GID [conmencia php y CEDAR RAPIDS METRO COMMERCIAL REAL ESTATE REPORT ~ P mls fia.OPEC) GD [commescia To download the report digitally, scan this QR code with your smartphone camera or visit gldcommercial.com GLD Commercial would like to acknowledge/express thanks to — Amanda LaGrange, GLD Commercial marketing & research manager Jon Westercamp (Appraisal Associates) and Dave Passmore (Rally Appraisal) for assistance in gathering multifamily data. The abbreviated GLD logo throughout the report denotes GLD Commercial team member involvement in the transaction, Disclaimer — Real estate data contained herein was acquired through the Cedar Rapids Area Association of Realtors MLS, Cedar Rapids Assessor, Linn County Assessor, Rally Appraisal, Appraisal Associates and Cedar Rapids Area Metro Economic Alliance. Al information furnished inthis report is obtained from sources deemed in our opinion to be reliable but not guaranteed. If you have property currently listed with another broker, this isnotintended as a solicitation ofthat listing,2022 Cedar Rapids Metro Industrial Central Business District (CBD) Office Suburban Office Retail / Service Multifamily / Mixed-use Linn County Statistical Data 103£8 oP Dave Drown, SIOR, CCIM, Brittany Gibbs, CPA, Adam Gibbs, SIOR, Beth Herridge, Michael Gibbs, Angie Glick-Martin, SIOR, Amanda LaGrange and Erica Seelman GLD COMMERCIAL is an independent, locally-owned commercial real estate firm based in Eastern lowa. When utilizing GLD for your real estate needs, you'll benefit from over 50 years of combined local commercial real estate experience. You'll also tap into the benefits of the industry's leading designations with GLD Commercial brokers — the Society of Industrial and Office Realtors (SIOR) and Certified Commercial Investment Member (CCIM). You can trust that our experience, teamwork and track record of proven performance will deliver you the results you deserve. We take pride in our disciplined approach to every assignment and employ only full-time commercial agents who are passionate about ensuring our clients’ success. 2022 Cedar Rapids Metro 104A MESSAGE FROM ADAM It's our pleasure to present the second annual Cedar Rapids Metro Commercial Real Estate Report. 2022 was another exceptional year for the commercial real estate industry. Development in the industrial and multifamily submarkets soared to new heights while the office market continued to show significant repercussions from the COVID-19 pandemic. | encourage you to reach out to any of the GLD Commercial real estate experts to further discuss the information contained in this report. Adam Gibbs, SIOR Principal & Co-Founder KEY TAKEAWAYS — Industrial submarket: + 2022 was another unprecedented year for new construction and leasing + Demand, values and rental rates should begin to stabilize in 2023 Office submarket: + Multiple corporate headquarters listed space for sale or lease + Rental rates will decline as more space becomes available + Landlords will need to be flexible with lease terms and clauses Retail submarket: + Second-generation vacancy and rental rates remain stable; first-generation rental rates will be subject to construction costs + Several new construction starts + Consumers continue to expect both e-commerce and in-store options Multifamily/Mixed-use submarkets: + Higher interest rates and home prices continue to fuel multifamily rentals + Over 2,500 units completed, under construction or announced in 2022 + Mixed-use projects with a function of retail/office