2013

Industrial

Industrial Mid-Year Market Overview Market Overview Northern & Central Northern & Central New Jersey

New Jersey

Industrial Market Overview

Table of Contents

1. Overview 2. Leasing Activity 3. Sales Activity 4. Construction Activity 5. Meadowlands 6. Route 80 Corridor 7. Eastern Morris 8. Ports 9. Exit 10/12 10. Exit 8A 11. Exit 7A 12. Our Industrial Team

Northern & Central New Jersey

Industrial Market Overview

Overview

Northern & Central New Jersey

The Northern and Central New Jersey Industrial market consists of 12 counties with 6,975 properties totaling 626,325,798 sf, of which 49,567,346 sf is currently available for lease. Historical Vacancy Rates

Essex and Somerset Counties boast the lowest vacancy rates in the state, currently 5.2% and 5.7% respectively while Morris, Bergen and Middlesex counties accounted for 74% of all leasing activity during the first half of 2013. The majority of tenants were attracted to the Exit 8A and Exit 10/12 submarkets, the Meadowlands and the Port Region. With a 92% occupancy rate, the Exit 8A Submarket boasts the lowest vacancy rate in Northern and Central New Jersey, currently 7.3%, for big box industrial space and demands one of the lowest asking rental rates, currently, $5.20 psf. The Meadowlands Submarket demands the highest rental rate due to its proximity to New York City, currently $6.02 psf.

9.2% 9.0%

9.0%

9.1% 8.9%

8.9%

9.0% 8.8%

8.8%

8.5%

8.6% 8.4%

8.4%

8.5% 8.4%

8.2%

8.0%

8.1% 8.1%

8.0%

7.9%

7.8% 7.6% 7.4%

NJ Overall COUNTIES Middlesex Bergen Hudson Essex Union Passaic Morris Mercer Somerset Hunterdon Warren Sussex Orange, NY Rockland, NY SUBMARKETS Port Exit 10/12 Meadowlands Eastern Morris Route 80 Corridor Exit 8A Exit 7A

Total Vacant Total Vacant Available SF Avail %

Total Net Absorption

2Q 2013

1Q 2013

There are currently over 150 tenants in the NJ market seeking approximately 38.2 million sf of industrial space >50,000 sf

NORTHERN & CENTRAL NEW JERSEY MARKET STATISTICS 2Q 2013 Total SF

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

7.2% 1Q 2010

During the first 6 months of 2013, the Industrial market showed signs of improvement demonstrated by an increase in leasing activity for big box users and a steadily decreasing vacancy rate since 2010. Vacancy rates registered 7.9% during the second quarter of 2013, a 0.5% drop since year-end 2012 and year–to-date net absorption registered a positive 650,996 sf, indicating that the Northern New Jersey Industrial market will continue to perform well in 2013. The overall average asking rental rate, currently $5.15 psf NNN, remained stable during the first half of 2013; while flex rental rates, currently $11.75 psf increased by $0.54 and warehouse rates stood at $5.10 psf.

Leasing Activity

SF Under Const

Total Average Rate (NNN)

626,325,798

49,567,346

7.9%

650,996

12,315,343

2,109,808

$5.15

172,730,438 86,036,373 83,064,242 65,159,846 60,091,290 49,156,152 39,155,321 29,267,324 27,311,688 6,196,365 6,122,373 2,034,386 23,640,907 12,872,054

12,172,387 6,620,688 6,838,001 3,399,143 5,178,712 3,367,855 3,587,641 3,791,824 1,559,731 1,767,038 981,022 303,304 1,660,117 855,509

7.0% 7.7% 8.2% 5.2% 8.6% 6.9% 9.2% 13.0% 5.7% 28.5% 16.0% 14.9% 7.0% 6.6%

(156,018) (472,909) (226,468) 342,355 46,765 13,670 790,552 67,358 235,544 72,815 (51,843) (10,825) 225,936 4,539

1,711,459 2,414,189 599,332 549,746 580,125 249,963 5,092,463 763,630 279,486 22,000 14,400 37,750 202,970 127,239

571,000 0 878,564 352,000 277,244 31,000 0 0 0 0 0 500,000 0

$4.66 $6.54 $5.82 $5.22 $4.89 $5.00 $5.54 $3.67 $4.52 $3.56 $3.93 $4.88 $4.33 $6.77

