Industrial Market Poised to Begin 2015 on a Strong Note

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1 Q INDUSTRIAL MINNEAPOLIS-ST. PAUL INDUSTRIAL MARKET REPORT Industrial Market Poised to Begin 2015 on a Strong Note MARKET INDICATORS Q Buoyed by one of the healthiest local economies in the country, - s industrial real estate market is preparing itself for a strong Vacancy decreased slightly during the fourth quarter of 2014, dropping from 8.8 percent in Quarter Three to 8.6 percent in Quarter Four. Absorption was strong at 812,452 square feet, bringing annual absorption to a robust 2,011,292. A total of 535,412 square feet of multi-tenant construction was completed during the quarter, and 69 percent was vacant upon completion. We are tracking an additional 3.4 million square feet of space under construction, both build-to-suit and speculative space. VACANCY NET ABSORPTION RENTAL RATE VACANCY Percent Vacant 20% 15% 13.1% 12.5% 11.5% 10.4% 10.5% 9% 9.4% 10% 8.6% 8.6% 5% Within the existing space market, bulk warehouse properties continue to be the most desired product type across all submarkets; however, office warehouse and office showroom assets are gaining momentum. For bulk warehouse product, 32 clear heights are the ideal, though any property with at least 18 clear heights is generating leasing activity among office warehouse or office showroom users. Assets with 16 clear heights or less are receiving less attention from prospective tenants, especially as more modern industrial space is delivered to the market. Generally speaking, the spread between asking rents and starting rents tightened somewhat in 2014, as both macro- and micro-economic fundamentals improved across the entire market. Additionally, landlords were able to reduce the amount of concessions offered on new leases, and the percentage of existing tenants renewing their leases increased as economic uncertainty has somewhat dissipated among decision makers NET ABSORPTION Q4 ABSORPTION SF Absorbed 3,000,000 2,000,000 1,000,000 0 (1,000,000) (2,000,000) (3,000,000) 2,011,292 1,410,063 1,369,692 1,677,707 1,355, ,877 1,261,325 (928,872) (2,430,461) SF Absorbed 300, , , ,586 Airport/South of the River 199, ,348 Southwest 103,447 East 223,751 West/ west

2 OVERVIEW (CON T.) While the construction boom continues, given the demand for materials for other regional projects including the new Vikings stadium in, lead times are getting stretched out, causing costs to rise. Some materials, like concrete, for example, are even being rationed out to builders and material vendors. An improving economy has reduced the number of qualified bids that are received in response to new project proposal requests, as many builders resources are already allocated to other projects. On the heels of a number of new speculative projects being delivered to the market late last year and those projects still under construction, leasing and sales activity is expected to be robust in early 2015 as developers look to exit their positions once their property is stabilized. Construction activity is also expected to continue its momentum this year with the announcement of several additional new projects forecasted to break ground in the first two quarters of 2015 despite increasing constructions costs. It should also be noted that once the majority of the new space currently under construction gets delivered in early- to mid-2015, a strengthening market for landlords could stall with the glut of new space hitting the market. Once this space is absorbed however, which is expected to occur quickly, the scales will likely tip back in the favor of landlords. WEST/NORTHWEST The West/west has consistently been one of the most active industrial space markets in. Absorption was strong at 223,752 square feet during Quarter Four and 529,362 square feet for the year. Vacancy decreased to 7.9 percent from 8.2 percent in Quarter Three. Aside from the significant development activity in Otsego, the submarket s existing leasing market fundamentals are currently performing similarly to the recent historical trend in terms of space absorption, rent levels, and landlord concessions and incentives. Contract lease rates are landing within 90 percent to 95 percent of asking rates, with a modest amount of free rent and tenant improvement allowances being offered on most new and three to five year lease renewals. In addition, our market professionals have explained that warehouse rents in the West/west still have room to grow, though it is difficult to predict where rents will go if the incoming supply of speculative product outweighs demand. The West/west saw the completion of a number of new speculative construction projects and the announcement of several new build-to-suit facilities. Addressing the lack of suitable product required by many industrial space users that desire to locate operations along the West/ west s I-94 corridor, developers including Duke Realty, CSM, Scannell, United Properties, First Industrial, Liberty Property Trust, and Ryan Cos. added over 1.34 million square feet to the submarket in 2014, and there is currently an additional 2.78 million square feet under construction. For example, Duke Realty closed on three build-to-suit projects totaling over 900,000 square feet for its Gateway Business Center in Otsego. Duke Realty closed on three build-to-suit projects totaling over 900,000 square feet at Gateway Business Center in Otsego.

