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Chicago Industrial Submarket Narratives 2Q 2016

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Submarket

Overall Chicago Market

Lake County

North Cook County

Northwest Cook County

O’Hare

West Cook County

North Chicago

South Chicago

South Suburbs

I-57 Corridor 22

I-80 Corridor 24

I-55 Corridor 26

I-88 Corridor 28

North Du0

Fox Valley 32

North Kane County 34

McHenry County 36

Rockford 38

I-39 Corridor 40

Northwest Indiana 42

Southeast Wisconsin 44

Market Statistics 46

Construction Dashboard 49

Chicago | Market News

Table of Contents

Second Quarter 2016

KEY MARKET INDICATORS

Supply

Total inventory (s.f.) 1,128,018,593

Total vacancy (%) 6.9%

Total availability (%) 8.5%

Dem

and

Total net absorption (s.f.) 3,438,460

YTD net absorption (s.f.) 7,306,631

Pricing

Average rental rate (nnn) $4.78

12-month dollar change $0.01

AVERAGE RENTAL RATE

NET NEW SUPPLY, NET ABSORPTION, VACANCY

Second Quarter 2016

RECENT LEASE COMPARABLES (sorted by square feet)

Tenant Type Location City Size (s.f.)

Sears Renewal 1701 S Normantown Rd Romeoville 818,848

e-Commerce Co. New lease 1125 Remington Blvd Romeoville 767,171

E-Commerce Co. New lease 201 Emerald Rd Joliet 746,772

Food Co. New lease 29700 S Graaskamp Blvd Wilmington 720,000

Arrows represent change from prior quarter

RECENT SALES COMPARABLES (sorted by square feet)

Buyer Seller Location City Size (s.f.) Date Price / s.f.

Edward Village, LLC Optima International LLC 2001 N Division Street Harvard 1,527,857 5/2016 $6.09

Westmount Realty

Capital LLCPrologis 19-Building Portfolio Chicago Metro 1,481,158 4/2016 $48.96

Hillwood CBRE Global Investors 3-Building Portfolio Tinley Park Tinley Park 1,231,950 4/2016 $51.26

Exeter Property Group CenterPoint Properties 9800 72nd Avenue Pleasant Prairie 891,567 6/2016 $52.83

Overview of AbsorptionUser demand continues to drive positive results for Chicago’s overall net absorption volume.

This quarter level totaled 3.4 million square feet however it has lost some momentum

compared to last quarter which totaled 3.9 million square feet. The decline was more

pronounced compared to the year-over-year 2015 volume of 9.6 million square feet. I-80

Corridor generated the highest absorption volume of all 20 Chicago Area submarkets, posting

over 2.7 million square feet. The next highest submarket was I-88 which measured 1.3 million

square feet. Disappointingly, eleven markets registered negative results, with West Cook

reporting the weakest outcome at negative 976,735 square feet. This figure was greatly

impacted by the demolition of a 522,600-square-foot facility formerly occupied by Castle

Metals. Panattoni Development is replacing the obsolete structure with a 491,100 square-foot

speculative project.

Overview of DemandChicago Metro second quarter vacancy rate measured 6.93 percent, unchanged from the first

quarter. Consistent occupier demand neutralized space re-entering the market. The South

Suburbs boasts the largest decline in its vacancy rate from last quarter dropping a stunning

112 basis points to 6.69 percent. Unfortunately this was just one of eight (less than half of the

20 markets) to experience a decline in their vacancy rates from the previous quarter. The I-55

Corridor experienced the greatest occupier demand during the quarter recording 3.3 million

square feet of lease transactions, the result of heightened big box tenant demand.

Impressively, this represents almost 30 percent of the 11.4 million square feet of new deals

signed this quarter. Conversely the I-39 Corridor submarket witnessed no new leases signed

during the quarter.

Overview of RentsOverall weighted average asking rents were virtually unchanged from the first quarter rate of

$4.79 per square foot net to the second quarter mark of $4.78 per square foot net. Asking

rents will be stay the course due to a significant amount of new speculative development

underway.

$4.79

$3.60

$3.80

$4.00

$4.20

$4.40

$4.60

$4.80

$5.00

2009 2010 2011 2012 2013 2014 2015 2Q16

5%

7%

9%

11%

13%

15%

17%

19%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2010 2011 2012 2013 2014 2015 2Q16

s.f. Net new supply Net absorption Total vacancy


4


MARKET MAPSUBMARKET

CHARACTERISTICS

©2016 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

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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 be placed on the

information contained in this document.

MARKET STATISTICS

Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse & Distribution 592,921,717 7.6% 9.6% 2,560,676 5,055,895 $4.88 17,067,508 6,320,580

Manufacturing 532,806,219 6.2% 7.4% 809,214 2,182,166 $4.55 1,213,908 1,472,105

General 2,290,657 7.3% 7.3% 68,570 68,570 $0.00 20,000 40,165

Totals 1,128,018,593 6.9% 8.5% 3,438,460 7,306,631 $4.78 18,301,416 7,832,850

Robust capital markets provide

liquidity for institutional investors

1Inland port;

The convergence of six Class I

railroads and heavy and advanced

manufacturing make it a premier

U.S. market2Chicago is an industrial gateway city

with global connectivity

3Population: 9.7M:

Significant local consumption base

4

5


Supply

Total inventory (s.f.) 67,273,893



Dem

and

Total net absorption (s.f.) 75,543

YTD net absorption (s.f.) 205,284

Pricing


12-month dollar change -$0.09

AVERAGE RENTAL RATE


Lake County | Submarket NewsSecond Quarter 2016



Handi-Foil Corporation New lease 5650 Centerpoint Court Gurnee 213,141

Focus Foodservice, LLC New lease 451 Trumpet Drive Zion 150,192

Vapor Bus International Renewal 1010 Johnson Drive Buffalo Grove 131,039

Laser Precision Sale/Leasback 2400 Commerce Drive Libertyville 128,539




Westmount Realty Capital Prologis 1947-1953 & 2001-2005 Delany Road Gurnee 526,425 4/2016 $28.59

Founders Properties Serra Laser Holdings, LLC 2400 Commerce Drive Libertyville 129,039 5/2016 $79.24

Ridgeline Property Group ASAP Software Express, Inc. 850 Asbury Drive Buffalo Grove 58,708 4/2016 $78.35

Larsen Mfg, LLC Christiana Properties LLC 930 Turret Court Mundelein 46,096 6/2016 $35.25

LEASE ACTIVITYSecond quarter leasing volume escalated to 937,589 square feet, eclipsing the 507,604

square feet leased in the prior quarter. Heightened second quarter activity was driven by four

leases signed in spaces over 100,000 square feet; the largest by Handi-Foil Corporation

which leased from CenterPoint Properties a 213,141-square-foot manufacturing facility at

5650 Centerpoint Ct., Gurnee. The manufacturer of aluminum pans is expanding and

relocating from Wheeling. The three other deals, where procured by local tenants expanding

within the market: Focus Foods, 150,192 square feet at 451 Trumpet Dr, Zion, Trifinity

Partners 120,249 square feet at 2431 Delany Rd, Waukegan & BMC 119,546 square feet at

3540-3630 Amhurst Pky, Waukegan.

RENTSRent trended down $0.10 from the first quarter mark of $5.62 per square foot net to $5.52 per

square foot net. The tremendous amount of leasing activity during the quarter could place

upward pressure on rents going forward.

SALES AND CONSTRUCTIONA large portfolio traded hands this quarter which included two buildings in Lake County.

Westmount Realty Capital LLC acquired from Prologis 1947-1953 & 2001-2005 N Delaney

Rd, Gurnee totaling 526,425 square feet. The 19 package portfolio totaled 1.5 million square

feet, sold for $48.96 per square foot with a stabilized cap rate of 7.8 percent. Additionally,

Ridgeline Property Group purchased 850 Asbury Drive, Buffalo Grove, totaling 58,708 square

feet from ASAP Software Express, Inc. They intend to tear down the facility and replace it with

a 157,500 square-foot speculative project. Bridge Development has started its second

speculative project at BridgePoint North in Waukegan. The development will encompass

400,758 square feet and is slated for completion by the end of the year.

ECONOMIC OUTLOOKWith Lake County vacancies hovering at just under 10 percent, developers may decide to

pull back on future spec projects in the near term. However in Southern Lake County, an

injection of new product should be well received by users.

5%

7%

9%

11%

13%

15%

17%

19%

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2010 2011 2012 2013 2014 2015 2Q16


$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

$5.52

6

Lake County | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS





SUBMARKET STATISTICS

Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse /

Distribution35,945,949 13.0% 14.6% -39,855 250,519 $5.49 400,758 716,848

Manufacturing 31,234,667 6.2% 7.2% 75,233 -85,400 $5.63 20,000 0

General 93,277 0.0% 0.0% 40,165 40,165 $0.00 420,758 40,165

Total Industrial 67,273,893 9.8% 11.2% 75,543 205,284 $5.52 420,758 757,013

Higher ratio of specialized

manufacturing.

1

Strong concentration of

healthcare, medical device and

life sciences companies.

2

Dated, less energy efficient and

design restrictive product.

3

Constrained developable land

supply.

4

7


Supply


Total direct vacancy (%) 5.8%


Dem

and

Total net absorption (s.f.) -135,658


Pricing



AVERAGE RENTAL RATE


North Cook | Submarket NewsSecond Quarter 2016



Dynomax New lease 230 W Palatine Road Wheeling 172,779

Johnson & Quinn Renewal 7460 N Lehigh Avenue Niles 105,000

Durable Packaging New lease 475 Allendale Drive Wheeling 80,473

FedEx Renewal 3747 Howard Street Skokie 60,000




Molto Properties MFRI, Inc. 7720 N Lehigh Avenue Niles 130,000 5/6/2016 $30.00

Westmount Realty Prologis 747-797 Glenn Avenue Wheeling 82,000 4/7/2016 $55.57

Georgia Nut Company Lakeshore Athletic Services 7515 Linder Avenue Skokie 78,101 5/10/2016 $34.57

Westmount Realty Prologis 11-55 E Hintz Road Wheeling 38,000 4/7/2016 $51.97

LEASE ACTIVITY The largest lease of the second quarter was Dynomax’s commitment to take 173,000 square

feet at 230 W Palatine Road in Wheeling. In Niles, CenterPoint Properties secured Johnson

& Quinn for a 105,000 square-foot renewal for four years at 7460 N Lehigh Ave. Durable

Packaging agreed to a 80,473 square-foot lease at 475 Allandale Drive in Wheeling for a two

year term. The company is also leasing 100,000 square feet at 311 W Gilman Avenue in

Wheeling on a short term basis.

RENTSAverage asking rents are currently at $5.59 per square-foot in the North Cook County

submarket. Leverage is firmly in the landlord’s favor as vacancy has stabilized below six

percent. This is up 50 basis points from year end but still in record low territory.

