West Palm Small Bay Industrial Portfolio

Market Overview - Industrial

The industrial market in Palm Beach totals 40.8 million square feet and is divided into seven submarkets which are all adjacent to Interstate 95. Palm Beach County is served by interstate 95, Florida’s Turnpike, and numerous major state roads and highways which facilitates easy distribution to a large market area. West Palm Beach is home to an international airport and five smaller executive airports as well as Tri- Rail commuter rail line which links Miami, Ft. Lauderdale and West Palm Beach along a 71 mile long system with 18 stations. As shown in the chart below, approximately 60% of inventory is considered warehouse/ distribution with the balance generally even split between flex and manufacturing. A total of 932,000 ± SF was absorbed in 2016. Palm Beach County is part of the Miami-Fort Lauderdale-Pompano Beach Metropolitan Statistical Area and benefits from its location in one of the more dynamic and evolving markets in the U.S. The region is bolstered by a constant influx of new residents and further integration through international tradewithCentral and SouthAmerican economies. Companies are attracted to Palm Beach County due, in part, to a well- educated employment base, strong infrastructure linkages, competitive business climate, and high quality of life. PalmBeach County has become an attractive and cost-effective location over the past several years as

the industrial markets in Miami-Dade and Broward County to the south have become increasinglymore expensive. Similar to other South Florida markets, the Palm Beach County industrial market is defined by the lack of large blocks of vacant space for existing tenant expansions or new to market entrants. To meet current demand and take advantage of future growth, new construction picked up in 2016 but nearly enough to keep pace with tenant demand. Almost 595,000 square feet came online in 2016, with 736,000 square feet under construction. These additions to inventory will do little to shift the balance of power from landlords to tenant and, as a result, sharp rental rate increases are expected to continue for the foreseeable future.

PALM BEACH INDUSTRIAL MARKET STATISTICS Fourth Quarter 2016 SUBMARKETS

PALM BEACH I NDUSTR I AL MARKET STAT I ST I CS FOURTH QUARTER 20 1 6

Direct

Quarter

YTD

YTD

YTD

Overall

Direct

Wtd. Average

Overall Net Absorption

Overall Net Absorption

Leasing Activity

Construction Completions

Under

No. Bldgs.

Inventory

Vacancy Rate

Vacancy Rate

Rental Rates (psf)

Construction

OVERALL MARKET

Boca Raton

166

7,217,431 3,966,758 2,375,667 2,323,877 1,826,442 9,122,775 13,987,196 40,820,146 3,464,524 2,912,296 1,636,752 1,197,634 6,901,029 9,277,561 26,307,529 917,733

5.4% 3.8% 2.9% 9.5% 4.7% 2.0% 4.5% 4.2% 3.8% 3.9% 2.1% 5.8% 2.4% 4.5% 4.0% 12.8%

5.3% 3.8% 2.9% 9.5% 4.7% 2.0% 4.4% 4.2% 3.8% 3.9% 2.1% 5.8% 2.4% 4.5% 4.0% 12.8%

$12.26 $10.06 $11.40 $11.72

-21,439 -14,747 157,229 15,493 25,250 -8,997 29,026 181,815

106,078 -18,797 192,353 20,975 23,600 153,313 454,319 32,454 -8,205 170,419 28,300 147,740 326,883 2,210

11,889

0 0 0 0 0 0

0 0 0

Jupiter

86 75 48 65

6,485

Delray Beach Boynton Beach

114,163 61,544

53,500 252,000

Lake Worth

$7.51 $8.33

7,780

Riviera Beach

215 342 997

184,541 290,830 677,232

0

West Palm Beach

$10.63 $10.72

594,672 594,672

431,431

931,841

WAREHOUSE/DISTRIBUTION

Boca Raton

74 55 52 24 41

$11.81

-4,262 -7,804

5,560

0 0 0 0 0 0

0 0 0

Jupiter

$9.50

0

Delray Beach Boynton Beach

$11.23 $11.67

155,229 -3,172 25,250 -11,022

114,163 45,323

53,500 252,000

Lake Worth

$6.88 $8.20

7,780

Riviera Beach

152 199 597

150,740 265,783 589,349

0

West Palm Beach

$10.17

3,204

594,672 594,672

431,431

TOTAL

$9.97

157,423

699,801

*Overall figures includesubleaseanddirect space.

Nowarrantyor representation,expressor implied, ismade to theaccuracyof the information containedherein,and thesame is submitted toerrors,emissions, changeof price, rentalor conditions,withdrawalwithoutnotice,and toany special listingconditions imposedbyourprincipals.

// 38 OFFICE SERVICES/FLEX Boca Raton

68 16 16

2,788,977

7.8% 6.9% 6.0%

7.6% 6.9% 6.0%

$13.20 $11.72 $11.57

-17,177 -6,943

32,262 -10,592 -3,666

6,329 6,485

0 0 0

0 0 0

Jupiter

554,874 568,932

Delray Beach

2,000

0