3 In early 2014, Ruan Transportation Management Systems contracted with Duke to build a 300,000-square-foot distribution facility that the company began occupying during the fourth quarter of In July 2014, furniture manufacturer Room & Board also committed to Duke s business park by signing a lease to have a 485,000 square foot facility built to accommodate the company s growth plans. Lastly, two months after the Room & Board lease was announced, another furniture manufacturer Blu Dot announced that it too will have Duke build a 150,000-square-foot distribution center in the park, as they are outgrowing their current facility in nearby Rogers. Both Room & Board and Blu Dot are expected to take occupancy of their new facilities during the first half of Each build-to-suit project will feature 24 or 32 clear heights and 45 x 50 column spacing, as well as state-of-the-art building mechanical and fire/life safety systems. Duke acquired the land in 2006, and planned a 118-acre industrial park with 1.4 million square feet of available space. Today, they only have about 18 acres and 230,000 square feet remaining for build-to-suit and lease opportunities. The additional space that was added to the submarket in late 2014, as well as the space that is scheduled to deliver in 2015, is already impacting lease negotiations. Our submarket experts are reporting a general increase in deal completion times, as firm decision-making has slowed across the board in the submarket. This is likely the result of firms waiting to see how the landscape of the space market in the West/ west has and will continue to change as more new bulk distribution space and more new tenants are added to the submarket. Nilfisk, Archway, and Wow Logistics are all looking for space in the submarket, each with a requirement of more than 200,000 square feet. Although it is taking longer for firms to make decisions related to their real estate, 75 percent of tenants with expiring leases are choosing to sign renewals. Lease negotiations are most favorable to landlords of showroom space sized 10,000 square feet or less, as this space market has tightened in recent months in the face of increased demand from users wishing to locate near the submarket s newest tenants. ern Stacks Redevelopment in Fridley Phase I Site Plan The completion of several construction projects highlighted the last half of 2014 for the and East submarkets. On the heels of St. Jude Medical s decision to lease space in a modern building developed by Trammel Crow in Roseville a year ago, a number of developers immediately broke ground on similar product. The most notable of these new projects is the redevelopment of a Superfund site in Fridley. In May 2014, Hyde Development celebrated the groundbreaking of ern Stacks, a $100 million public/private venture that plans to build office/industrial buildings totaling 1.7M square feet across the 122-acre site that was once the home of ern Pump Company, which produced gun turrets and barrels for the US Navy during World War II. Part of Phase I of the project, the Twin Cities largest infill commercial redevelopment project, will be completed during the first quarter of 2015, when a 213,000-square-foot bulk warehouse property with 32 clear heights will be completed. Although no lease has been signed, the developer has indicated a high level of interest with four to five prospects and plans to announce a new tenant in early The entire project is expected to take about four years to complete. MINNEAPOLIS NORTH/ST. PAUL EAST The and East submarkets absorbed 199,320 square feet and 103,447 square feet respectively during the fourth quarter of The vacancy rate stands at 7.6 percent in the submarket, down slightly from Quarter Three s rate of 7.7 percent. Vacancy in the smaller East submarket, which includes the Midway area of, is also low at 7.7 percent.