SALES AND CONSTRUCTIONAs part of a 19 building metro Chicago Class B portfolio sale, Westmount Realty Capital

picked up two Wheeling assets totaling 140,000 square feet from Prologis. 747-797 Glenn

Avenue is an 82,000 square-foot building which was allocated at $56 per square-foot and a

38,000 square-foot building at 11-55 E Hintz Road allocated at just under $52 per square-foot.

Two new spec projects are on the horizon in Niles and Wheeling which are the primary hubs

for industrial users in infill North Cook County. In Niles, MFRI sold an 130,000 square-foot

obsolete manufacturing facility at 7720 N Lehigh to Molto Properties for just under $11 per

land square foot in May. Molto will clear the 8.2-acre parcel and start construction on a

136,000-square-foot speculative building this year. Further north in Wheeling, Hamilton

Partners acquired a 13.9 acre site from Frito-Lay. The semi-improved land traded for $5.55

per square-foot and Hamilton has plans for a 135,000 square-foot spec which could be

divisible down to 50,000 square-foot suites.

ECONOMIC OUTLOOKRobust tenant demand is driving more developer interest in North Cook County market

however current land pricing is not in line with current rent striking pricing. Limited building

options could drive tenants into Lake County.

5%

7%

9%

11%

13%

15%

17%

19%

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2010 2011 2012 2013 2014 2015 2Q16


$5.59

$4.40

$4.60

$4.80

$5.00

$5.20

$5.40

$5.60

$5.80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

8

North Cook | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 15,492,706 7.1% 8.5% -43,309 88,289 $5.65 0 217,280

Manufacturing 32,750,865 5.2% 7.0% -92,349 91,181 $5.52 0 0

General 73,274 0.0% 0.0% 0 0 $0.00 0 0

Total industrial 48,316,845 5.8% 7.5% -135,658 179,470 $5.59 0 217,280

Higher ratio of flex and

manufacturing

1Limited modern distribution

product

2

Highly educated workforce

3Highly concentrated and

accessible labor pool

4

9


Supply


Total Vacancy (%) 9.6%

Total Availability (%) 10.3%

Dem

and



Pricing


12-month dollar change $-0.99

AVERAGE RENTAL RATE


Northwest Cook| Submarket News

Second Quarter 2016



Sam’s Beauty Supply New lease 1000 E Business Center Drive Mount Prospect 110,086

Fromm International Renewal 601-609 Dempster Street Mount Prospect 73,381

National Association of Board of Pharmacy Renewal 451 Kingston Court Mount Prospect 34,475

TruSweets, LLC New lease 3456 N Ridge Avenue Arlington Heights 25,057




Gramercy Private Single Investments 3200 Squibb Avenue Rolling Meadows 93,614 5/2016 $105.43

Crosstown Capital PartnersGemstone Real Estate

Partners900-950 E Business Center Drive Mount Prospect 43,282 5/2016 $47.36

Richards Building Supply

CompanyMethode Electronics, Inc. 4001 Industrial Avenue Rolling Meadows 43,000 4/2016 $43.02

BDJ Trucking Company Clearbrook 1425 Payne Road Schaumburg 25,600 4/2016 $48.83

LEASE ACTIVITYOne lease signed during the quarter assisted in pushing second quarter net absorption to

265,478 square feet, reversing first quarter’s undesirable result of negative 113,240 square

feet. Sam’s Beauty leased from Colony Realty Partners a 110,086-square-foot facility at

1000 E. Business Center Road, Mount Prospect. The balance of second quarter leasing

activity was between 10,000 and 35,000 square feet. Northwest Cook County also retained

one tenant as Fromm International renewed with Clarion Partners it’s 73,381-square-foot

distribution space at 601-609 Dempster Street, Mount Prospect.

RENTSThe shallow pool of vacant space compared to other markets coupled with the diversity of the

product mix in Northwest Cook County (from general industrial to highly built out industrial

space) tends to cause fluctuations in rents. This quarter the average asking rental rate was

$4.87 per square foot net compared to $6.14 per square foot net six months ago.

SALES AND CONSTRUCTIONOne investment sale of significance to report was the sale of a 43,282-square-foot

warehouse/distribution facility at 900-950 E. Business Center Road, Mount Prospect to

Crosstown Capital Partners. The seller, Gemstone Real Estate Partners sold it for

$2,050,000/$47.36 per square foot. The fully leased multi-tenant facility traded at an

estimated 8.5 percent cap. On the users side, two manufacturing building were sold, the

largest was a 43,000-square-foot facility at 4001 Industrial Avenue, Rolling Meadows. The

building sold to Richards Building Supply Company for $43.02 per square foot. Trumpf, Inc.

which purchased a 5-acre site at 1900 Central, Hoffman Estates from McShane, in the fall of

2015 is intending on building 50,000 square feet at 1900 Central Road, with delivery slated for

second quarter of 2017.

ECONOMIC OUTLOOKFirms are drawn to the Northwest Cook County market due it its large skilled labor pool and

transportation network. Users are also drawn to the area because its immediate access to

retail and restaurants which are a plus to retain employees - however the Northwest Cook

County carries the burden of higher taxes that persist in Chicago’s home county.

5%

7%

9%

11%

13%

15%

17%

19%

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$4.87

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

10

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 13,244,377 10.2% 11.5% 59,662 10,911 $5.02 0 423,672

Manufacturing 13,134,247 9.0% 9.2% 205,816 141,327 $4.72 0 0

General 80,592 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 26,459,216 9.6% 10.3% 265,478 152,238 $4.87 0 423,672

Higher ratio of Flex, R&D

industrial product when compared

to other Chicago suburban

industrial submarkets 1

Home to affluent communities

well suited to users seeking an

elevated corporate image.

2

Large white collar workforce

creates a magnet for high tech

manufactures.3

Attractive quality of life and vast

retail amenities benefit firms

focused on long-term employee

retention.4

Northwest Cook| Submarket News

11


Supply


Total direct vacancy (%) 5.9%

Total available (%) 8.4%

Dem

and



Pricing



AVERAGE RENTAL RATE


O’Hare | Submarket News

Second Quarter 2016



American Dawn New lease 1263-1269 N Wood Dale Road Wood Dale 140,229

Basic Enterprise New lease 2301 Greenleaf Avenue Elk Grove Village 63,080

Lakeview Appliance Renewal 1051-1071 Thorndale Avenue Bensenville 56,264

Vantec Hitachi Transportation New lease 2501-2575 Allan Drive Elk Grove Village 54,260




CR Express Alden Press 2300 Arthur Avenue Elk Grove Village 109,783 4/14/16 $44.18

Just Manufacturing

Company Niagara LaSalle Corp 9301 King Street Franklin Park 100,000 5/5/16 $16.25

United Business Mail High Street 1001 Foster Avenue Bensenville 79,670 6/2/16 $59.62

Jack Lewin Associates Hicks Properties

925-1065 Chase

Avenue Elk Grove Village 70,796 4/7/16 $45.55

LEASE ACTIVITYTenant demand was weaker this quarter as just 435,975 square feet was leased compared to

1,198,952 square feet leased in the first quarter. The largest lease transaction of the second

quarter was American Dawn’s new lease for 140,000 square feet with Hamilton Partners at

1263-1269 N Wood Dale Road, Elk Grove Village. Also in Elk Grove Village, Basic

Enterprises leased just over 63,000 square feet from ML Realty for 8 months at 2301

Greenleaf Avenue. Liberty Property Trust committed to a renewal with Lakeview Appliance

for 56,264 square feet at 1051 Thorndale Road in Bensenville for 2.5 years.

RENTSAsking rental rats currently stand at $5.76 at the midpoint of 2016. This rate is up $0.30 in the

last year but is down just five cents since first quarter.

SALES AND CONSTRUCTIONSeveral notable user sales occurred around the O’Hare market contributing to the 446,615

square feet sold in the O’Hare market in the second quarter. The largest trade was CR

Express’s purchase of a 110,000 square-foot building at 2300 Arthur Avenue in Elk Grove

Village for $44 per square foot. In Bensenville, High Street took advantage of favorable

market conditions to sell 1001 Foster Avenue to United Business Mail. The 80,000 square-

foot Class B building traded for $4.75 million or just under $60 per square-foot. Bridge

Development acquired two former Hostess bakery facilities at 9555-9655 W Soreng Avenue

in Schiller Park for redevelopment. The two sites traded for $9.85 per land foot and Bridge

has conceptual plans for two spec buildings in the 70,000 to 80,000 square-foot range.

ECONOMIC OUTLOOKThe Chicago Department of Aviation is moving forward with construction on the consolidated

rental car facility. This new site along Mannheim Road will eventually open up additional land

for potential hotel, office, or industrial development. In addition, the City will be starting the

RFP process to find a developer and operator to construct another airport hotel on a long

term ground lease.

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2010 2011 2012 2013 2014 2015 2Q16


$5.76

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

12

O’Hare | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 55,703,656 6.2% 9.1% -721,496 182,130 $5.93 440,000 0

Manufacturing 37,863,339 5.6% 7.2% 126,390 -111,515 $5.41 0 0

General 29,015 0.0% 0.0% 0 0 $0.00 0 0

Total industrial 93,596,010 5.9% 8.4% -595,106 70,615 $5.76 440,000 0

Higher ratio of heavy and

advanced manufacturing

1Fewer available bulk distribution

spaces

2

Elk Grove Village is home to the

largest industrial park in North

America

.3

Infill location provides one of

the deepest labor pools in the

region.4

13


Supply




Dem

and


YTD net absorption (s.f.) -923,666

Pricing


12-month change $0.39

AVERAGE RENTAL RATE


West Cook| Submarket News

Second Quarter 2016



GPA Substrates New lease 8701 W 47th Street McCook 156,214

Viking Materials New lease 11305 Franklin Avenue Franklin Park 88,600

Darwill New lease 8701 W 47th Street McCook 56,000




Heitman Dermody Properties 8601 & 8701 W 47th McCook 665,549 4/2016 $90.00

Graymills Corporation Pamado, Inc. 2601 S 25th Avenue Broadview 119,817 5/2016 $19.61

Just Manufacturing, Inc.

Diameters

Corporation 9301 King Street Franklin Park 100,000 6/2016 $17.75

U-Store-It Kreg Therapeutics 4501 W North Avenue Melrose Park 58,468 5/2016 $40.02

LEASE ACTIVITYTenant appetite for new product continues. This quarter GPA Substrates signed a lease with

Heitman for 156,2141 square feet speculative warehouse/distribution space at 8701 W 47th

Street, McCook. This drove second quarter leasing activity to 401,636 square feet. The GPA

lease though was not enough to secure better results from the previous quarter as second

quarter volume fell a little short, down 1.52 percent from first quarter volume of 407,838

square feet. Occupier demand continues to be strongest in distribution space.

RENTSRents continue to be influenced by new speculative construction. The current asking

weighted average asking rent was $5.20 per square foot net. This is significantly higher

than neighboring South Suburbs where asking rents $4.40 per square foot net.

