the coming quarters with 222 million square feet currently under construction the second-highest amount on record. With a large amount of new development slated to hit the market in the next year, any drop off in leasing could cause modest increases in the overall vacancy rate. 4 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

Industrial Real Estate Stands Out in Sales Growth Industrial sales volume was robust for the third consecutive quarter leading to an impressive 23% increase in year-to-date sales compared with this time last year. Industrial was the only commercial product type to post year-over-year sales volume gains, according to Real Capital Analytics. Deal activity totaled nearly $52 billion for the first three quarters of 2017. The growth in sales volume remained strong for single-building sales which were up 10% compared with this time last year. However, portfolio sales experienced a robust quarter thanks to two large purchases by Blackstone, creating an 118% increase in third-quarter portfolio sales compared with last year and a 52% annual increase. Sales growth remains strong in secondary and tertiary locations, up 24% and 36% respectively compared with this time last year. Investors continue to pour into these markets because of the availability of product to purchase and a significant increase in occupier demand, which has improved fundamentals profoundly. Core market sales, which were down 9% for the first half of the year because of lack of product available to purchase, rebounded in third quarter thanks primarily to the increase in portfolio sales, and are now up 17% for the year. Capitalization rates have remained relatively stable since 2015 but did decline 0.2 percentage points compared with the previous quarter to a record low of 6.7%. What s Ahead for Industrial Real Estate? Top 5 MSAs* in Mid-2017: Transaction Volume Los Angeles Chicago Dallas Washington DC/Virginia Suburbs Inland Empire *Metropolitan Statistical Area Source: Colliers International Top 5 MSAs* in YTD 2017: Net Absorption Atlanta Inland Empire Dallas-Fort Worth Chicago Philadelphia *Metropolitan Statistical Area Source: Colliers International $4,397 million $2,950 million $2,280 million $2,279 million $2,092 million 17.1 MSF 14.8 MSF 13.6 MSF 13.5 MSF 8.6 MSF The industrial sector should continue to benefit from supply chain modernization brought on by e-commerce demand for the foreseeable future. With trade war fears declining in the short term, cargo volumes at U.S. ports are expected to remain strong and heighten demand for warehousing near these locations. NAFTA negotiations continue and the potential long-term effects on U.S. trade policy will be important to monitor although any impact from the renegotiation will not take effect until 2018 or later. The continued shift to more localized distribution the deployment of more warehouses in more locations to get products to consumers quickly has driven activity in many secondary markets with seaports, inland ports or growing population centers such as Phoenix, Indianapolis, Memphis, Savannah and