US CAPITAL TRENDS INDUSTRIAL

MAY 18 US CAPITAL TRENDS INDUSTRIAL Deal activity for the industrial sector suffered a setback in May but volume is still up sharply for the year. Sales volume is well ahead of the pace set in 2016 and 2017, though the peaks of 2015 are still a little distant. $4.5b -29% 10.8% Transaction volume YOY volume change YOY price change 14 12 10 8 6 4 2 0 $b Monthly Transaction Volume & Pricing Entity Portfolio Individual RCA CPPI Ind 140 120 100 80 60 40 20 0 It is not clear yet if this monthly decline is a function of caution finally coming to the industrial market, or a change in where the market is transacting. The industrial sector has been one bright spot in the commercial property market over the last year. As expectations on interest rate increases led investors to underwrite new acquisitions with more caution, deal volume fell in many other sectors. Looking at deal activity by market tier, it is the larger markets where the slowdown was the most pronounced. Deal volume fell 48% YOY in the 6 Major Metros but 15% YOY in the secondary and tertiary markets. For the year to date, deal activity is still ahead of last year for these smaller markets. 150% 100% 50% 0% -50% Year-Over-Year Volume Change This unequal growth for the year has led to revisions to historical trends. Last month we reported that deal volume had fallen 11% YOY for April but this decline has been revised to a 24% YOY increase in activity. The Exeter Mapletree US Industrial portfolio closed in April but with so many of the assets located in smaller, less informationally-efficient markets, details on the transaction only came to light recently. -100% 8.0% Cap Rates All Industrial Warehouse Flex The decline in deal volume for May is a story for both flex and warehouse assets. On a percentage basis flex assets fell more, down 49% YOY. Warehouse assets dropped 22%. 7.5% Cap rates continue to compress for the industrial sector. Cap rates overall were down 40 bps from a year earlier to hit 6.4% in May. The average warehouse cap rate stood at 6.4% versus 6.6% for flex assets. 7.0% 6.5% '13 '14 '15 '16 '17 '18 12-mth trailing cap rates In This Issue: We look at the cap rate trends, top buyers and sellers, and investor composition in the industrial single tenant market. 2018 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision. 1

01Q4 US CAPITAL TRENDS INDUSTRIAL Trends in the Single Tenant Market Single tenant industrial properties are most often investments based on a net leased structure which makes the cash flows from these assets an attractive bond alternative. Uncertainty on interest rates may cause challenges for these investments. 10.0% Single Tenant Cap Rates Multi Tenant The Federal Reserve raised the fed funds rate in mid- June and has signaled an intention to raise rates two additional times this year. This action is creating an expectation that bond rates will be increasing. 9.0% 8.0% Net leases to single tenants avoid some leasing market risks but also do not give as much upside to investors. A buildup of inflationary pressure is leading to the Fed action and if both inflation and the 10yr UST push up higher than the current levels, investors looking at such single tenant industrial investments will likely want higher cap rates before investing. 7.0% 6.0% '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 12-mth trailing cap rates Still, one should not expect a one-to-one increase in single tenant cap rates and the 10yr UST. The forces driving interest rate increases should reduce the cash flow risks presented by the occupiers of single tenant assets. The spread between these rates should narrow if ongoing interest rate increases are a function of stronger economic growth. The average single tenant industrial cap rate stood at 6.3% in Q1 18, but some of the most notable deals posted much lower cap rates. Amazon and FedEx are two important pieces of e-commerce infrastructure and over the last 12 months such assets have achieved cap rates that look more like the levels one might see for CBD offices in places like Manhattan and San Francisco. Buyer Composition Past 12 Mths Single Tenant Multi Tenant 4% 13% 10% 11% 36% 22% 21% 19% 22% User/Other Private Listed/REITs Institutional/Fund Cross-Border 41% Top Single Tenant Players Past 12 Mths Major Single Tenants Buyers Sellers Notable Deal Activity Past 12 Mths Property Location SF $/sf Cap Rate Amazon Distribution Center North East, MD 1,150,000 97.4 5.1% Amazon Distribution Ctr DFW6 Coppell, TX 1,100,000 89.0 5.5% Amazon Distribution Lebanon, TN 1,016,070 74.8 5.4% FedEx San Jose, CA 206,642 300.0 4.0% FedEx Ground - Durham Durham, NC 236,976 189.7 5.7% FedEx Ground Sorting Facility Wayne, NJ 163,253 265.0 5.8% FedEx Miami Miami, FL 103,337 360.5 4.3% Blackstone Caisse de Depot Brennan Invmt Group BREIT National Retail Props Gramercy Plymouth Industrial REIT CDH Fund Mapletree Commercial LBA Realty Cabot Properties TPG Capital Exeter DRA Advisors Westcore Properties Pure Industrial RE Trust Global Securitizn Svcs Brennan Invmt Group Scannell Properties Carter Validus MC REIT I 0 50 100 0 25 50 By number of properties; does not include properties bought or sold strictly for occupancy 2