4 Other projects that were completed in late 2014 include Meritex s speculative 129,655-square-foot Highcrest Distribution Center adjacent to St. Jude Medical s aforementioned distribution center in Roseville. Also in Roseville, IRET Properties completed the redevelopment of the former Smurfit-Stone Container Corp. site by building a new 220,556 square foot industrial building; 192,000 square feet of which is currently being marketed for lease. In, a partnership between Interstate Partners and The Port Authority is redeveloping a 4-acre site at the Beacon Bluff Business Park on the city s East Side with a 58,000-square-foot building that is expected to be completed in February. Moventas, a Finnish-based designer and manufacturer of renewable technology products, will lease about half of the newly constructed space. Also in, the Port Athority has a partnership with United Properties to build on the site of the former Saints Stadium. The plans call for 190,000 square feet of industrial space with 24 ceilings. AIRPORT/SOUTH OF THE RIVER There was steady activity in the Airport/South of the River submarket as 130,586 square feet was absorbed during the quarter, bringing the annual total to 377,258 square feet. Vacancy is 9.5 percent, down from 10.2 percent in Quarter Three. The small Airport/South of the River submarket may not have generated the headlines its neighboring submarkets made last year, but the space market s fundamentals remain strong. The spread between asking rents and actual rents remains tight across both showroom and bulk warehouse spaces, as comparable spaces within the submarket remain hard to find. Landlords of desirable product are decreasing rent concessions on new leases, and our team is reporting that about 80 percent of lease renewals. being executed in the submarket are starting at base rent amounts that are escalated from the previous term. In response to the healthy supply and demand conditions, developers Scannell Properties and Setzer Properties have announced plans to construct new product in the submarket. Scannell s project proposes the development of an industrial park, South Logistics Park, on 176 acres of land just east of I-35 in Lakeville that could have enough room to accommodate 2.2 to 3 million square feet of industrial space. Setzer plans to construct a three-building complex for FedEx Freight in Lakeville that will allow FedEx Freight to close one of its two Roseville locations and address their long-term growth concerns as the new 94,000-square-foot facility will have room for 250 jobs as compared to the 125-job capacity of the soon-to-be vacated Roseville facility. Leasing activity of existing space within these submarkets is currently within their historical range, however, in the long-term, leasing velocity is expected to increase as large chunks of newly constructed space are absorbed. Currently, larger users such as Coborns, Steamworks, and EXL Labs are all seeking at least 80,000 square feet of space within these submarkets. A number of local and regional tenants are also shopping the submarkets for space requirements less than 80,000 square feet. In addition to increased construction activity, asking rents for these newly constructed modern warehouses are pushing pre-recession levels, and are in the $4.95 per square foot range plus amortized tenant improvements. Also, we are seeing more long-term leases (10+ years) being signed compared to the same time last year, as an improving economy is allowing users the clarity to execute their long-term business plans. This tightening of fundamentals is also enabling landlords to remain competitive by only offering two to three months of free rent on 10-year or more leases, instead of two to three months of free rent on five year or less leases. Setzer s 94,000 SF shipping facility for FedEx Freight in Lakeville Aside from the proposed developments in Lakeville, Mendota Heights is also a hub of activity within the submarket, with Scannell and United Properties both completing projects there in late Scannell built a 71,933-square-foot speculative flex building near the confluence of I-494, I-35E and Hwy 55, and United Properties completed a 90,000-square -foot project in the city.

5 One tenant rumored to be looking for space in the submarket has the ability to create headlines and thrust the Airport/South of the River submarket into the spotlight. Speculation is brewing that Amazon.com will select a site in the southeast metro along the I-35 corridor in Fueling this speculation is Ryan Companies 120-acre site at the intersection of I-35 and Country Road 2 near Elko New Market, in which they are working with the city and the county to study the impact of developing a large industrial park with the ability to construct between 1.5 million and 2 million square feet of warehouse space large enough to accommodate Amazon s space needs. If Amazon does indeed occupy space in this submarket, it is expected that other users will want to enter the submarket, and demand for modern industrial space will increase to the point where developers will be able to achieve the rents necessary to construct new product, similar to what the West/west submarket has been experiencing over the last few years. SOUTHWEST Activity was strong in the Southwest submarket during During the fourth quarter 155,348 square feet was absorbed with a total of 545,735 square feet absorbed for the year. Vacancy in the Southwest remains high compared to the rest of the market at 10.7 percent. In many ways, the Southwest industrial space market mirrors the Airport/South of the River industrial submarket. Very little difference exists between each submarket s access to major arterial highways, land available for development, and clusters of amenities, resulting in two submarkets that exhibit very similar space market fundamentals. Asking rents are within a tight range depending on product type. Bulk warehouse space with 24 clear heights is leasing for an average rate of $4.25 per square foot; for product with 32 clear heights, the average market lease rate is $4.50 per square foot. Market rent for associated office space within these product types is in the $ $10.00 per square foot range. Our submarket experts note today s average lease for bulk warehouse space in the submarket is a 50,000-square-foot lease, with in-place rents of $8.50 per square foot for office space and $4.00 per square foot for warehouse space. These average leases include two to three months of free net rent, with a $15 - $20 PSF tenant improvement allowance on office space for new lease agreements. Construction activity in the Southwest during the last half of 2014 was focused mostly on three projects. Both United Properties and Capp Industries are building warehouse spaces in the submarket. United Properties project in Chanhassen, Powers Pointe, broke ground as a fully speculative project, but will be nearly 100 percent leased when it s completed in early In December 2014, Federal Package announced it will lease 96,000 of the 140,800 square feet within the 24 clear height, multi-tenant building. Federal Package expects to move into the new space in the first quarter of 2015, after vacating space it occupies in neighboring Chaska. Federal Plastics, an affiliate of Federal Package, leased the remaining 44,000 square feet. At the same time, Capp Industries is expected to complete their speculative 32 clear height bulk warehouse project in Shakopee, Capp Warehouse II, which will add an additional 121,000-square-feet to the submarket s space inventory. Also in Shakopee, Ryan Companies is developing a new 135,000-square-foot production and warehouse facility for Bayer CropScience. Bayer plans to transfer operations and personnel from a 115,000-square-foot space it occupies less than a mile away into this new $15 million project by early Federal Package will lease approx. 70 percent of United Properties Powers Pointe in Chanhassen.

