KNOWLEDGE REPORT 4.4% $ , M AT A GLANCE MARKET STATS. Vacancy Remains Steady at Historic Low

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1 KNOWLEDGE REPORT Industrial Research & Forecast Report Colliers International Cleveland Vacancy Remains Steady at Historic Low The Cleveland industrial market recorded 504,917 square feet of positive net absorption during the final quarter of, bringing the year-to-date total to approximately 2.3 million square feet. The overall market vacancy rate has remained unchanged at 4.4 percent since mid- due to the addition of new supply to the inventory and decreased leasing and owner-user sales activity. A net gain in occupancy of 6.6 million square feet over the past two years has reduced the vacancy rate by a full percentage point. The market remains very tight with all of the Cleveland and Akron area submarkets posting single-digit vacancy rates. By property type, the freestanding, light industrial category posted a 50 basis point drop in vacancy during the year to 4.0 percent as half the year s total net absorption was attributable to transactions in this sector. Warehouse/distribution s vacancy decreased to 5.7 percent, a 40 basis point change. The most active submarkets during the year included Downtown, South Cleveland, West Cleveland, Medina County and Stark County, all of which posted positive net absorption between 305,000 and 389,000 square feet. Although slow to respond to the decrease in supply, developers have increased the amount of construction in the pipeline during each quarter of. Projects totaling 3.8 million square feet are now underway across the region. One speculative construction project was delivered this quarter; the 136,000-square-foot Seasons Business Center 3 and only a small percentage of the total current construction activity in the market is speculative. The average overall market weighted asking rental rate is $4.31 per square foot, triple net, a year-over-year decline of 2.6 percent. Warehouse/ distribution rents also decreased by 2.2 percent to $3.89 per square foot. This decline is probably more attributable to the lack of higher quality space available on the market as options for occupiers diminish. The lack of good quality freestanding buildings, though, continue to drive asking rates up in this sector. At year end, the average asking rent was $4.08 per square foot, a decrease from last quarter, but up 4.6 percent, year-over-year. Market Indicators Relative to prior period Q1 2018* VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** * Projected, relative to prior period ** Warehouse rents MARKET STATS AT A GLANCE 4.4% $4.31 VACANCY RATE 504,971 ABSORPTION (SF) MARKET ASKING RENT (Psf/Yr, NNN) 3.8M UNDER CONSTRUCTION (SF)

2 Summary & Outlook The shift away from an economy dependent on manufacturing activity continues across the northeast Ohio region. While manufacturing employment grew during the initial years following the recession, job growth slowed during 2015 and as auto sales declined and steel imports cut into the region s market share. Additionally, manufacturers have been implementing automation technologies at an accelerating rate seeking greater efficiencies in an increasingly competitive global environment. That trend reversed during as employment growth in the manufacturing sector recorded a year-over-year increase of 2.6 percent. However, long term forecasts call for manufacturing employment to increasingly comprise a smaller share of the Cleveland