and residential continue 2022 Cedar Rapids Metro 105INDUSTRIAL a Ol " 2022 QUARTERLY z METRO INDUSTRIAL VACANCY RATES os —— recat Nay Py pail pAvae) YE'21 = Qt @ 3 Qa 200,000 O 2 150,000 100,000 2022 50,000 QUARTERLY METRO i INDUSTRIAL NET -50,000 ABSORPTION -100,000 —— -150,000 -200,000 03 2022 QUARTERLY METRO INDUSTRIAL AVERAGE PSF ASKING RENTAL RATES ° > Ye Ql a2 a3 24 2022 Cedar Rapids Metroee ee O ] INDUSTRIAL ANALYSIS — The figures contained herein focus on existing, or currently under construction, industrial buildings including warehouse, flex, commercial and small shop properties. Non-competitive, owner-occupied, special-purpose manufacturing buildings do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis. MARKET OVERVIEW — The Cedar Rapids industrial market consists of approx. 12,700,000 square feet (SF). Entering 2022, the vacancy rate was 0.71%, it fluctuated significantly throughout the year as new construction came online and large existing spaces (Gazette facility) were sold or leased, The 2022 industrial vacancy rate ultimately ended at 1.17%. The average asking rental rate is $6.51/SF NNN which has steadily increased since the beginning of 2022 at $6.21/SF NNN. This increase is due to the cost of new construction, continued supply chain issues and lack of available second-generation space. LOOKING AHEAD — Following several robust years, industrial market demand, values and rental rates should begin to level off and stabilize in 2023. Rising interest rates coupled with the potential for an economic recession will also slow the rate at which speculative new construction is being built. SIGNIFICANT TRANSACTIONS — ANNOUNCED, IN PROGRESS, COMPLETED OR TRADED 655 Capital Dr. SW, Cedar Rapids — HYVEE BAKERY/ WAREHOUSE — constructing an $8,000,000 bakery and distribution facility of approx. 50,000 SF 999 Enterprise Dr., Marion — SPECULATIVE WAREHOUSE — constructing a $3,600,000 flex building for light industrial, distribution and warehousing of approx. 52,300 SF 10015 6th St. SW, Cedar Rapids — SUB-ZERO MANUFACTURING — constructing a $90,000,000 light manufacturing facility of approx. 400,000 SF 725 41st Ave. Dr. SW, Cedar Rapids — JRS PHARMA — constructing an $18,000,000 expansion of its manufacturing facility by approx. 9,200 SF 3545 3rd Ave., Marion — MARION PROCESS SOLUTIONS — 48,327 SF among 3 buildings on 3.49 acres sold as an investment for $4,625,000 4700 Bowling St. SW, Cedar Rapids — former GAZETTE COLORWEB PRINTING FACILITY, sold to Raining Rose — 198,884 SF on 34.59 acres sold vacant for $6,000,000 3215 64th Ave, SW, Cedar Rapids — EDGEWOOD LOGISTICS PARK — 101,920 SF new construction warehouse leased to Midwest Refrigerated Services 1201 Continental PI. NE, Cedar Rapids — GLOBAL FILTER — 100,000 SF lease signed at an existing facility 3350 10th St. SW, Cedar Rapids — LOWE'S HOME IMPROVEMENT — 81,000 SF lease 64th Ave. SW, Cedar Rapids — EDGEWOOD LOGISTICS PARK — 50,000 SF new construction leased to Zurcher Tire 2022 Cedar Rapids Metro /07CBD OFFICE 01 2022 QUARTERLY CBD OFFICE VACANCY RATES —— Ye = Ql a2 93 a4 20,000 02 2022 QUARTERLY CBD OFFICE NET ABSORPTION PSF —— -20,000, 40,000 -60,000 15 03 2022 QUARTERLY CBD OFFICE AVERAGE PSF ASKING RENTAL RATES ——- YE Ql a2 93 24 2022 Cedar Rapids Metro 108CENTRAL BUSINESS. DISTRICT (CBD) OFFICE ANALYSIS — The figures contained herein focus on all CBD office buildings. Non-competitive hospital-owned properties, radio/television-occupied properties and existing buildings being converted to multifamily