HOUSTON INDUSTRIAL MARKET

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET FIRST QUARTER 8 Industrial Market Continues Push Forward Construction Pipeline Nears 8. million SF OV E R V I E W Keep Market Strong The Houston industrial market continues to move full steam ahead as vacancy rates remain extremely tight and the construction pipeline remains robust. Absorption in the first quarter was driven by preleased deliveries as 84% of the. million SF delivered to the market had commitments. Amazon s. million SF distribution center in Katy was the largest project to deliver over the quarter and is currently supplying 4 new jobs in the market with the potential for over, jobs in the future. The recovery efforts from Harvey coupled with the expansion of the Houston Port and the rise of ecommerce have continued to provide a boost to the industrial sector. Construction activity increased by 9% (7.8 million SF) over the quarter with 4% preleased. As demand for warehouse/distribution space has driven the market, developers have broken ground on several large spec projects to accommodate demand. Contrary to warehouse/ distribution, the flex market remains under pressure from the softened office sector. Net Absorption by Sector SECTOR Q 8 Flex 78, SF (35,) SF Total,564, SF,87, SF Vacancy by Sector OVERALL Flex 9.% 9.4% NET ABSORPTION.3% 3.% Preleased Deliveries Drive Absorption 4.5% 4.7% Total 4.5% 4.9% Net absorption remained strong for the first quarter totaling.8 million SF, bringing the month rolling total to 8. million SF. Warehouse/ Distribution space recorded the highest absorption of any property type with.6 million SF absorbed over the first quarter. space recorded negative absorption of 35, SF over the first quarter. SECTOR Notable Q Leases TENANT McLane Company SF LEASE TYPE BUILDING SUBMARKET 84, Expansion Interstate Commerce Center North Far EastSoutheast Far UNIS 57,835 New 535 Red Bluff Rd TAS Energy 4, New Fidelity Road Industrial Park Southeast Near Richardson Steel 38,9 New 333 Clinton Dr Southeast Near MAN Diesel & Turbo 37,434 New Twinwood Business Park Southwest Far Banta Corporation 9,6 Renewal West by Northwest Business Park Northwest Near

HOUSTON METRO MARKET FIRST QUARTER 8 Flex space absorption remained flat over the quarter recording 78, SF. The Northwest Far market led the way with. million SF of absorption, driven by Amazon s. million SF distribution center coming online in the first quarter. Preleased deliveries counted for a substantial portion of absorption as.7 million SF was leased before delivery in the first quarter. Strong warehouse/distribution demand and large buildtosuit projects under construction should continue to drive absorption through the balance of 8. Industrial Under Construction Houston Metro Q 8 SF % PRELEASED EastSoutheast Far 3,48,94 4% Northwest Far,939,744 % North Far SUBMARKET,768,46 53% VAC A N C Y SW Near 55, % Vacancy Remains Below 5.% South Far 7,593 3% The overall industrial vacancy rate (including sublet) ended the year at 4.9%, up marginally from 4.8% at the close of the fourth quarter. Direct vacancy remained unchanged over the quarter,coming in at 4.5%. continues to have the lowest direct vacancy of all property types recording.3% in the first quarter, slightly up from the.% last quarter. Although Flex space has the highest vacancy rates, the market did see a decline over the quarter. Direct vacancy stood at 9.% down from 9.7% at the end of 7 and overall vacancy was 9.4%, a.5% decrease over the same period. space remained flat over the quarter, closing at 4.5% for direct and 4.7% for overall vacancy, compared to 4.4% and 4.6%, respectively in the fourth quarter. Vacancy rates look to remain extremely tight in the period ahead as tenants continue to lease up space and buildtosuit projects deliver to the market. Southwest Far 6,5 % Speculative Construction Activity Increases At the close of the first quarter, the construction pipeline was up to 7.8 million SF, up approximately 6 K SF over the end of the year. Build to suit projects remain active with projects such as Emser Tile (6K SF, North Far), Best Buy (55K SF, Southwest Near) Vinmar International (5K SF, EastSoutheast Far) still in the pipeline and anticipated to deliver by the end of the year. Over the past few quarters, spec construction activity has picked up as vacancy rates have remained tight and demand stays high. The largest spec projects that are currently under construction include Oakmont West (674K SF, Northwest Far), Port Crossing Commerce Center (6K SF, EastSoutheast Far), Northwest Logistics Center (4K SF, Northwest Far) and Point North Cargo Park (337K SF, North Far). Additionally, in the first quarter, there was. million SF of deliveries at 84% preleased. Deliveries were led by the. million SF completion of Amazon s distribution center in Katy. The construction pipeline will likely remain robust throughout the year as new projects break ground such as Southwest Commerce Center, a 477,355 SF speculative building located in the Southwest Far submarket. Total, % 7,8,94 4% INDUSTRIAL DELIVERIES HOUSTON METRO SF Leased at Delivery SF Available at Delivery 5 Millions of SF S U P P LY A N D D E V E L O P M E N T Northeast Near 5 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 7% 67% 84% 6 7 8 9 3 4 5 6 7 8* SOURCE CoStar, Transwestern Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory.9 MSF 55.5 MSF Overall Vacancy 8.8% 4.9% Q Net Absorption.4 million SF.8 million SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E AL E STATE OUTLOO K HO UST ON MET RO Q 8

RENTAL RATES Weighted Average Rents Decline Overall industrial rental rates closed the first quarter at $6.6 NNN, down marginally from the $6.63 NNN rents recorded in the fourth quarter. rates remained flat closing the first quarter at $6.35 NNN, from $6.34 NNN in the fourth quarter. rates were $6.9 NNN, down from $6.6 NNN at the end of 7. Flex rental rates were $9.39 NNN for the quarter, up from $8.9 NNN over the same period. Rental rates have remained compressed with tenants having a high sensitivity to rental rate increases and the landlord's want to continue to maintain or gain occupancy. However, the dwindling availability of desirable land tracts has pushed land values upward over the past several quarters. As this trend continues, rental rate appreciation should follow over time. INVESTMENT SALES Investment Activity Tops $M The metro recorded $3. million in industrial sales transactions during the first quarter, down 5% from the fourth quarter which recorded $7. million in sales. While cap rates covered a wide range, depending on the type and class of product, they averaged 7.3% in the first quarter. Sales activity was highlighted by the acquisition of 7 Telge (7,644 SF, warehouse/distribution property) by Crow Holdings Industrial from Albertsons Cos. Plans are to expand the site to include three more properties to accommodate cold storage and distribution industries. Given the stable fundamentals of the market and abundance of investment capital, Class A properties cap rates hover in the low 56% range, while Class B rates are in the 79% range. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $ $8 $6 $4 $ $ SOURCE Real Capital Analytics, Transwestern INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5 4 3 7 Q 6 Atlanta 8 9 Q 6 Q3 6 Dallas Q4 6 3 Q 7 Houston 4 Q 7 5 Q3 7 6 Los Angeles Q4 7 7 8* Q 8 SOURCE CoStar, Transwestern OUTLOOK Industrial Market Looks to Maintain Momentum Looking ahead, the Houston industrial market should continue to be one of the top performing commercial real estate sectors as continued population growth, the expansion of the Port and growth of ecommerce fuel the market. That said, increasing macro economic concerns could potentially impact the market as a full on trade war could reduce volumes moving through the Port; however, at this time these concerns are nominal. Notable Q Transactions PROPERTY SUBMARKET SF SELLER BUYER 7 Telge Road Northwest Far 7,644 Albertsons Cos Crow Holdings Industrial Intrepid Business Park Northwest Far 7,75 Triten Real Estate Partners Travelers Insurance Sam Houston Business Park Northwest Far 6,63 Levey Group Sealy & Co REAL ESTATE OUTLOOK HOUSTON METRO Q 8 3

HOUSTON METRO MARKET FIRST QUARTER 8 Houston Industrial Market Indicators SUBMARKET SF AVAILABLE IMMEDIATELY Q4 7 458,979 43,44.% 9.4% 6,3,9 3,665.5%.5% INVENTORY Q 8 WITH SUBLET Q 8 UNDER CONSTRUCTION NET ABSORPTION Q 8 MONTH ROLLING ABSORPTION 9.4% 3, 5,.5%, Central Business District 3,9,847,36,36 5.5% 5.9% 5.9% (9,) (85,) 9,68,76,436,68 4.5% 4.8% 4.8% (89,) 5,,95,55 47,497 8.7% 7.7% 7.7% 9, 9, 6,78,338 5,3.4%.4% 5.3% 86, 5,8,597,96,87 3.4% 4.5% 4.6% 3,48,94 (7,) 5,58, 59,,485,468,898 3.3% 4.% 4.8% 3,48,94 (98,) 5,453, 8,486,7 88,547.9%.4%.9% 48,866 4, (8,) Total Central Business District EastSoutheast Far Total EastSoutheast Far North Far 9,38,86 89,95 3.6% 3.% 4.8% 47, 6, 54,53,993 3,56,5 7.4% 6.5% 7.%,59,55 488,,75, 7,68,88 4,698,5 7.3% 6.5% 7.%,768,46 577,,84,,84,757 9,66.%.%.% 5, (7,) 3,48,3 98,833.9%.9%.9% (3,) 5,4,735 369,666 3.%.4%.6% 8, 454, 9,995,54 588,59 3.6%.9% 3.% 33, 396, Total North Far North Near Total North Near Northeast Far,5.%.%.% 5,7 33,5 5.3% 5.3% 5.3% 95,637.9%.%.% 8,,9,857 33,5 4.3%.8%.8% 8, Total Northeast Far Northeast Near 38,83 5,79 6.3% 6.8% 6.8% (,) (33,) 6,68,397 5,947.4%.8%.8% 4, (5,) 5,883,675 44,39.%.6%.8%, 7, 6, Total Northeast Near 3,8,355 58,878.%.6%.7%, 38, 77, (83,) Northwest Far * 5,53,93 597,557.3%.8%.9% (8,) 5,8,48 4,44.5%.8% 4.7% 7, (38,) 56,7,85,698,937 4.9% 4.8% 5.%,939,744,8, 3,49, 76,84,93 3,78,738 4.8% 4.8% 5.4%,939,744,6,,88,,86,37 9,63 7.8% 7.7% 8.4%, (,),33,785 4,38 3.7% 3.9% 3.9% (,) (8,) Total Northwest Far Northwest Near 67,,56 3,83,38 4.4% 4.6% 4.8% 33, (9,) Total Northwest Near 89,6,78 4,395,96 4.8% 4.9% 5.% 43, (,4,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E AL E STATE OUTLOO K HO UST ON MET RO Q 8

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY Q4 7 Q 8 WITH SUBLET Q 8 UNDER CONSTRUCTION NET ABSORPTION Q 8 MONTH ROLLING ABSORPTION South Far,3,573 5,58 4.6% 3.9% 3.9% 9, (4,) 7,8,855 49,76.4%.7%.7% (,) 7, Total South Far 3,4,383 936,855.9% 4.% 4.% 7,593 (7,) 98, 3,85,8,38,98.4% 3.3% 3.3% 7,593 (9,) 66, (5,) South Near 674,98 78,853 4.% 6.5% 6.5% 98,,687,49 6,87.%.%.%,, 9,343,958 3,85.4%.4%.6% 93, 6,,76,5 36,54 4.4%.8%.9% 93, 38, (,) Total South Near Southeast Near 386,73,88.8%.8%.8% 9,98,379.%.%.% 9,67,666 76,4.9% 3.7% 3.8% (57,) (49,) Total Southeast Near 9,,777 737,5.%.5%.6% (57,) (53,),893,5 3,435 5.%.8%.9% 6, 56,,75,79 8,64 3.6% 4.7% 4.7% (9,) (76,) Southwest Far 7,95,97 459,6 7.9% 5.8% 5.8% 6,5 66, 643,,55,8 763,4 8.4% 6.6% 6.6% 6,5 9, 63, 6,97,9 66,468 9.% 8.7% 8.9% 8, (86,) 4,69,34 349,96 6.% 8.6% 8.6% (6,) (38,) 8,854,84,43,855 3.9% 4.9% 5.4% 55, (,) (4,) Total Southwest Near 39,894,399,37,84 5.% 5.9% 6.3% 55, (98,) (438,) 3,344,653 87,3 5.9% 5.6% 5.6%, (38,),49,67 59,8 3.%.4%.4% 7, 7, 4,544, 4,779.9%.9%.9% (8,),38,9 668,89 3.4% 3.3% 3.3% 7, (49,) 44,38,697 4,,94 9.7% 9.% 9.4% 48,866 78, 9, Total Southwest Far Southwest Near Sugar Land Total Sugar Land Houston 83,647,835,9,88.%.3% 3.% (35,) 9, 397,57,59 7,839,59 4.4% 4.5% 4.7% 7,57,38,564, 7,97, 55,546,69 3,76,7 4.5% 4.5% 4.9% 7,8,94,87, 7,985, Total Houston SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government METHODOLOGY The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com Rachel Hornbeak Research Analyst 73.7.6 rachel.hornbeak@transwestern.com Jennifer Woodruff Research Analyst 73.7.77 jennifer.woodruff@transwestern.com Copyright 8 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET YEAREND 7 Industrial Sector Closes 7 on a Hot Note Strong buildtosuit activity leads to speculative construction OV E R V I E W Demand in Spurs Spec Construction The Houston industrial market remains one of the cities strongest sectors, closing out 7 with direct vacancy of 4.7% and annual absorption surpassing 8. million square feet. This growth has occurred primarily in the sector, stimulated by Hurricane Harvey recovery efforts, the expanded Port of Houston, ecommerce, and the slowly rebounding energy sector. The sustained strength in the sector is quite remarkable as industrial absorption has posted twentyeight consecutive quarters of positive growth, while direct vacancy has remained below 5.% for twenty consecutive quarters. As such, the development pipeline increased by 4% over the fourth quarter with developers beginning to look to speculative construction given the high levels of buildtosuit activity and low vacancy rates. The construction pipeline currently sits at 7. million SF with a preleased rate of 4% and is expected to continue to expand through the new year. While carries the market and pushes 98.% of the market growth/absorption, there are some areas of softness. The flex sector continues to come under fire from the high vacancy and softening rates in the office market, a trend that will continue through 8. The Northwest Near submarket has also struggled with negative net annual absorption over. M SF. Net Absorption by Sector SECTOR Q4 7 Flex 3, SF (9,) SF Total,43, SF,36, SF Vacancy by Sector SECTOR OVERALL Flex 9.7% 9.9%.%.9% 4.6% 4.8% Total 4.7% 5.% NET ABSORPTION Annual Absorption Totals Surpass 8.M SF Net absorption was strong for the fourth quarter totaling. million SF, bringing annual absorption totals to 8. million SF. Warehouse/ Distribution space recorded the highest absorption of any property Notable Q4 Leases TENANT SF LEASE TYPE BUILDING SUBMARKET Rooms To Go 373,86 New Lease Mason Ranch Bldg Northwest Far Plastipak 74,47 New Lease Carson Baylort EastSoutheast Far NFI 44,55 New Lease North Houston Logistics Center North Near Palmer Logistics 3,875 New Lease Carson Bayport 3 EastSoutheast Far

