A Global Division of Cressy Commercial Real Estate...and cooling along with ADA accessible restrooms. Upon completion, Jefferson Centre, currently considered a class B and C office

OFFICE REPORTWINTER 2017

COURTESY OF

NEWMARK KNIGHT FRANK CRESSY COMMERCIAL REAL ESTATEwww.cressycommercial.com

A Global Division of Cressy Commercial Real Estate

OFFICE BUILDING CLASSIFICATIONS

Office buildings are loosely classified based on the quality of their construction, their features and the prominence of

their location according to guidelines from BOMA.

CLASS A

▪ Prestigious buildings competing for premier office users with rents above average for the area.

▪ Buildings wi th high quality standard finishes, state-of-the-art systems, exceptional accessibility and a definite

market presence.

CLASS B

▪ Buildings competing for a wide range of users with rents in the average range for the area.

▪ Building finishes are fair to good for the area and systems are adequate, but the building cannot compete

with Class A at the same price.

The historic Jefferson Centre Building located at the corner of Jefferson Blvd and MichiganStreet in downtown South Bend will soon complete significant renovation. Plannedimprovements include new canopies and elevators, lobby renovation, upgraded heatingand cooling along with ADA accessible restrooms.

Upon completion, Jefferson Centre, currently considered a class B and C office building willbe transformed into class A space. Ownership is anticipating that the investment will makethe half-occupied building more appealing to tenants in efforts of reaching maximumoccupancy.

The financial sector of the office market is growing steadily as more institutions seek tobroaden their reach and expand their footprint in the Midwest.

Centier Bank is growing. The bank, a new anchor tenant in the JMS Building, recentlycelebrated their grand opening. In addition, they recently opened a branch location in theHeritage Square shopping center. Centier has also announced other planned expansionswith business banking centers planned in Goshen and Elkhart, as well as a branch insidethe South Bend Meijer store. The Goshen branch will celebrate their grand opening in earlyfourth quarter, the Elkhart location is expected to be open before the end of the year.

Similarly, United Federal Credit Union is scheduled to break ground on the south side ofSouth Bend at the beginning of the fourth quarter. This groundbreaking comes on theheels of the recent announcement of a new branch location at Main Street and EdisonLakes Parkway in Mishawaka. UFCU has announced plans to purchase as many as fourmore properties within South Bend and Mishawaka over the next three years.

3Q17 3Q16 3Q15 4Q17Forecast

Total Inventory(Local Profile) 3.95M SF 3.9M

SF 4.1M SF

Vacancy Rate 12.5% 11.4% 10.3%

Quarterly Absorption -51,304 -18,098 10,326

Average Lease Rate $16.73 $17.40 $18.15

Under Construction 0 13,074 0

CompletedConstruction 0 0 0

MARKET PERFORMANCE

8%

11%

14%

17%

20%

$8

$11

$14

$17

$20

3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17

Vacancy (%) Average Lease Rate (Price/SF)

AVERAGE LEASE RATE & VACANCYBUSTLING MARKET

3.95MSF

12.5%

-51,304SF

4%

$16.73

Total Inventory

Vacancy Rate

Quarterly Absorption

Average Lease Rate

Unemployment Rate

MARKET AT A GLANCE


SOUTH BEND/MISHAWAKA3Q17 OFFICE MARKET

$38 Million VA Clinic Complete in Mishawaka

The new Veterans Affairs Clinic in Mishawaka has officially

replaced the South Bend location. The 2-year, 90,000

square foot construction project is completed and many of

the services now available were previously only offered in

Fort Wayne. Local veterans are now able to receive

services such as mental health, audiology and cardiology in

Mishawaka. The addition of these services will quadruple

the offerings for veterans in the region.

MARKET IN MOTION

VA Clinic - Courtesy of South Bend Tribune

www.cressyandeverett.com


Renovation to Produce Class A Office Space

The former Jefferson Medical Arts Building has been

purchased by Cressy Commercial Real Estate and will be

renovated in 2018. The building offers 28,000 SF on 4

floors and will be transformed into class A office space.

Private parking is available.

Urban Storage & Office Space Coming to Downtown

Cressy Commercial Real Estate is in the final stages of

acquiring the two-story former Gates Toyota building on

Western Ave. Plans are underway for the redevelopment of

the property which is located across from Four Winds Field

and the new Ivy at Berlin Place project. The developer

intends to convert the northern end of the building into

urban storage units while the southern end of the building

will comprise of approximately 18,000 square feet of office

space.