6 SIGNIFICANT LEASE AND SALES ACTIVITY LEASE ACTIVITY TENANT BUILDING NAME ADDRESS CITY SUBMARKET SF LEASED TYPE COKeM International Canterbury Distribution Center 901 W 217th St Shakopee Southwest 119,972 New PAE 9150 W 217th St 9150 W 217th St Lakeville Airport/South of the River 119,328 Expansion Process Display Louisiana Distribution Center st Ave New Hope West/west 112,000 Expansion Goodwill/Easter Seals Interstate Distribution Center 7051 W Broadway Ave Brooklyn Park West/west 97,000 New Federal Package Inc Powers Pointe 8100 Powers Blvd Chaska Southwest 96,000 New McKesson Diamond Lake Industrial Center I Wilfred Ln N Rogers West/west 90,000 Expansion Clearfield, Inc. Perbix Interstate Distribution Center cross Business Park Winnetka Ave Brooklyn Park West/west 70,771 New Highway 610 & Highway 169 US AutoForce Pilot Knob Distribution Center 2360 Pilot Knob Rd Eagan Brooklyn Park West/west 70,000 New Airport/South of the River 50,535 Expansion Team Industries I-94 Distribution Center Industrial Blvd Rogers West/west 49,729 New Value Merchandise 12th Avenue Distribution Center th Ave N Plymouth West/west 44,200 New RTI International Metals Saint Paul Industrial Properties # County Rd C2 W Roseville 36,000 New Federal Plastics Powers Pointe 8100 Powers Blvd Chaska Southwest 44,000 New Indecomm Global Services Energy Park Corporate Center Energy Ln Saint Paul East 31,720 New Magazine Distributors Mounds View Business Park - B 5275 Quincy St Mounds View 28,021 New HD Supply Maintenance th Ave th Ave Brooklyn Center West/west 26,359 Renewal PeopleNet Communications Crosstown Distribution Center Shady Oak Rd Eden Prairie Southwest 26,284 Expansion Electric Motor 113 NE 27th Ave 113 NE 27th Ave 23,930 New Alternators, Starters & Parts Inc Mendota Heights Industrial 1475 Commerce Dr Mendota Heights TSBL Distributing Mendota Heights Industrial 1475 Commerce Dr Mendota Heights Airport/South of the River Airport/South of the River 14,325 New 13,300 New Clearfield Inc. relocated from Plymouth to First Industrial Realty Trusts Inc. s Interstate Distribution Center, leasing 70,711 square feet at the 142,290 square foot property.

