Industrial market continues strong performance spurring construction

MARKETVIEW Des Moines Metro Industrial, Q1 2018 Industrial market continues strong performance spurring construction Overall Vacancy Rate 6.9% Lease Rate NNN $4. PSF T-12 Net Absorption 1.48 MSF Under Construction 1. MSF Historical Vacancy Rates By Property Type 30% 2% 20% 14.40% 1.00% 14.0% 13.30% 1% 10% % 0% 9.30% 6.% 7.% 4.90% 7.20% 4.60% 4.30% 9.40% 4.30% 3.20% 2.0% 2.70% 3.30% 8.% 10.0% 2.00% 9.60% 8.40%.20% 6.70% 6.20% 8.00% 8.4% 2010 2011 2012 2013 2014 201 2016 2017 2018 Total Warehouse Total Manufacturing Total Flex HIGHLIGHTS Daimler North America occupied it s 24,000 SF distribution center at Legacy Park in Grimes. Quality Manufacturing leased 10,000 SF at 701 Park Avenue in Des Moines. Anderson Properties delivered a 1,000 SF flex building at Legacy Park in Grimes, of which 63,000 SF is leased to Insta-Pro International. Graham Group completed site work on their 103 acre Broadway Industrial Complex. The first of two buildings is under construction and will contain 237,00 SF with a Summer 2018 delivery. R&R Realty Group announced plans to construct a 300,000 SF facility in Prairie Business Park. 1.6M SF of new warehouse inventory was added to the market over the last 12 months with positive absorption of 1.3M SF over that same period. OUTLOOK The industrial and logistics market remains on solid footing and continues to expand. Demand has slowed a bit from it s well-above-average run between 2014 and 2016, but 2017 s net absorption of 1.48 million sq. ft., bolstered by 3PL (third party logistic) tenants and owner occupied expansions, is right in line with the average over the cycle that began in 2010. Consistent demand for all types of industrial space, rational levels of new speculative construction and stable rents have been this cycle s hallmarks resulting in an overall healthy market. In our view, although the economic cycle is a bit extended, Des Moines is still at a very early stage in the e-commerce and omnichannel cycle. Given the growing service requirements of the consumer in this ondemand world combined with projected population and job growth and proximity to Interstate / demand for industrial real estate in greater Des Moines should not wane anytime soon. Q1 2018 INDUSTRIAL 2018 CBRE Hubbell Commercial 1

MARKETVIEW GREATER INDUSTRIAL SUBMARKET UPDATES Western Suburbs Industrial demand remains strong and development is occurring in nearly all of the communities that make up the Western Suburbs, including Grimes, Johnston, Urbandale, Waukee, and West Des Moines. Construction has been stout and ten new warehouse buildings have been added, which increased the warehouse inventory over 70,000 square feet within this submarket. Predominant uses include warehousing, transit, storage, church, and recreational uses. In Grimes, Hubbell Realty Company added the fourth 110,000 square foot warehouse within the Grimes Distribution Center. Within the same neighborhood Daimler North America completed and occupied their 24,000 square foot distribution center. The second warehouse within the Prairie Business Park has been completed and contains 20,000 square feet. Also in Prairie Business Park, the developer R&R Realty Group recently announced plans to construct a 3rd phase containing 300,000 SF. Northeast/Ankeny The portion of Northeast Des Moines that is located north of I-, between NE 14th Street and I- is