Market Table All Industrial Industrial Transactions Reported Closed Flex Warehouse All Industrial Volume Price Volume Price Volume Price YTD through May 18 $m # Props $/sf Avg Cap Rate $m # Props $/sf Avg Cap Rate $m # Props $/sf Avg Cap Rate Mid-Atlantic Midwest Northeast Southeast Southwest West Baltimore 101.7 11 125 406.8 35 70 508.5 46 87 DC 4.8 1 48.7 4 582 53.5 5 533 DC MD burbs 166.4 14 204 247.9 21 85 414.3 35 114 DC VA burbs 216.6 12 191 5.7% 96.8 11 76 313.4 23 161 5.7% Philadelphia 138.6 18 124 337.2 41 62 475.8 59 71 Pittsburgh 15.6 3 45 22.5 4 63 38.1 7 54 Richmond/Norfolk 45.0 5 56 90.4 12 62 135.4 17 59 Tertiary Mid-Atlantic 78.1 14 65 8.4% 852.1 49 64 6.5% 930.2 63 64 7.2% Total 766.7 78 119 7.6% 2,102.5 177 68 6.5% 2,869.2 255 77 7.2% Chicago 302.9 34 67 1,225.1 121 70 1,528.0 155 69 Cincinnati 25.1 2 68 140.9 14 40 166.0 16 44 Cleveland 3.6 1 48.3 8 47 51.9 9 47 Columbus 40.5 3 30 627.4 37 52 6.6% 667.9 40 51 6.6% Detroit 101.3 15 103 8.0% 165.0 24 94 7.5% 266.3 39 99 7.7% Indianapolis 47.3 12 264.9 14 60 6.2% 312.2 26 60 6.2% Kansas City 24.8 11 172.2 9 55 196.9 20 56 Minneapolis 174.6 24 81 8.6% 196.3 27 59 370.9 51 69 8.6% St Louis 26.0 8 74 214.8 22 26 240.8 30 29 Tertiary Midwest 200.1 22 33 593.3 82 38 793.4 104 37 Total 946.2 132 56 8.3% 3,648.2 358 53 6.9% 4,594.4 490 53 7.3% Boston 215.9 11 177 5.0% 262.7 24 75 478.6 35 100 5.0% Hartford 2.9 1 2.9 1 Long Island 61.9 12 142 167.6 41 138 229.5 53 141 Manhattan 12.0 1 6.6 1 18.6 2 1,806 No NJ 238.8 23 103 417.1 36 95 5.5% 655.9 59 98 5.5% NYC Boroughs 93.5 7 417 4.4% 706.6 61 351 6.9% 800.1 68 360 5.7% Stamford 4.5 1 13.3 1 17.8 2 125 Westchester 9.2 2 108 88.3 5 102 97.5 7 103 Tertiary Northeast 70.1 12 58 242.0 26 53 312.1 38 54 Total 705.8 69 133 5.3% 1,907.1 196 104 6.1% 2,612.9 265 111 5.7% Atlanta 98.9 10 71 8.0% 620.2 51 54 5.9% 719.1 61 56 7.0% Broward 57.6 7 151 169.5 18 98 227.1 25 108 Charlotte 68.8 9 83 203.0 20 59 271.7 29 63 Jacksonville 193.1 7 94 7.2% 225.7 6 65 418.8 13 76 6.8% Memphis 6.0 1 240.5 20 24 246.5 21 25 Miami 56.7 8 168 180.3 23 109 7.3% 237.0 31 121 7.3% Nashville 19.3 2 132.1 18 73 151.4 20 73 Orlando 66.4 12 105 69.8 11 67 8.4% 136.2 23 83 8.4% Palm Beach 19.6 3 124 69.5 8 137 89.0 11 133 Raleigh/Durham 102.0 12 77 59.6 9 24 161.7 21 38 Tampa 40.4 4 70 104.8 13 54 145.2 17 58 Tertiary Southeast 221.4 28 55 1,045.3 100 48 5.8% 1,266.7 128 50 6.0% Total 950.0 103 81 7.4% 3,120.4 297 52 6.5% 4,070.4 400 57 6.8% Austin 239.3 8 119.7 10 359.0 18 Dallas 306.8 39 62 7.3% 901.8 66 84 7.0% 1,208.6 105 81 7.1% Denver 54.2 10 112 596.0 51 109 4.8% 650.1 61 109 5.5% Houston 229.1 23 107 6.3% 358.4 43 83 5.8% 587.6 66 97 6.1% Phoenix 379.9 26 135 337.4 29 83 717.3 55 104 San Antonio 98.4 8 98.4 8 Tertiary Southwest 85.3 12 69 341.3 50 47 426.6 62 53 Total 1,294.6 118 110 6.7% 2,752.9 257 84 6.4% 4,047.6 375 91 6.5% East Bay 207.8 19 217 5.7% 318.3 28 175 526.1 47 192 5.6% Inland Empire 137.8 25 138 997.5 66 121 1,135.3 91 123 5.2% Las Vegas 283.7 31 165 6.4% 249.0 17 108 532.8 48 126 6.3% Los Angeles 326.5 34 182 4.9% 1,293.3 132 173 4.4% 1,619.8 166 174 4.6% Orange Co 253.5 36 244 5.6% 287.4 32 161 540.9 68 192 5.6% Portland 40.1 9 90 115.7 13 104 155.8 22 100 Sacramento 52.0 5 215 139.0 22 79 191.0 27 105 Salt Lake City 67.0 11 76 160.3 20 24 227.3 31 30 San Diego 134.4 15 160 212.2 18 156 346.6 33 157 San Francisco 231.4 9 484 206.2 12 374 437.5 21 428 San Jose 516.6 32 277 6.2% 232.1 16 174 748.7 48 229 6.2% Seattle 206.8 22 149 431.1 51 153 5.4% 637.9 73 152 5.4% Tertiary West 211.0 32 129 821.4 68 80 6.6% 1,032.4 100 87 6.6% Total 2,668.6 280 195 5.9% 5,463.5 495 130 5.5% 8,132.1 775 146 5.7% Total Total US 7,332.1 780 116 6.6% 23,121.0 2,457 77 6.3% 30,453.1 3,237 86 6.4% 3

