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Metropolitan ChicagoNAI HiffmanIndustrial Market ReportMid-Year 2009

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Connected to the World.™

I l l i n o i sW i s c o n s i n

Ind

ian

a

Illi

no

is

WaukeganRegional Airport

OhareInt'l Airport

WestoshaAirport

Chicago ExecutiveAirport

DupageAirport

Gary/Chicago Airpo

Chicago MidwayAirport

94

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90

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90

80

57

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55

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5588

290

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294

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355

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39

39

Aurora

Plainfield

Munster

Hammond

Elk Grove Village

Schererville

Lake Zurich

Monee

Crystal Lake

MontgomeryWoodridge

Minooka

Addison

Arlington Heights

Pleasant Prairie

Grayslake

Skokie

Northbrook

FranklinPark

Naperville

Highland Park

North Aurora

BedfordPark

Park Forest

Tinley Park

NilesSchaumburg Des

Plaines

St Charles

New Lenox

Romeoville

WestChicago

Geneva

M

MattesonMokena

CarolStream

Bolingbrook

Lake Forest

Waukegan

Joliet

Elgin

Elmhurst

Burr Ridge

Vernon Hills

BuffaloGrove

Wood Dale

La Grange

PalosHeights

Elwood

Rockford

Belvidere

CherryValley

Beloit

helle

La Salle

DeKalb

Chicago

Evanston

WillowSprings

DownersGrove

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3 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – MID-YEAR 2009

Table o

f Co

ntents


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Local Economy. . . . . . . . . . . . . . . . . . . . . . 4

Industrial Market Statistics. . . . . . . . . . . . . 5

Industrial Market Summary . . . . . . . . . . . . 6

Industrial Submarket Overviews

Lake County . . . . . . . . . . . . . . . . . . . 8

Southeast Wisconsin . . . . . . . . . . . . 10

I-90/Northwest . . . . . . . . . . . . . . . . . 12

Northwest Cook . . . . . . . . . . . . . . . . 14

North Cook . . . . . . . . . . . . . . . . . . . . 16

Fox Valley . . . . . . . . . . . . . . . . . . . . . 18

Central DuPage . . . . . . . . . . . . . . . . 20

O’Hare. . . . . . . . . . . . . . . . . . . . . . . . 22

West Cook . . . . . . . . . . . . . . . . . . . . 24

I-88 Corridor . . . . . . . . . . . . . . . . . . . 26

I-55 Corridor . . . . . . . . . . . . . . . . . . . 28

I-80/Joliet Corridor . . . . . . . . . . . . . . 30

Submarket Map . . . . . . . . . . . . . . . . . . . . . 32

Methodology / Defi nitions . . . . . . . . . . . . . 33

NAI Hiffman / NAI Global . . . . . . . . . . . . . . 34

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Local EconomyPOPULATION (2008 EST.) 9,804,475

POPULATION CHANGE (2000-2008 EST.) +7.8%

NUMBER OF HOUSEHOLDS (2008) 3,516,729

MEDIAN HOUSEHOLD INCOME (2008 EST.) $67,234

GROSS METRO PRODUCT (2007) $506 BILLION

LABOR FORCE 4,999,179

JOBS GAINED (6/08-6/09) -186,411

CHICAGO AREA UNEMPLOYMENT RATE 11.3%

ILLINOIS UNEMPLOYMENT RATE 10.1%

U.S. UNEMPLOMENT RATE 9.5%

there are some signs that the rate at which it is climbing

should slow over the next few months as we approach

a peak of unemployed individuals.

In Illinois, the manufacturing industry lost 2,800 jobs

in June. While still a loss, the past six months have

consecutively posted 5,000+ jobs lost in the industry,

with March alone posting a 14,300 job loss. Since last

June, employment in the sector has dropped by 80,300

jobs, almost fourteen percent of its total workforce.

While manufacturing still defi nes much of the Midwest,

Chicago benefi ts from its diversifi ed base. The area is

not dependent on the auto industry, whose contraction

has dragged down the economies of neighboring

states. Steel, however, remains a focus for the region.

Demand for steel is starting to recover as industry

specialists insist the worst is over, but the strength of

the recovery is still unclear.

According to preliminary numbers for June, employment

in the professional and business services sector has

posted its fi rst month of job growth since December

2007. Down 66,300 jobs since June 2008, a slowdown

or perhaps reversal of job loss in the industry is a

promising trend.

The forecast for the remainder of 2009 calls for

stagnation in employment as the economy continues

its struggle. Unemployment should continue to climb,

but eventually level off as the recession winds down.

Chicago, the third largest metropolitan area in the U.S. after New York

and Los Angeles, is the most infl uential economic region between

the East and West Coasts. Situated at the geographical heart of the

nation, Chicago’s locational advantages have fostered its development

into an international center for banking, securities, high technology,

air transportation, business services, wholesale and retail trade, and

manufacturing. In addition, Chicago is one of the principal trading

centers for commodities, fi nancial, and derivative futures products. In

2008, Site Selection magazine once again named Chicago the number

one destination for new or expanded corporate facilities projects in the

nation, a position the city has held for six of the last seven years.

Chicago has a higher rate of employment in management, business &

fi nance and offi ce & administrative job growth than the nation. Likewise

it also has higher rates of production and transportation & material

moving occupations. This indicates both an “offi ce economy” as well

as a “production” and “distribution” economy. With one of the most

diversifi ed economies of any region in the country, Chicago is less

vulnerable to fl uctuations in individual industries than most other large

urban areas. The Chicago region’s considerable economic diversity is

refl ected in the ten largest publicly traded companies headquartered

here ranked by market capitalization: Abbott Laboratories, McDonald’s

Corp., Kraft Foods, Exelon Corp., Baxter International, Walgreen Co.,

Boeing, Caterpillar, Archer Daniels Midland Co., and CME Group Inc.

Over the past twelve months ending in June 2009, the Chicago-

Naperville-Joliet metropolitan area lost a total of 184,300 jobs. The

unemployment rate soared to 11.3% in June, a dramatic 63% increase

since last June when the unemployment rate was 6.9%. Nationally, at

the end of the second quarter, unemployment stood at 9.4%, the highest

it has been since 1983. While it continues to climb month after month,

2%

4%

6%

8%

10%

12%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Metro Chicago

1999

IllinoisU.S.

Local and National Unemployment

Statistical data as of June 2009 unless noted otherwise. Data from Bureau

of Labor Statistics, Bureau of Economic Nalaysis, ESRI, Illinois Department of

Employment Security


Local E

cono

my / Ind

ustrial Market S

tatistics

Submarket # Bldgs. Total RBA Vacant Vacancy 2Q09 Net YTD Net New Supply Under Constr.

(SF) (SF) Rate (%) Absorption (SF) Absorption(SF) (SF) (SF)

Chicago North 1,137 66,816,096 5,330,830 8.0% -90,989 -561,830 0 0

Chicago South 1,749 154,239,770 14,783,594 9.6% -1,079,572 -3,005,678 0 182,220

North Cook 717 46,760,058 3,046,904 6.5% -88,286 -365,862 0 0

West Cook 743 60,538,305 7,108,642 11.7% -305,028 -1,370,508 0 0

Southwest Cook 487 38,733,483 2,784,615 7.2% -706,146 -782,572 0 753,168

South Cook 1,125 85,431,508 10,785,797 12.6% -31,154 -1,820,198 0 12,600

I-57/Will Corridor 80 12,351,467 2,306,903 18.7% -208,530 -788,973 0 0

Lake County 929 66,652,043 6,784,542 10.2% -603,319 -985,124 150,192 568,543

Northwest Cook 527 28,787,011 3,507,636 12.2% 60,482 -125,923 0 121,457

O’Hare 1,735 101,236,619 12,089,704 11.9% -720,495 -602,587 0 0

Central DuPage 1,097 66,946,799 6,413,065 9.6% 329,379 2,242 0 0

I-55 Corridor 653 79,974,013 11,415,653 14.3% 309,859 -421,054 0 264,183

McHenry County 437 25,520,283 3,078,518 12.1% -80,420 -192,028 0 0

I-90/Northwest 429 25,450,233 2,803,758 11.0% -124,277 192,598 0 37,269

Fox Valley 494 32,075,871 3,588,278 11.2% -366,640 -219,884 31,439 0

I-88 Corridor 772 61,356,357 7,436,250 12.1% -650,372 -995,279 0 525,000

I-80/Joliet Corridor 613 62,369,997 12,130,879 19.5% 1,523,400 1,040,818 934,000 38,400

DeKalb County 57 6,970,869 275,116 3.9% 14,820 161,021 0 0

I-39 Corridor 218 23,981,891 4,487,006 18.7% -145,036 -364,807 0 72,000

Southeast Wisconsin 520 43,114,814 6,102,565 14.2% -282,020 -900,879 125,000 2,080,000

Northwest Indiana 430 35,694,907 4,187,331 11.7% -191,500 -114,250 0 0

Flex Space Summary

Total Flex Space 1,529 72,340,978 8,333,343 11.5% -444,447 -839,057 30,000 62,916

Total Market

Summary 16,478 1,197,343,372 138,780,929 11.6% -3,880,291 -13,059,814 1,270,631 4,717,756

The data compiled in the Chicago Industrial Market Report is the legal property of NAI Hiffman. Reproduction or dissemination of the information contained herein is strictly prohibited

without the expressed written consent of NAI Hiffman. This report contains information, including information available to the public, which has been relied upon by NAI Hiffman

on the assumption that it is accurate and complete without independent verification by NAI Hiffman. NAI Hiffman accepts no responsibility if this should prove to be inaccurate

or incomplete. No warranty or representation, express or implied, is made by NAI Hiffman as to the accuracy or completeness of the information contained herein, and same is

submitted subject to errors, omissions, and changes in market conditions.

