Indianapolis MARKETBEAT. Industrial Q Economy. Market Overview INDIANAPOLIS INDUSTRIAL

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1 Economic Indicators MSA Employment MSA Unemployment U.S. Unemployment Market Indicators Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 INDIANAPOLIS INDUSTRIAL Overall Vacancy Q3 17 Q k k 3.3% 3.3% 4.4% 3.9% 12-Month Forecast Numbers above are quarterly averages; August 2018 data used to represent Q for Overall Vacancy Overall Absorption Under Construction Average Asking Rent* *Rental rates reflect net asking $psf/year Q3 17 Q % 4.7% 2.3M 4.1M 7.0M 8.9M $3.76 $ % 7% 6% 5% 4% 3% 2% 1% Net Absorption Asking Rent, $ PSF 12-Month Forecast 0% Historical Average = 5.2% $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Economy In the third quarter 2018, the economy continued to create an environment for industrial commercial real estate success. Employment conditions remained relatively tight, but have been on the uptick recently. After hitting the lowest unemployment rate since December 2000 in April (2.8%) the rate has risen to 3.3%. Rising unemployment rates have adversely affected the labor force participation rate. Indiana peaked in July with 66.1% participation rate and fell to 65.3% in August, but still remained above national participation rate of 62.7%. Industrial sector jobs have steadily increased year-over-year (YOY). Construction sector jobs continued to be added at a blistering pace with 9.7% growth YOY followed by Trade, Transportation, and Utilities jobs at 1.8% YOY and Manufacturing jobs at 1.7% YOY. Production has followed suit with the growth of jobs. After a small dip in May, the Industrial Production Index (INDPRO) reached an all-time high nationally in August ( ), up 4.9% YOY. Additionally, the Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI), a solid indicator for industrial space demand, reported a reading of 61.3% in August, signifying strong growth in manufacturing for the 25 th consecutive month. Strong production output, continued strength in new orders, improvements in supply chain delivery performance, and better utilization of existing inventory accounts were all cited as reasons for an increase in PMI. From a consumer standpoint, evaluation of present-day conditions remains extremely favorable, according to The Conference Board. The Consumer Confidence Index experienced a significant increase in August and yet another increase in September to The large increase has set expectations for healthy consumer spending as we approach the holiday season and could help drive demand for additional warehouse space for retailers. Market Overview After just an average first half of the year, the industrial market capitalized on leasing momentum in the third quarter 2018, with positive 4.6 million square feet (msf) directly absorbed. This mark put amongst the top five markets in the country with regards to net occupancy gains. trailed only the Inland Empire (8.6 msf), Atlanta (7.0 msf), Dallas/Ft. Worth (5.6 msf), and Central New Jersey (5.3 msf). Locally, the Southwest submarket was the largest beneficiary of positive activity posting a net absorption total of positive 1.8 msf for the quarter. Other top-performing submarkets include the Northwest (1.2 msf) and the East (630,569 sf). cushmanwakefield.com