converging on the city limits of Ankeny, and the lines between the two communities are becoming blurred. Strong activity is occurring in this sector as nine new warehouse buildings have been completed. This adds over 0,000 square feet of inventory over a 12 month period across the two submarkets. OPUS Group is nearing completion of Phase 2 of their planned three building development in Ankeny s Corporate Woods Industrial Center. The second building consists of 200,688 square feet. The planned third building will be approximately the same size. Graham Group has completed their 300,000 square foot warehouse and distribution center at 6812 NE 22nd Street. They are also developing a new warehouse complex next to the NE I / interchange in Des Moines. The 103-acre site is being developed in two phases. Phase one includes a 237,00 square foot warehouse that will be ready for occupancy in summer 2018. Phase two includes the development of a 67,000 square foot warehouse building which will be available for occupancy in summer 2019. Baker Group has completed their home office/ warehouse in Ankeny, located at 1600 Southeast Corporate Woods Drive. The new building consists of 141,616 square feet. In Altoona, a new training center for the Council of Carpenters has been completed which includes nearly 0,000 square feet of space. South The South submarket experienced new construction and significant positive absorption since the previous survey. EP2 constructed a new office/ warehouse consisting of 242,0 square feet and moved operations from their prior location on Hull Avenue. Quality Manufacturing is expanding and now occupies the former vacant space located at 701 Park Avenue. GK Services now fully occupies the high cube warehouse located in the Airport Commerce Park along Army Post Road. Atlantic Coca-Cola Bottling Company moved their operations from Waukee, as they purchased the 40,000 square foot office and distribution facility located at 3600 Army Post Road. Today Atlantic utilizes a majority of the facility and offers approximately 9,000 square feet for lease. Average Asking Lease Rates ($/sq. ft. nnn) 7.7 6.7.7 4.7 3.7 2.7 1.7 $3.06 $3.9 $4.9 $7.0 Top Recent Lease/Sale Transactions Pre 1970 Post 1970 New Spec Construction Flex Tenant/Buyer Size Type Property City Submarket Quality Manufacturing 10,000 Lease Park Avenue Des Moines South Daimler Trucks North America 24,000 Lease Legacy Business Park Grimes Western Suburbs XPO Logistics 300,000 Lease 6812 SE Delaware Ankeny Ankeny Bell Avenue Properties 72,09 Sale Interstate Distribution Center Urbandale Western Suburbs Q1 2018 INDUSTRIAL 2018 CBRE Hubbell Commercial 2

MARKETVIEW GREATER INDUSTRIAL NET ABSORPTION Absorption of warehouse space was positive over the trailing 12 months, with over 1,300,000 square feet of positive absorption across all submarkets. The South submarket and Ankeny submarket were the two biggest drivers for this positive absorption, with 930,176 square feet absorbed in the South submarket and 20,94 square feet absorbed in the Ankeny submarket. The Western Suburbs submarket also experienced positive absorption of 118,6 square feet. Absorption of manufacturing space was slightly positive overall, 8,404 square feet, driven by the Northwest and Northeast submarkets. The Western Suburbs submarket experienced the largest decline in absorption with over 40,000 square feet of negative absorption. FLEX All of the flex space is considered to be competitive space. Over 60% of the flex market is located in the Western Suburbs submarket, which has more inventory than the other submarkets combined. New construction of flex space is limited, yet two new flex buildings have been added in the last 12 months. Anderson Properties added a new flex building in Grimes, west of Highway 141, and south of SE 19th Street in Legacy Park. The new building consists of Net Absorption MILLIONS OF SQAURE FEET 1.60 1.40 1.20 1.00 0. 