Industrial Market StatisticsNAI HiffmanIndustrial Market ReportMid-Year 2009


Market Summary

Chicago is the second largest industrial market in the U.S. with over one

billion SF of inventory. The Chicago industrial market remains the most

infl uential in the Midwest, due to its growing prominence as an inland

port and its diverse labor pool. It has the second largest workforce in the

country and is the largest manufacturing market.

Chicago’s strategic location and transportation infrastructure make it

the most important transportation center in the country. Located in the

path of three of the nation’s busiest transcontinental expressways (I-80,

I-90 and I-94), Chicago also claims 70 percent of the nation’s rail and

intermodal activity. Furthermore, O’Hare International Airport remains

one of the world’s busiest airports, while the Great Lakes canal system

accommodates vital barge and shipping traffi c.

Quarter in Review. The credit crisis and subsequent recession

continue to make a mark on the Chicago industrial real estate market.

Manufacturers and distributors have been moving less product due to

the economy, resulting in fi ve consecutive quarters of rising vacancies

since 2007 and depressed demand. The most challenging real estate

market in decades has seen millions of SF of negative net absorption,

minimal investment, and few property sales. New construction starts are

virtually nonexistent and many ongoing development projects have lost

their fi nancing as investors have pulled out. The commercial real estate

market generally lags the economy by about 12 months, so even if the

general economy turns the corner sooner than expected, Chicago’s

industrial market will not be as quick to respond.

The overall vacancy rate at the end of June reached 11.6% for the

industrial market, up from 11.29% in March, resulting in net absorption

totaling roughly negative 3.9 million SF. While not as severe as fi rst

quarter’s net absorption total of negative 9.2 million SF, it has had

the effect of pushing the vacancy rate to its highest level since 1991.

-12,000,000

-8,000,000

-4,000,000

0

4,000,000

8,000,000

12,000,000

0%

2%

4%

6%

8%

10%

12%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Net Absorption (SF)Vacancy Rate (%)

Vacancy and Absorption

Construction Starts and Deliveries

0

2 MM

4 MM

6 MM

8 MM

10 MM

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Construction Starts (SF)

Deliveries (SF)

Source: CoStar

Industrial Base Growth by Quarter

0.9 Billion

1.0 Billion

1.1 Billion

1.2 Billion

2000

2005

2006

2007

2008

Total Industrial Base (SF)

2009

2001

2002

2003

2004

# INDUSTRIAL BUILDINGS 16,478

MARKET SIZE (SF) 1,197,373,372

VACANCY 138,780,929 SF (11.6%)

2Q09 NET ABSORPTION -3,880,291

YTD NET ABSORPTION -13,059,814

NEW SUPPLY (SF) 1,270,631

UNDER CONSTRUCTION (SF) 4,717,756


The news is not all negative, however, as leasing activity continues

to accelerate market-wide. The majority of these deals are lease

renewals, as landlords look to secure their tenants well in advance

of the expiration dates on their leases by offering signifi cant rent

reductions, fl exible terms and free rent. Pent-up demand, due to

the unpredictable economy, is resulting in developers seeing more

requests for proposals from brokers, a sign that companies may

be getting more serious about their real estate decisions.

Looking Forward. The future of Chicago’s industrial market

is highly dependent on the resiliency of the global and national

economies. Just as a positive economic outlook leads to individuals

increasing their personal spending, a recovering economy will

lead to companies feeling more confi dent investing in real estate.

Although many proposed and planned development projects

remain in the pipeline, new construction will remain limited until the

abundance of vacant space in the market begins to be absorbed.

Leasing will remain active as tenants look to take advantage of the

market by saving money on their rent through renegotiating their

lease terms or signing a new lease.

The evolving Chicago industrial market is critical to the nation’s

manufacturing, distribution and transportation industries and

is centrally located. These signifi cant advantages will allow the

market to maintain its value and recover more quickly than other

industrial markets throughout the country.

O’Hare

South Cook

I-55 Corridor

Central DuPage

Lake County

I-80/Joliet Corridor

I-88 Corridor

West Cook

North Cook

Southeast Wisconsin

Southwest Cook

Northwest Indiana

Fox Valley

Northwest Cook

McHenry County

I-90/Northwest

I-39 Corridor

I-57/Will Corridor

DeKalb County

101,236,619 SF

85,431,508 SF

79,974,013 SF

66,946,799 SF

66,652,046 SF

62,369,997 SF

61,356,357 SF

60,538,305 SF

46,760,058 SF

43,114,814 SF

38,733,483 SF

35,694,907 SF

32,075,871 SF

28,787,011 SF

25,520,283 SF

25,450,233 SF

23,981,891 SF

12,351,467 SF

6,970,869 SF

Suburban Submarkets by Size

Capitalization Rate and Properties Sold

0

20

40

60

80

100

120

6%

7%

8%

9%

10%

11%

12%

2001

2002

2003

2004

2005

2006

2007

2008

2009

Cap Rate (%)# of Properties Sold

Industrial Market Trends

VacancyRate

NetAbsorption

AskingRents

Signifi cant Industrial Lease Transactions 2nd Qtr. 2009

Property Address Submarket City Leased (SF) Tenant Comments

1700 & 1701 Leider Ln. Lake County Buffalo Grove 196,850 Hyper Microsystems New lease

815 Kimberly Dr. Central DuPage Carol Stream 250,902 Hart & Cooley New, long-term lease

794-854 Golf Ln. Bensenville O’Hare 352,119 The Bradford Exchange Lease renewal

3710-3720 River Rd. West Cook Franklin Park 195,071 R&M Trucking Company New lease

1701 Remington Blvd. I-55 Corridor Bolingbrook 800,000 Home Depot Lease renewal

Industrial M

arket Sum

mary



22

176

120

21

176

83

60

22

173

12

12

45

4145

41

294

94

Zion

Lake Zurich

ake

Grayslake

Highland Park

P l ti

Fox Lake

Lake Forest

Waukegan

cHenry

Vernon Hills

BuffaloGrove

MundeleinLibertyville

Gurnee

NorthChicago

Lake County

Submarket Trends

VacancyRate

NetAbsorption

AskingRents

33%7%

7%

9%

10%

11%23%

Waukegan

North Chicago

Buffalo Grove

Gurnee

Libertyville

Other Lake County Suburbs

Lake Zurich

Inventory By City

POPULATION 712,453 (est.)

2000–2008 POPULATION CHANGE +10.6% (est.)

# INDUSTRIAL BUILDINGS 929

MARKET SIZE (SF) 66,652,043

VACANCY 6,784,542 SF (10.18%)

2Q09 NET ABSORPTION -603,319

YTD NET ABSORPTION -985,124

NEW SUPPLY (SF) 150,192

UNDER CONSTRUCTION (SF) 568,543

The Lake County industrial submarket is notable for its roster of

corporate headquarters and heavy concentration of owner–occupied

real estate, all located within close proximity to the I-94 Tri-State Tollway.

Entrepreneurial owners and corporate managers residing along the

lakefront and northwest Lake County make this area attractive for

investment. Corporate neighbors including Abbott, Baxter, Caremark,

Takeda, Walgreens and WMS join privately held companies such as

CDW, Medline and ULINE to form a vibrant base of employment. Lake

County’s relatively low property tax rates attract companies from Cook

County, although infrastructure demands have begun to slightly even

the playing fi eld. Lake County’s population has grown as development

pushes father north and west.

Vacancy and Absorption. At the end of June, the Lake County overall

vacancy stood at 10.18%, up from 9.3% in March, resulting in net

absorption totaling negative 985,124 SF for the fi rst half of the year.

Lake County has rarely seen vacancy in the double-digits in its history.

Several of the recently constructed speculative developments in the

submarket remain at least partially vacant, a trend seen among recent

speculative development throughout the market.

“Several of the recently constructed speculative developments in the submarket

remain at least partially vacant.”

Lake County Overview

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

0%

2%

4%

6%

8%

10%

12%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09



0

200,000

400,000

600,000

800,000

1,000,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)

Under Construction (SF)

Under Construction & Recent Deliveries

Pictured Above: 1700 Leider Ln., where Hyper Microsystems

leased a total of 196,850 SF between two buildings


0

20

40

60

80

100

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

1.3 MM

1.9 MM

2.3 MM

2.1 MM

0.8 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available

200,000+ SF Available

Available Space Profi leConstruction. Construction continues on a 470,000 SF facility

located in IDI’s Antioch Corporate Center, a new 200-acre

park underway in Antioch. Panattoni delivered a 150,192 SF

speculative building over the past quarter, located in the new

Trumpet Corporate Park in Zion.

