Good Times Continue to Roll - But Supply Threat Looms

United States Research Report INDUSTRIAL OUTLOOK Q3 2015 Good Times Continue to Roll - But Supply Threat Looms Pete Culliney Director of Research Global Thomas Galvin Regional Research Analyst Research Services Key Takeaways > > The industrial vacancy rate declined by 20 basis points (bps) to 6.6%, the 22nd straight quarter of rising industrial demand. Industrial vacancy rates have steadily declined since peaking at 11.2% in Q1 2010. > > industrial demand has remained positive with net absorption totaling 59.1 million square feet this quarter > > Healthy occupier demand and the need for modern industrial space has continued to spur industrial construction. More than 41 million square feet of space was added to the industrial base, much of which was in built-tosuit projects. > > Positive industrial demand and tightening market conditions continue to put upward pressure on average asking rents, which now stand at $5.28 PSF per year. Asking rents have been steadily rising over the past 16 quarters since bottoming out at $4.53 PSF in Q3 2011. However, rents are still below the prior peak of $5.63 reached in Q2 2008. > > Some markets are seeing outsized increases in rents. The asking rent for warehouse space was up significantly year-over-year in the following markets: Austin (30.0%), Oakland (24.4%) and Sacramento (17.1%). Bulk asking rents were up year-over-year in Chicago (31.5%), Seattle / Puget Sound (24.9%) and San Francisco (24.5%). Markets where flex/service asking rents were up year-over-year include: San Francisco (35.5%), Nashville (28.9%) and Houston (23.5%). > > The results of Colliers Q3 survey remained optimistic. Of the 70 markets surveyed by Colliers, 63% expected further tightening in vacancy rates and 66% expect industrial rents to continue to rise in upcoming quarters. > > Demand for industrial assets remains strong for both foreign and domestic buyers. This year saw record acquisition on a wholesale level in the entry of Global Logistics Properties and the sale of KTR to ProLogis. Year to date, investment activity in industrial assets is up 43% over 2014. > > Looking forward, prospects for future industrial investment into the are cloudy Expected interest rates increase in the would likely induce capital inflow from emerging markets, further compressing already low cap rates. On the other hand, global trade is slowing with the slowing global economy, perhaps reducing near-term demand for industrial space. Market Indicators Relative to prior period VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** * Projected, relative to prior period ** Warehouse rents Summary Statistics, Q3 2015 United States Industrial Market Vacancy Rate 6.6% Change from Q2 2015 (Basis Points) Absorption (MSF) New Supply (MSF) Under Construction (MSF) ASKING RENTS PER SQUARE FOOT PER YEAR Q3 2015 Q4 2015* -20 59.1 41.3 181.3 Average Warehouse/ Distribution Center $5.28 Change from Q2 2015 1.6%

Industrial Vacancy, Inventory & Absorption Q3 2015 United States SF By Region 4.5 billion 2.25 billion 450 mil. Occupied SF Vacant SF The industrial market is at a post-recession high, recording the lowest levels of vacancy coupled with very strong absorption. This is leading to upward pressure on asking rental rates, which have increased 1.6% from the previous quarter. Some caution is warranted, however, as the market currently has over 181 million SF currently under construction, more than at any other time in the last 10 years. More than other property types, industrial is prone to boom / bust cycles dues to the low barriers to entry and relatively short delivery time. Market fundamentals currently suggest that newer and more modern industrial space is needed; however 56% of space currently under construction is speculative in nature. This poses a significant risk of supply overshoot if global economic conditions were to unexpectedly reverse. Industrial Economic Indicators GDP in the third quarter increased at an annual rate of 1.5 percent. This lower-than-expected growth was due to inventory drawdowns and the relative strength of the dollar adversely impacting exports. Gains were made in personal consumption and building construction. The manufacturing sector posted anemic growth with the Purchasing Managers Index recording only 50.1 in October; figures above 50% indicate expansion, so the current level suggests manufacturing risks contracting. Growth was seen in new orders and production, while inventories and employment fell. Nationally, the unemployment rate stands at 5.0% at the end of October, the lowest its been since April of 2008. Over the last 12 months, the economy has added 1.8 