SALES AND CONSTRUCTIONInvestment sale activity continues to thrive in West Cook County. This quarter Heitman

purchased from Dermody Properties a two building package in McCook totaling 665,549

square feet (partially leased) for $90.00 per square foot. User sales activity was also strong,

in fact second quarter sale volume of 325,711 square feet was slightly behind second quarter

leasing volume. Two significant sales boosted second quarter activity. Graymills Corporation

purchased 119,817 square feet at 2601 S 25th Avenue, Broadview and Just Manufacturing,

Inc. bought 100,000 square feet at 9301 King Street, Franklin Park. Speculative development

flourishes in West Cook County as two projects commenced construction in Franklin Park this

quarter: Panattoni began construction on 491,100 square feet at 3400 Wolf Road while

Pritzker broke ground on 194,300 square feet at 11333 Addison Avenue. This brings the

overall total number of speculative projects currently underway to six that will deliver 1.5

million square feet of available product to the market by June 2017.

ECONOMIC OUTLOOKThe scarcity of redevelopment opportunities in neighboring O’Hare market will continue to

draw developers to West Cook County.

0%

2%

4%

6%

8%

10%

12%

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2010 2011 2012 2013 2014 2015 2Q16


$5.20

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

14

West Cook | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse /

Distribution42,848,916 14.1% 15.9% -218,891 -285,567 $5.21 1,518,784 0

Manufacturing 50,017,590 6.1% 7.3% -757,844 -638,099 $5.13 0 0

General 24,600 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 92,891,106 9.8% 11.3% -976,735 -923,666 $5.20 1,518,784 0

Higher ratio of heavy

manufacturing

1

Due to land constraints, fewer

bulk distribution spaces than

other Chicago industrial

submarkets

.2

West Cook home to the BNSF

Corwith and Union Pacific Global

II intermodals and UPS Chicago

Area Consolidation Hub (CACH)

.3

Strong workforce and public

transit connections

.4

15


Supply




Dem

and



Pricing


12 month % change $0.37

AVERAGE RENTAL RATE


North Chicago | Submarket News

Second Quarter 2016



Power Home Remodeling Group New lease 2500 W Bradley Place Chicago 31,000

Cradles 2 Crayons New lease 4141 W George Street Chicago 21,897

Electronic Equipment Company Renewal 4040 N Rockwell Street Chicago 18,300

Chicago Car Care New lease 5480 N Elston Avenue Chicago 15,000




The Lock Up Merit Partners 4000 W Diversey Avenue Chicago 126,000 4/2016 $24.21

Advance Display

Company Accurate Metal Fabricating 1657 N Kostner Avenue Chicago 56,000 5/216 $31.25

MK Films Circle Industries 548 N Sacramento Boulevard Chicago 41,723 4/2016 $32.16

Private Buyer Undisclosed 5758 W Fillmore Street Chicago 41,723 5/2016 $44.58

LEASE ACTIVITYManufacturing users drove second quarter leasing activity capturing 84 percent of the

147,709 square feet leased. Second quarter volume was up 4.95 percent from the previous

quarter. Despite this, North Chicago’s vacancy rate rose 17 basis points from the prior quarter

to 6.16 percent. Two significant transactions to note were: Power Home Remodeling Group

leased 31,000 square feet at 2500 W. Bradley Place and Cradles 2 Crayons took possession

of 21,897 of manufacturing square feet at 4141 W George Street.

RENTSThe weighted average asking rents dropped $0.06 from the first quarter mark of $8.67 per

square-foot net to $8.61 per square foot net. Although rents slightly fell, they are still

significantly higher than the Chicago Metropolitan average of $4.78 per square foot net.

SALES AND CONSTRUCTIONThis quarter a 37,000-square-foot manufacturing facility at 4200 W. Wrightwood Avenue was

sold on an investment basis for $27.00 per square foot. The local entrepreneur owns several

industrial facilities in the North Chicago market. One user sale to note was procured by The

Lock Up which purchased from Merit Partners a 126,000-square-foot section at 4000 W.

Diversey Avenue. They will convert the vacant space into public storage units. Dayton Street

Partners commenced construction on a 40,700-square-foot speculative project at 4150 N

Knox Avenue. This development is projected to be delivered by year end.

ECONOMIC OUTLOOKBuyer interest has heated up for redevelopment opportunities in the North Chicago market.

This has put upward pressure on pricing which is driving some industrial users out of the

market.

5%

7%

9%

11%

13%

15%

17%

19%

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$8.61

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

16

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 18,701,998 6.3% 6.6% 356,296 -521,868 $10.71 40,700 0

Manufacturing 41,119,098 6.1% 6.9% 0 264,115 $7.43 0 0

General 25,000 0.0% 0.0% -96,922 0 $0.00 0 0

Total Industrial 59,846,096 6.2% 6.8% 12,904 -257,753 $8.61 40,700 0

Higher ratio of boutique, smaller

and mid-sized manufacturing

1

Conversion and redevelopment

pressure from area retailers and

high-end residential multi-family

and condo developers 2

Food users, building supplies,

and automotive suppliers are

prominent3Vast labor pool and public

transit amenities.

4

North Chicago | Submarket News

17


Supply




Dem

and



Pricing



AVERAGE RENTAL RATE


South Chicago | Submarket News

Second Quarter 2016



FedEx Ground Build-to-Suit 3000 S Damen Avenue Chicago 219,858

PECO Pallet New lease 2924 E 126th Street Chicago 194,880

MWD Logistics Expansion/renewal 1400-1580 E 97th Place Chicago 115,200

Chef’s Warehouse New lease 2801 S Western Avenue Chicago 108,397




Professional Meters Inc Urban Partnership Bank 7000 S South Chicago Avenue Chicago 40,000 9/16/15 $10.38

Pioneer Engineering &

Environmental ServicesReichhold Inc. 3101 S California Avenue Chicago 21,569 7/13/15 $23.18

Mzi Building Services, Nickelson Industrial Service 10115 S Torrence Avenue Chicago 16,500 8/7/15 $31.82

LEASE ACTIVITY13 notable new leases totaling 712,000 square feet have been signed to-date this year in the

South Chicago Submarket. As an infill market characterized by vintage industrial product, the

south side of the city attracts a niche set of industrial users involved in specialized

manufacturing or local distribution. The largest lease to transact this year was signed by a

regional beverage distributor for a 283,228 square-foot warehouse off South Halsted and

Pershing. The facility is owned by third party logistics provider LaGrou Distribution.

RENTSSouth Chicago rents experienced a $0.02 rise over the quarter carrying mid-year average

asking rents to $6.04 per square foot net. Although asking rents are moderately higher than

those typically seen in other infill markets the submarket poises a substantial discount in

comparison to industrial ask rates recorded in the northern Chicago neighborhoods.

SALES AND CONSTRUCTIONThere were four user sale transactions take place in both the first and second quarter,

however the first quarter volume of 517,033 square feet was more than three times greater

than the 164,578 square feet sold from April to June. Industrial development in 2016 has been

driven by build-to-suit projects with 260,000 square feet delivered to date and another

423,000 in the ground. A 219,815 square foot FedEx facility marks the largest delivery of the

year, the next largest project is a 227,043 square-foot cold storage building scheduled for a

2017 delivery for Preferred Freezer.

ECONOMIC OUTLOOKIn an effort to trigger economic development the City of Chicago has been aggressively

seeking to attract new employers to the abandoned manufacturing clusters on its South Side.

Earlier this year it was announced that rail car manufacturing would be returning to the City

for the first time in nearly three decades after The Chicago Transit Authority inked a $1.3

billion deal to replace 847 of its aging rail cars. CSR Sifang America JV won the bid after

pledging to fulfill the order through a new manufacturing facility on the south side expected to

generate $40 million in capital investment and 170 new jobs. In another surprising

development Whole Foods announced it will be shuttering its Northwest Indiana distribution

center in favor of a new 160,000 square foot building on a 16.5 acre site in the city’s Pullman

neighborhood. The facility will serve the greater Midwest including a growing number of stores

in the Chicago region.

5%

7%

9%

11%

13%

15%

17%

19%

-2,000,000

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$6.04

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

18

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 34,628,291 6.7% 7.5% 164,926 273,481 $6.43 227,043 261,156

Manufacturing 61,144,678 6.7% 8.2% 217,037 69,456 $5.82 196,000 0

Total Industrial 103,790 0.0% 0.0% 0 0 $0.00 0 0

Flex / R&D 95,876,759 6.7% 7.9% 381,963 342,937 $6.04 423,043 261,156

Higher ratio of manufacturing

1Limited bulk distribution spaces

2

Users in close proximity to urban

core customers and suppliers

3Access to multiple intermodal

ramps

4

South Chicago | Submarket News

19

LEASE ACTIVITYTwo leases signed during the quarter contributed greatly to driving down the vacancy rate in

the South Suburbs to 6.53 percent – a stunning 112 basis point decline from the previous

quarter. AAL Organics leased 223,517 square-foot crane facility at 300 E. Joe Orr Road,

Chicago Heights – they have a purchase option which they most likely will exercise at the end

of the short term lease. The second lease was consummated by Jacobson Warehouse

Company which took from GLP, 156,000 square feet at 21700 Mark Collins Drive, Sauk

Village. The 3PL company has been a occupant in Sauk Village for quite some time.

RENTSSouth Suburbs asking rental rates grew slightly from the first quarter level of $4.34 per square

foot net to $4.40 per square foot net. South Suburbs rents are not too far off the Chicago

Metropolitan average of $4.78 per square foot net.

SALES AND CONSTRUCTIONInvestment sale activity in the South Suburbs remains strong. A three building Class A

portfolio (all buildings located in Tinley Park) totaling 1.2 million square feet was sold by

CBRE Global Investors to Hillwood. The sale price was $63,150,000/$51.26 per square foot

with a going in cap rate of 5.42 percent. Additionally Private Capital Ventures sold a 91,504-

square-foot Class B asset to Brennan Investment Group for $4,030,000/$44.04 per square

foot with a cap rate estimated at 9.4 percent. User sale activity also reported robust activity.

The largest sale was procured by Litetronics International, Inc. which purchased a 99,200-

square-foot manufacturing plant from Welbic Investments for $35.56 per square foot.

ECONOMIC OUTLOOKThe South Suburban industrial market is a viable alterative for manufacturing and local

distribution firms due to its immediate access to I-294, I-80 and I-94 and abundant blue collar

workforce. Rail served buildings are easier to find in this market. Additionally public transit

connections via the CTA red and orange lines along with Metra commuter rail help connect

users to the City’s deep labor pool.


