Q 0 INDUSTRIAL BIG BOX THE BIG BOX REPORT A SNAPSHOT OF S BULK WAREHOUSE DISTRIBUTION TRENDS Heightened Expectations MARKET SNAPSHOT > > The Chicago big box inventory base consists of 40 facilities totaling 13 million square feet. > > 70 percent of this inventory is institutionally owned while the remaining 30 percent is owner occupied. > > The highest concentration of inventory is located in the I- and I-80/Joliet Corridors, which have 34.9 million square feet and 31.3 million square feet of big box facilities, respectively. > > Conversely, the Chicago North, McHenry County and North Suburbs have no such facilities. MARKET INDICATORS Chicago Metro 1Q 0 Q 0 VACANCY 11.70% 10.79% ABSORPTION -1,311,30,064,5 CURRENT BIG BOX VACANCIES 18 16 14 14 10 8 6 5 4 1 0 300-500K 500-750K 750K+ NET ABSORPTION > > Net absorption in Metropolitan Chicago s big box facilities measured.1 million square feet in the second quarter, a huge improvement from the negative 1.3 million square feet reported in the first. Stronger tenant interest during the quarter caused the improvement. VACANCY AND SUPPLY > > Tremendous second quarter occupier demand forced vacancies down while net absorption was positive. > > The vacancy rate at the end of the second quarter totaled 10.79 percent, a remarkable 91- basis-point decline from the first quarter rate of 11.70 percent. Occupier demand swelled during the quarter, causing the Metropolitan Chicago big box vacancy rate to fall. > > Users looking for large blocks of space (over 750,000 square feet) will find only one existing option available, while tenants requiring space between 300,000 square feet to 500,000 square feet will find 14 options. > > Second quarter available big box supply fell over one million square feet from the first quarter total to 14. million square feet. The I- Corridor witnessed the largest decline in its available stock, dropping from 4.6 million square feet vacant in the first quarter to 3.7 million square feet in the second quarter. Conversely the I-80/Joliet Corridor vacant supply incurred the highest second quarter jump, rising to 5.0 million square feet, up from 4. million square feet reported in the first quarter. > > There are three first generation spaces available with vacancies over 300,000 square feet, however, they have been on the market (on average) for more than four years. LEASING AND SALE ACTIVITY > > One build-to-suit lease transaction for a home improvement retailer totaling 1.6 million square feet was signed during the second quarter, propelling total leasing activity to 4.7 million square feet. This was considerably greater than the. million square feet posted in the prior quarter. CenterPoint Properties will construct the build-to-suit facility at the CenterPoint Intermodal Center in Joliet. Even when removing this transaction from consideration, leasing activity in existing product was still significantly higher than the first quarter result. www.colliers.com/chicago
RESEARCH & FORECAST REPORT Q 0 INDUSTRIAL BIG BOX After seeing no speculative big box construction in the Chicago area since 009, a new 604,100-SF project in underway in Romeoville. LEASING SALE ACTIVITY (CONTINUED) > > The second largest transaction was consummated by a major consumer products company which leased 716,300 square feet at 1401-1465 W. Normantown Road in Romeoville. The manufacturer now occupies over.0 million square feet in the I- Corridor. > > A rare sale was completed in the second quarter when Wirtz Beverage Company took occupancy of a 600,000-square-foot build-to-suit warehouse/distribution facility at 3333 S. Laramie Avenue in Cicero. The national distributor consolidated from several buildings in the O Hare market. In