THE MISSISSAUGA +BRAMPTON REPORT

JOHN LAFONTAINE’S

WINTER 2016

Today’s low interest rate environment has created an interesting opportunity for owners of commercial real estate. Values of real estate have steadily increased over the past decade while interest rates have plummeted to record lows. This combination of factors creates a “perfect storm” of borrowing – where owners can borrower more than ever (because of high property value) at record low interest rates.

The first half of the year (Q1 & Q2) are the best times to refinance as lenders have large quotas to fill and are eager to get money out the door. As the year goes on lenders run out of cheaper funds and become more selective on transactions.

CBRE Debt & Structured Finance is the market leader in arranging commercial mortgage financing. Our group handled over $1 Billion in commercial mortgage financing in Canada last year and over $37 Billion globally. We are in contact with over 100 lenders in the commercial mortgage space and work to ensure investors get the very best financing available in the market.

Single Tenant Industrial Investment100,000 square feet70% of property value2.60% for 5 year fixed

Owner-User Industrial30,000 square feet85% of purchase price3.25% for 5 year fixed

One factor pushing commercial mortgage spreads downwards is the increased competition among Canadian lenders. Big banks are losing market share as non-traditional lenders are becoming increasingly aggressive in order to win business. Since many of these lenders have lower overhead costs (eg. fewer retail locations) they are able to be more competitive on rate.There also is an influx of new lenders entering the marketplace every year, giving borrowers more options than ever before. We expect this trend to continue into 2016 as the low Canadian dollar makes lending in Canada attractive for foreign institutions.

The most common reasons for refinancing are:1. Further investment in commercial real estate – commercial real estate continues to offer stable returns for private and institutional investors. Many investors have local knowledge that allows you to have a competitive advantage in making acquisitions. 2. Investing in your business – many owner-users have opportunities to expand or acquire a business line that has a much higher return than the mortgage rate.3. Locking in rates – Many investors are breaking existing higher-rate mortgages to lock-in long term rates for the next 5-15 years. Break penalties can often be rolled into new mortgages, making this option economically viable.

WHY REFINANCE?

WHEN IS THE BEST TIME TO REFINANCE?

HOW CAN CBRE HELP?

RECENT FINANCING

MORTGAGE COMMENTARYHOW TO TAKE ADVANTAGE OF LOW INTEREST RATES

WHY ARE INTEREST RATES SO LOW?

Heather DeBruin*Coordinator/ Executive Assistant Role: Senior Coordinator and Program Administrator416 798 6216heather.debruin@cbre.com

Laurie Hartl*Client Services AssistantRole: Valuations and Property Showings416 798 6295laurie.hartl@cbre.com

Lisa Maharaj*Client Services AssistantRole: Transaction Management and Administrative Assistant416 798 6245lisa.maharaj@cbre.com

Monika DzambaClient Services AssistantRole: Graphics and Marketing Specialist416 798 6294monika.dzamba@cbre.com

Fraser McKenna*Senior Sales AssociateRole: Cold Calling, Transaction Strategist, Deal Intermediary416 798 6275 fraser.mckenna@cbre.com

Shawn McGinn*Senior Sales AssociateRole: Business Development& Cold Calling 416 798 6209 shawn.mcginn@cbre.com

John LaFontaine*Vice Chairman

416 798 6229john.lafontaine@cbre.com

Manish Jain | AssociateCBRE Limited | Debt & Structured Finance T 416-495-6319 | Manish.Jain@CBRE.comMortgage Agent #M13002077 Mortgage Brokerage #10501

TO LEARN MORE, PLEASE CONTACT:

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174,668 SQ. FT. 8 cranes, interior rail access, long run providing contiguous flow for manufacturing purposes

7 BLAIR DRIVE BRAMPTON

FOR LEASE

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57,055 SQ. FT. FOR LEASEUP TO 41,556 SQ. FT. FOR LEASE

165 ORENDA ROADBRAMPTON

5055 SATELLITE DRIVEUNITS 3 & 4, MISSISSAUGA

23,500 SQ. FT. FOR SALE OR LEASE

7 SELBY ROADBRAMPTON

2,056 - 5,538 SQ. FT. FOR LEASE

292 WALKER DRIVE UNIT 11-12294 WALKER DRIVE UNIT 1BRAMPTON

7,269 SQ. FT. FOR LEASE

5101 ORBITOR DRIVEMISSISSAUGA

:: Clean freestanding building:: Easy access to major HWYs:: Large shipping apron:: 8 TL & 1 DI door; 24’ clear height

:: Built in 1999:: Located in the Airport Corporate Centre:: 4 Truck-level shipping doors

:: Can accommodate 53’ trailers:: Adjacent unit can be added :: Renovated office space:: 2 TL doors ; 18’7” clear height

:: Second floor office space:: 6 private offices:: Mississauga Transit bus stop in front of the building

:: Corner lot with great exposure:: Racking available; floor drains:: 2 storey office space:: 2 DI doors and 18’ clear height

JOHN LAFONTAINE*Vice Chairman416 798 6229john.lafontaine@cbre.com*Sales Representative

First class industrial freestand Precast constructionWarehouse roof is 3 years oldGood shipping and dual access

INDUSTRIAL AVAILABILITIESJOHN LAFONTAINE

The Hurontario Light Rail Transit (LRT) project will bring 20 kilometres of fast, reliable, rapid transit to the cities of Mississauga and Brampton along the Hurontario corridor.