Selected Recent Transactions Property Name SF Price Owner/Buyer Address Year Built $/sf Seller Location Notes Qualifier Broker Mid-Atlantic 2086 Corporate Center Drive W 1,369,177 $99,500,000 2086 Corporate Center Dr W 2007 $73 Tobyhanna, PA Warehouse approximate Plymouth Meeting Conf Center 141,261 $39,252,600 1 IMS Dr 2010 $278 Plymouth Meeting, PA Flex approximate Mapletree Commercial from Gulf Finance House from Eastdil Secured Exeter Exeter by Midwest North Valley Commerce Center B, Reno, NV Ace Hardware RSC 534,040 $57,360,000 10 Enterprise Pkwy 2014 $107 West Jefferson, OH Warehouse approximate Granite REIT from Duke Realty Yusen Logistics 212,158 $24,734,500 1300 Busse Rd 2014 $117 Elk Grove Village, IL Warehouse approximate NYK Line from Duke Realty Northeast 207 Clay Avenue 250,000 $17,400,000 207 Pond Ave 1988 $70 Middlesex, NJ Warehouse approximate Beacon Sales 84,848 $7,300,000 393 Manley St 1974 $86 West Bridgewater, MA Warehouse approximate Joseph Saadia from Cabot Properties from Silverman Group Rhino Capital Southeast Supervalu Distribution Center 787,500 $66,410,000 1141 SW 12th Ave 1973 $84 Pompano Beach, FL Warehouse confirmed Fortress from Supervalu Inc Shaw Dist Cntr Northport Building C 1,001,508 $56,500,000 595 Northport Pkwy 2018 $56 Port Wentworth, GA Warehouse confirmed Griffin Capital EAR from Clayco Southwest Hub 25 421,499 $74,000,000 601 E 64th Ave 2016 $176 Denver, CO Warehouse confirmed JP Morgan from CBRE Westfield Dev Co by Southwest Products 159,384 $15,035,000 11690 N 132nd Ave 2013 $94 Surprise, AZ Warehouse approximate Pacific Acquisitions by Lee & Associates from Southwest Products by Cushman & Wakefield Ferguson Enterprises 102,080 $14,820,000 1840 W Oxford Ave 1984 $145 Sheridan, CO Warehouse approximate by LBA Realty from CBRE Cadence Cap Investments West Supervalu Distribution Center 693,282 $121,000,000 5300 Sheila St 1979 $175 Los Angeles, CA Warehouse confirmed Rexford Industrial REIT from Supervalu Inc North Valley Commerce Center B 1,060,723 $81,100,000 9460 N Virginia St 2016 $76 Reno, NV Warehouse confirmed Prism Realty Corp by Newmark Knight Frank from Panattoni Development by JLL 4

Jim Costello, Senior Vice President Contact Robert M. White, Jr., Founder & President Alexis Maltin, Manager, Analytics Elizabeth Szep, Manager, Analytics Michael Savino, Analyst About Real Capital Analytics Real Capital Analytics (RCA) is the authority on the deals, the players and the trends that drive the commercial real estate investment markets. Covering all markets globally, RCA delivers timely and reliable data with unique insight into market participants, pricing and capital flows. The most active investors, lenders and advisors depend on RCA s market intelligence to formulate strategy and to source, underwrite and execute deals. An industry pioneer since 2000, RCA has offices in New York, San Jose, London and Singapore. For more information, visit: rcanalytics.com About Capital Trends Capital Trends reports analyze and interpret trends in the global real estate market using RCA s comprehensive data. US Capital Trends is a monthly edition comprising an overview of the U.S. market and separate reports on the five main property types. Asia Pacific, Europe and Global Capital Trends are published quarterly. Methodology Data based on properties and portfolios $2.5m and greater unless otherwise stated. For the most current data and even more options for analysis, visit: rcanalytics.com US Capital Trends Copyright 2018 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision. It is a violation to photocopy or reproduce any part of this publication, or forward it electronically, without first obtaining permission from RCA. For permission, please contact us at reports@rcanalytics.com. To obtain a corporate license for your office, contact us at service@rcanalytics.com.