New construction, tenant demand keep rates at high levels. Employment challenges meet creative solutions, new political landscape. Leasing velocity remains true to historic size segments in 2016.

1. Industrial Outlook
Louisville | Q4 2016

2. Modern bulk asking rates by submarket
Source: JLL Research
Louisville industrial employment
Source: JLL Research, Bureau of Labor Statistics
2016 modern bulk leasing velocity
Source: JLL Research
-25.0
-15.0
-5.0
5.0
15.0
2011 2012 2013 2014 2015 2016
Trade,Transportation & Utilities
Manufacturing
Other Services
Mining, Logging & Construction
$3.00
$3.50
$4.00
2012 2013 2014 2015 2016
Bullitt County Airport Southern Indiana
New construction, tenant demand keep rates at high levels
Louisville’s industrial market finished 2016 with its tenth consecutive year of
positive absorption and over 6.0 million square feet of construction deliveries. As
land and construction costs have risen with tenant demand, developers have
pressed rental rates to historic highs. Leasing activity remained strong
throughout 2016 with over 3.6 million square feet of positive net absorption,
providing further support for rate increases. This sustained leasing activity and
strong tenant demand has guided developers to add more speculative product to
the pipeline, even as recently delivered product remains available. Expect rental
rates to level off as the rest of the pipeline delivers in the coming eight months.
Employment challenges meet creative solutions, new political landscape
Louisville’s industrial employment remains in a growth phase due to its continued
success in attracting logistics and e-commerce providers, which has also created
a tight labor market. In addition, Louisville’s “Big Three” (Ford, UPS, and
GE/Haier) have faced increased pressure from labor unions. These challenges
are being addressed by warehouse managers working together to stagger shifts
during peak holiday season hours, as well as tapping into local High Schools for
the seasonal employment pool. November’s election brought historic change as
the State House, State Senate and Governor’s seat are all under Republican
control. The state GOP has singled out right-to-work as a top agenda item, which
will have a major impact on Louisville’s industrial labor market.
Leasing velocity remains true to historic size segments in 2016
Three giant leases were signed in 2016 while the majority of leasing activity was
driven by deals within the 100,000 to 325,000-square-foot size range. Deals
falling within this size segment were signed across all submarkets, displaying the
strength of tenant demand. Meanwhile, the three deals signed for more than
600,000 square feet took place in the Airport and Bullitt County submarkets.
Construction activity has responded to this trend with the majority of projects in
the pipeline able to accommodate single or multiple tenants within the 100,000 to
300,000-square-foot range. Meanwhile, the three projects under construction
greater than 500,000 square feet are located in the Bullitt County and Southern
Indiana submarkets, shifting from the Airport submarket in 2016.
Market achieves positive absorption for 10th year
Industrial Insight
Louisville | Q4 2016
$3.68
Average NNN asking rent
3,772,033
Total under construction (s.f.)
1,805,050
Quarterly completions (s.f.)
3,843,783
YTD net absorption (s.f.)
8.7%
Total vacancy
5,896,471
YTD Completions (s.f.)
826,670
Quarterly net absorption (s.f.)
57,619,612
Market size(s.f.)
JLL | Louisville | Industrial Outlook | Q4 2016
0.0
0.5
1.0
1.5
2.0
2.5
0
5
10
15
50,000 to
99,999
100,000 to
249,999
250,000 to
349,999
350,000+
(m.s.f.)(# of leases) # Leases SF

3. Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total Vacancy
(%)
Average
total asking
rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Airport 20,169,841 861,858 4.3% 4.7% $3.35 1,372,470 1,422,585
Bullitt County 12,261,199 1,202,948 9.8% 10.1% $3.83 1,057,042 721,050
East 5,028,451 563,369 11.2% 0.0% $5.50 563,369 0
Riverport 11,957,666 -277,892 -2.3% 9.8% $3.29 362,500 370,798
Southern Indiana 8,202,455 1,493,500 18.2% 20.3% $3.92 2,541,090 1,257,600
Louisville Totals 57,619,612 3,843,783 6.7% 8.7% $3.68 5,896,471 3,772,033
This report analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24'
Modern Bulk Statistics
Louisville | Q4 2016
7.7%
15.1% 15.6%
12.2%
9.2%
8.3%
7.2%
6.6%
5.7% 8.7%
2.0%
5.0%
8.0%
11.0%
14.0%
17.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total vacancy rate (%)
1,005,248
2,117,585
1,014,608
1,750,850
2,234,648
1,934,181 2,059,001
2,742,889
3,029,702
3,843,783
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total net absorption (s.f.)
JLL | Louisville | Industrial Outlook | Q4 2016