HOUSTON METRO MARKET YEAREND 7 type with. million SF absorbed over the fourth quarter, and more than 8.8 million SF for the year. Flex space showed positive absorption for the first time in 7, recording 3, SF during the fourth quarter. Contrastingly, manufacturing absorption fell in the red at yearend with negative 9, SF absorbed. The EastSoutheast Far submarket helped drive absorption with. million SF absorbed, including 3,875 SF leased by Palmer Logistics at Carson Bayport. Preleased deliveries played a much smaller role than usual in driving absorption this quarter as there was only 538, SF delivered to the market at 5% preleased. As buildtosuit projects remain active, absorption should remain strong in the period ahead. Industrial Under Construction Houston Metro Q4 7 SF % PRELEASED EastSoutheast Far 3,7,658 33% Northwest Far,456,786 4% 73,66 %,68,43 57% 64,5 87% SUBMARKET Northwest Near North Far VAC A N C Y Northeast Near Vacancy Remains Unchanged over the Quarter South Far 97,593 36% Southwest Far 46,5 % 7,79,8 4% S U P P LY A N D D E V E L O P M E N T Speculative Project Activity Picks Up At yearend, the construction pipeline totaled 7. million SF, up 47% from 4.9 million SF at the end of the third quarter. There has been a significant increase in construction activity as recovery from the impacts of Hurricane Harvey drive demand for warehouse/distribution space to repair the city. Additionally, given the strong buildtosuit activity, developers are once again looking to spec developments to capture this demand, such as the announcement of the eight building, 3. million SF Port Logistics Park in Baytown (Building 94,3 SF currently under construction) and the 6, SF spec facility in Port Crossing Commerce Center in La Porte. The East Southeast Far (.8M SF), the Northwest Far (.5M SF) and North Far (.M SF) submarkets accounted for the largest portion of construction activity. Currently, the largest projects under construction are the. million SF Amazon distribution center in the Northwest Far submarket and the 673, SF spec facility being developed at West Ten Business Park located in Katy. The development pipeline is anticipated to remain robust throughout 8. Total INDUSTRIAL DELIVERIES HOUSTON METRO SF Leased at Delivery SF Available at Delivery 5 Millions of SF The overall industrial vacancy rate (including sublet) ended the year at 5.%, unchanged from the third quarter; however, direct vacancy declined by.%, ending 7 at 4.7%. While maintains the lowest vacancy of the core industrial property types, quarterly activity saw a.6% rise in overall vacancy, ending the year at.9%. This was due in large part by National Oilwell Varco vacating their 45, SF manufacturing facility at 97 W Gulf Bank Rd and listing the space for sublease or sale. Direct and overall vacancy within Flex space declined by.4% over the fourth quarter, ending the year at 9.7% and 9.9%, respectively. Warehouse/ Distribution remained hot through the fourth quarter with high levels of buildtosuit activity and a flurry of deals related to rebuilding efforts from Hurricane Harvey. As such, overall vacancy declined by.%, ending the year at 4.8%, while direct vacancy declined by.% to end the quarter at 4.6%. 5 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 7% 67% 5 6 7 8 9 3 4 5 6 7 SOURCE CoStar, Transwestern Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory.3 MSF 5. MSF Overall Vacancy 8.4% 5.% Q4 Net Absorption. million SF. million SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E AL E STATE OUTLOO K HO UST ON MET RO Q 4 7

RENTAL RATES Rental Rates Decline Temporarily Overall industrial asking rates declined by.4% over the quarter, closing the period at $6.6 per SF NNN, down slightly from $6.64 at the close of the third quarter. This decline in rates is due to the marketwide low vacancy rates resulting in a mix of available space that tends to be older and less desirable. Flex rates will remain under pressure in 8 as high vacancy rates and large amount of sublease space remain prevalent in the office market. As proposed and underconstruction spec developments deliver to the market, weighted average asking rates should begin to rise, reflective of the increase in quality available space. INVESTMENT SALES Investment Activity Declines at Year's End The metro recorded $9. million in industrial sales transactions during the fourth quarter, down 3% from the third quarter which recorded $37. million in sales. While cap rates covered a wide range, depending on the type and class of product, they averaged 6.8% on average in the fourth quarter. Given the stable fundamentals of the market, Class A properties cap rates hover in the 56% range, while Class B rates are in the 79% range. Downward pressure on Class A cap rates (core holdings) will likely continue as the economy strengthens, energy prices further stabilize and based on the demand and allocations of capital from investors. OUTLOOK Industrial Market Looks to Maintain Momentum The Houston sector has seen tremendous activity throughout 7 and is a top performer amongst the Houston commercial property types. The recent expansions of the Port of Houston, recovery from the energy downturn, and efforts tethered to rebuilding from Hurricane Harvey has kept industrial demand strong throughout the metro and positions it well for continued growth through the coming year. Moving into 8, the increase in speculative construction should result in modest bumps to vacancy and asking rates. Leasing demand in space should continue to pace the market, while Flex space navigates a more challenging road. could see a large uptick should WTI continue trading over $6 per barrel in 8. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $ $8 $6 $4 $ $ SOURCE Real Capital Analytics, Transwestern INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5 4 3 6 Q4 5 Atlanta 7 8 Q 6 9 Q 6 Dallas Q3 6 Q4 6 Houston 3 Q 7 4 Q 7 5 Los Angeles Q3 7 6 7 Q4 7 SOURCE CoStar, Transwestern Notable Q4 Transactions PROPERTY SUBMARKET SF SELLER BUYER Portfolio Sale Multiple 936,68 Stockbridge ATCAP Partners 433 Underwood Rd EastSoutheast Far 6, Mountain West Industrial Properties Duke Realty Corporation 3575 Pollok Dr North Far 6, AllTex Safety Supply Falcon Steel Company REAL ESTATE OUTLOOK HOUSTON METRO Q4 7 3

HOUSTON METRO MARKET YEAREND 7 Houston Industrial Market Indicators SUBMARKET SF AVAILABLE IMMEDIATELY YEAR END 6 Q4 7 WITH SUBLET Q4 7 44,37 4,855.8%.%.%, 6,49,5 3,48 4.%.5%.5% 4, INVENTORY UNDER CONSTRUCTION NET ABSORPTION Q4 7 YTD ABSORPTION Central Business District,94,83 343,87 7.% 5.5% 5.5% 46, (46,) 9,398,64 46,975 6.5% 4.5% 4.5% 46, 89,,935,85 68,47.3% 8.7% 8.7% 33, 95, 6,73,738 4,95 7.%.4% 5.7% 4, 8, 5,34,8,7,683 7.6% 3.4% 3.5% 3,7,658 88,,93, 58,33,77,93,395 7.7% 3.3% 3.9% 3,7,658,53,,38, 7,99,45 87,7 7.9%.9%.3% 55, (6,) (5,) Total Central Business District EastSoutheast Far Total EastSoutheast Far North Far 8,94,885 3,936 5.6% 3.6% 3.9% 5,385,476 3,876,55 4.6% 7.4% 7.9%,34,43 68,,359, 69,9,766 5,68,633.6% 7.3% 7.8%,68,43 6,,7,,84,777 44,543 6.9%.%.% (5,) (3,) 3,44,74 99,78.%.9%.9% (58,) (79,) 3,33,84 65,887 7.4% 4.9% 4.9% 36, 8, 7,99,95 896, 6.3% 5.% 5.% (47,) 7, Total North Far North Near Total North Near Northeast Far,5.%.%.% 5,7 33,5.% 5.3% 5.3% 936,38 7,79.%.9%.9% (8,) (8,),74,6 5,796.% 4.3% 4.3% (8,) (8,) Total Northeast Far Northeast Near 3,735 5,976 6.4% 6.3% 6.3% (,) 7, 6,9,88 88,86.%.4%.4% (76,) (76,) 5,34,9 734,397.5%.9% 3.% 64,5 (8,) (7,) Total Northeast Near 3,98,634 873,459.3%.7%.8% 64,5 (59,) (66,) 5,967,99 64,697 6.5%.3%.3% 6, (8,) 4,554, 363,855.%.5% 4.% 53,7 (5,) (73,) Northwest Far * 5,444,45 3,86,666 7.5% 6.% 6.3%,43,66 (7,),7, 7,966,565 4,65,7 6.4% 5.6% 6.%,456,786 (5,) 99,,664,94 99,864 9.6% 7.8% 8.% 8,,,43,394 385,96.7% 3.7% 3.8% 9, (88,) (6,) Total Northwest Far Northwest Near 66,493,78,95,76 4.5% 4.4% 4.6% 54,66 (33,) (864,) Total Northwest Near 88,59,99 4,,55 4.8% 4.8% 5.% 73,66 (39,) (,4,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E AL E STATE OUTLOO K HO UST ON MET RO Q 4 7

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY YEAR END 6 Q4 7 WITH SUBLET Q4 7 UNDER CONSTRUCTION NET ABSORPTION Q4 7 YTD ABSORPTION South Far,34,95 6,486 3.% 4.6% 4.6% (,) (5,) 7,86,696 8,347.7%.4%.4% 3, 8, Total South Far,67,6 657,465 3.5%.9%.9% 97,593 8,, 3,7,87 746,98 3.%.4%.4% 97,593 9, 35, (,) South Near 674,56 76,547 7.9% 4.% 4.% (3,),57,64 6,584.%.%.% 9,493,45 7,84 4.%.4%.5% (9,) 9,,675,57 5,974 3.9% 4.5% 4.5% (,) 7, (,) Total South Near Southeast Near 386,73,88.%.8%.8% 9,88,7.%.%.% 9,6,7 568,45.%.9%.9% (76,) (39,) Total Southeast Near 9,868,449 579,78.8%.9%.9% (76,) (5,),89,897 76,34.% 5.% 5.% 7, (44,),79,59 6,545.3% 3.6% 3.6% (56,) (56,) 7,973,5 79,643 3.% 8.9% 8.9% 46,5 (4,) 99,,53,8,47,53.7% 9.% 9.% 46,5 (73,) (,) 6,83,768 6,53 4.6% 9.% 9.3% 34, 3,83,749 9,95 5.7% 6.% 6.% 3, 3, Southwest Far Total Southwest Far Southwest Near 8,673,8,3,58 6.7% 3.6% 4.% 43, 86, Total Southwest Near 39,39,337,88,5 6.% 4.8% 5.% 8, 7, 3,4,845,768 6.% 5.9% 5.9% 7, (3,),468,995 76,539 3.% 3.% 3.% 4,8,93 4,349 8.5%.9% 3.% 3, (53,),9,763 689,655 7.4% 3.4% 3.6%, (66,) 43,98,65 4,47,5 7.5% 9.7% 9.9% 55, 3, (87,) Sugar Land Total Sugar Land Houston 8,456,73,759,87.7%.%.9% 7,7 (9,) 85, 385,759,5 6,955,553 6.9% 4.6% 4.8% 7,5,48,43, 8,8, 5,44,37,96,6 6.3% 4.7% 5.% 7,79,8,36, 8,7, Total Houston SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com Rachel Hornbeak Research Analyst 73.7.6 rachel.hornbeak@transwestern.com Jennifer Woodruff Research Analyst 73.7.77 jennifer.woodruff@transwestern.com METHODOLOGY The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 7 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET THIRD QUARTER 7 Hurricane Harvey has Positive Effects on Industrial Sector Vacancy remains extremely tight OV E R V I E W Harvey Property Impacts are Minimal, Spurs Demand The implications of Hurricane Harvey on the industrial sector have been minimal as far as building damage is concerned. In fact, demand for warehouse/distribution space has increased, as home rebuilding is in full swing and need for building materials is high. The only sore spot for the industrial sector is the flex market as the softened office market continues to put downward pressure on the subsector. The overall vacancy rate (including sublet) was 5.% at the close of the third quarter, up.% from the previous quarter, due to a large amount of deliveries and the flex market softening. The current development pipeline sits at 4.9 million square feet and is 48% preleased. It is anticipated that the preleased deliveries will increase in the coming months as tenants search for new space to expand following Harvey. Deliveries for the quarter totaled 3.4 million SF driven by several large deliveries including the Amazon North Houston distribution facility (855, SF in North Far) and the FedEx facility (8, SF in Northwest Far). With the upcoming demand for space from the growth of Port Houston and the continued need for distribution space as households recover from Harvey, the industrial market looks to remain healthy over the period ahead. NET ABSORPTION Net Absorption by Sector SECTOR Q3 7 Flex (335,) SF 9, SF Total,59, SF,84, SF Vacancy by Sector SECTOR OVERALL.%.3%.%.3% 4.8% 4.9% Total 4.8% 5.% Flex Preleased Deliveries Help Drive Absorption Net absorption for the third quarter totaled.3 million SF, bringing annual absorption totals to 6.9 million SF. space recorded.6 million SF of absorption in the third quarter, the most of any property type. Notable Q3 Leases TENANT SF LEASE TYPE BUILDING SUBMARKET Emser Tile 6, New Lease Pinto Business Park North Far Home Depot 96,839 New Lease ProLogis Park Jersey Village Northwest Far BASINTEK 98,88 Renewal/Expansion Prologis NorthPark North Far DHL 8,94 Expansion Central Green Corporate Center North Far Weatherford,934 New Lease Cutten Rd NorthFar

HOUSTON METRO MARKET THIRD QUARTER 7 came in at a positive 9, SF absorbed, while flex space posted negative 335, SF of absorption. This marks the third straight quarter of negative absorption for flex space as they continue to feel the pressure from the softened office markets. The Northwest Far submarket helped to drive absorption in the third quarter, recording. million SF mainly a result of the new 855, SF Amazon distribution center. Furthermore, of the 3.4 million squarefeet of deliveries, 8% were preleased at the time of delivery, totaling.7 million Squarefeet of positive absorption. Looking ahead, absorption figures are anticipated to remain high as projects deliver to the market with high prelease percentages and demand remains high for warehouse/ distribution space. Industrial Under Construction Houston Metro Q3 7 VAC A N C Y Overall Market Remains Tight, Flex Struggles S U P P LY A N D D E V E L O P M E N T BuildtoSuit Projects Drive Construction At the close of the third quarter, the Houston industrial construction pipeline totaled 4.9 million SF, down 9.% from 5.4 million SF at midyear. The current pipeline is currently 48% preleased, driven by large buildtosuit and owneroccupied facilities such as Amazon, Kururay, and Vinmar International. The East Southeast Far (.M SF), the Northwest Far (.9M SF) and North Far (4, SF) submarkets accounted for the largest portion of construction activity. Currently, the largest projects under construction are the. million SF Amazon distribution center in the Northwest Far submarket and the 5, SF Vinmar International facility in the EastSoutheast Far submarket. With Harvey driving demand for warehouse/distribution space and filling some large vacancies, there could be several additional projects that begin construction in the coming quarters. % PRELEASED EastSoutheast Far,,3 5% Northwest Far,94,6 55% North Far 4,63 % Northwest Near 73,66 % Northeast Near 64,5 87% South Far 97,593 3% Southwest Far 46,5 % North Near 3,645 3% Sugar Land Total 8,75 % 4,853,336 47.7% INDUSTRIAL DELIVERIES HOUSTON METRO SF Leased at Delivery SF Available at Delivery 5 Millions of SF The overall industrial vacancy rate (including sublet) ended the third quarter at 5.%, up from 4.8% to close the second quarter. Direct vacancy rose by.% as well, closing the third quarter at 4.8%. At third quarter, vacancy for warehouse/distribution space was 4.9% overall and 4.8% for direct increasing marginally over the quarter due to deliveries that were not preleased. The manufacturing sector continued to post the lowest vacancy within the industrial sector coming in at.3% overall and.% for direct. Direct vacancy for flex currently stands at.% with total vacancy at.3% at the end of the third quarter. This has resulted in vacancy increasing by.9% over the quarter and 3.3% since endofyear 6, within the product type. Overall industrial vacancy is anticipated to remain low and is positioned well for future growth. SF SUBMARKET 5 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 7% 65% 5 6 7 8 9 3 4 5 6 7* SOURCE CoStar, Transwestern *Through Q3 7 Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory. MSF 5.6 MSF R E N TA L R AT E S Overall Vacancy 9.% 5.% Rental Rates Experience Slight Decline Q3 Net Absorption 63, SF.3 million SF Overall industrial asking rates declined by.7% over the quarter, closing the period at $6.69 per SF NNN, down from $6.74 NNN from midyear 7. WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E AL E STATE OUTLOO K HO UST ON MET RO Q 3 7