regional labor force going forward. Future growth in the industrial sector will shift to warehousing and logistics driven by demand from e-commerce occupiers. Amazon s entry into the market with two large fulfillment centers that, upon completion, will total 1.9 million square feet is the beginning of the transition. These facilities will attract suppliers, vendors and retailers that serve the e-commerce giant. Although online sales are growing annually at double-digit rates, this component still accounts for less than 10 percent of total U.S. retail sales. This suggests that there remains substantial opportunities for growth in order to service every leg of the supply chain in the northeast Ohio region. The market continues to take a cautious approach to speculative development, as the vast majority of the 3.8 million square feet of current projects under construction are committed to an end user. As noted, one spec project delivered during the quarter and three more totaling less than 500,000 square feet are scheduled for completion in the near future. It is likely, though, the so called Amazon effect, along with the diminishing supply of available space will prompt a growing number of speculative industrial projects during Summary Statistics Cincinnati Industrial Market Cleveland Vacancy Rate 4.4% Industrial Vacancy/Absorption Net Absorption (SF) 2,000,000 1,750,000 1,500,000 1,250,000 1,000, , , , , , , Q1 Q2 Q3 Net Absorption The overall market vacancy rate has remained unchanged at 4.4% since mid- and has decreased by a full percentage point since the end of Industrial Rental Rates (NNN) $ PSF (Full Service Gross) $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Q1 Q2 Vacancy Rate Average weighted asking rental rates have declined recently across most product types, with the exception of light industrial properties, which recorded a 4.6 percent annual increase. Q Q Q1 Q2 Q3 Q1 Q2 Q3 Whse Mfg Flex Overall 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Vacancy Rate (%) Change From Q3 (basis points) 0 Industrial Employment History Net Absorption Under Construction Completions +504,917 3,806, ,765 Employment (1,000 SF) % 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Vacancy Rate (%) Asking Rents Per Square Foot Per Year (NNN) Manufacturing Trade Trans Util Unemployment Rate (U-3) 1.0% 0.0% Overall Market $4.31 Warehouse/Distribution $3.89 Flex/R&D $6.95 Employment in the Manufacturing sector is up 2.6 percent, while the entry of Amazon to the market will drive demand in the Trade and Transportation sector. Sources: Colliers Research, Xceligent, CoStar, Bureau of Labor Statistics, Moody s Analytics 2 Cleveland Research & Forecast Report Industrial Market Outlook Colliers International

3 Construction PROPERTY NAME PROJECT SIZE SUBMARKET DEVELOPER SPEC OR BTS TARGETED COMPLETION DATE Amazon Fulfillment Center North Randall 855,000 Cleveland Southeast Seefried Industrial Properties BTS 2018 Amazon Fulfillment Center Euclid 650,000 Cleveland Northeast Seefried Industrial Properties BTS Q CornerStone Business Park Spec bldg 2 200,000 Cleveland Southeast Scannell Properties Spec Q Foltz Industrial Pkwy 197,440 Cleveland Southwest Scannell Properties Spec Q Heilind Electronics 180,000 Lake County West Heilind Electronics BTS Q Carlisle Brake & Friction (expansion) 158,000 Medina County Carlisle Brake & Friction BTS Q ABB Inc 145,000 Cleveland East Weston, Inc BTS Q Venture Products 135,700 Stark County Venture Products BTS 2018 GED