million jobs with construction adding 228,000 jobs, manufacturing adding 65,000 jobs and transportation and warehousing adding 107,000 jobs in the last 12 months. These industries are the heaviest users of industrial space. So far for 2015 the American Association of Railroads has reported a Industrial Economic Indicators GDP Q3 2015 1.5% (advance estimate) Q2 2015 3.9%, up from 0.6% in Q1 2015 ISM Oct-15 PMI RAIL TIME INDICATORS: AAR.ORG Total Railcar Traffic Intermodal Traffic Sources: BEA, ISM, AAR Oct-15 PMI 50.1, down.1 pctg. pts. from Sept-15-4.6% YOY since Oct-14 + 2.1% YOY since Oct-14 4.6% year-over-year decrease in total railcar traffic. A major reason for this decline in railroad traffic has been decreased demand for petroleum, metallic ores and coal. In the third quarter imports into the have increased faster than exports, due to both the relative strength of the dollar and slowing global economic growth. Imports are up 5.5% from one year ago while exports have increased only 1.5% over this same time period. Canada remains the largest export market for goods and services accounting for 10.3% of exports, while China remains the largest exporter to the, accounting for 12.7% of imports into the United States. The Trans-Pacific Partnership (TPP), a trade agreement among twelve countries, was reached in October after seven years of negation, though it still must be ratified by the signatory nations. The TPP contains measures to lower trade barriers, enhance the development of production and supply chains, and open up foreign markets among other provisions. The effects of the TPP are far reaching and it will take time before the winners and losers of this agreement are made clear. In the long run, the reduction of tariffs and taxes should benefit both consumers and producers across all 2 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

countries however in the short run certain industries are likely to be negatively impacted. Significantly, China is not a party to the TPP, so clearly not all Asian trade is represented, limiting TPP s total impact. Nonetheless, the trade agreement should continue the trend toward easier and more trade among nations, which has no doubt benefited logistics firms and the warehousing sector. Industrial Market Q3 2013 to Q3 2015 Vacancy Driven by robust absorption in the top markets, the vacancy rate fell by 20 bps to 6.6% in Q3. The decline was broad-based, with 87% of markets seeing a decline in vacancy. Manufacturing at a Glance - October 2015 INDEX SERIES INDEX (JULY 2015) SERIES INDEX (JUNE 2015) PERCENTAGE- POINT CHANGE DIRECTION RATE OF CHANGE TREND* (MONTHS) 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Q3 2013 8.3 8.1 7.9 7.7 Q4 Q1 2014 Q2 7.5 Q3 7.2 7.0 6.7 6.6 Q4 Q1 2015 Q2 Q3 10.0 8.0 6.0 4.0 2.0 0.0 Vacancy % PMI 50.1 53.5-0.8 Growing Slower 34 New Orders 52.9 56 0.5 Growing Faster 35 Absorption MSF Completions MSF Vacancy % Source: Colliers International Production 52.9 51.8 2.0 Growing Faster 38 Employment 47.6 50.5-2.8 Contracting Supplier Deliveries From Growing 50.4 50.2 0.1 Sowing Faster 3 Inventories 46.5 48.5-3.5 Contracting Faster 4 Customer Inventories 51 54.5-4.5 Too High Slower 3 Prices 39 38-5.5 Decreasing Slower 12 Backlog of Orders 42.5 41.5-4.5 Contracting Slower 5 Exports 46.5 46.5-1.5 Contracting Slower 5 Imports 47 50.5-1.5 Contracting From Growing 1 OVERALL ECONOMY Growing Slower 77 Manufacturing Sector Growing Slower 34 *Number of months moving in current direction Source: ISM 1 How would you characterize current industrial rents in your market? No Clear Direction, 14.3% Bottoming, 1.4% Declining, 1.4% N/A, 7.1% Peaking, 10% % of reporting markets Source: Colliers International Increasing, 65.7% Vacancy rates declined in every region, led by the, which dropped 30 bps to 4.7%. Still, there is a wide disparity in rates among the regions. The remained the lowest at 4.7%, trailed by the (6.4%), (7.4%) and (8.4%). ern markets ranked among the lowest vacancy rates include: Los Angeles (1.6%), Honolulu (2.2%), and Orange County (2.6%). Savannah continued to be the best performer in the third quarter with the vacancy rate dropping by 150 bps to 2.3%. On the other end of the spectrum, vacancy rates increased in Dallas Ft. Worth (+30 bps) and Atlanta (+20 bps) due to vacant construction completions rather than downsizing companies. Billions $70 $60 $50 $40 $30 $20 $10 $- Industrial Transaction Volume Q3 2015 - United States 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 Rolling 4-Qtr Deal Volume Series2 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 200% 150% 100% 50% 0% -50% -100% 3 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

