CHICAGO RETAIL MARKET TRENDS CHICAGO MSA Chicago is

CHICAGO RETAIL MARKET TRENDS

CHICAGO MSA • Chicago is a Dynamic Retail Market and Truly a Global Marketplace • If Chicago Region were a country it would be the 20 th largest • • economy in the world Gross regional Product of $500 billion Ranks 3 rd of all US Metro Areas 26 regional malls and 47 sub regional retail markets Population of 8. 6 million in 3. 4 million households Population growth forecast to over 11 million by 2040 Employment of over 4. 1 million rising to 5. 3 million by 2040 Tourism represented nearly 40 million visitors and over $11 billion in sales Major Transportation Hub - O’Hare International Airport 25 % of all domestic rail freight originates, terminates or passes through Chicago

CHICAGO MSA SALES 2013 • • • Metro Area Retail Sales $110. 8 General Merchandise $12. 0 Food store $13. 4 Drinking & Eating Places $14. 8 Apparel $5. 1 Furniture & Appliance $5. 7 Lumber, Building, & Hardware $5. 0 Automotive & Filling Stations $24. 2 Drugs & Misc. $17. 8 2012 $105. 7 Billion $12. 1 Billion $13. 2 Billion $14. 1 Billion $4. 9 Billion $5. 5 Billion $4. 6 Billion $22. 8 Billion $16. 5 Billion

CHICAGO MSA SALES CHANGES Total Metro Area 2012 2013 % Change Numerical Change General Merchandise $12, 121, 383, 709 $12, 003, 731, 596 -1. 0% -$117, 652, 113 Food $13, 226, 516, 022 $13, 471, 672, 048 1. 9% $245, 156, 026 Drinking and Eating Places $14, 186, 474, 944 $14, 858, 603, 067 4. 7% $672, 128, 123 Apparel $4, 992, 971, 500 $5, 150, 418, 064 3. 2% $157, 446, 564 Furniture & H. H. & Radio $5, 505, 736, 781 $5, 721, 885, 306 3. 9% $216, 148, 525 Lumber, Bldg, Hardware $4, 667, 595, 959 $5, 090, 320, 656 9. 1% $422, 724, 697 Automotive & Filling Stations $22, 824, 307, 130 $24, 240, 938, 057 6. 2% $1, 416, 630, 927 Drugs & Misc. Retail $16, 581, 151, 452 $17, 800, 566, 733 7. 4% $1, 219, 415, 281 Agriculture & All Others $9, 829, 538, 386 $10, 481, 614, 099 6. 6% $652, 075, 713 Manufacturers $1, 837, 032, 929 $2, 035, 399, 393 10. 8% $198, 366, 464 $105, 772, 708, 812 $110, 855, 149, 019 4. 8% $5, 082, 440, 207 Total

CHICAGO MSA SALES CHANGES 2013 • • General Merchandise Food Drinking & Eating Apparel Furniture & Electronics Home Improvement Auto & Filling Stations Drugs & Miscellaneous Retail - $117. 6 Million + $245. 1 Million + $672. 1 Million + $157. 4 Million + $216. 1 Million + $211. 0 Million + $1. 4 Billion + $1. 2 Billion

CHICAGO MSA SALES CHANGES 2013 • General Merchandise • Food • Drinking & Eating • Apparel • Furniture & Electronics • Home Improvement • Auto & Filling Stations • Drugs & Miscellaneous Retail - 1. 0 % + 1. 9 % + 4. 7 % + 3. 2 % + 3. 9 % + 9. 1 % + 6. 2 % + 7. 4 %

MSA RETAIL SALES FIRST HALF 2014 • • • General Merchandise Food Drinking & Eating Apparel Furniture & Electronics Home Improvement Auto & Filling Stations Drugs & Miscellaneous Retail Total Retail Sales + $324. 1 Million + $189. 1 Million + $270. 6 Million $8. 3 Million - $84. 2 Million + $28. 7 Million +$557. 9 Million +$223. 4 Million + $2. 1 Billion

CHICAGO MSA SALES CHANGES First Half of 2014 • • General Merchandise Food Drinking & Eating Apparel Furniture & Electronics Home Improvement Auto & Filling Stations Drugs & Miscellaneous Retail + 5. 3 % + 2. 8 % + 3. 6 % - 0. 3 % - 3. 2 % + 1. 1 % + 4. 5 % + 0. 5 %