0.60 0.40 0.20 0.00-0.20-0.40 201 2016 2017 2018 Flex Warehouse Manufacturing 1 1,000 square feet and will house multiple tenants including 63,000 SF leased to Insta-Pro International. A second new flex building is located west of I- and south of Corporate Woods Drive and contains 18,64 square feet. Vacancy levels increased slightly from 6.8% in Q1 2017 to 7.7% in Q1 2018 as the new buildings are in the initial stages of lease-up. Absorption of flex space was positive overall, at 92,47 square feet. Under Construction Property Size Delivery Date Developer City Submarket Broadway 237,00 Summer 2018 Graham Des Moines Northeast Prairie Business Park 300,000 Q4 2018 R&R Realty Grimes Western Suburbs Corporate Woods Industrial Center 200,688 Q3 2018 Opus Group Ankeny Ankeny LABOR MARKET AND EMPLOYMENT Des Moines Labor Market The Des Moines Metropolitan Area continues to outpace the Midwest & the U.S. in year-over-year job growth. Des Moines ended 2017 with a 2.6% growth rate and outpaced the U.S. by 110 basis-points (bps). The jobless rate is down to its lowest level in 17 years. Des Moines remains in an expansion cycle which will yield positive long term growth. The outlook for Des Moines will remain positive over the next year with income and spending gains expected to meet or exceed the national average. 3 2 1 0-1 -2-3 -4 Des Moines U.S. 2010 2011 2012 2013 2014 201 2016 2017 Q1 2018 INDUSTRIAL 2018 CBRE Hubbell Commercial 3

MARKETVIEW GREATER INDUSTRIAL Market Statistics Market Rentable Area Vacant Vacancy Rate (%) Net Absorption Under Construction Greater Des Moines Warehouse Pre 1970 9,038,413 781,31 8.6 (361,221) Warehouse Post 1970 26,77,381 2,214,73 8.3 1,693,003 1,3,188 Manufacturing Pre 1970 7,77,16 244,240 3.2 116,016 Manufacturing Post 1970,782,43 106,974 1.8 (7,612) Flex,400,940 422,240 7.8 92,47 TOTAL 4,74,793 3,769,342 6.9 1,482,643 Western Suburbs Warehouse Pre 1970 1,236,077 0 0.0 () Warehouse Post 1970 9,469,197 1,221,26 12.9 118,841 300,000 Manufacturing Pre 1970 1,296,37 0 0.0 0 Manufacturing Post 1970 1,742,326 9,239 3.4 (43,8) Flex 3,448,3 27,866 8.0 97,693 CBD Warehouse Pre 1970 1,1,48 378,117 33.3 (32,740) Warehouse Post 1970 1,773 33,983 20. (17,78) Manufacturing Pre 1970 190,49 38,4 20.2 (20,92) Manufacturing Post 1970 4,00 0 0.0 0 Flex 89,697 32,433. (2,9) Northwest Warehouse Pre 1970 714,00 63,0 8.9 0 Warehouse Post 1970 20,086 61,370 11.8 (1,60) Manufacturing Pre 1970 79,87 48,47 6.1 0,139 Manufacturing Post 1970 0,87 0 0.0 0 Flex 99,161 6,743 6.8 0 Northeast Warehouse Pre 1970 4,084,73 224,661. (333,192) Warehouse Post 1970 10,107,08 96,343.9 147,276 912,00 Manufacturing Pre 1970 4,340,106 143,223 3.3 86,2 Manufacturing Post 1970 1,76,713 21,081 1.2 (14,04) Flex 86,110 2,164 8.9 (3,17) South Warehouse Pre 1970 1,96,438 60,6 3.8 9,068 Warehouse Post 1970 2,494,1 0 0.0 871,108 Manufacturing Pre 1970 388,600 13,990 3.6 0 Manufacturing Post 1970 783,94 26,4 3.4 0 Flex 237,370 0 0.0 0 Ankeny Warehouse Pre 1970 271,610 4,322 20.0 (4,322) Warehouse Post 1970 4,018,016 301,1 7. 74,916 440,688 Manufacturing Pre 1970,921 0 0.0 0 Manufacturing Post 1970 1,394,463 0 0.0 0 Flex 440,274,034 12. 640 Q1 2018 INDUSTRIAL 2018 CBRE Hubbell Commercial 4