The flex market has caused much of the decline as rates drop to compete with office pricing to attract new tenants. Although rates declined this quarter, rents will likely increase over the period ahead as need for space increases amongst distributors and new construction project break ground to meet demand. INVESTMENT SALES Investment Increases in Q3 The metro recorded $35.4 million in industrial sales transactions during the third quarter, a 93% increase from the second quarter which recorded 58.4 million in sales. While cap rates covered a wide range, depending on the type and class of product, they averaged 6.8% on average in the third quarter. Given the stable fundamentals of the market, Class A properties cap rates hover in the 56% range, while Class B rates are in the 79% range. Downward pressure on Class A cap rates (core holdings) will likely continue as the economy strengthens, energy prices further stabilize and based on the demand and allocations of capital from investors. Investment activity is likely to rise over the period ahead as investors look to capitalize on demand from tenants and the growing industrial market. OUTLOOK Industrial Outlook Strong The Houston industrial sector continues to be one of the strongest performers amongst the Houston commercial property types. The city is in full recovery mode from Harvey, prompting a significant durable goods purchasing spree and a corresponding need for Distribution/ Warehouse locations near heavily impacted areas. Additionally, the expansion of the Port of Houston has already lead to a significant increase in TEU traffic. Overall vacancy rates will remain extremely tight, even with 4.9 million square feet of projects in the pipeline. Considering these factors, and the underlying strength of the industrial sector, the market is well positioned to continue its strong performance well into 8. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $ $8 $6 $4 $ $ SOURCE Real Capital Analytics, Transwestern,*Through Q3 7 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5 4 3 6 Q3 5 Atlanta 7 8 Q4 5 9 Q 6 Dallas Q 6 Q3 6 Houston 3 Q4 6 4 Q 7 5 Los Angeles Q 7 6 7* Q3 7 SOURCE CoStar, Transwestern Notable Q3 Transactions PROPERTY SUBMARKET SF SELLER BUYER Apex Distribution Center Northwest Near 4,6 Crow Holdings WPT Industrial REIT Bayou Bend Southwest Far 373,38 Thackeray Partners Colony NorthStar Mason Creek Business Center (Bldgs 5) Northwest Far 339,9 Hillwood Gramercy 55 Aleen Northeast Near 75,3 Aleen Street Associates Polymers Packaging & Warehousing REAL ESTATE OUTLOOK HOUSTON METRO Q3 7 3

HOUSTON METRO MARKET THIRD QUARTER 7 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY YEAR END 6 Q3 7 WITH SUBLET Q3 7 UNDER CONSTRUCTION NET ABSORPTION Q3 7 YTD ABSORPTION Central Business District 44,37 4,855.8%.%.%, 4, 6,49,5 3,48 4.%.5%.5% 4, 6,,94,83,36,74 7.% 5.7% 5.7% (9,) 3, 9,398,64,379,87 6.5% 4.7% 4.7% 43, 33,,85,85 7,553.3% 9.5% 9.5% 6, 99, 6,73,738 63,99 7.%.7%.7% 4, 4, 5,35,78,5,786 7.6% 5.% 5.%,,3,5,,98, 58,5,8,847,33 7.7% 4.9% 4.9%,,3,55,,59, (8,) Total Central Business District EastSoutheast Far Total EastSoutheast Far North Far 7,99,45 855,87 7.9%.7%.% (36,) 8,94,885 3,936 5.6% 3.6% 3.9% 98, 5,39,4 4,448, 4.6% 8.5% 9.% 4,63 73,,39, 69,36,7 5,64,3.6% 8.% 8.6% 4,63 595,,9,,84,777 9,66 6.9%.%.% (7,) (,) 3,44,74 4,88.%.%.% (,) 4, 3,8,69 664,8 7.4% 5.% 5.% 3,645 46, 86, 7,95,65 84,959 6.3% 4.6% 4.7% 3,645 8, 89, Total North Far North Near Total North Near Northeast Far,5.%.%.% 5,7 33,5.% 5.3% 5.3% 936,38.%.%.%,74,6 33,5.%.8%.8% Total Northeast Far Northeast Near 3,735 49,75 6.4% 5.9% 5.9% 8, 3, 6,9,88,584.%.%.% (3,) 5,33,93 63,598.5%.5%.5% 64,5 (5,) (7,) Total Northeast Near 3,98,546 694,97.3%.%.% 64,5 (7,) (7,) (39,) Northwest Far * 5,967,99 674,376 6.5%.3%.4% (68,) 4,554, 349,3.%.4% 4.% 53,7 (58,) (43,) 5,97,45,77,6 7.5% 5.4% 5.4%,87,36,4,,443, 7,89,555 3,793,737 6.4% 5.3% 5.6%,94,6,6,,6,,664,94,38,78 9.6% 8.9% 9.% (7,) (4,),43,394 98,96.7%.9%.% 9, (73,) (63,) 66,493,78,593,57 4.5% 3.9% 4.% 54,66 (53,) (66,) Total Northwest Near 88,59,99 3,89,63 4.8% 4.3% 4.4% 73,66 (7,) (469,) Total Northwest Far Northwest Near SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E AL E STATE OUTLOO K HO UST ON MET RO Q 3 7

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY YEAR END 6 Q3 7 WITH SUBLET Q3 7 UNDER CONSTRUCTION NET ABSORPTION Q3 7 YTD ABSORPTION South Far,34,95 38,33 3.%.9%.9% 7, (8,) 7,86,696 4,734.7%.%.% (85,) (99,) Total South Far,66,46 6,373 3.5%.7%.7% 97,593 94, 34, 3,8,7 79,39 3.%.5%.5% 97,593 6, 35, (9,) South Near 674,56 73,75 7.9% 4.5% 4.5%,,57,64 6,584.%.%.% 9,493,45 8,349 4.%.3%.4% 8, 94,,675,57 58,8 3.9% 4.4% 4.4% 9, 65, (,) Total South Near Southeast Near 386,73,88.%.8%.8% (,) 9,88,7.%.%.% 9,6,7 39,34.%.%.% 37, 9, Total Southeast Near 9,868,449 4,863.8%.3%.4% 6, 8,,89,897 83,634.% 5.5% 5.6% (5,) (88,),79,59 5,9.3%.3%.3% 7,973,5 685,73 3.% 8.6% 8.6% 46,5 3, 393,,53,8 974,486.7% 8.5% 8.5% 46,5 7, 35, 6,83,768 654, 4.6% 9.6% 9.7% (34,) (9,) 3,83,749 6,559 5.7% 6.8% 6.8% 8, 8,673,8,75,67 6.7% 4.% 4.4% (57,) 58, Total Southwest Near 39,39,337,9,37 6.% 5.3% 5.6% (9,) (43,) 3,4,845 7,574 6.% 6.% 6.4% (,) 9,,468,995 76,539 3.% 3.% 3.% 4,,73 497,6 8.5% 3.5% 3.5% 8,75 (56,) (38,),7,3 78,8 7.4% 3.9% 3.9% 8,75 (76,) (46,) 43,798,65 4,49,3 7.5%.%.3% (335,) (,9,) 8,456,73,65,94.7%.%.3% 7,7 9, 94, 385,35,673 8,55,536 6.9% 4.8% 4.9% 4,78,66,59, 7,759, 5,65,469 4,574,63 6.3% 4.8% 5.% 4,853,336,84, 6,934, Southwest Far Total Southwest Far Southwest Near Sugar Land Total Sugar Land Houston Total Houston SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com METHODOLOGY Rachel Hornbeak Research Analyst 73.7.6 rachel.hornbeak@transwestern.com The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 7 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET MIDYEAR 7 Large Leasing Activity Picks Up in Q Construction Pipeline 8% Preleased OV E R V I E W Flex Under Pressure from Office, Industrial Sector The Houston industrial sector continued its strong performance through the second quarter, posting declines in both direct and total vacancy as absorption for the second quarter topped. million SF. The only headwinds the sector currently faces are those driven by turmoil in the office sector as availabilities put pressure on rates and vacancies within flex product. Overall, direct vacancy rates remain healthy, coming down.% ending the quarter at 4.6%, with total vacancy (with sublet) closing at 4.8%. The current supply pipeline remains well in check, totaling 5.4 million SF of which, approximately 8% is preleased. Deliveries for the quarter totaled.5 million SF with the primary activity occurring in the EastSoutheast Far submarket (93, SF 64% preleased upon delivery). With the deepening of Port Houston to allow for larger and more ships (thus more TEU transit), distribution and warehouse uses near the port will remain in high demand. Net Absorption by Sector SECTOR Q 7 Flex (,) SF 3, SF Total,94, SF,5, SF Vacancy by Sector SECTOR OVERALL NET ABSORPTION Flex 9.% 9.5% Absorption Driven by.%.3% 4.7% 4.9% Total 4.6% 4.8% Net absorption for the second quarter totaled. million SF, bringing annual absorption totals to 4.7 million SF. On a quarterly basis, warehouse/distribution product led the way, recording. million SF. came in at a positive 3, SF absorbed, while flex space came under additional pressure from the office markets and posted a negative, SF of absorption. Notable Q Leases SF LEASE TYPE BUILDING SUBMARKET Vinmar International 5, BuildtoSuit Cedar Port Industrial Park EastSoutheast Far Kuraray America 465,85 New Lease Bayport Logistics Park EastSoutheast Far MRC Global 45,7 New Lease Port Crossing Commerce Center EastSoutheast Far TENANT Supply Chain Management 5, New Lease Bayport North Distribution Center EastSoutheast Far Dupuy Group,96 New Lease 34 South Loop E South Far

HOUSTON METRO MARKET MIDYEAR 7 The EastSoutheast Far submarket drove absorption for the Houston metro, totaling. million SF and fed by leases such as MRC Global 's 45, SF lease at Port Commerce Center and IDC's expansion into 75, SF of additional space at Bayport North Distribution Center. Kururay is also looking to expand its presence in the submarket as it leased 467, SF of buildtosuit space in Bayport Logistics Park. Over the balance of 7, absorption will remain strong, particularly within the warehouse/distribution subsector, as preleased construction is delivered. Industrial Under Construction Houston Metro Q 7 Vacancy Tightens Further Despite Challenges for Flex The overall industrial vacancy rate (including sublet) ended the second quarter at 4.8%, down from 5.% to close the first quarter. Direct vacancy dropped by.% as well, closing the midyear at 4.6% and pointing to the overall health in the market. Midyear vacancy for warehouse/distribution space was 4.9% overall and 4.4% for direct, while manufacturing came in at.6% overall and.5% for direct. R E N TA L R AT E S Asking Rates Decline as Pressure on Flex Mounts As pressure mounts on the flex market, overall industrial asking rates declined by.5% over the quarter, closing the period at $6.74 per SF NNN. New construction is no longer buoying rates, as it lacks available space to impact the numbers given the high preleased occupancy of the properties. As such, asking rates could continue to decline modestly over the short term. A situation more indicative of remaining available supply than building rent appreciation.,34,47 93% EastSoutheast Far,66,675 63% North Far,4,35 94% 33,57 43% South Far 8,383 % North Near 3,645 3% Northeast Near, % Northwest Near 9, % 5,45,95 8% INDUSTRIAL DELIVERIES HOUSTON METRO SF Leased at Delivery SF Available at Delivery 5 Millions of SF At the close of the second quarter, the Houston industrial market construction pipeline totaled 5.4 million SF, down 4% from 6.3 million SF at the end of 6. The current pipeline is currently 8% preleased, driven by large buildtosuit and owneroccupied facilities such as Amazon, FedEx, Kururay, and Vinmar International. The Northwest Far (.3M SF) East Southeast Far (.7M SF), and North Far (.M SF) submarkets accounted for the largest portion of construction activity. Currently, the largest projects under construction are the two Amazon distribution centers (855, SF North Far and,6, SF in the Northwest Far) and the 95, SF FedEx facility in the Northwest Far submarket off Highway 99. Northwest Far Total S U P P LY A N D D E V E L O P M E N T Current Construction Pipeline Heavily Preleased % PRELEASED Southwest Far VAC A N C Y While the industrial sector continues to perform well on an aggregate basis, flex product is under heavy pressure from competitive office listings and continued fall out and consolidations from the energy sector. This has resulted in vacancy increasing by.9% over the quarter by a full two percentage points since endofyear 6, within the product type. Direct vacancy for flex currently stands at 9.% with total vacancy at 9.5%. SF SUBMARKET 5 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 7% 65% 5 6 7 8 9 3 4 5 6 7* SOURCE CoStar, Transwestern *Through Q 7 Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory 9.3 MSF 58.3 MSF Overall Vacancy 8.8% 4.8% Q Net Absorption. million SF. million SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E AL E STATE OUTLOO K HO UST ON MET RO Q 7

INVESTMENT SALES Investors Still Keen on Houston The metro recorded $58.4 million in industrial sales transactions during the second quarter, down 73% from the first quarter. While cap rates covered a wide range, depending on the type and class of product, they averaged 6.4% on average in the second quarter. Class A properties continue to be in the 56% range, while Class B rates are the 79% range. Downward pressure on Class A cap rates will likely continue as the economy strengthens and energy prices further stabilize. Active industrial buyers in the Houston market include: Prologis, TA Realty, CABOT, TIAACREF, Crow Holdings, Invesco, Travelers, Industrial Property Trust, Liberty Property Trust, Clarion Partners, Principal, Hillwood, Bentall Kennedy, AEW, Blackrock and Blackstone REIT. Investment sales over the course of 7 will likely be slow or flat as user consolidation is still occurring from the fallout of oil prices. OUTLOOK Industrial Sector Looks to Continued Success While the office sector is continuing to feel the pain of the recent oil downturn, the industrial sector has displayed strong signs of growth in nearly all statistical categories, save for those in which product competes directly against office availabilities. Industries such as petrochemical and retail warehousing/distribution and ecommerce have replaced and continue to replace demand lost via the oil correction. Considering the significantly preleased construction pipeline in conjunction with the recent completion of the Houston Port dredging/expansion, market indicators continue to signal favorably for core industrial product offering. That said, flex product market wide will continue to face headwinds until competitive supply in the office market reduces to a point allowing for the traditional spread in asking rates between product types. Overall vacancy rates will continue to decline as the limited amount of available supply is absorbed. Rental rates are projected to remain flat as long as speculative construction remains at bay. Estimated job growth of approximately 4, jobs in 7 will continue to be a big driver for goods, services and overall demand for space. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $ $8 $6 $4 $ $ SOURCE Real Capital Analytics, Transwestern,*Through Q 7 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5,, 4,, 3,,,,,, 6 Atlanta 7 Q 5 8 9 Sublease Space Q3 5 Q4 5 Dallas Q 6 Q 6 Houston 3 Q3 6 4 Q4 6 5 Los Angeles 6 Q 7 7* Q 7 SOURCE CoStar, Transwestern Notable Q Transactions PROPERTY SUBMARKET SF SELLER BUYER TA Realty Portfolio Houston Metro,88,455 TA Realty Brookfield Ikea Distribution Center EastSoutheast Far 996,48 Clay Development Pure Industrial REIT 348 W th St Northwest Near 79,4 Caspian Enterprises Prgif 348 W th, LLC 4 Brittmoore Road Northwest Near 6,67 Insite Realty Partners Brittmark Ventures LLC REAL ESTATE OUTLOOK HOUSTON METRO Q 7 3

HOUSTON METRO MARKET MIDYEAR 7 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY YEAR END 6 Q 7 WITH SUBLET Q 7 UNDER CONSTRUCTION NET ABSORPTION Q 7 Central Business District 44,37 54,3.8%.8%.8% (7,) 6,49,5 54,8 4.% 4.% 4.% (8,),94,83,5,5 7.% 5.3% 5.3% 5, 9,398,64,53,46 6.5% 5.% 5.% 9,,763,5 9,47.3%.8%.8% 4,8 37, 6,49,738 8,49 7.% 3.% 3.% 4, 49,8,384,58,5 7.6% 5.% 5.%,594,875 867, 56,994,47,88,49 7.7% 5.% 5.%,66,675 94, 7,99,45 79,36 7.9% 9.% 9.% (7,) 8,94,885 3,936 5.6% 3.6% 3.6% 98, 5,474,4 4,33,85 4.6% 8.4% 9.%,4,35 48, 68,38,7 5,364,3.6% 7.8% 8.3%,4,35 434,,84,777,554 6.9% 9.5%.4% (4,) 3,44,74,644.%.6%.6% 45, 3,8,69 8,9 7.4% 6.% 6.% 3,645 (6,) 7,95,65 943,88 6.3% 5.3% 5.3% 3,645 (9,) Total Central Business District EastSoutheast Far Total EastSoutheast Far North Far Total North Far North Near Total North Near Northeast Far,5.%.%.% 5,7 33,5.% 5.3% 5.3% 936,38.%.%.%,74,6 33,5.%.8%.8% 3,735 68,76 6.4%.8%.8% (5,) 6,9,88,584.%.%.% (3,) Total Northeast Far Northeast Near 5,33,93 67,94.5%.4%.4%, (,) Total Northeast Near 3,98,546 688,54.3%.%.%, (,) (7,) Northwest Far * 5,95,99 589,4 6.5% 9.9%.3% 4,554, 9,84.%.% 3.7% 53,7 5, 5,33,665 3,8, 7.5% 6.% 6.%,87,75, 7,88,85 3,898,446 6.4% 5.5% 6.%,34,47 45,,664,94 9,59 9.6% 7.9% 8.5% (3,),43,394 5,77.7%.%.% 9,, 66,493,78,6,37 4.5% 3.% 3.3% 66, Total Northwest Near 88,59,99 3,8,3 4.8% 3.5% 3.7% 9, 53, Total Northwest Far Northwest Near SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E AL E STATE OUTLOO K HO UST ON MET RO Q 7

