Cushman & Wakefield - North American Industrial Market Beat - Mid-Year 2012
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    Cushman & Wakefield - North American Industrial Market Beat - Mid-Year 2012 Cushman & Wakefield - North American Industrial Market Beat - Mid-Year 2012 Document Transcript

    • MARKETBE EATINDUSTR RIAL SN NAPSHO OTNO ORTH AM MERICA MID-YE EAR 2012 2A Cu ushman & Wak kefield Researc Publication ch ECONOMIC OVERVIEW healthy level of deman and general la of new product, the y nd ack The deepening of the European economic n industr sector shoulld be entering a period of sustai rial ined rental slump, the poteential so-called "fiscal cliff" and " apprecciation. the risk of a hard landing for Chinas economy C have added gre eater uncertainty to U.S. y NOR RTH AMERICA – GDP GRO A OWTH ( SO U RC E : M O O DY ’ S AN AL Y T I CS) economic prospects. For the first time in f 6.0% %nearly three years, the U.S. manufactu y e uring sector shra in June. The ank e 5.0% %ISM’s ggauge of new or rders, a measure of future activity, plunged from e m60.1 to 47.8, the first time since the recession ended that this index o r 4.0% %has fal below 50. llen 3.0% %Manuf facturing activity in Canada was revived during the first half of y t 2.0% %2012, although its con ntinued growth will depend on the speed and w tdepth of the U.S. reco overy. However factory jobs in r, ncreased for the 1.0% %sixth c consecutive mon in May. This is surprising, giv that nth ven 2010 20 011 2012Finternational shipment of machinery and equipment were largely ts U U.S. Canad da Mexicounchanged. Even with higher labor co and an eleva osts ated Canadian Overa demand streng across most Canadian indus all gth t strial real estatedollar, over 115,000 manufacturing jo were created in the six , m obs d market remains expa ts ansionary. Howe ever, challenging global economicmonth ending May 20 the most in any similar period on record. hs 012, n condittions is translatin into a more c ng cautious approac to occupancy chAs of May 2012, the sector accounted for 10.4% of th country’s total s d he decisio Demand mo ons. omentum is clea stronger wit arly thin westernemplooyment. Canad ian markets, par rticularly in Albeerta, where tena demand in antMexico’s industrial GD grew 3.6% in the first half of the year and th DP n f he Calgar and Edmonton have been buo ry n oyed of late by in ncreasing oilconsensus is that econ nomic growth will continue outp w performing prices and needs creat by huge meg projects relat to oil sands ted ga tedexpect tations in 2012. In its mid-year world economy report, the IMF y F develoopment. The con ntinued evolution of the Canadia retail sector is anhas inccreased the grow projection for Mexico in 20 to 3.9%, wth f 012 also co ontributing to gr rowth across ind dustrial markets as companiesabove the average for Latin America and for the Wor (which were r a rld like W Wal-Mart expand their distributio facilities and n entrants, on newrevised downward). The degree of this upturn will, ho T owever still be such a s Target, establiish major facilitie to support a network of essubjec to a sustained recovery in the international ec ct e conomy and a stores across Canada, scheduled to open in 2013. Canadian marketsmore emphatic promo otion of local de emand. are als seeing expans so sion within the fo distribution sector, as a ood n growin number of re ng etailers add groce operations t their service ery toCON NTINUED IMPR ROVEMENT offerin ng.By mid d-year, the U.S. industrial marke continued to post healthy etdeman and declining vacancies. The overall vacancy rate fell to 9.3% nd % TO FIVE NORT AMERICAN PORTS OP TH N ( % C H A N GE I N TE U T O T AL S)at midd-year 2012, the lowest vacancy level since the fourth quarter of f o2008, when the vacancy rate was 8.6% Reflecting a continuation of a %. 25.0 0%robust uptrend that began in 2011, th U.S industrial sector absorbed t b he d 15.0 0%65.1 m million square fee (msf) of space at mid-year, up from the 53.5 et e pmsf reecorded at mid-y year 2011. Leasing activity durin the first six ng 5.0 0%month of the year to hs otaled 199.2 msf. If activity cont . tinues at this -5.0 0%pace f the remainde of 2012, the U.S. industrial ma for er U arket is on track kto end the year with leasing velocity just below 2011’ level of 417.1 d ’s -15.0 0%msf. W While overall vac cancy and absorp ption completely turned the y -25.0 0% LA/Long Beach, N New York/New Savan nnah, GA Vancouver (B BC) Oakland, CAcorner in 2011, the st teady stream of demand had virt tually no impact CA Jerseyon ren growth and re nt ental rates have yet to reach pree-recession 2010 2011 MID-YEAR 2 2012levels. Although there has been a sligh uptick in rent since year-end e ht ts d2011, it is still down fr rom the same period a year ago However with o. hCushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • U.S. – WESTERN REGION R OAKL LAND, CA Over vacancy drop rall pped 60 bps to 7.9% from 8.5% as of th end of last qu he uarter, reaching its lowest point in nearly four tGREA ATER LOS ANGELES, CA Marke fundamentals for the region et years. The squeeze on quality space continues to spur tenant n rcontin to improve with occupancy gains of 1.3 msf at mid-year, nue w renewwals, which repre esented over 35% of leasing activ this quarter % vity r.dropp the overall vacancy rate to 4.6% - the lowes since 2009. ping v 4 st Lack o quality space h allowed landlords to push up rents, and of has pThe reegion also remai the tightest industrial market in the country ins t overal l asking rents ro 2.6% during the quarter, wit warehouse ose thand leads the nation in leasing activity with 18.9 msf so far this year. n y s rents iincreasing by as much as 7.0% in some submark n kets. User salesHowe ever, leasing activ is down 5.4% from last year Although users vity % r. contin ued to pick up ppace during the second quarter. Oakland should dcontin to be cautiou in this economic environmen this is also a nue us nt, expect a slow recover in response to uncertainty in the national t ry oby-prooduct of lack of quality space tha users demand Totaling 8.4 at d. econo my. Through 20 013, vacancy rate are expected to tick slowly esmsf at mid-year, investment activity co t ontinued to gain momentum and n downw wards and rental rates slowly up pwards, followed by faster dis up 7 74.8% from a year ago. With so few quality prop perties coming growth in 2014 and 20 h 015.online for sale, investo are bidding more aggressively for prime e ors massets. PORT LAND, OR Mar rket fundamenta are gaining po als ositive mome entum in Portland. Overall vacan continued its gradual ncy sINLAN EMPIRE, CA Overall vacancy rates declined to 7.6%, 10 bp ND A d ps downw ward trend endin second quart 2012 at 7.4% down 120 bps ng ter %,lower than the previo quarter, and an impressive 140 basis points ous from ssecond quarter 2 2011. Rental rat have stabilize in almost all tes ed(bps) llower than this time last year. The continued de t T emand for big submaarkets and produ types. There is very little construction uctbox sp pace resulted in another quarter of positive net absorption, r underw and most of what is being d way f developed is buil ld-to-suit. Asfinishin second quart at just over 2.5 msf, which is on par with the ng ter 2 e the ecoonomy improve increasing dem es, mand will tip the scale, boosting e gprevio quarter. Thi represents an astounding twelve straight