4. This report analyzes all industrial developments under construction & new deliveries > 100,000 s.f.
Total leased at delivery (%) 57.2%
Total speculative at delivery (s.f.) 3,457,002
Total BTS at delivery (s.f.) 2,076,969
Total Owner-User at delivery (s.f.) 362,500
Total # of properties delivered 18
Asking rental rate (low - high) $3.85 - $4.25
Top 5 projects delivered to date
Building RBA (s.f.) Delivery date
Leased at
delivery (%)
Airport Commerce Center I 622,426 Q1 2016 74%
LogistiCenter at 480 546,000 Q4 2016 0%
100 Patrol Road 500,000 Q1 2016 35%
Pinchal River Ridge 458,640 Q3 2016 0%
Opus River Ridge 426,450 Q4 2016 0%
Total pre-leased (%) 17.1%
Total speculative under construction (s.f.) 3,772,033
Total BTS under construction (s.f.) -
Total Owner-user under construction (s.f.) -
Total # of properties UC 7
Asking rental rate (low - high) $3.69 - $3.95
Top 5 projects currently under construction
Building RBA (s.f.) Delivery date
Pre-leased
(%)
Velocity 65 Bldg 1 721,050 Q3 2017 0%
Crossdock River Ridge 664,800 Q1 2017 0%
Airport Commerce Center II 645,840 Q1 2017 100%
Van Trust River Ridge 592,800 Q1 2017 0%
New Cut Center Bldg 1 452,745 Q2 2017 0%Speculative
Speculative
Owner Construction type
Speculative
Main Street Realty
Van Trust
Molto
Browning Speculative
Crossdock Development Speculative
Airport
Southern Indiana
Airport
Bullitt County
Southern Indiana
Historical deliveries (s.f.)
Construction typeOwnerSubmarket
Southern Indiana
Southern Indiana
Southern Indiana
Bullitt County
Airport
Opus
Pinchal & Co.
Capstone Realty
Dermody Properties
Molto
Speculative
Speculative
New deliveries
Completions in-depth
5,896,471
2016 Deliveries (s.f.)
Speculative
Speculative
Speculative
Submarket
Under construction
3,772,033
Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2011 2012 2013 2014 2015 YTD 2016
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2017
Speculative
Industrial Development Report
Louisville | Q4 2016
JLL | Louisville | Industrial Outlook | Q4 2016

5. This report analyzes all industrial sales > 100,000 s.f.
$215,602,385
10
*$83
6.15-7%
100.0%
0.0%
6-6.5% 0 - -
- 10 $210,202,385
Top sales transactions YTD
Size (s.f.) $ p.s.f. Sale date
303,369 $138 Apr-16
622,426 $59 Mar-16
611,000 $53 Jun-16
418,000 $62 Mar-16
470,000 $55 Jun-16
270,000 $55 Jun-16
221,000 $55 Jun-16
137,500 $82 Jun-16
212,500 $46 Apr-16
126,165 $43 Sep-16
Versus/Molto JV
ARES
Prologis
Radial Inc. (Formerly eBay)
$37,000,000
$32,200,000
$25,750,000
$25,605,600
6900 Riverport Dr Another Room Self Storage DCT $5,400,000
2311 South Park Rd Monmouth Real Estate Gray Construction $11,304,000
9001 Cane Run Rd Industrial Property Trust Brennan Investment Group $9,700,000
Radial Inc. (Formerly eBay) $14,709,600
7700 Trade Port Dr Industrial Property Trust Radial Inc. (Formerly eBay) $12,040,080
9101 Cane Run Rd Industrial Property Trust
7111 Trade Port Dr Stoltz Real Estate Partners
7601 Trade Port Dr Industrial Property Trust
2501 Export Dr Patillo Industrial
649 Omega Parkway Industrial Property Trust
12900 Plantside Dr Columbia Property Investors Setzer Properties $41,893,105
Building address Buyer company Seller company Sales price $
Sales volume $ by submarket
Warehouse/Dist. sales volume
as % of total YTD
Flex/R&D sales volume as %
of total YTD
Cap rate range
Core Class A Ind.
Average Class A price p.s.f.
YTD* (skewed by FedEx sale)
At a glance
Total dollar volume YTD
Number of transactions YTD
Average Class A cap rate YTD
Sales activity by building type
Transactions details
Number of partial interest
transactions
Top sellers (s.f.)Top buyers (s.f.)
Number of domestic
buyers
Foreign capital $
Average partial interest
acquired
Number of foreign
buyers
Domestic Capital $
3,391,960 s.f.
$215,602,385
0 s.f.
500,000 s.f.
1,000,000 s.f.
1,500,000 s.f.
2,000,000 s.f.
2,500,000 s.f.
3,000,000 s.f.
3,500,000 s.f.
4,000,000 s.f.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Warehouse / Distribution
Sum of Price ($) Sum of RBA (SF)
53%
18%
12%
9%
4%
4%
Industrial Property Trust Patillo Industrial
Stoltz Real Estate Partners Columbia Property Investors
Monmouth Real Estate Another Room Self Storage
28%
18%
18%
12%
9%
6%
4%
4%
Radial Inc. (Formerly eBay) Versus/Molto JV
ARES Prologis
Setzer Properties Brennan Investment Group
Gray Construction DCT Industrial
$93,205,280
$48,304,000
$41,893,105
$32,200,000
Riverport
Airport
East
Bullitt County
Industrial Sales Activity
Louisville | Q4 2016
JLL | Louisville | Industrial Outlook | Q4 2016
53%
18%
12%
9%
4% 4%
Industrial Property Trust Patillo Industrial
Stoltz Real Estate Partners Columbia Property Investors
Monmouth Real Estate Another Room Self Storage
28%
18%
18%
12%
9%
6%
4% 4%
Radial Inc. (Formerly eBay) Versus/Molto JV
ARES Prologis
Setzer Properties Brennan Investment Group
Gray Construction DCT Industrial