119,596,096 80,465,707 75,752,929 17,979,398 14,194,622 56,838,925 11,658,879

9,602,037 4,453,575 5,540,807 2,015,678 1,284,489 4,150,000 1,891,153

8.0% 5.5% 7.3% 11.2% 9.0% 7.2% 16.2%

(314,366) 192,784 (66,736) 153,186 90,404 66,368 105,325

2,019,005 2,235,502 2,419,412 336,380 185,201 2,346,239 177,677

1,507,808 571,000 0 0 31,000 0 0

$5.37 $5.08 $6.02 $5.91 $4.72 $5.20 $4.54

Source: Costar 2013 - All statistics are based on industrial facilities 20,000+ sf Counties in Northern & Central NJ include: Bergen, Essex, Hudson, Hunterdon, Passaic, Mercer, Middlesex, Morris, Somerset, Sussex, Union & Warren. NAI Hanson also covers Orange and Rockland County NY

Industrial Market Overview Northern & Central New Jersey

Leasing Activity

Northern & Central New Jersey Historical Leasing Activity

As of June 2013, leasing activity totaled 12,315,343 sf, which included two large blocks of pre-leased space absorbed by Imperial Bag & Paper Co. and Peapod leasing 395,000 sf and 345,000 sf respectively at the Prologis Ports site in Jersey City, which was approved for a $29.1 million Grow New Jersey tax credit by the New Jersey Economic Development Authority. Both tenants were

45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0

35,150,974

36,073,478

12,315,343

2010

driven by a $34.6 million Urban Transit Hub incentive they were

39,478,165

2011

2012

YTD 2013

awarded in May to open the facility. These two companies are planning to make significant financial investments and create jobs In New Jersey. Peapod will make a capital investment of more than $94 million, create 380 new jobs and 242 construction jobs and retain 90 jobs in the state, and Imperial Bag will make

100 Middlesex Avenue

a capital investment of more than $57 million, create nearly 390 construction jobs and retain 364 jobs in the State. Other significant large blocks of industrial space were absorbed by William Sonoma who leased 750,000 sf at 101 Middlesex Center Boulevard in South Brunswick, Amazon.com who took 565,405 sf 481 Doremus Avenue

at 301 Blair Road in Avenel and Tory Burch who leased 526,400 sf at 115 Interstate Boulevard in South Brunswick. In addition, Salson Logistics leased 260,000 sf at 481 Doremus Ave in Newark, Wicked Fashions took on 204,369 sf at 215 Middlesex Avenue in Monroe, Ashland, Inc. leased 198,440 sf at the New Jersey Center of Excellence in Bridgewater, RPM took 176,170 sf at 1500 Rahway Avenue in Avenel, 4 Wall Entertainment leased 106,841 sf at 35 State Street in Moonachie and IDEA Nuova leased 120,000 sf at 4 Corporate Place South in Piscataway.

Other

noteworthy

transactions

included

Moroccan Oil who leased 105,515 sf at 1265 Cranbury S. River Road in Cranbury and Global Logistics & Distribution LLC leasing 100,000 sf at 100 Middlesex Avenue in Carteret. At 55 Webro Road in Clifton, PSE&G leased 93,250 sf and Duro Bag Manufacturing signed a 70,000 sf lease at 1000 Jefferson Road in Elizabeth. Spectra Labs also expanded by 84,000 sf at Rockleigh Corporate Center in Rockleigh, NJ.

Industrial Market Overview

Lease Transactions

Northern & Central New Jersey

TENANT Volkswagon William Sonoma Amazon Tory Burch Dot Com Distribution Kuehne and Nagel Ceva Logistics Kenco Howard Berger Salon Logistics Cooper Lighting Wicked Fashions Ashland Chemical, Inc.

ADDRESS 47 Station Road 101 Middlesex Center Boulevard 301 Blair Road 115 Interstate Boulevard 200 Liberty Way 324 Half Acre Road 26 Englehard Drive 1 Costco Way 324 Half Acre Road 481 Doremus Avenue 1 Matrix Drive 215 Middlesex Avenue 1041 Route 202/206

CITY Cranbury South Brunswick Avenel South Brunswick Cranbury Cranbury Monroe Monroe Cranbury Newark Monroe Monroe Bridgewater