ous is rents a spurring con and nstruction.quarte of positive ab ers bsorption in the IE industrial ma arket. Leasingactivit improved significantly during second quarter to just under 7.9 ty s t 9 SEATT TLE, WA Seattle continued on it path towards recovery. e tsmsf, nearly double the 4.9 msf leased in the previous quarter and e Overa vacancy is dow 130 bps from year-end 2011 to 7.8%. The all wn mmarks the highest qua s arterly leasing ac ctivity since the first quarter of f 1.5 ms of positive ove sf erall absorption has nearly surpa assed the 1.7 ms sf2011. record in 2011 and leasing activity r ded remained strong with 3.4 msf g logged so far this year Solid leasing co d r. ontinues to attra investors to actORAN NGE COUNTY CA While the recovery of the Orange County r the Sea attle industrial m market, which ha been one of t most active as theindusttrial market was interrupted by the general market slowdown t investm ment markets in the region. The 2.1 msf in transactions nearly n eduring the second half of 2011, the fir half of 2012 demonstrated a g f rst d reache the 2.8 msf in all of 2011 and the average sale price of $83 ed n ereturn to levels more consistent with recent recover trend and was n ry s psf is u 43% over the $58-psf average last year. up e ethe six quarter of po xth ositive absorptio out of the las eight on stconsec cutive quarters. At mid-year, to overall abso otal orption stands at t LAS V EGAS, NV The overall vacancy decreased durin the second ng865,07 sf. Overall vacancy declined by 40 bps to 5.6% during second 70 b d quarte 2012 to 14.9% compared to 15.6% in first qu er %, uarter 2012. Evenquarte with all produ types recording declines in vacancy. Demand er uct v d with th jump in vacan last quarter, the current market has he ncyfor neewer class A warrehouse space ex xceeds Orange County’s return to the 15.0% vacancy rate w witnessed at t end of ned % we theavailab inventory and landlords are no longer offerin the generous ble d n ng second quarter 2011. Despite an uptic in activity in t market, d ck theconcessions that were available in pre e evious years. there h not been mu pressure on rent growth as asking rents has uch n have reemained flat sinc second quart 2010. Howev as the ce ter ver,SAN D DIEGO, CA Rec covery in the San Diego industrial market gained n d market continues to im t mprove and vaca space starts to become antmome entum in the seccond quarter wit leasing activity of 3.8 msf th y harder to come acros s, expect to see slightly higher a r e asking lease ratesresulti in positive ne absorption of 1.1 msf. This is the first time ing et f over th next few yea This market improvement w be dependent he ars. will tthat quarterly net absorption surpasse the one millio square foot ed on on conntinued job grow and an improved economy. wththreshhold since the fo ourth quarter of 2007. The coun ntywide averageasking rent remains st g table, but as quality spaces are becoming harder b rto find in certain mark areas, rents will begin to increase. The lack d ket U.S. REGIONAL O OVERALL VAC CANCY RATES Sof goo options for la od arge space requir rements in the Mid-to-North M 14.0 %Count markets will increase constru ty uction activity as tenants look to o 12.0 %build-tto-suit opportun nities to fit their size needs. 10.0 %SILICO VALLEY, CA Demand is healthy for Silicon Valley’s ON A 8.0 %industtrial market thro ough the first hal of 2012 as leas activity lf sing 6.0 %increaased 10.8% to 7.7 msf. The high- 7 -tech overall vac cancy rate tickedd 4.0 %down 240 bps to 12.5 from one year ago and healt warehouse 5% thy 10.8% 6.9% 9.4% 9.7% 9.9% 9.3% 2.0 %activit caused vacanc to drop 150 bps to 5.6%. Inve ty cy b estment activity 0.0 %acceleerated with 1.4 msf sold, bringing year-to-date to 2.4 msf. Tech m g o WESTERN M MIDWEST SOUTHWESTT NORTHEAST SOUTHHEAST NATIONAL REGION RREGION REGION REGION REGIO ONexpansion and require ements are expe ected to sustain activity in theforeca horizon. astCushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • U.S. – MIDWEST R EGION INDIA ANAPOLIS, IN T Indianapolis Industrial marke continued to The et make iimpressive gains in the second q s quarter as the ov verall vacancyCHICA AGO, IL Overall vacancy contin nues to improve and measured rate fe to 6.8% from 7.5% in the first quarter. With y ell t year-to-date9.4% a the end of sec at cond quarter, a decline of 110 bps from this tim d b me leasing activity outpaciing that of the p g previous four yea this trend of ars, flast ye Chicago’s do ear. ominance as an inland hub remained i positiv absorption an steadily declin vacancy rate is expected to ve nd ning es ounchallenged and new leasing activity grew significantly with mid-year w r contin ue. The continuing decline in va acancy has led to an increase in ototal o 18.2 msf, for a 30.5% year-ove of er-year increase Large lease e. investm ment sale activit and spurred a new wave of sp ty peculativetransaactions in excess of 200,000 sf have fueled the le s easing recovery, constr ruction. Ongoing interest in the favorable econo g omic climate ofaccounting for 7.3 msf, or 40.2% of tr ransactions signe mid-year. ed the Ind dianapolis marke continues to a et attract both inve estors andMost n notably, Home Depot, Inc. committed to lease a 1.6-msf D busine owners lookiing for best and most fiscally sou environmen ess und ntwareh house that will be built adjacent to its 657,600-sf rapid f to run their businesses. As net rents c continue to incrrease, and withdeploy yment facility bu in Joliet earlie this year. The Chicago marke uilt er e et no for reseeable let up in demand for la arge contiguous warehouse/has ma huge strides in absorbing th heavy supply of vacant space ade s he o distrib ution space, it is anticipated tha more speculat construction s at tive nwith a total of 6.1 msf of overall supply absorbed mid f d-year. is in th pipeline, and t he that it will likely break ground b y before the end of o 2012.CLEVE ELAND, OH Th Greater Cleveland industrial market ended hethe seecond quarter 20 with another decrease in va 012 acancy, adjusting MILWA WAUKEE, WI The Milwaukee are industrial mar e ea rket continued toto 8.3% as compared to 8.5% at the end of the first quarter 2012 and e d gain st trength in with t total absorption of 528,181sf in t second the9.6% a year ago. The main factor to th decrease in vacancy rate is m he v quarte making it the eighth consecut quarter of p er, tive positive growth.attribu utable to steady activity in the market and the li m imited amount of o Furthe positive indica er ator includes a second quarter v vacancy rate ofinventtory on market at this time. Sale activity will co a es ontinue to remai in 7.9% wwhich is down frrom 8.6% a year ago. Industrial d demand is on the estrong than leasing activity, as comp ger a panies that have been waiting on n rise wiith expectations to have anothe positive absor s er rption quarter in nthe sid delines are ready to make decisi y ions. However, they maybe late t the thiird quarter as w as a potentia for announcem well al ments ofto the party as vacanc rates continue to decline and the limited e cy e speculaative developme in the area. I ent Investment sales made samoun of quality pro nt oduct available will lead to a prem w mium in prices. impresssive gains with Centerpoint Pro operties Trust and ZilberAlthou demand exis for new cons ugh sts struction, activit will remain ty Proper