Houston Industrial Market Indicators INVENTORY SF AVAILABLE IMMEDIATELY YEAR END 6 Q 7 WITH SUBLET Q 7 UNDER CONSTRUCTION NET ABSORPTION Q 7,99,95 4,97 3.% 3.% 3.% (5,) 7,86,696 56,694.7%.8%.8% (4,),579,886 677,397 3.5% 3.% 3.% 8,383 48, 3,966,497 774,388 3.%.5%.5% 8,383 9, (3,) SUBMARKET South Far Total South Far South Near 674,56 73,849 7.9% 4.6% 4.6%,57,64 6,584.%.%.% 9,493,45 46,89 4.%.6%.6% 66,,675,57 537,63 3.9% 4.6% 4.6% 36, 386,73.%.%.% 9,88,7.%.%.%.%.7%.7% (8,) Total South Near Southeast Near 9,6,7 59,46 Total Southeast Near 9,868,449 59,46.8%.8%.8% (8,),89,897 3,397.%.7%.8% (37,),79,59 5,9.3%.3%.3% 7,7, 555,93 3.% 7.% 7.% 33,57 7,,6,58 793,439.7% 7.% 7.% 33,57 33, 6,83,768 6,53 4.6% 9.% 9.% (75,) 3,83,749 6,559 5.7% 6.8% 6.8% 8, 8,673,8,8,79 6.7% 3.9% 4.% 5, Total Southwest Near 39,39,337,998,89 6.% 5.% 5.3% 48, 3,4,845 87,56 6.% 5.5% 5.7%,,468,995 76,539 3.% 3.% 3.% 4,,73 4,43 8.5%.7%.7% 8,,7,3 55,98 7.4%.5%.6% 3, 43,73,65 4,9,89 7.5% 9.% 9.5% 4,8 8,43,73,654,56.7%.%.3% 96,7 3, 38,68,569 7,93,95 6.9% 4.7% 4.9% 5,65,575,94, 58,34,565 3,576,79 6.3% 4.6% 4.8% 5,45,95,5, Southwest Far Total Southwest Far Southwest Near Sugar Land Total Sugar Land Houston Total Houston (,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com METHODOLOGY Rachel Hornbeak Research Analyst 73.7.6 rachel.hornbeak@transwestern.com The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 7 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET FIRST QUARTER 7 Industrial Sector Continues Push Forward Flex Market Softening under Pressure from Office Market Availability OV E R V I E W Industrial gains continue into Q The Houston industrial sector has remained resilient throughout the energy downturn, and continues to perform solidly through the first quarter of 7. However, challenges are beginning to arise, especially in the flex market as softness from the office sector spills into competition for tenants. Overall, direct vacancy rates remain relatively low, at 4.9% up.3% over the quarter, but sublease space is becoming more of a situation to monitor with total vacancy at 5.%. Face rates are coming under pressure as well, driven by the increase in availability in the flex market. Concerns aside, the broad Houston economy continues to show improvement with rapid population growth, stabilizing oil prices and increasing rig counts leading many employers to begin hiring. As such, further deterioration in the sector should be minimal as long as the oil markets maintain stability. Net Absorption by Sector SECTOR Q 7 Flex (574,) SF 9, SF Total,447, SF,963, SF Vacancy by Sector SECTOR OVERALL NET ABSORPTION Absorption strong on east side of metro Flex 8.3% 8.6% Net absorption for the first quarter totaled approximately.9 million SF, down slightly from fourth quarter absorption of. million SF. First quarter absorption for warehouse/distribution product led the way, recording.4 million SF, manufacturing recorded 9, SF, and flex space recorded negative 574, SF of absorption. The Southwest Near and South Near submarkets were the most impacted on the flex side with negative absorption of 3, SF and 9, SF, respectively..%.5% 5.% 5.3% Total 4.9% 5.% Notable Q Leases TENANT SF LEASE TYPE BUILDING SUBMARKET Amazon,, Prelease Intersection of U.S. 9 and Woods Rd Northwest Far Gulf Winds 33,8 Renewal Greens Port Industrial Park Southeast Near Ford Motor Company 5, Renewal Alamo Crossing Commerce Bldg A Northwest Near McLane Company 59, New Interstate Commerce Center Bldg North Far Iron Mountain 4,563 New Pine Forest Business Center Bldg Northwest Near

HOUSTON METRO MARKET FIRST QUARTER 7 The EastSoutheast Far submarket drove positive absorption for the Houston metro with. million SF driven by tenants such as Katoen Natie, Palmer Logistics and Plantgistix. Over the course of 7, absorption figures should remain strong, particularly within the warehouse/ distribution subsector, as preleased construction is delivered for several large users. Industrial Under Construction Houston Metro Q 7 SF % PRELEASED EastSoutheast Far,477,4 4% VAC A N C Y NW Far,388,64 69% Vacancy up in Flex N Far,38,5 8% The overall industrial vacancy rate (including sublet) ended the first quarter at 5. %, up marginally from 4.9% at fourth quarter with direct vacancy recording 4.9%, up from 4.6% last quarter. First quarter vacancy for warehouse/distribution space was 5.3% overall and 5.% for direct. continues to have the lowest vacancy of any subtype recording.5% for overall and.% for direct. Unlike it's counterparts, flex didn't fare as well over the quarter. Overall flex vacancy totaled 8.6% with direct vacancy coming in at 8.3%. The largest change in vacancy stemmed from the South Near Flex submarket with a.% increase quarteroverquarter, resulting from T3 Energy Services vacating 93, SF. S Far 49,86 63% Southwest Far Large users still driving construction At the close of the first quarter, the Houston industrial market construction pipeline totaled over 4.6 million SF, down from 6.3 million SF at the end of 6. Construction activity fell as the result of one of Ikea s 5, SF new buildings delivering along with over 45, SF delivering in the Ameriport Business Park. The current pipeline is 69% preleased which is driven by large, owneroccupied facilities such as Amazon, FedEx, and Ikea. The East Southeast Far (.5M SF), Northwest Far (.4M SF), and North Far (.M SF) submarkets accounted for the largest portion of construction activity. Currently, the largest projects under construction are the 9, SF Amazon distribution center in the North Far submarket, the 8, SF FedEx facility in the Northwest Far submarket off Highway 99. The construction pipeline is expected to remain strong with companies as companies continue to expand and break ground on new projects, such as Amazon s new. million SF distribution center in Katy. R E N TA L R AT E S 33,57 49% Sugar Land 6, 45% N Near 35, % NW Near 9, % 4,69,893 6% Total INDUSTRIAL DELIVERIES HOUSTON METRO SF Leased at Delivery 5 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 7% 58% 5 6 7 8 9 3 4 5 6 7* SOURCE CoStar, Transwestern *Through Q 7 Multitenant vs Transwestern market coverage Rates continue to increase Rental rates saw another quarter of increases recording $6.9 per SF NNN in the first quarter, up.5% from $6.87 per SF NNN at the end of 6. With vacancy rates remaining tight coupled with quality space delivering to the market, rental rates are expected to push further in the quarters ahead. Quoted base rents for new distribution space are SF Available at Delivery 5 Millions of SF S U P P LY A N D D E V E L O P M E N T SUBMARKET MULTITENANT ENTIRE MARKET Inventory 7.6 MSF 56.5 MSF Overall Vacancy 8.5% 5.% Q Net Absorption.3 million SF.9 million SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E A L E S TATE OUTLOO K HOUST ON MET RO Q 7

between $4.8 and $5.4 per SF triple net with an allowance of $5. $8. per SF for initial improvements. INVESTMENT SALES Investors keep eyes on Houston The metro recorded $575. million in industrial sales transactions during the first quarter, up significantly from $. million during the fourth quarter. While cap rates covered a wide range, depending on the type and class of product, they averaged 7.% on average in the first quarter. Class A properties continue to be in the 56% range, while Class B rates are the 79% range. Downward pressure on Class A cap rates will likely continue as the economy strengthens and energy prices further stabilize. Active industrial buyers in the Houston market include: Prologis, TA Realty, CABOT, TIAACREF, Crow Holdings, Invesco, Travelers, Industrial Property Trust, Liberty Property Trust, Clarion Partners, Principal, Hillwood, Bentall Kennedy, AEW and GLP. Investors will remain interested in the Houston market over the course of 7, lending to strong investment sale activity. OUTLOOK Industrial looks to continued success As some sectors continue to feel the pain of the recent oil downturn, the industrial sector has displayed strong signs of growth in nearly all statistical areas. Although vacancy increased marginally over the period, it still remains extremely tight and is poised well for more construction projects to enter the pipeline. Even with the challenges in the flex market, it is anticipated that vacancy will hover in the 5% range throughout the year as more supply is delivered to the market. The Petrochemical pipeline has begun to dwindle near Port Houston, but other projects, driven by demand from large users, will keep the construction pipeline strong. With the Purchasing Managers Index (PMI) indicating an expansion in the Houston market for the last six months, the manufacturing sector will bode well in the months ahead. Rental rates are anticipated to remain flat or rise modestly as new supply delivers to the market. Overall, the industrial market looks to continue to thrive, especially as the economy begins to pick back up again. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions InThousands SF $ $8 $6 $4 $ $ SOURCE Real Capital Analytics, Transwestern,*Through Q 7 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5, 4, 3,,, 6 Atlanta 7 Q 5 8 9 Sublease Space Q 5 Q3 5 Dallas Q4 5 Q 6 Houston 3 Q 6 4 Q3 6 5 Los Angeles 6 Q4 6 7* Q 7 SOURCE CoStar, Transwestern Notable Q Transactions PROPERTY SUBMARKET SF SELLER BUYER Underwood Distribution Center EastSoutheast Far,67,994 Blackrock Hines West by Northwest Northwest Near 89,96 TH Real Estate Prologis Main Park Business Center Southwest Far 654,35 Cabot Properties DRA Advisors Park 88 South Far 553,638 Nationwide AEW REAL ESTATE OUTLOOK HOUSTON METRO Q 7 3

HOUSTON METRO MARKET FIRST QUARTER 7 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 6 Q 7 WITH SUBLET Q 7 UNDER CONSTRUCTION NET ABSORPTION Q 7 Central Business District 44,37 47,98.8%.%.% 7, 6,49,5 35,93 4.% 3.9% 3.9%,,94,83,39,639 5.% 5.8% 5.8% (6,) 9,398,64,6,669 5.% 5.5% 5.5% (4,),744,97 9,39 9.6%.%.% 4,8 (4,) 6,49,738 8,49 3.% 3.% 3.% 48,67,9 3,4,878 5.% 6.3% 6.4%,434,34,33, 56,6,567 3,43,76 5.% 6.% 6.%,477,4,99, (4,) Total Central Business District EastSoutheast Far Total EastSoutheast Far North Far 7,99,45 647,385 7.6% 8.% 8.4%, 8,94,885 463,574 5.3% 5.% 5.% 9, 5,364,98 4,6,84 9.8% 9.% 9.4%,8,5 487, 68,7,98 5,733,8 9.% 8.4% 8.7%,38,5 456,,84,777 98,336 7.8% 8.3% 8.3% (6,) 3,44,74 65,373.%.9%.9% 3, 3,45,69 75,39 5.% 5.4% 5.7% 35, (6,) 7,87,65 878,949 4.8% 4.9% 5.% 35, (9,) Total North Far North Near Total North Near Northeast Far,5.%.%.% 5,7 33,5 5.3% 5.3% 5.3% 936,38.%.%.%,74,6 33,5.8%.8%.8% (43,) Total Northeast Far Northeast Near 3,735 63,7 6.4%.%.% 6,9,88.%.%.% 5,33,93 44,863.7%.6%.% 45, Total Northeast Near 3,98,546 468,35.4%.5%.8%, (7,) Northwest Far * 5,779,783 346,787 5.7% 6.% 7.3% 4,554, 35,638.%.% 3.7% 5,3 5, 5,49,875 3,65,74 6.% 6.3% 6.6%,373,34 76, 7,583,869 3,88,68 5.3% 5.4% 6.%,388,64 74, (,) Total Northwest Far Northwest Near,664,94 898,99 7.6% 7.7% 7.9%,43,394 35,68.7%.3%.3% 9, 4, 66,493,78,37,8 3.% 3.5% 3.7% (33,) Total Northwest Near 88,59,99 3,36,9 3.5% 3.8% 4.% 9, (3,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E A L E S TATE OUTLOO K HOUST ON MET RO Q 7

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 6 Q 7 WITH SUBLET Q 7 UNDER CONSTRUCTION NET ABSORPTION Q 7 South Far,99,95 5,599.5%.%.% 7, 7,86,696 4,5.7%.6%.6% 78, Total South Far,369,886 75,836 3.5% 3.% 3.% 57,9 3, 3,756,497 773,956 3.%.5%.5% 57,9 5, (9,) South Near 674,56 44,7 7.9% 36.% 36.%,57,64 6,584.%.%.% 9,493,45 33,83 4.% 3.3% 3.3% 85,,675,57 574,38 4.% 4.9% 4.9% (6,) Total South Near Southeast Near 386,73.%.%.% 9,88,7.%.%.% 9,6,7 4,636.%.%.% (76,) Total Southeast Near 9,868,449 4,636.8%.4%.4% (76,),89,897 95,799.%.7%.% 77,,79,59 5,9.3%.3%.3% 7,7, 86,49.%.7%.7% 33,57 66,,6,58,7,77 9.3% 9.% 9.% 33,57 43, 6,83,768 545, 4.6% 8.% 8.% (3,) 3,83,749 68, 5.% 7.% 7.% (69,) 8,673,8,3,974 4.3% 4.3% 4.6% 9, Total Southwest Near 39,39,337,46,98 4.4% 5.% 5.4% (,) 3,4,845 99,45 6.% 8.8% 8.8% (9,),468,995 76,539 3.% 3.% 3.% 4,39,73 97,948.6%.4%.4% 6, 8,,,3 573,938.6%.9%.9% 6, (64,) 43,534, 3,6,489 6.8% 8.3% 8.6% 6, (574,) 8,43,73,89,67.3%.%.5% 34,3 9, 38,785,84 9,34,33 4.9% 5.% 5.3% 4,4,793,447, 56,75,546 4,744,49 4.6% 4.9% 5.% 4,69,893,963, Southwest Far Total Southwest Far Southwest Near Sugar Land Total Sugar Land Houston Total Houston SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com METHODOLOGY Rachel Andrae Research Analyst 73.7.6 rachel.andrae@transwestern.com The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 7 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET YEAREND 6 Industrial Market Keeps on Trucking Vacancy remains low as rents rise OV E R V I E W Industrial finishes a solid year In the face of an energy downturn, the Houston industrial sector enjoyed a solid performance over 6. Fueled by activity stemming from the Port of Houston, the east side petrochemical expansion, and distribution center growth, just under 6. million square feet were delivered to the market. The robust pipeline was well accounted for as annual absorption came in at over 9.6 million square feet with preleasing driving construction as tenants such as Daikin, FedEx, IKEA and Konea Naties signed on for new facilities. The end of the year witnessed a growing sense of optimism with respect to broad market conditions as energy bottomed out and stabilized in the high $4 s to low $5 s. Supply is currently well in balance with demand. At yearend, there was 4.4 million square feet under construction with prelease commitments for approximately 7%. As broad market conditions continue to stabilize and job growth begins to return at a more steady rate, we anticipate the industrial sector to continue to perform well in 7. Net Absorption by Sector SECTOR Q4 6 Flex (88,) SF 7, SF 76, SF Total 843, SF Vacancy by Sector OVERALL Flex 7.5% 8.% NET ABSORPTION.7% 3.% Absorption strong for 6 6.9% 7.% Total 6.3% 6.5% While net absorption for the quarter tallied a mere 843, SF, annual totals were very strong totaling 9.6 million SF. Absorption over the year was driven heavily by the delivery of preleased facilities. Fourth quarter absorption for warehouse/distribution product led the way, SECTOR Notable Q4 Leases TENANT SF LEASE TYPE BUILDING SUBMARKET GET Enterprises, New 7374 Security Way Northwest Far Adams Distribution 45,376 Renewal 9839858 East Fwy Southeast Near Hagemeyer North America 7,34 Renewal/Expansion 33 St Hwy 5 Gulf Fwy/Pasadena Land N Sea 76,646 New 954 Park South View South Adams Warehouse & Delivery 75,54 Renewal 7939 McCarty St Northeast Near