Greenville, and will continue for the foreseeable future as occupiers increase their footprints in these strategic markets to better service their customers. A headwind to keep an eye out for is labor availability. Occupier demand for labor in modern fulfillment centers combined with an economy at or near full employment could delay or lower size requirements in the coming quarters. While the availability of labor will gain in importance in industrial site selection, look for the use of automation and other technologies to increase as a way of combating labor shortages throughout the country. All in all, U.S. industrial real estate continued its positive momentum in the third quarter and fundamentals are expected to stay strong with record low vacancies, record high asking rents and robust activity in the coming quarters. 5 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

Q3 2017 Vacancy Rate Q3 2017 Average Warehouse/Distribution Rent (S/SF/Year) Q3 2017 Absorption (SF) Supplemental Data: Largest 20 Markets Vacancy vs. Absorption By Port Location and Region 10% 9% 8% 7% 6% 5% 3% 2% 1% 0% Silicon Valley, CA 0.1M Cleveland, OH -0.1M 4% Cincinnati, OH 0.1M Memphis, TN 1.7M Milwaukee, WI 0.9M Detroit, MI 1.0M Los Angeles, CA 1.2M Phoenix, AZ 2.0M Kansas City, MO-KS 3.0M Houston, TX 3.0M Indianapolis, IN 1.3M Minneapolis-St. Paul, MN 1.0M Columbus, OH 1.9M New Jersey-Northern 1.8M New Jersey-Central 2.0M 0M 1M 2M 3M 4M 5M 6M Q3 2017 Absorption (SF) Source: Colliers Q3 2017 Industrial Survey Vacancy vs. YOY Change in Vacancy By Port Location and Region Q3 2017 Vacancy Rate 10% 9% 8% 7% 6% 4% 3% 2% 1% 0% Phoenix, AZ 5% Columbus, OH Port Location Eastern U.S. Great Lakes Gulf Coast Inland West Coast No port Philadelphia, PA New Jersey-Northern Cincinnati, OH Inland Empire, CA Memphis, TN Kansas City, MO-KS Source: Colliers Q3 2017 Industrial Survey Atlanta, GA 4.1M Chicago, IL 3.5M Philadelphia, PA 3.2M Cleveland, OH Port Location Eastern U.S. Great Lakes Gulf Coast Inland West Coast No port Atlanta, GA Houston, TX Indianapolis, IN Dallas-Ft. Worth, TX 4.4M Chicago, IL Minneapolis-St. Paul, MN New Jersey-Central Milwaukee, WI Detroit, MI Los Angeles, CA Region Midwest Northeast South West Inland Empire, CA 6.6M Dallas-Ft. Worth, TX Vacancy Outlook -1% (Over Next 12 Months) Up Same -2% Down -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% YOY Change in Vacancy (since Q3 2016) 7M Q2 2017 Warehouse Rent History & Outlook Rent Outlook Over Next 12 Months $8 $7 $6 $5 $4 $3 $2 $1 $0-2% Houston, TX Kansas City, MO-KS Los Angeles, CA Detroit, MI Atlanta, GA Indianapolis, IN Memphis, TN 0% 2% 4% 6% 8% 10% 12% 14% YOY Change in Warehouse/Distribution Rent (since Q3 2016) Source: Colliers Q3 2017 Industrial survey Absorption vs. New Supply by Port Location Absorption Outlook Over Next 12 Months 8M 7M 6M 5M 4M 3M 2M 1M 0M -1M -2M Port Location Eastern U.S. Great Lakes Gulf Coast Inland West Coast No port Absorption Outlook (Over Next 12 Months) Positive Close to zero Negative Source: Colliers Q3 2017 Industrial Survey New Jersey-Northern Chicago, IL