housing do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis. MARKET OVERVIEW — The CBD office market consists of approximately 3,400,000 SF. Entering 2022, the vacancy rate was 12.65% which increased throughout 2022, ending at 14.03%. The average asking rental rate is $10.03/SF NNN, increasing from $8.47 at the beginning of the year. The CBD office market saw substantial activity in 2022 — downtown staple, Principal, exited for a suburban location, the former Guaranty Bank adaptive reuse opportunity went sale pending, the Witwer Building sold to Foundation 2 and the Higley Building was listed for sale. LOOKING AHEAD — Expect a continued increase in vacancy especially as large corporate tenants finalize remote/work-from-home policies. Employers and landlords, especially in the CBD, should begin to focus on the human element and transition space to serve a more collaborative purpose in order to attract and retain employees. SIGNIFICANT TRANSACTIONS — ANNOUNCED, IN PROGRESS, COMPLETED OR TRADED * 101 1st Ave. SE, Cedar Rapids — UFG-OWNED RUSH NICHOLSON BUILDING — 27,186 SF on 0.325 acres sold to the City of Cedar Rapids for $2,500,000 + 305 2nd Ave. SE, Cedar Rapids — WITWER BUILDING — 40,000 SF on 0.41 acres, one-half leased and one-half vacant sold for $1,484,000 222 3rd St. SE, Cedar Rapids — former GUARANTY BANK BUILDING, WORLD THEATER, DRAGON RESTAURANT & PARKING LOT — a 101,302 SF adaptive reuse opportunity listed for $3,100,000 — currently SALE PENDING + 116/118 3rd Ave. SE, Cedar Rapids — HIGLEY BUILDING — 53,706 SF on 0.19 acres partially-leased investment property listed for sale at $2,150,000 + 200 2nd Ave. SE, Cedar Rapids — former PRINCIPAL FINANCIAL — 67,000 SF on 0.39 acres vacant building listed for lease or sale for $3,600,000 + 512 3rd Ave SE, Cedar Rapids — former GAZETTE OFFICE — 16,800 SF on 0.96 acres vacant building listed for sale for $2,860,000 — currently LEASE PENDING 2022 Cedar Rapids Metro 109SUBURBAN OFFICE 01 2022 QUARTERLY METRO OFFICE VACANCY RATES —— 02 2022 QUARTERLY METRO OFFICE NET ABSORPTION PSF —— 03 2022 QUARTERLY METRO OFFICE AVERAGE PSF ASKING RENTAL RATES ——- 2022 Cedar Rapids Metro 20 Pa 15 am ay x & iS ae Q2z Q3 a4 ((olYardcil) (svo'9le) -100,000 -200,000 -300,000 =400,000 oe 3 of 15 Ye Ql a2 93 24 0ee O i) | SUBURBAN OFFICE ANALYSIS — The figures contained herein focus on metro area office properties. CBD office and non-competitive owner-occupied medical buildings do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis. MARKET OVERVIEW — The Cedar Rapids metro suburban office market consists of approximately 5,900,000 SF. Entering 2022, the vacancy rate was 8.06% which increased each quarter, ultimately doubling and ending the year at 17.57%. The average asking rental rate is $10.83/SF NNN, decreasing slightly from $11.81 at the beginning of 2022. The former Aegon/Transamerica Edgewood Road campus fell out of contract for the second time and was listed for sale via an online auction site, selling to an out-of-state owner during the third quarter for $7,020,000. The existing 201,165 SF office building was subsequently listed for sale and/or lease. LOOKING AHEAD — Corporations will continue to reduce overall square footage as they look for more flexible lease terms including expansion, contraction and pandemic clauses. Lease rates will gradually decline as additional space becomes available. SIGNIFICANT TRANSACTIONS — ANNOUNCED, IN PROGRESS, COMPLETED OR TRADED + 218 4th Ave. SW, Cedar Rapids — former LUECK LABEL — 11,240 