Absorption Net absorption was strong in Q3 at 59.1 million square feet, with 22 markets reporting over one million square feet of positive net absorption this quarter. Due to robust industrial demand for warehousing and distribution space, we expect strong absorption in markets dominated by larger distribution space. Absorption this quarter was more spread out than in previous quarters, although the same markets continue to dominate, with Los Angeles Inland Empire reporting 4.2 million square feet and Atlanta showing 2.9 million square feet. This quarter also saw Seattle / Puget Sound report 2.9 million square feet due to the completion of a 2 million square feet build to suit for Amazon and Memphis recording 2.6 million square feet due to several large leases and user purchases this quarter. Construction Activity Excluding renewals, of the leases signed this quarter, Excluding did renewals, most of tenants the leases expand, signed this quarter, hold steady did most or contract? tenants Expand, Hold Steady or Contract? 100% Excluding renewals, of the leases signed 4.3% this quarter, 7.1% did most tenants 7.7% Expand, Hold Steady 12.5% or Contract? 80% 100% 7.7% 30.8% 40.0% 12.5% 80% 45.8% 30.8% 40.0% 45.8% 40% 40% 61.5% 20% 60.0% 61.5% 41.7% 20% 60.0% 41.7% 0% 0% 4.3% 7.1% 51.4% 73.9% 51.4% 73.9% 21.7% 21.7% 41.4% 41.4% Rising industrial demand is pushing new supply to pre-recession levels. Some 59 million square feet of space came online in Q3, and over the previous 12 months there has been a total of 184 million square feet added to the industrial base, approaching the yearly alltime high of 196 million square feet seen in 2008. We are now tracking 181 million square feet of industrial space under construction that is expected to come online in the next 18 months. Construction is heavily concentrated in a handful of markets such as Los Angeles Inland Empire (19 million square feet), Atlanta (16 million square feet), Dallas-Ft. Worth (14.4 million square feet) and Chicago (12.5 million square feet). In each of those markets, virtually all of the new supply will be modern distribution centers with high ceilings, large truck courts, ESFR sprinklers and other improvements demanded by logistics and e-retailer tenants. One concern is that more than half of the space under construction (57% or 102 million square feet) is speculative. So far, gains in industrial demand have remained greater than gains in the industrial supply. Net absorption has averaged 64 million square feet per quarter over the last four quarters while new supply has averaged 46 million square feet a quarter over the last four quarters. Thus, at current rates, there would be little trouble filling the entire inventory Absorption, Under Construction (SF) Select Markets Q3 2015 Millions 0.0 5.0 10.0 15.0 20.0 25.0 Los Angeles - Inland Empire, CA Atlanta, GA New Jersey - Central Houston, TX Los Angeles, CA Savannah, GA Chicago, IL New Jersey - Northern Dallas-Ft. Worth, TX Indianapolis, IN Vacancy % Contract Holding Steady Expand N/A Contract Holding Steady Expand N/A Provide a three month forecast for rents (relative to current quarter): Vacancy % 100% Provide a three month forecast 7.7% for 4.3% vacancy 7.1% levels (relative 12.5% to current quarter): Provide a three month forecast for 17.4% vacancy Excluding renewals, of the leases signed this quarter, did most levels 30.0% 80% 100% (relative tenants to Expand, current Hold quarter): 4.2% Steady 4.3% or Contract? 5.7% 25.0% 30.0% 15.4% 100% 4.3% 7.1% 7.7% 100% 4.2% 25.0% 12.5% 80% 4.3% 31.4% 5.7% 80% 15.4% 61.5% 47.8% 30.8% 40.0% 38.5% 45.8% 80% 25.0% 51.4% 31.4% 40% 73.9% 70.0% 100.0% 47.8% 78.3% 40% 40% 62.5% 38.5% 62.9% 70.8% 61.5% 20% 20% 60.0% 41.7% 62.9% 30.8% 41.4% 20% 100.0% 46.2% 47.8% 21.7% 0% 40% 0% Contract Holding Steady Expand N/A 0% 70.8% 62.9% 20% 46.2% 47.8% Contract Holding Steady Expand N/A Up Same Down N/A 0% Down Same Up N/A Provide 0% a three month forecast for vacancy Provide a three month forecast for vacancy 100% levels (relative to current quarter): 4.2% 4.3% 5.7% 100% 15.4% 4.2% 4.3% 5.7% 80% Down Same 25.0% 15.4% Up 31.4% N/A 80% 25.0% 47.8% 31.4% 38.5% 47.8% 38.5% 100.0% 100.0% 40% 40% 70.8% 70.8% 62.9% 20% 20% 46.2% 47.8% 46.2% 47.8% 0% Down Same levels (relative to current quarter): Up N/A U. 80.0 8 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Q3 20 A Source: Colliers International Currently U/C Q3-15 Absorption % of reporting markets Source: Colliers International 4 United States Research Report Q3 2015 Industrial Market Outlook Colliers International ncy % Vacancy % Millions -2.0 0.0 2.0 4.0 6.0 8.0 10.0