Group both completing large portfolio acqu rty uisitions.slow bbecause of the cost. KANSA CITY, MO R AS Rents and sale pr rices in the Kans City market sasDETR ROIT, MI Activity within the indu y ustrial market re emains steady. have bbegun to stabilize after declining through the rec e cession. OverallThe overall vacancy ra closed the quarter at 14.7%, a decrease of ate , activity for the industr sector is pos y rial ggest challenge is sitive, but the big300 bp compared to one year ago. Economic condit ps E tions continue to supply the increasin demand in a m ying ng market where fin nancing for newimpro as the autom ove motive companies drive the mark with their ket constr ruction and deve elopment is still lagging. Two inddustrial specnew teechnology and innnovations, whic in turn fuels the expansion ch t buildin are under co ngs onstruction and w provide goo measure for will odand grrowth of other market area. Ba m attery maker A12 Systems plans 23 the heealth of the local market. A 821,663-sf class A di istribution facilit tyto add 400 jobs, while GE announced they plan to hir 300 d e re will be available in early 2013 and a se e eparate 155,000- speculative -sfemplooyees at their res search center. Brose North Am B merica purchasedd distrib ution project is expected to deliver this October. With aa 381,708-sf building this quarter and they plan to add 450 jobs and t d vacanc rate around 3 for institution grade spaces above 100,000 cy 3% nalinvest $60 million into the facility. Ge o eneral Motors also announced sf, thes buildings prov se vide much-needed options for u users looking tothat th will hire an additional 600 employees to bui the Cadillac hey a ild benefit from Kansas C t City’s attractive d distribution infra astructure. If theeATS. nationa economy can avoid dipping in another rece al nto essionary period d, Kansas City should co s ontinue to exper rience positive growth across its sCOLU UMBUS, OH Ov verall, the Colum mbus Industrial market showed m industr submarkets. rialincrea ased activity from fourth 2011 th m hrough second quarter 2012, bu q utmany sale prices were discounted for all cash buyers. One of the e rlargest transactions th occurred wit the last four quarters was t hat thin rthe sale of Centerpoin Business Park - CP#1 in Grov nt k veport. This 1.2-- U.S. REGIONAL D DIRECT WARE EHOUSE NET RENTmsf industrial building sold for $40.9 million or $35.12 psf. Total year m r- $7.0 00to-dat industrial build sales activit in 2012 is up compared to the te ding ty c e $6.0 00previo year. ous $5.0 00ST. LO OUIS, MO The St. Louis industrial market exper S rienced modestgrowt for the second quarter of 2012. Positive abso th d orption was $4.0 00record in both quar ded rters of the year resulting in yea r, ar-to-date total $3.0 00 $5.54 $4.95 $4.20 $3.84 $3.48 $4.30of 605 5,580 sf. The vacancy rate for th St. Louis mar he rket dropped to9.5%, 100 bps lower than a year before. The decreas in vacancy has t se s $2.0 00 WESTERN NO ORTHEAST SOUTHWESTT MIDWEST SOUTHHEAST NATIONALadded to the hope tha this will be the year that stead growth will at dy REGION R REGION REGION REGION REGIO ONoccur and alleviate fea that the econ ars nomy will fall back intorecess sion.Cushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • U.S. – SOUTHEAST REGION T NASH HVILLE, TN The industrial marke in Nashville continued to take et e small ssteps to recover The quarter ended with an o ry. overall vacancyATLA ANTA, GA Atlan nta’s industrial market continued to show signs m d rate of 10.2%. Net re f ental rates were $3.66 psf and overall netof impprovement throu ughout the second quarter of 20 Overall 012. absorpption totaled 276 6,878 sf. Amazo on.com is set to deliver two new wvacanc continued to decrease ending the second qua cy g arter at 9.8%. distrib ution buildings iin the Nashville market. Additio onally, GM isThis is a 150-bp decre s ease year-over-y year from the 11.3% rate upgrad its engine pr ding roduction capab bilities at their Sp pring Hill plant, areport for the seco quarter of 20 As vacancy rates continued ted ond 011. d move t that should crea up to 500 ne jobs this year Nissan is also ate ew r.to deccrease, the Atlan market poste 1.7 msf of po nta ed ositive overall making huge investments in Smyrna, c g constructing a billion dollarabsorpption which brought the year-to o-date total to 3.0 msf of lithium m-ion battery pla of 1.3 msf. Sa volume pick up in the ant ales kedoccupancy gains. Wit 9.1 msf of leas activity at mid-year, the pac th sing m ce second quarter with L d LNR Property Corporation’s purchase of aof leas activity has exceeded total activity reported during the sing a d 305,0000-sf building at 7355 Cockrill Bend Boulevard f $5.2 million forsame p period in 2011 by 29%. b and Cr ross Point Community Church acquiring 114,39 sf at 291-299 99MIAM FL. The Miami-Dade County overall vacancy rate at mid-year MI, o r Cowan Street for $5.0 million. n 0climbe half a percent ed tage point to 7.4 from 6.9% at mid-year 2011. 4% MEMP PHIS, TN The Me emphis economy fared well in t first half of theThe overall direct ask rental rate at mid-year dippe to $5.24 per king a ed 2012, o outpacing the na ation with a 1.6% increase in job growth, % brentab square foot from $5.45 psf at mid-year 2011, resulting in a ble f a compa ared to the natio growth of 1.3%. Activity in the Memphis onal n3.9% ddecrease. Miami- -Dade County will continue to be one of the w b industr market is str rial rengthening on s several fronts in ncluding leasing,most hhighly coveted markets amongst institutional ow m t wners and investm ment sales and n new construction. Direct vacan fell 50 bps ncyinvesto The forecas for the remain ors. st nder of 2012 rem mains cautiouslyy from 1 13.9% to 13.4%. A central U.S. loocation coupled with attractive doptimistic as rent grow and absorpt wth tion did not incr rease at the pace e rents a local incentives keeps Memp on the top of many tenants and phis s’anticip pated at the beginning of the yea ar. list. Deemand remains s strong, and for t first time sin 2008 the the nceORLA ANDO, FL The Orlando industrial market continued its steady O market is seeing specu t ulative constructtion.evolut tion in the secon quarter of 20 Overall vaca nd 012. ancy declined for LOUIS SVILLE, KY Desp considerable leasing activity industrial pite e y,the fift consecutive quarter – falling three-tenths of a percentage th q t vacanc increased in the second quart due in part to 182,000 sf of cy ter tpoint t 12.4% - as the market converted small pocke of new to ets negativ absorption co ve oupled with 232 2,600 sf of new c constructiondeman into continue positive absor nd ed rption. While mo robust job ore comple etions. Two sig gnificant build-to-suits for Amazoon.com havegrowt is needed for the market’s lon th ng-term recover the second ry, buoyed the industrial market in both t Louisville me d the etro andhalf of 2012 should ge f enerally extend and expand the progress of the a p southe Indiana mark ern kets. Financing f speculative in for ndustrial Expect rental rat to remain fla through 2012 and into 2013 asfirst. E tes at develo opment may be o the horizon i absorption con on if ntinues tothe ma arket continues to work off exccess inventory. increas Key manufac se. cturing growth h reduced the local has eJACKS SONVILLE, FL Future growth prospects for the Jacksonville F e unemp ployment level to at or