7 SALES ACTIVITY BUILDING ADDRESS CITY BUYER SELLER SUBMARKET SF PRICE Alliant Techsystems 4700 Nathan Ln N Plymouth CPA : Woodale Dr 2100 Woodale Dr Woodbury 7033 Central Avenue East 7033 Central Ave Ne Fridley Tech West th Ave N Plymouth Boulder Lakes V Rapala USA Distribution Center West 86th Street 2985 Ames Crossing Rd 935 Aldrin Dr Eagan 5230 Quincy Street 5230 Quincy St Westpoint Business Center th St W Bloomington Industrial Park Blvd Greenfield Partners Cummins Power Generation Inc AX Tech West LP Liberty Property Trust PRICE PSF DATE West/west 191,336 $42,000,000 $220 Nov-14 RREEF Funds East 113,256 $19,594,000 $173 Oct-14 Murphy Warehouse Co Eagan CPA :18 Interstate Partners Mounds View Plymouth Vascular Solutions 6464 Sycamore Ct Osseo Winnetka Distribution Center 4948 Winnetka Ave N New Hope First Industrial Realty Trust Greenfield Partners Greenfield Partners 62NDS2 Westpoint LLC Vascular Solutions Inc One Liberty Properties West/west 406,000 $18,700,000 $46 Dec-14 Onward Investors West/west 106,500 $15,700,000 $147 Dec-14 Dart Transit Company RREEF Funds RREEF Funds Baceline Investments Investors Real Estate Trust Exchange Realty Inc Airport/South of the River Airport/South of the River Airport/South of the River 60,500 $14,425,000 $238 Nov ,000 $12,018,985 $60 Nov ,818 $10,300,000 $58 Oct ,598 $8,334,000 $24 Oct-14 West/west 161,304 $7,800,000 $48 Dec-14 West/west 79,702 $7,200,000 $90 Dec-14 West/west 121,225 $7,200,000 $59 Nov Phalen Boulevard 295 Phalen Blvd Saint Paul Health Partners Chris Norgren East 77,000 $6,100,000 $79 Dec-14 Phillips & Temro 9700 W 74th St Eden Prairie Aero System Engineering Inc 2100 Old Highway 8 west International Square 410 Oak Grove Parkway Future Quantum Graphics 358 Fillmore Ave E 2100 Old Hwy 8 Nw Olson Memorial Hwy 410 Oak Grove Pkwy Shady Oak Rd Saint Paul New Brighton Golden Valley Vadnais Heights Eden Prairie Star Realty Finance AIC Ventures Greenfield Partners Gonyea Commercial Props Innovize Inc Quantum Graphics Inc Brennan Investment Group JV Gatehouse Bank Aero Systems Engineering Inc RREEF Funds Southwest 81,119 $6,044,379 $75 Nov-14 East 49,695 $4,950,000 $100 Nov ,416 $4,486,471 $39 Oct-14 Welsh Companies West/west 90,000 $4,300,000 $48 Dec-14 Joanne M Lindgren The 614 Company - Robert Greenberg 71,000 $3,850,000 $54 Dec-14 Southwest 60,110 $3,800,000 $63 Oct-14 Encore Park K-Tel Dr Minnetonka Ronald Leafblad David Bruce Southwest 141,340 $3,705,000 $26 Oct-14 Shady Oak 9995 W 69th St Eden Prairie 2400 Pilot Knob Road 2400 Pilot Knob Rd 5275 Quincy Street 5275 Quincy St 1395 Commerce Drive Water Tower Circle University Avenue Business Center Bell Tower Commerce Center 5000 Winnetka Avenue 1395 Commerce Dr Water Tower Cir 7201 University Ave Ne Broadway St W 5000 Winnetka Ave N Linn Star Transfer Eagan 7 Scruples LLC Michael Jones Mounds View Mendota Heights Plymouth Greenfield Partners Sigma Beauty Stone Source Artis REIT Southwest 59,538 $3,500,000 $59 Dec-14 RREEF Funds Associated Bank Amerilab Technologies Inc Fridley UABC LLC Wells Fargo Osseo New Hope Opportunity Advisors Greg Thom Airport/South of the River Airport/South of the River 36,430 $3,300,000 $91 Dec-14 66,836 $3,277,000 $49 Oct-14 53,101 $2,920,000 $55 Oct-14 West/west 49,920 $2,750,000 $55 Oct-14 47,433 $2,575,340 $54 Nov-14 Lone Star Funds West/west 64,499 $1,879,568 $29 Oct-14 Geneva Organization West/west 209,627 Oct-14