2 Modern Bulk facilities continued to be the product type of choice for occupiers, posting positive 2.8 msf absorbed followed by Medium Distribution facilities with positive 902,000 square feet (sf) and Traditional Bulk facilities with positive 688,000 sf. Much attention will be on absorption numbers during the final quarter of the year. The market has already surpassed the annual absorption total from 2017 and has a legitimate shot at breaking the record high for annual absorption level set in THERE ARE CURRENTLY 29 PROJECTS TOTALING NEARLY 9.0 MSF UNDER CONSTRUCTION WITH JUST OVER 33% PRELEASED. Seven newly constructed buildings were delivered during the third quarter 2018 totaling 2.6 msf. The South submarket experienced multiple deliveries, with three buildings finishing construction totaling 1.1 msf. This total included The Opus Group s new 496,000-sf speculative building named Greenpointe Logistics Center. The industrial market will continue to see strong construction numbers to round out Currently, 29 projects totaling nearly 9.0 msf are under construction with just over 33% of space preleased. The third quarter 2018 was defined by demand outpacing supply which not only caused large absorption numbers and sinking vacancy rates, but also produced a 4.2% YOY growth in rental rates. We expect that supply and demand will find equilibrium in the coming quarters causing rental rate growth to slow slightly, but remain at a healthy pace for the remainder of Vacant Space by Product Type PERCENTAGE OF TOTAL VACANT SPACE Q % 5% 8% Office Showroom 3% 16% 14% Manufacturing Employment INDIANAPOLIS-CARMEL-ANDERSON MSA Medium Distribution Traditional Bulk Modern Bulk Manufacturing Flex MSA Manufacturing Employment (Ths., SA) Source: U.S. Bureau of Labor Statistics Historical Direct Net Absorption INDIANAPOLIS CONTINUES THE STREAK OF STRONG ABSORPTION Outlook The industrial market capitalized on leasing momentum in the third quarter 2018, with positive 4.6 msf absorbed. Seven newly constructed buildings were delivered during the third quarter 2018 totaling 2.6 msf leaving 29 projects totaling nearly 9.0 msf still under construction. We expect that supply and demand will find equilibrium in the coming quarters causing rental rate growth to slow slightly, but remain at a healthy pace for the remainder of Net Absorption (MSF) Q 2018 cushmanwakefield.com I 2

3 SUBMARKET TOTAL BLDGS INVENTORY SUBLET VACANCY DIRECT VACANT DIRECT VACANCY RATE CURRENT DIRECT NET ABSORPTION YTD DIRECT NET ABSORPTION TOTAL OCCUPIED UNDER CONSTRUCTION OVERALL ASKING RENT* Downtown ,024,274 60,000 83, % -19,186 4,614 10,940,606 0 $5.33 East ,295, ,691 1,537, % 630, ,637 40,758, ,000 $3.43 Northeast ,785,020 27, , % -83,251 96,291 13,111,062 1,000,000 $7.92 North 160 6,943, , , % 20, ,038 6,682, ,656 $4.57 Northwest ,133, ,845 3,146, % 1,221,640 1,414,636 52,987,339 2,370,336 $4.04 Southeast ,802,517 5, , % 141, ,374 18,586,149 0 $6.38 South ,558, ,433, % 542, ,510 15,125,020 1,368,625 $3.83 Southwest ,493, ,193 3,369, % 1,819,333 3,514,180 78,123,550 3,198,720 $3.65 West ,546,988 66,000 40, % 288, ,310 15,506, ,980 $5.09 PROPERTY TYPE Office Showroom ,096, , , % -69, ,426 13,256,654 30,000 $6.67 Medium Distribution ,970, ,637 1,714, % 901,765 1,245,270 54,255,543 2,042,490 $4.35 Traditional Bulk ,993, ,960 1,455, % 688, ,476 34,538,729 0 $3.50 Modern Bulk ,710, ,135 5,798, % 2,802,119 4,629,183 81,911,453 6,425,457 $3.43 Manufacturing ,117, , % 247, ,013 56,531, ,720 $3.37 Flex 241 8,367,491 67, , % -8,018-16,778 8,009,483 98,650 $8.30 Transport 79 3,327, , % 0 0 3,317,419 0 $5.60 2, ,583,035 1,604,267 10,761, % 4,562,202 7,125, ,821,187 8,974,317 $3.99 *Industrial asking rents converted to NNN Key Transactions Q (±150,000 SF) PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET 1100 Whitaker Rd, Plainfield 414,424 Geodis Logistics Renewal Southwest 701 Columbia Rd, Plainfield 382,654 Alan Ritchey Direct Southwest 1101 Whitaker Rd, Plainfield 379,332 Geodis Logistics Renewal Southwest 221 S Franklin Rd, 256,000 Spartan Logistics Renewal East 6484 W 300 N, Mt. Comfort 240,000 Quest Nutrition Direct East 700 Council Dr, Lebanon 222,756 Risk Management Solutions Direct Southwest 3003 Reeves Rd, Plainfield 202,500 Sataria Acquisitions Sublease West 225 Transfer Dr, 177,600 FedEx Supply Chain Renewal Southwest Industrial Deliveries 2018 (±425,000 SF) PROPERTY 831 N Graham Rd/Greenpointe Logisticts Center, Greenwood 1415 Collins Rd, Newgistics Build-to-Suit, Greenwood 2856 S Ronald Reagan Parkway, Easton Cascade, Plainfield Upcoming Industrial Deliveries (±400,000 SF) SF TENANT TRANSACTION TYPE SUBMARKET 495,977 Speculative Q3 18 South 446,500 Build-to-Suit - Newgistics Q3 18 South 430,000 Build-to-Suit - Bauer, Easton Cascade Q3 18 Southwest PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET State Rd 44 & Bartram Pkwy/Franklin Tech Park, Franklin 933,825 Speculative Q1 19 South 3124 Plainfield Rd/GreenPark III, Plainfield 702,000 Speculative Q4 18 Southwest 1705 Midwest Dr/Allpoints Midwest 10A, Plainfield 495,888 Speculative Q1 19 Southwest Albert S White Dr/Fishback Creek II, Whitestown 410,424 Speculative Q4 18 Northwest cushmanwakefield.com I 3