LMD Integrated Logistics Services

1 Nixon Lane

Edison

192,000

RPM

1500 Rahway Avenue

Avenel

176,170

DeLonghi America

141 West Manor Road

Robbinsville

167,152

Uncommon Carrier Syncreon

700 Bartley Chester Road 45 Stults Road

Flanders South Brunswick

157,822 140,884

US Display

100 Electric Avenue

Secaucus

125,366

IDEA Nuove

4 Corporate Place South

Piscataway

120,000

Melissa & Doug LLC

8 Santa Fe Way

Cranbury

108,105

BMW 4 Wall Entertainment

490 Huyler Street 35 State Street

South Hackensack Moonachie

108,000 106,841

Moroccan Oil

1265 S. River Road

Cranbury

105,515

Global Logistics & Distribution

100 Middlesex Avenue

Carteret

100,000

Mobis Parts America

18 Thatcher Road

South Bound Brook

98,265

Premier Motor Lines

2 Colony Road

Jersey City

97,453

Superior Packaging Alpi

2 Bailey Farm Road 9 Brick Plant Road

Harriman, NY South River

94,211 94,000

PSE&G

55 Webro Road

Clifton

93,250

Spectra Labs

Rockleigh Corporate Center

Rockleigh

84,000

Northern Building Products

599 Gotham Parkway

Carlstadt

81,500

Quaker Sales And Distribution Duro Bag Manufacturing Co. Open Road Audi First Transit McGinley Transportation Graphcorr Global Express Logistics

20-40 Harry Shupe Boulevard 1000 Jefferson Avenue 2600 71st Street 100B Main Avenue 1000 Jefferson Avenue 4 Corn Road 3 Slater Drive

Wharton Elizabeth North Bergen Elmwood Park Elizabeth Dayton Elizabeth

77,000 70,000 61,000 57,760 52,000 50,630 50,000

AEX Group

2401 E. Linden Avenue

Linden

50,000

Deals in red were represented by NAI James E. Hanson

SF 928,000 750,000 565,405 526,400 443,421 384,170 324,540 305,000 296,577 260,000 259,369 204,369 198,440

Industrial Market Overview Northern & Central New Jersey

Sales Activity During the first half of 2013, a total of 82 properties traded totaling 14,188,689 sf with a total sales volume of $829,082,534. The average price per square foot equated to $58.43. Cap rates averaged 6.87%, compared to the 12 months of last year when they averaged 6.21%. One of the largest transactions that have occurred within the last year in the Northern New Jersey market is the sale of 1 Barnes & Noble Way in Monroe Township. This 1,145,200 sf industrial building sold for $83,000,000, or $72.48 psf. The entire 684acre International Trade Center industrial portfolio was sold for $59,000,000. The portfolio contains over 1.2 million square feet of industrial and flex space and three development sites. 413 acres of the site have been rezoned for development.

200 Riser Road Average Price PSF vs. Cap Rate 12.0%

$90.00 $80.00

10.0%

$70.00

8.0%

$60.00

$50.00 $30.00

4.0%

261 RIver Road

$20.00

2.0%

$10.00 $0.00 2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

0.0% 2Q 2010

In May, 200 Riser Road in Little Ferry was purchased by Sitex Group for $32,250,000 or $112.52 psf from Mack-Cali Realty Corporation and The Hampshire Companies acquired 200 Middlesex Avenue in Carteret for $17,000,000 or $ 42.50 psf. Additionally, Romark Management purchased 40-44 Talmadge Road in Edison for $10,000,000 or $41.15 psf and Industrial Income Trust purchased 261 River Road in Clifton from The Morris Companies for $26,811,000 or $116.09 psf.

6.0%

$40.00

1Q 2010

Within the Meadowlands submarket, TIAA-CREF purchased the Mohawk Distribution Center located at 698 Route 46 in Teterboro from RREEF America LLC for $81,000,000 or $131.28 psf.

Historical Sales Volume 3,000,000,000

2,729,344,334 2,335,622,838

2,500,000,000 2,000,000,000

1,613,557,112

1,500,000,000 829,082,534

1,000,000,000 500,000,000

Other significant sales include the acquisition of 2 Emerson Lane in Secaucus by Carlyle Investment Management. They purchased the 283,215 sf facility from Hartz Mountain Industries for $18,400,000 or $64.97 psf. Located in Cranbury, Gateway Business Center was purchased by James Campbell Company for $14,475,000 or $55.05 psf from Bailard. In addition, 742 Old Post Road located in Edison was acquired by Glendale Warehouse Company for $13,265,000 or $57.96 psf. Currently, Kushner Companies has 81 Prospect Street in Jersey City under contract for an undisclosed amount.