below th national avera o he age.indust trial market conttinue to exceed current conditio The second ons. d HAMP PTON ROADS, VA Regional ind dustrial absorptio for the onquarte again failed to produce any no er o otable new dema and, leaving second quarter of 2012 has slowed sig d gnificantly. Year- -to-datevacanc unchanged at 11.1% and abso cy orption only moddestly positive. absorpption stands at 177,024 sf. Eleve out of 20 Ham en mpton RoadsThe coompletion of sevveral transaction pending at mid-year should ns subma arket have shown negative absor rption year-to-date. Vacancy has sprovid at least a part spark in the second half of 2012, causing de tial held stteady at close to 8.0% over the past few years. Lease rates are ovacanc to resume its downward traje cy ectory; however greater r, declini ng slowly, as are industrial build prices. Finan e ding ncing is the oneeconoomic gains – and perhaps politica clarity - are ne al eeded to truly bright spot, with rates for industrial purchases under 5% for qualifying s vate the market’s recovery. Ask rents have proven largelyreactiv king buyers Since 2008, the industrial sales market in Ham s. s mpton Roads has sstagna over the last twelve months and should remain so for the ant strugglled. In 2008 ther were over 60 properties sold at a median re 0 dremainnder of 2012. price o $80 psf. This iis compared to less than ten pro of operties sold inCHAR RLOTTE, NC Le easing activity to otaled 1.9 msf at mid-year with 2012 s far at a media price of $50 p so an psf.overal vacancy rate of 16.9%. With rising energy cost the region ll o ts, RICHM MOND, VA Leasing activity slow to 894,698 sf year-to-date wedshould see increased demand for qual distribution and d d lity from 2 msf through the second quar of 2011. De 2.4 rter espite the roughmanuf facturing facilities in an attempt to shorten supp chains and t ply quarte the industrial market is slowly getting stronger. Tenants are er,locate closer to the end user. The firs speculative de e st evelopment in startin g to renew lease for longer ter es rms, opting for f years instead five dfive ye occurred th quarter with Childress Klein Properties ears his of one or three-year leases in some cases. Brokers also report an ebreaki ground on Ridge C reek IV, a 270,000-sf building which is ing R uptick in interest from contracting and construction f m d firms, a welcome e25% p pre-leased to Averitt Express. Ke Corporation also eith sign aft almost four years of contrac fter ction in that indu ustry. Netannou unced a built-to-s project for Britax, which wi consolidate suit ill absorpption was 375,35 sf through the second quarte up from 56 er,their ooperations from three locations into one 500,00 00-sf facility. We e 193,85 sf through the second quarte of 2011. That drove vacancy 50 e erexpect to see addition build-to-suits announced in the second half of t nal s t o down t 10.5% from 1 to 11.1% in the sec cond quarter of 2 2011.2012 a cap rates com as mpress, pushing values of moder distribution v rn Absorp ption should rem in positive territory for the rest of 2012. main efacilitie closer to replacement value. es Amazo is on schedule to open a mas on ssive 1.0-msf dist tribution facility in Cheesterfield by the end of 2012.Cushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • U.S. – NORTHEAST REGION T The m master plan includ a high-densit 2.1-msf mixe des ty, ed-use district with a central green ar and 692,000 echo-tech pa focused on rea 0-sf arkNEW JERSEY – CENT TRAL & NORTH HERN New Jers sey’s industrial light in ndustrial use. As the major corp porations such as Chevron and smarke saw modest im et mprovements, with overall vacan falling 80 bps w ncy Shell ccontinue to increease their play in Marcellus and Utica shale, nto a cuurrent 9.2% and direct average asking rents risin 1.4% to $5.70 d ng 0 deman for warehous and flex industrial space conti nd se inues to rise.psf. D Despite several substantial transa s actions, leasing saw a 17.3% s Thoug the vacancy ra did creep up slightly year-ov gh ate p ver-year byyear-oover-year decrea ase. Including re enewals, 30 ware ehouse/ approx ximately 100 bps demand for la s, arge blocks of cla A warehouse ass edistrib bution transactio over 100,000 sf have occurr throughout ons 0 red house space is expecte to increase. Y ed Year-to-date use sales totaled erthe fir half of 2012, with 17 of these transactions taking place during rst w e 589,52 sf, while inves 24 stment sales wer approximately 1.5 msf at the rethe seecond quarter. Market fundamen M ntals for the New Jersey w close o second quarte representing a 53% increase in user sales and of er,industtrial market shou continue to slowly improve through the uld s 85% in ncrease in investtments sales ove the same perio 2011. Leasing er od gsecond half of 2012. Leasing activity should remain strong through th d L he activity for the first ha of 2012 totale 916,401 sf, do y alf ed own 37.1% from mreminder of the year although it will not likely approa 2011 figures. a n ach 2011. Direct asking re ental rates saw a 6.6% increase yyear-over-yearVacancy is expected to continue fallin and asking rental rates will ng, to $7.5 psf triple net.. 57rise as a result of the increasing dema for existing product. s and p BALTI MORE, MD In t second quart of 2012, vacancies declined the terLONG ISLAND NY The second quar of 2012 clos with overall G T rter sed in both flex and wareh h house/distributio product in the Baltimore onleasing transactions to g otaling 980,212 sf and overall sa transactions s ales industr market. Its o rial overall vacancy r rate, at 9.6%, de ecreased 100 bps stotalin 1.4 msf, year-t ng to-date. The ovverall vacancy ra is at 12.5% ate from yyear-end 2011. T market remained attractive to investors Theand th overall weight average rent rate is $6.95 psf. Following he ted tal with 2 .1 msf of industr product sold in portfolio sal to buyers, rial d lessuit of first quarter’s performance, the second quarte remained wea f p er ak such a s IndCor Proper rties, Inc. and Cabot Properties, Inc. Thein leas activity but strong in user sa activity. As uncertainty sing s ales u industr market is ex rial xpected to see m modest declines in its vacancyremain a widespread theme, parallel market conditio that is, ns ons, rate by year-end 2012 Despite tenant occupancies, su as Life y 2. t uchslightly declining vacan rates and slig y ncy ghtly increasing asking rents, are e Scienc es Logistics, LLC at 8901 Snowd River Parkw vacancy rate C den way, eexpect to endure fo the second ha of 2012. ted or alf reducttions will be limiited by conserva ative tenant activ and vityPHILA ADELPHIA, PA The Philadelphia industrial market’s overall T constrruction deliveries anticipated in t second half of 2012. thevacanc rate declined in the second quarter of 2012 to 6.4%, a 230- cy t BOSTO MA While the quarter-ove ON, er-quarter overa vacancy rate allbp dro since mid-yea 2009 when th vacancy reach 8.7%. Mid- op ar he hed for the Greater Bosto industrial mar e on rket increased 150 bps, leasingyear 22012 absorption climbed further into the positiv with 1.9 msf of r ve o activity more than dou y ubled the amoun reported duri the first nt ingpositiv absorption. The current healt of the industr market’s ve T th rial quarte with 2.7 msf le er eased year-to-da This activity however, did ate. y,vacanc and absorptio can be attribu cy on uted to the increease in new not tra