Supply




Dem

and



Pricing



AVERAGE RENTAL RATE


South Suburbs| Submarket News

Second Quarter 2016



AAL Organics New lease 300 E Joe Ore Road Chicago Heights 223,517

Jacobson Warehouse Company New lease 21700 Mark Collins Drive Sauk Village 156,000

Buddig New lease 333 W Taft Drive South Holland 53,160

Carousel Checks Renewal 8906 S Harlem Avenue Bridgeview 33,000




Hillwood CBRE Global Investors 3-building Portfolio Tinley Park 1,231,950 4/2016 $ 51.26

Litetronics International, Inc. Welbic Investments 6969 W 73rd Street Bedford Park 99,200 4/2016 $ 35.56

Brennan Investment Group Private Capital Ventures 16800 S Canal Street South Holland 91,504 5/2016 $ 44.04

Neill Leasing Company

Midwest Warehouse &

Distribution

7424 S Mason

Avenue Bedford Park 86,250 4/2016 $ 32.34

5%

7%

9%

11%

13%

15%

17%

19%

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2010 2011 2012 2013 2014 2015 2Q16


$4.40

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

20

South Suburbs| Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total

vacancy

(%)

Total

availability

(%)

Q1 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse /

Distribution40,186,428 6.7% 9.2% 754,770 498,622 $3.97 0 0

Manufacturing 43,314,506 6.6% 7.4% 221,011 107,237 $6.09 0 33,000

General 1,167,630 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 84,668,564 6.5% 8.2% 975,781 605,859 $4.40 0 33,000

Higher ratio of manufacturing;

Chicago’s five largest

manufacturing sectors are

fabricated metal, food, machinery,

printing, and electrical equipment

and component manufacturing1Proximity to Chicago’s deep

urban core and public transit

accessibility2Excellent access to skilled and

semi-skilled local workforce

3

Limited Class A inventory

4

21


Supply



Total availability 7.6%

Dem

and



Pricing



AVERAGE RENTAL RATE


I-57 | Submarket News

Second Quarter 2016



XPO Expansion 25810 S Ridgeland Ave Monee 153,350

Vaughn Furniture New lease 136 Charles St Kankakee 20,682

Precise Tree Care New lease 9370 E Laraway Rd Frankfort 10,000




R. P. Lumber Company, Inc. First Midwest Bank 800 W Church Rd Beecher 28,405 6/8/16 $21.12

LEASE ACTIVITYThe largest lease of the second quarter in I-57 was XPO Logistics’ new commitment for an

additional 153,350 square feet at 25810 S Ridgeland Avenue in Monee. The 3PL will be

handling food and beverage product in this 431,000 square-foot Class A building owned by

Exeter. XPO by way of the Jacobson acquisition already had an operation inside the building.

A Seattle-based E-commerce company is rumored to be close to a build-to-suit project on an

80 acre site in Monee. This will be the third fulfillment center announcement in the Chicago

market for the E-Commerce firm in the past six months. In Kankakee, Vaughn Furniture

agreed to lease 21,000 square feet at 136 Charles Street.

RENTSAsking rental rates at the midpoint of 2016 quarter currently stand at $3.81 per square-foot in

the I-57 submarket. This is a seven cent improvement from last quarter. The area offers

significant cost advantages when compared to other markets across Metro Chicago and

allows occupiers to pull labor from across the Indiana border.

SALES AND CONSTRUCTIONIn Beecher, First Midwest Bank disposed of a 28,000 square-foot lumber yard at 800 W

Church Road to RP Lumber Company. This rail served site traded for $600,000 in June.

Northern Builders is making progress on a build-to-suit for Kloeckner Metals. The parcel is

rail served by the CN and the 105,000 square-foot manufacturing building is scheduled to be

completed in October 2016.

ECONOMIC OUTLOOKDOT Foods has announced plans to hire 150 people over the next two to three years to staff

their new 191,000 square-foot facility at 251 Central Avenue in University Park. DOT outgrew

their previous 63,000 square-foot Joliet location. The I-57 Corridor remains a key logistics

node due to is proximity to the Joliet and South Suburban intermodal terminals and the ability

to easily reach the CBD. I-57 offers convenient interstate connectivity to Memphis and St.

Louis providing an optimal location for Midwest superregional distribution that has attracted

the likes of Clorox, Behr Paints, and Solo Cup.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2010 2011 2012 2013 2014 2015 2Q16


$3.81

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

22


MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 20,667,475 8.8% 8.8% -96,017 3,171 $3.79 0 0

Manufacturing 9,454,414 3.6% 3.6% -17,911 -15,464 $6.25 185,000 0

General 275,905 55.3% 55.3% 28,405 28,405 $0.00 0 0

Total industrial 30,397,794 7.6% 7.6% -85,523 16,112 $3.81 185,000 0

Lower lease velocity reflects its

30-mile distance from the urban

Chicago market

1Limited Class A bulk product

2Area has a high ratio of

manufacturers

3

Located in Will County, with

lower area tax rates and

thriving transportation system

4

23


Supply




Dem

and


YTD net absorption (s.f.) 3.971,505

Pricing



AVERAGE RENTAL RATE



Second Quarter 2016



Undisclosed New lease 201 Emerald Road Joliet 746,772

Undisclosed Renewal 29700 S Graaskamp Blvd Wilmington 720,000

Samsung New lease 20901-21151 W Walter Strawn Dr Elwood 383,242

B & G Foods Renewal 4000 Rock Creek Boulevard Joliet 252,356




Superior Properties Undislcosed 927 Gardner Street Joliet 50,800 5/18/2016 $10.33

Plastic Film Corporation of

America MB Financial Bank 1007 Geneva Street Shorewood 23,342 5/15/2016 $29.99

D & B Developers, LLC Marychristy, LLC 100-126 McDonald Avenue Joliet 19,688 5/18/2016 $50.79

LEASE ACTIVITY12 new leases totaling an astounding 2.4 million square feet were signed in quarter two

propelling the I-80 submarket’s year-to-date net absorption to 3.9 million square feet – the

highest in the Chicago market. Two prelease deals accounted for over half of total leasing

volume in quarter two. In Joliet, an unnamed e-commerce tenant secured Hillwood’s entire

746,722 square foot speculative building at 201 Emerald Rd on a 10 year term. In

Wilmington’s RidgePort Logistics Center, an undisclosed food user signed a 720,000-square-

foot lease at Elion’s 29700 S Graaskamp Blvd. The speculative building, which delivered in

late 2015 is currently in its second phase of development expanding to a total area to 1.1

million square feet. Between this deal and the 72,000 square-foot expansion of CDC, the

existing tenant, the building is fully leased.

RENTSRents in I-80 experienced an $ 0.08 bump over the previous quarter yet still remain below last

year’s $4.65 per square foot net peak. The 190 basis point decline in vacancy in quarter two

could influence landlords to readjust their asking rents.

SALES AND CONSTRUCTIONI-80 witnessed five new construction starts this quarter totaling 3.4 million square feet of

which 1.5 million square feet is speculative in nature. Additionally, there is 6.6 million square

feet of vertical construction underway. The I-80 Corridor also observed 1.6 million square feet

delivered to the market this quarter, including Saddle Creek’s 1,114,575 build-to-suit in Joliet -

the largest completion recorded this year across Chicagoland. Speculative construction has

exploded in I-80 Corridor as 4.3 million square feet of developments are underway.

Remarkably only 3.1 million square feet remain available.

ECONOMIC OUTLOOKThe I-80 Corridor is a diverse logistics hub and counts other notable occupiers aside from

bulk warehouse and distributors. The CenterPoint Intermodal Park, a 1,500 acre industrial

park served by Union Pacific and BNSF, is among the most active inland ports in the U.S. and

a core competitive advantage of the submarket. The State of Illinois recently announced a

public-private partnership with CenterPoint to develop a new Houbolt Road toll bridge

spanning the Des Plaines River. The $170 million dollar toll way will be built and operated by

CenterPoint and is expected to service as may as 6,600 trucks upon completion in late 2018.

A figure that is projected to triple by 2040.

5%

7%

9%

11%

13%

15%

17%

19%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2010 2011 2012 2013 2014 2015 2Q16


$4.33

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

24


MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse /

Distribution57,984,028 5.0% 5.9% 2,648,977 3,898,134 $4.21 6,406,401 1,958,509

Manufacturing 15,821,275 5.4% 5.4% 92,038 73,371 $7.42 202,812 0

General 135,070 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 73,940,373 5.1% 5.8% 2,741,015 3,971,505 $4.33 6,609,213 1,958,509

Big box class A bulk distribution

1Large workforce

2Inland port and logistics hub

3Multi-state regional distribution

4

25


Supply



Total Availability(%) 8.3%

Dem

and



Pricing



AVERAGE RENTAL RATE


I-55 | Submarket NewsSecond Quarter 2016



Sears Renewal 1701 W. Normantown Road Romeoville 818,848

Seattle-based E-Commerce company New lease 1125 Remington Boulevard Romeoville 767,171

Best Buy Build-to-Suit Carlow Corporate Center Bolingbrook 615,160

APL Logistics New lease 800 S Veterans Parkway Bolingbrook 325,144




TA Associates Prologis 3-7 Timber Court Bolingbrook 320,722 6/6/2016 $55.97

Lincoln Property Company Molto Properties 1055 Remington Blvd Bolingbrook 111,200 6/15/2016 $118.71

Westmount Realty Capital Prologis 260 Rocbaar Drive Romeoville 108,000 4/7/2016 $32.72

Venture One Real Estate TDC Filter Manufacturing 2 Territorial Court Bolingbrook 101,500 5/25/2016 $71.00

LEASE ACTIVITYIn the second quarter, Sears committed to an renewal with Heitman for 819,000 square feet of

warehouse space at 1701 W Normantown Road in Romeoville. Also in Romeoville, a large E-

commerce user committed to a new lease with RREEF for a 767,171 square-foot fulfillment

center at 1125 Remington Boulevard. Northern Builders which recently acquired the Mary

Kelley Farm site in Bolingbrook secured their first deal on what is one of the last remaining

land tracts in the core I-55 Corridor. Best Buy has agreed to a 615,560 square-foot build-to-

suit for lease which will be a new regional distribution center with approximately 60,000

square feet of office buildout to house the company’s “Geek Squad.” In addition, APL

Logistics committed to a new lease for 325,000 square feet at 800 S Veterans Parkway which

helped to drive the 520,000 square feet of positive net absorption posted in the second

quarter.

RENTSAverage asking rental rates currently stand at $5.18 per square foot which represents a $0.43

cent or nine percent increase from year end as robust tenant demand has pushed vacancy

down to 5.3 percent.

SALES AND CONSTRUCTIONThe largest trade of the second quarter was TA Associates’ acquisition of 3-7 Timber Court,

Bolingbrook. Prologis sold this second generation Class A building for just under $56 per

square-foot. Molto properties sold a core three building Class A portfolio totaling 345,862

square feet to Lincoln Property Company. The properties were fully leased and sold for $34.6

million reflecting a stabilized cap rate of 5.14%. There is currently over 1.5 million square feet

of new product under construction. While vacancy and absorption remain healthy, the

amount of new speculative product in the 100,000 to 300,000 square foot range should

present some attractive opportunities for growing tenants.

ECONOMIC OUTLOOKAccording to the Will County Workforce Investment Board, the transportation and

warehousing sector reported a six percent gain in year-over-year employment. However, the

manufacturing sector was flat. Larger occupiers may see continued pressure on their labor

force as the Metro Chicago unemployment rate stands at 5.5 percent.