Philadelphia, PA Dallas-Ft. Worth, TX Philadelphia, PA Houston, TX Inland Empire, CA Phoenix, AZ Columbus, OH Port Location Eastern U.S. Great Lakes Gulf Coast Inland West Coast No port Milwaukee, WI Cincinnati, OH New Jersey-Northern Phoenix, AZ Columbus, OH New Jersey-Central Memphis, TN Detroit, MI Indianapolis, IN Milwaukee, WI Los Angeles, CA Minneapolis-St. Paul, MN Silicon Valley, CA Cincinnati, OH Cleveland, OH Kansas City, MO-KS Inland Empire, CA New Jersey-Central Cleveland, OH Rent Outlook Up Same Down 16% 18% Dallas-Ft. Worth, TX Atlanta, GA Chicago, IL -6M -4M -2M 0M 2M 4M 6M 8M 10M 12M 14M 16M 18M 20M YTD 2017 New Supply (SF) 6 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Inventory, New Supply, Under Construction MARKET INVENTORY SEP. 30, 2017 (SF) TOTAL NEW SUPPLY Q3 2017 (SF) TOTAL UNDER CONSTRUCTION (SF) NORTHEAST Baltimore, MD 215,617,882 1,188,010 5,886,489 Boston, MA 148,069,748 0 772,500 Hartford, CT 107,217,170 0 10,000 New Hampshire 61,908,706 0 240,000 New York City Metro 809,919,248 2,409,192 15,143,982 > Central New Jersey 318,376,573 1,807,980 9,220,985 > Long Island 132,272,149 53,052 123,774 > Northern New Jersey 359,270,526 548,160 5,799,223 Philadelphia-Lehigh Valley, PA 445,493,492 3,867,544 6,878,410 Pittsburgh, PA 160,299,468 17,800 105,920 Washington, D.C. 196,053,956 698,510 2,101,355 Northeast Total 2,144,579,670 8,181,056 31,138,656 SOUTH Atlanta, GA 675,926,215 5,517,400 10,916,915 Augusta-Aiken, GA 9,620,480 0 0 Austin, TX 54,089,965 120,773 303,839 Birmingham, AL 115,023,251 0 0 Charleston, SC 47,706,605 307,353 2,389,875 Charlotte, NC 207,891,974 933,399 3,979,733 Columbia, SC 66,633,442 45,600 1,018,056 Dallas-Fort Worth, TX 791,567,171 5,847,870 21,479,141 Florence-Myrtle Beach, SC 35,667,735 22,270 0 Greenville-Spartanburg-Anderson, SC 191,336,153 499,000 6,143,926 Houston, TX 547,370,838 2,672,549 5,416,045 Huntsville, AL 46,679,825 0 0 Jacksonville, MI 127,311,328 416,435 1,849,491 Little Rock, AR 46,497,775 0 333,760 Memphis, TN 240,776,737 37,990 4,418,984 Nashville, TN 193,013,926 2,353,253 3,443,050 Norfolk, VA 68,452,374 180,405 0 Orlando, FL 141,202,180 325,871 1,842,906 Raleigh-Durham, NC 71,142,395 336,000 531,300 Richmond, VA 97,307,201 153,480 0 Savannah, GA 63,045,383 2,439,269 3,920,475 Shenandoah Valley-I-81 Corridor 90,575,618 0 2,749,273 South Florida 359,398,544 732,252 2,936,631 > Fort Lauderdale 106,051,691 166,370 1,397,791 > Miami 202,486,865 562,595 1,321,174 > Palm Beach 50,859,988 3,287 217,666 Tampa Bay, FL 209,796,956 155,000 2,878,166 South Total 4,498,034,071 23,096,169 76,551,566 Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. 