RETAIL DEVELOPMENT • Grocers will be the focus • Single Tenant development will dominate (grocers, • • Mariano’s, Wal-Mart, Meijer) Second Generation stores – Vacant Dominick’s & Kmart Mixed-Use Development – – – – Wheeling Town Center - Wheeling Orland Park Triangle – Orland Park Mc. Caffery – Children’s Memorial Site - Chicago Arlington Downs – Arlington Heights Shoppes at Lincoln Pointe - Lincolnwood New City Project Transit-Oriented Mixed-Use Development

RETAIL DEVELOPMENT • • • u u u • • • No Major Mall Development Limited Conventional Department Store Activity Limited Lifestyle Center activity Approximately 1, 200 Malls around the Country 26 Regional Malls in Chicago MSA 47 Sub Regional Markets Only 2 malls built in the US in 2003 Only 5 malls built in 2004 9 Malls in 2005 5 Years of No New Ground Up Malls 1 mall opened in 2011 in the whole country No Malls in 2012 2 New Malls in 2013 2 New Malls in 2014

MALL OPENINGS 1987 -2005

MALLS & LIFESTYLE CENTERS • University Town Center – 880, 000 sf Sarasota, Fl • • • October 2014 – Dillard’s, Saks & Macy’s Mall at Bay Plaza – 780, 000 sf -Bronx, NY – August 2014 – Macy’s & JC Penney No New Malls in Chicago MSA in 2014 Rosemont Outlet Center opened in 2013 Redevelopment of Randhurst Village Promenade Bolingbrook – Macy’s 23 lifestyle centers built in both 2004 and 2005 10 lifestyle centers built in 2006 Only 4 lifestyle centers built in 2010 Focus on redevelopment

NEW SHOPPING CENTERS • Pulaski Promenade – Chicago- 133, 000 SF - Marshalls, • • Ross, Michaels, Petsmart & Shoe Carnival – IBT Group Main Street Promenade East – Naperville -51, 000 SF – Sephora, Naf Grill, J. Crew, Anthropologie, J. Jill Wheeling Town Center – 100, 000 Sf – Flix Brewhouse Shoppes at Lincoln Pointe – Lincolnwood – Mixed Use Downtown Barrington - Hough and Main Mc. Caffery Children´s Memorial Site – 105, 000 SF Arlington Downs in Arlington Heights – 65, 000 SF Chicago Premium Outlets - 290, 000 SF expansión Dimucci Mall - 650, 000 SF approved

RETAIL DEVELOPMENT CHICAGO MSA • • • 2013 2012 2011 2010 2009 2008 2007 2006 2005 2. 0 million square feet 1. 14 million square feet 1. 02 million square feet 1. 0 million square feet 3. 7 million square feet 8. 7 million square feet 6. 0 million square feet 5. 0 million square feet

RETAIL BANKRUPTCIES • • • • • Brookstone American TV & Appliance Loehmann’s Fox & Obel Applebee’s Flat Top Grill & Stir Crazy Mark Shale Michael’s Fresh Market Moo & Oink Borders Circuit City Linens ‘N Things Boscov’s Sharper Image Bombay Co. Lillian Vernon KDA Comp USA Charming Shoppes • • • • • Furtonoff Everything but Water Ritz Camera S&K Famous Brand Bruno's Supermarkets Gottschalks Mervyn’s Uno Restaurant Holdings-Pizzeria Uno The Walking Company Robbins Diamonds The Walking Company Bully’s Sports Bar & Grill Penn Traffic Simmons Bedding Damon’s Grill Ham’s Restaurants Super 88 Supermarkets Igourmet Hudson’s Furniture Showroom A&M Carpet

RETAIL BANKRUPTCIES • • • • • Wickes Furniture KB Toys Bennigan’s/Steak & Ale Baker’s Square Tweeter Good Guys Whitehall Jewellers Bonanza/Ponderosa Value City Urban Brands Blockbuster Claim Jumper Jennifer Convertibles Mc. Grath Public Fish House Movie Gallery Boston Blackie’s Restaurant Max & Erma’s Restaurants Thomas Kinkades Gallery • • • • • Steve & Barry’s Bashas Crabtree & Evelyn Oililiy Best & Co Smith Hawken Door Store Eddie Bauer Filene's Basement Bi-Lo Z Gallerie Ultra Jewelry Big 10 Tires Zounds Hearing Aid Center Al Baskin Co Drug Fair Dippin Dots Friendly’s Ice Cream

RETAIL BANKRUPTCIES • • • • • Coldwater Creek Dots Brookstone Quiznos Sbarro Pizza Anchor Blue Orchard Brands Rugged Bear Ultimate Electronics Harry & David Holdings Southern Golf Partners Swoozie's KV Inc. , d/b/a Tellos Strasburg-Jarvis Joe's Sports & Outdoor Stores Perkins & Marie Callender’s Restaurants Giordano’s Pizza A & P Grocery Brown’s Chicken Fuddruckers