8 Ramsey 94 Andover Ham 97 Lake 10 Albertville St. Michael Hanover Greenfield Maple Plain Minnetrista Mound Spring Park Rogers 55 Medina Orono Shorewood Excelsior Victoria Otsego Independence Corcoran Loretto Tonka Bay 12 Elk River West/west Wayzata Minnetonka Deephaven Greenwood 5 Chaska Chanhassen Maple Grove Plymouth Dayton Southwest INDUSTRIAL UNDER CONSTRUCTION Eden Prairie Champlin 610 Osseo 694 Hopkins Anoka New Hope Golden Valley Edina Brooklyn Park Crystal St. Louis Park 100 Bloomington Brooklyn Center Coon Rapids Robbinsdale 35W 94 Richfield Spring Lake Park Fridley 65 Blaine Mounds View New Brighton Columbia Heights Saint Anthony 55 Airport/ South of the River Circle Pines Lexington Shoreview Arden Hills Lauderdale 35E Roseville 94 Eagan Columbus Lino Lakes West Mendota Heights 35W Centerville Oaks Vadnais Heights Little Canada 35E Maplewood South Inver Grove Heights Gem Lake Grant White Bear Lake Willernie Stillwater 694 Pine Springs 36 Woodbury Park Forest Lake Hugo Dellwood 10 Lake Elmo Oakdale 94 East Afton Cottage Grove Scandia 5 61 OVERALL MARKET 3,380,568 SF UNDER CONSTRUCTION 2,060,504 SF SPECULATIVE 1,320,064 BUILD-TO-SUIT MINNEAPOLIS NORTH 343,000 SF 2 PROJECTS WEST/NORTHWEST 2,781,566 SF 12 PROJECTS SOUTHWEST 256,000 SF 2 PROJECTS Shakopee Apple 3 Valley 35E 77 Rosemount INDUSTRIAL UNDER CONSTRUCTION PROPERTY NAME ADDRESS/INTERSECTION CITY SUBMARKET SF DEVELOPER ern Stacks 4800 E. River Road Fridley 213,000 Hyde Development Highcrest Distribution Center 2400 Terminal Rd W Roseville 130,000 Meritex Dean Lakes Business Park 169 & County Rd 83 Shakopee Southwest 135,000 Ryan Cos. Capp Warehouse II th Ave E Shakopee Southwest 121,000 Capp Industries Gateway Business Center V Hwy. 101 & I-94 Otsego West/west 485,000 Duke Realty Gateway Business Center III Hwy. 101 & I-94 Otsego West/west 150,064 Duke Realty Fedex Distribution Center Brockton Ln N Rogers West/west 350,000 Scannell Properties Red Rock Building County Rd 81 & 85th Ave N Maple Grove West/west 320,000 United Properties Star Distribution Center Diamond Lake Rd Rogers West/west 271,500 CSM Corporation Dayton Distribution Center I Holly Land N. Dayton West/west 247,004 Kinghorn Logistics Hub David Koch Ave & Brockton Lane Liberty Property Trust Rogers West/west 220,000 Scannell Properties 610 Commerce Center Louisiana Ave. N. & 93rd Ave. N Brooklyn Park West/west 202,000 CSM Corporation Wurth Adams Facility Highway 610 & Highway 169 Brooklyn Park West/west 170,000 United Properties Launch Park Rogers State Hwy 101 & 147th Ave N Rogers West/west 168,000 Launch Properties Launch Park Rogers State Hwy 101 & 147th Ave N Rogers West/west 30,000 Launch Properties Cross Business Park Highway 610 & Highway 169 Brooklyn Park West/west 168,000 United Properties

9 Market Statistics SUBMARKET TOTAL SF DIRECT VACANT SF % VACANT DIRECT SUBLEASE VACANT SF % VACANT W/SUBLEASE LOW-HIGH ASKING RATE Q ABSORPTION YTD ABSORPTION AIRPORT/SOUTH OF THE RIVER Bulk Warehouse 5,365, , % 0 4.1% $4.08-$ , ,519 Office Showroom 3,450, , % 4, % $4.78-$8.85 (52,484) 45,862 Office Warehouse 9,255, , % % $4.82-$ (61,123) Totals: 18,071,950 1,707, % 4, % $4.74-$ , ,258 MINNEAPOLIS NORTH Bulk Warehouse 5,130, , % 13, % $5.00-$ , ,888 Office Showroom 4,345, , % 31, % $4.83-$ , ,572 Office Warehouse 17,377,137 1,246, % 16, % $4.60-$ ,891 75,427 Totals: 26,853,236 2,045, % 61, % $4.69-$ , ,887 SOUTHWEST Bulk Warehouse 5,792, , % 71, % $5.08-$9.42 (12,744) 44,453 Office Showroom 7,171, , % 108, % $5.09-$ , ,423 Office Warehouse 15,042,075 1,300, % 188, % $5.33-$ , ,859 Totals: 28,006,223 3,004, % 368, % $5.20-$ , ,735 ST. PAUL EAST Bulk Warehouse 9,041, , % 0 6.5% $4.36-$9.00 (147,898) (40,015) Office Showroom 2,480, , % 21, % $4.58-$ ,447 47,238 Office Warehouse 12,364, , % 103, % $4.81-$ , ,827 Totals: 23,886,029 1,827, % 125, % $4.71-$ , ,050 WEST/NORTHWEST Bulk Warehouse 13,312,527 1,278, % 50, % $4.48-$ , ,722 Office Showroom 5,654, , % 8, % $4.98-$9.35 (3,160) 198,709 Office Warehouse 21,458,338 1,384, % 39, % $4.77-$ ,030 41,931 Totals: 40,425,456 3,194, % 99, % $4.77-$ , ,362 TOTAL ALL MARKETS Bulk Warehouse 38,642,309 3,238, % 134, % $4.62-$ , ,567 Office Showroom 23,103,142 2,751, % 175, % $4.93-$9.44 8, ,804 Office Warehouse 75,497,443 5,791, % 349, % $4.86-$ , ,921 Totals: 137,242,894 11,780, % 659, % $4.85-$ ,452 2,011,292 The above table is summarized data on multi-tenant industrial buildings greater than 20,000 square feet. Not included are single-tenant or owner-occupied buildings.