HOUSTON METRO MARKET YEAREND 6 recording 76, SF of net absorption resulting from deliveries of facilities such as Katoen Naties 48, SF Baytown facility and Maintenance Supply Headquarters 9, SF building in the Beltway Southwest Business Park. Given the strength of preleasing for the current under construction pipeline, including IKEA s twin 5, SF distribution centers, absorption should continue in positive territory moving into the New Year as logistics companies and consumer demand continue to be a primary demand driver. Industrial Under Construction Houston Metro Q4 6 VAC A N C Y Vacancy rates remain stable The overall industrial vacancy rate (including sublet) ended the year at 6.5%, up slightly from 6.% at third quarter with direct vacancy tracking closely at 6.3%, up from 6.% last quarter. Year end vacancy for warehouse/distribution space was 7.% overall and 6.9% for direct. represented the tightest industrial product type with overall vacancy at 3.% and direct vacancy finishing at.7%. Flex space overall vacancy registered 8.% for the year with direct vacancy coming in at 7.5%. Considering the strong preleased percentage of the development pipeline along with a recovering broad economy, vacancy rates are expected to remain tight over the quarter. S U P P LY A N D D E V E L O P M E N T Construction activity dips slightly At year end, the Houston industrial market under construction pipeline totaled over 6.3 million SF, down nominally from 8. million SF during the third quarter. The pipeline preleased percentage registered a healthy 69% for the fourth quarter, driven by new facilities currently under construction for Amazon, FedEx, FloWorks International and IKEA. The East Southeast Far (.5M SF), Northwest Far (.3M SF), and North Far (.M SF) submarkets accounted for the largest portion of construction activity. Currently, the largest projects under construction are the 9, SF Amazon distribution center in the North Far submarket, the 8, SF FedEx facility in the Northwest Far submarket off Highway 99, and the twin 5, SF IKEA facilities in the EastSoutheast Far submarket. Overall, the construction pipeline remains healthy and in balance with demand for new space. SF % PRELEASED EastSoutheast Far,5,77 68% Northwest Far,335, 7% North Far,44,45 8% Southwest Far 63,97 67% Southwest Near 35,96 % South Far SUBMARKET 74,8 76% North Near 35,75 % Northeast Near, % Sugar Land 8, % 6,35,9 69% Total INDUSTRIAL DELIVERIES HOUSTON METRO Millions of SF SF Leased at Delivery SF Available at Delivery 6 4 8 6 4 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 74% 5 6 7 8 9 3 4 5 6* SOURCE CoStar, Transwestern *Through Q4 6 R E N TA L R AT E S Rents increase slightly After dipping slightly in the third quarter, asking rental rates for all sectors returned to form, increasing.% to $6.87 per SF NNN. As quality new facilities are delivered to market with unoccupied space, additional rent appreciation should continue into 7. Quoted base rents for new distribution space are between $4.8 and $5.4 per SF triple net with an allowance of $5.$8. per SF for initial improvements. We are still seeing rent concessions in most submarkets. Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory 6. MSF 494.9 MSF Overall Vacancy 8.5% 6.5% Q4 Net Absorption 4.7 MSF 843, SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. R E AL E STATE OUTLOO K HO UST ON MET RO Y E 6

INVESTMENT SALES Sales activity healthy The metro recorded $8.4 million in industrial sales transactions during the fourth quarter and a total of $7.9 million for the year as transaction activity remained healthy. While cap rates covered a wide range, depending on the type and class of product, they averaged 7.4% on balance for 6. Class A properties continue to be in the 56% range, while Class B rates are the 79% range. Downward pressure on Class A cap rates will likely continue as the economy strengthens and energy prices further stabilize. Active industrial buyers in the Houston market include: Prologis, TA Realty, CABOT, TIAACREF, Crow Holdings, Invesco, Travelers, Industrial Property Trust, Liberty Property Trust, Clarion Partners, Principal, Hillwood, Bentall Kennedy, AEW and GLP. Moving into 7, the investment market for industrial properties should continue to be healthy, particularly for Class A core product. OUTLOOK Industrial outlook generally positive Through the downturn of the energy crash, the industrial sector has displayed remarkable resiliency with demand created via the Port of Houston, consumer goods and petrochemical activity replacing much of the demand lost via the energy sector. While some concern around the declining petrochemical boom lingers, the recovering Houston economy and rising price per barrel of WTI has the market positioned to continue strong well through 7. As spec construction remains under control, vacancy rates are projected to remain stable over the year, fluctuating in the 6% range as additional supply is delivered to the market. Rental rates are anticipated to continue rising modestly with concessions playing only a nominal role in submarkets where vacancy is elevated above market averages such as the North Far and Southwest Far sectors. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $6. $5. $4. $3. $. $. $. 5 6 7 8 9 3 4 5 6 SOURCE Real Capital Analytics, Transwestern,*Through Q4 6 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 5,, 4,5, 4,, 3,5, 3,,,5,,,,5,,, 5, Q4 4 Q 5 Q 5 Q3 5 Q4 5 Q 6 Atl Dal Hou LA Q 6 Q3 6 Q4 6 SOURCE CoStar, Transwestern Notable Q4 Transactions PROPERTY SUBMARKET SF SELLER BUYER Lammons Facility South Far 3,599 Inland American REIT STAG Industrial Westchase Corporate Park Southwest Near 76,977 Adler Group & TriGate Capital FKM Partnership Gemini Business Park East Southeast Far 4,35 Gemini BP LP Ross Buildings REAL ESTATE OUTLOOK HOUSTON METRO YE 6 3

HOUSTON METRO MARKET YEAREND 6 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q4 6 WITH SUBLET Q4 6 UNDER CONSTRUCTION NET ABSORPTION Q4 6 NET ABSORPTION YTD 6 Central Business District 583,8 74,66 9.3%.8%.8% (9,) (,) 6,37,6 5,64.4% 4.% 4.% 6, (7,) 3,497,545,644,88 6.% 7.% 7.3% (3,) (34,) 3,8,438,97,3 4.9% 6.5% 6.8% (6,) (48,),97,546 6,683 3.5%.3%.3% 4,8 (3,) 4, 6,35,46 445,93 5.% 7.% 7.% 43,84,495 3,345,6 5.7% 7.6% 7.6% 5,84,87 4,7,7 5.9% 7.7% Total Central Business District EastSoutheast Far Total EastSoutheast Far 3,,468,97 555, 3,44, 7.7%,5,77 654, 3,445,, (7,) (66,) 8, North Far 8,7,644 648,44 6.3% 7.9% 8.% 7,984,68 449,533 3.4% 5.6% 5.6% 48,597,846 7,85,566.3% 4.6% 4.6%,4,45 (49,) 4, 64,79,98 8,83,53 9.7%.6%.7%,44,45 (56,) 356,,97,47 75,75 6.9% 6.9% 6.9% (9,) (,) 3,83,74 65,674.4%.%.% (,) (,) Total North Far North Near Total North Near 3,564,966 997,5 7.% 7.4% 7.9% 35, 6, 9, 7,946,4,38,45 6.% 6.3% 6.8% 35, (3,) 98, Northeast Far,5.%.%.% 8,7.%.%.% 859,48.%.%.%,64,7.%.%.% 49,469 6,846 7.5% 6.4%.% 5, 4, 6,5,399.%.%.% 5,, Total Northeast Far Northeast Near 4,5,46 36,73.4%.5%.8%, (59,) 76, Total Northeast Near 3,586,38 388,578.%.3%.6%, (39,) 4, 5,536,89 359,898 3.5% 6.5% 7.% (7,) (67,),893,6 83,659.5%.% 3.9% 5,3 (8,) 3,857, Northwest Far * 49,537,44 3,7,6 8.7% 7.5% 7.8%,39,8 36,,485, 67,967,944 4,363,89 7.% 6.4% 7.%,335, 8, 5,75,,83,93,35,975 8.3% 9.6%.5% (5,) (38,) 9,364,838 59,.5%.7%.3% 37, 8, 67,59,875 3,,94 3.5% 4.5% 4.7% 4, (67,) Total Northwest Near 87,688,644 4,6,7 3.9% 4.8% 5.% (,) (77,) Total Northwest Far Northwest Near SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 R E AL E STATE OUTLOO K HO UST ON MET RO Y E 6

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q4 6 WITH SUBLET Q4 6 UNDER CONSTRUCTION NET ABSORPTION Q4 6 NET ABSORPTION YTD 6 South Far,33,5 4,396.9% 3.% 3.% (3,) (6,) 6,89, 7,3.%.7%.7% 38, (3,) Total South Far,789,698 76,639.9% 3.5% 3.5% 74,8 (3,) 9, 9,98,84 9,66.4% 3.% 3.% 74,8 (88,) (8,) 84, South Near 689,56 54,443.% 7.9% 7.9% (4,),59,66 6,66.%.%.% 9,955,56 48,78.4% 4.% 4.% (9,) (69,),54,33 479,7 3.% 3.9% 3.9% (33,) (85,), Total South Near Southeast Near 363,96 3.%.%.% 9,947,6.%.%.%,43,4 45,78.5%.%.%, 67, Total Southeast Near 3,734,63 45,78.7%.8%.8%, 77, 48, Southwest Far,693,356 69,336 8.4%.%.%, 7,,58,397 4,74.%.3%.3% 7,, 7,34,669 95,359 7.5% 3.% 3.9% 53,97, 99,,58,4,5,436 6.6%.7%.% 63,97 66, 459, 6,6,39 33,698 6.% 4.6% 4.7%, 99, 4,68,887 6,77 3.3% 5.7% 5.7% 8, (,) Total Southwest Far Southwest Near 8,739,84,9,56 4.% 6.7% 7.% 35,96 4, 84, Total Southwest Near 39,95,,477,56 4.3% 6.% 6.6% 35,96 8, 73, 3,8, 95,689 4.% 6.% 6.%, 54,,5,35 8,34.7% 3.% 3.% (63,) Sugar Land 3,54,655,54,5 7.% 8.5% 8.5% 8, (4,) 493, 9,3,8,43,65 5.6% 7.4% 7.4% 8, (3,) 484, 4,458,47 3,,753 6.8% 7.5% 8.% 6,8 (88,) 3, 79,69,746,37,4.6%.7% 3.% 5,3 7, 3,836, Total Sugar Land Houston Total Houston 373,8,6 5,598, 5.7% 6.9% 7.% 6,37,9 76, 5,778, 494,99,33 3,936,96 5.% 6.3% 6.5% 6,35,9 843, 9,646, SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Stuart Showers Director of Research 73.7.338 stuart.showers@transwestern.com METHODOLOGY Rachel Andrae Research Analyst 73.7.6 rachel.andrae@transwestern.com The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 6 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET THIRD QUARTER 6 Industrial Market Faring Well Despite Economy Drought Vacancy remains tight through industrial expansion OVERVIEW Industrial holds steady In the third quarter, strong preleased deliveries drove overall positive market fundamentals for the Houston industrial sector. The delivery of the Daikin manufacturing plant in the Northwest Far market helped bolster net absorption in the third quarter. Rental rates edged down slightly for the third straight quarter as pressure from the overall Houston economy has had an effect on rates. Vacancy rates rose marginally, but overall remain tight considering the amount of new space that has come online over the previous few quarters. Following the deliveries of several large projects, the development pipeline has shrunk, but still remains active. Sublease space continued to rise in the third quarter, which may cause issues for vacancy in the period ahead. NET ABSORPTION Preleased deliveries boost absorption Net absorption for all sectors totaled 5,88, SF at the end of the third quarter, with a large portion being driven by preleased deliveries. Warehouse/distribution recorded,63, SF of net absorption as deliveries were 64% preleased, adding.8 million SF of occupied space to the market. With the delivery of the new Daikin facility out in the Northwest Far market, manufacturing recorded 3,68, SF of absorption. Absorption sits at a yeartodate total of 8.8 million SF, compared to 7.5 million SF of absorption at the same point last year. Net Absorption by Sector SECTOR Q3 6 Flex SF 3,68, SF,63, SF Total 5,88, SF Vacancy by Sector SECTOR OVERALL Flex 7.% 7.7%.7% 3.% 6.5% 6.7% Total 6.% 6.% Notable Q3 Leases TENANT SF LEASE TYPE BUILDING SUBMARKET Packwell 86, Renewal and Expansion Bayport Distribution Center EastSoutheast Far Merchant Metals 59,47 New 49 Langley Rd Northeast Near Vee Express 4, New Portwall Distribution Center Northeast Near DalTile Distribution 37,696 Renewal and Expansion Hempstead Highway Distribution Northwest Near Air Liquide 83,3 New Port 5 EastSoutheast Far

HOUSTON METRO MARKET THIRD QUARTER 6 Vacancy increases marginally The overall industrial vacancy rate (including sublet) was 6.% at third quarter, up slightly from 6.% at midyear and direct vacancy was 6.%, up from 5.8% last quarter. Vacancy for warehouse/distribution space was 6.7% for overall and 6.5% for direct, manufacturing remains tight at 3.% for overall and.7% for direct vacancy. Additionally, total available sublease space has reached 4. million SF, which is a 87% increase over the third quarter of 5. Looking ahead, vacancy rates are anticipated to tick upwards as a large amount of construction space will be delivering to the market over the next few periods. SUPPLY AND DEVELOPMENT Construction activity remains strong There was 8. million SF of industrial space under construction at third quarter, down from.6 million SF at midyear. This space was 68% preleased, down from 74% last quarter. The Northwest Far and EastSoutheast Far submarkets account for the largest portion of construction activity at 65% and warehouse/distribution projects comprise 96% of the space under construction. Currently, the largest projects under construction are the 9, SF Amazon building in the North far submarket and 8, SF FedEx facility in the Northwest Far submarket off Highway 99. The industrial market had several large deliveries come online in the third quarter, with 6.9 million SF delivered at 85% preleased. The most notable project delivery was the Daikin facility, a 3,9, SF manufacturing facility in the Northwest Far submarket. The construction pipeline remains in balance with development at.4% of standing inventory. Development activity should be steady in the period ahead as largeusers continue to move into the Houston market. RENTAL RATES Rents fall slightly Asking rental rates for all sectors dropped.6% from midyear to $6.45 per SF at third quarter as pressure from a slow economy have influenced rental rates. Quoted base rents for new distribution space are between $4.8 and $5.4 per SF triple net with an allowance of $5.$7. per SF for initial improvements. As sublease space continues to rise and landlords increase concession package offerings, rental rates are likely to weaken modestly as 6 comes to a close. Industrial Under Construction Houston Metro Q3 6 SUBMARKET INDUSTRIAL DELIVERIES HOUSTON METRO SF % PRE LEASED EastSoutheast Far 4,58,669 63% Northwest Far,96,35 8% North Far,43,6 97% Southwest Far 79,97 74% Southwest Near 47,6 % South Far 38,8 55% Sugar Land 39,75 5% North Near 35, % Total 8,9,357 68% Millions of SF SF Leased at Delivery SF Available at Delivery 6 4 8 6 4 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 74% 5 6 7 8 9 3 4 5 6* SOURCE CoStar, Transwestern *Through Q3 6 Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory 3.3 MSF 49.5 MSF Overall Vacancy 8.4% 6.% Q3 Net Absorption 3,,35 SF 5,88, SF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. REAL ESTATE OUTLOOK HOUSTON METRO Q3 6