Transaction Activity. The most signifi cant transaction in the

second quarter involved computer storage device manufacturer

and distributor Hyper Microsystems expanding from their current

location to the nearby Aptakisic Creek Corporate Park in Buffalo

Grove, where they leased a total of 196,850 SF. Leasing activity

is on the rise in Lake County due to aggressive leasing incentives

being extended by institutional ownership.

Looking Forward. As the ongoing recession continues to

unfold, vacancy will rise in the near-term, resulting in consecutive

quarters of negative net absorption. Tenants will benefi t from

from low rental rates and incentives being offered in today’s

“tenants’ market”.

Lake County Sale Transactions 2nd Qtr. 2009

Property Address City Size (SF) Sale Price Price PSF Buyer Seller

45-85 Albrecht Dr. Lake Bluff 256,298 $13,175,000 $51.41 Globe Corporation Investment trust

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Sublease Vacancy (%)

1999

Lake County Submarket Sublease Vacancy Rate

Lake Co

unty Overview

Lake County Lease Transactions 2nd Qtr. 2009

Property Address City Leased (SF) Tenant Comments

1700 & 1701 Leider Ln. Buffalo Grove 196,850 Hyper Microsystems New lease

3800-3898 Sunset Ave. Waukegan 108,000 Cornfields, Inc. Lease renewal

610 Schelter Rd. Lincolnshire 98,735 Star Creations Build-to-suit lease

1883 Circuit Dr. Round Lake Beach 17,168 Midwest Printed Circuits New lease

1451-1485 S. Lakeside Dr. Waukegan 16,461 Veridian Healthcare, LLC New lease

1353 Armour Blvd. Mundelein 11,216 Air Flow Company New lease


WestoshaAirport

KenoshaRegional

Airport

83

50

142

31

32

16541

4594

Zi

Pleasant Prairie

Kenosha

RacineSturtevantBurlington

Southeast Wisconsin

Submarket Trends

VacancyRate

NetAbsorption

AskingRents

Inventory By City





VACANCY 6,102,565 SF (14.15%)




UNDER CONSTRUCTION (SF) 2,080,000

The Lakeview Corporate Park in Pleasant Prairie, Wisconsin accounts

for the lion’s share of our statistical tracking in the Southeast Wisconsin

industrial submarket. This 1,500-acre business park was developed in

the late 1980’s by Wispark, the development subsidiary of Wisconsin

Energy Corporation. Owned by both Wispark and CenterPoint

Properties, the park boasts 25 million SF and is home to an international

roster of companies including S.C. Johnson, IRIS, Yamaha and Jelly

Belly. The primary advantages of the Southeast Wisconsin submarket

are the availability of affordable land for “big box” development as well

as lower utility costs, property taxes and workers’ compensation when

compared to submarkets in Illinois.

Vacancy and Absorption. While vacancy has been on the rise since

2008, the area is subject to sudden adjustments due to the large size of

many of the transactions that take place. Southeast Wisconsin ended

the second quarter with 14.15% vacancy, resulting in net absorption

totaling negative 900,879 SF for the fi rst half of 2009. Many of the

area’s large “big-box” spaces that can accommodate users from

100,000-600,000 SF remain on the market.

“While vacancy has been on the rise since 2008, the area is subject to sudden

adjustments due to the large size of transactions that take place.”

Southeast Wisconsin Overview

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

0%

3%

6%

9%

12%

15%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09



0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



7%

16%

18%

23%

36%

Racine

Burlington

Kenosha

Sturtevant

Pleasant Prairie

Pictured Above: Artist rendering of ULINE’s new

corporate headquarters under construction in Pleasant Prairie


0

10

20

30

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

3.8 MM

1.5 MM

0.8 MM

0.6 MM0.3 MM

1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi le

Construction. Construction continues on the new ULINE

facility in Pleasant Prairie where the rapidly growing packaging

supply company plans to move its corporate headquarters

from Waukegan when construction is completed. The 196

acre site, located at the southeast corner of I-94 and Highway

65, will feature a 200,000 SF corporate offi ce building and a 1

million SF distribution center. Gordon Food Service’s 587,000

SF distribution center on 134 acres is still under construction,

expecting to deliver in January of 2010.

Transaction Activity. During the second quarter, GBC renewed

its lease for 56,050 SF at 10150 80th Avenue in Pleasant Prairie.

Unifi ed Solutions leased 277,454 SF at 9801 80th Avenue in

Pleasant Prairie.

Looking Forward. Southeast Wisconsin will continue to draw

companies from south of the border looking to escape Illinois’

perceived tax burden. CenterPoint Properties will remain a

strong presence in the submarket delivering proven results. The

large number of available high cube, “big-box” properties will

cause continued downward pressure on Lake County, Illinois

rental rates. Most of Southeast Wisconsin’s industrial inventory

features 28’–30’ clear heights and exterior truck loading, an

advantage compared to the second generation competition in

Lake County, Illinois.

Southeast Wisconsin Projects Under Construction 2nd Qtr. 2009

Southeast Wisconsin Recent Deliveries 2nd Qtr. 2009

Property Address City Size (SF) Comments

8100 60th St. Kenosha 731,000 Build-to-suit distribution center for Affiliated Foods Midwest Cooperative Inc.

88th Ave @ State Route 158 Kenosha 600,000 New Rust-Oleum Corp. warehouse and distribution center, room for up to 250,000 SF expansion

8123 116th St. Pleasant Prairie 452,769 Vacant

12501 Globe Dr. Racine 321,600 Vacant

Property Location City Size (SF) Comments

Southwest of I-94 and County Hwy. Q Pleasant Prairie 1,200,000 Part of new ULINE campus including a 200,000 SF corporate headquarters

Southwest of Hwy. 20 and County Hwy. V Mt. Pleasant 600,000 HSA Commercial, Inc. to build up to 10 buildings on 90-acre land site

10901 38th St. Kenosha 587,000 New distribution facility for Gordon Food Service on 134-acre land site

So

utheast Wisco

nsin Overview

72

2531

31

4720

90

South Elgin

EastDundee

Elgin

Hampshire Carpentersville

I-90/Northwest

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 2,803,758 SF (11.02%)


YTD NET ABSORPTION 192,598

NEW SUPPLY (SF) 1


The I-90/Northwest industrial submarket is attractive to companies

looking for excellent interstate access, relatively low taxes, potential

incentives and a strong labor pool. Most of the industrial inventory

base in the submarket is located within minutes of a 4-way

intersection with I-90. This serves to make the I-90/Northwest

submarket a good distribution point for companies that are serving the

I-90/upper-midwest supply chain. Relatively low taxes are a benefi t

throughout the submarket, and TIF incentives are available in some

areas. Additionally, the Elgin area provides an abundant, educated

labor pool. Population along and near the Fox River has increased

dramatically over the past decade.

Vacancy and Absorption. Following two quarters of declining vacancy

rates and positive net absorption, the I-90/Northwest submarket

resumed the trend of increasing vacancies and negative net absorption

this quarter, posting a vacancy rate of 11.02% in June, up from 10.5%

in March, resulting in net absorption totaling negative 124,277 SF. As

demand and transaction volume remain low, we expect these trends to

continue in the near-term.

“Leasing activity remains elevated, likely due to aggressive rental rates and leasing incentives from institutional ownership.”

I-90/Northwest Overview

-400,000

-200,000

0

200,000

400,000

600,000

800,000

0%

2%

4%

6%

8%

10%

12%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



VacancyRate

9%

3%5%

7%

76%

Elgin

Dundee, Genoa, Marengo, Hampshire, etc.

East Dundee

South Elgin

Carpentersville

Pictured Above: 305-335 Corporate Dr. in Elgin, where

Art Supply signed a lease for 125,000 SF during the second quarter


0

10

20

30

40

50

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

0.5 MM

0.7 MM 0.7 MM

0.9 MM0.3 MM


20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. Following the push for new construction in the

I-90/Northwest submarket in 2006-2007, developers reacted to

the difference between supply and demand, reducing the amount

of new development since. Several proposed buildings remain in

the pipeline, a sign that development should pick up again when

the market turns around.

Transaction Activity. Leasing activity remains elevated, likely

due to aggressive rental rates and leasing incentives from

institutional ownership. The 431,318 SF speculative building

located at 305-335 Corporate Drive in Elgin’s Fox River Business

Center signed its fi rst lease during the second quarter, as tenant

Art Supply took 125,000 SF.

Looking Forward. The I-90/Northwest submarket will remain an

attractive location for businesses due to the lower tax base, strong

labor pool and interstate access. Tenants will continue to fi nd

leasing opportunities such as incentives and aggressive rates.