anslate into posiitive market funddamentals as ma companies anyleasing activity over th past two year The Philadelp industrial g he rs. phia contin ued to shed spa during the qu ace uarter. The over vacancy rate rallmarke posted a stron quarter of lea et ng asing activity with 1.75 msf of remain relatively un ned nchanged from o year ago at 1 one 18.8% with 2.2new activity bringing the year-to-date total up to 3.2 msf. A good t e msf of negative overall absorption yea f ar-to-date. Askin rents ngportio of this activity can be attribut to the latest uptick in flex on y ted witnes ssed a 2.3% decline year-over-ye and remained stable during earleases experienced in the market. Do Chemical sign an 800,000-s ow ned sf the sec cond quarter at $5.91 psf NNN overall. The sh N, harpest decline inflex lease at Pfizer’s co orporate campus in Collegeville, PA. asking rents took place in the manufac cturing sector w which saw aPA I-8 81/I-78 DISTRIBU UTION CORRIDOR The overa vacancy of all decline of over 8.7% s e since this time la year. ast9.1% f is the lowest vacancy for the market since th second for t e hequarte of 2006. How er wever, the overal vacancy rate is expected to ll s U.S. O OVERALL OC CCUPIER ACTI IVITYincrea over the nex six months. Th ase xt here is currently 3.3 msf of y 5 500.0specul lative construction scheduled to deliver by year o r-end 2012,including the 1.2-msf facility at 2785C f Commerce Boule evard in Lehigh 4 400.0Valley, the 972,000-sf building at 40 Logistics Drive in Central PA, and n 3 300.0 msfthe 7000,000-sf spec pr roject at 724 All Road also in Central PA. len 2 200.0With only 3.4 msf of speculative cons s struction added from 2009-2012 f 2, 351.53 295.40 345.97 417.05 199.18 75.92 62.14 90.82 95.81 47.37 1 100.0the am mount expected to deliver over the next six mo onths will nearlyexceed that. Not only will this add ne class A space to the market y ew e 0.0 2008 2009 2010 2011 2012 YTD Dfor ten nants, but it also demonstrates a return of conf o fidence bydeveloopers. This will also help drive average asking re a a ental rates back LEASING A ACTIVITY USER SALES AC CTIVITYup due to the influx of prime space av e o vailable for lease e.PITTSBURGH, PA The Regional Indus strial Development Corporation nannou unced plans for Almono, the 178 A 8-acre former J & L Steel mill sit tein Pittsburgh’s Oaklan submarket. Th brownfield re nd he edevelopmentsite w purchased by Almono Partne a collection of four was y ers,Pittsbuurgh-based foundations, in 2001 for $10 million.Cushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • U.S. – SOUTHWES T REGION WES STERN CANA ADADALLA AS/FORT WOR RTH, TX As the job market con ntinues to bolsteer Deman was buoyant across western Canadian industrial markets ndretail s spending by con nsumers, wareho ouse distribution users continued n during the second qua g arter, and while it may ease in CCalgary if oiltheir mmomentum thro ough mid-year. User sales in com U mbination with prices soften, many of the mega proje underway ha long time f ects aveleasing activity led to rising absorption levels with ove g n erall net horizo and will ensu continued ac ons ure ctivity. Calgary h become the hasabsorp ption totaling 4.1 msf. Major oc ccupiers of space included e destina ation of choice f some large b distributors, which is fueling for box , gSouthw wire, Home Depot, Kellogg, Sce entsy, Automotive Parts deman for industrial space in this hot market. nd tDistribbution Internatioonal, Mobis and Exel. The indust trial market is Manufa acturing activity generally remains weak across the Vancouverexpect to improve during the next two years. Acc ted cording to industr landscape. A shortage of dev rial velopable land r remains a hugeMoody Analytics, po y’s opulation growth in DFW is expected to rise h issue in this market, an high rental ra and uncerta n nd ates ainty over future e1.7% in 2012 and 2013 while nonfarm job growth is expected to rise m e occupa ancy costs have created a buoya market for strata (condo) ant2.2% d during 2012 and 2.5% during 2013. Expect retail sales and in which continued into the second quarter. sales, w dturn, wwarehouse distr ribution demand to increase as population and pjob growth continue to strengthen. t VANC COUVER, BC Va ancouver saw sttrong demand in the second quarte generating ov 780,000 sf of absorption. De er, ver f evelopers wereHOUS STON, TX The industrial marke continued to improve et active, bringing 650,00 sf of new supp to market du 00 ply uring thesignific cantly over last year, driven by the energy indus y t stry, an overall quarte Landlords are looking at tena covenants with greater er. e antimpro oving economy, and strong trade activities throu the port and a e ugh scrutin and tenants a investing mo time in the d ny, are ore due-diligencethe airrports. Overall vacancy rates ac cross all classes dropped by proces which is lengt ss, thening transact tion time. High la costs and a andalmost 200 bps to 7.6% at the end of the second quar t rter. genera lack of produc for sale, as we as a strong de al ct ell esire to controlWareh house vacancy rates fell to 7.8% and quality ma r %, anufacturing future costs, are drivin the strata ma ng arket. Speculative development is espace remained at a premium with on 4.1% vacant. With a strong p nly constrrained by excess land costs. A sive Activity in the Va ancouver marketjob forecast through the end of 2012, especially in ke areas such as t , ey will be influenced by r e resource prices i the longer run The overall in n.manuf facturing and eneergy-related industries, new con nstruction will vacanc held flat at 4.3 cy 3%likely ccontinue to incr rease. Already, 2.1 msf was com 2 mpleted by mid-year 22012, more than all the completi ions in 2011, and another 2.1 d CALG GARY, AB Calgar is the most ac ry ctive market in t country themsf wwere under const truction. relative to inventory s e size, and althoug oil prices are softening, gh ongoin long-term pro ng ojects will ensur this market re re emainsPHOE ENIX, AZ Significant leasing activ in 2011 tran vity nslated into 2.5 expans sionary for the fforeseeable future. Speculative ddevelopmentmsf of absorption year-to-date, on pa to exceed 5.0 msf for the f ace 0 activity in Calgary is th strongest in t country, tho y he the ough demand,year. Leasing remaine healthy with 5.2 msf posted through the first ed 5 t t which is outpacing sup pply, drove the vvacancy rate dow to 4.3% from wn mhalf of 2012. Overall vacancy declined to 12.2%, retu f d urning to 2007 4.9% d during the secon quarter. The o sector is the dominant nd oillevels. The lack of ava ailable big-box sp pace and only on speculative ne driver,, with wood man nufacturing, food production an distribution, d nddeveloopment underwa led to a secon speculative development ay nd and geeneral distributio also experien on ncing strong growwth.being announced, a 59 92,000-sf distribuution center in Southwest SPhoen to break grou in Septembe 2012. nix und er EDMO ONTON, AB Str rong expansiona demand in Ed ary dmonton cooled d somew what during the second quarter, which may be m more related toDENV VER, CO Denver’s industrial ma arket has seen ni consecutive ine the sum mmer slowdow n than lower oil prices. Because of its proximity l e yquarte of positive ab ers bsorption, leadin to a 190-bp decline in the ng d to For McMurray, the market acts as a staging area fo massive oil- rt e s oroveral