10 Market Statistics (EXPANDED MARKET) SUBMARKET TOTAL SF DIRECT VACANT SF % VACANT DIRECT SUBLEASE VACANT SF % VACANT W/SUBLEASE LOW-HIGH ASKING RATE Q ABSORPTION YTD ABSORPTION AIRPORT/SOUTH OF THE RIVER Bulk Warehouse 17,171, , % 91, % $5.43-$ , ,694 Office Showroom 4,691, , % 4, % $4.98-$9.06 (61,031) 41,001 Office Warehouse 10,896, , % 3, % $5.52-$ (40,225) Totals: 32,758,297 2,110, % 98, % $5.32-$ , ,470 MINNEAPOLIS NORTH Bulk Warehouse 20,304, , % 80, % $5.51-$ , ,005 Office Showroom 6,119, , % 33, % $5.51-$ , ,319 Office Warehouse 19,671,495 1,246, % 16, % $4.67-$ ,891 78,627 Totals: 46,096,248 2,317, % 130, % $5.07-$ , ,951 SOUTHWEST Bulk Warehouse 23,250,930 2,704, % 359, % $5.09-$ , ,595 Office Showroom 8,691, , % 108, % $5.22-$ , ,423 Office Warehouse 17,942,273 1,329, % 188, % $5.23-$ , ,897 Totals: 49,884,726 5,020, % 657, % $5.20-$ , ,915 ST. PAUL EAST Bulk Warehouse 19,614, , % 42, % $5.30-$8.96 (191,125) (51,636) Office Showroom 4,026, , % 21, % $7.12-$ , ,419 Office Warehouse 20,641, , % 103, % $4.76-$ , ,927 Totals: 44,282,455 1,999, % 167, % $5.31-$ , ,710 WEST/NORTHWEST Bulk Warehouse 37,225,176 2,158, % 524, % $4.63-$ ,262 1,068,537 Office Showroom 8,002, , % 8, % $5.09-$9.22 (7,160) 202,095 Office Warehouse 25,505,617 1,601, % 39, % $4.84-$ ,840 8,272 Totals: 70,733,674 4,302, % 572, % $4.83-$ ,942 1,278,904 TOTAL ALL MARKETS Bulk Warehouse 117,566,476 6,814, % 1,097, % $5.06-$ ,678 2,005,195 Office Showroom 31,531,960 2,890, % 176, % $5.35-$ , ,257 Office Warehouse 94,656,964 6,046, % 352, % $4.97-$ , ,498 Totals: 243,755,400 15,750, % 1,627, % $5.09-$8.99 1,306,390 3,518,950 The above table is summarized data on multi- and single-tenant industrial buildings greater than 10,000 square feet. Owner-occupied properties are also included.

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12 485 offices in 63 countries $2.1 billion USD in annual revenue 15,800 professionals and staff 1.46 billion* square feet under management $75 billion USD in total transaction value * Square footage includes office, industrial and retail property under management. Residential property is excluded from this total. All statistics are for Baker Road, Suite 400 Minnetonka, MN DIRECT Accelerating success.