7 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Inventory, New Supply, Under Construction (continued) MARKET INVENTORY SEP. 30, 2017 (SF) TOTAL NEW SUPPLY Q3 2017 (SF) TOTAL UNDER CONSTRUCTION (SF) MIDWEST Chicago, IL 1,372,239,345 6,272,371 12,042,863 Cincinnati, OH 256,722,206 937,658 3,757,514 Cleveland, OH 396,279,109 142,117 1,993,914 Columbus, OH 233,287,970 514,031 5,186,710 Dayton, OH 104,940,619 0 496,000 Detroit, MI 753,892,654 590,000 7,633,683 Grand Rapids, MI 116,867,615 237,069 1,111,890 Indianapolis, IN 241,955,400 1,500,015 7,000,348 Kansas City, MO 242,909,954 2,676,222 5,987,934 Milwaukee, WI 250,958,625 251,000 1,068,240 Minneapolis-St. Paul, MN 250,660,306 1,143,540 2,170,500 Omaha, NE 68,888,299 499,680 970,862 St. Louis, MO 234,378,054 892,660 3,627,018 Midwest Total 4,523,980,156 15,656,363 53,047,476 WEST Albuquerque, NM 39,333,554 0 0 Bakersfield, CA 32,278,056 0 0 Boise, ID 44,711,971 143,000 0 Denver, CO 230,567,825 1,591,158 4,001,246 Fresno, CA 47,840,327 37,402 0 Greater Los Angeles, CA 1,590,802,600 9,098,766 32,153,600 > Inland Empire 494,061,800 6,209,000 26,138,500 > Los Angeles 903,993,400 2,838,766 5,964,100 > Orange County 192,747,400 51,000 51,000 Honolulu, HI 40,040,303 0 0 Las Vegas, NV 128,993,445 1,413,231 3,462,663 Phoenix, AZ 294,852,325 1,516,616 3,895,681 Sacramento, CA 146,549,563 35,800 1,433,855 San Diego, CA 188,955,277 138,213 2,176,268 San Francisco Bay Area, CA 529,477,907 449,979 2,988,304 > East Bay 182,297,577 348,605 2,041,304 > Fairfield, CA 50,410,721 0 460,270 > San Francisco Peninsula 39,291,087 0 0 > Silicon Valley 257,478,522 101,374 486,730 Seattle-Puget Sound, WA 272,246,681 993,120 4,922,983 Stockton, CA 104,465,030 1,095,143 6,992,397 West Total 3,691,114,864 16,512,428 62,026,997 U.S. TOTAL 14,857,708,761 63,446,016 222,764,695 Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. 8 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Absorption, Vacancy MARKET ABSORPTION Q3 2017 (SF) YTD ABSORPTION VACANCY RATE JUN. 30, 2017 VACANCY RATE SEP. 30, 2017 NORTHEAST Baltimore, MD 2,086,900 4,850,153 7.2% 6.7% Boston, MA 731,341 2,487,917 10.3% 9.7% Hartford, CT 1,376,320 3,104,807 5.8% 5.2% New Hampshire 478,305 1,533,918 5.7% 6.4% New York City Metro 3,602,299 8,047,362 4.3% 4.1% > Central New Jersey 2,021,356 5,167,315 4.0% 3.8% > Long Island -246,554-210,289 3.5% 3.8% > Northern New Jersey 1,827,497 3,090,336 4.9% 4.4% Philadelphia-Lehigh Valley, PA 4,327,436 10,949,853 5.7% 5.6% Pittsburgh, PA -988,464 345,482 5.7% 5.7% Washington, D.C. 1,080,201 1,380,151 8.6% 8.4% Northeast Total 12,694,338 32,699,643 5.9% 5.7% SOUTH Atlanta, GA 4,079,431 17,118,449 7.2% 7.4% Augusta-Aiken, GA -193,056-134,756 13.3% 15.3% Austin, TX -77,897-412,689 6.9% 6.0% Birmingham, AL 109,155 482,836 8.0% 6.5% Charleston, SC -354,927 148,886 5.8% 7.1% Charlotte, NC 736,525 3,074,066 5.3% 5.3% Columbia, SC 395,388 1,074,789 10.1% 9.5% Dallas-Fort Worth, TX 4,387,014 13,617,918 6.2% 6.3% Florence-Myrtle Beach, SC -766,274-1,917,875 11.7% 13.9% Greenville-Spartanburg-Anderson, SC 639,170 2,544,337 6.8% 6.7% Houston, TX 2,992,207 6,529,862 6.1% 5.9% Huntsville, AL 197,462 300,998 7.8% 5.5% Jacksonville, MI 148,617 915,609 4.4% 4.6% Little Rock, AR -12,470 520,248 10.2% 10.3% Memphis, TN 1,714,166 2,465,493 7.5% 6.8% Nashville, TN 1,270,579 633,320 5.2% 4.2% Norfolk, VA 492,718 1,730,514 4.8% 4.6% Orlando, FL 623,011 1,542,458 5.3% 5.3% Raleigh-Durham, NC 423,048 679,109 6.3% 6.1% Richmond, VA 899,223 1,366,437 5.1% 4.6% Savannah, GA 2,891,765 4,101,655 2.9% 2.0% Shenandoah Valley-I-81 Corridor 35,126 1,264,027 6.5% 6.5% South Florida 640,029 2,333,806 4.2% 4.1% > Fort Lauderdale 134,297 837,580 4.1% 4.0% > Miami 155,826 733,792 4.3% 4.4% > Palm Beach 349,906 762,434 3.9% 3.1% Tampa Bay, FL 550,734 1,949,115 6.2% 5.7% South Total 21,820,744 61,928,612 6.3% 6.1% Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. 