of 181 million square feet of new supply projected to hit the market. Still, the high share of speculative space could be problematic should an unforeseen adverse event occur reducing industrial tenant demand. Transaction Activity Investor demand for industrial real estate remains high; however growth may slow relative to previous quarters due to the lack of portfolio deals. Year to date, investment volume is up 8% over the previous year on investment volumes of $50.7 billion. Of this, roughly $23.8 billion (47%) has been from foreign direct investment inflows, primarily focused on New Jersey ($1.6 billion), Inland Empire ($1.6 billion) and Chicago ($1.5 billion). Much of this total involves Global Logistics Properties purchasing assets from Industrial Income Trust. Foreign investors seek the stability of denominated assets and are drawn to the industrial sector s relatively low volatility compared to office or retail investments. In today s low yield environment, the industrial sector continues to post the highest average cap rates for any commercial property type, averaging 6.8% nationwide. Although the gap is narrowing with the other sectors, industrial returns remain compelling for many investors on a risk-adjusted basis. Foreign investors are weighing the strength of the dollar in their calculations; and the dollar may strengthen further with the anticipated Fed hikes. But with the continuing stagnation in the European and Asian markets, the will continue to be a safe haven for investors to park their money. Conclusion The industrial sector is posting record absorption and rental rate increases despite mixed macro-economic signals. Notwithstanding continued volatility in both GDP and job growth, the economy is generally outperforming most advanced economies, albeit growing slower than many would like. Beyond that some of the key drivers for warehousing, including manufacturing and trade, are areas of relative weakness, in large part due to the slowing global economy and the relative strength of the dollar, making exports less competitive. In addition, the prolonged weakness for oil, gas and other minerals continues to strain the economies of commoditydependents metros such as Houston. In sum, drivers for the industrial sector are favorable overall, though some clouds on the horizon bear watching for signs of possible slowing for the sector. Industrial Real Estate Indicators GDP: Inventory Vacancy Net Absorption New Supply New Supply to Inventory Source: Colliers International Top 5 MSAs in Transaction Volume Q2 2015 1. Los Angeles $4.0 bil 2. Chicago $2.4 bil 3. No NJ $2.4 bil 4. Dallas $2.2 bil 5. Inland Empire $2.2 bil Sources: Real Capital Analytics, Colliers International +1.5% in Q3 15.1 bsf 6.6% Nationwide (down 10 bps) 59.1 msf in Q3 41.3 msf in Q3, down 18% over Q2 1.1% annualized Note: Up to 2% is considered healthy Net Absorption to New Supply Ratio 1.4:1 Q3 2015 vs. 1.4:1 Q2 2015 - Top 10 Markets account for 39.7% of 62.6 msf net absorption in Q3. Top 5 MSAs Q3 Net Absorption 1. LA - Inland Empire, CA 4.2 MSF 2. Atlanta, GA 2.9 MSF 3. Seattle / Puget Sound, WA 2.9 MSF 4. Memphis, TN 2.6 MSF 5. Detroit, MI 2.3 MSF Source: Colliers International United States Industrial Overview Q3 2015 UNITED STATES WEST MIDWEST SOUTH NORTHEAST Number of Markets 70 23 13 24 10 Inventory (Millions SF) 15,079.6 3,903.4 4,282.5 4,621.5 2,272.1 % of N.A. Inventory 89.3% 23.1% 25.4% 27.4% 13.5% New Supply (Millions SF) 41.3 15.1 7.9 14.8 3.5 % of N.A. New Supply 90.1% 33.0% 17.2% 32.2% 7.7% Vacancy (%) 6.6% 4.7% 6.4% 7.4% 8.4% Absorption (Millions SF) 59.1 21.4 11.5 18.7 7.4 % of N.A. Absorption 94.3% 34.1% 18.4% 29.9% 11.9% 5 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Inventory, New Supply, Under Construction EXISTING INVENTORY (SF) SEPT 30, 2015 SPECULATIVE NEW SUPPLY Q3 2015 (SF) TOTAL NEW SUPPLY Q3 2015 (SF) YTD NEW SUPPLY SPECULATIVE CURRENTLY UNDER CONSTRUCTION (SF) TOTAL CURRENTLY UNDER CONSTRUCTION (SF) NORTHEAST Baltimore, MD 230,520,106 0 144,000 1,955,985 0 225,445 Boston, MA 171,369,699 0 40,000 426,000 0 1,349,972 Hartford, CT 95,613,351 0 0 0 0 292,000 Long Island, NY 156,475,662 0 0 0 350,860 350,860 New Hampshire 61,542,042 0 0 0 0 0 New Jersey - Central 316,917,464 1,505,248 1,570,823 2,179,099 2,695,535 2,695,535 New Jersey - Northern 366,435,000 0 160,000 304,000 1,291,729 1,916,729 Philadelphia, PA 422,208,863 598,333 598,333 5,325,084 6,105,155 10,639,160 Pittsburgh, PA 176,906,708 78,200 78,200 724,452 128,800 1,402,573 Washington, DC 274,149,537 469,034 920,249 2,626,745 1,838,711 3,850,426 Total 2,272,138,432 2,650,815 3,511,605 13,541,365 12,410,790 22,722,700 SOUTH Atlanta, GA 632,252,583 2,697,538 4,375,538 9,184,400 8,605,194 16,058,309 Austin, TX 66,240,154 420,525 420,525 917,729 