I-90/Northwest Sale Transactions 2nd Qtr. 2009


2755 Alft Ln. (Building 2) Elgin 100,294 $6,500,000 $64.81 Seigle Investments LLC Ryan Companies US, Inc.

1155 Bowes Rd. Elgin 34,400 $1,825,500 $53.07 Quality Craft Inc. The Missner Group Company

I-90/No

rthwest O

verview

I-90/Northwest Lease Transactions 2nd Qtr. 2009


305-335 Corporate Dr. Elgin 125,000 Art Supply New lease

210-220 Corporate Dr. Elgin 34,449 Exhibit Fabrications New lease

1155 Bowes Rd. Elgin 34,400 Quality Craft, Inc. New lease

300 Brook St. Elgin 33,000 Midnight Slumber New lease

0%

0.5%

1.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

I-90/Northwest Sublease Vacancy Rate

OhareInt'l Airport

Chicago Executive

Airport

53

72

68

62

58

19

59 12

14

20

355

290

294

90

Elk Grove Village

Lake Zurich

Arlington Heights

gin

F kli

Palatine

Schaumburg Des Plaines

Bloomingdale

EastDundee

gin

BuffaloGrove

Wood Dale

Streamwood

Barrington

HoffmanEstates

Mt. Prospect

Bartlett

Northwest Cook

Submarket Trends

NetAbsorption

AskingRents

Inventory By City


2000–2008 POPULATION CHANGE -0.1% (est.)



VACANCY 3,507,636 SF (12.18%)

2Q09 NET ABSORPTION 60,482


NEW SUPPLY (SF) 0


The Northwest Cook submarket remains a desirable location for

entrepreneurial owners and corporate managers who reside in the

area’s suburban communities. The submarket is conveniently located

within close proximity of Chicago’s O’Hare International Airport with

excellent access to Chicago and the western suburbs using I-90,

I-290 and Route 53. The user base generally consists of specialized

manufacturing and service companies. Many international companies,

particularly Asian and European, have located their North American

headquarters here due to the proximity to the airport. Few distribution

facilities exist relative to neighboring submarkets. Many users come

from the comparatively cramped O’Hare submarket looking for more

space or a location closer to their residences, but don’t want to move

all the way west to Elgin or beyond. While high Cook County taxes

may be prohibitive to some users, landlords continue to offer lower net

rents to attract tenants.

Vacancy and Absorption. Vacancy rates have been generally rising

over the past few years and ended the second quarter at 12.18%. Net

absorption was slightly positive to end the quarter.

“Vacancy rates will remain elevated or climb as companies in the area

consolidate and restructure.”

Northwest Cook Overview

-500,000

-250,000

0

250,000

500,000

750,000

0

3

6

9

12

15

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



VacancyRate

14%

7%7%

10%

15%19%

28%Schaumburg

Bartlett, Hoffman Estates, Roling Meadows, etc.

Palatine

Mt. Prospect

Northlake

Barrington

Streamwood

Pictured Above: 1420 Brewster Creek Blvd. in Bartlett, where Auto Truck Group

purchased the 103,000 SF building on May 18th, 2009 for $127.30 PSF


0

15

30

45

60

75

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

2.0 MM

1.2 MM

0.7 MM

0.9 MM

0.5 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. There are few vacant land sites for new

construction in the Northwest Cook submarket, thus it is

commonly referred to as an “infi ll market”. The majority of

construction projects are building additions, but these have been

few and far between due to the current economic situation.

Transaction Activity. Leasing activity remains limited to

smaller-sized deals and lease renewals in the Northwest Cook

submarket. One of the reasons for this lack of activity is potential

tenants looking elsewhere to avoid the tax burdens of Cook

County. Similar to other submarkets, sales transactions are few

due to diffi culty fi nancing major purchases.

Looking Forward. Net rental rates will continue to contract as

owners offer signifi cant incentives for tenants to renew or sign

new leases to stave off vacancy. Vacancy rates will remain

elevated or climb as companies in the area consolidate and

restructure.

Northwest Cook Sale Transactions 2nd Qtr. 2009


1420 Brewster Creek Blvd. Bartlett 103,000 $13,111,583 $127.30 Auto Truck Group Abbott Land & Investment Corp.

1020 Lunt Ave. Schaumburg 16,065 $750,000 $46.69 Private trust Lunt 1020 LLC

No

rthwest C

oo

k Overview

0%

0.5%

1.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

Northwest Cook Sublease Vacancy Rate

Northwest Cook Lease Transactions 2nd Qtr. 2009


2290-2300 Hammond Dr. Schaumburg 38,500 NexGen Building Supply Lease renewal

514-540 Hicks Rd. Palatine 31,600 BCI Acrylic Bath Systems New lease

900-926 Estes Ave. Schaumburg 8,160 Buraq Wholesale New lease

2246 N. Palmer Dr. Schaumburg 5,500 D.R. Fiddick & Sons Inc. New lease

1437-1455 Payne Rd. Schaumburg 4,500 Woodfield Chevrolet New lease

OhareInt'l Airport

ago ExecutiveAirport

43

21

58

68

4114

294

94

90

Glencoe

e

n s

Skokie

Northbrook

Park Ridge

NilesDes Plaines

Grove

Lincolnwood

MortonGrove Evanston

Wheeling

Chicago

North Cook

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 3,046,904 SF (6.52%)



NEW SUPPLY (SF) 0

UNDER CONSTRUCTION (SF) 0

The North Cook submarket remains a desirable location for users

seeking quick access to Chicago, major area expressways and

Chicago’s northern suburbs. It is also attractive to long-term Chicago-

based users looking to stay close to the city, while escaping Chicago

politics. The area has the advantage of an inventory of buildings with

better specifi cations than many of the antiquated buildings found in the

city of Chicago. Additionally, it tends to be a comparatively user/buyer

market, with limited leasing opportunities. The user base generally

consists of service providers and machine shops who tend to remain

in their locations for extended periods of time, resulting in limited

transaction velocity in the submarket. The inventory base is mostly

comprised of 1960’s–1970’s-era buildings with lower ceilings and low

parking ratios. High taxes may be a deterrent for some users, while

others are willing to pay the price for the location.

Vacancy and Absorption. An historically stable submarket, vacancy

has wavered between 5% and 8% for the past several years. While

vacancy rates have been climbing since the third quarter of 2008, no major

jumps have occurred and are not expected. The second quarter ended

with a 6.52% vacancy rate and net absorption of negative 88,286 SF.

“There are few leasing opportunities in the North Cook submarket as it is historically a

user/buyer market.”

North Cook Overview

-500,000

-240,000

20,000

280,000

540,000

800,000

0%

2%

4%

6%

8%

10%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


14%

8%

13%

17%20%

28%Wheeling

Evanston, Glenview, Lincolnwood, Northfield, etc.

Northbrook

Skokie

Niles

Morton Grove

VacancyRate

Pictured Above: 6250 W. Howard St. in Niles, purchased by

Speciality Print Communications on June 16th, 2009 for $46.16 PSF


0

20

40

60

80

100

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

0.7 MM

1.4 MM0.7 MM

1.1 MM0.7 MM


20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. The North Cook submarket has experienced

very little new development in recent years due to its status as a

mature market. The most recent project was the re-development

of the Niles Distribution Center by Duke Realty Corp. in 2008.

Transaction Activity. The most signifi cant transaction of the

recent quarter involved the sale of 6250 W. Howard in Niles to

direct-mail resource Speciality Print Communications. While a

few leases have occurred over the past few quarters, there remain

few leasing opportunities in the submarket as it is historically a

user/buyer market.

Looking Forward. Vacancy levels in the North Cook submarket

are generally lower than the rest of the Chicago Metropolitan

market. While vacancy may continue to edge up over the coming

quarters, it will remain well below the market average. Net rental

rates should continue to fall until demand and transaction activity

pick up again.

North Cook Sale Transactions 2nd Qtr. 2009

North Cook Lease Transactions 2nd Qtr. 2009


747 Glenn Ave. Wheeling 70,671 Corpak Med Systems New lease

8220 N. Austin Ave. Morton Grove 55,000 GHP New lease

747-797 S. Glenn Ave. Wheeling 14,300 MMA Enterprises New lease

6310-6344 W. Gross Point Rd. Niles 10,700 Saranda’s Furniture, Inc. New lease

3410-3726 W. Touhy Ave. Skokie 7,393 Korean Store Lease renewal


6250 W. Howard St. Niles 72,580 $3,350,000 $46.16 Speciality Print Communications Woodward Control

No

rth Co

ok O

verview

0%

0.5%

1.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

North Cook Sublease Vacancy Rate

DupageAirport

31

25

64

38

59

64

3847

30

88

Aurora

Batavia

South Elgin

Naperville

North Aurora

St Charles

West ChicagoCa

Sugar Grove

Elgin

Geneva

Streamwoo

Fox Valley

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 3,588,278 SF (11.19%)





The Fox Valley submarket lies between the I-90/Northwest submarket

to the north and the I-88 Corridor submarket to the south and has

limited access to major expressways. It is primarily an owner/user

market with leasing opportunities in the smaller to mid-size range. The

user base generally consists of manufacturing companies that serve

the area and are within close proximity to users’ homes. Much of

the inventory is composed of mid-1980’s buildings in contrast to the

modern “big-box” distribution warehouses of neighboring submarkets.