0 2010

2011

2012

YTD 2013

2 Emerson Lane

Industrial Market Overview

Sales Transactions BUYER Merck Sharp & Dohme Corporation Quad/Graphics, Inc. Mynt Properties, LLC Exeter Property Group CenterPoint Properties Advance Realty KTR Capital Partners LP Duke Realty Corporation Merck & Co Inc. TIAA-CREF GRM Information Management Services The Hampshire Companies 180 Baldwin Avenue, LLC Sitex Group Carlyle Investment Management, LLC EnviroFinance Group, LLC DVL Incorporated James Campbell Company LLC Trade Linker International Romark Management LLC Lifetime Fitness Industrial Income Trust, Inc. Glendale Warehouse Company Island SG LLC Valley Holdings LLC 60 Lockwood Assocs LLC Cole Corp Income Trust BMB Properties & Management LLC Lifetime Fitness Darlington Heritage Properties Rahway Steel Drum Company JD Commercial & Industrial Pro/2301 Atlantic Avenue LLC Bloomfield Belleville Assocs LLC Home Dynamics Fem International Terreno Realty Corporation 750 Realty LLC Siskind Group Filo Factory

Northern & Central New Jersey

ADDRESS 556 Morris Avenue 4371 County Line Road (19 Properties) 90 Dayton Ave (8 Properties) 450 Clark Drive ITC (11 Properties) 1 Barnes & Noble Way 1041 Route 202/206 (16 Properties) 301 Blair Road (2 Properties) 311-315 Half Acre Road (2 Properties) 1011 Morris Ave (16 Properties) 698 Route 46 50 Dey Street 200 Middlesex Avenue 180 Baldwin Avenue 200 Riser Road 2 Emerson Lane 400 Clermont Terrace 20 River Road (3 Properties) 2615 US Highway 130 570 South Avenue E. 40-44 Talmadge Road One Gannett Drive 261 River Road 742 Old Post Road 301 Island Road 321 Valley Road 17 Blanchard Street 299 Jefferson Road 461 Ridge Road 1 BMW Plaza 75 Mill Street 26 Brick Yard Road

CITY Summit Various Passaic Mount Olive Monroe Township Bridgewater Avenel Cranbury Union Teterboro Jersey City Carteret Jersey City Little Ferry Secaucus Union Bogota Cranbury Cranford Edison Harrison,NY Clifton Edison Mahwah Hillsborough Newark Parsippany Monmouth Junction Montvale Newton Cranbury

2301 Atlantic Avenue

Manasquan

117,648

225 Belleville Avenue 433 Murray Hill Parkway 81 International Drive 1 Dodge Drive 750 Frelinghuysen Avenue 100 Springfield Avenue 10 Fairway Court

Bloomfield East Rutherford Mount Olive West Caldwell Newark Piscataway Northvale

110,000 100,000 100,000 93,000 90,186 86,000 85,411

Deals in red were represented by NAI James E. Hanson

SF 2,000,000 1,667,804 1,639,996 1,200,000 1,145,200 1,092,670 957,055 949,580 943,418 616,992 409,648 400,000 330,000 286,628 283,215 275,000 263,000 262,939 259,670 243,000 232,000 230,953 228,850 212,940 200,000 200,000 150,500 146,750 130,000 129,000 119,014

Industrial Market Overview

Construction Activity

Northern & Central New Jersey

During 2013, three new industrial facilities were built totaling nearly 1.2 million square feet. In South Brunswick along Exit 8A, Middlesex Center II, a 750,000 warehouse facility was delivered and will be occupied by William Sonoma. In June, Mountain Development Corp. built a 167,752 sf warehouse facility at 2 Peekay Drive in Clifton and The Hampshire Companies built a 232,000 sf warehouse facility at 200 Milik Street in Carteret along the Exit 10 Corridor. Currently there are five properties under construction, totaling 2,109,808 sf. The largest project is the Prologis Ports site located in Jersey City totaling 878,564 sf. This property is scheduled for a January 2014 delivery and is 85% pre-leased. Other significant projects include a 337,000 sf facility that will be constructed by November 2013 at 60 Lister Avenue in Newark and Clarion Partners is building a 277,244 sf facility at Elizabeth Logistics Center on Dowd Avenue in Carteret. In Avenel, 275 Omar Avenue, a 391,650 sf facility, was renovated after being purchased by KTR Capital in 2013 and is 100% available for occupancy. Due to high demand for big box users, an increase in construction along the Exit 7A Corridor is anticipated.

