Johns Manville RFQ

Dallas-Fort Worth Industrial Q1 2018 MARKETBEAT

Request for Qualifications

MARKET KNOWLEDGE

DFW INDUSTRIAL MARKET

Econom The Dalla thrive as According increased people at new resid Dallas-For 87,000, dr (bps) to 3. added, 28 sector, wh transporta utilities ca sector an industrial Market With the expanded North Tex the cover (msf) of in space. Not buildings t The Dallas closing Q1 bps decre of Q1 2017 (6.3%), an declines, bps, respe Dallas-For net absor recorded types, pos growth ac the DFW the larges first quart Logistics

DALLAS INDUSTRIAL

Dallas/Fort Worth is one of the top Industrial markets in the U.S. do in large part to its opportunity for new construction as well as strong labor, wages, low cost of living and lower real estate costs compared to other comparable industrial hubs nationwide. With a total market size in excess of 700M square feet, and growing by approximately 20-25M SF per year for the last 4 years, it continues to be considered for a prime location of both major distribution centers and manufacturing plants across all business sectors. DALLAS INDUSTRIAL Economic Indicators*

Economic Indicators*

12-Month Forecast

Q1 17

Q1 18

DFW Employment

3,565k

3,652k

DFW Unemployment

4.0%

3.4%

U.S. Unemployment

4.7%

4.1%

*Q1 data is based on the average of January & February values

Overall Vacancy Dallas-Fort Worth Industrial Q1 2018 MARKETBEAT

Market Indicators (Overall, All Property Types) Q1 17 Q1 18

12-Month Forecast

6.9%

6.4%

Net Absorption (SF)

5.3M

3.2M

Under Construction (SF)

21.2M 20.2M

Average Asking Rent*

$4.96

$5.40

$3.50 Economy The Dallas-Fort Worth-Arlington thrive as population and employ According to Moody’s Analytics, t increased by 136,000 year- ver-ye people at the end of March. Equatin new residents each day. During the Dallas-Fort Worth-Arlington employ 87,000, dropping the unemploymen (bps) to 3.4% at the close of Q1 2018. added, 28% (24,500 jobs) can be att sector, which is comprised of good transportation, and utilities. The tra utilities category accounts for 61% sector and is the leading indicat industrial space. Market Overview With the first quarter of 2018, expanded its industrial researchtore North Texas market. Nearly 800,00 the coverage area, encompassing (msf) of inventory, bringing the total space. Note: Cushman &Wakefield o buildings that are at least 20,000 sq The Dallas-FortWorth industrial mar closing Q1 2018 with a vacancy rate bps decrease when compared to th of Q1 2017. Year-over-year, Alliance ( (6.3%), and Far North I-35E (3.2%) le declines, with rates dropping 590 bps, respectively. $4.00 $4.50 $5.00 $5.50 $6.00 2016 2017 Q1 2018

*Rental rates reflect net asking $PSF/year

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE

12-Month Forecast

Q1 17

Q1 18

7.0

Opportunities for manufacturing in DFW remain strong across most of our major submarkets depending on the end user’s specific needs. C&W will help guide our Johns Manville’s site selection based upon the determinant factors that are important to their business such as labor, utilities, incentives, site parameters and more. Over this current economic cycle DFW has seen a dramatic decrease in vacancy to its current level of 6.4% which with increases in the cost of construction has also caused increases is both lease rates and purchase prices across all sub markets. The lowest costs in real estate remain in the South Dallas corridor due to its vast amount of land/expansion options and new construction delivered to the market in recent years as well as lower tax basis. Before focusing on any one particular area C&W will advise to look at all to compare what is important to Johns Manville. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 2012 2013 2014 2015 2016 2017 Q1 2018 Net Absorption, MSF Asking Rent, $ PSF Overall Vacancy Market Indicators (Overall, All Property Types) Q1 17 Q1 18 12-Month Forecast Overall Vacancy 6.9% 6.4% Net Absorption (SF) 5.3M 3.2M Under Construction (SF) 21.2M 20.2M Average Asking Rent* $4.96 $5.40 DFW Employment 3,565k 3,652k DFW Un mployment 4.0% 3.4% U.S. Unemployment 4.7% 4.1% *Q1 data is based on the av rage of January & February values

10.0% 11.0%

*Rental rates reflect net asking $PSF/year

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE

2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

7.0

10-Year Historical Average = 6.9% 5-YEAR HISTORICAL AVERAGE = 6.9% $6.00

6.0

$5.50

5.0

$5.00

4.0

3.0

$4.50

2.0

2012

2013

2014

2015

$4.00

1.0

0.0

$3.50

2012

2013

2014

2015

2016

2017 Q1 2018

Net Absorption, MSF

Asking Rent, $ PSF

JOHNS MANVILLE | CUSHMAN & WAKEFIELD 16

Overall Vacancy