5%

7%

9%

11%

13%

15%

17%

19%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2010 2011 2012 2013 2014 2015 2Q16


$5.18

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

26


MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 68,230,815 5.8% 8.5% 279,245 1,003,565 $5.09 2,784,273 504,143

Manufacturing 12,277,888 2.6% 7.2% 241,560 414,352 $6.35 0 0

General 54,200 26.2% 26.2% 0 0 $0.00 0 0

Total industrial 80,562,903 5.3% 8.3% 520,805 1,417,917 $5.18 2,784,273 504,143

High velocity market for both

lease and sale activity

1Big box class A bulk distribution

2

Close proximity to Joliet

intermodals

3Large, available and skilled

local workers

4

27


Supply




Dem

and



Pricing



AVERAGE RENTAL RATE



Second Quarter 2016



Thrift Books Global New lease 2413 Prospect Drive Aurora 160,047

Best Warehouse & Transport Sublease 1203 Bilter Road Aurora 147,115

RAB Lighting New lease 966 Corporate Boulevard Aurora 92,006

AmTab Manufacturing Short term lease 102 N Overland Drive North Aurora 90,000




LIM Conor Commercial 2700 Orchard Gateway Road Aurora 304,560 5/19/2016 $90.95

Industrial Service Pallet

Kennicott Brothers

Company 720 New Haven Avenue Aurora 25,784 5/20/2016 $20.75

US Adventure RV American Express Bank 9740 S Route 59 Naperville 16,000 5/15/2016 $132.81

LEASE ACTIVITYTremendous tenant demand drove I-88 Corridor leasing volume to 663,519 square feet which

was three times greater than the prior quarter. Transactions to note include: Thrift Books

signed a new lease for 160,000 square feet at 2413 Prospect Drive in Aurora bringing the

DCT-owned building to full occupancy. Also in Aurora, Best Warehouse & Transport signed a

lease to backfill 147,115 square feet at 1203 Bilter Road. AmTab Manufacturing committed to

a 90,000 square-foot short term deal for 8 months at 102 N Overland Drive in Aurora - the

company is rumored to be active in the market for another requirement.

RENTSAt the midpoint of 2016, asking lease rates stand at $4.50 per square-foot. Over the last year,

average asking rates have climbed $0.21 cents, as vacancy is below five percent. New

speculative deliveries hitting the market in third and fourth quarters should cause vacancy to

tick up slightly this year barring any significant prelease commitments in advance of delivery.

SALES AND CONSTRUCTIONLaSalle Investment Management closed on the acquisition of a 304,560 square-foot Class A

distribution center at 2700 Orchard Gateway in Aurora. Conor Commercial recently completed

this as build-to-suit lease for PPG and the sale closed for just under $91 per square-foot at a

5.4% cap rate. In user sale news, Kennicott Brothers sold a 26,000 square-foot building at

720 New Haven Avenue in Aurora to Industrial Service Pallet Inc. for approximately $21 per

square-foot. The I-88 Corridor has delivered 919,000 square feet year to date and has

another 1,819,985 square feet in the pipeline. We are seeing healthy competition in the

400,000 square-foot range as Duke just delivered a 402,860 square-foot spec building in Park

Butterfield and Clarion & Seefried are working on a 375,000 square-foot spec building and

OPUS & AEW have a 452,000 square-footer also under way. In addition, Liberty’s 429,000

square foot building at 300 Mitchell Road in Aurora is now fully available. After delivery in

2015, UTI leased 201,000 square feet here but they have recently put their space on the

market for sublease.

ECONOMIC OUTLOOKWith the majority of the I-88 submarket’s Class A industrial product clustered in the Naperville

and Aurora areas, occupiers benefit from a large and diverse workforce. Aurora is the second

most populous city in the state and Naperville ranks as number five. Naperville was one of the

ten fastest growing communities in the United States during the 1990’s.

3%

5%

7%

9%

11%

13%

15%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2010 2011 2012 2013 2014 2015 2Q16


$4.50

$3.60

$3.80

$4.00

$4.20

$4.40

$4.60

$4.80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

28


MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse /

Distribution37,074,672 4.9% 8.1% 1,408,932 1,420,175 $4.40 1,472,425 1,223,846

Manufacturing 22,651,181 4.9% 6.0% -119,751 5,017 $4.97 43,000 0

General 124,340 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 59,850,193 4.9% 7.3% 1,289,181 1,425,192 $4.50 1,515,425 1,223,846

Higher ratio of Flex, R&D

industrial product when compared

to other Chicago suburban

industrial submarkets 1

An alternative industrial

submarket to that of the I-55

Corridor but at a price premium

2

As a result, the I-88 submarket

affords a stronger corporate

image3

Aurora is home to the State’s

largest population base outside

of Chicago proper.4

29


Supply




Dem

and



Pricing



AVERAGE RENTAL RATE


North DuPage | Submarket News

Second Quarter 2016



Office Depot Renewal 505-585 Kehoe Boulevard Carol Stream 385,344

Brook Electrical Supply Early renewal 882-880 S Rohlwing Road Addison 163,319

Winhere Break Parts Prelease 1331 Schiferl Road Bartlett 135,600

American Olean/Century Tile New lease 280 Madsen Drive Bloomingdale 60,315




Dermody First Industrial 355-365 E North Avenue Carol Stream 249,204 5/1/2016 $38.52

Westmount Realty Capital Prologis 2171 W Executive Drive Addison 75,020 4/7/2016 $92.08

Devanco Foods DCT Industrial 440 W Mission Street Carol Stream 63,208 6/15/16 $82.51

Rosetta Group Matrix International 1966 Quincy Court Glendale Heights 68,422 4/20/16 $39.46

LEASE ACTIVITYSecond quarter demand was down dramatically from the first quarter volume of 792,598

square feet to 467,757 square feet. The majority of North DuPage leasing activity was through

lease renewals. Office Depot committed to a three year renewal with Liberty on 385,344

square feet at 505-585 Kehoe Boulevard in Carol Stream. The retailer has occupied this

Class A facility since 2011, while Brook Electrical Supply renewed on 163,319 square feet

with IDI Gazeley at 882-880 S Rohlwing Road in Addison. Ridge Development in a joint

venture with Diamond secured a prelease commitment from Winhere Brake Parts for 135,600

square feet in their new spec development in the Brewster Creek Business Park in Bartlett.

The 271,000 square-foot building is on track for a fourth quarter delivery.

RENTSAsking rental rates currently stand at $5.27 per square-foot as vacancy has climbed to 5.3

percent, nearly one whole percentage point from last quarter’s mark of 4.4 percent. As one of

Chicago’s core submarkets, limited available supply and high barriers to entry will continue to

put upward pressure on rents.

SALES AND CONSTRUCTIONWestmount Realty Capital acquired the Prologis 19 building Chicagoland Class B portfolio

totaling 1.4 million square feet that included one North DuPage asset. 2171 W Executive

Drive in Addison, a 75,000 square-foot flex building traded for an allocated $92 per square

foot. On the user sale side, Devanco Foods purchased a food processing facility at 440 W

Mission Street from DCT Industrial for $82.51 per square-foot. In Carol Stream, Dermody

Properties acquired a 249,204 square-foot building from First Industrial with plans to

redevelop the site at 355-365 North Avenue into a 376,400-square-foot speculative facility. In

other construction news, IDI Gazeley committed to a forward presale development with

Cornerstone of three new speculative buildings on Madsen Drive in Bloomingdale. The

building size ranges are as follows: 52,000, 71,000 and 154,000 square feet respectively.

ECONOMIC OUTLOOKThere are currently five speculative projects under construction in North DuPage. The largest

being Prologis which will deliver 186,000 square feet in Glendale Heights by late summer

which will help to relieve some of the pent up demand for new product. As the Metro Chicago

area posts a 5.5% unemployment rate, suburban manufacturers have reported a tighter hiring

market. According to Choose DuPage, manufacturing employs over 51,000 people and

houses over 2,000 companies in DuPage County. It is the 5th largest industry in the County,

accounting for one in every ten jobs.

0%

2%

4%

6%

8%

10%

12%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2010 2011 2012 2013 2014 2015 2Q16


$5.27

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

30

North DuPage| Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total

vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 46,154,822 6.4% 9.4% -865,091 -667,001 $5.05 1,012,194 89,000

Manufacturing 33,285,673 3.8% 5.9% 95,634 108,477 $6.07 0 0

General 12,690 0.0% 0.0% 0 0 $0.00 0 0

Total industrial 79,453,185 5.3% 8.0% -769,457 -558,524 $5.27 1,012,194 89,000

Tight market overall with mainly

mid-sized users

1Some tenant migration out of

O’Hare / Cook County

2More high-image business park

setting and mix of land uses

3

Strong labor pool for

manufacturing, assembly, and

fulfillment4

31


Supply




Dem

and



Pricing


12-month dollar change - $0.07

AVERAGE RENTAL RATE


Fox Valley | Submarket News

Second Quarter 2016



DS Containers, Inc. BTS expansion 2500 Enterprise Circle West Chicago 250,575




Cabot Properties DCT Industrial Trust 4-Building Portfolio West Chicago 829,190 4/2016 $39.80

STAG Capital DCT Industrial Trust 1726-1850 Blackhawk Drive West Chicago 249,470 5/2016 $34.07

Tiger Drylac DRG 707 Kautz Road Saint Charles 35,526 5/2016 $57.68

Venture One Real Estate Steven Spoerl 1890-1896 Suncast Lane Batavia 34,358 4/2016 $52.54

LEASE ACTIVITYJust one new lease was consummated this quarter however its volume of 250,575 square feet

was significantly ahead of first quarter volume which measured 149,000 square feet. DS

Containers, Inc. negotiated with CenterPoint Properties to expand their building at 2500

Enterprise Circle, West Chicago by 250,575 square feet. Once completed the building will

encompass 550,095 square feet. The aforementioned lease did not have a positive impact on

Fox Valley’s second quarter vacancy rate. In fact the second quarter rate of 5.3 percent was

an alarming 151 basis point higher than the first quarter rate of 3.77 percent.

RENTSAsking average rents in the Fox Valley market edged up 5 cents from the first quarter to $4.25

per square foot net.

SALES AND CONSTRUCTIONDCT Industrial Trust sold four buildings out of a six building portfolio in West Chicago to

Cabot Properties. The package encompassed 829,190 square feet and sold for $33,001,000

with a cap rate of 8.06 percent. DCT then flipped the fifth building at 1726-850 Blackhawk

Drive to STAG Capital for $8,500,000. The remaining asset at 1030 E Fabyan Parkway, West

Chicago remains available for sale. One construction project commenced construction this

quarter as DS Containers, Inc. hired CenterPoint Properties to expand their building at 2500

Enterprise Circle, West Chicago by 250,575 square feet. The manufacturer of two-piece

polymer-coated steel aerosol cans just moved in to the existing structure at the beginning of

the year.

ECONOMIC OUTLOOKThe Fox Valley market has witnessed remarkable improvement since 2013. This is primarily

due to the growth of local firms expanding within the market. The following are just a few

companies which have expanded within the market: AJR Filtration, Chicago Expert Importers,

Chicago Mold, DS Container, Inc., PDS Transportation and Peacock Engineering.

