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CBRE <br />MARKETVI EW MINNEAPOLIS/ST. PAUL RETAIL <br />TOP SALES TRANSACTIONS <br />Retail investment sales remains a hot <br />trend in Q2 2015 as seen by the <br />trading of three Lifetime Fitness <br />establishments, as well as a 127,600 - <br />sq. -ft. shopping center. <br />Life Time Fitness underwent a costly <br />buyout to go private in Q2 2015 and <br />needed to free up some capital by <br />undergoing sale-leaseback deals for <br />29 of its 114 fitness centers. It sold <br />three of its centers throughout the <br />metro in St. Louis Park, Eden Prairie, <br />and Lakeville. The Lakeville location <br />was the most profitable of the three <br />for Life Time at $192.11 per -sq. -ft. <br />The signed leases ran anywhere from <br />20 to 24 years. <br />Phillips Edison expanded their <br />footprint in the Minneapolis/St. Paul <br />market with the acquisition of <br />Waterford Park Plaza. This is on the <br />heels of their first acquisition in our <br />market in Q4 2014 ($25 million for <br />Crossroads of Shakopee). The <br />127,600 -sq. -ft. development was 96% <br />leased at the time of sale and sold for <br />roughly $153 per -sq. -ft. <br />Figure 5: Unemployment <br />10 <br />8 <br />6 <br />4 <br />2 <br />0 <br />i <br />Figure 3: Direct Vacancy vs. Availability Rate <br />(%) <br />12 <br />10 <br />8 <br />6 <br />4 <br />2 <br />0 <br />• Availability Rate Vacancy Rate <br />2009 2010 2011 2012 2013 2014 2015 <br />Figure 4: Historical Net Absorption <br />1.5 <br />1.0 <br />u_ <br />0.5 <br />0.0 <br />(0.5) <br />Source: CBRE Research, Q2 2015. <br />• Net Absorption <br />■1 1 <br />1 <br />2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 <br />(YTD) <br />Source: CBRE Research, Q2 2015. <br />United States • 5.3% <br />Minnesota • 3.6% <br />Twin Cities 3.4% <br />1 <br />I h <br />2009 2010 2011 2012 2013 2014 15 -May <br />Source: BLS and MN DEED, May 2015 <br />Non -seasonally adjusted figures <br />UNEMPLOYMENT DOWN FOR Q2 2015 <br />Non -seasonally -adjusted unemployment <br />numbers for Q2 2015 are reported at 3.4% for <br />the Twin Cities metro. The State of Minnesota <br />Department of Employment and Economic <br />Development (DEED), the rate of participation <br />in the labor force is up for the fifth consecutive <br />month to 70.8%. Nationally, Minnesota is still <br />well below the average unemployment rate of <br />5.3% (non -seasonally -adjusted figure). <br />Q2 2015 CBRE Research © 2015 CBRE, Inc. 3 <br />