SF on 0.51 acres sold vacant for $1,725,000 + 4201 River Center Ct. NE, Cedar Rapids — former US CELLULAR OFFICE — 15,876 SF on 1.91 acres sold vacant for $1,710,000 + 1900 1st Ave. NE, Cedar Rapids — former WESTERN FRATERNAL LIFE — 15,334 SF on 2.26 acres sold vacant to Dunkin’ Donuts for $1,300,000 * 4050 River Center Ct. NE, Cedar Rapids — former TATA CONSULTANCY SERVICES — 21,036 SF on 6.64 acres sold vacant for $2,645,000 + 3165 Edgewood Pkwy. SW, Cedar Rapids — former PURDUE GLOBAL — 26,505 SF on 3.97 acres sold vacant for $2,800,000 + 929 Martha's Way, Hiawatha — TATA CONSULTANCY SERVICES — 20,295 SF on 1.12 acres sold as an investment for $2,365,000 + 4050 River Ridge Dr. NE, Cedar Rapids — UNITYPOINT CHILDREN'S SPECIALTY SERVICES — 13,480 SF on 1.9 acres sold as an investment for $1,862,500 * 1025 Kirkwood Pkwy. SW, Cedar Rapids — RUFFALO NOEL LEVITZ — 91,892 SF building on 13.97 acres listed for sale, partially occupied at $12,000,000 + 1 Parsons Dr., Hiawatha — former GODADDY HEADQUARTERS — 73,674 SF vacant building on 5.74 acres listed for sale at $8,430,720 2022 Cedar Rapids Metro ARETAIL/SERVICE 8 01 5 on DS Ce ee 2022 fee ee oe QUARTERLY v I oS METRO eye RETAIL/SERVICE VACANCY RATES : —> YE ‘21. Qu Qe Q3 4 ° a G en x SJ oS & w fo} oad 7 02 ee ee ed 20,000 2022 QUARTERLY METRO. RETAIL/SERVICE 40,000 NET ABSORPTION PSF _— -60,000 Ct @ 0 oe 03 2022 QUARTERLY METRO RETAIL/SERVICE AVERAGE PSF ASKING RENTAL RATES ° > Ye Ql Q2 93 24 2022 Cedar Rapids Metro 2O A | RETAIL/SERVICE ANALYSIS — The figures contained herein focus on metro area retail buildings and service establishments. MARKET OVERVIEW — The Cedar Rapids retail/service market consists of approx. 9,300,000. Entering 2022, the vacancy was 4.72%, increasing slightly and ending the year at 6.03%. The average asking rental rate is $14.96/SF NNN, a slight increase from $13.90 at the beginning of 2022. This increase is attributed to new construction costs and Class A space availability. Net-leased retail investments dominated the first half of 2022 while business sales including restaurants, banquet hall/event centers and auto dealerships commanded the second half. New retail development came online in the vicinity of anchor tenants at Westdale and Blairs Ferry Super Target. LOOKING AHEAD — While most shoppers turned online during the pandemic, boosting e-commerce and the need for increased warehouse space, many of those shoppers are returning to the store looking for an experiential retail experience. Customers prefer to try products before buying, which is difficult to accomplish online. Expect the retail market and rental rates to stay stable throughout 2023. SIGNIFICANT TRANSACTIONS — ANNOUNCED, IN PROGRESS, COMPLETED OR TRADED + 4000 Westdale Pkwy. SW, Cedar Rapids — HOME2SUITES HOTEL — constructing an 84- room hotel at Westdale 2811 Wiley Blvd. SW, Cedar Rapids — WILEY CROSSING — demolition of an existing retail strip to make way for a new 17,020 SF retail strip, a $5,400,000 investment + 1202 3rd St. SE, Cedar Rapids — BREWHEMIA/OLYMPIC THEATER — 20,700 SF multi- tenant retail/special purpose building sold as an investment for $3,307,189 167 Jacolyn Dr. NW, Cedar Rapids — CEDAR HILLS RETAIL CENTER — 37,336 SF multi- tenant retail center sold as an investment for $1,655,000 * 295 Tower Terrace Rd., Marion — BARREL HOUSE RESTAURANT-ANCHORED CENTER — 20,700 SF multi-tenant retail/office center sold as an investment for $2,500,000 * 2120 Edgewood Rd. SW, Cedar Rapids — TOP SHAPE GYM — 35,346 SF single-tenant