Elizabeth Elizabeth Logistics Center 281,246 sf

32’0 Ceiling Heights/45 Loading Docks

Newark 60 Lister Avenue 337,000 sf

36’0 Ceiling Heights/40 Loading Docks

South Brunswick Middlesex Center II 750,000 sf

36’0 Ceiling Heights/150 Loading Docks

Carteret 200 Milik Street 232,000 sf

36’0 Ceiling Heights/40 Loading Docks

Jersey City Prologis Ports 878,564 sf

36’0 Ceiling Heights/150 Loading Docks

Avenel 275 Omar Avenue 391,650 sf

36’0 -40’0 Ceiling Heights/78 Loading Docks

Industrial Market Overview Northern New Jersey

Meadowlands

10.3%

12.0%

11.0% 10.1%

9.8%

10.0% 8.9%

8.6%

8.8%

10.0%

8.8% 7.7%

7.3%

8.0% 6.0% 4.0% 2.0%

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

0.0% 2Q 2011

‚‚

10.0%

1Q 2011

‚‚

9.3%

4Q 2010

‚‚

1Q 2010

9.3%

Historical Vacancy Rates vs. Asking Rental Rates

3Q 2010

The Meadowlands submarket consists of 864 industrial facilities totaling 75,752,929 sf and ranks third in size in the $7.00 $6.00 State. $5.00 Vacancy rates declined 1.3% from 2Q 2012 to 2Q 2013, $4.00 $3.00 dropping from 8.6% to 7.3%, currently. $2.00 During the first half of 2013, leasing activity totaled 2,419,412 $1.00 sf and represents 20% of all leases completed in Northern $0.00 New Jersey. This submarket demands the highest average asking rental rates due to its proximity to New York City, currently $6.02 psf NNN.

2Q 2010

‚‚

Tenants occupying space during the last two quarters include: Tenant Size Address 4 Wall Entertainment 106,841 sf 35 State Street, Moonachie Open Road Audi 61,000 sf 2600 71st Street, North Bergen Highroad Press 38,230 sf 220-240 Anderson Avenue, Moonachie Kessem Foods 33,000 sf 50 Amor Avenue, Carlstadt Creative Laminates 34,229 sf 179 Commerce Road, Carlstadt Bashion Rug 28,914 sf 65 Railroad Avenue, Ridgefield Distribution International 28,928 sf 343 Murray Hill Parkway, East Rutherford Jitanu Services 24,000 sf 485 Barell Avenue, Carlstadt Mega Yeeros 20,800 sf 165 Chubb Avenue, Lyndhurst Significant trades include: Address Size Price Buyer Seller 698 Route 46, Teterboro 616,992 sf $81,000,000 TIAA-CREF RREEF America LLC 200 Riser Road, Little Ferry 286,628 sf $32,250,000 Sitex Mack-Cali Corp. 2 Emerson Lane, Secaucus 283,215 sf $18,400,000 CoreSite Realty Grp Hartz Mountain 433 Murray Hill Pwy, E. Rutherford 100,000 sf $ 6,850,000 Home Dynamics Penn Bottle Co. 2001 42nd Street, North Bergen 80,000 sf $ 2,350,000 Dumbo Moving & Storage 2001 Realty Corp. 3091 Liberty Avenue, Secaucus 67,000 sf $ 2,600,000 GM Realty Westchester Lace and Textiles, Inc. 51 Moonachie Road, Moonachie 12,649 sf $ 1,799,500 Flightsafety Int'l inc. Zboyz, LLC.

Industrial Market Overview Central New Jersey

Route 80 Corridor ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Route 80 Corridor consists of 158 properties, 14,194,622 sf of industrial inventory and is the second smallest submarket in the Northern and Central New Jersey market. Vacancy rates decreased nearly 3% since 2Q 2012, currently 9.0% and will continue to decline throughout the year. This submarket boasts a 90.8% occupancy rate. Year-to-date leasing activity totaled 185,201 sf during the second quarter 2013 and net absorption registered a positive 90,404 sf. Average asking rental remained stable since year-end 2012, currently $4.72 psf NNN. No significant industrial properties are currently under construction, however, there are seven proposed industrial facilities totaling 458,127 sf in the pipeline for future construction. The most significant trade was the sale of the International Trade Center at 450 Clark Drive, (11 properties) in Mount Olive. The 1.2 million sf portfolio traded for $58,800,000 and was purchased by Exeter Property Group. The seller was JP Morgan Asset Management JV 850 Clark Drive LLC.

