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CBRE MARKETVI EW Minneapolis/St. Paul Retail, Q1 2016 Asking rates dip slightly as Q1 2016 posts modest absorption Vacancy Rate 7.1% Net Asking Rate $17.78 Figure 1: Direct Vacancy Rate and Lease Rate Vacancy Rate (%) 10 9 8 7 6 5 4 3 2 0 Net Absorption 63,631 SF 1 1 1 1 1 1 1 1 1 hit' .� IllllllllilllIth .1ri1111 1111111i111111111i11111 11■...■■1111111111111111 111111111111111111111111 111111111111111111111111 111111111111111111111111 0 Under Construction 1,398,736 SF *Arrows indicate change from previous quarter. Net Asking Rent (S) 19 s„,e ss.s\ „,\,e Source: CBRE Research, Q1 2016. Vacancy (L) 4,Asking Rate (R) Big -box retailer activity continues to be a highlight in the Minneapolis/St. Paul market in Q1 2016, with both new and existing retailers announcing plans to add locations. The construction market remained strong with developers expressing interest in higher end, class - A retail space and open-air centers, such as Central Park Commons in Eagan. A number of local and national restaurant chains are rumored to be entering the market and expanding, hoping to capitalize on the "fast - casual" concept that is becoming increasingly popular among consumers. MARKET OVERVIEW 18 17 16 15 Q1 2016 marked the fifth consecutive quarter of positive net absorption for the Minneapolis/St. Paul retail market. Vacancy rates remained at a steady 7.1% across the market, matching year -over -year statistics. The Minneapolis/St. Paul market experienced a moderate decline in asking rent since the beginning of the year. However, with a number of new retailers and restaurants entering the market, higher demand for space is expected to cause asking rates to increase in some submarkets. Q1 2016 CBRE Research © 2016 CBRE, Inc. I 1