MARKETVIEW GREATER INDUSTRIAL GREATER ECONOMIC DATA Population 6,000 (2017 MSA) Unemployment Rate 2.6% LARGEST EMPLOYERS EMPLOYEES Wells Fargo & Company 14,00 UnityPoint Health - Des Moines 7,797 Mercy Medical Center 7,0 Hy-Vee, Inc. 6,400 Principal 6,182 Nationwide 4,442 John Deere 3,089 Vermeer Corporation 2,00 DuPont Pioneer 2,49 JBS USA 2,300 Pella Corporation 2,224 Kum & Go 2,043 Wellmark Blue Cross Blue Shield of Iowa 1,0 UPS 1,600 Firestone Agricultural Tire Co. 1,600 YMCA of Greater Des Moines 1,4 Athene 1,320 EMC Insurance Companies 1,300 Casey's General Stores 1,200 Tyson Fresh Meats, Inc. 1,200 12 Month Change in employment 2.6% Other Services, 4% Government, 12% Construction, 6% Manufacturing, % Leisure and Hosp Services, 10% Trade Transportation/Utilities, 18% Information, 2% Education and Health Services, 14% Professional and Business Services, 14% Financial Activities, 1% Sources: Greater Des Moines Partnership Bureau of Economic Analysis US Bureau of Labor Statistics - December 2017 Q1 2018 INDUSTRIAL 2018 CBRE Hubbell Commercial

SCHOOL ST WOODLAND AVE HIGH ST INGERSOLL AVE SCHOOL ST 1TH ST LINDEN ST 16TH ST 1TH ST 1TH ST CENTER ST CROCKER ST TUTTLE ST SCHOOL ST PLEASANT ST TUTTLE ST 7TH ST 7TH ST CENTER ST WATSON POWELL JR WAY ELM ST TH AVE PARK ST MURPHY ST 3RD ST E 4TH ST W MARTIN LUTHER KING JR PKWY LYON ST SE 7TH ST E 9TH ST LYON ST 44 R22 MILLS CIVIC PKWY NW 142ND ST JORDAN CREEK PKWY HICKMAN RD Racoon River NW 1TH ST 141 UNIVERSITY AVE NW 100TH ST 100TH ST GRAND AVE NW 70TH AVE EP TRUE PKWY 86TH ST NW 86TH ST 2 RAILROAD AVE DOUGLAS AVE. 63RD ST SW 63RD ST MERLE HAY RD Saylorville Lake INGERSOLL AVE GRAND AVE INTERNATIONAL AIRPORT FLEUR DR Des Moines River Grays Lake SW 9TH ST STATE ST 41 ARMY POST RD ANKENY BLVD 69 BROADWAY AVE E EUCLID AVE SE 14TH ST 69 DELAWARE AVE DELAWARE AVE 2 ANKENY REGIONAL AIRPORT E UNIVERSITY AVE NE 78TH AVE SW 8TH ST N 1ST ST 163 MARKETVIEW GREATER INDUSTRIAL METHODOLOGY Inventory of each property type is based on the Polk County Assessor s records and municipal building permits. The public data is further refined and classified through a variety of direct contacts and physical inspections. Properties are grouped by property type, age, and broad geographic region. All industrial, flex, and manufacturing space is considered competitive space since occupiers can change from long-term to short-term leases, and from leasing to owner-occupying space. Therefore, occupancy estimates of these categories are based on the actual occupancy of the entire inventory of space. Warehouse Individual bulk storage and distribution warehouse properties 7,00 SF and larger are all considered. Special use properties such as cold storage facilities and truck terminals with multiple doors used to transfer freight between trucks are not included. Manufacturing Light and heavy manufacturing facilities 7,00 SF and larger are all considered. Truck shops and other service facilities are not included. Other special use properties, such as bulk oil facilities are also not included. Flex This multi-purpose space typically contains a better quality front facade, but also contains dock high or