0%

2%

4%

6%

8%

10%

12%

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2010 2011 2012 2013 2014 2015 2Q16


$4.25

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

32

Fox Valley | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 18,049,021 7.4% 10.5% -474,953 -712,147 $4.05 0 0

Manufacturing 17,446,771 3.0% 3.3% -69,409 186,419 $5.04 430,696 299,520

Total Industrial 35,495,792 5.3% 6.9% -544,362 -525,728 $4.25 430,696 299,520

Velocity tends to lag the overall

Chicago industrial market

1High ratio of heavy and

advanced manufacturers

2

Limited Class A bulk distribution

product when compared to the I-

88 and North DuPage submarkets

.3

Access to large, available and

skilled local workforce

.4

33


Supply




Dem

and



Pricing


12-month percent change $0.44

AVERAGE RENTAL RATE


North Kane | Submarket News

Second Quarter 2016



M. J. Electric, LLC New lease 255 Industrial Drive Hampshire 44,751

Fremont International Trading Renewal 2800-80 Galvin Drive Elgin 20,369

International Floral New lease 1355 Bowes Road Elgin 12,000




Undisclosed Burnidge Corporation 100-106 Industrial Drive Gilberts 14,145 5/2016 TBD

LEASE ACTIVITYOccupier activity fell for the second consecutive quarter, measuring a paltry 99,390 square

feet. This was far inferior to the 288,575 square feet leased last quarter. The largest lease

signed this quarter was procured by M. J. Electric, LLC which took possession of 44,751

square feet at 255 Industrial Drive, Hampshire. The balance of leases were below 15,000

square feet. Interestingly, the vast majority of second quarter leasing volume came from

manufacturing tenants.

RENTSNorth Kane County average asking rents equaled $4.95 per square foot net, up a couple of

notches from the first quarter mark of $4.92 per square foot net. The second quarter vacancy

of 9.69 percent was a sharp rise of 49 basis points from the prior quarter, which could have an

adverse affect on North Kane Counties’ average asking rents going forward.

SALES AND CONSTRUCTIONInvestment activity was quiet in the second quarter as no significant Class A buildings traded.

In comparison just one trade (73,000 square feet at 2555 Decade Court, Elgin) occurred last

quarter – Exeter Property Group to The Capital Companies..Developers remain bullish for the

North Kane County industrial market as three speculative projects, totaling 950,900 square

feet commenced construction this quarter. All three should be delivered by the end of the first

quarter 2017. Additionally two build-to-suit project broke ground, Hiwin has 117,400 square

feet underway at 12455 Jim Dhamer Drive in Huntley, while The Opus Group was contracted

by Oelheld Production to build a 23,400-square-foot manufacturing facility.

ECONOMIC OUTLOOKDevelopers rushing to build speculative product could drive up vacancies in early 2017. This

will also have an impact on rents which could drop due to increased number of options.

0%

2%

4%

6%

8%

10%

12%

14%

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2010 2011 2012 2013 2014 2015 2Q16


$4.95

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

34

North Kane | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 15,250,346 14.9% 15.9% -116,302 -140,674 $5.02 1,109,143 82,922

Manufacturing 14,850,953 4.4% 4.4% -30,542 142,228 $4.73 156,400 0

General 13,200 0.0% 0.0% 0 0 $0.00 0 0

Total Industrial 30,114,499 9.7% 10.2% -146,844 1,554 $4.95 1,265,543 82,922

Product in close proximity to full

interchanges along I-90

commands a premium

1Higher proportion of owner-

occupiers

2

Legacy of skilled manufacturing

workforce

3

Elgin is the 8th largest city in

the state

4

35


Supply



Total availability(%) 14.0%

Dem

and



Pricing


12-month dollar change - $0.46

AVERAGE RENTAL RATE


McHenry County | Submarket News

Second Quarter 2016



Other World Computing New lease 8550 Ridgefield Road Crystal Lake 7,000




Edward Village LLC Optima International LLC 2001 N Division Street Harvard 1,527,857 5/2016 $ 6.09

Brennan Investment Group Rohrer Corporation 13701 George Bush Court Huntley 90,000 5/2016 $ 54.49

All-Rite Spring Company Undisclosed 2807 Route 12 Spring Grove 33,089 4/2016 $ 19.64

Crystal Lake Food Pantry Illini Hardware Corporation 42 East Street Crystal Lake 30,000 5/2016 $ 23.33

LEASE ACTIVITYMcHenry County mid-year leasing activity was driven by small users. The largest lease year-

to-date was signed by Conrad Construction which moved into 17,920 square feet at 5701

Weatherstone Way, Jonsburg. The mid-year total leasing volume measured 101,226 square

feet, 83.2 percent of which occurred during the first quarter. Interestingly, seven of the nine

leases reported during the first half of 2016 were in manufacturing spaces.

RENTSMcHenry County rental rates currently stand at $3.71 per square-foot net relatively

unchanged from the first quarter mark of $3.72 per square foot net. Rents are likely fall due to

McHenry County’s vacancy rate of 12.89 percent - the highest of all submarkets.

SALES AND CONSTRUCTIONThe former Motorola Campus in Harvard has a new owner. The 1.5-million-square-foot

campus, which has sat vacant since 2003 was sold to Edward Village, LLC for $9.3 million.

The Chinese based investor will reposition the building for multi-tenant incubator use. The

seller, Optima International, Inc. purchased the building at auction back in August of 2008 for

ironically, $9.3 million. First half of 2016 user sales reached 167,629 square feet, outpacing

the 101,226 square feet leased. The largest user sale recorded was by Container

International which bought 79,340 square feet from Alternative Garden Supply at 176 Terra

Cotta Avenue in Crystal Lake.

ECONOMIC OUTLOOKMcHenry County contains one of the smallest inventory bases in Chicago at 29.5 million

square feet. Major industry clusters that make up this base include biotechnology, medical

products/devices and plastics manufacturers. More affordable real estate and long term

tenants translate into a larger proportion of owner-occupiers in McHenry County. As a result

leasing velocity is somewhat more relaxed in the submarket and absorption tends to be driven

by user sales.

5%

7%

9%

11%

13%

15%

17%

19%

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$3.71

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

36

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 10,630,867 1.8% 4.3% 55,711 -11,893 $4.63 0 0

Manufacturing 18,858,696 19.2% 19.6% -71,637 150,769 $3.58 0 0

Total Industrial 29,489,563 12.9% 14.0% -15,926 138,876 $3.71 0 0

Higher ratio of manufacturing with

an educated and skilled

workforce1Much of the product is owner-

occupied

2

Submarket affords a more

corporate image

3Smaller footprint than other

submarkets

4

McHenry County | Submarket News

37


Supply


Total Vacancy (%) 10.6%

Total Availability (%) 12.3%

Dem

and



Pricing



AVERAGE RENTAL RATE


Rockford | Submarket News

Second Quarter 2016



Ground Effects, Inc. Renewal 795 Landmark Drive Belvidere 90,000

VersaCold Renewal 857-977 Landmark Drive Belvidere 82,920

Undisclosed New lease 3261 Forest View Road Rockford 36,563

Undisclosed New lease 4732 Prairie Hill Road Machesney Park 32,000




Slidematic Components Falconer 16377 3rd Street Seward 58,956 6/1/16 $38.55

Oehlberg Construction Undisclosed 5469 Pine Lane Roscoe 20,000 6/1/2016 $2.50

Undisclosed Undisclosed 208-210 Kishwaukee Street Rockford 16,480 6/1/2016 TBD

LEASE ACTIVITYThe largest lease transaction in the Rockford submarket was by Canadian-based Ground

Effect’s renewal for 90,000 square feet with STAG Industrial at 795 Landmark Drive in

Belvidere. Ground Effects provides components for the automotive industry. Also in

Belvidere, VersaCold renewed their 83,000 square-foot lease with STAG Industrial at 857-977

Landmark Drive. While this is in a multi-tenant building, VersaCold built out all the freezer

space at their own expense and is currently handling food products for a large retailer out of

this facility.

RENTSThe average asking rental rate for industrial space is currently at $3.33 per square foot

making Rockford one of the more affordable geographies in the Chicago metro market.

Lease rates are up seven cents from first quarter but down $0.11 year-over-year.

SALES AND CONSTRUCTIONIn Seward, Slidepatic Precision Components acquired a 60,000 square-foot building at 16377

3rd Street for $2.27 million. There are currently no buildings under construction in the

Rockford submarket and no product has been delivered thus far in 2016. However, Fiat

Chrysler recently announced it will be investing $350 million to retool its Belvidere plant to

begin production of the Jeep Cherokee, one of the company’s best selling models, in 2017.

The shift is expected generate 300+ new jobs and trigger a shuffle in the plant’s local supplier

base. Although the real estate implications have yet to be quantified, local officials have

hinted that the supplier’s corporate site selectors are already examining potential

development sites surrounding the Belvidere facility.

ECONOMIC OUTLOOKThe Rockford Region sits contiguous to the Chicago MSA in Northern Illinois and includes

Boone and Winnebago Counties. Rockford is 65 miles northwest of O’Hare, 90 miles east of

the Mississippi River and adjacent to the Wisconsin state line. Its location allows for easy

access to regional, national, and international markets. According to the Rockford Area

Economic Development Council, the region has twice the national average of manufacturing

workers, with strong concentrations in several advanced manufacturing clusters. Recent

studies identified a primary labor force of 150,000 within 20 miles and more than 435,000

within 40 minutes

5%

7%

9%

11%

13%

15%

17%

19%

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$3.33

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

38

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 10,320,576 8.4% 12.1% -9,920 48,696 $3.24 0 0

Manufacturing 13,617,911 12.2% 12.4% -58,941 -74,343 $3.36 0 0

Total Industrial 23,938,487 10.6% 12.3% 68,861 25,647 $3.33 0 0

Historically auto and aerospace

manufacturing

1

Limited Class A product

2

Co-located suppliers of

components

3

Lower land costs and fast-

tracking permitting

4

Rockford | Submarket News

39


Supply



Total Availability(%) 7.4%

Dem

and



Pricing



AVERAGE RENTAL RATE


I-39 | Submarket NewsSecond Quarter 2016



3M Build to Suit Fairview Drive, Park88 DeKalb 897,000

Del Monte* 1Q13 Expansion 501 Steward Road Rochelle 312,750

Private Packaging Firm* 4Q13 New lease 421 California Street Sycamore 30,000




Griffin Capital 3M Fairview Drive, Park88 DeKalb 897,000 Pending $66.40

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

LEASE ACTIVITY

I-39 leasing volume has been quiet for the first half of 2016. The most recent tenant activity

was by 3M who negotiated a build-to-suit lease, encompassing 897,000 square feet at Park

88 in DeKalb. The warehouse/distribution facility is slated for a third quarter 2016 delivery

which will have a positive impact on I-39 Corridor’s net absorption.