Many users choose to be in the Fox Valley submarket because they

need to be there and remain in the submarket long-term, resulting in

limited transaction velocity.

Vacancy and Absorption. Vacancy jumped during the second quarter,

fi nishing June with a rate of 11.19%, up from 10% in March. Behind the

jump in vacancy was a signifi cant amount of negative net absorption

totaling negative 366,640 SF for the quarter, due to companies

downsizing production, consolidating multiple locations or letting their

leases expire. Historically a consistent submarket in terms of vacancy

due to long-term users and an owner/user reputation, the Fox Valley

submarket is experiencing the highest vacancy rates of its history.

“Signifi cant adjustments in absorption are not anticipated due to the relatively low transaction velocity in the submarket.”

Fox Valley Overview

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

0%

2%

4%

6%

8%

10%

12%

2Q09

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09



0

100,000

200,000

300,000

400,000

500,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



11%

25%

28%

35% West Chicago

Geneva

Batavia

St. Charles

VacancyRate

Pictured Above: 1155 Harvester Ln. in West Chicago, where

tenant Liquid Container renewed their lease during the second quarter


0

10

20

30

40

50

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

1.5 MM

0.8 MM

0.7 MM

1.3 MM

0.5 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. The newest building to the submarket, a

31,439 SF industrial condominium building located at 310-

330 St. Charles in West Chicago was delivered during the

past quarter. Little ongoing development remains. Recent

development has seen little interest or activity due to the

limited access to the area and the ongoing economic situation.

When vacant space in the submarket is eventually absorbed,

development should pick up again west of the Fox River, as little

industrial-zoned land is left in the communities near the river.

Transaction Activity. Largely a user/buyer market, a few

signifi cant lease transactions occurred during the past quarter.

Sales activity remains limited, due to the long-term nature of many

area users and the tight credit market for prospective buyers.

Looking Forward. Vacancy rates will continue to slowly

climb over the coming quarters, but signifi cant adjustments in

absorption are not anticipated due to the relatively low transaction

velocity in the submarket.

Fox Valley Sale Transactions 2nd Qtr. 2009

Fox Valley Lease Transactions 2nd Qtr. 2009


1155 Harvester Ln. West Chicago 106,461 Liquid Container Lease renewal

1800 W. Hawthorne Ln. West Chicago 56,266 Norix Group, Inc. New lease

1200-1202 Nagel Blvd. Batavia 42,543 Hobi International Inc. New lease

1100 Commerce Dr. West Chicago 12,464 QuestMark Flooring New lease


None to report

Fo

x Valley Overview

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

Fox Valley Sublease Vacancy Rate

OhareInt'l Airport

53

19

64

83

53

20

294

88

355

290

Elk Grove Village

Addison

Schaumburg

Bloomingdale

est ChicagoCarol Stream

Elmhurst

W

LombardGlen Ellyn

GlendaleHeights

Central DuPage

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 6,413,065 SF (9.58%)


YTD NET ABSORPTION 2,242

NEW SUPPLY (SF) 0


The well-positioned Central DuPage industrial submarket benefi ts from

advantages including relatively low taxes, newer building inventory and

an educated workforce. The recent completion of the I-355 extension,

Chicago’s newest expressway, has improved access to the area and

spurred interest in the mature market. Users in the Central DuPage

submarket vary by type and are not limited to primarily distribution like

other nearby submarkets.

Vacancy and Absorption. The Central DuPage submarket was one of

the only to report positive absorption and a lower vacancy rate at the

end of the second quarter, thanks to a recent spur of leasing and sales

activity that has negated the fi rst quarter’s negative net absorption

tallies. At the end of June, the vacancy rate was 9.58%, down from

10.1% in March. Relative to neighboring submarkets, sublease listings

are more common in Central DuPage, accounting for more than 1%

of vacancy, but still remain much lower than the record amount of

sublease space on the market during the early 2000s.

Construction. New speculative construction has declined throughout

the submarket due to general market conditions, absorption concerns

“Leasing activity should continue to accelerate as landlord concessions

encourage tenants to take advantage of low rates and attractive terms.”

Central DuPage Overview

-800,000

-300,000

200,000

700,000

1,200,000

0%

3%

6%

9%

12%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

100,000

200,000

300,000

400,000

500,000

600,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



18%

7%9%

10%

29%

27%

Addison

Hanover Park

Elmhurst

Glendale Heights

Carol Stream

Bloomingdale, Lombard, Roselle, Vill Park, Wheaton

VacancyRate

Pictured Above: 815 Kimberly Dr. in Carol Stream, where tenant

Hart & Cooley signed a longer-term lease during the second quarter


0

20

40

60

80

100

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

2.9 MM0.9 MM

1.5 MM

1.7 MM

0.9 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leand increased vacancy. This trend will likely continue until

existing vacant space is eventually absorbed. Rental rates have

contracted, making new speculative or build-to-suit projects

unlikely unless a specialty building is required.

Transaction Activity. The fi rst half of 2009 has seen a relatively

active transactional period in the Central DuPage submarket,

especially compared to neighboring submarkets. Demand was

largely infl uenced by larger tenants during the fi rst quarter, while

the second quarter featured primarily smaller-sized leases.

Looking Forward. Leasing activity should continue to accelerate

during the coming quarters as landlord concessions encourage

tenants to take advantage of attractive terms and low lease rates

being extended by area landlords. Low taxes, excellent access

and newer product will help the Central DuPage submarket be a

leader as the real estate market eventually starts to turn around.

Central DuPage Sale Transactions 2nd Qtr. 2009

Central DuPage Lease Transactions 2nd Qtr. 2009


111 S. Rohlwing Rd. Addison 100,000 $3,500,000 $35.00 Venus Laboratories, Inc. Minuteman International Inc.

330 W. North Ave. Addison 53,389 $2,600,000 $48.70 330 W. North Avenue LLC Private trust

200 Wrightwood Ave. Elmhurst 48,000 $2,625,000 $54.69 200 Wrightwood, LLC John Morrell & Co.

Central D

uPag

e Overview


815 Kimberly Dr. Carol Stream 250,902 Hart & Cooley New, long-term lease

99 Internationale Blvd. Glendale Heights 48,311 K&K Screw New lease

91 Mitchell Ct. Addison 45,000 Simplexgrinnell Lease renewal

596 Lamont Rd. Elmhurst 41,356 Stenograph, LLC New lease

775 W. Belden Ave. Addison 32,920 Cosmo Films New lease

0%

1%

2%

3%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

Central DuPage Sublease Vacancy Rate

OhareInt'l Airport

83

19

72

45

355290 294

90

Elk Grove Village

Addison

Heights

Park Ridge

Franklin Park

Bensenville

Nmburg Des Plaines

ngdale

Elmhurst Melrose

MortoGrov

Wood Dale

daleghts

Itasca

O’Hare

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 12,089,704 SF (11.94%)



NEW SUPPLY (SF) 0


The O’Hare submarket is unique due to its close proximity to O’Hare

International Airport and its central location at the crossroads of

Chicago’s expressway system. The O’Hare submarket holds the most

industrial inventory of all of the Chicagoland submarkets. Elk Grove

Village alone is the nation’s largest industrial park, boasting more than

40 million SF of industrial and fl ex space. Many of the buildings in

the submarket are older and functionally obsolete. Redevelopment and

construction has slowed dramatically.

Vacancy and Absorption. O’Hare land values were near record

highs around $25 PSF in 2007. Industrial land values have dropped

precipitously over the past several quarters since the redevelopment

bubble burst. This is attributed to the ailing economy, increased

vacancy and negative absorption. Vacancy continued to climb through

the fi rst half of 2009, ending the second quarter at nearly 12%, up from

10.1% a year ago. After slightly positive net absorption during the

fi rst quarter, signifi cant vacancies turned the year-to-date absorption

strongly negative for the submarket during the second quarter, due to

net absorption totaling negative 720,495 SF from March through June.

More than 17 million SF is available.

“Despite respectable amounts of leasing activity relative to other submarkets, it has not been enough to stave off rising vacancies and negative net absorption.”

O’Hare Overview

-1,500,000

-800,000

-100,000

600,000

1,300,000

2,000,000

0%

3%

6%

9%

12%

15%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09



0

200,000

400,000

600,000

800,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF) Under Construction (SF)


11%

9%

43%

18%

1%

18%

Elk Grove Village

Wood Dale

Itasca

Bensenville

Des Plaines

Rosemont

VacancyRate

Pictured Above: 777 Mark St. in Wood Dale, where CNA International Inc.

signed a 234,000 SF lease during the second quarter


0

50

100

150

200

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

2.8 MM5.1 MM

4.2 MM3.6 MM

1.6 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. New construction in the O’Hare submarket

has nearly ground to a halt as planned projects are few and

far between. A majority of the recent speculative construction

projects in the O’Hare submarket are currently sitting vacant.