6. Industry employment stratification: Louisville
Industrial Employment Update
Louisville | Q4 2016
4.9%U.S. unemployment
1.7%U.S. 12-month job growth
4.6%Louisville unemployment
2.7%Louisville 12-month job growth
5.0%Kentucky unemployment
1.2%Kentucky 12-month job growth
Employment vs. unemployment rate: Louisville
Job growth (12-month change): United States vs. Louisville
Job growth/loss by sector (12-month change): Louisville
Industrial employment trends (12-month change, 000s): Louisville
0%
3%
6%
9%
12%
15%
480,000
540,000
600,000
660,000
2006 2008 2010 2012 2014 2016
Nonfarm employment
Unemployment
Trade, Transportation
& Utilities
145,600 22%
Educational &
Health Services
92,500 14%
Professional &
Business Services
88,200 13%
Manufacturing
79,100 12%Government 76,000
12%
Leisure & Hospitality
72,200 11%
Financial Activities
47,800 7%
Mining, Logging &
Construction
29,000 4%
Other Services
25,300 4%
Information
9,100 1%
-25.0
-15.0
-5.0
5.0
15.0
2010 2011 2012 2013 2014 2015 2016
Trade,Transportation & Utilities
Manufacturing
Other Services
Mining, Logging & Construction
-2,100
-200
-100
0
1,500
1,800
1,900
3,300
4,300
6,900
-4,000 -2,000 0 2,000 4,000 6,000 8,000
Government
Mining, Logging & Construction
Other Services
Information
Leisure & Hospitality
Financial Activities
Manufacturing
Professional & Business Services
Trade, Transportation & Utilities
Educational & Health Services
-4.0%
-2.0%
0.0%
2.0%
4.0%
2010 2011 2012 2013 2014 2015 2016
Louisville United States
JLL | Louisville | Industrial Outlook | Q4 2016

7. Industrial Submarket Map
Notable construction projects
JLL | Louisville | Industrial Outlook | Q4 2016
Gateway 600
Signed tenant(s): none
Square Feet: 592,800
Landlord: VanTrust
Estimated completion:
Q1 2017
Air Commerce Center II
Signed tenant(s): Confidential
Square Feet: 645,840
Landlord: Molto Properties
Estimated completion:
Q1 2017
Logisticenter at 480
Signed tenant(s): none
Square Feet: 546,000
Landlord: Dermody Properties
Completed:
Q4 2016
Crossdock River Ridge
Signed tenant(s): none
Square Feet: 664,800
Landlord: Crossdock Development
Estimated completion:
Q1 2017
New Cut Center Bldg 1
Signed tenant(s): none
Square Feet: 452,745
Landlord: Main Street Realty
Estimated completion:
Q2 2017
Lewis and Clark Bridge
Completed:
Q4 2016

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