New, modern light rail vehicles will travel in a dedicated right-of-way and serve 22 stops with connections to GO Transit’s Milton and Lakeshore West rail lines, Mississauga MiWay, Brampton Züm, and the Mississauga Transitway BRT.

Metrolinx is working with the cities of Brampton and Mississauga to ready the project for procurement. Construction is scheduled to begin in 2018, with anticipated completion in 2022.

11 KENVIEW BOULEVARDBRAMPTON

30,000 SQ. FT. FOR LEASE

40,462 SQ. FT. FOR SALE

UP TO 90,000 SQ. FT. FOR LEASE

27 EDVAC DRIVEBRAMPTON

5648 MCADAM ROADMISSISSAUGA

2400 SKYMARK AVENUEUNITS 3A & 6, MISSISSAUGA

:: Half of an industiral freestand:: Ample power, high density sprinklers :: Exceptional height at 26’5”:: 4 TL & 1 DI shipping doors

:: Recently reduced price!:: Large lot for outside storage:: Air-conditioned 2nd and 3rd floors:: 1 TL & 1 DI door; 13’9”- 26’ clear

:: Class A industrial building :: Built in 1999:: Located in the Airport Corporate Centre:: Shipping: 3 TL in unit 3A, 4 TL in unit 6

> Ongoing work on the GTAA Gate & Apron Reconfiguration and the Dual Bridge Gate Modification projects

> Construction clean up underway> Lighting, signage awnings and glass frames to be completed

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LRT IS COMING TO MISSISSAUGA AND BRAMPTON

MAJOR CONSTRUCTION PROJECTS UPDATEMISSISSAUGA AND BRAMPTON

DID YOU

KNOW?

TOTAL OF TRANSACTIONS

JOHNCOMPLETED

*Average in 2015 (excluding weekends)

$365,237,216TOTAL DEAL

VALUE

1 DEAL EVERY 2 DAYS

8,125,339 SQ. FT.

167,882 SQ. FT. Gated shipping yardTrailer parking High shipping door ratio

7045 MILLCREEK DRIVE MISSISSAUGA

FOR LEASE

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145,142 SQ. FT -.)Just Sold!

62,420 SQ. FT. FOR LEASE

1575 SOUTH GATEWAY RDUNITS AB, MISSISSAUGA

:: Newer, precast construction:: Public transit along Dixie Rd:: Ample employee parking:: 6 TL & 1 DI door; 24’4” clear height

Sale/Lease

TRANSIT PLAN

Toronto Pearson International Airport, MISSISSAUGA

MISSISSAUGA MARKETPLACE, MISSISSAUGA

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MORE INFO: www.metrolinx.com

107,467 SQ. FT.MANY RECENT UPGRADESNEW roof, NEW T5 lighting, re-sealed floor, 6 cranes

2050 DREW ROAD MISSISSAUGA

FOR LEASE

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MARKETAVERAGE NET RENTAL RATE($ per sq. ft.)

AVERAGE SALE PRICE

($ per sq. ft.)

AVERAGE TMI($ per sq. ft.)

AVERAGE LAND PRICE($ per acre)

REALTY TAXES

($ per sq. ft.)

INVENTORY (sq. ft.)

AVAILABILITY RATE (sq. ft.)

ABSORPTIONQ4 (sq. ft.)

AVERAGE DAYS ON MARKET

ETOBICOKE $4.31 $100.72 $2.76 $840,000 $1.57 81.3 million 3.5% 47,766 380

MISSISSAUGA $5.91 $113.90 $3.02 $885,000 $1.81 156.7 million 4.2% 2,176,789 360

BRAMPTON $6.31 $100.31 $2.57 $865,000 $1.96 83.2 million 4.5% 3,747,033 312

CBRE Limited | Real Estate Brokerage | 87 Skyway Avenue | Suite 100 | Toronto, ON M9W 6R3 | T 416.674.7900 | F 416.674.6575 | www.cbre.caThis disclaimer shall apply to CBRE Limited, Real Estate Brokerage, and to all other divisions of the Corporation (“CBRE”). The information set out herein, including, without limitation, any projections, images, opinions, assumptions and estimates obtained from third parties (the “Information”) has not been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or assume any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE. CBRE and the CBRE logo are the service marks of CBRE Limited and/or its affiliated or related companies in other countries. All other marks displayed on this document are the property of their respective owners. All Rights Reserved. Mapping Sources: Canadian Mapping Services canadamapping@cbre.com; DMTI Spatial, Environics Analytics, Microsoft Bing, Google Earth