Transaction Activity. Despite respectable amounts of leasing

activity relative to other submarkets, it has not been enough to

stave off the ongoing trends of rising vacancies and negative net

absorption. While spaces large and small are changing hands,

companies continue to downsize or allow their leases to expire

due to the ongoing economic recession.

Looking Forward. Vacancy rates will continue to increase slowly,

but eventually stabilize when vacant space is absorbed as pent-

up activity accelerates. Signifi cant incentives and concessions

being extended by landlords should facilitate this process when

the capital markets permit substantial lending.

O’Hare Sale Transactions 2nd Qtr. 2009

O’Hare Lease Transactions 2nd Qtr. 2009


794-854 Golf Ln. Bensenville 352,119 The Bradford Exchange Lease renewal

777 Mark St. Wood Dale 234,000 CNA International Inc. New lease

2600 Elmhurst Rd. Elk Grove Village 105,000 Moss, Inc. New lease

1200-1280 Kirk St. Elk Grove Village 87,600 Universal Beauty Products New lease

2501-2575 Allan Dr. Elk Grove Village 50,560 Kamino International Transport New lease


476-482 Thomas Dr. Bensenville 119,000 $5,750,000 $48.32 Central States Trucking Co. ProLogis

880 Industrial Dr. Bensenville 24,150 $1,450,000 $60.04 Loftus Holdings LLC Keith Madelung

880 Busse Rd. Elk Grove Village 20,000 $1,400,000 $70.00 Advanced Valve Technology Arthur Machinery, Inc.

O’H

are Overview

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

O’Hare Sublease Vacancy Rate

OhareInt'l Airport

64

19

43

45

20

290

29494

90

90

290

k Grove Village

Skokie

Oak Park

Franklin Park

Bensenville

Niles

Elmhurst MelrosePark

Bellwood

SchillerPark

Chicago

West Cook

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 7,108,642 SF (11.74%)


YTD NET ABSORPTION -1,370,508

NEW SUPPLY (SF) 0


The West Cook submarket draws companies from the city of Chicago

looking for a more functional building and additional amenities

compared to the aging, often obsolete inventory of properties in

Chicago. Additionally, companies migrate to the area from the nearby

O’Hare submarket where interstate and airport access is similar, but

rental rates tend to be higher. The West Cook submarket benefi ts from

good access to the city of Chicago, close proximity to area interstates

and rail providers and relatively low rental rates. It is primarily an owner/

user market, but leasing opportunities have increased as institutional

and private owners have entered this market.

Vacancy and Absorption. Similar to the O’Hare submarket, industrial

land values were driven to near record high levels during 2006-2007,

as interested investors purchased land for development. Much of this

recent development is now sitting vacant due to the current economic

situation and the high asking rates associated with the vacant space.

The vacancy rate has been on a steady climb since the beginning of

2008, approaching 12% at end of the fi rst half of 2009. Net absorption

has closely followed this trend, totalling negative 305,028 SF for the

fi rst quarter and a substantial negative 1,370,508 SF year-to-date.

“Tenants with upcoming expirations are increasingly taking advantage of the low

rents and leasing incentives being offered.”

West Cook Overview

-1,500,000

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

0%

2%

4%

6%

8%

10%

12%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



12%

5%8%

9%

29%

37%

Franklin Park

Harwood Heights, Hillside, Maywood, Norridge, River Grove

Schiller Park

Bellwood

Melrose Park

Berkeley

VacancyRate

Pictured Above: A rendering of 3710-3720 River Rd. in Franklin Park, where

R&M Trucking Company leased a total of 195,071 SF during the second quarter


0

10

20

30

40

50

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

3.4 MM

3.2 MM

2.2 MM

1.3 MM0.4 MM


20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. Following the recent development boom of 2006-

2008, the number of new construction projects has ground to a

halt, due to absorption concerns and climbing vacancy rates.

Transaction Activity. The most signifi cant activity in the West

Cook submarket during the second quarter was air and ocean

freight forwarding fi rm R&M Trucking Company’s lease of

195,071 SF. As asking rents continue to contract, the recently

constructed vacant space in the West Cook submarket will

eventually be absorbed, allowing vacancy rates to stabilize.

Sales activity remains very limited as fi nancing is diffi cult to

obtain for potential buyers, and asking prices remain elevated

relative to market conditions.

Looking Forward. As market conditions continue to force

landlords to lower asking rates, leasing activity will increase

as tenants with upcoming expirations are taking advantage of

leasing incentives. Eventually, this trend will result in absorption

of vacant space throughout the submarket.

West Cook Sale Transactions 2nd Qtr. 2009

West Cook Lease Transactions 2nd Qtr. 2009


3710-3720 River Rd. Franklin Park 195,071 R&M Trucking Company New lease

100 W. Whitehall Dr. Northlake 89,837 Farmers Brothers Coffee Co. New lease

150 N. 25th Ave. Melrose Park 76,790 Smart Box Chicago, Inc. New lease

2501 W. Grant Ave. Bellwood 39,583 Dynamic Manufacturing, Inc. New lease

9400 W. King St. Franklin Park 33,790 American Metalcraft New lease


3434 Runge St. Franklin Park 51,666 $2,950,000 $57.10 Grant Park Packing Sitex Realty Group, LLC

2575 W. LeMoyne St. Melrose Park 20,176 $804,500 $39.87 Dynamic Fastener Sitex Realty Group, LLC

West C

oo

k Overview

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

West Cook Sublease Vacancy Rate

DupageAirport

56

2531 59

59

53

8356

3430

30

55

294

88

355

290

Aurora

MontgomeryWoodridge

Batavia

Naperville

North Aurora

St Charles

West ChicagoCarol Stream

Bolingbrook

Sugar Grove

Elmhurst

DownersGrove

Oak Brook

Lisle

I-88 Corridor

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 7,436,250 SF (12.12%)



NEW SUPPLY (SF) 0


The I-88 Corridor industrial submarket has seen increased demand

and speculative development during the past few years, due to the lack

of land for development in feeder markets such as Central DuPage and

West Cook. Developers were drawn to the large available land sites

and easy access to major expressways that the I-88 submarket has to

offer. This rapid pace of development has slowed over the past few

quarters as obtaining project fi nancing has become diffi cult, vacancy

has increased and activity has been limited.

Vacancy and Absorption. Over the past year, vacancy rates in the

I-88 Corridor have climbed from 8.2% to 12.12%, the highest level

seen in the submarket’s history. Signifi cant negative net absorption

has been the result, and the second quarter was no exception, posting

net absorption numbers totaling negative 650,372 SF. Available supply

has eclipsed 10 million SF (16.9%) for the fi rst time.

Construction. Much of the speculative development that has been so

prevalent throughout the area has been put on hold due to the current

economic climate, change in demand and diffi culty fi nancing new

projects. Construction during the foreseeable future will likely be limited

“Over the long-term, the plethora of quality product will help the I-88 Corridor continue

to attract tenants.”

I-88 Corridor Overview

-1,000,000

-600,000

-200,000

200,000

600,000

1,000,000

0%

3%

6%

9%

12%

15%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF) Under Construction (SF)


17%

7%

15%

18%

43%

Aurora

Oswego, Westmont, North Aurora, Hinsdale, Lisle, etc.

Downers Grove

Montgomery

Naperville

VacancyRate

Pictured Above: A rendering of Park Buterfield, where tenant

InnerWorkings, Inc. signed a lease for 55,055 SF during the second quarter


0

20

40

60

80

100

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

4.7 MM

1.8 MM

1.7 MM

1.5 MM

0.8 MM1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leto build-to-suit and highly customized projects, such as the new

525,000 SF FHP facility currently under construction by IDI in

Aurora’s Prairie Point West Industrial Park. The most recently

completed project was a 463,636 SF speculative distribution

building located in the Liberty Business Center Aurora.

Transaction Activity. Signifi cant transactions are few and far

between in the submarket; instead activity remains limited to

smaller-sized deals and lease renewals. The current “tenants’

market” should translate to increased activity if the economy

begins to turn the corner and demand grows.

Looking Forward. Over the near-term, the ongoing trends

throughout the market and economy will continue to negatively

impact the I-88 Corridor submarket, leading to rising vacancy,

negative net absorption, additional available supply on the

market and contracting rental rates. Over the long-term, the

plethora of quality product will help the I-88 Corridor continue to

attract tenants.

