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7Colliers International

                                                                 PURCHASING MANAGER INDEX

                                                                 Source: Institute of Supply Management (ISM)

                                                                 64

                                                                 62

                                                                 60

                                                                 58

                                                                 56

                                                                 54              Apr 2017  Jul 2017  Oct 2017  Jan 2018

                                                                 52
                                                                       Jan 2017

                                                                 GRAND RAPIDS INDUSTRIAL OCCUPANCY RATE

                                                                 Source: Colliers International | West Michigan Research Department

  5300 Broadmoor Avenue SE                                       96%
                                                                 95%
paying jobs. In 2018, we expect to see some traction             94%
on this site as conversations with companies increase            93%
in intensity, and both the City of Wyoming and Grand             92%
Rapids’ local economic development firm, The Right                91%
Place, continue to scout and create incentive packages           90%
that make a deal of that magnitude worthwhile.                   89%
                                                                 88%
Other themes that will shape 2018:
> The gap between in-place rents and market rents                87%

   continues to grow. Companies that were able to lock in             2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
   rates a decade ago, some with renewal options, are                                                                                                                     Forcasted
   well-positioned relative to those looking for new leases
   right now. Rental rates have grown by more than 25            > The Michael A. Dunlap & Associates Furniture Index
   percent since the beginning of 2016 alone.                       continues to point to modest growth. This has been a
                                                                    staple in our market for a long time, and we anticipate
> With talent attraction at the forefront across all                this will continue into the near future.
   industries, we expect to see manufacturers become
   willing to pay a premium for space. Despite the trend         > Fulfillment centers to satisfy the “last mile” of e-commerce
   mentioned above, a slight increase in real estate                distribution operations will increase in prevalence.
   costs is a small price to pay in order to have the best
   talent available in a space that is suited well for efficient  > Investment in industrial space has been the favored
   operations.                                                      sector for a long time. Opportunities continue to be
                                                                    scarce, as many buildings are owned by the operator.
                                                                    As the market continues to increase in value, we can
                                                                    expect not only more active buyers, but more willing
                                                                    sellers. While capitalization rates are being compressed
                                                                    across the board and investment yields are being cut
                                                                    thin, Grand Rapids offers some opportunities if you can
                                                                    find them.
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