“We feel like there’s an emerging trend with all the new

residential apartments and condos for some urban storage

units,” said Bradley, senior vice president of Cressy

Commercial Real Estate. “These are storage units designed

to serve residents in high-density areas.”

The units will provide space for downtown residents,

including young professionals and empty-nesters, to store

furniture and other items that don’t fit in their downtown

living spaces.


NOTABLE LEASE TRANSACTIONS

Address Submarket Size (SF)

Total Consideration ($)

3930 Edison Lakes Parkway Edison Lakes 42,592 $551,566

105 East Jefferson Boulevard

South Bend CBD 14,987 $224,805

130 South Main Street, Suite 200

South Bend CBD 7,571 $169,818

NOTABLE SALE TRANSACTIONS

Address Submarket Size (SF)

Total Consideration ($)

4020 Edison Lakes Parkway

Mishawaka 16,660 $1,325,000

2010 Farnsworth Drive South Bend Other 7,946 $300,000

3220 East Jefferson Boulevard

South Bend Other 4,225 $135,000

SUBMARKET STATISTICS

SubmarketArea

Total Inventory

(SF)

Under Construction

(SF)

TotalVacancy

Rate(%)

Quarter Absorption

(SF)

YTD Absorption

(SF)

Class A Lease Rates

(Price/SF)

Class B Lease Rates

(Price/SF)

Total Average

Lease Rates

(Price/SF)

Mishawaka CBD

62,436 0 9.3 -5,825 -5,825 $18.00 $16.00 $17.00

South Bend CBD

1,743,433 0 12.6 -33,085 -72,465 $19.49 $16.97 $18.23

CBD Total 1,805,869 0 10.9 -38,910 -49,910 $18.74 $16.48 $17.61

Mishawaka** 1,089,173 0 9.66 5,738 22,782 $20.00 $14.33 $17.16

South Bend* 1,057,334 0 19.6 -18,132 -74,037 $16.62 $12.51 $14.56

Mishawaka/South Bend Total

2,146,507 0 14.6 -12,394 -51,255 $18.31 $13.42 $15.86

TOTALS 3,952,376 0 12.5% -51,304 -101,165 $18.52 $14.95 $16.73

Cressy Commercial Real Estate quarterly market reports are a compilation of data from multiple sources.The data is reviewed quarterly and adjusted due to circumstances in the market, such as new constructionand demolition. The vacancy square footage is compiled from a combination of online data from multiplemajor listing services, broker provided listing information and industry knowledge. NGCE has created thisreport to provide the most accurate information possible. We do not assume responsibility, however, forerrors, omissions, prior sale, lease or withdrawal from the market.

*Blackthorn and South Bend Other submarkets are included in the South Bend submarket.**Edison Lakes, Granger and Mishawaka Other submarkets are included in the Mishawakasubmarket.


www.cressyandeverett.com



ADDRESSPROPERTY

SUBTYPE

YEAR

BUILT

BUILDING

SIZE (SF)

AVAILABLE

SF

VACANCY

RATE

OCCUPIED

SF

RENTAL RATE/

LIST PRICE

CALENDAR YEAR

ABSORPTION (SF)

BLACKTHORN

3575 Moreau Court

South BendClass A 1998 85,743

78,921

(Sublease Space;

73,242)

14.6% 73,242 $11.00 - $15.50 FSG 0

3570 Blackthorn Court

South BendClass A 1999 8,128 0 0.0% 8,128 N/A 0

5770 Nimtz Parkway

South BendClass A 1996 9,814 9,814 100.0% 0

$10.00 NNN /

$1,050,000 0

5800 Nimtz Parkway

South BendClass A 2003 11,018 11,018 100.0% 0

$10.00 NNN /

$1,140,000 0

EDISON LAKES


MishawakaClass A 1991 40,860 13,580 33.2% 27,280 $22.50 MGS 0

425 Park Place

Mishawaka Class A 1990 6,024 1,697 28.0% 4,327 $21.00 MGS 0

435 Park Place


515 Park Place


527 Park Place

MishawakaClass A 1990 6,024 6,024 100.0% 0 $21.00 MGS 0

Copyright 2017. Reproduction in whole or part is permitted only with the written consent of Newmark Grubb Knight Frank Company. Some of the data in this report has been gathered from third party sources and has not been independently verified by Newmark Grubb Knight Frank, which therefore makes nowarranties or representations as to the completeness or accuracy of any information contained in this report. You are advised to investigate all such information, and to verify its completeness and accuracy, before making any use thereof or any reliance thereon.

BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) OFFICE REPORTCOURTESY OF

NEWMARK KNIGHT FRANK CRESSY COMMERCIAL REAL ESTATE

IN – INDIANA – NORTHERN MARKET OVERVIEWOFFICE MARKET OVERVIEW

ADDRESSPROPERTY

SUBTYPE

YEAR

BUILT

BUILDING

SIZE (SF)

AVAILABLE

SF

VACANCY

RATE

OCCUPIED

SF

RENTAL RATE/

LIST PRICE

CALENDAR YEAR

ABSORPTION (SF)

EDISON LAKES (CONTINUED)

3515 Park Place

MishawakaClass A 1999 6,000 6,000 100.0% 0 $21.00 MGS 0


MishawakaClass A 1988 43,000 43,000 0.0% 43,000

For Sale Only

($6,100,000)0


MishawakaClass A 1989 42,627

42,627

1,400 (For Lease)3.3% 41,227

$22.50 MGS /

$8,000,000 (1,400)

3550 Park Place

MishawakaClass A 1990 6,024 6,024 0.0% 6,024

For Sale Only

($615,000)0

MISHAWAKA CBD

202 Lincolnway East

MishawakaClass B 1968 17,484

17,484

8,100 (For Lease)46.3% 9,384

$15.00 FSG /

$975,0000

MISHAWAKA OTHER

230 Catalpa Drive

MishawkaClass A 1996 11,624 5,106 43.9% 6,518 $12.00 - $13.00 NNN 0

1602-1644 E Day Road

MishawakaClass A 2008 21,560 2,100 9.7% 19,460 $12.00 NNN (394)

1710 E Day Road

Mishawaka Class A 2014 13,074 11,478 87.8% 1,596 $13.00 - $14.00 NNN (2,555)





ADDRESSPROPERTY

SUBTYPE

YEAR

BUILT

BUILDING

SIZE (SF)

AVAILABLE

SF

VACANCY

RATE

OCCUPIED

SF

RENTAL RATE/

LIST PRICE

CALENDAR YEAR

ABSORPTION (SF)

MISHAWAKA OTHER

2410 Grape Road

Mishawaka Class B 1979 22,376 7,120 31.8% 15,256 $13.00 - $15.00 MGS 2,380

1415 Lincolnway West

OsceolaClass B 1989 27,500 2,500 10.5% 25,000 $9.00 MGS 1,250

230 Red Coach Drive

MishawakaClass A 1999 12,072 3,478 28.8% 8,594 $10.00-$13.00 NNN 0

236 W Edison Road

MishawakaClass B 1980 11,390 1,650 14.49% 9,740 $9.00-$12.95 NNN 900

SOUTH BEND CBD

535-615 W Edison Road

MishawakaClass B 1986 87,788 10,281 11.71% 77,507 $7.00-$10.00 NNN (6,439)

401 E. Colfax Avenue

South BendClass B 1912 91,402 35,453 38.8% 55,949 $16.00 MGS (2,604)

205 W Jefferson Boulevard

South BendClass B 1914 80,770 14,123 17.4% 66,647 $14.50 FSG 698





ADDRESSPROPERTY

SUBTYPE

YEAR

BUILT

BUILDING

SIZE (SF)

AVAILABLE

SF

VACANCY

RATE

OCCUPIED

SF

RENTAL RATE/

LIST PRICE

CALENDAR YEAR

ABSORPTION (SF)

SOUTH BEND CBD (CONTINUED)

224-232 W Jefferson Boulevard

South BendClass B 1922 50,532 14,634 28.9% 35,898 $12.00 FSG 325

207-215 N Main Street

South BendClass B 1924 31,862 10,929 34.3% 20,933 $13.50-$15.00 MGS 0

202 S Michigan Street

South BendClass A 1969 125,928

53,504

(Sublease Space:

49,394)

42.5% 72,424 $17.75 MGS 0

300 S Saint Louis Boulevard

South BendClass A 1989 40,000 18,973 47.4% 21,027 $18.00 MGS 1,527

320 St. Joseph Street

South BendClass B 1972 14,770 1,628 11.0% 13,142 $20.00 NNN 0

100 E Wayne Street

South BendClass A 1985 99,367 5,589 5.6% 93,778 $21.50 FSG 13,440

220 W Colfax Avenue

South BendClass B 1928 28,674 7,302 24.5% 21,372

$15.00 FSG /

$1,325,0003,354

221 W Wayne Street

South BendClass B 1927 26,184 26,184 0.0% 26,184

For Sale Only

($465,000)0





Documents

A Global Division of Cressy Commercial Real Estate...and cooling along with ADA accessible restrooms. Upon completion, Jefferson Centre, currently considered a class B and C office