Large tenants occupying space during the last two quarters include: Tenant Quaker Sales Distribution Air Contract Transport Crofutt Smith Spectrum Holdings

Size Address 77,000 sf 20-40 Harry Shupe Boulevard, Wharton 29,433 sf 1578 Sussex Turnpike, Randolph 27,746 sf 106 Iron Mountain Road, Mine Hill 9,528 sf 158 W. Clinton Street, Dover

Historical Vacancy Rates vs. Asking Rental Rates $7.00

$6.00

13.6%

16.0% 13.0%

13.0%

12.3%

12.6%

$5.00

11.8% 10.2%

10.2%

14.0%

11.7%

10.6%

10.3%

9.8%

12.0% 9.5%

$4.00

9.0%

10.0% 8.0%

$3.00

6.0%

$2.00

4.0%

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

0.0% 2Q 2010

2.0%

$0.00 1Q 2010

$1.00

Industrial Market Overview Central New Jersey

Eastern Morris ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Eastern Morris Submarket consists of 236 properties and a total of 17,979,398 sf of industrial inventory. There is currently no new space under construction or proposed future projects within the small submarket due to its high vacancy rate and decrease in demand. Vacancy rates have remained relatively stable since the same period last year, currently, 11.2%. Year-to-date leasing activity registered a modest 336,380 sf during the third quarter 2013. Average asking rental rates decreased by $0.32 since 2Q 2012 when they were $6.23 psf NNN and currently registered $5.91 psf NNN. With no new construction planned and a continued economic recovery, vacancy rates are expected to decline further.

Large tenants occupying space during the last two quarters include: Tenant Corporate Essentials Admiral Filter Feinblatt Luxe Encore Catering

Size Address 22,241 sf 2 Cranbury Road, Parsippany 15,000 sf 18-26 Green Pond Road, Rockaway 9,388 sf 1 Mars Court, Montville 2,500 sf 22 DeForest Avenue, East Hanover

Significant trades include: Address Size 299 Jefferson Rd, Parsippany 150,500 sf 92 Green Pond Rd, Rockaway 74,206 sf 260 Walsh Drive, Parsippany 102,334 sf 58-60 S. Jefferson Rd, Whippany 56,765 sf

Price $32,400,000 $ 4,081,330 $ 4,000,000 $ 1,582,000

Buyer Cole Corp Income Trust Cibao Meat Products Junto Inv. Partners LLC Tulfra Realty

Historical Vacancy Rates vs. Asking Rental Rates $9.00

12.2%

$8.00 $7.00 $6.00

14.0%

12.9% 11.3%

11.4%

12.0%

11.8%

11.1%

11.2%

10.3% 9.2%

9.2%

8.7%

8.6%

12.0% 10.0%

8.7%

$5.00

8.0%

$4.00

6.0%

$3.00

4.0%

$2.00

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

0.0% 2Q 2010

2.0% 1Q 2010

$1.00 $0.00

Seller Grosvenor JV Vision Equities LLC GreenPond Road Assoc. Interpharma Tech. Inc. AeroFlex

Industrial Market Overview Northern New Jersey

Ports ‚‚

‚‚ ‚‚ ‚‚ ‚‚

The Port region consists of 1,284 properties and is the largest submarket in New Jersey with a total of 119,596,096 sf. There is currently 1.5 million sf of industrial space under construction. Vacancy rates slightly increased since year-end 2012, registering 8.0 during the second quarter 2013. Leasing activity totaled 2,019,005 sf, on track to surpass transactions completed in 2012. Average asking rental rates remained stable at $5.37 psf NNN.

Tenants occupying space during the last two quarters include: Tenant Premier Motor Lines Duro Bag Manufacturing AEX Group Global Express Logistics McGinley Transportation AZAP INL Distribution Go-Move, Inc.

Size Address 97,543 sf 2 Colony Road, Jersey City 70,000 sf 1000 Jefferson Avenue, Elizabeth 50,000 sf 2401 E. Linden Avenue, Linden 50,000 sf 3 Slater Drive, Elizabeth 52,000 sf 1000 Jefferson Avenue, Elizabeth 48,800 sf 798 Frelinghuysen Avenue, Newark 35,000 sf 1000 Jefferson Avenue, Elizabeth 22,145 sf 301 West Side Avenue, Jersey City

Significant trades include: Address Size Price 50 Dey Street, Jersey City 409,648 sf $19,700,000 180 Baldwin Ave, Jersey City 300,000 sf $ 4,500,000 17 Blanchard St. Newark 200,000 sf $ 3,014,000 1831 Burnet Ave, Union 84,000 sf $ 4,335,000 151 W 7th Street, Bayonne 47,700 sf $ 2,700,000 361 – 371 So. St, Newark 20,156 sf $ 4,400,000 25 Halladay St, Jersey City 18,000 sf $ 2,600,000

Buyer GRM Info. Mgmt Svc 180 Baldwin Ave LLC

Seller Forkosh Dev. Grp Argent Ventures JV Lehman Bros Holdings The Newark Group Burnet, LLC Ideal Window Mfg. Inc. Hampshire Cos. 25 Halladay St. LLC