295,500 353,100 Birmingham, AL 107,102,000 0 0 70,000 0 120,000 Charleston, SC 33,750,660 279,000 279,000 552,000 492,856 1,309,856 Charlotte, NC 338,951,778 0 592,988 1,411,110 0 1,104,159 Columbia, SC 77,132,980 141,300 141,300 143,000 120,000 195,000 Dallas-Ft. Worth, TX 758,975,005 2,696,626 3,262,336 13,204,112 12,264,103 14,433,289 Ft. Lauderdale-Broward, FL 111,076,486 359,600 359,600 1,025,487 992,311 992,311 Greenville/Spartanburg, SC 185,581,727 200,000 200,000 1,410,200 1,145,000 4,945,000 Houston, TX 511,386,927 2,150,096 2,925,791 9,279,790 4,221,347 9,583,467 Huntsville, AL 54,828,183 0 0 0 62,366 62,366 Jacksonville, FL 123,556,210 0 424,527 727,106 237,319 962,230 Little Rock, AR* 45,275,910 0 0 0 0 0 Louisville, KY 184,698,243 0 50,541 2,058,577 0 1,682,966 Memphis, TN 230,429,323 0 76,667 2,708,932 1,977,356 2,385,553 Miami, FL 212,110,755 282,365 282,365 1,369,456 599,946 599,946 Nashville, TN 188,646,228 0 0 0 595,000 2,361,453 Norfolk, VA 101,373,459 10,000 208,839 798,651 0 128,209 Orlando, FL 135,221,439 430,030 430,030 1,048,664 585,475 585,475 Raleigh, NC 112,128,967 0 63,800 161,880 0 1,027,073 Richmond, VA 113,307,657 0 0 402,550 0 279,800 Savannah, GA 46,245,075 305,375 665,375 932,775 1,340,125 3,070,125 Tampa Bay, FL 200,866,361 0 0 340,000 788,620 788,620 Palm Beach, FL 50,311,978 0 0 754,634 0 0 Total 4,621,450,088 9,972,455 14,759,222 48,501,053 34,322,518 63,028,307 * Q1-15 data displayed 6 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Inventory, New Supply, Under Construction EXISTING INVENTORY (SF) SEPT 30, 2015 SPECULATIVE NEW SUPPLY Q3 2015 (SF) TOTAL NEW SUPPLY Q3 2015 (SF) YTD NEW SUPPLY (continued) SPECULATIVE CURRENTLY UNDER CONSTRUCTION (SF) TOTAL CURRENTLY UNDER CONSTRUCTION (SF) MIDWEST Chicago, IL 1,331,849,262 220,799 3,073,280 11,037,561 7,568,232 12,562,722 Cincinnati, OH 248,679,356 787,361 787,361 2,124,811 3,618,091 5,330,500 Cleveland, OH 393,563,724 207,360 511,248 511,248 241,188 1,637,066 Columbus, OH 224,403,729 226,800 1,801,800 4,482,488 2,280,740 3,013,940 Dayton, OH 104,774,507 0 54,000 3,568,000 0 575,000 Detroit, MI 528,419,254 0 86,000 1,656,247 0 2,298,183 Grand Rapids, MI 114,234,075 0 194,120 534,841 75,000 346,000 Indianapolis, IN 289,046,518 248,400 274,650 10,356,612 1,245,019 3,686,857 Kansas City, MO-KS 239,933,279 759,879 759,879 3,735,825 5,448,638 6,028,008 Milwaukee, WI 224,780,624 0 84,000 1,026,263 891,331 1,917,131 Minneapolis/St. Paul, MN 243,110,100 168,000 168,000 2,609,630 567,598 1,862,598 Omaha, NE 68,349,607 0 83,668 83,668 295,341 404,031 St. Louis, MO 271,388,907 0 12,802 1,151,939 0 3,986,376 Total 4,282,532,942 2,618,599 7,890,808 42,879,133 22,231,178 43,648,412 WEST Albuquerque, NM 37,386,940 0 183,026 183,026 0 0 Bakersfield, CA 37,292,784 90,300 0 3,185,900 137,000 519,580 Boise, ID 46,373,012 0 0 183,305 0 12,000 Denver, CO 220,774,289 347,840 546,630 1,357,727 1,157,058 1,467,786 Fairfield, CA 48,786,186 226,044 823,860 1,438,820 838,350 838,350 Fresno, CA 67,774,220 0 0 0 553,000 553,000 Honolulu, HI 39,714,250 0 0 0 0 0 Las Vegas, NV 120,132,720 0 952,290 1,740,993 1,397,817 1,689,817 Los Angeles - Inland Empire, CA 457,616,600 2,827,400 4,706,400 17,783,300 15,750,100 19,079,100 Los Angeles, CA 893,336,900 1,073,700 1,073,700 3,441,300 2,851,400 2,851,400 Oakland, CA 143,409,822 175,913 175,913 846,002 1,243,750 1,243,750 Orange County, CA 180,793,000 94,600 94,600 407,640 1,060,200 1,060,200 Phoenix, AZ 287,618,249 872,151 972,151 4,354,388 1,187,354 2,480,155 Pleasanton/Tri-Valley, CA 17,391,991 0 0 0 1,298,207 1,298,207 Portland, OR 195,339,614 0 1,207,887 2,926,867 0 3,172,720 Reno, NV 87,447,080 0 1,396,960 3,244,620 0 6,024,000 Sacramento, CA 163,148,384 0 220,000 491,147 943,738 943,738 San Diego, CA 187,520,936 46,035 46,035 157,093 672,371 1,366,008 San Francisco Peninsula, CA 39,466,561 0 0 0 0 0 San Jose - Silicon Valley, CA 252,324,418 0 173,296 864,514 623,920 1,574,237 Seattle/Puget Sound, WA 264,322,809 509,602 2,509,602 3,618,701 2,100,000 2,100,000 Stockton/San Joaquin County, CA 97,772,885 0 0 257,000 1,747,018 3,599,011 Walnut Creek, CA 17,704,548 55,260 55,260 55,260 0 0 Total 3,903,448,198 6,318,845 15,137,610 46,537,603 33,561,283 51,873,059 TOTALS 15,079,569,660 21,560,714 41,299,245 151,459,154 102,525,769 181,272,478 7 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Absorption, Vacancy ABSORPTION Q3 2015 (SF) YTD ABSORPTION VACANCY RATE JUNE 30, 2015 VACANCY RATE SEPT 30, 2015 QUARTERLY CHANGE IN VACANCY NORTHEAST Baltimore, MD 339,561 1,198,919 9.5% 9.4% -0.1% Boston, MA 1,044,333-183,506 18.6% 18.0% -0.6% Hartford, CT 154,262 745,456 7.7% 7.6% -0.2% Long Island, NY 761,430 928,099 4.7% 