INVESTMENT SALES Sales activity stable The metro recorded $57.6 million in industrial sales transactions during the third quarter. Sales for the second quarter totaled a revised $94. million. Cap rates covered a wide range depending on the type and class of product. Class A properties continue to be in the 56% range, while Class B rates are the 79% range. Active industrial buyers in the Houston market include: Prologis, TA Realty, CABOT, TIAACREF, Crow Holdings, Invesco, Travelers, Industrial Property Trust, Liberty Property Trust, Clarion Partners, Principal, Hillwood, Bentall Kennedy, AEW and GLP. Investors remain interested in new investment opportunities through a soft market, as the longterm outlook on Houston is still positive. Downward pressure on Class A cap rates will likely continue even through a weakened economy due to low interest rates and real estate allocations for industrial. Class B cap rates have risen based on the age of product coupled with concerns for future demand. Overall, the industrial investment will continue to be strong through the remainder of 6, and should continue into 7. OUTLOOK Industrial outlook generally positive The industrial sector has displayed a slight softening this year, but is still considered an active market that is positioned well for future growth. The Houston market will continue to benefit from strong distribution channels and levels of investment at both the Port of Houston and in petrochemical expansions. The EastSoutheast Far and Northwest Far submarkets are anticipated to continue to outperform others in the year ahead. Spec construction is largely under control as lenders are more conservative requiring equity or significant preleasing and REITs are over allocated for the Houston market. We expect vacancy rates to increase into the low7% range over the next months as demand for space remains steady or weakens slightly. Through the end of the year, net absorption should remain high with nearly 4.7 million SF of space delivering at 57% preleased. Most landlords will continue to offer concession packages to tenants as rental rates remain flat or decrease slightly, particularly on the new product in the southwest and north markets. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $6. $5. $4. $3. $. $. $. 5 6 7 8 9 3 4 5 6* SOURCE Real Capital Analytics, Transwestern,*Through Q3 6 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 4,5, 4,, 3,5, 3,,,5,,,,5,,, 5, Q3 4 Q4 4 Q 5 Q 5 Q3 5 Q4 5 Atl Dal Hou LA Q 6 Q 6 Q3 6 SOURCE CoStar, Transwestern Notable Q3 Transactions PROPERTY SUBMARKET SF SELLER BUYER Ellington Trade Center EastSoutheast Far 53,8 KDC & Harbert Real Estate Fund joint venture Lincoln Advisors REAL ESTATE OUTLOOK HOUSTON METRO Q3 6 3

HOUSTON METRO MARKET THIRD QUARTER 6 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q3 6 WITH SUBLET Q3 6 UNDER CONSTRUCTION NET ABSORPTION Q3 6 NET ABSORPTION YTD 6 Central Business District 583,8 65,37 9.3%.%.% (4,) (,) 6,37,6 57,78.4% 4.% 4.% (35,) (33,) 3,497,545,6,33 6.% 6.9% 7.3% (96,) (,) Total Central Business District 3,8,438,944,438 4.9% 6.4% 6.7% (45,) (455,) EastSoutheast Far,97,546 86, 3.5% 9.7%.% 4,8 5, 7, 6,95,46 446,5 5.% 7.% 7.% 3, (8,) (3,) 4,8,,39,88 5.7% 5.3% 5.3% 3,885,869,,,849, Total EastSoutheast Far 5,93,83,87,87 5.9% 5.7% 5.8% 4,58,669,7,,79, North Far 8,38,59 47,34 6.3% 5.8% 6.% 5, 33, 4, 7,948,68 43,38 3.4% 5.% 5.% (6,) 8, 48,5,596 6,96,43.3% 4.3% 4.5% 993,6 6, 9, Total North Far 64,68,73 7,845,785 9.7%.%.3%,43,6 3, 5, North Near,97,47 66,946 6.9% 6.% 6.% 4, 8, 3,83,74 45,97.4%.4%.4% 66, 3,564,966,,798 7.% 7.5% 8.3% 35, (75,) 93, Total North Near 7,946,4,35,76 6.% 6.3% 6.9% 35, 5,, Northeast Far,5.%.%.% 8,7.%.%.% 859,48.%.%.% Total Northeast Far,64,7.%.%.% Northeast Near 49,469 3,99 7.5% 7.7% 3.4% (8,) (,) 6,5,399 4,977.%.9%.9% (9,) 5, 4,5,46,57.4%.8%.% 99, 435, Total Northeast Near 3,586,38 349,846.%.%.4%, 439, Northwest Far * 5,536,89 343,87 3.5% 6.% 6.7% (7,) (5,),893,6 3,49.5%.8%.5% 3,898, 4,38, 49,54,94 4,3,68 8.7% 8.% 8.7%,96,35 (34,),69, Total Northwest Far 67,945,444 4,46,7 7.% 6.6% 7.4%,96,35 3,837, 5,57, Northwest Near,83,93 984,68 8.3% 9.%.% (58,) (86,) 9,364,838 96,66.5%.%.6% (55,) (9,) 67,59,875 3,4,44 3.5% 4.5% 4.9% (,) (6,) Total Northwest Near 87,688,644 4,5,7 3.9% 4.8% 5.3% (33,) (76,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 REAL ESTATE OUTLOOK HOUSTON METRO Q3 6

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q3 6 WITH SUBLET Q3 6 UNDER CONSTRUCTION NET ABSORPTION Q3 6 NET ABSORPTION YTD 6 South Far,33,5 7,365.9%.%.% 7, (3,) 6,87,5 37,45.%.%.% (96,) (69,),68,698 54,4.9%.5%.6% 38,8, 3, Total South Far 9,857,34 76,858.4%.4%.4% 38,8 3, 6, South Near 689,56 5,38.% 7.3% 7.3% 3, 88,,59,66 6,66.%.%.% 9,955,56 78,756.4%.8%.8% (6,) (4,) Total South Near,54,33 345,67 3.%.8%.8% (9,) 48, Southeast Near 363,96 3.%.%.% 3,, 9,947,6.%.%.3%,43,4 347,93.5%.7%.9% 49, 65, Total Southeast Near 3,734,63 347,93.7%.%.% 6, 75, Southwest Far,693,356 96,49 8.4%.6%.6%, 9,,,58,397,6.%.4%.4% (5,) (5,) 7,5,669 963,9 7.5% 3.7% 4.4% 69,97 96, 77, Total Southwest Far,99,4,8,477 6.6%.5%.9% 79,97, 93, Southwest Near 6,6,39 45,935 6.% 6.3% 6.3% (5,) (3,) 4,68,887 9,36 3.3% 6.3% 6.3% (34,) (38,) 8,67,884,883,677 4.% 6.6% 6.6% 47,6 (,) 43, Total Southwest Near 39,88,9,589,97 4.3% 6.5% 6.5% 47,6 (8,) 9, Sugar Land 3,8, 5,33 4.% 6.4% 6.4% (,) 44,,5,35 8,34.7% 3.% 3.% (63,) 3,474,95,7,6 7.% 8.% 8.% 39,75 (7,) 535, Total Sugar Land 9,93,6,358,4 5.6% 7.% 7.% 39,75 (37,) 56, Houston 4,389,346 3,45,34 6.8% 7.% 7.7% 9,8, 79,86,46,4,783.6%.7% 3.% 3, 3,68, 3,666, 37,996,84 4,73,56 5.7% 6.5% 6.7% 7,696,557,63, 5,7, Total Houston 49,47,434 9,343,353 5.% 6.% 6.% 8,9,357 5,88, 8,83, SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Rachel Andrae Research Analyst 73.7.6 rachel.andrae@transwestern.com Kevin Roberts President, Southwest 73.7.3347 kevin.roberts@transwestern.com METHODOLOGY The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 6 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

REAL ESTATE OUTLOOK HOUSTON INDUSTRIAL MARKET FIRST QUARTER 6 Southeast Port Market Outperforms Population growth drives demand for goods and services OVERVIEW Strong preleasing drives fundamentals The Houston industrial market saw vacancy tick up further this quarter, but higher preleasing in deliveries propelled absorption back positive. Demand remains strong for retail distributors and thirdparty logistics providers with new leases by Advance Auto Parts and Serta, among others in 6. Despite the energy downturn, Houston remains a gateway city with a worldclass port, and low commodity prices are fueling petrochemical growth along the Gulf Coast. Sublease inventories are on the rise, especially in the manufacturing sector, but vacancy remains tight overall. Rental rates remained flat this quarter as pressure on effective rents increased. NET ABSORPTION Absorption rebounds in Q Net absorption for all sectors totaled. million SF at first quarter, driven largely by preleased deliveries. Warehouse/distribution recorded.8 million SF of net absorption as deliveries were 64% preleased, adding. million SF of occupied space to the market. Over the same period, manufacturing recorded 66, SF, and flex had 59, SF of net absorption. Oil supply and demand is not projected to rebalance for another to 8 months which will continue to cause weaker demand for some subsets of industrial space. Net Absorption by Sector SECTOR Q 6 Flex 59, SF 66, SF,796, SF Total,, SF Vacancy by Sector SECTOR OVERALL Flex 6.8% 7.%.6%.6% 6.% 6.% Total 5.4% 5.6% Notable Q Leases TENANT SF LEASE TYPE BUILDING SUBMARKET Advance Auto Parts 44, New Beltway Crossing NorthWest Northwest Far Serta 68,48 New Fallbrook Pines Business Park Northwest Far United Stationers, New Cole Creek Business Center Northwest Far Maintenance Supply Headquarters 9, Prelease Beltway Southwest Business Park Southwest Far Homelegance, Inc. 75, Prelease Beltway Southwest Business Park Southwest Far

HOUSTON METRO MARKET FIRST QUARTER 6 Vacancy rising as expected The overall industrial vacancy rate (including sublet) was 5.6% at first quarter, up from 5.3% at yearend. Direct vacancy was 5.4%, up from 5.% last quarter. Broken out by sector, vacancies for flex and manufacturing were unchanged from yearend, while warehouse/ distribution continued rising with the addition of new supply to the market. Industrial vacancy is likely to continue climbing in the period ahead as Houston comes down from the high of the development cycle, and low oil prices impact demand for space. Additionally, sublease space could become a concern in 6 as total available sublet has grown by 75% over the last year to 3.5 million SF. SUPPLY AND DEVELOPMENT Pipeline edges down slightly There was.6 million SF of industrial space under construction at first quarter, up significantly from 9.5 million SF at yearend. This space was 78% preleased, up from 6% last quarter. The Northwest Far and EastSoutheast Far submarkets account for 7%, and warehouse/ distribution product comprises 6% of the space under construction. The largest projects under construction are the 3.9 million SF Daikin campus and the 8, SF FedEx facility, both in the Northwest Far submarket just west of the Grand Parkway. The first quarter remained a busy one for deliveries with 3.6 million SF delivered at 65% preleased. The most notable project was Aldi's 65, SF distribution center in Sugar Land. The full development pipeline is at 3.5% of standing inventory, and developers are continuing to break ground despite the uncertain economy. RENTAL RATES Rent growth remains flat Asking rental rates for all sectors dropped just.3% to $6.66 per SF at first quarter as rents face pressure from economic weakness and negative news. Quoted base rents for new distribution space are between $5. and $5.3 per SF triple net with an allowance of $5.$6.5 per SF for initial improvements. Due to the volume of new supply, greater concession packages are being offered especially on speculative construction projects, a trend expected to continue. INVESTMENT SALES Sales activity slows in Q The metro recorded $55.3 million in industrial sales transactions during the first quarter, and sales for all of 5 totaled a revised $. billion. Cap rates covered a wide range depending on the type and class of product. Class A properties sold in the 56% range, while Class B traded in the 79% range. Industrial Under Construction Houston Metro Q 6 SUBMARKET INDUSTRIAL DELIVERIES HOUSTON METRO SF % PRE LEASED Northwest Far 4,93,84 98% EastSoutheast Far 3,48,995 8% North Far,456,65 3% Southwest Far 86,47 39% Southwest Near 73,95 5% South Far, % Sugar Land 6, % North Near 35, % Total,56,6 78% Millions of SF SF Leased at Delivery SF Available at Delivery 4 8 6 4 76% 3% 33% 9% 4% 8% 8% 6% 6% 46% 43% 65% 5 6 7 8 9 3 4 5 6* SOURCE CoStar, Transwestern *Through Q 6 Multitenant vs Transwestern market coverage MULTITENANT ENTIRE MARKET Inventory 97. MSF 48.6 MSF Overall Vacancy 8.6% 5.6% Q Net Absorption.3 MSF. MSF WHY OUR METHODOLOGY IS THE BEST INDICATOR OF CURRENT MARKET CONDITIONS We include owner occupied and singletenant buildings in our inventory, vacancy and absorption statistics to capture more market activity than many of our competitors. This allows us to better correlate changes in the market with changes in employment. As singletenant space does compete with multitenant space, we believe it is critical to understand all components of the market. The inclusion of singletenant and owneroccupied space tends to yield lower vacancy rates and higher absorption totals than some of our competitors results, but our coverage of the market is more comprehensive. REAL ESTATE OUTLOOK HOUSTON METRO Q 6

However, welllocated Class A distribution projects are currently trading in the mid5% range based on the abundance of capital still looking for core investments. Active industrial buyers in the Houston market include: Prologis, TA Realty, CABOT, TIAACREF, Crow Holdings, Invesco, Travelers, Industrial Property Trust, Liberty Property Trust, Clarion Partners, Principal and GLP. The decline in oil prices has resulted in increased caution from some investors, though longterm fundamentals project favorably for continued industrial investment. Despite the soft economy, cap rates for Class A, core industrial product will likely remain stable. Cap rates for Class B will continue rising based on age of product, tenant base and concerns about future demand and rent growth in the sector. In the period ahead, the perceived "headline risk" in Houston could make debt and equity more challenging. OUTLOOK Market shows resilience thus far While manufacturing has lost more jobs than any other sector over the last months, warehouse/distribution space accounts for more than 75% of the total inventory in Houston, and it is performing well. Daiken, UPS and FedEx are all building new distribution centers across the metro to accommodate future growth. This trend is likely to continue as strong distribution channels and investment in the Port of Houston provide a major competitive advantage. The EastSoutheast Far submarket is expected to outshine all others in 6. In addition, there is over $5 billion in investment currently being poured into downstream projects along Texas' Gulf Coast which will effectively create a new export gateway for LNG products. We anticipate the overall vacancy rate for all sectors of industrial to rise into the low7% range over the next months with the volume of deliveries set to hit the market, and low oil prices affecting job growth and reducing demand for space. Net absorption will likely remain fairly positive, though not near the levels seen in 4 and 5. Rents are expected to remain relatively flat in 6 though concessions will become more prevalent, especially for new construction. Increasing sublease space could also present new challenges for the Houston industrial market. COMPARATIVE INDUSTRIAL INVESTMENT SALES VOLUME SELECT METRO AREAS Sales Volume in Billions $6. $5. $4. $3. $. $. $. 5 6 7 8 9 3 4 5 6* SOURCE Real Capital Analytics, Transwestern,*Through Q 6 INDUSTRIAL SUBLEASE LEVELS HOUSTON METRO AREA 3,5, 3,,,5,,,,5,,, 5, Q 4 Q 4 Q3 4 Q4 4 Q 5 Q 5 Atl Dal Hou LA Q3 5 Q4 5 Q 6 SOURCE CoStar, Transwestern *Through Q 6 Notable Q Transactions PROPERTY SUBMARKET SALE PRICE CAP RATE SELLER BUYER Bondesen North Business Park (property portfolio) Northwest Far $65.7 million ($3/SF) 6.% DCT Industrial Trust Industrial Property Trust Northwest Point Business Park Northwest Far $5.6 million ($67/SF) 6.7% EastGroup Properties Sealy & Co REAL ESTATE OUTLOOK HOUSTON METRO Q 6 3