comparison, no sales were recorded in the first quarter. > > Investment sale activity increased in the second quarter. CenterPoint Properties purchased three bulk warehouse distribution facilities (part of a nine-building multi-state portfolio) from Benderson Development. The whole package contained.8 million square feet and sold for $136 million dollars with a going-in capitalization rate of 7 percent. CONSTRUCTION ACTIVITY > > One of the largest build-to-suit construction projects to commence in the Metropolitan Chicago market occurred in the second quarter. A major home improvement retailer engaged CenterPoint Properties to build a 1.6 million-square-foot distribution center at CenterPoint Intermodal Center in Joliet. > > Two buildings were delivered to the I- South market in the second quarter adding 6,800 square feet to Metropolitan Chicago s big box inventory. This compares favorably to no deliveries reported in the first quarter. Both buildings were build-to-suit developments, which has been the trend for the past two years. > > The aforementioned construction activity that occurred in the I- South submarket accounted for almost half of its.0 million square foot base. > > Although recent construction deliveries were build-to-suit in nature, construction of one large speculative building commenced in the second quarter in the I- Corridor. DCT Industrial Trust is building 604,100 square feet at DCT Park in Romeoville. The building is scheduled for completion by the end of 0. WINDHAM LAKES SOUTHWEST 1401-1406 Normantown Road Romeoville, IL HISTORICAL TAKING NET EFFECTIVE RENTS $3.50 $3.3 $3.3 $3.0 $3.3 $.95 $.97 $3.00 $.78 $.50 $.00 $1.50 $.69 HISTORICAL CONSTRUCTION DELIVERIES (300,000+ SQUARE FEET) Millions 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00.00 1.00 0.00 005 006 007 008 009 010 011 0 BTS 3.81 5.39 3.6 3.0 3.09 1.48.66.91 Spec 7.44 8.78 9.31 8.36 0.46 0.00 0.00 0 $1.00 $0.50 $0.00 005 006 007 008 009 010 011 0 RENTS > > Net effective rental rates in big box product moved up from the first quarter rent of $.54 net to the second quarter weighted average of $.69 net. The population on net effective rents captured during the quarter ranged from $.33 net to $3.05 per square foot. P. COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT Q 0 INDUSTRIAL BIG BOX Chicago at a Glance ECONOMIC NEWS > > The Chicago region has one of the most diverse economies on the globe. According to World Business Chicago, it is the third largest area in the country, with over 4.0 million people employed with a regional product (GRP) of $495 billion. > > Chicago s unemployment rate was 8.6 percent in May which was slightly higher than the national average of 8. percent. However, the unemployment rate was up 1.1 percentage points from one year ago. > > The Institute for Supply Management stated that Chicago s business barometer PMI registered 5.9 in June, which is significantly below the 6. posted in March. Although lower Chicago s figure was above the national volume of 49.7. A reading above 50 indicates expansion to the regional economy. > > According to Illinois Association of Realtors, home sales jumped.4 percent from this time one year ago to 9,156 home sales. The report also states that median home prices moved up 1.7 percent from June 011. > > Illinois 011 exports totaled more than 64.5 billion, up 8.98 percent from 010 volume. This volume places Illinois as sixth largest U.S. exporter. HISTORICAL UNEMPLOYMENT RATE Illinois US 10 Percentage (%) 8 6 4 0 005 006 007 008 009 010 011 0 Source: Bureau of Labor Statistics TRANSPORTATION > > Chicago is home to six Class I railroads. Intermodal traffic has increased steadily since 008 when 9.88 million