integrated Solutions HQ 130,000 Cleveland Southeast Geis Companies BTS Q Engle Lake Dr 125,000 Cleveland Southwest Harsax Management Co. BTS Q Fat Heads Brewery 111,141 Cleveland Southwest Fat Heads Brewery BTS Q Mantua Manufacturing Co. HQ 110,000 Cleveland Southeast Weston, Inc BTS Q Cornwall Quality Tools (expansion) 107,000 Akron Cornwall Quality Tools BTS Q Bluestone Business Center 3 75,480 Cleveland Northeast Ray Fogg Development Spec Q Notable Industrial Sales PROPERTY NAME/ADDRESS SALE DATE SALE PRICE BLDG SF BUYER SELLER BUILDING TYPE SUBMARKET & Darice Pkwy Aug-17 $40,000, ,037 Vereit Inc AIC Ventures Income Fund Whse/Dist Cleveland Southwest 4561 Prosper Rd - Mickey Thompson Sep-17 $19,500, ,765 Monmouth Real Estate Investments Geis Companies Whse/Dist North Akron 30 Foundation Place Sep-17 $10,000, ,148 AIC Ventures Whse/Dist Akron Solon Business Park Jun-17 $7,000, ,188 Kanan Enterprises Inc First Industrial Realty Trust Inc Whse/Dist Cleveland Southeast 7201 Industrial Paark Blvd Jul-17 $6,600, ,040 STORE Capital Corp Wiseco Piston Company Inc Manufacturing Lake County West 2290 W Main St Aug-17 $5,800, ,030 FleetOhio Industrial LLC Trilogy Plastics Whse/Dist Stark County 7333 Corporate Blvd Jun-17 $5,755, ,006 The Malish Corporation Metal Seal Precision Manufacturing Lake County West Richmond Rd Jul-17 $5,000, ,460 R5 Acquisition Waxman Light Industrial Cleveland Southeast 6150 Halle Dr Aug-17 $4,500,000 58,644 Jetro Cash & Carry AJD Holding Co. Light Industrial Cleveland South Plaza Dr Jul-17 $4,082, ,000 North Coast Bearings PAI Cleveland LLC Whse/Dist Cleveland Southwest Notable Industrial Leases PROPERTY NAME/ADDRESS LEASE DATE LEASE SF ASKING RATE LEASE TYPE TENANT NAME BUILDING TYPE SUBMARKET 1 American Rd Mar ,000 Inogen Light Industrial Southwest Cleveland 4211 Shuffel St NW Feb ,150 $4.00 NNN Performance Health Bulk Warehouse Stark County 5401 Baumhart Rd May ,924 $2.95 Gross Undisclosed Tenant Manufacturing Lorain West Naiman Pkwy Nov ,167 Arrow Electric Whse/Distribution Southeast Cleveland 6800 N Chestnut St Jan ,000 $3.50 NNN Wagner Logistics Whse/Distribution Portage County 2850 Gilchrist Rd Oct ,200 $3.25 NNN ASW Shipping Co Whse/Distribution Akron 4922 E 49th St Apr ,554 Charter Steel Light Industrial South Cleveland Foltz Pkwy Bldg 1 Apr ,992 $6.50 NNN Applied Industrial Technologies Whse/Distribution Southwest Cleveland Bluestone Business Park Mar-17 84,609 Amazon Whse/Distribution Northeast Cleveland Hudson Crossing Business Park May-17 83,000 $3.50 NNN Universal Screen Arts Whse/Distribution North Akron *Renewal or Expansion 3 Cleveland Research & Forecast Report Industrial Market Outlook Colliers International

4 Cleveland Industrial Submarket Data MARKET # OF BLDGS INVENTORY (SF) TOTAL AVAILABLE (SF) TOTAL VACANT (SF) TOTAL VACANCY RATE (%) SUBLEASE AVAILABLE (SF) QTRLY NET ABSORPTION (SF) YTD NET ABSORPTION AVG WTD ASKING RATES (NNN) Downtown Cleveland ,091,317 2,220,346 1,926, % 0 36, ,370 $3.02 Warehouse - Distribution 25 3,110, , , % , Manufacturing 22 6,722, , , % $3.10 Flex/R&D ,043 30,000 30, % Light Industrial ,325,371 1,540,121 1,282, % 0 36, ,970 $2.93 East Cleveland 121 8,652, , , % 22,230 41, ,325 $7.51 Warehouse - Distribution 6 812,850 57,411 57, % ,609 $3.50 Manufacturing 2 351, % Flex/R&D 54 3,719, , , % 22,230 8,775 59,747 $8.01 Light Industrial 59 3,768,277 91,656 61, % 0 32,700 78,969 $8.50 Northeast Cleveland ,110,376 2,218,152 1,795, % 0 149,768 11,467 $3.37 Warehouse - Distribution 10 