HOUSTON METRO MARKET FIRST QUARTER 6 Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q 6 WITH SUBLET Q 6 UNDER CONSTRUCTION NET ABSORPTION Q 6 Central Business District 583,8 5,39 9.3% 8.8% 8.8% 3, 6,37,6 4,339.4%.7%.7% (8,) 3,497,545,456,848 6.% 6.% 6.6% (47,) Total Central Business District 3,8,438,6,56 4.9% 5.3% 5.6% (4,) EastSoutheast Far,97,546 95,59 3.5%.%.6% 63, 6,95,46 346,98 5.% 5.6% 5.6% 3, (3,) 4,,35,6,45 5.7% 6.5% 6.6% 3,8,995 39, Total EastSoutheast Far 48,4,97 3,4,663 5.9% 6.5% 6.7% 3,48,995 34, North Far 8,38,59 54,588 6.3% 6.% 6.3% 5, 8, 7,69,733 55,33 3.4% 3.3% 3.4% 4,875 8, 47,3,65 5,56,44.3%.8%.%,64,75 99, Total North Far 6,959,877 6,3,334 9.7%.%.%,456,65 387, North Near,97,47 84,55 6.9% 7.7% 8.6% (9,) 3,83,74.4%.%.% 46, 3,564,966 975,3 7.% 7.% 7.5% 35, 4, Total North Near 7,946,4,59,86 6.% 5.9% 6.% 35, 78, Northeast Far,5.%.%.% 8,7.%.%.% 859,48.%.%.% Total Northeast Far,64,7.%.%.% Northeast Near 49,469 8,943 7.5% 6.9% 6.9% 3, 5,93,399 3,76.%.4%.4% (4,) 3,836,8 6,5.4%.%.5% 97, Total Northeast Near 3,87,678 34,874.%.%.4% 76, Northwest Far * 5,536,89 38,86 3.5% 4.3% 4.7% (44,) 8,973,36,5.5%.%.%, 49,47,77 4,6,378 8.7% 8.5% 8.6% 4,93,84 753, Total Northwest Far 63,757,39 4,499,966 7.% 7.% 7.% 4,93,84 89, Northwest Near,83,93 875,98 8.3% 8.% 8.4%, 9,37, 39,98.5%.5%.5% 67,59,875,477,6 3.5% 3.7% 4.% (74,) Total Northwest Near 87,65,8 3,493,449 3.9% 4.% 4.4% (5,) SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government See next page for balance of industrial indicators. 4 REAL ESTATE OUTLOOK HOUSTON METRO Q 6

Houston Industrial Market Indicators SUBMARKET INVENTORY SF AVAILABLE IMMEDIATELY 5 Q 6 WITH SUBLET Q 6 UNDER CONSTRUCTION NET ABSORPTION Q 6 South Far,33,5 3,75.9%.4%.4% (7,) 6,87,5 7,49.%.4%.4% 4,,655,78 74,67.9% 3.4% 3.5%, (93,) Total South Far 9,83,794 799,37.4%.7%.7%, (59,) South Near 689,56 3,5.% 8.9% 8.9% 8,,59,66 6,66.%.%.% 9,955,56 88,7.4%.9%.9% (5,) Total South Near,54,33 435,568 3.% 3.6% 3.6% (4,) Southeast Near 363,96 4,558 3.% 4.% 4.% (4,) 9,947,6.%.%.%,43,4 56,494.5%.5%.5% 6, Total Southeast Near 3,734,63 5,5.7%.7%.7%, Southwest Far,593,356 3,5 8.4% 3.4% 3.8%, 4,,58,397 7,384.%.%.% 6,59,9 57,39 7.5% 8.% 8.% 66,47 (3,) Total Southwest Far 9,68,87 758,33 6.6% 7.8% 7.9% 86,47, Southwest Near 6,6,39 36,93 6.% 4.8% 4.8% 86, 4,68,887 38,67 3.3% 3.% 3.% 4, 7,993,549,56,53 4.% 5.4% 5.4% 73,95 (57,) Total Southwest Near 39,4,575,96, 4.3% 5.% 5.% 73,95 43, Sugar Land 3,8, 97,49 4.% 6.4% 6.6% 6, (74,),5,35 7,57.7%.7%.7% 3,474,95 993, 7.% 7.4% 7.5% 65, Total Sugar Land 9,67,6,7,9 5.6% 6.3% 6.5% 6, 54, Houston 4,63,346,88,75 6.8% 6.8% 7.% 356, 59, 74,75,485,88,53.6%.6%.6% 7,875 66, 365,66,65,57,7 5.7% 6.% 6.%,934,87,796, Total Houston 48,573,896 6,7,896 5.% 5.4% 5.6%,56,6,, SOURCE Inventory and vacancy from analysis of CoStar data, net absorption computed by Transwestern NOTE Includes buildings 5, SF RBA and greater, does not include buildings under construction or owned by the government CONTACT Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com Kevin Roberts President, Southwest 73.7.3347 kevin.roberts@transwestern.com METHODOLOGY The information in this report is the result of a compilation of information on office, industrial, retail, multifamily and healthcare properties located in the Houston metropolitan area. This report includes singletenant, multitenant and owneruser properties and excludes properties owned and occupied by a government agency. Copyright 6 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from various primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL FebRUARy 6 Recent IndustRIal Leases Northwest Near :: The Service Center 8,35 SF renewal at West by Northwest North Near :: Circle 8 Services 38,6 SF new lease at Udelson Industrial Park Southwest Far :: Dräger 37,65 SF prelease at Beltway Southwest Business Park Northwest Near :: Specialty Rolled Metals 3,787 SF renewal at Windfern Distribution Center Recent IndustRIal sales Northwest Far :: Bondesen North Business Park 59,853 SF, property portfolio Buyer: Industrial Property Trust Seller: DCT Industrial Trust INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% 3.% Q4 Q 3 Q 3 Q3 3 Q4 3 Q 4 Q 4 Overall Vacancy Rates Asking Rental Rates (NNN) Q3 4 Q4 4 Q 5 Q 5 Q3 5 Q4 5 $6.75 $6.5 $6.5 $6. $5.75 $5.5 $5.5 Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION 5 NET ABSORPTION Central Business District 3,8,438,488,648 4.9% 5.% (55,) EastSoutheast Far 47,439,66,88,593 5.9% 6.%,896,6,7, North Far 6,89,97 6,38,488 9.7% 9.9%,333,3,8, North Near 7,796,4,87,575 6.% 6.4% 3, 47, Northeast Far,64,7 Northeast Near 3,7,678 374,48.%.%, Northwest Far 6,969,456 4,54,97 7.% 7.3% 4,38,84,578, Northwest Near 87,69,8 3,398,84 3.9% 4.% 4, (37,) South Far 9,8,794 7,94.4%.6%, 343, South Near,54,33 393,37 3.% 3.3% 3, Southeast Near 3,734,63 53,54.7%.7% (6,) Southwest Far 9,55,65 68,8 6.6% 6.6% 743,757 38, Southwest Near 38,855,575,655,77 4.3% 4.3% 349, (3,) Sugar Land 8,35,6,34,45 5.6% 5.7% 756, 43, TOTAL 479,8,55 4,693,87 5.% 5.3% 9,498,934 7,7, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (Q4 5) Trailing Months Last Quarter (Q4 5) United States Trailing Months Volume ($ Mil) $57. $536.7 $,89.7 $6,93. $76,568. No. Of Properties 7 54 6,586 7,47 Houston Industrial Submarkets Click Map below to Expand N 49 9 9 NW NE Total SF 8,3 7,73,993 5,349,34 44,4,9,38,3,6 CBD 6 Average Price/SF N/A $ $77 $75 $75 99 6 8 Average Cap Rate (Yield) N/A N/A 7.8% 6.6% 6.8% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH FebRUARy 6 45 49 9 9 99 6 8 3 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET February 6

HOUSTON INDUSTRIAL MARKET WATCH FebRUARy 6 ABout TRanswesteRN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 37 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 38 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Carter Thurmond Associate 73.7.54 carter.thurmond@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 Rachel.Alexander@transwestern.com Kevin Roberts President, Southwest 73.7.3347 Kevin.Roberts@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 6 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL DEcembER 5 Recent IndustRIal Leases South Far :: Gulf Winds International 345, SF renewal at Central Industrial Park Northwest Near :: Janco Foods 6,5 SF renewal at Silber Roads Business Center I Northwest Far :: The Brandt Cos 56,55 SF prelease at Sam Houston Business Park Recent IndustRIal sales Northwest Far :: Mason Creek Business Center 45, SF warehouse property Buyer: Foxmark Seller: MCA Mason Creek INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.75 $6.5 $6.5 $6. $5.75 $5.5 3.% Q3 Q4 Q 3 Q 3 Q3 3 Q4 3 Q 4 Q 4 Q3 4 Q4 4 Q 5 Q 5 Q3 5 $5.5 Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION Q3 5 NET ABSORPTION Central Business District 3,8,438,488,648 4.9% 5.% (47,) EastSoutheast Far 46,683,78,587,35 5.5% 5.6%,33,76, North Far 6,9,98 5,5,87 8.9% 9.% 846,5 56, North Near 7,7,54 963,36 5.4% 5.7% 75,6 4, Northeast Far,64,7 Northeast Near 3,5,678 36,6.%.% 8, Northwest Far 6,85,363 4,,37 6.7% 6.7% 4,584,59 9, Northwest Near 87,38,38,74,73 3.% 3.5% 6,87 4, South Far 9,8,794 78,9.6%.7% 63, South Near,54,33 3,584.6%.6% 75, Southeast Near 3,734,63 55,84.7%.7% (4,) Southwest Far 9,55,65 657,57 6.9% 6.9% 65,5 (7,) Southwest Near 38,78,779,487,86 3.8% 3.9% 44,36 (67,) Sugar Land 7,976,559 644,9 3.6% 3.7% 65,, TOTAL 476,947,789,,949 4.7% 4.8% 9,79,6,95, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (Q3 5) Trailing Months Last Quarter (Q3 5) United States Trailing Months Volume ($ Mil) $384. $39.7 $,66. $3,396. $65,89. No. Of Properties 35 8 5,369 6,588 Houston Industrial Submarkets Click Map below to Expand N 49 9 9 NW NE Total SF 5,747,45 4,933,37 3,46,937 7,44,76 936,36,563 CBD 6 Average Price/SF N/A $8 $74 $8 $74 99 6 8 Average Cap Rate (Yield) N/A 7.3% 7.8% 6.8% 6.9% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH DecembER 5 45 49 9 9 3 99 6 8 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET December 5

HOUSTON INDUSTRIAL MARKET WATCH DecembER 5 ABout TRanswesteRN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 37 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 Rachel.Alexander@transwestern.com Kevin Roberts President, Southwest 73.7.3347 Kevin.Roberts@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 5 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MARKET WATCH HOUSTON INDUSTRIAL AUGUST 5 RECENT INDUSTRIAL LEASES EastSoutheast Far :: Modern Polymer Products 3, SF renewal at 34353 SH 5 North Far :: General Cable 5,75 SF renewal at Prologis Business Park Northwest Near :: Custom Form Transportation 7, SF renewal at 7 N Post Oak Rd RECENT INDUSTRIAL SALES Southwest Near :: 75 Oliver St 75, SF manufacturing property Buyer: Gulf Coast Commercial Group Seller: Tarkett, Inc INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 $6. $5.75 $5.5 $5.5 3.% Q Q3 Q4 Q 3 Q 3 Q3 3 Q4 3 Q 4 Q 4 Q3 4 Q4 4 Q 5 Q 5 $5. Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION Q 5 NET ABSORPTION Central Business District 3,8,438,44,653 4.8% 4.8% (5,) EastSoutheast Far 46,484,8,498,88 5.4% 5.4% 95,37,67, North Far 6,84,85 4,994,595 8.% 8.4%,739,9 533, North Near 7,7,54,76,846 6.% 6.3% 75,6 (5,) Northeast Far,64,7.%.% Northeast Near 3,8,678 339,.%.% 7, 7, Northwest Far 6,994,75 3,97,75 5.4% 5.4% 6,48,98 997, Northwest Near 87,95,9,65,89 3.% 3.3% 53,88 36, South Far 9,8,794 844,77.8%.9% 45, South Near,54,33 386,67 3.% 3.% 43, Southeast Near 3,734,63 5,599.6%.7% (74,) Southwest Far 9,534,65 63,6 6.5% 6.6% 596,75 59, Southwest Near 38,696,794,336,87 3.5% 3.5% 43,796 47, Sugar Land 7,976,559 654,833 3.6% 3.7% 65, 4, TOTAL 473,49,47,645,565 4.4% 4.4%,3,48 3,354, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics QUARTER TO DATE HOUSTON MSA LAST QUARTER (Q 5) TRAILING MONTHS LAST QUARTER (Q 5) UNITED STATES TRAILING MONTHS Volume ($ Mil) $98.5 $33. $,436. $6,74.7 $63,93.6 No. Of Properties 36 57,586 6,47 Houston Industrial Submarkets CLICK MAP BELOW TO EXPAND N 49 9 9 NW NE Total SF,64,6 4,887,696,743,65 8,574,7 97,57,85 CBD 6 Average Price/SF N/A $48 $66 $7 $73 99 6 8 Average Cap Rate (Yield) N/A 8.3% 7.8% 6.8% 7.% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH AUGUST 5 45 49 9 9 3 99 6 8 59 88 35 45 CENTRAL. Houston CBD SOUTHWEST. Southwest Near. Southwest Far 3. Sugar Land SOUTHEAST. Southeast Near. EastSoutheast Far SOUTH. South Near. South Far NORTHWEST. Northwest Near. Northwest Far NORTH. North Near. North Far NORTHEAST. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET AUGUST 5

HOUSTON INDUSTRIAL MARKET WATCH AUGUST 5 ABOUT TRANSWESTERN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 37 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON INDUSTRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com CONTACT Rachel Alexander Director of Market Research 73.7.3344 Rachel.Alexander@transwestern.com Kevin Roberts President, Southwest 73.7.3347 Kevin.Roberts@transwestern.com METHODOLOGY The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 5 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

Market WATCh HOUSTON INDUSTRIAL June 5 Recent Industrial Leases EastSoutheast Far :: Gulf Intermodal Services 3, SF new lease at Underwood EastSoutheast Far :: Abrasive Products & Equipment,58 SF new lease at 39 State Hwy 5 INDUSTRIAL LEASE STATISTICS 6.% 5.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 North Far :: Pathmark Transportation 76,34 SF new lease at 48 North Freeway 5.% $6. Recent Industrial sales North Far :: Beltway North Commerce Center 35,68 SF Buyer: TIAACREF Seller: Amstar & Davis Commercial Development joint venture 4.5% 4.% 3.5% 3.% Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 Q4 3Q4 4Q4 Q5 $5.75 $5.5 $5.5 $5. Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION Q 5 NET ABSORPTION Central Business District 3,8,438,37,8 4.4% 4.4% 7, EastSoutheast Far 45,53,88,6,39 5.7% 5.7%,938,64 358, North Far 6,86,663 4,77,9 7.9% 8.%,74,943,7, North Near 7,7,54,5,36 5.9% 5.9% 4,6 6, Northeast Far,64,7.%.% Northeast Near 3,8,678 365,789.%.%, 39, Northwest Far 59,54,34,839,947 4.8% 4.8% 3,36,696 58, Northwest Near 86,98,3,7,4 3.% 3.% 668,78 (39,) South Far 9,66,69 885,848 3.% 3.% 4,75 (6,) South Near,54,33 49,8 3.5% 3.6% 87, Southeast Near 3,734,63 48,75.4%.4% (,) Southwest Far 9,35,35 48,9 5.3% 5.4% 443,63 47, Southwest Near 38,696,794,383,538 3.6% 3.6% 37,96 8, Sugar Land 7,976,559 778,564 4.3% 4.4% 65, 83, TOTAL 469,464,464,55,844 4.3% 4.3% 8,56,6,83, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics QUARTER to DATE Houston MSA Last QUARTER (Q5) Trailing Months Last QUARTER (Q5) United STATES Trailing Months Volume ($ Mil) $36.6 $53.4 $,35. $,37. $63,765. No. Of Properties 8 35 47,696 6,43 Houston Industrial Submarkets Click Map below to Expand N 49 9 9 NW NE Total SF 3,935,8 6,46,856,58,43 5,44,6 863,68,34 CBD 6 Average Price/SF N/A $93 $66 $8 $75 99 6 8 Average Cap Rate (Yield) N/A N/A 7.7% 7.% 7.% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH JUNe 5 45 49 9 9 3 99 6 8 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET June 5