4.2% -0.5% New Hampshire -818,978-458,126 8.0% 8.5% 0.5% New Jersey - Central 1,813,343 5,072,181 6.9% 6.7% -0.1% New Jersey - Northern 841,735 3,863,419 7.2% 7.1% -0.1% Philadelphia, PA 2,099,256 6,157,397 8.7% 8.3% -0.4% Pittsburgh, PA -12,002 629,408 6.9% 7.0% 0.0% Washington, DC 1,207,570 3,673,146 9.1% 8.9% -0.2% Total 7,430,510 21,626,393 8.6% 8.4% -0.2% SOUTH Atlanta, GA 2,971,649 10,443,721 8.4% 8.6% 0.2% Austin, TX 711,265 1,778,733 7.4% 6.9% -0.5% Birmingham, AL 62,093 485,665 9.8% 9.8% -0.1% Charleston, SC 184,626 1,024,282 7.2% 7.5% 0.2% Charlotte, NC 925,159 3,350,753 9.1% 9.0% -0.1% Columbia, SC 955,893 1,827,162 9.4% 8.3% -1.1% Dallas-Ft. Worth, TX 713,643 13,025,108 7.2% 7.5% 0.3% Ft. Lauderdale-Broward, FL 325,264 784,481 7.3% 7.1% -0.2% Greenville/Spartanburg, SC 1,028,415 1,256,945 8.0% 7.6% -0.5% Houston, TX 1,583,471 8,662,818 4.6% 4.8% 0.2% Huntsville, AL 461,407 368,589 8.2% 7.3% -0.8% Jacksonville, FL 491,109 822,934 7.8% 7.7% -0.1% Little Rock, AR* 393,161 393,161 11.8% 10.8% -0.9% Louisville, KY 465,885 2,054,326 5.9% 5.7% -0.2% Memphis, TN 2,559,157 5,810,135 11.8% 10.7% -1.1% Miami, FL 522,657 2,653,774 5.0% 4.8% -0.1% Nashville, TN 624,113 2,357,354 6.5% 6.2% -0.3% Norfolk, VA 641,778 1,863,261 7.2% 6.8% -0.5% Orlando, FL 595,369 1,956,119 7.6% 7.6% 0.0% Raleigh, NC 201,707 1,265,183 7.6% 7.5% -0.1% Richmond, VA 110,772 740,510 8.1% 8.0% -0.1% Savannah, GA 1,322,679 2,363,638 3.7% 2.3% -1.5% Tampa Bay, FL 564,050 1,977,687 8.0% 7.8% -0.3% Palm Beach, FL 325,161 877,460 5.7% 5.2% -0.5% Total 18,740,483 68,143,799 7.5% 7.4% -0.1% * Q1-15 data displayed 8 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Absorption, Vacancy (continued) ABSORPTION Q3 2015 (SF) YTD ABSORPTION VACANCY RATE JUNE 30, 2015 VACANCY RATE SEPT 30, 2015 QUARTERLY CHANGE IN VACANCY MIDWEST Chicago, IL 1,232,046 10,551,626 7.2% 7.3% 0.0% Cincinnati, OH 1,086,384 3,411,264 4.9% 4.8% -0.1% Cleveland, OH 977,880 1,136,127 5.7% 5.6% -0.1% Columbus, OH 831,301 2,552,013 5.7% 6.1% 0.4% Dayton, OH 608,445 3,612,624 9.1% 8.6% -0.5% Detroit, MI 2,298,183 6,305,556 6.4% 6.0% -0.4% Grand Rapids, MI 110,038 434,827 6.0% 6.0% 0.0% Indianapolis, IN 591,835 3,727,031 7.0% 6.9% -0.1% Kansas City, MO-KS 1,160,537 2,565,702 6.7% 6.6% -0.2% Milwaukee, WI 378,674 2,590,499 5.0% 5.1% 0.1% Minneapolis/St. Paul, MN 1,893,887 3,963,366 7.0% 6.4% -0.7% Omaha, NE 38,928 506,259 2.6% 2.7% 0.0% St. Louis, MO 326,050 1,749,034 6.9% 6.8% -0.1% Total 11,534,188 43,105,928 6.5% 6.4% -0.1% WEST Albuquerque, NM 313,407 234,952 7.1% 6.7% -0.4% Bakersfield, CA 154,597 2,079,604 4.8% 4.7% -0.1% Boise, ID 551,053 768,837 4.4% 3.2% -1.2% Denver, CO 413,536 2,292,860 3.8% 3.7% 0.0% Fairfield, CA 1,148,161 1,587,206 5.8% 5.0% -0.8% Fresno, CA 135,548 430,523 5.2% 5.0% -0.2% Honolulu, HI -54,949-24,668 2.0% 2.2% 0.1% Las Vegas, NV 1,710,955 4,343,696 6.9% 6.2% -0.7% Los Angeles - Inland Empire, CA 4,191,800 16,377,200 4.3% 4.2% -0.1% Los Angeles, CA 1,378,300 7,971,800 1.8% 1.6% -0.1% Oakland, CA 952,602 2,069,335 3.6% 3.0% -0.5% Orange County, CA 546,600 1,281,600 2.9% 2.6% -0.3% Phoenix, AZ 1,379,583 3,545,964 12.2% 11.9% -0.2% Pleasanton/Tri-Valley, CA 125,209 65,314 6.1% 5.4% -0.7% Portland, OR 1,137,124 3,161,103 5.4% 5.4% 0.0% Reno, NV 1,503,439 2,070,776 9.2% 8.9% -0.3% Sacramento, CA 615,850 1,861,273 10.6% 10.4% -0.3% San Diego, CA 444,786 3,105,991 5.4% 5.2% -0.2% San Francisco Peninsula, CA 62,744 94,782 2.6% 3.1% 0.4% San Jose - Silicon Valley, CA 701,127 4,141,238 5.8% 5.4% -0.4% Seattle/Puget Sound, WA 2,889,336 5,810,015 3.9% 3.7% -0.2% Stockton/San Joaquin County, CA 985,699 1,067,317 8.4% 7.4% -1.0% Walnut Creek, CA 92,077-55,523 8.9% 8.0% -0.9% Total 21,378,584 64,281,195 5.0% 4.7% -0.2% TOTALS 59,083,765 197,157,315 6.7% 6.6% -0.2% 9 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey 3-Month Forecasts, Sales Price, Cap Rates VACANCY FORECAST (3 MONTHS)** RENT FORECAST (3 MONTHS)** ABSORPTION FORECAST (3 MONTHS)** SALES PRICE (USD/SF) CAP RATE NORTHEAST Baltimore, MD Down Up Positive $63.00 6.0% Boston, MA Down Same Positive $82.14 6.8% Hartford, CT Down Up Positive $38.00 9.0% Long Island, NY Down Up Positive $90.00 8.3% New Hampshire Down Same Positive N/A N/A New Jersey - Central Down Up Positive N/A N/A New Jersey - Northern Down Up Positive N/A N/A Philadelphia, PA Down Up Positive $74.17 6.8% Pittsburgh, PA Down Up Positive $55.00 7.8% Washington, DC Down Same Positive $130.00 6.4% Average*** $76.04 7.3% SOUTH Atlanta, GA Same Up Positive $50.65 7.7% Austin, TX Down Up Positive $82.00 N/A Birmingham, AL Same Same Close to zero $51.00 7.5% Charleston, SC Down Up Positive $70.00 N/A Charlotte, NC Down N/A Positive N/A N/A Columbia, SC Up Up Negative