2,094, , , % 0 2,586 2,187 $3.25 Manufacturing 22 9,431,661 1,017, , % 0 99, ,450 $2.86 Flex/R&D 6 220, % 0 10,635 10, Light Industrial ,363, , , % 0 36, ,805 $4.26 South Cleveland ,286,552 2,835,380 2,192, % 351, , ,724 $4.82 Warehouse - Distribution 40 5,760, , , % 281,659 22,826-67,321 $3.43 Manufacturing 15 5,043, % Flex/R&D 106 4,567, , , % 23,074-37,943-85,932 $7.11 Light Industrial ,914,499 1,390, , % 47, , ,977 $4.45 Southeast Cleveland ,918,018 4,055,336 2,214, % 491, , ,563 $5.41 Warehouse - Distribution 87 15,856,267 1,087, , % 105,124-54,140 52,763 $4.37 Manufacturing 11 1,798, ,167 93, % 93, ,967 $8.00 Flex/R&D 143 6,590, , , % 42,233-66, ,511 $6.55 Light Industrial ,673,002 1,888, , % 250,232-70, ,278 $4.79 Southwest Cleveland ,250,233 2,363,439 1,669, % 48,410-90, ,556 $4.58 Warehouse - Distribution 76 10,246,525 1,072, , % 30, ,515 $5.08 Manufacturing 16 11,670,398 43,131 43, % , Flex/R&D 72 3,302, , , % 9,450-59,493-34,014 $7.29 Light Industrial ,030, , , % 8,000-31,227 60,186 $3.43 West Cleveland ,704,741 1,455,202 1,186, % 28,000 16, ,362 $4.11 Warehouse - Distribution 28 4,085, , , % 0-26,380-83,400 $3.38 Manufacturing 14 6,784, , , % , Flex/R&D 43 1,731, , , % 25,000-3,216 15,787 $8.31 Light Industrial ,103, , , % 3,000 45, ,770 $3.66 Akron ,340,176 2,100,223 1,294, % 28, , ,572 $3.73 Warehouse - Distribution 57 9,930, , , % 0 237, ,184 $3.59 Manufacturing 29 11,330,630 69,667 69, % 0-36,000-36,000 $3.75 Flex/R&D , , , % 12,850-16,575-28,710 $7.50 Light Industrial ,204,975 1,204, , % 15, ,342-81,678 $3.79 North Akron ,953,888 1,750, , % 0 342, ,549 $4.68 Warehouse - Distribution 27 5,062, , , % 0 344, , Manufacturing 8 1,910, % Flex/R&D 24 1,598, , , % 0-9,525-6,820 $7.96 Light Industrial 114 5,383, , , % 0 7, ,690 $3.74 Geauga 105 7,362, ,847 80, % ,300 $3.48 Warehouse - Distribution 8 970,703 14,500 14, % Manufacturing 11 2,729, % Flex/R&D 2 54, % Light Industrial 84 3,608, ,347 65, % ,300 $3.48 Lake County East 80 6,190, , , % 0-84,600-53,925 $4.66 Warehouse - Distribution 6 632, % , Manufacturing 10 2,935, , % Flex/R&D 5 144,778 13,500 13, % ,500 $4.00 Light Industrial 59 2,477, , , % 0-84, ,425 $4.74 Lake County West ,235,219 1,016, , % 2,170-38,594 85,022 $3.62 Warehouse - Distribution 11 2,296, , , % $3.02 Manufacturing 9 2,958, % 0 0 8, Flex/R&D 62 3,208,925 97,555 63, % 2,170-11,980-6,564 $6.80 Light Industrial ,771, , , % 0-26,614 82,816 $3.88 Lorain West ,696,026 1,870,908 1,796, % 0-622, ,412 $3.30 Warehouse - Distribution 17 2,854, , , % 0-182, ,415 $3.87 Manufacturing 22 10,343,789 1,514,056 1,514, % 0-495, $3.16 Flex/R&D , % Light Industrial 137 6,146, ,384 30, % 0 56,320 25, Medina ,020, , , % 0 255, ,928 $5.07 Warehouse - Distribution 25 3,696, , , % 0-10,725-12,961 $4.44 Manufacturing 28 4,596, , , % 0 247, , Flex/R&D ,140 66,423 61, % 0-3,977-7,002 $6.33 Light Industrial 111 4,821, , , % 0 22,960 27,416 $5.04 Portage County 115 8,805,056 44,500 44, % ,500 $5.00 Warehouse - Distribution 16 3,214, % Manufacturing 10 1,896, % Flex/R&D 3 117, % Light Industrial 86 3,575,746 44,500 44, % ,500 $5.00 Stark County ,198,912 1,429, , % 44, , ,637 $3.99 Warehouse - Distribution 50 8,490, , , % 0-48, ,405 $4.06 Manufacturing 57 22,417, , , % 17, , , Flex/R&D , % Light Industrial ,888, , , % 27,198-55,884 28,188 $3.85 Grand Total 4, ,815,874 25,101,746 17,649, % 1,017, ,917 2,266,394 $ Cleveland Research & Forecast Report Industrial Market Outlook Colliers International

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