VACANCY RATES & RENTAL RATES • • • Vacancy Rates Declining 8. 9 Percent Vacancy Q 3 2014 10. 1 percent Vacancy Q 2 2014 8. 6 Percent in 2008 12. 1 Percent during the peak in 2010 Rental rates at A locations have reached pre-recession levels Dominick’s Store Closings – increased vacancy rates Dominick’s - 38 stores unspoken for at 70, 000 sf average Whole Foods 7 Dominick’s - Waiting a year to redevelop locations Rental rates still weak at B & C locations Rental rates were down 20 percent from 2007 Prime second generation spaces taken by hhgregg, Ross, Binny’s, Art Van Furniture, Mariano’s, Whole Foods, and others.

EXPANDING RETAILERS • Mariano’s Fresh Market – Arlington Heights, Chicago (9), Frankfort, Lake • • Zurich, Glenview (2), Wheaton, Elmhurst, Harwood Heights, Hoffman Estates, Park Ridge, Northbrook, Northfield, Palatine, and Vernon Hills. New – Aurora, Buffalo Grove, Gurnee, Western Springs, Westchester, Oak Lawn, Bannockburn and Shorewood Heinen’s – Barrington, Glenview and Bannockburn Fresh Thyme – Mount Prospect, Downers Grove, Deerfield, Naperville and Joliet Wal-Mart – (Chicago I-94 & 111 th) and 47 th and Cottage Grove, Skokie (Touhy & St. Louis), Mundelein, Carpentersville, Homewood and Richton Park Meijer- Evergreen Park, Mokena, Flossmoor & 9 in Wisconsin Art Van Furniture – Batavia, Bedford Park, Elston Avenue, Orland Park, Woodridge/Bolingbrook, and Orland Park Menards – Vernon Hills Costco – Winfield

EXPANDING RETAILERS • Mariano’s – 11 Dominick’s locations • Whole Foods – Kildeer, Park Ridge, Orland Park, Hyde Park, 63 rd & • • Halsted – Wellness Centers Whole Foods - 7 Dominick’s - West Loop, Streeterville, Lincoln Park, Edgewater, Willowbrook, Evanston and Elmhurst Ultra Foods – Crestwood and Prospect Heights Floor & Decor – Lombard & Arlington Heights Jewel-Osco – Rogers Park, Old Town, Merrionette Park, Fox River Grove, and Lake Zurich Caputo’s – 4 Dominick’s - Arlington Heights, Northbrook, Des Plaines, and Elk Grove Village plus Carol Stream Fresh Farms – Niles (former Jewel) Piggly Wiggly – Carol Stream and Buffalo Grove Garden Fresh Market – Buffalo Grove (former Dominick’s)

EXPANDING RETAILERS • • • • • • Art Van Furniture Aldi Food Stores Big Lots Costco CVS DSW Shoes Dress Barn Five Below Fresh Thyme Hobby Lobby Jewel Mariano’s Fresh Market Menards Nordstrom Rack Pet. Smart Plum Market Rue 21 Sav-A-Lot TJ Maxx Fresh Thyme US Cellular Whole Foods Advance Auto Parts Auto Zone Burlington Coat Cost Plus World Market Caputo´s Discovery Clothing Fresh Market Foreman Mills Gander Mountain hhgregg Kohl’s Lucky Strike Michael’s Off Fifth Pet Supplies Plus Pinstripes Sam’s Club Sleepy’s T Mobile Topshop Ultra Foods Walgreens Apple 16 , 00 customers per week Binny’s Beverage Depot Bye Baby Charming Charlie Cricket Comm Dollar Tree Food 4 Less (Kroger) Fresh Market Golfsmith Heinen´s Fine Foods King’s Bowl America Meijer Microsoft Petco Pete´s Produce Ross Dress for Less Savers Tiger Direct Perch Trader Joe’s Valli Produce Wal-Mart