vacancy rate si ll ince peaking at 9.0% in first quar 2009. At 9 rter sands p projects, which generally have bbusiness time spa of 20 years. ansthe clo of second qu ose uarter, vacancy stood at 7.1% ov s verall – the Needle to say, the o ess outlook for indus strial demand in Alberta’s capita allowest rate recorded since fourth qua t arter 2008. Ren remain below nts w city is closely tied to t health of the energy industry the e y.pre-re ecession levels, but they have tre b ended upward fo two orconsec cutive years and ended second quarter at $5.70 psf overall. d q 0 CAN NADIAN OVER RALL VACAN CY RATESIndusttrial market fund damentals in met Denver shou remain tro uldhealthy in coming qua arters. We expec leasing and sa volumes will ct ales 12.0 0%hold s steady at present levels and resu in further tigh t ult htening and 10.0 0%higher rental rates. r 8.0 0%SALT LAKE CITY, UT The overall vacancy rate has remained T r 6.0 0%relativ flat, now sitt at 9.1% and the market has about a two- vely ting 4.0 0%year supply of invento in the 9.6 ms total of vacant space which is ory sf t 4.3% 4.3% 4.9% 6.1% 6.2% 7.1% 8.3% 8.5% 2.0 0%typical in this part of the market cycle Overall leasing and sales t e. gactivit is up 500,000 sf, or 21% year over year, sugge ty esting that the 0.0 0% Vancouver Calgar St. Johns Toronto ry o Ottawa Moncton Montreal Halifaxmarke is reaching comparable activity levels of 2006 and 2007. Lease et y erates hhave shown little change over th same period last year even e hethough the activity lev have increas significantly. h vels sedCushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • CENT TRAL CANAD DA ATLA ANTIC CANA ADAToron and Montrea continue to ex nto al xperience moderate Modes U.S. economic growth, a strong dollar and re st c eductions inexpansionary demand strength, with little upward mo ovement in renta al public sector capital sp pending will mea subdued grow in Atlantic an wthrates, with the except tion of some big-box tenants wh must pay the ho Canad a in the near ter particularly g rm, given real GDP growth in theprice f new design-b for build developmeents. Interestingly, rental rates in n region is expected to fall at or below 2.0%. The $25-b billion federalcentra Canadian mark tend to be significantly lower than western al kets n governnment shipbuildiing contract won by Irving Shipb n building will fuelor easstern Canadian markets, in part because these markets are muc m m ch job and economic grow in Halifax and Nova Scotia, but it is still at d wthlarger and it takes a huge change in momentum to im m mpact overall the init planning stag and any real impact on regio economies tial ges, onalavailab bility and influence rate pressure e. is not likely to be felt until 2013 and b beyond.MONT TREAL, QB The Montreal mark continues to see e ket Newfo oundland & Labr rador continues to be the region growth n’sexpansionary demand, with 960,000 sf of absorption generated during s g leader,, although some reduction in oil output from of e ffshore oilrigs isthe seecond quarter. Continued intere in smaller and medium block C est d k expect and this may temper near-te pent-up dem ted y erm mand for officespace drove demand in the second qu i uarter, though so ome larger and ind dustrial space. T That said, the Ca anada-Newfound dland anddistrib bution tenants coompleted transa actions earlier in the year. Labrad Offshore Pet dor troleum Board a approved plans by an ExxonAlthou there is som concern over weakening glob economic ugh me r bal Mobil Corp-led group to move forward the Hebron o field, the oilcondit tions and a slow U.S. econom positive demand momentum wing my, provin nce’s fourth offsh hore oil project, which is expect to drive tedshould occur into the final quarter of 2012 and into 2013. The overall d 2 signific cant increased gr rowth. Because of the unusual t technologyvacanc rate in Montr was flat at 8.3%, with new su cy real upply of require to avoid dam ed mage from floatin icebergs, the c ng cost of theapprox ximately 206,000 sf in the first half of the year. h projec is estimated at between $5 an $7 billion. The Hebron ct t nd e projec alone, containing an estimated 700 million bar ct d rrels ofOTTA AWA, ON Otta is Canada’s fourth largest ci and houses a awa ity recove erable resources is expected to bring about $20 billion in s, omodes industrial mar st rket that focuses on the distribu s ution sector. revenu during the pr ue roject’s 25-year l lifespan and crea some 4,000 ateDema remains wea within the market, particularly amidst an and ak y jobs on peak produc nce ction of 170,000 barrels per day is reached in 0 yenviroonment of gover rnment cutbacks The governme is a dominant s. ent t 2018.busine driver and a major contribut to the marke economic ess tor et’sgrowt Very recently the federal gov th. y, vernment has shhown interest in Additioonally, once give the green ligh the $6.2-billio Muskrat Falls en ht, onleasing a number of sm to medium size industrial bl g mall locks, providing hydroe electric project v venture will see Emera Inc. construct a $1.2- esome indication that it could become a demand playe in the near- t er billion undersea cable between Newfo oundland and Ca Breton. The ape eterm f future. Ottawa’s vacancy rose to 6.2% in the sec s o cond quarter of link wiill bring electricity from the Chuurchill River in L Labrador to2012, climbing from 5.8% in the previous quarter. market in New England and Eastern Canada. tsTORO ONTO, ON Moderate demand momentum was the story of sNorth America’s third largest industr market in the first half of h d rial e CAN ADIAN VACA ANCY VS. SUP PPLY2012. The Toronto market continues to see consolid m s dations of 2 25 10.0%multip ple-location oper rations, and grow business co wing onfidence is 2 20 8.0%leading to modest exp g pansionary dema and. 15 6.0% msfThe GGTA West industrial market con ntinues to be driven by big-boxdistrib bution requireme ents. Options fo blocks in exce of 300,000 sf or ess f, 10 4.0%with 228-foot or higher clear height, ca be counted on one hand. an o 5 2.0%Recen transactions in nt nclude Lowe’s le ease in Milton, which will see a wnew 6 630,000-sf facility rise by Februar 2013, with the capacity to y ry 0 0.0%expand to 835,000 sf. 2005 2006 2007 2008 20 009 2010 2011 MY12 NEW SUPPLY VACANC RATE CYThe G GTA East market is active, but la t acks the transact tion depth of itswestern counterpart. Tenants here ar less traditiona in nature, re altendin to be more fo ng ocused on suppo orting local comm munities. While HALIF FAX, NS Deman remained rela nd atively weak acro Halifax’s ossthe ea is active and tours are underw tenants req ast t way, quire greater due distrib ution-based indu ustrial market in the first half of 2012, though n fdiligen and transactions are tough to close. nce t the fedderal governmen shipbuilding contract secures a bright future nt for the economy and w ultimately drive employmen and demand e will ntLand r ommodity across the GTA, as buyers try to remains a hot co for inddustrial space. So ome upward ren rate pressur occurred, but ntal repositio themselves within a recovering construction cycle and on w this reelated more to th expectation o improved bus he of siness activityensure they have sizea sites to mee long-term dem e able et mand than re ecent changes in underlying dem n mand fundament tals. Once therequir rements in a marrket that is curre ently devoid of larger