60 Lockwood Assoc. Miller Industrial Prop. West 7th St. LLC South Street Realty PPG Industries

Historical Vacancy Rates vs. Asking Rental Rates

7.6%

7.6%

8.0%

7.3%

7.1%

2Q 2013

1Q 2013

2Q 2012

1Q 2012

7.0%

4Q 2011

3Q 2011

7.2%

2Q 2011

7.2%

1Q 2011

7.2%

4Q 2010

7.2%

3Q 2010

2Q 2010

7.1%

7.3%

4Q 2012

7.6%

3Q 2012

7.9%

1Q 2010

$5.60 $5.50 $5.40 $5.30 $5.20 $5.10 $5.00 $4.90 $4.80 $4.70

8.2% 8.0% 7.8% 7.6% 7.4% 7.2% 7.0% 6.8% 6.6% 6.4%

Industrial Market Overview Central New Jersey

Exit 10/12 ‚‚

The Exit 10/12 corridor consists of 791 properties totaling 80,465,707 sf and is the second largest industrial submarket in New Jersey.

‚‚

With only 4.5 million sf currently available, vacancy rates registered 5.5%, down 2.0% since year-end 2012.

‚‚

Year-to-date leasing activity totaled 2,235,502 sf, and is set to outpace 2012 totals.

‚‚

During the first half of 2013, net absorption registered a positive, 192,884 sf.

‚‚

Average asking rental rates rose from $4.30 NNN psf during 2Q 2012 to $5.08 NNN psf during 2Q 2013, a $0.78 psf increase.

Tenants occupying space during the last two quarters include: Tenant IDEA Nuova Global Logistics & Dist. Panza & Sons Brooklyn Bean HAA Holdings

Size Address 120,000 sf 4 Corporate Place, Piscataway 100,000 sf 100 Middlesex Avenue, Carteret 80,000 sf 141 Fieldcrest Avenue, Edison 37,500 sf 101 Kentile Road, South Plainfield 31,500 sf 160 E. Essex Avenue, Avenel

Significant trades include: Address 301 Blair Road, Avenel 200 Middlesex Ave, Carteret 742 Old Post Road, Edison 40-44 Talmadge Road, Edison

Size Price 957,055 sf $48,000,000 400,000 sf $17,000,000 228,850 sf $13,265,000 243,000 sf $10,000,000

Buyer KTR Capital Partners Hampshire Companies Glendale Warehouse Co. Romark Logistics

Historical Vacancy Rates vs. Asking Rental Rates $6.00

8.1%

8.5%

8.5%

9.0% 7.6%

$5.00

7.1%

$4.00

6.7% 5.4%

5.2%

6.8%

6.8%

8.0%

6.9%

7.0%

6.2%

5.6%

5.5%

6.0% 5.0%

$3.00

4.0% 3.0%

$2.00

2.0%

$1.00

1.0% 0.0% 2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

$0.00

Seller C&S Whsle Grocers AMB Cohen Asset Mgmt Sitex Realty

Industrial Market Overview Central New Jersey

Exit 8A

‚‚  The Exit 8A submarket consists of 259 properties totaling 56,838,925 sf ‚‚  With a 92% occupancy rate, this submarket boasts one of the lowest vacancy rates, currently 7.2%, down 1.2% during the same period last year. ‚‚  During the first half of 2013, leasing activity in the market registered 2,346,239 sf and net absorption remained positive for the fifth consecutive year, totaling 66,368 sf. ‚‚  Average asking rental rates increased $0.50 psf since 2012, now $5.20 psf NNN. ‚‚  Warehouse rental rates, currently $4.52 psf slightly increased from $3.81 psf from the second quarter in 2012 and manufacturing rental rates remained stable at $3.00 psf. ‚‚  In May of 2013, Middlesex Center II in South Brunswick was built, where William Sonoma will occupy the entire 750,000 sf warehouse building. ‚‚  There are currently no buildings under construction along Exit 8A, however, nearly 15.3 million square feet of industrial space is proposed for future construction. ‚‚  With no new construction underway and continued demand for space, this market is expected to continue absorbing the existing inventory at a healthy pace. Large tenants occupying space during the last two quarters include: Address William Sonoma Tory Burch Wicked Fashions Moroccan Oil Melissa & Doug Mobis (renewal)

Size Address 750,000 sf Middlesex Center II, South Brunswick 526,400 sf 115 Interstate Parkway, South Brunswick 204,369 sf 215 Middlesex Avenue, Monroe 105,515 sf 1265 S. River Road, Cranbury 108,105 sf 8 Santa Fe Way, Cranbury 98,265 sf 18 Thatcher Road, South Brunswick