EXPANDING RESTAURANTS • • • • • Argo Tea Blaze Fast Fire’d Pizza Chick Fil-A Checker’s Drive In Coney Island Hot Dogs Dave & Busters Five Guys Burgers Golden Corral Jason’s Deli Johnny Rockets Lettuce Entertain You Enterprises Moe’s Southwest Grill Noodles & Co. Potbelly Peet’s Coffee Roti Mediterranean Grill Stella’s Tom & Eddie’s TCBY Yogenfruz Twin Peaks Andy’s Frozen Custard Buffalo Wild Wings Culvers Chipotle Cooper’s Hawk Einstein’s Bagels Flix Brewhouse Halsted Street Deli Jimmy John’s Kim’s & Scotts Pretzels Magnolia Bakery Meatheads Panera Bread Pei Wei Asian Red Mango Shake Shack Starbuck’s (Beer & Wine) Texas Roadhouse Which Wich Yogurtland Bar Louie Blue Fish Sushi Dunkin Donuts Chutney Joe’s Corner Bakery Firehouse Subs Granite City Jake’s Wayback Burger Jets Pizza Labriola Café Menchie’s Nathan’s Hot Dogs Pancheros Pret A Manager Red Robin Tim Horton´s Star Cinema Grill BZ’S Twisted American Cuisine Wingstop Zoup

OUTLET CENTERS • • • 312 outlet centers US Rosemont – Fashion Outlets - $625 sales psf New Lenox and Country Club Hills proposed Products are made specifically for outlet stores Mills Hybrid Outlet Centers very successful Gurnee Mills Mall – Macy’s and Neiman Marcus Last Call Chicago Premium Outlets in Aurora – 290, 000 SF Expansion Lighthouse Place Michigan City Pleasant Prairie Premium Outlets Huntley Factory Outlets Outlet Centers – Strong Fundamentals

DEPARTMENT STORE PLANS • Limited Conventional Department Store Expansion • Macy’s –Gurnee – Closed 5 stores Ut, Mo, Az, Ka, and NY • Nordstrom – Mayfair Mall in Wauwatosa, Wi. - Ridgedale Mall – Minnetonka, Mn, The • • • Woodlands- Houston, Tx and The Domain-Austin, Tx, Manhattan, NY, St. John’s Town Center, Jacksonville, Fl, The Mall at San Juan, Puerto Rico and six stores in Canada Nordstrom Rack – Orland Park, Lincoln Park and Skokie – 28 stores around the country Bon-Ton–Carson’s – No New Stores Planned–Closed River Oaks) North Riverside fire Bon-Ton–Carson’s to stay open at Lincoln Mall in Matteson JC Penney – No New Stores Sears – No New Stores Planned – Closed State Street Von Maur –Joliet, Plainfield, Lindenhurst and New Lenox – dead Bloomingdale’s–No New Stores Planned Bloomingdale’s Outlet – Opened in Rosemont Neiman Marcus – 15, 000 SF Last Call Studio – Northbridge Mall Neiman Marcus Last Call Outlet Opened at Gurnee Mills

RETAILERS RIGHTSIZING • Focus on execution and consumer preferences • Best Buy – Closed 50 stores 7 in Chicago Area – Addison, Chicago, • • • Deerfield, Matteson, Mundelein, West Dundee and Skokie, Radio Shack closing 1, 100 stores Target – Target Closing 11 locations including Mc. Henry and Calumet City Target closed West Dundee & 7 other stores in NV, TN, GA, Fl, and OH JC Penney –Closed 33 stores- 5 Wisconsin Carson’s – Closed River Oaks Mall Walgreens – Closing 75 stores Office Depot/Office Max Merger–Smaller stores 4, 500 sku’s instead of 9, 000 Sears – Closed State Street - Monetizing Sears Real Estate – Aventura Mall Changing Store Size to penetrate urban sites. Target Opening Express stores in Streeterville & Lakeview Provide store within a store concepts Real Estate costs driving smaller stores

INTERNET SALES • Internet Sales Over $300 billion 7 % of US Retail Sales $4. 7 Trillion • Estimates of 10% to 15% include hotels, airlines, rental cars etc. • Online sales increased by more than double the rate of brick-and • • mortar sales last holiday season Retailers got only about half the holiday traffic in 2013 as they did just three years earlier Declines of 28. 2% in 2011, 16. 3% in 2012 and 14. 6% in 2013. Internet Sales were strong but many consumers got burned on delivery last year The Holiday presents did not arrive

MALL PERFORMANCE • • • • Water Tower Place - $600 psf * Food Court Expansion 900 N. Michigan Avenue - $450 psf * Northbridge - $800 psf * Chicago Place - $375 psf * Old Orchard Center - $599 psf – Food Court Expansion Northbrook Court - $500 psf * Louis Joliet Mall - $408 psf Southlake Mall - $406 psf Woodfield Mall - $400 psf * Orland Square Mall - $400 psf – Remodeled - Cheesecake Factory – Dave & Busters Pad Chicago Ridge - $398 psf Fox Valley - $358 psf Randhurst Village - $300 psf - For Sale