options. l final co ontract is signed between Irving Oil and the Fed d g deral Gover rnment, work initiatives on the r related projects can begin. Vacanc rates rose ma cy arginally to 8.5% from 8.4% last quarter. %Cushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • MONCTON, NEW BRUNSWICK Moncton is locate at the B M ed Very liimited speculativ development activity has also kept supply ve ogeograaphic center of the Maritime Pro t ovinces and is th transportation he levels t tight and, as devvelopers are taki note of grow demand, thi ing wing ishub of the region. Dri f tion companies, Moncton’s iven by distribut is resu ulting in expande construction activity. The aw ed wakening ofentrep preneurial marke experienced reasonable dema strength et r and investmment activity is r reflected in the o over 1.1 msf sol through the ldduring the first half of 2012, winning new business ent g f n trants in some year.cases, at the expense of other market in the region. Optimism abou ts ut The se dustrial market i Mexico, the city of econd largest ind inthe ge eneral economy and continued moderate growth in demand for m r Monte errey, continued reactivating its supply pipeline, consolidating its sindust trial space should result in an inc d crease in development activity large c class A offer. Mo onterrey’s six ma metropolita submarkets ajor anthroug the balance of 2012. Vacancy rates fell to 7.1% from 8.9% gh o y contin ued expanding a experienced increased activ Following its and d vity. sover t quarter. the locatio and labor ava on ailability advantag Apodaca submarket still ges,ST. JO OHN’S NEWFOUNDLAND Wh oil prices are softening hile accoun for 40% of th total market size. In metro M nts he Monterrey manysomew what, the St. Joh market is dr hn’s riven by very spe ecific energy large m manufacturing op perations were c completed, for e exampleprojec which have a significantly lon cts, nger run-time hoorizon. Demand Carrie 420,000 sf at Finsa Santa Cat er’s t tarina park.for off and industria space remains relatively stron particularly in fice al s ng, n North ern Mexico is in ncreasingly active but Central M e, Mexico continues slight o approved Exxo plans to deve of on elop Hebron by the Canada- outperrforming all othe regions and is subject to the largest activity. er sNewfo oundland Labrad Offshore Pet dor troleum Board (CNLOPB). ( The Ba region, inclu ajio uding the states of Guanajuato, Q Queretaro andInvestment in the regi continues to mean solid growth and tight ion o San Lu Potosí, reflect the accelerate integration of industrial uis ts ed femplo oyment condition With the He ns. ebron project un nderway and the hinterllands, for examp the aerospac industry in Qu ple ce ueretaro and the e$6.2-bbillion Muskrat Falls hydroelectric project in the engineering and F e d autom otive corridor G Guanajuato-San Luis Potosí. Also the second o,procurement process, healthy provinc GDP growth is very likely. In cial h largest city in Mexico, Guadalajara, wi a prominent electronics t ith2012, the market rem mained tight at on 4.9% vacancy nly y. hinterlland, is taking pa in this proces as exemplifie by Intel’s art ss, edCAN NADIAN VACA ANCY VS. NET ABSORPTIO T ON 140,00 sf expansion a Parque Indust 00 at trial Tecnológico II. o 24 8.0% 18 6.0% MEXI ICO CITY REN NTAL VS. VAC CANCY RATE S 12 4.0% $6.00 20.0% msf $5.50 16.0% 6 2.0% $5.00 12.0% psf/yr 0 0.0% $4.50 8.0% -6 -2.0% 2005 2006 2007 2008 20 6 009 2010 2011 MY12 $4.00 4.0% NET AB BSORPTION VACAN NCY RATE $3.50 0.0% 2009 9 2010 2011 Q2 2012 2MEXI CO DIRECT GR ROSS RENTAL RA ATE VACA ANCY RATEThe MMexican industria sector continu moving firmly on its path to al uedrecoveery. The Mexica industrial sector continued to reflect how an oincrea asingly linked it is to the U.S. eco s onomy and, as su its recovery uch, y MEXI ICO CITY LEA ASINGhas be more rapid than other areas of the economy. An upturn in een t s nexpor and rise in inv rts vestment have turned on deman which has nd, 8 8.0sustain a good perfo ned ormance during the year. 6 6.0Within Mexico City’s industrial real estate submarket an upturn in n e ts, msfdomes consumption and regional tr stic rade are the dettermining factors 4 4.0driving the strength of demand recove Notably, this is happening g ery.under a supply environment where th development of new space he 2 2.0 2.9 6.3 1.6was lim mited and domin nated in recent years by build to suit activity. In y o n 7 0 0.0the fir half of 2012, vacancy rates de rst v ecreased across most 2009 2010 2011 2012 YTDsubma arkets, with the overall rate decreasing to 6.6%; Cuautitlán ;remain the most dy ned ynamic industrial location in Mex City, with l xico LEASING AC CTIVITY37% o total leasing ac of ctivity taking plac at its diverse stock. ceOutstaanding transactio like Unileve 700,100-sf le ons, er’s ease at Mexico arket, illustrate how the industrial real estateCity’s Tultitlán subma hmarke is in growing need of new sup alternatives to cope with a et n pplydeman already amou nd unting to 90% of last year’s total. fCushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • TAT SUNIT TED STATES Direct Overall YTD YTD YTD YTD Direct Askin ngMARKET NAME Total Vacancy Vacancy Leasing User Underr New Overall Net Rental Rat tes I nventory Rate Rate Activity Sales Construction n Construction Net Absorption MF WD WGreater L Angeles, CA Los 8,710 1,068,818 4.3% 4.6% 1 8,872,249 9,359 4,459 2,327,316 626,964 1,288,544 $5.62 $6.2 29Inland Em mpire, CA 415,478 8,185 7.4% 7.6% 1 2,876,110 1,509 9,124 6,642,648 3,588,134 5,115,073 $4.77 $4.0 06Orange C County CA 275,686 6,012 5.5% 5.6% 6,324,863 1,534 4,343 26,000 0 865,070 $7.59 $6.7 74San Diego CA o, 194,225 5,956 9.2% 9.7% 7,067,418 98 1,328 284,440 0 1,485,767 $7.32 $8.1 6Silicon Va alley, CA 242,237 7,792 9.8% 10.2% 7,706,992 2,159 1,742 198,000 33,000 2,192,852 $8.70 71 $5.7Oakland, CA 139,865 5,199 7.4% 7.9% 2,745,667 857 7,800 0 0 655,260 $5.94 $4.6 60Portland, OR 170,046 6,243 7.2% 7.4% 2,031,090 1,222 2,893 581,477 0 2,235,455 $4.80 $5.1 6Seattle, W * WA 129,954 4,794 7.2% 7.8% 3,414,214 228 8,833 0 0 1,518,911 $4.48 $4.9 92Las Vegas NV * s, 103,009 9,762 14.9% 14.9% 2,049,220 728 8,797 0 0 (221,401) $6.36 $5.2 28WESTER REGION RN 2,739,322 ,653 6.6% 6.9% 63, ,087,823 13,264,636 10,059,881 4,248,098 15,135,531 $6.27 $5.5 4Chicago, IL 1,148,952 2,426 8.9% 9.4% 1 8,171,803 4,259 9,541 3,683,246 2,134,907 6,078,532 $3.71 $3.9 99Cleveland OH * d, 427,772 2,935 8.2% 8.3% 1,087,228 2,850 0,957 350,500 241,000 1,929,749 $0.00 $3.2 28Columbu s, OH * 244,259 9,788 9.4% 9.5% 2,974,095 **** * **** **** 4,256,778 $4.45 $4.4 40Detroit, MI * 332,973 3,069 14.3% 14.7% **** **** 407,910 0 9,057,250 $4.15 $4.1 0St. Louis, MO * 222,732 2,503 9.4% 9.5% 3,227,329 574 4,322 0 0 605,580 $3.85 $3.7 71Kansas C City, MO * 213,632 2,075 6.9% 7.2% 2,274,441 760 0,499 1,698,637 350,000 785,438 $6.19 $4.1 5Indianapo IN * olis, 213,303 3,774 6.3% 6.8% 3,856,259 750 0,613 1,858,722 245,400 3,390,678 $2.03 $3.0 01Milwauke WI * ee, 193,382 2,236 7.9% 7.9% 1,209,437 2,54 1,214 922,296 552,056 1,037,593 $3.96 $3.8 86MIDWE REGION EST 2,997,008 ,806 9.1% 9.4% 32, ,800,592 11,737,146 8,921,311 3,523,363 27,141,598 $3.98 $3.8 4Atlanta, G GA 516,011 1,066 9.7% 9.8% 9,069,777 1,820 0,742 2,325,047 0 3,017,391 $3.29 $3.3 7Miami, FL L 160,875 5,806 7.4% 7.4% 1,433,878 4 1,300 189,906 0 510,664 $4.23 $5.2 21Orlando, FL 105,579 9,186 12.1% 12.4% 2,444,058 38 1,224 