Significant trades include: Address Size Price Buyer Seller 1 Barnes & Noble Way, Monroe Twp 1,145,200 sf $83,000,000 CenterPoint Prop. CBRE Global Investors 315 Half Acre Road, Cranbury (2 Prop) 949,580 sf $75,300,000 Duke Realty Corp. Deka Immobilien JV Rockefeller Group 2615 US Hwy 130, Cranbury 262,939 sf $14,475,000 James Campbell Co. Bailard Gateway LLC 322 Half Acre Road, Cranbury 160,447 sf $ 6,100,000 A&M Industrial Supply Blackrock Realty 461 Ridge Road, Cranbury 146,750 sf $ 4,842,750 BMB Properties Mgmt GE Capital 50 S. Middlesex Avenue, Monroe 146,529 sf $ 7,033,392 Matrix Development Sanchez Cano 26 Brick Yard Road, Cranbury 119,014 sf $ 4,900,000 Rahway Steel Drum Cranbury Prop. Holdings

Industrial Market Overview Central New Jersey

Exit 7A ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Exit 7A submarket consists of 68 properties totaling 11,658,879 sf. With less than 2 million square feet available, vacancy rates registered 16.2% during the second quarter of 2013, down 2.4% since the same period last year. Average asking rental rates along this Corridor increased $1.06 psf from 2Q 2012 to 2Q 2013, currently, $4.54 psf NNN. During the first half of 2013, leasing activity totaled 177,677 sf. The two largest lease transactions in this market occurred during 2012. Kenco leased 400,714 sf at 100 W. Manor Way in Robbinsville and at 141 W. Manor Way, also in Robbinsville, DeLonghi America leased 167,152 sf. Year-to-date net absorption registers a positive 105,325 sf. Currently, there are eight proposed facilities along this corridor totaling 2.4 million square feet with strong buildto-suit development activity at Exit 7A. Due to high demand for big box users, we anticipate an increase in construction activity along the Exit 7A Corridor.

Future market activity: ‚‚

In Robbinsville, Matrix sold a parcel within the Park to an affiliate of KTR Capital Partners for the development of a 1 million sf warehouse for Amazon which is on track to open in 2014 and will reportedly bring 600 full-time jobs and more than $22 million in tax revenue to the Township, school district and Mercer County.

‚‚

Matrix Development Group is putting up a distribution facility at its business park at Exit 7A for McKesson Corp., a pharmaceutical distributor. The new 350,000 sf facility has been approved for a future expansion to 450,000 sq. ft. The building is one of several new build-to-suit developments within Matrix Business Park.

Significant trades include: Size Price Buyer 8,800 sf $505,000 Northeast Comm. Group LLC 3,300 sf $295,000 THT Partners, LLC 9,760 sf $335,000 1561Hamilton Avenue LLC

Seller Robert Soden Duffy Companies LLC Fulton Bank

Historical Vacancy Rates vs. Asking Rental Rates 37.8%

37.8%

37.9% 34.5%

40.0% 35.0%

34.5% 29.6%

28.3%

30.0%

25.7% 25.8%

25.0% 17.5%

18.1% 18.6% 17.3%

16.2%

20.0% 15.0% 10.0% 5.0%

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

0.0% 2Q 2010

$5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00

1Q 2010

Address 242 Route 156, Hamilton 2101 E. State Street, Hamilton 1605 Hamilton Avenue, Hamilton

Rental Rates

Vacancy Rates

Industrial Market Overview

Our Industrial Team

William C. Hanson

Nicholas Herrick

Scott K. Perkins

Barry J. Cohorsky

Steven G. Leitner

Andrew Somple

Jeffrey W. DeMagistris

Kenneth D. Lundberg

Russell J. Verducci

Northern & Central New Jersey

Dominic M. Fittizzi

Steve Pastor

Thomas A. Vetter

Michael G. Walters

About NAI James E. Hanson • • • • • •

Nearly 60 years of experience in the New Jersey Industrial Market. Largest independently owned commercial real estate firm in the State. Through the affiliation with NAI Global, we are part of a managed network of 5,000 professionals and 350 offices in 55 counties throughout the world. Represented over 12 million sf of industrial space over the last five years. NAI James E. Hanson currently holds the most SIORs over any other Commercial Real Estate firm located in New Jersey. Two offices located in Parsippany and Hackensack with 38 real estate professionals.

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One of the largest industrial teams with a massive industrial presence in the State.

NJ Offices: Hackensack  201 488 5800 | Parsippany  973 463 1011 | naihanson.com