MALL PERFORMANCE • • • • • Hawthorn Center - $332 psf – Redevelopment Planned Gurnee Mills Mall - $308 psf - New Macy’s, Neiman Marcus Last Call Lincolnwood Town Center $300 psf * Harlem Irving Plaza - $300 psf * Stratford Square Mall - $280 psf * - Renovations Planned – Round One – Family Entertainment River Oaks Mall - $280 psf Ford City Mall – $250 psf * Golf Mill - $250 psf * Spring Hill Mall - $200 psf * - Declining Occupancy and Performance Lincoln Mall - Judge Ordered to Close Charlestowne Mall – N/A – Redevelopment planned Bolingbrook Promenade - $500 psf $1. 23 billion biggest increase in 2011 – 13. 8 % Deer Park Town Center - $300 psf * Arboretum of South Barrington - $200 psf* - Foreclosure Glen Town Center - $200 psf * - Foreclosure Block 37 – Foreclosure Di. Mucci Mall – 800, 000 SF Mall Planned Macerich says mall sales up 4% from $549 tp $571 PSF

CONCLUSIONS • Approximately 2. 0 million square feet of new shopping center • • construction in 2013 Retailers Focused on Vacant Second Generation Space New Construction Driven by Wal-Mart, Supermarkets, Pharmacies and Fast Casual Restaurants New Construction Concentrated in Mature Markets Employers shed 8. 8 million jobs during recession Employers added 8. 9 million jobs since the recession ended Economists forecast 200, 000 jobs per month for rest of 2014 Value-focused mass retailers will hold up well, including supercenters and warehouse clubs. High End Retailers will experience strong sales – rising stock market

CONCLUSIONS • Retail Sales growth accelerated in 2013 by 4. 8% over $5 billion • Household wealth, credit availability, and job growth are key lead • • components of retail sales - all are improving General Merchandise sales impacted by Target – Credit Card Fraud Food store sales will rise only moderately due to vacant Dominick’s More consumers are drawn to supercenters and warehouse clubs Restaurant sales growth will accelerate with more discretionary spending Expenditures on home furnishings and home improvement will continue to improve Retailers will begin to increase new store openings Store sizes will get smaller-Wal-Mart, Home Depot, & Best Buy

CONCLUSIONS • Auto sales have increased strongly – Pent up demand • The Drugs & Miscellaneous category will continue to rise • • • with the aging of the population – Prescriptions Improving Housing Market - enhanced household wealth Decreasing vacancy as retail sales rise and retailers and more particularly restaurants increase growth plans Holiday Retail Sales in 2013 increased by 3. 2 % Holiday Retail Sales in 2014 forecast to rise by 4. 0 % E-Commerce Holiday Sales forecast to be strongest in years

FORECAST • • • 2014 Retail Sales Forecast to Reach $116 billion $6. 0 billion increase in 2014 or over 5 percent Lower gasoline prices - additional discretionary spending Decreasing unemployment rate - 6. 1 % Housing market improvement Rising Consumer Confidence – Highest in 7 Years Seasonal Hiring Highest since 2000 2015 GDP – 2. 5 % Growth New Congress and New Governor in Illinois Retail Development of over 2 million square feet

FORECAST • • • Fewer Malls by 2040 Tenants Shuttering Stores Retailers Will Require Less Selling Area Improved Technology With Seamless Checkouts Body Scannners for Apparel Purchases More Online Shopping Improved Shipping Capabilities E Commerce to Represent Nearly 10 % of Retail Sales Aging of the Population Changes in Spending Patterns Shopping Centers Will Continue to Evolve with Restaurants, Entertainment and Services

WHEELING TOWN CENTER

WHEELING TOWN CENTER • Transit-oriented, master planned, mixed-use • • • development Located at the Metra Station, Municipal Campus and Heritage Park Developer - Urban R 2 and Lynmark Group 300 residential apartment units 100, 000 sf of restaurant and entertainment uses Flix Brewhouse - First Run Dinner Theater Reva Development – 288 luxury apartment units Nearly 600 Units Planned in the Town Center TIF District Leasing Agent – Wayne Caplan – Sperry Van Ness Village will create a Downtown at the Wheeling Metra Station

SITE PLAN • • • Movie Theater Restaurants Entertainment Retail Services Village Greenway Village Events Festivals 85 acre Heritage Park

John C. Melaniphy, III Director of Economic Development Village of Wheeling 2 Community Boulevard Wheeling, IL 60090 Phone: (847) 499 -9094 Fax: (847) 215 -5175 Web Site: www. wheelingil. gov Email: jmelaniphy@wheelingil. gov