drive-in doors at the rear of the building. This type of space is designed to easily accommodate 100% finish or any combination of office, retail, showroom, and warehouse. SUBMARKET BOUNDARIES Central Business District (CBD) - Includes the Western CBD and the East Village, extending west to Martin Luther King Jr. Parkway and east to East 14th Street. Northeast - Consists of Northeast Des Moines (extended south to the Des Moines River), Pleasant Hill, Altoona, Eastern Saylor Township, and Delaware Township. Western Suburbs - Encompasses West Des Moines, Clive, Urbandale, Windsor Heights, Johnston, Grimes, Waukee, and some unincorporated areas of Polk, Dallas, and Warren Counties. Northwest - Includes Northwest Des Moines and Western Saylor Township. E GROVE AVE MARTIN LUTHER JR PKWY MARTIN LUTHER KING JR PKWY FLEUR DRIVE 20TH ST CROCKER ST 19TH ST 19TH ST 18TH ST 18TH ST 17TH ST 17TH ST 17TH ST 16 TH ST 1TH ST W MARTIN LUTHER KING JR PKWY OAKRIDGE DR SW 16TH ST OAKRIDGE AVE HIGH ST GRAND AVE GRAND AVE GRAND AVE GRAND AVE E GRAND AVE 13TH AVE 12TH ST Western Gateway Park KEOSAUQUA WAY 9 TH ST 8TH ST 6TH AVE 6TH AVE 6TH AVE 7TH ST SW 7TH ST WALNUT ST WALNUT ST 3RD ST 3RD ST SW 3RD ST SW 2ND ST LOCUST ST LOCUST ST LOCUST ST LOCUST ST SE 14TH ST 12TH ST 12TH ST CENTER ST 11TH ST 10TH ST 9TH ST 8TH ST 1 Grand W MARTIN LUTHER KING JR PKWY CHERRY ST 8TH ST 2 TH AVE MULBERRY ST SCHOOL ST Iowa Events Center 4TH ST TH AVE SW TH AVE COURT AVE COURT AVE E COURT AVE 4TH ST W RIVER DR Civic Center Court Avenue District VINE ST Des Moines River MARKET ST SW WATER ST ROBERT D RAY DR MAPLE ST SW WATER ST E 1ST ST Principal Park E TH ST LYON ST ST ST E 2ND ST Racoon River E 3RD ST Des Moines River Botanical Center East Village E 4TH ST E 4TH ST E VINE ST WALNUT ST E WALNUT ST E TH ST E MARKET ST E ELM ST State Historical Museum E 9TH ST RACCOON ST SE 8TH ST E 12TH ST E 12TH ST SCOTT AVE SCOTT AVE SE 6TH ST E 6TH ST PENNSYLVANIA AVE METROPOLITAN AREA State Capitol SE 9TH ST SE 10TH ST E 1 3TH E 13TH E 14 TH ST SE 14TH ST E 14TH ST South - Comprises Southwest Des Moines, Southeast Des Moines (south of Des Moines River), and some unincorporated areas of Polk and Warren Counties. Ankeny - Evaluated separately. CENTRAL BUSINESS DISTRICT (CBD) 6 DALLAS WAUKEE RACCOON RIVER DR MADISON GRIMES CLIVE URBANDALE CUMMING NW BEAVER DR JOHNSTON WINDSOR HEIGHTS WEST SUBURBS WEST 6 NORWALK POLK NW ML KING JR PKWY ANKENY CBD SOUTH HUBBELL AVE WARREN 69 NE 6 PLEASANT HILL ALTOONA CARLISLE BONDURANT 2018 - Hubbell Commercial Brokers, L.C., d/b/a CBRE Hubbell Commercial and Frandson & Associates. The information contained herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we make no guarantee, warranty or representation, either expressed or implied, as to its accuracy or completeness.

Commercial Real Estate Advisory and Transaction Services 6900 Westown Parkway West Des Moines, Iowa 0266 +1 1 224 4900 Fax +1 1 221 62 www.cbre.com/desmoines Licensed in the state of Iowa. FRANDSON & ASSOCIATES, L.C. Frandson & Associates, L.C. is a full service commercial real estate appraisal and consulting firm based in Des Moines, Iowa. The principals and associates of Frandson & Associates, L.C. have extensive experience in evaluating complex commercial, industrial, multi-family, development and special use properties. Financial Center, Suite 11 6th & Walnut Des Moines, Iowa 0309 1.247.0040 Fax 1.247.0044 www.frandsonandassociates.com