investment sold for $2,775,000 + 5225 Buffalo Ridge Dr. NE, Cedar Rapids — DOLLAR TREE — 9,500 SF single-tenant investment sold for $1,943,500 * 3120 Edgewood Rd. SW, Cedar Rapids — former FAZOLI'S freestanding restaurant — 3,601 SF on 0.92 acres sold vacant for $1,200,000 2022 Cedar Rapids Metro ‘3MULTIFAMILY / MIXED-USE O5 ANALYSIS — The figures contained herein focus on metro area multifamily buildings and/or complexes with a minimum of 12 units. Small-scale multifamily properties consisting of duplexes, townhomes or condos do not accurately affect local capitalization rates (cap rates), vacancy or rental rates and are therefore excluded from this analysis. MARKET OVERVIEW — Housing continues to be in short supply, ultimately contributing to record-low multifamily vacancy rates. The majority of class B and C properties are hovering at or slightly above 5% vacancy while most newly constructed apartments were leased to 95% occupancy within the first three months of completion. Changing market conditions and higher interest rates have led to less inventory and turnover. Very few apartment complexes were sold within the Cedar Rapids metro area. The properties that did trade hands were smaller, most between 12-24 units, with an average cap rate of 7.28%, LOOKING AHEAD — The rental market will continue to be robust as higher interest rates allow fewer consumers to qualify for single-family home ownership. While rents have increased over the past few years, it appears they are at or near their peak and will begin to stabilize. While the cost of building materials has decreased, the cost to construct new properties is not supported by current market rents. Developers will continue to seek incentives, primarily in the form of tax credits, to assist in bridging the gap between the cost of construction and achievable market rents. SIGNIFICANT TRANSACTIONS — ANNOUNCED, IN PROGRESS, COMPLETED OR TRADED GQ + 3100 10th Ave., Marion — GREEN PARK APARTMENTS — 147 multifamily units in two buildings with 'a dog park, pickleball courts and firepit area — $25,000,000 + 627 6th St. SE, Cedar Rapids — CEDAR RAPIDS BRICKSTONE — 44-unit four-story affordable housing complex with a nonprofit partner component — $12,200,000 + 1220 Jacolyn Dr. SW, Cedar Rapids — THE JACOLYN — announced 50-unit affordable housing complex GL + 100 Boyson Rd., Hiawatha — ANTHONY PROPERTIES — announced 200-unit multifamily complex LARGE-SCALE MIXED-USE PROJECTS ANNOUNCED OR IN PROGRESS * 1218-1310 3rd St, SE, Cedar Rapids — REDBALL LOFTS — announcement for a 4-story, mixed-use building — $9,800,000 + NWintersection of Tower Terrace Rd. & Robins Rd., Robins — ROBINS LANDING — announcement for a 400-acre mixed-use development — $85,000,000 initial investment GL + 900 3rd St. SE, Cedar Rapids — DOMOV (Loftus)— announcement for a 5-story mixed-use building with 186 multifamily units and 11,000 SF of commercial space — $36,000,000 2022 Cedar Rapids Metro ‘4LINN COUNTY STATISTICAL, DATA 2022 Cedar Rapids Metro Gl [connenciat ‘5For additional information, contact: Adam Gibbs, SIOR Dave Drown, SIOR, CCIM Principal & Co-Founder Principal & Co-Founder 319.731.3415 319.731.3411 agibbs@gldcommercial.com ddrown@gldcommercial.com Erica Seelman Angie Glick-Martin, SIOR Principal Principal 319.731.3412 319.731.3409 erica@gldcommercial.com angie@gldcommercial.com Michael Gibbs Agent Associate 319.731.3417 mgibbs@gldcommercial.com Gl [conmencia 427 First Street SE, Suite 200 gldcommercial.com Cedar Rapids, |A 52401 319.731.3400