9 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Absorption, Vacancy (continued) MARKET ABSORPTION Q3 2017 (SF) YTD ABSORPTION VACANCY RATE JUN. 30, 2017 VACANCY RATE SEP. 30, 2017 MIDWEST Chicago, IL 3,497,179 13,463,405 6.7% 6.9% Cincinnati, OH 129,510 4,463,759 3.9% 4.0% Cleveland, OH -72,781 1,761,477 4.4% 4.5% Columbus, OH 1,869,600 1,437,052 5.8% 5.1% Dayton, OH 499,018 1,598,721 6.2% 5.7% Detroit, MI 1,045,987-302,521 3.6% 3.2% Grand Rapids, MI 378,850 2,243,350 5.1% 5.1% Indianapolis, IN 1,259,004 4,241,168 5.4% 5.6% Kansas City, MO 2,953,520 6,595,289 6.1% 5.9% Milwaukee, WI 922,705 1,260,861 4.4% 3.8% Minneapolis-St. Paul, MN 1,041,481 2,330,477 5.1% 5.0% Omaha, NE 349,921 678,757 3.3% 3.6% St. Louis, MO 2,154,202 3,460,082 6.9% 6.4% Midwest Total 16,028,196 43,231,877 5.4% 5.2% WEST Albuquerque, NM 134,893 130,048 5.3% 5.0% Bakersfield, CA -86,670-72,146 3.9% 3.2% Boise, ID 70,619 219,333 2.3% 2.5% Denver, CO 1,576,813 2,759,174 4.7% 4.7% Fresno, CA -124,610 492,542 4.2% 4.5% Greater Los Angeles, CA 7,398,900 17,378,700 2.2% 2.1% > Inland Empire 6,624,800 14,826,200 3.8% 3.4% > Los Angeles 1,248,800 3,171,900 1.2% 1.3% > Orange County -474,700-619,400 2.5% 2.7% Honolulu, HI -57,776-109,480 1.7% 1.9% Las Vegas, NV 1,829,265 5,627,774 5.4% 5.1% Phoenix, AZ 2,033,590 6,344,634 9.4% 9.3% Sacramento, CA 1,638,292 3,506,220 7.4% 6.3% San Diego, CA 522,609 1,464,321 4.8% 4.5% San Francisco Bay Area, CA 735,897 2,365,654 4.1% 4.2% > East Bay 537 425,147 2.5% 2.7% > Fairfield, CA 680,784 1,737,657 5.9% 5.3% > San Francisco Peninsula -24,450 9,734 1.6% 1.6% > Silicon Valley 79,026 193,116 5.3% 5.4% Seattle-Puget Sound, WA 1,170,843 1,537,451 3.1% 2.8% Stockton, CA 1,357,531 3,821,463 4.8% 4.5% West Total 18,200,196 45,465,688 3.9% 3.7% U.S. TOTAL 68,743,474 183,325,820 5.4% 5.2% Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. 10 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Average Asking NNN Rents as of Q3 2017 MARKET MANUFACTURING SPACE (USD/SF/YR) FLEX / SERVICE SPACE (USD/SF/YR) WAREHOUSE / DISTRIBUTION SPACE (USD/SF/YR) NORTHEAST Baltimore, MD $4.07 $10.14 $5.17 Boston, MA $7.09 $9.65 $6.44 Hartford, CT $4.41 $7.01 $5.01 New Hampshire $6.01 $9.41 $5.31 New York City Metro $7.22 $11.76 $7.43 > Central New Jersey $6.48 $12.20 $6.34 > Long Island $10.68 $14.80 $10.00 > Northern New Jersey $6.51 $9.76 $7.47 Philadelphia-Lehigh Valley, PA $3.98 $9.03 $4.92 Pittsburgh, PA $4.05 $9.69 $5.46 Washington, D.C. $7.20 $12.32 $7.88 Northeast Total $5.46 $10.76 $6.27 SOUTH Atlanta, GA $3.56 $9.13 $3.89 Augusta-Aiken, GA $1.51 $3.30 Austin, TX $13.36 $8.85 Birmingham, AL $7.14 $4.39 Charleston, SC $4.71 $8.14 $5.23 Charlotte, NC $2.79 $8.95 $4.72 Columbia, SC $2.85 $9.82 $3.25 Dallas-Fort Worth, TX $5.15 $9.28 $4.31 Florence-Myrtle Beach, SC $2.13 $7.31 $2.70 Greenville-Spartanburg-Anderson, SC $4.32 $7.84 $3.64 Houston, TX $10.43 $6.57 Huntsville, AL $8.41 $4.56 Jacksonville, MI $9.71 $4.11 Little Rock, AR $3.99 $3.34 Memphis, TN $6.44 $2.87 Nashville, TN $4.31 $9.84 $5.93 Norfolk, VA $5.97 $12.37 $4.62 Orlando, FL $9.81 $5.80 Raleigh-Durham, NC $13.82 $5.51 Richmond, VA $4.94 $9.85 $4.54 Savannah, GA $3.70 $7.00 $4.19 Shenandoah Valley-I-81 Corridor $4.39 $5.77 $3.62 South Florida $10.23 $15.35 $10.71 > Fort Lauderdale $8.76 $12.94 $8.58 > Miami $14.33 $19.86 $11.73 > Palm Beach $8.09 $13.54 $8.83 Tampa Bay, FL $9.46 $4.84 South Total $4.12 $9.78 $4.88 Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. * Straight averages used 11 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

United States Industrial Survey Average Asking NNN Rents as of Q3 2017 (continued) MARKET MANUFACTURING SPACE (USD/SF/YR) FLEX / SERVICE SPACE (USD/SF/YR) WAREHOUSE / DISTRIBUTION SPACE (USD/SF/YR) MIDWEST Chicago, IL $5.06 Cincinnati, OH $3.78 $6.64 $4.03 Cleveland, OH $3.29 $7.11 $4.27 Columbus, OH $6.42 $3.25 Dayton, OH $2.52 $4.69 $3.43 Detroit, MI $8.17 $5.11 Grand Rapids, MI $3.66 $3.77 $3.67 Indianapolis, IN $5.50 $6.48 $3.54 Kansas City, MO $4.35 $8.89 $4.58 Milwaukee, WI $4.75 $5.86 $4.90 Minneapolis-St. Paul, MN $4.86 $5.05 $4.70 Omaha, NE $5.92 $4.93 St. Louis, MO $4.46 $7.54 $4.33 Midwest Total $4.25 $6.84 $4.65 WEST Albuquerque, NM $8.68 $7.82 $6.72 Bakersfield, CA $9.49 $6.49 Boise, ID $6.55 Denver, CO $9.20 $11.03 $7.59 Fresno, CA $3.07 $11.44 $5.18 Greater Los Angeles, CA $7.87 > Inland Empire $6.76 > Los Angeles $8.40 > Orange County $10.32 Honolulu, HI $14.97 Las Vegas, NV $9.32 $11.11 $7.09 Phoenix, AZ $7.44 $12.76 $6.35 Sacramento, CA $5.95 $9.13 $5.01 San Diego, CA $11.09 $22.93 $10.88 San Francisco Bay Area, CA $11.19 $24.50 $8.41 > East Bay $10.11 $20.04 $7.51 > Fairfield, CA $8.10 $7.26 $5.52 > San Francisco Peninsula $18.15 > Silicon Valley $14.13 $24.78 $10.52 Seattle-Puget Sound, WA $8.88 $18.10 $7.71 Stockton, CA $7.83 $5.47 $5.76 West Total $9.19 $19.28 $7.32 U.S. TOTAL $5.68 $11.90 $5.37 Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals. * Straight averages used 12 U.S. Research Report Q3 2017 Industrial Market Outlook Colliers International

INDUSTRIAL SERVICES CONTACT Pete Quinn, SIOR National Director, Industrial USA +1 317 713 2107 pete.quinn@colliers.com RESEARCH CONTACTS James Breeze National Director of Industrial Research USA +1 602 222 5184 james.breeze@colliers.com Pete Culliney Director of Research Global +1 212 716 3689 pete.culliney@colliers.com CONTRIBUTORS Andrew Nelson Chief Economist USA Jeff Simonson U.S. Senior Research Analyst USA AJ Paniagua U.S. Research Analyst USA For more, explore Your Market Insights Hub U.S. Industrial Engage with the latest data and forecasts in interactive, sortable views. Copyright 2017 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Colliers International 865 S. Figueroa St., Suite 3500 Los Angeles, CA 90017 +1 213 627 1214 colliers.com