4 INDUSTRIAL SUBMARKETS INDIANAPOLIS Cushman & Wakefield One American Square, Suite 1800, IN USA cushmanwakefield.com Matt Niehoff Senior Research Analyst Direct Mitch Ostrowski Research Analyst Direct About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit or on Twitter Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

5 Methodology Cushman & Wakefield s quarterly estimates are derived from a variety of data sources, including its own proprietary database and historical data from third party data sources. The market statistics are calculated from a base building inventory made up of industrial properties deemed to be competitive in the Central Indiana marketplace. Older buildings unfit for occupancy or ones that require substantial renovation before tenancy are not included in the competitive inventory. The inventory is subject to revisions due to resampling. Vacant space is defined as space that is available immediately or imminently after the end of the quarter. Sublet space still occupied by the tenant is not counted as available space. The figures provided for the current quarter are preliminary and all information contained in the report is subject to revisions based on additional data received. New Statistical Series To ensure the highest level of data integrity, Cushman & Wakefield periodically undertakes a comprehensive, quantitative and qualitative, review of all industrial inventory in the Central Indiana marketplace. During Q1 2017, Cushman & Wakefield Research conducted an extensive review of the industrial market and transitioned to a new data series. Explanation of Building Characteristics Office Showroom: Buildings designed to meet the needs of distributors or sales agents who do not require high ceilings or rail service. Tenants are typically under 25,000 sf, but sizes can vary. Common features include ceiling heights of ; few docks and/or drive-indoors; and office space of 20% to 25%. Medium Distribution: Buildings designed to meet the needs of intermediate-sized distributors. Tenants typically range from 12,000 sf to 75,000 sf. Common features include 14' 20' ceilings; docks and/or drive-in doors; office space of 10% to 20%; and, occasionally, rail service. Traditional Bulk: Buildings constructed prior to 1995 designed for large-scale distributors. Tenants typically are over 100,000 sf, with sizes varying. Common features include 20' 28' ceilings; multiple dock height doors with levelers and seals; office space of 1% to 5%; and, often, rail service. Modern Bulk: Buildings constructed since 1995 designed for large-scale distributors. Tenants typically are over 100,000 sf, with sizes varying. Common features include 28' clear ceiling heights or higher; multiple dock height doors with levelers and seals; office space of 1% to 5%; and, often, rail service. Flex: Buildings generally distinguished by office space ranging from 25% to 100%. Tenants typically are under 30,000 sf, but sizes can vary considerably. Common features include 12' 16' ceilings; high parking ratios; common dock areas; individual service doors; full window lines; and, landscaping. Manufacturing: Buildings designed for production, research, and development of goods. Tenant size varies from 5,000 SF to over 1 msf. Common features include 16' 24' ceilings; heavy power capacity; processed gas; floor drains; cranes; 1% to 10% office space; and, rail service. Transport: Buildings designed for vehicle upkeep, repair and storage. Tenants typically are 5,000 to 20,000 sf. Common features include 16' 24' ceilings. About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit or on Twitter Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. cushmanwakefield.com I 5