I-88 Corridor Sale Transactions 2nd Qtr. 2009

I-88 Corridor Lease Transactions 2nd Qtr. 2009


3553 Butterfield Rd. Aurora 55,055 InnerWorkings, Inc. New lease

1703 Eastwood Dr. Aurora 35,695 Tracker Industries, Inc. Lease renewal

3565 Butterfield Rd. Aurora 32,541 Cano Container New lease

1936 University Ln. Lisle 15,400 Ames Supply Co. Lease renewal


1555 & 1567 Frontenac Rd. Naperville 48,500 $3,285,500 $67.74 R&J Commercial Properties Frontenac Road Partnership

I-88 Co

rrido

r Overview

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

I-88 Corridor Sublease Vacancy Rate

Italics denotes NAI Hiffman transaction

171

59

59

53

30 55

355

294

88

Plainfield

Woodridge

Naperville

aHinsdale

Romeoville

Bolingbrook

Burr Ridge

WiSpr

DownersGrove

I-55 Corridor

Submarket Trends

VacancyRate

NetAbsorption

AskingRents

9%5% 5%

10%

34%

37%

Bolingbrook

Plainfield

Lemont

Woodridge

Romeoville

Burr Ridge, Forest View,Willowbrook

Inventory By City





VACANCY 11,415,653 SF (14.27%)



NEW SUPPLY (SF) 0


Of all of the Chicago area industrial submarkets, the I-55 Corridor

submarket has seen the most activity and development interest over

the past several years. As a result, much of the available land parcels

have been developed or are controlled by developers, rendering the

I-55 Corridor submarket an “infi ll market” with little additional land for

signifi cant new development.

Vacancy and Absorption. The I-55 Corridor was one of only a few

submarkets to record a drop in vacancy and positive net absorption

during the second quarter. While area companies continue to contract

in today’s economy, releasing additional vacant space into the market,

a rash of large lease transactions occurred during the fi rst half of 2009–

enough to slightly lower vacancy rates and result in a period of positive

absorption. At the end of June, 14.27% of the submarket’s industrial

base sat vacant, compared to 14.7% last quarter. The corridor posted

net absorption totaling 578,946 SF for the fi rst half of 2009.

Construction. A hot spot for recent development, new construction

starts have been few, as construction is limited to ongoing projects

that began before the credit crisis and subsequent recession hit.

“Following a period of limited leasing activity in the second half of 2008, a surge of transactions

has taken place during the fi rst half of 2009.”

I-55 Corridor Overview

-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

0%

4%

8%

12%

16%

20%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

750,000

1,500,000

2,250,000

3,000,000

3,750,000

4,500,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



Pictured Above: 1701 Remington Blvd., in Bolingbrook, where Home Depot

renewed their lease for 800,000 SF of distribution space during the second quarter


0

10

20

30

40

50

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

8.4 MM

2.2 MM

1.3 MM

1.1 MM

0.5 MM


20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leThe widening of Weber Road and the rebuilding of the Weber

Road/I-55 interchange will pave the way for future development

when some of the more than 11 million SF sitting vacant in the

corridor is absorbed.

Transaction Activity. Following a period of limited leasing

activity in the second half of 2008, a surge of transactions has

taken place during the fi rst half of 2009. Typical of the area, many

of the recent leases have been for large distribution spaces to be

occupied by international companies such as Home Depot, Sanyo

Logistics, and Canon USA. While sales activity remains limited,

leasing will continue as tenants look to take advantage of low

asking rates, signifi cant leasing incentives, and fl exible landlords.

Looking Forward. Benefi tting from a diverse industrial base, a

large and educated labor pool and excellent access via I-55 and

I-355, the I-55 Corridor submarket will see consistent interest

and activity over coming quarters, and will be a leader when the

real estate market starts to turn the corner.

I-55 Corridor Sale Transactions 2nd Qtr. 2009


1375-1385 N. Weber Rd. Romeoville 658,060 $21,800,000 $33.13 Molto Capital LLC RREEF

I-55 Co

rrido

r Overview

0%

1%

2%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


1999

I-55 Corridor Sublease Vacancy Rate

I-55 Corridor Lease Transactions 2nd Qtr. 2009


1701 Remington Blvd. Bolingbrook 800,000 Home Depot Lease renewal

860 W. Crossroads Pky. Romeoville 214,932 Sanyo Logistics Corporation New lease

860 W. Crossroads Pky. Romeoville 217,592 LeSaint Logistics New lease

10350 N. Beaudin Blvd. Woodridge 174,008 Canon USA, Inc. New lease

760 Crossroads Pky. Bolingbrook 165,000 Kumho Tire USA, Inc. New lease

2 Gateway Ct. Bolingbrook 163,470 OHL New lease

101 E. Crossroads Pky. Bolingbrook 118,860 Honeywell New lease

A

53

53

59

102

113

71

126

23

47

113170

30

30

34

6

5252

6

45

655 355

294

88 55

55

80

57

Aurora

Plainfield

Minooka

North Aurora

Tinley Park

New LenoxMokena

Kankakee

Bolingbrook

Joliet

Elwood

le Ottawa

Seneca

DownersGrove

Channahon

Shorewood

I-80/Joliet Corridor

Submarket Trends

NetAbsorption

AskingRents

Inventory By City





VACANCY 12,130,879 SF (19.45%)

1Q09 NET ABSORPTION 1,523,400

YTD NET ABSORPTION 1,040,818



The I-80/Joliet Corridor submarket has historically catered to multi-

state “big box” distribution. Its access to I-80 and I-55 position the

corridor well for distribution operations. In addition, the nation’s largest

inland port is located in Elwood. This intermodal development, also

known as Logistics Park – Chicago, has remained a bright spot not

only in the corridor, but for the entire Chicago market. The reason for

its continued success is the development’s ability to offer tremendous

transportation savings to importing operations as well as being a

pre-approved Foreign Trade Zone. This intermodal development has

fueled the region’s growth, while the developments located outside of

the intermodal “campus” are positioned to cater to heavy distribution

prospects whose supply chains are not designed to bring their

international containers inland.

Vacancy and Absorption. The I-80/Joliet corridor experienced a drop

in vacancy during the second quarter for the fi rst time since 2007.

At the end of June, vacancy in the corridor was 19.45%, down from

20.7% in March, resulting in net absorption totaling positive 1,523,400

SF. A large part of this absorption was due to the delivery of grocery

wholesaler Centrella’s new distribution center totaling 934,000 SF at

2600 New Lenox Rd. in Joliet.

“It has become a very opportune time for corporations to consider renegotiating lease

terms or moving into the area.”

I-80/Joliet Corridor Overview

-1,000,000

200,000

1,400,000

2,600,000

3,800,000

5,000,000

7%

10%

13%

16%

19%

22%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09


2Q09


0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

Deliveries (SF)



25%

5%10%

16% 44%

Joliet

Mokena, New Lenox, Shorewood, Frankfort, etc.

Ottawa

Minooka

Elwood

VacancyRate

Pictured Above: 251 Laraway Rd. in Joliet where

California Cartage Company leased 374,460 SF


0

20

40

60

80

100

1,000 – 19,999

SF Available

20,000 – 49,999

SF Available

50,000 – 99,999

SF Available

100,000 – 199,999

SF Available

200,000+

SF Available

# of Buildings

9 MM

2.8 MM

0.4 MM0.6 MM

0.7 MM 1,000 – 19,999 SF Available

20,000 – 49,999 SF Available

50,000 – 99,999 SF Available

100,000 – 199,999 SF Available


Available Space Profi leConstruction. Now that Centrella’s new facility has been

delivered, few new development projects are underway. However,

several planned and proposed projects remain in the pipeline.

The Logistics Park – Chicago intermodal development in Elwood

is preparing to break ground on a 1.2 million SF speculative

facility – one of the few new speculative developments in all of

Chicago. In addition, a new intermodal development has now

recently broken ground in Joliet. The new intermodal is projected

to begin operations in 2010.

Transaction Activity. The most signifi cant transaction during

the second quarter took place at developer Ryan Companies’

Laraway Crossings Business Park, where trucking, warehousing

and freight forwarding company California Cartage signed

a lease for 374,460 SF. Looking to lease vacant space and

secure tenants, institutional owners are becoming increasingly

fl exible with lease terms and rental rates. It has become a very

opportune time for corporations to consider renegotiating lease

terms or moving into the area, as existing vacancy will continue

to cause downward pressure on rental rates.

Looking Forward. Vacancy will remain elevated as even several

signifi cant transactions will not make an appreciable dent on the

more than 12 million SF that sits vacant in the submarket. Multiple

years of positive absorption (particularly of the non-intermodal

developments) must occur before achieving a balance between

supply and demand. With room for growth, excellent access and

transportation options and a sizeable, educated labor pool, the

future of the I-80/Joliet Corridor is promising.