N/A N/A Dallas-Ft. Worth, TX Same Same Positive $48.00 7.3% Ft. Lauderdale-Broward, FL Down Up Positive $98.25 6.0% Greenville/Spartanburg, SC Down Up Positive N/A N/A Houston, TX Same Same Positive $81.00 8.2% Huntsville, AL Down Same Positive N/A N/A Jacksonville, FL Down Same Positive $47.00 8.5% Little Rock, AR* Same Same Close to zero $65.45 9.0% Louisville, KY Down N/A Positive N/A N/A Memphis, TN Down Up Positive N/A N/A Miami, FL Down Up Positive $82.56 5.8% Nashville, TN Down Up Positive $57.00 6.0% Norfolk, VA Down Up Positive N/A N/A Orlando, FL Down Up Positive $68.00 6.5% Raleigh, NC Down N/A Positive N/A N/A Richmond, VA Same Up Positive N/A N/A Savannah, GA Down Up Positive $38.00 8.0% Tampa Bay, FL Down Up Positive $50.00 7.0% Palm Beach, FL Down Up Positive $88.97 N/A Average*** $65.19 7.3% * Q1-15 data displayed ** Forecasts for Warehouse space *** Straight averages used 10 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey 3-Month Forecasts, Sales Price, Cap Rates (continued) VACANCY FORECAST (3 MONTHS)** RENT FORECAST (3 MONTHS)** ABSORPTION FORECAST (3 MONTHS)** SALES PRICE (USD/SF) CAP RATE MIDWEST Chicago, IL Down Same Positive $64.00 5.5% Cincinnati, OH Up Up Positive $44.00 8.5% Cleveland, OH Down Up Positive $48.00 N/A Columbus, OH Down Up Positive N/A N/A Dayton, OH Same Same Close to zero $30.00 N/A Detroit, MI Down Same Positive $26.00 8.3% Grand Rapids, MI Same Same Close to zero N/A N/A Indianapolis, IN Down Same Positive $50.00 6.9% Kansas City, MO-KS Same Same Positive N/A N/A Milwaukee, WI Same Same Positive $55.00 8.0% Minneapolis/St. Paul, MN Same Same Positive $57.00 7.5% Omaha, NE Down Up Positive N/A N/A St. Louis, MO Up N/A Close to zero N/A N/A Average*** $46.75 7.5% WEST Albuquerque, NM Same Same Close to zero $83.50 7.7% Bakersfield, CA Same Same Close to zero $42.00 10.0% Boise, ID Down Up Positive N/A N/A Denver, CO Same Up Positive $77.00 7.3% Fairfield, CA Down Up Positive $68.26 6.5% Fresno, CA Down Up Positive $40.00 9.5% Honolulu, HI Down Up Positive N/A N/A Las Vegas, NV Down Up Positive $79.29 5.2% Los Angeles - Inland Empire, CA Same Up Positive $83.00 6.0% Los Angeles, CA Same Up Close to zero $101.00 6.0% Oakland, CA Down Up Positive $145.00 5.0% Orange County, CA Same Same Close to zero $119.00 6.0% Phoenix, AZ Down Up Positive $65.00 7.8% Pleasanton/Tri-Valley, CA Up Up Positive $125.00 5.5% Portland, OR Same Up Positive $97.45 6.5% Reno, NV Down N/A Positive N/A N/A Sacramento, CA Down Up Positive $80.70 7.1% San Diego, CA Down Up Positive $112.88 5.8% San Francisco Peninsula, CA Same Same Positive $294.00 5.0% San Jose - Silicon Valley, CA Same Up Positive $205.00 6.7% Seattle/Puget Sound, WA Down Up Positive $126.00 6.6% Stockton/San Joaquin County, CA Same Up Positive N/A N/A Walnut Creek, CA Same Up Positive N/A N/A Average*** $108.00 6.7% AVERAGES*** $79.76 7.1% ** Forecasts for Warehouse space *** Straight averages used 11 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Average Asking NNN Rents as of September 2015 WAREHOUSE / DISTRIBUTION SPACE BULK SPACE FLEX / SERVICE SPACE TECH / R&D SPACE NORTHEAST Baltimore, MD $4.58 $4.58 $9.75 N/A Boston, MA $6.73 $6.28 $7.56 $16.84 Hartford, CT $3.93 $5.88 $7.96 $6.50 Long Island, NY $10.02 $10.02 $16.84 N/A New Hampshire $5.63 $6.54 $8.03 New Jersey - Central $5.09 $4.53 $11.73 N/A New Jersey - Northern $6.20 $5.84 $9.85 N/A Philadelphia, PA $4.50 $4.35 $7.50 $11.25 Pittsburgh, PA $4.74 $4.74 $12.19 $12.19 Washington, DC $7.22 $6.30 $12.35 $14.70 Average** $5.86 $5.84 $10.23 $11.59 SOUTH Atlanta, GA $3.53 $3.26 $8.24 $11.34 Austin, TX $6.81 $5.16 $11.43 $10.02 Birmingham, AL $4.10 $3.50 $7.45 N/A Charleston, SC $4.33 $4.88 $8.92 N/A Charlotte, NC $3.80 $3.81 $8.15 N/A Columbia, SC $3.15 $3.35 $8.01 N/A Dallas-Ft. Worth, TX $3.50 $2.95 $7.55 $9.00 Ft. Lauderdale-Broward, FL $7.12 $6.68 $11.46 $9.57 Greenville/Spartanburg, SC $3.27 $3.60 $7.84 N/A Houston, TX $6.37 $4.56 $12.61 $12.76 Huntsville, AL $5.30 $5.15 $6.55 N/A Jacksonville, FL $3.82 $3.83 $9.00 N/A Little Rock, AR* $3.71 $3.12 $6.41 N/A Louisville, KY $3.70 $3.69 $6.70 N/A Memphis, TN $2.64 $2.74 $5.29 $9.75 Miami, FL $7.85 $7.33 $13.51 N/A Nashville, TN $3.80 $3.30 $7.89 $8.42 Norfolk, VA $4.68 $4.24 $8.00 $10.35 Orlando, FL $5.12 $4.76 $9.45 $9.59 Raleigh, NC $4.35 $4.79 $11.16 N/A Richmond, VA $3.94 $4.10 $8.30 $4.83 Savannah, GA $3.95 $3.75 $7.00 $10.00 Tampa Bay, FL $4.63 $4.26 $8.74 $6.24 Palm Beach, FL $7.55 $6.93 $12.46 N/A Average** $4.63 $4.32 $8.84 $9.32 * Q1-15 data displayed ** Straight averages used 12 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