containers/trailers were shipped via rail in the United States. At the end of 011, 11.89 million units were hauled by rail. > > The Illinois highway system contains three coast-to-coast interstates (I-70, I-80 and I-). Also included within Illinois are three north-south interstate systems (I-39, I- and I-57) and five east-west interstate systems (I-4, I-64, I-74, I-88, I-). > > O Hare International Airport is the second largest airport in the country. For the first two months of 0, 19.7 thousand tons of cargo passed through Chicago s O Hare and Midway Airports. > > Illinois has more than 1,100 navigational miles of waterways which provide a direct link to the Gulf of Mexico and the Atlantic Ocean. P. 3 COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT Q 0 INDUSTRIAL BIG BOX SECOND QUARTER 0 MARKET STATISTICS Market Total Inventory New Supply Under Construction Came on Market Available Vacancy Rate Leased Sold Net Absorption Central DuPage County 6,9,774 0 0 977,9 14.% 15,080 0 15,080 Chicago North 0 0 0 0 0.00% 0 0 0 Chicago South,0,49 0 0 384,000 18.70% 0 0 0 DeKalb County 3,4,099 0 0 0.00% 0 0 0 Elgin I- Corridor 4,074,89 0 0 103,4 54,636 6.5% 0 0-103,4 Far South Suburbs 9,175,158 0 0,350 573,033 6.5% 0 0 -,350 Fox Valley 15,357,107 0 0 1,388,8 9.04% 388,469 0 6,1 I- North 1,651,741 0 0 1,3 11.13% 97,914 0 97,914 I- South 1,9,005 6,805 0 0.00% 0 600,000 6,805 I-39 Corridor 1,918,365 0 0 156,013 8.13% 0 0 0 I- Corridor 34,864,330 0 966,64 980,765 3,695,337 10.60% 1,844,468 0 863,703 I-80/Joliet Corridor 31,317,898 0 1,618,048 849,564 5,039,975 16.09% 1,618,048 0-849,564 Lake County,69,8 0 0 0.00% 0 0 0 McHenry County 0 0 0 0.00% 0 0 0 North Suburbs 0 0 0 0.00% 0 0 0 Northwest Suburbs 700,000 0 0 00,000 30,65.75% 0 0-00,000 O'Hare 1,500,3 0 0 95,796 6.38% 0 0 0 South Suburbs,849,88 0 0 615,616 1.60%,000 0,000 Metro Chicago Totals 0,4,76 6,805,584,67,187,63 13,684,649 11.36% 4,418,979 600,000 1,754,5 Northwest Indiana 1,0,749 0 0 0 93,000 4.79% 0 0 0 Rockford Area 1,0,014 0 0 0 0 0.00% 0 0 0 Southeastern Wisconsin 7,588,591 0 0 0 0,954 5.% 310,000 0 310,000 Grand Totals 131,884,116 6,805,584,67,187,63 14,8,603 10.79% 4,78,979 600,000,064,5 The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. P. 4 COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT Q 0 INDUSTRIAL BIG BOX INDUSTRIAL SUBMARKET TOP TRANSACTIONS MAP SECOND QUARTER 0 TRANSACTIONS Map Tenant/Buyer Size (sq. ft.) Address Type 1 Major Home Improvement Retailer 1,618,048 CIC Joliet Park BTS Lease Kimberly Clark 716,318 1401-1465 W. Normantown Road, Romeoville New Lease 3 Wirtz Beverage Company 600,000 3333 S. Laramie Avenue, Cicero BTS Sale SOUTHEAST WISCONSIN 5 offices in 6 countries on 6 continents United States: 147 Canada: 37 Asia: 36 Australia/New Zealand: 165 Latin Ameria: 19 EMEA: 118 > $1.8 billion in annual revenue > 1.5 billion square feet under management* > Over,300 professionals * The combination of Colliers International and FirstService results in. billion under management (nd largest in the world) LAKE COUNTY McHENRY COUNTY 60 www.twitter.com/collierschicago ELGIN I- 7 68 WEST SUBURBS 14 6 Lake Cook Rd. SUBURBS/COOK 1 41 Lake Michigan www.colliers.com/chicago 59 O'HARE 58 DeKALB COUNTY 0 31 I-88 / FOX VALLEY Elgin-O'Hare Expy. 0 CENTRAL DuPAGE 64 3 1 I- 64 I- SOUTH 41 34 59 88 East-West Tollway I- CORRIDOR 7 3 171 88 34 43 43 3 50 SOUTH SUBURBS 50 SOUTH 0 57 - WEST INDIANA RESEARCHER: George A. Cutro Vice President Research Services Colliers International Chicago 650 N. River Road, Suite 11-100 Rosemont, IL 60018 TEL +1 847 698 895 george.cutro@colliers.com I-80 / JOLIET CORRIDOR 80 80 0 1 5 10 miles 1 FAR SOUTH SUBURBS Accelerating success. www.colliers.com/marketname