I-80/Joliet Corridor Sale Transactions 2nd Qtr. 2009

I-80/Joliet Corridor Lease Transactions 2nd Qtr. 2009


251 Laraway Rd. Joliet 374,460 California Cartage Company New lease

7979 W 183rd St. Tinley Park 129,873 Owens and Minor New lease


615 E. Kankakee River Dr. Wilmington 71,000 $4,185,000 $58.94 International Transload Logistics Private

22030 Howell Dr. New Lenox 14,602 $300,000 $20.55 Private Trust Fleischhauer Klaus

I-80/Joliet C

orrid

or O

verview

Italics denotes NAI Hiffman transaction


Ind

ian

a

Illi

no

is


Ohare

WestoshaAirport

Chicago ExecutiveAirport

DupageAirport

Gary/Chicago Airp

Chicago MidwayAirport

171

43

22

53

1

176

1

72

38

38

21

120

21

59

176

72

64

120

25

64

50

25

60

83

83

31

31

43

59

53

60

31

47

22

83

23

53

173

173

25

59

53

47

23

53

64

176

76

83

38

173

47

71

23

75

394

20

30

12

41

30

12

34

52

6

52

45

20

30

41

45

30

30

52

14

30

30

45

6

12

14

41

51

51

355

90

55

90

94

94

9094

9480

80

80

55

55

57

57

88

294

294

294

290

290

35539

39

90

Aurora

Plainfield

Hazel Crest

Munster

Glencoe

Hammond

Elk Grove Village

Zion

Lake Zurich

Monee

Crystal Lake

MontgomeryWoodridge

Minooka

Batavia

Arlington Heights

South Elgin

Pleasant Prairie

Grayslake

Skokie

Northbrook

Park Ridge

Franklin Park

Naperville

Highland Park

North Aurora

BedfordPark

Hinsdale

Park Forest

Bensenville

East Chicago

Tinley Park

NilesSchaumburgDes Plaines

St Charles

New Lenox

Romeoville

Bloomingdale

West Chicago

Fox Lake

Dundee

MattesonMokena

Blue Island

Carol Stream

Bolingbrook

Lake Forest

Waukegan

Joliet

Oak Lawn

Sugar Grove

Elgin

Elmhurst

Burr Ridge

MelroseParkGeneva

McHenry

Vernon Hills

BuffaloGrove

Mundelein

MortonGrove

Wood Dale

Cicero

La Grange

Westchester

PalosHeights

Elwood

Rockford

Belvidere

CherryValley

Beloit

elle

La SalleOttawa

Seneca

DeKalb

Hampshire

Chicago

Evanston

WillowSprings

DownersGrove

Streamwood

1

2

3

4

5

6

8

9

10

19

12

13

14

15

16

5317

18

19

11

20

21

7

vansnstonv n

Chicago North1

Chicago South2

North Cook3

West Cook4

Southwest cook5

South Cook6

I-57/Will Corridor7

Lake County8

Northwest Cook9

O’Hare10

Central DuPage11

I-55 Corridor12

McHenry County13

I-90 Northwest14

Fox Valley15

I-88 Corridor16

I-80/Joliet Corridor17

DeKalb County18

I-39 Corridor19

Southeast Wisconsin20

Northwest Indiana21

Industrial Submarket Map

© 2009 NAI Hiffman


Sub

market M

ap / M

ethod

olo

gy / D

efi nitions

The information included in this report is the result of a compilation

and analysis of data from various sources on class A, class B

and class C industrial properties located in the metropolitan

Chicago area defi ned by the submarket map on the opposite

page. NAI Hiffman obtained the information from property

representatives, CoStar Group, RealCapital Analytics, industry

periodicals and magazine, our in-house property database, and

other sources. NAI Hiffman greatly appreciates the participation

of each of these individuals, companies and resources,

without whose help this report would not have been possible.

All of the information detailed throughout this report is saved

and organized in our own in-house database and is regularly

updated. Utilizing this database, we can analyze, calculate and

report demographic information, inventory, vacancy, availability,

net absorption, and transactional information.

Methodology &Defi nitions

Methodology

Defi nitionsThe NAI Hiffman Industrial Market Report tracks several measures

of market conditions. This information is collected for individual

properties then consolidated, organized and analyzed for

submarket and market totals. These terms, used throughout the

report, are defi ned below according to NAIOP Terms & Defi nitions.

Total Inventory (Market Size). The total square footage of gross

rentable area in a specifi c market. It includes the gross rentable

area in buildings that have received a certifi cate of occupancy.

Total inventory increases when a new building is delivered and

decreases when an existing building is destroyed, demolished or

its use changes.

Vacancy Rate. A measurement expressed as a percentage of

the total amount of vacant space divided by the total amount of

inventory. Vacant space is inventory that is not currently occupied.

Net Absorption. The net change in occupied space

in a given market between the current measurement

period and the last measurement period. Net

absorption can be either positive or negative and must

include decreases as well as increases in inventory

levels. For the purpose of this report, sublease space

is included in the calculation of net absorption.

New Supply. The total inventory delivered to the

market since the last measurement period. Delivered

is defi ned as total square footage and/or number

of buildings that has completed construction and

received a certifi cate of occupancy during a stated

period.

Under Construction. Buildings where either: a)

actually ground breaking has occurred (site excavation

or foundation work) and construction is ongoing (not

abandoned or discontinued) but for which a certifi cate

of occupancy has not yet been issued; or b) properties

undergoing conversion to offi ce from another use or

c) properties undergoing a major renovation where

75 percent or more of the building is not available for

lease and building generally requires a certifi cate of

occupancy to be made available for lease.

Available Space. The total amount of space that is

currently being marketed as available for lease in a

given time period. It includes space that is available,

regardless of whether the space is vacant, occupied,

available for sublease, or available at a future date.

Available space excludes shadow space.

Shadow Space. That portion of leased space which

is vacant but not available space. Shadow space is

diffi cult to measure. (Synonym: phantom space)

NAI Hiffman & NAI Global

The Power of Global Reach.

NAI Global is the premier network of independent commercial real estate fi rms and is one of the largest commercial real estate service providers worldwide. What makes us different is the way we bring together people and resources in over 325 offi ces in 55 countries around the world to deliver results for our clients. As the world’s only managed network of commercial real estate fi rms, we conclude over $45 billion in business annually by working together to help our clients strategically optimize their assets. We also manage over 200 million SF of commercial space. For more information, visit www.naiglobal.com.

In 2007-2008, NAI Global received top industry rankings:• Ranked #2 brokerage network by Real Estate Forum• Ranked #3 brokerage by Commercial Property News• Ranked #4 by Lipsey’s Top 25 Real Estate Brands

NAI Global is based in Princeton, New Jersey. A dedicated staff, strategically positioned around the world, providestechnology, marketing and corporate services support to NAI Global’s network of real estate offi ces.

The Power of Local Knowledge.NAI Hiffman is the largest full service, privately-owned commercial real estate brokerage and management company in theChicago region. With over 220 brokers and employees, NAI Hiffman is dedicated to providing our clients with the most comprehensive real estate services. Our clients come to us for our deep local knowledge and they build their business on the power of our global managed network.

NAI Hiffman delivers world-class, results-oriented, offi ce, industrial, retail, and investment brokerage and management services including:

Acquisition & DispositionsLeasing & SubleasingTenant RepresentationProperty Management

Sale/LeasebackBuild-to-SuitInvestment ServicesSite Selection

Due DiligenceMarket ResearchConsulting & Strategic PlanningReceivership & REO Disposition


NAI Hiffman

Dennis Hiffman

Chairman & CEO

630 691 0616

[email protected]

David Peterson, RPA

COO

630 693 0691

[email protected]

Industrial Services

John Cash, SIOR

Exec. V.P. /Managing Director

630 691 0609

[email protected]

Duke Botthof

Executive Vice President

630 693 0641

[email protected]

Brian Colson


630 691 0619

[email protected]

Steve Connolly


630 693 0642

[email protected]

Benjamin Cremer

Vice President

630 691 0614

[email protected]

Kelly Disser

Associate

630 317 0721

[email protected]

Eric Fischer

Senior Associate

630 693 0677

efi [email protected]

Jeff Fischer

Vice President

630 317 0726

jfi [email protected]

Larry Goldwasser

Vice President

312 327 6848

[email protected]

David Haigh

Associate

630 693 0649

[email protected]

Daniel Leahy, SIOR


630 691 0604

[email protected]

Jay Maher, III

Associate

312 327 6846

[email protected]

Irvin Malik

Associate

312 327 6837

[email protected]

Adam Marshall

Senior Associate

630 691 0603

[email protected]

Mark Moran


630 693 0656

[email protected]

Lawrence Much, SIOR


630 691 0606

[email protected]

Michael Robbins

Associate

630 693 0680

[email protected]

Adam Roth, CCIM

Vice President

630 691 0607

[email protected]

Stephen Sullivan

Vice President

847 610 0123

[email protected]

Eric Tresslar

Vice President

630 693 0650

[email protected]

David Troha

Associate

630 693 0696

[email protected]

John Whitehead

Associate

630 693 0643

[email protected]

Daniel Wilkins

Associate

630 693 0653

[email protected]

Investment Services

Chad Firsel


312 327 6855

cfi [email protected]

Arthur Burrows

Senior Vice President

630 693 0675

[email protected]

Kyle Glascott

Associate

312 327 6857

[email protected]

Mike Tenteris

Senior Vice President

312 327 6823

[email protected]

William Montana

Senior V.P./Managing Director

Multifamily Investment Sales

630 317 0715

[email protected]

Brent Jacob

Associate

Multifamily Investment Sales

630 693 0647

[email protected]

Research

Craig Hurvitz

Director of Statistics and

Market Information

630 693 0645

[email protected]

Marketing

Julia Sutherland

Marketing Director

630 317 0701

[email protected]

Jennifer Burke

Catherine DeBoer

Elsa Gaztambide

Karen Kirian

Alison O’Connell

Melody Palese

Denise Racana

Jonathan Skaggs

Alicia Smiley

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