RENTS

Asking rents during the quarter measured $3.35 per square foot net, up significantly from the

$3.21 per square foot net reported last quarter. These spikes are not uncommon along the I-

39 corridor where the shallow pool of existing vacant supply can be easily swayed by one or

two vacancies entering the market.

SALES AND CONSTRUCTION

All industrial sales activity as of mid 2016 was procured by owner occupiers. To date two

buildings have been sold absorbing 73,270 square feet vacant space from the market. The

largest transaction was procured by Cole Pallet Service Corporation which purchased a

38,400-square-foot manufacturing plant at 1600 7th Street, DeKalb. There is another

consolidation occurred in Sycamore, where electrical component manufacturer Ideal

Industries moved into 210,000 square feet at 1630 W Prairie, replacing two aging facilities in

the area. This also represents the largest delivery of 2016.

ECONOMIC OUTLOOK

The I-39 Corridor’s is investing in intermodal rail yard to draw heavy transportation users to

the area. The City of Rochelle, has spent $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.

5%

7%

9%

11%

13%

15%

17%

19%

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16


$3.35

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

40


MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 13,716,499 5.5% 7.7% 50,867 28,267 $3.92 978,120 0

Manufacturing 18,166,489 5.1% 7.2% 4,270 229,140 $3.03 0 210,000

General 34,450 0.0% 0.0% 0 0 $0.00 0 0

Total industrial 31,917,438 5.3% 7.4% 55,137 257,407 $3.35 978,120 210,000

Strong intermodal and

transportation infrastructure in a

rural setting provide opportunities

to bypass congestion.1

Lower land costs make build-to-

suit options make the area an

attractive industrial alternative

2

The 20,000+ student body at

Northern Illinois University

provides users in DeKalb and

additional resource to supplement

local workforce.3

Limited supply of Class A

product tends to favor long

term build to suit tenants and

owner-occupiers.4

41


Supply


Total vacancy 9.1%

Total availability 9.9%

Dem

and



Pricing



AVERAGE RENTAL RATE


Northwest Indiana | Submarket News

Second Quarter 2016



Polymer Logistics New lease 6750 Daniel Burnham Drive Portage 73,500

Richards Building Supply Company New lease 4150 E Lincoln Highway Merrillville 26,750

Steiner Electric Company Renewal 1600-1640 Northwind Parkway Hobart 18,960



Buyer Seller Location City Size (s.f.) Date Price / (s.f.)

Task Force Tips

Dayton Superior

Corp 4201 Montdale Park Drive Valparaiso 62,025 4/1/16 TBD

Security Transport

Al Warren Oil

Company, Inc. 111 142nd Street Hammond 29,556 4/15/16 $30.79

LEASE ACTIVITYJust two new leases were tracked in the second quarter measuring 100,250 square feet.

In Portage, Polymer Logistics committed to a 73,500 square-foot new lease with

VentureOne/DRA Advisors at 6750 Daniel Burnham Drive. VentureOne currently has

91,000 square feet of Class A space available here in the building in addition to 341,000

square feet available up the street at 6515 Ameriplex Drive. In Merrillville, Richards

Building Supply Company signed a new lease to relocate to a 26,750 square-foot

freestanding building at 4150 E Lincoln Highway.

RENTSCurrent asking lease rates stand at $3.54 per square foot. The Northwest Indiana

submarket offers more affordable real estate options and significantly lower property tax

rates and energy costs than Illinois.

SALES AND CONSTRUCTIONTwo user sales were posted across Lake and Porter County in the second quarter of

2016. In Valpariaso, Task Force Tips acquired a 62,000 square-foot building for an

undisclosed price. NB Coatings selected NorthWind Crossings in Hobart for a nearly

125,000 square-foot build-to-suit distribution facility. Becknell Industrial was hired by NB

Coatings to build the manufacturing facility with completion estimated in First Quarter

2017. The Lansing, IL-based automotive supplier is a subsidiary of Japan-based Nippon

Paint.

ECONOMIC OUTLOOKThe Northwest Indiana Submarket will remain a pertinent player in the Chicago Metro

Market. Available incentives, especially those offered to companies relocating from

Illinois combined with the close proximity to Illinois and especially Chicago add to the

long list of benefits associated with operating in the submarket. Potential hurdles in the

economic outlook in this submarket include limited supply of adequate development land.

5%

7%

9%

11%

13%

15%

17%

19%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2010 2011 2012 2013 2014 2015 2Q16


$3.54

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16

42

Northwest Indiana| Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

YTD Completions

Under

construction

(s.f.)

Warehouse / Distribution 9,544,984 11.3% 12.1% 297,840 259,936 $3.93 38,121 159,813

Manufacturing 21,249,968 8.1% 8.9% 362,048 377,048 $3.24 0 300,000

Total Industrial 30,794,952 9.1% 9.9% 659,888 636,984 $3.54 38,121 459,813

More measured in its lease

velocity compared to other

Chicago area submarkets1Heaviest, traditional industrial

users north of I-90

2

Limited Class A

warehouse/distribution and flex/

R&D product due to the market

being traditional heavy industrial.3

Access to dense workforce

4

43


Supply




Dem

and



Pricing



AVERAGE RENTAL RATE


Southeast Wisconsin | Submarket News

Second Quarter 2016



Allstates Trucking Renewal 1400 International Drive Mount Pleasant 63,845

Undisclosed Expansion 3030 S Sylvania Avenue Sturtevant 47,078

Gateway Classic Cars of Milwaukee, LLC New lease 9949 58th Place Kenosha 39,960

The Sherwin Williams Company New lease 8920 58th Place Kenosha 10,000




Exeter Property Group Centerpoint 9800 72nd Avenue Pleasant Prairie 411,415 6/22/2016 $52.83

Best Bus Sales JLB Investments 12721 12th Street Kenosha 35,216 5/10/2016 $23.97

LEASE ACTIVITYIn Mount Pleasant, Allstates Trucking committed to a renewal for 64,000 square feet with

H.S.A in the Park 94 Business Park. This is Allstates’ headquarters where they provide

warehousing and truckload and LTL services. In the Business Park of Kenosha, Gateway

Classic Cars of Milwaukee signed a new lease in Zilber’s newly completed speculative

building at 9949 58th Place. The lease was just under 40,000 square feet for an 87 month

term. Net absorption was in negative territory in the first quarter but positive for the year-to-

date. However, barring any large transactions in the second half of the year, the market is not

likely to match the absorption successes of 2015.

RENTSThe vacancy rate ticked over 100 basis points across Kenosha and Racine Counties from 4.1

percent to 5.4 percent quarter-over-quarter. Second quarter asking lease rates were $4.41

per square-foot net which was virtually unchanged from the previous quarter. We are still

witnessing strong activity across the submarket however, the leasing velocity is not quite as

robust as many of the core Chicago submarkets.

SALES AND CONSTRUCTIONOne of the largest sales across both the Chicago and Milwaukee markets as well as a key

national single tenant investment comp was Exeter’s acquisition of the 891,567 square-foot

SC Johnson distribution center at 9800 72nd Avenue in Pleasant Prairie. This building sold

for $47.1 million at a 6.2% cap rate. First Industrial is nearing completion of a 601,491

square-foot big box speculative building at 8448 38th in Somers. They are rumored to be

close to securing a full building lease with a Wisconsin-based manufacturer. Also in the

pipeline, Majestic Realty has started pouring footings and has ordered precast for a 424,164

square-foot speculative building on 88th Avenue in Pleasant Prairie.

ECONOMIC OUTLOOKKenosha’s pro-business environment, strong labor pools and good business/industrial parks

work in concert, making Kenosha an ideal location to do business. Some of the companies

that call Kenosha County their home are Snap-on Incorporated, Jockey International & Uline.

Immediately north is Racine County which has an unemployment rate of approximately 6.1

percent. Racine County is a net exporter of labor— about 22,000, more residents leave the

county for work than commute into the county.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

2010 2011 2012 2013 2014 2015 2Q16


$4.41

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2007 2008 2009 2010 2011 2012 2013 2014 2,015 2Q16

44

Southeast Wisconsin | Submarket News

MARKET MAPSUBMARKET

CHARACTERISTICS






Property type

Total

inventory

(s.f.)

Total vacancy

(%)

Total

availability

(%)

Q2 total net

absorption

(s.f.)

YTD total net

absorption

(s.f)

Average direct

asking rent

($ p.s.f.)

Under

construction

(s.f.)

YTD

completions

Warehouse / Distribution 28,545,291 7.6% 8.7% -121,202 -570,851 $4.60 200,696 683,391

Manufacturing 24,546,010 2.8% 4.1% 30,265 746,850 $3.29 0 629,585

General 43,624 0.0% 0.0% 0 0 $0.00 0 0

Total industrial 53,134,925 5.4% 6.5% -90,937 175,999 $4.41 200,696 1,312,976

Newer big box industrial ideal for

next generation supply chains

1Comparatively lower land costs

2

Attracting national attention for

firms looking to have a presence

in Chicago metro area

.3

Pro business-climate

aggressive economic

development initiatives4

45

Industrial Statistics

Chicago | Q2 2016

Inventory (s.f.)

Quarterly total net

absorption(s.f.)

YTD total net

absorption(s.f.)

YTDtotal net

absorption(% of stock)

Total vacancy

(%)

Total availability

(%)

Average total asking

rent ($ p.s.f.)

Quarterlycompletions

(s.f.)

YTDcompletions

(s.f.)

Underconstruction

(s.f.)

Lake CountyWarehouse / Distribution 35,945,949 -39,855 250,519 0.7% 13.0% 14.6% $5.49 646,848 716,848 400,758Manufacturing 31,234,667 75,233 -85,400 -0.3% 6.2% 7.2% $5.63 0 0 0General 93,277 40,165 40,165 43.1% 0.0% 0.0% $0.00 40,165 40,165 20,000Total industrial 67,273,893 75,543 205,284 0.3% 9.8% 11.2% $5.52 687,013 757,013 420,758

North Cook CountyWarehouse / Distribution 15,492,706 -43,309 88,289 0.6% 7.1% 8.5% $5.65 0 217,280 0Manufacturing 32,750,865 -92,349 91,181 0.3% 5.2% 7.0% $5.52 0 0 0General 73,274 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 48,316,845 -135,658 179,470 0.4% 5.8% 7.5% $5.59 0 217,280 0

Northwest Cook CountyWarehouse / Distribution 13,244,377 59,662 10,911 0.1% 10.2% 11.5% $5.02 0 423,672 0Manufacturing 13,134,247 205,816 141,327 1.1% 9.0% 9.2% $4.72 0 0 0General 80,592 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 26,459,216 265,478 152,238 0.6% 9.6% 10.3% $4.87 0 423,672 0

O'HareWarehouse / Distribution 55,703,656 -721,496 182,130 0.3% 6.2% 9.1% $5.93 0 0 440,000Manufacturing 37,863,339 126,390 -111,515 -0.3% 5.6% 7.2% $5.41 0 0 0General 29,015 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 93,596,010 -595,106 70,615 0.1% 5.9% 8.4% $5.76 0 0 440,000

West Cook CountyWarehouse / Distribution 42,848,916 -218,891 -285,567 -0.7% 14.1% 15.9% $5.21 0 0 1,518,784Manufacturing 50,017,590 -757,844 -638,099 -1.3% 6.1% 7.3% $5.13 0 0 0General 24,600 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 92,891,106 -976,735 -923,666 -1.0% 9.8% 11.3% $5.20 0 0 1,518,784

North ChicagoWarehouse / Distribution 18,701,998 -453,218 -521,868 -2.8% 6.3% 6.6% $10.71 0 0 40,700Manufacturing 41,119,098 356,296 264,115 0.6% 6.1% 6.9% $7.43 0 0 0General 25,000 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 59,846,096 -96,922 -257,753 -0.4% 6.2% 6.8% $8.61 0 0 40,700

South ChicagoWarehouse / Distribution 34,628,291 164,926 273,481 0.8% 6.7% 7.5% $6.43 41,298 261,156 227,043Manufacturing 61,144,678 217,037 69,456 0.1% 6.7% 8.2% $5.82 0 0 196,000General 103,790 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 95,876,759 381,963 342,937 0.4% 6.7% 7.9% $6.04 41,298 261,156 423,043

George Cutro - Director, Industrial Research8755 W Higgins Rd Suite 750 Chicago, IL 60631 tel +1 773 458 1433 [email protected]

2016 Jones Lang LaSalle IP, Inc. All rights reserved.

46

Chicago | Q2 2016

Inventory (s.f.)