United States Industrial Survey Average Asking NNN Rents as of September 2015 (continued) WAREHOUSE / DISTRIBUTION SPACE BULK SPACE FLEX / SERVICE SPACE TECH / R&D SPACE MIDWEST Chicago, IL $4.66 $4.30 $9.50 N/A Cincinnati, OH $3.24 $3.31 $6.55 $6.55 Cleveland, OH $3.51 $3.51 $6.73 $6.73 Columbus, OH $2.83 $2.83 $5.91 $5.91 Dayton, OH $2.50 $2.63 $4.42 $4.42 Detroit, MI $4.44 $3.78 $7.81 $7.99 Grand Rapids, MI $2.85 $2.85 $4.67 $4.67 Indianapolis, IN $3.05 $3.30 $4.10 $9.00 Kansas City, MO-KS $4.43 $3.97 $8.20 $7.51 Milwaukee, WI $3.92 $3.54 $5.29 N/A Minneapolis/St. Paul, MN $5.16 $5.16 $7.56 $7.70 Omaha, NE $4.13 $3.90 $6.92 $5.36 St. Louis, MO $4.02 $3.93 $8.62 N/A Average** $3.75 $3.62 $6.64 $6.58 WEST Albuquerque, NM $5.27 $4.29 $9.49 $9.49 Bakersfield, CA $4.00 $3.40 $8.40 N/A Boise, ID $5.40 $5.40 $6.60 $5.40 Denver, CO $6.47 $4.69 $10.22 $10.68 Fairfield, CA $5.16 $6.05 $6.96 $8.38 Fresno, CA $4.42 $3.60 $8.37 $8.37 Honolulu, HI $13.92 N/A N/A N/A Las Vegas, NV $6.12 $6.05 $7.32 $9.60 Los Angeles - Inland Empire, CA $5.50 $4.95 $7.20 $7.85 Los Angeles, CA $7.28 $5.90 $9.45 $12.55 Oakland, CA $6.72 $6.60 $6.95 $12.48 Orange County, CA $8.40 $7.79 $14.79 $11.55 Phoenix, AZ $5.94 $4.58 $12.03 $11.82 Pleasanton/Tri-Valley, CA $5.76 $5.52 N/A N/A Portland, OR $5.51 $4.66 $11.20 $9.70 Reno, NV $4.07 $3.71 $7.65 N/A Sacramento, CA $4.92 $3.60 $8.28 $4.56 San Diego, CA $8.64 $7.56 $12.36 $18.60 San Francisco Peninsula, CA $11.16 $12.70 $34.32 $34.32 San Jose - Silicon Valley, CA $8.28 $6.45 $10.92 $20.76 Seattle/Puget Sound, WA $6.12 $6.12 $12.48 $15.18 Stockton/San Joaquin County, CA $4.44 $4.56 $7.44 $7.44 Walnut Creek, CA $5.11 N/A $9.51 $13.03 Average** $6.46 $5.63 $10.57 $12.20 AVERAGES** $5.24 $4.80 $9.16 $10.19 ** Straight averages used 13 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

Vacancy Rankings VACANCY RATE SEPT 30, 2015 Los Angeles, CA 1.6% Honolulu, HI 2.2% Savannah, GA 2.3% Orange County, CA 2.6% Omaha, NE 2.7% Oakland, CA 3.0% San Francisco Peninsula, CA 3.1% Boise, ID 3.2% Seattle/Puget Sound, WA 3.7% Denver, CO 3.7% Los Angeles - Inland Empire, CA 4.2% Long Island, NY 4.2% Bakersfield, CA 4.7% Cincinnati, OH 4.8% Houston, TX 4.8% Miami, FL 4.8% Fresno, CA 5.0% Fairfield, CA 5.0% Milwaukee, WI 5.1% San Diego, CA 5.2% Palm Beach, FL 5.2% Pleasanton/Tri-Valley, CA 5.4% San Jose - Silicon Valley, CA 5.4% Portland, OR 5.4% VACANCY RATE SEPT 30, 2015 Cleveland, OH 5.6% Louisville, KY 5.7% Grand Rapids, MI 6.0% Detroit, MI 6.0% Columbus, OH 6.1% Nashville, TN 6.2% Las Vegas, NV 6.2% Minneapolis/St. Paul, MN 6.4% Kansas City, MO-KS 6.6% AVERAGE 6.6% Albuquerque, NM 6.7% New Jersey - Central 6.7% Norfolk, VA 6.8% St. Louis, MO 6.8% Indianapolis, IN 6.9% Austin, TX 6.9% Pittsburgh, PA 7.0% New Jersey - Northern 7.1% Ft. Lauderdale-Broward, FL 7.1% Chicago, IL 7.3% Huntsville, AL 7.3% Stockton/San Joaquin County, CA 7.4% Charleston, SC 7.5% Raleigh, NC 7.5% VACANCY RATE SEPT 30, 2015 Dallas-Ft. Worth, TX 7.5% Greenville/Spartanburg, SC 7.6% Hartford, CT 7.6% Orlando, FL 7.6% Jacksonville, FL 7.7% Tampa Bay, FL 7.8% Walnut Creek, CA 8.0% Richmond, VA 8.0% Philadelphia, PA 8.3% Columbia, SC 8.3% New Hampshire 8.5% Dayton, OH 8.6% Atlanta, GA 8.6% Reno, NV 8.9% Washington DC 8.9% Charlotte, NC 9.0% Baltimore, MD 9.4% Birmingham, AL 9.8% Sacramento, CA 10.4% Memphis, TN 10.7% Little Rock, AR* 10.8% Phoenix, AZ 11.9% Boston, MA 18.0% * Q1-15 data displayed 14 United States Research Report Q3 2015 Industrial Market Outlook Colliers International

INDUSTRIAL SERVICES contact Dwight Hotchkiss President, Brokerage Services USA National Director, Industrial USA +1 213 532 3229 dwight.hotchkiss@colliers.com FOR MORE INFORMATION Pete Culliney Director of Research Global +1 212 716 3689 pete.culliney@colliers.com CONTRIBUTORS Jeff Simonson Senior Research Analyst USA AJ Paniagua Research Analyst USA Andrew Nelson Chief Economist USA Glossary Bulk Space Warehouse space 100,000 square feet or more with minimum ceiling heights of 24 feet. All loading is dock-height. Flex Space Single-story buildings having 10 to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service, to distribution, light industrial and occasional heavy industrial use. Tech/R&D One and two-story, 10 to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading. Warehouse 50,000 square feet or more with up to 15 percent office space, the balance being general warehouse space with 18 to 30-foot ceiling heights. All loading is dock-height. Service Space Single-story (or mezzanine) with 10 to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade-level roll-up doors on the other. Less than 15 percent office space. Copyright 2015 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 666 Fifth Avenue New York, NY 10103 +1 212 716 3500 colliers.com