INDUSTRIAL MARKET UPDATE

Toronto Industrial, Q4 2015

Mississauga

Inventory Average Net Rental Rate Average Sale Price(sq. ft.) ($ per sq. ft.) ($ per sq. ft.)156.7 million $5.91 $113.90

Availability Rate TMI Average Land Price(sq. ft.) ($ per sq. ft.) ($ per acre)4.2% $3.02 $885,000

Absorption Q4 Realty Taxes Average Days on Market(sq. ft.) ($ per sq. ft.)2,176,789 $1.81 360

Recent Transactions

Lease Transactions

Tenant Address Size (sq. ft.) Deal Type

Delmar Logistics Inc. 180 Courtneypark Drive East, Mississauga 130,868 RenewalCentral Graphics and Container Group Ltd. 235 Superior Boulevard, Mississauga 104,274 Renewal

Sale Transactions

Purchaser Address Size (sq. ft.) $ per sq. ft.

Dhaliwal Investments Limtied 2001 Drew Road 188,683Boer Holdings 1265 Aerowood Drive 88,984

Market Highlights

Supply & Demand Weighted Average Occupancy Costs

Q4 2015 CBRE Research © CBRE Limited

Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

$72.61$78.70

• Average days on market have been trending downward for the better part of 2015 and finished off Q4 2015 at 360 days which is the lowest recorded average days on market since Q4 2013. This trendhas continued despite average rates increasing from $5.68 per sq. ft. at year end 2014 to finish off Q4 2015 at $5.91 per sq. ft.

• Availability continued trending down in the quarter falling by 70 BPS to end Q4 2015 at 4.2%. This is accompanied by significant positive quarterly absorption at 1.8 million sq. ft., which was the largest quarterly absorption recorded since Q2 2008.

• Annual completions are at their highest rate since 2007. There was a total of 1.4 million sq. ft. of completions in 2015, which maintained the high level set in 2014 which was 1.2 million sq. ft. To put that into perspective, the annual completions for 2012 and 2013 were 794,591 sq. ft. and 233,395 sq. ft. respectively.

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Toronto Industrial, Q4 2015

Brampton

Inventory Average Net Rental Rate Average Sale Price(sq. ft.) ($ per sq. ft.) ($ per sq. ft.)83.2 million $6.31 $100.31

Availability Rate TMI Average Land Price(sq. ft.) ($ per sq. ft.) ($ per acre)4.5% $2.57 $865,000

Absorption Q4 Realty Taxes Average Days on Market(sq. ft.) ($ per sq. ft.)3,747,033 $1.96 312

Recent Transactions

Lease Transactions

Tenant Address Size (sq. ft.) Deal Type

Ryder Truck Rental Canada Ltd. 30 Pedigree Court, Brampton 145,400 RenewalCanada Bread Company Ltd. 20 Resolution Drive, Brampton 43,302 Renewal

Sale Transactions

Purchaser Address Size (sq. ft.) $ per sq. ft.

Inteplast Group 11 Kenview Boulevard 145,142Packall Packing Inc. 10 Colony Court 96,403

Market Highlights

Supply & Demand Weighted Average Occupancy Costs

Q4 2015 CBRE Research © CBRE Limited

Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

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• There were 17 transactions recorded in 2015 that were in excess of 100,000 sq. ft. with many warehouse/distribution users active in the 'big box' market.

• Brampton posted a very strong performance in 2015 being the GTA submarket with the highest annual absorption and highest annual completions at 3.7 million sq. ft. and 2.5 million sq. ft. respectively. Completions in Q4 totaled 1.3 million sq. ft., yet availability dropped significantly by 60 BPS to finish Q4 at 4.5% indicating strong user demand in the market.

• The average asking net rents reached new heights this quarter, as they surpassed the $6.00 per sq. ft. mark. The increase was substantial, as the rate jumped from $5.44 per sq. ft. in Q3 2015 to $6.31 per sq. ft. in Q4 2015. The influx of large bay users and new product in the market is leading to the inflation of average rents particularly for distribution space.

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5925 AMBLER DRIVEMISSISSAUGA (10,500 SQ. FT.)

161 ORENDA ROADBRAMPTON (40,234 SQ. FT.)

2425 LUCKNOW DRIVEMISSISSAUGA (22,080 SQ. FT.)

5694 AMBLER DRIVEMISSISSAUGA (8,671 SQ. FT.)

MARKETVIEW SNAPSHOT | Q4 2015

MISSISSAUGA SUPPLY & DEMAND

BRAMPTON SUPPLY & DEMAND

MISSISSAUGA WEIGHTED AVG. OCCUPANCY COSTS

BRAMPTON WEIGHTED AVG. OCCUPANCY COSTS

RECENT MISSISSAUGA & BRAMPTON TRANSACTIONS

Leased