SoMi Industrial Portfolio OM

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12-Month Forecast

Q3 15

Q3 16

Vacancy

6.5%

4.4%

SOUTH MIAMI INDUSTRIAL PORTFOLIO | MARKET OVERVIEW The Property is located within the Miami-Dade County industrial market, which comprises approximately 160 million sq. ft. The County, which is the epicenter of the sprawling South Florida area, is the most populous in the state of Florida and has historically been at the forefront of Florida’s rising population and growing economy. ECONOMY County economic indicators point to improving market conditions. The unemployment rate decrease 1.0 percentage point year-over-year to 6.1%, with 27,900 jobs added within the county from one year ago. Trade, transportation and utilities was a large job creator, up 2.4% or 13,700 jobs in this area alone. MARKET OVERVIEW Vacancy rates remained stable as new product was delivered to market and flight-to-quality reigns in the key submarkets, Airport West and Medley. The overall market direct vacancy rate improved half a percentage point to 6.0% over the last 12 months. Year-to-date leasing activity totaled 2.2 milion square Economic Indicators Market Indicators (Overall, All Classes) Q3 15 Q3 16 12-Month Forecast Miami-Dade Employment 1,227. mil 1,358.6 mil Miami-Dade Unemployment 6.4% 5.6% U.S. Unemployment 5.2% 4.9% Q3 15 Q3 16 12-Month Forecast Vacancy 6.5% 4.4% Net Absorption (sf) 417,699 712,127 MIAMI-DADE INDUSTRIAL

Net Absorption (sf)

417,699

712,127

feet, a 17.0% increase from 1.9 million square feet year-over-year. The significant increase this year was one of the factors in the drop in vacancy and will translate into additional positive absorption as tenants occupy their space. Overall absorption is on track to record its best year in the last decade. Overall direct net asking rental rates across all product lines showed a year-over increase of 9.5% to $6.91 per square foot. The warehouse/distribution sector had a 10.0% jump in asking rent on heightened demand from existing tenant expansions and new-to-market tenants. OUTLOOK The industrial market’s core fundamentals will remain positive for the remainder of the year and into the beginning of 2016 as new constructions stays aligned with increasing demand. Currently, several requirements of 100,000 square foot and beyond for new-to-market tenants as well as local expansions are searching for space. The healthy activity indicates a strong pipeline of positive absorption for the foreseeable future. Economy The economy in Miami-Dade demo strated steady momentum in the third quarter as several key economic indicators remained in positive territory. The mark t finish d the third quarter with an unemployment rate f 5.6%, down 80 basis points (BPS) year- over-year, with the addition of 11,700 jobs. Office-using and construction jobs were the strongest sectors in Miami-Dade. Market Overview The industrial market in Miami-Dade County ended the first half of the year on a promising note. The overall vacancy rate closed the quarter at 4.4% even as 1,738,240 square feet (SF) was delivered in t first nine months of th year. New speculative class A pr duct coming onto the market has steadily been leased up with an influx of larger sized tenants (+80,000 SF) circling the market. One reason for the rise in leasing activity was the high ownership costs coupled with a surge in new projects that has led to a better cost structure for leasing compared to ownership for prospective tenants. Overall Ne Absorption/Over ll Asking Rent 4Q TRAILING AVERAGE Under Construction (sf) 1,076,390 4,507,643 Average Asking Rent* $6.95 $7.32 *Rental rates reflect net asking $PSF/year $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 -300.0 -100.0 100.0 300.0 500.0 700.0 900.0 2011 2012 2013 2014 2015 2016 Net Absorption, SF (thousands) Asking Rent, $ PSF Leasing activity totaled 892,000 square feet (SF) in the third quarter with a majority of space leased in the Airport North, Airport West, and Medley submarkets. As a major logistical market, warehouse/distribution space accounted for an impressive 92% of the total space leased and accounted for the majority of the 4.5 million square feet (SF) of total space currently under-construction. Over 30% of the space under construction has been pre-leased with activity and demand driven by e-commerce and logistics companies. The market has recorded 2.2 (MSF) of positive overall net absorption year-to-date. Limited developable land has hiked land prices back to or above peak while tenant demand for product remains strong. These factors had the effect to push up direct rental rates for all property types to $7.32 per square foot triple net. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2011 2012 2013 2014 2015 Historical Aver g = 6.9% Overall Vacancy 2016

Under Construction (sf)

1,076,390 4,507,643

Average Asking Rent*

$6.95

$7.32

MI AMI - DADE COUNTY I NDUSTR I AL TRENDS - Q3 20 1 6

*Rental rates reflect net asking $PSF/year

Overall Net Absorption/Overall Asking Rent 4Q TRAILING AVERAGE

-300.0 -100.0 100.0 300.0 500.0 700.0 900.0

$2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00

2011 2012 2013 2014 2015 2016 Net Absorption, SF (thousands)

Asking Rent, $ PSF

Overall Vacancy

62 |