Quarterly total net

absorption(s.f.)

YTD total net

absorption(s.f.)

YTDtotal net


Total vacancy

(%)

Total availability

(%)


rent ($ p.s.f.)


(s.f.)

YTDcompletions

(s.f.)

Underconstruction

(s.f.)

South SuburbsWarehouse / Distribution 40,186,428 754,770 498,622 1.2% 6.7% 9.2% $3.97 0 0 0Manufacturing 43,314,506 221,011 107,237 0.2% 6.6% 7.4% $6.09 33,000 33,000 0General 1,167,630 0 0 0.0% 0.0% 0.0% $0.00 0 0 0Total industrial 84,668,564 975,781 605,859 0.7% 6.5% 8.2% $4.40 33,000 33,000 0

I-57 Corridor Warehouse / Distribution 20,667,475 -96,017 3,171 0.0% 8.8% 8.8% $3.79 0 0 0Manufacturing 9,454,414 -17,911 -15,464 -0.2% 3.6% 3.6% $6.25 0 0 185,000General 275,905 28,405 28,405 10.3% 55.3% 55.3% $0.00 0 0 0Total industrial 30,397,794 -85,523 16,112 0.1% 7.6% 7.6% $3.81 0 0 185,000

I-80 Corridor Warehouse / Distribution 57,984,028 2,648,977 3,898,134 6.7% 5.0% 5.9% $4.21 1,618,575 1,958,509 6,406,401 Manufacturing 15,821,275 92,038 73,371 0.5% 5.4% 5.4% $7.42 0 0 202,812General 135,070 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 73,940,373 2,741,015 3,971,505 5.4% 5.1% 5.8% $4.33 1,618,575 1,958,509 6,609,213

I-55 Corridor Warehouse / Distribution 68,230,815 279,245 1,003,565 1.5% 5.8% 8.5% $5.09 89,887 504,143 2,784,273 Manufacturing 12,277,888 241,560 414,352 3.4% 2.6% 7.2% $6.35 0 0 0General 54,200 0 0 0.0% 26.2% 26.2% $0.00 0 0 0 Total industrial 80,562,903 520,805 1,417,917 1.8% 5.3% 8.3% $5.18 89,887 504,143 2,784,273

I-88 Corridor Warehouse / Distribution 37,074,672 1,408,932 1,420,175 3.8% 4.9% 8.1% $4.40 1,078,846 1,223,846 1,472,425 Manufacturing 22,651,181 -119,751 5,017 0.0% 4.9% 6.0% $4.97 0 0 43,000General 124,340 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 59,850,193 1,289,181 1,425,192 2.4% 4.9% 7.3% $4.50 1,078,846 1,223,846 1,515,425

North DuPage County Warehouse / Distribution 46,154,822 -865,091 -667,001 -1.4% 6.4% 9.4% $5.05 0 89,000 1,451,044 Manufacturing 33,285,673 95,634 108,477 0.3% 3.8% 5.9% $6.07 0 0 0General 12,690 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 79,453,185 -769,457 -558,524 -0.7% 5.3% 8.0% $5.27 0 89,000 1,451,044

Fox Valley Warehouse / Distribution 18,049,021 -474,953 -712,147 -3.9% 7.4% 10.5% $4.05 0 0 0 Manufacturing 17,446,771 -69,409 186,419 1.1% 3.0% 3.3% $5.04 0 299,520 430,696General 0 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 35,495,792 -544,362 -525,728 -1.5% 5.3% 6.9% $4.25 0 299,520 430,696

North Kane County Warehouse / Distribution 15,250,346 -116,302 -140,674 -0.9% 14.9% 15.9% $5.02 0 82,922 1,109,143 Manufacturing 14,850,953 -30,542 142,228 1.0% 4.4% 4.4% $4.73 0 0 156,400General 13,200 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 30,114,499 -146,844 1,554 0.0% 9.7% 10.2% $4.95 0 82,922 1,265,543



47

Chicago | Q2 2016

Inventory (s.f.)

Quarterly total net

absorption(s.f.)

YTD total net

absorption(s.f.)

YTDtotal net


Total vacancy

(%)

Total availability

(%)


rent ($ p.s.f.)


(s.f.)

YTDcompletions

(s.f.)

Underconstruction

(s.f.)

McHenry County Warehouse / Distribution 10,630,867 55,711 -11,893 -0.1% 1.8% 4.3% $4.63 0 0 0 Manufacturing 18,858,696 -71,637 150,769 0.8% 19.2% 19.6% $3.58 0 0 0General 0 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 29,489,563 -15,926 138,876 0.5% 12.9% 14.0% $3.71 0 0 0

Rockford Warehouse / Distribution 10,320,576 -9,920 48,696 0.5% 8.4% 12.1% $3.24 0 0 0 Manufacturing 13,617,911 -58,941 -74,343 -0.5% 12.2% 12.4% $3.36 0 0 0General 0 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 23,938,487 -68,861 -25,647 -0.1% 10.6% 12.3% $3.33 0 0 0

I-39 Corridor Warehouse / Distribution 13,716,499 50,867 28,267 0.2% 5.5% 7.7% $3.92 0 0 978,120 Manufacturing 18,166,489 4,270 229,140 1.3% 5.1% 7.2% $3.03 0 210,000 0General 34,450 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 31,917,438 55,137 257,407 0.8% 5.3% 7.4% $3.35 0 210,000 978,120

Northwest Indiana Warehouse / Distribution 9,544,984 297,840 259,936 2.7% 11.3% 12.1% $3.93 159,813 159,813 38,121 Manufacturing 21,249,968 362,048 377,048 1.8% 8.1% 8.9% $3.24 300,000 300,000 0General 0 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 30,794,952 659,888 636,984 2.1% 9.1% 9.9% $3.54 459,813 459,813 38,121

Southeast Wisconsin Warehouse / Distribution 28,545,291 -121,202 -570,851 -2.0% 7.6% 8.7% $4.60 601,491 683,391 200,696 Manufacturing 24,546,010 30,265 746,850 3.0% 2.8% 4.1% $3.29 0 629,585 0General 43,624 0 0 0.0% 0.0% 0.0% $0.00 0 0 0 Total industrial 53,134,925 -90,937 175,999 0.3% 5.4% 6.5% $4.41 601,491 1,312,976 200,696

Warehouse & Distribution 592,921,717 2,560,676 5,055,895 0.9% 7.6% 9.6% $4.88 4,236,758 6,320,580 17,067,508Manufacturing 532,806,219 809,214 2,182,166 0.4% 6.2% 7.4% $4.55 333,000 1,472,105 1,213,908General 2,290,657 68,570 68,570 3.0% 7.3% 7.3% $0.00 40,165 40,165 20,000Totals 1,128,018,593 3,438,460 7,306,631 0.6% 6.9% 8.5% $4.78 4,609,923 7,832,850 18,301,416



48

18,total include 301,416

*total underconstruction includes projects currently in sitework phase

Industrial Development Report

ChicagoQ2 2016

This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f.

Total leased at delivery (%) 63.4%

Total speculative at delivery (s.f.) 3,536,601

Total BTS at delivery (s.f.) 4,296,249

Total Owner-User at delivery (s.f.) 1,225,107

Total # of properties delivered 30

Average rental rate -

Top 5 projects delivered to date

Building RBA (s.f.) Delivery dateLeased at

delivery (%)

Saddle Creek I-80 Corridor CenterPoint Properties

1,114,575 BTS Q2 2016 100%

BridgePoint North Lake County Bridge/Wanxiang 626,848 Speculative Q2 2016 0%

First Park 94Southeast Wisconsin

First Industrial Realty Trust

601,491 Speculative Q2 2016 0%

Ridgeport bldg 2/CDC I-80 Corridor Ridge 504,000 Speculative Q2 2016 100%

Fellowes BTS I-88 Corridor Duke Realty 499,154 BTS Q2 2016 100%

Total pre-leased (%) 49.0%

Total speculative under construction (s.f.) 7,217,134

Total BTS under construction (s.f.) 4,789,109

Total Owner-user under construction (s.f.) -

Total # of properties UC 40

Average rental rate -

Top 5 projects currently under construction

Building RBA (s.f.) Delivery date Pre-leased (%)

Mars/Wrigley I-80 Corridor CenterPoint Properties

1,388,200 BTS Q1 2017 100%

3M BTS I-39 CorridorVenture One

Real 978,120 BTS Q3 2016 100%

Panattoni I-55 Corridor Panattoni 787,499 Speculative Q1 2017 0%

Hillwood Spec I-80 Corridor Hillwood 746,772 Speculative Q3 2016 100%

Batory Foods I-80 Corridor Batory Foods 678,000 BTS Q4 2016 100%

Historical deliveries

Spec or BTSOwner/developerSubmarket

Owner/developer Spec or BTSSubmarket

Under construction

12,006,243Vertical construction s.f. (excludes projects in sitework phase)

Under construction in-depth

Upcoming deliveries by year (s.f., excludes YTD completions)

New deliveries

Completions in-depth

7,832,850Total delivered YTD (s.f.)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

2010 2011 2012 2013 2014 2015 2016

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2016 2017

BTS Speculative

Source: JLL Research 49

About JLL

JLL (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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www. jll.com.

JLL ResearchJLL's research team delivers intelligence, analysis, and insight through market leading reports and services that illuminate today's commercial real esatate 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 countrieds, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advanatage for our clients and drives successful strategies and optimal real estate decisions.

Copyright 2016 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 IP, Inc. Jones Lang LaSalle Brokerage, Inc.,

Christian [email protected]+1 312 228 2020

Chad [email protected]+1 773 458 1405

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Paul [email protected]+1 773 458 4108

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