HOUSTON INDUSTRIAL MARKET WATCH JUNe 5 ABout TRanswesteRN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 37 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 5 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL MARch 5 Recent IndustRIal Leases Sugar Land :: Professional Packing Systems 7, SF new lease at Sugar Land Interchange Distribution Center EastSoutheast Far :: Eugene B. Smith & Co., SF new lease at Bay Area Business Park Northwest Near :: Wilsonart 68, SF renewal and expansion at Pine Forest Business Park INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 $6. $5.75 Recent IndustRIal sales EastSoutheast Far :: Bayport North Distribution Center 565, SF warehouse/distribution property Buyer: Industrial Property Trust Seller: Carson Cos Industrial Market Indicators 4.% 3.5% 3.% 4Q Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 Q4 3Q4 4Q4 $5.5 $5.5 $5. Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION 4 NET ABSORPTION Central Business District 3,8,438,434,767 4.7% 4.7%, EastSoutheast Far 45,45,6,759,3 6.% 6.%,6,938,85, North Far 58,94,575 4,898,5 8.3% 8.5%,78,754,37, North Near 7,64,44,6,76 6.6% 6.7% 4,6 594, Northeast Far,64,7.%.% 4, Northeast Near 3,8,678 45,7.3%.3%, 5, Northwest Far 58,66,937,44,63 4.% 4.% 3,35,593,65, Northwest Near 86,98,3,54,87.9% 3.% 68,478,88, South Far 9,369,78 6,379.%.% 9,84 994, South Near,54,33 55,664 4.% 4.% 68, Southeast Near 3,734,63 47,65.3%.3% 489, Southwest Far 9,95,35 489,4 5.4% 5.4% 46,63 43, Southwest Near 38,656,794,44,78 3.7% 3.7% 37,96 66, Sugar Land 7,945,559,3,97 5.7% 5.8% 68,, TOTAL 466,656,87,8,46 4.3% 4.4% 8,645,3 8,956, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (4Q4) Trailing Months Last Quarter (4Q4) United States Trailing Months Houston Industrial Submarkets Click Map below to Expand N 49 9 9 Volume ($ Mil) $4.6 $356.9 $,5.6 $6,8.4 $5,687.4 No. Of Properties 49 34,963 5,994 NW NE Total SF,77,7 6,436,64 7,345,3 5,44,3 773,664,5 CBD 6 Average Price/SF N/A $49 $64 $75 $7 99 6 8 Average Cap Rate (Yield) N/A N/A 7.5% 7.% 7.% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH MARch 5 45 49 9 9 3 99 6 8 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET march 5

HOUSTON INDUSTRIAL MARKET WATCH MARch 5 ABout TRanswesteRN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 37 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 5 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL FebRUARy 5 recent Industrial Leases Northwest Near :: Banta,6 SF renewal at West by Northwest Business Park Northeast Near :: FXI, Inc. 56,7 SF renewal at Eastwood 4 North Near :: SRS Distribution 3, SF new lease at Udelson Industrial Park recent Industrial sales Southwest Near :: Freeport SW Business Park 45, SF manufacturing property Buyer: Satake USA, Inc. Seller: Sherman Family Trust INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 $6. $5.75 $5.5 $5.5 3.% 4Q Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 Q4 3Q4 4Q4 $5. Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION 4 NET ABSORPTION Central Business District 3,8,438,434,767 4.7% 4.7%, EastSoutheast Far 45,45,6,759,3 6.% 6.%,6,938,85, North Far 58,94,575 4,898,5 8.3% 8.5%,78,754,37, North Near 7,64,44,6,76 6.6% 6.7% 4,6 594, Northeast Far,64,7.%.% 4, Northeast Near 3,8,678 45,7.3%.3%, 5, Northwest Far 58,66,937,44,63 4.% 4.% 3,35,593,65, Northwest Near 86,98,3,54,87.9% 3.% 68,478,88, South Far 9,369,78 6,379.%.% 9,84 994, South Near,54,33 55,664 4.% 4.% 68, Southeast Near 3,734,63 47,65.3%.3% 489, Southwest Far 9,95,35 489,4 5.4% 5.4% 46,63 43, Southwest Near 38,656,794,44,78 3.7% 3.7% 37,96 66, Sugar Land 7,945,559,3,97 5.7% 5.8% 68,, TOTAL 466,656,87,8,46 4.3% 4.4% 8,645,3 8,956, Source: Transwestern analysis of Costar data, includes buildings 5, SF RBA and greater, excluding government owned buildings Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (4Q4) Trailing Months Last Quarter (4Q4) United States Trailing Months Houston Industrial Submarkets Click Map below to Expand N 49 9 9 Volume ($ Mil) $.5 $33. $997.7 $6,667. $53,864. No. of Properties 3 46 3,94 5,96 NW NE Total SF 4,47 5,575,59 6,484,97 48,68,36 78,44,97 CBD 6 Average Price/SF N/A $44 $64 $75 $7 99 6 8 Average Cap Rate (Yield) N/A N/A 7.5% 7.% 7.% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH FebRUARy 5 45 49 9 9 3 99 6 8 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET FEBRUARY 5

HOUSTON INDUSTRIAL MARKET WATCH FebRUARy 5 ABout TRANSWESTERN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 4 team members and has been an innovator in the Houston market for 37 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustrIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@transwestern.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 5 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL December 4 recent Industrial Leases Northeast Near :: Atlantic Clothing, Inc. 3,95 SF new lease at 865 City Park Loop Northwest Near :: Veritrust Corp. 87, SF renewal & expansion at Afton Road North Far :: Hunting Energy Services 8, SF renewal at 44 N Sam Houston Pkwy recent Industrial sales Northwest Near :: 5 Jensen Dr 7,4 SF warehouse/distribution property Buyer: EnFab Holdings LLC Seller: Goodwill Industries of Houston INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 $6. $5.75 $5.5 $5.5 3.% 3Q 4Q Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 Q4 3Q4 $5. Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION 3Q4 NET ABSORPTION Central Business District 3,8,438,535,948 5.% 5.%, EastSoutheast Far 44,778,6 3,56,387 8.% 8.% 7,334 757, North Far 58,56,87 4,74,678 7.4% 7.4%,66,963 (9,) North Near 7,54,44,5,938 6.6% 6.6%, 3, Northeast Far,64,7.%.% Northeast Near 3,6,678 53,934.7%.7% 4, 3, Northwest Far 58,334,34,447,538 4.% 4.%,89,79 44, Northwest Near 86,869,3 3,36,34 3.6% 3.7% 9, South Far 9,349,384 647,6.%.3% 9,84 33, South Near,54,33 567,86 4.7% 4.7% 84, Southeast Near 3,734,63 59,768.7%.7% 6, Southwest Far 9,95,35 49,648 5.4% 5.4% 6,5 (5,) Southwest Near 38,566,794,4,84 3.6% 3.6% 9, 67, Sugar Land 7,945,559,3,46 6.% 6.% 3, (3,) TOTAL 464,833,66,36,83 4.6% 4.6% 5,99,8,36, Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (3Q4) Trailing Months Last Quarter (3Q4) United States Trailing Months Houston Industrial Submarkets Click Map below to Expand N 49 9 9 Volume ($ Mil) $4. $9.3 $,3.3 $,795. $5,986.4 No. of Properties 3 3,356 5,63 NW NE Total SF,337,38 3,,544 7,359,364 7,396,65 78,69,99 CBD 6 Average Price/SF N/A $66 $63 $77 $7 99 6 8 Average Cap Rate (Yield) N/A 7.% 7.6% 7.% 7.3% SW SE Source: Real Capital Analytics 59 S 45

HOUSTON INDUSTRIAL MARKET WATCH december 4 45 49 9 9 3 99 6 8 59 88 35 45 central. Houston CBD Southwest. Southwest Near. Southwest Far 3. Sugar Land Southeast. Southeast Near. EastSoutheast Far south. South Near. South Far northwest. Northwest Near. Northwest Far north. North Near. North Far northeast. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET december 4

HOUSTON INDUSTRIAL MARKET WATCH DecemBer 4 ABout TRANSWESTERN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 38 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 385 team members and has been an innovator in the Houston market for 36 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON IndustrIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@tramswesterm.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com Contact Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com Methodology The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 4 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MARKET WATCH HOUSTON INDUSTRIAL SEPTEMBER 4 RECENT INDUSTRIAL LEASES North Far :: DB Schenker 5, SF at Kenswick AirFreight & LogisticsCentre South Far :: Office Furniture Connection 5,78 SF at 3 Almeda Rd South Far :: Composite Advanced Technologies 8,65 SF at 744 E Orem Dr RECENT INDUSTRIAL SALES Sugar Land :: 6 Gillingham Ln 369,364 SF warehouse/distribution property Buyer: Dalfen America Corp Seller: Northstar Commercial partners INDUSTRIAL LEASE STATISTICS 6.% 5.5% 5.% 4.5% 4.% 3.5% Overall Vacancy Rates Asking Rental Rates (NNN) $6.5 $6.5 $6. $5.75 $5.5 $5.5 3.% Q 3Q 4Q Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 Q4 $5. Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION Q4 NET ABSORPTION Central Business District 3,8,438,547,64 5.% 5.% EastSoutheast Far 44,733,6 4,7,983 9.5% 9.5% 56,334 74, North Far 57,9,85 4,8,88 7.% 7.%,43,3 784, North Near 7,54,44,84,9 6.8% 6.8%, 3, Northeast Far,64,7.%.% Northeast Near 3,,98 8,879.7% 3.% 39, Northwest Far 57,584,798,8,48 3.8% 3.8%,355,56 395, Northwest Near 86,853,3 3,4,458 3.9% 4.% 6, 85, South Far 9,99,557 89,.8% 3.% 39,98 359, South Near,54,33 65,363 5.4% 5.4% 5, Southeast Near 3,734,63 65,669.%.% 63, Southwest Far 9,95,35 486,3 5.3% 5.3% (,) Southwest Near 38,566,794,568,33 4.% 4.% 9, (,) Sugar Land 7,945,559 858,96 4.8% 4.9% 3, (,) TOTAL 463,679,5,546, 4.9% 5.% 4,5,5,39, Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Sales Statistics QUARTER TO DATE HOUSTON MSA LAST QUARTER (Q4) TRAILING MONTHS LAST QUARTER (Q4) UNITED STATES TRAILING MONTHS Houston Industrial Submarkets CLICK MAP BELOW TO EXPAND N 49 9 9 Volume ($ Mil) $9. $47. $,568.7 $,47.6 $54,5.5 No. of Properties 4 3 3,3 5,6 NW NE Total SF,46,35 4,5,96 8,36,568 76,9,36 8,448,37 CBD 6 Average Price/SF N/A $5 $63 $68 $67 99 6 8 Average Cap Rate (Yield) N/A 8.% 7.9% 7.% 7.4% Source: Real Capital Analytics 59 SW S 45 SE

HOUSTON INDUSTRIAL MARKET WATCH SEPTEMBER 4 45 49 9 9 3 99 6 8 59 88 35 45 CENTRAL. Houston CBD SOUTHWEST. Southwest Near. Southwest Far 3. Sugar Land SOUTHEAST. Southeast Near. EastSoutheast Far SOUTH. South Near. South Far NORTHWEST. Northwest Near. Northwest Far NORTH. North Near. North Far NORTHEAST. Northeast Near. Northeast Far MARKET WATCH HOUSTON INDUSTRIAL MARKET SEPTEMBER 4

HOUSTON INDUSTRIAL MARKET WATCH SEPTEMBER 4 ABOUT TRANSWESTERN Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 8 offices in 4 countries as part of a strategic alliance with Parisbased BNP Paribas Real Estate. Transwestern was founded in Houston, Texas in 978, and Houston remains the corporate headquarters today. As one of the preeminent commercial real estate firms in Houston, we offer a comprehensive menu of real estate services designed to provide owners, tenants and investors with the optimum solutions for their unique requirements. Transwestern has seasoned veterans in every area of expertise with the integrity, experience and creativity to be the best partner for its clients. Transwestern s Houston office currently employs over 385 team members and has been an innovator in the Houston market for 36 years. SEATTLE MINNEAPOLIS BOSTON SAN FRANCISCO SILICON VALLEY WALNUT CREEK SALT LAKE CITY DENVER MILWAUKEE CHICAGO ST. LOUIS DETROIT BETHESDA WASHINGTON DC GREENWICH NEW YORK NEW JERSEY BALTIMORE NORTHERN VIRGINIA LOS ANGELES ORANGE COUNTY SAN DIEGO PHOENIX OKLAHOMA CITY FORT DALLAS WORTH ATLANTA TRANSWESTERN LOCATIONS AUSTIN SAN ANTONIO HOUSTON NEW ORLEANS ORLANDO FORT LAUDERDALE MIAMIDADE HOUSTON INDUSTRIAL TEAM Brian Gammill Managing Director 73.7.33 brian.gammill@transwestern.com Darryl Noon Senior Vice President 73.7.335 darryl.noon@transwestern.com Jude Filippone Vice President 73.7.338 jude.filippone@transwestern.com Vince Strake Associate 73.49.3784 vince.strake@transwestern.com Micheal Palmer Senior Vice President Tenant Advisory 73.3.67 micheal.palmer@tramswesterm.com Michael Snodgrass Managing Director Structured Finance 73.7.334 michael.snodgrass@transwestern.com Jan Sparks Managing Director Structured Finance 73.7.3398 jan.sparks@transwestern.com CONTACT Rachel Alexander Director of Market Research 73.7.3344 rachel.alexander@transwestern.com METHODOLOGY The information in this report is the result of a compilation of publicly available data from a variety of commercial and government sources. 9 West Loop South, Suite 3 Houston, Texas 777 T 73.7.77 F 73.7.685 www.transwestern.net/houston Copyright 4 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MarkET WATCh HOUSTON INDUSTRIAL JULY 4 Recent industrial Leases Northwest Far :: Lenox International 9, SF in DCT Northwest Crossroads Logistics Centre INDUSTRIAL LEASE STATISTICS Overall Vacancy Rates Asking Rental Rates (NNN) North Far :: Bunzl 34,3 SF in Northpark Central 6.% 5.5% $6.5 $6.5 Northeast Near :: RL Building Supply 36,35 SF at 865 North Loop East 5.% $6. Recent industrial Sales Northwest Near :: Alliance Tire Americas 36,4 SF warehouse property Buyer: 97 West Wingfoot LLC Seller: SSJ Investments Ltd 4.5% 4.% 3.5% 3.% Q Q 3Q 4Q Q Q 3Q 4Q Q3 Q3 3Q3 4Q3 Q4 $5.75 $5.5 $5.5 $5. Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Market Indicators SUBMARKET TOTAL RBA (SF) VACANT (SF) RATE OVERALL RATE SF UNDER CONSTRUCTION Q4 NET ABSORPTION Central Business District 33,4,85,788,735 5.4% 5.4% (,) EastSoutheast Far 65,48,58 4,687,53 7.% 7.%,456 78, North Far 67,96,6 3,8,96 5.7% 5.7%,93,744 59, North Near,54,93,7,7 5.% 5.% 47,5 5, Northeast Far,78,879 7,36.4%.4% 4, Northeast Near 33,69,599 88,88.6% 3.%,56 (84,) Northwest Far 69,68,346,357,365 3.4% 3.5%,87,4 6, Northwest Near 4,56,474 3,698,774 3.6% 3.7% 499,93 65, South Far 38,85,99,84,79.8%.8% 46,3 58, South Near 4,669,68 788,5 5.4% 5.4% 8, Southeast Near 4,64,76 785,65.%.% 8, Southwest Far 3,84,353 566,875 4.3% 4.3% 6,5 59, Southwest Near 54,88,4,758,593 3.% 3.% 8,8 (57,) Sugar Land,645,48 886,39 3.9% 4.% 58, 7, TOTAL 579,3,56 4,9,74 4.% 4.% 5,636,439,5, Source: Transwestern analysis of Costar data Houston industrial buildings 5, SF and greater, excluding government owned buildings. Industrial Sales Statistics Quarter to Date Houston MSA Last Quarter (Q4) Trailing Months Last Quarter (Q4) United States Trailing Months Houston Industrial Submarkets Click Map below to Expand N 49 9 9 Volume ($ Mil) $45. $35. $,563.8 $,645.8 $5,686.8 No. of Properties 9 7,89 5,35 NW NE Total SF,88,465 3,69,438 8,68,9 76,579,643 788,996,8 CBD 6 Average Price/SF N/A $87 $67 $67 66 99 6 8 Average Cap Rate (Yield) N/A N/A N/A 7.4% 7.5% SW SE Source: Real Capital Analytics 59 S 45