237,960 76,158 633,394 $3.88 $4.2 20Jacksonville, FL 100,687 7,468 11.0% 11.1% 609,026 499 9,490 0 0 (101,596) $3.01 $3.4 48Charlotte NC * e, 202,404 4,957 16.3% 16.9% 1,915,341 **** 1,291,169 638,113 394,310 $2.56 $3.0 08Nashville, TN * 188,536 6,962 9.7% 10.2% 1,936,194 0,418 690 1,254,000 15,720 769,777 $0.00 $3.2 25Memphis, TN * , 173,600 0,690 13.4% 14.2% 2,903,019 1,006 6,000 0 879,000 (970,593) $0.00 $2.5 50Louisville, KY * 127,946 6,963 7.6% 7.6% 1,325,221 122 2,040 1,130,000 237,600 70,307 $3.25 $3.3 4Hampton Roads, VA * 118,704 4,192 7.2% 7.6% 1,514,811 **** 251,000 40,908 177,024 $4.82 $4.7 73Richmond VA* d, 106,584 4,380 10.3% 10.5% 894,698 **** 2,324,335 28,500 375,356 $3.61 $4.4 40SOUTHEAST REGION 1,800,931 ,670 10.5% 10.8% 24, ,046,023 4,561,214 9,003,417 1,915,999 4,876,034 $3.08 $3.4 8New Jerse - Central ey 327,076 6,264 8.0% 8.6% 6,635,679 796 6,107 864,000 558,613 2,789,636 $4.31 $4.2 21New Jerse - Northern ey 284,938 8,891 9.3% 9.9% 3,460,048 749 9,978 567,639 285,000 (1,817,530) $4.85 $5.8 83Long Islan NY nd, 126,195 5,121 11.9% 12.5% 980,212 1,245 5,516 196,000 400,000 (853,249) $7.33 $6.8 82PA I-81/I- Distribution Corridor -78 215,270 0,850 8.6% 9.1% 4,250,909 0 6,044,673 108,800 1,997,175 $3.50 $3.8 82Philadelp hia, PA 277,464 4,546 6.0% 6.4% 3,229,224 0,748 510 1,348,000 0 1,903,090 $3.90 $4.3 5Pittsburgh PA * h, 151,494 4,024 8.8% 9.0% 916,401 589 9,524 65,378 196,449 527,784 $3.91 50 $5.5Baltimore MD e, 194,095 5,511 9.3% 9.6% 2,081,204 39 1,490 1,292,000 0 1,295,795 $0.00 $4.4 41Boston, M MA 160,649 9,137 17.4% 18.8% 2,767,119 332 2,546 182,335 262,800 (2,213,810) $5.33 $5.2 22NORTH HEAST REGION 1,737,184 ,344 9.3% 9.9% 24, ,320,796 4,615,909 10,560,025 1,811,662 3,628,891 $4.70 $4.9 5Dallas/Fo Worth, TX ort 514,412 2,336 10.8% 11.2% 9,766,869 2,246 6,878 2,955,146 138,000 4,075,023 $3.30 $3.4 47Houston, TX 353,750 0,019 7.3% 7.6% 9,130,399 2,244 4,970 2,087,404 2,068,930 700,914 $4.62 $4.2 24Phoenix, AZ 263,298 8,403 11.7% 12.2% 5,233,062 1,537 7,677 237,992 453,462 2,528,122 $5.64 $5.7 76Denver, C CO 228,018 8,145 6.6% 7.1% 6,231,094 1,358 8,469 783,234 60,000 1,913,579 $4.30 $4.4 47Salt Lake City, UT * 105,836 6,515 9.1% 9.1% 2,188,336 520 0,924 674,558 1,328,088 30,914 $3.80 $4.4 40SOUTH HWEST REGION 1,465,315, ,418 9.3% 9.7% 32,5 549,760 7,908,918 6,738,334 4,048,480 9,248,552 $4.67 $4.20U.S. TO OTAL- ALL MARKE TS 12,864,807, ,198 8.9% 9.3% 199,175,780 2,037 47,372 49,163,417 17,516,407 65,099,658 $4.50 $4.30U.S. TO OTAL- C&W MARK KETS 8,118,973, ,884 8.3% 8.7% 152 2,762,852 33,029 9,685 34,672,412 11,684,639 39,652,440 $4.96 $4.67NOTE: On markets with over 100M SF of industrial inventory is included in this analysis. The U.S total includes all markets. * Alliance Markets nly M eRental rat reflect weighted averag asking $psf/year tes ge MF=Manufacturing W/D = Warehouse/Dist tributionCushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental orNew YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals.www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,
    • CAN NADA Overall YTD YTD YTD Direct Askin ng MARKET Total Vacancy Leasing Under New Overall Rental Rate es Inventory Rate Activity Construction Construction Net Absorption Net TMI * uver Vancou 189 ,885,411 4.3% 7 ,765,639 1,918,814 1 834,886 1,438,645 $7.59 $3.2 1 Calgary y 110 ,368,358 4.3% 3 ,043,277 1,479,502 1 1,190,641 1,525,949 $8.18 6 $3.26 Toront to 838 ,898,965 6.1% 8 ,060,708 3,253,898 3 1,438,134 (155,454) $4.90 $3.30 0 Ottawa a 21 ,530,682 6.2% 337,184 43,000 0 45,965 $8.27 $4.70 0 Montre eal 282 ,561,111 8.3% N/A 435,000 206,500 2,405,886 $5.00 $3.10 0 Frederi icton 432,675 8.4% N/A 0 0 2,702 $7.38 $4.44 4 Saint Jo ohn 409,781 12.5% N/A 0 0 (13,365) $6.65 $3.32 2 Moncto on 2 ,957,739 7.1% N/A 0 0 52,926 $5.83 $2.90 0 Halifax 7 ,398,544 8.5% N/A 0 0 (114,900) $7.11 $4.29 9 St. John ns 2 ,990,265 4.9% N/A 192,990 45,356 61,025 $9.12 $2.44 4 CANADA TOTAL 1,457,4 433,531 6.2% 19,2 206,808 7,323,204 3,715,517 3 5,249,379 $5.59 $3.27 7 * TAXE MAINTENANCE AND INSURANCE ES, MEX XICO Overall YTD YTD YTD Direct Askin ng MARKET Total Vacancy Leasing User Under New Net Rental Rate es Inventory Rate Activity Sales Construction Construction All Classe es Mexico City o 132,004,941 6.6% 6,345,046 558,088 2,766,400 808,460 $5.96 6 Monter rrey 113,331,862 8.4% 3,524,950 112,510 N/A N/A $5.46 6 Tijuana a 63,536,875 6.0% 1,375,420 107,790 N/A N/A $5.57 7 ICO (selected m MEXI markets) 308,873,678 7.1% 11,245,416 778,388 2,766,400 808,460 $5.69 9NORT AMERICA INDUSTRIA CONTACTS TH AN ALThe C& Industrial Platf &W form provides adv visory and agency services to occupi s iers, developers an investors of ind nd dustrial and distrib bution premises accross the globe. It tworks wwith local, nation and multi-natio nal onal industrial clie ents to create seamless, consistent and tailor made industrial real e t e estate solutions that deliver betterrbusiness performance thr s rough constantly seeking to improve shareholder valu and maximize co saving opportu e ue ost unities.The tea are experts on all types of indu am n ustrial property an bring a wealth of experience wh nd hether relocating new premises, disposing of surplus accommodation, sprovidin an up-to-date appreciation of market conditions or acquiring and dis ng a r sposing of develop pment land.Jim Die eter John C. Morris s Peter W. Quinn, IV, S SIOR Jamie KishelExecutiv Vice President ve Senior Managing Director g Execut Managing Dire tive ector Director of Op perationsU.S. Ind dustrial Platform Global Business Consulting Busines Development & Operations ss U.S. Industrial S ServicesTel: (84 518-3225 47) Tel: (847) 518-3218 Global Supply Chain Solu utions Tel: (847) 518-33240jim.diete er@cushwake.com m john.morris@cu ushwake.com Tel: (31 7) 713-2107 jamie.kishel@cu ushwake.com peter.q quinn@cushwake.c comOUR R RESEARCH SERVICESThe Res search Group prov vides a strategic advisory and suppo orting role to our clients. Through d delivery of timely, accurate, high-quality research reports, we aim to as ssist ourclients in making property decision that me their objectives and enhance their competitive pos n y eet s sition.For rese earch related quer ries, please contact:Maria S Sicola Tina Arambulo o Stuart Barron t Jose Luis Rubi iExecutiv Managing Direc ve ctor Regional Directo or Nationa Research Direct al tor ManagerAmerica as U.S. Industrial Re esearch Canada a Mexico Market ResearchTel: (415) 773-3542 Tel: (562) 276-14411 Tel: (41 359-2652 16) Tel: (52-55) 85 25 80 00 cola@cushwake.commaria.sic tina.arambulo@c cushwake.com barron@cushwake stuart.b e.com joseluis.rubi@cu ushwake.com For industry-leading intelligence to suppo your real estate and business decisi ort ions, go to Cushma & Wakefield’s Kn an nowledge Center at www.cushmanwak t kefield.com/knowle edge Cushm & Wakefield World Headquarters man W The market terms and definit T tions in this report are based on NAIOP standards. d 1290 A Avenue of the Am mericas No warranty or representatio express or implied, is ma to the accuracy or comp N in on, ade nformation contained herein, and same is submitted subje to errors, omissions, cha ect pleteness of the ange of price, rental or New YYork, NY 10104-6 6178 other conditions, withdrawal without notice, and to any s o special listing conditions impo osed by our principals. www.cushmanwakefieldd.com/knowledge © 2012 Cushman & Wakefiel Inc. All rights reserved. ld,